1
Exhibit 10.2
EXECUTION
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RESTATED CREDIT AGREEMENT
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HECLA MINING COMPANY
and
NATIONSBANK, N.A.
as Agent
and CERTAIN FINANCIAL INSTITUTIONS
as Lenders
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$ 55,000,000
May 7, 1999
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TABLE OF CONTENTS
CREDIT AGREEMENT
ARTICLE I - Definitions and References
Section 1.1. Defined Terms
Section 1.2. Exhibits and Schedules; Additional Definitions
Section 1.3. Amendment of Defined Instruments
Section 1.4. References and Titles
Section 1.5. Calculations and Determinations
ARTICLE II - The Loans
Section 2.1. Commitments to Lend; Notes
Section 2.2. Requests for New Loans
Section 2.3. Continuations and Conversions of Existing Loans
Section 2.4. Use of Proceeds
Section 2.5. Interest Rates and Fees
Section 2.6. Optional Prepayments
Section 2.7. Mandatory Prepayments
Section 2.9 Initial Borrowing Base
Section 2.10 Subsequent Determinations of Borrowing Base
Section 2.11 Letters of Credit
Section 2.12 Requesting Letters of Credit
Section 2.13 Reimbursement
Section 2.14 Transferees of Letters of Credit
Section 2.15 Extension of Maturity
Section 2.16 Restriction on Liability
Section 2.17 No Duty to Inquire
Section 2.18 Payment of LC Obligations
Section 2.19. Letter of Credit Fees
ARTICLE III - Payments to Lenders
Section 3.1. General Procedures
Section 3.2. Increased Cost and Reduced Return
Section 3.3. Limitation on Types of Loans
Section 3.4. Illegality
Section 3.5. Treatment of Affected Loans
Section 3.6. Compensation
Section 3.7. Change of Applicable Lending Office
Section 3.8. Replacement of Lenders
Section 3.9. Taxes
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ARTICLE IV - Conditions Precedent to Lending
Section 4.1. Documents to be Delivered
Section 4.2. Additional Conditions Precedent
ARTICLE V - Representations and Warranties
Section 5.1. Borrower's Representations and Warranties
Section 5.2. Representation by Lenders
ARTICLE VI - Affirmative Covenants of Borrower
Section 6.1. Payment and Performance
Section 6.2. Books, Financial Statements and Reports
Section 6.3. Other Information and Inspections
Section 6.4. Notice of Material Events and Changes of Name or Address
Section 6.5. Maintenance of Properties
Section 6.6. Maintenance of Existence and Qualifications
Section 6.7. Payment of Trade Debt, Taxes, etc.
Section 6.8. Insurance
Section 6.9. Payment of Expenses
Section 6.10. Performance on Borrower's Behalf
Section 6.11. Interest
Section 6.12. Compliance with Agreements and Law
Section 6.13. Evidence of Compliance
Section 6.14. Subsidiary Guarantors
Section 6.15. Bank Accounts; Offset
Section 6.16. Agreement to Deliver Security Documents; Sale of MWCA, Inc.
Section 6.17. Perfection and Protection of Security Interests and Liens
ARTICLE VII - Negative Covenants of Borrower
Section 7.1. Limitation on Debt and Liens
Section 7.2. Hedging Contracts
Section 7.3. Limitation on Mergers, Issuances of Securities
Section 7.4. Limitation on Sales of Property
Section 7.5. Limitation on Dividends and Redemptions
Section 7.6. Limitation on Investments and New Businesses
Section 7.7. Limitation on Credit Extensions
Section 7.8. Transactions with Affiliates
Section 7.9. ERISA Plans
Section 7.10. Fiscal Year
Section 7.11. Working Capital and Current Ratio
Section 7.12. Fixed Charge Coverage Ratio
Section 7.13. Tangible Net Worth
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ARTICLE VIIA - Guaranty
Section 7A.1. Guaranty
Section 7A.2. Unconditional Guaranty
Section 7A.3. Waiver
Section 7A.4. No Subrogation
Section 7A.5. Subordination
ARTICLE VIII - Events of Default and Remedies
Section 8.1. Events of Default
Section 8.2. Remedies
ARTICLE IX - Agent
Section 9.1. Appointment, Powers, and Immunities
Section 9.2. Reliance by Agent
Section 9.3. Defaults
Section 9.4. Rights as Lender
Section 9.5. Indemnification
Section 9.6. Non-Reliance on Agent and Other Lenders
Section 9.7. Sharing of Set-Offs and Other Payments
Section 9.8. Investments
Section 9.9. Benefit of Article IX
Section 9.10. Resignation
ARTICLE X - Miscellaneous
Section 10.1. Waivers and Amendments; Acknowledgments
Section 10.2. Survival of Agreements; Cumulative Nature
Section 10.3. Notices
Section 10.4. Indemnity
Section 10.5. Joint and Several Liability; Parties in Interest
Section 10.6. Assignments and Participations
Section 10.7. Confidentiality
Section 10.8. Governing Law; Submission to Process
Section 10.9. Limitation on Interest
Section 10.10. Termination; Limited Survival
Section 10.11. Severability
Section 10.12. Counterparts; Fax
Section 10.13. Waiver of Jury Trial, Punitive Damages, etc.
Section 10.14. Amendment and Restatement
Section 10.15. No Novation or Release
Section 10.16. Ratification
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Schedules and Exhibits:
Schedule 1 - Disclosure Schedule
Schedule 2 - Security Schedule
Schedule 3 - Borrower's Subsidiaries
Schedule 4 - Approved Foreign Receivables Account Debtors
Exhibit A - Promissory Note
Exhibit B - Borrowing Notice
Exhibit C - Continuation/Conversion Notice
Exhibit D - Certificate Accompanying Financial Statements
Exhibit E - Opinion of Counsel for Related Persons
Exhibit F - Assignment and Acceptance Agreement
Exhibit G - Letter of Credit Application and Agreement
Exhibit H - Borrower Security Agreement
Exhibit I - Subsidiary Guarantor Security Agreement
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CREDIT AGREEMENT
THIS RESTATED CREDIT AGREEMENT is made as of May 7, 1999, by and among
HECLA MINING COMPANY, a Delaware corporation (herein called "Borrower"), the
Subsidiary Guarantors referred to below, NATIONSBANK, N.A., individually and as
agent (herein called "Agent") and the Lenders referred to below. In
consideration of the mutual covenants and agreements contained herein the
parties hereto agree as follows:
ARTICLE I - Definitions and References
Section 1.1. Defined Terms. As used in this Agreement, each of the
following terms has the meaning given to such term in this Section 1.1 or in the
sections and subsections referred to below:
"ADJUSTED BASE RATE" means the Base Rate plus the Base Rate Margin. No
Adjusted Base Rate charged by any Person shall ever exceed the Highest Lawful
Rate.
"ADJUSTED CD RATE" means, for any CD Loan for any CD Interest Period
therefor, the rate per annum equal to the sum of (a) the Fixed Rate Margin plus
(b) the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) determined by Agent to be equal to the sum of (i) the CD Rate for such CD
Loan for such CD Interest Period divided by 1 minus the Reserve Requirement for
such CD Loan for such CD Interest Period plus (ii) the Assessment Rate. The
Adjusted CD Rate for any CD Loan shall change whenever the Fixed Rate Margin or
the Reserve Requirement changes. No Adjusted CD Rate charged by any Person
shall ever exceed the Highest Lawful Rate.
"ADJUSTED EURODOLLAR RATE" means, for any Eurodollar Loan for any
Eurodollar Interest Period therefor, the rate per annum equal to the sum of
(a) the Fixed Rate Margin plus (b) the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) determined by Agent to be equal to the
quotient obtained by dividing (i) the Eurodollar Rate for such Eurodollar Loan
for such Eurodollar Interest Period by (ii) 1 minus the Reserve Requirement for
such Eurodollar Loan for such Eurodollar Interest Period. The Adjusted
Eurodollar Rate for any Eurodollar Loan shall change whenever the Fixed Rate
Margin or the Reserve Requirement changes. No Adjusted Eurodollar Rate charged
by any Person shall ever exceed the Highest Lawful Rate.
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"AFFILIATE" means, as to any Person, each other Person that directly or
indirectly (through one or more intermediaries or otherwise) controls, is
controlled by, or is under common control with, such Person. A Person shall be
deemed to be "controlled by" any other Person if such other Person possesses,
directly or indirectly, power
(a) to vote 20% or more of the securities (on a fully diluted basis)
having ordinary voting power for the election of directors or managing general
partners; or
(b) to direct or cause the direction of the management and policies of
such Person whether by contract or otherwise.
"AGENT" means NationsBank, N.A., as Agent hereunder, and its successors in
such capacity.
"AGREEMENT" means this Restated Credit Agreement.
"APPLICABLE LENDING OFFICE" means, for each Lender and for each Type of
Loan, the "Lending Office" of such Lender (or of an Affiliate of such Lender)
designated for such Type of Loan on the signature pages hereof or such other
office of such Lender (or an Affiliate of such Lender) as such Lender may from
time to time specify to Agent and Borrower by written notice in accordance with
the terms hereof as the office by which its Loans of such Type are to be made
and maintained.
"ASSESSMENT RATE" means, for any day, the annual assessment rate (rounded
upwards, if necessary, to the nearest 1/100 of 1%) which is payable by Agent (in
its individual capacity) to the Federal Deposit Insurance Corporation (or any
successor) for deposit insurance for United States dollar time deposits with
Agent (in its individual capacity) at its principal office as determined by
Agent. The Adjusted CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Assessment Rate.
"BASE RATE" means, for any day, the rate per annum equal to the higher of
(a) the Federal Funds Rate for such day plus one-half of one percent (0.5%) and
(b) the Prime Rate for such day. Any change in the Base Rate due to a change in
the Prime Rate or the Federal Funds Rate shall be effective on the effective
date of such change in the Prime Rate or Federal Funds Rate. As used in this
definition, "Prime Rate" means the per annum rate of interest established from
time to time by the Reference Bank as its prime rate, which rate may not be the
lowest rate of interest charged by Agent to its customers.
"BASE RATE LOAN" means a Loan which does not bear interest at a Fixed Rate.
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"BASE RATE MARGIN" means, on each day:
FACILITY USAGE BASE RATE MARGIN
less than or equal to twenty- 15 Basis Points (0.15%)
five percent (25%) of the per annum
Borrowing Base
less than or equal to fifty 35 Basis Points (0.35%)
percent (50%) but greater than per annum
twenty-five percent (25%) of the
Borrowing Base
less than or equal to seventy- 80 Basis Points (0.80%)
five percent (75%) but greater per annum
than fifty percent (50%) of the
Borrowing Base
greater than seventy-five 100 Basis Points (1.0%)
percent of the Borrowing Base per annum
(75%)
PROVIDED THAT on August 31, 1999, the Base Rate Margin for all percentages of
Facility Usage shall be increased by Fifty Basis Points (0.5%) if Borrower shall
not have received the Minimum Net Proceeds on or prior to such date and such
increase shall remain in effect until such time as Borrower shall have received
the Minimum Net Proceeds.
"BASIS POINT" means one one-hundredth of one percent (0.01%).
"BONDS" means the bonds issued under the Indenture.
"XXXX XX" means that certain letter of credit issued by LC Issuer, which
provides for payment of the Bonds, and any letter of credit issued by LC Issuer
in substitution therefor in accordance with the terms of this Agreement and the
original Xxxx XX.
"XXXX XX CASH COLLATERAL" has the meaning set forth in Section 2.18(b).
"XXXX XX COLLATERAL ACCOUNT" has the meaning given it in Section 2.18(b).
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"XXXX XX OBLIGATIONS" means all LC Obligations arising with respect to the
Xxxx XX.
"BORROWER" means Hecla Mining Company, a Delaware corporation.
"BORROWER SECURITY AGREEMENT" shall mean the Security Agreement of Borrower
in favor of Agent substantially in the form of Exhibit H attached hereto.
"BORROWING" means a borrowing of new Loans of a single Type pursuant to
Section 2.2 or a Continuation or Conversion of existing Loans into a single Type
(and, in the case of Fixed Rate Loans, with the same Interest Period) pursuant
to Section 2.3 and a combination of new Loans and a Continuation or Conversion
of existing Loans in a single Type (and, in the case of Fixed Rate Loans, with
the same Interest Period).
"BORROWING BASE" means the sum of (i) the Working Capital Borrowing Base
and (ii) the Cash Earnings Borrowing Base; provided, however, that in no event
shall the Borrowing Base ever exceed the Maximum Credit Amount.
"BORROWING BASE DEFICIENCY" has the meaning given to such term in Section
2.7.
"BORROWING BASE REPORT" means a report in a form reasonably acceptable to
Agent, appropriately completed, together with the following attachments: (a) a
detailed aged schedule of all Eligible Receivables as of the date specified in
such report, listing face amounts and dates of invoices of each such Eligible
Receivable (and, upon request of Agent, a list of all Eligible Receivables,
listing the name and address of each account debtor, copies of invoices, credit
reports, and any other matters and information relating to the Eligible
Receivables), and (b) a schedule of Eligible Inventory, setting forth the
location of all such Eligible Inventory (other than Eligible Inventory in
transit), including Eligible Inventory not in the possession of Borrower and the
name of the Person in possession thereof and whether and how much of such
Eligible Inventory consists of raw material, finished goods or otherwise.
"BORROWING NOTICE" means a written or telephonic request, or a written
confirmation, made by Borrower which meets the requirements of Section 2.2.
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"BUSINESS DAY" means a day, other than a Saturday or Sunday, on which
commercial banks are open for business with the public in Dallas, Texas. Any
Business Day in any way relating to CD Loans (such as the day on which a CD
Interest Period begins or ends) must also be a day on which, in the judgment of
Agent, significant transactions are carried out in the market for certificates
of deposit. Any Business Day in any way relating to Eurodollar Loans (such as
the day on which a Eurodollar Interest Period begins or ends) must also be a day
on which, in the judgment of Agent, significant transactions in dollars are
carried out in the interbank eurocurrency market.
"CASH COLLATERAL" means, collectively, the General XX Xxxx Collateral and
the Xxxx XX Cash Collateral.
"CASH EARNINGS" means as of the end of any calendar month, Borrower's
Consolidated net income for the twelve (12) consecutive calendar months then
ended PLUS (i) nonrecurring losses for such calendar month, (ii) other non-cash
charges taken into account in determining such net income and (iii) exploration
expenses taken into account in determining such net income, but only to the
extent that exploration expenses exceed $3,000,000, MINUS (iv) nonrecurring
gains taken into account in determining such net income, and (v) any cash
dividends that have been declared, accrued or paid (without duplication) on
common or preferred stock during such twelve-month period.
"CASH EARNINGS BORROWING BASE" means, for any calendar month, two hundred
percent (200%) of Borrower's Cash Earnings calculated as of the end of the
second calendar month preceding such calendar month.
"CD LOANS" means Loans that bear interest at rates based upon the Adjusted
CD Rate.
"CD RATE" means, for any CD Loan for any CD Interest Period therefor, the
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
determined by Agent to be the average of the bid rates quoted to the Reference
Bank at approximately 10:00 a.m. New York, New York time (or as soon thereafter
as practicable) on the first day of such CD Interest Period by two (2) or more
certificate of deposit dealers of recognized national standing selected by the
Reference Bank for the purchase at face value of certificates of deposit of such
Reference Bank having a term comparable to such CD Interest Period and in an
amount comparable to the principal amount of the CD Loan to be made by the
Reference Bank for such CD Interest Period.
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"CD INTEREST PERIOD" means, with respect to each particular CD Loan in a
Borrowing, a period of 30, 60, 90 or 180 days, as specified in the Borrowing
Notice or Continuation/Conversion Notice applicable thereto, beginning on and
including the date specified in such Borrowing Notice or Continuation/Conversion
Notice (which must be a Business Day), and ending on but not including the day
which is 30, 60 or 90 or 180 days thereafter (e.g., a 30-day period beginning
on April 1 will end on but not include April 30); provided that: (a) any CD
Interest Period which would otherwise end on a day which is not a Business Day
shall be extended to the next succeeding Business Day unless such Business Day
falls in another calendar month, in which case such Interest Period shall end on
the next preceding Business Day; and (b) any CD Interest Period which begins on
the last Business Day in a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day in a calendar month; and (c)
notwithstanding the foregoing, any CD Interest Period which would otherwise end
after the last day of the Commitment Period shall end on the last day of the
Commitment Period (or, if the last day of the Commitment Period is not a
Business Day, on the next preceding Business Day).
"CHANGE OF CONTROL" means the occurrence of either of the following events:
(a) any Person or two or more Persons acting as a group shall acquire beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Act of 1934, as amended, and including holding
proxies to vote for the election of directors other than proxies held by
Borrower's management or their designees to be voted in favor of Persons
nominated by Borrower's Board of Directors) of 25% or more of the outstanding
voting securities of Borrower, measured by voting power (including both common
stock and any preferred stock or other equity securities entitling the holders
thereof to vote with the holders of common stock in elections for directors of
Borrower) or (b) a majority of the directors of Borrower shall consist of
Persons not nominated by Borrower's Board of Directors (not including as Board
nominees any directors which the Board is obligated to nominate pursuant to
shareholders agreements, voting trust arrangements or similar arrangements).
"COLLATERAL" means all property of any kind which is subject to a Lien in
favor of Lenders (or in favor of Agent for the benefit of Lenders) or which,
under the terms of any Security Document, is purported to be subject to such a
Lien.
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"COMMITMENT PERIOD" means the period from and including the date hereof
until December 31, 2001 (or, if earlier, the day on which the obligations of
Lenders to make Loans hereunder or the obligations of LC Issuer to issue Letters
of Credit hereunder have been terminated or the Notes first become due and
payable in full).
"CONSOLIDATED" refers to the consolidation of any Person, in accordance
with GAAP, with its properly consolidated subsidiaries. References herein to a
Person's Consolidated financial statements, financial position, financial
condition, liabilities, etc. refer to the consolidated financial statements,
financial position, financial condition, liabilities, etc. of such Person and
its properly consolidated subsidiaries.
"CONTINUATION" shall refer to the continuation pursuant to Section 2.3
hereof of a Fixed Rate Loan of one Type as a Fixed Rate Loan of the same Type
from one Interest Period to the next Interest Period.
"CONTINUATION/CONVERSION NOTICE" means a written or telephonic request, or
a written confirmation, made by Borrower which meets the requirements of Section
2.3.
"CONVERT, CONVERSION AND CONVERTED" shall refer to a conversion pursuant to
Section 2.3 or Article III of one Type of Loan into another Type of Loan.
"DEBT" means, as to any Person, all indebtedness, liabilities and
obligations of such Person, whether matured or unmatured, liquidated or
unliquidated, primary or secondary, direct or indirect, absolute, fixed or
contingent, and whether or not required to be considered pursuant to GAAP.
"DEFAULT" means any Event of Default and any default, event or condition
which would, with the giving of any requisite notices and the passage of any
requisite periods of time, constitute an Event of Default.
"DEFAULT RATE" means, at the time in question (a) with respect to any Base
Rate Loan or any Obligation which is not a Loan, the rate per annum equal to
three percent (3%) above the Adjusted Base Rate then in effect, (b) with
respect to any Eurodollar Loan, the rate per annum equal to three percent (3%)
above the Adjusted Eurodollar Rate then in effect, and (c) with respect to any
CD Rate Loan, the rate per annum equal to three percent (3%) above the Adjusted
CD Rate then in effect. No Default Rate charged by any Person shall ever exceed
the Highest Lawful Rate.
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"DETERMINATION DATE" has the meaning given to such term in Section 2.9.
"DISCLOSURE REPORT" means either a notice given by Borrower under Section
6.4 or a certificate given by Borrower's chief financial officer under Section
6.2(b).
"DISCLOSURE SCHEDULE" means Schedule 1 hereto.
"DOMESTIC LENDING OFFICE" means, with respect to any Lender, the office of
such Lender specified as its "Domestic Lending Office" below its name on its
signature page hereto, or such other office as such Lender may from time to time
specify to Borrower and Agent; with respect to LC Issuer, the office, branch, or
agency through which it issues Letters of Credit; and, with respect to Agent,
the office, branch, or agency through which it administers this Agreement.
"EBITDA" means as of the end of any Fiscal Quarter, Borrower's Consolidated
net income for the four consecutive Fiscal Quarters then ended plus exploration
expenses in excess of $3,000,000, interest, taxes, depreciation and
amortization, nonrecurring losses and reclamation charges, to the extent the
foregoing have been deducted in determining such net income, minus nonrecurring
gains to the extent such gains have been included in determining such net
income.
"ELIGIBLE INVENTORY" means Eligible Other Inventory and Eligible MWCA
Inventory.
"ELIGIBLE MWCA INVENTORY" means any Product which is owned by MWCA, Inc.
prior to the occurrence of a MWCA Triggering Event and which:
(a) is located at a mine or a processing plant owned by MWCA, Inc. or is
in transit to a mill or processing plant owned by MWCA, Inc.; and
(b) such mine, processing plant, or mill:
(i) IS LOCATED IN THE UNITED STATES in a state in respect of which
Agent has received Security Documents from MWCA, Inc. granting Agent a
security interest in such Product pursuant to Section 6.16(c) or, if in
transit, will be located in such a state immediately upon reaching its
destination, or
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(ii) IS NOT LOCATED IN THE UNITED STATES, but the aggregate amount of
all such Eligible Inventory described in this subsection (ii) and in
subsection (b)(ii) of the definition of Eligible Other Inventory and
included in the Borrowing Base does not exceed 20% of all Eligible
Inventory; and
(c) such Product is fully and adequately insured pursuant to Section 6.8
with Agent named as loss payee as its interests may appear; and
(d) such Product is categorized on the Borrower's Consolidated balance
sheet as "Products on hand and in Transit; Concentrates and Metals in transit,
and Industrial mineral product."
"ELIGIBLE OTHER INVENTORY" means any Product which is owned by Borrower or
any Subsidiary Guarantor (excluding MWCA, Inc. until the occurrence of a MWCA
Triggering Event) and which:
(a) is located at a mine or a processing plant owned by Borrower or any
Subsidiary Guarantor (excluding MWCA, Inc. until the occurrence of a MWCA
Triggering Event) or is in transit to a smelter, mill or refinery owned by any
such Persons; and
(b) such mine or processing plant, or such smelter, mill or refinery:
(i) IS LOCATED IN THE UNITED STATES in a state in respect of which
Agent has received an opinion of counsel, in form and substance
satisfactory to Agent, to the effect that the Product located in such state
is subject to an enforceable and duly perfected security interest in favor
of Agent or, if in transit, will be located in such a state immediately
upon reaching its destination, or
(ii) IS NOT LOCATED IN THE UNITED STATES, but the aggregate amount of
all such Eligible Inventory described in this subsection (ii) and in
subsection (b)(ii) of the definition of Eligible MWCA Inventory and
included in the Borrowing Base does not exceed 20% of all Eligible
Inventory; and
(c) if such Product is located in the United States, such Product is
subject to an enforceable security interest in favor of Agent which is duly
perfected and of first priority, or if in transit, will be duly perfected and of
first priority immediately upon reaching its destination; and
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(d) such Product is fully and adequately insured pursuant to Section 6.8
with Agent named as loss payee as its interests may appear; and
(e) such Product is categorized on the Borrower's Consolidated balance
sheet as "Products on hand and in Transit; Concentrates and Metals in transit,
and Industrial mineral product".
"ELIGIBLE RECEIVABLES" means at any time an amount equal to the aggregate
net invoice or ledger amount owing on all trade accounts receivable of Borrower,
and any Subsidiary Guarantor:
(a) arising from the sale of Products by Borrower or Subsidiary Guarantor
to account debtors which are not Affiliates of such Person in the ordinary
course of such Person's business;
(b) upon which such Person's right to receive payment is absolute and not
contingent upon the fulfillment of any condition whatsoever and upon which the
account debtor has no defense or counterclaims;
(c) that are payable in the United States in United States dollars;
(d) that are subject to a perfected first priority security interest in
favor of Agent, for the benefit of Lenders, and the terms of which do not
restrict or prohibit the granting of such security interest; and
(e) that are not in default.
An account shall be deemed in default if: (i) it is not paid within the ninety
(90) days after the date of delivery of the related Products to the account
debtor or, if such account arises under an Extended Term Contract (as defined in
this paragraph) within thirty (30) days after the payment date required under
the Extended Term Contract, but in no event to exceed one-hundred eighty (180)
days after the date of delivery of the related Products to the account debtor;
(ii) more than 25% of the aggregate amount of all accounts owed by a single
account debtor (or its Affiliates) are being contested by appropriate
proceedings in good faith by such account debtor or are in default under
subparagraph (i) above; (iii) any account debtor obligated upon such account
suspends business, makes a general assignment for the benefit of creditors; or
fails to pay its debts generally as they come due; or (iv) the account debtor
obligated upon such account is insolvent or otherwise not
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satisfactory to Agent; provided, however, that not more than fifty percent (50%)
of the total of Eligible Receivables shall consist of receivables from sales of
Products to purchasers located outside the United States (other than Approved
Foreign Receivables as such term is defined in this paragraph). As used in this
paragraph, the term "Extended Term Contract" means a contract for the sale of
Products under which the account debtor is granted payment terms in excess of
thirty (30) days after the date of delivery thereof to such account debtor, and
the term "Approved Foreign Receivable" means each Eligible Receivable from any
Person described on Schedule 4.
