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CREDIT AGREEMENT
This Credit Agreement (the "Agreement"), dated as of June 1,
1994, is among Michigan National Bank, a national banking
association, and the other banking institutions who appear as
signatories to this Agreement (each a "Bank" and collectively the
"Banks"), Michigan National Bank, as agent ("Agent"), and Xxxxxxx
Industries, Inc., a Delaware corporation ("Borrower").
Recitals
A. Borrower has requested and, subject to the terms and
conditions of this Agreement, the Banks have agreed to provide to
Borrower a line of credit in the amount of $30,000,000.
B. Borrower's obligations under this Agreement are being
guaranteed by Xxxxxxx Brass Co., a Michigan corporation ("Xxxxxxx
Brass") and wholly-owned subsidiary of Borrower, and all of the
subsidiaries of Xxxxxxx Brass (including Xxxxxxx Brass, the
"Brass Subsidiaries"), each pursuant to separate Guaranty and
Covenant Agreements dated as of June 1, 1994, in favor of the
Banks.
C. Concurrently with the execution of this Agreement,
Borrower is also executing a Guaranty and Covenant Agreement
dated as of June 1, 1994, in favor of the Banks, pursuant to
which Borrower is guaranteeing the obligations of Xxxxxxx Copper
Fittings Company, Inc., a Delaware corporation (the "Company"),
which is a wholly-owned subsidiary of Xxxxxxx Brass, under a Loan
Agreement (the "Loan Agreement") dated as of June 1, 1994,
between the Company and the Mississippi Business Finance
Corporation ("MBFC"). Pursuant to the Loan Agreement, the MBFC
is loaning to the Company the principal sum of $18,000,000. The
MBFC is obtaining the $18,000,000 to lend to the Company from the
Banks, which are simultaneously purchasing the MBFC's $18,000,000
Taxable Industrial Development Revenue Bonds, Series 1994
(Xxxxxxx Copper Fittings Company, Inc. Project) (the "Bonds").
The Loan Agreement and the Promissory Note (the "Promissory
Note") of the Company issued under the Loan Agreement in favor of
the Trustee which is acting on behalf of the Banks as purchasers
of the Bonds, evidence the obligations of the Company to repay
the MBFC the $18,000,000 principal, plus interest and other
amounts due by the MBFC on the Bonds. The amounts repaid by the
Company to the MBFC under the Loan Agreement and the Promissory
Note will be used by the MBFC to make payments on the Bonds. The
Company's obligations under the Loan Agreement and the Promissory
Note are also being guaranteed by all of the Brass Subsidiaries
pursuant to separate Guaranty and Covenant Agreements dated as of
June 1, 1994, in favor of the Banks.
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NOW, THEREFORE, in consideration of the mutual covenants,
conditions and provisions as hereinafter set forth, the parties
hereto agree as follows:
1. DEFINITIONS.
1.1 Definitions. For purposes of this Agreement, the
following capitalized terms will have the following meanings
(such definitions to be equally applicable to the singular and
plural forms thereof):
"Advances" means funds disbursed pursuant to the Line of
Credit Loan.
"Advance Date" means a Business Day on which Borrower has
requested in accordance with this Agreement that an Advance be
made hereunder.
"Agent" means Michigan National Bank, a national banking
association, when acting as administrative agent for the Banks
and not as a Bank, and any permitted successor(s) thereto, when
so acting.
"Agent's Address" means 000 Xxxxxxxx Xxxxxx, Xxxx Xxxxx,
Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxx, or at such other
address as Agent may hereafter specify to Borrower in writing.
"Agent's Counsel" means Xxxxxx Xxxxxxx, 000 Xxxxx Xxxxxxxx
Xxxxxx, Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000.
"Bank" means each and, when used in the plural, includes
all of the banking institutions which have signed this Agreement
(including Michigan National Bank, when acting as a Bank and not
as Agent) and their respective successor(s) and permitted
assign(s).
"Borrower's Address" means 0000 Xxxxx Xxxx Xxxx, Xxxxxxx,
Xxxxxx 00000, Attention: Xxxx X. Xxxxxxx, or at such other
address as Borrower may hereafter specify to Agent in writing.
"Borrower" means Xxxxxxx Industries, Inc., a Delaware
corporation, and its permitted successor(s) and assign(s).
"Borrower's Counsel" means Xxxxxxx X. Xxxxxxx, General
Counsel to Borrower.
"Brass Guaranties" means, collectively, the guaranties of
each and every Brass Subsidiary unconditionally guaranteeing the
Loan hereunder, in the form of Exhibit 3.5.1(b) to this Agreement.
"Brass Subsidiary" means Xxxxxxx Brass Co. and all of its
direct and indirect subsidiaries.
"Business Day" means any day except Saturday, Sunday or
any other day on which the Agent is not open to the public for
carrying on substantially all of its banking functions.
"CD Advance" means an Advance which bears interest at the
CD Rate.
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"CD Rate" means the rate of interest payable on a CD
Advance, determined in accordance with Section 2.2.1(iii) hereof.
"Certificate of Deposit Rate" means the secondary market
certificate of deposit rate as published in the money rate
section of the Wall Street Journal on the date of the advance
request, with a maturity closest to the due date of the
particular advance.
"Closing Date" means the date this Agreement is executed
and delivered.
"Code" means the Internal Revenue Code of 1986, as amended.
"Consistent Basis" means, in reference to the application
of GAAP, that the accounting principles observed in the current
period are comparable in all material respects to those applied
in the preceding period.
"Current Assets" and "Current Liabilities" are to be determined, both
as to classification of items and amounts, in accordance with GAAP applied on
a Consistent Basis, provided, that there will be excluded from Current Assets:
(1) all amounts due to Borrower from any of its officers or employees; and (2)
any appraised surplus in excess of book value.
