Exhibit 10.2
CREDIT AGREEMENT
($125,000,000 TERM LOAN FACILITY
AND
$150,000,000 REVOLVING LOAN FACILITY)
dated as of April 13, 1995
AMONG
STERLING CHEMICALS, INC.,
as Borrower;
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
as Agent and as a Lender;
THE BANK OF NOVA SCOTIA,
as Documentation Agent and as a Lender,
ABN AMRO BANK N.V., HOUSTON AGENCY, BANK OF SCOTLAND
and CREDIT LYONNAIS, NEW YORK BRANCH,
as Co-Agents and as Lenders
AND
THE OTHER LENDERS NOW OR HEREAFTER
PARTIES HERETO
TABLE OF CONTENTS
Page
----
1. Definitions.......................................................... 1
1.1 Certain Defined Terms........................................ 1
1.2 Miscellaneous................................................ 17
2. Commitments and Loans................................................ 17
2.1 Loans........................................................ 17
2.2 Letters of Credit............................................ 18
2.3 Terminations or Reductions of Revolving Loan Commitments..... 22
2.4 Fees......................................................... 22
2.5 Several Obligations.......................................... 23
2.6 Notes........................................................ 23
2.7 Use of Proceeds.............................................. 24
2.8 Designated Amount............................................ 24
3. Borrowings, Payments and Prepayments................................. 24
3.1 Borrowings................................................... 24
3.2 Payments; Prepayments........................................ 24
4. Payments; Pro Rata Treatment; Computations, Etc...................... 26
4.1 Payments..................................................... 26
4.2 Pro Rata Treatment........................................... 26
4.3 Certain Actions, Notices, Etc................................ 26
4.4 Non-Receipt of Funds by the Agent............................ 27
4.5 Sharing of Payments, Etc..................................... 28
5. Conditions Precedent................................................. 28
5.1 Initial Loans and Letters of Credit.......................... 28
5.2 All Loans and Letters of Credit.............................. 30
6. Representations and Warranties....................................... 30
6.1 Organization................................................. 30
6.2 Financial Statements......................................... 31
6.3 Enforceable Obligations; Authorization....................... 31
6.4 Other Borrowed Money Indebtedness............................ 31
6.5 Litigation................................................... 31
6.6 Taxes........................................................ 32
6.7 Regulations G, U and X....................................... 32
6.8 Subsidiaries................................................. 32
6.9 No Untrue or Misleading Statements........................... 32
6.10 ERISA........................................................ 32
6.11 Investment Company Act....................................... 32
6.12 Public Utility Holding Company Act........................... 32
6.13 Solvency..................................................... 33
6.14 Compliance................................................... 33
6.15 Environmental Matters........................................ 33
7. Affirmative Covenants................................................ 33
7.1 Taxes, Existence, Regulations, Property, Etc................. 33
7.2 Financial Statements and Information......................... 34
7.3 Financial Tests.............................................. 35
7.4 Inspection................................................... 35
7.5 Further Assurances........................................... 35
7.6 Books and Records............................................ 35
7.7 Insurance.................................................... 35
7.8 Notice of Certain Matters.................................... 36
7.9 Interest Rate Risk........................................... 36
7.10 Capital Adequacy............................................. 36
7.11 ERISA Information and Compliance............................. 37
8. Negative Covenants................................................... 37
8.1 Indebtedness................................................. 37
8.2 Liens........................................................ 38
8.3 Contingent Liabilities....................................... 39
8.4 Mergers, Consolidations and Dispositions and Acquisitions of
Assets...................................................... 39
8.5 Redemption, Dividends and Distributions...................... 40
8.6 Nature of Business........................................... 40
8.7 Transactions with Affiliates................................. 40
8.8 Loans and Investments........................................ 40
8.9 No Subsidiaries.............................................. 40
8.10 BP Lease..................................................... 41
8.11 Fiscal Year.................................................. 42
8.12 Sterling Energy and Sterling Pulp (US)....................... 42
9. Defaults............................................................. 42
9.1 Events of Default............................................ 42
9.2 Right of Setoff.............................................. 45
9.3 Collateral Account........................................... 46
9.4 Preservation of Security for Unmatured Reimbursement
Obligations................................................. 46
9.5 Remedies Cumulative.......................................... 47
ii
10. The Agent............................................................ 47
10.1 Appointment, Powers and Immunities........................... 47
10.2 Reliance..................................................... 48
10.3 Defaults..................................................... 48
10.4 Rights as a Lender........................................... 49
10.5 Indemnification.............................................. 49
10.6 Non-Reliance on Agent and Other Lenders...................... 49
10.7 Failure to Act............................................... 50
10.8 Resignation or Removal of Agent.............................. 50
10.9 No Partnership............................................... 51
11. Miscellaneous........................................................ 51
11.1 Waiver....................................................... 51
11.2 Notices...................................................... 51
11.3 Expenses, Etc................................................ 51
11.4 Indemnification.............................................. 52
11.5 Amendments, Etc.............................................. 53
11.6 Successors and Assigns....................................... 53
11.7 Limitation of Interest....................................... 56
11.8 Survival..................................................... 57
11.9 Captions..................................................... 57
11.10 Counterparts................................................. 57
11.11 Governing Law................................................ 57
11.12 Severability................................................. 57
11.13 Tax Forms.................................................... 57
11.14 Venue........................................................ 58
11.15 Confidentiality.............................................. 58
11.16 Amended and Restated Credit Agreement........................ 59
iii
EXHIBITS
A -- Request for Extension of Credit
B -- Borrowing Base Certificate
C -- Subsidiaries
D -- Term Note
E -- Revolving Note
F -- Assignment and Acceptance
G -- Compliance Certificate
H -- Existing Letters of Credit
SCHEDULES
1 -- Interest Rate Agreement
6.10 -- ERISA Matters
8.1 -- Borrowed Money Indebtedness
8.2 -- Liens
8.3 -- Contingent Liabilities
8.8 -- Existing Investments
iv
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is made and entered into as of April 13, 1995 (the
"Effective Date"), by and among STERLING CHEMICALS, INC., a Delaware corporation
(the "Borrower"); each of the lenders which is or may from time to time become a
party hereto (individually, a "Lender" and, collectively, the "Lenders"); TEXAS
COMMERCE BANK NATIONAL ASSOCIATION ("TCB"), a national banking association, as
agent for the Lenders (in such capacity, together with its successors in such
capacity, the "Agent"), THE BANK OF NOVA SCOTIA, as Documentation Agent, and ABN
AMRO BANK N.V., HOUSTON AGENCY, BANK OF SCOTLAND and CREDIT LYONNAIS, NEW YORK
BRANCH, as Co-Agents.
The parties hereto agree as follows:
1. Definitions.
1.1 Certain Defined Terms.
Unless a particular term, word or phrase is otherwise defined or the
context otherwise requires, capitalized terms, words and phrases used herein or
in the Loan Documents (as hereinafter defined) have the following meanings (all
definitions that are defined in this Agreement in the singular to have the same
meanings when used in the plural and vice versa):
Accounts, Equipment, General Intangibles and Inventory shall have the
respective meanings assigned to them in the Texas Business and Commerce Code in
force on the Effective Date.
Adjusted Fixed Charge Coverage Ratio shall mean, as of any day, the
ratio of (a) EBITDA for the Rolling Four Quarters as of such day less cash
income taxes paid during such Rolling Four Quarters plus cash income tax refunds
received during such Rolling Four Quarters to (b) the Adjusted Fixed Charges for
such Rolling Four Quarters.
Adjusted Fixed Charges shall mean (without duplication), for any period
and with respect to any Person, (a) Fixed Charges for such period plus (b) any
dividends on any equity interests in such Person of any class (except dividends
payable solely in shares of common stock) paid during such period.
Affiliate shall mean any Person controlling, controlled by or under
common control with any other Person. For purposes of this definition, "control"
(including "controlled by" and "under common control with") means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or otherwise. Notwithstanding the foregoing, no
individual shall be deemed to be
an Affiliate of a corporation solely by reason of his or her being an officer or
director of such corporation.
Agreement shall mean this Credit Agreement, as it may from time to time
be amended, modified, restated or supplemented.
Annual Audited Financial Statements shall mean the annual consolidated
financial statements of a Person, including all notes thereto, which statements
shall include a balance sheet as of the end of such fiscal year and an income
statement and a statement of cash flows for such fiscal year, all setting forth
in comparative form the corresponding figures from the previous fiscal year, all
prepared in conformity with GAAP, and accompanied by a report and opinion of
Coopers & Xxxxxxx or other independent certified public accountants reasonably
satisfactory to the Agent, which shall state that such financial statements, in
the opinion of such accountants, present fairly the financial position of such
Person as of the date thereof and the results of its operations for the period
covered thereby in conformity with GAAP. Such statements shall be accompanied by
a certificate of such accountants that in making the appropriate examination in
connection with such report and opinion, such accountants did not become aware
of any Default relating to the financial tests set forth in Section 7.3 hereof
or, if in the opinion of such accountants any such Default exists, a description
of the nature and status thereof.
Applications shall mean all applications and agreements for Letters of
Credit, or similar instruments or agreements, in a form acceptable to the
Borrower and the Issuer and otherwise in Proper Form, now or hereafter executed
by the Borrower in connection with any Letter of Credit now or hereafter issued
or to be issued under the terms hereof at the request of any Person.
Assignment and Acceptance shall have the meaning ascribed to such term
in Section 11.6 hereof.
Bankruptcy Code shall mean the United States Bankruptcy Code, as
amended, and any successor statute.
Borrowed Money Indebtedness shall have the meaning ascribed to it in
Section 8.1 hereof.
Borrowing Base shall mean, as at any date, the amount of the Borrowing
Base shown on the Borrowing Base Certificate then most recently delivered
pursuant to Section 7.2 hereof, determined by calculating the amount equal to:
(i) 85% of the aggregate amount of the Eligible Accounts at said date,
plus
(ii) the lesser of (I) 65% of the sum of (x) the aggregate amount of
Eligible Inventory at said date and (y) seventy-five percent (75%)
of the value (determined in accordance with GAAP) at said date of
materials and
2
supplies which are not Inventory (provided that the amount
determined under this clause (y) shall not exceed $7,000,000) or
(II) the amount determined in clause (i) above.
In the absence of a Borrowing Base Certificate delivered as required by Section
7.2, the Agent shall determine the Borrowing Base from time to time in its
reasonable discretion, taking into account all information reasonably available
to it, and the Borrowing Base from time to time so determined shall be the
Borrowing Base for all purposes of this Agreement until such a Borrowing Base
Certificate, in Proper Form, is furnished to and accepted by the Agent.
Borrowing Base Certificate shall mean a certificate, duly executed by
the chief executive officer, chief financial officer, treasurer or controller of
the Borrower, appropriately completed and in substantially the form of Exhibit B
hereto.
BP shall mean BP Chemicals Americas, Inc., a Delaware corporation, and
its successors.
BP Lease shall mean that certain Amended and Restated Lease and
Production Agreement dated August 8, 1994, executed by and between BP Chemicals,
Inc. and the Borrower, as the same may from time to time be amended, modified,
restated or supplemented.
Business Day shall mean any day other than a day on which commercial
banks are authorized or required to close in Houston, Texas or in New York City,
New York.
Canadian Facility shall mean that certain Credit Agreement executed or
to be executed, in Proper Form, by and between Sterling Pulp Chemicals, Ltd. and
The Bank of Nova Scotia, as the same may be amended, restated or supplemented.
The unpaid principal balance of the Canadian Facility, together with the
aggregate face amount of letters of credit issued under the Canadian Facility,
shall not exceed Canadian $20,000,000.
Canadian Subsidiary shall mean any Subsidiary of the Borrower which is
organized and exists under the laws of Canada or any province thereof.
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), and (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. 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
3
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.
Capital Lease Obligations shall mean, as to any Person, the obligations
of such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real and/or personal property, which obligations are
required to be classified and accounted for as a capital lease on a balance
sheet of such Person under GAAP (including Statement of Financial Accounting
Standards No. 13 of the Financial Accounting Standards Board, as amended) and,
for purposes of this Agreement, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP (including such
Statement No. 13). Capital Lease Obligations shall not include the interest
component of any applicable rental payment.
Ceiling Rate shall have the meaning assigned to it in the Interest Rate
Agreement.
Change of Control shall mean a change resulting when any Unrelated
Person or any Unrelated Persons acting together which would constitute a Group
together with any Affiliates or Related Persons thereof (in each case also
constituting Unrelated Persons) shall at any time either (i) Beneficially Own
more than 50% of the aggregate voting power of all classes of Voting Stock of
the Borrower or (ii) succeed in having sufficient of its or their nominees
elected to the Board of Directors of the Borrower such that such nominees, when
added to any existing director remaining on the Board of Directors of the
Borrower after such election who is an Affiliate or Related Person of such
Person or Group, shall constitute a majority of the Board of Directors of the
Borrower. As used herein (a) "Beneficially Own" means "beneficially own" as
defined in Rule 13d-3 of the Securities Exchange Act of 1934, as amended, or any
successor provision thereto; provided, however, that, for purposes of this
definition, a Person shall not be deemed to Beneficially Own securities tendered
pursuant to a tender or exchange offer made by or on behalf of such Person or
any of such Person's Affiliates until such tendered securities are accepted for
purchase or exchange; (b) "Group" means a "group" for purposes of Section 13(d)
of the Securities Exchange Act of 1934, as amended; (c) "Unrelated Person" means
at any time any Person other than the Borrower or any of its Subsidiaries and
other than any trust for any employee benefit plan of the Borrower or any of its
Subsidiaries; (d) "Related Person" of any Person shall mean any other Person
owning (1) 5% or more of the outstanding common stock of such Person or (2) 5%
or more of the Voting Stock of such Person; and (e) "Voting Stock" of any Person
shall mean capital stock of such Person which ordinarily has voting power for
the election of directors (or persons performing similar functions) of such
Person, whether at all times or only so long as no senior class of securities
has such voting power by reason of any contingency.
Code shall mean the Internal Revenue Code of 1986, as amended, as now or
hereafter in effect, together with all regulations, rulings and interpretations
thereof or thereunder by the Internal Revenue Service.
4
Collateral shall mean all Property, tangible or intangible, real,
personal or mixed, now or hereafter subject to the Security Agreements.
Commitment Fee Percentage shall mean:
(a) on any day prior to the first adjustment after the date hereof
pursuant to clause (b) of this definition, 0.25%;
(b) the Commitment Fee Percentage for any day shall be the applicable
per annum percentage set forth at the appropriate intersection in the table
shown below, based on the Debt to EBITDA Ratio as of the last day of each March,
June, September and December (beginning with the fiscal quarter ending on June
30, 1995) (such increase or decrease to be effective on the date that Borrower
delivers the Quarterly Financial Statements to the Agent pursuant to the terms
of this Agreement):
Debt to Commitment Fee
EBITDA Ratio Percentage
Greater than or equal to 3.50 0.375
Greater than or equal to
2.50 but less than 3.50 0.30
Greater than or equal to
1.50 but less than 2.50 0.25
Less than 1.50 0.20
Compliance Certificate shall have the meaning given to it in Section 7.2
hereof.
Contribution Agreement shall mean that certain Contribution Agreement
dated concurrently herewith executed by and among the Borrower and its
Subsidiaries, as the same may be amended, modified, supplemented and restated--
and joined in pursuant to a joinder agreement--from time to time.
Controlled Group shall mean all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414 of the Code.
Corporation shall mean a corporation, limited liability company,
partnership, joint venture, joint stock association, business trust and other
business entity.
5
Cover for Letter of Credit Liabilities shall mean the payment to the
Agent in immediately available funds, to be held by the Agent in a collateral
account maintained by the Agent at its Principal Office and collaterally
assigned as security by the Borrower for the Reimbursement Obligations using
documentation reasonably satisfactory to the Agent, in the amount required by
any applicable provision hereof. Such amount shall be retained by the Agent in
such collateral account until such time as no Default or Event of Default is
continuing.
Current Assets shall mean all assets of a Person which under GAAP would
be classified as current assets.
Current Liabilities shall mean all liabilities of a Person which under
GAAP would be classified as current liabilities, other than current maturities
of long term debt and the obligation to repay the Revolving Loan Obligations and
any Borrowed Money Indebtedness under the Canadian Facility.
Current Ratio means, as of any day, the ratio of Current Assets to
Current Liabilities.
Debt to EBITDA Ratio shall mean, as of the last day of any fiscal
quarter, the ratio of (a) the outstanding balance of Borrowed Money Indebtedness
on such date to (b) EBITDA for the Rolling Four Quarters ending on such date.
Default shall mean an Event of Default or an event which with notice or
lapse of time or both would, unless cured or waived, become an Event of Default.
Designated Amount shall have the meaning ascribed to such term in
Section 2.8 hereof.
Dollar Equivalent shall mean the equivalent in another currency of an
amount in Dollars to be determined by reference to the exchange quoted by TCB at
10:00 a.m. (Houston time) on the date of determination, for the spot purchase in
the foreign exchange market of such amount of Dollars with such other currency.
Dollars and $ shall mean lawful money of the United States of America.
EBITDA shall mean, without duplication, for any period the sum of (a)
Net Income less non-cash income and (b) the sum of (i) Interest Expense for such
period, (ii) Federal, state and local income taxes deducted in determining such
Net Income, (iii) amortization of goodwill and other non-cash expenses and
intangibles (including, without limitation, patents, deferred financing costs
and debt discount) deducted in determining such Net Income, (iv) depreciation,
depletion and obsolescence of Property, in each case, determined in accordance
with GAAP and (v) prepaid royalty income to the extent actually paid in cash.
6
Eligible Accounts shall mean, as at any date of determination thereof,
each Account or General Intangible for the payment of money, in each case valued
in accordance with GAAP, which is at said date payable to the Borrower or any of
its Subsidiaries and which complies with the following requirements: (a) in the
case of the sale of goods, the subject goods have been sold to an account debtor
on an absolute sale basis on open account and not on consignment, on approval or
on a "sale or return" basis or subject to any other repurchase or return
agreement and no material part of the subject goods has been returned, rejected,
lost or damaged, the Account or General Intangible is not evidenced by chattel
paper or an instrument of any kind and said account debtor is not insolvent or
the subject of any bankruptcy or insolvency proceedings of any kind; (b) the
account debtor must be located in the United States or in Canada, except for (x)
Accounts or General Intangibles as to which the Borrower or the applicable
Subsidiary and the Agent have mutually and reasonably agreed shall be included
and (y) Accounts or General Intangibles as to which the Borrower or the
applicable Subsidiary has received a letter of credit in an amount equal to or
greater than such Account or General Intangibles issued by a financial
institution reasonably acceptable to the Agent and otherwise in form and
substance reasonably satisfactory to the Agent; (c) to the extent included as an
Eligible Account, such Account or General Intangible is a valid obligation of
the account debtor thereunder and is not subject to any offset or other defense
on the part of such account debtor or to any claim on the part of such account
debtor denying liability thereunder; (d) such Account or General Intangible is
subject to no Lien whatsoever, except for the Liens created or permitted
pursuant to the Security Agreements; (e) such Account or General Intangible is
evidenced by an invoice submitted to the account debtor and such Account or
General Intangible has not remained unpaid beyond 90 days after the due date
stated on the invoice therefor (or such Account or General Intangible is not
invoiced in the ordinary course of business but by the terms of the agreements
creating such Account or General Intangible, such Account or General Intangible
has not remained unpaid beyond ninety (90) days after the due date therefor);
(f) such Account or General Intangible does not arise out of transactions with
any Affiliate of the Borrower or an employee, officer, agent or director of the
Borrower or any Affiliate of the Borrower; (g) not more than 20% of the other
Accounts or General Intangibles of the applicable account debtor or any of its
Affiliates owed to the Borrower or any of its Subsidiaries fail to satisfy all
of the requirements of an "Eligible Account"; (h) except as Agent may otherwise
agree, inclusion of the applicable Account or General Intangible does not cause
the total Eligible Accounts with respect to the applicable account debtor and
its Affiliates, in the aggregate, to exceed 15% of the total Eligible Accounts;
(i) each of the representations and warranties set forth in the Security
Agreements with respect thereto is true and correct in all material respects on
such date, and (j) the Agent, on behalf of the Lenders, shall have a first-
priority perfected Lien covering such Account or General Intangible or, in the
case of the Canadian Subsidiaries, the Agent, on behalf of the Lenders, shall
have a first-priority perfected Lien in and to 65% of the issued and outstanding
equity interests of such Subsidiary and in and to 100% of the issued and
outstanding equity interests of Sterling Canada, in each case to the extent
required by and in accordance with the applicable Security Agreement.
7
Eligible Inventory shall mean, as at any date of determination thereof,
Inventory of the Borrower and its Subsidiaries which complies with the following
requirements: (a) such Inventory shall be valued in accordance with GAAP and
consist of (i) raw materials and (ii) finished goods; (b) it is in good
condition, meets all standards imposed by any Governmental Authority having
regulatory authority over it, its use and/or sale and is either currently usable
or currently salable in the normal course of business of the Borrower and its
Subsidiaries; (c) except for (x) Inventory having a value up to but no more than
$15,000,000 and (y) Inventory which is in transit in the ordinary course of
business but in respect of which title remains in Borrower or the applicable
Subsidiary of Borrower and which is fully insured, it is not (1) located outside
the United States of America or Canada or (2) in the possession or control of
any warehouseman, bailee, or any agent or processor for or customer of the
Borrower or its Subsidiaries or, if it is, the Borrower or its Subsidiaries
shall have notified, in a manner that effectively under applicable law creates a
valid and first priority Lien in favor of the Agent, on behalf of the Lenders,
in such Inventory, such warehouseman, bailee, agent, processor or customer of
the Agent's Lien and such warehouseman, bailee, agent, processor or customer has
subordinated any Lien it may claim therein and agreed to hold all such Inventory
for the Agent's account subject to the Agent's instructions; (d) each of the
representations and warranties set forth in the Security Agreements with respect
thereto is true and correct in all material respects on such date, and (e) the
Agent, on behalf of the Lenders, shall have a first-priority perfected Lien
covering such Inventory or, in the case of the Inventory of the Canadian
Subsidiaries, the Agent shall, on behalf of the Lenders, have a first-priority
perfected Lien in and to 65% of the issued and outstanding equity interests of
such Subsidiary and in and to 100% of the issued and outstanding equity
interests of Sterling Canada, in each case to the extent required by and in
accordance with the applicable Security Agreement.
Environmental Claim shall mean any third party (including Governmental
Authorities) action, lawsuit, claim or proceeding (including claims or
proceedings at common law) which seeks to impose liability for (i) noise; (ii)
pollution or contamination of the air, surface water, ground water or land or
the clean up of such pollution or contamination; (iii) solid, gaseous or liquid
waste generation, handling, treatment, storage, disposal or transportation; (iv)
exposure to Hazardous Substances; or (v) the manufacture, processing,
distribution in commerce or use of Hazardous Substances. An "Environmental
Claim" includes, but is not limited to, a common law action, as well as a
proceeding to issue, modify or terminate an Environmental Permit.
Environmental Liabilities includes all liabilities arising from any
Environmental Claim, Environmental Permit or Requirement of Environmental Law
under any theory of recovery, at law or in equity, and whether based on
negligence, strict liability or otherwise, including but not limited to:
remedial, removal, response, abatement, investigative, monitoring, personal
injury and damage to property or injuries to persons, and any other related
costs, expenses, losses, damages, penalties, fines, liabilities and obligations,
and all costs and expenses necessary to cause the issuance, reissuance or
renewal of any Environmental Permit including reasonable attorneys' fees and
court costs.
8
Environmental Permit means any permit, license, approval or other
authorization under any applicable Requirements of Environmental Law.
ERISA shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.
Event of Default shall have the meaning assigned to it in Section 9
hereof.
Existing Letters of Credit shall mean the letters of credit described on
Exhibit H hereto.
Federal Funds Rate shall have the meaning assigned to it in the Interest
Rate Agreement.
Financing Statements shall mean all such Uniform Commercial Code
financing statements as the Agent shall require, in Proper Form, duly executed
by the Borrower or others to give notice of and to perfect or continue
perfection of the Agent's Liens in all Collateral, as any of the foregoing may
from time to time be amended, modified, supplemented or restated.
Fixed Charge Coverage Ratio shall mean, as of the last day of any fiscal
quarter, the ratio of (a) EBITDA for the Rolling Four Quarters ending on such
day less cash income taxes paid during such Rolling Four Quarters plus cash
income tax refunds received during such Rolling Four Quarters to (b) the Fixed
Charges for such Rolling Four Quarters.
Fixed Charges shall mean (without duplication), for any period, (a) the
amounts of scheduled principal payments made or to be made during such period
with respect to Borrowed Money Indebtedness (other than Capital Lease
Obligations) of the applicable Person (it is agreed that such scheduled
principal payments do not include any principal payments made to reduce any
Revolving Loan Obligations or other revolving Indebtedness), plus (b) payments
made or required to be made during such period with respect to the principal
component of the Capital Lease Obligations of the applicable Person with
unrelated third parties, plus (c) the amount of Interest Expense for such
period, plus (d) Capital Expenditures made during such period.
GAAP shall mean generally accepted accounting principles as in effect
from time to time, applied on a basis consistent (except for changes concurred
in by the Borrower's independent public accountants) with the September 30, 1994
audited financial statements of the Borrower delivered to the Lenders together
with the notes thereto.
Governmental Authority shall mean any foreign governmental authority,
the United States of America, any State of the United States and any political
subdivision of any of the foregoing, and any central bank, agency, department,
commission, board, bureau, court or other tribunal having jurisdiction over the
Agent, any Lender, the Borrower or any of the Borrower's Subsidiaries or their
respective Property.
9
Guaranties shall mean those certain Guaranties dated concurrently
herewith executed by the Subsidiaries of Borrower (other than Sterling Energy,
Sterling Pulp (US) and other than Canadian Subsidiaries), together with any
other guaranties hereafter executed with respect to the Obligations, as any of
the same may from time to time be amended, modified, restated or supplemented.
Hazardous Substance shall mean petroleum products, and any hazardous or
toxic waste or substance defined or regulated as such from time to time by any
law, rule, regulation or order described in the definition of "Requirements of
Environmental Law".
