Exhibit 10.2
LOAN AGREEMENT
THIS LOAN AGREEMENT (the "Agreement") is made effective as of the 28th day
of June, 2001, by and among JLM CHEMICALS, INC., a Delaware corporation, JLM
REALTY, INC., a North Carolina corporation and JLM TERMINALS, INC., a North
Carolina corporation (collectively or individually as the context requires,
hereinafter referred to as "Borrower"), JLM INDUSTRIES, INC., a Delaware
corporation (the "Guarantor") and GATX CAPITAL CORPORATION, a Delaware
corporation (hereinafter referred to as "Lender").
R E C I T A L S:
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A. Borrower has applied to Lender for a term loan (the "Loan") in
the principal amount of Seven Million One Hundred Thirty-five Thousand and
No/100 Dollars ($7,135,000.00) to be secured by a first mortgage lien on certain
real property located in Blue Island, Illinois and in Wilmington, North
Carolina, all as more particularly described on Exhibit "A" attached hereto and
as described in those certain Mortgage and Security Agreements of even date
herewith securing the Loan (the "Land") and all improvements located on the Land
(the "Improvements"), (the Land and all Improvements, fixtures and personal
property owned by Borrower now or hereafter located on the Land are hereinafter
collectively referred to as the "Premises").
B. Borrower and Lender have negotiated the terms and conditions of,
and wish to enter into, this Agreement in order to set forth the terms and
conditions with respect to the disbursement of the Loan.
NOW, THEREFORE, in consideration of the Premises, and of the mutual
covenants and agreements set forth below, Borrower and Lender agree as follows:
1. DEFINITIONS. As used in this Agreement the terms listed below shall have
the following meanings unless otherwise required by the context:
(a) ACCOUNTS shall mean, as to JLM Chemicals, Inc., all present and
future rights of such JLM Chemicals, Inc. to payment for goods sold or
leased or for services rendered, whether or not evidenced by instruments or
chattel paper, and whether or not earned by performance.
(b) ADJUSTED TANGIBLE NET WORTH shall mean as to any Person, at any
time, in accordance with GAAP (except as otherwise specifically set forth
below), on a consolidated basis for such Person and its Subsidiaries (if
any), the amount equal to ^ the difference between: (a) the aggregate net
book value of all assets of such Person and its Subsidiaries (excluding the
value of patents, trademarks, tradenames, copyrights, licenses, goodwill,
leasehold improvements, prepaid assets and other intangible assets),
calculating the book value of inventory for this purpose on a
first-in-first-out basis, after deducting from such book values all
appropriate reserves in accordance with GAAP (including all reserves for
doubtful receivables, obsolescence, depreciation and amortization) and (b)
the aggregate amount of the ^ Indebtedness and other liabilities of such
Person and its Subsidiaries (including tax and other proper accruals to the
extent
required to be shown as liabilities on a balance sheet of such Person
prepared in accordance with GAAP.
(c) AFFILIATE shall mean, with respect to a specified Person, any
other Person (a) which directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common control
with, such specified person; (b) which beneficially owns or holds five (5%)
percent or more of any class of the Voting Stock or other equity interest
of such specified person; or (c) of which five (5%) percent or more of the
Voting Stock or other equity interest is beneficially owned or held by such
specified person or a Subsidiary of such specified person. For purposes of
this definition, "control" (including, with correlative meanings, the terms
"controlling", "controlled by" and "under common control with") when used
with respect to any specified person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of such person, whether through the ownership of Voting Stock,
by agreement or otherwise.
(d) AGREEMENT FOR WARRANT. That certain Agreement for Warrant of even
date herewith executed by Borrower and Lender.
(e) ASSIGNMENT OF PERMITS, AGREEMENTS, APPROVALS, FEES, DEPOSITS AND
TRADE NAMES: An Assignments of Permits, Agreements, Approvals, Fees,
Deposits and Trade Names of even date herewith from Borrower assigning to
Lender, among other things, all contract rights, sewer tap rights, utility
commitments, licenses, agreements and trade names pertaining directly or
indirectly to the Land and the use thereof.
(f) CAPITAL LEASES shall mean, as applied to any Person, any lease of
(or any agreement conveying the right to use) any property (whether real,
personal or mixed) by such Person as lessee which in accordance with GAAP,
is required to be reflected as a liability on the balance sheet of such
Person.
(g) CAPITAL STOCK shall mean, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated)
of such Person's capital stock, partnership interests or limited liability
company interests at any time outstanding, and any and all rights, warrants
or options exchangeable for or convertible into such capital stock or other
interests (but excluding any debt security that is exchangeable for or
convertible into such capital stock).
(h) CASH EQUIVALENTS shall mean, at any time, (a) any evidence of
Indebtedness with a maturity date of one hundred eighty (180) days or less
issued or directly and fully guaranteed or insured by the United States of
America of any agency or instrumentality thereof; PROVIDED, THAT, the full
faith and credit of the United States of America is pledged in support
thereof; (b) certificates of deposit or bankers' acceptances with a
maturity of one hundred eighty (180) days or less of any financial
institution that is a member of the Federal Reserve System having combined
capital and surplus and undivided profits of not less than $250,000,000;
(c) commercial paper (including variable rate demand notes) with a maturity
of one hundred eighty (180) days or less issued by a corporation (except an
Affiliate of a Borrower or Guarantor) organized under the laws of any State
of the
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United States of America or the District of Columbia and rated at least A-1
by Standard & Poor's Ratings Service, a division of The XxXxxx-Xxxx
Companies, Inc. or at least P-1 by Xxxxx'x Investors Service, Inc.; (d)
repurchase obligations with a term of not more than thirty (30) days for
underlying securities of the types described in clause (a) above entered
into with any financial institution having combined capital and surplus and
undivided profits of not less than $250,000,000; (e) repurchase agreements
and reverse repurchase agreements relating to marketable direct obligations
issued or unconditionally guaranteed by the United States of America or
issued by any governmental agency thereof and backed by the full faith and
credit to the United States of America, in each case maturing within one
hundred eighty (180) days or less from the date of acquisition; PROVIDED,
THAT, the terms of such agreements comply with the guidelines set forth in
the Federal Financial Agreements of Depository Institutions with Securities
Dealers and Others, as adopted by the Comptroller of the Currency on
October 31, 1985; and (f) investments in money market funds and mutual
funds which invest substantially all of their assets in securities of the
types described in clauses (a) through (e) above.
(i) CHANGE OF CONTROL shall mean shall mean (a) the transfer (in one
transaction or a series of transactions) of all or substantially all of the
assets of any Borrower or Guarantor to any Person or group (as such term is
used in Section 13(d)(3) of the Exchange Act) except as otherwise permitted
in Section 5 hereof; (b) the liquidation or dissolution of any Borrower or
Guarantor or the adoption of a plan by the stockholders of any Borrower or
Guarantor relating to the dissolution or liquidation of such Borrower or
Guarantor; (c) the acquisition by any Person or group (as such term is used
in Section 13(d)(3) of the Exchange Act), except for one or more Permitted
Holders, of beneficial ownership, directly or indirectly, of fifty (50%)
percent or more of the voting power of the total outstanding Voting Stock
of Guarantor or the Board of Directors of Guarantor; (d) during any period
of two (2) consecutive years, individuals who at the beginning of such
period constituted the Board of Directors of Guarantor (together with any
new directors who have been appointed by any Permitted Holder, or whose
nomination for election by the stockholders of Guarantor, as the case may
be, was approved by a vote of at least sixty-six and two-thirds (66 2/3%)
percent of the directors then still in office who were either directors at
the beginning of such period or whose election or nomination for election
was previously so approved) cease for any reason to constitute a majority
of the Board of Directors of Guarantor then still in office; or (e) the
failure of the Permitted Holders to own more than fifty (50%) percent of
the voting power of the total outstanding Voting Stock of Guarantor; and
(f) the failure of Guarantor to own one hundred (100%) percent of the
voting power of the total outstanding Voting Stock of any of the Borrowers,
and Guarantors.
(j) CODE shall mean the Internal Revenue Code of 1986, as the same now
exists or may from time to time hereafter be amended, modified, recodified
or supplemented, together with all rules, regulations and interpretations
thereunder or related thereto.
(k) COLLATERAL shall have the meaning set forth in the Security
Agreement of even date herewith between Borrower and Lender and also the
Premises.
(l) INTENTIONALLY OMITTED.
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(m) COLLATERAL ASSIGNMENT OF LEASES, RENTS AND CONTRACT RIGHTS: The
Collateral Assignments of Leases, Rents and Contract Rights of even date
herewith from Borrower assigning to Lender all of its right, title and
interest in and to all agreements for the leasing of the Premises or any
part thereof, and all rents, issues and profits derived or to be derived
from the Premises, and all contracts related to the Premises.
(n) COLLATERAL ASSIGNMENT OF LICENSE AGREEMENT. That certain
Collateral Assignment of Q-Max Process License Agreement of even date
herewith from Borrower assigning to Lender all of its right, title and
interest in and to that certain Q-Max Process License Agreement dated
November 21, 1994 between BTL Specialty Resins Corp. ("BTL") and UOP, which
was assigned by BTL to Borrower;
(o) ENVIRONMENTAL LAWS shall mean all foreign, Federal, State and
local laws (including common law), legislation, rules, codes, licenses,
permits (including any conditions imposed therein), authorizations,
judicial or administrative decisions, injunctions or agreements between
Borrower and any Governmental Authority, (a) relating to pollution and the
protection, preservation or restoration of the environment (including air,
water vapor, surface water, ground water, drinking water, drinking water
supply, surface land, subsurface land, plant and animal life or any other
natural resource), or to human health or safety, (b) relating to the
exposure to, or the use, storage, recycling, treatment, generation,
manufacture, processing, distribution, transportation, handling, labeling,
production, release or disposal, or threatened release, of Hazardous
Materials, or (c) relating to all laws with regard to recordkeeping,
notification, disclosure and reporting requirements respecting Hazardous
Materials. The term "Environmental Laws" includes (i) the Federal
Comprehensive Environmental Response, Compensation and Liability Act of
1980, the Federal Superfund Amendments and Reauthorization Act, the Federal
Water Pollution Control Act of 1972, the Federal Clean Water Act, the
Federal Clean Air Act, the Federal Resource Conservation and Recovery Act
of 1976 (including the Hazardous and Solid Waste Amendments thereto), the
Federal Solid Waste Disposal and the Federal Toxic Substances Control Act,
the Federal Insecticide, Fungicide and Rodenticide Act, and the Federal
Safe Drinking Water Act of 1974, (ii) applicable state counterparts to such
laws, and (iii) any common law or equitable doctrine that may impose
liability or obligations for injuries or damages due to, or threatened as a
result of, the presence of or exposure to any Hazardous Materials.
(p) EQUIPMENT shall mean, as to each Borrower, all of such Borrower's
now owned and hereafter acquired equipment, machinery, computers and
computer hardware and software (whether owned or licensed), vehicles,
tools, furniture, fixtures, all attachments, accessions and property now or
hereafter affixed thereto or used in connection therewith, and
substitutions and replacements thereof, on the Premises.
(q) ERISA shall mean the United States Employee Retirement Income
Security Act of 1974, together with all rules, regulations and
interpretations thereunder or related thereto.
(r) EXCHANGE ACT shall mean the Securities Exchange Act of 1934, as
the same now exists or may hereafter from time to time be amended,
modified, recodified or
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supplemented, together with all rules, regulations and interpretations
thereunder or related thereto.
(s) FINANCING AGREEMENTS shall mean, collectively, this Agreement, and
all notes, guarantees, security agreements and other agreements, documents
and instruments now or at any time hereafter executed and/or delivered by
any Borrower or any Obligor in connection with this Agreement.
(t) FINANCING STATEMENTS. The financing statements from Borrower to
Lender to perfect Lender's security interest in the personal property
described in the Mortgage and Security Agreement.
(u) GAAP. GAAP shall mean generally accepted accounting principles in
the United States of America as in effect from time to time as set forth in
the opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and the statements and
pronouncements of the Financial Accounting Standards Board which are
applicable to the circumstances as of the date of determination
consistently applied.
(v) GOVERNMENTAL AUTHORITY shall mean any nation or government, any
state, province, or other political subdivision thereof, any central bank
(or similar monetary or regulatory authority) thereof, any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, and any corporation or other
entity owned or controlled, through stock or capital ownership or
otherwise, by any of the foregoing.
(w) GROUP. Group means collectively the Borrower, Guarantor and JLM
Marketing, Inc.
(x) GUARANTY AGREEMENT. The Guaranty Agreement for Payment of even
date herewith executed by Guarantor. It is expressly understood and agreed
to between the parties that such Guaranty Agreement is enforceable whether
or not Lender seeks recovery from any other guarantors and whether or not
Lender seeks recovery against the Collateral. In addition, Guarantor's
guarantee of payment under the Guaranty Agreement shall not be reduced by
any amounts received by Lender from any other guarantor, including, without
limitation, amounts received from foreclosure of the collateral security
for the Note.
