UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the quarterly period ended March 31, 2000
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File Number 001-11763
TRANSMONTAIGNE INC.
Delaware 06-1052062
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2750 Republic Plaza, 370 Seventeenth Street
Denver, Colorado 80202
(Address, including zip code, of principal executive offices)
(303) 626-8200
(Telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such report), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
As of April 30, 2000 there were 30,667,024 shares of the registrant's Common
Stock outstanding.
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<CAPTION>
TRANSMONTAIGNE INC.
INDEX
PART I. FINANCIAL INFORMATION
Page No.
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
<S> <C>
March 31, 2000 (Unaudited) and June 30, 1999...........................................4
Condensed Consolidated Statements of Operations
Three Months and Nine Months Ended March 31, 2000 and 1999 (Unaudited).................5
Condensed Consolidated Statements of Stockholders' Equity
Year Ended June 30, 1999 and
Nine Months Ended March 31, 2000 (Unaudited)...........................................6
Condensed Consolidated Statements of Cash Flows
Nine Months Ended March 31, 2000 and 1999 (Unaudited)..................................7
Notes to Condensed Consolidated Financial Statements...................................9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.........................................19
Item 3. Quantitative and Qualitative Disclosures about Market Risk............................30
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K......................................................31
Signatures............................................................................32
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2
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The condensed consolidated financial statements of TransMontaigne Inc. are
included herein beginning on the following page.
3
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TRANSMONTAIGNE INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
Condensed Consolidated Balance Sheets March 31, 2000 (Unaudited) and June 30,
1999 (In thousands, except share amounts)
Assets
- ------ March 31, June 30,
2000 1999
----------------- -----------------
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 33,315 13,927
Trade accounts receivable 128,354 174,122
Inventories 185,213 378,207
Prepaid expenses 5,361 4,355
----------------- -----------------
352,243 570,611
----------------- -----------------
Property, plant and equipment:
Land 15,003 15,165
Plant and equipment 338,872 458,749
Accumulated depreciation (34,251) (37,572)
----------------- -----------------
319,624 436,342
----------------- -----------------
Investments and other assets:
Investments in petroleum related assets 46,141 46,141
Deferred tax assets, net 24,938 -
Deferred debt issuance costs, net 9,700 11,529
Unrealized gains on energy related contracts - 8,996
Other assets, net 1,764 21,889
----------------- -----------------
82,543 88,555
----------------- -----------------
$ 754,410 1,095,508
================= =================
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable $ 109,948 164,162
Inventory due under exchange agreements 73,478 25,791
Excise taxes payable 28,644 25,681
Other accrued liabilities 3,921 5,371
Current portion of long-term debt 1,992 2,000
----------------- -----------------
217,983 223,005
----------------- -----------------
Long-term debt 205,000 495,672
Deferred tax liabilities, net - 780
Stockholders' equity:
Preferred stock, par value $.01 per share, authorized 2,000,000 shares,
issued and outstanding 170,115 shares Series A Convertible at March
31, 2000 and June 30, 1999, liquidation preference of $170,115,000 170,115 170,115
Common stock, par value $.01 per share,
authorized 80,000,000 shares at March 31, 2000 and June 30,
1999, issued and outstanding 30,667,024 shares at March 31, 2000
and 30,479,024 shares at June 30, 1999 307 305
Capital in excess of par value 198,696 197,122
Unearned compensation (1,245) -
Retained earnings (accumulated deficit) (36,446) 8,509
----------------- -----------------
331,427 376,051
----------------- -----------------
$ 754,410 1,095,508
================= =================
See accompanying notes to condensed consolidated financial statements.
</TABLE>
4
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<TABLE>
<CAPTION>
TRANSMONTAIGNE INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
Three Months and Nine Months Ended March 31, 2000 and 1999 (Unaudited) (In
thousands, except per share amounts)
Three Months Ended Nine Months Ended
March 31, March 31,
------------------------------- -----------------------------
2000 1999 2000 1999
---------------- ------------ ------------- --------------
<S> <C> <C> <C> <C>
Revenues $ 1,209,470 769,369 3,681,502 1,973,790
Costs and expenses:
Product costs 1,175,296 732,320 3,603,635 1,889,610
Operating expenses 11,375 12,403 44,487 31,560
Impairment of long lived assets - - 50,136 -
General and administrative 5,502 5,011 17,202 13,228
Depreciation and amortization 4,730 5,098 17,371 12,019
---------------- ------------ ------------- --------------
1,196,903 754,832 3,732,831 1,946,417
---------------- ------------ ------------- --------------
Operating income (loss) 12,567 14,537 (51,329) 27,373
Other income (expenses):
Dividend income from petroleum related assets 345 560 1,119 899
Interest income 514 144 1,696 903
Gain (loss) on disposition of assets (1,566) - 15,021 -
Interest expense (4,667) (9,463) (23,424) (19,113)
Amortization of deferred debt issuance costs (872) (1,347) (6,663) (2,405)
Other financing costs (224) (443) (714) (875)
---------------- ------------ ------------- --------------
(6,470) (10,549) (12,965) (20,591)
---------------- ------------ ------------- --------------
Earnings (loss) before income taxes 6,097 3,988 (64,294) 6,782
Income tax (expense) benefit (2,442) (1,515) 25,718 (2,577)
---------------- ------------ ------------- --------------
Net earnings (loss) 3,655 2,473 (38,576) 4,205
Preferred stock dividends (2,126) (148) (6,379) (148)
---------------- ------------ ------------- --------------
Net earnings (loss) attributable to
common stockholders $ 1,529 2,325 (44,955) 4,057
================ ============ ============= ==============
Weighted average common shares outstanding:
Basic 30,630 30,471 30,569 28,470
================ ============ ============= ==============
Diluted 30,947 31,189 30,569 29,197
================ ============ ============= ==============
Earnings (loss) per common share:
Basic $ 0.05 0.08 (1.47) 0.14
================ ============ ============= ==============
Diluted $ 0.05 0.07 (1.47) 0.14
================ ============ ============= ==============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
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<TABLE>
<CAPTION>
TRANSMONTAIGNE INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Stockholders' Equity
Year Ended June 30, 1999 and Nine Months Ended March 31, 2000 (Unaudited)
(In thousands)
Retained
Capital in earnings
Preferred Common excess of Unearned (accumulated
stock stock par value compensation deficit) Total
------------ ----------- ------------ --------------- -------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balance at June 30, 1998 $ - 260 136,780 (618) 8,844 145,266
Preferred stock issued in connection
with stock purchase agreements 170,115 - - - - 170,115
Costs related to issuance of preferred
stock - - (327) - - (327)
Common stock issued for options
exercised - - 84 - - 84
Common stock issued for services - - 93 - - 93
Tax benefit arising from options
exercised - - 63 - - 63
Unearned compensation related to
restricted stock awards - - 162 (162) - -
Amortization of unearned compensation - - - 780 - 780
Common stock issued in acquisition of
Louis Dreyfus Energy Corp. - 45 60,390 - - 60,435
Common stock repurchased and retired - - (123) - - (123)
Preferred stock dividends - - - - (2,274) (2,274)
Net earnings - - - - 1,939 1,939
------------ ----------- ------------ --------------- -------------- ----------
Balance at June 30, 1999 170,115 305 197,122 - 8,509 376,051
Common stock issued for options
exercised - - 92 - - 92
Unearned compensation related to
restricted stock awards - 2 1,482 (1,484) - -
Amortization of unearned compensation - - - 239 - 239
Preferred stock dividends - - - - (6,379) (6,379)
Net loss - - - - (38,576) (38,576)
------------ ----------- ------------ --------------- -------------- ----------
Balance at March 31, 2000 $ 170,115 307 198,696 (1,245) (36,446) 331,427
============ =========== ============ =============== ============== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
6
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<TABLE>
<CAPTION>
TRANSMONTAIGNE INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
Nine Months Ended March 31, 2000 and 1999 (Unaudited)
(In thousands)
2000 1999
------------------ ------------------
Cash flows from operating activities:
<S> <C> <C> <C>
Net earnings (loss) $ (38,576) 4,205
Adjustments to reconcile net earnings (loss) to net
cash provided (used) by operating activities:
Depreciation and amortization 17,371 12,019
Deferred tax expense (benefit) (25,718) 2,212
Loss (gain) on disposition of assets (15,024) 14
Impairment of long lived assets 50,136 -
Amortization of unearned compensation 239 780
Amortization of deferred debt issuance costs 6,663 2,405
Changes in operating assets and liabilities,
net of noncash activities:
Trade accounts receivable 46,099 (26,706)
Inventories 201,990 (61,578)
Prepaid expenses (1,007) (1,218)
Trade accounts payable (55,190) 29,774
Inventory due under exchange
agreements 47,687 3,155
Excise taxes payable and other
accrued liabilities 1,513 7,594
------------------ ------------------
Net cash provided (used)
by operating activities 236,183 (27,344)
------------------ ------------------
Cash flows from investing activities:
Purchases of property, plant and equipment (52,894) (52,695)
Proceeds from disposition of assets 137,325 -
Acquisition of Louis Dreyfus Energy Corp. - (293,057)
Investment in West Shore Pipe Line Company - (35,961)
Increase (decrease) in other assets, net 574 (597)
------------------ ------------------
Net cash provided (used)
by investing activities 85,005 (382,310)
------------------ ------------------
Cash flows from financing activities:
Borrowings (repayments) of long-term debt, net (290,680) 345,508
Deferred debt issuance costs (4,833) (9,531)
Preferred stock issued, net of receivable under preferred
stock purchase agreements - 59,500
Common stock issued 92 35
Common stock repurchased and retired - (123)
Preferred stock dividends paid (6,379) -
------------------ ------------------
Net cash provided (used)
by financing activities (301,800) 395,389
------------------ ------------------
Increase (decrease) in cash
and cash equivalents 19,388 (14,265)
Cash and cash equivalents at beginning of period 13,927 27,215
------------------ ------------------
Cash and cash equivalents at end of period $ 33,315 12,950
================== ==================
</TABLE>
See accompanying notes to condensed consolidated financial statements.
7
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<CAPTION>
TRANSMONTAIGNE INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Continued)
Nine Months Ended March 31, 2000 and 1999 (Unaudited)
(In thousands)
- -----------------------------------------------------------------------------------------------------------------------
2000 1999
------------------ ------------------
Supplemental disclosures of cash flow information:
Acquisition of Louis Dreyfus Energy Corp. ("LDEC")
<S> <C> <C>
Fair value of assets acquired $ - 456,990
Fair value of liabilities assumed - (103,498)
------------------ ------------------
- 353,492
Fair value of common stock issued - (60,435)
------------------ ------------------
Cash paid in acquisition $ - 293,057
================== ==================
Disposition of Bear Paw Energy Inc. ("BPEI")
Carrying basis of assets sold $ 114,563 -
Net gain on disposition 16,587 -
------------------ ------------------
Total consideration received $ 131,150 -
================== ==================
</TABLE>
See accompanying notes to consolidated financial statements.
8
<PAGE>
TRANSMONTAIGNE INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 2000
(1) Summary of Significant Accounting Policies
Nature of Business
TransMontaigne Inc. ("TransMontaigne") provides a broad range of
integrated transportation, terminaling, storage, supply, distribution,
gathering, processing and marketing services to producers, refiners,
distributors, marketers and industrial end-users of petroleum products,
chemicals, other bulk liquids, natural gas and crude oil in the
downstream sector of the petroleum and chemical industries.
TransMontaigne is a holding company which conducts its operations through
wholly-owned subsidiaries primarily in the Mid-Continent, Gulf Coast,
Southeast, Mid-Atlantic, Northeast and Rocky Mountain regions of the
United States. TransMontaigne operations are divided into three
logistical petroleum services business segments: pipelines, which
includes transportation and delivery of refined petroleum products and
crude oil; terminals, which includes terminaling and storage of refined
petroleum products, crude oil, chemicals and other bulk liquids; and
products, which includes supply, distribution and marketing of refined
petroleum products and natural gas liquids ("NGL"); and a natural gas
services business segment which includes gathering, treating, processing,
fractionating and marketing NGL and natural gas, which was divested
effective December 31, 1999. Segment information is presented in the
notes to the condensed consolidated financial statements. TransMontaigne
does not explore for, or produce, crude oil or natural gas; and does not
own crude oil or natural gas reserves.
Basis of Presentation
The condensed consolidated financial statements included in this Form
10-Q have been prepared by TransMontaigne without audit pursuant to the
rules and regulations of the Securities and Exchange Commission.
Accordingly, these statements reflect adjustments (consisting only of
normal recurring entries) which are, in the opinion of TransMontaigne
management, necessary for a fair statement of the financial results for
the interim periods. Certain information and notes normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such
rules and regulations, although TransMontaigne believes that the
disclosures are adequate to make the information presented not
misleading. These condensed consolidated financial statements should be
read in conjunction with the financial statements and related notes,
together with management's discussion and analysis of financial condition
and results of operations included in TransMontaigne's Annual Report on
Form 10-K for the year ended June 30, 1999.
The preparation of financial statements in conformity with generally
accepted accounting principles requires TransMontaigne management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Changes in
these estimates and assumptions will occur as a result of the passage of
time and the occurrence of future events, and actual results will differ
from the estimates.
The accounting and financial reporting policies of TransMontaigne and its
subsidiaries conform to generally accepted accounting principles and
prevailing industry practices. All significant intercompany accounts and
transactions have been eliminated in consolidation.
9
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TRANSMONTAIGNE INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 2000
(1) Summary of Significant Accounting Policies (continued)
Inventory Risk Management
TransMontaigne utilizes derivative financial instruments to manage market
risks associated with certain energy commodities.
In connection with its products supply, distribution and marketing
business, TransMontaigne engages in trading activities. Trading
activities are accounted for using the mark-to-market method of
accounting. During the fiscal year ended June 30, 1999, TransMontaigne
adopted the provisions of Emerging Issues Task Force Issue No. 98-10,
Accounting for Contracts Involved in Energy Trading and Risk Management
Activities ("EITF 98-10"), which requires energy trading contracts to be
recorded at fair value on the balance sheet, with the changes in fair
value included in earnings.
Trading activities are conducted through a variety of financial
instruments, including forward contracts involving cash settlement or
physical delivery of energy commodities; swap contracts which require
payments to (or receipts from) counterparties based on the differential
between a fixed and variable price for the commodities; exchange-trade
options; over-the-counter options; and other contractual arrangements.
Under mark-to-market accounting, commodity and energy related contracts
are reflected at fair value with resulting gains and losses recorded in
operating income. The net gains and losses recognized in the current
period result primarily from transactions originating within the period
and the impact of current period price movements on transactions
originating in prior periods. Unrealized gains and losses from energy
trading activities are recorded as assets and liabilities.
The market value of these energy contracts is based upon management's
estimate, considering various factors including closing exchange and
over-the-counter quotations, time value and volatility factors underlying
the commitments. The market values are adjusted to reflect the potential
impact of liquidating TransMontaigne's position in an orderly manner over
a reasonable period of time under present market conditions.
TransMontaigne's Product and Risk Management Committee reviews the total
inventory and risk position on a regular basis in order to ensure
compliance with TransMontaigne's inventory management policies, including
hedging and trading activities. Policy change requires the prior approval
of the Product and Risk Management Committee and the Audit Committee of
the Board of Directors.
Recently Issued Accounting Pronouncement
In 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 133, Accounting for
Derivative Instruments and Hedging Activities. SFAS 133 establishes
accounting and reporting standards requiring that every derivative
instrument (including certain derivative instruments embedded in other
contracts) be recorded on the balance sheet as either an asset or
liability measured at its fair value. The statement requires that changes
in the derivative's fair value be recognized currently in earnings unless
specific hedge accounting criteria are met. SFAS 133 as amended by SFAS
137 is effective for fiscal quarters of fiscal years beginning after June
15, 2000. TransMontaigne is in the process of assessing the impact, if
any, that SFAS 133 will have on its consolidated financial statements.
10
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TRANSMONTAIGNE INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 2000
(1) Summary of Significant Accounting Policies (continued)
Reclassifications
Certain amounts in the accompanying condensed consolidated financial
statements for prior periods have been reclassified to conform to the
classifications used at March 31, 2000.
(2) Disposition of Assets
Effective December 31, 1999, TransMontaigne sold its natural gas
gathering subsidiary, Bear Paw Energy Inc., ("BPEI"), to BPE Acquisition
LLC ("BPE"), a special purpose entity formed by Bear Paw's management in
association with Thomas J. Edelman and Chase Capital Partners. The sale
of BPEI was for cash consideration of $107.5 million, plus $23.7 million
of retroactive reimbursement for all of the capital expenditures made by
TransMontaigne on BPEI's newly constructed Powder River coal seam
gathering system from July 1, 1999 to December 31, 1999. This disposition
generated an approximate $16.6 million net gain to TransMontaigne. The
$131.2 million total sale proceeds were used to reduce long term debt and
for general corporate purposes.
(3) Acquisitions of Assets
On June 30, 1999, TransMontaigne, through wholly-owned subsidiaries
TransMontaigne Terminaling Inc. ("TTI") and TransMontaigne Product
Services Inc. ("TPSI"), acquired from Amerada Hess Corporation the Hess
Southeastern Pipeline Network ("Hess Terminals") of refined petroleum
product facilities for approximately $66,200,000 cash, and related
refined products inventory for $32,500,000 cash. The Hess Terminals,
which are interconnected to the Colonial and Plantation pipeline systems,
include approximately 5.3 million barrels of tankage at 11 storage and
terminal facilities and 36 miles of proprietary pipelines.
On October 30, 1998, TransMontaigne, through a wholly-owned subsidiary,
TPSI, acquired all of the common stock of LDEC for approximately
$161,000,000, including $100,565,000 cash and 4.5 million shares of
TransMontaigne common stock valued at $60,435,000. In addition,
TransMontaigne acquired LDEC's working capital for $192,492,000 cash. The
LDEC acquisition included 24 refined petroleum products terminal and
storage facilities, of which 7 are wholly owned and 17 are owned jointly
with BP Amoco, together with its supply, distribution and marketing
business. These facilities are located in 9 states in the Southern and
Eastern regions of the United States; have approximately 4.2 million
barrels of TransMontaigne owned storage capacity; and are supplied
primarily by the Colonial and Plantation pipeline systems.
TransMontaigne accounted for these acquisitions using purchase method
accounting as of the effective date of each transaction. Accordingly, the
purchase price of each transaction was allocated to the assets and
liabilities acquired based upon the estimated fair value of those assets
and liabilities as of the acquisition date. TransMontaigne received a
third party appraisal in connection with the LDEC allocation. The cash
used to purchase the above acquisitions was funded by advances from
TransMontaigne's credit facility.
11
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TRANSMONTAIGNE INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 2000
The following summary presents unaudited actual and pro forma results of
operations. The pro forma information assumes that the acquisition of
LDEC and the sale of BPEI occurred as of July 1, 1998, and combines the
historical results of operations of TransMontaigne, excluding BPEI, for
the three months and nine months ended March 31, 2000 and 1999, with the
historical results of operations of LDEC for the three months and nine
months ended March 31, 2000 and 1999. The unaudited pro forma results of
operations are not necessarily indicative of the results of operations
which would actually have occurred if LDEC had been acquired and BPEI had
been sold as of the beginning of the pro forma period, or which will be
attained in the future.
<TABLE>
<CAPTION>
Three Months Ended March 31, Nine Months Ended March 31,
------------------------------------- -------------------------------------
2000 1999 2000 1999
---------------- --------------- ---------------- ---------------
(Actual) (Pro forma) (Pro forma) (Pro forma)
---------------- --------------- ---------------- ---------------
(In thousands, except per share (In thousands, except per share
amounts) amounts)
<S> <C> <C> <C> <C>
Revenues $ 1,209,470 757,431 3,641,883 2,784,760
================ =============== ================ ===============
Net earnings (loss) $ 3,655 3,333 (39,719) 7,825
Preferred stock dividends (2,126) (148) (6,379) (148)
---------------- --------------- ---------------- ---------------
Net earnings (loss) attributable to
common stockholders $ 1,529 3,185 (46,098) 7,677
================ =============== ================ ===============
Earnings (loss) per common share:
Basic $ 0.05 0.10 (1.51) 0.25
================ =============== ================ ===============
Diluted $ 0.05 0.10 (1.51) 0.25
================ =============== ================ ===============
</TABLE>
(4) Inventories
TransMontaigne manages inventory by utilizing risk and portfolio
management disciplines including certain hedging strategies, forward
purchases and sales, swaps and other financial instruments to manage
market exposure. In managing inventory balances and related financial
instruments, management evaluates the market exposure from an overall
portfolio basis which considers both continuous movement of inventory
balances and related open positions in commodity trading instruments.
TransMontaigne's refined petroleum products inventory consists primarily
of gasoline and distillates. Inventory is divided into inventory held for
sale or exchange in the ordinary course of business and minimum inventory
which represents working stocks (pipeline in-transit and minimum terminal
inventory), pipeline line fill and terminal tank bottoms. Minimum
inventory is required to be held for operating balances in the conduct of
TransMontaigne's daily supply, distribution and marketing activities and
is maintained both in tanks and pipelines owned by TransMontaigne and
pipelines owned by third parties.
Contractual commitments are subject to risks including market value
fluctuations, as well as counterparty credit and liquidity risk.
TransMontaigne has established procedures to continually monitor these
contracts in order to minimize credit risk, including the establishment
and review of credit limits, margin requirements, master netting
arrangements, letters of credit and other guarantees.
12
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TRANSMONTAIGNE INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 2000
(5) Property, Plant and Equipment
<TABLE>
<CAPTION>
Property, plant and equipment at March 31, 2000 and June 30, 1999 is as
follows (in thousands):
March 31, June 30,
2000 1999
----------------- ------------------
<S> <C> <C>
Land $ 15,003 15,165
Pipelines, rights of way
and equipment 36,402 33,661
Terminals and equipment 285,292 296,544
Natural gas gathering
and processing - 108,533
Other plant and equipment 17,178 20,011
----------------- ------------------
353,875 473,914
Less accumulated depreciation 34,251 37,572
----------------- ------------------
$ 319,624 436,342
================= ==================
</TABLE>
(6) Investments
TransMontaigne, through its 65% ownership of TransMontaigne Holding Inc.,
effectively owns 18.04% of the common stock of Lion Oil Company ("Lion").
Lion owns a 65,000 barrel per day refinery in El Dorado, Arkansas; a
188-mile crude oil transportation pipeline in east Texas; a 1,100-mile
crude oil gathering system in south Arkansas and north Louisiana; and two
refined petroleum products terminals in Tennessee. At March 31, 2000 and
June 30, 1999, TransMontaigne's investment in Lion, carried at cost, was
approximately $10,111,000.
TransMontaigne, through a wholly-owned subsidiary, TransMontaigne
Pipeline Inc., owns 20.38% common stock interest in West Shore Pipe Line
Company ("West Shore"). Although TransMontaigne owns 20.38%, it does not
exercise significant influence over the operations of West Shore and
therefore carries its $35,960,000 investment at cost. TransMontaigne
recorded dividend income from West Shore of $1,119,000 and $899,000
during the nine months ended March 31, 2000 and 1999, respectively.
(7) Impairment on long lived assets
During the three months ended December 31, 1999, TransMontaigne recorded
non-cash impairment charges totaling $50.1 million, before income taxes.
These charges include $31.9 million relating to certain of
TransMontaigne's refined petroleum product terminals added in the 1998
acquisition of LDEC and $18.2 million relating to certain intangible
assets recorded as a result of the same acquisition. In accordance with
generally accepted accounting principles, TransMontaigne is required to
review the book values of long lived assets for impairment. In
calculating this impairment charge, TransMontaigne applied SFAS 121 in
estimating future cash flows by terminal, discounting those estimated
future cash flows at a 10% rate, which approximates TransMontaigne's cost
of capital, and then comparing the discounted future cash flows to the
net book value of each terminal. The impairment charge resulted from the
change in the planned use of certain terminals and the abandonment of a
pipeline that supplied one terminal, thereby significantly impacting the
economic viability of such terminals. Each of these factors reduced or
eliminated future cash flows. The $31.9 million impairment charge for the
terminals reduces the book value of these assets to their estimated fair
value as determined in TransMontaigne's impairment analysis.
The additional $18.2 million impairment charge for the intangible assets
represents the unamortized balance of these assets. Management's review
of the market location differentials associated with these assets showed
that TransMontaigne received little or no value from these assets in the
last twelve months. In addition, management does not anticipate any
material future value utilizing these assets.
13
<PAGE>
TRANSMONTAIGNE INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 2000
(8) Long-term Debt
<TABLE>
<CAPTION>
Long-term debt at March 31, 2000 and June 30, 1999 is as follows (in
thousands):
March 31, June 30,
2000 1999
------------------ ------------------
<S> <C> <C>
Line of credit $ 155,000 418,690
Senior promissory notes 50,000 75,000
123/4% senior subordinated debentures, net
of discount 1,992 3,982
------------------ ------------------
206,992 497,672
Less current maturity 1,992 2,000
------------------ ------------------
$ 205,000 495,672
================== ==================
</TABLE>
TransMontaigne amended its bank credit facility and Master Shelf
Agreement effective December 31, 1999. The amended bank credit facility
was reduced to a $395,000,000 credit facility consisting of a
$300,000,000 revolving component due December 31, 2003 and a $95,000,000
term component due June 30, 2006. The term component has quarterly
principal payments required beginning in September 2000. Borrowings under
this credit facility bear interest at an annual rate equal to the
lender's Alternate Base Rate plus margins, subject to a Eurodollar Rate
pricing option at TransMontaigne's election. The effective interest rate
at March 31, 2000 was 8.7%.
In April 1997, TransMontaigne entered into a Master Shelf Agreement with
an institutional lender which provides that the lender will agree to
quote, from time to time, an interest rate at which the lender would be
willing to purchase, on an uncommitted basis, up to $100 million of
TransMontaigne's senior promissory notes which will mature in no more
than 12 years, with an average life not in excess of 10 years. On April
17, 1997 and December 16, 1997, TransMontaigne sold $50,000,000 of 7.85%
and $25,000,000 of 7.22% Senior Notes due April 17, 2003 and October 17,
2004, respectively. Under the amended Master Shelf Agreement, the
commitment was reduced to $75,000,000. On January 20, 2000,
TransMontaigne paid down $25,000,000 of the $50,000,000 of 7.85% senior
notes with a portion of the proceeds from the sale of BPEI.
Each of the amended bank credit facility and amended Master Shelf
Agreement is secured by certain current assets and fixed assets, and each
also includes financial tests relating to fixed charge coverage, current
ratio, maximum leverage ratio, consolidated tangible net worth, cash
distributions and open inventory positions. As of March 31, 2000,
TransMontaigne was in compliance with all such tests contained in the
amended agreements.
At March 31, 2000 TransMontaigne had an outstanding balance of $2,000,000
of the originally issued $4,000,000 of 12.75% senior subordinated
debentures which are guaranteed by certain subsidiaries. The outstanding
debentures are subject to a required redemption on December 15, 2000. The
debentures may be prepaid prior to maturity at a premium, under certain
circumstances. In conjunction with the issuance of these debentures,
TransMontaigne issued warrants to purchase 248,686 shares of its common
stock at $3.60 per share.
Cash payments for interest were approximately $22,855,000 and $17,188,000
for the nine months ended March 31, 2000 and 1999, respectively.
14
<PAGE>
TRANSMONTAIGNE INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 2000
(9) Stockholders' Equity
On March 25, 1999 and March 30, 1999, TransMontaigne closed a private
placement of $170,115,000 of $1,000 Series A Convertible Preferred Stock
Units (the "Units"). Each Unit consists of one share of 5% convertible
preferred stock (the "Preferred Stock"), convertible into common stock at
$15 per share, and 66.67 warrants, each warrant exercisable to purchase
six-tenths of a share of common stock at $14 per share. Dividends are
cumulative and payable quarterly. TransMontaigne may redeem the Preferred
Stock on December 31, 2003 at the liquidation value of $1,000 per share
plus any accrued but unpaid dividends. If the Preferred Stock remains
outstanding after December 31, 2003, the dividend rate will increase to
an annual rate of 16%. The Preferred Stock is convertible any time and
may be called for redemption by TransMontaigne after the second year if
the market price of the common stock is greater than 175% of the
conversion price at the date of the call. Proceeds were used to reduce
bank debt incurred in connection with the LDEC acquisition and for
general corporate purposes.
(10) Restricted Stock
TransMontaigne has a restricted stock plan that provides for awards of
common stock to certain key employees, subject to forfeiture if
employment terminates prior to the vesting dates. The market value of
shares awarded under the plan is recorded in stockholders' equity as
unearned compensation. During the nine months ended March 31, 2000 and
1999, the TransMontaigne Compensation Committee of the Board of Directors
awarded 175,000 and 12,000 shares to certain key employees, respectively.
At March 25, 1999, the vesting of all the shares not then vested was
accelerated due to an ownership change resulting from the private
placement of the Series A Convertible Preferred Stock and the unamortized
balance of the unearned compensation was fully amortized. Amortization of
unearned compensation of $239,000 and $780,000 is included in general and
administrative expense for the nine months ended March 31, 2000 and 1999,
respectively.
(11) Litigation
TransMontaigne is a party to various claims and litigation in its normal
course of business. Although no assurances can be given, TransMontaigne
management believes that the ultimate resolution of such claims and
litigation, individually or in the aggregate, will not have a materially
adverse impact on TransMontaigne's financial position or its results of
operations.
15
<PAGE>
TRANSMONTAIGNE INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 2000
(12) Earnings Per Share ("EPS")
<TABLE>
<CAPTION>
The following table reconciles the computation of basic EPS and diluted
EPS for the three months and nine months ended March 31, 2000 and 1999:
Three Months Ended Nine Months Ended
March 31, March 31,
--------------------------------- -----------------------------
2000 1999 2000 1999
-------------- --------------- ----------- --------------
(In thousands, (In thousands,
except per share amounts) except per share amounts)
<S> <C> <C> <C> <C>
Net earnings (loss) $ 3,655 2,473 (38,576) 4,205
Preferred stock dividends (2,126) (148) (6,379) (148)
-------------- --------------- ----------- --------------
Net earnings (loss) attributable to common
stockholders for basic EPS 1,529 2,325 (44,955) 4,057
Effect of dilutive securities - - - -
-------------- --------------- ----------- --------------
Net earnings (loss) attributable to common
stockholders for diluted EPS $ 1,529 2,325 (44,955) 4,057
============== =============== =========== ==============
Basic weighted-average shares 30,630 30,471 30,569 28,470
Effect of dilutive securities:
Stock options 228 542 - 546
Stock warrants 89 176 - 181
-------------- --------------- ----------- --------------
Diluted weighted-average shares 30,947 31,189 30,569 29,197
============== =============== =========== ==============
Earnings (loss) per shares:
Basic $ 0.05 0.08 (1.47) 0.14
============== =============== =========== ==============
Diluted $ 0.05 0.07 (1.47) 0.14
============== =============== =========== ==============
</TABLE>
16
<PAGE>
TRANSMONTAIGNE INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 2000
(13) Business Segments
TransMontaigne provides a broad range of integrated transportation,
terminaling, supply, distribution, gathering, processing and marketing
services to producers, refiners, distributors, marketers and industrial
end-users of petroleum products, chemicals, other bulk liquids, natural
gas and crude oil in the downstream sector of the petroleum and chemical
industries. TransMontaigne conducts its business through five segments:
o Products - consists of services for the supply and distribution of
refined petroleum products through product exchanges, and bulk
purchases and sales in the physical, futures cash and New York
Mercantile Exchange ("NYMEX") markets, and the marketing of
refined petroleum products and NGL to retail, wholesale and
industrial customers at truck terminal rack locations, and
providing related value-added fuel procurement and management
services.
o Terminals - consists of services provided through the ownership
and/or operation of terminaling and storage facilities handling
petroleum products, chemicals and other bulk liquids with receipt
and delivery connections via pipelines, barges, tankers, rail cars
and trucks.
o Pipelines - consists of services provided through the ownership
and operation of refined petroleum product pipelines, and a crude
oil gathering pipeline system, and related delivery and storage
facilities with interconnections to other pipelines and to
terminaling, storage delivery facilities.
o Natural gas - consists of services provided through the ownership
and operation of natural gas pipeline gathering systems,
processing plants and related facilities for the gathering,
treating, processing, fractionating and reselling of natural gas
and NGL. This segment was eliminated effective December 31, 1999
(see Note 2).
o Corporate - consists of assets and corporate income and expense
not specifically included in other business segments.
Eliminations represent intercompany transactions between TransMontaigne's
business segments, primarily relating to services performed by the
terminals and pipelines segments for and sales of NGL by the natural gas
segment to the product segment.
For the nine months ended March 31, 2000, revenues; depreciation and
amortization; operating income; and capital expenditure amounts for the
natural gas segment reflect the activities prior to the sale of this
subsidiary effective December 31, 1999 (see Note 2). Accordingly, no
identifiable assets are shown for this segment at March 31, 2000. Also,
operating income for the products segment does not include the
$18,236,000 expense and the terminals segment does not include the
$31,900,000 expense related to the impairment of long lived assets for
the nine months ended March 31, 2000.
17
<PAGE>
TRANSMONTAIGNE INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 2000
(13) Business Segments (continued)
Information about TransMontaigne's business segments for the three months
and nine months ended March 31, 2000 and 1999 is summarized below (in
thousands):
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
March 31, March 31,
--------------------------------- -----------------------------
2000 1999 2000 1999
--------------- -------------- ------------- ------------
Revenues:
<S> <C> <C> <C> <C>
Products $ 1,199,919 751,344 3,634,246 1,931,159
Terminals 15,440 11,877 47,268 27,256
Pipelines 3,483 3,288 11,509 11,154
Natural gas - 11,938 39,620 39,162
Corporate 89 418 953 1,227
Eliminations (9,461) (9,496) (52,094) (36,168)
--------------- -------------- ------------- ------------
Total consolidated $ 1,209,470 769,369 3,681,502 1,973,790
=============== ============== ============= ============
Depreciation and amortization:
Products $ 12 4 503 14
Terminals 3,726 2,968 10,701 5,934
Pipelines 375 295 1,068 807
Natural gas - 1,490 3,141 4,420
Corporate 617 341 1,958 844
--------------- -------------- ------------- ------------
Total consolidated $ 4,730 5,098 17,371 12,019
=============== ============== ============= ============
Operating income (loss):
Products $ 10,139 12,107 (15,596) 18,520
Terminals 3,538 3,282 9,640 8,512
Pipelines 262 (128) 2,006 2,117
Natural gas - (274) 5,262 1,074
Corporate (1,372) (450) (2,505) (2,850)
--------------- -------------- ------------- ------------
Total consolidated $ 12,567 14,537 (1,193) 27,373
=============== ============== ============= ============
Identifiable assets:
Products $ 309,085 478,902 309,085 478,902
Terminals 283,735 250,695 283,735 250,695
Pipelines 66,435 64,996 66,435 64,996
Natural gas - 95,672 - 95,672
Corporate 100,630 51,745 100,630 51,745
Eliminations (5,475) (7,701) (5,475) (7,701)
--------------- -------------- ------------- ------------
Total consolidated $ 754,410 934,309 754,410 934,309
=============== ============== ============= ============
Capital expenditures:
Products $ - - - -
Terminals 6,314 7,397 22,568 36,991
Pipelines 379 2,360 2,384 8,171
Natural gas - 1,980 24,265 4,506
Corporate 281 734 3,677 3,027
--------------- -------------- ------------- ------------
Total consolidated $ 6,974 12,471 52,894 52,695
=============== ============== ============= ============
</TABLE>
18
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
TransMontaigne provides a broad range of integrated transportation, terminaling,
storage, supply, distribution, gathering, processing and marketing services to
producers, refiners, distributors, marketers and industrial end-users of
petroleum products, chemicals, other bulk liquids, natural gas and crude oil in
the downstream sector of the petroleum and chemical industries. TransMontaigne
is a holding company which conducts its operations through wholly-owned
subsidiaries primarily in the Mid-Continent, Gulf Coast, Southeast,
Mid-Atlantic, Northeast and Rocky Mountain regions of the United States.
TransMontaigne operations are divided into three business segments: pipelines,
which includes transportation and delivery of refined petroleum products and
crude oil; terminals, which includes terminaling and storage of refined
petroleum products, crude oil, chemicals and other bulk liquids; and products,
which includes supply, distribution and marketing of refined petroleum products
and natural gas liquids; and a natural gas services business segment which
includes gathering, treating, processing, fractionating and marketing natural
gas liquids ("NGL") and natural gas, which was divested effective December 31,
1999. Segment information is presented in the notes to the condensed
consolidated financial statements. TransMontaigne does not explore for, or
produce, crude oil or natural gas; and does not own crude oil or natural gas
reserves.
