AMENDED AND RESTATED CREDIT AGREEMENT
EXHIBIT
10.1
AMENDED
AND RESTATED CREDIT AGREEMENT
THIS
AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement") is entered into as
of
December 28, 2006, by and among XXXXXXX’X METAL, INC., a Missouri corporation
(“Xxxxxxx’x Metal”), LMI FINISHING, INC., an Oklahoma corporation (“LMI
Finishing”), TEMPCO ENGINEERING, INC., a Missouri corporation (“Tempco”),
VERSAFORM CORP., a California corporation (“Versaform”), PRECISE MACHINE
PARTNERS, LLP, a Texas limited liability partnership (“Precise Machine”), and
LMI-TCA, INC., a Delaware corporation (“LMI-TCA”; Xxxxxxx’x Metal, LMI
Finishing, Tempco, Versaform, Precise Machine and LMI-TCA are hereinafter
collectively referred to as the “Borrower”; all references to Borrower in this
Agreement shall mean each and all of them jointly and severally), and XXXXX
FARGO BANK, NATIONAL ASSOCIATION ("Bank").
Borrower
and Bank are parties to a Credit and Security Agreement dated as of November
29,
2004 (as amended, modified and supplemented, the “Existing Credit Agreement”)
pursuant to which Bank, through its Xxxxx Fargo Business Credit operating
division, has provided certain credit facilities to Borrower in the form of
a
$23,250,000 revolving credit facility and two term loans in the original
principal amounts of $4,720,000 and $3,645,000.
Borrower
has requested certain modifications to the credit facilities, including, among
other things, provision of a single revolving credit facility in an amount
up to
$40,000,000 to refinance the existing loans.
Bank
has
agreed to make the requested credit facility available to Borrower on the terms
and conditions hereinafter set forth.
This
Agreement is given in amendment to, restatement of and substitution for the
Existing Credit Agreement;
ARTICLE
I
SECTION
1.1. REVOLVING
LINE OF CREDIT.
(a) Revolving
Line of Credit.
Subject
to the terms and conditions of this Agreement, Bank hereby agrees to make
advances to Borrower from time to time up to and including March 31, 2012,
not
to exceed at any time the aggregate principal amount of Forty Million Dollars
($40,000,000.00) ("Line of Credit"), the proceeds of which shall be used to
refinance Borrower’s existing indebtedness with Bank, for general working
capital purposes and general corporate needs and to finance Permitted
Acquisitions. Borrower's obligation to repay advances under the Line of Credit
shall be evidenced by a promissory note dated as of December 28, 2006 ("Line
of
Credit Note"), all terms of which are incorporated herein by this
reference.
(b) Limitation
on Borrowings; Minimum Amount.
Outstanding borrowings under the Line of Credit shall not at any time exceed
an
aggregate of Forty Million Dollars ($40,000,000.00). Each advance under the
Line
of Credit, other than the initial advance, will be at least $500,000.00 and
a
multiple of $100,000.
(c) Letter
of Credit Subfeature.
As a
subfeature under the Line of Credit, Bank agrees from time to time during the
term thereof to issue or cause an affiliate to issue standby letters of credit
for the account of Borrower (each, a "Letter of Credit" and collectively,
"Letters of Credit"); provided however, that the aggregate undrawn amount of
all
outstanding Letters of Credit shall not at any time exceed Five Million Dollars
($5,000,000.00). The form and substance of each Letter of Credit shall be
subject to approval by Bank, in its sole discretion. Each Letter of Credit
shall
be issued for a term not to exceed three hundred sixty-five (365) days, as
designated by Borrower; provided however, that a Letter of Credit may provide
that it is automatically renewable for successive periods unless notice of
non-renewal is given by Bank at some time prior to the then current expiration
date. The undrawn amount of all Letters of Credit shall be reserved under the
Line of Credit and shall not be available for borrowings thereunder. Each Letter
of Credit shall be subject to the additional terms and conditions of the Letter
of Credit agreements, applications and any related documents required by Bank
in
connection with the issuance thereof. Each drawing paid under a Letter of Credit
shall be deemed an advance under the Line of Credit and shall be repaid by
Borrower in accordance with the terms and conditions of this Agreement
applicable to such advances. If the Line of Credit is terminated for any reason
or is due to expire prior to the expiration date of any Letter of Credit when
such Letter of Credit is issued, the Borrower shall at the time of such
termination or upon issuance of such Letter of Credit pay the Bank in
immediately available funds for deposit in a special account an amount equal
to
the face amount of any Letters of Credit outstanding upon termination or to
be
so issued plus any anticipated fees and costs. If the Borrower fails to promptly
make any such payment in the amount required hereunder, then the Bank may make
an advance under the Line of Credit in an amount sufficient to fulfill this
obligation and deposit the proceeds to a special account. The special account
shall be an interest bearing account maintained with the Bank. Any interest
earned on amounts deposited in the special account shall be credited to the
special account. The Bank may apply amounts on deposit in the special account
at
any time or from time to time to the indebtedness of Borrower to Bank in the
Bank’s sole discretion. The Borrower may not withdraw any amounts on deposit in
the special account as long as the Bank maintains a security interest therein.
The Bank agrees to transfer any balance in the special account to the Borrower
when the Bank is required to release its security interest in the special
account under applicable law.
(d) Borrowing
and Repayment.
Borrower may from time to time during the term of the Line of Credit borrow,
partially or wholly repay its outstanding borrowings, and reborrow, subject
to
all of the limitations, terms and conditions contained herein or in the Line
of
Credit Note; provided however, that the total outstanding borrowings under
the
Line of Credit shall not at any time exceed the maximum principal amount
available thereunder, as set forth above.
SECTION
1.2. INTEREST/FEES.
(a)
Interest. The
outstanding principal balance of the Line of Credit shall bear interest, and
the
amount of each drawing paid under any Letter of Credit shall bear interest
from
the date such drawing is paid to the date such amount is fully repaid by
Borrower, at the rates of interest set forth in the Line of Credit
Note.
(b) Computation
and Payment.
Interest shall be computed on the basis and shall be payable at the times and
place set forth in each promissory note or other instrument or document required
hereby.
(c) Unused
Commitment Fee.
Borrower shall pay to Bank a fee equal to the rate per annum set forth below
opposite the applicable ratio of Total Funded Debt to EBITDA (as defined in
the
Line of Credit Note) then in effect (computed on the basis of a 360-day year,
actual days elapsed) on the average daily unused amount of the Line of Credit,
which fee shall be calculated on a quarterly basis by Bank and shall be due
and
payable by Borrower in arrears within ten (10) days after each billing is sent
by Bank (the undrawn amount of all Letters of Credit issued pursuant to this
Agreement will be deemed to be usage of the Line of Credit for purposes of
calculating the unused commitment fee):
Tier
|
Total
Funded Debt to EBITDA
|
Unused
Commitment Fee
|
1
|
≥2.50
|
.30
|
2
|
≥1.50<2.50
|
.25
|
3
|
≥1.00<1.50
|
.225
|
4
|
≥0.50<1.00
|
.20
|
5
|
<0.50
|
.175
|
The
amount of the fee shall be determined and adjusted effective as of the first
day
of the first month following the date on which each financial statement and
compliance certificate are required in accordance with the provisions of
Sections 4.3(a) or (b) and (d); provided that notwithstanding the foregoing,
in
the event a financial statement and compliance certificate are not delivered
timely by the date required by Sections 4.3(a) or (b) and (d), the Unused
Commitment Fee shall be based on pricing tier 1 until such time as an
appropriate compliance certificate and financial statement are delivered,
whereupon the applicable pricing tier shall be adjusted based on the information
contained in such financial statement and compliance certificate.
