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EXHIBIT 10(aa)
AMENDED AND RESTATED
CREDIT AGREEMENT
for an amount of
up to
USD 1,965,000.00
to
SOUTH HAMPTON REFINING COMPANY
provided by
DEN NORSKE BANK ASA
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I N D E X
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. AMOUNT AND PURPOSE . . . . . . . . . . . . . . . . . . . . . . 7
3. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . 7
4. EXTENSION RENEWAL AND AVAILABILITY . . . . . . . . . . . . . . 10
5. INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6. REPAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . 11
7. PREPAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . 11
8. SECURITY . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
9. REPRESENTATIONS AND COVENANTS . . . . . . . . . . . . . . . . 12
10. CHANGES IN CIRCUMSTANCES . . . . . . . . . . . . . . . . . . . 17
11. FEES, COSTS AND EXPENSES . . . . . . . . . . . . . . . . . . . 18
12. PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
13. CALCULATION . . . . . . . . . . . . . . . . . . . . . . . . . 19
14. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . 19
15. NOTICES AND CORRESPONDENCE . . . . . . . . . . . . . . . . . . 21
16. GOVERNING LAW AND JURISDICTION . . . . . . . . . . . . . . . . 22
17. FINAL AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . 22
18. COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . 22
Exhibit A - Form of Promissory Note
Exhibit B - Form of Borrowing Base Certificate
Exhibit C-1 - Form of Administrative Distribution Report
Exhibit C-2 - Form of Interest Distribution Report
Exhibit C-3 - Form of Excess Distribution Report
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Amended and Restated Credit Agreement dated October 15, 1996 (the
"Restated Agreement") between South Hampton Refining Company, a Texas
corporation (the "Borrower") and Den norske Bank ASA, New York Branch, a
Norwegian bank (the "Bank").
WHEREAS, the Borrower and the Bank entered into the Credit Agreement
dated March 3, 1988 as amended and restated from time to time (as so amended
and restated, the "Credit Agreement"); and
WHEREAS, the Credit Agreement was entered into for the purpose of
financing, renewing and extending the Old Loan as defined in the Credit
Agreement; and
WHEREAS, the Borrower and the Bank wish to amend and restate the
Credit Agreement to modify certain provisions of the Credit Agreement and to
embody all of the amendments made to the Credit Agreement in one document.
NOW, THEREFORE, in consideration of the above recitals and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree to amend and restate the Credit
Agreement to read in its entirety as follows:
1. DEFINITIONS
"USD" means the lawful currency of the United States of
America.
"Administrative means a distribution by the Borrower to a Parent
Distribution" Company in respect of legal, auditing and
accounting fees of the Parent Companies
attributable to the operations of Borrower.
"Advance" means the loans by the Bank to the Borrower
pursuant to Section 2 hereof.
"American Shield" means American Shield Refining Company, a
Delaware corporation.
"Arabian Shield" means Arabian Shield Development Company, a
Delaware corporation.
"Banking Day" means a day upon which banks are open for
business in such places contemplated for the
transactions required by this Restated Agreement.
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"Borrowing Base" means the aggregate of (i) 90% of cash of the
Borrower held in the Cash Collateral Accounts,
(ii) 80% of Eligible Accounts Receivable and
(iii) 60% of Inventory.
"Borrowing Base means a certificate in the form of Exhibit B
Certificate" attached hereto.
"Cash Collateral means the accounts at Silsbee State Bank
Accounts" providing for the payment of all the Borrower's
receivables to a designated account or accounts
under the joint control of the Borrower and the
Bank.
"Closing Date" means October 15, 1996.
"Commitment" means an amount up to USD 1,965,000.00 on the
Closing Date, reducing (i) on the last day of
each fiscal quarter of the Borrower commencing
December 31, 1996 by the sum of USD 75,000 and
(ii) by the amount of any Distribution Reduction
on the date the corresponding Distribution is
made.
"Credit Facility" means the revolving credit facility, the terms
and conditions of which are set out in Section 2
of this Restated Agreement.
"Current Ratio" means the ratio of the current assets of the
Borrower to its current liabilities (excluding
indebtedness to the Bank in excess of USD
300,000) as each would be classified as current
assets or liabilities in accordance with
generally accepted accounting principles in the
U.S., of a corporation conducting a business the
same as or similar to the business of the
Borrower, but excluding receivables from or
payables to any subsidiary, parent or affiliate
of the Borrower.
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"Distribution means an amount equal to (i) 2 times any Excess
Reduction" Distribution if the shareholders' equity of TOCCO
II is negative or (ii) any Excess Distribution if
the shareholders' equity of TOCCO II is positive.
"Eligible Accounts means all accounts receivable which have been
Receivable" created in the ordinary course of Borrower's
business and for which Borrower's right to
receive payment is absolute and not contingent
upon the fulfillment of any condition whatsoever,
and shall not include (a) any invoice of a
customer which remains unpaid more than 90 days
from its invoice date, (b) any account for which
there exists a right of set off, counterclaim,
dispute, objection, complaint, defense or
discount, (c)any account which arises from the
sale or lease to or performance of services for,
or represents an obligation of, an employee,
affiliate, partner, parent or subsidiary of
Borrower, (d) that portion of any account from a
customer of Borrower which represents the amount
by which Borrower's total accounts from such
customer exceeds 25% of Borrower's total
accounts, (e) any account arising from a sale or
lease to a non-United States or non-Canadian
customer, and (f) any account designated to
Borrower by the Bank in which the Bank is not or
does not continue to be, in the Bank's reasonable
judgment, satisfied with the credit standing of
the customer of Borrower in relation to the
amount of credit extended.
"Excess Distribution" means a distribution by Borrower to a Parent
Company that is not an Administrative
Distribution, an Interest Distribution, a
dividend or a return of capital.
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"Fixed Charge Coverage means the ratio of (a) the earnings of the
Ratio" Borrower excepting extraordinary items of gain or
loss, but without deduction for interest, taxes,
depreciation and amortization to (b) the
aggregate of scheduled payments of principal of
all debt of the Borrower and interest thereon.
"Hazardous Substance" means any hazardous, dangerous or toxic waste,
substance or material as defined in the
Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C.
Sec. 9601, et seq. (hereinafter, "CERCLA"); the
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Resource Conservation and Recovery Act, 42 U.S.C.
Sec. 6901, et seq. (hereinafter, "RCRA"); the
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Hazardous Materials Transportation Act, 49 U.S.C.
Sec. 1801, et seq.; the Texas Solid Waste
-- ---
Disposal Act, Tex. Rev. Civ. Stat. Xxx. Art.
4777-7 Sec. 13(g)(7); or any other federal, state
or local statute, law, ordinance, code or
regulation relating to or imposing liability or
standards of conduct concerning the use,
production, generation or disposal of any
hazardous, toxic or otherwise dangerous waste,
substance, or material, currently or at any time
hereafter, in effect.
"Interest Distribution" means a payment by Borrower to a Parent Company
in respect of accrued interest on any debt owed
by Borrower to Saudi Fal or Arabian Shield.
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"Inventory" means any and all of Borrower's right, title and
interest in and to inventory, wherever located,
and in which the Bank has a perfected security
interest, including without limitation, any and
all goods held for sale or lease or being
processed for sale or lease in Borrower's
business, as now or hereafter conducted,
including without limitation, all feed stock,
materials, goods, and work-in-progress, finished
goods, and other tangible property held for sale
or lease or furnished or to be furnished under
the contracts of service or used or consumed in
Borrower's business, along with all documents
(including documents of title) covering
inventory, all cash and non-cash proceeds from
the sale of inventory including proceeds from
insurance and including such property the sale or
other disposition of which has given rise to
accounts and which has not been returned to or
repossessed or stopped in transit by Borrower,
but specifically excluding obsolete or slow
moving inventory.
"Margin" means 1% (one percent).
"Maturity Date" means December 31, 1998 or as extended in the
sole discretion of the Bank.
"Monthly Cash Flow" means a certificate in the form of Certificate
Exhibit D attached hereto and made a part of this
Restated Agreement for all purposes which
indicates the monthly cash flow of the Borrower
and the additional commitment reduction amount
referred to in Section 6(ii) of this Restated
Agreement.
"Parent Company" means Saudi Fal, American Shield Refining
Company, Arabian Shield Development Company and
Texas Oil & Chemical Co. II, or any combination
thereof.
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"Payment Date" means the last day of each month during the term
of this Restated Agreement.
"Permitted shall have the meaning set forth in Section 9(d)
Distribution" hereof.
"Prime Rate" shall mean the rate announced from time to time
by the Bank as its prime lending rate in effect
in its New York, New York office, automatically
fluctuating upward and downward with and at the
time of each such announcement without special
notice to Borrower or any other Person. The
Bank's prime rate may be one of several interest
rates, may serve only as reference rate and may
not be the Bank's lowest rate.
"Saudi Fal" means Saudi Fal, a limited liability company.
"Security Documents" means all or any documents pursuant to Section 8
hereof, as have been or may be entered into as
security for all or any of the obligations of the
Borrower hereunder.
"Tax" means all or any levies, imposts, duties,
charges, fees, deductions and withholdings levied
or imposed by any national or local governmental
or public body or authority (except for United
States federal, state and local income taxes
levied on the Bank's gross income or receipts or
United States federal, state and local gross
receipts or franchise taxes levied in lieu of
income taxes) and any restrictions or conditions
resulting in a charge.
"TOCCO II" means Texas Oil & Chemical Co. II, Inc., a Texas
corporation.
Where the context of this Agreement so allows, words importing the singular
include the plural and vice versa.
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2. AMOUNT AND PURPOSE
(a) The Bank shall make available the Commitment as follows:
USD 1,965,000.00 which shall be used by the Borrower for the purpose
of refinancing, renewing and extending the loan evidenced by its
Promissory Note dated December 30, 1990, as amended or restated from
time to time (the "Old Note"); and
(b) The Commitment shall be drawn down by the Borrower in the form
of Advances for a term which shall not extend beyond the Maturity Date. The
total amount of Advances outstanding under the Credit Facility shall not exceed
at any time the lesser of the Commitment and the Borrowing Base. Within such
limit, the Borrower may borrow, prepay pursuant to Section 7 of this Restated
Agreement and reborrow under this Section 2(b). Each borrowing by the Borrower
shall be in an aggregate principal amount of at least USD 50,000.
(c) The Commitment shall be evidenced by the promissory note of
the Borrower in the form of Exhibit A attached hereto (the "Note").
(d) Notwithstanding anything else in this Restated Agreement, at
no time shall there be outstanding Advances in an amount in the aggregate
greater than the lesser of the Commitment and the Borrowing Base.
3. CONDITIONS PRECEDENT
3.1 The Borrower shall give the Bank at least one Banking Day
irrevocable prior written notice of its desire to have an Advance made.
3.2 The obligation of the Bank to make the first Advance under
this Restated Agreement shall be subject to the Bank or its legal counsel
having received in form and content satisfactory to the Bank:
(a) The counterparts of this Restated Agreement duly executed by
the Borrower's authorized representative or representatives.
(b) The Security Documents.
(c) Copies certified by the Secretary of the Borrower of:
(i) the By-Laws of the Borrower,
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(ii) The resolutions of the Board of Directors of the
Borrower approving the execution, delivery and
performance by the Borrower of this Restated
Agreement, the Note, the Security Documents and
specifying the persons authorized to sign the above
mentioned documents on its behalf.
(d) Any consents necessary from governmental or other authorities
for the execution, delivery and performance by the Borrower of this Restated
Agreement.
(e) A copy certified as of a recent date by the Secretary of State
of Texas of the Articles of Incorporation of the Borrower with all amendments
thereto.
(f) Evidence from the Secretary of State and the Comptroller of
Public Accounts of the State of Texas as to the continued existence and good
standing of the Borrower.
(g) An opinion of counsel to the Borrower acceptable to the Bank
as to:
(i) the valid existence and good standing of the Borrower
under the laws of the State of Texas.
(ii) the due authorization, execution and delivery by the
Borrower of this Restated Agreement, the Note and the
Security Documents to which it is a party.