TransMontaigne owns and operates refined petroleum products, chemicals, other
bulk liquids, crude oil and natural gas assets. TransMontaigne's refined
petroleum products, chemicals, other bulk liquids and crude oil assets consist
primarily of 3 pipeline systems with approximately 850 miles of petroleum
products and crude oil pipeline and 73 terminal, storage and delivery facilities
located in 19 states with a combined tank storage capacity of approximately
21,000,000 barrels. TransMontaigne also extensively utilizes refined petroleum
products common carrier pipelines and terminals owned by third parties in order
to increase product volumes shipped, marketed and sold to and exchanged with
customers in other locations. Effective December 31, 1999, TransMontaigne sold
its natural gas gathering and processing assets which consisted of 6 gathering
and processing systems in 4 states and 1 Canadian province with combined
throughput capacity of 115 million cubic feet per day and over 2,900 miles of
pipelines.
DISPOSITIONS
Effective December 31, 1999, TransMontaigne sold its natural gas gathering
subsidiary, Bear Paw Energy Inc., ("BPEI"), to BPE Acquisition LLC ("BPE"), a
special purpose entity formed by BPEI's management in association with
Thomas J. Edelman and Chase Capital Partners. The sale of BPEI was for cash
consideration of $107.5 million, plus $23.7 million of retroactive reimbursement
for all of the capital expenditures made by TransMontaigne on BPEI's newly
constructed Powder River coal seam gathering system from July 1, 1999 to
December 31, 1999. This disposition generated an approximate $16.6 million net
gain to TransMontaigne. The $131.2 million total sale proceeds were used to
reduce long term debt and for general corporate purposes.
ACQUISITIONS
On June 30, 1999, TransMontaigne acquired from Amerada Hess Corporation the Hess
Terminals for approximately $66,200,000 cash and related refined products
inventory for approximately $32,500,000 cash. The Hess Terminals, which are
interconnected to the Colonial and Plantation pipeline systems, include
approximately 5.3 million barrels of tankage at 11 storage and terminal
facilities and 36 miles of proprietary pipelines.
On October 30, 1998, TransMontaigne acquired all of the common stock of LDEC for
approximately $161,000,000, including $100,565,000 cash and 4.5 million shares
of TransMontaigne common stock valued at $60,435,000. In addition,
TransMontaigne acquired LDEC's working capital for $192,492,000 cash. The LDEC
acquisition included 24 refined petroleum products terminal and storage
facilities, of which 7 are wholly owned and 17 are owned jointly with BP Amoco,
together with its supply, distribution and marketing business. These facilities
are located in 9 states in the Southern and Eastern regions of the United
States; have approximately 4.2 million barrels of TransMontaigne owned storage
capacity; and are supplied primarily by the Colonial and Plantation pipeline
systems.
19
<PAGE>
INFORMATION REGARDING FORWARD LOOKING STATEMENTS
This Quarterly Report on Form 10-Q includes forward looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Important factors which could cause actual
results to differ materially from those in the forward looking statements herein
include but are not limited to the following: TransMontaigne's success in
expanding its business by capitalizing on the trend by other companies in the
oil and gas industry to divest assets and outsource certain services,
TransMontaigne will generate net operating margins affected by price volatility
of products purchased and sold, TransMontaigne will enter into transactions with
counterparties having the ability to meet their financial commitments to
TransMontaigne, TransMontaigne will not incur unanticipated costs in complying
with current and future environmental regulations, TransMontaigne will generate
working capital internally, or have the ability to access debt and equity
resources, to meet its capital requirements, operating and financial risk
related to managing rapid growth. Although TransMontaigne believes that its
expectations are based on reasonable assumptions, it can give no assurance that
its goals will be achieved.
RESULTS OF OPERATIONS
TransMontaigne reported net earnings of $3,655,000 for the three months ended
March 31, 2000, compared to net earnings of $2,473,000 for the three months
ended March 31, 1999, an increase of $1,182,000. After preferred stock
dividends, net earnings attributable to common stockholders were $1,529,000 and
$2,325,000 for the three months ended March 31, 2000 and 1999, respectively.
Earnings per common share for the three months ended March 31, 2000 was $0.05
basic and diluted based on 30,630,000 weighted average basic and 30,947,000
weighted average diluted shares outstanding compared to $.08 basic and $.07
diluted for the three months ended March 31, 1999.
TransMontaigne reported a net loss of $38,576,000 for the nine months ended
March 31, 2000, compared to net earnings of $4,205,000 for the nine months ended
March 31, 1999, a decrease of $42,781,000. After preferred stock dividends, net
earnings (loss) attributable to common stockholders were $(44,955,000) and
$4,057,000 for the nine months ended March 31, 2000 and 1999, respectively. Loss
per common share for the nine months ended March 31, 2000 was $1.47 basic and
diluted based on 30,569,000 weighted average basic and diluted shares
outstanding compared to earnings per share of $.14 basic and diluted for the
nine months ended March 31, 1999.
Included in TransMontaigne's net loss for the nine months ended March 31, 2000
is an impairment charge on long lived assets of approximately $50.1 million ($30
million after tax) which was offset by a gain on the sale of BPEI of
approximately $16.6 million ($10 million after tax).
20
<PAGE>
RESULTS OF OPERATIONS (continued)
Selected financial data from TransMontaigne's business segments are summarized
below (in thousands):
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
March 31, March 31,
-------------------------- -------------------------
2000 1999 2000 1999
----------- ----------- ----------- ----------
Net operating margins (1):
Product operations:
<S> <C> <C> <C> <C>
Sales, exchanges and product arbitrage $ 15,133 14,312 5,676 23,089
Costs related to minimum inventory (2) (2,429) - (12,855) -
----------- ----------- ----------- ----------
12,704 14,312 (7,179) 23,089
Terminal operations 8,788 6,686 24,965 15,519
Pipeline operations 1,307 1,280 5,104 5,660
Natural gas services operations - 2,368 10,490 8,352
----------- ----------- ----------- ----------
Total net operating margins 22,799 24,646 33,380 52,620
Impairment to long lived assets - - 50,136 -
General and administrative expenses 5,502 5,011 17,202 13,228
Depreciation and amortization expenses 4,730 5,098 17,371 12,019
----------- ----------- ----------- ----------
Operating income (loss) 12,567 14,537 (51,329) 27,373
Interest expense and related financing costs (5,763) (11,253) (30,801) (22,393)
Dividend and interest income 859 704 2,815 1,802
Gain (loss) on disposition of assets (1,566) - 15,021 -
Income tax (expense) benefit (2,442) (1,515) 25,718 (2,577)
----------- ----------- ----------- ----------
Net earnings (loss) 3,655 2,473 (38,576) 4,205
Preferred stock dividends (2,126) (148) (6,379) (148)
----------- ----------- ----------- ----------
Net earnings (loss) attributable to common stockholders $ 1,529 2,325 (44,955) 4,057
=========== =========== =========== ==========
</TABLE>
(1) Net operating margins represent revenues less product costs and operating
expenses for the product and natural gas services segments and revenues
less operating expenses for terminal and pipeline operations.
(2) TransMontaigne did not measure the costs related to its minimum inventory
separately in the prior periods since it was not on mark to market
accounting for its inventories. Therefore, there is not a comparable amount
for the prior period.
Selected volumetric data for TransMontaigne's business segments are summarized
below:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended March
March 31, 31,
------------------------- -------------------------
2000 1999 2000 1999
----------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Products volumes - barrels per day 421,112 407,719 619,590 372,504
Terminal volumes - barrels per day 420,358 386,615 478,069 276,721
Pipeline volumes - barrels per day 58,480 54,288 73,036 62,955
Note: 1 barrel equals 42 gallons
</TABLE>
21
<PAGE>
THREE MONTHS ENDED MARCH 31, 2000 COMPARED TO
THREE MONTHS ENDED MARCH 31, 1999
Product Operations
Product revenues and fees are generated from bulk sales and exchanges of refined
petroleum products to major energy companies and large independent energy
companies; wholesale distribution and sales of refined petroleum products to
jobbers and retailers; regional and national industrial end-user and commercial
wholesale storage and forward sales marketing contracts of refined petroleum
products; and tailored short and long-term fuel margin and risk management
arrangements to wholesale, retail and industrial end-users. Refined petroleum
products storage and forward sales transactions enable TransMontaigne to
purchase refined petroleum products inventory; utilize proprietary and leased
tankage, as well as line space controlled by TransMontaigne in major common
carrier pipelines; arbitrage location product prices differentials and
transportation costs; store the inventory; and, depending upon market
conditions, realize margins through sales in the futures cash market or NYMEX
contracts. All energy related contracts are marked to market with changes being
recognized in operations. Margin and risk management provide both
TransMontaigne's large and small volume customers an assured, ratable and cost
effective short or long-term delivered source of refined petroleum product
supply through proprietary pipelines and terminals, as well as through
non-proprietary pipeline, terminal, truck, rail and barge distribution channels.
TransMontaigne's refined petroleum products inventory consists primarily of
gasoline and distillates. Inventory is divided into inventory held for sale or
exchange in the ordinary course of business and minimum inventory which
represents working stocks (pipeline in-transit and minimum terminal inventory),
pipeline line fill and terminal tank bottoms. Minimum inventory is required to
be held for operating balances in the conduct of TransMontaigne's daily supply,
distribution and marketing activities and is maintained both in tanks and
pipelines owned by TransMontaigne and pipelines owned by third parties.
Product costs of product operations consist primarily of the cost of products
purchased, but also include transportation, storage, terminaling and sales
commission costs. In addition, product costs include the market valuation change
of the refined petroleum products minimum inventory.
Operating expenses of product operations primarily include wages and employee
benefits, property taxes, travel and entertainment expenses.
The net operating margin from product operations for the three months ended
March 31, 2000 was $12,704,000, which includes $2,429,000 costs related to
minimum inventory. This net operating margin compares to a net operating margin
of $14,312,000 for the three months ended March 31, 1999. Revenues were
$1,199,919,000 for the three months ended March 31, 2000 compared to
$751,344,000 for the three months ended March 31, 1999, an increase of
$448,575,000. Revenue increases were due to an increase in barrels sold, which
included the reduction of minimum inventory barrels required to be held, and an
increase in the price per barrel of refined petroleum products over the prior
year quarter.
TransMontaigne continued its strategy of hedging both its discretionary and
minimum inventory during the three months ended March 31, 2000. TransMontaigne
strategically reduced its minimum inventory levels while maximizing margins and
reducing costs related to the remaining 2 million minimum inventory barrels. For
the three months ended March 31, 2000, the petroleum market pricing structure,
as indicated by the NYMEX futures market, was in an inverse for gasoline of
approximately $.023 per gallon, i.e., nearby futures prices were higher than the
succeeding periods. This compares to a $.032 per gallon carry, i.e., nearby
futures prices were lower than succeeding periods, for the same period in 1999.
For the quarter ended March 31, 2000, the distillate market was in an inverse of
approximately $.088 per gallon. This compares to $.007 average per gallon carry
for the same period in 1999. TransMontaigne obtains maximum margin by utilizing
its storage space and inventory positions when the market structure is in a
carry.
22
<PAGE>
Terminal Operations
Terminal revenues are based on the volume of refined petroleum products handled
at TransMontaigne terminal loading racks, generally at a standard per gallon
rate. Storage fees are generally based on a per barrel rate or tankage capacity
committed and will vary with the duration of the arrangement, the product stored
and special handling requirements, particularly when certain types of chemicals
and other bulk liquids are involved.
Operating expenses of terminal operations include wages and employee benefits,
utilities, communications, maintenance and repairs, property taxes, rent,
insurance, vehicle expenses, environmental compliance costs, materials and
supplies.
The net operating margin from terminal operations for the three months ended
March 31, 2000 was $8,788,000 compared to $6,686,000 for the three months ended
March 31, 1999, an increase of $2,102,000. The margin per barrel for the three
months ended March 31, 2000 of $.23 increased $.04 compared to the three months
ended March 31, 1999. The increases in net operating margin and margin per
barrel resulted from a $3,563,000 increase in revenues which was partially
offset by a $1,461,000 increase in operating costs. These increases were the
result of terminal acquisitions during the past year and the related additional
3,457,000 barrels handled.
Pipeline Operations
Pipeline revenues are based on the volume of refined petroleum products or crude
oil transported and the distance from the origin point to the delivery point.
TransMontaigne's interstate pipeline systems transport refined petroleum
products and their tariffs are regulated by the Federal Energy Regulatory
Commission ("FERC"). TransMontaigne's intrastate pipeline transports crude oil
and its tariffs are not regulated by the FERC, but are regulated by the Texas
Railroad Commission.
Operating expenses of pipeline operations include wages and employee benefits,
utilities, communications, maintenance and repairs, property taxes, rent,
insurance, vehicle expenses, environmental compliance costs, materials and
supplies.
The net operating margin from pipeline operations for the three months ended
March 31, 2000 was $1,307,000 compared to $1,280,000 for the three months ended
March 31, 1999, an increase of $27,000. The margin per barrel for the three
months ended March 31, 2000 of $.24 decreased $.02 compared to the three months
ended March 31, 1999. Pipeline volumes per day increased 4,192 barrels,
primarily due to increased short haul movements in the East Chicago area. The
decreases in the net operating margin and the margin per barrel resulted from a
decrease in higher tariff movements, a minimal increase in operating costs and
the transfer of non-carrier assets and their associated margins to terminal
operations.
Natural Gas Services Operations
This segment was eliminated effective December 31, 1999 (see Note 2).
23
<PAGE>
Corporate and Other
General and administrative expenses for the three months ended March 31, 2000
were $5,502,000 compared to $5,011,000 for the three months ended March 31,
1999, an increase of $491,000. The increase was due primarily to lease contract
cancellation costs accrued of approximately $1,000,000.
Depreciation and amortization expenses for the three months ended March 31, 2000
were $4,730,000 compared to $5,098,000 for the three months ended March 31,
1999, a decrease of $368,000. The decrease was due primarily to the disposition
of the natural gas services assets of Bear Paw Energy Inc. as of December 31,
1999, partially offset by the acquisition of the Hess Terminals.
Dividend income for the three months ended March 31, 2000 was $345,000 compared
to $560,000 for the three months ended March 31, 1999, a decrease of $215,000.
The dividend income is solely from West Shore. Increased operating expenses at
West Shore resulted in the decreased dividends. Interest income for the three
months ended March 31, 2000 was $514,000 compared to $144,000 for the three
months ended March 31, 1999, an increase of $370,000. The increase in interest
income was due primarily to the increase in interest bearing cash balances.
Interest expense, amortization of deferred debt issuance costs, and other
financing costs during the three months ended March 31, 2000 were $5,763,000
compared to $11,253,000 during the three months ended March 31, 1999, a decrease
of $5,490,000. The decrease in interest expense of $4,796,000 was due to a
decrease in average outstanding debt of $307,045,000 with proceeds from the
reduction of financed inventory and sale of BPEI assets, partially offset by an
increased average interest rates from 7.0% to 8.0%. Amortization of deferred
debt issuance costs decreased $475,000, primarily due to the reduction of
deferred debt costs associated with the pay down of debt facilities which were
expensed.
Income tax expense was $2,442,000 for the three months ended March 31, 2000,
which represents an effective combined federal and state income tax rate of 40%.
Income tax expense was $1,515,000 for the three months ended March 31, 1999,
which represents an effective combined federal and state income tax rate of 38%.
The net earnings for the three months ended March 31, 2000 was $3,655,000
compared to $2,473,000 for the three months ended March 31, 1999, an increase of
$1,182,000. The increase was due to increased net operating margin contribution
from terminal operations and a reduction in interest expense and related
financing costs, primarily attributable to a reduction in average outstanding
debt. These increases were partially offset by reduced net operating margin
contributions from product operations, elimination of net operating margin from
natural gas services, increased general and administrative expenses, the loss on
disposition of assets and increased deferred tax expense.
Preferred stock dividends on the Series A Convertible Preferred Stock were
$2,126,000 and $148,000 for the three months ended March 31, 2000 and 1999,
respectively. The preferred stock dividends for the three months ended March 31,
2000 were paid March 30, 2000.
24
<PAGE>
NINE MONTHS ENDED MARCH 31, 2000 COMPARED TO
NINE MONTHS ENDED MARCH 31, 1999
Product Operations
Product revenues and fees are generated from bulk sales and exchanges of refined
petroleum products to major energy companies and large independent energy
companies; wholesale distribution and sales of refined petroleum products to
jobbers and retailers; regional and national industrial end-user and commercial
wholesale storage and forward sales marketing contracts of refined petroleum
products; and tailored short and long-term fuel margin and risk management
arrangements to wholesale, retail and industrial end-users. Refined petroleum
products storage and forward sales transactions enable TransMontaigne to
purchase refined petroleum products inventory; utilize proprietary and leased
tankage, as well as line space controlled by TransMontaigne in major common
carrier pipelines; arbitrage location product prices differentials and
transportation costs; store the inventory; and, depending upon market
conditions, realize margins through sales in the futures cash market or NYMEX
contracts. All energy related contracts are marked to market with changes being
recognized in operations. Margin and risk management provide both
TransMontaigne's large and small volume customers an assured, ratable and cost
effective short or long-term delivered source of refined petroleum product
supply through proprietary pipelines and terminals, as well as through
non-proprietary pipeline, terminal, truck, rail and barge distribution channels.
TransMontaigne's refined petroleum products inventory consists primarily of
gasoline and distillates. Inventory is divided into inventory held for sale or
exchange in the ordinary course of business and minimum inventory which
represents working stocks (pipeline in-transit and minimum terminal inventory),
pipeline line fill and terminal tank bottoms. Minimum inventory is required to
be held for operating balances in the conduct of TransMontaigne's daily supply,
distribution and marketing activities and is maintained both in tanks and
pipelines owned by TransMontaigne and pipelines owned by third parties.
Product costs of product operations consist primarily of the cost of products
purchased, but also include transportation, storage, terminaling and sales
commission costs. In addition, product costs include the market valuation change
of the refined petroleum products minimum inventory.
Operating expenses of product operations primarily include wages and employee
benefits, property taxes, travel and entertainment expenses.
The net operating loss from product operations for the nine months ended March
31, 2000 was $7,179,000, which includes $12,855,000 costs related to minimum
inventory and an increase of $1,750,000 in the reserve for doubtful accounts.
This net operating loss compares to a net operating margin of $23,089,000 for
the nine months ended March 31, 1999. Revenues were $3,634,246,000 for the nine
months ended March 31, 2000 compared to $1,931,159,000 for the nine months ended
March 31, 1999, an increase of $1,703,087,000. Revenue increases were due to an
increase in barrels sold, which included the liquidation of discretionary
barrels held and the reduction of minimum inventory barrels held; an increase in
the price per barrel of refined petroleum products over the prior year; and the
inclusion of nine months of LDEC operations, whereas the prior year had only
five months of operations.
TransMontaigne's strategy of hedging both its discretionary and minimum
inventory resulted in no benefit from the significant price increase of crude
oil and refined petroleum products during the nine months ended March 31, 2000.
For the nine months ended March 31, 2000, the petroleum market pricing
structure, as indicated by the NYMEX futures market, was in an inverse for
gasoline of approximately $.027 per gallon, i.e., nearby futures prices were
higher than the succeeding periods. This compares to a $.017 carry, i.e., nearby
futures prices were lower than succeeding periods, for the same period in 1999.
For the nine months ended March 31, 2000, the distillate market began in a carry
of approximately $.014 per gallon and then moved to a $.066 per gallon inverse
at March 31, 2000. This compares to average carry of approximately $.018 per
gallon for the same period in 1999. TransMontaigne obtains maximum margin by
utilizing its storage space and inventory positions when the market structure is
in a carry.
25
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Terminal Operations
Terminal revenues are based on the volume of refined petroleum products handled
at TransMontaigne terminal loading racks, generally at a standard per gallon
rate. Storage fees are generally based on a per barrel rate or tankage capacity
committed and will vary with the duration of the arrangement, the product stored
and special handling requirements, particularly when certain types of chemicals
and other bulk liquids are involved.
Operating expenses of terminal operations include wages and employee benefits,
utilities, communications, maintenance and repairs, property taxes, rent,
insurance, vehicle expenses, environmental compliance costs, materials and
supplies.
The net operating margin from terminal operations for the nine months ended
March 31, 2000 was $24,965,000 compared to $15,519,000 for the nine months ended
March 31, 1999, an increase of $9,446,000. The margin per barrel for the nine
months ended March 31, 2000 of $.19 decreased $.01 compared to the nine months
ended March 31, 1999. The increase in net operating margin resulted from a
$20,012,000 increase in revenues which was partially offset by a $10,566,000
increase in operating costs. These increases were primarily the result of
terminal acquisitions during the past year and the related additional 55,647,000
barrels handled.
Pipeline Operations
Pipeline revenues are based on the volume of refined petroleum products or crude
oil transported and the distance from the origin point to the delivery point.
TransMontaigne's interstate pipeline systems transport refined petroleum
products and their tariffs are regulated by the FERC. TransMontaigne's
intrastate pipeline transports crude oil and its tariffs are not regulated by
the FERC, but are regulated by the Texas Railroad Commission.
Operating expenses of pipeline operations include wages and employee benefits,
utilities, communications, maintenance and repairs, property taxes, rent,
insurance, vehicle expenses, environmental compliance costs, materials and
supplies.
The net operating margin from pipeline operations for the nine months ended
March 31, 2000 was $5,104,000 compared to $5,660,000 for the nine months ended
March 31, 1999, a decrease of $556,000. The margin per barrel for the nine
months ended March 31, 2000 of $.25 decreased $.07 compared to the nine months
ended March 31, 1999. Pipeline volumes per day increased 10,081 barrels,
primarily due to increased short haul movements in the East Chicago area. The
decreases in the net operating margin and the margin per barrel resulted from a
decrease in higher tariff movements, an increase in operating costs, and the
transfer of non-carrier assets and their associated margins to terminal
operations.
Natural Gas Services Operations
This segment was eliminated effective December 31, 1999 (see Note 2).
26
<PAGE>
Corporate and Other
General and administrative expenses for the nine months ended March 31, 2000
were $17,202,000 compared to $13,228,000 for the nine months ended March 31,
1999, an increase of $3,974,000. The increase was due primarily to additional
personnel costs, related employee benefits, increased office lease rentals,
increased communication expenses directly attributable to the continued
expansion of TransMontaigne's integrated logistical petroleum services and to
the acquisition and operation of LDEC and the Hess Terminals, lease contract
cancellation costs accrued and additional personnel costs related to separation
and release agreements.
Depreciation and amortization expenses for the nine months ended March 31, 2000
were $17,371,000 compared to $12,019,000 for the nine months ended March 31,
1999, an increase of $5,352,000. The increase was due primarily to terminal
related assets being acquired and constructed during the past year partially
offset by the disposition of natural gas services assets of BPEI and impairment
charge recorded at December 31, 1999.
Dividend income for the nine months ended March 31, 2000 was $1,119,000 compared
to $899,000 for the nine months ended March 31, 1999, an increase of $220,000.
Dividend income is solely from West Shore, and includes only six months of
activity for the prior nine month period. Interest income for the nine months
ended March 31, 2000 was $1,696,000 compared to $903,000 for the nine months
ended March 31, 1999, an increase of $793,000. The increase in interest income
was due primarily to the increase in interest bearing cash balances.
Interest expense, amortization of deferred debt issuance costs, and other
financing costs during the nine months ended March 31, 2000 were $30,801,000
compared to $22,393,000 during the nine months ended March 31, 1999, an increase
of $8,408,000. The increase in interest expense of $4,311,000 was primarily due
to increased average interest rates from 7.1% to 8.7% with a minimal decrease in
the average outstanding debt and $875,000 in expense related to prepayment of
outstanding long-term debt. Amortization of deferred debt issuance costs
increased $4,258,000 primarily due to the write off of approximately $3,845,000
in connection with amended debt agreements.
Income tax benefit was $25,718,000 for the nine months ended March 31, 2000,
which represents an effective combined federal and state income tax rate of 40%.
Income tax expense was $2,577,000 for the nine months ended March 31, 1999,
which represents an effective combined federal and state income tax rate of 38%.
The net loss for the nine months ended March 31, 2000 was $38,576,000 compared
to net earnings of $4,205,000 for the nine months ended March 31, 1999, a
decrease of $42,781,000. The net loss resulted primarily from the negative $7.18
million net operating margin from products operations which includes $12.9
million costs related to minimum inventory; the $50.1 million impairment charge;
increased general and administrative expenses; additional depreciation and
amortization expenses attributable to the acquisitions and facilities expansion
projects; increased interest expense, primarily attributable to the increase in
average interest rates; and an approximate $3.8 million charge to amortization
of deferred debt issuance costs due to the amended debt agreements. The net loss
was partially offset by increased net operating margin contributions from
terminal operations and natural gas services operations, the approximately $16.6
million gain on the sale of BPEI, and the $25.7 million net deferred tax
benefit.
Preferred stock dividends on the Series A Convertible Preferred Stock were
$6,379,000 and $148,000 for the nine months ended March 31, 2000 and 1999,
respectively.
27
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LIQUIDITY AND CAPITAL RESOURCES
TransMontaigne believes that its current working capital position; future cash
provided by operating activities; proceeds from the private placement or public
offering of debt and common stock; available borrowing capacity under the bank
credit facility and the Master Shelf Agreement; additional borrowing allowed
under those agreements; and its relationship with institutional lenders and
equity investors should enable TransMontaigne to meet its current capital
requirements.
Net cash provided by operating activities was $236,183,000 for the nine months
ended March 31, 2000, which was attributable primarily to decreased inventories
and trade accounts receivable, increased inventory due under exchange
agreements, and reduced by decreased trade accounts payable and the net loss.
Net cash used by operating activities was $27,344,000 for the nine months ended
March 31, 1999, which was attributable primarily to increased inventories and
trade accounts receivable, and reduced by increased trade accounts payable.
Net cash provided by investing activities was $85,005,000 during the nine months
ended March 31, 2000 as a result of the sale of BPEI and was reduced as
TransMontaigne continued its growth through construction and improvements to
existing operating facilities. Net cash used by investing activities was
$382,310,000 during the nine months ended March 31, 1999, which included the
acquisitions of LDEC, the Southwest Terminal, a 20.38% common stock interest in
West Shore, and enhancements to the pipeline and terminal facilities.
Net cash used by financing activities for the nine months ended March 31, 2000
was $301,800,000, which primarily represented net repayments of $290,680,000
under TransMontaigne's bank credit facility and Master Shelf Agreement. Net cash
provided by financing activities for the nine months ended March 31, 1999 of
$395,389,000 represented borrowings under TransMontaigne's bank credit facility
and the issuance of preferred stock and was primarily used to finance the
acquisition of LDEC, other capital expenditures and operations.
TransMontaigne amended its bank credit facility, effective as of December 31,
1999. The amended bank credit facility includes a $300,000,000 revolving
component due December 31, 2003 and a $95,000,000 term component due June 30,
2006. The term component has quarterly principal payments required beginning in
September 2000. Borrowings under this credit facility bear interest at an annual
rate equal to the lender's Alternate Base Rate plus margins subject to a
Eurodollar Rate pricing option. The bank credit facility includes a $20,000,000
same day revolving swing line under which advances may be drawn at an interest
rate comparable to the Eurodollar Rate.
At March 31, 2000, TransMontaigne had advances of $155,000,000 outstanding under
the bank credit facility utilizing the Eurodollar Rate loan pricing option. The
effective interest rate at March 31, 2000 was 8.7%. On January 20, 2000,
TransMontaigne paid down $105,000,000 of the $200,000,000 term loan with a
portion of the proceeds from the sale of BPEI.
At March 31, 2000, TransMontaigne had outstanding under the Master Shelf
Agreement, $25,000,000 of 7.85% Senior Notes due April 17, 2003 and $25,000,000
of 7.22% Senior Notes due October 17, 2004. On January 20, 2000, TransMontaigne
paid down $25,000,000 of its $50,000,000 7.85% Senior Notes with a portion of
the proceeds from the sale of BPEI.
Each of the amended bank credit facility and amended Master Shelf Agreement is
secured by certain current assets and fixed assets, and each also includes
financial tests relating to fixed charge coverage, current ratio, maximum
leverage ratio, consolidated tangible net worth, distributions and inventory
positions. As of March 31, 2000, TransMontaigne was in compliance with all such
tests contained in the amended agreements.
Additional capital expenditures anticipated through June 30, 2000 are estimated
to be $8,000,000 for pipeline and terminal facilities, and assets to support
these facilities and could exceed that amount if additional facilities
enhancement projects and possible acquisitions being considered by
TransMontaigne materialize. Future capital expenditures will depend on numerous
factors, including the availability, economics and cost of appropriate
acquisitions which TransMontaigne identifies and evaluates; the economics, cost
and required regulatory approvals with respect to the expansion and enhancement
of existing systems and facilities; the customer demand for the services
TransMontaigne provides; local, state and federal governmental regulations;
environmental compliance requirements; and the availability of debt financing
and equity capital on acceptable terms.
28
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YEAR 2000 MATTERS
Historically, certain computer software and computer based management
information systems ("Information Technology"), as well as certain hardware
containing embedded microcontrollers and microprocessors ("Embedded
Technology"), were designed to utilize a two-digit rather than a four-digit date
field and consequently may cause computers, computer controlled systems and
equipment with embedded technology to malfunction or incorrectly process data in
the Year 2000, resulting in significant system failures. TransMontaigne relies
on Information Technology, as well as Embedded Technology, to operate
instruments and equipment in conducting its normal business activities. Certain
of the Information Technology and Embedded Technology may not have been designed
to function properly with respect to the application of dating systems relating
to the Year 2000.
In response, TransMontaigne developed a "Year 2000" Plan. While achieving Year
2000 readiness does not mean correcting every Year 2000 limitation, critical
systems, as well as relationships with third-party customers, vendors and local,
state and federal government agencies have been, and continue to be, evaluated
and are expected to be suitable for continued use into and beyond the Year 2000.
Through March 31, 2000, TransMontaigne had incurred third party costs of
approximately $1,375,000 related to Year 2000 compliance matters. These costs
have been funded through operating cash flows and do not include internal costs.
TransMontaigne does not presently separately record internal costs incurred with
respect to implementation of the Year 2000 Plan. Such costs are principally the
related payroll costs for the information systems and field operations
personnel, including senior management, involved in carrying out the Year 2000
Plan, as well as related travel and other out-of-pocket expenses. TransMontaigne
has had minimal business disruptions as the result of Year 2000 issues during
the three months ended March 2000.
While TransMontaigne does not anticipate that Year 2000 issues will have a
material adverse effect on the business, results of operations or financial
condition of TransMontaigne, if TransMontaigne Information Technology or
Embedded Technology, or those of business partners, fail to maintain Year 2000
readiness it could have a material adverse impact on the business, results of
operations or financial condition of TransMontaigne.
NEW ACCOUNTING STANDARDS
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133"), was issued in June 1998 by the
Financial Accounting Standards Board. SFAS 133 establishes new accounting and
reporting standards for derivative instruments and for hedging activities. This
statement requires an entity to establish at the inception of a hedge, the
method it will use for assessing the effectiveness of the hedging derivative and
the measurement approach for determining the ineffective aspect of the hedge.
Those methods must be consistent with the entity's approach to managing risk.
SFAS 133, as amended, is effective for all fiscal quarters of fiscal years
beginning after June 15, 2000. TransMontaigne is in the process of assessing the
impact, if any, that SFAS 133 will have on its consolidated financial
statements.
29
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information contained in Item 3 updates, and should be read in conjunction
with information set forth in Part II, Item 7A in TransMontaigne's Annual Report
on Form 10-K for the year ended June 30, 1999, in addition to the interim
condensed consolidated financial statements and accompanying notes presented in
Items 1 and 2 of this Form 10-Q.
There are no material changes in market risks faced by TransMontaigne from those
reported in its Annual Report on Form 10-K for the year ended June 30, 1999.
30
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PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.1 Fourth Amended and Restated Credit Agreement between
TransMontaigne Inc. and BankBoston, N.A., as Agent, dated as of
February 11, 2000. FILED HEREWITH.
10.2 Amended and Restated Master Shelf Agreement among TransMontaigne
Inc., The Prudential Insurance Company of America and U.S.
Private Placement Fund dated as of February 14, 2000. FILED
HEREWITH.
27 Financial Data Schedule. FILED HEREWITH.
(b) Reports on Form 8-K
A Form 8-K dated December 27, 1999 reporting Item 5 of Form 8-K,
announcing the signing of a definitive agreement with BPE Acquisition
LLC; and Item 7 of Form 8-K, providing the December 27, 1999 press
release as the exhibit, was filed on January 6, 2000.
A Form 8-K dated December 31, 1999 reporting Item 2, the sale of all
the issued and outstanding capital stock of its wholly-owned natural
gas gathering subsidiary, Bear Paw Energy Inc., to BPE Acquisition LLC;
and Item 7, deferring filing of the pro forma financial statements
reflecting the sale, was filed on January 18, 2000.
A Form 8-K/A dated December 31, 1999 was filed on March 17, 2000,
amending the Current Report on Form 8-K filed on January 18, 2000,
solely to add the pro forma financial statements required by Item 7(b)
of Form 8-K.
31
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: May 12, 2000 TRANSMONTAIGNE INC.
(Registrant)
/s/ RODNEY S. PLESS
-------------------
Rodney S. Pless
Vice President, Controller and
Chief Accounting Officer
32
Exhibit 10.1
Conformed Execution Copy
TRANSMONTAIGNE INC.
FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of February 11, 2000
BANKBOSTON, N.A., Agent
FLEETBOSTON ROBERTSON STEPHENS INC.
Lead Arranger and Book Manager
BANK OF AMERICA, N.A.
