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EXHIBIT 99.3
LOAN AGREEMENT
THIS LOAN AGREEMENT is dated as of September 24, 1995 and entered into by
and between FirstMiss Gold Inc., a Nevada corporation ("Borrower") and First
Mississippi Corporation, a Mississippi corporation ("Lender"). All capitalized
terms used herein and not elsewhere defined herein are defined in Section 1 of
this Agreement.
WHEREAS, Lender has previously extended credit to Borrower in the form of
cash advances in the aggregate amount of $__________________; and
WHEREAS, Borrower and Lender wish to formalize the repayment terms of
such previous advances by Lender to Borrower and Lender has agreed to permit
Borrower to repay such advances over time, subject to the terms and conditions
of this Agreement;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Borrower and Lender agree as
follows:
SECTION 1 DEFINITIONS
1.1 Certain Defined Terms. The following terms used in this Agreement shall
have the following meanings:
"Affiliate" means any Person (other than Lender): (a) directly or
indirectly controlling, controlled by, or under common control with, Borrower;
(b) directly or indirectly owning or holding five percent (5%) or more of any
equity interest in Borrower; or (c) five percent (5%) or more of whose voting
stock or other equity interest is directly or indirectly owned or held by
Borrower. For purposes of this definition, "control" (including with
correlative meanings, the terms "controlling", "controlled by" and "under
common control with") means the possession directly or indirectly of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities or by contract or otherwise.
"Amended Tax Sharing Agreement" means the Amended Tax Sharing Agreement
between Lender and Borrower of even date herewith, as it may be amended from
time to time.
"Applicable Margin" shall mean for any fiscal quarter of Borrower the
percentage determined for such quarter as set forth below based upon Borrower's
Leverage Ratio for such quarter. For each fiscal quarter of Borrower, the
Applicable Margin shall be added to the LIBOR Rate to determine the interest
rate on the Note for such quarter.
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Leverage Ratio Applicable Margin
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greater than or equal to 0.75 1.0%
greater than or equal to
0.50 and less than 0.75 0.75%
less than 0.50 0.625%
"Agreement" means this Loan Agreement as it may be amended, supplemented
or otherwise modified from time to time.
"Borrower" has the meaning assigned to that term in the preamble to this
Agreement.
"Business Day" means any day excluding Saturday, Sunday and any day which
is a legal holiday under the laws of the State of Mississippi or is a day on
which banking institutions located in such state are closed.
"Change of Control" shall be deemed to have occurred if any Person or
related group of Persons shall acquire, directly or indirectly, ownership or
control of more than twenty percent (20%) of the voting securities of Borrower.
"Consolidated" refers to the consolidation of accounts in accordance with
GAAP.
"Default" means a condition or event that, after notice or lapse of time
or both, would constitute an Event of Default if that condition or event were
not cured or removed within any applicable grace or cure period.
"Employee Benefit Plan" means any employee benefit plan within the
meaning of Section 3(3) of ERISA which (a) is maintained for employees of any
Loan Party or any ERISA Affiliate or (b) has at any time within the preceding
six years been maintained for the employees of any Loan Party or any current or
former ERISA Affiliate.
"Environmental Laws" means any federal, state or local law, rule,
regulation or order relating to pollution, waste, disposal, industrial hygiene,
land use or the protection of human health, safety or welfare, plant life or
animal life, natural resources, the environment or property.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute and all rules and
regulations promulgated thereunder.
"ERISA Affiliate", as applied to any Loan Party, means any Person who is
a member of a group which is under common control with any Loan Party, who
together with any Loan
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Party is treated as a single employer within the meaning of Section 414(b) and
(c) of the IRC.
"Event of Default" means each of the events set forth in Section 7.1.
"Fiscal Year" means for any fiscal year of Borrower ending on or before
June 30, 1995, each twelve-month period ending on the last day of June, and for
any fiscal year of Borrower ending after June 30, 1995, each period
constituting such fiscal year as determined by Borrower.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board that are applicable to the
circumstances as of the date of determination.
"Hazardous Material" means all or any of the following: (a) substances
that are defined or listed in, or otherwise classified pursuant to, any
applicable laws or regulations as "hazardous substances", "hazardous
materials", "hazardous wastes", "toxic substances" or any other formulation
intended to define, list or classify substances by reason of deleterious
properties such as ignitability, corrosivity, reactivity, carcinogenicity,
reproductive toxicity or "EP toxicity"; (b) oil, petroleum or petroleum derived
substances, natural gas, natural gas liquids or synthetic gas and drilling
fluids, produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal resources;
(c) any flammable substances or explosives or any radioactive materials; and
(d) asbestos in any form or electrical equipment which contains any oil or
dielectric fluid containing levels of polychlorinated biphenyls in excess of
fifty parts per million.
"Indebtedness", as applied to any Person, means: (a) all indebtedness for
borrowed money; (b) obligations under leases which in accordance with GAAP
constitute capital leases; (c) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed
money; (d) any obligation owed for all or any part of the deferred purchase
price of property or services if the purchase price is due more than six months
from the date the obligation is incurred or is evidenced by a note or similar
written instrument; and (e) all indebtedness secured by any Lien on any
property or asset owned or held by that Person regardless of whether the
indebtedness secured thereby shall have been assumed by that Person or is
nonrecourse to the credit of that Person.
"Intangible Assets" means the amount of Borrower's intangible assets
(determined in conformity with GAAP) including, without limitation, goodwill,
trademarks, tradenames, licenses, organizational costs, deferred amounts,
covenants not to compete, unearned income and restricted funds.
"Interest Period" shall have the meaning set forth in Section 2.2(B).
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"IRC" means the Internal Revenue Code of 1986.
"Lender" has the meaning assigned to that term in the preamble to this
Agreement.
"Lender Account" shall have the meaning set forth in Section 2.3(A).
"Leverage Ratio" means, for any fiscal quarter of Borrower, the result
obtained by dividing (i) Indebtedness of Borrower as of the end of Borrower's
prior fiscal quarter by (ii) Net Worth as of the end of such prior fiscal
quarter, all as determined based upon Borrower's financial statements for such
prior fiscal quarter.
"Liabilities" shall have the meaning given that term in accordance with
GAAP and shall include Indebtedness.
"LIBOR" as of any date of determination means for any period the offered
rate for deposits in United States dollars in the London Interbank Market at
approximately 11:00 a.m. (London time), which appears on the Telerate Service
on such date or, if such rate is not available on such date, the next preceding
day on which banking institutions are open for business in London, or if such
service is not available, "LIBOR" as of any date of determination means for any
period the London Interbank Offered Rates for deposits in United States dollars
for such period as published on such date in the "MONEY RATES" column of The
Wall Street Journal, regardless of the stated effective date thereof, or if
such rates are not so published on such date, on the next preceding date on
which they are so published. In the event The Wall Street Journal ceases to
publish London Interbank Offered Rates for deposits in United States dollars,
Lender and Borrower may obtain such rates from another reliable publication or
source.
"LIBOR Rate" means LIBOR for the Interest Period selected from time to
time by Borrower pursuant to Section 2.2(B).
"LIBOR Rate Notice" shall have the meaning set forth in Section 2.2(C).
"Lien" means any lien, mortgage, pledge, security interest, charge or
encumbrance of any kind, whether voluntary or involuntary (including any
conditional sale or other title retention agreement, any lease in the nature
thereof, and any agreement to give any security interest).
