EXHIBIT 10.8
CREDIT AGREEMENT
$40,000,000.00 Revolving Credit Loan
$85,000,000.00 Term Loan A
$45,000,000.00 Term Loan B
$10,000,000.00 ESOP Loan
Among
TPC Finance Corp. and
Texas Petrochemicals Corporation,
As the Company
The Lenders Defined Herein
And
Texas Commerce Bank National Association,
As Agent for the Lenders
And
ABN AMRO North America, Inc.
as agent for ABN AMRO Bank N.V.
And
The Bank of Nova Scotia
As Co-Documentation Agents for the Lenders
July 1, 1996
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS; ACCOUNTING TERMS.............................................. -2-
SECTION 1.01 DEFINITIONS. ...................................... -2-
SECTION 1.02 TYPES OF ADVANCES. ................................-22-
SECTION 1.03 ACCOUNTING TERMS. .................................-22-
ARTICLE II
THE LOANS...................................................................-22-
SECTION 2.01 THE LOANS. ........................................-22-
SECTION 2.02 THE ESOP LOAN. ....................................-24-
SECTION 2.03 THE TERM LOANS. ...................................-25-
SECTION 2.04 NOTICE OF ADVANCE. ................................-25-
SECTION 2.05 THE NOTES. ........................................-26-
SECTION 2.06 DISBURSEMENT OF FUNDS. ............................-27-
SECTION 2.07 CONVERSIONS AND CONTINUANCES. .....................-27-
SECTION 2.08 MANDATORY REPAYMENTS. .............................-28-
SECTION 2.09 VOLUNTARY PREPAYMENTS. ............................-31-
SECTION 2.10 METHOD AND PLACE OF PAYMENT/NET PAYMENTS. .........-32-
SECTION 2.11 PRO RATA ADVANCES/PAYMENTS. .......................-33-
SECTION 2.12 INTEREST. .........................................-33-
SECTION 2.13 INTEREST PERIODS. .................................-35-
SECTION 2.14 INTEREST RATE NOT ASCERTAINABLE. ..................-35-
SECTION 2.15 CHANGE IN LEGALITY. (a) ..........................-36-
SECTION 2.16 INCREASED COSTS, TAXES OR CAPITAL
ADEQUACY REQUIREMENTS. ............................-36-
SECTION 2.17 LIBOR ADVANCE PREPAYMENT AND DEFAULT PENALTIES. ...-38-
SECTION 2.18 TAX FORMS. ........................................-38-
ARTICLE III
LETTERS OF CREDIT...........................................................-39-
SECTION 3.01 LETTERS OF CREDIT. ................................-39-
SECTION 3.02 LETTER OF CREDIT REQUESTS. ........................-39-
SECTION 3.03 LETTER OF CREDIT PARTICIPATIONS. ..................-40-
SECTION 3.04 INCREASED COSTS. ..................................-42-
SECTION 3.05 CONFLICT BETWEEN APPLICATIONS AND AGREEMENT. ......-43-
ARTICLE IV
FEES; COMMITMENTS...........................................................-43-
SECTION 4.01 FEES. .............................................-43-
SECTION 4.02 VOLUNTARY REDUCTION OF TOTAL REVOLVING CREDIT
COMMITMENT. .......................................-44-
SECTION 4.03 MANDATORY REDUCTION OF TOTAL REVOLVING CREDIT
COMMITMENT. .......................................-44-
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ARTICLE V
CONDITIONS PRECEDENT........................................................-44-
SECTION 5.01 CONDITIONS PRECEDENT TO THE INITIAL ADVANCE. .......-44-
SECTION 5.02 CONDITIONS PRECEDENT TO ALL CREDIT EVENTS. ........-48-
SECTION 5.03 DELIVERY OF DOCUMENTS. ............................-48-
ARTICLE VI
REPRESENTATIONS AND WARRANTIES..............................................-49-
SECTION 6.01 ORGANIZATION AND QUALIFICATION. ...................-49-
SECTION 6.02 AUTHORIZATION AND VALIDITY. .......................-49-
SECTION 6.03 GOVERNMENTAL CONSENTS. ............................-49-
SECTION 6.04 CONFLICTING OR ADVERSE AGREEMENTS OR RESTRICTIONS. -49-
SECTION 6.05 TITLE TO ASSETS; LICENSES AND PERMITS. ............-50-
SECTION 6.06 LITIGATION. .......................................-50-
SECTION 6.07 FINANCIAL STATEMENTS. .............................-50-
SECTION 6.08 NO DEFAULTS. ......................................-51-
SECTION 6.09 INVESTMENT COMPANY ACT. ...........................-51-
SECTION 6.10 UTILITY REGULATION. ................................-51-
SECTION 6.11 ERISA. ............................................-51-
SECTION 6.12 ENVIRONMENTAL MATTERS. ............................-52-
SECTION 6.13 PURPOSE OF LOANS. .................................-53-
SECTION 6.14 SUBSIDIARIES. .....................................-53-
SECTION 6.15 SOLVENCY. .........................................-53-
SECTION 6.16 ACCURACY OF INFORMATION. ..........................-53-
SECTION 6.17 INSURANCE. ........................................-54-
SECTION 6.18 INDEBTEDNESS AND CONTINGENT LIABILITIES. ..........-54-
SECTION 6.19 COMPLIANCE WITH LAWS. .............................-54-
SECTION 6.20 SECURITY INTERESTS. ...............................-54-
SECTION 6.21 MATERIAL CONTRACTS. ...............................-55-
ARTICLE VII
AFFIRMATIVE COVENANTS.......................................................-55-
SECTION 7.01 INFORMATION COVENANTS. ............................-55-
SECTION 7.02 BOOKS, RECORDS AND INSPECTIONS. ...................-57-
SECTION 7.03 INSURANCE AND MAINTENANCE OF PROPERTIES. ..........-58-
SECTION 7.04 PAYMENT OF TAXES. .................................-59-
SECTION 7.05 CORPORATE EXISTENCE. ..............................-59-
SECTION 7.06 COMPLIANCE WITH STATUTES. ..........................-59-
SECTION 7.07 ERISA. .............................................-59-
SECTION 7.08 UTILITY REGULATION. ...............................-60-
SECTION 7.09 SUBSIDIARIES. .....................................-60-
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ARTICLE VIII
NEGATIVE COVENANTS..........................................................-60-
SECTION 8.01 CHANGE IN BUSINESS. ...............................-60-
SECTION 8.02 CONSOLIDATION, MERGER OR SALE OF ASSETS. ..........-60-
SECTION 8.03 INDEBTEDNESS. .....................................-61-
SECTION 8.04 LIENS. ............................................-62-
SECTION 8.05 INVESTMENTS. ......................................-63-
SECTION 8.06 GUARANTIES. .......................................-63-
SECTION 8.07 RESTRICTED PAYMENTS. ..............................-64-
SECTION 8.08 CHANGE IN ACCOUNTING. .............................-64-
SECTION 8.09 PREPAYMENT OF OTHER INDEBTEDNESS. .................-65-
SECTION 8.10 TRANSACTIONS WITH AFFILIATES. ......................-65-
SECTION 8.11 SUBSIDIARIES' STOCK. ..............................-65-
SECTION 8.12 MATERIAL CONTRACTS..................................-65-
SECTION 8.13 FINANCIAL RATIOS. .................................-65-
SECTION 8.14 CAPITAL EXPENDITURES. .............................-66-
SECTION 8.15 FISCAL YEAR. ......................................-67-
SECTION 8.16 SALE/LEASEBACK TRANSACTIONS. ......................-67-
ARTICLE IX
EVENTS OF DEFAULT AND REMEDIES..............................................-67-
SECTION 9.01 EVENTS OF DEFAULT. ................................-67-
SECTION 9.02 PRIMARY REMEDIES. .................................-70-
SECTION 9.03 OTHER REMEDIES. ...................................-70-
ARTICLE X
THE AGENT...................................................................-70-
SECTION 10.01 AUTHORIZATION AND ACTION. ........................-70-
SECTION 10.02 AGENT'S RELIANCE. ................................-71-
SECTION 10.03 AGENT AND AFFILIATES; TCB AND AFFILIATES. ........-72-
SECTION 10.04 LENDER CREDIT DECISION. ..........................-72-
SECTION 10.05 AGENT'S INDEMNITY. ...............................-72-
SECTION 10.06 SUCCESSOR AGENT. .................................-73-
SECTION 10.07 NOTICE OF DEFAULT. ...............................-74-
ARTICLE XI
MISCELLANEOUS...............................................................-74-
SECTION 11.01 AMENDMENTS. ......................................-74-
SECTION 11.02 NOTICES. .........................................-74-
SECTION 11.03 NO WAIVER; REMEDIES. .............................-76-
SECTION 11.04 COSTS, EXPENSES AND TAXES. .......................-76-
SECTION 11.05 INDEMNITY. .......................................-76-
SECTION 11.06 RIGHT OF SETOFF. .................................-77-
SECTION 11.07 GOVERNING LAW. ...................................-78-
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SECTION 11.08 INTEREST. ........................................-78-
SECTION 11.09 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. ......-79-
SECTION 11.10 SUCCESSORS AND ASSIGNS; PARTICIPATIONS. ..........-80-
SECTION 11.11 CONFIDENTIALITY. .................................-82-
SECTION 11.12 PRO RATA TREATMENT. ..............................-82-
SECTION 11.13 SEPARABILITY. ....................................-83-
SECTION 11.14 EXECUTION IN COUNTERPARTS. .......................-83-
SECTION 11.15 INTERPRETATION. ..................................-83-
SECTION 11.16 LIMITATION BY LAW. ...............................-84-
SECTION 11.17 SUBMISSION TO JURISDICTION. ......................-84-
SECTION 11.18 WAIVER OF JURY TRIAL. ............................-85-
SECTION 11.19 FINAL AGREEMENT OF THE PARTIES. ..................-85-
SECTION 11.20 COMPANY ASSUMPTION OF OBLIGATIONS OF FINANCE
CORP. .............................................-85-
SECTION 11.21 EFFECTIVENESS OF AGREEMENTS EXECUTED BY THE
COMPANY. .........................................-86-
EXHIBITS AND SCHEDULES:
Exhibit 1.01A Form of Administrative Questionnaire
Exhibit 1.01B Form of Borrowing Base Certificate
Exhibit 1.01C Account Debtor Receivables Concentration
Exhibit 2.04 Form of Notice of Advance
Exhibit 2.05A Form of Revolving Credit Note
Exhibit 2.05B Form of Term Note A
Exhibit 2.05C Form of Term Note B
Exhibit 2.05D Form of ESOP Note
Exhibit 2.05E Form of Swing Line Note
Exhibit 3.02 Form of Letter of Credit Request
Exhibit 11.10 Form of Assignment and Acceptance
Schedule 1.01 Other Assets
Schedule 6.04 Conflicting or Adverse Agreements or Restrictions
Schedule 6.05 Schedule of Real Property
Schedule 6.06 Existing Litigation
Schedule 6.12 Environmental Matters
Schedule 6.14 Subsidiaries
Schedule 7.03 Existing Insurance
Schedule 8.04(a) Existing Liens
Schedule 8.05(b) Existing Investments
Schedule 8.06(c) Guaranties of Indebtedness
Schedule 8.12 Material Contracts
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CREDIT AGREEMENT
This CREDIT AGREEMENT dated as of July 1, 1996 (this "AGREEMENT")
is entered into by and among TPC Finance Corp., a Texas corporation ("FINANCE
CORP."), to be merged on the Effective Date (as defined below) into Texas
Petrochemicals Corporation, a Texas corporation (such corporation prior to the
merger, "TPC"), the banks and other financial institutions listed on the
signature pages hereto under the caption "LENDER" (together with each other
person who becomes a Lender, collectively the "LENDERS") and Texas Commerce Bank
National Association, individually as a Lender ("TCB") and as agent for the
other Lenders (in such capacity, together with any other Person who becomes the
agent, the "AGENT") and ABN AMRO North America, Inc. as agent for ABN AMRO Bank
N.V., and The Bank of Nova Scotia, each individually as a Lender and together as
co-documentation agents for the other Lenders (in such capacity, together with
any other Person who becomes a co-documentation agent, the "CO-DOCUMENTATION
AGENTS").
Finance Corp. has requested that the Lenders provide the Company
with a credit facility pursuant to which the Lenders will commit to make (a)
revolving credit loans of up to $40,000,000.00 including a swing line facility
not to exceed $5,000,000.00 and a letter of credit facility not to exceed
$7,500,000.00, (b) a term loan of $85,000,000.00, (c) a second term loan of
$45,000,000.00 and (d) a third term loan of up to $10,000,000.00. The proceeds
of the $85,000,000.00 term loan and the $45,000,000.00 term loan and
approximately $500,000.00 of the revolving credit loans shall be loaned by
Finance Corp. to TPC Holding Corp., a Delaware corporation ("PARENT"), to be
used by the Parent solely to finance the purchase of the capital stock of Texas
Olefins Company ("TOC") and its subsidiary, TPC, pursuant to the Purchase
Agreement (as hereafter defined) and to pay certain transaction expenses
incurred in connection with such purchase. The proceeds of the $10,000,000.00
term loan shall be used to fund Finance Corp.'s loan to its employee stock
ownership plan (the "ESOP") to enable the ESOP to purchase shares of common
stock of Texas Petrochemical Holdings, Inc., a Delaware corporation ("HOLDING
CO."). After the merger of TOC into and with TPC and the merger of Finance Corp.
into and with TPC (collectively the "MERGER"), the proceeds of the
$40,000,000.00 revolving credit loans shall be used for general corporate
purposes and for the issuance of letters of credit. In connection therewith, the
Agent has agreed to serve as Agent for the Lenders and the Co-Documentation
Agents have agreed to serve as Co-Documentation Agents for the Lenders.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants set forth herein, the Company (as defined below), the Agent, the
Co-Documentation Agents and the Lenders agree as follows:
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ARTICLE I
DEFINITIONS; ACCOUNTING TERMS
SECTION 1.01 DEFINITIONS. As used in this Agreement, the
following terms shall have the following meanings:
"ACQUISITION" has the meaning specified in SECTION 6.13.
"ADMINISTRATIVE QUESTIONNAIRE" means an Administrative
Questionnaire in the form of EXHIBIT 1.01A, completed by each Lender and
provided to the Agent and the Company.
"ADVANCE" means, (a) in respect of any Revolving Credit Loan, an
advance pursuant to a Notice of Advance, (b) in respect of any Swing Line Loan,
an advance made by the Swing Line Lender and (c) in respect of each of the Term
Loan A, the Term Loan B and the ESOP Loan, a single advance made on the
Effective Date, in each case comprised of a single Type of Loan made by all the
Lenders concurrently (except as to any Advance made under the Swing Line Loan)
to the Company (or resulting from a conversion or continuance of all or any
portion (subject to minimums herein specified) having, in the case of LIBOR Rate
Advances, the same Interest Period (except as otherwise provided in this
Agreement)).
"ADVANCE DATE" means, with respect to each Advance, the Business
Day upon which the proceeds of such Advance are to be made available to the
Company.
"AFFILIATE" means 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 either (a) vote 10% or more
of the securities having ordinary voting power for election of directors of such
Person or (b) 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.
"AGENT" has the meaning specified in the introduction to this
Agreement.
"AGENT'S LETTER" means that certain letter to The Sterling Group,
Inc. dated June 3, 1996 from TCB and Chase Securities Inc. and acknowledged by
The Sterling Group, Inc.
"AGREEMENT" has the meaning specified in the introduction to this
Agreement.
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"ALTERNATE BASE RATE" means, for any day, a rate per annum
(rounded upwards to the nearest 1/100 of 1%) equal to the greater of (a) the
Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1% per annum. If, for any reason, the Agent shall
have determined (which determination shall be conclusive absent manifest error)
that it is unable to ascertain the Federal Funds Effective Rate, including the
inability or failure of the Agent to obtain sufficient quotations in accordance
with the terms hereof, the Alternate Base Rate shall be determined without
regard to clause (b) of the first sentence of this definition until the
circumstances giving rise to such inability no longer exist. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective on the effective date of such change in the
Prime Rate or the Federal Funds Effective Rate, respectively.
"ALTERNATE BASE RATE ADVANCE" means any Advance bearing interest
at a rate determined by reference to the Alternate Base Rate in accordance with
the provisions of ARTICLE II.
"APPLICABLE LENDING OFFICE" means, with respect to each Lender,
such Lender's Domestic Lending Office in the case of an Alternate Base Rate
Advance and such Lender's LIBOR Lending Office in the case of a LIBOR Rate
Advance.
"APPLICATION FOR LETTER OF CREDIT" means a letter of credit
application in a form satisfactory to the Issuing Bank.
"ASSIGNMENT AND ACCEPTANCE" has the meaning specified in SECTION
11.10(C).
"BANKRUPTCY CODE" has the meaning specified in SECTION 9.01(F).
"BOARD" means the Board of Governors of the Federal Reserve
System of the United States (or any successor) and any other banking authority
to which the Lenders are subject for Eurocurrency Liabilities or any other
category of deposits or liabilities by reference to which the LIBOR Rate is
determined.
"BORROWING BASE" means, as to the Company and its Subsidiaries on
a consolidated basis at any time, an amount equal to the sum of (a) 85% of
Eligible Accounts PLUS (b) 65% of Eligible Inventory; PROVIDED that at no time
shall more than 50% of the Borrowing Base be comprised of 65% of Eligible
Inventory.
"BORROWING BASE CERTIFICATE" means, as of any date, a certificate
as to the Borrowing Base as of such date in the form of EXHIBIT 1.01B.
"BUSINESS DAY" means any day (other than a day which is a
Saturday, Sunday or legal holiday in the State of Texas) on which banks are open
for business in Houston, Texas and New York
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and, if the applicable Business Day relates to any LIBOR Rate Advance, on which
dealings are carried on in the London eurodollar market.
"CAPITAL EXPENDITURES" means all of the capital expenditures of
the Company and its Subsidiaries on a consolidated basis which, pursuant to
GAAP, are capitalized for balance sheet purposes.
"CAPITALIZED LEASE OBLIGATIONS" means all lease or rental
obligations of the Company and its Subsidiaries determined on a consolidated
basis which, pursuant to GAAP, are capitalized for balance sheet purposes.
"CHANGE OF CONTROL" occurs when any Unrelated Person or any
Unrelated Persons, other than the Designated Shareholders, 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 35% of the aggregate voting power of all classes of
Voting Stock of the Company or Holding Co. or (ii) succeed in having sufficient
of its or their nominees elected to the Board of Directors of Holding Co. such
that such nominees, when added to any existing director remaining on the Board
of Directors of the Company or Holding Co. 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 Company or Holding Co.; PROVIDED, however, no
Change of Control shall have occurred so long as the Designated Shareholders (or
any combination thereof) shall retain more than 50% of the aggregate voting
power of all classes of Voting Stock of the Company and Holding Co. As used
herein (a) "BENEFICIALLY OWN" shall mean "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" shall mean a "group" for purposes of Section 13(d) of the
Securities Exchange Act of 1934, as amended; (c) "UNRELATED PERSON" shall mean
at any time any Person other than the Company and Holding Co. or any of their
reported Subsidiaries and other than any trust for any employee benefit plan of
the Company and Holding Co. or any of their reported 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) "DESIGNATED SHAREHOLDERS" means (1) each Person who owns
any capital stock of Holding Co. on the Effective Date or any common stock in
connection with any registration of shares of common stock by Holding Co. for
sale to certain employees of Holding Co. and its Subsidiaries following the
Merger, (2) any Person who on the Effective Date is or was before such date an
officer, director, stockholder, employee or consultant of The Sterling Group,
Inc., (3) the ESOP, (4) any savings or investment plan sponsored by the Company,
(5) with respect to any Person covered by the preceding clauses (1) through (4)
(A) in the case of an entity, any Affiliate of such Person, and (B) in the case
of an individual, any spouse, parent, sibling, child or grandchild (in each
case, whether
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such relationship arises from birth, adoption or through marriage), or (f) any
trust, limited liability company, corporation, limited or general partnership or
other entity, a majority of interest of the beneficiaries, stockholders,
partners or owners (direct or beneficial) of which are Persons of the type
referred to in the preceding clauses (a) through (e).
"CO-DOCUMENTATION AGENTS" has the meaning specified in the
introduction to this Agreement.
"CODE" means the Internal Revenue Code of 1986 and the
regulations promulgated thereunder.
"COMMITMENT" means the obligation of each of the Lenders to enter
into and perform this Agreement, to make available the Loans and to issue the
Letters of Credit to the Company in the amounts shown on the signature page of
each Lender hereto (or, as to any Lender that has entered into an Assignment and
Acceptance, in the amount resulting after giving effect to each Assignment and
Acceptance entered into by such Lender) and all other duties and obligations of
the Lenders hereunder.
"COMPANY" means (a) before the Merger, Finance Corp. and (b) upon
and after the Merger, Texas Petrochemicals Corporation, a Texas corporation.
"CREDIT EVENT" means the making of any Advance, the conversion of
any Advance into, or continuation of any Advance as, a LIBOR Rate Advance or the
issuance of any Letter of Credit.
"CURRENT ASSETS" and "CURRENT LIABILITIES" means, as to the
Company and its Subsidiaries determined on a consolidated basis, at any time the
aggregate current assets or current liabilities of the Company and its
Subsidiaries, each as determined in accordance with GAAP; excluding, however,
(a) cash and marketable securities, (b) the current portion of long term
Indebtedness, (c) during the 12-month period preceding the Revolving Credit
Maturity Date, the outstanding principal amount of the Revolving Credit Loans,
and (d) amounts payable as Employee Bonuses.
"DEFAULT" means the occurrence of any event which with the giving
of notice or the passage of time or both would be an Event of Default.
"DEFAULT RATE" means the lesser of (a) the Highest Lawful Rate
and (b) the Alternate Base Rate or, during any Eurodollar Rate Interest Period
in which an Event of Default is continuing, the Eurodollar Rate, as the case may
be, PLUS, the applicable Margin PLUS, two percent (2%) per annum.
-5-
"DERIVATIVES" means, with respect to any Person, foreign exchange
transactions and commodity, currency and interest rate swaps, floors, caps,
collars, forward sales, options and other similar transactions or combinations
of the foregoing.
"DESIGNATED PAYMENT DATE" means September 30, December 31, March
31 and June 30, in any calendar year, PROVIDED, HOWEVER, if in any such year a
Designated Payment Date shall be a day which is not a Business Day, such
Designated Payment Date shall be the next succeeding Business Day, and such
extension of time shall be included in determining the amount to be paid on such
date.
"DISCOUNT DEBENTURES" means the unsecured senior Indebtedness of
Holding Co. evidenced by 13 1/2% Senior Discount Notes of Holding Co. due 2007
used to raise $30,000,000.00 of proceeds and any Series B Senior Discount Notes
due 2007 issued in exchange for such Senior Discount Notes.
"DOMESTIC LENDING OFFICE" means, with respect to any Lender, the
office of such Lender designated from time to time as its "Domestic Lending
Office" hereunder.
"EBITDA" means, with respect to the Company and its Subsidiaries
determined on a consolidated basis for the four fiscal quarters (but prior to
June 30, 1997, annualized for the actual number of full fiscal quarters since
the Effective Date) immediately preceding the most recent Financial Statement
Delivery Date, without duplication, the result of net income less any non-cash
income to the extent included in determining net income and without giving
effect to any non-recurring items, extraordinary gains or losses from the sale
of assets or write down in the value of assets owned by the Company and its
Subsidiaries for such period PLUS depreciation, amortization, Interest Expense,
taxes, and other non-cash charges for such period to the extent deducted in
determining net income.
"EFFECTIVE DATE" means the date on which all conditions to make
an Advance set forth in SECTION 5.01 are first met or waived in accordance with
SECTION 11.01 hereof.
"ELIGIBLE ACCOUNTS" means, as to the Company and its wholly-owned
Subsidiaries on a consolidated basis at any time of determination, all
Receivables of such Persons, each of which meets all of the following criteria
on the date of any determination:
(a) the payment of such Receivable is not more than sixty (60)
days past due;
(b) such Receivable was created in connection with the sale of
Inventory or the performance of a service by the Company or any wholly-owned
Subsidiary of the Company in the ordinary course of business;
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(c) such Receivable represents a legal, valid and binding payment
obligation of the account debtor enforceable in accordance with its terms and
arises from an enforceable contract, the performance of which, insofar as it
relates to such Receivable, has been completed by the Company or such
wholly-owned Subsidiary;
(d) the Company or such wholly-owned Subsidiary has good and
indefeasible title to such Receivable, and the Agent for the benefit of the
Lenders, holds a perfected first priority Lien (including compliance with the
Federal Assignment of Claims Act or any similar statute or regulation, if
necessary) in such Receivable pursuant to the Security Documents;
(e) such Receivable is not evidenced by a promissory note,
chattel paper or other instrument;
(f) such Receivable is not subject to any set-off (excluding any
Receivable set-off supported by a letter of credit satisfactory to the Agent),
counterclaim, defense, allowance, adjustment or understanding with the account
debtor thereon that in any way could reasonably be expected to adversely affect
the payment of said Receivable, and there exists no dispute by the account
debtor concerning its payment obligation for such Receivable (or the lesser
amount that is not subject to any of the same);
(g) such Receivable is payable in the United States and is
denominated in U.S. dollars;
(h) such Receivable or portion thereof due from an account debtor
(other than an account debtor listed in EXHIBIT 1.01C hereto) and together with
all other Receivables due from such account debtor, does not comprise more than
ten percent (10%) of the aggregate Receivables of the Company and its
wholly-owned, provided, that in the event such account debtor is rated at least
BBB+ or the equivalent thereof by Standard & Poor's Ratings Group then such
Receivable together with all other Receivables due from such account debtor does
not compromise more then twenty-five (25%) of the aggregate Receivables of the
Company and its wholly-owned Subsidiaries;
(i) such Receivable is from an account debtor domiciled in the
United States or is backed by a letter of credit issued or confirmed by a
commercial bank rated A1 or the equivalent thereof by Standard & Poor's Ratings
Group or P1 or the equivalent thereof by Moody's Investors Service, Inc. and
such letter of credit contains terms and conditions reasonably acceptable to the
Agent;
(j) such Receivable is not due from an account debtor subject to
a proceeding of the kind described in SECTION 9.01(F) or (G); and
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(k) such Receivable is not due from an account debtor which the
Agent has notified the Company does not have a satisfactory credit standing (as
determined on a reasonable basis by the Agent).
"ELIGIBLE ASSIGNEE" means (a) any Lender or any Affiliate thereof
and (b) any other bank or financial institution approved by the Agent, the Swing
Line Lender and the Company.
"ELIGIBLE INVENTORY" means, as to the Company and its
wholly-owned Subsidiaries on a consolidated basis at any time of determination,
the value (determined at the lower of cost or market) of all Inventory owned by
(and in the possession or under the control of) the Company and its wholly-owned
Subsidiaries which is located in the United States and in which the Agent for
the benefit of the Lenders has a perfected first priority security interest
other than Permitted Liens under SECTION 8.04(B), (C), and (E) pursuant to the
Security Documents but shall not include any of the following:
(a) Inventory that has been shipped or delivered to any Person on
consignment;
(b) Inventory that is subject to any claim disputing the
Company's or any wholly-owned Subsidiary's title to or right to possession of
such Inventory;
(c) any allowances, reserves or accruals related to any
Inventory, or Inventory that is not in good condition or does not comply with
any governmental requirement with respect to its manufacture, use or sale;
(d) Inventory evidenced by a negotiable or non-negotiable
document of title; and
(e) Inventory that is not saleable.
"EMPLOYEE BONUSES" means amounts paid or to be paid under the
"TPC Cash Bonus Plan" as defined in the Purchase Agreement.
"EMPLOYEE PLAN" means any employee benefit plan, program or
policy with respect to which the Company or any ERISA Affiliate may have any
liability or any obligation to contribute, other than a Plan or a Multiemployer
Plan.
"ENVIRONMENTAL ASSESSMENT" means the Phase I environmental site
assessment conducted in accordance with ASTM E 1527-94 (dated April 18, 1996)
and the data base summary (dated May 28, 1996) conducted by Pilko & Associates.
"ENVIRONMENTAL LAWS" means applicable federal, state or local
laws, rules or regulations, and any applicable judicial interpretations thereof,
including any judicial or administrative
-8-
order, judgment, permit, approval, decision or determination, in each case
pertaining to conservation or protection of the environment, in effect at the
time in question, including the Clean Air Act, the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"), the Federal Water Pollution
Control Act, the Occupational Safety and Health Act, the Resource Conservation
and Recovery Act, the Safe Drinking Water Act, the Toxic Substances Control Act,
the Superfund Amendments and Reauthorization Act of 1986, the Hazardous
Materials Transportation Act and analogous state and local laws as may be
amended from time to time thereby imposing either more or less stringent
requirements as relates to activity occurring after the effective date of any
such amendments.
"ERISA" means the Employee Retirement Income Security Act of 1974
and the regulations promulgated thereunder.
"ERISA AFFILIATE" means (a) any Person which, together with the
Company, is treated as a "single employer" under Section 414 of the Code and the
regulations thereunder, and (b) any Subsidiary of the Company.
"ESOP" has the meaning specified in the introduction to this
Agreement.
"ESOP LENDER" means any Lender having an ESOP Loan Commitment.
"ESOP LOAN" has the meaning specified in SECTION 2.02.
"ESOP LOAN COMMITMENT" means, with respect to the ESOP Loan and
as to any Lender, the amount set forth opposite such Lender's name on the
signature pages hereof aggregating $10,000,000.00.
"ESOP LOAN MATURITY DATE" means June 30, 2001, unless accelerated
pursuant to SECTION 9.02.
"ESOP NOTE" has the meaning specified in SECTION 2.05(D).
"EUROCURRENCY LIABILITIES" has the meaning specified in
Regulation D as in effect from time to time.
"EVENTS OF DEFAULT" has the meaning specified in SECTION 9.01.
"EXCEPTIONS LETTER" means that certain letter to the Agent and
the Lenders from the Company dated as of the Effective Date regarding
satisfaction of certain requirements concerning real property pledged as
collateral for the Loans.
-9-
"EXCESS CASH FLOW" means, with respect to the Company and its
Subsidiaries determined on a consolidated basis for any fiscal year period, (a)
EBITDA for such period, MINUS (b) the amount equal to (i) actual Capital
Expenditures (exclusive of Capitalized Lease Obligations) incurred during such
period PLUS (ii) the amount of Capital Expenditures for such period permitted to
be made in the next succeeding fiscal year under SECTION 8.14(C) MINUS (iii) the
amount of Capital Expenditures carried forward from the prior fiscal year under
SECTION 8.14(C) for such period, MINUS (c) cash taxes, cash Interest Expense and
scheduled payments or any voluntary prepayment of principal made under Term Loan
A and Term Loan B and the ESOP Loan (but only to the extent that net income for
such period was not reduced for any expense incurred by the Company for
contributions to the ESOP) MINUS (d) any dividend or payment permitted under
SECTION 8.07(A)(II) and (v) MINUS (e) the principal amount of Employee Bonuses
actually paid during such period and MINUS (f) scheduled principal payments
under Capitalized Lease Obligations made during such period.
"EXCESS SALES PROCEEDS" means the aggregate cash proceeds
received by the Company and its Subsidiaries determined on a consolidated basis
from the sale of all or any part of the Other Assets, net of usual and customary
fees, expenses and commissions actually incurred.
"EXECUTION DATE" means the date upon which this Agreement shall
have been executed by the Company, the Lenders, the Agent and the
Co-Documentation Agents.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, 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 the Agent from three federal funds brokers of
recognized standing selected by it.
"FEES" means all amounts payable pursuant to SECTION 4.01.
"FINANCE CORP." has the meaning specified in the introduction to
this Agreement.
"FINANCIALS" has the meaning specified in SECTION 6.07.
"FINANCIAL STATEMENT DELIVERY DATE" means the last day on which
the quarterly or annual financial statements of the Company are to be delivered
to the Agent and the Lenders pursuant to SECTION 7.01(A) or SECTION 7.01(B), as
the case may be.
"FIXED CHARGE COVERAGE RATIO" means, as to the Company and its
Subsidiaries determined on a consolidated basis, for any period a fraction, the
numerator of which is EBITDA for such period MINUS cash taxes for such period,
and the denominator of which is the sum of (a)
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scheduled payments of principal under Term Loan A and Term Loan B and the ESOP
Loan (but only to the extent that net income for such period was not reduced for
any expense incurred by the Company for contributions to the ESOP), (b) cash
Interest Expense for such period, (c) the lesser of (i) Scheduled Capital
Expenditures for such period and (ii) actual Capital Expenditures for such
period, (d) scheduled principal payments under Capitalized Lease Obligations,
(e) actual Employee Bonuses paid during such period, and (f) payments permitted
under SECTION 8.07(A)(II), (III) and (V) and SECTION 8.07(B)(II).
"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States applied on a consistent basis.
"GUARANTY" means collectively (i) that certain Guaranty Agreement
dated the Execution Date executed by the Parent and Holding Co. (ii) that
certain Guaranty Agreement dated the Execution Date executed by Texas Butylene
Chemical Corporation and (iii) any subsequent guaranty agreement executed and
delivered pursuant to SECTION 7.09.
"HAZARDOUS MATERIALS" means (a) hazardous waste as defined in
applicable regulations issued pursuant to the Resource Conservation and Recovery
Act of 1976, or in any applicable federal, state or local law or regulation, (b)
hazardous substances, as defined in CERCLA, or in any applicable state or local
law or regulation, (c) gasoline or any other petroleum product, (d) toxic
substances, as defined in the Toxic Substances Control Act of 1976, or in any
applicable federal, state or local law or regulation, (e) insecticides,
fungicides, or rodenticides, as defined in the Federal Insecticide, Fungicide,
and Rodenticide Act of 1975, or in any applicable federal, state or local law or
regulation, as each such act, statute or regulation may be amended from time to
time, and (f) asbestos.
"HIGHEST LAWFUL RATE" means, as to any Lender, the maximum
nonusurious rate of interest that, under applicable law, may be contracted for,
taken, reserved, charged or received by such Lender on the Loans or other
obligations under the Loan Documents at any time or from time to time after
taking into account all amounts that constitute interest. If the maximum rate of
interest which, under applicable law, any of the Lenders are permitted to charge
the Company on the Loans or other obligations shall change after the date
hereof, to the extent permitted by applicable law, the Highest Lawful Rate shall
be automatically increased or decreased, as the case may be, as of the effective
time of such change without notice to the Company or any other Person.
"HOLDING CO." has the meaning specified in the introduction to
this Agreement.
"INDEBTEDNESS" means, with respect to any Person, (a) all
indebtedness of such Person for borrowed money (whether by loan or the issuance
and sale of debt securities) or for the deferred purchase price of property or
services (other than accounts payable), (b) all indebtedness of such Person
created or arising under any conditional sale or other title retention agreement
with
-11-
respect to any property, (c) Capitalized Lease Obligations of such Person, (d)
all guaranties of such Person of indebtedness of others (including the granting
of a Lien on the Company's or any Subsidiaries' assets or security for such
indebtedness) or other contingent liabilities of such Person for indebtedness of
others of any kind (including any letter of credit, any other letter of credit
reimbursement obligations, any guarantee of the financial position or covenants
of any Person or any obligation as buyer under any "take or pay" contract or
similar arrangement), (e) any "mark to market" exposure resulting from any
Derivatives or any hedging transaction and (f) all obligations to deliver goods
or services in consideration of advance payments, excluding such obligations
incurred in the ordinary course of business as conducted by the Company and its
Subsidiaries.
"INTEREST EXPENSE" means, with respect to the Company and its
Subsidiaries determined on a consolidated basis, for any period the total
interest expense for such period determined in conformity with GAAP and
including any interest expense attributable to Capitalized Lease Obligations.
"INTEREST PERIOD" has the meaning specified in SECTION 2.13.
"INVENTORY" means, as to the Company and its Subsidiaries,
inventory as defined in Article 9 of the Uniform Commercial Code (but excluding
work-in-process which is not readily marketable in its current form).
"INVESTMENT" means, as applied to any Person, any direct or
indirect purchase or other acquisition by such Person of the stock or other
securities of any other Person, or any direct or indirect loan, advance or
capital contribution by such Person to any other Person, and any other item
which would be classified as an "investment" on a balance sheet of such Person
prepared in accordance with GAAP, including any direct or indirect contribution
by such Person of property or assets to a joint venture, partnership or other
business entity in which such Person retains an interest.
"ISSUING BANK" means, for each Letter of Credit, TCB (or, at the
option of the Company, any other Lender designated by the Company and approved
in writing by the Agent, such approval not to be unreasonably withheld) as the
issuing bank for such Letter of Credit.
"LENDER" has the meaning provided in the introduction to this
Agreement.
"LETTER OF CREDIT FEE" shall mean (a) for any Letter of Credit
outstanding prior to the Financial Statement Delivery Date for the fiscal
quarter ending December 31, 1996, 0.125% per annum fronting fee payable to the
Issuing Bank on the undrawn face amount of each Letter of Credit, and payable
pro rata to each Lender the greater of (i) 2.00% per annum on the face amount of
such Letter of Credit and (ii) $500.00; and
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(b) for any Letter of Credit outstanding during any Margin Period
commencing after the Financial Statement Delivery Date for any fiscal quarter
ending on and after December 31, 1996, 0.125% per annum fronting fee payable to
the Issuing Bank on the face amount of each Letter of Credit, and payable pro
rata to each Lender a fee per annum equal to the greater of (i) the applicable
Margin for any LIBOR Rate Advance and (ii) $500.00.
"LETTER OF CREDIT OBLIGATIONS" means at any time the sum of (a)
the aggregate then undrawn and unexpired amount of outstanding Letters of Credit
and (b) the aggregate amount of drawings under Letters of Credit not reimbursed
pursuant to SECTION 3.03(C).
"LETTER OF CREDIT REQUEST" has the meaning specified in SECTION
3.02(A).
"LETTERS OF CREDIT" has the meaning specified in SECTION 3.01(A).
"LIBOR LENDING OFFICE" means, with respect to each Lender, the
branches or affiliates of such Lender designated as its "LIBOR Lending Office"
from time to time hereunder.
"LIBOR RATE" means, with respect to any LIBOR Rate Advance for
any Interest Period, (a) the interest rate per annum shown on page 3750 of the
Dow Jones & Company Telerate screen or any successor page as the composite
offered rate for London interbank deposits with a period comparable to the
Interest Period for such LIBOR Rate Advance, as shown under the heading "USD" at
11:00 a.m. (London time) two (2) Business Days prior to the first day of such
Interest Period or (b) if the rate in clause (a) of this definition is not shown
for any particular day, the average interest rate per annum (rounded upwards, if
necessary, to the next 1/16th of 1%) offered to the Agent in the interbank
eurodollar market for dollar deposits of amounts in funds comparable to the
principal amount of the LIBOR Rate Advance to which such LIBOR Rate is to be
applicable with maturities comparable to the Interest Period for which such
LIBOR Rate will apply as of approximately 10:00 a.m. (Houston, Texas time) two
(2) Business Days prior to the commencement of such Interest Period.
