1
EXHIBIT 10.5.1
U.S.$105,000,000
AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT,
dated as of October 2, 1995,
(amending and restating the Credit and Guaranty Agreement
dated as of January 17, 1995)
among
E-Z SERVE CONVENIENCE STORES, INC.
as Borrower,
E-Z SERVE CORPORATION,
as Guarantor,
CERTAIN FINANCIAL INSTITUTIONS,
as Lenders,
and
SOCIETE GENERALE,
as Agent for the Lenders.
2
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
4.1. LIBO Rate Lending Unlawful . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
4.2. Deposits Unavailable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
4.3. Increased Costs, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
4.4. Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
4.5. Increased Capital Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
4.6. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
4.7. Payments, Computations, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
4.8. Sharing of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
4.9. Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
4.10. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE V
CONDITIONS TO EFFECTIVENESS AND CREDIT EXTENSIONS
5.1. Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
5.1.1. Resolutions, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
5.1.2. Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
5.1.3. Delivery of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
5.1.4. Beverage License Certification Date; Merger of
Sunshine and the Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
5.1.5. Required Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
5.1.6. Termination of Sunshine Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
5.1.7. Transfer of Sunshine Trademarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
5.1.8. Financial Information, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
5.1.9. Affirmation and Acknowledgement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
5.1.10. UCC Search Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
5.1.11. Amendment to Borrower Security Agreement, Filings,
etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
5.1.12. Solvency Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
5.1.13. Closing Date Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
5.1.14. Evidence of Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
5.1.15. Payment of Outstanding Indebtedness, Payment of
Fees and Interest, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
5.1.16. Opinions of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
5.1.17. Agent's Closing Fees, Expenses, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
5.1.18. Borrowing Base Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
5.1.19. Effective Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
5.1.20. Stockholders' Acknowledgment and Confirmation . . . . . . . . . . . . . . . . . . . . . . . . . 61
5.1.21. Satisfactory Legal Form, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
5.2. Conditions to Credit Extensions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
5.2.1. Compliance with Warranties, No Default, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . 61
5.2.2. Credit Extension Request, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1. Organization, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
6.2. Due Authorization, Non-Contravention, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
6.3. Government Approval, Regulation, Compliance
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with Law, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
6.4. Validity, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
6.5. Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
6.6. No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
6.7. Litigation, Labor Controversies, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
6.8. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
6.9. Ownership of Properties; Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
6.10. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
6.11. Pension and Welfare Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
6.12. Environmental Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
6.13. Accuracy of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
6.14. Confirmation of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . 70
6.15. Expropriation and Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
6.16. Intellectual Property Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
6.17. Ownership of Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
6.18. Absence of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
6.19. Regulations G, U and X . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
6.20. Government Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
6.21. Burdensome Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
6.22. List of Guaranty Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
ARTICLE VII
COVENANTS
7.1. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
7.1.1. Financial Information, Reports, Notices, etc. . . . . . . . . . . . . . . . . . . . . . . . . . 73
7.1.2. Compliance with Laws, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
7.1.3. Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
7.1.4. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
7.1.5. Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
7.1.6. Environmental Covenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
7.1.7. As to Intellectual Property Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
7.1.8. Future Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
7.1.9. Springing Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
7.1.10. Gasoline Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
7.1.11. Rate Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
7.1.12. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
7.2. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
7.2.1. Business Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
7.2.2. Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
7.2.3. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
7.2.4. Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
7.2.5. Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
7.2.6. Restricted Payments, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
7.2.7. Capital Expenditures, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
7.2.8. Rental Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
7.2.9. Take or Pay Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
7.2.10. Consolidation, Merger, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
7.2.11. Asset Dispositions, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
7.2.12. Modification of Certain Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
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7.2.13. Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
7.2.14. Negative Pledges, Restrictive Agreements, etc. . . . . . . . . . . . . . . . . . . . . . . . . . 95
7.2.15. Management and Director Fees, Expenses, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . 96
7.2.16. Environmental Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
7.2.17. Fiscal Year End . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
7.2.18. Activities of the Parent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
7.2.19. Activities of Certain Subsidiaries of the Parent . . . . . . . . . . . . . . . . . . . . . . . . 97
ARTICLE VIII
EVENTS OF DEFAULT
8.1. Listing of Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
8.1.1. Non-Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
8.1.2. Breach of Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
8.1.3. Non-Performance of Certain Covenants and
Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
8.1.4. Non-Performance of Other Covenants and Obligations . . . . . . . . . . . . . . . . . . . . . . . 98
8.1.5. Default on Other Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
8.1.6. Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
8.1.7. Pension Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
8.1.8. Change in Control; Stockholders Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
8.1.9. Bankruptcy, Insolvency, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
8.1.10. Impairment of Security, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
8.1.11. Beverage Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
8.2. Action if Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
8.3. Action if Other Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
ARTICLE IX
GUARANTY
9.1. The Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
9.2. Guaranty Unconditional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
9.3. Reinstatement in Certain Circumstances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
9.4. Waiver by the Parent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
9.5. Postponement of Subrogation, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
9.6. Stay of Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
ARTICLE X
THE AGENT
10.1. Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
10.2. Funding Reliance, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
10.3. Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
10.4. Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
10.5. Credit Extensions by SG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
10.6. Credit Decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
10.7. Loan Documents, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
10.8. Copies, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
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ARTICLE XI
MISCELLANEOUS PROVISIONS
11.1. Waivers, Amendments, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
11.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
11.3. Payment of Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
11.4. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
11.5. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
11.6. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
11.7. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
11.8. Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
11.9. Governing Law; Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
11.10. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
11.11. Sale and Transfer of Loans and Notes;
Participations in Loans and Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
11.11.1. Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
11.11.2. Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
11.11.3. Certain Other Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
11.12. Other Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
11.13. Certain Collateral and Other Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
11.14. Confidential Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
11.15. Forum Selection and Consent to Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . 117
11.16. Waiver of Jury Trial, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
11.17. Re-Allocation of Loans, Letters of
Credit Outstanding and Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
SCHEDULE I - Disclosure Schedule
SCHEDULE II - Percentages
SCHEDULE III - Capital Expenditure Levels II and III
SCHEDULE IV - Administrative Information
SCHEDULE V - Sunshine United States Trademarks
EXHIBIT A - Form of Revolving Note
EXHIBIT B - Form of Term Note
EXHIBIT C-1 - Form of Borrowing Request
EXHIBIT C-2 - Form of Continuation/Conversion Notice
EXHIBIT D - Form of Issuance Request
EXHIBIT E - Form of Borrowing Base Certificate
EXHIBIT F - Form of Compliance Certificate
EXHIBIT G-1 - Conformed copy of Parent Pledge Agreement
EXHIBIT G-2 - Conformed copy of Borrower Pledge Agreement
EXHIBIT H-1 - Conformed copy of Borrower Security Agreement
EXHIBIT H-2 - Conformed copy of Petroleum Security Agreement
EXHIBIT H-3 - Conformed copy of Parent Security Agreement
EXHIBIT I - Amendment No. 1 to Security Agreement
(Trademark)
EXHIBIT J - Conformed copy of Petroleum Guaranty
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EXHIBIT K-1 - Conformed copy of Petroleum Note
EXHIBIT K-2 - Conformed copy of Parent Inter-Company Note
EXHIBIT L - Form of Closing Date Certificate
EXHIBIT M - Form of CFO/CEO Solvency Certificates
EXHIBIT N - Conformed copy of Stockholders Letter of
Understanding
EXHIBIT O - Form of Lender Assignment Agreement
EXHIBIT P - Form of Affirmation and Acknowledgement
EXHIBIT Q - Form of Opinion of Counsel to the Obligors
EXHIBIT R - Form of Bankruptcy Court Order
EXHIBIT S - Form of Sunshine Letter of Credit
EXHIBIT T - Form of Amendment to Borrower Security
Agreement
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AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT
AMENDED AND RESTATED CREDIT AND GUARANTY AGREEMENT, dated as of
October 2, 1995 (amending and restating the Credit and Guaranty Agreement,
dated as of January 17, 1995), among E-Z SERVE CONVENIENCE STORES, INC., a
Delaware corporation (the "Borrower"), E-Z SERVE CORPORATION, a Delaware
corporation (the "Parent"), the various financial institutions as are or may
become parties hereto (collectively, the "Lenders") and SOCIETE GENERALE
("SG"), as agent (in such capacity, the "Agent") for the Lenders.
W I T N E S S E T H:
WHEREAS, the Borrower is a direct, wholly-owned Subsidiary (such
capitalized term and other capitalized terms used in these recitals without
definition shall have the meanings provided for in Section 1.1) of the Parent
which also owns, as a direct, wholly-owned Subsidiary, E-Z Serve Petroleum
Marketing Inc., a Delaware corporation ("Petroleum"); and
WHEREAS, the Borrower is engaged in the business of owning and
operating convenience stores and Petroleum is engaged in the business of owning
and operating gasoline stations, some of which also house convenience stores;
and
WHEREAS, the Borrower entered into the Credit and Guaranty Agreement,
dated as of January 17, 1995, among the Borrower, the Parent, the Lenders party
thereto and the Agent (the "Original Credit Agreement"), pursuant to which the
Borrower obtained commitments to make credit extensions comprised of loans and
letters of credit in an aggregate principal and stated amount not to exceed
$60,000,000 at any one time outstanding; and
WHEREAS, such commitments provided financing to, among other things,
enable the Borrower to acquire Time Saver Stores, Inc., from Xxxxxx Companies,
Inc.; and
WHEREAS, the Original Credit Agreement has been amended and otherwise
modified by (a) Amendment Xx. 0, xxxxx xx xx Xxxxx 00, 0000, (x) Amendment No.
2 and Waiver No. 1, dated as of June 15, 1995 and (c) Amendment No. 3 and
Waiver No. 2 ("Amendment No. 3"), dated as of July 21, 1995 (the Original
Credit Agreement, as amended and modified by all of the foregoing, is hereafter
referred to as the "Existing Credit Agreement"); and
WHEREAS, the Parent and EZS Acquisition Corporation, a Delaware
corporation and a direct wholly-owned subsidiary of the Parent ("Acquisition"),
entered into the Agreement and Plan of Merger (the "Merger Agreement"), dated
as of June 15, 1995, with
8
Sunshine-Jr. Stores, Inc., a Florida corporation ("Sunshine"); and
WHEREAS, pursuant to the Merger Agreement, the Parent caused
Acquisition to make a tender offer to acquire all of the 1,701,650 outstanding
shares of common stock, par value $.10 per share, of Sunshine; and
WHEREAS, pursuant to Amendment No. 3, the Borrower obtained Tender
Loans (as defined therein) on the date of the consummation of such tender offer
in an aggregate principal amount of $15,136,984 to finance the purchase by
Acquisition of over 97% of the outstanding shares of Sunshine pursuant to such
tender offer; and
WHEREAS, upon consummation of such tender offer, the Parent caused
Acquisition to merge with and into Sunshine, with Sunshine being the survivor
of such merger (and a direct wholly-owned Subsidiary of the Parent) in
accordance with the terms and conditions of the Merger Agreement (the "First
Merger"); and
WHEREAS, concurrently with the First Merger, each then outstanding
share of Sunshine (other than shares owned by the Parent or any of its
Subsidiaries) was converted into the right to receive $12.00 in cash; and
WHEREAS, pursuant to Amendment No. 3, the Borrower obtained First
Merger Loans (as defined therein) in an aggregate principal amount of
$15,400,000 which, among other things, refinanced the Tender Loans (as defined
therein) on the date of the consummation of the First Merger; and
WHEREAS, the Borrower now desires to merge Sunshine with and into the
Borrower, with the Borrower being the surviving corporation (the "Merger"),
and, in connection therewith, to (a) obtain $20 million to (i) refinance
approximately $12 million in Indebtedness of Sunshine (net of cash on hand at
Sunshine), (ii) refinance $5 million in cash supplied by the Borrower in
connection with the Sunshine tender offer, and (iii) pay fees and expenses not
yet paid in connection with such tender offer, the First Merger and the Merger
(so long as the aggregate of such fees and expenses does not exceed $3,000,000)
and (b) to restate all of the Indebtedness and commitments under the Existing
Credit Agreement such that:
(i) new Term Loans will be made to the Borrower on the date
the Merger is consummated in an aggregate principal amount not to
exceed $20,000,000 solely for the purposes of refinancing Indebtedness
of Sunshine outstanding immediately prior to the Merger and for the
other purposes set forth in clause (a) of the immediately preceding
recital, and such Term Loans shall be consolidated with the $45
million in
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Term Loans outstanding under the Existing Credit Agreement and $15
million of the First Merger Loans outstanding under the Existing
Credit Agreement so that Term Loans in an aggregate principal amount
of $80,000,000 shall be outstanding hereunder with a revised
amortization schedule as set forth herein;
(ii) Revolving Loan Commitments will be extended by the
Lenders pursuant to which Revolving Loans will be made from time to
time in a maximum aggregate principal amount at any one time
outstanding not to exceed the lesser of $25,000,000 (of which
$400,000, and no more than $400,000, may be used to refinance a
portion of the First Merger Loans) and the Borrowing Base Amount in
effect at such time for the Borrower's working capital purposes; and
(iii) Letter of Credit Commitments pursuant to which the
Issuer will issue Letters of Credit from time to time for the account
of the Borrower for the Borrower's ordinary course of business
purposes and for the purpose of submitting the Sunshine Letter of
Credit to the Bankruptcy Court, all of such Letters of Credit to be in
a maximum aggregate Stated Amount at any one time outstanding not to
exceed $15,000,000; provided that, in any event, the aggregate
outstanding principal amount of all Revolving Loans, together with the
aggregate amount of all Letter of Credit Outstandings, shall not at
any one time exceed the lesser of $25,000,000 and the Borrowing Base
Amount plus the Letter of Credit Outstandings in respect of the
Sunshine Letter of Credit in effect at such time; and
WHEREAS, the Borrower and the Parent have also requested that certain
covenants and other provisions of the Existing Credit Agreement be modified as
set forth herein; and
WHEREAS, the Lenders and the Issuer are willing, on the terms and
subject to the conditions hereinafter set forth (including that the Bankruptcy
Court shall have duly issued the Bankruptcy Court Order, which order shall be
in full force and effect and shall not have been stayed, and including all
other conditions contained in Article V), to extend such Commitments and make
such Loans to the Borrower and issue (or participate in) Letters of Credit for
the account of the Borrower and to make such modifications to the covenants and
other provisions contained in the Existing Credit Agreement; and
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WHEREAS, pursuant to the Existing Credit Agreement, the Parent and the
Borrower and certain of their Subsidiaries granted to the Agent for the benefit
of the Lenders certain guaranties and first priority, perfected pledges and
security interests and/or liens in the collateral delivered pursuant to certain
Security Agreements, Pledge Agreements and Guaranties and in certain other Loan
Documents, all as more particularly set forth in such Loan Documents; and
WHEREAS, in order to induce the Lenders, each Issuer and the Agent to
amend and restate the Existing Credit Agreement and to make Credit Extensions
hereunder, the Borrower desires, and it is a condition to the effectiveness
hereof, that the Guarantor and its Subsidiaries and the Borrower and its
Subsidiaries confirm their respective grants to the Agent for the benefit of
the Lenders of the aforementioned first priority, perfected pledges and
security interests and/or liens in such collateral to secure all Obligations
under and in connection with this Agreement and the documents executed in
connection herewith and confirm all related guaranties and pledge agreements,
and grant certain additional collateral, all as more particularly set forth in
the Loan Documents; and
WHEREAS, the outstanding Loans and Commitments of certain of the
Lenders under the Existing Credit Agreement have been re-allocated among the
credit facilities provided for hereunder, and certain new Lenders have become
parties to this Agreement, so that after giving effect thereto the Percentages
of all Lenders are as set forth on Schedule II hereto;
NOW, THEREFORE, the parties hereto hereby agree to amend the Existing
Credit Agreement in its entirety, and to restate the Existing Credit Agreement
as so amended, as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
"Account" means any "account" (as that term is defined in Section
9-106 of the U.C.C.).
"Account Debtor" is defined in clause (d) of the definition of
"Eligible Account".
"Acquisition" is defined in the sixth recital.
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"Affiliate" of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any Plan). A Person shall be deemed to be "controlled by" any
other Person if such other Person has, directly or indirectly,
(a) power to vote 10% or more of the securities (on a fully
diluted basis) or other interests having ordinary voting power for the
election of directors or managing general partners;
(b) power to direct or cause the direction of the management
and policies of such Person whether by contract or otherwise; or
(c) beneficial ownership of 10% or more of any class of the
voting stock of such Person or 10% or more of all outstanding equity
interests in such Person.
For purposes of this Agreement and the other Loan Documents, DLJ and its
Affiliates shall be Affiliates of the Borrower.
"Affirmation and Acknowledgement" means the Affirmation and
Acknowledgement, substantially in the form of Exhibit P hereto, as amended,
supplemented, restated of otherwise modified from time to time.
"Agent" is defined in the preamble and includes each other Person as
shall have subsequently been appointed as the successor Agent pursuant to
Section 10.4.
"Agreement" means the Existing Credit Agreement, as amended and
restated by this Amended and Restated Credit and Guaranty Agreement and as
further amended, supplemented, restated or otherwise modified from time to
time.
"Amendment No. 3" is defined in the fifth recital.
"Authorized Officer" means, relative to any Obligor, those of its
officers whose signatures and incumbency shall have been certified to the Agent
and the Lenders pursuant to Section 5.1.1.
"Bankruptcy Court" means the United States Bankruptcy Court for the
Middle District of Florida (Tampa Division).
"Bankruptcy Court Order" means a duly issued order of the Bankruptcy
Court in the form of Exhibit R hereto.
"Base Rate Loan" means a Loan bearing interest at a fluctuating
interest rate determined by reference to the SG Base Rate.
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"Beverage License" means any authorization, permit, consent, approval,
franchise, concession, ordinance, registration, certificate, license, agreement
or other right filed with, granted by, or entered into by a federal, state or
local governmental authority which permits or authorizes the sale or
distribution of any alcoholic beverage.
"Beverage License Certification Date" means the date as of which (a)
the Borrower and, to the extent required by applicable law, the Parent have all
or substantially all Beverage Licenses necessary to permit, at the convenience
stores owned or operated by Sunshine prior to the Merger, the sale and
distribution of the alcoholic beverages sold or distributed at such convenience
stores as of the Effective Date, including all consents and approvals, if any,
necessary to take into account effectuation of the Merger, and (b) the Agent
shall have received (i) a certificate duly executed by the chief financial
Authorized Officer of the Parent certifying the foregoing, together with (ii)
all documents related thereto that the Agent may reasonably request. For the
purposes of the preceding clause (a), "substantially all Beverage Licenses"
shall not be construed to mean less than all the Beverage Licenses necessary to
permit, at 90% of the convenience stores owned or operated by Sunshine
immediately prior to the Effective Date, the sale and distribution of the
alcoholic beverages sold or distributed at such convenience stores as of the
Effective Date; provided that such 90% may include each convenience store as to
which the Borrower, after the exercise of its best efforts, has not obtained
all such Beverage Licenses, to the extent (i) the applicable governmental
authority has represented to and assured the Borrower that any such Beverage
Licenses are forthcoming, (ii) such convenience store has not suffered any
interruption in its sales of alcoholic beverages as a result thereof and (iii)
the Borrower has represented the foregoing in the certificate referred to in
clause (b) of the preceding sentence.
"Borrower" is defined in the preamble.
"Borrower Pledge Agreement" means the Pledge Agreement, executed and
delivered pursuant to the Existing Credit Agreement, dated as of January 17,
1995, a conformed copy of which is attached as Exhibit G-2 hereto, as the same
may be amended, supplemented, restated or otherwise modified from time to time.
"Borrower Security Agreement" means the Borrower Security Agreement,
executed and delivered pursuant to the Existing Credit Agreement, dated as of
January 17, 1995, a conformed copy of which is attached as Exhibit H-1 hereto,
together with the Security Agreement (Trademark) related thereto, a conformed
copy of which is attached to such Borrower Security Agreement and Amendment
No. 1 to such Security Agreement (Trademark) substantially in the form of
Exhibit I attached hereto, in each
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case as amended, supplemented, restated or otherwise modified from time to
time.
"Borrowing" means the Loans of the same type and, in the case of LIBO
Rate Loans, having the same Interest Period, made by all Lenders on the same
Business Day and pursuant to the same Borrowing Request in accordance with
Section 2.1.
"Borrowing Base Amount" means, at any time, an amount equal to the sum
of, without duplication,
(a) 80% of the aggregate amount of all Eligible Accounts at
such time; and
(b) 50% of the aggregate amount of all Eligible Inventory at
such time.
The Borrowing Base Amount shall initially be computed by the Borrower in each
Borrowing Base Certificate delivered from time to time to the Agent pursuant to
Section 5.1.18 and clause (d) of Section 7.1.1. The Agent shall have the right
to review such computations and if, in the Agent's reasonable judgment, such
computations have not been computed in accordance with the terms of this
Agreement, the Agent shall have the right to adjust such computations.
"Borrowing Base Certificate" means a certificate duly completed and
executed by the chief accounting or financial Authorized Officer of the
Borrower, substantially in the form of Exhibit E hereto, together with such
changes thereto as the Agent may from time to time reasonably request for the
purpose of monitoring the Borrower's compliance therewith.
"Borrowing Request" means a loan request and certificate duly executed
by an Authorized Officer of the Borrower, substantially in the form of Exhibit
C-1 hereto.
"Business Acquisition" means (a) any Investment in the capital stock
of any Person or (b) any acquisition of the assets of any Person pursuant to a
transaction not in the ordinary course of such Person's business.
"Business Day" means
(a) any day which is neither a Saturday or Sunday nor a legal
holiday on which banks are authorized or required to be closed in New
York, New York or New Orleans, Louisiana; and
(b) relative to the making, continuing, prepaying or repaying
of any LIBO Rate Loan, any day which is a Business Day described in
clause (a) above and which is also a day on
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which dealings in Dollars are carried on in the interbank eurodollar
market of the Agent's LIBOR Office.
"Capital Expenditure Level" means, with respect to any Fiscal Year and
for purposes of Section 7.2.7, Capital Expenditure Level I, Capital Expenditure
Level II, Capital Expenditure Level III or Capital Expenditure Level IV, based
on the Fixed Charge Coverage Ratio as of the last day of such Fiscal Year and
EBITDA for such Fiscal Year, in accordance with the following clauses (a) and
(b):
(a) with respect to any Fiscal Year, if EBITDA for such
Fiscal Year is equal to or greater than the amount set forth below
opposite such Fiscal Year, Capital Expenditure Level I shall be
applicable to such Fiscal Year so long as the Fixed Charge Coverage
Ratio as of the last day of such Fiscal Year is equal to or greater
than the ratio set forth below opposite such Fiscal Year:
Minimum EBITDA
for Capital Minimum Fixed Charge Coverage Ratio
Expenditure for Capital Expenditure
Fiscal Year Level I Level I
----------- -------------- -----------------------------------
1995 $26,100,000 1.00:1.00
1996 37,700,000 1.05:1.00
1997 41,500,000 1.15:1.00
1998 45,000,000 1.25:1.00
1999 48,400,000 1.35:1.00
2000 52,400,000 1.45:1.00
2001 57,100,000 1.45:1.00
(b) if Capital Expenditure Level I shall not be applicable to
a Fiscal Year in accordance with the preceding clause (a), then (i)
the Capital Expenditure Level set forth opposite the highest level of
EBITDA set forth in Schedule III hereto with respect to such Fiscal
Year that has been met by the Parent and its Subsidiaries with respect
to such Fiscal Year shall be applicable to such Fiscal Year so long as
the Fixed Charge Coverage Ratio as of the last day of such Fiscal Year
(the "Subject Fixed Charge Coverage Ratio") is equal to or greater
than the ratio set forth in Schedule III hereto opposite such Capital
Expenditure Level; provided that, if such Subject Fixed Charge
Coverage Ratio is not equal to or greater than such ratio set forth in
Schedule III hereto, then Capital Expenditure Level IV shall be
applicable to such Fiscal Year.
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"Capital Expenditures" means, for any period, without duplication, the
sum of
(a) the aggregate amount of all expenditures of the Parent
and its Subsidiaries (including the Borrower and its Subsidiaries) (i)
for fixed or capital assets made during such period which, in
accordance with GAAP, would be classified as capital expenditures and
(ii) to the extent not included in the preceding subclause (i), in
respect of Business Acquisitions made during such period; and
(b) the aggregate amount of all Capitalized Lease Liabilities
incurred during such period.
"Capitalized Lease Liabilities" means all monetary obligations of the
Parent or any of its Subsidiaries (including the Borrower and its Subsidiaries)
under any leasing or similar arrangement which, in accordance with GAAP, would
be classified as capitalized leases, and, for purposes of this Agreement and
each other Loan Document, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP, and the stated
maturity thereof shall be the date of the last payment of rent or any other
amount due under such lease prior to the first date upon which such lease may
be terminated by the lessee without payment of a penalty.
"Cash Equivalent Investment" means, at any time:
(a) any evidence of Indebtedness, maturing not more than one
year after the date of issuance, issued or guaranteed by the United
States Government;
(b) commercial paper, maturing not more than nine months from
the date of issuance and rated at least A-1 by Standard & Poor's
Ratings Services, a division of The XxXxxx-Xxxx Companies, Inc., or
P-1 by Xxxxx'x Investors Service, Inc., which is issued by
(i) a corporation (other than an Affiliate of any
Obligor) organized under the laws of any state of the United
States or of the District of Columbia, or
(ii) any Lender or any Affiliate thereof;
(c) any certificate of deposit or bankers acceptance,
maturing not more than one year after such time, which is issued by
(i) a Lender or (ii) a commercial banking institution that (A) is a
member of the Federal Reserve System, (B) has a combined capital and
surplus and undivided profits of not less than $1,000,000,000 and (C)
has outstanding short-term debt securities which are rated at least
A-1 by Standard & Poor's Ratings Services, a division
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of The XxXxxx-Xxxx Companies, Inc., or P-1 by Xxxxx'x Investors
Services, Inc.;
(d) any repurchase agreement entered into with any Lender (or
other commercial banking institution of the stature referred to in
clause (c)) secured by a fully perfected Lien in any obligation
thereunder of the type described in any of clauses (a) through (c),
having a market value at the time such repurchase agreement is entered
into of not less than 100% of the repurchase obligation thereunder of
such Lender or other commercial banking institution; or
(e) any money market mutual fund with a daily right of
redemption and a net asset value of $1.00 per share substantially all
the assets of which are comprised of investments of the types
described in the preceding clauses (a) through (d).
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.
"Change in Control" means
(a) the failure of the Stockholders at any time (i) to own
beneficially free and clear of all Liens at all times, at least 52.35%
of the issued and outstanding shares of common stock of the Parent
(both voting and non-voting), on a fully diluted basis, and (ii) to
have and exercise voting power for the election of at least a majority
of the board of directors of the Parent;
(b) the direct or indirect acquisition by any Person or a
group (as such term is defined in Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended), other than the Stockholders, of
beneficial ownership (as such term is defined in Rule 13D-3
promulgated under the Securities Exchange Act of 1934, as amended) of
25% or more of the outstanding shares of common stock of the Parent;
(c) the failure of the Parent at any time to own beneficially
100% of the issued and outstanding shares of common stock of the
Borrower (both voting and non-voting) free and clear of all Liens
(other than Liens in favor of the Agent arising pursuant to the Parent
Pledge Agreement), on a fully diluted basis; or
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(d) a change in the majority of the board of directors of the
Parent unless approved by the then majority of the board of directors
of the Parent.
"Class 7 Claimants" means each of the Class 7 Claimants listed on
Annex A to the Sunshine Letter of Credit.
"Clean-Down Period" is defined in Section 3.1.2(e).
"Code" means the Internal Revenue Code of 1986, as amended, reformed
or otherwise modified from time to time.
"Collateral" means any assets of the Borrower or any of its
Subsidiaries or of any other Obligor subject to a Lien pursuant to any Loan
Document.
"Commitment" means, as the context may require, a Lender's Revolving
Loan Commitment, Term Loan Commitment or Letter of Credit Commitment.
"Commitment Amount" means, as the context may require, either the
Revolving Loan Commitment Amount, the Term Loan Commitment Amount or the Letter
of Credit Commitment Amount.
"Commitment Termination Event" means
(a) the occurrence of any Default described in clauses (b)
through (d) of Section 8.1.9; or
(b) the occurrence and continuance of any other Event of
Default and either
(i) the declaration of the Loans to be due and
payable pursuant to Section 8.3, or
(ii) the giving of notice by the Agent, acting at
the direction of the Required Lenders, to the Borrower that
the Commitments have been terminated.
"Compliance Certificate" means a certificate duly executed by the
chief accounting or financial Authorized Officer of the Parent, substantially
in the form of Exhibit F hereto, together with such changes thereto as the
Agent may from time to time reasonably request for the purpose of monitoring
the Borrower's and the Parent's compliance with the financial covenants
contained herein.
"Contingent Liability" means any agreement, undertaking or arrangement
by which any Person guarantees, endorses or otherwise becomes or is
contingently liable upon (by direct or indirect agreement, contingent or
otherwise, to provide funds for payment, to supply funds to, or otherwise to
invest in, a debtor, or
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otherwise to assure a creditor against loss) the indebtedness, obligation or
any other liability of any other Person (other than by endorsements of
instruments in the course of collection), or guarantees the payment of
dividends or other distributions upon the shares of any other Person. The
principal amount of any Person's obligation under any Contingent Liability
shall (subject to any limitation set forth therein) be deemed to be the
outstanding principal amount (or maximum principal amount, if larger) of the
debt, obligation or other liability guaranteed thereby.
"Continuation/Conversion Notice" means a notice duly executed by an
Authorized Officer of the Borrower, substantially in the form of Exhibit C-2
hereto.
"Controlled Group" means all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with the
Parent or any Subsidiary, are treated as a single employer under Section 414(b)
or 414(c) of the Code or Section 4001 of ERISA.
"Credit Extension" means, as the context may require,
(a) the making of a Loan by a Lender; or
(b) the issuance of any Letter of Credit, the extension of
any Stated Expiry Date of any existing Letter of Credit or the
increase in the Stated Amount of any existing Letter of Credit, in
each case by an Issuer.
"Credit Extension Request" means, as the context may require, any
Borrowing Request or Issuance Request.
"Default" means any Event of Default or any condition, occurrence or
event which, after notice or lapse of time or both, would constitute an Event
of Default.
"Delight" means Delight Distributing and Sales Co., Inc., a Louisiana
corporation.
"Disbursement" is defined in Section 2.7.2.
"Disbursement Date" is defined in Section 2.7.2.
