EXHIBIT 10.2(b)
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is made and
entered into as of September 28, 1995 by and among STERLING CHEMICALS, INC., a
Delaware corporation (the "Borrower"); each of the banks which is or may from
time to time become a party to the Credit Agreement (as defined below)
(individually, a "Bank" and, collectively, the "Banks"), THE BANK OF NOVA
SCOTIA, as Documentation Agent (in such capacity, together with its successors
in such capacity, the "Documentation Agent"), ABN AMRO BANK N.V., HOUSTON
AGENCY, BANK OF SCOTLAND and CREDIT LYONNAIS, NEW YORK BRANCH, as Co-Agents (in
such capacity, together with its successors in such capacity, collectively
called the "Co-Agents"), and TEXAS COMMERCE BANK NATIONAL ASSOCIATION, a
national banking association, acting as agent for the Banks (in such capacity,
together with its successors in such capacity, the "Agent").
RECITALS
A. The Borrower, the Banks, the Co-Agents, the Documentation Agent and
the Agent executed and delivered that certain Credit Agreement dated as of April
13, 1995 (the "Credit Agreement"). Any capitalized term used in this Amendment
and not otherwise defined shall have the meaning ascribed to it in the Credit
Agreement.
B. The Borrower, the Banks, the Co-Agents, the Documentation Agent and
the Agent desire to amend the Credit Agreement in certain respects.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements, representations and warranties herein set forth, and further good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrower, the Banks, the Co-Agents, the Documentation Agent
and the Agent do hereby agree as follows:
1. Amendments.
(1) The definition of "Capital Expenditures" set forth in Section 1.1 of
the Credit Agreement is hereby amended to read in its entirety as follows:
Capital Expenditures shall mean expenditures in respect of fixed
or capital assets by a Person, to the extent capitalized in accordance
with GAAP, but excluding (a) expenditures for the restoration, repair or
replacement of any fixed or capital asset which was destroyed or
damaged, in whole or in part, to the extent financed by the proceeds of
an insurance policy maintained by such Person, (b) increases in the
consolidated fixed or capital assets of such Person resulting solely
from Permitted Acquisitions (other than expenditures made after the date
of such Permitted Acquisition), (c) increases in the capital assets of
such Person resulting from expenditures in respect of fixed or capital
assets made by another so long as such Person has no obligation to
reimburse the other for such expenditures and (d) the Plant Work (as
defined in the Pulp Credit Facility).
Expenditures in respect of replacements and maintenance consistent with
the business practices of such Person in respect of plant facilities,
machinery, fixtures and other like capital assets utilized in the
ordinary course of business are not Capital Expenditures to the extent
such expenditures are not capitalized in preparing a balance sheet of
such Person in accordance with GAAP.
(2) The reference to "royalty" in clause (v) of the definition of
"EBITDA" set forth in Section 1.1 of the Credit Agreement is hereby deleted.
(3) The reference to ", Sterling Pulp (US)" and "dated concurrently
herewith" in the definition of "Guaranties" set forth in Section 1.1 of the
Credit Agreement is hereby deleted.
(4) Clause (h) of the definition of "Permitted Investments" set forth in
Section 1.1 of the Credit Agreement is hereby amended to read in its entirety as
follows:
(h) loan participations with a rating of not less than A-2 and
P-2 (or, in the case of investments maintained in the Cash Flow Account
(as defined in the Pulp Credit Facility), A-1 and P-1) (or the
equivalent rating) by Xxxxx'x Investors Service, Inc. and Standard and
Poor's Corporation, respectively;
(5) New clauses (j) and (k) are hereby added to the definition of
"Permitted Investments" set forth in Section 1.1 of the Credit Agreement,
reading in their entirety as follows (with the existing clauses (j) and (k) to
be restyled as clauses (l) and (m), respectively):
(j) the Bonds (as defined in the Pulp Credit Facility); (k)
investments maintained in the Cash Flow Account (as defined in the Pulp
Credit Facility) in publicly traded securities rated BB+ or better by
Standard & Poor's Corporation or Ba1 or better by Xxxxx'x Investors
Service, Inc.
