EXHIBIT 10.50
FIRST AMENDMENT TO
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AMENDED AND RESTATED CREDIT AGREEMENT
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This FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this "First
Amendment") is entered into on this 17 day of April, 2001, by and among:
CITIZENS BANK OF MASSACHUSETTS (the "Lender"), a Massachusetts state
chartered bank having offices located at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇; and
JLM INDUSTRIES, INC., a corporation organized under the laws of
Delaware ("JLM Industries"), JLM MARKETING, INC., a corporation
organized under the laws of Delaware ("JLM Marketing"), JLM TERMINALS,
INC., a corporation organized under the laws of North Carolina ("JLM
Terminals"), JLM INTERNATIONAL, INC., a corporation organized under
the laws of Delaware ("JLM International"), JLM CHEMICALS, INC., a
corporation organized under the laws of Delaware ("JLM Chemicals"),
and ▇▇▇▇▇▇▇▇ CHEMICAL CORPORATION, f/k/a ▇▇▇▇▇▇▇▇ Acquisition, Inc., a
Delaware corporation ("▇▇▇▇▇▇▇▇ Chemical"), JLM REALTY, INC., a North
Carolina corporation("JLMRealty"),MAC AVIATION ENTERPRISES, Inc a
Delaware corporation ("Aviation"), JLM (IND.), INC., an Indiana
corporation ("JLM (Ind.)"), ILLINOIS MARKETING SERVICES, INC.,an
Illinois corporation ("Illinois Marketing"), ILLINOIS INTERNATIONAL
SERVICES, INC., an Illinois corporation ("Illinois Services"), and JLM
EXPORT COMPANY, a corporation organized under the laws of Barbados
("JLM Export" and collectively, jointly and severally, together with
JLM Industries, JLM Marketing, JLM Terminals, JLM International, JLM
Chemicals, ▇▇▇▇▇▇▇▇ Chemical, JLM Realty, Aviation, JLM (Ind.),
Illinois Marketing, and Illinois Services, the "Obligors");
Background
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The Obligors and the Bank entered into a certain Amended and Restated
Credit Agreement dated as of November 1, 1999 (as amended and modified from time
to time, the "Credit Agreement"). Capitalized terms used herein and not
otherwise defined in this First Amendment shall have the meanings as set forth
in the Credit Agreement.
Certain Events of Default have occurred and are continuing under the Credit
Agreement, as a result of, among other things, the Obligors failure to comply
with certain Financial Covenants set forth in Article 8 of the Credit Agreement.
At this time, the Obligors have requested that the Bank (i) waive certain
Defaults which have occurred under the Credit Agreement and (ii) amend certain
terms and conditions of the Credit Agreement, as more particularly set forth
herein. The Bank has agreed to do so, but only upon the terms and conditions set
forth in this First Amendment
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Accordingly, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is hereby agreed by and among
the Bank and the Obligors, as follows:
Acknowledgment of Indebtedness
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1. The Obligors each hereby acknowledge and agree that, in accordance with
the terms and conditions of (i) the Facility Documents and (ii) this First
Amendment, they are jointly and severally liable to the Bank as of April _____,
2001 as follows:
(a) Revolving Credit Note:
Principal: $
Interest: $
Late Fees: $
Subtotal $
(b) Term Note:
Principal: $
Interest: $
Late Fees: $
Subtotal $
(c) Letter of Credit Obligations: $
(d) Florida Term Note:
Principal: $
Interest: $
Late Fees: $
Subtotal $
(e) Legal Fees & Expenses
(as of April ___, 2001): $
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(f) For all interest accruing from and after April , 2001 under
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the Revolving Credit Note, the Term Note and the Florida Term Note,
respectively, and all late fees, costs, expenses, and costs of collection
(including external attorneys' fees) incurred by the Bank from and after
April , 2001 in connection with the Facility Documents, including,
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without limitation, all attorney's fees and expenses incurred in connection
with the negotiation and preparation of this First Amendment and all
documents, instruments, and agreements incidental hereto.
(g) Hereinafter all amounts due as set forth in this Section 1, and
payable under this First Amendment, shall be referred to collectively as
the "Obligations".
Conditions to Effectiveness
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2. This First Amendment shall not be effective unless and until each of
the following conditions precedent have been fulfilled to the sole satisfaction
of the Bank:
(a) JLM Terminals shall have executed and delivered to the Bank the
Deed of Trust Third Modification Agreement with respect to the amendment of
the North Carolina Deed of Trust, attached hereto as Exhibit "A";
(b) ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ [("▇▇▇▇▇▇▇▇▇")] shall have executed and
delivered to the Bank :
(i) A fully completed Personal Financial Statement, in form and
substance acceptable to the Bank in its sole and absolute discretion,
and contain a representation and warranty by Macdonald that it is a
complete disclosure, and is true and accurate in all respects; and
(ii) The Unlimited Guaranty of Payment and Performance (as more
particularly set forth in Section 12 of this First Amendment);
(c) JLM Industries shall have executed and delivered to the Bank the
Warrant and related documents (as more particularly set forth in Section 13
of this First Amendment);
(d) The Obligors shall have paid to the Bank (i) the Amendment Fee
referenced in Section 3 of this First Amendment, and (ii) an amount
sufficient to reimburse the Bank for all costs, expenses, and charges
(including, without limitation, fees and charges of external legal counsel
for the Bank) incurred by the Bank in connection with the preparation,
performance, or enforcement of this First Amendment and any of the other
Facility Documents, all in good and collected funds;
(e) The Obligors have delivered certificates or other evidence of
casualty insurance policies covering all of the Property subject to the
Lien of the Security Documents with appropriate loss payable endorsements
indicating assignment of proceeds thereunder to the Bank and certificates
or other evidence of liability insurance with appropriate endorsements
indicating the coverage of the Bank as an additional insured and loss
payee;
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(f) This First Amendment shall have been duly executed and delivered
by duly authorized signatories of the respective parties hereto; and
(g) All action on the part of the Obligors necessary for the valid
execution, delivery and performance by the Obligors of this First Amendment
shall have been duly and effectively taken and evidence thereof
satisfactory to the Bank shall have been provided to the Bank.
Amendment Fee
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3. In consideration of the Bank's agreement to enter into this First
Amendment, the Obligors shall, upon the execution of the Agreement, pay to the
Bank a fee in the amount of $300,000 (the "Amendment Fee"). The Amendment Fee
shall (i) be fully earned as of the date of the execution of this First
Amendment, and (ii) retained by the Bank under all circumstances as a fee and
not be applied in reduction of the Obligations.
Waiver of Claims
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4. The Obligors each hereby acknowledge and agree that they have no
offsets, defenses, claims, or counterclaims against the Bank or the Bank's
officers, directors, employees, attorneys, representatives, predecessors,
successors, and assigns with respect to the Obligations, the Facility Documents,
or otherwise, and that if the Obligors now have, or ever did have, any offsets,
defenses, claims, or counterclaims against the Bank or the Bank's officers,
directors, employees, attorneys, representatives, predecessors, successors, and
assigns, whether known or unknown, at law or in equity, from the beginning of
the world through this date and through the time of execution of this First
Amendment, all of them are hereby expressly WAIVED, and the Obligors each hereby
RELEASE the Bank and the Bank's officers, directors, employees, attorneys,
representatives, predecessors, successors, and assigns from any liability
therefor.
Ratification of Facility Documents; Joinder of Additional Entities; Further
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Assurances
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5. ▇▇▇▇▇▇▇▇ Chemical, JLM Realty, Aviation, JLM (Ind.), Illinois
Marketing, Illinois Services, and JLM Export hereby acknowledge and agree:
(a) Each of them have, by this First Amendment, joined as one of the
"JLM Domestic Entities" under and as defined in, the Credit Agreement; and
(b) Each of them shall be jointly and severally liable, together with
all of the other Obligors, for the payment and performance all liabilities
and all of the Obligations of the JLM Domestic Entities thereunder;
6. The Obligors:
(a) Hereby ratify, confirm, and reaffirm all and singular the terms
and conditions of the Facility Documents. The Obligors further acknowledge
and agree that except as specifically modified in this First Amendment, all
terms and conditions of those documents, instruments, and agreements shall
remain in full force and effect;
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(b) Hereby acknowledge and agree that all of the Collateral shall
continue to secure all of the Obligations until the Obligations have been
paid in full and the Bank has provided the Obligors with terminations of
the liens on the Collateral[, which terminations shall be provided to the
Obligors within a reasonable time period after (i) all of the Obligations
have been paid in full, in good and collected funds, and (ii) the Credit
Agreement has been terminated by the Bank in writing]; and
(c) Shall, from and after the execution of this First Amendment,
execute and deliver to the Bank whatever additional documents, instruments,
and agreements that the Bank reasonably may require in order to vest or
perfect the Facility Documents and the Collateral granted therein more
securely in the Bank and to otherwise give effect to the terms and
conditions of this First Amendment, including, without limitation, such
UCC-1 Financing Statements and other documents as the Bank may determine
necessary or desirable.
Waiver of Certain Events of Default
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7. In consideration of the Obligors performance of each and every term
and condition of this First Amendment, the Bank hereby agrees to waive, pursuant
to Section 12.1 of the Credit Agreement, any Default or Events of Default which
have occurred due to the failure of the Obligors to comply with the financial
covenants contained in (i) Section 8.1(a) for the fiscal quarters ended
September 30, 2000 and December 31, 2000, (ii) Section 8.1(b) for the fiscal
year ended December 31, 2000, (iii) Section 8.2 for the fiscal quarters ended
September 30, 2000 and December 31, 2000, (iv) Section 8.3 for the fiscal
quarters ended September 30, 2000 and December 31, 2000, and (v) Section 8.4 for
the fiscal year ended December 31, 2000, (collectively, the "Existing
Defaults"). In connection with the waiver of the Existing Defaults, the Obligors
hereby expressly acknowledge and agree as follows:
(a) The waiver of the Existing Defaults:
(i) shall apply only to the defaults specified herein for the
time period specified herein which have occurred under the terms and
conditions of the Credit Agreement;
(ii) constitutes a one-time waiver; and
(iii) shall not constitute a waiver of any Default or Events of
Default whether now existing or arising after the execution of this
First Amendment, other than the Existing Defaults.
(b) The waiver of the Existing Defaults shall not prejudice any
rights or remedies the Bank may have after the date hereof to declare an
Event of Default, or to exercise its rights and remedies with respect to
such Default, with respect to any failure of the Obligors to be in
compliance with any term or condition of the Credit Agreement or any other
term of the Facility Documents.
Perfection Certificates
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8. On or before the execution of this First Amendment, each of the
Obligors shall fully complete, execute and deliver to the Bank a Perfection
Certificate, in the form attached hereto as Exhibit "B".
Additional Collateral
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9. ▇▇▇▇▇▇▇▇ Chemical, JLM Realty, Aviation, JLM (Ind.), Illinois
Marketing, Illinois Services, and JLM Export shall, within thirty (30) days of
the execution of this Agreement, each execute and deliver to the Bank a security
agreement in form and substance satisfactory to the Bank in its sole and
exclusive discretion, pursuant to each of them shall grant the Bank a security
interest in and to all of their respective personal property; and
10. JLM Chemicals shall, within thirty (30) days of the execution of this
Agreement, grant the Bank a first mortgage lien encumbering the Blue Island
Property as security for all of the Obligations, by promptly delivering all
items required to be delivered pursuant to Section 6.10 of the Credit Agreement,
all in form and substance reasonably satisfactory to the Bank; and
11. JLM Industries shall, within thirty (30) days of the execution of this
Agreement, grant to the Bank a first priority perfected pledge and security
interest in sixty-five (65%) percent of all of the capital stock issued by any
foreign Subsidiary of JLM Industries or any of its [domestic] Subsidiaries,
including, without limitation, JLM Europe B.V., JLM Industries de Venezuela,
C.A., JLM Chemicals Canada, Inc., and JLM Industries (South Africa) Pty Ltd, all
as security for the payment and performance of the Obligations. The foregoing
pledge shall be in form and substance reasonably satisfactory to the Bank, and
JLM Industries shall execute whatever additional documentation as may be
necessary or desirable by the Bank to effectuate the pledge.
Guaranty of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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12. On or before the execution of this First Amendment the Obligors shall
have caused Macdonald, an individual having a mailing address of ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ to have executed and delivered to the Bank an
Unlimited Guaranty of Payment and Performance, in the form attached hereto as
Exhibit "C", pursuant to which Macdonald shall unconditionally guaranty the
prompt payment and performance of all of the Obligations of the Obligors to the
Bank.
Warrant
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13. On or before the execution of this First Amendment, JLM Industries
shall execute and deliver to the Bank a common stock purchase warrant (the
"Warrant"), substantially in the form of the Warrant annexed hereto as Exhibit
"D", together with such other documents as the Bank may require in connection
therewith. The Obligors expressly acknowledge and agree that the Bank's
agreements to modify the Facility Documents and to continue to make any Loan
under the Credit Agreement, as more particularly set forth in this First
Amendment, are expressly conditioned upon JLM Industries' prior execution and
delivery of the Warrant to the Bank. In the event that no Event of Default has
occurred under the Facility Documents and all of the Obligations have been paid
in full by in full by no later than 5:00 p.m. on October 1, 2001, then the Bank
hereby agrees to execute and deliver to JLM Industries an Amendment to the
Warrant
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(the "Amendment to the Warrant"), which shall provide for the reduction in the
amount of the shares of stock which the Bank shall be entitled to purchase from
JLM Industries (in accordance with the terms of the Warrant) from 250,000 to
125,000. Notwithstanding the foregoing, the number of shares purchasable under
the Warrant shall remain subject to adjustment as provided for in the Warrant.
Further, the Amendment to the Warrant shall be in form and substance
satisfactory to the Bank as the Bank may determine in its reasonable discretion.
Elimination of Eurodollar Loans
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14. From and after the date of this First Amendment, and notwithstanding
anything in the Facility Documents to the contrary, the Obligors ability to
request (i) that a Eurodollar Loan be made, (ii) that a Loan be converted to a
Eurodollar Loan in accordance with Section 2.5(a) of the Credit Agreement,
and/or (iii) that a Eurodollar Loan be renewed in accordance with Section 2.6(b)
of the Credit Agreement, is hereby terminated. Any existing Eurodollar Loans
shall accrue interest and shall be repaid in accordance with the terms and
conditions of the Credit Agreement. Further, at the expiration of any applicable
existing Interest Period, such Eurodollar Loan shall automatically become a
Prime Rate Loan on the last day of the current Interest Period.
Letters of Credit
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15. The Obligors hereby acknowledge and agree as follows:
(a) From and after the execution of this First Amendment, the Bank's
obligation to issue, renew or extend any Letters of Credit/1/ (or bankers'
acceptances or other such credits) for the account of JLM Industries, as
more particularly set forth in Article 3 of the Credit Agreement, is hereby
terminated.
(b) JLM Industries shall use its best good faith efforts to arrange
for the surrender of all existing Letters of Credit, with the sole
exception of Letter of Credit No. 041085, as set forth in footnote 1 below,
and to obtain the written direction from the applicable beneficiary of such
Letters of Credit instructing the Bank to cancel the Letter of Credit.
(c) The Obligors shall provide the Bank with cash collateral to
secure all Letter of Credit Obligations which remain outstanding,
including, without limitation, Letter of Credit No. 041085, as set forth in
footnote 1 below, upon the earlier to occur of (i) an Event of Default
under the Facility Documents, or (ii) 5:00 p.m. on June 15, 2001.
