Exhibit 10.2
Execution Copy
_____________________________________________________________________________
TRANSMONTAIGNE INC.
$100,000,000
SENIOR NOTES
AMENDED AND RESTATED MASTER SHELF AGREEMENT
(Including Guarantees of Subsidiaries)
Dated as of February 14, 2000
______________________________________________________________________________
Contains confidentiality obligations in paragraph 2D.
TABLE OF CONTENTS
(Not Part of Agreement)
1. EXISTING NOTES; AUTHORIZATION OF ISSUE OF NOTES 1
1A. Existing Notes. 1
1B. Authorization of Shelf Notes. 2
2. PURCHASE AND SALE OF NOTES. 2
2A. Facility. 2
2B. Issuance Period. 2
2C. Periodic Spread Information. 3
2D. Request for Purchase.. 3
2E. Rate Quotes. 4
2F. Acceptance. 5
2G. Market Disruption. 5
2H. Closing. 5
2I. Fees. 6
3. CONDITIONS OF CLOSING. 7
3A. Certain Documents. 7
3B. [Intentionally Omitted].. 8
3C. Perfection of Security.. 8
3D. Payment of Fees. 9
3E. Representations and Warranties; No Default. 9
3F. Purchase Permitted by Applicable Laws. 9
3G. Legal Matters. 9
3H. Proceedings. 9
3I. Facility Fee. 9
4. PREPAYMENTS. 9
4A. Required Prepayments.. 9
4A(1). Scheduled Prepayments. 9
4A(2). Prepayments under the Bank Agreement. 10
4B. Optional Prepayment With Yield-Maintenance Amount. 10
4C. Notice of Optional Prepayment. 10
4D. Application of Prepayments. 11
4E. Retirement of Notes.. 11
5. AFFIRMATIVE COVENANTS. 11
5A. Financial Statements and Reports. 11
(i)
5B. Information Required by Rule 144A. 17
5C. Inspection of Property. 17
5D. Covenant to Secure Notes Equally. 17
5E. Taxes and Other Charges; Accounts Payable. 18
5F. Types of Business. 18
5G. Maintenance of Properties. 18
5H. Statutory Compliance.. 19
5I. Compliance with Material Agreements. 19
5J. Trading Policy. 19
5K. Subordinated Debentures.. 19
5L. Inventory Accounting.. 19
5M. Insurance. 19
5N. ERISA, etc. 20
5O. Open Positions. 21
5P. Environmental Laws. 21
5Q. Credit Fee. 21
5R. Collateral; Subsidiaries. 23
5S. Landlord and Warehouseman Waivers. 24
5T. Environmental Covenants. 24
5U. Environmental Indemnities. 25
5V. Borrowing Base Provisions. 26
6. NEGATIVE COVENANTS. 28
6A. Certain Financial Tests. 28
6A(1) Fixed Charge Coverage. 28
6A(2) Consolidated Tangible Net Worth. 28
6A(3) Maximum Leverage. 29
6A(4) Minimum Current Ratio. 29
6A(5) Capital Expenditures. 29
6B. Distributions. 29
6C. Liens, Indebtedness and Other Restrictions. 30
6C(1) Liens. 30
6C(2) Indebtedness. 31
6C(3) Guarantees; Letters of Credit. 33
6C(4) Investments and Acquisitions. 33
6C(5) Merger, Consolidation and Dispositions of Assets. 34
6C(6) Lease Obligations. 35
6C(7) Sale/Leaseback. 35
6D. Issuance of Stock by Subsidiaries;
Subsidiary Distributions. 35
6E. Derivative Contracts.. 36
6F. Negative Pledge Clauses.. 36
6G. Transactions with Affiliates. 36
(ii)
6H. Inactive Subsidiaries.. 36
6I. Interest Rate Protection. 36
6J. Interest Rate Protection Agreements. 36
6K. Amendments to Bank Agreement. 37
7. EVENTS OF DEFAULT. 37
7A. Acceleration. 37
7B. Rescission of Acceleration. 40
7C. Notice of Acceleration or Rescission. 41
7D. Other Remedies. 41
7E. Annulment of Defaults. 41
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. 41
8A. Organization. 42
8B. Financial Statements. 43
8C. Actions Pending. 44
8D. Outstanding Debt. 44
8E. Title to Properties. 44
8F. Taxes. 44
8G. Conflicting Agreements and Other Matters. 44
8H. Offering of Notes. 45
8I. Use of Proceeds. 45
8J. ERISA. 46
8K. Governmental Consent. 46
8L. Disclosure. 46
8M. Hostile Tender Offers. 47
8N. Licenses, etc. 47
8O. Certain Business Representations. 47
8P. Environmental Regulations. 48
8Q. Foreign Trade Regulations; Government Regulation. 50
8R. Facility Conversion Date.. 50
8S. Bank Agreement. 50
8T. Material Agreements.. 50
8U. Minimum Petroleum Products Inventory Requirements. 50
9. REPRESENTATIONS OF THE PURCHASERS. 50
9A. Nature of Purchase. 51
9B. Source of Funds. 51
10. DEFINITIONS. 51
10A. Yield-Maintenance Terms. 51
10B. Other Terms. 52
10C. Accounting Principles, Terms and Determinations. 74
(iii)
11. GUARANTEES. 74
11A. Guarantees of Obligations. 74
11B. Continuing Obligation. 74
11C. Waivers with Respect to Obligations. 75
11D. Holders' Power to Waive, etc. 76
11E. Information Regarding the Company, etc. 77
11F. Certain Guarantor Representations. 77
11G. Subrogation. 78
11H. Subordination. 78
11I. Future Subsidiaries; Further Assurances. 78
12. MISCELLANEOUS. 79
12A. Note Payments. 79
12B. Expenses. 79
12C. Consent to Amendments. 80
12D. Form, Registration, Transfer and Exchange
of Notes; Lost Notes. 80
12E. Persons Deemed Owners; Participations. 81
12F. Survival of Representations and Warranties;
Entire Agreement; Time of the Essence. 81
12G. Successors and Assigns. 82
12H. Notices. 82
12I. Payments Due on Non-Business Days. 82
12J. Severability. 82
12K. Descriptive Headings. 83
12L. Satisfaction Requirement. 83
12M. Maximum Interest Payable. 83
12N. Governing Law. 84
12O. WAIVER OF JURY TRIAL; SUBMISSION TO JURISDICTION;
CERTAIN OTHER WAIVERS. 84
12P. Counterparts. 85
12Q. Binding Agreement. 85
12R. Effective Date. 85
12S. References to Existing Master Shelf Agreement. 87
12T. Waiver. 87
(iv)
INFORMATION SCHEDULE
SCHEDULE 5A(i) -- Form of Covenant Compliance Certificate
Form of Credit Fee Compliance Certificate
SCHEDULE 5A(iii)(i) -- Form of Borrowing Base Certificate
SCHEDULE 5V(i) -- Initial Borrowing Base
SCHEDULE 6A(5) -- Committed Capital Expenditures
SCHEDULE 5Q -- Credit Fee Computation Covenants
SCHEDULE 5J -- Risk and Product Management Policy
SCHEDULE 8A -- Company and Subsidiary Information
SCHEDULE 8D -- Financing Debt, Liens, Guarantees and Investments
SCHEDULE 8G -- List of Agreements Restricting Debt
SCHEDULE 8J -- Defined Benefit Plans
SCHEDULE 8P -- Environmental Information
SCHEDULE 8T -- Material Agreements
EXHIBIT A -- FORM OF NOTE
EXHIBIT B -- FORM OF REQUEST FOR PURCHASE
EXHIBIT C -- FORM OF CONFIRMATION OF ACCEPTANCE
EXHIBIT D -- FORM OF OPINION OF COMPANY'S COUNSEL
(v)
AMENDED AND RESTATED MASTER SHELF AGREEMENT
This AMENDED AND RESTATED MASTER SHELF AGREEMENT (this Agreement) is
entered into and effective as of February 14, 2000, among TransMontaigne Inc., a
Delaware corporation formerly known as TransMontaigne Oil Company (the
Company), The Prudential Insurance Company of America, for itself and on
behalf of each Prudential Affiliate (as hereinafter defined) which becomes bound
by certain provisions of this Agreement as hereinafter provided (Prudential),
and U.S. Private Placement Fund (U.S. Fund; and, together with Prudential, the
Purchasers). The parties hereto agree as follows:
W I T N E S S E T H
WHEREAS, the Company and the Purchasers entered into that certain
Master Shelf Agreement, dated as of April 17, 1997, as amended by Letter
Amendment No. 1 dated March 31, 1998, Letter Amendment No. 2 dated as of June
30, 1998, Letter Amendment No. 3 dated as of October 30, 1998, Letter Amendment
No. 4 dated as of March 25, 1999, Letter Amendment No. 5 dated as of June 29,
1999, Letter Amendment No. 6 dated as of September 30, 1999 and Letter Amendment
No. 7 dated as of December 31, 1999 (as amended, the Existing Master Shelf
Agreement);
WHEREAS, pursuant to the Existing Master Shelf Agreement the Company
issued and has outstanding (i) to Prudential its 7.85% Senior Notes, Series A,
due April 17, 2003 in the original principal amount of $45,000,000 and its 7.22%
Senior Notes, Series B, due October 17, 2004 in the original principal amount of
$25,000,000, (ii) and to U.S. Fund (a Prudential Affiliate) its 7.85% Senior
Notes, Series A, due April 17, 2003 in the original principal amount of
$5,000,000 (collectively, the Existing Notes); and
WHEREAS, the parties hereto wish to amend and restate the Existing
Master Shelf Agreement in its entirety to, inter alia, (i) restate the Existing
Master Shelf Agreement into a single document; (ii) modify and waive certain
negative covenants, and (iii) provide for the grant by the Company and the
Guarantors of additional collateral to secure the Company's obligations under
this Agreement, the Notes and the other Loan Documents.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and for other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Existing Master Shelf
Agreement is hereby amended and restated in its entirety as follows:
1. EXISTING NOTES; AUTHORIZATION OF ISSUE OF NOTES.
1A. Existing Notes. Pursuant to the Existing Master Shelf
Agreement, the Company authorized, issued and delivered the Existing Notes in
the aggregate original principal amount of $75,000,000 of which $50,000,000 is
outstanding, to mature as stated in each such note, to bear interest on the
unpaid balance from the date thereof until the principal shall have become due
and payable at the rate set forth on each such note and on overdue payments at
the rate specified on each such note. The term Existing Notes as used herein
shall include each Existing Note issued and delivered pursuant to any provision
of the Existing Master Shelf Agreement and each Existing Note delivered in
substitution or exchange for any other Existing Note pursuant to any provision
of this Agreement. The Company hereby acknowledges and agrees that each Existing
Note is a valid and binding obligation of the Company and that any reference in
the Existing Notes to the Existing Master Shelf Agreement shall mean and be a
reference to this Agreement, as this Agreement may hereafter be amended or
modified.
1B. Authorization of Shelf Notes. The Company will authorize the
issue of its senior promissory notes (the "Shelf Notes") in the aggregate
principal amount of $25,000,000, to be dated the date of issue thereof; to
mature, in the case of each Shelf Note so issued, no more than 12 years after
the date of original issuance thereof; to have an average life, in the case of
each note so issued, of no more than 10 years after the date of original
issuance thereof; to bear interest on the unpaid balance thereof from the date
thereof at the rate per annum, and to have such other particular terms, as shall
be set forth, in the case of each Shelf Note so issued, in the Confirmation of
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Acceptance with respect to such Shelf Note delivered pursuant to paragraph 2F;
and to be substantially in the form of Exhibit A attached hereto. The term
"Shelf Notes" as used herein shall include each Shelf Note delivered pursuant to
any provision of this Agreement and each Shelf Note delivered in substitution or
exchange for any such Shelf Note pursuant to any such provision.
2. PURCHASE AND SALE OF NOTES.
2A. Facility. Prudential is willing to consider, in its sole
discretion and within limits which may be authorized for purchase by Prudential
and Prudential Affiliates from time to time, the purchase of Shelf Notes
pursuant to this Agreement. The willingness of Prudential to consider such
purchase of Shelf Notes is herein called the "Facility". At any time, the
aggregate principal amount of Shelf Notes stated in paragraph 1B, minus the
aggregate principal amount of Shelf Notes purchased and sold pursuant to this
Agreement prior to such time, minus the aggregate principal amount of Accepted
Notes (as hereinafter defined) which have not yet been purchased and sold
hereunder prior to such time is herein called the "Available Facility Amount" at
such time. NOTWITHSTANDING THE WILLINGNESS OF PRUDENTIAL TO CONSIDER PURCHASES
OF SHELF NOTES, THIS AGREEMENT IS ENTERED INTO ON THE EXPRESS UNDERSTANDING THAT
NEITHER PRUDENTIAL NOR ANY PRUDENTIAL AFFILIATE SHALL BE OBLIGATED TO MAKE OR
ACCEPT OFFERS TO PURCHASE SHELF NOTES, OR TO QUOTE RATES, SPREADS OR OTHER TERMS
WITH RESPECT TO SPECIFIC PURCHASES OF SHELF NOTES, AND THE FACILITY SHALL IN NO
WAY BE CONSTRUED AS A COMMITMENT BY PRUDENTIAL OR ANY PRUDENTIAL AFFILIATE.
2B. Issuance Period. The period during which Shelf Notes may be
issued and sold pursuant to this Agreement is herein called the "Issuance
Period". Pursuant to the terms of the Existing Master Shelf Agreement the
Issuance Period has terminated; provided, however, that the Issuance Period may
be reinstated for such time and upon such terms and conditions as may be agreed
upon in writing by the Company and Prudential.
2C. Periodic Spread Information. Provided no Default or Event of
Default exists, not later than 9:30 A.M. (New York City local time) on a
Business Day during the Issuance Period if there is an Available Facility Amount
on such Business Day, the Company may request by telecopier or telephone, and
Prudential will, to the extent reasonably practicable, provide to the Company on
such Business Day (or, if such request is received after 9:30 A.M. (New York
City local time) on such Business Day, on the following Business Day),
information (by telecopier or telephone) with respect to various spreads at
which Prudential or Prudential Affiliates might be interested in purchasing
Shelf Notes of different average lives; provided, however, that the Company may
not make such requests more frequently than once in every five Business Days or
such other period as shall be mutually agreed to by the Company and Prudential.
The amount and content of information so provided shall be in the sole
discretion of Prudential but it is the intent of Prudential to provide
information which will be of use to the Company in determining whether to
initiate procedures for use of the Facility. Information so provided shall not
constitute an offer to purchase Shelf Notes, and neither Prudential nor any
Prudential Affiliate shall be obligated to purchase Shelf Notes at the spreads
specified. Information so provided shall be representative of potential interest
only for the period commencing on the day such information is provided and
ending on the earlier of the fifth Business Day after such day and the first day
after such day on which further spread information is provided. Prudential may
suspend or terminate providing information pursuant to this paragraph 2C if, in
its sole discretion, it determines that there has been an adverse change in the
credit quality of the Company after the date of this Agreement.
2D. Request for Purchase.
(i) The Company may from time to time during the Issuance Period
make requests for purchases of Shelf Notes (each such request being a "Request
for Purchase"). Each Request for Purchase shall be made to Prudential by
telecopier and confirmed by nationwide overnight delivery service, and shall (a)
specify the aggregate principal amount of Shelf Notes covered thereby, which
shall not be less than $10,000,000 and not be greater than the Available
2
Facility Amount at the time such Request for Purchase is made, (b) specify the
principal amounts, final maturities, installment payment dates and amounts and
interest payment periods (quarterly or semi-annual in arrears) of the Shelf
Notes covered thereby, (c) specify the use of proceeds of such Shelf Notes, (d)
specify the proposed day for the closing of the purchase and sale of such Shelf
Notes, which shall be a Business Day during the Issuance Period not less than 10
days and not more than 20 days after the making of such Request for Purchase,
(e) specify the number of the account and the name and address of the depository
institution to which the purchase prices of such Shelf Notes are to be
transferred on the Closing Day for such purchase and sale, (f) certify that the
representations and warranties contained in paragraph 8 are true on and as of
the date of such Request for Purchase except to the extent of changes caused by
the transactions herein contemplated and that there exists on the date of such
Request for Purchase no Event of Default or Default, and (g) be substantially in
the form of Exhibit B attached hereto. Each Request for Purchase shall be in
writing and shall be deemed made when received by Prudential.
(ii) Prudential agrees, to the extent the information provided
pursuant to clause (i)(c) of paragraph 2D (whether in connection with the
purchase of Shelf Notes or the purchase of the Existing Notes under the Existing
Master Shelf Agreement) contains Confidential Information, Prudential will use
its best efforts to hold in confidence and not to disclose the Confidential
Information, except (a) as may be required by law, and (b) to Prudentials and
its subsidiaries' officers, directors and employees, and to Prudentials agents
and professional consultants in connection with the purchase of the Notes to
which such Request for Purchase relates; provided that Prudential will be free,
after notice to the Company, to correct any false or misleading information
which may become public concerning Prudentials relationship to the Company or
to the purchase of such Notes.
"Confidential Information" shall mean information about the use
of proceeds specified in such Request for Purchase, but does not include
information (i) which was publicly known, or otherwise known to Prudential, at
the time of disclosure, (ii) which subsequently becomes publicly known through
no act or omission by Prudential, or (iii) which otherwise becomes known to
Prudential, other than through disclosure by the Company.
Notwithstanding the foregoing, the Company acknowledges that
Prudential, any Purchaser or holder of any Note and each Purchaser of Accepted
Notes specified in a Request for Purchase may disclose Confidential Information
to (i) any Purchaser or holder of any Note, (ii) any Person to which it offers
to sell any Note or any part thereof, (iii) any Person to which it sells or
offers to sell a participation in all or any part of any Note, (iv) any Person
from which it offers to purchase any security of the Company, (v) any federal or
state regulatory authority having jurisdiction over it, (vi) the National
Association of Insurance Commissioners or any similar organization, or (vii) any
other Person to which such delivery or disclosure may be necessary or
appropriate (a) in compliance with any law, rule, regulation or order applicable
to it, (b) in response to any subpoena or other legal process or informal
investigative demand or (c) in connection with any litigation to which it is a
party.
2E. Rate Quotes. Not later than five Business Days after the
Company shall have given Prudential a Request for Purchase pursuant to paragraph
2D, Prudential may provide (by telephone promptly thereafter confirmed by
telecopier, in each case no earlier than 9:30 A.M. and no later than 1:30 P.M.
New York City local time) interest rate quotes for the several principal
amounts, maturities, installment payment schedules, and interest payment periods
of Shelf Notes specified in such Request for Purchase. Each quote shall
represent the interest rate per annum payable on the outstanding principal
balance of such Shelf Notes until such balance shall have become due and
payable, at which Prudential or a Prudential Affiliate would be willing to
purchase such Shelf Notes at 100% of the principal amount thereof.
2F. Acceptance. Within 30 minutes after Prudential shall have
provided any interest rate quotes pursuant to paragraph 2E or, in the event that
due to conditions in the market place it shall not be feasible to hold such
interest rate quotes open 30 minutes, such shorter period as Prudential may
specify to the Company (such period being the "Acceptance Window"), the Company
may, subject to paragraph 2G, elect to accept such interest rate quotes as to
3
not less than $10,000,000 aggregate principal amount of the Shelf Notes
specified in the related Request for Purchase. Such election shall be made by an
Authorized Officer of the Company notifying Prudential by telephone or
telecopier within the Acceptance Window (but not earlier than 9:30 A.M. or later
than 1:30 P.M., New York City local time) that the Company elects to accept such
interest rate quotes, specifying the Shelf Notes (each such Shelf Note being an
"Accepted Note") as to which such acceptance (an "Acceptance") relates. The day
the Company notifies an Acceptance with respect to any Accepted Notes is herein
called the "Acceptance Day" for such Accepted Notes. Any interest rate quotes as
to which Prudential does not receive an Acceptance within the Acceptance Window
shall expire, and no purchase or sale of Shelf Notes hereunder shall be made
based on such expired interest rate quotes. Subject to paragraph 2G and the
other terms and conditions hereof, the Company agrees to sell to Prudential or a
Prudential Affiliate, and Prudential agrees to purchase, or to cause the
purchase by a Prudential Affiliate of, the Accepted Notes at 100% of the
principal amount of such Shelf Notes. As soon as practicable following the
Acceptance Day, the Company, Prudential and each Prudential Affiliate which is
to purchase any such Accepted Notes will execute a confirmation of such
Acceptance substantially in the form of Exhibit C attached hereto (a
"Confirmation of Acceptance").
2G. Market Disruption. Notwithstanding the provisions of
paragraph 2F, if Prudential shall have provided interest rate quotes pursuant to
paragraph 2E and thereafter prior to the time an Acceptance with respect to such
quotes shall have been notified to Prudential in accordance with paragraph 2F
there shall occur a general suspension, material limitation, or significant
disruption of trading in securities generally on the New York Stock Exchange or
in the market for U.S. Treasury securities and other financial instruments, then
such interest rate quotes shall expire, and no purchase or sale of Shelf Notes
hereunder shall be made based on such expired interest rate quotes. If the
Company thereafter notifies Prudential of the Acceptance of any such interest
rate quotes, such Acceptance shall be ineffective for all purposes of this
Agreement, and Prudential shall promptly notify the Company that the provisions
of this paragraph 2G are applicable with respect to such Acceptance.
2H. Closing.
2H(1) [Intentionally Omitted].
2H(2) Closings. Not later than 11:30 A.M. (New York City local
time) on the Closing Day for any Accepted Notes, the Company will deliver to
each Purchaser listed in the Confirmation of Acceptance relating thereto at the
offices of Prudential Capital Group at 2200 Ross Avenue, Suite 4200E, Dallas,
Texas 75201 the Accepted Notes to be purchased by such Purchaser in the form of
one or more Shelf Notes in authorized denominations as such Purchaser may
request for each Series of Accepted Notes to be purchased on the Closing Day,
dated the Closing Day and registered in such Purchaser's name (or in the name of
its nominee), against payment of the purchase price thereof by transfer of
immediately available funds for credit to the Company's account specified in the
Request for Purchase of such Shelf Notes.
2H(3) Rescheduled Closings. If the Company fails to tender to any
Purchaser the Accepted Notes to be purchased by such Purchaser on the scheduled
Closing Day for such Accepted Notes as provided above in this paragraph 2H, or
any of the conditions specified in paragraph 3 shall not have been fulfilled by
the time required on such scheduled Closing Day, the Company shall, prior to
1:00 P.M., New York City local time, on such scheduled Closing Day notify such
Purchaser in writing whether (x) such closing is to be rescheduled (such
rescheduled date to be a Business Day during the Issuance Period not less than
one Business Day and not more than 30 Business Days after such scheduled Closing
Day (the "Rescheduled Closing Day") and certify to such Purchaser that the
Company reasonably believes that it will be able to comply with the conditions
set forth in paragraph 3 on such Rescheduled Closing Day and that the Company
will pay the Delayed Delivery Fee in accordance with paragraph 2I(2) or (y) such
closing is to be canceled as provided in paragraph 2I(3). In the event that the
Company shall fail to give such notice referred to in the preceding sentence,
such Purchaser may at its election, at any time after 1:00 P.M., New York City
local time, on such scheduled Closing Day, notify the Company in writing that
such closing is to be canceled as provided in paragraph 2I(3).
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2I. Fees.
2I(1) Facility Fee -- The Company will pay to Prudential in
immediately available funds a fee (the "Facility Fee") on each Closing Day that
occurs after April 17, 1998, in an amount equal to 0.20% of the aggregate
principal amount of Notes sold on such Closing Day.
2I(2) Delayed Delivery Fee -- If the closing of the purchase and
sale of any Accepted Note is delayed for any reason beyond the original Closing
Day for such Accepted Note (other than if all the conditions in paragraph 3 are
satisfied and Prudential fails to purchase such Accepted Notes), the Company
will pay to Prudential on the Cancellation Date or actual closing date of such
purchase and sale (if such Cancellation Date or closing date occurs on a date
later than the date specified in the Confirmation of Acceptance for such
Accepted Note), a fee (the "Delayed Delivery Fee") calculated as follows:
(BEY - MMY) X DTS/360 X PA
where "BEY" means Bond Equivalent Yield, i.e., the bond equivalent yield per
annum of such Accepted Note, "MMY" means Money Market Yield, i.e., the yield per
annum on an alternative investment selected by Prudential on the date Prudential
receives notice of the delay in the closing for such Accepted Notes having a
maturity date or dates the same as, or closest to, the Rescheduled Closing Day
or Rescheduled Closing Days (a new alternative investment being selected by
Prudential each time such closing is delayed); "DTS" means Days to Settlement,
i.e., the number of actual days elapsed from and including the originally
scheduled Closing Day with respect to such Accepted Note to but excluding the
date of such payment; and "PA" means Principal Amount, i.e., the principal
amount of the Accepted Note for which such calculation is being made. In no case
shall the Delayed Delivery Fee be less than zero. Nothing contained herein shall
obligate any Purchaser to purchase any Accepted Note on any day other than the
Closing Day for such Accepted Note, as the same may be rescheduled from time to
time in compliance with paragraph 2H.
2I(3) Cancellation Fee -- If the Company at any time notifies
Prudential in writing that the Company is canceling the closing of the purchase
and sale of any Accepted Note, or if Prudential notifies the Company in writing
under the circumstances set forth in the last sentence of paragraph 2H that the
closing of the purchase and sale of such Accepted Note is to be canceled, or if
the closing of the purchase and sale of such Accepted Note is not consummated on
or prior to the last day of the Issuance Period (the date of any such
notification, or the last day of the Issuance Period, as the case may be, being
the "Cancellation Date"), the Company will pay Prudential in immediately
available funds an amount (the "Cancellation Fee") calculated as follows:
PI X PA
where "PI" means Price Increase, i.e., the quotient (expressed in decimals)
obtained by dividing (a) the excess of the ask price (as determined by
Prudential) of the Hedge Treasury Note(s) on the Cancellation Date over the bid
price (as determined by Prudential) of the Hedge Treasury Notes(s) on the
Acceptance Day for such Accepted Note by (b) such bid price; and "PA" has the
meaning specified in paragraph 2I(2). The foregoing bid and ask prices shall be
as reported by Telerate Systems, Inc. (or, if such data for any reason ceases to
be available through Telerate Systems, Inc., any publicly available source of
similar market data). Each price shall be based on a U.S. Treasury security
having a par value of $100.00 and shall be rounded to the second decimal place.
In no case shall the Cancellation Fee be less than zero.
3. CONDITIONS OF CLOSING. The obligation of any Purchaser to
purchase and pay for any Accepted Notes is subject to the satisfaction, on or
before the Closing Day for such Accepted Notes, of the following conditions:
3A. Certain Documents. Such Purchaser shall have received the
following, each dated the date of the applicable Closing Day:
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(i) The Accepted Note(s) to be purchased by such
Purchaser.
(ii) Certified copies of the resolutions of the Board of
Directors of the Company and each other Obligor approving this Agreement and the
other Loan Documents to which it is a party, and of all documents evidencing
other necessary corporate action and governmental approvals, if any, with
respect to this Agreement and the Accepted Notes; or for any Closing Day other
than the first Closing Day after the date of this Agreement, a certificate of
the Secretary or an Assistant Secretary of the Company or such other Obligor
stating that such resolutions remain in effect.