Indebtedness shall mean and include (a) all items which in accordance
with GAAP would be included on the liability side of a balance sheet on the date
as of which Indebtedness is to be determined (excluding capital stock, surplus,
surplus reserves and deferred credits); (b) all guaranties, letter of credit
contingent reimbursement obligations, endorsements and other contingent
obligations in respect of, or any obligations to purchase or otherwise acquire,
Indebtedness of others, and (c) all Indebtedness secured by any Lien existing on
any interest of the Person with respect to which Indebtedness is being
determined in Property owned subject to such Lien whether or not the
Indebtedness secured thereby shall have been assumed; provided, that the term
"Indebtedness" shall not mean or include any Indebtedness of the type described
in clause (a) of this definition in respect of which monies sufficient to pay
and discharge the same in full (either on the expressed date of maturity thereof
or on such earlier date as such Indebtedness may be duly called for redemption
and payment) shall be deposited with a depository, agency or trustee acceptable
to the Agent in trust for the payment thereof.
Interest Expense shall mean, for any period, the sum of the interest
payments by an obligor made or accrued in accordance with GAAP during such
period in connection with all of its Borrowed Money Indebtedness, including the
interest component of any Capital Lease Obligations.
Interest Rate Agreement shall mean the Interest Rate Agreement attached
hereto as Schedule 1, as it may from time to time be amended, modified, restated
or supplemented.
Interest Rate Risk Agreement shall mean an interest rate swap agreement,
interest rate cap agreement or similar arrangement entered into between the
Borrower and one or more financial institutions for the purpose of reducing
Borrower's exposure to interest rate risk and not for speculative purposes, as
it may from time to time be amended, modified, restated or supplemented from
time to time.
Interest Rate Risk Indebtedness shall mean all obligations and
Indebtedness of the Borrower with respect to the program for the hedging of
interest rate risk provided for in any Interest Rate Risk Agreement.
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Investment shall mean the purchase or other acquisition of any
securities or Indebtedness of, or the making of any loan, advance, or other
extension of credit or capital contribution to (by means of transfers of
property or assets or otherwise) any Person.
Issuer shall mean the issuer of a Letter of Credit under this Agreement.
Legal Requirement shall mean any law, statute, ordinance, decree,
requirement, order, judgment, rule, or regulation (or interpretation of any of
the foregoing) of, and the terms of any license or permit issued by, any
Governmental Authority, whether presently existing or arising in the future.
Letter of Credit shall have the meaning assigned to such term in Section
2.2 hereof.
Letter of Credit Liabilities shall mean, at any time and in respect of
any Letter of Credit, the sum of (i) the amount available for drawings under
such Letter of Credit plus (ii) the aggregate unpaid amount of all Reimbursement
Obligations at the time due and payable in respect of previous drawings made
under such Letter of Credit. For the purpose of determining at any time the
amount described in clause (i), in the case of any Letter of Credit payable in a
currency other than Dollars, such amount shall equal the Dollar Equivalent of
the face amount of such Letter of Credit.
Lien shall mean any mortgage, pledge, charge, encumbrance, security
interest, collateral assignment or other lien of any kind, whether based on
common law, constitutional provision, statute or contract to secure payment of
debt or performance of an obligation.
Loans shall mean the loans provided for by Section 2.1 hereof.
Loan Documents shall mean, collectively, this Agreement, the Notes, the
Interest Rate Agreement, all Applications, the Guaranties, the Contribution
Agreement, the Security Agreements, the Notice of Entire Agreement, all
instruments, certificates and agreements now or hereafter executed or delivered
to the Agent or any Lender pursuant to any of the foregoing or in connection
with the Obligations or any commitment regarding the Obligations, and all
amendments, modifications, renewals, extensions, increases and rearrangements
of, and substitutions for, any of the foregoing.
Majority Lenders shall mean, at any time while no Loans are outstanding,
Lenders having greater than 66-2/3% of the aggregate amount of Revolving Loan
Commitments, and at any time while Loans are outstanding, Lenders having greater
than 66-2/3% of the aggregate amount of Term Loans outstanding plus Revolving
Loan Commitments outstanding.
Margin Percentage shall have the meaning ascribed to such term in the
Interest Rate Agreement.
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Material Adverse Effect shall mean a material adverse effect on the
business, financial condition, operations or Properties of the Borrower and its
Subsidiaries, taken as a whole, or on the ability of any of them to perform
their respective material obligations under any Loan Document to which any of
them is a party.
Maturity Date shall mean the maturity of the Notes, April 13, 2002, as
the same may hereafter be accelerated pursuant to the provisions of any of the
Loan Documents.
Maximum Revolving Loan Available Amount shall mean, at any date, an
amount equal to the lesser of (i) the aggregate of the Revolving Loan
Commitments or (ii) the Borrowing Base less the Dollar Equivalent of the then
current unpaid principal balance of the Canadian Facility.
Net Income shall mean, for any Person and any period, the consolidated
net income of such Person for such period after taxes but before extraordinary
items, determined in accordance with GAAP.
Net Worth shall mean net worth determined in accordance with GAAP.
Notes shall have the meaning assigned to such term in Section 2.6
hereof.
Notice of Entire Agreement shall mean a notice of entire agreement, in
Proper Form, executed by the Borrower, the Agent and each other Party, as the
same may from time to time be amended, modified, supplemented or restated.
Obligations shall mean, as at any date of determination thereof, the sum
(without duplication) of the following: (i) the aggregate principal amount of
Loans outstanding hereunder, plus (ii) the aggregate amount of the Letter of
Credit Liabilities hereunder, plus (iii) all other liabilities, obligations and
indebtedness of any Party under any Loan Document.
Organizational Documents shall mean, with respect to a corporation, the
certificate of incorporation, articles of incorporation and bylaws of such
corporation; with respect to a partnership, the partnership agreement
establishing such partnership; with respect to a joint venture, the joint
venture agreement establishing such joint venture, and with respect to a trust,
the instrument establishing such trust; in each case including any and all
modifications thereof.
Parties shall mean the Borrower and each of its Subsidiaries executing a
Loan Document.
Past Due Rate shall mean, on any day, a rate per annum equal to the
lesser of (i) the Ceiling Rate for that day or (ii) the Base Rate (as defined in
the Interest Rate Agreement) plus two percent (2%).
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PBGC shall mean the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
Permitted Acquisitions shall mean non-hostile acquisitions of all or
substantially all of the assets, or 50% or more of the voting securities, of any
Person (or any division or product line of such Person), but only so long as no
Default or Event of Default shall have occurred and be continuing (or would
result from such acquisition).
Permitted Dividends shall mean an amount not to exceed 50% of Net Income
of the Borrower for the immediately preceding Rolling Four Quarters which may,
so long as no Default or Event of Default shall have occurred and be continuing
(or would result from such distribution) and so long as the Adjusted Fixed
Charge Coverage Ratio for the Borrower and its Subsidiaries is not (and would
not be, after giving effect to such distribution) less than 1.10 to 1.00, be
distributed by the Borrower so long as the Borrower has delivered to the Agent a
Compliance Certificate calculated after giving effect to the proposed
distribution which indicates that such distribution complies with the terms of
this Agreement.
Permitted Investments shall mean: (a) certificates of deposit maturing
within 90 days of the acquisition thereof and issued by a bank or trust company
organized under the laws of the United States of America or a State thereof,
having combined capital and surplus of at least $250,000,000 and which has (or
which is a Subsidiary of a bank holding company which has) publicly traded debt
securities rated A or higher by Standard and Poor's Corporation and A-2 or
higher by Xxxxx'x Investors Service, Inc.; (b) obligations issued or guaranteed
by the United States of America; (c) commercial paper with a published rating of
not less than A-2 and P-2 (or the equivalent rating); (d) repurchase obligations
for underlying securities of the type described in clauses (a), (b) or (c) above
entered into on a fully collateralized basis with any Lender; (e) dollar
denominated time deposits with, including certificates of deposit issued by, any
non-United States branch or office of any Lender; (f) Permitted Acquisitions;
(g) securities (other than those securities described in clauses (a) through (e)
of this definition) of money market mutual funds with net assets in excess of
$100,000,000, provided that the investment amounts in securities described in
this clause (g) may not exceed 5% of the issued and outstanding securities of
any Person (or such lesser percentage as would constitute a controlling
interest), irrespective of whether such securities having voting power or may be
convertible to securities with voting power of any Person; (h) loan
participations with a rating of not less than A-2 and P-2 (or the equivalent
rating) by Xxxxx'x Investors Service, Inc. and Standard and Poor's Corporation,
respectively; (i) money market preferred stock with a rating of not less than
AAA (or the equivalent rating); (j) other investments approved by Agent in
writing not exceeding, in the aggregate, $20,000,000, and (k) other investments
approved by the Majority Lenders in writing.
Person shall mean any individual, Corporation, trust, unincorporated
organization, Governmental Authority or any other form of entity.
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Plan shall mean an employee pension benefit plan (as such term is
defined in Section 3(2) of ERISA) which is covered by Title IV of ERISA or
subject to the minimum funding standards under Section 412 of the Code or
Section 302 of ERISA and (a) which is maintained by the Borrower or any member
of the Controlled Group for employees of the Borrower or any member of the
Controlled Group or (b) as to which the Borrower or any member of the Controlled
Group may have any liability.
Principal Office shall mean the principal office of the Agent, presently
located at 000 Xxxx Xxxxxx, Xxxxxxx, Xxxxxx Xxxxxx, Xxxxx 00000.
Proper Form shall mean in form and substance reasonably satisfactory to
the Agent.
Property shall mean any interest in any kind of property or asset,
whether real, personal or mixed, tangible or intangible.
Quarterly Dates shall mean the first day of each April, July, October
and January, provided that if any such date is not a Business Day, then the
relevant Quarterly Date shall be the next succeeding Business Day.
Quarterly Financial Statements shall mean the quarterly financial
statements of a Person, including all notes thereto, which statements shall
include a balance sheet as of the end of a fiscal quarter and an income
statement and a statement of changes in financial position for such fiscal
quarter and for the fiscal year to date, subject to normal adjustments, all
setting forth in comparative form the corresponding figures for the
corresponding calendar quarter of the preceding year, prepared in accordance
with GAAP and certified as true and correct to the best of his knowledge by the
chief financial officer or other authorized officer of such Person.
Regulatory Change shall mean with respect to any Lender, any change
after the date of this Agreement in any Legal Requirement (including, without
limitation, Regulation D) or the adoption or making on or after such date of any
interpretation, directive or request applying to a class of financial
institutions including such Lender under any Legal Requirements (whether or not
having the force of law) by any Governmental Authority.
Reimbursement Obligations shall mean, as at any date, the obligations of
the Borrower then outstanding, or which may thereafter arise, in respect of
Letters of Credit under this Agreement, to reimburse the applicable Issuers for
the amount paid by such Issuers in respect of any drawing under such Letters of
Credit, which obligations shall at all times be payable in Dollars
notwithstanding any such Letter of Credit being payable in a currency other than
Dollars.
Request for Extension of Credit shall mean a request for extension of
credit duly executed by the chief executive officer, chief financial officer or
treasurer of the Borrower (or other Person
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designated in writing by any of the foregoing to whom authority has been
properly delegated), appropriately completed and substantially in the form of
Exhibit A attached hereto.
Requirements of Environmental Law shall mean all requirements imposed by
any law (including for example and without limitation The Comprehensive
Environmental Response, Compensation, and Liability Act), rule, regulation, or
order of any federal, state or local executive, legislative, judicial,
regulatory or administrative agency, board or authority at the applicable time
which relate to (i) noise; (ii) pollution, protection or clean up of the air,
surface water, ground water or land; (iii) solid, gaseous or liquid waste
generation, treatment, storage, disposal or transportation; (iv) exposure to
Hazardous Substances; or (v) regulation of the manufacture, processing,
distribution in commerce, use, discharge or storage of Hazardous Substances.
Revolving Loan shall mean a Loan made pursuant to Section 2.1(b) hereof.
Revolving Loan Availability Period shall mean, for each Revolving Loan
Lender, the period from and including the Effective Date to (but not including)
the Termination Date.
Revolving Loan Lender shall mean each Lender with (i) prior to the
Termination Date, a Revolving Loan Commitment and (ii) on and after the
Termination Date, any outstanding Revolving Loan Obligations.
Revolving Loan Commitment shall mean, as to any Lender, the obligation,
if any, of such Lender to make Revolving Loans and incur Letter of Credit
Liabilities in an aggregate principal amount at any one time outstanding up to
(but not exceeding) the amount, if any, set forth opposite such Lender's name on
the signature pages hereof under the caption "Revolving Loan Commitment", or
otherwise provided for in an Assignment and Acceptance Agreement (as the same
may be reduced from time to time pursuant to Section 2.3 hereof).
Revolving Loan Commitment Percentage shall mean, as to any Revolving
Loan Lender, the percentage equivalent of a fraction the numerator of which is
the amount of such Lender's Revolving Loan Commitment and the denominator of
which is the aggregate amount of the Revolving Loan Commitments of all Lenders.
Revolving Loan Obligations shall mean, as at any date of determination
thereof, the sum of the following (determined without duplication): (i) the
aggregate principal amount of Revolving Loans outstanding hereunder plus (ii)
the aggregate amount of the Letter of Credit Liabilities hereunder.
Revolving Notes shall mean the Notes of the Borrower evidencing the
Revolving Loans, in the form of Exhibit E hereto.
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Rolling Four Quarters shall mean, as of any day, the then most recently
ended four (4) fiscal quarter period of the Borrower.
Secretary's Certificate shall mean a certificate, in Proper Form, of the
Secretary or an Assistant Secretary of a corporation as to (a) the resolutions
of the Board of Directors of such corporation authorizing the execution,
delivery and performance of the documents to be executed by such corporation;
(b) the incumbency and signatures of the officers of such corporation executing
such documents on behalf of such corporation, and (c) the Organizational
Documents of such corporation.
Security Agreements shall mean, collectively, (i) the Security
Agreements dated as of the Effective Date executed between the Borrower and the
Agent covering the Borrower's Accounts and Inventory, the BP Lease, all of the
issued and outstanding equity interests in and to Sterling Canada and certain
other contract rights, and all other Property therein described, and securing
the Obligations, (ii) the Security Agreement dated as of the Effective Date
executed between Sterling Canada and the Agent covering 65% of the issued and
outstanding equity interest in and to the Canadian Subsidiaries, (iii) the
Security Agreement dated as of the Effective Date executed between the
Subsidiaries of the Borrower (other than Sterling Energy, Sterling Pulp (US) and
the Canadian Subsidiaries) and the Agent covering all of the Accounts and
Inventory of such Subsidiaries of the Borrower, and all other Property therein
described, and securing, without limitation, the Guaranties, and (iv) any and
all security instruments hereafter executed by any Party in favor of the Agent,
as any of them may from time to time be amended, modified, restated or
supplemented.
Sterling Canada shall mean Sterling Canada, Inc., a Delaware corporation
and a wholly-owned Subsidiary of the Borrower.
Sterling Energy shall mean Sterling Chemicals Energy, Inc., a Delaware
corporation.
Sterling Pulp (US) shall mean Sterling Pulp Chemicals US, Inc., a
Delaware corporation.
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, the Reimbursement Obligations 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.
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Subsidiary shall mean, as to a particular parent Corporation, any
Corporation of which more than 50% of the indicia of equity rights (whether
outstanding capital stock or otherwise) is at the time directly or indirectly
owned by, such parent Corporation.
Term Loan shall mean a Loan made pursuant to Section 2.1(a) hereof.
Term Loan Lender shall mean each Lender with a Term Loan outstanding.
Term Notes shall mean the Notes of the Borrower evidencing the Term
Loans, in the form of Exhibit D hereto.
Termination Date shall mean the earlier of (a) the Maturity Date or (b)
the date specified by the Agent in accordance with Section 9.1 hereof.
Texas Credit Code shall mean Title 79, Texas Revised Civil Statutes,
1925, as amended.
Unfunded Vested Liabilities shall mean, with respect to any Plan, at any
time, the amount (if any) by which (a) the present value of all vested
nonforfeitable benefits under such Plan exceeds (b) the fair market value of all
Plan assets allocable to such benefits, all determined as of the then most
recent valuation date for such Plan, but only to the extent that such excess
represents a potential liability of the Borrower or any member of the Controlled
Group to the PBGC or such Plan under Title IV of ERISA.
Welfare Plan shall mean a "welfare plan," as such term is defined in
Section 3(1) of ERISA.
2 Miscellaneous. The words "hereof," "herein," and "hereunder" and words
of similar import when used in this Agreement shall refer to this Agreement as a
whole and not any particular provision of this Agreement.
2. Commitments and Loans.
1 Loans. Each Lender severally agrees, subject to all of the terms and
conditions of this Agreement (including, without limitation, Sections 5.1 and
5.2 hereof), to make Loans as follows:
(a) Term Loans. On the Effective Date, each Term Loan Lender shall make
a loan to the Borrower in the amount set forth opposite such Term Loan Lender's
signature on the signature pages of this Agreement.
(b) Revolving Loans. From time to time on or after the Effective Date
and during the applicable Revolving Loan Availability Period, each Revolving
Loan Lender shall make loans under this Section 2.1(b) to the Borrower in an
aggregate principal amount at any one time
17
outstanding (including its Revolving Loan Commitment Percentage of all Letter of
Credit Liabilities at such time) up to but not exceeding such Lender's Revolving
Loan Commitment Percentage of the Maximum Revolving Loan Available Amount (if
the aggregate amount of the outstanding Revolving Loan Obligations after giving
effect to a request under this Section exceeds the then current Designated
Amount, the Designated Amount shall be automatically increased by the amount of
such excess and the fees provided for in Section 2.4(c) hereof shall be due and
payable). Subject to the conditions in this Agreement, any such Revolving Loan
repaid prior to the Termination Date may be reborrowed pursuant to the terms of
this Agreement; provided, that any and all such Revolving Loans shall be due and
payable in full on the Termination Date. The Borrower, the Agent and the Lenders
agree that Chapter 15 of the Texas Credit Code shall not apply to this
Agreement, the Revolving Notes or any Revolving Loan Obligation. The aggregate
of all Revolving Loans to be made by the Lenders in connection with a particular
borrowing shall be equal to $1,000,000 or a multiple of $100,000 in excess of
$1,000,000.
2.2 Letters of Credit.
(a) Letters of Credit. Subject to the terms and conditions of this
Agreement, and on the condition that aggregate Letter of Credit Liabilities
shall never exceed $20,000,000, the Borrower shall have the right to, in
addition to Loans provided for in Section 2.1 hereof, utilize the Revolving Loan
Commitments from time to time during the Revolving Loan Availability Period to
obtain the issuance, increase or extension of letters of credit for the account
of the Borrower or any of its Subsidiaries and on behalf of the Borrower or any
of its Subsidiaries as herein provided if the Borrower shall so request in the
notice referred to in Section 2.2(b)(i) hereof (such letters of credit, together
with the Existing Letters of Credit, as any of them may be amended,
supplemented, extended or confirmed from time to time, being herein collectively
called the "Letters of Credit)". Upon the date of the issuance, increase or
extension of a Letter of Credit (or, in the case of the Existing Letters of
Credit, on the Effective Date), the applicable Issuer shall be deemed, without
further action by any party hereto, to have sold to each Revolving Loan Lender,
and each such Lender shall be deemed, without further action by any party
hereto, to have purchased from such Issuer, a participation, to the extent of
such Lender's Revolving Loan Commitment Percentage, in such Letter of Credit and
the related Letter of Credit Liabilities. No Letter of Credit issued, increased
or extended pursuant to this Agreement shall, unless approved by the Lenders in
writing, have an expiration date later than one year from date of issuance (or,
if extendable beyond such one year period, shall be cancelable upon notice given
by the Issuer to the beneficiary of such Letter of Credit at least 30 days
before the automatic extension of such Letter of Credit). No Letter of Credit
shall have an expiration date after the end of the Revolving Loan Availability
Period unless the Lenders shall have approved the same in writing. TCB agrees
that it shall be the Issuer of each Letter of Credit where so designated by the
Borrower; provided that the current issuers of the Existing Letters of Credit
shall continue as the Issuer with respect thereto and provided, further, that
the Borrower may, at its option (and with the approval of the applicable
Lender), designate any other Lender to be the Issuer in respect of any Letter of
Credit.
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(b) Additional Provisions. The following additional provisions shall
apply to each Letter of Credit:
(i) The Borrower shall give the Agent notice requesting each
issuance, increase or extension of a Letter of Credit hereunder as provided in
Section 4.3 hereof and shall furnish such additional information regarding such
transaction as the Agent may reasonably request. Upon receipt of such notice,
the Agent shall promptly notify the Issuer and each other Revolving Loan Lender
of the contents thereof and of such Lender's Revolving Loan Commitment
Percentage of the amount of such proposed Letter of Credit.
(ii) No Letter of Credit may be issued, increased or extended if
after giving effect thereto the sum of (A) the aggregate outstanding principal
amount of Revolving Loans plus (B) the aggregate Letter of Credit Liabilities
would exceed the Maximum Revolving Loan Available Amount. On each day during the
period commencing with the issuance, increase or extension of any Letter of
Credit and until such Letter of Credit shall have expired or been terminated,
the Revolving Loan Commitment of each Revolving Loan Lender shall be deemed to
be utilized for all purposes hereof in an amount equal to such Lender's
Revolving Loan Commitment Percentage of the sum of the amount then available for
drawings under such Letter of Credit plus any unpaid and outstanding
Reimbursement Obligations relating to Letters of Credit which have already been
drawn against.
(iii) Upon receipt from the beneficiary of any Letter of Credit
of any demand for payment thereunder, Issuer shall promptly notify the Agent
and, thereafter, the Agent shall promptly notify the Borrower and each Lender as
to the amount to be paid as a result of such demand and the payment date. If at
any time any Issuer shall have made a payment to a beneficiary of a Letter of
Credit in respect of a drawing or in respect of an acceptance created in
connection with a drawing under such Letter of Credit, each Revolving Loan
Lender will pay to the Agent, for the account of the Issuer, immediately upon
demand by such Issuer at any time during the period commencing after such
payment until reimbursement thereof in full by the Borrower, an amount equal to
such Lender's Revolving Loan Commitment Percentage of such payment, together
with interest on such amount for each day from the date of demand for such
payment (or, if such demand is made after 11:00 a.m. Houston time on such date,
from the next succeeding Business Day) to the date of payment by such Lender of
such amount at a rate of interest per annum equal to the Federal Funds Rate for
such period.
(iv) The Borrower shall be irrevocably and unconditionally
obligated forthwith to reimburse the Issuer, by payment to the Agent for the
account of the Issuer, for any amount paid by any Issuer upon any drawing under
any Letter of Credit, without presentment, demand, protest or other formalities
of any kind, all of which are hereby waived. Such reimbursement may, subject to
satisfaction of the conditions in Sections 5.1 and 5.2 hereof and to the Maximum
Revolving Loan Available Amount (after adjustment in
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the same to reflect the elimination of the corresponding Letter of Credit
Liability), be made by the borrowing of Revolving Loans. Agent will pay to each
Revolving Loan Lender such Lender's Revolving Loan Commitment Percentage of all
amounts received from the Borrower for application in payment, in whole or in
part, of the Reimbursement Obligation in respect of any Letter of Credit, but
only to the extent such Lender has made payment to Agent in respect of such
Letter of Credit pursuant to clause (iii) above.
(v) The Borrower will pay to the Agent at the Principal Office
for the account of each Revolving Loan Lender a letter of credit fee with
respect to each Letter of Credit equal to the greater of (x) $500 or (y) an
amount, calculated on the basis of the actual number of days elapsed in a year
composed of 360 days and on the basis of the face amount of such Letter of
Credit available for drawings under such Letter of Credit from time to time, in
each case for the period from and including the date of issuance, increase or
extension of such Letter of Credit to and including the date of expiration or
termination thereof at the Margin Percentage (on a per annum basis) from time to
time in effect applicable to Eurodollar Rate Borrowings (as defined in the
Interest Rate Agreement) under Revolving Notes, such fee to be due and payable
in arrears on (A) each Interest Payment Date applicable to Base Rate Borrowings
which occurs after the date of issuance, increase or extension thereof and prior
to the expiration or termination of such Letter of Credit, and (B) on the date
of expiration or termination of such Letter of Credit. The Agent will pay to
each Revolving Loan Lender, promptly after receiving any payment in respect of
letter of credit fees referred to in this clause (v), an amount equal to the
product of such Lender's Revolving Loan Commitment Percentage times the amount
of such fees. The Borrower will also pay to the Agent at the Principal Office
for the account of the Issuer alone an amount, calculated on the basis of the
daily average amount available for drawings under the applicable Letter of
Credit from and including the date of issuance, increase or extension of such
Letter of Credit to and including the date of expiration or termination thereof
at 0.1875% (on a per annum basis), such fee to be due and payable in advance on
the date of issuance, increase or extension of the applicable Letter of Credit.
All fees relating to the Existing Letters of Credit for any period prior to the
Effective Date shall be paid in full on the Effective Date.
(vi) The issuance, increase or extension by the applicable
Issuer of each Letter of Credit shall, in addition to the conditions precedent
set forth in Section 5 hereof, be subject to the conditions precedent (A) that
such Letter of Credit shall be in such form and contain such terms as shall be
reasonably satisfactory to the Agent, and (B) that the Borrower shall have
executed and delivered such Applications and other instruments and agreements
relating to such Letter of Credit as the Agent or the Issuer shall have
reasonably requested and are not inconsistent with the terms of this Agreement.
In the event of a conflict between the terms of this Agreement and the terms of
any Application (including the charging of any fees other than normal and
customary reimbursable expenses), the terms hereof shall control.
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(vii) If the Agent fails to send to any Lender its portion of
any payment of Reimbursement Obligations in respect of any Letter of Credit or
letter of credit fees, to the extent timely received by the Agent, by the close
of business on the day such payment was received, the Agent shall pay to such
Lender interest on its portion of such payment from the day such payment was
timely received by the Agent until the date such Lender's portion of such
payment is sent to such Lender, at the Federal Funds Rate.