Notwithstanding the foregoing, for determining the Unused Commitment Fee from
the date of this Agreement until delivery of the initial financial statement
and
compliance certificate required by Section 4.3(a) or (b) and (d), Borrower
shall
be entitled to the Unused Commitment Fee described at tier 5 above, after which
the Unused Commitment Fee shall be based on the Borrower’s performance as set
forth herein.
(d) Letter
of Credit Fees.
Borrower shall pay to Bank (i) fees upon the issuance of each Letter of
Credit determined at a per annum rate equal to the LIBOR Margin in effect at
the
time of issuance pursuant to the Line of Credit Note (computed on the basis
of a
360-day year, actual days elapsed) times the face amount thereof, and
(ii) fees upon the payment or negotiation of each drawing under any Letter
of Credit and fees upon the occurrence of any other activity with respect to
any
Letter of Credit (including without limitation, the transfer, amendment or
cancellation of any Letter of Credit) determined in accordance with Bank's
standard fees and charges then in effect for such activity.
SECTION
1.3. COLLECTION
OF PAYMENTS. Borrower authorizes Bank to collect all interest and agreed-upon
fees due under each credit subject hereto by charging Borrower's deposit account
number 0000000000 with Bank, or any other deposit account maintained by Borrower
with Bank, for the full amount thereof. Should there be insufficient funds
in
any such deposit account to pay all such sums when due, the full amount of
such
deficiency shall be immediately due and payable by Borrower.
SECTION
1.4. COLLATERAL.
As
security for all indebtedness and other obligations of Borrower to Bank,
Borrower hereby grants to Bank security interests of first priority in all
Borrower's accounts, chattel paper and electronic chattel paper, deposit
accounts, documents, equipment, general intangibles, goods, instruments,
inventory, investment property, letter-of-credit rights, letters of credit,
all
sums on deposit in any collateral account, and any items in any lockbox;
together with (i) all substitutions and replacements for and products of
any of the foregoing; (ii) in the case of all goods, all accessions;
(iii) all accessories, attachments, parts, equipment and repairs now or
hereafter attached or affixed to or used in connection with any goods;
(iv) all warehouse receipts, bills of lading and other documents of title
now or hereafter covering such goods; (v) all collateral subject to the
lien of any Loan Document; (vi) any money, or other assets of the Borrower
that now or hereafter come into the possession, custody, or control of the
Bank;
(vii) proceeds of any and all of the foregoing; (viii) books and records of
the Borrower, including all mail or electronic mail addressed to the Borrower;
and (ix) all of the foregoing, whether now owned or existing or hereafter
acquired or arising or in which the Borrower now has or hereafter acquires
any
rights.
All
of
the foregoing shall be evidenced by and subject to the terms of such security
agreements, financing statements, deeds or mortgages, and other documents as
Bank shall reasonably require, all in form and substance satisfactory to Bank.
Borrower shall pay to Bank immediately upon demand the full amount of all
charges, costs and expenses (to include fees paid to third parties and all
allocated costs of Bank personnel), expended or incurred by Bank in connection
with any of the foregoing security, including without limitation, filing and
recording fees and costs of appraisals, audits and title insurance.
SECTION
1.5. GUARANTIES.
The payment and performance of all indebtedness and other obligations of
Borrower to Bank shall be guaranteed jointly and severally by LMI Aerospace,
Inc. (“Parent”) and Precise Machine Company (“PMC”), as evidenced by and subject
to the terms of guaranties in form and substance satisfactory to Bank. The
guaranties shall be secured by, in the case of Parent, a pledge of 100% of
the
capital stock of Borrower, and, in the case of both Parent and PMC, by first
priority security interests, subject to Permitted Encumbrances, in all assets,
other than real estate, now owned or hereafter acquired by such
entities.
ARTICLE
II
Borrower
makes the following representations and warranties to Bank, which
representations and warranties shall survive the execution of this Agreement
and
shall continue in full force and effect until the full and final payment, and
satisfaction and discharge, of all obligations of Borrower to Bank subject
to
this Agreement.
SECTION
2.1. LEGAL
STATUS. Each Borrower, other than Precise Machine, is a corporation, and Precise
Machine is a limited liability partnership, in each case, duly organized and
existing and in good standing under the laws of the state of its organization,
and is qualified or licensed to do business (and is in good standing as a
foreign corporation or entity, if applicable) in all jurisdictions in which
such
qualification or licensing is required or in which the failure to so qualify
or
to be so licensed could have a material adverse effect on such
Borrower.
SECTION
2.2. AUTHORIZATION
AND VALIDITY. This Agreement and each promissory note, contract, instrument
and
other document required hereby or at any time hereafter delivered to Bank in
connection herewith (collectively, the "Loan Documents") have been duly
authorized, and upon their execution and delivery in accordance with the
provisions hereof will constitute legal, valid and binding agreements and
obligations of Borrower or the party which executes the same, enforceable in
accordance with their respective terms.
SECTION
2.3. NO
VIOLATION. The execution, delivery and performance by Borrower of each of the
Loan Documents do not violate any provision of any law or regulation, or
contravene any provision of its organizational documents or result in any breach
of or default under any contract, obligation, indenture or other instrument
to
which Borrower is a party or by which Borrower may be bound.
SECTION
2.4. LITIGATION.
Except as disclosed on Schedule
2.4
hereto,
there are no pending, or to the best of Borrower's knowledge threatened,
actions, claims, investigations, suits or proceedings by or before any
governmental authority, arbitrator, court or administrative agency which could
have a material adverse effect on the financial condition or operation of
Borrower other than those disclosed by Borrower to Bank in writing prior to
the
date hereof.
SECTION
2.5. CORRECTNESS
OF FINANCIAL STATEMENT. The annual financial statement of Borrower dated
December 31, 2005, and all interim financial statements delivered to Bank since
said date, true copies of which have been delivered by Borrower to Bank prior
to
the date hereof, (a) present fairly the financial condition of Borrower in
all
material respects, (b) disclose all material liabilities of Borrower that are
required to be reflected or reserved against under generally accepted accounting
principles, whether liquidated or unliquidated, fixed or contingent, and (c)
have been prepared in accordance with generally accepted accounting principles
consistently applied. Except as disclosed on Schedule
2.5
attached
hereto, since the dates of such financial statements there has been no material
adverse change in the financial condition of Borrower, nor has Borrower
mortgaged, pledged, granted a security interest in or otherwise encumbered
any
of its assets or properties except in favor of Bank or as otherwise permitted
by
Bank in writing.
SECTION
2.6. INCOME
TAX RETURNS. Borrower has no knowledge of any pending assessments or adjustments
of its income tax payable with respect to any year which involve a claimed
deficiency in excess of $100,000.
