EXHIBIT 10(p)
LOAN AGREEMENT
THIS LOAN AGREEMENT is entered into this 24th day of September, 2001 by
and between CHEMFIRST INC., a Mississippi corporation (the "Borrower"), and
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AMSOUTH BANK, an Alabama banking corporation ("Lender").
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RECITALS:
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
ARTICLE 1. LOAN FACILITY
1.1 Loan Facility. Subject to the terms and conditions contained in this
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Agreement and the other Loan Documents, and in reliance upon the
representations, warranties and covenants in this Agreement and the other Loan
Documents, Lender agrees to make Advances to Borrower on a revolving credit
basis from time to time until the Maturity Date, as evidenced by the Note, on
the condition that the aggregate principal amount outstanding of all Advances
under the Revolving Credit Note (and the face amount of all outstanding Letters
of Credit) shall not at any time exceed the Maximum Revolver Amount. Interest
shall accrue on the Revolving Credit Loan at the Applicable Rate, and the terms
of payment shall be as set forth herein and in the Note.
1.2 Borrowing Procedures for Revolving Credit Loan. Lender shall make
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Advances under the Revolving Credit Note as follows:
(a) With respect to an Advance bearing interest with reference to
the LIBOR Rate (a "LIBOR Advance"), Borrower shall give Lender at least
two (2) Business Days' prior written notice of a proposed borrowing. Any
one of the Executive Officers of Borrower are authorized (pursuant to
Borrower's board resolutions) to request an Advance on behalf of Borrower.
Lender shall make the Advance by depositing the funds being advanced into
the account designated by Borrower. In connection with each request for a
LIBOR Advance, Borrower's request shall designate the Interest Period and
the amount for such Advance. Whenever Borrower desires to renew all or a
portion of an outstanding LIBOR Advance after an expiration of an Interest
Period it shall give the Lender at least two (2) Business Days' prior
written notice of each such Advance to be renewed. Notices shall be in
form and substance satisfactory to Lender shall be given prior to 11:00
a.m. (Central time). Each notice shall be irrevocable. Any notice of
renewal shall specify the aggregate principal amount of the Advance(s) to
be renewed, the date of such renewal and the new Interest Period. If
Borrower shall have failed to deliver the notice of renewal, Borrower
shall be deemed to have elected to convert such Advance to an Advance
accruing interest at the Lender's Prime Rate.
(b) With respect to an Advance bearing interest with reference to
the Prime Rate, Borrower shall give Lender prior notice (written or oral
followed by prompt written confirmation) of a proposed borrowing by 11:00
a.m. Central time on the date of such Advance. Lender shall make the
Advance by depositing the funds being advanced into the account designated
by Borrower. Each notice shall be irrevocable and shall specify the
aggregate principal amount of the Advance(s).
(c) With respect to a Bid-Rate Advance, Borrower shall give the
Lender prior notice (written or oral followed by prompt written
confirmation) of a proposed borrowing by 11:00 a.m. Central time on the
date of such Advance. Lender shall make the Advance by depositing the
funds being advanced into the account designated by Borrower. In
connection with each request for a Bid-Rate Advance, Borrower's request
shall designate the Interest Period and the amount of such Advance. Lender
shall have the sole and absolute option to agree to the terms of a
Bid-Rate Advance or any renewal of an outstanding Bid-Rate Advance. Each
notice shall be irrevocable. Any notice of renewal shall specify the
aggregate principal amount of the Bid-Rate Advance(s) to be renewed, the
date of such renewal and any new Interest Period. If Borrower shall have
failed to deliver the notice of renewal, Borrower shall be deemed to have
elected to convert such Bid-Rate Advance to an Advance accruing interest
at the Lender's Prime Rate.
1.3 Prepayments.
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(a) Borrower shall have the right to borrow, repay and reborrow
under the Note on a revolving credit basis, however, in the event an
Advance (other than an Advance accruing interest at a Prime Rate) is paid
prior to the expiration of its applicable Interest Period, the Borrower
shall pay Lender a reasonable and customary breakage fee as reasonably
determined by Lender to compensate Lender for such prepayment. The
determination of such fee (absent manifest error) shall be binding upon
Borrower.
(b) If at any time the aggregate principal amount of all outstanding
Advances exceeds the Maximum Revolver Amount, Borrower shall promptly
prepay the Advances (including, without limitation any breakage fee
referred to in clause (a) above) in an amount sufficient to eliminate such
excess.
1.4 Use of Proceeds. Proceeds of the Note will be used to refinance the
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existing indebtedness from Borrower to Lender, for working capital and general
corporate purposes of the Borrower or a Subsidiary. Letters of Credit issued
hereunder will be used for general corporate purposes.
1.5 [RESERVED].
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1.6 Inability to Determine Interest Rates. If prior to the commencement of
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any Interest Period for any Advance in any currency, Lender shall have
determined reasonably that (i) by reason of circumstances affecting the relevant
interbank market, adequate means do not exist for ascertaining LIBOR for such
Interest Period, or (ii) the Adjusted LIBOR Rate does not adequately and fairly
reflect the cost to Lender of making, funding or maintaining its Advance(s) for
such Interest Period, Lender shall given written notice (or telephonic notice,
promptly
confirmed in writing) to the Borrower as soon as practicable thereafter. Until
Lender notifies Borrower that the circumstances giving rise to such notice no
longer exist, (i) the obligation of Lender to make an Advance and (ii) all such
affected Advances shall be converted into Advances accruing interest at the
Prime Rate on the last day of the then current Interest Period applicable
thereto unless the Borrower prepays such Advances in accordance with this
Agreement.
1.7 Illegality. If any Change in Law shall make it unlawful or impossible
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for Lender to make, maintain or fund any Advance, Lender shall promptly give
notice thereof to Borrower, whereupon until Lender notifies Borrower that the
circumstances giving rise to such suspension no longer exist, the obligation of
Lender to make Advances, or to continue outstanding Advances, shall be
suspended. In the case of the making of Advances, Advances may be made or
converted to Advances bearing interest at the Prime Rate.
1.8 Increased Costs.
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(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement that is not otherwise included in the
determination of the LIBOR Rate hereunder against assets of,
deposits with or for the account of, or credit extended by, Lender
(except any such reserve requirement reflected in the Adjusted LIBOR
Rate); or
(ii) impose on Lender or the eurodollar interbank market any
other condition affecting this Agreement or any Advances made by
Lender;
and the result of the foregoing is to increase the cost to Lender of making,
continuing or maintaining an Advance or to reduce the amount received or
receivable by Lender hereunder (whether of principal, interest or any other
amount), then the Borrower shall promptly pay, upon written notice from and
demand by Lender, within five (5) Business Days after the date if such notice
and demand, additional amount or amounts sufficient to compensate Lender for
such additional costs incurred or reduction suffered.
(b) If Lender shall have reasonably determined that on or after the
date of this Agreement any Change in Law regarding capital requirements
has or would have the effect of reducing the rate of return on Lender's
capital (or on the capital of Lender's parent corporation) as a
consequence of its obligation hereunder to a level below that which Lender
or Lender's parent corporation could have achieved but for such Change in
Law (taking into consideration the Lender's policies or the policies of
Lender's parent corporation with respect to capital adequacy) then, from
time to time, within five (5) Business Day after receipt by Borrower of
written demand by Lender, Borrower shall pay to Lender such additional
amounts as will compensate Lender or Lender's parent corporation for any
such reduction suffered.
(c) A certificate of Lender setting forth the amount or amounts
necessary to compensate Lender or its parent corporation, as the case may
be, specified in paragraph (a) or (b) of this Section shall be delivered
to Borrower. Borrower shall pay Lender such amount or amounts within 10
days after receipt thereof.
1.9 Facility Fee. The Borrower agrees to pay to the Lender a facility fee,
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which shall accrue at fifteen basis points (.15%) on the Maximum Revolver
Amount, provided that if Letters of Credit are outstanding after the Maturity
Date, the facility fee shall accrue on the daily amount of the outstanding
Letters of Credit. Accrued facility fees shall be payable in arrears on the last
day of each March, June, September and December of each year and on the Maturity
Date, commencing on December 31, 2001; provided further, that any facility fees
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accruing after the Maturity Date shall be payable in arrears on the last
Business Day of each March, June, September and December.
ARTICLE 2. LETTERS OF CREDIT
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2.1 Letters of Credit Commitment.