"ELIGIBLE TRANSFEREE" means a Person which either (a) is a Lender or an
Affiliate of a Lender, or (b) is consented to as an Eligible Transferee by Agent
and, so long as no Default or Event of Default is continuing, by Borrower, which
consents in each case will not be unreasonably withheld (provided that no Person
organized outside the United States may be an Eligible Transferee if Borrower
would be required to pay withholding taxes on interest or principal owed to such
Person).
"ENVIRONMENTAL LAWS" means any and all Laws relating to the environment or
to emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or wastes
into the environment including ambient air, surface water, ground water, or
land, or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, together with all rules and regulations promulgated
with respect thereto.
"ERISA AFFILIATE" means Borrower and all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control that, together with Borrower, are treated as a single employer
under Section 414 of the Internal Revenue Code.
"ERISA PLAN" means any employee pension benefit plan subject to Title IV of
ERISA maintained by any ERISA Affiliate with respect to which any Related Person
has a fixed or contingent liability.
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"EURODOLLAR INTEREST PERIOD" means, with respect to each particular
Eurodollar Loan in a Borrowing, the period specified in the Borrowing Notice or
Continuation/Conversion Notice applicable thereto, beginning on and including
the date specified in such Borrowing Notice or Continuation/Conversion Notice
(which must be a Business Day), and ending one, two, three, or six months
thereafter, as Borrower may elect in such notice; provided that: (a) any
Eurodollar Interest Period which would otherwise end on a day which is not a
Business Day shall be extended to the next succeeding Business Day unless such
Business Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Business Day; and (b) any Eurodollar Interest
Period which begins on the last Business Day in a calendar month (or on a day
for which there is no numerically corresponding day in the calendar month at the
end of such Interest Period) shall end on the last Business Day in a calendar
month; and (c) notwithstanding the foregoing, any Eurodollar Interest Period
which would otherwise end after the last day of the Commitment Period shall end
on the last day of the Commitment Period (or, if the last day of the Commitment
Period is not a Business Day, on the next preceding Business Day).
"EURODOLLAR LENDING OFFICE" means, with respect to any Lender, the office
of such Lender specified as its "Eurodollar Lending Office" below its name on
the signature page hereto (or, if no such office is specified, its Domestic
Lending Office), or such other office of such Lender as such Lender may from
time to time specify to Borrower and Agent.
"EURODOLLAR LOAN" means a Loan that bears interest at the Adjusted
Eurodollar Rate.
"EURODOLLAR RATE" means, for any Eurodollar Loan within a Borrowing and
with respect to the related Interest Period therefor, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Dow
Xxxxx Market Service (formerly Telerate Access Service) Page 3750 (or any
successor page) as the London interbank offered rate for deposits in United
States dollars at approximately 11:00 a.m. (London time) two Business Days prior
to the first day of such Interest Period for a term comparable to such Interest
Period. If for any reason such rate is not available, the term "Eurodollar
Rate" shall mean, for any Eurodollar Loan within a Borrowing and with respect to
the related Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as
the London interbank
18
offered rate for deposits in Dollars at approximately 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest Period for a
term comparable to such Interest Period; provided, however, if more than one
rate is specified on Reuters Screen LIBO Page, the applicable rate shall be the
arithmetic mean of all such rates (rounded upwards, if necessary, to the nearest
1/100 of 1%).
"EVENT OF DEFAULT" has the meaning given to such term in Section 8.1.
"EXISTING CREDIT AGREEMENT" means that certain Credit Agreement dated as of
August 11, 1997 among Borrower, Agent and the Lenders parties thereto, as
supplemented or amended to the date hereof, together with the promissory notes
made by Borrower thereunder.
"FACILITY USAGE" means, at the time in question, the aggregate amount of
outstanding Loans and existing LC Obligations at such time.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100th of one percent) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of Dallas, on the Business Day
next succeeding such day, provided that (a) if the day for which such rate is to
be determined is not a Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (b) if such rate is not so
published for any day, the Federal Funds Rate for such day shall be the average
rate quoted to Agent on such day on such transactions as determined by Agent.
"FISCAL QUARTER" means a three-month period ending on March 31, June 30,
September 30 or December 31 of any year.
"FISCAL YEAR" means a twelve-month period ending on December 31 of any
year.
"FIXED CHARGES" means as of the end of any Fiscal Quarter, the sum of the
following for the period of four consecutive Fiscal Quarters then ended (i)
Borrower's Consolidated interest expense for such period, plus (ii) Borrower's
Consolidated long-
19
term debt scheduled to be paid or scheduled to be paid during such period, plus
(iii) Borrower's Consolidated capital lease payments paid during such period,
plus (iv) dividends on common and preferred stock declared or paid (without
duplication) by Borrower during such period, plus (v) Borrower's Consolidated
reclamation expenditures paid during such period; PROVIDED however, that during
the period through and including December 31, 1999, Fixed Charges shall be
reduced by the net proceeds from sales of real property and the Metalline
Contact Mines, Inc. shares, which are non-recurring gains.
"FIXED RATE" means, with respect to any Fixed Rate Loan, the related
Adjusted Eurodollar Rate or Adjusted CD Rate.
"FIXED RATE LOANS" means any CD Loans or any Eurodollar Loans or both.
"FIXED RATE MARGIN" means, on each day:
FACILITY USAGE FIXED RATE MARGIN
less than or equal to twenty- 140 Basis Points (1.4%)
five percent (25%) of the per annum
Borrowing Base
less than or equal to fifty 160 Basis Points (1.6%)
percent (50%) but greater than per annum
twenty-five percent (25%) of
the Borrowing Base
less than or equal to seventy- 205 Five Basis Points (2.05%)
five percent (75%) but greater per annum
than fifty percent (50%) of the
Borrowing Base
greater than seventy-five 225 Basis Points (2.25%)
percent (75%) of the Borrowing per annum
Base
PROVIDED THAT on August 31, 1999, the Fixed Rate Margin for all percentages of
Facility Usage shall be increased by Fifty Basis Points (0.5%) if Borrower shall
not have received the Minimum Net Proceeds on or prior to such date and such
increase shall remain in effect until such time as Borrower shall have received
the Minimum Net Proceeds.
"FUNDED DEBT"of any Person means Debt in the following categories,
calculated without duplication:
20
(a) Debt for borrowed money or gold loans (excluding Hedging Obligations);
and
(b) Debt evidenced by a bond, debenture, note or similar instrument.
"GAAP" means those generally accepted accounting principles and practices
which are recognized as such by the Financial Accounting Standards Board (or any
generally recognized successor) and which, in the case of Borrower and its
Consolidated Subsidiaries, are applied for all periods after the date hereof in
a manner consistent with the manner in which such principles and practices were
applied to the audited Initial Financial Statements. If any change in any
accounting principle or practice is required by the Financial Accounting
Standards Board (or any such successor) in order for such principle or practice
to continue as a generally accepted accounting principle or practice, all
reports and financial statements required hereunder with respect to Borrower or
with respect to Borrower and its Consolidated Subsidiaries may be prepared in
accordance with such change, but all calculations and determinations to be made
hereunder may be made in accordance with such change only after notice of such
change is given to each Lender, and Majority Lenders and Borrower agree to such
change insofar as it affects the accounting of Borrower or of Borrower and its
Consolidated Subsidiaries.
"GENERAL XX XXXX COLLATERAL" has the meaning given it in Section 2.18(b).
"GENERAL LC COLLATERAL ACCOUNT" has the meaning given it in Section
2.18(b).
"GENERAL LC OBLIGATIONS" means all LC Obligations other than Xxxx XX
Obligations.
"HAZARDOUS MATERIALS" means any substances regulated under any
Environmental Law, whether as pollutants, contaminants, or chemicals, or as
industrial, toxic or hazardous substances or wastes, or otherwise.
"HEDGING CONTRACT" means (a) any agreement providing for options, swaps,
floors, caps, collars, forward sales or forward purchases involving interest
rates, commodities or commodity prices, equities, currencies, bonds, or indexes
based on any of the foregoing, (b) any option, futures or forward contract
traded on an exchange, and (c) any other derivative agreement or other similar
agreement or arrangement.
21
"HEDGING OBLIGATIONS" means all of the following:
(a) any and all present or future obligations of one or more of the
Related Persons to any one or more Lenders (or any affiliate of any Lender)
according to the terms of any present or future interest or currency rate swap,
rate cap, rate floor, rate collar, exchange transaction, forward rate agreement,
or other exchange or rate protection agreements or any option with respect to
any such transaction now existing or hereafter entered into between any of the
Related Persons and one or more parties constituting any Lender (or any
affiliate of any Lender); and
(b) any and all present or future obligations of one or more Related
Persons to any one or more Lenders (or to any affiliate of any Lender) according
to the terms of any present or future swap agreements, cap, floor, collar,
exchange transaction, forward agreement or other exchange or protection
agreements relating to gold or other minerals, or any option with respect to any
such transaction now existing or hereafter entered into between any of the
Related Persons and one or more parties constituting any Lender (or any
affiliate of any Lender).
"HIGHEST LAWFUL RATE" means, with respect to each Lender Party to whom
Obligations are owed, the maximum nonusurious rate of interest that such Lender
Party is permitted under applicable Law to contract for, take, charge, or
receive with respect to such Obligations. All determinations herein of the
Highest Lawful Rate, or of any interest rate determined by reference to the
Highest Lawful Rate, shall be made separately for each Lender Party as
appropriate to assure that the Loan Documents are not construed to obligate any
Person to pay interest to any Lender Party at a rate in excess of the Highest
Lawful Rate applicable to such Lender Party.
"INDENTURE" means that certain Indenture of Trust dated as of October 1,
1995 between The Industrial Development Corporation of Xxxxxx County, Idaho and
Norwest Bank of Minnesota, National Association, as Trustee, pursuant to which
the solid waste disposal revenue bonds (Hecla Mining Company Project) series
1995 were issued.
"INITIAL FINANCIAL STATEMENTS" means the audited annual Consolidated
financial statements of Borrower dated as of December 31, 1998.
22
"INTEREST PAYMENT DATE" means (a) with respect to each Base Rate Loan, the
last Business Day of each April, June, September and December, and (b) with
respect to each Fixed Rate Loan, the last day of the Interest Period that is
applicable thereto and, if such Interest Period is more than three months or
ninety (90) days in length, the date specified by Agent which is approximately
three months after such Interest Period begins; provided that the last Business
Day of each calendar month shall also be an Interest Payment Date for each such
Fixed Rate Loan so long as any Event of Default exists under Section 8.1 (a) or
(b).
"INTEREST PERIOD" means with respect to any Fixed Rate Loan, the related CD
Interest Period or Eurodollar Interest Period.
"INTERNAL REVENUE CODE" means the United States Internal Revenue Code of
1986, as amended from time to time and any successor statute or statutes.
"INVESTMENT" means any investment made directly or indirectly, in any
Person, whether by acquisition of shares of capital stock, indebtedness or other
obligations or securities or by loan, advance, capital contribution or otherwise
and whether made in cash, by the transfer of property, or by any other means.
"LAW" means any statute, law, regulation, ordinance, rule, treaty,
judgment, order, decree, permit, concession, franchise, license, agreement or
other governmental restriction of the United States or any state or political
subdivision thereof or of any foreign country or any department, province or
other political subdivision thereof.
"LC APPLICATION" means any application for a Letter of Credit hereafter
made by Borrower to LC Issuer.
"LC ISSUER" means NationsBank, N.A. in its capacity as the issuer of
Letters of Credit hereunder, and its successors in such capacity. Agent may,
with the consent of Borrower and the Lender in question, appoint any Lender
hereunder as an LC Issuer in place of or in addition to NationsBank, N.A.
"LC OBLIGATIONS" means, at the time in question, the sum of all Matured LC
Obligations plus the maximum amounts which LC Issuer might then or thereafter be
called upon to advance under all Letters of Credit then outstanding.
"LC SUBLIMIT" means the amount of $10,000,000.
23
"LENDER PARTIES" means Agent, LC Issuer, and all Lenders.
"LENDERS" means each signatory hereto (other than Borrower and any Related
Person that is a party hereto), including NationsBank, N.A. in its capacity as
a Lender hereunder rather than as Agent or LC Issuer, and the successors of each
such party as holder of a Note.
"LETTER OF CREDIT" means any letter of credit issued by LC Issuer hereunder
at the application of Borrower or the Xxxx XX.
"LIEN" means, with respect to any property or assets, any right or interest
therein of a creditor to secure Debt owed to it or any other arrangement with
such creditor which provides for the payment of such Debt out of such property
or assets or which allows such creditor to have such Debt satisfied out of such
property or assets prior to the general creditors of any owner thereof,
including any lien, mortgage, security interest, pledge, deposit, production
payment, rights of a vendor under any title retention or conditional sale
agreement or lease substantially equivalent thereto, tax lien, mechanic's or
materialman's lien, or any other charge or encumbrance for security purposes,
whether arising by Law or agreement or otherwise, but excluding any right of
offset which arises without agreement in the ordinary course of business.
"Lien" also means any filed financing statement, any registration of a pledge
(such as with an issuer of uncertificated securities), or any other arrangement
or action which would serve to perfect a Lien described in the preceding
sentence, regardless of whether such financing statement is filed, such
registration is made, or such arrangement or action is undertaken before or
after such Lien exists.
"LOAN AGREEMENT" means that certain Loan Agreement dated as of October 1,
1995, between Borrower and The Industrial Development Corporation of Xxxxxx
County, Idaho.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Security Documents,
the Letters of Credit, the LC Applications, and all other agreements,
certificates, documents, instruments and writings at any time delivered in
connection herewith or therewith (exclusive of term sheets and commitment
letters).
"LOANS" has the meaning given to such term in Section 2.1.
"MAJORITY LENDERS" means (i) so long as there are two Lenders, Lenders
whose aggregate Percentage Shares equal one hundred percent (100%) and (ii) at
any time there are three or more Lenders and no one Lender has a Percentage
Share equal to or greater than sixty-six and two-thirds percent (66 2/3%),
Lenders whose aggregate Percentage Shares equal or exceed sixty-six and
two-thirds percent (66 2/3%).
24
"MATERIAL SUBSIDIARY" means each Subsidiary of Borrower that is designated
as a "Material Subsidiary" on Schedule 3 hereto.
"MATURED LC OBLIGATIONS" means all amounts paid by LC Issuer on drafts or
demands for payment drawn or made under or purported to be under any Letter of
Credit and all other amounts due and owing to LC Issuer under any LC Application
for any Letter of Credit, to the extent the same have not been repaid to LC
Issuer (with the proceeds of Loans or otherwise).
"MATURITY DATE" means December 31, 2003.
"MAXIMUM CREDIT AMOUNT" means the amount of $55,000,000.
"MAXIMUM DRAWING AMOUNT" means at the time in question the sum of the
maximum amounts which LC Issuer might then or thereafter be called upon to
advance under all Letters of Credit which are then outstanding.
"MAXIMUM GUARANTEED AMOUNT" means with respect to any Subsidiary Guarantor
as of the date of determination, the lesser of (a) the amount of the Obligations
outstanding on such date and (b) the largest amount that would not render such
Subsidiary Guarantor's guarantee of the Obligations hereunder subject to
avoidance under Section 548 of the United States Bankruptcy Code or any
comparable provisions of any applicable state or federal law.
"MINIMUM NET PROCEEDS" means net proceeds from the sale of assets or
capital stock of MWCA, Inc. in an amount equal to or greater than $20,000,000
plus Net Proceeds from New Equity in an amount equal to or greater than
$5,000,000.
"MWCA TRIGGERING EVENT" means the first to occur of any of the following
(a) the failure by Borrower to sell all of the capital stock or all or
substantially all of the assets of MWCA, Inc. by August 31, 1999 or (b) the
occurrence of a Default or Event of Default hereunder.
"NET PROCEEDS FROM NEW EQUITY" means net proceeds received by Borrower from
the issuance of equity securities of the Borrower after January 1, 1999.
"NOTE" has the meaning given to such term in Section 2.1.
25
"OBLIGATIONS" means all Debt from time to time owing by any Related Person
to any Lender Party under or pursuant to any of the Loan Documents, including
all LC Obligations. "Obligation" means any part of the Obligations.
"PERCENTAGE SHARE" means, with respect to any Lender (a) when used in
Sections 2.1 or 2.5, in any Borrowing Notice or when no Loans are outstanding
hereunder, the percentage set forth opposite such Lender's name on its signature
page hereto, and (b) when used otherwise, the percentage obtained by dividing
(i) the sum of the unpaid principal balance of such Lender's Loans at the time
in question plus the Matured LC Obligations which such Lender has funded
pursuant to Section 2.13(c) plus the portion of the Maximum Drawing Amount which
such Lender might be obligated to fund under Section 2.13(c), by (ii) the sum of
the aggregate unpaid principal balance of all Loans at such time plus the
aggregate amount of LC Obligations outstanding at such time.
"PERMITTED DEBT" means (i) the Obligations, and (ii) Funded Debt which
matures after the Maturity Date and is not subject to terms which are more
restrictive than the terms and conditions set forth in this Agreement, as
determined by Majority Lenders in their sole discretion.
"PERMITTED INVESTMENTS" means investments of up to $5,000,000, plus
investments:
(a) in open market commercial paper, maturing within 270 days after
acquisition thereof, which has the highest or second highest credit rating given
by either Standard & Poor's Corporation or Xxxxx'x Investors Service, Inc.
(b) in marketable obligations, maturing within 24 months after acquisition
thereof, issued or unconditionally guaranteed by the United States of America or
an instrumentality or agency thereof and entitled to the full faith and credit
of the United States of America.
(c) in demand deposits, and time deposits (including certificates of
deposit) maturing within 24 months from the date of deposit thereof, with (i)
any office of any Lender, (ii) a domestic office of any national or state bank
or trust company which is organized under the laws of the United States of
America or any state therein, which has capital, surplus and undivided profits
of at least $500,000,000, and whose certificates of deposit have at least the
third highest credit rating given by either Standard & Poor's Corporation or
Xxxxx'x Investors Service, Inc. or (iii) any other bank, provided that the
aggregate amount of all such deposits with all such other banks under this
clause (iii) shall not at any time exceed $5,000,000.
26
(d) in Subsidiary Guarantors.
(e) consisting of acquisitions of existing businesses which are engaged in
the business activities that are the same or similar to those engaged in by
Borrower and Subsidiary Guarantors.
(f) consisting of acquisitions of assets which are used in businesses
engaged in the business activities that are the same or similar to those engaged
in by Borrower and Subsidiary Guarantors.
"PERSON" means an individual, corporation, partnership, limited liability
company, association, joint stock company, trust or trustee thereof, estate or
executor thereof, unincorporated organization or joint venture, Tribunal, or any
other legally recognizable entity.
"PLEDGE AGREEMENT" means that certain Pledge Agreement dated as of October
1, 1995, between Borrower and Agent covering Bonds purchased with funds drawn
under the Xxxx XX.
"PRODUCTS" means all severed and extracted ore, minerals, dore,
concentrates, precipitate, scoria, clay, ball clay, kaolin, feldspar, refined
gold, silver, lead, copper, zinc or other metals, inventory and finished
products derived from the foregoing now owned or hereafter acquired by Borrower
or any Subsidiary Guarantor.
"PROHIBITED LIEN" means any Lien not expressly allowed under Section
7.1(b).
"REFERENCE BANK" means NationsBank, N.A.
"REGULATION D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect.
"RELATED PERSON" means any of Borrower, each Subsidiary Guarantor and each
other Material Subsidiary of Borrower.
"REQUIRED LENDERS" means Lenders whose aggregate Percentage Shares equal
one hundred percent (100%).
27
"RESERVE REQUIREMENT" means, at any time, the maximum rate at which
reserves (including, without limitation, any marginal, special, supplemental, or
emergency reserves) are required to be maintained under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or any
successor) by member banks of the Federal Reserve System against (a) in the case
of Eurodollar Loans, "Eurocurrency liabilities" (as such term is used in
Regulation D) or (b) in the case of CD Loans, non-personal U.S. Dollar time
deposits in an amount of $100,000 or more. Without limiting the effect of the
foregoing, the Reserve Requirement shall reflect any other reserves required to
be maintained by such member banks with respect to (i) any category of
liabilities which includes deposits by reference to which the Adjusted
Eurodollar Rate or Adjusted CD Rate (as the case may be) is to be determined, or
(ii) any category of extensions of credit or other assets which include
Eurodollar Loans or CD Loans. The Adjusted Eurodollar Rate and the Adjusted CD
Rate shall be adjusted automatically on and as of the effective date of any
change in the Reserve Requirement.
"SECURITY DOCUMENTS" means the instruments listed in the Security Schedule
and all other security agreements, deeds of trust, mortgages, chattel mortgages,
pledges, guaranties, financing statements, continuation statements, extension
agreements and other agreements or instruments now, heretofore, or hereafter
delivered by any Related Person to Agent in connection with this Agreement or
any transaction contemplated hereby to secure or guarantee the payment of any
part of the Obligations or the performance of any Related Person's other duties
and obligations under the Loan Documents.
"SECURITY SCHEDULE" means Schedule 2 hereto.
"SUBSIDIARY" means, with respect to any Person, any corporation,
association, partnership, limited liability company, joint venture, or other
business or corporate entity, enterprise or organization which is directly or
indirectly (through one or more intermediaries) controlled by or owned fifty
percent (50%) or more by such Person.
"SUBSIDIARY GUARANTOR" means each of MWCA, Inc., Kentucky-Tennessee Clay
Company, K-T Feldspar Corporation, and any other Subsidiary who has guaranteed
some or all of the Obligations pursuant to Section 6.14.
28
"SUBSIDIARY GUARANTOR SECURITY AGREEMENT" shall mean the Security Agreement
of a Subsidiary Guarantor in favor of Agent for the benefit of Lenders
substantially in the form of Exhibit I attached hereto.
"TERMINATION EVENT" means (a) the occurrence with respect to any ERISA Plan
of (i) a reportable event described in Sections 4043(b)(5) or (6) of ERISA or
(ii) any other reportable event described in Section 4043(b) of ERISA other than
a reportable event not subject to the provision for 30-day notice to the Pension
Benefit Guaranty Corporation pursuant to a waiver by such corporation under
Section 4043(a) of ERISA, or (b) the withdrawal of any ERISA Affiliate from an
ERISA Plan during a plan year in which it was a "substantial employer" as
defined in Section 4001(a)(2) of ERISA, or (c) the filing of a notice of intent
to terminate any ERISA Plan or the treatment of any ERISA Plan amendment as a
termination under Section 4041 of ERISA, or (d) the institution of proceedings
to terminate any ERISA Plan by the Pension Benefit Guaranty Corporation under
Section 4042 of ERISA, or (e) any other event or condition which might
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any ERISA Plan.
"TOTAL DEBT"means Borrower's Consolidated Debt in the following categories,
calculated without duplication:
(a) Obligations;
(b) Funded Debt (other than the Obligations);
(c) Debt constituting principal under leases capitalized in accordance
with GAAP;
(d) Debt with respect to letters of credit or applications or
reimbursement agreements therefor (other than the Obligations); and
(e) Debt with respect to any operating, reclamation or other bond not
secured in whole or in part by a letter of credit or cash deposit.
"TRIBUNAL" means any government, any arbitration panel, any court or any
governmental department, commission, board, bureau, agency or instrumentality of
the United States of America or any state, province, commonwealth, nation,
territory, possession, county, parish, town, township, village or municipality,
whether now or hereafter constituted or existing.
29
"TYPE" means, with respect to any Loan, the characterization of such Loan
as either a Base Rate Loan or Fixed Rate Loan.
"WORKING CAPITAL BORROWING BASE" means the amount determined by Agent from
time to time in its reasonable judgment (which judgment shall be exercised in
good faith) equal to the sum of (a) eighty-five percent (85%) of the Eligible
Receivables; and (b) and seventy-five percent (75%) of Eligible Inventory,
valued at the lower of cost or market value.
Section 1.2. Exhibits and Schedules; Additional Definitions. All
Exhibits and Schedules attached to this Agreement are a part hereof for all
purposes. Reference is hereby made to the Security Schedule for the meaning of
certain terms defined therein and used but not defined herein, which definitions
are incorporated herein by reference.
Section 1.3. Amendment of Defined Instruments. Unless the context
otherwise requires or unless otherwise provided herein the terms defined in this
Agreement which refer to a particular agreement, instrument or document also
refer to and include all renewals, extensions, modifications, amendments and
restatements of such agreement, instrument or document, provided that nothing
contained in this section shall be construed to imply that Lenders have in
advance authorized, or in the future will authorize, any such renewal,
extension, modification, amendment or restatement.