"Disclosure Schedule" means the Disclosure Schedule attached hereto as
Schedule I, as it may be amended, supplemented or otherwise modified from time
to time by the Borrower with the written consent of the Agent and the Required
Lenders.
"DLJ" means DLJ Capital Corporation.
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"Dollar" and the symbol "$" mean lawful money of the United States.
"Domestic Office" means, relative to any Lender, the office of such
Lender designated as such on Schedule IV hereto or designated in a Lender
Assignment Agreement, or such other office of a Lender (or any successor or
assign of such Lender) within the United States as may be designated from time
to time by notice from such Lender to each other Person party hereto.
"EBIT" means, for any period, the sum, without duplication, of
(a) Net Income for such period;
plus
(b) the amounts deducted, in determining Net Income for such
period, for
(i) all income taxes paid by, or accrued to be paid
by, the Parent and its Subsidiaries during such period in
respect of such period (assuming utilization of all available
Net Operating Losses to the extent permitted by the Code),
plus
(ii) Interest Expense for such period.
"EBITDA" means, for any period, the sum, without duplication, for such
period, of
(a) EBIT;
plus
(b) the amount deducted, in determining Net Income for such
period, for amortization and depreciation of assets of the Parent and
its Subsidiaries during such period.
"Effective Date" means the date this Agreement becomes effective
pursuant to Section 5.1.
"Eligible Account" means, at any time of determination thereof, any
Account of the Borrower or any other Subsidiary of the Parent as to which each
of the following requirements has been fulfilled to the reasonable satisfaction
of the Agent:
(a) the Borrower or such Subsidiary has lawful and absolute
title to such Account, free and clear of all Liens
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other than the Liens in favor of the Agent for the benefit of the
Lenders;
(b) the Agent has a security interest in such Account, which
security interest is legal, valid, binding, perfected and first
priority under the U.C.C.; provided, however, that
(i) no Account as to which any United States federal
or state governmental agency or instrumentality is the Account
Debtor may be an Eligible Account, except to the extent the
Borrower or such Subsidiary has complied with the Assignment
of Claims Act of 1940, as amended (31 U.S.C. Section 3727; 41
U.S.C. Section 15), by delivering to the Agent a notice of
assignment in favor of the Agent under such Act and in
compliance with applicable provisions of 31 C.F.R. Section
7-103.8 and 41 C.F.R. Section 1-30.7, or with similar state
law; and
(ii) no Account as to which any other government or
agency of such government (including any foreign governmental
authority or agency) is the Account Debtor may be an Eligible
Account;
(c) the Borrower or such Subsidiary has the full and
unqualified right to assign and xxxxx x Xxxx in such Account to the
Agent;
(d) such Account is payable in Dollars and is a legal, valid,
binding and enforceable obligation of the Person who is obligated
under such Account (the "Account Debtor");
(e) if such Account is subject to any dispute, setoff,
counterclaim or other claim or defense on the part of the Account
Debtor denying liability under such Account, the portion of such
Account so subject shall be excluded from Eligible Accounts;
(f) such Account is evidenced by an invoice or marketer's
sales report rendered to the Account Debtor and evidences monetary
obligations;
(g) such Account is a bona fide Account which arose in the
ordinary course of business, and with respect to which,
(i) in the case of an Account arising from the sale
of goods, such goods have been shipped or delivered to and not
rejected by the Account Debtor, such Account was created as a
result of a sale on an absolute basis and not on a
consignment, approval or sale-and-return basis and all other
actions necessary to create a binding obligation on the part
of the Account Debtor for such Account have been taken, and
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(ii) in the case of an Account relating to the sale
of services, such services have been performed or completed
and not rejected by the Account Debtor and all other actions
necessary to create a binding obligation on the part of the
Account Debtor have been taken;
(h) with respect to such Account, the Account Debtor is not
(i) an Affiliate of the Borrower, the Parent or any
of their respective Subsidiaries,
(ii) organized or located in a jurisdiction other
than the United States, or
(iii) the subject of any reorganization, bankruptcy,
receivership, custodianship or insolvency or any other
condition of the type described in clauses (b) through (d) of
Section 8.1.9;
(i) such Account is not outstanding more than 60 days past
the due date with respect thereto;
(j) no payment with respect to such Account made by check has
been returned for insufficient funds;
(k) such Account has not been placed with a lawyer or other
agent for collection;
(l) if the Borrower, the Parent or any of their respective
Subsidiaries is indebted to such Account Debtor, unless the Borrower,
the Parent or the relevant Subsidiary, (as the case may be) on the one
hand, and such Account Debtor, on the other hand, have entered into an
agreement whereby the Account Debtor is prohibited from exercising any
right of setoff with respect to the Accounts of the Borrower and the
other Subsidiaries of the Parent, Eligible Accounts shall exclude an
amount equal to the amount of such indebtedness; and
(m) such Account has such other characteristics or criteria
as the Agent, in its reasonable discretion, may specify in writing to
the Borrower from time to time.
"Eligible Inventory" means, at any time of determination thereof, any
Inventory of the Borrower or any other Subsidiary of the Parent arising in the
ordinary course of business and as to which each of the following requirements
has been fulfilled to the reasonable satisfaction of the Agent:
(a) such Inventory is located in the United States;
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22
(b) the Borrower or such Subsidiary has full and unqualified
right to assign and xxxxx x Xxxx in such Inventory to the Agent for
the benefit of the Lenders;
(c) the Borrower or such Subsidiary has full and lawful title
to such Inventory, free and clear of all Liens, other than any Liens
in favor of the Agent for the benefit of the Lenders;
(d) the Agent has a security interest in such Inventory,
which security interest is legal, valid, binding, perfected and first
priority under the U.C.C.;
(e) none of such Inventory shall consist of (i) items in the
custody of third parties for processing or manufacture, (ii) items in
the Borrower's or such Subsidiary's possession but intended by the
Borrower or such Subsidiary for return to the suppliers thereof, (iii)
items belonging to third parties that have been consigned to the
Borrower or such Subsidiary or are otherwise in the Borrower's or such
Subsidiary's custody or possession or (iv) items in the Borrower's or
such Subsidiary's custody and possession on a sale-on-approval or
sale-or-return basis or subject to any other repurchase or return
agreement; and
(f) none of such Inventory (i) is obsolete, unsalable,
damaged or otherwise unfit for sale or further processing in the
ordinary course of business or (ii) has remained unsold in inventory
for more than three months or beyond the manufacturer's expiration or
"sale by" or similar date.
"Environmental Laws" means all applicable federal, state, county,
parish or local statutes, laws, ordinances, codes, rules, regulations and
guidelines (including consent decrees and administrative orders) relating to
public health and safety and protection of the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA also refer to any successor sections.
"Event of Default" is defined in Section 8.1.
"Excess Cash Flow" means, for any Fiscal Year, the excess for such
Fiscal Year of
(a) the sum, determined for such Fiscal Year, of
(i) EBITDA;
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23
plus
(ii) the aggregate proceeds received by the Parent
and its Subsidiaries during such Fiscal Year on account of
business interruption insurance, to the extent not included in
EBITDA;
over
(b) the sum, determined for such Fiscal Year, of
(i) Capital Expenditures permitted by Section 7.2.7
made or incurred by the Parent and its Subsidiaries and paid
in cash during such Fiscal Year;
plus
(ii) all prepayments and repayments of Term Loans
made pursuant to Section 3.1.1 or 3.1.2 (other than pursuant
to Section 3.1.2(c)(ii)(B));
plus
(iii) all income taxes paid by the Parent and its
Subsidiaries in cash during such Fiscal Year in respect of
such Fiscal Year;
plus
(iv) Interest Expense paid in cash during such
Fiscal Year;
plus
(v) to the extent not reflected in EBITDA and to the
extent previously reserved against on the consolidated
financial statements of the Parent and its Subsidiaries, the
excess of (A) the aggregate amount of payments made by the
Parent and its Subsidiaries during such Fiscal Year in respect
of environmental remediation over (B) the aggregate amount of
payments received by the Parent and its Subsidiaries from
governmental authorities administering any trust or similar
fund relating to protection of the environment.
"Excess Insurance Proceeds" means the insurance proceeds received by
the Agent pursuant to clause (d) of Section 7.1.4.
"Existing Credit Agreement" is defined in the fifth recital.
"Facility" means (a) any real property, fixture or appurtenance owned
or operated by the Parent or any of its
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24
Subsidiaries (including the Borrower or any of its Subsidiaries) or
predecessors in interest, (b) any stationary source of air pollution or any air
pollution control equipment owned or operated by the Parent or any of its
Subsidiaries or predecessors in interest, (c) any source of water pollution
(including indirect sources to sewer systems) or any water pollution control
equipment owned or operated by the Parent or any of its Subsidiaries or
predecessors in interest, (d) all contiguous property under the control of the
Parent or any of its Subsidiaries or predecessors in interest, (e) any
building, structure, installation, equipment, pipe or pipeline (including any
pipe into a sewer or publicly owned treatment works), well, pit, pond, lagoon,
impoundment, ditch, landfill, storage container, motor vehicle, rolling stock,
or aircraft owned or operated by the Parent or any of its Subsidiaries or
predecessors in interest, and (f) any site or area where a hazardous substance
provided to or generated by the Parent or any of its Subsidiaries or
predecessors in interest has been deposited, stored, disposed of, or placed, or
otherwise come to be located; but does not include any consumer product in
consumer use or any vessel.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to
(a) the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged
by federal funds brokers, as published for such day (or, if such day
is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York; or
(b) if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such
transactions received by SG from three federal funds brokers of
recognized standing selected by it.
"Fee Letter" means the confidential fee letter, dated June 30, 1995,
from SG, addressed to, and agreed and accepted by, the Borrower and the Parent.
"First Merger" is defined in the ninth recital.
"Fiscal Quarter" means any quarter of a Fiscal Year.
"Fiscal Year" means any period of twelve consecutive calendar months
ending on the last Sunday of each December. References to a Fiscal Year with a
number corresponding to any calendar year (e.g., "Fiscal Year 1995") refer to
the Fiscal Year ending during such calendar year.
"Fixed Charge Coverage Ratio" means, as of the last day of any Fiscal
Quarter, the ratio of:
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(a) EBITDA for the Rolling Period ending on such day minus
all Capital Expenditures of the Parent and its Subsidiaries incurred
or committed to be incurred during such Rolling Period;
to
(b) the sum of
(i) Interest Expense for such Rolling Period;
plus
(ii) all scheduled repayments of Term Loans made
pursuant to Section 3.1.2(b) during such Rolling Period;
plus
(iii) all income taxes paid by the Parent and its
Subsidiaries during such Rolling Period in respect of such
Rolling Period (assuming utilization of all available Net
Operating Losses (to the extent permitted by the Code)).
"F.R.S. Board" means the Board of Governors of the Federal Reserve
System or any successor thereto.
"Funded Debt" means, as of any date of determination, (a) the Stated
Amount of the Sunshine Letter of Credit and (b) any Indebtedness of the Parent
and its Subsidiaries of a type described in clause (a), (b) (to the extent
actually drawn) or (c) of the definition of Indebtedness, or any Contingent
Liability of the Borrower or any of its Subsidiaries in respect of any such
type of Indebtedness, which
(i) is in respect of the Term Loans;
(ii) matures more than one year from such date of
determination;
(iii) matures within one year from such date of determination
but is renewable or extendible, at the option of the Borrower or any
such Subsidiary, as the case may be, to a date more than one year from
such date; or
(iv) arises under a revolving credit or similar agreement
which obligates the lender or lenders thereof to extend such
Indebtedness during a period of more than one year from such date.
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26
"Funded Debt to EBITDA Ratio" means, as of the last day of any Rolling
Period, the ratio of:
(a) Funded Debt as at the last day of such Rolling Period;
to
(b) EBITDA for such Rolling Period.
"GAAP" is defined in Section 1.4.
"Gross Profit Margin" means, as of the last day of any Fiscal Quarter,
the percentage obtained by dividing (a) the excess of total sales of the Parent
and its Subsidiaries for the Rolling Period ending on such day over cost of
goods sold of the Parent and its Subsidiaries for such Rolling Period (in each
case, as determined in accordance with GAAP) by (b) total sales of the Parent
and its Subsidiaries for such Rolling Period (as determined in accordance with
GAAP).
"Gross Transaction Proceeds" means gross cash payments received by the
Parent or any of its Subsidiaries pursuant to the Purchase Agreement in excess
of $250,000 in the aggregate (including any cash payments received by way of
any adjustment to the purchase price provided for therein and any indemnity
payments), other than any such cash payments in respect of indemnity payments
which reimburse the Parent or any of its Subsidiaries for liabilities and costs
previously paid by the Parent or such Subsidiary.
"Guaranteed Obligations" is defined in Section 9.1.
"Guarantor" means the Parent.
"Hazardous Material" means
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource
Conservation and Recovery Act, as amended;
(c) any petroleum product; or
(d) any pollutant or contaminant or hazardous, dangerous or
toxic chemical, material or substance within the meaning of any other
applicable federal, state or local law, regulation, ordinance or
requirement (including consent decrees and administrative orders)
relating to or imposing liability or standards of conduct concerning
any hazardous, toxic or dangerous waste, substance or material, all as
amended or hereafter amended.
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27
"Hedging Obligations" means, with respect to any Person, all
liabilities of such Person under Rate Protection Agreements.
"herein", "hereof", "hereto", "hereunder" and similar terms contained
in this Agreement or any other Loan Document refer to this Agreement or such
other Loan Document, as the case may be, as a whole and not to any particular
Section, paragraph or provision of this Agreement or such other Loan Document.
"Impermissible Qualification" means, relative to the opinion or
certification of any independent public accountant as to any financial
statement of any Obligor, any qualification or exception to such opinion or
certification
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination of
matters relevant to such financial statement; or
(c) which relates to the treatment or classification of any
item in such financial statement and which, as a condition to its
removal, would require an adjustment to such item the effect of which
would be to cause such Obligor to be in default of any of its
obligations under Section 7.2.4.
"including" means including without limiting the generality of any
description preceding such term, and, for purposes of this Agreement and each
other Loan Document, the parties hereto agree that the rule of contract
interpretation to the effect that where general words are followed by a
specific listing of items the general words shall not be given their widest
meaning, shall not be applicable to limit a general statement, which is
followed by or referable to an enumeration of specific matters, to matters
similar to the matters specifically mentioned.
"Indebtedness" of any Person means, without duplication:
(a) all obligations of such Person for borrowed money, all
obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments and all capital stock which has redemption
provisions exercisable at the option of the holder thereof in whole or
in part for cash;
(b) all obligations, contingent or otherwise, relative to the
face amount of all letters of credit, whether or not drawn, and
banker's acceptances issued for the account of such Person;
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28
(c) all obligations of such Person as lessee under leases
which have been or should be, in accordance with GAAP, recorded as
Capitalized Lease Liabilities;
(d) all other items which, in accordance with GAAP, would be
included as liabilities on the liability side of the balance sheet of
such Person as of the date at which Indebtedness is to be determined;
(e) net liabilities of such Person with respect to each
Hedging Obligation;
(f) whether or not so included as liabilities in accordance
with GAAP, all obligations of such Person to pay the deferred purchase
price of property or services, and indebtedness (excluding prepaid
interest thereon) secured by a Lien on property owned or being
purchased by such Person (including indebtedness arising under
conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by such Person or is limited
in recourse; and
(g) all Contingent Liabilities of such Person in respect of
any of the foregoing.
For all purposes of this Agreement, the Indebtedness of any Person shall
include the Indebtedness of any partnership or joint venture in which such
Person is a general partner thereof or has direct liability in the nature of a
general partner.
"Indemnified Liabilities" is defined in Section 11.4.
"Indemnified Parties" is defined in Section 11.4.
"Intellectual Property Collateral" has the meaning provided for such
term in the Security Agreements.
"Interest Coverage Ratio" means, as of the last day of any Fiscal
Quarter, the ratio of:
(a) EBITDA for the Rolling Period ending on such day,
to
(b) Interest Expense for such Rolling Period.
"Interest Expense" means, for any period, the aggregate consolidated
interest expense of the Parent and its Subsidiaries for such period, as
determined in accordance with GAAP, including, without duplication, net
obligations of the Parent and its Subsidiaries (including fees) in respect of
Rate Protection Agreements and the portion of any Capitalized Lease Liabilities
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29
of the Parent and its Subsidiaries allocable to interest expense, in each case
paid or payable during such period.
"Interest Period" means, relative to any LIBO Rate Loan, the period
beginning on (and including) the date on which such LIBO Rate Loan is made or
continued as, or converted into, a LIBO Rate Loan pursuant to Section 2.4 or
2.5 and ending on (but excluding) the day which is one, three or six months
thereafter (or, if such month has no numerically corresponding day, on the last
Business Day of such month), as the Borrower may select in its relevant notice
pursuant to Section 2.4 or 2.5; provided, however, that
(a) the Borrower shall not be permitted to select Interest
Periods to be in effect at any one time which have expiration dates
occurring on more than five different dates;
(b) if such Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the
next following Business Day (unless such next following Business Day
is the first Business Day of a month, in which case such Interest
Period shall end on the Business Day next preceding the day on which
such Interest Period would otherwise end); and
(c) the Borrower shall not be permitted to select, and there
shall not be applicable, any Interest Period that would be broken by
reason of a mandatory payment of Term Loans required pursuant to
clause (b) of Section 3.1.2 or any Interest Period for any Loan which
would end later than the Stated Maturity Date for such Loan.
"Inventory" means any "inventory" (as defined in Section 9-109(4) of
the U.C.C.) of any Person.
"Investment" means, relative to any Person,
(a) any loan or advance made by such Person to any other
Person (excluding commission, travel and similar advances to officers
and employees made in the ordinary course of business);
(b) any Contingent Liability of such Person incurred in
connection with loans or advances made by others to such Person; and
(c) any ownership or similar interest held by such Person in
any other Person.
The amount of any Investment shall be the original principal or capital amount
thereof less all returns of principal or equity thereon (and without adjustment
by reason of the financial
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30
condition of such other Person) and shall, if made by the transfer or exchange
of property other than cash, be deemed to have been made in an original
principal or capital amount equal to the fair market value of such property.
"Issuance Request" means a Letter of Credit request and certificate
duly executed by an Authorized Officer of the Borrower, substantially in the
form of Exhibit D hereto.
"Issuer" means SG in its capacity as issuer of the Letters of Credit.
At the request of SG, another Lender or an Affiliate of SG may, but shall not
be obligated to, issue one or more Letters of Credit hereunder, in which case
the term "Issuer" as used herein shall refer to each of SG, any such Lender and
any such Affiliate of SG.
"Lender Assignment Agreement" means a lender assignment agreement in
substantially the form of Exhibit O hereto.
"Lender" is defined in the preamble.
"Letter of Credit" is defined in clause (a) of Section 2.1.3.
"Letter of Credit Commitment" means, with respect to the Issuer, the
Issuer's obligation to issue Letters of Credit pursuant to Section 2.7 and,
with respect to each of the other Lenders, the obligations of each such Lender
to participate in such Letters of Credit pursuant to Section 2.7.1.
"Letter of Credit Commitment Amount" means, on any date, $15,000,000,
as such amount may be permanently reduced from time to time pursuant to Section
2.3; provided, however, that only $2,700,000 will be available in respect of
the Sunshine Letter of Credit.
"Letter of Credit Outstandings" means, on any date, an amount equal to
the sum of
(a) the then aggregate amount which is undrawn and available
under all issued and outstanding Letters of Credit;
plus
(b) the then aggregate amount of all unpaid and outstanding
Reimbursement Obligations.
"LIBO Rate" is defined in Section 3.2.1.
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31
"LIBO Rate Loan" means a Loan bearing interest, at all times during an
Interest Period applicable to such Loan, at a fixed rate of interest determined
by reference to the LIBO Rate (Reserve Adjusted).
"LIBO Rate (Reserve Adjusted)" is defined in Section 3.2.1.
"LIBOR Office" means, relative to any Lender, the office of such
Lender designated as such on Schedule IV hereto or designated in a Lender
Assignment Agreement, or such other office of a Lender as designated from time
to time by notice from such Lender to the Borrower and the Agent, whether or
not outside the United States, which shall be making or maintaining LIBO Rate
Loans of such Lender hereunder.
"LIBOR Reserve Percentage" is defined in Section 3.2.1.
"Lien" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property to secure payment of a debt or
performance of an obligation or other priority or preferential arrangement of
any kind or nature whatsoever.
"Loan" means, as the context may require, either a Revolving Loan or a
Term Loan.
"Loan Document" means this Agreement, the Notes, the Affirmation and
Acknowledgement, the Petroleum Note, the Parent Inter-Company Note, the Letters
of Credit, the Fee Letter, the Borrower Security Agreement, the Parent Security
Agreement, the Petroleum Security Agreement, the Parent Pledge Agreement, the
Borrower Pledge Agreement, the Petroleum Guaranty, the Stockholders Letter of
Understanding, each Rate Protection Agreement with a Lender, each Lender
Assignment Agreement and each other agreement, instrument or document executed
and delivered pursuant to or in connection with this Agreement and the other
Loan Documents (including the agreements executed from time to time by
Subsidiaries of the Borrower pursuant to Section 7.1.8, the agreements executed
from time to time by Borrower and its Subsidiaries pursuant to Section 7.1.9
and the promissory notes evidencing Indebtedness permitted by clause (h) of
Section 7.2.2).
"Marketers" means those business locations as to which Petroleum or
any other Subsidiary of the Parent only operates or owns the equipment and
inventory relating to the sale and distribution of gasoline products.
"Memorandum" means the Confidential Memorandum, dated July, 1995, with
respect to the Borrower, compiled by the Agent from
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32
information supplied by the Parent and the Borrower and heretofore delivered to
each Lender.
"Merger" is defined in the twelfth recital.
"Merger Agreement" is defined in the sixth recital.
"Merger Certificate" is defined in Section 5.1.4.
"Net Debt Proceeds" means, in the case of the issuance, incurrence,
placement or sale of any Indebtedness (other than Indebtedness in respect of
the Notes) of the type referred to in clause (a) of the definition thereof
(whether pursuant to a public or private offering), permitted to be outstanding
pursuant to Section 7.2.2 or otherwise permitted with the prior consent of the
Required Lenders from and after the effective date of the Original Credit
Agreement, the excess of
(a) the gross cash proceeds received by the Parent or any of
its Subsidiaries from such issuance, incurrence, placement or sale of
permitted Indebtedness (including any cash payments received by way of
deferred payment of principal pursuant to a permitted promissory note
or installment receivable or otherwise, but only as and when
received);
over
(b) in connection with the issuance, incurrence, placement or
sale of permitted Indebtedness, (i) all reasonable and customary fees
and expenses actually paid by the Parent or its Subsidiaries (except
as provided in clause (ii)) and (ii) underwriters' discounts and
commissions not payable to the Parent, any of its Subsidiaries or any
of their Affiliates (other than underwriters' discounts and
commissions payable (x) to DLJ or any of its Affiliates if such
discounts and commissions are the same as the usual and customary
discounts and commissions of DLJ and its Affiliates to Persons which
are not their Affiliates or (y) to any other Stockholder or its
Affiliates if such discounts and commissions would be reasonable and
customary if charged in arm's length transactions by recognized
investment banking institutions which provide underwriting and
placement services in the ordinary course of their business).
"Net Disposition Proceeds" means the excess of
(a) the gross cash proceeds (other than proceeds from any
sale of Inventory of the Parent or any of its Subsidiaries in the
ordinary course of their business) received by the Parent or any of
its Subsidiaries from any
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33
Permitted Disposition with a purchase price in excess of $250,000
(such purchase price to be determined in the same manner as the
purchase price of a Permitted Business Acquisition (as set forth in
clause (b) of the definition thereof)), including any cash payments
received by way of a deferred payment of principal pursuant to a
permitted note or installment receivable or otherwise, but only when
and as received;
over
(b) (i) all reasonable and customary fees and expenses with
respect to legal, investment banking, brokerage, accounting and other
professional fees actually incurred by the Parent and its Subsidiaries
in connection with such Permitted Disposition which have not been paid
to Affiliates of the Parent or any of its Subsidiaries (other than
fees and expenses payable (x) to DLJ or any of its Affiliates if such
fees and expenses are the same as the usual and customary fees and
expenses of DLJ and its Affiliates to Persons which are not their
Affiliates or (y) to any other Stockholder or its Affiliates if such
fees and expenses would be reasonable and customary if charged in
arm's length transactions by recognized investment banking
institutions which provide merger and acquisition advice and services
in the ordinary course of their business), (ii) all taxes actually
paid or estimated by the Parent (in good faith) to be payable in cash
in connection with such Permitted Disposition; provided, however, that
if, after the payment of all taxes with respect to such Permitted
Disposition, the amount of estimated taxes, if any, pursuant to clause
(ii) above exceeded the amount of taxes actually paid in cash in
respect of such Permitted Disposition, the aggregate amount of such
excess shall be immediately payable, pursuant to clause (c) of Section
3.1.2, as Net Disposition Proceeds, and (iii) if permitted hereunder
or otherwise by the Required Lenders, the aggregate amount of any
Indebtedness of the type referred to in clause (a) of the definition
thereof which is secured by such asset and required to be repaid from
such gross cash proceeds;
provided, however, that such cash proceeds shall not constitute Net Disposition
Proceeds to the extent the Parent or its applicable Subsidiary uses such
proceeds within 365 days of the closing date of such Permitted Disposition to
replace the assets disposed in such Permitted Disposition or to reinvest in
other capital assets reasonably related to the ownership and operation of
convenience stores.
"Net Equity Proceeds" means, in the case of the issuance, placement or
sale of equity securities (whether pursuant to a
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34
public or private offering) from and after the effective date of the Original
Credit Agreement, the excess of
(a) the gross cash proceeds received by the Parent or any of
its Subsidiaries or any corporation of which the Parent is a
Subsidiary from such issuance, placement or sale of equity securities
(including any cash payments received by way of deferred payment of
principal pursuant to a permitted promissory note or installment
receivable or otherwise, but only as and when received);
over
(b) in connection with such issuance, placement or sale of
such equity securities, all (i) reasonable and customary fees and
expenses actually paid by the Parent or its Subsidiaries or the Parent
or any corporation of which the Parent is a Subsidiary (except as
provided in clause (ii)) and (ii) underwriters' discounts and
commissions not payable to the Parent, any of its Subsidiaries or any
of their Affiliates (other than underwriters' discounts and
commissions payable (x) to DLJ or any of its Affiliates if such
discounts and commissions are the same as the usual and customary
discounts and commissions of DLJ and its Affiliates to Persons which
are not their Affiliates or (y) to any other Stockholder or its
Affiliates if such discounts and commissions would be reasonable and
customary if charged in arm's length transactions by recognized
investment banking institutions which provide underwriting and
placement services in the ordinary course of their business).
"Net Income" means, for any period, all amounts (exclusive of all
amounts in respect of any extraordinary gains or losses) which, in accordance
with GAAP, would be included as net income on the consolidated statements of
income of the Parent and its Subsidiaries for such period.
"Net Operating Loss" means all net operating losses incurred by the
Parent and its Subsidiaries, as shown on any federal tax return (as amended or
otherwise modified) filed or to be filed by the Parent.
"Note" means, as the context may require, either a Revolving Note or a
Term Note.
"Obligations" means all obligations (monetary or otherwise) of the
Borrower and each other Obligor arising under or in connection with this
Agreement, the Notes and each other Loan Document.
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35
"Obligor" means the Parent and any of its Subsidiaries (including the
Borrower and any of its Subsidiaries).
"Organic Document" means, relative to any Obligor, its articles or
certificate of incorporation, its by-laws and all shareholder agreements,
voting trusts and similar arrangements applicable to any of its authorized
shares of capital stock.
"Original Credit Agreement" is defined in the third recital.
"Parent" is defined in the preamble.
"Parent Inter-Company Note" means the $20,400,000 promissory note of
the Parent payable to the Borrower, dated July 25, 1995 (and delivered to the
Agent in connection with Amendment No. 3), executed, delivered and pledged to
the Agent pursuant to the Borrower Pledge Agreement, a conformed copy of which
is attached as Exhibit K-2 hereto (as such promissory note may be amended,
endorsed or otherwise modified from time to time subject to the terms of the
Borrower Pledge Agreement), and also means all other promissory notes issued
from time to time in substitution therefor or renewal thereof subject to the
terms of the Borrower Pledge Agreement.
"Parent Pledge Agreement" means the Pledge Agreement (Parent),
executed and delivered pursuant to the Existing Credit Agreement, dated as of
January 17, 1995, a conformed copy of which is attached as Exhibit G-1 hereto,
as the same may be amended, supplemented, restated or otherwise modified from
time to time.
"Parent Security Agreement" means the Parent Security Agreement,
executed and delivered pursuant to the Existing Credit Agreement, dated as of
January 17, 1995, a conformed copy of which is attached as Exhibit H-3 hereto,
together with the Security Agreement (Trademark) related thereto, a conformed
copy of which is attached to such Parent Security Agreement, in each case as
amended, supplemented, restated or otherwise modified from time to time.
"Participant" is defined in Section 11.11.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan", as such term is defined in
Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in Section 4001(a)(3) of ERISA), and to which the
Parent or any Subsidiary or any corporation, trade or business that is, along
with the Parent or any Subsidiary, a member of a Controlled Group, may have
liability, including any liability by reason of having been
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36
a substantial employer within the meaning of Section 4063 of ERISA at any time
during the preceding five years, or by reason of being deemed to be a
contributing sponsor under Section 4069 of ERISA.
"Percentage" means, relative to any Lender, the percentage set forth
opposite the name of such Lender on Schedule II hereto or set forth in a duly
executed Lender Assignment Agreement, as such percentage may be adjusted from
time to time pursuant to Lender Assignment Agreement(s) executed by such Lender
and its Assignee Lender(s) and delivered pursuant to Section 11.11.
