EXHIBIT 10.19
EXECUTION COPY
AMENDED
REVOLVING CREDIT AGREEMENT
Dated as of January 14, 2004
by and among
ALON USA, LP
as Borrower
THE GUARANTOR COMPANIES
FROM TIME TO TIME PARTY HERETO
THE FINANCIAL INSTITUTIONS
FROM TIME TO TIME PARTY HERETO
and
ISRAEL DISCOUNT BANK OF NEW YORK,
as Agent
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS; CERTAIN TERMS............................................................................ 1
Section 1.01 Definitions............................................................................. 1
Section 1.02 Accounting and Other Terms.............................................................. 31
Section 1.03 Time References......................................................................... 31
ARTICLE II THE REVOLVING CREDIT LOANS........................................................................... 31
Section 2.01 Revolving Credit Commitments............................................................ 32
Section 2.02 Revolving Credit Loans.................................................................. 32
Section 2.03 Making the Revolving Credit Loans....................................................... 32
Section 2.04 Revolving Credit Notes; Repayment of Revolving Credit Loans............................. 32
Section 2.05 Funding and Settlement Procedures....................................................... 33
Section 2.06 Interest................................................................................ 35
Section 2.07 Reduction of Revolving Credit Commitment; Prepayment of Revolving Credit Loans.......... 35
Section 2.08 Fees.................................................................................... 38
Section 2.09 Eurodollar Rate Not Determinable; Illegality or Impropriety............................. 38
Section 2.10 Indemnity............................................................................... 39
Section 2.11 Continuation and Conversion of Revolving Credit Loans................................... 40
Section 2.12 Taxes................................................................................... 41
ARTICLE III LETTERS OF CREDIT................................................................................... 43
Section 3.01 Letters of Credit....................................................................... 43
Section 3.02 Participations.......................................................................... 46
Section 3.03 Issuance of Letters of Credit; Fees..................................................... 47
ARTICLE IV FEES, PAYMENTS AND OTHER COMPENSATION................................................................ 48
Section 4.01 Audit and Collateral Monitoring Fees.................................................... 48
Section 4.02 Payments; Computations and Statements................................................... 48
Section 4.03 Sharing of Payments, Etc................................................................ 50
Section 4.04 Apportionment of Payments............................................................... 50
Section 4.05 Increased Costs and Reduced Return...................................................... 50
ARTICLE V CONDITIONS OF EFFECTIVENESS, LETTER OF CREDIT ISSUANCE AND LENDING.................................... 52
Section 5.01 Conditions Precedent to Effectiveness................................................... 52
Section 5.02 Conditions Precedent to Revolving Credit Loans and Letters of Credit.................... 56
ARTICLE VI REPRESENTATIONS AND WARRANTIES....................................................................... 57
Section 6.01 Representations and Warranties.......................................................... 57
ARTICLE VII COVENANTS OF THE BORROWER........................................................................... 64
Section 7.01 Affirmative Covenants................................................................... 64
Section 7.02 Negative Covenants...................................................................... 75
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TABLE OF CONTENTS
(continued)
ARTICLE VIII MANAGEMENT, COLLECTION AND STATUS OF ACCOUNTS RECEIVABLE AND OTHER COLLATERAL...................... 96
Section 8.01 Management of Collateral................................................................ 96
Section 8.02 Accounts Receivable Documentation....................................................... 98
Section 8.03 Status of Accounts Receivable and Other Collateral...................................... 98
Section 8.04 Collateral Custodian.................................................................... 99
ARTICLE IX THE AGENT............................................................................................ 99
Section 9.01 Authorization and Action................................................................ 99
Section 9.02 Borrower's Default...................................................................... 100
Section 9.03 Reliance, Etc........................................................................... 100
Section 9.04 IDB..................................................................................... 101
Section 9.05 Lender Credit Decision.................................................................. 101
Section 9.06 Indemnification......................................................................... 101
Section 9.07 Successor Agent......................................................................... 102
Section 9.08 Collateral Matters...................................................................... 102
ARTICLE X EVENTS OF DEFAULT..................................................................................... 104
Section 10.01 Events of Default....................................................................... 104
Section 10.02 Deposit for Letters of Credit...........................................................
ARTICLE XI GUARANTY............................................................................................. 108
Section 11.01 Guaranty................................................................................ 108
Section 11.02 Obligations Unconditional............................................................... 109
Section 11.03 Waivers................................................................................. 109
Section 11.04 Subrogation............................................................................. 110
Section 11.05 No Waiver; Remedies..................................................................... 110
Section 11.06 Stay of Acceleration.................................................................... 110
ARTICLE XII MISCELLANEOUS....................................................................................... 110
Section 12.01 Termination; Annual Review.............................................................. 110
Section 12.02 Notices, Etc............................................................................ 111
Section 12.03 Amendments, Etc......................................................................... 112
Section 12.04 No Waiver; Remedies, Etc................................................................ 113
Section 12.05 Expenses; Taxes; Attorneys' Fees........................................................ 113
Section 12.06 Right of Set Off........................................................................ 114
Section 12.07 Severability............................................................................ 115
Section 12.08 Assignments and Participations.......................................................... 115
Section 12.09 Counterparts............................................................................ 117
Section 12.10 Headings................................................................................ 117
Section 12.11 Governing Law........................................................................... 117
Section 12.12 Waiver of Jury Trial, Etc............................................................... 118
Section 12.13 Consent by the Agent, Lenders........................................................... 118
Section 12.14 No Party Deemed Drafter................................................................. 118
Section 12.15 Reinstatement; Certain Payments......................................................... 118
Section 12.16 Indemnification......................................................................... 119
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TABLE OF CONTENTS
(continued)
Section 12.17 Environmental Indemnification........................................................... 119
Section 12.18 Binding Effect.......................................................................... 120
Section 12.19 Interest................................................................................ 120
Section 12.20 No Oral Agreements...................................................................... 121
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TABLE OF CONTENTS
(continued)
SCHEDULE A Companies
SCHEDULE B Investors; Subordination Agreements; Investor Notes; Guaranties
SCHEDULE C Agent Account
SCHEDULE D Lenders and Lenders' Revolving Credit Commitments
SCHEDULE E Fiscal Year, Fiscal Month and Fiscal Quarter
SCHEDULE F License Agreements
SCHEDULE G Pipelines
SCHEDULE H Terminals
SCHEDULE I Stock Option Plan
SCHEDULE J SCS Real Estate Statements
SCHEDULE 5.01(e)(x) Mortgage Recording Offices
SCHEDULE 6.01(e) Inventory Locations
SCHEDULE 6.01(f) Subsidiaries
SCHEDULE 6.01(g) Litigation
SCHEDULE 6.01(j) ERISA
SCHEDULE 6.01(q) Title to Property; SCS Real Estate; Compliance
SCHEDULE 6.01(s) Operating Lease Obligations
SCHEDULE 6.01(w) Use of Proceeds
SCHEDULE 6.01(y) Trade names
SCHEDULE 6.01(aa) Material Contracts
SCHEDULE 6.01(gg) Bank Accounts; Existing Cash Management Agreements; Existing Credit Card Depository Account
Agreements
SCHEDULE 6.01(hh) Name; Jurisdiction of Organization; Organizational ID Number; FEIN
SCHEDULE 7.02(a)(ii) Liens
SCHEDULE 7.02(b)(iii) Indebtedness
SCHEDULE 7.02(b)(xiii) GTR Assets
SCHEDULE 7.02(c)(iii) Guaranties
SCHEDULE 7.02(f)(ii) Investments
SCHEDULE 7.02(g) Capitalized Lease Obligations
EXHIBIT A Form of Revolving Credit Notes
EXHIBIT B Form of Security Agreement
EXHIBIT C Form of Pledge Agreement
EXHIBIT D Form of Assignment and Acceptance
EXHIBIT E Form of Notice of Borrowing
EXHIBIT F Form of Intercompany Note
EXHIBIT G Form of Joinder Agreement
EXHIBIT H Form of Subordinated Investor Note
EXHIBIT I Form of Borrowing Base Certificate
EXHIBIT J Form of Letter of Credit Application
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AMENDED REVOLVING CREDIT AGREEMENT
AMENDED REVOLVING CREDIT AGREEMENT (this "Agreement"), dated as of January
14, 2004, by and among ALON USA, LP, f/k/a SWBU, L.P., a Texas limited
partnership (the "Borrower"), Alon USA Energy, Inc., a Delaware corporation (the
"Parent"), the direct and indirect subsidiaries of the Parent listed on Schedule
A hereto (such subsidiaries, together with the Borrower and the Parent, each a
"Company" and collectively the "Companies"), the financial institutions from
time to time party hereto (each a "Lender" and collectively, the "Lenders"), and
Israel Discount Bank of New York, as administrative agent for the Lenders (in
such capacity, the "Agent").
RECITALS
Pursuant to the original Revolving Loan Agreement dated as of July 31,
2000 (as amended prior to the date hereof, the "Existing Revolving Credit
Agreement"), by and among the Companies, the Lenders and the Agent, the Lenders
extended credit to the Borrower consisting of a revolving credit facility in an
aggregate principal amount not to exceed $130,000,000 at any time outstanding.
The Companies have asked the Lenders to amend the Existing Revolving Credit
Agreement in order to, among other things, (a) permit the Companies to enter
into a new term loan facility in the principal amount of $100,000,000 the
proceeds of which will be used (in part) to repay in full all obligations under
the Existing Term Loan Agreement (as hereinafter defined), (b) increase the size
of the Total Commitment (as defined below) to an aggregate principal amount not
in excess of $141,600,000 at any time outstanding, which may be utilized for
revolving credit loans and for letters of credit, and (c) amend certain other
provisions of the Existing Revolving Credit Agreement. The proceeds of the
revolving loans and letters of credit under this Agreement shall be used by the
Borrower (i) for working capital purposes of the Borrower and its subsidiaries,
(ii) to pay fees and expenses of the Borrower incurred in connection with this
Agreement, and (iii) for other purposes permitted herein. Accordingly, the
Companies, the Borrower, the Lenders and the Agent hereby agree that the
Existing Revolving Credit Agreement is amended as follows:
Article I
DEFINITIONS; CERTAIN TERMS
Section 1.01 Definitions. As used in this Agreement, the following terms
shall have the respective meanings indicated below, such meanings to be
applicable equally to both the singular and plural forms of such terms:
"Account" shall have the meaning assigned to it in Article 9 of the
Uniform Commercial Code in effect in the State of New York on the date hereof.
"Account Debtor" means each debtor, customer or obligor in any way
obligated on or in connection with any Account Receivable.
"Accounts Receivable" means any and all rights of a Person to payment for
goods sold or services rendered, including accounts, contract rights and general
intangibles arising out of or related to any Accounts and any and all such
rights evidenced by chattel paper, instruments or documents, whether due or to
become due and whether or not earned by performance, and whether now or
hereafter acquired or arising in the future and any proceeds arising therefrom
or relating thereto.
"Acquired Entity" has the meaning specified therefor in Section
7.02(f)(x).
"Action" has the meaning specified therefor in Section 12.13 hereof.
"Additional Assets" means assets to be used in a business which is either
conducted by Alon USA or any Subsidiary thereof or similar to a business
conducted by Alon USA or any Subsidiary thereof, wherever located, and shall
include Growth Assets to the extent that the aggregate consideration paid for
Growth Assets acquired pursuant to Section 7.02(f)(x) shall exceed $20,000,000.
"Affiliate" means, as to any Person, any other Person that directly or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, such Person. For purposes of this definition,
"control" of a Person means the power, directly or indirectly, either to (i)
vote 10% or more of the Capital Stock having ordinary voting power for the
election of directors (or other Persons performing a similar function) of such
Person or (ii) direct or cause the direction of the management and policies of
such Person whether by contract or otherwise. Anything to the contrary
notwithstanding, in no event shall the Agent, any Collateral Agent or any Lender
be deemed to be an Affiliate of any Loan Party.
"Agent" has the meaning specified therefor in the preamble hereto.
"Agent Account" means the account of the Agent set forth in Schedule C
hereto.
"Agent Advances" has the meaning specified therefor in Section 9.08
hereof.
"Agent's Fee" has the meaning specified therefor in Section 2.08(b)
hereof.
"Agreement" has the meaning specified therefor in the first paragraph
hereof.
"Alon Assets" means Alon Assets, Inc., a Delaware corporation.
"Alon Business Territory" means the States of Texas, Oklahoma, New Mexico,
Arizona, Arkansas, Louisiana, Colorado and Utah.
"Alon Capital" means Alon USA Capital, Inc., a Delaware corporation and a
Subsidiary of the Parent.
"Alon GP" means Alon USA GP, LLC, a Delaware limited liability company and
successor by conversion to Alon USA GP, Inc., a ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇.
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"▇▇▇▇ ▇▇▇▇▇▇" means Alon Israel Oil Company Ltd., a limited liability
company under the laws of the State of Israel and the parent company of the
Parent.
"Alon Limited Partner" means Alon USA Delaware, LLC, a Delaware limited
liability company.
"Alon Operating" means Alon USA Operating, Inc., a Delaware corporation
and a Subsidiary of the Parent.
"Alon Pipeline" means Alon USA Pipeline, Inc., a Delaware corporation.
"Alon Refining" means Alon USA Refining, Inc., a Delaware corporation.
"Alon SPV" means Alon USA Interests, LLC, a Texas limited liability
company and successor by merger to Alon USA Interests, LLC, a Delaware limited
liability company.
"Alon SWBU" means Alon USA, LP, a Texas limited partnership.
"Alon USA" means Alon USA, Inc., a Delaware corporation and a wholly-owned
Subsidiary of the Parent.
"APPL" means Alon Petroleum Pipe Line Company, f/k/a American Petrofina
Pipe Line Company, a Delaware corporation.
"Applicable Percentage" means, with respect to a Permitted Investment, the
percentage that IDB ordinarily advances against such Permitted Investment in
accordance with its customary lending practices.
"Asset Reinvestment Account" shall have the meaning specified therefor in
Section 2.07(d).
"Asset Swap" means an exchange of any Term Loan Facility First Lien
Collateral (as defined in the Intercreditor Agreement) or any SCS Assets and any
related cash (other than (a) any material component of the refinery assets of
Alon USA or any Subsidiary thereof, (b) any Inventory, and (c) any Account
Receivable), solely for other property, plant and equipment assets (and any
related cash) to be used in the applicable business of the Companies, with a
value of not less than the value of the assets exchanged. It is agreed that the
Companies may pay or receive cash as part of an Asset Swap to equalize the value
of the assets transferred and received; provided that such Asset Swap will (i)
to the extent of any cash received, be deemed for all purposes of this Agreement
to constitute a sale of assets and (ii) to the extent of any cash paid, be
deemed for all purposes of this Agreement to constitute a Permitted Acquisition
(to the extent such transaction satisfies all of the terms and conditions of
Section 7.02(f)(x)).
"Assignment and Acceptance" means an assignment and acceptance entered
into by an assigning Lender and an assignee and accepted by the Agent, in
accordance with Section 12.08 hereof and substantially in the form of Exhibit D
hereto.
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"Assignment of Claims Act" means the Assignment of Claims Act of 1940, as
amended from time to time, codified at 31 U.S.C. ss. 3727 and 41 U.S.C. ss. 15,
or any successor statute, and the rules and regulations promulgated thereunder.
"Availability" means, at any time, the difference between (i) the lesser
of (A) the Borrowing Base and (B) the Total Commitment and (ii) the sum of (A)
the aggregate outstanding principal amount of all Revolving Credit Loans and (B)
all Letter of Credit Obligations.
"Bank Leumi" means Bank Leumi USA.
"Base Rate" means a rate per annum equal to the Prime Rate for such day.
"Base Rate Loan" means a Revolving Credit Loan bearing interest at the
Base Rate.
"Board" means the Board of Governors of the Federal Reserve System of the
United States.
"Borrower" has the meaning specified therefor in the preamble hereto.
"Borrowing Base" means, as of any date, without duplication, the
difference between (i) the sum of (A) 85% of the Net Amount of Eligible Accounts
Receivable of the Borrower, (B) 80% of the sum of the value of the Eligible
Inventory of the Borrower plus the value of the Eligible Exchanged Inventory
owed to the Borrower, in each case, such value to be determined in accordance
with the West Texas Sour Crude Oil Benchmark, provided that in no event shall
the aggregate amount of clause (B) that is attributable to Eligible Exchanged
Inventory exceed $10,000,000 and the Agent may ▇▇▇▇ to market the Inventory at
any time, in its sole discretion, and (C) the lesser of (x) the Applicable
Percentage of cash and Permitted Investments of the Borrower, in each case to
the extent that such cash or Permitted Investment is held in a Depository
Account over which the WC Collateral Agent (or its nominee) has sole dominion
and control, the Borrower has executed and delivered to the WC Collateral Agent
a Depository Account Agreement and the WC Collateral Agent has a perfected,
first priority security interest therein; provided, however, that no cash or
Permitted Investments in the Asset Reinvestment Account, the Defeasance Account,
the Debt Service Support Account (as defined in the Term Loan Agreement) or the
Cash Depository Account (as defined in the Term Loan Agreement) shall be
included for the purposes of this calculation, and (y) $82,000,000, and (D) the
SCS Fixed Asset Credit, and (E) the Inventory Credit, and (ii) such reserves as
the Agent may deem appropriate in the exercise of its reasonable business
judgment based upon the lending practices of the Agent, consistent with the
practices customary in the commercial finance industry generally, provided that,
solely for purposes of calculating the Borrowing Base and calculating Letter of
Credit Obligations in connection with standby Letters of Credit for purposes of
Section 2.01(b)(ii)(B), Section 2.07(c), Section 3.01(b)(solely with respect to
clause (ii) thereof) (A), Section 5.01(i) and Section 7.01(m) of this Agreement,
clause (ii) of the definition of Letter of Credit Obligations in connection with
standby Letters of Credit issued for the purpose of facilitating the purchase of
crude oil by the Borrower shall be the actual amount of the liability supported
by such Letter of Credit even if such amount is less than the actual amount
available for drawing under such Letter of Credit, to the extent that the Agent
is satisfied that the
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actual amount of the liability supported by such Letter of Credit is so limited.
In no event shall the Term Debt Service Reserve L/C be subject to the proviso in
the immediately preceding sentence.
"Borrowing Base Certificate" means the certification of the Borrowing Base
in compliance with Section 7.01(a)(x) hereof, substantially in the form of
Exhibit I hereto, setting forth the calculation of the Borrowing Base and
Availability for the Borrower.
"Business Day" means any day other than a Saturday, Sunday or other day on
which commercial banks in New York City or Tel Aviv, Israel are required or
authorized to close, provided, that with respect to the borrowing, payment,
conversion to or continuation of, or determination of interest rate on,
Eurodollar Loans, Business Day shall mean any Business Day on which dealings in
Dollar deposits may be carried on in the Interbank Market. Friday shall be a
Business Day notwithstanding that commercial banks may be authorized to close on
such day in Tel Aviv, Israel, provided that Friday shall not be a Business Day
for purposes of any funding obligation of the Agent or the Lenders hereunder.
"Business Plan" means the Alon USA Business Plan dated as of December 31,
2003.
"Capital Expenditures" means, for any period, (a) the additions to
property, plant and equipment and other capital expenditures of the Companies
and their consolidated Subsidiaries that are (or should be) set forth in a
consolidated statement of cash flows of the Alon USA for such period prepared in
accordance with GAAP, (b) Capitalized Lease Obligations incurred by the
Companies and their consolidated Subsidiaries during such period, but excluding
in each case (i) any such expenditure made to restore, replace or rebuild
property to the condition of such property immediately prior to any damage,
loss, destruction or condemnation of such property, to the extent such
expenditure is made with insurance proceeds, condemnation awards or damage
recovery proceeds relating to any such damage, loss, destruction or condemnation
and (ii) expenditures which represent any part of the aggregate consideration
paid in connection with any acquisition permitted hereunder, and (c) costs
incurred with respect to turnarounds, chemical catalysts, licensing, imaging and
other operating costs of the Companies or any Subsidiary that, in each case, are
classified as deferred assets in accordance with GAAP.
"Capital Guideline" means any law, rule, regulation, policy, guideline or
directive (whether or not having the force of law and whether or not the failure
to comply therewith would be unlawful) (i) regarding capital adequacy, capital
ratios, capital requirements, the calculation of the capital of a bank or its
holding company or similar matters, or (ii) affecting the amount of capital
required to be obtained or maintained by the Lenders, Affiliates of the Lenders
or the L/C Issuer or the manner in which the Lenders, Affiliates of the Lenders
or the L/C Issuer allocate capital to any of their contingent liabilities
(including letters of credit), advances, acceptances, commitments, assets or
liabilities.
"Capital Stock" means any and all shares, interests, participations,
warrants, options or other equivalents (however designated) of capital stock of
a corporation or any and all equivalent ownership interests in a Person (other
than a corporation).
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"Capitalized Lease" means any lease or agreement to lease which is
required under GAAP to be capitalized on the balance sheet of the lessee.
"Capitalized Lease Obligations" means obligations for the payment of rent
for any real or personal property under leases or agreements to lease that, in
accordance with GAAP, have been or should be capitalized on the books of the
lessee and, for purposes hereof, the amount of any such obligation shall be the
capitalized amount thereof determined in accordance with GAAP.
"Cash Concentration Account" means a deposit account maintained by the
Borrower at the Cash Concentration Account Bank, which deposit account shall be
under the sole dominion and control of the Agent.
"Cash Concentration Account Agreement" means an agreement with respect to
the Cash Concentration Account, in form and substance satisfactory to the Agent,
among the Cash Concentration Account Bank, the Borrower, and the Agent,
delivered to the Agent pursuant to Section 7.01(n) hereof, as the same may be
amended or otherwise modified from time to time.
"Cash Concentration Account Bank" means Bank Leumi.
"Change of Control" means (i) Alon Israel shall cease to directly own and
control, of record and beneficially, at least 96% of the then outstanding
Capital Stock of the Parent, (ii) the Parent shall cease to directly own and
control, of record and beneficially, at least 90% of the then outstanding
Capital Stock of Alon USA, free and clear of all Liens other than pursuant to
the Term Loan Documents and other than Liens expressly permitted by Sections
7.02(a)(x) and 7.02(a)(xi), (iii) Alon USA shall cease to directly own and
control, of record and beneficially, 90% of the then outstanding Capital Stock
of Alon Operating and Alon Capital free and clear of all Liens other than
pursuant to the Term Loan Documents and the Loan Documents, (iv) the Parent
shall cease to own and control, either directly or through one or more
intermediate Companies, at least 90% of the then outstanding Capital Stock of
the Borrower and Alon SPV, free and clear of all Liens other than pursuant to
the Term Loan Documents and the Loan Documents, (v) Alon Capital shall cease to
own and control, either directly or through one or more intermediate Companies,
at least 90% of each of Alon Pipeline, Alon Refining, APPL and FTPL, free and
clear of all Liens other than pursuant to the Term Loan Documents and the Loan
Documents, (vi) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall cease to be the chairman of the board of
directors of the Parent and a successor, reasonably acceptable to the Agent, is
not appointed, on terms reasonably acceptable to the Agent, within 180 days of
such cessation, or (vii) ▇▇▇▇ ▇▇▇▇▇▇ shall cease to be involved in the
day-to-day operations and management of the businesses of the Companies and the
Borrower and a permanent full-time successor, reasonably acceptable to the
Agent, is not appointed, on terms reasonably acceptable to the Agent, within 180
days of such cessation of involvement; provided that, with the prior written
consent of the Agent and the Term Loan Agent, such consent not to be
unreasonably withheld or delayed, any event described in clauses (i), (ii) or
(iii) above shall not be deemed a Change of Control so long as (A) Alon Israel
owns and controls, either directly or through one or more intermediate
Companies, at least 96% of the Capital Stock of the Parent, Alon USA and Alon
Capital and (B) no Default or Event of Default has occurred and is continuing;
provided further that (I) in the case of clause (ii) and (iii) above, non-voting
Capital Stock owned by any manager or employee of Alon Assets and Alon
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Operating issued under any employee stock option or stock purchase plan or
employee benefit plan in existence as of the date hereof or hereafter adopted,
or otherwise in connection with the employment or retention of any manager or
employee, in each case shall not be included in the determination of whether a
Change of Control has occurred so long as such Capital Stock does not
constitute, in the aggregate, more than 20% of the Capital Stock of any such
Subsidiary, and (II) Capital Stock acquired by any employee of a Company (other
than with respect to the Capital Stock of Alon Assets or Alon Operating) through
the exercise by such employee of any stock options granted under the stock
option plan described in Schedule I hereto, shall not be included in the
determination of whether a Change of Control has occurred so long as such
Capital Stock does not constitute, in the aggregate, more than 16% of the
Capital Stock of any Company. Notwithstanding anything herein to the contrary,
100% of the Capital Stock of the Borrower shall at all times be owned by its
existing parent free and clear of all Liens other than pursuant to the Term Loan
Documents and the Loan Documents.
"Collateral" means all of the property (tangible and intangible) purported
to be subject to the Lien purported to be created by any mortgage, deed of
trust, security agreement, pledge agreement, assignment or other security
document heretofore or hereafter executed by any Person as security for all or
any part of the Obligations.
"Collateral Agents" means the FA Collateral Agent and the WC Collateral
Agent.
"Company" and "Companies" have the meanings specified therefor in the
preamble hereto.
"Consolidated Current Assets" means, at a particular date, all cash,
Permitted Investments, accounts and inventory of a Person and its Consolidated
Subsidiaries (other than accounts for which the account debtor is an Affiliate
of such Person, or any Consolidated Subsidiary of such Person, to the extent
such account did not arise through an arms length transaction in the ordinary
course of business) and all other items which would, in conformity with GAAP, be
included under current assets on a balance sheet of such Person and its
Consolidated Subsidiaries on a consolidated basis as at such date.
"Consolidated Current Liabilities" means, at a particular date, all
amounts which would, in conformity with GAAP, be included under current
liabilities on a balance sheet of a Person and its Consolidated Subsidiaries on
a consolidated basis, as at such date, but in any event including, without
limitation, the amounts of (i) all Indebtedness of such Person or any of its
Consolidated Subsidiaries payable on demand, or, at the option of the Person to
whom such Indebtedness is owed, not more than twelve (12) months after such
date, (ii) any payments in respect of any Indebtedness of such Person or any of
its Consolidated Subsidiaries (whether installment, serial maturity, sinking
fund payment or otherwise) required to be made not more than twelve (12) months
after such date, (iii) all liabilities or Indebtedness payable on demand or, at
the option of the Person to whom such Indebtedness is owed, not more than twelve
(12) months after such date, and (iv) all accruals for federal or other taxes
measured by income payable within a twelve (12) month period.
"Consolidated EBITDA" means, for any Person and its Consolidated
Subsidiaries, for any period, the net income (or net loss) of such Person and
its Consolidated Subsidiaries for
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such period, plus (i) the sum, without duplication, of (A) gross interest
expense for such period, (B) income tax expense, (C) positive depreciation
expense, (D) positive amortization expense, (E) extraordinary or unusual
non-cash losses (to the extent that such extraordinary or unusual losses have
not resulted in a cash outlay by such Person), (F) non-cash charges representing
"last-in-first-out" inventory costs in excess of estimated replacement costs,
(G) any non-cash operating losses, and (H) any losses resulting from a change in
accounting principles, less (ii) the sum, without duplication, of (A)
extraordinary gains or unusual non-cash gains, and (B) any non-cash gain that
constitutes a reversal or a recovery of any non-cash charges representing
"last-in-first-out" inventory costs in excess of estimated replacement costs,
each determined on a consolidated basis in accordance with GAAP for such Person
and its Consolidated Subsidiaries.
"Consolidated Subsidiaries" of a Person at any time shall mean those
Subsidiaries of such Person whose accounts are or should in accordance with GAAP
be consolidated with those of such Person.
"Consolidated Tangible Assets" means, for a Person and its Consolidated
Subsidiaries, at any date, (i) Consolidated Total Assets of such Person and its
Consolidated Subsidiaries minus (ii) the portion of such Consolidated Total
Assets attributable to positive goodwill, unamortized non-compete agreements,
organization costs, patents, trademarks, trade names, copyrights, software and
other intangible assets classified as such in accordance with GAAP.
"Consolidated Tangible Net Worth" means , with respect to a Person and its
Consolidated Subsidiaries, the excess of (i) the Consolidated Tangible Assets of
such Person and its Consolidated Subsidiaries plus the amount of any Minority
Interest, over (ii) the Consolidated Total Liabilities of such Person and its
Consolidated Subsidiaries less the aggregate principal amount of and accrued and
unpaid interest on all Subordinated Investor Loans of such Person and its
Consolidated Subsidiaries, in each case computed and consolidated in accordance
with GAAP.
"Consolidated Total Assets" means, for a Person and its Consolidated
Subsidiaries, at any date, the aggregate net book value of the assets of such
Person and its Consolidated Subsidiaries on a consolidated basis after all
appropriate adjustments in accordance with GAAP (including, without limitation,
reserves for doubtful receivables, obsolescence, depreciation and amortization
and excluding the amount of any write-up or revaluation of any asset resulting
from a non-cash transaction, and excluding any amounts due from employees and
excluding all loans to shareholders, to the extent not made in the ordinary
course of the business of such Person or Consolidated Subsidiary).
"Consolidated Total Liabilities" means, for a Person and its Consolidated
Subsidiaries, at any date, without duplication, all obligations which in
conformity with GAAP would be included in determining total liabilities as shown
on the liabilities side of a balance sheet of such Person and its Consolidated
Subsidiaries including, without limitation, in any event, all Indebtedness of
such Person and its Consolidated Subsidiaries at such date whether or not the
same would be shown, excluding minority interests.
- 8 -
"Contribution Agreement" means the Amended and Restated Indemnity,
Subrogation and Contribution Agreement dated as of August 8, 2000, as amended
and restated on the date hereof, among the Borrower and the Guarantor Companies
in favor of the Agent, in form and substance reasonably satisfactory to the
Agent, as the same may be further amended, restated or otherwise modified from
time to time.
"Credit Card Depository Account Agreements" means one or more agreements,
in form and substance reasonably satisfactory to the Agent, among a credit card
servicer for SCS, SCS and the FA Collateral Agent, delivered to the FA
Collateral Agent pursuant to Section 7.01(n) hereof, as the same may be amended
or otherwise modified from time to time.
"CSFB" means Credit Suisse First Boston, a bank organized under the laws
of Switzerland.
"Debt Service Support Requirement" means the requirement (a) that the
Borrower (i) provide a guarantee or letter of credit in form and substance
reasonably satisfactory to the Term Loan Agent and issued by IDB under which the
Term Loan Agent may obtain amounts required to pay interest due and owing by
Alon USA but unpaid on the Term Loans or (ii) establish a segregated cash
account with the Term Loan Agent into which amounts may be deposited and
available for the payment of interest due but unpaid on the Term Loans, and (b)
that the undrawn amount of such guarantee or letter of credit, or the amount on
deposit in such segregated cash account, be on each day equal to or greater than
the amount necessary to pay all interest that will accrue hereunder during the
nine-month period commencing on such day (and in the event any amount of such
guarantee, letter of credit or cash account is actually applied against the
obligations of the Borrower to pay interest on the Term Loans made under the
Term Loan Agreement to Alon USA, the Borrower shall supplement such guarantee,
letter of credit or cash account, as the case may be, in an amount necessary to
comply with this clause (b) not later than 30 days following the date of such
application), assuming that the weighted average interest rate applicable to the
Term Loans on such day will be the rate at which interest accrues on all the
outstanding Term Loans for the remainder of such nine-month period and that the
aggregate principal amount of the Term Loans outstanding on such day will remain
outstanding for the remainder of such nine-month period.
"Default" means an event which, with the giving of notice or the lapse of
time or both, would constitute an Event of Default.
"Defeasance Account" has the meaning specified therefor in Section
7.02(s)(ii).
"Depository Account Agreements" means each agreement, in form and
substance reasonably satisfactory to the Agent, among a Depository Bank, the
Borrower and the Agent, delivered to the Agent as required hereunder, as such
Agreement may be amended or otherwise modified from time to time.
"Depository Accounts" means the lockbox accounts or blocked depository
accounts maintained by the Borrower for the collection of the cash of the
Borrower and the proceeds of Accounts Receivable and any other Collateral.
- 9 -
"Depository Bank" means each financial institution at which a Depository
Account is maintained.
"Dollar", "Dollars" and the symbol "$" means lawful money of the United
States of America.
"Effective Date" means the date on which all the conditions set forth in
Section 5.01 hereof are satisfied or waived.
"Eligible Accounts Receivable" means the Accounts Receivable of the
Borrower which are, and at all times continue to be, reasonably acceptable to
the Agent in all respects. Criteria for eligibility may be established and
revised from time to time solely by the Agent in its exclusive judgment
exercised reasonably. In general, Accounts Receivable of the Borrower shall be
deemed to be eligible to the extent that such Accounts Receivable are generated
in the ordinary course of business of the Borrower and meet all of the following
conditions: (i) delivery of the merchandise or performance of the service giving
rise to such Accounts Receivable has been completed; (ii) no return, rejection
or repossession has occurred; (iii) the merchandise or service has been accepted
by the Account Debtor without dispute, set-off, defense or counterclaim,
provided that if such Account Receivable is subject to dispute, set-off, defense
or counterclaim, the portion of such Account Receivable that the Agent
determines in its reasonable discretion is not subject to such dispute, set-off,
defense or counterclaim and will be paid in due course, will not be ineligible
solely by reason of this clause (iii) , (iv) such Account Receivable (A) is
owned by the Borrower free and clear of any Lien, other than any Lien in favor
of the WC Collateral Agent and the Term Loan Agent, and (B) continues to be in
full conformity with any and all representations and warranties made by the
Borrower to the Agent and the Lenders with respect thereto in the Loan
Documents; (v) such Account Receivable is unconditionally payable in Dollars, in
the case of Accounts Receivable arising from the sale of jet fuel, asphalt and
lubricants, within 75 days from the invoice date, and in all other cases, within
30 days of the invoice date, and is not evidenced by a promissory note, chattel
paper or any other instrument or document; (vi) in the case of Accounts
Receivable arising from the sale of jet fuel, asphalt and lubricants, no more
than 45 days have elapsed from the invoice due date and no more than 120 days
have elapsed from the invoice date, and in all other cases, no more than 15 days
have elapsed from the invoice due date and no more than 30 days have elapsed
from the invoice date; (vii) the Account Debtor with respect thereto is not an
Affiliate of any Loan Party, (viii) such Account Receivable does not constitute
an obligation of the United States or any other Governmental Authority unless
the Borrower has provided to the Agent evidence, reasonably satisfactory to the
Agent, that (A) the Accounts Receivable of such Governmental Authority are not
subject to the Assignment of Claims Act or any state counterpart to the
Assignment of Claims Act or (B) the Borrower has complied in all respects with
the Assignment of Claims Act (or any such state counterpart) with respect to
such Accounts Receivable (it being understood that (y) the burden of such
compliance shall rest solely with the Borrower and (z) without limiting the
obligations of the Companies under Section 12.05 hereof, the Borrower shall
reimburse the Agent upon demand for any reasonable expenses (including, without
limitation, the fees and other charges of legal counsel to the Agent) incurred
by the Agent to verify such compliance or otherwise in connection therewith);
(ix) the Account Debtor (or the applicable office of the Account Debtor) with
respect thereto is located in the continental United States, unless the Account
Receivable is supported by a letter of credit issued by an Eligible Bank (or
- 10 -
other similar obligation satisfactory to the Agent in its sole discretion), such
letter of credit has been delivered to the WC Collateral Agent, the right to
draw on such letter of credit has been assigned and transferred to the WC
Collateral Agent and the issuer of such letter of credit has consented to such
assignment and transfer; (x) the Account Debtor with respect thereto is not also
a vendor to, supplier to or creditor of any Borrower or Guarantor, unless such
supplier or creditor has executed a no-offset letter satisfactory to the Agent
in its sole discretion; (xi) not more than 50% of the aggregate amount of all
Accounts Receivable of the Account Debtor with respect to such Account
Receivable have remained unpaid, in the case of Accounts Receivable arising from
the sale of jet fuel, asphalt and lubricants, 15 days past the invoice due date
or 75 days past the invoice date, and in all other cases, 15 days past the
invoice due date or 30 days past the invoice date; (xii) the Accounts Receivable
of such Account Debtor do not exceed an amount equal to 15% of the aggregate of
all Accounts Receivable at any date; (xiii) the Account Debtor is not the
subject of a "Bankruptcy Proceeding"; for purposes hereof an Account Debtor is
subject to a "Bankruptcy Proceeding" if such Account Debtor has filed a petition
for bankruptcy or any other relief under the United States Bankruptcy Code or
any other law relating to bankruptcy, insolvency, reorganization or relief of
debtors, made an assignment for the benefit of creditors, had filed against it
any petition or other application for relief under the United States Bankruptcy
Code or any such other law, has failed, suspended business operations, become
insolvent, called a meeting of its creditors for the purpose of obtaining any
financial concession or accommodation, or had or suffered to be appointed a
receiver or a trustee for all or a significant portion of its assets or affairs,
(xiv) credit card receivables, to the extent that (A) the Agent is satisfied
that the WC Collateral Agent has a perfected, first priority security interest,
securing the Obligations, (B) the Agent is satisfied that such Account
Receivables comply with all laws and regulations, and (C) such Account
Receivables are otherwise satisfactory to the Agent, including, without
limitation, as to aging, default rate and such other criteria as the Agent may
consider relevant (all in the reasonable discretion of the Agent exercised in
accordance with the customary commercial practices of the Agent), and (xv) the
Agent is, and continues to be, satisfied with the credit standing of the Account
Debtor in relation to the amount of credit extended.
"Eligible Assignee" means (i) any Lender or Affiliate of a Lender, (ii)
with the consent of the Agent, such consent not to be unreasonably withheld or
delayed, any commercial bank and (iii) with the consent of the Borrower, such
consent not to be unreasonably withheld or delayed, and the consent of the Agent
any other Person, provided, that the consent of the Borrower shall not be
required after the occurrence and during the continuance of a Default or an
Event of Default.
"Eligible Exchanged Inventory" means Exchanged Inventory owed to the
Borrower and constituting obligations that are, and at all times continue to be,
reasonably acceptable to the Agent in all respects. Criteria for eligibility may
be established and revised from time to time solely by the Agent in its
exclusive judgment exercised reasonably. In general, Exchanged Inventory of the
Borrower shall be deemed to be eligible to the extent that such Exchanged
Inventory is generated in the ordinary course of business of the Borrower and
meets all of the following conditions: (i) such Person is obligated to transfer
the Exchanged Inventory to the Borrower, free and clear of any right, title and
interest of such Person and free and clear of any Lien (other than any Lien in
favor of the Agent and the Term Loan Agent), and in accordance with customary
industry terms and conditions for settlement of such transactions (as
- 11 -
determined by the Agent), (ii) such obligation arose in connection with the
delivery in the ordinary course of business of Hydrocarbons or Hydrocarbon
Products by the Borrower to such Person, (iii) the obligation to deliver such
Hydrocarbons or Hydrocarbon Products to the Borrower is not subject to any
dispute, set-off, defense or counterclaim, (iv) such Person is not an Affiliate
of any Loan Party, and (v) the Agent is, and continues to be, satisfied with the
credit standing of such Person in relation to the amount of the Exchanged
Inventory.
"Eligible Hydrocarbon Products" means the following Hydrocarbon Products:
(i) crude oil; (ii) gasoline; (iii) diesel fuel; (iv) jet fuel; (v) bitumen (but
not asphalt or other Hydrocarbon Products derived from bitumen); (vi) chemicals
consisting of Propane, Propane Offspec, Benzene, Toluene, Propylene - Chem Grade
BS, and FAS 70, 104 and 104B; (vii) distillates consisting of Jet A (Kerosene
Base), Unfinished #2 Fuel Mixed Product, Light Oils - No 2 Dist, Light Oils -
Light Cycle, Low Sulfur Diesel Fuel, Low Sulfur No 1 Dist, and Low Sulfur
Kerosene; (viii) heavy oils and sulfur consisting of Heavy Oil - No 6 Fuel Oil
and Heavy Fuel - Carbon Blk Oil, and (ix) intermediates consisting of Methanol,
Normal Butane, Alky Feed Stock, Isobutane, Reformer Feed Stock, Gas Oil BS,
Heavy Rerun Slop and Sulfur.
"Eligible Inventory" means Inventory (other than Exchanged Inventory)
consisting of Eligible Hydrocarbon Products of the Borrower which meet all of
the following specifications: (i) the Inventory is owned by the Borrower free
and clear of any existing Lien, other than that of the WC Collateral Agent and
the Lenders under the Loan Documents, it is not held on consignment or any other
similar arrangement and may be lawfully sold and it continues to be in full
conformity with any representations and warranties made in this Agreement and
the other Loan Documents by the Borrower with respect thereto; (ii) the Borrower
has the right to assign its interest therein and the power to grant Liens
thereon and security interests therein; (iii) the Inventory does not represent
unsaleable product; (iv) no Account Receivable or, except as permitted by clause
(vi)(B) below, document of title has been created or issued with respect to such
Inventory; (v) the Inventory is readily marketable for sale by the Borrower;
(vi) the Inventory is (A) located in one of the locations in one of the United
States listed on Part A of Schedule 6.01(e) hereto or such other locations in
the continental United States as the Agent shall approve in writing from time to
time or (B) "in transit", provided that such "in-transit" Inventory is or will
be Inventory that is or will be shipped under a Letter of Credit issued by the
L/C Issuer pursuant to this Agreement to a location in the United States
described in clause (vi)(A) above; and (vii) the Inventory is not otherwise
regarded by the Agent, in its reasonable discretion, as unsuitable Collateral
for the Obligations, and is and at all times shall continue to be reasonably
acceptable to the Agent in all respects. In no event shall Hydrocarbons or
Hydrocarbon Products involved in throughput operations or held in the Borrower'
terminals or trucks but not owned by or contracted to the Borrower be considered
Eligible Inventory (provided, however, that Accounts Receivable arising out of
the storage, handling or throughputting of such non-owned Hydrocarbons or
Hydrocarbon Products may be deemed Eligible Accounts Receivable, subject to the
other conditions set forth in the definition of such term).
"Employee Plan" means an employee benefit plan (other than a Multiemployer
Plan) covered by Title IV of ERISA and maintained (or was maintained at any time
during the six (6) calendar years preceding the date of any borrowing hereunder)
for employees of the Companies or any of their ERISA Affiliates.