Capital Stock Purchases
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/1/ With the sole exception of Letter of Credit No. 041085 in favor of
▇▇▇▇▇▇▇▇ Chemical Corp., in the stated amount of $1,500,000, which the Bank
shall, upon terms and conditions acceptable to the Bank, extend the expiry date
to June 15, 2001.
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16. From and after the execution of this First Amendment, JLM Industries
shall immediately cease the practice of purchasing the capital stock of JLM
Industries from public shareholders or otherwise.
Mandatory Prepayment of Term Loan
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17. The Obligors have advised the Bank that they have undertaken to obtain
additional equity investments and subordinated debt, to be used to reduce the
amounts outstanding under the Term Note. In that regard, the Obligors shall by
no later than June 15, 2001, in addition to all amounts otherwise due under the
Credit Agreement, remit to the Bank such amount as is necessary to reduce the
amount of the outstanding Obligations under the Term Note to no more than
$5,300,000.00, or less if the aggregate amount of the net proceeds from the
additional equity investments and subordinated debt permit. The Obligors hereby
acknowledge and agree that the failure to prepay the Term Note as set forth
above shall constitute an Event of Default.
Repayment of Florida Term Loan
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18. The Obligors have advised the Bank that they have obtained a lending
commitment from SouthTrust Bank to refinance the existing obligations under the
Florida Term Note. In that regard, the Obligors shall pay all of the Obligations
due under the Florida Term Loan in full, including, without limitation, all
principal, interest, fees, costs, expenses, and costs of collection (including
reasonable attorneys' fees), on or before the earlier of (i) the occurrence of
an Event of Default or (ii) 5:00 P.M. on June 15, 2001.
Amendments to Credit Agreement
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1. Definitions. From and after the effectiveness of this First Amendment,
Section 1.1 of the Credit Agreement is hereby amended as follows:
(a) The definition of "Applicable Margin" is hereby deleted in its
entirety.
(b) The definition of "Applicable Measurement Date" is hereby deleted
in its entirety.
(c) By inserting the following definition of "Consolidated Net Worth"
immediately below the definition of "Consolidated Net Income":
"Consolidated Net Worth" means, at any date of determination
thereof, the aggregate of (a) Consolidated Tangible Assets, plus (b)
all intangible assets of the JLM Entities, including all patents,
copyrights, trademarks, trade names, franchises, goodwill and other
similar intangible assets, as determined on a consolidated basis in
accordance with GAAP, minus Consolidated Total Liabilities.
(d) The definition of "Default Rate" is hereby deleted in its
entirety and the following text shall be inserted in its stead:
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"Default Rate" means, with respect to the principal of any Loan
and, to the extent permitted by law, any other amount payable by the
Obligors under this Agreement or any Note that is not paid when due
(whether at stated maturity, by acceleration or otherwise), during the
period from and including the due date, to, but excluding the date on
which such amount is paid in full, a rate per annum equal to eighteen
(18%) percent.
(e) The definition of "Performance Level" is hereby deleted in its
entirety.
(f) The definition of "Performance Level I" is hereby deleted in its
entirety.
(g) The definition of "Performance Level II" is hereby deleted in its
entirety.
(h) The definition of "Performance Level III" is hereby deleted in
its entirety.
(i) The definition of "Revolving Credit Commitment" is hereby deleted
in its entirety and the following text is inserted in its stead:
"Revolving Credit Commitment" means the obligation of the Bank to
make the Revolving Credit Loans or issue the Letters of Credit under
this Agreement in the aggregate principal amount of $12,500,000,
subject to Borrowing Base limitations, as such amount may be limited
or reduced pursuant to Article 2 or otherwise modified from time to
time.
(j) The definition of "Revolving Credit Termination Date" is hereby
deleted in its entirety and the following text is inserted in its stead:
"Revolving Credit Termination Date" means June 15, 2001.
(k) The definition of "Termination Date" is hereby deleted in its
entirety and the following text is inserted in its stead:
"Termination Date" means October 1, 2001.
20. Section 2.10. Interest. From and after the effectiveness of this First
Amendment, Section 2.10(a) of the Credit Agreement is hereby deleted in its
entirety and the following text shall be inserted in its stead:
(a) Interest shall accrue on the outstanding and unpaid
principal amount of each Loan for the period from and including the
date of such Loan to but excluding the date such Loan is due at the
following rates per annum: (i) for a Prime Rate Loan, at a variable
rate per annum equal to the Prime Rate plus three (3%) percent and
(ii) for a Eurodollar Loan, at a fixed rate equal to the Eurodollar
Rate plus three (3%) percent. If the principal amount of any Loan and
any other amount payable by JLM Industries hereunder or under any Note
shall not be paid when due (at stated maturity, by acceleration or
otherwise), interest shall accrue on such amount, to the fullest
extent permitted by law, from and including such due date to but
excluding the date such amount is paid in full at the Default
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Rate. After the occurrence of an Event of Default other than payment
defaults described in the preceding sentence, then the Bank may, by
written notice to JLM Industries, increase the interest rate hereunder
during the continuance of such Event of Default to the Default Rate,
effective on the date of such notice.
21. Article 8.0. Financial Covenants. From and after the effectiveness of
this First Amendment, Section 8.0 of the Credit Agreement is hereby amended as
follows:
(a) By deleting Sections 8.1, and 8.2, and inserting the following
text as a new Section 8.1 and Section 8.2:
Section 8.1. Minimum Quarterly EBITDA. JLM Industries shall
maintain, as determined at the end of each calendar quarter, a minimum
quarterly Consolidated EBITDA level of not less than $1,000,000,
excluding non-cash, non-recurring expenses.
Section 8.2. Minimum Consolidated Net Worth. JLM Industries
shall not, at any time, permit its Consolidated Net Worth to be less
than $27,000,000.
(b) Section 8.3. Leverage Ratio is hereby deleted in its entirety.
(c) Section 8.4. Debt Service Coverage Ratio, is hereby deleted in
its entirety, and the following text is inserted in its stead:
Section 8.4. Debt Service Coverage Ratio. JLM Industries shall
maintain, as determined at the end of each calendar month, a Debt
Service Coverage Ratio of not less than 1.1 to 1.0.
Refinancing of the Obligations
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22. The Obligors have indicated to the Bank that they shall be satisfying
all Obligations in full through the proceeds of a refinancing loan. In that
regard, the Obligors:
(a) Hereby authorize the Bank to communicate directly with any
proposed refinancing lender identified by the Obligors in order to
ascertain the status of the refinancing.
(b) Shall:
(i) Ensure that the refinancing of the Revolving Credit Note
and the Florida Term Note is consummated on or before June 15, 2001,
and that all remaining Obligations are refinanced on or before October
1, 2001;
(ii) Keep the Bank apprised of all material developments in
connection with their efforts to consummate the refinancing, and
provide the Bank with copies of any notices, term sheets, or other
communication relating to the refinancing from any potential lender;
and
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(iii) Provide the Bank with written notice within 24 hours of
the occurrence of any event or development from which it is apparent,
or should be apparent, to the Obligors that the refinancing of the
Revolving Credit Note and the Florida Term Note will not be
consummated on or before June 15, 2001, and/or that the refinancing of
all remaining Obligations will not be consummated on or before October
1, 2001, or that the proceeds from each refinancing will be
insufficient to pay the Obligations in full, as and when due.
Additional Financial Reporting Requirements
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23. In addition to all other reporting requirements contained in the
Facility Documents, each of the Obligors shall submit the following financial
information to the Bank:
(a) Rolling Thirteen (13) Week Cash Flow Forecast: Commencing on
Wednesday, April 18, 2001 and continuing on Wednesday of each calendar week
thereafter, the Obligors shall submit to the Bank, an updated rolling
thirteen (13) week cash flow forecast, whereby the first week shall be
deleted and updated with the week immediately succeeding the last week
included in the previous report, to be prepared by senior management of JLM
Industries;
(b) Accounts Receivable Agings: Commencing upon the execution of this
First Amendment, and continuing on Wednesday of each calendar week
thereafter, the Obligors shall submit to the Bank an aging of its open
accounts receivable for the immediately preceding calendar week.
(c) Inventory Reports: Commencing upon the execution of this First
Amendment, and continuing on Wednesday of each calendar week thereafter,
the Obligors shall submit to the Bank a detailed inventory report which
includes, at a minimum, a schedule of inventory by location and type for
the immediately preceding calendar week.
(d) Accounts Payable Agings: Commencing upon the execution of this
First Amendment, and continuing on Wednesday of each calendar week
thereafter, the Obligors shall submit to the Bank an accounts payable aging
for the immediately preceding calendar week. As an addendum to the accounts
payable aging, the Obligors shall provide a detailed listing of any held
checks outstanding as at the end of each calendar week.
(e) Borrowing Base Certificates: Commencing upon the execution of
this First Amendment, and continuing on Wednesday of each calendar week
thereafter, the Obligors shall submit to the Bank a Borrowing Base
Certificate for the immediately preceding calendar week.
(f) Financial Statements: Within thirty (30) days of the close of
each calendar month, the Obligors shall deliver to the Bank consolidated
and consolidating financial statements of profit and loss, cash flow, and a
balance sheet for the immediately preceding month and year to date period.
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(g) Certifications: All financial reporting required to be provided
to the Bank shall be certified both as to the accuracy and compliance with
required covenants by the Chief Executive Officer or Chief Financial
Officer of JLM Industries.
Field Examinations
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24. The Obligors each hereby agrees to fully cooperate and assist the Bank
and/or the Bank's auditors, consultants, and/or other representatives in
conducting independent field examinations of the Obligors' respective operations
and their books and records (including without limitation all records relating
to accounts receivable, inventory, and accounts payable), which cooperation
shall include, without limitation, providing the Bank and/or the Bank's
auditors, consultants, and/or other representatives, reasonable access to the
Obligors' respective business premises, books and records, and/or other
information as may be required by the Bank in its sole and exclusive discretion.
The Obligors hereby acknowledge and agree that (i) the Bank may conduct as many
field examinations as the Bank may determine are reasonably necessary, and (ii)
the Obligors are jointly and severally liable for the payment of any and all
costs and expenses incurred by the Bank in connection with such appraisals and
field examinations, and shall reimburse the Bank on demand for same.
Costs of Collection
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25. The Obligors shall:
(a) On or before the execution of this First Amendment, pay the Bank
the sum of $ in reimbursement for costs, expenses, and costs
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of collection (including attorneys' fees and expenses) incurred by the Bank
through April , 2001, in connection with the protection, preservation,
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and enforcement by the Bank of its rights and remedies under the Facility
Documents, including, without limitation, the negotiation and preparation
of this First Amendment; and
(b) Reimburse the Bank on demand for any and all costs, expenses, and
costs of collection (including attorneys' fees and expenses) incurred by
the Bank from and after April , 2001, in connection with the
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protection, preservation, and enforcement by the Bank of its rights and
remedies under the Facility Documents, including, without limitation, the
negotiation and preparation of this First Amendment, and for all reasonable
costs associated with travel, transportation and lodging.
Notices
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26. Any communication between the Bank and the Obligors shall be forwarded
via certified mail, return receipt requested, or via recognized overnight
courier, addressed as follows:
If to the Bank: Citizens Bank of Massachusetts
Managed Assets Division
Mail Stop: MBS970
5s ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn.: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Senior Vice President & Team Leader
Page 12 of 19
With a copy via telecopier to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ LLP
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
If to the Obligors:
JLM Industries, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President and CEO
With a copy via telecopier to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
Vice President, General Counsel
JLM Industries, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
Waivers
-------
27. Non-Interference. From and after the occurrence of any Event of
Default, the Obligors agree not to interfere with the exercise by the Bank of
any of its rights and remedies. The Obligors further agree that they shall not
seek to distrain or otherwise hinder, delay, or impair the Bank's efforts to
realize upon any of the collateral granted to the Bank under the Facility
Documents, or otherwise to enforce the Bank's rights and remedies pursuant to
the Facility Documents. This provision shall be specifically enforceable by the
Bank.
28. Automatic Stay. The Obligors agree that upon the filing of any
Petition for Relief by or against any one or more of the Obligors under the
United States Bankruptcy Code, the Bank shall be entitled to immediate and
complete relief from the automatic stay, and the Bank shall be permitted to
proceed to protect and enforce its rights and remedies under state law. The
Obligors hereby expressly assent to any motion filed by the Bank seeking relief
from the automatic stay. The Obligors further hereby expressly WAIVE the
protections afforded under ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Bankruptcy Code with
respect to the Bank.
29. Jury Trial. The Obligors hereby make the following waiver knowingly,
voluntarily, and intentionally, and understand that the Bank, in entering into
this First Amendment, is relying on such a waiver: THE OBLIGORS HEREBY
IRREVOCABLY WAIVE ANY PRESENT OR FUTURE RIGHT TO A JURY IN ANY TRIAL OF ANY CASE
OR CONTROVERSY IN WHICH THE BANK BECOMES A PARTY (WHETHER SUCH CASE OR
CONTROVERSY IS INITIATED BY OR AGAINST THE BANK OR IN WHICH THE BANK IS JOINED
AS A PARTY LITIGANT), WHICH
Page 13 of 19
CASE OR CONTROVERSY ARISES OUT OF, OR IS IN RESPECT OF, ANY RELATIONSHIP BETWEEN
THE OBLIGORS, OR ANY OTHER PERSON, AND THE BANK.
Entire Agreement
----------------
30. This First Amendment shall be binding upon the Obligors and the
Obligors' respective employees, representatives, successors, and assigns, and
shall inure to the benefit of the Bank and the Bank's successors and assigns.
This First Amendment and all documents, instruments, and agreements executed in
connection herewith incorporate all of the discussions and negotiations between
the Obligors and the Bank, either expressed or implied, concerning the matters
included herein and in such other documents, instruments and agreements, any
statute, custom, or usage to the contrary notwithstanding. No such discussions
or negotiations shall limit, modify, or otherwise affect the provisions hereof.
No modification, amendment, or waiver of any provision of this First Amendment,
or any provision of any other document, instrument, or agreement between the
Obligors and the Bank shall be effective unless executed in writing by the party
to be charged with such modification, amendment, or waiver, and if such party be
the Bank, then by a duly authorized officer thereof.
Construction of Agreement
-------------------------
31. In connection with the interpretation of this First Amendment and all
other documents, instruments, and agreements incidental hereto:
(a) All rights and obligations hereunder and thereunder, including
matters of construction, validity, and performance, shall be governed by
and construed in accordance with the law of the Commonwealth of
Massachusetts and are intended to take effect as sealed instruments.
(b) The captions of this First Amendment are for convenience purposes
only, and shall not be used in construing the intent of the Bank and the
Obligors under this First Amendment.
(c) In the event of any inconsistency between the provisions of this
First Amendment and any other document, instrument, or agreement entered
into by and between the Bank and the Obligors, the provisions of this First
Amendment shall govern and control.
(d) The Bank and the Obligors have prepared this First Amendment and
all documents, instruments, and agreements incidental hereto with the aid
and assistance of their respective counsel. Accordingly, all of them shall
be deemed to have been drafted by the Bank and the Obligors and shall not
be construed against either the Bank or the Obligors.
(e) This First Amendment shall constitute one of the Facility
Documents.
Illegality or Unenforceability
------------------------------
32. Any determination that any provision or application of this First
Amendment is invalid, illegal, or unenforceable in any respect, or in any
instance, shall not affect the validity,
Page 14 of 19
legality, or enforceability of any such provision in any other instance, or the
validity, legality, or enforceability of any other provision of this First
Amendment.