SECTION
2.7. NO
SUBORDINATION. There is no agreement, indenture, contract or instrument to
which
Borrower is a party or by which Borrower may be bound that requires the
subordination in right of payment of any of Borrower's obligations subject
to
this Agreement to any other obligation of Borrower.
SECTION
2.8. PERMITS,
FRANCHISES. Borrower possesses, and will hereafter possess, all permits,
consents, approvals, franchises and licenses required and rights to all
trademarks, trade names, patents, and fictitious names, if any, necessary to
enable it to conduct the business in which it is now engaged in compliance
with
applicable law.
SECTION
2.9. ERISA.
Except as disclosed on Schedule
2.9
hereto,
Borrower is in compliance in all material respects with all applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended
or
recodified from time to time ("ERISA"); Borrower has not violated any provision
of any defined employee pension benefit plan (as defined in ERISA) maintained
or
contributed to by Borrower (each, a "Plan"); no Reportable Event as defined
in
ERISA has occurred and is continuing with respect to any Plan initiated by
Borrower; Borrower has met its minimum funding requirements under ERISA with
respect to each Plan; and each Plan will be able to fulfill its benefit
obligations as they come due in accordance with the Plan documents and under
generally accepted accounting principles.
SECTION
2.10. OTHER
OBLIGATIONS. Borrower is not in default on any material obligation for borrowed
money, any material purchase money obligation or any other material lease,
commitment, contract, instrument or obligation.
SECTION
2.11. ENVIRONMENTAL
MATTERS. Except as disclosed on Schedule
2.11
hereto,
Borrower is in compliance in all material respects with all applicable federal
or state environmental, hazardous waste, health and safety statutes, and any
rules or regulations adopted pursuant thereto, which govern or affect any of
Borrower's operations and/or properties, including without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
the Superfund Amendments and Reauthorization Act of 1986, the Federal Resource
Conservation and Recovery Act of 1976, and the Federal Toxic Substances Control
Act, as any of the same may be amended, modified or supplemented from time
to
time. None of the operations of Borrower is the subject of any federal or state
investigation evaluating whether any remedial action involving a material
expenditure is needed to respond to a release of any toxic or hazardous waste
or
substance into the environment. Borrower has no material contingent liability
in
connection with any release of any toxic or hazardous waste or substance into
the environment.
ARTICLE
III
SECTION
3.1. CONDITIONS
OF INITIAL EXTENSION OF CREDIT. The obligation of Bank to extend any credit
contemplated by this Agreement is subject to the fulfillment to Bank's
satisfaction of all of the following conditions:
(a) Approval
of Bank Counsel.
All
legal matters incidental to the extension of credit by Bank shall be
satisfactory to Bank's counsel.
(b) Documentation.
Bank
shall have received, in form and substance satisfactory to Bank, each of the
following, duly executed:
(i)
|
This
Agreement and each instrument or document required
hereby;
|
(ii)
|
The
Line of Credit Note;
|
(iii)
|
The
Continuing Guaranty of Parent and PMC;
|
(iv)
|
Such
security and pledge agreements from Borrower and guarantors as Bank
shall
require to evidence the security interests in the
collateral;
|
(v)
|
Such
UCC financing statements or amendments thereto as shall be necessary
to
perfect the security interests in the collateral;
|
(vi)
|
Delivery
of any and all stock certificates or other certificated securities
evidencing the ownership or equity interests of Parent in the
Borrower;
|
(vii)
|
Certified
copies of the organizational documents of Borrower, Parent and PMC,
together with borrowing resolutions and incumbency certificates in
form
and substance acceptable to Bank; and
|
(viii)
|
Such
other documents as Bank may require under any other Section of this
Agreement.
|
(c) Financial
Condition.
There
shall have been no material adverse change, as determined by Bank, in the
financial condition or business of Borrower or any guarantor hereunder, nor
any
material decline, as determined by Bank, in the market value of any collateral
required hereunder or a substantial or material portion of the assets of
Borrower or any such guarantor.
(d) Insurance.
Borrower shall have delivered to Bank evidence of insurance coverage on all
Borrower's property, in form, substance, amounts, covering risks and issued
by
companies satisfactory to Bank, and where required by Bank, with loss payable
endorsements in favor of Bank.
SECTION
3.2. CONDITIONS
OF EACH EXTENSION OF CREDIT. The obligation of Bank to make each extension
of
credit requested by Borrower hereunder shall be subject to the fulfillment
to
Bank's satisfaction of each of the following conditions:
(a) Compliance.
The
representations and warranties contained herein and in each of the other Loan
Documents shall be true on and as of the date of the signing of this Agreement
and on the date of each extension of credit by Bank pursuant hereto, with the
same effect as though such representations and warranties had been made on
and
as of each such date, and on each such date, no Event of Default as defined
herein, and no condition, event or act which with the giving of notice or the
passage of time or both would constitute such an Event of Default, shall have
occurred and be continuing or shall exist; and
(b) Documentation.
Bank
shall have received all additional documents which may be required in connection
with such extension of credit.
ARTICLE
IV
Borrower
covenants that so long as Bank remains committed to extend credit to Borrower
pursuant hereto, or any liabilities (whether direct or contingent, liquidated
or
unliquidated) of Borrower to Bank under any of the Loan Documents remain
outstanding, and until payment in full of all obligations of Borrower subject
hereto, Borrower shall, unless Bank otherwise consents in writing:
SECTION
4.1. PUNCTUAL
PAYMENTS. Punctually pay all principal, interest, fees or other liabilities
due
under any of the Loan Documents at the times and place and in the manner
specified therein, and immediately upon demand by Bank, the amount by which
the
outstanding principal balance of any credit subject hereto at any time exceeds
any limitation on borrowings applicable thereto.
SECTION
4.2. ACCOUNTING
RECORDS. Maintain adequate books and records in accordance with generally
accepted accounting principles consistently applied, and permit any
representative of Bank, at any reasonable time, to inspect, audit and examine
such books and records, to make copies of the same, and to inspect the
properties of Borrower. Absent the occurrence of an Event of Default which
is
continuing, any such inspection, audit or examination shall be at Bank’s
expense.
SECTION
4.3. FINANCIAL
STATEMENTS. Provide to Bank all of the following, in form and detail
satisfactory to Bank:
(a) not
later
than ninety (90) days after and as of the end of each fiscal year, consolidated
and consolidating financial statements of Parent, prepared by a recognized
independent accounting firm and accompanied by an unqualified opinion from
such
accounting firm, to include income statements, balance sheets and statements
of
cash flows for such fiscal year;
(b) not
later
than forty-five (45) days after and as of the end of each fiscal quarter,
internally prepared consolidated and consolidating financial statements of
Parent, to include income statement, balance sheet and statement of cash flows
for such fiscal quarter and for the fiscal year-to-date period then
ended;
(c) not
later
than thirty (30) days prior to the start of each fiscal year, financial
projections for such fiscal year, to include balance sheets and income
statements prepared on a quarterly basis;
(d) contemporaneously
with each annual and quarterly financial statement required hereby, a
certificate of a senior financial officer of Parent that said financial
statements present fairly the financial condition of Borrower in all material
respects and that there exists no Event of Default nor any condition, act or
event which with the giving of notice or the passage of time or both would
constitute an Event of Default, together with calculations confirming Borrower’s
compliance with all financial covenants;
(e) promptly
after the sending or filing thereof, copies of all regular and periodic
financial reports or other materials filed by Parent or any affiliated entity
with the Securities and Exchange Commission or any national securities exchange;
and
(f)
from
time to time such other information as Bank may reasonably request.