(iii) this Restated Agreement, the Note and the Security
Documents to which the Borrower is a party
constituting the legally valid and binding
obligations of the Borrower in accordance with their
terms.
(iv) the execution, delivery and performance of this
Restated Agreement, the Note and the Security
Documents to which the Borrower is a party, by the
Borrower not resulting in a breach of any terms or
conditions of, or resulting in the imposition of any
lien, charge or encumbrance upon any properties of
the Borrower or constituting a default under any
indenture, agreement, order, judgment or other
instrument under which the Borrower or its property
may be bound or constituting a violation of the
Articles of Incorporation or By-Laws of the Borrower
or violating any provision of applicable law.
(v) the execution, delivery and performance of this
Agreement, the Note and the Security Documents to
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which the Borrower is a party by the Borrower not
requiring the consent or approval of, the giving of
notice to, the registration with or the taking of any
action by any governmental authority of the United
States or the State of Texas.
(vi) such other matters as the Bank may request.
(h) the Note.
(i) Uniform Commercial Code financing statements covering the
security interests granted by the Security Documents shall have been duly
executed by the Borrower as debtor, and duly filed in all places as are, in the
opinion of the Bank, necessary or desirable to perfect said security interest.
(j) Evidence of the insurance required by Section 9(b)(vii)
hereof.
(k) An agreement pursuant to which Saudi Fal subordinates all
amounts owed to it by TOCCO II and the Borrower to all amounts outstanding
under this Restated Agreement and agrees that no payments of principal or
interest shall be made under such loans until such time as all amounts due
under this Restated Agreement have been paid, except for Permitted
Distributions under Section 9(d) hereof.
(l) An acknowledgment by American Shield Refining Company and
Arabian Shield Development Company of the continuing effectiveness of the
subordination agreement with terms similar to those set forth in subsection (k)
above.
(m) Evidence of cancellation of the Intercreditor Agreement
between the Bank and Saudi Fal.
3.4 The obligations of the Bank to make each subsequent Advance
shall be subject to the further condition precedent that the Bank shall have
received a certificate dated the date of such Advance of the Borrower
certifying that:
(a) the representations and warranties contained in Section 9 are
true and correct on and as of the date of such Advance as
though made on and as of such date; and
(b) no event has occurred and is continuing, or would result from
such Advance, which constitutes an Event of Default or with
the passing of time or the giving of notice would constitute
an Event of Default.
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3.5 All of the conditions precedent contained in this Section 3
are for the sole benefit of the Bank and the Bank may waive any of them in its
absolute discretion.
4. EXTENSION RENEWAL AND AVAILABILITY
Subject to the provisions of Sections 10 and 11 hereof and:
(a) The Bank's prior satisfaction that the relevant conditions set
out in Section 3 above have been complied with,
(b) No Event of Default as defined in Section 15 herein has
occurred or is continuing,
the indebtedness evidenced by the Old Note shall be refinanced, extended,
renewed and restructured and the new credit facility of Facility B shall be
made available to the Borrower all in accordance with the terms and provisions
of this Restated Agreement.
5. INTEREST
(a) Interest Rate
The Borrower shall pay interest on the Advances drawn and
outstanding under this Restated Agreement at the annual rate
which is conclusively certified by the Bank to be the
aggregate of the Margin and the Prime Rate.
(b) Interest Payment
(i) Interest shall be payable monthly in arrears on the
last day of each month and on the Maturity Date and
calculated in accordance with Section 14 hereof.
(ii) If any interest would be payable on a non-Banking
Day, it shall be paid on the next succeeding Banking
Day.
(c) Computation of Interest
Notwithstanding any provision of this Restated Agreement or the Note
to the contrary, in no event shall the aggregate amount of consideration which
constitutes interest under any applicable law which is contracted for, charged
or received hereunder or under the Note ("Interest") exceed the maximum amount
of nonusurious interest allowed by law, and any excess shall be credited on
this Restated Agreement or the Note (or if all obligations under this Restated
Agreement or the Note shall have been paid in full, refunded to the Borrower).
For purposes of the foregoing, the maximum amount of
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interest allowed by law shall be calculated by determining the amount of
interest that could be contracted for, charged or received during the term
hereof at the maximum rate of nonusurious interest allowed from time to time by
applicable law as is now or, to the extent allowed by law, as may hereafter be
in effect (the "maximum nonusurious interest rate") and, if at any time the
rate of Interest to accrue would exceed the maximum nonusurious interest rate,
the rate of Interest to accrue under this Restated Agreement or the Note shall
be limited to the maximum nonusurious interest rate, but any subsequent
reductions in LIBOR shall not reduce the rate of Interest to accrue under this
Restated Agreement or the Note below the maximum nonusurious interest rate
until the total amount of Interest accrued and paid under this Restated
Agreement or the Note equals the amount of Interest which would have accrued if
a rate per annum equal to the Prime Rate plus the Margin had at all times been
in effect.
6. REPAYMENT
The Borrower shall repay all principal amounts outstanding plus any
other outstanding amounts hereunder in a single installment on the Maturity
Date. Subject to the terms hereof, the Borrower may reborrow amounts repaid or
prepaid prior to the Maturity Date, upon one (1) day prior written notice to
the Bank.
7. PREPAYMENT
The Borrower shall make an immediate prepayment in an amount by which
the principal amount outstanding hereunder exceeds the Commitment or the
Borrowing Base, if ever.
8. SECURITY
The Facility is secured by:
(a) The Deed of Trust dated September 10, 1985 from Texas Oil &
Chemical Co. ("Chemical") to Xxxxxxx X. Xxxxxxxxxx as Trustee.
(b) The Deed of Trust dated January 10, 1985 from Gulf State Pipe
Line Company, Inc. ("Gulf State") to Xxxxxxx X. Xxxxxxxxxx as Trustee.
(c) The Deed of Trust dated January 20, 1985 from the Borrower to
Xxxxxxx X. Xxxxxxxxxx as Trustee.
(d) The Deed of Trust dated April 8, 1986 from Texas Oil &
Chemical Terminal, Inc. ("Terminal") to Xxxxxxx X. Xxxxxxxxxx as Trustee.
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(e) The Security Agreement and Financing Statement from the
Borrower to the Bank dated as of January 14, 1985, duly ratified by the
Borrower.
(f) The Cash Collateral Accounts.
(g) An Assignment of Insurances dated March 3, 1988 from the
Borrower, Gulf State and Texas Oil & Chemical Co. II, Inc., duly ratified by
the parties thereto.
(h) A pledge by American Shield Refining Company of all of the
issued and outstanding shares of Texas Oil & Chemical Co. II, Inc. in form and
substance satisfactory to the Bank, duly ratified by the parties thereto.
9. REPRESENTATIONS AND COVENANTS
(a) The Borrower represents to and agrees with the Bank that:
(i) this Restated Agreement and the Security Documents to which it
is a party constitute valid, binding and enforceable
obligations of the Borrower according to the terms and
conditions hereof and thereof and the execution and
performance of this Restated Agreement and such Security
Documents do not and will not contravene any applicable law,
order, regulation or restriction of any kind binding on the
Borrower.
(ii) the Borrower is a duly formed and validly existing corporation
under the laws of the State of Texas, has full power to enter
into this Restated Agreement and the Security Documents to
which it is party, to make borrowings hereunder and to service
and repay the Commitment.
(iii) the chief executive office of the Borrower is located at
Xxxxxxx 000, Xxxxxxx, Xxxxx.
(iv) it is currently in possession of permits authorizing all
activities now or formerly conducted on the properties
securing this indebtedness from the Texas Water Commission,
the Texas Air Quality Control Board, the U.S. Environmental
Protection Agency, the U.S. Army Corps of Engineers and the
Texas Railroad Commission. Furthermore, the Borrower agrees
that it maintains no Hazardous Substances on the properties
securing this indebtedness without possession of the
appropriate permits.
(v) no Event of Default has occurred and is continuing.
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(b) Affirmative Covenants. The Borrower undertakes to the Bank
that so long as any amount is owing hereunder it will:
(i) promptly inform the Bank of any occurrence of which it becomes
aware which is, or with the passage of time or the giving of
notice would constitute, an Event of Default hereunder or
under any of the Security Documents to which it is a party or
which in its reasonable opinion might adversely affect its
ability fully to perform its obligations under this Restated
Agreement or any of the Security Documents to which it is a
party.
(ii) deliver to the Bank by the 105th day of the end of the each
fiscal year, consolidated annual audited financial statements,
including consolidating financial statements of the Borrower,
and by the 30th day after the end of each month, profit and
loss and balance sheet statements.
(iii) deliver to the Bank by the 30th day following the end of each
quarter, statements showing the source and use of funds of the
Borrower for the preceding quarter.
(iv) deliver to the Bank within 3 Banking Days of the last day of
each calendar month and the 15th day of each calendar month a
Borrowing Base Certificate as of such days as well as a
certificate signed by the President or the Chief Financial
Officer of the Company as to the inventory and accounts
receivable (status and aging) of the Borrower.
(v) deliver to the Bank within 30 Banking days of the last day of
each fiscal quarter, compliance statements signed by the
President or Chief Financial Officer of the Borrower
certifying that the Borrower is in compliance with all of the
representations and covenants hereof as if made on the date of
such certificate, and that no default has occurred hereunder,
together with a calculation of all financial ratios set forth
in Section 9(c)(ix), (x) and (xi) hereof.
(vi) deliver to the Bank no later than December 1 of each year the
business plan, income and expense projections, projected
balance sheet and projected sources and uses of funds
statement of the Borrower for the subsequent calendar year.
(vii) deliver to the Bank within 30 Banking days of the end of each
calendar month a written status report of the Borrower's
operations, financial performance and out-
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standing accounts payable for the previous calendar month and
such other financial information as the Bank may from time to
time reasonably request; permit the Bank or its representative
at any reasonable time or times to inspect the properties of
the Borrower and to inspect, audit and examine the books or
records of the Borrower and to take extracts therefrom. The
Bank shall further have the right to order an audit of
Borrower's books and records, no more than twice annually.
The costs of such audit shall be borne by the Borrower.
(viii) deliver to the Bank, as soon as available, weekly receipt and
disbursement reports.
(ix) maintain insurance acceptable to the Bank including, but not
limited to, casualty insurance with responsible and reputable
insurance companies or associations in such amounts and
covering such risks as is usually carried by companies engaged
in similar businesses and owning similar properties in the
same general areas in which the Borrower operates. The
Borrower shall furnish the Bank with evidence of all such
insurance policies currently in force and with evidence of
payment of the premiums on such policies.
(x) execute and deliver to the Bank any instruments, documents or
certificates which in the Bank's judgment are necessary to
amend, modify, extend or supplement any of the Security
Documents to better evidence, reflect and secure the Note.
(xi) perform and maintain, or cause to be performed or maintained,
all permits, licenses, consents and agreements concerning its
assets or operations.
(xii) notify the Bank, within five (5) days, should it ever come
into possession of knowledge or have a claim or complaint
asserted against it because the Borrower or any other person
or entity caused or permitted any Hazardous Substances to be
stored, located, held or disposed of on, under or at any of
the properties securing Facility A or Facility B in a manner
not in compliance with all applicable laws, regulations and
permits regarding such storage, holding or disposal.
(xiii) give the Bank, within five (5) days, written notice in the
event the Borrower receives notice of (1) the happening of any
spill or cleanup of Hazardous Substances affecting the
properties securing the Credit Facility, or
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any other property owned by the Borrower that would require
the Borrower to notify any environmental agency, of any
federal, state or local government of such spill or cleanup;
or (2) any complaint, violation, notice or citation regarding
any permit controlling the environmental health or safety
violation of the Borrower, including health or safety
violation of the Borrower, including without limitation, any
notice from the Environmental Protection Agency.
(xiv) indemnify and hold the Bank harmless from and against any and
all claims, losses, liability, damages and injuries of any
kind whatsoever incurred or suffered by or asserted against
the Bank with respect to or as a direct result of the
presence, escape, seepage, spillage, leaking, discharge or
migration from any of the properties securing the Credit
Facility of any Hazardous Substance, including without
limitation, any claims asserted or arising under CERCLA, RCRA
or the Texas Solid Waste Disposal Act, regardless of whether
or not caused by or within the control of the Borrower.