(iii) A certificate of the Secretary or an Assistant
Secretary of the Company and each other Obligor certifying the names and true
signatures of the officers of the Company authorized to sign this Agreement, the
Accepted Notes, the other Loan Documents to which it is a party and any other
documents to be delivered hereunder to which it is a party; or for any Closing
Day other than the first Closing Day after the date of this Agreement, a
certificate of the Secretary or an Assistant Secretary of the Company or such
other Obligor stating that the information in such certificate continues to be
true and correct.
(iv) Certified copies of the Certificate of Incorporation
and By-laws of the Company and each other Obligor; or a certificate of the
Secretary or an Assistant Secretary of the Company or such other Obligor stating
that the Certificate of Incorporation and By-laws of the Company or such other
Obligor have not changed since last delivered pursuant to this Agreement.
(v) Favorable opinions of the following counsel
satisfactory to such Purchaser and substantially in the form of Exhibit D
attached hereto and as to such other matters as such Purchaser may reasonably
request: (a) Holme Roberts & Owen LLP, special counsel for the Company - Exhibit
D-1; and Jim H. Boyd, general counsel of the Guarantors - Exhibit D-2. The
Company hereby directs each such counsel to deliver such opinion, agrees that
the issuance and sale of any Accepted Notes will constitute a reconfirmation of
such direction, and understands and agrees that each Purchaser receiving such an
opinion will and is hereby authorized to rely on such opinion.
(vi) A good standing certificate for the Company and the
other Obligors from the Secretary of State of Delaware and Arkansas dated as of
a recent date and such other evidence of the status of the Company as you may
reasonably request.
(vii) [Intentionally Omitted.]
(viii) Additional documents or certificates with respect to
legal matters or corporate or other proceedings related to the transactions
contemplated hereby as may be reasonably requested by such Purchaser.
3B. [Intentionally Omitted].
3C. Perfection of Security. Each Obligor shall have duly
authorized, executed, acknowledged, delivered, filed, registered and recorded
such security agreements, notices, financing statements and other instruments as
Prudential may have requested in order to perfect the Liens purported or
required pursuant to the Loan Documents to be created in the Loan Security.
3D. Payment of Fees. The Company shall have paid, without
limiting the provisions of paragraph 12B, the fees and disbursements of the
Purchasers special counsel and other costs and expenses of the Purchasers for
which statements have been rendered on or prior to such Closing Day.
3E. Representations and Warranties; No Default. The
representations and warranties contained in paragraph 8 shall be true on and as
of such Closing Day, except to the extent of changes caused by the transactions
herein contemplated; there shall exist on such Closing Day no Event of Default
or Default; and the Company shall have delivered to such Purchaser an Officer's
Certificate, dated such Closing Day, to both such effects.
6
3F. Purchase Permitted by Applicable Laws. The purchase of and
payment for the Accepted Notes to be purchased by such Purchaser on the terms
and conditions herein provided (including the use of the proceeds of such Shelf
Notes by the Company) shall not violate any applicable law or governmental
regulation (including, without limitation, Section 5 of the Securities Act or
Regulation T, U or X of the Board of Governors of the Federal Reserve System)
and shall not subject such Purchaser to any tax, penalty, liability or other
onerous condition under or pursuant to any applicable law or governmental
regulation, and such Purchaser shall have received such certificates or other
evidence as it may request to establish compliance with this condition.
3G. Legal Matters. Counsel for such Purchaser, including any
special counsel for the Purchasers retained in connection with the purchase and
sale of such Accepted Notes, shall be satisfied as to all legal matters relating
to such purchase and sale, and such Purchaser shall have received from such
counsel favorable opinions as to such legal matters as it may request.
3H. Proceedings. All corporate and other proceedings taken or to
be taken in connection with the transactions contemplated hereby and all
documents incident thereto shall be satisfactory in substance and form to such
Purchaser, and it shall have received all such counterpart originals or
certified or other copies of such documents as it may reasonably request.
3I. Facility Fee. With respect to any Closing Day occurring after
April 17, 1998, the Company shall have paid the Facility Fee due on such date.
4. PREPAYMENTS. The Notes shall be subject to prepayment with respect
to any required prepayment as set forth in paragraphs 4A(1)and 4A(2) and with
respect to the optional prepayments permitted by paragraph 4B.
4A. Required Prepayments. The Notes of each Series shall be
subject to required prepayments as set forth in paragraphs 4A(1) and 4A(2).
4A(1).Scheduled Prepayments. The Notes of each Series shall be
subject to required prepayments, if any, set forth in the Notes of such Series,
provided, that upon any partial prepayment of the Notes of any Series pursuant
to paragraph 4A(2), the principal amount of each required prepayment of the
Notes of such Series becoming due under this paragraph 4A(1) on and after the
date of such prepayment shall be reduced by a percentage equal to the product of
(a) 100 and (b) the quotient arrived at by dividing the principal portion of the
Notes of such Series so prepaid by the total principal amount of the Notes of
such Series outstanding immediately prior to such prepayment.
4A(2).Prepayments under the Bank Agreement. The Company shall
ratably prepay the Notes upon any required or voluntary prepayment of the term
loan under the Bank Agreement (other than the scheduled required prepayments of
principal set forth in section 4.3 of the Bank Agreement as in effect on the
date hereof) in proportion to the aggregate principal amounts of the Company's
obligations outstanding at such time pursuant to the Notes and the term loans
under the Bank Agreement. All prepayments of the Notes pursuant to this
paragraph 4A(2), shall be at 100% of the principal amount so prepaid plus
interest thereon to the prepayment date and the Yield-Maintenance Amount, if
any, with respect to each such Note. Any partial prepayment of Notes pursuant to
this paragraph 4A(2) shall be applied to reduce pro rata the required
prepayments of principal of the Notes of such Series as set forth in paragraph
4A(1).
4B. Optional Prepayment With Yield-Maintenance Amount. The
Notes shall be subject to prepayment on any Business Day occurring six months
after the day of issue, in whole at any time or from time to time in part (in a
7
minimum amount of $1,000,000 and integral multiples of $100,000), at the option
of the Company, at 100% of the principal amount so prepaid plus interest thereon
to the prepayment date and the Yield-Maintenance Amount, if any, with respect to
each such Note. Any partial prepayment of Notes pursuant to this paragraph 4B
shall be applied in satisfaction of required payments of principal of the Notes
in inverse order of their scheduled due dates.
4C. Notice of Optional Prepayment. The Company shall give the
holder of each Note to be prepaid pursuant to paragraph 4B irrevocable written
notice of such prepayment not less than 10 Business Days prior to the prepayment
date, specifying such prepayment date, specifying the aggregate principal amount
of the Notes to be prepaid on such date, identifying each Note held by such
holder, and the principal amount of each such Note, to be prepaid on such date
and stating that such prepayment is to be made pursuant to paragraph 4B;
provided that notice to Prudential under this paragraph 4C shall constitute
notice to each Prudential Affiliate that is a holder. Notice of prepayment
having been given as aforesaid, the principal amount of the Notes specified in
such notice, together with interest thereon to the prepayment date and together
with the Yield-Maintenance Amount, if any, herein provided, shall become due and
payable on such prepayment date. The Company shall, on or before the day on
which it gives written notice of any prepayment pursuant to this paragraph 4C,
give telephonic notice of the principal amount of the Notes to be prepaid and
the prepayment date to each Significant Holder which shall have designated a
recipient for such notices in the Information Schedule attached hereto or by
notice in writing to the Company.
4D. Application of Prepayments.
(i) Required Prepayments. Upon any partial prepayment of the
Notes of any Series pursuant to paragraph 4A, the amount so prepaid shall be
allocated to all outstanding Notes of such Series (including, for the purpose of
this paragraph 4D only, all Notes (other than the Existing Notes, which are due
at maturity) prepaid or otherwise retired or purchased or otherwise acquired by
the Company or any of its Subsidiaries or Affiliates other than by prepayment
pursuant to paragraph 4A or 4B) in proportion to the respective outstanding
principal amounts thereof.
(ii) Optional Prepayments. Upon any partial prepayment of the
Notes pursuant to 4B, the amount to be prepaid shall be applied pro rata to all
outstanding Notes of all Series (including, for the purpose of this paragraph 4D
only, all Notes (other than the Existing Notes, which are due at maturity)
prepaid or otherwise retired or purchased or otherwise acquired by the Company
or any of its Subsidiaries or Affiliates other than by prepayment pursuant to
paragraph 4A or 4B) according to the respective unpaid principal amounts
thereof.
4E. Retirement of Notes. The Company shall not, and shall not
permit any of its Subsidiaries or Affiliates to, prepay or otherwise retire in
whole or in part prior to their stated final maturity (other than by prepayment
pursuant to paragraph 4A or 4B or upon acceleration of such final maturity
pursuant to paragraph 7A), or purchase or otherwise acquire, directly or
indirectly, Notes held by any holder unless the Company or such Subsidiary or
Affiliate shall have offered to prepay or otherwise retire or purchase or
otherwise acquire, as the case may be, the same proportion of the aggregate
principal amount of Notes held by each other holder of Notes at the time
outstanding upon the same terms and conditions. Any Notes so prepaid or
otherwise retired or purchased or otherwise acquired by the Company or any of
its Subsidiaries or Affiliates shall not be deemed to be outstanding for any
purpose under this Agreement, except as provided in paragraph 4D.
5. AFFIRMATIVE COVENANTS. During the Issuance Period and so long
thereafter as any Note is outstanding and unpaid, the Company covenants as
follows:
5A. Financial Statements and Reports. The Company shall, and
shall cause each of its Subsidiaries to, maintain a system of accounting in
which correct entries shall be made of all transactions in relation to their
business and affairs in accordance with generally accepted accounting practice.
On or before June 29, 1998, the fiscal year of the Company and its Subsidiaries
8
shall end on April 30 in each year and the fiscal quarters of the Company and
its Subsidiaries shall end on July 31, October 31, January 31 and April 30 in
each year; from and after June 29, 1998, the fiscal year of the Company and its
Subsidiaries shall end on June 30 in each year and the fiscal quarters of the
Company and its Subsidiaries shall end on September 30, December 31, March 31
and June 30 in each year.
(i) Annual Reports. The Company shall furnish to each
holder in duplicate (unless a greater or lesser number is requested by such
holder) and as soon as available, and in any event within 95 days after the end
of each fiscal year, the Consolidated balance sheet of the Company and its
Subsidiaries as at the end of such fiscal year, the Consolidated statements of
income, changes in shareholders' equity and cash flows of the Company and its
Subsidiaries for such fiscal year (all in reasonable detail) and together with
Consolidating schedules as of such date and for such period and, in the case of
Consolidated financial statements, comparative figures for the immediately
preceding fiscal year, all accompanied by:
(a) Unqualified reports of KPMG LLP (or, if they cease
to be auditors of the Company and its Subsidiaries, other independent certified
public accountants of recognized national standing reasonably satisfactory to
the Majority Holders), containing no material qualification, to the effect that
they have audited the foregoing Consolidated financial statements in accordance
with generally accepted auditing standards and that such Consolidated financial
statements present fairly, in all material respects, the financial position of
the Company and its Subsidiaries covered thereby at the dates thereof and the
results of their operations for the periods covered thereby in conformity with
GAAP.
(b) The statement of such accountants that they have
caused this Agreement to be reviewed and that in the course of their audit of
the Company and its Subsidiaries no facts have come to their attention that
cause them to believe that any Default or Event of Default exists and in
particular that they have no knowledge of any Default or Event of Default under
paragraphs 6A through 6I, inclusive, or 5N, 5O or 5P, if such is not the case,
specifying such Default or Event of Default and the nature thereof. This
statement is furnished by such accountants with the understanding that the
examination of such accountants cannot be relied upon to give such accountants
knowledge of any such Default except as it relates to accounting or auditing
matters within the scope of their audit.
(c) A certificate of the Company signed by a Financial
Officer to the effect that such officer has caused this Agreement to be reviewed
and has no knowledge of any Default or Event of Default, or if such officer has
such knowledge, specifying such Default or Event of Default and the nature
thereof, and what action the Company has taken, is taking or proposes to take
with respect thereto.
(d) Computations by the Company in the form set forth
in Schedule 5A(i) hereto demonstrating, as of the end of such fiscal year,
compliance with the Computation Covenants and the Credit Fee Computation
Covenants , certified by a Financial Officer. In the event of an inconsistency
between Schedule 5A(i) and this Agreement, this Agreement shall govern.
(e) Calculations, as at the end of such fiscal year,
of (I) the Accumulated Benefit Obligations for each Plan covered by Title IV of
ERISA (other than Multiemployer Plans) and (II) the fair market value of the
assets of such Plan allocable to such benefits.
(f) Supplements to Schedules 8A, 8D and 8J showing any
changes in the information set forth in such Schedules not previously furnished
to the holders in writing, as well as any changes in the Charter, Bylaws or
incumbency of officers of the Company or its Subsidiaries from those previously
certified to the holders.
(g) A certificate of the Company signed by a Financial
Officer specifying the then current Minimum Petroleum Products Inventory
9
Requirements of the Company and its Subsidiaries on a Consolidated basis as of
the last day of such fiscal year.
(ii) Quarterly Reports. The Company shall furnish to each
holder in duplicate (unless a greater or lesser number is requested by such
holder) as soon as available and, in any event, within 50 days after the end of
each of the first three fiscal quarters of the Company, the internally prepared
Consolidated balance sheet of the Company and its Subsidiaries as of the end of
such fiscal quarter, the Consolidated statements of income, of changes in
shareholders' equity and of cash flows of the Company and its Subsidiaries for
such fiscal quarter and for the portion of the fiscal year then ended (all in
reasonable detail) and together with Consolidating schedules as of such date and
for such period and, in the case of Consolidated statements, comparative figures
for the same period (if such Consolidating schedules are requested by Prudential
or the Majority Holders) in the preceding fiscal year, all accompanied by:
(a) A certificate of the Company signed by a Financial
Officer to the effect that such financial statements have been prepared in
accordance with GAAP and present fairly, in all material respects, the financial
position of the Company and its Subsidiaries covered thereby at the dates
thereof and the results of their operations for the periods covered thereby,
subject only to normal year-end audit adjustments and the addition of footnotes.
(b) A certificate of the Company signed by a Financial
Officer to the effect that such officer has caused this Agreement to be reviewed
and has no knowledge of any Default, or if such officer has such knowledge,
specifying such Default and the nature thereof and what action the Company has
taken, is taking or proposes to take with respect thereto.
(c) Computations by the Company in the form set forth
in Schedule 5A(i) hereto demonstrating, as of the end of such quarter,
compliance with the Computation Covenants and the Credit Fee Computation
Covenants, certified by a Financial Officer. In the event of an inconsistency
between Schedule 5A(i) and this Agreement, this Agreement shall govern.
(d) Supplements to Schedules 8A, 8D and 8J showing any
changes in the information set forth in such Schedules not previously furnished
to the holders in writing, as well as any changes in the Charter, Bylaws or
incumbency of officers of the Company and its Subsidiaries from those previously
certified to the holders.
(e) A certificate of the Company signed by a Financial
Officer specifying the then current Minimum Petroleum Products Inventory
Requirements of the Company and its Subsidiaries on a Consolidated basis as of
the last day of each of the first three fiscal quarters of the Company.
(iii) Other Reports. The Company shall promptly furnish to
each holder:
(a) As soon as prepared and in any event within 90 days
after the beginning of each fiscal year, an annual budget and operating
projections for such fiscal year of the Company and its Subsidiaries, prepared
in a manner consistent with the manner in which the financial projections
described in paragraph 8L were prepared and shall include a capital expenditure
plan for such fiscal year.
(b) Any material updates of such budget and
projections.
(c) Any management letters furnished to the Company or
any of its Subsidiaries by the Company's auditors.
(d) All budgets, projections, statements of operations
10
and other reports furnished generally to the shareholders of the Company.
(e) Such registration statements, proxy statements and
reports, including Forms S-1, S-2, S-3, S-4, 10-K, 10-Q and 8-K, as may be filed
by the Company or any of its Subsidiaries with the Securities and Exchange
Commission.
(f) Any 90-day letter or 30-day letter from the federal
Internal Revenue Service asserting material tax deficiencies against the Company
or any of its Subsidiaries; and any similar notice from a state or other taxing
authority asserting material tax deficiencies against the Company or any of its
Subsidiaries that are not fully resolved without the assessment of a material
tax deficiency (and any tax paid) within 90 days following the date of such
notice.
(g) Notice of the issuance of any Funded Debt permitted
by paragraph 6C(2)(xii), together with a calculation of the proceeds thereof
(net of costs of issuance) and copies of all evidence of Indebtedness and other
documentation governing such Funded Debt.
(h) Any revised versions of the Risk and Product
Management Policy Statement referred to in paragraph 5J.
(i) As soon as available and, in any event within two
Business Days after the end of each week, or within two Business Days following
any request by the Majority Holders, a Borrowing Base Certificate signed by a
Financial Officer supplying computations of the Borrowing Base as of the last
Business Day of such week. Such Borrowing Base Certificate shall be accompanied
by such supporting documentation as the Majority Holder(s) may reasonably
request, including but not limited to: (i) a summary of all revolving loans and
letters of credit issued and outstanding under the Bank Agreement and (ii) a
summary of accounts receivable of the Company and its Subsidiaries. In the event
of an inconsistency between Schedule 5A(iii)(i) and this Agreement, this
Agreement shall govern.
(j) As soon as available and, in any event within two
Business Days after the end of each week, or within two Business Days following
any request by the Majority Holders, a certificate signed by a Financial Officer
of the Company summarizing Open Positions of the Company and its Subsidiaries as
of the last Business Day of such week, in form and substance satisfactory to the
Majority Holders.
(iv) Notice of Litigation. The Company shall promptly
furnish to each holder notice of any litigation or any administrative or
arbitration proceeding (a) to which the Company or any of its Subsidiaries may
hereafter become a party if the damages claimed in such proceeding exceed
$2,000,000 or (b) which creates a material risk of resulting, after giving
effect to any applicable insurance, in the payment by the Company and its
Subsidiaries of more than $1,000,000 or (c) which results, or creates a material
risk of resulting, in a Material Adverse Change.
(v) Notice of Defaults. Promptly upon acquiring knowledge
thereof, the Company shall notify the holders of the existence of any Default or
Event of Default or Material Adverse Change, specifying the nature thereof and
what action the Company or any of its Subsidiaries has taken, is taking or
proposes to take with respect thereto.
(vi) ERISA Reports. The Company shall furnish to the holders
as soon as available the following items with respect to any Plan:
(a) any request for a waiver of the funding standards or
an extension of the amortization period,
(b) notice of any reportable event (as defined in
section 4043 of ERISA), unless the notice requirement with respect thereto has
been waived by regulation,
11
(c) any notice received by any ERISA Group Person that
the PBGC has instituted or intends to institute proceedings to terminate any
Plan, or that any Multiemployer Plan is insolvent or in reorganization,
(d) notice of the possibility of the termination of any
Plan by its administrator pursuant to section 4041 of ERISA, and
(e) notice of the intention of any ERISA Group Person to
withdraw, in whole or in part, from any Multiemployer Plan.
(vii) Other Information. From time to time at reasonable
intervals upon request of Prudential or the Majority Holders, each of the
Company and its Subsidiaries shall furnish to the holders such other information
regarding the business, assets, financial condition, income or prospects of the
Company and its Subsidiaries as such officer may reasonably request, including
copies of all tax returns, licenses, agreements, leases and instruments to which
any of the Company or its Subsidiaries is party.
(viii) Monthly Reports. The Company shall furnish to each
holder as soon as available and, in any event, within 45 days after the end of
each month, the internally prepared Consolidated balance sheet of the Company
and its Subsidiaries as at the end of such month and the Consolidated statements
of income and of cash flows of the Company and its Subsidiaries for such month
(all in reasonable detail), all accompanied by a certificate of the Company
signed by a Financial Officer to the effect that such financial statements were
prepared in accordance with GAAP and present fairly, in all material respects,
on a summary basis the financial position of the Company and its Subsidiaries at
the dates hereof and the results of their operations for the periods covered
thereby, subject only to normal year-end audit adjustments and the addition of
footnotes. The Company shall also furnish to each holder as soon as available
and, in any event, within 45 days after the end of each month, a summary
accounts receivable aging report in form and substance satisfactory to the
Majority Holders.
(ix) Notice of Material Impairment to Accounts Receivables.
The Company shall immediately notify the holders if any account receivable that
is included in "Eligible Receivables" in determination of the Borrowing Base
that individually is equal to or greater than $5,000,000 in value becomes
uncollectible or if the account debtor with respect to any such account
receivable files a petition for relief under any existing or future law relating
to bankruptcy, insolvency, reorganization or relief of debtors, makes a general
assignment for the benefit of creditors, has had filed against it any petition
or other application for relief under any existing or future law relating to
bankruptcy, insolvency, reorganization or relief of debtors, fails, suspends
business operations, becomes insolvent, calls a meeting of its creditors for the
purpose of obtaining any financial concession or accommodation, or has or
suffers a receiver or a trustee appointed for all or a significant portion of
its assets or affairs.
5B. Information Required by Rule 144A. The Company will, upon
the request of any holder, provide such holder, and any qualified institutional
buyer designated by such holder, such financial and other information as such
holder may reasonably determine to be necessary in order to permit compliance
with the information requirements of Rule 144A under the Securities Act in
connection with the resale of Notes, except at such times as the Company is
subject to the reporting requirements of section 13 or 15(d) of the Exchange
Act. For the purpose of this paragraph 5B, the term "qualified institutional
buyer" shall have the meaning specified in Rule 144A under the Securities Act.
5C. Inspection of Property.
(i) The Company will permit any Person designated by the
Majority Holders in writing, at the expense of the holders making such request,
to visit and inspect any of the properties of the Company and its Subsidiaries,
12
to examine the corporate books and financial records of the Company and its
Subsidiaries and make copies thereof or extracts therefrom and to discuss the
affairs, finances and accounts of any of such corporations with the principal
officers of the Company, all at such reasonable times and as often as the
Majority Holders may reasonably request.
(ii) The Company will permit any Person designated by any
Significant Holder in writing, at such Significant Holder's expense, to visit
and inspect any of the properties of the Company and its Subsidiaries, to
examine the corporate books and financial records of the Company and its
Subsidiaries and make copies thereof or extracts therefrom and to discuss the
affairs, finances and accounts of any of such corporations with the principal
officers of the Company, all at such reasonable times and as often as such
Significant Holder may reasonably request; provided, however, that so long as no
Default or Event of Default exists, such Significant Holder may only make one
such request during a calendar year.
(iii) The Majority Holders, upon reasonable advance notice,
may at the expense of the Company undertake to have the Company and its
Subsidiaries reviewed by the commercial financial examiners and fixed asset
appraisers appointed by the Majority Holders.
5D. Covenant to Secure Notes Equally. The Company will, if it
or any Subsidiary shall create or assume any Lien upon any of its property or
assets, whether now owned or hereafter acquired, other than Liens permitted by
the provisions of paragraph 6C(1) (unless prior written consent to the creation
or assumption thereof shall have been obtained pursuant to paragraph 11C), make
or cause to be made, in documentation satisfactory to the Required Holder(s),
effective provision whereby the Notes will be secured by such Lien equally and
ratably with any and all other Indebtedness thereby secured so long as any such
other Indebtedness shall be so secured and each holder of Notes shall have
received an opinion of counsel, in form, scope and substance satisfactory to the
Required Holder(s), with respect to the foregoing and as to such other matters
as the Required Holder(s) may reasonably request.
5E. Taxes and Other Charges; Accounts Payable.
(i) Taxes and Other Charges. The Company shall, and shall
cause each of its Subsidiaries to, duly pay and discharge, or cause to be paid
and discharged, before the same becomes in arrears, all material taxes,
assessments and other governmental charges imposed upon such Person and its
properties, sales or activities, or upon the income or profits therefrom, as
well as all claims for labor, materials or supplies which if unpaid might by law
become a Lien upon any of its property; provided, however, that any such tax,
assessment, charge or claim need not be paid if the validity or amount thereof
shall at the time be contested in good faith by appropriate proceedings and if
such Person shall have set aside on its books adequate reserves with respect
thereto to the extent required by GAAP; and provided, further, that the Company
shall, and shall cause each of its Subsidiaries to, pay or bond, or cause to be
paid or bonded, all such taxes, assessments, charges or other governmental
claims immediately upon the commencement of proceedings to foreclose any Lien
which may have attached as security therefor (except to the extent such
proceedings have been dismissed or stayed).
(ii) Accounts Payable. The Company shall, and shall cause
each of its Subsidiaries to, promptly pay when due, or in conformity with
customary trade terms, all accounts payable incident to the operations of such
Person not referred to in paragraph 5E(i); provided, however, that any such
accounts payable need not be paid if the validity or amount thereof shall at the
time be contested in good faith and if such Person shall have set aside on its
books adequate reserves with respect thereto to the extent required by GAAP.
5F. Types of Business. The Company shall, and shall cause each
of its Subsidiaries to, engage principally in one or more of the businesses of
(a) providing transportation, terminaling and storage services for petroleum
products and the distribution, purchase and/or sale of petroleum products,
chemicals and other bulk liquids (b) natural gas gathering, processing,
transmission and marketing and (c) other activities related thereto. The Company
and its Subsidiaries may engage in businesses other than those described in the
preceding sentence, provided that the gross revenues of such other businesses in
13
any fiscal year of the Company shall not exceed 10% of the Consolidated gross
revenues of the Company and its Subsidiaries.
5G. Maintenance of Properties. The Company shall, and shall
cause each of its Subsidiaries to:
(i) keep its properties in such repair, working order and
condition, and shall from time to time make such repairs, replacements,
additions and improvements thereto as are necessary for the efficient operation
of its businesses and shall comply at all times in all material respects with
all material franchises, licenses and leases to which it is party so as to
prevent any loss or forfeiture thereof or thereunder, except where (i)
compliance is at the time being contested in good faith by appropriate
proceedings and (ii) failure to comply with such provisions has not resulted,
and does not create a material risk of resulting, in the aggregate in any
Material Adverse Change; and
(ii) do all things necessary to preserve, renew and keep in
full force and effect and in good standing its legal existence and authority
necessary to continue its business; provided, however, that this paragraph
5G(ii) shall not prevent the merger, consolidation or liquidation of
Subsidiaries permitted by paragraph 6C(5).
5H. Statutory Compliance. The Company shall, and shall cause
each of its Subsidiaries to, comply in all material respects with all Legal
Requirements applicable to it (including, without limitation, all Environmental
Laws), except where (i) compliance therewith shall be at the time be contested
in good faith by appropriate proceedings and (ii) failure so to comply with the
provisions being contested has not resulted, and does not create a material risk
of resulting, in the aggregate in any Material Adverse Change.
5I. Compliance with Material Agreements. The Company shall, and
shall cause each of its Subsidiaries to, comply in all material respects with
the Material Agreements (to the extent not in violation of the other provisions
of this Agreement or any other Loan Document). Without the prior written consent
of the Majority Holders, no Material Agreement shall be amended, modified,
waived or terminated in any manner that would have in any material respect an
adverse effect on the interests of the holders; provided, without limitation of
the foregoing, that any modification of the Bank Agreement that would cause the
covenants of the Company or the defaults thereunder to be more restrictive than
the covenants or defaults, respectively, contained in this Agreement or that
would constitute or cause a Default or Event of Default shall require the prior
written consent of the Majority Holders.