SECTION
4.4. COMPLIANCE.
Preserve and maintain all licenses, permits, governmental approvals, rights,
privileges and franchises necessary for the conduct of its business; and comply
with the provisions of all documents pursuant to which Borrower is organized
and/or which govern Borrower's continued existence and with the requirements
of
all laws, rules, regulations and orders of any governmental authority applicable
to Borrower and/or its business.
SECTION
4.5. INSURANCE.
Maintain and keep in force, for each business in which Borrower is engaged,
insurance of the types and in amounts customarily carried in similar lines
of
business, including but not limited to fire, extended coverage, public
liability, flood, property damage and workers' compensation, with all such
insurance carried with companies and in amounts satisfactory to Bank, and
deliver to Bank from time to time at Bank's request schedules setting forth
all
insurance then in effect.
SECTION
4.6. FACILITIES.
Keep all properties useful or necessary to Borrower's business in good repair
and condition, and from time to time make necessary repairs, renewals and
replacements thereto so that such properties shall be fully and efficiently
preserved and maintained.
SECTION
4.7. TAXES
AND
OTHER LIABILITIES. Pay and discharge when due any and all indebtedness,
obligations, assessments and taxes, both real or personal, including without
limitation federal and state income taxes and state and local property taxes
and
assessments, except such of the foregoing (a) as Borrower may in good faith
contest or as to which a bona fide dispute may arise, and (b) for which Borrower
has made provision, to Bank's satisfaction, for eventual payment thereof in
the
event Borrower is obligated to make such payment.
SECTION
4.8. LITIGATION.
Promptly give notice in writing to Bank of any litigation pending or threatened
against Borrower with a claim in excess of $500,000.00.
SECTION
4.9. FINANCIAL
CONDITION. Maintain Borrower's financial condition, determined on a consolidated
basis for Borrower and Parent, as follows using generally accepted accounting
principles consistently applied and used consistently with prior practices
(except to the extent modified by the definitions herein):
(a) Current
Ratio not less than 2.0 to 1.0 at each fiscal quarter end, with "Current Ratio"
defined as total current assets divided by the sum of (i) total current
liabilities plus (ii) 50% of the principal balance outstanding under the Line
of
Credit at such quarter end;
(b) Net
Worth
at each fiscal quarter end not less than the sum of (i) $67,000.00, plus (ii)
50% of cumulative quarterly net income (with no deduction for quarterly net
losses) realized since the date of this Agreement, plus (iii) 100% of the net
cash proceeds from the issuance of equity securities subsequent to the date
of
this Agreement, with "Net Worth" defined as total stockholders'
equity;
(c) Net
income after taxes not less than $1.00 on an annual basis, determined as of
each
fiscal year end; and
(d) Fixed
Charge Coverage Ratio not less than 1.20 to 1.0 as of each fiscal quarter end,
determined on a rolling 4-quarter basis, with “Fixed Charge Coverage Ratio”
defined as earnings for such period before deductions for interest expense,
taxes, depreciation and amortization expense, divided by the aggregate of
interest expense, income tax expense, scheduled amortization of long-term debt,
maintenance capital expenditures and dividends for such period (“maintenance
capital expenditures” shall mean investments required in property, plant and
equipment in the ordinary course of business to maintain Borrower’s operations).
For purposes of determining Borrower’s pro forma compliance with this covenant
in connection with any Permitted Acquisition under Section 5.3, and for purposes
of calculating Borrower’s compliance with this covenant subsequent to any
acquisition, (i) income statement items attributable to the person or entity
acquired shall, to the extent not otherwise included in such income statement
items for Parent, be included to the extent relating to any period applicable
in
such calculation, and (ii) to the extent that Parent or Borrower incurs
indebtedness in connection with such acquisition, such indebtedness shall be
deemed to have been incurred as of the first day of the applicable period for
purposes of determining interest expense for such period.
SECTION
4.10. NOTICE
TO
BANK. Promptly (but in no event more than five (5) days after the occurrence
of
each such event or matter) give written notice to Bank in reasonable detail
of:
(a) the occurrence of any Event of Default, or any condition, event or act
which with the giving of notice or the passage of time or both would constitute
an Event of Default; (b) any change in the name or the organizational
structure of Borrower; (c) the occurrence and nature of any Reportable
Event or Prohibited Transaction, each as defined in ERISA, or any funding
deficiency with respect to any Plan; or (d) any termination or cancellation
of any insurance policy which Borrower is required to maintain, or any uninsured
or partially uninsured loss through liability or property damage, or through
fire, theft or any other cause affecting Borrower's property in excess of an
aggregate of $500,000.00.
SECTION
4.11. DEPOSITORY
ACCOUNTS. Maintain its principal depository accounts with Bank.
ARTICLE
V
Borrower
further covenants that so long as Bank remains committed to extend credit to
Borrower pursuant hereto, or any liabilities (whether direct or contingent,
liquidated or unliquidated) of Borrower to Bank under any of the Loan Documents
remain outstanding, and until payment in full of all obligations of Borrower
subject hereto, Borrower will not, and will not permit Parent to, without Bank's
prior written consent:
SECTION
5.1. USE
OF
FUNDS. Use any of the proceeds of any credit extended hereunder except for
the
purposes stated in Article I hereof.
SECTION
5.2. OTHER
INDEBTEDNESS. Create, incur, assume or permit to exist any indebtedness or
liabilities resulting from borrowings, loans or advances, whether secured or
unsecured, matured or unmatured, liquidated or unliquidated, joint or several,
except the following permitted indebtedness (“Permitted
Indebtedness”):
(a) the
liabilities of Borrower to Bank;
(b) any
other
liabilities of Borrower and Parent existing as of the date hereof and disclosed
on Schedule
5.2
to this
Agreement;
(c) indebtedness
owed to trade creditors incurred in the ordinary course of business, to the
extent that such indebtedness is not overdue past the original due date by
more
than 90 days or such other terms as may be agreed upon between Borrower and
its
trade creditors; and
(d) indebtedness
arising after the date of this Agreement from capital leases or from purchase
money indebtedness provided that (i) Borrower shall maintain compliance with
the
financial covenants set forth in Section 4.9 and (ii) the aggregate outstanding
amount attributable to such capital leases and purchase money indebtedness
shall
not exceed $14,000,000.00 at any given time.
SECTION
5.3. MERGER,
CONSOLIDATION, TRANSFER OF ASSETS. Merge into or consolidate with any other
entity; make any substantial change in the nature of Borrower's business as
conducted as of the date hereof; acquire the stock of or all or substantially
all of the assets of any other entity except for Permitted Acquisitions and
such
other acquisitions as to which Bank shall grant its prior consent in writing
(which consent shall not be unreasonably withheld); nor sell, lease, transfer
or
otherwise dispose of all or a substantial or material portion of Borrower's
assets except in the ordinary course of its business or as disclosed on
Schedule
2.5.
