Exhibit 3
COMMODORE ENVIRONMENTAL SERVICES, INC.
000 XXXX 00XX XXXXXX, XXXXX 0000
XXX XXXX, XXX XXXX 00000
November 13, 1996
Lanxide Performance Materials, Inc.
0000 Xxxxxxx Xxxx
X.X. Xxx 0000
Xxxxxx, Xxxxxxxx 00000-0000
RE: LINE OF CREDIT AGREEMENT
Gentlemen:
This letter agreement sets forth the terms and
conditions under which Commodore Environmental Services, Inc., a
Delaware corporation (the "Lender"), agrees to make available to
Lanxide Performance Materials, Inc., a Delaware corporation (the
"Borrower"), a line of credit (the "Line of Credit") pursuant to
which, subject to the terms and conditions herein provided, the
Borrower may from time to time borrow from the Lender loans and
advances (collectively, "Advances") in an aggregate principal
amount not to exceed $3,000,000 at any time outstanding (the
"Maximum Loan Amount").
1. Borrowing Procedures.
(a) The Line of Credit will be available to the
Borrower commencing on the date hereof and continuing until such
time as the Advances shall become due and payable in accordance
with the Note (as such term is hereinafter defined). Within the
limit of the Maximum Loan Amount, the Borrower may borrow
hereunder from time to time, and may repay the outstanding
Advances at any time and from time to time.
(b) In order to borrow Advances under the Line of
Credit, the Borrower shall give written notice to the Lender,
specifying the amount of the requested Advance and the specific
use(s) to be made by the Borrower of the proceeds of the
requested Advance, not less than two (2) business days prior to
the date of the proposed borrowing. Provided that (i) this
agreement has not previously expired or been terminated and no
Event of Default (or event that, with notice or the passage of
time or both, would constitute an Event of Default) has then
occurred and is then continuing, and (ii) the Lender shall be
satisfied (in its sole and absolute discretion) with the
Borrower's proposed use(s) of the proceeds of the requested
Advance, the Lender will fund the requested Advance (or so much
thereof as may be available within the limit of the Maximum Loan
Amount) on or before the date of funding as requested by the
Borrower (or such later date on which the Borrower has provided
any supplemental information requested by the Lender with respect
to the proposed use(s) of the proceeds of the requested Advance),
such funds to be wire transferred to such account as may be
designated by the Borrower in its borrowing request. In no
event, however, shall the Lender be required to effect more than
three (3) fundings in any calendar month.
2. The Note.
(a) All Advances shall be represented by a Line
of Credit Promissory Note of even date herewith in the maximum
principal amount of $3,000,000 (the "Note"), provided that,
notwithstanding the face amount of the Note, the outstanding
amount of the Advances shall be as reflected on the Lender's
books and records, which shall at all times be prima facia
evidence of the amount of the outstanding Advances.
(b) The Advances shall bear interest at the
rate(s) in effect from time to time as provided in the Note, and
accrued interest on the Advances shall be payable monthly in
arrears as provided in the Note.
(c) The principal amount of all outstanding
Advances, together with all unpaid accrued interest thereon,
shall be payable as provided in the Note (whether upon maturity,
by acceleration or otherwise).
3. Collateral Security and Other Documents.
(a) The Advances, all interest thereon, and all
other fees and expenses related to the Advances (collectively,
the "Obligations"), shall be secured by a second priority lien
and security interest in favor of the Lender (second in priority
only to the liens and security interests granted by the Borrower
to Commodore Applied Technologies, Inc.) in all of the assets
(tangible and intangible) of the Borrower, pursuant to a Security
Agreement of even date herewith by and between the Lender and the
Borrower (as same may be amended from time to time, the "Security
Agreement"). Pursuant to such Security Agreement, the Borrower
is executing and delivering to the Lender UCC-1 financing
statements as required to perfect the Lender's liens and security
interests, and the Borrower will hereafter execute and deliver
such further agreements, instruments and documents, and take such
further action, as may reasonably be requested by the Lender to
confirm and perfect such liens and security interests.
(b) The Obligations shall further be secured by a
guaranty of payment of Lanxide Corporation (the "Parent"),
pursuant to a Guaranty of even date herewith executed and
delivered by the Parent to the Lender (as same may be amended
from time to time, the "Guaranty").
