Attached files
file | filename |
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10-Q - FORM 10-Q - STERLING CHEMICALS INC | h82141e10vq.htm |
EX-32.2 - EX-32.2 - STERLING CHEMICALS INC | h82141exv32w2.htm |
EX-32.1 - EX-32.1 - STERLING CHEMICALS INC | h82141exv32w1.htm |
EX-15.1 - EX-15.1 - STERLING CHEMICALS INC | h82141exv15w1.htm |
EX-31.2 - EX-31.2 - STERLING CHEMICALS INC | h82141exv31w2.htm |
EX-31.1 - EX-31.1 - STERLING CHEMICALS INC | h82141exv31w1.htm |
Exhibit 10.1
Lavonia
D. Johnson
Assistant Vice President
Commercial Banking
Assistant Vice President
Commercial Banking
April 30, 2011
(Effective Date)
(Effective Date)
Sterling Chemicals, Inc.
333 Clay Street, Suite 3600
Houston, Texas 77002-4109
333 Clay Street, Suite 3600
Houston, Texas 77002-4109
RE:
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$5,000,000.00 Revolving Line of Credit for letters of credit from JPMORGAN CHASE BANK, N.A. (Chase) to Sterling Chemicals, Inc. (Borrower ) |
Gentlemen:
Chase is pleased to advise approval of a revolving line of credit in the amount of $5,000,000.00
(Line of Credit) for issuance of commercial and standby letters of credit, subject to the
terms and conditions stated herein (as the same may be amended, renewed, extended, supplemented or
restated from time to time, this Agreement). This agreement continues, amends and
restates the letter agreement dated January 31, 2010 (including any prior amendments and
restatements, the Prior Agreement ).
NOW THEREFORE, in consideration of the above stated premises, Borrower and Chase agree as follows:
TERMS AND CONDITIONS
SECTION 1 THE DISCRETIONARY LINE OF CREDIT
Section 1.1
Line of Credit for Letters of Credit (Line of Credit): Prior
to April 30, 2012 (Termination Date ), Chase will issue letters of credit (LCs)
for the account of Borrower and in favor of such person or persons as may be designated by
Borrower, in each case subject to the Continuing Agreement for Standby Letters of Credit between
Borrower and Chase executed in connection herewith (as the same may be amended, supplemented,
restated and otherwise rearranged, LC Agreement ) on Chases then standard form of
application thereunder for the type of LC requested (each an Application ). Each LC shall
be in form and in favor of beneficiaries acceptable to Chase in Chases sole discretion, and shall
have an expiration date of no later than April 30, 2015, unless Chase agrees otherwise in its sole
discretion. LC Obligations shall mean the face amount of all LCs issued and outstanding
plus any unreimbursed drawings under the LCs plus any other amounts owing to Chase under or in
respect of any LC or Application. The maximum outstanding amount of LC Obligations shall not exceed
$5,000,000.00 (Maximum Amount) at any time.
Section 1.2
Terms and Fees: Unless quoted otherwise by Chase at the time of
application for any LC, Borrower shall pay an annual fee of one percent per annum of face
amount, plus an issuance fee of $500.00, for each standby and commercial LC.
Section 1.3
Collateral; Loan Documents: The Line of Credit and all obligations in
respect of issuance of LCs (including without limitation all Obligations as defined in
the LC Agreement) shall be secured, in addition to any security provided for in the LC Agreement,
by a cash collateral deposit with Chase of not less than $5,000,000.00 provided for in the
Assignment of Deposit Account (as the same may be amended, supplemented, restated and otherwise
rearranged, Assignment) dated January 31, 2010, executed and delivered b y Borrower in
favor of Chase in connection with the Prior Agreement. The Assignment, LC Agreement, Applications,
LCs, this Agreement and each other written document, instrument, agreement related to the Line of
Credit (together with any and all renewals, extensions, modifications, supplements, amendments and
replacements thereof) that may be required to be executed and delivered on behalf of Borrower to
Chase shall hereinafter be called the Loan Documents. Chase shall be entitled to require
each of the Loan Documents be executed in form and substance acceptable to Chase (Proper
Form ) in accordance with Chases regular practices.
Section 1.4 Existing LCs. All letters of credit issued by Chase currently
outstanding for the account of Borrower, together with all letters of credit issued by
Chase for the account of Borrower at any time this Agreement is in force, shall be LCs subject to
this Agreement unless the parties agree otherwise in writing. The parties acknowledge that in
connection with the execution and delivery of this agreement, certain LCs issued for the account of
Borrower under a syndicated credit facility will be replaced with LCs issued under the Line of
Credit and subject to the terms and limitations of this Agreement.
SECTION 2 CONDITIONS PRECEDENT
Section 2.1 Conditions Precedent: Prior to issuance of additional LCs for under the
Line of Credit, Borrower shall have executed and/or delivered, in Proper Form, the
following documents: (i) each of the Loan Documents other than the Applications; (ii) for each LC,
an Application, presented in advance of the proposed issuance date in accordance with Chases usual
practices; and (iii) any other document, instrument, certificate or instrument that Chase may
reasonably require to consider the request including but not limited to organizational and
authority documents of Borrower.
