EXHIBIT 4.18(d)
FOURTH AMENDMENT TO REVOLVING CREDIT AGREEMENT AND SECOND
AMENDMENT TO REVOLVER INTERCREDITOR AGREEMENT
THIS FOURTH AMENDMENT TO REVOLVING CREDIT AGREEMENT AND SECOND
AMENDMENT TO REVOLVER INTERCREDITOR AGREEMENT (this "Amendment"), dated as of
October 10, 2001, is among STERLING CHEMICALS, INC., a Delaware corporation (the
"Company"), STERLING CANADA, INC., a Delaware corporation ("Canada"), STERLING
PULP CHEMICALS US, INC., a Delaware corporation ("Pulp US"), STERLING PULP
CHEMICALS, INC., a Georgia corporation ("Pulp"), STERLING FIBERS, INC., a
Delaware corporation ("Fibers"), STERLING CHEMICALS ENERGY, INC., a Delaware
corporation ("Energy"), and STERLING CHEMICALS INTERNATIONAL, INC., a Delaware
corporation (together with the Company, Canada, Pulp US, Pulp, Fibers and
Energy, collectively, the "Borrowers"), the several Lenders (as such term is
defined in the hereinafter described Credit Agreement) parties to this
Amendment, and THE CIT GROUP/BUSINESS CREDIT, INC., as Administrative Agent for
the Lenders (in such capacity, the "Administrative Agent").
RECITALS:
A. The Borrowers are parties to a Revolving Credit Agreement dated as
of July 19, 2001 (as amended by the First Amendment to Revolving Credit
Agreement and Revolver Intercreditor Agreement dated as of August 17, 2001, the
Second Amendment to Revolving Credit Agreement and Limited Waiver dated as of
August 29, 2001, the Third Amendment to Revolving Credit Agreement and Limited
Waiver dated as of September 7, 2001, and as the same may be further amended,
modified, restated, supplemented, renewed, extended, increased, rearranged
and/or substituted from time to time, the "Credit Agreement") among the
Borrowers, the Administrative Agent, and the several Lenders from time to time
parties thereto. Capitalized terms used and not otherwise defined herein shall
have the meanings ascribed to them in the Credit Agreement.
B. The Borrowers have requested that the Lenders amend the Credit
Agreement as hereinafter set forth.
C. The Lenders parties to this Amendment (which Lenders constitute the
Lenders required to effect the amendments intended hereby) are willing to so
amend the Credit Agreement, subject to the performance and observance in full of
each of the covenants, terms and conditions, and in reliance upon all of the
representations and warranties of the Borrowers, set forth herein.
NOW, THEREFORE, in consideration of the premises and the covenants,
terms, conditions, representations and warranties herein contained, the parties
hereto agree hereby as follows:
SECTION 1. AMENDMENTS. Subject to the covenants, terms and conditions
set forth herein and in reliance upon the representations and warranties herein
contained, the Borrowers and the several Lenders parties to this Amendment
(which Lenders constitute the Lenders required to
effect the following amendments) hereby agree to amend the Credit Agreement and
the Revolver Intercreditor Agreement as set forth below in this Section 1, in
each case effective as of the Amendment Effective Date (as hereinafter defined).
(a) ADDITION OF DEFINITIONS TO THE CREDIT AGREEMENT. Section 1.1 of the
Credit Agreement is amended by inserting the following definitions in the
appropriate alphabetical position therein:
"Appraiser" is defined in Section 5.2.3.
"Excess EBITDA" is defined in Section 7.2.7.
"Qualified Financial Forecast" is defined in Section 5.2.3.
(b) AMENDMENTS TO CERTAIN CREDIT AGREEMENT DEFINITIONS. Section 1.1 of
the Credit Agreement is amended by deleting the existing definitions of the
terms described in this Section 1(a) below in their entirety and inserting the
following definitions in lieu thereof:
"Borrowing Base Amount" means, at any time, an amount equal to
the sum of (without duplication) (a) 85% of Eligible Accounts; plus (b)
on and after the date which is the later to occur of (i) the date of
entry of the Priming Order and (ii) the date the Borrowers have fully
complied with the proviso to clause (b) of Section 5.2.3, the product
of (A) the lesser of (x) $10,000,000 and (y) 33% of Generator
Receivables multiplied by (B) a fraction the numerator of which is the
excess, if any, of $40,000,000 over the aggregate amount of any
reductions in the Current Assets Loan Commitment Amount pursuant to
clause (b) of Section 3.1.2 as a result of Dispositions of Fixed Assets
Collateral and the denominator of which is $40,000,000; plus (c) 65% of
Eligible Inventory; provided, however, that the amount available
pursuant to clause (c) of this definition shall not at any time exceed
50% of the Current Assets Loan Commitment Amount at such time. The
Administrative Agent shall have the right to review computations of the
Borrowing Base Amount and if, in its reasonable judgment, such
computations have not been computed in accordance with the terms of
this Agreement, the Administrative Agent shall have the right to
correct such errors.