“Permitted Acquisition” means any acquisition by Borrower or Parent of the stock
or substantially all of the assets of any other person provided
that:
(a) Borrower
demonstrates pro forma compliance with all terms and conditions of this
Agreement after giving effect to such acquisition;
(b) there
shall exist no Event of Default before or after giving effect to such
acquisition;
(c) the
acquired entity and/or the assets acquired shall be owned directly by Parent
or
a Borrower or shall become a wholly-owned subsidiary (direct or indirect) of
Parent or a Borrower and, at Bank’s election, shall execute a guaranty or a
joinder to this Agreement and any documents securing Borrower’s obligations to
Bank, in form and substance acceptable to Bank;
(d) the
purchase consideration for the acquisition, when combined with the purchase
consideration of all other acquisitions in any fiscal year, shall not exceed
$20,000,000.00; and
(e) at
least
15 days prior to the scheduled closing of the acquisition, Borrower shall
furnish Bank with such financial statements and other information relating
to
the entity to be acquired as Bank shall reasonably request.
SECTION
5.4. GUARANTIES.
Guarantee or become liable in any way as surety, endorser (other than as
endorser of negotiable instruments for deposit or collection in the ordinary
course of business), accommodation endorser or otherwise for, nor pledge or
hypothecate any assets of Borrower as security for, any liabilities or
obligations of any other person or entity, except any of the foregoing in favor
of Bank.
SECTION
5.5. LOANS,
ADVANCES, INVESTMENTS. Make any loans or advances to or investments in any
person or entity, except any of the foregoing which, in the aggregate, do not
exceed $1,000,000.00 outstanding at any given time.
SECTION
5.6. DIVIDENDS,
DISTRIBUTIONS. Declare or pay any dividend or distribution either in cash,
stock
or any other property on Parent’s stock or any other equity interest in Parent
now or hereafter outstanding, nor redeem, retire, repurchase or otherwise
acquire any shares of any class of Parent’s stock or any other equity interest
in Parent now or hereafter outstanding; provided, however, that Parent may
make
a dividend or distribution (hereafter, a “Distribution”) which is otherwise
prohibited herein if such Distribution will not result in any default under
any
of the financial covenants set forth in Section 4.9 of this
Agreement.
SECTION
5.7. PLEDGE
OF
ASSETS. Mortgage, pledge, grant or permit to exist a security interest in,
or
lien upon, all or any portion of Borrower's assets now owned or hereafter
acquired, except the following (each a “Permitted Lien”):
(a) the
existing security interests disclosed on Schedule
5.7
to this
Agreement;
(b) any
security interest or lien in favor of Bank;
(c) liens
for
taxes, assessments or governmental charges which are not delinquent or which
are
being diligently contested in good faith and by appropriate proceedings and
for
which adequate book reserves in accordance with generally accepted accounting
principles are maintained;
(d) liens
arising out of deposits in connection with workers’ compensation insurance,
unemployment insurance, old age pensions, or other social security or retirement
benefits legislation;
(e) deposits
or pledges to secure bids, tenders, contracts, leases, statutory obligations,
surety and appeal bonds, and other obligations of like nature arising in the
ordinary course of business;
(f) liens
imposed by any law, such as mechanics’, worker’s, materalmen’s, landlords’,
carriers’, or other like security interests arising in the ordinary course of
business which secure payment of obligations which are not past due or which
are
being diligently contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with generally accepted accounting
principles are maintained; and
(g) purchase
money security interests securing purchase money indebtedness of Borrower to
the
extent permitted in Section 5.2(d).
ARTICLE
VI
SECTION
6.1. The
occurrence of any of the following shall constitute an "Event of Default" under
this Agreement:
(a) Borrower
shall fail to pay when due any principal or interest payable under any of the
Loan Documents;
(b) Borrower
shall fail to pay any agreed-upon fees or other amounts payable under any of
the
Loan Documents within ten (10) days of the date when due;
(c) Any
financial statement or certificate furnished to Bank in connection with, or
any
representation or warranty made by Borrower or any other party under this
Agreement or any other Loan Document shall prove to be incorrect, false or
misleading in any material respect when furnished or made;
(d) Any
default in the performance of or compliance with any obligation, agreement
or
other provision contained herein or in any other Loan Document (other than
those
referred to in subsections (a) or (b) above), and with respect to any such
default which by its nature can be cured, such default shall continue for a
period of twenty (20) days from its occurrence;
(e) Any
default in the payment or performance of any obligation, or any defined event
of
default, under the terms of any contract or instrument (other than any of the
Loan Documents) pursuant to which Borrower, any guarantor hereunder or any
general partner or joint venturer in Borrower if a partnership or joint venture
(with each such guarantor, general partner and/or joint venturer referred to
herein as a "Third Party Obligor") has incurred any debt or other liability
to
any person or entity, including Bank;
(f) The
filing of a notice of judgment lien against Borrower or any Third Party Obligor,
or the recording of any abstract of judgment against Borrower or any Third
Party
Obligor in any county in which Borrower or such Third Party Obligor has an
interest in real property, or the entry of a judgment against Borrower or any
Third Party Obligor, which in any instance of the foregoing, involves an order
for the payment of money in excess of $750,000 and which remains unsatisfied
and
in effect for a period of 30 consecutive days without a stay of execution;
or
the service of a notice of levy and/or a writ of attachment or execution, or
other like process, against the assets of Borrower or any Third Party
Obligor.
(g) Borrower
or any Third Party Obligor shall become insolvent, or shall suffer or consent
to
or apply for the appointment of a receiver, trustee, custodian or liquidator
of
itself or any of its property, or shall generally fail to pay its debts as
they
become due, or shall make a general assignment for the benefit of creditors;
Borrower or any Third Party Obligor shall file a voluntary petition in
bankruptcy, or seeking reorganization, in order to effect a plan or other
arrangement with creditors or any other relief under the Bankruptcy Reform
Act,
Title 11 of the United States Code, as amended or recodified from time to time
("Bankruptcy Code"), or under any state or federal law granting relief to
debtors, whether now or hereafter in effect; or any involuntary petition or
proceeding pursuant to the Bankruptcy Code or any other applicable state or
federal law relating to bankruptcy, reorganization or other relief for debtors
is filed or commenced against Borrower or any Third Party Obligor and
such
proceeding or petition shall continue undismissed for sixty (60) consecutive
days,
or
Borrower or any Third Party Obligor shall file an answer admitting the
jurisdiction of the court and the material allegations of any involuntary
petition; or Borrower or any Third Party Obligor shall be adjudicated a
bankrupt, or an order for relief shall be entered against Borrower or any Third
Party Obligor by any court of competent jurisdiction under the Bankruptcy Code
or any other applicable state or federal law relating to bankruptcy,
reorganization or other relief for debtors and
any
order or decree approving or ordering any of the foregoing shall continue
unstayed and in effect for sixty (60) consecutive days;
(h) The
dissolution or liquidation of Borrower or any Third Party Obligor if a
corporation, partnership, joint venture or other type of entity; or Borrower
or
any such Third Party Obligor, or any of its directors, stockholders or members,
shall take action seeking to effect the dissolution or liquidation of Borrower
or such Third Party Obligor; or
(i) A
Change
of Control shall occur, with “Change of Control” meaning the occurrence of any
of the following events:
(A) any
Borrower ceases to be wholly-owned by Parent;
(B) any
person, entity or “group” (as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934; a “Person”) who is not an owner on the date
of this Agreement is or becomes the “beneficial owner” (as defined in Rules
13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a Person
will be deemed to have “beneficial ownership” of all securities that such Person
has the right to acquire, whether such right is exercisable immediately or
only
after the passage of time), directly or indirectly, of more than forty percent
(40%) of the voting power of all classes of owners of the Parent;
(C) during
any consecutive two-year period, individuals who at the beginning of such period
constituted the board of directors of the Parent (together with any new
directors whose election to such board of directors, or whose nomination for
election by the owners of the Parent, was approved by a vote of two thirds
of
the directors then still in office who were either directors at the beginning
of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the board of
directors of the Parent then in office;
or
(D) Xxxxxx
X.