(y) HAZARDOUS MATERIALS shall mean any hazardous, toxic or dangerous
substances, materials and wastes, including hydrocarbons (including
naturally occurring or man-made petroleum and hydrocarbons), flammable
explosives, asbestos, urea formaldehyde insulation, radioactive materials,
biological substances, polychlorinated biphenyls, pesticides, herbicides
and any other kind and/or type of pollutants or contaminants (including
materials which include hazardous constituents), sewage, sludge, industrial
slag, solvents and/or any other similar substances, materials, or wastes
and including any other substances, materials or wastes that are or become
regulated under
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any Environmental Law (including any that are or become classified as
hazardous or toxic under any Environmental Law).
(z) INDEBTEDNESS shall mean, with respect to any Person, any
liability, whether or not contingent, (a) in respect of borrowed money
(whether or not the recourse of the lender is to the whole of the assets of
such Person or only to a portion thereof) or evidenced by bonds, notes,
debentures or similar instruments; (b) representing the balance deferred
and unpaid of the purchase price of any property or services (except any
such balance that constitutes an account payable to a trade creditor
(whether or not an Affiliate) created, incurred, assumed or guaranteed by
such Person in the ordinary course of business of such Person in connection
with obtaining goods, materials or services that is not overdue by more
than ninety (90) days, unless the trade payable is being contested in good
faith); (c) all obligations as lessee under leases which have been, or
should be, in accordance with GAAP recorded as Capital Leases; (d) any
contractual obligation, contingent or otherwise, of such Person to pay or
be liable for the payment of any indebtedness described in this definition
of another Person, including, without limitation, any such indebtedness,
directly or indirectly guaranteed, or any agreement to purchase,
repurchase, or otherwise acquire such indebtedness, obligation or liability
or any security therefor, or to provide funds for the payment or discharge
thereof, or to maintain solvency, assets, level of income, or other
financial condition; (e) all obligations with respect to redeemable stock
and redemption or repurchase obligations under any Capital Stock or other
equity securities issued by such Person; (f) all reimbursement obligations
and other liabilities of such Person with respect to surety bonds (whether
bid, performance or otherwise), letters of credit, banker's acceptances or
similar documents or instruments issued for such Person's account; and (g)
all indebtedness of such Person in respect of indebtedness of another
Person for borrowed money or indebtedness of another Person otherwise
described in this definition which is secured by any consensual lien,
security interest, collateral assignment, conditional sale, mortgage, deed
of trust, or other encumbrance on any asset of such Person, whether or not
such obligations, liabilities or indebtedness are assumed by or are a
personal liability of such Person, all as of such time.
(aa) INFORMATION CERTIFICATE shall mean the Information Certificates
with respect to each Borrower and Guarantor constituting Schedule 1(aa)
hereto containing material information with respect to such Borrower and
Guarantor, its business and assets provided by or on behalf of Borrowers or
Guarantors to Lender in connection with the preparation of this Agreement
and the other Financing Agreements and the financing arrangements provided
for herein.
(bb) INTERCREDITOR AGREEMENT. That certain Intercreditor Agreement of
even date herewith by and among Borrower, Lender and Congress Financial
Corporation.
(cc) INVENTORY shall mean all of JLM Chemical, Inc.'s now owned and
hereafter existing or acquired raw materials, work in process, finished
goods and all other inventory of whatsoever kind or nature, wherever
located.
(dd) LOAN DOCUMENTS. Any and all documents evidencing, securing, or
executed in connection with the Loan, including but not limited to, that
certain
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Agreement for Warrant, Intercreditor Agreement, the Collateral Assignment
of License Agreement and the Collateral Assignment of JLM Marketing Acetone
Contract.
(ee) MATERIAL CONTRACT shall mean (a) any contract or other agreement
(other than the Financing Agreements), written or oral, of any Borrower
involving monetary liability of or to any Person in an amount payable in
excess of $1,000,000.00 in any fiscal year and (b) any other contract or
other agreement (other than the Financing Agreements), whether written or
oral, to which Borrower is a party as to which the breach, nonperformance,
cancellation or failure to renew by any party thereto would have a material
adverse effect on the business, assets, condition (financial or otherwise)
or results of operations of any Borrower or Guarantor or the validity or
enforceability of this Agreement, any of the other Financing Agreements, or
any of the rights and remedies of Lender hereunder or thereunder.
(ff) MORTGAGE. The Mortgage and Security Agreement by JLM Chemicals,
Inc. and Deed of Trust and Security Agreement given by JLM Terminals, Inc.
and JLM Realty, Inc. to a trustee for Lender, as beneficiary both of even
date herewith, securing, among other things, the Note in the amount of
Seven Million One Hundred Thirty-five Thousand and No/100 Dollars
($7,135,000.00), and which are valid first mortgage liens on all of
Borrower's fee simple title interest in and to the Land, all rents, leases
and contract rights related thereto, and all Improvements, fixtures,
attached and unattached equipment, furnishings and personal property owned
by Borrower to be located on or used in connection with the Land, and any
replacement or additions thereof.
(gg) NOTE. The Promissory Note of even date herewith from Borrower to
the order of Lender in the original principal amount of Seven Million One
Hundred Thirty-five Thousand and No/100 Dollars ($7,135,000.00) evidencing
the Loan.
(hh) OBLIGATIONS shall mean any and all loans, letter of credit
accommodations and all other obligations, liabilities and indebtedness of
every kind, nature and description owing by a Borrower or Guarantor to
Lender and/or its Affiliates, including principal, interest, charges, fees,
costs and expenses, however evidenced, whether as principal, surety,
endorser, guarantor or otherwise, whether arising under this Agreement, or
otherwise, whether now existing or hereafter arising, whether arising
before, during or after the initial or any renewal term of this Agreement
or after the commencement of any case with respect to a Borrower or
Guarantor under the United States Bankruptcy Code or any similar statute
(including the payment of interest and other amounts which would accrue and
become due but for the commencement of such case, whether or not such
amounts are allowed or allowable in whole or in part in such case), whether
direct or indirect, absolute or contingent, joint or several, due or not
due, primary or secondary, liquidated or unliquidated, secured or
unsecured, and however acquired by Lender.
(ii) OBLIGOR shall mean any guarantor, endorser, acceptor, surety or
other person liable on or with respect to the Obligations or who is the
owner of any property which is security for the Obligations (including,
without limitation, Guarantors), other than a Borrower.
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(jj) PERMITS means all material permits, licenses, approvals,
consents, certificates, orders or authorizations of any Governmental
Authority required for the lawful conduct of its business.
(kk) PERMITTED HOLDERS shall mean (a) Xxxx X. XxXxxxxx; (b) the heirs,
executors, administrators, testamentary trustees, legatees or beneficiaries
of the Person set forth in Section 1(ll) hereof; (c) a trust, the
beneficiaries of which (ignoring remote contingent interests), or a
corporation, partnership or other entities, the stockholders, members,
general or limited partners or owners of which, include only any or all of
the Person set forth in Section 1(ll) hereof. For purposes of this
definition, the term "control" (including the correlative meanings, the
terms "controlled by" and "under common control with"), as used with
respect to any Person shall mean the possession, directly, or indirectly,
of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of Voting Stock or
by contract or otherwise.
(ll) PERSON or "person" shall mean any individual, sole
proprietorship, partnership, corporation (including any corporation which
elects subchapter S status under the Code), limited liability company,
limited liability partnership, business trust, unincorporated association,
joint stock corporation, trust, joint venture or other entity or any
government or any agency or instrumentality or political subdivision
thereof.
(mm) SUBORDINATED NOTES shall mean, collectively, the promissory notes
or other instruments issued by any Borrower or Guarantor, as the case may
be, payable to the Subordinated Noteholders described on Schedule 1(nn)
hereto, as the same now exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.
(nn) SUBORDINATED NOTEHOLDERS shall mean, collectively, each of the
persons listed on Schedule 1(nn) hereto and their respective heirs,
executors, administrators, legal representatives, successors and assigns.
(oo) SUBSIDIARY or "subsidiary" shall mean, with respect to any
Person, any corporation, limited liability company, limited liability
partnership or other limited or general partnership, trust, association or
other business entity of which an aggregate of at least a majority of the
outstanding Capital Stock or other interests entitled to vote in the
election of the board of directors of such corporation (irrespective of
whether, at the time, Capital Stock of any other class or classes of such
corporation shall have or might have voting power by reason of the
happening of any contingency), managers, trustees or other controlling
persons, or an equivalent controlling interest therein, of such Person is,
at the time, directly or indirectly, owned by such Person and/or one or
more subsidiaries of such Person.
(pp) TITLE COMPANY. Lawyers Title Insurance Company, or any other
title insurance company accepted by Lender in writing.
(qq) VOTING STOCK shall mean with respect to any Person, (a) one (1)
or more classes of Capital Stock of such Person having general voting
powers to elect at least a
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majority of the board of directors, managers or trustees of such Person,
irrespective of whether at the time Capital Stock of any other class or
classes have or might have voting power by reason of the happening of any
contingency, and (b) any Capital Stock of such Person convertible or
exchangeable without restriction at the option of the holder thereof into
Capital Stock of such Person described in clause (a) of this definition.
2. CONDITIONS TO LENDER'S OBLIGATION TO CLOSING. The conditions listed
below are a condition precedent to any obligation of Lender, including, without
limitation, any obligation to close the Loan, and shall be complied with in form
and substance reasonably satisfactory to Lender prior to the closing of the
Loan, except as may be expressly provided below:
(a) TITLE INSURANCE: Borrower shall deliver to Lender an original
Title Commitment for a Lender's Title Insurance Policy issued by the Title
Company, in the amount of the Note, showing "GATX Capital Corporation, a
Delaware corporation, and its successors and assigns" as insured, which
title insurance commitment shall commit to insure (i) that the Mortgage is
a valid first mortgage lien on the fee simple title of the Premises at the
time of the Advance, and (ii) that title to the Land encumbered by the
Mortgage is good and marketable and free and clear of all liens,
encumbrances, easements, exceptions, reservations and restrictions except
for those approved by Lender. Lender shall be sent copies of all recorded
exceptions and the title premium invoice and will require notification from
the Title Company of survey approval. All standard exceptions shall be
deleted from the Policy.
(b) SURVEY: Borrower shall furnish to Lender a foundation survey
recently dated, showing a legal description identical to that in the Title
Commitment and complying with the "Survey Requirements Letter" attached
hereto as Exhibit "C". The certification shall be to the Lender, the Title
Company, Xxxxx & Xxxxxxx, and the Borrower. Borrower shall furnish the
Surveyor with a copy of the Lender's Title Commitment and copies of all
recorded title exceptions in order that the Surveyor can locate all
easements and other matters affecting the property. Six (6) prints of the
survey shall be required and they will be included in the closing binders.
Borrower shall deliver one (1) print of the survey to the Title Company for
their review and approval prior to closing the Loan.
(c) NOTE: The Note shall be duly authorized, executed and delivered to
Lender.
(d) MORTGAGE: The Mortgage shall be duly authorized, executed,
acknowledged, delivered to Lender, and recorded.
(e) GUARANTY AGREEMENT: The Guaranty Agreement shall be duly
authorized, executed, and acknowledged by Guarantor, and delivered to
Lender.
(f) ASSIGNMENTS: The Assignment of Leases, Rents and Contract Rights,
and the Assignment of Permits, Agreements, Approvals, Fees, Deposits and
Trade Names, shall be duly authorized, executed, and acknowledged by
Borrower, and delivered to Lender.
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(g) AGREEMENT FOR WARRANT. The Agreement for Warrant shall be duly
authorized, executed, and acknowledged by Borrower and delivered to Lender,
and must be in form and content acceptable to Lender.
(h) INTERCREDITOR AGREEMENT. The Intercreditor Agreement shall be the
duly authorized, executed, acknowledged and consented to, as the case may
be, by Borrower, Congress Financial Corporation and Lender, and must be in
form and content acceptable to Lender.
(i) COLLATERAL ASSIGNMENT OF LICENSE AGREEMENT. The Collateral
Assignment of License Agreement shall be duly authorized, executed and
acknowledged by Borrower and must be in form and content acceptable to
Lender.
(j) INTENTIONALLY OMITTED.
(k) BORROWER'S AFFIDAVIT: An affidavit of Borrower shall be executed
and delivered to Lender certifying that no liens exist on the Premises
other than for taxes not yet due and payable and that no other parties are
entitled to possession except Borrower.
(l) FINANCING STATEMENTS: Borrower shall execute and deliver to Lender
the Financing Statements Lender may require to perfect its security
interest in the personal property described in the Mortgage and the
Assignments.
(m) INSURANCE: Borrower shall maintain "All Risk Hazard" Insurance on
the Premises. The deductible for said insurance shall not exceed $1,000.00.