(c) The obligations of the Lender to make
Advances at any time and from time to time are and shall be
subject to (i) the continued full force and effect of the Note,
the Security Agreement and the Guaranty (except to the extent
released, waived or terminated by act or omission of the Lender),
and (ii) the continued truth and accuracy of all of the
Borrower's representations and warranties pursuant to paragraph 4
below.
4. Borrower's Representations and Warranties. The
Borrower hereby represents and warrants to the Lender that:
(a) The Borrower is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Delaware.
(b) The execution, delivery and performance by
the Borrower of this agreement, the Note and the Security
Agreement have been duly authorized by all necessary corporate
action on the part of the Borrower, and have been duly executed
and delivered by the authorized officers of the Borrower in each
instance.
(c) This agreement, the Note and the Security
Agreement constitute the legal, valid and binding obligations of
the Borrower, enforceable against the Borrower in accordance with
their respective terms, except to the extent that enforceability
may be limited by bankruptcy, insolvency or other similar laws
affecting the enforcement of creditors' rights generally, and by
general principles of equity.
(d) The execution, delivery and performance by
the Borrower of this Agreement, the Note and the Security
Agreement do not violate or constitute a breach of any provision
of the Borrower's certification of incorporation or by-laws, or
any material agreement to which the Borrower is a party or by
which any of its property or assets is bound; and no consent of
any other person is required for the Borrower's execution,
delivery and performance of this Agreement, the Note and the
Security Agreement.
5. Use of Proceeds. All proceeds of the Advances
will be utilized solely for the purpose of funding working
capital deficiencies incurred by the Borrower in the normal
course of business not to exceed $3,000,000 from and after the
date hereof; provided, however, that, without the prior written
consent of the Lender in each instance, no proceeds of Advances
will at any time be utilized, and the Borrower shall not permit
any proceeds of Advances at any time to be utilized, for repaying
the principal amount of any indebtedness of the Borrower, the
Parent or any of its affiliates outstanding on the date hereof.
6. Expenses. The Borrower shall reimburse the Lender
on demand for all reasonable attorneys' fees and other expenses
incurred by the Lender in connection with the preparation and
negotiation of this agreement and the other agreements,
instruments and documents referred to herein, and any amendments
or waivers hereunder or thereunder from time to time. To the
extent that any such reasonable fees and other expenses are not
paid by the Borrower to the Lender on demand, the Borrower hereby
authorizes the Lender to collect same by charging the amount
thereof as an Advance under the Line of Credit.
7. Notices. All notices, requests, demands and other
communications pursuant to this agreement shall be in writing and
delivered personally or sent by telecopier, recognized overnight
courier service, or certified mail (return receipt requested) to
the party being notified at its address first set forth above.
Either party may change its address for notice by means of notice
given in a like manner.
8. Miscellaneous.
(a) This agreement, together with the other
agreements, instruments and documents referred to herein,
represents the entire agreement and understanding between the
parties with respect to the subject matter hereof, and supersedes
all prior discussions and understandings with respect to such
subject matter.
(b) Neither any provision of this agreement nor
any performance hereunder may be amended or waived except by an
agreement in writing executed by the party to be charged
therewith.
(c) This agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their
respective successors and assigns, provided that the Borrower
shall have no right to assign any of its rights or obligations
hereunder without the prior written consent of the Lender.
(d) This agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
(e) This agreement shall be governed by and
construed in accordance with the laws of the State of New York,
without giving effect to principles of conflicts of laws.
(f) The Borrower hereby consents to the
jurisdiction of all courts (state and/or federal) sitting in the
State of New York in connection with any action or proceeding
arising out of or relating to this agreement or the transactions
contemplated hereby, and waives any objection to such venue on
the grounds of forum non conveniens or otherwise. The Borrower
hereby further waives all right to trial by jury in any such
action or proceeding.
Kindly confirm your agreement to the foregoing by
countersigning and return a copy of this agreement to the Lender,
together with the other agreements, instruments and documents
referred to herein.
Very truly yours,
COMMODORE ENVIRONMENTAL SERVICES, INC.
By: /s/ Xxxxxx Xxxxx
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Acknowledged, Confirmed and
Agreed To:
LANXIDE PERFORMANCE MATERIALS, INC.
By: /s/ Xxxx Xxxxxxxxx
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