"Current Assets" means all of the assets of the Borrowers
other than the Fixed Assets Collateral; provided, however, except to
the extent set forth in paragraph H of the Final Order, Current Assets
shall not include, and, except to the extent set forth in paragraph H
of the Final Order, the Liens granted to the Administrative Agent for
the benefit of the Lenders shall not extend to, any causes of action
arising under Chapter 5 of the Bankruptcy Code or any proceeds thereof.
"Current Assets Obligations" means all obligations of every
kind and nature, including without limitation, principal, fees,
interest (including interest which accrues after or would accrue but
for the commencement of any case, proceeding or other action relating
to the bankruptcy, insolvency or reorganization of the Borrowers),
expenses, indemnities and all other sums, monetary or otherwise,
whether absolute or contingent, matured or
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unmatured, of the Borrowers and each other Obligor arising under, in
connection with or relating to the Current Assets Loans, the Current
Assets Loan Commitment, any Current Assets Security Document or any
other Loan Document which secures or guarantees such obligations
(including obligations under a Rate Protection Agreement where the
counterparty is a Current Assets Lender or its Affiliate), in each
case, to the extent such obligations are owed to any Current Assets
Secured Party.
"Final Order" means an order or judgment of the Bankruptcy
Court after a final hearing pursuant to Section 364 of the Bankruptcy
Code and Fed. R. Bankr. P. 4001, approving the transactions
contemplated by the Loan Documents in form and substance acceptable to
Lenders and the Administrative Agent, in their sole discretion,
including (i) a finding in favor of the Administrative Agent and the
Lenders pursuant to 11 U.S.C. Section 364(e), (ii) the grant of a
Superpriority Claim in favor of the Administrative Agent and the
Lenders with respect to all of the Obligations, and (iii) granting
Liens in the Current Assets Collateral and the Fixed Assets Collateral
securing the Obligations as set forth in Section 7.1.8 and the other
Loan Documents; and which order or judgment of the Bankruptcy Court has
not been reversed, stayed or otherwise rendered ineffective or modified
in any manner (except as may be provided in the Priming Order), and if
such order is the subject of a pending appeal in any respect, neither
the making of any Credit Extensions, nor the granting of Superpriority
Claim status with respect to the Obligations, nor the granting of the
Liens described hereinabove, nor the performance by any of the
Borrowers of any of their obligations under this Agreement or any other
Loan Document or under any other instrument or agreement referred to in
this Agreement shall be the subject of a presently effective stay
pending appeal.
"Fixed Assets Obligations" means all obligations of every kind
and nature, including without limitation, principal, fees, interest
(including interest which accrues after or would accrue but for the
commencement of any case, proceeding or other action relating to the
bankruptcy, insolvency or reorganization of the Borrowers), expenses,
indemnities and all other sums, monetary or otherwise, whether absolute
or contingent, matured or unmatured, of the Borrowers and each other
Obligor arising under, in connection with or relating to the Fixed
Assets Loans, the Fixed Assets Loan Commitment, the Fixed Assets
Security Documents or any other Loan Document which secures or
guarantees such obligations (including obligations under a Rate
Protection Agreement where the counterparty is a Fixed Assets Lender or
its Affiliate), in each case, to the extent such obligations are owed
to any Fixed Assets Secured Party.
"Minimum Excess Availability" means, at any time (a) prior to
the date which is the date of entry of the Priming Order, $12,000,000,
plus the amount of any Availability Reserve (as adjusted from time to
time pursuant to the terms of the definition thereof and/or clause (e)
of Section 2.7) and (b) on and after the date of entry of the Priming
Order, the amount of any Availability Reserve (as adjusted from time to
time pursuant to the terms of the definition thereof and/or clause (e)
of Section 2.7), plus, for all purposes of this Agreement other than
Section 7.2.21, the sum of (x) $6,000,000 plus (y) 15% of the aggregate
amount of any reductions in the Current Assets Loan Commitment Amount
pursuant to clause (b) of Section 3.1.2 as a result of Dispositions of
Fixed Assets Collateral.
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"Priming Lien" means a security interest in and Lien on the
Fixed Assets Collateral (other than the Capital Securities of the
Company) granted, or to be granted, to the Current Assets Secured
Parties pursuant to the Priming Order to secure up to $40,000,000 in
Current Assets Obligations, which Lien and security interest is (or
will be upon entry of the Priming Order) a first-priority security
interest in and Lien on the Fixed Assets Collateral (other than the
Capital Securities of the Company), subject to no other prior security
interests or Liens other than Existing Leases and the Priority Liens
described in clause (b)(ii)(B)(y) and clause (c) of the definition
thereof; provided that the Current Assets Obligations secured by the
Priming Lien shall not exceed $40,000,000 in the aggregate, less the
aggregate amount of all permanent reductions made from time to time to
the Current Assets Loan Commitment Amount pursuant to Section 3.1.2(b).
