AMENDMENT NO. 4 TO LOAN AND SECURITY AGREEMENT
EXHIBIT
10.1
[Execution]
AMENDMENT
NO. 4 TO LOAN AND SECURITY AGREEMENT
AMENDMENT
NO. 4 TO LOAN AND SECURITY AGREEMENT, dated as of April 4, 2005, by and among
ICO Polymers North America, Inc., a New Jersey corporation ("Polymers North
America"), and Bayshore Industrial, L.P. (formerly known as Bayshore Industrial,
Inc.), a Texas limited partnership ("Bayshore L.P.", and together with Polymers
North America, each individually a "Borrower" and collectively, "Borrowers"),
ICO, Inc., a Texas corporation ("Parent"), ICO Polymers, Inc., a Delaware
corporation ("Polymers"), Wedco Technology, Inc., a New Jersey corporation
("Wedco Tech"), Wedco Petrochemical, Inc., a Delaware corporation ("Wedco
Petro"), ICO Technology, Inc., a Delaware corporation ("ICO Tech"), Bayshore
Industrial GP, L.L.C., a Delaware limited liability company ("Bayshore GP LLC")
and Bayshore Industrial LP L.L.C. ("Bayshore LP LLC" and together with Parent,
Polymers, Wedco Tech, Wedco Petro, ICO Tech and Bayshore GP LLC each
individually a "Guarantor" and collectively, "Guarantors") and ICO P&O,
Inc., a Delaware corporation ("P&O"), and ICO Global Services, Inc., a
Delaware corporation ("Global"), and Wachovia Bank, National Association, a
national banking association, as successor by merger to Congress Financial
Corporation (Southwest) ("Lender").
W I T N E S S E T H
:
WHEREAS,
Lender and Borrowers have entered into financing arrangements pursuant to which
Lender may make loans and advances and provide other financial accommodations to
Borrowers as set forth in the Loan and Security Agreement, dated as of April 9,
2002, among Lender, Borrowers, Guarantors, P&O and Global, Amendment No. 1
to Loan and Security Agreement, dated as of September 6, 2002, by and among
Lender, Borrowers, Guarantors, P&O and Global, Amendment No. 2 to Loan and
Security Agreement, dated as of August 26, 2004, by and among Lender, Borrowers,
Guarantors, P&O and Global and Amendment No. 3 to Loan and Security
Agreement, dated as of October 1, 2004, by and among Lender, Borrowers,
Guarantors, P&O and Global (as amended hereby and as the same may hereafter
be further amended, modified, supplemented, extended, renewed, restated or
replaced, the "Loan Agreement", and together with all agreements, documents and
instruments at any time executed and/or delivered in connection therewith or
related thereto, as from time to time amended and supplemented, collectively,
the "Financing Agreements");
WHEREAS,
Borrowers and Guarantors have requested that Lender agrees to certain amendments
to the Loan Agreement and Lender is willing to so agree, subject to the terms
and conditions contained herein; and
WHEREAS,
by this Amendment No. 4, Lender, Borrowers and Guarantors desire and intend to
evidence such amendments.
NOW
THEREFORE, in consideration of the foregoing, the mutual agreements and
covenants contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Definitions.
(a) Additional
Definitions. As used
herein, the following terms shall have the meanings given to them below, and the
Loan Agreement and the other Financing Agreements are hereby amended to include,
in addition to and not in limitation of, the following definitions:
(i) "Amendment
No. 4" shall mean this Amendment No. 4 to Loan and Security Agreement by and
among Lender, Borrowers, Guarantors, P&O and Global, as the same now exists
or may hereafter be amended, modified, supplemented, extended, renewed, restated
or replaced.
(ii) "Eligible
Existing Equipment" shall mean, as to each Borrower, Equipment owned by such
Borrower as of the date of this Amendment No. 4 that is designated from time to
time by a Borrower to Lender in writing as "Eligible Existing Equipment" (and
all of the Equipment included in the appraisal by Dovebid Valuation Services
dated February 18, 2005 is hereby designated by the applicable Borrower as
"Eligible Existing Equipment") and that is acceptable to Lender in all respects.
Such designation by the applicable Borrower shall include Equipment serial
numbers sufficient to identify the Equipment designated, and such acceptance by
Lender shall be in writing specifying such Equipment, if any, that is acceptable
to Lender. In general, Eligible Existing Equipment shall not include, unless
otherwise approved by Lender: (A)
Equipment that is not subject to an appraisal by an appraiser acceptable to
Lender that is in form, scope and methodology acceptable to Lender, addressed to
Lender, and upon which Lender is expressly permitted to rely, (B)
Equipment that is not in good order, repair, running and marketable condition,
(C)
Equipment at premises other than those owned and controlled by such Borrower,
except for Equipment at locations leased by a Borrower if either (1) Lender
shall have received a Collateral Access Agreement duly authorized, executed and
delivered by the owner of such premises in form and substance satisfactory to
Lender, or (2) if
Lender shall not have received such an agreement (or Lender shall determine to
accept a Collateral Access Agreement that does not include all required
provisions or provisions in the form otherwise required by Lender), Lender shall
have, at its option, either (but without duplication for any Reserve established
pursuant to clause (iii) below or reduction in Equipment Purchase Term Loan in
respect of such amounts): (y) established a Reserve with respect to amounts at
any time payable by such Borrower to the owner and lessor of such premises as
Lender shall determine or (z) reduced the amount of the Equipment Term Loan
based on such Eligible Existing Equipment by amounts at any time payable by such
Borrower to the owner and lessor of such premises by an amount equal to the
Reserves that would have been established under clause (y) above; (D)
Equipment subject to a security interest or lien in favor of any person other
than Lender; (E)
Equipment which is not located in the continental United States of America;
(F)
Equipment which is not subject to the first priority, valid and perfected
security interest of Lender; (G) worn
out, obsolete, damaged or defective Equipment
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or
Equipment not used or usable in the ordinary course of such Borrower’s business
as presently conducted; (H) computer
hardware; or (I)
Equipment that is or becomes permanently affixed to land or buildings such that
removal from the land or buildings would cause substantial damage to the item
being removed or to the land or building. As of the date of this Amendment No.