Documentation Agent
FIRST UNION NATIONAL BANK
Syndication Agent
CERTAIN FINANCIAL INSTITUTIONS
Lenders
<PAGE>
-i-
TABLE OF CONTENTS
1. Definitions; Certain Rules of Construction............................1
2. The Credits..........................................................29
2.1. Revolving Credit............................................29
2.1.1. Revolving Loan. ...................................29
2.1.2. Maximum Amount of Revolving Credit..................29
2.1.3. Borrowing Requests.................................29
2.1.4. Revolving Loan Account; Revolving Notes............30
2.2. Swingline Credit............................................30
2.2.1. Swingline Loan......................................30
2.2.2. Borrowing Requests.................................30
2.2.3. Swingline Loan Account; Swingline Notes............31
2.2.4. Conversion of Swingline Loan into Revolving Loan...31
2.3. Term Credit.................................................32
2.3.1. Term Loan..........................................32
2.3.2. Term Loan Account; Term Notes......................32
2.4. Letters of Credit...........................................32
2.4.1. Issuance of Letters of Credit......................32
2.4.2. Requests for Letters of Credit.....................33
2.4.3. Form and Expiration of Letters of Credit...........33
2.4.4. Lenders' Participation in Letters of Credit........33
2.4.5. Presentation.......................................34
2.4.6. Payment of Drafts..................................34
2.4.7. UCP; ISP...........................................34
2.4.8. Subrogation........................................36
2.4.9. Modification, Consent, etc.........................36
2.5. Application of Proceeds.....................................36
2.5.1. Revolving Loan.....................................36
2.5.2. Swingline Loan......................................37
2.5.3. Term Loan..........................................37
2.5.4. [Intentionally Omitted]............................37
2.5.5. Letters of Credit..................................37
2.5.6. Specifically Prohibited Applications...............37
2.6. Nature of Obligations of Lenders to Make Extensions of
Credit......................................................37
3. Interest; Eurodollar Pricing Options; Fees...........................37
3.1. Interest....................................................37
3.2. Eurodollar Pricing Options..................................38
3.2.1. Election of Eurodollar Pricing Options.............38
3.2.2. Notice to Lenders and Company......................39
3.2.3. Selection of Eurodollar Interest Periods...........39
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3.2.4. Additional Interest................................40
3.2.5. Violation of Legal Requirements....................40
3.2.6. Funding Procedure..................................40
3.3. Commitment Fees. ..........................................41
3.4. Letter of Credit Fees.......................................41
3.5. Reserve Requirements, etc...................................42
3.6. Taxes.......................................................42
3.7. Capital Adequacy............................................43
3.8. Regulatory Changes..........................................43
3.9. Computations of Interest and Fees...........................44
4. Payment..............................................................44
4.1. Payment at Maturity.........................................44
4.2. Contingent Required Prepayments.............................44
4.2.1. Excess Credit Exposure.............................44
4.2.2. Letter of Credit Exposure..........................44
4.3. Scheduled Required Prepayments..............................44
4.4. [Intentionally Omitted].....................................45
4.5. Voluntary Prepayments.......................................45
4.6. Letters of Credit...........................................45
4.7. Reborrowing; Application of Payments, etc...................46
4.7.1. Reborrowing........................................46
4.7.2. Order of Application...............................46
4.7.3. Payment with Accrued Interest, etc.................46
4.7.4. Payments for Lenders...............................46
5. Conditions to Extending Credit.......................................46
5.1. Conditions on Restatement Date..............................47
5.1.1. Notes...............................................47
5.1.2. Perfection of Security.............................47
5.1.3. Payment of Fees....................................47
5.1.4. Legal Opinions.....................................47
5.1.5. Prudential Consent.................................48
5.1.6. No Material Adverse Change.........................48
5.1.7. No Order, Injunction or Litigation.................48
5.1.8. Adverse Market Change. ...........................48
5.1.9. Compliance Certificate.............................48
5.1.10. Initial Borrowing Base Certificate................48
5.2. Conditions to Each Extension of Credit......................48
5.2.1. Officer's Certificate..............................49
5.2.2. Proper Proceedings.................................49
5.2.3. Legality, etc......................................49
5.2.4. General............................................49
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6. General Covenants....................................................49
6.1. Taxes and Other Charges; Accounts Payable...................50
6.1.1. Taxes and Other Charges............................50
6.1.2. Accounts Payable...................................50
6.2. Conduct of Business, etc....................................50
6.2.1. Types of Business..................................50
6.2.2. Maintenance of Properties..........................50
6.2.3. Statutory Compliance...............................51
6.2.4. Compliance with Material Agreements................51
6.2.5. Trading Policy.....................................51
6.2.6. Subordinated Debentures............................51
6.2.7. Inventory Accounting...............................51
6.2.8. Inactive Subsidiaries...............................52
6.3. Insurance...................................................52
6.3.1. Business Interruption Insurance....................52
6.3.2. Property Insurance.................................52
6.3.3. Liability Insurance................................52
6.3.4. Flood Insurance....................................52
6.4. Financial Statements and Reports............................52
6.4.1. Annual Reports.....................................53
6.4.2. Quarterly Reports..................................54
6.4.3. Monthly Reports....................................55
6.4.4. Other Reports......................................55
6.4.5. Notice of Litigation...............................56
6.4.6. Notice of Defaults.................................56
6.4.7. ERISA Reports......................................57
6.4.8. [Intentionally Omitted]............................57
6.4.9. Other Information; Audit...........................57
6.4.10. Notice of Material Impairment to Accounts
Receivable........................................57
6.5. Certain Financial Tests.....................................58
6.5.1. Fixed Charge Coverage..............................58
6.5.2. Consolidated Tangible Net Worth....................58
6.5.3. Maximum Leverage...................................59
6.5.4. Minimum Current Ratio..............................59
6.5.5. Capital Expenditures...............................59
6.6. Indebtedness................................................59
6.7. Guarantees; Letters of Credit...............................61
6.8. Liens.......................................................62
6.9. Investments and Acquisitions................................63
6.10. Distributions...............................................64
6.11. Merger, Consolidation and Dispositions of Assets............65
6.12. Lease Obligations...........................................65
6.13. Issuance of Stock by Subsidiaries; Subsidiary Distributions.66
6.13.1. Issuance of Stock by Subsidiaries.................66
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6.13.2. No Restrictions on Subsidiary Distributions.......66
6.14. Interest Rate Protection....................................66
6.15. Derivative Contracts........................................66
6.16. Negative Pledge Clauses.....................................66
6.17. ERISA, etc..................................................67
6.18. Transactions with Affiliates................................67
6.19. Open Positions..............................................67
6.20. Environmental Laws..........................................67
6.20.1. Compliance with Law and Permits...................67
6.20.2. Notice of Claims, etc.............................67
6.21. Credit Security. ..........................................68
6.22. Amendments to Master Shelf Agreement........................68
7. Representations and Warranties.......................................68
7.1. Organization and Business...................................68
7.1.1. The Company........................................68
7.1.2. Subsidiaries.......................................68
7.1.3. Qualification......................................69
7.1.4. Capitalization.....................................69
7.2. Financial Statements and Other Information; Material
Agreements..................................................69
7.2.1. Financial Statements and Other Information.........69
7.2.2. Material Agreements................................70
7.3. Agreements Relating to Financing Debt, Investments, etc.....71
7.4. Changes in Condition........................................71
7.5. Title to Assets.............................................71
7.6. Operations in Conformity with Law, etc......................71
7.7. Litigation..................................................71
7.8. Authorization and Enforceability............................72
7.9. No Legal Obstacle to Agreements.............................72
7.10. Defaults....................................................73
7.11. Licenses, etc...............................................73
7.12. Tax Returns.................................................73
7.13. Certain Business Representations............................73
7.13.1. Labor Relations...................................73
7.13.2. Antitrust.........................................74
7.13.3. Consumer Protection...............................74
7.13.4. Year 2000 Issues..................................74
7.13.5. Burdensome Obligations............................74
7.13.6. Future Expenditures...............................74
7.14. Environmental Regulations...................................74
7.14.1. Environmental Compliance..........................74
7.14.2. Environmental Litigation..........................75
7.14.3. Hazardous Material................................75
7.14.4. Environmental Condition of Properties.............76
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7.15. Pension Plans...............................................76
7.16. [Intentionally Omitted].....................................76
7.17. Foreign Trade Regulations; Government Regulation; Margin
Stock.......................................................76
7.17.1. Foreign Trade Regulations.........................76
7.17.2. Government Regulation.............................76
7.17.3. Margin Stock......................................76
7.18. Minimum Petroleum Products Inventory Requirements...........77
7.19. Disclosure..................................................77
8. Defaults.............................................................77
8.1. Events of Default...........................................77
8.1.1. Payment............................................77
8.1.2. Specified Covenants................................77
8.1.3. Other Covenants....................................77
8.1.4. Representations and Warranties.....................77
8.1.5. Cross Default, etc.................................78
8.1.6. Ownership; Liquidation; etc........................78
8.1.7. Enforceability, etc................................79
8.1.8. Judgments..........................................79
8.1.9. ERISA..............................................79
8.1.10. Bankruptcy, etc...................................80
8.1.11. Subordinated Debentures...........................80
8.2. Certain Actions Following an Event of Default...............80
8.2.1. Terminate Obligation to Extend Credit..............80
8.2.2. Specific Performance; Exercise of Rights...........81
8.2.3. Acceleration.......................................81
8.2.4. Enforcement of Payment; Credit Security; Setoff....81
8.2.5. Cumulative Remedies................................81
8.3. Annulment of Defaults.......................................81
8.4. Waivers.....................................................82
9. Guarantees...........................................................82
9.1. Guarantees of Credit Obligations............................82
9.2. Continuing Obligation.......................................83
9.3. Waivers with Respect to Credit Obligations..................83
9.4. Lenders' Power to Waive, etc................................85
9.5. Information Regarding the Company, etc......................86
9.6. Certain Guarantor Representations...........................86
9.7. Subrogation.................................................87
9.8. Subordination...............................................87
9.9. Future Subsidiaries; Further Assurances.....................87
10. Security.............................................................87
10.1. Credit Security.............................................87
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10.1.1. Pledged Stock.....................................88
10.1.2. Pledged Rights....................................88
10.1.3. Pledged Indebtedness..............................88
10.1.4. Proceeds and Products.............................88
10.1.5. Excluded Property.................................88
10.2. [Intentionally Omitted].....................................89
10.3. Representations, Warranties and Covenants with Respect to
Credit Security.............................................89
10.3.1. Pledged Stock.....................................89
10.3.2. Pledged Indebtedness..............................89
10.3.3. [Intentionally Omitted]..........................89
10.3.4. No Liens or Restrictions on Transfer or Change of
Control...........................................89
10.3.5. [Intentionally Omitted]...........................90
10.3.6. Trade Names.......................................90
10.3.7. [Intentionally Omitted]...........................90
10.3.8. Modifications to Credit Security..................90
10.3.9. Delivery of Documents............................90
10.3.10. Perfection of Credit Security....................90
10.4. Administration of Credit Security...........................90
10.4.1. Use of Credit Security............................91
10.4.2. [Intentionally Omitted]...........................91
10.4.3. Pledged Securities................................91
10.5. Right to Realize upon Credit Security.......................91
10.5.1. Assembly of Credit Security; Receiver.............92
10.5.2. General Authority.................................92
10.5.3. Marshaling, etc...................................93
10.5.4. Sales of Credit Security..........................93
10.5.5. Sale Without Registration.........................94
10.5.6. Application of Proceeds...........................94
10.6. Custody of Credit Security..................................95
11. Expenses; Indemnity..................................................95
11.1. Expenses....................................................95
11.2. General Indemnity...........................................96
11.3. Indemnity With Respect to Letters of Credit.................97
12. Operations; Agent....................................................97
12.1. Interests in Credits........................................97
12.2. Agent's Authority to Act, etc...............................97
12.3. Company to Pay Agent, etc...................................97
12.4. Lender Operations for Advances, Letters of Credit, etc......97
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12.4.1. Advances..........................................97
12.4.2. Letters of Credit.................................98
12.4.3. Agent to Allocate Payments, etc...................98
12.4.4. Delinquent Lenders; Nonperforming Lenders.........99
12.5. Sharing of Payments, etc....................................99
12.6. Amendments, Consents, Waivers, etc.........................100
12.7. Agent's Resignation........................................101
12.8. Concerning the Agent.......................................102
12.8.1. Action in Good Faith, etc........................102
12.8.2. No Implied Duties, etc...........................102
12.8.3. Validity, etc....................................102
12.8.4. Compliance.......................................103
12.8.5. Employment of Agents and Counsel.................103
12.8.6. Reliance on Documents and Counsel................103
12.8.7. Agent's Reimbursement............................103
12.8.8. Agent's Fees.....................................103
12.9. Rights as a Lender.........................................104
12.10. Independent Credit Decision................................104
12.11. Indemnification............................................104
13. Successors and Assigns; Lender Assignments and Participations.......105
13.1. Assignments by Lenders.....................................105
13.1.1. Assignees and Assignment Procedures..............105
13.1.1A. Assignment Among Lenders.........................106
13.1.2. Terms of Assignment and Acceptance...............106
13.1.3. Register.........................................107
13.1.4. Acceptance of Assignment and Assumption..........107
13.1.5. Federal Reserve Bank.............................108
13.1.6. Further Assurances...............................108
13.2. Credit Participants........................................108
13.3. Replacement of Lender......................................109
14. Confidentiality.....................................................110
15. Foreign Lenders.....................................................110
16. Notices.............................................................111
17. Course of Dealing; Amendments and Waivers...........................112
18. Defeasance..........................................................112
19. No Strict Construction. ...........................................113
20. Certain Obligor Acknowledgments.....................................113
21. Venue; Service of Process...........................................113
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22. WAIVER OF JURY TRIAL................................................114
23. General.............................................................114
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EXHIBITS
1.29 - Committed Capital Expenditures Schedule
2.1.4 - Form of Revolving Note
2.2.3 - Form of Swingline Note
2.3.2 - Form of Term Note
5.2.1 - Form of Officer's Certificate
6.2.5 - Risk Management Policies Manual dated February 11, 2000 of
TransMontaigne Inc.
6.4.1 - Form of Covenant Compliance Certificate
6.4.4 - Form of Borrowing Base Certificate
7 - Disclosure Schedule
7.1 - Company and Subsidiaries
7.2.2 - Material Agreements
7.3 - Financing Debt, Certain Investments, etc.
7.14 - Hazardous Material Sites
7.15 - Multi-employer and Defined Benefit Plans
12.1 - Percentage Interests
13.1.1 - Form of Assignment and Acceptance
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TRANSMONTAIGNE INC.
FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
This Agreement, dated as of February 11, 2000, is among TransMontaigne
Inc., a Delaware corporation, the Subsidiaries of TransMontaigne Inc. from time
to time party hereto, the Lenders from time to time party hereto, BankBoston,
N.A., both in its capacity as a Lender and in its capacity as agent for itself
and the other Lenders, Bank of America, N.A. (formerly NationsBank, N.A.), both
in its capacity as a Lender and in its capacity as Documentation Agent, and
First Union National Bank, both in its capacity as a Lender and in its capacity
as Syndication Agent.
RECITALS
The parties hereto are party to a Credit Agreement dated as of December
18, 1996, as amended and restated effective as of March 31, 1998, as further
amended and restated effective as of October 30, 1998 and as further amended and
restated effective as of June 29, 1999 as amended by Amendment No. 1 thereto
dated as of June 29, 1999, Amendment No. 2 thereto dated as of September 30,
1999 and Amendment No. 3 thereto dated as of December 31, 1999 (as so amended
and restated and further amended, the "Existing Credit Agreement").
The Company has requested certain amendments of the terms of the
Existing Credit Agreement, including the addition of a borrowing base and
modification of financial and other covenants. Insofar as such modifications
affect the Lenders party to the Existing Credit Agreement, such modifications
may be approved by the holders of 51% of the Percentage Interests under the
Existing Credit Agreement.
The Agent has been authorized on behalf of Required Lenders under the
Existing Credit Agreement to execute and deliver this restatement.
Accordingly, the parties hereby agree that the Existing Credit
Agreement is amended and restated, effective as of February 14, 2000, subject to
satisfaction of each of the conditions set forth in Section 5.1 hereof, as
follows:
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1. Definitions; Certain Rules of Construction. Certain capitalized terms are
used in this Agreement and in the other Credit Documents with the specific
meanings defined below in this Section 1. Except as otherwise explicitly
specified to the contrary or unless the context clearly requires otherwise, (a)
the capitalized term "Section" refers to sections of this Agreement, (b) the
capitalized term "Exhibit" refers to exhibits to this Agreement, (c) references
to a particular Section include all subsections thereof, (d) the word
"including" shall be construed as "including without limitation", (e) accounting
terms not otherwise defined herein have the meaning provided under GAAP, (f)
terms defined in the UCC and not otherwise defined herein have the meaning
provided under the UCC, (g) references to a particular statute or regulation
include all rules and regulations thereunder and any successor statute,
regulation or rules, in each case as from time to time in effect, (h) references
to a particular Person include such Person's successors and assigns to the
extent not prohibited by this Agreement and the other Credit Documents and (i)
references to "Dollars" or "$" mean United States Funds. References to "the date
hereof" mean the date first set forth above.
1.1. "Accumulated Benefit Obligations" means 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.
1.2. "Affected Lender" is defined in Section 13.3.
1.3. "Affiliate" means, 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 (or with such other
specified Person), and shall include (a) any executive officer or director or
general partner of the Company (or of such other specified Person) and (b) any
Person of which the Company (or such other specified Person) or any Affiliate
(as defined in clause (a) above) of the Company (or of such other specified
Person) 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; and provided, further, that with respect to any Lender, the
term "Affiliate" shall include any fund or other investment vehicle advised by
such Lender or by an Affiliate of such Lender, any fund or other investment
vehicle advised by the same investment vehicle as such Lender or the investment
advisor of such Lender.
1.4. "Agent" means BankBoston in its capacity as agent for the Lenders
hereunder, as well as its successors and assigns in such capacity pursuant to
Section 12.7.
1.5. "Agreement" means this Credit Agreement as from time to time amended,
modified and in effect.
1.6. "Applicable Margin" means, with respect to any portion of the Revolving
Loan subject to a Eurodollar Pricing Option and with respect to the Swingline
Loan, two and three quarters percent (2.75%).
With respect to any portion of the Revolving Loan not subject to a
Eurodollar Pricing Option, "Applicable Margin" means one and one-quarter percent
(1.25%).
With respect to any portion of the Term Loan subject to a Eurodollar
Pricing Option, "Applicable Margin" means three and one-half percent (3.50%).
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With respect to any portion of the Term Loan not subject to a Eurodollar
Pricing Option, "Applicable Margin" means two percent (2.00%).
1.7. "Applicable Rate" means, at any date, the sum of:
(a) (i) with respect to each portion of the Revolving Loan or the Term
Loan subject to a Eurodollar Pricing Option, the sum of the Applicable Margin
with respect thereto plus the Eurodollar Rate with respect to such Eurodollar
Pricing Option; or
(ii) with respect to (A) each other portion of the Revolving Loan or
the Term Loan, the sum of the Applicable Margin with respect thereto plus the
Base Rate; plus
(b) an additional 2% effective on the day the Agent notifies the Company
that the interest rates hereunder are increasing as a result of the occurrence
and continuance of an Event of Default until the earlier of such time as (i)
such Event of Default is no longer continuing or (ii) such Event of Default is
deemed no longer to exist, in each case pursuant to Section 8.3.
1.8. "Assignee" is defined in Section 13.1.1.
1.9. "Assignment and Acceptance" is defined in Section 13.1.1.
1.10. "BankBoston" means BankBoston, N.A.
1.11. "Banking Day" means any day other than Saturday, Sunday or a day on which
banks in Boston, Massachusetts are authorized or required by law or other
governmental action to close and, if such term is used with reference to a
Eurodollar Pricing Option, any day on which dealings are effected in the
Eurodollars in question by first-class banks in the inter-bank Eurodollar
markets in New York, New York.
1.12. "Bankruptcy Code" means Title 11 of the United States Code.
1.13. "Bankruptcy Default" means an Event of Default referred to in Section
8.1.10.
1.14. "Base Rate" means, on any date, the greater of (a) the rate of interest
announced by BankBoston at the Boston Office as its Base Rate or (b) the sum of
1/2% plus the Federal Funds Rate.
1.15. "Borrowing Base" means, on any date, the sum of the following (without
duplication):
(a)......100% of Eligible Cash and Cash Equivalents, plus
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(b)......85% of Eligible Receivables, plus
(c)......85% of Eligible Margin Deposits, plus
(d)......80% of Eligible Exchange Contract Balances, plus
(e) 80% of Eligible Inventory, plus
(f)......100% of Paid but Unexpired Letters of Credit, plus
(g)......the lesser of 15% of Eligible Fixed Assets or $45,000,000 (or
the lesser of 30% of Eligible Fixed Assets or $90,000,000 when calculating the
Borrowing Base for purposes of determining whether the Company may incur
extensions of credit pursuant to Section 2.4), minus
(h)......the Term Loan, minus
(i)......any and all Indebtedness pari passu with respect to the Credit
Security (including without limitation the Indebtedness permitted by Section
6.6.12); provided, however, that the Borrowing Base shall be reduced to $1.00
during any period when the Company has failed to furnish the computation of the
Borrowing Base required by Section 6.4.4, commencing five days after such
computation was originally due; and, provided, further, that items eligible for
inclusion in the Borrowing Base shall be determined by the Agent in its sole
reasonable discretion from time to time.
1.16. "Borrowing Base Certificate" is defined in Section 6.4.4.
1.17. "Boston Office" means the principal banking office of BankBoston in
Boston, Massachusetts.
1.18. "By-laws" means 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.
1.19. "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
4
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assets of another Person) as a going concern permitted by Section 6.9.
1.20. "Capitalized Lease" means 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.
1.21. "Capitalized Lease Obligations" means 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.
1.22. "Cash Equivalents" means:
(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 or A-1 by S&P or issued by any Lender;
(b)......corporate obligations having a maturity of nine months or less
and rated at least Prime-1 by Moody's or A-1 by S&P or issued by any Lender;
(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 (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 or AA by S&P; and
(d)......any mutual fund or other pooled investment vehicle rated at
least Aa by Moody's or AA by S&P which invests principally in obligations
described above.
1.23. "CERCLA" means the federal Comprehensive Environmental Response,
Compensation and Liability Act of 1980.
1.24. "CERCLIS" means the federal Comprehensive Environmental Response
Compensation Liability Information System List (or any successor document)
promulgated under CERCLA.
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1.25. "Charter" means 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.
1.26. "Closing Date" means the Restatement Date and each date on which any
extension of credit is made pursuant to Section 2.1, 2.2 or 2.4.
1.27. "Code" means the federal Internal Revenue Code of 1986, as amended.
1.28. "Collateral Agent" means BankBoston, N.A., in its capacity as such
under the Security Agreement.
1.29. "Committed Capital Expenditures Schedule" means the schedule attached
as Exhibit 1.29 hereto.
1.30. "Commitment" means, with respect to any Lender, such Lender's obligations
to extend the credits contemplated by the Credit Documents and its interest in
such credits at any time outstanding. The current Commitments are set forth in
Exhibit 12.1 and the subsequent Commitments are recorded from time to time in
the Register.
1.31. "Company" means TransMontaigne Inc., a Delaware corporation.
1.32. "Computation Covenants" means Sections 6.5, 6.6.7, 6.6.16, 6.9.5,
6.10.2, 6.11.1, 6.12.2 and 6.19.
1.33. "Consolidated" and "Consolidating", when used with reference to any term,
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.
1.34. "Consolidated Current Assets" means, 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.
1.35. "Consolidated Current Liabilities" means, 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.
1.36. "Consolidated EBITDA" means, for any period, the total of:
(a) Consolidated Net Income; plus
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(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 dividends received 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.
1.37. "Consolidated Fixed Charges" means, for any period, the sum of:
(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
Section 4.2 or by paragraph 4A(2) of the Master Shelf 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
7
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(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 in
accordance with GAAP on a Consolidated basis as lessee under all leases of real
and/or personal property (other than Capitalized Leases).
1.38. "Consolidated Interest Expense" means, for any period, the total of:
(a) the aggregate amount of interest, including without limitation
commitment fees and Letter of Credit fees, 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.
1.39. "Consolidated Net Income" means, 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 any Indebtedness or
equity at less than face value after April 30, 1998;
(d) extraordinary and nonrecurring gains;
8
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(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.
1.40. "Consolidated Net Tangible Assets" means 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, tradenames, 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.
1.41. "Consolidated Tangible Net Worth" means, 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
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(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, tradenames, research and development expense,
organizational expense, unamortized debt discount and expense, deferred
financing charges and debt acquisition costs.
1.42. "Consolidated Total Liabilities" means, at any date, all Indebtedness
of the Company and its Subsidiaries on a Consolidated basis.
1.43. "Credit Documents" means:
(a) this Agreement, the Notes, each Letter of Credit, each draft
presented or accepted under a Letter of Credit, the Fee Letter, the
Intercreditor Agreement, the Pledge Agreement, the Security Agreement and each
Interest Rate Protection Agreement provided by a Lender (or an Affiliate of a
Lender) to the Company or any of its Subsidiaries, each as from time to time in
effect;
(b) all financial statements, reports, notices, mortgages,
assignments, UCC financing statements or certificates delivered to the Agent or
any of the Lenders 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 Agent, any Letter of Credit Issuer or all the
Lenders, on the other hand, relating to, amending or modifying this Agreement or
any other Credit Document referred to above or which is stated to be a Credit
Document, each as from time to time in effect.
1.44. "Credit Obligations" means all present and future liabilities, obligations
and Indebtedness of the Company, any of its Subsidiaries or any other Obligor
owing to the Agent or any Lender (or any Affiliate of a Lender) under or in
connection with this Agreement or any other Credit Document, including without
limitation obligations in respect of principal, interest, reimbursement
obligations under Letters of Credit and Interest Rate Protection Agreements
provided by a Lender (or an Affiliate of a Lender), commitment fees, facility
fees, Letter of Credit fees, amounts provided for in Sections 3.2.4, 3.5, 3.6,
3.7, 3.8 and 11, amounts payable under the Fee Letter and other fees, charges,
indemnities and expenses from time to time owing hereunder or under any other
Credit Document (all whether accruing before or after a Bankruptcy Default and
regardless of whether allowed as a claim in bankruptcy or similar proceedings).
Credit Obligations shall include all obligations of the Company and its
Subsidiaries owing under the Existing Credit Agreement which are not paid in
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full and finally on or prior to the Restatement Date.
1.45. "Credit Participant" is defined in Section 13.2.
1.46. "Credit Security" means 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 Agreement or any other
Credit Document) to secure the payment or performance of any of the Credit
Obligations, including the assets described in Section 10.1 and the assets
described in the Security Agreement.
1.47. "Default" means any Event of Default and any event or condition which with
the passage of time or giving of notice, or both, would become an Event of
Default, including the filing against the Company, any of its Subsidiaries or
any other Obligor of a petition commencing an involuntary case under the
Bankruptcy Code.
1.48. "Delinquency Period" is defined in Section 12.4.4.
1.49. "Delinquent Lender" is defined in Section 12.4.4.
1.50. "Delinquent Payment" is defined in Section 12.4.4.
1.51. "Distribution" means, 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 Credit Obligations;
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(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 Credit Obligations)
prior to the stated maturity thereof (excluding repayment of Financing Debt with
the proceeds of asset sales approved by the Required Lenders and scheduled
amortization of principal of Financing Debt); and
(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 Section 6.9.5, 6.9.6 or 6.9.7.
1.52. "Eligible Assignee" means any of (a) a commercial bank organized under
the laws of the United States, or any State thereof or the District of Columbia;
(b) a savings and loan association or savings bank organized under the laws of
the United States, or any State thereof or the District of Columbia; (c) a
commercial bank organized under the laws of any other country which is a member
of the Organization for Economic Cooperation and Development (the "OECD"), or a
political subdivision of any such country, provided that such bank is acting
through a branch or agency located in the country in which it is organized or
another country which is also a member of the OECD; (d) the central bank of any
country which is a member of the OECD; (e) an insurance company that is engaged
in making, purchasing or otherwise investing in commercial loans in the ordinary
course of its business; (f) an Affiliate of any entity described in clause (a),
(b), (c), (d) or (e); and (g) any Person which the Agent and the Company agree
is an Eligible Assignee; provided, however, that no entity described in clause
(a), (b), (c), (d), (e) or (f) above shall be an Eligible Assignee unless it has
total assets in excess of $1 billion and unless debt obligations issued by such
entity (or by a parent entity owning beneficially all of the capital stock of
such financial institution) are rated "A3" or higher by Moody's or "A-" or
higher by S&P.
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1.53. "Eligible Cash and Cash Equivalents" means cash and Cash Equivalents of
the Company and its Subsidiaries, which are held in restricted accounts that are
accounts "blocked" in favor of the Collateral Agent for the benefit of the
Secured Lenders, or otherwise subject to a valid, first priority, perfected Lien
in favor of the Collateral Agent for the benefit of the Secured Lenders and
under the dominion of the Collateral Agent.
1.54. "Eligible Exchange Contract Balances" means, at any date, the amount of
the balance, determined in accordance with prices set forth in the applicable
exchange contracts, based on current value on a marked-to-market basis, of any
rights of the Company and its Subsidiaries to receive petroleum products, money
or other value arising from the trading, lending, borrowing or exchange of
petroleum products with trading partners acceptable to the Agent in its sole
discretion, net of any offsets or counterclaims, and subject to a valid, first
priority, perfected Lien in favor of the Collateral Agent for the benefit of the
Secured Lenders.
1.55. "Eligible Fixed Assets" means, at any date, the total of (a) the lesser
of (i) the fair market value of or (ii) the aggregate amount shown on the books
and records of the Company in accordance with GAAP on a Consolidated basis in
respect of property, plant and equipment, net of accumulated depreciation and
amortization, minus (b) any amounts included in the foregoing clause (a) in
respect of leasehold improvements or computer software development costs, and
which property, plant and equipment meets all of the following requirements:
(a) is subject to a valid, first priority, perfected Lien in favor
of the Collateral Agent for the benefit of the Secured Lenders; provided,
however, that this requirement shall not take effect until April 1, 2000;
(b) is owned by the Company or any of its Subsidiaries free and
clear of Liens, other than Liens in favor of the Collateral Agent for the
benefit of the Secured Lenders;
(c) is physically located within the United States of America; and
(d) is otherwise satisfactory to the Agent in its sole discretion.
1.56. "Eligible Inventory" means, at any date, the lesser of (a) the fair market
value of or (b) the amounts shown on the books and records of the Company in
accordance with GAAP on a Consolidated basis in respect of all inventory of
refined petroleum products owned by the Company or any of its Subsidiaries, and
which meets all of the following requirements:
(a) is subject to a valid, first priority, perfected Lien in favor
of the Collateral Agent for the benefit of the Secured Lenders;
(b) is in good saleable condition, is not deteriorating in quality
and is not obsolete;
(c) is physically located within the United States of America;
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(d) is located at the places of business or the locations specified
in the Security Agreement, as the same may be modified or supplemented from time
to time pursuant to the Security Agreement, or at other locations owned by third
parties and approved in advance by the Agent;
(e) is owned by the Company or any of its Subsidiaries free and
clear of Liens, other than Liens in favor of the Collateral Agent for the
benefit of the Secured Lenders;
(f) has not been placed on consignment; and
(g) is otherwise satisfactory to the Agent in its sole discretion.
For the purposes of this definition, the lesser of (a) the fair market value of
or (b) the cost to the Company or any of its Subsidiaries of all inventory of
refined petroleum products contracted for by the Company or any of its
Subsidiaries as of any date of determination, solely to the extent that (i) the
suppliers of such inventory are the named beneficiaries of Letters of Credit,
(ii) such Letters of Credit were issued to support such purchases of inventory,
(iii) such inventory has not yet been delivered to or received by the Company or
any of its Subsidiaries and (iv) such inventory is not otherwise included in
Eligible Inventory, shall be included in the calculation of the amount of
Eligible Inventory. For the purposes of this definition, Eligible Exchange
Contract Balances shall be subtracted from the calculation of the amount of
Eligible Inventory.
1.57. "Eligible Margin Deposits" means the net equity of the Company or any of
its Subsidiaries in margin accounts at commodity brokers pre-approved by the
Agent and with whom the Collateral Agent and the Company and/or its Subsidiaries
have executed pledge or other agreements in form and substance satisfactory to
the Agent.
1.58. "Eligible Receivables" means, at any date, the aggregate amount (without
duplication) of: (i) all accounts receivable carried on the books of the Company
and its Subsidiaries in accordance with GAAP on a Consolidated basis arising in
the ordinary course of business, less all reserves with respect to such accounts
receivable and less any and all offsets, counterclaims or contras in respect
thereof (including the amount of any account payable (including any uninvoiced
account payable) or other liability owed by the Company or any of its
Subsidiaries to the account debtor on such account receivable, whether or not a
specific netting agreement may exist, excluding, however, any portion of any
such account payable or other liability which is at the date of determination
covered by a Letter of Credit), and (ii) uninvoiced accounts receivable arising
from deliveries during the 30-day period ending on the last Banking Day for
which calculations are provided in the most recent Borrowing Base Certificate
delivered in accordance with Section 6.4.4, in each case which accounts
receivable or uninvoiced accounts receivable meet all of the following
requirements:
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(a) are not outstanding for more than 60 days past the applicable
invoice date;
(b) constitute the valid, binding and legally enforceable
obligation of the account debtor thereon, and are not subordinate to any other
claim against such account debtor;
(c) are not evidenced by any instrument, unless such instrument has
been pledged and delivered to the Collateral Agent for the benefit of the
Secured Lenders;
(d) are owned by the Company or any of its Subsidiaries free and
clear of all Liens, other than Liens in favor of the Collateral Agent for the
benefit of the Secured Lenders;
(e) are not the subject of a return, rejection, loss of or damage
to the goods, the sale of which gave rise to the account receivable, or any
request for credit or adjustment, or any other dispute with the account debtor
on the account receivable;
(f) do not arise out of transactions with a Subsidiary or an
Affiliate;
(g) are not due from a Person located outside the United States of
America;
(h) are with respect to an account debtor on the account
receivable which is creditworthy in the judgment of the Agent;
(i) the account debtor with respect to such account receivable has
not filed a petition for relief under any existing or future law relating to
bankruptcy, insolvency, reorganization or relief of debtors, made a general
assignment for the benefit of creditors, 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, failed, suspended
business operations, become insolvent, called a meeting of its creditors for the
purpose of obtaining any financial concession or accommodation, or had or
suffered a receiver or a trustee to be appointed for all or a significant
portion of its assets or affairs;
(j) are subject to a valid, first priority, perfected Lien in
favor of the Collateral Agent for the benefit of the Secured Lenders;
(k) are not denominated in other than United States Funds or
payable outside the United States; and
(l) are otherwise satisfactory to the Agent in its sole
discretion.
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For the purposes of this definition, (a) to the extent that the aggregate of all
Eligible Receivables owing by any single account debtor and its Affiliates
exceed 25% of the amount of all Eligible Receivables (calculated excluding all
accounts receivable owing by such account debtor and its Affiliates), such
excess shall not be included in the calculation of the amount of Eligible
Receivables, unless the Company has received the prior written approval of the
Agent, (b) to the extent the Company or any of its Subsidiaries is contingently
indebted for any reason to any account debtor, the accounts receivable owing to
the Company or any of its Subsidiaries by such account debtor shall be deemed to
be subject to offset, counterclaim or contra in the amount of such indebtedness,
and (c) to the extent that the aggregate of all Eligible Receivables that are
31-60 days past the applicable invoice date exceeds 10% of the aggregate amount
of all Eligible Receivables (calculated excluding all accounts receivable that
are 31-60 days past the applicable invoice date), such excess shall not be
included in the csalculation of the amount of Eligible Receivables.
1.59. "Environmental Laws" means all applicable federal, state or local
statutes, laws, ordinances, codes, rules, regulations and guidelines (including
consent decrees and administrative orders) relating to public health and safety
and protection of the environment, including OSHA.
1.60. "ERISA" means the federal Employee Retirement Income Security Act of
1974.
1.61. "ERISA Group Person" means 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.
1.62. "Eurodollars" means, with respect to any Lender, deposits of United
States Funds in a non-United States office or an international banking facility
of such Lender.
1.63. "Eurodollar Basic Rate" means, for any Eurodollar Interest Period, the
sum of the Eurodollar Basic Reference Rates furnished by the Reference Lenders
to the Agent divided by the number of such Reference Lenders.
1.64. "Eurodollar Basic Reference Rate" means, for any Eurodollar Interest
Period and any Reference Lender, the rate of interest at which Eurodollar
deposits in an amount comparable to the Percentage Interest of such Reference
Lender in the portion of the Loan as to which a Eurodollar Pricing Option has
been elected and which have a term corresponding to such Eurodollar Interest
Period are offered to such Reference Lender by first class banks in the
inter-bank Eurodollar market for delivery in immediately available funds at a
Eurodollar Office on the first day of such Eurodollar Interest Period as
determined by such Reference Lender at approximately 10:00 a.m. (Boston time)
two Banking Days prior to the date upon which such Eurodollar Interest Period is
to commence (which determination by such Reference Lender shall, in the absence
of demonstrable error, be conclusive) and as furnished promptly thereafter by
such Reference Lender to the Agent.
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1.65. "Eurodollar Interest Period" means any period, selected as provided in
Section 3.2.1, of one, two, three or six months, commencing on any Banking Day
and ending on the corresponding date in the subsequent calendar month so
indicated (or, if such subsequent calendar month has no corresponding date, on
the last day of such subsequent calendar month); provided, however, that subject
to Section 3.2.3, if any Eurodollar Interest Period so selected would otherwise
begin or end on a date which is not a Banking Day, such Eurodollar Interest
Period shall instead begin or end, as the case may be, on the immediately
preceding or succeeding Banking Day as determined by the Agent in accordance
with the then current banking practice in the inter-bank Eurodollar market with
respect to Eurodollar deposits at the applicable Eurodollar Office, which
determination by the Agent shall, in the absence of demonstrable error, be
conclusive.
1.66. "Eurodollar Office" means such non-United States office or international
banking facility of any Lender as such Lender may from time to time select.
1.67. "Eurodollar Pricing Options" means the options granted pursuant to
Section 3.2.1 to have the interest on any portion of the Loan computed on the
basis of a Eurodollar Rate.
1.68. "Eurodollar Rate" for any Eurodollar Interest Period means the rate,
rounded upward to the nearest one thousandth of one percent, obtained by
dividing (a) the Eurodollar Basic Rate for such Eurodollar Interest Period by
(b) an amount equal to 1 minus the Eurodollar Reserve Rate; provided, however,
that if at any time during such Eurodollar Interest Period the Eurodollar
Reserve Rate applicable to any outstanding Eurodollar Pricing Option changes,
the Eurodollar Rate for such Eurodollar Interest Period shall automatically be
adjusted to reflect such change.