- 12 -
"Environmental Actions" refers to any complaint, summons, citation,
notice, directive, order, claim, litigation, investigation, judicial or
administrative proceeding, judgment, letter or other written communication from
any governmental agency, department, bureau, office or other authority, or any
third party involving violations of Environmental Laws or Releases of Hazardous
Materials (i) from any assets, properties or businesses of any Loan Party or any
predecessor in interest; or (ii) from or onto any adjoining properties or
businesses; or (iii) from or onto any facilities which received Hazardous
Materials generated by any Loan Party or any predecessor in interest.
"Environmental Costs" means any monetary obligations, losses, liabilities
(including strict liability), damages, punitive damages, consequential damages,
treble damages, costs and expenses (including all reasonable out-of-pocket fees,
disbursements and expenses of counsel, out-of-pocket expert and consulting fees
and out-of-pocket costs for environmental site assessments, remedial
investigation and feasibility studies), fines, penalties, sanctions and interest
incurred as a result of any Environmental Action filed by any Governmental
Authority or any third party which relate to any violations of Environmental
Laws, Remedial Actions, Releases or threatened Releases of Hazardous Materials
from or onto any property presently or formerly owned or operated by any Company
or any Subsidiary, or a predecessor in interest to the extent relating to the
Refinery, Terminals, or Pipelines, or any Hazardous Materials generated and
disposed of offsite by any Company, or any Subsidiary of the Company or a
predecessor in interest to the extent relating to the Refinery, Terminals, or
Pipelines.
"Environmental Law" means the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. Section 9601, et seq.), the Hazardous
Materials Transportation Act (49 U.S.C. Section 1801, et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. Section 6901, et seq.), the Federal
Water Pollution Control Act (33 U.S.C. Section 1251 et seq.), the Clean Air Act
(42 U.S.C. Section 7401 et seq.), the Toxic Substances Control Act (15 U.S.C.
Section 2601 et seq.) and the Occupational Safety and Health Act (29 U.S.C.
Section 651 et seq.), as such laws may be amended or supplemented from time to
time, and any other present or future federal, state, local or foreign statute,
ordinance, rule, regulation, order, judgment, decree, permit, license or other
binding determination of any Governmental Authority imposing liability or
establishing standards of conduct for protection of the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and, unless the context otherwise requires, the rules
and regulations promulgated thereunder from time to time.
"ERISA Affiliate" means, with respect to any Person, any trade or business
(whether or not incorporated) which is a member of a group of which such Person
is a member and which would be deemed to be a "controlled group" within the
meaning of Sections 414(b), (c), (m) and (o) of the Internal Revenue Code.
"Eurodollar Base Rate" means, with respect to any Eurodollar Loan, the
quotation (expressed as percentage per annum and rounded upwards, if necessary,
to the next 1/16 of 1%) appearing on Telerate Page 3750 as of 11:00 a.m., New
York time, two (2) Business Days prior to the commencement of such Interest
Period for U.S. Dollar deposits in the Interbank Market in the approximate
amount of such Eurodollar Loan to be outstanding during such Interest Period
- 13 -
and for a period equal to such Interest Period. Notwithstanding the foregoing,
if no such rate appears on Telerate Page 3750, then the Eurodollar Base Rate for
such Interest Period shall be the rate (rounded upwards, if necessary, to the
next 1/16 of 1%) at which deposits in United States dollars are offered to the
Agent by prime banks in the Interbank Market in immediately available funds at
approximately 11:00 a.m., at the place of such Interbank Market, two (2)
Business Days prior to the commencement of such Interest Period in the
approximate amount of such Eurodollar Loan to be outstanding during such
Interest Period and for a period equal to such Interest Period.
"Eurodollar Loan" means a Revolving Credit Loan bearing interest based on
the Eurodollar Rate.
"Eurodollar Rate" means with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for such day
in accordance with the following formula (rounded upwards, if necessary, to the
nearest 1/16 of 1%):
Eurodollar Base Rate
---------------------------
1.00 - Reserve Requirements
"Event of Default" means any of the events set forth in Section 10.01
hereof.
"Excess Availability" means, as of any date of determination, the amount
equal to Availability minus the aggregate amount, if any, of all trade payables
of the Borrower more than sixty (60) days past due and all book overdrafts of
the Borrower in excess of historical practices with respect thereto, in each
case as determined by the Agent.
"Exchanged Inventory" means Inventory of a Person (other than a Loan
Party) consisting of Hydrocarbons or Hydrocarbon Products that such Person is
obligated to transfer to a Company in connection with product exchange
arrangements.
"Existing Effective Date" means August 8, 2000.
"Existing Revolving Credit Agreement" has the meaning specified therefor
in the recitals hereto.
"Existing Term Loan Agreement" means the Amended Term Loan Agreement,
dated as of July 31, 2000, as amended prior to the date hereof, by and among
SCS, Alon Pipeline, Alon Refining, APPL, FTPL, the financial institutions from
time to time party thereto, and Bank Leumi.
"FA Collateral Agent" means Bank Leumi, or any successor or replacement
agent in its capacity as a collateral agent for the Lenders.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period of 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 on the next
succeeding Business Day by the Federal Reserve Bank of New
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York, or, 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 the
Agent from three Federal funds brokers of recognized standing selected by it.
"Field Examination Fee" has the meaning specified therefor in Section
2.08(d) hereof.
"Final Maturity Date" means the earlier to occur of (i) the Termination
Date or (ii) the date this Agreement is terminated pursuant to Section 12.01(a)
or Section 12.01(b) hereof.
"Financial Statements" means (i) the audited consolidated balance sheets,
consolidated statements of income and retained earnings and consolidated
statements of cash flow of the Parent and its Consolidated Subsidiaries as of
December 31, 2002, audited by KPMG, LLP, and (ii) the unaudited consolidated
balance sheets, consolidated statements of income and retained earnings and
consolidated statements of cash flow of the Parent and its consolidated
Subsidiaries as of the Fiscal Quarter ending September 30, 2003, reviewed by
KPMG, LLP.
"Fiscal Month" means a fiscal month of the Parent and its Consolidated
Subsidiaries ending on the last day of a calendar month.
"Fiscal Quarter" means a fiscal quarter of the Parent and its Consolidated
Subsidiaries ending on March 31, June 30, September 30 or December 31.
"Fiscal Year" means a fiscal year of the Parent and its Consolidated
Subsidiaries ending on December 31 of each year.
"Fixed Assets" means the Refinery, any other refinery, any Terminal, any
Pipeline and any other real property, fixture or equipment (other than the GTR
Assets and the SCS Assets) of any Company wherever located and whether now or
hereafter existing or arising and whether now owned or hereafter acquired.
"FTPL" means Fin-Tex Pipe Line Company, a Texas corporation.
"GAAP" means generally accepted accounting principles in effect from time
to time in the United States, applied on a consistent basis, provided that for
the purposes of Section 7.02(p) and the definitions used therein, "GAAP" shall
mean generally accepted accounting principles in effect on the date hereof and
consistent with those used in the preparation of the Financial Statements.
"GECC" means GE Capital Franchise Finance Corporation, a Delaware
corporation.
"GECC Borrower" means SCS Finance I, L.P. and SCS Finance II, L.P., each a
Delaware limited partnership.
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"GECC Entities" means SCS Finance, Inc., a Delaware corporation, SCS
Finance GP LLC, a Delaware limited liability company, SCS Finance LP LLC, a
Delaware limited liability company, and the GECC Borrower.
"GECC Loan Documents" means collectively, the Loan Agreements dated as of
October 1, 2002, by and between GECC and the GECC Borrower, the Equipment Loan
and Security Agreements dated as of October 1, 2002, by and between GECC and the
GECC Borrower, and all other agreements, instruments and documents executed and
delivered by any of the GE Borrower, GECC, SCS, or Alon USA in connection
therewith.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any department, commission, board,
bureau, instrumentality, agency, court or other entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Ground Leases" means each lease pursuant to which SCS leases the
properties listed on Schedule 6.01(q) hereto, as the same may have heretofore or
may be hereafter amended or modified, excluding for all purposes any ground
lease that is subject to the GECC Loan Documents.
"Growth Assets" means assets to be used (i) in the businesses conducted by
Alon USA or any Subsidiary thereof on the date hereof and (ii) within the Alon
Business Territory.
"GTR Assets" means the assets described on Schedule 7.02(b)(xiii).
"GTR Financing" means Indebtedness to be incurred by Alon Refining in
connection with the GTR Assets, pursuant to a loan or a sale and leaseback
transaction in a principal amount not to exceed $9,000,000.
"GTR Loan Documents" means, collectively, each loan or other financing
agreement, guaranty, security agreement, and all other instruments, agreements
and other documents executed and delivered in connection with the GTR Financing.
"Guaranties" means (i) the guaranty made by the Guarantor Companies
contained in Article XI hereof guaranteeing the Obligations, (ii) each guaranty
made by an Investor in favor of the Lenders, as the same may be amended,
modified or supplemented from time to time, and (iii) any other guaranty, in
form and substance satisfactory to the Agent, made by any Person in favor of the
Lenders, guaranteeing all or any portion of the Obligations.
"Guarantor Companies" means the Companies party hereto from time to time,
other than the Borrower.
"Guarantors" means the Guarantor Companies, the Investors and all Persons
which hereafter guarantee, pursuant to Section 7.01(b) hereof or otherwise, all
or any part of the Obligations.
"Hazardous Materials" shall include (i) any element, compound, or chemical
that is defined, listed or otherwise classified as a contaminant, pollutant,
toxic pollutant, toxic or
- 16 -
hazardous substances, extremely hazardous substance or chemical, hazardous
waste, special waste, or solid waste that contains hazardous constituents under
Environmental Laws; (ii) petroleum and its refined products; (iii)
polychlorinated biphenyls; (iv) any substance exhibiting a hazardous waste
characteristic including but not limited to corrosivity, ignitability, toxicity
or reactivity as well as any radioactive or explosive materials; and (v) any
asbestos-containing materials and manufactured products containing Hazardous
Materials.
"Hedging Agreement" means any interest rate, foreign currency, commodity
or equity swap, collar, cap, floor, exchange transaction, forward agreement, or
other forward or other exchange or protection agreement or arrangement designed
to protect against fluctuations in interest rates or currency, commodity
(including, without limitation, Hydrocarbons or Hydrocarbon Products, and
whether or not the subject commodities are to be delivered) or equity values
(including, without limitation, any option with respect to any of the foregoing
and any combination of the foregoing agreements or arrangements), and any
confirmation executed in connection with any such agreement or arrangement, all
as amended or otherwise modified from time to time.
"Hydrocarbon Products" means all liquid, semi-liquid and gaseous
Hydrocarbon products of a Company derived from Hydrocarbons and/or other
feedstocks and blendstocks processed at the Refinery, including, without
limitation, crude oil, gasoline, diesel fuel, jet fuel, bitumen, asphalt,
propane, propylene, butane, benzene, aromatic solvents, carbon black oil and
sulfur.
"Hydrocarbons" means oil, gas, casinghead gas, drip gasoline, natural
gasoline, condensate, distillate, and any other liquid or gaseous hydrocarbons
and all products refined or separated therefrom.
"IDB" means Israel Discount Bank of New York.
"Indebtedness" means as to any Person, without duplication, (i)
indebtedness for borrowed money; (ii) indebtedness for the deferred purchase
price of property or services (other than current trade payables incurred in the
ordinary course of business and payable in accordance with customary practices);
(iii) indebtedness evidenced by bonds, debentures, notes or other similar
instruments (other than performance, surety and appeal or other similar bonds
arising in the ordinary course of business); (iv) obligations and liabilities
secured by a Lien upon property owned by such Person, whether or not owing by
such Person and even though such Person has not assumed or become liable for the
payment thereof; (v) obligations and liabilities directly or indirectly
guaranteed by such Person; (vi) obligations or liabilities created or arising
under any conditional sales contract or other title retention agreement with
respect to property used and/or acquired by such Person, whether or not the
rights and remedies of the lessor, seller and/or lender thereunder are limited
to repossession of such property; (vii) Capitalized Lease Obligations; (viii)
all liabilities in respect of letters of credit, acceptances and similar
obligations created for the account of such Person; (ix) net liabilities of such
Person under (A) Hedging Agreements and (B) foreign currency exchange
agreements, each calculated on a basis reasonably satisfactory to the Agent and
in accordance with accepted practice; and (x) all other items which, in
accordance with GAAP, would be included as liabilities on the liability side of
the balance sheet of such Person.
- 17 -
"Indemnitees" has the meaning specified therefor in Section 12.16 hereof.
"Interbank Market" means the London interbank market.
"Intercreditor Agreement" means the Lien Subordination and Intercreditor
Agreement, dated as of January 14, 2004, among the Agent, each Collateral Agent
and the Term Loan Agent, and duly acknowledged by the Loan Parties as the same
may be further amended or otherwise modified from time to time.
"Interest Period" means with respect to any Eurodollar Loan, the period
commencing on the borrowing date or the date of any continuation of or
conversion into such Eurodollar Loan, as the case may be, and ending one, two,
three or six months thereafter, in each case as selected by the Borrower in the
applicable notice given to the Agent pursuant to Sections 2.03 or 2.11 hereof;
provided that (i) any Interest Period that would otherwise end on a day that is
not a Business Day shall be extended to the next succeeding Business Day, unless
such Business Day falls in another calendar month, in which case such Interest
Period shall end on the next preceding Business Day, (ii) no Interest Period for
any Eurodollar Loan shall end after the Final Maturity Date, and (iii) no more
than three (3) Interest Periods for the Borrower may exist at any one time.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time.
"Inventory" means all Hydrocarbons, Hydrocarbon Products, other goods and
other merchandise of a Person including, but not limited to, all raw materials,
work in process, finished goods, materials and supplies of every nature used or
usable in connection with the manufacture, shipping, storing, advertising or
sale of such goods and merchandise, whether now owned or hereafter acquired and
all such property the sale or other disposition of which may give rise to
Accounts Receivable.
"Inventory Credit" means, as of any date, the amount set forth below
opposite the applicable period:
Period: Credit Amount:
------- --------------
January 1, 2003 through June 30, 2004 $ 24,000,000
July 1, 2004 through December 31, 2004 $ 20,000,000
January 1, 2005 through June 30, 2005 $ 16,000,000
July 1, 2005 through December 31, 2005 $ 12,000,000
January 1, 2006 through June 30, 2006 $ 8,000,000
July 1, 2006 through December 31, 2006 $ 4,000,000
- 18 -
"Investor Loans" means the Subordinated Investor Loans and the other loans
made by the Investors to the Companies in connection with the outstanding
minority interests in Alon Capital.
"Investors" means Alon Israel, Bielsol Investments (1987) Ltd., Sha'ar
▇▇▇▇▇▇▇▇▇▇ Ltd. and the other entities and individuals listed in Schedule B
hereto.
"Joinder Agreement" means a Joinder Agreement, substantially in the form
of Exhibit G hereto, executed by a Subsidiary of a Company made a party hereto
pursuant to Section 7.01(b) hereof.
"L/C Issuer" means IDB, in its capacity as issuer of the Letters of
Credit, Bank Leumi, a Lender, Bank Leumi Le Israel, New York Agency, or any
other Person acceptable to the Borrower, in each case as the Agent may select in
its sole and absolute discretion.
"Lease Agreement" means the Lease Agreement between Alon Refining, Alon
Pipeline, APPL and FTPL, as lessors, and the Borrower, as lessee, dated as of
the Existing Effective Date, as the same may be amended or otherwise modified
from time to time.
"Lease Assignment" means an assignment of the Lease Agreements and the
lease payments made thereunder, made by Alon Pipeline, Alon Refining, APPL and
FTPL in favor of the FA Collateral Agent, for the benefit of the Lenders, and
delivered to the Agent on the Existing Effective Date.
"Lease Documents" means the Lease Agreement and each other agreement,
instrument or document required to be delivered pursuant thereto.
"Lender" and "Lenders" have the meanings specified therefor in the
preamble hereto.
"Letter of Credit" has the meaning specified therefor in Section 3.01(a).
"Letter of Credit Administration Fee" has the meaning specified therefor
in Section 3.03(b)(i) hereof.
"Letter of Credit Amendment Fee" has the meaning specified therefor in
Section 3.03(b)(i) hereof.
"Letter of Credit Application" has the meaning specified therefor in
Section 3.01(a) hereof.
"Letter of Credit Collateral Account" has the meaning specified therefor
in Section 3.01(b) hereof.
"Letter of Credit Fees" means, collectively, (i) the Letter of Credit
Administration Fees, payable to the Agent for the account of the L/C Issuer,
(ii) the Letter of Credit Issuance Fees and the Letter of Credit Amendment Fees
payable to the Agent for the account of the
- 19 -
Lenders pursuant to Section 3.03(b)(i) hereof and (iii) the charges of the L/C
Issuer payable by the Borrower in accordance with Section 3.03(b)(ii) hereof.
"Letter of Credit Issuance Fee" has the meaning specified therefor in
Section 3.03(b)(i) hereof.
"Letter of Credit Obligations" means, at any time and without duplication,
the sum of (i) the Reimbursement Obligations at such time, plus (ii) the
aggregate maximum amount available for drawing under the Letters of Credit
outstanding at such time, plus (iii) all amounts for which the L/C Issuer may be
liable pursuant to any Letter of Credit in connection with any steamship
guaranty, airway release, indemnity or delivery order issued by the L/C Issuer
at the request of or for the benefit of the Borrower, in each case as calculated
by the L/C Issuer.
"License Agreements" means the agreements set forth in Schedule F hereto
and the 7-Eleven License Agreement.
"Lien" means any mortgage, deed of trust, pledge, lien, security interest,
charge or other encumbrance or security arrangement of any nature whatsoever,
including but not limited to any conditional sale or title retention
arrangement, and any assignment, deposit arrangement or lease intended as, or
having the effect of, security.
"Loan Account" means one or more ledger accounts for the Borrower
maintained at the Payment Office of the Agent in the name of the Borrower under
which the Borrower will be charged with all Revolving Credit Loans made to, and
all other Obligations incurred by, the Borrower or such other account as the
Agent shall designate from time to time.
"Loan Documents" means this Agreement, the Revolving Credit Notes, the
Guaranties, the Security Documents, the Intercreditor Agreement, the Cash
Concentration Account Agreement, the Depository Account Agreements, the Credit
Card Depository Account Agreements, the Consent, the 7-Eleven Consent, the
Contribution Agreement, the Letter of Credit Applications, each Subordination
Agreement, each Joinder Agreement, each Warrant, each Lease Assignment each
Revolving Loan Amendment Document and all other instruments, agreements and
other documents executed and delivered pursuant hereto or thereto.
"Loan Parties" means the Borrower and the Guarantors.
"Management Agreement" means the Management and Consulting Agreement,
dated as of August 1, 2003, by and among Alon USA, Alon Israel and Alon Energy,
as in effect on the date hereof.
"Master Lease" means, collectively, (i) the Master Lease dated as of
October 1, 2002, by and between SCS Finance I, L.P. and SCS, and (ii) the Master
Lease dated as of October 1, 2002, by and between SCS Finance II, L.P. and SCS.
"Material Adverse Effect" means a material adverse effect upon (i) the
business, condition (financial or otherwise), operations, properties or
prospects of the Borrower or the Companies taken as a whole, (ii) the ability of
a Loan Party to perform its obligations hereunder or under any other Loan
Document to which it is a party, (iii) the creation, priority or perfection
- 20 -
of a Lien arising under the Loan Documents on any Collateral (except as
otherwise expressly provided in any Loan Document and except for any such Lien
on Collateral with a market value of $1,000,000 or less to the extent that such
material adverse effect is remedied within 60 days after any Company obtains
knowledge thereof), (iv) the rights, powers and remedies of the Agent, the
Collateral Agents and the Lenders under this Agreement or any other Loan
Document or the legality, validity or enforceability of this Agreement or any
other Loan Document, or (v) the ability of the Companies taken as a whole to own
and operate their businesses in substantially the same manner prior to the
Effective Date.
"Material Contract" means, with respect to any Person, each contract or
agreement to which such Person is a party (i) involving aggregate consideration
payable to or by such Person of $10,000,000 or more (other than (A) contracts
that by their terms may be terminated by any party thereto in the ordinary
course of its business upon less than 60 days' notice and (B) supply contracts
that can be readily replaced within 20 days and are in fact so replaced within
20 days on terms not materially less favorable to such Person), (ii) relating to
the purchase, transportation by pipeline, rail or truck, refining, processing,
marketing, sale and supply of Hydrocarbons and Hydrocarbon Products that will
account for more than 3% of the sales of a Company during such Company's current
Fiscal Year or the payment of more than $10,000,000 in the aggregate during such
Company's current Fiscal Year (other than supply contracts that can be readily
replaced within 20 days and are in fact so replaced within 20 days on terms not
materially less favorable to such Company), or (iii) otherwise material to the
business, condition (financial or otherwise), operations, performance,
properties or prospects of such Person, and shall in any event include, the
Lease Documents and the License Agreements.
"Material Indebtedness" means Indebtedness (other than the Revolving
Credit Loans), or obligations in respect of one or more Hedging Agreements, of
any one or more of the Companies and their Subsidiaries in an aggregate
principal amount exceeding $2,500,000. For purposes of determining Material
Indebtedness, the "principal amount" of the obligations of the Companies or any
of their Subsidiaries in respect of any Hedging Agreement at any time shall be
the maximum aggregate amount (giving effect to any netting agreements) that the
Companies or their Subsidiaries would be required to pay if such Hedging
Agreement were terminated at such time.
"Minority Holders" means, collectively, Africa Israel Energy Ltd., Rosebud
Medical Ltd. and Tabris Investments Inc.
"Minority Interest" means an interest in a Company, held by a Person or
Persons (other than Alon Israel or another Company) which is set forth on the
balance sheet of a Person and its Consolidated Subsidiaries as a "Minority
Interest in Subsidiaries".
"Minority Purchase Agreement" means the Stock Purchase Agreement by and
among Alon USA and the Minority Holders, with respect to the purchase by Alon
USA of the shares of Capital Stock of Alon Capital owned by the Minority Holders
for the Minority Purchase Price.
"Minority Purchase Documents" means the Minority Purchase Agreement and
all other agreements, instruments and documents executed and delivered by any of
the Minority
- 21 -
Holders, Alon USA or the Parent in connection with the purchase by Alon USA of
the shares of Capital Stock of Alon Capital owned by the Minority Holders.
"Minority Purchase Price" means $57,100,000, of which the sum of (i)
$47,100,000 was paid to the Minority Holders prior to the date hereof, and (ii)
$10,000,000 plus accrued and unpaid interest (such interest rate not to exceed
7% per annum), which pursuant to the Minority Purchase Documents must be paid to
the Minority Holders on June 30, 2004.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. and any successor thereto.
"Mortgages" means (i) the "Mortgages," "Deeds of Trust" or "Deeds to
Secure Debt", each in form and substance satisfactory to the Agent, securing the
Obligations and delivered to a Collateral Agent, as the same may be amended or
otherwise modified from time to time, (ii) the SCS Mortgages and (iii) all other
mortgages, deeds of trust and deeds to secure the Obligations made by one or
more Loan Parties in favor of a Collateral Agent in respect of the real
property, and the improvements thereon, or interests therein, as the same may be
amended or otherwise modified from time to time.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA for which any Company or any of their ERISA Affiliates has
contributed to, or has been obligated to contribute to, at any time during the
six (6) years preceding the date hereof.
"Net Amount of Eligible Accounts Receivable" means the aggregate unpaid
invoice amount of Eligible Accounts Receivable less, without duplication, sales,
excise or similar taxes, returns, discounts, chargebacks, claims, advance
payments, credits, offsets, reserves and allowances of any nature at any time
issued, owing, granted, outstanding, available or claimed by an Account Debtor
of the Borrower with respect to such Eligible Accounts Receivable, to the extent
not already accounted for in the definition herein of Eligible Accounts
Receivable.
"Net Proceeds" means (a) with respect to the sale or other disposition of
any asset (excluding any Asset Swap undertaken in accordance with this Agreement
unless and to the extent that any cash is received in connection with such Asset
Swap) by the Companies or any of their Subsidiaries (including in connection
with any sale-leaseback), the excess, if any, of (i) the aggregate amount
received in cash (including any cash received by way of deferred payment
pursuant to a note receivable, other non-cash consideration or otherwise, but
only as and when such cash is so received) in connection with such sale or other
disposition, over (ii) the sum of (A) the principal amount of any Indebtedness
which is secured by a Permitted Lien on any such asset (other than Indebtedness
assumed by the purchaser of such asset) or which is required to be, and is,
repaid in connection with the sale or other disposition thereof (other than
Indebtedness hereunder), (B) the reasonable out-of-pocket expenses and fees
incurred by the Companies or their Subsidiaries in connection with such sale or
other disposition, and provided that all such expenses and fees are set forth on
a certificate provided to the Agent, and (C) federal and state taxes incurred in
connection with such sale or other disposition, whether payable at such time or
thereafter and (b) with respect to the sale or other disposition of any Capital
Stock or debt security by the Companies or any of their Subsidiaries, the excess
of (i) the aggregate amount
- 22 -
received in cash (including any cash received by way of deferred payment
pursuant to a note receivable, other non-cash consideration or otherwise, but
only as and when such cash is so received) in connection with such sale or other
disposition, over (ii) the sum of (A) the reasonable fees, commissions,
discounts and other out-of-pocket expenses incurred by the Companies or their
Subsidiaries in connection with such sale or other disposition, and (B) federal
and state taxes incurred in connection with such sale or other disposition,
whether payable at such time or thereafter.
"Notice of Borrowing" has the meaning specified therefor in Section 2.03
hereof.
"Obligations" means (i) the obligations of the Borrower to pay, as and
when due and payable (by scheduled maturity or otherwise), all amounts from time
to time owing by it in respect of any Loan Document to which it is a party,
whether for principal, interest (including, without limitation, all interest
that accrues after the commencement of any case, proceeding or other action
relating to bankruptcy, insolvency or reorganization of a Loan Party, whether or
not a claim for post-filing interest is allowed in such proceeding), Letter of
Credit Obligations, fees, commissions, expense reimbursements, indemnifications
or otherwise, and (ii) the obligations of the Borrower to perform or observe all
of its other obligations from time to time existing under any Loan Document to
which it is a party.
"Operating Lease Obligations" means all obligations for the payment of
rent for any real or personal property under leases or agreements to lease,
other than Capitalized Lease Obligations.
"Other Taxes" has the meaning specified therefor in Section 2.12 hereof.
"Parent" has the meaning specified therefor in the preamble hereto.
"Payment Office" means the Agent's offices located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, or such other offices as the Agent may designate and,
when used in connection with any payments made to the Agent, shall mean the
Agent Account.
"Permitted Acquisition" has the meaning specified therefor in Section
7.02(f)(x).
"Permitted Investments" means (i) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States or
marketable direct obligations issued or unconditionally guaranteed by any State
or agency thereof and backed by the full faith and credit of such State, in each
case maturing within one year from the date of acquisition thereof, (ii)
commercial paper, maturing not more than 270 days after the date of issue rated
P-1 by Moody's or A-1 by Standard & Poor's, (iii) overnight bank deposits,
certificates of deposit and bankers' acceptances, in each case maturing not more
than 360 days after the date of issue, issued by any Lender or other commercial
banking institutions and money market or time or demand deposit accounts
maintained at any Lender or other commercial banking institutions, each
commercial banking institution (other than any Lender) of which is a member of
the Federal Reserve System and has a combined capital and surplus and undivided
profits of not less than $500,000,000, (iv) investments in securities with
maturities of six months or less from the date of acquisition issued or fully
guaranteed by any state, commonwealth or territory of the United
- 23 -
States of America, or by any political subdivision or taxing authority thereof,
and rated at least "A" by Standard & Poor's or "A-2" by Moody's, (v) repurchase
agreements having maturities of not more than 90 days from the date of
acquisition which are entered into with the commercial banking institutions
described in clause (iii) above and which are secured by readily marketable
direct obligations of the Government of the United States of America or any
agency thereof, and (vi) investments in "money market funds" within the meaning
of Rule 2a-7 of the Investment Company Act of 1940, as amended, substantially
all of whose assets are invested in investments of the type described in clauses
(i) through (iii) and (v) herein.
"Permitted Lien" has the meaning specified therefor in Section 7.02(a)
hereof.
"Permitted Payments" means (i) regularly scheduled principal and interest
payments on the Term Loans as and when due and payable in accordance with the
Term Loan Agreement (as in effect on the date hereof and as modified in
accordance with Section 7.02(b)(xvi)), (ii) prepayments of the Term Loans based
on "Excess Cash Flow" (as defined in the Term Loan Agreement as in effect on the
date hereof) pursuant to Section 2.12(d) of the Term Loan Agreement as in effect
on the date hereof, (iii) other mandatory prepayments of the Term Loan pursuant
to Section 2.12 of the Term Loan Agreement (as in effect on the date hereof),
and (iv) payments of the Restricted Debt or defeasance payments with respect to
the Restricted Debt, in each case, to the extent expressly permitted by Section
7.02(s)(ii).
"Person" means an individual, corporation, limited liability company,
partnership, association, joint-stock company, trust, unincorporated
organization, joint venture or Governmental Authority.
"Pipelines" means the real property interests described in Schedule G
hereto and any other Pipeline now or hereafter owned or leased by any Company.
"Pledge Agreement" means the Second Amended and Restated Pledge and
Security Agreement, dated as of August 8, 2002, as amended, restated and
consolidated on the date hereof, made by the Borrower and each of the Companies
in favor of the WC Collateral Agent, substantially in the form of Exhibit C
hereto, as the same may be amended, supplemented or otherwise modified from time
to time.
"Post-Default Rate" means a rate of interest per annum equal to the rate
of interest otherwise in effect plus 2% or, if no other rate of interest is in
effect, the Base Rate plus 2%.
"Prime Rate" means the rate of interest publicly announced by IDB in New
York, New York from time to time as its prime rate. The prime rate is determined
from time to time by IDB as a means of pricing some loans to its borrowers and
neither is tied to any external rate of interest or index, nor necessarily
reflects the lowest rate of interest actually charged by IDB to any particular
class or category of customers. Each change in the Prime Rate shall be effective
on the first day of the month following the date such change is announced.
"Pro Rata Share" means, with respect to any Lender, a fraction (expressed
as a percentage), the numerator of which shall be the amount of such Lender's
Revolving Credit Commitment and the denominator of which shall be the Total
Commitment, provided that, if the Total Commitment has been reduced to zero, the
numerator shall be the aggregate unpaid
- 24 -
principal amount of such Lender's Revolving Credit Loans and participations in
Letter of Credit Obligations and the denominator shall be the aggregate unpaid
principal amount of all of the Revolving Credit Loans and participations in
Letter of Credit Obligations.
"Refinery" means the refinery owned by the Companies as of the Effective
Date and located near Big Spring, Texas, the fee interest owned by Alon Refining
in approximately 1,278 acres of land on which the refinery is situated, use or
license rights covering tracts of land adjoining the railroad lines, spurs or
sidings within the boundary of the refinery site, all easements, rights of way
and privileges granted to Alon Refining within or adjoining the refinery site,
all improvements, all machinery and equipment, and the interest of Alon Refining
as lessee in all leases of personal property used or held for use by Alon
Refining in connection with such refinery.
"Reimbursement Obligations" means the obligations of the Borrower to
reimburse the L/C Issuer and the Lenders for amounts payable by the L/C Issuer
or the Lenders under a Letter of Credit in respect of any drawing made under any
Letter of Credit, together with interest thereon as provided in Section 2.06
hereof and Section 3.01(c) hereof.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, seeping, migrating,
dumping, or disposing of any Hazardous Material (including the abandonment or
discarding of barrels, containers, and other closed receptacles containing any
Hazardous Material) into the indoor or outdoor environment, including ambient
air, soil, surface or ground water.
"Remedial Action" means all actions taken to (i) clean up, remove,
remediate, contain, treat, monitor, assess, evaluate or in any other way address
Hazardous Materials in the indoor or outdoor environment; (ii) prevent or
minimize a Release or threatened Release of Hazardous Materials so they do not
migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment; (iii) perform pre-remedial studies and
investigations and post-remedial operation and maintenance activities; or (iv)
any other actions authorized by 42 U.S.C. 9601.
"Reportable Event" means an event described in Section 4043 of ERISA
(other than an event described in Section 4043(c)(7) of ERISA.
"Required Lenders" means, at any time, Lenders whose Pro Rata Shares
aggregate at least 51%.
"Reserve Requirements" means, for any day as applied to a Eurodollar Loan,
the aggregate (without duplication) of the rates (expressed as a decimal
fraction) of reserve requirements in effect on such day (including, without
limitation, basic, supplemental, marginal and emergency reserves under any
regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System. Eurodollar Loans shall be deemed to constitute Eurocurrency Liabilities
and to be subject to such reserve requirements
- 25 -
without benefit of or credit for proration, exceptions or offsets which may be
available from time to time to any Lender or the Affiliate of any Lender under
Regulation D.
"Responsible Officer" means a person that is any of the chairman of the
board of directors, chief executive officer, or chief financial officer of any
Person.
"Restricted Debt" means the Investor Loans, the Minority Purchase Price,
the Warrant Purchase Price and the other Indebtedness described in Sections
7.02(f)(ix) and (xi).
"Restricted Payments" means (i) regularly scheduled principal and interest
payments on GTR Financing as and when due and payable in accordance with the GTR
Loan Documents (as in effect on the date such Indebtedness is initially incurred
and as modified in accordance with Section 7.02(b)(xvi)), and (ii) payments of
dividends pursuant to Sections 7.02(i)(viii) and (ix) hereof.
"Restricted Payment Conditions" means, as of the date of any Restricted
Payment, the satisfaction of each of the following conditions: (i) both
immediately before and immediately after such applicable Restricted Payment, no
Default or Event of Default shall have occurred and be continuing, (ii) both
before and immediately after such applicable Restricted Payment, Excess
Availability will be no less than $3,000,000, and (iii) the Lenders shall have
received a Borrowing Base Certificate setting forth the information required to
be included pursuant to Section 7.01(a)(x) on a projected basis at the time of
such Restricted Payment, which shall have been prepared on a reasonable basis
and in good faith by the Borrower, and have been based on assumptions believed
by the Borrower to be reasonable at the time made and upon the best information
then reasonably available to the Borrower, and a certificate by a Responsible
Officer to the effect that such officer is not aware of any event or development
since the date of delivery of the most recent financial statements of the
Companies to the Lenders that could reasonably be expected to have a Material
Adverse Effect.
"Revolving Credit Commitment" means, with respect to each Lender, the
revolving credit commitment of such Lender as set forth in Schedule D hereto, as
the same may be adjusted from time to time pursuant to the terms of this
Agreement.
"Revolving Credit Loan" means a loan made by a Lender to the Borrower
pursuant to Section 2.01(a) hereof.
"Revolving Credit Loan Subfacility" means that portion of the Total
Commitment equal to $82,000,000, as such amount may be reduced pursuant to
Section 2.07(a) hereof, or such other amount as shall be agreed to in writing by
the Agent, the Lenders and the Borrower.
"Revolving Credit Notes" means each amended promissory note of the
Borrower, substantially in the form of Exhibit A hereto, made payable to the
order of a Lender and evidencing the Indebtedness and other Obligations
resulting from the making by such Lender of Revolving Credit Loans and delivered
to the Agent, as such promissory note may be modified or extended from time to
time, and any promissory note or notes issued in exchange or replacement
therefor.
- 26 -
"Revolving Loan Amendment Documents" means this Agreement and each other
Loan Document delivered on the Effective Date pursuant to Article V hereof.
"SCS" means Southwest Convenience Stores LLC, a Texas limited liability
Agreement.
"SCS Assets" means all rights, title and interests in all real and
personal property and assets of SCS wherever located and whether now or
hereafter existing arising and whether now owned or hereafter acquired of every
kind and description, tangible and intangible.
"SCS Collateral Fixed Assets" means (i) all SCS Assets consisting of
retail stores that, as of the date hereof, are subject to a Lien in favor of a
Collateral Agent, and (ii) all hereafter acquired SCS Assets consisting of
retail stores that are acquired (directly or indirectly) from (A) proceeds of an
Asset Swap or (B) Net Proceeds of SCS Collateral Fixed Assets or (C) such other
retail stores upon which SCS elects to grant a perfected, first priority Lien in
favor of a Collateral Agent; provided, that SCS Collateral Fixed Assets shall
not include any property leased by SCS from its Subsidiaries to the extent that
such property is subject to the GECC Loan Documents.
"SCS Beverage" means SCS Beverage, Inc., a Texas corporation.
"SCS Fixed Asset Credit" means, initially, $5,600,000, which is the
lending value, for the purposes of calculating the Borrowing Base, attributed by
the Agent to the SCS Collateral Fixed Assets consisting of retail stores and in
which a Collateral Agent has a perfected, first priority security interest. The
Agent may establish such reserves as it may deem appropriate in the exercise of
its reasonable business judgment based on the lending practices of the Agent,
consistent with the practices customary in the commercial finance industry
generally, including, without limitation, if any of the statements set forth in
Schedule J hereto are incorrect or if any of the SCS Collateral Fixed Assets are
sold or otherwise disposed of (excluding Asset Swaps conducted in accordance
with Section 7.02(d)(ii)(D)); provided that the amount of any such reserves may
be increased, in the sole discretion of the Agent in the exercise of its
reasonable business judgment based on the lending and reserve practices of the
Agent generally, to the extent that a Collateral Agent is granted a perfected,
first priority Lien on additional assets of SCS of at least equivalent value to
those SCS Collateral Fixed Assets that have been sold or otherwise been
disposed; provided further that, if SCS Collateral Fixed Assets constituting
more than three retail stores in any one transaction or six retail stores in any
Fiscal Year have been sold, transferred or closed since the Effective Date and
not replaced in accordance with Sections 7.02(d)(ii)(D), (H) and (I) with retail
stores of reasonably equivalent value (as determined by the Agent) and in which
the Agent has a perfected, first priority security interest, then the Agent may
apply a reserve against the amount of the SCS Fixed Asset Credit, in an amount
to be determined by the Agent in its sole discretion and in the exercise of its
reasonable business judgment, in connection with each additional store that is
transferred, sold or closed as permitted hereunder.
"SCS Interest" means all of the membership interests of SCS and all other
rights under the organizational documents of SCS relating thereto.
- 27 -
"SCS Mortgages" means each "Mortgage," "Deed of Trust" or "Deed to Secure
Debt," in form and substance satisfactory to the Agent, securing the Obligations
and executed and delivered to a Collateral Agent by SCS, as the same may be
amended or otherwise modified from time to time.
"SCS Preference Right" means the right of first refusal accorded to
7-Eleven, Inc. (f/k/a The Southland Corporation) pursuant to the organizational
documents of SCS upon certain proposed sales or assignments or other changes of
control of membership interests in SCS.
"Security Agreement" means the Amended and Restated Security Agreement,
dated as of August 8, 2000, as amended, restated and consolidated on the date
hereof, by the Borrower and each of the Companies in favor of the WC Collateral
Agent, substantially in the form of Exhibit B hereto, as the same may be
amended, supplemented or otherwise modified from time to time.
"Security Documents" means, collectively, the Security Agreement, the
Pledge Agreement, each Mortgage and each Lease Assignment executed and delivered
by a Company, and all Uniform Commercial Code financing statements required by
this Agreement and the Security Documents to be filed with respect to the
security interests in personal property and fixtures created pursuant to such
agreements, and all other documents and agreements executed and delivered by the
Companies in connection with any of the foregoing documents.
"Settlement Period" has the meaning specified therefor in Section 2.05(e)
hereof.
"7-Eleven" means 7-Eleven, Inc., a Texas corporation, formerly known as
The Southland Corporation.
"7-Eleven Consent" means the Consent Agreement, executed and delivered by
7-Eleven to the FA Collateral Agent on July 31, 2002, as the same may be amended
or otherwise modified from time to time.
"7-Eleven License" means the license granted by 7-Eleven to SCS pursuant
to the 7-Eleven License Agreement in respect of, among other things, the trade
name and trademark "7-Eleven".
"7-Eleven License Agreement" means the Area License Agreement, dated June
2, 1993, between Permian Basin Investments, Inc. and 7-Eleven, as amended by,
and as assigned to SCS pursuant to, the Amendment to Area License Agreement and
Consent to Assignment, dated December 20, 1996, as the same may be further
amended or otherwise modified from time to time.
"Solvent" means, with respect to any Person on a particular date, that on
such date (a) the fair value of the property of such Person is not less than the
total amount of its liabilities (including, without limitation, liabilities on
all claims, whether or not reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured) of such Person, (b) the present fair salable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its existing debts as they become absolute
and matured, (c) such Person is able to
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realize upon its assets and pay its debts and other liabilities, contingent
obligations and other commitments as they mature in the normal course of
business, (d) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person's ability to pay as such debts and
liabilities mature, and (e) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which
such Person's property would constitute unreasonably small capital.
"Standard & Poor's" means Standard & Poor's Ratings Services, a division
of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and any successor thereto.
"Subordinated Investor Loan" means a loan made by an Investor to a
Company, the payment of which has been subordinated in writing to the
Obligations under terms and conditions satisfactory to the Agent.
"Subordinated Investor Note" means a promissory note evidencing the
repayment obligation of any Subordinated Investor Loan and which is in form and
substance satisfactory to the Agent.
"Subordination Agreements" means (i) the Subordination Agreement dated
August 8, 2000, as amended on May 4, 2001, among Alon Israel, Alon Israel Energy
Ltd., Rosebud Medical Ltd., the Parent and Alon Capital in favor of the
Collateral Agents, subordinating the Subordinated Investor Loans to the
Obligations and (ii) the Subordination Agreement dated as of August 21, 2002,
among the Parent and Alon Israel in favor of the Collateral Agents,
subordinating certain other Subordinated Investor Loans to the Obligations, as
each of the same may be amended or otherwise modified from time to time.
"Subsidiary" means, with respect to any Person at any date, any
corporation, limited or general partnership, limited liability company, trust,
association or other entity (i) the accounts of which would be consolidated with
those of such Person in such Person's consolidated financial statements if such
financial statements were prepared in accordance with GAAP or (ii) of which more
than 50% of (A) the outstanding Capital Stock having (in the absence of
contingencies) ordinary voting power to elect a majority of the board of
directors of such corporation, (B) the interest in the capital or profits of
such partnership or limited liability company or (C) the beneficial interest in
such trust or estate is, at the time of determination, owned or controlled
directly or indirectly through one or more intermediaries, by such Person.
"Taxes" shall have the meaning given to that term in Section 2.12 hereof.