"Permitted Business Acquisition" means any Business Acquisition
pursuant to which:
(a) (i) the Borrower acquires all of the capital stock of a
Person engaged solely in the business of owning and operating one or
more convenience stores, (ii) a Subsidiary of the Borrower acquires
assets comprising one or more convenience stores or (iii) with the
prior written consent of the Agent, the Borrower acquires assets
comprising one or more convenience stores (provided that such consent
shall not be required to the extent such assets will be acquired in a
single transaction or series of related transactions (each such
transaction, a "Threshold Acquisition") which relate to five or fewer
locations and do not have a purchase price in excess of $1,000,000
(such purchase price to be determined in the same manner as provided
in the immediately succeeding clause (b));
(b) the purchase price with respect to such Business
Acquisition (inclusive of any deferred portion thereof (which shall,
for the purposes of this clause (b), equal the present value thereof
based on a discount factor equal to the sum of the SG Base Rate and
1.25% on the closing date of such Business Acquisition) and any
securities or other assets issued or transferred and liabilities
(other than current liabilities) assumed), when added to the aggregate
purchase price of all Permitted Business Acquisitions consummated
during the Fiscal Year in which such Business Acquisition would be
consummated, does not exceed $5,000,000;
(c) the Agent shall have received, other than in the case of
a Threshold Acquisition, a certificate executed by the chief financial
Authorized Officer of the Borrower (i) stating that no Default has
occurred and is continuing or would occur upon consummation of such
Business Acquisition and (ii) showing (in reasonable detail and with
appropriate calculations and computations in all respects satisfactory
to the Agent) compliance for the succeeding four fiscal quarters (the
fiscal quarter in which such Business
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Acquisition would be consummated being the first such fiscal quarter)
with the covenants set forth in Section 7.2.4 on a prospective pro
forma basis (after giving effect to such Business Acquisition and all
transactions related thereto); and
(d) the Borrower has complied with the provisions of Section
7.1.8 to the extent such provisions are applicable to the Persons
party to, or otherwise subject to, such Business Acquisition.
"Permitted Disposition" means any sale, lease, transfer or other
disposition of assets of the Borrower or any other Subsidiary of the Parent to
the extent that
(a) the Borrower or such other Subsidiary shall receive only
cash consideration therefor, provided that (i) the Borrower or such
other Subsidiary may receive promissory notes having terms that are
customary for seller-financed transactions, to the extent the
aggregate principal amount of all such promissory notes received by
the Borrower and such other Subsidiaries in any Fiscal Year does not
exceed $250,000 and (ii) in the event of a sale of assets comprised of
convenience stores or marketers, the Borrower or such other Subsidiary
may obtain in exchange therefor convenience stores (or, if the assets
sold are marketers, convenience stores or marketers), to the extent
the number of convenience stores so sold does not exceed 15% of the
convenience stores operated by the Borrower and the other Subsidiaries
of the Parent as of the Effective Date and the number of marketers so
sold does not exceed 15% of the marketers operated by such other
Subsidiaries of the Parent as of the Effective Date (each such
transaction, an "Exchange Transaction");
(b) the aggregate fair market value of all such dispositions
(exclusive of any such disposition effectuated as an Exchange
Transaction to the extent of the fair market value of the capital
assets obtained by the Borrower or other such Subsidiary in respect of
such Exchange Transaction) shall not exceed $2,500,000 in any Fiscal
Year;
(c) the Borrower and such other Subsidiaries shall have
received fair value therefor; and
(d) at the time of each such disposition, no Event of Default
shall have occurred and be continuing.
"Permitted Encumbrances" means Liens permitted under Section 7.2.3.
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"Person" means any natural person, corporation, partnership, firm,
association, trust, government, governmental agency or any other entity,
whether acting in an individual, fiduciary or other capacity.
"Petroleum" is defined in the first recital.
"Petroleum Guaranty" means the Guaranty (Petroleum), executed and
delivered pursuant to the Existing Credit Agreement, dated as of January 17,
1995, a conformed copy of which is attached as Exhibit J hereto, as the same
may be amended, supplemented or otherwise restated from time to time.
"Petroleum Note" means the revolving promissory note of Petroleum
payable to the Borrower, executed, delivered and pledged to the Agent pursuant
to the Borrower Pledge Agreement, a conformed copy of which is attached as
Exhibit K-1 hereto (as such promissory note may be amended, endorsed or
otherwise modified from time to time subject to the terms of the Borrower
Pledge Agreement), and also means all other promissory notes issued from time
to time in substitution therefor or renewal thereof subject to the terms of the
Borrower Pledge Agreement.
"Petroleum of California" means E-Z Serve Petroleum Marketing Company
of California, a California corporation.
"Petroleum Security Agreement" means the Petroleum Security Agreement
executed and delivered pursuant to the Existing Credit Agreement, dated as of
January 17, 1995, a conformed copy of which is attached hereto as Exhibit H-2
hereto, together with the Security Agreement (Trademark) related thereto, in
each case as amended, supplemented, restated or otherwise modified from time to
time.
"Plan" means any Pension Plan or Welfare Plan.
"Pledge Agreements" means, as the context may require, the Parent
Pledge Agreement or the Borrower Pledge Agreement.
"Purchase Agreement" means the Purchase Agreement, dated as of
December 1, 1994, between Xxxxxx Companies, Inc., a Kansas corporation (the
"Seller"), and the Borrower, pursuant to which the Borrower acquired all of the
issued and outstanding shares of capital stock of Time Saver Stores, Inc., a
Kansas corporation, which was a wholly-owned Subsidiary of the Seller.
"Quarterly Payment Date" means the 24th day of each March, June,
September and December or, if any such day is not a Business Day, the next
succeeding Business Day.
"Rate Protection Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar
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agreement, currency swap or exchange agreement or any similar arrangement
designed to protect a Person against fluctuations in interest rates or currency
fluctuations and entered into, from time to time, by the Parent or any of its
Subsidiaries.
"Realty" means all right, title and interest of the Borrower, the
Parent and their respective Subsidiaries in any land, buildings, improvements,
fixtures, other interests in real estate and any leasehold interest in any of
the foregoing.
"Reimbursement Obligation" is defined in Section 2.7.3.
"Release" means any spilling, leaking, pumping, pouring emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing of
any Hazardous Material or pollutant or contaminant into the environment
(including the abandonment or discarding of barrels, containers, and other
closed receptacles containing any Hazardous Material or pollutant or
contaminant).
"Required Lenders" means, at the time any determination thereof is to
be made, Lenders holding more than 50% of the aggregate of (a) the then
aggregate unpaid principal amount of the Term Notes and (b) the Revolving Loan
Commitments (or, if the Revolving Loan Commitments are no longer in effect, the
aggregate unpaid principal amount, if any, of Revolving Notes and Letter of
Credit Outstandings).
"Resource Conservation and Recovery Act" means the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., as in effect
from time to time.
"Revolving Loan" is defined in Section 2.1.2.
"Revolving Loan Commitment" means, relative to any Lender, such
Lender's obligation to make Revolving Loans pursuant to Section 2.1.2.
"Revolving Loan Commitment Amount" means, on any date, $25,000,000, as
such amount is reduced from time to time pursuant to Section 2.3.
"Revolving Loan Commitment Termination Date" means the earliest of
(a) January 24, 1998;
(b) the date on which the Revolving Loan Commitment Amount is
terminated in full or reduced to zero pursuant to Section 2.3;
(c) the date on which the principal amount of Term Loans are
repaid in full; and
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(d) the date on which any Commitment Termination Event
occurs.
Upon the occurrence of any event described above, the Revolving Loan
Commitments shall terminate automatically and without any further action.
"Revolving Note" means a promissory note of the Borrower payable to
any Lender, in the form of Exhibit A hereto (as such promissory note may be
amended, endorsed or otherwise modified from time to time), evidencing the
aggregate Indebtedness of the Borrower to such Lender resulting from
outstanding Revolving Loans, and also means all other promissory notes accepted
from time to time in substitution therefor or renewal thereof.
"Rolling Period" means, as of any date of calculation, the immediately
preceding four full Fiscal Quarters; provided, however, that prior to the first
four full Fiscal Quarters following the date of the initial credit extension
under the Original Credit Agreement until the fourth Fiscal Quarter of the 1995
Fiscal Year, the "Rolling Period" as of any date of calculation shall mean the
period from the date of the initial credit extension under the Original Credit
Agreement to such date of calculation.
"Security Agreements" means, as the context may require, the Parent
Security Agreement, the Borrower Security Agreement and the Petroleum Security
Agreement.
"Series C Preferred Stock" means the $6.00 Convertible Preferred
Stock, Series C, of the Parent, par value $.01 per share.
"SG" is defined in the preamble.
"SGA Margin" means, as of the last day of any Fiscal Quarter, the
percentage obtained by dividing (a) selling, general and administrative
expenses (as determined in accordance with GAAP) of the Parent and its
Subsidiaries for the Rolling Period ending on such day by (b) total sales (as
determined in accordance with GAAP) by the Parent and its Subsidiaries for such
Rolling Period.
"SG Base Rate" means, on any date and with respect to all Base Rate
Loans, a fluctuating rate of interest per annum equal to the higher of
(a) the SG Rate in effect on such day; and
(b) the Federal Funds Rate in effect on such day plus 1/2 of
1%.
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The SG Base Rate is not necessarily intended to be the lowest rate of interest
determined by SG in connection with extensions of credit. Changes in the rate
of interest on that portion of any Loans maintained as Base Rate Loans will
take effect simultaneously with each change in the SG Base Rate. The Agent
will give notice promptly to the Borrower and the Lenders of changes in the SG
Base Rate.
"SG Rate" means, at any time, the rate of interest then most recently
established by SG in New York, New York as its base rate for U.S. dollars
loaned in the United States.
"State" means the several states of the United States of America,
including the District of Columbia, and their political subdivisions.
"Stated Amount" of each Letter of Credit means the total amount
available to be drawn under such Letter of Credit upon the issuance thereof.
"Stated Expiry Date" is defined in Section 2.7.
"Stated Maturity Date" means (a) in the case of any Term Loan, January
24, 2002 and (b) in the case of any Revolving Loan, January 24, 1998.
"Stockholders" means DLJ, Phemus Corporation, Tenacqco Bridge
Partnership, Intercontinental Mining & Resources Incorporated and Quadrant
Capital Corp.
"Stockholders Agreement" means the Amended and Restated Stockholders
Agreement, dated as of June 1, 1994, among the Stockholders, certain employees
of the Obligors and the Parent.
"Stockholders Letter of Understanding" means the Stockholders Letter
of Understanding, executed and delivered pursuant to the Existing Credit
Agreement, dated as of January 17, 1995, a conformed copy of which is attached
as Exhibit N hereto, together with all amendments, supplements and
modifications, if any, thereto.
"Subsidiary" means, with respect to any Person, (a) any corporation of
which more than 50% of the outstanding capital stock having ordinary voting
power to elect the board of directors of such corporation (irrespective of
whether at the time capital stock of any other class or classes of such
corporation shall or might have voting power upon the occurrence of any
contingency) is at the time directly or indirectly owned by such Person, by
such Person and one or more Subsidiaries of such Person, or by one or more
other Subsidiaries of such Person, or (b) any partnership, joint venture, or
other entity as to which such Person, such Person and one or more of its
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Subsidiaries or one or more Subsidiaries of such Person owns more than a 50%
ownership, equity or similar interest or has power to direct or cause the
direction of management and policies, or the power to elect the managing
partner (or the equivalent), of such partnership, joint venture or other
entity, as the case may be.
"Sunshine" is defined in the sixth recital.
"Sunshine Indenture" means the Trust Indenture, dated June 21, 1994,
between Sunshine and NationsBank of Florida, N.A., as Trustee.
"Sunshine Letter of Credit" means the Letter of Credit, substantially
in the form of Exhibit S hereto, to be issued in the Stated Amount of
$2,700,000 to Rydberg & Xxxxxxxxx, P.A., as distribution agent for the Class 7
Claimants.
"Tangible Net Worth" means, at any time, the sum of all amounts
(without duplication) which, in accordance with GAAP, would be included under
paid-in capital and retained earnings on a balance sheet of the Parent and its
Subsidiaries on a consolidated basis at such time after subtracting therefrom
the aggregate amount of any intangible assets of the Parent and its
Subsidiaries, including goodwill, franchises, licenses, patents, trademarks,
trade names, copyrights, service marks and brand names.
"Taxes" means all federal, state, local or foreign income, gross
receipts, windfall profits, severance, real and personal property, production,
sales, use, license, excise, franchise, stamp, leasing, lease, value added,
employment, withholding, transfer, registration, alternative or add-on minimum,
estimated, unemployment, social security, payroll, capital stock or similar
taxes, charges, fees, duties, levies, or other assessments, together with any
interest, additions or penalties with respect thereto and any interest in
respect of such additions or penalties.
"Term Loan" is defined in Section 2.1.1.
"Term Loan Commitment" means, relative to any Lender, such Lender's
obligation to make Term Loans pursuant to Section 2.1.1.
"Term Loan Commitment Amount" means, on any date prior to the Term
Loan Commitment Termination Date, $80,000,000.
"Term Loan Commitment Termination Date" means the earlier of
(a) immediately after the making of the initial Credit
Extension after the Effective Date; and
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(b) the date on which any Commitment Termination Event occurs.
Upon the occurrence of any event described in clause (a) or (b), the Term Loan
Commitments shall terminate automatically and without any further action.
"Term Note" means a promissory note of the Borrower payable to any
Lender, in the form of Exhibit B hereto (as such promissory note may be
amended, endorsed or otherwise modified from time to time), evidencing the
aggregate Indebtedness of the Borrower to such Lender resulting from
outstanding Term Loans, and also means all other promissory notes accepted from
time to time in substitution therefor or renewal thereof.
"Total Commitment Amount" means the sum, without duplication, of the
Term Loan Commitment Amount and the Revolving Loan Commitment Amount.
"type" means, relative to any Loan, that part of such Loan being
maintained as a Base Rate Loan or a LIBO Rate Loan.
"U.C.C." means the Uniform Commercial Code as from time to time in
effect in the State of New York.
"United States" or "U.S." means the United States of America, its
fifty States and the District of Columbia.
"Welfare Plan" means a "welfare plan" (as such term is defined in
Section 3(1) of ERISA), maintained by the Borrower or for which the Borrower or
any of its Subsidiaries has any contractual liability.
SECTION 1.2. Use of Defined Terms. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in the Disclosure Schedule and
each other Loan Document.
SECTION 1.3. Cross-References. Unless otherwise specified,
references in this Agreement and in each other Loan Document to any Article or
Section are references to such Article or Section of this Agreement or such
other Loan Document, as the case may be, and, unless otherwise specified,
references in any Article, Section or definition to any clause are references
to such clause of such Article, Section or definition.
SECTION 1.4. Accounting and Financial Determinations. Unless
otherwise specified, all accounting terms used herein or in any other Loan
Document shall be interpreted, all accounting determinations and computations
hereunder or thereunder (including under Section 7.2.4) shall be made, and all
financial
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statements required to be delivered hereunder or thereunder shall be prepared
in accordance with, those generally accepted accounting principles ("GAAP")
applied in the preparation of the financial statements referred to in Section
6.5.
ARTICLE II
COMMITMENTS, BORROWING PROCEDURES,
LETTERS OF CREDIT AND NOTES
SECTION 2.1. Commitments. On the terms and subject to the conditions
of this Agreement (including Article V), each Lender severally agrees to make
Loans pursuant to the Commitments described in this Section 2.1.
SECTION 2.1.1. Term Loan Commitment. On the Business Day the Merger
is consummated (but only if the Term Loans are requested to be made on, or
prior to, the Term Loan Commitment Termination Date), each Lender agrees to
make a term loan to the Borrower equal to such Lender's Percentage of the
aggregate amount of the Borrowing of term loans requested by the Borrower to be
made on such day and to amend and restate and consolidate all term loans and
First Merger Loans outstanding under the Existing Credit Agreement, together
with the term loans requested on the date of the Merger, into term loans
hereunder (relative to each Lender, its "Term Loan") in accordance with each
Lender's Percentage of such Term Loans. The Commitment of each Lender
described in this Section is herein referred to as its "Term Loan Commitment".
No amounts paid or prepaid with respect to Term Loans may be reborrowed.
SECTION 2.1.2. Revolving Loan Commitment. From time to time on any
Business Day occurring prior to the Revolving Loan Commitment Termination Date,
each Lender agrees to make Loans (relative to such Lender, its "Revolving
Loans") to the Borrower equal to such Lender's Percentage of the aggregate
amount of the Borrowing of Revolving Loans requested by the Borrower to be made
on such day. The Commitment of each Lender described in this Section is herein
referred to as its "Revolving Loan Commitment". On the terms and subject to
the conditions hereof, the Borrower may from time to time borrow, prepay and
reborrow the Revolving Loans. All Revolving Loans outstanding under the
Existing Agreement shall, from and after the Effective Date, be deemed to be
outstanding under this Agreement in accordance with each Lender's Percentage of
such Revolving Loans.
SECTION 2.1.3. Letter of Credit Commitment. From time to time on any
Business Day occurring prior to the Revolving Loan Commitment Termination Date,
the Issuer will
(a) issue one or more standby letters of credit (relative to
such Issuer, its "Letter of Credit") for the
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account of the Borrower in respect of obligations of the Borrower or
Petroleum in Stated Amounts requested by the Borrower on such day with
a Stated Expiry Date not later than one year from such requested date
of issuance, provided that any Letter of Credit requested to be issued
to satisfy the Bankruptcy Court Order shall comprise the Sunshine
Letter of Credit; or
(b) extend the Stated Expiry Date of an existing Letter of
Credit previously issued hereunder to a date not later than the
earlier of (i) the Revolving Loan Commitment Termination Date and (ii)
one year from the date of such extension.
All Letters of Credit outstanding under the Existing Agreement shall, from and
after the Effective Date, be deemed to be outstanding under this Agreement in
accordance with each Lender's Percentage of such Letters of Credit.
SECTION 2.2. Lenders Not Permitted or Required To Make Credit
Extensions. No Lender shall be permitted or required to make any Loan, and no
Issuer shall be obligated to issue or extend any Letter of Credit, under any
circumstance described below in this Section.
SECTION 2.2.1. Term Loans. No Borrowing of Term Loans shall be made
if, after giving effect thereto, the aggregate outstanding principal amount of
all the Term Loans (a) of all Lenders would exceed the Term Loan Commitment
Amount or (b) of such Lender would exceed such Lender's Percentage of the Term
Loan Commitment Amount.
SECTION 2.2.2. Revolving Loans. No Borrowing of Revolving Loans
shall be made if, after giving effect thereto, the aggregate outstanding
principal amount of all the Revolving Loans, together with the aggregate amount
of all Letter of Credit Outstandings, (a) of all the Lenders would exceed the
lesser of (i) the Revolving Loan Commitment Amount or (ii) the then existing
Borrowing Base Amount plus the Letter of Credit Outstandings in respect of the
Sunshine Letter of Credit, or (b) of such Lender would exceed such Lender's
Percentage of the lesser of (i) the Revolving Loan Commitment Amount or (ii)
such Lender's Percentage of the then existing Borrowing Base Amount plus such
Lender's Percentage of the Letter of Credit Outstandings in respect of the
Sunshine Letter of Credit.
SECTION 2.2.3. Letters of Credit. No issuance or extension of a
Letter of Credit shall be made if, after giving effect thereto, (a) the
aggregate amount of all Letter of Credit Outstandings would exceed the Letter
of Credit Commitment Amount or (b) the aggregate amount of all Letter of Credit
Outstandings together with the aggregate outstanding principal amount of all
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Revolving Loans, would exceed the lesser of (i) the Revolving Loan Commitment
Amount or (ii) the then existing Borrowing Base Amount plus the Letter of
Credit Outstandings in respect of the Sunshine Letter of Credit, provided,
however, that the issuance of the Sunshine Letter of Credit shall not be
subject to the foregoing Borrowing Base calculation.
SECTION 2.3. Optional Reduction of the Commitment Amounts. The
Borrower may, from time to time on any Business Day occurring after the time of
the initial Credit Extension hereunder, voluntarily reduce the unused amount of
the Revolving Loan Commitment Amount; provided, however, that all such
reductions shall require at least one Business Days' prior notice to the Agent
and be permanent, and any partial reduction of the unused amount of the
Revolving Loan Commitment Amount shall be in a minimum amount of $1,000,000 and
in an integral multiple of $500,000.
SECTION 2.4. Borrowing Procedure. By delivering a Borrowing Request
to the Agent on or before 10:00 a.m. (New York City time) on a Business Day,
the Borrower may from time to time irrevocably request that Base Rate Loans be
made on such Business Day or on another Business Day within five Business Days
of such Business Day, or that LIBO Rate Loans be made on any Business Day not
less than three nor more than five Business Days thereafter. All Loans shall
be made in a minimum aggregate amount of $1,000,000 and an aggregate integral
multiple of $100,000 or, if less, in the unused amount of the applicable
Commitment, and the proceeds of all Loans shall be used solely for the purposes
described in Section 4.10. On the terms and subject to the conditions of this
Agreement, each Borrowing shall be made on the Business Day specified in such
Borrowing Request. On or before 1:00 p.m. (New York City time) on such
Business Day, each Lender shall deposit with the Agent same day funds in an
amount equal to such Lender's Percentage of the requested Borrowing. Such
deposit will be made to an account which the Agent shall specify from time to
time by notice to the Lenders. To the extent funds are received from the
Lenders, the Agent shall make such funds available to the Borrower by wire
transfer to the accounts the Borrower shall have specified in its Borrowing
Request. No Lender's obligation to make any Loan shall be affected by any
other Lender's failure to make any Loan. As to all Credit Extensions on the
Effective Date, only Base Rate Loans will be available.
SECTION 2.5. Continuation and Conversion Elections. By delivering a
Continuation/Conversion Notice to the Agent on or before 10:00 a.m. (New York
City time) on a Business Day, the Borrower may from time to time irrevocably
elect, on not less than one Business Day's notice in the case of conversions to
Base Rate Loans, or three Business Days' notice in the case of conversions to
or continuations of LIBO Rate Loans, and in either
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case not more than five Business Days' notice, that all, or any portion in an
aggregate minimum aggregate amount of $1,000,000 and an aggregate integral
multiple of $100,000 be, in the case of Base Rate Loans converted into LIBO
Rate Loans or be, in the case of LIBO Rate Loans converted into Base Rate Loans
or continued as LIBO Rate Loans (in the absence of delivery of a
Continuation/Conversion Notice with respect to any LIBO Rate Loan at least
three Business Days (but not more than five Business Days) before the last day
of the then current Interest Period with respect thereto, such LIBO Rate Loan
shall, on such last day, automatically convert to a Base Rate Loan); provided,
however, that (a) each such conversion or continuation shall be prorated among
the applicable outstanding Loans of all Lenders and (b) no portion of the
outstanding principal amount of any Loans may be continued as, or be converted
into, LIBO Rate Loans when any Default or any Event of Default has occurred and
is continuing (unless the Required Lenders otherwise agree in writing).
SECTION 2.6. Funding. Each Lender may, if it so elects, fulfill its
obligation to make, continue or convert LIBO Rate Loans hereunder by causing
one of its foreign branches or Affiliates (or an international banking facility
created by such Lender) to make or maintain such LIBO Rate Loan; provided,
however, that such LIBO Rate Loan shall nonetheless be deemed to have been made
and to be held by such Lender, and the obligation of the Borrower to repay such
LIBO Rate Loan shall nevertheless be to such Lender for the account of such
foreign branch, Affiliate or international banking facility. In addition, the
Borrower hereby consents and agrees that, for purposes of any determination to
be made for purposes of Sections 4.1 through 4.5, it shall be conclusively
assumed that each Lender elected to fund all LIBO Rate Loans by purchasing
Dollar deposits in its LIBOR Office's interbank eurodollar market.
SECTION 2.7. Issuance Procedures. By delivering to the Agent an
Issuance Request on or before 10:00 a.m., New York City time, on a Business
Day, the Borrower may, from time to time irrevocably request, on not less than
three nor more than 15 Business Days' notice, that the Issuer issue, increase
the Stated Amount of, or extend the Stated Expiry Date of, as the case may be,
a Letter of Credit in such form as may be requested by the Borrower and
approved by the Issuer, such Letter of Credit to be used solely for the
purposes described in Section 4.10. Each Letter of Credit shall by its terms
be stated to expire on a date (its "Stated Expiry Date") no later than the
earlier of (a) one year (or, in the case of the Letter of Credit issued under
the Existing Credit Agreement to Bankers Trust Company, up to 15 months) from
the date of issuance (or, if extendable beyond such period, cancelable upon at
least 30 days' notice given by the Issuer to the beneficiary of such Letters of
Credit) and (b) the Revolving Loan Commitment Termination Date. The Issuer
will make available to the beneficiary thereof the original of each Letter
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of Credit which it issues hereunder. Unless notified in writing by the
Required Banks before it issues a Letter of Credit that a Default or Event of
Default exists, the Issuer may issue the requested Letter of Credit in
accordance with the Issuer's customary practices.
SECTION 2.7.1. Other Lenders' Participation. Upon the issuance of
each Letter of Credit issued by the Issuer pursuant hereto, and without further
action, each Lender (other than the Issuer) shall be deemed to have irrevocably
and unconditionally purchased (without recourse, representation or warranty),
to the extent of its Percentage, a participation interest in such Letter of
Credit (including the Contingent Liability and any Reimbursement Obligation
with respect thereto), and such Lender shall, to the extent of its Percentage,
be responsible for reimbursing promptly (and in any event within one Business
Day together with interest at the Federal Funds Rate (rounded upward, if
necessary, to the next highest 1/16 of 1%) for each day until reimbursement is
made) the Issuer for Reimbursement Obligations which have not been reimbursed
by the Borrower in accordance with Section 2.7.3 or which have been reimbursed
by the Borrower but have been required to be returned or disgorged by the
Issuer. In addition, such Lender shall, to the extent of its Percentage and so
long as it shall have complied with its obligations under this Section and
Section 2.7.3, be entitled to receive a ratable portion of the Letter of Credit
fees payable pursuant to Section 3.3.2 with respect to each Letter of Credit
and of interest payable pursuant to Section 3.2 with respect to any
Reimbursement Obligation.
SECTION 2.7.2. Disbursements. The Issuer will notify the Borrower
and the Agent promptly of the presentment for payment of any Letter of Credit
issued by the Issuer, together with notice of the date (the "Disbursement
Date") such payment shall be made (each such payment, a "Disbursement").
Subject to the terms and provisions of such Letter of Credit and this
Agreement, the Issuer shall make such payment to the beneficiary (or its
designee) of such Letter of Credit. Prior to 11:00 a.m. (New York City time)
on the first Business Day following the Disbursement Date, the Borrower will
reimburse the Agent, for the account of the Issuer, for all amounts which the
Issuer has disbursed under such Letter of Credit, together with interest
thereon at a rate per annum equal to the highest rate per annum then in effect
pursuant to Section 3.2 for the period from the Disbursement Date through the
date of such reimbursement.
SECTION 2.7.3. Reimbursement. The obligation (a "Reimbursement
Obligation") of the Borrower under Section 2.7.2 to reimburse the Issuer with
respect to each Disbursement (including interest thereon), and, upon the
failure of the Borrower to reimburse the Issuer (or if any reimbursement by the
Borrower must be returned or disgorged by the Issuer for any
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reason), each Lender's obligation under Section 2.7.1 to reimburse the Issuer,
shall be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment which the
Borrower or such Lender, as the case may be, may have or have had against the
Issuer or any Lender, including any defense based upon the failure of any
Disbursement to conform to the terms of the applicable Letter of Credit or any
non-application or misapplication by the beneficiary of the proceeds of such
Letter of Credit; provided, however, that after paying in full its
Reimbursement Obligation hereunder, nothing herein shall adversely affect the
right of the Borrower or such Lender, as the case may be, to commence any
proceeding against the Issuer for any wrongful Disbursement made by the Issuer
under a Letter of Credit as a result of acts or omissions constituting gross
negligence or wilful misconduct on the part of such Issuer.
SECTION 2.7.4. Deemed Disbursements. Upon the occurrence and during
the continuation of any Default of the type described in Section 8.1.9 or, with
notice from the Agent, upon the occurrence and during the continuation of any
other Event of Default
(a) an amount equal to that portion of all Letter of Credit
Outstandings attributable to the then aggregate amount which is
undrawn and available under all Letters of Credit issued and
outstanding for the account of the Borrower shall, without demand upon
or notice to the Borrower, be deemed to have been paid or disbursed by
the Issuer under such Letters of Credit (notwithstanding that such
amount may not in fact have been so paid or disbursed); and
(b) upon notification by the Agent to the Borrower of its
obligations under this Section, the Borrower shall be immediately
obligated to reimburse the Issuer for the amount deemed to have been
so paid or disbursed by such Issuer.
Any amounts so payable by the Borrower pursuant to this Section shall be
deposited in cash in an account under the sole control of the Agent and
otherwise on terms satisfactory to the Agent and held as collateral security
for the Obligations in connection with the Letters of Credit issued by the
Issuers. In the case of any such deemed disbursement resulting from the
occurrence of a Default or Event of Default, if such Default or Event of
Default has been cured or waived, the Agent shall return to the Borrower all
amounts then on deposit with the Agent pursuant to this Section which have not
been applied to the partial satisfaction of such Obligations.
SECTION 2.7.5. Nature of Reimbursement Obligations. The Borrower
and, to the extent set forth in Section 2.7.1, each
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Lender shall assume all risks of the acts, omissions or misuse of any Letter of
Credit by the beneficiary thereof. The Issuer shall not be responsible for:
(a) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any Letter of Credit or any document submitted by any
party in connection with the application for and issuance of a Letter
of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged;
(b) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any instrument transferring or assigning or purporting
to transfer or assign a Letter of Credit or the rights or benefits
thereunder or the proceeds thereof in whole or in part, which may
prove to be invalid or ineffective for any reason;
(c) failure of the beneficiary to comply fully with
conditions required in order to demand payment under a Letter of
Credit;
(d) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise; or
(e) any loss or delay in the transmission or otherwise of any
document or draft required in order to make a Disbursement under a
Letter of Credit.
None of the foregoing shall affect, impair or prevent the vesting of any of the
rights or powers granted to the Issuer or any Lender hereunder. In furtherance
and extension and not in limitation or derogation of any of the foregoing, any
action taken or omitted to be taken by an Issuer in good faith shall be binding
upon the Borrower and each such Lender, and shall not put such Issuer under any
resulting liability to the Borrower or any such Lender, as the case may be.
SECTION 2.8. Notes. Each Lender's Loans under a Commitment shall be
evidenced by a Note payable to the order of such Lender in a maximum principal
amount equal to such Lender's Percentage of the original applicable Commitment
Amount. The Borrower hereby irrevocably authorizes each Lender to make (or
cause to be made) appropriate notations on the grid attached to such Lender's
Notes (or on any continuation of such grid), which notations, if made, shall
evidence, inter alia, the date of, the outstanding principal of, and the
interest rate applicable to, the Loans evidenced thereby. Such notations shall
be rebuttable presumptive evidence of the matters evidenced thereby; provided,
however, that the failure of any Lender to make any such
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notations shall not limit or otherwise affect any Obligations of the Borrower
or any other Obligor.
