Exhibit 10.34
REVOLVING LOAN NOTE
$13,400,000 February 9, 2001
FOR VALUE RECEIVED, the undersigned, Tremont Corporation, a Delaware
corporation ("Maker"), promises to pay, on or before March 31, 2003 (the
"Maturity Date"), to the order of NL Environmental Management Services, Inc., a
New Jersey corporation ("Payee") or any subsequent holder, at its offices at
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, or such other place
designated by holder in writing, the principal sum of THIRTEEN MILLION FOUR
HUNDRED THOUSAND DOLLARS ($13,400,000), or such lesser amount as shall equal the
aggregate principal amount of all revolving loans made to Maker by Payee
hereunder (the "Revolving Loans"), together with interest from the date hereof
on the unpaid balance of this Note as it may exist from time to time at the rate
(herein called the "Applicable Rate") of prime plus two percent per annum,
determined at the beginning of each calendar quarter, and in no event shall the
Applicable Rate exceed the maximum interest rate permitted to be charged from
time to time under applicable law (herein called the "Maximum Rate"). The
Applicable Rate shall be determined based upon the published prime rate. Accrued
interest on the unpaid principal of this Note shall be computed on the basis of
a 360-day year applied to the actual number of days in each calendar month
payable on the last business day of each calendar quarter. Notwithstanding the
foregoing, if at any time the Applicable Rate exceeds the Maximum Rate, the rate
of interest payable under this Note shall be limited to the Maximum Rate as
provided above.
Subject to the terms and conditions set forth in this Note, Payee shall
make Revolving Loans to Maker at any time and from time to time from the date of
this Note until the Maturity Date, in an aggregate principal amount not to
exceed at any one time the Maximum Revolving Loan Amount (as defined below) at
such time. Revolving Loans made under this Note shall be in an integral multiple
of $200,000 and shall be wired by Payee to the account of Maker requested by
Maker prior to 3:00 p.m., New York time, on the date proposed by Maker. Maker
shall give Payee irrevocable written notice of all proposed Revolving Loans not
later than three business days prior to the proposed borrowing (a "Borrowing
Notice"). Such Borrowing Notice shall specify the aggregate principal amount of
the Revolving Loan that Maker is requesting Payee to make and the requested
effective date of the proposed Revolving Loan. Each Revolving Loan shall bear
interest on the outstanding principal balance thereof from the date such
Revolving Loan is made at the Applicable Rate. The "Maximum Revolving Loan
Amount" shall mean Thirteen Million Four Hundred Thousand Dollars ($13,400,000),
subject to reduction in accordance with the provisions of this Note.
The Maximum Revolving Loan Amount shall be permanently reduced by the
amount of $250,000 on the last day of each calendar quarter beginning on June
30, 2001 (a "Reduction Date") and any principal and accrued interest shall be
due and payable on each Reduction Date to the extent that the Revolving Loans
then outstanding would otherwise exceed the Maximum Revolving Loan Amount. Payee
shall, and is hereby authorized by Maker to, endorse on the schedule attached
hereto an appropriate notation evidencing the date and amount of each Revolving
Loan from Payee and the
Page 1 of 7
date and amount of each payment and prepayment with respect thereto; provided
that the failure of the Payee to make such a notation on this Note or any error
in such notation shall not affect the obligations of Maker under this Note.
Maker shall pay Payee on each Reduction Date, in immediately available
funds, a revolving loan commitment fee (the "Fee") equal to 1/2 of 1% per annum
on the average unused amount of the Maximum Revolving Loan Amount for each
quarter ending on a Reduction Date. Such Fee shall be computed on the basis of
the actual number of days elapsed over a year of 360 days. Such Fee shall
commence on the date of this Note and cease to accrue on the earlier of the
Maturity Date or any termination of Payee's commitment to make Revolving Loans.
Maker shall have the right at any time, in its sole discretion and upon
not less than 10 days written notice to Payee, to further permanently reduce or
terminate the Maximum Revolving Loan Amount, provided, however, that each
partial reduction thereof shall be in an integral multiple of $250,000. Any
reduction of the Maximum Revolving Loan Amount shall be accompanied by payment
in full of any principal over the Maximum Revolving Loan Amount plus accrued
interest and accrued Fee computed as provided in the previous paragraph.
The principal balance of this Note may be prepaid and discharged in whole
or in part by Maker at any time and from time to time, without premium, penalty
or fee. Notwithstanding the prior sentence, all interest that is accrued and
unpaid with respect to the prepaid principal amount and the Fee accrued and
unpaid with respect to the unpaid Maximum Revolving Loan Amount shall be paid at
the time of the prepayment.
The Maker, signers, sureties, guarantors and endorsers of this Note,
jointly and severally, except as otherwise expressly set forth herein, waive
demand, presentment, notice of nonpayment or dishonor, diligence in collecting,
grace, notice of any protest, and consent to all extensions for any periods of
time and partial payments, before or after maturity.
If this Note is not paid at maturity, howsoever such maturity may be
brought about, and the same is placed in the hands of an attorney for
collection, or if this Note is collected by suit or through bankruptcy, probate
or other legal proceedings, Maker agrees to pay holder's costs of collection,
when incurred, including reasonable attorney's fees.
No delay in the payments to holder or in the exercise of any power or
right under this Note, or under any instrument securing payment hereof or
executed in connection herewith, shall operate as a waiver thereof, nor shall a
single or partial exercise of any power or right preclude other or further
exercise thereof or exercise of any other power or right.