"Priming Order" means an order or judgment of the Bankruptcy
Court after a final hearing pursuant to Section 364 of the Bankruptcy
Code and Fed. R. Bankr. P. 4001, in form and substance acceptable to
Lenders and the Administrative Agent, in their sole discretion, which
grants the Priming Lien and which order or judgment of the Bankruptcy
Court has not been reversed, stayed or otherwise rendered ineffective
or modified in any manner, and if such order is the subject of a
pending appeal in any respect, neither the making of any Credit
Extensions, nor the granting of Superpriority Claim status with respect
to the Obligations, nor the granting of the Priming Lien described
hereinabove, nor the performance by any of the Borrowers of any of
their obligations under this Agreement or any other Loan Document or
under any other instrument or agreement referred to in this Agreement
shall be the subject of a presently effective stay pending appeal.
"Priority Liens" means (a) with respect to Fixed Assets
Obligations, (i) the Liens on the Current Assets Collateral securing
the Current Assets Obligations and, after the date of entry of the
Priming Order, the Priming Lien on the Fixed Assets Collateral (other
than the Capital Securities of the Company) and (ii) the Lien on 65% of
the Capital Securities of the Foreign Restricted Subsidiaries securing
the Senior Secured Notes; (b) with respect to Current Assets
Obligations, (i) for the period prior to (but not on or after) the date
of entry of the Priming Order, the Liens on (A) the Fixed Assets of the
Borrowers and the Capital Securities of the Borrowers (other than the
Company) and the Subsidiaries (other than Unrestricted Subsidiaries)
securing the Fixed Assets Obligations and the Senior Secured Notes, and
(B) the Capital Securities of the Company securing the Fixed Assets
Obligations and the Senior Secured Discount Notes, and (ii) on and
after the date of entry of the Priming Order, (A) with respect to any
Current Assets Obligations in excess of the amount of Current Assets
Obligations secured by the Priming Lien (but in all cases excluding the
amount of Current Assets Obligations secured by the Priming Lien), the
Liens on (x) the Fixed Assets of the Borrowers and the Capital
Securities of the Borrowers (other than the Company) and the
Subsidiaries (other than Unrestricted Subsidiaries) securing the Fixed
Assets Obligations and the Senior Secured Notes and (y) the Capital
Securities of the Company securing the Fixed Assets Obligations and the
Senior Secured Discount Notes and (B) with respect to any Current
Assets Obligations secured by the Priming Lien, the Liens on (x) the
Capital Securities of the Company securing the Fixed Assets Obligations
and the Senior Secured Discount Notes and (y) 65% of the Capital
Securities of the Foreign Restricted Subsidiaries securing the Senior
Secured Notes; and (c) with respect to the
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Obligations, the Lien granted under the agreement with BP Chemicals,
Inc. described in clause (b), Part 2, Item 7.2.3(c) of the Disclosure
Schedule.
"Superpriority Claim" means, in relation to any Borrower, a
claim against such Borrower in such Borrower's Case which is a
superpriority administrative expense claim authorized and established
by the Bankruptcy Court pursuant to, and having the status prescribed
by, Sections 364(c) and 507(b) of the Bankruptcy Code and any and all
statutory provisions cited therein and having priority over any or all
administrative expenses of the kind specified in Sections 503(b),
507(b) and 546(c) of the Bankruptcy Code; provided, however, that,
except to the extent set forth in paragraph H of the Final Order, the
Superpriority Claim of the Administrative Agent and the Lenders shall
not extend to any causes of action arising under Chapter 5 of the
Bankruptcy Code or any proceeds thereof.
"Trustee" means The Bank of New York (assignee of Xxxxxx Trust
Company of New York), as trustee under the Senior Secured Note
Indenture.
(c) AMENDMENT TO SECTION 3.1.1 OF THE CREDIT AGREEMENT. Clause (f) of
Section 3.1.1 of the Credit Agreement is amended by deleting the reference to
"clause (b)(iii) of Section 3.1.2" in clause (ii) and inserting a reference to
"clause (b)(iv) of Section 3.1.2" in lieu thereof.