(xv) cause each agreement between the Borrower and the holder of
any debt subordinated to the Loan to provide that such holder
may not accelerate the payment of such subordinated debt until
all amounts outstanding hereunder, now or in the future, are
repaid or prepaid in full.
(xvi) maintain its Inventory and other properties in good and safe
working order. The Bank shall have the right to perform an
inspection of Borrower's Inventory and properties four (4)
times per year upon at least two (2) days' prior notice to the
Borrower. The costs of such inspections shall be borne by the
Borrower.
(xvii) deliver to the Bank an Administrative Distribution Report,
Interest Distribution Report, or Excess Distribution Report,
as the case may be, three (3) days prior to any distribution
by the Borrower of the kind described in Section 9(d) hereof,
each in form substantially similar to Exhibit C-1, C-2 or C- 3
attached hereto, as appropriate.
(c) Negative Covenants. The Borrower undertakes to the Bank that
so long as any amount is owing hereunder it will not without the prior written
consent of the Bank:
(i) create or permit to subsist, without the prior written consent
of the Bank, any mortgage, pledge, lien or other
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security interest on any or all of its present or future
revenues, properties or assets except liens in favor of Saudi
Fal and Arabian Shield duly subordinated to any liens in favor
of the Bank and liens permitted by the Security Documents or
with the prior written consent of the Bank or as disclosed to
the Bank in writing and accepted by the Bank on the Closing
Date;
(ii) borrow any money, enter into any lease or other financial
obligation or enter into any guarantee for the obligations or
the indebtedness of any third party without the prior written
consent of the Bank except (1) loans or leases entered into in
connection with the acquisition of equipment in the ordinary
course of business, which loans or leases shall not exceed
$100,000 in the aggregate at any time and (2) one or more
letters of credit issued by Silsbee State Bank, naming Vastar
Resources, Inc. as beneficiary, the aggregate face amount of
which shall not exceed USD 110,000;
(iii) merge with any other entity or change its present line of
business. For the purposes of this Restated Agreement, the
Borrower's line of business shall be the owning, acquisition,
production, refining, transportation and sale of hydrocarbon
products;
(iv) make any investments or lend money to any party without the
prior written consent of the Bank except for short-term
employee loans not exceeding $40,000 in the aggregate;
(v) except for Permitted Distributions, make any payment of
interest on or principal of any debt subordinated to the Loan
or any dividend payments or distributions to its shareholders
without the prior written consent of the Bank;
(vi) make capital expenditures in any fiscal year of more than
$200,000;
(vii) make any change in the address of its chief executive office
without the prior written consent of the Bank, which consent
shall not be unreasonably withheld;
(viii) sell or assign the accounts, contract rights or receivables
pertaining to its business or sell, lease, abandon or
otherwise dispose of, directly or indirectly, its assets
except in ordinary course of business;
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19
(ix) allow its Current Ratio to be less than 2.10:1.0;
(x) allow its Fixed Charge Coverage Ratio to be less than 1.40:1.0
on a quarterly basis; provided, that the Fixed Charge Coverage
Ratio shall not be less than 1.55:1.0 in any two (2)
consecutive quarters;
(xi) allow its Fixed Charge Coverage Ratio to be less than 1.65:1.0
on a rolling four-quarter basis; or
(xii) allow the interest rate on the Borrower's indebtedness to
Saudi Fal or Arabian Shield to be greater than the interest
rate hereunder at any time.
(d) Distributions. For purposes of Section 9(c) hereof,
"Permitted Distribution" shall mean an Administrative Distribution, Interest
Distribution, or Excess Distribution, subject to the following conditions:
(i) An Administrative Distribution shall be a Permitted
Distribution only if (1) no Event of Default has occurred and
is continuing, or will be caused by such distribution, (2) the
Commitment does not exceed the Borrowing Base, (3) the
expenses related to such distribution are properly documented
and such documentation is provided to the Bank prior to such
distribution, and (4) the aggregate annual amount of such
distributions does not exceed USD 60,000.
(ii) Subject to the additional conditions in Subsection (iv) below,
an Interest Distribution shall be a Permitted Distribution
provided that such distributions shall not exceed USD 17,500
per month and represents interest actually owed to Saudi Fal
and Arabian Shield.
(iii) Subject to the additional conditions in Subsection (iv) below,
an Excess Distribution shall be a Permitted Distribution only
if such distribution is applied to the principal of any debt
outstanding by the Borrower to Saudi Fal or Arabian Shield.
(iv) Notwithstanding the provisions of Subsections (ii) and (iii)
above, no Excess Distribution or Interest Distribution shall
be a Permitted Distribution unless the following conditions
are met:
(1) the aggregate of all such distributions in any fiscal
quarter may not exceed 25% of Borrower's net
17
20
income from the immediately preceding fiscal quarters;
(2) the aggregate of such distributions for any four
quarter period may not exceed 25% of Borrower's
income for the four quarter period ending with the
quarter immediately preceding the quarter in which
the distribution is made;
(3) the Borrower's Current Ratio for the quarter
immediately preceding such distribution is not less
than 2.25:1.0;
(4) the Borrower's Fixed Charge Coverage Ratio for the
quarter immediately preceding such distribution is
not less than 1.55:1.0;
(5) the Borrower's Fixed Charge Coverage Ratio for the
immediately preceding four quarters is not less than
1.80:1.0; and
(6) no Event of Default has occurred and is continuing or
will be caused by such distribution.
10. CHANGES IN CIRCUMSTANCES
(a) In the event that any applicable law or regulation shall
subject the Bank to any Taxes or impose any reserve deposit or other
requirements against any assets or liabilities of the Bank, the result of which
is to increase the cost to the Bank of making or maintaining the Credit
Facility or to reduce the amount of principal or interest received by the Bank,
then the Borrower shall be required to compensate the Bank for such additional
cost or reduction.
(b) In the event that any applicable law or regulation shall make
it unlawful for the Bank to make or maintain the Credit Facility, then the
Bank's obligations hereunder shall terminate, and all amounts owing by the
Borrower to the Bank shall become due and repayable forthwith.
(c) If the circumstances contemplated by subclause (a) or(b) above
should occur and the Bank intends to invoke the conditions contained therein,
then the Bank shall promptly advise the Borrower thereof.
(d) Should the conditions of subsection (a) above be invoked and
the Borrower find the resultant additional cost to be unaccept-
18
21
able, then the Borrower shall prepay any amounts outstanding hereunder on the
next Payment Date.
(e) If the Borrower prepays any amounts outstanding hereunder in
accordance with subsection (d) above, then it shall nonetheless compensate the
Bank for additional costs defined under subsection (a) above up to and
including the date of prepayment.
11. FEES, COSTS AND EXPENSES
(a) The Borrower shall pay to the Bank upon demand, all reasonable
costs, charges and expenses (including legal fees) incurred by the Bank in
connection with the preparation, execution, amendment and enforcement of this
Restated Agreement and the Security Documents and the preservation of the
Bank's rights hereunder and thereunder.
(b) The Borrower shall pay to the Bank within ninety (90) of the
Closing Date a facility fee of USD 25,000.
(c) The Borrower shall pay a commitment fee to the Bank on the
unused portion of the Credit Facility at the rate of 1/2 of 1% per annum on
such unused portion, payable quarterly in arrears on the last day of each such
quarter and commencing September 30, 1996.
(d) The obligations of the Borrower under this Section 12 shall
survive the repayment of all amounts outstanding hereunder and all interest due
thereon.
12. PAYMENTS
(a) All payments hereunder shall be made to the following account:
Unibank New York
For the account of Den norske Bank, New York Branch
Account No. 00000000
Ref. South Hampton Refining Company
(b) In the event of any payments hereunder not being received on
the due date therefor, interest will be charged by the Bank from the due date
until the date that payment is received at a rate corresponding to the
aggregate of the Margin plus 2% (two percent) and the Prime Rate as defined in
Section 5(a)(i) hereof. Subject to the provisions of Section 5(c) hereof,
interest charged under this subsection (b) shall be added to the defaulted
amount on each Payment Date until the defaulted amount is repaid in full.
19
22
(c) All payments to be made by the Borrower hereunder shall be
made without set-off or counterclaim and free and clear or and without
deduction for or on account of any present or future Taxes of any nature now or
hereafter imposed unless the Borrower is compelled by law to make payment
subject to any such Tax. In that event the Borrower shall pay to the Bank such
additional amounts as may be necessary to insure that the Bank receives a net
amount which the Bank would have received had payment not been made subject to
such Tax.
(d) If the Credit Facility or any part thereof is, for any reason
whatsoever, prepaid or repaid on a day other than a Payment Date, the Borrower
shall pay to the Bank on request such amount or amounts as may be necessary to
compensate the Bank for any loss or premium or penalty incurred by it in
respect of the liquidation or reemployment of funds borrowed for the purpose of
maintaining such Facility.
13. CALCULATION
All interest, commission and any other payments hereunder of an annual
nature shall accrue from day to day and be calculated on the actual number of
days elapsed and on the basis of a 365 or 366 day year, as appropriate.
14. EVENTS OF DEFAULT
Upon notice from the Bank to the Borrower, the obligations of the Bank
hereunder shall terminate forthwith and any amounts outstanding under this
Restated Agreement and the Note (including interest accrued thereon) shall
become immediately repayable (together with any compensatory amounts necessary)
if any of the following events of default ("Events of Default") has occurred
under this Restated Agreement:
(a) If the Borrower fails to pay any sum due hereunder on the due
date.
(b) If the Borrower defaults in the due performance and observance
of any of the terms, covenants, undertakings and conditions on its part
contained herein or in the Security Documents and such default continues
unremedied for a period of 10 days.
(c) If any representation made by the Borrower in this Restated
Agreement or any notice, certificate, or statement delivered or made pursuant
hereto or under the Security Documents proves to be incorrect, inaccurate or
misleading in any material manner when made.
20
23
(d) If a default is declared under any of the Security Documents.
(e) If a distress or other execution is levied upon, or against
any substantial part of the property of the Borrower and is not discharged
within 15 days.
(f) If the Borrower is unable to or admits in writing its
inability to pay their debts as they mature, or makes a general assignment for
the benefit of its creditors.
(g) If any proceedings are commenced in, or any order or judgment
is given by, any competent court for the liquidation, winding up or
reorganization of the Borrower or any order shall be made by any competent
court or resolution passed by the Borrower for the appointment of a receiver or
a similar functionary for all or a substantial part of its assets, save for the
purpose of amalgamation, reorganization or merger not involving insolvency the
terms of which shall have received the prior written approval or the Bank, and
as otherwise permitted herein.
(h) If the Borrower ceases or threatens to cease to carry on its
business or disposes or threatens to dispose of a substantial part of its
business, properties, or assets or the same are seized or appropriated for any
reason and not released within 30 days.
(i) If any license, consent, permission or approval required in
connection with this Restated Agreement or any Security Document is revoked,
terminated or modified in a manner which would materially restrict or limit the
operation of any property owned or operated by the Borrower.
(j) Default by the Borrower under any other agreement or indenture
for the borrowing of money or the guarantee of a third party's obligations.
(k) If Xxxxxxxx X. Xxxxxx shall cease to be President of the
Borrower.
Provided, however, that notwithstanding anything to the contrary in
this Restated Agreement, in the event the Borrower has cured any Event of
Default prior to the Bank having given notice of acceleration of the amounts
owed under this Restated Agreement with respect to such Event of Default, then
such Event of Default shall be deemed not to have occurred and the Bank shall
not be entitled to accelerate the Borrower's payment obligations hereunder.
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24
15. NOTICES AND CORRESPONDENCE
(a) Except as otherwise provided in this Section 16, all notices,
requests, consents, demands and other communications provided for or permitted
hereunder shall be effective when duly deposited in the mails, certified,
return receipt requested, or delivered to Federal Express or similar courier
company or transmitted by telex or telefax, addressed to the respective party
at the address set forth below, except that notices to the Bank shall not be
effective until received.