SECTION 3 REPRESENTATION AND WARRANTIES
To induce Chase to enter into this Agreement and to issue LCs, Borrower represents and warrants
that on the date hereof, on the date of each Application for and issuance of any LC, and at all
times during the term of this Agreement:
JPMorgan Chase Bank, N.A. P.O. Box 2558, Houston, Texas 77252-2558
Member FDIC Equal Housing Lender
Member FDIC Equal Housing Lender
Letter Agreement
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Sterling Chemicals, Inc. | April 30, 2011 |
Section 3.1 Organization, Due Execution, and Enforceability: Borrower is and
shall remain duly organized, validly existing and in good standing under the laws of the
state of Delaware and other states that it is necessary and/or desirous to do so, has the authority
to do its business in the state of Texas, and the execution of the Loan Documents by Borrower has
been duly authorized and does not contravene the articles of incorporation or by-laws of Borrower,
and will not result in the breach of, or constitute a default under any agreement, judgment, order
or decree binding upon Borrower, and the Loan Documents executed by Borrower are legally binding
obligations of Borrower, enforceable in accordance with their respective terms, except as may be
limited by bankruptcy, insolvency and other similar laws;
Section 3.2 Accurate Information: The information in the financial statements
and other information provided, or to be provided to Chase by Borrower, are true, correct
and accurate as of the date provided and shall be true and correct on the date that any LC is
requested to be issued;
Section 3.3 No Defaults: No Event of Default (as defined hereinafter) or
default exists under this Agreement or under any of the other Loan Documents and no default
exists under any other agreement material to the financial condition of Borrower or is continuing;
Section 3.4 No Litigation, etc.: Borrower is not subject to any agreement,
contract, order, judgment, or litigation which could materially and adversely affect its
respective financial condition, business affairs or operations;
Section 3.5 Payment of Taxes: Borrower has paid all its taxes due and owing
including without limitation employment taxes, except for those for which extensions have
been obtained and those being contested in good faith and for which adequate reserves have been
established;
Section 3.6 Compliance, Governmental Requirements, Permits and Contracts: Borrower is not subject to any governmental order, any contract or administrative or
judicial order or judgment that could materially and adversely affect its financial condition,
business affairs or operations of its business. Borrower has no material contingent liability with
respect to compliance with laws, rules and regulations applicable to Borrower; and
Section 3.7 Regulation U: None of the proceeds of any credit provided for herein
shall be used for the purpose of purchasing or carrying directly or indirectly, any margin
stock or for any other purpose which would make any credit provided by Chase to Borrower hereunder
a purpose credit within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System.
SECTION 4 COVENANTS
Borrower covenants and agrees that so long as any LC is outstanding or any amounts are owing
under the other Loan Documents Borrower shall:
Section 4.1 Financial Information Statements: (a) Within 120 days after
Borrowers fiscal year end, Borrower shall provide to Chase Borrowers financial statements
prepared in accordance with GAAP and audited with an unqualified opinion by an accounting firm of
national standing. (b) Within 45 days after each fiscal quarter end, Borrower shall provide to
Chase Borrowers financial statements prepared in accordance with GAAP. Borrower shall also provide
such other financial and business information concerning Borrower as Chase shall request from time
to time.
Section 4.2 Representation and Warranties: Borrower shall ensure that each of the
representations and warranties of Borrower contained herein shall be true and correct when
given and when deemed given hereunder and notify Chase immediately should any representation or
warranty become untrue or misleading;
Section 4.4 Notification of Corporate and Other Changes: Borrower shall
notify Chase in writing at least 30 days prior to any date that Borrower changes its name
or the location of its principal place of business or the location of its books and records, and
give Chase prompt notice if Borrower becomes a party to any merger or consolidation, or if there is
a change or modification to its business or legal structure; and
Section 4.5 Compliance: Borrower shall at all times comply with applicable
laws, rules, regulations, ordinances and Executive Orders.
SECTION 5 EVENTS OF DEFAULT AND REMEDIES
Section 5.1 Defaults and Remedies. If any of Event of Default shall occur, then Chase may
do any or all of the following: (1) declare the LC Obligations to be, and thereupon the
balance thereof shall forthwith become, immediately due and payable, together with all accrued and
unpaid interest thereon and all fees and all other obligations and indebtedness of Borrower under
the Loan Documents, without notice of acceleration or of intention to accelerate, presentment and
demand or protest, all of which are hereby expressly waived; (2) without notice to Borrower,
terminate the Line of Credit and refuse to issue LCs; (3) set off, in any order, against the
indebtedness of Borrower under the Loan Documents, against the Account covered by the Assignment;
and (4) exercise any and all other rights pursuant to the Loan Documents, at law, in equity or
otherwise. Event of Default shall mean the occurrence of any of (a) any Even t of
Default as defined in the LC Agreement, (b) any event described in section 6 (c) of the LC
Agreement, (c) any representation or warranty made in connection with any Loan Document having been
incorrect, false or misleading; and (d) Borrower having concealed, removed, or permitted to be
concealed or removed, any part of its property, with intent to hinder, delay or defraud its
creditors or any of them, or made or suffered a transfer of any of its property which may be
fraudulent under any bankruptcy, fraudulent conveyance or similar law; or shall have made any
transfer of its property to or for the benefit of a creditor at a time when other creditors
similarly situated have not been paid.