Informed Execution
------------------
33. The Obligors warrant and represent to the Bank that the Obligors: (i)
have read and understand all of the terms and conditions of this First
Amendment, (ii) intend to be bound by the terms and conditions of this First
Amendment, (iii) are executing this First Amendment freely and voluntarily,
without duress, after consultation with independent counsel of their own
selection.
[remainder of this page intentionally left blank]
Page 15 of 19
IN WITNESS WHEREOF, this First Amendment has been executed this 17th day
-- ---
of April, 2001.
Citizens Bank of Massachusetts JLM Industries, Inc.
By: ___________________________
Name:
Title:
JLM Terminals, Inc.
By: ___________________________
Name:
Title:
JLM Marketing, Inc.
By: ___________________________
Name:
Title:
JLM International, Inc.
By: ___________________________
Name:
Title:
JLM Chemicals, Inc.
By: ___________________________
Name:
Title:
▇▇▇▇▇▇▇▇ Chemical Corporation,
By: ___________________________
Name:
Title:
JLM Realty, Inc.,
Page 16 of 19
By: ___________________________
Name:
Title:
Mac Aviation,
By: ___________________________
Name:
Title:
JLM (Ind.), Inc.,
By: ___________________________
Name:
Title:
Illinois Marketing Services, Inc.,
By: ___________________________
Name:
Title:
Illinois International Services, Inc.,
By: ___________________________
Name:
Title:
JLM Export Company,
By: ___________________________
Name:
Title:
Page 17 of 19
---------------------- REVISION LIST ----------------------
The bracketed numbers refer to the Page and Paragraph for the start of the
paragraph in both the old and the new documents.
[1:5 1:5] Changed "Inc., a __________________ ... ("▇▇▇▇▇▇▇▇" to "Inc., a
Delaware ... ("▇▇▇▇▇▇▇▇"
[1:5 1:5] Changed "REALTY, INC., ... Realty")," to "REALTY, INC., ...
Realty"),"
[1:5 1:5] Changed "AVIATION, ... ("Aviation")," to "AVIATION, ...
("Aviation"),"
[1:5 1:5] Changed "(IND.), INC., ... corporation ("JLM" to "(IND.), INC., ...
corporation ("JLM"
[1:5 1:5] Changed "MARKETING ... Marketing")," to "MARKETING ...
Marketing"),"
[1:5 1:5] Changed "INTERNATIONAL ... Services")," to "INTERNATIONAL ...
Services"),"
[1:5 1:5] Changed "COMPANY, a ... corporation ("JLM" to "COMPANY, a ...
Barbados ("JLM"
[2:12 2:12] Changed "attorneys' ... counsel) " to "external attorneys'
fees)"
[3:5 3:5] Changed "Macdonald shall" to "Macdonald ("Macdonald") shall"
[3:5 3:5] Changed "Bank the" to "Bank:"
[3:5 3:5] Changed "Bank the Unlimited ... Amendment);" to "Bank"
[3:5 3:6] Add Para "(i) A fully completed ... respects; and "
[3:5 3:7] Changed "Bank the" to "(ii) The Unlimited"
[3:12 4:2] Changed "$330,000" to "$300,000"
[4:9 4:11] Changed "Collateral;" to "Collateral, ... in writing;"
[5:14 6:2] Changed "its Subsidiaries," to "its domestic Subsidiaries,"
[6:2 6:4] Changed "caused ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇" to "caused Macdonald,"
[6:2 6:4] Changed "Macdonald ("Macdonald")," to "Macdonald,"
[6:2 6:4] Changed "_________________________________________ " to
"______________________________ _______________________ "
[6:4 6:6] Changed "Tuesday, July 10" to "October 1"
[6:4 6:6] Changed "from 500,000 to 250,000." to "from 250,000"
[6:4 6:6] Changed "250,000." to "250,000 to 125,000."
[7:2 7:5] Changed "Credit and" to "Credit, with ... below, and"
[7:3 7:6] Changed "outstanding upon" to "outstanding, ... below, upon"
[7:3 7:6] Changed "May 10" to "June 15"
[7:7 7:10] Changed "May 10" to "June 15"
[7:7 7:10] Changed "$4,500,000.00" to "$5,300,000.00"
[7:9 8:2] Changed "May 10" to "June 15"
[7:13 8:6] Changed ""Applicable " to ""Applicable "
[7:13 8:6] Changed "" " to "" "
[8:1 8:7] Changed "(c) The" to "(c) By inserting ... Net Income":"
[8:1 8:8] Add Para ""Consolidated Net ... Total Liabilities."
[8:1 8:9] Changed "(c) The" to "(d) The"
[8:3 8:11] Changed "(d) " to "(e) "
[8:4 8:12] Changed "(e) " to "(f) "
[8:5 8:13] Del Para "(f) The definition ... in its entirety."
[8:7 8:14] Changed "(h) The" to "(h) The definition ... entirety."
[8:7 9:1] Changed "(h) The" to "(i) The"
[8:8 9:2] Changed "$11,000,000" to "$12,500,000"
[8:9 9:3] Changed "(i) " to "(j) "
[8:10 9:4] Changed "May 10" to "June 15"
[8:11 9:5] Changed "(j) " to "(k) "
[8:12 9:6] Changed "July 10" to "October 1"
[9:3 9:11] Changed "Monthly " to "Quarterly "
Page 18 of 19
[9:3 9:11] Changed "month, " to "quarter, "
[9:3 9:11] Changed "monthly " to "quarterly "
[9:3 9:11] Changed "$400,000" to "$1,000,000"
[9:4 9:12] Changed "Minimum Consolidated ... Net Worth." to "Minimum
Consolidated Net Worth."
[9:4 9:12] Changed "its Consolidated ... Net Worth" to "its Consolidated
Net Worth"
[9:4 9:12] Changed "$27,500,000" to "$27,000,000"
[9:12 10:7] Changed "May 10" to "June 15"
[9:12 10:7] Changed "July 10" to "October 1"
[9:14 10:9] Changed "May 10" to "June 15"
[9:14 10:9] Changed "July 10" to "October 1"
[12:5 12:22] Changed "_____________________" to "▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
and CEO"
[12:7 12:24] Changed "______________________" to "▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire"
[12:8 12:25] Changed "______________________" to "Vice President, General
Counsel"
[12:9 12:26] Add Paras "JLM Industries, ... (▇▇▇) ▇▇▇-▇▇▇▇"
[12:9 13:1] Del Para "Telecopier No. "
[15:21 16:21] Changed "620461.3" to "620461.4"
Page 19 of 19
UNLIMITED GUARANTY OF PAYMENT AND PERFORMANCE
---------------------------------------------
For good and valuable consideration, the receipt and sufficiency of which
are acknowledged, the undersigned ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ hereby unconditionally
guarantees, in accordance with the terms hereof and without any prior written
notice, the payment and performance of all of the Liabilities (as defined
herein) of each of the JLM Domestic Entities (as defined below), to CITIZENS
BANK OF MASSACHUSETTS, a Massachusetts state chartered bank having offices
located at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ (the "Bank").
DEFINITIONS. As used herein, the following terms have the following
meanings:
"JLM Domestic Entities" shall have the meaning as set forth in the Credit
Agreement (as defined below);
"Liability" and "Liabilities" include, without limitation, all and each of
the following, whether now existing or hereafter arising:
(a) Any and all liabilities, debts, and obligations of the JLM
Domestic Entities to the Bank, each of every kind, nature, and
description, now existing or hereafter arising, including,
without limitation, those arising under or related to any of the
following documents (collectively, the "Loan Documents"):
(i) Amended and Restated dated as of November 3, 1999 entered
into among the JLM Domestic Entities and the Bank, as
amended by a certain First Amendment to Amended and
Restated Credit Agreement dated April ____, 2001
(collectively, as amended from time to time, the
"Credit Agreement");
(ii) Amended and Restated Promissory Note dated November 1,
1999 made by JLM Industries, Inc. payable to the Bank,
in the maximum principal amount of $14,500,000;
(iii) Amended and Restated Promissory Note dated November 1,
1999 made by JLM Industries, Inc. payable to the Bank,
in the maximum principal amount of $20,000,000;
(iv) Security Agreement dated as of November 26, 1997 among the
JLM Domestic Entities and the Bank, as amended by a
certain Amendment No. 1 to Security Agreement dated as
of November 1, 1999;
(v) Deed of Trust and Security Agreement dated June 15, 1994,
between JLM Terminals, Inc., ▇. ▇. ▇▇▇▇, ▇▇., Trustee,
and the Bank, as recorded on July 5, 1994 with the New
Hanover County land records in Book 1788, at Page 0867,
as amended by (i) a certain Deed of Trust Modification
Agreement dated December 22, 1997 and recorded on
-1-
January 26, 1998 with said land records in Book 2300,
at Page 0903 and (ii) a certain Deed of Trust Second
Modification Agreement dated as of November 1, 1999 and
recorded on December 9, 1999 with said land records in
Book 2677, at Page 0861, and (iii) a certain Deed of
Trust Third Modification Agreement of even date
herewith;
(vi) Consolidated Promissory Note dated June 15, 1994 made
jointly and severally by JLM Industries, Inc. and JLM
Marketing, Inc. payable to State Street Bank and Trust
Company in the maximum principal amount of $2,000,000,
which Note is now held by the Bank by assignment; and
(vii) Mortgage dated December 2, 1992 granted by JLM Industries,
Inc. and JLM Marketing, Inc. to State Street Bank and
Trust Company, as recorded in Official Records Book
6812, Page 1027, of the public records of Hillsborough
County, Florida, as amended by a certain Mortgage
Modification Agreement and Notice of Future Advance
dated June 4, 1994, as recorded in Official Records
Book 7447, Page 1112, of the public records of
Hillsborough County, Florida;
(b) Each obligation to repay all loans, advances, indebtedness,
notes, obligations, overdrafts, and amounts now or hereafter at
any time owing by the JLM Domestic Entities to the Bank
(including all future advances or the like whether or not given
pursuant to a commitment by the Bank), whether or not any of such
are liquidated, unliquidated, primary, secondary, secured,
unsecured, direct, indirect, absolute, contingent, or of any
other type, nature, or description, or by reason of any cause of
action which the Bank may hold against the JLM Domestic Entities.
(c) All interest, fees, and other amounts which may be charged to the
JLM Domestic Entities and/or which may be due from the JLM
Domestic Entities to the Bank from time to time; all fees and
charges in connection with any account maintained by the JLM
Domestic Entities with the Bank or any service rendered by the
Bank; and all costs and expenses incurred or paid by the Bank in
respect of any agreement (whether now existing or hereafter
arising) among the JLM Domestic Entities and the Bank or
instrument heretofore or hereafter furnished by the JLM Domestic
Entities to the Bank (including, without limitation, Costs of
Collection, attorneys' fees, and all court and litigation costs
and expenses).
(d) Any and all covenants of the JLM Domestic Entities to or with the
Bank and any and all obligations of the JLM Domestic Entities to
act or to refrain from acting in accordance with the terms,
provisions, and
-2-
covenants of any agreement among the JLM Domestic Entities and
the Bank (whether now existing or hereafter arising) or
instrument or document heretofore or hereafter furnished by the
JLM Domestic Entities to the Bank.
(e) As used herein, the term "indirect" includes, without limitation,
all obligations and liabilities which the Bank may incur or
become liable for, on account of, or as a result of any
transactions among the Bank and the JLM Domestic Entities
including, without limitation, any which may arise out of any
letter of credit or banker's acceptance, or similar instrument
issued or obligation incurred by the Bank for the account of the
JLM Domestic Entities; any which may arise out of any action
brought or threatened against the Bank by the JLM Domestic
Entities, any guarantor or endorser of the Liabilities of the JLM
Domestic Entities, or by any other person in connection with the
Liabilities; and any obligation of the JLM Domestic Entities
which may arise as endorser or guarantor of any third party, or
as obligor to any third party, which obligation has been
endorsed, participated, or assigned to the Bank. The term
"indirect" also refers to any direct or contingent liability of
the JLM Domestic Entities to make payment towards any obligation
held by the Bank (including, without limitation, on account of
any industrial revenue bond) to the extent so held by the Bank.
The Bank's books and records shall be prima facie evidence of the JLM
Domestic Entities' Liabilities.
"Costs of Collection" includes, without limitation, all attorneys' fees,
and out-of-pocket expenses incurred by the Bank's attorneys, and all costs
incurred by the Bank in the administration, negotiation, documentation, and
amendment of the Liabilities, this Guaranty, and all other instruments and
agreements executed in connection with or relating to the Liabilities,
including, without limitation, costs and expenses associated with travel on
behalf of the Bank. Costs of Collection also includes, without limitation, all
attorneys' fees, out-of-pocket expenses incurred by the Bank's attorneys, and
all costs and expenses incurred by the Bank, including, without limitation,
costs and expenses associated with travel on behalf of the Bank, which costs and
expenses are directly or indirectly related to, or in respect of, the Bank's
efforts to preserve, protect, collect, or enforce the Liabilities and/or the
Bank's Rights and Remedies or any of the Bank's rights and remedies against or
in respect of the JLM Domestic Entities, any other guarantor or other person
liable in respect of the Liabilities or any collateral granted to the Bank by
the JLM Domestic Entities, such guarantor, or other person (whether or not suit
is instituted in connection with such efforts).
INDEMNIFICATION. For said good and valuable consideration, the undersigned
also shall indemnify, defend, and hold the Bank, or any agent, employee,
officer, or representative of the Bank, harmless of and from any claim brought
or threatened against the Bank or any such person so indemnified by: the JLM
Domestic Entities; the undersigned; any other guarantor or endorser of the
Liabilities or any other person (as well as from attorneys' fees and expenses in
connection therewith) on account of the Bank's relationship with the JLM
Domestic Entities, the undersigned, or any other guarantor or endorser of the
Liabilities (each of which may be
-3-
defended, compromised, settled, or pursued by the Bank with counsel of the
Bank's selection, but at the expense of the undersigned).
INTEREST. The undersigned will pay on demand interest on all amounts due
to the Bank under this Guaranty, or arising under any documents, instruments, or
agreements relating to any collateral securing this Guaranty, from the time the
Bank first demands payment of this Guaranty at a rate equal to the highest rate
chargeable to the JLM Domestic Entities after the earlier of (i) demand, (ii)
maturity, or (iii) the occurrence of any event of default under any instrument,
document or agreement heretofore or hereafter executed by the JLM Domestic
Entities (but in no event higher than the highest rate of interest which under
the circumstances may be charged under applicable law).
OFFSET. Any and all deposits or other sums at any time credited by or due
to the undersigned from the Bank or any of its banking or lending affiliates,
and any cash, securities, instruments or other property of the undersigned in
the possession of the Bank, or any of its banking or lending affiliates, whether
for safekeeping or otherwise shall at all times constitute security for all
Liabilities and for any and all obligations of the undersigned to the Bank, now
existing or hereafter arising, and may be applied or set off against such
Liabilities and against the obligations of the undersigned to the Bank
including, without limitation, those arising hereunder, at any time, whether or
not such are then due and whether or not other collateral is then available to
the Bank.
OBLIGATIONS NOT AFFECTED. The obligations of the undersigned hereunder
shall not be affected by: any fraudulent, illegal, or improper act by the JLM
Domestic Entities, the undersigned, or any person liable or obligated to the
Bank for or on the Liabilities; any release, discharge, or invalidation, by
operation of law or otherwise, of the Liabilities; or the legal incapacity of
the JLM Domestic Entities, the undersigned, or any other person liable or
obligated to the Bank for or on the Liabilities. Interest and Costs of
Collection shall continue to accrue and shall continue to be deemed Liabilities
guarantied hereby notwithstanding any stay to the enforcement thereof against
the JLM Domestic Entities or disallowance of any claim therefor against the JLM
Domestic Entities.