"LIBOR RATE ADVANCE" means any Advance bearing interest at a rate
determined by reference to the LIBOR Rate in accordance with the provisions of
ARTICLE II.
"LIEN" means, when used with respect to any Person, any mortgage,
lien, charge, pledge, security interest or encumbrance of any kind (whether
voluntary or involuntary and whether imposed or created by operation of law or
otherwise) upon, or pledge of, any of its property or assets, whether now owned
or hereafter acquired, any lease that constitutes a security interest pursuant
to Section 1.201 of the Texas Business and Commerce Code, any capital lease in
the nature of the foregoing, any conditional sale agreement or other title
retention agreement, in each case, for the purpose, or having the effect, of
protecting a creditor against loss or securing the payment or performance of an
obligation.
-13-
"LOAN" and "LOANS" have the meaning specified in SECTION 2.03(B).
"LOAN DOCUMENTS" means this Agreement, the Notes, the Guaranty,
the Exceptions Letter, any agreement with respect to a Derivative entered into
with a Lender existing from time to time and the Security Documents.
"LOAN PARTIES" means, collectively, the Company and its
Subsidiaries, the Parent and Holding Co. and, individually, any one of the
foregoing.
"MAJORITY LENDERS" means Lenders holding at least 51% of the
Total Commitment (notwithstanding any reduction or termination of the Total
Commitment pursuant to SECTION 4.02, 4.03 or 9.02).
"MARGIN" means, (a) with respect to any Advance made under any
Revolving Credit Loan, Term Loan A or ESOP Loan, the rate of interest per annum
determined as set forth below as a function of the Type of such Loan:
(i) during the period from the Execution Date through the
Financial Statement Delivery Date for the fiscal quarter ending December 31,
1996:
LIBOR Rate Alternate Base
ADVANCE RATE ADVANCE
2.00% 1%
(ii) during the period between any two Financial Statement
Delivery Dates for any Margin Period occurring after December 31, 1996:
(A) the rate determined by reference to the pricing grid below as
a function of the ratio of Total Debt (on the last day of the quarter
most recently ended prior to such Financial Statement Delivery Date) to
EBITDA:
LIBOR Rate Alternate Base
TOTAL DEBT/EBITDA ADVANCE MARGIN RATE MARGIN
Less Than 1.50 0.625% 0%
Greater than 1.50 0.75% 0%
-
Less Than 2.00
-14-
LIBOR Rate Alternate Base
TOTAL DEBT/EBITDA ADVANCE MARGIN RATE MARGIN
Greater than 2.00 1.00% 0%
Less Than 2.50
Greater than 2.50 1.25% 0.25%
-
Less Than 3.00
Greater than 3.00 1.50% 0.50%
-
Less Than 3.50
Greater than 3.50 1.75% 0.75%
-
Less Than 4.00
Greater than 4.00 2.00% 1.00%
-
Less Than 4.50
Greater than 4.50 2.50% 1.50%
(B) if the ratio of Total Debt (on the last day of the quarter
most recently ended prior to such Financial Statement Delivery Date) to
EBITDA cannot be reasonably determined by the Agent for any Margin
Period because of the Company's failure to timely deliver its financial
statements until such ratio can be so determined:
LIBOR Rate Alternate Base
ADVANCE RATE ADVANCE
2.50% 1.50%
(b) with respect to any Advance made under the Term Loan B, three
percent (3%) per annum,
(c) with respect to any Advance made under the Swing Line Loan,
the applicable Margin for any Alternate Base Rate Advance as determined in
subclauses (a) (i) and (ii) above.
"MARGIN PERIOD" means a period commencing on the most recent
Financial Statement Delivery Date and ending on the next Financial Statement
Delivery Date.
"MATERIAL ADVERSE EFFECT" means, relative to any occurrence of
whatever nature (including any adverse determination in any litigation,
arbitration or governmental investigation or proceeding), (a) a material adverse
effect on the financial condition, business, operations, prospects or assets of
the Company on an individual basis or the Company and its Subsidiaries taken as
a whole,
-15-
or (b) a material impairment of the ability of the Company on an individual
basis or the Company and its Subsidiaries taken as a whole to perform
obligations under the Loan Documents or (c) an impairment of the validity or
enforceability of any Loan Document which materially affects the benefits
intended to be bestowed thereunder.
"MATERIAL CONTRACTS" means those agreements listed on SCHEDULE
8.12 hereto.
"MERGER" has the meaning specified in the introduction to this
Agreement.
"MULTIEMPLOYER PLAN" means any plan which is a "multiemployer
plan" (as such term is defined in Section 4001(a)(3) of ERISA) to which the
Company or any ERISA Affiliate contributes or has any obligation or liability to
make contributions, including any withdrawal liability, contingent or otherwise.
"NOTES" means the Revolving Credit Notes, the Term Loan A Notes,
the Term Loan B Notes, the ESOP Notes and the Swing Line Note and "Note" means
any one of the same.
"NOTICE OF ADVANCE" has the meaning specified in SECTION 2.04(A).
"NOTICE OF CONVERSION" has the meaning specified in SECTION 2.07.
"NOTICE OF DEFAULT" has the meaning specified in SECTION 9.02.
"OBLIGATIONS" means all the obligations of the Company now or
hereafter existing under the Loan Documents, whether for principal, interest,
Fees, expenses, indemnification or otherwise.
"OTHER ACTIVITIES" has the meaning specified in SECTION 10.03.
"OTHER ASSETS" means the assets listed on the attached Schedule
1.01.
"OTHER FINANCINGS" has the meaning specified in SECTION 10.03.
"PARENT" has the meaning specified in the introduction to this
Agreement.
"PARENT NOTE" means that certain promissory note executed by the
Parent, as maker, to the Company and Finance Corp., as co-payees, dated as of
the Effective Date evidencing the loan by Finance Corp. of an amount equal to
approximately $140,500,000.00 to be used solely for the purpose of purchasing
the capital stock of TOC and TPC and certain transaction expenses incurred in
connection with such purchase.
-16-
"PAYMENT OFFICE" means the office of the Agent located at 1111
Fannin Street, Houston, Texas 77002, or such other office as the Agent may
hereafter designate in writing as such to the other parties hereto.
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to all or any of its functions under ERISA.
"PERMITTED INVESTMENTS" means, as to any Person:
(a) securities issued or directly and fully guaranteed or insured
by the United States or any agency or instrumentality thereof (PROVIDED that the
full faith and credit of the United States is pledged in support thereof) having
maturities of not more than twelve months from the date of acquisition by such
Person,
(b) bankers acceptances or time deposits and certificates of
deposit with maturities of not more than twelve months from the date of
acquisition by such Person which deposits or certificates are either: (i) fully
insured by the Federal Deposit Insurance Corporation or (ii) in any Lender or
commercial bank incorporated in the United States or any United States branch of
any other commercial bank and, in the case of any such other commercial bank,
having capital, surplus and undivided profits aggregating $500,000,000 or more
with a short-term unsecured debt rating of at least A1 from Standard & Poor's
Ratings Group and P1 from Moody's Investors Service,
(c) commercial paper issued by any Person incorporated in the
United States rated at least A1 or the equivalent thereof by Standard & Poor's
Ratings Group and at least P1 or the equivalent thereof by Moody's Investors
Service and, in each case, maturing not more than six months after the date of
acquisition by such Person,
(d) investments in any security issued by an investment company
registered under section 8 of the Investment Company Act of 1940 (15 U.S.C.
80a-8) that is a money market fund in compliance with all applicable
requirements of SEC Rule 2a-7 (17 CFR 270.2a-7); and
(e) repurchase or reverse purchase agreements respecting
obligations with a term of not more than seven days for underlying securities of
the types described in clause (a) above entered into with any bank listed in or
meeting the qualifications specified in clause (b) above.
"PERMITTED LIENS" has the meaning specified in SECTION 8.04.
"PERSON" means an individual, partnership, corporation (including
a business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a federal, foreign
or domestic state or political subdivision thereof or any agency of such state
or subdivision.
-17-
"PLAN" means any employee pension benefit plan (as defined in
Section 3(2) of ERISA), subject to Title IV of ERISA or Section 412 of the Code,
other than a Multiemployer Plan, with respect to which the Company, its
Subsidiaries or an ERISA Affiliate contributes or has an obligation or liability
to contribute, including any such plan that may have been terminated.
"PRIME RATE" shall mean the rate which the Agent announces from
time to time as its prime rate, effective as of the date announced as the
effective date of any change in such prime rate. Without notice to the Company
or any other Person, the Prime Rate shall change automatically from time to time
as and in the amount by which such prime rate shall fluctuate. The Prime Rate is
a reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. The Agent may make commercial loans or other
loans at rates of interest at, above or below the Prime Rate.
"PURCHASE AGREEMENT" means that certain Stock Purchase Agreement
(including all annexes and schedules attached thereto) dated May 14, 1996 among
the shareholders of TOC and TPC, as seller, the Parent, as buyer, and Holding
Co.
"RECEIVABLE" means, as to the Company or any Subsidiary at any
time of determination thereof, the unpaid portion of the obligation, as stated
on the respective invoice, or if no invoice, other writing or an electronic
medium, of an account debtor of such Person in respect of Inventory, goods,
technology or other assets purchased and shipped or services rendered in the
ordinary course of business of such Person.
"REFUNDED SWING LINE LOANS" has the meaning specified in SECTION
2.01(B)(II).
"REGISTER" has the meaning specified in SECTION 11.10(D).
"REGULATION D" means Regulation D of the Board (respecting
reserve requirements), as the same is from time to time in effect, and all
official rulings and interpretations thereunder or thereof.
"REGULATION G" means Regulation G of the Board (respecting margin
credit extended by Persons other than banks and broker/dealers), as the same is
from time to time in effect, and all official rulings and interpretations
thereunder or thereof.
"REGULATION U" means Regulation U of the Board (respecting margin
credit extended by banks), as the same is from time to time in effect, and all
official rulings and interpretations thereunder or thereof.
-18-
"REGULATION X" means Regulation X of the Board (respecting
borrowers who obtain margin credit), as the same is from time to time in effect,
and all official rulings and interpretations thereunder or thereof.
"RELEASE" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping or
disposing into the environment (including the abandonment or discarding of
barrels, containers and other closed receptacles) other than in accordance with
Environmental Laws.
"REPORTABLE EVENT" means an event described in Section 4043(c) of
ERISA with respect to a Plan, other than an event described in paragraphs (1)
through (8) as to which the 30-day notice requirement has been waived by the
PBGC.
"RESERVE PERCENTAGE" means, for any Interest Period and for any
Lender, the reserve percentage applicable during such Interest Period under
regulations issued from time to time by the Board (or if more than one such
percentage is so applicable, the daily average for such percentages for those
days in such Interest Period during which any such percentage shall be so
applicable) for determining the maximum reserve requirement (including any
marginal, supplemental or emergency reserves) for such Lender in respect of
liabilities or assets consisting of or including Eurocurrency Liabilities.
"RESPONSIBLE OFFICER" means, with respect to the Company, the
Parent, or Holding Co., the chairman of the board of directors, the president,
chief financial officer or treasurer.
"REVOLVING CREDIT COMMITMENT" means, with respect to the
Revolving Credit Loans and as to any Lender, the amount set forth opposite such
Lender's name on the signature pages hereof, as modified from time to time
pursuant to the terms hereof.
"REVOLVING CREDIT COMMITMENT FEE" has the meaning specified in
SECTION 4.01(A).
"REVOLVING CREDIT LENDER" means any Lender having a Revolving
Credit Commitment hereunder.
"REVOLVING CREDIT LOAN" has the meaning specified in SECTION
2.01.
"REVOLVING CREDIT MATURITY DATE" means December 31, 2002, unless
accelerated pursuant to SECTION 9.02.
"REVOLVING CREDIT NOTE" has the meaning specified in SECTION
2.05(A).
"SCHEDULED CAPITAL EXPENDITURES" has the meaning specified in
SECTION 8.14.
-19-
"SECURITY DOCUMENTS" means all those certain security agreements,
pledge agreements, stock certificates, mortgages, assignments, UCC financing
statements, lien consents and waivers and all other similar documents executed
by the Company and its Subsidiaries, Holding Co., and/or the Parent, as the case
may be, in connection herewith granting to the Agent for the benefit of the
Lenders a Lien in substantially all of the assets of the Company and its
Subsidiaries (other than the Other Assets) and the common stock of the Company
and the Parent as security for the Obligations.
"SUBSIDIARY" means, with respect to any Person, (a) any
corporation, partnership, association, joint venture or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the directors (or other Persons performing similar functions) are at
the time owned by such Person, directly or indirectly and (b) any corporation,
partnership, association, joint venture or other entity in which such Person,
directly or indirectly, has greater than 50% of the equity interest.
"SUBORDINATED DEBT" means the unsecured subordinated Indebtedness
of the Company evidenced by $175,000,000.00 aggregate principal amount of 111/8%
Senior Subordinated Notes of the Company due 2006 and including any exchange
notes issued by the Company in exchange for such Senior Subordinated Notes.
"SWING LINE COMMITMENT" means the Swing Line Lender's obligation
to make Swing Line Loans pursuant to SECTION 2.01(B).
"SWING LINE LENDER" means TCB, in its capacity as provider of the
Swing Line Loans.
"SWING LINE LOAN" or "SWING LINE LOANS" has the meaning specified
in SECTION 2.01(B).
"SWING LINE NOTE" has the meaning specified in SECTION 2.05(E).
"TCB" means Texas Commerce Bank National Association, a national
banking association.
"TOC" has the meaning specified in the introduction to this
Agreement.
"TPC" has the meaning specified in the introduction to this
Agreement.
"TERM LOAN A" has the meaning specified in SECTION 2.03(A).
"TERM LOAN B" has the meaning specified in SECTION 2.03(B).
-20-
"TERM LOAN A COMMITMENT" means, with respect to Term Loan A and
as to any Lender, the amount set forth opposite such Lender's name on the
signature pages hereof under the heading "Term Loan A" aggregating
$85,000,000.00
"TERM LOAN B COMMITMENT" means, with respect to Term Loan B and
as to any Lender, the amount set forth opposite such Lender's name on the
signature pages hereof under the heading "Term Loan B" aggregating
$45,000,000.00
"TERM LOAN A LENDER" means any Lender having a Term Loan A
Commitment hereunder.
"TERM LOAN B LENDER" means any Lender having a Term Loan B
Commitment hereunder.
"TERM LOAN A MATURITY DATE" means December 31, 2002, unless
accelerated pursuant to SECTION 9.02.
TERM LOAN B MATURITY DATE" means June 30, 2004, unless
accelerated pursuant to SECTION 9.02.
"TERM NOTE A" has the meaning specified in SECTION 2.05(B).
"TERM NOTE B" has the meaning specified in SECTION 2.05(C).
"TOTAL COMMITMENT" means an amount equal to the sum of the Total
Revolving Credit Commitment (including the Swing Line Commitment), Term Loan A
Commitments, Term Loan B Commitments and ESOP Loan Commitments.
"TOTAL DEBT" means, as to the Company and its Subsidiaries on a
consolidated basis at any time without duplication, all Indebtedness for
borrowed money, all obligations evidenced by bonds, debentures, notes, or other
similar instruments, all Capitalized Lease Obligations, and all guaranties of
funded Indebtedness (without regard to maturity) of other Persons.
"TOTAL REVOLVING CREDIT COMMITMENT" means $40,000,000.00 as same
may be reduced pursuant to SECTION 4.02 or 4.03.
"TYPE" has the meaning specified in SECTION 1.02.
"UNFUNDED CURRENT LIABILITY" means, with respect to any Plan, the
amount, if any, by which the value of the benefit liabilities under the Plan as
of the close of its most recent Plan year
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exceeds the fair market value of the assets of the Plan, determined in
accordance with Section 412 of the Code.
"UNUTILIZED COMMITMENT" at any time, means the Total Revolving
Credit Commitment LESS Letter of Credit Obligations LESS the outstanding
Advances under the Revolving Credit Loans as same may be reduced pursuant to
SECTION 4.02 OR 4.03.
"VOTING STOCK" means the capital stock of any 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.
SECTION 1.02 TYPES OF ADVANCES. Advances hereunder are
distinguished by "Type". The Type of an Advance refers to the determination
whether such Advance is a LIBOR Rate Advance or an Alternate Base Rate Advance.
SECTION 1.03 ACCOUNTING TERMS. All accounting terms not defined
herein shall be construed in accordance with GAAP, as applicable, and all
calculations required to be made hereunder and all financial information
required to be provided hereunder shall be done or prepared in accordance with
GAAP.
ARTICLE II
THE LOANS
SECTION 2.01 THE LOANS. (a) THE REVOLVING CREDIT LOANS. Subject
to the terms and conditions hereof, each Revolving Credit Lender severally
agrees at any time and from time to time on and after the Effective Date and
prior to the Revolving Credit Maturity Date, to make and maintain a revolving
credit loan or loans up to the amount of such Lender's Revolving Credit
Commitment (each a "REVOLVING CREDIT LOAN" and collectively, the "REVOLVING
CREDIT LOANS") to the Company, which Loans (1) shall, at the option of the
Company, be made and maintained pursuant to one or more Advances comprised of
Alternate Base Rate Advances or LIBOR Rate Advances; provided that all Loans
comprising all or a portion of the same Advance shall when made be of the same
Type, (2) in the case of any LIBOR Rate Advance, shall be made in the minimum
amount of $2,000,000.00 and integral multiples of $100,000.00, (3) in the case
of any Alternate Base Rate Advance, shall be made in the minimum amount of
$1,000,000.00 (or if less, in the aggregate amount of the Unutilized Commitment)
and integral multiples of $100,000.00, and (4) may be repaid and, so long as no
Default or Event of Default exists hereunder, reborrowed, at the option of the
Company in accordance with the provisions hereof. Notwithstanding the foregoing,
the aggregate outstanding principal balance of all Revolving Credit Loans and
all Swing Line Loans PLUS the Letter of Credit Obligations shall not exceed the
lesser of the Borrowing Base then in effect and the Total Revolving Credit
Commitment. There shall be no further Advances after the Revolving Credit
Maturity Date.
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(b) SWING LINE COMMITMENT. (i) Subject to the terms and
conditions hereof, the Swing Line Lender agrees at any time and from time to
time on and after the Effective Date and prior to the Revolving Credit Maturity
Date, to make swing line loans (each a "SWING LINE LOAN" and collectively, the
"SWING LINE LOANS") to the Company in an aggregate principal amount at any one
time outstanding not to exceed $5,000,000.00, which Loans (A) shall be made and
maintained pursuant to one or more Advances comprised of Alternate Base Rate
Advances and which shall not be entitled to be converted into LIBOR Rate
Advances, (B) shall be made in the minimum amount of $100,000.00 (or if less, in
the aggregate amount of the Unutilized Commitment) and (C) may be repaid and, so
long as no Default or Event of Default exists hereunder, reborrowed, at the
option of the Company, in accordance with the provisions hereof. Swing Line
Loans shall constitute "Revolving Credit Loans" for all purposes hereunder,
EXCEPT they shall be held by the Swing Line Lender (subject to sub-clause (ii)
below) and shall not be considered a utilization of the Revolving Credit
Commitment of any Revolving Credit Lender hereunder for purposes of calculating
the Revolving Credit Commitment Fee. Notwithstanding the foregoing, the
aggregate outstanding principal balance of all Revolving Credit Loans and Swing
Line Loans PLUS the Letter of Credit Obligations shall not exceed the lesser of
the Borrowing Base then in effect and the Total Revolving Credit Commitment.
(ii) At any time before or after a Default or Event of Default,
the Swing Line Lender, in its sole and absolute discretion may give notice to
the Agent to request each Revolving Credit Lender, including the Swing Line
Lender, to make a Revolving Credit Loan as an Alternate Base Rate Loan in an
amount equal to such Lender's percentage participation in the Total Revolving
Credit Commitment TIMES the outstanding principal balance of any Swing Line Loan
(the "REFUNDED SWING LINE LOAN") outstanding on the date such notice is given;
PROVIDED that the provision of this subsection shall not affect the obligation
of the Company to prepay Swing Line Loans in accordance with SECTION 2.08(D).
Unless the Revolving Credit Commitments shall have expired or terminated, each
Revolving Credit Lender shall make the proceeds of its Revolving Credit Loan
available to the Agent for the account of the Swing Line Lender on the next
Business Day following such request, in immediately available funds. The
proceeds of such Revolving Credit Loans shall be immediately applied to repay
the Refunded Swing Line Loan.
(iii) At any time before or after a Default or Event of Default,
if the Revolving Credit Commitments shall have expired or be terminated while
any Swing Line Loan is outstanding, each Revolving Credit Lender, at the sole
option of the Swing Line Lender shall either, (A) notwithstanding the expiration
or termination of the Revolving Credit Commitments, make a Revolving Credit Loan
as an Alternate Base Rate Loan which such Revolving Credit Loan shall be deemed
a "Revolving Credit Loan" for all purposes of this Agreement and the other Loan
Documents) or (B) be deemed, without further action by any Person, to have
purchased from the Swing Line Lender a participation in such Swing Line Loan in
either case in an amount equal to such Lender's percentage participation in the
Total Revolving Credit Commitment times the outstanding
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principal balance of such Swing Line Loan. The Agent shall notify each such
Lender of the amount of such Revolving Credit Loan or participation and such
Lender will transfer to the Agent for the account of the Swing Line Lender on
the next Business Day following such notice, in immediately available funds, the
amount of its Revolving Credit Loan or participation.
(iv) If any such Lender shall not have so made its Revolving
Credit Loans or its percentage participation available to the Agent pursuant to
this SECTION 2.01(B), such Lender agrees to pay interest thereon for each day
from such date until the date such amount is paid at the lesser of (1) the
Federal Funds Effective Rate on the date payment is to be made to the Agent and
(2) the Highest Lawful Rate. Whenever, at any time after the Agent has received
from any Revolving Credit Lender such Lender's Revolving Credit Loan or
participating interest in a Swing Line Loan, the Agent receives any payment on
account thereof, the Agent will pay to such Lender its participating interest in
such amount (appropriately adjusted, in the case of interest payments, to
reflect the period of time during which such Lender's participating interest was
outstanding and funded) which payment shall be subject to repayment by such
Lender if such payment received by the Agent is required to be returned. Each
Revolving Credit Lender's obligation to make the Revolving Credit Loans or
purchase such participating interests pursuant to this SECTION 2.01(B) shall be
absolute and unconditional and shall not be affected by any circumstance,
including, without limitation, (A) any set-off, counterclaim, recoupment,
defense or other right which such Lender or any other Person may have against
the Swing Line Lender, the Agent or any other Person for any reason whatsoever;
(B) the occurrence or continuance of a Default or an Event of Default or the
termination of Revolving Credit Commitments; (C) the occurrence of any Material
Adverse Effect; (D) any breach of this Agreement by the Company or any other
Lender; or (E) any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing. Each Swing Line Loan, once so participated
by any Revolving Credit Lender, shall cease to be a Swing Line Loan with respect
to that amount for purposes of this Agreement but shall continue to be a
Revolving Credit Loan and be evidenced by such Lender's Revolving Credit Note.
SECTION 2.02 THE ESOP LOAN. Subject to the terms and conditions
herein set forth, each ESOP Lender agrees to make and maintain a term loan in
the amount of such Lender's ESOP Loan Commitment (the "ESOP LOAN") to the
Company. The ESOP Loan shall be fully advanced on the Effective Date, and no
ESOP Lender shall have an obligation to make any additional Advance under the
ESOP Loan after such date. Any amount repaid under the ESOP Loan may not be
reborrowed. All amounts outstanding under the ESOP Loan shall, at the option of
the Company, be made and maintained as Alternate Base Rate Advances or LIBOR
Rate Advances; provided that all Loans comprising all or a portion of the same
Advance shall when made be of the same Type.
SECTION 2.03 THE TERM LOANS. (a) Subject to the terms and
conditions herein set forth, each Term Loan A Lender agrees to make and maintain
a term loan in the amount of such Lender's Term Loan A Commitment (the "TERM
LOAN A") to the Company. The Term Loan A shall be fully advanced on the
Effective Date, and no Term Loan A Lender shall have an obligation to
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make any additional Advance under the Term Loan A after such date. Any amount
repaid under the Term Loan A may not be reborrowed. All amounts outstanding
under the Term Loan A shall, at the option of the Company, be made and
maintained as Alternate Base Rate Advances or LIBOR Rate Advances; provided that
all Loans comprising all or a portion of the same Advance shall when made be of
the same Type.
(b) Subject to the terms and conditions herein set forth, each
Term Loan B Lender agrees to make and maintain a term loan in the amount of such
Lender's Term Loan B Commitment (the "TERM LOAN B" and, together with the ESOP
Loan, Revolving Credit Loans, Swing Line Loans, Term Loan A, and any Advances
under a Letter of Credit described in ARTICLE III hereof, the "LOANS") to the
Company. The Term Loan B shall be fully advanced on the Effective Date, and no
Term Loan B Lender shall have an obligation to make any additional Advance under
the Term Loan after such date. Any amount repaid under the Term Loan B may not
be reborrowed. All amounts outstanding under the Term Loan B shall, at the
option of the Company, be made and maintained as Alternate Base Rate Advances or
LIBOR Rate Advances; provided that all Loans comprising all or a portion of the
same Advance shall when made be of the same Type.
SECTION 2.04 NOTICE OF ADVANCE. (a) REVOLVING CREDIT LOANS.
Whenever the Company requires an Advance under the Revolving Credit Loans, it
shall give written notice thereof (a "NOTICE OF ADVANCE") (or telephonic notice
promptly confirmed in writing) to the Agent (i) in the case of an Alternate Base
Rate Advance, not later than 10:00 a.m. (Houston, Texas time) on the date of
such Advance and (ii) in the case of a LIBOR Rate Advance, not later than 11:00
a.m. (Houston, Texas time) three (3) Business Days prior to the date of such
Advance. Each Notice of Advance shall be irrevocable and shall be in the form of
EXHIBIT 2.04 hereto, specifying (A) the aggregate principal amount of the
Advance to be made, (B) the date of such Advance (which shall be a Business
Day), (C) whether it is to be an Alternate Base Rate Advance or a LIBOR Rate
Advance and (D) if the proposed Advance is to be a LIBOR Rate Advance, the
initial Interest Period to be applicable thereto. The Agent shall promptly give
the Revolving Credit Lenders written notice or telephonic notice (promptly
confirmed in writing) of each proposed Advance, of each Revolving Credit
Lender's proportionate share thereof and of the other matters covered by each
Notice of Advance.
(b) SWING LINE LOANS. Whenever the Company requires an Advance
under the Swing Line Loans, it shall give written notice thereof (or telephonic
notice promptly confirmed in writing) to the Swing Line Lender not later than
11:00 a.m. (Houston, Texas time) on the date of such Advance. Each notice shall
be irrevocable and shall specify the aggregate principal amount of such Advance
and the date of such Advance (which shall be a Business Day).
SECTION 2.05 THE NOTES. (a) The Company's obligation to repay the
Revolving Credit Loans made by each Revolving Credit Lender shall be evidenced
by a revolving credit promissory note duly executed and delivered by the Company
to each Revolving Credit Lender substantially in the form of EXHIBIT 2.05A
hereto (each a "REVOLVING CREDIT NOTE" and collectively,
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the "REVOLVING CREDIT NOTES"), and each Revolving Credit Note shall (i) be
payable to the order of such Lender, (ii) be in a stated principal amount equal
to the Revolving Credit Commitment of such Lender, (iii) be payable prior to
maturity as provided herein and mature on the Revolving Credit Maturity Date,
(iv) bear interest as provided in the appropriate clause of SECTION 2.12 and (v)
be entitled to the benefits of this Agreement and the other Loan Documents.
(b) The Company's obligation to repay the Term Loan A made by
each Term Loan A Lender shall be evidenced by a term promissory note duly
executed and delivered by the Company to each Term Loan A Lender substantially
in the form of EXHIBIT 2.05B hereto (each a "TERM NOTE A" and collectively, the
"TERM NOTES A"), and each Term Note A shall (i) be payable to the order of such
Lender, (ii) be in a stated principal amount equal to the Term Loan A Commitment
of such Lender, (iii) be payable prior to maturity as provided herein and mature
on the Term Loan A Maturity Date, (iv) bear interest as provided in the
appropriate clause of SECTION 2.12 and (v) be entitled to the benefits of this
Agreement and the other Loan Documents.
(c) The Company's obligation to repay the Term Loan B made by
each Term Loan B Lender shall be evidenced by a term promissory note duly
executed and delivered by the Company to each Term Loan B Lender substantially
in the form of EXHIBIT 2.05C hereto (each a "TERM NOTE B" and collectively, the
"TERM NOTES B"), and each Term Note B shall (i) be payable to the order of such
Lender, (ii) be in a stated principal amount equal to the Term Loan B Commitment
of such Lender, (iii) be payable prior to maturity as provided herein and mature
on the Term Loan B Maturity Date, (iv) bear interest as provided in the
appropriate clause of SECTION 2.12 and (v) be entitled to the benefits of this
Agreement and the other Loan Documents.
(d) The Company's obligation to repay the ESOP Loan made by each
ESOP Lender shall be evidenced by a term promissory note duly executed and
delivered by the Company to each ESOP Lender substantially in the form of
EXHIBIT 2.05D hereto (each an "ESOP NOTE" and collectively, the "ESOP NOTES"),
and each ESOP Note shall (i) be payable to the order of such Lender, (ii) be in
a stated principal amount equal to the ESOP Loan Commitment of such Lender,
(iii) be payable prior to maturity as provided herein and mature on the ESOP
Loan Maturity Date, (iv) bear interest as provided in the appropriate clause of
SECTION 2.12 and (v) be entitled to the benefits of this Agreement and the other
Loan Documents.
(e) The Company's obligation to repay the Swing Line Loans made
by the Swing Line Lender shall be evidenced by a promissory note duly executed
and delivered by the Company to the Swing Line Lender substantially in the form
of EXHIBIT 2.05E hereto (the "SWING LINE NOTE"), and shall (i) be in a stated
principal amount equal to the Swing Line Commitment, (ii) be payable prior to
maturity as provided herein and mature on the Revolving Credit Maturity Date,
(iii) bear interest as provided in the appropriate clause of SECTION 2.12 and
(iv) be entitled to the benefits of this Agreement and the other Loan Documents.
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SECTION 2.06 DISBURSEMENT OF FUNDS. (a) With respect to any
Advance to be made under any Loan other than the Swing Line Loan, no later than
1:00 p.m. (Houston, Texas time) on any Advance Date, each Lender shall make
available its pro rata portion of the amount of such Advance in U.S. dollars and
in immediately available funds at the Payment Office. The Agent shall credit the
amounts so received to the general deposit account of the Company maintained
with the Agent or as otherwise directed by the Company.
(b) With respect to any Advance to be made under the Swing Line
Loan, no later than 2:00 p.m. (Houston, Texas time) on the requested Advance
Date, the Swing Line Lender shall make available to the Company in immediately
available funds the amount of such Advance at the Company's general deposit
account maintained with the Swing Line Bank or as otherwise directed by the
Company.
(c) Unless the Agent shall have been notified by any Lender prior
to disbursement of an Advance by the Agent that such Lender does not intend to
make available to the Agent such Lender's portion of the Advance to be made on
such date, the Agent may assume that such Lender has made such amount available
to the Agent on such Advance Date and the Agent may, in reliance upon such
assumption, make available to the Company a corresponding amount. If such
corresponding amount is not in fact made available to the Agent by such Lender
and the Agent has made available same to the Company, the Agent shall be
entitled to recover such corresponding amount on demand from such Lender. If
such Lender does not pay such corresponding amount forthwith upon the Agent's
demand therefor, the Agent shall promptly notify the Company, and the Company
shall pay such corresponding amount to the Agent within two (2) Business Days
after demand therefor. The Agent shall also be entitled to recover from such
Lender or the Company, as the case may be, interest on such corresponding amount
from the date such corresponding amount was made available by the Agent to the
Company to the date such corresponding amount is recovered by the Agent, at a
rate per annum equal to, (i) as to any Lender, the Federal Funds Effective Rate
on the date of such Advance and (ii) as to the Company, at the rate per annum
applicable to such Loan PLUS the applicable Margin. Nothing herein shall be
deemed to relieve any Lender from its obligation to fulfill its commitments
hereunder or to prejudice any rights which the Company may have against any
Lender as a result of any default by such Lender hereunder.
SECTION 2.07 CONVERSIONS AND CONTINUANCES. Subject to the
provisions of SECTION 2.17 hereof, the Company shall have the option to convert
on any Business Day all or a portion of the outstanding principal amount of one
Type of Advance into another Type of Advance (other than Advances under the
Swing Line Loan which at all times must be maintained as Alternate Base Rate
Advances) or continue any LIBOR Advance for an additional Interest Period,
PROVIDED, no Advances may be converted into or continued as LIBOR Rate Advances
if a Default or Event of Default is in existence on the date of the conversion
or continuation. Except as provided in SECTION 2.13(B), each such conversion or
continuation shall be effected by the Company giving the Agent written notice
(each a "NOTICE OF CONVERSION") prior to 11:00 a.m. (Houston, Texas time) at
least (a) three (3)
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Business Days prior to the date of such conversion in the case of conversion or
continuation into or continuance as a LIBOR Rate Advance and (b) prior to 10:00
a.m. (Houston, Texas time) on the date of such conversion in the case of a
conversion into an Alternate Base Rate Advance, specifying each Advance (or
portions thereof) to be so converted or continued and, if to be converted into
or continued as a LIBOR Rate Advance, the Interest Period to be initially
applicable thereto. The Agent shall thereafter promptly notify each affected
Lender of such Notice of Conversion.
SECTION 2.08 MANDATORY REPAYMENTS. (a) THE REVOLVING CREDIT
NOTES. All outstanding principal (and any accrued, unpaid interest) on the
Revolving Credit Notes shall be due and payable on the Revolving Credit Maturity
Date. Notwithstanding anything to the contrary contained in this Agreement or in
any other Loan Document, the aggregate outstanding principal balance of the
Revolving Credit Notes and Swing Line Loans PLUS the Letter of Credit
Obligations shall not exceed the lesser of the Borrowing Base and the Total
Revolving Credit Commitment. The Revolving Credit Lenders shall never be
required to make any Advance under the Revolving Credit Loans (or the Swing Line
Lender to make any Swing Line Loan) or issue any Letter of Credit that would
cause the aggregate outstanding principal balance of the Revolving Credit Notes
and Swing Line Loans PLUS the Letter of Credit Obligations to exceed the lesser
of the Borrowing Base and the Total Revolving Credit Commitment. If the
aggregate outstanding principal balance of the Revolving Credit Notes and Swing
Line Loans PLUS the Letter of Credit Obligations at any time exceeds the lesser
of the Borrowing Base and the Total Revolving Credit Commitment, the Company
shall immediately repay the principal of the Revolving Credit Notes in an amount
at least equal to such excess. If after giving effect to any such principal
repayment the Letter of Credit Obligations exceed the lesser of the Borrowing
Base and the Total Revolving Credit Commitment, the Company shall pay an amount
of cash equal to such excess to the Agent to be held as security for the Letter
of Credit Obligations.
(b) THE TERM NOTES. (i) Outstanding principal on the Term Notes A
and Term Notes B shall be due and payable on each Designated Payment Date
commencing September 30, 1996 in such aggregate amounts and for such periods as
follows (as such is reduced by any principal payment made under SECTION
2.08(B)(II), (III) AND (IV) below):
Term Loan A Term Loan B
Installment Due on Installment Due on
PAYMENT DATE EACH DESIGNATED PAYMENT DATE EACH DESIGNATED PAYMENT DATE
September 30, 1996 $2,500,000 $250,000
December 31, 1996 2,500,000 250,000
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Term Loan A Term Loan B
Installment Due on Installment Due on
PAYMENT DATE EACH DESIGNATED PAYMENT DATE EACH DESIGNATED PAYMENT DATE
Payment Date Each Designated Payment Date Each Designated Payment Date
March 31, 1997 2,500,000 250,000
June 30, 1997 2,500,000 250,000
September 30, 1997 2,500,000 250,000
December 31, 1997 2,500,000 250,000
March 31, 1998 2,500,000 250,000
June 30, 1998 2,500,000 250,000
September 30, 1998 2,500,000 250,000
December 31, 1998 2,500,000 250,000
March 31, 1999 2,500,000 250,000
June 30, 1999 2,500,000 250,000
September 30, 1999 3,000,000 250,000
December 31, 1999 3,000,000 250,000
March 31, 2000 3,000,000 250,000
June 30, 2000 3,000,000 250,000
September 30, 2000 3,750,000 250,000
December 31, 2000 3,750,000 250,000
March 31, 2001 3,750,000 250,000
June 30, 2001 3,750,000 250,000
September 30, 2001 4,500,000 250,000
December 31, 2001 4,500,000 250,000
March 31, 2002 4,500,000 250,000
June 30, 2002 4,500,000 250,000
September 30, 2002 5,000,000 1,000,000
December 31, 2002 5,000,000 1,000,000
March 31, 2003 --- 6,000,000
June 30, 2003 --- 6,000,000
September 30, 2003 --- 6,250,000
December 31, 2003 --- 6,250,000
March 31, 2004 --- 6,250,000
June 30, 2004 --- 6,250,000
(ii) In addition to the amounts required under sub-clause
(b)(i) above, the Company shall make a principal payment on Term Loan A
and Term Loan B for each fiscal year (commencing with the fiscal year
ending June 30, 1997) prior to September 30 of the following fiscal year
in an amount equal to seventy-five percent (75%) of its Excess Cash Flow
for such fiscal year; PROVIDED, that in the event that the aggregate
outstanding balance of Term Loan A and Term Loan B is reduced to
$75,000,000 or less on or before June 30 of any year, the pro rata
principal payment on Term Loan A and Term Loan B required by this
paragraph shall be reduced to fifty percent (50%) of such Excess Cash
Flow, commencing with the payment due in the fiscal year after such
reduction of the aggregate outstanding balance on Term Loan A and Term
Loan B. All payments required under this SECTION 2.08(B)(II) shall be
applied pro rata against Term Loan A and Term Loan B and, as to any
payment on any of such Notes, pro rata to each remaining principal
installment.
(iii) In addition to the amounts required under
sub-clauses (i) and (ii) above, promptly upon receipt by the Company,
the Company shall make a principal payment on Term Loan A and Term Loan
B in the aggregate amount of (x) a downward adjustment to the "Final TOC
Per Share Purchase Price" or the "Final TPC Per Share Purchase Price"
made under Section 2.5.3(b) and (d), respectively, of the Purchase
Agreement and (xx) any other portion of the "Estimated TOC Per Share
Purchase Price" or "Estimated TPC Per Share Purchase Price" (as such
terms are defined in the Purchase Agreement) returned to the Company.
All payments required under this SECTION 2.08(B)(III) shall be applied
pro rata against Term Loan A and Term Loan B and, as to any payment on
any one of such Loans, pro rata to each remaining principal installment.