4, the Eligible Existing Equipment includes only the Equipment located in
XxXxxxx, Texas and China, Texas that is subject to the appraisal by Dovebid
Valuation Services dated February 18, 2005 that has been received by Lender
prior to the date of Amendment No. 4. General criteria for Eligible Existing
Equipment may be established and revised from time to time by Lender in good
faith based on an event, condition or other circumstance arising after the date
of Amendment No. 4, or existing on the date of Amendment No. 4 to the extent
Lender has no written notice thereof from such Borrower, which adversely affects
or could reasonably be expected to adversely affect the Equipment in the good
faith determination of Lender.
(iii) "Eligible
New Equipment" shall mean, as to each Borrower, such Equipment owned by such
Borrower which is acquired after the date of Amendment No. 4 designated by a
Borrower to Lender in writing as "Eligible New Equipment" and acceptable to
Lender in all respects. Such designation by the applicable Borrower shall
include Equipment serial numbers sufficient to identify the Equipment
designated, and such acceptance by Lender shall be in writing specifying such
Equipment, if any, that is acceptable to Lender. In general, Eligible New
Equipment shall not include, unless otherwise approved by Lender: (A)
Equipment that is not in good order, repair, running and marketable condition,
(B)
Equipment at premises other than those owned and controlled by such Borrower,
except for Equipment at locations leased by a Borrower if either (but without
duplication for any Reserve established pursuant to clause (ii) above or
reduction in Equipment Term Loans in respect of such amounts):(1) Lender
shall have received a Collateral Access Agreement duly authorized, executed and
delivered by the owner of such premises in form and substance satisfactory to
Lender, or (2) if
Lender shall not have received such an agreement (or Lender shall determine to
accept a Collateral Access Agreement that does not include all required
provisions or provisions in the form otherwise required by Lender), Lender shall
have, at its option, either (y) established a Reserve with respect to amounts at
any time payable by such Borrower to the owner and lessor of such premises as
Lender shall determine or (z) reduced the amount of the Equipment Purchase Term
Loan based on such Eligible New Equipment by amounts at any time payable by such
Borrower to the owner and lessor of such premises by an amount equal to the
Reserves that would have been established under clause (y) above; (C)
Equipment subject to a security interest or lien in favor of any person other
than Lender; (D)
Equipment which is not located in the continental United States of America;
(E)
Equipment which is not subject to the first priority, valid and perfected
security interest of Lender; (F) worn
out, obsolete, damaged or defective Equipment or Equipment not used or usable in
the ordinary course of such Borrower’s business as presently conducted;
(G) computer
hardware; or (H)
Equipment that is or becomes permanently affixed to land or buildings such that
removal from the land or buildings would cause substantial damage to the item
being removed or to the land or building. General criteria for Eligible New
Equipment may be established and revised from time to time by Lender in good
faith based on an event, condition or other circumstance arising after the date
hereof, or existing on the date hereof to the extent Lender has no written
notice thereof
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from such
Borrower, which adversely affects or could reasonably be expected to adversely
affect the Equipment in the good faith determination of Lender.
(iv) "Equipment
Loan Limit" shall mean $5,000,000 as reduced by the amount of payments of
principal required to be made after the date hereof in respect of Term
Loans.
(v) "Equipment
Purchase Term Loans" shall mean the secured term loans made by Lender to a
Borrower after the date of this Amendment No. 4 as provided for in Section 4 of
this Amendment No. 4; such term loans being from time to time referred to herein
individually as an "Equipment Purchase Term Loan".
(vi) "Equipment
Purchase Term Notes" shall mean, collectively, the Equipment Purchase Term Notes
which may at any time after the date of this Amendment No. 4 be issued by any
Borrower to Lender pursuant to Section 4 of this Amendment No. 4 to evidence
Equipment Purchase Term Loans; such notes being from time to time referred to
herein individually as an "Equipment Purchase Term Note".
(vii) "Equipment
Term Loans" shall mean the secured term loans made by or on behalf of Lender to
Bayshore L.P. and Polymers North America on the date of this Amendment No. 4 and
as may be made after the date of this Amendment No. 4 as provided for in Section
3 of Amendment No. 4; such term loans being from time to time referred to herein
individually as an "Equipment Term Loan".
(viii) "Equipment
Term Notes" shall mean, collectively, the Term Promissory Notes issued by
Bayshore L.P. and Polymers North America, respectively, to Lender to evidence
the Equipment Term Loans made pursuant to the second sentence of Section 3(a) of
this Amendment No. 4 and the Equipment Term Notes which may at any time after
the date of this Amendment No. 4 be issued by either of them to Lender pursuant
to Section 3 of Amendment No. 4 to evidence Equipment Term Loans made after the
date of this Amendment No. 4; such notes being from time to time referred to
herein individually as an "Equipment Term Note".
(ix) "Hard
Costs" shall mean, with respect to the purchase by a Borrower of an item of
Eligible New Equipment, the net cash amount actually paid to acquire title to
such item, net of all incentives, trade-in allowances, discounts and rebates,
and exclusive of freight, delivery charges, installation costs and charges,
software costs, charges and fees, warranty costs, taxes, insurance and other
incidental costs or expenses and all indirect costs or expenses of any
kind.