"Loan" means the amount advanced under the Term Loan.
"Loan Documents" means this Agreement, the Note and all other
instruments, documents and agreements executed by or on behalf of any Loan
Party and delivered concurrently herewith or at any time hereafter to or for
Lender in connection with the Loan and other transactions contemplated by this
Agreement, all as amended, supplemented or modified from time to time.
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"Loan Party" means Borrower, Borrower's Subsidiaries or any other Person
(other than Lender) which is or becomes a party to any Loan Document.
"Loan Parties" means Borrower, Borrower's Subsidiaries and any other Loan
Parties, taken as a whole.
"Material Adverse Effect" means (a) a material adverse effect upon the
business, operations, properties, assets or condition (financial or otherwise)
of the Loan Parties or (b) the impairment of the ability of the Loan Parties to
perform its obligations under any Loan Document to which it is a party or of
Lender to enforce or collect any of the Obligations.
"Net Worth" means, as of any date, the sum of the capital stock and
additional paid-in capital plus retained earnings (or minus accumulated
deficit) of Borrower on a consolidated basis calculated in conformity with
GAAP.
"Note" means the Term Note.
"Obligations" means all obligations, liabilities and indebtedness of
every nature of each Loan Party from time to time owed to Lender under the Loan
Documents including the principal amount of all debts, claims and indebtedness,
accrued and unpaid interest and all fees, costs and expenses, whether primary,
secondary, direct, contingent, fixed or otherwise, heretofore, now and/or from
time to time hereafter owing, due or payable.
"Permitted Encumbrances" means the following types of Liens: (a) Liens
for taxes, assessments or other governmental charges not yet due and payable or
being contested in good faith; (b) statutory Liens of landlords, carriers,
warehousemen, mechanics, materialmen and other similar liens imposed by law,
which are incurred in the ordinary course of business, including capital
improvements and mine developments, for sums not more than thirty (30) days
delinquent; (c) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance and
other types of social security, statutory obligations, surety and appeal bonds,
bids, leases, government contracts, trade contracts, performance and
return-of-money bonds and other similar obligations (exclusive of obligations
for the payment of borrowed money); (d) easements, rights-of-way, restrictions,
and other similar charges or encumbrances not interfering in any material
respect with the ordinary conduct of the business of the Loan Parties; (e)
Liens in favor of Lender; (f) existing Liens of Borrower set forth on Schedule
1.1(B); (g) Liens created to secure Indebtedness in an aggregate amount not in
excess of $5,000,000; and (h) Liens created to secure Indebtedness incurred to
finance the cost of acquisition, construction or improvement of property owned
or acquired by, or working capital for, Borrower or its Subsidiaries.
"Person" means and includes natural persons, corporations, limited
partnerships, general partnerships, joint stock companies, joint ventures,
associations, companies, trusts, banks, trust companies, land trusts, business
trusts or other organizations, whether or not legal entities, and governments
and agencies and political subdivisions thereof.
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"Prime Rate" as of any date means the Prime Rate as published on such
date in the "MONEY RATES" column of The Wall Street Journal, regardless of the
stated effective date thereof. If a range of rates is so published, the "Prime
Rate" shall be the arithmetic mean of the highest and lowest of such rates.
The Prime Rate initially shall be established on the date hereof and shall be
adjusted on the first business day of each month hereafter, except that if The
Wall Street Journal is not published on such business day, then the Prime Rate
shall be adjusted on the next business day on which The Wall Street Journal is
published. In the event The Wall Street Journal ceases to publish the Prime
Rate, Lender may designate the "prime rate", "reference rate", "base rate", or
other similar rate of a commercial banking institution selected by Lender and
reasonably acceptable to Borrower as the "Prime Rate" under this Agreement.
"Public Offering" means a public offering of Common Stock of Borrower
pursuant to a registration statement that has been declared effective by the
U.S. Securities and Exchange Commission pursuant to the Securities Act, other
than an offering utilizing Form S-4 or S-8 or any successor form.
"Securities Act" means the Securities Act of 1933.
"Securities Exchange Act" means the Securities Exchange Act of 1934.
"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of stock (or equivalent ownership or controlling interest)
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof.
"Tangible Net Worth" means an amount equal to: (a) Borrower's Net Worth;
plus (b) the amount of any Indebtedness owing to any Person by Borrower which
is subordinated to Lender; less (c) Borrower's Intangible Assets; less (d)
Borrower's prepaid expenses; less (e) all obligations owed to Borrower or any
of its Subsidiaries by any Affiliate of Borrower or any of its Subsidiaries;
and less (f) all loans by Borrower to officers, stockholders or employees of
Borrower.
"Tax Ruling Agreement" means that certain Tax Ruling Agreement, of even
date herewith, by and between Lender and Borrower.
"Term Loan" means the advances previously made by Lender to Borrower in
the aggregate amount of $________________.
"Term Note" means the promissory note of Borrower, in substantially the
form of Exhibit A, issued pursuant to Section 2.1(B).
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"Termination Date" means the date this Agreement is terminated as set
forth in Section 2.4.
1.2 Accounting Terms. For purposes of this Agreement, all accounting terms
not otherwise defined herein shall have the meanings assigned to such terms in
conformity with GAAP.
1.3 Other Definitional Provisions. References to "Sections", "Exhibits" and
"Schedules" shall be to Sections, Exhibits and Schedules, respectively, of this
Agreement unless otherwise specifically provided. Any of the terms defined in
Section 1.1 may, unless the context otherwise requires, be used in the singular
or the plural depending on the reference. In this Agreement, words importing
any gender include the other genders; the words "including," "includes" and
"include" shall be deemed to be followed by the words "without limitation";
references to agreements and other contractual instruments shall be deemed to
include subsequent amendments, assignments, and other modifications thereto,
but only to the extent such amendments, assignments and other modifications are
not prohibited by the terms of this Agreement or any other Loan Document;
references to Persons include their respective permitted successors and assigns
or, in the case of governmental Persons, Persons succeeding to the relevant
functions of such Persons; and all references to statutes and related
regulations shall include any amendments of same and any successor statutes and
regulations.
SECTION 2 THE TERM LOAN
2.1 Loan.
(A) Amount; Payment. Subject to the terms and conditions of this
Agreement, Lender has previously advanced to Borrower the Term Loan in the
amount of $__________. Borrower shall make a single payment of the full amount
of the principal balance of the Term Loan, together with accrued interest, on
the Termination Date. Borrower shall make such other principal payments as are
required and may make such other principal payments as are permitted by this
Agreement.
(B) Note. Borrower shall execute and deliver to Lender a Term Note in
the form of Exhibit A to evidence the Term Loan, such Term Note to be in the
principal amount of the Term Loan and with other appropriate insertions.
2.2 Interest.
(A) Amount; Payment. Borrower shall pay interest in respect of all
unpaid principal of the Term Loan from the date hereof to maturity (whether by
acceleration, notice of prepayment or otherwise) at a rate per annum equal to
the LIBOR Rate selected by Borrower plus the Applicable Margin, each as in
effect from time to time. Overdue principal and accrued interest and, to the
extent not prohibited by applicable law, all other
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overdue amounts owing hereunder, shall bear interest from each date that such
amounts are overdue at the rate or rates otherwise applicable for the
then-current Interest Period plus an additional two percent (2.0%) per annum;
thereafter at the Prime Rate plus an additional two percent (2.0%) per annum.