Xxxx shall cease to actively manage the Borrower’s day-to-day business
activities and a successor reasonably acceptable to the Bank shall not have
been
appointed within 120 days thereafter.
SECTION
6.2. REMEDIES.
Upon the occurrence of any Event of Default: (a) all indebtedness of
Borrower under each of the Loan Documents, any term thereof to the contrary
notwithstanding, shall at Bank's option and without notice become immediately
due and payable without presentment, demand, protest or notice of dishonor,
all
of which are hereby expressly waived by Borrower; (b) the obligation, if
any, of Bank to extend any further credit under any of the Loan Documents shall
immediately cease and terminate; and (c) Bank shall have all rights, powers
and remedies available under each of the Loan Documents, or accorded by law,
including without limitation the right to resort to any or all security for
any
credit subject hereto and to exercise any or all of the rights of a beneficiary
or secured party pursuant to applicable law. All rights, powers and remedies
of
Bank may be exercised at any time by Bank and from time to time after the
occurrence of an Event of Default, are cumulative and not exclusive, and shall
be in addition to any other rights, powers or remedies provided by law or
equity.
ARTICLE
VII
SECTION
7.1. NO
WAIVER. No delay, failure or discontinuance of Bank in exercising any right,
power or remedy under any of the Loan Documents shall affect or operate as
a
waiver of such right, power or remedy; nor shall any single or partial exercise
of any such right, power or remedy preclude, waive or otherwise affect any
other
or further exercise thereof or the exercise of any other right, power or remedy.
Any waiver, permit, consent or approval of any kind by Bank of any breach of
or
default under any of the Loan Documents must be in writing and shall be
effective only to the extent set forth in such writing.
SECTION
7.2. NOTICES.
All notices, requests and demands which any party is required or may desire
to
give to any other party under any provision of this Agreement must be in writing
delivered to each party at the following address:
BORROWER:
c/o
LMI
Aerospace, Inc.
0000
Xxxxxxx Xxxx
Xx.
Xxxxxxx, XX 00000
Attention:
Chief Financial Officer
BANK:
XXXXX
FARGO BANK, NATIONAL ASSOCIATION
000
X. Xxxxxx Xxxx
Xxxxx
0000
Xxxxxxx,
XX 00000
or
to
such other address as any party may designate by written notice to all other
parties. Each such notice, request and demand shall be deemed given or made
as
follows: (a) if sent by hand delivery, upon delivery; (b) if sent by
mail, upon the earlier of the date of receipt or three (3) days after deposit
in
the U.S. mail, first class and postage prepaid; and (c) if sent by
telecopy, upon receipt.
SECTION
7.3. COSTS,
EXPENSES AND ATTORNEYS' FEES. Borrower shall pay to Bank immediately upon demand
the full amount of all payments, advances, charges, costs and expenses,
including reasonable attorneys' fees (to include outside counsel fees and all
allocated costs of Bank's in-house counsel), expended or incurred by Bank in
connection with (a) the negotiation and preparation of this Agreement and
the other Loan Documents, Bank's continued administration hereof and thereof,
and the preparation of any amendments and waivers hereto and thereto,
(b) the enforcement of Bank's rights and/or the collection of any amounts
which become due to Bank under any of the Loan Documents, whether or not suit
is
brought, and (c) the prosecution or defense of any action in any way
related to any of the Loan Documents, including without limitation, any action
for declaratory relief, whether incurred at the trial or appellate level, in
an
arbitration proceeding or otherwise, and including any of the foregoing incurred
in connection with any bankruptcy proceeding (including without limitation,
any
adversary proceeding, contested matter or motion brought by Bank or any other
person) relating to Borrower or any other person or entity.
SECTION
7.4. SUCCESSORS,
ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of
the
heirs, executors, administrators, legal representatives, successors and assigns
of the parties; provided however, that Borrower may not assign or transfer
its
interests or rights hereunder without Bank's prior written consent. Bank
reserves the right to sell, assign, transfer, negotiate or grant participations
in all or any part of, or any interest in, Bank's rights and benefits under
each
of the Loan Documents. In connection therewith, Bank may disclose all documents
and information which Bank now has or may hereafter acquire relating to any
credit subject hereto, Borrower or its business, any guarantor hereunder or
the
business of such guarantor, or any collateral required hereunder.
SECTION
7.5. ENTIRE
AGREEMENT; AMENDMENT. This Agreement and the other Loan Documents constitute
the
entire agreement between Borrower and Bank with respect to each credit subject
hereto and supersede all prior negotiations, communications, discussions and
correspondence concerning the subject matter hereof. This Agreement may be
amended or modified only in writing signed by each party hereto.
SECTION
7.6. NO
THIRD
PARTY BENEFICIARIES. This Agreement is made and entered into for the sole
protection and benefit of the parties hereto and their respective permitted
successors and assigns, and no other person or entity shall be a third party
beneficiary of, or have any direct or indirect cause of action- or claim in
connection with, this Agreement or any other of the Loan Documents to which
it
is not a party.
SECTION
7.7. TIME.
Time is of the essence of each and every provision of this Agreement and each
other of the Loan Documents.
SECTION
7.8. SEVERABILITY
OF PROVISIONS. If any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity without invalidating the remainder
of
such provision or any remaining provisions of this Agreement.
SECTION
7.9. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of which
when
executed and delivered shall be deemed to be an original, and all of which
when
taken together shall constitute one and the same Agreement.
SECTION
7.10. GOVERNING
LAW. This Agreement shall be governed by and construed in accordance with the
laws of the State of Missouri.
SECTION
7.11. BORROWING
AGENCY; JOINT AND SEVERAL LIABILITY.
(a) Each
Borrower hereby irrevocably designates Parent, acting through its duly
authorized officers, to be its attorney and agent and in such capacity to have
the authority to borrow, sign and endorse notes, and execute and deliver all
instruments, documents, writings and further assurances now or hereafter
required hereunder, on behalf of such Borrower or Borrowers, and hereby
authorizes Bank to pay over or credit all loan proceeds and payments hereunder
in accordance with the request of Parent.