(d) AMENDMENT TO SECTION 3.1.2 OF THE CREDIT AGREEMENT. Clause (b) is
deleted from Section 3.1.2. of the Credit Agreement and the following is
inserted in lieu thereof:
"(b) Subject to any applicable terms of the Senior Debt
Intercreditor Agreement dated as of July 23, 1999 between the Indenture
Trustee, on behalf of itself and the holders of the Senior Secured
Notes, and the CIT Group/Business Credit, Inc., as administrative agent
on behalf of the parties described therein, each prepayment of
Obligations pursuant to clause (d) and clause (f)(ii) of Section 3.1.1
shall be applied (i) in the case of a Disposition of Fixed Assets
Collateral other than the Capital Securities of the Company (A) prior
to the date of entry of the Priming Order, first, to a mandatory
prepayment of the outstanding Fixed Assets Obligations until all
outstanding Fixed Assets Obligations have been repaid in full, and,
second, to a mandatory prepayment of the outstanding Current Assets
Obligations until all outstanding Current Assets Obligations have been
repaid in full, and (B) on and after the date of entry of the Priming
Order, first, to a mandatory prepayment of outstanding Current Assets
Obligations until an aggregate amount of $40,000,000 of Current Assets
Obligations have been repaid, second, to a mandatory prepayment of the
outstanding Fixed Assets Obligations until all outstanding Fixed Assets
Obligations have been repaid in full, and, third, to a mandatory
prepayment of the outstanding Current Assets Obligations until all
outstanding Current Assets Obligations have been repaid in full; (ii)
in the case of a Disposition of Capital Securities of the Company,
first, to a mandatory prepayment of the outstanding Fixed Assets
Obligations until all outstanding Fixed Assets Obligations have been
repaid in full, and, second, to a mandatory prepayment of the
outstanding Current Assets Obligations until all outstanding Current
Assets Obligations have been
5
repaid in full; (iii) in the case of a Disposition of Current Assets
(other than Dispositions of Capital Securities of Unrestricted
Subsidiaries), first, to a mandatory prepayment of the outstanding
Current Assets Obligations until all outstanding Current Assets
Obligations have been repaid in full (or, with respect to Letters of
Credit, Cash Collateralized) and, second, to a mandatory prepayment of
the outstanding Fixed Assets Obligations until all outstanding Fixed
Assets Obligations have been repaid in full; and (iv) in the case of a
Disposition of Capital Securities of Unrestricted Subsidiaries or the
receipt of Net Equity Proceeds of the type described in clause (b) of
the definition thereof, to the Fixed Assets Obligations and the Current
Assets Obligations in the order designated by the Company upon receipt
of same by any Obligor, or if no such designation is received by the
Administrative Agent prior to or upon receipt of such proceeds, then to
the Obligations as determined by the Administrative Agent. In the case
of any Disposition of Fixed Assets Collateral prior to the date of the
entry of the Priming Order or at any time with respect to a Disposition
of Capital Securities of the Company, the Fixed Assets Loan Commitment
Amount shall be automatically and permanently reduced by the aggregate
amount of the Net Disposition Proceeds; provided that so long as no
Default or Event of Default then exists, no such reduction shall occur
with respect to Net Disposition Proceeds from a casualty or
condemnation of Fixed Assets which are permitted to be used by the
Borrowers in connection with the restoration or replacement of the
affected assets in accordance with Section 2.3 of the Mortgages. In the
case of any Disposition of Fixed Assets Collateral other than the
Capital Securities of the Company on or after the date of the entry of
the Priming Order, (1) the Current Assets Loan Commitment Amount shall
be automatically and permanently reduced by an amount equal to the
lesser of (x) the aggregate amount of such Net Disposition Proceeds and
(y) an amount that, when added to all other prior reductions of the
Current Assets Loan Commitment Amount pursuant to this clause (1),
equals $40,000,000, and (2) the Fixed Assets Loan Commitment Amount
shall be automatically and permanently reduced by an amount equal to
the excess, if any, of the aggregate amount of such Net Disposition
Proceeds over the aggregate amount of any reduction in the Current
Assets Loan Commitment Amount pursuant to the foregoing clause (1);
provided in each case that so long as no Default or Event of Default
then exists, no such reduction shall occur with respect to Net
Disposition Proceeds from a casualty or condemnation of Fixed Assets
which are permitted to be used by the Borrowers in connection with the
restoration or replacement of the affected assets in accordance with
Section 2.3 of the Mortgages. Upon the indefeasible payment in cash of
$40,000,000 in the aggregate of Current Assets Obligations and a
permanent reduction of the Current Assets Loan Commitment Amount by
$40,000,000 in the aggregate pursuant to the immediately preceding
sentence, the Priming Lien shall automatically terminate and be
released without the necessity of further action by the parties and the
Administrative Agent shall execute and deliver such documentation as is
reasonably requested by the Borrowers in order to confirm that such
termination and release of the Priming Lien has occurred."
(e) AMENDMENT TO SECTION 5.2.3 OF THE CREDIT AGREEMENT. Section 5.2.3.