INCORPORATION OF ALL DISCUSSIONS. The within instrument incorporates all
discussions and negotiations the undersigned and the Bank concerning the
guaranty and indemnification provided by the undersigned hereby. No such
discussions or negotiations shall limit, modify, or otherwise affect the
provisions hereof. No provision hereof may be altered, amended, waived,
cancelled or modified, except by a written instrument executed, sealed, and
acknowledged by a duly authorized representative of the Bank.
GENERAL WAIVERS. The undersigned waives: presentment, demand, notice, and
protest with respect to the Liabilities and this Guaranty; any delay on the part
of the Bank; any right to require the Bank to pursue or to proceed against the
JLM Domestic Entities or any collateral which the Bank might have been granted
to secure the Liabilities or to secure the obligations of the undersigned
hereunder; any benefit of, and any right to participate in, any collateral which
may secure the Liabilities; notice of acceptance of this Guaranty.
WAIVER OF SUBROGATION. The undersigned shall not undertake any of the
following:
(a) exercise any rights against the JLM Domestic Entities, by way of
subrogation reimbursement, indemnity, contribution or otherwise
(all and singular of which the undersigned hereby waives);
-4-
(b) prove any claim in competition with the Bank in respect of any
payment hereunder in bankruptcy or insolvency proceedings of any
nature;
(c) claim any set-off or counterclaim against the JLM Domestic
Entities in respect of any liability of the undersigned to the
JLM Domestic Entities.
SUBORDINATION. The payment of any amounts due with respect to any
indebtedness of the JLM Domestic Entities now or hereafter held by the
undersigned is hereby subordinated to the prior payment in full of the
Liabilities. The undersigned will not demand, ▇▇▇ for, or otherwise attempt to
collect any such indebtedness. Any amounts which are collected, enforced and
received by the undersigned shall be held by the undersigned as trustee for the
Bank and shall be paid over to the Bank on account of the Liabilities without
affecting in any manner the liability of the undersigned under the other
provisions of this Guaranty.
BANK'S BOOKS AND RECORDS. The books and records of the Bank showing the
account among the Bank and the JLM Domestic Entities shall be admissible in any
action or proceeding and constitute prima facie evidence and proof of the items
contained therein.
GUARANTOR'S OBLIGATIONS PRIMARY. The obligations of the undersigned
hereunder are primary, with no recourse necessary by the Bank against the JLM
Domestic Entities or any collateral given to secure the Liabilities or against
any other person liable for or on the Liabilities prior to proceeding against
the undersigned hereunder.
CHANGE IN LIABILITIES. The undersigned hereby expressly assents to any
indulgence or waiver which the Bank may grant or give the JLM Domestic Entities
and/or any other person liable or obligated to the Bank for or on the
Liabilities. The undersigned authorizes the Bank to alter, amend, cancel, waive,
or modify any term or condition of the Liabilities and of the obligations of any
other person liable or obligated to the Bank for or on the Liabilities, without
notice to, or consent from, the undersigned. No compromise, settlement, or
release by the Bank of the Liabilities or of the obligations of any such other
person (whether or not jointly liable with the undersigned) and no release of
any collateral securing the Liabilities or securing the obligations of any such
other person shall affect the obligations of the undersigned hereunder. No
action by the Bank which has been assented to herein shall affect the
obligations of the undersigned to the Bank hereunder.
FINANCIAL INFORMATION. The undersigned will, from time to time at the
request of the Bank, provide the Bank with such information concerning the
financial condition of the undersigned as the Bank reasonably may request
(including, but not limited to, annual financial statements in a form reasonably
acceptable to the Bank and copies of the federal and state income tax returns of
the undersigned within one hundred twenty (120) days of the close of the
undersigned's fiscal year, provided that the undersigned shall have the right to
extend such one hundred twenty (120) day period to correspond with any
extensions filed with the Internal Revenue Service. The failure by the
undersigned to provide such information to the Bank within said time period
within ten (10) days of written notice of such failure by the Bank shall
constitute an event of default hereunder and all outstanding Liabilities shall
become immediately due and payable in full).
ADDITIONAL COLLATERAL. Upon demand by the Bank after any change in the
condition or affairs (financial or otherwise) of the JLM Domestic Entities or
the undersigned deemed by the Bank to be adverse and material, the undersigned
shall secure the payment and performance of its obligations hereunder by
delivering, assigning, or transferring to the Bank or granting the Bank a
security interest in additional collateral of a value and character reasonably
satisfactory to the Bank. The undersigned shall do all such things and execute
all such documents (including, without limitation, financing statements), as the
Bank may consider
-5-
necessary or desirable to give full effect to this Guaranty and to perfect and
preserve the rights and powers of the Bank hereunder.
COSTS OF ENFORCEMENT. The undersigned will pay on demand, without
limitation, all attorneys' fees, out-of-pocket expenses incurred by the Bank's
attorneys and all costs incurred by the Bank, including, without limitation,
costs and expenses associated with travel on behalf of the Bank, which costs and
expenses are directly or indirectly related to or in respect of the Bank's
administration, negotiation, documentation, and amendment of this guaranty and
in the Bank's efforts to collect and/or to enforce any of the obligations of the
undersigned hereunder and/or to enforce any of the Bank's rights, remedies, or
powers against or in respect of the undersigned (whether or not suit is
instituted by or against the Bank).
BINDING EFFECT. This instrument shall inure to the benefit of the Bank,
its successors and assigns, shall be binding upon the heirs, successors,
representatives, and assigns of the undersigned, and shall apply to all
Liabilities of the JLM Domestic Entities and any successor to the JLM Domestic
Entities, including any successor by operation of law. The undersigned hereby
acknowledges and agrees that this instrument is freely assignable by the Bank,
without the consent of the undersigned.
BANK'S RIGHTS AND REMEDIES. The rights, remedies, powers, privileges, and
discretions of the Bank hereunder (hereinafter, the "Bank's Rights and
Remedies") shall be cumulative and not exclusive of any rights or remedies which
it would otherwise have. No delay or omission by the Bank in exercising or
enforcing any of the Bank's Rights and Remedies shall operate as, or constitute
a waiver thereof. No waiver by the Bank of any of the Bank's Rights and Remedies
or of any default or remedies under any other agreement with the undersigned, or
of any default under any agreement with the JLM Domestic Entities, or any other
person liable or obligated for or on the Liabilities, shall operate as a waiver
of any other of the Bank's Rights and Remedies or of any default or remedy
hereunder or thereunder. No exercise of any of the Bank's Rights and Remedies
and no other agreement or transaction of whatever nature entered into between
the Bank and the undersigned, among the Bank and the JLM Domestic Entities,
and/or between the Bank and any such other person at any time shall preclude any
other exercise of the Bank's Rights and Remedies. No waiver by the Bank of any
of the Bank's Rights and Remedies on any one occasion shall be deemed a waiver
on any subsequent occasion, nor shall it be deemed a continuing waiver. All of
the Bank's Rights and Remedies, and all of the Bank's rights, remedies, powers,
privileges, and discretions under any other agreement or transaction with the
undersigned, the JLM Domestic Entities, or any such other person, shall be
cumulative and not alternative or exclusive, and may be exercised by the Bank at
such time or times and in such order of preference as the Bank in its sole
discretion may determine.
COPIES. This instrument and all other documents which have been or may
hereafter be furnished by the undersigned to the Bank which relate to the
Liabilities may be reproduced by the Bank by any photographic, photostatic,
microfilm or similar process. Any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made in the regular course of business).
CHOICE OF LAWS; CONSENT TO JURISDICTION. This instrument shall be
governed, construed, and interpreted in accordance with the laws of the
Commonwealth of Massachusetts. The undersigned submits to the jurisdiction of
the courts of the Commonwealth of Massachusetts for all matters in connection
herewith as well as for all purposes in connection with any other relationship
between the undersigned and the Bank.
-6-
SEVERABILITY. Any determination that any provision herein is invalid,
illegal, or unenforceable in any respect in any instance shall not affect the
validity, legality, or enforceability of such provision in any other instance
and shall not affect the validity, legality, or enforceability of any other
provision contained herein.
TERMINATION. The obligations of the undersigned hereunder shall remain in
full force and effect as to all Liabilities, without regard to any reduction of
the Liabilities other than by the undersigned pursuant to this Guaranty, until
the earlier of (a) ten (10) days following the actual receipt by the Bank at the
address set forth above of written notice signed by the undersigned of the
termination thereof, or (b) the delivery of written notice of termination dated
and signed by a duly authorized representative of the Bank, which notice of
termination includes specific reference to this provision. No termination hereof
shall affect any Liability in existence or outstanding ten (10) days following
the date of such actual receipt or delivery (including, without limitation,
those which are contingent or not then due and those which arise out of any
check, draft, item, or paper which was made, executed, or drawn prior to the
expiration of such ten (10) days, even if received by the Bank thereafter) nor
any obligation of the undersigned hereunder, including, without limitation, any
which by its terms includes any of the Liabilities of a contingent nature
(including, without limitation, the indemnification provided for herein). This
Guaranty shall continue to be effective or shall be automatically reinstated,
without any further action, notwithstanding any prior termination, if at any
time any payment made or value received with respect to a Liability is rescinded
or must otherwise be returned by the Bank upon the insolvency, bankruptcy or
reorganization of the JLM Domestic Entities, or otherwise, all as though such
payment had not been made or value received.
MISCELLANEOUS. The undersigned represents and certifies that the
undersigned read and reviewed all provisions of this Guaranty prior to its
execution and has been afforded an opportunity to consult with counsel
independently selected by the undersigned. The undersigned further represents
and certifies that the undersigned has freely and willingly executed this
Guaranty.
WAIVER OF JURY TRIAL. The undersigned makes the following waiver
knowingly, voluntarily, and intentionally, and understands that the Bank, in the
establishment and maintenance of the Bank's relationship with the JLM Domestic
Entities and the undersigned, is relying thereon. THE UNDERSIGNED, TO THE EXTENT
ENTITLED THERETO, HEREBY IRREVOCABLY WAIVES ANY PRESENT OR FUTURE RIGHT OF THE
UNDERSIGNED, THE JLM DOMESTIC ENTITIES OR ANY GUARANTOR OR ENDORSER OF THE JLM
DOMESTIC ENTITIES, OR ANY OTHER SIMILAR PERSON, TO A TRIAL BY JURY OF ANY CASE
OR CONTROVERSY IN WHICH THE BANK IS OR BECOMES A PARTY (WHETHER SUCH CASE OR
CONTROVERSY IS INITIATED BY OR AGAINST THE BANK OR IN WHICH THE BANK IS JOINED
AS A PARTY LITIGANT), WHICH CASE OR CONTROVERSY ARISES OUT OF, OR IS IN RESPECT
OF, ANY RELATIONSHIP AMONG THE UNDERSIGNED, THE JLM DOMESTIC ENTITIES, ANY SUCH
PERSON, AND THE BANK.
[remainder of this page intentionally left blank]
It is intended that this Unlimited Guaranty of Payment and Performance take
effect as a sealed instrument this day of April, 2001.
-----
Signed in my Presence:
---------------------- ----------------------
-7-
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------
Print Name Address:
------------------------
------------------------
-8-
DEED OF TRUST THIRD MODIFICATION AGREEMENT
THIS DEED OF TRUST THIRD MODIFICATION AGREEMENT (this "Modification
Agreement") is made and entered as of this 17 day of April 2001, by JLM
TERMINALS, INC., a North Carolina corporation (the "Grantor"), whose address is
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, and CITIZENS BANK OF
MASSACHUSETTS, successor in interest to State Street Bank and Trust Company, a
Massachusetts state chartered bank (the "Beneficiary"), whose address is ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
W I T N E S S E T H:
-------------------
WHEREAS, the Beneficiary is the holder of that certain Deed of Trust and
Security Agreement dated June 15, 1994, between the Grantor, ▇. ▇. ▇▇▇▇, ▇▇.,
TRUSTEE (the "Trustee"), whose address is ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and the Beneficiary, which Deed of Trust was recorded on July 5,
1994 in the New Hanover County land records in Book 1788, at Page 0867, as
amended by (i) a certain Deed of Trust Modification Agreement dated December 22,
1997 and recorded on January 26, 1998 in the New Hanover County land records in
Book 2300, at Page 0903 and (ii) a certain Deed of Trust Second Modification
Agreement dated as of November 1, 1999 and recorded on December 9, 1999 in the
New Hanover County land records in Book 2677, at Page 0861 (collectively, as
amended from time to time, the "Deed of Trust"); and
WHEREAS, the Grantor and the Beneficiary have entered into a certain First
Amendment to Amended and Restated Credit Agreement (the "First Amendment") dated
April 17, 2001, in regard to, among other things, the amendment of the loan
arrangement between the Grantor and the Beneficiary evidenced by, among other
agreement, instruments and documents, (i) a certain Amended and Restated Credit
Agreement dated as of November 3, 1999 (as amended from time to time, the
"Credit Agreement") and (ii) the Deed of Trust; and
WHEREAS, the Grantor and the Beneficiary desire to amend the Deed of Trust
to confirm that it shall continue to secure, in addition to any other remaining
obligations referred to thereunder, the payment, performance, and observance of
all liabilities, obligations, covenants, and agreements on the part of the
Grantor to be paid, performed, or observed under the Credit Agreement, as
amended and modified pursuant to the First Amendment.
NOW, THEREFORE, in consideration of the premises and other valuable
considerations mutually exchanged between the parties hereto, receipt of which
is hereby acknowledged, the parties hereto do, for themselves and their
respective successors, heirs, personal representatives and assigns, hereby
covenant and agree as follows:
1. The Deed of Trust shall secure and is hereby amended so as to secure,
in addition to the payment, performance, and observance of all other
liabilities, obligations, covenants, terms, and conditions referred to in the
Deed of Trust as being secured thereby, the prompt, punctual, and faithful
payment, performance, and observance of all liabilities, obligations,
covenants, and agreements to be paid, performed, or observed pursuant to the
Credit Agreement, as amended and modified by the First Amendment.
2. In furtherance of the purposes of this Deed of Trust Second
Modification Agreement, the Grantor and the Beneficiary agree that any and all
references in the Deed of Trust to the "Credit Agreement" shall be deemed to
mean and refer to the Credit Agreement, as amended, modified, or extended
pursuant to the First Amendment; and
3. The Deed of Trust and each and every one of the provisions therein
contained, as modified by this Agreement, shall continue in full force and
effect and shall be binding upon and inure to the benefit of the parties thereto
and their respective successors, heirs, personal representatives and assigns and
the Grantor hereby ratifies and confirms all of the Grantor's representations
and warranties contained in the Deed of Trust and the documents executed in
connection therewith.
4. Nothing herein contained shall be construed to impair the security of
the Beneficiary under the Deed of Trust or any other security instrument
delivered in connection therewith, nor to affect or impair any rights or powers
which it has under the Deed of Trust or any such security instrument.
IN WITNESS WHEREOF, the Grantor and the Beneficiary have hereunto set or
caused to be set his hand and seal on the day and year first herein above
written.