In addition, the Borrower shall obtain public liability insurance naming
Lender as an additional insured insuring against all claims for personal or
bodily injury, death, or property damage occurring upon, in or about the
Premises in an amount of not less than Twenty-Seven Million Dollars
($27,000,000.00) single limit coverage. The Borrower will keep all
buildings and improvements whether now standing on the Premises or
hereafter erected and all fixtures and personal property located in and on
the Premises, continuously insured in an amount no less than full
replacement value, which coverage shall insure the Premises against loss or
damage by fire and by the perils covered by extended coverage and against
such other hazards as the Lender, in its sole discretion, shall from time
to time require, for the benefit of the Lender, which for purposes of this
Agreement shall mean actual replacement value (exclusive of costs of
excavation, foundation, underground utilities and footings) with waiver of
depreciation. The Borrower shall also obtain the following insurance (a)
worker's compensation insurance coverage which evidences Borrower's
compliance with all of the requirements of all applicable law with respect
to worker's compensation insurance; (b) if the Premises are located in an
area designated by the Director of the Federal Emergency Management Agency
as a special flood hazard area, flood insurance which shall be in an amount
equal to the maximum insurable of any vertical improvements; provided,
however, that flood insurance will not be required on any portion of the
Premises that is not located in a special flood hazard area; (c) business
interruption/rental income insurance against loss of income in an amount
not less than 100% of twelve (12) months of rent for the Premises; and (d)
pollution liability insurance acceptable to Lender in a minimum amount of
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$30,000,000.00. All such insurance at all times will be in an insurance
company or companies in such amounts and with terms acceptable to the
Lender, with loss, if any, payable to the Lender as its interest may
appear, pursuant to a noncontributory lender clause which shall be
satisfactory to the Lender and addressed to: GATX Capital Corporation, Xxxx
Xxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 and shall
include an endorsement for waiver of subrogation. Additionally, (i) the
liability policy shall be endorsed to specify that the coverage for the
additional insured is primary as respects any other coverage available to
the additional insured; (ii) the liability policy must contain a
cross-liability or severability of interest clause; and (iii) the proper
damage coverage must provide a breach of warranty clause in favor of the
Lender. All insurance policies required hereunder shall provide that they
will not be canceled or modified without thirty (30) days prior written
notice to the Lender. Upon the issuance of such policies the Borrower will
deliver to the Lender certificates of insurance. Any certificates furnished
the Lender shall become its property in the event the Lender becomes the
owner of the Premises by foreclosure or otherwise. The Lender is hereby
authorized and empowered, at its option, to adjust or compromise any loss
under any insurance policies on the Premises, and to collect and receive
the proceeds from any such policy or policies. In case of loss under any
such policy of insurance, the Lender may apply the net proceeds to the
payment of the indebtedness hereby secured, whether due or not, or the
Lender may require all Improvements to be repaired or replaced by the use
of said net proceeds. In the event the funds are to be disbursed for
construction purposes, such funds shall be disbursed in accordance with the
usual and customary construction disbursement procedures of Lender, and in
accordance with this Agreement, which procedures may include, but shall not
be limited to, draw requests, retainage requirements, sufficient evidence
of necessary equity to complete the project, lien waivers, title insurance
endorsements and inspections, which title insurance endorsements and
inspections shall be paid for by Borrower.
(n) APPRAISAL: Lender must receive and approve a certified appraisal
of the Premises.
(o) EXPENSES: Borrower shall pay all those fees and charges due and
payable or ordered paid by Lender as provided in of this Agreement.
(p) PUBLIC REQUIREMENTS: Borrower shall deliver to Lender:
(i) evidence satisfactory to Lender that all utilities (water,
electricity and telephone) and storm and sanitary sewer drainage and
water facilities and solid waste removal are or will be available to
the Premises and are adequate for and may be utilized by the
Improvements erected or to be erected on any portion thereof;
(ii) evidence satisfactory to the Lender that all roads necessary
for the full utilization of the Improvements for their intended
purposes have either been completed or the necessary rights of way
therefor have either been acquired by the appropriate governmental
authorities or have been dedicated to public use and accepted by such
governmental authorities and that all necessary steps have been
11
taken by Borrower and such governmental authorities to assure the
complete construction and installation thereof; and
(iii) verification from appropriate governmental authorities that
the Premises is zoned in accordance with the proposed use, that such
zoning is consistent with and permitted under the appropriate Land Use
Plan for the area, and that all requirements for the development of
the Premises as contemplated herein are satisfied. Borrower shall
submit a zoning letter in form and content acceptable to Lender,
together with a certified copy of the zoning ordinance, a certified
copy of the zoning map, a copy of the preliminary Site Plan as
approved by the Zoning Department.
(q) ENTITY DOCUMENTS:
(i) As to each Borrower and Guarantor, the following documents
shall be required:
(1) The certificate of incorporation and all amendments
thereof, certified by the appropriate official of the State of
Incorporation and/or Organization;
(2) Current good standing certificates from the Secretary of
the State of Incorporation and/or Organization;
(3) Articles of Incorporation and Bylaws certified by the
Secretary of the Corporation;
(4) An incumbency certificate specifying the name and title
of the officers and directors, certified by the secretary and
sealed with the corporate seal; and
(5) Certified resolution of the shareholders and the Board
of Directors authorizing the execution and delivery of the Loan
Documents and all other documents necessary or desirable, for the
consummation of the transaction contemplated herein.
(r) OPINION OF BORROWER'S AND GUARANTOR'S COUNSEL: The Letter of
Opinion of Borrower's and Guarantor's counsel shall be acceptable to Lender
and Lender's counsel.
(s) EASEMENTS AND AGREEMENTS: Lender shall have received and approved
all necessary easements and agreements between the Premises and adjacent
properties and dedicated public rights of way, if necessary, in order for
the Premises to have adequate drainage, retention, utilities, parking,
access and ingress-egress.
(t) TAX I.D. NUMBERS: The Tax Identification Numbers of Borrower and
Guarantor shall be provided to Lender.
12
(u) FINANCIAL STATEMENTS AND TAX RETURNS: Current financial statements
and tax returns of Borrower and Guarantor shall be delivered to and
approved by Lender.
(v) UCC-1 SEARCHES: Borrower shall deliver to Lender a UCC-1 searches
from the Secretary of State of Illinois, North Carolina and Delaware on
Borrower and Guarantor, which UCC-1 Searches shall be delivered to Lender
and Lender's counsel. Copies of all items noted on the searches shall be
furnished to Lender at least three (3) days prior to closing of the Loan.
(w) TAXES: All taxes and assessments payable in connection with the
Premises and the Improvements are to be paid at the time of the closing of
the Loan and subsequent taxes and assessments must be paid when due. Paid
ad valorem tax receipts for the year 2000 shall be furnished to Lender
prior to the closing of the Loan.
(x) SATISFACTION OF MORTGAGE: Satisfaction of all existing mortgages
affecting the Premises, if any, will be required prior to the closing of
the Loan.
(y) LIENS: Lender shall receive evidence satisfactory to Lender in
Lender's sole discretion that no liens exist for work done prior to the
closing of the Loan and that no rights exist which could be deemed superior
to Lender's lien priority as a first Lender or grantee under the Mortgage.
(z) TOXIC WASTE AND ENVIRONMENTAL AUDITS: Borrower shall provide to
Lender a Phase I Environmental Audit which must be acceptable to Lender,
otherwise Lender shall not be obligated to close the Loan. Additionally, as
a condition to closing the Loan, Borrower and Guarantor shall execute and
deliver an Environmental Indemnification Agreement prepared by Lender which
shall hold Lender and its successors and assigns harmless in the event of
present or future existence of hazardous substances. It is expressly
understood and agreed to between the parties that such obligations under
the Indemnity Agreement are enforceable whether or not Lender seeks
recovery against the collateral securing the Loan.
(aa) LICENSE AGREEMENT AND JLM MARKETING ACETONE CONTRACT. Borrower
shall not, without each case having obtained the prior written consent of
Lender, amend or modify, directly or indirectly, or, in any respect
whatsoever cancel, terminate or accept any surrender of the License
Agreement. Furthermore, Borrower acknowledges and agrees that any
amendment, or modification, directly or indirectly or, any cancellation,
termination or acceptance of any surrender of the JLM Marketing Acetone
Contract shall constitute a default hereunder.
(bb) ACCESS: Borrower shall deliver to Lender evidence that access to
the Premises is provided by a publicly dedicated paved road appurtenant
thereto.
(cc) FEES: Borrower shall have paid Lender any remaining portion of
the loan origination fee for the Loan.
13
(dd) FLOOD CERTIFICATION: Lender, at Borrower's expense, shall obtain
a flood certification from a third party.
(ee) REPRESENTATIONS AND WARRANTIES: The representations and
warranties of Borrower as set forth in this Agreement and the Loan
Documents shall be true and correct.
3. EXPENSES: Borrower shall pay all reasonable fees and charges incurred in
the procuring and making of the Loan and all other reasonable expenses incurred
by Lender during the term of the Loan, including without limitation Title
Company's fees and premiums, charges for examination of title to the Premises,
expenses of surveys, documentary stamp taxes, intangible taxes, recording
expenses, fees of the Inspector and disbursing agent, and the fees of the
attorneys for Lender. The Borrower shall also pay any and all insurance
premiums, taxes, assessments, water rates, sewer rates and other charges, liens
and encumbrances upon the Premises, any other expenses shown on EXHIBIT "B"
attached hereto, and any other amounts necessary for the payment of the cost of
the Improvements. Such amounts, unless sooner paid, shall be paid from time to
time as Lender shall request either to the person to whom such payments are due
or to Lender if Lender has paid the same, or Lender may, at its option, deduct
from any Advance any amounts necessary for the payment of these items, and apply
such amounts in making such payments, and all sums so applied shall be deemed
Advances under this Agreement.
4. WARRANTIES AND REPRESENTATIONS OF BORROWER. Borrower represents and
warrants (which representations and warranties shall be deemed continuing) as
follows:
(a) ORGANIZATION STATUS. Borrower is (i) duly organized or
incorporated, as applicable, under the laws of the state of its creation,
(ii) in good standing under the laws of the state of its creation, and
(iii) has stock outstanding which has been duly and validly issued, if
applicable;
(b) FINANCIAL STATEMENTS. The financial statements of Borrower and
Guarantor heretofore delivered to Lender are true and correct in all
respects, and fairly present the financial condition of the Borrower and
Guarantor as of the dates thereof, and no material adverse change has
occurred in the financial condition reflected therein since the dates
thereof and no additional secured borrowings with respect to the Premises
have been made by Borrower since the date thereof other than the borrowing
contemplated hereby or approved by Lender;
(c) AUTHORITY TO ENTER INTO LOAN DOCUMENTS. The Borrower and Guarantor
have full authority to enter into the Loan Documents and consummate the
transactions contemplated hereby, and the facts and matters expressed or
implied in the opinions of their legal counsel are true and correct;
(d) VALIDITY OF LOAN DOCUMENTS. The Loan Documents have been approved
by those persons having proper authority, and to the best of Borrower's
knowledge are in all respects legal, valid and binding according to their
terms;
14
(e) PRIORITY OF LIEN ON COLLATERAL. Except to the extent to secure the
Indebtedness noted in Section 5(i), no chattel mortgage, xxxx of sale,
security agreement, financing statement or other title retention agreement
(except those executed in favor of Lender) has been or will be executed
with respect to any Collateral as described in the Financing Statement,
except as disclosed in the Intercreditor Agreement and Lender hereby
acknowledges and agrees that notwithstanding any other provision contained
herein the consummation of the lending transaction between any and all
Borrowers or Guarantor and Congress Financial Corporation and SouthTrust
Bank, as disclosed to Lender in the Intercreditor Agreement and the
SouthTrust Bank agreements, as the case may be, will not and does not
result in a default hereunder or under any of the other Loan Documents;
(f) CONFLICTING TRANSACTIONS OF BORROWER. The consummation of the
transaction hereby contemplated and the performance of the obligations of
Borrower or Guarantor under and by virtue of the Loan Documents will not
result in any breach of, or constitute a default under, any lease, bank
loan or credit agreement, or other instrument to which Borrower or
Guarantor is a party or by which it may be bound or affected;
(g) TAXES. Borrower certifies that it has filed or caused to be filed
all federal, state and other tax returns which, to the best of its
knowledge, are required to be filed, and has paid or caused to be paid all
taxes as shown on said returns or in any manner due to be paid (including,
but not limited to, ad valorem and personal property taxes) or on any
assessment received by it and not being contested in good faith, to the
extent that such taxes have become due. Borrower further certifies that it
has paid all other taxes, levies, and charges of any nature, including any
governmental charges.