1.69. "Eurodollar Reserve Rate" means the stated maximum rate (expressed as a
decimal) of all reserves (including any basic, supplemental, marginal or
emergency reserve or any reserve asset), if any, as from time to time in effect,
required by any Legal Requirement to be maintained by any Lender against (a)
"Eurocurrency liabilities" as specified in Regulation D of the Board of
Governors of the Federal Reserve System applicable to Eurodollar Pricing
Options, (b) any other category of liabilities that includes Eurodollar deposits
by reference to which the interest rate on portions of the Loan subject to
Eurodollar Pricing Options is determined, (c) the principal amount of or
interest on any portion of the Loan subject to a Eurodollar Pricing Option or
(d) any other category of extensions of credit, or other assets, that includes
loans subject to a Eurodollar Pricing Option by a non-United States office of
any of the Lenders to United States residents, in each case without the benefits
of credits for prorations, expenses or offsets that may be available to a
Lender.
1.70. "Event of Default" is defined in Section 8.1.
1.71. "Exchange Act" means the federal Securities Exchange Act of 1934.
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1.72. "Existing Credit Agreement" is defined in the Recitals to this
Agreement.
1.73. "FACA" means the Federal Assignment of Claims Act as set forth in 31
U.S.C.ss.3727 and 41 U.S.C.ss.15.
1.74. "Federal Funds Rate" means, for any day, the rate equal to the weighted
average (rounded upward to the nearest 1/8%) of (a) the rates on overnight
federal funds transactions with members of the Federal Reserve System arranged
by federal funds brokers, as such weighted average is published for such day
(or, if such day is not a Banking Day, for the immediately preceding Banking
Day) by the Federal Reserve Bank of New York or (b) if such rate is not so
published for such Banking Day, as determined by the Agent using any reasonable
means of determination. Each determination by the Agent of the Federal Funds
Rate shall, in the absence of demonstrable error, be conclusive.
1.75. "Fee Letter" is defined in Section 5.1.3.
1.76. "Final Maturity Date" means December 31, 2003.
1.77. "Final Term Loan Maturity Date" means June 30, 2006.
1.78. "Financial Officer" of the Company (or other specified Person) means 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 Agent by the secretary or other
appropriate attesting officer of the Company (or such specified Person).
1.79. "Financing Debt" means 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.
1.80. "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.
1.81. "Funded Debt" means 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.
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1.82. "Funding Liability" means (a) any Eurodollar deposit which was used (or
deemed by Section 3.2.6 to have been used) to fund any portion of the Loan
subject to a Eurodollar Pricing Option, and (b) any portion of the Loan subject
to a Eurodollar Pricing Option funded (or deemed by Section 3.2.6 to have been
funded) with the proceeds of any such Eurodollar deposit.
1.83. "GAAP" means generally accepted accounting principles as from time to
time in effect, including the statements and interpretations of the United
States Financial Accounting Standards Board and any predecessor or successor
entity.
1.84. "Guarantee" means, 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 endorsements for
collection or deposit in the ordinary course of business. The amount of any
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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).
1.85. "Guarantor" means each Subsidiary listed on the signature page hereto
or which subsequently becomes party to this Agreement as a Guarantor.
1.86. "Hazardous Material" means 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.
1.87. "Indebtedness" means 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;
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(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.
1.88. "Indemnified Party" is defined in Section 11.2.
1.89. "Intercreditor Agreement" means the Intercreditor Agreement dated as of
April 17, 1997, as from time to time in effect, among the Company, the
Guarantors, the Lenders, the Agent and Prudential.
1.90. "Interest Rate Protection Agreement" means 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.
1.91. "Investment" means, 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.
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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);
(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.
1.92. "ISP" is defined in Section 2.4.7.
1.93. "Lead Arranger" means FleetBoston Robertson Stephens Inc., a Delaware
corporation.
1.94. "Legal Requirement" means any present or future requirement imposed upon
any of the Lenders or 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 jurisdiction in which any Eurodollar Office is located 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 in which any Eurodollar Office is located or where
the Company or any of its Subsidiaries owns property or conducts its business,
or any political subdivision of any of the foregoing. Any such requirement
imposed on any of the Lenders not having the force of law shall be deemed to be
a Legal Requirement if such Lender reasonably believes that compliance therewith
is in the best interest of such Lender.
1.95. "Lender" means each of the Persons listed as lenders on the signature
page hereto, including BankBoston in its capacity as a Lender and such other
Persons who may from time to time own a Percentage Interest in the Credit
Obligations, but the term "Lender" shall not include any Credit Participant in
such capacity.
1.96. "Lending Officer" means such individuals whom the Agent may designate
by notice to the Company from time to time as an officer or employee who may
receive telephone requests for extensions of credit under Sections 2.1.3 and
2.2.2.
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1.97. "Letter of Credit" is defined in Section 2.4.1.
1.98. "Letter of Credit Exposure" means, at any date, the sum of (a) the
aggregate face amount of all drafts that may then or thereafter be presented by
beneficiaries under all Letters of Credit then outstanding, plus (b) the
aggregate face amount of all drafts that the Letter of Credit Issuer has
previously accepted under Letters of Credit but has not paid.
1.99. "Letter of Credit Fee Rate" means on any date an amount equal to the
Applicable Margin applicable to any portion of the Revolving Loan subject to a
Eurodollar Pricing Option.
1.100. "Letter of Credit Issuer" means, for any Letter of Credit, BankBoston
or, in the event BankBoston does not for any reason issue a requested Letter of
Credit, another Lender designated by the Agent to issue such Letter of Credit in
accordance with Section 2.4.
1.101. "Lien" means, 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) 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.
1.102. "Loan" means the aggregate outstanding amount of the Revolving Loan,
Swingline Loan and Term Loan, as applicable.
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1.103. "Loan Account" means each Revolving Loan Account, Swingline Loan
Account and Term Loan Account, as applicable.
1.104. "Mandatory Borrowing" is defined in Section 2.2.4.
1.105. "Margin Stock" means "margin stock" within the meaning of Regulations T,
U or X of the Board of Governors of the Federal Reserve System.
1.106. "Master Shelf Agreement" is defined in Section 6.6.12.
1.107. "Material Adverse Change" means, 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.
1.108. "Material Adverse Effect" means (i) a materially adverse effect on the
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 Credit
Documents, or (iii) material impairment of the rights of or benefits available
to the Lenders under this Agreement or any of the other Credit Documents.
1.109. "Material Agreements" is defined in Section 7.2.2.
1.110. "Maximum Amount of Revolving Credit" is defined in Section 2.1.2.
1.111. "Minimum Petroleum Products Inventory Requirements" means, 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.
1.112. "Moody's" means Moody's Investors Service, Inc.
1.113. "Multiemployer Plan" means any Plan that is a "multiemployer plan" as
defined in section 4001(a)(3) of ERISA.
1.114. "Nonperforming Lender" is defined in Section 12.4.4.
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1.115. "Notes" means the Revolving Notes, Swingline Notes and the Term Notes,
as applicable.
1.116. "Obligor" means the Company, each Guarantor and each Person
guaranteeing, providing collateral for or subordinating obligations to, the
Credit Obligations.
1.117. "Open Position" means 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.
1.118. "OSHA" means the federal Occupational Safety and Health Act.
1.119. "Overdue Rate" is defined in Section 3.1.
1.120. "Paid but Unexpired Letters of Credit" means the aggregate maximum
drawing amount on all Letters of Credit issued pursuant to Section 2.4, minus
the initial aggregate amount of the underlying obligations with respect to such
Letters of Credit, plus the aggregate amount paid by the Company or any of its
Subsidiaries with respect to such underlying obligations.
1.121. "Payment Date" means (a) the last Banking Day of each calendar month
occurring after the Restatement Date and (b) the Final Maturity Date.
1.122. "PBGC" means the Pension Benefit Guaranty Corporation or any successor
entity.
1.123. "Percentage Interest" means (a) at all times when no Event of Default
under Section 8.1.1 and no Bankruptcy Defaults exists, the ratio that the
respective Commitments of the Lenders bear to the total Commitments of all
Lenders as from time to time in effect and reflected in the Register, and (b) at
all other times, the ratio that the respective amounts of the outstanding Credit
Obligations owing to the Lenders in respect of extensions of credit under
Section 2 to the total outstanding Credit Obligations owing to all Lenders.
1.124. "Performing Lender" is defined in Section 12.4.4.
1.125. "Person" means any present or future natural person or any corporation,
association, partnership, joint venture, limited liability, joint stock or other
company, business trust, trust, organization, business or government or any
governmental agency or political subdivision thereof.
1.126. "PIK Interest" means 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
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Debt; provided, however, that in no event shall PIK Interest include payments
made with cash or Cash Equivalents.
1.127. "Plan" means, at any date, any pension benefit plan subject to Title IV
of ERISA maintained, or to which contributions have been made or are required to
be made, by any ERISA Group Person within six years prior to such date.
1.128. "Pledge Agreement" means the Pledge Agreement dated as of April 17,
1997, as from time to time in effect, among the Company, the Guarantors and the
Agent, as collateral agent.
1.129. "Pledged Indebtedness" is defined in Section 10.1.3.
1.130. "Pledged Rights" is defined in Section 10.1.2.
1.131. "Pledged Securities" means the Pledged Stock, the Pledged Rights and
the Pledged Indebtedness, collectively.
1.132. "Pledged Stock" is defined in Section 10.1.1.
1.133. "Prudential" is defined in Section 6.6.12.
1.134. "RCRA" means the federal Resource Conservation and Recovery Act, 42
U.S.C.ss.690, et seq.
1.135. "Reference Lender" means BankBoston.
1.136. "Register" is defined in Section 13.1.3.
1.137. "Replacement Lender" is defined in Section 13.3.
1.138. "Required Lenders" means, with respect to any approval, consent,
modification, waiver or other action to be taken by the Agent or the Lenders
under the Credit Documents which require action by the Required Lenders, such
Lenders as own at least 66 _% of the Percentage Interests (other than Delinquent
Lenders during the existence of a Delinquency Period so long as such Delinquent
Lender is treated the same as the other Lenders with respect to any actions
being taken by the Required Lenders); provided, however, that with respect to
any matters referred to in paragraph (b) of the proviso to Section 12.6,
Required Lenders means such Lenders as own at least the portion of the
Percentage Interests required by such paragraph (b). This definition of
"Required Lenders" may be amended or modified only in accordance with Section
12.6(d).
1.139. "Restatement Date" means February 14, 2000 or such later date as may be
agreed to by the Company and the Agent and on which all conditions to closing in
Section 5 have been satisfied.
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1.140. "Revolving Loan" is defined in Section 2.1.4.
1.141. "Revolving Loan Account" is defined in Section 2.1.4.
1.142. "Revolving Loan Percentage Interest" means the percentage interest of
each Lender in the Commitments relating to the Revolving Loan.
1.143. "Revolving Notes" is defined in Section 2.1.4.
1.144. "Secured Lenders" means the Lenders from time to time party to this
Agreement and the holders from time to time of senior notes of the Company
issued pursuant to the Master Shelf Agreement.
1.145. "Securities Act" means the federal Securities Act of 1933.
1.146. "Security Agreement" means the Security Agreement dated as of January
13, 2000, as from time to time in effect, among the Company, the Guarantors, the
Agent, Prudential, BankBoston, N.A., as Collateral Agent, and BankBoston.
1.147. "Series A Convertible Preferred Stock" means 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.
1.148. "S&P" means Standard & Poor's, a division of The McGraw-Hill Companies,
Inc.
1.149. "Subordinated Debentures" is defined in Section 6.6.10.
1.150. "Subordinated Debentures Agreement" is defined in Section 7.2.2.
1.151. "Subordinated Debentures Guarantee" is defined in Section 6.7.5.
1.152. "Subsidiary" means 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.
1.153. "Swingline Lender" means BankBoston, in its capacity as swingline
lender hereunder.
1.154. "Swingline Loan" is defined in Section 2.2.3.
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1.155. "Swingline Loan Account" is defined in Section 2.2.3.
1.156. "Swingline Note" is defined in Section 2.2.3.
1.157. "Swingline Rate" means the rate equal to the sum of (a) the Federal
Funds Rate plus the Applicable Margin, plus (b) an additional 2% per annum
effective on the day the Agent notifies the Company that the interest rates
hereunder are increasing as a result of the occurrence and continuance of an
Event of Default until the earlier of such time as (i) such Event of Default is
no longer continuing or (ii) such Event of Default is deemed no longer to exist,
in each case pursuant to Section 8.3.
1.158. "Tax" means any present or future tax, levy, duty, impost, deduction,
withholding or other charges of whatever nature at any time required by any
Legal Requirement (a) to be paid by any Lender or (b) to be withheld or deducted
from any payment otherwise required hereby to be made to any Lender, in each
case on or with respect to its obligations hereunder, the Loan, any payment in
respect of the Credit Obligations or any Funding Liability not included in the
foregoing; provided, however, that the term "Tax" shall not include any
franchise tax or taxes imposed upon or measured by the gross or net income of
such Lender (or withholding taxes with respect to such taxes).
1.159. "Term Loan" is defined in Section 2.3.1.
1.160. "Term Loan Account" is defined in Section 2.3.2.
1.161. "Term Loan Percentage Interest" means the percentage interest of each
Lender in the Commitments relating to the Term Loan.
1.162. "Term Note" is defined in Section 2.3.2.
1.163. "UCC" means the Uniform Commercial Code as in effect in Massachusetts
on the date hereof; provided, however, that with respect to the perfection of
the Agent's Lien in the Credit Security and the effect of nonperfection thereof,
the term "UCC" means the Uniform Commercial Code as in effect in any
jurisdiction the laws of which are made applicable by Section 9-103 of the
Uniform Commercial Code as in effect in Massachusetts.
1.164. "UCP" is defined in Section 2.4.7.
1.165. "United States Funds" means such coin or currency of the United States
of America as at the time shall be legal tender therein for the payment of
public and private debts.
1.166. "Wholly Owned Subsidiary" means 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.
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2. The Credits.
2.1. Revolving Credit.
2.1.1. Revolving Loan. Subject to all the terms and conditions of this
Agreement and so long as no Default exists, from time to time on and after the
Restatement Date and prior to the Final Maturity Date, the Lenders will,
severally in accordance with their respective Revolving Loan Percentage
Interests, make loans to the Company in such amounts as may be requested by the
Company in accordance with Section 2.1.3. The sum of the aggregate principal
amount of loans made under this Section 2.1.1 at any one time outstanding plus
the Swingline Loan plus the Letter of Credit Exposure shall in no event exceed
the lesser of (a) the Borrowing Base or (b) the Maximum Amount of Revolving
Credit. In no event will the principal amount of loans at any one time
outstanding made by any Lender pursuant to this Section 2.1 exceed such Lender's
Commitment with respect to the Revolving Loan.
2.1.2. Maximum Amount of Revolving Credit. The term "Maximum Amount of
Revolving Credit" means the lesser of (a) $300,000,000 or (b) the amount (in an
integral multiple of $1,000,000 equal to or greater than $10,000,000) to which
the then applicable amount set forth in clause (a) shall have been irrevocably
reduced from time to time by notice from the Company to the Agent.
2.1.3. Borrowing Requests. The Company may from time to time request a loan
under Section 2.1.1 by providing to the Agent a notice (which may be given by a
telephone call received by a Lending Officer if promptly confirmed in writing).
Such notice must be received by the Agent not later than 2:00 p.m. (Boston time)
on the same Banking Day as the requested Closing Date for such loan (third
Banking Day prior to the requested Closing Date of such loan if any portion of
such loan will be subject to a Eurodollar Pricing Option on the requested
Closing Date). The notice must specify (a) the amount of the requested loan
(which shall be not less than $500,000 and an integral multiple of $100,000) and
(b) the requested Closing Date therefor (which shall be a Banking Day). Upon
receipt of such notice, the Agent will promptly inform each other Lender (by
telephone or otherwise). Each such loan will be made at the Boston Office by
depositing the amount thereof to the general account of the Company with the
Agent. In connection with each such loan, the Company shall furnish to the Agent
a certificate in substantially the form of Exhibit 5.2.1.
2.1.4. Revolving Loan Account; Revolving Notes. The Agent will establish on its
books a loan account for the Company (the "Revolving Loan Account") which the
Agent shall administer as follows: (a) the Agent shall add to the Revolving Loan
Account, and the Revolving Loan Account shall evidence, the principal amount of
all loans from time to time made by the Lenders to the Company pursuant to
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Section 2.1.1 and (b) the Agent shall reduce the Revolving Loan Account by the
amount of all payments made on account of the Indebtedness evidenced by the
Revolving Loan Account. The aggregate principal amount of the Indebtedness
evidenced by the Revolving Loan Account is referred to as the "Revolving Loan".
The Revolving Loan shall be deemed owed to each Lender severally in accordance
with such Lender's Revolving Loan Percentage Interest, and all payments credited
to the Revolving Loan Account shall be for the account of each Lender in
accordance with its Revolving Loan Percentage Interest. The Company's
obligations to pay each Lender's Revolving Loan Percentage Interest in the
Revolving Loan shall be evidenced by a separate note of the Company in
substantially the form of Exhibit 2.1.4 (the "Revolving Notes"), payable to each
Lender in maximum principal amount equal to such Lender's Revolving Loan
Percentage Interest in the Revolving Loan.
2.2. Swingline Credit.
2.2.1. Swingline Loan. Subject to all the terms and conditions of this
Agreement and so long as no Default exists, from time to time on and after the
Restatement Date and prior to the Final Maturity Date, the Swingline Lender will
make loans to the Company in such amounts as may be requested by the Company in
accordance with Section 2.2.2. The sum of the aggregate principal amount of
loans made under this Section 2.2 at any one time outstanding plus the Revolving
Loan plus the Letter of Credit Exposure shall in no event exceed the lesser of
(a) the Borrowing Base or (b) the Maximum Amount of Revolving Credit. In no
event will the principal amount of loans made pursuant to this Section 2.2 at
any one time outstanding exceed $20,000,000.
2.2.2. Borrowing Requests. The Company may from time to time request a loan
under Section 2.2.1 by providing to the Swingline Lender a notice (which may be
given by a telephone call received by a Lending Officer). Such notice must be
not later than 2:00 p.m. (Boston time) on the requested Closing Date (which must
be a Banking Day) for such loan. Each such loan will be made at the Boston
Office by depositing the amount thereof to the general account of the Company
with the Swingline Lender. In connection with each such loan, if the Swingline
Lender shall so request, the Company shall furnish to the Swingline Lender a
certificate in substantially the form of Exhibit 5.2.1.
2.2.3. Swingline Loan Account; Swingline Notes. The Swingline Lender will
establish on its books a loan account for the Company (the "Swingline Loan
Account") which the Swingline Lender shall administer as follows: (a) the
Swingline Lender shall add to the Swingline Loan Account, and the Swingline Loan
Account shall evidence, the principal amount of all loans from time to time made
by the Swingline Lender to the Company pursuant to Section 2.2.1 and (b) the
Swingline Lender shall reduce the Swingline Loan Account by the amount of all
payments made on account of the Indebtedness evidenced by the Swingline Loan
Account. The aggregate principal amount of the Indebtedness evidenced by the
Swingline Loan Account is referred to as the "Swingline Loan". The Company's
obligation to pay the Swingline Loan shall be evidenced by a note of the Company
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in substantially the form of Exhibit 2.2.3 (the "Swingline Note"), payable to
the Swingline Lender in maximum principal amount equal to the Swingline Loan.
2.2.4. Conversion of Swingline Loan into Revolving Loan. On any Banking Day
after the occurrence and during the continuance of an Event of Default, the
Swingline Lender may, in its sole discretion, give notice to the other Lenders
and the Company that the Swingline Loan shall be paid in full with a mandatory
borrowing under the Revolving Loan (the "Mandatory Borrowing"). Such a notice of
a Mandatory Borrowing shall be deemed to have been automatically given upon a
Bankruptcy Default or upon the exercise of any of the remedies provided in
Section 8.2. Upon the giving of any such notice or deemed notice, a Mandatory
Borrowing under the Revolving Loan in the amount of the Swingline Loan shall be
made on the next Banking Day from all Lenders in accordance with their
respective Revolving Loan Percentage Interests in the Revolving Loan, and the
proceeds thereof shall be applied to the Swingline Lender as a repayment of the
Swingline Loan. Each Lender irrevocably agrees to make such loan pursuant to
each such Mandatory Borrowing notice in the amount and in the manner specified
above in this Section 2.2.4, notwithstanding (a) whether any conditions
specified in Section 5 have been satisfied, (b) that a Default or an Event of
Default has occurred and is continuing or (c) the date of such Mandatory
Borrowing. In the event that any Mandatory Borrowing cannot for any reason be
made on the date required above (including as a result of the commencement of a
proceeding under the Bankruptcy Code), each Lender shall promptly purchase from
the Swingline Lender as of the date the Mandatory Borrowing otherwise would have
occurred such participation in the Swingline Loan as shall be necessary to cause
the Lenders to share in the Swingline Loan ratably based upon their respective
Revolving Loan Percentage Interests in the Revolving Loan. In the event of such
participations, all interest payable on the Swingline Loan shall be for the
account of the Swingline Lender until the date on which the participations are
required to be purchased and, to the extent attributable to the purchased
participations, shall be payable to the participants from and after such date.
At the time any such purchase of participations is actually made, the purchasing
Lender shall pay the Swingline Lender interest on the principal amount of the
participation purchased at the overnight Federal Funds Rate for each day,
commencing with the date the Mandatory Borrowing otherwise would have occurred,
to the date of payment for such participation.
2.3. Term Credit.
2.3.1. Term Loan. On June 30, 1999, the Lenders severally loaned to the Company
as a term loan, in accordance with their respective Commitments to make the Term
Loan, an aggregate amount of $200,000,000. On January 20, 2000, the Company
prepaid $105,000,000 in principal amount of such term loan. The aggregate
principal amount of such term loan at any one time outstanding is referred to as
the "Term Loan".
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2.3.2. Term Loan Account; Term Notes. The Agent will maintain on its books a
loan account for the Company (the "Term Loan Account") which the Agent shall
administer as follows: (a) the Agent shall record and the Term Loan Account
shall evidence, the principal amount of the term loan made by the Lenders to the
Company and (b) the Agent shall reduce the Term Loan Account by the amount of
all payments made on account of the Indebtedness evidenced by the Term Loan
Account. The Agent shall keep a record of the respective interests of the
Lenders in the Term Loan Account as part of the Register, which shall evidence
the Term Loan. The Term Loan shall be deemed owed to each Lender severally in
accordance with such Lender's Term Loan Percentage Interest therein, and all
payments thereon shall be for the account of each Lender in accordance with its
Term Loan Percentage Interest therein. Upon written request of any Lender, the
Company's obligations to pay such Lender's Term Loan Percentage Interest in the
Term Loan shall be further evidenced by a separate note of the Company in
substantially the form of Exhibit 2.3.2 (the "Term Notes"), payable to such
Lender in accordance with such Lender's Term Loan Percentage Interest in the
Term Loan.
2.4. Letters of Credit.
2.4.1. Issuance of Letters of Credit. Subject to all the terms and conditions
of this Agreement and so long as no Default exists, from time to time on and
after the Restatement Date and prior to the date 90 Banking Days preceding the
Final Maturity Date, the Letter of Credit Issuer will issue for the account of
the Company or, if the Company shall so direct, for the account of any Guarantor
one or more irrevocable documentary or standby letters of credit (the "Letters
of Credit"); provided, that the sum of the Letter of Credit Exposure plus the
Revolving Loan plus the Swingline Loan shall in no event exceed the lesser of
(a) the Borrowing Base or (b) the Maximum Amount of Revolving Credit; and,
provided, further, that all letters of credit issued pursuant to Section 2.4.1
of the Existing Credit Agreement that are outstanding on the Restatement Date
shall be continued and treated in all respects from and after the Restatement
Date as Letters of Credit issued under this Section 2.4.1. 1.1.1.
2.4.2. Requests for Letters of Credit. The Company may from time to time
request a Letter of Credit to be issued by providing to the Letter of Credit
Issuer (and the Agent if the Letter of Credit Issuer is not the Agent) a notice
which is actually received not less than two Banking Days prior to the requested
Closing Date for such Letter of Credit specifying (a) the amount of the
requested Letter of Credit, (b) the beneficiary thereof, (c) the requested
Closing Date and (d) the principal terms of the text for such Letter of Credit.
Each Letter of Credit will be issued by forwarding it to the Company or to such
other Person as directed in writing by the Company, with a copy to the Company.
In connection with the issuance of any Letter of Credit, the Company shall
furnish to the Letter of Credit Issuer (and the Agent if the Letter of Credit
Issuer is not the Agent) a certificate in substantially the form of Exhibit
5.2.1 and any customary application forms required by the Letter of Credit
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Issuer. In the event of an inconsistency between such application form and this
Agreement, this Agreement shall govern.
2.4.3. Form and Expiration of Letters of Credit. Each Letter of Credit issued
under this Section 2.4 and each draft accepted or paid under such a Letter of
Credit shall be issued, accepted or paid, as the case may be, by the Letter of
Credit Issuer at its principal office. No Letter of Credit shall provide for the
payment of drafts drawn thereunder, and no draft shall be payable, at a date
which is later than the earlier of (a) the date 90 days after the date of
issuance (364 days after the date of issuance in the case of Letters of Credit
to be used to secure performance bonds of the Company or any of its
Subsidiaries) or (b) the Final Maturity Date. Each Letter of Credit and each
draft accepted under a Letter of Credit shall be in such form as is generally
acceptable in the petroleum industry, shall be in such amount as the Letter of
Credit Issuer and the Company may agree upon at the time such Letter of Credit
is issued and shall include a requirement of not less than three Banking Days
after presentation of a draft before payment must be made thereunder.
2.4.4. Lenders' Participation in Letters of Credit. Upon the issuance of any
Letter of Credit, a participation therein, in an amount equal to each Lender's
Revolving Loan Percentage Interest, shall automatically be deemed granted by the
Letter of Credit Issuer to each such Lender on the date of such issuance and
such Lenders shall automatically be obligated, as set forth in Section 12.4, to
reimburse the Letter of Credit Issuer to the extent of their respective
Revolving Loan Percentage Interests for all obligations incurred by the Letter
of Credit Issuer to third parties in respect of such Letter of Credit not
reimbursed by the Company. The Letter of Credit Issuer will send to each Lender
(and the Agent if the Letter of Credit Issuer is not the Agent) a confirmation
regarding the participations in Letters of Credit outstanding during such month.
2.4.5. Presentation. The Letter of Credit Issuer may accept or pay any draft
presented to it, regardless of when drawn and whether or not negotiated, if such
draft, the other required documents and any transmittal advice are presented to
the Letter of Credit Issuer and dated on or before the expiration date of the
Letter of Credit under which such draft is drawn. Except insofar as instructions
actually received may be given by the Company in writing expressly to the
contrary with regard to, and prior to, the Letter of Credit Issuer's issuance of
any Letter of Credit for the account of the Company and such contrary
instructions are reflected in such Letter of Credit, the Letter of Credit Issuer
may honor as complying with the terms of the Letter of Credit and with this
Agreement any drafts or other documents otherwise in order signed or issued by
an administrator, executor, conservator, trustee in bankruptcy, debtor in
possession, assignee for benefit of creditors, liquidator, receiver or other
legal representative of the party authorized under such Letter of Credit to draw
or issue such drafts or other documents. Within two Banking Days following the
presentation of a draft under any Letter of Credit, the Letter of Credit Issuer
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shall give notice thereof to the Company, which notice shall be accompanied by
copies of the draft and all documents presented therewith.
2.4.6. Payment of Drafts. At such time as a Letter of Credit Issuer makes any
payment on a draft presented or accepted under a Letter of Credit, the Company
will on demand pay to such Letter of Credit Issuer in immediately available
funds the amount of such payment. Unless the Company shall otherwise pay to the
Letter of Credit Issuer the amount required by the foregoing sentence, any such
amount paid prior to the Final Maturity Date shall be considered a loan under
Section 2.1.1 and part of the Revolving Loan. So long as no Default shall exist
or be created thereby, the addition of such amount to the Revolving Loan
pursuant to the preceding sentence shall constitute payment for the purposes of
this Section 2.4.6.
2.4.7. UCP; ISP. As to any Letter of Credit that is a documentary letter of
credit, the most recent Uniform Customs and Practice for Documentary Credits
adopted by a Congress of the International Chamber of Commerce and adhered to by
the Letter of Credit Issuer (the "UCP"), shall be binding on the Company and the
Letter of Credit Issuer except to the extent otherwise provided herein, in any
Letter of Credit or in any other Credit Document. As to any Letter of Credit
that is a standby letter of credit, the most recent International Standby
Practices adopted by a Congress of the International Chamber of Commerce, and
any subsequent revisions thereof approved by a Congress of the International
Chamber of Commerce and adhered to by the Letter of Credit Issuer (the "ISP"),
shall be binding on the Company and the Letter of Credit Issuer except to the
extent otherwise provided herein, in any Letter of Credit or in any other Credit
Document. Without limiting the foregoing, in the event of an unexpected closure
of the Letter of Credit Issuer Letter of Credit draws may be made up to only two
Banking Days after the reopening of the Letter of Credit Issuer rather than the
30 day period provided in Rule 3.14(a) of the ISP. Anything in the UCP or the
ISP to the contrary notwithstanding:
(a) Neither the Company nor any beneficiary of any Letter of Credit
shall be deemed an agent of any Letter of Credit Issuer.
(b) With respect to each Letter of Credit, neither the Letter of
Credit Issuer nor its correspondents shall be responsible for or shall have any
duty to ascertain:
(i) the genuineness of any signature;
(ii) the validity, form, sufficiency, accuracy, genuineness
or legal effect of any endorsements;
(iii) delay in giving, or failure to give, notice of arrival,
notice of refusal of documents or of discrepancies in respect of which any
Letter of Credit Issuer refuses the documents or any other notice, demand or
protest;
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(iv) the performance by any beneficiary under any Letter of
Credit of such beneficiary's obligations to the Company;
(v) inaccuracy in any notice received by the Letter of
Credit Issuer;
(vi) the validity, form, sufficiency, accuracy, genuineness
or legal effect of any instrument, draft, certificate or other document required
by such Letter of Credit to be presented before payment of a draft, or the
office held by or the authority of any Person signing any of the same; or
(vii) failure of any instrument to bear any reference or
adequate reference to such Letter of Credit, or failure of any Person to note
the amount of any instrument on the reverse of such Letter of Credit or to
surrender such Letter of Credit or to forward documents in the manner required
by such Letter of Credit.
(viii) Except insofar as a particular Letter of Credit
contains express, contrary instructions, the Letter of Credit Issuer may honor
as complying with the terms of any Letter of Credit and with this Agreement any
drafts or other documents otherwise in order signed or issued by an
administrator, executor, conservator, trustee in bankruptcy, debtor in
possession, assignee for benefit of creditors, liquidator, receiver or other
legal representative of the party authorized under such Letter of Credit to draw
or issue such drafts or other documents.
(c) The occurrence of any of the events referred to in the UCP or
the ISP or in the preceding clauses of this Section 2.4.7 shall not affect or
prevent the vesting of any of the Letter of Credit Issuer's rights or powers
hereunder or the Company's obligation to make reimbursement (whether by cash
payment or refinancing with proceeds of the Revolving Loan) of amounts paid
under any Letter of Credit or any draft accepted thereunder.
(d) Upon receipt, the Company will promptly examine (i) each Letter
of Credit (and any amendments thereof) sent to it by the Letter of Credit Issuer
and (ii) all instruments and documents delivered to it from time to time by the
Letter of Credit Issuer. The Company will notify the Letter of Credit Issuer of
any claim of noncompliance by notice actually received within 36 hours
(excluding hours included in non-Banking Days) after receipt of any of the
foregoing documents, the Company being conclusively deemed to have waived any
such claim against such Letter of Credit Issuer and its correspondents unless
such notice is given.
(e) In the event of any conflict between the provisions of this
Agreement and either the UCP or the ISP, the provisions of this Agreement shall
govern.
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2.4.8. Subrogation. Upon any payment by a Letter of Credit Issuer under any
Letter of Credit and until the reimbursement of such Letter of Credit Issuer by
the Company with respect to such payment as provided in Section 2.4.6, the
Letter of Credit Issuer shall be entitled to be subrogated to, and to acquire
and retain, the rights which the Person to whom such payment is made may have
against the Company, all for the benefit of the Lenders. The Company will take
such action as the Letter of Credit Issuer may reasonably request, including
requesting the beneficiary of any Letter of Credit to execute such documents as
the Letter of Credit Issuer may reasonably request, to assure and confirm to the
Letter of Credit Issuer such subrogation and such rights, including the rights,
if any, of the beneficiary to whom such payment is made in accounts receivable,
inventory and other properties and assets of any Obligor.
2.4.9. Modification, Consent, etc. If the Company requests or consents in
writing to any modification or extension of any Letter of Credit, or waives in
writing any failure of any draft, certificate or other document to comply with
the terms of such Letter of Credit, and if the Letter of Credit Issuer consents
thereto, the Letter of Credit Issuer shall be entitled to rely on such request,
consent or waiver. This Agreement shall be binding upon the Company with respect
to such Letter of Credit as so modified or extended, and with respect to any
action taken or omitted by such Letter of Credit Issuer pursuant to any such
request, consent or waiver.
2.5. Application of Proceeds.
2.5.1. Revolving Loan. Subject to Section 2.5.6 and the other provisions of
this Agreement, the Company will apply the proceeds of the Revolving Loan for
working capital and other lawful corporate purposes of the Company and its
Subsidiaries.
2.5.2. Swingline Loan. Subject to Section 2.5.6 and the other provisions of
this Agreement, the Company will apply the proceeds of the Swingline Loan for
working capital and other lawful corporate purposes of the Company and its
Subsidiaries.
2.5.3. Term Loan. Subject to Section 2.5.6 and the other provisions of this
Agreement, the Company will apply the proceeds of the Term Loan for working
capital and other lawful corporate purposes of the Company and its Subsidiaries.
2.5.4. [Intentionally Omitted].
2.5.5. Letters of Credit. Subject to Section 2.5.6 and the other provisions
of this Agreement, Letters of Credit shall be issued only for such lawful
corporate purposes as the Company has requested in writing.
2.5.6. Specifically Prohibited Applications. The Company will not, directly or
indirectly, apply any part of the proceeds of any extension of credit made
pursuant to the Credit Documents to purchase or to carry Margin Stock or to any
transaction prohibited by the Foreign Trade Regulations, by other Legal
Requirements applicable to the Lenders or by the Credit Documents.
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2.6. Nature of Obligations of Lenders to Make Extensions of Credit. The
Lenders' obligations to extend credit under this Agreement are several and are
not joint or joint and several. Notwithstanding the foregoing, the obligation to
make a Swingline Loan shall be an obligation solely of the Swingline Lender. If
on any Closing Date any Lender shall fail to perform its obligations under this
Agreement, the aggregate amount of Commitments to make the extensions of credit
under this Agreement shall be reduced by the amount of unborrowed Commitment of
the Lender so failing to perform and the Percentage Interests, Revolving Loan
Percentage Interests and Term Loan Percentage Interests shall be appropriately
adjusted. Lenders that have not failed to perform their obligations to make the
extensions of credit contemplated by Section 2 may, if any such Lender so
desires, assume, in such proportions as such Lenders may agree, the obligations
of any Lender who has so failed and the Percentage Interests, Revolving Loan
Percentage Interests and Term Loan Percentage Interests shall be appropriately
adjusted. The provisions of this Section 2.6 shall not affect the rights of the
Company against any Lender failing to perform its obligations hereunder.
3. Interest; Eurodollar Pricing Options; Fees.
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3.1. Interest. The Revolving Loan and the Term Loan shall accrue and bear
interest at a rate per annum which shall at all times equal the Applicable Rate.