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(a) During the term of this Agreement, the Lender agrees to issue,
at the request of the Borrower, Letters of Credit for the account of the
Borrower on the terms and conditions hereinafter set forth; provided,
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that (i) each Letter of Credit shall expire on or before the Maturity
Date (unless Lender shall agree in writing to an expiration date or an
extension date beyond the Maturity Date); (ii) each Letter of Credit
shall be in a stated amount of at least $10,000; and (iii) the Borrower
may not request any Letter of Credit, if, after giving effect to such
issuance, the face amount of all Letters of Credit issued under this
Agreement, plus the outstanding Advances as revolving credit loans
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would exceed the Maximum Revolver Amount.
(b) To request the issuance of a Letter of Credit (or any amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower
shall give the Lender irrevocable written notice at least three (3)
Business Days prior to the requested date of such issuance specifying the
date (which shall be a Business Day) such Letter of Credit is to be issued
(or amended, extended or renewed, as the case may be), the expiration date
of such Letter of Credit, the amount of such Letter of Credit, the name
and address of the beneficiary thereof, and such other information as
shall be necessary to prepare, amend, renew or extend such Letter of
Credit. In addition to the satisfaction of the conditions in Section 4.2
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hereof, the issuance of such Letter of Credit (or any amendment which
increases the amount of such Letter of Credit) will be subject to the
further conditions that such Letter of Credit shall be in such form and
contain such terms as the Lender shall reasonably approve and that the
Borrower shall have executed and delivered any additional applications,
agreements and instruments relating to such Letter of Credit as the Lender
shall reasonably require; provided, that in the event of any conflict
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between such applications, agreements or instruments and this Agreement,
the terms of this Agreement shall control.
(c) The Lender shall examine all documents purporting to represent a
demand for payment under a Letter of Credit promptly following its receipt
thereof. The Lender shall notify the Borrower of such demand for payment;
provided, that any failure to give or delay in giving such notice shall
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not relieve the Borrower of its obligation to reimburse the Lender with
respect to such disbursement. The disbursement by Lender for the account
of a beneficiary of a Letter of Credit shall be deemed an Advance under
the Revolving Credit loan facility and the Revolving Credit Note under
Section 1.1 hereof.
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(d) If any Event of Default shall occur and be continuing, on the
Business Day that the Borrower receives notice from the Lender demanding
the deposit of cash collateral pursuant to this paragraph, the Borrower
shall deposit in an account with the Lender, in the name of the Lender and
for the benefit of the Lender, an amount in cash equal to the face amount
of all Letters of Credit. Such deposit shall be held by the Lender as
collateral for the payment and performance of the obligations of the
Borrower under this Agreement. The Lender shall have exclusive dominion
and control, including the exclusive right of withdrawal, over such
account. Other than any interest earned on the investment of such
deposits, which investments shall be made at the option and sole
discretion of the Lender. Interest and profits, if any, on such
investments shall accumulate in such account. Moneys in such account shall
be applied by the Lender to reimburse itself for disbursements for which
it had not been reimbursed and to the extent so applied, shall be held for
the satisfaction of the reimbursement obligations of the Borrower or, if
the maturity has been accelerated, be applied to satisfy other obligations
of the Borrower under this Agreement. If the Borrower is required to
provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount (to the extent not so
applied as aforesaid) shall be returned to the Borrower within three
Business Days after all Events of Default have been cured or waived.
(e) The Borrower's obligation to reimburse disbursements made under
Letters of Credit issued hereunder shall be absolute and unconditional and
shall be performed in accordance with the terms of this Agreement
irrespective of any of the following circumstances:
(i) Any lack of validity or enforceability of any Letter of
Credit;
(ii) The existence of any claim, set-off, defense or other
right which the Borrower or affiliate of the Borrower may have at
any time against a beneficiary or any transferee of any Letter of
Credit (or any persons or entities for whom any such beneficiary or
transferee may be acting), the Lender or any other person, whether
in connection with this Agreement or the Letter of Credit or any
document related hereto or thereto or any unrelated transaction;
(iii) Any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent or invalid in any respect or
any statement therein being untrue or inaccurate in any respect;
(iv) Payment by the Lender under a Letter of Credit against
presentation of a draft or other document that does not comply with
the terms of such Letter of Credit, if such noncompliance is not
material;
(v) Any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the provisions
of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower's obligations
hereunder; or
(vi) The existence of a Default or an Event of Default.
Neither the Lender nor any affiliate of the Lender shall have any liability by
reason of or in connection with the issuance or transfer of any Letter of Credit
or any payment or failure to make any payment thereunder (irrespective of any of
the circumstances referred to above), or any error, omission, interruption, loss
or delay in transmission or delivery of any draft, notice or other communication
under or relating to any Letter of Credit (including any document required to
make a drawing thereunder), any error in interpretation of technical terms or
any consequence arising from causes beyond the control of the Lender; provided,
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that the foregoing shall not be construed to excuse the Lender from liability to
the Borrower to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the Borrower to the
extent permitted by applicable law) suffered by the Borrower that are caused by
the Lender's failure to exercise care when determining whether drafts or other
documents presented under a Letter of Credit comply with the terms thereof. The
parties hereto expressly agree, that in the absence of gross negligence or
willful misconduct on the part of the Lender (as finally determined by a court
of competent jurisdiction), the Lender shall be deemed to have exercised care in
each such determination. In furtherance of the foregoing and without limiting
the generality thereof, the parties agree that, with respect to documents
presented that appear on their face to be in substantial compliance with the
terms of a Letter of Credit, the Lender may, in its sole discretion, either
accept and make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or
refuse to accept and make payment upon such documents if such documents are not
in strict compliance with the terms of such Letter of Credit.
(f) Each Letter of Credit shall be subject to the Uniform Customs
and Practices for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500, as the same may be amended from
time to time, and, to the extent not inconsistent therewith, the governing
law of this Agreement.
2.2 Letter of Credit Fee. The Borrower agrees to pay to Lender a letter of
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credit fee which shall accrue at 50 basis points on the average daily face
amount of all undrawn letters of credit outstanding, calculated from the period
of the issuance of the Letter of Credit to but excluding the date upon which
such Letter of Credit expires or is drawn upon (including without limitation,
any Letters of Credit remaining outstanding after the Maturity Date), as well as
the Lender's standard fees with respect to issuance, amendment, renewal or
extension of any Letter of Credit or processing of drawings thereunder.
Accrued letter of credit fees shall be payable quarterly in arrears on the
last day of each March, June, September and December commencing December 31,
2001 and on the Maturity Date, provided further, that any letter of credit fee
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accruing after the Maturity Date shall be payable on the last day of each March,
June, September and December.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES
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To induce Lender to enter this Agreement and extend credit under this
Agreement, Borrower covenants, represents, and warrants to Lender that as of the
date hereof and as of the Closing Date:
3.1 Existence; Power. Borrower and each of its Subsidiaries (i) is duly
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organized, validly existing and in good standing as a corporation (or limited
partnership) under the laws of the jurisdiction of its organization, (ii) has
all requisite power and authority to carry on its business as now conducted, and
(iii) is duly qualified to do business, and is in good standing, in each
jurisdiction where such qualification is required, except where a failure to be
so qualified could not reasonably be expected to result in a Material Adverse
Effect.
3.2 Corporate Power and Authorization. Borrower is duly authorized and
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empowered to execute, deliver, and perform under all Loan Documents; Borrower's
board of directors has authorized such Borrower to execute and perform under the
Loan Documents; and all other corporate action required for the due execution,
delivery, and performance of the Loan Documents has been duly and effectively
taken.
3.3 Financial Condition. The consolidated Financial Statements of Borrower
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for the period ended December 31, 2000, and the Fiscal Quarter ended June 30,
2001, which have been delivered to Lender, have been prepared in accordance with
GAAP, consistently applied, and the Financial Statements present fairly the
financial condition of Borrower on a consolidated basis as of the date or dates
and for the period or periods stated therein. No Material Adverse Change has
occurred since the date of such Financial Statements, and Borrower has no
knowledge of any events or circumstances which may give rise to a Material
Adverse Change.
3.4 Liabilities and Litigation. Neither Borrower nor any of its
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Subsidiaries has any liabilities (individually or in the aggregate) direct or
contingent, that are likely to have a Material Adverse Effect on the business or
Properties of Borrower or its ability to carry on its business as now conducted.
There is no material litigation, legal or administrative proceeding,
investigation, or other action of any nature pending or, to the knowledge of
Borrower, threatened against or affecting Borrower (or any of its Subsidiaries)
that involves the reasonable possibility of any judgment or liability not fully
covered by insurance and that are likely to cause a Material Adverse Effect on
the business or the Properties of Borrower (or its applicable Subsidiary) or
their ability to carry on their business as now conducted.