(1) depreciation, depletion and amortization, (2) interest, (3) net tax loss
carryforwards utilized during the applicable year, and (4) extraordinary cash
and non-cash losses, less dividends paid and extraordinary cash and non-cash
income; divided by the sum of interest requirements for the applicable period
plus the current portion of long term debt and capitalized lease obligations
for the applicable period, computed on a rolling four-quarter basis.
"Documents" means, in upper or lower case form, all "documents" and
"instruments" as such terms are defined in the Michigan Uniform Commercial
Code, in which Borrower now or hereafter has any right, title or interest.
"Effective Rate" means the interest rate in effect for a Loan from time
to time when such Loan is not in default, as set forth in Section 2 hereof.
"Environmental Protection Statute" means any federal, state or local
law, statute, or regulation enacted in connection with or relating to the
protection or regulation of the environment, including, but not limited to,
those laws, statutes and regulations regulating, relating to or imposing
liability or standards of conduct concerning the disposal, removal,
production, storing, refining, handling, transferring, processing or
transporting of hazardous materials and any regulations issued or promulgated
in connection with such statutes by any governmental agency or
instrumentality, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liabilities Act, as amended (42
U.S.C. 9601 et seq.) and the Resource Conservation and Recovery Act of 1976,
as amended (42 U.S.C. 6901 et seq.).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
the same may from time to time be amended or supplemented, including any rules
or regulations issued in connection therewith.
"Event of Default" has the meaning set forth in Section 7.1 of this
Agreement.
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"FASB" means the Financial Accounting Standards Board.
"Federal Funds Advance" means an Advance which bears interest at the
Federal Funds Rate.
"Federal Funds Rate" means, for any day, the weighted average of the
rates on overnight federal funds transactions with member banks of the Federal
Reserve System arranged by federal funds brokers as published by the Federal
Reserve Bank of New York for such day (or, if such rate is not so published
for any day, the average rate charged by Agent on such day on such
transactions as determined by Agent).
"FLSA" means the federal Fair Labor Standards Act, as the same may from
time to time be amended or supplemented, including any rules or regulations
issued in connection therewith.
"GAAP" means generally accepted accounting principles as set forth in
the opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and statements and
pronouncements of the FASB or in such other statements by such other Person as
may be approved by a significant segment of the accounting profession, which
are applicable to the circumstances as of the date of determination and which
are applied on a Consistent Basis.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Indebtedness" means all items of indebtedness of any Person, direct or
indirect, joint or several, including (without implied limitation):
(a) All indebtedness guaranteed, directly or indirectly, in any
manner, or endorsed (other than for collection or deposit in the ordinary
course of business), or discounted with recourse by the Person;
(b) All indebtedness in effect guaranteed by the Person, directly or
indirectly, through agreements, contingent or otherwise: (1) to purchase such
indebtedness; or (2) to purchase, sell, or lease (as lessee or lessor)
property, products, materials, or supplies or to purchase or sell services,
primarily for the purpose of enabling the Person to make payment of such
indebtedness or to insure the owner of the indebtedness against loss; or (3)
to supply funds to, or in any other manner invest in, the Person;
(c) All indebtedness secured by (or for which the holder of such
indebtedness has a right, contingent or otherwise, to be secured by), any
mortgage, deed of trust, pledge, lien, security interest, or other charge or
encumbrance upon property owned or acquired by the Person subject thereto,
whether or not the liabilities secured thereby have been assumed by the
Person; and
(d) All indebtedness incurred by the Person as the lessee
of goods or services under leases that, in accordance with GAAP, should be
reflected on the lessee's balance sheet.
"Interest Period", with respect to a CD Advance or a LIBOR Advance, has
the meaning set forth in Section 2.2.2 hereof.
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"Letter of Credit Advance" means the issuance of a letter of credit by
Agent for the account of Borrower under the provisions of this Agreement.
"Lien" means any lien, mortgage, pledge, assignment, security interest,
charge or encumbrance of any kind (including any conditional sale or other
title retention agreement or any lease in the nature thereof) and any
agreement to give any lien, mortgage, pledge, assignment, security interest,
charge or other encumbrance of any kind.
"LIBOR" means (A) the London Interbank Offered Rate ("Unadjusted
LIBOR"), determined as the arithmetic mean, truncated to the nearest one-
hundredth of a percent, of interbank interest rates offered by major banks in
the London, United Kingdom market at 11:00 a.m. London time two (2) Business
Days immediately preceding the commencement of an Interest Period using LIBOR,
for U.S. dollar denominated deposits delivered on the first day of that
Interest Period and maturing on the last day of that Interest Period, as
referenced and reported by one of the following sources, selected by the Agent
on an availability basis in descending order of priority: (1) the Dow Xxxxx
Telerate System "LIBO Page" report of such interest rates as determined by
Xxxxxx'x News Service; (2) the Dow Xxxxx Telerate System "Page 3750" report of
such interest rates as determined by the British Bankers Association; or (3)
the Wall Street Journal, Midwest Edition, report of such interest rate; or (4)
any other generally accepted authoritative source as the Agent may reference,
(B) AS ADJUSTED for the LIBOR Reserve Percentage, if any, in accordance with
the formula:
LIBOR = Unadjusted LIBOR / (1 - LIBOR Reserve).
LIBOR, as so determined, will be fixed when calculating the Effective
Rate until the last day of the specified Interest Period, if such last day is
a Business Day, and if not, then until the next succeeding Business Day unless
the next succeeding Business Day is the first Business Day of a calendar
month, in which case such Interest Period shall end on the Business Day next
preceding such numerically corresponding day, whereupon LIBOR will be
redetermined in the same manner for each successive Interest Period of the
same duration commencing with the next calendar day and, as so determined,
fixed for each day of that Interest Period.