Interest on the Term Loan shall accrue from and including the date hereof to
but excluding the date of any repayment thereof. All accrued interest shall be
payable on the Termination Date, except that interest accrued on any amounts
prepaid under this Agreement shall be payable on the date of prepayment. In
the case of Interest Periods for which the LIBOR Rate applies, interest shall
be added to the principal balance of the Term Loan at the end of each Interest
Period as set forth in Section 2.2(B). For periods during which the Prime Rate
applies, interest shall be compounded quarterly beginning December 31, 1995 and
continuing on each March 31, June 30, September 30 and December 31 thereafter
until paid.
(B) Interest Periods. Borrower shall select the interest periods (each
an "Interest Period") to be applicable to the Term Loan, each of which Interest
Periods shall be either a one month, three month, six month or one year period;
provided that:
(1) The initial Interest Period shall commence on the date hereof
and each Interest Period occurring thereafter shall commence on the day on
which the immediately preceding Interest Period expires;
(2) If any Interest Period would otherwise expire on a day which
is not a Business Day, such Interest Period shall expire on the next succeeding
Business Day, provided that if any Interest Period would otherwise expire on a
day that is not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall expire on the
next preceding Business Day; and
(3) Any Interest Period which begins on a day for which there is
no numerically corresponding day in the calendar month at the end of such
Interest Period shall expire on the last Business Day of such calendar month.
(C) LIBOR Rate Notices. Borrower shall notify Lender of the applicable
LIBOR Rate for each Interest Rate Period by delivering to Lender a notice
thereof (a "LIBOR Rate Notice") not later than 10:00 a.m. Jackson, Mississippi
time, at least one (1) Business Day prior to the effective date of the change
to such rate. In the case of the initial Interest Period, Borrower shall
provide such notice on or prior to the date hereof. Each LIBOR Rate Notice
shall either be oral, with prompt written confirmation, or in writing, shall be
irrevocable, shall be effective upon receipt by Lender, and shall specify the
effective date of the Interest Period with respect to such LIBOR Rate (which
shall be a Business Day).
(D) Expiration of Interest Period. Upon the expiration of each
Interest Period, unless Lender has received from Borrower a new LIBOR Rate
Notice with respect to the following Interest Period, interest on the Term Loan
shall accrue at the Prime Rate.
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(E) Inability to Determine LIBOR Rate. In the event that Lender
reasonably determines (which determination shall be conclusive) that, by reason
of circumstances affecting the London interbank market, quotation of interest
rates for the relevant deposits used to determine LIBOR are not being provided
in the relevant amounts or for the relevant maturities for the purpose of
determining a rate of interest for any LIBOR Rate, then Lender shall promptly
notify Borrower whereupon the right of Borrower to submit a LIBOR Rate Notice
shall thereupon be suspended and interest on the Term Loan shall accrue at the
Prime Rate until such time as Lender again can determine a LIBOR Rate.
(F) Interest Savings Clause. Nothing contained in this Agreement
or in the Note shall be construed to permit Lender to receive at any time
interest, fees or other charges in excess of the amounts which Lender is
legally entitled to charge and receive under any law to which such interest,
fees or charges are subject. In no contingency or event whatsoever shall the
compensation payable to Lender by Borrower, howsoever characterized or
computed, hereunder or under the Note or under any other agreement or
instrument evidencing or relating to the Obligations, exceed the highest rate
permissible under any law to which such compensation is subject. There is no
intention that Lender shall contract for, charge or receive compensation in
excess of the highest lawful rate, and, in the event it should be determined
that any excess has been charged or received, then, ipso facto, such rate shall
be reduced to the highest lawful rate so that no amounts shall be charged which
are in excess thereof; and Lender shall apply such excess against the
Obligations then outstanding.
2.3 Payments and Prepayments.
(A) Manner and Time of Payment. All payments by Borrower of the
Obligations shall be made without deduction, defense, set-off or counterclaim
and in same day funds and delivered to Lender by wire transfer to Lender's
account, ABA No. 000000000, Account No. 500-22-215-80 at Deposit Guaranty
National Bank, Jackson, MS., A/C First Mississippi Corporation or at such other
place as Lender may direct from time to time by notice to Borrower (the "Lender
Account"). Borrower shall receive credit for funds remitted to the Lender
Account directly by Borrower by wire transfer on the date such funds are
received in the Lender Account if Borrower has given Lender telephonic notice
by 10:00 a.m. (central time) of the transfer of such funds and such funds are
received in the Lender Account by 12:00 noon (central time) on such day.
(B) Mandatory Prepayments.
(1) Proceeds of Public Offering. Pursuant to the Tax Ruling
Agreement, Borrower has committed to undertake a Public Offering generating
aggregate proceeds of at least $50,000,000. Borrower shall apply the aggregate
net proceeds to Borrower of any Public Offering effected after the date of this
Agreement, up to a maximum of $15 million in the aggregate, to the prepayment
of the principal amount of the Term Loan together with accrued interest to the
date of such prepayment on the principal amount prepaid, which
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prepayment shall be made within five (5) Business Days after closing of any
such Public Offering.
(2) Change of Control. Upon the consummation of a Change of
Control, Borrower shall prepay in full the principal amount of the Term Loan
together with accrued interest to the date of such prepayment on the principal
amount prepaid.
(C) Optional Prepayments. Borrower may, upon at least five Business
Days' notice to Lender, prepay the principal amount of the Term Loan in whole
or in part, together with accrued interest to the date of such prepayment on
the principal amount prepaid; provided, however, that each partial prepayment
shall be in a aggregate principal amount of $100,000 or an integral multiple of
$100,000 in excess thereof.
(D) Set-Off Under Amended Tax Sharing Agreement. Lender shall reduce
the outstanding balance of the Loan under the circumstances set forth in
Section 2(c)(ii) of the Amended Tax Sharing Agreement.
2.4 Term of this Agreement. Upon acceleration of the Obligations in
accordance with Section 7 or on September 22, 2000 (in either event, the
"Termination Date"), all Obligations shall become immediately due and payable
without notice or demand. Until all Obligations have been fully paid and
satisfied, and even after payment of all Obligations hereunder, Borrower's
obligation to indemnify Lender in accordance with the terms hereof shall
continue.
SECTION 3 BORROWER'S REPRESENTATIONS AND WARRANTIES
In order to induce Lender to enter into this Agreement, Borrower represents and
warrants to Lender that the following statements are true, correct and
complete:
3.1 Organization, Power. Borrower is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and qualified to do business in all states where such
qualification is required. Borrower has all requisite corporate power and
authority to own and operate its properties, to carry on its business as now
conducted and proposed to be conducted and to enter into each Loan Document.
3.2 Authorization of Borrowing. Borrower has the corporate power and
authority to incur the Obligations. The execution, delivery and performance of
the Loan Documents by each Loan Party and signatory thereto have been duly
authorized by all necessary corporate and shareholder action. The execution,
delivery and performance by each Loan Party of each Loan Document and the
consummation of the transactions contemplated by this Agreement do not and will
not be in contravention of any applicable law, the corporate charter or bylaws
of any Loan Party or any agreement or order by which any Loan Party is bound.