5J. Trading Policy. The Company shall, and shall cause each of
its Subsidiaries (to the extent they are engaged in such business) to, maintain
and follow a policy of managing petroleum inventory risk with the objective of
minimizing potentially adverse impacts on earnings arising from volatility in
refined petroleum product prices. The holders acknowledge that the policy
described in the Risk and Product Management Policy Statement dated February 11,
2000 of TransMontaigne Product Services Inc., a Delaware corporation, a copy of
which is attached to this Agreement as Schedule 5J, represents such a policy.
5K. Subordinated Debentures. The Company shall do all things
necessary to assure that the Notes and all of the Obligations be and remain
"Superior Indebtedness" within the meaning of Section 9 of the Subordinated
Debentures Agreement.
5L. Inventory Accounting. The Company shall, and shall cause
each of its Subsidiaries to, account for substantially all of their inventory on
the basis of the mark to market method.
14
5M. Insurance.
(i) Business Interruption Insurance. Each of the Company and
its Subsidiaries shall maintain with financially sound and reputable insurers
insurance related to interruption of business, either for loss of revenues or
for extra expense, in the manner customary for businesses of similar size
engaged in similar activities.
(ii) Property Insurance. The Company shall, and shall cause
each of its Subsidiaries to, (a) keep its assets which are of an insurable
character insured by financially sound and reputable insurers against theft and
fraud and against loss or damage by fire, explosion and hazards insured against
by extended coverage to the extent, in amounts and with deductibles at least as
favorable as those generally maintained by businesses of similar size engaged in
similar activities; and (b) provide the holder of each Note written notice at
least 30 days prior to the effective date of any change in the amount, type or
terms of any such insurance. The Collateral Agent shall be named as loss payee
on all property insurance policies, obtained or maintained by the Company and
its Subsidiaries with respect to their properties and businesses.
(iii) Liability Insurance. The Company shall, and shall cause
each of its Subsidiaries to, (a) maintain with financially sound and reputable
insurers insurance against liability for hazards, risks and liability to persons
and property to the extent, in amounts and with deductibles at least as
favorable as those generally maintained by businesses of similar size engaged in
similar activities and (b) provide the holder of each Note written notice at
least 30 days prior to the effective date of any change in the amount, type or
terms of any such insurance; provided, however, that it may effect workers'
compensation insurance or similar coverage with respect to operations in any
particular state or other jurisdiction through an insurance fund operated by
such state or jurisdiction or by meeting the self-insurance requirements of such
state or jurisdiction. The Collateral Agent, all holders of the Notes and all
lenders under the Bank Agreement shall be named as additional insureds on all
liability insurance policies obtained or maintained by the Company and its
Subsidiaries with respect to their properties and businesses.
(iv) Flood Insurance. Each of the Company and its
Subsidiaries shall at all times keep each parcel of real property owned or
leased by it which is included in the Loan Security, and which is (a) in an area
determined by the Director of the Federal Emergency Management Agency to be
subject to special flood hazard and (b) in a community participating in the
National Flood Insurance Program, insured against such special flood hazards in
an amount necessary to ensure compliance with the federal National Flood
Insurance Act of 1968.
5N. ERISA, etc. The Company shall comply, and shall cause each
of its Subsidiaries and all ERISA Group Persons to comply, in all material
respects, with the provisions of ERISA and the Code applicable to each Plan. The
Company shall meet, and shall cause each of its Subsidiaries and all ERISA Group
Persons to meet, all minimum funding requirements applicable to them with
respect to any Plan pursuant to section 302 of ERISA or section 412 of the Code,
without giving effect to any waivers of such requirements or extensions of the
related amortization periods which may be granted. At no time shall the
Accumulated Benefit Obligations under any Plan that is not a Multiemployer Plan
exceed the fair market value of the assets of such Plan allocable to such
benefits by more than $1,000,000. The Company shall not withdraw, and shall
cause its Subsidiaries and all other ERISA Group Persons not to withdraw, in
whole or in part, from any Multiemployer Plan so as to give rise to withdrawal
liability exceeding $1,000,000 in the aggregate. At no time shall the actuarial
present value of unfunded liabilities for post-employment health care benefits,
whether or not provided under a Plan, calculated in a manner consistent with
Statement No. 106 of the Financial Accounting Standards Board, exceed
$1,000,000.
5O. Open Positions. The Company and its Subsidiaries shall
maintain Open Positions relating to product inventory requirements that do not
exceed 1,000,000 barrels plus the Minimum Petroleum Products Inventory
Requirements at any time.
15
5P. Environmental Laws.
(i) Compliance with Law and Permits. The Company shall, and
shall cause each of its Subsidiaries to, use and operate all of its facilities
and properties in material compliance with all Environmental Laws, keep in
effect all necessary permits, approvals, certificates, licenses and other
authorizations relating to environmental matters and remain in material
compliance therewith, and handle all Hazardous Materials in material compliance
with all applicable Environmental Laws, except where any failure to so act could
not, individually or in the aggregate, have a Material Adverse Effect.
(ii) Notice of Claims, etc. The Company shall immediately
notify the holders, and provide copies upon receipt, of all written claims,
complaints, notices or inquiries from governmental authorities relating to the
condition of the facilities and properties of the Company or its Subsidiaries or
compliance with Environmental Laws which could have a Material Adverse Effect,
and shall use best efforts to promptly cure and have dismissed with prejudice to
the satisfaction of the Majority Holders any actions and proceedings relating to
compliance with Environmental Laws.
5Q. Credit Fee. (i) Primary Credit Fee.. On June 30, 1999, the
Company shall pay in respect of the fiscal quarter commencing July 1, 1999 to
each holder a credit fee equal to 0.375% of the principal amount of Notes held
by such holder on June 30,1999. On each day after June 30, 1999 on which,
pursuant to paragraph 5A, delivery is made, or should have been made (without
any grace), whichever is earlier (the "Delivery Date"), of financial statements
for the fiscal year ended June 30, 1999 and each fiscal quarter or fiscal year,
as the case may be, thereafter (the quarter in respect of which, or ending the
period for which, such financial statements are being, or should have been,
delivered is herein referred to as the "Reference Quarter"), the Company shall
pay, in respect of the next fiscal quarter commencing after such Delivery Date
(unless, in the case of annual financial statements, such Delivery Date falls
within the second quarter after the Reference Quarter, in which case such
payment shall be in respect of the quarter in which such Delivery Date falls),
to each holder a credit fee equal to 0.375% of the principal amount of Notes
held by such holder as of the last day of such Reference Quarter, if both (i) on
such Delivery Date, the senior unsecured debt of the Company is not rated BBB-
or higher by S&P or Baa3 or higher by Moody's and (ii) on the last day of such
Reference Quarter, the Company is not in compliance with one or more of the
covenants contained in Schedule 5Q (the "Credit Fee Computation Covenants"),
provided, however, that for purposes of this paragraph 5Q only, compliance with
the covenants numbered as 5Q(1), 5Q(2), 5Q(3) and 5Q(4) in such Schedule 5Q
shall be determined using the percentages set forth in the table below for the
Reference Quarters ending on the dates set forth in the table below in place of
the relevant percentages set forth in such covenants, and provided, further
that, if such a credit fee is required to paid pursuant to the foregoing on the
Delivery Date of financial statements for the fiscal quarter ending September
30, 2000, the conditions to the payment of such credit fee provided for above
relating to the rating of the Company's senior unsecured debt and compliance
with the Credit Fee Computation Covenants shall no longer apply and such credit
fee shall be paid as provided above on such Delivery Date and on each Delivery
Date thereafter notwithstanding such conditions:
- -------------------------------------------------------------------------------
Covenant June 30, 1999, September 30, 1999, March 31, 2001 and
December 31, 1999, March 31, 2000, June thereafter
30, 2000, September 30, 2000 and
December 31, 2000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5Q(1) 250% 275%
- --------------------------------------------------------------------------------
5Q(2) 60% 55%
- --------------------------------------------------------------------------------
5Q(3) 70% 60%
- --------------------------------------------------------------------------------
5Q(4) 300% 250%
- --------------------------------------------------------------------------------
(ii) Secondary Credit Fee. On each Delivery Date after
September 30 1999 the Company shall pay, in respect of the next fiscal quarter
commencing after such Delivery Date (unless, in the case of annual financial
16
statements, such Delivery Date falls within the second quarter after the
Reference Quarter, in which case such payment shall be in respect of the quarter
in which such Delivery Date falls), to each holder a credit fee in addition to
the credit fee described in paragraph 5Q(i) above equal to 0.25% of the
principal amount of Notes held by such holder as of the last day of such
Reference Quarter, if both (i) on such Delivery Date, the senior unsecured debt
of the Company is not rated BBB- or higher by S&P or Baa3 or higher by Moody's
and (ii) on the last day of such Reference Quarter, the Company is not in
compliance with one or more of the Credit Fee Computation Covenants, provided,
however, that for purposes of this paragraph 5Q(ii) only, compliance with the
covenants numbered as 5Q(1) and 5Q(4) in Schedule 5Q shall be determined using
the percentages set forth in the table below for the Reference Quarters ending
on the dates set forth in the table below in place of the relevant percentages
set forth in such covenant, and provided, further that, if such a credit fee is
required to paid pursuant to the foregoing on the Delivery Date of financial
statements for the fiscal quarter ending September 30, 2000, the conditions to
the payment of such credit fee provided for above relating to the rating of the
Company's senior unsecured debt and compliance with the Credit Fee Computation
Covenants shall no longer apply and such credit fee shall be paid as provided
above on such Delivery Date and on each Delivery Date thereafter notwithstanding
such conditions:
------------------------------------------------------------------
Covenant September 30, 1999 and thereafter
------------------------------------------------------------------
------------------------------------------------------------------
5Q(1) 200%
------------------------------------------------------------------
5Q(4) 350%
------------------------------------------------------------------
5R. Collateral; Subsidiaries. (i) It is the intent of the
parties that all obligations of the Company and its Subsidiaries under the Loan
Documents shall be secured by, among other things, all the property and assets
(whether now existing or hereafter acquired) of the Company and its Subsidiaries
(whether now existing or hereafter acquired or created), including, without
limitation, real property, permits, patents, trademarks, copyrights, trade
names, service marks and other properties acquired subsequent to the date
hereof, and whether owned by the Company, existing Subsidiaries or by
subsequently acquired or organized Subsidiaries.
(ii) At its expense the Company shall execute and deliver,
and shall cause its Subsidiaries to execute and deliver, any and all documents,
financing statements, agreements and instruments, and take all action
(including, without limitation, filing Uniform Commercial Code and other
financing statements, mortgages and deeds of trust), that may be required under
applicable law, or which the Required Holder(s) or the Collateral Agent may
reasonably request in order to effectuate the transactions contemplated by the
Loan Documents and in order to grant, preserve, protect and perfect the validity
and first priority of the security interests and Liens created or purported to
be created by the Security Documents or in order to effectuate the intent of the
parties set forth in clause (i) of this paragraph 5R.
(iii) At the cost and expense of the Company, the Company will
(a) cause any subsequently acquired or organized Subsidiary (contemporaneously
with such acquisition or organization) to execute each Security Document that
the Collateral Agent or the Required Holder(s) may reasonably request in order
to grant the Collateral Agent a valid, first perfected pledge or security
interest in the assets and properties (including, without limitation, the
capital stock or other equity interests of such Subsidiary in its Subsidiaries),
(b) cause any Subsidiary that has not executed a Pledge Agreement and that
itself has a subsequently acquired or organized Subsidiary to execute and
deliver a Pledge Agreement, substantially in the form of the Pledge Agreement
dated as of April 17, 1997 and otherwise satisfactory in form and substance to
the Required Holder(s), pledging all of the capital stock or other equity
interests of such subsequently acquired or organized Subsidiary in favor of the
Collateral Agent and (c) pursuant to any applicable Pledge Agreement of the
Company or any of its Subsidiaries, deliver or cause such Subsidiary to deliver
to the Collateral Agent the certificates, stock powers and notices required by
such Pledge Agreement with respect to such subsequently acquired or organized
Subsidiary (or take or cause such Subsidiary to take such other actions as are
necessary to provide the Collateral Agent with a first priority perfected pledge
of or security interest in the capital stock or other equity interests of such
subsequently acquired or organized Subsidiary covered by such Pledge Agreement).
17
(iv) Any security interests and Liens granted by the Company
and its Subsidiaries pursuant to this paragraph 5R will be created under the
Security Documents and other security agreements, mortgages, deeds of trust and
other instruments and documents in form, scope and substance satisfactory to the
Required Holder(s) and the Collateral Agent, and at the Company's expense the
Company will deliver or cause to be delivered to the Collateral Agent, all such
instruments and documents (including, without limitation, legal opinions, title
insurance policies, surveys, lien searches and searches for liens or
encumbrances upon intellectual property) as the Collateral Agent shall
reasonably request to evidence compliance with this paragraph 5R. The Company
agrees to provide from time to time such evidence as the Collateral Agent shall
reasonably request as to the perfection and priority status of each such
security interest and Lien.
(v) In connection with the delivery of any Security Document
or Pledge Agreement pursuant to this paragraph 5R, at the cost and expense of
the Company, the Company and the Subsidiary delivering such Security Document or
Pledge Agreement shall deliver to each holder of Notes, concurrently with such
Security Document or Pledge Agreement, each document that would have been
required by paragraph 12R to be delivered by such Person had such Security
Document or Pledge Agreement been delivered pursuant to paragraph 12R as a
condition to the effectiveness of this Agreement and such other documents as any
holder of the Notes may reasonably request, including, without limitation,
opinions of counsel, a Secretary or Assistant Secretary's Certificate with
certified bylaws or other analogous organization documents, articles or
certificate of incorporation or other appropriate charter documents and
resolutions, and all such documents shall be in form and substance satisfactory
to the Required Holder(s).
5S. Landlord and Warehouseman Waivers. After the date hereof, no
real property or warehouse space shall be leased or acquired by the Company or
any of its Subsidiaries, as lessee, and no inventory shall be shipped to a
processor or converter under arrangements established after the date hereof
without the prior written consent of the Collateral Agent or, unless and until a
satisfactory landlord or mortgagee agreement or bailee letter, as appropriate,
shall first have been obtained with respect to such location, which consent will
not be unreasonably withheld. Each of the Company and its Subsidiaries shall
timely and fully pay and perform its obligations under all leases and other
agreements with respect to each leased location or public warehouse where any
Loan Security is or may be located
5T. Environmental Covenants. The Company will immediately notify
each holder of Notes of and provide such holder with copies of any notifications
of discharges or releases or threatened discharges or releases of a Polluting
Substance on, upon, into or from any property at any time (including, without
limitation, any time subsequent to the date hereof) owned, leased or operated by
the Company or any of its Subsidiaries (the "Subject Property") which are given
or required to be given by or on behalf of the Company or any of its
Subsidiaries to any federal, state or local Tribunal if any of the foregoing
could reasonably be expected to have a Material Adverse Effect, and such copies
of notifications shall be delivered to the holders at the same time as they are
delivered to the Tribunal. The Company further agrees to promptly undertake and
diligently pursue to completion, or to cause its Subsidiaries to promptly
undertake and diligently pursue to completion, any legally required remedial
containment and cleanup action in the event of any discharge or release or
threatened discharge or release of a Polluting Substance on, upon, into or from
the Subject Property. At all times while owning, leasing or operating the
Subject Property, the Company or the Subsidiary owning, leasing or operating
such Subject Property will maintain and retain, or cause its Subsidiaries to
maintain and retain, complete and accurate records of all releases, discharges
or other disposal of Polluting Substances on, upon, into or from such Subject
Property, including, without limitation, records of the quantity and type of any
Polluting Substances disposed of on or off such Subject Property.
5U. Environmental Indemnities. The Company hereby agrees to
indemnify, defend and hold harmless each holder of Notes, the Collateral Agent
and each of their respective officers, directors, employees, agents,
consultants, attorneys, contractors, affiliates, successors, assigns or
18
transferees (each an "Indemnified Party") from and against, and reimburse said
Persons in full with respect to, any and all loss, liability, damage, fines,
penalties, costs and expenses, of every kind and character, including reasonable
attorneys' fees and court costs, known or unknown, fixed or contingent,
occasioned by or associated with any claims, demands, causes of action, suits
and/or enforcement actions, including any administrative or judicial
proceedings, and any remedial, removal or response actions ever asserted,
threatened, instituted or requested by any Persons, including any Tribunal,
arising out of or related to: (i) the breach of any representation or warranty
of the Company contained in paragraph 8P or any analogous provision contained in
any Security Document; (ii) the failure of the Company to perform, or to cause
its Subsidiaries to perform, any of the covenants contained in paragraph 5T or
any analogous provision contained in any Security Document; (iii) the ownership,
construction, occupancy, operation, use of the Subject Property prior to the
earlier of the date on which (a) the Notes have been paid in full and the
Security Documents have been released or (b) the Subject Property has been sold
by the Collateral Agent pursuant to foreclosure of the Liens granted under the
Security Documents, deed in lieu of such foreclosure or otherwise (all of the
foregoing, collectively, the "Indemnified Liabilities"); provided, however, the
foregoing indemnity shall not apply with respect to matters caused solely by or
arising solely from the Collateral Agent's activities during any period of time
the Collateral Agent acquires ownership of the Subject Property pursuant to its
rights granted under the Security Documents. THE FOREGOING INDEMNITY OBLIGATIONS
OF THE COMPANY SHALL EXTEND TO ALL INDEMNIFIED LIABILITIES, INCLUDING, WITHOUT
LIMITATION, ANY INDEMNIFIED LIABILITIES ARISING FROM OR ATTRIBUTED TO THE
NEGLIGENCE (WHETHER SOLE, CONTRIBUTING OR CONCURRENT) OF ANY INDEMNIFIED PARTY.
In case any action or proceeding (including any governmental
or regulatory investigation or proceeding) shall be instituted involving any
person in respect of which indemnity may be sought pursuant to the preceding
paragraph the Indemnified Party shall promptly notify the person against whom
such indemnity may be sought (each an"Indemnifying Party") in writing and the
Indemnifying Party, upon request of the Indemnified Party, shall assume the
defense thereof, including the employment of counsel reasonably satisfactory to
the Indemnified Party to represent the Indemnified Party and any others the
Indemnifying Party may designate and shall pay the fees and disbursements of
such counsel related to such proceeding. In any such action or proceeding, any
Indemnified Party shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party
unless (i) the Indemnifying Party and the Indemnified Party shall have mutually
agreed to the retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the Indemnifying Party
and the Indemnified Party, and representation of both parties by the same
counsel would be, in the judgement of the Indemnified Party, inappropriate due
to actual or potential differing interests between them. It is understood that
the Indemnifying Party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all holders
of Notes and that all such fees and expenses shall be reimbursed as they are
incurred. In the case of any such separate firm for the holders of Notes, such
firm shall be designated in writing by the Required Holder(s). The Indemnifying
Party shall not be liable for any settlement of any proceeding effected without
its written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the Indemnifying Party agrees to indemnify the
Indemnified Party from and against any loss or liability by reason of such
settlement or judgment. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, which consent shall not be unreasonably
withheld, effect any settlement of any pending or threatened proceeding in
respect of which any Indemnified Party is or is reasonably likely to have been a
party and indemnity could have been sought hereunder by such Indemnified Party.
5V. Borrowing Base Provisions.
(i) Initial Borrowing Base. During the period from the date
hereof to the effective date of the first redetermination of the Borrowing Base
pursuant to the provisions of this paragraph 5V, the amount of the Borrowing
Base shall be as specified Schedule 5V(i).
(ii) Adjustments to Borrowing Base.
(a) The "Borrowing Base" shall have the meaning given
19
to such term (including the definitions of any and all defined terms which are
components thereof) in the Bank Agreement as in effect on the date hereof;
provided, that items eligible for inclusion in the Borrowing Base shall be
determined by the Majority Holder(s) in their sole reasonable discretion from
time to time notwithstanding any provision in the Bank Agreement for the
determination of the eligibility for inclusion of such items by the Bank Agent,
the lenders under the Bank Agreement or any other Person. The determination of
the Borrowing Base shall be made unanimously and in good faith by the Majority
Holders, in the exercise of their sole discretion and in accordance with their
respective customary practices and standards for debt investments as they exist
at the time of such determination of the Borrowing Base, which may vary from
holder to holder; provided, however, that if the "Borrowing Base" determined by
the Bank Agent pursuant to the Bank Agreement shall be less than the Borrowing
Base determined by the holders, the Bank Agent's determination of the "Borrowing
Base" shall be the Borrowing Base under this Agreement. The Borrowing Base shall
be redetermined by the Majority Holders within two Business Days after each
delivery of a Borrowing Base Certificate as required by paragraph 5A(iii)(i)
(the "Redetermination Date").
(b) In connection with the redetermination of the
Borrowing Base on any Redetermination Date each holder shall submit to each
other holder in writing at least one Business Day prior to such Redetermination
Date such holder's initial redetermination of the Borrowing Base. The
redetermined Borrowing Base shall become effective on the date the Majority
Holders of the Notes notify the Company of the redetermined Borrowing Base and
shall remain in effect until any subsequent redetermination pursuant to this
paragraph 5V.
(c) Notwithstanding the foregoing, if the Majority
Holders do not submit a Borrowing Base to the Company as provided herein, the
Borrowing Base under the Bank Agreement as determined by the Bank Agent shall be
the Borrowing Base under this Agreement and shall become effective on the date
the Company is notified pursuant to the Bank Agreement.
(iii) Procedures if Borrowing Base Deficiency Occurs.
Each time the aggregate unpaid principal amount of the Obligations and the Bank
Obligations at any time exceeds the Borrowing Base then most recently determined
(the date on which such a Borrowing Base Deficiency occurs is referred to herein
as the "Borrowing Base Deficiency Date"), the Company shall (a) promptly notify
the holders of such occurrence and the amount of the Borrowing Base Deficiency
on such date and (b) the Company shall eliminate the entire unpaid balance of
such Borrowing Base Deficiency within five Business Days of such Borrowing Base
Deficiency Date by, in each case, only to the extent necessary to eliminate such
excess, (i) prepaying the Bank Revolving Loan until the Bank Revolving Loan
shall have been paid in full, (ii) and if the action specified in clause (i)
above shall not eliminate such excess, by prepaying the Bank Swingline Loan,
(iii) and if the action specified in clause (ii) above shall not eliminate such
excess, by cash collateralizing the Bank Letter of Credit Exposure, and (iv) if
the action specified in clause (iii) above shall not eliminate such excess, by
posting additional Eligible Cash and Cash Equivalents. If a Borrowing Base
Deficiency occurs, the Company shall not make any Distributions until such
Borrowing Base Deficiency has been eliminated. The Company shall not be
permitted to cure a Borrowing Base Deficiency by reducing the amount of Bank
Obligations other than in accordance with this paragraph 5V(iii).
6. NEGATIVE COVENANTS. During the Issuance Period and so long
\thereafter as any Note is outstanding and unpaid, the Company covenants as
follows:
6A. Certain Financial Tests.
6A(1) Fixed Charge Coverage. The Company will not permit,
(i) for each fiscal quarter of the Company, the ratio (expressed as a
percentage) of the Consolidated EBITDA of the Company and its Subsidiaries for
such fiscal quarter to the Consolidated Fixed Charges of the Company and its
Subsidiaries for such fiscal quarter to be less than 100%, (ii) for the fiscal
20
quarter of the Company ending March 31, 2000, the ratio (expressed as a
percentage) of the Consolidated EBITDA of the Company and its Subsidiaries for
such fiscal quarter to the Consolidated Fixed Charges of the Company and its
Subsidiaries for such fiscal quarter to be less than 100%, (iii) for the fiscal
quarter of the Company ending June 30, 2000, the ratio (expressed as a
percentage) of the Consolidated EBITDA of the Company and its Subsidiaries for
the period of two consecutive fiscal quarters then ended to the Consolidated
Fixed Charges of the Company and its Subsidiaries for such period to be less
than 100%, (iv) for the fiscal quarter of the Company ending September 30, 2000,
the ratio (expressed as a percentage) of the Consolidated EBITDA of the Company
and its Subsidiaries for the period of three consecutive fiscal quarters then
ended to the Consolidated Fixed Charges of the Company and its Subsidiaries for
such period to be less than 110%, (v) for each fiscal quarter of the Company
ending on or after December 31, 2000, the ratio (expressed as a percentage) of
the Consolidated EBITDA of the Company and its Subsidiaries for the period of
four consecutive fiscal quarters then ended to the Consolidated Fixed Charges of
the Company and its Subsidiaries for such period to be less than the percentage
specified in the table below:
Period Ending Percentage
December 31, 2000 1.20 to 1.00
March 31, 2001 2.00 to 1.00
June 30, 2001 2.25 to 1.00
September 30, 2001 2.50 to 1.00
and each fiscal quarter thereafter
6A(2) Consolidated Tangible Net Worth. The Company will
not permit at any time the Consolidated Tangible Net Worth of the Company and
its Subsidiaries to be equal to or less than $295,000,000; provided, however,
that on the last day of each fiscal quarter of the Company commencing with the
fiscal quarter ending March 31, 2000, the then effective dollar amount in this
paragraph 6A(2) (including any prior increases of such amount pursuant to
clauses (a) and (b) below) shall be increased by the sum of (a) 50% of the net
proceeds of common stock, preferred stock or other equity securities issued
during the fiscal quarter then ended by the Company and its Subsidiaries,
calculated on a Consolidated basis in accordance with GAAP, plus (b) 50% of
Consolidated Net Income (if positive) for the fiscal quarter then ended.
6A(3) Maximum Leverage. The Company will not permit
at any time the ratio (expressed as a percentage) of Consolidated Total
Liabilities of the Company and its Subsidiaries to Consolidated Tangible Net
Worth of the Company and its Subsidiaries to exceed 275%.
6A(4) Minimum Current Ratio. The Company will not permit
at any time the ratio (expressed as a percentage) of Consolidated Current Assets
of the Company and its Subsidiaries to Consolidated Current Liabilities of the
Company and its Subsidiaries to be less than 120%.
6A(5) Capital Expenditures. For each fiscal quarter of
the Company, commencing with the fiscal quarter ending December 31, 2000, the
aggregate amount of Capital Expenditures for the period of four consecutive
fiscal quarters then ending shall not exceed $8,000,000; provided, however, that
the Company and its Subsidiaries may incur Capital Expenditures for contracted
projects identified in Schedule 6A(5) hereto in an aggregate amount not to
exceed $15,000,000.
6B. Distributions. The Company will not, and will not
permit any of its Subsidiaries to, make any Distribution (or become
contractually committed to do so), except for the following:
(i) Subsidiaries of the Company may make Distributions to
the Company or any Wholly Owned Subsidiary of the Company.
21
(ii) So long as immediately before and after giving effect
thereto no Default or Event of Default exists and no Borrowing Base Deficiency
exists, the Company may make Distributions to its stockholders; provided, that
the cumulative amount distributed shall not exceed the sum of (i) $10,000,000
plus (ii) 50% of the cumulative Consolidated Net Income of the Company and its
Subsidiaries commencing January 1, 2000.