(h) PENDING LITIGATION. There are no actions, suits or proceedings
pending against Borrower, Guarantor or the Premises, or, to the knowledge
of Borrower, circumstances which could lead to a verdict against Borrower
or Guarantor in excess of Fifty Thousand and No/100 Dollars ($50,000.00),
or involving the validity or enforceability of any of the Loan Documents,
before or by any government authority, except actions, suits and
proceedings which have been specifically disclosed to and approved by
Lender in writing; and to Borrower's knowledge neither Borrower nor
Guarantor is not in default with respect to any order, writ, injunction,
decree or demand of any court or any governmental authority;
(i) AVAILABILITY OF UTILITIES. All utility services necessary for the
operation of the Improvements for their intended purpose are or will be
available at the boundaries of the Premises, including water supply, storm
and sanitary sewer facilities, and gas, electric, telephone and solid waste
facilities, and Borrower has obtained all necessary permits and permissions
required from governmental authorities for unrestricted access to and use
of such services in connection with use of the Improvements;
(j) CONDITION OF PREMISES. The Premises are not now damaged or injured
as a result of any fire, explosion, accident, flood or other casualty;
(k) CONTRACTS. Borrower (including any officer or partner of Borrower)
has not as of the date hereof only made any contract or arrangement of any
kind the performance of
15
which by the other party thereto would give rise to a lien on the
Premises. There have been no amendments or modifications to any of the
contracts approved by Lender, except as approved by Lender; and
there is in existence no default or grounds for default thereunder;
(l) AVAILABILITY OF ROADS. To the best of Borrower's knowledge upon
due inquiry and investigation, all roads necessary for the full utilization
of the Improvements for their intended purposes have either been completed
or the necessary rights of way therefor have either been acquired by the
appropriate local authorities or have been dedicated to public use and
accepted by such local authorities and all necessary steps have been taken
by Borrower and such local authorities to assure the complete construction
and installation thereof;
(m) NO DEFAULT. There is no default on the part of Borrower under this
Agreement, the Note or the Mortgage, and no event has occurred and is
continuing which with notice, or the passage of time, or either, would
constitute a default under any provision thereof; and
(n) AGREEMENTS. Borrower shall comply with all the terms and
conditions of the Agreement for Warrant and Intercreditor Agreement.
(o) COMPLIANCE OF LAWS. The use of the Premises located in Blue
Island, Illinois as a phenol production plant and the use of the Premises
in Wilmington, North Carolina as a terminal facility do not violate (i) any
applicable law, regulation, ordinance or order of any kind whatsoever
(including any such laws relating to zoning, building and environmental
protection), (ii) any permit or license issued with respect to the
respective Premises, or (iii) any condition, easement, right-of-way,
covenant or restriction affecting the Premises. To the best of Borrower's
knowledge upon due inquiry and investigation, the Premises is in compliance
with all applicable laws, regulations, ordinances and orders applicable
thereto.
(p) PERMITS. All necessary and required franchises, licenses,
authorizations, registrations, permits and approvals for the use and
occupancy of the Premises have been obtained from all Governmental
Authorities having jurisdiction over the Premises as to permit the
operation of the Premises as herein contemplated. Borrower has provided
Lender with true and correct copies of all of the certificates of occupancy
and other licenses, permits and approvals respecting the Premises, and such
permits and approvals remain in full force and effect without modification
or exception.
(q) PHYSICAL CONDITION OF PREMISES. All of the Improvements are in
good condition and repair. Borrower is aware of no latent or patent
structural or other significant defect or deficiency in such Improvements.
City water supply, storm and sanitary sewers, and electrical, gas and
telephone facilities are available to each of the Premises within the
boundary lines of the respective Premises, are sufficient to meet the
reasonable needs of each of the Premises as now used or contemplated to be
used, no other utility facilities are necessary to meet the reasonable
needs of each of the Premises as now used, and design and as-built
conditions of each of the Premises are such that
16
surface and storm water does not accumulate on the respective Premises
and does not drain the respective Premises across land of adjacent
property owners. To the best of Borrower's knowledge upon due inquiry
and investigation, no part of either Premises is within a flood plain
and none of the Improvements create an encroachment over, across or
upon any of the Premises boundary lines, rights-of-way or easements,
and no building or other improvement on adjoining land create such an
encroachment.
5. ADDITIONAL COVENANTS OF BORROWER. Borrower covenants and agrees with
Lender as follows:
(a) MAINTENANCE OF EXISTENCE. Each Borrower and Guarantor shall at all
times preserve, renew and keep in full, force and effect its corporate
existence and rights and franchises with respect thereto (other than
pursuant to a merger or liquidation permitted hereunder) and maintain in
full force and effect all MATERIAL Permits, licenses, trademarks,
tradenames, approvals, authorizations, leases and contracts necessary to
carry on the business as presently or proposed to be conducted. Each
Borrower and Guarantor shall give Lender thirty (30) days prior written
notice of any proposed change in its corporate name, which notice shall set
forth the new name and each Borrower and Guarantor shall deliver to Lender
a copy of the amendment to the certificate of incorporation of such
Borrower or Guarantor providing for the name change certified by the
Secretary of State of the jurisdiction of incorporation of such Borrower,
Guarantor or Subsidiary as soon as it is available.
(b) NEW COLLATERAL LOCATIONS. Each Borrower and Guarantor may open any
new location within the continental United States provided such Borrower or
Guarantor (a) gives Lender thirty (30) days prior written notice of the
intended opening of any such new location and (b) executes and delivers, or
causes to be executed and delivered, to Lender such agreements, documents,
and instruments as Lender may deem reasonably necessary or desirable to
protect its interests in the Collateral at such location. For purposes
hereof, a "new location" shall mean any location of Collateral other than
those set forth in the Information Certificate.
(c) COMPLIANCE WITH LAWS, REGULATIONS, ETC. Each Borrower and
Guarantor shall at all times, comply in all material respects with all
laws, rules, regulations, licenses, Permits, approvals and orders
applicable to it and duly observe all requirements of any Federal, State or
local Governmental Authority, including ERISA, the Code, the Occupational
Safety and Health Act of 1970, as amended, the Fair Labor Standards Act of
1938, as amended, and all statutes, rules, regulations, orders, permits and
stipulations relating to environmental pollution and employee health and
safety, including all of the Environmental Laws.
(d) PAYMENT OF TAXES AND CLAIMS. Each Borrower and Guarantor shall
duly pay and discharge all taxes, assessments, contributions and
governmental charges upon or against it or its properties or assets, except
for taxes the validity of which are being contested in good faith by
appropriate proceedings diligently pursued and available to such Borrower
or Guarantor, as the case may be, and with respect to which adequate
reserves have been set aside on its books. Each Borrower and Guarantor
shall be liable
17
for any tax or penalties imposed on Lender as a result of the financing
arrangements provided for herein and each Borrower and Guarantor agrees to
indemnify and hold Lender harmless with respect to the foregoing, and to
repay to Lender on demand the amount thereof, and until paid by Borrowers
such amount shall be added and deemed part of the Loans, PROVIDED, THAT,
nothing contained herein shall be construed to require Borrowers or
Guarantor to pay any income or franchise taxes attributable to the income
of Lender from any amounts charged or paid hereunder to Lender. The
foregoing indemnity shall survive the payment of the Obligations and the
termination or non-renewal of this Agreement.
(e) Intentionally Omitted.
(f) FINANCIAL STATEMENTS AND OTHER INFORMATION.
(i) Each Borrower and Guarantor shall, keep proper books and
records in which true and complete entries shall be made of all
dealings or transactions of or in relation to the Collateral and the
business of Borrowers and Guarantor in accordance with GAAP and
Borrowers and Guarantor shall promptly furnish to Lender all such
financial and other information as Lender shall reasonably request
relating to the Collateral and the assets, business and operations of
Borrower and Guarantor, and to notify the auditors and accountants of
Borrowers and Guarantor that Lender is authorized to obtain such
information directly from them. Without limiting the foregoing,
Borrowers and Guarantor shall each furnish or cause to be furnished to
Lender, the following: (i) within thirty (30) days after the end of
each fiscal month, (A) monthly unaudited consolidated financial
statements, and unaudited consolidating financial statements for
Guarantor and each Borrower (including in each case balance sheets,
statements of income and loss, statements of cash flow, and statements
of shareholders' equity), all in reasonable detail, fairly presenting
the financial position and the results of the operations of Guarantor
and each Borrower as of the end of and through such fiscal month,
certified to be correct by the chief financial officer of each of
Guarantor and each Borrower, subject to normal year-end adjustments
and accompanied by a compliance certificate substantially in the form
of Exhibit C hereto, and (B) monthly unaudited consolidated financial
statements, and unaudited consolidating financial statements for
Borrowers (including in each case balance sheets, statements of income
and loss, statements of cash flow, and statements of shareholders'
equity), all in reasonable detail, fairly presenting the financial
position and the results of the operations of Borrowers as of the end
of and through such fiscal month, certified to be correct by the chief
financial officer of each of Borrowers, subject to normal year-end
adjustments and accompanied by a compliance certificate substantially
in the form and content acceptable to Lender along with a schedule in
form reasonably satisfactory to Lender of the calculations used in
determining, as of the end of such month, whether Borrowers were in
compliance with the covenants set forth in Sections 5(i),5(k) and 5(n)
and of this Agreement for such month; (ii) within forty-five (45) days
after the end of each fiscal quarter, (A) quarterly unaudited
consolidated financial statements of Guarantor and each Borrower
(including in each case, balance sheets, statements
18
of income and loss and statements of cash flow) and unaudited
consolidating financial statements of each Borrower and Guarantor
(including in each case, balance sheets, statements of income and loss
and statements of cash flow), in each case all in reasonable detail,
fairly presenting the financial position and the results of operations
of Guarantor and each Borrower as of the end of and through such
fiscal quarter, and (B) quarterly unaudited consolidated financial
statements of Borrowers (including in each case, balance sheets,
statements of income and loss and statements of cash flow) and
unaudited consolidating financial statements of Borrowers (including
in each case, balance sheets, statements of income and loss and
statements of cash flow), in each case all in reasonable detail,
fairly presenting the financial position and the results of operations
of Borrowers as of the end of and through such fiscal quarter, and
(iii) within ninety (90) days after the end of each fiscal year, (A)
audited consolidated financial statements and audited consolidating
financial statements of Guarantor and each Borrower (including in each
case balance sheets, statements of income and loss, statements of cash
flow and statements of shareholders' equity), and the accompanying
notes thereto, all in reasonable detail, fairly presenting the
financial position and the results of the operations of Guarantor and
each Borrower as of the end of and for such fiscal year, together with
the unqualified opinion of independent certified public accountants,
which accountants shall be an independent accounting firm selected by
Borrowers and Guarantor and reasonably acceptable to Lender, that such
financial statements have been prepared in accordance with GAAP, and
present fairly the results of operations and financial condition of
Guarantor and each Borrower as of the end of and for the fiscal year
then ended, and (B) audited consolidated financial statements and
audited consolidating financial statements of Borrowers (including in
each case balance sheets, statements of income and loss, statements of
cash flow and statements of shareholders' equity), and the
accompanying notes thereto, all in reasonable detail, fairly
presenting the financial position and the results of the operations of
Borrowers as of the end of and for such fiscal year, together with the
unqualified opinion of independent certified public accountants, which
accountants shall be an independent accounting firm selected by
Borrowers and Guarantor and reasonably acceptable to Lender, that such
financial statements have been prepared in accordance with GAAP, and
present fairly the results of operations and financial condition of
Borrowers as of the end of and for the fiscal year then ended.
(ii) Borrowers and Guarantor shall promptly notify Lender in
writing of the details of (i) any loss or damage that involves
Collateral having a value in excess of $500,000, (ii) any action, suit
or proceeding relating to Collateral having a value in excess of
$500,000, (iii) any Material Contract of a Borrower or Guarantor being
terminated or amended or any new Material Contract entered into (in
which event such Borrower or Guarantor shall provide Lender with a
copy of such Material Contract), (iv) any order, judgment or decree in
excess of $1,000,000 shall have been entered against a Borrower or
Guarantor or any of its properties or assets, (v) any notification of
violation of laws or regulations received by a Borrower or Guarantor,
(vi) any ERISA Event, and (vii) the
19
occurrence of any Event of Default or act, condition or event which,
with notice or the passage of time or giving of notice or both, would
constitute an Event of Default.
(iii) Borrowers and Guarantor shall promptly after the sending or
filing thereof furnish or cause to be furnished to Lender copies of
all reports which any Borrower or Guarantor sends to its stockholders
generally and copies of all reports and registration statements which
any Borrower or Guarantor files with the Securities and Exchange
Commission, any national securities exchange or the National
Association of Securities Dealers, Inc.
(iv) Borrowers and Guarantor shall furnish or cause to be
furnished to Lender such budgets, forecasts, projections and other
information respecting the Collateral and the businesses of Borrowers
and Guarantor, as Lender may, from time to time, reasonably request.
Lender is hereby authorized to deliver a copy of any financial
statement or any other information relating to the businesses of
Borrowers and Guarantor to any court or other Governmental Authority
or to any participant or assignee or prospective participant or
assignee. Each Borrower and Guarantor hereby irrevocably authorizes
and directs all accountants or auditors to deliver to Lender, at
Borrowers' expense, copies of the financial statements of Borrowers
and Guarantor and any reports or management letters prepared by such
accountants or auditors on behalf of Borrowers and Guarantor and to
disclose to Lender such information as they may have regarding the
businesses of Borrowers and Guarantor. Any documents, schedules,
invoices or other papers delivered to Lender may be destroyed or
otherwise disposed of by Lender one (1) year after the same are
delivered to Lender, except as otherwise designated by Borrowers to
Lender in writing.