(c) Indemnification; Release. The Borrower hereby indemnifies and holds
harmless the Agent, each Revolving Loan Lender and each Issuer from and against
any and all claims and damages, losses, liabilities, costs or expenses which the
Agent, such Lender or such Issuer may incur (or which may be claimed against the
Agent, such Lender or such Issuer by any Person whatsoever), REGARDLESS OF
WHETHER CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE OF ANY OF THE INDEMNIFIED
PARTIES, in connection with the execution and delivery of any Letter of Credit
or transfer of or payment or failure to pay under any Letter of Credit; provided
that the Borrower shall not be required to indemnify any party seeking
indemnification for any claims, damages, losses, liabilities, costs or expenses
to the extent, but only to the extent, caused by (i) the willful misconduct or
gross negligence of the party seeking indemnification, or (ii) the failure by
the party seeking indemnification to pay under any Letter of Credit after the
presentation to it of a request required to be paid under applicable law. The
Borrower hereby releases, waives and discharges the Agent, each Revolving Loan
Lender and each Issuer from any claims, causes of action, damages, losses,
liabilities, costs or expenses which the Agent, such Lender or such Issuer, as
the case may be, may incur, REGARDLESS OF WHETHER CAUSED IN WHOLE OR IN PART BY
THE NEGLIGENCE OF ANY OF THE INDEMNIFIED PARTIES, by reason of or in connection
with the failure of any other Revolving Loan Lender to fulfill or comply with
its obligations to the Agent, such Lender or such Issuer, as the case may be,
hereunder (but nothing herein contained shall affect any rights the Borrower may
have against such defaulting Lender). Nothing in this Section 2.2(c) is intended
to limit the obligations of the Borrower under any other provision of this
Agreement.
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(d) Additional Costs in Respect of Letters of Credit. If as a result of
any Regulatory Change there shall be imposed, modified or deemed applicable any
tax, reserve, special deposit or similar requirement against or with respect to
or measured by reference to Letters of Credit issued or to be issued hereunder
or participations in such Letters of Credit, and the result shall be to increase
the cost to any Revolving Loan Lender of issuing or maintaining any Letter of
Credit or any participation therein, or reduce any amount receivable by any
Revolving Loan Lender hereunder in respect of any Letter of Credit or any
participation therein (which increase in cost, or reduction in amount
receivable, shall be the result of such Lender's reasonable allocation of the
aggregate of such increases or reductions resulting from such event), then such
Lender shall notify the Borrower through the Agent, and upon demand therefor by
such Lender through the Agent, the Borrower shall pay to such Lender, from time
to time as specified by such Lender, within fifteen (15) days after request
therefor, such additional amounts as shall be sufficient to compensate such
Lender for such increased costs or reductions in amount; provided that the
Borrower shall not be obligated to compensate any Lender for any such costs or
reductions which relate to a period more than seventy-five (75) days prior to
such request. A statement as to such increased costs or reductions in amount
incurred by such Lender, submitted by such Lender to the Borrower, shall be
conclusive as to the amount thereof, absent manifest error, and may be computed
using any reasonable averaging and attribution method. Each Lender will notify
the Borrower through the Agent of any event occurring after the date of this
Agreement which will entitle such Lender to compensation pursuant to this
Section as promptly as practicable after it obtains knowledge thereof and
determines to request such compensation, and (if so requested by the Borrower
through the Agent) will designate a different lending office of such Lender for
the issuance or maintenance of Letters of Credit by such Lender or will take
such other action as the Borrower may reasonably request if such designation or
action is consistent with the internal policy of such Lender and legal and
regulatory restrictions, will avoid the need for, or reduce the amount of, such
compensation and will not, in the sole opinion of such Lender, be
disadvantageous to such Lender (provided that such Lender shall have no
obligation so to designate a different lending office which is not located in
the United States of America).
2.3 Terminations or Reductions of Revolving Loan Commitments.
(a) Mandatory. On the Termination Date, all Revolving Loan Commitments
shall be terminated in their entirety.
(b) Optional. The Borrower shall have the right to terminate or reduce
the unused portion of the Revolving Loan Commitments at any time or from time to
time, provided that (i) the Borrower shall give notice of each such termination
or reduction to the Agent as provided in Section 4.3 hereof and (ii) each such
partial reduction shall be in an aggregate amount of at least $5,000,000.
22
(c) No Reinstatement. Any termination or reduction of the Revolving Loan
Commitments may not be reinstated without the written approval of the Agent and
the Lenders.
2.4 Fees.
(a) The Borrower shall pay to the Agent for the account of each
Revolving Loan Lender revolving loan commitment fees with respect to such
Revolving Loan Lender's pro rata share of the unused Designated Amount for the
period from the Effective Date to and including the Termination Date at a rate
per annum equal to the Commitment Fee Percentage from time to time in effect.
Such revolving loan commitment fees shall be computed (on the basis of the
actual number of days elapsed in a year composed of 360 days) on each day and
shall be based on the excess of (x) such Revolving Loan Lender's pro rata share
of the Designated Amount for such day over (y) the sum of (i) the aggregate
unpaid principal balance of such Revolving Loan Lender's Revolving Note on such
day plus (ii) such Revolving Loan Lender's pro rata share of the aggregate
Letter of Credit Liabilities for such day. Accrued revolving loan commitment
fees payable under this provision shall be payable on the Quarterly Dates prior
to the Termination Date and on the Termination Date.
(b) The Borrower shall pay to the Agent for the account of each
Revolving Loan Lender revolving loan commitment fees with respect to the
Revolving Loan Commitments in excess of the Designated Amount for the period
from the Effective Date to and including the Termination Date at a rate equal to
one half (1/2) of the Commitment Fee Percentage from time to time in effect.
Such Revolving Loan Commitment Fees shall be computed (on the basis of the
actual number of days elapsed in a year composed of 360 days) on each day and
shall be based on the excess of (x) the amount of each Revolving Loan Lender's
Revolving Loan Commitment for such day (without regard to any limitation based
on the Borrowing Base or the Designated Amount) over (y) such Revolving Loan
Lender's pro rata share of the Designated Amount for such day. Accrued revolving
loan commitment fees payable under this provision shall be payable on the
Quarterly Dates prior to the Termination Date and on the Termination Date.
(c) An additional revolving loan commitment fee shall be due and payable
effective upon any designation of an increase in the Designated Amount. Such
additional commitment fee shall be calculated at a rate equal to one-half (1/2)
of the Commitment Fee Percentage from time to time in effect and shall be
computed on the amount of such increase for the period commencing on the most
recently occurring Quarterly Date through the date of such increase.
(d) All past due fees payable under this Section shall bear interest at
the Past Due Rate.
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2.5 Several Obligations. The failure of any Lender to make any Loan to
be made by it on the date specified therefor shall not relieve any other Lender
of its obligation to make its Loan on such date, but neither the Agent nor any
Lender shall be responsible or liable for the failure of any other Lender to
make a Loan to be made by such other Lender or to participate in, or co-issue,
any Letter of Credit. Notwithstanding anything contained herein to the contrary,
if a Revolving Loan Lender fails to make a Revolving Loan as and when required
hereunder, then upon each subsequent event which would otherwise result in funds
being paid to the defaulting Lender, the amount which would have been paid to
the defaulting Lender shall be divided among the non-defaulting Lenders ratably
according to their respective Revolving Loan Commitment Percentages until the
Revolving Loan Obligations of each Revolving Loan Lender (including the
defaulting Lender) are equal to such Lender's Revolving Loan Commitment
Percentage of the total Revolving Loan Obligations (nothing in this Section
shall result in any additional liability on the Borrower and each Lender agrees
to make such adjustments on the terms and provisions of its Note as may be
required to address the results of this Section).
2.6 Notes. The Loans made by each Lender shall be evidenced by a single
Term Note or Revolving Note, as the case may be, of the Borrower (each, together
with all renewals, extensions, modifications and replacements thereof and
substitutions therefor, a "Note," collectively, the "Notes") in substantially
the form of, respectively, Exhibit D or E hereto, as the case may be, payable to
the order of such Lender in a principal amount equal to (i) in the case of a
Term Note, the aggregate outstanding principal amount of the Term Loan of such
Lender and (ii) in the case of a Revolving Note, the Revolving Loan Commitment
of such Lender, and otherwise duly completed. Each Lender is hereby authorized
by the Borrower to endorse on the schedule (or a continuation thereof) that may
be attached to each Note of such Lender, to the extent applicable, the date,
amount, type of and the applicable period of interest for each Loan made by such
Lender to the Borrower hereunder, and the amount of each payment or prepayment
of principal of such Loan received by such Lender, provided, that any failure by
such Lender to make any such endorsement (or any error in such endorsement)
shall not affect the obligations of the Borrower under such Note or hereunder in
respect of such Loan.
2.7 Use of Proceeds. The proceeds of the Loans shall be used by the
Borrower to refinance existing indebtedness of the Borrower and its
Subsidiaries, to pay certain fees and expenses related to the closing of this
facility and to fund ongoing working capital and other general corporate
requirements of the Borrower and its Subsidiaries. No proceeds of the Loans will
be used for any purpose which would violate any applicable Legal Requirement.
2.8 Designated Amount. The Borrower may from time to time designate a
maximum aggregate principal amount of Revolving Loans permitted to be
outstanding hereunder for a specified period (such amount being herein called
the "Designated Amount"). The Designated Amount shall never be less than
$100,000,000. In the absence of a specific designation of another Designated
Amount hereunder, the Designated Amount shall equal
24
the Maximum Revolving Loan Available Amount. The Designated Amount may be
increased at any time but no decreases of a Designated Amount shall become
effective on a date other than a Quarterly Date and no designation of a
Designated Amount may terminate on a date which is not a day immediately
preceding a Quarterly Date. Written notice of the designation of a Designated
Amount must be given to the Agent by the Borrower no later than two (2) Business
Days prior to the effective date thereof.
3. Borrowings, Payments and Prepayments.
3.1 Borrowings. The Borrower shall give the Agent notice of each
borrowing to be made hereunder as provided in Section 4.3 hereof. Not later than
12:00 noon Houston time on the date specified for each such borrowing hereunder,
each Lender shall make available the amount of the Loan, if any, to be made by
it on such date to the Agent, at its Principal Office, in immediately available
funds, for the account of the Borrower. Such amounts received by the Agent will
be held in an account maintained by the Borrower with the Agent. The amounts so
received by the Agent shall, subject to the terms and conditions of this
Agreement, be made available to the Borrower by wiring or otherwise
transferring, in immediately available funds, such amount to an account
designated by the Borrower and maintained with Agent in Houston, Texas.
3.2 Payments; Prepayments.
(a) Optional Prepayments. Subject to the terms of the Interest Rate
Agreement, the Borrower shall have the right to prepay, on any Business Day, in
whole or in part, without the payment of any penalty or fee, Loans at any time
or from time to time, provided that the Borrower shall give the Agent notice of
each such prepayment as provided in Section 4.3 hereof. Each optional prepayment
on a Loan shall be in an amount at least equal to the lesser of $1,000,000 or
the unpaid principal balance of the Note evidencing such Loan.
(b) Maximum Revolving Loan Available Amount. The Borrower shall from
time to time, within ten (10) days after demand by the Agent (which demand Agent
may make at its option and shall make if directed to do so by the Majority
Lenders), prepay the Revolving Loans (or provide Cover for Letter of Credit
Liabilities) in such amounts as shall be necessary so that at all times the
aggregate outstanding amount of all Revolving Loan Obligations shall be less
than or equal to the Maximum Revolving Loan Available Amount.
(c) Application of Prepayments on Term Loans. Any prepayments made on
the Term Loans will be applied either to scheduled principal installments on the
Term Loans in inverse order of their maturities or pro rata among all the
scheduled principal installments on the Term Loans, at the election of the
Borrower.
25
(d) Term Loan Amortization. The principal of each Term Note shall be due
and payable in quarterly installments due on each Quarterly Date, beginning on
July 1, 1995, equal to the applicable Term Loan Lender's pro rata share of the
Term Loans times $4,464,285.71. On the Maturity Date, the entire unpaid
principal balance of each Term Note and all accrued and unpaid interest on the
unpaid principal balance of each Term Note shall be finally due and payable.
(e) Interest Payments. Accrued and unpaid interest on the unpaid
principal balance of the Notes shall be due and payable on the Interest Payment
Dates (as defined in the Interest Rate Agreement).
(f) Payments; Interest Rate Agreement. The Borrower shall pay all
amounts required to be paid under the Interest Rate Agreement, the Notes and the
other Loan Documents as and when due.
(g) Payments and Interest on Reimbursement Obligations. The Borrower
will pay to the Agent for the account of each Revolving Loan Lender the amount
of each Reimbursement Obligation promptly upon its incurrence. The amount of any
Reimbursement Obligation may, if the applicable conditions precedent specified
in Section 5.2 hereof have been satisfied or waived, be paid with the proceeds
of Revolving Loans. Subject to Section 11.7 hereof, the Borrower will pay to the
Agent for the account of each Revolving Loan Lender interest at the applicable
Past Due Rate on any Reimbursement Obligation and on any other amount payable by
the Borrower hereunder to or for the account of such Lender (but, if such amount
is interest, only to the extent legally allowed), which shall not be paid in
full when due (whether at stated maturity, by acceleration or otherwise), for
the period commencing on the due date thereof until the same is paid in full.
4. Payments; Pro Rata Treatment; Computations, Etc.
4.1 Payments.
(a) Except to the extent otherwise provided herein, all payments of
principal, interest, Reimbursement Obligations and other amounts to be paid by
the Borrower hereunder, under the Notes and under the other Loan Documents shall
be made in Dollars, in immediately available funds, to the Agent at the
Principal Office (or in the case of a successor Agent, at the principal office
of such successor Agent in the United States), not later than 11:00 a.m. Houston
time on the date on which such payment shall become due (each such payment made
after such time on such due date to be deemed to have been made on the next
succeeding Business Day).
(b) The Borrower shall, at the time of making each payment hereunder,
under any Note or under any other Loan Document, specify to the Agent the Loans
or other amounts payable by the
26
Borrower hereunder or thereunder to which such payment is to be applied. Each
payment received by the Agent hereunder, under any Note or under any other Loan
Document for the account of a Lender shall be paid promptly to such Lender, in
immediately available funds. If the Agent fails to send to any Lender its
portion of any payment, to the extent timely received by the Agent, by the close
of business on the day such payment was received, the Agent shall pay to such
Lender interest on its portion of such payment from the day such payment was
timely received by the Agent until the date such Lender's portion of such
payment is sent to such Lender, at the Federal Funds Rate.
(c) If the due date of any payment hereunder or under any Note falls on
a day which is not a Business Day, the due date for such payments (except as
otherwise provided in the Interest Rate Agreement) shall be extended to the next
succeeding Business Day and interest shall be payable for any principal so
extended for the period of such extension.
4.2 Pro Rata Treatment. Except to the extent otherwise provided herein:
(a) each borrowing from the Lenders under Section 2.1 hereof shall be made (x)
in the case of Term Loans, ratably from the Term Loan Lenders and (y) in the
case of Revolving Loans, ratably from the Revolving Loan Lenders, in each case
on the basis of their respective Term Loan or Revolving Loan Commitments, as the
case may be; (b) each payment of commitment fees shall be made for the account
of the Revolving Loan Lenders, and each termination or reduction of the
Revolving Loan Commitments of the Lenders under Section 2.3 hereof shall be
applied, pro rata, according to the Revolving Loan Lenders' respective Revolving
Loan Commitments and (c) each payment by the Borrower of principal of or
interest on the Term Loans or Revolving Loans, as the case may be, shall be made
to the Agent for the account of the Lenders pro rata in accordance with the
respective unpaid principal amounts of such Term Loans or Revolving Loans, as
the case may be, held by the Lenders.
4.3 Certain Actions, Notices, Etc. Notices to the Agent of any
termination or reduction of Revolving Loan Commitments and of borrowings and
prepayments of Loans and requests for issuances of Letters of Credit shall be
irrevocable and shall be effective only if received by the Agent not later than
11:00 a.m. Houston time on the number of Business Days prior to the date of the
relevant termination, reduction, borrowing, prepayment and/or issuance specified
below:
27
Number of
Notice Business Days Prior
Termination or
Reduction of Revolving
Loan Commitments 5
Borrowing at the Base Rate same day
(as defined in the Interest
Rate Agreement)
Borrowing at the Eurodollar 3 Eurodollar Business Days (as
Rate (as defined in the defined in the Interest Rate
Interest Rate Agreement) Agreement)
Letter of Credit issuance 3
Revolving Loan repayment same day
Optional prepayment of
Term Loan 1
Each such notice of termination or reduction shall specify the amount of the
applicable Revolving Loan Commitment to be terminated or reduced. Each such
notice of borrowing or prepayment shall specify the amount of the Loans to be
borrowed or prepaid and the date of borrowing or prepayment (which shall be a
Business Day). The Agent shall promptly notify the affected Lenders of the
contents of each such notice.
4.4 Non-Receipt of Funds by the Agent. Unless the Agent shall have been
notified by a Lender or the Borrower (the "Payor") prior to the date on which
such Lender is to make payment to the Agent of the proceeds of a Loan (or
funding of a drawing under a Letter of Credit or reimbursement with respect to
any drawing under a Letter of Credit) to be made by it hereunder or the Borrower
is to make a payment to the Agent for the account of one or more of the Lenders,
as the case may be (such payment being herein called the "Required Payment"),
which notice shall be effective upon receipt, that the Payor does not intend to
make the Required Payment to the Agent, the Agent may assume that the Required
Payment has been made and may, in reliance upon such assumption (but shall not
be required to), make the amount thereof available to the intended recipient on
such date and, if the Payor has not in fact made the Required Payment to the
Agent, the recipient of such payment (or, if such recipient is the beneficiary
of a Letter of Credit, the Borrower and, if the Borrower fails to pay the amount
thereof to the Agent forthwith upon demand, the Lenders ratably in proportion to
their respective
28
Revolving Loan Commitment Percentages) shall, on demand, pay to the Agent the
amount made available by the Agent together with interest thereon in respect of
the period commencing on the date such amount was so made available by the Agent
until the date the Agent recovers such amount at a rate per annum equal to the
Federal Funds Rate for such period or (if the recipient is the Borrower) the
Base Rate (as defined in the Interest Rate Agreement).
4.5 Sharing of Payments, Etc. If a Lender shall obtain payment of any
principal of or interest on any Loan made by it under this Agreement, on any
Reimbursement Obligation or on other Obligation then due to such Lender
hereunder, through the exercise of any right of set-off (including, without
limitation, any right of setoff or lien granted under Section 9.2 hereof),
banker's or other lien, counterclaim or similar right, or otherwise, it shall
promptly purchase from the other Lenders participations in the Loans made,
Reimbursement Obligations or other Obligations held, by the other Lenders in
such amounts, and make such other adjustments from time to time as shall be
equitable to the end that all the Lenders shall share the benefit of such
payment (net of any expenses which may be incurred by such Lender in obtaining
or preserving such benefit) pro rata in accordance with the unpaid principal and
interest on the Obligations then due to each of them. To such end all the
Lenders shall make appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if such payment is rescinded or must otherwise
be restored. The Borrower agrees, to the fullest extent it may effectively do so
under applicable law, that any Lender so purchasing a participation in the Loans
made, Reimbursement Obligations or other Obligations held, by other Lenders may
exercise all rights of set-off, bankers' or other lien, counterclaim or similar
rights with respect to such participation as fully as if such Lender were a
direct holder of Loans, Reimbursement Obligations or other Obligations in the
amount of such participation. Nothing contained herein shall require any Lender
to exercise any such right or shall affect the right of any Lender to exercise,
and retain the benefits of exercising, any such right with respect to any other
indebtedness or obligation of the Borrower.
5. Conditions Precedent.
5.1 Initial Loans and Letters of Credit. The obligation of each Lender
or TCB to make its initial Loans or issue, increase or extend or participate in
a Letter of Credit (if such Letter of Credit is issued prior to the funding of
the initial Loans) hereunder is subject to the following conditions precedent,
each of which shall have been fulfilled or waived to the satisfaction of the
Agent:
(1) Corporate Action and Status. The Agent shall have received a
Secretary's Certificate from the Borrower and each of its Subsidiaries signing a
Loan Document, which shall be accompanied by copies of the Organizational
Documents of the Borrower and each of its Subsidiaries, copies of the bylaws of
the Borrower and each of its Subsidiaries and such certificates as may be
appropriate to demonstrate the qualification and good standing of and payment of
taxes by the Borrower and each of its Subsidiaries in each state where the
failure in which to qualify
29
would have a Material Adverse Effect. The Agent and each Lender may conclusively
rely on such certificates until they receive notice in writing from the Borrower
or the appropriate Party to the contrary.
(2) Notes. The Agent shall have received the appropriate Notes of the
Borrower for each Lender, duly completed and executed.
(3) Loan Documents. The Borrower and each other Party shall have duly
executed and delivered the Loan Documents to which it is a party (in such number
of copies as the Agent shall have requested) and each such Loan Document shall
be in form satisfactory to Agent. Each such Loan Document shall be in
substantially the form furnished to the Lenders prior to their execution of this
Agreement.
(4) Security Matters. All such action as the Agent shall have requested
to perfect the Liens created pursuant to the Security Agreements shall have been
taken, including, without limitation, the delivery to the Agent of all property
with respect to which possession is necessary for the purpose of perfecting such
Liens and, with respect to collateral covered by the Security Agreements, stock
powers executed in blank by the Person in whose name the applicable stock
certificate is issued, together with the delivery of appropriately completed and
duly executed Uniform Commercial Code financing statements with appropriate
Governmental Authorities. The Agent shall also have received evidence
satisfactory to it that the Liens created by the Security Agreements constitute
first priority Liens, except for the exceptions expressly provided for herein,
including, without limitation, Uniform Commercial Code search reports,
satisfactory title evidence in form and substance acceptable to the Agent, and
executed releases of any prior Liens (except as permitted by Section 8.2).
Notwithstanding the foregoing, the Borrower shall have up to sixty (60) days
after the Effective Date in which to obtain releases of the Liens securing
Borrowed Money Indebtedness which is to be paid concurrently with the closing
hereof covering Property located in Canada.
(5) Fees and Expenses. The Borrower shall have paid to the Agent all
unpaid fees in the amounts previously agreed upon in writing between the
Borrower and the Agent; and shall have in addition paid to the Agent all amounts
payable under Section 11.3 hereof, on or before the date of this Agreement.
(6) Insurance. The Borrower shall have delivered to the Agent
certificates of insurance satisfactory to the Agent evidencing the existence of
all insurance required to be maintained by the Borrower by this Agreement and
the Security Agreements.
(7) Opinion of Counsel. The Agent shall have received an opinion of
Xxxxxxxxx & Xxxxxxxxx, L.L.P., counsel to the Borrower and its Subsidiaries, in
form and substance reasonably satisfactory to the Agent.
30
(8) Consents. The Agent shall have received evidence satisfactory to it
that all material consents of each Governmental Authority and of each other
Person, if any, reasonably required in connection with (a) the Loans and the
Letters of Credit and (b) the execution, delivery and performance of this
Agreement and the other Loan Documents have been satisfactorily obtained.
Notwithstanding the foregoing, the Borrower shall have up to sixty (60) days
after the Effective Date in which to obtain consent by BP Chemicals, Inc. to the
collateral assignment of the BP Lease.
(9) BP Lease. The Agent shall have received a copy of the BP Lease.
(10) Other Documents. The Agent shall have received such other documents
consistent with the terms of this Agreement and relating to the transactions
contemplated hereby as the Agent may reasonably request.
5.2 All Loans and Letters of Credit. The obligation of each Lender to
make any Loan to be made by it hereunder or to issue, increase or extend or
participate in any Letter of Credit is subject to (a) the accuracy, in all
material respects, on the date of such Loan or such issuance or participation of
all representations and warranties of the Borrower and any other Party contained
in this Agreement and the other Loan Documents; (b) receipt by the Agent of the
following, all of which shall be duly executed and in Proper Form: (1) a Request
for Extension of Credit as to the Loan or the Letter of Credit, as the case may
be, no later than 11:00 a.m. Houston time on the Business Day on which such
Request for Extension of Credit must be given under Section 4.3 hereof, (2) in
the case of a Letter of Credit, an Application, and (3) such other documents as
the Agent or any Lender may reasonably require; (c) prior to the making of such
Loan or the issuance of such Letter of Credit, there shall have occurred no
event which has had or could reasonably be expected to have a Material Adverse
Effect; (d) no Default or Event of Default shall have occurred and be continuing
and shall not occur as a result of the making of such Loan or the issuance of
(or participation in) such Letter of Credit, and (e) the making of such Loan or
the issuance of (or participation in) such Letter of Credit shall not be illegal
or prohibited by any Legal Requirement.
6. Representations and Warranties.
The Borrower represents and warrants to the Lenders and the Agent as
follows:
6.1 Organization. The Borrower and each of its Subsidiaries (a) is duly
organized, validly existing and in good standing under the laws of the State or
Province of its organization; (b) has all necessary corporate power and
authority to conduct its business as presently conducted, and (c) is duly
qualified to do business and in good standing in the State or Province of its
organization and in all jurisdictions in which the failure to so qualify would
have a Material Adverse Effect.
31
6.2 Financial Statements. The Borrower has furnished to the Agent the
Annual Audited Financial Statements of the Borrower as at September 30, 1994,
which fairly present, the financial condition and the results of operations of
the Borrower as at such date. No events, conditions or circumstances have
occurred from the date that the financial statements were delivered to the Agent
through the date hereof which would cause said financial statements to be
misleading in any material respect. There are no material instruments or
liabilities which should be reflected in such financial statements provided to
the Agent which are not so reflected. Since September 30, 1994, no event has
occurred which has had (or could reasonably be expected to have) a Material
Adverse Effect.