(iv) In addition to the amounts required under sub-clauses
(i), (ii) and (iii) above, promptly upon receipt by the Company, the
Company shall make a principal payment on Term Loan A and Term Loan B in
the amount of the cash proceeds received by the Company from any
unrelated third-party as a result of any offering (net of any expenses
of such offering) of the common stock or other equity interest of the
Company or any Subsidiary. All payments required under this SECTION
2.08(B)(IV) shall be applied pro rata against Term Loan A and Term Loan
B and, as to any payment on any of such Loans, pro rata to each
remaining principal installment.
(v) In addition to the amounts required under sub clauses
(i), (ii), (iii) and (iv) above, all outstanding principal (and any
accrued, unpaid interest) on the Term Notes A shall be due and payable
on the Term Loan A Maturity Date and all outstanding principal (and any
accrued, unpaid interest) on the Term Notes B shall be due and payable
on the Term Loan B Maturity Date.
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(c) THE ESOP NOTE. Outstanding principal on the ESOP Notes shall
be due and payable on each Designated Payment Date commencing September 30,
1996, in equal installments of $500,000.00 in the aggregate for all ESOP
Lenders. All outstanding principal (and any accrued, unpaid interest) on the
ESOP Notes shall be due and payable on the ESOP Loan Maturity Date.
(d) THE SWING LINE NOTE. All outstanding principal (and any
accrued, unpaid interest) on the Swing Line Note shall be due and payable on the
Revolving Credit Maturity Date.
SECTION 2.09 VOLUNTARY PREPAYMENTS. The Company shall have the
right to voluntarily prepay Advances in whole or in part upon giving, in the
case of a LIBOR Rate Advance, three (3) Business Days' prior written notice to
the Agent and in the case of an Alternate Base Rate Advance, one (1) Business
Days' prior written notice to the Agent; PROVIDED that at least five (5)
Business Days' prior written notice shall be given for prepayments of Term Loan
A and Term Loan B. Such notice shall specify (a) the date and amount of
prepayment and whether the prepayment is of Term Loans or Revolving Credit
Loans; and (b) in the case of the prepayment of Term Loans, whether the Company
shall approve the election, if any, of the Term Loan B Lenders to decline their
share of any such prepayment as further provided in this SECTION 2.09. Upon
receipt of such notice, the Agent shall promptly notify each applicable Lender
of the contents thereof and of such Lender's percentage participation of such
prepayment and, in the case of any Term Loan B Lender, whether or not the
Company has elected to permit each Term Loan B Lender to, at its option, decline
its Term Loan B share of such prepayment. If any such notice is given, the
amount specified in such notice shall be due and payable on the date specified
therein and (a) no LIBOR Rate Advance may be prepaid prior to the last day of
its Interest Period unless, simultaneously therewith, the Company pays to the
Agent for the benefit of the affected Lenders, all sums necessary to compensate
such Lenders for all costs and expenses resulting from such prepayment, as
reasonably determined by such Lenders, including but not limited to those costs
described in SECTIONS 2.12(F), 2.16, and 2.17 hereof, (b) each partial
prepayment shall be made (i) in the case of a prepayment of a LIBOR Rate
Advance, in a minimum aggregate principal amount of $1,000,000.00 and integral
multiples of $100,000.00, and (ii) in the case of a prepayment of an Alternate
Base Rate Advance, in a minimum aggregate amount of $1,000,000.00 and integral
multiples of $100,000.00; and (c) each prepayment of Term Loan A, Term Loan B,
and ESOP Loan Advances pursuant to this SECTION 2.09 shall be applied to the
outstanding principal of such Advances pro rata to each remaining principal
installment.
Notwithstanding the foregoing and subject to the Company's
approval described above, in respect of any partial prepayment of the Term Loans
(until such time as Term Loan A has been repaid in full) pursuant to this
SECTION 2.09, any Term Loan B Lender may, at its option, irrevocably decline
receipt of its Term Loan B share of any such prepayment, and, if such Lender so
declines, such share shall be applied as an additional prepayment of Term Loan A
pro rata to each remaining principal installment, as further adjusted pursuant
to balance of this SECTION 2.09. Any Term Loan B Lender may notify the Agent and
the Company of its election to decline its Term Loan B share of all such
prepayments, in which event such notice shall be effective until such Lender
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notifies the Agent and the Company to the contrary. Any Term Loan B Lender that
wishes to decline receipt of its share of any given prepayment pursuant to this
SECTION 2.09, shall promptly, and in any event no later than 10:00 a.m.
(Houston, Texas time) on the Business Day following receipt of its notice of
such prepayment, notify the Company and the Agent of such election. Any Term
Loan B Lender that has not provided notice pursuant to one of the two preceding
sentences prior to such 10:00 a.m. deadline shall be deemed to have elected to
accept such prepayment. The Agent shall promptly provide, to all such accepting
Term Loan B Lenders, notice of the principal amount of Term Loan B that Lenders
have elected to decline. Any such accepting Lender may, at its option,
irrevocably decline receipt of its share of any such declined share of such
prepayment (and shall indicate in such notice whether it elects to accept or
decline receipt of its share of such prepayment declined by other Lenders
pursuant to this sentence), and, if such Lender so declines, such share shall be
applied as an additional prepayment of Term Loan A in accordance with this
SECTION 2.09. Any Term Loan B Lender that wishes to decline receipt of its share
of such declined shares, shall promptly, and in any event no later than 10:00
a.m. (Houston, Texas time) on the Business Day following receipt of the notice
from the Agent regarding such declined shares, notify the Company and the Agent
of such election. Any such accepting Lender that has not provided such notice
prior to such 10:00 a.m. deadline shall be deemed to have elected to accept such
the full amount of its share of such prepayment.
SECTION 2.10 METHOD AND PLACE OF PAYMENT/NET PAYMENTS. (a) Except
as otherwise specifically provided herein, all payments under this Agreement due
from the Company shall be made to the Agent for the benefit of the affected
Lenders, or to the Agent for the benefit of the Swing Line Lender if payment is
made under any Swing Line Loan, not later than 11:00 a.m. (Houston, Texas time)
on the date when due and shall be made in lawful money of the United States in
immediately available funds at the Payment Office.
(b) Except with respect to withholdings of United States taxes,
as provided in SECTION 2.18, all payments (whether of principal, interest, Fees,
reimbursements or otherwise) by the Company under this Agreement shall be made
without set-off or counterclaim and shall be made free and clear of and without
deduction for any present or future tax, levy, impost or any other charge, if
any, of any nature whatsoever now or hereafter imposed by any taxing authority.
Except with respect to withholdings of United States taxes as provided in
SECTION 2.18, if the making of such payments by the Company is prohibited by law
unless such a tax, levy, impost or other charge is deducted or withheld
therefrom, the Company shall pay to the Agent, on the date of each such payment,
such additional amounts (without duplication of any amounts required to be paid
by the Company pursuant to SECTION 2.16 or SECTION 3.04) as may be necessary in
order that the net amounts received by the Lenders after such deduction or
withholding shall equal the amounts which would have been received if such
deduction or withholding were not required. The Company shall confirm that all
applicable taxes, if any, imposed on this Agreement or transactions hereunder
shall have been properly and legally paid by it to the appropriate taxing
authorities by sending official tax receipts or notarized copies of such
receipts to the Agent within thirty (30) days after payment of any applicable
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tax. Notwithstanding the foregoing, in no event shall the compensation payable
under this SECTION 2.10(B) (to the extent, if any, constituting interest under
applicable laws) together with all amounts constituting interest under
applicable laws and payable in connection with this Agreement, the Notes and the
other Loan Documents exceed the Highest Lawful Rate.
SECTION 2.11 PRO RATA ADVANCES/PAYMENTS. All Advances (other than
Advances made under the Swing Line Loans) under this Agreement shall be incurred
from the affected Lenders pro rata, and all payments in respect of any Loan
(other than a payment in respect of a Swing Line Loan) from the Company to the
Agent shall be applied, on the basis of the Lenders' respective percentage
participations in the Revolving Credit Commitment, the ESOP Loan Commitment, the
Term Loan A Commitment or the Term Loan B Commitment, as the case may be. It is
understood that no Lender shall be responsible for any default by any other
Lender in its obligation to make Advances hereunder and that each Lender shall
be obligated to make the Advances provided to be made by it hereunder,
regardless of the failure of any other Lender to fulfill its commitments
hereunder.
SECTION 2.12 INTEREST. (a) Subject to SECTION 11.08, the Company
agrees to pay interest on the total outstanding principal balance from time to
time of all Alternate Base Rate Advances from the date of each respective
Advance to maturity (whether by acceleration or otherwise) at a rate per annum
which shall at all times be equal to the lesser of (i) the Highest Lawful Rate
and (ii) the Alternate Base Rate in effect from time to time plus the applicable
Margin as such applicable Margin may change from time to time. If the Alternate
Base Rate is based on the Prime Rate, interest shall be computed on the basis of
the actual number of days elapsed over a year of 365 or 366 days, as the case
may be. If the Alternate Base Rate is based on the Federal Funds Effective Rate,
interest shall be computed on the basis of the actual number of days elapsed
over a year of 360 days.
(b) Subject to SECTION 11.08, the Company agrees to pay interest
on the total outstanding principal balance of all LIBOR Rate Advances from time
to time from the date of each respective Advance to maturity (whether by
acceleration or otherwise) at a rate per annum (computed on the basis of the
actual number of days elapsed over a year of 360 days) which shall, during each
Interest Period applicable thereto, be equal to the lesser of (i) the Highest
Lawful Rate and (ii) the applicable LIBOR Rate for such Interest Period plus the
applicable Margin. The applicable LIBOR Rate shall be fixed for each Interest
Period and shall not change during said Interest Period but the applicable
Margin, which is added to the LIBOR Rate to determine the total interest payable
to the affected Lender, shall be adjusted, effective on the first day of each
Margin Period, whether or not said adjustment occurs at a time other than the
beginning of an Interest Period.
(c) Subject to SECTION 11.08, overdue principal and, to the
extent permitted by law, overdue interest in respect of any Advance and all
other amounts owing hereunder shall bear interest for each day that such amounts
are overdue at a rate per annum equal to the Default Rate.
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(d) Interest on each Advance shall accrue from and including the
date of such Advance to but excluding the date of any repayment thereof and
shall be payable (i) in respect of LIBOR Rate Advances (A) on the last day of
the Interest Period applicable thereto and, in the case of any Interest Period
in excess of three months, on the last day of the third month of the Interest
Period and on the last day of the Interest Period and (B) on the date of any
voluntary or mandatory repayment of Term Loan A or Term Loan B or any conversion
or continuance, (ii) in respect of Alternate Base Rate Advances (A) on each
Designated Payment Date and (B) on the date of any voluntary or mandatory
repayment and (iii) in respect of each Advance, at maturity (whether by
acceleration or otherwise) and, after maturity, on demand.
(e) The Agent, upon determining the LIBOR Rate for any Interest
Period, shall notify the Company thereof. Each such determination shall, absent
manifest error, be final and conclusive and binding on all parties hereto. In
addition, prior to the due date for the payment of interest on any Advances set
forth in the immediately preceding paragraph, the Agent shall notify the Company
of the amount of interest due by the Company on all outstanding Advances on the
applicable due date, but any failure of the Agent to so notify the Company shall
not reduce the Company's liability for the amount owed.
(f) Subject to SECTION 11.08, the Company shall pay to the Agent
for the account of each affected Lender, so long as the Lenders shall be
required under regulations of the Board to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities,
additional interest on the unpaid principal amount of each such LIBOR Rate
Advance from the date of such Advance until such principal amount is paid in
full, at an interest rate per annum equal at all times during the Interest
Period for such Advance to the lesser of (i) the Highest Lawful Rate and (ii)
the remainder obtained by subtracting (A) the LIBOR Rate for such Interest
Period from (B) the rate obtained by dividing such LIBOR Rate referred to in
clause (A) above by that percentage equal to 100% minus the Reserve Percentage
of such Lender for such Interest Period. Such additional interest shall be
determined by such Lender as incurred and shall be payable upon demand therefor
by the Company to such Lender. Each determination by such Lender of additional
interest due under this Section 2.12(f) shall be conclusive and binding for all
purposes in the absence of manifest error.
SECTION 2.13 INTEREST PERIODS. (a) At the time the Company gives
any Notice of Advance or Notice of Conversion in respect of the making of, or
conversion into, a LIBOR Rate Advance, the Company shall have the right to
elect, by giving the Agent on the dates and at the times specified in SECTION
2.04 or SECTION 2.07, as the case may be, notice of the interest period (each an
"INTEREST PERIOD") applicable to such LIBOR Rate Advance, which Interest Period
shall be either a one, two, three or six-month period; PROVIDED, that:
(i) the initial Interest Period for any LIBOR Rate Advance shall
commence on the date of such LIBOR Rate Advance (including the date of
any conversion thereto or
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continuance thereof pursuant to SECTION 2.07); each Interest Period
occurring thereafter in respect of such LIBOR Rate Advance shall
commence on the expiration date of the immediately preceding Interest
Period;
(ii) if any Interest Period relating to a LIBOR Rate Advance
begins on a day for which there is no numerically corresponding day in
the calendar month at the end of such Interest Period, such Interest
Period shall end on the last Business Day of such calendar month;
(iii) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day, PROVIDED, that if there are no more
Business Days in that month, the Interest Period shall expire on the
preceding day; and
(iv) no Interest Period for Advances shall extend beyond the
Revolving Credit Maturity Date, Term Loan A Maturity Date, or Term Loan
B Maturity Date or ESOP Loan Maturity Date, as the case may be.
(b) If, upon the expiration of any Interest Period applicable to
a LIBOR Rate Advance, the Company has failed to elect a new Interest Period to
be applicable to such Advance as provided above, the Company shall be deemed to
have elected to convert such Advance into an Alternate Base Rate Advance
effective as of the expiration date of such current Interest Period.
SECTION 2.14 INTEREST RATE NOT ASCERTAINABLE. In the event that
the Agent shall determine (which determination shall, absent manifest error, be
final, conclusive and binding upon all parties) that on any date for determining
the LIBOR Rate for any Interest Period, by reason of any changes arising after
the date of this Agreement affecting the LIBOR interbank market, adequate and
fair means do not exist for ascertaining the applicable interest rate on the
basis provided for in the definition of LIBOR Rate, then, and in any such event,
the Agent shall forthwith give notice to the Company and to the Lenders of such
determination. Until the Agent notifies the Company that the circumstances
giving rise to the suspension described herein no longer exist, the obligations
of the Lenders to make LIBOR Rate Advances shall be suspended.
SECTION 2.15 CHANGE IN LEGALITY. (a) Notwithstanding anything to
the contrary herein contained, if any change in any law or regulation or in the
interpretation thereof by any governmental authority charged with the
administration or interpretation thereof shall make it unlawful for any Lender
or its LIBOR Lending Office to make or maintain any LIBOR Rate Advance or to
give effect to its obligations as contemplated hereby, then, by prompt written
notice to the Company, such Lender may:
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(i) declare that LIBOR Rate Advances will not thereafter be made
by such Lender hereunder, whereupon the Company shall be prohibited from
requesting LIBOR Rate Advances from such Lender hereunder (and instead,
any request for a LIBOR Rate Advance, as to such Lender, shall be deemed
to be a request for an Alternate Base Rate Advance) unless such
declaration is subsequently withdrawn; and
(ii) require that all outstanding LIBOR Rate Advances made by
such Lender be converted to Alternate Base Rate Advances, in which event
(A) all such LIBOR Rate Advances made by such Lender shall be
automatically converted to Alternate Base Rate Advances as of the
effective date of such notice as provided in paragraph (b) below (or if
so designated by such Lender in such notice, effective as of another
date) and (B) all payments and prepayments of principal which would
otherwise have been applied to repay the converted LIBOR Rate Advances
shall instead be applied to repay the Alternate Base Rate Advances
resulting from the conversion of such LIBOR Rate Advances.
(b) For purposes of this SECTION 2.15, a notice to the Company by
the Agent pursuant to paragraph (a) above shall be effective on the date of
receipt thereof by the Company.
SECTION 2.16 INCREASED COSTS, TAXES OR CAPITAL ADEQUACY
REQUIREMENTS. (a) If, after the Execution Date, the application or effectiveness
of any applicable law or regulation or compliance by any Lender with any
applicable guideline or request from any central bank or governmental authority
(whether or not having the force of law) (i) shall change the basis of taxation
of payments to such Lender of the principal of or interest on any LIBOR Rate
Advance made by such Lender or any other Fees or amounts payable hereunder
(other than taxes imposed or measured on the overall net or gross income or
revenue of such Lender or its Applicable Lending Office or franchise taxes
imposed upon it by the jurisdiction in which such Lender or its Applicable
Lending Office has an office), (ii) shall impose, modify or deem applicable any
reserve, special deposit or similar requirement with respect to any LIBOR Rate
Advance made by such Lender against assets of, deposits with or for the account
of, or credit extended by, such Lender (without duplication of any amounts paid
pursuant to SECTION 2.12(F)) or (iii) shall impose on such Lender any other
condition affecting this Agreement or any LIBOR Rate Advance made by such
Lender, and the result of any of the foregoing shall be to increase the cost to
such Lender of maintaining its Revolving Credit Commitment, Swing Line
Commitment, Term Loan A Commitment, Term Loan B Commitment or ESOP Loan
Commitment, as the case may be, or of making or maintaining any LIBOR Rate
Advance or to reduce the amount of any sum received or receivable by such Lender
hereunder (whether of principal, interest or otherwise) in respect thereof by an
amount deemed in good faith by such Lender to be material, then the Company
shall pay to such Lender such additional amount as will compensate it for such
increase or reduction upon demand.
(b) If any Lender shall have determined in good faith that any
change after the Execution Date of any law, rule, regulation or guideline
regarding capital adequacy, or any change
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in the interpretation or administration thereof or compliance with any request
or directive regarding capital adequacy (whether or not having the force of law)
of any such authority, central bank or comparable agency issued after the
Execution Date has or would have the effect of reducing the rate of return on
the capital of such Lender as a consequence of, or with reference to, such
Lender's obligations hereunder to a level below that which it could have
achieved but for such change by an amount deemed by such Lender to be material,
then, from time to time, the Company shall pay to the Agent for the benefit of
such Lender such additional amount as will reasonably compensate it for such
reduction upon demand.
(c) Each Lender will notify the Company through the Agent of any
event occurring after the date of this Agreement which will entitle it to
compensation pursuant to this SECTION 2.16, as promptly as practicable. A
certificate (i) stating that the compensation sought to be recovered pursuant to
this SECTION 2.16 is generally being charged to other similarly situated
customers and (ii) setting forth in reasonable detail the amount necessary to
compensate the Lender in question as specified in paragraph (a) or (b) above, as
the case may be, and the calculation of such amount under clause (a)(i), shall
be delivered to the Company and shall be conclusive absent manifest error. The
Company shall pay to the Agent for the account of such Lender the amount shown
as due on any such certificate upon demand. The failure on the part of any
Lender to demand increased compensation with respect to any Interest Period
shall not constitute a waiver of the right to demand compensation thereafter;
PROVIDED that with respect to events occurring prior to any notice given under
this SECTION 2.16(C), such Lenders shall only be entitled to recover
compensation for such events occurring over a period of 120 days. Upon the
request of the Company, each Lender agrees that it will use reasonable efforts
to designate a different Applicable Lending Office for the Loans due to it
affected by the matter described in SECTIONS 2.16(A) and 2.16 (B), if such
designation will avoid or reduce the liability of the Company to such Lender
under this SECTION 2.16 so long as such designation is not disadvantageous to
such Lender as determined by such Lender in its sole discretion.
(d) Except as expressly provided in SECTION 2.16(C), failure on
the part of any Lender to demand compensation for any increased costs or
reduction in amounts received or receivable or reduction in return on capital
with respect to any Interest Period shall not constitute a waiver of such
Lender's rights to demand compensation for any increased costs or reduction in
amounts received or receivables or reduction in return on capital with respect
to such Interest Period or any other Interest Period.
SECTION 2.17 LIBOR ADVANCE PREPAYMENT AND DEFAULT PENALTIES.
Subject to SECTION 11.08, the Company shall indemnify each Lender against any
loss or expense (other than loss of profit) which it may sustain or incur as a
consequence of (a) an advance of, or a conversion into, or a continuance of,
LIBOR Rate Advances that does not occur on the date specified therefor in a
Notice of Advance or Notice of Conversion, (b) any payment, prepayment or
conversion of a LIBOR Rate Advance required by any other provision of this
Agreement or otherwise made on a date other than the last day of the applicable
Interest Period or (c) any default in the payment or prepayment of
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the principal amount of any LIBOR Advance or any part thereof or interest
accrued thereon, as and when due and payable (at the due date thereof, by notice
of prepayment or otherwise). Such loss or expense shall include the amount equal
to the excess determined by each Lender of (i) its cost of obtaining the funds
for the Advance being paid, prepaid or converted or not borrowed (based on the
LIBOR Rate) for the period from the date of such payment, prepayment or
conversion or failure to borrow to the last day of the Interest Period for such
Advance (or, in the case of a failure to borrow, the Interest Period for the
Advance which would have commenced on the date of such failure to borrow) OVER
(ii) the amount of interest (as determined by each Lender) that would be
realized in reemploying the funds so paid, prepaid or converted or not borrowed
for such period or Interest Period, as the case may be.
The Agent, on behalf of the Lenders, will notify the Company of
any loss or expense which will entitle the Lenders to compensation pursuant to
this SECTION 2.17, as promptly as is practicable. A certificate of any Lender
setting forth any amount which it is entitled to receive pursuant to this
SECTION 2.17 shall be delivered to the Company and shall be conclusive absent
manifest error. The Company shall pay to the Agent for the account of the
Lenders the amount shown as due on any certificate upon demand. Without
prejudice to the survival of any other obligations of the Company hereunder, the
obligations of the Company under this SECTION 2.17 shall survive the termination
of this Agreement and the assignment of any of the Notes. The failure on the
part of any Lender to demand compensation with respect to this SECTION 2.17
shall not constitute a waiver of the right to demand compensation thereafter;
PROVIDED that with respect to any loss or expense incurred prior to any notice
given under this SECTION 2.17, such Lender shall only be entitled to recover
compensation for such loss or expense incurred over a period of 120 days.
SECTION 2.18 TAX FORMS. With respect to each Lender which is
organized under the laws of a jurisdiction outside the United States, on the
date of the initial Advance hereunder, and from time to time thereafter if
requested by the Company or the Agent, each such Lender shall provide the Agent
and the Company 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 Company
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 Company and the Agent 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 Company
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.
ARTICLE III
LETTERS OF CREDIT
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SECTION 3.01 LETTERS OF CREDIT. (a) Subject to and upon the terms
and conditions herein set forth, the Issuing Bank agrees that it will, at any
time and from time to time on or after the Effective Date and prior to the
Revolving Credit Maturity Date, following its receipt of a Letter of Credit
Request and Application for Letter of Credit, issue for the account of the
Company and in support of the obligations of the Company or any of its
Subsidiaries, one or more letters of credit (the "LETTERS OF CREDIT"), up to a
maximum amount outstanding at any one time for all Letters of Credit of
$7,500,000.00, PROVIDED that the Issuing Bank shall not issue any Letter of
Credit if at the time of such issuance: (i) Letter of Credit Obligations shall
be greater than an amount which, when added to all Advances under the Revolving
Credit Notes and the Swing Line Note then outstanding, would exceed the lesser
of the Borrowing Base and the Total Revolving Credit Commitment or (ii) the
expiry date or, in the case of any Letter of Credit containing an expiry date
that is extendible at the option of the Issuing Bank, the initial expiry date,
of such Letter of Credit is a date that is later than the Revolving Credit
Maturity Date.
(b) The Issuing Bank shall neither renew or extend nor permit the
renewal or extension of any Letter of Credit (which renewal or extension will
not be for any period ending after the Revolving Credit Maturity Date) if any of
the conditions precedent to such renewal set forth in SECTION 5.02 are not
satisfied or waived or, after giving effect to such renewal, the expiry date of
such Letter of Credit would be a date that is later than the Revolving Credit
Maturity Date.
SECTION 3.02 LETTER OF CREDIT REQUESTS. (a) Whenever the Company
desires that a Letter of Credit be issued for its account or that the existing
expiry date shall be extended, it shall give the Issuing Bank (with copies to be
sent to the Agent and each other Revolving Credit Lender) (i) in the case of a
Letter of Credit to be issued, at least five (5) Business Days' prior written
request therefor and (ii) in the case of the extension of the existing expiry
date of any Letter of Credit, at least five (5) Business Days prior to the date
on which the Issuing Bank must notify the beneficiary thereof that the Issuing
Bank does not intend to extend such existing expiry date. Each such request
shall be executed by the Company and shall be in the form of EXHIBIT 3.02
attached hereto (each a "LETTER OF CREDIT REQUEST") and shall be accompanied by
an Application for Letter of Credit therefor, completed to the reasonable
satisfaction of the Issuing Bank, and such other certificates, documents and
other papers and information as the Issuing Bank or the Agent may reasonably
request. Each Letter of Credit shall be denominated in U.S. dollars, shall
expire no later than the date specified in SECTION 3.01, shall not be in an
amount greater than is permitted under clause (i) of SECTION 3.01(A) and shall
be in such form as may be reasonably approved from time to time by the Issuing
Bank and the Company.
(b) The making of each Letter of Credit Request shall be deemed
to be a representation and warranty by the Company that such Letter of Credit
may be issued in accordance with, and will not violate the requirements of this
Agreement. Unless the Issuing Bank has received notice from any Revolving Credit
Lender before it issues the respective Letter of Credit or extends
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the existing expiry date of a Letter of Credit that one or more of the
conditions specified in ARTICLE V are not then satisfied, or that the issuance
of such Letter of Credit would violate this Agreement, then the Issuing Bank
shall issue the requested Letter of Credit for the account of the Company in
accordance with the Issuing Bank's usual and customary practices. Upon its
issuance of any Letter of Credit or the extension of the existing expiry date of
any Letter of Credit, as the case may be, the Issuing Bank shall promptly notify
the Company and the Agent and the Agent shall notify each Revolving Credit
Lender of such issuance or extension, which notices shall be accompanied by a
copy of the Letter of Credit actually issued or a copy of any amendment
extending the existing expiry date of any Letter of Credit, as the case may be.
SECTION 3.03 LETTER OF CREDIT PARTICIPATIONS. (a) All Letters of
Credit issued subsequent hereto shall be deemed to have been sold and
transferred by the Issuing Bank to each Revolving Credit Lender, and each
Revolving Credit Lender shall be deemed irrevocably and unconditionally to have
purchased and received from the Issuing Bank, without recourse or warranty, an
undivided interest and participation, (to the extent of such Lender's percentage
participation in the Revolving Credit Commitment) in each such Letter of Credit
(including extensions of the expiry date thereof), each substitute Letter of
Credit, each drawing made thereunder and the obligations of the Company under
this Agreement and the other Loan Documents with respect thereto, and any
security therefor or guaranty pertaining thereto.
(b) In determining whether to pay under any Letter of Credit, the
Issuing Bank shall have no obligation relative to the Revolving Credit Lenders
other than to confirm that any documents required to be delivered under such
Letter of Credit appear to have been delivered and that they appear to comply on
their face with the requirements of such Letter of Credit.
(c) In the event that the Issuing Bank makes any payment under
any Letter of Credit, the same shall be considered an Alternate Base Rate
Advance without further action by any Person. The Issuing Bank shall promptly
notify the Agent, which shall promptly notify each Revolving Credit Lender
thereof. Each Revolving Credit Lender shall immediately pay to the Agent for the
account of the Issuing Bank the amount of such Lender's percentage participation
of such Advance. If any Revolving Credit Lender shall not have so made its
percentage participation available to the Agent, such Lender agrees to pay
interest thereon, for each day from such date until the date such amount is paid
at the lesser of (i) the Federal Funds Effective Rate and (ii) the Highest
Lawful Rate.
(d) The Issuing Bank shall not be liable for, and the obligations
of the Company and the Revolving Credit Lenders to make payments to the Agent
for the account of the Issuing Bank with respect to Letters of Credit shall not
be subject to, any qualification or exception whatsoever, including any of the
following circumstances:
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(i) any lack of validity or enforceability of this Agreement or
any of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or other right
which the Company may have at any time against a beneficiary named in a
Letter of Credit, any transferee of any Letter of Credit, the Agent, any
Issuing Bank, any Revolving Credit Lender, or any other Person, whether
in connection with this Agreement, any Letter of Credit, the
transactions contemplated herein or any unrelated transactions
(including any underlying transaction between the Company and the
beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or any other document presented
under the Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan
Documents; or
(v) the occurrence of any Default or Event of Default.
(e) The Issuing Bank shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit, except for
errors or omissions caused by such Issuing Bank's gross negligence or willful
misconduct. IT IS THE EXPRESS INTENTION OF THE PARTIES HERETO THAT SUCH ISSUING
BANK, ITS OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS (OTHER THAN WITH RESPECT TO
ANY CLAIMS BY THE ISSUING BANK AGAINST ANY SUCH OFFICER, DIRECTOR, EMPLOYEE OR
AGENT THEREOF) SHALL BE INDEMNIFIED AND HELD HARMLESS FROM, SUBJECT TO THE SAME
TYPE OF PROTECTIONS SET FORTH IN SECTION 11.05(B), ANY ACTION TAKEN OR OMITTED
BY SUCH PERSON UNDER OR IN CONNECTION WITH ANY LETTER OF CREDIT OR ANY RELATED
DRAFT OR DOCUMENT ARISING OUT OF OR RESULTING FROM SUCH PERSON'S SOLE OR
CONTRIBUTORY NEGLIGENCE, BUT NOT FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT
OF SUCH PERSON. The Company agrees that any action taken or omitted by the
Issuing Bank under or in connection with any Letter of Credit or the related
drafts or documents, if done in accordance with the standards of care specified
in the Uniform Customs and Practice for Documentary Credits (1993 Revision),
International Chamber of Commerce, Publication No. 500 (and any subsequent
revisions thereof approved by a Congress of the International Chamber of
Commerce and adhered to by the Issuing Bank) and, to the extent not inconsistent
therewith, the Uniform Commercial Code of the State of Texas, shall not result
in any liability of the Issuing Bank to the Company.
SECTION 3.04 INCREASED COSTS. (a) Notwithstanding any other
provision herein, but subject to SECTION 11.08, if any Revolving Credit Lender
shall have determined in good faith that any change after the Execution Date of
any law, rule, regulation or guideline or the application or effectiveness of
any applicable law or regulation or any change after the Execution Date in the
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interpretation or administration thereof, or compliance by any Revolving Credit
Lender (or any lending office of such Lender) with any applicable guideline or
request from any central bank or governmental authority (whether or not having
the force of law) issued after the Effective Date either (i) shall impose,
modify or make applicable any reserve, deposit, capital adequacy or similar
requirement against Letters of Credit issued, or participated in, by any
Revolving Credit Lender or (ii) shall impose on any Revolving Credit Lender any
other conditions affecting this Agreement or any Letter of Credit; and the
result of any of the foregoing is to increase the cost to any Revolving Credit
Lender of issuing, maintaining or participating in any Letter of Credit, or
reduce the amount received or receivable by any Revolving Credit Lender
hereunder with respect to Letters of Credit, by an amount deemed by such Lender
to be material, then, from time to time, the Company shall pay to the Agent for
the account of such Lender such additional amount or amounts as will reasonably
compensate such Lender for such increased cost or reduction by such Lender.
(b) Each Revolving Credit Lender will notify the Company through
the Agent of any event occurring after the date of this Agreement which will
entitle such Lender to compensation pursuant to subsection (a) above, as
promptly as practicable. A certificate of such Lender (i) stating that the
compensation sought to be recovered pursuant to this SECTION 3.04 is generally
being charged to other similarly situated customers and (ii) setting forth in
reasonable detail such amount or amounts as shall be necessary to compensate
such Lender as specified in subsection (a) above may be delivered to the Company
(with a copy to the Agent) and shall be conclusive absent manifest error. The
Company shall pay to the Agent for the account of such Lender the amount shown
as due on any such certificate upon demand; PROVIDED that with respect to events
occurring prior to any notice given under the SECTION 3.04(B), such Lender shall
only be entitled to recover compensation for such events occurring over a period
of 120 days.
(c) Except as expressly provided in SECTION 3.04(B), failure on
the part of any Revolving Credit Lender to demand compensation for any increased
costs or reduction in amounts received or receivable or reduction in return on
capital with respect to any Letter of Credit shall not constitute a waiver of
such Lender's rights to demand compensation for any increased costs or reduction
in amounts received or receivables or reduction in return on capital with
respect to such Letter of Credit.
SECTION 3.05 CONFLICT BETWEEN APPLICATIONS AND AGREEMENT. To the
extent that any provision of any application related to any Letter of Credit is
inconsistent with the provisions of this Agreement, the provisions of this
Agreement shall control.
ARTICLE IV
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FEES; COMMITMENTS
SECTION 4.01 FEES. (a) The Company agrees to pay to the Agent for
the account of each Revolving Credit Lender a commitment fee (the "REVOLVING
CREDIT COMMITMENT FEE") for the period from and including the Effective Date to
the Revolving Credit Maturity Date, computed for any Margin Period at a rate per
annum as follows calculated on the basis of a 360-day year as follows:
(i) during the period from the Execution Date through the
Financial Statement Delivery Date for the fiscal quarter ending December
31, 1996, one-half of one percent (1/2%) on the daily average Unutilized
Commitment of each Revolving Credit Lender,
(ii) for any period beginning on any Financial Statement
Delivery Date occurring after December 31, 1996:
(A) if the ratio of Total Debt (on the last day of
the quarter most recently ended prior to the first day of such
Margin Period) to EBITDA is less than 3.0 to 1.0, 0.375% on the
daily average Unutilized Commitment of each Revolving Credit
Lender, and
(B) if the ratio of Total Debt (on the last day of
the quarter most recently ended prior to the first day of such
Margin Period) to EBITDA is equal to or greater than 3.0 to 1.0,
or cannot be determined by the Agent because of the Company's
failure to timely deliver its financial statements, 0.50% on the
daily average Unutilized Commitment of each Revolving Credit
Lender until such ratio can be so determined.
Accrued Revolving Credit Commitment Fees shall be calculated to the day
immediately preceding each Designated Payment Date and to the date the Total
Revolving Credit Commitment is terminated. Revolving Credit Commitment Fees
shall be due and payable in arrears (i) on each Designated Payment Date
commencing on the first such date following the Execution Date and (ii) on the
Revolving Credit Maturity Date.
(b) Accrued Letter of Credit Fees shall be due and payable in
arrears (i) on each Designated Payment Date commencing on the first such date
following the Execution Date and (ii) on the Revolving Credit Maturity Date, and
shall be calculated on the basis of a 360-day year.
(c) The Company agrees to pay to the Agent, for its own account in
connection with its duties as Agent and the arrangement and syndication of this
credit facility; for the account of Chase Securities Inc., in connection with
its arrangement and syndication of the credit facility; and
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for the account of each Lender as consideration for such Lender making available
the Loans, all of such fees as have been agreed to pursuant to the Agent's
Letter.
(d) In no event shall the Fees payable under this SECTION 4.01 (to
the extent, if any, constituting interest under applicable laws) together with
all amounts constituting interest under applicable laws and payable in
connection with this Agreement, the Notes and the other Loan Documents exceed
the Highest Lawful Rate.
SECTION 4.02 VOLUNTARY REDUCTION OF TOTAL REVOLVING CREDIT
COMMITMENT. Upon at least five (5) Business Days' prior written notice to the
Agent, the Company shall have the right, without premium or penalty, to reduce
or terminate the Unutilized Commitment in part or in whole; PROVIDED, that (a)
any such reduction shall reduce proportionately the Revolving Credit Commitment
of each of the Revolving Credit Lenders and (b) any partial reduction shall be
in the amount of $5,000,000.00 or integral multiples thereof.
SECTION 4.03 MANDATORY REDUCTION OF TOTAL REVOLVING CREDIT
COMMITMENT. The Revolving Credit Commitments, if not sooner terminated, shall
terminate on the Revolving Credit Maturity Date.