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. Repayments and Prepayments. The Borrower shall repay in
full the unpaid principal amount of each Loan upon the Stated Maturity Date
therefor and pursuant to Section 8.2 and Section 8.3. Prior thereto,
repayments and prepayments of Loans shall be made as set forth in this Section
3.1.
SECTION 3.1.1. Voluntary Prepayments. Prior to the Stated Maturity
Date, the Borrower may, from time to time on any Business Day, make a voluntary
prepayment, in whole or in part, of the outstanding principal amount of all
Term Loans or Revolving Loans; provided, however, that
(a) any such prepayments shall be made pro rata among Loans
of the same type and, if applicable, having the same Interest Period
of all the Lenders;
(b) all such voluntary prepayments shall require written
notice prior to 10:00 a.m. (New York City time) on any Business Day
but no more than five Business Days' prior written notice to the
Agent; and
(c) all such voluntary partial prepayments shall be in an
aggregate minimum amount of (i) $1,000,000 and an integral multiple of
$500,000 for Term Loans, and (ii) $1,000,000 and an integral multiple
of $100,000 for Revolving Loans.
Each voluntary prepayment of Term Loans made pursuant to this Section, shall be
applied, to the extent of such prepayment, in the inverse order of the
scheduled repayments of the Term Loans set forth in clause (b) of Section 3.1.2
and shall be applied first to any Base Rate Loans outstanding prior to being
applied to any LIBO Rate Loans outstanding. Each prepayment of any Loans made
pursuant to this Section shall be without premium or penalty but subject to
Section 4.4.
SECTION 3.1.2. Mandatory Prepayments. Prior to the Stated Maturity
Date,
(a) the Borrower shall, on each date when the sum of (x) the
aggregate outstanding principal amount of all Revolving Loans and (y)
Letter of Credit Outstandings exceeds the lesser of (i) the Revolving
Loan Commitment Amount (as it may be reduced from time to time) and
(ii) the then existing Borrowing Base Amount plusthe Letter of
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Credit Outstandings in respect of the Sunshine Letter of Credit, make
a mandatory prepayment of all Revolving Loans in an amount equal to
such excess;
(b) the Borrower shall, on each date set forth below, make a
scheduled repayment of the aggregate outstanding principal amount of
all Term Loans in the amount set forth opposite each such date:
Amount of Required
Repayment Date Principal Repayment
-------------- -------------------
January 24, 1996 $2,000,000
July 24, 1996 $3,550,000
January 24, 1997 $3,550,000
July 24, 1997 $4,820,000
January 24, 1998 $5,780,000
July 24, 1998 $6,280,000
January 24, 1999 $6,670,000
July 24, 1999 $6,920,000
January 24, 2000 $7,110,000
July 24, 2000 $7,110,000
January 24, 2001 $7,110,000
July 24, 2001 $7,600,000
January 24, 2002 $11,500,000;
(c) the Parent or the Borrower, as the case may be, shall,
(i) on the date of receipt by it or any of its Subsidiaries of any
Gross Transaction Proceeds, Net Disposition Proceeds, Net Equity
Proceeds, Net Debt Proceeds or Excess Insurance Proceeds and (ii) on
the date of delivery of the audited financial statements pursuant to
clause (b) of Section 7.1.1 (and, in any event, on the date 90 days
after the end of each Fiscal Year), in the case of Excess Cash Flow,
apply (A) 100% of all such Gross Transaction Proceeds, Net Disposition
Proceeds, Net Equity Proceeds, Excess Insurance Proceeds and Net Debt
Proceeds, as the case may be, and (B) 75% of all such Excess Cash
Flow, to make a mandatory prepayment of the Term Loans to be applied
to the installments thereof in the inverse order of the scheduled
repayments of the Term Loans; and
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(d) the Borrower shall, immediately upon any acceleration of
the Stated Maturity Date of any Loans pursuant to Section 8.2 or
Section 8.3, repay all (or if only a portion of the Loans are
accelerated thereunder, such portion of) the Loans; and
(e) the Borrower shall prepay Revolving Loans so that the
aggregate outstanding principal amount of all Revolving Loans
outstanding does not exceed $4,000,000 during a five consecutive
calendar day period during each calendar month (each such period, a
"Clean-Down Period").
Each prepayment of any Loans made pursuant to this Section shall be made
without premium or penalty, except as specified herein.
SECTION 3.2. Interest Provisions. Interest on the outstanding
principal amount of Loans shall accrue and be payable in accordance with this
Section 3.2.
SECTION 3.2.1. Rates. Subject to Sections 2.4 and 2.5, the Borrower
may elect, pursuant to an appropriately delivered Borrowing Request or
Continuation/Conversion Notice, that Loans comprising a Borrowing accrue
interest at a rate per annum:
(a) on that portion maintained from time to time as Base Rate
Loans, equal to the sum of the SG Base Rate from time to time in
effect plus 1.25%; and
(b) on that portion maintained as a LIBO Rate Loan, during
each Interest Period applicable thereto, equal to the sum of the LIBO
Rate (Reserve Adjusted) for such Interest Period plus 2.5%.
"LIBO Rate (Reserve Adjusted)" means, relative to any Loan to be made,
continued or maintained as, or converted into, a LIBO Rate Loan for any
Interest Period, a rate per annum (rounded upwards, if necessary, to the
nearest 1/16 of 1%) determined pursuant to the following formula:
LIBO Rate = LIBO Rate
-----------------------------
(Reserve Adjusted) 1.00 - LIBOR Reserve Percentage
The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate Loans
will be determined by the Agent on the basis of the LIBOR Reserve Percentage in
effect on, and the applicable rates furnished to and received by the Agent from
SG, two Business Days before the first day of such Interest Period.
"LIBO Rate" means, relative to any Interest Period for LIBO Rate
Loans, the rate of interest equal to the average (rounded upwards, if
necessary, to the nearest 1/16 of 1%) of the rates
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per annum at which Dollar deposits in immediately available funds are offered
to SG's LIBOR Office in the London, England interbank market at or about 11:00
a.m. (London, England time) two Business Days prior to the beginning of such
Interest Period for delivery on the first day of such Interest Period, and in
an amount approximately equal to the amount of SG's LIBO Rate Loan and for a
period approximately equal to such Interest Period.
"LIBOR Reserve Percentage" means, relative to any Interest Period for
LIBO Rate Loans, the reserve requirements (expressed as a decimal) equal to the
maximum aggregate reserve requirements (including all basic, emergency,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements)
specified under regulations issued from time to time by the F.R.S. Board and
then applicable to assets or liabilities consisting of or including
"Eurocurrency Liabilities", as currently defined in Regulation D of the F.R.S.
Board, having a term approximately equal or comparable to such Interest Period.
All LIBO Rate Loans shall bear interest from and including the first
day of the applicable Interest Period to (but not including) the last day of
such Interest Period at the interest rate determined as applicable to such LIBO
Rate Loan.
SECTION 3.2.2. Post-Default Rates. From and after the occurrence of
any Event of Default, the Borrower shall pay, but only to the extent permitted
by law, interest (after as well as before judgment) on such amounts at a rate
per annum equal to the rate per annum otherwise in effect plus a further margin
of 2% per annum.
SECTION 3.2.3. Payment Dates. Interest accrued on each Loan shall be
payable, without duplication:
(a) on the Stated Maturity Date therefor;
(b) on the date of any payment or prepayment, in whole or in
part, of principal outstanding on such Loan on the principal amount so
paid or prepaid;
(c) with respect to Base Rate Loans, on each Quarterly
Payment Date occurring after the Effective Date;
(d) with respect to LIBO Rate Loans, on the last day of each
applicable Interest Period (and, if such Interest Period shall exceed
90 days, on the 90th day of such Interest Period); and
(e) on that portion of any Loans the Stated Maturity Date of
which is accelerated pursuant to Section 8.2 or Section 8.3,
immediately upon such acceleration.
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Interest accrued on Loans or other monetary Obligations arising under this
Agreement or any other Loan Document after the date such amount is due and
payable (whether on the Stated Maturity Date therefor, upon acceleration or
otherwise) shall be payable upon demand.
SECTION 3.3. Fees. The Borrower agrees to pay the fees set forth in
this Section 3.3. All such fees shall be non-refundable.
SECTION 3.3.1. Commitment Fee. The Borrower agrees to pay to the
Agent, for the pro rata account of each Lender of Revolving Loans, for the
period (including any portion thereof when the Revolving Loan Commitment is
suspended by reason of the Borrower's inability to satisfy any condition of
Article V) commencing on the Effective Date and continuing through the
Revolving Loan Commitment Termination Date, a commitment fee at the rate of 1/2
of 1% per annum on such Lender's Percentage of the sum of the average daily
undrawn and unused portion of the Revolving Loan Commitment Amount. The
Revolving Loan Commitment shall be considered to be used by the amount of the
Letter of Credit Outstandings. Such commitment fees shall be payable by the
Borrower in arrears on each Quarterly Payment Date, commencing with the first
Quarterly Payment Date following the Effective Date, and on the Revolving Loan
Commitment Termination Date.
SECTION 3.3.2. Letter of Credit Fee. The Borrower agrees to pay to
the Agent, for the pro rata account of the Issuer and each other Lender of
Revolving Loans, a Letter of Credit fee in an amount equal to 2.5% multiplied
by the Stated Amount of all Letters of Credit outstanding, such fee to be paid
quarterly in arrears on each Quarterly Payment Date and on the Revolving Loan
Commitment Termination Date. The Borrower further agrees to pay to the Issuer
(a) on the date of (x) the issuance of each Letter of Credit, (y) each increase
in the Stated Amount thereof and (z) each extension (automatic or otherwise) of
the Stated Expiry Date thereof, an issuance fee in an amount equal to the
greater of (i) $500 and (ii) 1/4 of 1% of the Stated Amount thereof (or
increase in such Stated Amount) and (b) all costs and expenses incurred by the
Issuer in connection with such Letter of Credit.
SECTION 3.3.3. Agent's Fees, etc. The Borrower agrees to pay to the
Agent for its own account, fees in the amounts, on the dates and in the manner
set forth in the Fee Letter.
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ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION 4.1. LIBO Rate Lending Unlawful. If any Lender shall
determine (which determination shall, upon notice thereof to the Borrower and
the Agent, be conclusive and binding on the Borrower) that the introduction of
or any change in or in the interpretation of any law makes it unlawful, or any
central bank or other governmental authority asserts that it is unlawful, for
such Lender to make, continue or maintain any Loan as, or to convert any Loan
into, a LIBO Rate Loan, the obligations of such Lender to make, continue,
maintain or convert any such LIBO Rate Loan shall, upon such determination,
forthwith be suspended until such Lender shall notify the Agent that the
circumstances causing such suspension no longer exist, and all outstanding LIBO
Rate Loans of such Lender shall automatically convert into Base Rate Loans at
the end of the then current Interest Periods with respect thereto or sooner, if
required by such law or assertion.
SECTION 4.2. Deposits Unavailable. If the Agent shall have
determined that
(a) Dollar deposits in the relevant amount and for the
relevant Interest Period are not available to SG in its relevant
market; or
(b) by reason of circumstances affecting SG's relevant
market, adequate means do not exist for ascertaining the interest rate
applicable hereunder to LIBO Rate Loans,
then, upon notice from the Agent to the Borrower and the Lenders, the
obligations of all Lenders under Section 2.3 and Section 2.4 to make or
continue any Loans as, or to convert any Loans into, LIBO Rate Loans shall
forthwith be suspended until the Agent shall notify the Borrower and the
Lenders that the circumstances causing such suspension no longer exist.
SECTION 4.3. Increased Costs, etc. (a) The Borrower agrees to
reimburse each Lender for any increase in the cost to such Lender of, or any
reduction in the amount of any sum receivable by such Lender in respect of,
making, continuing or maintaining (or of its obligation to make, continue or
maintain) any Loans as, or of converting (or of its obligation to convert) any
Loans into, LIBO Rate Loans (including but not limited to any imposition or
effectiveness of reserve requirements not already included in the LIBO Rate
Reserve Percentage but excluding increases in Taxes and taxes expressly
excluded from Taxes pursuant to the first sentence of Section 4.6, as to which
the provisions of Section 4.6 shall control) that arise in connection with any
change in, or the introduction, adoption, effectiveness, interpretation,
reinterpretation or phase-in, after the Effective Date, of, any law or
regulation, directive, guideline, decision
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or request (whether or not having the force of law) of any court, central bank,
regulator or other governmental authority. Such Lender shall promptly notify
the Agent and 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 such Lender for such increased cost or
reduced amount. Such additional amounts shall be paid by the Borrower directly
to such Lender promptly (and, in any event, within 15 Business Days of receipt
of such notice), and such notice shall, in the absence of manifest error, be
conclusive and binding on the Borrower.
(b) If at any time the introduction or effectiveness of or any change
in any applicable law, rule or regulation (including without limitation those
announced or published prior to the date of this Agreement), or in the
interpretation or administration thereof by any governmental authority charged
with the interpretation or administration thereof, or compliance by any Lender
with any request or directive issued by any such authority (whether or not
having the force of law) shall either (i) impose, modify or make applicable any
reserve, deposit, capital adequacy or similar requirement against letters of
credit issued, or participated in, by any Issuer or Lender, or (ii) impose on
any Issuer or Lender any other conditions affecting this Agreement or any
Letter of Credit; and the result of any of the foregoing is to increase the
cost to any Issuer or Lender of issuing, maintaining or participating in any
Letter of Credit, or reduce the amount of any sum received or receivable by any
Issuer or Lender hereunder with respect to Letters of Credit, then, within ten
days of the receipt of the notice referred to below (which notice shall be
given by the respective Issuer or Lender promptly after it determines such
increased cost or reduction is applicable to Letters of Credit or its
participation therein) to the Borrower by the respective Issuer or Lender (a
copy of which notice shall be sent by such Issuer or Lender to the Agent), the
Borrower shall pay to such Issuer or Lender such additional amount or amounts
as will compensate such Issuer or Lender for such increased cost or reduction.
A notice submitted to the Borrower by such Issuer or Lender, setting forth the
basis for the calculation of such additional amount or amounts necessary to
compensate such Issuer or Lender as aforesaid shall be conclusive and binding
on the Borrower absent manifest error.
SECTION 4.4. Funding Losses. In the event any Lender shall incur any
loss or expense (including any loss (other than the loss of any payments in
respect of the 1.25% and 2.5% margins referred to in clauses (a) and (b),
respectively, of Section 3.2.1) or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to make, continue or maintain any portion of the principal amount of any Loan
as, or to convert any portion of the principal amount of any Loan into, a LIBO
Rate Loan) as a result of
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(a) any conversion or repayment or prepayment of the
principal amount of any LIBO Rate Loans on a date other than the
scheduled last day of the Interest Period applicable thereto, whether
pursuant to Section 3.1 or otherwise;
(b) any Loans not being made as LIBO Rate Loans in accordance
with the Borrowing Request therefor as a result of the conditions
precedent to such Loans not being satisfied or as a result of the
Borrower attempting to revoke such Borrowing Request; or
(c) any Loans not being continued as, or converted into LIBO
Rate Loans in accordance with the Continuation/Conversion Notice
therefor,
then, upon the written notice of such Lender to the Borrower (with a copy to
the Agent), the Borrower shall promptly (and, in any event, within 15 Business
Days of receipt of such notice) pay directly to such Lender such amount as will
(in the determination of such Lender) reimburse such Lender for such loss or
expense. Such written notice (which shall include calculations in reasonable
detail) shall, in the absence of manifest error, be conclusive and binding on
the Borrower.
SECTION 4.5. 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 governmental authority affects or would affect the amount of capital
required or expected to be maintained by any Lender or Issuer or any Person
controlling such Lender or Issuer, and such Lender or Issuer 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 such Lender or (to the extent, if any, not covered by Section 4.3(b)
hereof) Letters of Credit issued or participated in by such Lender or Issuer is
reduced to a level below that which such Lender, Issuer or such controlling
Person (to the extent, if any, not covered by Section 4.3(b) hereof) could have
achieved but for the occurrence of any such circumstance, then, in any such
case upon notice from time to time by such Lender or Issuer to the Borrower,
the Borrower shall immediately pay directly to such Lender or Issuer additional
amounts sufficient to compensate such Lender or Issuer or such controlling
Person for such reduction in rate of return. A statement of such Lender or
Issuer 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, such
Lender or Issuer may use any method of averaging and attribution that it (in
its sole and absolute discretion) shall deem applicable.
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SECTION 4.6. Taxes. All payments by the Borrower hereunder and under
all other Loan Documents shall be made free and clear of and without deduction
for any present or future income, excise, stamp or franchise taxes and other
taxes, fees, duties or withholdings or other charges of any nature whatsoever
imposed by any taxing authority, but excluding franchise taxes, taxes imposed
on or measured by any Lender's net income or receipts or similar taxes (such
non-excluded items, solely for purposes of this Section, being called
"Charges"). In the event that any withholding or deduction from any payment to
be made by the Borrower hereunder is required in respect of any Charges
pursuant to any applicable law, rule or regulation (whether such law, rule or
regulation is in effect at the Effective Date or is enacted or implemented at
any time thereafter), 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 Agent an official receipt or
other documentation satisfactory to the Agent evidencing such payment
to such authority; and
(iii) pay to the Agent for the account of the Lenders such
additional amount or amounts as is necessary to ensure that the net
amount actually received by each Lender will equal the full amount
such Lender would have received had no such withholding or deduction
been required.
Moreover, if any Charges are directly asserted against the Agent, any Lender or
any Issuer with respect to any payment received by the Agent, such Lender or
such Issuer hereunder, the Agent or such Lender may pay such Charges and the
Borrower will promptly pay such additional amounts (including any penalties,
interest or expenses) as is necessary in order that the net amount received by
such person after the payment of such Charges (including any Charges on such
additional amount) shall equal the amount such person would have received had
not such Charges been asserted.
If the Borrower fails to pay any Charges when due to the appropriate
taxing authority or fails to remit to the Agent, for the account of the
respective Lenders and the Issuer, the required receipts or other required
documentary evidence, the Borrower shall indemnify the Lenders and the Issuer
for any incremental Charges, interest or penalties that may become payable by
any Lender as a result of any such failure. For purposes of this Section, a
distribution hereunder by the Agent or any Lender or the Issuer to or for the
account of any Lender or the Issuer shall be deemed a payment by the Borrower.
Each Lender which is not a United States Person for Federal income tax
purposes agrees, to the extent that (i) all income realized by such Lender in
respect of any loan or this Agreement
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is, or is expected to be, effectively connected with the conduct by such Lender
of a trade or business in the United States and is includable in gross income
of such Lender for the relevant tax year or (ii) such Lender is entitled to a
total or partial exemption from withholding that is required to be evidenced by
United States Internal Revenue Service Form 1001 or 4224, to deliver to the
Agent and the Borrower, from time to time as requested to the Agent and the
Borrower, such Form 1001 or 4224 ("Exemption Certificate") or any applicable
successor form thereto, completed in a manner reasonably satisfactory to the
Agent and the Borrower.
If a Lender which is not a United States person for federal income tax
purposes has not delivered an Exemption Certificate to the Borrower on or
before its first participation as Lender hereunder or within a reasonable
period of time thereafter, then the Borrower shall not have any obligation to
indemnify such Lender for charges (including related penalties, interest and
expenses) imposed by the United States or any political subdivision thereof
pursuant to this section.
SECTION 4.7. Payments, Computations, etc. Unless otherwise expressly
provided, all payments by the Borrower pursuant to or in respect of this
Agreement, the Notes, each Letter of Credit or any other Loan Document shall be
made by the Borrower to the Agent for the pro rata account of the Lenders
entitled to receive such payment. All such payments required to be made to the
Agent shall be made, without setoff, deduction or counterclaim, not later than
11:00 a.m. (New York City time), on the date due, in same day or immediately
available funds, to such account as the Agent shall specify from time to time
by notice to the Borrower. Funds received after that time shall be deemed to
have been received by the Agent on the next succeeding Business Day. The Agent
shall promptly remit in same day funds to each Lender its share, if any, of
such payments received by the Agent for the account of such Lender. All
interest and fees (including any Post-Default Rate interest payments made
pursuant to Section 3.2.2) shall be computed on the basis of the actual number
of days (including the first day but excluding the last day) occurring during
the period for which such interest or fee is payable over a year comprised of
360 days (or, in the case of interest on Base Rate Loans, 365 days or, if
appropriate, 366 days). Whenever any payment to be made shall otherwise be due
on a day which is not a Business Day, such payment shall (except as otherwise
required by clause (c) of the definition of the term "Interest Period" with
respect to LIBO Rate Loans) be made on the next succeeding Business Day and
such extension of time shall be included in computing interest and fees, if
any, in connection with such payment. The Agent is authorized to charge any
account maintained by the Borrower with it for any Obligations owing to it or
any of the Lenders.
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SECTION 4.8. Sharing of Payments. If any Lender shall obtain any
payment or other recovery (whether voluntary, involuntary, by application of
setoff or otherwise) on account of any Loan (other than pursuant to the terms
of Sections 4.3, 4.4, 4.5 and 4.6) in excess of its pro rata share of payments
pursuant to Section 4.7, then or therewith obtained by all Lenders, such Lender
shall purchase from the other Lenders such participations in Credit Extensions
made by them (without recourse, representation or warranty) as shall be
necessary to cause such purchasing Lender to share the excess payment or other
recovery ratably with each of them; provided, however, that if all or any
portion of the excess payment or other recovery is thereafter recovered from
such purchasing Lender, the purchase shall be rescinded and each Lender which
has sold a participation to the purchasing Lender shall repay to the purchasing
Lender the purchase price to the ratable extent of such recovery together with
an amount equal to such selling Lender's ratable share (according to the
proportion of (a) the amount of such selling Lender's required repayment to the
purchasing Lender to (b) the total amount so recovered from the purchasing
Lender) of any interest or other amount paid or payable by the purchasing
Lender in respect of the total amount so recovered. The Borrower agrees that
any Lender so purchasing a participation from another Lender pursuant to this
Section may, to the fullest extent permitted by law, exercise all its rights of
payment (including pursuant to Section 4.9) with respect to such participation
as fully as if such Lender were the direct creditor of the Borrower in the
amount of such participation. If under any applicable bankruptcy, insolvency
or other similar law, any Lender receives a secured claim in lieu of a setoff
to which this Section applies, such Lender shall, to the extent practicable,
exercise its rights in respect of such secured claim in a manner consistent
with the rights of the Lenders entitled under this Section to share in the
benefits of any recovery on such secured claim.
SECTION 4.9. Setoff. Each Lender shall, upon the occurrence of any
Event of Default and with the consent of the Required Lenders, to the extent
permitted under applicable law, appropriate and apply to the payment of the
Obligations owing to it (whether or not then due), and (as security for such
Obligations) each of the Borrower and the Parent hereby grants to each Lender a
continuing security interest in, any and all balances, credits, deposits,
accounts or moneys of the Borrower and the Parent then or thereafter maintained
with such Lender; provided, however, that any such appropriation and
application shall be subject to the provisions of Section 4.8 (each Lender
agreeing promptly to notify the Borrower or the Parent, as the case may be, and
the Agent after any such setoff and application made by such Lender; but the
failure to give such notice shall not affect the validity of such setoff and
application). The rights of each Lender under this Section are in addition to
other
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rights and remedies (including other rights of setoff under applicable law or
otherwise) which such Lender may have.
SECTION 4.10. Use of Proceeds. The Borrower shall apply all the
proceeds of the Credit Extensions made on the Effective Date in accordance with
the twelfth recital. The proceeds from all subsequent Credit Extensions shall
be applied (a) for working capital and general corporate purposes of the
Borrower, (b) to make revolving loans from time to time by the Borrower to
Petroleum, and (c) for issuing Letters of Credit for working capital and
general corporate purposes of the Borrower and its Subsidiaries and Petroleum.
ARTICLE V
CONDITIONS TO EFFECTIVENESS AND CREDIT EXTENSIONS
SECTION 5.1. Effectiveness. This Amended and Restated Credit
Agreement shall become effective on the date (the "Effective Date") that each
of the conditions precedent set forth in this Section 5.1 shall be fulfilled to
the satisfaction of the Agent.
SECTION 5.1.1. Resolutions, etc. The Agent shall have received from
the Parent, the Borrower, Petroleum and each other Obligor party to a Loan
Document, a certificate, dated the date of the initial Credit Extension, of its
Secretary or Assistant Secretary as to
(a) resolutions of its Board of Directors then in full force
and effect authorizing the execution, delivery and performance of this
Agreement, the Notes and each other Loan Document to be executed by
it;
(b) each Organic Document of the Parent, the Borrower,
Petroleum and each such other Obligor; and
(c) the incumbency and signatures of the officers of the
Parent, the Borrower, Petroleum and each such other Obligor authorized
to act with respect to this Agreement, the Notes and each other Loan
Document as is to be executed by it,
upon which certificate each Lender may conclusively rely until it shall have
received a further certificate of the Secretary or Assistant Secretary of the
Parent, the Borrower, Petroleum and each other Obligor canceling or amending
such prior certificate.
SECTION 5.1.2. Agreement. The Agent shall have received, with
counterparts for each Lender identified on the signature pages hereto, this
Agreement duly executed by each Lender, the
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Agent and an Authorized Officer of each of the Borrower and the Parent.
SECTION 5.1.3. Delivery of Notes. The First Merger Loans and the
Term Loans (as such terms are defined in the Existing Credit Agreement) shall
have been restated and consolidated in full with the Term Loans made hereunder
and Lenders holding First Merger Notes and Term Notes (as such terms are
defined in the Existing Credit Agreement) shall have returned such Notes for
replacement to the Agent. In addition, the Agent shall have received, for the
account of each Lender entitled thereto, its Term Note and Revolving Note,
dated the Effective Date, and duly executed and delivered by an Authorized
Officer of the Borrower.
SECTION 5.1.4. Beverage License Certification Date; Merger of
Sunshine and the Borrower. The Beverage License Certification Date shall have
occurred and the Merger shall contemporaneously with the making of the initial
Credit Extension on the Effective Date, have been consummated pursuant to
applicable law and a certificate of merger (the "Merger Certificate"), in a
manner reasonably satisfactory to the Agent. In addition, the Borrower shall
have delivered or caused to be delivered to the Agent counterparts for each
Lender of the following:
(a) Resolutions. Resolutions of the Boards of Directors and,
to the extent required by applicable law, stockholders of each party
to the Merger Certificate, each certified by the Secretary or an
Assistant Secretary of such party, duly adopted and in full force and
effect on the date of the Merger, authorizing the execution, delivery
and performance by such party of the Merger Certificate and all other
agreements, documents and instruments being delivered in connection
therewith.
(b) Certificates. A certificate from an Authorized Officer
of the Borrower to the effect that attached thereto are true and
correct copies of the Merger Certificate.
(c) Merger Certificate, etc. A true copy of the Merger
Certificate that has been duly completed and stamp filed by the
Secretary of State of Delaware and Florida.
(d) Opinions of Counsel. Opinions of legal counsel for the
Borrower and Sunshine relating to the Merger, which legal opinions
shall be in form and substance reasonably satisfactory to the Agent.
SECTION 5.1.5. Required Consents and Approvals. All required
consents and approvals shall have been obtained and be in full force and effect
with respect to the transactions contemplated hereby and the Merger from (a)
all relevant governmental authorities and regulatory bodies and (b) any other
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Person whose consent or approval the Agent reasonably deems necessary or
appropriate to effect the transactions contemplated hereby and by the Merger.
SECTION 5.1.6. Termination of Sunshine Indenture. All Class 7
Claimants of Sunshine shall have been paid in full or duly provided for
pursuant to a duly entered final Bankruptcy Court Order issued by the
Bankruptcy Court which has not been stayed and through the issuance of the
Sunshine Letter of Credit, and all holders of notes under the Sunshine
Indenture shall have been paid in full (after first applying all cash on hand
at Sunshine to the payment thereof) and the Sunshine Indenture shall have been
terminated and be of no further force or effect.
SECTION 5.1.7. Transfer of Sunshine Trademarks. The Borrower shall
have all right and title in the Sunshine United States Trademarks listed on
Schedule V hereto, free and clear of all Liens, charges or claims (other than
Permitted Encumbrances), and the Agent shall have received a duly perfected
first Lien therein in a manner and pursuant to legal documentation (including
legal opinions) reasonably satisfactory to the Agent.
SECTION 5.1.8. Financial Information, etc. The Agent shall have
received prior to the Effective Date, with counterparts for each Lender,
(a) audited financial statements for the Parent and its
Subsidiaries for the fiscal year ending December 25, 1994 and for
their prior two fiscal years, in each case prepared in accordance with
GAAP consistently applied and free of any Impermissible Qualification;
(b) unaudited financial statements for the Parent and its
Subsidiaries for the seven-month period ending in July of 1995 and
unaudited financial statements of Sunshine for the fiscal quarter
ending on or about June 30, 1995, certified by the chief financial
Authorized Officer of each such Person, in each case prepared in
accordance with GAAP consistently applied (subject to normal year-end
audit adjustments); and
(c) a pro forma consolidated balance sheet for the Parent and
its Subsidiaries (including Sunshine) satisfactory in form and
substance to the Agent and the Lenders, certified by the chief
financial Authorized Officer of the Borrower and the Parent, as the
case may be, giving effect to the consummation of the Merger and all
the transactions contemplated by this Agreement and the other Loan
Documents.
SECTION 5.1.9. Affirmation and Acknowledgement. The Agent shall have
received an Affirmation and Acknowledgement, dated as
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of the Effective Date, substantially in the form of Exhibit P hereto, duly
executed and delivered by each Obligor that is a party to the Security
Agreements, the Pledge Agreements, the Petroleum Guaranty and each other Loan
Document which was executed and delivered pursuant to the Existing Credit
Agreement.
SECTION 5.1.10. UCC Search Results. The Agent shall have received
certified copies of Uniform Commercial Code Requests for Information or Copies
(Form UCC-11), or a similar search report certified by a party acceptable to
the Agent, dated a date reasonably near (but prior to) the Effective Date,
listing all effective financing statements, tax liens and judgment liens which
name Sunshine, as the debtor and which are filed in the jurisdictions in which
filings are to be made pursuant to this Agreement and the other Loan Documents,
and in such other jurisdictions as the Agent may reasonably request, together
with copies of such financing statements (none of which (other than financing
statements (i) filed pursuant to the terms hereof in favor of the Agent, if
such Form UCC-11 or search report, as the case may be, is current enough to
list such financing statements, (ii) being terminated or (iii) in respect of
protective filings or Liens permitted under Section 7.2.3) shall cover any of
the Collateral).