(6) A sentence is hereby added to the end of the definition of
"Permitted Investments" set forth in Section 1.1 of the Credit Agreement,
reading in its entirety as follows:
Amounts in the Cash Flow Account may not be invested in the items
described in clauses (f) or (l) above.
(7) A new definition of "Pulp Credit Facility" is hereby added to
Section 1.1 of the Credit Agreement, reading in its entirety as follows:
Pulp Credit Facility shall mean that certain Credit Agreement
dated as of September 28, 1995 executed by and among Sterling Pulp
Chemicals, Ltd., TCB, as Agent, and the lenders party thereto, as the
same may from time to time be amended, restated or supplemented.
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(8) The reference to ", Sterling Pulp (US)" and "dated as of the
Effective Date" in clause (iii) of the definition of "Security Agreements" set
forth in Section 1.1 of the Credit Agreement is hereby deleted.
(9) The definition of "Subordinated Debt" set forth in Section 1.1 of
the Credit Agreement is hereby amended to read in its entirety as follows:
Subordinated Debt shall mean, as of the date of determination
thereof, unsecured Indebtedness with any lender for which the Borrower
is directly and primarily liable, in respect of which none of its
Subsidiaries is contingently or otherwise obligated, and which is
subordinated to the obligations of the Borrower to pay principal of and
interest (before and after bankruptcy) on the Loans and the Notes and on
any Interest Rate Risk Indebtedness owed to any of the Lenders, on
terms, and which contains other terms (including interest, amortization
and financial covenants), in form and substance satisfactory to the
Agent and the Majority Lenders.
(10) Clause (c) of Section 6.3 of the Credit Agreement is hereby amended
to read in its entirety as follows:
(c) do not and will not contravene or violate any Legal
Requirement applicable to the Parties or the Organizational Documents of
the Parties, the contravention or violation of which could reasonably be
expected to cause a Material Adverse Effect.
(11) Section 8.1 of the Credit Agreement is hereby amended to read in
its entirety as follows:
8.1 Indebtedness. Create, incur, suffer or permit to exist, or
assume or guarantee, directly or indirectly, or become or remain liable
with respect to any Borrowed Money Indebtedness (as defined below),
whether direct, indirect, absolute, contingent or otherwise, except the
following: (a) the Obligations; (b) the liabilities existing on the date
of this Agreement and disclosed on Schedule 8.1 hereto and all renewals,
extensions and replacements (but not increases) of any of the foregoing;
(c) Indebtedness under the Canadian Facility and all renewals,
extensions and replacements (but not increases) thereof; (d) purchase
money Indebtedness to acquire Equipment not exceeding, in the aggregate,
$10,000,000 outstanding at any one time; (e) in addition to Indebtedness
permitted under the preceding clause (d), non-recourse Indebtedness in
an aggregate amount not to exceed $60,000,000 at any one time
outstanding incurred by Subsidiaries of the Borrower which is payable
solely by recourse to Properties which are not included in the Borrowing
Base or in the "Collateral" under the Pulp Credit Facility and which are
acquired or constructed by such Subsidiary after the date hereof; (f)
Subordinated Debt so long as the net proceeds of such Subordinated Debt
are applied in payment of the Term Loans or "Loans" under the Pulp
Credit Facility or, if no Term Loans or "Loans" under the Pulp Credit
Facility remain outstanding, so long as the Revolving Loan Commitments
or the "Loan Commitments" under the Pulp Credit Facility are reduced by
an amount equal to the net proceeds of such Subordinated Debt;
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(g) Interest Rate Risk Indebtedness, together with "Interest Rate Risk
Indebtedness" as defined in the Pulp Credit Facility; (h) insurance
premiums financed with the applicable insurance carrier; (i)
Indebtedness under the Bond Documents (as defined in the Pulp Credit
Facility) and Indebtedness under (or permitted under) the Pulp Credit
Facility, but only so long as the Agent is the "Agent" under the Pulp
Credit Facility and the Lenders hold "Loans" and/or "Loan Commitments"
under the Pulp Credit Facility in amounts sufficient to constitute
"Majority Lenders" under the Pulp Credit Facility, and (j) other
Borrowed Money Indebtedness not in excess of $30,000,000 in the
aggregate outstanding at any time on terms no more restrictive than the
terms provided herein. For purposes of this Agreement, "Borrowed Money
Indebtedness" shall mean, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b)
all obligations of such Person evidenced by bonds, debentures, notes or
similar instruments, (c) all obligations of such Person under
conditional sale or other title retention agreements relating to
Property purchased by such Person, (d) all obligations of such Person
issued or assumed as the deferred purchase price of property or services
(excluding trade accounts payable incurred in the ordinary course of
such Person's business), (e) all Capital Lease Obligations, (f) all
obligations of others of the types specified in clauses (a) through (e)
above secured by any lien on property or assets owned or acquired by
such Person, whether or not the obligations secured thereby have been
assumed, (g) Interest Rate Risk Indebtedness, together with "Interest
Rate Risk Indebtedness" as defined in the Pulp Credit Facility, (h) all
outstanding letters of credit issued for the account of such Person and
(i) all guarantees of such Person of obligations of the type referred to
in the foregoing clauses (a) through (h).