(b) Each
Borrower has determined and represents to Bank that it is in its best interests
and in pursuance of its legitimate business purposes to induce Bank to extend
credit pursuant to this Agreement. Each Borrower acknowledges and represents
that its business is related to the business of the other Borrowers, the
availability of the commitments provided herein benefits all Borrowers, and
advances and other credit extensions made hereunder will inure to the benefit
of
Borrowers, individually and as a group.
(c) Each
Borrower has determined and represents to Bank that it has, and after giving
effect to the transactions contemplated by this Agreement will have, assets
having a fair saleable value in excess of its debts, after giving effect to
any
rights of contribution or subrogation that may be available to such Borrower,
and each Borrower has, and will have, access to adequate capital for the conduct
of its business and the ability to pay its debts as such debts
mature.
(d) Each
Borrower agrees that it is jointly and severally liable to Bank for, and each
Borrower agrees to pay to Bank when due the full amount of, all indebtedness
now
existing or hereafter arising to Bank under or in connection with this Agreement
and all modifications, extensions and renewals thereof, including without
limitation all advances disbursed to any Borrower under the Line of Credit,
all
interest which accrues thereon and all fees, costs and expenses chargeable
to
Borrowers or any of them in connection therewith.
(e) The
liability of each Borrower shall be reinstated and revived and the rights of
Bank shall continue if and to the extent that for any reason any amount at
any
time paid on account of any of the obligations of the Borrowers is rescinded
or
must otherwise be restored by Bank, whether as a result of any proceedings
in
bankruptcy or reorganization or otherwise, all as though such amount had not
been paid.
(f) Each
Borrower authorizes Bank, without notice to or demand on such Borrower, and
without affecting such Borrower's liability hereunder, from time to time to:
(i)
alter, compromise, extend, accelerate or otherwise change the time for payment
of, or otherwise change the terms of, the liabilities and obligations of any
other Borrower to Bank on account of any liability; (ii) take and hold security
from any other Borrower for the payment of any liability, and exchange, enforce,
waive, subordinate or release any such security; (iii) apply such security
and
direct the order or manner of sale thereof, including without limitation, a
non-judicial sale permitted by the terms of the controlling security agreement
or deed of trust, as Bank in its discretion may determine; (iv) release or
substitute anyone or more of the endorsers or any guarantors of any liability,
or any other party obligated thereon; and (e) apply payments received by Bank
from any other Borrower to indebtedness of such other Borrower to Bank other
than the Line of Credit.
(g) Each
Borrower represents and warrants to Bank that it has established adequate means
of obtaining from all other Borrowers on a continuing basis financial and other
information pertaining to such Borrowers' financial condition, and each Borrower
agrees to keep adequately informed from such means of any facts, events or
circumstances which might in any way affect its risks hereunder. Each Borrower
further agrees that Bank shall have no obligation to disclose to it any
information or material about any other Borrower that is acquired by Bank in
any
manner.
(h) Each
Borrower waives any right to require Bank to: (i) proceed against any other
Borrower or any other person; (ii) marshal assets or proceed against or exhaust
any security held from any of the Borrowers or any other person; (iii) take
any
action or pursue any other remedy in Bank's power; or (iv) make any presentment
or demand for performance, or give any notices of any kind, including without
limitation, any notice of nonperformance, protest, notice of protest, notice
of
dishonor, notice of intention to accelerate or notice of acceleration hereunder
or in connection with any obligations or evidences of indebtedness held by
Bank
as security for or which constitute in whole or in part the liabilities subject
hereto, or in connection with the creation of new or additional
liabilities.
(i) Each
Borrower waives any defense to its obligations hereunder based upon or arising
by reason of: (i) any disability or other defense of any of the Borrowers or
any
other person; (ii) the cessation or limitation from any cause whatsoever, other
than payment in full, of the liabilities, of any of the Borrowers or any other
person; (iii) any lack of authority of any officer, director, partner, agent
or
any other person acting or purporting to act on behalf of any of the Borrowers
which is a trust, corporation, partnership or other type of entity, or any
defect in the formation of any such Borrower; (iv) the application by any of
the
Borrowers of the proceeds of any advance for purposes other than the purposes
represented by Borrowers to, or intended or understood by, Bank or Borrower;
(v)
any act or omission by Bank which directly or indirectly results in or aids
the
discharge of any of the Borrowers or any portion of the liabilities by operation
of law or otherwise, or which in any way impairs or suspends any rights or
remedies of Bank against any of the Borrowers; (vi) any impairment of the value
of any interest in any security for the liabilities or any portion thereof,
including without limitation, the failure to obtain or maintain perfection
or
recordation of any interest in any such security, the release of any such
security without substitution, and/or the failure to preserve the value of,
or
to comply with applicable law in disposing of, any such security; or (vii)
any
modification of the liabilities, in any form whatsoever, including any
modification made after revocation hereof to any liability incurred prior to
such revocation, and including without limitation the renewal, extension,
acceleration or other change in time for payment of, or other change in the
terms of, the liabilities or any portion thereof, including increase or decrease
of the rate of interest thereon. Until all liabilities shall have been paid
in
full, no Borrower shall have any right of subrogation, and each Borrower waives
any right to enforce any remedy which Bank now has or may hereafter have against
any of the Borrowers or any other person, and waives any benefit of, or any
right to participate in, any security now or hereafter held by Bank. Each
Borrower further waives all rights and defenses such Borrower may have arising
out of (A) any election of remedies by Bank, even though that election of
remedies, such as a non--judicial foreclosure with respect to any security
for
any portion of the liabilities, destroys its rights of subrogation or its rights
to proceed against any other Borrower for reimbursement, or (B) any loss of
rights Borrower may suffer by reason of any rights, powers or remedies of any
of
other Borrower in connection with any anti-deficiency laws or any other laws
limiting, qualifying or discharging any Borrower's indebtedness, whether by
operation of law or otherwise, including any rights Borrower may have to a
fair
market value hearing to determine the size of a deficiency following any
trustee’s foreclosure sale or other disposition of any real property security
for any portion of the liabilities.
(j) Each
Borrower further waives (i) each and every right to which it may be entitled
by
virtue of any suretyship law, and (ii) without limiting any of the waivers
set
forth herein, any other fact or event that, in the absence of this provision,
would or might constitute or afford a legal or equitable discharge or release
of
or defense to such Borrower.
(k) If
any of
the waivers herein is determined to be contrary to any applicable law or public
policy, such waiver shall be effective only to the extent permitted by
law.
(l) It
is the
position of the Borrowers that each Borrower benefits from the loans that have
been made available by Bank under this Agreement and from each extension of
credit thereunder, regardless of whether such credit is disbursed to a joint
account of Borrowers or to or for the account of any Borrower.
SECTION
7.12. ARBITRATION.
(a) Arbitration.
The
parties hereto agree, upon demand by any party, to submit to binding arbitration
all claims, disputes and controversies between or among them (and their
respective employees, officers, directors, attorneys, and other agents), whether
in tort, contract or otherwise in any way arising out of or relating to (i)
any
credit subject hereto, or any of the Loan Documents, and their negotiation,
execution, collateralization, administration, repayment, modification,
extension, substitution, formation, inducement, enforcement, default or
termination; or (ii) requests for additional credit.