6.3 Enforceable Obligations; Authorization. The Loan Documents are
legal, valid and binding obligations of the Parties, enforceable in accordance
with their respective terms, except as may be limited by bankruptcy, insolvency
and other similar laws and judicial decisions affecting creditors' rights
generally and by general equitable principles. The execution, delivery and
performance of the Loan Documents (a) have all been duly authorized by all
necessary corporate action; (b) are within the corporate power and authority of
the Parties; (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 have a Material Adverse Effect on the
business, condition (financial or otherwise), operations or Properties of the
Borrower or any other Party; (d) do not and will not result in the breach of, or
constitute a default under, any agreement or instrument by which the Parties or
any of their respective Property may be bound or affected which breach or
default could reasonably be expected to cause a Material Adverse Effect, and (e)
do not and will not result in the creation of any Lien upon any Property of any
of the Parties, except in favor of the Agent or as expressly contemplated
therein. All necessary permits, registrations and consents for such making and
performance have been obtained. Except as otherwise expressly stated in the
Security Agreements, the Liens created under the Security Agreements constitute
valid and perfected first and prior Liens on the Property described therein,
subject to no other Liens whatsoever.
6.4 Other Borrowed Money Indebtedness. Neither the Borrower nor any of
its Subsidiaries is in default in the payment of any other Borrowed Money
Indebtedness or under any agreement, mortgage, deed of trust, security agreement
or lease to which it is a party and which default could reasonably be expected
to cause a Material Adverse Effect.
6.5 Litigation. There is no litigation or administrative proceeding
pending or, to the knowledge of the Borrower, threatened against, nor any
outstanding judgment, order or decree affecting, the Borrower or any of its
Subsidiaries before or by any Governmental Authority which could reasonably be
expected to cause a Material Adverse Effect. Neither the Borrower nor any of its
Subsidiaries is in default with respect to any judgment, order or decree of any
Governmental Authority where such default would have a Material Adverse Effect.
32
6.6 Taxes. The Borrower and its Subsidiaries each has filed all tax
returns required to have been filed and paid all taxes shown thereon to be due,
except those for which extensions have been obtained and those which are being
contested in good faith as provided in Section 7.1(a) hereof.
6.7 Regulations G, U and X. None of the proceeds of any Obligation will
be used for the purpose of purchasing or carrying directly or indirectly any
margin stock or for any other purpose would constitute this transaction a
"purpose credit" within the meaning of Regulation G, U and X of the Board of
Governors of the Federal Reserve System, as either of them may be amended from
time to time.
6.8 Subsidiaries. The Borrower has no Subsidiaries except as set forth
on Exhibit C attached hereto or those formed in compliance with Section 8.9
hereof.
6.9 No Untrue or Misleading Statements. No document, instrument or other
writing furnished to the Lenders by or on behalf of the Borrower or any other
Party in connection with the transactions contemplated in any Loan Document,
taken as a whole, contains any untrue material statement of fact or omits to
state any such fact (of which the Borrower or any other Party has knowledge)
necessary to make the representations, warranties and other statements contained
herein or in such other document, instrument or writing not misleading.
6.10 ERISA. The Borrower and each member of the Controlled Group have
fulfilled their obligations under the minimum funding standards of ERISA and the
Code and are in compliance in all material respects with the presently
applicable provisions of ERISA and the Code, and have not incurred any liability
to the PBGC or a Plan under Title IV of ERISA (other than to make contributions
in the ordinary course) and no contribution failure has occurred with respect to
any Plan sufficient to give rise to the Lien under Section 302(f) of ERISA, in
each case which could reasonably be expected to have a Material Adverse Effect.
Except as described in Schedule 6.10, neither the Borrower nor any member of the
Controlled Group has any contingent liability with respect to any post-
retirement benefit under a Welfare Plan other than liability for continuation
coverage described in Section 602 of ERISA which could reasonably be expected to
have a Material Adverse Effect.
6.11 Investment Company Act. Neither the Borrower nor any of its
Subsidiaries is an investment company within the meaning of the Investment
Company Act of 1940, as amended, or, directly or indirectly, controlled by or
acting on behalf of any Person which is an investment company, within the
meaning of said Act.
33
6.12 Public Utility Holding Company Act. Neither the Borrower nor any of
its Subsidiaries is an "affiliate" or a "subsidiary company" of a "public
utility company," or a "holding company," or an "affiliate" or a "subsidiary
company" of a "holding company," as such terms are defined in the Public Utility
Holding Company Act of 1935, as amended.
6.13 Solvency. Neither the Borrower, nor the Borrower and its
Subsidiaries, on a consolidated basis, is "insolvent," as such term is used and
defined in (i) the Bankruptcy Code and (ii) the Texas Uniform Fraudulent
Transfer Act, Tex. Bus. & Com. Code Xxx. (s) 24.001 et seq., as amended from
time to time.
6.14 Compliance. The Borrower and its Subsidiaries are each in
compliance with all Legal Requirements applicable to it, except to the extent
that the failure to comply therewith could not reasonably be expected to cause a
Material Adverse Effect.
6.15 Environmental Matters. The Borrower and its Subsidiaries have
obtained and maintained in effect all Environmental Permits (or the applicable
Person has initiated the necessary steps to transfer the Environmental Permits
into its name or obtain such permits), the failure to obtain which could
reasonably be expected to have a Material Adverse Effect. The Borrower and its
Subsidiaries and their Properties, business and operations have been and are in
compliance with all applicable Requirements of Environmental Law and
Environmental Permits failure to comply with which could reasonably be expected
to have a Material Adverse Effect. The Borrower and its Subsidiaries and their
Properties, business and operations are not subject to any (A) Environmental
Claims or (B) Environmental Liabilities, in either case direct or contingent,
arising from or based upon any act, omission, event, condition or circumstance
occurring or existing on or prior to the date hereof which could reasonably be
expected to have a Material Adverse Effect. None of the Borrower or any of its
Subsidiaries has received any notice of any violation or alleged violation of
any Requirements of Environmental Law or Environmental Permit or any
Environmental Claim in connection with its Properties, liabilities, condition
(financial or otherwise), business or operations which could reasonably be
expected to have a Material Adverse Effect. The Borrower does not know of any
event or condition with respect to currently (as of the date this representation
is provided) enacted Requirements of Environmental Laws presently scheduled to
become effective in the future with respect to any of its Properties or the
Properties of any of its Subsidiaries which could reasonably be expected to have
a Material Adverse Effect, for which the Borrower or the applicable Subsidiary
of the Borrower has not made good faith provisions in its business plan and
projections of financial performance.
34
7. Affirmative Covenants.
The Borrower covenants and agrees with the Agent and the Lenders that
prior to the termination of this Agreement it will do, and cause each of its
Subsidiaries to do, and if necessary cause to be done, each and all of the
following:
7.1 Taxes, Existence, Regulations, Property, Etc. At all times (a) pay,
prior to the date when penalties attach with respect thereto, all taxes and
governmental charges of every kind upon it or against its income, profits or
Property, unless and only to the extent that the same shall be contested
diligently in good faith and reserves deemed adequate by the independent
certified public accounting firm used by the Borrower to prepare the Borrower's
Annual Audited Financial Statements have been established therefor; (b) do all
things necessary to preserve its corporate existence, qualifications, rights and
franchises in all States where such failure to qualify would have a Material
Adverse Effect; (c) comply with all applicable Legal Requirements (including
without limitation Requirements of Environmental Law) in respect of the conduct
of its business and the ownership of its Property, the noncompliance with which
could reasonably be expected to cause a Material Adverse Effect; and (d) cause
its Property to be protected, maintained and kept in good repair and make all
replacements and additions to its Property as may be reasonably necessary to
conduct its business properly and efficiently.
7.2 Financial Statements and Information. Furnish to the Agent and, in
each case other than the monthly management report described in clause (e)
below, the Lenders one copy of each of the following: (a) as soon as available
and in any event within 90 days after the end of each fiscal year of the
Borrower, beginning with the fiscal year 1995, Annual Audited Financial
Statements of the Borrower; (b) as soon as available and in any event within 45
days after the end of each calendar quarter of each fiscal year of the Borrower,
Quarterly Financial Statements of the Borrower and its Subsidiaries; (c)
concurrently with the financial statements provided for in Subsections 7.2(a)
and (b) hereof, such schedules, computations and other information, in
reasonable detail, as may be required by the Agent to demonstrate compliance
with the covenants set forth herein or reflecting any non-compliance therewith
as of the applicable date, all certified and signed by the president or chief
financial officer of the Borrower (or other authorized officer approved by the
Agent) as true, correct and complete and, commencing with the quarterly
financial statement prepared as of June 30, 1995, a compliance certificate
("Compliance Certificate") in the form of Exhibit G hereto, duly executed by
such authorized officer; (d) (1) as of the Effective Date and (2) within 30 days
after the end of each calendar month, a Borrowing Base Certificate as at the
Effective Date or the last day of such calendar month or the date of such
receipt, as the case may be, together with such supporting information as the
Agent may reasonably request; (e) within 30 days after the end of each calendar
month of each fiscal year of the Borrower, a management report with respect to
sales and operating revenues and costs of manufacturing and related information
in such detail as such management
35
report is prepared for the use of the management of the Borrower (promptly upon
receipt of each such report, Agent shall forward copies thereof to each Lender);
(f) from time to time, at any time upon the request of the Agent, but at the
cost of the Borrower, a report of an independent collateral field examiner
approved by the Agent in writing and reasonably acceptable to the Borrower
(which may be, or be affiliated with, the Agent or one of the Lenders) with
respect to the Accounts and Inventory components included in the Borrowing Base
(provided, however, that so long as no Event of Default has occurred and is
continuing, the Agent shall not require such a report more than once per
calendar year); (g) by October 31 of each year, the financial projections of
income and cash flow of the Borrower for each month of the fiscal year of the
Borrower which begins on the October 1 immediately preceding such October 31,
and (h) such other information relating to the condition (financial or
otherwise), operations, prospects or business of any of the Borrower and its
Subsidiaries as from time to time may be reasonably requested by the Agent.
7.3 Financial Tests. The Borrower, on a consolidated basis, will have:
(a) Debt to EBITDA Ratio - as of the last day of each fiscal
quarter, a Debt to EBITDA Ratio of not greater than 4.00 to 1.00.
(b) Fixed Charge Coverage Ratio - as of the last day of each
fiscal quarter, a Fixed Charge Coverage Ratio of not less than 1.25 to 1.00.
(c) Adjusted Fixed Charge Coverage Ratio - as of the date of any
proposed dividend which is subject to the Adjusted Fixed Charge Coverage Ratio
(and after giving effect to such dividend), an Adjusted Fixed Charge Coverage
Ratio of not less than 1.10 to 1.00.
(d) Net Worth - Net Worth of not less than (1) at all times
during the period commencing on the Effective Date through and including June
30, 1995, $106,000,000 plus 50% of the Net Income of the Borrower (if positive)
for the fiscal quarter beginning on January 1, 1995 and ending on March 31, 1995
and (2) at all times during each fiscal quarter after June 30, 1995, the minimum
Net Worth required during the immediately preceding fiscal quarter plus 50% of
the Net Income of the Borrower (if positive) for the immediately preceding
fiscal quarter plus all of the net proceeds of any issuance of equity in the
Borrower during such fiscal quarter.
(e) Current Ratio - a Current Ratio of not less than 1.10 to
1.00 at all times.
7.4 Inspection. Permit the Agent and any Lender upon 3 days' prior
notice to inspect its Property, to examine its files, books and records except
privileged communication with legal counsel and classified governmental
material, and make and take away copies thereof, and to discuss its affairs with
its officers and accountants, all during normal business
36
hours and at such intervals and to such extent as the Agent or the applicable
Lender may reasonably desire.
7.5 Further Assurances. Promptly execute and deliver, at the Borrower's
expense, any and all other and further instruments which may be reasonably
requested by the Agent to cure any defect in the execution and delivery of any
Loan Document in order to effectuate the transactions contemplated by the Loan
Documents, and in order to grant, preserve protect and perfect the validity and
priority of the security interests created by the Security Agreements.
7.6 Books and Records. Maintain books of record and account in
accordance with GAAP.
7.7 Insurance. Maintain insurance with such insurers, on such of its
Property, with responsible companies in such amounts, with such deductibles and
against such risks as are usually carried by owners of similar businesses and
properties in the same general areas in which the Borrower and its Subsidiaries
operate (including without limitation business interruption insurance), and
furnish the Agent satisfactory evidence thereof promptly upon request. The
Borrower shall provide the Agent with copies of the policies of insurance and a
certificate of the insurer that the insurance required by this Section may not
be canceled, reduced or affected in any material manner without thirty (30)
days' prior written notice to the Agent.
7.8 Notice of Certain Matters. Give the Agent prompt written notice of
the following:
(a) the issuance by any Governmental Authority of any injunction, order
or other restraint prohibiting, or having the effect of prohibiting, the
performance of this Agreement, any other Loan Document, or the making of the
Loans or the initiation of any litigation, or any claim or controversy which
might result in the initiation of any litigation, seeking any such injunction,
order or other restraint that could reasonably be expected to cause a Material
Adverse Effect;
(b) the filing or commencement of any action, suit or proceeding,
whether at law or in equity or by or before any court or any Federal, state,
municipal or other Governmental Authority which could reasonably be expected to
cause a Material Adverse Effect;
(c) any Event of Default or Default known to Borrower, specifying the
nature and extent thereof and the action (if any) which is proposed to be taken
with the respect thereto; and
(d) any development in the business or affairs of the Borrower or any of
its Subsidiaries which has had or which could reasonably be expected to have, in
the reasonable judgment of the Borrower, a Material Adverse Effect.
37
The Borrower will also notify the Agent in writing at least 30 days prior to the
date that any Party changes its name or the location of its chief executive
office or principal place of business or the place where it keeps its books and
records.
7.9 Interest Rate Risk. Promptly upon execution thereof, the Borrower
shall deliver to the Agent true and correct and complete copies of any Interest
Rate Risk Agreement.
7.10 Capital Adequacy. Agrees that if any Lender shall have determined
that the adoption after the Effective Date or effectiveness after the Effective
Date (whether or not previously announced) of any applicable law, rule,
regulation or treaty regarding capital adequacy, or any change therein after the
Effective Date, or any change in the interpretation or administration thereof
after the Effective Date by any Governmental Authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Lender with any request or directive after the Effective Date
regarding capital adequacy (whether or not having the force of law) of any such
Governmental Authority, central bank or comparable agency has or would have the
effect of reducing the rate of return on such Lender's capital as a consequence
of its obligations hereunder, under the Letters of Credit, the Notes or other
Obligations held by it to a level below that which such Lender could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's policies with respect to capital adequacy) by an amount deemed by
such Lender to be material, then from time to time, upon satisfaction of the
conditions precedent set forth in this Section 7.10, upon demand by such Lender
(with a copy to the Agent), the Borrower (subject to Section 11.7 hereof) shall
pay to such Lender such additional amount or amounts as will compensate such
Lender for such reduction. The certificate of any Lender setting forth such
amount or amounts as shall be necessary to compensate it and the basis thereof
shall be delivered as soon as practicable to the Borrower and shall be
conclusive and binding, absent manifest error. The Borrower shall pay the amount
shown as due on any such certificate within fifteen (15) days after the delivery
of such certificate; provided that the Borrower shall not be obligated to
compensate any Lender for any such amounts which relate to a period more than
seventy-five (75) days prior to such request for payment. In preparing such
certificate, a Lender may employ such assumptions and allocations of costs and
expenses as it shall in good xxxxx xxxx reasonable and may use any reasonable
averaging and attribution method.
7.11 ERISA Information and Compliance. If and when Borrower or any
member of the Controlled Group (i) gives or is required to give notice to the
PBGC of any "reportable event" (as defined in subsections (b)(1), (c)(1),
(c)(5), or (c)(6) of Section 4043 of ERISA) with respect to any Plan which might
constitute grounds for a termination of such Plan under Title IV of ERISA, or
knows that the plan administrator of any Plan has given or is required to give
notice of any such reportable event, or (ii) knows that a failure to make a
required contribution with respect to any Plan has occurred if such
38
failure is sufficient to give rise to a Lien under section 203(f) of ERISA, or
(iii) that any other event has occurred that could result in (A) the incurrence
by Borrower or a member of the Controlled Group of a liability, fine or penalty
with respect to a Plan or (B) any increase in the contingent liability of
Borrower or a member of the Controlled Group with respect to any post-retirement
benefit under a Welfare Plan, in each case which could reasonably be expected to
have a Material Adverse Effect, Borrower shall deliver to the Agent a copy of
the notice of such reportable event given or required to be given to the PBGC or
a notice of such contribution failure or other event, as the case may be.
8. Negative Covenants.
The Borrower covenants and agrees with the Agent and the Lenders that
prior to the termination of this Agreement it will not, and will not suffer or
permit any of its Subsidiaries to, do any of the following:
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 replace-ments (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 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, if no Term Loans remain outstanding, so long as the Revolving
Loan Commitments are reduced by an amount equal to the net proceeds of such
Subordinated Debt; (g) Interest Rate Risk Indebtedness; (h) insurance premiums
financed with the applicable insurance carrier, and (i) 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
39
have been assumed, (g) Interest Rate Risk Indebtedness, (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 (i).
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 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(g); and (k) 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,
40
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.
8.3 Contingent Liabilities. Directly or indirectly guarantee the
performance or payment of, or purchase or agree to purchase, or assume or
contingently agree to become or be secondarily liable in respect of, any
obligation or liability of any other Person except for (a) the endorsement of
checks or other negotiable instruments in the ordinary course of business; (b)
obligations disclosed on Schedule 8.3 hereto (but not increases of such
obligations after the Effective Date), (c) those liabilities permitted under
Section 8.1 hereof and (d) guaranties by the Borrower of any of its Subsidiaries
obligations (except where recourse is expressly required to be limited by this
Agreement).
8.4 Mergers, Consolidations and Dispositions and Acquisitions of Assets.
In any single transaction or series of transactions, directly or indirectly: (a)
liquidate or dissolve; (b) be a party to any merger or consolidation unless and
so long as (i) no Default or Event of Default has occurred that is then
continuing, (ii) immediately thereafter and giving effect thereto, no event will
occur and be continuing which constitutes a Default, (iii) the Borrower or a
Subsidiary of the Borrower is the surviving Person, and (iv) the surviving
Person ratifies and assumes each Loan Document to which any party to such merger
was a party; (c) sell, convey or lease all or any substantial part of its
assets, except for sale of Inventory in the ordinary course of business and
except for sales of Property (other than Inventory) in the ordinary course of
the Borrower's business; (d) pledge, transfer or otherwise dispose of any shares
of capital stock of any Subsidiary of the Borrower or any Borrowed Money
Indebtedness of any Subsidiary of the Borrower, or permit any such Subsidiary to
issue any additional shares of capital stock other than to the Borrower or to
acquire any shares of capital stock of any Subsidiary of the Borrower, or (e)
acquire all or substantially all of the assets of any Person or (except as
expressly permitted by Section 8.8 hereof) any shares of stock of or similar
interest in any other Person except for Permitted Acquisitions.
8.5 Redemption, Dividends and Distributions. At any time: (a) redeem,
retire or otherwise acquire, directly or indirectly, any shares of its capital
stock except to the extent that no Default or Event of Default has occurred
which is continuing (or would result from the same); (b) pay any dividend other
than payments of the Permitted Dividends by the Borrower or dividends by a
Subsidiary of the Borrower to the Borrower or any Subsidiary of the Borrower or
(c) make any other distribution of any Property or cash to stockholders as such.
8.6 Nature of Business. Change the nature of its business or enter into
any business which is substantially different from the business in which it is
presently engaged.
41
8.7 Transactions with Affiliates. Enter into any transaction or
agreement with any Affiliate of the Borrower or any of its Subsidiaries (or any
Affiliate of any such Person) unless the same is upon terms substantially
comparable to those obtainable from wholly unrelated sources or in an arms
length transaction.
8.8 Loans and Investments. Make any loan, advance, extension of credit
or capital contribution to, or make or have any Investment in, any Person, or
make any commitment to make any such extension of credit or Investment, except
(a) Permitted Investments, (b) normal and reasonable advances in the ordinary
course of business, (c) trade and customer accounts receivable in accordance
with the ordinary course of business, (d) Investments in Subsidiaries who are
Guarantors and who have granted to the Agent, on behalf of the Lenders, a first-
priority Lien covering all of its Accounts and Inventory, (e) Investments in 50%
or less owned joint ventures and other Corporations not to exceed $20,000,000 in
unreturned capital Investment at any one time outstanding provided that such
joint ventures and other Corporations are in substantially the same lines of
business as the Borrower and its Subsidiaries, and (f) other Investments
existing as of the date hereof which are described on the attached Schedule 8.8.
8.9 No Subsidiaries. Form, create or acquire a Subsidiary (other than
Sterling Energy, Sterling Pulp (US) and other than Canadian Subsidiaries all of
the equity interests of which are owned by Sterling Canada, Inc. (or by a
previously existing Canadian Subsidiary) and with respect to which the Agent, on
behalf of the Lenders shall have a first-priority perfected Lien in and to 65%
of its issued and outstanding equity interests) unless there shall have been
executed and delivered to the Agent (a) a guaranty, substantially in the form of
the Guaranties executed and delivered concurrently herewith, whereby the
applicable Subsidiary guaranties the payment of all of the Obligations, (b)
collateral documentation, in Proper Form, reasonably required by Agent to create
and perfect a first-priority Lien covering all of the Accounts and Inventory of
the applicable Subsidiary, securing the Obligations and (c) appropriate
resolutions and authorizations regarding all such documents and such other
documents, instruments, certificates, opinions and other collateral matters as
the Agent may reasonably require. Each guaranty and collateral document executed
by the applicable Subsidiary shall contain the following language (using the
appropriate variations):
Guarantor agrees that while its obligations to Lenders under this
document are joint and several as to Lenders, Guarantor (together with
other Subsidiaries (as defined in the Credit Agreement) of the Borrower
heretofore or hereafter executing and delivering to Lender a Credit
Document) (Guarantor and such other Subsidiaries of Borrower being
herein collectively called "Obligors") shall be liable as among other
Obligors only for its Proportionate Share of the indebtedness guaranteed
pursuant to this document calculated as of the time the applicable
portion of such indebtedness was incurred. If at any time any Obligor
(the "Indemnified Obligor") makes any
42
payment to Agent or Lenders or otherwise incurs any other expenses
(collectively, the "Indemnified Outlay") under the Credit Documents, the
Indemnified Obligor shall have the right to make demand on any or all of
the other Obligors (each an "Indemnifying Obligor") for the payment to
the Indemnified Obligor of the amount (the "Excess Amount") by which the
Indemnified Outlay exceeds the Indemnified Obligor's Proportionate Share
of the Indemnified Outlay and thereupon the Indemnifying Obligors upon
which demand has so been made shall pay to the Indemnified Obligor the
Excess Amount; provided, that no Indemnifying Obligor shall be liable to
pay to Indemnified Obligor more than the Proportionate Share of the
Indemnifying Obligor (calculated exclusive of the Indemnified Obligor)
of the Excess Amount. If any of the payments to be made pursuant to the
foregoing are not paid promptly upon demand, then the past due payments
shall bear interest at the Past Due Rate from the date of demand until
paid in full. The term "Proportionate Share" as used hereinabove shall
mean with respect to any Obligor the percentage derived by dividing (a)
the net worth of such Obligor by (b) the consolidated net worth of
Borrower and all of the Obligors (exclusive of the Indemnified Obligor
where indicated above), all as of a particular time. Nothing in this
Section shall in any manner impair or extinguish any of the Credit
Documents or any lien or security interest now or hereafter securing the
payment of any of the indebtedness arising pursuant to the Credit
Documents.
8.10 BP Lease. Terminate or agree to the termination of the BP Lease
without the prior written consent of all of the Lenders or amend, modify or
obtain or grant a waiver of any provision of the BP Lease if such amendment,
modification or waiver could reasonably be expected to have a material adverse
effect on the ability of the Lenders to collect, as and when due and payable,
amounts due and payable hereunder and under the other Loan Documents without the
prior written consent of the Majority Lenders.
8.11 Fiscal Year. The Borrower will not (and will not permit any of its
Subsidiaries to) change its fiscal year, unless the Agent shall have consented
thereto in writing or unless required to make such change because of a change in
or amendment to the Code. In the event that the Borrower is required to make any
such change in its fiscal year, the parties hereto agree to negotiate in good
faith any changes in this Agreement made necessary by the required change in
fiscal year. Sterling NRO, Ltd. may change its fiscal year in connection with
any merger of Sterling NRO, Ltd. into Sterling Pulp Chemicals, Ltd. which is
permitted under the terms of this Agreement.
8.12 Sterling Energy and Sterling Pulp (US). Sterling Energy shall not
own any Property of any material nature other than its undivided 50% interest
under the Joint Venture Agreement dated as of February 8, 1991 between Praxair
Energy Resources, Inc., formerly known as UCIG Energy Resources, Inc., and
43
Sterling Energy. Any distributions paid to Sterling Energy under said Joint
Venture Agreement shall be promptly paid over to the Borrower as dividends.
Sterling Pulp (US) shall not own any Property of any material nature.