"Term Debt Service Reserve L/C" means the Letter of Credit issued in favor
of CSFB to meet the Debt Service Support Requirement.
"Terminals" means the real property interests described in Schedule H
hereto and any other terminal now or hereafter owned or leased by any Company.
"Termination Date" means December 31, 2006.
"Termination Event" means (i) a Reportable Event with respect to any
Employee Plan, (ii) any event that causes the Borrower or any of its ERISA
Affiliates to incur liability
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under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or
4212 of ERISA or Section 4971 or 4975 of the Internal Revenue Code, (iii) the
filing of a notice of intent to terminate an Employee Plan under Section 4041 of
ERISA, (iv) the institution of proceedings by the Pension Benefit Guaranty
Corporation to terminate an Employee Plan, or (v) any other event or condition
that would constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Employee Plan.
"Term Loan Agent" means CSFB acting through its Cayman Islands branch, or
any successor or replacement agent under the Term Loan Agreement.
"Term Loan Agreement" means the Amended and Restated Credit Agreement,
dated as of January 14, 2004, among Alon USA, Inc., as borrower, the lenders
party thereto and Credit Suisse First Boston, as administrative agent, as the
same may be further amended or otherwise modified from time to time in
accordance with Section 7.02(b)(xvi).
"Term Loan Credit Basket" means an amount equal to (a) the lesser of (i)
$27,500,000, and (ii) proceeds of the Term Loan used to repay the Revolving
Loans on the Effective Date, less, (b) the sum of (i) the aggregate amount of
any expenditures in connection with all Permitted Acquisitions, plus (ii) any
amounts paid by the Borrower to Alon USA (directly or indirectly) during the
period from the Effective Date through December 31, 2004 in accordance with
Section 7.02(i)(x).
"Term Loan Documents" means the "Loan Documents", as such term is defined
in the Term Loan Agreement as in effect on the Effective Date.
"Term Loan Lenders" means the financial institutions and other lenders
from time to time party to the Term Loan Agreement as "Lenders" thereunder.
"Term Loans" means the term loans made by the Term Loan Lenders to Alon
USA in an aggregate principal amount not to exceed $100,000,000 pursuant to the
Term Loan Agreement.
"Title Company" means a nationally recognized title insurance company
reasonably acceptable to the Agent.
"Total Commitment" means the sum of the amounts of the Lenders' Revolving
Credit Commitments.
"Transaction Documents" means the Loan Documents, the License Agreements
and the Lease Documents.
"Warrant" means each Common Stock Purchase Warrant dated August 8, 2000,
issued by Alon Assets and Alon Operating to Bank Leumi and IDB, as the same may
be amended, restated or otherwise modified from time to time.
"Warrant Purchase Agreement" means the Purchase Agreement by and between
Alon USA and Bank Leumi, with respect to the purchase by Alon USA of the
Warrants owned by Bank Leumi for the Warrant Purchase Price.
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"Warrant Purchase Documents" means the Warrant Purchase Agreement and all
other agreements, instruments and documents executed and delivered by any of
Bank Leumi, Alon USA or the Parent in connection with the purchase by Alon USA
of the Warrants owned by Bank Leumi.
"Warrant Purchase Price" means $1,471,470.02, of which (i) $1,213,769.01
was paid to Bank Leumi prior to the date hereof, and (ii) $257,701.01 plus
accrued and unpaid interest must be paid to Bank Leumi on June 30, 2004.
"WC Collateral Agent" means IDB, or any successor or replacement agent in
its capacity as a collateral agent for the Lenders.
"West Texas Sour Crude Oil Benchmark" means (i) to the extent that West
Texas Sour Crude Oil has a market value (determined in accordance with GAAP) of
$38.00 per barrel or less, the value of the Borrower's Eligible Inventory shall
be determined at market value in accordance with GAAP, provided that the Agent
may ▇▇▇▇ to market the Inventory at any time, in its discretion, and (ii) if as
of the date of any Borrowing Base Certificate West Texas Sour Crude Oil has a
market value (determined in accordance with GAAP) of greater than $38.00, then
(A) the value of the Borrower's Eligible Inventory shall be multiplied by the
percentage obtained by dividing (1) $38.00, by (2) the actual market value of
West Texas Sour Crude Oil as of such date and (B) the value of the Borrower's
Eligible Inventory shall be reduced to such amount.
Section 1.02 Accounting and Other Terms. Unless otherwise expressly
provided herein, each accounting term used herein shall have the meaning given
it under GAAP applied on a basis consistent with those used in preparing the
Financial Statements. All terms used in this Agreement which are defined in
Article 9 of the Uniform Commercial Code in effect in the State of New York on
the date hereof and which are not otherwise defined herein shall have the same
meanings herein as set forth therein. The terms "herein" and "hereof" shall
refer to this Agreement as a whole and not to any particular portion, unless
stated otherwise. In the event of any inconsistency between the terms and
provisions of this Agreement and the terms and provisions of any Security
Document, the terms and provisions of this Agreement shall control, provided
that nothing herein shall be deemed to affect the Liens granted under any
Security Document or the perfection thereof.
Section 1.03 Time References. Unless otherwise indicated herein, all
references to time of day refer to Eastern standard time or Eastern daylight
saving time, as in effect in New York City on such day. For purposes of the
computation of a period of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding", provided, however, that with respect to a computation
of fees or interest payable to the Agent, the Lenders or the L/C Issuer, such
period shall in any event consist of at least one full day.
Article II
THE REVOLVING CREDIT LOANS
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Section 2.01 Revolving Credit Commitments.
(a) Each Revolving Lender has made "Revolving Credit Loans" (as
defined in the Existing Revolving Credit Agreement) to the Borrower (i) prior to
the Effective Date, which must be repaid in full on the Effective Date, and upon
the effectiveness of this Agreement, any such amount repaid may be reborrowed
and such "Revolving Credit Loan" shall automatically be deemed to be a
"Revolving Credit Loan" to the Borrower by such Lender under this Agreement, and
(ii) subject to the terms and conditions and relying upon the representations
and warranties set forth herein, each Lender severally agrees to continue to
make Revolving Credit Loans to the Borrower at any time and from time to time
until the Business Day preceding the Final Maturity Date, or until the earlier
reduction of its Revolving Credit Commitment to zero in accordance with the
terms hereof, in an aggregate principal amount of Revolving Credit Loans at any
time outstanding not to exceed the amount of such Lender's Revolving Credit
Commitment.
(b) Notwithstanding the foregoing, the aggregate principal amount of
the Revolving Credit Loans outstanding at any time shall not exceed the lowest
of (i) the difference between (A) Total Commitment and (B) the aggregate Letter
of Credit Obligations, (ii) the difference between (A) the then current
Borrowing Base, and (B) the aggregate Letter of Credit Obligations and (iii) the
Revolving Credit Loan Subfacility.
(c) Within the foregoing limits, the Borrower may borrow, repay and
reborrow Revolving Credit Loans, on or after the Effective Date and prior to the
Final Maturity Date, subject to the terms, provisions and limitations set forth
herein.
Section 2.02 Revolving Credit Loans. Except as otherwise provided in
Section 2.05, Revolving Credit Loans shall be made ratably by the Lenders in
accordance with their respective Revolving Credit Commitments.
Section 2.03 Making the Revolving Credit Loans. The Borrower shall give
the Agent prior telephone notice (which notice, if requested by the Agent, must
be promptly confirmed in writing in substantially the form of Exhibit E hereto
(a "Notice of Borrowing")) not later than 12:00 noon (New York City time) three
Business Days prior to such proposed borrowing, and the Agent shall promptly
deliver such Notice of Borrowing to each Lender. Such Notice of Borrowing shall
be irrevocable and shall specify the principal amount of the proposed borrowing
(which, in the case of a Eurodollar Loan, must be in a minimum amount of
$1,000,000 and in multiples of $500,000 in excess thereof), whether such
Revolving Credit Loan is requested to be a Base Rate Loan or a Eurodollar Loan
and, in the case of a Eurodollar Loan, the initial Interest Period for such
Eurodollar Loan, the use of the proceeds of such proposed Revolving Credit Loan,
and the proposed borrowing date, which must be a Business Day, and the Borrower
shall be bound to make a borrowing in accordance therewith. The Agent may act
without liability upon the basis of written, telecopy or telephone notice
believed by the Agent in good faith to be from the Borrower (or from any officer
thereof designated in writing to the Agent), and the Borrower hereby waives the
right to dispute the Agent's record of the terms of any such telephonic Notice
of Borrowing.
Section 2.04 Revolving Credit Notes; Repayment of Revolving Credit Loans.
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(a) Each Revolving Credit Loan made by a Lender shall be evidenced
by a single Revolving Credit Note, duly executed by the Borrower, dated the
Effective Date, and delivered to and made payable to the order of such Lender in
a principal amount equal to its Revolving Credit Commitment on such date.
(b) The outstanding principal balance of each Revolving Credit Loan
shall be due and payable on the Final Maturity Date.
Section 2.05 Funding and Settlement Procedures.
(a) Except as otherwise provided in this Section 2.05, all Revolving
Credit Loans under this Agreement shall be made by the Lenders simultaneously
and proportionately according to their Pro Rata Shares of the Total Commitment,
it being understood that no Lender shall be responsible for any default by any
other Lender in such other Lender's obligation to make a Revolving Credit Loan
requested hereunder nor shall the Revolving Credit Commitment of any Lender to
make the Revolving Credit Loan requested be increased or decreased as a result
of the default by any other Lender in such other Lender's obligation to make a
Revolving Credit Loan requested hereunder.
(b) Notwithstanding any other provision of this Agreement, in order
to reduce the number of fund transfers among the Borrower, the Lenders and the
Agent, the Borrower, the Lenders and the Agent agree that the Agent may, but
shall not be obligated to, and the Borrower and the Lenders hereby irrevocably
authorize the Agent to, fund, on behalf of the Lenders, Revolving Credit Loans
pursuant to Sections 2.02 and 2.03, subject to the procedures for settlement set
forth in subsection 2.05(e); provided, however, that (A) the Agent shall in no
event fund such Revolving Credit Loan if the Agent shall have received written
notice from the Required Lenders on the Business Day prior to the date of the
proposed Revolving Credit Loan that one or more of the conditions precedent
contained in Section 5.02 hereof will not be satisfied on the date of the
proposed Revolving Credit Loan and (B) the Agent shall not otherwise be required
to determine that, or take notice whether, the conditions precedent in Section
5.02 have been satisfied. If the Agent elects not to fund a requested Revolving
Credit Loan on behalf of the Lenders, promptly after receipt of a Notice of
Borrowing, the Agent shall so notify each Lender. If the Agent notifies the
Lenders that it will not fund a requested Revolving Credit Loan on behalf of the
Lenders, each Lender shall make its Pro Rata Share of the Revolving Credit Loan
available to the Agent, in immediately available funds, at the Payment Office no
later than 2:00 p.m. (New York City time) on the date of the proposed Revolving
Credit Loan. The Agent will make the proceeds of such Revolving Credit Loans
available to the Borrower on the day of the proposed Revolving Credit Loan by
causing an amount, in immediately available funds, equal to the proceeds of all
such Revolving Credit Loans received by the Agent at the Payment Office or the
amount funded by the Agent on behalf of the Lenders to be deposited in an
account designated by the Borrower.
(c) If the Agent has notified the Lenders that the Agent will not
fund a particular Revolving Credit Loan pursuant to subsection 2.05(b) on behalf
of the Lenders, the Agent may assume that such Lender has made such amount
available to the Agent on such day and the Agent, in its sole and absolute
discretion, may, but shall not be obligated to, cause a corresponding amount to
be made available to the Borrower on such day. If, in such case, the
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Agent makes such corresponding amount available to the Borrower and such
corresponding amount is not in fact made available to the Agent by such Lender,
such Lender and the Borrower severally agree to repay to the Agent forthwith on
demand such corresponding amount together with interest thereon for each day
from the date such amount is made available to a Borrower until the date such
amount is repaid to the Agent, at (A) in the case of the Borrower, a rate per
annum equal to the higher of the Federal Funds Rate and the interest rate
applicable thereto pursuant to Section 2.06 and (B) in the case of such Lender,
at the Federal Funds Rate for three Business Days and thereafter at the Prime
Rate. If such Lender shall repay to the Agent such corresponding amount, such
amount so repaid shall constitute such Lender's Pro Rata Share of such Revolving
Credit Loan.
(d) Nothing in this Section 2.05 shall be deemed to relieve any
Lender from its obligation to fulfill its Revolving Credit Commitment hereunder
or to prejudice any rights that the Agent or the Borrower may have against any
Lender as a result of any default by such Lender hereunder.
(e) With respect to all periods for which the Agent, on behalf of
the Lenders, has funded Revolving Credit Loans pursuant to subsection 2.05(a),
on the first Business Day after the last day of each week, or such shorter
period as the Agent may from time to time select (any such week or shorter
period being herein called a "Settlement Period"), the Agent shall notify each
Lender of the unpaid principal amount of the Revolving Credit Loans outstanding
as of the last day of the Settlement Period. In the event that such amount is
greater than the unpaid principal amount of the Revolving Credit Loans
outstanding as of the last day of the immediately preceding Settlement Period
(or, if there has been no preceding Settlement Period, the amount of the
Revolving Credit Loans made on the date of such Lender's initial funding), each
Lender shall promptly make available to the Agent such Lender's Pro Rata Share
of the difference in immediately available funds. In the event that such amount
is less than such unpaid principal amount, the Agent shall promptly pay over to
each other Lender such Lender's Pro Rata Share of the difference in immediately
available funds. In addition, if the Agent shall so request at any time when a
Default or an Event of Default shall have occurred and be continuing, or any
other event shall have occurred as a result of which the Agent shall determine
that it is desirable to present claims against the Borrower for repayment, each
Lender shall promptly remit to the Agent or, as the case may be, the Agent shall
promptly remit to each Lender, sufficient funds to adjust the interests of the
Lenders in the then outstanding Revolving Credit Loans to such an extent that,
after giving effect to such adjustment, each Lender's interest in the then
outstanding Revolving Credit Loans will be equal to its Pro Rata Share thereof.
The obligations of the Agent and each Lender under this subsection 2.05(e) shall
be absolute and unconditional. Each Lender shall only be entitled to receive
interest on its Pro Rata Share of the Revolving Credit Loans which have been
funded by such Lender.
(f) In the event that any Lender fails to make any payment required
to be made by it pursuant to subsection 2.05(e), the Agent shall be entitled to
recover such corresponding amount on demand from such Lender together with
interest thereon, for each day from the date such payment was due until the date
such amount is paid to the Agent, at the Federal Funds Rate for three Business
Days and thereafter at the Prime Rate. During the period in which such Lender
has not paid such corresponding amount to the Agent, notwithstanding anything to
the contrary contained in this Agreement or any other Loan Document, the amount
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so advanced by the Agent to the Borrower shall, for all purposes hereof, be a
Revolving Credit Loan made by the Agent for its own account. Upon any such
failure by a Lender to pay the Agent, the Agent shall promptly thereafter notify
the Borrower of such failure and the Borrower shall immediately pay such
corresponding amount to the Agent for its own account.
Section 2.06 Interest.
(a) Revolving Credit Loans. Each Revolving Credit Loan which is a
Eurodollar Loan shall bear interest on the principal amount thereof from time to
time outstanding from the date of such Revolving Credit Loan until such
principal amount becomes due, at a rate per annum equal to the Eurodollar Rate
for the Interest Period in effect for such Revolving Credit Loan plus 2.50%.
Each Revolving Credit Loan which is a Base Rate Loan shall bear interest on the
principal amount thereof from time to time outstanding from the date of such
Revolving Credit Loan until such principal amount becomes due, at a rate per
annum equal to the Base Rate.
(b) Default Interest. Upon the occurrence and during the continuance
of an Event of Default described in Section 10.01 hereof, all outstanding
principal of the Revolving Credit Loans and all outstanding Reimbursement
Obligations, all accrued interest (to the extent permitted by law) which is not
paid when due and all other outstanding Obligations shall bear interest until
such time as no such Event of Default exists at a fluctuating interest rate per
annum equal at all times to the Post-Default Rate.
(c) Interest Payment. Interest on each Eurodollar Loan shall be
payable in arrears on the last day of each Interest Period of such Eurodollar
Loan and, in the case of any Eurodollar Loan with an Interest Period longer than
three months, the day that interest would have been paid if such Eurodollar Loan
had an Interest Period of three months. Interest on each Base Rate Loan shall be
payable quarterly, in arrears, on the first day of each January, April, July and
October, commencing on the first day of the first such month following the
making of such Base Rate Loan, and at maturity (whether upon demand, by
acceleration or otherwise). Interest at the Post-Default Rate shall be payable
on demand. The Borrower hereby authorizes the Agent to, and the Agent may, from
time to time, charge the Loan Account pursuant to Section 4.02 hereof with the
amount of any interest payment due hereunder.
(d) General. All interest shall be computed on the basis of a year
of 360 days for the actual number of days, including the first day but excluding
the last day, elapsed.
Section 2.07 Reduction of Revolving Credit Commitment; Prepayment of
Revolving Credit Loans.
(a) Except as set forth in Section 9.08(d), the Total Commitment
shall not be reduced without the prior written consent of the Borrower, the
Agent and Bank Leumi. Any reductions of the Total Commitment which are so
consented to shall be irrevocable and may not be reinstated. Each such approved
reduction shall reduce the Revolving Credit Commitment of each Lender
proportionately in accordance with its Pro Rata Share.
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(b) Subject to the terms and conditions contained in this Section
2.07, Section 2.10 and elsewhere in this Agreement, the Borrower shall have the
right to prepay, in whole or in part, the Revolving Credit Loans.
(c) (i) If at any time the Borrowing Base is less than the sum of
the aggregate principal amount of all outstanding Revolving Credit Loans plus
the outstanding amount of all Letter of Credit Obligations, the Borrower will
(A) immediately give notice of such occurrence to the Agent and (B) prepay the
Revolving Credit Loans in an amount which will reduce the sum of the aggregate
principal amount of all outstanding Revolving Credit Loans plus Letter of Credit
Obligations to an amount less than or equal to the then current Borrowing Base.
If at any time after the Borrower has complied with the first sentence of this
Section 2.07(c)(i), the aggregate amount of Letter of Credit Obligations is
greater than the then current Borrowing Base, the Borrower shall provide cash
collateral to the Agent in the amount of such excess, which cash collateral
shall be deposited in an interest bearing account maintained by the Agent and,
provided that no Event of Default shall have occurred and be continuing,
returned to the Borrower at such time as (x) the aggregate Letter of Credit
Obligations plus (y) the aggregate principal amount of all outstanding Revolving
Credit Loans no longer exceeds the then current Borrowing Base.
(i) If at any time the aggregate principal amount of all
outstanding Revolving Credit Loans exceeds the Revolving Credit Loan
Subfacility Limit, the Borrower will (A) immediately give notice of such
occurrence to the Agent and (B) prepay the Revolving Credit Loans in an
amount which will reduce the sum of the aggregate principal amount of all
outstanding Revolving Credit Loans to an amount less than or equal to the
Revolving Credit Loan Subfacility.
(d) Immediately upon the receipt by any Loan Party, any Company or
any of its Subsidiaries (other than the GECC Entities) of any Net Proceeds from
the issuance, sale, assignment, transfer or other disposition of any Capital
Stock, debt securities or assets of a Company or any of its Subsidiaries (other
than Net Proceeds from (A) the issuance, sale, assignment, transfer or other
disposition of any Capital Stock, debt securities or assets of SCS or any of its
Subsidiaries, and (B) the sale of Inventory in the ordinary course of business
and other than with respect to property subject to a prior Permitted Lien) the
Borrower shall make a prepayment of the Revolving Credit Loans in an amount
equal to the amount of such Net Proceeds, except to the extent the Borrower or
any other Company is obligated to pay such Net Proceeds of Fixed Assets, Capital
Stock or debt securities to the Term Loan Agent in accordance with Sections
2.12(a), (b) or (c) of the Term Loan Agreement (as in effect on the date
hereof). Notwithstanding the foregoing, (i) the Borrower shall not be required
to prepay the Revolving Credit Loans in the case of intercompany Indebtedness
between the Loan Parties permitted by Sections 7.02(b) and 7.02(f) hereof and
(ii) Alon USA may, as to any amounts that would constitute Net Proceeds of the
sale of any Fixed Assets (other than SCS Assets), deliver to the Agent, at the
time of receipt of such amounts, a certificate of an officer stating that it
intends to reinvest such amounts in Growth Assets within 360 days of receipt of
such amounts, and such amounts shall be deemed not to constitute Net Proceeds
if, so long as and to the extent that (A) no Default or Event of Default shall
have occurred and be continuing at the time of delivery of such certificate or
at the proposed time of the application of such amounts, (B) such amounts may,
pending their use to acquire such productive assets, be deposited with and held
by the Term Loan Agent in an account over which the Term
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Loan Agent shall have sole control and exclusive rights of withdrawal subject to
and consistent with the terms of the Intercreditor Agreement, and which shall be
subject to a perfected security interest in favor of a Collateral Agent under
the Security Documents (the "Asset Reinvestment Account"), (C) the aggregate
amount held pending reinvestment at any time pursuant to this sentence shall not
exceed $10,000,000 and (D) such amounts shall in fact be reinvested in Growth
Assets within such 360-day period (it being agreed that any amounts as to which
any of the foregoing requirements shall at any time not be satisfied shall
constitute Net Proceeds and be applied to prepay Revolving Credit Loans to the
extent required by this Section 2.07.
(e) Immediately upon the receipt by SCS or any of its Subsidiaries
of any Net Proceeds from the issuance, sale, assignment, transfer or other
disposition of any Capital Stock, debt securities or assets (other than (A) Net
Proceeds from the sale or transfer by SCS of SCS Collateral Fixed Assets to the
extent the Net Proceeds thereof are applied in accordance with Section
7.02(d)(ii)(H) hereof, and (B) Net Proceeds from the sale of Inventory in the
ordinary course of business), SCS shall make a prepayment of the Revolving
Credit Loans in an amount equal to the amount of such Net Proceeds.
Notwithstanding the foregoing, SCS shall not be required to prepay the Revolving
Credit Loans in the case of intercompany Indebtedness between the Loan Parties
permitted by Sections 7.02(b) and 7.02(f).
(f) Immediately upon the receipt by any Company of any property
damage insurance proceeds or condemnation proceeds with respect to the assets
and properties of such Company (other than with respect to assets and properties
subject to a prior Permitted Lien), the Borrower shall prepay the Revolving
Credit Loans in an amount equal to the property damage insurance proceeds or
condemnation proceeds received by such Company, except to the extent that the
Borrower or any other Company is obligated to pay such insurance proceeds or
condemnation proceeds with respect to Fixed Assets to the Term Loan Agent in
accordance with Section 2.12(e) of the Term Loan Agreement (as in effect on the
date hereof). Notwithstanding the foregoing, such prepayment shall not be
required (i) in the case of receipt by the Companies (other than SCS and its
Subsidiaries) of insurance proceeds or condemnation proceeds of $3,000,000 or
less in the aggregate and (ii) in the case of receipt by SCS and its
Subsidiaries of insurance proceeds or condemnation proceeds of $500,000 or less
in the aggregate, in each case, to the extent such insurance proceeds or
condemnation proceeds are used to purchase replacement assets or otherwise to
rebuild, restore, repair or complete such assets within 60 days after the
receipt thereof, provided that no Default or Event of Default has occurred and
is continuing and provided further that the casualty event or taking for which
such insurance proceeds or condemnation proceeds (as applicable) were paid has
not had a Material Adverse Effect.
(g) Any prepayment made pursuant to this Section 2.07 shall be (i)
accompanied by accrued interest on the principal amount being prepaid to the
date of prepayment and (ii) subject to the terms of the Intercreditor Agreement.
(h) All funds deposited on a Business Day into the Agent Account or
directly to the Payment Office or any other account designated by the Agent to
the Borrower, shall be applied by the Agent to the payment, in whole or in part,
to the outstanding Revolving Credit Loans as of such Business Day, subject to
Section 4.02 hereof.
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(i) Except as otherwise expressly provided in this Section 2.07,
payments with respect to any paragraph of this Section 2.07 are in addition to
payments made or required to be made under any other paragraph of this Section
2.07. The provisions of this Section 2.07 shall not constitute a waiver of or a
consent to any departure from any provision in any Loan Document, including,
without limitation, any provision that prohibits or otherwise restricts the
sale, transfer or other disposition of any real or personal property of a Loan
Party, the incurrence of Indebtedness or otherwise.
Section 2.08 Fees.
(a) Unused Line Fee. From and after the Existing Effective Date
until the Final Maturity Date, the Borrower shall pay to the Agent for the
account of the Lenders in accordance with the Lenders' respective Pro Rata
Shares and in immediately available funds, an unused line fee (the "Unused Line
Fee") accruing at the rate of one-half of one percent (0.50%) per annum, on the
excess, if any, of the Total Commitment over the sum of the Revolving Credit
Loans and Letter of Credit Obligations outstanding from time to time. The Unused
Line Fees shall be payable quarterly in arrears on the first day of each
January, April, July and October, commencing October 1, 2000 and shall be
non-refundable.
(b) Agent's Fee. On or prior to the Existing Effective Date, the
Borrower has paid to the Agent, for its own account, a fee (the "Agent's Fee")
equal to $162,500 (after crediting any prior payments received by the Agent in
respect of the Agent's Fee). The Agent's Fee is non-refundable.
(c) Letter of Credit Fees. From and after the Existing Effective
Date until all Letters of Credit have been terminated, the Borrower shall pay to
the Agent the Letter of Credit Fees set forth in Section 3.03(b) hereof.
(d) Field Examination Fee. The Borrower shall pay the reasonable out
of pocket fees, costs, expenses and charges of auditors, appraisers and
professionals employed or retained by the Agent to review, inspect, audit or
monitor any of the Collateral prior to the Effective Date and from time to time
thereafter.
(e) Closing Fee. On or prior to the Effective Date, the Borrower
shall pay to the Agent, for the account of the Lenders, a fee (the "Closing
Fee") equal to $575,000. The Closing Fee shall be non-refundable.
(f) Early Termination Fee. If for any reason at any time before
December 1, 2005 the Total Commitment shall be terminated by the Borrower, the
Borrower shall immediately pay a fee to the Agent for the account of the
Lenders, equal to (i) $1,420,000, if such termination occurs on or before
December 1, 2004, and (ii) $710,000, if such termination occurs after December
1, 2004 and before December 1, 2005.
Section 2.09 Eurodollar Rate Not Determinable; Illegality or Impropriety.
(a) In the event, and on each occasion, that on or before the day on
which the Eurodollar Rate is to be determined for a borrowing that is to include
Eurodollar Loans, the Agent has determined in good faith that, or has been
advised by the Required Lenders
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that, (i) the Eurodollar Rate cannot be determined for any reason, (ii) the
Eurodollar Rate will not adequately and fairly reflect the cost of maintaining
Eurodollar Loans or (iii) Dollar deposits in the principal amount of the
applicable Eurodollar Loans are not available in the Interbank Market, the Agent
shall, as soon as practicable thereafter, give written notice of such
determination to the Borrower and the Lenders. In the event of any such
determination, any request by the Borrower for a Eurodollar Loan pursuant to
Section 2.03 shall, until, in the case of such a determination by the Required
Lenders, the Agent has been advised by the Required Lenders and the Agent has so
advised the Borrower that, or in the case of a determination by the Agent, the
Agent has advised the Borrower and the other Lenders that, the circumstances
giving rise to such notice no longer exist, be deemed to be a request for a Base
Rate Loan. Each determination by the Agent and/or the Required Lenders hereunder
shall be conclusive and binding absent manifest error.
(b) In the event that it shall be unlawful or improper for any
Lender to make, maintain or fund any Eurodollar Loan as contemplated by this
Agreement, then such Lender shall forthwith give notice thereof to the Agent and
the Borrower describing such illegality or impropriety in reasonable detail.
Effective immediately upon the giving of such notice, the obligation of such
Lender to make Eurodollar Loans shall be suspended for the duration of such
illegality or impropriety and, if and when such illegality or impropriety ceases
to exist, such suspension shall cease, and such Lender shall notify the Agent
and the Borrower. If any such change shall make it unlawful or improper for any
Lender to maintain any outstanding Eurodollar Loan as a Eurodollar Loan, such
Lender shall, upon the happening of such event, notify the Agent and the
Borrower, and the Borrower shall immediately, or if permitted by applicable law,
rule, regulation, order, decree, interpretation, request or directive, at the
end of the then current Interest Period for such Eurodollar Loan, convert each
such Eurodollar Loan into a Base Rate Loan.
Section 2.10 Indemnity.
(a) The Borrower hereby indemnifies each Lender and each Lender's
Affiliate against any loss or expense that such Lender or such Affiliate
sustains or incurs (including, without limitation, any loss or expense incurred
by reason of the liquidation or reemployment of deposits or other funds acquired
by such Lender or such Affiliate to fund or maintain any Eurodollar Loan, and
including loss of anticipated profits) as a consequence of (i) any failure by
the Borrower to fulfill on the date of any borrowing hereunder the applicable
conditions set forth in Article V, (ii) any failure by the Borrower to borrow
any Eurodollar Loan hereunder, to convert any Base Rate Loan into a Eurodollar
Loan or to continue a Eurodollar Loan as such after notice of such borrowing,
conversion or continuation has been given pursuant to Section 2.03 or Section
2.11 hereof, (iii) any payment, prepayment (mandatory or optional) or conversion
of a Eurodollar Loan required by any provision of this Agreement or otherwise
made on a date other than the last day of the Interest Period applicable thereto
(including, without limitation, any transfer of Eurodollar Loans required by the
Borrower pursuant to Section 2.10(b) hereof or otherwise), (iv) any default in
payment or prepayment of the principal amount of any Eurodollar Loan or any part
thereof or interest accrued thereon, as and when due and payable (at the due
date thereof, by notice of prepayment or otherwise), or (v) the occurrence of
any Event of Default, including, in each such case, any loss (including, without
limitation, loss of anticipated profits) or reasonable expense sustained or
incurred in liquidating or employing
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deposits from third parties acquired to effect or maintain such Revolving Credit
Loan or any part thereof as a Eurodollar Loan, provided that the indemnity made
under this Section 2.10 shall be limited to losses and expenses incurred on or
prior to the end of the relevant Interest Period. Such loss or reasonable
expense shall include but not be limited to an amount equal to the excess, if
any, as reasonably determined by such Lender or such Affiliate, of (i) the
amount of interest that would otherwise have accrued on the principal amount so
prepaid or converted or continued or not borrowed or converted or continued for
the period from the date of such prepayment, conversion or continuation (or
failure to borrow, convert or continue) to the last day of the then current
Interest Period for such Revolving Credit Loan at the applicable rate of
interest for such Revolving Credit Loan provided for herein, less (ii) the
amount of interest that otherwise would have accrued on such principal amount
from the date of such prepayment, conversion or continuation (or failure to
borrow, convert or continue) until the end of the then current Interest Period
at a rate per annum equal to the Eurodollar Rate for such period (as reasonably
determined by the Agent). A certificate of any Lender setting forth in
reasonable detail any amount or amounts that such Lender or such Lender's
Affiliate is entitled to receive pursuant to this Section 2.10 and the basis for
the determination of such amount or amounts shall be delivered to the Borrower
and shall be conclusive and binding absent manifest error.
(b) Notwithstanding paragraph (a) of this Section 2.10, the Agent
will use reasonable efforts to minimize or reduce any such loss or expense
resulting from the mandatory prepayments required by Section 2.07 of this
Agreement by (i) applying all payments and prepayments to Revolving Credit Loans
bearing interest at the Base Rate prior to any application of payments to
Revolving Credit Loans bearing interest at the Eurodollar Rate and (ii) after
all Base Rate Loans have been paid in full, calculating any such loss or expense
based upon the net decrease in Eurodollar Loans on a day after giving effect to
all prepayments and all Revolving Credit Loans made on such day.
Section 2.11 Continuation and Conversion of Revolving Credit Loans.
(a) Subject to Section 2.09 hereof, the Borrower shall have the
right, at any time, on three (3) Business Days' prior irrevocable written or
telecopy notice to the Agent, to continue any Eurodollar Loan, or any portion
thereof, into a subsequent Interest Period or to convert any Base Rate Loan or
portion thereof into a Eurodollar Loan, or on one (1) Business Day's prior
irrevocable written or telecopy notice to the Agent, to convert any Eurodollar
Loan or portion thereof into a Base Rate Loan, subject to the following:
(i) no Eurodollar Loan may be continued as such and no Base
Rate Loan may be converted into a Eurodollar Loan, when any Event of
Default or Default shall have occurred and be continuing at such time;
(ii) in the case of a continuation of a Eurodollar Loan as
such or a conversion of a Base Rate Loan into a Eurodollar Loan, the
aggregate principal amount of such Eurodollar Loan shall not be less than
$1,000,000 and in multiples of $500,000 if in excess thereof;
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(iii) in the case of a conversion from a Eurodollar Loan
to a Base Rate Loan accrued interest on the Revolving Credit Loan (or
portion thereof) being converted shall be paid by the Borrower at the time
of conversion;
(iv) any portion of a Revolving Credit Loan maturing or
required to be repaid in less than one month may not be converted into or
continued as a Eurodollar Loan; and
(v) if any conversion of a Eurodollar Loan shall be
effected on a day other than the last day of an Interest Period, the
Borrower shall reimburse each Lender on demand for any loss incurred or to
be incurred by it in the reemployment of the funds released by such
conversion as provided in Section 2.10 hereof.
In the event that the Borrower shall not give notice to continue any Eurodollar
Loan into a subsequent Interest Period, such Revolving Credit Loan shall
automatically become a Base Rate Loan at the expiration of the then current
Interest Period, subject to the other provisions of this Agreement.
Section 2.12 Taxes.
(a) All payments made by the Borrower hereunder, under the
Revolving Credit Notes or under any other Loan Document shall be made without
set-off, counterclaim, deduction or other defense. All such payments shall be
made free and clear of and without deduction for any present or future income,
franchise, sales, use, excise, stamp or other taxes, levies, imposts,
deductions, charges, fees, withholdings, restrictions or conditions of any
nature now or hereafter imposed, levied, collected, withheld or assessed by any
jurisdiction (whether pursuant to United States Federal, state, local or foreign
law) or by any political subdivision or taxing authority thereof or therein, and
all interest, penalties or similar liabilities, excluding taxes on the net
income of, and branch profit taxes of, and franchise taxes imposed on, any
Lender, the Agent or the L/C Issuer imposed by the jurisdiction in which such
Lender, the Agent or the L/C Issuer is organized or any political subdivision
thereof or taxing authority thereof or any jurisdiction in which such Person's
principal office or relevant lending office is located or any political
subdivision thereof or taxing authority thereof (such nonexcluded taxes being
hereinafter collectively referred to as "Taxes"). If the Borrower is required by
law to deduct or to withhold any Taxes from or in respect of any amount payable
hereunder, (i) the amount so payable shall be increased to the extent necessary
so that after making all required deductions and withholdings (including Taxes
on amounts payable to the Lenders, the Agent or the L/C Issuer pursuant to this
sentence) the Lenders, the Agent or the L/C Issuer receive an amount equal to
the sum they would have received had no such deductions or withholdings been
made, (ii) the Borrower shall make such deductions or withholdings, and (iii)
the Borrower shall pay the full amount deducted or withheld to the relevant
taxation authority in accordance with applicable law; provided, however, that if
a Lender assigns its rights pursuant to Section 12.08 hereof and such assignment
would (but for this proviso) cause the assignee Lender, immediately after such
assignment, to be entitled to receive any greater payments under this Section
2.12 in respect of United States Federal, state, local or foreign withholding
taxes than would have been made but for such assignment, then such assignee
Lender shall not be entitled to receive any such greater payments than such
assigning Lender would have been entitled to receive with
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respect to the rights assigned if such assignment had not taken place unless (A)
such assignment had been at the request of, or with the consent of, the Borrower
or (B) an Event of Default has occurred and is continuing at the time of such
assignment. Whenever any Taxes are payable by the Borrower, as promptly as
possible thereafter, the Borrower shall send the Lenders, the L/C Issuer and the
Agent an official receipt (or, if an official receipt is not available, such
other documentation as shall be reasonably satisfactory to the Lenders, L/C
Issuer or the Agent, as the case may be) showing payment. In addition, the
Borrower agrees to pay any present or future taxes, charges or similar levies
which arise from any payment made hereunder or from the execution, delivery,
performance, recordation or filing of, or otherwise with respect to, this
Agreement, the Revolving Credit Notes, the Letters of Credit or any other Loan
Document, except as provided above with respect to taxes on the net income of,
and branch profit taxes of, and franchise taxes imposed on, any Lender, the
Agent or the L/C Issuer (such nonexcluded taxes being hereinafter collectively
referred to as "Other Taxes").
(b) The Borrower will indemnify the Lenders, the Agent and the
L/C Issuer for the amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 2.12) paid by any Lender, the Agent or the L/C Issuer
and any liability (including penalties, interest and expenses for nonpayment,
late payment or otherwise) arising therefrom or with respect thereto, whether or
not such Taxes or Other Taxes were correctly or legally asserted. This
indemnification shall be paid within 30 days from the date on which such Lender,
the Agent or such L/C Issuer makes written demand which demand shall identify
the nature and amount of Taxes or Other Taxes for which indemnification is being
sought and the basis of the claim.
(c) Each Lender that is organized in a jurisdiction other than
the United States, a State thereof or the District of Columbia hereby agrees
that:
(i) it shall, no later than the Effective Date (or, in
the case of a Lender which becomes a party hereto pursuant to Section
12.08 hereof after the Effective Date, the date upon which such Lender
becomes a party hereto) deliver to the Borrower and the Agent two
accurate, complete and signed originals of U.S. Internal Revenue Service
Form W-8BEN or Form W-8ECI or successor form, in each case indicating that
such Lender is on the date of delivery thereof entitled to receive
payments of principal and interest for the account of its lending office
under this Agreement free from withholding of United States Federal income
tax;
(ii) if at any time such Lender changes its lending
office or offices or selects an additional lending office it shall, at the
same time or reasonably promptly thereafter, deliver to the Borrower
through the Agent in replacement for, or in addition to, the forms
previously delivered by it hereunder, if such changed or additional
lending office is located in the United States, two accurate, complete and
signed originals of such Form W-8BEN, Form W-8ECI or successor form, in
each case indicating that such Lender is on the date of delivery thereof
entitled to receive payments of principal and interest for the account of
such changed or additional lending office under this Agreement free from
withholding of United States Federal income tax; and
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(iii) it shall, promptly upon the Borrower's reasonable
request to that effect, deliver to the Borrower such other forms or
similar documentation as may be required from time to time by any
applicable law, treaty, rule or regulation in order to establish such
Lender's tax status for withholding purposes.
(d) For any period with respect to which a Lender has failed
to provide the Borrower with the appropriate form described in Section 2.12(c)
(other than in the case where such Lender is not, or is no longer, legally
entitled to deliver such form), such Lender shall not be entitled to payment
from the Borrower without deduction pursuant to Section 2.12(a) or
indemnification by the Borrower pursuant to Section 2.12(b) to the extent that
such payment or indemnification obligation would have been reduced if the
applicable form had been delivered to the Borrower; provided, however, that
should such Lender become subject to Taxes because of its failure to deliver a
form required hereunder, the Borrower shall take such steps as the Lender shall
reasonably request to assist such Lender to recover such Taxes.
(e) If the Borrower fails to perform its obligations under
this Section 2.12, the Borrower shall indemnify the Lenders, the Agent and the
L/C Issuer for any taxes, interest or penalties that may become payable as a
result of any such failure.
(f) Any Lender that is organized in a jurisdiction other than
the United States, a State thereof or the District of Columbia claiming any
indemnity payment or additional amounts payable pursuant to this Section 2.12
shall use reasonable efforts (consistent with legal, regulatory and policy
considerations of such Lender) to file any certificate or document reasonably
requested in writing by the Borrower or to change the jurisdiction of its
applicable lending office if the making of such a filing or change would avoid
the need for or reduce the amount of any such indemnity payment or additional
amounts which may thereafter accrue and would not, in the sole and absolute
determination of such Lender, be otherwise disadvantageous to such Lender.
ARTICLE III
LETTERS OF CREDIT
Section 3.01 Letters of Credit.
(a) The L/C Issuer has established and issued, at the request
of and on behalf of the Borrower, "Letters of Credit" (as defined in the
Existing Revolving Credit Agreement) prior to the Effective Date, some of which
remain outstanding on the Effective Date (immediately prior to the effectiveness
of this Agreement). Upon the effectiveness of this Agreement, each such "Letter
of Credit" shall automatically be deemed to be a "Letter of Credit" issued by
the L/C Issuer on behalf of the Borrower under this Agreement. The Borrower has
requested the L/C Issuer to continue to establish and open, from time to time,
documentary and standby letters of credit, which shall not have expiration dates
that exceed 364 days (or such longer period as may be approved by the Agent)
from the date of issuance (the "Letters of Credit"), and the L/C Issuer has
agreed to do so, subject to the terms hereof and each Letter of Credit
Application (as hereinafter defined). The Borrower will be the account party for
each application for a Letter of Credit, which shall be substantially in the
form of Exhibit J hereto or
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on a computer transmission system approved by the L/C Issuer or such other
written form or written transmission system as may from time to time be approved
by the L/C Issuer, and shall be duly completed in a manner reasonably acceptable
to the L/C Issuer, together with such other certificates, agreements, documents
and other papers and information as the L/C Issuer may reasonably request (the
"Letter of Credit Application"). In the event of any conflict between the terms
of the Letter of Credit Application and this Agreement, unless otherwise
expressly provided herein, the terms of this Agreement shall control.
(b) The aggregate Letter of Credit Obligations shall not
exceed the lower of (i) the difference between (A) the Total Commitment and (B)
the aggregate principal amount of Revolving Credit Loans then outstanding and
(ii) the difference between (A) the aggregate Borrowing Base and (B) the
aggregate principal amount of the Revolving Credit Loans then outstanding. The
terms and conditions of all Letters of Credit and all changes or modifications
thereof by the Borrower and/or the L/C Issuer shall in all respects be subject
to the prior approval of the Agent in the reasonable exercise of its sole and
absolute discretion; provided, however, that (i) the expiry date of all Letters
of Credit shall be no later than fifteen days prior to the Final Maturity Date
unless, on or prior to fifteen days prior to the Final Maturity Date either (A)
such Letters of Credit shall be cash collateralized in an amount equal to 105%
of the face amount of such Letters of Credit by the deposit of cash in such
amount in an account under the sole and exclusive control of the Agent for the
benefit of the Agent and/or the L/C Issuer (the "Letter of Credit Collateral
Account") or (B) the Borrower shall provide the Agent and the Lenders with an
indemnification, in form and substance reasonably satisfactory to the Agent,
from a commercial bank or other financial institution acceptable to the Agent
for any Letter of Credit Obligations with respect to such Letters of Credit and
(ii) the Letters of Credit and all documentation in connection therewith shall
be in form and substance reasonably satisfactory to the Agent and the L/C
Issuer.