(12) Section 8.2 of the Credit Agreement is hereby amended to read in
its entirety as follows:
8.2 Liens. Create or suffer to exist any Lien upon any of its
Property now owned or hereafter acquired, or acquire any Property upon
any conditional sale or other title retention device or arrangement or
any purchase money security agreement; or in any manner directly or
indirectly sell, assign, pledge or otherwise transfer any of its
Accounts; provided, however, that the Borrower or any of its
Subsidiaries may create or suffer to exist: (a) Liens in favor of the
Agent or any Lender under the Loan Documents, including, without
limitation, Liens securing Interest Rate Risk Indebtedness owed to one
or more of the Lenders (but not to any Person which is not, at such
time, a Lender); (b) Liens in effect on the Effective Date and disclosed
on Schedule 8.2 hereto, provided that neither the Indebtedness secured
thereby nor the Property covered thereby shall increase after the
Effective Date; (c) Liens securing the Canadian Facility but only on
assets of the Canadian Subsidiaries; (d) Liens securing purchase money
Indebtedness permitted under Section 8.1(d) hereof and covering only the
Property so purchased and the proceeds therefrom and Liens permitted
under Section 8.1(e) hereof covering Properties acquired or constructed
after the date hereof and the proceeds therefrom; (e) normal
encumbrances and restrictions on title which do not secure Borrowed
Money Indebtedness and which do not have a material adverse effect on
the value or utility of the applicable Property; (f) Liens incurred or
deposits made in the ordinary course of
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business (i) in connection with workmen's compensation, unemployment
insurance, social security and other like laws, (ii) to secure insurance
in the ordinary course of business, the performance of bids, tenders,
contracts, leases, licenses, statutory obligations, surety, appeal and
performance bonds and other similar obligations incurred in the ordinary
course of business, not, in any of the cases specified in this clause
(ii), incurred in connection with the borrowing of money, the obtaining
of advances or the payment of the deferred purchase price of Property,
or (iii) on deposits made in financial institutions in the ordinary
course of business as a result of common law and statutory rights of
setoff and depositary agreements and other contractual arrangements
(other than Borrowed Money Indebtedness) arising in the ordinary course
of business; (g) attachments, judgments and other similar Liens arising
in connection with the court proceedings, provided that the execution
and enforcement of such Liens are effectively stayed and the claims
secured thereby are being actively contested in good faith with adequate
reserves made therefor in accordance with GAAP; (h) Liens imposed by
law, such as carriers', warehousemen's, mechanics', materialmen's and
vendors' liens, incurred in good faith in the ordinary course of
business and securing obligations which are not yet due or which are
being contested in good faith by appropriate proceedings if adequate
reserves with respect thereto are maintained in accordance with GAAP;
(i) Liens for taxes which are not yet due or are being contested in good
faith by appropriate proceedings if adequate reserves with respect
thereto are maintained in accordance with GAAP; (j) Liens or rights
under insurance policies securing Indebtedness permitted under Section
8.1(h); (k) Liens securing or otherwise permitted under the Pulp Credit
Facility to the extent required under the present terms and provisions
of the Pulp Credit Facility, without amendment except as approved (or
consented to pursuant to the proviso to Section 8.13 hereof) by the
Majority Lenders (wherever consent by the "Majority Lenders" under the
Pulp Credit Facility is required) or by all of the Lenders (wherever
consent by all of the "Lenders" under the Pulp Credit Facility is
required), but only so long as the Agent is the "Agent" under the Pulp
Credit Facility and the Lenders hold "Loans" and/or "Loan Commitments"
under the Pulp Credit Facility in amounts sufficient to constitute
"Majority Lenders" under the Pulp Credit Facility, and (l) extensions,
renewals and replacements of Liens referred to in clauses (a) through
(j) of this Section; provided that any such extension, renewal or
replacement Lien shall be limited to the Property or assets covered by
the Lien extended, renewed or replaced and that the Indebtedness secured
by any such extension, renewal or replacement Lien shall be in an amount
not greater than the amount of the Indebtedness secured by the Lien
extended, renewed or replaced.