3.5 Taxes; Governmental Charges. Borrower and its Subsidiaries have filed
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or caused to be filed all tax returns and reports required to be filed. Borrower
and its Subsidiaries have paid all due and payable taxes, assessments, fees, and
other governmental charges levied upon it, except for any taxes and assessments
(a) the amount of which would not individually or in the aggregate cause a
Material Adverse Effect or (b) the amount, applicability or validity or which is
currently being contested in good faith by appropriate proceedings and with
respect to which the Borrower and/or its Subsidiaries, has established adequate
reserves therefore in accordance with GAAP. Borrower and its Subsidiaries have
made all required withholding deposits.
3.6 ERISA. Borrower is in compliance in all material respects with the
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applicable provisions of ERISA. Borrower has not incurred any material
"accumulated funding deficiency" within the meaning of ERISA, and has not
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incurred any material liability to PBGC in connection with any Plan.
3.7 No Material Misstatements. No information, exhibit, or report
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furnished or to be furnished by Borrower to Lender in connection with this
Agreement, contains as of the date thereof, or will contain as of the Closing
Date, any material misstatement of fact or failed or will fail to state any
material fact, the omission of which would render the statements therein
materially false or misleading.
ARTICLE 4. CONDITIONS PRECEDENT
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4.1 Initial Conditions. Lender's obligation to extend credit hereunder is
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subject to the Conditions Precedent that Lender shall have received (or agreed
in writing to waive or defer receipt of) each of the following, as of the
Closing Date, in form and substance satisfactory to Lender:
(a) Note and Loan Documents. The Note, payable to the order of
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Lender and all other Loan Documents, all duly executed by the Borrower and
all other applicable Loan Parties.
(b) Resolutions. Certified copies of resolutions of the Board of
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Directors of Borrower and each authorizing or ratifying the execution,
delivery, and performance, respectively, of this Agreement and all
applicable Loan Documents.
(c) Certificates of Existence. Certificates of existence or good
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standing for Borrower and each Subsidiary Guarantor.
(d) Organizational Documents. A copy of Borrower's (and each
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Subsidiary Guarantor's) organizational documents (including all amendments
thereto) certified by the secretary or any assistant secretary of Borrower
or the Subsidiary Guarantor, as applicable, or, where available, by the
Secretary of State of the jurisdiction in which such entity was formed, as
being true, complete and current copies thereof.
(e) Closing Fee. Borrower's payment of a nonrefundable closing fee
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to Lender in the amount of Seven Thousand Five Hundred ($7,500) Dollars.
(f) Cancellation of Facility. Evidence of cancellation of a
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$100,000,000 revolving credit loan facility by and between Borrower and
Bank of America, N.A.
(g) Guaranty. Subsidiary Guaranty agreements executed by First
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Chemical Corporation, EKC Technology, Inc., First Chemical Texas, L.P.,
and ChemFirst Electronic Materials, Inc., respectively.
(h) Other. Such other documents as Lender may reasonably request.
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4.2 Each Advance. The obligation of Lender to make any Advance is subject
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to the satisfaction of the following conditions:
(a) at the time of and immediately after giving effect to such
Advance, no Default or Event of Default shall exist and the aggregate
principal amount of all Advances does not exceed the Maximum Revolver
Amount; and
(b) all representations and warranties of Borrower set forth in the
Loan Documents shall be true and correct in all material respects on and
as of the date of such Advance before and after giving effect thereto;
(c) since the date of the most recent financial statements of
Borrower described in Section 5.1(a), there shall have been no change
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which has had or could reasonably be expected to have a Material Adverse
Effect; and
(d) Lender shall have received such other documents, certificates,
information or legal opinions as it may reasonably request, all in form
and substance reasonably satisfactory to the Lender.
The making of each Advance shall be deemed to constitute a representation
and warranty by Borrower on the date thereof as to the matters specified in
paragraphs (a), (b) and (c) of this Section 4.2.
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ARTICLE 5. AFFIRMATIVE COVENANTS
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Borrower covenants that, during the term of this Agreement (including any
extensions hereof) and until all Indebtedness shall have been finally paid in
full, unless Lender shall otherwise first consent in writing, Borrower shall:
5.1 Financial Statements and Reports. Promptly furnish to Lender:
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(a) Annual Reports. As soon as available, and in any event within
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ninety (90) days after the close of each Fiscal Year, the audited
consolidated Financial Statements of Borrower and its Subsidiaries
prepared by a firm of independent certified public accountants acceptable
to Lender setting forth the audited consolidated balance sheets of
Borrower and its Subsidiaries as at the end of such year, and the audited
consolidated statements of income, statements of cash flows, and
statements of retained earnings of Borrower and its Subsidiaries for such
year, setting forth in each case in comparative form (beginning when
comparative data are available) the corresponding figures for the
preceding Fiscal Year, accompanied by the report of Borrower's certified
public accountants, and by an unaudited consolidating balance sheet and
unaudited consolidating statements of income, statements of cash flows,
and statements of retained earnings of Borrower and its Subsidiaries duly
certified by Borrower's chief financial officer as being correct
reflections of the information used for the audited consolidated Financial
Statements;
(b) Quarterly and Year-to-Date Reports. As soon as available and in
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any event within forty-five (45) days after the end of each Fiscal
Quarter, the consolidated balance sheets of Borrower and its Subsidiaries
as of the end of such Fiscal Quarter, and the consolidated and
consolidating statements of income of Borrower and its Subsidiaries for
such Fiscal Quarter and for a period from the beginning of the Fiscal Year
to the close of such Fiscal Quarter, all certified by the chief financial
officer or chief accounting officer of Borrower as being true and correct
to the best of his or her knowledge;
All such balance sheets and other Financial Statements referred to in Sections
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5.1(a) and (b) hereof shall conform to GAAP on a basis consistent with those of
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previous Financial Statements.
5.2 Further Assurances. Promptly cure any defects in the creation,
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issuance, and delivery of the Loan Documents. Borrower at its expense promptly
will execute and deliver to Lender upon request all such other and further
reasonable and necessary documents, agreements, and instruments in compliance
with or accomplishment of the covenants and agreements of Borrower in the Loan
Documents.
5.3 Quarterly Certificates of Compliance. Concurrently with the furnishing
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of the quarterly Financial Statements pursuant to Section 5.1(b) hereof, furnish
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or cause to be furnished to Lender a certificate of compliance prepared by
Borrower's chief accounting officer evidencing Borrower's compliance with the
financial covenants in Section 6.6 hereof.
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5.4 Maintenance. Maintain its corporate existence, name as well as
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material rights and franchises;
5.5 Insurance. Maintain and continue to maintain, with financially sound
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and reputable insurors, reasonable insurance in type, form, coverage and amount
against such liabilities, casualties, risks, and contingencies and in such types
and amounts as is customary in the case of corporations engaged in the same or
similar businesses and similarly situated. Upon request of Lender, Borrower will
furnish or cause to be furnished to Lender from time to time a summary of the
insurance coverage of Borrower in form and substance satisfactory to Lender and
if requested will furnish Lender copies of the applicable policies.
5.6 Right of Inspection; Audits. Permit an officer, employee, or agent
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designated by Lender to visit and inspect during normal business hours any of
the Property of Borrower, to examine Borrower's books of record and accounts, to
take copies and extracts from such books of record and accounts.
ARTICLE 6. NEGATIVE COVENANTS
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Borrower covenants and agrees that, during the term of this Agreement and
until the Indebtedness has been paid and satisfied in full, unless Lender shall
otherwise first consent in writing, Borrower will not (and will not permit its
Subsidiaries to), either directly or indirectly:
6.1 Debts, Guaranties, and Other Obligations. Incur, create, assume, or in
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any manner become or be liable with respect to any Debt; provided that subject
to all other provisions of this Article, the foregoing prohibitions shall not
apply to:
(a) The Indebtedness and any other Debt to Lender;
(b) existing liabilities, direct or contingent, of Borrower that are
referenced or reflected in the Financial Statements delivered to Lender
prior to the Closing Date;
(c) endorsements of negotiable or similar instruments for collection
or deposit in the ordinary course of business;
(d) revolving credit facility with SunTrust Bank in the principal
amount not to exceed $35,000,000;
(e) letters of credit issued by Bank of America, N.A. or by Chase
Manhattan Bank (or their successors) with an aggregate face amount not to
exceed $5,000,000;
(f) Debt to a Subsidiary of Borrower which shall not exceed
$1,000,000 at any time. However, notwithstanding the foregoing, Debt to a
Subsidiary which is a Guarantor and Debt to TriQuest, L.P. which does not
exceed $15,000,000 in the aggregate, shall not be subject to the
prohibition of Debt under this Section; and
(g) other Funded Debt, which is not included in subsection (a)
through (f) of this Section, which in the aggregate does not exceed
$10,000,000.