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.01 CONDITIONS PRECEDENT TO THE INITIAL ADVANCE. The
obligation of each Lender to make its initial Advance to the Company is subject
to the condition that the Agent shall have received the following, each in form
and substance reasonably satisfactory to the Agent:
(a) this Agreement executed by the Company;
(b) one Revolving Credit Note for each Revolving Credit Lender,
each executed by the Company and payable to the order of said Lender in the
amount of its Revolving Credit Commitment;
(c) one Term Note A for each Term Loan A Lender, each executed by
the Company and payable to the order of said Lender in the amount of its Term
Loan A Commitment;
(d) one Term Note B for each Term Loan B Lender, each executed by
the Company and payable to the order of said Lender in the amount of its Term
Loan B Commitment;
(e) one ESOP Note for each ESOP Lender, each executed by the
Company and payable to the order of said Lender in the amount of its ESOP Loan
Commitment;
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(f) the Swing Line Note executed by the Company and payable to
the order of the Swing Line Lender in the amount of the Swing Line Commitment;
(g) the Guaranty;
(h) the Security Documents executed by the Company, the
Subsidiaries, the Parent and Holding Co., as the case may be, including all
certificates evidencing shares of stock of the Parent and the Company pledged to
the Agent for the benefit of the Lenders under the terms of any Security
Document, together with related stock powers duly executed by the Parent and
Holding Co., as the case may be;
(i) a Borrowing Base Certificate executed by an authorized
officer of Finance Corp.;
(j) a Notice of Advance with respect to the initial Advance
meeting the requirements of SECTION 2.04(A);
(k) a certificate (i) of the secretary or an assistant secretary
of each of Holding Co., the Parent, Finance Corp., and the Company and each of
their respective Subsidiaries certifying (A) true and complete copies of each of
the articles or certificate of incorporation, as amended and in effect, of such
Person, the bylaws, as amended and in effect, of such Person and the resolutions
adopted by the Board of Directors of such Person (1) authorizing the execution,
delivery and performance by such Person of the Loan Documents to which it is or
will be a party and, as to the Company, the Advances to be made hereunder, (2)
approving the forms of the Loan Documents to which it is or will be a party and
which will be delivered at or prior to the date of the initial Advance and (3)
authorizing officers of such Person to execute and deliver the Loan Documents to
which it is or will be a party and any related documents, including, any
agreement contemplated by this Agreement, and (B) the incumbency and specimen
signatures of the officers of such Person executing any documents on its behalf,
and (ii) of a Responsible Officer of the Company certifying (A) that there has
been no change in the businesses or financial condition of such Person which
would reasonably be expected to have a Material Adverse Effect and (B) that no
Default or Event of Default shall have occurred and be continuing or would
result from the initial Advance;
(l) favorable, signed opinions addressed to the Agent and the
Lenders from Bracewell & Patterson, L.L.P., counsel to Holding Co., the Parent,
Finance Corp. and the Company and their respective Subsidiaries, in form and
substance satisfactory to the Agent and its counsel;
(m) the Agent shall have received the payment for the Agent and
the Lenders, as applicable, of all Fees and expenses agreed upon by such parties
and the Company to be payable on or prior to the Execution Date;
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(n) certificates of appropriate public officials as to the
existence, good standing and qualification to do business as a foreign
corporation, as applicable, of Holding Co., the Parent, Finance Corp. and the
Company and their respective Subsidiaries in each jurisdiction in which the
ownership of their properties or the conduct of their business requires such
qualifications;
(o) the Environmental Assessment;
(p) an appraisal prepared by KPMG Peat Marwick L.L.P. of the real
property and improvements to be acquired by the Company pursuant to the Purchase
Agreement;
(q) a letter addressed to each of the Agent and the Lenders and
dated the initial Execution Date, from Murray, Devine & Co., which letter shall
support the conclusions that, after giving effect to the Purchase Agreement, the
Merger and the transaction contemplated thereby, (i) the aggregate fair value
and present fair saleable value of the Company's assets would exceed the
Company's total liabilities, including identified contingent liabilities; (ii)
the Company should be able to pay its debts as they become absolute and mature
in the ordinary course of business; and (iii) the Company does not have an
unreasonably small amount of capital to engage in its business as management has
indicated it is now conducted and is proposed to be conducted following the
consummation of the Acquisition;
(r) a copy of the letter opinion issued by Houlihan, Lokey,
Howard & Zukin to the Company pertaining to the fairness of the price to be paid
for the purchase of common stock of the Parent for the benefit of the ESOP;
(s) Landlord Lien Waivers as required by the Agent for Inventory
locations located on leasehold estates;
(t) copies of the executed Indenture evidencing the Subordinated
Debt;
(u) a copy of each opinion of counsel delivered in connection
with the Purchase Agreement either containing in the body thereof the right of
the Agent and the Lenders to rely thereon or accompanied by a letter from the
Person delivering such opinion authorizing reliance thereon by the Agent and the
Lenders;
(v) Certificates of Insurance evidencing the existence of all
insurance required to be maintained pursuant to SECTION 6.17;
(w) Updated surveys as required by the Agent for the real
property to be acquired under the Purchase Agreement located in Texas;
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(x) Mortgagees Policies of Title Insurance issued by title
companies satisfactory to the Agent, having only exceptions acceptable to the
Agent, to the Company's title to the real property located in Texas as are
satisfactory to the Agent;
(y) the original of the Parent Note;
(z) evidence of cancellation of existing debt facilities and
liens securing such facilities;
(aa) evidence satisfactory to the Agent that not less than
$73,800,000.00 in equity has been contributed to the Parent;
(bb) a copy of the executed Holding Co. indenture under which
Discount Debentures were issued; and
(cc) evidence satisfactory to the Agent that the following has
occurred concurrently with funding on the Effective Date:
(i) the Parent will purchase the stock of TOC and TPC;
(ii) after TOC has become a wholly-owned Subsidiary of the
Parent, TOC will merge into and with TPC, with TPC being the
surviving entity; and
(iii) after TOC and TPC have merged and TPC is a direct,
wholly-owned Subsidiary of the Parent, Finance Corp. will merge
into and with TPC, with TPC being the surviving entity.
The acceptance of the benefits of the initial Credit Event shall
constitute a representation and warranty by the Company to the Agent and each of
the Lenders that all of the conditions specified in this SECTION 5.01 shall have
been satisfied or waived as of that time.
SECTION 5.02 CONDITIONS PRECEDENT TO ALL CREDIT EVENTS. The
obligation of the Lenders to make any Advance is subject to the further
conditions precedent that on the date of such Credit Event:
(a) The conditions precedent set forth in SECTION 5.01 shall have
theretofore been satisfied or waived;
(b) The representations and warranties set forth in ARTICLE VI
shall be true and correct in all material respects as of, and as if such
representations and warranties were made on, the date of the proposed Advance
(unless such representation and warranty expressly relates to an earlier
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date or is no longer true and correct solely as a result of transactions not
prohibited by the Loan Documents), and the Company shall be deemed to have
certified to the Agent and the Lenders that such representations and warranties
are true and correct in all material respects by submitting a Notice of Advance;
(c) The Company shall have complied with the provisions of
SECTION 2.04 or SECTION 3.02, as applicable;
(d) No Default or Event of Default shall have occurred and be
continuing or would result from such Credit Event;
(e) No Material Adverse Effect shall have occurred since the
delivery of the most recent financials; and
(f) The Agent shall have received such other consents, approvals,
opinions or documents as the Agent may reasonably request.
The acceptance of the benefits of each such Credit Event shall
constitute a representation and warranty by the Company to the Agent and each of
the Lenders that all of the conditions specified in this SECTION 5.02 above
exist as of that time.
SECTION 5.03 DELIVERY OF DOCUMENTS. All of the Notes, Security
Documents, certificates and legal opinions referred to in this ARTICLE V, unless
otherwise specified, shall be delivered to the Agent for the account of each of
the Lenders and, except for the Notes, if requested by the Agent in sufficient
copies for each of the Lenders and shall be reasonably satisfactory in form and
substance to the Agent. Any Lender may request in writing to the Agent and the
Company a copy of any other document or paper referred to in this ARTICLE V and
the Company will thereafter provide same to such Lender.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement and
to make the Advances provided for herein, the Company for itself, Holding Co.,
the Parent and each of its Subsidiaries makes, on or as of the occurrence of
each such Credit Event (except to the extent such representations or warranties
relate to an earlier date or are no longer true and correct in all material
respects solely as a result of transactions not prohibited by the Loan
Documents), the following representations and warranties to the Agent and the
Lenders:
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SECTION 6.01 ORGANIZATION AND QUALIFICATION. Each Loan Party (a)
is a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization, (b) has the
corporate power to own its property and to carry on its business as now
conducted and (c) is duly qualified as a foreign corporation to do business and
is in good standing, in each case in each jurisdiction in which the failure to
be so qualified or in good standing would reasonably be expected to have a
Material Adverse Effect.
SECTION 6.02 AUTHORIZATION AND VALIDITY. Each Loan Party has the
corporate power and authority to execute, deliver and perform its obligations
hereunder and under the other Loan Documents to which it is a party and all such
action has been duly authorized by all necessary corporate proceedings on its
part. The Loan Documents to which each Loan Party is a party have been duly and
validly executed and delivered by such Loan Party and constitute valid and
legally binding agreements of such Loan Party enforceable in accordance with the
respective terms thereof, except, in each case, as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws relating to or affecting the enforcement of
creditors' rights generally and general principles of equity.
SECTION 6.03 GOVERNMENTAL CONSENTS. No authorization, consent,
approval, license or exemption (other than such exemptions that exist under
applicable law, that are permitted, or that have been obtained) of any Person or
filing or registration with any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, is necessary for
the valid execution, delivery or performance by any Loan Party of any Loan
Document to which it is a party or for the grant of a security interest in or
mortgage on the collateral covered by the Loan Documents, except such matters
relating to performance as would ordinarily be done in the ordinary course of
business after the Effective Date.
SECTION 6.04 CONFLICTING OR ADVERSE AGREEMENTS OR RESTRICTIONS.
No Loan Party is a party to any contract or agreement or subject to any
restriction which would reasonably be expected to have a Material Adverse
Effect. As of the Execution Date, all agreements (other than this Agreement and
the other Loan Documents and the agreements evidencing the Subordinated Debt) of
the Company and its Subsidiaries relating to the lending of money or the
issuance of letters of credit to or for the account of any party are described
hereto on SCHEDULE 6.04. Neither the execution nor delivery of the Loan
Documents nor compliance with the terms and provisions hereof or thereof will be
contrary to the provisions of, or constitute a default under (a) the charter or
bylaws of any Loan Party or (b) any applicable law or any applicable regulation,
order, writ, injunction or decree of any court or governmental instrumentality
or (c) any material agreement to which any Loan Party is a party or by which it
is bound or to which it is subject.
SECTION 6.05 TITLE TO ASSETS; LICENSES AND PERMITS. The Company
has good title to all personal property and good and indefeasible title to or a
subsisting leasehold interest in, all realty as reflected as of the Effective
Date on its books and records as being owned or leased by it
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after giving effect to the Merger, subject to no Liens, except Permitted Liens.
All of such assets are being maintained by the appropriate Person in good
working condition in accordance with industry standards. All of the real
property owned or leased by the Company as of the Effective Date is set forth on
SCHEDULE 6.05 hereto, with the applicable owner or lessee, location and real
property interest identified thereon. True, correct and complete copies of (i)
each such real property lease (and all amendments thereto) of which the Company
has possession or knowledge have been delivered to the Agent and (ii) all real
property leases (and amendments thereto) executed after the Effective Date have
been delivered to the Agent. The items of real and personal property owned by or
leased to and used by the Company constitute all of the material assets used in
the conduct of its business as presently conducted after giving effect to the
Merger, and neither this Agreement nor any other Loan Document, nor any
transaction contemplated under any such agreement, will affect any right, title
or interest of the Company in and to any of such assets in a manner that would
have or is reasonably likely to have a Material Adverse Effect. To the knowledge
of the Company there are no actual, threatened or alleged defaults of a material
nature with respect to any leases of real property under which the Company is
bound after giving effect to the Merger. After giving effect to the Merger, the
Company is current and in good standing with respect to all governmental
approvals, permits, certificates, licenses, consents and franchises necessary to
continue to conduct its business and to own or lease and operate its properties
as heretofore conducted, owned, leased or operated except where any such failure
to maintain approvals, permits, certificates, licenses, consents and franchises
would not have a Material Adverse Effect.
SECTION 6.06 LITIGATION. Except as shown on SCHEDULE 6.06 as of
the Effective Date, no proceedings before any court or governmental agency or
department are pending against any Loan Party and, to the knowledge of the
Company, none of same affect any Loan Party or have been threatened. At any time
after the Effective Date, no proceedings against or affecting any Loan Party are
pending or, to the knowledge of the Company, threatened before any court or
governmental agency or department which could reasonably be expected to have a
Material Adverse Effect.
SECTION 6.07 FINANCIAL STATEMENTS. Prior to the Execution Date,
Finance Corp. has furnished to the Lenders the audited combined balance sheet
and income statement of TOC as of May 31, 1995 and the reviewed combined
financial statements of TOC as of February 29, 1996 (such financials,
collectively, "FINANCIALS"). The Financials have been prepared in conformity
with GAAP consistently applied and present fairly, in all material respects, the
financial condition of TOC, its Subsidiaries and Affiliates as of the dates
thereof. Since May 31, 1995, there has not occurred any event which would
reasonably be expected have a Material Adverse Effect.
SECTION 6.08 NO DEFAULTS. The Company and its Subsidiaries are
not in default (a) under any material provisions of any instrument evidencing
any Indebtedness or of any agreement relating thereto in such manner as to cause
a Material Adverse Effect or (b) in any respect under or in violation of any
order, writ, injunction or decree of any court or governmental instrumentality,
in
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such manner as to cause a Material Adverse Effect or (c) under any provision of
any Material Contract, which default would reasonably be expected to have a
Material Adverse Effect.
SECTION 6.09 INVESTMENT COMPANY ACT. Each of the Company and its
Subsidiaries is not, nor are they directly or indirectly controlled by or acting
on behalf of any Person which is, an "investment company," as such term is
defined in the Investment Company Act of 1940, as amended.
SECTION 6.10 UTILITY REGULATION. Neither the Company nor any of
its respective Subsidiaries, is (i) a "holding company," or a "subsidiary
company" of a "holding company," or an "affiliate" of a "holding company," or an
"affiliate" of a "subsidiary company" of a "holding company,"or a "public
utility company" within the meaning of the Public Utility Holding Company Act of
1935 or (ii) an "electric utility" or "public utility" within the meaning of the
Federal Power Act or (iii) an "electric utility," "public utility," or "utility"
under any state law regulating public utilities.
SECTION 6.11 ERISA. (a) The Company and each ERISA Affiliate have
operated and administered each Plan and Employee Plan in compliance with all
applicable laws except for such instances of noncompliance as have not resulted
in and would not reasonably be expected to have a Material Adverse Effect.
Neither the Company nor any ERISA Affiliate has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in Section 3 of ERISA) which
would individually or in the aggregate reasonably be expected to have a Material
Adverse Effect, and no event, transaction or condition has occurred or exists
that would reasonably be expected to result in the incurrence of any such
liability by the Company or any ERISA Affiliate, or in the imposition of any
Lien on any of the rights, properties or assets of the Company or any ERISA
Affiliate, in either case pursuant to Title I or IV of ERISA or to such penalty
or excise tax provisions or to Section 401(a)(29) or 412 of the Code, other than
such liabilities or Liens as would not individually or in the aggregate
reasonably be expected to have a Material Adverse Effect.
(b) No accumulated funding deficiency (as defined in Section 412
of the Code or Section 302 of ERISA), whether or not waived, exists or is
expected to be incurred with respect to any Plan.
(c) The Company and its ERISA Affiliates have not incurred
withdrawal liabilities (and are not subject to contingent withdrawal
liabilities) under section 4201 or 4204 of ERISA in respect of Multiemployer
Plans that individually or in the aggregate would reasonably be expected to have
a Material Adverse Effect.
(d) The expected post-retirement benefit obligation (determined as
of the last day of the Company's most recently ended fiscal year in accordance
with Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated
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by section 4980B of the Code) of the Company and its Subsidiaries would not
reasonably be expected to have a Material Adverse Effect.
SECTION 6.12 ENVIRONMENTAL MATTERS. Except as disclosed on
SCHEDULE 6.12, the Company and its Subsidiaries (a) possess all environmental,
health and safety licenses, permits, authorizations, registrations, approvals
and similar rights necessary under Environmental Laws for the Company and its
Subsidiaries to conduct their operations as now being conducted, except where
failure to have such licenses, permits, authorizations, registrations,
approvals, and similar rights would not reasonably be expected to have a
Material Adverse Effect, and (b) each of such licenses, permits, authorizations,
registrations, approvals and similar rights is valid and subsisting, in full
force and effect and enforceable by the Company and its Subsidiaries, and the
Company and its Subsidiaries are in compliance with all terms, conditions or
other provisions of such permits, authorizations, registrations, approvals and
similar rights except for such failure or noncompliance that, individually or in
the aggregate for the Company and its Subsidiaries, would not reasonably be
expected to have a Material Adverse Effect. Except as disclosed on SCHEDULE
6.12, neither the Company nor any Subsidiary has received any written notices of
any violation of, noncompliance with, or remedial obligation under, any
Environmental Laws (which violation, non-compliance, or remedial obligation has
not been cured or would not reasonably be expected to have a Material Adverse
Effect) and there are no writs, injunctions, decrees, orders or judgments
outstanding under the Environmental Laws, or lawsuits, claims, proceedings, or,
to the knowledge of the Company, investigations or inquiries pending or
threatened under Environmental Laws, relating to the ownership, use, condition,
maintenance or operation of, or conduct of business related to, any property
owned, leased or operated by the Company and its Subsidiaries or other assets of
the Company and its Subsidiaries other than those violations, instances of
noncompliance, obligations, writs, injunctions, decrees, orders, judgments,
lawsuits, claims, proceedings, investigations or inquiries that, individually or
in the aggregate for the Company and its Subsidiaries, would not reasonably be
expected to have a Material Adverse Effect. There are no obligations,
undertakings or liabilities arising out of or relating to Environmental Laws
which the Company and its Subsidiaries have agreed to, assumed or retained, or
by which the Company and its Subsidiaries are adversely affected, by contract or
otherwise, except such obligations, undertakings or liabilities as would not
reasonably be expected to have a Material Adverse Effect. Except as disclosed on
SCHEDULE 6.12, the Company and its Subsidiaries have not received a written
notice or claim to the effect that any of them are or may be liable to any other
Person as the result of a Release or threatened Release of a Hazardous Material,
except such notice or claim that would not reasonably be expected to have a
Material Adverse Effect.
SECTION 6.13 PURPOSE OF LOANS. (a) The proceeds of the Advances of
the Term Loan A, the Term Loan B and approximately $500,000.00 of the Revolving
Credit Loans will be used (i) by Finance Corp. to fund a Loan to the Parent to
be used by the Parent solely to finance the purchase of the stock of TOC and TPC
pursuant to the Purchase Agreement (the "ACQUISITION") and to pay certain
transaction expenses incurred in connection with the Acquisition, and (ii) by
the
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Company for general corporate purposes. The proceeds of the ESOP Loan will be
loaned by the Company to the ESOP to enable the ESOP to purchase Holding Co.
common stock.
(b) None of the proceeds of any Advance will be used directly or
indirectly for the purpose of purchasing or carrying any "margin stock" within
the meaning of Regulation U (herein called "margin stock") or for the purpose of
reducing or retiring any indebtedness which was originally incurred to purchase
or carry margin stock, or for any other purpose which might constitute this
transaction as a "purpose credit" within the meaning of Regulation U. Neither
the Company nor any agent acting on its behalf has taken or will take any action
which might cause this Agreement or any other Loan Document to violate, or
involve the Lenders in a violation of, Regulation G, Regulation U, Regulation X,
or any other regulation of the Board of Governors or to violate the Exchange
Act.
SECTION 6.14 SUBSIDIARIES. Except as disclosed on SCHEDULE 6.14,
on the Effective Date or as disclosed in writing to the Agent, the Company does
not have any Subsidiaries and is not a party to any joint venture, partnership
or similar organization.
SECTION 6.15 SOLVENCY. After giving effect to the initial Advance
hereunder, the Merger, and all other Indebtedness of the Company at the time of
such Advance, (i) the fair value and present fair saleable value of the
Company's assets exceeds the Company's stated liabilities and identified
contingent liabilities; (ii) the Company is able to pay its debts as they become
due; and (iii) the Company has sufficient capital to engage in its business as
management has indicated it is now conducted and is proposed to be conducted
following the consummation of the Acquisition.
SECTION 6.16 ACCURACY OF INFORMATION. Neither this Agreement nor
any other document, certificate, statement or other factual information
(excluding projections), taken as a whole, furnished in writing to the Agent or
any Lender by or on behalf of the Company or any of its Subsidiaries in
connection with this Agreement or any transaction contemplated hereby, taken as
a whole, contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein and
therein not misleading. The financial information with respect to the Company's
projections, copies of which have been furnished to each Lender prior to the
Execution Date, were prepared in good faith on the basis of the assumptions
stated therein, which assumptions were believed by the Company to be reasonable
in all material respects at the time made.
SECTION 6.17 INSURANCE. The Company and its Subsidiaries maintain
insurance of such types as is usually carried by corporations of established
reputation engaged in the same or similar businesses and similarly situated with
financially sound, responsible and reputable insurance companies or associations
(or, as to workers' compensation or similar insurance, with an insurance fund or
by self-insurance authorized by the jurisdiction in which its operations are
carried on) and in such amounts (and with co-insurance and deductibles) as such
insurance is usually carried by
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corporations of established reputation and engaged in the same or similar
businesses and similarly situated, but in any event, with respect to
improvements to real property and tangible personal property (assuming the
subject improvements are in fact replaced or restored), in amounts in excess of
the Loans. Neither the Company nor its Subsidiaries maintains any formalized
self-insurance program with respect to its assets or operations or material
risks with respect thereto in excess of $1,000,000.00 in the aggregate.
SECTION 6.18 INDEBTEDNESS AND CONTINGENT LIABILITIES. As of the
Effective Date, the Company does not have any outstanding Indebtedness
(excluding the Loans and the Subordinated Debt) or material contractually
assumed contingent liabilities.
SECTION 6.19 COMPLIANCE WITH LAWS. The Company and its
Subsidiaries are in compliance with all of the following, (except as to ERISA
and Environmental Laws, only to the extent required under SECTIONS 6.11 AND
6.12, respectively) as applicable in respect of the conduct of their respective
businesses and the ownership of their respective properties: all statutes,
material regulations and material orders of, and all restrictions imposed by all
governmental bodies, except any failure to comply that would not reasonably be
expected to have a Material Adverse Effect.
SECTION 6.20 SECURITY INTERESTS. The Security Documents create
valid Liens in all of the collateral described therein in favor of the Agent for
the benefit of the Lenders securing the Obligations and constitute (subject to
(i) the filing after the Effective Date of financing statements and assignments
of patents and trademarks delivered to the Agent on the Execution Date and
thereafter from time to time and (ii) delivery of any collateral after the
Effective Date as provided herein or any other Loan Document) perfected first
priority Liens (other than Permitted Liens) in substantially all of such
collateral described therein subject to no Liens other than Permitted Liens
(other than titled equipment, rolling stock and patents, trademarks, copyrights
and similar items existing or issued outside of the United States).
SECTION 6.21 MATERIAL CONTRACTS. (a) As of the Execution Date, the
Material Contracts have been duly executed and delivered by, and constitute the
legal, valid and binding obligation of the Company and to its knowledge all
other parties thereto, enforceable against such parties in accordance with its
terms, (i) are in full force and effect and (ii) except as disclosed to the
Agent, have not been amended or modified in any material respect.
(b) All consents required under the Material Contracts in
connection with (i) the Merger and (ii) the Security Documents have been
obtained by the Company.
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ARTICLE VII
AFFIRMATIVE COVENANTS
The Company covenants and agrees that on and after the date hereof
and until the Notes are paid in full and the Total Commitment has terminated:
SECTION 7.01 INFORMATION COVENANTS. Except for those items
described below in SECTIONS 7.01(F), (H) AND (I) which will be furnished by the
Company to the Agent, the Company will furnish or cause to be furnished to each
Lender:
(a) As soon as available, and in any event within thirty (30) days
after each month-end and forty-five (45) days after the close of each of the
first three fiscal quarters in each fiscal year of the Company, the consolidated
monthly and consolidated quarterly unaudited balance sheets of the Company and
its Subsidiaries as of the end of such periods and the related consolidated (and
consolidating for quarter-end periods) unaudited statements of income and cash
flows for such periods, setting forth, in each case, commencing on the Financial
Statement Delivery Date after the first anniversary of this Agreement,
comparative figures for the related periods in the prior fiscal year and,
commencing fiscal year 1998 on a quarterly basis, for the budget delivered
pursuant to subsection (h) below, all of which shall be certified by the chief
financial officer or chief executive officer of the Company or any Responsible
Officer as fairly presenting in all material respects, the financial position of
the Company as of the end of such period and the results of its operations for
the period then ended in accordance with GAAP, subject to changes resulting from
normal year-end audit adjustments; and
(b) As soon as available, and in any event within ninety (90) days
after the close of each fiscal year of the Company, the audited consolidated and
unaudited consolidating balance sheet of the Company and its Subsidiaries as at
the end of such fiscal year and the related audited statements of income and
audited cash flows for such fiscal year, setting forth, in each case,
comparative figures for the preceding fiscal year and (i) in the case of such
consolidated financials certified by Deloitte & Touche L.L.P. or other
independent certified public accountants of recognized national standing, whose
report shall be without limitation as to the scope of the audit, unqualified and
otherwise reasonably satisfactory in substance to the Majority Lenders and (ii)
in the case of such consolidating financials certified as set forth in SECTION
7.01(A) above.
(c) Promptly after any Responsible Officer of the Company obtains
knowledge thereof, notice of:
(i) any material violation of, noncompliance with, or remedial
obligations under, Environmental Laws,
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(ii) any material Release or threatened material Release of
Hazardous Materials affecting any property owned, leased or operated
by the Company or its Subsidiaries,
(iii) the existence of any event or condition which constitutes a
Default or an Event of Default,
(iv) any material violation of public health or welfare laws or
regulations,
(v) the filing of any tax or other governmental Liens,
(vi) the creation of any Subsidiary,
(vii) any Person having given any written notice to the Company or
taken any other action with respect to a claimed default or event of
default under any Material Contract or under any other instrument or
agreements, in each case which would reasonably be expected to have a
Material Adverse Effect,
(viii) the institution of any litigation in which the damages
claimed are in excess of $5,000,000.00, and
(ix) any other condition or event which, in the opinion of
management of the Company, would reasonably be expected to have a
Material Adverse Effect,
which notice shall specify the nature and period of existence thereof and
specifying the notice given or action taken by such Person and the nature of any
such claimed default, event or condition and, in the case of an Event of Default
or Default, what action has been taken, is being taken or is proposed to be
taken with respect thereto.
(d) On any Financial Statement Delivery Date, a certificate of a
Responsible Officer to the effect that no Default or Event of Default exists or,
if any Default or Event of Default does exist, specifying the nature and extent
thereof and the action that is being taken or that is proposed to be taken with
respect thereto, which certificate shall set forth the calculations required to
establish whether the Company was in compliance with the provisions of SECTION
8.13 as at the end of such fiscal period or year, as the case may be.
(e) As soon as available and in any event within fifteen (15)
Business Days after the end of each month commencing July, 1996, a Borrowing
Base Certificate and an aging of Receivables in form and substance reasonably
satisfactory to the Agent.
(f) Upon request by the Agent any existing environmental report,
study or audit of the Company's or its Subsidiaries' procedures and policies,
assets and operations in respect of
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Environmental Laws as the Agent may reasonably request; PROVIDED that such
existing report, study or audit is in the possession of the Company or its
Subsidiaries or, if not in their possession, is reasonably obtainable from a
third party having possession and subject to such conditions and requirements as
the Company or its Subsidiaries may reasonably impose to protect legal
privilege, provided that such conditions or requirements may not extend to
withholding information pertaining to factual circumstances or conditions that
the Company would otherwise be required to disclose under this Agreement.
(g) Promptly upon receipt thereof, a copy of any report or
management letter submitted to the Company or its Subsidiaries by its
independent accountants in connection with any regular or special audit of the
Company's or its Subsidiaries' records.
(h) Within sixty (60) days after the start of each fiscal year of
the Company beginning with fiscal year 1998, a financial plan and budget of the
Company and its Subsidiaries for such fiscal year prepared by the Company in its
ordinary course of business, which financial plan and budget shall include a
balance sheet and related statements of income and cash flow for such fiscal
year and the succeeding four fiscal years.
(i) From time to time and with reasonable promptness, such other
information or documents as the Agent or any Lender through the Agent may
reasonably request.
(j) Promptly upon filing, a copy of any Company Current Report
Form 8-K filed with the Securities and Exchange Commission (or any governmental
body or agency succeeding to the functions of the Securities and Exchange
Commission).
(k) Promptly upon consummation thereof, notice of the sale of any
Other Asset.
SECTION 7.02 BOOKS, RECORDS AND INSPECTIONS. The Company and its
Subsidiaries will maintain corporate books and financial records, and will
permit, or cause to be permitted, any Person designated by the Agent, and after
the occurrence and during the continuance of an Event of Default, any Person
designated by any Lender, to visit and inspect any of the properties of the
Company, to examine such corporate books and financial records of the Company
and to make copies thereof or extracts therefrom and to discuss the affairs,
finances and accounts of any such corporations with the officers, employees and
agents of the Company and its Subsidiaries, with their independent public
accountants, all at such reasonable times and upon reasonable notice and as
often as the Agent may reasonably request. Upon the occurrence and during the
continuance of an Event of Default, any Person designated by the Agent may
request that such independent public accountants obtain Receivable confirmation
reports from account receivable debtors of the Company and its Subsidiaries.
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SECTION 7.03 INSURANCE AND MAINTENANCE OF PROPERTIES. (a) The
Company will and will cause its Subsidiaries to keep reasonably adequately
insured by financially sound and reputable insurers all of its material
property, which is of a character, and in amounts and against such risks,
usually and reasonably insured by similar Persons engaged in the same or similar
businesses, including, without limitation, insurance against fire, casualty,
business interruption and any other hazards normally insured against. The
Company will at all times maintain and will cause its Subsidiaries to maintain
insurance against its liability for injury to Persons or property, which
insurance shall be by financially sound and reputable insurers and in such
amounts and form as are customary for corporations of established reputation
engaged in the same or a similar business and owning and operating similar
properties, and shall annually provide the Agent a listing of all such insurance
and such other certificates and other evidence thereof, as the Agent shall
reasonably request. A listing of all policies existing on the Execution Date
(including policy limits) of the Company and its Subsidiaries is attached hereto
as SCHEDULE 7.03. The Company shall obtain and cause its Subsidiaries to obtain,
all such endorsements as are available to such policies showing the Agent as an
additional insured, or, at the Agent's option, a co-loss payee, thereunder. In
the event that any improvements are located on any real property of the Company
or any Subsidiary designated as "flood prone" or a "flood risk area," as defined
by the Flood Disaster Protection Act of 1973 (42 U.S.C. ss. 4121), then the
Company or such Subsidiary shall maintain flood insurance in an amount required
by the National Flood Insurance Program on such improvements and shall comply
with all additional requirements of the National Flood Insurance Program as set
forth therein. All policies of insurance required by the terms of this Agreement
or any Security Document shall provide that at least 15 days' prior written
notice be given to the Agent of any termination, cancellation, reduction or
other material modification of such insurance.
(b) The Company will cause all of its and its Subsidiaries'
properties used or useful in the conduct of their respective businesses to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and will cause to be made all reasonably necessary
repairs, renewals and replacements thereof, all as in the reasonable judgment of
the Company may be reasonably necessary so that the business carried on in
connection therewith may be properly conducted at all times.
SECTION 7.04 PAYMENT OF TAXES. The Company will pay and discharge
and will cause its Subsidiaries to pay and discharge all material taxes,
assessments and governmental charges or levies imposed upon them or upon their
respective incomes or profits, or upon any properties belonging to any of them,
prior to the date on which penalties attach thereto, except for such amounts
that are being contested in good faith and by appropriate actions and for which
appropriate reserves have been made on the books of such entity in accordance
with GAAP.
SECTION 7.05 CORPORATE EXISTENCE. The Company will do all things
necessary and will cause its Subsidiaries to do all things necessary to (i)
except as permitted under SECTION 8.02, preserve and keep in full force and
effect their respective corporate existences and (ii) maintain all
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rights, franchise agreements, business contracts, patents, trademarks, licenses
and Material Contracts as may be required so that the business carried on in
connection therewith may be properly conducted at all times, except for any
failure to so maintain that would not reasonably be expected to have a Material
Adverse Effect.
SECTION 7.06 COMPLIANCE WITH STATUTES. The Company will comply
with and will cause its Subsidiaries to comply with all applicable statutes
(except as to ERISA and Environmental Laws, only to the extent required under
Sections 6.11 and 6.12, respectively), regulations and orders of, and all
applicable restrictions imposed by, all governmental bodies, domestic or
foreign, except for any failure to so comply that would not reasonably be
expected to have a Material Adverse Effect.
SECTION 7.07 ERISA. Immediately after any Responsible Officer of
the Company knows or has reason to know any of the following items are true, the
Company will deliver or cause to be delivered to the Lenders a certificate of
the chief financial officer of the Company setting forth details as to such
occurrence and such action, if any, the Company or any ERISA Affiliate is
required or proposes to take, together with any notices required or proposed to
be given to or filed with or by the Company or its ERISA Affiliate with respect
thereto: that a Reportable Event has occurred or that an application may be or
has been made to the Secretary of the Treasury for a waiver or modification of
the minimum funding standard; that a Multiemployer Plan has been or may be
terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA; that any required contribution which is material to a Plan, Multiemployer
Plan or Employee Plan has not been or may not be timely made; that proceedings
may be or have been instituted under Section 4069(a) of ERISA to impose
liability on the Company or an ERISA Affiliate or under Section 4042 of ERISA to
terminate a Plan or appoint a trustee to administer a Plan; that the Company or
any ERISA Affiliate has incurred or may incur any liability (including any
contingent or secondary liability) on account of the termination of or
withdrawal from a Plan or a Multiemployer Plan; and that the Company or any
ERISA Affiliate may be required to provide security to a Plan under Section
401(a)(29) of the Code; or any other condition(s) exist(s) or may occur with
respect to one or more Plans, Employee Plans and/or Multiemployer Plans which
would reasonably be expected to result, individually or in the aggregate, in a
Material Adverse Effect.
SECTION 7.08 UTILITY REGULATION. The Company will cause the
representations and warranties set forth in SECTION 6.10 hereof to be and remain
at all times true and correct.
SECTION 7.09 SUBSIDIARIES. The Company will (a) cause any Person
becoming a Subsidiary of the Company to execute in form and substance
satisfactory to the Agent a guaranty, security agreement, deed of trust and/or
other security instruments sufficient to (x) obligate such Subsidiary for
repayment of all or a portion of the Loans and (xx) pledge all or a portion of
such Subsidiaries' assets as collateral for the Loans and (b) execute, and cause
any such Subsidiary to execute, as applicable, a pledge agreement in form and
substance satisfactory to the Agent pledging
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all of its shares of capital stock of any such Subsidiary that is either a
direct Subsidiary of the Company or a direct Subsidiary of a Subsidiary.
SECTION 7.10 MATERIAL CONTRACTS. The Company will notify the Agent
of any material default under any Material Contract promptly after a Responsible
Officer obtains knowledge thereof.
ARTICLE VIII
NEGATIVE COVENANTS
The Company covenants and agrees as to itself and each of its
Subsidiaries that on and after the date hereof and until the Notes are paid in
full and the Total Commitment has terminated:
SECTION 8.01 CHANGE IN BUSINESS. The Company and its Subsidiaries
will not engage in any businesses not of the same general type as, or reasonably
related to, those conducted by the Company on the Effective Date.
SECTION 8.02 CONSOLIDATION, MERGER OR SALE OF ASSETS. Neither the
Company nor any Subsidiary will wind up, liquidate or dissolve its affairs, or
enter into any transaction of merger or consolidation, or sell, transfer or
otherwise dispose of all or any part of its property or assets (other than sales
of Inventory and surplus or obsolete assets in the ordinary course of business,
provided that any disposal does not prejudice the Lenders in any material way),
except that
(a) any Subsidiary of the Company may merge, consolidate, wind up,
liquidate or dissolve into and with the Company or any other wholly-owned
Subsidiary of the Company;
(b) the Company and its Subsidiaries may make Permitted
Investments;
(c) any Subsidiary of the Company may sell its assets to the
Company or another wholly-owned Subsidiary of the Company;
(d) sales of assets by the Company or its Subsidiaries not to
exceed $2,000,000.00 in any fiscal year;
(e) sales of any Other Assets; and
(f) the Merger.
Upon the request and at the expense of the Company in connection with any sale,
transfer or other disposition of property or assets permitted hereunder or under
any other Loan Document, and so long
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as no Default or Event of Default has occurred and is continuing, the Agent
shall upon request execute and deliver, or shall cause the secured party,
mortgage trustee or other appropriate Person to execute and deliver, to the
Company duly executed releases or partial releases, as applicable, of any Lien
pursuant to any Loan Document which it may have in such property or assets, in
form and substance reasonably satisfactory to the Agent, the secured party,
mortgage trustee or other appropriate Person, as the case may be, and the
Company.
SECTION 8.03 INDEBTEDNESS. The Company will not, and will not
permit any Subsidiary to, create, incur, assume or permit to exist any
Indebtedness except:
(a) Indebtedness existing hereunder;
(b) Indebtedness evidenced by the Subordinated Debt or any other
Indebtedness of the Company or any of its Subsidiaries which is expressly and
validly subordinated to the Obligations pursuant to terms, conditions and
amounts of such other subordinated Indebtedness which are satisfactory to the
Lenders;
(c) Capitalized Lease Obligations and purchase money financing
not to exceed $10,000,000.00 in the aggregate outstanding at any time;
(d) Indebtedness relating to loans or advances permitted under
SECTION 8.05; and
(e) Indebtedness that constitutes "mark to market" exposure
resulting from any Derivative for the purpose of hedging in the ordinary course
of business against fluctuations in interest rates, commodity prices and foreign
exchange rates;
(f) obligations under "take or pay" contracts or similar
arrangements entered into in the ordinary course of business; PROVIDED that the
Company or any of its Subsidiaries have not made payments under any such
contracts or arrangements other than payments for product received or product
the Company or any of its Subsidiaries reasonably expects it will be able to
receive within one year from the date the payment was made and the amount of all
such payments in the aggregate could not reasonably be expected to have a
Material Adverse Effect; and
(g) Indebtedness that constitutes a renewal, refinancing or
extension of any Indebtedness referred to in this SECTION 8.03; PROVIDED, that
(i) no Lien existing at the time of such renewal, refinancing or extension shall
be extended to cover any property not already subject to such Lien and (ii) the
principal amount of any Indebtedness renewed, refinanced or extended shall not
exceed the amount of such Indebtedness outstanding immediately prior to such
renewal, refinancing or extension.
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SECTION 8.04 LIENS. The Company will not, and will not permit any
Subsidiary to, create, incur, assume or suffer to exist any Lien upon or with
respect to any of its property or assets of any kind whether now owned or
hereafter acquired (nor will it covenant with any other Person not to grant such
a lien to the Agent), except in connection with the following which are
permitted liens ("PERMITTED LIENS"):
(a) Liens existing on the Execution Date and listed on SCHEDULE
8.04(A);
(b) Liens for taxes or assessments or other governmental charges
or levies, either not yet due and payable or being contested in good faith and
by appropriate actions for which adequate reserves have been established;
(c) non-consensual Liens imposed by operation of law including,
without limitation, landlord Liens for rent not yet due and payable, and Liens
for materialmen, mechanics, warehousemen, carriers, employees, workmen,
repairmen, current wages or accounts payable not yet delinquent and arising in
the ordinary course of business or being contested in good faith by appropriate
proceedings and subject to maintenance of adequate reserves;
(d) easements, rights-of-way, restrictions and other similar
Liens or imperfections to title which do not materially interfere with the
occupation, use, and enjoyment by the Company or any of its Subsidiaries of the
property or asset encumbered thereby or materially impair the value of the
property or asset subject thereto and none of which are violated by existing or
proposed improvements or land use of such property or asset;
(e) Liens arising under worker's compensation laws, unemployment
insurance laws or similar legislation;
(f) Liens in favor of the Agent pursuant to the Loan Documents;
(g) Liens securing Indebtedness permitted by SECTION 8.03(C);
(h) Liens of any judgments or orders not constituting an Event of
Default;
(i) any right of set off relating to Indebtedness or Investment
that are not prohibited by this Agreement; and
(j) any renewal, extension or replacement of any Lien referred to
in subparagraph (a) above; PROVIDED, that no Lien arising or existing as a
result of such extension, renewal or replacement shall be extended to cover any
property not theretofore subject to the Lien being extended, renewed or replaced
and PROVIDED FURTHER that the principal amount of the Indebtedness
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secured thereby shall not exceed the principal amount of the Indebtedness so
secured at the time of such extension, renewal or replacement.
SECTION 8.05 INVESTMENTS. The Company will not, and will not
permit any Subsidiary to, directly or indirectly, make or own any Investment in
any Person, except:
(a) the Company and its Subsidiaries may make and own Permitted
Investments;
(b) the Company and its Subsidiaries may continue to own
Investments owned by such Person on the Execution Date as set forth on SCHEDULE
8.05(B);
(c) loans by any Subsidiary of the Company to the Company or
loans by the Company to any Subsidiary in the ordinary course of business not in
excess of $1,000,000.00 in the aggregate;
(d) loans by the Company to the ESOP to purchase shares of the
Parent in the aggregate at any time outstanding not in excess of $10,000,000.00;
(e) Investments arising out of loans and advances for expenses,
travel per diem and similar items in the ordinary course of business to
officers, directors, and employees not to exceed $200,000.00 in the aggregate
outstanding at any time;
(f) other Investments in an amount not to exceed $500,000.00
outstanding at any time; and
(g) Investments reasonably related to the Company's business as
currently conducted from (i) Excess Cash Flow not required to be paid to the
Lenders or (ii) Excess Sales Proceeds.