GRANTOR:
JLM TERMINALS, INC., a North Carolina
corporation
By: x ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
BENEFICIARY:
CITIZENS BANK OF MASSACHUSETTS
By: ------------------------------
Name: ----------------------------
Title: ----------------------------
STATE OF --------------------
, ss April , 2001
------------------ ----
The foregoing instrument was acknowledged before me this ____ day of April,
2001 by ___________________ as __________________ of JLM Terminals Inc., on
behalf of said corporation, who acknowledged before me that he executed the
foregoing instrument in the name of and for the corporation, and that he was
duly authorized by the corporation to do so.
-------------------------------
Notary Public
My Commission Expires:
COMMONWEALTH OF MASSACHUSETTS
Suffolk, ss April , 2001
----
Then personally appeared the above named ______________________, the
____________of Citizens Bank of Massachusetts, and acknowledged the foregoing to
be the free act and deed of Citizens Bank of Massachusetts, before me,
-------------------------------
Notary Public
My Commission Expires:
PERFECTION CERTIFICATE
OF
JLM INDUSTRIES, INC.
The undersigned ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ of JLM INDUSTRIES, INC., a Delaware
corporation (the "Company"), hereby certifies with reference to the Amended and
Restated Credit Agreement dated as of dated as of November 1, 1999, as amended
from time to time, among the Company and CITIZENS BANK OF MASSACHUSETTS (the
"Lender"), among others (terms defined therein being used herein as therein
defined), to the Lender as follows:
1. Names.
(a) The exact corporate name of the Company as it appears in its
certificate of incorporation, as amended to date, is as follows:
JLM INDUSTRIES, INC.
(b) Set forth below is each other corporate name the Company has had
since its organization, together with the date of the relevant change:
The Company was originally incorporated in Delaware on March 19, 1986 as JLM
Industries, Inc. On December 27, 1991 the Company filed a certificate of
amendment with the Delaware Secretary of State changing its name to JLM
Holdings, Inc. On April 14, 1992, JLM Holdings, Inc. filed a certificate of
amendment with the Delaware Secretary of State changing its name to JLM
Industries, Inc. On December 27, 1991 a new corporation was formed in Delaware
called JLM Industries, Inc. (sometimes referred to as `New JLM"). On April 14,
1992 JLM Industries, Inc. (New JLM) filed a certificate of amendment with the
Delaware Secretary of State changing its name to JLM Marketing, Inc.
(c) Set forth below is a description of each change by the Company of
its identity or corporate structure in any way within the past five years
together with the date of the relevant change:
On July 3, 1997 JLM Industries, Inc. filed a Restated Certificate of
Incorporation with the Delaware Secretary of State.
(d) The following is a list of all other names (including trade names
or similar appellations) used by the Company or any of its divisions or other
business units at any time during the past five years together with the dates
such names were used:
JLM Engineered Resins, a division of JLM Marketing, Inc. March 14, 2000 to
present.
(e) The following is a list of all subsidiaries of the Company
(whether wholly owned, or where the Company has a controlling or majority
interest)
JLM Marketing, Inc.; JLM International, Inc.; JLM Chemicals, Inc.; JLM
Terminals, Inc.; JLM Realty, Inc.; JLM (Ind.), Inc.; Illinois Marketing
Services, Inc.; Illinois International Services, Inc.; JLM Export Company;
Olefins Terminal Corporation (50% interest); JLM Europe B.V.; JLM Chemicals
Canada; JLM Industries Pty Ltd. (South Africa).
(f) The State of formation/incorporation of the Company is as
follows:
Delaware
(g) The Company's taxpayer identification number is: ▇▇-▇▇▇▇▇▇▇
2. Current Locations.
(a) The chief executive office of the Company is located at the
following address:
Mailing Address City State
--------------- ---- -----
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(b) The following are all the locations where the Company maintains
any books or records relating to any Accounts:
Name Mailing Address City State
---- --------------- ---- -----
JLM Chemicals, Inc. ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
and ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇
Parkway
JLM Terminals, Inc. ▇▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇
and ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇
Parkway
Name Mailing Address City State
---- --------------- ---- -----
JLM Marketing, Inc. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇
Parkway
JLM International, Inc. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇
Parkway
▇▇▇▇▇▇▇▇ Chemical ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇
Corporation Parkway
JLM Realty, Inc. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇
Parkway
MAC Aviation ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇
Enterprises, Inc. Parkway
JLM (Ind), Inc. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇
Parkway
Illinois Marketing ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇
Services, Inc. Parkway
Illinois International ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇
Services, Inc. Parkway
JLM Export ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇
Parkway
(c) The following are all the locations where Equipment and/or
Inventory of the Company is located:
Name Mailing Address City State
---- --------------- ---- -----
JLM Chemicals, Inc. ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
JLM Terminals, Inc. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Liquids ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇ ▇▇
Terminals, LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇ Liquids ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇
Terminals, LLC ▇.▇. ▇▇▇ ▇▇▇
PetroUnited Terminals ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇
Southern Warehouse ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
Name Mailing Address City State
---- --------------- ---- -----
Chicagoland-Quad Cities ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇
Express, Inc. Bld. # 5
▇. ▇. ▇▇▇▇ & Company ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
J & S Warehouse ▇▇ ▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ NJ
LOGISCO, Inc. ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇
Specialty Industrial ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇
Products (SIP)
Southern Warehouse ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇
Southern Warehouse ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
Landsdale Warehouse ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
Co., Inc.
(d) Other persons or entities who have possession or control
(warehousemen, bailee) other than Company:
Name Mailing Address City State
---- --------------- ---- -----
▇▇▇▇▇▇ ▇▇▇▇▇▇ Liquids ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇ ▇▇
Terminals, LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇ Liquids ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇
Terminals, LLC ▇.▇. ▇▇▇ ▇▇▇
PetroUnited Terminals ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇
Southern Warehouse ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ TX
Chicagoland-Quad Cities ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇
Express, Inc. Bld. # 5
▇. ▇. ▇▇▇▇ & Company ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
J & S Warehouse ▇▇ ▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ NJ
LOGISCO, Inc. ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇
Specialty Industrial ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇
Products (SIP)
Southern Warehouse ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇
Southern Warehouse ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
Name Mailing Address City State
---- --------------- ---- -----
Landsdale Warehouse ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
Co., Inc.
3. Prior Locations. Set forth below is the information required by
subparagraphs (a), (b) and (c) of paragraph 2 with respect to each location or
place of business maintained by the Company at any time during the past five
years:
Name Mailing Address City State
---- --------------- ---- -----
JLM Marketing, Inc. ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
JLM International, Inc. ▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
Parkway East Suite 855
JLM Industries de Calle 98 No. 22-64 Sanatfe de Bogota Columbia
Of. 717
JLM ▇▇▇▇▇▇▇ Chemicals ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Bangalore 560 095
Lake River Warehouse ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇. Forest View ILL
S.W. #1
Solvents & Chemicals ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇
Warehouse
American Distillation, Inc. ▇▇▇▇ ▇. ▇. ▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇. B. I. S. ▇▇▇ ▇▇▇▇ ▇▇▇. ▇▇▇▇▇▇▇▇▇ ▇▇
Consolidated LOG Mgt ▇▇▇-▇ ▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇▇
Frioner Cold Storage ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇
Glenery Warehouse ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
I. B. W. Warehouse 357 ▇▇▇▇▇▇ Ave. Newark NJ
Nansemond Cold Storage, Inc. Suffolk VA
Liberty Warehouse ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇ Warehouse ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇▇▇ Warehouse ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇
Name Mailing Address City State
---- --------------- ---- -----
Peerless Storage Co. ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
Warehouse
Regional Storage Warehouse ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇
Shipside Marine Warehouse ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇▇▇▇▇▇ MD
S & H Warehouse ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇ ▇▇
PakTank ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇
StanTrans, Inc. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇ ▇▇
Specialty Warehouse ▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
Triangle Whse & Dist. ▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇ Dist. Services ▇▇▇▇ ▇▇▇▇▇ ▇▇▇. ▇▇▇▇▇▇▇ ▇▇
ASAS, Inc. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇. ▇▇. ▇▇▇▇ ▇▇
American Select Dist. Whs ▇▇▇▇-▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇ ▇▇
American Storage Whs ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇ ▇▇
4. No Unusual Transactions. Except as set forth in Schedule 4, all
Accounts have been originated by the Company and all Equipment has been acquired
by the Company in the ordinary course of its business.
The undersigned hereby acknowledges and agrees that the Lender is relying
on the representations and warranties made herein in connection with the
extension of credit and/or other financial accommodations entered into between
the undersigned and the Lender.
IN WITNESS WHEREOF, I have hereunto set my hand this 17th day of April,
2001.
"COMPANY"
JLM INDUSTRIES, INC.
x ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By:--------------------------------------------
(duly authorized)
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement dated as of April ___, 2001 is entered
into by and between JLM Industries, Inc., a Delaware corporation (the "Company")
and Citizens Bank of Massachusetts ("Citizens").
Section 1. Certain Definitions. As used in this Agreement, the following
terms shall have the following respective meanings:
1.1 "Commission" means the Securities and Exchange Commission, or any
other federal agency at the time administering the Securities Act and the
Exchange Act.
1.2 "Common Stock" means (a) the Company's common stock, $___ par value,
as authorized on the date of this Agreement, (b) any other capital stock of any
class or classes (however designated) of the Company, authorized on or after the
date hereof, the holders of which shall have the right, without limitation as to
amount, either to all or to a share of the balance of current dividends and
liquidating dividends after the payment of dividends and distributions on any
shares entitled to preference, and the holders of which shall ordinarily, in the
absence of contingencies or in the absence of any provision to the contrary in
the Company's [Certificate of Incorporation], be entitled to vote for the
election of a majority of directors of the Company (even though the right so to
vote has been suspended by the happening of such a contingency or provision),
and (c) any other securities into which or for which any of the securities
described in (a) or (b) may be converted or exchanged pursuant to a plan of
recapitalization, reorganization, merger, sale of assets or otherwise.
1.3 "Exchange Act" means the Securities Exchange Act of 1934, or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
1.4 "Persons" means an individual, corporation, partnership, joint
venture, trust, or unincorporated organization, or a government or any agency or
political subdivision thereof.
1.5 "Registrable Shares" means (i) the shares of Warrant Stock and Other
Securities (each as defined in the Warrant) issued and issuable upon exercise or
conversion of the Warrant; provided, however, that shares of Warrant Stock or
Other Securities which are Registrable Shares hall cease to be Registrable
Shares upon any public sale pursuant to a registration statement under the
Securities Act, Section 4(l) of the Securities Act or Rule 144 promulgated under
the Securities Act.
1.6 "Warrant" means that certain Stock Purchase Warrant of even date
herewith issued by the Company to Citizens.
1.7 "Securities Act" means the Securities Act of 1933, or any similar
federal statute, and the rules and regulations of the Commission thereunder, all
as the same shall be in effect at the time.
Section 2. "Piggy-Back" Registrations. If at any time the Company shall
determine to register under the Securities Act (including pursuant to a demand
of any stockholder of the Company exercising registration rights) any of its
Securities, other than on Form S-8 or Form S-4 or their then equivalents, it
shall send to each holder of Registrable Shares, including each holder who has
the right to acquire Registrable Shares, written notice of such determination
and, if within 20 days after receipt of such notice, such holder shall so
request in writing, the Company shall use its best efforts to include in such
registration statement all or any part of the Registrable Shares such holder
requests to be registered therein, except that if, in connection with any
offering involving an underwriting of Common Stock to be issued by the Company,
the managing underwriter shall impose a limitation on the number of shares of
such Common Stock which may be included in any such registration statement
because, in its judgment, such limitation is necessary to effect an orderly
public distribution, and such limitation is imposed pro rata with respect to all
securities whose holders have a contractual, incidental ("piggy back") right to
include such securities in the registration statement and as to which inclusion
has been requested pursuant to such right and there is first excluded from such
registration statement all shares of Common Stock sought to be included therein
by (i) any director, officer or employee of the Company or any subsidiary, (ii)
any holder thereof not having any such contractual, incidental registration
rights, and (iii) any holder thereof having contractual, incidental registration
rights subordinate and junior to the rights of the holders of Registrable
Shares, then the Company shall be obligated to include in such registration
statement only such limited portion (which may be none) of the Registrable
Shares with respect to which such holder has requested inclusion hereunder. No
incidental right under this Section 2 shall be construed to limit any
registration required under Section 3.
Section 3. Demand Registrations. If on not more than two (2) occasions
(including an occasion of registration on Form S-1 or S-18 or their then
equivalents) one or more holders of at least 20% of the Registrable Shares shall
notify the Company in writing that it or they intend to offer or cause to be
offered for public sale at least 20% of the Registrable Shares, the Company will
so notify all holders of Registrable Shares, including all holders who have a
right to acquire Registrable Shares. Upon written request of any holder given
within 20 days after the receipt by such holder from the Company of such
notification, the Company will use its best efforts to cause such of the
Registrable Shares as may be requested by any holder thereof (including the
holder or holders giving the initial notice of intent to offer) to be registered
under the Securities Act as expeditiously as possible. The Company shall not be
required to effect more than two (2) registrations pursuant to this Section 3,
or more than one such registration during any 12 month period. If the Company
determines to include shares to be sold by it in any registration requests
pursuant to this Section 3, such registration shall be deemed to have been a
registration under Section 2 of this Agreement.
Section 4. Short-Form Registration on Form S-3. In addition to the rights
provided the holder of Registrable Shares in Sections 2 and 3 above, if the
registration of Registrable Shares under the Securities Act can be effected on
Form S-3 (or any similar or successor form promulgated by the Commission), the
Company will so notify each holder of Registrable Shares, including each holder
who has a right to acquire Registrable Shares, and then will, as expeditiously
as possible, use its best efforts to effect qualification and registration under
the Securities Act on said Form S-3 of all or such portion of the Registrable
Shares as the holder or holders shall specify; provided, however, that the
market value of the Registrable Shares to be sold in any such registration shall
be estimated to be at least $500,000 at the time of filing such registration
statement; and provided further, that the Company shall not be required to
effect more than two (2) such registrations pursuant to this Section 4 in any
twelve-month period.
Section 5. Effectiveness of Registration Statements. The Company will use
its best efforts to maintain the effectiveness of any registration statement
pursuant to which any of the Registrable Shares are being offered until the
earlier to occur of (i) the completion by the underwriters of the distribution
pursuant to such registration statement or (ii) 90 days after the effectiveness
of any registration statement, and from time to time will amend or supplement
such registration statement and the prospectus contained therein as and to the
extent necessary to comply with the Securities Act and any applicable state
Securities statute or regulation. The Company will also provide each holder of
Registrable Shares with as many copies of the prospectus contained in any such
registration statement as it may reasonably request.
Section 6. Indemnification of Holders of Registrable Shares. In the event
that the Company registers any of the Registrable Shares under the Securities
Act, the Company will, to the extent permitted by law, indemnify and hold
harmless each holder and each underwriter of the Registrable Shares (including
their officers, directors, affiliates and partners) so registered (including any
broker or dealer through whom such shares may be sold) and each Person, if any,
who controls such holder or any such underwriter within the meaning of Section
15 of the Securities Act from and against any and all losses, claims, damages,
expenses or liabilities, joint or several, to which they or any of them become
subject under the Securities Act or under any other statute or at common law or
otherwise, and, except as hereinafter provided, will reimburse each such holder,
each such underwriter and each such controlling Person, if any, for any legal or
other expenses reasonably incurred by them or any of them in connection with
investigating or defending any actions whether or not resulting in any
liability, insofar as such losses, claims, damages, expenses, liabilities or
actions arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the registration statement or any
filing with any state Securities commission or agency, in any preliminary or
amended preliminary prospectus or in the final prospectus (or the registration
statement or prospectus as from time to time amended or supplemented by the
Company) or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary in
order to make the statements therein not misleading, or any violation by the
Company of any rule or regulation promulgated under the Securities Act or any
state Securities laws or regulations applicable to the Company and relating to
action or inaction required of the Company in connection with such registration,
unless (i) such untrue statement or alleged untrue statement or omission or
alleged omission was made in such registration statement, preliminary or amended
-3-
preliminary prospectus or final prospectus in reliance upon and in conformity
with information furnished in writing to the Company in connection therewith by
such holder of Registrable Shares, any such underwriter or any such controlling
Person expressly for use therein.