(x) "Net
Orderly Liquidation Value" shall mean, as to any Eligible Existing Equipment, at
any time, the value of such Eligible Existing Equipment, determined on an
orderly liquidation basis, reduced by commissions, fees, costs and expenses
reasonably contemplated in connection with the liquidation thereof, as set forth
in the most recent appraisal received by Lender pursuant to Section 6 of this
Amendment No. 4 as to such Eligible Existing Equipment, in form, scope and
methodology acceptable to Lender and by an appraiser
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acceptable
to Lender, addressed to Lender and upon which Lender is expressly permitted to
rely.
(xi) "Revolving
Loans" shall mean the loans now or hereafter made by Lender to or for the
benefit of a Borrower on a revolving basis (involving advances, repayments and
readvances) as set forth in Section 2.1 of the Loan Agreement.
(xii) "Revolving
Loan Limit" shall mean, as to each Borrower, at any time, the amount equal to
$15,000,000 minus the then outstanding principal amount of the Revolving Loans
and the Letter of Credit Accommodations provided to the other
Borrowers.
(xiii) "Specified
Equipment" shall mean the Equipment set forth on Schedule 1 to the Loan
Agreement, whether now owned or hereafter acquired and wherever located, as such
Schedule may from time to time be amended in writing.
(xiv) "Term
Loan Reserve" shall have the meaning set forth in Section 7 of this Amendment
No. 4.
(xv) "Term
Loans" shall mean, collectively, the Equipment Term Loans and the Equipment
Purchase Term Loans.
(b) Amendments
to Definitions.
(i) All
references to the term "Loans" in the Loan Agreement and the other Financing
Agreements and each such reference is hereby amended to mean the Revolving
Loans, the Equipment Term Loans and any Equipment Purchase Term Loans (sometimes
referred to individually as a "Loan"), except that for
purposes of Sections 1.8, 2.1(d), 2.2, 3.2(c), 6.3(d) and 6.5, all references to
the term "Loans" in such Sections and each such reference is hereby amended to
mean the Revolving Loans.
(ii) All
references to the term "Maximum Credit" in the Loan Agreement and any of the
other Financing Agreements and each such reference is hereby amended to mean
$20,000,000.
(iii) All
references to the term "Obligations" in the Loan Agreement and the other
Financing Agreements and each such reference is hereby amended to include, in
addition and not in limitation, all obligations, liabilities and indebtedness of
Borrowers arising pursuant to or in connection with the Equipment Term Loans and
any Equipment Purchase Term Loans (including principal, interest, fees, expenses
and other charges related thereto).
(iv) All
references to the term "Reserves" in the Loan Agreement and the other Financing
Agreements and each such reference is hereby amended to include, in addition and
not in limitation, (A) Reserves that may be established to reflect that the Net
Orderly Liquidation Value of the Eligible Existing Equipment (net of estimated
liquidation costs, expenses and commissions) as set forth in the most recent
acceptable appraisals with respect
5
thereto
received by Lender has declined so that the ratio of the then outstanding
principal amount of the Equipment Term Loans to such appraised values is greater
than the percentages of the appraised values of the Eligible Existing Equipment
as of the date of any such appraisal used in establishing the original principal
amount of the Equipment Term Loans (and without limiting the generality of the
foregoing will include any difference between the eighty (80%) percent of the
Net Orderly Liquidation Value of the Eligible Existing Equipment that is the
basis for the Equipment Term Loans made pursuant to the second sentence of
Section 3(a) of this Amendment No. 4 and the amount of such Equipment Term
Loans) and (B) the Term Loan Reserve.
(c) Interpretation. For
purposes of this Amendment No. 4, unless otherwise defined herein, all terms
used herein, including, but not limited to, those terms used and/or defined in
the recitals above, shall have the respective meanings assigned to such terms in
the Loan Agreement.
2. Amendments
to Loan Agreement.
(a) Applicable
Margin.
(i) Sections
1.4(a) and (b) of the
Loan Agreement are hereby deleted in their entirety and the
following substituted therefor:
"Quarterly
Average
Excess
Availability |
Leverage
Ratio |
Applicable
Prime
Rate
Margin for Revolving Loans |
Applicable
Prime
Rate
Margin for Term Loans |
Applicable
Eurodollar
Rate
Margin for Revolving Loans |
Applicable
Eurodollar
Rate
Margin for Term Loans |
|
(a)
Greater than or equal to
$10,000,000 |
2.00
to 1.00 or less |
0% |
0% |
1.75% |
2.00% |
|
(b)
Less than $10,000,000 |
Greater
than 2.00 to 1.00 |
¼%
|
¼% |
2.00% |
2.25%
|
Provided,
that, (i) the
Applicable Margin shall be calculated and established once each fiscal quarter
(commencing with the fiscal quarter ending on or about June 30, 2002) and shall
remain in effect until such date thereafter as it may be adjusted in accordance
with Sections 1.48(b) or 1.48(c) hereof and (ii) the Applicable Margin shall be
the lower percentage set forth above based on the Quarterly Average Excess
Availability or the Leverage Ratio."
(ii) Section
1.4(c) of the Loan Agreement is hereby deleted in its entirety.
(b) EBITDA. Section
1.21 of the Loan Agreement is hereby deleted in its entirety
6
and the
following substituted therefor:
"1.21
"EBITDA" shall mean, as to any Person, with respect to any period, an amount
equal to (a) the Consolidated Net Income of such Person for such period, plus
(b) depreciation and amortization for such period (to the extent deducted in the
computation of Consolidated Net Income of such Person), all in accordance with
GAAP, plus (c) Interest Expense for such period (to the extent deducted in the
computation of Consolidated Net Income of such Person), plus (d) the Provision
of Taxes for such period (to the extent deducted in the computation of
Consolidated Net Income of such Person), plus (e) real estate rental expense for
such period paid by such Person to Bayshore RE Holdings, Inc. or China RE
Holdings, Inc. (to the extent deducted in the computation of Consolidated Net
Income of such Person), plus (f) stock option compensation expense for such
period (to the extent deducted in the computation of Consolidated Net Income of
such Person), plus (g) non-cash impairment or restructuring charges for such
period (to the extent deducted in the computation of Consolidated Net Income of
such Person)."