9. Defaults.
9.1 Events of Default. If any one or more of the following events
(herein called "Events of Default") shall occur, then the Agent may (and at the
direction of the Majority Lenders, shall) do any or all of the following: (1)
upon notice to the Borrower, declare the Revolving Loan Commitments terminated
(whereupon the Revolving Loan Commitments shall be terminated) and/or accelerate
the Termination Date to a date as early as the date of termination of the
Revolving Loan Commitments; (2) declare the principal amount then outstanding of
and the unpaid accrued interest on the Loans and Reimbursement Obligations and
all fees and all other amounts payable hereunder, under the Notes and under the
other Loan Documents to be forthwith due and payable, whereupon such amounts
shall be and become immediately due and payable, without notice (including,
without limitation any notice of intent to accelerate), presentment, demand,
protest or other formalities of any kind, all of which are hereby expressly
waived by the Borrower; provided that in the case of the occurrence of an Event
of Default with respect to the Borrower or any of its Subsidiaries referred to
in clause (f), (g) or (h) of this Section 9.1, the Revolving Loan Commitments
shall be automatically terminated and the principal amount then outstanding of
and unpaid accrued interest on the Loans and the Reimbursement Obligations and
all fees and all other amounts payable hereunder, under the Notes and under the
other Loan Documents shall be and become automatically and immediately due and
payable, without notice (including, without limitation, notice of acceleration
and notice of intent to accelerate), presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by the
Borrower, and (3) exercise any or other rights and remedies available to the
Agent or any of the Lenders under the Loan Documents, at law or in equity:
(a) Payments - (i) the Borrower or any other Party shall fail to make
any payment or required prepayment of any installment of principal on the Loans
or any Reimbursement Obligation payable under the Notes, this Agreement or the
other Loan Documents when due or (ii) the Borrower or any other Party fails to
make any payment or required prepayment of interest with respect to the Loans,
any Reimbursement Obligation or any other fee or amount under the Notes, this
Agreement or the other Loan Documents when due and (except in the case of
acceleration of maturity) such failure to pay continues unremedied for a period
of five days; or
(b) Other Obligations - the Borrower or any of its Subsidiaries shall
default in the payment when due of any principal of or interest on any Borrowed
Money Indebtedness having an outstanding principal amount of at least $5,000,000
(other than the Loans and Reimbursement Obligations) and such default shall
continue beyond any applicable period of grace; or any event or condition shall
occur which results in the acceleration of the
44
maturity of any such Borrowed Money Indebtedness or enables (or, with the giving
of notice or lapse of time or both, would enable) the holder of any such
Borrowed Money Indebtedness or any Person acting on such holder's behalf to
accelerate the maturity thereof and such event or condition shall not be cured
within any applicable period of grace; or
(c) Representations and Warranties - any representation or warranty made
or deemed made by or on behalf of the Borrower or any other Party in this
Agreement or any other Loan Document or in any certificate furnished or made by
the Borrower or any other Party to the Agent or the Lenders in connection
herewith or therewith shall prove to have been incorrect, false or misleading in
any material respect as of the date thereof or as of the date as of which the
facts therein set forth were stated or certified; or
(d) Affirmative Covenants - (i) default shall be made in the due
observance or performance of any of the covenants or agreements contained in
Section 7.3 hereof, (ii) the Borrower shall permit any of the insurance provided
for in Section 7.7 hereof to lapse, (iii) default shall be made in the due
observance or performance of any of the covenants or agreements contained in
Section 7.7 hereof (other than lapse of required insurance, which is provided
for above) and such default continues unremedied for a period of 10 days after
(x) notice thereof is given by the Agent to the Borrower or (y) such default
otherwise becomes known to the Borrower, whichever is earlier or (iv) default is
made in the due observance or performance of any of the other covenants and
agreements contained in Section 7 hereof or any other affirmative covenant of
the Borrower or any other Party contained in this Agreement or any other Loan
Document and such default continues unremedied for a period of 30 days after (x)
notice thereof is given by the Agent to the Borrower or (y) such default
otherwise becomes known to the Borrower, whichever is earlier; or
(e) Negative Covenants - default is made in the due observance or
performance by the Borrower of any of the other covenants or agreements
contained in Section 8 of this Agreement or of any other negative covenant of
the Borrower or any other Party contained in this Agreement or any other Loan
Document; or
(f) Involuntary Bankruptcy or Receivership Proceedings - a receiver,
conservator, liquidator or trustee of the Borrower or any of its Subsidiaries or
of any of its property is appointed by the order or decree of any court or
agency or supervisory authority having jurisdiction, and such decree or order
remains in effect for more than 30 days; or the Borrower or any of its
Subsidiaries is adjudicated bankrupt or insolvent; or any of such Person's
property is sequestered by court order and such order remains in effect for more
than 30 days; or a petition is filed against the Borrower or any of its
Subsidiaries under any state or federal bankruptcy, reorganization, arrangement,
insolvency, readjustment or debt, dissolution, liquidation or receivership law
or any jurisdiction, whether now or hereafter in effect, and is not dismissed
within 30 days after such filing; or
45
(g) Voluntary Petitions or Consents - the Borrower or any of its
Subsidiaries commences a voluntary case or other proceeding or order seeking
liquidation, reorganization, arrangement, insolvency, readjustment of debt,
dissolution, liquidation or other relief with respect to itself or its debt or
other liabilities under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, or consents to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other proceeding
commenced against it, or fails generally to, or cannot, pay its debts generally
as they become due or takes any corporate action to authorize or effect any of
the foregoing; or
(h) Assignments for Benefit of Creditors or Admissions of Insolvency -
the Borrower or any of its Subsidiaries makes an assignment for the benefit of
its creditors, or admits in writing its inability to pay its debts generally as
they become due, or consents to the appointment of a receiver, trustee, or
liquidator of the Borrower or such Subsidiary or of all or any substantial part
of its Property; or
(i) Undischarged Judgments - a final judgment or judgments for the
payment of money exceeding, in the aggregate, $5,000,000 is rendered by any
court or other governmental body against the Borrower or any of its Subsidiaries
and the Borrower or such Subsidiary does not discharge the same or provide for
its discharge in accordance with its terms, or procure a stay of execution
thereof within 30 days from the date of entry thereof; or
(j) Security Agreements; Guaranties - any Security Agreement for any
reason ceases to create a valid and perfected first-priority Lien on any
material portion of the Collateral purported to be covered thereby, or any
Guaranty shall cease to be in full force and effect and a valid, binding and
enforceable obligation of the applicable Party (except as otherwise herein
expressly permitted), or the Borrower or any of its Subsidiaries or any Party to
a Guaranty (or any other Person who may have granted or purported to grant such
Lien or executed any such Guaranty) will so state in writing, or Agent, on
behalf of the Lenders, shall cease to have a first priority Lien upon (x) all of
the equity interests of each Subsidiary of the Borrower (other than Canadian
Subsidiaries) which owns any of the equity interests in and to any Canadian
Subsidiary and (y) 65% of the equity interests of each Canadian Subsidiary; or
(k) Attachment - the Borrower or any of its Subsidiaries shall suffer
any writ of attachment or execution or any similar process to be issued or
levied against it or any substantial part of its Property which is not released,
stayed, bonded or vacated within 30 days after its issue or levy; or
46
(l) ERISA Matters - (i) Borrower or any member of the Controlled Group
shall fail to pay when due an amount or amounts which it shall have become
liable to pay to the PBGC or to a Plan under Title IV of ERISA; or notice of
intent to terminate a Plan or Plans shall be filed under Title IV of ERISA; or
the PBGC shall institute proceedings under Title IV of ERISA to terminate or to
cause a trustee to be appointed to administer any such Plan or Plans or a
proceeding shall be instituted by a fiduciary of any such Plan or Plans against
Borrower or any member of the Controlled Group to enforce Section 5415 of ERISA;
or a condition shall exist by reason of which the PBGC would be entitled to
obtain a decree adjudicating that any such Plan or Plans must be terminated or a
contribution failure occurs with respect to any Plan sufficient to give rise to
a lien under Section 302(f) of ERISA on the property of Borrower or any member
of the Controlled Group, and (ii) in each case, such event could reasonably be
expected to cause a Material Adverse Effect; or
(m) Change of Control - there shall occur any Change of Control.
9.2 Right of Setoff. Upon the occurrence and during the continuance of
any Event of Default, the Lenders each are hereby authorized at any time and
from time to time, without notice to the Borrower or any of its Subsidiaries
(any such notice being expressly waived by the Borrower and its Subsidiaries),
to setoff and apply any and all deposits (general or special, time or demand,
provisional or final (but excluding the funds held in accounts clearly
designated as escrow or trust accounts held by the Borrower or such Subsidiary
for the benefit of Persons which are not Affiliates of the Borrower or any of
its Subsidiaries), whether or not such setoff results in any loss of interest or
other penalty, and including without limitation all certificates of deposit at
any time held, and any other funds or property at any time held, and other
Indebtedness at any time owing by such Lender to or for the credit or the
account of the Borrower or any such Subsidiary against any and all of the
Obligations irrespective of whether or not such Lender or the Agent will have
made any demand under this Agreement, the Notes or any other Loan Document. The
Borrower also hereby grants to each of the Lenders a security interest in and
hereby transfers, assigns, sets over, and conveys to each of the Lenders, as
security for payment of all Loans and Reimbursement Obligations, all such
deposits, funds or property of the Borrower or any such Subsidiary, or
Indebtedness of any Lender to the Borrower or any such Subsidiary. Should the
right of any Lender to realize funds in any manner set forth hereinabove be
challenged and any application of such funds be reversed, whether by court order
or otherwise, the Lenders shall make restitution or refund to the Borrower pro
rata in accordance with their Revolving Loan Commitments. Each Lender agrees to
promptly notify the Borrower and the Agent after any such setoff and
application, provided that the failure to give such notice will not affect the
validity of such setoff and application. The rights of the Agent and the Lenders
under this Section are in addition to other rights and remedies (including
without limitation other rights of setoff) which the Agent or the Lenders may
have. This Section is subject to the terms and provisions of Sections 4.5 and
11.7 hereof.
47
9.3 Collateral Account. The Borrower hereby agrees, in addition to the
provisions of Section 9.1 hereof, that upon the occurrence and during the
continuance of any Event of Default, it shall, if requested by the Agent or the
Majority Lenders (through the Agent) and automatically and without any request
or demand upon the occurrence of an Event of Default of the type described in
Sections 9.1(f), (g) or (h) hereof, pay to the Agent an amount in immediately
available funds equal to the then aggregate amount available for drawings under
all Letters of Credit issued for the account of the Borrower, which funds shall
be held by the Agent as Cover.
9.4 Preservation of Security for Unmatured Reimbursement Obligations. In
the event that, following (i) the occurrence of an Event of Default and the
exercise of any rights available to the Agent or any Lender under the Loan
Documents, and (ii) payment in full of the principal amount then outstanding of
and the accrued interest on the Loans and Reimbursement Obligations and fees and
all other amounts payable hereunder and under the Notes and all other amounts
secured by the Security Agreements, any Letters of Credit shall remain
outstanding and undrawn upon, the Agent shall be entitled to hold (and the
Borrower hereby grants and conveys to the Agent a security interest in and to)
all cash or other property ("Proceeds of Remedies") realized or arising out of
the exercise by the Agent of any rights available to it under the Loan
Documents, at law or in equity, including, without limitation, the proceeds of
any foreclosure, as collateral for the payment of any amounts due or to become
due under or in respect of such Letters of Credit. Such Proceeds of Remedies
shall be held for the ratable benefit of the Lenders. Such Proceeds of Remedies
shall constitute "Collateral" for all purposes under the terms and provisions of
the Security Agreements, and the rights, titles, benefits, privileges, duties
and obligations of Agent with respect thereto shall be governed by the terms and
provisions of this Agreement and, to the extent not inconsistent with this
Agreement, the Security Agreements. The Agent may, but shall have no obligation
to, invest any such Proceeds of Remedies in clauses (a) through (e) and (g)
through (i) of the definition of "Permitted Investments" set forth in Article 1
hereof or in such other manner as the Majority Lenders may direct. Such Proceeds
of Remedies shall be applied to Reimbursement Obligations arising in respect of
any such Letters of Credit and/or the payment of any Lender's obligations under
any such Letter of Credit when such Letter of Credit is drawn upon. The Borrower
hereby agrees to execute and deliver to the Agent and the Lenders such security
agreements, pledges or other documents as the Agent or any of the Lenders may,
from time to time, require to perfect the pledge, Lien and security interest in
and to any such Proceeds of Remedies provided for in this Section. Nothing in
this Section shall cause or permit an increase in the maximum amount of the
Revolving Loan Obligations permitted to be outstanding from time to time under
this Agreement.
9.5 Remedies Cumulative. No remedy, right or power conferred upon the
Agent or any Lender is intended to be exclusive of any other remedy, right or
power given hereunder or now or hereafter existing at law, in equity, or
otherwise, and all such remedies, rights and powers shall be cumulative.
48
10. The Agent.
10.1 Appointment, Powers and Immunities. Each Lender hereby irrevocably
appoints and authorizes the Agent to act as its agent hereunder, under the
Letters of Credit and under the other Loan Documents with such powers as are
specifically delegated to the Agent by the terms hereof and thereof, together
with such other powers as are reasonably incidental thereto. The Agent (the
"Agent" as used in this Section 10 shall include reference to its Affiliates and
its own and its Affiliates' respective officers, shareholders, directors,
employees and agents) (a) shall not have any duties or responsibilities except
those expressly set forth in this Agreement and the other Loan Documents, and
shall not by reason of this Agreement or any other Loan Document be a trustee or
fiduciary for any Lender; (b) shall not be responsible to any Lender for any
recitals, statements, representations or warranties contained in this Agreement,
the Letters of Credit or any other Loan Document, or in any certificate or other
document referred to or provided for in, or received by any of them under, this
Agreement, the Letters of Credit or any other Loan Document, or for the value,
validity, effectiveness, genuineness, enforceability, execution, filing,
registration, collectibility, recording, perfection, existence or sufficiency of
this Agreement, the Letters of Credit, or any other Loan Document or any other
document referred to or provided for herein or therein or any property covered
thereby or for any failure by any Party or any other Person to perform any of
its obligations hereunder or thereunder, and shall not have any duty to inquire
into or pass upon any of the foregoing matters; (c) shall not be required to
initiate or conduct any litigation or collection proceedings hereunder or under
the Letters of Credit or any other Loan Document except to the extent requested
by the Majority Lenders; (d) shall not be responsible for any mistake of law or
fact or any action taken or omitted to be taken by it hereunder or under the
Letters or Credit or any other Loan Document or any other document or instrument
referred to or provided for herein or therein or in connection herewith or
therewith, including, without limitation, pursuant to its own negligence, except
for its own gross negligence or willful misconduct; (e) shall not be bound by or
obliged to recognize any agreement among or between the Borrower and any Lender,
regardless of whether the Agent has knowledge of the existence of any such
agreement or the terms and provisions thereof; (f) shall not be charged with
notice or knowledge of any fact or information not herein set out or provided to
the Agent in accordance with the terms of this Agreement or any other Loan
Document; (g) shall not be responsible for any delay, error, omission or default
of any mail, telegraph, cable or wireless agency or operator, and (h) shall not
be responsible for the acts or edicts of any Governmental Authority. The Agent
may employ agents and attorneys-in-fact and shall not be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
with reasonable care. Without in any way limiting any of the foregoing, each
Lender acknowledges that the Agent shall have no greater responsibility in the
operation of the Letters of Credit than is specified in the Uniform Customs and
Practice for Documentary Credits (1993 Revision, International Chamber of
Commerce Publication No. 500). In any foreclosure proceeding concerning any
Collateral, each holder of an Obligation if bidding for its own account or for
its own account and the accounts of other Lenders is prohibited from including
in the amount of its bid an amount to be applied as a credit against the
Obligations held by it or the Obligations held by the other Lenders; instead,
such holder must bid in cash only. However, in any such foreclosure proceeding,
the Agent may (but shall not be obligated to) submit a bid for all Lenders
(including itself) in the form of a credit against the Obligations, and the
Agent
49
or its designee may (but shall not be obligated to) accept title to such
collateral for and on behalf of all Lenders.
10.2 Reliance. The Agent shall be entitled to rely upon any certification,
notice or other communication (including any thereof by telephone, telex,
telegram or cable) believed by it to be genuine and correct and to have been
signed or sent by or on behalf of the proper Person or Persons, and upon advice
and statements of legal counsel (which may be counsel for the Borrower),
independent accountants and other experts selected by the Agent. The Agent shall
not be required in any way to determine the identity or authority of any Person
delivering or executing the same. As to any matters not expressly provided for
by this Agreement, the Letters of Credit, or any other Loan Document, the Agent
shall in all cases be fully protected in acting, or in refraining from acting,
hereunder and thereunder in accordance with instructions of the Majority
Lenders, and any action taken or failure to act pursuant thereto shall be
binding on all of the Lenders. Subject to the provisions of Section 11.5 hereof,
the Agent shall have the authority to execute releases of the Security
Agreements on behalf of the Lenders without the joinder of any Lender. If any
order, writ, judgment or decree shall be made or entered by any court affecting
the rights, duties and obligations of the Agent under this Agreement or any
other Loan Document, then and in any of such events the Agent is authorized, in
its sole discretion, to rely upon and comply with such order, writ, judgment or
decree which it is advised by legal counsel of its own choosing is binding upon
it under the terms of this Agreement, the relevant Loan Document or otherwise;
and if the Agent complies with any such order, writ, judgment or decree, then it
shall not be liable to any Lender or to any other Person by reason of such
compliance even though such order, writ, judgment or decree may be subsequently
reversed, modified, annulled, set aside or vacated.
10.3 Defaults. The Agent shall not be deemed to have knowledge of the
occurrence of a Default (other than the non-payment of principal of or interest
on Loans or Reimbursement Obligations) unless it has received notice from a
Lender or the Borrower specifying such Default and stating that such notice is a
"Notice of Default." In the event that the Agent receives such a Notice of
Default, the Agent shall give prompt notice thereof to the Lenders (and shall
give each Lender prompt notice of each such non-payment). The Agent shall
(subject to Section 10.7 hereof) take such action with respect to such Notice of
Default as shall be directed by the Majority Lenders and within its rights under
the Loan Documents and at law or in equity, provided that, unless and until the
Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, permitted
hereby with respect to such Notice of Default as it shall deem advisable in the
best interests of the Lenders and within its rights under the Loan Documents, at
law or in equity.
10.4 Rights as a Lender. With respect to its Revolving Loan Commitments and
the Loans made and Letter of Credit Liabilities, TCB in its capacity as a Lender
hereunder shall have the same rights and powers hereunder as any other Lender
and may exercise the same as though it were not acting in its agency capacity,
and the term "Lender" or "Lenders" shall, unless the context otherwise
indicates, include the Agent in its individual capacity.
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The Agent may (without having to account therefor to any Lender) accept deposits
from, lend money to and generally engage in any kind of banking, trust, letter
of credit, agency or other business with the Borrower (and any of its
Affiliates) as if it were not acting as the Agent, and the Agent may accept fees
and other consideration from the Borrower (in addition to the fees heretofore
agreed to between the Borrower and the Agent) for services in connection with
this Agreement or otherwise without having to account for the same to the
Lenders.
10.5 Indemnification. The Lenders agree to indemnify the Agent each (to the
extent not reimbursed under Section 2.2(c), Section 11.3 or Section 11.4 hereof,
but without limiting the obligations of the Borrower under said Sections 2.2(c),
11.3 and 11.4), ratably in accordance with the sum of the Lenders' respective
Revolving Loan Commitments and Term Loans, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever, REGARDLESS OF
WHETHER CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE OF ANY INDEMNIFIED PARTIES,
which may be imposed on, incurred by or asserted against the Agent in any way
relating to or arising out of this Agreement, the Letters of Credit or any other
Loan Document or any other documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby (including, without
limitation, the costs and expenses which the Borrower is obligated to pay under
Sections 2.2(c), 11.3 and 11.4 hereof, interest, penalties, reasonable
attorneys' fees and amounts paid in settlement, but excluding, unless a Default
has occurred and is continuing, normal administrative costs and expenses
incident to the performance of its agency duties hereunder) or the enforcement
of any of the terms hereof or thereof or of any such other documents; provided
that no Lender shall be liable for any of the foregoing to the extent they arise
from the gross negligence or willful misconduct of the party to be indemnified.
The obligations of the Lenders under this Section 10.5 shall survive the
termination of this Agreement and the repayment of the Obligations.
10.6 Non-Reliance on Agent and Other Lenders. Each Lender agrees that it
has received current financial information with respect to the Borrower and that
it has, independently and without reliance on the Agent or any other Lender and
based on such documents and information as it has deemed appropriate, made its
own credit analysis of the Borrower and decision to enter into this Agreement
and that it will, independently and without reliance upon the Agent or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own analysis and decisions in taking or not
taking action under this Agreement or any of the other Loan Documents. The Agent
shall not be required to keep itself informed as to the performance or
observance by any Party of this Agreement, the Letters of Credit or any of the
other Loan Documents or any other document referred to or provided for herein or
therein or to inspect the properties or books of the Borrower or any Party.
Except for notices, reports and other documents and information expressly
required to be furnished to the Lenders by the Agent hereunder, under the
Letters of Credit or the other Loan Documents, the Agent shall not have any duty
or
51
responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of the Borrower or any
other Party (or any of their affiliates) which may come into the possession of
the Agent.
10.7 Failure to Act. Except for action expressly required of the Agent
hereunder, under the Letters of Credit or under the other Loan Documents, the
Agent shall in all cases be fully justified in failing or refusing to act
hereunder and thereunder unless it shall receive further assurances to its
satisfaction by the Lenders of their indemnification obligations under Section
10.5 hereof against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action.
10.8 Resignation or Removal of Agent. Subject to the appointment and
acceptance of a successor Agent as provided below, the Agent may resign at any
time by giving notice thereof to the Lenders and the Borrower, and the Agent may
be removed at any time with or without cause by the Majority Lenders. Upon any
such resignation or removal, (i) the Majority Lenders without the consent of the
Borrower shall have the right to appoint a successor Agent so long as such
successor Agent is also a Lender at the time of such appointment and (ii) the
Majority Lenders shall have the right to appoint a successor Agent that is not a
Lender at the time of such appointment so long as the Borrower consents to such
appointment (which consent shall not be unreasonably withheld). If no successor
Agent shall have been so appointed by the Majority Lenders and accepted such
appointment within 30 days after the retiring Agent's giving of notice of
resignation or the Majority Lenders' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Lenders, appoint a successor Agent. Any
successor Agent shall be a bank which has an office in the United States and a
combined capital and surplus of at least $250,000,000. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder and under any other Loan
Documents. Such successor Agent shall promptly specify by notice to the Borrower
its Principal Office referred to in Section 3.1 and Section 4 hereof. After any
retiring Agent's resignation or removal hereunder as Agent, the provisions of
this Section 10 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as the Agent.
10.9 No Partnership. Neither the execution and delivery of this Agreement
nor any of the other Loan Documents nor any interest the Lenders, the Agent or
any of them may now or hereafter have in all or any part of the Obligations
shall create or be construed as creating a partnership, joint venture or other
joint enterprise between the Lenders or among the Lenders and the Agent. The
relationship between the Lenders, on the one hand, and the Agent, on the other,
is and shall be that of principals and agent only, and nothing in this Agreement
or any of the other Loan Documents shall be construed to constitute the Agent as
trustee or other fiduciary for any Lender or to impose on the Agent any duty,
responsibility or obligation other than those expressly provided for herein and
therein.
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11. Miscellaneous.
11.1 Waiver. No waiver of any Default or Event of Default shall be a waiver
of any other Default or Event of Default. No failure on the part of the Agent or
any Lender to exercise and no delay in exercising, and no course of dealing with
respect to, any right, power or privilege under any Loan Document shall operate
as a waiver thereof, nor shall any single or partial exercise of any right,
power or privilege thereunder preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The remedies provided in
the Loan Documents are cumulative and not exclusive of any remedies provided by
law or in equity.
11.2 Notices. All notices and other communications provided for herein
(including, without limitation, any modifications of, or waivers or consents
under, this Agreement) shall be given or made by telex, telecopy or other
writing and telexed, telecopied, mailed or delivered to the intended recipient
at the "Address for Notices" specified below its name on the signature pages
hereof (or provided for in an Assignment and Acceptance); or, as to any party,
at such other address as shall be designated by such party in a notice to the
Borrower and the Agent given in accordance with this Section 11.2. Except as
otherwise provided in this Agreement, all such notices or communications shall
be deemed to have been duly given when (i) transmitted by telex or telecopier,
(ii) personally delivered (iii) one Business Day after deposit with an overnight
mail or delivery service, postage prepaid or (iv) three Business Days' after
deposit in a receptacle maintained by the United States Postal Service, postage
prepaid, registered or certified mail, return receipt requested, in each case
given or addressed as aforesaid.
11.3 Expenses, Etc. Whether or not any Loan is ever made or any Letter of
Credit ever issued, the Borrower shall pay or reimburse on demand (a) the Agent
for paying the reasonable fees and expenses of one legal counsel to the Agent,
in connection with the preparation, negotiation, execution and delivery of this
Agreement (including the exhibits and schedules hereto), the Security Agreements
and the other Loan Documents and the making of the Loans and the issuance of
Letters of Credit hereunder, and any modification, supplement or waiver of any
of the terms of this Agreement, the Letters of Credit or any other Loan
Document; (b) the Agent for any lien search fees; (c) the Agent for reasonable
out-of-pocket expenses incurred in connection with the preparation,
documentation, administration and syndication of the Loans or any of the Loan
Documents (including, without limitation, the advertising, marketing, printing,
publicity, duplicating, mailing and similar expenses) of the Loans and Letter of
Credit Liabilities; (d) the Agent or any Lender for paying all transfer, stamp,
documentary or other similar taxes, assessments or charges levied by any
governmental or revenue authority in respect of this Agreement, any Letter of
Credit or any other Loan Document or any other document referred to herein or
therein; (e) the Agent or any Lender for paying all costs, expenses, taxes,
assessments and other charges incurred in connection with any filing,
registration, recording or perfection of any security interest contemplated by
this Agreement, any Security Agreement or any document
53
referred to herein or therein, and (f) any Lender or the Agent for paying all
amounts reasonably expended, advanced or incurred by such Lender or Agent to
satisfy any obligation of the Borrower under this Agreement or any other Loan
Document, to protect the Collateral, to collect the Obligations or to enforce,
protect, preserve or defend the rights of such Lender or Agent under this
Agreement or any other Loan Document, including, without limitation, fees and
expenses incurred in connection with such Lender's or Agent's participation as a
member of a creditor's committee in a case commenced under the Bankruptcy Code
or other similar law, fees and expenses incurred in connection with lifting the
automatic stay prescribed in (s) 362 of the Bankruptcy Code and fees and
expenses incurred in connection with any action pursuant to (s) 1129 of the
Bankruptcy Code and all other customary out-of-pocket expenses incurred by such
Lender or Agent in connection with such matters, together with interest thereon
at the Past Due Rate on each such amount from the date which is fifteen days
after demand is made on the Borrower until the date of reimbursement to such
Lender or Agent.