Section 1.4. References and Titles. All references in this Agreement to
Exhibits, Schedules, articles, sections, subsections and other subdivisions
refer to the Exhibits, Schedules, articles, sections, subsections and other
subdivisions of this Agreement unless expressly provided otherwise. Titles
appearing at the beginning of any subdivisions are for convenience only and do
not constitute any part of such subdivisions and shall be disregarded in
construing the language contained in such subdivisions. The words "this
Agreement", "this instrument", "herein", "hereof", "hereby", "hereunder" and
words of similar import refer to this Agreement as a whole and not to any
particular subdivision unless expressly so limited. The phrases "this section"
and "this subsection" and similar phrases refer only to the sections or
subsections hereof in which such phrases occur. The word "or" is not exclusive,
and the word "including" (in its various forms) means "including without
limitation". Pronouns in masculine, feminine and neuter genders shall be
construed to include any other gender, and words in the singular form shall be
construed to include the plural and vice versa, unless the context otherwise
requires.
30
Section 1.5. Calculations and Determinations. All calculations of
interest and fees made under the Loan Documents shall be made on the basis of
actual days elapsed (including the first day but excluding the last) and a year
of 360 days. Each determination by a Lender Party of amounts to be paid under
Article III or any other matters which are to be determined hereunder by a
Lender Party (such as any such as any Adjusted CD Rate, Adjusted Eurodollar
Rate, Assessment Rate, CD Rate, Eurodollar Rate, Business Day, Interest Period,
or Reserve Requirement) shall, in the absence of manifest error, be conclusive
and binding. Unless otherwise expressly provided herein or unless Majority
Lenders otherwise consent all financial statements and reports furnished to any
Lender Party hereunder shall be prepared and all financial computations and
determinations pursuant hereto shall be made in accordance with GAAP.
ARTICLE II - The Loans and Letters of Credit
Section 2.1. Commitments to Lend; Notes. Subject to the terms and
conditions hereof, each Lender agrees to make loans to Borrower (herein called
such Lender's "Loans") upon Borrower's request from time to time during the
Commitment Period, provided that (a) subject to Sections 3.3, 3.4 and 3.6, all
Lenders are requested to make Loans of the same Type in accordance with their
respective Percentage Shares and as part of the same Borrowing, (b) after giving
effect to such Loans, the Facility Usage does not exceed the Borrowing Base
determined as of the date on which the requested Loans are to be made. The
aggregate amount of all Loans in any Borrowing must be greater than or equal to
$500,000 or must equal the remaining availability under the Borrowing Base.
Borrower may have no more than eight (8) Borrowings of Fixed Rate Loans
outstanding at any time. The obligation of Borrower to repay to each Lender the
aggregate amount of all Loans made by such Lender, together with interest
accruing in connection therewith, shall be evidenced by a single promissory note
(herein called such Lender's "Note") made by Borrower payable to the order of
such Lender in the form of Exhibit A with appropriate insertions. The amount of
principal owing on any Lender's Note at any given time shall be the aggregate
amount of all Loans theretofore made by such Lender minus all payments of
principal theretofore received by such Lender on such Note. Interest on each
Note shall accrue and be due and payable as provided herein and therein. Each
Note shall be due and payable as provided herein and therein, and shall be due
and payable in full on the Maturity Date. Subject to the terms and conditions
hereof, Borrower may borrow, repay, and reborrow hereunder.
31
Section 2.2. Requests for New Loans. Borrower must give to Agent written
notice (or telephonic notice promptly confirmed in writing) of any requested
Borrowing of new Loans to be advanced by Lenders. Each such notice constitutes
a "Borrowing Notice" hereunder and must:
(a) specify (i) the aggregate amount of any such Borrowing of new Base
Rate Loans and the date on which such Base Rate Loans are to be advanced, or
(ii) the aggregate amount of any such Borrowing of new CD Loans, the date on
which such CD Loans are to be advanced (which shall be the first day of the
Interest Period which is to apply thereto), and the length of the applicable
Interest Period, or (iii) the aggregate amount of any such Borrowing of new
Eurodollar Loans, the date on which such Eurodollar Loans are to be advanced
(which shall be the first day of the Interest Period which is to apply thereto),
and the length of the applicable Interest Period, or (iv) if such new CD Loans
or Eurodollar Loans are to be combined with existing Loans in a new Borrowing,
the foregoing information with respect to such combined Borrowing; and
(b) be received by Agent not later than 11:00 a.m., Dallas, Texas time, on
(i) the day on which any such Base Rate Loans are to be made, or (ii) the third
Business Day preceding the day on which any such Fixed Rate Loans are to be
made.
Each such written request or confirmation must be made in the form and substance
of the "Borrowing Notice" attached hereto as Exhibit B, duly completed. Each
such telephonic request shall be deemed a representation, warranty,
acknowledgment and agreement by Borrower as to the matters which are required to
be set out in such written confirmation. Upon receipt of any such Borrowing
Notice, Agent shall give each Lender prompt notice of the terms thereof. If all
conditions precedent to such new Loans have been met, each Lender will on the
date requested promptly remit to Agent at Agent's office in Dallas, Texas the
amount of such Lender's new Loan in immediately available funds, and upon
receipt of such funds, unless to its actual knowledge any conditions precedent
to such Loans have been neither met nor waived as provided herein, Agent shall
promptly make such Loans available to Borrower. Unless Agent shall have
received prompt notice from a Lender that such Lender will not make available to
Agent such Lender's new Loan, Agent may in its discretion assume that such
Lender has made such Loan available to Agent in accordance with this section and
Agent may if it chooses, in reliance upon such assumption, make such Loan
available to
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Borrower. If and to the extent such Lender shall not so make its new Loan
available to Agent, such Lender and Borrower severally agree to pay or repay to
Agent within three (3) days after demand the amount of such Loan together with
interest thereon, for each day from the date such amount was made available to
Borrower until the date such amount is paid or repaid to Agent, with interest at
(i) the Federal Funds Rate, if such Lender is making such payment and (ii) the
interest rate applicable at the time to the other new Loans made on such date,
if Borrower is making such repayment. If neither such Lender nor Borrower pays
or repays to Agent such amount within such three-day period, Agent shall in
addition to such amount be entitled to recover from such Lender and from
Borrower, on demand, interest thereon at the Default Rate applicable to Base
Rate Loans, calculated from the date such amount was made available to Borrower.
The failure of any Lender to make any new Loan to be made by it hereunder shall
not relieve any other Lender of its obligation hereunder, if any, to make its
new Loan, but no Lender shall be responsible for the failure of any other Lender
to make any new Loan to be made by such other Lender.
Section 2.3. Continuations and Conversions of Existing Loans. Borrower
may make the following elections with respect to Loans already outstanding: to
Convert Base Rate Loans to Fixed Rate Loans, to Convert Fixed Rate Loans to Base
Rate Loans on the last day of the Interest Period applicable thereto, to Convert
one Type of Fixed Rate Loan to another Type of Fixed Rate Loan on the last day
of the Interest Period applicable thereto, and to Continue Fixed Rate Loans
beyond the expiration of such Interest Period by designating a new Interest
Period to take effect at the time of such expiration. In making such elections,
Borrower may combine existing Loans made pursuant to separate Borrowings into
one new Borrowing or divide existing Loans made pursuant to one Borrowing into
separate new Borrowings. To make any such election, Borrower must give to Agent
written notice (or telephonic notice promptly confirmed in writing) of any such
Conversion or Continuation of existing Loans, with a separate notice given for
each new Borrowing. Each such notice constitutes a "Continuation/Conversion
Notice" hereunder and must:
(a) specify the existing Loans which are to be Continued or Converted and
if such existing Loans are to be combined with new Loans, specify such Loans;
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(b) specify (i) the aggregate amount of any Borrowing of Base Rate Loans
into which such existing Loans are to be Continued or Converted and the date on
which such Continuation or Conversion is to occur, or (ii) the aggregate amount
of any Borrowing of Fixed Rate Loans into which such existing Loans are to be
Continued, Converted, or combined, the date on which such Continuation or
Conversion is to occur (which shall be the first day of the Interest Period
which is to apply to such Fixed Rate Loans), and the length of the applicable
Interest Period; and
(c) be received by Agent not later than 11:00 a.m., Dallas, Texas time, on
(i) the day on which any such Continuation or Conversion to Base Rate Loans is
to occur, or (ii) the third Business Day preceding the day on which any such
Continuation or Conversion to Fixed Rate Loans is to occur.
Each such written request or confirmation must be made in the form and substance
of the "Continuation/Conversion Notice" attached hereto as Exhibit C, duly
completed. Each such telephonic request shall be deemed a representation,
warranty, acknowledgment and agreement by Borrower as to the matters which are
required to be set out in such written confirmation. Upon receipt of any such
Continuation/Conversion Notice, Agent shall give each Lender prompt notice of
the terms thereof. Each Continuation/Conversion Notice shall be irrevocable and
binding on Borrower. During the continuance of any Default, Borrower may not
make any election to Convert existing Loans into Fixed Rate Loans or Continue
existing Loans as Fixed Rate Loans. If (due to the existence of a Default or
for any other reason) Borrower fails to timely and properly give any
Continuation/Conversion Notice with respect to a Borrowing of existing Fixed
Rate Loans at least three (3) days prior to the end of the Interest Period
applicable thereto, such Fixed Rate Loans shall automatically be Converted into
Base Rate Loans at the end of such Interest Period. No new funds shall be
repaid by Borrower or advanced by any Lender in connection with any Continuation
or Conversion of existing Loans pursuant to this section, and no such
Continuation or Conversion shall be deemed to be a new advance of funds for any
purpose; such Continuations and Conversions merely constitute a change in the
interest rate applicable to already outstanding Loans.
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Section 2.4. Use of Proceeds. Borrower shall use all Loans to refinance
existing indebtedness, to finance capital expenditures, to refinance Matured LC
Obligations, provide working capital for its operations and for the operations
of the Subsidiary Guarantors and for other general business purposes, including,
but not limited to, extending credit to the Subsidiary Guarantors for such
purposes. Borrower shall use all Letters of Credit for its general corporate
purposes. In no event shall the funds from any Loan or any Letter of Credit be
used directly or indirectly by any Person for personal, family, household or
agricultural purposes or for the purpose, whether immediate, incidental or
ultimate, of purchasing, acquiring or carrying any "margin stock" (as such term
is defined in Regulation U promulgated by the Board of Governors of the Federal
Reserve System) or to extend credit to others directly or indirectly for the
purpose of purchasing or carrying any such margin stock. Borrower represents
and warrants that Borrower is not engaged principally, or as one of Borrower's
important activities, in the business of extending credit to others for the
purpose of purchasing or carrying such margin stock.
Section 2.5. Interest Rates and Fees.
(a) Interest Rates. Each Base Rate Loan shall bear interest on each day
outstanding at the Adjusted Base Rate in effect on such day. Each Eurodollar
Loan shall bear interest on each day during the related Interest Period at the
related Adjusted Eurodollar Rate in effect on such day. Each CD Loan shall bear
interest on each day, during the related Interest Period at the related Adjusted
CD Rate in effect on such day. Anything to the contrary herein notwithstanding,
if an Event of Default has occurred and is continuing, all Loans shall bear
interest on each day outstanding at the applicable Default Rate. Past due
payments of principal and interest shall bear interest at the rates and in the
manner set forth in the Notes.
(b) Facility Fees. In consideration of each Lender's commitment to make
Loans, Borrower will pay to Agent for the account of each Lender a nonrefundable
monthly facility fee for each calendar month. The fee for each calendar month
shall be equal to the product of (i) the Applicable Fee Percentage hereinafter
defined (based on the average daily Facility Usage for such calendar month)
multiplied by (ii) the number of days in such calendar month divided by 360
multiplied by (iii) the Borrowing Base for such calendar month. The facility
fee for each calendar month in a Fiscal Quarter shall be due and payable in
arrears forty-five (45) days after the end of such Fiscal Quarter. For each
calendar month, the "Applicable Fee Percentage" shall be determined according to
the following table:
35
BORROWING BASE BALANCE APPLICABLE FEE PERCENTAGE
less than or equal to twenty- Thirty Five Basis Points
five percent (25%) of the (0.35%) per annum
Borrowing Base
less than or equal to fifty Forty Basis Points (0.40%)
percent (50%) but greater than per annum
twenty-five percent (25%) of
the Borrowing Base
less than or equal to seventy- Forty-Five Basis Points
five percent (75%) but greater (.45%) per annum
than fifty percent (50%) of the
Borrowing Base
greater than seventy-five Fifty Basis Points (.50%)
percent of the Borrowing per annum
Base (75%)
Section 2.6. Optional Prepayments. Borrower may, upon one Business Days'
notice to each Lender, from time to time and without premium or penalty prepay
the Notes, in whole or in part, so long as the aggregate amounts of all partial
prepayments of principal on the Notes equals $500,000 or any higher integral
multiple of $500,000, and so long as Borrower pays any costs with respect to the
prepayment of any Fixed Rate Loan due under Section 3.6. Each partial
prepayment of principal made after the end of the Commitment Period shall be
applied to the regular installments of principal due under the Notes in the
inverse order of their maturities. Each prepayment of principal under this
section shall be accompanied by all interest then accrued and unpaid on the
principal so prepaid. Any principal or interest prepaid pursuant to this
section shall be in addition to, and not in lieu of, all payments otherwise
required to be paid under the Loan Documents at the time of such prepayment.
Section 2.7. Mandatory Prepayments. If at any time the Facility Usage
exceeds the Maximum Credit Amount (whether due to a reduction in the Maximum
Credit Amount in accordance with this Agreement, or otherwise), Borrower shall
immediately upon demand prepay the principal of the Loans in an amount at least
equal to such excess. If at any time the Facility Usage is less than the
Maximum Credit Amount but in excess of the Borrowing Base (such excess being
herein called a "Borrowing Base Deficiency"), Borrower shall, within thirty (30)
days after Agent gives notice of such fact to Borrower prepay the principal of
the Loans in an aggregate amount at least equal to such Borrowing Base
Deficiency
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(or, if the Loans have been paid in full, pay to LC Issuer LC Collateral as
required under Section 2.18(a)). Each prepayment of principal under this
section shall be accompanied by all interest then accrued and unpaid on the
principal so prepaid. Any principal or interest prepaid pursuant to this
section shall be in addition to, and not in lieu of, all payments otherwise
required to be paid under the Loan Documents at the time of such prepayment.
Section 2.8. Scheduled Payments of Principal. The aggregate principal
amount of the Loans shall be due and payable in eight (8) quarterly
installments, each of which shall be equal to one-eighth (1/8) of the aggregate
unpaid principal balance of the Loans at the end of the Commitment Period, and
shall be due and payable on each Interest Payment Date for Base Rate Loans,
beginning April 30, 2002 and continuing regularly thereafter until the Maturity
Date, at which time the unpaid principal balance of the Loans and all interest
accrued thereon shall be due and payable in full.
Section 2.9 Initial Borrowing Base. During the period from the date
hereof to the first date on which the Borrowing Base is redetermined, the
Working Capital Borrowing Base shall be $36,589,000, the Cash Earnings Borrowing
Base shall be $31,984,000, and the Borrowing Base shall be $55,000,000.
Section 2.10 Subsequent Determinations of Borrowing Base. Promptly after
receiving each Borrowing Base Report, Agent shall determine the Working Capital
Borrowing Base and the Cash Earnings Borrowing Base, which in the aggregate
comprise the Borrowing Base. Such Borrowing Base shall take effect immediately
on the date notice thereof is sent to Borrower (herein called a "Determination
Date") and remain in effect until the Agent receives the next Borrowing Base
Report and determines the next Borrowing Base. In the event Agent has not
received an appropriately completed Borrowing Base Report (with all attachments)
within the time period specified in Section 6.2(d), an Event of Default shall
have occurred and Agent shall have no obligation to redetermine the Borrowing
Base and Lenders shall have no obligation to make any additional Loans until
such time as Agent shall have received such information.
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Section 2.11 Letters of Credit.
(a) Terms Applicable to all Letters of Credit Including Xxxx XX. Subject
to the terms and conditions hereof, LC Issuer agrees to issue from time to time
during the Commitment Period, in reliance on the agreements of Lenders set forth
in Section 2.13(b), at Borrower's application, such Letters of Credit as
Borrower may from time to time request, so long as:
(i) the sum of (1) the aggregate amount of LC Obligations at such
time, plus (2) the amount of such Letter of Credit, does not exceed the LC
Sublimit;
(ii) the Facility Usage does not exceed the Borrowing Base at such
time;
(iii) the form and terms of such Letter of Credit are satisfactory
to LC Issuer in its sole and absolute discretion; and
(iv) the expiration date of such Letter of Credit is on or before the
Business Day immediately preceding the last day of the Commitment Period,
unless otherwise agreed to by Majority Lenders.
(b) Terms Applicable to Xxxx XX. The term of the Xxxx XX may be extended
at the written request of Borrower (in this subparagraph called "Request for
Extension") for an additional period determined by the LC Issuer if the LC
Issuer shall have given written notice to Borrower of such extension and shall
have delivered to the trustee under the Indenture a notice in the form of Annex
E to the Xxxx XX (and the Trustee shall have accepted such notice) at least
forty-five (45) days prior to the end of the then effective expiration date of
the Xxxx XX, subject to the terms and conditions set forth in this Agreement and
the Xxxx XX, and subject to earlier termination of the Xxxx XX in accordance
with its terms. If the LC Issuer shall not have received from Borrower a
Request for Extension at least ninety (90) days prior to the then effective
expiration date of the Xxxx XX, LC Issuer shall have no obligation to consider
extending the term of the Xxxx XX. LC Issuer shall notify Borrower whether or
not it shall extend the term of the Xxxx XX within forty-five (45) days after LC
Issuer's receipt of a Request for Extension. Any determination to extend the
term of the Letter of Credit shall be made at LC Issuer 's sole discretion; no
course of dealing or other circumstances shall require the LC Issuer to extend
the Letter of Credit.
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Section 2.12 Requesting Letters of Credit. Borrower must make written
application for any Letter of Credit at least three Business Days before such
Letter of Credit is issued by LC Issuer or if otherwise, within the time
permitted by the agreements described below in this section. Each such written
application must be made in writing in the form and substance of the "Standby
Letter of Credit Application and Agreement" attached hereto as Exhibit G, duly
completed and signed by an authorized officer of Borrower, the terms and
provisions of such agreements being incorporated herein by reference. By each
such application for a Letter of Credit Borrower shall be deemed to have made
all representations and warranties set forth herein as of the date of such
application. If all conditions precedent to the issuance of such Letter of
Credit have been met, LC Issuer will, in reliance on the agreements of Lenders
set forth in Section 2.13(b), on the date requested, issue such Letter of Credit
at LC Issuer 's office in Dallas, Texas. Provisions of any LC Application shall
be deemed to apply only to the related Letter of Credit; provided, however, that
any "default" or "event of default" under such LC Application shall also
constitute an Event of Default hereunder. If any provisions of any LC
Application conflict with any provisions of this Agreement, the provisions of
this Agreement shall govern and control.
Section 2.13 Reimbursement.
(a) Reimbursement by Borrower. Each payment of a draft or demand for
payment honored by LC Issuer shall constitute a loan to and obligation of
Borrower. Borrower promises to pay to LC Issuer, or to LC Issuer's order at
such LC Issuer's office in Dallas, Texas on demand, in legal tender of the
United States of America, any and all amounts paid by LC Issuer under or
purporting to be under any Letter of Credit, together with interest on any such
amounts (i) from the date payment is made by LC Issuer under such Letter of
Credit until and including the first Business Day following such date of
payment, at the Base Rate and (ii) thereafter, provided that notice is given to
Borrower of such honor by LC Issuer, until the repayment of such amounts to LC
Issuer, at the Default Rate applicable to Base Rate Loans. Borrower hereby
promises to pay, when due, all present and future taxes, levies, costs and
charges whatsoever imposed, assessed, levied or collected on, under or in
respect of this Agreement or any Letter of Credit and any payments of principal,
interest or other amounts made on or in respect of any thereof (excluding,
however, any such taxes, levies, costs and charges imposed on or measured by the
overall net income of LC Issuer).
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Borrower promises to indemnify LC Issuer against, and to reimburse LC Issuer on
demand for, any of the foregoing taxes, levies, costs or charges paid by LC
Issuer and any loss, liability, claim or expense, including interest, penalties
and legal fees, that LC Issuer may incur because of or in connection with the
failure of Borrower to make any such payment of taxes, levies, costs or charges
when due or any payment of Matured LC Obligations when due.
(b) Participation by Lenders. LC Issuer irrevocably agrees to grant and
hereby grants to each Lender, and, to induce LC Issuer to issue Letters of
Credit hereunder, each Lender irrevocably agrees to accept and purchase and
hereby accepts and purchases from LC Issuer, on the terms and conditions
hereinafter stated, for such Lender's own account and risk an undivided interest
equal to such Lender's Percentage Share of LC Issuer's obligations and rights
under each Letter of Credit issued hereunder and the amount of each draft paid
by LC Issuer thereunder. In the event that Borrower should fail to pay LC
Issuer on demand the amount of any draft or other request for payment drawn
under or purporting to be drawn under a Letter of Credit as provided in
subsection (a) above, each Lender shall, before 2:00 p.m. (Dallas, Texas time)
on the Business Day LC Issuer shall have given notice to Lenders of Borrower's
failure to so pay LC Issuer, if such notice is given by 11:00 a.m., Dallas,
Texas time (or on the Business Day immediately succeeding the day such notice is
given after 11:00 a.m. Dallas, Texas time), pay to LC Issuer at LC Issuer's
offices in Dallas, Texas, in legal tender of the United States of America, in
same day funds, such Lender's Percentage Share of the amount of such draft or
other request for payment, plus interest on such amount (i) from the date LC
Issuer shall have paid such draft or request for payment until and including the
first Business Day following such date of payment, at the Base Rate and (ii)
thereafter, to the date of such payment by such Lender, at the Default Rate
applicable to Base Rate Loans. Each Lender's obligation to reimburse LC Issuer
pursuant to the terms of this Section 2.13(b) is irrevocable and unconditional.
If any such amount required to be paid by any Lender pursuant to this Section
2.13(b) is not in fact made available by such Lender to LC Issuer within three
Business Days after the date such payment is due, LC Issuer shall be entitled to
recover from such Lender, on demand, such amount required to be paid by such
Lender, plus interest thereon calculated from such due date at the Federal Funds
Rate. A written advice(s) setting forth in reasonable detail the amounts
40
owing under this Section 2.13, submitted by LC Issuer to Borrower from time to
time, shall be conclusive, absent manifest error, as to the amounts thereof.
Whenever, at any time after LC Issuer has made payment under any Letter of
Credit, and has received from any Lender its Percentage Share of such payment in
accordance with this Section 2.13(b), LC Issuer receives any payment related to
such Letter of Credit (whether directly from Borrower or otherwise, including
proceeds of Cash Collateral applied thereto by LC Issuer), or any payment of
interest on account thereof, LC Issuer will distribute to such Lender its
Percentage Share thereof; provided, however, that in the event that any such
payment received by LC Issuer shall be required to be returned by LC Issuer,
such Lender shall return to LC Issuer the portion thereof previously distributed
by LC Issuer to it.
(c) Payment of Reimbursement Obligation with Loans. Each time payment
of a draft or demand for payment under a Letter of Credit is honored by LC
Issuer, Borrower shall be deemed to have made a Borrowing Notice in the amount
of such payment pursuant to Section 2.2. If all conditions precedent to the
making of such Loan have been satisfied and such Loan is made, the proceeds
thereof shall be applied to the payment of Borrower's obligation to reimburse LC
Issuer for such payment.
Section 2.14 Transferees of Letters of Credit. Borrower agrees that if
any Letter of Credit provides that it is transferable, LC Issuer is under no
duty to determine the proper identity of anyone appearing as transferee of such
Letter of Credit, nor shall LC Issuer be charged with responsibility of any
nature or character for the validity or correctness of any transfer or
successive transfers, and payment by LC Issuer to any purported transferee or
transferees as determined by LC Issuer is hereby authorized and approved, and
Borrower further agrees to hold LC Issuer and each Lender harmless and
indemnified against any liability or claim in connection with or arising out of
the foregoing.
Section 2.15 Extension of Maturity. Borrower agrees that if the maturity
of any Letter of Credit is extended by its terms or by law or governmental
action, if any extension of the maturity or time for presentation of drafts or
any other modification of the terms of any Letter of Credit is made at the
request of Borrower, or if the amount of any such Letter of Credit is increased
at the request of Borrower, subject in each case to Section 2.11(a), this
Agreement shall be binding upon Borrower with respect to such Letter of Credit
as so extended,
41
increased or otherwise modified, with respect to drafts and property covered
thereby, and with respect to any action taken by LC Issuer or any of LC Issuer's
correspondents in accordance with such extension, increase or other
modification.