This Agreement is, and the other Loan Documents, including the Note, when
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executed and delivered will be, the legally valid and binding obligations of
the applicable Loan Parties respectively, each enforceable against the Loan
Parties, as applicable, in accordance with their respective terms.
3.3 Financial Condition. All financial statements concerning Borrower and
its Subsidiaries which have been or will hereafter be furnished by Borrower and
its Subsidiaries to Lender pursuant to this Agreement have been or will be
prepared in accordance with GAAP consistently applied throughout the periods
involved (except as disclosed therein) and do or will present fairly the
financial condition of the corporations covered thereby as at the dates thereof
and the results of their operations for the periods then ended.
3.4 Indebtedness and Liabilities. As of July 30, 1995, neither Borrower nor
any of its Subsidiaries has any Indebtedness or Liabilities other than the
Indebtedness or as disclosed on Schedule 3.4.
3.5 [LEFT BLANK INTENTIONALLY]
3.6 Title to Properties; Liens. Borrower and each of its Subsidiaries has
good, sufficient and legal title, subject to Permitted Encumbrances, to all its
respective material properties and assets. Except for Permitted Encumbrances,
all such properties and assets are free and clear of Liens. To the best
knowledge of Borrower after due inquiry, there are no actual, threatened or
alleged defaults with respect to any leases of real property under which
Borrower or any of its Subsidiaries is lessee or lessor which would have a
Material Adverse Effect.
3.7 Litigation; Adverse Facts. There are no judgments outstanding against
Borrower or any of its Subsidiaries or affecting any property of any of them
nor is there any action, charge, claim, demand, suit, proceeding, petition,
governmental investigation or arbitration now pending or, to the best knowledge
of Borrower after due inquiry, threatened against or affecting Borrower or any
of its Subsidiaries or any property of Borrower or any of its Subsidiaries
which could reasonably be expected to result in any Material Adverse Effect.
Neither Borrower nor any of its Subsidiaries has received any opinion or
memorandum or legal advice from legal counsel to the effect that it is exposed
to any liability or disadvantage which could reasonably be expected to result
in any Material Adverse Effect.
3.8 Payment of Taxes. All material tax returns and reports of Borrower and
each of its Subsidiaries required to be filed by any of them have been timely
filed, and all taxes, assessments, fees and other governmental charges upon
such Persons and upon their respective properties, assets, income and
franchises which are shown on such returns as due and payable have been paid
when due and payable. No tax liens have been filed and no claims are being
asserted with respect to any such taxes. The charges, accruals and reserves on
the books of Borrower and each of its Subsidiaries in respect of any taxes or
other governmental charges are in accordance with GAAP.
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3.9 Performance of Agreements. Neither Borrower nor any of its Subsidiaries
is in default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any contractual obligation of
any such Person, and no condition exists that, with the giving of notice or the
lapse of time or both, would constitute such a default.
3.10 Employee Benefit Plans. Borrower, each Subsidiary of Borrower and each
ERISA Affiliate is in compliance in all material respects with all applicable
provisions of ERISA, the IRC and all other applicable laws and the regulations
and interpretations thereof with respect to all Employee Benefit Plans. No
material liability has been incurred by Borrower, any Subsidiary of Borrower or
any ERISA Affiliate which remains unsatisfied for any taxes or penalties with
respect to any Employee Benefit Plan.
3.11 Intellectual Property. Borrower and each of its Subsidiaries owns, is
licensed to use or otherwise has the right to use, all patents, trademarks,
trade names, copyrights, technology, know-how and processes used in or
necessary for the conduct of its business as currently conducted that are
material to the financial condition, business or operations of Borrower or its
Subsidiaries.
3.12 Broker's Fees. No broker's or finder's fee or commission will be payable
with respect to the issuance of the Note or any of the other transactions
contemplated hereby.
3.13 Environmental Compliance. Each of Borrower and its Subsidiaries has been
and is currently in material compliance with all applicable Environmental Laws,
including obtaining and maintaining in effect all permits, licenses or other
authorizations required by applicable Environmental Laws. There are no claims,
liabilities, investigations, litigation, administrative proceedings, whether
pending or, to the best knowledge of Borrower, after due inquiry, threatened,
or judgments or orders relating to any Hazardous Materials asserted or
threatened against any of Borrower and its Subsidiaries or relating to any real
property currently or formerly owned, leased or operated by any of Borrower and
its Subsidiaries.
3.14 Solvency. As of and from and after the date of this Agreement, Borrower:
(a) owns and will own assets the fair saleable value of which are (i) greater
than the total amount of liabilities (including contingent liabilities) of
Borrower and (ii) greater than the amount that will be required to pay the
liabilities of Borrower as they mature; (b) has capital that is not
unreasonably small in relation to its business as presently conducted or as
contemplated; and (c) does not intend to incur and does not believe that it
will incur debts beyond its ability to pay such debts as they become due.
3.15 Disclosure. No representation or warranty of Borrower or any of its
Subsidiaries contained in this Agreement, the financial statements, the other
Loan Documents, or any other document, certificate or written statement
furnished to Lender by or on behalf of any such Person for use in connection
with the Loan Documents contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary in order
to make the statements contained herein or therein not misleading in light of
the
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circumstances in which the same were made. There is no fact known to Borrower
that has had or will have a Material Adverse Effect and that has not been
disclosed herein or in such other documents, certificates and statements
furnished to Lender for use in connection with the transactions contemplated
hereby.
3.16 Insurance. Borrower and its Subsidiaries maintain adequate insurance
policies for public liability and property damage for their business and
properties, no notice of cancellation has been received with respect to such
policies and Borrower and its Subsidiaries are in compliance with all
conditions contained in such policies.
3.17 Compliance with Laws. Borrower and each of its Subsidiaries are not in
violation of any law, ordinance, rule, regulation, order, policy, guideline or
other requirement of any domestic or foreign government or any instrumentality
or agency thereof having jurisdiction over the conduct of their respective
businesses or the ownership of their respective properties, including, without
limitation, any violation relating to any use, release, storage, transport or
disposal of any Hazardous Material, which violation would subject Borrower or
any such Subsidiary, or any of their respective officers to criminal liability
or have a Material Adverse Effect and no such violation has been alleged.
SECTION 4 AFFIRMATIVE COVENANTS
Borrower covenants and agrees that, until payment in full of all
Obligations, unless Lender shall otherwise give its prior written consent,
Borrower shall perform, and shall cause each of its Subsidiaries to perform,
all covenants in this Section 4 applicable to such Person.
4.1 Financial Statements and Other Reports. Borrower will maintain, and
cause each of its Subsidiaries to maintain, a system of accounting established
and administered in accordance with sound business practices to permit
preparation of financial statements in conformity with GAAP. Borrower will
deliver to Lender the financial statements and other reports described below.
Borrower will deliver with each of the financials set forth in Sections 4.1(A),
(B) and (C) a computation reflecting its compliance or non-compliance with
Sections 5.1 and 5.2, and with each delivery of the financials set forth in
Section 4.1(C) and upon the reasonable request of Lender, a confirmation of
such computation by Borrower's independent certified public accountants.
(A) Monthly Financials. As soon as available and in any event within
thirty-five (35) days after the end of each month, Borrower will deliver the
consolidated balance sheet of Borrower as at the end of such month and the
related consolidated statements of income, stockholders' equity and cash flow
for such month and for the period from the beginning of the then current Fiscal
Year to the end of such month.