Promptly after receipt by any holder of Registrable Shares, any underwriter
or any controlling Person of notice of the commencement of any action in respect
of which indemnity may be sought against the Company, such holder of Registrable
Shares, or such underwriter or such controlling Person, as the case may be, will
notify the Company in writing of the commencement thereof, and, subject to the
provisions hereinafter stated, the Company shall assume the defense of such
action (including the employment of counsel, who shall be counsel reasonably
satisfactory to such holder of Registrable Shares, such underwriter or such
controlling Person, as the case may be), and the payment of expenses insofar as
such action shall relate to any alleged liability in respect of which indemnity
may be sought against the Company.
Such holder of Registrable Shares, any such underwriter or any such
controlling Person shall have the right to employ separate counsel in any such
action and to participate in the defense thereof but the fees and expenses of
such counsel shall not be at the expense of the Company unless the employment of
such counsel has been specifically authorized by the Company. The Company shall
not be liable to indemnify any Person for any settlement of any such action
effected without the Company's consent (which consent shall not be unreasonably
withheld or delayed). The Company shall not, except with the approval of each
party being indemnified under this Section 6, consent to entry of any judgment
or enter into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to the parties being so
indemnified of a release from all liability in respect to such claim or
litigation.
In order to provide for just and equitable contribution to joint liability
under the Securities Act in any case in which any holder of Registrable Shares
exercising rights under this Agreement, or any controlling person of any such
holder, makes a claim for indemnification pursuant to this Section 6 but it is
judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of the
last right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that this Section 6 provides for indemnification in
such case, then, the Company and such holder will contribute to the aggregate
losses, claims, damages or liabilities to which they may be subject (after
contribution from others) in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and of the holder of Registrable
Shares on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative fault of the Company on the one
hand and of the holder of Registrable Shares on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or by the holder
of Registrable Shares on the other, and each party's relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission; provided, however, that, in any such case, (A) no such holder will be
required to contribute any amount in excess of the net proceeds received by it
pursuant to such registration statement; and (B) no person or entity guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) will be entitled to contribution from any person or entity who
was not guilty of such fraudulent misrepresentation.
Section 7. Indemnification of Company. In the event that the Company
registers any of the Registrable Shares under the Securities Act, each holder of
the Registrable Shares so
-4-
registered, to the extent permitted by law, will indemnify and hold harmless the
Company, each of its directors, each of its officers who have signed or
otherwise participated in the preparation of the registration statement, each
underwriter of the Registrable Shares so registered (including any broker or
dealer through whom such of the shares may be sold) and each Person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act from
and against any and all losses, claims, damages, expenses or liabilities, joint
or several, to which they or any of them may become subject under the Securities
Act or under any other statute or at common law or otherwise, and, except as
hereinafter provided, will reimburse the Company and each such director,
officer, underwriter or controlling Person for any legal or other expenses
reasonably incurred by them or any of them in connection with investigating or
defending any actions whether or not resulting in any liability, insofar as such
loses, claims, damages, expenses, liabilities or actions arise out of or are
based upon any untrue statement or alleged untrue statement of a material fact
contained in the registration statement or any filing with any state Securities
commission or agency, in any preliminary or amended preliminary prospectus or in
the final prospectus (or in the registration statement or prospectus as from
time to time amended or supplemented) or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading, but only insofar as any such statement or omission was made in
reliance upon and in conformity with information furnished in writing to the
Company in connection therewith by such holder of Registrable Shares expressly
for use therein; provided, however, that such holder's obligations hereunder
shall be limited to an amount equal to the net proceeds received by such holder
of the Registrable Shares sold in such registration.
Promptly after receipt of notice of the commencement of any action in
respect of which indemnity may be sought against such holder of Registrable
Shares, the Company will notify such holder of Registrable Shares in writing of
the commencement thereof, and such holder of Registrable Shares shall, subject
to the provisions hereinafter stated, assume the defense of such action
(including the employment of counsel, who shall be counsel reasonably
satisfactory to the Company) and the payment of expenses insofar as such action
shall relate to the alleged liability in respect of which indemnity may be
sought against such holder of Registrable Shares.
The Company and each such director, officer, underwriter or controlling
Person shall have the right to employ separate counsel in any such action and to
participate in the defense thereof' but the fees and expenses of such counsel
shall not be at the expense of such holder of Registrable Shares unless
employment of such counsel has been specifically authorized by such holder of
Registrable Shares. Such holder bf Registrable Shares shall not be liable to
indemnify any Person for any settlement of any such action effected without such
holder's consent (which consent shall not be unreasonably withheld or delayed).
In order to provide for just and equitable contribution to joint liability
under the Securities Act in any case in which the Company exercising its rights
under this Agreement, makes a claim for indemnification pursuant to this Section
7, but it is judicially determined (by the entry of a final judgment or decree
by a court of competent jurisdiction and the expiration of time to appeal or the
denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding that this Section 7 provides for
indemnification, in such case, then, the Company and such holder will contribute
to the aggregate losses, claims, damages or liabilities to which they may be
subject (after contribution from others) in such proportion as is appropriate to
reflect the relative fault of the Company on the one hand and of the holder of
Registrable Shares on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or omissions which resulted in
-5-
such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative fault of the Company on the one hand and
of the holder of Registrable Shares on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or by the holder
of Registrable Shares on the other, and each party's relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission; provided, however, that, in any such case, (A) no such holder will be
required to contribute any amount in excess of the net proceeds received by it
pursuant to such registration statement; and (B) no person or entity guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) will be entitled to contribution from any person or entity who
was not guilty of such fraudulent misrepresentation.
Section 8. Damages. The Company recognizes and agrees that the holder of
Registrable Shares will not have an adequate remedy if the Company fails to
comply with this Agreement and that damages may not be readily ascertainable,
and the Company expressly agrees that, in the event of such failure, it shall
not oppose an application by the holder of Registrable Shares or any other
Person entitled to the benefits of this Agreement requiring specific performance
of any and all provisions hereof or enjoining the Company from continuing to
commit any such breach of this Agreement.
Section 9. Further Obligations of the Company. Whenever under the
preceding Sections of this Agreement, the Company is required hereunder to
register Registrable Shares, it agrees that it shall also do the following at
its sole expense:
(a) Furnish to each selling holder such copies of each preliminary
and final prospectus and such other documents as said holder may reasonably
request to facilitate the public offering of its Registrable Shares;
(b) Use its best efforts to register or qualify the Registrable
Shares covered by said registration statement under the applicable
Securities or "blue sky" laws of such jurisdictions as any selling holder
may reasonably request; provided; however, that the Company shall not be
obligated to qualify to do business in any jurisdiction where it is not
then so qualified or to take any action which would subject it to the
service of process in suits other than those arising out of the offer or
sale of the Securities covered by the registration statement in any
jurisdiction where it is not then so subject;
(c) Use its best efforts to list, or qualify for trading, such
Registrable Shares on any and all national securities exchanges and
markets, inter-dealer quotation systems, over-the-counter trading systems
and bulletin board trading systems on which any of the Company's securities
of the same class as the Registrable Shares shall then be listed or
qualified for trading;
(d) Furnish to each selling holder a "signed counterpart" of:
(i) an opinion of counsel for the Company, dated the effective
date of the registration statement, and
-6-
(ii) "comfort" letters signed by the Company's independent public
accountants who have examined and reported on the Company's financial
statements included in the registration statement, to the extent
permitted by the standards of the American Institute of Certified
Public Accountants,
covering substantially the same matters with respect to the registration
statement (and the prospectus included therein) and (in the case of the
accountants' "comfort" letters) with respect to events subsequent to the date of
the financial statements, as are customarily covered in opinions of issuer's
counsel and in accountants' "comfort" letters delivered to the underwriters in
underwritten public offerings of Securities, to the extent that the Company is
required to deliver or cause the delivery of such opinion or "comfort" letters
to the underwriters in an underwritten public offering of Securities;
(e) Permit each selling holder or its counsel or other
representatives to inspect and copy such corporate documents and records as
may reasonably be requested by them;
(f) Furnish to each selling holder a copy of all documents filed and
all correspondence from or to the Commission in connection with any such
offering of Securities;
(g) Use its best efforts to insure the obtaining of all necessary
approvals from the National Association of Securities Dealers, Inc.; and
(h) Otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission.
Section 10. Expenses. In the case of any registration under Section 2, 3
or 4 of this Agreement, the Company shall bear all costs and expenses of each
such registration, including, but not limited to, printing, legal and accounting
expenses, Securities and Exchange Commission and National Association of
Securities Dealers, Inc. filing fees and expenses, and "blue sky" fees and
expenses and the reasonable fees and disbursements of not more than one counsel
for the selling holders of Registrable Shares in connection with the
registration of their Registrable Shares; provided, however, that the Company
shall have no obligation to pay or otherwise bear any portion of the
underwriters, commissions or discounts attributable to the Registrable Shares.
The Company shall pay all expenses in connection with any registration
initiated under this Agreement which is withdrawn, delayed or abandoned at the
request of the Company, unless such registration is withdrawn, delayed or
abandoned solely because of any actions of the holders of Registrable Shares.
Section 11. Delay of Registration. For a period not to exceed 90 days, the
Company shall not be obligated to prepare and file, or prevented from delaying
or abandoning, a registration statement pursuant to this Agreement at any time
when the Company, in its good faith judgment with advice of counsel, reasonably
believes
(a) that the filing thereof at the time requested, or the offering of
Registrable Shares pursuant thereto, would materially and adversely affect
(a) a pending or scheduled
-7-
public offering of the Company's Securities, (b) an acquisition, merger,
recapitalization, consolidation, reorganization or similar transaction by
or of the Company, (c) preexisting and continuing negotiations, discussions
or pending proposals with respect to any of the foregoing transactions, or
(d) the financial condition of the Company in view of the disclosure of any
pending or threatened litigation, claim, assessment or governmental
investigation which may be required thereby; and
(b) that the failure to disclose any material information with
respect to the foregoing would cause a violation of the Securities Act or
the Exchange Act.
Section 12. Conditions to Registration Obligations. The Company shall not
be obligated to effect the registration of Registrable Shares pursuant to
Sections 2, 3 and 4 unless all holders of Registrable Shares being registered
consent to reasonable conditions imposed by the Company as the Company shall
determine with the advice of counsel to be required by law including, without
limitation:
(a) conditions prohibiting the sale of shares by such holders until
the registration shall have been effective for a specified period of time;
(b) conditions requiring such holder to Comply with all prospectus
delivery requirements of the Securities Act and with all anti-
stabilization, anti-manipulation and similar provisions of Section 10 of
the Exchange Act and any rules issued thereunder by the Commission, and to
furnish to the Company information about sales made in such public
offering;
(c) conditions prohibiting such holders upon receipt of telegraphic
or written notice from the Company (until further notice) from effecting
sales of shares, such notice being given to permit the Company to correct
or update a registration statement or prospectus;
(d) conditions requiring that at the end of the period during which
the Company is obligated to keep the registration statement effective under
Section 5, the holders of shares include in the registration statement
shall discontinue sales of shares pursuant to such registration statement
upon receipt of notice form the Company of its intention to remove from
registration the shares covered by such registration statement that remain
unsold, and requiring such holders to notify the Company of the number of
shares registered that remain unsold immediately upon receipt of notice
from the Company; and
(e) conditions requiring the holders of Registrable Shares to enter
into an underwriting agreement in form and substance reasonably
satisfactory to the Company.
Section 13. Approval of Underwriter. Any managing underwriter engaged by
the Company in any registration made pursuant to Sections 3 or 4 shall require
the approval in writing of a majority of the holders of Registrable Shares
requesting such registration and the consent of the Company, which consent shall
not be unreasonably withheld.
-8-
Section 14. Transferability of Registration Rights. For all purposes of
this Agreement, the holder of Registrable Shares shall include not only Citizens
but (i) any assignee or transferee of the Registrable Shares who acquires at
least ten percent (10%) of the Registrable Shares and who is not a direct
competitor of the Company, or (ii) any general or limited partner or any officer
or director of Citizens or their affiliates, including, but not limited to,
their immediate family, irrevocable trusts for estate planning purposes and
personal representatives; provided, however, that such assignee or transferee
agrees in writing to e bound by all of the provision of this Agreement,
including, without limitation Section 16 hereof.
Section 15. No Waiver; Cumulative Remedies. No failure or delay on the
part of any party to this Agreement in exercising any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy hereunder.
The remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
Section 16. Amendments, Waivers and Consents. Except as hereinafter
provided, changes in or additions to this Agreement may be made, termination of
this Agreement, and compliance with any covenant or provision set forth herein
may be omitted or waived, if the Company (i) shall obtain consent thereto in
writing from the holder or holders of more than fifty percent 50% in interest of
the Registrable Shares, and (ii) shall deliver copies of such consent in writing
to any holders who did not execute such consent; provided that no consents shall
be effective to reduce the percentage in interest of the Registrable Shares the
consent of the holders of which is required under this Section. Any waiver or
consent may be given subject to satisfaction of conditions stated therein and
any waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
Section 17. Addresses for Notices. All notices, requests, demands and
other communications provided for hereunder shall be in writing (including
telegraphic communication) and mailed, telegraphed or delivered to each
applicable party at the address set forth in the Warrantor at such other address
as to which such party may inform the other parties in writing in compliance
with the terms of this Section.
All such notices, requests, demands and other communications shall, when
mailed (which mailing must be accomplished by first class mail, postage prepaid;
electronic facsimile transmission; express overnight courier service; or
registered mail, return receipt requested) or telegraphed, and shall be
considered to be delivered three (3) days after dispatch.
Section 18. Costs, Expenses and Taxes. The Company agrees to pay the
reasonable fees and out-of-pocket expenses of legal counsel, independent public
accountants and other outside experts reasonably retained by the holders in
connection with any amendment or waiver to this Agreement, (whether initiated by
the Company or the holders) or the successful enforcement of this Agreement by
the holders.
-9-
Section 19. Binding Effect; Assignment. Except as provided in Section 16,
this Agreement shall be binding upon and inure to the benefit of the Company and
Citizens and their respective heirs, successors and assigns, except that the
Company shall not have the right to delegate its obligations hereunder or to
assign its rights hereunder or any interest herein without the prior written
consent of the holders of at least two-thirds in interest of the Registrable
Shares.
Section 20. Prior Agreements. This Agreement and the Warrant constitute
the entire agreement between the parties and supersedes any prior understandings
or agreements concerning the subject matter hereof and thereof.
Section 21. Severability. The provisions of this Agreement and the Warrant
are severable and, in the event that any court of competent jurisdiction shall
determine that any one or more of the provisions or part of a provision
contained in this Agreement or the Warrant shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision or part of a provision of
this Agreement or the Warrant; but this Agreement and the Warrant shall be
reformed and construed as if such invalid or illegal or unenforceable provision,
or part of a provision, had never been contained herein, and such provisions or
part reformed so that it would be valid, legal and enforceable to the maximum
extent possible.