(c) The Agent shall have the right, without notice to the
Borrower, to charge the Loan Account with the amount of any and all
indebtedness, liabilities and obligations of any kind due and payable under this
Agreement (including Reimbursement Obligations, indemnification for breakage
costs, capital adequacy and reserve requirement charges due and payable under
this Agreement) incurred by the L/C Issuer with respect to a Letter of Credit.
Any amount charged to the Loan Account shall be deemed a Revolving Credit Loan
hereunder made by the Lenders to the Borrower, funded by the Agent on behalf of
the Lenders and subject to Section 2.05 of this Agreement. Any charges, fees,
commissions, costs and expenses charged by the L/C Issuer in connection with or
arising out of Letters of Credit or transactions relating thereto pursuant to
the application and agreement for letter of credit or other related agreements
or documents executed by the Borrower in connection with any such Letter of
Credit will be charged by the Agent to the Loan Account in full and, when
charged, shall be conclusive and binding on the Borrower absent manifest error.
Each of the Lenders and the Borrower agrees that the Agent shall have the right
to make such charges regardless of whether any Event of Default or Default shall
have occurred and be continuing or whether any of the conditions precedent in
Section 5.02 have been satisfied.
(d) The Borrower unconditionally indemnifies the Agent, the
L/C Issuer and each Lender and agrees to hold the Agent, the L/C Issuer and each
Lender harmless from any and all loss, claim or liability incurred by the Agent,
the L/C Issuer or any Lender
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arising from any transactions or occurrences relating to Letters of Credit, any
drafts or acceptances thereunder, the Collateral relating thereto, and all
Obligations in respect thereof, including any such loss or claim due to any
action taken by the L/C Issuer, other than for any such loss, claim or liability
arising out of the gross negligence or willful misconduct of the Agent, the L/C
Issuer or any Lender as determined by a final judgment of a court of competent
jurisdiction.
(e) None of the Agent, the Lenders and the L/C Issuer shall be
responsible for the existence, character, quality, quantity, condition, value or
delivery of the fuel, fuel by-products or other goods purporting to be
represented by any documents; any difference or variation in the character,
quality, quantity, condition, value or delivery of such goods from that
expressed in the documents; the validity, sufficiency or genuineness of any
documents or of any endorsements thereof even if such documents should in fact
prove to be in any or all respects invalid, insufficient, fraudulent or forged;
the time, place, manner or order in which shipment is made; partial or
incomplete shipments, or failure or omission to ship any or all of such goods
referred to in the Letters of Credit or documents; any deviation from
instructions, delay, default, or fraud by the shipper and/or anyone else in
connection with the Collateral or the shipping thereof; or any breach of
contract between the shipper or vendors and the Borrower. Furthermore, without
limiting any of the foregoing, none of the Agent, the L/C Issuer and the Lenders
shall be responsible for any act or omission with respect to or in connection
with any goods covered by any Letter of Credit.
(f) The Borrower agrees that any action taken by the Agent,
the L/C Issuer or any Lender, if taken in good faith, under or in connection
with the Letters of Credit, the drafts or acceptances, the guarantees or the
Collateral, shall be binding on the Borrower and shall not put the Agent, the
L/C Issuer or the Lenders in any resulting liability to the Borrower. In
furtherance of the foregoing, the L/C Issuer shall have the full right and
authority to clear and resolve any questions of non-compliance of documents; to
give any instructions as to acceptance or rejection of any documents or goods;
to execute any and all steamship or airways guaranties (and applications
therefor), indemnities or delivery orders; to grant any extensions of the
maturity of, time of payment for, or time of presentation of, any drafts,
acceptances or documents; and to agree to any amendments, renewals, extensions,
modifications, changes or cancellations of any of the terms or conditions of any
of the applications, Letters of Credit, drafts or acceptances, all in the L/C
Issuer's sole name, without any notice to or any consent from the Borrower or
any Lender. The L/C Issuer shall use reasonable efforts to consult with the
Borrower before taking any action pursuant to this Section 3.01(f).
(g) Without the L/C Issuer's express consent, the Borrower
agrees: (i) not to execute any and all applications for steamship or airway
guaranties, indemnities or delivery orders; to grant any extensions of the
maturity of, time of payment for, or time of presentation of, any drafts,
acceptances or documents; or to agree to any amendments, renewals, extensions,
modifications, changes or cancellations of any of the terms or conditions of any
of the applications, Letters of Credit, drafts or Letter of Credit Applications;
and (ii) after the occurrence of an Event of Default which is not cured within
any applicable grace period, if any, or waived by the Agent, not to (A) clear
and resolve any questions of non-compliance of documents, or (B) give any
instructions as to acceptances or rejection of any documents or goods.
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(h) The Borrower agrees that (i) any necessary and material
import, export or other license or certificate for the import or handling of
Inventory will have been promptly procured; and (ii) all foreign and domestic
material governmental laws and regulations in regard to the shipment and
importation of Inventory or the financing thereof will have been promptly and
fully complied with, in each case, where the failure to obtain such certificate
or license or the failure to comply with such laws and regulations would have a
Material Adverse Effect; and any certificates in that regard that the Agent or
the L/C Issuer may at any time reasonably request will be promptly furnished. In
this connection, the Borrower warrants and represents that all shipments made
under any Letters of Credit are in accordance with all material laws and
regulations of the countries in which the shipments originate and terminate, and
are not prohibited by any such laws and regulations. As between the Borrower, on
the one hand, and the Agent, the Lenders and the L/C Issuer, on the other hand,
the Borrower assumes all risk, liability and responsibility for, and agrees to
pay and discharge, all present and future local, state, federal or foreign
taxes, duties, or levies. As between the Borrower, on the one hand, and the
Agent, the Lenders and the L/C Issuer, on the other hand, any embargo,
restriction, laws, customs or regulations of any country, state, city, or other
political subdivision, where such Inventory is or may be located, or wherein
payments are to be made, or wherein drafts may be drawn, negotiated, accepted,
or paid, shall be solely the Borrower's risk, liability and responsibility.
(i) Upon any payments made to the L/C Issuer by the Agent or
the Lenders as reimbursement for payments made by the L/C Issuer under any
Letter of Credit, the Agent or the Lenders, as the case may be, shall, without
prejudice to their rights under this Agreement (including that such unreimbursed
amounts shall constitute Revolving Credit Loans hereunder), acquire by
subrogation, any rights, remedies, duties or obligations granted or undertaken
by the Borrower in favor of the L/C Issuer in any application for Letters of
Credit, any standing agreement relating to Letters of Credit or otherwise, all
of which shall be deemed to have been granted to the Agent and the Lenders and
apply in all respects to the Agent and the Lenders and shall be in addition to
any rights, remedies, duties or obligations contained herein.
Section 3.02 Participations.
(a) Purchase of Participations. Immediately upon issuance by
the L/C Issuer of any Letter of Credit pursuant to this Agreement, each Lender
shall be deemed to have irrevocably and unconditionally purchased and received
from the L/C Issuer, without recourse or warranty, an undivided interest and
participation, to the extent of such Lender's Pro Rata Share, in all obligations
of the L/C Issuer in such Letter of Credit (including, without limitation, all
Reimbursement Obligations of the Borrower with respect thereto pursuant to the
Letters of Credit, the Letters of Credit Applications or otherwise).
(b) Sharing of Payments. In the event that the L/C Issuer
makes any payment in respect of a Letter of Credit and the Borrower shall not
have repaid such amount to the Agent for the account of the L/C Issuer, the
Agent shall charge the Loan Account in the amount of the Reimbursement
Obligation, in accordance with Sections 3.01(c) and 4.02.
(c) Obligations Irrevocable. The obligations of a Lender to
make payments to the Agent for the account of the L/C Issuer with respect to a
Letter of Credit shall be irrevocable, without any qualification or exception
whatsoever and shall be made in accordance
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with the terms and conditions of this Agreement under all circumstances,
including, without limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or
other right which the Borrower may have at any time against a beneficiary
named in such Letter of Credit or any transferee of such Letter of Credit
(or any Person for whom any such transferee may be acting), the Agent, the
L/C Issuer, any Lender, or any other Person, whether in connection with
this Agreement, such Letter of Credit, the transactions contemplated
herein or any unrelated transactions (including any underlying
transactions between the Borrower or any other party and the beneficiary
named in such Letter of Credit);
(iii) any draft, certificate or any other document
presented under such Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan
Documents;
(v) any failure by the L/C Issuer or the Agent to
provide any notices required pursuant to this Agreement relating to such
Letter of Credit;
(vi) any payment by the L/C Issuer under any of the
Letters of Credit against presentation of a draft or certificate which
does not comply with the terms of such Letter of Credit; or
(vii) the occurrence of any Default or Event of Default.
Section 3.03 Issuance of Letters of Credit; Fees.
(a) Request for Issuance. The Borrower may from time to time,
upon notice not later than 12:00 noon, New York City time, at least three
Business Days in advance, request the L/C Issuer to establish or open a Letter
of Credit by delivering to the Agent, with a copy to the L/C Issuer, a letter of
credit application, together with any necessary related documents. The Agent
shall direct the L/C Issuer not to issue a Letter of Credit if the Agent shall
have received written notice from the Required Lenders on the Business Day
immediately preceding the proposed issuance date for such Letter of Credit that
one or more of the conditions precedent in Section 5.02 will not have been
satisfied on such date, and neither the L/C Issuer nor the Agent shall otherwise
be required to determine that, or take notice whether, the conditions precedent
set forth in Section 5.02 have been satisfied.
(b) Letters of Credit Fees.
(i) The Borrower shall pay to the Agent for the account
of the L/C Issuer a nonrefundable administration fee (a "Letter of Credit
Administration Fee")
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for each Letter of Credit issued hereunder and for each amendment to a
Letter of Credit that increases the stated amount of such Letter of
Credit, such Fee to be equal to 1/8 of 1% of the initial stated amount of
such Letter of Credit or the increase in the stated amount of such
existing Letter of Credit, as the case may be. The Letter of Credit
Administration Fee shall be payable, in the case of the issuance of a
Letter of Credit, in advance of or prior to the issuance of such Letter of
Credit and, in the case of an amendment of an existing Letter of Credit,
in advance of or prior to the amendment of such existing Letter of Credit.
In addition, the Borrower shall pay to the Agent for the account of the
Lenders, in accordance with the Lenders' Pro Rata Shares (x) for each
Letter of Credit issued hereunder, a nonrefundable issuance fee (a "Letter
of Credit Issuance Fee") equal to 2.50% per annum of the stated amount of
such Letter of Credit, and (y) for any amendment to an existing Letter of
Credit that increases the stated amount of such Letter of Credit, a
nonrefundable amendment fee (a "Letter of Credit Amendment Fee") equal to
2.50% per annum of the increase in the stated amount of such Letter of
Credit. Each Letter of Credit Issuance Fee and Letter of Credit Amendment
Fee shall be payable as follows: (i) 100% of such fee, less the portion of
such fee which would accrue during the final five (5) days of the Letter
of Credit, shall be payable in advance of or prior to the issuance (or in
the case of an amendment, the effective date of such amendment) of such
Letter of Credit, and (ii) the remainder shall be payable upon the
expiration or termination of such Letter of Credit.
(ii) L/C Issuer Charges. The Borrower shall pay to the
L/C Issuer the standard charges from time to time assessed by the L/C
Issuer in connection with the issuance, administration, amendment, payment
or cancellation of Letters of Credit.
(iii) Charges to Loan Account. The Borrower hereby
authorizes the Agent to, and the Agent may, from time to time, charge the
Loan Account pursuant to Sections 3.01(c) and 4.02 of this Agreement with
the amount of any Letter of Credit Fees or other charges due under this
Section 3.03.
ARTICLE IV
FEES, PAYMENTS AND OTHER COMPENSATION
Section 4.01 Audit and Collateral Monitoring Fees. Each Company
acknowledges that the Agent and any Collateral Agent may upon reasonable notice
to such Company conduct audits and/or field examinations of such Company at any
reasonable time and from time to time in a manner so as to not unduly disrupt
the business of such Company, provided that such notice shall not be required if
an Event of Default has occurred and is continuing. The Borrower agrees to pay,
for the account of the Agent, the reasonable charges of each examiner plus the
examiner's reasonable out-of-pocket costs and expenses incurred in connection
with all such visits, inspections, audits and examinations.
Section 4.02 Payments; Computations and Statements.
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(a) The Borrower will make each payment hereunder and under
the Revolving Credit Notes not later than 11:00 a.m. (New York City time) on the
day when due, in lawful money of the United States of America and in immediately
available funds, to the Agent at the Payment Office. All payments received by
the Agent after 11:00 a.m. (New York City time) on any Business Day will be
credited to the relevant Loan Account on the next succeeding Business Day. All
payments shall be made by the Borrower without defense, set-off or counterclaim
to the Agent and the Lenders. Except as provided in Section 2.05, after receipt,
the Agent will promptly thereafter cause to be distributed like funds relating
to the payment of principal ratably to the Lenders and like funds relating to
the payment of any other amount payable to any Lender to such Lender in each
case to be applied in accordance with the terms of this Agreement, provided that
the Agent will cause to be distributed all interest and fees received from or
for the account of the Borrower not less than once each month and in any event
promptly after receipt thereof. Any amounts not paid to a Lender in accordance
with the preceding sentence following receipt by the Agent (to the extent such
amounts exceed $500,000 in the aggregate) shall accrue interest from the date
such amount is received by the Agent until the date such amount is paid to such
Lender, at a rate per annum equal to the Federal Funds Rate for three Business
Days and thereafter at the Prime Rate. The payment by the Borrower of any amount
to the Agent for the account of the Lenders shall discharge the obligation of
the Borrower for such amount, whether or not received by the Lenders, to the
extent that such payment is made in immediately available funds, such amount is
not required to be returned to the Borrower under any applicable bankruptcy law
or other law and the distribution of such amount shall not be enjoined. The
Lenders and the Borrower hereby authorizes the Agent to, and the Agent may, from
time to time, charge the Loan Account of the Borrower (or any sub-account
thereof) with any amount due and payable by Borrower under any Loan Document to
which Borrower is a party. Each of the Lenders and the Borrower agree that the
Agent shall have the right to make such charges whether or not any Event of
Default or Default shall have occurred and be continuing or whether any of the
conditions precedent in Section 5.02 have been satisfied. Any amount charged to
the Loan Account of the Borrower shall be deemed a Revolving Credit Loan
hereunder made by the Lenders to the Borrower, funded by the Agent on behalf of
the Lenders and subject to Section 2.05 of this Agreement. The Lenders and the
Borrower confirm that any charges which the Agent may so make to the Loan
Account of the Borrower as herein provided will be made as an accommodation to
the Borrower and solely at the Agent's discretion. It is expressly understood
and agreed by the Companies that the Agent and the Lenders shall have no
responsibility to inquire into the correctness of the application apportionment,
allocation or disposition of the proceeds of Revolving Credit Loans or Letters
of Credit by or at the direction of the Borrower or any fees, costs or expenses
for which the Borrower is obligated under this Agreement. Whenever any payment
to be made under any such Loan Document shall be stated to be due on a day other
than a Business Day, such payment shall be made on the next succeeding Business
Day and such extension of time shall in such case be included in the computation
of interest or fees, as the case may be; provided, however, if such extension
would cause payment of interest on or principal of a Eurodollar Loan to be made
in the next following calendar month, such payment shall be made on the next
preceding Business Day. All computations of fees shall be made by the Agent on
the basis of a year of 360 days for the actual number of days (including the
first day but excluding the last day) occurring in the period for which such
fees are payable. Each determination by the Agent of an interest rate or fees
hereunder shall be conclusive and binding for all purposes in the absence of
manifest error.
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(b) The Agent shall use good faith efforts to provide the
Borrower and each Lender, promptly after the end of each calendar month, a
summary statement (in the form from time to time used by Agent) of the opening
and closing daily balances in the Loan Account during such month, the amounts
and dates on all Revolving Credit Loans and Agent Advances made during such
month, the amounts and dates of all payments on account of the Revolving Credit
Loans to the Borrower during such month and the Revolving Credit Loans to which
such payments were applied, the amount of interest accrued on the Revolving
Credit Loans to the Borrower during such month, any Letters of Credit issued by
the L/C Issuer for the account of the Borrower during such month, specifying the
face amount thereof, the amount of charges to the Loan Account and/or Revolving
Credit Loans made to the Borrower during such month to reimburse the Lenders for
drawings made under Letters of Credit, and the amount and nature of any charges
to such Loan Account made during such month on account of fees, commissions,
expenses and other Obligations. All entries on any such statement shall, 30 days
after the same is sent, be presumed to be correct and shall constitute
presumptive evidence of the information contained in such statement and shall be
final and conclusive absent manifest error.
Section 4.03 Sharing of Payments, Etc. Except as provided in Section
2.05 hereof, if any Lender shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) on
account of any Obligation in excess of its ratable share of payments on account
of similar obligations obtained by all the Lenders, such Lender shall forthwith
deliver such excess amount to the Agent and the Agent shall promptly distribute
such amount in accordance with the terms hereof and in compliance with the terms
of the Intercreditor Agreement.
Section 4.04 Apportionment of Payments.
(a) Subject to Sections 2.05 and 12.01 hereof, all payments of
principal and interest in respect of outstanding Revolving Credit Loans, all
payments in respect of the Reimbursement Obligations, all payments of fees
(other than the Agent's Fees, the Letter of Credit Administration Fees, fees
with respect to Letters of Credit provided for in Section 3.03(b)(ii) and the
audit and collateral monitoring fees provided for in Section 4.01) and all other
payments in respect of any other Obligations, shall be allocated by the Agent
among such of the Lenders as are entitled thereto, in proportion to their
respective Pro Rata Shares or otherwise as provided herein or, in respect of
payments not made on account of Revolving Credit Loans or Letter of Credit
Obligations, as designated by the Person making payment when the payment is
made.
(b) After the occurrence and during the continuance of an
Event of Default, the Agent may, and upon the direction of the Required Lenders
shall, apply all payments in respect of any Obligations and all proceeds of the
Collateral, subject to the provisions of this Agreement and the Intercreditor
Agreement, in such order and in such proportions as the Agent may determine in
its sole and absolute discretion.
Section 4.05 Increased Costs and Reduced Return.
(a) If any Lender or the L/C Issuer shall have determined that
the adoption or implementation of, or any change in, any law, rule, treaty or
regulation, or any
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policy, guideline or directive of, or any change in the interpretation or
administration thereof by, any court, central bank or other administrative or
Governmental Authority, or compliance by the L/C Issuer or any Lender or any
Affiliate of such Lender or the L/C Issuer with any directive of or guideline
from any central bank or other Governmental Authority or the introduction of or
change in any accounting principles applicable to the L/C Issuer or any Lender
or any Affiliate of such Lender or the L/C Issuer (in each case, whether or not
having the force of law), shall (i) change the basis of taxation of payments to
the L/C Issuer or any Lender or any Affiliate of such Lender or the L/C Issuer
of any amounts payable hereunder (except for taxes on the overall net income of
the L/C Issuer or any Lender or any Affiliate of such Lender or the L/C Issuer),
(ii) impose, modify or deem applicable any reserve, special deposit or similar
requirement against any Revolving Credit Loan or Letter of Credit or against
assets of or held by, or deposits with or for the account of, or credit extended
by, the L/C Issuer or any Lender, or any Affiliate of such Lender or the L/C
Issuer or (iii) impose on the L/C Issuer or any Lender or any Affiliate of such
Lender or the L/C Issuer any other condition regarding this Agreement or any
Revolving Credit Loan or Letter of Credit, and the result of any event referred
to in clause (i), (ii) or (iii) above shall be to increase the cost to the L/C
Issuer or any Lender of making any Revolving Credit Loan or issuing,
guaranteeing or participating in any Letter of Credit, or to reduce any amount
received or receivable by the L/C Issuer or any Lender hereunder, then, upon
demand by the L/C Issuer or such Lender, the Borrower shall pay to the L/C
Issuer or such Lender such additional amounts as will compensate the L/C Issuer
or such Lender for such increased costs or reductions in amount, together with
interest on such additional amounts.
(b) If any Lender or the L/C Issuer shall have determined that
any Capital Guideline or adoption or implementation of, or any change in, any
Capital Guideline by the Governmental Authority charged with the interpretation
or administration thereof, or compliance by the L/C Issuer, any Lender or any
Affiliate of such L/C Issuer or any Lender with any Capital Guideline or with
any request or directive of any such Governmental Authority with respect to any
Capital Guideline, or the implementation of, or any change in, any applicable
accounting principles (in each case, whether or not having the force of law),
either (i) affects or would affect the amount of capital required or expected to
be maintained by the L/C Issuer, any Lender or any Affiliate of such L/C Issuer
or any Lender, and the L/C Issuer or any Lender determines that the amount of
such capital is increased as a direct or indirect consequence of any Revolving
Credit Loans made or maintained, Letters of Credit issued or any guaranty or
participation with respect thereto, or the L/C Issuer's, any Lender's or any
such Person's Affiliate's other obligations hereunder, or (ii) has or would have
the effect of reducing the rate of return on the L/C Issuer's, any Lender's, or
any such Person's Affiliate's capital to a level below that which such L/C
Issuer, such Lender or such Affiliate could have achieved but for such
circumstances as a consequence of any Revolving Credit Loans made or maintained,
Letters of Credit issued, or any guaranty or participation with respect thereto
or any agreement to make Revolving Credit Loans, to issue Letters of Credit or
such L/C Issuer's, such Lender's, or such Person's Affiliate's other obligations
hereunder (in each case, taking into consideration such L/C Issuer's, such
Lender's or such Affiliate's policies with respect to capital adequacy), then,
upon demand by the L/C Issuer or any Lender, the Borrower shall pay to the L/C
Issuer or such Lender from time to time such additional amounts as will
compensate the L/C Issuer or such Lender for such cost of maintaining such
increased capital or such reduction in the rate of return on such L/C Issuer's,
such Lender's or such Affiliate's capital.
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(c) All amounts payable under this Section 4.05 shall bear
interest from the date that is three Business Days after the date of demand by
the L/C Issuer or a Lender until payment in full to the L/C Issuer or such
Lender at the Post-Default Rate. A certificate of the L/C Issuer or any Lender
claiming compensation under this Section 4.05 specifying the event herein above
described and the nature of such event shall be submitted by the L/C Issuer or
such Lender to Borrower, setting forth the additional amount due and an
explanation of the calculation thereof, the L/C Issuer's or such Lender's
reasons for invoking the provisions of this Section 4.05, and shall be final and
conclusive absent manifest error. The Borrower shall not be required to
compensate a Lender or the L/C Issuer pursuant to subsections (a) or (b) of this
Section 4.05 for any amounts incurred more than 12 months prior to the date that
such Lender or the L/C Issuer notifies the Borrower of such Person's intention
to claim compensation therefor, provided that if the circumstances giving rise
to such claim have a retroactive effect, then such 12 month period shall be
extended to include the period of such retroactive effect with respect to such
claim.
ARTICLE V
CONDITIONS OF EFFECTIVENESS, LETTER OF CREDIT
ISSUANCE AND LENDING
Section 5.01 Conditions Precedent to Effectiveness. The
effectiveness of this Agreement is subject to the fulfillment, in a manner
satisfactory to the Agent, of each of the following conditions precedent:
(a) Payment of Fees, Etc. The Borrower shall have paid on or
before the Effective Date, all fees, costs, expenses and taxes then due and
payable by the Borrower pursuant to Sections 2.08, 3.03 and 12.05 hereof.
(b) Representations and Warranties; No Event of Default. The
representations and warranties contained in Section 6.01 of this Agreement and
in each other Loan Document and certificate or other writing delivered to the
Agent, the Lenders or the L/C Issuer pursuant hereto on or prior to the
Effective Date shall be true and correct on and as of the Effective Date as
though made on and as of such date; and no Default or Event of Default shall
have occurred and be continuing on the Effective Date or would result from this
Agreement becoming effective in accordance with its terms.
(c) Legality. The effectiveness of this Agreement shall not
contravene any law, rule or regulation applicable to the Agent, the Lenders or
the L/C Issuer.
(d) Repayment of the Existing Indebtedness. The Agent shall
have received evidence satisfactory to it that (i) the "Term Loans" (as defined
in the Existing Term Loan Agreement), all accrued and unpaid interest thereon
and all other "Obligations" (as defined in the Existing Term Loan Agreement)
shall have been paid in full, and the Existing Term Loan Agreement shall have
been terminated (except for those provisions that by their terms survive
termination), and (ii) the "Revolving Credit Loan" (as defined in the Existing
Revolving Credit Agreement) and all accrued and unpaid interest thereon shall
have been paid in full.
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(e) Delivery of Documents. The Agent shall have received on or
before the Effective Date the following, each in form and substance satisfactory
to the Agent and, unless indicated otherwise, dated the Effective Date:
(i) counterparts to this Agreement, duly executed by the
Borrower, each Guarantor Company and the Lenders;
(ii) an amended Revolving Credit Notes payable to the
order of each Lender, in each case duly executed by the Borrower and
delivered by the Borrower;
(iii) an Acknowledgment and Consent, duly executed by
each Investor party thereto, consenting to the transactions contemplated
by this Agreement and all other agreements, instruments and other
documents executed in connection with the foregoing, and acknowledging
that each Guaranty and each other Loan Document to which such Investor is
a party shall remain in full force and effect;
(iv) amended and restated Schedules to this Agreement
and the other Loan Documents;
(v) the Security Agreement, duly executed by each
Company;
(vi) the Pledge Agreement, duly executed by each
Company.
(vii) the Contribution Agreement, duly executed by each
Company.
(viii) UCC financing statement amendments, in
appropriate form for filing, and to the extent deemed necessary by the
Agent in its sole discretion, UCC financing statements, in appropriate
form for filing, in each case duly filed in such office or offices as may
be necessary or, in the reasonable opinion of the Agent, desirable to
perfect the security interests purported to be created by the Security
Documents;
(ix) UCC, tax and judgment lien search reports in all
relevant jurisdictions, listing all effective financing statements which
name as debtor any Loan Party, (as determined by the Agent) and which are
filed in the offices referred to in paragraph (vi) hereof, together with
copies of such financing statements, none of which, except as set forth on
Schedule 7.02(a)(ii) hereto, shall cover any of the Collateral;
(x) an amendment to each Mortgage, duly executed and in
appropriate form for recording, in each case, in the offices set forth in
Schedule 5.01(e)(x) and such other offices as may be necessary or, in the
reasonable opinion of the Agent, desirable to perfect the security
interests purported to be created by such Mortgage;
(xi) a certified copy of each Term Loan Document and
each legal opinion delivered thereunder, as in effect on the date hereof,
together with all exhibits and schedules thereto;
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(xii) the Intercreditor Agreement, duly executed by the
Agent, the Collateral Agents and CSFB;
(xiii) a copy of the resolutions adopted by the Board of
Directors or equivalent governing body of each Loan Party, certified as of
the Effective Date by authorized officers thereof, authorizing (x) the
borrowings hereunder and the transactions contemplated by this Agreement
and the other documents, instruments and agreements executed and/or to be
delivered in connection herewith or therewith, and (y) the execution,
delivery and performance by each Loan Party of this Agreement and the
other documents, instruments and agreements executed and/or to be
delivered in connection herewith or therewith;
(xiv) a certificate of an authorized officer of each
Loan Party, certifying the names and true signatures of the officers of
such Loan Party authorized to sign this Agreement and the other
agreements, instruments and documents to which such Loan Party is or will
be a party and the other documents to be executed and delivered by such
Loan Party in connection herewith, together with evidence of the
incumbency of such authorized officers;
(xv) a certificate, dated as of a date (A) not more than
thirty days prior to the Effective Date, of the appropriate official(s) of
the states of incorporation, and (B) not more than ninety days prior to
the Effective Date, of the appropriate official(s) of each state of
foreign qualification of each Loan Party, in each case, certifying as to
the subsistence in good standing of, and the payment of taxes by, such
Loan Party in such states and listing all charter documents of such Loan
Party on file with such official(s), together with confirmation by
telephone or telegram (where available) on the Effective Date from such
official(s) as to such matters;
(xvi) a copy of the charter, certificate of formation or
other organizational document of each Loan Party, certified by the
appropriate official(s) of the state of organization of such Loan Party
and as of the Effective Date by an authorized officer of such Loan Party;
(xvii) a copy of the by-laws, limited liability
agreement or limited partnership agreement or equivalent, of each Loan
Party, certified as of the Effective Date by an authorized officer of such
Loan Party;
(xviii) an opinion of ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ LLP,
counsel to the Loan Parties, as to such matters as the Agent may
reasonably request;
(xix) a certificate of the chief executive officer or
the chief financial officer of the Borrower, certifying as to the matters
set forth in subsection (b) of this Section 5.01;
(xx) copies of the insurance policies or a binder with
respect to such insurance policies and certificates of insurance
evidencing such insurance on the property of the Companies as is required
by Section 7.01(h) hereof naming the Agent as additional insured and loss
payee, using a long form loss payee endorsement, for all
- 54 -
insurance maintained by the Companies; such policies shall include,
without limitation, Clean up Cost Containment Insurance and Environmental,
Response, Compensation and Liability Insurance (ERCLIP) for both prior and
future Environmental Costs, with an aggregate limit of not less than
$40,000,000;
(xxi) an updated certificate of an authorized officer of
the Borrower certifying the names and true signatures of those officers of
the Borrower that are authorized to provide Notices of Borrowings, Letter
of Credit Applications and all other notices under this Agreement and the
Loan Documents;
(xxii) each Credit Card Depository Account Agreement and
Depository Account Agreement to the extent that such agreement was not
previously delivered to the Agent;
(xxiii) a true and complete copy of each lease pursuant
to which SCS leases properties listed on Schedule 6.01(q) to the extent
that such lease was not previously delivered to the Agent pursuant to
which SCS is a party;
(xxiv) certified copies of each credit card agreement
(to the extent not previously delivered to the Agent) to which SCS is a
party;
(xxv) a copy of the projections required by Section
7.01(a)(vii);
(xxvi) a certified copy of each Material Contract of the
Companies, in each case, to the extent such Material Contract was not in
effect on the Existing Effective Date, was otherwise not delivered under
the Existing Revolving Credit Agreement or was amended subsequent to the
Existing Effective Date, and not otherwise specified in this Section 5.01;
(xxvii) a certified copy of the Management Agreement;
(xxviii) a copy of each of the items referred to in
Sections 4.01(m), (n), (p), (q) and (r) of the Term Loan Agreement; and
(xxix) such other agreements, instruments, approvals,
opinions and other documents as the Agent may reasonably request
including, without limitation, all inter-company management services
agreements among the Borrower and the Guarantors or between the Borrower
and third parties.
(f) Proceedings; Receipt of Documents. All proceedings in
connection with the transactions contemplated by this Agreement, and all
documents incidental thereto, shall be satisfactory to the Agent and its special
counsel, and the Agent and such special counsel shall have received all such
information and such counterpart originals or certified or other copies of such
documents as the Agent or such special counsel may reasonably request.
(g) Audit. The Agent may, at its option, obtain an update of
the audit and field examination of the Accounts Receivable and Inventory of the
Borrower and the Agent
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shall be satisfied (in its sole discretion) with the results of such updated
audit and field examination.
(h) Material Adverse Effect. The Lenders shall have
determined, in their sole judgment, that no event or development has occurred
after September 30, 2003 that may have a Material Adverse Effect.
(i) Additional Availability. After giving effect to all
Revolving Credit Loans made on the Effective Date and the Letters of Credit
issued on such date, (i) the aggregate Availability shall not be less than
$10,000,000, and (ii) all liabilities of the Borrower shall be current. The
Borrower shall deliver to the Agent a certificate of the chief financial officer
of the Borrower certifying as to the matters set forth in clauses (i) and (ii)
of this Section 5.01(i) and containing the calculations thereof.
(j) Term Loan Facility. (i) The Term Loan Agreement shall have
been executed and delivered by each party thereto, (ii) each condition precedent
to the effectiveness of the Term Loan Agreement and the making of the Term Loans
(other than the effectiveness of this Agreement) shall have been satisfied and
(iii) upon the effectiveness of this Agreement and making of the initial
Revolving Credit Loan requested by the Borrower hereunder, the Borrower shall
have received net cash proceeds from the Term Loan of at least $100,000,000
(less fees, costs and expenses incurred in connection with the Term Loan
Documents) pursuant to the Term Loan Documents.
Section 5.02 Conditions Precedent to Revolving Credit Loans and
Letters of Credit. As a condition precedent to the Agent or any Lender making
any Revolving Credit Loan (excluding the continuation or conversion of any
Revolving Credit Loan in accordance with Section 2.11 hereof), or the L/C Issuer
establishing or opening any Letter of Credit, each of the following conditions
precedent shall be fulfilled in a manner satisfactory to the Agent;
(a) Payment of Fees, Etc. The Borrower shall have paid all
fees, costs, expenses and taxes then payable by the Borrower pursuant to
Sections 2.08, 3.03 and 12.05 hereof.
(b) Representations and Warranties; No Event of Default. The
following statements shall be true and correct, and the submission by the
Borrower to the Agent of a Notice of Borrowing with respect to a Revolving
Credit Loan and the Borrower's acceptance of the proceeds of such Revolving
Credit Loan, or the submission by the Borrower of a Letter of Credit Application
with respect to a Letter of Credit and the issuance of such Letter of Credit
shall be deemed to be a representation and warranty by the Borrower on the date
of such Revolving Credit Loan and the date of the issuance of such Letter of
Credit that (i) the representations and warranties contained in Section 6.01 of
this Agreement and in each other Loan Document and certificate or other writing
delivered to either Collateral Agent, the Agent, the L/C Issuers or the Lenders
pursuant hereto on or prior to the date of such Revolving Credit Loan or Letter
of Credit are true and correct on and as of the date of such Revolving Credit
Loan or the date of the issuance of such Letter of Credit as though made on and
as of such date, except to the extent that any such representation or warranty
expressly relates solely to an earlier date (in which case any such
representation or warranty shall be true and correct on and as of such earlier
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date); and (ii) no Event of Default or Default has occurred and is continuing or
would result from the making of the Revolving Credit Loan to be made on such
date or the issuance of the Letter of Credit to be issued on such date.
(c) Legality. The making of such Revolving Credit Loan or the
issuance of such Letter of Credit shall not contravene any law, rule or
regulation applicable to the Agent, the Lenders or the L/C Issuers, as the case
may be.
(d) Notices. Except in the case of a deemed borrowing of a
Revolving Credit Loan pursuant to Section 3.01(c), the Agent shall have received
(i) in the case of a borrowing, a Notice of Borrowing pursuant to Section 2.03
hereof no later than 12:00 noon (New York City time) three Business Days prior
to the date of the proposed borrowing, (ii) in the case of the issuance of a
Letter of Credit, a Letter of Credit Application pursuant to Section 3.03 hereof
not later than 12:00 noon (New York City time) three Business Days prior to the
proposed date of issuance of a Letter of Credit, and (iii) a copy of any notices
required to be delivered to the Agent pursuant to Section 7.01(a)(xv).
(e) Delivery of Documents. The Agent shall have received such
other agreements, instruments, approvals, opinions and other documents, each in
form and substance reasonably satisfactory to the Agent, as the Agent may
reasonably request.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Section 6.01 Representations and Warranties. Each Company represents
and warrants as follows:
(a) Organization, Good Standing, Etc. Each Company (i) is a
corporation, limited liability company or limited partnership (as applicable)
duly organized, validly existing and in good standing under the laws of the
state of its organization, (ii) has all requisite power and authority to conduct
its business as now conducted and as presently contemplated and to make the
borrowings hereunder (in the case of the Borrower) and to consummate the
transactions contemplated by the Loan Documents and the other Transaction
Documents to which it is a party, and (iii) is duly qualified to do business and
is in good standing in each jurisdiction in which the character of the
properties owned or leased by it or in which the transaction of its business
makes such qualification necessary, except where the failure to so qualify
individually or in the aggregate is not reasonably likely to have a Material
Adverse Effect.
(b) Authorization, Etc. The execution, delivery and
performance by each Company of each Loan Document and each other Transaction
Document to which it is a party, (i) have been duly authorized by all necessary
corporate action, (ii) do not and will not contravene, in the case of a
corporation, its charter or by-laws, in the case of a limited liability company,
its certificate of formation and limited liability operating agreement, or any
applicable equivalent document, and in the case of a limited partnership, its
certificate of limited partnership and limited partnership agreement, or any
applicable equivalent document, or any applicable law
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or any material contractual restriction binding on or otherwise affecting it or
any of its properties, (iii) do not and will not result in or require the
creation of any Lien (other than pursuant to any such Loan Document or Term Loan
Document) upon or with respect to any of its properties, and (iv) do not and
will not result in any suspension, revocation, impairment, forfeiture or
nonrenewal of any permit, license, authorization or approval applicable to its
operations or any of its properties except where such suspension, revocation,
impairment, forfeiture or nonrenewal is not reasonably likely to have a Material
Adverse Effect.
(c) Governmental Approvals. No authorizations, approval or
consent of or other action by, and no notice to or filing with, any Governmental
Authority or other regulatory body is required in connection with the due
execution, delivery and performance by each Company of any Loan Document or
other Transaction Document to which it is or will be a party or for the validity
or enforceability thereof.
(d) Enforceability of Transaction Documents. This Agreement
is, and each other Loan Document and other Transaction Document to which each
Company is or will be a party, when delivered hereunder, will be, a legal, valid
and binding obligation of such Company, enforceable against such Company in
accordance with its terms except to the extent that the enforceability thereof
may be limited by any applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws from time to time in effect affecting generally, the
enforcement of creditors' rights and remedies and by general principles of
equity.
(e) Inventory Locations; Places of Business; Chief Executive
Office. There is no location at which the Borrower has any Inventory (except for
Inventory in transit and other Inventory with an aggregate market value for all
such Inventory not in excess of $500,000) other than (i) those locations listed
on Part A of Schedule 6.01(e) hereto and (ii) any other locations approved in
writing by the Agent pursuant to the definition of "Eligible Inventory." Part B
of Schedule 6.01(e) hereto contains a true, correct and complete list, as of the
Effective Date, of the legal names and addresses of each storage facility at
which Inventory of the Borrower is stored. None of the receipts received by the
Borrower from any storage facility states that the goods covered thereby are to
be delivered to bearer or to the order of a named Person or to a named Person
and such named Person's assigns. Part C of Schedule 6.01(e) sets forth a
complete and accurate list as of the date hereof of (A) each place of business
of each Company; and (B) the chief executive office of each Company. Part D of
Schedule 6.01(e) sets forth a complete and accurate description and list as of
the date hereof of the location, by state and street address, of all real
property owned and leased by each Company and its Subsidiaries.
(f) Subsidiaries. Schedule 6.01(f) hereto is a complete and
correct description of the name, jurisdiction of incorporation and ownership of
the outstanding Capital Stock of the Companies and each Subsidiary of the
Companies in existence on the date hereof. Except as provided in Schedule
6.01(f) hereto, all shares of such stock owned by the Loan Parties or one or
more Subsidiaries of the Companies, as indicated in such Schedule, are owned
free and clear of all Liens other than Liens created by the Loan Documents or
the Term Loan Documents and Permitted Liens described in clause (iii), (iv), (x)
or (xi) of Section 7.02(a) hereof.
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(g) Litigation. As of the Effective Date, there is no pending
or, to the best of the Companies' knowledge threatened action, suit or
proceeding affecting the Companies or any of their Subsidiaries before any court
or other Governmental Authority or any arbitrator, except as set forth on
Schedule 6.01(g) hereto and except for actions, suits and proceedings seeking
money damages of less than $1,000,000 in the aggregate. There is no pending or,
to the best of the Companies' knowledge, threatened action, suit or proceeding
affecting the Companies or any of their Subsidiaries before any court or other
Governmental Authority or any arbitrator which may have a Material Adverse
Effect.
(h) Financial Condition.
(i) The Financial Statements, copies of which have been
delivered to the Lenders, fairly present in all material respects the
financial condition of the Companies and their Subsidiaries as at the
respective dates thereof and the results of operations of the Companies
and their Subsidiaries for the fiscal periods ended on such respective
dates, all in accordance with GAAP, and since December 31, 2002, there has
been no event or development that has had or may reasonably be expected to
have a Material Adverse Effect.
(ii) The Borrower has heretofore furnished to the Agent
and the Lenders the Business Plan and projected pro forma balance sheets,
income statements and statements of cash flow for the period from December
31, 2003 to December 31, 2010, prepared on an annual basis, and the
Business Plan and such projections were believed at the time furnished to
be reasonable, have been prepared on a reasonable basis and in good faith
by the Borrower, and have been based on assumptions believed by the
Borrower to be reasonable at the time made and upon the best information
then reasonably available to the Borrower.
(i) Compliance with Law, Etc. Neither (i) the Borrower nor any
other Company is in violation of its charter, by-laws, limited partnership
agreement or limited liability agreement (as applicable) or (ii) any law or any
material term of any agreement or instrument binding on or otherwise affecting
it or any of its properties except where, in the case of clause (ii) of this
Section 6.01(i), such violation of an instrument or agreement is not reasonably
likely to result in a Material Adverse Effect.