Prior to any stated or accelerated maturity of the Revolving Loan and the Term
Loan, the Company will, on each Payment Date, pay the accrued and unpaid
interest on the portion of the Loan which was not subject to a Eurodollar
Pricing Option. On the last day of each Eurodollar Interest Period or on any
earlier termination of any Eurodollar Pricing Option, the Company will pay the
accrued and unpaid interest on the portion of the Loan which was subject to the
Eurodollar Pricing Option which expired or terminated on such date. In the case
of any Eurodollar Interest Period longer than three months, the Company will
also pay the accrued and unpaid interest on the portion of the Revolving Loan
and the Term Loan, respectively, subject to the Eurodollar Pricing Option having
such Eurodollar Interest Period at three-month intervals, the first such payment
to be made on the last Banking Day of the three-month period which begins on the
first day of such Eurodollar Interest Period. On the stated or any accelerated
maturity of the Revolving Loan or the Term Loan, the Company will pay all
accrued and unpaid interest on the Revolving Loan or the Term Loan, as the case
may be, including any accrued and unpaid interest on any portion of the
Revolving Loan or the Term Loan, as the case may be, which is subject to a
Eurodollar Pricing Option. The Swingline Loan shall accrue and bear interest at
a rate per annum which shall at all times equal the Swingline Rate. Interest on
the Swingline Loan shall be calculated on a daily basis and on the basis of a
year of 360 days. Prior to any stated or accelerated maturity of the Swingline
Loan, the Company will on each Wednesday, beginning on the first Wednesday after
the Restatement Date, pay the accrued and unpaid interest, if any, on such
Indebtedness. On any stated or accelerated maturity of the Swingline Loan all
accrued and unpaid interest thereon shall be forthwith due and payable. All
payments of interest hereunder in respect of the Swingline Loan shall be made by
the Company to the Agent for the account of the Swingline Lender. In addition,
the Company will on demand pay interest on any overdue installments of principal
and, to the extent not prohibited by applicable law, on any overdue installments
of interest, fees and any other overdue amounts owed under any Credit Document
at a rate per annum equal to the sum of 2% plus the highest Applicable Rate then
in effect or at a rate per annum equal to the sum of 2% plus the Swingline Rate
then in effect in the case of overdue installments of principal and interest
with respect to a Swingline Loan (the "Overdue Rate"). Upon the occurrence and
during the continuance of an Event of Default, the Required Lenders may require
accrued interest to be payable on demand or at regular intervals more frequent
than each Payment Date. All payments of interest hereunder shall be made to the
Agent for the account of each Lender in accordance with such Lender's Revolving
Loan Percentage Interest or Term Loan Percentage Interest, as the case may be.
3.2. Eurodollar Pricing Options.
3.2.1. Election of Eurodollar Pricing Options. Subject to all of the terms and
conditions hereof and so long as no Default exists, the Company may from time to
time, by irrevocable notice to the Agent actually received by noon (Boston time)
not less than three Banking Days prior to the commencement of the Eurodollar
Interest Period selected in such notice, elect to have such portion of the Loan
(excluding the Swingline Loan) as the Company may specify in such notice accrue
and bear interest during the Eurodollar Interest Period so selected at the
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Applicable Rate computed on the basis of the Eurodollar Rate. In the event the
Company at any time does not elect a Eurodollar Pricing Option under this
Section 3.2.1 for any portion of the Loan (upon termination of a Eurodollar
Pricing Option or otherwise), then such portion of the Loan will accrue and bear
interest at the Applicable Rate based on the Base Rate. No such election shall
become effective:
(a)......if, prior to the commencement of any such Eurodollar Interest
Period, the Agent determines that (i) the electing or granting of the Eurodollar
Pricing Option in question would violate a Legal Requirement, (ii) Eurodollar
deposits in an amount comparable to the principal amount of the Loan as to which
such Eurodollar Pricing Option has been elected and which have a term
corresponding to the proposed Eurodollar Interest Period are not readily
available in the inter-bank Eurodollar market, or (iii) by reason of
circumstances affecting the inter-bank Eurodollar market, adequate and
reasonable methods do not exist for ascertaining the interest rate applicable to
such deposits for the proposed Eurodollar Interest Period; or
(b)......if any Lender shall have advised the Agent by telephone or
otherwise at or prior to noon (Boston time) on the second Banking Day prior to
the commencement of such proposed Eurodollar Interest Period (and shall have
subsequently confirmed in writing) that, after reasonable efforts to determine
the availability of such Eurodollar deposits, such Lender reasonably anticipates
that Eurodollar deposits in an amount equal to the Revolving Loan Percentage
Interest or Term Loan Percentage Interest, as the case may be, of such Lender in
the portion of the Loan as to which such Eurodollar Pricing Option has been
elected and which have a term corresponding to the Eurodollar Interest Period in
question will not be offered in the Eurodollar market to such Lender.
3.2.2. Notice to Lenders and Company. The Agent will promptly inform each
Lender (by telephone or otherwise) of each notice received by it from the
Company pursuant to Section 3.2.1 and of the Eurodollar Interest Period
specified in such notice. Upon determination by the Agent of the Eurodollar Rate
for such Eurodollar Interest Period or in the event such election shall not
become effective, the Agent will promptly notify the Company and each Lender (by
telephone or otherwise) of the Eurodollar Rate so determined or why such
election did not become effective, as the case may be.
3.2.3. Selection of Eurodollar Interest Periods. Eurodollar Interest Periods
shall be selected so that:
(a) the minimum portion of the Loan subject to any Eurodollar
Pricing Option shall be $1,000,000 and an integral multiple of $500,000;
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(b) no more than ten Eurodollar Pricing Options shall be
outstanding at any one time;
(c) no Eurodollar Interest Period with respect to any part of the
Revolving Loan subject to a Eurodollar Pricing Option shall expire later than
the Final Maturity Date; and
(d) no Eurodollar Interest Period with respect to any part of the
Term Loan subject to a Eurodollar Pricing Option shall expire later than the
Final Term Loan Maturity Date.
3.2.4. Additional Interest. If any portion of the Loan subject to a Eurodollar
Pricing Option is repaid, or any Eurodollar Pricing Option is terminated for any
reason (including without limitation any requirement hereunder that all or a
portion of the Loan be prepaid or any acceleration of the maturity of the Loan),
on a date which is prior to the last Banking Day of the Eurodollar Interest
Period applicable to such Eurodollar Pricing Option, the Company will pay to the
Agent for the account of each Lender in accordance with such Lender's Revolving
Loan Percentage Interest or Term Loan Percentage Interest, as the case may be,
in addition to any amounts of interest otherwise payable hereunder, an amount
equal to the present value (calculated in accordance with this Section 3.2.4) of
interest for the unexpired portion of such Eurodollar Interest Period on the
portion of the Loan so repaid, or as to which a Eurodollar Pricing Option was so
terminated, at a per annum rate equal to the excess, if any, of (a) the rate
applicable to such Eurodollar Pricing Option minus (b) the lowest rate of
interest obtainable by the Agent upon the purchase of debt securities
customarily issued by the Treasury of the United States of America which have a
maturity date approximating the last Banking Day of such Eurodollar Interest
Period. The present value of such additional interest shall be calculated by
discounting the amount of such interest for each day in the unexpired portion of
such Eurodollar Interest Period from such day to the date of such repayment or
termination at a per annum interest rate equal to the interest rate determined
pursuant to clause (b) of the preceding sentence, and by adding all such amounts
for all such days during such period. The determination by the Agent of such
amount of interest shall, in the absence of demonstrable error, be conclusive.
For purposes of this Section 3.2.4, if any portion of the Loan which was to have
been subject to a Eurodollar Pricing Option is not outstanding on the first day
of the Eurodollar Interest Period applicable to such Eurodollar Pricing Option
other than for reasons described in Section 3.2.1, the Company shall be deemed
to have terminated such Eurodollar Pricing Option.
3.2.5. Violation of Legal Requirements. If any Legal Requirement shall prevent
any Lender from funding or maintaining through the purchase of deposits in the
interbank Eurodollar market any portion of the Loan subject to a Eurodollar
Pricing Option or otherwise from giving effect to such Lender's obligations as
contemplated by Section 3.2, (a) the Agent may by notice to the Company
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describing such Legal Requirement terminate all of the affected Eurodollar
Pricing Options, (b) the portion of the Loan subject to such terminated
Eurodollar Pricing Options shall immediately bear interest thereafter at the
Applicable Rate computed on the basis of the Base Rate and (c) the Company shall
make any payment required by Section 3.2.4.
3.2.6. Funding Procedure. The Lenders may fund any portion of the Loan subject
to a Eurodollar Pricing Option out of any funds available to the Lenders.
Regardless of the source of the funds actually used by any of the Lenders to
fund any portion of the Loan subject to a Eurodollar Pricing Option, however,
all amounts payable hereunder, including the interest rate applicable to any
such portion of the Loan and the amounts payable under Sections 3.2.4, 3.5, 3.6,
3.7 and 3.8, shall be computed as if each Lender had actually funded such
Lender's Revolving Loan Percentage Interest or Term Loan Percentage Interest, as
the case may be, in such portion of the Loan through the purchase of deposits in
such amount of the type by which the Eurodollar Basic Rate was determined with a
maturity the same as the applicable Eurodollar Interest Period relating thereto
and through the transfer of such deposits from an office of the Lender having
the same location as the applicable Eurodollar Office to one of such Lender's
offices in the United States of America.
3.3. Commitment Fees. In consideration of the Lenders' commitments to make
the extensions of credit provided for in Section 2, while such commitments are
outstanding, the Company will pay to the Agent for the account of the Lenders in
accordance with the Lenders' respective Revolving Loan Percentage Interests, on
each Payment Date and on the Final Maturity Date, an amount equal to interest
computed at the rate of .375% per annum on the amount by which (a) the daily
Maximum Amount of Revolving Credit during the quarter or portion thereof ending
on such Payment Date or, as the case may be, the Final Maturity Date, exceeded
(b) the sum of (i) the daily Revolving Loan during such period or portion
thereof plus (ii) the daily Letter of Credit Exposure during such period or
portion thereof; provided, however, that the first such payment shall be for the
period beginning on the Restatement Date and ending on the first Payment Date.
3.4. Letter of Credit Fees. The Company will pay to the Agent for the
account of each of the Lenders, in accordance with the Lenders' respective
Revolving Loan Percentage Interests, on each Payment Date and on the Final
Maturity Date, a Letter of Credit fee equal to interest at a rate per annum
equal to the Letter of Credit Fee Rate on the average daily Letter of Credit
Exposure during the quarter or portion thereof ending on such Payment Date or,
as the case may be, the Final Maturity Date; provided, that if any Letter of
Credit or any extension of a Letter of Credit would produce a fee hereunder that
is less than $250 during the term of such Letter of Credit or extension, the fee
owing to the Lenders hereunder with respect to such Letter of Credit or
extension shall be $250. The Company also will pay to the Letter of Credit
Issuer (i) on the date of issuance of each Letter of Credit an issuance fee of
$150 with respect to such Letter of Credit, (ii) on each Payment Date and on the
Final Maturity Date, an additional Letter of Credit fee equal to interest at the
rate of one-eighth of one percent (1/8%) per annum on the average daily Letter
of Credit Exposure during the quarter or portion thereof ending on such Payment
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Date or, as the case may be, the Final Maturity Date and (iii) as invoiced,
other customary service charges and expenses for the services of the Letter of
Credit Issuer in connection with the Letters of Credit at the times and in the
amounts from time to time in effect in accordance with its general rate
structure, including fees and expenses relating to issuance, amendment,
negotiation, cancellation and similar operations.
3.5. Reserve Requirements, etc. If any Legal Requirement shall (a) impose,
modify, increase or deem applicable any insurance assessment, reserve, special
deposit or similar requirement against any Funding Liability or the Letters of
Credit, (b) impose, modify, increase or deem applicable any other requirement or
condition with respect to any Funding Liability or the Letters of Credit, or (c)
change the basis of taxation of Funding Liabilities or payments in respect of
any Letter of Credit (other than changes in the rate of taxes measured by the
overall net income of such Lender) and the effect of any of the foregoing shall
be to increase the cost to any Lender of issuing, making, funding or maintaining
its respective Revolving Loan Percentage Interest or Term Loan Percentage
Interest, as the case may be, in any portion of the Loan subject to a Eurodollar
Pricing Option or any Letter of Credit, to reduce the amounts received or
receivable by such Lender under this Agreement or to require such Lender to make
any payment or forego any amounts otherwise payable to such Lender under this
Agreement, then, within 15 days after the receipt by the Company of a
certificate from such Lender setting forth why it is claiming compensation under
this Section 3.5 and computations (in reasonable detail) of the amount thereof,
the Company shall pay to the Agent for the account of such Lender such
additional amounts as are specified by such Lender in such certificate as
sufficient to compensate such Lender for such increased cost or such reduction,
together with interest at the Overdue Rate on such amount from the 15th day
after receipt of such certificate until payment in full thereof; provided,
however, that the foregoing provisions shall not apply to any Tax or to any
reserves which are included in computing the Eurodollar Reserve Rate. The
determination by such Lender of the amount of such costs shall, in the absence
of demonstrable error, be conclusive. The Company shall be entitled to replace
any such Lender in accordance with Section 13.3.
3.6. Taxes. All payments of the Credit Obligations shall be made without
set-off or counterclaim and free and clear of any deductions, including
deductions for Taxes, unless the Company is required by law to make such
deductions. If (a) any Lender shall be subject to any Tax with respect to any
payment of the Credit Obligations or its obligations hereunder or (b) the
Company shall be required to withhold or deduct any Tax on any payment on the
Credit Obligations, within 15 days after the receipt by the Company of a
certificate from such Lender setting forth why it is claiming compensation under
this Section 3.6 and computations (in reasonable detail) of the amount thereof,
the Company shall pay to the Agent for such Lender's account such additional
amount as is necessary to enable such Lender to receive the amount of Tax so
imposed on the Lender's obligations hereunder or the full amount of all payments
which it would have received on the Credit Obligations (including amounts
required to be paid under Sections 3.5, 3.7, 3.8 and this Section 3.6) in the
absence of such Tax, as the case may be, together with interest at the Overdue
Rate on such amount from the 15th day after receipt of such certificate until
payment in full thereof. Whenever Taxes must be withheld by the Company with
respect to any payments of the Credit Obligations, the Company shall promptly
furnish to the Agent for the account of the applicable Lender official receipts
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(to the extent that the relevant governmental authority delivers such receipts)
evidencing payment of any such Taxes so withheld. If the Company fails to pay
any such Taxes when due or fails to remit to the Agent for the account of the
applicable Lender the required receipts evidencing payment of any such Taxes so
withheld or deducted, the Company shall indemnify the affected Lender for any
incremental Taxes and interest or penalties that may become payable by such
Lender as a result of any such failure. The determination by such Lender of the
amount of such Tax and the basis therefor shall, in the absence of demonstrable
error, be conclusive. The Company shall be entitled to replace any such Lender
in accordance with Section 13.3.
3.7. Capital Adequacy. If any Lender shall determine that compliance by such
Lender with any Legal Requirement regarding capital adequacy of banks or bank
holding companies has or would have the effect of reducing the rate of return on
such Lender's capital as a consequence of such Lender's commitment to make the
extensions of credit contemplated hereby, or such Lender's maintenance of the
extensions of credit contemplated hereby, to a level below that which such
Lender could have achieved but for such compliance (taking into consideration
such Lender's policies with respect to capital adequacy immediately before such
compliance and assuming that such Lender's capital was fully utilized prior to
such compliance) by an amount deemed by such Lender to be material, then, within
15 days after the receipt by the Company of a certificate from such Lender
setting forth why it is claiming compensation under this Section 3.7 and
computations (in reasonable detail) of the amount thereof, the Company shall pay
to the Agent for the account of such Lender such additional amounts as shall be
sufficient to compensate such Lender for such reduced return, together with
interest at the Overdue Rate on each such amount from the 15th day after receipt
of such certificate until payment in full thereof. The determination by such
Lender of the amount to be paid to it and the basis for computation thereof
shall, in the absence of demonstrable error, be conclusive. In determining such
amount, such Lender may use any reasonable averaging, allocation and attribution
methods. The Company shall be entitled to replace any such Lender in accordance
with Section 13.3.
3.8. Regulatory Changes. If any Lender shall determine that (a) any change in
any Legal Requirement (including any new Legal Requirement) after the date
hereof shall directly or indirectly (i) reduce the amount of any sum received or
receivable by such Lender with respect to the Loan or the Letters of Credit or
the return to be earned by such Lender on the Loan or the Letters of Credit,
(ii) impose a cost on such Lender or any Affiliate of such Lender that is
attributable to the making or maintaining of, or such Lender's commitment to
make, its portion of the Loan or the Letters of Credit, or (iii) require such
Lender or any Affiliate of such Lender to make any payment on, or calculated by
reference to, the gross amount of any amount received by such Lender under any
Credit Document, and (b) such reduction, increased cost or payment shall not be
fully compensated for by an adjustment in the Applicable Rate or the Letter of
Credit fees, then, within 15 days after the receipt by the Company of a
certificate from such Lender setting forth why it is claiming compensation under
this Section 3.8 and computations (in reasonable detail) of the amount thereof,
the Company shall pay to such Lender such additional amounts as such Lender
determines will, together with any adjustment in the Applicable Rate, fully
compensate for such reduction, increased cost or payment, together with interest
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on such amount from the 15th day after receipt of such certificate until payment
in full thereof at the Overdue Rate. The determination by such Lender of the
amount to be paid to it and the basis for computation thereof hereunder shall,
in the absence of demonstrable error, be conclusive. In determining such amount,
such Lender may use any reasonable averaging and attribution methods. The
Company shall be entitled to replace any such Lender in accordance with Section
13.3.
3.9. Computations of Interest and Fees. For purposes of this Agreement,
interest, commitment fees and Letter of Credit fees (and any other amount
expressed as interest or such fees) shall be computed on the basis of a 360-day
year for actual days elapsed. If any payment required by this Agreement becomes
due on any day that is not a Banking Day, such payment shall, except as
otherwise provided in the definition of "Eurodollar Interest Period", be made on
the next succeeding Banking Day. If the due date for any payment of principal is
extended as a result of the immediately preceding sentence, interest shall be
payable for the time during which payment is extended at the Applicable Rate or,
in the case of principal of the Swingline Loan, at the Swingline Rate.
4. Payment.
4.1. Payment at Maturity. In the case of the Revolving Loan and the Swingline
Loan, on the Final Maturity Date, and in the case of the Term Loan, on the Final
Term Loan Maturity Date, and on any accelerated maturity of the Loan, the
Company will pay to the Agent for the account of the Lenders an amount equal to
the Loan then due, together with all accrued and unpaid interest thereon and all
other Credit Obligations then outstanding.
4.2. Contingent Required Prepayments.
4.2.1. Excess Credit Exposure. If at any time the sum of the Revolving Loan
plus the Swingline Loan plus the Letter of Credit Exposure exceeds the lesser of
(a) the Borrowing Base or (b) the Maximum Amount of Revolving Credit, the
Company will within three Banking Days pay the amount of such excess to the
Swingline Lender as a prepayment of the Swingline Loan. If after prepayment of
the Swingline Loan there is any such excess amount remaining, the Company will
immediately pay the amount of such excess to the Agent as a prepayment of the
Revolving Loan. If after prepayment of the Revolving Loan there is any such
excess amount still remaining, the Company will deposit with the Agent an amount
of cash equal to such excess to collateralize outstanding Letters of Credit. If
at any time the Swingline Loan exceeds $20,000,000, the Company will within
three Banking Days pay the amount of such excess to the Swingline Lender.
4.2.2. Letter of Credit Exposure. If at any time the Letter of Credit Exposure
exceeds the limits set forth in Section 2.4, the Company will promptly pay the
amount of such excess to the Agent for the account of the Lenders to be applied
as provided in Section 4.6.
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4.3. Scheduled Required Prepayments. On the Payment Date in March, June,
September and December set forth below (both dates inclusive), the Company will
pay to the Agent as a prepayment of the Term Loan the lesser of (a) the amount
set forth below for such month or (b) the amount of the Term Loan then
outstanding.
Payment Dates in March,
June, September and December Amount
September 2000 through June 2004 $593,750
September 2004 through June 2005 $7,125,000
September 2005 through June 2006 $14,250,000
4.4. [Intentionally Omitted].
4.5. Voluntary Prepayments. In addition to the prepayments required by
Sections 4.2 and 4.3, the Company may from time to time prepay all or any
portion of the Revolving Loan or Term Loan (in a minimum amount of $1,000,000
and an integral multiple of $100,000). Any such prepayments of the Revolving
Loan shall be without premium or penalty of any type (except as provided in
Section 3.2.4 with respect to the early termination of Eurodollar Pricing
Options). Any such prepayments of the Term Loan shall be accompanied by the
payment of any additional interest required by Section 3.2.4 with respect to any
early termination of Eurodollar Pricing Options and, with respect to any such
prepayment of the Term Loan made prior to April 1, 2001, by the payment of a
prepayment premium in an amount determined as follows: (i) if such prepayment
occurs on or before March 31, 2000, a premium equal to one-half of one percent
(0.50%) of the principal amount prepaid and (ii) if such prepayment occurs after
March 31, 2000 and on or before March 31, 2001, a premium equal to one-quarter
of one percent (0.25%) of the principal amount prepaid. The Company shall give
the Agent at least three Banking Days prior notice of its intention to prepay,
specifying the date of payment, the total amount of the Revolving Loan or Term
Loan to be paid on such date and the amount of interest to be paid with such
prepayment. At any time or from time to time upon telephone notice to the
Swingline Lender, given not later than 3:00 p.m. (Boston time) on any Banking
Day, the Company shall have the right to prepay, without premium or penalty of
any type, all or any part of the outstanding principal amount of its Swingline
Loan in such amounts as are not less than $100,000 and in integral multiples of
$50,000, unless such payment is equal to the entire outstanding principal amount
of the Swingline Loan.
4.6. Letters of Credit. If on the stated or any accelerated maturity of the
Credit Obligations the Lenders shall be obligated in respect of a Letter of
Credit or a draft accepted under a Letter of Credit, the Company will either:
(1) prepay such obligation by depositing with the Agent an amount
of cash, or
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(2) deliver to the Agent a standby letter of credit (designating the
Agent as beneficiary and issued by a bank and on terms reasonably acceptable to
the Agent),
in each case in an amount equal to the portion of the then Letter of Credit
Exposure issued for the account of the Company. Any such cash so deposited and
the cash proceeds of any draw under any standby letter of credit so furnished,
including any interest thereon, shall be returned by the Agent to the Company
only when, and to the extent that, the amount of such cash held by the Agent
exceeds the Letter of Credit Exposure at a time when no Default exists;
provided, however, that if an Event of Default occurs and the Credit Obligations
become or are declared immediately due and payable, the Agent may apply such
cash, including any interest thereon, to the payment of any of the Credit
Obligations as provided in Section 10.5.6.
4.7. Reborrowing; Application of Payments, etc.
4.7.1. Reborrowing. The amounts of the Revolving Loan prepaid pursuant to
Section 4.2.1 or 4.5 may be reborrowed from time to time prior to the Final
Maturity Date in accordance with Section 2.1, subject to the limits set forth
therein. The amounts of the Swingline Loan prepaid pursuant to Section 4.2.1 or
4.5 may be reborrowed from time to time prior to the Final Maturity Date in
accordance with Section 2.2, subject to the limits set forth therein. No amount
of the Term Loan that is repaid may be reborrowed hereunder.
4.7.2. Order of Application. Any prepayment of the Revolving Loan or the Term
Loan shall be applied first to the portion thereof not then subject to
Eurodollar Pricing Options, then the balance of any such prepayment shall be
applied to the portion thereof then subject to Eurodollar Pricing Options, in
the chronological order of the respective maturities thereof, together with any
payments required by Section 3.2.4.
4.7.3. Payment with Accrued Interest, etc. Upon all prepayments of the Term
Loan, the Company shall pay to the Agent the principal amount to be prepaid,
together with unpaid interest in respect thereof accrued to the date of
prepayment, any additional interest with respect thereto under Section 3.2.4 and
any prepayment premium owing with respect thereto under Section 4.5. Notice of
prepayment having been given in accordance with Section 4.5, and whether or not
notice is given of prepayments pursuant to Section 4.2 the amount specified to
be prepaid shall become due and payable on the date specified for prepayment.
4.7.4. Payments for Lenders. All payments of principal hereunder shall be made
to the Agent for the account of the Lenders in accordance with the Lenders'
respective Revolving Loan Percentage Interests or Term Loan Percentage
Interests, as the case may be.
5. Conditions to Extending Credit.
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5.1. Conditions on Restatement Date. The obligations of the Lenders to make
any extension of credit pursuant to Section 2 shall be subject to the
satisfaction, on or before the Restatement Date, of the conditions set forth in
this Section 5.1 as well as the further conditions in Section 5.2. If the
conditions set forth in this Section 5.1 are not met on or prior to the
Restatement Date, the Lenders shall have no obligation to make any extensions of
credit hereunder.
5.1.1. Notes. The Company shall have duly executed and delivered to the Agent a
Revolving Note and a Term Note for each Lender committing to the Revolving Loan
and the Term Loan, respectively, and a Swingline Note for the Swingline Lender.
5.1.2. 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 the Agent may
have requested in order to perfect the Liens purported or required pursuant to
the Credit Documents to be created in the Credit Security. All Liens securing
amounts owing under the Existing Credit Agreement shall remain in effect as part
of the Credit Security.
5.1.3. Payment of Fees. The Company shall have paid all fees required to be
paid on or prior to the Restatement Date pursuant to the separate agreement
dated February 3, 2000 among the Company and BankBoston (the "Fee Letter") and
the Company shall have paid to the Agent the fees and disbursements of the
Agent's special counsel and other costs and expenses of the Agent for which
statements have been rendered on or prior to the Restatement Date. The Company
shall have paid to the Agent for the benefit of the Lenders a fee equal to
0.125% of the aggregate Commitments of the Lenders, to be distributed pro rata
among the Lenders in accordance with their respective aggregate Commitments to
the total aggregate Commitments of the Lenders.
5.1.4. Legal Opinions. On the Restatement Date, the Lenders shall have received
from the following counsel their respective opinions with respect to the
transactions contemplated by the Credit Documents, which opinions shall be in
form and substance satisfactory to the Required Lenders:
(1) Erik B. Carlson, general counsel of the Company and its
Subsidiaries.
(2) Jennifer J. May, associate counsel of certain Subsidiaries of
the Company.
(3) Ropes & Gray, special counsel for the Agent.
Each of the Company and its Subsidiaries authorizes and directs its
counsel to furnish the foregoing opinions.
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5.1.5. Prudential Consent. Prudential and each other holder of Indebtedness
issued under the Master Shelf Agreement shall have consented, to the extent
required under the Master Shelf Agreement and the Intercreditor Agreement, to
the modifications of the Existing Credit Agreement effected hereby, the terms
and conditions of such consent to be satisfactory to the Required Lenders, and
shall have acknowledged that the Intercreditor Agreement remains in full force
and effect; and the covenants of the Company set forth in the Master Shelf
Agreement shall have been amended to reflect the covenant modifications of the
Existing Credit Agreement made herein.
5.1.6. No Material Adverse Change. There shall have been no Material Adverse
Change in the Company since December 31, 1999.
5.1.7. No Order, Injunction or Litigation. There has been no order, injunction
or other pending litigation, which in the sole judgment of the Agent, causes a
reasonable possibility of a decision which could materially adversely affect the
ability of the Company or its Subsidiaries to perform under the Credit Documents
or affect the Agent's rights under the Credit Documents or its ability to
exercise such rights.
5.1.8. Adverse Market Change. Since December 31, 1999 no material adverse
change shall have occurred in the syndication markets for credit facilities
similar in nature to this Agreement and no material disruption of or material
adverse change in the financial, banking or capital markets that would have an
adverse effect on such syndication market shall have occurred, in each case as
determined by the Agent and the Lead Arranger in their sole discretion.
5.1.9. Compliance Certificate. The Company shall have furnished to the Lenders
a certificate, signed by a Financial Officer of the Company, 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 Term Loan and the Indebtedness referred to in Section 6.6.12 on January
20, 2000.
5.1.10. Initial Borrowing Base Certificate. The Company shall have furnished to
the Lenders a Borrowing Base Certificate, signed by a Financial Officer of the
Company, containing a calculation of the Borrowing Base as of February 4, 2000.
5.2. Conditions to Each Extension of Credit. The obligations of the Lenders
to make any extension of credit pursuant to Section 2 (which, for the avoidance
of any doubt, shall not include any pricing election under Section 3.2.2 with
respect to any portion of the Loan that is already outstanding) shall be subject
to the satisfaction, on or before the Closing Date for such extension of credit,
of the following conditions:
5.2.1. Officer's Certificate. The representations and warranties contained in
Sections 7 and 10.3 shall be true and correct on and as of such Closing Date
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with the same force and effect as though made on and as of such date (except as
to any representation or warranty which refers to a specific earlier date);
provided, that the information contained in Exhibits 7.1, 7.3 and 7.15 shall be
correct as most recently supplemented, including any supplements thereto noted
in the certificate provided under this Section 5.2.1; no Default shall exist on
such Closing Date prior to or immediately after giving effect to the requested
extension of credit; no Material Adverse Change shall have occurred since
December 31, 1999 and be continuing on such Closing Date; and the Company shall
have furnished to the Agent in connection with the requested extension of credit
a certificate to these effects, in substantially the form of Exhibit 5.2.1,
signed by a Financial Officer.
5.2.2. Proper Proceedings. This Agreement, each other Credit Document and the
transactions contemplated hereby and thereby shall have been authorized by all
necessary corporate or other proceedings. All necessary consents, approvals and
authorizations of any governmental or administrative agency or any other Person
of any of the transactions contemplated hereby or by any other Credit Document
shall have been obtained and shall be in full force and effect.
5.2.3. Legality, etc. The making of the requested extension of credit shall not
(a) subject any Lender to any penalty or special tax (other than a Tax for which
the Company is required to reimburse the Lenders under Section 3.6), (b) be
prohibited by any Legal Requirement or (c) violate any credit restraint program
of the executive branch of the government of the United States of America, the
Board of Governors of the Federal Reserve System or any other governmental or
administrative agency so long as any Lender reasonably believes that compliance
therewith is in the best interests of such Lender.
5.2.4. General. All legal and corporate proceedings in connection with the
transactions contemplated by this Agreement shall be satisfactory in form and
substance to the Agent; and the Agent shall have received copies of all
documents, including certified copies of the Charter and By-Laws of the Company
and the other Obligors, records of corporate proceedings, certificates as to
signatures and incumbency of officers and opinions of counsel, which the Agent
may have reasonably requested in connection therewith, such documents where
appropriate to be certified by proper corporate or governmental authorities.
6. General Covenants. Each of the Company and the Guarantors covenants
that, until all of the Credit Obligations shall have been paid in full and until
the Lenders' commitments to extend credit under this Agreement and any other
Credit Document shall have been irrevocably terminated, the Company and its
Subsidiaries will comply with the following provisions:
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6.1. Taxes and Other Charges; Accounts Payable.
6.1.1. Taxes and Other Charges. Each of the Company and its Subsidiaries shall
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 each of the Company and its Subsidiaries shall 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).
6.1.2. Accounts Payable. Each of the Company and its Subsidiaries shall
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 Section
6.1.1; 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.
6.2. Conduct of Business, etc.
6.2.1. Types of Business. The Company and its Subsidiaries shall engage
principally in the business 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 any fiscal year of the Company shall not exceed 10%
of the Consolidated gross revenues of the Company and its Subsidiaries.
6.2.2. Maintenance of Properties. Each of the Company and its Subsidiaries:
(a) shall 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)
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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
(b) shall 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 Section
6.2.2(b) shall not prevent the merger, consolidation or liquidation of
Subsidiaries permitted by Section 6.11.
6.2.3. Statutory Compliance. Each of the Company and its Subsidiaries shall
comply in all material respects with all valid Legal Requirements applicable to
it, except where (a) compliance therewith shall at the time be contested in good
faith by appropriate proceedings and (b) 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.
6.2.4. Compliance with Material Agreements. Each of the Company and its
Subsidiaries shall 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 Credit Document). Without the prior written consent of the Required
Lenders, 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 Lenders; provided, without limitation of the foregoing, that
any modification of the Master Shelf 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 shall require the prior written consent of the Required
Lenders.
6.2.5. Trading Policy. The Company and its Subsidiaries will 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 Lenders acknowledge that the policy
described in the Risk Management Policies Manual dated February 11, 2000 of the
Company, a full copy of which is attached to this Agreement as Exhibit 6.2.5,
represents such a policy.
6.2.6. Subordinated Debentures. The Company shall do all things necessary to
assure that the Loan and all of the Credit Obligations be and remain "Superior
Indebtedness" within the meaning of Section 9(a) of the Subordinated Debentures
Agreement.
6.2.7. Inventory Accounting. The Company and its Subsidiaries shall account for
substantially all of their inventory on the basis of the "mark to market"
method.
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6.2.8. Inactive Subsidiaries. Notwithstanding anything to the contrary in this
Agreement, neither the Company nor any of its Subsidiaries shall make an
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 Agent.
6.3. Insurance.
6.3.1. 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.
6.3.2. Property Insurance. Each of the Company and its Subsidiaries shall 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.
6.3.3. Liability Insurance. Each of the Company and its Subsidiaries shall
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;
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.
6.3.4. 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 Credit Security and which is (i) in an area determined by the Director of
the Federal Emergency Management Agency to be subject to special flood hazard
and (ii) 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.
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6.4. Financial Statements and Reports. Each of the Company and its
Subsidiaries shall 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. 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.
6.4.1. Annual Reports. The Company shall furnish to the Lenders 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
Required Lenders), 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 exists and in particular that they have no knowledge of
any Default under Sections 6.5 through 6.20 or, if such is not the case,
specifying such 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 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.
(d) Computations by the Company in the form set forth in Exhibit
6.4.1 hereto demonstrating, as of the end of such fiscal year, compliance with
the Computation Covenants, certified by a Financial Officer. In the event of an
inconsistency between Exhibit 6.4.1 and this Agreement, this Agreement shall
govern.
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(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 Exhibits 7.1, 7.3 and 7.15 showing any changes
in the information set forth in such Exhibits not previously furnished to the
Lenders 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 Agent.
(g) A certificate of the Company signed by a Financial Officer
specifying the Minimum Petroleum Products Inventory Requirements of the Company
and its Subsidiaries on a Consolidated basis as of the last day of such fiscal
year.
6.4.2. Quarterly Reports. The Company shall furnish to the Lenders 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 (if such Consolidating schedules are requested by the Agent or the
Required Lenders) and, in the case of Consolidated statements, comparative
figures for the same period 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 Exhibit
6.4.1 hereto demonstrating, as of the end of such quarter, compliance with the
Computation Covenants, certified by a Financial Officer. In the event of an
inconsistency between Exhibit 6.4.1 and this Agreement, this Agreement shall
govern.
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(d) Supplements to Exhibits 7.1, 7.3 and 7.15 showing any changes in
the information set forth in such Exhibits not previously furnished to the
Lenders 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 Agent.
(e) A certificate of the Company signed by a Financial Officer
specifying the 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.
6.4.3. Monthly Reports. The Company shall furnish to the Lenders 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 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. The Company shall also furnish to the Lenders 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
Agent.
6.4.4. Other Reports. The Company shall promptly furnish to the Lenders:
(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
Section 7.2.1 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 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.
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(f) Any 90-day 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 Section
6.6.12, 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 Section 6.2.5.
(i) As soon as available and, in any event within two (2) Banking Days
after the end of each week, or within two (2) Banking Days following any request
by the Agent, a certificate in substantially the form of Exhibit 6.4.4 hereto
(the "Borrowing Base Certificate") signed by a Financial Officer of the Company
supplying computations of the Borrowing Base as of the last Banking Day of such
week. In the event of an inconsistency between Exhibit 6.4.4 and this Agreement,
this Agreement shall govern. Such Borrowing Base Certificate shall be
accompanied by such supporting documentation as the Agent may reasonably
request, including but not limited to: (i) a summary of all Loans and Letters of
Credit issued and outstanding and (ii) a summary of accounts receivable of the
Company and its Subsidiaries.
(j) As soon as available and, in any event within two (2) Banking Days
after the end of each week, or within two (2) Banking Days following any request
by the Agent, a certificate signed by a Financial Officer of the Company
summarizing Open Positions of the Company and its Subsidiaries as of the last
Banking Day of such week, in form and substance satisfactory to the Agent.
6.4.5. Notice of Litigation. The Company shall promptly furnish to the Lenders
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.
6.4.6. Notice of Defaults. Promptly upon acquiring knowledge thereof, the
Company shall notify the Lenders of the existence of any 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.
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6.4.7. ERISA Reports. The Company shall furnish to the Lenders 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,
(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.
6.4.8. [Intentionally Omitted].