Section 22. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the Commonwealth of
Massachusetts, and without giving effect to choice of laws provisions.
Section 23. Headings. Article, section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
Section 24. Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
Section 25. Further Assurances. From and after the date of this Agreement,
upon the request of any holder or the Company, the Company and the holders shall
execute and deliver such instruments, documents and other writings as may be
reasonably necessary or desirable to confirm and carry out and to effectuate
fully the intent and purposes of this Agreement.
[REST OF PAGE INTENTIONALLY
LEFT BLANK - SIGNATURE PAGE
IMMEDIATELY FOLLOWING]
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IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be executed by their duly authorized representatives as an
agreement under seal as of the date first above written.
JLM INDUSTRIES, INC. CITIZENS BANK OF MASSACHUSETTS
By: __________________________ By: __________________________
Name: Name:
Title: Title:
-▇▇-
▇▇▇ ▇▇▇▇▇▇▇▇▇▇, INC.
Right to Purchase Shares of Capital Stock
of JLM Industries, Inc.
Stock Purchase Warrant No. W-1
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER SUCH ACT AND ANY APPLICABLE STATE SECURITIES LAWS. FURTHERMORE,
THIS WARRANT AND ANY SHARES ACQUIRED UPON THE EXERCISE OF THIS WARRANT MAY BE
SOLD OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE CONDITIONS SPECIFIED
IN THIS WARRANT.
Stock Purchase Warrant
Void after 5:00 p.m., Eastern Time on April __, 2011
JLM Industries, Inc., a [Delaware] corporation (together with any
corporation which shall succeed to or assume the obligations of JLM Industries,
Inc. hereunder, the "Company"), hereby certifies that, for value received,
Citizens Bank of Massachusetts, or its assigns ("Citizens"), is entitled,
subject to the terms set forth below, to purchase from the Company at any time
and from time to time until the expiration hereof pursuant to Section 2.3 below,
up to Five Hundred Thousand (500,000) fully paid and non-assessable shares of
the Company's common stock, $___ par value per share the "Warrant Stock"), at a
purchase price per share of $_____ (the "Exercise Price"). The number of shares
of Warrant Stock and the Exercise Price are subject to adjustment from time to
time as provided herein. This Warrant is issued in connection with that certain
First Amendment to Amended and Restated Credit Agreement (the "Loan Agreement")
of even date herewith between the Company and Citizens, a copy of which is on
file at the principal office of the Company.
1. DEFINITIONS. In addition to the terms which are defined in the body of this
Warrant, certain terms used in this Warrant are defined in Section 15 hereof.
2. EXERCISE OF WARRANT.
2.1. Exercise. This Warrant may be exercised prior to its expiration
pursuant to Section 2.3 hereof by the holder hereof at any time and from time to
time by surrender of this Warrant, with the form of Notice of Exercise or
Conversion at the end hereof duly executed by
such holder, to the Company at its principal office, accompanied by payment, by
certified or official bank check payable to the order of the Company or by wire
transfer to its account, in the amount obtained by multiplying the number of
shares of Warrant Stock for which this Warrant is then being exercised by the
Exercise Price then in effect. In the event the Warrant is not exercised in
full, the Company, at its expense, will forthwith issue and deliver to or upon
the order of the holder hereof a new Warrant or Warrants of like tenor, in the
name of the holder hereof or as such holder (upon payment by such holder of any
applicable transfer taxes) may request, calling in the aggregate on the face or
faces thereof for the number of shares of Warrant Stock equal to the balance of
the number shares then purchasable under this Warrant. Upon any exercise of this
Warrant, in whole or in part, the holder hereof may, in lieu of paying the
aggregate Exercise Price which otherwise would be payable with respect to the
shares of Warrant Stock for which this Warrant is then being exercised
(collectively, the "Exercise Shares"), (a) in the event the holder of this
Warrant is also the holder of a promissory note of the Company, convert a like
amount of outstanding principal and/or interest amount of such note into such
number of shares of Warrant Stock, or (b) surrender this Warrant to the Company
together with a notice of cashless exercise, in which event the Company shall
issue to the Holder the number of shares of Warrant Stock determined as follows:
X = Y (A-B)/A
where:
X = the number of shares of Warrant Stock to be issued to
the Holder.
Y = the number of shares of Warrant Stock with respect to
which this Warrant is being exercised.
A = the Fair Market Value (as defined below) of one share of
Warrant Stock.
B = the Exercise Price.
For purposes of this Section 2.1, the "Fair Market Value" of one share of
Warrant Stock (the "Fair Market Value") at any date shall be determined as
follows:
(a) If shares of the same class or series as the Warrant Stock are at
such time listed or admitted for trading on any national securities
exchange or quoted on the National Quotation Market System of the National
Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ"), then the Fair Market Value shall be equal to the closing market
price of such shares on the trading day immediately preceding the date of
holder's Notice of Exercise or Conversion. As used in this subparagraph
(a), "market price" for such trading day shall be the average of the
closing prices on such day of such shares on all domestic primary national
securities exchanges on which such shares are then listed, or, if there
shall have been no sales on any such exchange on such day, the average of
the highest bid and lowest asked prices on all such exchanges at the
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end of such day, or if such shares shall not be so listed, the average of
the representative bid and asked prices at the end of such trading day as
reported by NASDAQ.
(b) If shares of the same class or series as the Warrant Stock are
not at such time listed or admitted for trading on any national securities
exchange or quoted on NASDAQ, then the Fair Market Value of one share of
Warrant Stock shall be determined by the Board of Directors of the Company
in its reasonable good faith judgment; provided, that if Citizens advises
the Company in writing that Citizens disagrees with such determination,
then Citizens and the Company shall promptly select a reputable investment
banking or appraisal firm to undertake a valuation of such shares. If the
valuation of such investment banking or appraisal firm is greater than that
determined by the Board of Directors by five percent (5%) or more, then all
fees and expenses of such investment banking or appraisal firm shall be
paid by the Company. In all other circumstances, such fees and expenses
shall be paid by Citizens. The determination of such investment banking or
appraisal firm shall be conclusive for purposes hereof.
2.2. Warrant Agent In the event that a bank or trust company shall have
been appointed as trustee for the holder of the Warrant pursuant to Section 6.2
hereof, such bank or trust company shall have all the powers and duties of a
warrant agent appointed pursuant to Section 16 hereof and shall accept, in its
own name for the account of the Company or such successor entity as may be
entitled thereto, all amounts otherwise payable to the Company or such
successor, as the case may be, on exercise of this Warrant pursuant to this
Section 2.
2.3. Termination. This Warrant shall terminate upon the earliest to occur
of (a) exercise in full, or (b) April ___, 2011.
3. REGISTRATION RIGHTS.
3.1. Registration Rights. The Warrant Stock shall have certain
registration rights as set forth in that certain Registration Rights Agreement
between the Company and Citizens of even date herewith. The Company represents
and warrants to Citizens that the Company's execution, delivery and performance
of the Registration Rights Agreement (a) has been duly authorized by all
necessary corporate action of the Company's Board of Directors and shareholders,
(b) will not violate the Certificate or By-laws, each as amended, (c) will not
violate or cause a breach or default (or an event which with the passage of time
or the giving of notice or both, would constitute a breach or default) under any
agreement, instrument, mortgage, deed of trust or other arrangement to which the
Company is a party or by which it or any of its assets is subject or bound, and
(d) does not require the approval, consent or waiver of or by any shareholder,
registration rights holder or other third party which approval, consent or
waiver has not been obtained as of the date of issuance of this Warrant.
4. DELIVERY OF STOCK CERTIFICATES ON EXERCISE.
4.1. Delivery. As soon as practicable after the exercise of this Warrant
in full or in part, and in any event within ten (10) days thereafter, the
Company, at its expense (including the
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payment by it of any applicable issue taxes), will cause to be issued in the
name of and delivered to the holder hereof, or as such holder (upon payment by
such holder of any applicable transfer taxes) may direct, a certificate or
certificates for the number of fully paid and non-assessable shares of Warrant
Stock (or Other Securities) to which such holder shall be entitled on such
exercise, together with any other stock or other securities and property
(including cash, where applicable) to which such holder is entitled upon such
exercise.
4.2. Fractional Shares. In the event that the exercise of this Warrant, in
full or in part, results in the issuance of any fractional share of Warrant
Stock, then, in such event, the holder of this Warrant shall be entitled to cash
equal to the Fair Market Value of such fractional share determined in the same
manner as for one share of Warrant Stock pursuant to Section 2.1 hereof.
5. ADJUSTMENTS FOR DIVIDENDS, DISTRIBUTIONS AND RECLASSIFICATIONS. In case at
any time or from time to time, the holders of Warrant Stock shall have received,
or (on or after the record date fixed for the determination of shareholders
eligible to receive) shall have become entitled to receive, without payment
therefor:
(a) other or additional, or rights to acquire, stock or other
securities or property (other than cash) by way of dividend;
(b) any cash (excluding cash dividends payable solely out of earnings
or earned surplus of the Company); or
(c) other or additional stock or other securities or property
(including cash) by way of spin-off, split-up, reclassification,
recapitalization, combination of shares or similar corporate restructuring;
other than additional shares of Warrant Stock pursuant to adjustments which are
provided for in Section 7.1 hereof, then and in each such case, the holder of
this Warrant, on the exercise hereof as provided in Section 2 hereof, shall be
entitled to receive, in addition to the number of shares of Warrant Stock
receivable thereupon, and without payment of any additional consideration
therefor, the amount of stock and other securities and property (including cash
in the cases referred to in subsections (b) and (c) of this Section 5) which
such holder would have received prior to or would have held on the date of such
exercise if on the date hereof it had been the holder of record of the number of
shares of Warrant Stock called for on the face of this Warrant and had
thereafter, during the period from the date hereof to and including the date of
such exercise, retained such shares and received and retained all such other or
additional stock and other securities and property (including cash in the cases
referred to in subsections (b) and (c) of this Section 5) receivable by such
holder as aforesaid during such period, giving effect to all further adjustments
called for during such period by Sections 6 and 7 hereof.
6. ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGER, ETC.
6.1. Certain Adjustments. In case at any time or from time to time, (a)
the Company shall (i) effect a capital reorganization, reclassification or
recapitalization, or determine to
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dissolve, liquidate or wind up, (ii) consolidate with or merge into any other
person, or (iii) transfer all or substantially all of its properties or assets
to any other person, or (b) any other transaction shall occur in which the
holders of the Company's issued and outstanding voting equity securities
immediately prior to such transaction beneficially own less than 50.1% of the
voting equity securities of the successor or surviving entity immediately after
such transaction (each event in clauses (a) and (b) of this Section 6.1 being an
"Acquisition") then, in each such case, the holder of this Warrant, on the
exercise hereof as provided in Section 2 hereof at any time after the
consummation of such reorganization, recapitalization, consolidation, merger,
transfer or other transaction or the effective date of such liquidation,
dissolution or winding up, as the case may be, shall receive, in lieu of the
shares of Warrant Stock (or Other Securities) issuable on such exercise
immediately prior to such consummation or effective date, the stock and other
securities and property (including cash) to which such holder would have been
entitled upon such consummation (or thereafter as a result of such consummation,
including in connection with any dissolution of the Company) if such holder had
so exercised this Warrant immediately prior thereto, all subject to further
adjustment thereafter as provided in Sections 5 and 7 hereof.
6.2. Appointment of Trustee for Warrant Holders Upon Dissolution. In the
event of any dissolution of the Company following the transfer of all or
substantially all of its properties or assets, the Company, prior to such
dissolution, shall, at its expense, deliver or cause to be delivered the stock
and other securities and property (including cash, where applicable) receivable
by the holders of the Warrant after the effective date of such dissolution
pursuant to this Section 6 to a bank or trust company having its principal
office in Boston, Massachusetts, as trustee for the holder or holders of the
Warrant.
6.3. Continuation of Terms. Upon an Acquisition, this Warrant shall be
assumed by the acquiring Person and shall continue in full force and effect and
the terms hereof shall be applicable to the shares of stock and other securities
and property receivable on the exercise of this Warrant after the consummation
of such reorganization, reclassification, recapitalization, consolidation,
merger, transfer or other transaction (and the effective date of dissolution
following any such transfer), as the case may be, and shall be binding upon the
issuer of any such stock or other securities, including, in the case of any such
transfer, the person acquiring all or substantially all of the properties or
assets of the Company and including, in the case of a transaction described in
Section 6.1(b) above, the person acquiring such shares of the Company's issued
and outstanding voting equity securities, whether or not such person shall have
expressly assumed the terms of this Warrant as provided in Section 8 hereof.
Notwithstanding the foregoing, at the election of Citizens, the Company shall
purchase the unexercised portion of this Warrant for cash upon the closing of
any Acquisition for an amount equal to (a) the fair market value of any
consideration that would have been received by Citizens in consideration of the
shares of Warrant Stock had Citizens exercised the unexercised portion of this
Warrant immediately before the record date for determining the shareholders
entitled to participate in the proceeds of the Acquisition, less (b) the
aggregate Exercise Price of the shares of Warrant Stock, but in no event less
than zero.
7. ADJUSTMENTS FOR STOCK SPLITS ETC.
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7.1. General. If at any time there shall occur any stock split, stock
dividend, reverse stock split or other subdivision or combination of the
outstanding shares of the Warrant Stock(a "Stock Event"), then (a) the number of
shares of Warrant Stock to be received by the holder of this Warrant upon
exercise hereof shall be appropriately adjusted such that the proportion of the
number of shares issuable hereunder to the total number of shares of the Company
outstanding (on a fully diluted as converted, as exercised basis) prior to such
Stock Event is equal to the proportion of the number of shares issuable
hereunder after such Stock Event to the total number of shares of the Company
outstanding (on a fully diluted basis) after such Stock Event, and (b) the
Exercise Price shall be proportionately decreased or increased as appropriate
upon the occurrence of any stock split or other subdivision or combination of
the Warrant Stock.
8. NO DILUTION OR IMPAIRMENT. The Company will not, by amendment of the
Certificate or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of the
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the holder of the Warrant against
dilution or other impairment. Without limiting the generality of the foregoing,
the Company (i) will not increase the par value of any shares of stock
receivable on the exercise of the Warrant above the amount payable therefor on
such exercise, (ii) will take all such action as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and non-
assessable shares of stock on the exercise of the Warrant from time to time
outstanding, (iii) will not transfer all or substantially all of its properties
and assets to any other person (corporate or otherwise), or consolidate with or
merge into any other person or permit any other person to consolidate with or
merge into the Company (if the Company is not the surviving entity), unless such
other person shall expressly assume in writing and will be bound by all the
terms of this Warrant.
9. CERTIFICATE AS TO ADJUSTMENTS. In each case of any event that may require
any adjustment or readjustment in the Exercise Price, or the number or class of
shares of Warrant Stock issuable on the exercise of this Warrant the Company at
its expense will promptly prepare a certificate setting forth such adjustment or
readjustment, and showing, in detail, the facts upon which any such adjustment
or readjustment is based, including a statement of (i) the consideration
received or receivable by the Company for any additional shares of Warrant Stock
(or Other Securities) issued or sold or deemed issued or sold,(ii) the number of
shares of Warrant Stock then outstanding or deemed to be outstanding on a fully
diluted, as converted, as exercised basis, and (iii) the Exercise Price and the
number of shares of Warrant Stock to be received upon exercise of this Warrant,
in effect immediately prior to such adjustment or readjustment and as adjusted
and readjusted (if required by Section 7) on account thereof. The Company will
forthwith mail a copy of each such certificate to each holder of a Warrant, and
will, on the written request at any time of any holder of a Warrant, furnish to
such holder a like certificate setting forth the calculations used to determine
such adjustment or readjustment. At its option, the holders of a Warrant may
confirm the adjustment noted on the certificate by causing such
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adjustment to be computed by the Company's independent accounting firm or
another independent certified public accountant at the expense of the Company.
10. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to Holder as follows:
10.1. Organization and Good Standing. The Company is duly organized and
existing as a corporation in good standing in the [State of Delaware] and is
duly qualified as a foreign corporation and authorized to do business in all
other jurisdictions in which the nature of its business or property makes such
qualification necessary. The Company has the corporate power to own its
properties and to carry on its business as now conducted and as proposed to be
conducted.
10.2. Authorization, The execution, delivery and performance by the
Company of this Warrant, and the issuance and sale by the Company of the
Securities hereunder (a) are within the Company's corporate power and authority,
(b) have been duly authorized by all necessary corporate proceedings, and (c) do
not conflict with or result in any breach of any provision of, or the creation
of any lien upon any of the property of the Company or require any consent or
approval pursuant to, the Certificate or by-laws of the Company or any law,
regulation, order, judgment, writ, injunction, license, permit, agreement or
instrument applicable to the Company.
10.3. Enforceability. The execution and delivery by the Company of this
Warrant, and the issuance and sale by the Company of the Securities hereunder,
will result in legally binding obligations of the Company, enforceable against
the Company in accordance with the respective terms and provisions hereof and
thereof.
10.4. Governmental Approvals. The execution, delivery and performance by
the Company of this Warrant, and the issuance and sale of the Securities
hereunder, do not require the approval or consent of, or any filing with, any
governmental authority or agency.
10.5. ____________________________________________________________________
Reservation, Etc. Sufficient shares of authorized but unissued Warrant Stock
have been reserved by appropriate corporate action in connection with the
prospective exercise of this Warrant. The issuance of the Securities will not
require any further corporate action by the stockholders or directors of the
Company, will not be subject to preemptive rights in any present or future
stockholders or other securities holders of the Company and will not conflict
with any provision of any agreement to which the Company is a party or by which
it is bound, and all Warrant Stock when issued upon exercise of this Warrant in
accordance with its terms, will be duly authorized, validly issued, fully paid
and non-assessable.
10.6. Defaults. Other than with respect to that certain Amended and
Restated Credit Agreement dated as of ________ between the Company and Citizens,
the Company is not in default under any provisions of its Certificate or by-
laws, or under any provisions of any franchise, contract, agreement, lease or
other instrument to which it is a party or by which it or its property is bound
or in violation of any law, judgment, decree or governmental order, rule or
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regulation, which default or violation could affect adversely in any material
manner the business, assets or financial condition of the Company.
10.7. Issuance of Securities. All securities of the Company to be issued
pursuant to this Warrant when issued will have been issued in accordance with
all applicable laws and regulations, including without limitation the Securities
Act and state "blue sky" laws.
10.8. Financial Statements. All financial statements and financial
information of the Company furnished to Citizens by the Company are true and
correct and fairly present in all material respects the financial condition
and/or results of operations, as the case may be, of the Company at the close of
business on the date thereof.
10.9. Representations and Warranties under Related Agreements. All
representations and warranties made by the Company in the Financing Agreements
are true and correct as of the date hereof with the same force and effect as
though made on and as of the date hereof, and such representations and
warranties are hereby confirmed to Citizens and made representations and
warranties of the Company hereunder as fully as if set forth herein.
10.10. Disclosure. No representation, warranty or statement made in this
Warrant, any Financing Agreement, or any agreement, certificate, statement or
document furnished by or on behalf of the Company in connection herewith or
therewith contains any untrue statement of material fact or omits to state a
material fact necessary in order to make the statements contained herein or
therein, in light of the circumstances in which they were made, not misleading.
11. INVESTMENT REPRESENTATION. Citizens represents and warrants to the Company
that Citizens is (a) an "accredited investor" within the meaning of Regulation D
promulgated under the Securities Act, and (b) acquiring the Securities for
investment and not with a view to selling or otherwise distributing the
Securities in violation of the Securities Act and state "blue sky" laws;
provided, however, that the disposition of Citizens's property shall at all
times be and remain in Citizens's control, subject to Section 20 hereof.
12. NOTICES OF RECORD DATE. In the event of:
(a) any taking by the Company of a record of the holders of any class
of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any
class or any other securities or property, or to receive any other right;
or
(b) any capital reorganization of the Company, any reclassification
or recapitalization of the capital stock of the Company or any transfer of
all or substantially all the assets of the Company to or any consolidation
or merger of the Company with or into any other Person; or
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(c) any voluntary or involuntary dissolution, liquidation or winding-
up of the Company;
then, and in each such event, the Company will mail or cause to be mailed to the
holder of this Warrant a notice specifying (i) the date on which any such record
is to be taken for the purpose of such dividend, distribution or right, and
stating the amount and character of such dividend, distribution or right, (ii)
the date on which any such reorganization, reclassification, recapitalization,
transfer, consolidation, merger, dissolution, liquidation or winding-up is
anticipated to take place, and the time, if any is to be fixed, as of which the
holders of record of Warrant Stock (or Other Securities) shall be entitled to
exchange their shares of Warrant Stock (or Other Securities) for securities or
other property deliverable on such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up, and (iii) the amount and character of any stock or other securities,
or rights or options with respect thereto, proposed to be issued or granted, the
date of such proposed issue or grant and the persons or class of persons to whom
such proposed issue or grant is to be offered or made. Such notice shall be
mailed at least thirty (30) days prior to the date specified in such notice on
which any such action is to be taken.
13. INFORMATION RIGHTS. So long as Citizens holds this Warrant and/or any of
the Warrant Stock, the Company shall deliver to the holder, promptly after
mailing/sending, copies of all press releases, reports, financial statements,
notices or other written communications to any shareholders of the capital stock
of the Company, and at all times, if any, when the Company shall have failed to
timely file, or shall not be required to file, reports with the Securities and
Exchange Commission pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934, as amended, the Company shall deliver to the holder (a)
within one hundred twenty (120) days after the end of each fiscal year of the
Company, the annual audited consolidated financial statements of the Company
certified by independent public accountants of recognized standing, and (b) such
other financial statements required under and in accordance with any loan
documents between Citizens and the Company or if there are no such requirements
(or if the subject loan(s) no longer are outstanding), then within forty-five
(45) days after the end of each of the first three quarters of each fiscal year,
the Company's quarterly, unaudited consolidated financial statements, certified
by the Company's chief financial officer.
14. RESERVATION OF STOCK ISSUABLE ON EXERCISE OF WARRANT. The Company will at
all times take all actions necessary to reserve and keep available, solely for
issuance and delivery on the exercise of this Warrant, a sufficient number of
shares of Warrant Stock and Other Securities to permit exercise from time to
time in full of this Warrant and conversion of such shares of Warrant Stock and
Other Securities.
15. DEFINITIONS. As used herein the following terms have the following
respective meanings:
15.1. The term "Affiliate" shall mean any Person directly or indirectly
controlling, controlled by or under direct or indirect common control with
Citizens (or other specified Person).
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15.2. "Bank Affiliate" See Section 19 hereof.
15.3. "Bank Holding Company Act" See Section 19 hereof.
15.4. The term "Certificate" shall mean the Company's Certificate of
Incorporation, as amended and/or restated and in effect from time to time,
including without limitation any Certificate of Designation applicable to the
Warrant Stock.
15.5. The term "Financing Agreements" shall include this Warrant and the
Loan Agreement and all present and future documents, instruments, agreements and
certificates executed and delivered to Citizens by any Person in connection
therewith.
15.6. The term "Other Securities" refers to any stock (other than Warrant
Stock) and other securities of the Company or any other Person (i) which the
holder of this Warrant at any time shall be entitled to receive, or shall have
received, on the exercise of this Warrant, in lieu of or in addition to Warrant
Stock, or (ii) which at any time shall be issuable or shall have been issued in
exchange for or in replacement of Warrant Stock or Other Securities, in each
case pursuant to Section 5 or 6 hereof.
15.7. The term "Person" shall mean an individual, partnership,
corporation, limited liability company, association, trust, joint venture,
unincorporated organization, and any government, governmental department or
agency or political subdivision thereof.
15.8. The term "Securities" shall mean, collectively, the Warrant, and
the shares of Warrant Stock and Other Securities issuable hereunder..
15.9. The term "Securities Act" shall mean the Securities Act of 1933, as
amended, or any successor federal statute or code, and the rules and regulations
of the Commission thereunder, all as the same shall be in effect at the time.
15.10. The term "Small Business Act" shall mean the Small Business
Investment Act of 1958, as amended, or any successor federal statute, and the
rules and regulations of the Small Business Administration thereunder, all as
the same shall be in effect from time to time.
16. WARRANT AGENT. The Company may, by written notice to the holder of this
Warrant, appoint an agent having an office in Boston, Massachusetts for the
purpose of issuing Warrant Stock on the exercise of this Warrant pursuant to
Section 2 hereof, and exchanging or replacing this Warrant, or any of the
foregoing, and thereafter any such issuance, exchange or replacement, as the
case may be, shall be made at such office by such agent.
17. REMEDIES. The Company stipulates that the remedies at law of the holder of
this Warrant in the event of any default or threatened default by the Company in
the performance of or compliance with any of the terms of this Warrant are not
and will not be adequate, and that such terms may be specifically enforced by a
decree for the specific performance of any
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agreement contained herein or by an injunction against a violation of any of the
terms hereof or otherwise.
18. NOTICES. All notices and other communications from the Company to the
holder of this Warrant shall be mailed by first class registered or certified
mail, postage prepaid, or sent by overnight courier, fee prepaid, to the
following address, or to such other address as the holder hereof may have
furnished to the Company in accordance with this Section 18:
▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇
Citizens Bank of Massachusetts
__________________________
__________________________
copies to:
▇. ▇▇▇▇▇ Telford, Esq.
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ LLP
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
19. REGULATORY RESTRICTIONS.
19.1. Holding Company. No Person which is a bank holding company or a
subsidiary of a bank holding company (a "Bank Affiliate") as defined in the Bank
Holding Company Act of 1956, as amended, or other applicable banking laws of the
United States of America and the rules and regulations promulgated thereunder
(the "Bank Holding Company Act") shall acquire Warrant Stock, if, after giving
effect to such acquisition, the Bank Affiliate, together with its Affiliates,
would own more than five percent (5%) of the outstanding voting securities of
the Company. Notwithstanding the foregoing, shares of Warrant Stock may
otherwise be acquired or held by Citizens or any Affiliate of Citizens which is
a Small Business Investment Company consistent with and subject to the
limitations contained in the Small Business Act and, to the extent not
inconsistent with the Bank Holding Company Act, shares of Warrant Stock may be
acquired in the event that:
(a) the Company shall vote to merge or consolidate with or into any
other Person and after giving effect to such merger or consolidation
Citizens or Affiliate of Citizens would not own more than five percent (5%)
of the outstanding voting securities of the surviving corporation; or
(b) said holder exercises its registration rights pursuant to Section
3 hereof and the registration statement resulting therefrom is effective.
20. RESTRICTIONS ON TRANSFER.
20.1. General Restriction. The Securities shall be transferable only upon
the satisfaction of the conditions set forth below in this Section 20.
-11-
20.2. Restrictions on Transfer. The holder of this Warrant and each Person
to whom this Warrant is subsequently transferred represents and warrants to the
Company (by acceptance of such transfer) that such Person will not transfer this
Warrant or any Warrant Stock except (i) pursuant to an effective registration
statement under the Securities Act, (ii) pursuant to Rule 144 under the
Securities Act (or any other rule under the Securities Act related to the
disposition of securities), (iii) transfers by or between Citizens and any of
its Affiliates, or (iv) upon the delivery of an opinion of counsel, reasonably
satisfactory to the Company, that such transfer is exempt from registration
under the Securities Act.
20.3. Restrictive Legends. Except as otherwise permitted by this Section
20, each Security shall bear a legend substantially in accordance with Section
20.2 above.
20.4. Transferability. Subject to the provisions of this Section 20, this
Warrant and all rights hereunder are transferable, in whole or in part, without
charge to the holder hereof, at the office or agency of the Company by the
registered holder thereof in person or by a duly authorized attorney, upon
surrender of this Warrant together with an assignment hereof properly endorsed.
Until transfer hereof on the registration books of the Company, the Company may
treat the registered holder hereof as the owner hereof for all purposes. Any
transferee of this Warrant and any rights hereunder, by acceptance thereof,
agrees to assume all of the obligations of a holder thereunder and to be bound
by all of the applicable terms and provisions of this Warrant.
21. MISCELLANEOUS. In case any provision of this Warrant shall be invalid,
illegal or unenforceable, or partially invalid, illegal or unenforceable, the
provision shall be enforced to the extent, if any, that it may legally be
enforced and the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby. This Warrant
and any term hereof may be changed, waived, discharged or terminated only by a
statement in writing signed by the party against which enforcement of such
change, waiver, discharge or termination is sought. This Warrant shall be
governed by and construed in accordance with the domestic substantive laws (and
not the conflict of law rules) of the Commonwealth of Massachusetts. All
representations and warranties set forth in this Warrant shall survive the
execution and delivery of this Warrant. The headings in this Warrant are for
purposes of reference only, and shall not limit or otherwise affect any of the
terms hereof. This Warrant shall take effect as an instrument under seal.
[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]
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IN WITNESS WHEREOF, the parties hereto have executed this Stock Purchase
Warrant No. W-1 of JLM Industries, Inc. as an instrument under seal as of April
___, 2001.
(Corporate Seal) JLM INDUSTRIES, INC.
Attest: By:
---------------------------
Name:
---------------------------
Title:
------------------------ ------------------------
Name:
Title:
-13-
NOTICE OF EXERCISE OR CONVERSION
--------------------------------
Date:
-------------,----
[Issuer]
__________________
__________________
Attn: President
Ladies and Gentlemen:
The undersigned hereby elects to exercise or convert the enclosed Warrant
issued to it by [Issuer] (the "Company") and dated as of
____________, ____.
The undersigned elects to:
[_] Exercise the Warrant and to purchase thereunder shares
-------------
of the Warrant Stock of the Company (the "Shares") at an exercise
price of per Share for an aggregate purchase price of
------------
Dollars ($ ) (the "Purchase Price"). Pursuant to
------------- ------
the terms of the Warrant, the undersigned has delivered the Purchase
Price herewith in full.
[_] Convert % of the value of the Warrant at the current Exercise Price
--
(as defined in the Warrant) of $ per Share.
------
[_] Convert $ of the outstanding principal and interest under that
------
certain [Note] dated , in the face amount of $ ,
--------- -----------
issued by the Company and held by the undersigned, at the current
Exercise Price of $ per share.
------
Very truly yours,
-----------------------
Receipt Acknowledged:
[ISSUER]
By
Title:
------------------------
on
------------------, ----
FORM OF ASSIGNMENT
(To be signed only on transfer of Warrant)
For value received, the undersigned hereby sells, assigns, and transfers
unto of the right represented by the
-------------- ---------------------------
within Stock Purchase Warrant to purchase _____ shares of Warrant Stock of
[Issuer] a Delaware corporation, to which the within Stock Purchase Warrant
relates, and appoints Attorney to transfer such right on the
-----------------
books of [Issuer], with full power of substitution in the premises.
Dated:
-----------------------------------------------------------------------
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant)
--------------------------------------
(Address)
Signed in the presence of:
--------------------------------