(j) ERISA. Schedule 6.01(j) hereto sets forth each Employee
Plan and Multiemployer Plan. Except as set forth on Schedule 6.01(j) hereto, (i)
each Employee Plan is in substantial compliance with the applicable provisions
of ERISA and the Internal Revenue Code, (ii) no Termination Event has occurred
nor is reasonably expected to occur with respect to any Employee Plan, (iii) the
most recent annual report (Form 5500 Series) with respect to each Employee Plan,
including Schedule B (Actuarial Information) thereto, copies of which have been
filed with the Internal Revenue Service and delivered to the Agent, is complete
and correct and fairly presents the funding status of such Employee Plan, and
since the date of such report there has been no material adverse change in such
funding status, (iv) no Employee Plan had an accumulated or waived funding
deficiency or permitted decreases or has applied for an extension of any
amortization period within the meaning of Section 412 of the Internal Revenue
Code at any time during the previous 60 months, and (v) no Lien imposed under
the Internal Revenue
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Code or ERISA exists or is likely to arise on account of any Employee Plan
within the meaning of Section 412 of the Internal Revenue Code at any time
during the previous 60 months. Except as set forth on Schedule 6.01(j) hereto,
neither the Companies nor any of their respective ERISA Affiliates, have
incurred any withdrawal liability under ERISA with respect to any Multiemployer
Plan, and the Companies are not aware of any facts indicating that any Company
or any of their respective ERISA Affiliates may in the future incur any such
withdrawal liability. Except as required by Section 4980B of the Internal
Revenue Code or as otherwise set forth on Schedule 6.01(j) hereto, neither the
Companies nor any of their respective ERISA Affiliates maintains an employee
welfare benefit plan (as defined in Section 3(1) of ERISA) which provides health
or welfare benefits (through the purchase of insurance or otherwise) for any
retired or former employee of the Companies or any of their respective ERISA
Affiliates or coverage after a participant's termination of employment. Neither
the Companies nor any of their respective ERISA Affiliates has incurred any
liability or obligation under the Worker Adjustment and Retraining Notification
Act ("WARN") or similar state law, which remains unpaid or unsatisfied.
(k) Taxes, Etc. All Federal, state and local tax returns and
other reports required by applicable law to be filed by the Companies have been
filed, and all taxes, assessments and other governmental charges imposed upon
the Companies or any property of the Companies and which have become due and
payable on or prior to the date hereof have been paid, except to the extent
contested in good faith by proper proceedings which stay the imposition of any
penalty, fine or Lien resulting from the non-payment thereof and with respect to
which adequate reserves have been set aside for the payment thereof.
(l) Regulations T, U and X. None of the Companies is or will
be engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulations T, U and X issued by
the Board of Governors of the Federal Reserve System), and no proceeds of any
Revolving Credit Loan will be used to purchase or carry any margin stock or to
extend credit to others for the purpose of purchasing or carrying any margin
stock.
(m) Nature of Business. The Companies are not engaged in any
business other than (i) in the case of the Companies, the ownership or leasing
of the Fixed Assets, (ii) in the case of the Borrower, the manufacturing,
processing, distribution and marketing of fuel, fuel by-products, diesel, gas,
asphalt and related goods and products and other businesses incidental thereto
and (iii) in the case of SCS, the ownership or leasing of all of the personal
and real property owned or leased by it, the operation of convenience stores and
retail gasoline stations under the trade name "7-Eleven" and pursuant to the
7-Eleven License Agreement and other businesses incidental thereto. No Company
is engaged in the sale of Hydrocarbon Products other than the Borrower, SCS and
its Subsidiaries.
(n) Adverse Agreements, Etc. Neither the Companies nor any of
their respective Subsidiaries is a party to any agreement or instrument, or
subject to any charter or other organizational restriction or any judgment,
order, regulation, ruling or other requirement of a court or other Governmental
Authority or regulatory body, which has or, to the best knowledge of any Company
in the future is reasonably likely to result in, a Material Adverse Effect.
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(o) Holding Company and Investment Company Acts. None of the
Companies is (i) a "holding company" or a "subsidiary company" of a "holding
company" or an "affiliate" of a "holding company," as such terms are defined in
the Public Utility Holding Company Act of 1935, as amended, or (ii) an
"investment company" or an "affiliated person" or "promoter" of, or "principal
underwriter" of or for, an "investment company", as such terms are defined in
the Investment Company Act of 1940, as amended.
(p) Permits, Etc. Each Company has all material permits,
licenses, authorizations and approvals required for it lawfully to own and
operate its business.
(q) Title to Properties. Each Company has good and marketable
title to all of its personal properties and assets, and good and indefeasible
title to all of its real property assets, in all cases, free and clear of all
Liens, except for Permitted Liens.
(r) Full Disclosure. No Loan Document or schedule or exhibit
thereto and, subject to Section 6.01(h)(ii) in the case of financial
projections, no certificate, report, statement or other document or information
furnished in writing by or on behalf of the Companies to the Lenders in
connection herewith or with the consummation of the transactions contemplated
hereby, contains any material misstatement of fact or omits to state a material
fact or any fact necessary to make the statements contained herein or therein
not misleading in any material respect. There is no fact reasonably likely to
result in a Material Adverse Effect which has not been set forth in a footnote
included in the Financial Statements or a Schedule hereto.
(s) Operating Lease Obligations. The Companies do not have any
obligations as lessee for the payment of rent for any real or personal property
other than the Operating Lease Obligations set forth in Schedule 6.01(s) hereto.
(t) Environmental Matters. (i) The operations of the Companies
are in material compliance with all applicable Environmental Laws; (ii) there
has been no Release at any of the properties owned or operated by any Company or
a predecessor in interest, or at any disposal or treatment facility which
received Hazardous Materials generated by any Company or any predecessor in
interest except, in each case, where the Release would not reasonably be
expected to have a Material Adverse Effect; (iii) no Environmental Actions have
been asserted against any Company or any predecessor in interest which is
reasonably likely to have a Material Adverse Effect, nor does any Company have
knowledge or notice of any threatened or pending Environmental Action against
any Company or any predecessor in interest which is reasonably likely to have a
Material Adverse Effect; (iv) no Environmental Actions have been asserted
against any facilities that may have received Hazardous Materials generated by
any Company or any predecessor in interest which are reasonably likely to result
in a Material Adverse Effect; and (v) the Companies have caused to be delivered
or made available to the Agent true and complete copies of all environmental
reports, studies, investigations or material correspondence regarding any
Releases, violations of Environmental Law or Environmental Costs of or by any of
the Companies or any environmental conditions at any of the properties owned or
leased by any of the Companies, which are in possession of any Company or any of
their agents.
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(u) Schedules. All of the information which is required to be
scheduled to this Agreement is set forth on the Schedules attached hereto, is
correct and accurate and does not omit to state any information material
thereto.
(v) Insurance. The Companies keep their properties adequately
insured and maintain (i) insurance to such extent and against such risks,
including, flood, fire and environmental hazards, as is customary with companies
in the same or similar businesses, (ii) workmen's compensation insurance in the
amount required by applicable law, (iii) public liability insurance, which shall
include product liability insurance, in the amount customary with companies in
the same or similar business against claims for personal injury or death on
properties owned, occupied or controlled by them, and (iv) such other insurance
as may be required by law or as may be reasonably required in writing by the
Agent.
(w) Use of Proceeds. The proceeds of the Revolving Credit
Loans (i) were and shall continue to be used (A) to make certain intercompany
loans to the extent permitted by Section 7.02(f), (B) for working capital in the
ordinary course of business of the Borrower and its Subsidiaries, (C) to issue a
Letter of Credit for the benefit of the Term Loan Agent in the amount of the
Debt Service Support Requirement, (ii) shall be used to pay fees and expenses in
connection with this Agreement and the transactions contemplated hereby, and
(iii) for other purposes permitted herein.
(x) Security Interests. The Security Documents create in favor
of the Collateral Agents, for the benefit of the Lenders, a legal, valid and
enforceable security interest in and Lien upon the Collateral. Each such
security interest and Lien granted pursuant to a Security Document is, and upon
the filing of the UCC financing statements described in Section 5.01(e), the
recording of the Assignment For Security (Patents) and the Assignment For
Security (Trademarks), referred to in the Security Agreements, in the United
States Patent and Trademark Office, the recording of the amendments to the
Mortgages referred to in Section 5.01(e)(x) in the offices set forth in Schedule
5.01(e)(x) hereto, such security interests in and Liens on the Collateral
granted thereby (other than Collateral with an aggregate market value not in
excess of $500,000) shall be, perfected, first priority security interests
(subject to Permitted Liens and to the priorities set forth in the Intercreditor
Agreement), and no further recordings or filings are or will be required in
connection with the creation, perfection or enforcement of such security
interests and Liens, other than (i) the filing of continuation statements in
accordance with applicable law and as set forth in the relevant Security
Documents, (ii) the recording of an Assignment For Security (Patents) and an
Assignment For Security (Trademarks) pursuant to the Security Agreements in the
United States Patent and Trademark Office, with respect to after-acquired U.S.
applications and registrations for patents and trademarks, respectively, and
(iii) the registration of all U.S. copyrights and the recordation of appropriate
evidence of the Security Interest in the United States Copyright Office.
(y) Trade names. Schedule 6.01(y) hereto sets forth a complete
and accurate list as of the Effective Date of all trade names used by the
Companies and their Subsidiaries.
(z) Solvency. After giving effect to the transactions
contemplated or required to occur by the terms of the Transaction Documents, (i)
the Borrower is, individually,
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and together with its Subsidiaries, Solvent, and (ii) each of the Companies,
together with their Subsidiaries and on a consolidated basis, are Solvent.
(aa) Material Contracts. Set forth on Schedule 6.01(aa) hereto
is a complete and accurate list as of the Effective Date of all Material
Contracts of the Companies and their Subsidiaries, showing the parties thereto
and amendments and modifications thereto. Each such Material Contract (i) is in
full force and effect and is binding upon and enforceable against each Company
that is a party thereto and, to the best of such Company's knowledge, all other
parties thereto in accordance with its terms, (ii) has not been otherwise
amended or modified, and (iii) there exists no default under any Material
Contract by any Company thereto or, to the Companies' knowledge, any other party
thereto.
(bb) Employee and Labor Matters. (i) There is (A) no unfair
labor practice complaint pending or, to the best knowledge of any Company,
threatened against the Borrower or any other Company before any Governmental
Authority and no grievance or arbitration proceeding pending or threatened
against the Borrower or any other Company which arises out of or under any
collective bargaining agreement, (B) no strike, labor dispute, slowdown,
stoppage or similar action or grievance pending or threatened against the
Borrower or any other Company and (C) to the best knowledge of each Company, no
union representation question existing with respect to the employees of the
Borrower or any other Company and no union organizing activity taking place with
respect to any of the employees of any of them.
(cc) Customers and Suppliers. There exists no actual or, to
the knowledge of any Company, threatened termination, cancellation or limitation
of, or modification to or change in, the business relationship between (A) the
Borrower or any of its Subsidiaries, on the one hand, and any customer or any
group thereof, on the other hand, whose agreements with the Borrower or any such
Subsidiary are individually or in the aggregate material to the business or
operations of the Borrower or any of its Subsidiaries, or (B) the Borrower or
any of its Subsidiaries, on the one hand, and any material supplier thereof, on
the other hand; and there exists no present state of facts or circumstances that
could reasonably be expected to give rise to or result in any such termination,
cancellation, limitation, modification or change.
(dd) Certain Transaction Documents. The Borrower has delivered
to the Agent a complete and correct copy, as of the Effective Date, of each Term
Loan Document, each Lease Document and each License Agreement, including all
schedules and exhibits thereto and all agreements, instruments or other
documents evidencing or governing any Capital Stock or Indebtedness issued in
connection therewith. Each Term Loan Document, Lease Document and License
Agreement sets forth the entire agreement and understanding of the parties
thereto relating to the subject matter thereof, and there are no other
agreements, arrangements or understandings, written or oral, relating to the
matters covered thereby. The execution, delivery and performance of each Term
Loan Document, Lease Document and License Agreement has been duly authorized by
all necessary action (including, without limitation, the obtaining of any
consent of stockholders or other holders of Capital Stock or other Person
required by law or by any applicable corporate or other organizational
documents) on the part of each Company party thereto and to the best of the
Companies' knowledge, each other Person party thereto. No authorization or
approval or other action by, and no notice to filing with or license from, any
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Governmental Authority is required for such execution, delivery and performance
other than such as have been obtained on or prior to the Effective Date. Each
Term Loan Document, each Lease Document and License Agreement is the legal,
valid and binding obligation of the parties thereto, enforceable against such
parties in accordance with its terms.
(ee) Consummation of Transactions. (i) No Term Loan Document,
Lease Document or License Agreement, has been amended or otherwise modified as
of the Effective Date, and there has been no breach of any material term under
any Term Loan Document, Lease Document, or License Agreement, and (ii) all
conditions precedent to each Term Loan Document, each Lease Document and each
License Agreement, and the consummation of the acquisition, lease and license
transactions pursuant thereto, have been fulfilled or (with the prior written
consent of Agent) waived, no Term Loan Document, Lease Document or License
Agreement has been amended or otherwise modified, and there has been no breach
of any material term or condition of any Term Loan Document, Lease Document or
License Agreement.
(ff) Representations and Warranties in Documents; No Default.
All representations and warranties made by any of the Companies as set forth in
the Loan Documents, the Term Loan Documents, or the 7-Eleven License Agreement,
and to the best knowledge of the Companies, all representations and warranties
made by any of the other parties to the 7-Eleven License Agreement, are true and
correct in all respects at the time as of which such representations were made
and on the Effective Date. No Event of Default has occurred and is continuing
and no condition exists which constitutes a Default or an Event of Default.
(gg) Location of Bank Accounts. Schedule 6.01(gg) hereto sets
forth a complete and accurate list as of the Effective Date of all deposit and
other accounts maintained by the Companies and their Subsidiaries (including the
Cash Concentration Account and all Depository Accounts of the Borrower) together
with a description thereof (i.e. the bank at which such deposit or other account
is maintained and the account number and the purpose thereof).
(hh) Name; Jurisdiction of Organization; Organizational ID
Number; FEIN. Schedule 6.01(hh) sets forth a complete and accurate list as of
the date hereof of (i) the exact legal name of each Company, (ii) the
jurisdiction of organization of each Company, (iii) the organizational
identification number of each Company (or indicates that such Loan Party has no
organizational identification number), and (iv) the federal employer
identification number of each Loan Party.
ARTICLE VII
COVENANTS OF THE BORROWER
Section 7.01 Affirmative Covenants. So long as any principal of or
interest on the Revolving Credit Loans, any Reimbursement Obligation or any
other Letter of Credit Obligations (whether or not due) shall remain unpaid or
any Lender shall have any Revolving Credit Commitment hereunder, the Companies
will unless the Required Lenders shall otherwise consent in writing:
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(a) Reporting Requirements. Furnish to the Lenders:
(i) as soon as available and in any event within 60 days
after the end of each of the first three Fiscal Quarters of the Parent in
each Fiscal Year, consolidated balance sheets, consolidated statements of
income and retained earnings and consolidated statements of cash flow of
(x) the Parent and its Consolidated Subsidiaries, (y) Alon USA and its
Consolidated Subsidiaries, and (z) SCS, in each case, as at the end of
such Fiscal Quarter; and for the period commencing at the end of the
immediately preceding Fiscal Year and ending with the end of such Fiscal
Quarter, setting forth in each case in comparative form the figures for
the corresponding date or period of the immediately preceding Fiscal Year,
all in reasonable detail and (A) certified by the chief financial officer
of the Parent or Alon USA as fairly presenting, in all material respects,
the financial position and the results of operations and changes in
financial position, as of the end of such Fiscal Quarter of (x) the Parent
and its Consolidated Subsidiaries, (y) Alon USA and its Consolidated
Subsidiaries, and (z) SCS, in accordance with GAAP applied in a manner
consistent with that of the most recent audited financial statements
furnished to the Lenders, subject to year end adjustments, and (B) in the
case of the financial statements of (x) the Parent and its Consolidated
Subsidiaries and (y) Alon USA and its Consolidated Subsidiaries,
accompanied by a review report thereon of KPMG, LLP or other independent
certified public accountants of recognized standing selected by the Parent
and satisfactory to the Agent (it being agreed that any "Big Four"
accounting firm shall be deemed acceptable), which report shall state that
such accountants reviewed such consolidated balance sheets, statements of
income and retained earnings and statements of cash flow and that based on
such review, such accountants are not aware of any material modifications
that should be made in such financial statements in order for them to be
in conformity with GAAP, and in the case of the financial statements of
SCS and its Consolidated Subsidiaries, compiled by KPMG, LLP or other
independent certified public accountants of recognized standing selected
by the Parent and satisfactory to the Agent (it being agreed that any "Big
Four" accounting firm shall be deemed acceptable);
(ii) as soon as available, and in any event within 90
days after the end of each Fiscal Year of the Parent, the audited
consolidated balance sheets, consolidated statements of income and
retained earnings and consolidated statements of cash flow of (x) the
Parent and its Consolidated Subsidiaries, (y) Alon USA and its
Consolidated Subsidiaries, and (z) SCS, in each case, as at the end of
such Fiscal Year, setting forth in comparative form the corresponding
figures for the immediately preceding Fiscal Year, all in reasonable
detail and prepared in accordance with GAAP, and (in the case of the
consolidated balance sheets and statements of income, retained earnings
and cash flow) accompanied by a report and an unqualified opinion,
prepared in accordance with generally accepted auditing standards, of
KPMG, LLP or other independent certified public accountants of recognized
standing selected by the Parent and satisfactory to the Agent (it being
agreed that any "Big Four" accounting firm shall be deemed acceptable),
together with a written statement of such accountants (1) to the effect
that, in making the examination necessary for their certification of such
financial statements, they have not obtained any knowledge of the
existence of an Event of Default or a Default arising under Section
7.02(p) hereof and (2) if such accountants shall have
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obtained any knowledge of the existence of any such Event of Default or
such Default, describing the nature thereof, provided that the Companies
shall only be required to furnish such statement of their accountants (i)
for its Fiscal Year ending December 31, 2003, and (ii) upon the request of
the Agent, which request shall be made only if an Event of Default exists
or if any event or development has occurred since September 30, 2003, that
could reasonably be expected to have a Material Adverse Effect, as
reasonably determined by the Agent in its sole discretion;
(iii) as soon as available and in any event within 30
days of the end of each Fiscal Month, an internally prepared consolidated
and consolidating balance sheets, consolidated and consolidating
statements of income and retained earnings and consolidated and
consolidating statements of cash flow for such Fiscal Month of (x) the
Parent and its Consolidated Subsidiaries and (y) Alon USA and its
Consolidated Subsidiaries, in each case, for such Fiscal Month and for the
period from the beginning of such Fiscal Year to the end of such Fiscal
Month, all in form and detail consistent with that of the most recent
monthly financial statements furnished to the Agent prior to the date
hereof and certified by the chief financial officer of the Parent or Alon
USA, as appropriate, as fairly presenting, in all material respects, the
financial position of the Parent and its Consolidated Subsidiaries and
Alon USA and its Consolidated Subsidiaries, in each case, as of the end of
such Fiscal Month and the results of operations and changes in financial
position of the Parent and its Consolidated Subsidiaries and Alon USA and
its Consolidated Subsidiaries, in each case, for such Fiscal Month, in
accordance with GAAP applied in a manner consistent with that of the most
recent audited financial statements furnished to the Agent, subject to
normal year end audit adjustments and the absence of footnotes;
(iv) simultaneously with the delivery of the financial
statements required by clauses (i), (ii) and (iii) of this Section
7.01(a), a certificate of the chief financial officer of the Parent or
Alon USA, as appropriate, (or in the case of the financial statements of
SCS, a certificate of the chief financial officer of SCS), stating (a)
that such officer is familiar with the provisions of this Agreement and
the other Loan Documents and has made or caused to be made under his
supervision a review of the condition and operations of the Companies and
their Subsidiaries during the period covered by such financial statements
with a view to determining whether the Companies and their Subsidiaries
were in compliance with all of the provisions of such Loan Documents at
the times such compliance is required by the Loan Documents, and that such
review has not disclosed, and such officer has no knowledge of, the
existence during such period of an Event of Default or Default or, if an
Event of Default or such Default existed, describing the nature and period
of existence thereof and the action which the Companies and their
Subsidiaries (or, in the case of the certificate of the chief financial
officer of SCS, SCS and its Subsidiaries) propose to take or took with
respect thereto and (b) a schedule showing the calculations specified in
Section 7.02(p) of this Agreement;
(v) on the 15th day of each month, a schedule, in form
and substance reasonably satisfactory to the Agent, containing actual
information as of the 30th day of the preceding month, certified by the
chief financial officer of the Borrower, containing a breakdown of the
Borrower's Inventory by amount and valued at cost (which
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shall include dollar valuation by location) and storage facility and
production facility location, appropriately completed with information
reasonably satisfactory to the Agent, and incorporating all appropriate
month-end adjustments;
(vi) (A) as soon as available, and in any event within
90 days after the end of each Fiscal Year of the Companies, at the cost of
the Borrower, a report of an independent collateral field examiner
approved by the Agent in writing and reasonably acceptable to the Borrower
(which may be the Agent or an affiliate thereof) with respect to the
Eligible Accounts Receivable and Eligible Inventory components included in
the Borrowing Base, and (B) at the option of the Agent, such additional
reports as to the Eligible Accounts Receivable and Eligible Inventory
components included in the Borrowing Base as the Agent or the Required
Lenders may reasonably request.
(vii) (A) on or before December 15 of each calendar
year, financial projections for (x) the Parent and its Subsidiaries, (y)
Alon USA and its Subsidiaries and (z) SCS and its Subsidiaries, each in
form and substance reasonably satisfactory to the Agent, for the
three-year period commencing on January 1 of the succeeding calendar year
prepared on a monthly basis through December 31 of such succeeding
calendar year and on an annual basis thereafter, and (B) on or before July
1 of each calendar year, updated financial projections, in form and
substance reasonably satisfactory to the Agent, for the remaining six (6)
month period in such year for (x) the Parent and its Subsidiaries, (y)
Alon USA and its Subsidiaries and (z) SCS and its Subsidiaries, all such
financial projections to be reasonable, to be prepared on a reasonable
basis and in good faith, and to be based on assumptions believed by the
Companies to be reasonable at the time made and from the best information
then available to the Companies;
(viii) promptly upon their becoming available, a copy of
(A) all consultants' reports, investment bankers' reports, accountants'
management letters, business plans and similar documents, (B) all reports,
financial statements or other information delivered by any of the
Companies, (C) all reports, proxy statements, financial statements and
other information generally distributed by any Company to its creditors or
the financial community in general, and (D) any audit or other reports
submitted to the Company by independent accountants in connection with any
annual, interim or special audit;
(ix) as soon as available and in any event within 15
days after the end of each month, a report, in form and substance
reasonably satisfactory to the Agent, setting forth a summary of the
economic terms of each Hedging Agreement to which any Company is a party,
including the obligations of such Company under such Hedging Agreement as
of the end of such month;
(x) on the 15th day of each month, (A) a Borrowing Base
Certificate containing actual information as of the 30th day of the
preceding month and setting forth the calculation of the Borrowing Base
and Availability for the Borrower, (B) an aging report for the Borrower's
Accounts Receivable current as of the close of
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business on the preceding Business Day, (C) a detailed summary of the
accounts payable of each Company, current as of the close of business on
the preceding Business Day, in each case appropriately completed with
information reasonably satisfactory to the Agent, incorporating all
appropriate adjustments, and (D) a summary of the SCS Collateral Fixed
Assets that have been sold, disposed of, closed, or acquired since the
last summary previously furnished to the Lenders;
(xi) as soon as available and in any event within 60
days after the end of each Fiscal Quarter, (A) a report with respect to
the Inventory and Accounts Receivable of SCS, substantially similar to the
information set forth in the footnotes to the audited financial statements
of SCS as at December 31, 2000, and, in form and substance satisfactory to
the Agent, setting forth any amendments, extensions or other modifications
to any Ground Leases entered into during such Fiscal Quarter (including,
without limitation, any increase or reductions in rent or any options
exercised under such Ground Leases);
(xii) promptly after submission to any Government
Authority, (A) all material documents and information furnished to such
Government Authority and (B) a copy of the cover letter and a summary of
all documents and information furnished to such Governmental Authority in
connection with any investigation of any Loan Party other than routine
inquiries by such Governmental Authority; the Companies agree promptly to
furnish copies of any documents or information described in any such
summary and to furnish additional copies of such submissions to any
consultant or adviser to the Lenders or the Agent, in each case as the
Agent may direct;
(xiii) as soon as possible and in any event within five
days after the occurrence of an Event of Default or Default, or a Material
Adverse Effect, the written statement of the chief executive officer or
the chief financial officer of the Parent, setting forth the details of
such Event of Default, Default or Material Adverse Effect and the action
which the Companies and their Subsidiaries propose to take with respect
thereto;
(xiv) (A) as soon as possible and in any event (1)
within 30 days after the Companies or any of their respective ERISA
Affiliates knows or has reason to know that any Termination Event
described in clause (i) of the definition of Termination Event with
respect to any Employee Plan has occurred, (2) within 10 days after the
Companies or any of their respective ERISA Affiliates knows or has reason
to know that any other Termination Event with respect to any Employee Plan
has occurred, or (3) within 10 days after any of the Companies or any of
their respective ERISA Affiliates knows or has reason to know that an
accumulated funding deficiency has been incurred or an application has
been made to the Secretary of the Treasury for a waiver or modification of
the minimum funding standard (including installment payments) or an
extension of any amortization period under Section 412 of the Internal
Revenue Code with respect to an Employee Plan, a statement of the chief
financial officer of the Parent or Alon USA setting forth the details of
such occurrence and the action, if any, which the Companies or any of
their respective ERISA Affiliates proposes to take with respect thereto,
(B) promptly and in any event within two Business Days after receipt
thereof by
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the Companies or any of their respective ERISA Affiliates from the Pension
Benefit Guaranty Corporation, copies of the notice received by the
Companies or any of their respective ERISA Affiliates of the Pension
Benefit Guaranty Corporation's intention to terminate any Plan or to have
a trustee appointed to administer any Plan, (C) promptly and in any event
within 30 days after the filing thereof with the Internal Revenue Service,
copies of each Schedule B (Actuarial Information) to the annual report
(Form 5500 Series) with respect to each Employee Plan and Multiemployer
Plan, (D) promptly and in any event within ten days after receipt thereof
by the Companies or any of their respective ERISA Affiliates from a
sponsor of a Multiemployer Plan or from the Pension Benefit Guaranty
Corporation, a copy of the notice received by the Companies or any of
their respective ERISA Affiliates concerning the imposition or amount of
withdrawal liability under Section 4202 of ERISA or indicating that such
Multiemployer Plan may enter reorganization status under Section 4241 of
ERISA, and (E) promptly and in any event within 10 Business Days after any
of the Companies or any of their respective ERISA Affiliates sends notice
of a plant closing or mass layoff (as defined in WARN) to employees,
copies of each such notice sent by the Borrower, the Guarantors or any of
their respective ERISA Affiliates;
(xv) as soon as available and in any event (A) within 5
Business Days after receipt or delivery thereof, copies of any material
notices that the Borrower receives from or sends to any of its licensors
in connection with the License Agreements or that any Company receives or
sends in respect of any License Agreement or Lease Document, (B) within 5
Business Days after receipt thereof, copies of any notice of the
occurrence of a default or event of default or other material notice
received by any Company under any Term Loan Document, GECC Loan Document
or GTR Loan Document, not less than 5 Business Days prior to the effective
date thereof, copies of any amendments, modifications, waivers or other
changes to any License Agreement, Lease Document or Term Loan Document;
(xvi) promptly after the commencement thereof but in any
event not later than five days after service of process with respect
thereto on, or the obtaining of knowledge thereof by, any of the
Companies, notice of each action, suit or proceeding before any court or
other Governmental Authority or other regulatory body or any arbitrator
which if adversely determined could have a Material Adverse Effect;
(xvii) on or before the date (the "delivery date") that
any financial statement, report, notice or other document is required to
be delivered to the Term Loan Lenders pursuant to the Term Loan Agreement
(as in effect on the date hereof, whether or not the Term Loan Agreement
is in effect on the delivery date, but subject to any amendments to the
Term Loan Agreement which are consented to in writing by the Agent), a
copy of such financial statement, report, notice or other document (unless
such financial statement, report, notice or other document is required to
be delivered to the Agent pursuant to another provision of Section 7.01(a)
of this Agreement);
(xviii) promptly and in any event within five days after
any Company is notified by the Term Loan Agent that, or any Company gives
notice to the Term Loan Agent that, or any Company otherwise learns or has
reason to believe that,
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(A) the Term Loan Agreement shall be terminated for any reason or (B) CSFB
shall cease to be the Term Loan Agent for any reason, a statement setting
forth the reason and probable effective date therefor;
(xix) promptly and in any event within five Business
Days after the sale, other disposition or closing of any retail store by
SCS, written notice of such sale, disposition, or closing, including,
without limitation, a description of the store sold, disposed of or closed
and the gross proceeds and the Net Proceeds received as a result of such
disposition; and
(xx) as soon as possible and in any event within five
Business Days after any Responsible Officer obtains actual knowledge
thereof, written notice that any statement in Schedule K is not true and
correct in any material respect;
(xxi) as soon as possible and in any event within five
Business Days after receipt thereof, a copy of any Phase I environmental
audit and Phase II environmental audit conducted at the request of the
Term Loan Agent or any Term Loan Lender; and
(xxii) promptly upon request, such other information
concerning the condition or operations, financial or otherwise, of any of
the Companies that the Agent from time to time may reasonably request.
(b) Subsidiaries, Etc.
(i) Cause each Subsidiary of a Company (other than a
GECC Entity) not in existence on the Effective Date to execute and deliver
to the Lender promptly and in any event within five Business Days after
the formation or acquisition thereof (A) a Joinder Agreement,
substantially in the form of Exhibit G hereto and otherwise in form and
substance satisfactory to the Agent, pursuant to which such Subsidiary
shall be made a party to this Agreement as a Company and Guarantor, (B) a
Security Agreement, (C) if such Subsidiary has any Subsidiaries, a Pledge
Agreement together with, to the extent not delivered to the Term Loan
Agent in accordance with the Intercreditor Agreement, (x) certificates, if
any, evidencing all of the Capital Stock of any Person owned by such
Subsidiary, (y) undated stock powers executed in blank with signature
guaranteed, and (z) such opinion of counsel and such approving certificate
of such Subsidiary as the Agent may reasonably request in respect of
complying with any legend on any such certificate or any other matter
relating to such Capital Stock, (D) one or more Mortgages creating on the
real property of such Subsidiary a perfected priority lien, subject to any
Permitted Liens, a Title Insurance Policy covering such real property, and
if reasonably required by the Agent a current survey thereof and a
surveyor's certificate, each in form and substance satisfactory to the
Agent, together with such other agreements, instruments and documents as
the Agent may reasonably require, unless such real property is subject to
a Permitted Lien, the mortgage or other security document governing such
Permitted Lien prohibits the creation of a lien on such real estate in
favor of the Agent and after reasonable efforts such Company cannot obtain
the waiver of such prohibition, and (E) such other agreements,
instruments, approvals, legal opinions or
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other documents reasonably requested by the Agent in order to create,
perfect, establish the priority (in accordance with the terms of the
Intercreditor Agreement) of or otherwise protect any Lien purported to be
covered by any such Security Document to effect the intent that such
Subsidiary shall become bound by all of the terms, covenants and
agreements contained in the Loan Documents and that all property and
assets of such Subsidiary shall become Collateral for the Obligations; and
(ii) cause each owner of the Capital Stock of any such
Subsidiary to execute and deliver promptly and in any event within five
Business Days after the formation or acquisition of such Subsidiary a
Pledge Agreement, together with, to the extent not delivered to the Term
Loan Agent in accordance with the Intercreditor Agreement (A) certificates
(if any) evidencing all of the Capital Stock of such Subsidiary, (B)
undated stock powers or other appropriate instruments of assignment
executed in blank with signature guaranteed, (C) such opinion of counsel
and such approving certificate of such Subsidiary as the Agent may
reasonably request in respect of complying with any legend on any such
certificate or any other matter relating to such Capital Stock and (D)
such other agreements, instruments, approvals, legal opinions or other
documents requested by the Agent.
(c) Compliance with Laws, Etc. Comply, and cause each of their
respective Subsidiaries to comply, in all material respects with all applicable
material laws, rules, regulations and orders (including, without limitation,
ERISA and Environmental Laws), such compliance to include, without limitation,
(i) paying before the same become delinquent all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits or
upon any of its properties, and (ii) paying all lawful claims which if unpaid
might become a Lien upon any of its properties, except to the extent contested
in good faith by proper proceedings which stay the imposition of any penalty,
fine or Lien resulting from the non-payment thereof and with respect to which
adequate reserves have been set aside for the payment thereof.
(d) Preservation of Existence, Etc. Maintain and preserve, and
cause each of their Subsidiaries to maintain and preserve, its existence, rights
and privileges, and become or remain duly qualified and in good standing in each
jurisdiction in which the character of the properties owned or leased by them or
in which the transaction of their business makes such qualification necessary
except (i) where such failure to qualify is not reasonably likely to result in a
Material Adverse Effect or (ii) to the extent permitted under Section 7.02(d)
hereof.
(e) Keeping of Records and Books of Account. Keep, and cause
each of their Subsidiaries to keep, adequate records and books of account, with
complete entries made in accordance with GAAP.
(f) Inspection Rights. Permit, and cause each of their
Subsidiaries to permit, the Agent, or any agents or representatives thereof at
any time and from time to time upon reasonable notice to the Borrower, during
normal business hours to examine and make copies of and abstracts from the
records and books of account of the Companies, to visit and inspect their
properties, to conduct audits, Phase I and Phase II Environmental Site
Assessments (to the extent the Agent is entitled to conduct such assessments
pursuant to Section 7.01(k)),
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physical counts, valuations or examinations and to discuss their affairs,
finances and accounts with any of the directors, officers, managerial employees,
independent accountants or other representatives thereof (all at the cost and
expense of the Borrower), provided that (i) the foregoing shall be in a manner
so as to not unduly disrupt the business of any Company and (ii) such notice
shall not be required if an Event of Default has occurred and is continuing.
(g) Maintenance of Properties, Etc. Except as may be expressly
permitted by Section 7.01(d) hereof, maintain and preserve, and cause each of
their Subsidiaries to maintain and preserve, all of their properties which are
necessary or useful in the proper conduct of their business in good working
order and condition, ordinary wear and tear excepted, and comply, in all
material respects, and cause each of their Subsidiaries to comply, in all
material respects, at all times with the provisions of all leases to which each
of them is a party as lessee or under which each of them occupies property, so
as to prevent any loss or forfeiture thereof or thereunder.
(h) Maintenance of Insurance. Maintain for the Companies and
their Subsidiaries, with responsible and reputable insurance companies or
associations insurance (including, without limitation, comprehensive general
liability and property and casualty insurance and including environmental
impairment liability insurance sufficient to cover any reasonably anticipated
Environmental Costs, with the Lenders and the Collateral Agents listed as an
additional insured for the benefit of the Lenders and the Collateral Agents)
with respect to their properties and business, in such amounts and covering such
risks, as the Agent may require and in any event as is required by any
Governmental Authority or other regulatory body having jurisdiction with respect
thereto and as is carried generally in accordance with sound business practice
by companies in similar businesses similarly situated. The Borrower shall
maintain for the benefit of the Collateral Agents and the Lenders, and shall not
cancel or terminate, any existing fully paid secured lender liability insurance
policy.
(i) Environmental. Cause each Company to (i) keep any property
either owned or operated by it free of any Liens arising under any Environmental
Laws; (ii) comply in all material respects with Environmental Laws and provide
to the Agent documentation of such compliance which the Agent reasonably
requests; (iii) notify the Agent of any material Release of a Hazardous Material
and take any Remedial Actions required to ▇▇▇▇▇ said Release; and (iv) promptly
provide the Agent with written notice within ten (10) days of the receipt of any
Environmental Action or notice that an Environmental Action will be filed
against any of the Companies or their Subsidiaries.
(j) Further Assurances. Shall, and shall cause each Subsidiary
to, do, execute, acknowledge and deliver, at the sole cost and expense of the
Borrower all such further acts, deeds, conveyances, mortgages, assignments,
estoppel certificates, financing statements, notices of assignment, transfers
and assurances as the Agent may reasonably require from time to time in order to
(i) carry out more effectively the purposes of this Agreement and the other Loan
Documents, (ii) subject to valid and perfected first priority Liens on all the
Collateral (subject to the Permitted Liens and the priority of the Collateral
Agents' security interest as established in accordance with the Intercreditor
Agreement), (iii) perfect and maintain the validity, effectiveness and priority
of any of the Loan Documents and the Liens intended to be created thereby
(subject to the Permitted Liens and in accordance with the Intercreditor
Agreement), and
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(iv) better assure, convey, grant, assign, transfer and confirm unto the Agent,
the Collateral Agents, the Lenders and the L/C Issuer the rights now or
hereafter intended to be granted to the Agent, the Collateral Agents, the
Lenders and the L/C Issuer under this Agreement, any Loan Document or any other
instrument under which the Companies and their respective Subsidiaries may be or
may hereafter become bound for carrying out the intention or facilitating the
performance of the terms of the Agreement. In furtherance of the foregoing, to
the maximum extent permitted by applicable law, each Company (A) authorizes the
Agent to execute any such agreements, instruments or other documents in such
Company's name and to file such agreements, instruments or other documents in
any appropriate filing office, (B) authorizes the Agent to file any financing
statement required hereunder or under any other Loan Document, and any
continuation statement or amendment with respect thereto, in any appropriate
filing office without the signature of such Company, and (C) ratifies the filing
of any financing statement, and any continuation statement or amendment with
respect thereto, filed without the signature of such Company prior to the date
hereof.
(k) Real Estate. If at any time after the Effective Date, any
Company acquires any fee interest, easement or leasehold in real property, such
Company shall promptly execute, deliver and record, (i) in the case of a fee
interest and in the case of a leasehold interest where the applicable lease
permits collateral assignments to third parties without the consent of the
landlord, (A) in the case of SCS Collateral Fixed Assets, a first priority
Mortgage, and (B) in the case of any Company other than SCS and its
Subsidiaries, a second priority Mortgage, in form and substance reasonably
satisfactory to the Agent, in favor of a Collateral Agent covering such real
property interest, in form and substance reasonably satisfactory to the Agent,
and provide such Collateral Agent with a title commitment and insurance policy
issued by the Title Company insuring (A) in the case of SCS Assets, the first
priority lien and (B) in the case of any Company other than SCS and its
Subsidiaries, the second priority lien of said mortgage, deed of trust or deed
to secure debt in such real property encumbered thereby in an amount reasonably
acceptable to the Agent and subject only to Permitted Liens and to such other
exceptions as are reasonably satisfactory to the Agent, and if reasonably
required by the Agent a current survey of such real property with a satisfactory
surveyor's certificate thereon, a satisfactory legal description of such
property and an opinion from special counsel to the Companies, each in form and
substance reasonably satisfactory to the Agent and as to such matters as the
Agent may reasonably request, and, to the extent necessary under applicable law,
Uniform Commercial Code financing statements covering fixtures, in each case
appropriately completed and duly executed, for filing in the appropriate county
land office and evidence that the Companies shall have paid to the Title Company
all expenses of the Title Company in connection with the issuance of such
reports and in addition shall have paid to the Title Company an amount equal to
the recording and stamp taxes (including mortgage recording taxes), if any,
payable in connection with recording such mortgages in the appropriate county
land offices, each in form and substance reasonably satisfactory to the Agent,
and (ii) in the case of a leasehold interest where the applicable lease does not
permit collateral assignments to third parties without the consent of the
landlord, if so required by a Collateral Agent, a negative pledge instrument in
favor of such Collateral Agent, in suitable form for recording (unless the
applicable lease would not permit such instrument to be recorded) and in form
and substance satisfactory to the Agent. In addition, the Companies shall,
within 30 days after a request by the Agent, cause to be performed, at the
Companies' cost and expense, a Phase I environmental audit with respect to any
SCS Collateral Fixed Asset and, if any Event of Default has occurred and is
continuing, with
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respect to any other Fixed Asset (and, if reasonably requested by the Agent
based upon the results of such Phase I Audit, a Phase II Audit), in form and
substance and by an independent firm reasonably satisfactory to the Agent.
(l) Change in Collateral; Collateral Records. Give the Agent
not less than thirty days' prior written notice of any change in the location of
any Collateral, other than to locations, that as of the date hereof are known to
the Agent and at which either Collateral Agent has filed financing statements
and otherwise fully perfected its Liens thereon, other than with respect to
Collateral with an aggregate market value not in excess of $500,000. The
Borrower shall also advise the Agent promptly, in sufficient detail, of any
material adverse change relating to the type, quantity or quality of the
Collateral or the Lien granted thereon. The Borrower agrees to execute and
deliver to the Agent for the benefit of the Lenders from time to time, solely
for the Agent's convenience in maintaining a record of Collateral, such written
statements and schedules as the Agent may reasonably require, designating,
identifying or describing the Collateral. The Borrower's failure, however, to
promptly give the Agent such statements or schedules shall not effect, diminish
or modify or otherwise limit either Collateral Agent's security interest in the
Collateral.
(m) Borrowing Base. Maintain all Revolving Credit Loans and
Letter of Credit Obligations in compliance with the then current Borrowing Base.
(n) Cash Management. (i) Except as otherwise set forth in this
Section 7.01(n), cause all cash and all proceeds from Accounts Receivable and
the sale of Inventory to be deposited each Business Day into Depository Accounts
that are subject to Depositary Account Agreements, (ii) cause all funds in such
Depository Accounts to be transferred by automated clearing house transfer or
wire transfer into the Cash Concentration Account (A) in the case of the
Companies (other than SCS), at least once per week, and (B) in the case of SCS,
to the extent that proceeds exceed an aggregate amount of $2 million at any one
time, the amount of such excess on a daily basis, (iii) authorize, and the
Companies do hereby authorize, the Agent to cause all cash to be sent by wire
transfer to the Agent Account (A) in the case of SCS, upon the occurrence and
during the continuation of an Event of Default, and (B) in the case of the
Borrower, at the discretion of the Agent and at times or intervals as the Agent
may elect, provided that if the Cash Concentration Account Bank does not receive
directions from the Agent to transfer such cash to its Agent's Account on or
before Thursday of any week, the Cash Concentration Account Bank shall be
instructed to transfer such cash to such Borrower's operating account on the
immediately following Friday, (iv) authorize, and the Companies do hereby
authorize, the Agent to cause all funds transferred to the Agent Account to be
credited to the Loan Account and applied to reduce the Obligations outstanding
from time to time in accordance with Section 2.07 hereof, (v) take all such
actions as the Agent deems necessary or advisable to send all cash, all proceeds
from the sale of Inventory, all remittances or other proceeds of Collateral to
the Agent Account to be applied to the Obligations as described in clauses (i)
through (v) above, (vi) on or before the Effective Date, deliver to the Agent
(A) Depository Account Agreements executed by the relevant Loan Party and each
Depository Bank, (B) a Cash Concentration Account Agreement executed by the
Borrower and the Cash Concentration Account Bank, and (C) a Credit Card
Depository Account Agreement executed by SCS and each credit card servicer of
SCS, (vi) take such other actions as the Agent deems necessary or advisable to
grant to the Agent dominion and control over the funds in the
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Depository Accounts and the Cash Concentration Account, (vii) notify the Agent
in writing not later than five Business Days prior to the establishment of any
new Depository Accounts, and (viii) cause to be delivered to the Agent, prior to
the deposit of any funds in such new Depository Account, a Depository Account
Agreement, in form and substance satisfactory to the Agent, duly executed by the
Borrower and such new Depository Account Bank. Notwithstanding the foregoing,
(A) the Borrower may maintain operating accounts with commercial banks located
near the Refinery with aggregate deposits not in excess of $1,000,000 at any
time, (B) SCS may maintain up to four operating accounts not subject to a
Depository Account Agreement with deposits not to exceed an aggregate amount of
$2,000,000 in all such operating accounts for any period in excess of ten
Business Days, and (C) Alon USA may maintain the deposits accounts described in
and subject to Section 7.02(u).