Section 2.16 Restriction on Liability. The users of each Letter of
Credit shall be deemed the agents of Borrower and neither LC Issuer, nor its
correspondents shall be responsible for:
(a) the use which may be made of any Letter of Credit or for any actions
or omissions of the users of any Letter of Credit;
(b) the existence or nonexistence of a default under any instrument
secured or supported by any Letter of Credit or any other event which gives rise
to a right to call upon any Letter of Credit;
(c) the validity, sufficiency or genuineness of any document delivered in
connection with any Letter of Credit, even if such document should in fact prove
to be in any or all respects invalid, fraudulent or forged;
(d) except as specifically required by a Letter of Credit, failure of any
instrument to bear any reference or adequate reference to any Letter of Credit,
or failure of documents to accompany any draft at negotiation, or failure of any
person to note the amount of any draft on the reverse of any Letter of Credit or
to surrender or take up any Letter of Credit; or
(e) errors, omissions, interruptions or delays in transmission or delivery
of any messages by mail, cable, telegraph, wireless, or otherwise.
LC Issuer shall not be responsible for any act, error, neglect or default,
omission, insolvency or failure in the business of any of the correspondents of
LC Issuer, for any refusal by LC Issuer or any of its correspondents to pay or
honor drafts drawn under any Letter of Credit because of any applicable law,
decree or edict, legal or illegal, of any governmental agency now or hereafter
enforced, or for any matter beyond the control of LC Issuer. The happening of
any one or more of the contingencies referred to in the preceding clauses of
this paragraph shall not affect, impair or prevent the vesting of any of the
rights or powers of LC Issuer and or Lenders under this Agreement or the
42
obligation of Borrower to make reimbursement hereunder. In furtherance and
extension and not in limitation of the specific provisions hereinabove set
forth, Borrower agrees that any action, unless such action constitutes willful
misconduct or gross negligence, not contrary to the terms of any Letter of
Credit, which is taken by LC Issuer or any Lender issuing such Letter of Credit
or by any correspondent under or in connection with such Letter of Credit shall
be binding on Borrower and shall not put LC Issuer or any Lender or any
correspondent under any resulting liability to Borrower and Borrower makes a
like agreement as to any inaction or omission unless such action or inaction
constitutes gross negligence or willful misconduct.
Section 2.17 No Duty to Inquire. Borrower agrees that LC Issuer is
authorized and instructed to accept and pay drafts under any Letter of Credit
without requiring, and without responsibility for, the determination as to the
existence of any event giving rise to said draft, either at the time of
acceptance of payment or thereafter; provided that LC Issuer and Lenders will
comply with the provisions of Article 15 of the Uniform Customs and Practices
for Documentary Credits (1994 Revision) International Chamber of Commerce
Publication 500. Borrower agrees that LC Issuer is under no duty to determine
the proper identity of anyone presenting such a draft or making such a demand
(whether by tested telex or otherwise) as the officer, representative or agent
of any beneficiary under any Letter of Credit issued by LC Issuer, and payment
by LC Issuer to any such beneficiary when requested by any such purported
officer, representative or agent is hereby authorized and approved by Borrower.
Borrower agrees to hold LC Issuer and each Lender harmless and indemnified
against any liability or claim in connection with or arising out of the
foregoing provisions and the subject matter of this section.
Section 2.18 Payment of LC Obligations.
(a) Cash Collateral for LC Obligations.
(i) Acceleration. If the Obligations, or any part thereof, become
immediately due and payable pursuant to Article VIII, then all LC
Obligations shall become immediately due and payable without regard for
actual drawings or payments on the Letters of Credit and Borrower shall
immediately pay to Agent for the account of the LC Issuer an amount equal
to the aggregate LC Obligations then outstanding.
43
(ii) Long-term Letters of Credit. If in accordance with the terms of
Section 2.11(a) of this Agreement, Majority Lenders have agreed to extend
the expiration date of any Letter of Credit beyond the last Business Day of
the Commitment Period, on such Business Day Borrower will pay to Agent for
the account of the LC Issuer an amount equal to the aggregate
LC Obligations relating to such Letters of Credit, in addition to all other
amounts then due under the Loan Documents.
(iii) Required Prepayment Amount. If at the time Borrower is
required to make a mandatory prepayment pursuant to Section 2.7, the
Obligations which are not LC Obligations (in this Section called the "NON-
LC OBLIGATIONS") then outstanding are less than the Borrowing Base
Deficiency, Borrower shall pay to Agent for the account of LC Issuer the
amount by which (1) the Borrowing Base Deficiency exceeds (2) the Non-LC
Obligations then outstanding, (in each case the "EXCESS AMOUNT") to be held
pursuant to this Section 2.18.
(iv) Refund of Excess Amounts. If at the end of any Fiscal Quarter
during which Agent has held Cash Collateral pursuant to subsection (iii)
above: (1) Borrower has delivered financial statements pursuant to Section
5.1(b) for such Fiscal Quarter; (2) Borrower is not required to make a
mandatory prepayment pursuant to Section 2.7 and (3) no Default or Event of
Default has occurred and is continuing, then upon the written request of
Borrower within ninety (90) days after the end of such Fiscal Quarter,
Agent shall remit to Borrower the amount of Cash Collateral previously
deposited pursuant to subsection (iii) above.
(b) Cash Collateral Accounts.
(i) General LC Collateral Account. All amounts due and payable by
Borrower under this Section 2.18 with respect to all Letters of Credit
(other than the Xxxx XX) shall be (1) first applied to Borrower's General
LC Obligations that are then due and payable, and (2) second held in an
account established at NationsBank or an Affiliate thereof designated the
Hecla Mining Company General LC Collateral Account (the "GENERAL LC
COLLATERAL ACCOUNT"), as security for the remaining Obligations other than
Xxxx XX Obligations (in this Section 2.18 all such amounts held in the
General LC Collateral Account and all investments made with funds in
44
the General LC Collateral Account are collectively called the "GENERAL XX
XXXX COLLATERAL"). The General XX Xxxx Collateral shall be applied to
General LC Obligations as they become due and payable and when no General
LC Obligations remain outstanding, the General XX Xxxx Collateral shall be
applied to all other Obligations (excluding Xxxx XX Obligations) as they
become due and payable. At any time, and from time to time so long as no
Default or Event of Default has occurred and is continuing, Agent, at the
written request of Borrower, shall invest and reinvest funds held in the
General LC Collateral Account in Permitted Investments at such prices as
are set forth in such request, subject to the Lien in favor of Agent. Upon
the occurrence and during the continuance of an Event of Default, Agent
shall invest and reinvest funds held in the General LC Collateral Account
in Permitted Investments, at such prices as it in its sole discretion
determines, subject to the Lien in favor of Agent. Agent shall have no
liability for losses on any such Permitted Investments. Any proceeds and
interest or other earnings shall be retained in the General LC Collateral
Account and invested in the same manner as other funds therein or applied
to Obligations then due and owing.
(ii) Xxxx XX Collateral Account. All amounts due and payable by
Borrower under this Section 2.18 with respect to the Xxxx XX shall be (1)
first applied to Borrower's Xxxx XX Obligations that are then due and
payable, and (2) second held in an account established at NationsBank or an
Affiliate thereof designated the Hecla Mining Company Xxxx XX Collateral
Account (the "XXXX XX COLLATERAL ACCOUNT"), as security for the remaining
Obligations (in this Section 2.18 all such amounts held in the Xxxx XX
Collateral Account and all investments made with funds in the Xxxx XX
Collateral Account are collectively called the "XXXX XX CASH COLLATERAL").
The Xxxx XX Cash Collateral shall be applied to Xxxx XX Obligations as they
become due and payable and when no Xxxx XX Obligations remain outstanding,
the Xxxx XX Cash Collateral shall be applied to all other Obligations as
they become due and payable. At any time, and from time to time so long as
no Default or Event of Default has occurred and is continuing, Agent, at
the written request of Borrower, shall invest and reinvest funds held in
the Xxxx XX Collateral Account in Permitted Investments at such prices as
are set forth in such request, subject to the Lien in favor of Agent. Upon
the occurrence and during the
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continuance of an Event of Default, Agent shall invest and reinvest
funds held in the Xxxx XX Collateral Account in Permitted Investments at
such prices as it in its sole discretion determines, subject to the Lien in
favor of Agent. Agent shall have no liability for losses on any such
Permitted Investments. Any proceeds and interest or other earnings shall
be retained in the Xxxx XX Collateral Account and invested in the same
manner as other funds therein or applied to Obligations then due and owing.
Notwithstanding the foregoing provision of this Section 2.18, in no event
shall Agent invest or fail to invest any funds on deposit in the Xxxx XX
Collateral Account, or fail to pay any requested rebate to the United
States of America, if such investment or failure to invest or such failure
to pay any required rebate, would cause the Bonds to be or become
"ARBITRAGE BONDS" within the meaning of Section 148 of the Internal Revenue
Code; Agent shall only invest funds on deposit in the Xxxx XX Collateral
Account at a yield not in excess of the yield on the Bonds. The term
"YIELD" means with respect to the issue of which the Bonds are a part, the
discount rate that, when used in computing the present value of the issue
date of all unconditionally payable payments of principal, interest and
fees for qualified guarantees on the issue, produces an amount equal to the
present value using the same discount rate of the aggregate issue price of
the issue as of the issue date. Agent may conclusively rely on an opinion
of its legal counsel (including in-house counsel) in determining whether it
has complied with the obligations of this subsection and Agent shall not be
liable for any failure to comply with such obligations if Agent shall have
relied on any such opinion. Such proceeds, interest or income which are
not so invested or reinvested in Permitted Investments due to the
restriction described above shall be deposited and held by the Agent in the
Xxxx XX Cash Collateral Account.
(iii) Neither Borrower nor any Person claiming on behalf of or
through Borrower shall have any right to withdraw any of the funds held in
the General LC Collateral Account or the Xxxx XX Collateral Account, except
as otherwise provided in subsection 2.18(a)(iii) above or until this
Agreement has been terminated pursuant to Section 10.10.
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(iv) Borrower agrees that it will not sell or otherwise dispose of any
interest in the General XX Xxxx Collateral Account, the Xxxx XX Collateral
Account or the Cash Collateral, or create or permit to exist any Lien upon
or with respect to any of the foregoing except in favor of Agent.
(c) Grant of Security Interest. Borrower hereby assigns and grants to
Agent a continuing security interest for the benefit of Lenders in the Cash
Collateral and all proceeds thereof to secure the Obligations and agrees that
Agent shall have all of the rights and remedies of a secured party under the
Uniform Commercial Code as adopted in the State of Texas with respect to such
security interest and that an Event of Default under this Agreement shall
constitute a default for purposes of such security interest. Borrower agrees
that, to the extent notice of sale of any Permitted Investments shall be
required by law, at least five Business Days' notice to Borrower of the time and
place of any public sale or the time after which any private sale is to be made
shall constitute reasonable notification. Agent may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it will be so adjourned.
(d) Account Transfers. When Borrower is required to make payments under
this Section 2.18 and fails to do so on the day when due, Agent may without
notice to Borrower or any other Related Person make such payment (whether by
application of proceeds of Cash Collateral, by transfers from other accounts
maintained with NationsBank or otherwise) using any funds then available to any
Related Person or any other Person liable for all or any part of Borrower's
Obligations hereunder or under Borrower's LC Applications. Following any such
payment by such transfer of accounts and upon delivery to Agent by Borrower of
evidence satisfactory to Agent, in its sole discretion, that such accounts, at
the time of such application contained funds held in the legal capacity of
agent, operator or trustee for a third party (any funds so held, "THIRD PARTY
FUNDS"), Agent will remit to the Person or Persons in whose name the account is
held such Third Party Funds. Any amounts which are required to be paid pursuant
to this Section 2.18 and which are not paid on the date due shall, for purposes
of each Loan Document, be considered past due Obligations owing hereunder, and
Agent is hereby authorized to liquidate Cash Collateral, demand under any and
all guarantees of all or part of the Obligations and otherwise exercise its
respective rights under each Loan Document to obtain such amounts.
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(e) Perfection and Protection of Security Interests and Liens. Borrower
will from time to time deliver to Agent any financing statements, continuation
statements and other documents, properly completed and executed (and
acknowledged when required) by the Related Persons in form and substance
satisfactory to Agent, which Agent requests for the purpose of perfecting,
confirming, or protecting any Liens or other rights in the Cash Collateral.
(f) Custody of Cash Collateral. The Agent shall exercise reasonable care
in the custody and preservation of the Cash Collateral and shall be deemed to
have exercised such care if the Cash Collateral is accorded treatment
substantially equivalent to that which the Agent accords its own property, it
being understood that the Agent shall not have any responsibility for taking any
necessary steps to preserve rights against any parties with respect to the Cash
Collateral.
Section 2.19. Letter of Credit Fees. In consideration of the issuance of
each Letter of Credit by LC Issuer, Borrower agrees to pay:
(a) an issuance fee for each Letter of Credit in the amount calculated by
applying one-eighth of one percent (0.125%) per annum of the face amount of such
Letter of Credit for the term thereof, payable to LC Issuer for its own account
at the time of issuance of such Letter of Credit.
(b) for the Xxxx XX, a letter of credit fee accruing on and after the
date hereof equal to the amount calculated by applying one and thirty-seven and
one-half one-hundredths of one percent (1.375%) per annum to the face amount of
the Xxxx XX for the term thereof, payable to LC Issuer.
(c) for all Letters of Credit except the Xxxx XX, a letter of credit fee
equal to the greater of (A) the amount calculated by applying the Fixed Rate
Margin to the face amount of such Letter of Credit for the term thereof or (B)
$500, in each case payable to LC Issuer at the time of issuance of such Letter
of Credit for the account of Lenders in accordance with their Percentage Shares.
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ARTICLE III - Payments to Lenders
Section 3.1. General Procedures. Borrower will make each payment which
it owes under the Loan Documents to Agent for the account of the Lender Party to
whom such payment is owed, in lawful money of the United States of America,
without set-off, deduction or counterclaim, and in immediately available funds.
Each such payment must be received by Agent not later than 11:00 a.m., Dallas,
Texas time, on the date such payment becomes due and payable. Any payment
received by Agent after such time will be deemed to have been made on the next
following Business Day. Should any such payment become due and payable on a day
other than a Business Day, the maturity of such payment shall be extended to the
next succeeding Business Day, and, in the case of a payment of principal or past
due interest, interest shall accrue and be payable thereon for the period of
such extension as provided in the Loan Document under which such payment is due.
Each payment under a Loan Document shall be due and payable at the place
provided therein and, if no specific place of payment is provided, shall be due
and payable at the place of payment of Agent's Note. When Agent collects or
receives money on account of the Obligations, Agent shall distribute all money
so collected or received, and each Lender Party shall apply all such money so
distributed, as follows:
(a) first, for the payment of all Obligations which are then due (and if
such money is insufficient to pay all such Obligations, first to any
reimbursements due Agent under Section 6.9 or 10.4 and then to the partial
payment of all other Obligations then due in proportion to the amounts thereof,
or as Lender Parties shall otherwise agree);
(b) then for the prepayment of amounts owing under the Loan Documents
(other than principal on the Notes) if so specified by Borrower;
(c) then for the prepayment of principal on the Notes, together with
accrued and unpaid interest on the principal so prepaid;
(d) then for the payment or prepayment of any other Obligations; and
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(e) last and only from proceeds of Collateral, for the payment or
prepayment of any other indebtedness or obligations secured by such Collateral,
pro rata to each Lender in accordance with the amount of such indebtedness or
obligations owing to such Lender.
All payments applied to principal or interest on any Note shall be applied first
to any interest then due and payable, then to principal then due and payable,
and last to any prepayment of principal and interest in compliance with Sections
2.6 and 2.7. All distributions of amounts described in any of subsections (b),
(c) or (d) above shall be made by Agent pro rata to each Lender Party then owed
Obligations described in such subsection in proportion to all amounts owed to
all Lender Parties which are described in such subsection; provided that if any
Lender then owes payments to LC Issuer for the purchase of a participation under
Section 2.13(c) or to Agent under Section 9.5, any amounts otherwise
distributable under this section to such Lender shall be deemed to belong to LC
Issuer, or Agent, respectively, to the extent of such unpaid payments, and Agent
shall apply such amounts to make such unpaid payments rather than distribute
such amounts to such Lender.
Section 3.2. Increased Cost and Reduced Return.
(a) If, after the date hereof, the adoption of any applicable Law, rule,
or regulation, or any change in any applicable Law, rule, or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank, or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender Party (or its Applicable
Lending Office) with any request or directive (whether or not having the force
of Law) of any such governmental authority, central bank, or comparable agency:
(i) shall subject such Lender Party (or its Applicable Lending
Office) to any tax, duty, or other charge with respect to any Fixed Rate
Loans, its Note, or its obligation to make Fixed Rate Loans, or change the
basis of taxation of any amounts payable to such Lender Party (or its
Applicable Lending Office) under this Agreement or its Note in respect of
any Fixed Rate Loans (other than taxes imposed on the overall net income of
such Lender Party by the jurisdiction in which such Lender Party has its
principal office or such Applicable Lending Office);
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(ii) shall impose, modify, or deem applicable any reserve, special
deposit, assessment, or similar requirement (other than the Reserve
Requirement utilized in the determination of the Fixed Rate) relating to
any extensions of credit or other assets of, or any deposits with or other
liabilities or commitments of, such Lender Party (or its Applicable Lending
Office), including the commitment of such Lender Party hereunder; or
(iii) shall impose on such Lender Party (or its Applicable Lending
Office) or the London interbank market any other condition affecting this
Agreement or its Notes or any of such extensions of credit or liabilities
or commitments;
and the result of any of the foregoing is to increase the cost to such Lender
Party (or its Applicable Lending Office) of making, Converting into, Continuing,
or maintaining any Fixed Rate Loans or to reduce any sum received or receivable
by such Lender Party (or its Applicable Lending Office) under this Agreement or
its Notes with respect to any Fixed Rate Loans, then Borrower shall pay to such
Lender Party on demand such amount or amounts as will compensate such Lender
Party for such increased cost or reduction. If any Lender Party requests
compensation by Borrower under this section, Borrower may, by notice to such
Lender Party (with a copy to Agent), suspend the obligation of such Lender Party
to make or Continue Loans of the Type with respect to which such compensation is
requested, or to Convert Loans of any other Type into Loans of such Type, until
the event or condition giving rise to such request ceases to be in effect (in
which case the provisions of Section 3.5 shall be applicable); provided that
such suspension shall not affect the right of such Lender Party to receive the
compensation so requested.
(b) If, after the date hereof, LC Issuer or any Lender Party shall have
determined that the adoption of any applicable Law, rule, or regulation
regarding capital adequacy or any change therein or in the interpretation or
administration thereof by any governmental authority, central bank, or
comparable agency charged with the interpretation or administration thereof, or
any request or directive regarding capital adequacy (whether or not having the
force of Law) of any such governmental authority, central bank, or comparable
agency, has or would have the effect of reducing the rate of return on the
capital of such Lender Party or any corporation controlling such Lender Party as
a consequence the obligations of LC Issuer or such Lender Party
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hereunder to a level below that which such Lender Party or such corporation
could have achieved but for such adoption, change, request, or directive (taking
into consideration its policies with respect to capital adequacy), then from
time to time upon demand Borrower shall pay to LC Issuer or such Lender Party
such additional amount or amounts as will compensate LC Issuer or such Lender
Party for such reduction, but only to the extent that such Lender Party has not
been compensated therefor by any increase in the Adjusted Eurodollar Rate.
(c) LC Issuer and each Lender Party shall promptly notify Borrower and
Agent of any event of which it has knowledge, occurring after the date hereof,
which will entitle LC Issuer or such Lender Party to compensation pursuant to
this section and will designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the judgment of such Lender Party, be otherwise disadvantageous
to it. LC Issuer or any Lender Party claiming compensation under this section
shall furnish to Borrower and Agent a statement setting forth the additional
amount or amounts to be paid to it hereunder which shall be conclusive in the
absence of manifest error. In determining such amount, LC Issuer or such Lender
Party shall act in good faith and may use any reasonable averaging and
attribution methods.
Section 3.3. Limitation on Types of Loans. If on or prior to the first
day of any Interest Period for any Fixed Rate Loan:
(a) Agent determines (which determination shall be conclusive) that by
reason of circumstances affecting the relevant market, adequate and reasonable
means do not exist for ascertaining the Fixed Rate for such Interest Period; or
(b) Majority Lenders determine (which determination shall be conclusive)
and notify Agent that the Fixed Rate will not adequately and fairly reflect the
cost to the Lenders of funding Eurodollar Loans or for such Interest Period;
then Agent shall give Borrower prompt notice thereof specifying the relevant
Type of Loans and the relevant amounts or periods, and so long as such condition
remains in effect, the Lender Parties shall be under no obligation to make
additional Loans of such Type, or to Convert Loans of any other type into such
Type, and Borrower shall, on the last day(s) of the then current Interest
Period(s) for the outstanding Loans of the affected type, either prepay such
Loans or Convert such Loans into another Type of Loan in accordance with the
terms of this Agreement.
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Section 3.4. Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender Party or its
Applicable Lending Office to make, maintain, or fund Fixed Rate Loans hereunder,
then such Lender Party shall promptly notify Borrower thereof and such Lender
Party's obligation to make or Continue Fixed Rate Loans and to Convert other
Types of Loans into Fixed Rate Loans shall be suspended until such time as such
Lender Party may again make, maintain, and fund Fixed Rate Loans (in which case
the provisions of Section 1.5 shall be applicable).
Section 3.5. Treatment of Affected Loans. If the obligation of any
Lender Party to make a particular Type of Fixed Rate Loan or to Continue, or to
Convert Loans of any other Type into, Loans of a particular Type shall be
suspended pursuant to Sections 3.2 or 3.4 hereof (Loans of such Type being
herein called "Affected Loans" and such Type being herein called the "Affected
Type"), such Lender Party's Affected Loans shall be automatically Converted into
Base Rate Loans on the last day(s) of the then current Interest Period(s) for
Affected Loans (or, in the case of a Conversion required by Section 3.4 hereof,
on such earlier date as such Lender Party may specify to Borrower with a copy to
Agent) and, unless and until such Lender Party gives notice as provided below
that the circumstances specified in Sections 3.2 or 3.4 hereof that gave rise to
such Conversion no longer exist:
(a) to the extent that such Lender Party's Affected Loans have been so
Converted, all payments and prepayments of principal that would otherwise be
applied to such Lender Party's Affected Loans shall be applied instead to its
Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued by such Lender
Party as Loans of the Affected Type shall be made or Continued instead as Base
Rate Loans, and all Loans of such Lender Party that would otherwise be Converted
into Loans of the Affected Type shall be Converted instead into (or shall remain
as) Base Rate Loans.
If such Lender Party gives notice to Borrower (with a copy to Agent) that the
circumstances specified in Section 3.2 or 3.4 hereof that gave rise to the
Conversion of such Lender Party's Affected Loans pursuant to this section no
longer exist (which such Lender Party agrees to do promptly upon such
circumstances ceasing to exist) at a time when Loans of the Affected Type made
by other Lender Parties are outstanding, such Lender Party's Base
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Rate Loans shall be automatically Converted, on the first day(s) of the next
succeeding Interest Period(s) for such outstanding Loans of the Affected Type,
to the extent necessary so that, after giving effect thereto, all Loans held by
the Lender Parties holding Loans of the Affected Type and by such Lender Party
are held pro rata (as to principal amounts, Types, and Interest Periods) in
accordance with their Percentage Shares of the Maximum Credit Amount.
Section 3.6. Compensation. Upon the request of any Lender Party,
Borrower shall pay to such Lender Party such amount or amounts as shall be
sufficient (in the reasonable opinion of such Lender Party) to compensate it for
any loss, cost, or expense (including loss of anticipated profits) incurred by
it as a result of:
(a) any payment, prepayment, or Conversion of a Fixed Rate Loan for any
reason (including, without limitation, the acceleration of the Loans pursuant to
Section 8.2) on a date other than the last day of the Interest Period for such
Loan; or
(b) any failure by Borrower for any reason (including, without limitation,
the failure of any condition precedent specified in Article IV to be satisfied)
to borrow, Convert, Continue, or prepay a Fixed Rate Loan on the date for such
borrowing, Conversion, Continuation, or prepayment specified in the relevant
notice of borrowing, prepayment, Continuation, or Conversion under this
Agreement.
Section 3.7. Change of Applicable Lending Office. Each Lender Party
agrees that, upon the occurrence of any event giving rise to the operation of
Sections 3.2 through 3.6 with respect to such Lender Party, it will, if
requested by Borrower, use reasonable efforts (subject to overall policy
considerations of such Lender Party) to designate another Applicable Lending
Office, provided that such designation is made on such terms that such Lender
Party and its Applicable Lending Office suffer no economic, legal or regulatory
disadvantage, with the object of avoiding the consequence of the event giving
rise to the operation of any such section. Nothing in this section shall affect
or postpone any of the obligations of Borrower or the rights of any Lender Party
provided in Sections 3.2 through 3.6.