6.4.9. Other Information; Audit. From time to time at reasonable intervals upon
request of the Agent or the Required Lenders, each of the Company and its
Subsidiaries shall furnish to the Lenders 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. The authorized officers and
representatives of the Agent shall have the right during normal business hours
upon reasonable notice and at reasonable intervals to examine the books and
records of the Company and its Subsidiaries, to make copies and notes therefrom
for the purpose of ascertaining compliance with or obtaining enforcement of this
Agreement or any other Credit Document. The Agent, upon reasonable advance
notice, may at the expense of the Company undertake to have the Company and its
Subsidiaries reviewed by the Agent's commercial financial examiners and fixed
asset appraisers.
6.4.10. Notice of Material Impairment to Accounts Receivable. The Company shall
immediately notify the Agent if any account receivable that is included in
Eligible Receivables 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
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creditors for the purpose of obtaining any financial concession or
accommodation, or has or suffers a receiver or a trustee to be appointed for all
or a significant portion of its assets or affairs.
6.5. Certain Financial Tests.
6.5.1. Fixed Charge Coverage. For the fiscal 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 shall
equal or exceed 100%. 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 shall equal or exceed 100%. 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 shall equal or exceed 110%. 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 shall equal or exceed the percentage specified in the table below:
Four Quarter Period Ending Percentage
December 31, 2000 120%
March 31, 2001 200%
June 30, 2001 225%
September 30, 2001 250%
and thereafter
For each fiscal quarter of the Company, the ratio (expressed as a percentage) of
the Consolidated EDITDA of the Company and its Subsidiaries for such fiscal
quarter to Consolidated Fixed Charges of the Company and its Subsidiaries for
such fiscal quarter must equal or exceed 100%.
6.5.2. Consolidated Tangible Net Worth. The Consolidated Tangible Net Worth of
the Company and its Subsidiaries shall exceed $295,000,000 at all times;
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 Section 6.5.2 (including any prior increases of such
amount as provided in 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
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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.
6.5.3. Maximum Leverage. The ratio (expressed as a percentage) of the
Consolidated Total Liabilities of the Company and its Subsidiaries to the
Consolidated Tangible Net Worth of the Company and its Subsidiaries shall not
exceed 275% at any time.
6.5.4. Minimum Current Ratio. The ratio (expressed as a percentage) of the
Consolidated Current Assets of the Company and its Subsidiaries to the
Consolidated Current Liabilities of the Company and its Subsidiaries shall not
at any time be less than 120%.
6.5.5. 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 the Committed Capital Expenditures Schedule in an aggregate amount not to
exceed $15,000,000.
6.6. Indebtedness. Neither the Company nor any of its Subsidiaries shall
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:
6.6.1. Indebtedness in respect of the Credit Obligations.
6.6.2. Guarantees permitted by Section 6.7.
6.6.3. Current liabilities, other than Financing Debt, incurred in the ordinary
course of business.
6.6.4. To the extent that payment thereof shall not at the time be required by
Section 6.1, Indebtedness in respect of taxes, assessments, governmental charges
and claims for labor, materials and supplies.
6.6.5. Indebtedness secured by Liens of carriers, warehouses, mechanics and
landlords permitted by Sections 6.8.5 and 6.8.6.
6.6.6. 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
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(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.
6.6.7. To the extent permitted by Section 6.8.9, 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 Section 6.6.7 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 Section 6.6.7 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.
6.6.8. Indebtedness in respect of deferred taxes arising in the ordinary course
of business.
6.6.9. Indebtedness in respect of inter-company loans and advances among the
Company and its Subsidiaries which are not prohibited by Section 6.9.
6.6.10. Indebtedness of the Company in respect of its 12.75% Guaranteed Senior
Subordinated Debentures due December 15, 2000 (the "Subordinated Debentures").
6.6.11. [Intentionally Omitted].
6.6.12. The 7.85% Senior Secured Notes, Series A, Due April 10, 2003 of the
Company issued pursuant to the Master Shelf Agreement dated as of April 17, 1997
(as in effect on the Restatement Date and as from time to time amended subject
to the provisions of Section 6.2.4 hereof, the "Master Shelf Agreement") between
the Company and The Prudential Insurance Company of America and affiliates
thereof from time to time party thereto (collectively, "Prudential") in
aggregate principal amount not exceeding $25,000,000, the 7.22% Senior Secured
Notes, Series B, Due October 17, 2004 of the Company issued pursuant to the
Master Shelf Agreement in aggregate principal amount not exceeding $25,000,000,
other "Obligations", as defined in the Master Shelf Agreement, of the Company
and the Guarantors under the Master Shelf Agreement (excluding any "Series" of
"Notes", each as defined in the Master Shelf Agreement) and any Indebtedness
issued by the Company solely for the purpose of refunding the aforesaid notes
due April 10, 2003 the terms of which Indebtedness are acceptable to the
Required Lenders.
6.6.13. Unfunded pension liabilities and obligations with respect to Plans so
long as the Company is in compliance with Section 6.17.
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6.6.14. Indebtedness outstanding on the date hereof and described in Exhibit
7.3.
6.6.15. [Intentionally Omitted].
6.6.16. 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 shall exist, and the Company
shall have delivered to the Agent 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; and, 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 the Required Lenders 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.
6.6.17. Unsecured Funded Debt of the Company which is subordinated to the Credit
Obligations on terms satisfactory to the Required Lenders.
6.7. Guarantees; Letters of Credit. Neither the Company nor any of its
Subsidiaries shall 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:
6.7.1. Letters of Credit and Guarantees of the Credit Obligations.
6.7.2. Guarantees by the Company or its Subsidiaries of Indebtedness incurred
by any of its Subsidiaries and permitted by Section 6.6.
6.7.3. Unsecured Guarantees by Wholly Owned Subsidiaries of the Credit
Obligations or Indebtedness of the Company permitted by Section 6.6.10, so long
as such Wholly Owned Subsidiaries are Guarantors and such Guarantees are
subordinated to such Guarantors' Guarantees of the Credit Obligations to the
same extent and in the same manner as the Indebtedness of the Company permitted
by Section 6.6.10.
6.7.4. Guarantees and reimbursement obligations 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 Section 6.9.6.
6.7.5. 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
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dated March 28, 1991 (the "Subordinated Debentures Guarantee") executed by such
corporation.
6.7.6. Guarantees of the Funded Debt permitted by Section 6.6.12.
6.8. Liens. Neither the Company nor any of its Subsidiaries shall 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:
6.8.1. Liens on the Credit Security that secure the Credit Obligations.
6.8.2. Liens to secure taxes, assessments and other governmental charges, to
the extent that payment thereof shall not at the time be required by Section
6.1.
6.8.3. 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 Section 6.3, (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 Section 6.1.
6.8.4. Liens in respect of judgments or awards, to the extent that such
judgments or awards are permitted by Section 6.6.6 but only to the extent that
such Liens are junior to the Liens on the Credit Security granted to secure the
Credit Obligations.
6.8.5. 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).
6.8.6. 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 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 impair the use thereof in the
business of the Company or any Subsidiary.
6.8.7. Restrictions under federal and state securities laws on the transfer of
securities.
6.8.8. Restrictions under Foreign Trade Regulations on the transfer or
licensing of certain assets of the Company and its Subsidiaries.
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6.8.9. 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 Section 6.8.9 shall not exceed
the amount permitted by Section 6.6.7.
6.8.10. Liens on the Credit Security securing the Funded Debt permitted by
Section 6.6.12, but only so long as such Liens are on parity with or subordinate
to the Liens on the Credit Security that secure the Credit Obligations.
6.9. Investments and Acquisitions. Neither the Company nor any of its
Subsidiaries shall 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:
6.9.1. 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 Section 6.9.1 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.
6.9.2. 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.
6.9.3. Investments in Cash Equivalents.
6.9.4. Guarantees permitted by Section 6.7.
6.9.5. Investments made after June 30, 1999 in Subsidiaries listed in Exhibit
7.1 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.
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6.9.6. Investments outstanding on the Restatement Date and identified in
Exhibit 7.3.
6.9.7. 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 Lenders; provided, however, that the
Company and its Subsidiaries may acquire terminals in Richmond, Virginia and
Montvale, Virginia as set forth in the Committed Capital Expenditures Schedule
for aggregate consideration of up to $5,800,000 (inclusive of working capital
adjustments).
6.10. Distributions. Neither the Company nor any of its Subsidiaries shall
make any Distribution (or become contractually committed to do so), except for
the following:
6.10.1. Subsidiaries of the Company may make Distributions to the Company or any
Wholly Owned Subsidiary of the Company.
6.10.2. So long as immediately before and after giving effect thereto no Default
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.
6.10.3. So long as immediately before and after giving effect thereto no 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 EDITDA 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 Lenders prior to any such Distribution.
6.11. Merger, Consolidation and Dispositions of Assets. Neither the Company
nor any of its Subsidiaries shall 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:
6.11.1. The Company and any of its Subsidiaries may sell or otherwise dispose of
(a) inventory sold to customers 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
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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 the
Company nor any of its Subsidiaries shall sell, lease, exchange, sell and
leaseback, sublease or otherwise dispose of any tangible assets (or become
contractually committed to do so) described in the definition of "Minimum
Petroleum Products Inventory Requirements," except in 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).
6.11.2. 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.
6.11.3. 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.
6.11.4. Any inactive Subsidiary other than a Guarantor may be liquidated.
6.12. Lease Obligations. Neither the Company nor any of its Subsidiaries will
enter into any arrangement, directly or indirectly, whereby the Company or such
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. Neither the Company nor any of its
Subsidiaries shall be or become obligated as lessee under any lease except:
6.12.1. Capitalized Leases permitted by Sections 6.6.7 and 6.8.9.
6.12.2. 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 in any fiscal year 3% of Consolidated
Net Tangible Assets as of the last day of the next preceding fiscal year.
6.13. Issuance of Stock by Subsidiaries; Subsidiary Distributions.
6.13.1. Issuance of Stock by Subsidiaries. No Subsidiary shall 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 Agent as part of the Credit
Security.
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6.13.2. No Restrictions on Subsidiary Distributions. Except for this Agreement
and the Credit Documents, neither the Company nor any Subsidiary shall 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).
6.14. Interest Rate Protection. On or before June 30, 2000, unless the Term
Loan shall have been prepaid in full, the Company shall obtain, and thereafter
shall maintain, one or more Interest Rate Protection Agreements, each in form
and substance reasonably satisfactory to the Agent, covering 50% of the
Consolidated Funded Debt of the Company and its Subsidiaries, excluding the
outstanding principal amount of the Revolving Loan.
6.15. Derivative Contracts. Neither the Company nor any of its Subsidiaries
shall 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.
6.16. Negative Pledge Clauses. Neither the Company nor any of its Subsidiaries
shall 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 an obligation if collateral is granted for
another obligation, except the following:
6.16.1. This Agreement and the other Credit Documents.
6.16.2. Covenants in documents creating Liens permitted by Section 6.8
prohibiting further Liens on the assets encumbered thereby. 1.1.1.
6.16.3. The Master Shelf Agreement.
6.17. ERISA, etc. Each of the Company and its Subsidiaries shall comply, and
shall cause all ERISA Group Persons to comply, in all material respects, with
the provisions of ERISA and the Code applicable to each Plan. Each of the
Company and its Subsidiaries shall meet, and shall cause 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 and its Subsidiaries shall not withdraw, and shall
cause 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
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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.
6.18. Transactions with Affiliates. Neither the Company nor any of its
Subsidiaries shall 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.
6.19. Open Positions. The Company and its Subsidiaries may 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.
6.20. Environmental Laws.
6.20.1. Compliance with Law and Permits. Each of the Company and its
Subsidiaries shall 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.
6.20.2. Notice of Claims, etc. Each of the Company and its Subsidiaries shall
immediately notify the Agent, and provide copies upon receipt, of all written
claims, complaints, notices or inquiries from governmental authorities relating
to the condition of its facilities and properties 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 Agent any actions and proceedings relating to compliance
with Environmental Laws.
6.21. Credit Security. The Company shall cause to be delivered to the Lenders
and/or Secured Lenders, upon request of the Agent from time to time, opinions of
counsel (who shall be satisfactory to the Agent) relating to the perfection of
the Liens in the Credit Security and such other matters as the Agent may
reasonably request, each in form and substance satisfactory to the Agent and/or
the Collateral Agent.
6.22. Amendments to Master Shelf Agreement. The Company will not, without the
prior written consent of the Required Lenders, amend, modify, restate or
otherwise change the Master Shelf Agreement, as in effect on the date hereof,
and the Company hereby agrees to give to the Required Lenders written notice of
any such proposed amendment, modification, restatement or other change.
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7. Representations and Warranties. In order to induce the Lenders to extend
credit to the Company hereunder, each of the Company and such of its
Subsidiaries as are party hereto from time to time jointly and severally
represents and warrants that, except as disclosed in the Disclosure Schedule
attached hereto as Exhibit 7:
7.1. Organization and Business.
7.1.1. The Company. The Company is a duly organized and validly existing
corporation, in good standing under the laws of Delaware, with all power and
authority, corporate or otherwise, necessary to (a) enter into and perform this
Agreement and each other Credit Document to which it is party, (b) grant the
Agent for the benefit of the Lenders the security interests in the Credit
Security owned by it to secure the Credit Obligations and (c) own its properties
and carry on the business now conducted or proposed to be conducted by it.
Certified copies of the Charter and By-laws of the Company have been previously
delivered to the Agent and are correct and complete. Exhibit 7.1, as from time
to time hereafter supplemented in accordance with Sections 6.4.1 and 6.4.2, 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 Sections, (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.
7.1.2. Subsidiaries. Each Subsidiary of the Company is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
organized, with all power and authority, corporate or otherwise, necessary to
(a) enter into and perform this Agreement and each other Credit Document to
which it is party, (b) guarantee the Credit Obligations, (c) grant the Agent for
the benefit of the Lenders the security interest in the Credit Security owned by
such Subsidiary to secure the Credit Obligations and (d) own its properties and
carry on the business now conducted or proposed to be conducted by it. Certified
copies of the Charter and By-laws of each Subsidiary of the Company have been
previously delivered to the Agent and are correct and complete. Exhibit 7.1, as
from time to time hereafter supplemented in accordance with Sections 6.4.1 and
6.4.2, sets forth, as of the later of the date hereof or the end of the most
recent fiscal quarter for which financial statements are required to be
furnished in accordance with such Sections, (i) the name and jurisdiction of
organization of each Subsidiary of the Company, (ii) the address of the chief
executive office and principal place of business of each such Subsidiary, (iii)
each name under which each such Subsidiary conducts its business, (iv) each
jurisdiction in which each such Subsidiary owns real or tangible personal
property, and (v) the number of authorized and issued shares and ownership of
each such Subsidiary; provided, however, that there may be omitted from Exhibit
7.1 one or more Subsidiaries which have no business operations and no assets or
liabilities.
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7.1.3. Qualification. Each of the Company and its Subsidiaries is duly and
legally qualified to do business as a foreign corporation or other entity and is
in good standing in each state or jurisdiction in which such qualification is
required and is duly authorized, qualified and licensed under all laws,
regulations, ordinances or orders of public authorities, or otherwise, to carry
on its business in the places and in the manner in which it is conducted, except
for failures to be so qualified, authorized or licensed which would not in the
aggregate result, or create a material risk of resulting, in any Material
Adverse Change.
7.1.4. 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 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.
7.2. Financial Statements and Other Information; Material Agreements.
7.2.1. Financial Statements and Other Information. The Company has previously
furnished to the Lenders copies of the following:
(a) The audited Consolidated and unaudited Consolidating balance sheets
of the Company and its Subsidiaries as at April 30, 1996, 1997 and 1998 and as
at June 30, 1999 and the audited Consolidated statements of operations, of
stockholders' equity and of cash flows of the Company and its Subsidiaries for
the fiscal years of the Company then ended.
(b) The unaudited Consolidated balance sheet of the Company and its
Subsidiaries as at December 31, 1999 and the unaudited Consolidated statements
of operations, of stockholders' equity and of cash flows of the Company and its
Subsidiaries for the portion of the fiscal year then ended.
(c) The financial and operational projections and current capital
expenditures plan of the Company and its Subsidiaries dated May 28, 1999.
(d) Calculations demonstrating pro forma compliance with the Computation
Covenants as of the end of the most recent quarter preceding the date hereof.
The audited Consolidated financial statements (including the notes
thereto) referred to in clause (a) above were prepared in accordance with GAAP
and fairly present the financial position of the Company and its Subsidiaries on
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a Consolidated basis at the respective dates thereof and the results of their
operations for the periods covered thereby. The unaudited Consolidating
financial statements referred to in clause (a) above and the unaudited
Consolidated financial statements referred to in clause (b) above were prepared
in accordance with GAAP and fairly present the financial position of the Company
and its Subsidiaries at the respective dates thereof and the results of their
operations for the periods covered thereby, subject to normal year-end audit
adjustments and the addition of footnotes in the case of interim financial
statements. Neither the Company nor any of its Subsidiaries has any known
contingent liability material to the Company and its Subsidiaries on a
Consolidated basis which is not reflected in the balance sheets referred to in
clauses (a) or (b) above (or delivered pursuant to Sections 6.4.1 or 6.4.2) or
in the notes thereto.
In the Company's judgment, the financial and operational projections
referred to in clause (c) above constitute a reasonable basis as of the
Restatement Date 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.
7.2.2. Material Agreements. The Company has previously furnished to the Lenders
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, MassMutual Corporate
Investors and MassMutual 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 in
Exhibit 7.2.2 (together with the Subordinated Debentures, the Subordinated
Debentures Agreement, the Subordinated Debentures Guarantee and the Master Shelf
Agreement, the "Material Agreements").
7.3. Agreements Relating to Financing Debt, Investments, etc. Exhibit 7.3, as
from time to time hereafter supplemented in accordance with Sections 6.4.1 and
6.4.2, sets forth (a) the amounts (as of the dates indicated in Exhibit 7.3, 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 Section 6.9.6. The Company has furnished the
Lenders with correct and complete copies of any agreements described in clauses
(a), (b), (c) and (d) above requested by the Required Lenders.
7.4. Changes in Condition. Since December 31, 1999 no Material Adverse Change
has occurred and between December 31, 1999 and the date hereof, 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.
7.5. Title to Assets. The Company and its Subsidiaries have defensible title
to or the right to use all material assets necessary for or used in the
operations of their business as now conducted by them and reflected in the most
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recent balance sheet referred to in Section 7.2.1 (or the balance sheet most
recently furnished to the Lenders pursuant to Sections 6.4.1 or 6.4.2), and to
all assets acquired subsequent to the date of such balance sheet, subject to no
Liens except for Liens permitted by Section 6.8 and except for assets disposed
of as permitted by Section 6.11.
7.6. Operations in Conformity with Law, etc. To the best knowledge of the
Company and the Guarantors, the operations of the Company and its Subsidiaries
as now conducted or proposed to be conducted are not in violation of, nor is the
Company or its Subsidiaries in default under, any Legal Requirement presently in
effect, except for such violations and defaults as do not and will not, in the
aggregate, result, or create a material risk of resulting, in any Material
Adverse Change. The Company has received no notice of any such violation or
default and has no knowledge of any basis on which the operations of the Company
or its Subsidiaries, as now conducted and as currently proposed to be conducted
after the date hereof, would be held so as to violate or to give rise to any
such violation or default.
7.7. Litigation. No litigation, at law or in equity, or any proceeding before
any court, board or other governmental or administrative agency or any
arbitrator is pending or, to the knowledge of the Company or any Guarantor,
threatened which may involve any material risk of any final judgment, order or
liability which, after giving effect to any applicable insurance, has resulted,
or creates a material risk of resulting, in any Material Adverse Change or which
seeks to enjoin the consummation, or which questions the validity, of any of the
transactions contemplated by this Agreement or any other Credit Document. No
judgment, decree or order of any court, board or other governmental or
administrative agency or any arbitrator has been issued against or binds the
Company or any of its Subsidiaries which has resulted, or creates a material
risk of resulting, in any Material Adverse Change.
7.8. Authorization and Enforceability. Each of the Company and each other
Obligor has taken all corporate action required to execute, deliver and perform
this Agreement and each other Credit Document to which it is party. No consent
of stockholders of the Company is necessary in order to authorize the execution,
delivery or performance of this Agreement or any other Credit Document to which
the Company is party. Each of this Agreement and each other Credit Document
constitutes the legal, valid and binding obligation of each Obligor party
thereto and is enforceable against such Obligor in accordance with its terms.
7.9. No Legal Obstacle to Agreements. Neither the execution and delivery of
this Agreement or any other Credit Document, nor the making of any borrowings
hereunder, nor the guaranteeing of the Credit Obligations, nor the securing of
the Credit Obligations with the Credit Security, nor the consummation of any
transaction referred to in or contemplated by this Agreement or any other Credit
Document, nor the fulfillment of the terms hereof or thereof or of any other
agreement, instrument, deed or lease contemplated by this Agreement or any other
Credit Document, has constituted or resulted in or will constitute or result in:
(a) any breach or termination of the provisions of any material
agreement, instrument, deed or lease to which the Company, any of its
Subsidiaries or any other Obligor is a party or by which it is bound (including
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the Master Shelf Agreement, the Pledge Agreement and the Intercreditor
Agreement), or of the Charter or By-laws of the Company, any of its Subsidiaries
or any other Obligor;
(b) the violation of any law, statute, judgment, decree or governmental
order, rule or regulation applicable to the Company, any of its Subsidiaries or
any other Obligor;
(c) the creation under any agreement, instrument, deed or lease
(including the Master Shelf Agreement, the Pledge Agreement and the
Intercreditor Agreement) of any Lien (other than Liens on the Credit Security
which secure the Credit Obligations) upon any of the assets of the Company, any
of its Subsidiaries or any other Obligor; or
(d) any redemption, retirement or other repurchase obligation of the
Company, any of its Subsidiaries or any other Obligor under any Charter, By-law,
agreement, instrument, deed or lease.
No approval, authorization or other action by, or declaration to or filing with,
any governmental or administrative authority or any other Person is required to
be obtained or made (which has not been so obtained or made), including any
approval, authorization, consent or other action of Prudential under the Master
Shelf Agreement, the Intercreditor Agreement and the Pledge Agreement, by the
Company, any of its Subsidiaries or any other Obligor in connection with the
execution, delivery and performance of this Agreement, the Notes or any other
Credit Document, the transactions contemplated hereby or thereby, the making of
any borrowing hereunder, the guaranteeing of the Credit Obligations or the
securing of the Credit Obligations with the Credit Security (other than filings
necessary to perfect Agent's or the Collateral Agent's security interest in the
Credit Security).
7.10. Defaults. Neither the Company nor any of its Subsidiaries is in default
under any provision of its Charter or By-laws or of this Agreement or any other
Credit Document. Neither the Company nor any of its Subsidiaries is in default
under any provision of (a) the Subordinated Debentures, the Subordinated
Debentures Agreement or the Subordinated Debentures Guarantee, (b) the Master
Shelf Agreement or (c) any other agreement, instrument, deed or lease to which
it is party or by which it or its property is bound or has violated any law,
judgment, decree or governmental order, rule or regulation, in each case
referred to in this clause (c) so as to result, or create a material risk of
resulting, in any Material Adverse Effect.
7.11. 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
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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.
7.12. Tax Returns. Each of the Company and its Subsidiaries has filed all
material tax and information returns or permitted extensions which are required
to be filed by it and has paid, or made adequate provision for the payment of,
all taxes which have or may become due pursuant to such returns or to any
assessment received by it. Neither the Company nor any of its Subsidiaries knows
of any material additional assessments or any basis therefor. The Company
reasonably believes that the charges, accruals and reserves on the books of the
Company and its Subsidiaries in respect of taxes or other governmental charges
are adequate.
7.13. Certain Business Representations.
7.13.1. 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.
7.13.2. 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.
7.13.3. 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.
7.13.4. 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.
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7.13.5. 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.
7.13.6. 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.
7.14. Environmental Regulations.
7.14.1. Environmental Compliance. To the best knowledge of the Company and the
Guarantors, each of the Company and its Subsidiaries is in 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.
7.14.2. 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,
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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.
7.14.3. Hazardous Material. Exhibit 7.14 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 Subsidiaries' 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.
7.14.4. 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 Exhibit 7.14, 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.
7.15. Pension Plans. Each Plan (other than a Multiemployer Plan) and, to the
knowledge of the Company and its Subsidiaries, each Multiemployer Plan is in
material compliance with the applicable provisions of ERISA and the Code. Each
Multiemployer Plan and each Plan that constitutes a "defined benefit plan" (as
defined in ERISA) are set forth in Exhibit 7.15. Each ERISA Group Person has met
all of the funding standards applicable to all Plans that are not Multiemployer
Plans, and no condition exists which would permit the institution of proceedings
to terminate any Plan that is not a Multiemployer Plan under section 4042 of
ERISA. To the best knowledge of the Company and each Subsidiary, no Plan that is
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a Multiemployer Plan is currently insolvent or in reorganization or has been
terminated within the meaning of ERISA.
7.16. [Intentionally Omitted].
7.17. Foreign Trade Regulations; Government Regulation; Margin Stock.
7.17.1. Foreign Trade Regulations. Neither the execution and delivery of this
Agreement or any other Credit Document, nor the making by the Company of any
borrowings hereunder, nor the guaranteeing of the Credit Obligations by any
Guarantor, nor the securing of the Credit Obligations with the Credit Security,
has constituted or resulted in or will constitute or result in the violation of
any Foreign Trade Regulation.
7.17.2. 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, is 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
Credit Documents.
7.17.3. Margin Stock. Neither the Company nor any of its Subsidiaries owns any
Margin Stock. 1.1.1.
7.18. 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.
7.19. Disclosure. To the best knowledge of the Company and the Guarantors,
neither this Agreement nor any other Credit Document to be furnished to the
Lenders by or on behalf of the Company or any of its Subsidiaries in connection
with the transactions contemplated hereby or by such Credit Document contains
any untrue statement of material fact or omits to state a material fact
necessary in order to make the statements contained herein or therein,
considered as a whole, not misleading in light of the circumstances under which
they were made. No fact is actually known to the Company or any Guarantor which,
so far as the Company or any Guarantor is aware, has resulted, or in the future
(so far as the Company or any Guarantor can reasonably foresee) will result, or
presents a material risk of resulting, in any Material Adverse Change, except to
the extent that present or future general economic conditions may result in a
Material Adverse Change.
8. Defaults.
8.1. Events of Default. The following events are referred to as "Events of
Default":
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8.1.1. Payment. The Company shall fail to make any payment in respect of: (a)
interest or any fee on or in respect of any of the Credit Obligations owed by it
as the same shall become due and payable, and such failure shall continue for a
period of three Banking Days, or (b) any Credit Obligation with respect to
payments made by any Letter of Credit Issuer under any Letter of Credit or any
draft drawn thereunder within three Banking Days after demand therefor by such
Letter of Credit Issuer or (c) principal of any of the Credit Obligations owed
by it as the same shall become due, whether at maturity or by acceleration or
otherwise.
8.1.2. Specified Covenants. The Company or any of its Subsidiaries shall fail
to perform or observe any of the provisions of Section 6.2.5, 6.4.6, 6.5, 6.6,
6.7, 6.8, 6.9, 6.10, 6.11, 6.12, 6.16 or 6.19.
8.1.3. Other Covenants. The Company, any of its Subsidiaries or any other
Obligor shall fail to perform or observe any other covenant, agreement or
provision to be performed or observed by it under this Agreement or any other
Credit Document, and such failure shall not be rectified or cured to the written
satisfaction of the Required Lenders within 30 days after the earlier of (a)
notice thereof by the Agent to the Company or (b) a Financial Officer shall have
actual knowledge thereof.
8.1.4. Representations and Warranties. Any representation or warranty of or
with respect to the Company, any of its Subsidiaries or any other Obligor made
to the Lenders or the Agent in, pursuant to or in connection with this Agreement
or any other Credit Document shall be materially false on the date as of which
it was made.
8.1.5. Cross Default, etc.
(a) The Company or any of its Subsidiaries shall fail to make any
payment when due (after giving effect to any applicable grace periods) in
respect of any Financing Debt (other than the Credit Obligations) outstanding in
an aggregate amount of principal (whether or not due) and accrued interest
exceeding $3,000,000, and such failure shall continue, without having been duly
cured, waived or consented to, beyond the period of grace, if any, specified in
the agreement or instrument governing such Financing Debt;
(b) The Company or any of its Subsidiaries shall fail to perform or
observe the terms of any agreement or instrument relating to such Financing
Debt, and such failure shall continue, without having been duly cured, waived or
consented to, beyond the period of grace, if any, specified in such agreement or
instrument, and such failure shall permit the acceleration of such Financing
Debt;
(c) all or any part of such Financing Debt of the Company or any of its
Subsidiaries shall be accelerated or shall become due or payable prior to its
stated maturity (except with respect to voluntary prepayments thereof) for any
reason whatsoever;
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(d) any Lien on any property of the Company or any of its Subsidiaries
securing any such Financing Debt shall be enforced by foreclosure or similar
action; or
(e) any holder of any such Financing Debt shall exercise any right of
rescission with respect to the issuance thereof or put or repurchase rights
against any obligor with respect to such Financing Debt.
8.1.6. Ownership; Liquidation; etc. Except as permitted by Section 6.11:
(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.
8.1.7. Enforceability, etc. Any Credit 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 Required Lenders within 30 days following such cessation; or
any party to any Credit Document shall so assert in a judicial or similar
proceeding; or the security interests created by this Agreement or any other
Credit Documents shall cease to be enforceable and of the same effect and
priority purported to be created hereby.
8.1.8. Judgments. A final judgment (a) which, with other outstanding final
judgments against the Company and its Subsidiaries, exceeds an aggregate of
$1,000,000 in excess of applicable insurance coverage shall be rendered against
the Company or any of its Subsidiaries, or (b) which grants injunctive relief
that results, or creates a material risk of resulting, in a Material Adverse
Change and in either case if, (i) within 60 days after entry thereof, such
judgment shall not have been discharged or execution thereof stayed pending
appeal or (ii) within 60 days after the expiration of any such stay, such
judgment shall not have been discharged.
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8.1.9. ERISA. 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.
8.1.10. Bankruptcy, etc. The Company, any of its Subsidiaries or any
other Obligor shall:
(a) commence a voluntary case under the Bankruptcy Code or authorize, by
appropriate proceedings of its board of directors or other governing body, the
commencement of such a voluntary case;
(b) (i) have filed against it a petition commencing an involuntary case
under the Bankruptcy Code that shall not have been dismissed within 90 days
after the date on which such petition is filed, or (ii) file an answer or other
pleading within such 90-day period admitting or failing to deny the material
allegations of such a petition or seeking, consenting to or acquiescing in the
relief therein provided, or (iii) have entered against it an order for relief in
any involuntary case commenced under the Bankruptcy Code;
(c) seek relief as a debtor under any applicable law, other than the
Bankruptcy Code, of any jurisdiction relating to the liquidation or
reorganization of debtors or to the modification or alteration of the rights of
creditors, or consent to or acquiesce in such relief;
(d) have entered against it an order by a court of competent
jurisdiction (i) finding it to be bankrupt or insolvent, (ii) ordering or
approving its liquidation or reorganization as a debtor or any modification or
alteration of the rights of its creditors or (iii) assuming custody of, or
appointing a receiver or other custodian for, all or a substantial portion of
its property; or
(e) make an assignment for the benefit of, or enter into a composition
with, its creditors, or appoint, or consent to the appointment of, or suffer to
exist a receiver or other custodian for, all or a substantial portion of its
property.
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8.1.11. Subordinated Debentures. There shall occur any "Event of Default" as
defined in Section 11.1 of the Subordinated Debentures Agreement, or any of the
Credit Obligations shall fail to be "Superior Indebtedness" within the meaning
of Section 9(a) of the Subordinated Debentures Agreement.
8.1.12. Series A Convertible Preferred Stock. 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.
8.2. Certain Actions Following an Event of Default. If any one or more Events of
Default shall occur, then in each and every such case:
8.2.1. Terminate Obligation to Extend Credit. The Agent on behalf of the
Lenders may (and upon written request of the Required Lenders the Agent shall)
terminate the obligations of the Lenders to make any further extensions of
credit under the Credit Documents by furnishing notice of such termination to
the Company.
8.2.2. Specific Performance; Exercise of Rights. The Agent on behalf of the
Lenders may (and upon written request of the Required Lenders the Agent shall)
proceed to protect and enforce the Lenders' rights by suit in equity, action at
law and/or other appropriate proceeding, either for specific performance of any
covenant or condition contained in this Agreement or any other Credit Document
or in any instrument or assignment delivered to the Lenders pursuant to this
Agreement or any other Credit Document, or in aid of the exercise of any power
granted in this Agreement or any other Credit Document or any such instrument or
assignment.
8.2.3. Acceleration. The Agent on behalf of the Lenders may (and upon written
request of the Required Lenders the Agent shall) by notice in writing to the
Company (a) declare all or any part of the unpaid balance of the Credit
Obligations then outstanding to be immediately due and payable, and (b) require
the Company immediately to deposit with the Agent in cash an amount equal to the
then Letter of Credit Exposure (which cash shall be held and applied as provided
in Section 4.6), and thereupon such unpaid balance or part thereof and such
amount equal to the Letter of Credit Exposure shall become so due and payable
without presentation, protest or further demand or notice of any kind, all of
which are hereby expressly waived; provided, however, that if a Bankruptcy
Default shall have occurred, the unpaid balance of the Credit Obligations shall
automatically become immediately due and payable.
8.2.4. Enforcement of Payment; Credit Security; Setoff. The Agent on behalf of
the Lenders may (and upon written request of the Required Lenders the Agent
shall) proceed to enforce payment of the Credit Obligations in such manner as it
may elect, to cancel, or instruct other Letter of Credit Issuers to cancel, any
outstanding Letters of Credit which permit the cancellation thereof and to
realize upon any and all rights in the Credit Security. The Lenders may offset
and apply toward the payment of the Credit Obligations (and/or toward the curing
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of any Event of Default) any Indebtedness from the Lenders to the respective
Obligors, including any Indebtedness represented by deposits in any account
maintained with the Lenders, regardless of the adequacy of any security for the
Credit Obligations. The Lenders shall have no duty to determine the adequacy of
any such security in connection with any such offset.
8.2.5. Cumulative Remedies. To the extent not prohibited by applicable law
which cannot be waived, all of the Lenders' rights hereunder and under each
other Credit Document shall be cumulative.
8.3. 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
Credit Documents until the Required Lenders or the Agent (with the consent of
the Required Lenders) shall have waived such Event of Default in writing, stated
in writing that the same has been cured to such Lenders' 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 Lenders or the Agent
shall extend to or affect any subsequent Event of Default or impair any rights
of the Lenders upon the occurrence thereof. The making of any extension of
credit during the existence of any Default or Event of Default shall not
constitute a waiver thereof.
8.4. Waivers. To the extent that such waiver is not prohibited by the
provisions of applicable law that cannot be waived, each of the Company and the
other Obligors waives:
(a) all presentments, demands for performance, notices of nonperformance
(except to the extent required by this Agreement or any other Credit Document),
protests, notices of protest and notices of dishonor;
(b) any requirement of diligence or promptness on the part of the Agent
or any Lender in the enforcement of its rights under this Agreement, the Notes
or any other Credit Document;
(c) any and all notices of every kind and description which may be
required to be given by any statute or rule of law; and
(d) any defense (other than indefeasible payment in full) which it may
now or hereafter have with respect to its liability under this Agreement, the
Notes or any other Credit Document or with respect to the Credit Obligations.
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9. Guarantees.
9.1. Guarantees of Credit Obligations. Each Guarantor unconditionally jointly
and severally guarantees that the Credit 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 Credit Obligations shall not have
been so paid in full when due and payable, each Guarantor will, immediately upon
notice by the Agent or, without notice, immediately upon the occurrence of a
Bankruptcy Default, pay or cause to be paid to the Agent for the account of each
Lender in accordance with the Lenders' respective Percentage Interests the
amount of such Credit 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 Credit Obligations as against
any other Obligor, any other guarantor thereof or any other Person. For purposes
hereof, the Credit Obligations shall be due and payable when and as the same
shall be due and payable under the terms of this Agreement or any other Credit
Document notwithstanding the fact that the collection or enforcement thereof may
be stayed or enjoined under the Bankruptcy Code or other applicable law. 1.1.