(g) SALE OF ASSETS, CONSOLIDATION, MERGER, DISSOLUTIONS, ETC. In
determining whether or not to make the Loan secured hereby, Lender examined
the credit-worthiness of Borrower, found it acceptable and relied and
continues to rely upon same as the means of repayment of the indebtedness
secured hereby. Lender also evaluated the background and experience of
Borrower in owning and operating property such as the Premises, found it
acceptable and relied and continues to rely upon same as the means of
maintaining the value of the Premises, which is Lender's security for the
Loan. Borrower is an entity well-experienced in borrowing money and owning
and operating property such as the Premises, was ably represented by a
licensed attorney at law in the negotiation and documentation of the Loan
secured hereby and bargained at arm's length and without duress of any kind
for all of the terms and conditions of the Loan, including this provision.
Borrower recognizes that Lender is entitled to keep its loan portfolio at
current interest rates by either making new loans at such rates or
collecting assumption fees and/or increasing the interest rate on a loan,
the security for which is purchased by a party other than the original
Borrower. Borrower further recognizes that any secondary or junior
financing placed upon the Premises (a) may divert funds which would
otherwise be used to pay the Note secured hereby; (b) could result in
acceleration and foreclosure by any such junior encumbrancer which would
force Lender to take measures and incur expenses to protect its security;
(c) would detract from the value of the Premises should
20
any such junior mortgagee come into possession thereof with the intention
of selling same; and (d) impair Lender's right to accept a deed in lieu of
foreclosure, as a foreclosure by Lender would be necessary to clear the
title to the Premises.
In accordance with the foregoing and for the purposes of (i) protecting
Lender's security both of repayment by Borrower and of value of the Premises;
(ii) giving Lender the full benefit of its bargain and contract with Borrower;
(iii) allowing Lender to raise the interest rate and/or collect assumption fees;
and (iv) keeping the Premises free of subordinate financing liens, Borrower
agrees that if this paragraph be deemed a restraint on alienation, that it is a
reasonable one and that, any sale, conveyance, assignment, further encumbrance
or other transfer of title to the Premises or any interest therein (whether
voluntarily or by operation of law) without Lender's prior written consent,
which may be withheld for any reason, shall be an event of default hereunder.
For the purpose of, and without limiting the generality of, the preceding
sentence, the occurrence at any time of any of the following events shall be
deemed to be an unpermitted transfer of title to the Premises and therefore an
event of default hereunder:
(i) any sale, conveyance, assignment, or other transfer of or the
grant of a security interest in, all or any part of the title to the
Premises, except for Congress Financial Corporation's subordinate
mortgage lien encumbering the Blue Island, Illinois property and
except as permitted in the Note;
(ii) any sale, conveyance, assignment or other transfer of any
stock, or any other beneficial and/or equity ownership interest in
Borrower;
(iii) the incurrence by Borrower of any new or additional
liabilities without the prior written consent of Lender, except as set
forth in Section 5(i);
(iv) except as otherwise set forth herein, (i) the sale, lease,
exchange, conveyance or other disposition of all or substantially all
of the Guarantor's property or business, or (ii) its merger into or
consolidation with any other corporation (other than a wholly-owned
subsidiary of the Guarantor), or (iii) any transaction (including a
merger or other reorganization) or series of related transactions, in
which more than 50% of the voting power of the Guarantor is disposed
of.
(v) merge into or with or consolidate with any other Person or
permit any other Person to merge into or with or consolidate with it,
EXCEPT, THAT, any Borrower or Guarantor may merge with and into or
consolidate with any other Borrower or Guarantor, PROVIDED, THAT, each
of the following conditions is satisfied as determined by Lender: (i)
Lender shall have received not less than ten (10) Business Days' prior
written notice of the intention of such Borrower or Guarantor to so
merge or consolidate and such information with respect thereto as
Lender may reasonably request, (ii) as of the effective date of the
merger or consolidation and after giving effect thereto, no Event of
Default or act, condition or event which with notice or passage of
time or both would constitute an Event of Default, shall exist or have
occurred, (iii) Lender shall have received, true, correct and complete
copies of all agreements, documents and instruments
21
relating to such merger, including, but not limited to, the
certificate or certificates of merger as filed with each appropriate
Secretary of State, (iv) the surviving entity shall, immediately
before and immediately after giving effect to such transaction or
series of transactions have a net worth (including, without
limitation, any Indebtedness incurred or anticipated to be incurred in
connection with or in respect of such transaction or series of
transactions) equal to or greater than the net worth of each of the
entities involved in such merger immediately prior to such transaction
or series of transactions, (v) in the case of the merger of any
Borrower, such Borrower as the surviving corporation shall expressly
confirm, ratify and assume the Obligations and the Financing
Agreements to which it is a party in writing, in form and substance
satisfactory to Lender, and execute and deliver such other agreements,
documents and instruments as Lender may request in connection
therewith, and (vi) each Borrower and Guarantor shall ratify and
confirm that its guarantees of the Obligations (and in the case of
Borrowers, its joint and several liability, the guarantees of the
Obligations of the other Borrowers) shall apply to the Obligations as
assumed by such surviving entity;
(vi) sell, assign, lease, transfer, abandon or otherwise dispose
of any Capital Stock or Indebtedness to any other Person or any of the
Collateral to any other Person EXCEPT as otherwise provided herein
and, FOR,
(1) sales of Inventory in the ordinary course of business,
(2) the sale or other disposition of Equipment so long as
(A) any proceeds are paid to Lender for application to the
Obligations and (B) as of the date of such sale and after giving
effect thereto, no Event of Default, or act, condition or event
which with notice or passage of time or both would constitute an
Event of Default shall exist or have occurred,
(3) the issuance and sale by Guarantor of Capital Stock
after the date hereof; PROVIDED, THAT, (A) Lender shall have
received not less than ten (10) Business Days' prior written
notice of such issuance and sale by Guarantor, which notice shall
specify the parties to whom such shares are to be sold, the terms
of such sale, the total amount which it is anticipated will be
realized from the issuance and sale of such stock and the net
cash proceeds which it is anticipated will be received by such
Borrower or Guarantor, as the case may be, from such sale, (B)
Guarantor shall not be required to pay any cash dividends or
repurchase or redeem such Capital Stock or make any other
payments in respect thereof, except to the extent such dividends,
or repurchases or redemptions are otherwise permitted under
Section 5(k) hereof, (C) the terms of such Capital Stock, and the
terms and conditions of the purchase and sale thereof, shall not
include any terms that include any limitation on the right of
Borrowers to request or receive Loans or Letter of Credit
Accommodations or the right of Borrowers to amend or modify any
of the terms and conditions of this Agreement or any of the other
Financing Agreements or otherwise in any
22
way relate to or affect the arrangements of Borrowers with Lender
or are more restrictive or burdensome to Borrowers than the terms
of any Capital Stock in effect on the date hereof, (D) any
proceeds payable to Guarantor in connection with the issuance and
sale of such Capital Stock shall be paid to Lender for
application to the Obligations, and (E) as of the date of such
issuance and sale and after giving effect thereto, no Event of
Default or act, condition or event which with notice or passage
of time or both would constitute an Event of Default shall exist
or have occurred;
(vii) the issuance of Capital Stock of any Borrower or
Guarantor consisting of common stock pursuant to a stock option plan
or 401(k) plan of such Borrower or Guarantor for the benefit of its
employees, directors and consultants, provided, that, in no event
shall such Borrower or Guarantor be required to issue, or shall such
Borrower or Guarantor issue, Capital Stock pursuant to such stock
option plan or 401(k) plan which would result in a Change of Control
or other Event of Default;
(1) form or acquire any subsidiaries other than those
listed on the Information Certificates; and
(2) agree to do any of the foregoing (unless such agreement
has been consented to in writing by Lender or includes as a
condition to the effectiveness of such agreement that Lender's
consent thereto be obtained).
Any consent by Lender, or any waiver of an event of default, under this
Paragraph shall not constitute a consent to, or waiver of any right, remedy or
power of Lender upon a subsequent event of default under this Paragraph.
(h) ENCUMBRANCES. Each Borrower and Guarantor shall not create, incur,
assume or suffer to exist any security interest, mortgage, pledge, lien,
charge or other encumbrance of any nature whatsoever on the Premises or
Collateral, EXCEPT:
(i) liens and security interests of Lender;
(ii) liens securing the payment of taxes, either not yet overdue
or the validity of which are being contested in good faith by
appropriate proceedings diligently pursued and available to such
Borrower or Guarantor and with respect to which adequate reserves have
been set aside on its books;
(iii) non-consensual statutory liens (other than liens securing
the payment of taxes) arising in the ordinary course of such
Borrower's or Guarantor's business to the extent: (A) such liens
secure indebtedness which is not overdue or (B) such liens secure
indebtedness relating to claims or liabilities which are fully insured
and being defended at the sole cost and expense and at the sole risk
of the insurer or being contested in good faith by appropriate
proceedings diligently pursued and available to such Borrower or
Guarantor, in
23
each case prior to the commencement of foreclosure or other similar
proceedings and with respect to which adequate reserves have been set
aside on its books;
(iv) zoning restrictions, easements, licenses, covenants and
other restrictions affecting the use of real property which do not
interfere in any material respect with the use of such real property
or ordinary conduct of the business of such Borrower or Guarantor as
presently conducted thereon or materially impair the value of the real
property which may be subject thereto;
(v) purchase money security interests in Equipment (including
Capital Leases) and purchase money mortgages on real property, in each
case, acquired after the date hereof so long as such security
interests and mortgages do not apply to any property of a Borrower or
Guarantor other than the Equipment or real property so acquired, and
the Indebtedness secured thereby does not exceed the cost of the
Equipment or real property so acquired, as the case may be;
(vi) pledges and deposits of cash by any Borrower or Guarantor
after the date hereof in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other types of
social security benefits consistent with the practices of Borrowers
and Guarantor as of the date hereof;
(vii) pledges and deposits of cash by Borrowers after the date
hereof to secure the performance of tenders, bids, leases, trade
contracts (other than for the repayment of Indebtedness), and other
similar obligations in each case in the ordinary course of business
consistent with the practices of Borrowers and Guarantor as of the
date hereof; provided, that, in connection with any performance bonds
issued by a surety or other person, the issuer of such bond shall have
waived in writing any rights in or to, or other interest in, any of
the Collateral in an agreement, in form and substance reasonably
satisfactory to Lender;
(viii) liens arising from (A) operating leases and the
precautionary UCC financing statement filings or registrations in
respect thereof and (B) equipment or other materials which are not
owned by a Borrower located on the premises of such Borrower (but not
in connection with, or as part of, the financing thereof) from time to
time in the ordinary course of business and consistent with current
practices of Borrowers in and the precautionary UCC financing
statement filings in respect thereof;
(ix) liens and security interests set forth on Schedule 5(h)(ix)
attached.
(x) liens and security interests on the Collateral in favor of
Congress Financial Corporation to secure the Indebtedness of, among
others, Borrowers and Guarantor to Congress Financial Corporation
permitted under Section 5(i) below; and
24
(xi) liens and security interests on the real property of
Guarantor in favor of the SouthTrust Bank to secure the Indebtedness
of, among others, Borrowers and Guarantor to SouthTrust permitted
under Section 5(i) below.