6.2 Liens. Create, incur, assume, or permit to exist any Lien on any of
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its Property (now owned or hereafter acquired) except, subject to all other
provisions of this Article, the foregoing restrictions shall not apply to:
(a) Any Liens securing the payment of any Debt to Lender;
(b) any Lien existing as of the Closing Date;
(c) Liens for taxes, fees, assessments or other governmental charges
which are not delinquent or remain payable without penalty, or Liens
contested in good faith by appropriate proceeding;
(d) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other similar Liens arising in the ordinary
course of business which are not delinquent or remain payable without
penalty or which are being contested in good faith and by appropriate
proceedings, which proceedings have the effect of preventing the
forfeiture or sale of the property subject thereto;
(e) Liens (other than any Lien imposed by ERISA) consisting of
pledges or deposits required in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other
social security legislation;
(f) Liens securing (i) the non-delinquent performance of bids, trade
contracts (other than for borrowed money), leases, statutory obligations;
(ii) contingent obligations on surety and appeal bonds; and (iii) other
non-delinquent obligations of a like nature; in each case, incurred in the
ordinary course of business, provided all such Liens in the aggregate
would not (even if enforced) cause a Material Adverse Effect;
(g) Liens consisting of judgment or judicial attachment liens,
provided that the enforcement of such Liens is effectively stayed and all
such liens in the aggregate at any time outstanding for the consolidated
Borrower do not exceed $5,000,000;
(h) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in
amount, and which do not in any case materially detract from the value of
the property subject thereto or interfere with the ordinary conduct of the
businesses of the Borrower;
(i) purchase money security interests on any property acquired or
held by the Borrower in the ordinary course of business;
(j) Liens securing obligations in respect of capital leases on
assets subject to such leases; and
(k) Normal and customary Liens incurred in the ordinary course of
business which do not, in the aggregate, exceed twenty percent (20%) of
the Borrower's Consolidated Tangible Net Worth.
6.3 Investments and Loans. The Borrower shall not purchase or acquire, or
---------------------
suffer or permit any Subsidiary to purchase or acquire, or make any commitment
therefor, any capital stock, equity interest, or any obligations or other
securities of, or any interest in, any Person, or make any advance, loan,
extension of credit or capital contribution to or any other investment in, any
Person including any Affiliate of the Borrower, except for:
(a) investment in cash equivalents and short term marketable
securities;
(b) extensions of credit in the nature of accounts receivable or
notes receivable arising from the sale or lease of goods or services in
the ordinary course of business;
(c) extensions of credit by Borrower to any Subsidiaries which are
Subsidiary Guarantors or by any of its Subsidiaries to another of its
Subsidiaries;
(d) investments incurred in order to consummate acquisitions or
increase Borrower's ownership interest in affiliates;
(e) repurchase of shares of the Borrower's capital stock as
authorized by its board of directors;
(f) types of investments existing as of the Closing Date; and
(g) loans and investments not otherwise permitted hereunder not to
exceed 20% of the Borrower's Consolidated Tangible Net Worth.
6.4 Nature of Business. Suffer or permit any material change to be made in
------------------
the character of its business as carried on at the Closing Date.
6.5 Fundamental Changes. The Borrower will not, and will not permit any
-------------------
Subsidiary to, merge into or consolidate into any other Person, or permit any
other Person to merge into or consolidate with it, or sell, lease, transfer or
otherwise dispose of (in a single transaction or a series of transactions) all
or substantially all of its assets or all or substantially all of the stock of
any of its Subsidiaries or liquidate or dissolve; provided, that if at the time
--------
thereof and immediately after giving effect thereto, no Event of Default shall
have occurred and be
continuing (i) the Borrower or any Subsidiary may merge with a Person if the
Borrower (or such Subsidiary if the Borrower is not a party to such merger) is
the surviving Person, (ii) any Subsidiary may merge into another Subsidiary;
provided, that if any party to such merger is a Subsidiary Guarantor, the
--------
Subsidiary Guarantor shall be the surviving Person, (iii) any Subsidiary may
sell, transfer, lease or otherwise dispose of all or substantially all of its
assets to the Borrower or to a Subsidiary Guarantor.
6.6 Financial Covenants.
-------------------
(a) Debt to Capitalization. The Borrower shall not permit the ratio
----------------------
of Consolidated Total Funded Debt to Consolidated Total Capital to exceed
.35 to 1.0, determined at the end of each Fiscal Quarter.
(b) Fixed Charge Coverage Ratio. The Borrower shall not permit the
---------------------------
ratio of Consolidated EBITR to Consolidated Fixed Charges to be less than
3.0 to 1.00, determined at the end of each Fiscal Quarter and calculated
on a trailing four quarter basis.
(c) Debt to EBITDA. The Borrower shall not permit the ratio of
--------------
Consolidated Total Funded Debt to Consolidated EBITDA (calculated on a
trailing four quarters basis) to exceed 1.75 to 1.0, determined at the end
of each Fiscal Quarter.
(d) Net Income. The Borrower's Consolidated Net Income shall be
----------
positive as determined at the end of each Fiscal Quarter, calculated on a
trailing four quarters basis.
ARTICLE 7. EVENTS OF DEFAULT
-----------------
7.1 Events of Default. Any of the following events shall be considered an
-----------------
Event of Default (and shall be considered a Default pending the passage of time,
giving of notice or other condition specified below):
(a) Principal and Interest Payments. Borrower fails to pay any
-------------------------------
installment of principal when due or any installment of interest under the
Note within five (5) Business Days after such payment is due or Borrower
fails to pay any other amount payable hereunder, under the Note, other
Loan Document or with respect to any Indebtedness within fifteen (15)
Business Days after written demand by Lender; or
(b) Certain Covenants. Borrower shall fail to observe or perform any
-----------------
of the covenants or agreements contained in Section 5.4 (concerning
Borrower's existence), Section 6.4 (concerning nature of business) or
Section 6.5 (concerning mergers and acquisitions); or
(c) Representations and Warranties. Any representation, warranty,
------------------------------
statement (including financial statements), certification or data made or
furnished by or on behalf of Borrower in connection with this Agreement or
any other Loan Document is false or misleading in any material respect as
of the date as of which the facts therein set forth were stated or
certified; or
(d) Obligations. Borrower fails to perform any of the promises or
-----------
obligations contained in or required by this Agreement or any other Loan
Document (other than the obligations described in subsections (a) and (b)
hereof) and such failure is not cured within thirty (30) days after
Lender's demand; or
(e) Involuntary Bankruptcy or Receivership Proceedings. Any of the
--------------------------------------------------
following events or conditions occurs with respect to Borrower: (i) a
receiver, custodian, liquidator, or trustee of itself or of any of its
respective Property is appointed by the order or decree of any court or
agency or supervisory authority having jurisdiction; or (ii) any of its
Property is sequestered by court order because of insolvency; or (iii) a
petition is filed against it under any state or federal bankruptcy,
reorganization, debt arrangement, insolvency, readjustment of debt,
dissolution, liquidation or receivership law of any jurisdiction, whether
now or hereafter in effect and such petition is not dismissed within
ninety (90) days of its filing; or
(f) Voluntary Petitions. Borrower files a voluntary bankruptcy
-------------------
petition or other petition to seek relief under any provision of any
bankruptcy, reorganization, debt arrangement, insolvency, readjustment of
debt, dissolution or liquidation law of any jurisdiction or consents to
the filing of any such petition against it under any such law; or
(g) Assignments for Benefit of Creditors, Etc. Borrower makes an
------------------------------------------
assignment for the benefit of its creditors, or admits in writing its
inability to pay its debts generally as they become due, or consents to
the appointment of a receiver, trustee, or liquidator of itself or of all
or any part of its Property; or
(h) Discontinuance of Business, Etc. Borrower (i) discontinues its
--------------------------------
usual business for a reason other than force majeure and such
discontinuance of business extends for more than sixty (60) days, or (ii)
commences to dissolve, wind-up or liquidate itself, or (iii) experiences a
Change of Control; or
(i) Cross-Default on Other Debt or Security. Subject to any
---------------------------------------
applicable grace period or waiver prior to any due date, Borrower fails to
make any payment due on any indebtedness, which in the aggregate equals or
exceeds $10,000,000; or
(j) Undischarged Judgments. Any court or other governmental
----------------------
authority renders judgment against Borrower for the payment of money in
excess of $5,000,000, payment of which is not fully covered by valid
collectible insurance or for which Borrower has not established adequate
reserves in accordance with GAAP; or
(k) Guaranty Default. A Subsidiary Guarantor fails to make any
----------------
payment, perform any agreement or observe any covenant in a Subsidiary
Guaranty, subject to any cure period or grace period set forth therein.