(c) Eligible
Accounts. Section
1.22(n) of the Loan Agreement is hereby deleted in its entirety and the
following substituted therefor:
"(n) the
aggregate amount of such Accounts owing by a single account debtor (other than
Dow Chemical Company and its wholly-owned subsidiaries or Tyco International and
its wholly-owned subsidiaries) do not constitute more than ten (10%) percent of
the aggregate amount of all otherwise Eligible Accounts and such Accounts owing
by Dow Chemical Company and its wholly-owned subsidiaries and/or Tyco
International and its wholly-owned subsidiaries respectively, do not constitute
more than twenty-five (25%) percent of the aggregate amount of all otherwise
Eligible Accounts (but the portion of the Accounts not in excess of the
applicable percentages may be deemed Eligible Accounts);"
(d) Loans.
(i) Section
2.1(a) of the Loan Agreement is hereby deleted in its entirety and the following
substituted therefor:
"(a)
Subject to and upon the terms and conditions contained herein, Lender agrees to
make Revolving Loans to each Borrower from time to time in amounts requested by
such Borrower (or
Borrower Agent on behalf of such Borrower) up to
the amount outstanding
at any time equal to
the lesser of (i) the Borrowing Base of such Borrower at such time or (ii) the
Revolving Loan Limit of such Borrower at such time."
(ii) Section
2.1(c) of the Loan Agreement is hereby deleted in its entirety and the following
substituted therefor:
"(c)
Except in Lender's discretion, or as otherwise provided herein, (i) the
aggregate amount of the Loans and the Letter of Credit Accommodations
outstanding at any time shall not exceed the Maximum Credit, (ii) the aggregate
principal amount of the
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Revolving
Loans and Letter of Credit Accommodations outstanding at any time to a Borrower
shall not exceed the lesser of the Borrowing Base of such Borrower or the
Revolving Loan Limit of such Borrower, (iii) the aggregate principal amount of
the Revolving Loans outstanding at any time to Borrowers based on the Eligible
Inventory of Borrowers shall not exceed $8,000,000, and (iv) the aggregate
amount of the Term Loans shall not exceed the Equipment Loan Limit.
(e) Letter
of Credit Accommodations. Section
2.2(e) of the Loan Agreement is hereby deleted in its entirety and the following
substituted therefor:
"(e)
Except in Lender's discretion, the amount of all outstanding Letter of Credit
Accommodations and all other commitments and obligations made or incurred by
Lender in connection therewith shall not at any time exceed
$10,000,000."
(f) Fees. Section
3.2(b) of the Loan Agreement is hereby deleted in its entirety and the following
substituted therefor:
"(b)
Borrowers shall pay to Lender monthly a servicing fee in an amount equal to
$1,250 in respect of Lender’s services for each month (or part thereof) while
this Agreement remains in effect and for so long thereafter as any of the
Obligations are outstanding, which fee shall be fully earned as of and payable
in advance on the first day of each calendar month."
(g) Unused
Line Fee.
(i) Sections
3.2(c)(i) and (ii) of the Loan Agreement are hereby deleted in their entirety
and the following substituted therefor:
"Quarterly
Average
Excess
Availability
|
Leverage
Ratio
|
Unused
Line
Fee
Percentage
|
|
(i) Greater
than or equal to
$10,000,000
|
2.00 to 1.00 or less
|
¼%
|
|
(ii) Less
than $10,000,000
|
Greater than 2.00 to 1.00
|
¼%
|
Provided,
that, (A) the unused line fee percentage shall be calculated and established
once each fiscal quarter (commencing with the fiscal quarter ending on or about
June 30, 2002) and (B) the unused line fee percentage shall be the lower
percentage set forth above based on the Quarterly Average Excess Availability or
the Leverage Ratio."
(ii) Section
3.2(c)(iii) of the Loan Agreement is hereby deleted in its
entirety.
8
(h) Grant
of Security Interest. Section
5.1(d) of the Loan Agreement is hereby deleted in its entirety and the following
substituted therefor:
"(d) (i)
the Specified Equipment and (ii) the Equipment listed on Exhibit A to Amendment
No. 4;"
(i) Collateral
Reporting. Section
7.1(a)(i) of the Loan Agreement is hereby deleted
in its entirety and the following substituted therefor:
"(i) as
soon as possible after the end of each month (but in any event no later than the
fifteenth (15th) of each
month), on a monthly basis or more frequently as Lender may request at any time
that the aggregate amount of the Excess Availability of Borrowers is less than
$3,000,000 or a Default or Event of Default shall exist or have occurred,
schedules of sales made, credits issued and cash received;"
(j) Financial
Covenants. Section
9.17 of the Loan Agreement is hereby deleted in its entirety and the following
substituted therefor:
"9.17
Interest
Coverage Ratio. At any
time that the aggregate amount of the Excess Availability of Borrowers is less
than $3,000,000, the Interest Coverage Ratio for Borrowers (on a combined basis)
as of the end of any fiscal quarter shall have been not less than 1.0 to
1."
(k) Term. The
first sentence of Section 12.1(a) of the Loan Agreement is hereby deleted and
the following substituted therefor:
"This
Agreement and the other Financing Agreements shall become effective as of the
date set forth on the first page hereof and shall continue in full force and
effect for a term ending on April 9, 2009 (the "Maturity Date")."