Bank: Den norske Bank ASA, Representative Xxxxxx
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telefax No. (000) 000-0000
Attention: Xxxxx Xxxxxx
with a copy to
Den norske Bank ASA, New York Branch
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telefax No. (000) 000-0000
Attention: Customer Service
Borrower: South Hampton Refining Company
Xxxxxxx 000
Xxxxxxx, Xxxxx 00000
Telefax No.: (000) 000-0000
Attention: President
(b) Either of the parties hereto may change its respective address
by notice in writing given to the other party to this Restated Agreement.
(c) All information required to be provided by the Borrower to the
Bank pursuant to Section 9(b) above shall be sent to the Bank at the above
Houston address by first class U.S. mail and to the Oslo address by first class
air mail.
(d) Time is of the essence of this Restated Agreement but no
failure or delay on the part of the Bank to exercise any power or right under
this Restated Agreement shall operate as a waiver thereof or preclude the
exercise of any other power or right. The remedies provided herein are
cumulative, and are not exclusive of any remedies provided by law.
22
25
16. GOVERNING LAW AND JURISDICTION
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK AND THE BORROWER HEREBY IRREVOCABLE SUBMITS
TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE FEDERAL
COURTS LOCATED IN NEW YORK.
17. FINAL AGREEMENT
THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES, COMPLETELY REPLACES CREDIT AGREEMENT REFERRED TO HEREIN, AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE
PARTIES.
18. COUNTERPARTS
The Agreement shall be executed in any number of counterparts each of
which, when so executed, shall be deemed an original, but all such counterparts
shall constitute but one and the same instrument.
IN WITNESS whereof the parties hereto have caused this Agreement to be
duly executed by their duly authorized representatives.
SOUTH HAMPTON REFINING COMPANY
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
DEN NORSKE BANK ASA
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
23
26
EXHIBIT A TO AMENDED AND
RESTATED CREDIT AGREEMENT
SOUTH HAMPTON REFINING COMPANY
PROMISSORY NOTE
October 15, 1996 USD 1,965,000.00
FOR VALUE RECEIVED, SOUTH HAMPTON REFINING COMPANY (herein called the
"Undersigned") hereby promises to pay to Den norske Bank ASA, or order, on or
before December 31, 1998 on demand, ONE MILLION NINE HUNDRED SIXTY-FIVE
THOUSAND AND NO/100 DOLLARS OF THE UNITED STATES OF AMERICA (USD 1,965,000.00)
and to pay interest on the unpaid portion of said principal sum outstanding
from time to time, as hereinafter provided.
Principal and Interest
1.1 (a) Interest on this Note shall be payable at the times and the
rates as provided in Section 5 of the Amended and Restated Credit Agreement
(the "Restated Credit Agreement") dated October 15, 1996, between the
Undersigned and the payee hereof.
(b) In case any payment of principal or interest is not paid when
due, additional interest at the rate determined as provided in Section 13(b) of
the Restated Credit Agreement shall be payable on all overdue principal and, to
the extent that the same may be lawful, on all overdue interest. 1.2
Interest shall be calculated on the outstanding principal amounts and on the
basis of the actual number of days and a year of 365 or 366 days, as
appropriate.
27
1.3 The principal of this Note shall be payable as provided in Section 6
of the Restated Credit Agreement.
SECURITY
2.1 This Note is issued under and pursuant to the Restated Credit
Agreement and is, in part, a renewal, restructure and rearrangement of the
indebtedness evidenced by the promissory note dated March 3, 1988 from the
Undersigned to the payee of this Note. Reference is hereby made to the Restated
Credit Agreement for a description of the security of this Note, the nature and
extent of the security afforded thereby and the rights of the Undersigned and
the holder hereof with respect to such security. Payment of this Note may be
demanded by the holder hereof prior to the maturity of this Note under certain
circumstances and conditions, in the manner, and with the effect, provided in
the Restated Credit Agreement and the Security Documents described therein.
MISCELLANEOUS
3.1 All parties hereto, including endorsers hereof, hereby waive
presentment for payment, demand, protest and notice of protest and non-payment
hereof and hereby consent that any and all securities or other property, if
any, held by the holders hereof at any time as security for this Note may be
exchanged, released or surrendered and that the time of payment of this Note
may be extended, all in the sole discretion of the holder hereof and without
notice and
2
28
without affecting in any manner the liability of the parties hereto.
3.2 No course of dealing between the Undersigned and the holder hereof in
exercising any rights hereunder shall operate as a waiver of any right of any
holders except to the extent expressly waived in writing by such holder.
3.3 Whenever any payment to be made hereunder shall be due on a Saturday,
Sunday or public holiday under the laws of the place where payment is to be
made pursuant to the Restated Credit Agreement or other day on which banking
institutions at such place are not open for business, such payments shall be
made on the next day on which such banking institutions are open for business
after such holiday.
3.4 Any notice to be given pursuant to this Note shall be given in
accordance with Section 16 of the Restated Credit Agreement.
IN WITNESS WHEREOF, the Undersigned has caused this Note to be duly executed
the day and year first above written.
SOUTH HAMPTON
REFINING COMPANY
By:
-----------------------
Name:
---------------------
Title:
--------------------
3
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EXHIBIT B TO AMENDED AND
RESTATED CREDIT AGREEMENT
BORROWING BASE CERTIFICATE
1. Cash in Cash Collateral Accounts USD_____________________
90% USD_____________________
2. Eligible Accounts Receivable* USD_____________________
80% USD______________________
3. Inventory (at market price)*
Raw materials USD______________________
Finished products USD______________________
60% USD______________________
5. Total 1, 2 and 3 USD______________________
6. Outstanding to DnB USD______________________
Certified as true and correct:
SOUTH HAMPTON REFINING COMPANY
By:
----------------------------
Title:
-------------------------
Date: 199
----------------------, ---
* Detailed listing attached
30
RATIFICATION OF SECURITY AGREEMENT
This Ratification of Security Agreement ("Ratification") is made and
entered into as of the ____ day of ________, 1996 by and between South Hampton
Refining Company, a Delaware corporation ("Borrower") and DEN NORSKE BANK ASA,
a Norwegian bank ("Bank" or "Secured Party"). For and in consideration of the
mutual covenants and agreements herein contained, Borrower and Secured Party
hereby ratify as of the date of this Ratification that certain Security
Agreement (the "Security Agreement") between Borrower and Secured Party dated
as of the 14th day of January, 1985, relating to the loan by the Bank to the
Borrower as more fully described herein.
WHEREAS, Borrower and Bank entered into that certain Credit Agreement
dated March 3, 1988 (as amended from time to time, the "1988 Credit
Agreement");
WHEREAS, Borrower and Bank executed the Amended and Restated Credit
Agreement of even date herewith (the "Restated Credit Agreement"), amending and
restating the 1988 Credit Agreement, to, among other things, provide for a
revolving loan facility in an aggregate principal amount not to exceed ONE
MILLION NINE HUNDRED SIXTY-FIVE THOUSAND AND NO/100 DOLLARS ($1,965,000.00)
(the "Loan") and Secured Party has required execution of this Ratification to
confirm the continued application of the Security Agreement to the Loan made
pursuant to the Restated Credit Agreement.
NOW THEREFORE, Borrower and Secured Party agree as follows:
The Security Agreement shall remain unchanged and the terms,
conditions, representations, warranties, and covenants of said
Security Agreement are true as of the date hereof, are ratified and
confirmed in all respects and shall be continuing and binding upon
Borrower and
31
shall be fully applicable to all loans made pursuant to the Restated
Credit Agreement, including, without limitation, the Loan.
This Ratification shall be deemed to be a contract under and subject
to, and shall be construed for all purposes in accordance with the laws of the
State of Texas.
IN WITNESS WHEREOF, the parties have caused this Ratification to be
executed by their duly authorized officers as of the ____ day of
__________, 1996.
SOUTH HAMPTON REFINING COMPANY
By:
-----------------------------
Name:
Title: President
DEN NORSKE BANK ASA
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
32
RATIFICATION OF PLEDGE AGREEMENT
This Ratification of Pledge Agreement ("Ratification") is made and
entered into as of the ____ day of ________, 1996 by and between American
Shield Refining Company, a Delaware corporation ("Pledgor") and DEN NORSKE BANK
ASA, a Norwegian bank ("Bank" or "Pledgee"). For and in consideration of the
mutual covenants and agreements herein contained, Pledgor and Pledgee hereby
ratify as of the date of this Ratification that certain Pledge Agreement and
Irrevocable Proxy ("Pledge") between Pledgor and Pledgee dated as of the 13th
day of December, 1990, relating to the loan in an amount of up to $1,965,000.00
to South Hampton Refining Company, a Texas corporation ("Borrower").
WHEREAS, Borrower and Bank entered into that certain Credit Agreement
dated March 3, 1988 (as amended from time to time, the "1988 Credit
Agreement");
WHEREAS, Borrower and Bank executed the Amended and Restated Credit
Agreement of even date herewith (the "Restated Credit Agreement"), amending and
restating the 1988 Credit Agreement, to, among other things, provide for a
revolving loan facility in an aggregate principal amount not to exceed ONE
MILLION NINE HUNDRED SIXTY-FIVE THOUSAND AND NO/100 DOLLARS ($1,965,000.00)
(the "Loan") and Pledgee has required execution of this Ratification to confirm
the
33
continued application of the Pledge Agreement to the Loan made pursuant to the
Restated Credit Agreement.
NOW THEREFORE, Pledgor and Pledgee agree as follows:
The Pledge Agreement shall remain unchanged and the terms,
conditions, representations, warranties, and covenants of said Pledge
Agreement are true as of the date hereof, are ratified and confirmed
in all respects and shall be continuing and binding upon Pledgor and
shall be fully applicable to all loans made pursuant to the Restated
Credit Agreement, including, without limitation, the Loan.
This Ratification shall be deemed to be a contract under and subject
to, and shall be construed for all purposes in accordance with the laws of the
State of Texas.
IN WITNESS WHEREOF, the parties have caused this Ratification to be
executed by their duly authorized officers as of the ____ day of __________,
1996.
AMERICAN SHIELD REFINING COMPANY
By:
-----------------------------
Name:
Title: President
DEN NORSKE BANK ASA
By:
-----------------------------
Name:
--------------------------
Title:
--------------------------
By:
-----------------------------
Name:
--------------------------
Title:
--------------------------
2
34
RATIFICATION OF ASSIGNMENT OF INSURANCES
This Ratification of Assignment of Insurances ("Ratification") is made
and entered into as of the ____ day of ________, 1996 by and among South
Hampton Refining Company, a Delaware corporation ("Borrower"), Gulf State Pipe
Line Company, Inc. ("Gulf State") and DEN NORSKE BANK ASA, a Norwegian bank
("Bank" or "Assignee"). For and in consideration of the mutual covenants and
agreements herein contained, Borrower, Gulf State and Assignee hereby ratify as
of the date of this Ratification that certain Assignment of Insurances (the
"Assignment") among Borrower, Gulf State and Assignee dated as of the 3rd day
of March, 1988, relating to the loan by the Bank to the Borrower as more fully
described herein.
WHEREAS, Borrower and Bank entered into that certain Credit Agreement
dated March 3, 1988 (as amended from time to time, the "1988 Credit
Agreement");
WHEREAS, Borrower and Bank executed the Amended and Restated Credit
Agreement of even date herewith (the "Restated Credit Agreement"), amending and
restating the 1988 Credit Agreement, to, among other things, provide for a
revolving loan facility in an aggregate principal amount not to exceed ONE
MILLION NINE HUNDRED SIXTY-FIVE THOUSAND AND NO/100 DOLLARS ($1,965,000.00)
(the "Loan") and Assignee has required execution of this Ratification to
confirm the continued application of the Security Agreement to the Loan made
pursuant to the Restated Credit Agreement.
35
NOW THEREFORE, Borrower, Gulf State and Assignee agree as follows:
The Assignment shall remain unchanged and the terms,
conditions, representations, warranties, and covenants of said
Assignment are true as of the date hereof, are ratified and confirmed
in all respects and shall be continuing and binding upon Borrower and
Gulf State and shall be fully applicable to all loans made pursuant to
the Restated Credit Agreement, including, without limitation, the
Loan.
This Ratification shall be deemed to be a contract under and subject
to, and shall be construed for all purposes in accordance with the laws of the
State of Texas.