SECTION 5.1.11. Amendment to Borrower Security Agreement, Filings,
etc. The Agent shall have received executed counterparts of an Amendment to
the Borrower Security Agreement, dated as of the Effective Date and duly
executed by the Borrower, substantially in the form of Exhibit T hereto,
together with executed copies of U.C.C. financing statements naming the
Borrower as the debtor and the Agent as the secured party, filed under the
U.C.C. of all jurisdictions (including the locations of all Sunshine stores) as
may be necessary or, in the opinion of the Agent, desirable to perfect the
first priority security interest of the Agent pursuant to the Borrower Security
Agreements, together with evidence satisfactory to the Agent of the filing (or
delivery for filing) of the appropriate trademarks.
SECTION 5.1.12. Solvency Certificates. The Agent shall have
received, with copies for each Lender, solvency certificates in substantially
the form of Exhibit M attached hereto, duly executed by the chief executive
officer and chief financial Authorized Officer of the Borrower, Petroleum and
the Parent, dated the Effective Date and expressly permitting the Agent and the
Lenders to rely thereon.
SECTION 5.1.13. Closing Date Certificates. The Agent shall have
received, with copies for each Lender, a closing date certificate in
substantially the form of Exhibit L attached hereto, duly executed by the chief
financial or executive Authorized Officer of the Borrower and the Parent, and
dated the
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Effective Date, in which certificate the Borrower and the Parent shall agree
and acknowledge that the statements made therein shall be true and correct
representations and warranties of the Borrower and the Parent as of such date.
All documents and agreements appended to such Closing Date Certificate shall be
in form and substance satisfactory to the Agent and the Required Lenders.
SECTION 5.1.14. Evidence of Insurance. The Agent shall have received
evidence of the insurance coverage required to be maintained pursuant to
Section 7.1.4, which insurance shall have been reviewed by one or more of the
Agent's risk managers and be satisfactory to the same, together with a
satisfactory insurance broker's letter or letters as to the compliance of the
same with the requirements of this Agreement.
SECTION 5.1.15. Payment of Outstanding Indebtedness, Payment of Fees
and Interest, etc. The Agent shall have received satisfactory evidence that
all Indebtedness identified in Item 7.2.2(b) ("Indebtedness to be Paid") of the
Disclosure Schedule, together with all interest, all prepayment premiums and
other amounts due and payable with respect thereto, have been paid in full and
all obligations with respect thereto have been terminated and that all Liens
securing such payment of any Indebtedness have been released. In addition, the
Agent shall have received all Uniform Commercial Code Form UCC-3 termination
statements and mortgage releases, if any, or other instruments as may be
suitable or appropriate in connection with the foregoing. Furthermore, all
accrued interest and fees under the Existing Credit Agreement shall have been
paid in full.
SECTION 5.1.16. Opinions of Counsel. The Agent shall have received
opinions, dated the Effective Date and addressed to the Agent and all the
Lenders, from
(a) Xxxxxxxxx & Xxxxxxxxx, L.L.P., counsel to the Obligors,
substantially in the form of Exhibit Q hereto; and
(b) Florida local counsel for matters related to the Merger
and personal property matters in form and substance satisfactory to
the Agent.
SECTION 5.1.17. Agent's Closing Fees, Expenses, etc. The Agent shall
have received for its own account, and for the account of each Lender, as the
case may be, all fees, costs and expenses due and payable pursuant to Sections
3.3 and, if then invoiced, 10.3.
SECTION 5.1.18. Borrowing Base Certificate. The Agent shall have
received, with counterparts for each Lender, an initial Borrowing Base
Certificate from the Borrower, dated the date of the initial Credit Extension
and calculated as of a
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recent date satisfactory to the Agent, duly executed and delivered by an
Authorized Officer of the Borrower.
SECTION 5.1.19. Effective Date. The Effective Date shall have
occurred by October 31, 1995.
SECTION 5.1.20. Stockholders' Acknowledgment and Confirmation. The
Agent shall have received, with a copy for each Lender, a duly executed
acknowledgment and agreement with respect to the Stockholders' Letter of
Understanding acknowledging the terms and conditions of this Agreement, and
agreeing that the terms and provisions thereof remain in full force and effect,
and otherwise in form and substance reasonably satisfactory to the Agent.
SECTION 5.1.21. Satisfactory Legal Form, etc. All documents executed
or submitted pursuant hereto on or prior to the Effective Date by or on behalf
of the Borrower or any of its Subsidiaries or any other Obligors shall be
satisfactory in form and substance to the Agent, the Lenders and their counsel;
the Agent, the Lenders and their counsel shall have received all information,
approvals, opinions, documents or instruments as the Agent, the Lenders or
their counsel may reasonably request.
SECTION 5.2. Conditions to Credit Extensions. The obligation of each
Lender and Issuer to make any Credit Extension (including the initial Credit
Extension and including any issuance of the Sunshine Letter of Credit) shall be
subject to the fulfillment of each of the conditions precedent set forth in
this Section 5.2 to the satisfaction of the Agent:
SECTION 5.2.1. Compliance with Warranties, No Default, etc. Both
before and after giving effect to any Credit Extension, the following
statements shall be true and correct:
(a) the representations and warranties set forth in Article
VI (excluding, however, those contained in Section 6.7) and those set
forth in the other Loan Documents shall be true and correct in all
material respects with the same effect as if then made (unless stated
to relate solely to an earlier date, in which case such
representations and warranties shall be true and correct as of such
earlier date);
(b) except as disclosed by the Borrower to the Agent and the
Lenders pursuant to Section 6.7,
(i) no labor controversy, litigation, arbitration or
governmental investigation or proceeding shall be pending or,
to the knowledge (after due inquiry) of the Parent or the
Borrower, threatened against the Parent or any of its
Subsidiaries (including the Borrower or
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any of its Subsidiaries) which has a reasonable likelihood of
materially and adversely affecting the Parent's or the
Borrower's consolidated business, operations, assets,
revenues, properties or prospects, which purports to affect
the legality, validity or enforceability of this Agreement,
the Notes or any other Loan Document or, in the case of the
initial Credit Extension, seeks to restrain, enjoin or
otherwise prevent the consummation of, or to recover damages
or obtain relief as a result of, the transactions contemplated
by or in connection with the Merger, this Agreement or the
other Loan Documents; and
(ii) no development shall have occurred in any labor
controversy, litigation, arbitration or governmental
investigation or proceeding disclosed pursuant to Section 6.7
which has a reasonable likelihood of materially and adversely
affecting the consolidated businesses, operations, assets,
revenues, properties or prospects of the Parent and its
Subsidiaries taken as a whole or the Borrower and its
Subsidiaries taken as a whole;
(c) the sum of the (i) aggregate outstanding principal amount
of all Revolving Loans and (ii) aggregate amount of Letter of Credit
Outstandings does not exceed the lesser of the Revolving Loan
Commitment Amount (as such amount may be reduced from time to time)
and the Borrowing Base Amount in effect at such time; and
(d) no Default shall have then occurred and be continuing.
SECTION 5.2.2. Credit Extension Request, etc. The Agent shall have
received a Borrowing Request if Loans are being requested or an Issuance
Request if a Letter of Credit is being requested or extended. Each of the
delivery of a Borrowing Request or Issuance Request and the acceptance by the
Borrower of the proceeds of such Credit Extension shall constitute a
representation and warranty by the Borrower that on the date of such Credit
Extension (both immediately before and after giving effect to such Credit
Extension and the application of the proceeds thereof) the statements made in
Section 5.2.1 are true and correct.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders, each Issuer and the Agent to amend and
restate the Existing Credit Agreement and to make Credit Extensions hereunder,
the Borrower and the Parent jointly
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and severally represent and warrant to the Agent, each Issuer and each Lender
as set forth in this Article VI.
SECTION 6.1. Organization, etc. The Borrower and each of its
Subsidiaries and each other Obligor (a) is a corporation validly organized and
existing and in good standing under the laws of the jurisdiction of its
incorporation and (b) is duly qualified to do business and is in good standing
as a foreign corporation in each jurisdiction where the nature of its business
requires such qualification except where the failure to be so qualified or in
good standing could not reasonably be expected to have a material adverse
effect on the financial condition, operations, assets, business, properties,
revenues or prospects of the Borrower and its Subsidiaries taken as a whole or
the Parent and its Subsidiaries taken as a whole, and has full power and
authority and holds all requisite governmental licenses, permits and other
approvals to enter into and perform its Obligations under this Agreement, the
Notes and each other Loan Document to which it is a party, to consummate the
Merger and to own and hold under lease its property and to conduct its business
substantially as currently conducted by it except where the failure to hold a
governmental license, permit, or other approval to own or hold under lease its
property and to conduct its business substantially as currently conducted could
not reasonably be expected to have a material adverse effect on the financial
condition, operations, assets, business, properties, revenues or prospects of
the Borrower and its Subsidiaries taken as a whole or the Parent and its
Subsidiaries taken as a whole.
SECTION 6.2. Due Authorization, Non-Contravention, etc. The
execution, delivery and performance by the Borrower and the Parent of this
Agreement, the Notes and each other Loan Document executed or to be executed by
it, and the execution, delivery and performance by each other Obligor of each
Loan Document executed or to be executed by it, and the consummation of the
Merger, are within the Borrower's, the Parent's and each such Obligor's
corporate powers, have been duly authorized by all necessary corporate action,
and do not
(a) contravene or result in a default under the Borrower's,
the Parent's or any such Obligor's Organic Documents;
(b) contravene or result in a default under any contractual
restriction, law or governmental regulation or court decree or order
binding on the Borrower, the Parent or any such Obligor; or
(c) result in, or require the creation or imposition of, any
Lien on any of any Obligor's properties other than the Liens created
under the Loan Documents in favor of the Agent.
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SECTION 6.3. Government Approval, Regulation, Compliance with Law,
etc. No authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body or other Person
(other than the filing of UCC-1 financing statements in the appropriate
jurisdictions) is required for (a) the due execution, delivery or performance
by the Borrower, the Parent or any other Obligor of this Agreement, the Notes
or any other Loan Document to which it is a party or the consummation of the
Merger, (b) the grant by the Borrower and each applicable Obligor of the
security interests, pledges and Liens granted by the Loan Documents, or (c) the
perfection of or the exercise by the Agent of its rights and remedies under
this Agreement or any other Loan Document.
SECTION 6.4. Validity, etc. This Agreement and each of the Notes has
been duly executed and delivered, and each other Loan Document executed by the
Borrower, and the Parent, as the case may be, will, on the due execution and
delivery thereof, constitute, the legal, valid and binding obligations of the
Borrower, and the Parent, as the case may be, enforceable in accordance with
their respective terms; and each Loan Document executed pursuant hereto by each
other Obligor will, on the due execution and delivery thereof by such Obligor,
be the legal, valid and binding obligation of such Obligor enforceable in
accordance with its terms, such enforceability being subject in each case to
the effect of any applicable bankruptcy, insolvency, reorganization, moratorium
or similar law affecting creditors' rights generally, and subject to the effect
of general principles of equity (regardless of whether considered in a
proceeding in equity or at law). Each of the Loan Documents which purports to
create a security interest creates a valid first priority security interest in
the Collateral subject thereto, subject only to Liens permitted by Section
7.2.3, securing the payment of the Obligations.
SECTION 6.5. Financial Information. The financial statements
delivered pursuant to Sections 5.1.8(a) and (b) have been prepared in
accordance with GAAP consistently applied (including application of Financial
Accounting Statement No. 106) and such financial statements and the pro forma
balance sheets delivered pursuant to clause (c) of Section 5.1.8 present fairly
the financial condition of the corporations covered thereby as at the dates
thereof and the results of their operations for the periods then ended. The
Parent and its Subsidiaries have no material liabilities, including as to
contingencies and unusual or forward commitments, that are not disclosed in the
foregoing financial statements or the footnotes thereto or set forth in Item
6.5 ("Certain Material Liabilities") of the Disclosure Schedule. The pro forma
balance sheet delivered pursuant to clause (c) of Section 5.1.8 have been
prepared in accordance with the requirements of GAAP for the preparation of pro
forma financial statements.
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SECTION 6.6. No Material Adverse Change. (a) As of the Effective
Date, from and after June 25, 1995, there has been no material adverse change
in the financial condition, operations, assets, business, properties, revenues
or prospects of Sunshine or the Parent and its Subsidiaries or the Borrower and
its Subsidiaries, in each case taken as a whole.
(b) For the period after the Effective Date, since the Effective Date
there has been no material adverse change in the financial condition,
operations, assets, business, properties, revenues or prospects of the Parent
and its Subsidiaries or the Borrower and its Subsidiaries, in each case taken
as a whole.
SECTION 6.7. Litigation, Labor Controversies, etc. There is no
pending or, to the knowledge of the Borrower, threatened litigation, action,
proceeding, or labor controversy affecting the Parent or any of its
Subsidiaries (including the Borrower or any of its Subsidiaries) or any other
Obligor, or any of their respective properties, businesses, assets or revenues,
which could reasonably be expected to materially adversely affect the financial
condition, operations, assets, business, properties, revenues or prospects of
the Borrower and its Subsidiaries taken as a whole or the Parent and its
Subsidiaries taken as a whole, except as disclosed in Item 6.7 ("Litigation")
of the Disclosure Schedule, or which purports to affect the legality, validity
or enforceability of this Agreement, the Notes or any other Loan Document.
SECTION 6.8. Subsidiaries. The Parent has no direct Subsidiaries
except the Borrower and Petroleum. The Borrower has no Subsidiaries except
Delight and those Subsidiaries, if any, which it may acquire or create after
the date of the initial Credit Extension in accordance with the provisions
hereof. Petroleum has no Subsidiaries except Petroleum of California.
SECTION 6.9. Ownership of Properties; Liens. Except as set forth in
Item 6.9 ("Ownership of Properties") of the Disclosure Schedule, the Borrower
and the Parent, and each of their respective Subsidiaries, own good and
marketable title to all of their properties and assets, and have valid fee or
leasehold interests in all property, real and personal, tangible and
intangible, of any nature whatsoever (including patents, trademarks, trade
names, service marks and copyrights), free and clear of all Liens, charges or
claims (including infringement claims with respect to patents, trademarks,
copyrights and the like which could interfere in the conduct of their
businesses as currently conducted) except to the extent expressly permitted by
Section 7.2.3.
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SECTION 6.10. Taxes. The Parent and each of its Subsidiaries
(including the Borrower and its Subsidiaries) have filed (a) all returns and
reports required by law to have been filed by or with respect to it in
connection with federal, state and local income taxes (including any
predecessor or prior consolidated group of which it may have been a member) and
(b) all other returns and reports with respect to Taxes required by law to have
been filed to the extent (as to this clause (b)) the failure to do so could
reasonably be expected to have a material adverse effect on the financial
condition, operations, assets, business, properties, revenues or prospects of
the Parent and its Subsidiaries taken as a whole or the Borrower and its
Subsidiaries taken as a whole. All federal, state and local income taxes (as
described above) that are owing have been paid in full and all other Taxes and
governmental charges that are owing have been paid in full to the extent the
failure to do so could reasonably be expected to have a material adverse effect
on the financial condition, operations, assets, business, properties or
prospects the Parent and its Subsidiaries taken as a whole or the Borrower and
its Subsidiaries taken as a whole, except in each such case any such taxes or
charges which are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books.
SECTION 6.11. Pension and Welfare Plans. During the
twelve-consecutive-month period prior to the date of the execution and delivery
of this Agreement and prior to the date of any Credit Extension hereunder, no
steps have been taken to terminate any Pension Plan, and no contribution
failure has occurred with respect to any Pension Plan sufficient to give rise
to a Lien under Section 302(f) of ERISA. No condition exists or event or
transaction has occurred with respect to any Pension Plan which might result in
the incurrence by the Borrower or any member of the Controlled Group of any
material liability, fine or penalty. Except as disclosed in Item 6.11
("Employee Benefit Plans") of the Disclosure Schedule, neither the Borrower nor
any member of the Controlled Group or any other Obligor has any contingent
liability with respect to any post-retirement benefit under a Welfare Plan,
other than liability for continuation coverage described in Part 6 of Title I
of ERISA.
SECTION 6.12. Environmental Warranties. Except as set forth in Item
6.12 ("Environmental Matters") of the Disclosure Schedule:
(a) all facilities and property (including underlying
groundwater) owned or leased by the Borrower, the Parent or any of
their respective Subsidiaries have been, and continue to be, owned or
leased by the Borrower, the Parent and such Subsidiaries in compliance
in all material respects with all Environmental Laws;
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(b) there have been no past, and there are no pending or, to
the best knowledge of the Parent and the Borrower, threatened
(i) claims, complaints, notices or requests for
information received by the Borrower, the Parent or any of
their respective Subsidiaries with respect to any alleged
violation of any Environmental Law, as to which the Agent has
not received written notice, or
(ii) complaints, notices or inquiries to the
Borrower, the Parent or any of their respective Subsidiaries
regarding potential liability under any Environmental Law or,
with regard to contamination, any common or civil law, as to
which the Agent has not received written notice;
(c) there is no claim, complaint, notice, request for
information or inquiry that has been received by or made to the
Borrower, the Parent or any of their respective Subsidiaries with
respect to any alleged violation of any Environmental Law or regarding
potential liability under any Environmental Law or, with regard to
contamination, any common or civil law, which, singly or in aggregate,
could reasonably be expected to have a material adverse effect on the
financial condition, operations, assets, business, properties,
revenues or prospects of the Borrower and its Subsidiaries taken as a
whole or the Parent and its Subsidiaries taken as a whole;
(d) there have been no Releases of Hazardous Materials at, on
or under any property now or previously owned or leased by the
Borrower, the Parent or any of their respective Subsidiaries that,
singly or in the aggregate, could reasonably be expected to have a
material adverse effect on the financial condition, operations,
assets, business, properties, revenues or prospects of the Borrower
and its Subsidiaries taken as a whole or the Parent and its
Subsidiaries taken as a whole;
(e) the Borrower, the Parent and their respective
Subsidiaries have been issued and are in compliance in all material
respects with all permits, certificates, approvals, licenses and other
authorizations relating to environmental matters and necessary or
desirable for their businesses;
(f) no property now or previously owned or leased by the
Borrower, the Parent or any of their respective Subsidiaries is listed
or proposed for listing (with respect to owned property only) on the
National Priorities List pursuant to CERCLA, on the CERCLIS or on any
similar state list of sites requiring investigation or clean-up;
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(g) there are no underground storage tanks (including
petroleum storage tanks) that are abandoned or that have been inactive
for greater than one year on or under any property now or previously
owned or leased by the Borrower, the Parent or any of their respective
Subsidiaries;
(h) there are no underground storage tanks, active or
abandoned, including petroleum storage tanks, on or under any property
now or previously owned or leased by the Borrower, the Parent or any
of their respective Subsidiaries that do not have leak detection
systems as required by and in compliance in all material respects with
all Environmental Law;
(i) there are no underground storage tanks, active or
abandoned, including petroleum storage tanks, on or under any property
now or previously owned or leased by the Borrower, the Parent or any
of their respective Subsidiaries that have Released or suffered
Release(s) of Hazardous Materials that, singly or in the aggregate,
could reasonably be expected to have a material adverse effect on the
financial condition, operations, assets, business, properties,
revenues or prospects of the Borrower and its Subsidiaries taken as a
whole or the Parent and its Subsidiaries taken as a whole;
(j) there are no underground storage tanks, active or
abandoned, including petroleum storage tanks, on or under any property
now or previously owned or leased by the Borrower, the Parent or any
of their respective Subsidiaries that have Released Hazardous
Materials and have not or would not qualify and be eligible for the
funding (subject to applicable deductibles) of the cleanup of
Release(s) and third party liability by a State fund;
(k) there are no underground storage tanks, active or
abandoned, including petroleum storage tanks, on or under any property
now or previously owned or leased by the Borrower, the Parent or any
of their respective Subsidiaries that have Release(s) the cleanup of
which will or is reasonably expected to exceed the maximum funding of
cleanup by a State fund;
(l) there are no septic systems, cess pools, underground
systems or underground injection xxxxx on or under any property now or
previously owned or leased by the Borrower, the Parent or any of their
respective Subsidiaries that have Released or suffered Releases of
Hazardous Materials which, singly or in the aggregate, could
reasonably be expected to have a material adverse effect on the
financial condition, operations, assets, business, properties,
revenues or prospects of the Borrower and its
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Subsidiaries taken as a whole or the Parent and its Subsidiaries taken
as a whole;
(m) there are no fuel pumps, underground storage tanks, or
above ground storage tanks, including petroleum storage tanks, on or
under any property now owned or leased by the Borrower, the Parent or
any of their respective Subsidiaries that required or are reasonably
expected to be required to be modified, upgraded or replaced to
include emission control devices in a manner (including as to costs
and expenses) that, singly or in the aggregate, could reasonably be
expected to have a material adverse effect on the financial condition,
operations, assets, business, properties, revenues or prospects of the
Borrower and its Subsidiaries taken as a whole or the Parent and its
Subsidiaries taken as a whole;
(n) any tank or pump replacement program of the Borrower, the
Parent or any of their respective Subsidiaries, singly or in the
aggregate, is not reasonably expected to have a material adverse
effect on the financial condition, operations, assets, business,
properties, revenues or prospects of Borrower and its Subsidiaries
taken as a whole or the Parent and its Subsidiaries taken as a whole;
(o) neither the Parent nor any Subsidiary of the Parent
(including the Borrower and its Subsidiaries) has directly transported
or directly arranged for the transportation of any Hazardous Material
to any location which is listed or proposed for listing on the
National Priorities List pursuant to CERCLA, on the CERCLIS or on any
similar state list or which is the subject of federal, state or local
enforcement actions or other investigations which may lead to material
claims against the Parent or such Subsidiary thereof for any remedial
work, damage to natural resources or personal injury, including claims
under CERCLA;
(p) there are no polychlorinated biphenyls or friable
asbestos present at any property now or previously owned or leased by
the Borrower, the Parent or any of their respective Subsidiaries that,
singly or in the aggregate, have, or may reasonably be expected to
have, a material adverse effect on the financial condition,
operations, assets, business, properties, revenues or prospects of the
Borrower and its Subsidiaries taken as a whole or the Parent and its
Subsidiaries taken as a whole; and
(q) no conditions (other than those covered in the preceding
clauses (a) through (p)) exist at, on or under any property now or
previously owned or leased by the Borrower, the Parent or any of their
respective Subsidiaries which,
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with the passage of time, or the giving of notice or both, would give
rise to any material liability under any Environmental Law.
SECTION 6.13. Accuracy of Information. (a) All factual information
heretofore or contemporaneously furnished by or on behalf of the Borrower and
the Parent in writing to the Agent or any Lender for purposes of or in
connection with this Agreement or any transaction contemplated hereby is, and
all other such factual information hereafter furnished by or on behalf of the
Borrower and the Parent to the Agent or any Lender, will be, when taken as a
whole true and accurate in every material respect on the date as of which such
information is dated or certified and, as to information delivered before the
Effective Date, as of the date of execution and delivery of this Agreement by
the Agent and such Lender, and such information is not, when taken as whole or
shall not be, as the case may be, incomplete by omitting to state any material
fact necessary to make such information not misleading.
(b) All written information prepared by any consultant or
professional advisor on behalf of the Parent or any of its Subsidiaries which
was furnished to the Agent or any Lender in connection with the preparation,
execution and delivery of this Agreement (including, without limitation, the
Memorandum) has been reviewed by the Borrower and the Parent, and nothing has
come to the attention of the Borrower and the Parent in the context of such
review which would lead it to believe that such information (or the assumptions
on which such information is based) is not, taken as a whole, true and correct
in all material respects or that such information, taken as a whole, omits to
state any material fact necessary to make such information not misleading in
any material respect.
(c) Insofar as any of the information described above includes
assumptions, estimates, projections or opinions, the Borrower and the Parent
have reviewed such matters and nothing has come to the attention of the
Borrower and the Parent in the context of such review which would lead it to
believe that such assumptions, estimates, projections or opinions, omit to
state any material fact necessary to make such assumptions, estimates,
projections or opinions not reasonable or not misleading in any material
respect. All projections and estimates have been prepared in good faith on the
basis of reasonable assumptions and represent the best estimate of future
performance by the party supplying the same.
SECTION 6.14. Confirmation of Representations and Warranties. Each
of the representations and warranties contained in the Existing Credit
Agreement (including without limitation those contained in Amendment No. 3) is
hereby confirmed and restated in all material respects as of the date when
made.
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SECTION 6.15. Expropriation and Condemnation. Not more than fifteen
locations as to which any Realty is located is the subject of a condemnation,
expropriation or other taking by any federal, state, provincial, municipal or
other competent authority or a notice or proceeding in respect thereof.
SECTION 6.16. Intellectual Property Collateral. With respect to any
Intellectual Property Collateral the loss, impairment or infringement of which
might have a material adverse effect on the financial condition, operations,
assets, business, properties, revenues or prospects of the Borrower and its
Subsidiaries taken as whole or the Parent and its Subsidiaries taken as a
whole:
(a) such Intellectual Property Collateral is subsisting and
has not been adjudged invalid or unenforceable, in whole or in part;
(b) such Intellectual Property Collateral is valid and
enforceable;
(c) the Borrower and the other Subsidiaries of the Parent
have made all necessary filings and recordations to protect their
respective interests in such Intellectual Property Collateral,
including recordations of all such interests in the Intellectual
Property Collateral in the United States Patent and Trademark Office
and/or the United States Copyright Office;
(d) the Borrower and the other Subsidiaries of the Parent are
the exclusive owners of the entire and unencumbered right, title and
interest in and to such Intellectual Property Collateral (except for
Liens created under the Loan Documents) and no claim has been made
that the use of such Intellectual Property Collateral does or may
violate the asserted rights of any third party except for claims that
could not reasonably be expected to have a material adverse effect on
the financial condition, operations, assets, business, properties,
revenues or prospects of the Borrower and its Subsidiaries taken as a
whole or the Parent and its Subsidiaries taken as a whole; and
(e) the Borrower and the other Subsidiaries of the Parent
have performed and will continue to perform all acts and has paid and
will continue to pay all required fees and taxes to maintain each and
every item of such Intellectual Property Collateral in full force and
effect in the United States.
SECTION 6.17. Ownership of Stock. The Parent owns free and clear of
all Liens (other than any Lien pursuant to the Parent
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Pledge Agreement), 100% of the outstanding shares of common stock (whether
voting or non-voting) of the Borrower and Petroleum on a fully diluted basis.
The Borrower owns free and clear of all Liens 100% of the outstanding shares of
common stock (whether voting or non-voting) of Delight on a fully diluted
basis. There are no outstanding options, warrants or convertible securities
with respect to the shares of common stock of the Borrower.
SECTION 6.18. Absence of Default. Neither the Parent nor any of its
Subsidiaries is (i) in default as of the Effective Date in the payment of (or
in the performance of any obligation applicable to) any Indebtedness, except as
disclosed in Item 6.18 ("Absence of Default") in the Disclosure Schedule or
(ii) in violation of any law or governmental regulation or court decree or
order, except where such violation could not reasonably be expected to have a
material adverse effect on the financial condition, operations, assets,
business, properties, revenues or prospects of the Borrower and its
Subsidiaries taken as a whole or the Parent and its Subsidiaries taken as a
whole.
SECTION 6.19. Regulations G, U and X. Neither the Parent nor any of
its Subsidiaries is engaged principally, or as one of its important activities,
in the business of extending credit for the purpose of purchasing or carrying
"margin stock". None of the proceeds of any Loan or any Letter of Credit will
be used for the purpose of, or be made available by the Borrower in any manner
to any other Person to enable or assist such Person in, directly or indirectly
purchasing or carrying "margin stock". Terms for which meanings are provided
in F.R.S. Board Regulation G, U or X or any regulations substituted therefor,
as from time to time in effect, are used in this Section with such meanings.
SECTION 6.20. Government Regulation. Neither the Parent nor any of
its Subsidiaries is an "investment company" nor a "company controlled by an
investment company" within the meaning of the Investment Company Act of 1940,
as amended, or a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company," within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
SECTION 6.21. Burdensome Agreements. Neither the Parent nor any of
its Subsidiaries is or will be a party to any instrument or subject to any
charter or other corporate restriction which could have a materially adverse
effect on its financial condition, operations, assets, business, properties,
revenues or prospects.
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SECTION 6.22. List of Guaranty Beneficiaries. Set forth in Item
7.2.2(j) ("E-Z Serve Corporation Outstanding Corporate Guaranties") of the
Disclosure Schedule is a list of each of the beneficiaries of the corporate
guaranties referred to in Section 7.2.2 (j) as of the Effective Date.
ARTICLE VII
COVENANTS
SECTION 7.1. Affirmative Covenants. The Borrower and the Parent
jointly and severally agree with the Agent, each Issuer and each Lender that,
until all Commitments have terminated and all Obligations have been paid and
performed in full, the Borrower and the Parent will perform the obligations set
forth in this Section 7.1.
SECTION 7.1.1. Financial Information, Reports, Notices, etc. The
Borrower and the Parent will furnish, or will cause to be furnished, to each
Lender and the Agent copies of the following financial statements, reports,
notices and information:
(a) as soon as available and in any event within 35 days
after the end of each month of each Fiscal Year of the Parent, (i) a
monthly financial report for such month and consolidated balance
sheets of the Parent and its Subsidiaries as of the end of such month
and consolidated statements of earnings of the Parent and its
Subsidiaries for such month and for the period commencing at the end
of the previous Fiscal Year and ending with the end of such month,
setting forth in each case in comparative form the consolidated
figures for the corresponding periods of the previous Fiscal Year (it
being acknowledged that such figures for corresponding periods of the
previous Fiscal Year shall not include the operations of Time Saver
until delivery of the financial statements for February of 1996 and
Sunshine until delivery of the financial statements for September of
1996), certified by the chief financial Authorized Officer of the
Parent in a manner acceptable to the Agent and (ii) a certificate,
executed by the chief financial Authorized Officer of the Parent
showing the amount of intercompany Indebtedness outstanding at the end
of such month.