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Section 3.8. Replacement of Lenders. If any Lender Party seeks
reimbursement for increased costs under Sections 3.2 through 3.6, then within
ninety (90) days thereafter -- provided no Event of Default then exists --
Borrower shall have the right (unless such Lender Party withdraws its request
for additional compensation) to replace such Lender Party by requiring such
Lender Party to assign its Loans and Notes and its commitments hereunder to an
Eligible Transferee reasonably acceptable to Agent and to Borrower, provided
that: (a) all Obligations of Borrower owing to such Lender Party being replaced
(including such increased costs, but excluding principal and accrued interest on
the Notes being assigned) shall be paid in full to such Lender Party
concurrently with such assignment, and (b) the replacement Eligible Transferee
shall purchase the Note being assigned by paying to such Lender Party a price
equal to the principal amount thereof plus accrued and unpaid interest thereon.
In connection with any such assignment Borrower, Agent, such Lender Party and
the replacement Eligible Transferee shall otherwise comply with Section 10.6.
Notwithstanding the foregoing rights of Borrower under this section, however,
Borrower may not replace any Lender Party which seeks reimbursement for
increased costs under Section 3.2 through 3.6 unless Borrower is at the same
time replacing all Lender Parties which are then seeking such compensation.
Section 3.9. Taxes.
(a) Any and all payments by Borrower to or for the account of any Lender
Party, Agent or LC Issuer hereunder or under any other Loan Document shall be
made free and clear of and without deduction for any and all present or future
taxes, duties, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Lender Party,
taxes imposed on its income, and franchise taxes imposed on it, by the
jurisdiction under the Laws of which such Lender Party (or its Applicable
Lending Office) is organized or any political subdivision thereof (all such non-
excluded taxes, duties, levies, imposts, deductions, charges, withholdings, and
liabilities being hereinafter referred to as "Taxes"). If Borrower shall be
required by Law to deduct any Taxes from or in respect of any sum payable under
this Agreement or any other Loan Document to any Lender Party, (i) the sum
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this section) such Lender Party receives an amount equal to the sum it would
have received had no such deductions been made, (ii) Borrower shall make such
deductions, and (iii) Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
Law.
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(b) In addition, Borrower agrees to pay any and all present or future
stamp or documentary taxes and any other excise or property taxes or charges or
similar levies which arise from any payment made under this Agreement or any
other Loan Document or from the execution or delivery of, or otherwise with
respect to, this Agreement or any other Loan Document (hereinafter referred to
as "Other Taxes").
(c) Borrower agrees to indemnify each Lender Party, Agent and LC Issuer
for the full amount of Taxes and Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable
under this section) paid by such Lender Party or Agent (as the case may be) and
any liability (including penalties, interest, and expenses) arising therefrom or
with respect thereto.
(d) Each Lender Party organized under the Laws of a jurisdiction outside
the United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Lender Party listed on the signature pages hereof
and on or prior to the date on which it becomes a Lender Party in the case of
each other Lender Party, and from time to time thereafter if requested in
writing by Borrower or Agent (but only so long as such Lender Party remains
lawfully able to do so), shall provide Borrower and Agent with a properly
executed (iv) Internal Revenue Service Form 1001 or 4224, as appropriate, or any
successor form prescribed by the Internal Revenue Service, certifying that such
Lender Party is entitled to benefits under an income tax treaty to which the
United States is a party which reduces the rate of withholding tax on payments
of interest or certifying that the income receivable pursuant to this Agreement
is effectively connected with the conduct of a trade or business in the United
States, (v) Internal Revenue Service Form W-8 or W-9, as appropriate, or any
successor form prescribed by the Internal Revenue Service, and (vi) any other
form or certificate required by any taxing authority (including any certificate
required by Sections 871(h) and 881(c) of the Internal Revenue Code), certifying
that such Lender Party is entitled to an exemption from or a reduced rate of tax
on payments pursuant to this Agreement or any of the other Loan Documents.
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(e) For any period with respect to which a Lender Party has failed to
provide Borrower and Agent with the appropriate form pursuant to the immediately
preceding subsection (unless such failure is due to a change in treaty, Law, or
regulation occurring subsequent to the date on which a form originally was
required to be provided), such Lender Party shall not be entitled to
indemnification under subsection (a) or (b) of this section with respect to
Taxes imposed by the United States; provided, however, that should a Lender
Party, which is otherwise exempt from or subject to a reduced rate of
withholding tax, become subject to Taxes because of its failure to deliver a
form required hereunder, Borrower shall take such steps as such Lender Party
shall reasonably request to assist such Lender Party to recover such Taxes.
(f) If Borrower is required to pay additional amounts to or for the
account of any Lender Party pursuant to this section, then such Lender Party
will agree to use reasonable efforts to change the jurisdiction of its
Applicable Lending Office so as to eliminate or reduce any such additional
payment which may thereafter accrue if such change, in the judgment of such
Lender Party, is not otherwise disadvantageous to such Lender Party and in the
event Lender Party is reimbursed for an amount paid by Borrower pursuant to this
section, it shall promptly return such amount to Borrower.
(g) Within thirty (30) days after the date of any payment of Taxes,
Borrower shall furnish to Agent the original or a certified copy of a receipt
evidencing such payment.
(h) Without prejudice to the survival of any other agreement of Borrower
hereunder, the agreements and obligations of Borrower contained in this section
shall survive the termination of the Commitment Period and the payment in full
of the Notes.
ARTICLE IV - Conditions Precedent to Lending
Section 4.1. Documents to be Delivered. No Lender has any obligation to
make its first Loan, and LC Issuer has no obligation to issue the first Letter
of Credit, unless Agent shall have received all of the following, at Agent's
office in Dallas, Texas, duly executed and delivered and in form, substance and
date satisfactory to Agent:
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(a) This Agreement and any other documents that Lenders are to execute in
connection herewith;
(b) Each Note;
(c) Each Security Document listed in the Security Schedule;
(d) Certain certificates of Borrower including:
(i) An "Omnibus Certificate" of the Secretary or Assistant Secretary
and of the Chairman of the Board or President or any Vice President of
Borrower, which shall contain the names and signatures of the officers of
Borrower authorized to execute Loan Documents and which shall certify to
the truth, correctness and completeness of the following exhibits attached
thereto: (1) a copy of resolutions duly adopted by the Board of Directors
of Borrower and in full force and effect at the time this Agreement is
entered into, authorizing the execution of this Agreement and the other
Loan Documents delivered or to be delivered in connection herewith and the
consummation of the transactions contemplated herein and therein, (2) a
copy of the charter documents of Borrower and all amendments thereto,
certified by the appropriate official of Borrower's state of organization,
and (3) a copy of the bylaws of Borrower; and
(ii) A "Compliance Certificate" of the Chief Financial Officer, Chief
Accounting Officer, Treasurer or Vice President-Finance of Borrower, of
even date with such Loan or such Letter of Credit, in which such officers
certify to the satisfaction of the conditions set out in subsections (a),
(b), (c) and (d) of Section 4.2.
(e) Certificate (or certificates) of the due formation, valid existence
and good standing of Borrower in its state of organization, issued by the
appropriate authorities of such jurisdiction, and certificates of Borrower's
good standing and due qualification to do business, issued by appropriate
officials in any states in which Borrower owns property subject to Security
Documents;
(f) Documents similar to those specified in subsections (d)(i) and (e) of
this section with respect to each Subsidiary Guarantor and the execution by it
of its guaranty of Borrower's Obligations;
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(g) A favorable opinion of internal counsel for Related Persons,
substantially in the form set forth in Exhibit E;
(h) The Initial Financial Statements;
(i) Certificates or binders evidencing Related Persons' insurance in
effect on the date hereof;
(j) Opinions of special counsel to Agent in states where inventory of the
Related Persons is located addressing the perfection of Liens in such inventory;
and
(k) Payment of all commitment, facility, agency, attorney and other fees
required to be paid to any Lender pursuant to any Loan Documents or any
commitment agreement heretofore entered into.
Section 4.2. Additional Conditions Precedent. No Lender has any
obligation to make any Loan (including its first), and LC Issuer has no
obligation to issue any Letter of Credit (including its first), unless the
following conditions precedent have been satisfied:
(a) All representations and warranties made by any Related Person in any
Loan Document shall be true on and as of the date of such Loan or the date of
issuance of such Letter of Credit (except to the extent that the facts upon
which such representations are based have been changed by the extension of
credit hereunder) as if such representations and warranties had been made as of
the date of such Loan or the date of issuance of such Letter of Credit.
(b) No Default shall exist at the date of such Loan or the date of
issuance of such Letter of Credit.
(c) No material adverse change shall have occurred in Borrower's
Consolidated financial condition or results of operations.
(d) Each Related Person shall have performed and complied with all
agreements and conditions required in the Loan Documents to be performed or
complied with by it on or prior to the date of such Loan or the date of issuance
of such Letter of Credit.
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(e) The making of such Loan or the issuance of such Letter of Credit shall
not be prohibited by any Law and shall not subject any Lender or any LC Issuer
to any penalty or other onerous condition under or pursuant to any such Law.
(f) Agent shall have received all documents and instruments which Agent
has then requested, in addition to those described in Section 4.1 (including
opinions of legal counsel for Related Persons and Agent; corporate documents and
records; documents evidencing governmental authorizations, consents, approvals,
licenses and exemptions; and certificates of public officials and of officers
and representatives of Borrower and other Persons), as to (i) the accuracy and
validity of or compliance with all representations, warranties and covenants
made by any Related Person in this Agreement and the other Loan Documents,
(ii) the satisfaction of all conditions contained herein or therein, and
(iii) all other matters pertaining hereto and thereto. All such additional
documents and instruments shall be satisfactory to Agent in form, substance and
date.
ARTICLE V - Representations and Warranties
Section 5.1. Borrower's Representations and Warranties. To confirm each
Lender's understanding concerning Related Persons and Related Persons'
businesses, properties and obligations and to induce each Lender to enter into
this Agreement and to extend credit hereunder, Borrower represents and warrants
to each Lender that:
(a) No Default. No Related Person is in default in the performance of any
of the covenants and agreements contained herein. No event has occurred and is
continuing which constitutes a Default.
(b) Organization and Good Standing. Each Related Person which is a
corporation, limited liability company or partnership is duly organized, validly
existing and in good standing under the laws of its state of organization,
having all corporate or partnership powers required to carry on its business and
enter into and carry out the transactions contemplated hereby. Each such
Related Person is duly qualified, in good standing, and authorized to do
business in all other jurisdictions within the United States wherein the
character of the properties owned or held by it or the nature of the business
transacted by it makes such qualification necessary except where the failure to
do so
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would not result in a material adverse effect on the business or operations of
such Related Person. Each such Related Person has taken all actions and
procedures customarily taken in order to enter, for the purpose of conducting
business or owning property, each jurisdiction outside the United States wherein
the character of the properties owned or held by it or the nature of the
business transacted by it makes such actions and procedures desirable except
where the failure to do so would not result in a material adverse effect on the
business or operations of such Related Person.
(c) Authorization. Each Related Person which is a corporation, limited
liability company or partnership has duly taken all corporate or partnership
action necessary to authorize the execution and delivery by it of the Loan
Documents to which it is a party and to authorize the consummation of the
transactions contemplated thereby and the performance of its obligations
thereunder. Borrower is duly authorized to borrow funds hereunder.
(d) No Conflicts or Consents. The execution and delivery by the various
Related Persons of the Loan Documents to which each is a party, the performance
by each of its obligations under such Loan Documents, and the consummation of
the transactions contemplated by the various Loan Documents, do not and will not
(i) conflict with any provision of (1) any domestic or foreign law, statute,
rule or regulation, (2) the articles or certificate of incorporation, bylaws,
charter, membership agreement or partnership agreement or certificate of any
Related Person, (3) any agreement, judgment, license, order or permit applicable
to or binding upon any Related Person, (4) result in the acceleration of any
Debt owed by any Related Person, or (5) result in or require the creation of any
Lien upon any assets or properties of any Related Person except as expressly
contemplated in the Loan Documents. Except as expressly contemplated in the
Loan Documents no consent, approval, authorization or order of, and no notice to
or filing with, any court or governmental authority or third party is required
in connection with the execution, delivery or performance by any Related Person
of any Loan Document or to consummate any transactions contemplated by the Loan
Documents.
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(e) Enforceable Obligations. This Agreement is, and the other Loan
Documents when duly executed and delivered will be, legal, valid and binding
obligations of each Related Person which is a party hereto or thereto,
enforceable in accordance with their terms except as such enforcement may be
limited by bankruptcy, insolvency or similar laws of general application
relating to the enforcement of creditors' rights.
(f) Initial Financial Statements. The Initial Financial Statements fairly
present Borrower's Consolidated financial position at the respective dates
thereof and the Consolidated results of Borrower's operations and Borrower's
Consolidated cash flows for the respective periods thereof. Since the date of
the audited annual Initial Financial Statements no material adverse change has
occurred in Borrower's financial condition or businesses or in Borrower's
Consolidated financial condition or businesses, except as reflected in the
quarterly Initial Financial Statements or in the Disclosure Schedule. All
Initial Financial Statements were prepared in accordance with GAAP.
(g) Other Obligations and Restrictions. No Related Person has any
outstanding Debt of any kind (including contingent obligations, tax assessments,
and unusual forward or long-term commitments) which is, in the aggregate,
material to Borrower or material with respect to Borrower's Consolidated
financial condition and not shown in the Initial Financial Statements or
disclosed in the Disclosure Schedule or a Disclosure Report. Except as shown in
the Initial Financial Statements or disclosed in the Disclosure Schedule or a
Disclosure Report, no Related Person is subject to or restricted by any
franchise, contract, deed, charter restriction, or other instrument or
restriction which is materially likely in the foreseeable future to materially
and adversely affect the businesses, properties, prospects, operations, or
financial condition of such Related Person or of Borrower on a Consolidated
basis.
(h) Full Disclosure. No certificate, statement or other information
delivered herewith or heretofore by any Related Person to Agent or any Lender in
connection with the negotiation of this Agreement or in connection with any
transaction contemplated hereby contains any untrue statement of a material fact
or omits to state any material fact known to any Related Person (other than
industry-wide risks normally associated with the types of businesses conducted
by the Related Persons) necessary to make the statements contained herein or
therein not misleading as of the date made or deemed made. There is no fact
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known to any Related Person (other than industry-wide risks normally associated
with the types of businesses conducted by the Related Persons) that has not been
disclosed to Agent and each Lender in writing which could materially and
adversely affect Borrower's properties, business, prospects or condition
(financial or otherwise) or Borrower's Consolidated properties, businesses,
prospects or condition (financial or otherwise). Borrower has heretofore
delivered to Agent and each Lender true, correct and complete copies of the
Initial Financial Statements.
(i) Litigation. Except as disclosed in the Initial Financial Statements
or in the Disclosure Schedule: (i) there are no actions, suits or legal,
equitable, arbitrative or administrative proceedings pending, or to the
knowledge of any Related Person threatened, against any Related Person before
any federal, state, municipal or other court, department, commission, body,
board, bureau, agency, or instrumentality, domestic or foreign, which do or may
reasonably be expected to have a material adverse effect on Borrower or, on a
Consolidated basis, Borrower and its properly Consolidated subsidiaries, their
ownership or use of any of their assets or properties, their businesses or
financial condition or prospects, or the right or ability of any Related Person
to enter into the Loan Documents to which it is a party or to consummate the
transactions contemplated thereby or to perform its obligations thereunder, and
(ii) there are no outstanding judgments, injunctions, writs, rulings or orders
by any such governmental entity against any Related Person or any Related
Person's stockholders, partners, directors or officers which have or may
reasonably be expected to have any such effect.
(j) ERISA Liabilities. All currently existing ERISA Plans are listed in
the Disclosure Schedule or a Disclosure Report. Except as disclosed in the
Initial Financial Statements or in the Disclosure Schedule or a Disclosure
Report, no Termination Event has occurred with respect to any ERISA Plan and the
Related Persons are in compliance with ERISA in all material respects. No
Related Person is required to contribute to, or has any other absolute or
contingent liability in respect of, any "multiemployer plan" as defined in
Section 4001 of ERISA. Except as set forth in the Disclosure Schedule or a
Disclosure Report: (i) no "accumulated funding deficiency" (as defined in
Section 412(a) of the Internal Revenue Code) exists with respect to any ERISA
Plan, whether or not waived by the Secretary of the Treasury or his delegate,
and (ii) the current value of each ERISA Plan's benefits does not exceed the
current value of such ERISA Plan's assets available for the payment of such
benefits by more than $500,000.
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(k) Environmental and Other Laws. Except as disclosed in the Disclosure
Schedule or a Disclosure Report: (i) the Related Persons are conducting their
businesses in material compliance with all applicable federal, state and local
laws, including Environmental Laws, and have and are in compliance in all
material respects with all licenses and permits required under any such laws;
(ii) none of the operations or properties of any Related Person is the subject
of federal, state or local investigation regarding any release of any Hazardous
Materials into the environment or the improper storage or disposal (including
storage or disposal at offsite locations) of any Hazardous Materials in which an
adverse determination would potentially result in a loss in excess of five
percent (5%) of Borrower's Consolidated net worth; (iii) no Related Person (and
to the best knowledge of Borrower, no other Person) has filed or received any
notice under any federal, state or local law of any actual or potential
violation of Environmental Laws or any violation of any applicable license or
permit, which violation would potentially result in a loss in excess of five
percent (5%) of Borrower's Consolidated net worth; and (iv) no Related Person
otherwise has any known contingent liability under any Environmental Laws or in
connection with the release into the environment, or the storage or disposal, of
any Hazardous Materials in excess of five percent (5%) of Borrower's
Consolidated net worth.
(l) Names and Places of Business. Neither Borrower nor any Subsidiary
Guarantor, during the preceding five years, had, been known by, or used any
other corporate, trade, or fictitious name, except as disclosed in the
Disclosure Schedule. Except as otherwise indicated in the Disclosure Schedule
or a Disclosure Report, the chief executive office and principal place of
business of Borrower and each of the Subsidiary Guarantors are (and for the
preceding five years have been) located at the address of Borrower set out on
the signature pages hereto or (if different) the address of each such Related
Person set out in the Disclosure Schedule. Except as indicated in the
Disclosure Schedule or a Disclosure Report, neither Borrower nor any Subsidiary
Guarantor has any other office or place of business.
(m) Borrower's Subsidiaries. Borrower does not presently have any
Subsidiary that has assets in excess of $1,000,000 (calculated at net book
value), other than Material Subsidiaries. Except as otherwise revealed in a
Disclosure Report, Borrower owns, directly or indirectly, the equity interest in
each of its Subsidiaries which is indicated in Schedule 3.
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(n) Title to Properties. Each Related Person has good and defensible
title to all of its material properties and assets, free and clear of all
Prohibited Liens.
(o) Government Regulation. Neither Borrower nor any other Related Person
owing Obligations is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Investment Company Act of 1940
(as any of the preceding acts have been amended) or any other statute, law,
regulation or decree which regulates the incurring by such Person of Debt,
including statutes, laws, regulations or decrees relating to common contract
carriers or the sale of electricity, gas, steam, water or other public utility
services.
(p) Insider. Neither Borrower, nor any other Related Person, nor any
Person having "control" (as that term is defined in 12 U.S.C. 375b(9) or in
regulations promulgated pursuant thereto) of Borrower, is a "director" or an
"executive officer" or "principal shareholder" (as those terms are defined in 12
U.S.C. 375b(8) or (9) or in regulations promulgated pursuant thereto) of
Lender, of a bank holding company of which Lender is a Subsidiary or of any
Subsidiary of a bank holding company of which Lender is a Subsidiary.
(q) Officers and Directors. The officers and directors of Borrower are
those persons disclosed in the definitive proxy statement prepared by Borrower
and filed with the Securities and Exchange Commission in connection with
Borrower's most recent annual meeting, copies of which proxy statement have been
previously furnished in connection with the negotiation hereof.
(r) Solvency. Neither Borrower nor any Subsidiary Guarantor is
"insolvent" on the date hereof (that is, the sum of such Person's absolute and
contingent Debt, including the Obligations, exceeds the fair market value of
such Person's assets). Borrower's and each Subsidiary Guarantor's capital is
adequate for the businesses in which such Person is engaged and intends to be
engaged. Neither Borrower nor any Subsidiary Guarantor has hereby incurred, nor
does Borrower nor any Subsidiary Guarantor intend to incur or believe that it
will incur, debts which will be beyond its ability to pay as such debts mature.
The direct or indirect value of the consideration received and to be received by
each Subsidiary Guarantor in connection herewith is reasonably worth at least as
much as the liability and obligations of such Subsidiary Guarantor under Article
VIIA and the incurrence of such Debt and obligations in return for such
consideration may reasonably be expected to benefit each Subsidiary Guarantor,
directly or indirectly.
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(s) Coal Mines.
Neither Borrower nor any Subsidiary Guarantor is engaged in extracting
commercial quantities of coal from properties owned or leased by any such
Person.
Section 5.2. Representation by Lenders. Each Lender hereby represents
that it will acquire its Note for its own account in the ordinary course of its
commercial lending business; however, the disposition of such Lender's property
shall at all times be and remain within its control and, in particular and
without limitation, such Lender may sell or otherwise transfer its Note, any
participation interest or other interest in its Note, or any of its other rights
and obligations under the Loan Documents.
ARTICLE VI - Affirmative Covenants of Borrower
To conform with the terms and conditions under which each Lender is willing
to have credit outstanding to Borrower, and to induce each Lender to enter into
this Agreement and extend credit hereunder, Borrower warrants, covenants and
agrees that until the full and final payment of the Obligations and the
termination of this Agreement, unless Majority Lenders have previously agreed
otherwise:
Section 6.1. Payment and Performance. Borrower will pay all amounts due
under the Loan Documents in accordance with the terms thereof and will observe,
perform and comply with every covenant, term and condition expressed in the Loan
Documents. Borrower will cause the other Related Persons to observe, perform
and comply with every such term, covenant and condition.
Section 6.2. Books, Financial Statements and Reports. Each Related
Person will at all times maintain full and materially accurate books of account
and records. Borrower will maintain and will cause its Subsidiaries to maintain
a standard system of accounting and will furnish the following statements and
reports to Agent and each Lender at Borrower's expense:
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(a) As soon as available, and in any event within ninety (90) days after
the end of each Fiscal Year, complete Consolidated financial statements of
Borrower together with all notes thereto, prepared in reasonable detail in
accordance with GAAP, together with an opinion, based on an audit using
generally accepted auditing standards, by PricewaterhouseCoopers LLP or other
independent certified public accountants selected by Borrower and acceptable to
Majority Lenders, stating that such Consolidated financial statements have been
so prepared. These financial statements shall contain a Consolidated balance
sheet as of the end of such Fiscal Year and Consolidated and consolidating
statements of earnings, of cash flows, and of changes in owners' equity for such
Fiscal Year, each setting forth in comparative form the corresponding figures
for the preceding Fiscal Year. In addition, within one hundred (100) days after
the end of each Fiscal Year Borrower will furnish a report signed by such
accountants stating that they have read this Agreement and further stating that
in making the examination and reporting on the Consolidated financial statements
described above they did not conclude that any Default existed at the end of
such Fiscal Year or at the time of their report, or, if they did conclude that a
Default existed, specifying its nature and period of existence.
(b) As soon as available, and in any event within forty-five (45) days
after the end of each of the first three Fiscal Quarters in each Fiscal Year of
Borrower's Consolidated and consolidating balance sheet as of the end of such
Fiscal Quarter and Consolidated and consolidating statements of Borrower's
earnings and cash flows for the period from the beginning of the then current
Fiscal Year to the end of such Fiscal Quarter, all in reasonable detail and
prepared in accordance with GAAP, subject to changes resulting from normal
year-end adjustments. In addition Borrower will, together with each such set of
financial statements and each set of financial statements furnished under
subsection (b)(i) of this section, furnish a certificate in the form of Exhibit
D signed by the chief financial officer of Borrower stating that such financial
statements are accurate and complete, stating that he has reviewed the Loan
Documents, containing calculations showing compliance (or non-compliance) at the
end of such Fiscal Quarter with the requirements of Sections 7.12 through 7.14
and stating that no Default exists at the end of such Fiscal Quarter or at the
time of such certificate or specifying the nature and period of existence of any
such Default.
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(c) Within forty-five (45) days after the end of each Fiscal Quarter, cash
flow projections based on a rolling four quarter basis, and by April 30 of each
year annual five-year cash flow projections, together with (A) information
prepared by Borrower and/or its geologists and/or consultants supporting such
projections and (B) as to such quarterly projections, any available information
regarding actual cash flow since the end of such Fiscal Quarter.
(d) As soon as available, and in any event within thirty (30) days as of
the end of the prior calendar month, a Borrowing Base Report of Borrower duly
completed by an authorized officer of Borrower which shall contain the
calculation of the Working Capital Borrowing Base and the Cash Earnings
Borrowing Base.
(e) Promptly upon their becoming available, copies of all financial
statements, reports, notices and proxy statements sent by Borrower to its
stockholders and all registration statements, periodic reports and other
statements and schedules filed by Borrower with any securities exchange, the
Securities and Exchange Commission or any similar governmental authority.