(iii) So long as immediately before and after giving effect
thereto no Default or Event of Default exists, the Company may make scheduled
payments of interest and principal on the Subordinated Debentures.
Notwithstanding any of the foregoing, cash Distributions
are not permitted unless, after giving effect to any such Distribution, the
ratio (expressed as a percentage) of the Consolidated EBITDA of the Company and
its Subsidiaries to Consolidated Fixed Charges of the Company and its
Subsidiaries, in each case for the fiscal quarter in which such Distribution is
proposed to occur, equals or exceeds 125%, as demonstrated in a certificate of
the Company signed by a Financial Officer delivered to the holders prior to any
such Distribution.
6C. Liens, Indebtedness and Other Restrictions. The
Company will not, and will not permit any of its Subsidiaries to:
6C(1) Liens. Create, incur or enter into, or suffer to
be created or incurred or to exist, any Lien (or become contractually committed
to do so), except the following:
(i) Liens on the Loan Security that secure the Obligations,
and, so long as the Intercreditor Agreement and Security Agreement dated as of
January 13, 2000 are each in effect, Liens on the Loan Security securing Funded
Debt permitted by paragraph 6C(2)(xii), but only so long as such Liens are on
parity with or subordinate to the Liens on the Loan Security granted to secure
the Obligations.
(ii) Liens to secure taxes, assessments and other
governmental charges, to the extent that payment thereof shall not at the time
be required by paragraph 5E.
(iii) Deposits or pledges made (a) in connection with, or to
secure payment of, workers' compensation, unemployment insurance, old age
pensions or other social security, (b) in connection with casualty insurance
maintained in accordance with paragraph 5M, (c) to secure the performance of
bids, tenders, contracts (other than contracts relating to Financing Debt) or
leases, (d) to secure statutory obligations or surety or appeal bonds, (e) to
secure indemnity, performance or other similar bonds in the ordinary course of
business or (f) in connection with contested amounts to the extent that payment
thereof shall not at that time be required by paragraph 5E.
(iv) Liens in respect of judgments or awards, to the extent
that such judgments or awards are permitted by paragraph 6C(2)(vi) but only to
the extent that such Liens are junior to the Liens on the Loan Security granted
to secure the Obligations.
(v) Liens of carriers, warehouses, mechanics and similar
Liens, in each case (a) in existence less than 90 days from the date of creation
thereof or (b) being contested in good faith by the Company or any Subsidiary in
appropriate proceedings (so long as the Company or such Subsidiary shall have
set aside on its books adequate reserves with respect thereto to the extent
required by GAAP).
(vi) Encumbrances in the nature of (a) zoning restrictions,
(b) easements, (c) restrictions of record on the use of real property, (d)
landlords' and lessors' Liens on rented premises so long as such Liens are
subordinated to the Liens on the Loan Security in favor of the Collateral Agent
on behalf of the lenders under the Bank Agreement and the holders of the Notes
and (e) restrictions on transfers or assignment of leases, which in each case do
not materially detract from the value of the encumbered property or materially
22
impair the use thereof in the business of the Company or any Subsidiary.
(vii) Restrictions under federal and state securities laws on
the transfer of securities.
(viii) Restrictions under Foreign Trade Regulations on the
transfer or licensing of certain assets of the Company and its Subsidiaries.
(ix) Liens constituting (a) purchase money security interests
(including mortgages, conditional sales, Capitalized Leases and any other title
retention or deferred purchase devices) in real property, interests in leases or
tangible personal property (other than inventory) existing or created on the
date on which such property is acquired, and (b) the renewal, extension or
refunding of any security interest referred to in the foregoing clause (a) in an
amount not to exceed the amount thereof remaining unpaid immediately prior to
such renewal, extension or refunding; provided, however, that (i) each such
security interest shall attach solely to the particular item of property so
acquired, and the principal amount of Indebtedness (including Indebtedness in
respect of Capitalized Lease Obligations) secured thereby shall not exceed the
cost (including all such Indebtedness secured thereby, whether or not assumed)
of such item of property; and (ii) the aggregate principal amount of all
Indebtedness secured by Liens permitted by this paragraph 6C(1)(ix) shall not
exceed the amount permitted by paragraph 6C(2)(vii).
6C(2) Indebtedness. Create, incur, assume or otherwise become
or remain liable with respect to any Indebtedness, including Guarantees of
Indebtedness of others and reimbursement obligations, whether contingent or
matured, under letters of credit or other financial guarantees by third parties
(or become contractually committed to do so) except the following if incurred
and existing in compliance with paragraph 6A:
(i) Indebtedness in respect of the Notes.
(ii) Guarantees permitted by paragraph 6C(3).
(iii) Current liabilities, other than Financing Debt, incurred
in the ordinary course of business.
(iv) To the extent that payment thereof shall not at the
time be required by paragraph 5E, Indebtedness in respect of taxes, assessments,
governmental charges and claims for labor, materials and supplies.
(v) Indebtedness secured by Liens of carriers, warehouses,
mechanics and landlords permitted by paragraphs 6C(1)(v) and 6C(1)(vi).
(vi) Indebtedness in respect of judgments or awards (a) which
have been in force for less than the applicable appeal period or (b) in respect
of which the Company or any Subsidiary shall at the time in good faith be
prosecuting an appeal or proceedings for review and, in the case of each of
clauses (a) and (b), the Company or such Subsidiary shall have taken appropriate
reserves therefor in accordance with GAAP and execution of such judgment or
award shall not be levied.
(vii) To the extent permitted by paragraph 6C(1)(ix),
Indebtedness in respect of Capitalized Lease Obligations or secured by purchase
money security interests; provided, however, that (a) the aggregate principal
amount of all Indebtedness permitted by this paragraph 6C(2)(vii) which consists
of Indebtedness in respect of Capital Lease Obligations and other Indebtedness
incurred for the acquisition of equipment shall not exceed 2% of Consolidated
Net Tangible Assets at any one time outstanding and (b) that the aggregate
principal amount of all Indebtedness permitted by this paragraph 6C(2)(vii)
which consists of Indebtedness issued to sellers of any business or part thereof
or operating assets in consideration for the acquisition thereof by the Company
or a Subsidiary shall not exceed 4% of Consolidated Net Tangible Assets at any
one time outstanding.
23
(viii) Indebtedness in respect of deferred taxes arising in the
ordinary course of business.
(ix) Indebtedness in respect of inter-company loans and
advances among the Company and its Subsidiaries which are not prohibited by
paragraph 6C(4).
(x) Indebtedness of the Company in respect of its 12.75%
Guaranteed Senior Subordinated Debentures due December 15, 2000 (the
"Subordinated Debentures").
(xi) [Intentionally Omitted].
(xii) So long as the Intercreditor Agreement is in effect,
Funded Debt of the Company under the Bank Agreement not exceeding $395,000,000
in principal amount, and other "Credit Obligations" (as defined in the Bank
Agreement) of the Company and the Guarantors under the Bank Agreement.
(xiii) Unfunded pension liabilities with respect to Plans so
long as the Company is in compliance with paragraph 5N.
(xiv) Indebtedness outstanding on the date hereof and
described in Schedule 8D.
(xv) Unsecured Funded Debt of the Company; provided that
after giving effect to the issuance of such unsecured Funded Debt and the
application of any of the proceeds thereof on the issuance date no Default or
Event of Default shall exist and no Borrowing Base Deficiency shall exist, and
the Company shall have delivered to the holders a certificate of a Financial
Officer of the Company in reasonable detail demonstrating compliance with these
conditions after giving effect to such issuance and application; provided,
further, either (a) that the terms and conditions of such unsecured Funded Debt,
including without limitation, financial covenants, defaults, amortization and
rate of interest shall have been consented to by to the Majority Holders or (b)
that the aggregate outstanding principal amount of Indebtedness permitted under
this clause (b) and not consented to as provided in the preceding clause (a) at
no time shall exceed $20,000,000.
(xvi) Unsecured Funded Debt of the Company which is
subordinated to the Notes on terms satisfactory to the Majority Holders.
6C(3) Guarantees; Letters of Credit. Become or remain liable
with respect to any Guarantee, including reimbursement obligations under letters
of credit or other financial guarantees by third parties (or become
contractually committed to do so), except the following:
(i) Guarantees of the Guarantors of the Obligations.
(ii) Guarantees by the Company or its Subsidiaries of
Indebtedness incurred by any of its Subsidiaries and permitted by paragraph
6C(2).
(iii) Unsecured Guarantees by Wholly Owned Subsidiaries of
the Obligations or Indebtedness of the Company permitted by paragraph 6C(2)(x),
so long as such Wholly Owned Subsidiaries are Guarantors and such Guarantees are
subordinated to such Guarantors' Guarantees of the Obligations to the same
extent and in the same manner as the Indebtedness of the Company permitted by
paragraph 6C(2)(x).
(iv) Guarantees of the Company and reimbursement obligations
of the Company with respect to letters of credit issued in support of Lion Oil
Company, an Arkansas corporation, but only so long as the Investment represented
thereby is permitted under paragraph 6C(4)(vi).
24
(v) The unsecured Guarantee by TransMontaigne Product
Services Midwest Inc. (formerly known as Continental Ozark, Inc.), an Arkansas
corporation, of the Subordinated Debentures pursuant to the Senior Subordinated
Debenture Guarantee dated March 28, 1991 (the "Subordinated Debentures
Guarantee") executed by such corporation.
(vi) Letters of credit and Guarantees under the Bank
Agreement so long as the Intercreditor Agreement is in effect.
6C(4) Investments and Acquisitions. Have outstanding,
acquire, commit itself to acquire or hold any Investment (including any
Investment consisting of the acquisition of any business) (or become
contractually committed to do so), except for the following:
(i) Investments of the Company and its Subsidiaries in
Wholly Owned Subsidiaries as long as such Wholly Owned Subsidiaries are or
become Guarantors; provided, that Investments consisting of all or part of a
business or operating assets shall be permitted under this paragraph 6C(4)(i) to
the extent that such business or assets shall be acquired as assets of the
Company or of a Wholly Owned Subsidiary which is or becomes a Guarantor.
(ii) Intercompany loans and advances from any Wholly
Owned Subsidiary to the Company or other Wholly Owned Subsidiaries but in each
case only to the extent reasonably necessary for Consolidated tax planning and
working capital management.
(iii) Investments in Cash Equivalents.
(iv) Guarantees permitted by paragraph 6C(3).
(v) Investments made after June 30, 1999 in Subsidiaries
listed in Schedule 8A hereto as supplemented from time to time other than Wholly
Owned Subsidiaries, provided that the aggregate outstanding amount of loans,
advances and other Investments in such Subsidiaries, measured in each case as of
the date of the making of such Investment, shall not at any time exceed 15% of
Consolidated Net Tangible Assets.
(vi) Investments outstanding on the date hereof and
identified in Schedule 8D.
(vii) Investments consisting of acquisitions of an operating
business (whether through an asset acquisition or an acquisition of stock or
other equity) with the prior written consent of the Required Holder(s),
provided, that the Company and its Subsidiaries may acquire terminals in
Richmond, Virginia and Montvale, Virginia as set forth in Schedule 6A(5) for an
aggregate consideration of up to $5,800,000 (inclusive of working capital
adjustments).
6C(5) Merger, Consolidation and Dispositions of Assets. Merge
or enter into a consolidation or sell, lease, exchange, sell and leaseback,
sublease or otherwise dispose of any of its assets (or become contractually
committed to do so), except the following:
(i) The Company and any of its Subsidiaries may sell or
otherwise dispose of (a) inventory in the ordinary course of business, (b)
tangible assets to be replaced in the ordinary course of business within six
months by other tangible assets of equal or greater value and (c) tangible
assets that are no longer used or useful in the business of the Company or such
Subsidiary, the fair market value (or book value if greater) of which shall not
exceed 4% of Consolidated Net Tangible Assets of the Company and its
Subsidiaries as of the last day of the next preceding fiscal year; provided,
however, that neither Company nor any of its Subsidiaries shall sell, lease,
exchange, sell and leaseback, sublease or otherwise dispose of any of its
tangible assets (or become contractually committed to do so) described in the
definition of "Minimum Petroleum Products Inventory Requirements," except in
25
connection with a sale of fixed assets of the Company or any of its Subsidiaries
otherwise permitted by this Agreement; and, provided, further, that in the event
of any such sale the fair market value (or book value if greater) of such
tangible assets shall be included for purposes of the test set forth in the
foregoing clause (c).
(ii) Any Wholly Owned Subsidiary of the Company may merge
or be liquidated into the Company or any other Wholly Owned Subsidiary of the
Company so long as after giving effect to any such merger to which the Company
is a party the Company shall be the surviving or resulting Person.
(iii) The Company and its Subsidiaries may enter into leases
(other than Capitalized Leases) as lessor of real and tangible personal property
and rights associated therewith in the ordinary course of business.
(iv) Any inactive Subsidiary other than a Guarantor may be
liquidated.
6C(6) Lease Obligations. Be or become obligated as lessee under
any lease except:
(i) Capitalized Leases permitted by paragraph 6C(2)(vii) and
6C(1)(ix).
(ii) Leases other than Capitalized Leases; provided,
however, that the aggregate fixed rental obligations for any fiscal year
(excluding payments required to be made by the lessee in respect of taxes and
insurance whether or not denominated as rent) shall not exceed an amount equal
to 3% of Consolidated Net Tangible Assets.
6C(7) Sale/Leaseback. Enter into any arrangement, directly or
indirectly, whereby the Company or any Subsidiary shall sell or transfer any
property owned by it in order then or thereafter to lease such property or to
lease other property which the Company or such Subsidiary intends to use for
substantially the same purpose as the property being sold or transferred.
6D. Issuance of Stock by Subsidiaries; Subsidiary Distributions.
(i) Issuance of Stock by Subsidiaries. The Company will
not permit any Subsidiary to issue or sell any shares of its capital stock or
other evidence of beneficial ownership to any Person other than the Company or
any Wholly Owned Subsidiary of the Company, which shares shall have been pledged
to the Collateral Agent as part of the Loan Security.
(ii) No Restrictions on Subsidiary Distributions. Except
for this Agreement and the Loan Documents and the Bank Agreement, the Company
will not, and will not permit any Subsidiary to, enter into or be bound by any
agreement (including covenants requiring the maintenance of specified amounts of
net worth or working capital) restricting the right of any Subsidiary to make
Distributions or extensions of credit to the Company (directly or indirectly
through another Subsidiary).
6E. Derivative Contracts. The Company will not, and will not
permit any of its Subsidiaries to, enter into any Interest Rate Protection
Agreement, foreign currency exchange contract or other financial or commodity
derivative contracts except to provide hedge protection for an underlying
economic transaction in the ordinary course of business.
6F. Negative Pledge Clauses. The Company will not, and will not
permit any of its Subsidiaries to, enter into any agreement, instrument, deed or
lease which prohibits or limits the ability of the Company or any of its
Subsidiaries to create, incur, assume or suffer to exist any Lien upon any of
their respective properties, assets or revenues, whether now owned or hereafter
acquired or which requires the grant of any collateral for such obligation if
collateral is granted for another obligation, except the following:
26
(i) This Agreement and the other Loan Documents.
(ii) Covenants in documents creating Liens permitted by
paragraph 6C(1) prohibiting further Liens on the assets encumbered thereby.
(iii) The Bank Agreement.
6G. Transactions with Affiliates. The Company will not, and
will not permit any of its Subsidiaries to, effect any transaction with any of
their respective Affiliates (except for the Company and its Subsidiaries) on a
basis less favorable to the Company and its Subsidiaries than would be the case
if such transaction had been effected with a non-Affiliate.
6H. Inactive Subsidiaries. Notwithstanding anything to the
contrary in this Agreement, neither the Company nor any of its Subsidiaries
shall make any Investment in or sell, lease, sublease, exchange, transfer or
dispose of any assets to K123 Corporation, a Colorado corporation, Republic
Natural Gas Company, a Kansas corporation, GOIN Inc., TransMontaigne Canada Ltd.
or TransMontaigne Holding Inc., each of which is a Wholly Owned Subsidiary of
the Company, without the prior written consent of the Required Holder(s).
6I. Interest Rate Protection. On or before June 30, 2000,
unless the Term Loan shall have been paid in full, the Company shall obtain one,
and thereafter maintain, or more Interest Rate Protection Agreements, each in
form and substance reasonably satisfactory to the Required Holder(s), covering
50% of the Consolidated Funded Debt of the Company and its Subsidiaries,
excluding the outstanding principal amount of the Bank Revolving Loan.
6J. Interest Rate Protection Agreements. The Company shall
not enter into any Interest Rate Protection Agreement with any Person other than
BankBoston, N.A., an Affiliate of BankBoston, N.A., or any other Person that
shall have executed and delivered a written agreement of such Person, in form
and substance satisfactory to the Required Holder(s), to be bound by the terms
and provisions of the Intercreditor Agreement and the Security Agreement dated
January 13, 2000.
6K. Amendments to Bank Agreement. The Company will not,
without the prior written consent of the Majority Holder(s), amend, modify,
restate or otherwise change the Bank Agreement or any of the other Credit
Documents, each as in effect on the date hereof, and the Company hereby agrees
to give to the holders written notice of any such proposed amendment,
modification, restatement or other change.
7. EVENTS OF DEFAULT.
7A. Acceleration. If any of the following events shall occur
and be continuing for any reason whatsoever (and whether such occurrence shall
be voluntary or involuntary or come about or be effected by operation of law or
otherwise):
(i) the Company defaults in the payment of any principal of,
or Yield Maintenance Amount payable with respect to, any Note when the same
shall become due, either by the terms thereof or otherwise as herein provided;
or
(ii) the Company defaults in the payment of any interest on
any Note or any credit fee required by paragraph 5Q for more than three Business
Days after the date due; or
(iii) the Company or any Subsidiary defaults (whether as
primary obligor or as guarantor or other surety) in any payment of principal of
or interest on any other Financing Debt beyond any period of grace provided with
27
respect thereto, or the Company or any Subsidiary fails to perform or observe
any other agreement, term or condition contained in any agreement under which
any such obligation is created (or if any other event thereunder or under any
such agreement shall occur and be continuing) and the effect of such failure or
other event is to cause, or to permit the holder or holders of such obligation
(or a trustee on behalf of such holder or holders) to cause, such obligation to
become due (or to be repurchased by the Company or any Subsidiary) prior to any
stated maturity, provided that the aggregate amount of all obligations as to
which such a payment default shall occur and be continuing or such a failure or
other event causing or permitting acceleration (or resale to the Company or any
Subsidiary) shall occur and be continuing exceeds $3,000,000; or any Lien or any
property of the Company or any of its Subsidiary securing any such Financing
Debt shall be enforced by foreclosure or similar action; or
(iv) any representation or warranty made by the Company
herein or by any Obligor in any Loan Document or by the Company, any other
Obligor or any of their officers in any writing furnished in connection with or
pursuant to this Agreement or the other Loan Documents shall be false in any
material respect on the date as of which made; or
(v) the Company fails to perform or observe any term,
covenant or agreements contained in paragraphs 5A(v), 5J, 5M, 5O, 5V, 6A, 6B,
6C(1), 6C(2), 6C(3), 6C(4), 6C(5), 6C(6) or 6F; or
(vi) the Company or any other Obligor fails to perform or
observe any other agreement, covenant, term or condition contained herein or in
any other Loan Document and such failure shall not be remedied within 30 days
after the earlier of (a) Financial Officer obtains actual knowledge thereof or
(b) notice thereof by any holder to the Company; or
(vii) the Company or any Subsidiary makes an assignment for
the benefit of creditors or is generally not paying its debts as such debts
become due; or
(viii) any decree or order for relief in respect of the Company
or any Subsidiary is entered under any bankruptcy, reorganization, compromise,
arrangement, insolvency, readjustment of debt, dissolution or liquidation or
similar law, whether now or hereafter in effect (the "Bankruptcy Law"), of any
jurisdiction; or
(ix) the Company or any Subsidiary petitions or applies to
any tribunal for, or consents to, the appointment of, or taking possession by, a
trustee, receiver, custodian, liquidator or similar official of the Company or
any Subsidiary, or of any substantial part of the assets of the Company or any
Subsidiary, or commences a voluntary case under the Bankruptcy Law of the United
States or any proceedings (other than proceedings for the voluntary liquidation
and dissolution of a Subsidiary) relating to the Company or any Subsidiary under
the Bankruptcy Law of any other jurisdiction; or
(x) any such petition or application is filed, or any such
proceedings are commenced, against the Company or any Subsidiary and the Company
or such Subsidiary by any act indicates its approval thereof, consent thereto or
acquiescence therein, or an order, judgment or decree is entered appointing any
such trustee, receiver, custodian, liquidator or similar official, or approving
the petition in any such proceedings, and such order, judgment or decree remains
unstayed and in effect for more than 90 days; or
(xi) any order, judgment or decree is entered in any
proceedings against the Company decreeing the dissolution of the Company and
such order, judgment or decree remains unstayed and in effect for more than 60
days: or
(xii) any order, judgment or decree is entered in any
proceedings against the Company or any Subsidiary decreeing a split-up of the
Company or such Subsidiary which requires the divestiture of assets representing
a substantial part, or the divestiture of the stock of a Subsidiary whose assets
represent a substantial part, of the consolidated assets of the Company and its
Subsidiaries (determined in accordance with generally accepted accounting
28
principles) or which requires the divestiture of assets, or stock of a
Subsidiary, which shall have contributed a substantial part of the consolidated
net income of the Company and its Subsidiaries (determined in accordance with
generally accepted accounting principles) for any of the three fiscal years then
most recently ended, and such order, judgment or decree remains unstayed and in
effect for more than 60 days; or
(xiii) one or more final judgments or orders in an aggregate
amount in excess of $1,000,000 is rendered against the Company or any Subsidiary
and either (i) enforcement proceedings have been commenced by any creditor upon
any such judgment or order of (ii) within 60 days after entry thereof, such
judgment is not discharged or execution thereof stayed pending appeal, or within
60 days after the expiration of any such stay, such judgment is not discharged;
or
(xiv) any "reportable event" (as defined in section 4043 of
ERISA) shall have occurred that reasonably could be expected to result in
termination of a Plan or the appointment by the appropriate United States
District Court of a trustee to administer any Plan or the imposition of a Lien
in favor of a Plan; or any ERISA Group Person shall fail to pay when due amounts
aggregating in excess of $1,000,000 which it shall have become liable to pay to
the PBGC or to a Plan under Title IV of ERISA; or notice of intent to terminate
a Plan shall be filed under Title IV of ERISA by any ERISA Group Person or
administrator; or the PBGC shall institute proceedings under Title IV of ERISA
to terminate or to cause a trustee to be appointed to administer any Plan or a
proceeding shall be instituted by a fiduciary of any Plan against any ERISA
Group Person to enforce section 515 or 4219(c)(5) of ERISA and such proceeding
shall not have been dismissed within 60 days thereafter; or a condition shall
exist by reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Plan must be terminated; or
(xv) any Loan Document shall cease for any reason (other than
the scheduled termination thereof in accordance with its terms) to be
enforceable in accordance with its terms or in full force and effect and such
enforceability shall not be restored, or other provision therefor made, to the
satisfaction of the Majority Holders within 30 days following such cessation; or
any party to any Loan Document shall so assert in a judicial or similar
proceeding; or the security interests created by any Loan Document shall cease
to be enforceable and of the same effect and priority purported to be created
hereby; or
(xvi) except as permitted by paragraph 6C(5):
(a) the Company shall cease to own, directly or
indirectly, all the capital stock of any Subsidiary which is a Wholly Owned
Subsidiary on the date hereof or subsequently becomes a Wholly Owned Subsidiary;
(b) any Person, together with "affiliates" and
"associates" of such Person within the meaning of Rule 12b-2 of the Exchange
Act, which is not now a beneficial owner of equity securities of the Company
shall acquire after the date hereof beneficial ownership within the meaning of
Rule 13d-3 of the Exchange Act of 50% or more of either the voting stock or
total equity capital of the Company;
(c) a majority of the board of directors shall
consist of individuals who were not on the date hereof members of such board,
except to the extent that the new members were nominated by a majority of the
directors serving on the date hereof; and
(d) the Company or any of its Subsidiaries or any
other Obligor shall initiate any action to dissolve, liquidate or otherwise
terminate its existence; or
(xvii) there shall occur any "Event of Default" as defined in
Section 11.1 of the Subordinated Debentures Agreement, or any of the Obligations
shall fail to be "Superior Indebtedness" within the meaning of Section 9(a) of
the Subordinated Debentures Agreement; or
29
(xviii) there shall occur any "Fundamental Change" as defined
in the provisions of the Charter of the Company which relate to the Series A
Convertible Preferred Stock;
then (a) if such event is an Event of Default specified in clause (i) or (ii)
of this paragraph 7A, any holder of any Note may at its option, by notice in
writing to the Company, declare all of the Notes held by such holder to be, and
all of the Notes held by such holder shall thereupon be and become, immediately
due and payable together with interest accrued thereon and the credit fees
payable pursuant to paragraph 5Q with respect to all of such Notes, without
presentment, demand, protest or notice of any kind, all of which are hereby
waived by the Company, (b) if such event is an Event of Default specified in
clause (viii), (ix) or (x) of this paragraph 7A with respect to the Company, all
of the Notes at the time outstanding shall automatically become immediately due
and payable at par together with interest accrued thereon and the credit fees
payable pursuant to paragraph 5Q and the Yield-Maintenance Amount, if any, with
respect to all such Notes, without presentment, demand, protest or notice of any
kind, all of which are hereby waived by the Company, and (c) if such event is
any Event of Default other than as specified in preceding clause (b), the
Required Holder(s) of the Notes of any Series may at its or their option by
notice in writing to the Company, declare all of the Notes of such Series to be,
and all of the Notes of such Series shall thereupon be and become, immediately
due and payable together with interest accrued thereon and the credit fees
payable pursuant to paragraph 5Q and the Yield-Maintenance Amount, if any, with
respect to each Note of such Series, without presentment, demand, protest or
notice of any kind, all of which are hereby waived by the Company. The Company
acknowledges and the parties hereto agree, that the holder of each Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for) and the provisions for payment of
the Yield-Maintenance Amount by the Company in the event that the Notes are
prepaid or are accelerated as a result of an Event of Default, are intended to
provide compensation for the deprivation of such right under such circumstances.
7B. Rescission of Acceleration. At any time after any or
all of the Notes of any Series shall have been declared immediately due and
payable pursuant to paragraph 7A, the Required Holder(s) of the Notes of such
Series may, by notice in writing to the Company, rescind and annul such
declaration and its consequences if (i) the Company shall have paid all overdue
interest and the credit fees payable pursuant to paragraph 5Q on the Notes of
such Series, the principal of and Yield-Maintenance Amount, if any, payable with
respect to any Notes of such Series which have become due otherwise than by
reason of such declaration, and interest on such overdue interest, credit fees,
principal and Yield Maintenance Amount at the rate specified in the Notes of
such Series, (ii) the Company shall not have paid any amounts which have become
due solely by reason of such declaration, (iii) all Events of Default and
Defaults, other than non-payment of amounts which have become due solely by
reason of such declaration, shall have been cured or waived pursuant to
paragraph 12C, and (iv) no judgment or decree shall have been entered for the
payment of any amounts due pursuant to the Notes of such Series or this
Agreement. No such rescission or annulment shall extend to or affect any
subsequent Event of Default or Default or impair any right arising therefrom.