7.2 Remedies. Upon the occurrence of an Event of Default, Lender may
--------
declare the entire principal amount of all Indebtedness then outstanding,
including interest accrued thereon, to be immediately due and payable without
presentment, demand, protest, notice of protest, or dishonor or other notice of
default of any kind, all of which Borrower hereby expressly waives, and, at
Lender's sole discretion and option, all obligations of Lender under this
Agreement shall
immediately cease and terminate unless and until Lender shall reinstate such
obligations in writing. Such acceleration and cessation of Lender's obligations
shall occur automatically, without any declaration by Lender or any notice, upon
the occurrence of an Event of Default under Section 7.1(e), (f) or (g). Upon the
occurrence of any Event of Default, Lender may exercise all rights afforded a
creditor under applicable law, and/or bring an action to protect or enforce its
rights under the Loan Documents or seek to collect the Indebtedness by any
lawful means.
ARTICLE 8. INDEMNIFICATIONS
----------------
8.1 Indemnity. In consideration of the execution and delivery of this
---------
Agreement by Lender and the extension of the Loan, Borrower hereby indemnifies,
exonerates and holds Lender and each of its affiliates, officers, directors,
shareholders, employees, agents and assigns (the "indemnified parties") free and
-------------------
harmless from and against any and all actions, causes of action, suits, losses,
costs, liabilities and damages and expenses (irrespective of whether any such
indemnified party is a party to the action for which indemnification hereunder
is sought), including reasonable attorneys' fees and disbursements incurred by
the indemnified parties or any of them resulting from (a) any transaction
financed or to be financed in whole or in part, directly or indirectly, with the
proceeds of the Loan; or (b) the entering into and performance of this Agreement
and any other Loan Document by any of the indemnified parties, regardless of
whether caused by, or within the control of, Borrower, except to the extent
arising out of an indemnified party's gross negligence or willful misconduct, or
(c) Borrower's material breach of any provision of any Loan Document
(collectively, the "Indemnified Liabilities"). If and to the extent that the
-----------------------
foregoing undertaking may be unenforceable for any reason, Borrower hereby
agrees to make the maximum contribution to the payment and satisfaction of each
of the Indemnified Liabilities that is permissible under applicable law. The
indemnification set forth in this Section shall survive termination of this
Agreement.
ARTICLE 9. GENERAL PROVISIONS
------------------
9.1 Notices. All notices, requests, demands, directions and other
-------
communications (collectively "notices") required under this Agreement shall be
-------
in writing (including communication by facsimile transmission) and shall be sent
by hand, by registered or certified mail return receipt requested, by overnight
courier service maintaining records of receipt, or by facsimile transmission
with confirmation in writing mailed first-class, in all cases with charges
prepaid. Any such properly given notice shall be effective upon the earlier of
receipt or (a) the date delivered by hand, or (b) the third Business Day after
being mailed, or (c) the following Business Day if sent by overnight courier
service, or (d) upon sender's receipt of transmission confirmation, if sent by
facsimile. All notices shall be sent to the following addresses:
ChemFirst Inc.
000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
(000) 000-0000 (facsimile)
Attn: Xxx X. Xxxxxx, Vice President and Chief Financial Officer
AmSouth Bank
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
(000) 000-0000 (facsimile)
Attention: Xxxxxxx Xxxxxx, Vice President
9.2 Successors and Assigns. Borrower shall not assign its rights or
----------------------
delegate its duties under this Agreement or any other Loan Document without the
written consent of Lender, such consent not to be unreasonably withheld. All
covenants and agreements made by or on behalf of Borrower shall bind its
permitted successors and assigns and shall inure to the benefit of Lender and
its successors and assigns.
9.3 Amendments. This Agreement may not be modified or amended except in
----------
writing signed by Borrower and Lender.
9.4 Governing Law. This Agreement, the Note, and the other Loan Documents
-------------
constitute a contract made under, and shall be construed in accordance with and
governed by, the laws of the State of Mississippi (without regard to its rules
on conflicts of laws).
9.5 Costs, Expenses, and Taxes. Borrower agrees to pay on demand all
--------------------------
reasonable and necessary out-of-pocket costs and expenses of Lender (including
the reasonable fees and out-of-pocket expenses of Lender's attorneys) incurred
by Lender in connection with the enforcement of this Agreement or the other Loan
Documents.
9.6 Counterparts. This Agreement may be executed in any number of
------------
counterparts or counterpart signature pages (by facsimile transmission or
otherwise), each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute but one and the same instrument.
9.7 Jurisdiction; Venue; Service of Process. BORROWER AND LENDER HEREBY
---------------------------------------
IRREVOCABLY CONSENT TO THE JURISDICTION OF THE FEDERAL COURTS SITTING IN XXXXX
COUNTY, MISSISSIPPI, FOR ANY SUIT BROUGHT OR ACTION COMMENCED IN CONNECTION WITH
THIS AGREEMENT.
9.8 Jury Waiver. BORROWER AND LENDER HEREBY KNOWINGLY, WILLINGLY AND
-----------
IRREVOCABLY WAIVES ITS RIGHTS TO DEMAND A JURY TRIAL IN ANY ACTION OR PROCEEDING
INVOLVING THIS AGREEMENT.
9.9 Waiver of Damages. In any action to enforce this Agreement, Borrower
-----------------
and Lender hereby irrevocably and unconditionally waive any and all rights under
the laws of any state to claim or recover any special, exemplary, punitive,
consequential or other damages other than actual direct damages.
ARTICLE 10.
DEFINITIONS AND USAGE
---------------------
10.1 Defined Terms. In addition to other words and terms defined in the
-------------
preamble hereof or elsewhere in this Agreement, the following terms shall have
the following meanings herein, unless the context expressly requires otherwise:
"Advance" means any extension of credit made pursuant to this Agreement,
-------
including the issuance of a Letter of Credit.
"Applicable Rate" means: (i) with respect to a requested Advance
---------------
determined with reference to LIBOR, the LIBOR Rate for the applicable Interest
Period, plus 50 basis points; (ii) with respect to a requested Advance
determined with reference to Prime Rate, the Prime Rate of interest; and (iii)
such other rate of interest mutually agreed upon by Borrower and Lender with
reference to Lender's cost of funds serving as an index thereto.
"Bid Rate Request" or "Bid-Rate Advance" means a request for and Advance
---------------- ----------------
under the Note with an interest rate negotiated by and between Borrower and
Lender (in Lender's sole and absolute discretion) under the terms hereof and
under the Note.
"Business Day" means any day other than a Saturday, Sunday or other day on
------------
which commercial banks in Birmingham, Alabama or Jackson, Mississippi are
authorized or required by law to close.
"Change in Control" shall mean the occurrence of one or more of the
-----------------
following events: (a) any sale, lease, exchange or other transfer (in a single
transaction or a series of related transactions) of all or substantially all of
the assets of the Borrower to any Person or "group" (within the meaning of the
Securities Exchange Act of 1934 and the rules of the Securities and Exchange
Commission thereunder in effect on the date hereof), (b) the acquisition of
ownership, directly or indirectly, beneficially or of record, by any Person or
"group" (within the meaning of the Securities Exchange Act of 1934 and the rules
of the Securities and Exchange Commission thereunder in effect on the date
hereof) of 30% or more of the outstanding shares of the voting stock of the
Borrower; or (c) occupation of a majority of the seats (other than vacant seats)
on the board of directors of the Borrower by Persons who were neither (i)
nominated by the current board of directors or (ii) appointed by directors so
nominated.
"Change in Law" shall mean (i) the adoption of any applicable law, rule or
-------------
regulation after the date of this Agreement, (ii) any change in any applicable
law, rule or regulation, or any change in the interpretation or application
thereof, by any governmental authority after the date of this Agreement, or
(iii) compliance by the Lender (or for purposes of Section 1.9, by the Lender's
-----------
holding company, if applicable) with any request, guideline or directive
(whether or not having the force of law) of any governmental authority made or
issued after the date of this Agreement.
"Closing" means the time and place of the execution and/or delivery of the
-------
Loan Documents.