9.2. Continuing Obligation. Each Guarantor acknowledges that the Lenders and
the Agent have entered into this Agreement (and, to the extent that the Lenders
or the Agent may enter into any future Credit Document, will have entered into
such agreement) in reliance on this Section 9 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 commitment of the Lenders to extend credit under this Agreement shall
have terminated and all of the Credit Obligations have been indefeasibly paid in
full in cash and discharged; provided, however, that:
(a) if a claim is made upon the Lenders at any time for repayment or
recovery of any amounts or any property received by the Lenders from any source
on account of any of the Credit Obligations and the Lenders repay or return any
amounts or property so received (including interest thereon to the extent
required to be paid by the Lenders) or
(b) if the Lenders 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 Lenders become
liable (such amounts being deemed part of the Credit Obligations) to the same
extent as if such amounts or property had never been received by the Lenders,
notwithstanding any termination hereof or the cancellation of any instrument or
agreement evidencing any of the Credit Obligations. Not later than five days
after receipt of notice from the Agent, the Guarantors shall jointly and
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severally pay to the Agent an amount equal to the amount of such repayment or
return for which the Lenders have so become liable. Payments hereunder by a
Guarantor may be required by the Agent on any number of occasions.
9.3. Waivers with Respect to Credit Obligations. Except to the extent
expressly required by this Agreement or any other Credit Document, each
Guarantor waives, to the fullest extent permitted by the provisions of
applicable law, all of the following (including all defenses, counterclaims and
other rights of any nature based upon any of the following):
(a) presentment, demand for payment and protest of nonpayment of any of
the Credit Obligations, and notice of protest, dishonor or nonperformance;
(b) notice of acceptance of this guarantee and notice that credit has
been extended in reliance on the Guarantor's guarantee of the Credit
Obligations;
(c) 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 Credit
Document, or notice of any acceleration of maturity of any Credit Obligations;
(d) demand for performance or observance of, and any enforcement of any
provision of, the Credit Obligations, this Agreement or any other Credit
Document or any pursuit or exhaustion of rights or remedies with respect to any
Credit Security or against the Company or any other Person in respect of the
Credit Obligations or any requirement of diligence or promptness on the part of
the Agent or the Lenders in connection with any of the foregoing;
(e) any act or omission on the part of the Agent or the Lenders 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;
(f) failure or delay to perfect or continue the perfection of any
security interest in any Credit Security or any other action which harms or
impairs the value of, or any failure to preserve or protect the value of, any
Credit Security;
(g) 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;
(h) any "single action" or "anti-deficiency" law which would otherwise
prevent the Lenders from bringing any action, including any claim for a
deficiency, against the Guarantor before or after the Agent's or the Lenders'
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 the Agent or the Lenders;
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(i) all demands and notices of every kind with respect to the foregoing;
and
(j) 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
Credit 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 Section 9.3.
No delay or omission on the part of the Agent or the Lenders in
exercising any right under this Agreement or any other Credit Document or under
any guarantee of the Credit Obligations or with respect to the Credit Security
shall operate as a waiver or relinquishment of such right. No action which the
Agent or the Lenders or the Company may take or refrain from taking with respect
to the Credit Obligations, including any amendments thereto or modifications
thereof or waivers with respect thereto, shall affect the provisions of this
Agreement or the obligations of the Guarantor hereunder. None of the Lenders' or
the Agent's rights shall at any 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 the Agent or the Lenders may have or otherwise be
charged with.
9.4. Lenders' Power to Waive, etc. Each Guarantor grants to the Lenders full
power in their discretion, without notice to or consent of such Guarantor, such
notice and consent being expressly waived to the fullest extent permitted by
applicable law, and without in any way affecting the liability of the Guarantor
under its guarantee hereunder:
(a) To waive compliance with, and any 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 Credit Document,
the Credit Security, the Credit Obligations or any guarantee thereof (each as
from time to time in effect);
(b) To grant any extensions of the Credit 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 Credit Obligations, whether or not rights against
the Guarantor under this Agreement are reserved in connection therewith;
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(c) To take security in any form for the Credit 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 Credit 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 Credit
Obligations and to proceed against any of the Credit Security or such guarantees
in any order;
(d) To collect or liquidate or realize upon any of the Credit
Obligations or the Credit Security in any manner or to refrain from collecting
or liquidating or realizing upon any of the Credit Obligations or the Credit
Security; and
(e) To extend credit under this Agreement, any other Credit Document or
otherwise in such amount as the Lenders 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.
9.5. 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 the Agent or the Lenders 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 the Agent or the Lenders 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 Agent or the Lenders. Each Guarantor represents, warrants and
agrees that it assumes sole responsibility for obtaining from the Company all
information concerning this Agreement and all other Credit Documents and all
other information as to the Company and its Affiliates or their properties or
management as such Guarantor deems necessary or desirable.
9.6. 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 reasonably necessary and
convenient in connection with the conduct of the business conducted and proposed
to be conducted by them, to induce the Lenders to enter into this Agreement and
to extend credit to the Company by making the Guarantees contemplated by this
Section 9,
(b) the credit available hereunder will directly or indirectly inure to
its benefit,
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(c) by virtue of the foregoing it is receiving at least reasonably
equivalent value from the Lenders 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 the Agent that the Lenders are unwilling to
enter into this Agreement unless the Guarantees contemplated by this Section 9
are given by it.
9.7. Subrogation. Each Guarantor agrees that, until the Credit 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
Credit 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.
9.8. 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 Credit 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.
9.9. 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 Agent 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 Agent. Each Guarantor will,
promptly upon the request of the Agent from time to time, execute, acknowledge
and deliver, and file and record, all such instruments, and take all such
action, as the Agent deems necessary or advisable to carry out the intent and
purposes of this Section 9.
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10. Security.
10.1. Credit Security. As security for the payment and performance of the
Credit Obligations, and in addition to and not in limitation of the Liens
granted by the Obligors in the Security Agreement, each Obligor mortgages,
pledges and collaterally grants and assigns to the Agent for the benefit of the
Lenders and the holders from time to time of any Credit Obligation, and creates
a security interest in favor of the Agent for the benefit of the Lenders and
such holders in, all of such Obligor's right, title and interest in and to (but
none of its obligations or liabilities with respect to) the items and types of
present and future property described in Sections 10.1.1 through 10.1.4
(subject, however, to Section 10.1.5), whether now owned or hereafter acquired,
all of which shall be included in the term "Credit Security":
10.1.1. Pledged Stock. (a) All shares of capital stock or other evidence of
beneficial interest in any corporation, business trust or limited liability
company, including without limitation of all shares of stock of each of
TransMontaigne Transportation Services, Inc., TransMontaigne Product Services
Inc. and TransMontaigne Holding Inc. owned by the Company, all shares of stock
of TransMontaigne Pipeline Inc. and TransMontaigne Terminaling Inc. owned by
TransMontaigne Transportation Services Inc., all shares of stock of
TransMontaigne Product Services Midwest Inc. owned by TransMontaigne Product
Services Inc. and all shares of West Shore Pipe Line Company owned by
TransMontaigne Pipeline Inc., (b) all limited partnership interests in any
limited partnership, (c) all general partnership interests in any general
partnership, (d) all joint venture interests in any joint venture and (e) all
options, warrants and similar rights to acquire such capital stock or such
interests. All such capital stock, interests, options, warrants and other rights
are collectively referred to as the "Pledged Stock".
10.1.2. Pledged Rights. All rights to receive profits or surplus of, or other
Distributions (including income, return of capital and liquidating
distributions) from, any corporation, business trust, limited liability company,
partnership or joint venture, including any distributions by any such Person to
partners or joint venturers. All such rights are collectively referred to as the
"Pledged Rights".
10.1.3. Pledged Indebtedness. All Indebtedness from time to time owing to such
Obligor from any Obligor or any Subsidiary of any Obligor (all such Indebtedness
being referred to as the "Pledged Indebtedness").
10.1.4. Proceeds and Products. All proceeds, including insurance proceeds, and
products of the items of Credit Security described or referred to in Sections
10.1.1 through 10.1.3 and, to the extent not included in the foregoing, all
Distributions with respect to the Pledged Securities.
10.1.5. Excluded Property. Notwithstanding Sections 10.1.1 through 10.1.4, the
payment and performance of the Credit Obligations shall not be secured by:
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(a) any rights arising under, and any property, tangible or intangible,
acquired under, any agreement which validly prohibits the creation by such
Obligor of a security interest in such rights or property;
(b) any rights or property to the extent that any valid and enforceable
law or regulation applicable to such rights or property prohibits the creation
of a security interest therein; or
(c) more than 66% of the outstanding stock or other equity in any
foreign Subsidiary.
10.2. [Intentionally Omitted].
10.3. Representations, Warranties and Covenants with Respect to Credit
Security. Each Obligor represents, warrants and covenants that:
10.3.1. Pledged Stock. All shares of capital stock, limited partnership
interests, membership interests, beneficial interests and similar securities
included in the Pledged Stock are and shall be at all times duly authorized,
validly issued, fully paid and (in the case of capital stock and limited
partnership interests) nonassessable. Each Obligor will deliver to the Agent
certificates representing any Pledged Stock represented by a certificate,
accompanied by a stock transfer power executed in blank and, if the Agent so
requests, with the signature guaranteed, all in form and manner satisfactory to
the Agent. Pledged Stock that is not evidenced by a certificate will be
registered in the Agent's name as pledgee on the issuer's records, all in form
and substance satisfactory to the Agent. At any time after the occurrence of an
Event of Default, the Agent may transfer into its name or the name of its
nominee, as pledgee, any Pledged Securities. In the event the Pledged Stock
includes any Margin Stock, the Obligors will furnish to the Lenders Federal
Reserve Form U-1 and take such other action as the Agent may request to ensure
compliance with applicable laws.
10.3.2. Pledged Indebtedness. All Pledged Indebtedness owed by any Affiliate of
the Obligors shall be on open account and shall not be evidenced by any note or
other instrument; provided, however, that all Pledged Indebtedness owed by any
Obligor shall, if the Agent requests, be evidenced by a promissory note, which
note shall be delivered to the Agent after having been endorsed in blank. Each
Obligor will, immediately upon the receipt thereof, deliver to the Agent any
promissory note or similar instrument representing any Pledged Indebtedness,
after having endorsed such promissory note or instrument in blank.
10.3.3. [Intentionally Omitted].
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10.3.4. No Liens or Restrictions on Transfer or Change of Control. All Credit
Security shall be free and clear of any Liens and restrictions on the transfer
thereof, including contractual provisions which prohibit the assignment of
rights under contracts, except for Liens permitted by Section 6.8. Without
limiting the generality of the foregoing, each Obligor will exclude from
contracts to which it becomes a party after the date hereof (other than
partnership and joint venture agreements) provisions that would prevent such
Obligor from creating a security interest in such contract or any property
acquired thereunder as contemplated hereby. None of the Pledged Stock is subject
to any adverse claims, option to purchase or similar rights of any Person.
Except with the written consent of the Agent, no Obligor is, and none of them
will be, party to or bound by any agreement, instrument, deed or lease that
restricts the change of control or ownership, or the creation of a security
interest in the ownership, of the Company or any of its Subsidiaries (other than
a Subsidiary which is a partnership).
10.3.5. [Intentionally Omitted].
10.3.6. Trade Names. No Obligor will adopt or do business under any name other
than its name or names designated in Exhibit 7.1 or any other name specified by
notice actually received by the Agent not less than ten Banking Days prior to
the conduct of business under such additional name. Since its incorporation, no
Obligor has changed its corporate name or adopted or conducted business under
any trade name other than a name specified on Exhibit 7.1.
10.3.7. [Intentionally Omitted].
10.3.8. Modifications to Credit Security. Except with the prior written consent
of the Agent, no Obligor shall amend or modify, or waive any of its rights under
or with respect to, any Pledged Securities if the effect of such amendment,
modification or waiver would be to reduce the amount of any such items or to
extend the time of payment thereof, to waive any default by any other party
thereto, or to waive or impair any remedies of the Obligors or the Lenders under
or with respect to any Pledged Securities, in each case other than consistent
with past practice in the ordinary course of business and on an arm's-length
basis. Each Obligor will promptly give the Agent written notice of any request
by any Person for any credit or adjustment with respect to any Pledged
Securities.
10.3.9. Delivery of Documents. At the Agent's request, each Obligor shall
deliver to the Agent, promptly upon such Obligor's receipt thereof, copies of
any agreements, instruments, documents or invoices comprising or relating to the
Credit Security. Pending such request, such Obligor shall keep such items at its
chief executive office and principal place of business, which office and place
of business shall be set forth in Exhibit 7.1, or at such other address as such
Obliger may specify by notice actually received by the Agent not less than ten
Banking Days prior to such change of address.
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10.3.10. Perfection of Credit Security. Upon the Agent's request from time to
time, the Obligors will execute and deliver, and file and record in the proper
filing and recording places, all such instruments, including financing
statements, collateral assignments of copyrights, trademarks and patents,
mortgages or deeds of trust, and notations on certificates of title and will
take all such other action, as the Agent deems advisable for confirming to it
the Credit Security or to carry out any other purposes of this Agreement or any
other Credit Document.
10.4. Administration of Credit Security. The Credit Security shall be
administered as follows; and if an Event of Default shall have occurred, Section
10.5 shall also apply.
10.4.1. Use of Credit Security. Until the Agent provides written notice to the
contrary, each Obligor may use, commingle and dispose of any part of the Credit
Security in the ordinary course of its business, all subject to Section 6.11.
10.4.2. [Intentionally Omitted].
10.4.3. Pledged Securities.
(a) Distributions.
(i) Until an Event of Default shall occur, the respective Obligors
shall be entitled to receive all Distributions on or with respect to the Pledged
Securities (other than Distributions constituting additional Pledged
Securities). All Distributions constituting additional Pledged Securities will
be retained by the Agent (or if received by any Obligor shall be held by such
Person in trust and shall be immediately delivered by such Person to the Agent
in the original form received, endorsed in blank) and held by the Agent as part
of the Credit Security.
(ii) If an Event of Default shall have occurred, all Distributions
on or with respect to the Pledged Securities shall be retained by the Agent (or
if received by any Obligor shall be held by such Person in trust and shall be
immediately delivered by it to the Agent in the original form received, endorsed
in blank) and held by the Agent as part of the Credit Security or applied by the
Agent to the payment of the Credit Obligations in accordance with Section
10.5.6.
(b) Voting.
(i) Until an Event of Default shall occur, the respective Obligors
shall be entitled to vote or consent or refrain from voting or consenting with
respect to the Pledged Securities in any manner not inconsistent with the terms
of any Credit Document, and the Agent will, if so requested, execute appropriate
revocable proxies therefor.
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(ii) If an Event of Default shall have occurred, if and to the
extent that the Agent shall so notify in writing the Obligor pledging the
Pledged Securities in question, only the Agent shall be entitled to vote or
consent or take any other action with respect to the Pledged Securities (and any
Obligor will, if so requested, execute or cause to be executed appropriate
proxies therefor).
10.5. Right to Realize upon Credit Security. Except to the extent prohibited by
applicable law that cannot be waived, this Section 10.5 shall govern the
Lenders' right to realize upon the Credit Security if any Event of Default shall
have occurred. The provisions of this Section 10.5 are in addition to any rights
and remedies available at law or in equity and in addition to the provisions of
any other Credit Document. In the case of a conflict between this Section 10.5
and any other Credit Document, this Section 10.5 shall govern.
10.5.1. Assembly of Credit Security; Receiver. Each of the Obligors shall, upon
the Agent's request, assemble the Credit Security and otherwise make it
available to the Agent. The Agent may have a receiver appointed for all or any
portion of the Obligor's assets or business which constitutes the Credit
Security in order to manage, protect, preserve, sell and otherwise dispose of
all or any portion of the Credit Security in accordance with the terms of the
Credit Documents, to continue the operations of the Obligors and to collect all
revenues and profits therefrom to be applied to the payment of the Credit
Obligations, including the compensation and expenses of such receiver.
10.5.2. General Authority. To the extent specified in written notice from the
Agent to the Obligor in question, each Obligor grants the Agent full and
exclusive power and authority, subject to the other terms hereof and applicable
law, to take any of the following actions (for the sole benefit of the Agent on
behalf of the Lenders and the holders from time to time of any Credit
Obligations, but at the Obligor's expense):
(a) To ask for, demand, take, collect, sue for and receive all payments
in respect of any Pledged Securities which the Obligor could otherwise ask for,
demand, take, collect, sue for and receive for its own use.
(b) To extend the time of payment of any Pledged Securities and to make
any allowance or other adjustment with respect thereto.
(c) To settle, compromise, prosecute or defend any action or proceeding
with respect to any Pledged Securities and to enforce all rights and remedies
thereunder which the Obligor could otherwise enforce.
(d) To enforce the payment of any Pledged Securities, either in the name
of the Obligor or in its own name, and to endorse the name of the Obligor on all
checks, drafts, money orders and other instruments tendered to or received in
payment of any Credit Security.
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(e) To notify the third party payor with respect to any Pledged
Securities of the existence of the security interest created hereby and to cause
all payments in respect thereof thereafter to be made directly to the Agent;
provided, however, that whether or not the Agent shall have so notified such
payor, the Obligors will at their expense render all reasonable assistance to
the Agent in collecting such items and in enforcing claims thereon.
(f) To sell, transfer, assign or otherwise deal in or with any Credit
Security or the proceeds thereof, as fully as any Obligor otherwise could do.
10.5.3. Marshaling, etc. Neither the Agent nor the Lenders shall be required to
make any demand upon, or pursue or exhaust any of their rights or remedies
against, any Obligor or any other guarantor, pledgor or any other Person with
respect to the payment of the Credit Obligations or to pursue or exhaust any of
their rights or remedies with respect to any collateral therefor or any direct
or indirect guarantee thereof. Neither the Agent nor the Lenders shall be
required to marshal the Credit Security or any guarantee of the Credit
Obligations or to resort to the Credit Security or any such guarantee in any
particular order, and all of its and their rights hereunder or under any other
Credit Document shall be cumulative. To the extent it may lawfully do so, each
of the Obligors absolutely and irrevocably waives and relinquishes the benefit
and advantage of, and covenants not to assert against the Agent or the Lenders,
any valuation, stay, appraisement, extension, redemption or similar laws now or
hereafter existing which, but for this provision, might be applicable to the
sale of any Credit Security made under the judgment, order or decree of any
court, or privately under the power of sale conferred by this Agreement, or
otherwise. Without limiting the generality of the foregoing, each of the
Obligors (a) agrees that it will not invoke or utilize any law which might
prevent, cause a delay in or otherwise impede the enforcement of the rights of
the Agent or any Lender in the Credit Security, (b) waives all such laws, and
(c) agrees that it will not invoke or raise as a defense to any enforcement by
the Agent or any Lender of any rights and remedies relating to the Credit
Security or the Credit Obligations any legal or contractual requirement with
which the Agent or any Lender may have in good faith failed to comply. In
addition, each of the Obligors waives any right to prior notice (except to the
extent expressly required by this Agreement) or judicial hearing in connection
with foreclosure on or disposition of any Credit Security, including any such
right which such Obligor would otherwise have under the Constitution of the
United States of America, any state or territory thereof or any other
jurisdiction.
10.5.4. Sales of Credit Security. All or any part of the Credit Security may be
sold for cash or other value in any number of lots at public or private sale,
without demand, advertisement or notice; provided, however, that unless the
Credit Security to be sold threatens to decline speedily in value or is of a
type customarily sold on a recognized market, the Agent shall give the Obligor
granting the security interest in such Credit Security ten days' prior written
notice of the time and place of any public sale, or the time after which a
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private sale may be made, which notice each of the Obligors and the Lenders
hereby agrees to be reasonable. At any sale or sales of Credit Security, any
Lender or any of its respective officers acting on its behalf, or such Lender's
assigns, may bid for and purchase all or any part of the property and rights so
sold, may use all or any portion of the Credit Obligations owed to such Lender
as payment for the property or rights so purchased, and upon compliance with the
terms of such sale may hold and dispose of such property and rights without
further accountability to the respective Obligor, except for the proceeds of
such sale or sales pursuant to Section 10.5.6. The Obligors acknowledge that any
such sale will be made by the Agent on an "as is" basis with disclaimers of all
warranties, whether express or implied. The respective Obligors will execute and
deliver or cause to be executed and delivered such instruments, documents,
assignments, waivers, certificates and affidavits, will supply or cause to be
supplied such further information and will take such further action as the Agent
shall request in connection with any such sale.
10.5.5. Sale Without Registration. If, at any time when the Agent shall
determine to exercise its rights hereunder to sell all or part of the securities
included in the Credit Security, the securities in question shall not be
effectively registered under the Securities Act (or other applicable law), the
Agent may, in its sole discretion, sell such securities by private or other sale
not requiring such registration in such manner and in such circumstances as the
Agent may deem necessary or advisable in order that such sale may be effected in
accordance with applicable securities laws without such registration and the
related delays, uncertainty and expense. Without limiting the generality of the
foregoing, in any event the Agent may, in its sole discretion, (a) approach and
negotiate with a single purchaser or one or more possible purchasers to effect
such sale, (b) restrict such sale to one or more purchasers each of whom will
represent and agree that such purchaser is purchasing for its own account, for
investment and not with a view to the distribution or sale of such securities
and (c) cause to be placed on certificates representing the securities in
question a legend to the effect that such securities have not been registered
under the Securities Act (or other applicable law) and may not be disposed of in
violation of the provisions thereof. Each of the Obligors agrees that such
manner of disposition is commercially reasonable, that it will upon the Agent's
request give any such purchaser access to such information regarding the issuer
of the securities in question as the Agent may reasonably request and that the
Agent and the Lenders shall not incur any responsibility for selling all or part
of the securities included in the Credit Security at any private or other sale
not requiring such registration, notwithstanding the possibility that a
substantially higher price might be realized if the sale were deferred until
after registration under the Securities Act (or other applicable law) or until
made in compliance with certain other rules or exemptions from the registration
provisions under the Securities Act (or other applicable law). Each of the
Obligors acknowledges that no adequate remedy at law exists for breach by it of
this Section 10.5.5 and that such breach would not be adequately compensable in
damages and therefore agrees that this Section 10.5.5 may be specifically
enforced.
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10.5.6. Application of Proceeds. The proceeds of all sales and collections in
respect of any Credit Security or other assets of any Obligor, all funds
collected from the Obligors and any cash contained in the Credit Security, the
application of which is not otherwise specifically provided for herein, shall be
applied as follows:
First, to the payment of the costs and expenses of such sales and
collections, the reasonable expenses of the Agent and the reasonable fees and
expenses of its special counsel;
Second, any surplus then remaining to the payment of the Credit
Obligations (other than in respect of Interest Rate Protection Agreements) in
such order and manner as the Agent may in its sole discretion determine;
provided, however, that any such payment of Credit Obligations owed to all
Lenders shall be pro rata in accordance with the respective Percentage Interests
of the Lenders;
Third, any surplus then remaining to the payment of the Credit
Obligations in respect of Interest Rate Protection Agreements with any Lender in
such order and manner as the Agent may in its sole discretion determine; and
Fourth, any surplus then remaining shall be paid to the Obligors,
subject, however, to the rights of the holder of any then existing Lien of which
the Agent has actual notice.
10.6. Custody of Credit Security. Except as provided by applicable law that
cannot be waived, the Agent will have no duty as to the custody and protection
of the Credit Security, the collection of any part thereof or of any income
thereon or the preservation or exercise of any rights pertaining thereto,
including rights against prior parties, except for the use of reasonable care in
the custody and physical preservation of any Credit Security in its possession.
The Lenders will not be liable or responsible for any loss or damage to any
Credit Security, or for any diminution in the value thereof, by reason of the
act or omission of any agent selected by the Agent acting in good faith.
11. Expenses; Indemnity.
11.1. Expenses. Whether or not the transactions contemplated hereby shall be
consummated, the Company will pay:
(a) all reasonable expenses of the Agent (including the out-of-pocket
expenses related to forming the group of Lenders and reasonable fees and
disbursements of the counsel to the Agent) incurred on and prior to the
Restatement Date in connection with the negotiation, preparation and duplication
of this Agreement and each other Credit Document, or in connection with any
environmental audit or review reports or examinations by and reports of the
Agent's commercial financial examiners and fixed asset appraisers (which
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expenses are estimated not to exceed $100,000, any increase of such estimate to
require the consent, not to be unreasonably withheld, of the Company);
(b) all reasonable expenses of the Agent (including the reasonable fees
and disbursements of counsel to the Agent) in connection with amendments,
waivers, consents and other operations under this Agreement or the Credit
Documents;
(c) all recording and filing fees and transfer and documentary stamp and
similar taxes at any time payable in respect of this Agreement, any other Credit
Document, any Credit Security or the incurrence of the Credit Obligations; and
(d) all other reasonable expenses incurred by the Agent, the Lenders or
the holder of any Credit Obligation following the occurrence and continuance of
an Event of Default or in connection with the enforcement of any rights
hereunder or under any other Credit Document or any work-out negotiation
relating to the Credit Obligations, including costs of collection and reasonable
attorneys' fees (including a reasonable allowance for the hourly cost of
attorneys employed by the Lenders on a salaried basis) and expenses.
11.2. General Indemnity. The Company shall indemnify the Lenders and the Agent
and hold them harmless from any liability, loss or damage resulting from the
violation by the Company of Section 2.5. In addition, the Company shall
indemnify each Lender, the Agent, each of the Lenders' or the Agent's directors,
officers, employees, agents, attorneys, accountants and consultants, and each
Person, if any, who controls any Lender or the Agent (each Lender, the Agent and
each of such directors, officers, employees, agents, attorneys, accountants,
consultants and control Persons is referred to as an "Indemnified Party") and
hold each of them harmless from and against any and all claims, damages,
liabilities, losses and reasonable expenses (including reasonable fees and
disbursements of counsel with whom any Indemnified Party may consult in
connection therewith and all reasonable expenses of litigation or preparation
therefor) which any Indemnified Party may incur or which may be asserted against
any Indemnified Party in connection with (a) the Indemnified Party's compliance
with or contest of any subpoena or other process issued against it in any
proceeding involving the Company or any of its Subsidiaries or their Affiliates,
(b) any litigation or investigation involving the Company, any of its
Subsidiaries or their Affiliates, or any officer, director or employee thereof,
(c) the existence or exercise of any security rights with respect to the Credit
Security in accordance with the Credit Documents, or (d) this Agreement, any
other Credit Document or any transaction contemplated hereby or thereby;
provided, however, that the foregoing indemnity shall not apply to litigation
commenced by the Company against the Lenders or the Agent which seeks
enforcement of any of the rights of the Company hereunder or under any other
Credit Document and is determined adversely to the Lenders or the Agent in a
final nonappealable judgment or to the extent such claims, damages, liabilities
and expenses result from a Lender's or the Agent's gross negligence or willful
misconduct. THE COMPANY EXPRESSLY ACKNOWLEDGES THAT IT MAY BE REQUIRED TO
INDEMNIFY PERSONS AGAINST THEIR OWN NEGLIGENCE.
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11.3. Indemnity With Respect to Letters of Credit. The Company shall
indemnify each Letter of Credit Issuer and its correspondents and hold each of
them harmless from and against any and all claims, losses, liabilities, damages
and reasonable expenses (including reasonable attorneys' fees) arising from or
in connection with any Letter of Credit, including any such claim, loss,
liability, damage or expense arising out of any transfer, sale, delivery,
surrender or endorsement of any invoice, bill of lading, warehouse receipt or
other document at any time held by the Agent, such Letter of Credit Issuer or
held for their respective accounts by any of their correspondents, in connection
with any Letter of Credit, except to the extent such claims, losses,
liabilities, damages and expenses result from gross negligence or willful
misconduct on the part of the Agent or any other Letter of Credit Issuer.
12. Operations; Agent.
12.1. Interests in Credits. The Percentage Interest of each Lender in the Loan
and the Letters of Credit, and the related Commitments, shall be computed based
on the maximum principal amount for each Lender as set forth in the Register, as
from time to time in effect. The current Percentage Interests are set forth in
Exhibit 12.1, which may be updated by the Agent from time to time to conform to
the Register.
12.2. Agent's Authority to Act, etc. Each of the Lenders appoints and
authorizes BankBoston to act for the Lenders as the Lenders' Agent in connection
with the transactions contemplated by this Agreement and the other Credit
Documents on the terms set forth herein. In acting hereunder, the Agent is
acting for the account of BankBoston to the extent of its Percentage Interest
and for the account of each other Lender to the extent of the Lenders'
respective Percentage Interests, and all action in connection with the
enforcement of, or the exercise of any remedies (other than the Lenders' rights
of set-off as provided in Section 8.2.4 or in any Credit Document) in respect of
the Credit Obligations and Credit Documents shall be taken by the Agent.
12.3. Company to Pay Agent, etc. The Company and each Guarantor shall be fully
protected in making all payments in respect of the Credit Obligations to the
Agent, in relying upon consents, modifications and amendments executed by the
Agent purportedly on the Lenders' behalf, and in dealing with the Agent as
herein provided. The Agent may charge the accounts of the Company, on the dates
when the amounts thereof become due and payable, with the amounts of the
principal of and interest on the Loan, any amounts paid by the Letter of Credit
Issuers to third parties under Letters of Credit or drafts presented thereunder,
commitment fees, Letter of Credit fees and all other fees and amounts owing
under any Credit Document.
12.4. Lender Operations for Advances, Letters of Credit, etc.
12.4.1. Advances. On each Closing Date, each Lender shall advance to the Agent
in immediately available funds such Lender's Revolving Loan Percentage Interest
or Term Loan Percentage Interest, as the case may be, in the portion of the
Revolving Loan or the Term Loan, respectively, advanced on such Closing Date
prior to 3:30 p.m. (Boston time). If such funds are not received at such time,
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but all applicable conditions set forth in Section 5 have been satisfied, each
Lender authorizes and requests the Agent to advance for the Lender's account,
pursuant to the terms hereof, the Lender's respective Revolving Loan Percentage
Interest or Term Loan Percentage Interest, as the case may be, in such portion
of the Loan and agrees to reimburse the Agent in immediately available funds for
the amount thereof prior to 4:30 p.m. (Boston time) on the day any portion of
the Loan is advanced hereunder; provided, however, that the Agent is not
authorized to make any such advance for the account of any Lender who has
previously notified the Agent in writing that such Lender will not be performing
its obligations to make further advances hereunder; and provided, further, that
the Agent shall be under no obligation to make any such advance.
12.4.2. Letters of Credit. Each of the Lenders authorizes and requests each
Letter of Credit Issuer to issue the Letters of Credit provided for in Section
2.4 and to grant each Lender a participation in each of such Letters of Credit
in an amount equal to its Revolving Loan Percentage Interest in the amount of
each such Letter of Credit. Promptly upon the request of the Letter of Credit
Issuer, each Lender shall reimburse the Letter of Credit Issuer in immediately
available funds for such Lender's Revolving Loan Percentage Interest in the
amount of all obligations to third parties incurred by the Letter of Credit
Issuer in respect of each Letter of Credit and each draft accepted under a
Letter of Credit to the extent not reimbursed by the Company. The Letter of
Credit Issuer will notify each Lender of the issuance of any Letter of Credit,
the amount and date of payment of any draft drawn or accepted under a Letter of
Credit and whether in connection with the payment of any such draft the amount
thereof was added to the Revolving Loan or was reimbursed by the Company.
12.4.3. Agent to Allocate Payments, etc. All payments of principal and interest
in respect of the extensions of credit made pursuant to this Agreement,
reimbursement of amounts paid by any Letter of Credit Issuer to third parties
under Letters of Credit or drafts presented thereunder, commitment fees, Letter
of Credit fees and other fees under this Agreement shall, as a matter of
convenience, be made by the Company and the Guarantors to the Agent in
immediately available funds. The share of each Lender shall be credited to such
Lender by the Agent in immediately available funds in such manner that the
principal amount of the Credit Obligations to be paid shall be paid
proportionately in accordance with the Lenders' respective Revolving Loan
Percentage Interests or Term Loan Percentage Interests, as applicable, in such
Credit Obligations, except as otherwise provided in this Agreement. Under no
circumstances shall any Lender be required to produce or present its Notes as
evidence of its interests in the Credit Obligations in any action or proceeding
relating to the Credit Obligations.
12.4.4. Delinquent Lenders; Nonperforming Lenders. In the event that any Lender
fails to reimburse the Agent pursuant to Section 12.4.1 for the Revolving Loan
Percentage Interest or Term Loan Percentage Interest of such lender (a
"Delinquent Lender") in any credit advanced by the Agent pursuant hereto,
overdue amounts (the "Delinquent Payment") due from the Delinquent Lender to the
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Agent shall bear interest, payable by the Delinquent Lender on demand, at a per
annum rate equal to (a) the Federal Funds Rate for the first three days overdue
and (b) the sum of 2% plus the Federal Funds Rate for any longer period. Such
interest shall be payable to the Agent for its own account for the period
commencing on the date of the Delinquent Payment and ending on the date the
Delinquent Lender reimburses the Agent on account of the Delinquent Payment (to
the extent not paid by any Obligor as provided below) and the accrued interest
thereon (the "Delinquency Period"), whether pursuant to the assignments referred
to below or otherwise. Upon notice by the Agent, the Company will pay to the
Agent the principal (but not the interest) portion of the Delinquent Payment.
During the Delinquency Period, in order to make reimbursements for the
Delinquent Payment and accrued interest thereon, the Delinquent Lender shall be
deemed to have assigned to the Agent all interest, commitment fees and other
payments made by the Company under Section 3 that would have thereafter
otherwise been payable under the Credit Documents to the Delinquent Lender.
During any other period in which any Lender is not performing its obligations to
extend credit under Section 2 (a "Nonperforming Lender"), the Nonperforming
Lender shall be deemed to have assigned to each Lender that is not a
Nonperforming Lender (a "Performing Lender") all principal and other payments
made by the Company under Section 4 that would have thereafter otherwise been
payable under the Credit Documents to the Nonperforming Lender. The Agent shall
credit a portion of such payments to each Performing Lender in an amount equal
to the Revolving Loan Percentage Interest or Term Loan Percentage Interest, as
applicable, of such Performing Lender in an amount equal to the Revolving Loan
Percentage Interest or Term Loan Percentage Interest of such Performing Lender
divided by one minus the Revolving Loan Percentage Interest or Term Loan
Percentage Interest of the Nonperforming Lender until the respective portions of
the Revolving Loan or the Term Loan, as applicable, owed to all the Lenders are
the same as the Revolving Loan Percentage Interest or Term Loan Percentage
Interests, respectively, of the Lenders immediately prior to the failure of the
Nonperforming Lender to perform its obligations under Section 2. The foregoing
provisions shall be in addition to any other remedies the Agent, the Performing
Lenders or the Company may have under law or equity against the Delinquent
Lender as a result of the Delinquent Payment or against the Nonperforming Lender
as a result of its failure to perform its obligations under Section 2.
12.5. Sharing of Payments, etc. Each Lender agrees that (a) if by exercising
any right of set-off or counterclaim or otherwise, it shall receive payment of
(i) a proportion of the aggregate amount due with respect to its Percentage
Interest in the Loan and Letter of Credit Exposure which is greater than (ii)
the proportion received by any other Lender in respect of the aggregate amount
due with respect to such other Lender's Percentage Interest in the Loan and
Letter of Credit Exposure and (b) if such inequality shall continue for more
than 10 days, the Lender receiving such proportionately greater payment shall
purchase participations in the Percentage Interests in the Loan and Letter of
Credit Exposure held by the other Lenders, and such other adjustments shall be
made from time to time (including rescission of such purchases of participations
in the event the unequal payment originally received is recovered from such
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Lender through bankruptcy proceedings or otherwise), as may be required so that
all such payments of principal and interest with respect to the Loan and Letter
of Credit Exposure held by the Lenders shall be shared by the Lenders pro rata
in accordance with their respective Percentage Interests; provided, however,
that this Section 12.5 shall not impair the right of any Lender to exercise any
right of set-off or counterclaim it may have and to apply the amount subject to
such exercise to the payment of Indebtedness of any Obligor other than such
Obligor's Indebtedness with respect to the Loan and Letter of Credit Exposure;
provided, further, that such application may be affected by Section 4.05 of the
Intercreditor Agreement. Each Lender that grants a participation in the Credit
Obligations to a Credit Participant shall require as a condition to the granting
of such participation that such Credit Participant agree to share payments
received in respect of the Credit Obligations as provided in this Section 12.5.
The provisions of this Section 12.5 are for the sole and exclusive benefit of
the Lenders and no failure of any Lender to comply with the terms hereof shall
be available to any Obligor as a defense to the payment of the Credit
Obligations.