(l) Early
Termination. Section
12.1(c) of the Loan Agreement is hereby deleted in its entirety and the
following substituted therefor:
"(c) If
for any reason this Agreement is terminated prior to April 9, 2007, in view of
the impracticality and extreme difficulty of ascertaining actual damages and by
mutual agreement of the parties as to a reasonable calculation of Lender’s lost
profits as a result thereof, Borrowers agree to pay to Lender, upon the
effective date of such termination, an early termination fee in the amount equal
to:
|
Amount |
Period
|
|
(i)
one-half (1/2%) percent of Maximum Credit
|
From
the date of Amendment No. 4 to April 9, 2006
|
9
|
(ii)
one-quarter (1/4%) percent of
Maximum Credit |
From
and after April 9, 2006 to April 9, 2007
|
Such
early termination fee shall be presumed to be the amount of damages sustained by
Lender as a result of such early termination and Borrowers and Guarantors agree
that it is reasonable under the circumstances currently existing. In addition,
Lender shall be entitled to such early termination fee upon the occurrence of
any Event of Default described in Sections 10.1(g) and 10.1(h) hereof, even if
Lender does not exercise the right to terminate this Agreement, but elects, at
its option, to provide financing to any Borrower or permit the use of cash
collateral under the United States Bankruptcy Code. The early termination fee
provided for in this Section 12.1 shall be deemed included in the
Obligations."
(m) Schedule
1. The
Loan Agreement is hereby amended by adding a new Schedule 1 thereto in the form
annexed hereto as Exhibit B.
3. Equipment
Term Loans.
(a) Subject
to and upon the terms and conditions contained herein, Lender shall from time to
time on and after the date hereof make Equipment Term Loans to Bayshore L.P. and
Polymers North America at the request of such Borrower of up to eighty (80%)
percent of the Net Orderly Liquidation Value of the Eligible Existing Equipment
specified by such Borrower in such request (but not including any Eligible
Existing Equipment that has been specified in any prior request or is otherwise
the basis for any prior Equipment Term Loan). Within sixty (60) days of the date
hereof, pursuant to the request of such Borrowers, subject to the terms and
conditions contained herein, Lender shall make an Equipment Term Loan to
Bayshore L.P. in an amount equal to $1,365,000 and an Equipment Term Loan to
Polymers North America in an amount equal to $675,000. Such
Equipment Term Loans are based on the Eligible Existing Equipment located in
XxXxxxx, Texas and China, Texas that is subject to the appraisal by Dovebid
Valuation Services dated February 18, 2005. Such Eligible Existing Equipment
shall not be the basis for any Equipment Term Loan made after the date hereof.
Each
Equipment Term Loan shall be in an amount not less than $300,000 (and in
integral multiples of $25,000 greater than such amount).
(b) Each
Equipment Term Loan made to Bayshore L.P. or Polymers North America shall be (i)
evidenced by an Equipment Term Note executed and delivered by the applicable
Borrower to Lender concurrently therewith, (ii) repaid, together with interest
and other amounts, in accordance with such Equipment Term Note, this Amendment
No. 4 and the other Financing Agreements and (iii) secured by all of the
Collateral.
(c) If at any
time the outstanding aggregate principal amount of all Equipment Term Loans
shall exceed eighty (80%) percent of the Net Orderly Liquidation Value of all
Eligible Existing Equipment, Borrowers shall remain liable therefor, and Lender
may, at its option, create a Reserve in an amount equal to the entire amount of
such excess(es) or Borrowers shall, upon
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the
demand by Lender, which may be made at any time and from time to time, repay to
Lender the entire amount of such excess(es).
(d) In
addition to the other conditions precedent to any Loan or Letter of Credit
Accommodation set forth in this Agreement, the making of each Equipment Term
Loan shall be subject to the satisfaction of each of the following additional
conditions precedent, as determined by Lender:
(i) Lender
shall have received from the applicable Borrower not less than fifteen (15)
Business Days prior written notice of the proposed Equipment Term Loan, which
notice shall specify the amount requested (other than with respect to the
Equipment Term Loans being made pursuant to the second sentence of Section 3(a)
of this Amendment No. 4) and shall specify the Eligible Existing Equipment that
is the basis for such proposed Equipment Term Loan;
(ii) Lender
shall have received from the applicable Borrower not less than fifteen (15)
Business Days prior to the making of any Equipment Term Loan (other than the
Equipment Term Loans referenced in the second sentence of Section 3(a) of this
Amendment No. 4), a written appraisal as to the Equipment upon which such
Equipment Term Loan will be based in form, scope and methodology acceptable to
Lender and by an appraiser acceptable to Lender, addressed to Lender, and upon
which Lender is expressly permitted to rely, which appraisal shall reflect the
Net Orderly Liquidation Value of such Equipment as of a date not more than
ninety (90) days prior to the date that the Equipment Term Loan based thereon is
to be made;
(iii) Lender
shall have received as of the date of the making of any additional Equipment
Term Loan, a letter agreement in the form annexed hereto as Exhibit E, duly
authorized, executed and delivered by the parties hereto, amending Schedule 1 of
this Amendment No. 4;
(iv) as of the
date of such Equipment Term Loan and after giving effect thereto, the aggregate
amount of all Term Loans shall not exceed the Equipment Loan Limit;
(v) as of the
date of such Equipment Term Loan, Lender shall have received a single original
Equipment Term Note as duly authorized, executed and delivered by the Borrower
that is to receive such Equipment Term Loan, in the form annexed hereto as
Exhibit C, as completed to reflect the date and amount of each such Equipment
Term Loan and with the number of monthly installments of principal payable
thereunder and the amount of each such monthly installment, which note shall
evidence a valid and legally enforceable indebtedness of such Borrower
unconditionally owing to Lender, without offset, defense or counterclaim of any
kind, nature or description whatsoever; and
(vi) no Event
of Default, or act, condition or event which with notice or passage of time or
both would constitute an Event of Default, shall exist or have occurred and be
continuing.