"LIBOR Advance" means an Advance which bears interest at the LIBOR
Rate.
"LIBOR Rate" means the rate of interest payable on a LIBOR
Advance, determined in accordance with Section 2.2.1(ii) hereof.
"LIBOR Reserve" means relative to an Interest Period for which the
Effective Rate is the LIBOR Rate, a percentage (expressed as a decimal) equal
to the maximum aggregate reserve requirements (including all basic, emergency,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements)
specified under regulations issued from time to time by the Board of Governors
of the Federal Reserve System, or any successor agency, and then applicable to
assets or liabilities consisting of and including "Eurocurrency Liabilities",
as currently defined in Regulation D of the Board of Governors of the Federal
Reserve System, having a term approximately equal or comparable to such
Interest Period.
"Line of Credit Loan" or "Loan" has the meaning set forth in
Section 2.1 of this Agreement.
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"Line of Credit Maturity" means June 30, 1996; provided that if
Borrower delivers to Agent, on or before March 31, 1995, and each anniversary
thereof, Borrower's written request to extend the next June 30 maturity date
for the Line of Credit, then the Line of Credit Maturity Date may be extended
by written consent of the Requisite Banks, in their sole discretion, for the
twelve month period succeeding the existing Line of Credit Maturity, subject
to all of the terms and conditions of this Agreement, as the same may be
supplemented or amended.
"Line of Credit Notes" has the meaning set forth in Section 2.3 of this
Agreement.
"Loan Documents" means this Agreement, the Notes, the Brass Guaranties
and all other documents, instruments or certificates executed and delivered to
the Banks in connection with this Agreement and the Loan.
"Maximum Rate" means the maximum non-usurious rate of interest that the
Banks are allowed to contract for, charge, take, reserve or receive under the
applicable laws of any applicable state or of the United States of America
(whichever from time to time permits the highest rate for the use, forbearance
or detention of money) after taking into account, to the extent required by
applicable law, any and all relevant payments or charges under this Agreement,
the Notes or under any other document or instrument executed and delivered in
connection herewith and the indebtedness evidenced by the Notes.
"Notes" means the Line of Credit Notes and any other promissory notes
issued by Borrower to the order of the Banks evidencing the Obligations of
Borrower to repay the Loan.
"Obligations" means any and all liabilities, obligations, or
indebtedness owing by Borrower to the Banks, of any kind or description,
irrespective of whether for the payment of money, whether direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter
arising.
"Permitted Liens" means (a) Liens for taxes, assessments or
governmental charges or levies which, for Borrower and all Subsidiaries other
than Mining Remedial Recovery Corporation and its subsidiaries, are not yet
due or delinquent, or which can thereafter be paid without penalty, or which
are being contested in good faith in accordance with this Agreement, (b)
unfiled inchoate construction Liens for construction work in progress, (c)
workmen's, repairmen's, warehousemen's and carrier's Liens and other similar
Liens, if any, arising in the ordinary course of business, (d) Liens granted
by Subsidiaries in favor of Borrower in connection with inter-company loans,
and (e) "Permitted Liens" as defined in Section 1.1 of the Prior Credit
Agreement.
"Person" or "Persons" means natural persons, corporations, limited
partnerships, general partnerships, joint stock companies, joint ventures,
associations, companies, trusts, lenders, trust companies, land trusts,
vehicle trusts, business trusts or other organizations, irrespective of
whether they are legal entities, and governments and agencies and political
subdivisions thereof.
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"Prime Rate" means the rate of interest announced publicly from time to
time by Citibank, N.A., New York, N.Y. ("Citibank"), to be its prime
commercial lending rate. Reference to the Prime Rate will not be affected by
the fact that the Banks may make loans at different rates from time to time
with respect to the class of loans for which the Prime Rate is established.
Any change in any of the interest rates chargeable hereunder resulting from a
change in the Prime Rate will become effective on the day on which each change
in the Prime Rate is effective. In the event Citibank will no longer announce
a prime commercial lending rate, the Prime Rate will be the prime rate
announced by Agent, from time to time.
"Prime Rate Advance" means an Advance which bears interest at the Prime
Rate.
"Prior Credit Agreement" means the Third Amendment and Restatement of
Credit Agreement dated as of June 1, 1994, between Borrower, as borrower, and
Michigan National Bank, as lender.
"Prohibited Transaction" has the meaning set forth in Section 406 or
Section 2003(a) of ERISA.
"Ratable Share" means for each Bank the percentage shown on the
signature pages of this Agreement, which as to aggregate Advances of the Loan
will be limited to the maximum U.S. dollar amount shown on the signature pages
of this Agreement.
"Reportable Event" has the meaning set forth in Section 4043 of ERISA.
"Requirement of Law" means, with respect to any Person, the
certificate (or articles) of incorporation and bylaws or other organizational
or governing documents of such Person, and any law, treaty, rule or regulation
or determination of an arbitrator or a court or other Governmental Authority,
in each case applicable to or binding upon such Person or any of its property
or to which such Person or any of its property is subject.
"Requisite Banks" means Banks whose Ratable Share of the Loan equals or
exceeds 66-2/3% in the aggregate of the Banks, excluding from both the
numerator and denominator, however, any Bank then in default for a continuous
period greater than ten (10) Business Days of any obligation for the payment
of money to the Agent in respect of its Ratable Share of an Advance or other
expense or liability for which the Agent has in writing requested
reimbursement or indemnification and which the Banks have agreed to pay by the
respective terms, and within the respective meanings, of this Agreement;
provided, Agent will not agree (and Borrower acknowledges that written consent
is required) to change a maturity date, Advance Date, payment date, interest
rate, this definition of Requisite Banks, modify in writing this Agreement or
any other Loan Documents with respect to the foregoing, or release any of the
Brass Guaranties, without the prior written consent of the "Requisite Banks"
which shall mean for those purposes Banks (determined without regard to the
foregoing exclusions) whose Ratable Share of the Loan is 100% in the
aggregate.