(B) Quarterly Financials. As soon as available and in any event within
forty-five (45) days after the end of each quarter of a Fiscal Year, Borrower
will deliver the consolidated balance sheet of Borrower as at the end of such
period and the related
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consolidated statements of income, stockholders' equity and cash flow for such
quarter of a Fiscal Year and for the period from the beginning of the then
current Fiscal Year to the end of such quarter of a Fiscal Year.
(C) Year-End Financials. As soon as available and in any event within
ninety (90) days after the end of each Fiscal Year, Borrower will deliver the
consolidated balance sheet of Borrower as at the end of such Fiscal Year and
the related consolidated statements of income, stockholders' equity and cash
flow for such Fiscal Year, together with a report with respect to such
financial statements from a firm of independent certified public accountants
selected by Borrower, which report shall be unqualified as to going concern and
scope of audit of Borrower and its Subsidiaries and shall state that (1) such
consolidated financial statements present fairly the consolidated financial
position of Borrower and its Subsidiaries as at the dates indicated and the
results of their operations and cash flow for the periods indicated in
conformity with GAAP applied on a basis consistent with prior years and (2)
that the examination by such accountants in connection with such consolidated
financial statements has been made in accordance with generally accepted
auditing standards.
(D) Securities Reports. Promptly upon their becoming available, copies
of all registration statements (in the form in which declared effective) and
reports and other documents which Borrower shall have filed pursuant to the
Securities Act or the Securities Exchange Act.
(E) Company Information. Promptly upon the mailing thereof to the
shareholders of Borrower, copies of all financial statements, reports, proxy
statements and other documents which Borrower shall have mailed to
shareholders, and promptly upon the issuance thereof by Borrower, copies of all
press releases which Borrower shall have issued.
(F) Accountants' Reports. Promptly upon receipt thereof, Borrower will
deliver copies of all significant reports submitted to Borrower by independent
public accountants in connection with each annual, interim or special audit of
the financial statements of Borrower made by such accountants, including the
comment letter submitted by such accountants to management in connection with
their annual audit.
(G) Lawsuits and Government Notices. Borrower will deliver to Lender
promptly after receipt copies of all lawsuits filed by or against Borrower or
any of its Subsidiaries and all notices, requests, subpoenas, inquiries or
other writings received from any governmental agency concerning any Employee
Benefit Plan, the violation or alleged violation of any Environmental Laws, the
storage, use or disposal of any Hazardous Material or Borrower's payment or
non-payment of any taxes including any tax audit.
(H) Events of Default, etc. Promptly upon any officer of Borrower
obtaining knowledge of any of the following events or conditions, Borrower
shall deliver a certificate of Borrower's chief executive officer specifying
the nature and period of existence of such condition or event and what action
Borrower has taken, is taking and proposes to take with respect thereto: (1)
any condition or event that constitutes an Event of Default or Default;
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15
(2) any notice of default that any Person has given to Borrower or any of its
Subsidiaries or any other action taken with respect to a claimed default; or
(3) any Material Adverse Effect.
(I) [LEFT BLANK INTENTIONALLY]
(J) Locations. Borrower will give Lender at least thirty (30) days'
advance written notice of any change in Borrower's or any of its Subsidiaries'
principal place of business or any change in the location of its books and
records or of any new location for its books and records.
(K) Other Information. With reasonable promptness, Borrower will
deliver such other information and data with respect to any Loan Party as
Lender may reasonably request from time to time.
4.2 Access to Accountants. Borrower authorizes Lender to discuss the
financial condition and financial statements of Borrower and its Subsidiaries
with Borrower's independent public accountants upon reasonable notice to
Borrower of its intention to do so.
4.3 Inspection. Borrower shall permit Lender and any authorized
representatives designated by Lender to visit and inspect any of the properties
of Borrower or any of its Subsidiaries, including its and their financial and
accounting records, and to make copies and take extracts therefrom, and to
discuss its and their affairs, finances and business with its and their
officers and independent public accountants, at such reasonable times during
normal business hours and as often as may be reasonably requested.
4.4 Corporate Existence. Borrower will, and will cause each of its
Subsidiaries to, at all times preserve and keep in full force and effect its
corporate existence and all rights and franchises material to its business.
Borrower will promptly notify Lender of any change in its corporate structure.
4.5 Payment of Taxes. Borrower will, and will cause each of its Subsidiaries
to, pay all taxes, assessments and other governmental charges imposed upon it
or any of its properties or assets or with respect to any of its franchises,
business, income or property before any penalty accrues thereon; provided that
no such tax need be paid if Borrower or one of its Subsidiaries is contesting
same in good faith by appropriate proceedings promptly instituted and
diligently conducted and if Borrower or such Subsidiary has established
appropriate reserves as shall be required in conformity with GAAP.
4.6 Maintenance of Properties; Insurance. Borrower will maintain or cause to
be maintained in good repair, working order and condition all material
properties used in the business of Borrower and its Subsidiaries and will make
or cause to be made all appropriate repairs, renewals and replacements thereof.
Borrower will maintain or cause to be maintained, with financially sound and
reputable insurers, public liability and property damage insurance with respect
to its business and properties and the business and properties of its
Subsidiaries against loss or damage of the kinds customarily carried or
maintained by
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corporations of established reputation engaged in similar businesses and in
amounts acceptable to Lender.
4.7 Compliance with Laws. Borrower will comply with and will cause each of
its Subsidiaries to comply with the requirements of all applicable laws, rules,
regulations and orders of any governmental authority as now in effect and which
may be imposed in the future in all jurisdictions in which Borrower or its
Subsidiaries are now doing business or may hereafter be doing business, other
than those laws the noncompliance with which would not have a Material Adverse
Effect.
4.8 Further Assurances. Borrower shall and shall cause each of its
Subsidiaries to, from time to time, execute such reports and other documents or
deliver to Lender such instruments, certificates of title or other documents as
Lender at any time may reasonably request to evidence, perfect or otherwise
implement the Obligations provided for in the Loan Documents.
SECTION 5 FINANCIAL COVENANTS
Borrower covenants and agrees that, until payment in full of all
Obligations, Borrower shall comply with, and shall cause each of its
Subsidiaries to comply with, all covenants in this Section 5 applicable to such
Person.
5.1 Tangible Net Worth. Borrower shall at all times maintain Tangible Net
Worth of at least $27,000,000.00.
5.2 Ratio of Indebtedness to Tangible Net Worth. The ratio of (a) Borrower's
Indebtedness, on a consolidated basis, to (b) Borrower's Tangible Net Worth,
shall at no time be greater than 2.0:1.0.
SECTION 6 NEGATIVE COVENANTS
Borrower covenants and agrees that, until payment in full of all
Obligations, Borrower shall comply with, and shall cause each of its
Subsidiaries to comply with, all covenants in this Section 6 applicable to such
Person.
