EXHIBIT 10.4
REVOLVING LOAN NOTE
$15,000,000 October 22, 2002
FOR VALUE RECEIVED, the undersigned, Tremont Corporation, a Delaware
corporation ("Maker"), promises to pay, on or before December 31, 2004 (the
"Maturity Date"), to the order of NL Industries, Inc., a New Jersey corporation
("Payee") or any subsequent holder, at its offices at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, or such other place designated by holder in
writing, the principal sum of FIFTEEN MILLION ($15,000,000), or such lesser
amount as shall equal the aggregate principal amount of all revolving loans made
to Maker by Payee hereunder (the "Revolving Loans"), together with interest from
the date hereof on the unpaid balance of this Note as it may exist from time to
time at the rate (herein called the "Applicable Rate") of prime plus two percent
per annum, determined at the beginning of each calendar quarter, and in no event
shall the Applicable Rate exceed the maximum interest rate permitted to be
charged from time to time under applicable law (herein called the "Maximum
Rate"). Accrued interest on the unpaid principal of this Note shall be computed
on the basis of a 360-day year applied to the actual number of days in each
calendar month and shall be payable on the last business day of each calendar
quarter. The Applicable Rate shall be determined based upon the published prime
rate. Notwithstanding the foregoing, if at any time the Applicable Rate exceeds
the Maximum Rate, the rate of interest payable under this Note shall be limited
to the Maximum Rate as provided above.
Subject to the terms and conditions set forth in this Note, Payee shall
make Revolving Loans to Maker at any time and from time to time from the date of
this Note until the Maturity Date, in an aggregate principal amount not to
exceed at any one time the Maximum Revolving Loan Amount (as defined below) at
such time. Revolving Loans made under this Note shall be in an integral multiple
of $200,000 and shall be wired by Payee to the account of Maker requested by
Maker prior to 3:00 p.m., New York time, on the date proposed by Maker. Maker
shall give Payee irrevocable written notice of all proposed Revolving Loans not
later than three business days prior to the proposed borrowing (a "Borrowing
Notice"). Such Borrowing Notice shall specify the aggregate principal amount of
the Revolving Loan that Maker is requesting Payee to make and the requested
effective date of the proposed Revolving Loan, and shall contain Maker's
certification that no default exists, no default would, solely with the passage
of time, exist and that no default would exist after giving effect to the
requested Revolving Loan. Each Revolving Loan shall bear interest on the
outstanding principal balance thereof from the date such Revolving Loan is made
at the Applicable Rate. The "Maximum Revolving Loan Amount" shall mean Fifteen
Million Dollars ($15,000,000), subject to reduction in accordance with the
provisions of this Note.
Maker shall pay Payee on the last business day of each calendar quarter
beginning on December 31, 2002 and simultaneously with the payment in full of
this Note, in immediately available funds, a revolving loan commitment fee (the
"Fee") equal to 1/2 of 1% per annum on the average unused amount of the Maximum
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Revolving Loan Amount during such quarter (or, if the Fee is being
calculated for a period other than a quarter, during such period). Such Fee
shall be computed on the basis of the actual number of days elapsed over a year
of 360 days. Such Fee shall commence on the date of this Note and cease to
accrue on the termination of ▇▇▇▇▇'s commitment to make Revolving Loans.
Maker shall have the right at any time, in its sole discretion and upon
not less than 10 days written notice to Payee, to further permanently reduce or
terminate the Maximum Revolving Loan Amount, provided, however, that each
partial reduction thereof shall be in an integral multiple of $250,000. Any
reduction of the Maximum Revolving Loan Amount shall be accompanied by payment
in full of any principal over the Maximum Revolving Loan Amount plus accrued
interest and accrued Fee computed as provided in the previous paragraph.
The principal balance of this Note may be prepaid and discharged in whole
or in part by Maker at any time and from time to time, without premium, penalty
or fee. Notwithstanding the prior sentence, all interest that is accrued and
unpaid with respect to the prepaid principal amount and the Fee accrued and
unpaid with respect to the unpaid Maximum Revolving Loan Amount shall be paid at
the time of the prepayment.
The Maker, signers, sureties, guarantors and endorsers of this Note,
jointly and severally, except as otherwise expressly set forth herein, waive
demand, presentment, notice of nonpayment or dishonor, diligence in collecting,
grace, notice of any protest, and consent to all extensions for any periods of
time and partial payments, before or after maturity.
If this Note is not paid at maturity, howsoever such maturity may be
brought about, and the same is placed in the hands of an attorney for
collection, or if this Note is collected by suit or through bankruptcy, probate
or other legal proceedings, Maker agrees to pay holder's costs of collection,
when incurred, including reasonable attorney's fees.
No delay in the payments to holder or in the exercise of any power or
right under this Note, or under any instrument securing payment hereof or
executed in connection herewith, shall operate as a waiver thereof, nor shall a
single or partial exercise of any power or right preclude other or further
exercise thereof or exercise of any other power or right.
Payment of the indebtedness evidenced by this Note is secured by the
security interests established by a Security Agreement dated as of the date of
this Note executed by the Maker and Payee covering certain securities owned by
Maker (the "Security Documents").