"SEC" means the Securities and Exchange Commission or any successor
agency.
"Subsidiaries" means those entities listed on Schedule 1.1 to this
Agreement.
"Tangible Net Worth" has the meaning given that term by the FASB.
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"Taxes" means to any taxes, charges, fees, levies or other assessments
based upon or measured by net or gross income, gross receipts, sales, use, ad
valorem, transfer, franchise, withholding, payroll, employment, excise,
premium or property taxes, together with any interest and penalties, additions
to tax and additional amounts imposed by any federal, state, local or foreign
taxing authority upon any Person.
"Total Outstanding Amount" means the aggregate principal amounts at any
time outstanding under the Line of Credit Loan.
"Unmatured Event of Default" means an event, act, or occurrence which
with the giving of notice or the lapse of time, or both, would become an Event
of Default.
"Yield Maintenance Payment" means, for all CD and LIBOR Advances, an
amount, if positive, which the Borrower is required to pay to maintain each
Bank's anticipated Loan yield with respect to such CD and LIBOR Advances,
which is the product of (i) the dollar amount of CD or LIBOR Advances, as
applicable, which for any voluntary or involuntary reason other than its
scheduled maturity is paid on a date which is not the last day of a CD or
LIBOR Interest Period, as applicable, (ii) the difference between the
Effective Rate immediately prior to such payment and the CD Rate or LIBOR
Rate, as applicable, as determined by Agent for the same Interest Period on
the payment date, and (iii) the ratio of the number of full calendar days
which on the date of payment remain until the conclusion of the applicable
Interest Period and 360 days.
1.2 Accounting Terms. All accounting terms not specifically defined
herein, to the extent not inconsistent with definitions set forth in Section
1.1 of this Agreement, will be construed in accordance with GAAP as in effect
from time to time, including, without limitation, applicable statements,
bulletins and interpretations issued by the FASB and bulletins, opinions,
interpretations and statements issued by the American Institute of Certified
Public Accountants or its committees. When used herein, the term "financial
statements" will include the notes and schedules thereto.
1.3 Other Definitional Provisions.
(a) Unless otherwise specified therein, all terms defined in
this Agreement will have the defined meanings when used in the Loan Documents
or any certificate or other document made or delivered pursuant hereto.
(b) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement will refer to this Agreement as a
whole and not to any particular provision of this Agreement. Section,
subsection, Schedule and Exhibit references contained in this Agreement are
references of Sections, subsections, Schedules and Exhibits in or to this
Agreement unless otherwise specified.
2. AMOUNT AND TERMS OF LINE OF CREDIT LOAN.
2.1 Amount of Line of Credit. Subject to the terms and conditions
hereof, Banks agree to advance to Borrower from the Closing Date until the
Line of Credit Maturity, at such times and in such amounts as Borrower may
request in accordance with Section 2.2 hereof, up to the aggregate principal
amount of $30,000,000 (the "Line of Credit Loan" or "Loan"). The amounts
borrowed under the Line of Credit Loan may be borrowed, repaid and reborrowed.
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2.2 Notice and Manner of Borrowing.
2.2.1 Borrower may select from one of the following interest
rate options when requesting an Advance:
(i) The Prime Rate, less .50%; or
(ii) LIBOR, plus 0.80%; or
(iii) The Certificate of Deposit Rate, plus 1.35%; or
(iv) The Federal Funds Rate, plus 1.80%.
2.2.2 Each Advance using the interest rate options set forth in
subsections 2.2.1(ii) and 2.2.1(iii) will be for a specified time period (each
an "Interest Period") of (i) for LIBOR Advances, one (1) month, two (2)
months, three (3) months, or six (6) months, and (ii) for CD Advances, thirty
(30) days, sixty (60) days, ninety (90) days, or one hundred eighty (180)
days, in each instance with a specified due date not later than the Line of
Credit Maturity, on which date all outstanding principal and interest related
to the Advance will be repaid in full to Agent. Advances may be obtained
under the Line of Credit until the Line of Credit Maturity, at which time all
principal and interest outstanding on the Line of Credit will be immediately
due and payable by Borrower to Agent.
2.2.3 Borrower shall give Agent notice of its request for each
Advance in substantially the form of Exhibit 2.2.3 hereto (with sufficient
executed copies for each Bank) not later than 11:00 a.m. Detroit time (i)
three (3) Business Days prior to the date such Advance is requested to be made
if such Advance is to be a LIBOR Advance, (ii) three (3) Business Days prior
to the date a letter of credit is requested to be issued (a "Letter of Credit
Advance"), (iii) on the date such Advance is requested to be made in all other
cases, which notice shall specify whether a Prime Rate Advance, a LIBOR
Advance, a CD Advance, a Federal Funds Advance or a Letter of Credit Advance
is requested and, in the case of each requested CD Advance and LIBOR Advance,
the Interest Period to be initially applicable to such Advance and, in the
case of each Letter of Credit Advance, the interest rate option to be
applicable in the event Borrower fails to reimburse Agent immediately upon
Agent's honoring of the letter of credit and such other information as may be
necessary for the issuance thereof by Agent. Agent shall provide notice of
such requested Advance to each Bank. Subject to the terms and conditions of
this Agreement, the proceeds of each such requested Advance (other than a
Letter of Credit Advance) shall be made available to Borrower by depositing
the proceeds thereof, in immediately available funds, in an account maintained
and designated by Borrower at the principal office of Agent. Subject to the
terms and conditions of this Agreement, Agent shall, on the date any Letter of
Credit Advance is requested to be made, issue the related letter of credit on
behalf of the Banks for the account of Borrower. Notwithstanding anything
herein to the contrary, Agent may decline to issue any requested letter of
credit on the basis that the beneficiary, the purpose of issue or the terms or
the conditions of drawing are unacceptable to it in its reasonable discretion,
including without limitation, if Agent determines that the purpose of such
issuance is outside the ordinary course of business of Agent.