IN WITNESS WHEREOF, the parties have caused this Ratification to be
executed by their duly authorized officers as of the ____ day of __________,
1996.
SOUTH HAMPTON REFINING COMPANY
By:
--------------------------------
Name:
Title: President
GULF STATE PIPE LINE COMPANY, INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
DEN NORSKE BANK ASA
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
36
SUBORDINATION AGREEMENT
This SUBORDINATION AGREEMENT, dated this 15th day of October, 1996,
among Saudi Fal, a limited liability company incorporated under the laws of the
Kingdom of Saudi Arabia ("Saudi Fal"), South Hampton Refining Company, a
company organized and existing under the laws of the State of Texas (the
"Borrower"), Texas Oil & Chemical Co. II, Inc., a company organized and
existing under the laws of the State of Texas ("TOCCO"), Arabian Shield
Development Company ("ASDC"), a company organized and existing under laws of
the State of Delaware, American Shield Refining Company ("ASRC"), a company
organized and existing under the laws of the State of Delaware, Gulf State
Pipeline Company ("Gulf State"), a company organized and existing under the
laws of the State of Texas and Den Norske Bank, ASA, a Norwegian bank ("DnB").
RECITALS
A. Saudi Fal is the owner and holder of certain indebtedness
executed by the Borrower and payable to Saudi Fal as more further evidenced by
a Second Lien Promissory Note dated the 15th day of October, 1996, attached
hereto as Exhibit A and made a part hereof for all purposes (the "Saudi Fal
Note");
X. XXXXX is the owner of all of the issued and outstanding common
stock of Borrower;
C. Pursuant to the Amended and Restated Credit Agreement for an
amount up to $1,965,000 executed by and between DnB and Borrower (the "Restated
Credit Agreement"), DnB has agreed to refinance, renew, extend and restructure
its existing loan to Borrower;
D. In order to induce DnB to enter into the Restated Credit
Agreement, Saudi Fal, Borrower, TOCCO, ASDC, ASRC and Gulf State have agreed to
enter into this Subordination Agreement;
E. Pursuant to 3.2k of the Restated Credit Agreement, DnB has
provided that as a condition precedent to the execution of the Amended Credit
Agreement and the extension restructuring of its existing loan to Borrower that
Saudi Fal, Borrower, TOCCO, ASDC, ASRC and Gulf State execute this
Subordination Agreement;
F. Saudi Fal shall subordinate all amounts owed by Borrower or
TOCCO to all amounts due to DnB under the Restated Credit Agreement, and Saudi
Fal acknowledges and agrees that payments under the Saudi Fal Note shall be
limited to the Permitted Distributions as defined in Section 9(d) of the
Restated Credit Agreement;
G. Saudi Fal further agrees that notwithstanding the terms of the
Saudi Fal Note, the Saudi Fal Note shall not be considered in default even if
payments principal or interest
1
37
are not made as required under the Saudi Fal Note if limited by the Permitted
Distributions as set forth in the Restated Credit Agreement; and
H. Saudi Fal acknowledges that it is to its benefit for Bank
refinance, renew, extend and restructure the DnB Loan to Borrower.
NOW, THEREFORE, in consideration of the DnB refinancing, renewing,
extending and restructuring the DnB Loan to Borrower and in further
consideration of the recitals set forth above which are made a part of this
Subordination Agreement as if fully set forth below, the parties hereto agree
as follows:
1. Subordination. (a) Saudi Fal agrees that no payments of principal
or interest shall be made to Saudi Fal under the Saudi Fal Note or by Borrower
or TOCCO to Saudi Fal under any separate indebtedness unless all payments of
any amounts including principal and interest that are due under the Restated
Credit Agreement have been paid by Borrower to DnB. Saudi Fal subordinates all
amounts owed by it by the Borrower or TOCCO to all amounts outstanding under
the Restated Credit Agreement. As stated above, Saudi Fal agrees that
notwithstanding the terms of the Saudi Fal Note, the Saudi Fal Note shall not
be in default even if payments of principal or interest are not paid as
required under Saudi Fal Note if limited by the Permitted Distributions set
forth in the Restated Credit Agreement.
2. Representations and Warranties. Saudi Fal and TOCCO hereby
represents and warrants as follows:
(a) That each is a corporation duly organized, validly existing
and in good standing under the laws of the state, nation or
kingdom of its incorporation and are authorized to do business
in the jurisdictions in which its ownership of property or
conduct of business legally requires such authorization, and
each has full power, authority and legal right to own its
properties and assets and to conduct its business as presently
conducted or proposed to be conducted.
(b) It has full power, authority and legal right to execute
deliver, and to perform and observe the provisions of this
Agreement.
(c) The execution, delivery and performance by each of this
Agreement has been duly authorized by all necessary corporate
or company action. This Agreement constitutes the legal,
valid and binding obligation of each, and is enforceable
against each in accordance with its terms.
3. Negative Covenants. So long as any part of the DnB Loan shall
remain unpaid:
(a) Saudi Fal will subordinate any security interest, pledge, deed
of trust, indenture or assignment that it may have as to any
assets of Borrower to the security interests of DnB identified
in the Restated Credit Agreement.
2
38
(b) TOCCO will not sell or otherwise dispose of, or grant any
option with respect to or pledge or create or permit to exist
any lien, security interest, or other charge or encumbrance
upon or with respect to any of the shares of capital stock of
Borrower owned by TOCCO except for the creation of the pledge
of capital stock that may be required by or as evidenced in
the Restated Credit Agreement in favor of DnB.
(c) No funds from either the Borrower or TOCCO shall be
transferred to Saudi Fal or from the Borrower to TOCCO at any
time prior to the execution of this Agreement or hereafter in
violation of the terms of the Restated Credit Agreement.
(d) No funds of the Borrower will be transferred to Saudi Fal or
to TOCCO other than to pay ordinary and necessary
administrative expenses directly related to the operation of
the Borrower's refinery in Silsbee, Xxxxxx County, Texas.
4. Consent by DnB to Subordinated Security Interest. DnB consents to
lending by Saudi Fal to Borrower of funds up to the face amount of the Saudi
Fal Note. DnB also consents to the execution of the Saudi Fal Note. Although
no financing statements, security agreements or deed of trusts covering the
physical assets of Borrower and Gulf State has yet been executed or recorded,
DnB consents to the execution and recording of such financing statements,
security agreements or deed of trusts to secure the Saudi Fal Note, provided,
however, that any such financing statements, security agreements and deeds of
trust executed to cover any such physical assets shall be subordinate to the
liens securing the indebtedness of Borrower to DnB which is subject to the
Restated Credit Agreement, and that no foreclosure proceedings shall be
instituted by the holder of the Saudi Fal Note against any part of the physical
assets of Borrower or Gulf State so long as the indebtedness to DnB is
outstanding, without the prior written consent of DnB. The limitation herein
against foreclosure proceedings without the consent of DnB shall not limit any
right the holder of the Saudi Fal Note may have under the terms of the Saudi
Fal Note an applicable law to seek a judgment on the Saudi Fal Note and, in
accordance with law, to abstract and enforce the collection of any judgment
obtained on the Saudi Fal Note, except, that, prior to five (5) years after the
date of final maturity of the Saudi Fal Note, no writ of execution or
garnishment or other judgment collection process shall be directed against any
property, real or personal, against or in which DnB has a lien or security
interest. DnB agrees that if it commences a judicial or non-judicial
proceeding to enforce its security interest, Saudi Fal shall have the right to
either join such an action or commence its own action to protect its right.
5. Restated Credit Agreement. Saudi Fal and TOCCO acknowledge
receipt of a copy of the Restated Credit Agreement, in execution form and
hereby consent and agree to the terms and conditions of the Restated Credit
Agreement.
3
39
6. Amendments of Agreement. No amendment or waiver of this Agreement
nor consent to any departure by Saudi Fal or TOCCO here from shall in any event
be effective unless the same are written amendments signed by the duly
authorized representative DnB, and then such waiver or consent shall be
effective only as to the specific incidence or the specific purpose for which a
written amendment has been given.
7. Addresses for Notices. All notices and other communications
provided for hereunder shall be in writing (including telegraphic or
telefacsimile communication), and if to the parties as set forth below:
Den Norske TOCCO Saudi Fal
000 Xxxx Xxxxxx X.X. Xxx 0000 Fal Holdings Arabia Co., Ltd.
Xxxxx 0000 Xxxxxxx, XX 00000 Xx Xxxxx Xxxx
Xxxxxxx, XX 00000 X.X. Xxx 0000
Xxxxxx, 00000 Xxxxx Xxxxxx
or as to any of the above-named parties at such other address as may be
designated by such party in a written notice to the all other parties to this
Agreement. All such notices and other communications shall, when mailed,
telexed or telefacsimilied, be effective, when deposited in the mails or sent
by telex or telefacsimile, addressed as herein stated.
8. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Texas.
EXECUTED BY EACH OF THE PARTIES TO THIS AGREEMENT AS NAMED ABOVE ON
SEPARATE ORIGINAL SIGNATURE PAGES WHICH THE PARTIES AGREE SHALL BE AFFIXED TO
AND DEEMED TO BE AN ORIGINAL OF THIS MODIFICATION AGREEMENT.
SOUTH HAMPTON REFINING COMPANY
By:
------------------------------------
Its:
-----------------------------------
STATE OF TEXAS
COUNTY OF XXXXXX
This instrument was acknowledged before me on the ______day of______,
1996, by ____________________.
--------------------------------------
Notary Public, State of Texas
4
40
EXECUTION PAGE TO
SUBORDINATION AGREEMENT
ARABIAN SHIELD DEVELOPMENT COMPANY
By:
------------------------------------
Its:
-----------------------------------
STATE OF TEXAS
COUNTY OF DALLAS
This instrument was acknowledged before me on the ______ day of______,
1996, by ________________________.
--------------------------------------
Notary Public, State of Texas
5
41
EXECUTION PAGE TO
SUBORDINATION AGREEMENT
AMERICAN SHIELD REFINING COMPANY
By:
------------------------------------
Its:
-----------------------------------
STATE OF TEXAS
COUNTY OF DALLAS
This instrument was acknowledged before me on the _______day of______,
1996, by _________________________.
--------------------------------------
Notary Public, State of Texas
6
42
EXECUTION PAGE TO
SUBORDINATION AGREEMENT
TEXAS OIL & CHEMICAL CO. II, INC.
By:
------------------------------------
Its:
-----------------------------------
STATE OF TEXAS
COUNTY OF XXXXXX
This instrument was acknowledged before me on the ________day of_____,
1996, by ________________________.
------------------------------------
Notary Public, State of Texas
7
43
EXECUTION PAGE TO
SUBORDINATION AGREEMENT
GULF STATE PIPELINE COMPANY
By:
------------------------------------
Its:
-----------------------------------
STATE OF TEXAS
COUNTY OF XXXXXX
This instrument was acknowledged before me on the ________day
of______, 1996, by ________________________.
--------------------------------------
Notary Public, State of Texas
8
44
EXECUTION PAGE TO
SUBORDINATION AGREEMENT
SAUDI FAL
By:
------------------------------------
Its:
------------------------------------
9
45
EXECUTION PAGE TO
SUBORDINATION AGREEMENT
DEN NORSKE BANK, ASA
By:
------------------------------------
Its:
-----------------------------------
STATE OF TEXAS
COUNTY OF
-----------------------
This instrument was acknowledged before me on the _______day of______,
1996, by _______________________.
-------------------------------
Notary Public, State of Texas
10
46
TERMINATION AGREEMENT
This Termination Agreement ("Agreement") is made as of ____________,
1996, by and among Den norske Bank ASA ("DnB") and Saudi Fal,
a Saudi Arabian company ("Saudi Fal").
WHEREAS, DnB and Saudi Fal entered into an Intercreditor Agreement
dated ______________ (together with any prior agreements, or amendments,
modifications or extensions thereof, the "Intercreditor Agreement"); and
WHEREAS, DnB, Saudi Fal and American Shield Refining Company have
agreed to the terms of a new intercreditor agreement respecting the relative
rights of the parties relating to debts owed them by South Hampton Refining
Company (the "New Intercreditor Agreement"); and
WHEREAS, DnB and Saudi Fal desire to terminate their respective rights
and obligations under the Intercreditor Agreement.