6.1 Indebtedness and Liabilities. Borrower will not and will not permit any
of its Subsidiaries directly or indirectly to create, incur, assume, guaranty,
or otherwise become or remain directly or indirectly liable with respect to any
Indebtedness except: (a) the Obligations; (b) intercompany Indebtedness among
Borrower and its Subsidiaries; provided that such Indebtedness is subordinated
in right of payment to the Obligations; (c) Indebtedness incurred to finance
the cost of acquisition, construction or improvement of property owned or
acquired by, or working capital for, Borrower or its Subsidiaries; (d)
Indebtedness secured by Liens identified on Schedule 1.1(B) or replacement
indebtedness
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in like amount and (e) other Indebtedness in an aggregate amount not in excess
of $5,000,000. Except for Indebtedness described in the preceding sentence,
Borrower will not incur and will not permit any of its Subsidiaries to incur
any Liabilities except for trade payables and normal accruals in the ordinary
course of business not yet due and payable or with respect to which Borrower or
any of its Subsidiaries is contesting in good faith the amount or validity
thereof by appropriate proceedings and then only to the extent that Borrower or
any of its Subsidiaries has established adequate reserves therefor, if
appropriate under GAAP.
6.2 Guaranties. Except for guaranties of Indebtedness secured by Permitted
Encumbrances, guaranties by Borrower and its Subsidiaries of indebtedness of
each other permitted by this Agreement, endorsements of instruments or items of
payment for collection in the ordinary course of business, Borrower shall not
and shall not permit any of its Subsidiaries to guaranty, endorse, or otherwise
in any way become or be responsible for any obligations of any other Person,
whether directly or indirectly by agreement to purchase the indebtedness of any
other Person or through the purchase of goods, supplies or services, or
maintenance of working capital or other balance sheet covenants or conditions,
or by way of stock purchase, capital contribution, advance or loan for the
purpose of paying or discharging any indebtedness or obligation of such other
Person or otherwise.
6.3 Liens. Except for Permitted Encumbrances, Borrower will not, and will
not permit any of its Subsidiaries directly or indirectly, to create, incur,
assume or permit to exist any Lien on or with respect to any of its assets or
properties or any income or profits therefrom.
6.4 Investments and Loans. Borrower shall not and shall not permit any of
its Subsidiaries to make or permit to exist investments in or loans to any
other Person, except: (a) investments in short-term direct obligations of the
United States or Canadian governments; (b) time deposits maturing within one
year from the date of creation thereof with, including certificates of deposit
issued by, any bank or trust company which is organized under the laws of the
United States or any state thereof or Canada and has capital, surplus and
undivided profits aggregating at least $250,000,000; (c) investments in
commercial paper rated at least A-2 by Standard & Poor's Corporation or at
least P-2 by Xxxxx'x Investors Service, Inc.; and (d) loans and advances to
employees for moving, entertainment, travel, purchases of stock in Borrower and
other similar expenses in the ordinary course of business.
6.5 Restricted Junior Payments. Except for repayments of Indebtedness
permitted under Section 6.1, Borrower will not and will not permit any of its
Subsidiaries to directly or indirectly declare, order, pay, make or set apart
any sum for (a) any dividend or other distribution on account of any capital
stock of Borrower or any of its Subsidiaries now or hereafter outstanding,
except stock dividends; (b) any redemption, conversion, exchange, retirement,
sinking fund or other purchase of any capital stock of Borrower or any of its
Subsidiaries now or hereafter outstanding (other than repurchases of capital
stock owned by employees following termination of employment); and (c) any
payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire
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capital stock of Borrower or any of its Subsidiaries now or hereafter
outstanding (other than repurchases of outstanding warrants, options or other
rights to acquire capital stock of Borrower.
6.6 Restriction on Fundamental Changes. Neither Borrower nor any of its
Subsidiaries will: (a) enter into any transaction of merger, consolidation or
other reorganization having a similar result or effect; (b) liquidate, wind-up
or dissolve itself (or suffer any liquidation or dissolution); (c) convey,
sell, lease, sublease, transfer or otherwise dispose of, in one transaction or
a series of transactions, all or any substantial part of its business or
assets, or the capital stock of any of its Subsidiaries, whether now owned or
hereafter acquired; or (d) acquire by purchase or otherwise all or any
substantial part of the business or assets of, or stock or other evidence of
beneficial ownership of, any Person; provided that the foregoing restrictions
shall not apply to any merger of a Subsidiary with and into Borrower or to a
merger in which Borrower is the surviving corporation or the purchase of all or
any substantial part of the business or assets of, or stock or other evidence
of beneficial ownership of any Person, provided that upon consummation of such
merger or purchase no Default or Event of Default shall have occurred and be
continuing or would occur after giving effect to such merger or purchase.
6.7 Transactions with Affiliates. Borrower will not, and will not permit any
Loan Party to, enter into any transaction with an Affiliate including the
purchase, sale or exchange of property or the rendering of any service to any
Affiliate except in the ordinary course of and pursuant to the reasonable
requirements of Borrower's business and upon fair and reasonable terms no less
favorable to Borrower than it would obtain in a comparable arm's length
transaction with an unaffiliated Person.
6.8 Environmental Liabilities. Borrower will not and will not permit any
Loan Party to: (a) violate any applicable Environmental Law; (b) dispose of
any Hazardous Materials (except in accordance with applicable law) into or onto
or from, any real property owned, leased or operated by any Loan Party; or (c)
permit any Lien imposed pursuant to any Environmental Law to be imposed or to
remain on any real property owned, leased or operated by any Loan Party.
6.9 Compliance with ERISA. Borrower will not and will not permit any of its
Subsidiaries to establish any new Employee Benefit Plan or amend any existing
Employee Benefit Plan if the liability or increased liability resulting from
such establishment or amendment would have a Material Adverse Effect. Neither
Borrower nor any Subsidiary shall fail to establish, maintain and operate each
Employee Benefit Plan in compliance in all material respects with the
provisions of ERISA, the IRC and all other applicable laws and the regulations
and interpretations thereof.
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SECTION 7 DEFAULT, RIGHTS AND REMEDIES
7.1 Event of Default. "Event of Default" shall mean the occurrence or
existence of any one or more of the following:
(A) Payment. (1) Failure of Borrower to make payment of any of the
Obligations when due, or (2) failure of Borrower or any of its Subsidiaries to
pay when due any principal or interest on any Indebtedness other than the
Obligations, or (3) any other breach or default of Borrower or any of its
Subsidiaries with respect to any Indebtedness if in the case of (2) or (3) such
failure to pay, breach or default has resulted in the holder causing such
Indebtedness having an individual principal amount in excess of $200,000 or
having an aggregate principal amount in excess of $700,000 to become or be
declared due prior to its stated maturity; or
(B) Breach of Warranty. Any material representation, warranty,
certification or other statement made by Borrower or any other Loan Party in
any Loan Document or in any statement or certificate at any time given by such
Person in writing pursuant or in connection with any Loan Document is false in
any material respect on the date made; or
(C) Breach of Certain Provisions. Failure of Borrower to perform or
comply with any term or condition contained in Section 5 or Section 6 other
than Sections 6.3, 6.8 or 6.9; or
(D) Other Defaults Under Loan Documents. Borrower or any other Loan
Party defaults in the performance of or compliance with any term contained in
this Agreement or the other Loan Documents and such default is not remedied or
waived within ten (10) days after receipt by Borrower of notice from Lender of
such default (other than occurrences described in other provisions of this
Section 7.1 for which a different grace or cure period is specified or which
constitute immediate Events of Default); or
(E) Default in Other Agreements. Breach of Borrower or any Subsidiary
of any of the representations, warranties, covenants or agreements contained in
any other agreement or instrument between Borrower or any Subsidiary on the one
hand and Lender on the other hand, including without limitation the Tax Ruling
Agreement.