of the Credit Agreement is deleted in its entirety and the following is inserted
in lieu thereof:
"5.2.3. Financing Order. The Interim Order shall be in full
force and effect and shall not have been stayed, reversed, modified or
amended in any respect (other than by the Final Order and Priming Order
as provided therein and hereinbelow); provided that no Lender shall
have any obligation to make any Credit Extension if the making of such
Credit Extension would cause the aggregate amount of all Credit
Extensions then outstanding,
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either separately or together, to exceed the lesser of (x) $155,000,000
and (y) the amount thereof which was authorized by the Bankruptcy Court
in the Interim Order unless:
(a) the Administrative Agent and each of the Lenders
shall have received a certified copy (or other evidence
satisfactory to the Administrative Agent) of the Final Order
which (i) as entered, shall be acceptable in form and
substance to the Administrative Agent, (ii) shall have been
entered into no later than September 14, 2001, and (iii) shall
then be in full force and effect, and shall not have been
stayed, reversed, modified or amended in any respect; provided
in such case that no Lender shall have any obligation to make
any Credit Extension if the making of any such Credit
Extension would cause the aggregate amount of all Credit
Extensions then outstanding, either separately or together, to
exceed $155,000,000; or
(b) the Administrative Agent and each of the Lenders
shall have received a certified copy (or other evidence
satisfactory to the Administrative Agent) of the Priming Order
which (i) as entered, shall be acceptable in form and
substance to the Administrative Agent, and (ii) shall then be
in full force and effect, and shall not have been stayed,
reversed, modified or amended in any respect; provided that,
notwithstanding the foregoing, if the making of any Credit
Extension would cause the aggregate amount of all Credit
Extensions then outstanding to exceed $170,000,000, no Lender
shall have any obligation to make such Credit Extension until
the Borrowers shall have (A) previously submitted to the
Administrative Agent (i) a Qualified Financial Forecast,
together with a written report from the Appraiser addressed to
the Administrative Agent and the Lenders stating that it has
reviewed such Qualified Financial Forecast and performed the
scope of work set forth in its engagement letter with the
Administrative Agent and that, in the Appraiser's opinion, the
Borrowers' Qualified Financial Forecast, including the
Borrowers' outlook for acrylonitrile and styrene, the
assumptions and key factors contained in such Qualified
Financial Forecast (including the reliability of the sources
referred to in such Qualified Financial Forecast for such
outlook, assumptions and key factors) and the working capital
levels, margins, operating cash flow, and EBITDA reflected
therein are all reasonable, and (ii) the most recent set of
Projections to be delivered to the Lenders pursuant to Section
7.1.1.(o), demonstrating pro forma compliance with Section
7.2.7 (at the levels that would be in effect assuming this
proviso were satisfied) and Section 7.2.4 throughout the next
12 month period, and (B) the Borrowers have otherwise complied
with the other provisions of this Section 5.2. To the extent
that the Borrowers are unable to satisfy the requirements in
clause (A) (i) of the proviso to the immediately preceding
sentence with respect to the Qualified Financial Forecast most
recently submitted to the Administrative Agent, the Borrowers
may from time to time revise and/or replace such Qualified
Financial Forecast and re-submit the same to the
Administrative Agent for review by the Appraiser in order to
attempt to satisfy such proviso; provided that (x) any
material revisions to any such Qualified Financial Forecast
and all replacement Qualified Financial Forecasts must be in
form and substance acceptable to the Approving Lenders, and
(y) all such revisions, whether or not material, and any
replacement Qualified Financial Forecasts must be acceptable
in form and substance to the
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Administrative Agent. All costs and expenses of the Appraiser
shall be paid by the Borrowers as provided in the engagement
letter among the Appraiser, the Administrative Agent and the
Company dated as of September 14, 2002, (and any subsequent
engagement letters).
As used in the foregoing paragraph, (a) "Appraiser" means
Nexant, Inc. or such other independent appraiser of national
standing as may be retained by the Administrative Agent for
the benefit of the Lenders (and consented to by the Company,
which consent shall not be unreasonably withheld or delayed)
and (b) "Qualified Financial Forecast" means the consolidated
operating and financial plan of the Company, including a
restart of the acrylonitrile production and a turnaround of
the styrene facility at the Texas City, Texas plant attached
hereto as Exhibit Q, as the same may be revised and/or
replaced from time to time pursuant to the penultimate
sentence of the foregoing paragraph."
(f) AMENDMENT TO SECTION 7.2.7 OF THE CREDIT AGREEMENT. Section 7.2.7.
of the Credit Agreement is deleted in its entirety and the following is inserted
in lieu thereof:
"7.2.7 Monthly Minimum EBITDA. The Borrowers will not permit
EBITDA for the Borrowers to be less than (i.e., be a greater negative
number than those set forth below) the following amounts at the end of
each of the calendar months set forth below opposite such amounts:
Prior to the date that the Borrowers have fully satisfied the
proviso to clause (b) of Section 5.2.3
Calendar Month Minimum EBITDA
-------------- --------------
Filing Date through and including August 31, 2001 (7,600,000)
September 2001 (3,300,000)
October 2001 (3,900,000)
November 2001 (3,000,000)
December 2001 (3,400,000)
January 2002 (2,500,000)
February 2002 (4,200,000)
March 2002 (8,300,000)
April 2002 (1,000,000)
May 2002 1,600,000
June 2002 2,800,000
Each calendar month thereafter 5,000,000
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Effective on and after the date that the Borrowers have fully
satisfied the proviso to clause (b) of Section 5.2.3
Calendar Month Minimum EBITDA
-------------- --------------
Filing Date through and including August 31, 2001 (7,600,000)
September 2001 (3,300,000)
October 2001 (5,300,000)
November 2001 (5,100,000)
December 2001 (6,300,000)
January 2002 (1,900,000)
February 2002 (1,650,000)
March 2002 (2,200,000)
April 2002 800,000
May 2002 1,600,000
June 2002 1,000,000
July 2002 4,700,000
August 2002 5,000,000
September 2002 5,000,000
October 2002 and each month thereafter 6,000,000
provided, however, that for each calendar month set forth above that
the Borrowers' EBITDA exceeds the minimum EBITDA amount set forth above
opposite such calendar month (i.e., reflects a lower negative number or
exceeds a positive number), such excess (the "Excess EBITDA") shall be
carried forward on a cumulative basis to the next calendar month's
calculation of minimum EBITDA of the Borrowers, provided, further, that
Excess EBITDA from any calendar month in a given Fiscal Year may only
be carried forward to a calendar month in the same Fiscal Year."