NOW THEREFORE, for and in consideration of the mutual promises set
forth herein, the receipt and legal sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. By their execution of this Agreement, the parties hereto agree
to terminate the Intercreditor Agreement, and the Intercreditor Agreement, and
all rights and obligations thereunder, are hereby terminated. Upon execution
of this Agreement by both parties, DnB shall execute and deliver to Saudi Fal,
and Saudi Fal shall execute and deliver to DnB, the New Intercreditor
Agreement.
2. The parties hereby release each other from all claims, causes
of action, debts, liabilities and obligations with respect to the Intercreditor
Agreement and the relationship created thereunder except as specifically
otherwise provided by this Agreement; it being understood that this Agreement
constitutes a complete termination of the Intercreditor Agreement and shall in
no way be construed as an amendment, modification, extension or novation
thereof.
3. Each party shall indemnify and hold harmless the other from
any and all obligations, claims, demands or liabilities now existing or
hereafter arising out of the acts or omissions of that party, its agents and
employees with respect to the Intercreditor Agreement.
4. This Agreement constitutes the entire agreement of the parties
with respect to the subject matter hereof and except as herein provided there
are no other oral or written understandings
47
or agreements between the parties hereto relating to the subject matter hereof.
5. This Agreement shall be binding upon the parties and their
respective agents, representatives, employees, successors and assigns.
6. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Texas.
IN WITNESS WHEREOF, the parties have duly executed this Termination
Agreement as of the date stated above.
SAUDI FAL
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
DEN NORSKE BANK ASA
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
48
RATIFICATION OF SUBORDINATION AGREEMENT
This Ratification of Subordination Agreement (the "Ratification")
dated this 15th day of October, 1996, is executed by and among Arabian Shield
Development Company ("ASDC"), a company organized and existing under laws of
the State of Delaware, American Shield Refining Company ("ASRC"), a company
organized and existing under the laws of the State of Delaware, South Hampton
Refining Company, a company organized and existing under the laws of the State
of Texas (the "Borrower"), Texas Oil & Chemical Co. II, Inc., a company
organized and existing under the laws of the State of Texas ("TOCCO"), Gulf
State Pipeline Company ("Gulf State"), a company organized and existing under
the laws of the State of Texas and Den Norske Bank, ASA, a Norwegian bank
("DnB").
RECITALS
A. DnB has agreed to refinance, renew, extend and restructure a loan
of $1,965,000 to Borrower as evidenced by that certain Amended and Restated
Credit Agreement executed by DnB and Borrower dated the 15th day of October,
1996 (the "Restated Credit Agreement").
B. DnB has agreed to refinance, renew, extend and restructure the DnB
Loan in consideration for the ratification by ASDC, ASRC, Borrower, TOCCO and
Gulf State of their obligations and agreements as set forth in that certain
Subordination Agreement dated among the parties hereto as of July 28, 1989, and
attached hereto as Exhibit A and made a part hereof for all purposes (the
"Subordination Agreement").
C. DnB has further agreed to refinance, renew, extend and restructure
the DnB Loan and has acknowledged the indebtedness of Borrower to ASRC as more
fully set forth in that certain renewal, extension and modification agreement
between Borrower and ASRC dated the 15th day of October, 1996 (the "ASRC
Modification Agreement").
D. DnB has further agreed to refinance, renew, extend and restructure
the DnB Loan and has acknowledged the execution by Borrower of a certain
indebtedness to Saudi Fal, a limited liability company organized and existing
under the laws of the Kingdom of Saudi Arabia ("Saudi Fal") in the amount of
$1,945,773.49 as evidenced by that certain Second Lien Promissory Note executed
by Borrower to Saudi Fal dated the 15th day of October, 1996, and secured by a
Subordinated Lien on assets of Borrower.
NOW, THEREFORE, in consideration of DnB refinancing, renewing
extending and restructuring the DnB Loan to Borrower and in further
consideration of the recital set forth above which are made a part of this
Ratification of Subordination Agreement as if fully set forth below, the
parties hereto agree as follows:
1. Ratification of Subordination Agreement. ASDC, ASRC, Borrower,
TOCCO and Gulf State hereby ratify and confirm the terms and conditions of the
Subordination
1
49
Agreement while acknowledging the indebtedness of Borrower to ASRC is now
evidenced by a Third Lien Promissory Note dated the 15th day of October, 1996.
2. Saudi Fal Indebtedness. ASDC, ASRC, Borrower, TOCCO and Gulf
State hereby acknowledge the indebtedness of Borrower to Saudi Fal as now
evidenced by a certain Second Lien Promissory Note dated the 15th day of
October, 1996, secured by the assets of the Corporation, but subordinated to
the security interest of DnB.
3. Limitation Permitted Distribution. ASDC, ASRC, Borrower, TOCCO
and Gulf State acknowledge and agree that payments under the ASRC Note shall be
limited to the Permitted Distributions as specified in Section 9(d) of the
Restated Credit Agreement. ASRC agrees that notwithstanding the terms of the
ASRC Note, the ASRC Note will not be in default even if payments of principal
or interest are not made under the ASRC Note as limited by the Permitted
Distributions set forth in the Restated Credit Agreement.
4. Amendment. No amendment of this Ratification or of the
Subordination Agreement shall be effective except and until executed in writing
by all the parties hereto and such amendment shall become effective only in the
specific instance for any specific purpose that such may be given.
5. Counterparts. This Modification Agreement shall be executed
in multiple counterparts, all of which shall be considered a single document.
Each of the parties to this Agreement named above shall execute this
Modification Agreement on separate original signature pages, which parties
agree shall be affixed to and deemed to be an original.
Executed by the parties hereto and delivered as of the date first
above written.
SOUTH HAMPTON REFINING COMPANY
By:
------------------------------------
Its:
-----------------------------------
STATE OF TEXAS
COUNTY OF XXXXXX
This instrument was acknowledged before me on the ______day of_______,
1996, by ________________________________.
-------------------------------------
Notary Public, State of Texas
2
50
EXECUTION PAGE TO
RATIFICATION OF SUBORDINATION AGREEMENT
ARABIAN SHIELD DEVELOPMENT COMPANY
By:
------------------------------------
Its:
-----------------------------------
STATE OF TEXAS
COUNTY OF DALLAS
This instrument was acknowledged before me on the ______day of_______,
1996, by ________________________________.
-------------------------------------
Notary Public, State of Texas
3
51
EXECUTION PAGE TO
RATIFICATION OF SUBORDINATION AGREEMENT
AMERICAN SHIELD REFINING COMPANY
By:
------------------------------------
Its:
-----------------------------------
STATE OF TEXAS
COUNTY OF DALLAS
This instrument was acknowledged before me on the ______day of_______,
1996, by ________________________________.
-------------------------------------
Notary Public, State of Texas
4
52
EXECUTION PAGE TO
RATIFICATION OF SUBORDINATION AGREEMENT
TEXAS OIL & CHEMICAL CO. II, INC.
By:
------------------------------------
Its:
-----------------------------------
STATE OF TEXAS
COUNTY OF XXXXXX
This instrument was acknowledged before me on the ______day of_______,
1996, by ________________________________.
-------------------------------------
Notary Public, State of Texas
5
53
EXECUTION PAGE TO
RATIFICATION OF SUBORDINATION AGREEMENT
GULF STATE PIPELINE COMPANY
By:
------------------------------------
Its:
-----------------------------------
STATE OF TEXAS
COUNTY OF XXXXXX
This instrument was acknowledged before me on the ______day of_______,
1996, by ________________________________.
-------------------------------------
Notary Public, State of Texas
6
54
EXECUTION PAGE TO
RATIFICATION OF SUBORDINATION AGREEMENT
DEN NORSKE BANK, ASA
By:
------------------------------------
Its:
-----------------------------------
STATE OF TEXAS
COUNTY OF _____________
This instrument was acknowledged before me on the ______day of_______,
1996, by ________________________________.
-------------------------------------
Notary Public, Xxxxx xx Xxxxx
0
00
XXXXX XXXXXXX REFINING COMPANY
CERTIFICATE OF SECRETARY
I, ________________________________________, Secretary of South
Hampton Refining Company (the "Borrower") do hereby certify as follows:
1) At the meeting of the Board of Directors of the Borrower duly
and legally called and held on the ______ day of
_______________________, 19________ at which meeting in quorum
with the President voting throughout, the Resolutions attached
hereto as Exhibit A were duly adopted, and such Resolutions
are now in full force and effect and have not been amended,
modified, or revoked.
2) Attached hereto as Exhibit B is a true, correct and complete
copy of the Bylaws of Borrower as in effect at all times since
the date of the Resolution set forth in Exhibit A attached
hereto and from and after such date to the dates hereof.
IN WITNESS HEREOF, I have set my hand this ____ day of _________1996.
---------------------------
SECRETARY
I, _____________________________________, President of Borrower do
hereby certify that _________________________ is the duly elected and
qualified Secretary of the Borrower and that the signature above is his
genuine signature.
IN WITNESS HEREOF, I have set my hand this ____ day of
___________________, 1996.
----------------------------
PRESIDENT
1
00
XXXXX XXXXXXX REFINING COMPANY
CERTIFICATE OF SECRETARY
I, Xxxxx Xxxxx, Secretary of South Hampton Refining Company (the
"Borrower"), do hereby certify as follows:
1. Attached hereto as Exhibit $ is a true, correct and complete copy of
the Bylaws of the Borrower as in effect at all times since June 9, 1987 to and
including the date hereof.
2. At a meeting of the Board of Directors of the Borrower, duly and
legally called and held on the 29th day of February, 1988, at which meeting a
quorum was present and voting throughout, the Resolutions attached hereto as
Exhibit A were duly adopted, and such Resolutions are now in full force and
effect and have not been amended, modified or revoked.
IN WITNESS WHEREOF. I have hereunto set my hand this
day of February, 1988.
Xxxxx Xxxxx, Secretary
I, the under signed President of the Company , do hereby certify that
Xxxxx Xxxxx is the duly elected and qualified Secretary of the Company and that
the signature above is his genuine signature.
IN WITNESS WHEREOF, I have hereunto set my hand this day of March, 1988.
Xxxxxxxx Xxxxxx
1
57
EXHIBIT A
WHEREAS, the Board of Directors deems it advisable and in the be s t
interest of the Corporation to enter into a Credit Agreement by and among the
Corporation and Den norske Creditbank (the "Bank");
NOW THEREFORE, BE IT RESOLVED, that the Corporation enter into the Credit
Agreement with the Bank as lender to loan up to $5,156,694.43 to Corporation;
RESOLVED, that such borrowing be evidenced by the Promissory Note to be
executed by the Corporation as maker, to be delivered pursuant to a Credit
Agreement dated as of February 29, 1988, between the Corporation and the Bank
(the "Credit Agreement"), and the form of Credit Agreement (and all exhibits
thereto) presented to and reviewed by the Board of Directors be and it hereby
is, authorized and approved in all respects, and the President, Secretary or
any other officer of the Corporation hereby is authorized to execute and
deliver the aforesaid Credit Agreement on behalf of the Corporation, with
such Changes, additions, amendments and deletions as any such officer shall
deem appropriate, the authorization of the same by the Corporation to be
conclusively evidenced by such execution and delivery.
RESOLVED, that pursuant to the terms of the Credit Agreement, the
President, Secretary or any officer of the Corporation be, and hereby is,
authorized and empowered to execute and deliver to the Bank on the
Corporation's behalf all of the Security Documents, as such term is defined in
the Credit Agreement, with such additions, deletions and modifications to the
Security Documents as any such officer shall deem appropriate, the
authorization and approval of the same by the Corporation to be conclusively
evidenced by such execution and delivery.
RESOLVED, that the President, Secretary or any other officer of the
Corporation be, and hereby is, authorized and empowered, in the name and on
behalf of the Corporation, to take or cause to be taken now or in the future,
all such action, and to sign, execute, verify, acknowledge, certify to, file
and deliver all such instruments, financing statements and documents, as shall
in
2
58
the judgment of the President, .Secretary or any other officer of the
Corporation be necessary, desirable or appropriate in order to perform the
obligations of the Corporation under the Credit Agreement and the Security
Documents, to effect the aforesaid borrowing, and otherwise to effectuate the
purposes of the
foregoing resolutions.