(i) INDEBTEDNESS. Each Borrower and Guarantor shall not incur, create,
assume, become or be liable in any manner with respect to, or permit to
exist, any Indebtedness, except for:
(i) the Obligations;
(ii) purchase money Indebtedness (including Capital Leases)
arising after the date hereof to the extent secured by purchase money
security interests in Equipment (including Capital Leases) and
purchase money mortgages on real estate not to exceed $500,000 in the
aggregate at any time outstanding so long as such security interests
and mortgages do not apply to any property of such Person other than
the Equipment or real estate so acquired, and the Indebtedness secured
thereby does not exceed the cost of the Equipment or real estate so
acquired, as the case may be;
(iii) unsecured Indebtedness of a Borrower to any other Borrower
arising after the date hereof pursuant to loans by such Borrower to
such other Borrower to the extent permitted under Section 5(j)(iv)
hereof;
(iv) unsecured Indebtedness of a Borrower to any Guarantor
arising after the date hereof pursuant to loans by such Guarantor to
such Borrower to the extent permitted under Section 5(j)(v) hereof;
(v) unsecured Indebtedness of a Guarantor or a Subsidiary of any
Guarantor or any Borrower (other than a Borrower) to any Borrower
arising after the date hereof pursuant to loans by such Borrower to
such Guarantor or a Subsidiary of such Guarantor to the extent
permitted under Section 5(j)(vi) hereof,
(vi) Indebtedness of any Subsidiary of Guarantor, other than
Borrowers and Guarantor, PROVIDED, THAT, (i) as to any such
Indebtedness, Borrowers and Guarantor shall not be directly or
indirectly liable (by virtue of such Borrower or Guarantor being the
primary obligor on, guarantor of, or otherwise liable in any respect
of such Indebtedness), and (ii) the occurrence of a default with
respect thereto shall not result in, or permit any holder of any
Indebtedness of any Borrower or Guarantor to declare a default on
Indebtedness of any Borrower or Guarantor or cause the payment thereof
to be accelerated or payable prior to its stated maturity;
(vii) Indebtedness of Borrowers, Guarantor or any of their
respective Subsidiaries under swap agreements, cap agreements, collar
agreements, exchange agreements, futures or forward hedging contracts
or similar contractual arrangements intended to protect a Person
against fluctuations in interest rates, currency exchange rates or the
price of raw materials used or produced in the
25
business of any Borrower; PROVIDED, THAT, such arrangements are with
banks or other financial institutions that have combined capital and
surplus and undivided profits of not less than US$250,000,000 and are
not for speculative purposes and such Indebtedness shall be unsecured;
(viii) Indebtedness of Borrowers to Congress Financial
Corporation ("Revolving Loan Lender") evidenced by or arising under
the Revolving Loan Lender Agreements (as in effect on the date
hereof), PROVIDED, THAT:
(a) the aggregate principal amount of such Indebtedness
shall not exceed $20,000,000, less the aggregate amount of all
repayments, repurchases or redemptions thereof, whether optional
or mandatory, plus interest thereon at the applicable rates
provided in the Revolving Loan Lender agreements in effect on the
date hereof,
(b) as of the date hereof, no default or event of default,
or event which with notice or passage of time or both would
constitute an event of default exists or has occurred under any
of the Revolving Loan Lender agreements;
(c) Borrowers and Guarantor shall not, directly or
indirectly, make, or be required to make, any payments in respect
of such Indebtedness, EXCEPT, THAT, Borrowers may make regularly
scheduled payments of principal, interest and fees, on an
unaccelerated basis, in respect of such Indebtedness in
accordance with the terms of the Revolving Loan Lender agreements
as in effect on the date hereof;
(d) Borrowers and Guarantor shall not, directly or
indirectly, amend, modify, alter or change any of the material
terms of such Indebtedness or any of the Revolving Loan Lender
agreements as in effect on the date hereof, EXCEPT, THAT,
Borrowers may, after prior written notice to Lender, amend,
modify, alter or change the terms thereof so as to extend the
maturity thereof or defer the timing of any payments in respect
thereof, or to forgive or cancel any portion of such Indebtedness
other than pursuant to payments thereof, or to reduce the
interest rate or any fees in connection therewith, or to make the
provisions thereof less restrictive or burdensome than the terms
or conditions of the Revolving Loan Lender agreements as in
effect on the date hereof; and
(e) Borrowers shall furnish to Lender all notices or demands
in connection with such Indebtedness either received by any
Borrower or Guarantor or on its behalf promptly after the
26
receipt thereof, or sent by any Borrower or Guarantor or on its
behalf concurrently with the sending thereof, as the case may be;
(ix) Indebtedness of Borrowers and Guarantor to SouthTrust Bank
evidenced by or arising under the SouthTrust Bank agreements (as in
effect on the date hereof), PROVIDED, THAT:
(a) the aggregate principal amount of such Indebtedness
shall not exceed $1,885,000.00, less the aggregate amount of all
repayments, repurchases or redemptions thereof, whether optional
or mandatory, plus interest thereon at the applicable rates
provided in the SouthTrust Bank agreements in effect on the date
hereof,
(b) as of the date hereof, no default or event of default,
or event which with notice or passage of time or both would
constitute an event of default exists or has occurred under any
of the SouthTrust Bank agreements;
(c) Borrowers and Guarantor shall not, directly or
indirectly, make, or be required to make, any payments in respect
of such Indebtedness, EXCEPT, THAT, Borrowers may make regularly
scheduled payments of principal, interest and fees, on an
unaccelerated basis, in respect of such Indebtedness in
accordance with the terms of the SouthTrust Bank agreements as in
effect on the date hereof;
(d) Borrowers and Guarantor shall not, directly or
indirectly, amend, modify, alter or change any of the material
terms of such Indebtedness or any of the SouthTrust Bank
agreements as in effect on the date hereof, EXCEPT, THAT,
Borrowers may, after prior written notice to Lender, amend,
modify, alter or change the terms thereof so as to extend the
maturity thereof or defer the timing of any payments in respect
thereof, or to forgive or cancel any portion of such Indebtedness
other than pursuant to payments thereof, or to reduce the
interest rate or any fees in connection therewith, or to make the
provisions thereof less restrictive or burdensome than the terms
or conditions of the SouthTrust Bank agreements as in effect on
the date hereof; and
(e) Borrowers shall furnish to Lender all notices or demands
in connection with such Indebtedness either received by any
Borrower or Guarantor or on its behalf promptly after the receipt
thereof, or sent by any Borrower or Guarantor or on its behalf
concurrently with the sending thereof, as the case may be;
(x) Indebtedness of Borrowers or Guarantor evidenced by or
arising under the Subordinated Notes (as in effect on the date
hereof), PROVIDED, THAT:
27
(a) the aggregate principal amount of such Indebtedness
shall not exceed $200,000.00, less the aggregate amount of all
repayments, repurchases or redemptions thereof, whether optional
or mandatory, plus interest thereon at the applicable rates
provided in the Subordinated Notes in effect on the date hereof,
(b) as of the date hereof, no default or event of default,
or event which with notice or passage of time or both would
constitute an event of default exists or has occurred under any
of the Subordinated Notes;
(c) such Indebtedness is and shall remain unsecured;
(d) such Indebtedness is, in all respects, subject to, and
subordinate in right of payment to, the right of Lender to
receive the prior indefeasible payment and satisfaction in full
of all of the Obligations;
(e) Borrowers shall not, directly or indirectly, make, or be
required to make, any payments in respect of such Indebtedness;
(f) Borrowers shall not, directly or indirectly, (A) amend,
modify, alter or change any of the material terms of such
Indebtedness or any of the Subordinated Notes as in effect on the
date hereof, EXCEPT, THAT, Borrowers may, after prior written
notice to Lender, amend, modify, alter or change the terms
thereof so as to extend the maturity thereof or defer the timing
of any payments in respect thereof, or to forgive or cancel any
portion of such Indebtedness other than pursuant to payments
thereof, or to reduce the interest rate or any fees in connection
therewith, or to make the provisions thereof less restrictive or
burdensome than the terms or conditions of the Subordinated Notes
as in effect on the date hereof, or (B) make optional prepayments
of principal or redeem, retire, defease, purchase or otherwise
acquire such Indebtedness, or set aside or otherwise deposit or
invest any sums for such purpose, and
(g) Borrowers shall furnish to Lender all notices or demands
in connection with such Indebtedness either received by any
Borrower or Guarantor or on its behalf promptly after the receipt
thereof, or sent by any Borrower or Guarantor or on its behalf
concurrently with the sending thereof, as the case may be; and
(xi) the unsecured Indebtedness of Borrowers, Guarantor and their
Subsidiaries set forth on Schedule 5(xi) hereto; PROVIDED, THAT, (i)
the Borrower, Guarantor or Subsidiary obligated on such Indebtedness
may only make regularly
28
scheduled or other mandatory payments of principal and interest in
respect of such Indebtedness in accordance with the terms of the
agreement or instrument evidencing or giving rise to such Indebtedness
as in effect on the date hereof, (ii) Borrowers, Guarantor and
Subsidiaries shall not, directly or indirectly, (A) amend, modify,
alter or change the terms of such Indebtedness or any agreement,
document or instrument related thereto as in effect on the date hereof
EXCEPT, THAT, Borrowers may, after prior written notice to Lender,
amend, modify, alter or change the terms thereof so as to extend the
maturity thereof, or defer the timing of any payments in respect
thereof, or to forgive or cancel any portion of such Indebtedness
(other than pursuant to payments thereof), or to reduce the interest
rate or any fees in connection therewith, or (B) redeem, retire,
defease, purchase or otherwise acquire such Indebtedness, or set aside
or otherwise deposit or invest any sums for such purpose, and (iii)
Borrowers and Guarantor shall furnish to Lender all notices or demands
in connection with such Indebtedness either received by a Borrower or
Guarantor or on its behalf, promptly after the receipt thereof, or
sent by a Borrower or Guarantor or on its behalf, concurrently with
the sending thereof, as the case may be.
(xii) the Indebtedness set forth on Schedule 5(h)(ix) attached
hereto; provided, that, (i) Borrowers may only make regularly
scheduled payments of principal and interest in respect of such
Indebtedness in accordance with the terms of the agreement or
instrument evidencing or giving rise to such Indebtedness as in effect
on the date hereof, (ii) Borrowers shall not, directly or indirectly,
(A) amend, modify, alter or change the terms of such Indebtedness or
any agreement, document or instrument related thereto as in effect on
the date hereof except, that, Borrowers may, after prior written
notice to Lender, amend, modify, alter or change the terms thereof so
as to (1) extend the maturity thereof, or (2) defer the timing of any
payments in respect thereof, or to forgive or cancel any portion of
such Indebtedness (other than pursuant to payments thereof), or (3)
reduce the interest rate or any fees in connection therewith, (4) make
any covenants contained therein less restrictive or burdensome as to
such Borrower, or (B) redeem, retire, defease, purchase or otherwise
acquire such Indebtedness, or set aside or otherwise deposit or invest
any sums for such purpose (except with the proceeds of Refinancing
Indebtedness with respect thereto), and (iii) Borrowers shall furnish
to Lender all material notices or demands in connection with such
Indebtedness either received by Borrower or on its behalf, promptly
after the receipt thereof, or sent by such Borrower or on its behalf,
concurrently with the sending thereof, as the case may be; and
(xiii) Indebtedness of any Borrower, Guarantor or its
Subsidiaries arising pursuant to loans permitted under Section 5(j)
hereof.