(b)(i) as soon as available and in any event within 90 days
after the end of each Fiscal Year of the Parent, a copy of the annual
audit report for such Fiscal Year for the Parent and its Subsidiaries,
including therein consolidated and consolidating balance sheets of the
Parent and its Subsidiaries as of the end of such Fiscal Year and
consolidated and consolidating statements of earnings and consolidated
statements of cash flow of the Parent and its
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Subsidiaries for such Fiscal Year, in each case certified (without any
Impermissible Qualification) by KPMG Peat Marwick or other independent
public accountants of nationally recognized standing as fairly
presenting, in accordance with GAAP consistently applied, the
financial condition, results of operations and cash flows of the
Parent and its Subsidiaries at the end of such Fiscal Year and for the
Fiscal Year then ended, together with a certificate, executed by the
chief financial Authorized Officer of the Borrower, showing (in
reasonable detail and with appropriate calculations and computations
in all respects satisfactory to the Agent) the calculation of Excess
Cash Flow, and (ii) as soon as available and in any event within 120
days after the end of each Fiscal Year of the Parent, all management
letters and internal control and similar memoranda prepared by the
accountants certifying the financial statements of the Parent for such
Fiscal Year;
(c) as soon as available and in any event within 45 days
after the end of each Fiscal Quarter of each Fiscal Year of the
Parent, (i) a quarterly financial report and consolidated balance
sheets of the Parent and its Subsidiaries as of the end of such Fiscal
Quarter and consolidated statements of earnings and consolidated
statements of cash flow of the Parent and its Subsidiaries for such
Fiscal Quarter and for the period commencing at the end of the
previous Fiscal Year and ending with the end of such Fiscal Quarter,
setting forth in each case in comparative form the consolidated
figures for the corresponding periods of the previous Fiscal Year (it
being acknowledged that such figures for corresponding periods of the
previous Fiscal Year shall not include the operations of Time Saver
until delivery of the financial statements for the first Fiscal
Quarter of the 1996 Fiscal Year and Sunshine until delivery of the
financial statements for the third Fiscal Quarter of the 1996 Fiscal
Year) certified by the chief financial Authorized Officer of the
Parent in a manner acceptable to the Agent and (ii) a Compliance
Certificate, executed by the chief financial Authorized Officer of the
Parent, showing (in reasonable detail and with appropriate
calculations and computations in all respects satisfactory to the
Agent) compliance with the financial covenants set forth in Section
7.2.4;
(d) as soon as available and in any event within 15 days
after the end of each calendar month, a Borrowing Base Certificate
calculated as of the last day of the immediately preceding month;
(e) as soon as possible and in any event within three
Business Days after knowledge of an Authorized Officer of the
occurrence of any Default, a statement of the chief
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financial Authorized Officer of the Borrower setting forth details of
such Default and the action which the Borrower has taken and proposes
to take with respect thereto;
(f) as soon as possible and in any event within three
Business Days after (x) the occurrence of any materially adverse
development with respect to any litigation, action, proceeding, or
labor controversy described in Section 6.7 or (y) the commencement of
any labor controversy, litigation, action, proceeding of the type
described in Section 6.7, notice thereof and, at the Agent's request,
copies of all documentation relating thereto;
(g) promptly after the sending or filing thereof, copies of
all reports which the Borrower sends to any class of its security
holders generally, in their capacities as such, and all reports and
registration statements which the Borrower or any of its Subsidiaries
files with the Securities Exchange Commission or any securities
exchange;
(h) immediately upon becoming aware of the institution of any
steps by the Borrower or any other Person to terminate any Pension
Plan, or the failure to make a required contribution to any Pension
Plan if such failure is sufficient to give rise to a Lien under
Section 302(f) of ERISA, or the taking of any action with respect to a
Pension Plan which could result in the requirement that the Borrower
furnish a bond or other security to the PBGC or such Pension Plan, or
the occurrence of any event with respect to any Pension Plan which
could result in the incurrence by the Borrower of any material
liability, fine or penalty, or any material increase in the contingent
liability of the Borrower with respect to any post-retirement Welfare
Plan benefit, notice thereof and copies of all documentation relating
thereto;
(i) promptly when available and, in any event, (x) at least
30 days prior to the last day of each Fiscal Year, a preliminary
budget in form and scope reasonably satisfactory to the Agent for the
next succeeding Fiscal Year, and (y) within 30 days after the
beginning of each Fiscal Year, a definitive budget in form and scope
satisfactory to the Agent for such Fiscal Year, in each case in
reasonable detail for the relevant Fiscal Year and setting forth the
principal assumptions upon which such budget is based; and
(j) such other information respecting the condition or
operations, financial or otherwise, of the Borrower or any of its
Subsidiaries or the Parent or any of its Subsidiaries as any Lender
through the Agent may from time to time reasonably request, including
in respect of establishing the eligibility of the Accounts and
Inventory comprising the
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Eligible Accounts and Eligible Inventory included in each Borrowing
Base Certificate delivered pursuant to this Agreement.
SECTION 7.1.2. Compliance with Laws, etc. The Borrower and the
Parent will, and will cause each of their respective Subsidiaries to:
(a) comply in all respects with all governmental rules and
regulations and all other applicable laws, rules, regulations and
orders (except where the failure to so comply could not reasonably be
expected to have a material adverse effect on the financial condition,
operations, assets, business, properties, revenues or prospects of the
Borrower and its Subsidiaries taken as a whole or the Parent and its
Subsidiaries taken as a whole), such compliance to include the
maintenance and preservation of its corporate existence (except to the
extent permitted under Section 7.2.10) and qualification as a foreign
corporation in any jurisdiction where the Borrower or the other
Subsidiaries of the Parent have assets or conduct business, except
where failure to maintain and preserve such existence or qualification
would not materially adversely affect the Borrower's or the Parent's
consolidated financial condition, operations, assets, business,
revenues, properties or prospects; and
(b) comply in all material respects with all governmental
rules and regulations and all other material applicable laws, rules,
regulations and orders relating to taxation, including the payment,
before the same become delinquent, of (i) all federal, state and local
income taxes and (ii) all other taxes, assessments and governmental
charges except in each such case to the extent being diligently
contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have been set aside on
its books.
The Parent will continue to file a consolidated federal income tax return of
the "affiliated group" of corporations of which the Parent is the "common
parent corporation" (as such terms are defined in Section 1504(a)(1) of the
Code) for each taxable year of the Parent and will cause each of its
Subsidiaries to consent to each such filing.
SECTION 7.1.3. Maintenance of Properties. The Borrower and the
Parent will, and will cause each of their respective Subsidiaries to, maintain,
preserve, protect and keep their respective properties in good repair, working
order and condition (except to the extent sold, transferred or otherwise
disposed of pursuant to a Permitted Disposition), and make necessary and proper
repairs, renewals (including lease payments on leasehold
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properties) and replacements so that the business carried on in connection
therewith may be properly conducted at all times (including the maintenance of
convenience stores consistent with the specifications set forth in the
Memorandum), unless the Borrower or the Parent, as the case may be, determines
in good faith that the continued maintenance of any of its properties is no
longer economically desirable (provided that any such determination with
respect to any property material to the operations of the Borrower or any other
Subsidiary of the Parent shall be made only after consultation with the Agent).
Without limiting the effect of any provision contained in the immediately
preceding sentence, and in furtherance thereof, the Borrower and the Parent,
unless otherwise directed by the Required Lenders, will, and will cause each of
their respective Subsidiaries to, make Capital Expenditures for each Fiscal
Year set forth below in an aggregate amount equal to or greater than (subject
to Section 7.2.7) the amount set forth opposite such Fiscal Year:
Fiscal Year Capital Expenditures
----------- --------------------
1995 $11,400,000
1996 $ 9,800,000
1997 $ 8,800,000
1998 $ 8,900,000
1999 $ 6,000,000
2000 $ 6,100,000
2001 $ 6,200,000
SECTION 7.1.4. Insurance. (a) The Borrower and the Parent shall
maintain, and shall cause each of their respective Subsidiaries to maintain,
with responsible and reputable insurance carriers licensed to write insurance,
insurance with respect to all their property, business and assets against such
casualties and contingencies and of such types and in such amounts as is
customary in the case of similar businesses.
(b) All premiums on insurance policies required under this Section
shall be paid by the Parent and its Subsidiaries. Each policy for property
insurance maintained by the Parent and its Subsidiaries shall (i) name the
Agent (as Agent for the Lenders) as loss payee under a lenders loss payable
clause, (ii) provide that no cancellation, reduction in amount or material
change in coverage thereof or any portion thereof shall be effective until at
least 30 days after receipt by the Agent of written notice thereof, (iii)
provide that any notice under such policies relating to cancellation, reduction
or material change in coverage or the occurrence of any loss in excess of
$250,000 shall be simultaneously delivered to the Agent and (iv) be
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reasonably satisfactory in all other respects to the Agent. Each policy for
liability insurance maintained by the Parent and its Subsidiaries shall (i)
name the Agent as an additional insured, (ii) provide that no cancellation,
reduction in amount or material change in coverage thereof or any portion
thereof shall occur by reason of any breach of any representation or warranty,
nor shall any thereof be effective until at least 30 days after receipt by the
Agent of written notice thereof, (iii) provide that any notice under such
policies relating to cancellation, reduction or material change in coverage or
the occurrence of any loss in excess of $250,000 shall be simultaneously
delivered to the Agent and (iv) be reasonably satisfactory in all other
respects to the Agent.
(c) The Borrower will deliver, and the Parent will cause its
Subsidiaries to deliver, to the Agent, promptly upon request, (i) the originals
of all policies evidencing all insurance required to be maintained under clause
(a) or certificates thereof by the insurers together with a counterpart of each
policy, (ii) a satisfactory insurance broker's letter as to the adequacy of the
insurance being maintained by the Parent and its Subsidiaries and as to the
compliance of the same with the requirements of this Section and (iii) evidence
as to the payment of all premiums then due thereon (or with respect to any
insurance policies providing for payment other than by a single lump sum, all
installments for the current year due thereon to such date), provided that
neither the Agent nor any Lender shall be deemed by reason of its custody of
such policies to have knowledge of the contents thereof. The Borrower will
also deliver, and the Parent will also cause its Subsidiaries to deliver, to
the Agent not later than five days prior to the expiration of any policy a
binder or certificate of the insurer evidencing the replacement thereof.
(d) If a Default or Event of Default has not occurred and is
continuing, all proceeds of property insurance (other than any such proceeds
which reimburse the Borrower or any other applicable Subsidiary of the Parent
for environmental liabilities or remediation costs previously paid by the
Borrower or such Subsidiary) paid on account of the loss of or damage to any
property or asset of the Parent or any of its Subsidiaries shall be paid to the
Borrower or other applicable Subsidiary of the Parent, and the Borrower or such
Subsidiary shall use such proceeds within 365 days thereafter to repair,
restore or replace such property or asset or to reinvest in other capital
assets reasonably related to the ownership and operation of convenience stores.
With respect to any casualty or other covered occurrence in which the aggregate
proceeds of property insurance receivable by the Borrower or any other
applicable Subsidiary of the Parent (other than any such proceeds which
reimburse the Borrower or such Subsidiary for environmental liabilities or
remediation costs previously paid by the Borrower or such Subsidiary) exceeds
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$250,000, to the extent the Borrower or such Subsidiary elects not to apply
such insurance proceeds for the repair, replacement or restoration of such
property or asset or for reinvestment in capital assets reasonably related to
the ownership and operation of convenience stores, or such insurance proceeds
are not in fact so applied within 365 days, all of such unutilized insurance
proceeds shall be delivered by the Borrower or such Subsidiary (and the Parent
shall cause such Subsidiary to so deliver) to the Agent and shall constitute
"Excess Insurance Proceeds," to be applied as a mandatory prepayment of the
Term Loans pursuant to clause (c) of Section 3.1.2. Notwithstanding any
provision to the contrary in this Agreement or any other Loan Document, if an
Event of Default has occurred and is continuing, all proceeds of property
insurance (including business interruption insurance) shall be payable directly
to the Agent and the Agent in its sole discretion may treat such proceeds as
"Excess Insurance Proceeds" or, subject to the consent of the Required Lenders,
permit the use of such proceeds to repair, restore or replace the property or
asset which suffered the loss for which such proceeds are being paid.
SECTION 7.1.5. Books and Records. (a) The Borrower and the Parent
will, and will cause each of their respective Subsidiaries to, keep books and
records which accurately reflect all of their respective business affairs and
transactions.
(b) The Borrower and the Parent will, and will cause each of their
respective Subsidiaries to, permit the Agent and each Lender or any of their
representatives, at reasonable times and intervals and upon reasonable notice,
to visit all of their respective offices, to discuss their respective financial
matters with their respective officers and independent public accountant and
consultants (and the Borrower and the Parent hereby authorize such independent
public accountant and consultants to discuss such financial matters with each
Lender or its representatives whether or not any representative of the Borrower
or Parent is present) and to examine (and, at the expense of the Borrower, copy
extracts from) any of their respective books or other corporate records
(including computer records).
(c) The Borrower shall pay any fees of such independent public
accountant and consultants incurred in connection with the Agent's or any
Lender's exercise of its rights pursuant to this Section. The Agent, in its
sole discretion and at the sole expense of the Borrower, may conduct such
audits and examinations of the books and records of the Parent and its
Subsidiaries as the Agent reasonably deems necessary or advisable.
SECTION 7.1.6. Environmental Covenant. The Borrower and the Parent
will, and will cause each of their respective Subsidiaries to,
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(a) use and operate all of its facilities and properties in
compliance in all material respects with all Environmental Laws, keep
(and, when applicable, obtain in a timely manner) all necessary
material permits, approvals, certificates, licenses and other
authorizations relating to environmental matters in effect and remain
in compliance in all material respects therewith, and handle all
Hazardous Materials (including the disposition and storing thereof) in
compliance in all material respects with all applicable Environmental
Laws;
(b) respond to all Releases in accordance with law and in a
manner that assures and will assure that, to the maximum extent
commercially practicable, State funds pay for the response to
Releases;
(c) promptly notify the Agent and provide copies upon receipt
of all written claims, complaints, notices or inquiries relating to
the condition of its facilities and properties or compliance with
Environmental Laws; and
(d) provide such information and certifications which the
Agent may reasonably request from time to time to evidence compliance
with this Section.
SECTION 7.1.7. As to Intellectual Property Collateral. (a) The
Borrower shall not, and the Parent shall not permit any of its other
Subsidiaries to, unless the Borrower or such Subsidiary shall reasonably and in
good faith determine that any of its Intellectual Property Collateral is of
negligible economic value to it (provided that any such determination with
respect to any trademark or other xxxx used in connection with the name of any
convenience store or gasoline station shall be made only after consultation
with the Agent), do any act, or omit to do any act, whereby any of such
Intellectual Property Collateral may lapse or become abandoned or dedicated to
the public or unenforceable.
(b) The Borrower or the Parent shall notify the Agent immediately if
it knows, or has reason to know, that any application or registration relating
to any material item of the Intellectual Property Collateral may become
abandoned or dedicated to the public or placed in the public domain or invalid
or unenforceable, or of any adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office, the United States Copyright
Office or any foreign counterpart thereof or any court) regarding the ownership
of the Borrower or any other Subsidiary of the Parent of any material item of
the Intellectual Property Collateral or the Borrower's or such Subsidiary's
right to register the same or to keep and maintain and enforce the same.
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(c) In no event shall the Borrower or any other Subsidiary of the
Parent, or any of their respective agents, employees, designees or licensees,
file an application for the registration of any Intellectual Property
Collateral with the United States Patent and Trademark Office, the United
States Copyright Office or any similar office or agency in any other country or
any political subdivision thereof, unless it promptly informs the Agent, and
upon request of the Agent, executes and delivers any and all agreements,
instruments, documents and papers as the Agent may reasonably request to
evidence the Agent's security interest in such Intellectual Property Collateral
and the goodwill and general intangibles of the Borrower or such Subsidiary
relating thereto or represented thereby.
(d) The Borrower shall take, and the Parent shall cause its
Subsidiaries to take, all necessary steps, including in any proceeding before
the United States Patent and Trademark Office, the United States Copyright
Office, to maintain and pursue any application (and to obtain the relevant
registration) filed with respect to, and to maintain any registration of, any
material item of the Intellectual Property Collateral, including the filing of
applications for renewal, affidavits of use, affidavits of incontestability and
opposition, interference and cancellation proceedings and the payment of fees
and taxes (except to the extent that dedication, abandonment or invalidation is
permitted under the foregoing clauses (a), (b) and (c)).
SECTION 7.1.8. Future Subsidiaries. Without limiting the effect of
any provision contained herein (including Section 7.2.5), upon any Person
becoming, after the Effective Date, either a direct or indirect Subsidiary of
the Borrower, or upon the Parent or the Borrower acquiring additional capital
stock of any existing Subsidiary having voting rights or contingent voting
rights
(a) such Person shall become a party to (x) a guaranty in
substantially the form of the Petroleum Guaranty delivered pursuant to
the Original Credit Agreement, and (y) a security agreement in
substantially the form of the Petroleum Security Agreement delivered
pursuant to the Original Credit Agreement, if not already a party to
any of the foregoing, with such modifications as the Agent may
reasonably request, in a manner satisfactory to the Agent;
(b) the Borrower and the applicable Subsidiary shall,
pursuant to the Borrower Pledge Agreement, or the Parent and the
applicable Subsidiary shall, pursuant to the Parent Pledge Agreement,
as the case may be, pledge to the Agent
(i) all of the outstanding shares of such capital
stock of such Subsidiary owned directly by it, along with
undated stock powers for such certificates,
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executed in blank (or, if any such shares of capital stock are
uncertificated, confirmation and evidence satisfactory to the
Agent that the security interest in such uncertificated
securities has been perfected by the Agent in accordance with
Section 8-313 and Section 8-321 of the U.C.C. or any similar
law which may be applicable); and
(ii) all notes (if any) evidencing intercompany
Indebtedness in favor of the Borrower and each such Subsidiary
(which shall be in substantially the form of Attachment A to
the Borrower Pledge Agreement), as the case may be;
(c) the Agent shall have received from each such Subsidiary
certified copies of Uniform Commercial Code Requests for Information
or Copies (Form UCC-11), or a similar search report certified by a
party acceptable to the Agent, dated a date reasonably near (but prior
to) the date of any such Person becoming a direct or indirect
Subsidiary of the Borrower, listing all effective financing
statements, tax liens and judgment liens which name such Person as the
debtor and which are filed in the jurisdictions in which filings are
to be made pursuant to this Agreement and the other Loan Documents,
and in such other jurisdictions as the Agent may reasonably request,
together with copies of such financing statements (none of which
(other than financing statements (i) filed pursuant to the terms
hereof in favor of the Agent, if such Form UCC-11 or search report, as
the case may be, is current enough to list such financing statements,
(ii) being terminated pursuant to termination statements that are to
be delivered on or prior to the date such Person becomes such
Subsidiary or (iii) in respect of protective filings or Liens
permitted under Section 7.2.3) shall cover any of the Collateral); and
(d) the Agent shall have received from each such Subsidiary
executed copies of U.C.C. financing statements naming each such
Subsidiary as the debtor and the Agent as the secured party, suitable
for filing under the U.C.C. of all jurisdictions as may be necessary
or, in the reasonable opinion of the Agent, desirable to perfect the
first priority security interest of the Agent pursuant to the security
agreement entered into by such Subsidiary, together with evidence
satisfactory to the Agent of the filing (or delivery for filing) of
appropriate trademark, copyright and patent security supplements,
together, in each case, with such opinions of legal counsel for the Borrower
relating thereto, which legal opinions shall be in form and substance
reasonably satisfactory to the Agent.
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SECTION 7.1.9. Springing Liens. Within 60 days after (a) any
judgment or order for the payment of money is rendered against the Borrower or
any of its Subsidiaries or any other Obligor and an amount in excess of
$1,000,000 in respect of such payment is not covered in full by insurance
maintained with responsible insurance carriers, (b) the occurrence of any Event
of Default or (c) the Funded Debt to EBITDA Ratio being greater than (i) with
respect to the third Fiscal Quarter of the 1995 Fiscal Year, 4.50 to 1.00, (ii)
with respect to the fourth Fiscal Quarter of the 1995 Fiscal Year, 3.55 to 1.00
(iii) with respect to the first Fiscal Quarter of the 1996 Fiscal Year, 3.15 to
1.00, (iv) with respect to the second Fiscal Quarter of the 1996 Fiscal Year,
2.85 to 1.00, (v) with respect to the third Fiscal Quarter of the 1996 Fiscal
Year, 2.40 to 1.00, (vi) with respect to the fourth Fiscal Quarter of the 1996
Fiscal Year 2.35 to 1.00 and (vii) with respect to each Fiscal Quarter
thereafter, 1.90 to 1.00, at the direction of the Agent (at the request of the
Required Lenders), the Borrower and the Parent shall, and shall cause each of
their respective Subsidiaries to, take all steps necessary, at their own cost
and expense, to (a) grant the Agent a first priority leasehold Lien on
operating facilities (including renewals) and a first priority mortgage Lien on
real property, fixtures, buildings and improvements thereon (including the
Sunshine properties after the Merger) and (b) obtain title insurance coverage
on such property in an amount, containing such terms and exceptions and issued
by an insurance company, acceptable to the Agent in the Agent's reasonable
discretion (together with such favorable legal opinions with respect thereto as
the Agent may reasonably request).
SECTION 7.1.10. Gasoline Purchases. Without limiting the effect of
Section 7.2.1, each of the Borrower and Petroleum will purchase gasoline only
to satisfy its own retail and wholesale requirements, will not engage in
speculative trading or trade in gasoline futures for speculative purposes and
will not purchase or sell futures contracts or enter into any commodities
derivative transactions of any kind.
SECTION 7.1.11. Rate Protection. The Borrower shall have in effect
interest rate swap, hedge, cap, collar or similar arrangements with any Lender
or Lenders satisfactory in form and substance (including as to the counterparty
thereto) and pursuant to documentation satisfactory to the Agent in a notional
amount equal to or greater than $20,000,000, and shall maintain such
arrangements in full force and effect until the third anniversary of the
Effective Date.
SECTION 7.1.12. Further Assurances. The Borrower and the Parent
agree that from time to time, at the expense of the Borrower and the Parent,
the Borrower and the Parent will, and will cause each of their respective
Subsidiaries to, promptly execute and deliver all further instruments and
documents, and
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take all further action, that may be reasonably necessary or desirable, or that
the Agent may reasonably request, in order to perfect and protect the
assignments, security interests and Liens granted or purported to be granted
under the Loan Documents or to enable the Agent to exercise and enforce its
rights and remedies under this Agreement or any other Loan Document with
respect to any Collateral. Without limiting the generality of the foregoing,
the Borrower and the Parent will, and will cause each of their respective
Subsidiaries to
(a) execute and file such financing or continuation
statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as the Agent may
request, in order to perfect and preserve the assignments, security
interests and Liens granted or purported to be granted under the Loan
Documents;
(b) furnish to the Agent, at the request of the Agent, an
opinion of counsel acceptable to the Required Lenders to the effect
that all financing or continuation statements have been filed, and all
other action has been taken, to perfect and validate continuously from
the date hereof the assignments, security interests and Liens granted
under the Loan Documents; and
(c) furnish to the Agent, from time to time at the Agent's
request, statements and schedules further identifying and describing
the Collateral and such other reports in connection with the
Collateral as the Agent may reasonably request, all in reasonable
detail.
With respect to the foregoing and the grant of the security interest
under the Loan Documents, the Borrower and the Parent and each of their
respective Subsidiaries hereby authorize the Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all
or any part of the Collateral without the signature of the Borrower, the Parent
or any such Subsidiary where permitted by law. A carbon, photographic or other
reproduction of this Agreement or any financing statement covering the
Collateral or any part thereof shall be sufficient as a financing statement
where permitted by law.
SECTION 7.2. Negative Covenants. The Borrower and the Parent jointly
and severally agree with the Agent, each Issuer and each Lender that, until all
Commitments have terminated and all Obligations have been paid and performed in
full, the Borrower and the Parent will perform the obligations set forth in
this Section 7.2.
SECTION 7.2.1. Business Activities. The Borrower and the Parent will
not, and will not permit any of their respective
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Subsidiaries to, engage in any business activity, except those described in the
second recital and such activities as may be incidental or related thereto and
activities incidental or related to the consummation of the Merger.
SECTION 7.2.2. Indebtedness. The Borrower and the Parent will not,
and will not permit any of their respective Subsidiaries to, create, incur,
assume or suffer to exist or otherwise become or be liable in respect of any
Indebtedness, other than, without duplication, the following:
(a) Indebtedness in respect of the Credit Extensions and
other Obligations;
(b) until the date of the initial Credit Extension on the
Effective Date, Indebtedness identified in Item 7.2.2(b)
("Indebtedness to be Paid") of the Disclosure Schedule;
(c) Indebtedness existing as of the Effective Date which is
identified in Item 7.2.2(c) ("Ongoing Indebtedness") of the Disclosure
Schedule;
(d) Indebtedness (other than Indebtedness described in the
immediately preceding clause (c)) in an aggregate principal amount not
to exceed $2,000,000 at any time outstanding in respect of (i)
Indebtedness which is incurred by the Borrower or any other Subsidiary
of the Parent to a vendor to finance its acquisition of any assets
permitted to be acquired pursuant to Section 7.2.7 and (ii)
Capitalized Lease Liabilities to the extent permitted by Section
7.2.7;
(e) unsecured Indebtedness incurred in the ordinary course of
business (including open accounts extended by suppliers on normal
trade terms in connection with purchases of goods and services, but
excluding all Indebtedness incurred through the borrowing of money and
all Contingent Liabilities);
(f) Indebtedness in respect of Rate Protection Agreements
with a Lender and entered into solely with respect to the Credit
Extensions or, as to currency matters, for protection in connection
with the Borrower's ordinary course of business;
(g) Indebtedness in an aggregate principal amount not to
exceed $15,000,000 at any time outstanding in respect of the Petroleum
Note;
(h) Indebtedness of the Parent owing to the Borrower pursuant
to the Parent Inter-Company Note;
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(i) other Indebtedness in an aggregate amount not exceeding
$1,000,000 at any time; and
(j) Obligations of the Parent under guarantees of any of its
Subsidiaries' obligations to trade creditors in an aggregate amount
outstanding not to exceed $10,000,000; provided that (i) each of such
guaranties have an expressly stated limited amount and are for a term
of no more than one year and (ii) the identity of the beneficiaries of
such guaranties is provided in writing to the Agent;
provided, however, that no Indebtedness pursuant to clauses (d) and (i) may be
incurred if, after giving effect to the incurrence thereof, any Default shall
have occurred and be continuing.
SECTION 7.2.3. Liens. The Borrower and the Parent will not, and will
not permit any of their respective Subsidiaries to, create, incur, assume or
suffer to exist any Lien upon any of its property, revenues or assets, whether
now owned or hereafter acquired, except:
(a) Liens securing payment of the Obligations granted
pursuant to any Loan Document;
(b) Liens (i) granted to secure payment of Indebtedness
described in clause (c) of Section 7.2.2 to the extent such Liens are
identified in Item 7.2.2(c) ("Ongoing Indebtedness") of the Disclosure
Schedule or (ii) on properties of Sunshine identified in Item 7.2.3
("Liens") of the Disclosure Schedule;
(c) Liens granted to secure payment of the Indebtedness of
the type permitted and described in clause (d) of Section 7.2.2 and
covering only those assets acquired with the proceeds of such
Indebtedness;
(d) Liens for taxes, assessments or other governmental
charges or levies not at the time delinquent or thereafter payable
without penalty or being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on its books;
(e) Liens of carriers, warehousemen, mechanics, materialmen
and landlords incurred in the ordinary course of business for sums not
overdue or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books;
(f) Liens incurred in the ordinary course of business in
connection with worker's compensation, unemployment
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insurance or other forms of governmental insurance or benefits
(excluding any Liens in favor of a Pension Plan or PBGC), or to secure
performance of tenders, statutory obligations, leases and contracts
(other than for borrowed money) entered into in the ordinary course of
business or to secure obligations on surety or appeal bonds;
(g) judgment Liens in existence less than 15 days after the
entry thereof or with respect to which execution has been stayed or
the payment of which is covered in full (subject to a customary
deductible) by insurance maintained with responsible insurance
companies; and
(h) easements, rights-of-way, zoning and similar restrictions
and other similar encumbrances or title defects which, in the
aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the property subject thereto or
interfere with the ordinary conduct of the business of the Borrower or
its Subsidiaries.