Section 7.02 Negative Covenants. So long as any principal of or
interest on the Revolving Credit Loans, any Reimbursement Obligation or any
Letter of Credit Obligations (whether or not due) shall remain unpaid or any
Lender shall have any Revolving Credit Commitment hereunder, the Companies
(other than the Parent, except with respect to Section 7.02(a), Section 7.02(b)
and Section 7.02(c)) will not without the prior written consent of the Required
Lenders:
(a) Liens, Etc. Create or suffer to exist, or permit any of
their Subsidiaries to, or permit the Parent to, create or suffer to exist, any
Lien upon or with respect to any of their properties, rights or other assets,
whether now owned or hereafter acquired, or assign or otherwise transfer, or
permit any of its Subsidiaries to assign or otherwise transfer, any right to
receive income, other than the following (each, a "Permitted Lien"):
(i) Liens created pursuant to the Loan Documents;
(ii) Liens existing on the date hereof, as set forth in
Schedule 7.02(a)(ii) hereto, and the renewal and replacement of such
Liens, provided that any such renewal or replacement Lien shall be limited
to the property or assets covered by the Lien renewed or replaced and the
Indebtedness secured by any such renewal or replacement Lien shall be in
an amount not greater than the amount of Indebtedness secured by the Lien
renewed or replaced; in no event shall any Liens exist on SCS's interest
in any Ground Lease other than in favor of the FA Collateral Agent
pursuant to a Mortgage in favor of the landlord pursuant to applicable
law, or in favor of other Persons pursuant to clause (vi) below, in favor
of the Term Loan Agent subject to the terms of the Intercreditor
Agreement;
(iii) Liens for taxes, assessments or governmental
charges or levies to the extent that the payment thereof shall not be
required by Section 7.01(c) hereof;
(iv) Liens created by operation of law (other than Liens
created under Environmental Laws), such as materialmen's liens, mechanics'
liens and other similar Liens, arising in the ordinary course of business
and securing claims the payment of which shall not be required by Section
7.01(c) hereof;
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(v) deposits, pledges or Liens (other than Liens arising
under ERISA or the Internal Revenue Code) securing (A) obligations
incurred in respect of workers' compensation, unemployment insurance or
other forms of governmental insurance or benefits, (B) the performance of
bids, tenders, leases, contracts (other than for the payment of money) and
statutory obligations, or (C) obligations on surety or appeal bonds, but
only to the extent such deposits, pledges or Liens are incurred or
otherwise arise in the ordinary course of business and secure obligations
which are not past due;
(vi) easements, rights-of-way, zoning and similar
restrictions and other similar charges and encumbrances on the use of real
property and minor irregularities in the title thereto which do not (A)
secure obligations for the payment of money or (B) materially impair the
value of such property or materially impair the use thereof by any of the
Companies or any of their Subsidiaries in the normal conduct of such
Person's business;
(vii) Liens created under the Term Loan Documents;
provided, that such Liens shall secure only those obligations which they
secure on the Effective Date and modifications, extensions, renewals and
replacements thereof permitted hereunder;
(viii) Liens (other than the Liens securing the GTR
Financing) securing Capitalized Leases permitted by Section 7.02(g),
purchase money liens or purchase money security interests securing
Indebtedness permitted by Section 7.02(b)(vi); provided, that such
security interests do not encumber any other property or assets of the
Companies or their Subsidiaries;
(ix) Liens granted and/or reserved pursuant to the Lease
Documents as in effect on July 31, 2000;
(x) Liens on the Capital Stock of Alon USA granted by
the Parent to Bank Leumi pursuant to the Warrant Purchase Documents;
(xi) Liens on forty percent (40%) of the Capital Stock
of Alon USA granted by the Parent to the Minority Holders pursuant to the
Minority Purchase Documents; provided that (A) such Liens shall be
released upon payment in full of the Minority Purchase Price and the
Subordinated Investor Loans owed by Alon Capital to certain of the
Minority Holders, and (B) such Liens shall secure only the portion of the
Minority Purchase Price not paid to the Minority Holders on the date of
the sale by the Minority Holders of the Capital Stock of Alon Capital to
Alon USA and the prepayment of the Subordinated Investor Loans owed by
Alon Capital to certain of the Minority Holders and no other obligation of
any of the Companies to the Minority Holders;
(xii) Liens in favor of (A) the GECC Borrower on all
equipment, including, without limitation, all machinery, appliances,
furniture, equipment, trade fixtures, gas pumps and canopies and other
tangible personal property (but excluding inventory, general intangibles,
payment intangibles, cash, instruments
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(including promissory notes), documents, accounts, chattel paper (whether
tangible or electronic), deposit accounts, letter-of-credit rights,
securities and all other investment property, any other contract rights or
rights to the payment of money, and all other intangible property), in
each case owned by SCS and to the extent such equipment is now or
hereafter located on or at, or used solely in connection with, any of the
owned real properties transferred to the GECC Borrower on October 1, 2002,
and (B) GECC on real and personal property owned by the Subsidiaries of
SCS to the extent created under the GECC Loan Documents;
(xiii) Liens on the GTR Assets of the Companies granted
under the GTR Loan Documents to secure the GTR Financing;
(xiv) Liens deemed to exist in connection with leases or
subleases granted to others in the ordinary course of business that do not
materially interfere with the conduct of the business of any of the
Companies;
(xv) Liens existing on any property or asset prior to
the acquisition thereof by any Company or any Subsidiary thereof; provided
that (A) such Lien is not created in contemplation of or in connection
with such acquisition, (B) such Lien does not apply to any other property
or assets of any Company or any Subsidiary thereof, (C) such Lien does not
(I) materially interfere with the use, occupancy and operation of any real
property leased or owned by any Company or Subsidiary thereof, (II)
materially reduce the fair market value of such real property but for such
Lien or (III) result in any material increase in the cost of operating,
occupying, owning or leasing such real property, and (D) any Indebtedness
secured by such Lien is permitted by Section 7.02(b)(xv);
(xvi) Liens arising out of judgments or awards in
respect of which a Company or any of its Subsidiaries shall in good faith
be prosecuting an appeal or proceedings for review in respect of which
there shall be secured a subsisting stay of execution pending such appeal
or proceedings; provided, that the aggregate amount of all such judgments
or awards (and any cash and the fair market value of any property subject
to such Liens) does not exceed $2,500,000 at any time outstanding (net of
any amounts as to which any insurance company or other indemnifying party
(other than the Borrower or an Affiliate of the Borrower) has acknowledged
liability);
(xvii) Liens on cash or cash equivalents to secure
obligations under Hedging Agreements that are not speculative in nature
and are entered into in the ordinary course of business and Liens with
respect to hedging accounts maintained with dealers of NYMEX or similar
contracts requiring the maintenance of cash margin account balances;
provided, that (i) the aggregate amount of all cash and cash equivalents
subject to such Liens does not exceed $5,000,000 at any time, and (ii)
such Hedging Agreements are subject to a perfected, first priority
security interest in favor of the Agent; and
(xviii) other Liens securing obligations, actual or
contingent, in an aggregate amount not greater than $2,500,000 at any time
outstanding.
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(b) Indebtedness. Create, incur or suffer to exist, or permit
any of their Subsidiaries to, or permit the Parent to, in each case, create,
incur or suffer to exist, any Indebtedness, other than:
(i) Indebtedness created under the Loan Documents;
(ii) Indebtedness under the Term Loan Documents,
provided that the aggregate principal amount thereof (less any repayment
or prepayment of the Term Loan) shall not exceed $100,000,000;
(iii) Indebtedness existing on the date hereof, as set
forth in Schedule 7.02(b)(iii) hereto;
(iv) intercompany Indebtedness permitted by Section
7.02(f);
(v) Indebtedness permitted by subsection (c) of this
Section 7.02;
(vi) Indebtedness (other than Indebtedness incurred in
respect of the GTR Financing) of the Companies or any of their
Subsidiaries incurred to finance the acquisition, construction or
improvement of any Fixed Assets or Acquired Entity; provided, that (A)
such Indebtedness is incurred prior to or within 120 days after such
acquisition or the completion of such construction or improvement, and (B)
the aggregate principal amount of Indebtedness of the Companies and their
Subsidiaries permitted by this clause, when combined with the aggregate
principal amount of all Indebtedness permitted by Section 7.02(b)(vii),
shall not exceed $20,000,000 at any time outstanding;
(vii) Indebtedness under Capitalized Leases permitted by
Section 7.02(g); provided, that the aggregate principal amount of
Indebtedness of the Companies and their Subsidiaries permitted by this
clause, when combined with the aggregate principal amount of all
Indebtedness permitted by Section 7.02(b)(vi), shall not exceed
$20,000,000 at any time outstanding;
(viii) Indebtedness under Hedging Agreements;
(ix) Indebtedness under the Subordinated Investor Notes
owing to any Investor, provided that the repayment of the Subordinated
Investor Loan and all interest thereon shall be subordinated to the
payment of the Obligations pursuant to the terms of and evidenced by one
or more Subordinated Investor Notes substantially in the form of Exhibit H
hereto;
(x) Indebtedness constituting Investor Loans not
subordinated pursuant to clause (ix) above, provided that such
Indebtedness shall not exceed $500,000;
(xi) Indebtedness under the GECC Loan Documents,
provided that the aggregate principal amount thereof (less any payments or
prepayments thereof) shall not exceed $34,000,000;
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(xii) Indebtedness secured by Liens permitted by clauses
(x) and (xi) of subsection (a) of this Section 7.02; provided that no
principal of or interest on such Indebtedness may be paid except (A) as
contemplated by and in accordance with Section 7.02(s)(ii), or (B) in
accordance with the express terms and conditions of the Minority Purchase
Documents (as in effect on August 21, 2002), if (I) both before and after
giving effect to any such payment, no Default or Event of Default shall
have occurred and be continuing, (II) both before and after giving effect
to any such payment the Companies are in full compliance with the
financial covenants set forth in Section 7.02(p) hereof, (III) at least 5
days prior to any such payment the Companies deliver to the Agent a
certificate of the chief financial officer of the Parent or Alon USA
stating that the Companies are in full compliance with all of the
provisions of the Loan Documents, (IV) each Company shall remain Solvent,
and (V) Bank Leumi shall have received the corresponding portion of the
Warrant Purchase Price then due and payable;
(xiii) Indebtedness of Alon USA and Alon Refining
incurred under the GTR Loan Documents with respect to the GTR Financing,
on terms and conditions consistent in all material respects with those set
forth on Schedule 7.02(b)(xiii) hereto, provided that the aggregate
principal amount thereof (less any payments or prepayments thereof) shall
not exceed $9,000,000;
(xiv) Indebtedness of any Subsidiary that exists at the
time such Person becomes a Subsidiary and that was not incurred in
contemplation of or in connection with a Permitted Acquisition, in an
aggregate principal amount not in excess of $5,000,000;
(xv) Indebtedness incurred in August 2000 consisting of
loans made by the individual retirement accounts of ▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇
▇▇▇▇▇▇ to Alon Assets; provided that the aggregate principal amount of
such Indebtedness does not exceed $462,000;
(xvi) any extension of maturity, refinancing, renewal or
replacement of any Indebtedness referred to in clauses (ii), (iii), (vi),
(xi), (xii) or (xiii); provided, however, that such extension,
refinancing, renewal or replacement (A) is pursuant to terms that are not
(taken as a whole) less favorable to the Loan Parties (including, without
limitation, with respect to the amortization, maturity, interest rate,
representations and warranties, the covenants, the events of default, and
termination of such Indebtedness) than the terms of the Indebtedness being
extended, refinanced, renewed or replaced and if such Indebtedness was
subordinated to the Obligations hereunder, remains so subordinated on
terms no less favorable to the Lenders, (B) after giving effect to the
extension, refinancing, replacement or renewal of such Indebtedness, the
amount of such Indebtedness outstanding is not greater than the amount of
such Indebtedness outstanding immediately prior to such extension,
refinancing or modification, and (C) the extension, refinancing, renewal
or replacement does not change the Persons liable for such Indebtedness.
Notwithstanding the foregoing proviso, to the extent that the consent of
the Revolving Lenders is required, such consent shall not be unreasonably
withheld; and
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(xvii) unsecured Indebtedness of the Companies in an
aggregate principal amount not to exceed $1,000,000.
(c) Guaranties, Etc. Assume, guarantee, indorse or otherwise
become directly or contingently liable or permit any of their Subsidiaries to,
or permit the Parent to, in each case, assume, guarantee, indorse or otherwise
become directly or contingently liable (including, without limitation, liable by
way of agreement, contingent or otherwise, to purchase, to provide funds for
payment, to supply funds to or otherwise invest in the debtor or otherwise to
assure the creditor against loss), in connection with any Indebtedness of any
other Person, other than:
(i) guaranties in favor of the Agent and the Lenders or
the Term Loan Agent and the Term Loan Lenders;
(ii) guaranties by endorsement of negotiable instruments
for deposit or collection in the ordinary course of business;
(iii) guaranties existing on the date hereof, as set
forth in Schedule 7.02(c)(iii) hereto but not any renewal or other
modification thereof; provided that if the Indebtedness guaranteed by such
guaranty may be refinanced pursuant to the terms of this Agreement, such
guaranty may be renewed;
(iv) guaranties by Alon USA and SCS in favor of GECC
pursuant to the GECC Loan Documents;
(v) guaranties and other contingent obligations under
the Loan Documents; and
(vi) a guaranty by Alon USA of the obligations of Alon
Refining under the GTR Loan Documents.
(d) Merger, Consolidation, Sale of Assets, Etc.
(i) Merge or consolidate with any Person or permit any
of their Subsidiaries to merge or consolidate with any Person; provided,
however, that any Company (other than the Borrower) may be merged into any
other Company (other than the Borrower) or another such Subsidiary (other
than the Borrower) that is a Guarantor Company, or may consolidate with
another such Subsidiary that is a Guarantor Company, so long as (A) no
other provision of this Agreement would be violated thereby, (B) the
Companies give the Agent at least 60 days' prior written notice of such
merger or consolidation and which entity will survive in any such merger
or consolidation and (C) no Default or Event of Default shall have
occurred and be continuing either before or after giving effect to such
transactions.
(ii) Sell, assign, lease, pledge, encumber or otherwise
transfer or dispose of, or permit any of its Subsidiaries to sell, assign,
lease, pledge, encumber or otherwise transfer or dispose of, whether in
one transaction or in a series of related
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transactions, any of its properties, rights or other assets whether now
owned or hereafter acquired to any Person other than pursuant to the Loan
Documents, provided that:
(A) the Borrower and SCS may sell Inventory in the
ordinary course of business;
(B) the Fixed Assets shall be leased to the
Borrower in accordance with the Lease Documents;
(C) the Companies and their Subsidiaries may
dispose of obsolete or worn-out property in the ordinary course of
business; provided, that the aggregate Net Proceeds of all dispositions
described in this clause (C) and clause (F) below do not exceed $1,000,000
in any Fiscal Year of the Companies;
(D) the Companies may engage in Asset Swaps;
provided, however, that (I) the Borrower shall have delivered to the Agent
a certificate of a Responsible Officer certifying that the Borrower, Alon
USA or SCS has performed a review of the condition of and environmental
and other liabilities (current, contingent or otherwise) associated with
the asset or assets to be acquired in such exchange, and the condition of
such acquired assets is not materially inferior to, and the liabilities
associated with such acquired assets are not materially greater than, the
condition of and liabilities associated with the assets to be surrendered
in such exchange, (II) the Companies shall have made arrangements
satisfactory to the Agent to subject the assets acquired in such exchange
to the Liens of the Security Documents not more than 5 Business Days
following the completion of such exchange, (III) any such Asset Swap shall
relate solely to assets located in the United States of America, (IV) any
such Asset Swap by SCS of SCS Collateral Fixed Assets must be for
additional assets of reasonably equivalent value (or higher) to those SCS
Collateral Fixed Assets that have been transferred and shall be subject to
the perfected first priority Lien of a Collateral Agent, and (V) any such
Asset Swap shall comply with Section 7.02(m) and (VI) the Agent receives
not less than five Business Days' prior written notice of such Asset Swap.
(E) the Companies may sell or otherwise dispose of
Fixed Assets, GTR Assets and any assets of the GECC Entities that are
subject to the GECC Loan Documents; provided that in the case of the Fixed
Assets, (I) the aggregate Net Proceeds of such dispositions do not exceed
$20,000,000 in any Fiscal Year of the Companies or $30,000,000 in the
aggregate during the term of this Agreement, (II) the consideration for
any such sale or disposition shall be for at least 75% cash, (III) such
consideration shall be at least equal to the fair market value of the
assets being sold or otherwise disposed of, (IV) no Material Adverse
Effect shall have occurred or shall result therefrom, (V) the Agent
receives not less than five Business Days' prior written notice of any
such sale or disposition, and (VI) 100% of such Net Proceeds shall be
applied in accordance with Section 2.07(d) (after giving effect to any
portion of such Net Proceeds permitted to be retained by the Companies
pursuant to such Section 2.07(d));
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(F) the Companies may sell or otherwise dispose of
other assets to the extent not otherwise provided in this Section 7.02(d)
(other than Inventory and retail stores), for fair market value, provided
that (I) the aggregate Net Proceeds of such dispositions described in
clause (C) above and this clause (F) do not exceed $1,000,000 in any
Fiscal Year of the Companies, (II) both before and immediately after such
sale or disposition, no Default or Event of Default shall have occurred
and be continuing, (III) no Material Adverse Effect shall have occurred or
shall result therefrom, (IV) the Agent receives not less than five
Business Days' prior written notice of any such sale or disposition, and
(V) 100% of such Net Proceeds shall be applied in accordance with Section
2.07(d) (after giving effect to any portion of such Net Proceeds permitted
to be retained by the Companies pursuant to such Section 2.07(d));
(G) the Borrower may enter into trademark license
agreements as a licensor in the ordinary course of business, provided that
the Borrower practice adequate quality control to preserve the validity of
the trademarks licensed;
(H) SCS may sell or transfer retail stores
(together with the related real property) in the ordinary course of its
business, provided that (I) each such sale or transfer shall be for cash
and in an amount at least equal to the fair market value thereof, (II)
100% of the Net Proceeds thereof are applied by SCS within 180 days (x) to
the acquisition of one or more new retail stores or (y) to the Obligations
in accordance with Section 2.07(e), (III) prior to the application of such
proceeds in accordance with the preceding subclause, such proceeds shall
remain on deposit in a Depository Account designated by the Agent and
shall be subject to a perfected, first priority Lien of a Collateral
Agent, (IV) both before and immediately after the consummation of such
sale or transfer, no Default or Event of Default shall have occurred and
be continuing, (V) no Material Adverse Effect shall have occurred or shall
result therefrom, and (VI) the Agent receives not less than five Business
Days' prior written notice of any such sale or transfer;
(I) SCS may close retail stores in the ordinary
course of business, provided that (I) the Agent receives at least five
Business Days' prior written notice thereof, which shall include a
certification that such store is unprofitable or only marginally
profitable, (II) both before and immediately after such closing, no
Default or Event of Default shall have occurred and be continuing, (III)
no Material Adverse Effect shall have occurred or shall result therefrom,
and (IV) the Net Proceeds from the sale or other disposition of any assets
in connection therewith shall be applied in accordance with Section
2.07(e) hereof; and
(J) SCS may assign to SCS Beverage the seventeen
(17) New Mexico liquor licenses held by it, provided that (I) such liquor
licenses are assigned pursuant to documentation reasonably satisfactory to
the Agent and the Lenders, (II) the Agent and the Lenders receive a
collateral assignment of all rights and other interests received by SCS in
connection with such assignment, including, without limitation, the rights
of SCS pursuant to the lease agreement and demand note, such collateral
assignment and related documentation to be in form and substance
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reasonably satisfactory to the Agent and the Lenders, and (III) upon 30
days' prior notice if a Default exists or at any time if an Event of
Default exists, the Agent and the Lenders may prohibit the flow of any
funds from SCS to SCS Beverage.
(iii) Enter into any arrangement, directly or
indirectly, with any Person whereby it shall sell or transfer any
property, real or personal, used or useful in its business, whether now
owned or hereafter acquired, and thereafter rent or lease such property
being sold or transferred unless (A) the sale of such property is
permitted by clause (ii) above and (B) any Capitalized Lease or Liens
arising in connection therewith are permitted by Sections 7.02(a), 7.02(b)
and Section 7.02(g) respectively.
(iv) Issue or sell any Capital Stock, except (A) for the
issuance of Capital Stock that will not result in a Change of Control, and
(B) to the extent that the requirements of Section 2.07, 7.01(b), the
Pledge Agreement and the Intercreditor Agreement will be satisfied
concurrently therewith.
(e) Change in Nature of Business. Make, or permit any of their
Subsidiaries to make, any material change in the nature of its business as
carried on at the date hereof.
(f) Investments, Etc. Make, or permit any of their
Subsidiaries to make, any loan or advance to any Person or purchase, hold or
otherwise acquire, or permit any of their Subsidiaries to purchase, hold or
otherwise acquire, any Capital Stock, other securities, properties, assets or
obligations of, or any interest in, any Person, other than:
(i) Permitted Investments;
(ii) investments existing on the date hereof, as set
forth in Schedule 7.02(f)(ii);
(iii) loans or advances made by the Parent or any
Company to any other Company that is a Loan Party and is organized in the
United States of America, provided that (A) the repayment of all such
loans and advances, and all interest thereon, is subordinated to the
payment of the Obligations pursuant to the terms of and evidenced by one
or more promissory notes substantially in the form of Exhibit F hereto,
(B) such promissory notes shall be pledged to and subject to the
perfected, first priority security interest in favor of a Collateral Agent
in accordance with the Security Documents and the Intercreditor Agreement,
and (C) the aggregate principal amount of all such loans or advances
outstanding at any time shall not exceed (I) in the case of loans and
advances to SCS, $5,600,000, (II) in the case of loans and advances to
Alon USA, the amounts permitted to be paid in accordance with Section
7.02(t), and (III) in the case of loans and advances to any other Loan
Party, $5,000,000;
(iv) loans and advances by any Company to any direct or
indirect parent Company of such Company, provided that on and as of the
date of the making of each such loan and advance, both immediately before
and immediately after the making of such loan or advance (and after giving
effect thereto):
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(A) no Event of Default shall have occurred and be
continuing or would result from such loan or advance;
(B) such loan or advance shall be made in the
ordinary course of business of such lending or advancing Company for the
purpose of (I) paying normal operating expenses of such parent Company in
the ordinary course of business, (II) paying taxes due and owing by such
parent Company, provided that such Company's aggregate contribution to
taxes shall not be greater, nor the aggregate receipt of benefits be less,
than would have been if such Company filed its own tax return, (III)
paying management fees, to the extent expressly permitted by Section
7.02(o), (IV) paying amounts attributable to the Term Loan Credit Basket
in accordance with Section 7.02(i)(x), (V) paying dividends or making
distributions in accordance with Section 7.02(i)(viii), and (V) making any
Restricted Payment hereunder, provided that the Restricted Payment
Conditions have been fully satisfied as of the date of such payment; and
(C) loans and advances made by the Borrower or any
Subsidiary of the Borrower to any direct or indirect parent Company of the
Borrower may only be made if, in addition to the conditions set forth
above, each such loan or advance (I) bears interest at a rate per annum
equal to or greater than the rate per annum payable on the Revolving
Credit Loans hereunder, (II) matures prior to the Termination Date, and
(III) is evidenced by a promissory note in favor of the Borrower or such
Subsidiary (which is endorsed in blank and delivered to the Agent to
perfect the Agent's Liens therein), in the form attached hereto as Exhibit
F (with the blanks appropriately completed), constituting Indebtedness of
the Person that is acting as borrower with respect to such loan or
advance, pursuant to which the Person that is acting as borrower with
respect to such loan or advance expressly waives any right of setoff,
offset, counterclaim or abatement with respect to, and any other defense
or similar right with respect to, payment of its obligations with respect
to such loan, advance and promissory note;
(v) loans or advances to employees of a Company in the
ordinary course in an aggregate amount not to exceed $1,000,000 at any
time outstanding;
(vi) investments after the date of this Agreement in
Subsidiaries not existing on the Effective Date, provided that (A) each
such Subsidiary complies with the requirements of Section 7.01(b) of this
Agreement, and (B) the Required Lenders consent in writing to such
investment;
(vii) the purchase, lease or other acquisition by SCS of
new retail stores (and any related real property) upon five Business Days'
prior notice to the Agent, subject to the other terms and conditions of
this Agreement, including, without limitation, Section 7.02(g) and 7.02(h)
hereof;
(viii) loans or advances made by the Borrower to Alon
SPV, and by Alon SPV to SCS, in an aggregate outstanding principal amount
(including any
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capitalized unpaid interest) not to exceed $5,700,000 at any time (subject
to accrued and capitalized interest thereafter) in connection with the
original acquisition of the SCS business; provided that (A) the repayment
of the loans and advances to Alon SPV, and all interest thereon, is
subordinated to the payment of the Obligations pursuant to the terms of
and evidenced by one or more promissory notes substantially in the form of
Exhibit F hereto, which promissory notes shall be pledged to a Collateral
Agent in accordance with the Security Documents and the Intercreditor
Agreement, and (B) the repayment of the loans and advances to SCS, and all
interest thereon, is subordinated to the payment of the obligations under
the Term Loan Agreement pursuant to the terms of and evidenced by one or
more promissory notes substantially in the form of Exhibit F thereto,
which promissory notes shall be pledged to a Collateral Agent in
accordance with the Security Documents;
(ix) the purchase by Alon USA of (A) the Warrants from
Bank Leumi pursuant to the Warrant Purchase Documents, and (B) the shares
of Capital Stock of Alon Capital owned by the Minority Holders pursuant to
the Minority Purchase Documents;
(x) the Companies may acquire (by construction,
purchase, through a merger or otherwise) (A) assets or a line of business
which constitute or comprise Growth Assets or Additional Assets, or (B)
substantially all of the Capital Stock of a Person that as a result
becomes a wholly owned Subsidiary (other than a Subsidiary of SCS that is
subject to the GECC Loan Documents); provided, that (I) such acquisition
was not preceded by an unsolicited tender offer for such Capital Stock by,
or proxy contest initiated by, any Company or any Subsidiary thereof; (II)
any such Person shall be a going concern and shall be in a similar line of
business as that of a Company as conducted during the current and most
recent calendar year; and (III) at the time of such transaction the
Borrower would be in compliance, as of the last Fiscal Quarter for which
financial statements were delivered pursuant to Section 7.01(a)(i) on a
pro forma basis after giving effect to such acquisition as if it had
occurred at the beginning of the most recent fiscal period of four Fiscal
Quarters for which financial statements were delivered, with the
requirements contained in Section 7.02(p) hereof, as evidenced by a
certificate of a Responsible Officer of the Borrower which shall have been
prepared in good faith and based on reasonably detailed written
assumptions (such acquired Person referred to herein as the "Acquired
Entity"); provided, that at the time of any transaction described in
clause (A) or (B) above (v) both before and after giving effect thereto,
no Event of Default or Default shall have occurred and be continuing; (w)
the aggregate consideration paid in connection with such acquisition, any
related acquisitions pursuant to this paragraph (including any
Indebtedness of the Acquired Entity that is assumed by a Company following
such acquisition and the amount of any forgivable loan owed to any
Acquired Entity and any Indebtedness permitted by Sections 7.02(b)(vi) and
7.02(b)(vii) but excluding any Net Proceeds from asset sales reinvested in
accordance with Sections 2.07(d) and (e) and any Capital Expenditures made
in accordance with Section 7.02(h)) (I) for any Growth Assets shall not
exceed $20,000,000 in the aggregate for all such acquisitions in
accordance with this Section 7.02(f)(x) and (II) for any Additional Assets
shall not exceed $7,500,000 in the aggregate for all such acquisitions in
accordance with this Section 7.02(f)(x), (x) each such Subsidiary complies
with the
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requirements of Section 7.01(b) of this Agreement, (y) any assets acquired
are located in the United States of America and are subject to a perfected
Lien in favor of the Agent, and (z) any new assets or business acquired
pursuant to the terms hereof shall be subject to a field examination and
audit satisfactory to the Agent before any such assets are considered
eligible for inclusion in the Borrowing Base (any acquisition meeting all
the applicable criteria of this paragraph being referred to herein as a
"Permitted Acquisition");
(xi) loans or advances made by the Borrower to Alon USA
in the principal amount of $12,100,000 in connection with the purchase by
Alon USA of the Capital Stock of Alon Capital from the Minority Holders;
provided that the repayment of the loans and advances to Alon USA, and all
interest thereon, pursuant to the terms of and evidenced by one or more
promissory notes substantially in the form of Exhibit F thereto, which
promissory notes shall be pledged to a Collateral Agent in accordance with
the Security Documents;
(xii) investments in Exchanged Inventory made in the
ordinary course of business and consistent with past practices;
(xiii) loans and advances in the ordinary course of
business consistent with past practices to distributors or wholesalers of
products of the Companies or any Subsidiary not to exceed $5,000,000 in
the aggregate outstanding at any time; provided, that any such payment
intangible is subject to the perfected, first priority lien of the Agent;
(xiv) Permitted Payments; and
(xv) other investments, loans and advances by any
Company and its Subsidiaries (other than investments, loans and advances
to Subsidiaries that are not Loan Parties) so long as the aggregate amount
invested, loaned or advanced pursuant to this clause (xiv) (determined
without regard to any write-downs or write-offs of such investments, loans
and advances) does not at any time exceed $1,000,000 in the aggregate.
(g) Lease Obligations. Create, incur or suffer to exist, or
permit any of their Subsidiaries (other than the Subsidiaries of SCS that are
subject to the GECC Loan Documents) to create, incur or suffer to exist, any
obligations as lessee (i) for the payment of rent for any real or personal
property in connection with any sale and leaseback transaction, or (ii) for the
payment of rent for any real or personal property under leases or agreements to
lease other than (A) obligations under Capitalized Leases set forth on Schedule
7.02(g) hereto, (B) obligations under Operating Leases set forth on Schedule
7.02(g) hereto, (C) obligations pursuant to the Lease Documents or the Ground
Leases, (D) Capitalized Leases (other than the existing Capitalized Leases set
forth on Schedule 7.02(g) hereto) which would not cause the aggregate amount of
all obligations under Capitalized Leases entered into after the Effective Date
owing by the Companies in any Fiscal Year to exceed the amounts set forth in
Section 7.02(b)(vii) or Section 7.02(h), and (E) Operating Lease Obligations
which would not cause the aggregate amount of all Operating Lease Obligations
(other than pursuant to operating
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leases set forth on Schedule 7.02(g) hereto) owing by the Companies in any
Fiscal Year to exceed $1,000,000.
(h) Capital Expenditures. Make or commit to make, or permit
any of their Subsidiaries to make or be committed to make, any Capital
Expenditure (by purchase or Capitalized Lease) other than Capital Expenditures
(including obligations under Capitalized Leases) which would not cause the
aggregate amount of all such Capital Expenditures in any period set forth below:
Period Amount
------ ------
2004 $25,000,000
2005 $32,500,000
2006 $25,000,000
2007 $20,000,000
2008 $20,000,000
The amount of permitted Capital Expenditures set forth above in
respect of any Fiscal Year, commencing with the Fiscal Year ending on December
31, 2004, shall be increased by the unused amount of permitted Capital
Expenditures set forth in the table above for the immediately preceding Fiscal
Year (and in determining any such unused amount, Capital Expenditures during any
Fiscal Year will be applied first against any amounts carried forward from the
prior year). The amount of permitted Capital Expenditures set forth above in
respect of the Fiscal Year ending on December 31, 2004,shall be increased, at
the option of the Borrower, by an amount not to exceed $15,000,000, solely in
connection with Capital Expenditures related to the refinery turnaround
currently planned for 2005 and the expansion of the crude unit to 65,000 barrels
per day. In the event that permitted Capital Expenditures in 2004 are increased
as provided in the preceding sentence, the amount of permitted Capital
Expenditures for the Fiscal Year ending on December 31, 2005 shall be
correspondingly reduced. Notwithstanding the foregoing, the amount of Capital
Expenditures set forth above in this Section 7.02(h) that may be incurred in
respect of any Fiscal Year period set forth above shall not include any amounts
expended by the Companies or their Subsidiaries in the consummation of
transactions that constitute Asset Swaps, reinvestments of Net Proceeds in
accordance with Section 2.07 and Section 7.02(d) or Permitted Acquisitions.
(i) Dividends, Prepayments, Etc. Declare or pay any dividends,
purchase or otherwise acquire for value any of its Capital Stock now or
hereafter outstanding, return any capital to its stockholders as such, or make
any other payment or distribution of assets to its stockholders as such, or
permit any of its Subsidiaries to do any of the foregoing or to purchase or
otherwise acquire for value any stock of any Loan Party, make any payment or
prepayment of principal of, premium, if any, or interest on, or redeem, defease
or otherwise retire, any Indebtedness of any Loan Party before its scheduled due
date (other than prepayments of Indebtedness under the Loan Documents) or make
any payment or prepayment of the
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Minority Purchase Price; provided, however, that (1) Permitted Payments may be
made at any time, and (2) so long as no Event of Default shall have occurred and
be continuing or would result therefrom (including, without limitation, under
Sections 7.02(f), 7.02(s) or 7.02(t)):
(i) any Company (other than Alon USA) may pay dividends
to any Company that is the direct or indirect parent company of such
Company in amounts necessary to (A) pay normal operating expenses of such
parent Company in the ordinary course of business, (B) pay management fees
to the extent expressly permitted by Section 7.02(o), (C) pay taxes due
and owing by such parent Company to the extent permitted by Section
7.02(f)(iv)(B), (D) make payments in accordance with clause (viii) and (x)
of this Section 7.02(i), and (E) make Restricted Payments hereunder,
provided that the Restricted Payment Conditions shall have been fully
satisfied as of the date of such payment,
(ii) any Subsidiary of the Borrower may pay dividends to
the Borrower,
(iii) any Company may pay dividends in the form of
common Capital Stock,
(iv) SCS may pay dividends or make distributions to any
Company that is a member of SCS, provided that the Agent receives prior
written notice of any such dividend or distribution,
(v) any Company may make payments permitted by and
subject to Section 7.02(s)(ii) and Alon USA may make payments in
accordance with Section 2.07(d),
(vi) [INTENTIONALLY OMITTED],
(vii) a Company may make distributions to Alon USA to
the extent expressly permitted by and subject to Sections 7.02(t) and
clause (viii) and (x) of this Section 7.02(i);
(viii) subject to compliance by the Companies with the
Restricted Payment Conditions, commencing on January 1, 2006, if the sum,
since the Effective Date, of all amounts prepaid in accordance with the
Term Loan Agreement equals or exceeds 25% of the aggregate principal
amount of the Term Loans outstanding as of the Borrowing Date (as defined
in the Term Loan Agreement), Alon USA may declare and pay dividends, or
make distributions ratably to its equity holders in any Fiscal Year in an
amount equal to 50% of "Excess Cash Flow" (as defined in the Term Loan
Agreement as in effect on the date hereof) for the immediately preceding
Fiscal Year (but only after making any prepayment required to be made
under Section 2.12(d) of the Term Loan Agreement);
(ix) so long as no Event of Default has occurred and is
continuing or would result therefrom, Alon USA and its Subsidiaries may
repurchase their Capital Stock owned by any of their employees or make
payments to their
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employees upon termination of employment in connection with the exercise
of stock options, stock appreciation rights or similar equity based
incentives pursuant to management incentive plans or in connection with
the death or disability of such employees in an aggregate amount not to
exceed $1,000,000 in any Fiscal Year; and
(x) the Borrower may pay Alon USA an aggregate amount
equal to the Term Loan Credit Basket, which shall be deposited with the
Term Loan Agent in an account established on terms and under documentation
satisfactory to the Term Loan Agent; provided, that the following
conditions are satisfied:
(A) the Borrower shall provide the Agent with five
Business Day notice of any payment that will be attributable to the Term
Loan Credit Basket;
(B) both immediately before and immediately after
giving effect to such payment, no Default or Event of Default shall have
occurred or be continuing;
(C) the Borrower shall not be permitted to make
any payments attributable to the Term Loan Credit Basket after December
31, 2004 and all proceeds held on deposit with the Term Loan Agent and
which are attributable to the Term Loan Basket shall be released to
Borrower no later than January 31, 2005.
Notwithstanding anything therein to the contrary, no dividend,
distribution or other payment by any Company may be made to any Investor, any
Affiliate of an Investor (other than a Company) or other shareholder except for
(I) any payment with respect to Restricted Debt in accordance with Section
7.02(s), (II) any payment of management fees in accordance with Section 7.02(o),
and (III) the payment of dividends or distributions (subject to the satisfaction
of the Restricted Payment Conditions) in accordance with Section 7.02(i)(viii).
(j) Sale of Notes, Receivables, Etc. Sell, discount or
otherwise dispose of notes, Accounts Receivable or other obligations owing to a
Company or permit any of their Subsidiaries to do so.
(k) Compromise of Receivables. Compromise or adjust any of the
Accounts Receivable (or extend the time for payment thereof) or grant any
discounts, allowance or credits thereon or permit any of their Subsidiaries to
do so, in each case other than as permitted by Section 8.01(a) of this
Agreement.
(l) Federal Reserve Regulations. Permit any Revolving Credit
Loan or the proceeds of any Revolving Credit Loan under this Agreement or the
proceeds of the Term Loans to be used for any purpose which violates or is
inconsistent with the provisions of Regulation T, U or X of the Board of
Governors of the Federal Reserve System.
(m) Transactions with Affiliates. Enter into or be a party to,
or permit any Subsidiary to enter into or be a party, to any transaction with
any Affiliate of any Company (including, without limitation, a GECC Entity),
except (i) as otherwise expressly provided in this Agreement or pursuant to the
Lease Documents (as in effect on the date hereof), (ii) with respect
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to Asset Swaps relating to SCS Assets, for fair consideration and on terms no
less favorable to SCS as are available from unaffiliated third parties, subject
to 15 days prior written notice to the Agent and upon reasonable request by the
Agent, subject to providing the Agent with an independent third party appraisal
confirming that the value of the assets to be acquired by SCS in such exchange
are equal or exceed the value of the assets to be surrendered in such exchange,
(iii) in the case of any transaction with a Person other than a GECC Entity, in
the ordinary course of business in a manner and to an extent consistent with
past practice and necessary or desirable for the prudent operation of its
business for fair consideration and on terms no less favorable to the Companies
or such Subsidiary as are available from unaffiliated third parties.
(n) Environmental. Permit the use, handling, generation,
storage, treatment, Release or disposal of Hazardous Materials at any property
owned or leased by the Companies except in material compliance with
Environmental Laws and so long as any failure to comply with Environmental Laws
governing such use, handling, generation, storage, treatment, release or
disposal of Hazardous Materials does not result in a Material Adverse Effect.
(o) Management Fees. Pay any management fees or similar fees
to the Investors, provided that management fees and similar fees in an aggregate
amount not exceeding $4,000,000 per annum may be paid to Alon Israel in
quarterly installments in accordance with the Management Agreement if at the
time of any such payment and immediately after giving effect thereto, no Default
or Event of Default has occurred and is continuing.
(p) Financial Covenants.
(i) Minimum Tangible Net Worth. Permit Consolidated Tangible
Net Worth of Alon USA and its Consolidated Subsidiaries plus the aggregate
outstanding principal amount of and accrued and unpaid interest on all
Subordinated Investor Notes of Alon USA and its Consolidated Subsidiaries, in
each case at the end of each Fiscal Quarter, to be less than the amount set
forth below opposite each such Fiscal Quarter end:
Fiscal Quarter End Amount
------------------ -----------
September 30, 2003 $72,000,000
December 31, 2003 $77,000,000
March 31, 2004 $77,000,000
June 30, 2004 $82,000,000
September 30, 2004 $85,000,000
December 31, 2004 $85,000,000
March 31, 2005 $85,000,000
June 30, 2005 $85,000,000
September 30, 2005 $90,000,000
December 31, 2005 $90,000,000
March 31, 2006 $95,000,000
June 30, 2006 $95,000,000
September 30, 2006 $95,000,000
December 31, 2006 $95,000,000
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For each remaining Fiscal Quarter, as follows: Upon receipt of the
financial projections required to be delivered to the Agent pursuant to
Section 7.01(a)(vii) hereof for such Fiscal Quarter, the Borrower and the
Agent shall negotiate in good faith to determine the minimum Consolidated
Tangible Net Worth for Alon USA and its Consolidated Subsidiaries as of
the end of the Fiscal Quarter covered by such financial projections and,
in the event that (I) the Borrower and the Agent are unable to agree upon
the amount of such minimum Consolidated Tangible Net Worth on or before
the date that is 30 days after the date that the Agent has received such
financial projections, or (II) the Borrower fails to deliver financial
projections in accordance with Section 7.01(a)(vii) hereof, the
Consolidated Tangible Net Worth at the end of the Fiscal Quarter covered
by such financial projections shall not be less than the amount set forth
for the last Fiscal Quarter end set forth above.