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2.2.4 Each Bank, on the date any Advance is requested to be
made, shall make its pro rata share of such Advance available in immediately
available funds at the principal office of Agent for disbursement to Borrower.
Unless Agent shall have received notice from any Bank prior to the date such
Advance is requested to be made under this Section 2.2 that such Bank will not
make available to Agent such Bank's pro rata portion of such Advance, Agent
may assume that such Bank has made such portion available to Agent on the date
such Advance is requested to be made in accordance with this Section 2.2. If
and to the extent such Bank shall not have so made such pro rata portion
available to Agent, Agent may (but shall not be obligated to) make such amount
available to Borrower, and such Bank and Borrower severally agree to pay to
Agent forthwith on demand such amount together with interest thereon, for each
day from the date such amount is made available to Borrower by Agent until the
date such amount is repaid to Agent, at a rate per annum equal to the interest
rate applicable to such Advance during such period. If such Bank shall pay
such amount to Agent together with interest, such amount so paid shall
constitute a Loan by such Bank as a part of such Advance for purposes of this
Agreement. The failure of any Bank to make its pro rata portion of any such
Advance available to Agent shall not relieve any other Bank of its obligations
to make available its pro rata portion of such Advance on the date such
Advance is requested to be made, but no Bank shall be responsible for failure
of any other Bank to make such pro rata portion available to Agent on the date
of any such Advance.
2.2.5 Upon fulfillment of the conditions set forth in this
Section 2.2, Section 3.5 (and subject to Agent's then current deadlines for
wire transfers and crediting of Agent and Bank accounts), and Sections 8.2.1
and 8.2.2, Agent will disburse such Advance (other than a Letter of Credit
Advance) to Borrower in immediately available funds at Borrower's expense.
2.3 Authorization and Issuance of Line of Credit Note. All
Advances made by the Banks pursuant to the Line of Credit Loan will be
evidenced by separate promissory notes of Borrower, in the form of Exhibit 2.3
to this Agreement (each a "Line of Credit Note" and collectively the "Line of
Credit Notes"), to be executed and delivered by Borrower to each of the Banks,
in the principal amount of each such Bank's commitment as set on the signature
pages to this Agreement, on the Closing Date.
2.4 Unused Commitment. Borrower will pay to Agent for the
Banks on a quarterly basis, in arrears, during the term of the Line of Credit,
beginning October 1, 1994, from funds other than those supplied by the Line of
Credit, an amount equal to one quarter of 1% (0.25%) per annum of the daily
average unused portion of the Line of Credit.
2.5 Use of Proceeds. The proceeds of the Line of Credit Loan
will be used by Borrower (i) to repay and replace certain line of credit
Indebtedness outstanding immediately prior to the execution of this Agreement
and (ii) for general corporate purposes.
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2.6 Payment. Interest will be paid monthly by Borrower to
Agent upon the outstanding principal balance of the Line of Credit Loan from
the date advanced at the applicable rates as determined according to Section
2.2.1 above. Repayment of principal on CD Advances or LIBOR Advances will be
made at maturity. Repayment of principal on Prime Rate Advances and Federal
Funds Advances will be made as Borrower, in its sole discretion, determines
that working capital permits. The outstanding principal balance of the Line
of Credit Loan, together with accrued interest, will be due and payable in
full at the Line of Credit Maturity. All payments of principal and interest
by Borrower to Agent shall be made in immediately available United States
funds.
2.7 Prepayments. Borrower may prepay, in whole or in part, at any
time, without premium or penalty, any Prime Rate or Federal Funds Advances
under the Line of Credit. CD Advances and LIBOR Advances may only be prepaid
upon five (5) days' prior written notice, from Borrower to Agent, and upon
payment by Borrower on the date of prepayment of the applicable Yield
Maintenance Payment. Any other provisions of this Agreement to the contrary
notwithstanding, if at any time during the term of this Agreement, the Total
Outstanding Amount will exceed $30,000,000, Borrower will immediately, and in
any event within two (2) Business Days, remit and pay to Agent such amounts as
may be necessary to reduce the Total Outstanding Amount to $30,000,000.
Borrower may terminate the Line of Credit at any time upon delivery of written
notice to Agent sixty (60) days prior to such termination.
2.8 Loan Account. Advances under the Line of Credit Loan will be
charged to an account in Borrower's name on Agent's books, and Agent will
debit to such account the amount of each Advance when made and credit to such
account the amount of each repayment thereunder. Agent will render Borrower,
from time to time, a statement setting forth the debit balance in the loan
account, which will be deemed to be correct and accepted by Borrower, unless
Agent receives a written statement of exceptions within ten (10) days after
such statement has been rendered to Borrower. Such statement will be prima
facie evidence of the correctness of the Advances owing to the Banks by
Borrower hereunder, unless there will be manifest error evident on its face
Similarly, each Bank is hereby authorized by Borrower to record in its books
and records, the date, and amount and type of each Advance and the duration of
the related Interest Period (if applicable), the amount of each payment or
prepayment of principal thereon, which books and records shall constitute
prima facie evidence of the information so recorded, provided, however, that
failure of any Bank to record, or any error in recording, any such information
shall not relieve Borrower of its obligation to repay the outstanding
principal amounts of the Loan, all accrued interest thereon and other amounts
payable with respect thereto in accordance with the terms of the Notes and
this Agreement.
3. GENERAL PROVISIONS.
3.1 Upfront Fee. Borrower will pay to Agent for the Banks on the
Closing Date an upfront fee in the amount of one-eighth of 1% for each Bank's
commitment.