11.4 Indemnification. The Borrower shall indemnify each of the Agent, the
Lenders, and each affiliate thereof and their respective directors, officers,
employees and agents from, and hold each of them harmless against, any and all
losses, liabilities, claims or damages to which any of them may become subject,
REGARDLESS OF WHETHER CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE OF ANY
INDEMNIFIED PARTIES, insofar as such losses, liabilities, claims or damages
arise out of or result from any (i) actual or proposed use by the Borrower of
the proceeds of any extension of credit (whether a Loan or a Letter of Credit)
by any Lender hereunder; (ii) breach by the Borrower of this Agreement or any
other Loan Document or the breach by any Party of any Loan Document; (iii)
violation by the Borrower or any other Party of any Legal Requirement; (iv)
investigation, litigation or other proceeding relating to any of the foregoing,
and the Borrower shall reimburse the Agent, each Lender, and each Affiliate
thereof and their respective directors, officers, employees and agents, upon
demand for any reasonable expenses (including reasonable legal fees) incurred in
connection with any such investigation or proceeding, or (v) taxes (excluding
income taxes and franchise taxes) payable or ruled payable by any Governmental
Authority in respect of the Obligations or any Loan Document other than taxes
incurred due to a Lender's failure to comply with Section 11.13 hereof;
provided, however, that the Borrower shall not have any obligations pursuant to
this Section with respect to any losses, liabilities, claims, damages or
expenses incurred by the Person seeking indemnification by reason of the gross
negligence or willful misconduct of that Person. Nothing in this Section is
intended to limit the obligations of the Borrower under any other provision of
this Agreement.
11.5 Amendments, Etc. No amendment or modification of this Agreement, the
Notes or any other Loan Document shall in any event be effective against the
Borrower unless the same shall be agreed or consented to in writing by the
Borrower. No amendment, modification or waiver of any provision of this
Agreement, the Notes or any other Loan Document, nor any consent to any
departure by the Borrower therefrom, shall in any event be
54
effective against the Lenders unless the same shall be agreed or consented to in
writing by the Majority Lenders, and each such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, that no amendment, modification, waiver or consent shall,
unless in writing and signed by each Lender affected thereby, do any of the
following: (a) increase any Revolving Loan Commitment of any of the Lenders or
subject the Lenders to any additional obligations; (b) reduce the principal of,
or interest on, any Loan, Reimbursement Obligation or fee hereunder; (c)
postpone or extend the Maturity Date, the Termination Date, the Revolving Loan
Availability Period or any scheduled date fixed for any payment of principal of,
or interest on, any Loan, Reimbursement Obligation, fee or other sum to be paid
hereunder or waive any Event of Default described in Section 9.1(a) hereof; (d)
change the percentage of any of the Revolving Loan Commitments or of the
aggregate unpaid principal amount of any of the Loans and Letter of Credit
Liabilities, or the number of Lenders, which shall be required for the Lenders
or any of them to take any action under this Agreement; (e) change any provision
contained in Sections 2.2(c), 7.10, 11.3 or 11.4 hereof or this Section 11.5;
(f) increase any of the fixed percentages to be multiplied by the aggregate
amounts of the components comprising the Borrowing Base that are described in
(i) and (ii) of the definition of Borrowing Base herein; (g) change the
definition of "Majority Lenders" set forth in Article 1 hereof, or (h) release
the liability of any Guarantor under the Guaranties or release, in any one (1)
calendar year, Collateral having an aggregate value exceeding $1,000,000.
Notwithstanding anything in this Section 11.5 to the contrary, no amendment,
modification, waiver or consent shall be made with respect to Section 10 without
the consent of the Agent to the extent it affects the Agent.
55
11.6 Successors and Assigns.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Agent and the Lenders and their respective successors and assigns;
provided, however, that the Borrower may not assign or transfer any of its
rights or obligations hereunder without the prior written consent of all of the
Lenders, and any such assignment or transfer without such consent shall be null
and void. Each Lender may sell participations in all or part of any Loan, or all
or part of its Notes or Revolving Loan Commitments, to another bank or other
entity, in which event, without limiting the foregoing, the provisions of the
Loan Documents (including, without limitation, the Interest Rate Agreement)
shall inure to the benefit of each purchaser of a participation; provided,
however, the pro rata treatment of payments, as described in Section 4.2 hereof,
shall be determined as if such Lender had not sold such participation. Any
Lender that sells one or more participations to any Person shall not be relieved
by virtue of such participation from any of its obligations to Borrower under
this Agreement relating to the Loans. In the event any Lender shall sell any
participation, such Lender shall retain the sole right and responsibility to
enforce the obligations of the Borrower relating to the Loans, including,
without limitation, the right to approve any amendment, modification or waiver
of any provision of this Agreement other than amendments, modifications or
waivers with respect to (i) any fees payable hereunder to the Lenders, (ii) the
amount of principal or the rate of interest payable on, or the dates fixed for
the scheduled repayment of principal of, the Loans and (iii) the release of the
Liens on any of the Collateral.
(b) Each Lender may assign to one or more Lenders or any other Person
all or a portion of its interests, rights and obligations under this Agreement;
provided, however, that (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, and 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; (ii) other than in the case of
an assignment to another Lender (that is, at the time of the assignment, a party
hereto) or to an Affiliate of such Lender or to a Federal Reserve Bank, the
Agent and, so long as no Event of Default shall have occurred and be continuing,
the Borrower must each give its prior written consent, which consents shall not
be unreasonably withheld, and (iii) the parties to each such assignment shall
execute and deliver to the Agent, for its acceptance an Assignment and
Acceptance in the form of Exhibit F hereto (each an "Assignment and Acceptance")
with blanks appropriately completed, together with any Note or Notes subject to
such assignment and a processing and recording fee of $3,000.00 paid by the
assignee (for which the Borrower will have no liability). Upon such execution,
delivery and acceptance, from and after the effective date specified in each
Assignment and Acceptance, (A) the assignee thereunder shall be a party hereto
and, to the extent provided in such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder and (B) the Lender thereunder shall, to
the extent provided in such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such
56
Lender shall cease to be a party hereto but shall still have indemnification
rights surviving as provided in Section 11.8 hereof). Notwithstanding anything
contained in this Agreement to the contrary, any Lender may at any time assign
all or any portion of its rights under this Agreement and the Notes issued to it
as collateral to a Federal Reserve Bank; provided that no such assignment shall
release such Lender from any of its obligations hereunder.
(c) By executing and delivering an Assignment and Acceptance, the Lender
assignor thereunder and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than the representation
and warranty that it is the legal and beneficial owner of the interest being
assigned thereby free and clear of any adverse claim, such Lender assignor makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any of the other Loan Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
any of the other Loan Documents or any other instrument or document furnished
pursuant thereto; (ii) such Lender assignor makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
Borrower or the performance or observance by the Borrower of any of its
obligations under this Agreement or any of the other Loan Documents or any other
instrument or document furnished pursuant hereto; (iii) such assignee confirms
that it has received a copy of this Agreement, together with copies of the
financial statements referred to in Section 6.2 hereof and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Agent, such Lender assignor or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement and the other Loan Documents; (v) such
assignee appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to the Agent by the terms hereof, together with such
powers as are reasonably incidental thereto; and (vi) such assignee agrees that
it will perform in accordance with their terms all obligations that by the terms
of this Agreement and the other Loan Documents are required to be performed by
it as a Lender.
(d) The entries in the records of the Agent as to each Assignment and
Acceptance delivered to it and the names and addresses of the Lenders and the
Revolving Loan Commitments of, and principal amount of the Loans owing to, each
Lender from time to time shall be conclusive, in the absence of manifest error,
and the Borrower, the Agent and the Lenders may treat each Person the name of
which is recorded in the books and records of the Agent as a Lender hereunder
for all purposes of this Agreement and the other Loan Documents.
(e) Upon the Agent's receipt of an Assignment and Acceptance executed by
an assigning Lender and the assignee thereunder, together with any Note or Notes
subject to such assignment and the written consent to such assignment, the Agent
shall, if such Assignment and Acceptance has been completed with blanks
appropriately filled, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in its records and (iii) give prompt notice
thereof to the Borrower. Within five Business Days after receipt of notice, the
Borrower, at its own expense, shall execute and deliver to the Agent in exchange
for the surrendered Notes new Notes to the order of such assignee in an amount
equal to the Revolving Loan Commitments and the Term Loans (or either of them)
assumed by it pursuant to such Assignment and Acceptance and, if the assigning
Lender has retained a Revolving Loan Commitment and Term Loans (or either of
them) hereunder, new Notes to the order of the assigning Lender in an amount
equal to the Revolving Loan Commitment and the Term Loans (or either of them)
retained by it hereunder. Such new Notes shall be in an aggregate principal
amount equal to the aggregate principal amount of such surrendered Notes, shall
be dated the effective date of such
57
Assignment and Acceptance and shall otherwise be in substantially the form of
the respective Note. Thereafter, such surrendered Notes shall be marked renewed
and substituted and the originals thereof delivered to the Borrower (with
copies, certified by the Borrower as true, correct and complete, to be retained
by the Agent).
(f) Any Lender may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 11.6, disclose
to the assignee or participant or proposed assignee or participant, any
information relating to the Borrower furnished to such Lender by or on behalf of
the Borrower provided that such Person agrees in writing to the confidentiality
obligations set forth in Section 11.14 hereof.
11.7 Limitation of Interest. The Borrower and the Lenders intend to
strictly comply with all applicable federal and Texas laws, including applicable
usury laws (or the usury laws of any jurisdiction whose usury laws are deemed to
apply to the Notes or any other Loan Documents despite the intention and desire
of the parties to apply the usury laws of the State of Texas). Accordingly, the
provisions of this Section 11.7 shall govern and control over every other
provision of this Agreement or any other Loan Document which conflicts or is
inconsistent with this Section, even if such provision declares that it
controls. As used in this Section, the term "interest" includes the aggregate of
all charges, fees, benefits or other compensation which constitute interest
under applicable law, provided that, to the maximum extent permitted by
applicable law, (a) any non-principal payment shall be characterized as an
expense or as compensation for something other than the use, forbearance or
detention of money and not as interest, and (b) all interest at any time
contracted for, reserved, charged or received shall be amortized, prorated,
allocated and spread, in equal parts during the full term of the Obligations. In
no event shall the Borrower or any other Person be obligated to pay, or any
Lender have any right or privilege to reserve, receive or retain, (a) any
interest in excess of the maximum amount of nonusurious interest permitted under
the laws of the State of Texas or the applicable laws (if any) of the United
States or of any other state, or (b) total interest in excess of the amount
which such Lender could lawfully have contracted for, reserved, received,
retained or charged had the interest been calculated for the full term of the
Obligations at the Ceiling Rate. On each day, if any, that the interest rate
(the "Stated Rate") called for under this Agreement or any other Loan Document
exceeds the Ceiling Rate, the rate at which interest shall accrue shall
automatically be fixed by operation of this sentence at the Ceiling Rate for
that day, and shall remain fixed at the Ceiling Rate for each day thereafter
until the total amount of interest accrued equals the total amount of interest
which would have accrued if there were no such ceiling rate imposed by this
sentence. Thereafter, interest shall accrue at the Stated Rate unless and until
the Stated Rate again exceeds the Ceiling Rate, in which case, the provisions of
the immediately preceding sentence shall again automatically operate to limit
the interest accrual rate to the Ceiling Rate. The daily interest rates to be
used in calculating interest at the Ceiling Rate shall be determined by dividing
the applicable Ceiling Rate per annum by the number of days in the calendar year
for which such calculation is being made. None of the terms and provisions
contained in this Agreement or in any other Loan Document (including, without
limitation, Section 9.1 hereof) which directly or indirectly relate to interest
shall ever be construed without
58
reference to this Section 11.7, or be construed to create a contract to pay for
the use, forbearance or detention of money at an interest rate in excess of the
Ceiling Rate. If the term of any Obligation is shortened by reason of
acceleration of maturity as a result of any Default or by any other cause, or by
reason of any required or permitted prepayment, and if for that (or any other)
reason any Lender at any time, including but not limited to, the stated
maturity, is owed or receives (and/or has received) interest in excess of
interest calculated at the Ceiling Rate, then and in any such event all of any
such excess interest shall be canceled automatically as of the date of such
acceleration, prepayment or other event which produces the excess, and, if such
excess interest has been paid to such Lender, it shall be credited pro tanto
against the then-outstanding principal balance of the Borrower's obligations to
such Lender, effective as of the date or dates when the event occurs which
causes it to be excess interest, until such excess is exhausted or all of such
principal has been fully paid and satisfied, whichever occurs first, and any
remaining balance of such excess shall be promptly refunded to its payor.
11.8 Survival. The obligations of the Borrower under Sections 2.2(c),
2.2(d), 7.10, 11.3 and 11.4 hereof and all other obligations of the Borrower in
any other Loan Document (to the extent stated therein), and the obligations of
the Lenders under Section 10.5 and 11.7 hereof, shall survive the repayment of
the Loans and Reimbursement Obligations and the termination of the Revolving
Loan Commitments and the Letters of Credit.
11.9 Captions. Captions and section headings appearing herein are
included solely for convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.
11.10 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
agreement and any of the parties hereto may execute this Agreement by signing
any such counterpart.
11.11 Governing Law. THIS AGREEMENT AND (EXCEPT AS THEREIN PROVIDED)
THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE APPLICABLE LAWS (OTHER THAN THE CONFLICT OF LAWS RULES) OF THE STATE OF
TEXAS AND THE UNITED STATES OF AMERICA FROM TIME TO TIME IN EFFECT.
11.12 Severability. Whenever possible, each provision of the Loan
Documents shall be interpreted in such manner as to be effective and valid under
applicable law. If any provision of any Loan Document shall be invalid, illegal
or unenforceable in any respect under any applicable law, the validity, legality
and enforceability of the remaining provisions of such Loan Document shall not
be affected or impaired thereby.
11.13 Tax Forms. With respect to each Lender which is organized under
the laws of a jurisdiction outside the United States, on the day of the initial
borrowing from each such Lender hereunder and from time to time thereafter if
requested by the Borrower or the Agent,
59
such Lender shall provide the Agent and the Borrower with the forms prescribed
by the Internal Revenue Service of the United States certifying as to such
Lender's status for purposes of determining exemption from United States
withholding taxes with respect to all payments to be made to such Lender
hereunder or other documents satisfactory to the Lender and the Agent indicating
that all payments to be made to such Lender hereunder are subject to such tax at
a rate reduced by an applicable tax treaty. Unless the Borrower and the Agent
shall have received such forms or such documents indicating that payments
hereunder are not subject to United States withholding tax or are subject to
such tax at a rate reduced by an applicable tax treaty, the Borrower or the
Agent shall withhold taxes from such payments at the applicable statutory rate
in the case of payments to or for any Lender organized under the laws of a
jurisdiction outside the United States.
11.14 Venue. The Borrower hereby irrevocably (a) agrees that any legal
proceeding against the Agent or any Lender arising out of or in connection with
the Loan Documents shall be brought in the district courts of Xxxxxx County,
Texas, or in the United States District Court for the Southern District of
Texas, Houston Division (collectively, the "Houston Courts"); (b) submits to the
non-exclusive jurisdiction of the Houston Courts; (c) agrees and consents that
service of process may be made upon it in any proceeding arising out of the Loan
Documents or any transaction contemplated thereby by service of process as
provided by Texas law; (d) WAIVES, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of any Loan Document or the transactions
contemplated thereby in the Houston Courts; and (e) WAIVES any claim that any
such suit, action or proceeding in any Houston Court has been brought in an
inconvenient forum. All of the obligations of the Borrower under the Loan
Documents are performable in Xxxxxx County, Texas. Nothing herein shall affect
the right of the Agent or any Lender to commence legal proceedings or otherwise
proceed against the Borrower in any jurisdiction or to serve process in any
manner permitted by applicable law. The Borrower agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions in any manner provided by law.
11.15 Confidentiality. Each Lender agrees to comply with its customary
procedures to keep any information delivered or made available by the Borrower
to it confidential from anyone other than Persons employed or retained by such
Lender who are or are expected to become engaged in evaluating, approving,
structuring or administering commitments, the Loans, or Letters of Credit or
participations therein or the collateral thereon or the Loan Documents, provided
that nothing herein shall prevent any Lender from disclosing such information
(a) to any other Lender, (b) to any Person if reasonably incidental to the
administration of the Loans, (c) upon the order of any court or administrative
agency, (d) upon the request or demand of any regulatory agency or authority
having jurisdiction over such Lender, (e) which has been publicly disclosed, (f)
in connection with any litigation to which any Lender, the Agent, or their
respective Affiliates may be a party, (f) to the extent reasonably required or
desirable in connection with the exercise of any remedy hereunder or under any
Loan Document, (h) to such
60
Lender's legal counsel and independent auditors, and (i) to any actual or
proposed participant or assignee of all or part of its Loans, Commitments or
participations hereunder.
11.16 Amended and Restated Credit Agreement. This Agreement amends and
restates in its entirety that certain Third Amended and Restated Credit
Agreement dated as of August 20, 1992, by and among the Borrower, each of the
financial institutions which is or which may from time to time become a party
thereto, the issuer of certain letters of credit, and The Bank of Nova Scotia,
as agent, as amended, restated, modified and supplemented prior to the date
hereof (the "Original Credit Agreement"). The Notes are given, in part, in
renewal, extension and rearrangement of the unpaid balances owing on the Notes
(as that term is defined in the Original Credit Agreement).
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the Effective Date.
STERLING CHEMICALS, INC.
By: /s/ Xxx X. Xxxx
Xxx X. Xxxx, Vice President-Finance & Chief
Financial Officer
Address for Notices:
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xx. Xxx X. Xxxx
Telecopy No.: (713) 654-9552
61
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, as Agent and as a Lender
By: /s/ Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxx,
Vice President
Address for Notices:
Revolving Loan Commitment: 000 Xxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
$19,090,909.09 Attention: Xx. Xxxxxxx X. Xxxx
Telecopy No.: (000) 000-0000
Term Loan:
$15,909,090.91
00
XXX XXXX XX XXXX XXXXXX,
as Documentation Agent and as a Lender
By: /s/ Xxxxxx Xxxxx
Name: F.C.N. Xxxxx
Title: Senior Manager Loan Operations
Address for Notices:
Revolving Loan Commitment: 0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
$19,090,909.09 Attention: Xx. Xxxxx Xxxx
Telecopy No.: (000) 000-0000
Term Loan: with a copy to
$15,909,090.91 000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxxx Xxxxx
Telecopy No.: (000) 000-0000
63
ABN AMRO BANK N.V., HOUSTON AGENCY,
as Co-Agent and as a Lender
By: /s/ Xxx Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Assistant V.P.
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: V.P.
Address for Notices:
Revolving Loan Commitment: Xxxxx Xxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
$16,363,636.36 Attention: Xx. Xxxxxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
Term Loan:
$13,636,363.64
64
BANK OF SCOTLAND,
as Co-Agent and as a Lender
By:/s/ Xxxxxxxxx Xxxxxx
Name: Xxxxxxxxx Xxxxxx
Title: V.P. and Branch Manager
Address for Notices:
Revolving Loan Commitment: 000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
$16,363,636.36 Attention: Xx. Xxxxx Xxxxxx
Telecopy No.: (000) 000-0000
Term Loan:
$13,636,363.64
65
CREDIT LYONNAIS NEW YORK BRANCH,
as Co-Agent and as a Lender
By: /s/ Xavier Ratouis
Name: Xavier Ratouis
Title: Sr. V.P.
Address for Notices:
Revolving Loan Commitment: x/x Xxxxxx Xxxxxxxx Xxxxxxxxxxxxxx Xxxxxx
0000 Xxxxxxxxx, Xxxxx 0000
$16,363,636.36 Xxxxxxx, Xxxxx 00000
Attention: Mr. Page Dillehunt
Telecopy No.: (000) 000-0000
Term Loan:
$13,636,363.64
00
XXXXXX XXXXXXX XXXXXXX AGENCY
By: /s/ Xxxxxxxxxxx X. Xxxxxxx
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: V.P.
By: /s/ Mei Xxx Xxxx
Name: Mei Xxx Xxxx
Title: Group V.P.
Address for Notices:
Revolving Loan Commitment: 0000 Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
$8,181,818.18 Attention: Mr. Xxxxx Xxxxxxx
Telecopy No.: (000) 000-0000
Term Loan:
$6,818,181.82
00
XXXXX XXXXXXXXXX XXXX XX XXXXX, N.A.
By: /s/ Xxx X. Xxxxxx
Name: Xxx X. Xxxxxx
Title: V.P.
Address for Notices:
Revolving Loan Commitment: 0000 Xxxxxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxx 00000
$8,181,818.18 Attention: Xx. Xxx Xxxxxx
Telecopy No.: (000) 000-0000
Term Loan:
$6,818,181.82
68
THE LONG-TERM CREDIT BANK OF JAPAN,
LIMITED, NEW YORK BRANCH
By: /s/ X. Xxxxxx
Name: Xxxxxx Xxxxxx
Title: Joint General Manager
Address for Notices:
Revolving Loan Commitment: 000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
$8,181,818.18 Attention: Xx. Xxxxx Xxxxxxx
Telecopy No.: (000) 000-0000
Term Loan:
$6,818,181.82
69
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Xxxxx Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: V.P.
By:
Name:
Title:
Address for Notices:
Revolving Loan Commitment: 0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
$8,181,818.18 Attention: Ms. Xxxxx Xxxxx
Telecopy No.: (000) 000-0000
Term Loan: with a copy to:
$6,818,181.82 000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxxxx Xxxx
Telecopy No.: (000) 000-0000
70
SOCIETE GENERALE, SOUTHWEST AGENCY
By: /s/ Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: First V.P.
Address for Notices:
Revolving Loan Commitment: 0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
$8,181,818.18 Attention: Ms. Tequlla English
Telecopy No.: (000) 000-0000
Term Loan: with a copy to
$6,818,181.82 0000 Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Mr. Xxx Xxxxxxx
Telecopy No.: (000) 000-0000
71
HIBERNIA NATIONAL BANK
By: /s/ Xxxxxxx Xxxxx
Name: Xxxxxxx Xxxxx
Title: Banking Officer
Address for Notices:
Revolving Loan Commitment: 000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxx 00000
$5,454,545.45 Attention: Ms. Xxxxxxx Xxxxx
Telecopy No.: (000) 000-0000
Term Loan:
$4,545,454.55
72
COMERICA BANK
By: /s/ Xxxxxxx Xxxxxx
Name: Xxxxxxx Xxxxxx
Title: V.P.
Address for Notices:
Revolving Loan Commitment: 000 Xxxxxxxx Xxxxxx, 0xx Xxxxx, XX0000
Xxxxxxx, Xxxxxxxx 00000
$5,454,545.45 Attention: Xx. Xxxxxxx X. Xxxxxx
Telecopy No.: (000) 000-0000
Term Loan:
$4,545,454.55
73
CIBC, INC.
By: /s/ Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: V.P.
Address for Notices:
Revolving Loan Commitment: Two Paces West
0000 Xxxxx Xxxxx Xxxx, Xxxxx 0000
$5,454,545.45 Xxxxxxx, Xxxxxxx 00000
Attention: Loan Operations
Telecopy No.: (000) 000-0000
Term Loan:
with a copy to:
$4,545,454.55
Canadian Imperial Bank of Commerce
Two Houston Center
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xx. Xxxx Xxxxxxxxx
Telecopy No.: (000) 000-0000
00
XXXXXXXX XXXX XX XXXXXX
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Group Vice President
By: /s/ Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Assistant Vice President
Address for Notices:
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xx. Xxxxxxxxx Xxxx
Telecopy No.: (000) 000-0000
Address for Notices:
Revolving Loan Commitment: 0000 Xxx Xxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
$5,454,545.45 Attention: Xx. Xxxxx Xxxxxxxxx
Telecopy No.: (000) 000-0000
Term Loan:
$4,545,454.55
75
76
[STERLING CHEMICALS, INC. LETTERHEAD]
REQUEST FOR EXTENSION OF CREDIT
-------------------------------
________________, 199____
Texas Commerce Bank National Association, as Agent
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Manager, Refining and Petrochemicals Group
Gentlemen:
The undersigned hereby certifies that the undersigned is the
_________________________________ of STERLING CHEMICALS, INC., a Delaware
corporation (the "Company"), and that as such the undersigned is authorized to
execute this Request for Extension of Credit (the "Request") on behalf of the
Company pursuant to the Credit Agreement (as it may be amended, supplemented or
restated from time to time, the "Credit Agreement") dated as of April 13, 1995,
by and among the Company, Texas Commerce Bank National Association, as Agent,
The Bank of Nova Scotia, as Documentation Agent, ABN AMRO Bank N.V., Houston
Agency, Bank of Scotland and Credit Lyonnais, New York Branch, as Co-Agents, and
the Lenders therein named. The (check one) [___] Loan [___] Letter of Credit
being requested hereby is to be in the amount set forth in (b) below and is
requested to be made on __________________, 199____, which is a Business Day.
The undersigned further certifies, represents and warrants that to the
undersigned's knowledge, after due inquiry (each capitalized term used herein
having the same meaning given to it in the Credit Agreement unless otherwise
specified herein):
(a) As of the date hereof, the Maximum Revolving
Loan Available Amount is: $__________
(b) The Company hereby requests under this Request a Revolving Loan or
Letter of Credit (as indicated above) in the amount of $____________.
(c) If a Letter of Credit is requested hereby, it should be issued for the
benefit of __________________________________ and should have an
expiration date of _______________________, 199___ (which date is no
later than one year from the proposed date of
EXHIBIT A
to Credit Agreement
Page 1
issuance) and any special language to be incorporated into such Letter
of Credit is attached hereto. The sum of the face amount of the
requested Letter of Credit plus the Letter of Credit Liabilities as
the date hereof does not exceed $20,000,000.
(d) The representations and warranties made in each Loan Document are true
and correct in all material respects on and as of the time of delivery
hereof, with the same force and effect as if made on and as of the
time of delivery hereof.
(e) No event which has had (or could reasonably be expected to have) a
Material Adverse Effect has occurred.
(f) No Default or Event of Default has occurred and is continuing or will
occur as a result of the making of the Loan or the issuance of the
Letter of Credit requested hereby.
Thank you for your attention to this matter.
Very truly yours,
STERLING CHEMICALS, INC.