(F) Bankruptcy, etc. (1) Commencement by or against Borrower or any of
its Subsidiaries of any bankruptcy proceeding, insolvency arrangement, or
similar proceeding and in the case of any such proceeding instituted against
Borrower or any of its Subsidiaries (but not instituted by it) such proceeding
shall remain undismissed or unstayed for a period of thirty (30) days, or (2)
Borrower or any of its Subsidiaries suspends or discontinues its business, or
(3) the appointment of a receiver or trustee of any kind for Borrower or any of
its Subsidiaries or for any property of Borrower or any of its Subsidiaries, or
(4) if Borrower or any of its Subsidiaries calls, or has called by a third
party, a general meeting of creditors; or
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(G) [LEFT BLANK INTENTIONALLY]
(H) Judgment and Attachments. Any money judgment, writ or warrant of
attachment, or similar process involving (1) an amount in any individual case
in excess of $200,000 or (2) an amount in the aggregate at any time in excess
of $700,000 (in either case not adequately covered by insurance as to which the
insurance company has acknowledged coverage) is entered or filed against
Borrower or any of its Subsidiaries or any of their respective assets and
remains undischarged, unvacated, unbonded or unstayed for a period of thirty
(30) days or in any event later than five (5) days prior to the date of any
proposed sale thereunder; or
(I) Dissolution. Any order, judgment or decree is entered against
Borrower or any of its Subsidiaries decreeing the dissolution or split up of
Borrower or such Subsidiary and such order remains undischarged or unstayed for
a period in excess of twenty (20) days; or
(J) Solvency. Borrower or any of its Subsidiaries ceases to be solvent
or admits in writing its present or prospective inability to pay its debts as
they become due; or
(K) Injunction. Borrower or any of its Subsidiaries is enjoined,
restrained or in any way prevented by the order of any court or any
administrative or regulatory agency from conducting all or any material part of
its business and such order continues for more than thirty (30) days; or
(L) Invalidity of Loan Documents. Any of the Loan Documents for any
reason, other than a partial or full release in accordance with the terms
thereof, ceases to be in full force and effect or is declared to be null and
void, or any Loan Party denies that it has any further liability under any Loan
Documents to which it is party, or gives notice to such effect.
7.2 Acceleration. Upon the occurrence of any Event of Default described in
the foregoing Section 7.1(F)(1), all Obligations shall automatically become
immediately due and payable, without presentment, demand, protest or other
requirements of any kind, all of which are hereby expressly waived by Borrower.
Upon the occurrence and during the continuance of any other Event of Default,
Lender may, by written notice to Borrower, declare all or any portion of the
Obligations to be, and the same shall forthwith become, immediately due and
payable.
7.3 Remedies. All rights and remedies under the Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.
SECTION 8 MISCELLANEOUS
8.1 Assignments. Lender may assign its rights and delegate its obligations
under this Agreement and may assign all or any part of the Loan, the Note and
this Agreement (a) to an Affiliate, (b) to a purchaser of all or substantially
all of the business of Lender, regardless
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of the form of the transaction, (c) to a commercial bank or other financial
institution, or (d) to any other Person with the consent of Borrower (such
consent not to be unreasonably withheld). In the case of an assignment
authorized under this Section 8.1, the assignee shall have, to the extent of
such assignment, the same rights, benefits and obligations as it would if it
were a Lender hereunder. Borrower hereby acknowledges and agrees that any
assignment will give rise to a direct obligation of Borrower to the assignee
and that the assignee shall be considered to be a "Lender". Lender may furnish
any information concerning Borrower and its Subsidiaries in its possession from
time to time to assignees and participants (including prospective assignees and
participants) meeting the criteria specified in (a) through (d); provided that
each recipient of such information agrees prior to receipt of such information,
in a writing addressed to Borrower and Lender, not to disclose such information
to any other Person.
8.2 Set Off. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default, Lender and each holder of the Note is
hereby authorized by Borrower at any time or from time to time, without notice
to Borrower or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and to apply any and all balances held by
it at any of its offices for the account of Borrower or any of its Subsidiaries
(regardless of whether such balances are then due to Borrower or its
Subsidiaries) and any other property at any time held or owing by Lender or
that holder to or for the credit or for the account of Borrower against and on
account of any of the Obligations which are not paid when due.
8.3 Expenses and Attorneys' Fees. Borrower agrees to promptly pay all fees,
costs and expenses incurred by Lender in connection with any matters
contemplated by or arising out of this Agreement or the other Loan Documents
including the following, and all such fees, costs and expenses shall be part of
the Obligations, payable on demand: (a) fees, costs and expenses (including
attorneys' fees, allocated costs of internal counsel and fees of environmental
consultants, accountants and other professionals retained by Lender) incurred
in connection with the review, negotiation, preparation, documentation,
execution and administration of any amendments, waivers, consents, forbearances
and other modifications relating to the Loan Documents and the Loan or any
subordination or intercreditor agreements; and (b) fees, costs, expenses
(including attorneys' fees and allocated costs of internal counsel) and costs
of settlement incurred in any action to enforce this Agreement or the other
Loan Documents or to collect any payments due from Borrower or any other Loan
Party under this Agreement or any other Loan Document or incurred in connection
with any refinancing or restructuring of the credit arrangements provided under
this Agreement, whether in the nature of a "workout" or in connection with any
insolvency or bankruptcy proceedings or otherwise.
8.4 Indemnity. In addition to the payment of expenses pursuant to Section
8.3, whether or not the transactions contemplated hereby shall be consummated,
Borrower agrees to indemnify, pay and hold Lender and any holder of the Note,
and the officers, directors, employees, agents, affiliates and attorneys of
Lender and such holders (collectively called the
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"Indemnitees") harmless from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs, expenses
and disbursements of any kind or nature whatsoever (including the fees and
disbursements of counsel for such Indemnities in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not such Indemnitee shall be designated a party thereto) that may be
imposed on, incurred by, or asserted against that Indemnitee by any person not
a party to this Agreement, in any manner relating to or arising out of this
Agreement or the other Loan Documents, the consummation of the transactions
contemplated by this Agreement, the exercise of any right or remedy hereunder
or under the other Loan Documents (the "Indemnified Liabilities"); provided
that Borrower shall have no obligation to an Indemnitee hereunder with respect
to Indemnified Liabilities resulting from the gross negligence or willful
misconduct of or material breach of this Agreement by that Indemnitee as
determined by a court of competent jurisdiction.
8.5 Amendments and Waivers. This Agreement together with the other Loan
Documents constitutes the entire agreement between Lender and Borrower with
respect to the subject matter thereof, and no amendment, modification,
termination or waiver of any provision of this Agreement or of the other Loan
Documents, or consent to any departure by Borrower therefrom, shall be
effective unless the same shall be in writing and signed by Lender and
Borrower. Each amendment, modification, termination or waiver shall be
effective only in the specific instance and for the specific purpose for which
it was given.
8.6 Notices. Unless otherwise specifically provided herein, all notices
shall be in writing addressed to the respective party as set forth below and
may be personally served, telecopied or sent by overnight courier service or
United States mail and shall be deemed to have been given: (a) if delivered in
person, when delivered; (b) if delivered by telecopy, on the date of
transmission if transmitted on a Business Day before 4:00 p.m. (central time)
or, if not, on the next succeeding Business Day; (c) if delivered by overnight
courier, two days after delivery to such courier properly addressed; or (d) if
by U.S. Mail, four Business Days after depositing in the United States mail,
with postage prepaid and properly addressed.