11
(e) The
principal amount of each Equipment Term Loan shall be repaid in eighty-four (84)
consecutive monthly installments of principal (subject to earlier payment as
provided herein, or in the Loan Agreement or the applicable Equipment Term
Note), each in an amount as calculated in clause (f) below, commencing on the
first day of the second month after the date of the making of such Equipment
Term Loan, together with interest and other amounts as provided herein and in
the Equipment Term Note with respect to such loan.
(f) The
amount of each monthly installment of principal in respect of each Equipment
Term Loan (other than the last installment which shall be in an amount equal to
the entire unpaid balance of the Equipment Term Note) shall equal: (i) the
original principal amount of the Equipment Term Loan divided by (ii) eighty-four
(84).
4. Equipment
Purchase Term Loans.
(a) Subject
to and upon the terms and conditions contained herein, Lender shall make
Equipment Purchase Term Loans to any Borrower, from time to time, at the request
of such Borrower, of up to eighty (80%) percent of the Hard Costs of Eligible
New Equipment to be purchased by such Borrower after the date hereof with the
proceeds of such Equipment Purchase Term Loan. Each Equipment Purchase Term Loan
shall be in an amount of not less than $300,000 (and in integral multiples of
$25,000 greater than such amount). All of the proceeds of each Equipment
Purchase Term Loan shall be used solely for the payment of the purchase price of
the Eligible New Equipment specified in the notice required to be delivered to
Lender pursuant to Section 4(d)(i) below or to reimburse the Borrower that is
the purchaser and owner thereof for amounts paid by it for such purchase price,
provided that such purchase price was paid, and such Eligible New Equipment was
purchased by such Borrower, no more than ninety (90) days prior to the date of
the Equipment Purchase Term Loan based on such Eligible New
Equipment.
(b) If at any
time the outstanding aggregate principal amount of all Equipment Purchase Term
Loans shall exceed eighty (80%) percent of the Hard Costs of all Eligible New
Equipment purchased by Borrowers with the proceeds of Equipment Purchase Term
Loans, Borrowers shall remain liable therefor, and Lender may, at its option,
create a Reserve in an amount equal to the entire amount of such excess(es) or
Borrowers shall, upon the demand by Lender, which may be made at any time and
from time to time, repay to Lender the entire amount of such
excess(es).
(c) Each
Equipment Purchase Term Loan shall be (i) evidenced by an Equipment Purchase
Term Note executed and delivered by the applicable Borrower to Lender
concurrently with each Equipment Purchase Term Loan, (ii) repaid, together with
interest and other amounts payable thereunder, in accordance with the provisions
of the applicable Equipment Purchase Term Note, this Agreement and the other
Financing Agreements, and (iii) secured by all of the Collateral.
(d) In
addition to the other conditions precedent to any Loan or Letter of Credit
12
Accommodation
set forth in this Agreement, the making of each Equipment Purchase Term Loan
shall be subject to the satisfaction of each of the following additional
conditions precedent, as determined by Lender:
(i) Lender
shall have received from the applicable Borrower not less than fifteen (15)
Business Days prior written notice of the proposed Equipment Purchase Term Loan,
which notice shall specify the following: (A) the proposed date and amount of
the Equipment Purchase Term Loan, (B) a list and description of the Eligible New
Equipment (by model, make, manufacturer, serial number and/or such other
identifying information as may be requested by Lender), (C) the Hard Costs and
the total purchase price for the Eligible New Equipment to be purchased with the
proceeds of such Equipment Purchase Term Loan (and the terms of payment of such
purchase price), and (D) such other information and documents as Lender may from
time to time request with respect thereto;
(ii) upon any
Borrower acquiring any rights in the Equipment, Lender shall have a valid and
perfected first priority security interest in and lien upon the Eligible New
Equipment to be purchased with the proceeds of the Equipment Purchase Term Loan
and the Eligible New Equipment shall be free and clear of all other liens,
security interests, claims or other encumbrances, and Borrower shall have
delivered to Lender such evidence thereof, as Lender may from time to time
require;
(iii) Lender
shall have received as of the date of the making of any Equipment Purchase Term
Loan, a letter agreement in the form annexed hereto as Exhibit E, duly
authorized, executed and delivered by the parties hereto, amending Schedule 1 of
this Amendment No. 4;
(iv) the
amount of each Equipment Purchase Term Loan shall not exceed eighty (80%)
percent of the Hard Costs of the Eligible New Equipment to be purchased by a
Borrower with the proceeds of such Equipment Purchase Term Loan;
(v) as of the
date of such Equipment Purchase Term Loan and after giving effect thereto, the
aggregate amount of all Term Loans shall not exceed the Equipment Loan
Limit;
(vi) Lender
shall have received (A) copies, or upon Lender’s request, originals, of all
agreements, documents and instruments relating to the sale of the Eligible New
Equipment to any Borrower, including, without limitation, any purchase orders,
invoices, bills of sale or similar documents and (B) evidence reasonably
satisfactory to Lender that the Eligible New Equipment has been received and
installed by Borrowers and is in good working order and operating for its
intended purpose;
(vii) the
Borrower that is purchasing the Eligible New Equipment which is the basis for
the Equipment Purchase Term Loan shall duly authorize, execute and deliver to
Lender a single original Equipment Purchase Term Note in the form annexed hereto
as Exhibit D, as completed to reflect the date and amount of each such Equipment
Purchase Term Loan
13
and with
the number of monthly installments of principal payable thereunder and the
amount of each such monthly installment completed in accordance with Sections
4(e) and 4(f) below, as the case may be, which note shall evidence a valid and
legally enforceable indebtedness of such Borrower unconditionally owing to
Lender, without offset, defense or counterclaim of any kind, nature or
description whatsoever; and
(viii) no Event
of Default, or act, condition or event which with notice or passage of time or
both would constitute an Event of Default, shall exist or have occurred and be
continuing.