(13) The reference to "Loan Document" set forth in Section 8.4 of the
Credit Agreement is hereby amended to read "Loan Document and each 'Loan
Document' under the Pulp Credit Facility".
(14) A new sentence is hereby added to the end of Section 8.7 of the
Credit Agreement, reading in its entirety as follows:
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The Key Plant Contracts (as defined in the Pulp Credit Facility) shall
not result in a violation of this provision.
(15) The reference to ", Sterling Pulp (US)" in Section 8.9 of the
Credit Agreement is hereby deleted and the references to "Credit Document" and
"Credit Documents" set forth in the indented portion of Section 8.9 are hereby
amended to read "Loan Document" and "Loan Documents", respectively.
(16) The last sentence of Section 8.12 is hereby deleted in its
entirety.
(17) A new Section 8.13 is hereby added to the Credit Agreement, reading
in its entirety as follows:
8.13 Pulp Credit Facility. Amend, modify or obtain or grant a
waiver of any material provision of the Pulp Credit Facility unless the
same shall be consented to in writing by the Majority Lenders (wherever
consent by the "Majority Lenders" under the Pulp Credit Facility is
required) or by all of the Lenders (wherever consent by all of the
"Lenders" under the Pulp Credit Facility is required) (such consent not
to be unreasonably withheld); provided, however, that execution of, or
written consent to, any such amendment, modification or waiver of any
material provision of the Pulp Credit Facility by a particular Lender
shall evidence the consent by such Lender required under this Section.
(18) Clause (m) of Section 9.1 of the Credit Agreement is hereby amended
to read in its entirety as follows:
(m) Change of Control - there shall occur any Change of Control
without the written consent of the Majority Lenders; or
(19) A new clause (n) is hereby added to Section 9.1 of the Credit
Agreement, reading in its entirety as follows:
(n) Pulp Credit Facility - the occurrence of an "Event of
Default" under the Pulp Credit Facility.
(20) The following proviso is hereby added to the end of the second
sentence of Section 11.5 of the Credit Agreement:
; provided, however, that execution of, or written consent to, any
amendment, modification or waiver of a particular provision of the Pulp
Credit Facility by a particular Lender shall evidence the consent by
such Lender required under this Section with respect to an amendment,
modification or waiver of the identical provision contained in this
Agreement and/or the Loan Documents, without the necessity for any
further action hereunder or under the Loan Documents
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(21) Clause (i) of Section 11.6(b) of the Credit Agreement is hereby
amended to read in its entirety as follows:
(i) the aggregate amount of the Revolving Loan Commitments and
the Term Loans of the assigning Lender subject to each such assignment
shall in no event be less than $10,000,000, each such assignment shall
be in a constant and not varying percentage of all such assigning
Lender's rights and obligations under the Loan Documents and each Lender
hereunder shall also be a "Lender" under the Pulp Credit Facility;
(22) Clause (ii) of Section 11.6(c) of the Credit Agreement is hereby
amended to read in its entirety as follows:
(ii) such Lender assignor makes no representation or warranty
and assumes no responsibility with respect to the financial condition of
the Borrower or any other Party or the performance or observance by the
Borrower or any other Party of any of its obligations under this
Agreement or any of the other Loan Documents or any other instrument or
document furnished pursuant hereto;
(23) The reference to "Section 11.14" set forth in Section 11.6(f) of
the Credit Agreement is hereby amended to read "Section 11.15".