(f) A quarterly variance report explaining material variances between
actual versus budgeted amounts for all material business units of Borrower,
including information such as unit price and cost data, capital expenditures,
revenues, and operating costs.
Section 6.3. Other Information and Inspections. Each Related Person will
furnish to Agent any information which Agent may from time to time reasonably
request in writing for itself or on behalf of any Lender concerning any
covenant, provision or condition of the Loan Documents or any matter in
connection with the Related Persons' businesses and operations. Each Related
Person will permit representatives appointed by Agent (including independent
accountants, agents, attorneys, appraisers and any other Persons) to visit and
inspect any of such Related Person's property, including its books of account,
other books and records, and any facilities or other business assets, and to
make extra copies therefrom and photocopies and photographs thereof, and to
write down and record any information such representatives obtain, and each
Related Person shall permit Agent or its representatives to investigate and
verify the accuracy of the information furnished to Agent or any Lender in
connection with the Loan Documents and to discuss all such matters with its
officers, employees and representatives.
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Section 6.4. Notice of Material Events and Changes of Name or Address.
Borrower will promptly notify Agent:
(a) of any material adverse change in Borrower's financial condition or
Borrower's Consolidated financial condition,
(b) of the occurrence of any Default,
(c) of the acceleration of the maturity of any Debt owed by any Related
Person or of any default by any Related Person under any indenture, mortgage,
agreement, contract or other instrument to which any of them is a party or by
which any of them or any of their properties is bound, if such acceleration or
default might have a material adverse effect upon Borrower's Consolidated
financial condition,
(d) of the occurrence of any Termination Event,
(e) of any suit, action or proceeding reasonably anticipated to result in
a claim in excess of $1,000,000, any notice of potential Debt under any
Environmental Laws which might exceed such amount, or any other material adverse
claim asserted against any Related Person or with respect to any Related
Person's properties,
(f) of any labor controversy resulting in or threatening to result in a
strike against any Related Person,
(g) of the filing of any suit or proceeding against any Related Person in
which an adverse decision could have a material adverse effect upon any Related
Person's financial condition, business or operations, and
(h) at least twenty Business Days prior to the date that any Related
Person changes its name or the location of its chief executive office or
principal place of business.
Upon the occurrence of any of the foregoing the Related Persons will take
all necessary or appropriate steps to remedy promptly any such material adverse
change, Default, acceleration, default or Termination Event, to protect against
any such adverse claim, to defend any such suit or proceeding, and to attempt to
resolve or properly contest all controversies on account of any of the
foregoing.
Section 6.5. Maintenance of Properties. Each Related Person will
maintain, preserve, protect, and keep all property material to the conduct of
its business in good condition and in substantial compliance with all applicable
laws, rules and regulations.
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Section 6.6. Maintenance of Existence and Qualifications. Each Related
Person will maintain and preserve its existence and its rights and franchises in
full force and effect and will qualify to do business in all states or
jurisdictions where required by applicable law, except where the failure so to
qualify will not have any material adverse effect on Borrower or any Subsidiary
Guarantor.
Section 6.7. Payment of Trade Debt, Taxes, etc Each Related Person will
(a) timely file all required tax returns; (b) timely pay all taxes, assessments,
and other governmental charges or levies imposed upon it or upon its income,
profits or property; (c) within ninety (90) days after the same becomes due pay
all Debt owed by it on ordinary trade terms to vendors, suppliers and other
Persons providing goods and services used by it in the ordinary course of its
business; (d) pay and discharge when due all other Debt now or hereafter owed by
it; and (e) maintain appropriate accruals and reserves for all of the foregoing
in accordance with GAAP. Each Related Person may, however, delay paying or
discharging any of the foregoing so long as it is in good faith contesting the
validity thereof by appropriate proceedings and has set aside on its books
adequate reserves therefor in accordance with GAAP.
Section 6.8. Insurance. Each Related Person will keep or cause to be
kept adequately insured by financially sound and reputable insurers its property
(including without limitation "all-risk" (earthquake, boiler, machinery)
insurance on general property, and insurance on office contents, mobile
equipment, metals, ores and the like on premises, property-in-transit and mobile
service equipment) in amounts that are customary in the type of businesses in
which the Related Persons are engaged, and such other endorsements as are
customary in the type of businesses in which the Related Persons are engaged.
Upon demand by Agent any insurance policies covering any such property shall be
endorsed (a) to provide that such policies may not be canceled, reduced or
affected in any manner for any reason without fifteen (15) days prior notice to
Agent, and (b) to provide for any other matters which Agent may reasonably
require and as are customary in transactions of this type. Each Related Person
shall at all times maintain adequate insurance against its Debt for injury to
persons or property, which insurance shall be by financially sound and reputable
insurers and shall without limitation provide the following coverages:
comprehensive general liability and automobile liability. Borrower self insures
for workers compensation.
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Section 6.9. Payment of Expenses. Whether or not the transactions
contemplated by this Agreement are consummated, Borrower will promptly (and in
any event, within thirty (30) days after any invoice or other statement or
notice) pay all reasonable costs and expenses incurred by or on behalf of (a)
Agent (including attorneys' fees) in connection with (i) the negotiation,
preparation, execution and delivery of the Loan Documents, and any and all
consents, waivers or other documents or instruments relating thereto, (ii) the
filing, recording, refiling and re-recording of any Loan Documents and any other
documents or instruments or further assurances required to be filed or recorded
or refiled or re-recorded by the terms of any Loan Document, and (iii) the
borrowings hereunder and other action reasonably required in the course of
administration hereof, and (b) Agent or any Lender (including attorneys' fees)
in connection with the defense or enforcement of the Loan Documents or the
defense of Agent's or any Lender's exercise of its rights thereunder (including
costs and expenses of determining whether and how to carry out such defense or
enforcement).
Section 6.10. Performance on Borrower's Behalf. If any Related Person
fails to pay any taxes, insurance premiums, expenses, attorneys' fees or other
amounts it is required to pay under any Loan Document, Agent may pay the same.
Borrower shall immediately reimburse Agent for any such payments and each amount
paid by Agent shall constitute an Obligation owed hereunder which is due and
payable on the date such amount is paid by Agent.
Section 6.11. Interest. Borrower hereby promises to Agent and Lenders to
pay interest at the Default Rate on all Obligations which Borrower has in this
Agreement promised to pay (including Obligations to pay fees or to reimburse or
indemnify Agent or any Lender) and which are not paid when due. Such interest
shall accrue from the date such Obligations become due until they are paid.
Section 6.12. Compliance with Agreements and Law. Each Related Person
will perform all material obligations it is required to perform under the terms
of each indenture, mortgage, deed of trust, security agreement, lease,
franchise, agreement, contract or other instrument or obligation to which it is
a party or by which it or any of its properties is bound. Each Related Person
will conduct its business and affairs in compliance with all laws, regulations,
and orders applicable thereto, including Environmental Laws, in all material
respects.
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Section 6.13. Evidence of Compliance. Each Related Person will furnish to
Agent at such Related Person's or Borrower's expense all evidence which Agent
from time to time reasonably requests in writing as to the accuracy and validity
of or compliance with all representations, warranties and covenants made by any
Related Person in the Loan Documents, the satisfaction of all conditions
contained therein, and all other matters pertaining thereto.
Section 6.14. Subsidiary Guarantors. Borrower shall cause each of its
Subsidiaries now existing or created, acquired or coming into existence after
the date hereof that has assets at any time in excess of $1,000,000 (calculated
at net book value) or having net cash earnings constituting more than ten
percent (10%) of Cash Earnings as of the end of any Fiscal Quarter (calculated
on a rolling twelve-month basis as set forth in the definition of Cash Earnings
in Section 1.1 and then divided by four), to become a Subsidiary Guarantor and a
party hereto at such time and to execute and deliver to Agent a Subsidiary
Guarantor Security Agreement, and shall cause such Subsidiary to deliver at such
time written evidence satisfactory to Agent and its counsel that such Subsidiary
has taken all corporate or partnership action necessary to duly approve and
authorize its joinder hereto and the performance of its obligations as a
Subsidiary Guarantor hereunder. Notwithstanding the foregoing, in the event it
is impracticable for any Subsidiary organized under the laws of a jurisdiction
other than the United States to become a Subsidiary Guarantor as set forth
above, such Subsidiary shall not be required to become a Subsidiary Guarantor.
Section 6.15. Bank Accounts; Offset. To secure the repayment of the
Obligations Borrower and each Subsidiary Guarantor hereby grants to Agent and
each Lender and to each financial institution which hereafter acquires a
participation or other interest in any Loan or Note (in this section called a
"Participant") a security interest, a lien, and a right of offset, each of which
shall be in addition to all other interests, liens, and rights of Agent or any
Lender or Participant at common law, under the Loan Documents, or otherwise, and
each of which shall be upon and against (i) any and all moneys, securities or
other property (and the proceeds therefrom) of Borrower or such Subsidiary
Guarantor now or hereafter held or received by or in transit to Agent or any
Lender or Participant from or for the account of Borrower or such Subsidiary
Guarantor, whether for safekeeping, custody, pledge, transmission, collection or
otherwise, (ii) any and all deposits
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(general or special, time or demand, provisional or final) of Borrower or
such Subsidiary Guarantor with Agent or any Lender or Participant, and (iii) any
other credits and claims of Borrower or such Subsidiary Guarantor at any time
existing against Agent or any Lender or Participant, including claims under
certificates of deposit. Upon the occurrence of any Default, each of Agent and
Lenders and Participants is hereby authorized to foreclose upon, offset,
appropriate, and apply, at any time and from time to time, without notice to
Borrower or any Subsidiary Guarantor, any and all items hereinabove referred to
against the Obligations then due and payable.
Section 6.16. Agreement to Deliver Security Documents; Sale of MWCA, Inc.
(a) Borrower agrees to deliver and to cause each other Related Person to
deliver, to further secure the Obligations whenever requested by Agent in its
sole and absolute discretion, security agreements, financing statements and
other Security Documents in form and substance satisfactory to Agent for the
purpose of granting, confirming, and perfecting first and prior liens or
security interests in any real or personal property which is at such time
Collateral or which was intended to be Collateral pursuant to any Security
Document previously executed and not then released by Agent.
(b) Upon the sale of all of the capital stock of MWCA, Inc. or upon the
sale of all or substantially all or any part of the assets of MWCA, Inc., Agent
will release its security interest in such assets or stock and shall release
MWCA, Inc. from its guarantee hereunder, provided that (i) Agent shall, upon any
such sale, redetermine the Borrowing Base to reflect the sale of MWCA, Inc. or
its assets and (ii) Borrower shall immediately pay to Agent from the proceeds of
any such sale the amount of the Borrowing Base Deficiency, if any, created as a
result of such Borrowing Base redetermination in accordance with the provisions
of Section 2.7.
(c) On the date hereof, MWCA, Inc. is delivering to Agent Security
Documents pursuant to Section 6.16(a) above. Agent has agreed to hold such
Security Documents in anticipation of the sale described in Section 6.16(b) to
record the related financing statements only if Borrower fails to sell all of
the capital stock or all or substantially all of the assets of MWCA, Inc. by
August 31, 1999 or (ii) if earlier, after the occurrence of a Default hereunder.
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Section 6.17. Perfection and Protection of Security Interests and Liens.
Borrower will from time to time deliver, and will cause each other Related
Person from time to time to deliver, to Agent any financing statements,
continuation statements, extension agreements and other documents, properly
completed and executed (and acknowledged when required) by Related Persons in
form and substance satisfactory to Agent, which Agent requests for the purpose
of perfecting, confirming, or protecting any Liens or other rights in Collateral
securing any Obligations.
ARTICLE VII - Negative Covenants of Borrower
To conform with the terms and conditions under which each Lender is willing
to have credit outstanding to Borrower, and to induce each Lender to enter into
this Agreement and make the Loans, Borrower warrants, covenants and agrees that
until the full and final payment of the Obligations and the termination of this
Agreement, unless Majority Lenders have previously agreed otherwise:
Section 7.1. Limitation on Debt and Liens.
(a) Limitation on Debt. No Related Person will in any manner owe or be
liable for any Funded Debt or any Debt under any Guaranty of any Funded Debt
except:
(i) the Obligations.
(ii) Funded Debt (other than Funded Debt permitted in clause (i)
above) and Debt under any Guaranties of any Funded Debt, that, in the
aggregate for all such Funded Debt and Debt under Guaranties for all
Related Persons, does not exceed $5,000,000.
(b) Limitation on Liens. No Related Person will create, assume or permit
to exist any Lien upon any of the properties or assets which it now owns or
hereafter acquires, except:
(i) Liens which secure Obligations only.
(ii) statutory Liens for taxes, statutory mechanics' and materialmen's
Liens incurred in the ordinary course of business, and other similar
statutory Liens incurred in the ordinary course of business, provided such
Liens do not secure Funded Debt and secure only Debt which is not
delinquent or which is being contested as provided in Section 6.7.
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(iii) deposits or pledges of cash or cash equivalents to secure
the payment of workers' compensation, unemployment insurance or other
social security or retirement benefits or obligations, or to secure the
performance of bids, trade contracts, leases, public or statutory
obligations, surety or appeal bonds and other obligations of a like nature
incurred in the ordinary course of business.
(iv) Liens disclosed in the Disclosure Schedule.
(v) Liens securing the purchase price of equipment or filed in
connection with leases of equipment.
(vi) Liens granted to operators of mining joint ventures to secure the
obligations of Related Persons that are not operators.
Section 7.2. Hedging Contracts. No Related Person will be a party to or
in any manner be liable on any Hedging Contract except:
(a) contracts entered into with the purpose and effect of fixing prices on
Products expected to be produced by Related Persons, provided that at all times:
(i) each such contract shall comply with Borrower's hedging policy as approved
by the Board of Directors of Borrower, a copy of which has been provided to
Agent and each Lender, and (ii) no such contract shall be made for speculative
purposes; and
(b) contracts entered into by a Related Person with the purpose and effect
of fixing interest rates on a principal amount of indebtedness of such Related
Person that is accruing interest at a variable rate, provided that (i) the
aggregate notional amount of such contracts never exceeds seventy-five percent
(75%) of the anticipated outstanding principal balance of the indebtedness to be
hedged by such contracts or an average of such principal balances calculated
using a generally accepted method of matching interest swap contracts to
declining principal balances, (ii) the floating rate index of each such contract
generally matches the index used to determine the floating rates of interest on
the corresponding indebtedness to be hedged by such contract, (iii) no such
contract shall be made for speculative purposes, and (iv) each such contract is
with a counterparty or has a guarantor of the obligation of the counterparty who
(unless such counterparty is a Lender or one of its Affiliates) at the time the
contract is made has long-term obligations rated AA or Aa2 or better,
respectively, by either Rating Agency or is an investment grade-rated industry
participant.
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Section 7.3. Limitation on Mergers, Issuances of Securities. Except as
expressly provided in this subsection no Related Person will merge or
consolidate with or into any other business entity. Any Person may be merged
into Borrower, so long as Borrower is the surviving business entity, and any
Subsidiary of Borrower, including Material Subsidiaries, may be merged into or
consolidated with (a) another Subsidiary of Borrower, so long as a Subsidiary
Guarantor is the surviving business entity, or (b) Borrower, so long as Borrower
is the surviving business entity. Borrower will not issue any securities other
than Permitted Debt and shares of its common stock and any options or warrants
giving the holders thereof only the right to acquire such shares. No Material
Subsidiary of Borrower will issue any additional shares of its capital stock or
other securities or any options, warrants or other rights to acquire such
additional shares or other securities except to Borrower and only to the extent
not otherwise forbidden under the terms hereof. No Material Subsidiary of
Borrower which is a partnership will allow any diminution of Borrower's interest
(direct or indirect) therein.
Section 7.4. Limitation on Sales of Property. No Related Person will
sell, transfer, lease, exchange, alienate or dispose of any of its material
assets or properties or any material interest therein except:
(a) equipment which is worthless or obsolete or which is replaced by
equipment of equal suitability and value or is sold in the ordinary course of
business.
(b) Inventory which is sold in the ordinary course of business on ordinary
trade terms.
(c) properties or assets, or interests therein, the value of which does
not exceed in the aggregate ten million dollars ($10,000,000) during any Fiscal
Year provided that immediately upon any such sale the Cash Earnings Borrowing
Base shall be recalculated excluding the Cash Earnings attributable to the
properties and assets so sold (excluding any gain or including any losses
attributable to such sale).
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(d) Borrower may sell all of the capital stock of MWCA, Inc. and/or MWCA,
Inc. may sell all or substantially all or any part of its assets, provided
(i) simultaneously with any such sale, of the net proceeds thereof shall be
applied as a prepayment on the Obligations to the extent required by
Section 6.16, (ii) following any such sale, the Borrowing Base, as adjusted to
take such a sale into account, shall be in excess of the Obligations, and
(iii) both immediately prior to, and immediately following, the consummation of
any such sale, no Default or Event of Default shall have occurred or be
continuing.
Neither Borrower nor any of Borrower's Subsidiaries will sell, transfer or
otherwise dispose of capital stock of any of Borrower's Subsidiaries except that
any Material Subsidiary of Borrower may sell or issue its own capital stock to
the extent not otherwise prohibited hereunder. No Related Person will discount,
sell, pledge or assign any notes payable to it, accounts receivable or future
income except to the extent expressly permitted under the Loan Documents.
Section 7.5. Limitation on Dividends and Redemptions. No Related Person
will declare or pay any dividends on, or make any other distribution in respect
of, any class of its capital stock or any partnership or other interest in it,
nor will any Related Person directly or indirectly make any capital contribution
to or purchase, redeem, acquire or retire any shares of the capital stock of or
partnership interests in any Related Person (whether such interests are now or
hereafter issued, outstanding or created), or cause or permit any reduction or
retirement of the capital stock of any Related Person, except as expressly
provided in this section. Such dividends, distributions, contributions,
purchases, redemptions, acquisitions, retirements or reductions may be made by
the Related Persons without limitation, to Borrower; and to Subsidiary
Guarantors. In addition to the foregoing each Related Person may declare and
pay to any Persons with respect to common or preferred stock (a) cash dividends
so long as no Default or Event of Default has occurred and is continuing, and
(b) dividends payable only in common stock, so long as no Related Person's
interest in any of its Subsidiaries is thereby reduced. If no Default or Event
of Default has occurred and is continuing, Borrower may pay dividends on its
preferred stock.
Section 7.6. Limitation on Investments and New Businesses. No Related
Person will
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(a) make any expenditure or commitment or incur any obligation or enter
into or engage in any transaction except in the ordinary course of business,
(b) engage directly or indirectly in any business or conduct any
operations except in connection with or incidental to its present businesses and
operations, or
(c) make any acquisitions of or capital contributions to or other
investments in any Person, other than Permitted Investments.
Section 7.7. Limitation on Credit Extensions. Except for Permitted
Investments, no Related Person will extend credit, make advances or make loans
other than
(a) normal and prudent extensions of credit to customers buying goods and
services in the ordinary course of business, which extensions shall not be for
longer periods than those extended by similar businesses operated in a normal
and prudent manner,
(b) loans to Borrower or to any Subsidiary Guarantor,
(c) loans in an aggregate outstanding principal amount not to exceed
$1,000,000 to third parties.
Section 7.8. Transactions with Affiliates. No Related Person will engage
in any material transaction with any of its Affiliates on terms which are less
favorable to it than those which would have been obtainable at the time in
arm's-length dealing with Persons other than such Affiliates, provided that such
restriction shall not apply to transactions among Borrower and its wholly owned
Subsidiaries.
Section 7.9. ERISA Plans. No Related Person will incur any obligation to
contribute to any "multiemployer plan" as defined in Section 4001 of ERISA.
Section 7.10. Fiscal Year. Neither Borrower nor any Subsidiary Guarantor
will change its fiscal year.
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Section 7.11. Working Capital and Current Ratio. The ratio of Borrower's
Consolidated current assets to Borrower's Consolidated current liabilities will
never be less than 1.5 to 1.0. For purposes of this subsection, Borrower's
Consolidated current liabilities will be calculated without including any
payments of principal on the Notes which are required to be repaid within one
year from the time of calculation.
Section 7.12. Fixed Charge Coverage Ratio. The ratio of (a) EBITDA as of
the end of each Fiscal Quarter to (b) Fixed Charges as of the end of such Fiscal
Quarter will never be less than (i) .75 to 1.0 from the date hereof until
December 31, 1999 (ii) 1.25 to 1.0 from January 1, 2000 until December 31, 2000,
and (iii) 1.5 to 1.0 at any time after December 31, 2000.
Section 7.13. Tangible Net Worth. Borrower's Consolidated Tangible Net
Worth as of the end of any Fiscal Quarter ending after December 31, 1998 will
not be less than the sum of (a) $137,000,000, plus (b) 50% of Borrower's
Consolidated net income earned during the period from January 1, 1999 to the end
of such Fiscal Quarter, if positive, or zero, if negative, plus (c) 75% of the
net proceeds from the issuance of equity securities of Borrower after December
31, 1999, to the end of such Fiscal Quarter.
As used in this subsection, the following terms shall have the meanings set
forth below:
(A) "Borrower's Consolidated Debt" means all Consolidated liabilities
and similar balance sheet items of Borrower, together with all Funded Debt
of any Related Person.
(B) "Borrower's Consolidated Tangible Net Worth" means the remainder
of (x) all Consolidated assets of Borrower, other than intangible assets
(including without limitation as intangible assets such assets as patents,
copyrights, licenses, franchises, goodwill, trade names, trade secrets and
leases other than oil, gas or mineral leases or leases required to be
capitalized under GAAP), minus (y) Borrower's Consolidated liabilities.
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ARTICLE VIIA - Guaranty
Section 7A.1. Guaranty.
(a) Each Subsidiary Guarantor hereby irrevocably, absolutely, and
unconditionally guarantees to Lenders the prompt, complete, and full payment
when due, and no matter how the same shall become due, of all Obligations.
Without limiting the generality of the foregoing, each Subsidiary Guarantor's
liability hereunder shall extend to and include all post-petition interest,
expenses, and other duties and liabilities of Borrower described above in this
subsection, or below in the following subsection, which would be owed by
Borrower but for the fact that they are unenforceable or not allowable due to
the existence of a bankruptcy, reorganization, or similar proceeding involving
Borrower.
(b) Each Subsidiary Guarantor hereby irrevocably, absolutely, and
unconditionally guarantees to Lenders the prompt, complete and full performance,
when due, and no matter how the same shall become due, of all obligations and
undertakings of Borrower to Lenders under, by reason of, or pursuant to any of
the Loan Documents.
(c) If Borrower shall for any reason fail to pay any Obligation, as and
when such Obligation shall become due and payable, whether at its stated
maturity, as a result of the exercise of any power to accelerate, or otherwise,
each Subsidiary Guarantor will, forthwith upon demand by Agent, pay such
Obligation in full to Agent for distribution to Lenders. If Borrower shall for
any reason fail to perform promptly any Obligation, each Subsidiary Guarantor
will, forthwith upon demand by Agent, cause such Obligation to be performed or,
if specified by Agent or Lenders, provide sufficient funds, in such amount and
manner as Agent shall in good faith determine, for the prompt, full and faithful
performance of such Obligation by Agent or such other Person as Agent shall
designate.
(d) If either Borrower or any Subsidiary Guarantor fails to pay or perform
any Obligation as described in the immediately preceding subsections (a), (b),
or (c), each Subsidiary Guarantor will incur the additional obligation to pay to
Agent, and each Subsidiary Guarantor will forthwith upon demand by Agent pay to
Agent for distribution to Lenders, the amount of any and all expenses, including
fees and disbursements of Agent's and Lender's counsel and of any experts or
agents retained by Agent, which Agent or Lenders may incur as a result of such
failure.
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(e) Notwithstanding the foregoing or any other provisions of this
Agreement, it is agreed and understood that no Subsidiary Guarantor shall be
required to pay hereunder at any time more than the Maximum Guaranteed Amount
determined with respect to such Subsidiary Guarantor as of such time. Each
Subsidiary Guarantor agrees that the Obligations may at any time exceed the sum
of the Maximum Guaranteed Amount plus the aggregate maximum amount of all
Obligations of all other Subsidiary Guarantors, without affecting or impairing
the Obligations of such Subsidiary Guarantor.
Section 7A.2. Unconditional Guaranty.
(a) No action which Agent or Lenders may take or omit to take in
connection with any of the Loan Documents, any of the Obligations (or any other
indebtedness owing by Borrower to Agent or Lenders), or any Collateral, and no
course of dealing of Agent or Lenders with any other Person, shall release or
diminish any Subsidiary Guarantor's obligations, liabilities, agreements or
duties hereunder, affect any Subsidiary Guarantor's guaranty any way, or afford
any Subsidiary Guarantor any recourse against Agent or Lenders, regardless of
whether any such action or inaction may increase any risks to or liabilities of
Agent or Lender or any other Person or increase any risk to or diminish any
safeguard of any Collateral. Without limiting the foregoing, each Subsidiary
Guarantor hereby expressly agrees that Agent or Lenders may, from time to time,
without notice to or the consent of any Subsidiary Guarantor, do any or all of
the following:
(i) Amend, change or modify, in whole or in part, any one or more of
the Loan Documents and give or refuse to give any waivers or other
indulgences with respect thereto.