(e) The
principal amount of each Equipment Purchase Term Loan shall be payable (subject
to earlier payment as provided herein or in the Loan Agreement or the applicable
Equipment Purchase Term Note) in eighty-four (84) consecutive monthly
installments of principal, each in an amount calculated in clause (f) below,
commencing on the first day of the second month after the date of the making of
such Equipment Purchase Term Loan, together with interest and other amounts as
provided herein and in the Equipment Purchase Term Note with respect to such
loan.
(f) The
amount of each monthly installment of principal in respect of each Equipment
Purchase Term Loan (other than the last installment which shall be in an amount
equal to the entire unpaid balance of the Equipment Purchase Term Note) shall
equal: (i) the original principal amount of the Equipment Purchase Term Loan
divided by (ii) eighty-four (84).
5. Term
Loan Limit. Except
in Lender’s discretion, the outstanding aggregate principal amount of the Term
Loans shall not exceed, at any time, the lower of (i) the aggregate amount of
(A) eighty (80%) percent of the Hard Costs of all Eligible New Equipment
purchased by Borrowers pursuant hereto plus (B) eighty
(80%) percent of the Net Orderly Liquidation Value of Eligible Existing
Equipment or (ii)
the Equipment Loan Limit.
6. Equipment
Appraisals. Upon Lender's request, each Borrower shall, at its expense, no more
than once in any twelve (12) month period, but at any time or times as Lender
may request on or after an Event of Default, deliver or cause to be delivered to
Lender written reports or appraisals as to the Eligible Existing Equipment or
Eligible New Equipment in form, scope and methodology acceptable to Lender and
by an appraiser acceptable to Lender, addressed to Lender, and upon which Lender
is expressly permitted to rely.
7. Term Loan
Reserve. In the event that Excess Availability is at any time less than
$3,000,000, Lender may, at its option, establish a Reserve in the aggregate
amount of the principal payments required to be made in respect of the Equipment
Term Loans and any Equipment Purchase Term Loan for the twelve (12) consecutive
month period immediately following such date (the "Term Loan Reserve").
The Term
Loan Reserve shall be allocated between Borrowers in the same proportion as each
Borrower's aggregate outstanding principal amount of Equipment Term Loans and
Equipment Purchase Term Loans. The Term Loan Reserve shall be a Reserve and
included within the definition thereof, and shall be established
14
without
limiting any other rights or remedies of Lender under this Amendment No. 4 or
any of the other Financing Agreements with respect to the establishment of
Reserves or otherwise.
8. Representations,
Warranties and Covenants. Borrowers and Guarantors, P&O and Global, jointly
and severally, represent, warrant and covenant with and to Lender as follows,
which representations, warranties and covenants are continuing and shall survive
the execution and delivery hereof, and the truth and accuracy of, or compliance
with each, together with the representations, warranties and covenants in the
other Financing Agreements, being a continuing condition of the making of Loans
by Lender to Borrowers:
(a) This
Amendment No. 4 has been duly executed and delivered by each Borrower and
Guarantor and is in full force and effect as of the date hereof and the
agreements and obligations of each Borrower and Guarantor contained herein
constitute legal, valid and binding obligations of each Borrower and Guarantor
enforceable against each of them in accordance with their respective
terms.
(b) No action
of, or filing with, or consent or any governmental or public body or authority,
other than the filing of UCC financing statements, and no approval or consent of
any other party, is or will be required to authorize, or is or will be otherwise
required in connection with, the execution, delivery and performance of this
Amendment No. 4.
(c) None of
the transactions contemplated by this Amendment No. 4 violate or will violate
any applicable law or regulation, or do or will give rise to a default or breach
under any agreement to which any Borrower or Guarantor is a party or by which
any property of any Borrower or Guarantor is bound.
9. Amendment
Fee. In
consideration of the amendments set forth herein, Borrowers shall pay to Lender,
and Lender may, at its option, charge the account of Borrowers maintained by
Lender, a fee in the amount of $40,000, which fee shall constitute part of the
Obligations and is fully earned as of the date hereof.
10. Conditions
Precedent. The effectiveness of the amendments contained herein shall be subject
to the satisfaction of each of the following, in a manner satisfactory to Lender
and its counsel:
(a) Lender
shall have received as of the date hereof, this Amendment No. 4 duly authorized,
executed and delivered by the parties hereto;
(b) Lender
shall have received, in form and substance satisfactory to Lender in good faith,
all consents, waivers, acknowledgments and other agreements from third persons
which Lender may deem necessary or desirable in order to permit, protect and
perfect its security interests in and liens upon the Collateral or to effectuate
the provisions or purposes of this Agreement and the other Financing Agreements,
including, without limitation, Collateral Access Agreements by owners and
lessors of leased premises of any Borrower and by processors and warehouses at
which Collateral is located;
15
(c) Lender
shall have received evidence, in form and substance satisfactory to Lender, that
Lender has a valid perfected first priority security interest in all of the
Eligible Existing Equipment and Eligible New Equipment;
(d) Lender
shall have received and reviewed lien and judgment search results for the
jurisdiction of incorporation of each Borrower, the jurisdiction of the chief
executive office of each Borrower and all jurisdictions in which Equipment of
any Borrower are located, which search results shall be in form and substance
satisfactory to Lender;
(e) Lender
shall have received the fee referred to in Section 9 hereof; and
(f) no Event
of Default, or event, act or condition which with notice or passage of time or
both would constitute an Event of Default, shall exist or have
occurred.