If to Borrower: FirstMiss Gold Inc.
0000 X. Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attn: President
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
With a copy to: Xxxxxx & Xxxxxxx
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxxxxxxxx X. Xxxxxxx
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Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
If to Lender: First Mississippi Corporation
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxx 00000-0000
Attn: President
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
With a copy to: First Mississippi Corporation
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxx 00000-0000
Attn: General Counsel
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
or to such other address as the party addressed shall have previously
designated by written notice to the serving party, given in accordance with
this Section 8.6.
8.7 Survival of Warranties and Certain Agreements. All agreements,
representations and warranties made herein shall survive the execution and
delivery of this Agreement. Notwithstanding anything in this Agreement or
implied by law to the contrary, the agreements of Borrower set forth in
Sections 8.3 and 8.4 shall survive the payment of the Loan and the termination
of this Agreement.
8.8 Indulgence Not Waiver. No failure or delay on the part of Lender or any
holder of the Note in the exercise of any power, right or privilege hereunder
or under the Note shall impair such power, right or privilege or be construed
to be a waiver of any default or acquiescence therein, nor shall any single or
partial exercise of any such power, right or privilege preclude other or
further exercise thereof or of any other right, power or privilege.
8.9 Marshaling; Payments Set Aside. Lender shall not be under any obligation
to marshal any assets in favor of any Loan Party or any other party or against
or in payment of any or all of the Obligations. To the extent that any Loan
Party makes a payment or payments to Lender or Lender exercises its rights of
set-off, and such payment or payments or the proceeds of such enforcement or
set-off or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, state or federal
law, common law or equitable cause, then to the extent of such recovery, the
Obligations or part thereof originally intended to be satisfied, and all Liens,
rights and remedies therefor, shall be revived and continued in full force and
effect as if such payment had not been made or such enforcement or set-off had
not occurred.
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8.10 Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or be otherwise within the limitations of, another covenant shall not avoid
the occurrence of a Default or an Event of Default if such action is taken or
condition exists.
8.11 Severability. The invalidity, illegality or unenforceability in any
jurisdiction of any provision in or obligation under this Agreement or the
other Loan Documents shall not affect or impair the validity, legality or
enforceability of the remaining provisions or obligations under this Agreement,
or the other Loan Documents or of such provision or obligation in any other
jurisdiction.
8.12 Headings. 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 or be given any substantive effect.
8.13 APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
DELAWARE, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
8.14 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns except that Borrower may not assign its rights or obligations hereunder
without the written consent of Lender.
8.15 No Fiduciary Relationship. No provision in this Agreement or in any of
the other Loan Documents and no course of dealing between the parties shall be
deemed to create any fiduciary duty by Lender to Borrower.
8.16 CONSENT TO JURISDICTION. BORROWER HEREBY CONSENTS TO THE JURISDICTION OF
ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF NEW CASTLE, DELAWARE
AND IRREVOCABLY AGREES THAT, SUBJECT TO LENDER'S ELECTION, ALL ACTIONS OR
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTE OR THE OTHER
LOAN DOCUMENTS SHALL BE LITIGATED IN SUCH COURTS. BORROWER ACCEPTS FOR ITSELF
AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT, THE NOTE, THE OTHER LOAN
DOCUMENTS OR THE OBLIGATIONS.
8.17 WAIVER OF JURY TRIAL. BORROWER AND LENDER HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF THIS AGREEMENT, THE NOTE OR THE OTHER
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LOAN DOCUMENTS. BORROWER AND LENDER ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED
ON THE WAIVER IN ENTERING INTO THIS AGREEMENT, THE NOTE AND THE OTHER LOAN
DOCUMENTS AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED
FUTURE DEALINGS. BORROWER AND LENDER FURTHER WARRANT AND REPRESENT THAT EACH
HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL.
Witness the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.
FIRST MISSISSIPPI CORPORATION FIRSTMISS GOLD INC.
By: /s/ X. X. XXXXXXXXXX By: /s/ X. X. XXXXXXXX
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Title: Vice President Title: President
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SCHEDULES
1.1(B) Permitted Encumbrances
3.4 Indebtedness and Liabilities
EXHIBIT
Exhibit A Form of Term Note
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EXHIBIT A
TERM NOTE
$__________________ ________________, 1995
FOR VALUE RECEIVED, the undersigned, FIRSTMISS GOLD, INC., a Nevada
corporation (the "Borrower"), hereby promises to pay to the order of FIRST
MISSISSIPPI CORPORATION, a Mississippi corporation (the "Lender"), at the
Lender's office located at 000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxx 00000-0000,
or at such other place as the holder of this Note may from time to time
designate in writing, in lawful money of the United States of America and in
immediately available funds, the principal sum of _______________ DOLLARS
($______________), payable as set forth in that certain Loan Agreement of even
date herewith, between the Borrower and the Lender (the "Loan Agreement";
capitalized terms used herein and not otherwise specifically defined herein
shall have the meanings assigned to them in the Loan Agreement).
This Note is the Term Note referred to in Section 2.1(B) of the Loan
Agreement and is issued to evidence a term loan made to the Borrower by the
Lender pursuant to the Loan Agreement, to which reference is hereby made for a
statement of the terms, conditions and covenants under which the loan evidenced
hereby was made and is to be repaid, including, but not limited to, those
related to acceleration of the indebtedness represented hereby upon the
occurrence of an Event of Default pursuant to the Loan Agreement.
The Borrower promises to pay interest on the outstanding unpaid principal
amount hereof at the rates and on the dates set forth in the Loan Agreement.
Interest shall be computed on the daily principal balance on the basis of a
360- day year for the actual number of days elapsed in the period during which
it accrues, or if interest hereunder is accruing at the Prime Rate, a 365-day
year for the actual number of days elapsed in the period during which it
accrues.
In no contingency or event whatsoever shall the compensation payable to
the Lender by the Borrower hereunder or under the Loan Agreement, however
characterized or computed, exceed the highest rate permissible under any law to
which such compensation is subject. In the event that a court of competent
jurisdiction shall in a final judgment determine that the Lender has received
compensation hereunder or thereunder in excess of the highest rate applicable
hereto or thereto, the provisions of the Loan Agreement relating thereto shall
control.
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The Borrower hereby waives demand, presentment, protest, notice of
demand, dishonor, presentment, protest, nonpayment and all other notices in
connection with this Note.
If this Note is collected by or through an attorney-at-law, all costs of
collection, including attorneys' fees, shall be payable by the undersigned, as
more particularly described in the Loan Agreement.
Whenever possible, each provision of this Note shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Note shall be prohibited by or invalid under applicable law,
such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Note. Whenever in this Note reference is made to
the Lender or the Borrower, such reference shall be deemed to include, as
applicable, a reference to their respective successors and assigns. The
provisions of this Note shall be binding upon and shall inure to the benefit of
such successors and assigns. The Borrower's successors and assigns shall
include, without limitation, a receiver, trustee or debtor in possession of or
for the Borrower.
WITNESS the hand and seal of the undersigned, as of the date first above
written.
FIRSTMISS GOLD INC.
By:
----------------------------------
Title:
-------------------------------
Attest:
------------------------------
Title:
-------------------------------
[CORPORATE SEAL]
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