7C. Notice of Acceleration or Rescission. Whenever any Note
shall be declared immediately due and payable pursuant to paragraph 7A or any
such declaration shall be rescinded and annulled pursuant to paragraph 7B, the
Company shall forthwith give written notice thereof to the holder of each Note
of each Series at the time outstanding.
7D. Other Remedies. If any Event of Default or Default shall
occur and be continuing, (i) the holder of any Note may proceed to protect and
enforce its rights under this Agreement, such Note and the other Loan Documents
by exercising such remedies as are available to such holder in respect thereof
under applicable law, either by suit in equity or by action at law, or both,
whether for specific performance of any covenant or other agreement contained in
this Agreement or the other Loan Documents or in aid of the exercise of any
power granted in this Agreement or the other Loan Documents and (ii) both the
Collateral Agent and the holders of the Notes may exercise any rights or
remedies in their respective capacities under the Security Documents in
accordance with the provisions thereof. No remedy conferred in this Agreement or
the other Loan Documents upon the Collateral Agent or the holder of any Note is
30
intended to be exclusive of any other remedy, and each and every such remedy
shall be cumulative and shall be in addition to every other remedy conferred
herein or now or hereafter existing at law or in equity or by statute or
otherwise.
7E. Annulment of Defaults. Once an Event of Default has
occurred, such Event of Default shall be deemed to exist and be continuing for
all purposes of the Loan Documents until the Majority Holders (unless otherwise
specified in paragraph 12C) shall have waived such Event of Default in writing,
stated in writing that the same has been cured to such holders reasonable
satisfaction or entered into an amendment to this Agreement which by its express
terms cures such Event of Default, at which time such Event of Default shall no
longer be deemed to exist or to have continued. No such action by the holders
shall extend to or affect any subsequent Event of Default or impair any rights
of the holders upon the occurrence thereof. The making of any extension of
credit (including the purchase of Notes) during the existence of any Default or
Event of Default shall not constitute a waiver thereof.
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company
represents, covenants and warrants as follows:
8A. Organization.
(i) The Company. The Company is a corporation duly
organized and validly existing in good standing under the laws of the State of
Delaware, and the Company has the corporate power to own its respective property
and to carry on its respective business as now being conducted. The execution,
delivery and performance by the Company of this Agreement and the other Loan
Documents to which it is a party (including, without limitation to grant the
Collateral Agent, for the benefit of the holders, the security interests in the
Loan Security owned by it to secure the Obligations) are within the Company's
corporate powers and have been duly authorized by all necessary corporate
action. Certified copies of the Charter and By-laws of the Company have been
previously delivered to the holders and are correct and complete. Schedule 8A,
as from time to time hereafter supplemented in accordance with paragraphs 5A(i)
and 5A(ii), sets forth, as of the later of the date hereof or as of the end of
the most recent fiscal quarter for which financial statements are required to be
furnished in accordance with such paragraphs, (i) the jurisdiction of
incorporation of the Company, (ii) the address of the Company's principal
executive office and chief place of business, (iii) each name, including any
trade name, under which the Company conducts its business and (iv) the
jurisdictions in which the Company owns real or tangible personal property.
(ii) Subsidiaries. Each Subsidiary is a corporation duly
organized and validly existing in good standing under the laws of the
jurisdiction in which it is incorporated, and each Subsidiary has the corporate
power to own its respective property and to carry on its respective business as
now being conducted. The execution, delivery and performance by each Subsidiary
of this Agreement and the other Loan Documents to which it is a party
(including, without limitation to grant the Collateral Agent for the benefit of
the holders the security interests in the Loan Security owned by it to secure
the Obligations) are within such Subsidiarys corporate powers and have been
duly authorized by all necessary corporate action. Certified copies of the
Charter and By-laws of each Guarantor have been previously delivered to the
Purchasers and are correct and complete. Schedule 8A, as from time to time
hereafter supplemented in accordance with paragraphs 5A(i) and 5A(ii), sets
forth, as of the later of the date hereof or as of the end of the most recent
fiscal quarter for which financial statements are required to be furnished in
accordance with such paragraphs, (i) the jurisdiction of incorporation of each
Subsidiary, (ii) the address of each Subsidiarys principal executive office and
chief place of business, (iii) each name, including any trade name, under which
such Subsidiary conducts its business and (iv) the jurisdictions in which such
Subsidiary owns real or tangible personal property; provided, however, that
there may be omitted from Schedule 8A one or more Subsidiaries which have no
business operations and no assets or liabilities.
(iii) Capitalization. No options, warrants, conversion
rights, preemptive rights or other statutory or contractual rights to purchase
shares of capital stock or other securities of any Subsidiary now exist, nor has
31
any Subsidiary authorized any such right, nor is any Subsidiary obligated in any
other manner to issue shares of its capital stock or other securities.
8B. Financial Statements. (i) The Company has furnished each
Purchaser of any Existing Notes or any Accepted Notes with the following
financial statements, provided by a principal Financial Officer of the Company:
(i) Consolidated balance sheets of the Company and its Subsidiaries as at the
fiscal year end of each of the three fiscal years of the Company most recently
completed prior to the date as of which this representation is made or repeated
to such Purchaser (other than fiscal years completed within 95 days prior to
such date for which audited financial statements have not been released) and
Consolidated statements of income, of stockholders' equity and of cash flows of
the Company and its Subsidiaries for each such year, all reported on by KPMG LLP
(formerly KPMG Peat Marwick LLP); and (ii) a Consolidated balance sheet of the
Company and its Subsidiaries as at the end of the quarterly period (if any) most
recently completed prior to such date and after the end of such fiscal year
(other than quarterly periods completed within 50 days prior to such date for
which financial statements have not been released) and the comparable quarterly
period in the preceding fiscal year and Consolidated statements of income, of
stockholders' equity and of cash flows for the periods from the beginning of the
fiscal years in which such quarterly periods are included to the end of such
quarterly periods, prepared by the Company. Such financial statements (including
any related schedules and/or notes) are true and correct in all material
respects (subject, as to interim statements, to changes resulting from audits
and year-end adjustments), have been prepared in accordance with generally
accepted accounting principles consistently followed throughout the periods
involved and show all liabilities, direct and contingent, of the Company and its
Subsidiaries required to be shown in accordance with such principles. The
balance sheets fairly present the condition of the Company and its Subsidiaries
as at the dates thereof, and the statements of income, stockholders' equity and
cash flows fairly present the results of the operations of the Company and its
Subsidiaries and their cash flows for the periods indicated. There has been no
material adverse change in the business, property or assets, condition
(financial or otherwise) operations or prospects of the Company and its
Subsidiaries taken as a whole since the end of the most recent fiscal year for
which such audited financial statements have been furnished, and neither the
Company nor any Subsidiary of the Company has entered into any material
transaction outside the ordinary course of business except for the transactions
contemplated by this Agreement and the Material Agreements.
(ii) The Company has furnished to each Purchaser of
Existing Notes or Accepted Notes (a) the financial and operational projections
of the Company and its Subsidiaries dated December 31, 1999, (b) a current
capital expenditures plan of the Company and its Subsidiaries dated January 31,
2000 and (c) calculations demonstrating pro forma compliance with the
Computation Covenants as of the end of the most recent quarter preceding the
date hereof. In the Company's judgment, the financial and operational
projections referred to in clause (a) above constitute a reasonable basis as of
December 31, 1999 for the assessment of the future performance of the Company
and its Subsidiaries during the periods indicated therein, it being understood
that any projected financial information represents an estimate, based on
various assumptions, of future results of operations, which assumptions may
prove to have been incorrect and which results may not in fact occur.
8C. Actions Pending. There is no action, suit, investigation
or proceeding pending or, to the knowledge of the Company, threatened against
the Company or any of its Subsidiaries, or any properties or rights of the
Company or any of its Subsidiaries, by or before any court, arbitrator or
administrative or governmental body which might result in any material adverse
change in the business, property or assets, condition (financial or otherwise)
or operations of the Company and its Subsidiaries taken as a whole. There is no
action, suit, investigation or proceeding pending or, to the knowledge of the
Company, threatened against the Company or any of its Subsidiaries which
purports to affect the validity or enforceability of this Agreement or any other
Loan Document.
8D. Outstanding Debt. Schedule 8D, as from time to time
hereafter supplemented in accordance with paragraph 5A(i) and 5A(ii) sets forth
(a) the amounts (as of the dates indicated in Schedule 8D, as so supplemented)
of all Financing Debt of the Company and its Subsidiaries and all agreements
which relate to such Financing Debt, (b) all Liens and Guarantees with respect
to such Financing Debt, (c) all agreements which directly or indirectly require
the Company or any Subsidiary to make any Investment and (d) all Investments
permitted under paragraph 6C(4)(vi). The Company has furnished the Purchasers
32
with correct and complete copies of any agreements described in clauses (a),
(b), (c) and (d) above requested by the Purchasers. There exists no default
under the provisions of any instrument evidencing such Indebtedness or of any
agreement relating thereto.
8E. Title to Properties. The Company has and each of its
Subsidiaries has defensible title to its respective real properties (other than
properties which it leases) and good title to all of its other respective
properties and assets, including the properties and assets reflected in the most
recent audited balance sheet referred to in paragraph 8B (other than properties
and assets disposed of in the ordinary course of business), subject to no Lien
of any kind except Liens permitted by paragraph 6C(1) and except for assets
disposed of as permitted by paragraph 6C(5). All leases necessary in any
material respect for the conduct of the respective businesses of the Company and
its Subsidiaries are valid and subsisting and are in full force and effect.
8F. Taxes. The Company has and each of its Subsidiaries has
filed all federal, state and other income tax returns which, to the best
knowledge of the officers of the Company and its Subsidiaries, are required to
be filed, and each has paid all taxes as shown on such returns and on all
assessments received by it to the extent that such taxes have become due, except
such taxes as are being contested in good faith by appropriate proceedings for
which adequate reserves have been established in accordance with generally
accepted accounting principles.
8G. Conflicting Agreements and Other Matters. Neither the
Company nor any of its Subsidiaries is a party to any contract or agreement or
subject to any charter or other corporate restriction which materially and
adversely affects its business, property or assets, condition (financial or
otherwise) or operations. Neither the execution nor delivery of this Agreement,
the Notes or the other Loan Documents, nor the offering, issuance and sale of
the Notes, nor fulfillment of nor compliance with the terms and provisions
hereof and of the Notes or the other Loan Documents conflicts or will conflict
with, or has resulted in or will result in a breach of, the terms, conditions or
provisions of, or constitutes or will constitute a default under, or has
resulted or will result in any violation of, or has resulted or will result in
the creation of any Lien upon any of the properties or assets of the Company or
any of its Subsidiaries pursuant to, the Charter or By-laws of the Company or
any of its Subsidiaries, any award of any arbitrator or any agreement (including
any agreement with stockholders), instrument, order, judgment, decree, statute,
law, rule or regulation to which the Company or any of its Subsidiaries is
subject (other than the Liens created by the Security Documents). Neither the
Company nor any of its Subsidiaries is a party to, or otherwise subject to any
provision contained in, any instrument evidencing Indebtedness of the Company or
such Subsidiary, any agreement relating thereto or any other contract or
agreement (including its Charter) which limits the amount of, or otherwise
imposes restrictions on the incurring of, Indebtedness of the Company of the
type evidenced by the Existing Notes or to be evidenced by the Shelf Notes
except as set forth in the agreements listed in Schedule 8G attached hereto.
8H. Offering of Notes. Neither the Company nor any agent
acting on its behalf has, directly or indirectly, offered the Notes or any
similar security of the Company for sale to, or solicited any offers to buy the
Notes or any similar security of the Company from, or otherwise approached or
negotiated with respect thereto with, any Person other than institutional
investors, and neither the Company nor any agent acting on its behalf has taken
or will take any action which would subject the issuance or sale of the Notes to
the provisions of Section5 of the Securities Act or to the provisions of any
securities or Blue Sky law of any applicable jurisdiction.
8I. Use of Proceeds. None of the proceeds of the sale of any
Notes have been or will be used, directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of purchasing or carrying any "margin
stock" as defined in Regulation U (12 CFR Part 221) (including as previously in
effect as Regulation G (12 CFR Part 207)) of the Board of Governors of the
Federal Reserve System ("margin stock") or for the purpose of maintaining,
reducing or retiring any Indebtedness which was originally incurred to purchase
or carry any stock that is then currently a margin stock or for any other
purpose which might constitute the purchase of such Notes a "purpose credit"
within the meaning of such Regulation U, unless the Company shall have delivered
to the Purchaser which is purchasing such Notes, on the Closing Day for such
Notes, an opinion of counsel satisfactory to such Purchaser stating that the
33
purchase of such Notes does not constitute a violation of such 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 the Notes to violate Regulation
T, U (including as previously in effect as Regulation G) or X or any other
regulation of the Board of Governors of the Federal Reserve System or to violate
the Exchange Act, in each case as in effect now or as the same may hereafter be
in effect.
8J. ERISA. No accumulated funding deficiency (as defined
in section 302 of ERISA and section 412 of the Code), whether or not waived,
exists with respect to any Plan (other than a Multiemployer Plan). No liability
to the PBGC has been or is expected by the Company or any ERISA Affiliate to be
incurred with respect to any Plan (other than a Multiemployer Plan) by the
Company, any Subsidiary or any ERISA Affiliate which is or would be materially
adverse to the business, property or assets, condition (financial or otherwise)
or operations of the Company and its Subsidiaries taken as a whole. Neither the
Company, any Subsidiary nor any ERISA Affiliate has incurred or presently
expects to incur any withdrawal liability under Title IV of ERISA with respect
to any Multiemployer Plan which is or would be materially adverse to the
business, property or assets, condition (financial or otherwise) or operations
of the Company and its Subsidiaries taken as a whole. The execution and delivery
of this Agreement and the issuance and sale of the Shelf Notes will be, and the
issuance and sale of the Existing Notes was, exempt from or will not, and, in
the case of the Existing Notes, did not, involve any transaction which is
subject to the prohibitions of section 406 of ERISA and will not, and, in the
case of the Existing Notes, did not, involve any transaction in connection with
which a penalty could be imposed under section 502(i) of ERISA or a tax could be
imposed pursuant to section 4975 of the Code. The representation by the Company
in the next preceding sentence is made in reliance upon and subject to the
accuracy of the representation of each Purchaser in paragraph 9B as to the
source of funds used and to be used by it to purchase any Notes. Each
Multiemployer Plan and each plan that constitutes a defined benefit plan (as
defined in ERISA) are set forth in Schedule 8J.
8K. Governmental Consent. Neither the nature of the Company or
of any Subsidiary, nor any of their respective businesses or properties, nor any
relationship between the Company or any Subsidiary and any other Person, nor any
circumstance in connection with the offering, issuance, sale or delivery of the
Notes is, or, in the case of the Existing Notes, was, such as to require, or, in
the case of the Existing Notes, have required, any authorization, consent,
approval, exemption or any action by or notice to or filing with any court or
administrative or governmental or regulatory body (other than routine filings
after the Closing Day for any Notes with the Securities and Exchange Commission
and/or state Blue Sky authorities and filings necessary to perfect the
Collateral Agent's security interest in the Loan Security) in connection with
the execution and delivery of this Agreement, the offering, issuance, sale or
delivery of the Notes or fulfillment of or compliance with the terms and
provisions hereof or of the Notes.
8L. Disclosure. Neither this Agreement nor any other
document, certificate or statement furnished to any Purchaser by or on behalf of
the Company in connection herewith 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. There is no fact peculiar to the
Company or any of its Subsidiaries which materially adversely affects or in the
future may (so far as the Company can now foresee) materially adversely affect
the business, property or assets, condition (financial or otherwise) or
operations of the Company or any of its Subsidiaries and which has not been set
forth in this Agreement or in the section of the Companys prospectus dated
February 11, 1997 titled Risk Factors. In the Company's judgment, the
financial and operational projections dated December 31, 1999 and current
capital expenditures plan of the Company and its Subsidiaries dated January 31,
2000 constitute a reasonable basis as of such dates for the assessment of the
future performance of the Company and its Subsidiaries during the periods
indicated therein, it being understood that any projected financial information
represents an estimate, based on various assumptions, of future results of
operations, which assumption may prove to have been incorrect and which results
may not in fact occur.
8M. Hostile Tender Offers. None of the proceeds of the sale
of any Notes will be, or, in the case of the Existing Notes, have been, used to
finance a Hostile Tender Offer.
34
8N. Licenses, etc. To the best knowledge of the Company and the
Guarantors, the Company and its Subsidiaries have all material patents, patent
applications, patent licenses, patent rights, trademarks, trademark rights,
trade names, trade name rights, copyrights, licenses, franchises, permits,
authorizations and other rights as are necessary for the conduct of the business
of the Company and its Subsidiaries as now conducted by them. All of the
foregoing are in full force and effect in all material respects, and each of the
Company and its Subsidiaries is in substantial compliance with the foregoing
without any known conflict with the valid rights of others which has resulted,
or creates a material risk of resulting, in any Material Adverse Effect. No
event has occurred which permits, or after notice or lapse of time or both would
permit, the revocation or termination of any such license, franchise or other
right or which affects the rights of any of the Company and its Subsidiaries
thereunder so as to result, or to create a material risk of resulting, in any
Material Adverse Effect. No litigation or other proceeding or dispute exists
with respect to the validity or, where applicable, the extension or renewal, of
any of the foregoing which has resulted, or creates a material risk of
resulting, in any Material Adverse Effect.
8O. Certain Business Representations.
(i) Labor Relations. No dispute or controversy between
the Company or any of its Subsidiaries and any of their respective employees has
resulted, or is reasonably likely to result, in any Material Adverse Effect, and
neither the Company nor any of its Subsidiaries anticipates that its
relationships with its unions or employees will result, or are reasonably likely
to result, in any Material Adverse Effect. The Company and each of its
Subsidiaries is in compliance in all material respects with all federal and
state laws with respect to (a) non-discrimination in employment with which the
failure to comply, in the aggregate, has resulted, or creates a material risk of
resulting, in a Material Adverse Effect and (b) the payment of wages.
(ii) Antitrust. Each of the Company and its Subsidiaries is
in compliance in all material respects with all federal and state antitrust laws
relating to its business and the geographic concentration of its business.
(iii) Consumer Protection. Neither the Company nor any of its
Subsidiaries is in violation of any rule, regulation, order, or interpretation
of any rule, regulation or order of the Federal Trade Commission (including
truth-in-lending), with which the failure to comply, in the aggregate, has
resulted, or creates a material risk of resulting, in a Material Adverse Effect.
(iv) Burdensome Obligations. Neither the Company nor any
of its Subsidiaries is party to or bound by any agreement, instrument, deed or
lease or is subject to any Charter, By-law or other restriction, commitment or
requirement which, in the opinion of the management of such Person, is so
unusual or burdensome as in the foreseeable future to result, or create a
material risk of resulting, in a Material Adverse Effect.
(v) Future Expenditures. Neither the Company nor any of its
Subsidiaries anticipate that the future expenditures, if any, by the Company and
its Subsidiaries needed to meet the provisions of any federal, state or foreign
governmental statutes, orders, rules or regulations will be so burdensome as to
result, or create a material risk of resulting, in any Material Adverse Effect.
(vi) Year 2000 Issues. Based on a review of the operations
of the Company and its Subsidiaries as they relate to the processing, storage
and retrieval of data, the Company does not believe that a Material Adverse
Change is reasonably likely to occur as a result of computer software and
hardware that will not function with respect to periods commencing January 1,
2000 at least as effectively as with respect to periods ending on or prior to
December 31, 1999.
8P. Environmental Regulations.
(i) Environmental Compliance. To the best knowledge of the
Company and the Guarantors, each of the Company and its Subsidiaries is in
35
compliance in all material respects with the Clean Air Act, the Federal Water
Pollution Control Act, the Marine Protection Research and Sanctuaries Act, RCRA,
CERCLA and any other Environmental Law in effect in any jurisdiction in which
any properties of the Company or any of its Subsidiaries are located or where
any of them conducts its business, and with all applicable published rules and
regulations (and applicable standards and requirements) of the federal
Environmental Protection Agency and of any similar agencies in states or foreign
countries in which the Company or its Subsidiaries conducts its business, in
each case other than those which in the aggregate have not resulted, and do not
create a material risk of resulting, in a Material Adverse Effect.
(ii) Environmental Litigation. Except in instances in
which such event has not resulted, and does not create a material risk of
resulting, in a Material Adverse Effect, no suit, claim, action or proceeding of
which the Company or any of its Subsidiaries has been given notice or otherwise
has knowledge is now pending before any court, governmental agency or board or
other forum, or to the Company's or any of its Subsidiaries knowledge,
threatened by any Person (nor to the Company's or any of its Subsidiaries'
knowledge, does any factual basis exist therefor) for, and neither the Company
nor any of its Subsidiaries have received written correspondence from any
federal, state or local governmental authority with respect to:
(a) noncompliance by the Company or any of its
Subsidiaries with any Environmental Law;
(b) personal injury, wrongful death or other tortious
conduct relating to materials, commodities or products used, generated, sold,
transferred or manufactured by the Company or any of its Subsidiaries (including
products made of, containing or incorporating asbestos, lead or other hazardous
materials, commodities or toxic substances); or
(c) the release into the environment by the Company or
any of its Subsidiaries of any Hazardous Material generated by the Company or
any of its Subsidiaries whether or not occurring at or on a site owned, leased
or operated by the Company or any of its Subsidiaries.
(iii) Hazardous Material. Schedule 8P contains a list as of
the date hereof of all waste disposal or dump sites at which Hazardous Material
generated by either the Company or any of its Subsidiaries has been disposed of
directly by the Company or any of its Subsidiaries and all independent
contractors to whom the Company and its Subsidiaries have delivered Hazardous
Material, or to the Company's or any of its Subsidiarys knowledge, where
Hazardous Material finally came to be located, and indicates all such sites
which are or have been included (including as a potential or suspect site) in
any published federal, state or local "superfund" or other list of hazardous or
toxic waste sites, except sites as to which the involvement of the Company or
any Subsidiary has not resulted, and does not present a material risk of
resulting, in a Material Adverse Effect. Any waste disposal or dump sites at
which Hazardous Material generated by either the Company or any of its
Subsidiaries has been disposed of directly by the Company or any of its
Subsidiaries and all independent contractors to whom the Company or any of its
Subsidiaries have delivered Hazardous Material, or to the Company's or any of
its Subsidiaries' knowledge, where Hazardous Material finally came to be
located, has not resulted, and does not present a material risk of resulting, in
a Material Adverse Effect.
(iv) Environmental Condition of Properties. None of the
properties owned or leased by the Company or any of its Subsidiaries has been
used as a treatment, storage or disposal site, other than as disclosed in
Schedule 8P, except sites as to which the involvement of the Company or any
Subsidiary has not resulted, and does not present a material risk of resulting,
in a Material Adverse Effect. No Hazardous Material is present in any real
property currently or formerly owned or operated by the Company or any of its
Subsidiaries except that which has not resulted, and does not present a material
risk of resulting, in a Material Adverse Effect.
36
8Q. Foreign Trade Regulations; Government Regulation.
(i) Foreign Trade Regulations. Neither the execution and
delivery of this Agreement or any other Loan Document, nor issuance by the
Company of any Notes, nor the guaranteeing of the Obligations by any Guarantor,
nor the securing of the Obligations with the Loan Security, has constituted or
resulted in or will constitute or result in the violation of any Foreign Trade
Regulation.
(ii) Government Regulation. Neither the Company nor any of
its Subsidiaries, nor any Person controlling the Company or any of its
Subsidiaries or under common control with the Company or any of its
Subsidiaries, has been at any time on or after April 17, 1997 subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Investment Company Act, the Interstate Commerce Act or any other
statute or regulation that regulates the incurring by the Company or any of its
Subsidiaries of Financing Debt as contemplated by this Agreement and the other
Loan Documents.
8R. Facility Conversion Date. The Facility Conversion Date
occurred on February 14, 1997.
8S. Bank Agreement. The Company has previously furnished the
Purchasers with a correct and complete copy of the Bank Agreement (including all
schedules and exhibits) in effect as of the date hereof.
8T. Material Agreements. The Company has previously furnished
to the Purchasers a correct and complete copy of the Amended and Restated
Debenture Agreement dated December 23, 1997 (the "Subordinated Debentures
Agreement") between the Company, Massachusetts Mutual Life Insurance Company,
Mass Mutual Corporate Investors and Mass Mutual Participation Investors, and
correct and complete copies, including all exhibits, schedules and amendments
thereto, of the agreements and instruments, each as in effect on the date
hereof, listed on Schedule 8T (together with the Subordinated Debentures, the
Subordinated Debentures Agreement, the Subordinated Debentures Guarantee and the
Bank Agreement, the "Material Agreements"). The Notes constitute Superior
Indebtedness as defined in the Subordinated Debentures Agreement.
8U. Minimum Petroleum Products Inventory Requirements. The
Minimum Petroleum Products Inventory Requirements of the Company and its
Subsidiaries on a Consolidated basis is 2,300,000 barrels as of the date hereof.
9. REPRESENTATIONS OF THE PURCHASERS.
Each Purchaser represents as follows:
9A. Nature of Purchase. Such Purchaser is not acquiring the
Notes purchased by it hereunder with a view to or for sale in connection with
any distribution thereof within the meaning of the Securities Act, provided that
the disposition of such Purchaser's property shall at all times be and remain
within its control.
9B. Source of Funds. The source of the funds being used by such
Purchaser to pay the purchase price of the Notes being purchased by such
Purchaser hereunder constitutes assets (i) allocated to the insurance company
general account of such Purchaser (as such term is defined under Section V of
the United States Department of Labors Prohibited Transaction Class Exemption
(PTCE) 95-60), and as of the date of the purchase of the Notes such Purchaser
satisfies all of the applicable requirements for relief under Section I and IV
of PtCE 95-60, (ii) allocated to a separate account maintained by such Purchaser
in which no employee benefit plan, other than employee benefit plans identified
on a list which has been furnished by such Purchaser to the Company,
participates to the extent of 10% or more or (iii) of an investment fund, the
assets of which do not include assets of any employee benefit plan within the
meaning of ERISA. For the purpose of this paragraph 9B, the terms "separate
account" and "employee benefit plan" shall have the respective meanings
specified in section 3 of ERISA.
37
10. DEFINITIONS. For the purpose of this Agreement, the terms
defined in the recitals hereto and paragraphs 1 and 2 shall have the respective
meanings specified therein, and the following terms shall have the meanings
specified with respect thereto below (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
10A. Yield-Maintenance Terms.
"Called Principal" shall mean, with respect to any Note,
the principal of such Note that is to be prepaid pursuant to paragraph 4A(2) or
4B or is declared to be immediately due and payable pursuant to paragraph 7A, as
the context requires.
"Designated Spread" shall mean 0.75% in the case of each
Series A Note and 0% in the case of each Note of any other Series unless the
Confirmation of Acceptance with respect to the Notes of such Series specifies a
different Designated Spread in which case it shall mean, with respect to each
Note of such Series, the Designated Spread so specified.
"Discounted Value" shall mean, with respect to the Called
Principal of any Note, the amount obtained by discounting all Remaining
Scheduled Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a discount
factor (applied on the same periodic basis as that on which interest on such
Note is payable) equal to the Reinvestment Yield with respect to such Called
Principal.