(ii) Tangible Net Worth to Total Assets. Permit the ratio (the
"Net Worth to Assets Ratio") of (A) the Consolidated Tangible Net Worth of
Alon USA and its Consolidated Subsidiaries at the end of each Fiscal
Quarter set forth below to (B) the Consolidated Total Assets of Alon USA
and its Consolidated Subsidiaries at the end of such period, to be less
than the ratio, expressed as a percentage, set forth below opposite each
such Fiscal Quarter end:
Fiscal Quarter End Percentage
------------------ ----------
June 30, 2003 15%
September 30, 2003 15%
December 31, 2003 15%
March 31, 2004 15%
June 30, 2004 15%
September 30, 2004 15%
December 31, 2004 15%
March 31, 2005 18%
June 30, 2005 18%
September 30, 2005 18%
December 31, 2005 18%
March 31, 2006 22%
June 30, 2006 22%
September 30, 2006 22%
December 31, 2006 22%
For each remaining Fiscal Quarter, as follows: Upon receipt of the
financial projections required to be delivered to the Agent pursuant to
Section 7.01(a)(vii) hereof for such Fiscal Quarter, the Borrower and the
Agent shall negotiate in good faith to determine the minimum Net Worth to
Assets Ratio for Alon USA and its Consolidated Subsidiaries as of the end
of the Fiscal Quarter covered by such financial projections and, in the
event that (A) the Borrower and the Agent are unable to agree upon the
amount of such minimum Net Worth to Assets Ratio on or before the date
that is 30 days after the date that the Agent has received such financial
projections, or (B) the Borrower fails to deliver
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financial projections in accordance with Section 7.01(a)(vii) hereof, the
Net Worth to Assets Ratio at the end of the Fiscal Quarter covered by such
financial projections shall not be less than the amount set forth for the
last Fiscal Quarter end set forth above.
(iii) Funded Debt to EBITDA. Permit the ratio of (A) the
aggregate principal amount of all outstanding Indebtedness for borrowed
money of Alon USA and its Consolidated Subsidiaries as of the end of each
period of four Fiscal Quarters, less freely transferable cash and
Permitted Investments of Alon USA and its Consolidated Subsidiaries not
subject to any Lien (other than a Lien in favor of the Agent) as of the
end of such period of four Fiscal Quarters, to (B) Consolidated EBITDA of
Alon USA and its Consolidated Subsidiaries as of the end of each such
period of four Fiscal Quarters, to be greater than the ratio set forth
opposite the period set forth below during which the last day of such four
Fiscal Quarter Period occurs:
Period Ratio
----------------------------------- ----------
March 31, 2004 to December 31, 2005 4.5 to 1.0
Thereafter 4.0 to 1.0
Solely for the purposes of calculating the ratio set
forth above, if, at the time the ratio is being determined, either Alon
USA or any Subsidiary shall have completed any Permitted Acquisition or
sale of assets permitted under Section 7.02(d) since the beginning of the
relevant four Fiscal Quarter period, the ratio shall be determined on a
pro forma basis as if such Permitted Acquisition or sale of assets, and
any related incurrence or repayment of Indebtedness, had occurred at the
beginning of such period.
(iv) Funded Debt to Tangible Net Worth. Permit the ratio of
(A) the aggregate principal amount of all outstanding Indebtedness for
borrowed money of Alon USA and its Consolidated Subsidiaries, less the
aggregate principal amount of and accrued and unpaid interest on all
outstanding Subordinated Investor Notes of Alon USA and its Consolidated
Subsidiaries, in each case at the end of each Fiscal Quarter, to (B)
Consolidated Tangible Net Worth of Alon USA and its Consolidated
Subsidiaries at the end of each such Fiscal Quarter, to be greater than
3.33:1.0.
(v) Current Ratio. Permit the ratio of Consolidated Current
Assets to Consolidated Current Liabilities of Alon USA and its
Consolidated Subsidiaries to be less than 1.0:1.0 at any time.
(vi) Projected Debt Service Coverage Ratio. Permit the ratio
(the "Debt Service Coverage Ratio") of (A) Consolidated EBITDA of Alon USA
and its Consolidated Subsidiaries, to (B) the sum of (I) interest expense
of Alon USA and its Consolidated Subsidiaries payable for such period
(excluding for all purposes the accrued interest on the Subordinated
Investor Notes for such period), plus (II) all principal of Indebtedness
for borrowed money of Alon USA and its Consolidated Subsidiaries having a
scheduled due date during the next succeeding period of four Fiscal
Quarters, plus (III)
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all amounts payable by Alon USA and its Consolidated Subsidiaries on
Capitalized Lease Obligations having a scheduled due date during such next
succeeding period, minus (IV) unrestricted cash and cash equivalents in
which the Agent has a perfected, first priority security interest, as
security for the Obligations, in each case, as of the end of each period
of four Fiscal Quarters, to be less than 1.25:1.
(q) Fiscal Periods. Change the Fiscal Months, Fiscal Years and
Fiscal Quarters as set forth on Schedule E hereto, except as otherwise agreed to
in writing by the Agent.
(r) Amendment or Waiver of Documents. Agree to any amendment or
other change to (or make any payment consistent with any amendment or other
change to), or waive any of its rights under, any of the Lease Documents, the
License Agreements or the Ground Leases, provided that such consent shall not be
required if (A) in the case of a Ground Lease, no Default or Event of Default
exists or will result from such amendment, modification, waiver or change,
subject to the other terms and conditions of this Agreement, including, without
limitation, Sections 7.02(g) and 7.02(h) hereof, and (B) in all other cases, (I)
no Default or Event of Default exists or will result from such amendment,
modification, waiver or change and (II) such amendment, modification, waiver or
change does not increase the amount of any Indebtedness or other monetary
obligations of the Companies thereunder and existing on the Effective Date, is
not adverse to the interests of the Lenders in any material respect and does not
provide for terms more restrictive in any material respect to the Companies than
those terms in effect prior to such amendment, modification, waiver or change.
(s) Amendment and Waivers of Indebtedness; Prepayment of
Indebtedness.
(i) Agree, or permit any of its Subsidiaries to agree, to any
amendment or make any other change to (or make any payment consistent with
any amendment or other change to), or waive any of its rights under, any
of the Minority Purchase Documents or any of the Subordinated Investor
Notes or refinance any of the Subordinated Investor Loans evidenced by the
Subordinated Investor Notes.
(ii) Directly or indirectly, by deposit of monies or
otherwise, prepay, purchase, redeem, retire, defease or otherwise acquire,
or make any payment on account of any principal of, premium or interest
payable in connection with the payment, prepayment, redemption, defeasance
or retirement of any Indebtedness subordinated to the payment of the
Obligations hereunder, except that on or prior to the last Business Day in
each calendar month, the Companies shall, (A) apply cash in an amount not
less than $1,500,000 to prepay, repay or defease the outstanding principal
amount of the Restricted Debt or (B) irrevocably deposit cash in an amount
not less than $1,500,000 with the Term Loan Agent in a segregated account
(the "Defeasance Account") to provide for the payment of the Restricted
Debt at their respective maturities, in each case, until Alon USA has
deposited in a defeasance or similar trust or account on terms and under
documentation satisfactory to the Agent, or deposited with the Term Loan
Agent, amounts sufficient to repay such notes in full at their respective
maturities; provided, that if Alon USA shall apply or deposit more than
$1,500,000 under clause (A) or (B) above for any calendar month, the
excess amount over $1,500,000 shall, at the option of Alon
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USA, be credited towards Alon USA's obligations under this paragraph (B)
for subsequent months. The Term Loan Agent shall, in accordance with the
Term Loan Agreement, apply all funds in such account to the payment of the
Restricted Debt at their respective maturities, or, at the direction of
Alon USA, to the prepayment thereof, with any remaining funds, after
payment in full of all of the Restricted Debt, being returned to Alon USA.
The Term Loan Agent shall have exclusive dominion and control over the
Defeasance Account, including the exclusive right of withdrawal for
purposes consistent with the provisions of the Intercreditor Agreement.
(iii) Except as otherwise set forth in clause (i) above and in
Section 7.02(b)(xvi), permit any waiver, supplement, modification,
amendment, termination or release of any indenture, instrument or
agreement pursuant to which any Material Indebtedness of the Companies or
any of their Subsidiaries is outstanding if such waiver, supplement,
modification, amendment, termination or release would materially increase
the obligations of the obligor or confer additional material rights on the
holder of such Indebtedness in a manner adverse to the Companies, any of
their Subsidiaries or the Lenders.
(iv) Other than as expressly provided for herein, (A) pay or
offer or commit to pay, or make any distribution, whether in cash,
property, securities or a combination thereof, in respect of, other than
payments of principal and interest as and when due (to the extent not
prohibited by applicable subordination provisions), or directly or
indirectly redeem, repurchase, retire or otherwise acquire for
consideration, or set apart any sum for the aforesaid purposes, any
Indebtedness, or (B) pay in cash any amount in respect of any Indebtedness
or preferred Capital Stock that may at the obligor's option be paid in
kind or in other securities.
(t) Distributions to Alon USA. Notwithstanding anything herein to
the contrary, make, or permit any of its Subsidiaries to make, any payment or
distribution to or for the direct or indirect benefit of Alon USA, whether in
the form of interest or principal payments on Indebtedness, dividends, or other
distributions in respect of Capital Stock, purchase price or redemption price or
other acquisition price with respect to any Capital Stock of any Person, any
management, consulting, guaranty or other fee, or any other transaction the
economic effect of which is similar to the foregoing, other than dividends or
other distributions (A) to pay normal operating expenses of Alon USA in the
ordinary course of business, (B) to pay taxes due and owing by Alon USA to the
extent permitted by Section 7.02(f)(iv)(B) hereof, (C) to pay management fees to
the extent expressly permitted by Section 7.02(o), (D) to pay amounts in
connection with the Term Loan Credit Basket in accordance with Section
7.02(i)(x), (E) to make Permitted Payments, and (F) to make Restricted Payments,
in each case so long as (I) (other than with respect to clause (E)) both
immediately before and immediately after the making of such payment, dividend or
other distribution no Default or Event of Default has occurred and is continuing
or would result from the making of such dividend or other distribution, (II)
such payment, distribution or dividend is otherwise expressly permitted by
Section 7.02(f), 7.02(i), 7.02(o) or 7.02(s), (III) the aggregate amount of all
such payments, dividends and other dividends being made to Alon USA in
accordance with this subsection (t), when combined with cash and cash
equivalents available to Alon USA, does not exceed the amounts required by Alon
USA to pay the obligations described in accordance with clauses (A), (B), (C),
(D), (E) and (F)
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above during the following 30 days, and (IV) in the case of clause (F) above,
Restricted Payment Conditions shall have been fully satisfied as of the date of
such Payment.
(u) Cash at the Alon USA Level. Allow any Company or its
Subsidiaries (other than the Borrower, SCS, and the GECC Entities) to hold cash
and Permitted Investments of more than $2,000,000 in the aggregate for more than
three consecutive Business Days other than any funds held in the Asset
Reinvestment Account, the Defeasance Account, as set forth in the definition of
Debt Service Support Requirement and in connection with the Term Loan Credit
Basket as set forth in Section 7.02(i)(x).
(v) Restrictive Agreements. Enter into, incur or permit to exist any
agreement or other arrangement that prohibits, restricts or imposes any
condition upon (i) the ability of the Companies to create, incur or permit to
exist any Lien upon any of its property or assets, or (ii) the ability of any
Subsidiary to pay dividends or other distributions with respect to any of its
Capital Stock or to make or repay loans or advances to the Companies or any
other Subsidiary or to guaranty Indebtedness of a Company or any other
Subsidiary; provided that the foregoing shall not apply to (A) restrictions and
conditions imposed by law or by any Loan Document, (B) customary restrictions
and conditions contained in agreements relating to the sale of a Subsidiary
pending such sale, provided that such restrictions and conditions apply only to
the Subsidiary that is to be sold and such sale is permitted hereunder, (C)
restrictions and conditions imposed in respect of the Term Loan Documents and
any extensions, renewals or replacements of such Term Loan Documents established
simultaneously with the expiration or termination of such credit facility and
expressly permitted under Section 7.02(b) hereof; provided, however, that the
terms and provisions of any such extensions, renewals or replacements shall not
have any greater adverse effect on the Lenders than the terms and provisions of
the Term Loan Documents existing on the date hereof , (D) clause (i) of the
foregoing shall not apply to restrictions or conditions imposed by any agreement
relating to secured Indebtedness or Capitalized Lease Obligations permitted by
this Agreement if such restrictions or conditions apply only to the property or
assets securing such Indebtedness or Capitalized Lease Obligations and (E)
clause (i) of the foregoing shall not apply to customary provisions in leases
and other contracts restricting the assignment thereof.
(w) Issuance of Capital Stock. Except as otherwise expressly
permitted by the terms of this Agreement, issue, or permit any Company to issue,
(i) any additional shares, partnership interests, member interests or other
Capital Stock of any Company, (ii) any securities convertible voluntarily by the
holder thereof or automatically upon the occurrence or non-occurrence of any
event or condition into, or exchangeable for, any such shares of Capital Stock
or (iii) any warrants, options, contracts or other commitments entitling any
Person to purchase or otherwise acquire any such shares of capital stock.
(x) Modifications of Organizational Documents and Certain Other
Agreements; Etc. Amend, modify or otherwise change its name, jurisdiction of
organization, organizational identification number or FEIN or amend, modify or
otherwise change its certificate of incorporation or bylaws (or other similar
organizational documents), including, without limitation, by the filing or
modification of any certificate of designation, or any agreement or arrangement
entered into by it, with respect to any of its Capital Stock (including
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any shareholders' agreement), or enter into any new agreement with respect to
any of its Capital Stock.
(y) Hedging Agreements. Enter into any Hedging Agreements other than
Hedging Agreements which (i) directly benefit the Companies, (ii) are entered
into in the ordinary course of business, (iii) are not entered into for the
benefit of any other Person (including, without limitation, the Investors), (iv)
are disclosed in each report required to be delivered to the Agent under Section
7.01(a)(ix) hereof and (v) are otherwise permitted under this Agreement.
(z) Bank Accounts. In the case of SCS and its Subsidiaries, maintain
any bank accounts or other depository accounts other than (i) Depository
Accounts in accordance with this Agreement, (ii) the Cash Concentration Account,
(iii) collateral accounts designated by the Agent and (iv) up to four operating
accounts not subject to a Depository Account Agreement with deposits not to
exceed an aggregate amount of $2,000,000 in all such operating accounts for any
period in excess of ten Business Days.
(aa) 7-Eleven. Permit the 7-Eleven License to terminate or consent
to any amendment or other modification thereof or to the 7-Eleven License
Agreement except as otherwise expressly provided in Section 7.02(r) hereof or
take any action, or permit any event or development to occur, which could give
7-Eleven the right to terminate the 7-Eleven License.
ARTICLE VIII
MANAGEMENT, COLLECTION AND STATUS OF
ACCOUNTS RECEIVABLE AND OTHER COLLATERAL.
Section 8.01 Management of Collateral
(a) After the occurrence and during the continuance of an Event of
Default, the WC Collateral Agent may for the benefit of the Lenders send a
notice of assignment and/or notice of the WC Collateral Agent's security
interest to any and all Account Debtors or any third party holding or otherwise
concerned with any of the Collateral, and thereafter the WC Collateral Agent on
behalf of the Lenders shall have the sole right to collect the Accounts
Receivable and/or take possession of the Collateral and the books and records
relating thereto. The Borrower shall not, without prior written consent of the
Agent, grant any extension of time of payment of any Account Receivable,
compromise or settle any Account Receivable for less than the full amount
thereof, release, in whole or in part, any Person or property liable for the
payment thereof, or allow any credit or discount whatsoever thereon, except
prior to the occurrence and during the continuance of an Event of Default, in
the ordinary course of business.
(b) (i) The Companies hereby appoint the WC Collateral Agent and the
Agent or their designee as the Companies attorney-in-fact with power to endorse
any Company's name upon any notes, acceptances, checks, drafts, money orders or
other evidences of payment or Collateral that may come into its possession, to
sign the Borrower's name on any invoice or ▇▇▇▇ of lading relating to any of the
Accounts Receivable, drafts against Account Debtors, assignments and
verifications of Accounts Receivable and notices to Account Debtors,
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to send verification of Accounts Receivable, and upon the occurrence and during
the continuance of an Event of Default, to notify the Postal Service authorities
to change the address for delivery of mail addressed to the Borrower to such
address as the Agent may designate and to do all other acts and things necessary
to carry out this Agreement. All acts of said attorney or designee are hereby
ratified and approved, and said attorney or designate shall not be liable for
any acts of omission or commission (other than acts or omissions constituting
gross negligence or willful misconduct as determined by a final judgment of a
court of competent jurisdiction), nor for any error of judgment or mistake of
fact or law; this power being coupled with an interest is irrevocable until all
of the Revolving Credit Loans and any other Obligations under the Loan Documents
are paid in full and all of the Revolving Credit Commitments are terminated.
(ii) The Agent and the WC Collateral Agent, without notice to
or consent of the Borrower, upon the occurrence and during the continuance
of an Event of Default (A) may ▇▇▇ upon or otherwise collect, extend the
time of payment of, or compromise or settle for cash, credit or otherwise
upon any terms, any of the Accounts Receivable or any securities,
instruments or insurance applicable thereto and/or release the Account
Debtor thereon; (B) is authorized and empowered to accept the return of
the fuel, fuel-by products or other goods represented by any of the
Accounts Receivable, and (C) shall have the right to receive, endorse,
assign and/or deliver in its name or the name of any Company any and all
checks, drafts, and other instruments for the payment of money relating to
the Accounts Receivable. The Borrower's hereby waive notice of
presentment, protest and non-payment of any instrument so endorsed, all in
a commercially reasonable manner and without discharging or in any way
affecting liability hereunder.
(c) Nothing herein contained shall be construed to constitute any
Company as agent of the Agent, the Collateral Agents or the Lenders for any
purpose whatsoever, and the Agent, the Collateral Agents and the Lenders shall
not be responsible or liable for any shortage, discrepancy, damage, loss or
destruction of any part of the Collateral wherever the same may be located and
regardless of the cause thereof (other than from acts or omissions of the Agent,
the Collateral Agents and the Lenders constituting gross negligence or willful
misconduct as determined by a final judgment of a court of competent
jurisdiction). The Agent, the Collateral Agents or the Lenders shall not, under
any circumstances or in any event whatsoever, have any liability for any error
or omission or delay of any kind occurring in the settlement, collection or
payment of any of the Accounts Receivable or any instrument received in payment
thereof or for any damage resulting therefrom (other than acts or omissions of
the Agent, the Collateral Agents or the Lenders constituting gross negligence or
willful misconduct as determined by a final judgment of a court of competent
jurisdiction). The Agent, the Collateral Agents and the Lenders, by anything
herein or in any assignment or otherwise, do not assume any of the Companies'
obligations under any contract or agreement assigned to the Agent or the
Collateral Agents and the Agent, the Collateral Agents or the Lenders shall not
be responsible in any way for the performance by the Companies of any of the
terms and conditions thereof.
(d) If any of the Accounts Receivable includes a charge for any tax
payable to any Governmental Authority, the Agent is hereby authorized (but in no
event obligated) in its discretion to pay the amount thereof to the proper
taxing authority for the
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Borrower' account and to charge the Loan Account therefor. The Borrower shall
notify the Agent if any Accounts Receivable include any taxes due to any such
authority and, in the absence of such notice, the Agent shall have the right to
retain the full proceeds of such Accounts Receivable and shall not be liable for
any taxes that may be due from such Company by reason of the sale and delivery
creating such Accounts Receivable.
Section 8.02 Accounts Receivable Documentation. The Borrower will at
such intervals as the Agent may reasonably require, execute and deliver
confirmatory written assignments of the Accounts Receivable to the Agent and
furnish such further schedules and/or information as the Agent may reasonably
require relating to the Accounts Receivable, including, without limitation,
sales invoices or the equivalent, credit memos issued, remittance advises,
reports and copies of deposit slips and copies of original shipping or delivery
receipts for all merchandise sold. In addition, the Borrower shall notify the
Agent of any non-compliance in respect of the representations, warranties and
covenants contained in Section 8.03 below. The items to be provided under this
Section 8.02 are to be in form reasonably satisfactory to the Agent and are to
be executed and delivered to the Agent from time to time solely for its
convenience in maintaining records of the Collateral. The Borrower's failure to
give any such items to the Agent or the WC Collateral Agent shall not affect,
terminate, modify or otherwise limit the WC Collateral Agent's Lien in the
Collateral. The Borrower shall not re-date any invoice or sale or make sales on
extended dating beyond that customary in the Borrower's industry, and shall not
re-▇▇▇▇ any Accounts Receivable without promptly disclosing the same to the
Agent and providing the Agent with copy of such re-billing, identifying the same
as such. If the Borrower become aware of anything materially detrimental to any
of the Borrower's customers' credit, the Borrower will promptly advise the Agent
thereof.
Section 8.03 Status of Accounts Receivable and Other Collateral.
With respect to Collateral of any Company at the time such Collateral becomes
subject to a Collateral Agent's security interests, such Company covenants,
represents and warrants: (a) the Company shall be the sole owner, free and clear
of all Liens except the Lien in the favor of such Collateral Agent for the
benefit of the Lenders or except as otherwise permitted hereunder, fully
authorized to sell, transfer, pledge and/or grant a security interest in each
and every item of said Collateral; (b) to the knowledge of the Borrower, at the
time created, each Account Receivable shall be a good and valid account
representing an undisputed bona fide indebtedness incurred or an amount
indisputably owed by the Account Debtor therein named, for a fixed sum as set
forth in the invoice relating thereto with respect to an absolute sale and
delivery upon the specified terms of goods sold by the Borrower or work, labor
and/or services theretofore rendered by the Borrower; (c) to the best knowledge
of the Borrower and except as otherwise disclosed to the Agent, no Account
Receivable is subject to any defense, offset, counterclaim, discount or
allowance except as may be stated in the invoice relating thereto or discounts
and allowances as may be customary in the Borrower's business, and, each of such
Accounts Receivable will be paid when due; (d) none of the transactions
underlying or giving rise to any Accounts Receivable shall violate any
applicable state or federal laws or regulations, and all documents relating
thereto shall be legally sufficient under such laws or regulations and shall be
legally enforceable in accordance with their terms; (e) except as disclosed to
the Agent, no agreement under which any deduction or offset of any kind, other
than normal trade discounts, may be granted or shall have been made by the
Borrower at or before the time such Accounts Receivable is created; (f) all
documents and agreements relating to Accounts Receivable shall be true and
correct and in all respects what
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they purport to be; (g) to the best knowledge of the Borrower, all signatures
and endorsements that appear on all documents and agreements relating to
Accounts Receivable shall be genuine and all signatories and endorsers shall
have full capacity to contract; (h) the Companies shall maintain books and
records pertaining to said Collateral in such detail, form and scope as the
Agent shall reasonably require; (i) the Borrower will immediately notify the
Agent if any of its accounts arise out of contracts with the United States or
any department, agency, or instrumentality thereof and will execute any
instruments and take any steps reasonably required by the Agent in order that
all monies due or to become due under any such contract shall be assigned to the
WC Collateral Agent and notice thereof given to the United States Government
under the Federal Assignment of Claims Act; (j) the Companies will, within three
Business Days of learning thereof, report to the Agent any material loss or
destruction of, or substantial damage to, any of the Collateral, and any other
matters affecting the value, enforceability or collectibility of any of the
Collateral; (k) if any amount payable under or in connection with any Account
Receivable is evidenced by a promissory note or other instrument, as such term
is defined in the Uniform Commercial Code, such promissory note or instrument
shall be pledged, endorsed, assigned and delivered to the WC Collateral Agent as
additional Collateral within three Business Days; (l) the Borrower shall not
redate any invoice or sale or make sales on extended dating beyond that which is
customary in the ordinary course of its business and in the relevant industry;
(m) the Borrower shall conduct a physical count of its Inventory at such
intervals as the Agent may reasonably request and the Borrower shall promptly
supply the Agent with a copy of such count accompanied by a report of the value
(based on market value) of such Inventory; and (n) the Companies are not and
shall not be entitled to pledge the Agent's or the Lenders' credit on any
purchases for or any purpose whatsoever.
Section 8.04 Collateral Custodian. Upon the occurrence and during
the continuance of an Event of Default, the Collateral Agents may at any time
and from time to time employ and maintain in the premises of the Companies a
custodian selected by the Collateral Agents who shall have full authority to do
all acts necessary to protect the Collateral Agents' interests. The Companies
hereby agree to cooperate with any such custodian and to do whatever the
Collateral Agents may reasonably request to preserve the Collateral. All
reasonable costs and expenses incurred by the Collateral Agents, by reason of
the employment of the custodian, shall be charged to the Loan Account.
ARTICLE IX
THE AGENT
Section 9.01 Authorization and Action. Each Lender (and each
subsequent holder of any Revolving Credit Notes by its acceptance thereof)
hereby irrevocably appoints and authorizes IDB, in its capacity as the Agent,
(i) to receive on behalf of each Lender any payment of principal of or interest
on the Revolving Credit Notes outstanding hereunder and all other amounts
accrued hereunder paid to the Agent, and, subject to Section 2.05 of this
Agreement and the other provisions of this Agreement, to distribute promptly to
each Lender its Pro Rata Share of all payments so received, (ii) to distribute
to each Lender, if so determined by the Agent, copies of all material notices
and agreements received by the Agent and not required to be delivered to each
Lender pursuant to the terms of this Agreement, provided that the Agent shall
not have any liability to the Lenders for the Agent's failure to distribute any
such notice or
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agreements to the Lenders, and (iii) subject to Section 12.03 of this Agreement,
to take such action as the Agent deems appropriate on its behalf to administer
the Revolving Credit Loans, Letters of Credit and the Loan Documents and to
exercise such other powers delegated to the Agent by the terms hereof or the
Loan Documents (including, without limitation, the power to give or to refuse to
give notices, waivers, consents, approvals and instructions and the power to
make or to refuse to make determinations and calculations), together with such
powers as are reasonably incidental thereto to carry out the purposes hereof and
thereof. As to any matters not expressly provided for by this Agreement and the
other Loan Documents (including, without limitation, enforcement or collection
of the Revolving Credit Notes), the Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Required Lenders, and such instructions of the
Required Lenders shall be binding upon all Lenders and all holders of Revolving
Credit Notes; provided, however, that the L/C Issuer shall not be required to
refuse to honor a drawing under any Letter of Credit and the Agent shall not be
required to take any action which, in the reasonable opinion of the Agent,
exposes the Agent to liability or which is contrary to this Agreement or any
Loan Document or applicable law.
Section 9.02 Borrower's Default. In the event that (i) the Borrower
fails to pay when due the principal of or interest on any Revolving Credit
Notes, Revolving Credit Loan or any Reimbursement Obligation or any amount
payable hereunder, or (ii) the Agent receives written notice of the occurrence
of an Event of Default, the Agent shall promptly give written notice thereof to
the Lenders, and the Agent shall take such action with respect to such Event of
Default as it shall be directed to take by the Required Lenders; provided,
however, that, unless and until the Agent shall have received such directions
and except as otherwise expressly provided in this Agreement, the Agent may take
such action or refrain from taking such action hereunder or under the other Loan
Documents with respect to an Event of Default or Default, as it shall deem
advisable in the best interest of the Lenders.
Section 9.03 Reliance, Etc. None of the Agent or any of its
directors, officers, agents, Affiliates or employees shall be liable for any
action taken or omitted to be taken by it under or in connection with this
Agreement or the other Loan Documents, except for its own gross negligence or
willful misconduct as determined by a final judgment of a court of competent
jurisdiction. Without limiting the generality of the foregoing, the Agent (i)
may treat the payee of any Revolving Credit Notes as the holder thereof until
the Agent receives written notice of the assignment or transfer thereof,
pursuant to Section 12.08 hereof, signed by such payee and in form satisfactory
to it; (ii) may consult with legal counsel (including, without limitation,
counsel to the Borrower), independent public accountants, and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (iii) makes no warranty or representation to any Lender
and shall not be responsible to any Lender for any statements, certificates,
warranties or representations made in or in connection with this Agreement or
the other Loan Documents; (iv) shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or
conditions of this Agreement or the other Loan Documents on the part of any
Person or to inspect the Collateral or other property (including, without
limitation, the books and records) of any Person; (v) shall not be responsible
to any Lender for the due execution, legality, validity, enforceability,
genuineness, sufficiency or
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value of this Agreement or the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; (vi) shall not be deemed to have
made any representation or warranty regarding the existence, value or
collectibility of the Collateral, the existence, priority or perfection of the
Lenders' Lien thereon, or the Borrowing Base or any certificate prepared by the
Borrower in connection therewith, nor shall the Agent be responsible or liable
to the Lenders for any failure to monitor or maintain the Borrowing Base or any
portion of the Collateral; and (vii) shall incur no liability under or in
respect of this Agreement or the other Loan Documents by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telegram,
telecopy, cable or telex) believed by it to be genuine and signed or sent by the
proper party or parties.
Section 9.04 IDB. With respect to the Revolving Credit Loans made by
it, the Revolving Credit Notes issued to it and its participation in the Letters
of Credit, IDB and its Affiliates shall have the same rights and powers under
this Agreement as any other Lender and may exercise the same as though it were
not the Agent, the FA Collateral Agent, the WC Collateral Agent, or the L/C
Issuer; and the term "Lender" or "any Lenders" shall, unless otherwise expressly
indicated, include IDB in its individual capacity. IDB and its Affiliates may
accept deposits from, lend money to, act as trustee or paying agent under
indentures of, and generally engage in any kind of business with, the Borrower
or any Guarantor, any of their Affiliates, or any Person who may do business
with or own securities of the Borrower or any Company, or any of their
Affiliates, all as if IDB were not the Agent, the FA Collateral Agent, the WC
Collateral Agent or the L/C Issuer and without any duty to account therefor to
any Lenders.
Section 9.05 Lender Credit Decision. Each Lender acknowledges that
it has, independently and without reliance upon the Agent or any other Lender,
made its own credit analysis and decision to enter into this Agreement. Each
Lender also acknowledges that it will, independently and without reliance upon
the Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Loan Documents.
Section 9.06 Indemnification. Each Lender agrees to indemnify and
hold harmless the Agent and the Collateral Agents (to the extent not reimbursed
by the Borrower or any Guarantor), ratably according to the Pro Rata Shares of
each Lender, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by, or
asserted against the Agent or the Collateral Agents in any way relating to or
arising out of this Agreement or the other Loan Documents or any action taken or
omitted by the Agent or the Collateral Agents under this Agreement or the other
Loan Documents; provided, however, that no Lender shall be liable to the Agent
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements for which there has
been a final judicial determination that such resulted from the Agent's gross
negligence or willful misconduct. Without limiting the foregoing, each Lender
agrees to reimburse the Agent and the Collateral Agents promptly upon demand for
its ratable share of any out-of-pocket expenses (including reasonable counsel
fees, disbursements and other charges) incurred by the Agent or the Collateral
Agents in connection with the preparation, execution, delivery,
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administration, modification, amendment or enforcement (whether through
negotiation, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement or the other Loan Documents, to
the extent that the Agent or any Collateral Agent, as applicable, is not
reimbursed in full for such expenses by the Borrower. The obligations of each
Lender under this Section 9.06 shall survive the termination of this Agreement
and the other Loan Documents and the payment of all other obligations of the
Agent, the Collateral Agents and the Lenders under this Agreement and the other
Loan Documents.
Section 9.07 Successor Agent. The Agent may resign at any time after
the date which is eighteen months after the Existing Effective Date by giving
written notice thereof to the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall have the right to appoint a successor
Agent reasonably acceptable to the Borrower, with such rights and obligations
hereunder as those previously held by the retiring Agent, provided, the
successor Agent may be appointed by the Required Lenders without any
consultation with or consent of the Companies or any other Loan Party if an
Event of Default or Default has occurred and is continuing. If no successor
Agent shall have been so appointed by the Required Lenders, been accepted by the
Companies, and shall have accepted such appointment, within 30 days after the
retiring Agent's giving of notice of resignation, then the retiring Agent may,
on behalf of the Lenders, appoint a successor Agent, which shall be a Lender or
a commercial bank or other financial institution organized under the laws of the
United States of America or any State thereof and having a combined 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 thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent and the retiring Agent shall be discharged from its duties
and obligations under this Agreement and the other Loan Documents. After any
retiring Agent's resignation hereunder as the Agent, the provisions of this
Article IX 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 the other Loan
Documents.
Section 9.08 Collateral Matters.
(a) The Agent may from time to time, make such reasonable
disbursements and advances ("Agent Advances") which the Agent, in its sole
discretion, deems necessary or desirable to preserve or protect the Collateral
or any portion thereof, to enhance the likelihood or maximize the amount of
repayment by the Borrower, any Guarantor or other Person of the Revolving Credit
Loans, Reimbursement Obligations or Letters of Credit and other Obligations or
to pay any other amount chargeable to the Borrower or Guarantor pursuant to the
terms of this Agreement, including, without limitation, costs, fees and expenses
as described in Section 12.05. The Agent Advances shall be repayable on demand
and be secured by the Collateral. The Agent Advances shall not constitute
Revolving Credit Loans but shall otherwise constitute Obligations hereunder.
Without limitation to its obligations pursuant to Section 9.06, each Lender
agrees that it shall make available to the Agent, upon the Agent's demand, in
Dollars in immediately available funds, the amount equal to such Lender's Pro
Rata Share of each such Agent Advance. If such funds are not made available to
the Agent by such Lender the Agent shall be entitled to recover such funds, on
demand from such Lender together with interest thereon, for each day from the
date such payment was due until the date such amount is paid to the Agent, at
the Federal Funds Rate for three Business Days and thereafter at the Base Rate.
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The Agent shall use reasonable efforts to notify the Borrower and the Lenders
promptly after any such Agent Advance.
(b) The Agent shall have no obligation whatsoever to any
Lenders to assure that the Collateral exists or is owned by the Borrower or any
Guarantor or is cared for, protected or insured or has been encumbered or that
the Liens granted to the Collateral Agents herein or pursuant hereto have been
properly or sufficiently or lawfully created, perfected, protected or enforced
or are entitled to any particular priority, or to exercise at all or in any
particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of the rights, authorities and powers granted or
available to the Agent in this Section 9.08 or in any of the Loan Documents, it
being understood and agreed that in respect of the Collateral, or any act,
omission or event related thereto, any of the Agent and the Collateral Agent may
act in any manner it may deem appropriate, in its sole discretion, given the
Agent's and the Collateral Agents' own interest in the Collateral as one of the
Lenders and that the Agent and the Collateral Agents shall have no duty or
liability whatsoever to any other Lender other than for acts or omissions
constituting gross negligence or willful misconduct as determined by a final
judgment of a court of competent jurisdiction.
(c) The Lenders agree to authorize the Collateral Agents to
release any Lien granted to or held by the Collateral Agents upon any Collateral
upon termination of the Revolving Credit Commitments and payment and
satisfaction of all Revolving Credit Loans and Letter of Credit Obligations
(whether or not due) and all other Obligations which have matured and which the
Agent has been notified in writing are then due and payable; or constituting
property being sold or disposed of in compliance with Section 7.02(d)(ii) hereof
(and the Collateral Agents may rely conclusively on any such certificate,
without further inquiry); or constituting property in which the Companies owned
no interest at the time the Lien was granted or at any time thereafter; or
(except as otherwise provided in Section 12.03 of this Agreement) if approved,
authorized or ratified in writing by the Required Lenders. To the extent a
Company sells or disposes of any Collateral in accordance with Section
7.02(d)(ii) or with the consent of the Required Lenders, such Collateral in each
case shall be sold or otherwise disposed of free and clear of the Liens created
by the Loan Documents (it being understood that the Liens created by the Loan
Documents shall continue in all cash and noncash proceeds), and the Collateral
Agents shall execute and deliver such releases as the applicable Company may
reasonably request to evidence the termination of such Liens (which release
shall not affect in any respect the obligations of any Loan Party under any Loan
Document, shall be at the sole cost and expense of such Company and shall be
without representation, warranty or recourse of any kind). Without in any manner
limiting the Collateral Agents' authority to act without any specific or further
authorization or consent by the Required Lenders, upon request by the Collateral
Agents at any time, the Lenders shall confirm in writing the Collateral Agents'
authority to release particular types or items of Collateral pursuant to this
Section 9.08(c).
(d) So long as no Event of Default has occurred and is
continuing or would result therefrom (including without limitation, under
Section 2.07(c) hereof), the Borrower may at any time notify the Agent in
writing that (i) it has elected to permanently reduce the Revolving Loan
Commitments by an amount equal to $7,000,000 and (ii) all Liens encumbering the
SCS Assets and the Capital Stock of SCS created by the Loan Documents in favor
of the Collateral Agents must be released. The Collateral Agents shall execute
and deliver
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such releases as SCS may reasonably request to evidence the termination of their
Liens on any SCS Assets and the Capital Stock of SCS (which releases shall not
affect in any respect the obligations of any other Loan Party under any Loan
Document, shall be at the sole cost and expense of the Companies and shall be
without representation, warranty or recourse of any kind). Notwithstanding
anything herein to the contrary, the Collateral Agents shall not be obligated to
deliver any such releases unless the Agent shall have received, (x) in form and
substance satisfactory to the Agent, an amendment to this Agreement to, among
other matters, (A) reduce the SCS Fixed Asset Credit to zero and delete
reference thereto, (B) at the election of the Borrower, (1) terminate the
Guaranty by SCS, prohibit all payments and other distributions from any of the
Companies to SCS, and restrict such other transactions between the Companies and
SCS as the Agent or the Lenders may determine in their sole discretion or (2)
acknowledge and ratify the Guaranty by SCS of the Obligations on an unsecured
basis, (C) release SCS from the affect of the covenants contained in Article VII
of this Agreement, and (D) make such other amendments as the Agent and the
Lenders may deem necessary in their reasonable discretion, (y) evidence,
satisfactory to the Agent, that all Liens in favor of the Term Loan Agent
encumbering the SCS Assets have been terminated and released, and (z) such other
agreements, documents and opinions as Agent may reasonably request. Without in
any manner limiting the Collateral Agents' authority to act without any specific
or further authorization or consent by the Required Lenders, upon request by the
Collateral Agents at any time, the Lenders shall confirm in writing the
Collateral Agents' authority to release their Liens with respect to the SCS
Assets pursuant to this Section 9.08(d).