"Closing Date" means September 21, 2001.
------------
"Consolidated EBITDA" shall mean, for the Borrower and its Subsidiaries
-------------------
for any period, an amount equal to the sum of (a) Consolidated Net Income for
such period plus (b) to the extent deducted in determining Consolidated Net
Income for such period, (i) Consolidated Interest Expense, (ii) income tax
expense determined on a consolidated basis in accordance with GAAP, and (iii)
depreciation and amortization determined on a consolidated basis in accordance
with GAAP.
"Consolidated EBITR" shall mean, for the Borrower and its Subsidiaries for
------------------
any period, an amount equal to the sum of (a) Consolidated Net Income for such
period, plus (b) to the extent deducted in determining Consolidated Net Income
----
for such period, (i) Consolidated Interest Expense, (ii) income tax expense,
determined on a consolidated basis in accordance with GAAP in each case for such
period, and (iii) rent expense on a consolidated basis for such period.
"Consolidated Fixed Charges" shall mean, for the Borrower and its
--------------------------
Subsidiaries for any period, the sum (without duplication) of (a) Consolidated
Interest Expense for such period, (b) scheduled principal payments made on
Consolidated Total Funded Debt during such period and (c) dividend payments
during any such period.
"Consolidated Interest Expense" shall mean, for the Borrower and its
-----------------------------
Subsidiaries for any period determined on a consolidated basis in accordance
with GAAP, the sum of (i) total cash interest expense, including without
limitation the interest component of any payments in respect of capital lease
obligations capitalized or expensed during such period (whether or not actually
paid during such period) plus (ii) the net amount payable (or minus the net
amount receivable) under Hedging Agreements during such period (whether or not
actually paid or received during such period).
"Consolidated Net Income" shall mean, for any period, the net income (or
-----------------------
loss) of the Borrower and its Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP, but excluding therefrom (to the
extent otherwise included therein) (i) any extraordinary gains, (ii) any gains
attributable to write-ups of assets and (iii) any equity interest of the
Borrower or any Subsidiary of the Borrower in the unremitted earnings of any
Person that is not a Subsidiary, (iv) any income (or loss) of any Person accrued
prior to the date it becomes a Subsidiary or is merged into or consolidated with
the Borrower or any Subsidiary on the date that such Person's assets are
acquired by the Borrower or any Subsidiary; and (v) for the Fiscal Quarter ended
June 30, 2001 a $17,692,000 after-tax loss arising from the sale of assets of
the ChemFirst Fine Chemicals business.
"Consolidated Net Worth" shall mean, as of any date, the total assets of
----------------------
the Borrower and its Subsidiaries that would be reflected on the Borrower's
consolidated balance sheet as of such date prepared in accordance with GAAP,
after eliminating all amounts properly attributable to minority interests, if
any, in the stock and surplus of Subsidiaries, minus the total liabilities of
-----
the Borrower and its Subsidiaries that would be reflected on the Borrower's
consolidated balance sheet as of such date prepared in accordance with GAAP.
"Consolidated Tangible Net Worth" shall mean the Consolidated Net Worth,
-------------------------------
excluding any items that would be classified as an intangible asset or goodwill
according to GAAP.
"Consolidated Total Capital" shall mean, as of any date of determination
--------------------------
with respect to the Borrower, the sum of (i) Consolidated Total Funded Debt and
(ii) Consolidated Net Worth.
"Consolidated Total Funded Debt" or "Funded Debt" shall mean, as of any
------------------------------ -----------
date of determination, without duplication, (a) all indebtedness for borrowed
money; (b) all non-contingent reimbursement or payment obligations with respect
to letters of credit or surety
obligations; (c) all obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses; (d) all capital lease
obligations; and (e) all guaranty obligations in respect of indebtedness or
obligations of others of the kinds referred to in clauses (a) through (d) above.
"Consolidated Total Debt" shall mean, as of any date of determination, all
-----------------------
Debt of the Borrower and its Subsidiaries that would be reflected on a
consolidated balance sheet of the Borrower prepared in accordance with GAAP as
of such date.
"Debt" means all of a Person's obligations, contingent or otherwise, that
----
would be classified on its balance sheet as its liabilities in accordance with
GAAP.
"Default" means the occurrence of any of the events specified in Section
------- =======
7.1 hereof, even though any requirement for notice or lapse of time or other
===
condition precedent has not been satisfied.
"Default Rate" means the highest lawful rate of interest permitted to be
------------
charged by other applicable laws or regulations, as amended or enacted from time
to time.
"Event of Default" means the occurrence of any of the events specified in
----------------
Section 7.1 hereof, if any requirement in Section 7.1 for notice or lapse of
=========== ===========
time or other condition precedent has been satisfied.
"Executive Officer" means any one of the following: the Chief Executive
-----------------
Officer and Chairman of the Board of Directors, President and Chief Operating
Officer, Vice President Finance and Treasurer or Corporate Secretary of
Borrower.
"Federal Funds Rate" shall mean, for any day, the rate per annum (rounded
------------------
upwards, if necessary, to the next 1/100th of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with member banks of the
Federal Reserve System arranged by Federal funds brokers, as published by the
Federal Reserve Bank of New York on the next succeeding Business Day or if such
rate is not so published for any Business Day, the Federal Funds Rate for such
day shall be the average rounded upwards, if necessary, to the next 1/100th of
1% of the quotations for such day on such transactions received by the Lender
from three Federal funds brokers of recognized standing selected by the Lender.
"Financial Statements" means (a) the financial statement or statements of
--------------------
Borrower described or referenced in Section 3.6 hereof and delivered with this
===========
Agreement to Lender, and (b) subsequent financial statements required to be
provided pursuant to this Agreement.
"Fiscal Quarter" means each of the quarters of the Fiscal Year, ending on
--------------
March 31, June 30, September 30 and December 31.
"Fiscal Year" means any twelve-month accounting period ending December
-----------
31.
"GAAP" means generally accepted accounting principles as in effect from
----
time to time.
"Hedging Agreement" shall mean the obligations of any person pursuant to
-----------------
any arrangement with any other person whereby, directly or indirectly, such
person is entitled to receive from time to time periodic payments calculated by
applying either a floating or fixed rate of interest on a stated notional amount
in exchange for periodic payments made by such person calculated by applying a
floating or fixed rate of interest on the same notional amount and shall
include, without limitation, interest rate swaps, caps, floors, collars and
similar agreements.
"Indebtedness" means any and all amounts and liabilities of any nature
------------
owing or to be owing by Borrower to Lender from time to time, whether now
existing or hereafter incurred, in connection with this Agreement, the Note
and/or the Loan Documents.
"Interest Period" means initially, the period commencing on the borrowing,
---------------
conversion or renewal thereof, as the case may be, with respect to an Advance
and ending one month or three months thereafter, as selected by the Borrower in
its notice of borrowing or notice of renewal, as the case may be, given with
respect thereto; provided that all of the foregoing provisions relating to
--------
Interest Periods are subject to the following:
(1) if any Interest Period would otherwise end on a day that is not
a Business Day, such Interest Period shall be extended to the next
succeeding Business Day;
(2) any Interest Period that would otherwise extend beyond the
Maturity Date shall end on the Maturity Date; and
(3) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month.
"Lender's Office" means the principal office of Lender located at the
---------------
address set forth at the beginning of this Agreement.
"Letters of Credit" shall mean any letter(s) of credit issued by the
-----------------
Lender pursuant to Article 2 hereof.
---------
"LIBOR" means, for the related Interest Period:
-----
(a) the rate per annum quoted at or about 11:00 a.m. (London time)
such Interest Period on that page of the Telerate Screen, Reuters or
Bloombergs which displays British Bankers Association Interest Settlement
Rates for deposits in U.S. Dollars for such Interest Period or, if such
page or service shall cease to be available, such other page or such other
service (as the case may be) for the purpose of displaying British Bankers
Association Interest Settlement Rates for U.S. Dollars.
(b) If such rate and the relevant Interest Period is not available
to Lender for any reason, the "LIBOR" will be the rate at which deposits
in such currency equal to $500,000 are offered by the Lender for such
Interest Period to prime banks in the London interbank market at or about
10:00 a.m. (Eastern time) two (2) Business Days prior to the beginning of
such Interest Period.
"Lien" means any interest in Property securing an obligation owed to, or a
----
claim by, a Person other than the owner of the Property, whether such interest
is based on the common law, statute, or contract, and including, without
limitation, the lien or security interest arising from a mortgage, encumbrance,
pledge, security agreement, conditional sale, sale of accounts or intangibles,
trust receipt or a lease, consignment, or bailment for security purposes.