"Reinvestment Yield" shall mean, with respect to the
Called Principal of any Note, the Designated Spread plus the yield to maturity
implied by (i) the yields reported, as of 10:00 A.M. (New York City local time)
on the Business Day next preceding the Settlement Date with respect to such
Called Principal, on the display designated as "Page 678" on the Telerate
Service (or such other display as may replace page 678 on the Telerate Service)
for actively traded U.S. Treasury securities having a maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement Date, or
if such yields shall not be reported as of such time or the yields reported as
of such time shall not be ascertainable, (ii) the Treasury Constant Maturity
Series yields reported, for the latest day for which such yields shall have been
so reported as of the Business Day next preceding the Settlement Date with
respect to such Called Principal, in Federal Reserve Statistical Release H.15
(519) (or any comparable successor publication) for actively traded U.S.
Treasury securities having a constant maturity equal to the Remaining Average
Life of such Called Principal as of such Settlement Date. Such implied yield
shall be determined, if necessary, by (a) converting U.S. Treasury bill
quotations to bond-equivalent yields in accordance with accepted financial
practice and (b) interpolating linearly between yields reported for various
maturities.
"Remaining Average Life" shall mean, with respect to
the Called Principal of any Note, the number of years (calculated to the nearest
one-twelfth year) obtained by dividing (i) such Called Principal into (ii) the
sum of the products obtained by multiplying (a) each Remaining Scheduled Payment
of such Called Principal (but not of interest thereon) by (b) the number of
years (calculated to the nearest one-twelfth year) which will elapse between the
Settlement Date with respect to such Called Principal and the scheduled due date
of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" shall mean, with respect
to the Called Principal of any Note, all payments of such Called Principal and
interest thereon that would be due on or after the Settlement Date with respect
to such Called Principal if no payment of such Called Principal were made prior
to its scheduled due date.
"Settlement Date" shall mean, with respect to the
Called Principal of any Note, the date on which such Called Principal is to be
prepaid pursuant to paragraph 4A(2) or 4B or is declared to be immediately due
and payable pursuant to paragraph 7A, as the context requires.
"Yield-Maintenance Amount" shall mean, with respect to
any Note, an amount equal to the excess, if any, of the Discounted Value of the
38
Called Principal of such Note over the sum of (i) such Called Principal plus
(ii) interest accrued thereon as of (including interest due on) the Settlement
Date with respect to such Called Principal. The Yield-Maintenance Amount shall
in no event be less than zero.
10B. Other Terms.
"Acceptance" shall have the meaning specified in paragraph
2F.
"Acceptance Day" shall have the meaning specified in
paragraph 2F.
"Acceptance Window" shall have the meaning specified in
paragraph 2F. "Accepted Note" shall have the meaning specified in paragraph 2F.
"Accumulated Benefit Obligations" shall mean the
actuarial present value of the accumulated benefit obligations under any Plan,
calculated in accordance with Statement No. 87 of the Financial Accounting
Standards Board.
"Affiliate" shall mean, with respect to the Company (or
any other specified Person), any other Person directly or indirectly
controlling, controlled by or under direct or indirect common control with the
Company, and shall include (a) any executive officer or director or general
partner of the Company and (b) any Person of which the Company or any Affiliate
(as defined in clause (a) above) of the Company shall, directly or indirectly,
beneficially own either (i) at least 25% of the outstanding equity securities
having the general power to vote or (ii) at least 25% of all equity interests;
provided, however, that Lion Oil Company, an Arkansas corporation, shall not be
deemed to be an Affiliate of the Company or of any Subsidiary of the Company
under clause (b) of this definition, unless the Company or such Subsidiary
shall, directly or indirectly, beneficially own either (x) at least 30% of the
outstanding equity securities having the general power to vote of Lion Oil
Company or (y) at least 30% of all equity interests in Lion Oil Company.
"Agreement" shall have the meaning specified in paragraph
12C.
"Authorized Officer" shall mean (i) in the case of the
Company, its chief executive officer, its chief financial officer, any vice
president of the Company designated as an "Authorized Officer" of the Company in
the Information Schedule attached hereto or any vice president of the Company
designated as an "Authorized Officer" of the Company for the purpose of this
Agreement in an Officer's Certificate executed by the Company's chief executive
officer or chief financial officer and delivered to Prudential, and (ii) in the
case of Prudential, any officer of Prudential designated as its "Authorized
Officer" in the Information Schedule or any officer of Prudential designated as
its "Authorized Officer" for the purpose of this Agreement in a certificate
executed by one of its Authorized Officers. Any action taken under this
Agreement on behalf of the Company by any individual who on or after April 17,
1997 shall have been an Authorized Officer of the Company and whom Prudential in
good faith believes to be an Authorized Officer of the Company at the time of
such action shall be binding on the Company even though such individual shall
have ceased to be an Authorized Officer of the Company, and any action taken
under this Agreement on behalf of Prudential by any individual who on or after
April 17, 1997 shall have been an Authorized Officer of Prudential and whom the
Company in good faith believes to be an Authorized Officer of Prudential at the
time of such action shall be binding on Prudential even though such individual
shall have ceased to be an Authorized Officer of Prudential.
"Available Facility Amount" shall have the meaning specified
in paragraph 2A.
"Bank Agent" shall mean BankBoston, N.A. (formerly known
as First National Bank of Boston) and any successor agent under the Bank
Agreement.
"Bank Agreement" shall mean the Fourth Amended and Restated
Credit Agreement, dated as of February 11, 2000, among the Company, the
Subsidiaries of the Company from time to time party thereto, the lenders from
time to time party thereto, Bank Boston, N.A., both in its capacity as agent for
itself and the
39
other lenders, NationsBank, N.A., both in its capacity as a lender and in its
capacity as Documentation Agent thereunder, and First Union National Bank, both
in its capacity as a lender and in its capacity as Syndication Agent thereunder,
as amended from time to time.
"Bank Letter of Credit Exposure" shall mean the Letter of
Credit Exposure as defined in the Bank Agreement.
"Bank Obligations" shall mean the obligations of the Company
and the other Obligors under the Bank Agreement.
"Bank Revolving Loan" shall mean the Revolving Loan as
defined in the Bank Agreement.
"Bank Swingline Loan" shall mean the Swingline Loan as
defined in the Bank Agreement.
"Bank Term Loan" shall mean the Term Loan as defined in the
Bank Agreement.
"Bankruptcy Default" shall mean an Event of Default
described in paragraph 7A(vii), 7A(viii) or 7A(ix).
"Bankruptcy Law" shall have the meaning specified in clause
(viii) of paragraph 7A.
"Borrowing Base" shall have the meaning specified in
paragraph 5V.
"Borrowing Base Certificate" shall mean a certificate in
substantially the form of Schedule 5A(iii)(i).
"Borrowing Base Deficiency" shall mean the amount by
which (A) the aggregate unpaid principal amount of the Obligations and the Bank
Obligations exceeds (B) the Borrowing Base.
"Borrowing Base Deficiency Date" shall have the meaning
specified in paragraph 5V.
"Business Day" shall mean any day other than (i) a Saturday
or a Sunday, (ii) a day on which commercial banks in New York City are required
or authorized to be closed and (iii) for purposes of paragraph 2C hereof only, a
day on which Prudential is not open for business.
"By-laws" shall mean all written by-laws, rules,
regulations and all other documents relating to the governance or internal
regulation of any Person other than an individual, or interpretive of the
Charter of such Person, all as from time to time in effect.
"Cancellation Date" shall have the meaning specified in
paragraph 2I(3).
"Cancellation Fee" shall have the meaning specified in
paragraph 2I(3).
"Capital Expenditures" means, for any period, amounts
added or required to be added to the property, plant and equipment or other
fixed assets account on the Consolidated balance sheet of the Company and its
Subsidiaries, prepared in accordance with GAAP, including expenditures in
respect of (a) the acquisition, construction, improvement or replacement of
land, buildings, machinery, equipment, leaseholds and any other real or personal
property, (b) to the extent not included in clause (a) above, materials,
contract labor and direct labor relating thereto (excluding amounts properly
expensed as repairs and maintenance in accordance with GAAP) and (c) software
development costs to the extent not expensed; provided, however, that Capital
Expenditures shall not include the purchase price for the acquisition of another
Person (or substantially all the assets of another Person) as a going concern
40
permitted by paragraph 6C(4)
"Capitalized Lease" shall mean any lease which is required
to be capitalized on the balance sheet of the lessee in accordance with GAAP,
including Statement Nos. 13 and 98 of the Financial Accounting Standards Board.
"Capitalized Lease Obligations" shall mean the amount of the
liability reflecting the aggregate discounted amount of future payments under
all Capitalized Leases calculated in accordance with GAAP, including Statement
Nos. 13 and 98 of the Financial Accounting Standards Board.
"Cash Equivalents" shall mean:
(a) negotiable certificates of deposit, time deposits
(including sweep accounts), demand deposits and bankers' acceptances having a
maturity of nine months or less and issued by any United States financial
institution having capital and surplus and undivided profits aggregating at
least $100,000,000 and rated at least Prime-1 by Moody's Investors Service, Inc.
or A-1 by Standard & Poor's Ratings Service or issued by any lender under the
Bank Agreement;
(b) corporate obligations having a maturity of nine
months or less and rated at least Prime-1 by Moody's Investors Service, Inc. or
A-1 by Standard & Poor's Ratings Service or issued by any lender under the Bank
Agreement (so long as the Intercreditor Agreement is in effect);
(c) any direct obligation of the United States of
America or any agency or instrumentality thereof, or of any state or
municipality thereof, (i) which has a remaining maturity at the time of purchase
of not more than one year or which is subject to a fully collateralized
repurchase agreement with any lender under the Bank Agreement (so long as the
Intercreditor Agreement is in effect) (or any other financial institution
referred to in clause (a) above) exercisable within one year from the time of
purchase and (ii) which, in the case of obligations of any state or
municipality, is rated at least Aa by Moody's Investors Service, Inc. or AA by
Standard & Poor's Ratings Service; and
(d) any mutual fund or other pooled investment vehicle
rated at least Aa by Moody's Investors Service, Inc. or AA by Standard & Poor's
Ratings Service which invests principally in obligations described above.
"CERCLA" shall mean the federal Comprehensive Environmental
Response, Compensation and Liability Act of 1980.
"Charter" shall mean the articles of organization,
certificate of incorporation, statute, constitution, joint venture agreement,
partnership agreement, trust indenture, limited liability company agreement or
other charter document of any Person other than an individual, each as from time
to time in effect.
"Closing Day" for any Accepted Note shall mean the
Business Day specified for the closing of the purchase and sale of such Note in
the Request for Purchase of such Note, provided that (i) if the Acceptance Day
for such Accepted Note is less than five Business Days after the Company shall
have made such Request for Purchase and the Company and the Purchaser which is
obligated to purchase such Note agree on an earlier Business Day for such
closing, the "Closing Day" for such Accepted Note shall be such earlier Business
Day, and (ii) if the closing of the purchase and sale of such Accepted Note is
rescheduled pursuant to paragraph 2H, the Closing Day for such Accepted Note,
for all purposes of this Agreement except paragraph 2I(3), shall mean the
Rescheduled Closing Day with respect to such closing.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
41
"Collateral Agent" shall mean the Collateral Agent under
the Intercreditor Agreement, the Pledge Agreements, the Security Agreements and
the other Security Documents, which shall initially be Bank Boston, N.A. (f/k/a
The First National Bank of Boston).
"Company" shall mean TranMontaigne Inc., a Delaware
corporation.
"Computation Covenants" shall mean paragraphs 5O, 6A,
6B(ii), 6C(2)(vii), 6C(2)(xv), 6C(4)(v), 6C(5)(i) and 6C(6)(ii) and the last
sentence of paragraph 6B.
"Confirmation of Acceptance" shall have the meaning
specified in paragraph 2F.
"Confidential Information" shall have the meaning specified
in paragraph 2D.
"Consolidated" and "Consolidating", when used with
reference to any term, shall mean that term as applied to the accounts of the
Company (or other specified Person) and all of its Subsidiaries (or other
specified group of Persons), or such of its Subsidiaries as may be specified,
consolidated (or combined) or consolidating (or combining), as the case may be,
in accordance with GAAP and with appropriate deductions for minority interests
in Subsidiaries.
"Consolidated Current Assets" shall mean, at any date,
all amounts that are or should be carried as current assets on the balance sheet
of the Company and its Subsidiaries (other than cash and Cash Equivalents)
determined in accordance with GAAP on a Consolidated basis.
"Consolidated Current Liabilities" shall mean, at any
date, all amounts that are or should be carried as current liabilities on the
balance sheet of the Company and its Subsidiaries determined in accordance with
GAAP on a Consolidated basis, including the current portion of all Funded Debt
and all reimbursement obligations, whether contingent or matured, under letters
of credit.
"Consolidated EBITDA" shall mean, for any period, the total
of:
(a) Consolidated Net Income; plus
(b) all amounts deducted in computing such
Consolidated Net Income in respect of (i) depreciation, amortization and other
non-cash charges (including increases of reserves), (ii) Consolidated Interest
Expense and (iii) taxes based upon or measured by net income; plus
(c) all amounts included in computing such
Consolidated Net Income in respect of any non-cash reductions in the value of
Minimum Petroleum Products Inventory Requirements; minus
(d) all amounts included in computing such
Consolidated Net Income in respect of any non-cash increases in the value of
Minimum Petroleum Products Inventory Requirements; minus
(e) all amounts included in computing such
Consolidated Net Income in respect of Distributions in any form other than cash;
minus
(f) all amounts included in Consolidated Net Income in
respect of deferred income tax benefits; minus
(g) all amounts representing payments from
reserves to pay liabilities during such period that were not deducted in
computing such Consolidated Net Income.
"Consolidated Fixed Charges" shall mean, for any period,
the sum of:
42
(a) Consolidated Interest Expense, plus
(b) the aggregate amount of all mandatory scheduled
payments, mandatory scheduled prepayments and sinking fund payments, all with
respect to Financing Debt of the Company and its Subsidiaries in accordance with
GAAP on a Consolidated basis, including payments in the nature of principal
under Capitalized Leases, but in no event including contingent prepayments
required by paragraph 4A or by section 4.2 of the Bank Agreement, plus
(c) any Distributions paid or payable in cash by the
Company or any of its Subsidiaries to third parties, plus
(d) any taxes based upon or measured by net
income paid or payable in cash by the Company or any of its Subsidiaries, plus
(e) the aggregate fixed rental obligations
(excluding payments required to be made by the lessee in respect of taxes and
insurance whether or not denominated as rent) of the Company and its
Subsidiaries determined accordance with GAAP on a Consolidated basis as lessee
under all leases of real and/or personal property (other than Capitalized
Leases).
"Consolidated Interest Expense" shall mean, for any period,
the sum of:
(a) the aggregate amount of interest, including
without limitation commitment fees and fees payable with respect to letters of
credit issued under the Bank Agreement, payments in the nature of interest under
Capitalized Leases and net payments under Interest Rate Protection Agreements,
accrued by the Company and its Subsidiaries (whether such interest is reflected
as an item of expense or capitalized) in accordance with GAAP on a Consolidated
basis; minus
(b) to the extent otherwise included in clause
(a) above, the amortization of deferred financing fees and costs, original issue
discount relating to Indebtedness and accrued interest on Indebtedness not paid
in cash to the extent permitted by the terms, including subordination terms, of
such Indebtedness (including PIK Interest); plus
(c) actual cash payments with respect to accrued
and unpaid interest (including PIK Interest) that has previously reduced
Consolidated Interest Expense pursuant to clause (b) above.
"Consolidated Net Income" shall mean, for any period, the
net earnings (or loss) before dividend requirements for preferred stock of the
Company and its Subsidiaries, determined in accordance with GAAP on a
Consolidated basis; provided, however, that Consolidated Net Income shall not
include:
(a) the earnings (or loss) of any Person accrued
prior to the date such Person becomes a Subsidiary or is merged into or
consolidated with the Company or any of its Subsidiaries;
(b) the earnings (or loss) of any Person (other
than a Subsidiary) in which the Company or any of its Subsidiaries has an
ownership interest; provided, however, that (i) Consolidated Net Income shall
include amounts in respect of the earnings of such Person when actually received
in cash by the Company or such Subsidiary in the form of dividends or similar
Distributions and (ii) Consolidated Net Income shall be reduced by the aggregate
amount of all Investments, regardless of the form thereof, made by the Company
or any of its Subsidiaries in such Person for the purpose of funding any deficit
or loss of such Person;
(c) all amounts included in computing such net
earnings (or loss) in respect of the write-up of any asset or the retirement of
43
any Indebtedness or equity at less than face value after April 30, 1998;
(d) extraordinary and nonrecurring gains;
(e) the earnings of any Subsidiary to the extent the
payment of such earnings in the form of a Distribution or repayment of
Indebtedness to the Company or a Wholly Owned Subsidiary is not permitted,
whether on account of any Charter or By-law restriction, any agreement,
instrument, deed or lease or any law, statute, judgment, decree or governmental
order, rule or regulation applicable to such Subsidiary; and
(f) any after-tax gains or losses attributable to
returned surplus assets of any Plan.
"Consolidated Net Liabilities" shall mean, on any date, the
difference of (a)Consolidated Total Liabilities of the Company and its
Subsidiaries on such date minus (b) an amount equal to 75% of the Consolidated
Current Assets of the Company and its Subsidiaries on such date.
"Consolidated Net Tangible Assets" shall mean at any date
the total of:
(a) the total assets of the Company and its
Subsidiaries determined in accordance with GAAP on a Consolidated basis; minus
(b) Consolidated Current Liabilities; minus
(c) all other liabilities of the Company and its
Subsidiaries determined in accordance with GAAP on a Consolidated basis other
than liabilities for Funded Debt; minus
(d) the amount of intangible assets carried on the
balance sheet of the Company and its Subsidiaries determined in accordance with
GAAP on a Consolidated basis, including goodwill, patents, patent applications,
copyrights, trademarks, trade names, research and development expense,
organizational expense, annualized debt discount and expense, deferred financing
charges and debt acquisition costs; minus
(e) the amount at which any minority interest in a
Subsidiary appears as a liability on the Consolidated balance sheet of the
Company and its Subsidiaries.
"Consolidated Net Total Liabilities" means on any date
the difference (which may be a negative number) of (a) the Consolidated Total
Liabilities on such date of the Company and its Subsidiaries, including therein,
without limitation, the outstanding principal amount, if any, of the "Revolving
Loan" and the "Swingline Loan" and the outstanding "Letter of Credit Exposure"
(each as defined in the Bank Agreement) under the Bank Agreement and excluding
therefrom all Indebtedness of the Company and its Subsidiaries to the extent
that such Indebtedness is secured by moneys available to be drawn under a Letter
of Credit (as defined in the Bank Agreement), minus (b) the Consolidated Current
Assets of the Company and its Subsidiaries as of such date; provided that for
purposes of clause (b) of this definition, Consolidated Current Assets shall
include cash and Cash Equivalents.
"Consolidated Pro Forma EBITDA" shall mean, for any
period, the Consolidated EBITDA of the Company and its Subsidiaries for such
period adjusted to include the results of operations of any Person, business or
assets acquired by the Company or a Subsidiary, and exclude the results of
operations of any Person, business or assets disposed of, during such period for
the portion of such period which preceded such acquisition or disposition, as
the case may be, the method of making any such adjustment to be reasonably
satisfactory to the Majority Holders.
44
"Consolidated Tangible Net Worth" shall mean, at any date,
the total of:
(a) stockholders' equity of the Company and its
Subsidiaries determined in accordance with GAAP on a Consolidated basis,
excluding the effect of any foreign currency translation adjustments (but in any
event including in such equity, on a Consolidated basis, the Series A
Convertible Preferred Stock and any other convertible preferred stock of the
Company at the time outstanding); minus
(b) the amount by which such stockholders' equity
has been increased after April 30, 1998 by the items described in clause (a),
(b), (c), (e) or (f) of the definition of Consolidated Net Income; minus
(c) to the extent not already deducted from the
amount in clause (a) above, (i) treasury stock, (ii) receivables due from an
employee stock ownership plan and (iii) Guarantees of Indebtedness incurred by
an employee stock ownership plan; minus
(d) the amount of intangible assets carried on the
balance sheet of the Company and its Subsidiaries determined in accordance with
GAAP on a Consolidated basis, including goodwill, patents, patent applications,
copyrights, trademarks, trade names, research and development expense,
organizational expense, unamortized debt discount and expense, deferred
financing charges and debt acquisition costs.
"Consolidated Total Liabilities" shall mean, at any date,
all Indebtedness of the Company and its Subsidiaries on a Consolidated basis.
"Credit Fee Computation Covenants" shall have the meaning
specified in paragraph 5Q.
"Delayed Delivery Fee" shall have the meaning specified in
paragraph 2I(2).
"Delivery Date" shall have the meaning specified in
paragraph 5Q.
"Distribution" shall mean, with respect to the Company (or
other specified Person):
(a) the declaration or payment of any dividend or
distribution, including dividends payable in shares of capital stock of or other
equity interests in the Company (or such specified Person), on or in respect of
any shares of any class of capital stock of or other equity interests in the
Company (or such specified Person);
(b) the purchase, redemption or other retirement
of any shares of any class of capital stock of or other equity interest in the
Company (or such specified Person) or any of its Subsidiaries or of options,
warrants or other rights for the purchase of such shares, directly, indirectly
through a Subsidiary or corporate parent or otherwise;
(c) any other distribution on or in respect of any
shares of any class of capital stock of or equity or other beneficial interest
in the Company (or such specified Person);
(d) any payment of principal or interest with
respect to, or any purchase, redemption or defeasance of, any Financing Debt of
the Company (or such specified Person) or any of its Subsidiaries which by its
terms or the terms of any agreement is subordinated to the payment of the
Obligations; and
(e) any payment of principal with respect to, or any
purchase, redemption or defeasance of, any Financing Debt of the Company (or
such specified Person) or any of its Subsidiaries (other than the Obligations)
prior to the stated maturity thereof (excluding repayment of Financing Debt with
the proceeds of assets sales approved by the Required Holder(s), repayment of
the Bank Revolving Loan, and scheduled amortization of principal of Financing
Debt); and
45
(f) any payment, loan or advance by the Company (or
such specified Person) to, or any other Investment by the Company (or such
specified Person) in, the holder of any shares of any class of capital stock of
or equity interest in the Company (or such specified Person) or any of its
Subsidiaries, or any Affiliate of such holder.
provided, however, that the term "Distribution" shall not
include (i) the accrual of unpaid dividends on the Series A Convertible
Preferred Stock or dividends on the Series A Convertible Preferred Stock paid
solely in the form of additional shares of the Series A Convertible Preferred
Stock, (ii) dividends payable in perpetual common stock of or other similar
equity interests in the Company (or such specified Person), (iii) payments in
the ordinary course of business in respect of (A) reasonable compensation paid
to employees, officers and directors or (B) advances to employees for travel
expenses, drawing accounts and similar expenditures, (iv) any loan or advance by
the Company to any Guarantor or (v) any other loan or advance by the Company
which constitutes an Investment permitted under paragraphs 6C(4)(v) or
6C(4)(vi).
"Eligible Cash and Cash Equivalents" shall mean as Eligible
Cash and Cash Equivalents defined in the Bank Agreement.
"Environmental Laws" shall mean all applicable federal,
state, local and foreign statutes, laws, ordinances, codes, rules, regulations
and guidelines (including consent decrees and administrative orders) relating to
emissions, discharges, releases or threatened releases of Polluting Substances
into the environment (including, without limitation, airs, surface water,
ground, water or land), or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Polluting Substances or public health and safety and protection of the
environment, including OSHA.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended.
"ERISA Affiliate" shall mean any corporation which is a
member of the same controlled group of corporations as the Company within the
meaning of section 414(b) of the Code, or any trade or business which is under
common control with the Company within the meaning of section 414(c) of the
Code.
"ERISA Group Person" shall mean the Company, any
Subsidiary of the Company and any Person which is a member of the controlled
group or under common control with the Company or any of its Subsidiaries within
the meaning of section 414 of the Code or section 4001(a)(14) of ERISA.
"Event of Default" shall mean any of the events specified
in paragraph 7A, provided that there has been satisfied any requirement in
connection with such event for the giving of notice, or the lapse of time, or
the happening of any further condition, event or act, and "Default" shall mean
any of such events, whether or not any such requirement has been satisfied.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
"Existing Master Shelf Agreement" shall have the meaning
specified in the recitals hereto.
"Existing Notes" shall have the meaning specified in the
recitals hereto and in paragraph 1A.
"Facility" shall have the meaning specified in paragraph 2A.
"Facility Fee" shall have the meaning specified in
paragraph 2I(1).
"Facility Conversion Date" shall have the meaning specified
in the Bank Agreement as in effect on December 18, 1996.
46
"Financial Officer" of the Company (or other specified
Person) shall mean its chief executive officer, chief financial officer, chief
operating officer, chairman, president, treasurer or any of its vice presidents
whose primary responsibility is for its financial affairs, in each case whose
incumbency and signatures have been certified to the Majority Holders by the
secretary or other appropriate attesting officer of the Company (or such
specified Person).
"Financing Debt" shall mean each of the items described
in clauses (a) through (f) of the definition of the term "Indebtedness" and,
without duplication, any Guarantees of such items.
"Foreign Trade Regulations" means (a) any act that
prohibits or restricts, or empowers the President or any executive agency of the
United States of America to prohibit or restrict, exports to or financial
transactions with any foreign country or foreign national, (b) the regulations
with respect to certain prohibited foreign trade transactions set forth at 22
C.F.R Parts 120-130 and 31 C.F.R. Part 500 and (c) any order, regulation,
ruling, interpretation, direction, instruction or notice relating to any of the
foregoing.
"Funded Debt" shall mean all Indebtedness of the Company
or other specified Person which is payable more than one year from the date of
creation thereof and shall include (a) current maturities of such Indebtedness
and (b) all Indebtedness consisting of reimbursement obligations with respect to
letters of credit other than letters of credit issued to finance inventory
purchases or to secure other debt appearing on the balance sheet of the obligor.
"Guarantee" shall mean, with respect to the Company (or
other specified Person):
(a) any guarantee by the Company (or such specified
Person), of the payment or performance of, or any contingent obligation by the
Company (or such specified Person), in respect of, any Indebtedness or other
obligation of any primary obligor;
(b) any other arrangement whereby credit is
extended to a primary obligor on the basis of any promise or undertaking of the
Company (or such specified Person), including any binding "comfort letter" or
"keep well agreement" written by the Company (or such specified Person), to a
creditor or prospective creditor of such primary obligor, to (i) pay the
Indebtedness of such primary obligor, (ii) purchase an obligation owed by such
primary obligor, (iii) pay for the purchase or lease of assets or services
regardless of the actual delivery thereof or (iv) maintain the capital, working
capital, solvency or general financial condition of such primary obligor;
(c) any liability of the Company (or such specified
Person), as a general partner of a partnership in respect of Indebtedness or
other obligations of such partnership;
(d) any liability of the Company (or such specified
Person) as a joint venturer of a joint venture in respect of Indebtedness or
other obligations of such joint venture;
(e) any liability of the Company (or such
specified Person) with respect to the tax liability of others as a member of a
group (other than a group consisting solely of the Company and its Subsidiaries)
that is consolidated for tax purposes; and
(f) reimbursement obligations, whether contingent
or matured, of the Company (or such specified Person) with respect to letters of
credit, bankers acceptances, surety bonds, other financial guarantees and
Interest Rate Protection Agreements,
in each case whether or not any of the foregoing are
reflected on the balance sheet of the Company (or such specified Person) or in a
footnote thereto; provided, however, that the term "Guarantee" shall not include
47
endorsements for collection or deposit in the ordinary course of business. The
amount of any Guarantee and the amount of Indebtedness resulting from such
Guarantee shall be the maximum amount that the guarantor may become obligated to
pay in respect of the obligations (whether or not such obligations are
outstanding at the time of computation).