(g) AMENDMENT TO SECTION 8.2 OF CREDIT AGREEMENT. Section 8.2 of the
Credit Agreement is amended by deleting the phrase "five (5) Business Days'
notice" and inserting the phrase "seven (7) Business Days' notice" in lieu
thereof.
(h) ADDITION OF EXHIBIT Q TO THE CREDIT AGREEMENT. A new Exhibit Q is
added to the Credit Agreement in the form attached as Exhibit Q hereto.
(i) AMENDMENTS TO SECTION 3.3 OF THE REVOLVER INTERCREDITOR AGREEMENT.
(i) Paragraph (a) of Section 3.3 of the Revolver Intercreditor
Agreement is deleted in its entirety and the following is inserted in lieu
thereof:
"(a) The Administrative Agent (in its capacity as
secured party for and on behalf of the Current Assets Lenders) shall
have the sole and exclusive right to sell, transfer or otherwise
dispose of (i) the Current Assets Collateral and (ii) after the date
that the Priming Order has been entered, the Fixed Assets Collateral
(other than the Capital Securities of the Company) up to the amount of
the Current Assets Obligations which are secured by the Priming Lien,
in each case in any manner deemed necessary or appropriate by it
without regard to the security interest or Liens of the Fixed Assets
Secured Parties and without the Fixed Assets Secured Parties' consent.
Simultaneously with the sale, transfer or other disposition of all or
any part of the Collateral described in clauses (i) and (ii) above by
the Administrative Agent (in its capacity as secured party for and on
behalf of the Current Assets Lenders), the Administrative Agent shall
release or otherwise terminate the security
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interests in and Liens on all of such Current Assets Collateral and
such Fixed Assets Collateral which is held by the Fixed Assets Secured
Parties."
(ii) Paragraph (b) of Section 3.3 of the Revolver
Intercreditor Agreement is amended by deleting the reference to "Section 3.3" in
the first line of such paragraph and inserting the reference "Section 3.3(a)" in
lieu thereof.
(iii) Paragraph (d) of Section 3.3 of the Revolver
Intercreditor Agreement is amended by deleting the reference to "Section
3.3(a)(ii)" in the clause (iii) of such paragraph and inserting the reference
"Section 3.3(a)" in lieu thereof.
(iv) Paragraph (h) of Section 3.3 of the Revolver
Intercreditor Agreement is deleted in its entirety and the following is inserted
in lieu thereof:
"(h) The Current Assets Secured Parties understand
and agree that, so long as any Fixed Assets Obligations shall not have
been paid in cash in full and until all Fixed Assets Commitments shall
have been fully and permanently terminated, the Administrative Agent
shall, with respect to the Fixed Assets Collateral, accept directions
only from the Fixed Assets Secured Parties; provided that after the
date that the Priming Order has been entered, the Administrative agent
shall, with respect to the Fixed Assets Collateral (other than Capital
Securities of the Company) accept directions only from the Current
Assets Secured Parties until either (i) the Priming Lien is no longer
in effect and outstanding, or (ii) the Current Assets Loan Commitment
Amount has been reduced pursuant to Section 3.1.2(b) of the Credit
Agreement by $40,000,000 in the aggregate."
(j) AMENDMENTS TO SECTION 3.4 OF THE REVOLVER INTERCREDITOR AGREEMENT.
(i) Paragraph (c) of Section 3.4 of the Revolver Intercreditor
Agreement is deleted in its entirety and the following is inserted in lieu
thereof:
"(c) Each Fixed Assets Lender agrees that if it
receives (i) Current Assets Liquidation Proceeds or (ii) after the date
of entry of the Priming Order, Fixed Assets Liquidation Proceeds to
which it is not entitled pursuant to the terms of this Agreement, then
such Fixed Assets Lender shall promptly remit such proceeds to the
Administrative Agent for application in accordance with clause (a) of
this Section 3.4."
(ii) Paragraph (d) of Section 3.4 of the Revolver
Intercreditor Agreement is deleted in its entirety and the following is
inserted in lieu thereof:
"(d) Each Current Assets Lender agrees that if it
receives Fixed Assets Liquidation Proceeds to which it is not entitled
pursuant to the terms of this Agreement, then such Current Assets
Lender shall promptly remit such proceeds to the Administrative Agent
for application in accordance with clause (b) of this Section 3.4."
(iii) A new Paragraph (e) is added to Section 3.4 of the
Revolver Intercreditor Agreement that reads as follows:
10
"(e) For purposes of this Section, the terms "Fixed
Assets Liquidation Proceeds" and "Current Assets Proceeds" shall
include proceeds of Fixed Assets Collateral or Current Assets
Collateral, as applicable, received by any party hereto from any source
whatsoever, including by means of setoff."
(k) AMENDMENT TO SECTION 4.2 OF THE REVOLVER INTERCREDITOR AGREEMENT.