(j) LOANS, INVESTMENTS, GUARANTEES, ETC. Each Borrower and Guarantor
shall not directly or indirectly, make any loans or advance money or
property to any Person, or invest in (by capital contribution, dividend or
otherwise) or purchase or repurchase the Capital Stock or Indebtedness or
all or a substantial part of the assets or property of any person, or
guarantee, assume, endorse, or otherwise become responsible for (directly
or
29
indirectly) the Indebtedness, performance, obligations or dividends of any
Person, or form or acquire any Subsidiaries or agree to do any of the
foregoing, EXCEPT:
(i) the endorsement of instruments for collection or deposit in
the ordinary course of business;
(ii) investments in cash or Cash Equivalents, PROVIDED, THAT, (i)
no Loans are then outstanding and (ii) as to any of the foregoing,
unless waived in writing by Lender, each Borrower and Guarantor shall
take such actions as are deemed necessary by Lender to perfect the
security interest of Lenders in such investments;
(iii) guarantees by each Borrower and Guarantor of the
Obligations of any Borrower in favor of Lender;
(iv) loans by a Borrower, Guarantor or any Subsidiary of a
Borrower or Guarantor to a Borrower, Guarantor or Subsidiary of a
Borrower or Guarantor after the last day of the month immediately
prior to the date hereof, provided, that,
(a) as to all of such loans, (A) within forty-five (45) days
after the end of each fiscal month, Borrowers shall provide to
Lender a report in form and substance satisfactory to Lender of
the outstanding amount of such loans as of the last day of the
immediately preceding month and indicating any loans made and
payments received during the immediately preceding month, (B) the
Indebtedness arising pursuant to any such loan shall not be
evidenced by a promissory note or other instrument, unless the
single original of such note or other instrument is promptly
delivered to Lender upon its request to hold as part of the
Collateral, with such endorsement and/or assignment by the payee
of such note or other instrument as Lender may require, (C) as of
the date of any such loan and after giving effect thereto, the
Borrower or Guarantor making such loan shall be Solvent, and (D)
as of the date of any such loan and after giving effect thereto,
no Default or Event of Default shall exist or have occurred and
be continuing,
(b) as to loans by a Guarantor or any Subsidiary of a
Guarantor (other than a Borrower) to a Borrower, (A) the
Indebtedness arising pursuant to such loan shall be subject to,
and subordinate in right of payment to, the right of Lender to
receive the prior final payment and satisfaction in full of all
of the Obligations on terms and conditions acceptable to Lender,
(B) promptly upon Lender's request, Lender shall have received a
subordination agreement, in form and substance satisfactory to
Lender, providing for the terms of the subordination in right of
payment of such Indebtedness of such Borrower to the prior final
30
payment and satisfaction in full of all of the Obligations, duly
authorized, executed and delivered by such Guarantor or
Subsidiary (as the case may be) and such Borrower, and (C) such
Borrower shall not, directly or indirectly make, or be required
to make, any payments in respect of such Indebtedness;
(c) INTENTIONALLY OMITTED;
(d) as to such loans by a Guarantor or any Subsidiary of a
Guarantor (other than a Borrower) to a Subsidiary of Guarantor
(other than Borrowers and Guarantor) in no event shall the
aggregate amount of all such loans exceed $12,000,000.00;
(e) as to such loans by a Subsidiary of a Guarantor (other
than a Borrower) to a Guarantor, (A) the Indebtedness arising
pursuant to such loan shall be subject to, and subordinate in
right of payment to, the right of Lender to receive the prior
final payment and satisfaction in full of all of the Obligations
on terms and conditions acceptable to Lender, and (B) promptly
upon Lender's request, Lender shall have received a subordination
agreement, in form and substance satisfactory to Lender,
providing for the terms of the subordination in right of payment
of such Indebtedness of such Guarantor to the prior final payment
and satisfaction in full of all of the Obligations, duly
authorized, executed and delivered by such Subsidiary and such
Guarantor;
(f) subject to Section 5(j)(iv) above and Section 5(l)
below, any Borrower or Guarantor (or any of their respective
Subsidiaries) may acquire and hold receivables owing to them in
the ordinary course of business and payable or dischargeable in
accordance with customary trade terms;
(v) the existing equity investments of Borrowers, Guarantor and
their Subsidiaries as of the date hereof in their respective
Subsidiaries, provided, that, Borrowers and Guarantor shall have no
further obligations or liabilities to make any capital contributions
or other additional investments or other payments to or in or for the
benefit of any of such Subsidiaries;
(vi) stock or obligations issued to any Borrower or Subsidiary by
any Person (or the representative of such Person) in respect of
Indebtedness of such Person owing to any Borrower or Subsidiary in
connection with the insolvency, bankruptcy, receivership or
reorganization of such Person or a composition or readjustment of the
debts of such Person; provided, that, prior to an Event of Default, if
the amount or value thereof is greater than $100,000.00, and after an
Event of Default, regardless of the amount or value thereof, the
original of any such stock or instrument evidencing such obligations
to a Borrower, Guarantor or any Subsidiary shall be promptly delivered
to Lender, upon Lender's request,
31
together with such stock power, assignment or endorsement by such
Borrower or as Lender may request;
(vii) obligations of account debtors to any Borrower or
Subsidiary arising from Accounts which are past due evidenced by a
promissory note made by such account debtor payable to such Borrower
or Subsidiary, as the case may be; provided, that, prior to an Event
of Default, if the amount of such note is greater than $250,000.00,
and after an Event of Default, regardless of the amount thereof,
promptly upon the receipt of the original of any such promissory note
by a Borrower to a Borrower, Guarantor or any Subsidiary such
promissory note shall be endorsed to the order of Lender by such
Borrower to a Borrower, Guarantor or any Subsidiary and promptly
delivered to Lender as so endorsed;
(viii) loans or advances by any Borrower, Guarantor or any of
their respective Subsidiaries to any of its employees, after the date
hereof, not to exceed the principal amount of $25,000.00 in the
aggregate at any time outstanding in the ordinary course of such
Borrower's, Guarantor's or Subsidiary's business for reasonable and
necessary work-related travel and other ordinary business expenses to
be incurred by such employees in connection with their employment with
such Borrower, Guarantor or Subsidiary, as the case may be;
(ix) unsecured guarantees by any Borrower or Guarantor of the
Indebtedness of any Borrower, Guarantor or any of their respective
Subsidiaries permitted under Section 5(i)(ii) hereof;
(x) any investments of any Borrower, Guarantor or any of their
respective Subsidiaries in swap agreements, cap agreements, collar
agreements, exchange agreements futures or forward hedging contracts
or similar contractual arrangements intended to protect a Person
against fluctuations in interest rates, currency exchange rates or the
price of raw materials and other chemical products used or produced in
the business of any Borrower; provided, that, such arrangements are
with banks or other financial institutions that have combined capital
and surplus and undivided profits of not less than the $250,000,000
and are not for speculative purposes and are unsecured;
(xi) the guarantee by Guarantor in favor of SASOL North America
Inc. with respect to the obligations of JLM Marketing, Inc. to SASOL
North America Inc. pursuant to the terms of the Asset Purchase
Agreement, dated May 23, 2001, by and among Guarantor, Marketing and
SASOL North America Inc. (as in effect on the date hereof);
(xii) the existing loans, advances and guarantees set forth on
Schedule 5(j)(xii) hereto, provided, that, as to such loans, advances
and guarantees, (i) Borrowers or Guarantor, as the case may be, shall
not, directly or indirectly, amend, modify, alter or change in any
material respect the terms of such loans, advances or guarantees or
any agreement, document or instrument related thereto,
32
or as to such guarantees, redeem, retire, defease, purchase or
otherwise acquire such guarantee or set aside or otherwise deposit or
invest any sums for such purpose (except as expressly required
pursuant to the terms thereof or pursuant to regularly scheduled
payments permitted herein) and (ii) Borrowers shall furnish to Lender
all notices or demands in connection with such loans, advances or
guarantees received by a Borrower, Guarantor or Subsidiary or on its
behalf, promptly after the receipt thereof.
(k) DIVIDENDS AND REDEMPTIONS. Each Borrower and Guarantor shall not
directly or indirectly, declare or pay any dividends on account of any
shares of class of Capital Stock of such Borrower or Guarantor now or
hereafter outstanding, or set aside or otherwise deposit or invest any sums
for such purpose, or redeem, retire, defease, purchase or otherwise acquire
any shares of any class of Capital Stock (or set aside or otherwise deposit
or invest any sums for such purpose) for any consideration or apply or set
apart any sum, or make any other distribution (by reduction of capital or
otherwise) in respect of any such shares or agree to do any of the
foregoing, except, that any Borrower or Guarantor may pay dividends or may
redeem or repurchase any of its Capital Stock for consideration consisting
of common stock.
(l) TRANSACTIONS AND AFFILIATES. Each Borrower and Guarantor shall not
directly or indirectly:
(i) purchase, acquire or lease any property from, or sell,
transfer or lease any property to, any officer, employee, shareholder,
director, agent or any other Affiliate, except (i) in the ordinary
course of and pursuant to the reasonable requirements of such
Borrower's, Guarantor's or Subsidiary's business (as the case may be)
and upon fair and reasonable terms no less favorable to such Borrower,
Guarantor or Subsidiary than it would obtain in a comparable arm's
length transaction with a person that is not an Affiliate , (ii) the
loans and advances permitted by Sections 5(j)(iv) hereof and (iii)
accounts receivable of Borrowers in respect of which any Subsidiary of
Borrowers or any Guarantor is the account debtor (the "Intercompany
Accounts Receivable"), provided, that, (A) as of the date of the
creation of any such Intercompany Account Receivable and after giving
effect thereto, no Event of Default or act, condition or event which
with notice or passage of time or both would constitute an Event of
Default shall exist or have occurred, and Intercompany Accounts
Receivable outstanding at anytime shall not, at any time exceed
$1,500,000.00; or
(ii) make any payments of management, consulting or other fees
for management or similar services, or of any Indebtedness owing to
any officer, employee, shareholder, director or any other Affiliate of
any Borrower or Guarantor except (i) reasonable compensation to
officers, employees and directors for services rendered to such
Borrower, Guarantor or Subsidiary, as the case may be, in the ordinary
course of business, and (ii) payments by a Borrower to any other
Borrower in respect of Indebtedness arising pursuant to loans made by
such Borrower to the extent such Indebtedness is permitted under
Section 5(i) hereof.
33
(m) COMPLIANCE WITH ERISA. Each Borrower shall cause each of its ERISA
Affiliates to: (a) maintain each Plan in compliance in all material
respects with the applicable provisions of ERISA, the Code and other
Federal and State law; (b) cause each Plan which is qualified under Section
401(a) of the Code to maintain such qualification; (c) not terminate any of
such Plans so as to incur any liability to the Pension Benefit Guaranty
Corporation; (d) not allow or suffer to exist any prohibited transaction
involving any of such Plans or any trust created thereunder which would
subject Borrower or such ERISA Affiliate to a tax or penalty or other
liability on prohibited transactions imposed under Section 4975 of the Code
or ERISA; (e) make all required contributions to any Plan which it is
obligated to pay under Section 302 of ERISA, Section 412 of the Code or the
terms of such Plan; (f) not allow or suffer to exist any accumulated
funding deficiency, whether or not waived, with respect to any such Plan;
or (g) allow or suffer to exist any occurrence of a reportable event or any
other event or condition which presents a material risk of termination by
the Pension Benefit Guaranty Corporation of any such Plan that is a single
employer plan, which termination could result in any liability to the
Pension Benefit Guaranty Corporation.
(n) ADJUSTED TANGIBLE NET WORTH. Borrowers and JLM Marketing, Inc. on
a consolidated basis, shall at all times maintain Adjusted Tangible Net
Worth of not less than $16,000,000.00.
(o) END OF FISCAL YEARS: FISCAL QUARTERS. Guarantor shall, for
financial reporting purposes, cause its, (a) fiscal years to end on
December 31 of each year and (b) fiscal quarters to end on March 31, June
30, September 30 and December 31 of each year.
(p) CHANGE IN BUSINESS. Guarantor and its Subsidiaries shall not
engage in any business other than the businesses of Guarantor and its
Subsidiaries on the date hereof and any business reasonably related,
ancillary or complimentary to the business in which Guarantor and its
Subsidiaries are engaged on the date hereof.
(q) LIMITATION OF RESTRICTIONS AFFECTING SUBSIDIARIES. Each Borrower
and Guarantor shall not, directly, or indirectly, create or otherwise cause
or suffer to exist any encumbrance or restriction which prohibits or limits
the ability of any Subsidiary of such Borrower or Guarantor to (a) pay
dividends or make other distributions or pay any Indebtedness owed to such
Borrower, Guarantor or any Subsidiary of such Borrower or Guarantor; (b)
make loans or advances to such Borrower, Guarantor or any Subsidiary of
such Borrower or Guarantor, (c) transfer any of its properties or assets to
such Borrower, Guarantor or any Subsidiary of such Borrower or Guarantor;
or (d) create, incur, assume or suffer to exist any lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired,
other than encumbrances and restrictions arising under (i) applicable law,
(ii) this Agreement, (iii) customary provisions restricting subletting or
assignment of any lease governing a leasehold interest of such Borrower,
Guarantor or any of its Subsidiaries, (iv) customary restrictions on
dispositions of real property interests found in reciprocal easement
agreements of such Borrower, Guarantor or its Subsidiary, (v) any agreement
relating to permitted Indebtedness incurred by a Subsidiary of such
Borrower or Guarantor prior to the date on which such Subsidiary was
acquired by such Borrower or Guarantor and outstanding on such acquisition
date, and (vi) the
34
extension or continuation of contractual obligations in existence on the
date hereof; provided, that, any such encumbrances or restrictions
contained in such extension or continuation are no less favorable to Lender
than those encumbrances and restrictions under or pursuant to the
contractual obligations so extended or continued.
(r) FURTHER ASSURANCES. At the request of Lender at any time and from
time to time, each Borrower and Guarantor shall, at its expense, duly
execute and deliver, or cause to be duly executed and delivered, such
further agreements, documents and instruments, and do or cause to be done
such further acts as may be necessary or proper to evidence, perfect,
maintain and enforce the security interests and the priority thereof in the
Collateral and to otherwise effectuate the provisions or purposes of this
Agreement or any of the other Financing Agreements. Where permitted by law,
each Borrower and Guarantor hereby authorizes Lender to execute and file
one or more UCC financing statements signed only by Lender.
(s) CONSTRUCTION LIENS. Borrower will allow no work or construction to
be commenced on the Land, or goods specially fabricated for incorporation
therein, which has not been fully paid for prior to the recording of the
Mortgage which could constitute a lien on the Premises, and (ii) will
comply with all provisions of the any applicable construction lien law,
including but not limited to, payment and notice provisions contained
therein. Borrower shall save and hold Lender harmless from the claims of
any construction lien or equitable lien and pay promptly upon demand any
loss or losses which Lender may incur as a result of the filing of any such
lien, including the reasonable cost of defending same and the Lender's
reasonable attorneys' fees in connection therewith.
(t) DEBT SERVICE COVERAGE RATIO REQUIREMENTS. Based on the
consolidated financial statements, the Group must exhibit and maintain at
all times a minimum Debt Service Coverage Ratio of no less than 1.20:1 for
the first year, which will be calculated on a rolling month basis.
Commencing June 27, 2002, and at all times while the indebtedness is
outstanding thereafter, the Group must exhibit and maintain at all times a
minimum Debt Service Coverage Ratio of not less than 1.75:1. The term "Debt
Service Coverage Ratio" shall mean the ratio of "Net Operating Income" to
"Annual Debt Service". The term "Net Operating Income" shall mean all of
the Group's income from the operation and management of their businesses
after deducting all operating expenses and unfinanced capital expenditures
but prior to the deduction of income taxes, depreciation and financing
expenses. The term capital expenditures shall be determined in accordance
with generally accepted accounting principles. The term "Annual Debt
Service" shall mean all principal, interest and other payments due by the
Group on all indebtedness incurred by the Group.
(u) CONDITION OF PREMISES. Borrower shall keep and maintain the
Premises in good order, condition and repair and shall make, as and when
the same shall become necessary, all structural and non-structural,
exterior and interior, ordinary and extraordinary, foreseen and unforeseen,
repairs and maintenance necessary or appropriate. Borrower shall suffer or
commit no waste upon the Premises or any portion thereof. Borrower shall,
at its expense, promptly repair, restore, replace or rebuild any
35
part of the Premises which may be damaged or destroyed by any casualty or
as the result of any taking under the power of eminent domain to the extent
permitted given the size, scope and extent of taking. Borrower shall cause
all repairs, maintenance, rebuilding, replacement or restoration to be (in
the opinion of Lender) of substantially equivalent quality. Borrower shall
not cause, suffer or permit the construction of any material buildings,
structures, or improvements on the Premises without the prior written
consent of Lender to the proposed construction as well as the plans and
specifications relating thereto. None of the buildings, structures, or
improvements erected or located on the Premises shall be removed,
demolished or substantially or structurally altered in any material respect
without the prior written consent of Lender.