"Guarantor" shall mean each Subsidiary listed on the
signature page hereto or which subsequently becomes party to this Agreement as a
Guarantor.
"Hazardous Material" shall mean any pollutant, toxic or
hazardous material or waste, including any "hazardous substance" or "pollutant"
or "contaminant" as defined in section 101(14) of CERCLA or any other
Environmental Law or regulated as toxic or hazardous under RCRA or any other
Environmental Law.
"Hedge Treasury Note(s)" shall mean, with respect to any
Accepted Note, the United States Treasury Note or Notes whose duration (as
determined by Prudential) most closely matches the duration of such Accepted
Note.
"Holders" shall mean the holders of the Notes from time to
time.
"Hostile Tender Offer" shall mean, with respect to the use
of proceeds of any Note, any offer to purchase, or any purchase of, shares of
capital stock of any corporation or equity interests in any other entity, or
securities convertible into or representing the beneficial ownership of, or
rights to acquire, any such shares or equity interests, if such shares, equity
interests, securities or rights are of a class which is publicly traded on any
securities exchange or in any over-the-counter market, other than purchases of
such shares, equity interests, securities or rights representing less than 5% of
the equity interests or beneficial ownership of such corporation or other entity
for portfolio investment purposes, and such offer or purchase has not been duly
approved by the board of directors of such corporation or the equivalent
governing body of such other entity prior to the date on which the Company makes
the Request for Purchase of such Note.
"Indebtedness" shall mean all obligations, contingent or
otherwise, which in accordance with GAAP are required to be classified upon the
balance sheet of the Company (or other specified Person) as liabilities, but in
any event including (without duplication):
(a) borrowed money;
(b) indebtedness evidenced by notes, debentures or
similar instruments;
(c) Capitalized Lease Obligations;
(d) the deferred purchase price of assets, services
or securities, including related noncompetition, consulting and stock repurchase
obligations (other than ordinary trade accounts payable within six months after
the incurrence thereof in the ordinary course of business);
(e) mandatory redemption or dividend obligations on
capital stock (or other equity)(excluding, however, any such obligation in
respect of the Series A Convertible Preferred Stock), including provisions that
require the exchange of such capital stock (or other equity) for Indebtedness
from the issuer;
(f) reimbursement obligations, whether contingent
or matured, with respect to letters of credit, bankers acceptances, surety
bonds, other financial guarantees and Interest Rate Protection Agreements;
(g) unfunded pension liabilities;
(h) obligations that are immediately and directly
due and payable out of the proceeds of or production from property;
48
(i) liabilities secured by any Lien existing on
property owned or acquired by the Company (or such specified Person), whether or
not the liability secured thereby shall have been assumed; and
(j) all Guarantees in respect of Indebtedness of
others.
"Indemnified Liabilities" shall have the meaning specified
in paragraph 5U.
"Indemnified Party" shall have the meaning specified in
paragraph 5U.
"Indemnifying Party" shall have the meaning specified in
paragraph 5U.
"Intercreditor Agreement" shall mean the Intercreditor
Agreement, dated as of April 17, 1996, among the Bank Agent, the lenders from
time to time party to the Bank Agreement, Prudential and U.S. Fund, as amended
from time to time.
"Interest Rate Protection Agreement" shall mean any
interest rate swap, interest rate cap, interest rate hedge or other contractual
arrangement that converts variable interest rates into fixed interest rates,
fixed interest rates into variable interest rates or other similar arrangements.
"Investment" shall mean, with respect to the Company (or
other specified Person):
(a) any share of capital stock, partnership or other
equity interest, evidence of Indebtedness or other security issued by any other
Person to the Company (or such other specified Person);
(b) any loan, advance or extension of credit to, or
contribution to the capital of, any other Person;
(c) any Guarantee of the obligations of any other
Person;
(d) any acquisition of all or any part of the
business of any other Person or the assets comprising such business or part
thereof; and
(e) any other similar investment.
The investments described in the foregoing clauses
(a) through (e) shall be included in the term "Investment" whether they are made
or acquired by purchase, exchange, issuance of stock or other securities,
merger, reorganization or any other method; provided, however, that the term
"Investment" shall not include (i) current trade and customer accounts
receivable for property leased, goods furnished or services rendered in the
ordinary course of business and payable in accordance with customary trade
terms, (ii) advances and prepayments to suppliers for property leased, goods
furnished and services rendered in the ordinary course of business, (iii)
advances to employees for travel expenses, drawing accounts and similar
expenditures, (iv) stock or other securities acquired in connection with the
satisfaction or enforcement of Indebtedness or claims due to the Company (or
such specified Person) or as security for any such Indebtedness or claim, (v)
demand deposits in banks or similar financial institutions or (vi) joint
operating agreements conducted by Wholly Owned Subsidiaries of the Company with
each other or with third parties.
In determining the amount of outstanding Investments:
(A) the amount of any Investment shall be the cost thereof
(excluding any amounts paid in respect of inventory or other working capital
items) minus any returns of capital in cash on such Investment (determined in
accordance with GAAP without regard to amounts realized as income on such
Investment);
49
(B) the amount of any Investment in respect of a purchase
described in clause (d) above shall be increased by the amount of any Financing
Debt assumed in connection with such purchase or secured by any asset acquired
in such purchase (whether or not any Financing Debt is assumed) or for which any
Person that becomes a Subsidiary is liable on the date on which the securities
of such Person are acquired; and
(C) no Investment shall be increased as the result of an
increase in the undistributed retained earnings of the Person in which the
Investment was made or decreased as a result of an equity interest in the losses
of such Person.
"Issuance Period" shall have the meaning specified in
paragraph 2B.
"Legal Requirement" means any present or future
requirement imposed upon the Company and its Subsidiaries by any law, statute,
rule, regulation, directive, order, decree or guideline (or any interpretation
thereof by courts or of administrative bodies) of the United States of America,
or any state or political subdivision of any of the foregoing, or by any board,
governmental or administrative agency, central bank or monetary authority of the
United States of America, any jurisdiction where the Company or any of its
Subsidiaries owns property or conducts its business, or any political
subdivision of any of the foregoing.
"Leverage Ratio" shall mean on any date the quotient,
expressed as a percentage, equal to the Consolidated Funded Debt of the Company
and its Subsidiaries divided by the Consolidated Net Tangible Assets of the
Company and its Subsidiaries.
"Lien" shall mean, with respect to the Company (or any other
specified Person):
(a) any lien, encumbrance, mortgage, pledge,
charge or security interest of any kind upon any property or assets of the
Company (or such specified Person), whether now owned or hereafter acquired, or
upon the income or profits therefrom;
(b) the acquisition of, or the agreement to acquire,
any property or asset upon conditional sale or subject to any other title
retention agreement, device or arrangement (including a Capitalized Lease);
(c) the sale, assignment, pledge or transfer for
security of any accounts, general intangibles or chattel paper of the Company
(or such specified Person), with or without recourse;
(d) in the case of securities, any purchase option,
call or similar purchase right of a third party;
(e) the transfer of any tangible property or
assets for the purpose of subjecting such items to the payment of previously
outstanding Indebtedness in priority to payment of the general creditors of the
Company (or such specified Person); and
(f) the existence for a period of more than 120
consecutive days of any Indebtedness against the Company (or such specified
Person) which if unpaid would by law or upon a Bankruptcy Default be given any
priority over general creditors.
"Loan Documents" shall mean:
(a) this Agreement, the Notes, the Intercreditor
Agreement, the Pledge Agreements, the Security Agreements, the other Security
Documents and each Interest Rate Protection Agreement provided by a holder (or
an Affiliate of a holder) to the Company or any of its Subsidiaries, each as
from time to time in effect;
50
(b) all financial statements, reports, notices,
mortgages, assignments, UCC financing statements or certificates delivered to
the Collateral Agent or any of the holders by the Company, any of its
Subsidiaries or any other Obligor in connection herewith or therewith; and
(c) any other present or future agreement or
instrument from time to time entered into among the Company, any of its
Subsidiaries or any other Obligor, on one hand, and the Collateral Agent, any or
all the holders, on the other hand, relating to, amending or modifying this
Agreement or any other Loan Document referred to above or which is stated to be
a Loan Document, each as from time to time in effect.
"Loan Security" shall mean all assets now or from time to
time hereafter subjected to a security interest, mortgage or charge (or intended
or required so to be subjected pursuant to this Agreement, the Security
Agreements or any other Loan Document) to secure the payment or performance of
any of the Obligations, including the assets described in the Pledge Agreements,
the Security Agreements and the other Security Documents.
"Majority Holders" shall mean, at any time, the holders of
more than 50% of the outstanding principal amount of the Notes outstanding at
such time.
"Material Adverse Change" shall mean, since any specified
date or from the circumstances existing immediately prior to the happening of
any specified event, a material adverse change in the business, assets,
financial condition or income of the Company and its Subsidiaries on a
Consolidated basis, whether as a result of (a) general economic conditions
affecting the petroleum industry, (b) difficulties in obtaining supplies and raw
materials, (c) fire, flood or other natural calamities, (d) environmental
pollution, (e) regulatory changes, judicial decisions, war or other governmental
action or (f) any other event or development, whether or not related to those
enumerated above.
"Material Adverse Effect" shall mean (i) a materially
adverse effect on business, assets, operations, prospects, income or condition,
financial or otherwise, of the Company and its Subsidiaries on a Consolidated
basis, (ii) material impairment of the ability of the Company or any of its
Subsidiaries to perform any of their obligations under this Agreement or any of
the other Loan Documents, or (iii) material impairment of the rights of or
benefits available to the holders or the Collateral Agent under this Agreement
or any of the other Loan Documents.
"Material Agreements" shall have the meaning specified in
paragraph 8T.
"Minimum Petroleum Products Inventory Requirements"
shall mean, on any date, the physical amount of petroleum products, consisting
of pipeline fill, tank bottoms and intransit barrels and working stocks, which
must be maintained by the Company and its Subsidiaries within their pipelines
and terminals and those of third parties in order for the Company and its
Subsidiaries to meet the exchange and supply needs of their customers in an
efficient and timely manner, which amount shall in no event be less than
2,000,000 barrels or exceed 3,500,000 barrels.
"Moody's" shall mean Moody's Investors Service, Inc.
"Multiemployer Plan" shall mean any Plan which is a
"multiemployer plan" (as such term is defined in section 4001(a)(3) of ERISA).
"Notes" shall mean the Existing Notes and the Shelf Notes.
"Obligations" shall mean all present and future liabilities,
obligations and Indebtedness of the Company, any of its Subsidiaries or any
other Obligor owing to any holder (or any Affiliate of any holder) under or in
connection with this Agreement or any other Loan Document, including without
limitation obligations in respect of principal, interest and Interest Rate
51
Protection Agreements provided by a holder (or an Affiliate of a holder),
Yield-Maintenance Amount, commitment fees, Facility Fees, amounts provided for
in paragraphs 2I(2), 2I(3) and 12B, credit fees provided for in paragraph 5Q,
and other fees, charges, indemnities and expenses from time to time owing
hereunder or under any other Loan Document (all whether accruing before or after
a Bankruptcy Default and regardless of whether allowed as a claim in bankruptcy
or similar proceedings).
"Obligor" shall mean the Company, each Guarantor and
each Person guaranteeing, providing collateral for or subordinating obligations
to the Obligations.
"Officer's Certificate" shall mean a certificate signed
in the name of the Company by an Authorized Officer of the Company.
"Open Position" shall mean any difference (whether
positive or negative) between (a) the number of barrels of petroleum product the
Company and its Subsidiaries hold in inventory or have contracted to buy and (b)
the number of barrels of petroleum product the Company and its Subsidiaries have
contracted to sell.
"OSHA" shall mean the federal Occupational Health and Safety
Act.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
or any successor entity.
"Percentage Interest" shall mean, at any time, the ratio
that the respective amounts of the Obligations owing to the holders in respect
of the Notes to the total outstanding Obligations owing to all holders in
respect of the Notes.
"Person" shall mean and include an individual, a
partnership, a limited liability, joint stock or other company, a joint venture,
a corporation, a trust, an unincorporated organization, and a government or any
department or agency thereof.
"PIK Interest" shall mean any accrued interest payments
on Financing Debt that are postponed or made through the issuance of
"payment-in-kind" notes on other similar securities (including book-entry
accrual with respect to such postponed interest payments), all in accordance
with the terms of such Financing Debt; provided, however, that in no event shall
PIK Interest include payments made with cash or Cash Equivalents.
"Plan" shall mean any employee pension benefit plan (as
such term is defined in section 3 of ERISA) which is or has been established or
maintained, or to which contributions are or have been made, by the Company or
any ERISA Affiliate.
"Pledge Agreements" shall mean, collectively, the Pledge
Agreement, dated as of April 17, 1997, made by the Company and TransMontaigne
Transportation Services, Inc., an Arkansas corporation, to Bank Boston, N.A.
(f/k/a The First National Bank of Boston), as agent for the holders of the
Notes, as amended from time to time and all Pledge Agreements hereafter executed
by any Subsidiary of the Company as contemplated under paragraph 5R, as each may
be amended, supplemented or otherwise modified from time to time.
"Pledged Indebtedness" has the meaning specified in the
Pledge Agreement.
"Pledged Rights" has the meaning specified in the Pledge
Agreement.
"Pledged Securities" means the Pledged Stock, the Pledged
Rights and the Pledged Indebtedness, collectively.
"Pledged Stock" has the meaning specified in the Pledge
Agreement.
52
"Polluting Substances" means all pollutants, contaminants,
chemicals or industrial, toxic or hazardous substances or wastes and shall
include, without limitation, any flammable explosives, radioactive materials,
oil, hazardous materials, hazardous or solid wastes, hazardous or toxic
substances or related materials defined in applicable federal Environmental
Laws; provided that in the event any applicable federal Environmental Law is
amended so as to broaden the meaning of any term defined thereby, such broader
meaning shall apply subsequent to the effective date of such amendment and,
provided further, to the extent that the Environmental Laws of any State or
other Tribunal establish a meaning for "hazardous substance," "hazardous waste,"
"hazardous material," "solid waste" or "toxic substance" which is broader than
that specified in any applicable Federal law, such broader meaning shall apply.
"Prudential" shall mean The Prudential Insurance Company of
America.
"Prudential Affiliate" shall mean any corporation or
other entity all of the Voting Stock (or equivalent voting securities or
interests) of which is owned by Prudential either directly or through Prudential
Affiliates and any investment fund over which Prudential (or a subsidiary of
Prudential) has investment authority.
"Purchasers" shall mean, with respect to any Accepted
Notes, the Persons, either Prudential or a Prudential Affiliate, who is
purchasing such Accepted Notes.
"RCRA" shall mean the federal Resource Conservation and
Recovery Act, 42 U.S.C. (S) 690, et seq.
"Redetermination Date" shall the meaning specified in
paragraph 5V.
"Reference Quarter" shall have the meaning specified in
paragraph 5Q.
"Request for Purchase" shall have the meaning specified in
paragraph 2D.
"Required Holder(s)" shall mean, with respect to the Notes
of any Series, at any time, the holder or holders of at least 66 2/3% of the
aggregate principal amount of the Notes of such Series outstanding at such time.
"Rescheduled Closing Day" shall have the meaning specified
in paragraph 2H.
"Responsible Officer" shall mean the chief executive
officer, chief operating officer, chief financial officer or chief accounting
officer of the Company or any other officer of the Company involved principally
in its financial administration or its controllership function.
"S&P" shall mean Standard & Poor's, a division of The
McGraw-Hill Companies, Inc.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Security Agreements" shall mean, collectively, the
Security Agreement, dated as of January 13, 2000, among the Company, the
Subsidiaries of the Company from time to time party thereto, BankBoston, N.A.,
as Collateral Agent for itself and the other Secured Lenders thereunder,
BankBoston, N.A., as agent under the Bank Agreement, BankBoston, N.A., for
itself, and the other Secured Lenders from time to time party thereto, and all
Security Agreements hereafter executed by any Subsidiary of the Company as
contemplated under paragraph 5R, as each may be amended, supplemented or
otherwise modified from time to time.
"Security Documents" shall mean collectively the Pledge
Agreements, the Security Agreements and any mortgage, deed of trust,
Intellectual Property security instrument, joinder agreement or other collateral
or security documents (including, without limitation, all financing statements,
assignments, pledges, and lien entry forms), notices, documents and other
writings executed and delivered from time to time in favor of the Collateral
53
Agent for the benefit of the holders of the Notes in order to secure the
obligations of the Company and its Subsidiaries under and in respect of the Loan
Documents, and any and all amendments, supplements and other modifications
thereto.
"Series" shall mean Notes which have (i) the same final
maturity, (ii) the same installment payment dates, (iii) the same installment
payment amounts (as a percentage of the original principal amount of each
Existing Note or Shelf Note), (iv) the same interest rate, (v) the same interest
payment periods, and (vi) the same original date of issuance.
"Series A Convertible Preferred Stock" shall mean the Series
A Convertible Preferred Stock, par value $.01, issued by the Company on or after
March 25, 1999 in the aggregate initial amount of up to 200,000 shares having an
initial liquidation value of $1,000 per share and any additional shares of such
series of convertible preferred stock issued as or in lieu of dividends
thereon."
"Series A Notes" shall mean 7.85% Senior Notes, Series
A, of the Company due April 17, 2003 in the original principal amount of
$50,000,000.
"Series B Notes" shall mean the 7.22% Senior Notes,
Series B, of the Company due October 17, 2004 in the original principal amount
of $25,000,000.
"Shelf Notes" shall have the meaning specified in paragraph
1B.
"Significant Holder" shall mean (i) Prudential, so long as
Prudential or any Prudential Affiliate shall hold (or be committed under this
Agreement to purchase) any Note, or (ii) any other holder of at least 5% of the
aggregate principal amount of the Notes from time to time outstanding.
"Subject Property" shall have the meaning specified in
paragraph 5T.
"Subordinated Debentures" shall have the meaning specified
in paragraph 6C(2)(x).
"Subordinated Debentures Agreement" has the meaning
specified in paragraph 8T.
"Subordinated Debentures Guarantee" has the meaning
specified in paragraph 6C(3)(v).
"Subsidiary" shall mean any Person of which the Company (or
other specified Person) shall at the time, directly or indirectly through one or
more of its Subsidiaries, (a) own more than 50% of the outstanding capital stock
(or other shares of beneficial interest) entitled to vote generally or (b) hold
more than 50% of the partnership, joint venture or similar interests.
"Transferee" shall mean any direct or indirect transferee
of all or any part of any Note purchased by any Purchaser under this Agreement.
"Tribunal" means any municipal, state, commonwealth,
federal, foreign, territorial or other sovereign, governmental entity,
governmental department, court, commission, board, bureau, agency or
instrumentality.
"U.S. Fund" shall mean U.S. Private Placement Fund.
"Wholly Owned Subsidiary" shall mean any Subsidiary of
which all of the outstanding capital stock (or other shares of beneficial
interest) entitled to vote generally (other than directors' qualifying shares)
is owned by the Company (or other specified Person) directly, or indirectly
through one or more Wholly Owned Subsidiaries.
54
10C. Accounting Principles, Terms and Determinations. All
references in this Agreement to "generally accepted accounting principles" or
"GAAP" shall be deemed to refer to generally accepted accounting principles in
effect in the United States at the time of application thereof. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all unaudited financial statements and certificates and reports as to financial
matters required to be furnished hereunder shall be prepared, in accordance with
generally accepted accounting principles applied on a basis consistent with the
most recent audited consolidated financial statements of the Company and its
Subsidiaries delivered pursuant to paragraph 5A or, if no such statements have
been so delivered, the most recent audited financial statements referred to in
clause (i) of paragraph 8B.
11. GUARANTEES.
11A. Guarantees of Obligations. Each Guarantor irrevocably
and unconditionally, jointly and severally, guarantees that the Obligations will
be performed and will be paid in full in cash when due and payable, whether at
the stated or accelerated maturity thereof or otherwise, this guarantee being a
guarantee of payment and not of collectability and being absolute and in no way
conditional or contingent. In the event any part of the Obligations shall not
have been so paid in full when due and payable, each Guarantor will, immediately
upon notice by any holder or, without notice, immediately upon the occurrence of
a Bankruptcy Default, pay or cause to be paid to the holders in accordance with
the holders respective Percentage Interests the amount of such Obligations
which are then due and payable and unpaid. The obligations of each Guarantor
hereunder shall not be affected by the invalidity, unenforceability or
irrecoverability of any of the Obligations as against any other Obligor, any
other guarantor thereof or any other Person. For purposes hereof, the
Obligations shall be due and payable when and as the same shall be due and
payable under the terms of this Agreement, the Notes or any other Loan Document
notwithstanding the fact that the collection or enforcement thereof may be
stayed or enjoined under any Bankruptcy Law or other applicable law.
11B. Continuing Obligation. Each Guarantor acknowledges that
Prudential and the other Purchasers have entered into this Agreement (and, to
the extent that the Purchasers or the holders may enter into any future Loan
Document, will have entered into such agreement) in reliance on the Guarantee in
this paragraph 11 being a continuing irrevocable agreement, and such Guarantor
agrees that its guarantee may not be revoked in whole or in part. The
obligations of the Guarantors hereunder shall terminate when the Facility shall
have terminated and all of the Obligations have been indefeasibly paid in full
in cash and discharged; provided, however, that
(a) if a claim is made upon the holders at any time for
repayment or recovery of any amounts or any property received by the holders
from any source on account of any of the Obligations and the holders repay or
return any amounts or property so received (including interest thereon to the
extent required to be paid by the holders) or
(b) if the holders become liable for any part of such
claim by reason of (i) any judgment or order of any court or administrative
authority having competent jurisdiction, or (ii) any settlement or compromise of
any such claim of which the Company has notice and an opportunity to comment,
then the Guarantors shall remain liable under this Agreement for the amounts so
repaid or property so returned or the amounts for which the holders become
liable (such amounts being deemed part of the Obligations) to the same extent as
if such amounts or property had never been received by the holders,
notwithstanding any termination hereof or the cancellation of any instrument or
agreement evidencing any of the Obligations. Not later than five days after
receipt of notice from the Majority Holders, the Guarantors shall jointly and
severally pay to the holders an amount equal to the amount of such repayment or
return for which such holders have so become liable. Payments hereunder by a
Guarantor may be required by the holders on any number of occasions.
11C. Waivers with Respect to Obligations. Except to the
extent expressly required by this Agreement or any other Loan Document, each
55
Guarantor waives all of the following (including all defenses, counterclaims and
other rights of any nature based upon any of the following):
(i) presentment, demand for payment and protest of
nonpayment of any of the Obligations, and notice of protest, dishonor or
nonperformance;
(ii) notice of acceptance of this guarantee and notice
that credit has been extended in reliance on the Guarantor's guarantee of the
Obligations;
(iii) notice of any Default or of any inability to enforce
performance of the obligations of the Company or any other Person with respect
to any Loan Document, or notice of any acceleration of maturity of any
Obligations;
(iv) demand for performance or observance of, and any
enforcement of any provision of, the Obligations, this Agreement or any other
Loan Document or any pursuit or exhaustion of rights or remedies with respect to
any Loan Security or against the Company or any other Person in respect of the
Obligations or any requirement of diligence or promptness on the part of the
holders in connection with any of the foregoing;
(v) any act or omission on the part of the holders which
may impair or prejudice the rights of the Guarantor, including rights to obtain
subrogation, exoneration, contribution, indemnification or any other
reimbursement from the Company or any other Person, or otherwise operate as a
deemed release or discharge;
(vi) failure or delay to perfect or continue the perfection
of any security interest in any Loan Security or any other action which harms or
impairs the value of, or any failure to preserve or protect the value of, any
Loan Security;
(vii) any statute of limitations or any statute or rule of
law which provides that the obligation of a surety must be neither larger in
amount nor in other respects more burdensome than the obligation of the
principal;
(viii) any "single action" or "anti-deficiency" law which
would otherwise prevent the holders from bringing any action, including any
claim for a deficiency, against the Guarantor before or after the holders
commencement or completion of any foreclosure action, whether judicially, by
exercise of power of sale or otherwise, or any other law which would otherwise
require any election of remedies by any holder;
(ix) all demands and notices of every kind with respect to
the foregoing; and
(x) to the extent not referred to above, all defenses
(other than payment) which the Company may now or hereafter have to the payment
of the Obligations, together with all suretyship defenses, which could otherwise
be asserted by such Guarantor.
Each Guarantor represents that it has obtained the advice
of counsel as to the extent to which suretyship and other defenses may be
available to it with respect to its obligations hereunder in the absence of the
waivers contained in this paragraph 11C.
No delay or omission on the part of any holder in
exercising any right under this Agreement or any other Loan Document or under
any guarantee of the Obligations or with respect to the Loan Security shall
operate as a waiver or relinquishment of such right. No action which any holder
or the Company may take or refrain from taking with respect to the Obligations,
including any amendments thereto or modifications thereof or waivers with
respect thereto, shall affect the provisions of this Agreement or the
obligations of any Guarantor hereunder. None of the holders rights shall at any
56
time in any way be prejudiced or impaired by any act or failure to act on the
part of any Obligor, or by any noncompliance by the Company with the terms,
provisions and covenants of this Agreement, regardless of any knowledge thereof
which any holder may have or otherwise be charged with.
11D. Holders' Power to Waive, etc. Each Guarantor grants to
the holders full power in their discretion, without notice to or consent of such
Guarantor, such notice and consent being expressly waived, and without in any
way affecting the liability of the Guarantor under its guarantee hereunder:
(a) To waive compliance with, and any Default or Event of
Default under, and to consent to any amendment to or modification or termination
of any terms or provisions of, or to give any waiver in respect of, this
Agreement, any other Loan Document, the Loan Security, the Obligations or any
guarantee thereof (each as from time to time in effect);
(b) To grant any extensions of the Obligations (for any
duration), and any other indulgence with respect thereto, and to effect any
total or partial release (by operation of law or otherwise), discharge,
compromise or settlement with respect to the obligations of the Obligors or any
other Person in respect of the Obligations, whether or not rights against the
Guarantor under this Agreement are reserved in connection therewith;
(c) To take security in any form for the Obligations,
and to consent to the addition to or the substitution, exchange, release or
other disposition of, or to deal in any other manner with, any part of any
property contained in the Loan Security whether or not the property, if any,
received upon the exercise of such power shall be of a character or value the
same as or different from the character or value of any property disposed of,
and to obtain, modify or release any present or future guarantees of the
Obligations and to proceed against any of the Loan Security or such guarantees
in any order;
(d) To collect or liquidate or realize upon any of the
Obligations or the Loan Security in any manner or to refrain from collecting or
liquidating or realizing upon any of the Obligations or the Loan Security; and
(e) To extend credit under this Agreement, any other
Loan Document or otherwise in such amount as the holders or Prudential may
determine, including increasing the amount of credit and the interest rate and
fees with respect thereto, even though the condition of the Obligors (financial
or otherwise on an individual or Consolidated basis) may have deteriorated since
the date hereof.