SECTION 6 MISCELLANEOUS
Section 6.1 Amendments and Waivers: No failure to exercise and no delay on the part
of either party in exercising any power or right in connection herewith or under any of the
Loan Documents shall operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any other power or right.
No course of dealing between Borrower and Chase shall operate as a waiver of any provision of this
Agreement or any other Loan Document nor any consent to any departure therefrom shall in any event
be effective unless the same shall be in writing and signed by the person against whom enforcement
thereof is to be sought, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given.
Page 2 of 3 Pages
Letter Agreement
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Sterling Chemicals, Inc. | April 30, 2011 |
Section 6.2 Expenses: Any provision to the contrary notwithstanding, and
whether or not the transactions contemplated by this Agreement shall be consummated,
Borrower agrees to pay on demand all out-of-pocket expenses (including, without limitation, the
fees and expenses of counsel for Chase) in connection with the negotiation, preparation, execution,
filing, recording, modification, supplementing and waiver of the Loan Documents and the making,
servicing and collection of any of the indebtedness evidenced by the Loan Documents. The
obligations of Borrower under this and the following section shall survive the termination of this
Agreement.
Section 6.3 Usury: Borrower and Chase intend to conform strictly to applicable
usury laws. Therefore, the total amount of interest (as defined under applicable law)
contracted for, charged or collected under this Agreement or any other Loan Document will never
exceed the Highest Lawful Rate. If Chase contracts for, charges or receives any excess interest, it
will be deemed a mistake. Chase will automatically reform the Loan Document or charge to conform to
applicable law, and if excess interest has been received, Chase will either refund the excess to
Borrower or credit the excess on any unpaid principal amount of the relevant Loan Document. All
amounts constituting interest will be spread throughout the full term of the relevant Loan Document
in determining whether interest exceeds lawful amounts. Highest Lawful Rate means the
maximum nonusurious rate of interest from time to time permitted by applicable law.
Section 6.4 Survival: All representations, warranties, covenants and agreements
made by or on behalf of Borrower in connection with the Loan Documents shall survive the
execution and delivery of the Loan Documents; shall not be affected by any investigation made by
Chase, and shall bind Borrower and successors, trustees, receivers and assigns of Borrower and
inure to the benefit of the successors and assigns of Chase; provided that the undertaking
of Chase hereunder to issue LCs upon the application of Borrower shall not inure to the benefit of
any successor or assign of Borrower. Except as otherwise provided herein, the term of this
Agreement shall be until the later of final expiry of all LCs and the full and final payment of all
amounts due under the Loan Documents.
Section 6.5 Documentary Matters: This Agreement may be executed in several
identical counterparts, and by the parties hereto on separate counterparts, and each
counterpart, when so executed and delivered, shall constitute an original instrument, and all such
separate counterparts shall constitute but one and the same instrument. The headings and captions
appearing in the Loan Documents have been included solely for convenience and shall not be
considered in construing the Loan Documents. The Loan Documents embody the entire agreement between
Borrower and Chase and supersede all prior proposals, agreements and understandings. If any
provision of any Loan Document shall be invalid, illegal or unenforceable in any respect under any
applicable law, the validity, legality and enforceability of the remaining provisions shall not be
affected or impaired thereby.
Section 6.6 Governing Law: THIS AGREEMENT SHALL BE CONSTRUED AND GOVERNED IN ACCORDANCE
WITH THE
LAWS OF THE STATE OF NEW YORK AND AS APPLICABLE THE LAWS OF THE UNITED STATES OF AMERICA.
JURY WAIVER. BORROWER AND THE BANK HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY
WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED ON CONTRACT,
TORT, OR OTHERWISE) BETWEEN BORROWER AND THE BANK ARISING OUT OF OR IN ANY WAY RELATED TO THIS
AGREEMENT. THIS PROVISION IS A MATERIAL INDUCEMENT TO THE BANK TO PROVIDE THE FINANCING DESCRIBED
HEREIN.
Section 6.7 WAIVER OF SPECIAL DAMAGES. EACH PARTY WAIVES, TO THE MAXIMUM EXTENT NOT
PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER FROM THE OTHER PARTY IN ANY
LEGAL ACTION OR PROCEEDING ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES.
IN WITNESS WHEREOF, the duly authorized officers of the undersigned have entered into and executed
and delivered this Agreement effective as of the first date above written.
Sincerely yours, JPMORGAN CHASE BANK, N.A. |
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By: | /s/ L. JOHNSON | |||
Name: | Lavonia D. Johnson | |||
Title: | Assistant Vice President | |||
Accepted and agreed: STERLING CHEMICALS, INC. |
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By: | /s/ JOHN V. GENOVA | |||
Name: | John V. Genova | |||
Title: | President, Chief Executive Officer and Director | |||
Page 3 of 3 Pages