3
59
RENEWAL, EXTENSION AND MODIFICATION AGREEMENT
This Renewal, Extension and Modification Agreement (the "Modification
Agreement") is entered into and effective as of this 15th day of October, 1996,
by and between Arabian Shield Development Company ("ASDC"), a company organized
and existing under laws of the State of Delaware, American Shield Refining
Company ("ASRC"), a company organized and existing under the laws of the State
of Delaware, South Hampton Refining Company, a company organized and existing
under the laws of the State of Texas (the "South Hampton"), Texas Oil &
Chemical Co. II, Inc., a company organized and existing under the laws of the
State of Texas ("TOCCO") and Gulf State Pipeline Company ("Gulf State"), a
company organized and existing under the laws of the State of Texas.
RECITALS
A. ASDC is the owner of all the issued and outstanding common stock
of ASRC.
B. ASRC is the owner of all the issued and outstanding common stock
of TOCCO.
X. XXXXX is the owner of all the issued and outstanding common stock
of South Hampton.
D. South Hampton is the owner of all the issued and outstanding
common stock of Gulf State.
E. South Hampton is a party to an Amended and Restated Credit
Agreement dated the 15th day of October, 1996, (the "Restated Credit
Agreement") for an amount of up to $1,965,000 provided to South Hampton by Den
Norske Bank, ASA ("DnB").
F. ASRC is the owner and holder of that certain Second Lien
Promissory Note dated July 28, 1989, in the original principal sum of $510,000
(the "ASRC Note").
G. The ASRC Note is a second lien promissory note secured by a second
lien, inferior only to the first lien of DnB, covering all physical assets of
South Hampton and Gulf State which second lien is evidenced by financing
statements, security agreements and deeds of trust covering all of such
physical assets of South Hampton and Gulf State, but with all foreclosure
rights under such security agreements and deeds of trust being expressly
subject to a Subordination Agreement entered into by the parties hereto and DnB
dated July 28, 1989 (the "Subordination Agreement") the terms and conditions of
which have been ratified by those parties by a Ratification of Subordination
Agreement dated as of the 15th day of October, 1996 (the "Ratification").
1
60
H. South Hampton is indebted to Saudi Fal, a limited liability
company organized and existing under the laws of the Kingdom of Saudi Arabia
("Saudi Fal") in the amount of $1,945,773.49 (the "Saudi Fal Indebtedness").
I. The Saudi Fal Indebtedness is to be evidenced by a certain Second
Lien Promissory Note dated October 15, 1996, and to be secured by second lien
inferior only to the first lien of DnB covering all the physical assets of
South Hampton and Gulf State and which will be evidenced by one or more
financing statements, security agreements and deeds of trust covering all of
such physical assets, but with all foreclosure rights under such security
agreements and deeds of trust being made expressly subject to a Subordination
Agreement of even date herewith entered into by and among ASDC, ASRC, TOCCO,
South Hampton, Gulf State, Saudi Fal and DnB (the "Subordination Agreement").
J. In order to induce DnB to amend its Restated Credit Agreement with
South Hampton as more fully set forth in the Amended and Restated Credit
Agreement and in order to induce Saudi Fal to renew and extend the Saudi Fal
Note to South Hampton, ASRC has agreement to subordinate the repayment of its
indebtedness to both the DnB Note and the Saudi Fal Note.
K. The ASRC indebtedness now shall be evidenced by a Third Lien
Promissory Note dated the 15th day of October, 1996 (the "ASRC Note").
NOW, THEREFORE, IN CONSIDERATION Of DnB Refinancing, renewing,
extending and restructuring the DnB Loan to South Hampton, in consideration of
the renewal and extension by Saudi Fal of the Saudi Fal Note to South Hampton
and in further consideration of the recitals set forth above which are made a
part of this Modification Agreement as if fully set forth below, the parties
hereto agree as follows:
1. Renewal and Extension of Loan. ASRC and South Hampton hereby
covenant, contract and agree that the time for payment of the ASRC Note is
hereby extended to and shall hereafter be renewed and shall be due and payable
on or before December 31, 1998.
2. Modification in Loan Amount. ASRC and South Hampton covenant,
contract and agree that the outstanding principal balance of the ASRC Loan
shall be modified and increased to $1,694,605.08.
3. Security for ASRC Note. ASRC acknowledges and South Hampton
covenant, contract and agree that the ASRC Note will be secured by a third
lien, inferior to (i) the first lien of DnB as set forth in the Restated Credit
Agreement and (ii) the second lien of Saudi Fal as specified in the
Subordination Agreement, covering all physical assets of South Hampton and Gulf
State, but with all foreclosure rights under such security agreements and deeds
of trust made expressly subject to the Subordination Agreement of even date
herewith entered into among ASDC, ASRC, South Hampton, TOCCO, Gulf State and
DnB.
2
61
4. Security for ASRC Note. The following security previously shown
as a subordinated second lien shall now be given to secure the ASRC Note and
shall be a third lien security interest against the assets of South Hampton and
said third lien security interest now acknowledge and as set forth in the
following:
a) Deed of trust given by Gulf State for the benefit of ASRC
recorded in Volume 740, Page 042 of the official public
records of real property of Xxxxxx County, Texas.
b) Deed of trust given by Gulf State to ASRC recorded in Volume
221, Page 778 of the official public records of real property
of Xxxxxx County, Texas.
c) Deed of trust given by South Hampton to ASRC recorded in
Volume 221, Page 791 of the official public records of real
property of Xxxxxx County, Texas.
d) Deed of trust given by Gulf State to ASRC recorded in Volume
167, Page 432 of the official public records of real property
of Xxxxxx County, Texas.
e) Certain security agreement executed by Gulf State to ASRC
granting a security interest in goods, inventory, equipment
and fixtures as referenced in Exhibit A attached thereto and
incorporated in for all purposes.
5. Limitation as to Permitted Distributions. ASRC acknowledges and
agrees that payments under the ASRC Note shall be limited to the Permitted
Distributions as defined in Section 9(d) of the Restated Credit Agreement.
ASRC agrees that notwithstanding the terms of the ASRC Note, the ASRC Note
shall not be in default even if payments of principal or interest are not made
as required under the ASRC Note if limited by the Permitted Distributions set
forth in the Restated Credit Agreement.
6. Acknowledgement of South Hampton. Except as amended as to the
maturity date of the ASRC Note and as to the outstanding principal balance of
the ASRC Note and subject to the change in the security interest hereby
evidenced, South Hampton covenants, contracts and agrees that all the terms and
conditions of the ASRC Note as renewed, extended and rearranged are hereby
ratified and confirmed and shall remain in full force and effect. South
Hampton acknowledges and agrees that the outstanding liens, security interest
and assignments created by the financing statements, security agreements and
deeds of trust hereinafter identified and securing the ASRC Note shall
hereafter be valid and subsisting third liens, security interest and
assignments.
7. Governing Law. The terms and provisions of this Modification
Agreement shall be governed by and construed in accordance with the laws of the
State of Texas, except to the extent preempted by the federal law.
3
62
8. Counterparts. This Modification Agreement shall be executed
in multiple counterparts, all of which shall be considered a single document.
Each of the parties to this Agreement named above shall execute this
Modification Agreement on separate original signature pages, which parties
agree shall be affixed to and deemed to be an original.
SOUTH HAMPTON REFINING COMPANY
By:
------------------------------------
Its:
-----------------------------------
STATE OF TEXAS
COUNTY OF XXXXXX
This instrument was acknowledged before me on the ______ day of______,
1996, by _____________________________.
--------------------------------------
Notary Public, State of Texas
4
63
EXECUTION PAGE TO
RENEWAL, EXTENSION AND MODIFICATION AGREEMENT
ARABIAN SHIELD DEVELOPMENT COMPANY
By:
------------------------------------
Its:
-----------------------------------
STATE OF TEXAS
COUNTY OF DALLAS
This instrument was acknowledged before me on the ______ day of______,
1996, by _____________________________.
--------------------------------------
Notary Public, State of Texas
5
64
EXECUTION PAGE TO
RENEWAL, EXTENSION AND MODIFICATION AGREEMENT
AMERICAN SHIELD REFINING COMPANY
By:
------------------------------------
Its:
-----------------------------------
STATE OF TEXAS
COUNTY OF DALLAS
This instrument was acknowledged before me on the ______ day of______,
1996, by _____________________________.
--------------------------------------
Notary Public, State of Texas
6
65
EXECUTION PAGE TO
RENEWAL, EXTENSION AND MODIFICATION AGREEMENT
TEXAS OIL & CHEMICAL CO. II, INC.
By:
------------------------------------
Its:
-----------------------------------
STATE OF TEXAS
COUNTY OF XXXXXX
This instrument was acknowledged before me on the ______ day of______,
1996, by _____________________________.
--------------------------------------
Notary Public, State of Texas
7
66
EXECUTION PAGE TO
RENEWAL, EXTENSION AND MODIFICATION AGREEMENT
GULF STATE PIPELINE COMPANY
By:
------------------------------------
Its:
-----------------------------------
STATE OF TEXAS
COUNTY OF XXXXXX
This instrument was acknowledged before me on the ______ day of______,
1996, by _____________________________.
--------------------------------------
Notary Public, State of Texas
8
67
SECOND LIEN PROMISSORY NOTE
$1,945,773.49 Silsbee, Texas October 15, 1996
FOR VALUE RECEIVED, the undersigned, South Hampton Refining
Company, a Texas corporation (the "Maker"), promises and agrees to pay to Saudi
Fal, a limited liability company incorporated under the laws of the Kingdom of
Saudi Arabia (the "Payee"), the principal sum of $1,945,773.49 in legal and
lawful money of the United States of America payable at its offices of Fal
Holdings Arabia Co., Ltd., Al Xxxxx Xxxx, X.X. Xxx 0000, Xxxxxx, 00000 Xxxxx
Xxxxxx or such other place or places as the holder hereof shall from time to
time designate in written notice to Maker. In addition to the principal sum
referred to above, Maker agrees to pay interest hereon from the date hereof
until maturity at a fluctuating rate per annum which shall from day to day be
equal to the lesser of (a) the Maximum Rate (as such term is hereinafter
defined), or (b) a rate (the "Contract Rate"), calculated on the basis of the
actual days elapsed but computed as if each year consisted of 365 days equal to
the sum of (i) the rate announced from time to time by Den Norske Bank, ASA, a
Norwegian Bank (the "Bank") as its prime lending rate in effect in its New
York, New York office, automatically fluxuating upward and downward with and at
the time of each such announcement without special notice to Maker or any other
persons plus (ii) one percent (1.00%). Notwithstanding the foregoing, interest
on this Note shall on no event exceed the Maximum Rate of nonuserious interest
allowed by law (as such term is hereinafter defined). If the Contract Rate at
any time shall exceed the Maximum Rate, the interest hereon, during the period
of time that the Contract Rate exceeds the Maximum Rate, the rate of interest
charged under this Note shall be the Maximum Rate.
The term "Maximum Rate" as used herein shall mean at the particular
time in question the maximum rate of interest which, under applicable law, may
then be charged on this Note. If such maximum rate of interest changes after
the date hereof and this Note provides for a fluctuating rate of interest, the
Maximum Rate shall be automatically increased or decreased, as the case may be,
without notice to Maker from time to time as of the effective date of each
change in such maximum rate. If applicable law ceases to provide for such a
maximum rate of interest, the Maximum Rate shall be equal to eighteen percent
(18.00%) per annum.
Interest only on this Note shall be due and payable in monthly
installments with the first of such monthly installments of interest being due
and payable on the 25th day of November, 1996, with the like installment being
due and payable on the 25th day of each calendar month thereafter, until the
31st day of December, 1998, at which time the entire unpaid balance of this
Note, both principal and accrued and unpaid interest, shall be due and payable,
if not sooner paid.