SECTION 8.06 GUARANTIES. The Company will not, and will not
permit any Subsidiary to, directly or indirectly, guarantee the Indebtedness of
any Person, except:
(a) endorsements of instruments for deposit or collection in the
ordinary course of business;
(b) guaranties in favor of the Agent or the Lenders evidenced by
a Loan Document; and
(c) guaranties by the Company of any obligations of its
Subsidiaries incurred in the ordinary course of business and not prohibited
hereby.
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SECTION 8.07 RESTRICTED PAYMENTS. The Company will not, and will
not permit any Subsidiary to, (a) pay any dividends or make any other
distributions, direct or indirect, on account of any shares of any class of
stock of the Company or such Subsidiary now or hereafter outstanding, except as
follows, provided that (except as to subclause (iii)) there is not then in
existence any Default or Event of Default (i) dividends payable solely in shares
of stock or warrants, rights or options to acquire shares of stock of the
Company or any Subsidiary, (ii) payments to the Parent not to exceed in any
fiscal year $500,000.00, (iii) payments by the Company to the Parent pursuant to
a tax sharing agreement reasonably satisfactory to the Agent between such
parties, (iv) payments by a Subsidiary of the Company to the Company or another
Subsidiary of the Company, (v) commencing fiscal year 2002, dividends or
payments by the Company to Holding Co. to be used by Holding Co. solely for
scheduled payments of interest in respect of the Discount Debentures; or (b)
redeem, retire, purchase or make any other acquisition, direct or indirect, of
any shares of any class of stock of the Company, the Parent or Holding Co. and
or of any warrants, rights or options to acquire any such shares, now or
hereafter outstanding, except as follows, provided that there is not then in
existence any Default or Event of Default (i) to the extent that the
consideration therefor consists solely of shares of stock (including warrants,
rights or options relating thereto) of the Company and (ii) payments by the
Company to the Parent or Holding Co. or payments made directly by the Company to
be used to repurchase, redeem, acquire or retire for value any capital stock of
the Parent or Holding Co. pursuant to any stockholders' agreement, management
equity subscription plan or agreement, stock option plan or agreement or the
ESOP or other employee benefit plan or agreement; PROVIDED that the aggregate
price paid, and not reimbursed, for all such repurchased, redeemed, acquired or
retired capital stock shall not exceed during any one fiscal year of the Company
the greater of (A) $1,000,000.00 or (B) the minimum amount required under the
ESOP.
SECTION 8.08 CHANGE IN ACCOUNTING. The Company will not change
its method of accounting except for (a) immaterial changes permitted by GAAP in
which the Company's auditors concur or (b) changes required by GAAP; PROVIDED
that the Company and the Agent shall negotiate in good faith, to renegotiate any
affected provision of this Agreement to reflect any such change. The Company
shall advise the Agent and the Lenders in writing promptly upon making any
material change to the extent same is not disclosed in the financial statements
required under SECTION 7.01 hereof.
SECTION 8.09 PREPAYMENT OF OTHER INDEBTEDNESS. The Company (a)
will not make any voluntary prepayments or defeasements of principal or interest
on any other Indebtedness of the Company including the Subordinated Debt
(including any redemptions prior to scheduled maturity whether voluntary or
obligatory), except for permanent reduction of Indebtedness other than the
Subordinated Debt, and (b) will not amend any material term (including interest,
payment or subordination terms) of any other Indebtedness including the
Subordinated Debt without the prior written consent of the Lenders except such
amendments of Indebtedness other than Subordinated Debt which do not make any
material term less favorable to the Company or the Lenders.
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SECTION 8.10 TRANSACTIONS WITH AFFILIATES. Other than those
transactions (a) disclosed to the Agent in writing which are to be created on or
before the Effective Date, or (b) payment of salaries, benefits, and Employee
Bonuses in the ordinary course of business, the Company will not, and will not
permit any Subsidiary to, directly or indirectly, engage in any transaction with
any Affiliate, including the purchase, sale or exchange of assets or the
rendering of any service, except transactions in the ordinary course of business
or pursuant to the reasonable requirements of its business and, in each case,
upon terms that are no less favorable than those which might be obtained in an
arm's-length transaction at the time from non-Affiliates.
SECTION 8.11 SUBSIDIARIES' STOCK. After the Effective Date, the
Company will not sell, transfer or otherwise dispose of any class of stock or
any of the voting rights of any Subsidiary of the Company, except as permitted
under SECTION 8.02.
SECTION 8.12 MATERIAL CONTRACTS. The Company will not amend,
cancel or breach any of the Material Contracts except such amendments,
cancellations or breaches as would not reasonably be expected to cause a
Material Adverse Effect.
SECTION 8.13 FINANCIAL RATIOS. For purposes of calculating the
ratios as set forth in this SECTION 8.13, at any time before June 30, 1997,
EBITDA, cash taxes, interest expense and Capital Expenditures for the applicable
periods shall be annualized.
(a) FIXED CHARGE COVERAGE RATIO. The Company will not permit at
any time the Fixed Charge Coverage Ratio to be (a) for the period from the
Execution Date to and including June 30, 1999, less than 1.05 to 1.0 and (b) at
any time after June 30, 1999, less than 1.15 to 1.0.
(b) TOTAL DEBT TO EBITDA RATIO. The Company will not permit at
any time the ratio of Total Debt to EBITDA to be (a) for the period from the
Execution Date to and including June 30, 1997, greater than 4.5 to 1.0, (b) for
the period from July 1, 1997 to and including June 30, 1998, greater than 4.0 to
1.0, (c) for the period from July 1, 1998 to and including June 30, 1999,
greater than 3.75 to 1.0, (d) for the period from July 1, 1999 to and including
June 30, 2000, greater than 3.5 to 1.0, (e) for the period from July 1, 2000 to
and including June 30, 2001, greater than 3.5 to 1.0, (f) for the period from
July 1, 2001 to and including June 30, 2002, greater than 3.0 to 1.0, (g) for
the period from July 1, 2002 to and including June 30, 2003, greater than 3.0 to
1.0, and (h) for the period from July 1, 2003 to and including June 30, 2004,
greater than 3.0 to 1.0.
(c) NET WORTH. The Company will not permit at any time Net Worth
to be less than $65,000,000.00, PLUS seventy-five percent (75%) of cumulative
net income (only if positive and without giving effect to any nonrecurring
items, extraordinary gains or losses or gains or losses from the sale of assets
or write down in the value of assets owned by the Company and its Subsidiaries)
commencing on the Execution Date and one hundred percent (100%) of proceeds of
any equity offering.
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(d) CURRENT RATIO. The Company will not permit at any time the
ratio of Current Assets to Current Liabilities to be less than 1.25 to 1.0.
SECTION 8.14 CAPITAL EXPENDITURES. (a) Except as permitted in
subclauses (b) and (c) below, the Company will not permit any Capital
Expenditures in excess of the following amounts during the following periods
(together with the amounts described in clause (c) below of this SECTION 8.14,
"SCHEDULED CAPITAL EXPENDITURES"):
Scheduled Capital
FISCAL YEAR EXPENDITURE AMOUNT
----------- ------------------
1997 $13,500,000
1998 16,000,000
1999 11,000,000
2000 8,000,000
2001 8,000,000
2002 8,000,000
2003 8,000,000
2004 8,000,000
(b) The Company and its Subsidiaries may make Capital Expenditures
to the extent of the amount of any Excess Cash Flow not required to be paid to
the Lenders during any such period and Excess Sales Proceeds.
(c) To the extent any amount of Scheduled Capital Expenditures is
not used during any single calendar year, such unexpended amount may be carried
forward and expended during the next calendar year (but not any other calendar
year); PROVIDED that during any calendar year in which such unexpended amounts
have been so carried forward, all Capital Expenditures are deemed to apply first
to the carry forward amount and then to the Scheduled Capital Expenditures for
such year.
SECTION 8.15 FISCAL YEAR. Except for a change to June 30, the
Company will not change its fiscal year end.
SECTION 8.16 SALE/LEASEBACK TRANSACTIONS. The Company will not
enter, and will not permit any Subsidiary to enter, into any arrangement with
any Person or to which such Person is a party providing for the leasing by the
Company or any of its Subsidiaries of real or personal
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property which has been or is to be sold or transferred by the Company or such
Subsidiary to such Person or to any other Person to whom funds have been or are
to be advanced by such Person on the security of such property or rental
obligations of the Company; PROVIDED that the Company or any of its Subsidiaries
may at any time enter into sale/leaseback transactions so long as the aggregate
amount of all such obligations incurred by the Company and its Subsidiaries does
not exceed $10,000,000.00 outstanding at any time.
ARTICLE IX
EVENTS OF DEFAULT AND REMEDIES
SECTION 9.01 EVENTS OF DEFAULT. The following events shall
constitute Events of Default ("EVENTS OF DEFAULT") hereunder:
(a) any installment of principal on any Note shall not be paid on
the date on which such payment is due, or any payment of interest on any Note or
any payment of any Fee shall not be paid on or before the fifth (5th) day after
such payment is due; or
(b) any representation or warranty made or, for purposes of
ARTICLE VI, deemed made by the Company or any Loan Party herein or in any of the
Loan Documents or other document, certificate or financial statement delivered
in connection with this Agreement or any other Loan Document shall prove to have
been incorrect in any material respect when made or deemed made or reaffirmed,
as the case may be; or
(c) the Company shall fail to perform or observe any duty or
covenant contained in ARTICLE VIII (other than those described in, but not
permitted by SECTION 8.04(B), (C) or (E)) or in SECTION 7.01(F), or SECTION
7.03(A) or SECTION 7.09 hereof; or
(d) the Company or any Loan Party shall fail to perform or
observe any duty or covenant contained in (i) SECTION 7.01(A), (B), (C), (D),
(E) and (H) or those described in, but not permitted by SECTION 8.04(B), (C) or
(E) and such failure is not remedied within the earlier of (i) ninety (90) days
or (ii) ten (10) days after the earlier of (x) notice of such failure by the
Agent to the Company or (xx) after a Responsible Officer of the Company or any
Subsidiary has actual knowledge thereof; and (ii) this Agreement or any Loan
Document, other than those referenced in SECTION 9.01(A), (B), (C) or clause (i)
of this SECTION 9.01(D) and such failure is not remedied within the earlier of
(i) ninety (90) days or (ii) thirty (30) days after the earlier of (x) notice of
such failure by the Agent to the Company or (xx) after a Responsible Officer of
the Company or any Subsidiary has actual knowledge thereof; or
(e) the Company or any Loan Party shall (i) fail to make (whether
as primary obligor or as guarantor or other surety) any principal payment of or
interest or premium, if any, on any instruments of Indebtedness in the aggregate
in excess of $5,000,000.00 allowed hereunder (other
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than the Notes) and such failure remains outstanding beyond any period of grace
provided with respect thereto or (ii) fail to duly observe, perform or comply
with any agreement with any Person, or any term or condition of any instrument
of Indebtedness in excess of $5,000,000.00 beyond any period of grace provided
with respect thereto, if such failure causes (unless such failure has been
waived by the holder(s) of such Indebtedness), or permits the holder(s) to
cause, such obligations to become due prior to any stated maturity; or
(f) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i) relief
in respect of the Company or any Loan Party or of a substantial part of the
property or assets of the Company or any Loan Party, under Title 11 of the
United States Code, as now or hereafter in effect, or any successor thereto (the
"BANKRUPTCY CODE"), or any other federal or state bankruptcy, insolvency,
receivership or similar law, (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Company or any
Loan Party or for a substantial part of the property or assets of the Company or
any Loan Party or (iii) the winding-up or liquidation of the Company or any Loan
Party; and such proceeding or petition shall continue undismissed for sixty (60)
days or an order or decree approving or ordering any of the foregoing shall be
entered; or
(g) the Company or any Loan Party shall (i) voluntarily commence
any proceeding or file any petition seeking relief under the Bankruptcy Code or
any other federal or state bankruptcy, insolvency, receivership or similar law,
(ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or the filing of any petition described in
clause (f) above, (iii) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for the
Company or any Loan Party or for a substantial part of the property or assets of
the Company or any Loan Party, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a
general assignment for the benefit of creditors, (vi) admit in writing its
inability or fail generally to pay its debts as they become due or (vii) take
any action for the purpose of effecting any of the foregoing; or
(h) the Company shall (i) fail to make any principal payment of or
interest or premium, if any, on the Subordinated Debt beyond any period of grace
provided with respect thereto, (ii) fail to duly observe, perform or comply with
any agreement beyond any period of grace provided with respect thereto, if such
failure is to permit the holder(s) to cause such obligations to become due prior
to any stated maturity or (iii) become obligated to redeem, repurchase or repay
all or any portion of any principal, interest or premium on the Subordinated
Debt prior to its scheduled payment; or
(i) Holding Co. shall (i) fail to make any principal payment of or
interest or premium, if any, on the Discount Debentures beyond any period of
grace provided with respect thereto, (ii) fail to duly observe, perform or
comply with any agreement beyond any period of grace provided with respect
thereto, if such failure is to permit the holder(s) to cause such obligations to
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become due prior to any stated maturity or (iii) become obligated to redeem,
repurchase or repay all or any portion of any principal, interest or premium on
the Discount Debentures prior to its scheduled payment; or
(j) a judgment or order, which with other outstanding judgments
and orders against the Company or any Loan Party equal or exceed $2,000,000.00
in the aggregate (to the extent not covered by insurance as to which the
respective insurer has acknowledged coverage), shall be entered against the
Company or any Loan Party and (i) within sixty (60) days after entry thereof
such judgment shall not have been paid or discharged or execution thereof stayed
pending appeal or, within sixty (60) days after the expiration of any such stay,
such judgment shall not have been paid or discharged or (ii) any enforcement
proceeding shall have been commenced (and not stayed) by any creditor or upon
such judgment; or
(k) if (A) (i) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part thereof or a waiver of
such standards or extension of any amortization period is sought or granted
under section 412 of the Code, (ii) a notice of intent to terminate any Plan
shall have been or is reasonably expected to be filed with the PBGC or the PBGC
shall have instituted proceedings under ERISA section 4042 to terminate or
appoint a trustee to administer any Plan or the PBGC shall have notified the
Company or any Subsidiary or any ERISA Affiliate that a Plan may become subject
to any such proceedings, (iii) any Plan shall have any Unfunded Current
Liability, (iv) the Company or any Subsidiary or any ERISA Affiliate shall have
incurred or is reasonably expected to incur any liability pursuant to Title I or
IV of ERISA or the penalty or excise tax provisions of the Code relating to
employee benefit plans, (v) the Company or any Subsidiary or any ERISA Affiliate
withdraws from any Multiemployer Plan, (vi) the Company or any Subsidiary or any
ERISA Affiliate fails to make any contribution due, or payment to or with
respect to, any employee benefit plan, or (vii) the Company or any Subsidiary or
any ERISA Affiliate establishes or amends any employee welfare benefit plan that
provides post-employment welfare benefits in a manner that would increase the
liability of the Company or any Subsidiary or any ERISA Affiliate thereunder,
and (B) any such event or events described in clauses (i) through (vii) above,
either individually or together with any other such event or events, would
reasonably be expected to have a Material Adverse Effect; or
(l) after the Effective Date, the occurrence of any Change of
Control; or
(m) the Obligations shall cease, except as permitted hereby,
being secured by substantially all of the assets of the Company.
SECTION 9.02 PRIMARY REMEDIES. In any such event, and at any time
after the occurrence of any of the above described events, the Agent shall, if
requested by the Majority Lenders, by written notice to the Company (a "NOTICE
OF DEFAULT") take any or all of the following actions (without prejudice to the
rights of any Lender to enforce any other rights it may have against
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the Company, PROVIDED that, if an Event of Default specified in SECTION 9.01(F)
or SECTION 9.01(G) shall occur, the following shall occur automatically without
the giving of any Notice of Default): (a) declare the Total Commitment
terminated, whereupon the Total Commitment shall forthwith terminate immediately
and any Revolving Credit Commitment Fee shall forthwith become due and payable
without any other notice of any kind; (b) declare the principal of and any
accrued and unpaid interest in respect of all Advances, and all obligations
owing hereunder, to be, whereupon the same shall become, forthwith due and
payable without presentment, demand, notice of demand or of dishonor and
non-payment, protest, notice of protest, notice of intent to accelerate,
declaration or notice of acceleration or any other notice of any kind, all of
which are hereby waived by the Company; and (c) exercise any rights or remedies
under any of the Loan Documents.
SECTION 9.03 OTHER REMEDIES. Upon the occurrence and during the
continuance of any Event of Default, the Agent may proceed to protect and
enforce its and the Lenders' rights, either by suit in equity or by action at
law or both, whether for the specific performance of any covenant or agreement
contained in this Agreement or in any other Loan Document or in aid of the
exercise of any power granted in this Agreement or in any other Loan Document;
or may proceed to enforce the payment of all amounts owing to the Lenders under
the Loan Documents and any accrued and unpaid interest thereon in the manner set
forth herein or therein; it being intended that no remedy conferred herein or in
any of the other Loan Documents is to be exclusive of any other remedy, and each
and every remedy contained herein or in any other Loan Document shall be
cumulative and shall be in addition to every other remedy given hereunder and
under the other Loan Documents or now or hereafter existing at law or in equity
or by statute or otherwise.
ARTICLE X
THE AGENT
SECTION 10.01 AUTHORIZATION AND ACTION. Each Lender hereby
irrevocably appoints and authorizes the Agent to act on its behalf and to
exercise such powers under this Agreement and the other Loan Documents as are
specifically delegated to or required of the Agent by the terms hereof, together
with such powers as are reasonably incidental thereto. The Agent may perform any
of its duties hereunder by or through its agents and employees. The duties of
the Agent shall be mechanical and administrative in nature; the Agent shall not
have by reason of this Agreement or any other Loan Document a fiduciary
relationship in respect of any Lender; and nothing in this Agreement or any
other Loan Document, expressed or implied, is intended to, or shall be so
construed as to, impose upon the Agent any obligations in respect of this
Agreement or any other Loan Document except as expressly set forth herein or
therein. As to any matters not expressly provided for by this Agreement, the
Notes or the other Loan Documents (including enforcement or collection of the
Notes), the Agent shall not be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Majority Lenders, and such instructions shall be
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binding upon the Lenders and all holders of Notes and the Obligations; PROVIDED,
that the Agent shall not be required to take any action which exposes the Agent
to personal liability or which is contrary to this Agreement or applicable law.
SECTION 10.02 AGENT'S RELIANCE. (a) Neither the Agent nor any of
its directors, officers, agents or employees shall be liable to the Lenders for
any action taken or omitted to be taken by it or them under or in connection
with this Agreement, the Notes or any of the other Loan Documents (i) with the
consent or at the request of the Majority Lenders or (ii) in the absence of its
or their own gross negligence or willful misconduct (IT BEING THE EXPRESS
INTENTION OF THE PARTIES HERETO THAT THE AGENT AND ITS DIRECTORS, OFFICERS,
AGENTS AND EMPLOYEES SHALL HAVE NO LIABILITY FOR ACTIONS AND OMISSIONS UNDER
THIS SECTION 10.02 RESULTING FROM THEIR SOLE ORDINARY OR CONTRIBUTORY
NEGLIGENCE).
(b) Without limitation of the generality of the foregoing, the
Agent: (i) may treat the payee of each Note and the Obligations as the holder
thereof until the Agent receives written notice of the assignment or transfer
thereof signed by such payee and in form satisfactory to the Agent; (ii) may
consult with legal counsel (including counsel for the Company), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel, accountants or experts; (iii) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations made in or in connection with this
Agreement, any Note or any other Loan Document; (iv) except as otherwise
expressly provided herein, shall not have any duty to ascertain or to inquire as
to the performance or observance of any of the terms, covenants or conditions of
this Agreement, any Note or any other Loan Document or to inspect the property
(including the books and records) of the Company; (v) shall not be responsible
to any Lender for the due execution, legality, validity, enforceability,
collectibility, genuineness, sufficiency or value of this Agreement, any Note,
any other Loan Document or any other instrument or document furnished pursuant
hereto or thereto; (vi) shall not be responsible to any Lender for the
perfection or priority of any Lien securing the Obligations; and (vii) shall
incur no liability under or in respect of this Agreement, any Note or any other
Loan Document by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telegram, telecopier, cable or telex)
reasonably believed by it to be genuine and signed or sent by the proper party
or parties.
SECTION 10.03 AGENT AND AFFILIATES; TCB AND AFFILIATES. Without
limiting the right of any other Lender to engage in any business transactions
with the Company or any of its Affiliates, with respect to their commitments,
the Loans made by them and the Notes issued to them, TCB and each other Lender
who may become the Agent shall have the same rights and powers under this
Agreement and its Notes as any other Lender and may exercise the same as though
it was not the Agent; and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated, include TCB and any such other Lender, in their individual
capacities. TCB, each other Person who becomes the Agent and their respective
Affiliates may be engaged in, or may hereafter engage in, one or more
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loans, letters of credit, leasings or other financing activity not the subject
of this Agreement (collectively, the "OTHER FINANCINGS") with the Company or any
of its Affiliates, or may act as trustee on behalf of, or depositary for, or
otherwise engage in other business transactions with the Company or any of its
Affiliates (all Other Financings and other such business transactions being
collectively, the "OTHER ACTIVITIES") with no responsibility to account therefor
to the Lenders. Without limiting the rights and remedies of the Lenders
specifically set forth herein, no other Lender by virtue of being a Lender
hereunder shall have any interest in (a) any Other Activities, (b) any present
or future guaranty by or for the account of the Company not contemplated or
included herein, (c) any present or future offset exercised by the Agent in
respect of any such Other Activities, (d) any present or future property taken
as security for any such Other Activities or (e) any property now or hereafter
in the possession or control of the Agent which may be or become security for
the obligations of the Company hereunder and under the Notes by reason of the
general description of indebtedness secured, or of property contained in any
other agreements, documents or instruments related to such Other Activities;
PROVIDED, HOWEVER, that if any payment in respect of such guaranties or such
property or the proceeds thereof shall be applied to reduction of the
Obligations evidenced hereunder and by the Notes, then each Lender shall be
entitled to share in such application according to its pro rata portion of such
Obligations.
SECTION 10.04 LENDER CREDIT DECISION. Each Lender acknowledges and
agrees that it has, independently and without reliance upon the Agent or any
other Lender and based on the financial statements referred to in SECTION 7.01
and such other documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges and agrees 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 credit decisions in
taking or not taking action under this Agreement and the other Loan Documents.
SECTION 10.05 AGENT'S INDEMNITY. (a) The Agent shall not be
required, insofar as the Lenders are concerned, to take any action hereunder or
to prosecute or defend any suit in respect of this Agreement, the Notes or any
other Loan Document unless indemnified to the Agent's satisfaction by the
Lenders against loss, cost, liability and expense. If any indemnity furnished to
the Agent shall become impaired, it may call for additional indemnity and cease
to do the acts indemnified against until such additional indemnity is given. In
addition, the Lenders agree to indemnify the Agent (to the extent not reimbursed
by the Company), ratably according to the respective aggregate principal amounts
of the Notes then held by each of them (or if no Notes are at the time
outstanding, ratably according to the respective amounts of the Total
Commitment), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by, or
asserted against the Agent in any way relating to or arising out of this
Agreement or any action taken or omitted by the Agent (in such capacity) under
this Agreement, the Notes and the other Loan Documents. Without limitation of
the foregoing, each Lender agrees to reimburse the Agent
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promptly upon demand for its ratable share of any out-of-pocket expenses
(including reasonable counsel fees) incurred by the Agent in connection with the
preparation, execution, administration, or enforcement of, or legal advice in
respect of rights or responsibilities under, this Agreement, the Notes and the
other Loan Documents to the extent that the Agent is not reimbursed for such
expenses by the Company. The provisions of this SECTION 10.05(A) shall survive
the termination of this Agreement, the payment of the Obligations and/or the
assignment of any of the Notes.
(b) Notwithstanding the foregoing, no Lender shall be liable under
this SECTION 10.05(B) to the Agent for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements due to the Agent resulting from the Agent's gross
negligence or willful misconduct. EACH LENDER AGREES, HOWEVER, THAT IT EXPRESSLY
INTENDS, UNDER THIS SECTION 10.05(B), TO INDEMNIFY THE AGENT RATABLY AS
AFORESAID FOR ALL SUCH LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES,
ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES AND DISBURSEMENTS ARISING OUT OF OR
RESULTING FROM THE AGENT'S SOLE ORDINARY OR CONTRIBUTORY NEGLIGENCE.
SECTION 10.06 SUCCESSOR AGENT. The Agent may resign at any time by
giving written notice thereof to the Lenders and the Company and may be removed
as Agent under this Agreement, the Notes and the other Loan Documents at any
time with or without cause by the Majority Lenders. Upon any such resignation or
removal, the Majority Lenders shall have the right to appoint a successor Agent,
subject to the approval of the Company, if no Event of Default has occurred and
is continuing, (which approval will not be unreasonably withheld). If no
successor Agent shall have been so appointed by the Majority Lenders, and shall
have accepted such appointment, within 30 calendar 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, which shall be a commercial bank organized under the laws of
the United States of America or of any state thereof and having a combined
capital and surplus of at least $50,000,000. Upon the acceptance of any
appointment as Agent hereunder and under the Notes and the other Loan Documents
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 under
this Agreement, the Notes and the other Loan Documents. After any retiring
Agent's resignation or removal as Agent hereunder and under the Notes and the
other Loan Documents, the provisions of this ARTICLE X shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement, the Notes and the other Loan Documents.
SECTION 10.07 NOTICE OF DEFAULT. The Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent shall have received notice from a Lender or the
Company referring to this Agreement, describing such Default or Event of Default
and stating that such notice is a "notice of default." If the Agent receives
such notice, the Agent shall give notice thereof to the Lenders; PROVIDED,
HOWEVER, if such notice is
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received from a Lender, the Agent also shall give notice thereof to the Company.
The Agent shall be entitled to take action or refrain from taking action with
respect to such Default or Event of Default as provided in SECTION 10.01 and
SECTION 10.02.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01 AMENDMENTS. No amendment or waiver of any provision
of this Agreement, any Note or any other Loan Document, nor consent to any
departure by the Company herefrom or therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Company, as to amendments,
and by the Majority Lenders in all cases, and then, in any case, such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given PROVIDED, no such amendment shall be effective unless
signed by all of the Lenders if it attempts to: (a) change the definition of
"COMMITMENT," "DESIGNATED PAYMENT DATE," "MAJORITY LENDERS," "MARGIN,"
"REVOLVING CREDIT COMMITMENT," "REVOLVING CREDIT MATURITY DATE," "TERM LOAN A
COMMITMENT," "TERM A LOAN MATURITY DATE," "TERM LOAN B COMMITMENT," "TERM LOAN B
MATURITY DATE," "ESOP LOAN COMMITMENT," "ESOP LOAN MATURITY DATE," "TOTAL
COMMITMENT," or "TOTAL REVOLVING CREDIT COMMITMENT"; (b) reduce or increase the
amount or alter the terms of the Commitment of any Lender or subject any Lender
to additional obligations; (c) modify this SECTION 11.01; (d) waive any Default
under SECTION 9.01(A); (e) in any manner change the amount of, or any date fixed
for, any payment of principal or interest on the Notes or any Fee or the
reimbursement obligations of the Company under any Letter of Credit; (f) modify
or waive the mandatory prepayment requirements set forth in Section 2.08 hereof
or the allocation of such prepayments to the Lenders; or (g) except as expressly
permitted hereby, release any collateral pledged as security for the Obligations
or release any Guarantor from its obligations under the Guaranty.
SECTION 11.02 NOTICES. Except with respect to telephone
notifications specifically permitted pursuant to ARTICLE II, all notices,
consents, requests, approvals, demands and other communications provided for
herein shall be in writing (including telecopy communications) and mailed,
telecopied, sent by overnight courier or delivered:
(a) If to the Company:
8600 Park Place Boulevard
Houston, Texas 77017
Telecopy No: (713) 475-7761
Attention: Mr. Claude E. Manning
(b) If to the Agent:
707 Travis, 7th Floor, TCB N 79
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Houston, Texas 77002
Telecopy No: (713) 216-6387
Attention: Manager
with copies to:
Loan Syndication Services
1111 Fannin
9th Floor - M.S. 46
Houston, Texas 77002
Attention: Manager
and to:
Andrews & Kurth L.L.P.
4200 Texas Commerce Tower
Houston, Texas 77002
Telecopy No. (713) 220-4295
Attention: Mr. Douglas J. Dillon
or, in the case of any party hereto, such other address or telecopy number as
such party may hereafter specify for such purpose by notice to the other
parties.
(c) If to any Lender, to the address specified by such Lender (or
the Agent on behalf of any Lender) to the Company.
All communications to the Agent shall, when mailed, telecopied or
delivered, be effective when mailed by certified mail, return receipt requested
to such party at its address specified above, or telecopied to any party to the
telecopy number set forth above, or delivered personally to such party at its
address specified above; PROVIDED, that communications to the Agent pursuant to
SECTION II shall not be effective until actually received by the Agent.
SECTION 11.03 NO WAIVER; REMEDIES. No failure on the part of any
Lender or the Agent to exercise, and no delay in exercising, any right
hereunder, under any Note or under any other Loan Document shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right, or
any abandonment or discontinuance of any steps to enforce such right, preclude
any other or further exercise thereof or the exercise of any other right. No
notice to or demand on the Company in any case shall entitle the Company to any
other or further notice or demand in similar or other circumstances. The
remedies herein are cumulative and not exclusive of any other remedies provided
by law, at equity or in any other agreement.
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SECTION 11.04 COSTS, EXPENSES AND TAXES. The Company agrees to pay
on demand: (a) all reasonable out-of-pocket costs and expenses of the Agent in
connection with the preparation, execution and delivery of this Agreement, the
Notes, the other Loan Documents and the other documents to be delivered
hereunder, including the reasonable fees and out-of-pocket expenses of counsel
for the Agent with respect thereto and with respect to advising the Agent as to
its rights and responsibilities under this Agreement, the Notes and the other
Loan Documents, and any modification, supplement or waiver of any of the terms
of this Agreement or any other Loan Document, (b) all reasonable costs and
expenses of any Lender, including reasonable legal fees and expenses, in
connection with the enforcement of, or preservation of rights under this
Agreement, the Notes and the other Loan Documents and (c) reasonable costs and
expenses incurred in connection with third party professional services required
by the Agent such as appraisers, environmental consultants, accountants or
similar Persons, PROVIDED THAT, prior to any Event of Default hereunder, the
Agent will first obtain the consent of the Company to such expense, which
consent shall not be unreasonably withheld. Without prejudice to the survival of
any other obligations of the Company hereunder and under the Notes, the
obligations of the Company under this SECTION 11.04 shall survive the
termination of this Agreement or the replacement of the Agent and each
assignment of the Notes.
SECTION 11.05 INDEMNITY. (a) The Company shall indemnify the
Agent, the Co-Documentation Agents and each Lender and each Affiliate thereof
and their respective directors, officers, employees and agents (OTHER THAN WITH
RESPECT TO ANY CLAIMS BY THE AGENT, THE CO-DOCUMENTATION AGENTS AND/OR ANY
LENDER OR AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE OR AGENT THEREOF AGAINST THE
AGENT, THE CO-DOCUMENTATION AGENTS OR ANY LENDER, OR ANY AFFILIATE, DIRECTOR,
OFFICER, EMPLOYEE OR AGENT THEREOF) (such indemnified Persons called the
"Indemnitees") from, and hold each of them harmless against, any and all losses,
liabilities, claims or damages (including reasonable legal fees and expenses) to
which any of them may become subject, insofar as such losses, liabilities,
claims or damages arise out of or result from (i) this Agreement, the Notes or
any other Loan Document or any actual or proposed use by the Company of the
proceeds of any extension of credit hereunder, (ii) any investigation,
litigation, claims, or demands under any Environmental Laws, or (iii) any other
proceeding (including any threatened investigation or proceeding) relating to
the foregoing clauses (i) and (ii), whether in each such case arising as a
result of this Agreement or any of the other Loan Documents or the transactions
contemplated hereby, and the Company shall reimburse such Indemnitees, upon
demand for any expenses (including legal fees) reasonably incurred in connection
with any such investigation or proceeding; but excluding any such losses,
liabilities, claims, damages or expenses incurred by reason of the gross
negligence or willful misconduct of the Indemnitees. WITHOUT LIMITING ANY
PROVISION OF THIS AGREEMENT, IT IS THE EXPRESS INTENTION OF THE PARTIES HERETO
THAT EACH INDEMNITEE SHALL BE INDEMNIFIED AND HELD HARMLESS AGAINST ALL SUCH
LOSSES, LIABILITIES, CLAIMS OR DAMAGES ARISING OUT OF OR RESULTING FROM THE SOLE
ORDINARY OR CONTRIBUTORY NEGLIGENCE OF SUCH INDEMNITEE, BUT NOT FROM THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE. Without prejudice to the
survival of any other obligations of the Company hereunder and under the other
Loan Documents, the obligations
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of the Company under this SECTION 11.05 shall survive the termination of this
Agreement and the other Loan Documents and the payment of the Obligations or the
assignment of the Notes.
(b) Notwithstanding anything set forth herein to the contrary, the
Company shall not, in connection with any one legal proceeding or claim, or
separate but related proceedings or claims arising out of the same general
allegations of circumstances, in which the interest of the Indemnitees (in the
reasonable judgment of such Indemnitees) does not differ in any material
respect, be liable to the Indemnitees (or any of them) under any of the
provisions set forth herein for the fees or expenses of more than one separate
firm of attorneys in each jurisdiction in which legal action is being taken or
may be taken at any time, which firm shall be selected by the Agent (or, if the
Agent fails to so select after notice from the Indemnitees involved, such firm
shall be selected by such Indemnitees), except for any additional firms
reasonably recommended by such firm in good faith for purposes of obtaining
special expertise in any area of law or for purposes of having local counsel in
each court in which such proceeding or proceedings are pending. In any
litigation or other proceeding in which the interests of the Company and any
Indemnitee affected thereby are not adverse (in the reasonable judgment of such
Indemnitee) and with respect to which such Indemnitee may seek indemnification
or reimbursement from the Company hereunder, the Company shall be entitled to
participate (in conjunction with counsel for the Indemnitees), at the Company's
expense, in the defense of such litigation or proceeding with its own counsel.
No Indemnitee shall consent to entry of any judgment or enter into any
settlement of any action or proceeding that would give rise to any liability of
the Company hereunder without the prior written consent of the Company (which
consent shall not be unreasonably withheld).
SECTION 11.06 RIGHT OF SETOFF. If any Event of Default shall have
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits held and other obligations owing by such Lender, or any
branch, subsidiary or Affiliate, to or for the credit or the account of the
Company against any and all the Obligations of the Company now or hereafter
existing under this Agreement and the other Loan Documents and other obligations
of the Company held by such Lender, irrespective of whether or not such Lender
shall have made any demand under this Agreement, its Note or the Obligations and
although the Obligations may be unmatured. The rights of each Lender under this
SECTION 11.06 are in addition to other rights and remedies (including other
rights of setoff) which such Lender may have.
SECTION 11.07 GOVERNING LAW. This Agreement, all Notes, the other
Loan Documents and all other documents executed in connection herewith shall be
deemed to be contracts and agreements executed by the Company and each Lender
under the laws of the State of Texas and of the United States of America and for
all purposes shall be construed in accordance with, and governed by, the laws of
said state and of the United States of America. Without limitation of the
foregoing, nothing in this Agreement, or in the Notes or in any other Loan
Document shall be deemed to constitute a waiver of any rights which any Lender
may have under applicable federal legislation
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relating to the amount of interest which such Lender may contract for, take,
receive or charge in respect of the Loan and the Loan Documents, including any
right to take, receive, reserve and charge interest at the rate allowed by the
law of the state where any Lender is located. The Agent, each Lender and the
Company further agree that insofar as the provisions of Article 5069-1.04, of
the Revised Civil Statutes of Texas, as amended, are applicable to the
determination of the Highest Lawful Rate with respect to the Notes and the
Obligations hereunder and under the other Loan Documents, the indicated rate
ceiling of such Article shall be applicable; PROVIDED, HOWEVER, that to the
extent permitted by such Article, the Agent may from time to time by notice to
the Company revise the election of such interest rate ceiling as such ceiling
affects the then current or future balances of the Loans. The provisions of
Article 5069-15.01 ET. SEQ. do not apply to any Loan, this Agreement, any Note
issued hereunder or the other Loan Documents.
SECTION 11.08 INTEREST. It is the intention of the parties hereto
that the Agent and each Lender shall conform strictly to usury laws applicable
to it, if any. Notwithstanding anything to the contrary set forth herein, in any
other Loan Document or in any other document or instrument, no provision of any
of the Loan Documents or any other instrument or document furnished pursuant
hereto or in connection herewith is intended or shall be construed to require
the payment or permit the collection of interest in excess of the maximum
non-usurious rate permitted by applicable law. Each provision in this Agreement
and each other Loan Document, agreement or writing is expressly limited so that
in no event whatsoever shall the amount paid, or otherwise agreed to be paid, to
the Agent or any Lender, or charged, contracted for, reserved, taken or received
by the Agent or any Lender, for the use, forbearance or detention of the money
to be loaned under this Agreement or any Loan Document or otherwise (including
any sums paid as required by any covenant or obligation contained herein or in
any other Loan Document which is for the use, forbearance or detention of such
money), exceed that amount of money which would cause the effective rate of
interest to exceed the Highest Lawful Rate, and all amounts owed under this
Agreement and each other Loan Document shall be held to be subject to reduction
to the effect that such amounts so paid or agreed to be paid, charged,
contracted for, reserved, taken or received which are for the use, forbearance
or detention of money under this Agreement or such Loan Document shall in no
event exceed that amount of money which would cause the effective rate of
interest to exceed the Highest Lawful Rate. If the transactions with any Lender
contemplated hereby would be usurious under applicable law then, in that event,
notwithstanding anything to the contrary in any Note payable to such Lender,
this Agreement, any other Loan Document or any other document or instrument, it
is agreed that in the event that the maturity of any Note payable to such Lender
is accelerated or in the event of any required or permitted prepayment, then
such consideration that constitutes interest under law applicable to such Lender
may never include more than the maximum amount allowed by such applicable law
and excess interest, if any, to such Lender provided for in this Agreement or
otherwise shall be canceled automatically as of the date of such acceleration or
prepayment and, if theretofore paid, shall be credited by such Lender on the
principal amount of the indebtedness owed to such Lender by the Company and any
excess refunded by such Lender to the Company. Anything in any Note or any other
Loan Document to the contrary notwithstanding, the Company shall not be
HOU04:29529.11
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required to pay unearned interest on any Note and the Company shall not be
required to pay interest on the Obligations at a rate in excess of the Highest
Lawful Rate, and if the effective rate of interest which would otherwise be
payable under such Note and such Loan Documents would exceed the Highest Lawful
Rate, or if the holder of such Note shall receive any unearned interest or shall
receive monies that are deemed to constitute interest which would increase the
effective rate of interest payable by the Company under such Note and the other
Loan Documents to a rate in excess of the Highest Lawful Rate, then (a) the
amount of interest which would otherwise be payable by the Company shall be
reduced to the amount allowed under applicable law and (b) any unearned interest
paid by the Company or any interest paid by the Company in excess of the Highest
Lawful Rate shall in the first instance be credited on the principal of the
Obligations of the Company (or if all such Obligations shall have been paid in
full, refunded to the Company). It is further agreed that, without limitation of
the foregoing, all calculations of the rate of interest contracted for,
reserved, taken, charged or received by any Lender under the Notes, the
Obligations and the other Loan Documents or made for the purpose of determining
whether such rate exceeds the Highest Lawful Rate, shall be made, to the extent
permitted by usury laws applicable to such Lender, by amortizing, prorating and
spreading in equal parts during the period of the full stated term of the Notes
and this Agreement.