12.6. Amendments, Consents, Waivers, etc. Except as otherwise set forth
herein, the Agent may (and upon the written request of the Required Lenders the
Agent shall) take or refrain from taking any action under this Agreement or any
other Credit Document, including giving its written consent to any modification
of or amendment to and waiving in writing compliance with any covenant or
condition in this Agreement or any other Credit Document (other than an Interest
Rate Protection Agreement) or any Default or Event of Default, all of which
actions shall be binding upon all of the Lenders; provided, however, that:
(a) Except as provided below, without the written consent of the
Required Lenders, no written modification of, amendment to, consent with respect
to, waiver of compliance with or waiver of a Default under, any of the Credit
Documents (other than an Interest Rate Protection Agreement) shall be made.
(b) Without the written consent of such Lenders as own 100% of the
Percentage Interests (other than Delinquent Lenders during the existence of a
Delinquency Period so long as such Delinquent Lender is treated the same as the
other Lenders with respect to any actions enumerated below):
(i) No reduction shall be made in (A) the amount of principal of
the Loan or reimbursement obligations for payments made under Letters of Credit,
(B) the interest rate on the Loan or (C) the Letter of Credit fees (except those
owed solely to the Letter of Credit Issuer, which may be reduced by agreement
solely between the Company and the Letter of Credit Issuer) or facility fees.
(ii) No change shall be made in the stated time of payment (or any
required prepayment, including without limitation any contingent mandatory
prepayment, in the event that any contingent mandatory prepayment requirement
shall have been incorporated into this Agreement by amendment, without in any
way obligating the Company or any other party to agree to any such amendment) of
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all or any portion of the Loan or interest thereon or reimbursement of payments
made under Letters of Credit or fees relating to any of the foregoing or in the
allocation of such payments provided pursuant to Section 12.4.3 of this
Agreement, and no waiver shall be made of any Default under Section 8.1.1.
(iii) No alteration shall be made of the Lenders' rights of set-off
contained in Section 8.2.4.
(iv) No release of any Credit Security or of any Guarantor shall be
made (except that the Agent may release particular items of Credit Security or
particular Guarantors in dispositions permitted by Section 6.11 and may release
all Credit Security pursuant to Section 18 upon payment in full of the Credit
Obligations and termination of the Commitments without the written consent of
the Lenders).
(v) No amendment to or modification of this Section 12.6(b) or of
Section 12.6(c) shall be made.
(c) No increase shall be made in the amount of any Commitment of any
Lender, and no extension shall be made of the term of any Commitment of any
Lender, unless such increase or extension, respectively, shall have received the
prior written consent of such Lender.
(d) Without the written consent of such Lenders as own 100% of the
Percentage Interests (other than Delinquent Lenders during the existence of a
Delinquency Period so long as such Delinquent Lender is treated the same as the
other Lenders with respect to any actions enumerated below):
(i) No amendment to or modification of the definition of "Required
Lenders" shall be made.
(ii) No amendment to or modification of this Section 12.6(d) shall
be made.
12.7. Agent's Resignation. The Agent may resign at any time by giving at
least 60 days' prior written notice of its intention to do so to each of the
Lenders and the Company and upon the appointment by the Required Lenders of a
successor Agent satisfactory to the Company. If no successor Agent shall have
been so appointed and shall have accepted such appointment within 45 days after
the retiring Agent's giving of such notice of resignation, then the retiring
Agent may with the consent of the Company, which shall not be unreasonably
withheld, appoint a successor Agent which shall be a bank or a trust company
organized under the laws of the United States of America or any state thereof
and having a combined capital, surplus and undivided profit of at least
$100,000,000; provided, however, that any successor Agent appointed under this
sentence may be removed upon the written request of the Required Lenders, which
request shall also appoint a successor Agent satisfactory to the Company. Upon
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the appointment of a new Agent hereunder, the term "Agent" shall for all
purposes of this Agreement thereafter mean such successor. After any retiring
Agent's resignation hereunder as Agent, or the removal hereunder of any
successor Agent, the provisions of this Agreement shall continue to inure to the
benefit of such Agent as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement.
12.8. Concerning the Agent.
12.8.1. Action in Good Faith, etc. The Agent and its officers, directors,
employees and agents shall be under no liability to any of the Lenders or to any
future holder of any interest in the Credit Obligations for any action or
failure to act taken or suffered in good faith, and any action or failure to act
in accordance with an opinion of its counsel shall conclusively be deemed to be
in good faith. The Agent shall in all cases be entitled to rely, and shall be
fully protected in relying, on instructions given to the Agent by the required
holders of Credit Obligations as provided in this Agreement.
12.8.2. No Implied Duties, etc. The Agent shall have and may exercise such
powers as are specifically delegated to the Agent under this Agreement or any
other Credit Document together with all other powers incidental thereto. The
Agent shall have no implied duties to any Person or any obligation to take any
action under this Agreement or any other Credit Document except for action
specifically provided for in this Agreement or any other Credit Document to be
taken by the Agent. Before taking any action under this Agreement or any other
Credit Document, the Agent may request an appropriate specific indemnity
satisfactory to it from each Lender in addition to the general indemnity
provided for in Section 12.11. Until the Agent has received such specific
indemnity, the Agent shall not be obligated to take (although it may in its sole
discretion take) any such action under this Agreement or any other Credit
Document. Each Lender confirms that the Agent does not have a fiduciary
relationship to it under the Credit Documents. Each of the Company and its
Subsidiaries party hereto confirms that neither the Agent nor any other Lender
has a fiduciary relationship to it under the Credit Documents.
12.8.3. Validity, etc. The Agent shall not be responsible to any Lender or any
future holder of any interest in the Credit Obligations (a) for the legality,
validity, enforceability or effectiveness of this Agreement or any other Credit
Document, (b) for any recitals, reports, representations, warranties or
statements contained in or made in connection with this Agreement or any other
Credit Document, (c) for the existence or value of any assets included in any
security for the Credit Obligations, (d) for the effectiveness of any Lien
purported to be included in the Credit Security, (e) for the specification or
failure to specify any particular assets to be included in the Credit Security,
or (f) unless the Agent shall have failed to comply with Section 12.8.1, for the
perfection of the security interests in the Credit Security.
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12.8.4. Compliance. The Agent shall not be obligated to ascertain or inquire as
to the performance or observance of any of the terms of this Agreement or any
other Credit Document; and in connection with any extension of credit under this
Agreement or any other Credit Document, the Agent shall be fully protected in
relying on a certificate of the Company as to the fulfillment by the Company of
any conditions to such extension of credit.
12.8.5. Employment of Agents and Counsel. The Agent may execute any of its
duties as Agent under this Agreement or any other Credit Document by or through
employees, agents and attorneys-in-fact and shall not be responsible to any of
the Lenders, the Company or any other Obligor for the default or misconduct of
any such agents or attorneys-in-fact selected by the Agent acting in good faith.
The Agent shall be entitled to advice of counsel concerning all matters
pertaining to the agency hereby created and its duties hereunder or under any
other Credit Document.
12.8.6. Reliance on Documents and Counsel. The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any affidavit, certificate,
cablegram, consent, instrument, letter, notice, order, document, statement,
telecopy, telegram, telex or teletype message or writing reasonably believed in
good faith by the Agent to be genuine and correct and to have been signed, sent
or made by the Person in question, including any telephonic or oral statement
made by such Person, and, with respect to legal matters, upon an opinion or the
advice of counsel selected by the Agent.
12.8.7. Agent's Reimbursement. Each of the Lenders severally agrees to reimburse
the Agent, pro rata in accordance with such Lender's Percentage Interest, for
any reasonable expenses not reimbursed by the Company or the Guarantors (without
limiting the obligation of the Company or the Guarantors to make such
reimbursement): (a) for which the Agent is entitled to reimbursement by the
Company or the Guarantors under this Agreement or any other Credit Document, and
(b) after the occurrence of a Default, for any other reasonable expenses
incurred by the Agent on the Lenders' behalf in connection with the enforcement
of the Lenders' rights under this Agreement or any other Credit Document.
12.8.8. Agent's Fees. The Company shall pay to the Agent for its own account an
agent's fee in the amounts separately agreed to from time to time by the Company
and the Agent.
12.9. Rights as a Lender. With respect to any credit extended by it hereunder,
BankBoston shall have the same rights, obligations and powers hereunder as any
other Lender and may exercise such rights and powers as though it were not the
Agent, and unless the context otherwise specifies, BankBoston shall be treated
in its individual capacity as though it were not the Agent hereunder. Without
limiting the generality of the foregoing, the Percentage Interest of BankBoston
shall be included in any computations of Percentage Interests. BankBoston and
its Affiliates may accept deposits from, lend money to, act as trustee for and
generally engage in any kind of banking or trust business with the Company, any
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of its Subsidiaries or any Affiliate of any of them and any Person who may do
business with or own an equity interest in the Company, any of its Subsidiaries
or any Affiliate of any of them, all as if BankBoston were not the Agent and
without any duty to account therefor to the other Lenders.
12.10. Independent Credit Decision. Each of the Lenders acknowledges that it
has independently and without reliance upon the Agent, based on the financial
statements and other documents referred to in Section 7.2, on the other
representations and warranties contained herein and on such other information
with respect to the Company and its Subsidiaries as such Lender deemed
appropriate, made such Lender's own credit analysis and decision to enter into
this Agreement and to make the extensions of credit provided for hereunder. Each
Lender represents to the Agent that such Lender will continue to make its own
independent credit and other decisions in taking or not taking action under this
Agreement or any other Credit Document. Each Lender expressly acknowledges that
neither the Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations or warranties to
such Lender, and no act by the Agent taken under this Agreement or any other
Credit Document, including any review of the affairs of the Company and its
Subsidiaries, shall be deemed to constitute any representation or warranty by
the Agent. Except for notices, reports and other documents expressly required to
be furnished to each Lender by the Agent under this Agreement or any other
Credit Document, the Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the business,
operations, property, condition, financial or otherwise, or creditworthiness of
the Company or any Subsidiary which may come into the possession of the Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
12.11. Indemnification. The holders of the Credit Obligations shall indemnify
the Agent and its officers, directors, employees, agents, attorneys,
accountants, consultants and controlling persons (to the extent not reimbursed
by the Obligors and without limiting the obligation of any of the Obligors to do
so), pro rata in accordance with their respective Percentage Interests, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time be imposed on, incurred by or asserted against
the Agent or such Persons relating to or arising out of this Agreement, any
other Credit Document, the transactions contemplated hereby or thereby, or any
action taken or omitted by the Agent in connection with any of the foregoing;
provided, however, that the foregoing shall not extend to actions or omissions
which are taken by the Agent with gross negligence or willful misconduct.
13. Successors and Assigns; Lender Assignments and Participations. Any
reference in this Agreement or any other Credit Document to any of the parties
hereto shall be deemed to include the successors and assigns of such party, and
all covenants and agreements by or on behalf of the Company, the other Obligors,
the Agent or the Lenders that are contained in this Agreement or any other
Credit Documents shall bind and inure to the benefit of their respective
successors and assigns; provided, however, that (a) the Company and its
Subsidiaries may not assign their rights or obligations under this Agreement or
any other Credit Document except for mergers or liquidations permitted by
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Section 6.11, and (b) the Lenders shall be not entitled to assign their
respective Percentage Interests in the credits extended hereunder or their
Commitments except as set forth below in this Section 13.
13.1. Assignments by Lenders.
13.1.1. Assignees and Assignment Procedures. Each Lender may (a) without the
consent of the Agent or the Company if the proposed assignee is already a Lender
hereunder or an Affiliate of the assigning Lender, or (b) otherwise with the
consents of the Agent and (so long as no Event of Default exists) the Company
(which consents will not be unreasonably withheld), in compliance with
applicable laws in connection with such assignment, assign to one or more
Eligible Assignees (each, an "Assignee") all or a portion of its interests,
rights and obligations under this Agreement and the other Credit Documents,
including all or a portion, which need not be pro rata between the Loan and the
Letter of Credit Exposure, of its Commitment, the portion of the Loan and Letter
of Credit Exposure at the time owing to it and the Notes held by it, but
excluding its rights and obligations as a Letter of Credit Issuer; provided,
however, that:
(i) the aggregate amount of the Commitment of the assigning Lender
subject to each such assignment (A) to any Assignee other than another Lender or
(B) to any group of Assignees the members of which are Affiliates of one another
and which does not include an existing Lender (determined in each case as of the
date the Assignment and Acceptance with respect to such assignment is delivered
to the Agent) shall be not less than $5,000,000; provided, however, that in the
case of an assignment to an Affiliate of the assigning Lender the amount
assigned may be less than $5,000,000; and
(ii) the parties to each such assignment shall execute and deliver to
the Agent an Assignment and Acceptance (the "Assignment and Acceptance")
substantially in the form of Exhibit 13.1.1, together with the Note subject to
such assignment and a processing and recordation fee of $3,500 payable to the
Agent by the assigning Lender.
Upon acceptance and recording pursuant to Section 13.1.4, from and after the
effective date specified in each Assignment and Acceptance (which effective date
shall be at least five Banking Days after the execution thereof unless waived by
the Agent):
(1) the Assignee shall be a party hereto and, to the extent provided
in such Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement and
(2) the assigning Lender shall, to the extent provided in such
assignment, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all or the remaining portion of an
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assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 3.2.4, 3.5, 3.6, 3.7, 3.8 and 11, as well as to any fees
accrued for its account hereunder and not yet paid).
13.1.1A. Assignment Among Lenders. Notwithstanding the provisions of Section
13.1.1, in the event that the debt obligations of any Lender shall be rated less
than "A3" by Moody's or less than "A-" by S&P, each other Lender party hereto or
any two or more of them acting together shall be entitled on ten Banking Days'
prior written notice to the Agent, the Company, and such Lender to purchase the
interest of such Lender hereunder in the Commitments relating to the Revolving
Loan, in whole and not in part, at a purchase price equal to the outstanding
principal amount of such Lender's Percentage Interest in the Revolving Loans
advanced hereunder and its share of Letter of Credit Exposure plus accrued and
unpaid interest thereon to the purchase date, together with any fees or other
amounts that may be owing to such Lender hereunder, including without limitation
additional interest with respect to such Lender's Percentage Interest in any
Eurodollar Rate Loan included in such Revolving Loans, calculated as provided in
Section 3.2.4. Such transfer shall be effected by the execution and delivery of
an Assignment and Acceptance.
13.1.2. Terms of Assignment and Acceptance. By executing and delivering an
Assignment and Acceptance, the assigning Lender and the Assignee shall be deemed
to confirm to and agree with each other and the other parties hereto as follows:
(a) other than the representation and warranty that it is the legal and
beneficial owner of the interest being assigned thereby free and clear of any
adverse claim, such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement, any other Credit Document or any other instrument or document
furnished pursuant hereto;
(b) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the Company
and its Subsidiaries or the performance or observance by the Company or any of
its Subsidiaries of any of its obligations under this Agreement, any other
Credit Document or any other instrument or document furnished pursuant hereto;
(c) such Assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 7.2 or Section 6.4 and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance;
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(d) such Assignee will independently and without reliance upon the
Agent, such assigning Lender or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement;
(e) such Assignee appoints and authorizes the Agent to take such action
as agent on its behalf and to exercise such powers under this Agreement as are
delegated to the Agent by the terms hereof, together with such powers as are
reasonably incidental thereto; and
(f) such Assignee agrees that it will perform in accordance with the
terms of this Agreement all the obligations which are required to be performed
by it as a Lender.
13.1.3. Register. The Agent shall maintain at the Boston Office a register (the
"Register") for the recordation of (a) the names and addresses of the Lenders
and the Assignees which assume rights and obligations pursuant to an assignment
under Section 13.1.1, (b) the Percentage Interest of each such Lender as set
forth in Section 12.1 and (c) the amount of the Loan and Letter of Credit
Exposure owing to each Lender from time to time. The entries in the Register
shall be conclusive, in the absence of demonstrable error, and the Company, the
Agent and the Lenders may treat each Person whose name is registered therein for
all purposes as a party to this Agreement. The Register shall be available for
inspection by the Company or any Lender at any reasonable time and from time to
time upon reasonable prior notice. In maintaining the Register as provided in
this Section 13.1.3, and for no other purpose of this Agreement, the Agent shall
be acting solely as agent of the Company and not of the Lenders.
13.1.4. Acceptance of Assignment and Assumption. Upon its receipt of a completed
Assignment and Acceptance executed by an assigning Lender and an Assignee
together with the Note subject to such assignment, and the processing and
recordation fee referred to in Section 13.1.1, the Agent shall (a) accept such
Assignment and Acceptance, (b) record the information contained therein in the
Register and (c) give prompt notice thereof to the Company. Within five Banking
Days after receipt of notice, the Company, at its own expense, shall execute and
deliver to the Agent, in exchange for the surrendered Note, a new Note to the
order of such Assignee in a principal amount equal to the applicable Commitment
and Loan assumed by it pursuant to such Assignment and Acceptance and, if the
assigning Lender has retained a Commitment and Loan, a new Note to the order of
such assigning Lender in a principal amount equal to the applicable Commitment
and Loan retained by it. Such new Note shall be in an aggregate principal amount
equal to the aggregate principal amount of such surrendered Note, and shall be
dated the date of the surrendered Note which it replaces.
13.1.5. Federal Reserve Bank. Notwithstanding the foregoing provisions of this
Section 13, any Lender may at any time pledge or assign all or any portion of
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such Lender's rights under this Agreement and the other Credit Documents to a
Federal Reserve Bank; provided, however, that no such pledge or assignment shall
release such Lender from such Lender's obligations hereunder or under any other
Credit Document.
13.1.6. Further Assurances. The Company and its Subsidiaries shall sign such
documents and take such other actions from time to time reasonably requested by
an Assignee to enable it to share in the benefits of the rights created by the
Credit Documents.
13.2. Credit Participants. Each Lender may, in compliance with applicable laws
in connection with such participation, sell to one or more commercial banks or
other financial institutions (each a "Credit Participant") participations in all
or a portion of its interests, rights and obligations under this Agreement and
the other Credit Documents (including all or a portion of its Commitment, the
Loan and Letter of Credit Exposure owing to it and the Note held by it);
provided, however, that:
(a) such Lender's obligations under this Agreement shall remain
unchanged;
(b) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations;
(c) the Credit Participant shall be entitled to the benefit of the cost
protection provisions contained in Sections 3.2.4, 3.5, 3.6, 3.7, 3.8 and 11,
but shall not be entitled to receive any greater payment thereunder than the
selling Lender would have been entitled to receive with respect to the interest
so sold if such interest had not been sold; and
(d) the Company, the Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement, and such Lender shall retain the sole right as
one of the Lenders to vote with respect to the enforcement of the obligations of
the Company relating to the Loan and Letter of Credit Exposure and the approval
of any amendment, modification or waiver of any provision of this Agreement
(other than amendments, modifications, consents or waivers described in clause
(b) of the proviso to Section 12.6).
Each Obligor agrees, to the fullest extent permitted by applicable law, that any
Credit Participant and any Lender purchasing a participation from another Lender
pursuant to Section 12.5 may exercise all rights of payment (including the right
of set-off), with respect to its participation as fully as if such Credit
Participant or such Lender were the direct creditor of the Obligors and a Lender
hereunder in the amount of such participation.
13.3. Replacement of Lender. In the event that any Lender or, to the extent
applicable, any Credit Participant (the "Affected Lender"):
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(a) fails to perform its obligations to fund any portion of the Loan or
to issue any Letter of Credit on any Closing Date when required to do so by the
terms of the Credit Documents;
(b) demands payment under the Reserve provisions of Section 3.5, the Tax
provisions of Section 3.6, the capital adequacy provisions of Section 3.7 or the
regulatory change provisions in Section 3.8 in an amount the Company deems
materially in excess of the amounts with respect thereto demanded by the other
Lenders; or
(c) refuses to consent to a proposed amendment, modification, waiver or
other action requiring consent of the holders of 100% of the Percentage
Interests under Section 12.6(b) that is consented to by the other Lenders;
then, so long as no Event of Default exists, the Company shall have the right to
seek a replacement lender which is reasonably satisfactory to the Agent (the
"Replacement Lender"). The Replacement Lender shall purchase the interests of
the Affected Lender in the Loan, Letters of Credit and its Commitment and shall
assume the obligations of the Affected Lender hereunder and under the other
Credit Documents upon execution by the Replacement Lender of an Assignment and
Acceptance and the tender by it to the Affected Lender of a purchase price
agreed between it and the Affected Lender (or, if they are unable to agree, a
purchase price in the amount of the Affected Lender's Percentage Interest in the
Loan and Letter of Credit Exposure, or appropriate credit support for contingent
amounts included therein, and all other outstanding Credit Obligations then owed
to the Affected Lender). Such assignment by the Affected Lender shall be deemed
an early termination of any Eurodollar Pricing Option to the extent of the
Affected Lender's portion thereof, and the Company will pay to the Affected
Lender any resulting amounts due under Section 3.2.4. Upon consummation of such
assignment, the Replacement Lender shall become party to this Agreement as a
signatory hereto and shall have all the rights and obligations of the Affected
Lender under this Agreement and the other Credit Documents with a Percentage
Interest equal to the Percentage Interest of the Affected Lender, the Affected
Lender shall be released from its obligations hereunder and under the other
Credit Documents, and no further consent or action by any party shall be
required. Upon the consummation of such assignment, the Company, the Agent and
the Affected Lender shall make appropriate arrangements so that a new Revolving
Note is issued to the Replacement Lender if it has acquired a portion of the
Revolving Loan. The Company and the Guarantors shall sign such documents and
take such other actions reasonably requested by the Replacement Lender to enable
it to share in the benefits of the rights created by the Credit Documents. Until
the consummation of an assignment in accordance with the foregoing provisions of
this Section 13.3, the Company shall continue to pay to the Affected Lender any
Credit Obligations as they become due and payable.
14. Confidentiality. Each Lender will make no disclosure of confidential
information furnished to it directly or indirectly by the Company or any of its
Subsidiaries unless such information shall have become public, except:
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(a) in connection with operations under or the enforcement of this
Agreement or any other Credit Document;
(b) pursuant to any statutory or regulatory requirement or any mandatory
court order, subpoena or other legal process;
(c) to any parent or corporate Affiliate of such Lender or to any Credit
Participant, proposed Credit Participant or proposed Assignee; provided,
however, that any such Person shall agree to comply with the restrictions set
forth in this Section 14 with respect to such information;
(d) to its independent counsel, auditors and other professional advisors
with an instruction to such Person to keep such information confidential;
(e) to the National Association of Insurance Commissioners or any
similar organization, or any nationally recognized rating agency that requires
access to information about the investment portfolio of such Lender;
(f) in the case of any Lender holding Indebtedness issued under the
Master Shelf Agreement, any disclosure that is not prohibited under the Master
Shelf Agreement; and
(g) with the prior written consent of the Company, to any other Person.
15. Foreign Lenders. If any Lender is not incorporated or organized under
the laws of the United States of America or a state thereof, such Lender shall
deliver to the Company and the Agent the following:
(a) Two duly completed copies of United States Internal Revenue Service
Form 1001 or 4224 or successor form, as the case may be, certifying in each case
that such Person is entitled to receive payments under this Agreement, the Notes
and reimbursement obligations under Letters of Credit payable to it, without
deduction or withholding of any United States federal income taxes; provided,
however, that in the case of such a Lender claiming exemption from United States
withholding tax under section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest", a Form W-8, or any subsequent version thereof
or successor thereto (and, if such Lender delivers a Form W-8, a certificate
representing that such Lender is not a bank for purposes of section 881(c) of
the Code, is not a 10-percent shareholder (within the meaning of section
871(h)(3)(B) of the Code) of the Company and is not a controlled foreign
corporation related to the Company (within the meaning of section 864(d)(4) of
the Code)), properly completed and duly executed by such Lender claiming
complete exemption from United States withholding tax on payments of interest by
the Company under this Agreement; and
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(b) A duly completed Internal Revenue Service Form W-8 or W-9 or
successor form, as the case may be, to establish an exemption from United States
backup withholding tax.
Each such Lender that delivers to the Company and the Agent a Form
1001, 4224, W-8 and/or W-9 pursuant to this Section 15 further undertakes to
deliver to the Company and the Agent two further copies of such Form, or
successor applicable form, or other manner of certification, as the case may be,
on or before the date that any such form expires or becomes obsolete or after
the occurrence of any event requiring a change in the most recent form
previously delivered by it to the Company and the Agent. Such Forms 1001 or 4224
shall certify that such Lender is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal income
taxes. The foregoing documents need not be delivered in the event any change in
treaty, law or regulation or official interpretation thereof has occurred which
renders all such forms inapplicable or which would prevent such Lender from
delivering any such form with respect to it, or such Lender advises the Company
that it is not capable of receiving payments without any deduction or
withholding of United States federal income tax and, in the case of a Form W-8
or W-9, establishing an exemption from United States backup withholding tax.
Until such time as the Company and the Agent have received such forms indicating
that payments hereunder are not subject to United States withholding tax or are
subject to such tax at a rate reduced by an applicable tax treaty, the Company
shall withhold taxes from such payments at the applicable statutory rate without
regard to Section 3.6.
16. Notices. Except as otherwise specified in this Agreement, any notice
required to be given pursuant to this Agreement or any other Credit Document
shall be given in writing. Any notice, consent, approval, demand or other
communication in connection with this Agreement or any other Credit Document
shall be deemed to be given if given in writing (including by telecopy)
addressed as provided below (or to the addressee at such other address as the
addressee shall have specified by notice actually received by the addressor),
and if either (a) actually delivered in fully legible form to such address or
(b) in the case of a letter, unless actual receipt of the notice is required by
any Credit Document five days shall have elapsed after the same shall have been
deposited in the United States mails, with first-class postage prepaid and
registered or certified.
If to the Company or any of its Subsidiaries, to it at its address set
forth in Exhibit 7.1 (as supplemented pursuant to Sections 6.4.1 and 6.4.2), to
the attention of the chief financial officer.
If to any Lender or the Agent, to it at its address set forth on the
signature pages of this Agreement or in the Register, with a copy to the Agent.
17. Course of Dealing; Amendments and Waivers. No course of dealing between
any Lender or the Agent, on one hand, and the Company or any other Obligor, on
the other hand, shall operate as a waiver of any of the Lenders' or the Agent's
rights under this Agreement or any other Credit Document or with respect to the
Credit Obligations. Each of the Company and the Guarantors acknowledges that if
the Lenders or the Agent, without being required to do so by this Agreement or
any other Credit Document, give any notice or information to, or obtain any
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consent from, the Company or any other Obligor, the Lenders and the Agent shall
not by implication have amended, waived or modified any provision of this
Agreement or any other Credit Document, or created any duty to give any such
notice or information or to obtain any such consent on any future occasion. No
delay or omission on the part of any Lender or the Agent in exercising any right
under this Agreement or any other Credit Document or with respect to the Credit
Obligations shall operate as a waiver of such right or any other right hereunder
or thereunder. A waiver on any one occasion shall not be construed as a bar to
or waiver of any right or remedy on any future occasion. No waiver, consent or
amendment with respect to this Agreement or any other Credit Document shall be
binding unless it is in writing and signed by the Agent or the Required Lenders.
18. Defeasance. When all Credit Obligations have been paid and all Letters
of Credit terminated and returned to the Letter of Credit Issuer or cash
collateralized in a manner satisfactory to the Lenders, and if at the time no
Lender continues to be committed to extend any credit to the Company hereunder
or under any other Credit Document, this Agreement shall terminate and, at the
Company's written request, accompanied by such certificates and other items as
the Agent shall reasonably deem necessary, the Credit Security shall revert to
the Obligors and the right, title and interest of the Lenders therein shall
terminate. Thereupon, on the Obligors' demand and at their cost and expense, the
Agent shall execute proper instruments, acknowledging satisfaction of and
discharging this Agreement, and shall redeliver to the Obligors any Credit
Security then in its possession; provided, however, that Sections 3.2.4, 3.5,
3.6, 3.7, 3.8, 11, 12.8.7, 12.11, 14, 21 and 22 shall survive the termination of
this Agreement.
19. No Strict Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement and the other Credit Documents with
counsel sophisticated in financing transactions. In the event an ambiguity or
question of intent or interpretation arises, this Agreement and the other Credit
Documents shall be construed as if drafted jointly by the parties and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement and the other
Credit Documents.
20. Certain Obligor Acknowledgments. Each of the Company and the other
Obligors acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Credit Documents;
(b) neither the Agent nor any Lender has any fiduciary relationship with
or duty to the Obligors arising out of or in connection with this Agreement or
any other Credit Document, and the relationship between the Agent and Lenders,
on one hand, and the Obligors, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
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(c) no joint venture is created hereby or by the other Credit Documents
or otherwise exists by virtue of the transactions contemplated hereby or thereby
among the Obligors and the Lenders.
21. Venue; Service of Process; Certain Waivers. Each of the Company and the
other Obligors:
(a) Irrevocably submits to the nonexclusive jurisdiction of the state
courts of The Commonwealth of Massachusetts and to the nonexclusive jurisdiction
of the United States District Court for the District of Massachusetts for the
purpose of any suit, action or other proceeding arising out of or based upon
this Agreement or any other Credit Document or the subject matter hereof or
thereof;
(b) Waives to the extent not prohibited by applicable law that cannot be
waived, and agrees not to assert, by way of motion, as a defense or otherwise,
in any such proceeding brought in any of the above-named courts, any claim that
it is not subject personally to the jurisdiction of such court, that its
property is exempt or immune from attachment or execution, that such proceeding
is brought in an inconvenient forum, that the venue of such proceeding is
improper, or that this Agreement or any other Credit Document, or the subject
matter hereof or thereof, may not be enforced in or by such court;
(c) Each of the Company and the other Obligors consents to service of
process in any such proceeding in any manner at the time permitted by Chapter
223A of the General Laws of The Commonwealth of Massachusetts and agrees that
service of process by registered or certified mail, return receipt requested, at
its address specified in or pursuant to Section 21 is reasonably calculated to
give actual notice; and
(d) Waives to the extent not prohibited by applicable law that cannot be
waived any right if may have to claim or recover in any such proceeding any
special, exemplary, punitive or consequential damages.
22. WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW
THAT CANNOT BE WAIVED, EACH OF THE COMPANY, THE OTHER OBLIGORS, THE AGENT AND
THE LENDERS WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF,
DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF
ANY ISSUE, CLAIM OR PROCEEDING ARISING OUT OF THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENT OR THE SUBJECT MATTER HEREOF OR THEREOF OR ANY CREDIT OBLIGATION OR IN
ANY WAY CONNECTED WITH THE DEALINGS OF THE LENDERS, THE AGENT, THE COMPANY OR
ANY OTHER OBLIGOR IN CONNECTION WITH ANY OF THE ABOVE, IN EACH CASE WHETHER NOW
EXISTING OR HEREAFTER ARISING AND WHETHER IN CONTRACT, TORT OR OTHERWISE. Each
of the Company and the other Obligors acknowledges that it has been informed by
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the Agent that the provisions of this Section 22 constitute a material
inducement upon which each of the Lenders has relied and will rely in entering
into this Agreement and any other Credit Document, and that it has reviewed the
provisions of this Section 22 with its counsel. Any Lender, the Agent, the
Company or any other Obligor may file an original counterpart or a copy of this
Section 22 with any court as written evidence of the consent of the Company, the
other Obligors, the Agent and the Lenders to the waiver of their rights to trial
by jury.
23. General. Time is (and shall be) of the essence in this Agreement and the
other Credit Documents. All covenants, agreements, representations and
warranties made in this Agreement or any other Credit Document or in
certificates delivered pursuant hereto or thereto shall be deemed to have been
relied on by each Lender, notwithstanding any investigation made by any Lender
on its behalf, and shall survive the execution and delivery to the Lenders
hereof and thereof. The invalidity or unenforceability of any provision hereof
shall not affect the validity or enforceability of any other provision hereof,
and any invalid or unenforceable position shall be modified so as to be enforced
to the maximum extent of its validity or enforceability. The headings in this
Agreement are for convenience of reference only and shall not limit or otherwise
affect the meaning hereof. This Agreement and the other Credit Documents
constitute the entire understanding of the parties with respect to the subject
matter hereof and thereof and supersede all prior and contemporaneous
understandings and agreements, whether written or oral; provided, however, that
the terms of the Commitment Letter dated June 4, 1999 among the Company,
BankBoston and BancBoston Robertson Stephens Inc. shall survive with respect to
all provisions of such Commitment Letter and the term sheet attached thereto
which relate to the syndication of the Credit Obligations. This Agreement may be
executed in any number of counterparts which together shall constitute one
instrument. This Agreement shall be governed by and construed in accordance with
the laws (other than the conflict of laws rules) of The Commonwealth of
Massachusetts, except as may be required by the UCC with respect to matters
involving the perfection of the Agent's Lien on the Credit Security. Any Event
of Default under Section 6.5.1, 6.5.4 or 6.5.5 of the Existing Credit Agreement
existing on December 31, 1999 or for the period ending on December 31, 1999 is
hereby waived.
113
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Each of the undersigned has caused this Agreement to be executed and
delivered by its duly authorized officer as an agreement under seal as of the
date first above written.
TRANSMONTAIGNE INC.
By /s/ Donald H. Anderson
Donald H. Anderson, President
TRANSMONTAIGNE PRODUCT SERVICES INC.
TRANSMONTAIGNE PRODUCT SERVICES
MIDWEST INC.
TRANSMONTAIGNE TRANSPORTATION
SERVICES INC.
TRANSMONTAIGNE PIPELINE INC.
TRANSMONTAIGNE TERMINALING INC.
By /s/ Donald H. Anderson
Donald H. Anderson, Chief Executive
Officer of each of the foregoing
corporations
S-1
<PAGE>
BANKBOSTON, N.A.,
for Itself and as Agent and on Behalf of
the Required Lenders Under the Existing
Credit Agreement
By /s/ Terrence Ronan
Authorized Officer
BankBoston, N.A.
Energy and Utilities Division
100 Federal Street
Boston, Massachusetts 02110
Telecopy: (617) 434-3652
S-2
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.
<PAGE>
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)
<PAGE>
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)
<PAGE>
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)
<PAGE>
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)
<PAGE>
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)
<PAGE>
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
1
<PAGE>
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
<PAGE>
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
<PAGE>
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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<PAGE>
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.
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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
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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
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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
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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
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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,
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(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,
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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
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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.
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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.
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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
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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).
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(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
<PAGE>
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
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<PAGE>
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
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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.
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(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
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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.
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(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).
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(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
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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:
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(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
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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
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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
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(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
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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
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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
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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
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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.
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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
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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.
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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.
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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
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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
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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
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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.
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"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:
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(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
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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.
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"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
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(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.
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"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
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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;
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(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);
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(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;
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(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
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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.
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"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
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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.
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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
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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
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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
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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
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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
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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
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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
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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,
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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.
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(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]
64
<PAGE>
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
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF TRANSMONTAIGNE INC. FOR THE PERIOD JULY 1,1999 TO MARCH
31, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> JUL-01-1999
<PERIOD-END> MAR-31-2000
<CASH> 33,315
<SECURITIES> 0
<RECEIVABLES> 128,354
<ALLOWANCES> 0
<INVENTORY> 185,213
<CURRENT-ASSETS> 352,243
<PP&E> 353,875
<DEPRECIATION> (34,251)
<TOTAL-ASSETS> 754,410
<CURRENT-LIABILITIES> 217,983
<BONDS> 205,000
0
170,115
<COMMON> 307
<OTHER-SE> 161,005<F1>
<TOTAL-LIABILITY-AND-EQUITY> 754,410
<SALES> 0
<TOTAL-REVENUES> 3,681,502
<CGS> 0
<TOTAL-COSTS> 3,732,831<F2>
<OTHER-EXPENSES> 10,459<F3>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 23,424
<INCOME-PRETAX> (64,294)
<INCOME-TAX> (25,718)<F4>
<INCOME-CONTINUING> (38,576)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (44,955)<F5>
<EPS-BASIC> (1.47)
<EPS-DILUTED> (1.47)
<FN>
<F1>
INCLUDES ($1,245) UNEARNED COMPENSATION
<F2>
INCLUDES $50,136 ASSET IMPAIRMENT
<F3>
OTHER INCOME, NET OF OTHER EXPENSES; INCLUDES $15,021 NET GAIN FROM SALE OF
ASSETS
<F4>
BENEFIT
<F5>
NET LOSS AVAILABLE FOR COMMON STOCKHOLDERS AFTER $6,379 PREFERRED STOCK
DIVIDENDS
</FN>
</TABLE>