"Loan" means the loan facility described in Section 1.1 hereof.
---- ===========
"Loan Documents" means, collectively, all of the agreements, documents,
--------------
papers and certificates executed, furnished or delivered in connection with this
Agreement (whether before, at, or after the Closing Date) or at any time
evidencing or securing any of the Indebtedness, including, without limitation,
this Agreement, the Note, the Subsidiary Guaranties, and all other documents,
certificates, reports, and instruments that this Agreement requires or that were
executed or delivered (or both) at Lender's request.
"Material Adverse Effect" or "Material Adverse Change" means, as
----------------------- -----------------------
applicable, a material adverse effect on, or material adverse change in, (a) the
business, operations or financial condition of Borrower, (b) the ability of
Borrower to perform its obligations under this Loan Agreement, the Note, or
other Loan Documents, or (c) Lender's ability to enforce the rights and remedies
granted under this Agreement or other Loan Documents, in all cases whether
attributable to a single circumstance or event or an aggregation of
circumstances or events.
"Maturity Date" means September 20, 2002.
-------------
"Maximum Revolver Amount" means Fifteen Million and 00/100 Dollars
-----------------------
($15,000,000.00).
"Maximum Revolver Availability" means the amount, if any, by which the
-----------------------------
Maximum Revolver Amount exceeds all outstanding Advances and the face amount of
all outstanding Letters of Credit.
"Note" or "Revolving Credit Note" means, the Revolving Credit Note, dated
---- ---------------------
as of the date hereof, executed by Borrower and Lender, and any amendments
thereto or restatements thereof.
"Person" means any individual, corporation, partnership, joint venture,
------
association, limited liability company, joint stock company, trust,
unincorporated organization, government, or any agency or political subdivision
thereof, or any other form of entity.
"Prime Rate" means the higher of (i) the per annum rate which the Lender
----------
publicly announces from time to time to be its prime lending rate, as in effect
from time to time, and (ii) the Federal Funds Rate, as in effect from time to
time, plus one-half of one percent (0.50%). The Lender's prime lending rate is a
reference rate and does not necessarily represent the lowest or best rate
charged to customers. The Lender may make commercial loans or other loans at
rates of interest at, above or below the Lender's prime lending rate. Each
change in the Lender's prime lending rate shall be effective from and including
the date such change is publicly announced as being effective.
"Property" or "Properties" means any interest in any kind of property or
-------- ----------
asset, whether real, personal, or mixed, or tangible or intangible.
"Statutory Reserve Rate" means, with respect to any currency, a fraction
----------------------
(expressed as a decimal), the numerator of which is one and the denominator of
which is the number one minus the aggregate of the maximum reserve percentages
(including, without limitation, any emergency, supplemental, special or other
marginal reserves) expressed as a decimal established by any governmental
authority of the United States. Such reserve, liquid asset or similar
percentages shall include those imposed pursuant to Regulation D. The Statutory
Reserve Rate shall be adjusted automatically on and as of the effective date of
any change in any reserve percentage.
"Subsidiary" means, at the time as of which any determination is being
----------
made, any corporation, partnership, limited partnership or other entity of which
more than fifty percent (50%) of the issued and outstanding voting stock (or
partnership interests) is owned or controlled, directly or indirectly, by
Borrower and/or by one or more of Borrower's Subsidiaries.
"Subsidiary Guarantor" means individually and collectively, the
--------------------
Subsidiaries of Borrower executing a Subsidiary Guaranty from time to time.
"Subsidiary Guaranty" or "Subsidiary Guaranties" means (individually and
------------------- ---------------------
collectively) the Guaranty Agreements executed from time to time by a Subsidiary
Guarantor substantially in the form of Exhibit A.
"Taxes" shall mean any and all present or future taxes, levies, imposts,
-----
duties, deductions, charges or withholdings imposed by any governmental
authority.
10.2 Computations; Accounting Principles. Where the character or amount of
-----------------------------------
any asset or liability or item of income or expense is required to be
determined, or any consolidation or other accounting computation is required to
be made for the purposes of this Agreement, such determination or calculation,
to the extent applicable and except as otherwise specified in this Agreement,
shall be made in accordance with GAAP applied on a consolidated basis consistent
with those in effect at the Closing Date.
10.3 Exhibits and Schedules. All Exhibits and Schedules attached hereto
----------------------
are by reference made a part hereof.
10.4 General Construction; Captions. All definitions and other terms used
------------------------------
in this Agreement are equally applicable to the singular and plural forms
thereof, and all references to any gender include all other genders. The words
"hereof", "herein" and "hereunder" and words of similar import in this Agreement
------ ------ ---------
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and references to Sections, subsections, schedules and exhibits are
to this Agreement unless otherwise specified. The words "includes" and
--------
"including" and words of similar import are inclusive and not exclusive terms,
---------
and are not intended to create any limitation. The captions in this Agreement
are for convenience only, and in no way limit or amplify the provisions hereof.
10.5 UCC Terms. Terms used in this Agreement that are defined in the UCC
---------
shall have the same meanings herein, except as otherwise expressly provided or
amplified (but not limited) herein.
10.6 References to Documents and Laws. All defined terms and references in
--------------------------------
this Agreement with respect to any agreements, notes, instruments, certificates
or other documents shall be deemed to refer to such documents and to any
amendments, modifications, renewals, extensions, replacements, restatements,
substitutions and supplements of and to such documents. Unless otherwise
provided, all references to statutes and related regulations shall include any
amendments thereof and any successor statutes and regulations.
10.7 Entire Agreement. This Agreement and the Loan Documents state the
----------------
entire Agreement between the parties and supercedes all other agreements with
respect to the subject matter hereof. This Agreement may only be supplemented,
altered, amended, modified, or revoked in writing by signed agreement of all the
parties hereto.
ENTERED INTO as of the date first written above.
BORROWER:
---------
CHEMFIRST INC.
By: /s/ Xxx X. Xxxxxx
Title: Vice President & CFO
LENDER:
-------
AMSOUTH BANK
By: /s/ E. Xxxxxxx Xxxxxx
Title: VP
REVOLVING CREDIT NOTE
---------------------
Jackson, Mississippi $15,000,000.00
September 24, 2001
FOR VALUE RECEIVED, CHEMFIRST INC., a Mississippi corporation (the
"Borrower") promises and agrees to pay to the order of AMSOUTH BANK ("Lender")
at the offices of AmSouth Bank in Jackson, Mississippi, or at such other place
as may be designated in writing by the holder, in lawful money of the United
States of America the principal amount of up to Fifteen Million and 00/100
($15,000,000) Dollars, or so much thereof as may be advanced from time to time,
on the Maturity Date, together with interest as set forth herein and in the Loan
Agreement (as defined below).
This Note is issued pursuant to, and is the Note referred to in that
certain Loan Agreement of even date herewith between Borrower and the Lender as
such Loan Agreement may be amended, modified, extended and/or renewed from time
to time, including without limitation all restatements thereof, being referred
to herein as the "Loan Agreement". Any term not otherwise defined in this Note
shall have the same meaning as set forth in the Loan Agreement. Reference is
made to the Loan Agreement, which, among other things, provides for the
acceleration of the maturity hereof upon the occurrence of certain events in
certain circumstances and upon certain terms and conditions.
Interest shall accrue on all amounts outstanding under this Note at the
Applicable Rate(s) elected (or as requested by Borrower and agreed to by Lender)
by Borrower in accordance with the Loan Agreement. The Applicable Rate may be
determined with reference to the LIBOR Rate, the Prime Rate or may be such other
rate of interest as agreed upon by Borrower and Lender for such Advance from
time to time (a "Bid Rate Advance"). Notices and requests for Advances hereunder
shall be in accordance with the Loan Agreement.
The Lender shall have the sole and absolute discretion to make a Bid-Rate
Advance. If the Lender shall accept the Borrower's request for a Bid-Rate
Advance, it shall make the Advance on the date requested, at the agreed-upon
rate of interest and with the agreed-upon payment date, all of which shall be
noted upon Lender's books and records and such notation shall be presumed
correct absent manifest error. Lender's failure to note such terms of a Bid-Rate
Advance shall not affect Borrower's requirement to make repayment thereof.
Borrower promises to pay interest on the outstanding principal amount of
each Advance hereunder, at such interest rates, payable at such times, and
computed in such manner, in accordance with the terms of the Loan Agreement and
the terms hereof. Interest on all Bid-Rate Advances and on all Advances which
accrue interest with reference to the LIBOR Rate as the Applicable Rate, shall
be paid at the end of the applicable Interest Period, unless such Interest
Period is greater than three months, and in such event at the end of each three
month period from such Advance and at the end of the applicable Interest Period.