(24) The reference to "Commitments" set forth in Section 11.15 of the
Credit Agreement is hereby amended to read "Revolving Loan Commitment".
(25) Each reference to "the Debt to EBITDA Ratio" set forth in clause
(b) of the definition of "Margin Percentage" set forth in the Interest Rate
Agreement attached to the Credit Agreement as Schedule 1 is hereby amended to
read "the Debt to EBITDA Ratio for the Borrower (on a consolidated basis).
2. Ratification. Except as expressly amended by this Amendment, the Credit
Agreement and the other Loan Documents shall remain in full force and effect.
None of the rights, title and interests existing and to exist under the Credit
Agreement are hereby released, diminished or impaired, and the Borrower hereby
reaffirms all covenants, representations and warranties in the Credit Agreement
or any other Loan Document.
3. Expenses. The Borrower shall pay to the Agent all reasonable fees and
expenses of its legal counsel (pursuant to Section 11.3 of the Credit Agreement)
incurred in connection with the execution of this Amendment.
4. Miscellaneous. This Amendment (a) shall be binding upon and inure to the
benefit of the Borrower, the Banks, the Co-Agents, the Documentation Agent and
the Agent and their respective successors, assigns, receivers and trustees; (b)
may be modified or amended only by a writing signed by each party; (c) shall be
governed by and construed in accordance with the laws of the State of Texas and
the United States of America; (d) may be executed in several counterparts by the
parties hereto on separate counterparts, and each counterpart, when
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so executed and delivered shall constitute an original agreement, and all such
separate counterparts shall constitute but one and the same agreement, and (e)
together with the other Loan Documents, embodies the entire agreement and
understanding between the parties with respect to the subject matter hereof and
supersedes all prior agreements, consents and understandings relating to such
subject matter. The headings herein shall be accorded no significance in
interpreting this Amendment.
NOTICE PURSUANT TO TEX. BUS. & COMM. CODE (S)26.02
THE CREDIT AGREEMENT, AS AMENDED BY THIS AMENDMENT, AND ALL OTHER LOAN
DOCUMENTS EXECUTED BY ANY OF THE PARTIES PRIOR HERETO OR SUBSTANTIALLY
CONCURRENTLY HEREWITH CONSTITUTE A WRITTEN LOAN AGREEMENT WHICH 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.
IN WITNESS WHEREOF, the Borrower, the Banks, the Co-Agents, the
Documentation Agent and the Agent have caused this Amendment to be signed by
their respective, duly authorized officers, effective as of the date first above
written.
STERLING CHEMICALS, INC.,
a Delaware corporation
By: /s/ Xxx X. Xxxx
_________________________________________
Xxx X. Xxxx, Vice President-Finance
& Chief Financial Officer
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Agent and as a Bank
By: /s/ Xxxxxxx X. Xxxx
_________________________________________
Xxxxxxx X. Xxxx,
Vice President
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XXX XXXX XX XXXX XXXXXX
By: /s/ F.C.H. Xxxxx
______________________________________
Name: F.C.H. Xxxxx
______________________________________
Title: Senior Manager Loan Operations
______________________________________
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ABN AMRO BANK N.V., HOUSTON AGENCY
By: /s/ Xxxxxxx X. Xxxxxx
______________________________________
Name: Xxxxxxx X. Xxxxxx
______________________________________
Title: Assistant V.P.
______________________________________
By: /s/ Xxxxxxx X. Xxxxx
______________________________________
Name: Xxxxxxx X. Xxxxx
______________________________________
Title: V.P.