By:___________________________________
Name:_________________________________
Title:________________________________
EXHIBIT A
to Credit Agreement
Page 2
BORROWING BASE CERTIFICATE
The undersigned hereby certifies that the undersigned is the
_______________________ of STERLING CHEMICALS, INC., a Delaware corporation (the
"Company"), and that as such the undersigned is authorized to execute this
Borrowing Base Certificate on behalf of the Company pursuant to the Credit
Agreement (as it may be amended, supplemented or restated from time to time, the
"Credit Agreement") dated as of April 13, 1995, by and among the Company and
Texas Commerce Bank National Association, as Agent, The Bank of Nova Scotia, as
Documentation Agent, ABN AMRO Bank, N. V., Houston Agency, Bank of Scotland and
Credit Lyonnais, New York Branch, as Co-Agents, and the Lenders therein named.
The undersigned further certifies, represents and warrants that to the
undersigned's knowledge, after due inquiry (each capitalized term used herein
having the same meaning given to it in the Credit Agreement unless otherwise
specified herein):
(a) The Borrowing Base as the date hereof is calculated as follows:
(i) Eligible Accounts as of the date hereof $_____
(ii) 85% times Line (a)(i) $_____
(iii) Eligible Inventory as of the date hereof $_____
(iv) 65% times Line (a)(iii) $_____
(v) Value (determined in accordance with GAAP)
as of the date hereof of materials and supplies
which are not Eligible Inventory $_____
(vi) 75% times Line (a)(v)
(not to exceed $7,000,000) $_____
(vii) 65% times Line (a)(vi) $_____
(viii) The Dollar Equivalent of the current unpaid
principal balance of the Canadian Facility $_____
(ix) Borrowing Base as the date hereof [Line (a)(ii)
plus (y) the lesser of (I) Line (a)(ii) or (II) the
sum of Line (a)(iv) plus Line (a)(vii) less (z)
Line (a)(viii)] $_____
EXHIBIT B
to Credit Agreement
Page 1
(b) Calculations of the Eligible accounts and Eligible Inventory are set
forth on Schedule 1 attached hereto and such calculations are true and
correct in all respects and conform to the definitions of "Eligible
Accounts" and "Eligible Inventory" set forth in the Credit Agreement.
(c) No Default or Event of Default has occurred and is continuing.
Dated _______________, 199__.
_____________________________________
(SIGNATURE OF AUTHORIZED OFFICER)
EXHIBIT B
to Credit Agreement
Page 2
SUBSIDIARIES
------------
1. Sterling Chemicals International, Inc., a Delaware corporation (100% owned
by Borrower)
2. Sterling Chemicals Energy, Inc., a Delaware corporation (100% owned by
Borrower)
3. Sterling Canada, Inc., a Delaware corporation (100% owned by Borrower)
4. Sterling Chemicals Marketing, Inc., a U.S. Virgin Islands corporation (100%
owned by Borrower)
5. Sterling NRO, Ltd., an Ontario corporation (100% owned by Sterling Canada,
Inc.)
6. Sterling Pulp Chemicals US, Inc., a Delaware corporation (100% owned by
Sterling Canada, Inc.)
7. Sterling Pulp Chemicals, Ltd., an Ontario corporation (100% owned by
Sterling Canada, Inc.)
EXHIBIT C
TERM NOTE
Houston, Texas
$__________ ______________, 199_
FOR VALUE RECEIVED, STERLING CHEMICALS, INC. ("Maker"), a Delaware
corporation, promises to pay to the order of _______________________________
______________________ ___ ("Payee"), a __________________, at the principal
office of Texas Commerce Bank National Association, a national banking
association, 000 Xxxx Xxxxxx, Xxxxxxx, Xxxxxx Xxxxxx, Xxxxx 00000, in
immediately available funds and in lawful money of the United States of America,
the principal sum of __________________________________________ Dollars ($_____
_____________) (or the unpaid balance of all principal advanced against this
note, if that amount is less), together with interest on the unpaid principal
balance of this note from time to time outstanding at the rate or rates provided
in that certain Interest Rate Agreement (as amended, supplemented, restated or
replaced from time to time, the "Interest Rate Agreement") attached as Schedule
1 to the Credit Agreement (hereinafter defined); provided, that for the full
term of this note the interest rate produced by the aggregate of all sums paid
or agreed to be paid to the holder of this note for the use, forbearance or
detention of the debt evidenced hereby (including, but not limited to, all
interest on this note at the Stated Rate plus the Additional Interest) shall not
exceed the Ceiling Rate. Any term defined in the Interest Rate Agreement or in
that certain Credit Agreement (as amended, supplemented, restated or replaced
from time to time, the "Credit Agreement") dated as of April 13, 1995 among
Maker, certain signatory financial institutions named therein, The Bank of Nova
Scotia, as Documentation Agent, ABN AMRO Bank N.V., Houston Agency, Bank of
Scotland and Credit Lyonnais, New York Branch, as Co-Agents, and Texas Commerce
Bank National Association, as Agent, which is used in this note and which is not
otherwise defined in this note shall have the meaning ascribed to it in the
Credit Agreement or the Interest Rate Agreement, as the case may be.
1. Credit Agreement; Advances; Security. This note has been issued
pursuant to the terms of the Credit Agreement, and is one of the Term Notes
referred to in the Credit Agreement. Advances against this note by Payee or
other holder hereof shall be governed by the terms and provisions of the Credit
Agreement. Reference is hereby made to the Credit Agreement for all purposes.
Payee is entitled to the benefits of and security provided for in the Credit
Agreement. The unpaid principal balance of this note at any time shall be the
total of all amounts lent or advanced against this note less the amount of all
payments or permitted prepayments made on this note and by or for the account of
Maker. All loans and advances and all payments and permitted prepayments made
hereon may be endorsed by the holder of this note on a schedule which may be
attached hereto (and thereby made a part hereof for all purposes) or otherwise
recorded in the holder's records; provided, that any failure to make notation
(or any error in such notation) of (a) any advance shall not cancel, limit or
otherwise affect Maker's
EXHIBIT D
to Credit Agreement
Page 1
obligations or any holder's rights with respect to that advance, or (b) any
payment or permitted prepayment of principal shall not cancel, limit or
otherwise affect Maker's entitlement to credit for that payment as of the date
received by the holder.
2. Mandatory Payments of Principal and Interest.
(a) Accrued and unpaid interest on the unpaid principal balance of this
note shall be due and payable on the Interest Payment Dates in accordance with
the terms of the Credit Agreement and the Interest Rate Agreement.
(b) The principal of this note shall be due and payable in quarterly
installments due on each Quarterly Date, beginning on July 1, 1995, equal to
___________% times $4,464,285.71 (subject to adjustment as provided in the
Credit Agreement). On the Maturity Date, the entire unpaid principal balance of
this note and all accrued and unpaid interest on the unpaid principal balance of
this note shall be finally due and payable.
(c) The Credit Agreement provides for required prepayments of the
indebtedness evidenced hereby upon terms and conditions specified therein.
3. No Usury Intended; Spreading. Notwithstanding any provision to the
contrary contained in this note or any of the other Loan Documents, it is
expressly provided that in no case or event shall the aggregate of (i) all
interest on the unpaid balance of this note, accrued or paid from the date
hereof and (ii) the aggregate of any other amounts accrued or paid pursuant to
this note or any of the other Loan Documents, which under applicable laws are or
may be deemed to constitute interest upon the indebtedness evidenced by this
note from the date hereof, ever exceed the Ceiling Rate. In this connection,
Maker and Payee stipulate and agree that it is their common and overriding
intent to contract in strict compliance with applicable federal and Texas usury
laws (and the usury laws of any other jurisdiction whose usury laws are deemed
to apply to this note or any of the other Loan Documents despite the intention
and desire of the parties to apply the usury laws of the State of Texas). In
furtherance thereof, none of the terms of this note or any of the other Loan
Documents shall ever be construed to create a contract to pay, as consideration
for the use, forbearance or detention of money, interest at a rate in excess of
the Ceiling Rate. Maker or other parties now or hereafter becoming liable for
payment of the indebtedness evidenced by this note shall never be liable for
interest in excess of the Ceiling Rate. If, for any reason whatever, the
interest paid or received on this note during its full term produces a rate
which exceeds the Ceiling Rate, the holder of this note shall credit against the
principal of this note (or, if such indebtedness shall have been paid in full,
shall refund to the payor of such interest) such portion of said interest as
shall be necessary to cause the interest paid on this note to produce a rate
equal to the Ceiling Rate. All sums paid or agreed to be paid to the holder of
this note for the use, forbearance or detention of the indebtedness evidenced
hereby shall, to the extent permitted by applicable law, be amortized,
EXHIBIT D
to Credit Agreement
Page 2
prorated, allocated and spread in equal parts throughout the full term of this
note, so that the interest rate is uniform throughout the full term of this
note. The provisions of this Paragraph shall control all agreements, whether now
or hereafter existing and whether written or oral, between Maker and Payee.
4. Default. The Credit Agreement provides for the acceleration of the
maturity of this note and other rights and remedies upon the occurrence of
certain events specified therein.
5. Waivers by Maker and Others. Except to the extent, if any, that
notice of default is expressly required herein or in any of the other Loan
Documents, Maker and any and all co-makers, endorsers, guarantors and sureties
severally waive notice (including, but not limited to, notice of intent to
accelerate and notice of acceleration, notice of protest and notice of
dishonor), demand, presentment for payment, protest, diligence in collecting and
the filing of suit for the purpose of fixing liability and consent that the time
of payment hereof may be extended and re-extended from time to time without
notice to any of them. Each such person agrees that his, her or its liability
on or with respect to this note shall not be affected by any release of or
change in any guaranty or security at any time existing or by any failure to
perfect or to maintain perfection of any lien against or security interest in
any such security or the partial or complete unenforceability of any guaranty or
other surety obligation, in each case in whole or in part, with or without
notice and before or after maturity.
6. Paragraph Headings. Paragraph headings appearing in this note are for
convenient reference only and shall not be used to interpret or limit the
meaning of any provision of this note.
7. Choice of Law. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE APPLICABLE LAWS OF THE STATE OF TEXAS AND THE UNITED STATES
OF AMERICA FROM TIME TO TIME IN EFFECT.
8. Successors and Assigns. This note and all the covenants and
agreements contained herein shall be binding upon, and shall inure to the
benefit of, the respective legal representatives, heirs, successors and assigns
of Maker and Payee.
9. Records of Payments. The records of Payee shall be prima facie
evidence of the amounts owing on this note.
10. Severability. If any provision of this note is held to be illegal,
invalid or unenforceable under present or future laws, the legality, validity
and enforceability of the remaining provisions of this note shall not be
affected thereby, and this note shall be liberally construed so as to carry out
the intent of the parties to it.
EXHIBIT D
to Credit Agreement
Page 3
11. Business Loans. Maker warrants and represents to Payee and all other
holders of this note that all loans evidenced by this note are and will be for
business, commercial, investment or other similar purpose and not primarily for
personal, family, household or agricultural use, as such terms are used in
Chapter One.
STERLING CHEMICALS, INC.
By:___________________________________
Name:_________________________________
Title:________________________________
EXHIBIT D
to Credit Agreement
Page 0
XXXXXXXXX XXXX
Xxxxxxx, Xxxxx
$__________ ________________, 199_
FOR VALUE RECEIVED, STERLING CHEMICALS, INC. ("Maker"), a Delaware
corporation, promises to pay to the order of _________________________________
("Payee"), a _______________, at the principal office of Texas Commerce Bank
National Association, a national banking association, 000 Xxxx Xxxxxx, Xxxxxxx,
Xxxxxx Xxxxxx, Xxxxx 00000, in immediately available funds and in lawful money
of the United States of America, the principal sum of_____________________
___________________ Dollars ($____________) (or the unpaid balance of all
principal advanced against this note, if that amount is less), together with
interest on the unpaid principal balance of this note from time to time
outstanding at the rate or rates provided in that certain Interest Rate
Agreement (as amended, supplemented, restated or replaced from time to time, the
"Interest Rate Agreement") attached as Schedule 1 to the Credit Agreement
(hereinafter defined); provided, that for the full term of this note the
interest rate produced by the aggregate of all sums paid or agreed to be paid to
the holder of this note for the use, forbearance or detention of the debt
evidenced hereby (including, but not limited to, all interest on this note at
the Stated Rate plus the Additional Interest) shall not exceed the Ceiling Rate.
Any term defined in the Interest Rate Agreement or in that certain Credit
Agreement (as amended, supplemented, restated or replaced from time to time, the
"Credit Agreement") dated as of April 13, 1995 among Maker, certain signatory
financial institutions named therein, The Bank of Nova Scotia, as Documentation
Agent, ABN AMRO Bank, N.V., Houston Agency, Bank of Scotland and Credit
Lyonnais, New York Branch, as Co-Agents, and Texas Commerce Bank National
Association, as Agent, which is used in this note and which is not otherwise
defined in this note shall have the meaning ascribed to it in the Credit
Agreement or the Interest Rate Agreement, as the case may be.
1. Credit Agreement; Advances; Security. This note has been issued
pursuant to the terms of the Credit Agreement, and is one of the Revolving Notes
referred to in the Credit Agreement. Advances against this note by Payee or
other holder hereof shall be governed by the terms and provisions of the Credit
Agreement. Reference is hereby made to the Credit Agreement for all purposes.
Payee is entitled to the benefits of and security provided for in the Credit
Agreement. The unpaid principal balance of this note at any time shall be the
total of all amounts lent or advanced against this note less the amount of all
payments or permitted prepayments made on this note and by or for the account of
Maker. All loans and advances and all payments and permitted prepayments made
hereon may be endorsed by the holder of this note on a schedule which may be
attached hereto (and thereby made a part hereof for all purposes) or otherwise
recorded in the holder's records; provided, that any failure to make notation
(or any error in such notation) of (a) any advance shall not cancel, limit or
otherwise affect Maker's
EXHIBIT E
to Credit Agreement
Page 1
obligations or any holder's rights with respect to that advance, or (b) any
payment or permitted prepayment of principal shall not cancel, limit or
otherwise affect Maker's entitlement to credit for that payment as of the date
received by the holder.
2. Mandatory Payments of Principal and Interest.
(a) Accrued and unpaid interest on the unpaid principal balance of this
note shall be due and payable on the Interest Payment Dates in accordance with
the terms of the Credit Agreement and the Interest Rate Agreement.
(b) The entire unpaid principal balance of this note shall be finally due
and payable on the Maturity Date.
(c) The Credit Agreement provides for required prepayments of the
indebtedness evidenced hereby upon terms and conditions specified therein.
3. No Usury Intended; Spreading. Notwithstanding any provision to the
contrary contained in this note or any of the other Loan Documents, it is
expressly provided that in no case or event shall the aggregate of (i) all
interest on the unpaid balance of this note, accrued or paid from the date
hereof and (ii) the aggregate of any other amounts accrued or paid pursuant to
this note or any of the other Loan Documents, which under applicable laws are or
may be deemed to constitute interest upon the indebtedness evidenced by this
note from the date hereof, ever exceed the Ceiling Rate. In this connection,
Maker and Payee stipulate and agree that it is their common and overriding
intent to contract in strict compliance with applicable federal and Texas usury
laws (and the usury laws of any other jurisdiction whose usury laws are deemed
to apply to this note or any of the other Loan Documents despite the intention
and desire of the parties to apply the usury laws of the State of Texas). In
furtherance thereof, none of the terms of this note or any of the other Loan
Documents shall ever be construed to create a contract to pay, as consideration
for the use, forbearance or detention of money, interest at a rate in excess of
the Ceiling Rate. Maker or other parties now or hereafter becoming liable for
payment of the indebtedness evidenced by this note shall never be liable for
interest in excess of the Ceiling Rate. If, for any reason whatever, the
interest paid or received on this note during its full term produces a rate
which exceeds the Ceiling Rate, the holder of this note shall credit against the
principal of this note (or, if such indebtedness shall have been paid in full,
shall refund to the payor of such interest) such portion of said interest as
shall be necessary to cause the interest paid on this note to produce a rate
equal to the Ceiling Rate. All sums paid or agreed to be paid to the holder of
this note for the use, forbearance or detention of the indebtedness evidenced
hereby shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread in equal parts throughout the full term of this note, so
that the interest rate is uniform throughout the full term of this note. The
provisions of this Paragraph shall control all agreements, whether now or
hereafter existing and whether written or oral, between Maker and Payee.
EXHIBIT E
to Credit Agreement
Page 2
4. Default. The Credit Agreement provides for the acceleration of the
maturity of this note and other rights and remedies upon the occurrence of
certain events specified therein.
5. Waivers by Maker and Others. Except to the extent, if any, that
notice of default is expressly required herein or in any of the other Loan
Documents, Maker and any and all co-makers, endorsers, guarantors and sureties
severally waive notice (including, but not limited to, notice of intent to
accelerate and notice of acceleration, notice of protest and notice of
dishonor), demand, presentment for payment, protest, diligence in collecting and
the filing of suit for the purpose of fixing liability and consent that the time
of payment hereof may be extended and re-extended from time to time without
notice to any of them. Each such person agrees that his, her or its liability
on or with respect to this note shall not be affected by any release of or
change in any guaranty or security at any time existing or by any failure to
perfect or to maintain perfection of any lien against or security interest in
any such security or the partial or complete unenforceability of any guaranty or
other surety obligation, in each case in whole or in part, with or without
notice and before or after maturity.
6. Paragraph Headings. Paragraph headings appearing in this note are for
convenient reference only and shall not be used to interpret or limit the
meaning of any provision of this note.
7. Choice of Law. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE APPLICABLE LAWS OF THE STATE OF TEXAS AND THE UNITED STATES
OF AMERICA FROM TIME TO TIME IN EFFECT.
8. Successors and Assigns. This note and all the covenants and
agreements contained herein shall be binding upon, and shall inure to the
benefit of, the respective legal representatives, heirs, successors and assigns
of Maker and Payee.
9. Records of Payments. The records of Payee shall be prima facie
evidence of the amounts owing on this note.
10. Severability. If any provision of this note is held to be illegal,
invalid or unenforceable under present or future laws, the legality, validity
and enforceability of the remaining provisions of this note shall not be
affected thereby, and this note shall be liberally construed so as to carry out
the intent of the parties to it.
11. Revolving Loan. Subject to the terms and provisions of the Credit
Agreement, Maker may use all or any part of the credit provided to be evidenced
by this note at any time before the Maturity Date. Maker may borrow, repay and
reborrow hereunder, and except as set forth in the Credit Agreement there is no
limitation on the number of advances made hereunder. Pursuant to Article
15.10(b) of Chapter 15 ("Chapter 15") of Title 79, Texas
EXHIBIT E
to Credit Agreement
Page 3
Revised Civil Statutes, 1925, as amended, Maker and Payee expressly agree that
Chapter 15 shall not apply to this note or to any loan evidenced by this note
and that neither this note nor any such loan shall be governed by or subject to
the provisions of Chapter 15 in any manner whatsoever.
12. Business Loans. Maker warrants and represents to Payee and all other
holders of this note that all loans evidenced by this note are and will be for
business, commercial, investment or other similar purpose and not primarily for
personal, family, household or agricultural use, as such terms are used in
Chapter One.
STERLING CHEMICALS, INC.
By:___________________________________
Name:_________________________________
Title:________________________________
EXHIBIT E
to Credit Agreement
Page 4
ASSIGNMENT AND ACCEPTANCE
-------------------------
Dated: ___________________, 199_
Reference is made to the Credit Agreement dated as of April 13, 1995
(as restated, amended, modified, supplemented and in effect from time to time,
the "Credit Agreement"), among Sterling Chemicals, Inc., a Delaware corporation
(the "Company"), the Lenders named therein, The Bank of Nova Scotia, a
Documentation Agent, ABN AMRO Bank N.V., Houston Agency, Bank of Scotland and
Credit Lyonnais, New York Branch, as Co-Agents, and Texas Commerce Bank National
Association, as Agent (the "Agent"). Capitalized terms used herein and not
otherwise defined shall have the meanings assigned to such terms in the Credit
Agreement. This Assignment and Acceptance, between the Assignor (as defined and
set forth on Schedule I hereto and made a part hereof) and the Assignee (as
defined and set forth on Schedule I hereto and made a part hereof) is dated as
of the Effective Date (as set forth on Schedule I hereto and made a part
hereof).
1. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor, as of the
Effective Date, an undivided ________% interest (the "Assigned Interest") in and
to all the Assignor's rights and obligations under the Credit Agreement as set
forth on Schedule I (collectively, the "Assigned Facilities," individually, an
"Assigned Facility").
2. The Assignor (i) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or any other Loan Document or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Credit Agreement, any other Loan Document or any other instrument
or document furnished pursuant thereto, other than that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Company or its Subsidiaries or the performance or observance by the
Company or its Subsidiaries of any of its respective obligations under the
Credit Agreement, any other Loan Document or any other instrument or document
furnished pursuant thereto; and (iii) attaches the Note(s) held by it evidencing
the Assigned Facility or Facilities, as the case may be, and requests that the
Agent exchange such Note(s) for a new Note or Notes payable to the Assignor (if
the Assignor has retained any interest in the Assigned Facility or Facilities)
and a new Note or Notes payable to the Assignee in the respective amounts which
reflect the assignment being made hereby (and after giving effect to any other
assignments which have become effective on the Effective Date).
EXHIBIT F
to Credit Agreement
Page 1
3. The Assignee (i) represents and warrants that it is legally authorized
to enter into this Assignment and Acceptance; (ii) confirms that it has received
a copy of the Credit Agreement, together with copies of the financial statements
referred to in Section 6.2 thereof, or if later, the most recent financial
statements delivered pursuant to Section 7.2 thereof, and such other documents
and information as it has deemed appropriate to make its own credit analysis;
(iii) agrees that it will, independently and without reliance upon the Agent,
the Assignor or any other Lender and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Credit Agreement; (iv) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under the Credit Agreement as are delegated to the Agent by the
terms thereof, together with such powers as are reasonably incidental thereto;
(v) agrees that it will be bound by the provisions of the Credit Agreement and
will perform in accordance with its terms all the obligations which by the terms
of the Credit Agreement are required to be performed by it as a Lender; (vi) if
the Assignee is organized under the laws of a jurisdiction outside the United
States, attaches the forms prescribed by the Internal Revenue Service of the
United States certifying as to the Assignee's exemption from United States
withholding taxes with respect to all payments to be made to the Assignee under
the Credit Agreement or such other documents as are necessary to indicate that
all such payments are subject to such tax at a rate reduced by an applicable tax
treaty, and (vii) has supplied the information requested on the administrative
questionnaire submitted by the Agent.
4. Following the execution of this Assignment and Acceptance, it will
be delivered to the Agent for acceptance by it and the Company and recording by
the Agent pursuant to Section 11.6 of the Credit Agreement, effective as of the
Effective Date (which Effective Date shall, unless otherwise agreed to by the
Agent, be at least five Business Days after the execution of this Assignment and
Acceptance).
5. Upon such acceptance and recording, from and after the Effective Date,
the Agent shall make all payments in respect of the Assigned Interest (including
payments of principal, interest, fees and other amounts) to the Assignee,
whether such amounts have accrued prior to the Effective Date or accrue
subsequent to the Effective Date. The Assignor and Assignee shall make all
appropriate adjustments in payments for periods prior to the Effective Date by
the Agent or with respect to the making of this assignment directly between
themselves.
6. From and after the Effective Date, (i) the Assignee shall be a party
to the Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder, and (ii) the
Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement.
EXHIBIT F
to Credit Agreement
Page 2
7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed by their respective duly authorized officers on
Schedule I hereto.
EXHIBIT F
to Credit Agreement
Page 3
SCHEDULE I TO ASSIGNMENT AND ACCEPTANCE
Legal Name of Assignor: ______________________________________________________
Legal Name of Assignee: ______________________________________________________
Effective Date of Assignment: __________________, 199_
Principal
Amount (or,
with respect
to Letters
Assigned of Credit, face
Facilities amount) Assigned
---------- ----------------
Term Loans: $_______________
Revolving Loans: $_______________
Letter of Credit
participation interests $_______________
Total $______________
Accepted:
TEXAS COMMERCE BANK NATIONAL _______________________________________
ASSOCIATION, as Agent as Assignor
By:_________________________ By:____________________________________
Name:_______________________ Name:__________________________________
Title:______________________ Title:_________________________________
EXHIBIT F
to Credit Agreement
Page 1
____________________________
as Assignee
By:_________________________
Name:_______________________
Title:______________________
Acknowledged and Agreed:
STERLING CHEMICALS, INC.
By:_________________________
Name:_______________________
Title:______________________
EXHIBIT F
to Credit Agreement
Page 2
COMPLIANCE CERTIFICATE
----------------------
The undersigned hereby certifies that the undersigned is the _____________
________________________________ of STERLING CHEMICALS, INC., a Delaware
corporation (the "Borrower"), and that as such the undersigned is authorized to
execute this certificate on behalf of the Borrower pursuant to the Credit
Agreement (as it may be amended, supplemented or restated from time to time,
the "Credit Agreement") dated as of April 13, 1995, by and among the Borrower,
TEXAS COMMERCE BANK NATIONAL ASSOCIATION, as Agent, a national banking
association, The Bank of Nova Scotia, as Documentation Agent, ABN AMRO Bank
N.V., Houston Agency, Bank of Scotland and Credit Lyonnais, New York Branch, as
Co-Agents, and the financial institutions therein named; and that a review of
the Borrower and its Subsidiaries has been made under the supervision of the
undersigned with a view to determining whether the Borrower and its Subsidiaries
have fulfilled all of their respective obligations under the Credit Agreement,
the Notes and the other Loan Documents; and on behalf of the Borrower further
certifies, represents and warrants that to the undersigned's knowledge, after
due inquiry (each capitalized term used herein having the same meaning given to
it in the Credit Agreement unless otherwise specified):
(a) The financial statements delivered to the Agent concurrently
with this Compliance Certificate have been prepared in accordance with
GAAP consistently followed throughout the period indicated and fairly
present the financial condition and results of operations of the
applicable Persons as at the end of, and for, the period indicated
(subject, in the case of Quarterly Financial Statements and monthly
statements of income and cash flow, to normal changes resulting from
year-end adjustments).