3.2 Agent Administrative Fee. Borrower will pay to Agent on the
Closing Date and during the term of this Agreement such administrative fees as
may be agreed in writing from time to time by Agent and Borrower for Agent's
services as such hereunder.
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3.3 Overdue Rate.
3.3.1 Any payments of principal or interest not paid when due or
declared due, whether at maturity, by acceleration, by lapse of time or
otherwise, including any fees, costs or expenses advanced or paid by Agent,
will bear interest thereafter, at the option of Agent, and without affecting
any of the Bank's rights and remedies provided for herein and in the Note, at
two percent (2%) per annum in excess of the Effective Rate.
3.3.2 If any required payment under any Note is not paid within ten (10)
days from the date it is due, at the option of Agent, a late charge of five
cents ($.05) for each dollar of the payment so overdue may be charged.
3.4 Computation of Interest and Fees; Maximum Interest Rate.
3.4.1 All computations of interest on the Loan and interest due
thereunder for any period will be calculated on the basis of the actual number
of days elapsed over a year of three hundred sixty (360) days. Interest will
accrue from the date of any Advance up to but excluding the date of repayment
of the Loan, in accordance with the provisions hereof.
3.4.2 Notwithstanding anything to the contrary contained in this
Agreement, Borrower will not be obligated to pay, and the Banks will not be
entitled to charge, collect or receive, interest in excess of the Maximum Rate
and in the event the Banks ever receive, collect or apply, as interest, any
such excess, such amount which would be excessive interest will be deemed a
partial prepayment of principal and treated hereunder as such; and, if the
principal hereof is paid in full, any remaining excess will immediately be
returned to Borrower. If any construction of this Agreement, the Note or the
other Loan Documents indicates a different right given to the Banks to ask
for, demand or receive any larger sum as interest, such as a mistake in
calculation or wording, this clause will override and control, it being the
intention of Borrower and the Banks that this Agreement, the Notes and the
other Loan Documents will in all respects comply with applicable law, and
proper adjustment will automatically be made accordingly. In determining
whether or not the interest paid or payable, under any specific contingency,
exceeds the Maximum Rate, Borrower and the Banks will, to the maximum extent
permitted by law (i) characterize any nonprincipal 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 through the entire contemplated term of such indebtedness
until payment in full of the principal (including the period of any extension
or renewal thereof) so that the interest on account of such indebtedness will
not exceed the Maximum Rate.
3.5 Conditions Precedent to the Execution and Delivery of this
Agreement. The obligation of the Banks to execute and deliver this Agreement
is subject to the fulfillment, in form and substance satisfactory to Agent and
its counsel, of each of the following conditions, unless otherwise noted:
3.5.1 Agent will have received each of the following documents,
duly executed and delivered by Borrower, each of which will be in full force
and effect:
(a) The Line of Credit Notes, in the form of Exhibit 2.3.
(b) The Brass Guaranties, in the form of Exhibit 3.5.1(b)
to this Agreement (the "Brass Guaranties").
13
(c) Such other documents and certificates as may be
necessary or desirable to evidence the Obligations, representations,
warranties and covenants of Borrower hereunder and the Brass Subsidiaries
under the Brass Guaranties.
3.5.2 Agent will have received a good standing certificate of
Borrower and each Brass Subsidiary from each state in which Borrower and each
Brass Subsidiary is incorporated and each other state, if different, in which
the principal part of its business activity is conducted, dated a recent date,
indicating that Borrower and each Subsidiary is in good standing in each such
state; provided that Borrower covenants to deliver to Agent, within thirty
(30) days of the Closing Date, those good standing certificates which have not
been so delivered to Agent on the Closing Date.
3.5.3 Agent will have received a copy of the resolutions of the
Board of Directors of Borrower (i) authorizing the execution, delivery and
performance of the Loan Documents, (ii) authorizing the borrowings
contemplated hereunder, and (iii) certified by the Secretary of Borrower as of
the Closing Date, which certificate will state that the resolutions thereby
certified have not been amended, modified, revoked or rescinded as of the date
of such certificate.
3.5.4 Agent will have received certified copies of the charter
of Borrower, certified by an officer of Borrower on the Closing Date, as true,
complete and correct copies thereof.
3.5.5 Agent will have received a certificate of the Secretary of
Borrower as to the incumbency and signatures of the person or persons
authorized to execute and deliver the Loan Documents.
3.5.6 Agent will have received a certificate of the Chief
Financial Officer, the Vice President-Legal or Chief Executive Officer of
Borrower stating, on behalf of Borrower, that each of the representations and
warranties made in or pursuant to Section 4 of this Agreement or which are
contained in any other Loan Document or any certificate, document or financial
or other statement furnished by Borrower at any time under or in connection
herewith, is true and correct in all respects on and as of the Closing Date
3.5.7 A gent will have received reimbursement for legal fees and
expenses incurred by Agent in the preparation of the transactions contemplated
by this Agreement.
3.5.8 Agent will have received on behalf of the Banks the
Upfront Fee required by Section 3.1 hereof.
3.5.9 No suit, action, investigation, inquiry or other
proceeding, including, without limitation, the enactment or promulgation of a
statute or rule by or before any arbitrator or any Governmental Authority will
be pending and no preliminary or permanent injunction or order by a state or
federal court will have been entered (i) in connection with any Loan Document
or any of the transactions contemplated hereby or thereby or (ii) which, in
any such case, in the reasonable judgment of each of the Banks, would have a
material adverse effect on (A) the transactions contemplated by this Agreement
or (B) the business, operations, properties, condition (financial or
otherwise) or prospects of Borrower.