ARTICLE X
EVENTS OF DEFAULT
Section 10.01 Events of Default. If any of the following Events of
Default shall occur and be continuing:
(a) The Borrower shall fail to pay (i) any principal on any
Revolving Credit Loan, any Agent Advance or any Reimbursement Obligation when
due (whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise) or (ii) any interest thereon or any fee or other amount when due
under any Loan Document and, in the case of this clause (ii), such failure shall
continue unremedied for more than three Business Days;
(b) Any representation or warranty made by any Loan Party or
any officer of such Loan Party under or in connection with any Loan Document
(other than any representation and warranty with respect to the SCS Assets in
Schedule J hereto) shall have been incorrect in any material respect when made;
(c) (i) Any Loan Party (other than SCS) shall fail to perform
or observe (A) any covenant contained in subparagraphs (i), (ii), (iii), (v),
(vii), (viii), (xii) or (xix) of Section 7.01(a) hereof and such failure shall
continue unremedied for more than 10 days, (B) any covenant contained in
subsections (b), (c), (e), (g), (j) and (k) of Section 7.01 hereof and such
failure shall continue unremedied for more than five days, or (C) any other
covenant contained in Section 7.01 hereof, (ii) SCS shall fail to perform or
observe any covenant set forth in Section 7.01 with respect to any SCS Asset and
such failure shall continue unremedied for
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more than 30 days; provided, that such cure period shall be extended by an
additional 30 days, for a total of 60 days, if (A) such Default cannot be cured
solely by the payment of money, (B) such Default could not be cured within 30
days, (C) SCS promptly commences the cure within the initial 30 days and
thereafter diligently and continuously prosecutes the cure of such Default, and
(D) such Default is of such nature that it is capable of being cured within 60
days, or (iii) any Company shall fail to perform or observe any covenant
contained in Section 7.02 hereof or Section 5 of the Security Agreements;
(d) (i) Any Loan Party shall fail to perform or observe any
other term, covenant or agreement, other than as set forth above in Sections
10.01(a), (b) and (c) above, contained in any Loan Document (other than any
term, covenant or agreement contained in any SCS Mortgage) to be performed or
observed by such Loan Party and such failure, if capable of being remedied,
shall remain unremedied for 15 days, (ii) SCS shall fail to perform or observe
any material term, covenant or agreement contained in any SCS Mortgage and such
failure, if capable of being remedied, shall remain unremedied for 15 days, or
(iii) SCS shall fail to perform or observe any other term, covenant or agreement
contained in any SCS Mortgage and such failure, if capable of being remedied,
shall remain unremedied for (A) 30 days after the date on which the Agent
notifies SCS of such failure or (B) 90 days after the date on which the Agent
notifies SCS of such failure; provided that in the case of this clause (B), (w)
such failure cannot be cured solely by the payment of money, (x) such failure
cannot be cured within 30 days, (y) such failure is capable of being remedied
within 90 days from the date on which the Agent notifies SCS of such failure,
and (z) SCS promptly commences to cure such failure within the initial 30 day
period and thereafter diligently and continuously prosecutes the cure of such
failure;
(e) Any Loan Party shall fail to pay any principal or interest
on any of its Indebtedness (excluding Indebtedness evidenced by the Loan
Documents) in excess of $2,500,000 or any interest or premium thereon, when due
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise) and such failure shall continue after the applicable grace period, if
any, specified in the agreement or instrument relating to such Indebtedness, or
any other default under any agreement or instrument relating to any such
Indebtedness, or any other event, shall occur and shall continue after the
applicable grace period, if any, specified in such agreement or instrument, if
the effect of such default or event is to accelerate, or to permit the
acceleration of, the maturity of such Indebtedness; or any such Indebtedness in
excess of such amount shall be declared to be due and payable, or required to be
prepaid (other than by a regularly scheduled required prepayment), prior to the
stated maturity thereof;
(f) Any Loan Party (i) shall institute any proceeding or
voluntary case seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any law relating to
bankruptcy, insolvency, reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee,
custodian or other similar official for such Loan Party or for any substantial
part of its property, (ii) shall be generally not paying its debts as such debts
become due, or shall admit in writing its inability to pay its debts generally,
(iii) shall make a general assignment for the benefit of creditors, or (iv)
shall take any action to authorize or effect any of the actions set forth above
in this subsection (f);
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(g) Any proceeding shall be instituted against any Loan Party
seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar official for such
Loan Party or for any substantial part of its property, and either such
proceeding shall remain undismissed or unstayed for a period of 45 days or any
of the actions sought in such proceeding (including, without limitation, the
entry of an order for relief against it or the appointment of a receiver,
trustee, custodian or other similar official for it or for any substantial part
of its property) shall occur;
(h) Any provision of any Loan Document shall at any time for
any reason be declared by a court of competent jurisdiction to be null and void,
or the validity or enforceability thereof shall be contested by any Loan Party,
or a proceeding shall be commenced by any Loan Party or any Governmental
Authority or other regulatory body having jurisdiction over such Loan Party,
seeking to establish the invalidity or unenforceability thereof, or any Loan
Party shall deny in writing that such Loan Party has any liability or obligation
purported to be created under any Loan Document;
(i) Any Security Document, after delivery thereof pursuant
hereto, shall for any reason fail or cease to create a valid and perfected and,
except to the extent permitted by the terms hereof or thereof, first priority
Lien on or security interest in any Collateral purported to be covered thereby;
(j) One or more judgments or orders (other than a judgment or
award described in subsection (f) or (g) of this Section 10.01) for the payment
of money exceeding $2,500,000 in the aggregate for the Loan Parties, shall be
rendered against any Loan Party and either (i) enforcement proceedings shall
have been commenced by any creditor upon any such judgment or order, or (ii)
there shall be any period of 30 consecutive days during which a stay of
enforcement of any such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect;
(k) Any Company or any of its ERISA Affiliates shall have made
a complete or partial withdrawal from a Multiemployer Plan, and, as a result of
such complete or partial withdrawal, such Loan Party or such ERISA Affiliate
incurs a withdrawal liability in an annual amount exceeding $2,500,000; or a
Multiemployer Plan enters reorganization status under Section 4241 of ERISA,
and, as a result thereof, such Loan Party's or such ERISA Affiliate's annual
contribution requirement with respect to such Multiemployer Plan increases in an
annual amount exceeding $2,500,000;
(l) Any Termination Event with respect to any Employee Plan
shall have occurred, and, 30 days after notice thereof shall have been given to
any Company by the Agent, (i) such Termination Event (if correctable) shall not
have been corrected, and (ii) the then current value of such Employee Plan's
vested benefits exceeds the then current value of assets allocable to such
benefits in such Employee Plan by more than $2,500,000 (or, in the case of a
Termination Event involving liability under Section 409, 502(i), 502(l), 515,
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4971 or 4975 of
the Internal Revenue Code, the liability is in excess of such amount);
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(m) An "Event of Default" (as defined in the Term Loan
Agreement) shall have occurred under the Term Loan Agreement or any other Term
Loan Document;
(n) A Change of Control shall have occurred;
(o) Any Loan Party is enjoined, restrained or in any way
prevented by the order of any court or any administrative or regulatory agency
from conducting all or any material part of its business for more than fifteen
(15) days;
(p) Any material damage to, or loss, theft or destruction of,
any Collateral, whether or not insured, or any strike, lockout, labor dispute,
embargo, condemnation, act of God or public enemy, or other casualty which
causes, for more than fifteen (15) consecutive days, the cessation or
substantial curtailment of revenue producing activities at any facility of the
Borrower or any other Loan Party, if any such event or circumstance could
reasonably be expected to have a Material Adverse Effect;
(q) The loss, suspension or revocation of, or failure to
renew, any license or permit now held or hereafter acquired by the Borrower or
any other Loan Party, if such loss, suspension, revocation or failure to renew
could reasonably be expected to have a Material Adverse Effect;
(r) The indictment of the Borrower or any other Loan Party or
any chief executive officer, chief financial officer, president or similar
material officer thereof under any criminal statute, or commencement of criminal
or civil proceedings against the Borrower or any other Loan Party, pursuant to
which statute or proceedings the penalties or remedies sought or available
include forfeiture to any government or governmental agency, authority or
instrumentality of any material portion of the property of the Borrower or such
other Loan Party or in the case of a material officer, imprisonment;
(s) The occurrence of any event or series of events which has
had a Material Adverse Effect;
(t) (i) Borrower shall fail to make any lease payment under
the Lease Agreement as and when due and payable, (ii) any other breach, default,
event of default or termination shall occur under any License Agreement, Lease
Document, or other Material Contract after giving effect to applicable grace
periods, if any, contained in any such License Agreement, Lease Document, or
other Material Contract that gives any third party the right to terminate any
such License Agreement, Lease Document, or other Material Contract, or (iii) a
breach, default, event of default or termination shall occur under one or more
Ground Leases that gives the applicable lessors the right to terminate such
Ground Leases, except to the extent the termination of such Ground Leases,
either individually or when aggregated with all other Ground Leases terminated
in any 12-month period, could not reasonably be expected to have a Material
Adverse Effect;
(u) The Term Loan Agreement shall be terminated for any reason
(other than the repayment of all obligations thereunder) and a successor or
replacement term loan agreement in form and substance acceptable to the Agent
has not become effective;
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(v) CSFB shall no longer be the Term Loan Agent and the
successor Term Loan Agent shall not have entered into a lien intercreditor
agreement and collateral access agreement with the Agent reasonably acceptable
to the Agent;
(w) An "Event of Default" (as defined in the Warrant Purchase
Documents) shall have occurred under any Warrant Purchase Document;
(x) (i) An "Event of Default" (as defined in the GECC Loan
Documents) shall have occurred under any GECC Loan Document or (ii) an "Event of
Default" (as defined in either Master Lease) shall occur under a Master Lease;
or
(y) A "Default" or "Event of Default" shall have occurred
under any GTR Loan Document;
then, and in any such event, the Agent may and, upon the direction of the
Required Lenders, shall by notice to the Borrower, (i) declare the Total
Commitment to be reduced to zero, whereupon the Total Commitment shall forthwith
be reduced to zero, (ii) declare all Revolving Credit Loans and all
Reimbursement Obligations, all interest thereon and all other amounts payable
under this Agreement to be forthwith due and payable, whereupon the Revolving
Credit Loans, all Reimbursement Obligations, all such interest and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by each Company; provided, however, that upon the occurrence of any Event
of Default described in subsections (f) or (g) of this Section 10.01, the
Revolving Credit Loans, all Reimbursement Obligations, all such interest and all
such amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are expressly waived
by each Company, and (iii) exercise any and all of its other rights under
applicable law, hereunder and under the other Loan Documents. Upon demand by the
Agent after the occurrence and during the continuation of any Event of Default,
the Borrower shall deposit with the Agent with respect to each Letter of Credit
then outstanding cash in an amount equal to 105% of the greatest amount for
which such Letter of Credit may be drawn. Such deposits shall be held by the
Agent in the Letter of Credit Collateral Account as security for, and to provide
for the payment of, the Letter of Credit Obligations.
ARTICLE XI
GUARANTY
Section 11.01 Guaranty. Each Guarantor Company hereby (i)
irrevocably, absolutely and unconditionally guarantees the prompt payment, as
and when due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), of (A) all the Obligations, including,
without limitation, all amounts now or hereafter owing in respect of the Loan
Documents, whether for principal, interest (including interest accruing on or
after the filing of any petition in bankruptcy or for reorganization relating to
the Borrower whether or not a claim for post-filing interest is allowed in such
proceeding), fees, expenses, indemnifications or otherwise, and (B) all
indebtedness, obligations and other liabilities, direct or indirect, absolute or
contingent, now existing or hereafter arising of the Borrower to the Agent,
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the Collateral Agents, the Lenders or the L/C Issuer under the Loan Documents
and (ii) agrees to pay any and all reasonable expenses (including reasonable
counsel fees and expenses) incurred by the Agent, the Collateral Agents, the
Lenders or the L/C Issuer in enforcing its rights under this Article XI.
Section 11.02 Obligations Unconditional.
(a) Each Guarantor Company hereby guarantees that the
Obligations will be paid strictly in accordance with the terms of the Loan
Documents, regardless of any law, regulation or order now or hereafter in effect
in any jurisdiction affecting any of such terms or the rights of the Agent, the
Lenders or the L/C Issuer with respect thereto. Each such Guarantor Company
agrees that its guarantee constitutes a guaranty of payment when due and not of
collection, and waives any right to require that any resort be had by the Agent,
the Collateral Agents, the Lenders or the L/C Issuer to any Collateral. The
obligations of each Guarantor Company under this Article XI are independent of
the obligations of the Borrower under this Agreement and the other Loan
Documents (and the obligations of the Investors under their Guaranties) and a
separate action or actions may be brought and prosecuted against the Guarantor
Companies to enforce this Article XI irrespective of whether any action is
brought against the Borrower or the Investors or whether the Borrower or the
Investors are joined in any such action. The liability of the Guarantor
Companies hereunder shall be absolute and unconditional, irrespective of: (i)
any lack of validity or enforceability of any Loan Document or any agreement or
instrument relating thereto; (ii) any extension or change in the time, manner or
place of payment of, or in any other term in respect of, all or any of the
Obligations (including, without limitation, any extension for longer than the
original period), or any other amendment or waiver of or consent to any
departure from any provision of any Loan Document (including the creation or
existence of any Obligations in excess of the amounts permitted by any lending
formulas contained in this Agreement); (iii) any exchange or release of, or
non-perfection of any Lien on, any Collateral, or any release or amendment or
waiver of or consent to any departure from any other guaranty, for all or any of
the Obligations; or (iv) the existence of any claim, set off, defense or other
right that the Guarantor Companies may have against any Person, including the
Agent, the Collateral Agents, the L/C Issuer or the Lenders; (v) any other
circumstance which might otherwise constitute a defense available to, or a
discharge of, the Borrower or any other Guarantor in respect of the Obligations
or of the Guarantor Companies in respect hereof.
(b) This Guaranty (i) is a continuing guaranty and shall
remain in full force and effect until such date on which all of the Obligations
and all other expenses to be paid by the Borrower pursuant hereto shall have
been satisfied in full after the Total Commitment shall have been terminated,
(ii) shall continue to be effective or shall be reinstated, as the case may be,
if at any time any payment of any of the Obligations is rescinded or must
otherwise be returned by the Agent, the Collateral Agents, the Lenders or the
L/C Issuer upon the insolvency, bankruptcy or reorganization of any Borrower or
any Guarantor or otherwise, all as though such payment had not been made, and
(iii) shall be binding upon each Guarantor Company, its successors and assigns.
Section 11.03 Waivers. Each Guarantor Company hereby waives, to the
extent permitted by applicable law, (i) promptness and diligence, (ii) notice of
acceptance and notice of the incurrence of any Obligation, (iii) notice of any
action taken by the Agent, the Collateral
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Agents, the Lenders, the L/C Issuer, IDB or the Borrower or any other agreement
or instrument relating thereto, (iv) all other notices, demands and protests,
and all other formalities of every kind in connection with the enforcement of
the Obligations or of the obligations of such Guarantor Company hereunder, the
omission of or delay in which, but for the provisions of this Section 11.03,
might constitute grounds for relieving such Guarantor Company of its obligations
hereunder, (v) any requirement that the Agent, the Collateral Agents, the
Lenders or the L/C Issuer protect, secure, perfect or insure any Lien or any
property subject thereto or exhaust any right or take any action against any
Person or any Collateral, and (vi) any other defenses available to the Borrower
or such Guarantor Company. All such waivers by the Guarantor Companies shall be
effective only to the extent permitted by applicable law.
Section 11.04 Subrogation. Until such time as the Obligations shall
have been paid in full and the Total Commitment is terminated, each Guarantor
Company hereby irrevocably agrees that it will not exercise any and all rights
which it has or may have at any time or from time to time (whether arising
directly or indirectly by operation of law or contract) to assert any claim
against the Borrower or any other Guarantor on account of any payments made
under this Agreement, including, without limitation, all existing and future
rights of subrogation, reimbursement, exoneration, contribution and/or
indemnity. If any amount shall be paid to a Guarantor Company on account of such
rights at any time when all of such Obligations and all other Obligations shall
not have been paid in full, such amount shall be held in trust for the benefit
of the Agent or the Lenders, shall be segregated from the other funds of such
Guarantor Company and shall forthwith be paid over to the Agent to be applied in
whole or in part by the Agent against the Obligations, whether matured or
unmatured, in accordance with the terms of this Agreement.
Section 11.05 No Waiver; Remedies. No failure on the part of the
Agent, the Collateral Agents, the Lenders or the L/C Issuer to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedy provided by law.
Section 11.06 Stay of Acceleration. If acceleration of the time for
payment of any amount payable by the Borrower in respect of the Obligations is
stayed upon the insolvency, bankruptcy or reorganization of the Borrower, all
such amounts otherwise subject to acceleration under the terms of this Agreement
shall nonetheless be payable by the Guarantor Companies hereunder forthwith on
demand by the Agent, the Collateral Agents, the Lenders or the L/C Issuer.
ARTICLE XII
MISCELLANEOUS
Section 12.01 Termination; Annual Review.
(a) Except as otherwise permitted herein, the Borrower may
terminate the Total Commitment and this Agreement in accordance with Section
2.07, and the Total
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Commitment and this Agreement shall terminate in accordance with the last
paragraph of Section 10.01.
(b) The Total Commitment and this Agreement shall
automatically terminate on the Termination Date.
(c) All Obligations shall become due and payable as of the
date of any termination under Section 12.01(a) or 12.01(b) and, pending a final
accounting, the Agent may withhold any balances in the Loan Account (unless
supplied with an indemnity satisfactory to the Agent) to cover all of the
Obligations, whether absolute or contingent. All of the Agent's, the Collateral
Agents' and the Lenders' rights and Liens and security interests shall continue
after any termination until all Obligations for the payment of money have been
paid in cash and satisfied in full and all Letters of Credit have been canceled
and returned to the L/C Issuer or cash collateralized to the reasonable
satisfaction of the Agent. After such payment and satisfaction, the Agent, the
Collateral Agents and the Lenders will, upon the reasonable request of the
Borrower, execute all documents necessary to release, without recourse,
representation and warranty and at the expense of the Borrower, its Liens
granted pursuant to the terms of this Agreement and the other Loan Documents.
(d) On or prior to July 31 of each year (commencing July 31,
2001), the Borrower shall provide the Agent with a certificate certifying and
attaching any supporting calculations or details that: (i) the representations
and warranties contained in Section 6.01 of this Agreement and in each other
Loan Document and certificate or other writing delivered to either Collateral
Agent, the Agent, the L/C Issuer or the Lenders pursuant hereto on or prior to
such date are true and correct on and as of such date as though made on and as
of such date, except to the extent that any such representation or warranty
expressly relates solely to an earlier date (in which case any such
representation or warranty shall be true and correct on and as of such earlier
date), (ii) the Borrower is in compliance with the financial covenants set forth
in Section 7.02(p) hereof, and (iii) no Event of Default or Default has occurred
and is continuing.
Section 12.02 Notices, Etc. All notices and other communications
provided for hereunder shall be in writing and shall be mailed, sent by
overnight courier, telecopied, or delivered, if to any Lender, at its address
specified under its signature on the signature pages hereof; if to the Borrower
or the other Companies, at the following address:
Alon USA, LP
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
Mr. Shai Even
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Agent, to it at the following address:
Israel Discount Bank of New York
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other party complying as to delivery with the terms
of this Section 12.02. All such notices and other communications shall be
effective (i) if mailed (by certified mail, postage prepaid and return receipt
requested), upon receipt or three Business Days after mailing whichever occurs
first, (ii) if telecopied, when transmitted and a confirmation is received,
provided the same is on a Business Day and, if not, on the next Business Day,
(iii) if sent by overnight courier, upon receipt or two Business Days after
delivered to such overnight courier, whichever occurs first or (iv) if
delivered, upon delivery, provided the same is on a Business Day and, if not, on
the next Business Day, except that notices to the Agent or the L/C Issuer
pursuant to Articles II and III hereof shall not be effective until received by
the Agent or the L/C Issuer, as the case may be.
Section 12.03 Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the other Loan Documents, and no consent to any
departure by any Loan Party therefrom, shall in any event be effective unless
the same shall be in writing and signed by such Loan Party and the Required
Lenders, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however, that
no amendment, waiver or consent shall (i) increase the Revolving Credit
Commitment of any Lender, reduce the principal of, or interest on, the Revolving
Credit Loans or the Reimbursement
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Obligations payable to any Lender, reduce the amount of any fee payable for the
account of any Lender, or postpone or extend any date fixed for any payment of
principal of, or interest or fees on, the Revolving Credit Loans or Letter of
Credit Obligations payable to any Lender, in each case without the written
consent of any Lender affected thereby, (ii) increase the Total Commitment
without the written consent of each Lender, (iii) change the percentage of the
Revolving Credit Commitments or of the aggregate unpaid principal amount of the
Revolving Credit Notes, or amend the definition of "Required Lenders," without
the written consent of each Lender, (iv) release all or a substantial portion of
the Collateral (except as otherwise provided in this Agreement or any of the
other Loan Documents) or the Guarantors (other than inactive Guarantors or as
otherwise provided in this Agreement or in any of the other Loan Documents)
without the written consent of each Lender, (v) amend, modify or waive Section
12.01 or this Section 12.03 of this Agreement without the written consent of
each Lender, or (vi) amend the definition of "Eligible Inventory," "Eligible
Receivables," or "Borrowing Base" if the effect of such amendment is to increase
materially Availability without the written consent of each Lender.
Notwithstanding the foregoing, no amendment, waiver or consent shall affect the
rights or duties of the Agent or the L/C Issuer with respect to a Letter of
Credit under this Agreement or the other Loan Documents, unless the same shall
have been signed by the Agent or the L/C Issuer, as applicable.
Section 12.04 No Waiver; Remedies, Etc. No failure on the part of
the L/C Issuer, any Lender or the Agent to exercise, and no delay in exercising,
any right hereunder or under any other Loan Document shall operate as a waiver
thereof; nor shall any single or partial exercise of any right under any Loan
Document preclude any other or further exercise thereof or the exercise of any
other right. The rights and remedies of the L/C Issuer, the Lenders and the
Agent provided herein and in the other Loan Documents are cumulative and are in
addition to, and not exclusive of, any rights or remedies provided by law. The
rights of the Lenders, the L/C Issuer and the Agent under any Loan Document
against any party thereto are not conditional or contingent on any attempt by
the Lenders, the L/C Issuer and the Agent to exercise any of their rights under
any other Loan Document against such party or against any other Person.
Section 12.05 Expenses; Taxes; Attorneys' Fees. The Companies agree
to jointly and severally pay or cause to be paid, on demand, and to save the
Agent (and, in the case of clauses (a) and (c) through (m) below, the Lenders)
harmless against liability for the payment of, all reasonable out-of-pocket
fees, costs and expenses, regardless of whether the transactions contemplated
hereby are consummated, including but not limited to reasonable fees, costs and
expenses of counsel for the Agent (and, in the case of clauses (c) through (m)
below, the Lenders), accounting, due diligence, periodic field audits,
investigation, monitoring of assets, syndication, miscellaneous disbursements,
examination, travel, lodging and meals, incurred by the Agent (and, in the case
of clauses (a) and (c) through (m) below, the Lenders) from time to time arising
from or relating to: (a) the negotiation, preparation, execution, delivery,
performance and administration of this Agreement and the other Loan Documents,
(b) any requested amendments, waivers or consents to this Agreement or the other
Loan Documents, whether or not such documents become effective or are given, (c)
the preservation and protection of any of the Agent's and the Lenders' rights
under this Agreement or the other Loan Documents, (d) the defense of any claim
or action asserted or brought against the Agent or the Lenders by any Person
that arises from or relates to this Agreement, any other Loan Document, the
Agent's or the Lenders' claims against the Borrower or the other Loan Parties,
or any and all matters in
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connection therewith, (e) the commencement or defense of, or intervention in,
any court proceeding arising from or related to this Agreement or any other Loan
Document, (f) the filing of any petition, complaint, answer, motion or other
pleading by the Agent or the Lenders, or the taking of any action in respect of
the Collateral or other security, in connection with this Agreement or any other
Loan Document, (g) the protection, collection, lease, sale, taking possession of
or liquidation of, any Collateral or other security in connection with this
Agreement or any other Loan Document, (h) any attempt to enforce any Lien on any
Collateral or other security in connection with this Agreement or any other Loan
Document, (i) any attempt to collect from the Borrower or any other Loan Party,
(j) the receipt of any professional advice with respect to any of the foregoing
(including, without limitation, with respect to any restructuring, work-out or
renegotiation of any Loan Document), (k) all liabilities and reasonable costs
arising from or in connection with the past, present or future operations of the
Loan Parties (or any Affiliate of the foregoing) involving any damage to real or
personal property or natural resources or harm or injury alleged to have
resulted from any Release of Hazardous Materials on, upon or into such property,
(l) any reasonable costs or liabilities incurred in connection with the
investigation, removal, cleanup and/or remediation of any Hazardous Materials
present or arising out of the operations of any facility of the Loan Parties, or
(m) any liabilities or reasonable costs incurred in connection with any Lien
arising under any Environmental Law. Without limitation of the foregoing or any
other provision of any Loan Document: (x) the Companies jointly and severally
agree to pay all stamp, document, transfer, recording or filing taxes or fees
(including, without limitation, mortgage recording taxes) and similar
impositions now or hereafter payable pursuant to Section 2.12 hereof, and the
Companies jointly and severally agree to save the Agent, the L/C Issuer and the
Lenders harmless from and against any and all present or future claims,
liabilities or losses with respect to or resulting from any omission to pay or
delay in paying any such taxes, fees or impositions in accordance with such
Section 2.12, and (y) if the Borrower or any Loan Party fails to perform any
covenant or agreement contained herein or in any other Loan Document, the Agent
may itself perform or cause performance of such covenant or agreement, and the
expenses of the Agent incurred in connection therewith shall be reimbursed on
demand by the Borrower.
Section 12.06 Right of Set Off. Upon the occurrence and during the
continuance of any Event of Default, each Lender and its Affiliates may, and is
hereby authorized to, at any time and from time to time, without notice to any
Loan Party (any such notice being expressly waived by the Borrower and
Companies) and to the fullest extent permitted by law, set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held and other indebtedness at any time owing by such Lender or its
Affiliates to or for the credit or the account of any Loan Party against any and
all joint and several obligations of the Borrower now or hereafter existing
under any Loan Document, irrespective of whether or not such Lender or its
Affiliates shall have made any demand hereunder or thereunder and although such
obligations may be contingent or unmatured. Such set-off shall be subject to the
provisions of Section 4.03. Such Lender agrees to notify the Borrower promptly
after any such set-off and application made by such Lender or its Affiliates,
provided that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of each Lender and its Affiliates under
this Section 12.06 are in addition to the other rights and remedies (including,
without limitation, other rights of set-off) which such Lender may have.
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Section 12.07 Severability. Any provision of this Agreement, or of
any other Loan Document to which any Borrower or any Guarantor is a party, which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining portions hereof or thereof
or affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 12.08 Assignments and Participations.
(a) Each Lender may, with the written consent of the Agent,
which consent will not be unreasonably withheld or delayed, assign to one or
more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its Revolving
Credit Commitment, the Revolving Credit Loans made by it, the Revolving Credit
Notes held by it and its Pro Rata Share of Letter of Credit Obligations);
provided, however, that (1) the consent of the Agent shall not be required for
any such assignment by a Lender to one or more of such Lender's Affiliates, (2)
each such assignment is in an amount which is at least $10,000,000 or a multiple
of $1,000,000 in excess thereof (or the remainder of such Lender's Revolving
Credit Commitment), (3) each such assignment shall be of a constant, and not a
varying, percentage of all of the assigning Lender's rights and obligations
under this Agreement, (4) such assignee shall execute and deliver an Assignment
and Acceptance to the Agent, (5) the parties to each such assignment shall
execute and deliver to the Agent, for its acceptance, an Assignment and
Acceptance, together with any Revolving Credit Notes subject to such assignment
and such parties shall deliver to the Agent a processing and recordation fee of
$3,500, and (6) such assignee shall reimburse the Agent for any out-of-pocket
expenses (including reasonable legal fees) incurred in connection therewith.
Notwithstanding the foregoing, in no event shall any assignment be made to any
Loan Party or any Affiliate of a Loan Party without the prior written consent of
the Required Lenders, which consent may be withheld by the Required Lenders in
their sole and absolute discretion. Upon such execution, delivery and
acceptance, from and after the effective date specified in each Assignment and
Acceptance, which effective date shall be at least three Business Days after the
delivery thereof to the Agent (or such shorter period as shall be agreed to by
the Agent and the parties to such assignment), (A) the assignee thereunder shall
become a "Lender" hereunder and, in addition to the rights and obligations
hereunder held by it immediately prior to such effective date, have the rights
and obligations hereunder that have been assigned to it pursuant to such
Assignment and Acceptance and (B) the assigning Lender thereunder shall, to the
extent that rights and obligations hereunder have been assigned by it pursuant
to such Assignment and Acceptance, relinquish its rights and be released from
its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto). Any such assignment shall not adversely affect the Borrower' rights
under this Agreement except that the assigning Lender shall not be responsible
for the obligations assigned.
(b) By executing and delivering an Assignment and Acceptance,
the assigning Lender thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto that: (i) other than as provided in
such Assignment and Acceptance, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value
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of this Agreement of any other instrument or document furnished pursuant hereto,
and (ii) such assigning Lender makes no representation or warranty and assumes
no responsibility with respect to the financial condition of the Borrower or any
Guarantor or any of their Subsidiaries or the performance or observance by the
Borrower or such Guarantor or any of their Subsidiaries of any of their
obligations under this Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto.
(c) The Agent shall maintain at its address referred to in
Section 12.02 hereof a copy of each Assignment and Acceptance delivered to and
accepted by it. Such copies shall be available for inspection by the Borrower or
any Guarantor or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an assignee Lender, together with the Revolving
Credit Notes subject to such assignment and the processing and recordation fee,
if the Agent consents, which consent will not be unreasonably withheld, to the
proposed Assignment, the Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit D hereto, (i) accept such
Assignment and Acceptance, and (ii) give prompt notice thereof to the Borrower.
Within three Business Days after its receipt of such notice, the Borrower or any
Guarantor, at its own expense, shall execute and deliver to the Agent in
exchange for the surrendered Revolving Credit Notes a new Revolving Credit Notes
to the order of such assignee Lender in an aggregate principal amount equal to
the Revolving Credit Loans and Revolving Credit Commitment assumed by it
pursuant to such Assignment and Acceptance, and if the assigning Lender has
retained any Revolving Credit Loans and Revolving Credit Commitment hereunder, a
new Revolving Credit Notes to the order of the assigning Lender in an aggregate
principal amount equal to the Revolving Credit Loans and Revolving Credit
Commitment retained by it hereunder. Such new Revolving Credit Notes or
Revolving Credit Notes shall be in an aggregate principal amount equal to the
aggregate principal amount of such surrendered Revolving Credit Notes or
Revolving Credit Notes, shall be dated the date of the Agent's acceptance of
such Assignment and Acceptance and shall otherwise be in substantially the form
of Exhibit A hereto. Promptly after each such Assignment and Acceptance becomes
effective, the Agent shall prepare and distribute to each Lender and the
Borrower a revised Schedule D hereto after giving effect to such assignment,
which revised Schedule D shall replace the prior Schedule D and become part of
this Agreement.
(e) Each Lender may sell participations in or to all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Revolving Credit Commitment, the Revolving
Credit Loans made by it and the Revolving Credit Notes held by it and the Letter
of Credit Obligations). Participants shall have no direct rights under this
Agreements except that participants shall have the rights of a Lender under
Sections 2.09, 2.10 and 12.06 hereof, provided that no Lender may grant any
participant any rights to consent to any amendment, waiver, consent or other
modification hereunder other than the rights set forth in Section 12.03, and
provided further that no Lender may grant participations to any Loan Party or
any Affiliate of a Loan Party without the prior written consent of the Required
Lenders, which consent may be withheld by the Required Lenders in their sole and
absolute discretion.
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(f) Nothing contained in this Section 12.08 shall prohibit any
Lender from pledging its Revolving Credit Loans hereunder to a Federal Reserve
Bank in support of borrowings made by such Lender from such Federal Reserve
Bank.
Section 12.09 Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which shall be deemed to be an original, but all of which taken together
shall constitute one and the same agreement.
Section 12.10 Headings. Section headings herein are included for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose.
Section 12.11 Governing Law.
(a) THIS AGREEMENT, THE REVOLVING CREDIT NOTES AND THE OTHER
LOAN DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW
OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE
STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES, EXCEPT TO THE
EXTENT THAT THE VALIDITY AND PERFECTION OR THE PERFECTION AND THE EFFECT OF
PERFECTION OR NON-PERFECTION OF THE SECURITY INTEREST CREATED THEREBY, OR
REMEDIES THEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE
LAW OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
(b) Any legal action or proceeding with respect to this
Agreement or any other Loan Document may be brought in the courts of the State
of New York or of the United States for the Southern District of New York, and,
by execution and delivery of this Agreement, the Companies hereby irrevocably
accept in respect of its property, generally and unconditionally, the
jurisdiction of the aforesaid courts. The Companies further irrevocably consent
to the service of process out of any of the aforementioned courts and in any
such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to the Borrower or the Companies at their
addresses for notices contained in Section 12.02, such service to become
effective ten (10) days after such mailing. The Companies hereby irrevocably
appoint the Secretary of State of the State of New York as its agent for service
of process in respect of any such action or proceeding. Nothing herein shall
affect the right of the Agent to service of process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed against
the Borrower and/or any Company in any other jurisdiction. The Companies hereby
expressly and irrevocably waive, to the fullest extent permitted by law, any
objection which it may now or hereafter 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
any Company or the Borrower has or hereafter may acquire any immunity from
jurisdiction of any court or from any legal process (whether through service or
notice, attachment prior to judgment, attachment in aid of execution or
otherwise) with respect to itself or its property, such Person hereby
irrevocably waives such immunity in respect of its obligations under this
Agreement and the other Loan Documents.
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Section 12.12 Waiver of Jury Trial, Etc. THE COMPANIES, THE LENDERS
AND THE AGENT HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT, THE NOTES
OR OTHER LOAN DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT,
DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN
CONNECTION THEREWITH, OR ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN
CONNECTION WITH THIS AGREEMENT, AND AGREE THAT ANY SUCH ACTION, PROCEEDINGS OR
COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. THE COMPANIES
CERTIFY THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF THE AGENT OR ANY
LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE AGENT OR ANY LENDER
WOULD NOT, IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO
ENFORCE THE FOREGOING WAIVERS. THE COMPANIES HEREBY ACKNOWLEDGE THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENT AND THE LENDERS ENTERING INTO
THIS AGREEMENT.
Section 12.13 Consent by the Agent, Lenders. Except as otherwise
expressly set forth herein to the contrary, if the consent, approval,
satisfaction, determination, judgment, acceptance or similar action (an
"Action") of the Agent or the Lenders shall be permitted or required pursuant to
any provision hereof or any provision of any other agreement to which any
Company or the Borrower is a party and to which the Agent or the Lenders has
succeeded thereto, such Action shall be required to be in writing and may be
withheld or denied by any Agent or any Lender, as the case may be, with or
without any reason, and without being subject to question or challenge on the
grounds that such Action was not taken in good faith.
Section 12.14 No Party Deemed Drafter. The parties hereto hereby
agree that no party hereto shall be deemed to be the drafter of this Agreement,
and each of the Borrower, the Companies, the Lenders and the Agent further
agrees that, in the event this Agreement is ever construed by a court of law,
such court shall not construe this Agreement or any provision of this Agreement
against any party hereto as the drafter of this Agreement.
Section 12.15 Reinstatement; Certain Payments. If claim is ever made
upon the Agent, the Lenders or the L/C Issuer for repayment or recovery of any
amount or amounts received by the Agent, the Lenders or the L/C Issuer in
payment or on account of any of the Obligations under this Agreement, the Agent,
the Lenders or the L/C Issuer shall give prompt notice of such claim to each
other Lender and the L/C Issuer, the Companies and the Borrower, and if the
Agent, the Lenders or the L/C Issuer repays all or part of said amount by reason
of (i) any judgment, decree or order of any court or administrative body having
jurisdiction over the Agent, the Lenders or the L/C Issuer or any of their
property, or (ii) any good faith settlement or compromise of any such claim
effected by the Agent with any such claimant, then and in such event the
Companies and the Borrower agrees that (A) any such judgment, decree, order,
settlement or compromise shall be binding upon the Companies and the Borrower
notwithstanding the cancellation of any Revolving Credit Notes or other
instrument evidencing the Obligations under this Agreement or the other Loan
Documents or the termination of this Agreement or the other Loan Documents, and
(B) it shall be and remain liable to the Agent, the
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Lenders or the L/C Issuer hereunder for the amount so repaid or recovered to the
same extent as if such amount had never originally been received by the Agent,
the Lenders or the L/C Issuer.
Section 12.16 Indemnification. In addition to all of the Companies'
or the Borrower's other Obligations under this Agreement, each of the Companies
and the Borrower agrees to, jointly and severally, defend, protect, indemnify
and hold harmless the Agent, the L/C Issuer, the Collateral Agents, each Lender,
and each Lender's Affiliates, and all of the respective officers, directors,
employees, attorneys, consultants and Agent of the Agent, the L/C Issuer, the
Collateral Agents, each Lender and each Lender's Affiliates (collectively called
the "Indemnitees") from and against any and all losses, damages, liabilities,
obligations, penalties, fees, reasonable costs and expenses (including, without
limitation, reasonable attorneys' fees, costs and expenses) incurred by such
Indemnitees, whether prior to or from and after the Existing Effective Date or
the Effective Date, whether direct, indirect or consequential, as a result of or
arising from or relating to or in connection with any of the following: (i) the
negotiation, preparation, execution or performance or enforcement of this
Agreement, any Loan Document or of any other document executed in connection
with the transactions contemplated by this Agreement, (ii) the Lenders'
furnishing of funds to the Borrower or the L/C Issuer's issuing Letters of
Credit for the account of the Borrower under this Agreement, including, without
limitation, the management of any such Revolving Credit Loans or the
Reimbursement Obligations, (iii) any matter relating to the financing
transactions contemplated by this Agreement or by any document executed in
connection with the transactions contemplated by this Agreement, or (iv) any
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto (collectively, the "Indemnified
Matters"); provided, however, that the Companies and the Borrower shall have no
obligation to any Indemnitee hereunder for any Indemnified Matter caused by or
resulting from the gross negligence or willful misconduct of such Indemnitee, as
determined by a final judgment of a court of competent jurisdiction. Such
indemnification for all of the foregoing losses, damages, fees, costs and
expenses of the Indemnitees are chargeable against the Loan Account. To the
extent that the undertaking to indemnify, pay and hold harmless set forth in
this Section 12.16 may be unenforceable because it is violative of any law or
public policy, the Companies and the Borrower shall contribute the maximum
portion which they are permitted to pay and satisfy under applicable law, to the
payment and satisfaction of all Indemnified Matters incurred by the Indemnitees.
This Indemnity shall survive the repayment of the Obligations and the discharge
of the Liens granted under the Loan Documents.
Section 12.17 Environmental Indemnification. Without limiting
Section 12.16 hereof, the Companies and the Borrower hereby agree to defend,
indemnify, and hold harmless the Indemnitees against any claims, demands,
penalties, fines, liability (strict liability), losses, damages, reasonable
costs and expenses (including without limitation, reasonable legal fees and
expenses, consultant fees and laboratory fees) and Environmental Costs arising
out of (i) any Releases or threatened Releases (x) at any property presently or
formerly owned or operated by any Company or any Subsidiary of a Company, or a
predecessor in interest to the extent relating to the Refinery, Terminals, or
Pipelines, or (y) of any Hazardous Materials generated and disposed of by any
Company or any Subsidiary of a Company, or any predecessor in interests to the
extent relating to the Refinery, Terminals, or Pipelines; (ii) any violations of
Environmental Laws; (iii) any Environmental Action relating to any Company or
any Subsidiary of any Company, or any predecessor in interests as to the extent
relating to the Refinery, Terminals, or
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Pipelines; or (iv) any personal injury (including wrongful death) or property
damage (real or personal) arising out of exposure to Hazardous Materials used,
handled, generated, transported or disposed by any Company or any Subsidiary of
a Company, or any predecessor in interest to the extent relating to the
Refinery, Terminals, or Pipelines, and (v) any breach of any warranty or
representation regarding environmental matters made by the Companies in Section
6.01(t) or the breach of any covenant made by the Borrower or the Companies in
Section 7.01(i). However, the Borrower and the Companies shall not have any
obligation under this Section 12.17 regarding any potential environmental matter
covered hereunder which is caused by the gross negligence or willful misconduct
of the Lender, the Agent or its employees, agents, officers and directors. This
Environmental Indemnity shall survive the repayment of the Obligations and
discharge of any Liens granted under the Loan Documents.
Section 12.18 Binding Effect. This Agreement shall become effective
when it shall have been executed by the Guarantor Companies, the Borrower, the
Agent and the Lenders and when the conditions precedent set forth in Section
5.01 hereof have been satisfied or waived by the Agent, and thereafter shall be
binding upon and inure to the benefit of the Guarantor Companies, the Borrower,
the Agent and each Lender, and their respective successors and assigns, except
that the Guarantor Companies and the Borrower shall not have the right to assign
their rights hereunder or any interest herein without the prior written consent
of all the Lenders, and the assignment by any Lender shall be governed by
Section 12.08 hereof.
Section 12.19 Interest. It is the intention of the parties hereto
that each Lender shall conform strictly to usury laws applicable to it.
Accordingly, if the transactions contemplated hereby would be usurious as to any
Lender under laws applicable to it (including the laws of the United States of
America and any state thereof or any other jurisdiction whose laws may be
mandatorily applicable to such Lender notwithstanding the other provisions of
this Agreement), then, in that event, notwithstanding anything to the contrary
in any of the Loan Documents or any agreement entered into in connection with or
as security for the Revolving Credit Notes or any other Obligations, it is
agreed as follows: (a) the aggregate of all consideration which constitutes
interest under law applicable to any Lender that is contracted for, taken,
reserved, charged or received by such Lender under any of the Loan Documents or
agreements or otherwise in connection with the Revolving Credit Notes shall
under no circumstances exceed the maximum amount allowed by such applicable law,
and any excess shall be canceled automatically and if theretofore paid shall be
credited by such Lender on the principal amount of the Obligations (or, to the
extent that the principal amount of the Obligations shall have been or would
thereby be paid in full, refunded by such Lender to the Borrower); and (b) in
the event that the maturity of the Revolving Credit Notes is accelerated by
reason of an election of the holder thereof resulting from any Event of Default
under this Agreement or otherwise, or in the event of any required or permitted
prepayment, then such consideration that constitutes interest under law
applicable to any Lender may never include more than the maximum amount allowed
by such applicable law, and excess interest, if any, provided for in this
Agreement or otherwise shall be canceled automatically by such Lender as of the
date of such acceleration or prepayment and, if theretofore paid, shall be
credited by such Lender on the principal amount of the Obligations (or, to the
extent that the principal amount of the Obligations shall have been or would
thereby be paid in full, refunded by such Lender to the Borrower). All sums paid
or agreed to be paid to any Lender for the use, forbearance or detention of sums
due hereunder shall, to the extent permitted by law applicable to such Lender,
be amortized, prorated,
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allocated and spread throughout the full term of the Revolving Credit Loans
evidenced by the Revolving Credit Notes until payment in full so that the rate
or amount of interest on account of any Revolving Credit Loans hereunder does
not exceed the maximum amount allowed by such applicable law. If at any time and
from time to time (i) the amount of interest payable to any Lender on any date
shall be computed at the Highest Lawful Rate applicable to such Lender pursuant
to this Section 12.19. and (ii) in respect of any subsequent interest
computation period the amount of interest otherwise payable to such Lender would
be less than the amount of interest payable to such Lender computed at the
Highest Lawful Rate applicable to such Lender, then the amount of interest
payable to such Lender in respect of such subsequent interest computation period
shall continue to be computed at the Highest Lawful Rate applicable to such
Lender until the total amount of interest payable to such Lender shall equal the
total amount of interest which would have been payable to such Lender if the
total amount of interest had been computed without giving effect to this Section
12.19. For purposes of this Section 12.19, "Highest Lawful Rate" means, with
respect to each Lender, the maximum nonusurious interest rate, if any, that at
any time or from time to time may be contracted for, taken, reserved, charged or
received on the Revolving Credit Notes or on other Obligations under laws
applicable to such Lender which are presently in effect or, to the extent
allowed by law, under such applicable laws which may hereafter be in effect and
which allow a higher maximum nonusurious interest rate than applicable laws now
allow. To the extent that Chapter 303 of the Texas Finance Code is relevant for
the purpose of determining the Highest Lawful Rate, such Lender elects to
determine the applicable rate ceiling under such Chapter by the indicated weekly
rate ceiling from time to time in effect.
Section 12.20 Entire Agreement.
(a) THE LOAN DOCUMENTS EMBODY THE ENTIRE AGREEMENT AND
UNDERSTANDING BETWEEN THE PARTIES AND SUPERSEDE ALL OTHER AGREEMENTS AND
UNDERSTANDINGS BETWEEN SUCH PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND
THEREOF. THE LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.
(b) Each Lender hereunder (i) acknowledges that it has
received a copy of the Intercreditor Agreement, (ii) consents to the
subordination of Liens provided for in the Intercreditor Agreement, (iii) agrees
that it will be bound by and will take no actions contrary to the provisions of
the Intercreditor Agreement and (iv) authorizes and instructs each Collateral
Agent to enter into the Intercreditor Agreement as Collateral Agents and on
behalf of such Lender. The foregoing provisions are intended as an inducement to
the lenders under the Term Loan Agreement to extend credit to Alon USA, Inc and
such lenders are intended third party beneficiaries of such provisions and the
provisions of the Intercreditor Agreement.
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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 date first
above written.
Borrower:
ALON USA, LP
By: Alon USA GP, LLC, a Delaware limited
liability company, its general partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chairman of the Board of Managers
Guarantor Companies:
ALON ASSETS, INC.
ALON USA OPERATING, INC
ALON USA REFINING, INC.
ALON USA PIPELINE, INC.
ALON PETROLEUM PIPE LINE COMPANY
FIN-TEX PIPE LINE COMPANY
ALON USA, INC.
ALON USA ENERGY, INC.
ALON USA CAPITAL, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chairman of the Board of Directors
ALON USA GP, LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chairman of the Board of Managers
SOUTHWEST CONVENIENCE STORES, LLC
ALON USA INTERESTS, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman of the Board of Managers
ALON USA DELAWARE, LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
Agent and Lender:
ISRAEL DISCOUNT BANK OF NEW YORK
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: FVP
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: SVP
Lenders:
BANK LEUMI USA
By: /s/ YURAL TULUY
-------------------------------
Name: Yural Tuluy
Title: AVP
By: /s/ ▇▇▇▇▇▇▇ ▇. KLEW
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. Klew
Title: SVP