SECTION 11.09 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties contained herein or made in writing by the
Company in connection herewith and the other Loan Documents shall survive the
execution and delivery of this Agreement, the Notes and the other Loan
Documents, the termination of the Total Commitment of the Lenders and will bind
and inure to the benefit of the respective successors and assigns of the parties
hereto, whether so expressed or not, PROVIDED, that the Total Commitment of the
Lenders shall not inure to the benefit of any non-approved successor or assign
of the Company.
SECTION 11.10 SUCCESSORS AND ASSIGNS; PARTICIPATIONS. (a) All
covenants, promises and agreements by or on behalf of the Company or the Lenders
that are contained in this Agreement shall bind and inure to the benefit of
their respective permitted successors and assigns. The Company may not assign or
transfer any of its rights or obligations hereunder without the consent of the
Lenders.
(b) Any of the Lenders may assign to or sell participations to an
Eligible Assignee a portion of its rights and obligations under this Agreement
and the other Loan Documents (including a portion of its share of the Total
Commitment, the Advances and the Obligations of the Company owing to it and the
Notes); PROVIDED, that, in the case of participations (i) such Eligible
Assignees shall be entitled to the cost protection provisions contained in
ARTICLE II and SECTION 11.04 to the extent the Lender selling the participation
is so entitled, (ii) the Company shall continue to deal solely and directly with
the Agent in connection with its rights and obligations under this Agreement and
the other Loan Documents and (iii) each Lender shall retain the sole right and
responsibility to enforce the Obligations relating to the Loans including,
without limitation, the right to approve any amendment, modification or waiver
of any provision of this Agreement; but such Lender may grant
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a participant rights only to the extent such amendments, modifications or
waivers would effect such participant's interests in any fees payable hereunder
(including, without limitation, the amount and the dates fixed for payment of
any such fees) or the amount of principal or the rate of interest payable on, or
the dates fixed for any payment of principal or of interest on, the Loans.
Except with respect to cost protections provided to a participant pursuant to
this paragraph hereof, no participant shall be a third party beneficiary of this
Agreement nor shall it be entitled to enforce any rights provided to the Lenders
against the Company under this Agreement.
(c) A Lender may assign to any other Lender and, with the prior
written consent of the Company and the Agent (which consents shall not be
unreasonably withheld), a Lender may assign to one or more other Eligible
Assignees all or a portion of its interests, rights, and obligations under this
Agreement and the other Loan Documents (including all or a portion of its share
of the Total Commitment and the same portion of the Loans and other obligations
of the Company at the time owing to it and the Note held by it); PROVIDED,
HOWEVER, that each such assignment (i) shall be in a minimum principal amount of
not less than $10,000,000.00 or such Lender's remaining Commitment (other than
any assignment from any Lender of the Term Loan B in which case in a minimum
principal amount of not less than $5,000,000.00), (ii) shall not reduce any
Lender's Commitment to an amount less than $10,000,000.00 (other than to zero or
other than any Lender of the Term Loan B in which case in a minimum amount of
not less than $5,000,000.00) and shall be of a constant, and not a varying,
percentage of the assigning Lender's Revolving Credit Commitment, Term Loan A
Commitment, ESOP Loan Commitment and the rights and obligations attendant to
such Commitments under this Agreement, (iii) the parties to each such assignment
shall execute and deliver to the Agent, for its acceptance, an Assignment and
Acceptance in form and substance satisfactory to the Agent (an "ASSIGNMENT AND
ACCEPTANCE") substantially in the form of EXHIBIT 11.10 hereto, and any Note
subject to such assignment and (iv) no assignment shall be effective until
receipt by the Agent of a reasonable service fee in respect of said assignment
equal to $2,500.00. Upon such execution, delivery, acceptance and recording,
from and after the effective date specified in each Assignment and Acceptance,
which effective date shall be at least five Business Days after the execution
thereof unless otherwise agreed to by the assigning Lender, the Eligible
Assignee thereunder and the Agent (x) the Eligible Assignee thereunder shall be
a party hereto and to the other Loan Documents and, to the extent provided in
such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder and under the other Loan Documents and (y) the assignor Lender
thereunder shall, to the extent provided in such Assignment and Acceptance, be
released from its obligations under this Agreement and the other Loan Documents
(and, in the case of an Assignment and Acceptance covering all of the remaining
portion of an assigning Lender's rights and obligations under this Agreement and
the other Loan Documents, such Lender shall cease to be a party hereto except,
in the case of an Issuing Bank, with respect to Letters of Credit issued by such
Issuing Bank which are then outstanding).
(d) The Agent shall maintain at its office (i) a copy of each
Assignment and Acceptance delivered to it and (ii) a register (the "REGISTER")
for the recordation of the names and
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addresses (and taxpayer identification numbers, if any) of the Lenders and the
principal amount and types of Loans owing to each Lender pursuant to the terms
hereof from time to time. The entries in the Register shall be conclusive in the
absence of manifest error, and the Company, the Agent, the Swing Line Lender and
the Lenders shall treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a "Lender" hereunder for all purposes of this
Agreement and the Loan Documents. The Register shall be available for inspection
by the Company, the Agent, the Swing Line Lender and any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of a copy of (or copies of signed counterparts of) a
duly completed and fully executed Assignment and Acceptance, together with the
existing Note or Notes of the assigning Lender subject to such Assignment and
Acceptance, the Agent shall (i) accept such Assignment and Acceptance, (ii)
record the information contained therein in the Register and (iii) give prompt
notice thereof to the Company and the affected Lenders. Not later than five (5)
Business Days after the receipt of the notice from the Agent referred to in
clause (iii) above, the Company, at its own expense, shall execute and deliver
to the Agent, in exchange for the Note or Notes of the assigning Lender
surrendered to the Agent pursuant to this paragraph, a new Note or Notes payable
to the order of the assignee Lender and its registered assigns in the principal
amount of the Loans assigned to it. Any such new Note shall be substantially in
the form of EXHIBIT 2.05A, 2.05B, 2.05C, 2.05D and 2.05E, hereto as appropriate.
Cancelled Notes shall be promptly returned to the Company.
(f) Notwithstanding any other provision herein but subject to
SECTION 11.11, any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this SECTION
11.10(F) disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Company or any Subsidiary furnished
to such Lender by or on behalf of the Company or any Subsidiary.
(g) Anything in this SECTION 11.10 to the contrary
notwithstanding, any Lender may at any time, without the consent of the Company
or the Agent, assign and pledge all or any portion of its Commitments and the
Loans owing to it to any Federal Reserve Bank (and its transferees) as
collateral security pursuant to Regulation A of the Board and any Operating
Circular issued by such Federal Reserve Bank. No such assignment shall release
the assigning Lender from its obligations hereunder.
SECTION 11.11 CONFIDENTIALITY. Each Lender agrees to exercise its
best efforts to keep any information delivered or made available by the Company
confidential from anyone other than Persons employed or retained by such Lender
who are or are expected to become engaged by such Lender in evaluating,
approving, structuring or administering the Loans and who are subject to this
confidentiality provision; PROVIDED that nothing herein shall prevent any Lender
from disclosing such information (a) to any other Lender, (b) pursuant to
subpoena or upon the order of any court
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or administrative agency, (c) upon the request or demand of any regulatory
agency (including self regulatory agencies) or authority having jurisdiction
over such Lender, (d) which has been publicly disclosed, (e) to the extent
reasonably required in connection with any litigation to which the Agent, any
Lender, the Company or its respective Affiliates may be a party, (f) to the
extent reasonably required in connection with the exercise of any remedy
hereunder, (g) to such Lender's legal counsel and independent auditors (who are
subject to this confidentiality provision or similar confidentiality provision)
(h) to any actual or proposed participant or assignee of all or part of its
rights hereunder which has agreed in writing to be bound by the provisions of
this SECTION 11.11 and (i) which is clearly not confidential. To the extent
legally permitted, each Lender will use its best reasonable efforts to promptly
notify the Company of any information that it is required or requested to
deliver pursuant to clause (b), (c) or (e) of this SECTION 11.11; PROVIDED that
no notice shall be required for any review of information by representatives of
regulators at any Lender's places of business.
SECTION 11.12 PRO RATA TREATMENT. (a) Except as otherwise
specifically permitted hereunder, each payment or prepayment of principal, if
permitted under this Agreement, and each payment of interest with respect to an
Advance shall be made pro rata among the Lenders on the basis of their
respective percentage participations in the Revolving Credit Commitment, the
ESOP Loan Commitment, the Term Loan A Commitment or the Term Loan B Commitment,
as the case may be.
(b) Each Lender agrees that if, through the exercise of a right of
banker's lien, setoff or claim of any kind against the Company as a result of
which the unpaid principal portion of the Notes and the Obligations held by it
shall be proportionately less than the unpaid principal portion of the Notes and
Obligations held by any other Lender, it shall be deemed to have simultaneously
purchased from such other Lender a participation in the Notes and Obligations
held by such other Lender, in the amount required to render such amounts
proportional; PROVIDED, HOWEVER, that if any such purchase or purchases or
adjustments shall be made pursuant to this SECTION 11.12(B) and the payment
giving rise thereto shall thereafter be recovered, such purchase or purchases or
adjustments shall be rescinded to the extent of such recovery and the purchase
price or prices or adjustments restored without interest.
SECTION 11.13 SEPARABILITY. Should any clause, sentence, paragraph
or Section of this Agreement be judicially declared to be invalid, unenforceable
or void, such decision will not have the effect of invalidating or voiding the
remainder of this Agreement, and the parties hereto agree that the part or parts
of this Agreement so held to be invalid, unenforceable or void will be deemed to
have been stricken herefrom and the remainder will have the same force and
effectiveness as if such part or parts had never been included herein.
SECTION 11.14 EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
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SECTION 11.15 INTERPRETATION. (a) In this Agreement, unless a
clear contrary intention appears:
(i) the singular number includes the plural number and VICE
VERSA;
(ii) reference to any gender includes each other gender;
(iii) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to
any particular Article, Section or other subdivision;
(iv) reference to any Person includes such Person's successors
and assigns but, if applicable, only if such successors and assigns
are permitted by this Agreement, and reference to a Person in a
particular capacity excludes such Person in any other capacity or
individually, PROVIDED that nothing in this clause is intended to
authorize any assignment not otherwise permitted by this Agreement;
(v) except as expressly provided to the contrary herein,
reference to any agreement, document or instrument (including this
Agreement) means such agreement, document or instrument as amended,
supplemented or modified and in effect from time to time in accordance
with the terms thereof and, if applicable, the terms hereof, and
reference to any Note or other note includes any Note issued pursuant
hereto in extension or renewal thereof and in substitution or
replacement therefor;
(vi) unless the context indicates otherwise, reference to any
Article, Section, Schedule or Exhibit means such Article or Section
hereof or such Schedule or Exhibit hereto;
(vii) the words "including" (and with correlative meaning
"include") means including, without limiting the generality of any
description preceding such term;
(viii) with respect to the determination of any period of time,
except as expressly provided to the contrary, the word "from" means
"from and including" and the word "to" means "to but excluding"; and
(ix) reference to any law, rule or regulation means such as
amended, modified, codified or reenacted, in whole or in part, and in
effect from time to time.
(b) The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.
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(c) No provision of this Agreement shall be interpreted or
construed against any Person solely because that Person or its legal
representative drafted such provision.
SECTION 11.16 LIMITATION BY LAW. All rights, remedies and powers
provided in this Agreement and the other Loan Documents may be exercised only to
the extent that the exercise thereof does not violate any applicable provision
of law, and all the provisions of this Agreement and the other Loan Documents
are intended to be subject to all applicable mandatory provisions of law which
may be controlling and to be limited to the extent necessary so that they will
not render this Agreement or any other Loan Document invalid, unenforceable, in
whole or in part, or not entitled to be recorded, registered or filed under the
provisions of any applicable law.
SECTION 11.17 SUBMISSION TO JURISDICTION. (A) ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY BE
BROUGHT IN THE COURTS OF THE STATE OF TEXAS, HARRIS COUNTY, OR OF THE UNITED
STATES FOR THE SOUTHERN DISTRICT OF TEXAS AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, THE COMPANY HEREBY IRREVOCABLY ACCEPTS IN RESPECT OF ITS PROPERTY,
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS WITH RESPECT TO ANY
SUCH ACTION OR PROCEEDING. THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO IT AT ITS ADDRESS PROVIDED IN SECTION 11.02 SUCH SERVICE TO
BECOME EFFECTIVE THIRTY (30) DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL
AFFECT THE RIGHT OF THE AGENT OR ANY LENDER TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
THE COMPANY IN ANY OTHER JURISDICTION.
(B) THE COMPANY HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS
OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT BROUGHT IN
THE COURTS REFERRED TO IN THE FIRST SENTENCE OF CLAUSE (A) ABOVE AND HEREBY
FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM.
SECTION 11.18 WAIVER OF JURY TRIAL. THE COMPANY, THE AGENT, THE
ISSUING BANK AND EACH LENDER HEREBY WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
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PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT OR UNDER ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM OR RELATING TO ANY
BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREES, TO
THE EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY SUCH ACTION OR PROCEEDING SHALL
BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
SECTION 11.19 FINAL AGREEMENT OF THE PARTIES. THIS AGREEMENT
(INCLUDING THE SCHEDULES AND EXHIBITS HERETO), THE NOTES AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES RELATING TO THE
SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
SECTION 11.20 COMPANY ASSUMPTION OF OBLIGATIONS OF FINANCE CORP.
The Company and TPC hereby assume and agree to pay, perform and discharge all of
the obligations of Finance Corp. under this Agreement and all other Loan
Documents whether for interest, fees, expenses, indemnification or any other
obligation whatsoever.
SECTION 11.21 EFFECTIVENESS OF AGREEMENTS EXECUTED BY THE
COMPANY. This Agreement and all other Loan Documents executed by Texas
Petrochemicals Corporation shall become effective, as to Texas Petrochemicals
Corporation, only after the occurrence and completion of the events described in
SECTION 5.01(CC).
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers thereunto duly authorized as of the
date first above written.
COMPANY:
TEXAS PETROCHEMICALS CORPORATION
By: Claude E. Manning
Claude E. Manning
Vice President
TPC FINANCE CORP.
By: Susan O. Rheney
Susan O. Rheney
President
AGENT:
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
By: Mary C. Arnold
Mary C. Arnold
Vice President
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CO-DOCUMENTATION AGENTS:
ABN AMRO NORTH AMERICA, INC.,
AS AGENT FOR ABN AMRO BANK N.V.
By: GORDON CHANG
Name:GORDON CHANG
Title:VICE PRESIDENT
AND DIRECTOR
By: COLLIS SANDERS
Name:COLLIS SANDERS
Title:VICE PRESIDENT AND
MANAGING DIRECTOR
THE BANK OF NOVA SCOTIA
By: F.C.H. ASHBY
Name: F.C.H. ASHBY
Title:LOAN OPERATIONS
SWING LINE LENDER:
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
By: Mary C. Arnold
Mary C. Arnold
Vice President
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LENDER:
Revolving Credit ABN AMRO BANK N.V.,
Commitment:$3,851,851.85 HOUSTON AGENCY
Term Loan A BY:ABN AMRO NORTH AMERICA, INC.
Commitment: $8,185,185.19 AS AGENT
Term Loan B
Commitment: $3,000,000.00 By: MIKE W. DEPRIEST
Name:MIKE W. DEPRIEST
ESOP Loan Title:Vice President and
Commitment: $962,962.96 Director
By: ROBERT J. CUNNINGHAM
Name:ROBERT J. CUNNINGHAM
Title:Vice President and
Director
Address:
Three Riverway, Suite 1700
Houston, Texas 77056
Telecopy: No.: (713) 629-7533
DOMESTIC LENDING OFFICE
Three Riverway, Suite 1700
Houston, Texas 77056
Attn: Belinda Rowell
EURODOLLAR LENDING OFFICE
Three Riverway, Suite 1700
Houston, Texas 77056
Attn: Belinda Rowell
LENDER:
Revolving Credit THE BANK OF NOVA SCOTIA
Commitment: $3,851,851.85
Term Loan A
Commitment: $8,185,185.19 By: F.C.H. ASHBY
Name:F.C.H. ASHBY
Term Loan B Title:LOAN OPERATOR
Commitment: $3,000,000.00
Address:
ESOP Loan 600 Peachtree Street, N.E.
Commitment: $962,962.96 Suite 700
Atlantic, Georgia 30308
Telecopy No.: (404) 888-8998
DOMESTIC LENDING OFFICE
Atlanta Agency
600 Peachtree Street, N.E.
Suite 2700
Atlanta, Georgia 30308
Attn: F. C. H. Ashby
EURODOLLAR LENDING OFFICE
Atlanta Agency
600 Peachtree Street, N.E.
Suite 2700
Atlanta, Georgia 30308
Attn: F. C. H. Ashby
LENDER:
Revolving Credit BANK OF SCOTLAND
Commitment: $3,555,555.55
Term Loan A
Commitment: $7,555,555.56 By:CATHERINE ONIFFREY
Name:CATHERINE ONIFFREY
Term Loan B Title:VICE PRESIDENT
Commitment: $ -0-
Address:
ESOP Loan 565 - 5th Avenue
Commitment: $888,888.89 New York, New York 10017
(212) 557-9460
DOMESTIC LENDING OFFICE
565 - 5th Avenue
New York, New York 10017
EURODOLLAR LENDING OFFICE
565 - 5th Avenue
New York, New York 10017
LENDER:
Revolving Credit BANQUE PARIBAS
Commitment: $2,962,962.96
Term Loan A
Commitment: $6,296,296.30 By:CHRISTOPHER S. GOODWIN
Name:CHRISTOPHER S. GOODWIN
Term Loan B Title:VICE PRESIDENT
Commitment: $ -0-
ESOP Loan
Commitment: $740,740.74 By:LARRY ROBINSON
Name:LARRY ROBINSON
Title:VICE PRESIDENT
Address:
1200 Smith Street
Suite 3100
Houston, Texas 77002
Telecopy No.: (713) 659-3832
DOMESTIC LENDING OFFICE
1200 Smith Street
Suite 3100
Houston, Texas 77002
EURODOLLAR LENDING OFFICE
1200 Smith Street
Suite 3100
Houston, Texas 77002
LENDER:
Revolving Credit THE FIRST NATIONAL BANK OF
Commitment: $3,555,555.55 CHICAGO
Term Loan A
Commitment: $7,555,555.56 By:DIXON P. SCHULTZ
Name:DIXON P. SCHULTZ
Term Loan B Title:VICE PRESIDENT
Commitment: $3,000,000.00
Address:
ESOP Loan 1100 Louisiana, Suite 3200
Commitment: $888,888.89 Houston, Texas 79002
Telecopy No.: (713) 654-7370
DOMESTIC LENDING OFFICE
One First National Plaza
0634, 1 FNP 10
Chicago, Illinois 60670
EURODOLLAR LENDING OFFICE
One First National Plaza
0634, 1 FNP 10
Chicago, Illinois 60670
LENDER:
Revolving Credit HIBERNIA NATIONAL BANK
Commitment: $2,962,962.96
Term Loan A By:COLLEEN SMITH
Commitment: $6,296,296.30 Name:COLLEEN SMITH
Title:ASSISTANT VICE
PRESIDENT
Term Loan B
Commitment: $3,000,000.00 Address:
313 Carondelet Street
ESOP Loan New Orleans, Louisiana 70130
Commitment: $740,740.74
Telecopy No.: (504) 533-5344
DOMESTIC LENDING OFFICE
313 Carondelet Street
New Orleans, Louisiana 70130
EURODOLLAR LENDING OFFICE
313 Carondelet Street
New Orleans, Louisiana 70130
LENDER:
Revolving Credit THE CIT GROUP/BUSINESS
CREDIT, INC.
Commitment: $3,555,555.55
Term Loan A By:
Commitment: $7,555,555.56 Name:
Title:
Term Loan B
Commitment: $3,000,000.00 Address:
Two Lincoln Centre
ESOP Loan 5420 LBJ Freeway, Suite 200
Commitment: $888,888.89 Dallas, Texas 75240
Telecopy No.: (214) 455-1690
DOMESTIC LENDING OFFICE
Two Lincoln Centre
5420 LBJ Freeway, Suite 200
Dallas, Texas 75240
EURODOLLAR LENDING OFFICE
Two Lincoln Centre
5420 LBJ Freeway, Suite 200
Dallas, Texas 75240
LENDER:
Revolving Credit THE FUJI BANK, LIMITED
Commitment: $2,370,370.37
Term Loan A By: PHILLIP C. LAUINGER III
Commitment: $5,037,037.04 Name:PHILLIP C. LAUINGER III
Title:VICE PRESIDENT AND
Term Loan B JOINT MANAGER
Commitment: $-0- Address:
1221 McKinney Street,
Suite 4100
ESOP Loan Houston, Texas 77010
Commitment: $592,592.59
Telecopy No.: (713) 759-0048
DOMESTIC LENDING OFFICE
1221 McKinney Street,
Suite 4100
Houston, Texas 77010
EURODOLLAR LENDING OFFICE
1221 McKinney Street,
Suite 4100
Houston, Texas 77010
LENDER:
Revolving Credit TEXAS COMMERCE BANK
Commitment: $4,444,444.48 NATIONAL ASSOCIATION
Term Loan A
Commitment: $9,444,444.40 By: Mary C. Arnold
Mary C. Arnold
Term Loan B Vice President
Commitment: $11,000,000.00
Address:
ESOP Loan 712 Main Street
Commitment: $1,111,111.12 Houston, Texas 77002
Telecopy No.:(713) 216-6004
DOMESTIC LENDING OFFICE
712 Main Street
Houston, Texas 77002
EURODOLLAR LENDING OFFICE
712 Main Street
Houston, Texas 77002
LENDER:
Revolving Credit THE BOATMEN'S NATIONAL BANK
Commitment: $2,370,370.37 OF ST. LOUIS
Term Loan A
Commitment: $5,037,037.04 By: DOUGLAS W. THORNSBERRY
Name:DOUGLAS W. THORNSBERRY
Term Loan B Title:ASSISTANT VICE
PRESIDENT
Commitment: $-0-
Address:
ESOP Loan 800 Market Street, MS LBP3701
Commitment: $592,592.59 St. Louis, MO 61301
Telecopy No.: (314) 466-6645
DOMESTIC LENDING OFFICE
800 Market Street, MS LBP3701
St. Louis, MO 61301
EURODOLLAR LENDING OFFICE
800 Market Street, MS LBP3701
St. Louis, MO 61301
LENDER:
Revolving Credit NATIONAL BANK OF CANADA
Commitment: $3,555,555.55
Term Loan A By:
Commitment: $7,555,555.56 Name:
Title:
Term Loan B
Commitment: $ -0-
By:
ESOP Loan Name:
Commitment: $888,888.89 Title:
Notice Address:
2121 San Jacinto, Suite 1850
Dallas, Texas 75201
Telecopy No.: (214) 871-2015
DOMESTIC LENDING OFFICE
125 West 55th Street,
23rd Floor
New York, New York 10019
Telcopy No.: (212) 632-8736
EURODOLLAR LENDING OFFICE
125 West 55th Street,
23rd Floor
New York, New York 10019
Telcopy No.: (212) 632-8736
LENDER:
PILGRIM AMERICA PRIME
RATE TRUST
By: MICHAEL J. BACEVICH
Name:MICHAEL J. BACEVICH
Title:VICE PRESIDENT
Term Loan B
Commitment: $5,000,000.00 Address:
2 Renaissance Square
40 N. Central Avenue,
Suite 1200
Phoenix, AZ 85004-4424
Telecopy No.: (602) 417-8327
DOMESTIC LENDING OFFICE
2 Renaissance Square
40 N. Central Avenue,
Suite 1200
Phoenix, AZ 85004-4424
EURODOLLAR LENDING OFFICE
2 Renaissance Square
40 N. Central Avenue,
Suite 1200
Phoenix, AZ 85004-4424
LENDER:
MERRILL LYNCH SENIOR FLOATING
RATE FUND, INC.
Term Loan B
Commitment: $7,000,000.00 By:ANTHONY R. CLEMENTE
Name:ANTHONY R. CLEMENTE
Title:AUTHORIZED SIGNATORY
Address:
800 Scudders Mill Road
Plainsboro, New Jersey 08536
Telecopy No.: (609) 282-2756
DOMESTIC LENDING OFFICE
800 Scudders Mill Road
Plainsboro, New Jersey 08536
EURODOLLAR LENDING OFFICE
800 Scudders Mill Road
Plainsboro, New Jersey 08536
LENDER:
Revolving Credit WELLS FARGO BANK (TEXAS),
Commitment: $2,962,962.96 NATIONAL ASSOCIATION
Term Loan A By:ANNE M. RHOADS
Commitment: $6,296,296.30 Name:ANNE M. RHOADS
Title:VICE PRESIDENT
Term Loan B
Commitment: $-0- Address:
1000 Louisiana, 3rd Floor
ESOP Loan Houston, Texas 77002
Commitment: $740,740.74
Telecopy No.: (713) 250-4035
DOMESTIC LENDING OFFICE
1000 Louisiana, 3rd Floor
Houston, Texas 77002
EURODOLLAR LENDING OFFICE
1000 Louisiana, 3rd Floor
Houston, Texas 77002
LENDER:
VAN KAMPEN AMERICAN CAPITAL
PRIME RATE INCOME TRUST
Term Loan B
Commitment: $7,000,000.00
By:BRIAN W. GOOD
Name:BRIAN W. GOOD
Title:VICE PRESIDENT
Address:
One Parkview Plaza
17 W110 22nd Street
Oakbrook Terrace,
Illinois 60181
Telecopy No.: (708) 684-6740
DOMESTIC LENDING OFFICE
One Parkview Plaza
17 W110 22nd Street
Oakbrook Terrace, Illinois
60181
EURODOLLAR LENDING OFFICE
One Parkview Plaza
17 W110 22nd Street
Oakbrook Terrace, Illinois
60181
LENDER:
CHANCELLOR CAPITAL
Term Loan B
Commitment: $7,000,000.00
By:
Name:
Title:
Address:
1166 Avenue of the Americas
New York, New York 10036
Telecopy No.: (212) 279-9763
DOMESTIC LENDING OFFICE
1166 Avenue of the Americas
New York, New York 10036
EURODOLLAR LENDING OFFICE
1166 Avenue of the Americas
New York, New York 10036
EXHIBIT 1.01A
ADMINISTRATIVE QUESTIONNAIRE
TPC FINANCE CORP./TEXAS PETROCHEMICALS CORPORATION
CREDIT AGREEMENT
PLEASE FORWARD THIS COMPLETED
FORM AS SOON AS POSSIBLE TO:
Gina Hardwick: FAX (713) 216-2339
Agent: Texas Commerce Bank National Association
712 Main Street, 8-TCB-N 96
Houston, Texas 77002
Telex: 166-350 TCB HOU
Syndications Telecopier: (713) 216-2339 or
Alternate: (713) 216-2291
Syndications Contacts: Ann Krevis Baumgartner (713) 216-7582
Gina Hardwick (713) 216-2093
Operations: Gale Manning (713) 750-2784
Full Legal Name of your Institution:
Hard-copy documents, notices and periodic financial statements of the Company
should be sent to the following account officer designated by your bank:
Officer's Name
Title:
Street Address:
City, State, Zip:
Phone #:
Telefax #:
1
PRIMARY CONTACT INFORMATION
We will send all telecopies regarding time-critical information (drawdowns,
option changes, payments, etc.) to the Primary or Alternate Contact at the
banking location you designate.
1. Your bank's primary contact for telefaxes concerning borrowings, options
on interest rates, etc:
PRIMARY TELEX ALTERNATE ALTERNATE
PRIMARY NAME/ PRIMARY TELEFAX NUMBER AND TELEFAX TELEX NUMBER
TELEPHONE NO. DEPARTMENT NUMBER ANSWERBACK NUMBER AND ANSWERBACK
--------------- ---------- --------------- -------------- ---------- --------------
PRIMARY TELEX ALTERNATE ALTERNATE
ALTERNATE NAME/ PRIMARY TELEFAX NUMBER AND TELEFAX TELEX NUMBER
TELEPHONE NO. DEPARTMENT NUMBER ANSWERBACK NUMBER AND ANSWERBACK
--------------- ---------- --------------- -------------- ---------- ---------------
IF AT ANY TIME ANY OF THE ABOVE INFORMATION CHANGES, PLEASE ADVISE.
Publicity: Under what name would you prefer your institution to
appear in any future advertisements?
Movement of Funds: TO US: Wire Fed Funds to:
Texas Commerce Bank National Association
ABA # 113000609
For account number #
Attention: Loan Syndication Services/Gale
Manning
Reference:
TO YOU: Wire Fed Funds to:
Name:
ABA #:
For Credit To:
Attention:
Reference:
Other:
2
EXHIBIT 1.01B
BORROWING BASE CERTIFICATE
Reference is made to the Credit Agreement dated as of July 1, 1996 (as may
be amended from time to time, the "CREDIT AGREEMENT") among TPC Finance Corp.
to be merged into Texas Petrochemicals Corporation (collectively as the
"COMPANY"), the lenders party thereto, and Texas Commerce Bank National
Association, as agent for such lenders. Capitalized terms used herein and not
otherwise defined shall have the respective meanings assigned to such terms in
the Credit Agreement. The undersigned, being the of the
Company, does hereby certify, to be best of his/her knowledge, as follows:
BORROWING BASE CALCULATIONS
AS OF , 19
1. Receivables: $
LESS (each as specifically defined in
the definition of "Eligible
Assets"):
Receivables more than 60 days
past due
Receivables not from sale of
Inventory
Sale is not legally binding
No legal title to Receivable or
not subject to Lien
Receivables evidenced by note,
chattel paper or instrument
Receivables subject to
setoff/dispute
Receivables not payable in $ in
US
Receivables in excess of 10%
from single account debtor(1)
Receivables due from account
debtor located outside U.S.
and not backed by acceptable
letter of credit
Receivables from an account
debtor subject to an
insolvency proceedings
Receivables from account debtor
not acceptable to Agent
Other
Eligible Accounts
Eligible Accounts X 85% $
2. Inventory:
LESS:
Inventory located outside US
Inventory shipped or on
consignment
Inventory subject to dispute
Allowances, Reserves or
non-complying with applicable
legal requirements
Subject to negotiable document
of title
Inventory not saleable
Inventory subject to others'
liens
Other
Eligible Inventory
- ------------------------
(1) Other than an account debtor on Exhibit 1.01C; provided that if account
debtor is rated at least BBB+ or the equivalent thereof by Standard & Poor's
Ratings Group, then such Receivable together with all other Receivables due from
such account debtor does not comprise more than 25% of the aggregate Receivables
of the Company and its Subsidiaries.
3
Eligible Inventory X 65%
(Not to exceed 50% of Line 3)
3. Total Borrowing Base
(sum of lines 1 and 2)
4. Total Obligations:
Revolving Credit Advances
Swing Line Advances
Letter of Credit Obligations
5. Excess (Deficiency) of Borrowing Base
(Line 3 minus Line 4)
6. Availability ($40,000,000.00 minus
Line 5) $
IN WITNESS WHEREOF, the Company has caused this certificate to be executed
this day of , 199 by a Responsible Officer.
Texas Petrochemicals Corporation,
as successor by merger to TPC Finance
Corp.
By:
Name:
Title:
EXHIBIT 1.01C
ACCOUNT DEBTOR RECEIVABLES CONCENTRATION
Goodyear Tire & Rubber & Rubber Co.
Bayer Rubber Corp. (Canada)/Bayer Corp.
Firestone Synthetic Rubber & Latex Company, Div. of
Bridgestone/Firestone, Inc.
Lyondell Petrochemical Company
The Lubrizol Corporation
Dow Chemical Company
Union Carbide Chemicals and Plastics Company, Inc.
E.I. Dupont de Nemours & Company
Mobil Chemical Company
Schenectady International, Inc.
American Synthetic Rubber Corporation
Novacor Chemicals, Ltd.
Eastman Chemical Company
Citgo Petroleum Corporation
Rohm and Haas Company
Amoco Gas Company
Phillips Petroleum Corporation
Texaco Chemical, Inc.
EXHIBIT 2.04
FORM OF
NOTICE OF ADVANCE
[Date]
Texas Commerce Bank National
Association, as Agent
for the Lenders parties to the
Credit Agreement referred to below
1111 Fannin Street
Houston, Texas 77002
Attention:
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of July 1, 1996 (the
"CREDIT AGREEMENT"), among TPC Finance Corp. to be merged into Texas
Petrochemicals Corporation (collectively as the "COMPANY"), certain other
lenders that are party thereto, and Texas Commerce Bank National Association, as
Agent for such lenders. All capitalized terms used herein and not otherwise
defined that are defined in the Credit Agreement shall have the meanings as
defined in the Credit Agreement.
The Company, hereby requests an Advance under the Credit Agreement and in
that connection sets forth below the information relating to such Borrowing (the
"PROPOSED BORROWING") as required by Section 2.01 of the Credit Agreement:
Aggregate Principal Amount of
(a) Proposed Borrowing(1) $
Borrowing Date of Proposed
(b) Borrowing(2) $
Type of Advances to comprise the
(c) Proposed Borrowing(3) $
Interest Period and last day
(d) thereof(4) $
Availability for Revolving Credit
(e) Loan:
(i) Borrowing Base Certificate dated $
(ii) Aggregate Revolving Credit
Loans outstanding (including
outstanding Swing Line Loans and
Letter of Credit Outstandings) $
(iii) Borrowing Base Availability
(Line (i) minus Line (ii)) $
(iv) Unused Availability (Lesser of
(a) $40,000,000.00 minus Line (ii);
or (b) Line (iii)) $
By each of the delivery of this Notice of Advance and the acceptance of any
or all of the Advances made by the Lenders in response to this Notice of
Advance, the Company shall be deemed to have represented and warranted that the
conditions to lending specified in Article V of the Credit Agreement have been
satisfied with respect to the Proposed Borrowing.
Very truly yours,
Texas Petrochemicals Corporation
By:
Name:
Title:
- ----------------------
(1) Not less than $2,000,000.00 and in integral multiples of $100,000.00 for
LIBOR Rate Advances; not less than $1,000,000.00 and in integral multiples
of $100,000.00 for Alternate Base Rate Advances.
(2) Must be a Business Day.
(3) Alternate Base Rate Advance or LIBOR Rate Advance.
(4) Applicable to LIBOR Rate Advance, which shall be for one, two, three or six
months duration and shall end not later than the Revolving Credit Maturity
Date.
EXHIBIT 2.05A
FORM OF
REVOLVING CREDIT NOTE
$
FOR VALUE RECEIVED, the undersigned, TPC FINANCE CORP., a Texas corporation
to be merged on the Effective Date into TEXAS PETROCHEMICALS CORPORATION, a
Texas corporation and successor by merger to TPC Finance Corp. (the
"COMPANY"), HEREBY PROMISES TO PAY to the order of (the
"LENDER"), the lesser of and No/100 DOLLARS ($ ) or so
much thereof as may be advanced under the Credit Agreement by the Lender and
outstanding on the Revolving Credit Maturity Date as defined in that certain
Credit Agreement dated as of July 1, 1996 (as may be amended or otherwise
modified from time to time, the "CREDIT AGREEMENT") among the Company, the
Lender, certain other lenders that are party thereto, and Texas Commerce Bank
National Association, as Agent for the Lender and such other lenders. All
capitalized terms used herein and not otherwise defined that are defined in the
Credit Agreement shall have the meanings as defined in the Credit Agreement.
The Company promises to pay interest on the unpaid principal amount of this
Revolving Credit Note ("NOTE") outstanding from time to time from the date
hereof until such principal amount is paid in full, at such interest rates as
are specified in the Credit Agreement. Both principal and interest are payable
in same day funds in lawful money of the United States of America to Texas
Commerce Bank National Association, as Agent, at 712 Main Street, Houston,
Texas, or at such other place as the Agent shall designate in writing to the
Company.
This Note is one of the Revolving Credit Notes referred to in, and the Note
and all provisions herein are entitled to the benefits of, the Credit Agreement.
The obligations of the Company hereunder are secured by the Security Documents.
The Credit Agreement, among other things, (a) provides for the making of
advances by the Lender and other lenders to the Company from time to time, and
(b) contains provisions for acceleration of the maturity hereof upon the
happening of certain stated events, for prepayments on account of principal
hereof prior to the maturity hereof upon the terms and conditions therein
specified, and for limitations on the amount of interest paid such that no
provision of the Credit Agreement or this Note shall require the payment or
permit the collection of interest in excess of the Highest Lawful Rate.
The Company and any and all endorsers, guarantors and sureties severally
waive grace, demand, presentment for payment, notice of dishonor or default,
intent to accelerate, protest and notice of protest and diligence in collecting
and bringing of suit against any party hereto, and agree to all renewals,
extensions or partial payments hereon and to any release or substitution of
security herefor, in whole or in part, with or without notice, before or after
maturity; provided nothing in this paragraph shall constitute a waiver of the
notice required under SECTION 9.01 of the Credit Agreement.
This Note shall be governed by and construed under the laws of the State of
Texas and the applicable laws of the United States of America.
TPC FINANCE CORP.
By:
Name:
Title:
TEXAS PETROCHEMICALS CORPORATION,
successor by merger to TPC Finance
Corp.
By:
Name:
Title:
8
EXHIBIT 2.05B
FORM OF
TERM NOTE A
$
FOR VALUE RECEIVED, the undersigned, TPC FINANCE CORP., a Texas corporation
to be merged on the Effective Date into TEXAS PETROCHEMICALS CORPORATION, a
Texas corporation and successor in interest to TPC Finance Corp. (the
"COMPANY"), HEREBY PROMISES TO PAY to the order of (the
"LENDER"), the lesser of and No/100 DOLLARS ($ ) or so
much thereof as may be advanced under the Credit Agreement by the Lender and
outstanding on the Term Loan A Maturity Date as defined in that certain Credit
Agreement dated as of July 1, 1996 (as may be amended or otherwise modified from
time to time, the "CREDIT AGREEMENT") among the Company, the Lender, certain
other lenders that are party thereto, and Texas Commerce Bank National
Association, as Agent for the Lender and such other lenders. All capitalized
terms used herein and not otherwise defined that are defined in the Credit
Agreement shall have the meanings as defined in the Credit Agreement.