(ii) Neglect, delay, fail, or refuse to take or prosecute any action
for the collection or enforcement of any of the Obligations, to foreclose
or take or prosecute any action in connection with any Collateral or Loan
Document, to bring suit against any Person, or to take any other action
concerning the Obligations or the Loan Documents.
(iii) Accelerate, change, rearrange, extend, or renew the time,
terms, or manner for payment or performance of any one or more of the
Obligations.
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(iv) Compromise or settle any unpaid or unperformed Obligation or any
other obligation or amount due or owing, or claimed to be due or owing,
under any one or more of the Loan Documents.
(v) Take, exchange, amend, eliminate, surrender, release, or
subordinate any or all Collateral for any or all of the Obligations, accept
additional or substituted Collateral therefor, and perfect or fail to
perfect Lenders' rights in any or all Collateral.
(vi) Discharge, release, substitute or add obligors.
(vii) Apply all monies received from obligors or others, or from
any Collateral for any of the Obligations, as Agent or Lenders may
determine to be in its best interest, without in any way being required to
marshal Collateral or assets or to apply all or any part of such monies
upon any particular Obligations.
(b) No action or inaction of any Person, and no change of law or
circumstances, shall release or diminish any Subsidiary Guarantor's obligations,
liabilities, agreements, or duties hereunder, affect this guaranty in any way,
or afford any Subsidiary Guarantor any recourse against Agent or Lenders.
Without limiting the foregoing, the obligations, liabilities, agreements, and
duties of Subsidiary Guarantors under this Article VIIA shall not be released,
diminished, impaired, reduced, or affected by the occurrence of any or all of
the following from time to time, even if occurring without notice to or without
the consent of any Subsidiary Guarantor:
(i) Any voluntary or involuntary liquidation, dissolution, sale of
all or substantially all assets, marshaling of assets or liabilities,
receivership, conservatorship, assignment for the benefit of creditors,
insolvency, bankruptcy, reorganization, arrangement, or composition of
Borrower or any Subsidiary Guarantor or any other proceedings involving
Borrower or any Subsidiary Guarantor or any of the assets of Borrower or
any Subsidiary Guarantor under laws for the protection of debtors, or any
discharge, impairment, modification, release, or limitation of the
liability of, or stay of actions or lien enforcement proceedings against,
Borrower or any Subsidiary Guarantor, any properties of Borrower or any
Subsidiary Guarantor, or the estate in bankruptcy of Borrower or any
Subsidiary Guarantor in the course of or resulting from any such
proceedings.
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(ii) The failure by Agent or Lenders to file or enforce a claim in any
proceeding described in the immediately preceding subsection (i) or to take
any other action in any proceeding to which Borrower or any Subsidiary
Guarantor is a party.
(iii) The release by operation of law of Borrower or any
Subsidiary Guarantor from any of the Obligations or any other obligations
to Lender.
(iv) The invalidity, deficiency, illegality, or unenforceability of
any of the Obligations or the Loan Documents, in whole or in part, any bar
by any statute of limitations or other law of recovery on any of the
Obligations, or any defense or excuse for failure to perform on account of
force majeure, act of God, casualty, impossibility, impracticability, or
other defense or excuse whatsoever.
(v) The failure of Borrower or any Subsidiary Guarantor or any other
Person to sign any guaranty or other instrument or agreement within the
contemplation of Borrower or any Subsidiary Guarantor, Agent or Lender.
(vi) The fact that any Subsidiary Guarantor may have incurred directly
part of the Obligations or is otherwise primarily liable therefor.
(vii) Without limiting any of the foregoing, any fact or event
(whether or not similar to any of the foregoing) which in the absence of
this provision would or might constitute or afford a legal or equitable
discharge or release of or defense to a guarantor or surety other than the
actual payment and performance by any Subsidiary Guarantor under this
guaranty.
(c) Agent and Lenders may invoke the benefits of this Article VIIA against
any Subsidiary Guarantor before pursuing any remedies against Borrower or any
other Subsidiary Guarantor or any other Person. Agent or Lenders may maintain
an action against any Subsidiary Guarantor hereunder without joining Borrower or
any other Subsidiary Guarantor therein and without bringing separate action
against Borrower or any other Subsidiary Guarantor.
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(d) If any payment to Agent or Lenders by Borrower or any Subsidiary
Guarantor is held to constitute a preference or a voidable transfer under
applicable state or federal laws, or if for any other reason Agent or any Lender
is required to refund such payment to the payor thereof or to pay the amount
thereof to any other Person, such payment to Agent or Lenders shall not
constitute a release of any Subsidiary Guarantor from any liability hereunder,
and each Subsidiary Guarantor agrees to pay such amount to Agent or Lenders on
demand and agrees and acknowledges that this guaranty shall continue to be
effective or shall be reinstated, as the case may be, to the extent of any such
payment or payments. Any transfer by subrogation which is made as contemplated
in Section 7A.6 prior to any such payment or payments shall (regardless of the
terms of such transfer) be automatically voided upon the making of any such
payment or payments, and all rights so transferred shall thereupon revert to and
be vested in Agent and Lenders.
(e) This is a continuing guaranty and shall apply to and cover all
Obligations and renewals and extensions thereof and substitutions therefor from
time to time.
Section 7A.3. Waiver. Each Subsidiary Guarantor hereby waives, with
respect to the Obligations, this guaranty, and the other Loan Documents:
(a) notice of the incurrence of any Obligation by Borrower.
(b) notice that Agent, Lenders, Borrower, any Subsidiary Guarantor, or any
other Person has taken or omitted to take any action under any Loan Document or
any other agreement or instrument relating thereto or relating to any
Obligation.
(c) notice of acceptance of this guaranty and all rights of Subsidiary
Guarantor under 34.02 of the Texas Business and Commerce Code.
(d) demand, presentment for payment, and notice of demand, dishonor,
nonpayment, or nonperformance.
(e) notice of intention to accelerate, notice of acceleration, protest,
notice of protest, and all other notices of any kind whatsoever.
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Section 7A.4. No Subrogation. No Subsidiary Guarantor shall have any
right of subrogation with respect hereto (including any right of subrogation
under 34.04 of the Texas Business and Commerce Code). Each Subsidiary
Guarantor hereby waives any rights to enforce any remedy which such Subsidiary
Guarantor may have against Borrower with respect to its obligations under this
Article VIIA or under applicable laws. Each Subsidiary Guarantor hereby
irrevocably agrees, to the fullest extent permitted by law, that it will not
exercise (and herein waives) any rights against Borrower or any other Person
which it may acquire by way of subrogation, contribution, reimbursement,
indemnification or exoneration under or with respect to this Agreement, the
other Loan Documents or applicable law, by any payment made hereunder or
otherwise. If the foregoing waivers are adjudicated unenforceable by a court of
competent jurisdiction, then each Subsidiary Guarantor agrees that no liability
or obligation of Borrower that shall accrue by virtue of any right to
subrogation, contribution, indemnity, reimbursement or exoneration shall be
paid, nor shall any such liability or obligation be deemed owed, until all of
the Obligations shall have been paid in full.
Section 7A.5. Subordination. Each Subsidiary Guarantor hereby
subordinates and makes inferior to the Obligations any and all indebtedness now
or at any time hereafter owed by Borrower to any Subsidiary Guarantor. Each
Subsidiary Guarantor agrees that after the occurrence of any Default or Event of
Default it will neither permit Borrower to repay such indebtedness or any part
thereof nor accept payment from Borrower of such indebtedness or any part
thereof without the prior written consent of Majority Lender. If any Subsidiary
Guarantor receives any such payment without the prior written consent of
Majority Lenders, the amount so paid shall be held in trust for the benefit of
Agent and Lenders, shall be segregated from the other funds of such Subsidiary
Guarantor, and shall forthwith be paid over to Agent and Lenders to be held by
Agent and Lenders as collateral for, or then or at any time thereafter applied
in whole or in part by Agent and Lenders against, all or any portions of the
Obligations, whether matured or unmatured, in such order as Agent and Lenders
shall elect.
ARTICLE VIII - Events of Default and Remedies
Section 8.1. Events of Default. Each of the following events constitutes
an Event of Default under this Agreement:
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(a) Any Related Person fails to pay any principal component of any
Obligation when due and payable, whether at a date for the payment of a fixed
installment or as a contingent or other payment becomes due and payable or as a
result of acceleration or otherwise;
(b) Any Related Person fails to pay any Obligation (other than the
Obligations in subsection (a) above) when due and payable, whether at a date for
the payment of a fixed installment or as a contingent or other payment becomes
due and payable or as a result of acceleration or otherwise, within five (5)
Business Days after the same becomes due;
(c) Any "default" or "event of default" occurs under any Loan Document
which defines either such term, and the same is not remedied within the
applicable period of grace (if any) provided in such Loan Document;
(d) Any Related Person fails to duly observe, perform or comply with any
covenant, agreement or provision of Section 6.2(d), 6.4, 6.16(b), 6.16(c),
Article VII, or Section 7A.1;
(e) Any Related Person fails (other than as referred to in subsections
(a), (b), (c) or (d) above) to duly observe, perform or comply with any
covenant, agreement, condition or provision of any Loan Document, and such
failure remains unremedied for a period of thirty (30) days after notice of such
failure is given by Agent to Borrower;
(f) Any representation or warranty previously, presently or hereafter made
in writing by or on behalf of any Related Person in connection with any Loan
Document shall prove to have been false or incorrect in any material respect on
any date on or as of which made, or any Loan Document at any time ceases to be
valid, binding and enforceable as warranted in Section 5.1 for any reason other
than its release or subordination by Agent;
(g) Any Related Person fails to duly observe, perform or comply with any
agreement with any Person or any term or condition of any instrument, if such
agreement or instrument is materially significant to Borrower or to Borrower and
its Subsidiaries on a Consolidated basis or materially significant to any
Subsidiary Guarantor, and such failure is not remedied within the applicable
period of grace (if any) provided in such agreement or instrument;
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(h) Any Related Person (i) fails to pay any portion, when such portion is
due, of any of its Debt in excess of $1,000,000, or (ii) breaches or defaults in
the performance of any agreement or instrument by which any such Debt is issued,
evidenced, governed, or secured, and any such failure, breach or default
continues beyond any applicable period of grace provided therefor;
(i) Either (i) any "accumulated funding deficiency" (as defined in Section
412(a) of the Internal Revenue Code) in excess of $3,000,000 exists with respect
to any ERISA Plan, whether or not waived by the Secretary of the Treasury or his
delegate, or (ii) any Termination Event occurs with respect to any ERISA Plan
and the then current value of such ERISA Plan's benefit Debt exceeds the then
current value of such ERISA Plan's assets available for the payment of such
benefit Debt by more than $3,000,000 (or in the case of a Termination Event
involving the withdrawal of a substantial employer, the withdrawing employer's
proportionate share of such excess exceeds such amount);
(j) Any Related Person:
(i) suffers the entry against it of a judgment, decree or order for
relief by a Tribunal of competent jurisdiction in an involuntary proceeding
commenced under any applicable bankruptcy, insolvency or other similar Law
of any jurisdiction now or hereafter in effect, including the federal
Bankruptcy Code, as from time to time amended, or has any such proceeding
commenced against it which remains undismissed for a period of thirty (30)
days; or
(ii) commences a voluntary case under any applicable bankruptcy,
insolvency or similar Law now or hereafter in effect, including the federal
Bankruptcy Code, as from time to time amended; or applies for or consents
to the entry of an order for relief in an involuntary case under any such
Law; or makes a general assignment for the benefit of creditors; or fails
generally to pay (or admits in writing its inability to pay) its debts as
such debts become due; or takes corporate or other action to authorize any
of the foregoing; or
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(iii) suffers the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official of all or a substantial part of its assets or of any part of the
Collateral in a proceeding brought against or initiated by it, and such
appointment or taking possession is neither made ineffective nor discharged
within thirty (30) days after the making thereof, or such appointment or
taking possession is at any time consented to, requested by, or acquiesced
to by it; or
(iv) suffers the entry against it of a final judgment for the payment
of money in excess of $1,000,000 (not covered by insurance satisfactory to
Agent in its discretion), unless the same is discharged within thirty (30)
days after the date of entry thereof or an appeal or appropriate proceeding
for review thereof is taken within such period and a stay of execution
pending such appeal is obtained; or
(v) suffers a writ or warrant of attachment or any similar process to
be issued by any Tribunal against all or any substantial part of its assets
or any part of the Collateral, and such writ or warrant of attachment or
any similar process is not stayed or released within thirty (30) days after
the entry or levy thereof or after any stay is vacated or set aside;
(k) Any Change of Control occurs;
(l) any party to the Indenture fails to observe or perform any of the
covenants, conditions, or agreements of the Indenture or the Bonds in any
material respect, or any party to the Loan Agreement fails to observe or perform
any of the covenants, conditions, or agreements of the Loan Agreement in any
material respect, and such failure has not been waived or not cured within any
applicable grace period; and
(n) A Lien is placed upon any property of any Related Person other than a
Lien described in Section 7.1(b).
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Upon the occurrence of an Event of Default described in subsection (j)(i),
(j)(ii) or (j)(iii) of this section with respect to Borrower, all of the
Obligations shall thereupon be immediately due and payable, without demand,
presentment, notice of demand or of dishonor and nonpayment, protest, notice of
protest, notice of intention to accelerate, declaration or notice of
acceleration, or any other notice or declaration of any kind, all of which are
hereby expressly waived by Borrower and each Related Person who at any time
ratifies or approves this Agreement. Upon any such acceleration, any obligation
of any Lender and any obligation of LC Issuer to issue Letters of Credit
hereunder to make any further Loans shall be permanently terminated. During the
continuance of any other Event of Default, Agent at any time and from time to
time may (and upon written instructions from Majority Lenders, Agent shall),
without notice to Borrower or any other Related Person, do either or both of the
following: (1) terminate any obligation of Lenders to make Loans hereunder, and
any obligation of LC Issuer to issue Letters of Credit hereunder, and
(2) declare any or all of the Obligations immediately due and payable, and all
such Obligations shall thereupon be immediately due and payable, without demand,
presentment, notice of demand or of dishonor and nonpayment, protest, notice of
protest, notice of intention to accelerate, declaration or notice of
acceleration, or any other notice or declaration of any kind, all of which are
hereby expressly waived by Borrower and each Related Person who at any time
ratifies or approves this Agreement.
Section 8.2. Remedies. If any Default shall occur and be continuing,
each Lender Party may protect and enforce its rights under the Loan Documents by
any appropriate proceedings, including proceedings for specific performance of
any covenant or agreement contained in any Loan Document, and each Lender Party
may enforce the payment of any Obligations due it or enforce any other legal or
equitable right which it may have. All rights, remedies and powers conferred
upon Lender Parties under the Loan Documents shall be deemed cumulative and not
exclusive of any other rights, remedies or powers available under the Loan
Documents or at Law or in equity.
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ARTICLE IX - Agent
Section 9.1. Appointment, Powers, and Immunities. Each Lender hereby
irrevocably appoints and authorizes Agent to act as its agent under this
Agreement and the other Loan Documents with such powers and discretion as are
specifically delegated to Agent by the terms of this Agreement and the other
Loan Documents, together with such other powers as are reasonably incidental
thereto. Agent (which term as used in this sentence and in Section 9.5 and the
first sentence of Section 9.6 hereof shall include its Affiliates and its own
and its Affiliates' officers, directors, employees, and agents): (a) shall not
have any duties or responsibilities except those expressly set forth in this
Agreement or in any other Loan Document and shall not be a trustee or fiduciary
for any Lender; (b) shall not be responsible to the Lenders for any recital,
statement, representation, or warranty (whether written or oral) made in or in
connection with any Loan Document or any certificate or other document referred
to or provided for in, or received by any of them under, any Loan Document, or
for the value, validity, effectiveness, genuineness, enforceability, or
sufficiency of any Loan Document, or any other document referred to or provided
for therein or for any failure by any Related Person or any other Person to
perform any of its obligations thereunder; (c) shall not be responsible for or
have any duty to ascertain, inquire into, or verify the performance or
observance of any covenants or agreements by any Related Person or the
satisfaction of any condition or to inspect the property (including the books
and records) of any Related Person or any of its Subsidiaries or Affiliates;
(d) shall not be required to initiate or conduct any litigation or collection
proceedings under any Loan Document; and (e) shall not be responsible for any
action taken or omitted to be taken by it under or in connection with any Loan
Document, except for its own gross negligence or willful misconduct. Agent may
employ agents and attorneys-in-fact and shall not be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
with reasonable care.
Section 9.2. Reliance by Agent. Agent shall be entitled to rely upon any
certification, notice, instrument, writing, or other communication (including,
without limitation, any thereof by telephone or telecopy) believed by it to be
genuine and correct and to have been signed, sent or made by or on behalf of the
proper Person or Persons, and upon advice and statements of legal counsel
(including counsel for any Related Person), independent accountants, and other
experts selected by Agent with
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reasonable care. Agent may deem and treat the payee of any Note as the holder
thereof for all purposes hereof unless and until Agent receives and accepts an
Assignment and Acceptance executed in accordance with Section 10.6 hereof. As
to any matters not expressly provided for by this Agreement, Agent shall not be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding on all of the Lenders; provided, however, that
Agent shall not be required to take any action that exposes Agent to personal
liability or that is contrary to any Loan Document or applicable Law or unless
it shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense which may be incurred by it by reason of taking any
such action.
Section 9.3. Defaults. Agent shall not be deemed to have knowledge or
notice of the occurrence of a Default or Event of Default unless Agent has
received written notice from a Lender or Borrower specifying such Default or
Event of Default and stating that such notice is a "Notice of Default". In the
event that Agent receives such a notice of the occurrence of a Default or Event
of Default, Agent shall give prompt notice thereof to the Lenders. Agent shall
(subject to Section 9.1 hereof) take such action with respect to such Default or
Event of Default as shall reasonably be directed by the Required Lenders,
provided that, unless and until Agent shall have received such directions, Agent
may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default or Event of Default as it shall deem
advisable in the best interest of the Lenders.
Section 9.4. Rights as Lender. With respect to its Percentage Share of
the Maximum Credit Amount and the Loans made by it, Agent (and any successor
acting as Agent) in its capacity as a Lender hereunder shall have the same
rights and powers hereunder as any other Lender and may exercise the same as
though it were not acting as Agent, and the term "Lender" or "Lenders" shall,
unless the context otherwise indicates, include Agent in its individual
capacity. Agent (and any successor acting as Agent) and its Affiliates may
(without having to account therefor to any Lender) accept deposits from, lend
money to, make Investments in, provide services to, and generally engage in any
kind of lending, trust, or other business with any Related Person or any of its
Subsidiaries or Affiliates as if it were not acting
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as Agent, and Agent (and any successor acting as Agent) and its Affiliates
may accept fees and other consideration from any Related Person or any of its
Subsidiaries or Affiliates for services in connection with this Agreement or
otherwise without having to account for the same to the Lenders.
SECTION 9.5. INDEMNIFICATION. THE LENDERS AGREE TO INDEMNIFY AGENT (TO
THE EXTENT NOT REIMBURSED UNDER SECTION 10.4 HEREOF, BUT WITHOUT LIMITING THE
OBLIGATIONS OF BORROWER UNDER SUCH SECTION) RATABLY IN ACCORDANCE WITH THEIR
RESPECTIVE PERCENTAGE SHARES, FOR ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES,
DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES (INCLUDING
ATTORNEYS' FEES), OR DISBURSEMENTS OF ANY KIND AND NATURE WHATSOEVER THAT MAY BE
IMPOSED ON, INCURRED BY OR ASSERTED AGAINST AGENT (INCLUDING BY ANY LENDER) IN
ANY WAY RELATING TO OR ARISING OUT OF ANY LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED THEREBY OR ANY ACTION TAKEN OR OMITTED BY AGENT UNDER ANY LOAN
DOCUMENT (INCLUDING ANY OF THE FOREGOING ARISING FROM THE NEGLIGENCE OF AGENT);
provided that no Lender shall be liable for any of the foregoing to the extent
they arise from the gross negligence or willful misconduct of the Person to be
indemnified. Without limitation of the foregoing, each Lender agrees to
reimburse Agent promptly upon demand for its ratable share of any costs or
expenses payable by Borrower under Section 10.4, to the extent that Agent is not
promptly reimbursed for such costs and expenses by Borrower. The agreements
contained in this section shall survive payment in full of the Loans and all
other amounts payable under this Agreement.
Section 9.6. Non-Reliance on Agent and Other Lenders. Each Lender agrees
that it has, independently and without reliance on Agent or any other Lender,
and based on such documents and information as it has deemed appropriate, made
its own credit analysis of the Borrower and its Subsidiaries and decision to
enter into this Agreement and that it will, independently and without reliance
upon Agent or any other Lender, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under the Loan Documents. Except for
notices, reports, and other documents and information expressly required to be
furnished to the Lenders by Agent hereunder, Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition, or business of any Related Person
or any of its Subsidiaries or Affiliates that may come into the possession of
Agent or any of its Affiliates.
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Section 9.7. Sharing of Set-Offs and Other Payments. Each Lender Party
agrees that if it shall, whether through the exercise of rights under Security
Documents or rights of banker's lien, set off, or counterclaim against Borrower
or otherwise, obtain payment of a portion of the aggregate Obligations owed to
it which, taking into account all distributions made by Agent under Section 3.1,
causes such Lender Party to have received more than it would have received had
such payment been received by Agent and distributed pursuant to Section 3.1,
then (a) it shall be deemed to have simultaneously purchased and shall be
obligated to purchase interests in the Obligations as necessary to cause all
Lender Parties to share all payments as provided for in Section 3.1, and
(b) such other adjustments shall be made from time to time as shall be equitable
to ensure that Agent and all Lender Parties share all payments of Obligations as
provided in Section 3.1; provided, however, that nothing herein contained shall
in any way affect the right of any Lender Party to obtain payment (whether by
exercise of rights of banker's lien, set-off or counterclaim or otherwise) of
Debt other than the Obligations. Borrower expressly consents to the foregoing
arrangements and agrees that any holder of any such interest or other
participation in the Obligations, whether or not acquired pursuant to the
foregoing arrangements, may to the fullest extent permitted by Law exercise any
and all rights of banker's lien, set-off, or counterclaim as fully as if such
holder were a holder of the Obligations in the amount of such interest or other
participation. If all or any part of any funds transferred pursuant to this
section is thereafter recovered from the seller under this section which
received the same, the purchase provided for in this section shall be deemed to
have been rescinded to the extent of such recovery, together with interest, if
any, if interest is required pursuant to the order of a Tribunal order to be
paid on account of the possession of such funds prior to such recovery.
Section 9.8. Investments. Whenever Agent in good faith determines that
it is uncertain about how to distribute to Lender Parties any funds which it has
received, or whenever Agent in good faith determines that there is any dispute
among Lender Parties about how such funds should be distributed, Agent may
choose to defer distribution of the funds which are the subject of such
uncertainty or dispute. If Agent in good faith believes that the uncertainty or
dispute will not be promptly resolved, or if Agent is otherwise required to
invest funds pending distribution to Lender Parties, Agent shall invest such
funds pending distribution; all interest on any such Investment shall
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be distributed upon the distribution of such Investment and in the same
proportion and to the same Persons as such Investment. All moneys received by
Agent for distribution to Lender Parties (other than to the Person who is Agent
in its separate capacity as a Lender Party) shall be held by Agent pending such
distribution solely as Agent for such Lender Parties, and Agent shall have no
equitable title to any portion thereof.
Section 9.9. Benefit of Article IX. The provisions of this Article
(other than the following section) are intended solely for the benefit of Lender
Parties, and no Related Person shall be entitled to rely on any such provision
or assert any such provision in a claim or defense against any Lender. Lender
Parties may waive or amend such provisions as they desire without any notice to
or consent of Borrower or any Related Person.
Section 9.10. Resignation. Agent may resign at any time by giving written
notice thereof to Lenders and Borrower. Each such notice shall set forth the
date of such resignation. Upon any such resignation Borrower may, with the
written concurrence of Majority Lenders, designate a successor Agent. If within
fifteen (15) days after the date of such resignation Borrower makes no such
designation or such written concurrence is not given, Majority Lenders shall
have the right to appoint a successor Agent. A successor must be appointed for
any retiring Agent, and such Agent's resignation shall become effective when
such successor accepts such appointment. If, within thirty (30) days after the
date of the retiring Agent's resignation, no successor Agent has been appointed
and has accepted such appointment, then the retiring Agent may appoint a
successor Agent, which shall be a commercial bank organized or licensed to
conduct a banking or trust business under the Laws of the United States of
America or of any state thereof. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, the retiring Agent shall be discharged
from its duties and obligations under this Agreement and the other Loan
Documents. After any retiring Agent's resignation hereunder the provisions of
this Article IX shall continue to inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under the Loan Documents.