14
3.5.10 Agent will have received a schedule, entitled Schedule
3.5.10, setting forth the policies of insurance, including the effective dates
of such policies, carried by Borrower and its Subsidiaries on the Closing
Date.
3.5.11 No Event of Default and no Unmatured Event of Default will
have occurred and be continuing on the date of the Loan, nor will either
result from the making of such Loan.
3.5.12 Agent will have received the written opinion, dated the
Closing Date, of Borrower's Counsel suitable to Agent in form and substance
satisfactory to Agent.
3.5.13 Agent will have determined that Borrower has met all
Requirements of Law which may adversely impact, as determined solely by Agent,
the enforceability, validity or collectibility of the Loan.
3.5.14 All other documents and legal matters in connection with
the transactions contemplated by this Agreement will have been delivered
and/or executed and will be in form and substance satisfactory to Agent and
its counsel.
3.6 Conditions Precedent to all Advances under the Line of Credit Loan.
The obligation of the Banks and each of them to make Advances is subject to
the fulfillment, in form and substance satisfactory to Agent and its counsel,
of each of the following conditions on or before the date of each such
Advance:
3.6.1 As of the date of making the Advance, no Event of Default
and no Unmatured Event of Default will have occurred or be continuing, nor
will either result from or exist after the making of such Advance.
3.6.2 This Agreement and each of the other Loan Documents will be
in full force and effect.
3.6.3 Each of the representations and warranties made in or
pursuant to Section 4 of this Agreement or which are contained in any other
Loan Document or any certificate, document or financial or other statement
furnished by Borrower and/or any Subsidiary at any time under or in connection
with any of the transactions contemplated by the Loan Documents, will be true
and correct in all material respects on and as of the date of the Advance as
if made on and as of the date of the Advance (unless stated to relate to a
specific earlier date, in which case such representations and warranties will
be true and correct in all material respects as of such earlier date).
3.6.4 Agent will have received, reviewed and approved the
consolidated and consolidating monthly financial statements of Borrower as
delivered to Agent in accordance with Sections 5.3.1 and 5.3.2 below.
3.6.5 There has been no change that has a materially adverse
effect on the business, operations, properties or condition (financial or
otherwise) of Borrower and its Subsidiaries, taken as a whole, since the date
of the last financial statements of Borrower delivered to Agent.
15
3.6.6 Compensation for Increased Costs.
(a) In the event after the date of execution of this
Agreement, any introduction of any law, or any change in any law, or the
interpretation or application thereof by any court or Governmental Authority
charged with the administration thereof, or the compliance with any guideline
or request from any Governmental Authority (whether or not having the force of
law), which has the effect of:
(i) subjecting any Bank to any tax, deduction or
withholding with respect to this Agreement or any other Loan Document (other
than any tax incurred by or based upon the overall net income of any such
Bank), or
(ii) imposing, modifying or deeming applicable any
reserve, special deposit, insurance premium or similar requirement against
assets held by, or deposits in or for the account of, or loans by, any Bank,
with respect to this Agreement or the other Loan Documents, or
(iii) imposing upon any Bank any other condition or
expense with respect to this Agreement or any other Loan Document and the
result of any of the foregoing is to increase the cost to any such Bank,
reduce the income receivable by any such Bank, impose any expense upon any
such Bank or reduce the amount of any payment receivable by any such Bank with
respect to any Note, or with respect to any Bank's commitment hereunder, or
any portion thereof, by an amount which any such Bank deems to be material,
such Bank shall from time to time notify the Agent and Borrower thereof by
delivery of a certificate of an officer of such Bank of the nature described
in the next sentence, and the Borrower shall pay to the Agent for delivery to
such Bank that amount which shall compensate such Bank (on an after tax basis)
for such increase in cost, reduction in income, additional expense, reduced
amount or reduced rate of return. A certificate setting forth in reasonable
detail such increase in cost, reduction in income or additional expense or
reduced amount or reduced rate of return, and the manner of calculating the
same as determined by such Bank, shall be submitted by such Bank to the Agent
and Borrower and, absent manifest error, shall be conclusive as to the amount
thereof (provided that such determination be made reasonably and in good
faith).
(b) If any Bank shall have determined that the
introduction of or any change in any applicable law regarding capital
adequacy, 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 Bank (or any of
its branches) with any request or directive regarding capital adequacy
(whether or not having the force of law) or any such authority, central bank
or comparable agency, has or would have the effect of reducing the rate of
return on such Bank's capital as a consequence of its obligations hereunder,
its commitment hereunder, or the transactions contemplated hereby
to a level below that which such Bank could have achieved but for such
adoption, change or compliance (taking into consideration such Bank's policies
with respect to liquidity and capital adequacy) by an amount deemed by such
Bank to be material, then the Borrower shall pay to the Agent for delivery to
such Bank promptly, such additional amount or amounts determined by such Bank
as will compensate such Bank for such reduced rate of return.
16
(c) Borrower acknowledges that compensation to the Bank
for any increased costs incurred by the Bank and payable by Borrower pursuant
to this subsection may take the form of an increase in the interest rate
payable under the Loan.