Paragraph (a) of Section 4.2 of the Revolver Intercreditor Agreement is deleted
in its entirety and the following is inserted in lieu thereof:
"(a) Notwithstanding anything to the contrary herein, with
respect to policies which insure (i) the Current Assets Collateral or,
(ii) after the date of entry of the Priming Order, the Fixed Assets
Collateral subject to the Priming Lien, if, pursuant to the Applicable
Agreements, the Company is required to obtain satisfactory loss payable
endorsements naming the Current Assets Secured Parties and the Fixed
Assets Secured Parties, as their interests may appear, as loss payees,
or with such other designation as the parties hereto may agree, the
Administrative Agent (in its capacity as secured party for and on
behalf of the Current Assets Lenders and the Fixed Assets Lenders)
shall, subject to the Administrative Agent's rights under the
Applicable Agreements, have the sole exclusive right, as against the
Fixed Assets Secured Parties, to effect settlement of such insurance
policy in the event of any loss to any Current Assets Collateral). All
proceeds of such policy shall be paid to the Administrative Agent and
apply the proceeds of such policy in accordance with clause (a) of
Section 3.4."
SECTION 2. CONDITIONS PRECEDENT. The parties hereto agree that this
Amendment and the amendments to the Credit Agreement and the Revolver
Intercreditor Agreement contained herein shall not be effective until the
satisfaction of each of the following conditions precedent:
(a) EXECUTION AND DELIVERY OF THIS AMENDMENT. The Administrative Agent
shall have received a copy of this Amendment executed and delivered by each of
the applicable Obligors and by the Approving Lenders.
(b) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties made in this Amendment shall be true and correct on and as of the
Amendment Effective Date as if made on and as of such date, both before and
after giving effect to this Amendment (except to the extent such representations
and warranties relate expressly to an earlier date, which representations and
warranties shall have been true and correct as of such earlier date).
(c) PAYMENT OF EXPENSES. The Borrowers shall have paid and the
Administrative Agent shall have received all costs and expenses of the
Administrative Agent in connection with the preparation, reproduction,
execution, and delivery of this Amendment and any other documents prepared in
connection herewith, including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel for the Administrative Agent.
11
(d) DELIVERY OF DOCUMENTS. The Administrative Agent shall have received
certified copies any documents or instruments reasonably requested by the
Administrative Agent, each in form and substance reasonably satisfactory to the
Administrative Agent.
(e) APPROVAL BY BANKRUPTCY COURT. The Administrative Agent shall have
received a copy (or such other evidence satisfactory to Administrative Agent) of
the Priming Order which (i) as entered, shall be acceptable in form and
substance to the Administrative Agent and the Lenders, (ii) authorizes the
Borrowers to execute, deliver and to perform their respective obligations under
this Amendment and grants the Priming Lien, (iii) shall have been entered upon a
motion of the Borrowers satisfactory in form and substance to the Administrative
Agent, (iv) shall be in full force and effect, and (v) shall not have been
stayed, reversed, modified or amended in any respect.
SECTION 3. REPRESENTATIONS AND WARRANTIES. To induce the Administrative
Agent and the several Lenders parties hereto to enter into this Amendment, each
of the Borrowers represents and warrants to the Administrative Agent and the
Lenders as follows:
(a) AUTHORIZATION; NO CONTRAVENTION. The execution, delivery and
performance by the applicable Obligors of this Amendment have been duly
authorized by all necessary partnership, corporate or limited liability company
action, as applicable, and do not and will not (i) contravene the terms of any
Organic Documents of any Obligor, (ii) conflict with or result in any breach or
contravention of, or (except as contemplated by the Loan Documents or as
otherwise permitted by the Credit Agreement) the creation of any Lien under, any
material contract or indenture entered into or assumed after the Filing Date
that is binding on or affects any Obligor or, upon entry of the Priming Order,
any order, injunction, writ or decree of any Governmental Authority to which any
Obligor is a party or its property is subject, or (iii) upon entry of the
Priming Order, violate any applicable law binding on or affecting any Obligor.
(b) GOVERNMENTAL AUTHORIZATION. Upon entry of the Priming Order, no
approval, consent, exemption, authorization or other action by, or notice to, or
filing with or approvals required under state blue sky securities laws or by any
Governmental Authority will be necessary or required in connection with the
execution, delivery, performance or enforcement of this Amendment.
(c) NO DEFAULT. No Default or Event of Default exists under any of the
Loan Documents. No Obligor is in default under or with respect to its Organic
Documents. The execution, delivery and performance of this Amendment shall not
result in any default under any material contract or indenture entered into or
assumed on or after the Filing Date that is binding or affects any Obligor.
(d) BINDING EFFECT. Upon entry of the Priming Order, this Amendment and
the Credit Agreement as amended hereby constitute the legal, valid and binding
obligations of the Obligors that are parties thereto, enforceable against such
Obligors in accordance with their respective terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, or similar laws affecting the
enforcement of creditors' rights generally or by equitable principles of general
applicability.