SECTION 7.2.4. Financial Condition. The Borrower and the Parent will
not permit:
(a) the Interest Coverage Ratio, as of the last day of each
Fiscal Quarter set forth below, to be less than the ratio set forth
opposite such Fiscal Quarter:
Minimum Interest
Fiscal Quarter Coverage Ratio
---------------- --------------
The third and fourth
Fiscal Quarters of the
1995 Fiscal Year 3.0:1.00
Each Fiscal Quarter of
the 1996 Fiscal Year 4.0:1.00
Each Fiscal Quarter of
the 1997 Fiscal Year 5.0:1.00
Each Fiscal Quarter of
the 1998 Fiscal Year 6.0:1.00
Each Fiscal Quarter of
the 1999 Fiscal Year
and thereafter 7.0:1.00
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(b) the Fixed Charge Coverage Ratio, as of the last day of
each Fiscal Quarter set forth below, to be less than the ratio set
forth opposite such Fiscal Quarter:
Minimum Interest
Fiscal Quarter Coverage Ratio
---------------- --------------
The third Fiscal Quarter
of the 1995 Fiscal Year 1.00:1.00
The fourth Fiscal Quarter
of the 1995 Fiscal Year 1.00:1.00
The first Fiscal Quarter
of the 1996 Fiscal Year .85:1.00
The second Fiscal Quarter
of the 1996 Fiscal Year .90:1.00
The third Fiscal Quarter
of the 1996 Fiscal Year 1.00:1.00
The fourth Fiscal Quarter
of the 1996 Fiscal Year 1.05:1.00
The first Fiscal Quarter
of the 1997 Fiscal Year 1.05:1.00
The second Fiscal Quarter
of the 1997 Fiscal Year 1.10:1.00
The third Fiscal Quarter
of the 1997 Fiscal Year 1.10:1.00
The fourth Fiscal Quarter
of the 1997 Fiscal Year 1.15:1.00
The first Fiscal Quarter
of the 1998 Fiscal Year 1.15:1.00
The second Fiscal Quarter
of the 1998 Fiscal Year 1.20:1.00
The third Fiscal Quarter
of the 1998 Fiscal Year 1.20:1.00
The fourth Fiscal Quarter
of the 1998 Fiscal Year 1.25:1.00
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Minimum Interest
Fiscal Quarter Coverage Ratio
---------------- --------------
The first Fiscal Quarter
of the 1999 Fiscal Year 1.25:1.00
The second Fiscal Quarter
of the 1999 Fiscal Year 1.30:1.00
The third Fiscal Quarter
of the 1999 Fiscal Year 1.30:1.00
The fourth Fiscal Quarter
of the 1999 Fiscal Year 1.35:1.00
The first Fiscal Quarter
of the 2000 Fiscal Year 1.35:1.00
The second Fiscal Quarter
of the 2000 Fiscal Year 1.40:1.00
The third Fiscal Quarter
of the 2000 Fiscal Year 1.45:1.00
The fourth Fiscal Quarter
of the 2000 Fiscal Year 1.45:1.00
The first Fiscal Quarter
of the 2001 Fiscal Year
and thereafter 1.45:1.00
(c) the Gross Profit Margin, as of the last day of each
Fiscal Quarter set forth below, to be less than the percentage set
forth opposite such Fiscal Quarter:
Calendar Month Gross Profit Margin
---------------- -------------------
The second Fiscal Quarter
of the 1995 Fiscal Year 14.5%
The third Fiscal Quarter of
the 1995 Fiscal Year 18.5%
The fourth Fiscal Quarter
of the 1995 Fiscal Year 18.5%
Each Fiscal Quarter of the
1996 Fiscal Year 19.0%
Each Fiscal Quarter of the
1997 Fiscal Year 19.5%
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Calendar Month Gross Profit Margin
---------------- -------------------
Each Fiscal Quarter of the
1998 Fiscal Year 20.0%
Each Fiscal Quarter of the
1999 Fiscal Year 20.5%
Each Fiscal Quarter of the
2000 Fiscal Year 21.0%
Each Fiscal Quarter of the
2001 Fiscal Year 21.5%
(d) the Funded Debt to EBITDA Ratio, as of the last day of
each Fiscal Quarter set forth below, to be greater than the ratio set
forth opposite such Fiscal Quarter:
Maximum Funded Debt
Fiscal Quarter to EBITDA Ratio
---------------- -------------------
The third Fiscal Quarter of
the 1995 Fiscal Year 4.75:1.00
The fourth Fiscal Quarter
of the 1995 Fiscal Year 3.75:1.00
The first Fiscal Quarter of
the 1996 Fiscal Year 3.25:1.00
The second Fiscal Quarter
of the 1996 Fiscal Year 3.00:1.00
The third Fiscal Quarter of
the 1996 Fiscal Year 2.50:1.00
The fourth Fiscal Quarter
of the 1996 Fiscal Year 2.50:1.00
Each Fiscal Quarter of the
1997 Fiscal Year
and thereafter 2.00:1.00
(e) the Tangible Net Worth at any time to be less than the
sum of
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(i) $55,000,000
plus
(ii) 50% of Net Income for each Fiscal Quarter of
each Fiscal Year commencing with the 1995 Fiscal Year without
deduction for losses;
(f) the SGA Margin, as of the last day of each Fiscal
Quarter, commencing with the second Fiscal Quarter of the 1995 Fiscal
Year, to be greater than 3.8%.
SECTION 7.2.5. Investments. The Borrower and the Parent will not,
and will not permit any of their respective Subsidiaries to, make, incur,
assume or suffer to exist any Investment in any other Person, except:
(a) the Parent's Investment existing on the Effective Date in
the Borrower and Petroleum;
(b) the Borrower's Investment existing on the Effective Date
in Delight;
(c) Petroleum's Investment existing on the Effective Date in
Petroleum of California;
(d) Cash Equivalent Investments;
(e) without duplication, Investments permitted as
Indebtedness pursuant to clauses (g) and (h) of Section 7.2.2;
(f) without duplication, Investments permitted as Permitted
Business Acquisitions pursuant to Section 7.2.7 (including any
Subsidiary of the Borrower formed for the sole purpose of effectuating
a Permitted Business Acquisition so long as the Borrower shall have
complied with the provisions of Section 7.1.10 in respect of such
Subsidiary);
(g) promissory notes received as consideration in respect of
Permitted Dispositions (subject to the limitations set forth in the
definition thereof), to the extent pledged to the Agent for the
benefit of the Agent and the Lenders; and
(h) other Investments in an aggregate amount at any one time
not to exceed $250,000;
provided, however, that
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(i) any Investment which when made complies with the
requirements of the definition of the term "Cash Equivalent
Investment" may continue to be held notwithstanding that such
Investment if made thereafter would not comply with such requirements;
and
(ii) no Investment otherwise permitted by clause (e) shall be
permitted to be made if, immediately before or after giving effect
thereto, any Default shall have occurred and be continuing.
SECTION 7.2.6. Restricted Payments, etc. (a) On and at all times
after the Effective Date, the Borrower
(i) will not declare, pay or make any dividend or
distribution (in cash, property or obligations) on any shares of any
class of capital stock (now or hereafter outstanding) of the Borrower
or on any warrants, options or other rights with respect to any shares
of any class of capital stock (now or hereafter outstanding) of the
Borrower (other than dividends or distributions payable in its common
stock or warrants to purchase its common stock or split-ups or
reclassifications of its stock into additional or other shares of its
common stock) or apply, or permit any of its Subsidiaries to apply,
any of its funds, property or assets to the purchase, redemption,
sinking fund or other retirement of, or agree or permit any of its
Subsidiaries to purchase or redeem, any shares of any class of capital
stock (now or hereafter outstanding) of the Borrower, or warrants,
options or other rights with respect to any shares of any class of
capital stock (now or hereafter outstanding) of the Borrower; and
(ii) will not, and will not permit any of its Subsidiaries
to, make any deposit for any of the purposes described in the
preceding clause (a)(i).
(b) On and at all times after the Effective Date, the Parent
(i) will not declare, pay or make any dividend or
distribution (in cash, property or obligations) on any shares of any
class of capital stock (now or hereafter outstanding) of the Parent or
on any warrants, options or other rights with respect to any shares of
any class of capital stock (now or hereafter outstanding) of the
Parent (other than dividends or distributions payable in its common
stock or warrants to purchase its common stock or split-ups or
reclassifications of its stock into additional or other shares of its
common stock) or apply, or permit any of its Subsidiaries to apply,
any of its funds, property or assets to the purchase, redemption,
sinking fund or other
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retirement of, or agree or permit any of its Subsidiaries to purchase
or redeem, any shares of any class of capital stock (now or hereafter
outstanding) of the Parent, or warrants, options or other rights with
respect to any shares of any class of capital stock (now or hereafter
outstanding) of the Parent; provided, however, that the Parent may,
with respect to any shares of Series C Preferred Stock, declare and
pay dividends thereon solely in the form of additional shares of
Series C Preferred Stock, in accordance with the terms of such Series
C Preferred Stock as in effect on the date of Amendment No. 3; and
(ii) will not, and will not permit any of its Subsidiaries
to, make any deposit for any of the purposes described in the
preceding clause (b)(i).
SECTION 7.2.7. Capital Expenditures, etc. The Borrower and the
Parent will not, and will not permit any of their respective Subsidiaries to,
make or, without duplication, commit to make Capital Expenditures in any Fiscal
Year, except
(a) Capital Expenditures (other than Capitalized Lease
Liabilities) of the Borrower and other Subsidiaries of the Parent
which do not aggregate in any Fiscal Year in excess of the amount set
forth opposite such Fiscal Year under the Capital Expenditure Level
applicable to such Fiscal Year, plus an amount equal to insurance
proceeds (other than business interruption insurance proceeds) which
are reinvested in accordance with Section 7.1.4 in capital assets of
the Borrower or other applicable Subsidiary which suffered such loss:
Capital Capital Capital Capital
Fiscal Expenditure Expenditure Expenditure Expenditure
Year Xxxxx X Xxxxx XX Xxxxx XXX Xxxxx XX
---- ------- -------- --------- --------
1995 $19,900,000 $15,900,000 $11,900,000 $11,400,000
1996 18,800,000 15,000,000 11,300,000 9,800,000
1997 16,200,000 13,000,000 9,700,000 8,800,000
1998 13,400,000 10,700,000 8,900,000 8,900,000
1999 13,300,000 10,600,000 8,000,000 6,000,000
2000 14,800,000 11,800,000 8,900,000 6,100,000
2001 16,400,000 13,100,000 9,800,000 6,200,000
provided, however, that, during any Fiscal Year, commencing with the
1996 Fiscal Year, in which Capital Expenditure Level I is in effect,
the Borrower and such other Subsidiaries may make or, without
duplication, commit to
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make, additional Capital Expenditures (other than Capitalized Lease
Liabilities) in an amount not to exceed 25% of Excess Cash Flow for
the immediately preceding Fiscal Year; provided further, however, that
the Borrower and such other Subsidiaries may not make any Business
Acquisition unless such Business Acquisition is a Permitted Business
Acquisition; and
(b) Capitalized Lease Liabilities which do not aggregate in
any Fiscal Year in excess of $500,000.
SECTION 7.2.8. Rental Obligations. The Borrower and the Parent will
not, and will not permit any of their respective Subsidiaries to, enter into at
any time any arrangement which does not create a Capitalized Lease Liability
and which involves the leasing by the Borrower or any other Subsidiary of the
Parent from any lessor of any real or personal property (or any interest
therein), except arrangements which, together with all other such arrangements
which shall then be in effect, will not require the payment of an aggregate
amount of rentals by the Borrower and such other Subsidiaries of the Parent in
excess of (excluding escalations resulting from a rise in the consumer price or
similar index) $15,000,000 for any Fiscal Year; provided, however, that any
calculation made for purposes of this Section shall exclude any amounts
required to be expended for maintenance and repairs, insurance, taxes,
assessments, and other similar charges.
SECTION 7.2.9. Take or Pay Contracts. The Borrower and the Parent
will not, and will not permit any of their respective Subsidiaries to, enter
into or be a party to any arrangement for the purchase of materials, supplies,
other property or services if such arrangement by its express terms requires
that payment be made by the Borrower, the Parent or any such Subsidiary
regardless of whether such materials, supplies, other property or services are
delivered or furnished to it.
SECTION 7.2.10. Consolidation, Merger, etc. Other than the
consummation of the Merger, the Borrower and the Parent will not, and will not
permit any of their respective Subsidiaries to, liquidate or dissolve,
consolidate or amalgamate with, or merge into or with, any other Person, or
purchase or otherwise acquire all or any substantial part of the assets or
stock of any Person (or of any division thereof) other than pursuant to a
Permitted Business Acquisition.
SECTION 7.2.11. Asset Dispositions, etc. The Borrower and the Parent
will not, and will not permit any of their respective Subsidiaries to, sell,
transfer, lease, contribute or otherwise convey or dispose of, or grant
options, warrants or other rights with respect to, all or any part of its
assets (including
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accounts receivable and capital stock of Subsidiaries) to any Person, except
(a) if such sale, transfer, lease, contribution or conveyance
is of Inventory in the ordinary course of its business;
(b) if such disposition is a Permitted Disposition; or
(c) if such assets are worn or obsolete and the net book
value of such assets, together with the net book value of all other
assets sold, transferred, leased, contributed or conveyed by the
Borrower, the Parent or any of their respective Subsidiaries pursuant
to this clause during the Fiscal Year in which such assets are to be
sold, transferred, leased, contributed or conveyed, does not exceed
$250,000 in the aggregate.
SECTION 7.2.12. Modification of Certain Agreements. Neither the
Borrower nor the Parent will consent to any amendment, supplement or other
modification of any of the terms or provisions contained in, or applicable to,
the Purchase Agreement, the Merger Certificate or the Stockholders Agreement,
other than any such amendment, supplement or other modification which is
immaterial and which could not adversely affect the Agent or any Lender.
SECTION 7.2.13. Transactions with Affiliates. The Borrower and the
Parent will not, and will not permit any of their respective Subsidiaries to,
enter into, or cause, suffer or permit to exist any arrangement or contract
with, any of its other Affiliates unless such arrangement or contract is on
fair and reasonable terms and is an arrangement or contract of the kind which
would be entered into by a prudent Person in the position of the Borrower or
such Subsidiary with a Person which is not one of its Affiliates (it being
acknowledged that transactions between the Parent or any of its Subsidiaries,
on the one hand, and any Stockholder or any of its Affiliates, on the other
hand, involving the provision of financial, investment banking, management,
consulting or underwriting services by such Stockholder or any of its
Affiliates shall not be prohibited by this Section to the extent that the fees
payable (x) to DLJ or its Affiliates do not exceed the usual and customary fees
of DLJ or its Affiliates charged to Persons that are not Affiliates of DLJ and
its Affiliates or (y) to any other Stockholder or its Affiliates do not exceed
the fees charged by recognized investment banking institutions which provide
financial, investment banking, management, consulting or underwriting services
in the ordinary course of their business, whether through direct equity
ownership, warrants, contract rights or otherwise).
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SECTION 7.2.14. Negative Pledges, Restrictive Agreements, etc. The
Borrower and the Parent will not, and will not permit any of their respective
Subsidiaries to, enter into any agreement (excluding this Agreement and any
other Loan Document) prohibiting:
(a) the creation or assumption of any Lien upon its
properties, revenues or assets, whether now owned or hereafter
acquired (other than pursuant to an agreement governing Indebtedness
permitted by clause (d) of Section 7.2.2 to the extent such agreement
relates solely to the assets financed with the proceeds of such
Indebtedness), or the ability of the Borrower or any other Obligor to
amend or otherwise modify this Agreement or any other Loan Document;
or
(b) the ability of any Subsidiary of the Parent to make any
payments, directly or indirectly, to the Borrower or the Parent by way
of dividends, advances, repayments of loans or advances,
reimbursements of management and other intercompany charges, expenses
and accruals or other returns on investments, or any other agreement
or arrangement which restricts the ability of any such Subsidiary to
make any payment, directly or indirectly, to the Borrower.
In addition, the Borrower and the Parent will not, and will not permit
any of their respective Subsidiaries to, enter into any tax sharing agreement
or similar arrangement unless the same shall have been reviewed by and
consented to by the Agent (such consent not to be unreasonably withheld).
SECTION 7.2.15. Management and Director Fees, Expenses, etc. The
Borrower and the Parent will not, and will not permit any of their respective
Subsidiaries to:
(a) pay management, advisory, consulting or other similar
fees, other than (i) fees payable to the Lenders or any of their
affiliates, (ii) fees payable on the date of the initial Credit
Extension and disclosed to the Agent, and (iii) fees payable to
consultants engaged on arm's-length basis; or
(b) reimburse any Affiliates for any expenses unless the same
shall be otherwise permitted hereunder and shall be reasonable and
documented in reasonable detail.
SECTION 7.2.16. Environmental Liens. The Borrower and the Parent
will not, and will not permit any of their respective Subsidiaries to, allow
any Lien imposed pursuant to any law, rule, regulation or order relating to any
Hazardous Material (including the disposal thereof) to be imposed or to remain
on any real property owned or operated by the Borrower, the Parent
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or any of their respective Subsidiaries, except as contested in good faith by
appropriate proceedings for which adequate reserves have been established and
are being maintained on its books.
SECTION 7.2.17. Fiscal Year End. Neither the Borrower nor the Parent
shall change its fiscal year to end on any date other than on the last Sunday
of December.
SECTION 7.2.18. Activities of the Parent. Without limiting the
effect of any provision contained in this Article VII, the Parent will not
engage in any business activity other than its continuing ownership of all the
shares of capital stock of the Borrower and Petroleum and its compliance with
the obligations applicable to it under the Loan Documents. Without limiting
the generality of the immediately preceding sentence, the Parent will not (a)
create, incur, assume or suffer to exist any Indebtedness (other than
Indebtedness in respect of the guaranty contained in Article IX), (b) create,
assume, or suffer to exist any Lien upon, or grant any options or other rights
with respect to, any of its revenues, property or other assets, whether now
owned or hereafter acquired (other than pursuant to the Loan Documents), (c)
wind-up, liquidate or dissolve itself (or suffer to exist any of the
foregoing), consolidate or amalgamate with or merge into or with any other
Person, or convey, sell, transfer, lease or otherwise dispose of all or any
part of its assets, in one transaction or a series of transactions, to any
Person or Persons, (d) create, incur, assume or suffer to exist any Investment
in any Person other than (i) as provided in clause (a) of Section 7.2.5 and
(ii) in respect of any additional equity Investments in the Borrower or (e)
permit to be taken any action that would result in a Change in Control. The
Parent agrees not to commence or cause the commencement of any of the actions
described in clause (b), (c) or (d) of Section 8.1.9 of this Agreement with
respect to any of its Subsidiaries.
SECTION 7.2.19. Activities of Certain Subsidiaries of the Parent.
Without limiting the effect of any provision contained in this Article VII:
(a) Petroleum of California will not engage in any business
activity other than owning and operating gasoline stations in
California and Arizona; and
(b) Delight will not engage in any business activity other
than the holding of the lease at the merchandise distribution
warehouse located at 000 Xxxx Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxx.
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ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. Listing of Events of Default. Each of the following
events or occurrences described in this Section 8.1 shall constitute an "Event
of Default".
SECTION 8.1.1. Non-Payment of Obligations. The Borrower shall
default
(a) in the payment or prepayment when due of any principal of
any Loan;
(b) in the payment when due of any interest or fees and such
default shall remain unremedied for a period in excess of three
Business Days; and
(c) in the payment when due of any other Obligation and such
default shall continue unremedied for a period of 10 Business Days.
SECTION 8.1.2. Breach of Warranty. Any representation or warranty of
the Borrower or any other Obligor made or deemed to be made hereunder or in any
other Loan Document executed by it or any other writing or certificate
furnished by or on behalf of the Borrower or any other Obligor to the Agent or
any Lender pursuant to this Agreement or any such other Loan Document
(including any certificates delivered pursuant to Article V) is or shall be
incorrect when made in any material respect. Any representation or warranty of
Xxxxxx Companies, Inc. under the Purchase Agreement or of Sunshine under the
Merger Agreement shall have been incorrect when made which could reasonably be
expected to have a material adverse effect on the financial condition,
operations, assets, business, properties, revenues or prospects of the Borrower
and its Subsidiaries taken as a whole or the Parent and its Subsidiaries taken
as a whole.
SECTION 8.1.3. Non-Performance of Certain Covenants and Obligations.
The Borrower or the Parent shall default in the due performance and observance
of any of their obligations under clause (e) of Section 7.1.1, Section 7.1.8,
Section 7.1.9, Section 7.1.11 or Section 7.2 or any other Obligor shall default
in the performance of any of its obligations in respect of such Sections as
such Sections are incorporated by reference or otherwise in any Loan Document
to which such Obligor is a party.
SECTION 8.1.4. Non-Performance of Other Covenants and Obligations.
Any Obligor shall default in the due performance and observance of (a) any
agreement contained in Section 7.1.1 not covered in Section 8.1.3 and such
default shall continue unremedied for a period of 10 days from the earlier of
the date an Authorized Officer of an Obligor has actual knowledge thereof
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and the receipt by an Obligor of written notice thereof from the Agent, or (b)
any other agreement contained herein or in any other Loan Document (other than
items covered by Section 8.1.3) executed by it, and such default shall continue
unremedied for a period of 30 days from the earlier of the date an Authorized
Officer of an Obligor has actual knowledge thereof and the receipt by an
Obligor of written notice thereof from the Agent.
SECTION 8.1.5. Default on Other Indebtedness. A default shall occur
in the payment when due (subject to any applicable grace period), whether by
acceleration or otherwise, of any Indebtedness (other than Indebtedness
described in Section 8.1.1) of the Borrower or any of its Subsidiaries or any
other Obligor having a principal amount, individually or in the aggregate, in
excess of $1,000,000, or a default shall occur in the performance or observance
of any obligation or condition with respect to such Indebtedness if the effect
of such default is to accelerate the maturity of any such Indebtedness or such
default shall continue unremedied for any applicable period of time sufficient
to permit the holder or holders of such Indebtedness, or any trustee or agent
for such holders, to cause such Indebtedness to become due and payable prior to
its expressed maturity.
SECTION 8.1.6. Judgments. Any judgment or order for the payment of
money in excess of $2,000,000 shall be rendered against the Borrower or any of
its Subsidiaries or any other Obligors and either
(a) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order; or
(b) there shall be any period of 45 consecutive days during
which a stay of enforcement of such judgment or order, by reason of a
pending appeal, bond or otherwise, shall not be in effect.
SECTION 8.1.7. Pension Plans. Any of the following events shall
occur with respect to any Pension Plan
(a) the institution of any steps by the Borrower any member
of its Controlled Group, any other Obligor, or any other Person to
terminate a Pension Plan if, as a result of such termination, the
Borrower or any such member could be required to make a contribution
to such Pension Plan, or could reasonably expect to incur a liability
or obligation to such Pension Plan, in excess of $1,000,000; or
(b) a contribution failure occurs with respect to any Pension
Plan sufficient to give rise to a Lien on property of the Borrower or
any of its Controlled Group under Section 302(f) of ERISA.
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SECTION 8.1.8. Change in Control; Stockholders Letter. Any Change in
Control shall occur or there is a breach of the Stockholders Letter of
Understanding.
SECTION 8.1.9. Bankruptcy, Insolvency, etc. The Borrower or any of
its Subsidiaries or any other Obligor shall
(a) generally fail to pay debts as they become due, or admit
in writing its inability to pay debts as they become due;
(b) apply for, consent to, or acquiesce in, the appointment
of a trustee, receiver, sequestrator, or other custodian for the
Borrower or any of its Subsidiaries or any other Obligor or any
property of any thereof, or make a general assignment for the benefit
of creditors;
(c) in the absence of such application, consent or
acquiescence, permit or suffer to exist the involuntary appointment of
a trustee, receiver, sequestrator or other custodian for the Borrower
or any of its Subsidiaries or any other Obligor or for a substantial
part of the property of any thereof, and such trustee, receiver,
sequestrator or other custodian shall not be discharged within thirty
days;
(d) permit or suffer to exist the involuntary commencement
of, or voluntarily commence, any bankruptcy, reorganization, debt
arrangement, or other case or proceeding under any bankruptcy or
insolvency laws, or permit or suffer to exist the involuntary
commencement of, or voluntarily commence, any dissolution, winding up
or liquidation proceeding, in each case, by or against the Borrower or
any of its Subsidiaries or any other Obligor, provided that if not
commenced by the Borrower or such Subsidiary or any other Obligor such
proceeding shall be consented to or acquiesced in by the Borrower or
such Subsidiary or any other Obligor, or shall result in the entry of
an order for relief or shall remain for thirty days undismissed; or
(e) take any corporate action authorizing, or in furtherance
of, any of the foregoing.
SECTION 8.1.10. Impairment of Security, etc. Without the consent of
the Lenders, any Loan Document, or any Lien granted thereunder, shall (except
in accordance with its terms), in whole or in part, terminate, cease to be
effective or cease to be the legally valid, binding and enforceable obligation
of the Borrower or any Obligor party thereto; the Borrower, any other Obligor
or any other party shall, directly or indirectly, contest in any manner such
effectiveness, validity, binding nature or enforceability; or any Lien securing
any Obligation shall, in
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whole or in part, cease to be a perfected first registered priority Lien.
SECTION 8.1.11. Beverage Licenses. The Borrower and each other
Subsidiary of the Parent which owns or operates convenience stores shall fail
at any time to have in full force and effect Beverage Licenses necessary to
permit, at 75% or more of the convenience stores owned or operated by the
Borrower and such Subsidiaries which sold and distributed alcoholic beverages
as of the Effective Date (exclusive of convenience stores sold by the Borrower
or any such Subsidiary) and, if acquired or opened after the Effective Date,
which sold and distributed alcoholic beverages on the date of such acquisition
or opening, the sale and distribution of the alcoholic beverages so sold or
distributed on such respective dates.
SECTION 8.2. Action if Bankruptcy. If any Event of Default described
in clauses (b) through (d) of Section 8.1.9 shall occur, the Commitments (if
not theretofore terminated) shall automatically terminate and the outstanding
principal amount of all outstanding Loans and all other Obligations shall
automatically be and become immediately due and payable, without notice or
demand.
SECTION 8.3. Action if Other Event of Default. If any Event of
Default (other than any Event of Default described in clauses (b) through (d)
of Section 8.1.9) shall occur for any reason, whether voluntary or involuntary,
and be continuing, the Agent, upon the direction of the Required Lenders, shall
by notice to the Borrower declare all or any portion of the outstanding
principal amount of the Loans and other Obligations to be due and payable
and/or the Commitments (if not theretofore terminated) to be terminated,
whereupon the full unpaid amount of such Loans and other Obligations which
shall be so declared due and payable shall be and become immediately due and
payable, without further notice, demand or presentment, and/or, as the case may
be, the Commitments shall terminate.
ARTICLE IX
GUARANTY
SECTION 9.1. The Guaranty. The Parent hereby unconditionally and
irrevocably guarantees the full and prompt payment when due, whether at stated
maturity, by acceleration or otherwise (including all amounts which would have
become due but for the operation of the automatic stay under Section 362(a) of
the Federal Bankruptcy Code, 11 U.S.C. 362(a), and the operation of Sections
502(b) and 506(b) of the United States Bankruptcy Code, 11 U.S.C. Section
502(b) and Section 506(b)), of the following (collectively, the "Guaranteed
Obligations"),
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(a) all Obligations of the Borrower and each other Obligor to
the Agent and each of the Lenders now or hereafter existing under this
Agreement and each other Loan Document, whether for principal,
interest, fees, expenses or otherwise; and
(b) all other Obligations to the Agent and each of the
Lenders now or hereafter existing under any of the Loan Documents,
whether for principal, interest, fees, expenses or otherwise.
The obligations of the Parent under this Article IX constitute a guaranty of
payment when due and not of collection, and the Parent specifically agrees that
it shall not be necessary or required that the Agent, any Lender or any holder
of any Note exercise any right, assert any claim or demand or enforce any
remedy whatsoever against the Borrower or any other Obligor (or any other
Person) before or as a condition to the obligations of the Parent under this
Article IX.
SECTION 9.2. Guaranty Unconditional. The obligations of the Parent
under this Article IX amend and restate the Parent's guaranty under the
Existing Credit Agreement and shall be construed as a continuing, absolute,
unconditional and irrevocable guaranty of payment and shall remain in full
force and effect until all the Guaranteed Obligations have been indefeasibly
paid in full in cash and all Commitments shall have permanently terminated.
The Parent guarantees that the Guaranteed Obligations will be paid strictly in
accordance with the terms of the agreement, instrument or document under which
they arise, regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of the
Agent or any of the Lenders with respect thereto. The liability of the Parent
hereunder shall be absolute and unconditional irrespective of:
(a) any lack of validity, legality or enforceability of this
Agreement, the Notes, any Rate Protection Agreement with a Lender or
any other Loan Document or any other agreement or instrument relating
to any thereof;
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Guaranteed Obligations, or any
compromise, renewal, extension, acceleration or release with respect
thereto, or any other amendment or waiver of or any consent to
departure from this Agreement, the Notes, any Rate Protection
Agreement with a Lender or any other Loan Document;
(c) any addition, exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of
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or consent to departure from any other guaranty, for all or any of the
Guaranteed Obligations;
(d) the failure of the Agent or any Lender
(i) to assert any claim or demand or to enforce any
right or remedy against the Borrower, any other Obligor or any
other Person (including any other guarantor) under the
provisions of this Agreement, any Note, any Rate Protection
Agreement with a Lender or any other Loan Document or
otherwise, or
(ii) to exercise any right or remedy against any
other guarantor of, or collateral securing, any of the
Guaranteed Obligations;
(e) any amendment to, rescission, waiver, or other
modification of, or any consent to departure from, any of the terms of
this Agreement, any Note, any Rate Protection Agreement with a Lender
or any other Loan Document;
(f) any defense, set-off or counter-claim which may at any
time be available to or be asserted by the Borrower or any other
Obligor against the Agent or any Lender;
(g) any reduction, limitation, impairment or termination of
the Guaranteed Obligations for any reason, including any claim of
waiver, release, surrender, alteration or compromise, and shall not be
subject to (and the Parent hereby waives any right to or claim of) any
defense or setoff, counterclaim, recoupment or termination whatsoever
by reason of the invalidity, illegality, nongenuineness, irregularity,
compromise, unenforceability of, or any other event or occurrence
affecting, the Guaranteed Obligations or otherwise; or
(h) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of, the
Borrower, any other Obligor or any surety or guarantor.
SECTION 9.3. Reinstatement in Certain Circumstances. If at any time
any payment in whole or in part of any of the Guaranteed Obligations is
rescinded or must be otherwise restored or returned upon the insolvency,
bankruptcy or reorganization of the Borrower, any other Obligor or otherwise,
the Parent's obligations under this Article IX with respect to such payment
shall be reinstated as though such payment had been due but not made at such
time.
SECTION 9.4. Waiver by the Parent. The Parent irrevocably waives
promptness, diligence, notice of acceptance hereof,
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presentment, demand, protest and any other notice with respect to any of the
Guaranteed Obligations, as well as any requirement that at any time any action
be taken by any Person against the Borrower or any other Person.
SECTION 9.5. Postponement of Subrogation, etc. The Parent will not
exercise any rights which it may acquire by way of rights of subrogation by any
payment made hereunder or otherwise, until the prior payment, in full and in
cash, of all Guaranteed Obligations. Any amount paid to the Parent on account
of any such subrogation rights prior to the payment in full of all Guaranteed
Obligations shall be held in trust for the benefit of the Lenders and each
holder of a Note and shall immediately be paid to the Agent and credited and
applied against the Guaranteed Obligations, whether matured or unmatured, in
accordance with the terms of this Agreement; provided, however, that if
(a) the Parent has made payment to the Lenders and each
holder of a Note of all or any part of the Guaranteed Obligations, and
(b) all Guaranteed Obligations have been paid in full and all
Commitments have been permanently terminated,
each Lender and each holder of a Note agrees that, at the Parent's request, the
Agent, on behalf of the Lenders and the holders of the Notes, will execute and
deliver to the Parent appropriate documents (without recourse and without
representation or warranty) necessary to evidence the transfer by subrogation
to the Parent of an interest in the Guaranteed Obligations resulting from such
payment by the Parent. In furtherance of the foregoing, for so long as any
Guaranteed Obligations or Commitments remain outstanding, the Parent shall
refrain from taking any action or commencing any proceeding against the
Borrower (or its successors or assigns, whether in connection with a bankruptcy
proceeding or otherwise) to recover any amounts in the respect of payments to
any Lender or any holder of a Note.