11. Effect
of this Amendment. Except
as expressly set forth herein, no other amendments, consents, changes or
modifications to the Financing Agreements are intended or implied, and in all
other respects the Financing Agreements are hereby specifically ratified,
restated and confirmed by all parties hereto as of the effective date hereof and
Borrowers and Guarantors shall not be entitled to any other or further amendment
or consent by virtue of the provisions of this Amendment No. 4 or with respect
to the subject matter of this Amendment No. 4. To the extent of conflict between
the terms of this Amendment No. 4 and the other Financing Agreements, the terms
of this Amendment No. 4 shall control. The Loan Agreement and this Amendment No.
4 shall be read and construed as one agreement.
12. Further
Assurances. The parties hereto shall execute and deliver such additional
documents and take such additional action as may be necessary or desirable to
effectuate the provisions and purposes of this Amendment No. 4.
13. Governing
Law. The validity, interpretation and enforcement of this Amendment No. 4 and
the other Financing Agreements and any dispute arising out of the relationship
between the parties hereto whether in contract, tort, equity or otherwise, shall
be governed by the internal laws of the State of Texas but excluding any
principles of conflicts of law or other rule of law that would cause the
application of the law of any jurisdiction other than the laws of the State of
Texas.
14. Binding
Effect. This Amendment No. 4 shall be binding upon and inure to the benefit of
each of the parties hereto and their respective successors and
assigns.
15. Headings.
The headings listed herein are for convenience only and do not constitute
matters to be construed in interpreting this Amendment No. 4.
16. Counterparts.
This Amendment No. 4 may be executed in any number of counterparts, but all of
such counterparts shall together constitute but one and the same agreement. In
making proof of this Amendment No. 4, it shall not be necessary to produce or
account for more than one counterpart thereof signed by each of the parties
hereto. Delivery of
16
an
executed counterpart of this Amendment No. 4 by telefacsimile shall have the
same force and effect as delivery of an original executed counterpart of this
Amendment No. 4. Any party delivering an executed counterpart of this Amendment
No. 4 by telefacsimile also shall deliver an original executed counterpart of
this Amendment No. 4, but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Amendment No. 4 as to such party or any other party.
[REMAINDER
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17
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment No. 4 to be duly
executed and delivered by their authorized officers as of the day and year first
above written.
|
WACHOVIA
BANK, NATIONAL ASSOCIATION, |
||
|
successor
by merger to Congress Financial |
||
|
Corporation
(Southwest) |
||
|
By: |
/s/
Xxxx Xxxxxxx |
|
|
Name:
Xxxx Xxxxxxx |
||
|
Title:
First Vice President |
||
|
ICO
POLYMERS NORTH AMERICA, INC. |
||
|
By: |
/s/
Xxx X. Xxxx |
|
|
Name:
Xxx X. Xxxx |
||
|
Title:
Chief Financial Officer |
||
|
BAYSHORE
INDUSTRIAL, L.P. |
||
|
By:
Bayshore Industrial GP, L.L.C., as General |
||
|
Partner |
||
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By: |
/s/
Xxx X. Xxxx |
|
|
Name:
Xxx X. Xxxx |
||
|
Title:
Chief Financial Officer |
||
|
WEDCO
TECHNOLOGY, INC. |
||
|
By: |
/s/
Xxx X. Xxxx |
|
|
Name:
Xxx X. Xxxx |
||
|
Title:
Chief Financial Officer |
||
|
WEDCO
PETROCHEMICAL, INC. |
||
|
By: |
/s/
Xxx X. Xxxx |
|
|
Name:
Xxx X. Xxxx |
||
|
Title:
Chief Financial Officer |
||
[SIGNATURES
CONTINUED ON NEXT PAGE]
[SIGNATURES
CONTINUED FROM PREVIOUS PAGE]
|
ICO
POLYMERS, INC. |
||
|
By: |
/s/
Xxx X. Xxxx |
|
|
Name:
Xxx X. Xxxx |
||
|
Title:
Chief Financial Officer |
||
|
ICO,
INC. |
||
|
By: |
/s/
Xxx X. Xxxx |
|
|
Name:
Xxx X. Xxxx |
||
|
Title:
Chief Financial Officer |
||
|
ICO
TECHNOLOGY, INC. |
||
|
By: |
/s/
Xxx X. Xxxx |
|
|
Name:
Xxx X. Xxxx |
||
|
Title:
Chief Financial Officer |
||
|
BAYSHORE
INDUSTRIAL GP L.L.C. |
||
|
By: |
/s/
Xxx X. Xxxx |
|
|
Name:
Xxx X. Xxxx |
||
|
Title:
Chief Financial Officer |
||
|
BAYSHORE
INDUSTRIAL LP L.L.C. |
||
|
By:
ICO Global Services, Inc., Sole Manager |
||
|
By: |
/s/
Xxxx Xxxxxxx |
|
|
Name:
Xxxx Xxxxxxx |
||
|
Title:
President |
||
[SIGNATURES
CONTINUED ON NEXT PAGE]
[SIGNATURES
CONTINUED FROM PREVIOUS PAGE]
|
AGREED: | |
|
ICO
P&O, INC. | |
|
By: |
/s/
Xxx X. Xxxx |
|
Name:
Xxx X. Xxxx | |
|
Title:
Chief Financial Officer | |
|
ICO
GLOBAL SERVICES, INC. | |
|
By: |
/s/
Xxxx Xxxxxxx |
|
Name:
Xxxx Xxxxxxx | |
|
Title:
President | |