11E. Information Regarding the Company, etc. Each Guarantor has
made such investigation as it deems desirable of the risks undertaken by it in
entering into this Agreement and is fully satisfied that it understands all such
risks. Each Guarantor waives any obligation which may now or hereafter exist on
the part of Prudential or the holders to inform it of the risks being undertaken
by entering into this Agreement or of any changes in such risks and, from and
after the date hereof, each Guarantor undertakes to keep itself informed of such
risks and any changes therein. Each Guarantor expressly waives any duty which
may now or hereafter exist on the part of Prudential or the holders to disclose
to the Guarantor any matter related to the business, operations, character,
collateral, credit, condition (financial or otherwise), income or prospects of
the Company or its Affiliates or their properties or management, whether now or
hereafter known by the Prudential or the holders. Each Guarantor represents,
warrants and agrees that it assumes sole responsibility for obtaining from the
Company all information concerning this Agreement and all other Loan Documents
and all other information as to the Company and its Affiliates or their
properties or management as such Guarantor deems necessary or desirable.
11F. Certain Guarantor Representations. Each Guarantor
represents that:
(a) it is in its best interest and in pursuit of the
purposes for which it was organized as an integral part of the business
conducted and proposed to be conducted by the Company and its Subsidiaries, and
57
reasonably necessary and convenient in connection with the conduct of the
business conducted and proposed to be conducted by them, to induce the
Prudential and the other Purchasers to enter into this Agreement and to extend
credit to the Company by making the Guarantees contemplated by this paragraph
11,
(b) the credit available hereunder will directly or
indirectly inure to its benefit,
(c) by virtue of the foregoing it is receiving at least
reasonably equivalent value from the holders for its Guarantee,
(d) it will not be rendered insolvent as a result of
entering into this Agreement,
(e) after giving effect to the transactions contemplated
by this Agreement, it will have assets having a fair saleable value in excess of
the amount required to pay its probable liability on its existing debts as they
become absolute and matured,
(f) it has, and will have, access to adequate capital for
the conduct of its business,
(g) it has the ability to pay its debts from time to time
incurred in connection therewith as such debts mature, and
(h) it has been advised by Prudential that the other
Purchasers are unwilling to enter into this Agreement unless the Guarantees
contemplated by this paragraph 11 are given by it.
11G. Subrogation. Each Guarantor agrees that, until
the Obligations are paid in full, it will not exercise any right of
reimbursement, subrogation, contribution, offset or other claims against the
other Obligors arising by contract or operation of law in connection with any
payment made or required to be made by such Guarantor under this Agreement.
After the payment in full of the Obligations, each Guarantor shall be entitled
to exercise against the Company and the other Obligors all such rights of
reimbursement, subrogation, contribution and offset, and all such other claims,
to the fullest extent permitted by law.
11H. Subordination. Each Guarantor covenants and
agrees that, after the occurrence of an Event of Default, all Indebtedness,
claims and liabilities then or thereafter owing by the Company or any other
Obligor to such Guarantor whether arising hereunder or otherwise are
subordinated to the prior payment in full of the Obligations and are so
subordinated as a claim against such Obligor or any of its assets, whether such
claim be in the ordinary course of business or in the event of voluntary or
involuntary liquidation, dissolution, insolvency or bankruptcy, so that no
payment with respect to any such Indebtedness, claim or liability will be made
or received while any Event of Default exists.
11I. Future Subsidiaries; Further Assurances. The
Company will from time to time cause (a) any present Wholly Owned Subsidiary
that is not a Guarantor within 30 days after notice from the Majority Holders or
(b) any future Wholly Owned Subsidiary within 30 days after any such Person
becomes a Wholly Owned Subsidiary, to join this Agreement as a Guarantor
pursuant to a joinder agreement in form and substance satisfactory to the
Majority Holders. Each Guarantor will, promptly upon the request of the Majority
Holders from time to time, execute, acknowledge and deliver, and file and
record, all such instruments, and take all such action, as the Majority Holders
deem necessary or advisable to carry out the intent and purposes of this
paragraph 11.
12. MISCELLANEOUS.
12A. Note Payments. The Company agrees that, so long as any
Purchaser shall hold any Note, it will make payments of principal of, interest
on, and any credit fees and Yield-Maintenance Amount payable with respect to,
such Note, which comply with the terms of this Agreement, by wire transfer of
immediately available funds for credit (not later than 12:00 noon, New York City
58
local time, on the date due) to the account or accounts of such Purchaser, if
any, as are specified in the Information Schedule, attached hereto, or, in the
case of any Purchaser not named in the Information Schedule or any Purchaser
wishing to change the account specified for it in the Information Schedule, such
account or accounts in the United States as such Purchaser may from time to time
designate in writing, notwithstanding any contrary provision herein or in any
Note with respect to the place of payment. Each Purchaser agrees that, before
disposing of any Note, it will make a notation thereon (or on a schedule
attached thereto) of all principal payments previously made thereon and of the
date to which interest thereon has been paid. The Company agrees to afford the
benefits of this paragraph 12A to any Transferee which shall have made the same
agreement as the Purchasers have made in this paragraph 12A.
12B. Expenses. The Company agrees, whether or not the
transactions contemplated hereby shall be consummated, to pay, and save
Prudential, each Purchaser, the Collateral Agent and any Transferee harmless
against liability for the payment of, all out-of-pocket expenses arising in
connection with such transactions, including (i) all document production and
duplication charges and the fees and expenses of any special counsel, local or
other counsel or agents engaged by the Purchasers, the Collateral Agent or any
Transferee in connection with this Agreement, the other Loan Documents, the
transactions contemplated hereby and thereby and any subsequent proposed
modification of, or proposed consent under, this Agreement and the other Loan
Documents, whether or not such proposed modification shall be effected or
proposed consent granted, (ii) the costs and expenses, including attorneys'
fees, incurred by the any Purchaser, the Collateral Agent or any Transferee in
enforcing (or determining whether or how to enforce) any rights under this
Agreement or the Notes or the other Loan Documents or in responding to any
subpoena or other legal process or informal investigative demand issued in
connection with this Agreement, the other Loan Documents, or the transactions
contemplated hereby and thereby or by reason of any Purchaser's or any
Transferee's having acquired any Note, including without limitation costs and
expenses incurred in any bankruptcy case and (iii) the costs and expenses,
including attorneys fees, incurred by the Collateral Agent in enforcing (or
determining whether or how to enforce) any rights under the Pledge Agreements,
the Security Agreements, any other Security Document or the Intercreditor
Agreement. The obligations of the Company under this paragraph 12B shall survive
the transfer of any Note or portion thereof or interest therein by any Purchaser
or any Transferee and the payment of any Note.
12C. Consent to Amendments. This Agreement may be
amended, and the Company may take any action herein prohibited, or omit to
perform any act herein required to be performed by it, if the Company shall
obtain the written consent to such amendment, action or omission to act, of the
Majority Holders except that, (i) with the written consent of the holders of all
Notes of a particular Series, and if an Event of Default shall have occurred and
be continuing, of the holders of all Notes of all Series, at the time
outstanding (and not without such written consents), the Notes of such Series
may be amended or the provisions thereof waived to change the maturity thereof,
to change or affect the principal thereof, or to change or affect the rate or
time of payment of interest on or any credit fees or Yield-Maintenance Amount
payable with respect to the Notes of such Series, (ii) without the written
consent of the holder or holders of all Notes at the time outstanding, no
amendment to or waiver of the provisions of this Agreement shall change or
affect the provisions of paragraph 7A or this paragraph 12C insofar as such
provisions relate to proportions of the principal amount of the Notes of any
Series, or the rights of any individual holder of Notes, required with respect
to any declaration of Notes to be due and payable or with respect to any
consent, amendment, waiver or declaration, (iii) with the written consent of
Prudential (and not without the written consent of Prudential) the provisions of
paragraph 2 may be amended or waived (except insofar as any such amendment or
waiver would affect any rights or obligations with respect to the purchase and
sale of Notes which shall have become Accepted Notes prior to such amendment or
waiver), and (iv) with the written consent of all of the Purchasers which shall
have become obligated to purchase Accepted Notes of any Series (and not without
the written consent of all such Purchasers), any of the provisions of paragraphs
2 and 3 may be amended or waived insofar as such amendment or waiver would
affect only rights or obligations with respect to the purchase and sale of the
Accepted Notes of such Series or the terms and provisions of such Accepted
Notes. Each holder of any Note at the time or thereafter outstanding shall be
bound by any consent authorized by this paragraph 12C, whether or not such Note
shall have been marked to indicate such consent, but any Notes issued thereafter
may bear a notation referring to any such consent. No course of dealing between
the Company and the holder of any Note nor any delay in exercising any rights
59
hereunder or under any Note shall operate as a waiver of any rights of any
holder of such Note. As used herein and in the Notes, the term "this Agreement"
and references thereto shall mean this Agreement as it may from time to time be
amended or supplemented.
12D. Form, Registration, Transfer and Exchange of Notes;
Lost Notes. The Notes are issuable as registered notes without coupons in
denominations of at least $100,000, except as may be necessary to reflect any
principal amount not evenly divisible by $100,000. The Company shall keep at its
principal office a register in which the Company shall provide for the
registration of Notes and of transfers of Notes. Upon surrender for registration
of transfer of any Note at the principal office of the Company, the Company
shall, at its expense, execute and deliver one or more new Notes of like tenor
and of a like aggregate principal amount, registered in the name of such
transferee or transferees. At the option of the holder of any Note, such Note
may be exchanged for other Notes of like tenor and of any authorized
denominations, of a like aggregate principal amount, upon surrender of the Note
to be exchanged at the principal office of the Company. Whenever any Notes are
so surrendered for exchange, the Company shall, at its expense, execute and
deliver the Notes which the holder making the exchange is entitled to receive.
Each installment of principal payable on each installment date upon each new
Note issued upon any such transfer or exchange shall be in the same proportion
to the unpaid principal amount of such new Note as the installment of principal
payable on such date on the Note surrendered for registration of transfer or
exchange bore to the unpaid principal amount of such Note. No reference need be
made in any such new Note to any installment or installments of principal
previously due and paid upon the Note surrendered for registration of transfer
or exchange. Every Note surrendered for registration of transfer or exchange
shall be duly endorsed, or be accompanied by a written instrument of transfer
duly executed, by the holder of such Note or such holder's attorney duly
authorized in writing. Any Note or Notes issued in exchange for any Note or upon
transfer thereof shall carry the rights to unpaid interest and credit fees and
interest and credit fees to accrue which were carried by the Note so exchanged
or transferred, so that neither gain nor loss of interest or credit fees shall
result from any such transfer or exchange. Upon receipt of written notice from
the holder of any Note of the loss, theft, destruction or mutilation of such
Note and, in the case of any such loss, theft or destruction, upon receipt of
such holder's unsecured indemnity agreement, or in the case of any such
mutilation upon surrender and cancellation of such Note, the Company will make
and deliver a new Note, of like tenor, in lieu of the lost, stolen, destroyed or
mutilated Note.
12E. Persons Deemed Owners; Participations. Prior to due
presentment for registration of transfer, the Company may treat the Person in
whose name any Note is registered as the owner and holder of such Note for the
purpose of receiving payment of principal of and interest on, and any credit
fees and Yield-Maintenance Amount payable with respect to, such Note and for all
other purposes whatsoever, whether or not such Note shall be overdue, and the
Company shall not be affected by notice to the contrary. Subject to the
preceding sentence, the holder of any Note may from time to time grant
participations in all or any part of such Note to any Person on such terms and
conditions as may be determined by such holder in its sole and absolute
discretion.
12F. Survival of Representations and Warranties; Entire
Agreement; Time of the Essence. All representations and warranties contained
herein or in any of the other Loan Documents or made in writing by or on behalf
of the Company in connection herewith or therewith shall survive the execution
and delivery of this Agreement and the Notes, the transfer by any Purchaser of
any Note or portion thereof or interest therein and the payment of any Note, and
may be relied upon by any Transferee, regardless of any investigation made at
any time by or on behalf of any Purchaser or any Transferee. Subject to the
preceding sentence, this Agreement, the other Loan Documents and the Notes
embody the entire agreement and understanding between the parties hereto with
respect to the subject matter hereof and supersede all prior agreements and
understandings relating to such subject matter. Time is (and shall be) of the
essence in this Agreement and the other Loan Documents.
12G. Successors and Assigns. All covenants and other agreements
in this Agreement contained by or on behalf of any of the parties hereto shall
bind and inure to the benefit of the respective successors and assigns of the
parties hereto (including, without limitation, any Transferee) whether so
expressed or not.
12H. Notices. All written communications provided for
hereunder or under any other Loan Document (other than communications provided
60
for under paragraph 2) shall be sent by first class mail or nationwide overnight
delivery service (with charges prepaid) and (i) if to any Person listed in the
Information Schedule attached hereto, addressed to it at the address specified
for such communications in such Information Schedule, or at such other address
as it shall have specified in writing to the Person sending such communication,
and (ii) if to any Purchaser or holder of any Note which is not a Person listed
in such Information Schedule, addressed to it at such address as it shall have
specified in writing to the Person sending such communication or, if any such
holder shall not have so specified an address, then addressed to such holder in
care of the last holder of such Note which shall have so specified an address to
the Person sending such communication, provided, however, that any such
communication to the Company may also, at the option of the Person sending such
communication, be delivered by any other means either to the Company at its
address specified in the Information Schedule or to any Authorized Officer of
the Company. Any communication pursuant to paragraph 2 shall be made by the
method specified for such communication in paragraph 2, and shall be effective
to create any rights or obligations under this Agreement only if, in the case of
a telephone communication, an Authorized Officer of the party conveying the
information and of the party receiving the information are parties to the
telephone call, and in the case of a telecopier communication, the communication
is signed by an Authorized Officer of the party conveying the information,
addressed to the attention of an Authorized Officer of the party receiving the
information, and in fact received at the telecopier terminal the number of which
is listed for the party receiving the communication in the Information Schedule
or at such other telecopier terminal as the party receiving the information
shall have specified in writing to the party sending such information.
12I. Payments Due on Non-Business Days. Anything in
this Agreement or the Notes to the contrary notwithstanding, any payment of
principal of or interest on, or credit fees or Yield-Maintenance Amount payable
with respect to, any Note that is due on a date other than a Business day shall
be made on the next succeeding Business Day without including the additional
days elapsed in the computation of the interest payable on such next succeeding
Business Day.
12J. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
12K. Descriptive Headings. The descriptive headings of the
several paragraphs of this Agreement are inserted for convenience only and do
not constitute a part of this Agreement.
12L. Satisfaction Requirement. If any agreement, certificate
or other writing, or any action taken or to be taken, is by the terms of this
Agreement required to be satisfactory to any Purchaser, to any holder of Notes
or to the Majority Holder(s), the determination of such satisfaction shall be
made by such Purchaser, such holder or the Majority Holder(s), as the case may
be, in the sole and exclusive judgment (exercised in good faith) of the Person
or Persons making such determination.
12M. Maximum Interest Payable. The Company, each other
Obligor, the Purchasers and any other holders of the Notes specifically intend
and agree to limit contractually the amount of interest payable under this
Agreement, the Notes, the other Loan Documents and all other instruments and
agreements related hereto and thereto to the maximum amount of interest lawfully
permitted to be charged under applicable law. Therefore, none of the terms of
this Agreement, the Notes, the other Loan Documents or any instrument pertaining
to or relating to this Agreement, the Notes or any other Loan Document shall
ever be construed to create a contract to pay interest at a rate in excess of
the maximum rate permitted to be charged under applicable law, and neither the
Company, each other Obligor, any other guarantor nor any other party liable or
to become liable hereunder, under the Notes, any guaranty or under any other
instruments and agreements related hereto and thereto shall ever be liable for
interest in excess of the amount determined at such maximum rate, and the
provisions of this paragraph 12M shall control over all other provisions of this
Agreement, any Notes, the other Loan Documents, any guaranty or any other
instrument pertaining to or relating to the transactions herein contemplated. If
any amount of interest taken or received by any Purchaser or any holder of a
61
Note shall be in excess of said maximum amount of interest which, under
applicable law, could lawfully have been collected by any Purchaser or such
holder incident to such transactions, then such excess shall be deemed to have
been the result of a mathematical error by all parties hereto and shall be
refunded promptly by the Person receiving such amount to the party paying such
amount, or, at the option of the recipient, credited ratably against the unpaid
principal amount of the Note or Notes held by such holder. All amounts paid or
agreed to be paid in connection with such transactions which would under
applicable law be deemed "interest" shall, to the extent permitted by such
applicable law, be amortized, prorated, allocated and spread throughout the
stated term of this Agreement and the Notes. "Applicable law" as used in this
paragraph means that law in effect from time to time applicable to the
transactions contemplated by this Agreement and the other Loan Documents which
permits the charging and collection of the highest permissible lawful,
nonusurious rate of interest on the transactions herein contemplated including
laws of the United States of America, and "maximum rate" as used in this
paragraph means, with respect to each of the Notes, the maximum lawful,
nonusurious rates of interest (if any) which under applicable law may be charged
to the Company from time to time with respect to such Notes.
12N. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY,
THE LAW OF THE STATE OF NEW YORK.
12O. WAIVER OF JURY TRIAL; SUBMISSION TO JURISDICTION; CERTAIN
OTHER WAIVERS.
(i) THE COMPANY, EACH OTHER OBLIGOR AND EACH HOLDER HEREBY
KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY
HAVE TO A TRIAL BY JURY IN ANY LITIGATION OF ANY CLAIM WHICH IS BASED
HEREON, OR ARISES OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT,
THE NOTES OR ANY OTHER LOAN DOCUMENT, OR ANY TRANSACTIONS RELATING
HERETO OR THERETO, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF THE COMPANY, ANY
OTHER OBLIGOR, THE COLLATERAL AGENT OR THE HOLDERS. THE COMPANY AND
EACH OTHER OBLIGOR ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PURCHASERS TO ENTER INTO THIS AGREEMENT.
(ii) EACH OBLIGOR HEREBY IRREVOCABLY SUBMITS ITSELF TO THE
JURISDICTION OF THE SUPREME COURT OF THE STATE OF NEW YORK, NEW YORK
COUNTY, OF THE UNITED STATES OF AMERICA AND TO THE JURISDICTION OF THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK,
FOR THE PURPOSE OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT
OF, OR RELATING TO, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE
SUBJECT MATTER HEREOF, AND HEREBY WAIVES, AND AGREES NOT TO ASSERT, BY
WAY OF MOTION, AS A DEFENSE OR OTHERWISE, IN ANY SUCH SUIT, ACTION OR
PROCEEDINGS, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE
JURISDICTION OF THE ABOVE-NAMED COURTS FOR ANY REASON WHATSOEVER, THAT
SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR
THAT THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH
OBLIGOR HEREBY AGREES THAT PROCESS MAY BE SERVED ON THE SECRETARY OF
STATE OF THE STATE OF NEW YORK. ANY AND ALL SERVICE OF PROCESS AND ANY
OTHER NOTICE IN ANY SUCH ACTION, SUIT OR PROCEEDING SHALL BE EFFECTIVE
AGAINST SUCH PARTIES IF GIVEN BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, OR BY ANY OTHER MEANS OR MAIL WHICH REQUIRES A
SIGNED RECEIPT, POSTAGE PREPAID, MAILED TO SUCH PARTIES HAS HEREIN
PROVIDED IN PARAGRAPH 12H. DURING THE TERM OF THIS AGREEMENT, IN THE
EVENT THE SECRETARY OF STATE OF THE STATE OF NEW YORK SHALL NOT BE
ABLE TO ACCEPT SERVICE OF PROCESS AS AFORESAID AND IF THE OBLIGORS
SHALL NOT MAINTAIN AN OFFICE IN NEW YORK CITY, THE OBLIGORS SHALL,
62
PROMPTLY APPOINT AND MAINTAIN AN AGENT QUALIFIED TO ACT AS AN AGENT
FOR SERVICE OF PROCESS WITH RESPECT TO ALL COURTS IN AND OF NEW YORK
CITY, AND ACCEPTABLE TO THE HOLDERS, AS THE OBLIGOR'S AUTHORIZED AGENT
TO ACCEPT AND ACKNOWLEDGE ON THE OBLIGORS BEHALF SERVICE OF ANY AND
ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH ACTION, SUIT OR
PROCEEDING.
(iii) The Company and each of the Obligors hereby waive to the extent
not prohibited by applicable law that cannot be waived any right it
may have to claim or recover in any such proceeding any special,
exemplary, punitive or consequential damages.
EACH OBLIGOR HEREBY AGREES THAT THE SUBMISSION TO JURISDICTION
REFERRED TO IN THIS PARAGRAPH 12O SHALL NOT LIMIT IN ANY MANNER THE
RIGHTS OF ANY OF THE HOLDERS TO TAKE PROCEEDINGS AGAINST SUCH OBLIGOR
IN SOME OTHER COURT OF COMPETENT JURISDICTION WHETHER WITHIN OR
OUTSIDE THE UNITED STATES.
12P. Counterparts. This Agreement may be executed in any number
of counterparts (including those transmitted by facsimile), each of which shall
be an original, but all of which together shall constitute one instrument.
Delivery of this Agreement may be made by facsimile transmission of a duly
executed counterpart copy hereof.
12Q. Binding Agreement. This Agreement shall also inure to
the benefit of each Purchaser which shall have executed and delivered a
Confirmation of Acceptance, and each such Purchaser shall be bound by this
Agreement to the extent provided in such Confirmation of Acceptance.
12R. Effective Date. This Agreement shall become effective
on the date hereof (the "Effective Date"), subject in all cases to the following
having been received by and being satisfactory to the Purchasers:
(i) Duly executed counterparts of this Agreement.
(ii) Certified copies of the resolutions of the Board of
Directors of the Company and each other Obligor approving this Agreement and the
other Loan Documents to which it is a party, and of all documents evidencing
other necessary corporate action and governmental approvals, if any, with
respect to this Agreement and the Accepted Notes.
(iii) A certificate of the Secretary or an Assistant
Secretary of the Company and each other Obligor certifying the names and true
signatures of the officers of the Company authorized to sign this Agreement, the
Accepted Notes, the other Loan Documents to which it is a party and any other
documents to be delivered hereunder to which it is a party.
(iv) Certified copies of the Certificate of Incorporation
and By-laws of the Company and each other Obligor; or a certificate of the
Secretary or an Assistant Secretary of the Company or such other Obligor stating
that the Certificate of Incorporation and By-laws of the Company or such other
Obligor have not changed since April 17, 1997.
(v) Favorable opinions of the following counsel satisfactory
in form and substance to such Purchaser: (a) Erik B. Carlson, general counsel of
the Company and its Subsidiaries and (b) Jennifer B. May, associate counsel of
certain Subsidiaries of the Company. The Company hereby directs each such
counsel to deliver such opinion and agrees that each Purchaser receiving such an
opinion will and is hereby authorized to rely on such opinion.
63
(vi) A good standing certificate for the Company and the
other Obligors from the Secretary of State of Delaware dated of a recent date
and such other evidence of the status of the Company as you may reasonably
request.
(vii) Each Obligor shall have duly authorized, executed,
acknowledged, delivered, filed, registered and recorded the Security Documents
to which it is a party and such other security agreements, notices, financing
statements and other instruments as Prudential may have requested in order to
perfect the Liens purported or required pursuant to the Loan Documents to be
created in the Loan Security.
(viii) The Company shall have paid to Prudential (i) for the
account of the Purchasers, all fees required to be paid pursuant to that ceratin
letter agreement, dated February 10, 2000, among the Company, Prudential and
U.S. Fund, and (ii) without limiting the provisions of paragraph 12B, the fees
and disbursements of the Purchasers special counsel and other costs and
expenses of the Purchasers for which statements have been rendered on or prior
to the Effective Date.
(ix) The representations and warranties contained in
paragraph 8 shall be true on and as of the Effective Date, except to the extent
of changes caused by the transactions herein contemplated; there shall exist on
the Effective Date no Event of Default or Default; and the Company shall have
delivered to such Purchaser an Officer's Certificate, dated the Effective Date,
to both such effects.
(x) The Bank Agent and each lender under the Bank Agreement
shall have consented, to the extent required under the Bank Agreement and the
Intercreditor Agreement, to the modifications of the Existing Master Shelf
Agreement effected hereby, the terms and conditions of such consent to be
satisfactory to the Required Holder(s), and shall have acknowledged that the
Intercreditor Agreement remains in full force and effect; and the covenants of
the Company set forth in the Bank Agreement shall have been amended to reflect
the covenant modifications of the Existing Master Shelf Agreement made herein.
(xi) Computations by the Company in form set forth in
Schedule 5A(i) hereto demonstrating compliance with the Computation Covenants,
using the Consolidated financial statements of the Company and its Subsidiaries
as of December 31, 1999 and giving pro forma effect to the sale of Bear Paw
Energy Inc. and the prepayment of the Series A Notes and the term loan under the
Bank Agreement on January 20, 2000, certified by a Financial Officer.
(xii) A Borrowing Base Certificate, signed by a Financial
Officer, containing a calculation of the Borrowing Base as of February 4, 2000.
(xiii) Additional documents or certificates with respect
to legal matters or corporate or other proceedings related to the transactions
contemplated hereby as may be reasonably requested by such Purchaser.
12S. References to Existing Master Shelf Agreement. Upon and
after the Effective Date, each reference to the Master Shelf Agreement, the
Agreement or other terms of like import referring to the Existing Master Shelf
Agreement in the Notes, the Pledge Agreement, and each other Loan Document shall
mean and be a reference to this Agreement.
12T. Waiver. Upon the effectiveness of this Agreement, any
Event of Default under paragraphs 6A(1), 6A(4) or 6A(5) of the Existing Master
Shelf Agreement existing on December 31, 1999 or for the period ending December
31, 1999 is hereby waived, provided, however, that such waivers shall not apply
for the purposes of paragraph 5Q .
[Remainder of page intentionally left blank; signature page follows]
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IN WITNESS HEREOF, the parties hereto have caused their duly authorized
officers to execute this Agreement as of the date first above written.
TRANSMONTAIGNE INC.
By: /s/ Donald H. Anderson
Donald H. Anderson, President
Guarantors
TRANSMONTAIGNE PRODUCT
SERVICES MIDWEST INC.(formerly TransMontaigne
Product Services Inc.)
TRANSMONTAIGNE PIPELINE INC.
TRANSMONTAIGNE TERMINALING INC.
TRANSMONTAIGNE TRANSPORTATION
SERVICES INC.
TRANSMONTAIGNE PRODUCT
SERVICES INC.
By: /s/ Donald H. Anderson
Donald H. Anderson,
Chief Executive Officer of each of the
foregoing corporations
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By: /s/ Ric E. Abel
Vice President
U.S. PRIVATE PLACEMENT FUND
By: Prudential Private Placement
Investors, L.P., Investment Advisor
By: Prudential Private Placement
Investors, Inc., its General Partner
By: /s/ Ric E. Abel
Vice President
65