SECTION 9.6. Stay of Acceleration. If acceleration of the time for
payment of any amount payable by the Borrower under this Agreement or any Note
is stayed upon the occurrence of any event referred to in Section 8.1.9 with
respect to the Borrower, all such amounts otherwise subject to acceleration
under the terms of this Agreement shall nonetheless be payable by the Parent
hereunder forthwith.
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ARTICLE X
THE AGENT
SECTION 10.1. Actions. Each Lender hereby appoints SG as Agent under
and for purposes of this Agreement, the Notes and each other Loan Document.
Each Lender authorizes the Agent to act on behalf of such Lender under this
Agreement, the Notes and each other Loan Document and, in the absence of other
written instructions from the Required Lenders received from time to time by
the Agent (with respect to which the Agent agrees that it will comply, except
as otherwise provided in this Section or as otherwise advised by counsel), to
exercise such powers hereunder and thereunder as are specifically delegated to
or required of the Agent by the terms hereof and thereof, together with such
powers as may be reasonably incidental thereto. Without limiting the effect of
the preceding sentences of this Section 10.1, each Lender authorizes the Agent
to act as collateral agent and to hold and accept title to all liens and
security interests granted to the Agent by the Borrower, the Parent or any
other Obligor for the ratable benefit of the Agent and the Lenders, in order to
exercise remedies on behalf of the Lenders in connection with the enforcement
of such liens and security interests in accordance with the provisions of the
Loan Documents. Each Lender hereby indemnifies (which indemnity shall survive
any termination of this Agreement) the Agent, pro rata according to such
Lender's Percentage, from and against any and all liabilities, obligations,
losses, damages, claims, costs or expenses of any kind or nature whatsoever
which may at any time be imposed on, incurred by, or asserted against, the
Agent in any way relating to or arising out of this Agreement, the Notes and
any other Loan Document, including reasonable attorneys' fees, and as to which
the Agent is not reimbursed by the Borrower; provided, however, that no Lender
shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, claims, costs or expenses which are determined by
a court of competent jurisdiction in a final proceeding to have resulted solely
from the negligence or wilful misconduct of the Agent. The Agent shall not be
required to take any action hereunder, under the Notes or under any other Loan
Document, or to prosecute or defend any suit in respect of this Agreement, the
Notes or any other Loan Document, unless it is indemnified hereunder to its
satisfaction. If any indemnity in favor of the Agent shall be or become, in
the determination of the Agent, inadequate, the Agent may call for additional
indemnification from the Lenders and cease to do the acts indemnified against
hereunder until such additional indemnity is given; provided, however, that no
Lender shall be required to indemnify the Agent, with respect to any
obligation, loss, damage, claim, cost or expense for which the Agent would be
entitled to indemnification hereunder, in an amount which would be greater than
such Lender's Percentage of the aggregate amount of such obligation, loss,
damage, claim, cost or expense.
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SECTION 10.2. Funding Reliance, etc. Unless the Agent shall have
been notified by telephone, confirmed in writing, by any Lender by 5:00 p.m.
(New York City time), on the day prior to a Borrowing that such Lender will not
make available the amount which would constitute its Percentage of such
Borrowing on the date specified therefor, the Agent may assume that such Lender
has made such amount available to the Agent and, in reliance upon such
assumption, make available to the Borrower a corresponding amount. If and to
the extent that such Lender shall not have made such amount available to the
Agent, such Lender and the Borrower severally agree to repay the Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date the Agent made such amount available to the Borrower
to the date such amount is repaid to the Agent, in the case of the Borrower, at
the interest rate applicable at the time to Loans comprising such Borrowing
and, in the case of such Lender, for the period from the date such funds were
advanced to the Borrower to (and including) three days thereafter, at the
Federal Funds Rate and, following such third day, at the interest rate
applicable at the time to Loans comprising such Borrowing.
SECTION 10.3. Exculpation. Neither the Agent nor any of its
directors, officers, employees or agents shall be liable to any Lender for any
action taken or omitted to be taken by it under this Agreement or any other
Loan Document, or in connection herewith or therewith, except for its own
wilful misconduct or negligence, nor responsible for any recitals or warranties
herein or therein, nor for the effectiveness, enforceability, validity or due
execution of this Agreement or any other Loan Document, nor for the creation,
perfection or priority of any Liens purported to be created by any of the Loan
Documents, or the validity, genuineness, enforceability, existence, value or
sufficiency of any collateral security, nor to make any inquiry respecting the
performance by the Borrower of its obligations hereunder or under any other
Loan Document. Any such inquiry which may be made by the Agent shall not
obligate it to make any further inquiry or to take any action. The Agent shall
be entitled to rely upon advice of counsel concerning legal matters and upon
any notice, consent, certificate, statement or writing which the Agent believes
to be genuine and to have been presented by a proper Person.
SECTION 10.4. Successor. The Agent may resign as such at any time
upon at least 30 days' prior notice to the Borrower and all Lenders. If no
successor Agent shall have been appointed by the Required Lenders, and shall
have accepted such appointment, within 30 days after the retiring Agent's
giving notice of resignation, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent, which shall be one of the Lenders or a
commercial banking institution organized under the laws of the U.S. (or any
State thereof) or a U.S. branch or agency of a commercial banking institution,
and having a combined
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capital and surplus of at least $500,000,000. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
be entitled to receive from the retiring Agent such documents of transfer and
assignment as such successor Agent may reasonably request, and shall thereupon
succeed to and become vested with all rights, powers, privileges and duties of
the retiring Agent, and the retiring Agent shall be discharged from its duties
and obligations under this Agreement. After any retiring Agent's resignation
hereunder as the Agent, the provisions of
(a) this Article X shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was the Agent
under this Agreement; and
(b) Section 11.3 and Section 11.4 shall continue to inure to
its benefit.
SECTION 10.5. Credit Extensions by SG. SG shall have the same rights
and powers with respect to (x) the Loans made by it or any of its Affiliates,
and (y) the Notes held by it or any of its Affiliates as any other Lender and
may exercise the same as if it were not the Agent. SG and each of its
Affiliates may accept deposits from, lend money to, and generally engage in any
kind of business with the Borrower or any Subsidiary or Affiliate of the
Borrower as if it were not the Agent hereunder.
SECTION 10.6. Credit Decisions. Each Lender acknowledges that it
has, independently of the Agent and each other Lender, and based on such
Lender's review of the financial information of the Borrower, this Agreement,
the other Loan Documents (the terms and provisions of which being satisfactory
to such Lender) and such other documents, information and investigations as
such Lender has deemed appropriate, made its own credit decision to extend its
Commitments. Each Lender also acknowledges that it will, independently of the
Agent and each other Lender, and based on such other documents, information and
investigations as it shall deem appropriate at any time, continue to make its
own credit decisions as to exercising or not exercising from time to time any
rights and privileges available to it under this Agreement or any other Loan
Document.
SECTION 10.7. Loan Documents, etc. Each Lender hereby authorizes the
Agent to enter into the applicable Loan Documents and to take all action
contemplated thereby. Each Lender agrees that no Lender shall have any right
individually to seek to realize upon the security granted by any Loan Document,
it being understood and agreed that such rights and remedies may be exercised
solely by the Agent for the benefit of the Lenders and the Agent upon the terms
of the Loan Documents. The Agent shall determine (after consultation with the
Required Lenders (provided that, in the case there are only two Lenders at the
time of such
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determination, such consultation will be with each such Lender)) the manner in
which proceeds of Collateral will be applied to the Obligations (after the
payment of fees and expenses as set forth in the Loan Documents).
SECTION 10.8. Copies, etc. The Agent shall give prompt notice to
each Lender of each notice or request given to the Agent by the Borrower or the
Parent and required to be delivered to the Lenders pursuant to the terms of
this Agreement (unless concurrently delivered to the Lenders by the Borrower or
the Parent). The Agent will promptly distribute to each Lender each document
or instrument received for its account and copies of all other communications
received by the Agent from the Borrower for distribution to the Lenders by the
Agent in accordance with the terms of this Agreement.
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.1. Waivers, Amendments, etc. The provisions of this
Agreement and of each other Loan Document may from time to time be amended,
modified or waived, if such amendment, modification or waiver is in writing and
consented to by the Borrower and the Agent (acting only at the direction or
with the authority of the Required Lenders); provided, however, that no such
amendment, modification or waiver which would:
(a) modify any requirement hereunder that any particular
action be taken by all the Lenders or by the Required Lenders shall be
effective unless consented to by each Lender;
(b) modify this Section 11.1, change the definition of
"Required Lenders", increase the Commitment Amount or the Percentage
of any Lender, reduce any fees described in Article III, change the
time for payment of fees to the Lenders described in Article III, or
release all or any substantial part of the collateral security, except
as otherwise specifically provided in any Loan Document, shall be made
without the consent of each Lender affected thereby;
(c) extend the due date for, or reduce the amount of, any
scheduled repayment under Section 3.1.2(b) of principal of, or
interest on, any Loan or Reimbursement Obligation (or reduce the
principal amount of or rate of interest on any Loan or Reimbursement
Obligation) or extend any Commitment Termination Date without the
consent of the holder of that Note evidencing such Loan;
(d) increase the Stated Amount of any Letter of Credit unless
consented to by each Issuer; or
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(e) affect adversely the interests, rights or obligations of
the Agent in its capacity as Agent or the Issuer in its capacity as
Issuer, without the consent of the Agent or the Issuer, as the case
may be.
No failure or delay on the part of the Agent, any Lender or the holder of any
Note in exercising any power or right under this Agreement or any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power or right preclude any other or further exercise
thereof or the exercise of any other power or right. No notice to or demand on
the Borrower in any case shall entitle it to any notice or demand in similar or
other circumstances. No waiver or approval by the Agent, any Lender or the
holder of any Note under this Agreement or any other Loan Document shall,
except as may be otherwise stated in such waiver or approval, be applicable to
subsequent transactions. No waiver or approval hereunder shall require any
similar or dissimilar waiver or approval thereafter to be granted hereunder.
The remedies provided in this Agreement are cumulative, and not exclusive of
remedies provided by law.
SECTION 11.2. Notices. All notices and other communications provided
to any party hereto under this Agreement or any other Loan Document shall be in
writing and addressed, delivered or transmitted to such party at its address or
telecopy number set forth on Schedule IV hereto (or set forth in a Lender
Assignment Agreement) or at such other address or telecopy number as may be
designated by such party in a notice to the other parties given in accordance
with this Section. Any notice, if mailed and properly addressed and sent
return receipt requested with postage prepaid, shall be deemed given three
Business Days after posting; any notice, if sent by prepaid overnight express
shall be deemed delivered on the next Business Day; any notice, if transmitted
by telecopy, shall be deemed given when sent, with confirmation of receipt; any
notice, if transmitted by hand, shall be deemed received when delivered.
SECTION 11.3. Payment of Costs and Expenses. The Borrower and the
Parent jointly and severally agree to pay on demand all reasonable expenses of
the Agent (including the reasonable fees and out-of-pocket expenses of counsel
to the Agent, including any legal counsel and consultants, if any, who may be
retained in connection with the transactions contemplated hereby by the Agent)
in connection with
(a) the negotiation, preparation, execution and delivery of
this Agreement and of each other Loan Document, including schedules
and exhibits, and any amendments, waivers, consents, supplements or
other modifications to this Agreement or any other Loan Document as
may from time to time hereafter be required, and the Lenders' and the
Agent's consideration of their rights and remedies hereunder
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or in connection herewith from time to time whether or not the
transactions contemplated hereby or thereby are consummated;
(b) the filing, recording, refiling or rerecording of the
Pledge Agreements, the Security Agreements (and any supplements
thereto) and any other security instruments executed in connection
with the transactions contemplated hereby and/or U.C.C. financing
statements relating thereto and all amendments, supplements and
modifications to any thereof and any and all other documents or
instruments of further assurance required to be filed or recorded or
refiled or rerecorded by the terms hereof or of the Pledge Agreements
or the Security Agreements or such other documents; and
(c) the preparation and review of the form of any document or
instrument relevant to this Agreement or any other Loan Document.
The Borrower and the Parent jointly and severally further agree to pay, and to
save the Agent and the Lenders harmless from all liability for, any stamp or
other taxes which may be payable in connection with the execution or delivery
of this Agreement, the borrowings hereunder, or the issuance of the Notes or
any other Loan Documents. The Borrower and the Parent jointly and severally
also agree to reimburse the Agent and each Lender upon demand for all
reasonable out- of-pocket expenses (including attorneys' fees and legal
expenses, including allocated fees and expenses of internal counsel) incurred
by the Agent or such Lender in connection with (x) the negotiation of any
restructuring or "work-out", whether or not consummated, of any Obligations and
(y) the enforcement of any Obligations (including the Obligations of the Parent
under Article IX). The Borrower and the Parent jointly and severally also
agree to reimburse the Agent on demand for all administration, audit and
monitoring expenses incurred in connection with the Borrowing Base and
determinations in respect thereof. The Borrower and the Parent jointly and
severally further agree to reimburse the Agent on demand for all other
administration, audit and monitoring expenses incurred after the occurrence of
an Event of Default in connection with this Agreement and the other Loan
Documents.
SECTION 11.4. Indemnification. In consideration of the execution and
delivery of this Agreement by each Lender and the extension of the Commitments,
the Borrower and the Parent jointly and severally hereby indemnify, exonerate
and hold the Agent and each Lender and each of their respective officers,
directors, employees and agents (collectively, the "Indemnified Parties") free
and harmless from and against any and all actions, causes of action, suits,
losses, costs, liabilities and damages, and expenses incurred in connection
therewith (irrespective of
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whether any such Indemnified Party is a party to the action for which
indemnification hereunder is sought), including reasonable attorneys' fees and
disbursements (including allocated fees and expenses of internal counsel)
(collectively, the "Indemnified Liabilities"), incurred by the Indemnified
Parties or any of them as a result of, or arising out of, or relating to
(a) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of any Loan or with
any Letter of Credit;
(b) the entering into and performance of this Agreement and
any other Loan Document by any of the Indemnified Parties (including
any action brought by or on behalf of the Borrower as the result of
any determination by the Required Lenders pursuant to Article V not to
fund any Borrowing);
(c) any investigation, litigation or proceeding related to
any acquisition or proposed acquisition by the Borrower, the Parent or
any of their respective Subsidiaries of all or any portion of the
stock or assets of any Person, whether or not the Agent or such Lender
is party thereto;
(d) any investigation, litigation or proceeding related to
any environmental cleanup, audit, compliance or other matter relating
to the protection of the environment or the Release by the Borrower,
the Parent or any of their respective Subsidiaries of any Hazardous
Material;
(e) the presence on or under, or the escape, seepage,
leakage, spillage, discharge, emission, discharging or releases from,
any real property owned or operated by the Borrower, the Parent or any
of their respective Subsidiaries of any Hazardous Material (including,
without limitation, any losses, liabilities, damages, injuries, costs,
expenses or claims asserted or arising under any Environmental Law,
the costs of defending and or counterclaiming or claiming over against
third parties in respect of any action or matter, and any cost,
liability or damage arising out of a settlement of any action entered
into by the Agent), regardless of whether caused by, or within the
control of, the Borrower, the Parent or any such Subsidiary;
(f) Environmental Laws relating to the Borrower, the Parent
or any of their respective Subsidiaries, including the assertion of
any lien thereunder;
(g) any order, consent, decree, settlement, judgement or
verdict arising from the deposit, storage, disposal, burial, dumping,
injection, spilling, leaking, or other placement or release in, on or
from the Realty of any
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Hazardous Material (including without limitation any order under the
Environmental Laws to clean-up or decommission), whether or not such
deposit, storage, disposal, burial, dumping, injecting, spillage,
leaking or other placement or release in, on or from the Realty of any
Hazardous Material:
(i) results by, through or under the Borrower, the
Parent or any of their respective Subsidiaries; or
(ii) occurred with the knowledge and consent of the
Borrower, the Parent or any of their respective Subsidiaries;
or
(iii) occurred before or after the Effective Date,
whether with or without the knowledge of the Borrower, the
Parent or any of their respective Subsidiaries; or
(h) the failure to maintain insurance coverage required by
Section 7.1.4;
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's
gross negligence or wilful misconduct. If and to the extent that the foregoing
undertaking may be unenforceable for any reason, the Borrower and the Parent
each hereby agrees to make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law.
SECTION 11.5. Survival. The obligations of the Borrower under
Sections 4.3, 4.4, 4.5, 4.6, 11.3 and 11.4, and the obligations of the Lenders
under Section 10.1, shall in each case survive any termination of this
Agreement, the payment in full of all the Obligations and the termination of
all the Commitments. The representations and warranties made by each Obligor
in this Agreement and in each other Loan Document shall survive the execution
and delivery of this Agreement and each such other Loan Document.
SECTION 11.6. Severability. Any provision of this Agreement or any
other Loan Document which is prohibited or unenforceable in any jurisdiction
shall, as to such provision and such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or such Loan Document or affecting the validity or
enforceability of such provision in any other jurisdiction.
SECTION 11.7. Headings. The various headings of this Agreement and
of each other Loan Document are inserted for convenience only and shall not
affect the meaning or
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interpretation of this Agreement or such other Loan Document or any provisions
hereof or thereof.
SECTION 11.8. Execution in Counterparts. This Agreement may be
executed by the parties hereto in several counterparts, each of which shall be
an original and all of which shall constitute together but one and the same
agreement.
SECTION 11.9. Governing Law; Entire Agreement. THIS AGREEMENT AND
THE NOTES SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK. This Agreement, the Notes and the other Loan
Documents constitute the entire understanding among the parties hereto with
respect to the subject matter hereof and supersede any prior agreements,
written or oral, with respect thereto.
SECTION 11.10. Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns; provided, however, that:
(a) neither the Borrower nor the Parent may assign or
transfer its rights or obligations hereunder without the prior written
consent of the Agent and all Lenders; and
(b) the rights of sale, assignment and transfer of the
Lenders are subject to Section 11.11.
SECTION 11.11. Sale and Transfer of Loans and Notes; Participations
in Loans and Notes. Each Lender may assign, or sell participations in, its
Loans and Commitments to one or more other Persons in accordance with this
Section 11.11.
SECTION 11.11.1. Assignments. (a) Any Lender, upon notice to the
Borrower and with the written consent of the Agent (which consent shall not be
unreasonably withheld or delayed), may at any time assign and delegate all or
any fraction of such Lender's Loans, Commitments and Letter of Credit
participations to one or more commercial banks or other financial institutions
(each Person described in either of the foregoing clauses as the Person to whom
such assignment and delegation is to be made being hereinafter referred to as
an "Assignee Lender"), all or any fraction of such Lender's total Loans,
Commitments and Letter of Credit participations (which assignment and
delegation shall be of a constant, and not a varying, percentage of all the
assigning Lender's Loans and Commitments) in a minimum aggregate amount of
$5,000,000 (or, if less, the total of such Lender's Commitment Amount);
provided, however, that the Borrower, each other Obligor and the Agent shall be
entitled to continue to deal solely and directly with such Lender in connection
with the interests so assigned and delegated to an Assignee Lender until
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(i) written notice of such assignment and delegation,
together with payment instructions, addresses and related information
with respect to such Assignee Lender, shall have been given to the
Borrower and the Agent by such Lender and such Assignee Lender;
(ii) such Assignee Lender shall have executed and delivered
to the Borrower and the Agent a Lender Assignment Agreement, accepted
by the Agent; and
(iii) the processing fees described below shall have been
paid.
From and after the date that the Agent accepts such Lender Assignment
Agreement, (x) the Assignee Lender thereunder shall be deemed automatically to
have become a party hereto and to the extent that rights and obligations
hereunder have been assigned and delegated to such Assignee Lender in
connection with such Lender Assignment Agreement, shall have the rights and
obligations of a Lender hereunder and under the other Loan Documents, and (y)
the assignor Lender, to the extent that rights and obligations hereunder have
been assigned and delegated by it in connection with such Lender Assignment
Agreement, shall be released from its obligations hereunder and under the other
Loan Documents. Within five Business Days after its receipt of notice that the
Agent has received an executed Lender Assignment Agreement, the Borrower shall
execute and deliver to the Agent (for delivery to the relevant Assignee Lender)
new Notes evidencing such Assignee Lender's assigned Loans and Commitments and,
if the assignor Lender has retained Loans and Commitments hereunder,
replacement Notes in the principal amount of the Loans and Commitments retained
by the assignor Lender hereunder (such Notes to be in exchange for, but not in
payment of, those Notes then held by such assignor Lender). Each such Note
shall be dated the date of the predecessor Notes. The assignor Lender shall
xxxx the predecessor Notes "exchanged" and deliver them to the Borrower.
Accrued interest on that part of the predecessor Notes evidenced by the new
Notes, and accrued fees, shall be paid as provided in the Lender Assignment
Agreement. Accrued interest on that part of the predecessor Notes evidenced by
the replacement Notes shall be paid to the assignor Lender. Accrued interest
and accrued fees shall be paid at the same time or times provided in the
predecessor Notes and in this Agreement. Such assignor Lender or such Assignee
Lender must also pay a processing fee to the Agent upon delivery of any Lender
Assignment Agreement in the amount of $3,000. Any attempted assignment and
delegation not made in accordance with this Section 11.11.1 shall be null and
void.
(b) Notwithstanding clause (a), any Lender may assign and pledge all
or any portion of its Loans and Notes and other rights to a Federal Reserve
Bank as collateral security; provided,
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however, that no such assignment under this clause (b) shall release the
assignor Lender from any of its obligations hereunder.
SECTION 11.11.2. Participations. (a) Any Lender may at any time
without the consent of the Borrower or the Agent (but with prior written notice
to the Borrower and the Agent) sell to one or more commercial banks or other
Persons (each of such commercial banks and other Persons being herein called a
"Participant") participating interests in any of the Loans, Commitments, or
other interests of such Lender hereunder; provided, however, that
(i) no participation contemplated in this Section 11.11.2
shall relieve such Lender from its Commitments or its other
obligations hereunder or under any other Loan Document;
(ii) such Lender shall remain solely responsible for the
performance of its Commitments and such other obligations;
(iii) the Borrower and each other Obligor and the Agent shall
continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this Agreement and
each of the other Loan Documents;
(iv) no Participant, unless such Participant is an Affiliate
of such Lender, or is itself a Lender, shall be entitled to require
such Lender to take or refrain from taking any action hereunder or
under any other Loan Document, except that such Lender may agree with
any Participant that such Lender will not, without such Participant's
consent, take any actions of the type described in clause (b) or (c)
of Section 11.1; and
(v) the Borrower shall not be required to pay any amount
under clause (b) of this Section that is greater than the amount which
it would have been required to pay had no participating interest been
sold.
(b) The Borrower acknowledges and agrees that each Participant, for
purposes of Sections 4.3, 4.4, 4.5, 4.6, 11.3 and 11.4, shall be considered a
Lender, subject to clause (v) above.
SECTION 11.11.3. Certain Other Provisions. (a) The Borrower and the
Parent authorize each Lender to disclose to any participant or assignee (each,
a "Transferee") and any prospective Transferee, subject to the agreement of
such Transferee or prospective Transferee to comply with Section 11.14
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hereof, any and all financial and other information in such Lender's possession
concerning the Borrower, the Parent or any of their respective Subsidiaries
which has been delivered to such Lender by any such Person pursuant to or in
connection with this Agreement or which has been delivered to such Lender by
any such Person in connection with such Lender's credit evaluation of the
Borrower, the Parent or any of their respective Subsidiaries prior to entering
into this Agreement.
(b) If, pursuant to this Section, any interest in this Agreement or
any Loan or Note is transferred to any Transferee which is organized under the
laws of any jurisdiction other than the United States or any State thereof, the
transferor Lender shall cause such Transferee (other than any Participant), and
may cause any Participant, concurrently with the effectiveness of such
transfer, (i) to represent to the transferor Lender (for the benefit of the
transferor Lender, the Agent and the Borrower) that under applicable law and
treaties, no taxes will be required to be withheld by the Agent, the Borrower
or the transferor Lender with respect to any payments to be made to such
Transferee in respect of the Loans, (ii) to furnish to the transferor Lender,
the Agent and the Borrower either U.S. Internal Revenue Service Form 4224 or
U.S. Internal Revenue Service Form 1001 (wherein such Transferee claims
entitlement to whole or partial exemption from U.S. Federal withholding tax on
all interest payments hereunder) and (iii) to agree (for the benefit of the
transferor Lender, the Agent and the Borrower) to provide the transferor
Lender, the Agent and the Borrower a new Form 4224 or Form 1001 upon the
obsolescence of any previously delivered form and comparable statements in
accordance with applicable U.S. laws and regulations and amendments duly
executed and completed by such Transferee, and to comply from time to time with
all applicable U.S. laws and regulations with regard to such withholding tax
exemption.
SECTION 11.12. Other Transactions. Nothing contained herein shall
preclude either the Agent or any other Lender from engaging in any transaction,
in addition to those contemplated by this Agreement or any other Loan Document,
with the Borrower, the Parent or any of their respective Affiliates in which
the Borrower, the Parent or such Affiliate is not restricted hereby from
engaging with any other Person.
SECTION 11.13. Certain Collateral and Other Matters. (a) The Agent
is authorized on behalf of all the Lenders, without the necessity of any notice
to or further consent from the Lenders, from time to time to take any action
with respect to any Collateral or the Loan Documents which may be necessary to
perfect and maintain perfected the security interest in and Liens upon the
Collateral granted pursuant to the Loan Documents.
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(b) The Lenders irrevocably authorize the Agent, at its option and in
its discretion, to release any security interest or Lien granted to or held by
the Agent upon any Collateral (i) upon termination of the Commitments and
Letters of Credit and payment in full in cash of all principal of and interest
on the Loans, all fees payable pursuant to Section 3.3 and 11.3, all
Reimbursement Obligations (including interest thereon) and all other fees,
costs and expenses that are payable under this Agreement or under any other
Loan Document and have been invoiced (in which case the Lenders hereby
authorize the Agent to execute, and the Agent agrees to execute, reasonable
releases in connection with this Agreement (other than, in any event, as to
items stated to survive the termination of this Agreement)); (ii) constituting
property sold or to be sold or disposed of as part of or in connection with any
disposition permitted hereunder; (iii) constituting property in which the
Borrower or any Subsidiary of the Borrower owned no interest at the time the
security interest and/or Lien was granted or at any time thereafter; (iv)
constituting property leased to the Borrower or any Subsidiary of the Borrower
under a lease which has expired or been terminated in a transaction permitted
under this Agreement or is about to expire and which has not been, and is not
intended by the Borrower or such Subsidiary to be, renewed or extended; (v)
consisting of an instrument evidencing Indebtedness or other debt instrument,
if the Indebtedness evidenced thereby has been paid in full; or (vi) if
approved, authorized or ratified in writing by the Required Lenders or, if
required by Section 11.1, each Lender. Upon request by the Agent at any time,
the Lenders will confirm in writing the Agent's authority to release particular
types or items of collateral pursuant to this Section.
SECTION 11.14. Confidential Information. The Agent and each Lender
agree to hold all non-public information (which has been identified as such by
the Borrower to the Agent and each Lender) obtained pursuant to this Agreement
and the other Loan Documents in accordance with its customary procedures for
handling confidential information, provided that disclosure of such
confidential information may be made (a) to the Affiliates, examiners,
directors, shareholders, accountants, auditors, counsel and other professional
advisors of the Agent and each Lender, (b) in connection with any assignment or
participation to an Assignee Lender or Participant, as the case may be, so long
as such Assignee Lender or Participant has previously agreed to these
confidentiality provisions, or (c) as required or requested by any governmental
agency, authority or representative, or pursuant to any court order, legal
process or applicable law, rule or regulation.
SECTION 11.15. Forum Selection and Consent to Jurisdiction. TO THE
FULLEST EXTENT PERMITTED UNDER APPLICABLE LAW, ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR
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ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN)
OR ACTIONS OF THE AGENT, THE LENDERS, THE BORROWER OR THE PARENT MAY BE BROUGHT
AND MAINTAINED IN XXX XXXXXX XX XXX XXXXX XX XXX XXXX; PROVIDED, HOWEVER, THAT
ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT THE AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH OF THE BORROWER AND THE PARENT
HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF
THE STATE OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE
AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN
CONNECTION WITH SUCH LITIGATION. EACH OF THE BORROWER AND THE PARENT FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. EACH
OF THE BORROWER AND THE PARENT HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER
MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH
COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE BORROWER OR THE PARENT HAS OR
HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OF FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, TO THE FULLEST EXTENT PERMITTED UNDER APPLICABLE LAW, EACH OF THE
BORROWER AND THE PARENT HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF
ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
SECTION 11.16. Waiver of Jury Trial, etc. THE AGENT, THE LENDERS,
THE BORROWER AND THE PARENT HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE LENDERS, THE
BORROWER OR THE PARENT. THE BORROWER AND THE PARENT ACKNOWLEDGE AND AGREE THAT
IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH
OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENT AND THE LENDERS ENTERING
INTO THIS AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT. IN NO EVENT SHALL ANY
LENDER OR THE AGENT BE LIABLE FOR ANY CONSEQUENTIAL DAMAGES WHICH MAY BE
ALLEGED IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 11.17. Re-Allocation of Loans, Letters of Credit Outstanding
and Commitments. All Loans, Letters of Credit and Commitments outstanding of
each Lender under the Existing Credit Agreement shall, from and after the
Effective Date, be assigned and re-allocated among the Loans, Letters of Credit
and Commitments provided for hereunder, so that after giving effect thereto,
the Percentages of all Lenders are as set forth on Schedule II hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized as of the
day and year first above written.
E-Z SERVE CONVENIENCE STORES, INC.
as Borrower
By: /s/ XXXX X. XXXXXX
-----------------------------------
Title: Senior Vice President
E-Z SERVE CORPORATION,
as Guarantor
By: /s/ XXXX X. XXXXXX
-----------------------------------
Title: Senior Vice President
SOCIETE GENERALE,
as Agent
By: /s/ XXXXXXXXX X. SCAILLIER-XXXXXXX
-----------------------------------
Title: Vice President
LENDERS
SOCIETE GENERALE
By: /s/ XXXXXXXXX X. SCAILLIER-XXXXXXX
-----------------------------------
Title: Vice President
BANK OF AMERICA TEXAS, N.A.
By: /s/ XXX XXXX
-----------------------------------
Title: Vice President
PREMIER BANK, N.A.
By: /s/ XXXX XXXXXXX
-----------------------------------
Title: Vice President
AMSOUTH BANK OF ALABAMA
By: /s/ XXXXXX X. XXXXXXXX
-----------------------------------
Title: Assistant Vice President
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ XXXXXX X. HEAD, JR.
-----------------------------------
Title: Vice President
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