(b) Governing
Rules.
Any
arbitration proceeding will (i) proceed in a location in Missouri selected
by
the American Arbitration Association (“AAA”); (ii) be governed by the Federal
Arbitration Act (Title 9 of the United States Code), notwithstanding any
conflicting choice of law provision in any of the documents between the parties;
and (iii) be conducted by the AAA, or such other administrator as the parties
shall mutually agree upon, in accordance with the AAA’s commercial dispute
resolution procedures, unless the claim or counterclaim is at least
$1,000,000.00 exclusive of claimed interest, arbitration fees and costs in
which
case the arbitration shall be conducted in accordance with the AAA’s optional
procedures for large, complex commercial disputes (the commercial dispute
resolution procedures or the optional procedures for large, complex commercial
disputes to be referred to herein, as applicable, as the “Rules”). If there is
any inconsistency between the terms hereof and the Rules, the terms and
procedures set forth herein shall control. Any party who fails or refuses to
submit to arbitration following a demand by any other party shall bear all
costs
and expenses incurred by such other party in compelling arbitration of any
dispute. Nothing contained herein shall be deemed to be a waiver by any party
that is a bank of the protections afforded to it under 12 U.S.C. §91 or any
similar applicable state law.
(c) No
Waiver of Provisional Remedies, Self-Help and Foreclosure.
The
arbitration requirement does not limit the right of any party to (i) foreclose
against real or personal property collateral; (ii) exercise self-help remedies
relating to collateral or proceeds of collateral such as setoff or repossession;
or (iii) obtain provisional or ancillary remedies such as replevin, injunctive
relief, attachment or the appointment of a receiver, before during or after
the
pendency of any arbitration proceeding. This exclusion does not constitute
a
waiver of the right or obligation of any party to submit any dispute to
arbitration or reference hereunder, including those arising from the exercise
of
the actions detailed in sections (i), (ii) and (iii) of this
paragraph.
(d) Arbitrator
Qualifications and Powers.
Any
arbitration proceeding in which the amount in controversy is $5,000,000.00
or
less will be decided by a single arbitrator selected according to the Rules,
and
who shall not render an award of greater than $5,000,000.00. Any dispute in
which the amount in controversy exceeds $5,000,000.00 shall be decided by
majority vote of a panel of three arbitrators; provided however, that all three
arbitrators must actively participate in all hearings and deliberations. The
arbitrator will be a neutral attorney licensed in the State of Missouri or
a
neutral retired judge of the state or federal judiciary of Missouri , in either
case with a minimum of ten years experience in the substantive law applicable
to
the subject matter of the dispute to be arbitrated. The arbitrator will
determine whether or not an issue is arbitratable and will give effect to the
statutes of limitation in determining any claim. In any arbitration proceeding
the arbitrator will decide (by documents only or with a hearing at the
arbitrator's discretion) any pre-hearing motions which are similar to motions
to
dismiss for failure to state a claim or motions for summary adjudication. The
arbitrator shall resolve all disputes in accordance with the substantive law
of
Missouri and may grant any remedy or relief that a court of such state could
order or grant within the scope hereof and such ancillary relief as is necessary
to make effective any award. The arbitrator shall also have the power to award
recovery of all costs and fees, to impose sanctions and to take such other
action as the arbitrator deems necessary to the same extent a judge could
pursuant to the Federal Rules of Civil Procedure, the Missouri Rules of Civil
Procedure or other applicable law. Judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction. The institution
and
maintenance of an action for judicial relief or pursuit of a provisional or
ancillary remedy shall not constitute a waiver of the right of any party,
including the plaintiff, to submit the controversy or claim to arbitration
if
any other party contests such action for judicial relief.
(e) Discovery.
In any
arbitration proceeding, discovery will be permitted in accordance with the
Rules. All discovery shall be expressly limited to matters directly relevant
to
the dispute being arbitrated and must be completed no later than 20 days before
the hearing date. Any requests for an extension of the discovery periods, or
any
discovery disputes, will be subject to final determination by the arbitrator
upon a showing that the request for discovery is essential for the party's
presentation and that no alternative means for obtaining information is
available.
(f) Class
Proceedings and Consolidations.
No
party hereto shall be entitled to join or consolidate disputes by or against
others in any arbitration, except parties who have executed any Loan Document,
or to include in any arbitration any dispute as a representative or member
of a
class, or to act in any arbitration in the interest of the general public or
in
a private attorney general capacity.
(g) Payment
Of Arbitration Costs And Fees.
The
arbitrator shall award all costs and expenses of the arbitration
proceeding.
(h) Miscellaneous.
To the
maximum extent practicable, the AAA, the arbitrators and the parties shall
take
all action required to conclude any arbitration proceeding within 180 days
of
the filing of the dispute with the AAA. No arbitrator or other party to an
arbitration proceeding may disclose the existence, content or results thereof,
except for disclosures of information by a party required in the ordinary course
of its business or by applicable law or regulation. If more than one agreement
for arbitration by or between the parties potentially applies to a dispute,
the
arbitration provision most directly related to the Loan Documents or the subject
matter of the dispute shall control. This arbitration provision shall survive
termination, amendment or expiration of any of the Loan Documents or any
relationship between
the parties.
ORAL
AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM
ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT
ARE NOT ENFORCEABLE, REGARDLESS OF THE LEGAL THEORY UPON WHICH IT IS BASED
THAT
IS IN ANY WAY RELATED TO THE CREDIT AGREEMENT. TO PROTECT YOU (BORROWER(S))
AND
US (CREDITOR) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH
COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE
AND
EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE
IN
WRITING TO MODIFY IT.
XXXXXXX’X
METAL, INC.
By:
/s/ Xxxxxxxx X. Xxxxxxxxx
Title:
Vice President, Chief Financial Officer
and
Secretary
|
XXXXX
FARGO BANK, NATIONAL ASSOCIATION
By:
/s/ Xxxx X. Xxxxxx
Title:
Vice President
|
LMI
FINISHING, INC.
By:
/s/ Xxxxxxxx X. Xxxxxxxxx
Title:
Vice President, Chief Financial Officer
and
Secretary
|
|
TEMPCO
ENGINEERING, INC.
By:
/s/ Xxxxxxxx X. Xxxxxxxxx
Title:
Vice President, Chief Financial Officer
and
Secretary
|
|
VERSAFORM
CORP.
By:
/s/ Xxxxxxxx X. Xxxxxxxxx
Title:
Vice President, Chief Financial Officer
and
Secretary
|
|
PRECISE
MACHINE PARTNERS, LLP
By:
PRECISE MACHINE COMPANY
|
|
By:
/s/ Xxxxxxxx X. Xxxxxxxxx
Xxxxxxxx
X. Xxxxxxxxx, Secretary
BEING
THE MANAGING PARTNER OF
PRECISE
MACHINE PARTNERS, LLP
|
|
LMI-TCA,
INC.
By:
/s/ Xxxxxxxx X. Xxxxxxxxx
Title:
Vice President, Chief Financial Officer
and
Secretary
|