______________________________________
10
BANK OF SCOTLAND
By: /s/ Xxxxxxxxx Xxxxxx
______________________________________
Name: Xxxxxxxxx Xxxxxx
______________________________________
Title: V.P. and Branch Manager
______________________________________
11
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Xavier Ratous
______________________________________
Name: Xavier Ratous
______________________________________
Title: Sr. V.P.
______________________________________
00
XXXXXX XXXXXXX XXXXXXX AGENCY
By: /s/ Xxxxxxxxxxx X. Xxxxxxx
______________________________________
Name: Xxxxxxxxxxx X. Xxxxxxx
______________________________________
Title: V.P.
______________________________________
By: /s/ Xxxxxx Xxxxxxx
______________________________________
Name: Xxxxxx Xxxxxxx
______________________________________
Title: Assistant V.P.
______________________________________
00
XXXXX XXXXXXXXXX XXXX XX XXXXX, N.A.
By: /s/ Xxx Xxxxxx
______________________________________
Name: Xxx Xxxxxx
______________________________________
Title: V.P.
______________________________________
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THE LONG-TERM CREDIT BANK OF JAPAN,
LIMITED, NEW YORK BRANCH
By: /s/ Xxxx X. Xxxxxxxx
______________________________________
Name: Xxxx X. Xxxxxxxx
______________________________________
Title: Joint General Manager
______________________________________
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THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Xxxxx X. Xxxxxxx
______________________________________
Name: Xxxxx X. Xxxxxxx
______________________________________
Title: V.P.
______________________________________
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SOCIETE GENERALE, SOUTHWEST AGENCY
By: /s/ Xxxxx X. Xxxxxxx
______________________________________
Name: Xxxxx X. Xxxxxxx
______________________________________
Title: V.P.
______________________________________
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HIBERNIA NATIONAL BANK
By: /s/ Xxxxxxx Xxxxx
______________________________________
Name: Xxxxxxx Xxxxx
______________________________________
Title: Assistant V.P.
______________________________________
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COMERICA BANK
By: /s/ Xxxxxxx X. Xxxxxx
______________________________________
Name: Xxxxxxx X. Xxxxxx
______________________________________
Title: V.P.
______________________________________
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CIBC, INC.
By: /s/ Xxxx X. Xxxxxxx
______________________________________
Name: Xxxx X. Xxxxxxx
______________________________________
Title: V.P.
______________________________________
00
XXXXXXXX XXXX XX XXXXXX
By: /s/ Xxxxx X. Xxxxxxxxx
______________________________________
Name: Xxxxx X. Xxxxxxxxx
______________________________________
Title: Assistant V.P.
______________________________________
By: /s/ Xxxxxxx Xxxxxxx
______________________________________
Name: Xxxxxxx Xxxxxxx
______________________________________
Title: V.P.
______________________________________
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The undersigned hereby consent to execution by STERLING CHEMICALS, INC.
of the foregoing First Amendment to Credit Agreement, confirms that the Loan
Documents executed by the undersigned apply and shall continue to apply to the
Credit Agreement, as amended by the foregoing First Amendment to Credit
Agreement and acknowledges that without such consent and confirmation, the Agent
and the Banks would not execute the foregoing First Amendment to Credit
Agreement.
STERLING CHEMICALS INTERNATIONAL,
INC., a Delaware corporation
By: /s/ Xxx X. Xxxx
_________________________________________
Xxx X. Xxxx, Vice President
STERLING CHEMICALS MARKETING, INC., a
U.S. Virgin Islands corporation
By: /s/ Xxx X. Xxxx
_________________________________________
Xxx X. Xxxx, Vice President
STERLING CANADA, INC.,
a Delaware corporation
By: /s/ Xxx X. Xxxx
_________________________________________
Xxx X. Xxxx, Vice President-Finance
& Treasurer
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STERLING PULP CHEMICALS US, INC., a
Delaware corporation
By: /s/ Xxx X. Xxxx
______________________________________
Name: Xxx X. Xxxx
______________________________________
Title: Vice President - Finance & Treasurer
______________________________________
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