If at any time the Payee shall notify the Maker that a Collateral
Deficiency (as hereinafter defined) exits, then within 5 days of its receipt of
such notice, the Maker shall, at its option, do one of the following:
(a) prepay principal amounts outstanding under this Note, together with
accrued and unpaid interest on such principal amount to the date of
prepayment, so that immediately following such prepayment no
Collateral Deficiency exists, or
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(b) provide the Payee with additional collateral under the Security
Documents reasonably acceptable to the Payee so that immediately
following delivery of such additional collateral no Collateral
Deficiency exists.
In the event a Collateral Deficiency occurs, ▇▇▇▇▇'s commitment to make
further Revolving Loans shall be terminated without notice, at the option of the
Payee, until such time as no Collateral Deficiency shall exist.
For purposes of this Note, (a) a Collateral Deficiency exists at any time
when the outstanding principal amount together with accrued and unpaid interest
on the Note and the Fee exceeds 20% of the Collateral Value, (b) Collateral
Value shall mean the Current Market Value of all securities pledged under the
Security Documents, and (c) Current Market Value shall mean the most recent
closing price of any security pledged under the Security Documents on the New
York Stock Exchange or any other nationally recognized securities exchange, or
if such security is not listed on a national securities exchange, the closing
price of such security as reported on the National Association of Securities
Dealers Automated Quotation System ("NASDAQ"), or, if applicable, the average of
the closing bid and ask quotation for such security as reported on the NASDAQ.
The term default shall include any or all of the following:
(a) The assignment, voluntary or involuntary conveyance of legal or
beneficial interest, mortgage, pledge or grant of a security interest in
any of the Collateral (as defined in the Security Documents); or
(b) The filing or issuance of a notice of any lien, warrant for
distraint or notice of levy for taxes or assessment against the Collateral
(except for those which are being contested in good faith and for which
adequate reserves have been created); or
(c) Maker's nonpayment of any installment of principal, interest or
the Fee under this Note; or
(d) The adjudication of Maker as bankrupt, or the taking of any
voluntary action by Maker or any involuntary action against Maker seeking
an adjudication of Maker as bankrupt, or seeking relief by or against
Maker under any provision of the Bankruptcy Code, or seeking liquidation
or dissolution of Maker;
(e) Maker failing to comply with any other covenant in this Note or
in the Security Documents;
(f) Maker's default in any payment (regardless of amount) of
principal of or interest on any other indebtedness for borrowed money; or
(g) Maker's default in the observance or performance of any other
agreement or condition relating to any such other indebtedness for
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borrowed money or contained in any instrument evidencing, securing or
relating thereto or any other event shall occur or condition exist, the
effect of which default or other event or condition is to cause, or to
permit the holder of the indebtedness to cause, such other indebtedness
for borrowed money to become due prior to its stated maturity.
An "Event of Default" shall be deemed to have occurred immediately upon
any default described in clause (d) or (g) above, if any default described in
clauses (c) or (f) above is not cured within 5 days, and if any default
described in clauses (a), (b), or (e) is not cured within 30 days after written
notice from Payee to Maker.
If an Event of Default has occurred and is continuing, the entire
principal balance and accrued interest owing hereof shall at once become due and
payable and Payee's commitment to make Revolving Loans shall be terminated
without notice, at the option of the Payee, and the property covered by the
Security Documents shall be subject to foreclosure under the Security Documents
and applicable law. Failure to exercise this option shall not constitute a
waiver of the right to exercise the same subsequently or in the event of any
subsequent default. If any payment, including interest or principal, required to
be made under this Note is not made when due, interest on the overdue sum shall
accrue at a rate of prime plus four percent.
The proceeds of this Note shall be used (i) first, to repay all amounts
owed by Maker to NL Environmental Management Services, Inc. pursuant to the
Revolving Loan Note of Maker dated as of February 9, 2001, and (ii) second, for
working capital or other purposes, as determined by Maker.
So long as the Note shall remain unpaid, the Maker shall furnish to the
Payee:
(a) as soon as available and in any event not later than 45 days after
the end of each of the first three quarters of each fiscal year of
the Maker, the consolidated balance sheet of the Maker as of the end
of such quarter and the consolidated statements of income and
retained earnings and cash flows of the Maker for the period
commencing at the end of the previous year and ending with the end
of such quarter, all in reasonable detail and duly certified with
respect to such consolidated statements (subject to year-end
adjustments) by an officer of the Maker as having been prepared in
accordance with generally accepted accounting principles;
(b) as soon as available and in any event not later than 90 days after
the end of each fiscal year of the Maker, a copy of the annual audit
report for such year for the Maker, including therein consolidated
balance sheets of the Maker as of the end of such fiscal year and
consolidated statements of income and retained earnings and of cash
flows of the Maker for such fiscal year, in each case certified by
PricewaterhouseCoopers LLP or other independent certified public
accountants of recognized standing reasonably acceptable to Payee.
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This Note shall be construed in accordance with the laws of the State of
New Jersey and the laws of the United States applicable to transactions in New
Jersey.
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IN WITNESS WHEREOF, the undersigned Maker has executed this Note as of the
22 day of October, 2002.
Tremont Corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Its: Vice President
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Acknowledged and agreed to by the undersigned:
NL Industries, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Its: Vice President
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58135
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SCHEDULE OF REVOLVING LOANS
Type of Transaction
(Loan or Payment) Date Amount
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