This Note may be prepaid, in whole or in part, without notice or
penalty. Any such prepayment shall be applied first toward accrued interest,
and the balance, if any, toward principal, but interest shall immediately cease
upon amounts of principal prepaid.
1
68
It is expressly provided that upon default in the punctual payment of
this Note or any part thereof, principal or interest, as the same shall become
due and payable, and at the option of the holder, the entire indebtedness shall
be matured. In the event default is made in the prompt payment of this Note
when due or declared due, and the same is placed in the hands of an attorney
for collection, or suit is brought on same, or the same is collected through
probate, bankruptcy or other judicial proceedings, then the Maker agrees and
promises to pay reasonable attorneys' fees, court costs, deposition and
investigation charges, and all expenses of collection, payment and liquidation
thereof.
If the Maker shall become insolvent (however such insolvency may be
evidence) or if a receiver shall be appointed for or take possession of the
assets of Maker, or if a writ or order of attachment of garnishment shall be
made or issued against the assets of Maker, or if the Maker shall be dissolved,
wound up, liquidated or otherwise terminated or become a party to any merger or
consolidation without the written consent of the holder of this Note, or if,
after the first lien indebtedness to Den Norske Bank, ASA is paid, Note Maker
shall sell substantially all or an integral portion of its assets without the
written consent of the holder hereof, or if a default occurs under any
instrument now or hereafter executed in connection with or as security for this
Note, or if Den Norske Bank, ASA should accelerate the maturity of such
indebtedness, file suit against Maker or institute any foreclosure proceedings
against any of the assets of Maker, thereupon is the option of the holder of
this Note, this Note and any and all other indebtedness of Maker to the holder
hereof shall become due and payable.
Except as provided herein, each maker and endorser of this Note
expressly waives all notices, demands for payment, presentations for payment,
notices of intention to accelerate the maturity, protest and notice of protest,
as to this Note and as to each, every and all installments hereof, and consents
to and waives notice of any and all renewals, extensions and rearrangements
hereof and without affecting the liability and obligations of any party which
is not expressly released in writing. It is further agreed that the exercise
of any right or remedy conferred upon any holder hereof shall be wholly
discretionary with such holder, and such exercise of, or failure to exercise,
any such right or remedy shall not in any manner affect, impair or diminish the
obligations and liabilities of any party liable hereon or herefore, or be
deemed a waiver of any such right or remedy.
Notwithstanding any other provisions to the contrary in this Note or
elsewhere, upon any event of default by Maker, Payee agrees to give Maker
written notice of such event of default prior to the acceleration of this Note
or exercise of any other remedies in connection therewith and Maker shall have
a period of thirty (30) days after receipt of such written notice in which to
cure any monetary default, and sixty (60) days after receipt of such written
notice within which to cure any non-monetary default; provided however, that
if any non-monetary default cannot reasonably be cured within said sixty (60)
day period, Maker shall have a reasonable period of time following receipt of
such written notice within which to cure such default if Maker commences within
said initial sixty (60) day period action reasonably calculated to cure such
default and thereafter proceeds with reasonable diligence to attempt to cure
same.
2
69
It is the intention of Maker and Payee to conform strictly to
applicable usury laws. Accordingly, no provision of this Note or any agreement
entered into in connection with or as security for this Note shall permit Payee
to charge, receive, take, or reserve interest in excess of lawful amounts. If
any excess occurs, Payee shall, at its option, apply such excess as a credit
against principal or otherwise refund such excess to Maker and the effective
rate of interest shall automatically be reduced to the maximum rate allowed by
applicable law (including the laws of the State of New York and the United
States of America). This paragraph shall govern over all provisions of this
Note and any agreement entered into in connection with this Note.
The Note and any liens created to secure the Note shall be subordinate
to the payment of that certain Promissory Note dated the 15th day of October,
1996, executed by Maker in favor of Den Norske Bank, ASA and being the renewal,
extension, modification of indebtedness of Maker to Den Norske Bank, ASA as
more fully set forth in that certain Amended and Restated Credit Agreement for
an amount up to $1,965,000 provided by Den Norske Bank ASA to Maker, and this
Note is subject and subordinate to the rights of payment and the rights of
prior payment in full of all indebtedness of Maker to Bank pursuant to that
certain Amended and Restated Credit Agreement executed by Maker to Den Norske
Bank, ASA dated the 15th day of October, 1996.
This Note is made under and shall be construed in accordance with and
governed by the laws of the State of Texas, and by the laws of the United
States of America as applicable.
EXECUTED this 15th day of October, 1996.
SOUTH HAMPTON REFINING COMPANY
By
---------------------------------
Its
--------------------------------
3
70
THIRD LIEN PROMISSORY NOTE
$1,694,605.08 Silsbee, Texas October 15, 1996
FOR VALUE RECEIVED, the undersigned, South Hampton Refining
Company, a Texas corporation (the "Maker"), promises and agrees to pay to
American Shield Refining Company, a Delaware corporation (the "Payee"), the
principal sum of $1,694,605.08 in legal and lawful money of the United States
of America payable at its offices of American Shield Refining Company, 00000 X.
Xxxxxxx Xxxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000, or such other place or
places as the holder hereof shall from time to time designate in written notice
to Maker. In addition to the principal sum referred to above, Maker agrees to
pay interest hereon from the date hereof until maturity at a fluctuating rate
per annum which shall from day to days be equal to the lesser of (a) the
Maximum Rate (as such term is hereinafter defined), or (b) a rate (the
"Contract Rate"), calculated on the basis of the actual days elapsed but
computed as if each year consisted of 365 days equal to the sum of (i) the rate
announced from time to time by Den Norske Bank, ASA, a Norwegian Bank (the
"Bank") as its prime lending rate in effect in its New York, New York office,
automatically fluxuating upward and downward with and at the time of each such
announcement without special notice to Maker or any other persons plus (ii)
one percent (1.00%). Notwithstanding the foregoing, interest on this Note
shall on no event exceed the Maximum Rate of nonuserious interest allowed by
law (as such term is hereinafter defined). If the Contract Rate at any time
shall exceed the Maximum Rate, the interest hereon, during the period of time
that the Contract Rate exceeds the Maximum Rate, the rate of interest charged
under this Note shall be the Maximum Rate.
The term "Maximum Rate" as used herein shall mean at the particular
time in question the maximum rate of interest which, under applicable law, may
then be charged on this Note. If such maximum rate of interest changes after
the date hereof and this Note provides for a fluctuating rate of interest, the
Maximum Rate shall be automatically increased or decreased, as the case may be,
without notice to Maker from time to time as of the effective date of each
change in such maximum rate. If applicable law ceases to provide for such a
maximum rate of interest, the Maximum Rate shall be equal to eighteen percent
(18.00%) per annum.
Interest only on this Note shall be due and payable in monthly
installments with the first of such monthly installments of interest being due
and payable on the 25th day of November, 1996, with the like installment being
due and payable on the 25th day of each calendar month thereafter, until the
31st day of December, 1998, at which time the entire unpaid balance of this
Note, both principal and accrued and unpaid interest, shall be due and payable,
if not sooner paid.
This Note may be prepaid, in whole or in part, without notice or
penalty. Any such prepayment shall be applied first toward accrued interest,
and the balance, if any, toward principal, but interest shall immediately cease
upon amounts of principal prepaid.
It is expressly provided that upon default in the punctual payment of
this Note or any part thereof, principal or interest, as the same shall become
due and payable, and at the option of the holder, the entire indebtedness shall
be matured. In the event default is made in the prompt
71
payment of this Note when due or declared due, and the same is placed in the
hands of an attorney for collection, or suit is brought on same, or the same is
collected through probate, bankruptcy or other judicial proceedings, then the
Maker agrees and promises to pay reasonable attorneys' fees, court costs,
deposition and investigation charges, and all expenses of collection, payment
and liquidation thereof.
If the Maker shall become insolvent (however such insolvency may be
evidence) or if a receiver shall be appointed for or take possession of the
assets of Maker, or if a writ or order of attachment of garnishment shall be
made or issued against the assets of Maker, or if the Maker shall be dissolved,
wound up, liquidated or otherwise terminated or become a party to any merger or
consolidation without the written consent of the holder of this Note, or if,
after the first lien indebtedness to Den Norske Bank, ASA is paid, Note Maker
shall sell substantially all or an integral portion of its assets without the
written consent of the holder hereof, or if a default occurs under any
instrument now or hereafter executed in connection with or as security for this
Note, or if Den Norske Bank, ASA should accelerate the maturity of such
indebtedness, file suit against Maker or institute any foreclosure proceedings
against any of the assets of Maker, thereupon is the option of the holder of
this Note, this Note and any and all other indebtedness of Maker to the holder
hereof shall become due and payable.
Except as provided herein, each maker and endorser of this Note
expressly waives all notices, demands for payment, presentations for payment,
notices of intention to accelerate the maturity, protest and notice of protest,
as to this Note and as to each, every and all installments hereof, and consents
to and waives notice of any and all renewals, extensions and rearrangements
hereof and without affecting the liability and obligations of any party which
is not expressly released in writing. It is further agreed that the exercise
of any right or remedy conferred upon any holder hereof shall be wholly
discretionary with such holder, and such exercise of, or failure to exercise,
any such right or remedy shall not in any manner affect, impair or diminish the
obligations and liabilities of any party liable hereon or herefore, or be
deemed a waiver of any such right or remedy.
Notwithstanding any other provisions to the contrary in this Note or
elsewhere, upon any event of default by Maker, Payee agrees to give Maker
written notice of such event of default prior to the acceleration of this Note
or exercise of any other remedies in connection therewith and Maker shall have
a period of thirty (30) days after receipt of such written notice in which to
cure any monetary default, and sixty (60) days after receipt of such written
notice within which to cure any non-monetary default; provided however, that
if any non-monetary default cannot reasonably be cured within said sixty (60)
day period, Maker shall have a reasonable period of time following receipt of
such written notice within which to cure such default if Maker commences within
said initial sixty (60) day period action reasonably calculated to cure such
default and thereafter proceeds with reasonable diligence to attempt to cure
same.
It is the intention of Maker and Payee to conform strictly to
applicable usury laws. Accordingly, no provision of this Note or any agreement
entered into in connection with or as security for this Note shall permit Payee
to charge, receive, take, or reserve interest in excess of lawful amounts. If
any excess occurs, Payee shall, at its option, apply such excess as a credit
against principal or otherwise refund such excess to Maker and the effective
rate of interest shall
72
automatically be reduced to the maximum rate allowed by applicable law
(including the laws of the State of New York and the United States of America).
This paragraph shall govern over all provisions of this Note and any agreement
entered into in connection with this Note.
The Note and any liens created to secure the Note shall be subordinate
to the payment of that certain Promissory Note dated the 15th day of October,
1996, executed by Maker in favor of Den Norske Bank, ASA and being the renewal,
extension, modification of indebtedness of Maker to Den Norske Bank, ASA as
more fully set forth in that certain Amended and Restated Credit Agreement for
an amount up to $1,965,000 provided by Den Norske Bank ASA to Maker, and this
Note is subject and subordinate to the rights of payment and the rights of
prior payment in full of all indebtedness of Maker to Bank pursuant to that
certain Amended and Restated Credit Agreement executed by Maker to Den Norske
Bank, ASA dated the 15th day of October, 1996.
The Note and any liens created to secure the Note shall be subordinate
(i) to the payment of that certain Promissory Note dated the 15th day of
October, 1996, executed by Maker in favor of Den Norske Bank, ASA (the "Bank")
and being the renewal, extension, modification of indebtedness of Maker to Bank
as more fully set forth in that certain Amended and Restated Credit Agreement
dated October 15, 1996 for an amount up to $1,965,000 provided by Bank to
Maker; (ii) to the payment of that certain Second Lien Promissory Note of Maker
to Saudi Fal, a limited liability company incorporated under the laws of the
Kingdom of Saudi Arabia in the amount of $1,945,773.49 dated October 15, 1996.
This Note is made under and shall be construed in accordance with and
governed by the laws of the State of Texas, and by the laws of the United
States of America as applicable.
EXECUTED this 15th day of October, 1996.
SOUTH HAMPTON REFINING COMPANY
By
------------------------------
Its
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