(v) ENVIRONMENTAL COMPLIANCE REPORTS. Commencing on November 1, 2001,
and continuing on the 1st day of every fourth month thereafter, Borrower
shall deliver to Lender, for its review and approval, Environmental
Compliance Reports, which must be in form and content acceptable to Lender.
6. DEFAULT. Upon the occurrence of any of the following events (the Events
of Default) Lender may at s option exercise any of its remedies set forth
herein:
(a) AGREEMENT FOR WARRANT. The occurrence of a default, not cured
within any applicable cure period under the Agreement for Warrant;
(b) BANKRUPTCY. If there is filed by or against Borrower a petition in
bankruptcy or a petition for the appointment of a receiver or trustee of
the property of Borrower, and any such petition not filed by Borrower is
not dismissed within sixty (60) days of the date of filing, or if Borrower
files a petition for reorganization under any of the provisions of the
Bankruptcy Code or of any similar law, state, federal, or foreign, or if
Borrower makes a general assignment for the benefit of creditors or makes
any insolvency assignment or is adjusted insolvent by any court of
competent jurisdiction;
(c) BREACH OF COVENANTS, WARRANTIES AND REPRESENTATIONS. If any
warranty or representation made by Borrower in this Agreement or pursuant
to the terms hereof shall at any time be false or misleading in any
material respect, or if Borrower shall fail to keep, observe or perform any
of the terms, covenants, representations or warranties contained in this
Agreement, the Note, the Mortgage, the Commitment or any other document
given in connection with the Loan or development of the Premises, including
without limitation, any default under any loan between Lender and Borrower,
(provided, that with respect to non-monetary defaults, Lender shall give
written notice to Borrower, who shall have ten (10) days to cure after
notice thereof, or if such default cannot be cured within such ten (10) day
period, Borrower shall have thirty (30) days to cure same provided Borrower
diligently and continuously pursues the cure of such default), or is unable
or unwilling to meet its obligations thereunder;
(d) INTERCREDITOR AGREEMENT. The occurrence of a default, not cured
within any applicable period under the Intercreditor Agreement by any party
other than Lender;
36
(e) MATERIAL ADVERSE CHANGE OF BORROWER OR GUARANTOR. If any material
adverse change shall occur in the financial condition of Borrower or
Guarantor at any time during the term of the Loan from the financial
condition revealed in statements already presented to and accepted by
Lender, however, Lender shall not exercise any such rights unreasonably;
(f) CROSS-DEFAULT. The occurrence of a default not cured within any
applicable cure period under any other loan extended to Borrower or an
affiliate to Borrower by Lender;
(g) CONGRESS FINANCIAL CORPORATION LOAN. The occurrence of a default
not cured within any applicable period under that certain Loan and Security
Agreement executed by Borrower in favor of Congress Financial Corporation
or any other loan documents evidencing or securing the Loan and Security
Agreement; or
(h) CONTRACT. The occurrence of a default, not cured within any
applicable cure period under the License Agreement, the Collateral
Assignment of License Agreement, the Collateral Assignment of JLM Marketing
Acetone Contract, or the JLM Marketing Acetone Contract.
7. REMEDIES OF LENDER. Upon the happening of an Event of Default beyond any
applicable grace period, then Lender may, at its option:
(a) Cancel this Agreement;
(b) Commence an appropriate legal or equitable action to enforce
performance of this Agreement;
(c) Accelerate the payment of the Note and the Loan and any other sums
secured by the Mortgage, and commence appropriate legal and equitable
action to foreclose the Mortgage and collect all such amounts due Lender;
(d) Exercise all rights under the Agreements, and thereafter lease or
let the Premises; and take such action as may be reasonable to preserve and
protect the Premises; or
(e) Exercise any other rights or remedies Lender may have under the
Mortgage or other Loan Documents referred to in this Agreement or executed
in connection with the Loan or which may be available under applicable law.
8. INDEMNITY. Borrower shall protect, indemnify and defend and save
harmless Lender and its directors, officers, agents and employees from and
against any and all loss, cost, liability (including negligence, tort and strict
liability), expense, damage, suits or demands (including fees and disbursements
of counsel) on account of any suit or proceeding before any Governmental
Authority which arises from the transactions contemplated in this Agreement, any
other Loan Document or otherwise arising in connection with or relating to the
Loan and any security therefor, unless such suit, claim or damages are caused by
the gross negligence or intentional malfeasance of Lender or its directors,
officers, agents or employees. Upon receiving
37
knowledge of any suit, claim or demand asserted by a third-party that Lender
believes is covered by this indemnity, Lender shall give Borrower timely notice
of the matter and an opportunity to defend it, at Borrower's sole cost and
expense with legal counsel acceptable to Lender. Lender may, at its option, also
require Borrower to so defend the matter. The obligations of Borrower hereunder
shall survive the termination of this Agreement and repayment of the
obligations.
9. GENERAL TERMS. The following shall be applicable throughout the period
of this Agreement or thereafter as provided herein:
(a) BORROWER IS NOT LENDER'S AGENT. Nothing in this Agreement, the
Note, the Mortgage or any other Loan document shall be construed to make
the Borrower the Lender's agent for any purpose whatsoever, or the Borrower
and Lender partners, or joint or co-venturers, and the relationship of the
parties shall, at all times, be that of debtor and creditor.
(b) LENDER NOT LIABLE FOR DAMAGE OR LOSS. All inspections and other
services rendered by or on behalf of Lender shall be rendered solely for
the protection and benefit of the Lender. Neither Borrower nor other third
persons shall be entitled to claim any loss or damage against the Lender or
against its agents or employees for failure to properly discharge their
duties.
(c) INDEMNIFICATION FROM THIRD PARTY CLAIMS. Borrower shall indemnify
Lender from any liability, claims or losses resulting from the disbursement
of the Loan proceeds or from the condition of the Premises whether related
to the quality of construction or otherwise, and whether arising during or
after the term of the Loan, except for any liability, claim or loss
resulting solely from Lender's action occurring after a foreclosure by
Lender or acceptance of a deed-in-lieu of foreclosure. This provision shall
survive the repayment of the Loan and shall continue in full force and
effect so long as the possibility of such liability, claims, or losses
exists.
(d) EVIDENCE OF SATISFACTION OF CONDITIONS. Lender shall, at all
times, be free independently to establish to its good faith and
satisfaction, and in its absolute discretion, the existence or nonexistence
of a fact or facts which are disclosed in documents or other evidence
required by the terms of this Agreement.
(e) HEADINGS. The headings of the sections, paragraphs and
subdivisions of this Agreement are for the convenience of reference only,
and shall not limit or otherwise affect any of the terms hereof.
(f) INVALID PROVISIONS TO AFFECT NO OTHERS. If performance of any
provision hereof or any transaction related hereto is limited by law, then
the obligation to be performed shall be reduced accordingly; and if any
clause or provision herein contained operates or would prospectively
operate to invalidate this Agreement in part, then the invalid part of said
clause or provision only shall be held for naught, as though not contained
herein, and the remainder of this Agreement shall remain operative and in
full force and effect.
38
(g) APPLICATION OF INTEREST TO REDUCE PRINCIPAL SUMS DUE. In the event
that any charge, interest or late charge is above the maximum rate provided
by law, then any excess amount over the lawful rate shall be applied by
Lender to reduce the principal sum of the Loan or any other amounts due
Lender hereunder.
(h) GOVERNING LAW. The laws of the State of Florida shall govern the
interpretation and enforcement of this Agreement.
(i) NUMBER AND GENDER. Whenever the singular or plural number,
masculine or feminine or neuter gender is used herein, it shall equally
include the others and shall apply jointly and severally.
(j) PRIOR AGREEMENT. To the extent necessary, this Agreement shall be
deemed to be an amendment to the Commitment or any prior loan agreement
between Borrower and Lender, and in the event of a conflict between the
terms of this Agreement and of the Commitment or any such prior agreement,
the terms of this Agreement shall govern.
(k) WAIVER. If Lender shall waive any provisions of the Loan
Documents, or shall fail to enforce any of the conditions or provisions of
this Agreement, such waiver shall not be deemed to be a continuing waiver
and shall never be construed as such; and Lender shall thereafter have the
right to insist upon the enforcement of such conditions or provisions.
Furthermore, no provision of this Agreement shall be amended, waived,
modified, discharged or terminated, except by instrument in writing signed
by the parties hereto.
(l) NOTICES. All notices from the Borrower to Lender and Lender to
Borrower required or permitted by any provision of this Agreement shall be
in writing and sent by registered or certified mail and addressed as
follows:
39
TO BORROWER: JLM Chemicals, Inc.
JLM Terminals, Inc.
JLM Realty, Inc.
c/o JLM Industries
0000 Xxxxxx Xxxxx Xxxxxxx
Xxxxx, Xxxxxxx 00000
LENDER: GATX Capital Corp.
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attn: Vice President, Commercial Real Estate
Such addresses may be changed by such notice to the other party.
(m) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding on the parties hereto and their heirs, legal
representatives, successors and assigns; but nothing herein shall authorize
the assignment hereof by the Borrower.
(n) WAIVER OF JURY TRIAL. LENDER AND BORROWER HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR
IN CONNECTION WITH THIS AGREEMENT AND ANY AGREEMENT CONTEMPLATED TO BE
EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER PARTY.
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER ENTERING INTO THIS
AGREEMENT.
------------------------
Borrower's Initials
40
IN WITNESS WHEREOF, Borrower and Lender have caused this Agreement to
be executed on this 28th day of June, 2001.
"BORROWER":
--------
JLM CHEMICALS, INC., a Delaware
corporation
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------
Print Name: Xxxxxxx X. Xxxxx
Its: Vice President
Address: 0000 Xxxxxx Xxxxx Xxxxxxx
Xxxxx, Xxxxxxx 00000
JLM REALTY, INC., a North Carolina
corporation
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------
Print Name: Xxxxxxx X.Xxxxx
Its: Vice President
Address: 0000 Xxxxxx Xxxxx Xxxxxxx
Xxxxx, Xxxxxxx 00000
JLM TERMINALS, INC., a North Carolina
corporation
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Print Name: Xxxxxxx X. Xxxxx
Its: Vice President
Address: 0000 Xxxxxx Xxxxx Xxxxxxx
Xxxxx, Xxxxxxx 00000
41
"GUARANTOR":
---------
JLM INDUSTRIES, INC., a Delaware
corporation
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Print Name: Xxxxxxx X. Xxxxx
Its: Vice President
Address: 0000 Xxxxxx Xxxxx Xxxxxxx
Xxxxx, Xxxxxxx 00000
"LENDER":
------
GATX CAPITAL CORPORATION, a Delaware
corporation
By:_________________/s/_________________
Print Name:
-----------------------------
Its:
------------------------------------
STATE OF FLORIDA
COUNTY OF _________________
The foregoing document was acknowledged before me this ______ day of June,
2001 by _______________________, as ____________________ of JLM CHEMICALS, INC.,
a Delaware corporation, on behalf of the corporation. He/she is personally known
to me or has produced ____________________________ as identification.
-----------------------------------------
NOTARY PUBLIC
Name:
------------------------------------
Serial #:
--------------------------------
My Commission Expires:
-------------------
42
STATE OF FLORIDA
COUNTY OF _________________
The foregoing document was acknowledged before me this ______ day of June,
2001 by _______________________, as ____________________ of JLM TERMINALS, INC.,
a North Carolina corporation, on behalf of the corporation. He/she is personally
known to me or has produced ____________________________ as identification.
-----------------------------------------
NOTARY PUBLIC
Name:
------------------------------------
Serial #:
--------------------------------
My Commission Expires:
-------------------
STATE OF FLORIDA
COUNTY OF _________________
The foregoing document was acknowledged before me this ______ day of June,
2001 by _______________________, as ____________________ of JLM REALTY, INC., a
North Carolina corporation, on behalf of the corporation. He/she is personally
known to me or has produced ____________________________ as identification.
-----------------------------------------
NOTARY PUBLIC
Name:
------------------------------------
Serial #:
--------------------------------
My Commission Expires:
-------------------
STATE OF FLORIDA
COUNTY OF _______________
The foregoing instrument was acknowledged before me this ____ day of June,
2001, by __________________, as _________________ of JLM INDUSTRIES, INC., a
Delaware corporation, on behalf of the corporation. He/She is personally known
to me or who has produced _____________________ as identification.
-----------------------------------------
NOTARY PUBLIC
Name:
------------------------------------
Serial #:
--------------------------------
My Commission Expires:
-------------------
STATE OF ___________
COUNTY OF _______________
43
The foregoing Loan Agreement was acknowledged before me this ____ day of
June, 2001, by __________________________, as ________________ of GATX Capital
Corporation, a Delaware corporation on behalf of the corporation. He is
personally known to me or has produced ______________________________________ as
identification.
-----------------------------------------
NOTARY PUBLIC
Name:
------------------------------------
Serial #:
--------------------------------
My Commission Expires:
-------------------
44
EXHIBIT A
LEGAL DESCRIPTION