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ARTICLE X - Miscellaneous
Section 10.1. Waivers and Amendments; Acknowledgments.
(a) Waivers and Amendments. No failure or delay (whether by course of
conduct or otherwise) by any Lender in exercising any right, power or remedy
which such Lender Party may have under any of the Loan Documents shall operate
as a waiver thereof or of any other right, power or remedy, nor shall any single
or partial exercise by any Lender Party of any such right, power or remedy
preclude any other or further exercise thereof or of any other right, power or
remedy. No waiver of any provision of any Loan Document and no consent to any
departure therefrom shall ever be effective unless it is in writing and signed
as provided below in this section, and then such waiver or consent shall be
effective only in the specific instances and for the purposes for which given
and to the extent specified in such writing. No notice to or demand on any
Related Person shall in any case of itself entitle any Related Person to any
other or further notice or demand in similar or other circumstances. This
Agreement and the other Loan Documents set forth the entire understanding
between the parties hereto with respect to the transactions contemplated herein
and therein and supersede all prior discussions and understandings with respect
to the subject matter hereof and thereof, and no waiver, consent, release,
modification or amendment of or supplement to this Agreement or the other Loan
Documents shall be valid or effective against any party hereto unless the same
is in writing and signed by (i) if such party is Borrower, by Borrower, (ii) if
such party is Agent or LC Issuer, by such party, and (iii) if such party is a
Lender, by such Lender or by Agent on behalf of Lenders with the written consent
of Majority Lenders (which consent has already been given as to the termination
of the Loan Documents as provided in Section 10.10). Notwithstanding the
foregoing or anything to the contrary herein, Agent shall not, without the prior
consent of each individual Lender, execute and deliver on behalf of such Lender
any waiver or amendment which would: (1) waive any of the conditions specified
in Article IV (provided that Agent may in its discretion withdraw any request it
has made under Section 4.2), (2) increase the maximum amount which such Lender
is committed hereunder to lend, (3) reduce any fees payable to such Lender
hereunder, or the principal of, or interest on, such Lender's Note, (4) postpone
any date fixed for any payment of any such fees, principal or interest,
(5) amend the definitions herein of "Majority Lenders" or "Required Lenders" or
otherwise change the aggregate amount of Percentage Shares which is
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required for Agent, Lenders or any of them to take any particular action under
the Loan Documents, (6) release Borrower from its obligation to pay such
Lender's Note or any Subsidiary Guarantor from its guaranty of such payment,
(7) amend Sections 7.11, 7.12, or 7.13, or (8) amend this Section 10.1(a) or
release any Collateral. Notwithstanding the foregoing, simultaneously with any
sale of the stock and/or assets of MWCA, Inc. permitted by Section 7.4(d), each
Lender agrees that Agent may release the security interest in such stock and/or
assets of MWCA, Inc. Upon the sale of all of such stock or assets, Agent shall
release MWCA, Inc. from its guaranty hereunder and its other agreements set
forth herein, in each case without any further consent or approval from any
Lender.
(b) Acknowledgments and Admissions. Borrower hereby represents, warrants,
acknowledges and admits that (i) it has been advised by counsel in the
negotiation, execution and delivery of the Loan Documents to which it is a
party, (ii) it has made an independent decision to enter into this Agreement and
the other Loan Documents to which it is a party, without reliance on any
representation, warranty, covenant or undertaking by Agent or any Lender,
whether written, oral or implicit, other than as expressly set out in this
Agreement or in another Loan Document delivered on or after the date hereof,
(iii) there are no representations, warranties, covenants, undertakings or
agreements by any Lender as to the Loan Documents except as expressly set out in
this Agreement or in another Loan Document delivered on or after the date
hereof, (iv) no Lender has any fiduciary obligation toward Borrower with respect
to any Loan Document or the transactions contemplated thereby, (v) the
relationship pursuant to the Loan Documents between Borrower and the other
Related Persons, on one hand, and each Lender, on the other hand, is and shall
be solely that of debtor and creditor, respectively, (vi) no partnership or
joint venture exists with respect to the Loan Documents between any Related
Person and any Lender, (vii) Agent is not Borrower's Agent, but Agent for
Lenders, (viii) should an Event of Default or Default occur or exist, each
Lender will determine in its sole discretion and for its own reasons what
remedies and actions it will or will not exercise or take at that time,
(ix) without limiting any of the foregoing, Borrower is not relying upon any
representation or covenant by any Lender, or any representative thereof, and no
such representation or covenant has been made, that any Lender will, at the time
of an Event of Default or Default, or at any other time, waive, negotiate,
discuss, or take or refrain from taking any action permitted under the Loan
Documents with respect
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to any such Event of Default or Default or any other provision of the Loan
Documents, and (x) all Lender Parties have relied upon the truthfulness of the
acknowledgments in this section in deciding to execute and deliver this
Agreement and to become obligated hereunder.
(c) Joint Acknowledgment. THIS WRITTEN AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Section 10.2. Survival of Agreements; Cumulative Nature. All of Related
Persons' various representations, warranties, covenants and agreements in the
Loan Documents shall survive the execution and delivery of this Agreement and
the other Loan Documents and the performance hereof and thereof, including the
making or granting of the Loans and the delivery of the Notes and the other
Loan Documents, and shall further survive until all of the Obligations are paid
in full to each Lender Party and all of Lender Parties' obligations to Borrower
are terminated. All statements and agreements contained in any certificate or
other instrument delivered by any Related Person to any Lender Party under any
Loan Document shall be deemed representations and warranties by Borrower or
agreements and covenants of Borrower under this Agreement. The representations,
warranties, indemnities, and covenants made by Related Persons in the Loan
Documents, and the rights, powers, and privileges granted to Lender Parties in
the Loan Documents, are cumulative, and, except for expressly specified waivers
and consents, no Loan Document shall be construed in the context of another to
diminish, nullify, or otherwise reduce the benefit to any Lender Party of any
such representation, warranty, indemnity, covenant, right, power or privilege.
In particular and without limitation, no exception set out in this Agreement to
any representation, warranty, indemnity, or covenant herein contained shall
apply to any similar representation, warranty, indemnity, or covenant contained
in any other Loan Document, and each such similar representation, warranty,
indemnity, or covenant shall be subject only to those exceptions which are
expressly made applicable to it by the terms of the various Loan Documents.
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Section 10.3. Notices. All notices, requests, consents, demands and other
communications required or permitted under any Loan Document shall be in
writing, unless otherwise specifically provided in such Loan Document (provided
that Agent may give telephonic notices to the other Lender Parties), and shall
be deemed sufficiently given or furnished if delivered by personal delivery, by
facsimile or other electronic transmission, by delivery service with proof of
delivery, or by registered or certified United States mail, postage prepaid, to
Borrower and Related Persons at the address of Borrower specified on the
signature pages hereto and to each Lender Party at its address specified on the
signature pages hereto (unless changed by similar notice in writing given by the
particular Person whose address is to be changed). Any such notice or
communication shall be deemed to have been given (a) in the case of personal
delivery or delivery service, as of the date of first attempted delivery during
normal business hours at the address provided herein, (b) in the case of
facsimile or other electronic transmission, upon receipt, or (c) in the case of
registered or certified United States mail, three (3) days after deposit in the
mail; provided, however, that no Borrowing Notice shall become effective until
actually received by Agent.
Section 10.4. Indemnity. BORROWER AGREES TO INDEMNIFY EACH LENDER PARTY,
UPON DEMAND, FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, CLAIMS,
LOSSES, DAMAGES, PENALTIES, FINES, ACTIONS, JUDGMENTS, SUITS, SETTLEMENTS,
COSTS, EXPENSES OR DISBURSEMENTS (INCLUDING REASONABLE FEES OF ATTORNEYS,
ACCOUNTANTS, EXPERTS AND ADVISORS) OF ANY KIND OR NATURE WHATSOEVER (IN THIS
SECTION COLLECTIVELY CALLED "LIABILITIES AND COSTS") WHICH TO ANY EXTENT (IN
WHOLE OR IN PART) MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST SUCH
LENDER PARTY GROWING OUT OF, RESULTING FROM OR IN ANY OTHER WAY ASSOCIATED WITH
ANY OF THE COLLATERAL, THE LOAN DOCUMENTS AND THE TRANSACTIONS AND EVENTS
(INCLUDING THE ENFORCEMENT OR DEFENSE THEREOF) AT ANY TIME ASSOCIATED THEREWITH
OR CONTEMPLATED THEREIN (WHETHER ARISING IN CONTRACT OR IN TORT OR OTHERWISE AND
INCLUDING ANY VIOLATION OR NONCOMPLIANCE WITH ANY ENVIRONMENTAL LAWS BY ANY
LENDER PARTY OR ANY OTHER PERSON OR ANY LIABILITIES OR DUTIES OF ANY LENDER
PARTY OR ANY OTHER PERSON WITH RESPECT TO HAZARDOUS MATERIALS FOUND IN OR
RELEASED INTO THE ENVIRONMENT).
THE FOREGOING INDEMNIFICATION SHALL APPLY WHETHER OR NOT SUCH LIABILITIES AND
COSTS ARE IN ANY WAY OR TO ANY EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM
OR THEORY OF STRICT LIABILITY OR CAUSED, IN WHOLE OR IN PART BY ANY NEGLIGENT
ACT OR OMISSION OF ANY KIND BY ANY LENDER PARTY,
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provided only that no Lender Party shall be entitled under this section to
receive indemnification for that portion, if any, of any liabilities and costs
which is proximately caused by its own individual gross negligence or willful
misconduct, as determined in a final judgment. If any Person (including
Borrower or any of its Affiliates) ever alleges such gross negligence or willful
misconduct by any Lender Party, the indemnification provided for in this section
shall nonetheless be paid upon demand, subject to later adjustment or
reimbursement, until such time as a court of competent jurisdiction enters a
final judgment as to the extent and effect of the alleged gross negligence or
willful misconduct. As used in this section the term "Lender Party" shall refer
not only to each Person designated as such in Section 1.1 but also to each
director, officer, agent, attorney, employee, representative and Affiliate of
such Person.
Section 10.5. Joint and Several Liability; Parties in Interest.
(a) All Obligations which are incurred by two or more Related Persons
shall be their joint and several obligations and Debt. All grants, covenants
and agreements contained in the Loan Documents shall bind and inure to the
benefit of the parties thereto and their respective successors and assigns;
provided, however, that no Related Person may assign or transfer any of its
rights or delegate any of its duties or obligations under any Loan Document
without the prior consent of the Majority Lenders. Neither Borrower nor any
Affiliates of Borrower shall directly or indirectly purchase or otherwise retire
any Obligations owed to any Lender nor will any Lender accept any offer to do
so, unless each Lender shall have received substantially the same offer with
respect to the same Percentage Share of the Obligations owed to it. If Borrower
or any Affiliate of Borrower at any time purchases some but less than all of the
Obligations owed to all Lender Parties, such purchaser shall not be entitled to
any rights of any Lender under the Loan Documents unless and until Borrower or
its Affiliates have purchased all of the Obligations.
Section 10.6. Assignments and Participations.
(a) Each Lender may assign to one or more Eligible Transferees all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Loans, its Note, and its Percentage Share of
the Maximum Credit Amount); provided, however, that
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(i) each such assignment shall be to an Eligible Transferee;
(ii) except in the case of an assignment to another Lender or an
assignment of all of a Lender's rights and obligations under this
Agreement, any such partial assignment shall be in an amount at least equal
to $5,000,000 or an integral multiple of $5,000,000 in excess thereof;
(iii) each such assignment by a Lender shall be of a constant, and
not varying, percentage of all of its rights and obligations under the Loan
Documents; and
(iv) the parties to such assignment shall execute and deliver to Agent
for its acceptance an Assignment and Acceptance in the form of Exhibit F
hereto, together with any Note subject to such assignment and a processing
fee of $3,500.
Upon execution, delivery, and acceptance of such Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender hereunder and
the assigning Lender shall, to the extent of such assignment, relinquish its
rights and be released from its obligations under this Agreement. Upon the
consummation of any assignment pursuant to this section, the assignor, Agent and
Borrower shall make appropriate arrangements so that, if required, new Notes are
issued to the assignor and the assignee. If the assignee is not incorporated
under the Laws of the United States of America or a state thereof, it shall
deliver to Borrower and Agent certification as to exemption from deduction or
withholding of Taxes in accordance with Section 3.9.
(b) Agent shall maintain at its address referred to in Section 10.3 a copy
of each Assignment and Acceptance delivered to and accepted by it and a register
for the recordation of the names and addresses of the Lenders and their
Percentage Share of the Maximum Credit Amount of, and principal amount of the
Loans owing to, each Lender from time to time (the "Register"). The entries in
the Register shall be conclusive and binding for all purposes, absent manifest
error, and Borrower, Agent and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
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(c) Upon its receipt of an Assignment and Acceptance executed by the
parties thereto, together with any Note subject to such assignment and payment
of the processing fee, Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit F hereto, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the parties thereto.
(d) Each Lender may sell participations to one or more Persons in all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Maximum Credit Amount and its Loans); provided, however, that
(i) such Lender's obligations under this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) the participant shall be entitled to
the benefit of the yield protection provisions contained in Article III and the
right of offset contained in Section 6.15, and (iv) Borrower shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement, and such Lender shall retain the
sole right to enforce the obligations of Borrower relating to its Loans and its
Note and to approve any amendment, modification, or waiver of any provision of
this Agreement (other than amendments, modifications, or waivers decreasing the
amount of principal of or the rate at which interest is payable on such Loans or
Note, extending any scheduled principal payment date or date fixed for the
payment of interest on such Loans or Note, or extending its Maximum Credit
Amount).
(e) Notwithstanding any other provision set forth in this Agreement, any
Lender may at any time assign and pledge all or any portion of its Loans and its
Note to any Federal Reserve Bank as collateral security pursuant to Regulation A
and any Operating Circular issued by such Federal Reserve Bank. No such
assignment shall release the assigning Lender from its obligations hereunder.
(f) Any Lender may furnish any information concerning Borrower or any of
its Subsidiaries in the possession of such Lender from time to time to assignees
and participants (including prospective assignees and participants), subject,
however, to the provisions of Section 10.7 hereof.
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Section 10.7. Confidentiality. Agent and each Lender (each, a "Lending
Party") agrees to keep confidential any information furnished or made available
to it by Borrower pursuant to this Agreement that is marked confidential;
provided that nothing herein shall prevent any Lending Party from disclosing
such information (a) to any other Lending Party or any Affiliate of any Lending
Party, or any officer, director, employee, agent, or advisor of any Lending
Party or Affiliate of any Lending Party, (b) to any other Person if reasonably
incidental to the administration of the credit facility provided herein, (c) as
required by any Law, rule, or regulation, (d) upon the order of any court or
administrative agency, (e) upon the request or demand of any regulatory agency
or authority, (f) that is or becomes available to the public or that is or
becomes available to any Lending Party other than as a result of a disclosure by
any Lending Party prohibited by this Agreement, (g) in connection with any
litigation to which such Lending Party or any of its Affiliates may be a party,
(h) to the extent necessary in connection with the exercise of any remedy under
this Agreement or any other Loan Document, and (i) subject to provisions
substantially similar to those contained in this section, to any actual or
proposed participant or assignee.
Section 10.8. Governing Law; Submission to Process. EXCEPT TO THE EXTENT
THAT THE LAW OF ANOTHER JURISDICTION IS EXPRESSLY ELECTED IN A LOAN DOCUMENT,
THE LOAN DOCUMENTS SHALL BE DEEMED CONTRACTS AND INSTRUMENTS MADE UNDER THE LAWS
OF THE STATE OF TEXAS AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF TEXAS AND THE LAWS OF THE UNITED STATES OF
AMERICA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. CHAPTER 346 OF THE
TEXAS FINANCE CODE (WHICH REGULATES CERTAIN REVOLVING CREDIT LOAN ACCOUNTS AND
REVOLVING TRI-PARTY ACCOUNTS) DOES NOT APPLY TO THIS AGREEMENT OR TO THE NOTES.
EACH OF BORROWER AND THE SUBSIDIARY GUARANTORS HEREBY IRREVOCABLY SUBMITS ITSELF
TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE
STATE OF TEXAS AND AGREES AND CONSENTS THAT SERVICE OF PROCESS MAY BE MADE UPON
IT OR ANY RELATED PERSON IN ANY LEGAL PROCEEDING RELATING TO THE LOAN DOCUMENTS
OR THE OBLIGATIONS BY ANY MEANS ALLOWED UNDER TEXAS OR FEDERAL LAW.
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Section 10.9. Limitation on Interest. Lender Parties, Related Persons and
any other parties to the Loan Documents intend to contract in strict compliance
with applicable usury Law from time to time in effect. In furtherance thereof
such Persons stipulate and agree that none of the terms and provisions contained
in the Loan Documents shall ever be construed to create a contract to pay, for
the use, forbearance or detention of money, interest in excess of the maximum
amount of interest permitted to be charged by applicable Law from time to time
in effect. Neither any Related Person nor any present or future guarantors,
endorsers, or other Persons hereafter becoming liable for payment of any
Obligation shall ever be liable for unearned interest thereon or shall ever be
required to pay interest thereon in excess of the maximum amount that may be
lawfully charged under applicable Law from time to time in effect, and the
provisions of this section shall control over all other provisions of the Loan
Documents which may be in conflict or apparent conflict herewith. Lender
Parties expressly disavow any intention to charge or collect excessive unearned
interest or finance charges in the event the maturity of any Obligation is
accelerated. If (a) the maturity of any Obligation is accelerated for any
reason, (b) any Obligation is prepaid and as a result any amounts held to
constitute interest are determined to be in excess of the legal maximum, or
(c) any Lender or any other holder of any or all of the Obligations shall
otherwise collect moneys which are determined to constitute interest which would
otherwise increase the interest on any or all of the Obligations to an amount in
excess of that permitted to be charged by applicable Law then in effect, then
all sums determined to constitute interest in excess of such legal limit shall,
without penalty, be promptly applied to reduce the then outstanding principal of
the related Obligations or, at such Lender's or holder's option, promptly
returned to Borrower or the other payor thereof upon such determination. In
determining whether or not the interest paid or payable, under any specific
circumstance, exceeds the maximum amount permitted under applicable Law, Lender
Parties and Related Persons (and any other payors thereof) shall to the greatest
extent permitted under applicable Law, (i) characterize any non-principal
payment as an expense, fee or premium rather than as interest, (ii) exclude
voluntary prepayments and the effects thereof, and (iii) amortize, prorate,
allocate, and spread the total amount of interest throughout the entire
contemplated term of the instruments evidencing the Obligations in accordance
with the amounts outstanding from time to time thereunder and the maximum legal
rate of interest from time to time in effect under
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applicable Law in order to lawfully charge the maximum amount of interest
permitted under applicable Law. In the event applicable Law provides for an
interest ceiling under Chapter 303 of the Texas Finance Code (the "Texas Finance
Code") as amended, for that day, the ceiling shall be the "weekly ceiling" as
defined in the Texas Finance Code, provided that if any applicable Law permits
greater interest, the law permitting the greatest interest shall apply. As used
in this section the term "applicable Law" means the Laws of the State of Texas
or the Laws of the United States of America, whichever Laws allow the greater
interest, as such Laws now exist or may be changed or amended or come into
effect in the future.
Section 10.10. Termination; Limited Survival. In its sole and absolute
discretion Borrower may at any time that no Obligations are owing elect in a
written notice delivered to Agent to terminate this Agreement. Upon receipt by
Agent of such a notice, if no Obligations are then owing this Agreement and all
other Loan Documents shall thereupon be terminated and the parties thereto
released from all prospective obligations thereunder. Notwithstanding the
foregoing or anything herein to the contrary, any waivers or admissions made by
any Related Person in any Loan Document, any Obligations under Sections 3.2
through 3.6, and any obligations which any Person may have to indemnify or
compensate any Lender Party shall survive any termination of this Agreement or
any other Loan Document. At the request and expense of Borrower, Agent shall
prepare and execute all necessary instruments to reflect and effect such
termination of the Loan Documents. Agent is hereby authorized to execute all
such instruments on behalf of all Lenders, without the joinder of or further
action by any Lender.
Section 10.11. Severability. If any term or provision of any Loan Document
shall be determined to be illegal or unenforceable all other terms and
provisions of the Loan Documents shall nevertheless remain effective and shall
be enforced to the fullest extent permitted by applicable Law.
Section 10.12. Counterparts; Fax. This Agreement may be separately
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to
constitute one and the same Agreement. This Agreement and the Loan Documents
may be validly executed and delivered by facsimile or other electronic
transmission.
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Section 10.13. Waiver of Jury Trial, Punitive Damages, etc Borrower and
each Lender Party hereby knowingly, voluntarily, intentionally, and irrevocably
(a) waives, to the maximum extent not prohibited by Law, any right it may have
to a trial by jury in respect of any litigation based hereon, or directly or
indirectly at any time arising out of, under or in connection with the Loan
Documents or any transaction contemplated thereby or associated therewith,
before or after maturity, (b) waives, to the maximum extent not prohibited by
Law, any right it may have to claim or recover in any such litigation any
"Special Damages", as defined below, (c) certifies that no party hereto nor any
representative or agent or counsel for any party hereto has represented,
expressly or otherwise, or implied that such party would not, in the event of
litigation, seek to enforce the foregoing waivers, and (d) acknowledges that it
has been induced to enter into this Agreement, the other Loan Documents and the
transactions contemplated hereby and thereby by, among other things, the mutual
waivers and certifications contained in this section. As used in this section,
"Special Damages" includes all special, consequential, exemplary, or punitive
damages (regardless of how named), but does not include any payments or funds
which any party hereto has expressly promised to pay or deliver to any other
party hereto.
Section 10.14. Amendment and Restatement. This Agreement amends and
restates in its entirety the Existing Credit Agreement. Borrower hereby agrees
that (i) the Debt outstanding under the Existing Credit Agreement and all
accrued and unpaid interest thereon and (ii) all accrued and unpaid fees under
the Existing Credit Agreement shall be deemed to be outstanding under and
governed by this Agreement.
Section 10.15. No Novation or Release. Borrower hereby acknowledges,
warrants, represents and agrees that this Agreement is not intended to be, and
shall not be deemed or construed to be, a novation or release of the Existing
Credit Agreement.
Section 10.16. Ratification. Each of Borrower and Subsidiary Guarantors
hereby (a) ratifies and confirms each of the Security Documents listed on the
Security Schedule (the "Designated Security Documents") to which it is a party;
(b) agrees that, as used in each of the Designated Security Documents, each
reference to: (i) the "Credit Agreement," shall henceforth be deemed to be a
reference to this Agreement and (ii) the "Notes" shall henceforth be deemed to
be a reference to the "Note" as used in this Agreement; (c) agrees that the
105
"Obligations" as defined in this Agreement are part of the Secured Obligations
(as defined in each of the Designated Security Documents); and (d) agrees that
each of its obligations and covenants with respect to such Designated Security
Documents to which it is a party shall remain in full force and effect after the
execution of this Agreement. The execution, delivery and effectiveness of this
Agreement and the Notes shall not, except as expressly provided herein or
therein, operate as a waiver of any right, power or remedy of Agent or any
Lender under any Loan Document nor constitute a waiver of any provision of any
Loan Document.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.]
106
IN WITNESS WHEREOF, this Agreement is executed as of the date first written
above.
BORROWER: HECLA MINING COMPANY
By: /s/ Xxxx X. Xxxxxxxx
--------------------------
Xxxx X. Xxxxxxxx
Vice President and Chief Financial Officer
Address (for Borrower and Subsidiary
Guarantors):
0000 Xxxxxxx Xxxxx
Xxxxx x'Xxxxx, Xxxxx 00000-0000
Attention: Xxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
SUBSIDIARY GUARANTORS: MWCA, INC.
By: /s/ J. Gary Childress
----------------------------
J. Gary Childress
Vice President
KENTUCKY-TENNESSEE CLAY COMPANY
By: /s/ J. Gary Childress
----------------------------
J. Gary Childress
Vice President
K-T FELDSPAR CORPORATION
By: /s/ J. Gary Childress
---------------------------
J. Gary Childress
Vice President
107
AGENT AND LENDER: NATIONSBANK, N.A.
By: /s/ Xxxxx Xxxxxxxxx
---------------------------
Xxxxx Xxxxxxxxx,
Senior Vice President
Address:
NationsBank Plaza
000 Xxxx Xxxxxx, 00xx XX (75202)
Post Office Xxx 000000
Xxxxxx, Xxxxx 00000
Attention: Energy Lending Group
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
NationsBank, N.A.
Denver Energy Group
000 Xxxxxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
108
LENDERS: FIRST SECURITY BANK, N.A., Lender
By: /s/ Xxxxx Xxxx
------------------------------
Xxxxx Xxxx
Vice President
Corporate Banking Division
000 Xxxxx 0xx Xxxxxx
Xxxxx Xxxxx 00000
Attention: Xxxxx Xxxx, Vice
President
Telephone: (000)000-0000
Telecopy: (000)000-0000