The Company promises to pay interest on the unpaid principal amount of this
Term Note A ("NOTE") outstanding from time to time from the date hereof until
such principal amount is paid in full, at such interest rates as are specified
in the Credit Agreement. Both principal and interest are payable in same day
funds in lawful money of the United States of America to the Agent at 712 Main
Street, Houston, Texas, or at such other place as the Agent shall designate in
writing to the Company.
This Note is one of the Term Notes A referred to in, and this Note and all
provisions herein are entitled to the benefits of, the Credit Agreement. The
obligations of the Company hereunder are secured by the Security Documents. The
Credit Agreement, among other things, (a) provides for the making of loans by
the Lender and other lenders to the Company from time to time, and (b) contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events, for prepayments on account of principal hereof prior to the
maturity hereof upon the terms and conditions therein specified, and for
limitations on the amount of interest paid such that no provision of the Credit
Agreement or this Note shall require the payment or permit the collection of
interest in excess of the Highest Lawful Rate.
The Company and any and all endorsers, guarantors and sureties severally
waive grace, demand, presentment for payment, notice of dishonor or default,
intent to accelerate, protest and notice of protest and diligence in collecting
and bringing of suit against any party hereto, and agree to all renewals,
extensions or partial payments hereon and to any release or substitution of
security herefor, in whole or in part, with or without notice, before or after
maturity; provided nothing in this paragraph shall constitute a waiver of the
notice required under SECTION 9.02 of the Credit Agreement.
This Note shall be governed by and construed under the laws of the State of
Texas and the applicable laws of the United States of America.
TPC FINANCE CORP.
By:
Name:
Title:
TEXAS PETROCHEMICALS CORPORATION,
successor in interest to TPC Finance
Corp.
By:
Name:
Title:
EXHIBIT 2.05C
FORM OF
TERM NOTE B
$
FOR VALUE RECEIVED, the undersigned, TPC FINANCE CORP., a Texas corporation
to be merged on the Effective Date into TEXAS PETROCHEMICALS CORPORATION, a
Texas corporation and successor by merger to TPC Finance Corp. (the
"COMPANY"), HEREBY PROMISES TO PAY to the order of (the
"LENDER"), the lesser of and No/100 DOLLARS ($ ) or so
much thereof as may be advanced under the Credit Agreement by the Lender and
outstanding on the Term Loan B Maturity Date as defined in that certain Credit
Agreement dated as of July 1, 1996 (as may be amended or otherwise modified from
time to time, the "CREDIT AGREEMENT") among the Company, the Lender, certain
other lenders that are party thereto, and Texas Commerce Bank National
Association, as Agent for the Lender and such other lenders. All capitalized
terms used herein and not otherwise defined shall have the meanings as defined
in the Credit Agreement.
The Company promises to pay interest on the unpaid principal amount of this
Term Note B ("NOTE") outstanding from time to time from the date hereof until
such principal amount is paid in full, at such interest rates as are specified
in the Credit Agreement. Both principal and interest are payable in same day
funds in lawful money of the United States of America to the Agent at 712 Main
Street, Houston, Texas, or at such other place as the Agent shall designate in
writing to the Company.
This Note is one of the Term Notes B referred to in, and this Note and all
provisions herein are entitled to the benefits of, the Credit Agreement. The
obligations of the Company hereunder are secured by the Security Documents. The
Credit Agreement, among other things, (a) provides for the making of loans by
the Lender and other lenders to the Company from time to time, and (b) contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events, for prepayments on account of principal hereof prior to the
maturity hereof upon the terms and conditions therein specified, and for
limitations on the amount of interest paid such that no provision of the Credit
Agreement or this Note shall require the payment or permit the collection of
interest in excess of the Highest Lawful Rate.
The Company and any and all endorsers, guarantors and sureties severally
waive grace, demand, presentment for payment, notice of dishonor or default,
intent to accelerate, protest and notice of protest and diligence in collecting
and bringing of suit against any party hereto, and agree to all renewals,
extensions or partial payments hereon and to any release or substitution of
security herefor, in whole or in part, with or without notice, before or after
maturity; provided nothing in this paragraph shall constitute a waiver of the
notice required under SECTION 9.02 of the Credit Agreement.
This Note shall be governed by and construed under the laws of the State of
Texas and the applicable laws of the United States of America.
TPC FINANCE CORP.
By:
Name:
Title:
TEXAS PETROCHEMICALS CORPORATION,
successor by merger to TPC Finance
Corp.
By:
Name:
Title:
EXHIBIT 2.05D
FORM OF
ESOP NOTE
$
FOR VALUE RECEIVED, the undersigned, TPC FINANCE CORP., a Texas corporation
to be merged on the Effective Date into TEXAS PETROCHEMICALS CORPORATION, a
Texas corporation and successor by merger to TPC Finance Corp. (the
"COMPANY"), HEREBY PROMISES TO PAY to the order of (the
"LENDER"), the lesser of and No/100 DOLLARS ($ ) or so
much thereof as may be advanced under the Credit Agreement by the Lender and
outstanding on the ESOP Loan Maturity Date as defined in that certain Credit
Agreement dated as of July 1, 1996 (as may be amended or otherwise modified from
time to time, the "CREDIT AGREEMENT") among the Company, the Lender, certain
other lenders that are party thereto, and Texas Commerce Bank National
Association, as Agent for the Lender and such other lenders. All capitalized
terms used herein and not otherwise defined shall have the meanings as defined
in the Credit Agreement.
The Company promises to pay interest on the unpaid principal amount of this
ESOP Note ("NOTE") outstanding from time to time from the date hereof until
such principal amount is paid in full, at such interest rates as are specified
in the Credit Agreement. Both principal and interest are payable in same day
funds in lawful money of the United States of America to the Agent at 712 Main
Street, Houston, Texas, or at such other place as the Agent shall designate in
writing to the Company.
This Note is one of the ESOP Notes referred to in, and this Note and all
provisions herein are entitled to the benefits of, the Credit Agreement. The
obligations of the Company hereunder are secured by the Security Documents. The
Credit Agreement, among other things, (a) provides for the making of loans by
the Lender and other lenders to the Company from time to time, and (b) contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events, for prepayments on account of principal hereof prior to the
maturity hereof upon the terms and conditions therein specified, and for
limitations on the amount of interest paid such that no provision of the Credit
Agreement or this Note shall require the payment or permit the collection of
interest in excess of the Highest Lawful Rate.
The Company and any and all endorsers, guarantors and sureties severally
waive grace, demand, presentment for payment, notice of dishonor or default,
intent to accelerate, protest and notice of protest and diligence in collecting
and bringing of suit against any party hereto, and agree to all renewals,
extensions or partial payments hereon and to any release or substitution of
security herefor, in whole or in part, with or without notice, before or after
maturity; providing nothing in this paragraph shall constitute a waiver of the
notice required under SECTION 9.02 of the Credit Agreement.
This Note shall be governed by and construed under the laws of the State of
Texas and the applicable laws of the United States of America.
TPC FINANCE CORP.
By:
Name:
Title:
TEXAS PETROCHEMICALS CORPORATION,
successor by merger to TPC Finance
Corp.
By:
Name:
Title:
EXHIBIT 2.05E
FORM OF
SWING LINE NOTE
$5,000,000.00
FOR VALUE RECEIVED, the undersigned, TPC FINANCE CORP., a Texas corporation
to be merged on the Effective Date into TEXAS PETROCHEMICALS CORPORATION, a
Texas corporation and successor by merger to TPC Finance Corp. (the
"COMPANY"), HEREBY PROMISES TO PAY to the order of TEXAS COMMERCE BANK
NATIONAL ASSOCIATION (the "LENDER"), the lesser of FIVE MILLION and No/100
DOLLARS ($5,000,000.00) or so much thereof as may be advanced under the Credit
Agreement by the Lender and outstanding on the Revolving Credit Maturity Date as
defined in that certain Credit Agreement dated as of July 1, 1996 (as may be
amended or otherwise modified from time to time, the "CREDIT AGREEMENT") among
the Company, the Lender, certain other lenders that are party thereto, and Texas
Commerce Bank National Association, as Agent for the Lender and such other
lenders. All capitalized terms used herein and not otherwise defined shall have
the meanings as defined in the Credit Agreement.
The Company promises to pay interest on the unpaid principal amount of this
Swing Line Note ("NOTE") outstanding from time to time from the date hereof
until such principal amount is paid in full, at such interest rates as are
specified in the Credit Agreement. Both principal and interest are payable in
same day funds in lawful money of the United States of America to Texas Commerce
Bank National Association, as Agent at 712 Main Street, Houston, Texas, or at
such other place as the Agent shall deignate in writing to the Company.
This Note is the Swing Line Note referred to in, and the Note and all
provisions herein are entitled to the benefits of, the Credit Agreement. The
obligations of the Company hereunder are secured by the Security Documents. The
Credit Agreement, among other things, (a) provides for the making of loans by
the Lender and other lenders to the Company from time to time, and (b) contains
provisions for acceleratin of the maturity hereof upon the happening of certain
stated events, for prepayments on account of principal hereof prior to the
maturity hereof upon the terms and conditions therein specified, and for
limitations on the amount of interest paid such that no provision of the Credit
Agreement or this Note shall require the payment or permit the collection of
interest in excess of the Highest Lawful Rate.
The Company and any and all endorsers, guarantors and sureties severally
waive grace, demand, presentment for payment, notice of dishonor or default,
intent to accelerate, protest and notice of protest and diligence in collecting
and bringing of suit against any party hereto, and agree to all renewals,
extensions or partial payments hereon and to any release or substitution of
security herefor, in whole or in part, with or without notice, before or after
maturity; provided nothing in this paragraph shall constitute a waiver of the
notice required under SECTION 9.02 of the Credit Agreement.
This Note shall be governed by and construed under the laws of the State of
Texas and the applicable laws of the United States of America.
TPC FINANCE CORP.
By:
Name:
Title:
TEXAS PETROCHEMICALS CORPORATION,
successor by merger to TPC Finance
Corp.
By:
Name:
Title:
EXHIBIT 3.02
FORM OF
LETTER OF CREDIT REQUEST
Address to Issuing Bank
Attention:
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of July 1, 1996 (as
amended from time to time, the "CREDIT AGREEMENT") among TPC Finance Corp. to
be merged into Texas Petrochemicals Corporation (collectively as the
"COMPANY"), the lenders party thereto, and Texas Commerce Bank National
Association, as agent for such lenders. Capitalized terms used herein not
otherwise defined herein shall have the meanings assigned to such terms in the
Credit Agreement.
The Company hereby requests the issuance of a Letter of Credit under the
Credit Agreement, and in that connection sets forth below the information
relating to such Letter of Credit ("PROPOSED LETTER OF CREDIT") as required by
Section 3.02 of the Credit Agreement. The Proposed Letter of Credit must be
issued:
(a) on or before , 19 [1]
(b) for the benefit of
(c) in the amount of $
(d) having an expiry date of , 19 [2]
(e) subject to the conditions set forth in the Application for Letter of
Credit submitted herewith.
The Company hereby refers to Letter of Credit Number (the
"EXPIRING LETTER OF CREDIT") which has an existing expiry date of
. The Company hereby requests that the expiry date of
the Expiring Letter of Credit be extended to .
- ------------------------
[1] Must be not less than five (5) Business Days after notice is given to
the Issuing Bank.
[2] Must be not later than the Revolving Credit Maturity Date.
The Company hereby certifies that after giving effect to the [issuance of
the Proposed Letter of Credit] or [the extension of the Expiring Letter of
Credit] (a) the maximum amount outstanding under all Letters of Credit does not
exceed $ and (b) the sum of the Letter of Credit
Obligations PLUS all Advances under the Revolving Credit Notes and the Swing
Line Note does not exceed $40,000,000.00. The Company hereby certifies that on
the date hereof all applicable conditions to the issuance of the Proposed Letter
of Credit set forth in ARTICLE V of the Credit Agreement have been satisfied and
that the Proposed Letter of Credit complies with the terms of the Credit
Agreement, and upon the issuance of the Proposed Letter of Credit, the Company
will be deemed to have recertified the foregoing on such issuance date.
Sincerely,
Texas Petrochemicals Corporation
By:
Name:
Title:
2
EXHIBIT 11.10
FORM OF ASSIGNMENT AND ACCEPTANCE
DATED , 19
Reference is made to the Credit Agreement dated as of July 1, 1996 (as
amended from time to time, the "CREDIT AGREEMENT"), among TPC Finance Corp to
be merged into Texas Petrochemicals Corporation, the lenders party thereto, and
Texas Commerce Bank National Association, as agent for such lenders. Capitalized
terms used herein and not otherwise defined shall have the meanings assigned to
such terms in the Credit Agreement.
(the "ASSIGNOR") and
(the "ASSIGNEE") agree as follows:
1. (a) The Assignor hereby sells and assigns to the Assignee (without
recourse to the Assignor), and the Assignee hereby purchases and assumes from
the Assignor, a % interest (the "PERCENTAGE INTEREST") in and to all the
Assignor's rights and obligations under the Credit Agreement as of the
Assignment Date (as defined below), including, without limitation, (i) the
Percentage Interest in the Commitment of the Assignor on the Assignment Date,
(ii) the Percentage Interest in all reimbursement obligations (net of
participations therein purchased by other Lenders pursuant to the Credit
Agreement) in respect of the Letters of Credit either issued by the Assignor or
in which the Assignor has purchased participations pursuant to the Credit
Agreement, (iii) the Percentate Interest in the Revolving Credit Loans, the Term
Loan A, Term Loan B, and the ESOP Loan owing to the Assignor outstanding on the
Assignment Date, (iv) the Percentage Interest in all unpaid interest with
respect to such Loans and all commitment fees and letter of credit fees accrued
to the Assignment Date and (v) the Percentage Interest in the Revolving Credit
Notes, the Term Note A, Term Note B and the ESOP Note held by the Assignor.
(b) In furtherance of the foregoing, (i) to the extent the Assignor is the
Issuing Bank, the Assignee hereby purchases a participation, in the proportion
of the Percentage Interest, in all reimbursement obligations (net of
participations therein purchased by other Lenders pursuant to the Credit
Agreement) in respect of Letters of Credit upon the terms and conditions set
forth in SECTION 3.03 of the Credit Agreement, with the same effect as if the
Assignee had been a lender, and had purchased such participation, on the
issuance date or dates of each Letter of Credit and (ii) to the extent the
Assignor is not the Issuing Bank and has purchased participations in
reimbursement obligations in respect of the Letters of Credit issued by the
Issuing Bank, the Assignee hereby purchases a portion of such participations
(net of portions thereof purchased by other Lenders pursuant to the Credit
Agreement), in the proportion of the Percentage Interest, upon the terms and
conditions set forth in SECTION 3.03 of the Credit Agreement, with the same
effect as if the Assignee had been a Lender, and had directly purchased
participations equal to such portions, on the issuance date or dates of each
Letter of Credit.
2. The Assignor (a) represents that as of the date hereof, (i) its
Revolving Credit Commitment, Term Loan A Commitment, Term Loan B Commitment, and
ESOP Loan Commitment (without giving effect to assignments thereof which have
not yet become effective) is $ , $ and $ , respectively, and the outstanding
balance of its Revolving Credit Loans, Term Loan A, Term Loan B, and ESOP Loan
(unreduced by any assignments thereof which have not yet become effective) are $
, $ , $ and $ , respectively[1.], (ii) the amount of the reimbursement
obligations (net of participations therein purchased by other Lenders pursuant
to the Credit Agreement) in respect of the Letters of Credit issued by the
Assignor as the Issuing Bank is $ [.2] (iii) the amount of the participations in
reimbursement obligations in respect of the Letters of Credit issued by a Lender
other than Assignor purchased by the Assignor (net of portions thereof purchased
by other Lenders pursuant to the Credit Agreement) pursuant to the terms of the
Credit Agreement is $ ; and (iv) the assignment to Assignee effected hereunder
complies with all requirements imposed hereon under the Loan Documents; (b)
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 the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement 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 known to the Assignor;
(c) makes no representation or warranty and assumes no responsbility with
respect to the financial condition of the Company or any Subsidiary of the
Company or the performance or observance by the Company or any Subsidiary of the
Company of any of their respective obligations under the Loan Documents or any
other instrument or document furnished pursuant thereto; and (d) attaches the
Revolving Credit Note, Term Note A, Term Note B and ESOP Note issued to Assignor
and requests that the Agent exchange such Notes for a new Revolving Credit Note,
a new Term Note A, new Term Note B, and a new ESOP Note executed, in each
instance, by the borrower and payable to the Assignee in a principal amount
equal to $ , $ , $ and $ , respectively [and a new Revolving Credit Note, a new
Term Note A, new Term Note B, and a new ESOP Note executed by the Borrower and
payable to the Assignor in a principal amount equal to $ , $ , $ and $ ,
respectively)].
3. The Assignee (a) represents and warrants that it is legally authorized
to enter into this Assignment and Acceptance; (b) confirms that it has received
a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 7.01 (a) and (b) thereof and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Assignment and Acceptance;
(c) 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
- ----------------------
(1) If the Assignor is an Issuing Bank, clause (ii) should be included.
(2) If the Assignor is NOT an Issuing Bank, clause (iii) should be
included.
2
Agreement; (d) confirms that it is an Eligible Assignee; (e) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under the Credit Agreement and the other Loan Documents as are
delegated to the Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; (f) agrees that it will be bound by and will
perform in accordance with their terms all the obligations which by the terms of
the Credit Agreement are required to be performed by it as a Lender; (g) agrees
that it will comply with Section 11.11 of the Credit Agreement with respect to
information complying with that provision furnished to it by the Company or the
Assignor (other than information generally available to the public or otherwise
available to the Assignor on a nonconfidential basis); (h) attaches hereto a
completed Administrative Questionnaire[; and (i) 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].(3)
4. The effective date for this Assignment and Acceptance shall be
(the "ASSIGNMENT DATE"), subject to (a) the due execution,
acceptance and recording set forth in the following sentence and (b) the receipt
by the Assignor of payment evidencing Assignee's purchase provided in Section 1
hereof.(4) Following the execution of this Assignment and Acceptance, it will be
delivered to the Agent and the Company for acceptance, and recording by the
Agent pursuant to Section 11.10 (c) of the Credit Agreement.
5. Upon such acceptance and recording, from and after the Assignment Date,
(a) 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 (b) 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.
6. Notwithstanding anything to the contrary contained in the Credit
Agreement, the Borrower shall not be required to reimburse the Agent, the
Assignor or the Assignee for any costs and expenses (including attorneys' fees)
incurred by such Person in connection with this Assignment and Acceptance.
7. Upon such acceptance and recording, from and after the Assignment Date,
the Agent and the Company may rely upon this Assignment and Acceptance and the
Agent shall make all payments in respect of the interest assigned hereby
(including payments of principal, interest, fees and other amounts) to the
Assignee. The Assignor and Assignee shall make all appropriate
- --------------------
(3) If the Assignee is organized under the laws of a jurisdiction outside
the United States.
(4) See SECTION 11.01. Such date shall be at least five Business Days after
the execution of this Assignment and Acceptance and delivery thereof to the
Agent, unless otherwise agreed by the Assignor, the Assignee and the Agent.
3
adjustments in payments for periods prior to the Assignment Date by the Agent or
with respect to the making of this assignment directly between themselves.
8. This Assignment and Acceptance shall be deemed to be a contractual
obligation under, and shall be governed by, and construed in accordance with,
the laws of the State of Texas and the applicable laws of the United States of
America.
[NAME OF ASSIGNOR]
By:
Name:
Title:
[NAME OF ASSIGNEE]
By:
Name:
Title:
Accepted this day
of , 19
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
as Agent
By:
Name:
Title:
Accepted this day
of , 19
Texas Petrochemicals Corporation
By:
Name:
Title:
4
SCHEDULE 1.01
Other Assets
1. Hawker Siddeley twin engine airplane, Model 125-600A, Serial #256070,
registration number N411TP.
2. Lots 11, 12, 13, 14, 15, 16, 17, 18, 19, and 20, Block 133, of the
original City of Ennis; address -- 206 North Kaufman, Ennis, Texas;
leased to Lawrence Funeral Home, Inc., pursuant to a Lease dated
October 1, 1989.
3. .4547 acres at 14543 Memorial Drive, Houston, Texas leased to
Ashford-Memorial Pizza Inn, Inc., as Lessee, pursuant to an unrecorded
lease dated December 1, 1993, on which operates a Pizza Inn Restaurant.
4. 30,007 acres of unimproved property located at Highway 6 and
Briarforest in Houston, Harris County, Texas.
5. 8.8962 acres of unimproved property located on Richmond and West Hollow
Drive (the West Hollow Property), Houston, Harris County, Texas.
6. 2.9613 acres at 8705-8707 Katy Freeway, Houston, Harris County, Texas
a.k.a. Hedwig Office Park with one 1-story, one 3-story, and 1 4-story
office building.
7. 4.14560 acre of tract of land at Highway 288 and South MacGregor Drive,
Houston, Harris County, Texas. The property has frontage on Camden
Drive and Gehring Drive in Houston.
SCHEDULE 6.04
Conflicting or Adverse Agreements or Restrictions
None
SCHEDULE 6.05
Owned and Leased Real Property
LESSOR/OWNER LESSEE ADDRESS
Company Ashford-Memorial 14543 Memorial Drive
Pizza Inn, Inc. Houston, Texas
Company None Unimproved 30.007 acres at
Highway 6, Houston, Texas
Company None Unimproved 8.8962 acres at Richmond
Avenue and the northeast corner of
West Hollow, Houston, Texas
Company Lawrence Funeral Home, Inc. 206 N. Kaufman
Ennis, Texas
Company Various 8705-8707 Katy Freeway
(see attached Rent Roll) Houston, Texas
Company None Unimproved 4.1560 acres at Highway
288 and South MacGregor Drive,
Houston, Texas
Company None 4604 Baker Road
Baytown, Texas 77521
Company None Houston Plant
8600 Park Place Boulevard
Houston, Texas 77017
Fred Vincent TBCC 3524 Cities Service Highway
Westlake, Louisiana 70669
Company None Pipeline
Harris and Galveston
Counties, Texas
HEDWIG OFFICE PARK
RENT ROLL FOR 8705 8705 KATY FREEWAY, SUITE 302A 4/30/96
HOUSTON, TEXAS 77024
(713) 464-9087
TENANT SUITE NO. S.F. (NRA) RENT DEPOSIT LEASE TERMS
- ------------------------------------- --------- ----------- ----------- ----------- --------------------
FIRST FLOOR (116%)
Scholastic Learning Center, Inc. 102 1,392 $ 1,183.00 $ 1,183.00 12/1/95 to 11/30/96
TOC Storage 103 395
Vic Kormeier (Storage) 103A 144 50.00 N/A Month to Month
Watts & Company 104 3,509 $ 2,807.00 $ 2,807.00 11/1/95 to 10/31/96
Robert B. Hinsley, P.C. 105 1,577 $ 1,261.00 $ 1,261.00 11/1/95 to 10/31/97
SECOND FLOOR (111.5%)
David Davenport 200 665 $ 532.00 $ 532.00 4/14/96 to 4/30/97
Luro C. Taylor & Alex Deal 201 960 $ 768.00 $ 768.00 12/1/95 to 11/30/96
Bill Robbins 202 537 $ 430.00 $ 430.00 6/1/95 to 5/31/96
203 588
Global Translation Services 204 1,521 $ 1,293.00 $ 1,293.00 5/1/96 - 4/30/98
Vic Kormeier (Storage) 205 432 $ 200.00 Month to Month
John G. Dickerson 206 441 $ 375.00 $ 375.00 1/1/96 to 12/31/97
Video Communication Production 207 416 $ 332.80 $ 332.80 6/8/95 to 6/7/96
Peter Dailey and Associates 208 1,017 $ 800.00 $ 800.00 1/1/96 to 12/31/96
Travel Desk 210 678 $ 576.00 $ 576.00 1/1/96 to 12/31/96
Page 1
HEDWIG OFFICE PARK
RENT ROLL FOR 8705 8705 KATY FREEWAY, SUITE 302A 4/30/96
HOUSTON, TEXAS 77024
(713) 464-9087
TENANT SUITE NO. S.F. (NRA) RENT DEPOSIT LEASE TERMS
- ------------------------------------- --------- ----------- ----------- ----------- --------------------
THIRD FLOOR (116%)
Plant & Machinery 300 4,977 $ 3,981.00 $ 3,981.00 2/1/96 to 12/31/97
Management Office 302A 946
Farrington Temporary Services, Inc. 304 811 $ 689.00 $ 689.00 1/1/96 to 12/31/97
George Brown & Company 306 389 $ 330.00 $ 330.00 6/15/91 to 6/16/96
FOURTH FLOOR (112%)
Kormeier & Walters
(Val/Kor Intn'l Inc.) 400 2,047 $ 1,637.60 $ 1,637.60 10/1/93 to 9/30/00
Creole Compression 401 600 $ 555.00 N/A Month to Month
Ka-Tex Constructors, Inc. 402 492 $ 390.00 N/A 1/1/96 to 12/31/96
J.L. Sleeper Jr. 403 386 $ 308.80 $ 308.80 5/1/96 - 4/30/97
Swalm Foundation 405 1,291
Beverly Twaddell 406 647 $ 517.60 $ 517.60 10/1/94 to 10/1/00
Claremont Management Group, Inc. 408 1,391 $ 1,182.00 N/A Month to Month
Page 2
HEDWIG OFFICE PARK
RENT ROLL FOR 8705 8705 KATY FREEWAY, SUITE 302A DATE 4/30/96
HOUSTON, TEXAS 77024
(713) 464-9087
TENANT SUITE NO. S.F. (NRA) RENT DEPOSIT LEASE TERMS
- ------------------------------------- --------- ----------- ----------- ----------- ---------------------
FIRST FLOOR (112%)
Hunt & Associates 100 4,726 $ 3,780.00 $ 3,780.00 6/1/93 to 6/1/96
Michael Sopher Ins. Agengy 101 580 $ 464.00 $ 464.00 7/15/93 to 7/14/96
Credit Services of Houston 102 601 $ 510.85 $ 510.85 5/1/96 to 4/30/97
TOC Storage 104 602
Sword Petroleum Exploration 105 1,071 $ 910.35 $ 910.35 1/31/96 to 3/31/97
Terry Blackburn Photography 103 485 $ 412.00 $ 412.00 4/1/96 to 3/31/97
SECOND FLOOR (109.6%)
TOC/TPC Offices 200 2,464
Intercoastal Energy, Inc. 203 730 $ 584.00 $ 584.00 1/1/96 to 12/31/96
Petrophysics, Inc. 206 1,302 $ 1,041.00 $ 1,041.00 6/1/95 to 5/31/97
Universe Technical Translation, Inc. 208 2,652 $ 2,121.60 $ 2,121.60 10/15/94 to 10/14/99
Anne Bohnn 204 347 $ 315.00 N/A Month to Month
THIRD FLOOR (108.1%)
TOC/TPC Offices 300 8,313
ANNEX
Terry Blackburn Photography Annex 1,905 $ 1,210.00 $ 1,210.00 1/31/96 to 1/31/97
Page 3
HEDWIG OFFICE PARK
RENT ROLL FOR 8707 8705 KATY FREEWAY, SUITE 302A DATE 4/30/96
HOUSTON, TEXAS 77024
(713) 464-9087
TENANT SUITE NO. S.F. (NRA) RENT DEPOSIT LEASE TERMS
- ------------------------------------- --------- ---------- ----------- ------- --------------------
ASHFORD MEMORIAL PIZZA INN, INC. Pizza Inn 2,883 $ 1,750.00 -- 12/1/93 to 10/31/98
Page 4
SCHEDULE 6.06
Proceedings
1. The Company is contesting in good faith the taxes in the matter of
Hearing No. 35,082 where the Comptroller of Public Accounts of the State
of Texas is alleging claim for taxes in the amount of $606,943.05 as of
May 11, 1995, plus accrued interest in the amount of $92.24 per day.
2. See attached.
3. See Schedule 6.12.
LIST OF OUTSTANDING PENDING OR THREATENED LITIGATION
The following is a list of outstanding pending litigation, as of May 14,
1996, against Texas Olefins Company ("TOC"):
1. PAULA JEAN BOUDREAUX ET AL. V. TEXAS CHEMICAL COMPANY, ET AL.; No. B
141,684, 60th Judicial District Court of Jefferson County, Texas;
2. MARGARET KATHERINE FULLER ET AL. V. EXXON CORPORATION, ET AL.; No. A
145,539, 58th Judicial District Court of Jefferson County, Texas;
3. KURT GUILBEAUX ET AL. V. TEXACO CHEMICAL COMPANY ET AL.; No. B 149,581,
60th Judicial District Court of Jefferson County, Texas;
4. THOMAS AND JULIA DUCOTE V. AMOCO CHEMICAL COMPANY, ET AL.; No. 150,406,
60th Judicial District Court of Jefferson County, Texas;
5. VAN LARRY REED ET AL. V. FINA OIL & CHEMICAL COMPANY; No. B 152,671,
60th Judicial District Court of Jefferson County, Texas;
6. ROBERT J. PROVOST ET AL. V. AMOCO CORPORATION ET AL.; No. B 154,096,
60th Judicial District of Jefferson County, Texas; and
7. BOBBY JOE CHERRY ET UX V. AMERICAN MINERAL SPIRITS COMPANY ET AL.; No. E
154,089, 172nd Judicial District Court of Jefferson County, Texas.
The following is a list of outstanding pending litigation, as of May 14,
1996, against Texas Petrochemicals Corporation ("TPC"):
1. STANLEY ABBOTT SR. AND JOYCE ABBOTT ET AL. V. OWENS CORNING FIBERGLASS
CORPORATION; No. 95,039743, 152nd Judicial District Court of Harris
County, Texas;
2. IRENE E. LOPEZ ET AL. V. E.I.DuPONT De NEMOURS AND COMPANY ET AL.; No.
D-152,200, 136th Judicial District Court of Jefferson County, Texas;
3. WIRT A. MCMULLAN V. TEXAS PETROCHEMICALS CORPORATION; No. 94CV0728,
122nd Judicial District Court of Galveston County, Texas;
4. JAMES MOUTON ET UX V. TEXACO CHEMICAL COMPANY ET AL.; No. D 150,058,
136th Judicial District Court of Jefferson County, Texas;
5. JERRY SMITH ET UX V. TEXACO CHEMICAL COMPANY ET AL.; No. B-145,547, 60th
Judicial District Court of Jefferson County, Texas;
6. PRESTON WOOD ET UX V. MOBIL OIL CORPORATION ET AL.; No. 0960078-C, 260th
Judicial District Court of Orange County, Texas;
7. DANIEL W. BATES ET UX V. TEXACO CHEMICAL COMPANY ET AL.; No. B-154,579,
60th Judicial District Court of Jefferson County, Texas; and
8. COMPTROLLER OF PUBLIC ACCOUNTS OF THE STATE OF TEXAS RE: TEXAS
PETROCHEMICALS CORPORATION, HEARING NO. 35,082.
The following is a potential claim against Texas Olefins Company ("TOC"):
Potential claims of minor beneficiaries under the Jennifer Ann Swalm
Trust dated July 6, 1972 ("Trust"), which claims have been released by
the Trustees and legal guardian and parents of the minor beneficiaries of
the Trust.
The following is a list of threatened litigation, as of May 14, 1996,
against Texas Petrochemicals Corporation ("TPC"):
1. Claims for indemnity from Petro-Texas Chemical Corporation
("Petro-Tex"). On February 4, 1992, counsel for Petro-Tex requested
TPC to indemnify Petro-Texas with respect to the following litigation:
(a) PAULA JEAN BOUDREAUX ET AL. V. TEXAS CHEMICAL COMPANY, ET AL.; No.
B141,684, 60th District Court of Jefferson County, Texas.
2. Claim for indemnity from Petro-Tex to TPC by letter dated May 12, 1993,
counsel for Petro-Tex requested TPC to indemnify and provide a defense
to Petro-Tex with respect to the following litigation:
(a) Cause No. B 141,684; PAULA JEAN BOUDREAUX, ET AL, V. TEXACO
CHEMICAL COMPANY, ET AL.; in the 60th Judicial District Court of
Jefferson County, Texas ("Boudreaux Lawsuit")
(b) Cause No. D 142,192; NORMAN DENNIS, ET AL. V TEXACO CHEMICAL
COMPANY, ET AL.; in the 136th Judicial District Court of
Jefferson County, Texas ("Dennis Lawsuit");
(c) Cause No. D 137,680; DEBORAH JEAN NIGH, ET AL. V. UNION OIL
COMPANY, ET AL.; in the 136th Judicial District Court of
Jefferson County, Texas ("Nigh Lawsuit");
(d) Cause No. E 0145,420; LUCY K. BEAVER, ET AL. V. FIRESTONE, ET
AL.; in the 172nd Judicial District Court of Jefferson County,
Texas ("Beaver lawsuit");
(e) Cause No. E 141,856; ESTELLE FLEMING, ET AL. V. B.F. GOODRICH,
ET AL.; in the 60th Judicial District Court of Jefferson County,
Texas ("Fleming Lawsuit"); and
(f) Cause No. A 145,539; MARGARET J. FULLER, ET AL, V. EXXON, ET
AL.; in the 58th Judicial District Court of Jefferson County,
Texas ("Fuller Lawsuit").
3. Claim for indemnity from Tenneco to TPC. On December 9, 1993, counsel
for Tenneco requested TPC to indemnify Petro-Tex with respect to the
following cases:
(a) ADAMS, ET AL. V. AMOCO CHEMICAL, ET AL.; No. 93-045837, in the
234th Judicial District Court of Harris County, Texas;
(b) ALLCORN, ET AL. V. AMOCO CHEMICAL, ET AL.; No. 93-042492, in the
55th Judicial District Court of Harris County, Texas;
(c) RHODES V. ABBOTT LABORATORIES, ET AL.; No. 93-J-0485-C, in the
Judicial District Court of Matagorda County, Texas.
4. Claim for indemnity from Tenneco to TPC. On April 14, 1994, counsel for
Tenneco requested TPC to indemnify Petro-Tex under the purchase
agreement between Petro-Tex and TPC dated June 8, 1994.
5. Claim for indemnity from Tenneco to TPC. On May 12, 1994, counsel for
Tenneco again reasserted Petro-Tex's position that TPC was obligated to
indemnify Petro-Tex for all claims alleged in the above cases.
6. Claim for indemnity from Tenneco to TPC. On July 15, 1994, TPC received
notice for indemnification from counsel for Tenneco for Malone Service
Company -- Environmental Claim.
Counsel for TPC has repeatedly advised counsel for Tenneco and Petro-Tex
that TPC did not assume any of the liabilities for which Petro-Tex was seeking
indemnity. Counsel for TPC further advised Petro-Tex that TPC was not obligated
to indemnify Petro-Tex in connection with various tort claims arising from the
sale of products by Petro-Tex prior to June 21, 1984.
To the actual knowledge of officers of TPC, no litigation has been
initiated by either Tenneco or Petro-Tex for indemnification to Petro-Tex with
respect to any of the above claims.
SCHEDULE 6.12
Environmental Matters
1. The No. 1 Dehydro Reactor emits greater than 5 tons per year of carbon
monoxide but does not burn at a temperature equal to or greater than
1300 degrees farenheit, in contravention of 30 Tex. Admin. Code Section
119.2. The installation of a duct burner and new waste heat boiler, to
be completed by November 1996, is to correct this concern.
2. Solid waste construction debris is stored in the construction parking
lot without a permit.
3. The Company's air emissions permit requires a 3 inch vacuum for
servicing of inerted vessels at the Company's docks, which vacuum the
Company does not have. The Company has submitted an application to
amend the permit.
4. Bayer has been named in a suit against the Washburn Tunnel Facility of
the Gulf Coast Waste Disposal Authority (GCWDA) regarding the disposal
of various wastes disposed by the GCWDA. The Company also has sent
non-hazardous wastes to the Washburn Tunnel Facility.
5. The Company has received complaints from its neighbors on occasion
concerning noise, and has installed a 16-foot earthen noise barrier at
the facility's southeast boundary to address those complaints and
comply with the City of Houston noise ordinance.
6. The issues identified in the environmental, health and safety
assessment and the database summary of the commercial properties
conducted by Pilko & Associates, Inc. and dated, respectively, April
18, 1996 and May 28, 1996.
7. In February 1996, the EPA issued an order to the Company and Bayer
Corporation requiring the companies to resolve the exceedances of their
discharge permit limits for copper and total suspended solids that had
occurred since 1992. The Company believes that these issues have been
resolved by raising the limits in the new discharge permit and by other
corrective actions. No penalty was assessed.
8. Under the terms of the 1984 purchase agreement with Petro-Tex, the
prior owner of the Houston facility, Petro-Tex has indemnified the
Company for liability arising from off-site disposal of any materials
prior to June 1984. Notwithstanding the terms of the indemnity, in July
1994, Petro-Tex filed a claim for indemnity against the Company for any
costs that may be attributable to Petro-Tex for the cleanup of the
Malone Service Company site in Texas City, Texas, where Petro-Tex and
other companies along the Gulf Coast allegedly sent wastes for disposal
in the 1970s and early 1980s. It is not known whether the site will
require remediation or at what cost. The Company believes that it has
meritorious defenses to Petro-Tex's claim and intends to contest the
claim vigorously.
9. See Schedule 6.06.
SCHEDULE 6.14
Domestic and Foreign Subsidiaries
1. Texas Butylene Chemical Corporation, a Texas corporation and
wholly-owned subsidiary of the Company.
2. The Company owns beneficially and of record, free and clear of all
Liens, the sole outstanding limited partnership interest in the
Hollywood/Texas Olefins, Ltd., a Texas limited partnership
("Hollywood/Texas Olefins"), representing a 50% interest in
Hollywood/Texas Olefins.
3. The Company owns beneficially and of record, free and clear of all
Liens, 2.82% of the shares of Gulf Coast Waste Disposal Authority.
SCHEDULE 7.03
Existing Insurance
See attached Schedule
TEXAS OLEFINS COMPANY
MASTER PROPERTY & BUSINESS INTERRUPTION PROGRAM
SECURITY DIAGRAM -- 1995/96
$345MM
XS
$5MM (INSURED'S RETENTION)
Lloyds of London..................... 8.50%
SR Intercontinental Business Inc.