12
(e) REPRESENTATIONS AND WARRANTIES. The representations and warranties
set forth in the Credit Agreement and the other Loan Documents are true and
correct in all material respects on and as of the Amendment Effective Date, both
before and after giving effect to the amendments contemplated in this Amendment,
as if such representations and warranties were being made on and as of the
Amendment Effective Date (except to the extent such representations and
warranties relate expressly to an earlier date, which representations and
warranties are true and correct as of such earlier date).
SECTION 4. MISCELLANEOUS
(a) RATIFICATION AND CONFIRMATION OF LOAN DOCUMENTS. Except for the
specific amendments expressly set forth in this Amendment, the terms,
provisions, conditions and covenants of the Credit Agreement and the other Loan
Documents remain in full force and effect and are hereby ratified and confirmed,
and the execution, delivery and performance of this Amendment shall not in any
manner operate as a waiver of, consent to or amendment of any other term,
provision, condition or covenant of the Credit Agreement or any other Loan
Document.
(b) FEES AND EXPENSES. The Borrowers jointly and severally agree to pay
on demand all reasonable costs and expenses of the Administrative Agent in
connection with the preparation, reproduction, execution, and delivery of this
Amendment and any other documents prepared in connection herewith, including,
without limitation, the reasonable fees and out-of-pocket expenses of counsel
for the Administrative Agent.
(c) HEADINGS. Section and subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
(d) APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.
(e) COUNTERPARTS AND AMENDMENT EFFECTIVE DATE. This Amendment may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document. This Amendment shall become
effective when each of the conditions precedent set forth in Section 2 of this
Amendment have been satisfied (the "Amendment Effective Date").
(f) AFFIRMATION OF OBLIGATIONS. Notwithstanding that such consent is
not required thereunder, the undersigned Obligors hereby consent to the
execution and delivery of this Amendment by the parties hereto and reaffirm
their respective obligations under each of the Loan Documents to which such
Obligors are parties.
13
(g) CONFIRMATION OF LOAN DOCUMENTS AND LIENS. As a material inducement
to the Lenders to amend the Credit Agreement, the Obligors that are parties
hereto hereby (i) acknowledge and confirm the continuing existence, validity and
effectiveness of the Loan Documents to which they are parties, including,
without limitation the Security Documents, and the Liens granted under the
Security Documents, (ii) agrees that, except as otherwise expressly provided in
this Amendment, the execution, delivery and performance of this Amendment shall
not in any way release, diminish, impair, reduce or otherwise affect such Loan
Documents and Liens and (iii) acknowledges and agrees that, except as otherwise
expressly provided for in this Amendment with respect to the Priming Order, the
Liens granted under the Security Documents secure payment of the Obligations
under the Loan Documents in the same priority as on the date such Liens were
created and perfected, and the performance and observance by the Borrowers and
the other Obligors of the covenants, agreements and conditions to be performed
and observed by each under the Credit Agreement, as amended hereby.
(h) FINAL AGREEMENT. THIS AMENDMENT, TOGETHER WITH THE CREDIT AGREEMENT
AND OTHER LOAN DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGES FOLLOW]
14
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their proper and duly authorized officers
effective as of the Amendment Effective Date.
OBLIGORS:
STERLING CHEMICALS, INC.
By:
--------------------------------------
Title:
STERLING CANADA, INC.
By:
--------------------------------------
Title:
STERLING PULP CHEMICALS US, INC.
By:
--------------------------------------
Title:
STERLING PULP CHEMICALS, INC.
By:
--------------------------------------
Title:
STERLING FIBERS, INC.
By:
--------------------------------------
Title:
STERLING CHEMICALS ENERGY, INC.
By:
--------------------------------------
Title:
STERLING CHEMICALS
INTERNATIONAL, INC.
By:
--------------------------------------
Title:
STERLING CHEMICALS HOLDINGS, INC.
By:
--------------------------------------
Title:
ADMINISTRATIVE AGENT:
THE CIT GROUP/BUSINESS CREDIT,
INC., as Administrative Agent
By:
--------------------------------------
Title:
LENDERS:
THE CIT GROUP/BUSINESS CREDIT, INC.
By:
--------------------------------------
Title:
IBJ WHITEHALL BUSINESS CREDIT
CORPORATION
By:
--------------------------------------
Title:
FLEET CAPITAL CORPORATION
By:
--------------------------------------
Title:
TEXTRON FINANCIAL CORP.
By:
--------------------------------------
Title:
TRANSAMERICA BUSINESS CAPITAL CORPORATION
By:
--------------------------------------
Title:
GMAC BUSINESS CREDIT, LLC
By:
--------------------------------------
Title:
THE PROVIDENT BANK
By:
--------------------------------------
Title:
GPSF SECURITIES, INC.
By:
--------------------------------------
Title:
FOOTHILL INCOME TRUST II, L.P.
By:
--------------------------------------
Title:
CONGRESS FINANCIAL CORPORATION
By:
--------------------------------------
Title:
COMERICA BANK
By:
--------------------------------------
Title:
EXHIBIT Q
Qualified Financial Forecast