Interest accruing on an Advance with reference to Prime Rate as the
Applicable Rate shall be paid in arrears on the first Business Day of each
calendar month, commencing October 1, 2001.
As long as no Event of Default has occurred, Borrower may borrow, repay,
reborrow and repay hereunder until the Maturity Date; provided, however, that at
no time shall the principal amount outstanding hereunder exceed the Maximum
Revolver Amount under the Loan Agreement. If any such excess occurs, Borrower
shall immediately pay to the Lender all principal outstanding hereunder in
excess of the applicable Maximum Revolver Amount plus all accrued interest
thereon.
The terms and conditions of any prepayment of this Note shall be governed
by the Loan Agreement.
The terms and conditions in connection with requesting an Advance by
Borrower and for making any Advances by Lender hereunder shall be governed by
the applicable provisions hereof and of the Loan Agreement.
This Note shall mature on September 20, 2002 (the "Maturity Date"), at
which time all outstanding principal, accrued interest, and all unpaid fees or
charges hereunder (if any) will be immediately due and payable.
In the event that there occurs any Event of Default under the Loan
Agreement, then, in such event, at the option of the Lender or automatically in
the case of Events of Default under Sections 7.01(d), (e) and (f) of the Loan
Agreement, the entire indebtedness hereby evidenced shall become due, payable
and collectible then or thereafter, without further notice, as the holder may
elect regardless of the date of maturity. The Lender may waive any Event of
Default before or after the same has been declared and restore this Note to full
force and effect without impairing any rights hereunder, such right of waiver
being a continuing one.
Following the occurrence of an Event of Default, principal and unpaid
interest bear interest at the Default Rate, until paid. The undersigned will pay
under the provisions of the Loan Agreement, the costs and expenses in connection
with the collection, enforcement, protection and/or litigation with regard to
this Note and/or any of Lender's rights hereunder.
The makers, endorsers, guarantors and all parties to this Note and all who
may become liable for same, jointly and severally waive presentment for payment,
protest, notice of protest, notice of nonpayment of this Note, demand and all
legal diligence in enforcing collection, and hereby expressly agree that the
lawful owner or holder of this Note may defer or postpone collection of the
whole or any part thereof, either principal and/or interest, or may extend or
renew the whole or any part thereof, either principal and/or interest, or may
accept additional collateral or security for the payment of this Note, or may
release the whole or any part of any collateral security and/or liens given to
secure the payment of this Note, or may release from liability on account of
this Note any one or more of the makers, endorsers, guarantors and/or other
parties thereto, all without notice to them or any of them; and such deferment,
postponement, renewal, extension, acceptance of additional collateral or
security and/or release
shall not in any way affect or change the obligation of any such maker,
endorser, guarantor or other party to this Note, or of any who may become liable
for the payment thereof.
This Note has been executed and delivered in, and shall be governed by and
construed according to the laws of the State of Mississippi except to the extent
pre-empted by applicable laws of the United States of America.
IN WITNESS WHEREOF, the undersigned, a duly authorized officer of Borrower
executes this Revolving Credit Note as of the day and date first set forth
above.
CHEMFIRST INC.
By:/s/ Xxx X. Xxxxxx
Title: Vice President & CFO
FIRST AMENDMENT TO LOAN AGREEMENT
---------------------------------
THIS FIRST AMENDMENT TO LOAN AGREEMENT (this "Amendment") is executed this
the 17th day of October, 2001 (effective September 24, 2001), by and between
CHEMFIRST, INC., a Mississippi corporation (the "Borrower") and AMSOUTH BANK
(the "Lender").
RECITALS:
---------
A. Borrower and Lender previously executed that certain Loan Agreement
dated as of September 24, 2001 (as amended or restated from time to time, the
"Loan Agreement") pursuant to which the Lender extended credit to the Borrower
upon the terms and conditions set forth therein.
B. The Borrower and Lender are desirous of amending the Loan Agreement as
set forth herein.
C. Terms not otherwise defined herein shall have the meanings ascribed to
such terms in the Loan Agreement.
NOW, THEREFORE, for other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto agree as follows:
1. The following is added as Section 1.10 of the Loan Agreement:
1.10 Extension of Maturity Date. No earlier than seventy-five (75)
--------------------------
days and not later than sixty (60) days prior to the applicable
Maturity Date, the Borrower may deliver a written request to Lender
requesting an extension of the Maturity Date for an additional
period of up to 364 days from the existing Maturity Date. Lender, in
its sole and absolute discretion, may extend the Maturity Date as
requested by Borrower by delivery of written notice to Borrower. If
the extension is approved by Lender, the definition of Maturity Date
shall thereafter be the date as requested by Borrower and approved
by Lender under this Section. In the event the Lender has not
delivered to Borrower its written acceptance of an extended Maturity
Date within forty-five (45) days of the current Maturity Date,
Borrower's request for an extension under this Section shall be
deemed denied.
2. Except as specifically set forth herein, no other amendment or
modification is hereby made to the Loan Agreement or any Loan Documents.
Borrower and Lender agree that all documents and instruments presently
securing or guaranteeing the Note and the Loan Agreement shall not be
otherwise amended, modified, terminated or released by the execution
hereof.
3. This Amendment may be executed in one or more counterparts, all of which
shall, taken together, constitute one original. The parties agree that
facsimile signatures shall be deemed to be and treated as original
signatures of such parties.
IN WITNESS WHEREOF, the undersigned, by and through their duly authorized
officers, hereby execute this Amendment as of the day and date first set forth
above.
CHEMFIRST, INC.
By: /s/ Xxx X. Xxxxxx
Title: Treasurer
AMSOUTH BANK
By: /s/ E. Xxxxxxx Xxxxxx
Title: Vice President
SECOND AMENDMENT TO LOAN AGREEMENT
----------------------------------
THIS SECOND AMENDMENT TO LOAN AGREEMENT (this "Amendment") is executed
this the 3rd day of December, 2001 (effective September 30, 2001), by and
between CHEMFIRST, INC., a Mississippi corporation (the "Borrower") and AMSOUTH
BANK (the "Lender").
RECITALS:
---------
A. Borrower and Lender previously executed that certain Loan Agreement
dated as of September 24, 2001 and that certain First Amendment to Loan
Agreement dated October 17, 2001 (as amended or restated from time to time, the
"Loan Agreement") pursuant to which the Lender extended credit to the Borrower
upon the terms and conditions set forth therein.
B. The Borrower and Lender are desirous of further amending the Loan
Agreement as set forth herein.
C. Terms not otherwise defined herein shall have the meanings ascribed to
such terms in the Loan Agreement.
NOW, THEREFORE, for other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto agree as follows:
1. Compliance with Section 6.6(b) of the Loan Agreement concerning "Fixed
Charge Coverage Ratio" is waived for the Fiscal Quarter ending September
30, 2001.
Section 6.6(b) of the Loan Agreement is deleted and the following is
substituted in lieu thereof:
6.6 Financial Covenants
(b) Fixed Charge Coverage Ratio. The Borrower shall not permit
---------------------------
the ratio of Consolidated EBITR to Consolidated Fixed Charges to be
less than 2.25 to 1.00 at the end of the Fiscal Quarter ending
December 31, 2001, less than 1.65 to 1.00 at the end of the Fiscal
Quarter ending March 31, 2002, less than 2.25 to 1.00 at the end of
the Fiscal Quarter ending June 30, 2001 and less than 3.00 to 1.00
at the end of each Fiscal Quarter thereafter. This ratio shall be
calculated on a trailing four-quarter basis.
2. Except as specifically set forth herein, no other amendment or
modification is hereby made to the Loan Agreement or any Loan Documents.
Borrower and Lender agree that all documents and instruments presently
securing or guaranteeing the Note and the Loan Agreement shall not be
otherwise amended, modified, terminated or released by the execution
hereof.
3. This Amendment may be executed in one or more counterparts, all of which
shall, taken together, constitute one original. The parties agree that
facsimile signatures shall be deemed to be and treated as original
signatures of such parties.
IN WITNESS WHEREOF, the undersigned, by and through their duly authorized
officers, hereby execute this Amendment as of the day and date first set forth
above.
CHEMFIRST, INC.
By: /s/ Xxx X. Xxxxxx
Title: Vice President & CFO
AMSOUTH BANK
By: /s/ E. Xxxxxxx Xxxxxx
Title: Vice President