Co................................. 5.00%
Great Lakes Reinsurance (UK) PLC..... 5.00%
Asianational Gencell, SPA............ 0.50%
Cpcasifigo Norcsk Skadcforslering.... 1.25%
Gem Insurance Company Limited........ 7.00%
Total........................ 27.25%
LIMIT: $94,012,500
$340MM
XS
$5MM XS $5MM (INSURED'S RETENTION)
Underwriters Indemnity Co. of N.A.
thru CKINA........................... 20.00%
New Hampshire Insurance Company...... 10.00%
Hartford Stearn Boiler Inspection &
Insurance Company.................... 10.00%
Gem Insurance Company Limited........ 3.50%
Pulcrum Insurance Company............ 5.00%
Assicurazioni Generali, SPA.......... 1.00%
Total................................ 49.50%
LIMIT: $168,300.00
$150MM XS $190MM XS $5MM XS $5MM (INSURED'S
RETENTION)
Nat'l Union Fire Ins. Co. of
Pittsburgh, PA thru Scmt Tech...... 10.00%
Reliance Insurance Company of
Illinois............................. 6.50%
Firemen's Fund Insurance Company..... 4.25%
Underwriters Indemnity Company....... 2.50%
Total................................ 23.25%
LIMIT: $34,875,000
$190MM XS $9MM XS $5MM
(INSURED'S RETENTION)
Nat'l Union Fire Ltd. Co. of
Pittsburgh, PA thru Scmt Tech...... 10.00
Reliance Insurance Company of
Illinois........................... 10.00%
Firemen's Fund Insurance Company..... 2.50%
Underwriters Indemnity Company....... 0.75%
Total................................ 23.25%
LIMIT: $44,175,000
Lexington Insurance Company $5MM XS $5MM
(Insured's Retention) - 72.75% LIMIT: $3,637.50
$5,000,000 Insured's Retention LIMIT: $5,000.00
NOTE: Currency in U.S. Dollars June 21, 1996
COVERAGE POLICY DATA LIMITS PREMIUM
- -------------------------------------------------------------------------- ----------- ---------
International Traffic Bond Washington International $ 10,000 $ 200
3500701
12-22-94/95
Diesel Fuel Bond Safeco Insurance Co. $ 15,000 $ 119
No. 5718908
3-10-94/95
REMARKS
- ------------------------------------- -------------------------------------
International Traffic Bond Covers obligations associated with
shipping containers used in
international traffic.
Diesel Fuel Bond Covers tax obligations associated
with purchase of diesel fuel.
TOTAL PREMIUM $3,085,624
TOTAL STATE TAX $63,930
TOTAL STAMPING FEES $1,693
GRAND TOTAL $3,471,247
NOTE: 1. Actual premium costs should be estimated as follows:
Gross Premium $ 3,471,247
Less -165,500 Loss fixed credit paid for each of three
years under X. L. Europe MAXL Program
-6,380 Workers' Comp premium for Las Lomas
Ranch & The Falls Resort
-7,026 Business Auto premium for Las Lomas
------------ Ranch & the Falls Resort
$ 3,292,341
2. The following coverages have been considered, but not carried:
Directors & Officers Liability
Employment Practices Liability
Environmental Impairment Liability
3. Losses: There have been no major losses on any of the above
policies during the past 5 years.
THE EXTENT OF INSURANCE IS AT ALL TIMES GOVERNED BY THE COMPLETE TERMS AND
CONDITIONS OF THE POLICY MARCH 27, 1996
TEXAS OLEFINS COMPANY/TEXAS PETROCHEMICALS CORPORATION -- SUMMARY OF
INSURANCE -- PAGE 5
COVERAGE POLICY DATA LIMITS PREMIUM
- -------------------------------------------------------------------------- ----------- ---------
Automobile Liability Hartford Insurance Co. $ 1,000,000 $ 64,142
61UENKL2636
6-21-95/96
Workers' Compensation Texas Workers' Compensation Insurance A.1,000,000 $ 63,279
Fund Statutory
TSF 11257102 for
6-21-95/96 Medical
&
Compen-
sation
B.
Employers '
Liability
$
Fiduciary Liability Aetna Casualty & Surety Co. $ 1,000,000 $ 3,522
71FF100873072
3-8-94/95
Fidelity Coverage Texas Pacific $ 1,000,000 $ 7,080
(Employee Dishonesty) Fidelity Co.
81077808
6-21-95/96
Customs Bond Washington International $ 100,000 $ 800
1555670
7-31-94/95
REMARKS
- ------------------------------------- -------------------------------------
Automobile Liability Provides liability coverage for
owned, hired and non-owned
vehicles.
Deductible -- None.
Physical Damage not provided.
Occurrence, defense cost outside
limits.
Workers' Compensation Covers job related injury or illness
and lawsuits (if any) filed by
employees in connection with work
related accidents.
Occurrence, defense cost outside
limits.
Fiduciary Liability Covers errors and omissions committed
by fiduciaries in connection with
the Employee Benefits Program.
Fidelity Coverage Covers criminal acts against the
(Employee Dishonesty) insured committed by employees
Customs Bond Covers obligations associated with
import & export duties.
THE EXTENT OF INSURANCE IS AT ALL TIMES GOVERNED BY THE COMPLETE TERMS AND
CONDITIONS OF THE POLICY
TEXAS OLEFINS COMPANY/TEXAS PETROCHEMICALS CORPORATION -- SUMMARY OF
INSURANCE -- PAGE 4
TEXAS OLEFINS COMPANY
TEXAS PETROCHEMICALS CORPORATION
SUMMARY OF INSURANCE
For 1995/96
COVERAGE POLICY DATA LIMITS PREMIUM
- -------------------------------------------------------------------------- ----------- ---------
Property & Business Interception Various U.S. and European Companies $345,000,000 $1,825,000
(See attached schedule)
JLW2817
6-21-95/96
Boiler & Machinery and Business Reliance Insurance Co. $100,000,000 $ 423,437
Interruption Travelers Insurance Co.
Hartford Steam Boiler Insurance Co.
NZC0109594
6-21-95/96
Marine Cargo Loyds of London & Certain ILU $ 5,000,000 $ 48,070
Companies
MOA951089
6-21-95/96
Miscellaneous Property & Business National Union Fire Insurance Company $17,610,500 $ 39,975
Interruption of Pittsburgh, PA
ST260 40 05
6-21-95/96
REMARKS
- ------------------------------------- -------------------------------------
Property & Business Interception Covers direct damage to real and
business personal property.
Deductibles: PD & BI (Combined)
$5,000,000.
Premium: $1,825,000
State Tax: $48,166.52
Stamping Fee: $ 1,367.50
Total Premium: $1,874,535
Boiler & Machinery and Business Covers mechanical breakdown to
Interruption machinery, boilers, pressure
vessels, electrical and
refrigeration equipment.
Deductibles:
PD: $100,000
BI: 20-Day
Wait
Marine Cargo Covers physical damage to cargo
shipped via barge and open ocean
vessel.
Deductible: 1/2% of cargo value.
Miscellaneous Property & Business Covers office buildings, ranch
Interruption property, Baytown facility, tank
cars on premises (belonging to
others).
Deductible - $5,000
THE EXTENT OF INSURANCE IS AT ALL TIMES GOVERNED BY THE COMPLETE TERMS AND
CONDITIONS OF THE POLICY
TEXAS OLEFINS COMPANY/TEXAS PETROCHEMICALS CORPORATION -- SUMMARY OF
INSURANCE -- PAGE 1
COVERAGE POLICY DATA LIMITS PREMIUM
- -------------------------------------------------------------------------- ----------- ---------
Excess Liability Lexington Insurance Co. $10,000,000 $ 40,000
No. 8784707
6-21-95/96
Excess Liability X. L. Europe $475,000,000 $ 520,000
No. XLEXS 00250
6-21-95/96
* $ 354,500
Charterers / Wharfingers Liability Various London Companies $ 1,000,000 $ 35,000
MOA951088
6-21-95/96
Excess Liability Lexington Insurance Co. $10,000,000 $ 285,000
No. 5109905
6-21-95/96
Excess Liability Westchester Fire Insurance Company $ 5,000,000 $ 50,000
XLS310179
6-21-95/96
REMARKS
- ------------------------------------- -------------------------------------
Excess Liability Covers bodily injury and property damage
to members of the public (3rd party claimants).
(3rd excess liability layer)
Claims Made, defense cost outside limits.
Named Peril Pollution.
Punitive Damages Included.
Premium: $40,000
State Tax: $1,940
Stamping Fees: $40.00
Total Premium: $41,980
Excess Liability Covers bodily injury and property damage
to members of the public (3rd party claimants).
(4th excess liability layer)
(Three Year Loss Responsive
Program -- MAXL)
*Reflects Annual Premium after
deduction of anticipated Loss Fund
Credit
Charterers / Wharfingers Liability Covers liabilities arising from
ownership of dock facilities and
chartering of vessels.
Deductible: $10,000
Occurrence, defense cost outside
limits.
Excess Liability Covers bodily injury and property
damage to members of the public
(3rd party claimants).
Deductible: $1,000,000 per
occurrence SIR
(1st excess liability layer).
Claims Made, defense cost outside
limits.
Named Peril Pollution.
Punitive Damages Includes.
Premium: $285,000
State Tax: $13,822.50
Stamping Fees: $285.00
Total Premium: $299,108
Excess Liability Covers bodily injury and property
damage to members of the public
(3rd party claimants).
(2nd excess liability layer)
Claims Made, defense cost outside
limits.
Named Peril Pollution.
Punitive Damages Included.
THE EXTENT OF INSURANCE IS AT ALL TIMES GOVERNED BY THE COMPLETE TERMS AND
CONDITIONS OF THE POLICY
TEXAS OLEFINS COMPANY/TEXAS PETROCHEMICALS CORPORATION -- SUMMARY OF
INSURANCE -- PAGE 2
SCHEDULE 8.04 (a)
Existing Liens
1. Financing Statement No. 93-137592 filed July 15, 1993 with the Texas
Secretary of State in favor of South Texas Equipment Company.
2. Financing Statement No. 93-216056 filed November 10, 1993 with the
Texas Secretary of State in favor of South Texas Equipment Company.
3. Financing Statement No. 94-039546 filed March 3, 1994 with the Texas
Secretary of State in favor of Unisys Corporation.
4. Financing Statement No. 94-096864 filed May 16, 1994 with the Texas
Secretary of State in favor of Leasetec Corporation.
5. Financing Statement No. 94-198274 filed October 10, 1994 with the Texas
Secretary of State in favor of Leasetec Corporation.
6. Financing Statement No. 902229 filed November 6, 1995 with the Harris
County, Texas County Clerk in favor of Space Master Building.
SCHEDULE 8.05(b)
Existing Investments
1. The Company owns beneficially and of record, free and clear of all
Liens, the sole outstanding limited partnership interest in the
Hollywood/Texas Olefins, Ltd., a Texas limited partnership
("Hollywood/Texas Olefins"), representing a 50% interest in
Hollywood/Texas Olefins.
2. 2.82% of the shares of Gulf Coast Waste Disposal Authority.
SCHEDULE 8.06(c)
Guaranties of Indebtedness
None.
SCHEDULE 8.12
Material Contracts
1. Facilities Agreement dated August 24, 1972 among Gulf Coast Waste
Disposal Authority, Air Products and Chemicals, Inc., Atlantic
Richfield Company, Champion International Corporation, Crown Central
Petroleum Corporation and Petro-Tex Chemical Corporation and Amendment
to Facilities Agreement dated May 1, 1982.
2. Agreement dated August 24, 1972 by and among Air Products and
Chemicals, Inc., Atlantic Richfield Company, Champion International
Corporation, Crown Central Petroleum Corporation and Petro-Tex Chemical
Corporation.
3. Joint venture Agreement regarding Industrial Waste Treatment Company
referenced in Agreement described in 2 above.
4. Waste Plant Agreement dated July 1, 1977 between Petro-Tex Chemical
Corporation and Denka Chemical Corporation.
5. WharfUse Agreement dated August 11, 1966 between Petro-Tex Chemical
Corporation and Harris County Houston Ship Channel Navigation District
and Amendment to Lease Agreement relating to same dated June 6, 1978
effective as of May 1, 1978 and Second Amendment to Lease Agreement
dated April 1, 1984.
6. Operating Agreement dated December 9, 1988 between Hollywood/Texas
Olefins, Ltd. and Texas Olefins Company and Amendment No. 1 thereto
dated February 12, 1989.
EXHIBIT 10.10
COMPANY
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "PLEDGE AGREEMENT") dated effective as of
July 1, 1996 is between TPC FINANCE CORP., a Texas corporation to be merged into
TEXAS PETROCHEMICALS CORPORATION, a Texas corporation (collectively the
"PLEDGOR"), to TEXAS COMMERCE BANK NATIONAL ASSOCIATION, a national banking
association, as agent (the "AGENT") for the benefit of the Agent and the
lenders (the "LENDERS") party to the Credit Agreement (as defined below).
PRELIMINARY STATEMENT
The Lenders, the Agent, ABN AMRO North America, Inc., as agent for ABN AMRO
Bank N.V. and The Bank of Nova Scotia, as co-documentation agents, and the
Pledgor entered into a Credit Agreement dated as of even date herewith (said
Credit Agreement, as it may hereafter be amended or otherwise modified from time
to time, being the "CREDIT AGREEMENT"), pursuant to which the Lenders agreed
to make the following Loans to the Pledgor: (a) revolving credit loans of up to
$40,000,000.00; (b) a term loan of up to $85,000,000.00; (c) a second term loan
of up to $45,000,000.00; and (d) a third term loan of up to $10,000,000.00. All
capitalized terms used herein and not otherwise defined shall have the meanings
as defined in the Credit Agreement.
The Pledgor is the owner of 1,000 shares of capital stock of the Texas
Butylene Chemical Corporation, a Texas corporation and wholly owned subsidiary
of the Pledgor (the "PLEDGED SHARES") evidenced by Certificate No. 2. It is a
condition precedent to the obligations of the Agent to make the Loans under the
Credit Agreement that the Pledgor shall have executed and delivered this Pledge
Agreement.
NOW THEREFORE, in consideration of the premises and in order to induce the
Lenders to make available to the Pledgor the Loans under the Credit Agreement
the Pledgor hereby agrees as follows:
SECTION 1. DEFINED TERMS
(a) The term "UCC" means the Uniform Commercial Code as in effect on
the date hereof in the State of Texas; PROVIDED that if by mandatory
provisions of law, the perfection or the effect or perfection or
non-perfection of the security interests granted pursuant to SECTION 2
hereof, as well as all other security interests created or assigned as
additional security for the Secured Obligations (as defined below in
SECTION 3) pursuant to the provisions of this Pledge Agreement, in any
Pledged Collateral is governed by the UCC as in effect in such other
jurisdiction other than Texas, "UCC" means the UCC as in effect in such
other jurisdiction for purposes of the provisions hereof relating to such
perfection or effect of perfection or non-perfection.
(b) The term "Issuer" means Texas Butylene Chemical Corporation, a
Texas corporation and wholly owned subsidiary of the Pledgor.
SECTION 2. PLEDGE. The Pledgor hereby pledges to the Agent for the benefit
of itself and the Lenders, and grants to the Agent for the benefit of itself and
the Lenders a security interest in, the following (the "PLEDGED COLLATERAL"):
(i) the Pledged Shares and the certificates representing the Pledged
Shares, and all dividends, cash, instruments and other property from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Shares;
(ii) all additional shares of stock of Issuer from time to time
acquired by the Pledgor in any manner, and the certificates representing
such additional shares, and all dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such shares; and
(iii) all proceeds of any of the foregoing.
The inclusion of proceeds in this Pledge Agreement does not authorize the
Pledgor to sell, dispose of or otherwise use the Pledged Collateral in any
manner not specifically authorized hereby.
SECTION 3. SECURITY FOR OBLIGATIONS. This Pledge Agreement secures the
prompt and complete (a) payment of all obligations of the Company to the Agent
and the Lenders now or hereafter existing under the Credit Agreement, the Notes
and the other Loan Documents, (b) the performance and observance by the Company
of all covenants and conditions contained in all of the Loan Documents, whether
for principal, interest, fees, expenses or otherwise and (c) the performance and
observance by the Pledgor of all covenants and conditions contained in this
Pledge Agreement (all such obligations, covenants and conditions described in
the foregoing clauses (a), (b), and (c) being hereinafter referred to as the
"SECURED OBLIGATIONS").
SECTION 4. DELIVERY OF PLEDGED COLLATERAL. All certificates or instruments
representing or evidencing the Pledged Collateral shall be delivered to and held
by or on behalf of the Agent pursuant hereto and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to the
Agent. Upon the occurrence and during the continuance of any Event of Default,
the Agent shall have the right, upon the instruction of the Majority Lenders and
without notice to the Pledgor, to transfer to or to register in the name of the
Agent or the Lenders or any of their respective nominees any or all of the
Pledged Collateral, subject only to the revocable rights specified in SECTION 7
(A) hereof. In addition, upon the occurrence and during the continuance of any
Event of Default, the Agent shall have the right at any such time to exchange
certificates or instruments representing or evidencing Pledged Collateral for
certificates or instruments of smaller or larger denominations.
2
SECTION 5. REPRESENTATIONS AND WARRANTIES. In addition to the
representations and warranties of the Pledgor under the Credit Agreement, the
Pledgor represents and warrants as follows:
(a) The Pledged Shares have been duly authorized and validly issued and are
fully paid and non-assessable.
(b) The Pledgor is the legal and beneficial owner of the Pledged Collateral
free and clear of any Lien except for Permitted Liens, if any, and Liens created
in favor of the Agent.
(c) The delivery of the Pledged Shares to the Agent and this Pledge
Agreement, together with the filing of an appropriate financing statement with
the Texas Secretary of State is sufficient to create a valid and perfected first
priority Lien in the Pledged Collateral, subject only to Permitted Liens, if
any, securing the Secured Obligations.
(d) The Pledged Shares constitute one hundred percent (100%) of the issued
and outstanding common stock of Issuer.
SECTION 6. FURTHER ASSURANCES. The Pledgor agrees that from time to time,
at the expense of the Pledgor, the Pledgor will promptly execute and deliver all
further instruments and documents, and take all further action that the Agent or
the Majority Lenders may reasonably request as being necessary or desirable, in
order to perfect and protect any security interest granted or purported to be
granted hereby or to enable the Agent or any Lender to exercise and enforce its
rights and remedies hereunder with respect to any Pledged Collateral. The
Pledgor will furnish to the Agent from time to time statements and schedules
further identifying and describing the Pledged Collateral and such other reports
in connection with the Pledged Collateral as the Agent or any Lender may
reasonably request, all in reasonable detail as the Agent or any Lender may
reasonably request. The Pledgor agrees to deliver, upon its receipt from
issuance thereof, to the Agent or any Lender any certificate or other evidence
of Issuer evidencing any Pledged Shares issued after the date hereof, and such
shall be in suitable form for transfer by delivery, or shall be accompanied by
duly executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to the Agent or such Lender.
SECTION 7. VOTING RIGHTS AND DIVIDENDS. (a) So long as no Event of Default
shall have occurred and be continuing and the Agent has not delivered the notice
specified in SECTION 7(B):
(i) The Pledgor shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Pledged Collateral or any part
thereof for any purpose not inconsistent with the terms of this Pledge
Agreement or the Loan Documents.
(ii) The Pledgor shall be entitled to receive and retain any and all
dividends paid in respect of the Pledged Collateral; PROVIDED, except as
expressly permitted by the Credit
3
Agreement, that any and all (A) dividends paid or payable other than in
cash in respect of, and instruments and other property received, receivable
or otherwise distributed in respect of, or in exchange for, any Pledged
Collateral, (B) dividends and other distributions paid or payable in cash
in respect of any Pledged Collateral in connection with a partial or total
liquidation or dissolution and (C) cash paid, payable or otherwise
distributed in redemption of, or in exchange for, any Pledged Collateral,
shall be, and shall be forthwith delivered to the Agent for the benefit of
the Lenders to be applied against the Obligations, or, if no Obligations
are outstanding, to hold as, Pledged Collateral and shall, if received by
the Pledgor, be received in trust for the benefit of the Agent, be
segregated from the other property or funds of the Pledgor, and be
forthwith delivered to the Agent as Pledged Collateral in the same form as
so received (with any necessary endorsement).
(iii) The Agent shall execute and deliver (or cause to be executed and
delivered) to the Pledgor all such proxies and other instruments as the
Pledgor may reasonably request for the purpose of enabling the Pledgor to
exercise the voting and other rights which it is entitled to exercise
pursuant to paragraph (i) above and to receive the dividends which it is
authorized to receive and retain pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuance of an Event of Default,
at the option of the Agent exercised in a writing sent to the Pledgor:
(i) All rights of the Pledgor to exercise the voting and other
consensual rights which it would otherwise be entitled to exercise pursuant
to SECTION 7(A)(I) shall cease, and the Agent shall thereupon have the sole
right to exercise such voting and other consensual rights.
(ii) All rights of the Pledgor to receive the dividends which it would
otherwise be entitled to receive and retain pursuant to SECTION 7(A)(II)
shall cease, and the Agent for the benefit of the Lenders shall thereupon
have the sole right to receive and apply against the Obligations or, if no
Obligations are outstanding, hold as Pledged Collateral such dividends and
interest.
(iii) All dividends which are received by the Pledgor contrary to the
provisions of paragraph (ii) of this Section shall be received in trust for
the benefit of the Agent, shall be segregated from other funds of the
Pledgor and shall be forthwith paid over to the Agent as Pledged Collateral
in the same form as so received (with any necessary endorsement).
SECTION 8. TRANSFERS AND OTHER LIENS; ADDITIONAL SHARES. (a) Except as
permitted in the Credit Agreement, the Pledgor shall not: (i) sell, assign (by
agreement, operation of law or otherwise) or otherwise dispose of, or grant any
option with respect to, any of the Pledged Collateral, or (ii) create or permit
to exist any Lien upon or with respect to any of the Pledged Collateral, except
for the Lien created by this Pledge Agreement, Permitted Liens and any other
Lien in favor of the Agent.
4
(b) The Pledgor agrees that it will cause Issuer not to issue any
stock or other securities (i) in substitution for the Pledged Shares,
except to the Pledgor and (ii) in addition to the Pledged Shares, except in
such amounts and to such holders as will maintain the percentage of
ownership set forth in SECTION 5(D) hereof for the Pledgor, except as
otherwise permitted by SECTION 8.02 of the Credit Agreement. Immediately
upon its acquisition (directly or indirectly) of any such substitute or
additional shares of stock or other securities of any Issuer, the Pledgor
will execute such documentation as requested by Agent pledging, and
evidencing the pledge hereunder of, such shares of stock or other
securities.
SECTION 9. AGENT APPOINTED ATTORNEY IN FACT. Effective upon the occurrence
and during the continuance of an Event of Default under any Loan Document, the
Pledgor hereby irrevocably appoints the Agent the Pledgor's attorney in fact,
with full authority in the place and stead of the Pledgor and in the name of the
Pledgor, from time to time in the Agent's sole discretion to take any action and
to execute any instrument which the Agent may deem necessary or advisable to
accomplish the purposes of this Pledge Agreement, including, without limitation,
to receive, endorse and collect all certificates or instruments made payable to
the Pledgor representing any dividend or other distribution in respect of the
Pledged Collateral or any part thereof and to give full discharge for the same.
SECTION 10. AGENT MAY PERFORM. If the Pledgor fails to perform any
agreement contained herein, the Agent may itself, during the existence of an
Event of Default, perform, or cause performance of, such agreement, and the
expenses of the Agent incurred in connection therewith shall be payable by the
Pledgor under SECTION 11.04 of the Credit Agreement.
SECTION 11. THE AGENT'S DUTIES. The powers conferred on the Agent hereunder
are solely to protect its interest in the Pledged Collateral and shall not
impose any duty upon it to exercise any such powers. Except for reasonable care
in the custody of any Pledged Collateral in its possession and the accounting
for moneys actually received by it hereunder, the Agent shall have no duty as to
any Pledged Collateral or as to the taking of any necessary steps to preserve
rights against prior parties or any other rights pertaining to any Pledged
Collateral. The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the Pledged Collateral in its possession if the
Pledged Collateral is accorded treatment substantially equal to that which the
Agent accords its own property, it being understood that the Agent shall not
have any responsibility for (a) ascertaining or taking action with respect to
calls, conversions, exchanges, maturities, tenders or other matters relative to
any Pledged Collateral, whether or not the Agent has or is deemed to have
knowledge of such matters, or (b) taking any necessary steps to preserve rights
against any parties with respect to any Pledged Collateral.
SECTION 12. REMEDIES UPON DEFAULT. If any Event of Default under the Loan
Documents shall have occurred and be continuing:
5
(a) The Agent may exercise in respect of the Pledged Collateral, in
addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a Agent on default under
the UCC (whether or not the UCC applies to the affected Pledged
Collateral), and the Agent may also, without notice except as specified
below, sell the Pledged Collateral or any part thereof in one or more
parcels at public or private sale, at any exchange, broker's board or at
any of the Agent's offices or elsewhere, for cash or credit, and upon such
other terms as may be commercially reasonable. The Pledgor agrees that at
least ten (10) days' notice to the Pledgor of the time and place of any
public sale or the time after which any private sale is to be made shall
constitute reasonable notification. The Agent shall not be obligated to
make any sale of Pledged Collateral regardless of notice of sale having
been given. The Agent may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was
so adjourned.
(b) Any cash received by the Agent in respect of any sale of,
collection from, or other realization upon all or any part of the Pledged
Collateral shall be applied by the Lenders against the outstanding
Obligations, and if no Obligations are outstanding, such cash may be held
by the Agent upon the instruction of the Majority Lenders as collateral
for, and/or then or at any time thereafter applied (after payment of any
amounts payable to the Agent pursuant to SECTION 11.04 of the Credit
Agreement) in whole or in part by the Lenders against, all or any part of
the Secured Obligations in such order as each Lender shall elect. Any
surplus of such cash or cash proceeds held by the Agent and remaining after
payment in full of all the Secured Obligations shall be paid over to the
Pledgor or to whomsoever may be lawfully entitled to receive such surplus.
(c) In connection with the sale of any Pledged Collateral, the Agent
is authorized, but not obligated, to limit prospective purchasers to the
extent deemed reasonably necessary or desirable by the Agent to render such
sale exempt from the registration requirements of the Securities Act of
1933, as amended (the "SECURITIES ACT"), and any applicable state
securities laws and regulations, and no sale so made in good faith by the
Agent shall be deemed not to be "commercially reasonable" solely as a
result of such limit of prospective purchasers.
(d) All rights and remedies of the Agent for the benefit of itself and
the Lenders expressed herein are in addition to all other rights and
remedies possessed by the Agent in the Loan Documents and any other
agreement or instrument relating to the obligations.
(e) In connection with a public or private sale by the Agent pursuant
to this SECTION 12 of the Pledged Collateral or any part thereof, the Agent
may disclose, in accordance with SECTION 11.11 of the Credit Agreement, to
prospective purchasers any and all non-public information available to the
Agent which pertains to (i) Issuer of the Pledged Collateral, or (ii) the
Pledgor, provided in the case of the Pledgor, such non-public information
is material to said issuer, its financial condition or the Pledged
Collateral.
6
SECTION 13. PRIVATE SALES; FURTHER ASSURANCES. The Pledgor recognizes that
the Agent may be unable to effect a public sale of any or all of the Pledged
Collateral by reason of certain prohibitions contained in the laws of any
jurisdiction outside the United States or in the United States Securities Act of
1933 (the "1933 ACT") and applicable state securities laws, but may instead be
compelled to resort to one or more private sales thereof to a restricted group
of purchasers who will be obliged to agree, among other things, to acquire such
Pledged Collateral for their own account for investment and not with a view to
the distribution or resale thereof. The Pledgor acknowledges and agrees that any
such private sale by the Agent may result in prices and other terms less
favorable to the seller than if such sale were a public sale and,
notwithstanding such circumstances, agrees that no such private sale shall, to
the extent permitted by applicable law, be deemed not to be "commercially
reasonable" solely as a result of such prices and other sale terms. The Agent
shall not be under any obligation to delay a sale of any of the Pledged
Collateral for the period of time necessary to permit Issuer of such securities
to register such securities under the laws of any jurisdiction outside the
United States, under the 1933 Act or under any applicable state securities laws,
even if Issuer would agree to do so. If the Agent is able to lawfully effect a
public sale without registration of the Pledged Collateral under the laws of any
jurisdiction outside the United States, under the 1933 Act or under any
applicable state securities laws, then the Agent may conduct such public sale of
the Pledged Collateral, rather than a private sale, if the Agent would realize a
higher sales price in such public sale.
SECTION 14. AMENDMENTS. No amendment or waiver of any provision of this
Pledge Agreement, nor consent to any departure by the Pledgor herefrom, shall in
any event be effective unless the same shall be made in accordance with SECTION
11.01 of the Credit Agreement and signed by the Pledgor and the Agent, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
SECTION 15. ADDRESSES FOR NOTICES. All notices and other communications
provided for hereunder shall be given in the manner and at the addresses of the
Pledgor and the Agent as set forth in the Credit Agreement and shall become
effective, as specified in the Credit Agreement.
SECTION 16. WAIVER OF MARSHALLING. All rights of marshalling of assets of
the Pledgor, including any such right with respect to the Pledged Collateral,
are hereby waived by the Pledgor.
SECTION 17. LIMITATION BY LAW. All rights, remedies and powers provided in
this Pledge Agreement may be exercised only to the extent that the exercise
thereof does not violate any applicable provision of law, and all the provisions
of this Pledge Agreement are intended to be subject to all applicable mandatory
provisions of law which may be controlling from time to time and to be limited
to the extent necessary so that they will not render this Pledge Agreement
invalid, unenforceable, in whole or in part, or not entitled to be recorded,
registered or filed under the provisions of any applicable law.
7
SECTION 18. SEPARABILITY. Should any clause, sentence, paragraph,
subsection or Section of this Pledge Agreement be judicially declared to be
invalid, unenforceable or void, such declaration will not have the effect of
invalidating or voiding the remainder of this Pledge Agreement, and the parties
hereto agree that the part or parts of this Pledge Agreement so held to be
invalid, unenforceable or void will be deemed to have been stricken herefrom by
the parties hereto, and the remainder of this Pledge Agreement will have the
same force and effectiveness as is such stricken part or parts had never been
included herein.
SECTION 19. NO WAIVER; REMEDIES. No failure on the part of the Agent to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 20. CONTINUING SECURITY INTEREST; TRANSFER OF NOTES. This Pledge
Agreement shall create a continuing security interest in the Pledged Collateral
and shall (a) remain in full force and effect until payment in full of the
Secured Obligations, (b) be binding upon the Pledgor, its successors and
assigns, and (c) inure to the benefit of the Agent for the benefit of itself and
the Lenders and their respective successors, transferees and assigns. Without
limiting the generality of the foregoing clause (c), any Lender may assign or
otherwise transfer all or a portion of its interest, rights and obligations
under the Notes held by it pursuant to SECTION 11.10 of the Credit Agreement.
Upon the payment in full of the Secured Obligations, the Pledgor shall be
entitled to the return, upon its request and at its expense, of such of the
Pledged Collateral as shall not have been sold or otherwise applied against the
Secured Obligations pursuant to the terms hereof; PROVIDED, that the Pledgor
shall otherwise be entitled to such return of the Pledged Collateral upon
payment in full of all Secured Obligations other than those arising under
SECTION 11.05 of the Credit Agreement if the Agent is not on notice of any fact,
circumstance, event or claim which reasonable construed could give rise to an
obligation of the Pledgor under such Section.
SECTION 21. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties contained in this Pledge Agreement or made in writing by the
Pledgor in connection herewith are true and correct in all material respect when
made or deemed to be made and shall survive the execution and delivery of this
Pledge Agreement until repayment of the Secured Obligations. Any investigation
by the Agent shall not diminish in any respect whatsoever its rights to reply on
such representations and warranties.
SECTION 22. INTERPRETATION.
(a) In this Pledge Agreement, unless a clear contrary intention appears:
(i) the singular number includes the plural number and VICE VERSA;
8
(ii) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Pledge Agreement as a whole and not to any
particular Article, Section or other subdivision;
(iii) reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are permitted by
this Pledge Agreement, and reference to a Person in a particular capacity
excludes such Person in any other capacity or individually, PROVIDED that
nothing in this clause (iii) is intended to authorize any assignment not
otherwise permitted by this Pledge Agreement.
(iv) reference to any agreement, document or instrument means such
agreement, document or instrument as amended, supplemented or modified and in
effect from time to time in accordance with the terms thereof and, if
applicable, the terms hereof, and reference to any notes includes any notes
issued pursuant to any Loan Document in extension or renewal thereof and in
substitution or replacement therefor;
(v) unless the context indicates otherwise, reference to any Article,
Section, Schedule or Exhibit means such Article or Section hereof or such
Schedule or Exhibit hereto;
(vi) the words "including" (and with correlative meaning "include")
means including, without limiting the generality of any description preceding
such term;
(vii) with respect to the determination of any period of time, the word
"from" means "from and including" and the word "to" means "to but
excluding," and
(viii) reference to any law means such as amended, modified, codified or
reenacted, in whole or in part, and in effect from time to time.
(b) The Section headings herein are for convenience only and shall not
affect the construction hereof.
(c) No provision of this Pledge Agreement shall be interpreted or
construed against any Person solely because that Person or its legal
representative drafted such provision.
SECTION 23. GOVERNING LAW; TERMS. THIS PLEDGE AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, EXCEPT AS
REQUIRED BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT THE
VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR PLEDGED COLLATERAL ARE GOVERNED BY THE
LAWS OF A JURISDICTION OTHER THAN THE STATE OF TEXAS.
9
SECTION 24. INCONSISTENCIES. In the event of any irreconcilable
inconsistencies between any provision of this Pledge Agreement and any provision
of the Credit Agreement, the provisions of the Credit Agreement shall control.
SECTION 25. SUBMISSION TO JURISDICTION. (a) ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS PLEDGE AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY BE
BROUGHT IN THE COURTS OF THE STATE OF TEXAS, IN HARRIS COUNTY OR THE UNITED
STATES FOR THE SOUTHERN DISTRICT OF TEXAS AND, BY EXECUTION AND DELIVERY OF THIS
PLEDGE AGREEMENT, THE PLEDGOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS WITH RESPECT TO ANY SUCH ACTION OR PROCEEDINGS, THE PLEDGOR FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT ITS ADDRESS PROVIDED IN
SECTION 15, SUCH SERVICE TO BECOME EFFECTIVE THIRTY (30) DAYS AFTER SUCH
MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT OR ANY LENDER TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE PLEDGOR IN ANY OTHER JURISDICTION.
(b) THE PLEDGOR HEREBY IRREVOCABLY WAIVES ANY OBJECTIONS WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR
PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS PLEDGE AGREEMENT BROUGHT
IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY
WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION
OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.
SECTION 26. WAIVER OF JURY TRIAL. THE PLEDGOR AND AGENT HEREBY WAIVE, TO
THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS PLEDGE AGREEMENT
OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH
MAY, IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM OR
RELATING TO ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THIS PLEDGE
AGREEMENT, AND AGREE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
10
SECTION 27. FINAL AGREEMENT OF THE PARTIES. THIS PLEDGE AGREEMENT
(INCLUDING THE SCHEDULE HERETO), THE CREDIT AGREEMENT AND THE OTHER LOAN
DOCUMENTS CONSTITUTE A "LOAN AGREEMENT" AS DEFINED IN SECTION 26.02(a) OF THE
TEXAS BUSINESS AND COMMERCE CODE, AND REPRESENT THE FINAL AGREEMENT AMONG THE
PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the Pledgor has executed and delivered this Pledge
Agreement effective as of the date first above written.
7
TPC FINANCE CORP.
By: /s/ SUSAN O. RHENEY
---------------
Susan O. Rheney
President
TEXAS PETROCHEMICALS CORPORATION,
successor by merger to TPC Finance
Corp.
By: /s/ CLAUDE E. MANNING
-----------------
Claude E. Manning
Vice President
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION,
as Agent
By: /s/ MARY C. ARNOLD
--------------
Mary C. Arnold
Vice President
11
IRREVOCABLE STOCK OR BOND POWER
FOR VALUE RECEIVED, the undersigned does (do) hereby sell, assign and transfer
to
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(SOCIAL-SECURITY OR TAXPAYER IDENTIFYING NO.)
IF STOCK shares of the stock of
COMPLETE represented by Certificate(s) No(s) inclusive,
THIS registered in the name(s) of
PORTION
IF BONDS bonds of in the principal amount of $,
COMPLETE No(s) inclusive,
THIS registered in the name(s) of
PORTION
The undersigned does (do) hereby irrevocably constitute and
appoint attorney to transfer the said stock or bonds(s), as
the case may be, on the books of said Company, with full
power of substitution in the premises.
TPC Finance Corp.
By: /s/ SUSAN O. RHENEY
- --------------------------------------------------------------------------------
Susan O. Rheney
President
- --------------------------------------------------------------------------------
(PERSON(S) EXECUTING THIS POWER SIGN(S) HERE)
Dated _____________________________________________
Signature(s) Guaranteed
IMPORTANT - READ CAREFULLY
The signature(s) to this Power must correspond with the name(s) as written upon
the face of the certificate(s) or bond(s) in every particular without alteration
or enlargement or any change whatever. Signature guarantee should be made by a
member or member organization of the New York Stock Exchange, members of other
Exchanges having signatures on file with transfer agent or by a commercial bank
or trust company having its principal office or correspondent in the City of New
York. Notary acknowledgements are not acceptable.
ORGANIZED UNDER THE LAWS OF THE STATE OF TEXAS
NUMBER SHARES
2 1,000
Texas Butylene Chemical Corporation
The Corporation is authorized to issue 5,000,000 Shares -- No Par Value
This certifies that TEXAS PETROCHEMICAL CORPORTATION is the owner of ONE
THOUSAND (1,000) fully paid and non-assessable Shares of the above Corporation
transferable only on the books of the Corporation by the holder hereof in person
or by duly authorized Attorney upon surrender of this Certificate properly
endorsed.
In Witness Whereof, the said Corporation has caused this Certificate to be
signed by its duly authorized officers and to be sealed with the Seal of the
Corporation.
Dated June 21, 1984
/s/ LA NELL COOKE /s/ JOHN T. SHETLON
- ----------------- -------------------
La Nell Cooke John T. Shelton
SECRETARY PRESIDENT
Each share of Capital Stock of Texas Butylene Chemical Corporation has a
stated value of One Dollar ($1.00) per share.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations. Additional abbreviations may also
be used though not in the list.
TEN COM -- as tenants in common.............. UNIF GIFT MIN ACT -- .......Custodian.... (Minor)
TEN ENT -- as tenants by the entireties under Uniform Gifts to Minors Act.........(State)
CT TEN -- as joint tenants with right of
survivorship and not as tenants in
common
FOR VALUE RECEIVED, THE UNDERSIGNED HEREBY SELLS, ASSIGNS AND TRANSFERS UNTO
- --------------------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
................................................................................
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE
................................................................................
......................................................................... Shares
represented by the within Certificate and, hereby irrevocably constitutes and
appoints........................................................................
Attorney to transfer the said shares on the books of the within-named
Corporation with full power of substitution in its premises.
Dated ......................................................................
In presence of ...................................................... .