Payment of the indebtedness evidenced by this Note is secured by the
security interests established by the following documents (the "Security
Documents"), to wit:
A Security Agreement dated as of February 9, 2001 executed by the
Maker and Payee covering certain securities owned by Maker.
Page 2 of 7
If at any time the Payee shall notify the Maker that a Collateral
Deficiency (as hereinafter defined) exits, then within 5 days of its receipt of
such notice, the Maker shall, at its option, do one of the following:
(a) prepay principal amounts outstanding under this Note, together with
accrued and unpaid interest on such principal amount to the date of
prepayment, so that immediately following such prepayment no
Collateral Deficiency exists, or
(b) provide the Payee with additional collateral under the Security
Documents reasonably acceptable to the Payee so that immediately
following delivery of such additional collateral no Collateral
Deficiency exists.
In the event a Collateral Deficiency occurs, ▇▇▇▇▇'s commitment to make
further Revolving Loans shall be terminated without notice, at the option of the
Payee, until such time as no Collateral Deficiency shall exist.
For purposes of this Note,
(a) a Collateral Deficiency exists at any time when the outstanding
principal amount together with accrued and unpaid interest on the Note
and the Fee exceeds 20% of the Collateral Value,
(b) Collateral Value is defined as the Current Market Value of all
securities pledged under the Security Documents, and
(c) Current Market Value is defined as, with respect to any security, the
most recent closing price of such security on the New York Stock
Exchange or any other nationally recognized securities exchange, or if
such security is not listed on a national securities exchange, the
closing price of such security as reported on the National Association
of Securities Dealers Automated Quotation System ("NASDAQ"), or, if
applicable, the average of the closing bid and ask quotation for such
security as reported on the NASDAQ.
The term default shall include any or all of the following:
(a) The assignment, voluntary or involuntary conveyance of legal or
beneficial interest, mortgage, pledge or grant of a security interest in
any of the Collateral (as defined in the Security Agreement); or
(b) The filing or issuance of a notice of any lien, warrant for
distraint or notice of levy for taxes or assessment against the Collateral
(except for those which are being contested in good faith and for which
adequate reserves have been created); or
(c) Maker's nonpayment of any installment of principal, interest or
the Fee under this Note; or
Page 3 of 7
(d) The adjudication of Maker as bankrupt, or the taking of any
voluntary action by Maker or any involuntary action against Maker seeking
an adjudication of Maker as bankrupt, or seeking relief by or against
Maker under any provision of the Bankruptcy Code;
(e) Maker failing to comply with any other covenant in this Note or
in the Security Documents;
(f) Maker's default in any payment (regardless of amount) of
principal of or interest on any other indebtedness for borrowed money; or
(g) Maker's default in the observance or performance of any other
agreement or condition relating to any such other indebtedness for
borrowed money or contained in any instrument evidencing, securing or
relating thereto or any other event shall occur or condition exist, the
effect of which default or other event or condition is to cause, or to
permit the holder of the indebtedness to cause, such other indebtedness
for borrowed money to become due prior to its stated maturity.
An "Event of Default" shall be deemed to have occurred immediately upon
any default described in clause (d) or (g) above, if any default described in
clauses (c) or (f) above is not cured within 5 days, and if any default
described in clauses (a), (b), or (e) is not cured within 30 days after written
notice from Payee to Maker.
If an Event of Default has occurred and is continuing, the entire
principal balance and accrued interest owing hereof shall at once become due and
payable and the commitment to make Revolving Loans shall be terminated without
notice, at the option of the Payee, and the property covered by the Security
Documents shall be subject to foreclosure under applicable law. Failure to
exercise this option shall not constitute a waiver of the right to exercise the
same in the event of any subsequent default. In the event any payment, including
interest or principal, required to be made under this Note is not made when due,
interest on the overdue sum shall accrue at a rate of prime plus four percent.
So long as the Note shall remain unpaid, the Maker shall furnish to the
Payee:
(a) as soon as available and in any event not later than 45 days after the
end of each of the first three quarters of each fiscal year of the
Maker, the consolidated balance sheet of the Maker as of the end of
such quarter and the consolidated statements of income and retained
earnings and cash flows of the Maker for the period commencing at the
end of the previous year and ending with the end of such quarter, all
in reasonable detail and duly certified with respect to such
consolidated statements (subject to year-end adjustments) by an
officer of the Maker as having been prepared in accordance with
generally accepted accounting principles;
(b) as soon as available and in any event not later than 90 days after the
end of each fiscal year of the Maker, a copy of the annual audit
report for such year for the Maker, including therein consolidated
balance sheets of the Maker as of the end of such fiscal year and
consolidated statements of income and retained earnings
Page 4 of 7
and of cash flows of the Maker for such fiscal year, in each case
certified by PricewaterhouseCoopers LLP or other independent certified
public accountants of recognized standing reasonably acceptable to
Payee.
This Note shall be construed in accordance with the laws of the State of
New Jersey and the laws of the United States applicable to transactions in New
Jersey.
Page 5 of 7
IN WITNESS WHEREOF, the undersigned Maker has executed this Note as of the
9th day of February, 2001.
Tremont Corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Its: Vice President
------------------------------------
Acknowledged and agreed to by the undersigned solely with respect to its
obligations in the second and third paragraph of this Note:
NL Environmental Management Services, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Assistant Treasurer
-------------------------------------
Page 6 of 7
SCHEDULE OF REVOLVING LOANS
Type of Transaction
(Loan or Payment) Date Amount
------------------- ---- ------
Page 7 of 7