(b) No Default or Event of Default has occurred and is continuing.
In this regard, the compliance with the provisions of Section 7.3 of the
Credit Agreement is as follows:
(i) Section 7.3(a) -- Debt to EBITDA Ratio
--------------
Actual Required
------ --------
______ to 1.00 4.00 to 1.00
(ii) Section 7.3(b) -- Fixed Charge Coverage Ratio
--------------
Actual Required
------ --------
______ to 1.00 1.25 to 1.00
EXHIBIT G
to Credit Agreement
Page 1
(iii) Section 7.3(c) -- Adjusted Fixed Charge Ratio (only required in case of
-------------- dividends)
Actual Required
------ --------
______ to 1.00 1.10 to 1.00
(iv) Section 7.3(d) -- Net Worth
______________
Actual Required
------ --------
$ _______ $ ________
(v) Section 7.3(e) -- Current Ratio
Actual Required
------ --------
______ to 1.00 1.10 to 1.00
DATED as of __________________, 199___.
-----------------------------------
[SIGNATURE OF AUTHORIZED OFFICER]
EXHIBIT G
to Credit Agreement
Page 2
EXHIBIT H
EXISTING LETTERS OF CREDIT
ISSUER LC# BENEFICIARY AMOUNT
------ --- ----------- ------
Bank of Nova Scotia A152180 Insurance Company of North America $ 20,000
Bank of Nova Scotia A152224 Texas Natural Resource Conservation Commission $ 387,450.00
Bank of Nova Scotia A152225 Texas Natural Resource Conservation Commission $1,464,517.00
Bank of Nova Scotia A152413 Reliance National Risk Specialists $ 300,000.00
-------------
TOTAL $2,171,967.00
=============
SCHEDULE 6.10
ERISA MATTERS
NONE
SCHEDULE 8.1
EXISTING BORROWED MONEY INDEBTEDNESS
NONE
----
SCHEDULE 8.2
EXISTING LIENS
Liens existing under the Security Agreement dated as of August 1, 1988, between
BP Chemicals Inc., formerly known as BP Chemicals America Inc., as secured
party, and Sterling Chemicals, Inc., as debtor, securing obligations under the
Production Agreement dated as of April 15, 1988, between those parties covering
certain production related to the Production Agreement, certain proceeds of such
production, and certain equipment and fixtures related to the production, all as
described in the Security Agreement.
SCHEDULE 8.3
EXISTING CONTINGENT LIABILITIES
NONE
----
SCHEDULE 8.8
EXISTING INVESTMENTS
DESCRIPTION
-----------
PRIMEX, LTD.- COMMON STOCK (2,500 SHARES)
PRIMEX, LTD.-SERIES "A" PREFERRED (7,957 SHARES)
50% OF S & L CO-GENERATION (A PARTNERSHIP)
INTEREST RATE AGREEMENT
THIS INTEREST RATE AGREEMENT (this "Agreement") is attached as SCHEDULE 1
to the Credit Agreement (as amended, supplemented, restated or replaced from
time to time, the "Credit Agreement"), of even date herewith, by and among
STERLING CHEMICALS, INC. ("Borrower"), a Delaware corporation, certain financial
institutions from time to time a party thereto, The Bank of Nova Scotia, as
Documentation Agent, ABN AMRO Bank N.V., Houston Agency, Bank of Scotland and
Credit Lyonnais, New York Branch, as Co-Agents, and TEXAS COMMERCE BANK NATIONAL
ASSOCIATION (in such capacity "Agent"), a national banking association acting as
agent for such financial institutions.
RECITALS
1. Any capitalized term defined in the Credit Agreement which is used in
this Agreement shall, unless otherwise defined herein, have the meaning ascribed
to it in the Credit Agreement.
2. For convenience, Borrower and Agent desire to gather the provisions of
the Loan Documents relating solely to interest, including the selection of
interest rate options, into a separate agreement.
AGREEMENTS
NOW, THEREFORE, in consideration of the execution and delivery of the
Notes, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. DEFINITIONS
Capitalized words and phrases used in this Agreement have the meanings
provided below. Unless otherwise stated, references to sections are to sections
in this Agreement.
Additional Interest means the aggregate of all amounts accrued or paid
pursuant to the Notes or any of the other Loan Documents (other than interest on
the Notes at the Stated Rate) which, under applicable laws, are or may be deemed
to constitute interest on the indebtedness evidenced by the Notes.
Base Rate means for any day a rate per annum equal to the lesser of (a) the
greater of (1) the Prime Rate for that day and (2) the Federal Funds Rate for
that day plus 1/2 of 1% or (b) the Ceiling Rate. If for any reason Agent shall
have determined (which determination shall be conclusive and binding, absent
manifest error) that it is unable to ascertain the Federal Funds
SCHEDULE 1
to Credit Agreement
Rate for any reason, including, without limitation, the inability or failure of
Agent to obtain sufficient quotations in accordance with the terms hereof, the
Base Rate shall, until the circumstances giving rise to such inability no longer
exist, be the lesser of (a) the Prime Rate or (b) the Ceiling Rate.
Base Rate Borrowing means that portion of the principal balance of the
Loans at any time bearing interest at the Base Rate.
Ceiling Rate means, on any day, the maximum nonusurious rate of interest
permitted for that day by whichever of applicable federal or Texas laws permits
the higher interest rate, stated as a rate per annum. On each day, if any, that
Chapter One establishes the Ceiling Rate, the Ceiling Rate shall be the
"indicated rate ceiling" (as defined in Chapter One) for that day. Agent may
from time to time, as to current and future balances, implement any other
ceiling under Chapter One by notice to Borrower, if and to the extent permitted
by Chapter One. Without notice to Borrower or any other person or entity, the
Ceiling Rate shall automatically fluctuate upward and downward as and in the
amount by which such maximum nonusurious rate of interest permitted by
applicable law fluctuates.
Chapter One means Chapter One of Title 79, Texas Revised Civil Statutes,
1925, as amended.
Eurodollar Business Day means a Business Day on which transactions in
United States dollar deposits between banks may be carried on in whatever
Eurodollar interbank market may be selected by Agent in accordance herewith.
Eurodollar Interbank Rate means, for each Interest Period, the rate of
interest per annum, rounded, if necessary, to the next highest whole multiple of
one-sixteenth percent (1/16%), quoted by Agent at or before 10:00 a.m., Houston,
Texas time (or as soon thereafter as practicable), on the date two Eurodollar
Business Days before the first day of such Interest Period, to be the arithmetic
average of the prevailing rates per annum at the time of determination and in
accordance with the then existing practice in the applicable market, for the
offering to Agent by one or more prime banks selected by Agent in its sole
discretion, in whatever Eurodollar interbank market may be selected by Agent in
its sole discretion, of deposits in Dollars for delivery on the first day of
such Interest Period and having a maturity equal to the length of such Interest
Period and in an amount equal (or as nearly equal as may be) to the Eurodollar
Rate Borrowing to which such Interest Period relates. Each determination by
Agent of the Eurodollar Interbank Rate shall be conclusive and binding, absent
manifest error, and may be computed using any reasonable averaging and
attribution method.
Eurodollar Rate means for any day a rate per annum equal to the lesser of
(a) the sum of (1) the Eurodollar Interbank Rate in effect on the first day of
the Interest Period for the applicable Eurodollar Rate Borrowing plus (2) the
applicable Margin Percentage in effect on the first day of the Interest Period
for the applicable Eurodollar Rate Borrowing and (b) the Ceiling
2
Rate. Each Eurodollar Rate is subject to adjustments for reserves and other
matters as provided for in Section 2.3 hereof.
Eurodollar Rate Borrowing means each portion of the principal balance of
the Loans at any time bearing interest at a Eurodollar Rate.
Eurodollar Reserve Requirement means, on any day, for any Loans of any
Lender bearing interest at the Eurodollar Rate and any Interest Period, the
average maximum rate at which reserves (including any marginal, supplemental or
emergency reserves) are required to be maintained by such Lender during such
Interest Period under Regulation D against "Eurocurrency liabilities" (as such
term is used in Regulation D). Each determination of the Eurodollar Reserve
Requirement by a Lender shall be conclusive and binding, absent manifest error,
and may be computed using any reasonable averaging and attribution method.
Federal Funds Rate means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by Agent from three Federal funds brokers of recognized
standing selected by Agent in its sole and absolute discretion.
Funding Loss means, with respect to (a) Borrower's payment of principal of
a Eurodollar Rate Borrowing on a day before the last day of the applicable
Interest Period; (b) Borrower's failure to borrow a Eurodollar Rate Borrowing on
the date specified by Borrower; (c) Borrower's failure to make any prepayment of
the Loans (other than Base Rate Borrowings) on the date specified by Borrower,
or (d) any cessation of a Eurodollar Rate to apply to the Loans or any part
thereof pursuant to Section 2.3, in each case whether voluntary or involuntary,
any loss, expense, penalty, premium or liability incurred by any Lender
(including but not limited to any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to fund or maintain a Loan).
Interest Options means the Base Rate and each Eurodollar Rate, and
"Interest Option" means either of them.
Interest Payment Dates means (a) for Base Rate Borrowings, July 1, 1995 and
the first day of each October, January, April and July thereafter prior to the
Maturity Date and the Maturity Date; and (b) for Eurodollar Rate Borrowings, the
end of the applicable Interest Period (and if such Interest Period exceeds three
months' duration, quarterly, commencing on the first quarterly anniversary of
the first day of such Interest Period) and the Maturity Date.
3
Interest Period means, for each Eurodollar Rate Borrowing, a period
commencing on the date such Eurodollar Rate Borrowing began and ending on the
numerically corresponding day which is, subject to availability, not less than 1
nor more than 12 months thereafter, as Borrower shall elect in accordance
herewith; provided, (v) any Interest Period with respect to a Eurodollar Rate
Borrowing which would otherwise end on a day which is not a Eurodollar Business
Day shall be extended to the next succeeding Eurodollar Business Day, unless
such Eurodollar Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Eurodollar Business Day; (w) any
Interest Period with respect to a Eurodollar Rate Borrowing which begins on the
last Eurodollar Business Day of a calendar month (or on a day for which there is
no numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Eurodollar Business Day of the
appropriate calendar month; (x) no Interest Period shall ever extend beyond the
Maturity Date; and (y) Interest Periods shall be selected by Borrower in such a
manner that the Interest Period with respect to any portion of the Loans which
shall become due shall not extend beyond such due date.
Margin Percentage means:
(a) On any day prior to the first adjustment after the date hereof
pursuant to clause (b) of this definition, 0.75%;
(b) the Margin Percentage for any day shall be the applicable per annum
percentage set forth at the appropriate intersection in the table
shown below, based on the Debt to EBITDA Ratio as of the last day of
each March, June, September and December (beginning with the fiscal
quarter ending on June 30, 1995) (such increase or decrease to be
effective on the date that Borrower delivers the Quarterly Financial
Statements for the fiscal quarter ending on such date to the Agent
pursuant to the terms of the Credit Agreement):
Eurodollar Rate
Debt to Borrowings Margin
EBITDA Ratio Percentage
------------ ----------
Greater than or equal to 3.50 1.25
Greater than or equal to
2.50 but less than 3.50 1.00
Greater than or equal to
1.50 but less than 2.50 0.75
Less than 1.50 0.65
4
Prime Rate means, on any day, the prime rate for that day as announced from
time to time by TCB and thereafter entered in the minutes of its Loan and
Discount Committee. The Prime Rate is a reference rate and does not necessarily
represent the lowest or best rate or a favored rate, and TCB, Agent and each
Lender disclaims any statement, representation or warranty to the contrary.
TCB, Agent or any Lender may make commercial loans or other loans at rates of
interest at, above or below the Prime Rate.
Rate Designation Date means that Business Day which is (a) in the case of
Base Rate Borrowings, 11:00 a.m., Houston, Texas time, on the date of such
borrowing and (b) in the case of Eurodollar Rate Borrowings, 11:00 a.m.,
Houston, Texas time, on the date three Eurodollar Business Days preceding the
first day of any proposed Interest Period.
Rate Designation Notice means a written notice substantially in the form of
Exhibit A.
Regulation D means Regulation D of the Board of Governors of the Federal
Reserve System from time to time in effect and includes any successor or other
regulation relating to reserve requirements applicable to member banks of the
Federal Reserve System.
Stated Rate means the effective weighted per annum rate of interest
applicable to the Loans. Without notice to Borrower or any other person or
entity, the Stated Rate shall automatically fluctuate upward and downward in
accordance with the provisions of this definition.
Taxes means any tax, levy, impost, duty, charge or fee.
2. INTEREST OPTIONS FOR LOANS
2.1 Options Available. The outstanding principal balance of the Notes
shall bear interest at the Base Rate; provided, that (1) all amounts, both
principal and accrued interest, remaining past due beyond the grace period (if
any) provided in the Credit Agreement shall bear interest at the Past Due Rate,
and (2) subject to the provisions hereof, Borrower shall have the option of
having all or any portion of the principal balances of the Notes from time to
time outstanding bear interest at a Eurodollar Rate. The records of Agent with
respect to Interest Options, Interest Periods and the amounts of Loans to which
they are applicable shall be binding and conclusive, absent manifest error.
Interest on the Loans shall be calculated at the Base Rate except where it is
expressly provided pursuant to this Agreement that a Eurodollar Rate or the Past
Due Rate is to apply. Interest on the amount of each advance against the Notes
shall be computed on the amount of that advance and from the date it is made.
Notwithstanding anything in this Agreement to the contrary, for the full term of
the Notes the interest rate produced by the aggregate of all sums paid or agreed
to be paid to the holders of the Notes for the use, forbearance or detention of
the debt evidenced thereby (including all interest on the Notes at the Stated
Rate plus the Additional Interest) shall not exceed the Ceiling Rate.
5
2.2 Designation and Conversion. Borrower shall have the right to
designate or convert its Interest Options in accordance with the provisions
hereof. Subject to the last sentence of Section 2.1 and the provisions of
Section 2.3, Borrower may elect to have a Eurodollar Rate apply or continue to
apply to all or any portion of the principal balance of the Notes. Each change
in Interest Options shall be a conversion of the rate of interest applicable to
the specified portion of the Loans, but such conversion shall not change the
respective outstanding principal balances of the Notes. The Interest Options
shall be designated or converted in the manner provided below:
(a) Borrower shall give Agent telephonic notice, promptly confirmed by a
Rate Designation Notice. Each such telephonic and written notice
shall specify the amount of the Loan and type (i.e. Revolving Loan or
Term Loan) which is the subject of the designation, if any; the amount
of borrowings into which such borrowings are to be converted or for
which an Interest Option is designated; the proposed date for the
designation or conversion and the Interest Period or Periods, if any,
selected by Borrower. Such telephonic notice shall be irrevocable and
shall be given to Agent no later than the applicable Rate Designation
Date.
(b) No more than six (6) Eurodollar Rate Borrowings shall be in effect at
any time.
(c) Each designation or conversion of a Eurodollar Rate Borrowing shall
occur on a Eurodollar Business Day.
(d) Unless the Borrower makes the payment required by Section 2.3(d)
hereof, no Eurodollar Rate Borrowing shall be converted to a Base Rate
Borrowing on any day other than the last day of the applicable
Interest Period.
(e) Each Eurodollar Rate Borrowing shall be in the amount of at least
$1,000,000.
(f) Each designation of an Interest Option with respect to the Revolving
Notes or the Term Notes shall apply to all of the Revolving Notes or
Term Notes, respectively, ratably in accordance with their respective
outstanding principal balances. If any Lender assigns an interest in
any of its Notes when any Eurodollar Rate Borrowing is outstanding
with respect thereto, then such assignee shall have its ratable
interest in such Eurodollar Rate Borrowing.
2.3 Special Provisions Applicable to Eurodollar Rate Borrowings.
(a) Options Unlawful. If the adoption of any applicable Legal Requirement
or any change in any applicable Legal Requirement or in the interpretation or
administration thereof by any Governmental Authority or compliance by Agent or
any Lender with any request or directive (whether or not having the force of
law) of any central bank or other Governmental
6
Authority shall at any time make it unlawful or impossible for Agent or any
Lender to permit the establishment of or to maintain any Eurodollar Rate
Borrowing, the commitment to establish or maintain such Eurodollar Rate
Borrowing shall forthwith be suspended and Borrower shall forthwith, upon demand
by Agent to Borrower, (1) if required to avoid a violation of any Legal
Requirement, convert the Eurodollar Rate Borrowing with respect to which such
demand was made to a Base Rate Borrowing; (2) pay all accrued and unpaid
interest to date on the amount so converted; and (3) pay any amounts required to
compensate each Lender for any additional cost or expense which each Lender may
incur as a result of such adoption of or change in such Legal Requirement or in
the interpretation or administration thereof and any Funding Loss which each
Lender may incur as a result of such conversion. If, when Agent so notifies
Borrower, Borrower has given a Rate Designation Notice specifying a Eurodollar
Rate Borrowing but the selected Interest Period has not yet begun, such Rate
Designation Notice shall be deemed to be of no force and effect, as if never
made, and the balance of the Loans specified in such Rate Designation Notice
shall bear interest at the Base Rate until a different available Interest Option
shall be designated in accordance herewith.
(b) Increased Cost of Borrowings. If the adoption of any applicable Legal
Requirement or any change in any applicable Legal Requirement or in the
interpretation or administration thereof by any Governmental Authority or
compliance by any Lender with any request or directive (whether or not having
the force of law) of any central bank or Governmental Authority shall at any
time, as a result of any portion of the principal balances of the Notes being
maintained on the basis of a Eurodollar Rate:
(1) subject any Lender (or make it apparent that any Lender is
subject) to any Taxes, or any deduction or withholding for any
Taxes, on or from any payment due under any Eurodollar Rate
Borrowing or other amount due hereunder, other than income and
franchise taxes of the United States and its political
subdivisions; or
(2) change the basis of taxation of payments due from Borrower to any
Lender under any Eurodollar Rate Borrowing (otherwise than by a
change in the rate of taxation of the overall net income of such
Lender); or
(3) impose, modify, increase or deem applicable any reserve
requirement, special deposit requirement or similar requirement
(including, but not limited to, state law requirements and
Regulation D) imposed, modified, increased or deemed applicable
by any Governmental Authority against assets held by any Lender,
or against deposits or accounts in or for the account of any
Lender, or against loans made by any Lender, or against any other
funds, obligations or other property owned or held by any Lender;
or
7
(4) impose on any Lender any other condition regarding any Eurodollar
Rate Borrowing;
and the result of any of the foregoing is to increase the cost to any Lender of
agreeing to make or of making, renewing or maintaining such Eurodollar Rate
Borrowing, or reduce the amount of principal or interest received by any Lender,
then, upon demand by Agent, Borrower shall pay to Agent, from time to time as
specified by Agent, additional amounts which shall compensate each Lender for
such increased cost or reduced amount. The determination by any Lender of the
amount of any such increased cost, increased reserve requirement or reduced
amount shall be conclusive and binding, absent manifest error. Each Lender will
notify the Borrower through the Agent of any event occurring after the date of
this Agreement which will entitle such Lender to compensation pursuant to this
Section as promptly as practicable after it obtains knowledge thereof and
determines to request such compensation, and (if so requested by the Borrower
through the Agent) will designate a different lending office of such Lender for
the applicable Eurodollar Rate Borrowing or will take such other action as the
Borrower may reasonable request if such designation or action is consistent with
the internal policy of such Lender and legal and regulatory restrictions, will
avoid the need for, or reduce the amount of, such compensation and will not, in
the sole opinion of such Lender, be disadvantageous to such Lender (provided
that such Lender shall have no obligation so to designate a different lending
office which is located in the United States of America).
(c) Inadequacy of Pricing and Rate Determination. If for any reason with
respect to any Interest Period, the Agent (or, in the case of clause 3 below,
the applicable Lender) shall have determined (which determination shall be
conclusive and binding upon Borrower) that:
(1) Agent is unable through its customary general practices to
determine any applicable Eurodollar Rate, or
(2) by reason of circumstances affecting the applicable market,
generally, Agent is not being offered deposits in United States
dollars in such market, for the applicable Interest Period and in
an amount equal to the amount of any applicable Eurodollar Rate
Borrowing requested by Borrower, or
(3) any applicable Eurodollar Rate will not adequately and fairly
reflect the cost to any Lender of making and maintaining such
Eurodollar Rate Borrowing hereunder for any proposed Interest
Period,
then Agent shall give Borrower notice thereof and thereupon, (A) any Rate
Designation Notice previously given by Borrower designating the applicable
Eurodollar Rate Borrowing which has not commenced as of the date of such notice
from Agent shall be deemed for all purposes hereof to be of no force and effect,
as if never given, and (B) until Agent shall notify Borrower that the
circumstances giving rise to such notice from Agent no longer exist, each Rate
Designation
8
Notice requesting the applicable Eurodollar Rate shall be deemed a request for a
Base Rate Borrowing, and any applicable Eurodollar Rate Borrowing then
outstanding shall be converted, without any notice to or from Borrower, upon the
termination of the Interest Period then in effect with respect to it, to a Base
Rate Borrowing.
(d) Funding Losses. Borrower shall indemnify each Lender against and hold
each Lender harmless from any Funding Loss. This agreement shall survive the
payment of the Notes. A certificate as to any additional amounts payable
pursuant to this paragraph submitted to Borrower shall be conclusive and binding
upon Borrower, absent manifest error.
3. MISCELLANEOUS
3.1 Funding Offices; Adjustments Automatic; Calculation Year. Any Lender
may, if it so elects, fulfill its obligation as to any Eurodollar Rate Borrowing
by causing a branch or affiliate of such Lender to make such Loan and may
transfer and carry such Loan at, to or for the account of any branch office or
affiliate of such Lender; provided, that in such event for the purposes of this
Agreement such Loan shall be deemed to have been made by such Lender and the
obligation of Borrower to repay such Loan shall nevertheless be to such Lender
and shall be deemed held by it for the account of such branch or affiliate.
Without notice to Borrower or any other person or entity, each rate required to
be calculated or determined under this Agreement shall automatically fluctuate
upward and downward in accordance with the provisions of this Agreement.
Interest at the Prime Rate shall be computed on the basis of the actual number
of days elapsed in a year consisting of 365 or 366 days, as the case may be.
All other interest required to be calculated or determined under this Agreement
shall be computed on the basis of the actual number of days elapsed in a year
consisting of 360 days, unless the Ceiling Rate would thereby be exceeded, in
which event, to the extent necessary to avoid exceeding the Ceiling Rate, the
applicable interest shall be computed on the basis of the actual number of days
elapsed in the applicable calendar year in which accrued.
3.2 Funding Sources. Notwithstanding any provision of this Agreement to
the contrary and each Lender shall be entitled to fund and maintain its funding
of all or any part of the Loans in any manner it sees fit, it being understood,
however, that for the purposes of this Agreement all determinations hereunder
shall be made as if each Lender had actually funded and maintained each
Eurodollar Rate Borrowing during each Interest Period through the purchase of
deposits having a maturity corresponding to such Interest Period and bearing an
interest rate equal to the Eurodollar Rate for such Interest Period.
3.3 Affected Lenders. In the event a Lender ("Affected Lender") shall
have
(i) delivered a notice pursuant to this Agreement claiming that such
Affected Lender is unable to extend Eurodollar Rate Loans to
Borrower for reasons not generally applicable to the other
Lenders, or
9
(ii) shall have requested compensation from Borrower under any of the
provisions hereof to recover increased costs incurred by such
Affected Lender which are not being incurred generally by the
other Lenders,
then, in any such case, Borrower or Agent may make written demand on such
Affected Lender (with a copy to Borrower in the case of a demand by Agent and
with a copy to Agent in the case of a demand by Borrower) for the Affected
Lender to assign, and such Affected Lender shall assign pursuant to one or more
duly executed Assignment and Acceptances within five (5) Business Days after the
date of such demand, to one or more assignees permitted under Section 11.6 of
the Credit Agreement (each, an "Eligible Assignee") which Borrower or Agent, as
the case may be, shall have engaged for such purpose, all of such Affected
Lender's rights and obligations under the Credit Agreement (including, without
limitation, its Revolving Loan Commitments, its Notes and all Loans owing to it,
all Letters of Credit, and its obligation to participate in additional Letters
of Credit thereunder) in accordance with Section 11.6 of the Credit Agreement.
EXECUTED as of the 13th day of April, 1995.
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
By: /s/ Xxxxxxx X. Xxxx
------------------------------------
Xxxxxxx X. Xxxx,
Vice President
10
RATE DESIGNATION NOTICE
Sterling Chemicals, Inc., Texas Commerce Bank National Association, as
Agent, The Bank of Nova Scotia, as Documentation Agent, ABN AMRO Bank N.V.,
Houston Agency, Bank of Scotland and Credit Lyonnais, New York Branch, as Co-
Agents, and certain financial institutions executed and delivered that certain
Credit Agreement (as amended, supplemented and restated, the "Credit Agreement")
dated as of April 13, 1995. Schedule 1 to the Credit Agreement is entitled the
"Interest Rate Agreement". Any term used herein and not otherwise defined
herein shall have the meaning herein ascribed to it in the Interest Rate
Agreement. In accordance with the Interest Rate Agreement, Borrower hereby
notifies Agent of the exercise of an Interest Option.
A. Type of Loan The Loans with respect to which this Rate Designation Notice
is being given are (check one): [____] Term Loans
[____] Revolving Loans
B. Current borrowings
1. Interest Options now in effect: _______________________
2. Amounts: $_____________________
3. Expiration of current Interest Periods, if applicable: _____________
C. Proposed election
1. Total Amount: $______________________
2. Date Interest Option is to be effective: __________________________
3. Interest Option to be applicable (check one):
[ ] Base Rate [ ] Eurodollar Rate
4. Interest Period: ______ months (if available and if applicable)
Borrower represents and warrants that the Interest Option and Interest
Period selected above comply with all provisions of the Interest Rate Agreement.
Date:_________________ STERLING CHEMICALS, INC.,
a Delaware corporation
By:___________________________________
Name:_________________________________
Title:________________________________
EXHIBIT A