3.6.7 Letters of Credit.
(a) Subject to the terms and conditions hereof, Borrower
and any wholly-owned Subsidiary may request the Agent to issue standby letters
of credit for Borrower's account, each of which, upon the issuance thereof,
will constitute a Letter of Credit Advance. Any letter of credit issued
pursuant to the Line of Credit shall have a term, not including renewals, not
exceeding the earlier of one year or the Line of Credit Maturity. The Line of
Credit shall be reduced by the face amount of each letter of credit issued by
Agent hereunder until the earlier of the expiration or termination thereof and
payment by Borrower to Agent of its reimbursement obligation hereunder with
respect thereto. At such time as a draw is made upon a letter of credit
issued hereunder, the amount of such draw will be deemed drawn under the Notes
and immediately will begin to bear interest thereunder. Borrower will pay to
Agent for the Banks a fee of one percent (1%) per annum of the face amount of
any newly issued or renewed letter of credit at the time of issuance or
renewal of such letter of credit. Such fee is nonrefundable and Borrower
shall not be entitled to any rebate of any portion thereof if such letter of
credit does not remain outstanding through its stated expiry date or for any
other reason. Nothing in this Agreement shall be construed to require or
authorize any Bank to issue any letter of credit, it being recognized that
Agent has the sole obligation under this Agreement (subject to the terms and
conditions of this Agreement) to issue letters of credit on behalf of the
Banks. Upon such issuance by Agent, each Bank shall automatically acquire a
pro rata risk participation interest in such Letter of Credit Advance based on
its respective commitment. If Agent shall honor a draft or other demand for
payment presented or made under any letter of credit, Agent shall provide
notice thereof to each Bank on the date such draft or demand is honored unless
Borrower shall have satisfied its reimbursement obligation by payment to Agent
on such date. Each Bank, on such date, shall make its pro rata share of the
amount paid by Agent available in immediately available funds at the principal
office of Agent for the account of Agent. If and to the extent such Bank
shall not have made such pro rata portion available to Agent, such Bank and
the Borrower severally agree to pay to Agent forthwith on demand such amount
together with interest thereon, for each day from the date such amount was
paid by Agent until such amount is so made available to Agent at a per annum
rate equal to the interest rate applicable during such period to the related
Advance disbursed hereunder in respect of the reimbursement obligation of
Borrower. If such Bank shall pay such amount to Agent together with such
interest, such amount so paid shall constitute a Loan by such Bank as part of
the Line of Credit Advance disbursed in respect of the reimbursement
obligation of Borrower. The failure of any Bank to make its pro rata portion
of any such amount paid by Agent available to Agent shall not relieve any
other Bank of its obligation to make available its pro rata portion of such
amount, but no Bank shall be responsible for failure of any other Bank to make
such pro rata portion available to Agent.
17
(b) Borrower assumes all risks of the acts or omissions
of any beneficiary under any letter of credit issued pursuant to this
Agreement with respect to the use by such beneficiary of such letter of
credit. In addition to all undertakings and indemnities of Borrower contained
in the application for any letter of credit or this Agreement, Borrower
acknowledges that neither the Banks, the Agent nor any of their officers or
directors will be liable or responsible for (i) the use which may be made of
any letter of credit or for any acts or omissions of any beneficiary in
connection therewith, (ii) the validity or genuineness of any documents
delivered in connection with any letter of credit, or of any endorsements
thereon, even if such documents should in fact prove to be in any or all
respects invalid, fraudulent or forged, or (iii) any other circumstances
whatsoever in connection with honoring or dishonoring any letter of credit
except, in all cases, the foregoing persons shall not be relieved of liability
in the case of (a) payment under a letter of credit against presentation of a
draft or other document that does not comply with the terms of the letter of
credit or (b) acts constituting the gross negligence or willful misconduct of
any such person. In furtherance and not in limitation of the foregoing, the
Agent may, subject to applicable United States law, accept documents that
appear on their face to be in order, without responsibility for further
investigation regardless of any notice or information to the contrary.
(c) Borrower hereby indemnifies Agent and the Banks and
agrees to keep Agent and the Banks at all times indemnified against all
liabilities (including costs and reasonable attorneys' fees) which Agent and
the Banks may incur or which may be claimed against Agent and the Banks by
any Person by reason of or relating to any matters arising in connection with
any letter of credit or any of the transactions contemplated thereby.
4. REPRESENTATIONS AND WARRANTIES. In order to induce each Bank to enter
into this Agreement and to provide the Loan, Borrower represents and warrants
to each Bank that the following statements are true, correct and complete at
the date hereof and at the date of each Advance:
4.1 Organization, Powers, Good Standing.
4.1.1 (a) Borrower and each Subsidiary is a corporation duly
organized, validly existing and in good standing under the laws of the
respective states of its incorporation, (b) Borrower and each Subsidiary has
full power, authority and legal right to own and operate its property and to
conduct the business in which it is currently engaged, (c) Borrower and each
Subsidiary is duly qualified and is in good standing under the laws of each
jurisdiction in which the failure to so qualify may have a material adverse
affect on its business, and (d) Borrower and each Subsidiary is in compliance
in all material respects with all Requirements of Law, except where the lack
of compliance could not reasonably be expected to materially impact the future
of the Borrower and its Subsidiaries, taken as a whole, or the ability of the
Borrower to repay the Loan or to observe and perform its obligations under the
Loan Documents.
18
4.1.2 Borrower has full power and authority to execute, deliver
and perform the Loan Documents, including, without limitation, to borrow under
this Agreement. Borrower has taken all necessary action to authorize the
execution, delivery and performance of the Loan Documents and Borrower has
taken all necessary action to borrow under this Agreement. No consent or
authorization of, or filing with, any Person (including, without limitation,
any Governmental Authority) is required in connection with the execution,
delivery and performance by Borrower or the validity or enforceability against
Borrower of the Loan Documents.
4.2 Authorization of Borrowing; Etc.
4.2.1 The execution, delivery and performance by Borrower of this
Agreement and the other Loan Documents do not and will not (a) violate any
Requirement of Law applicable to Borrower or any Subsidiary, (b) conflict
with, result in a breach of or constitute (with due notice or lapse of time or
both) a default under any contractual obligation of Borrower or any
Subsidiary, (c) result in or require the creation or imposition of any Lien of
any nature whatsoever upon any of Borrower's or any Subsidiary's properties or
assets, other than in favor of the Banks, or (d) require any approval of any
court or Governmental Authority or any approval or consent of any Person under
any contractual obligation of Borrower.
4.2.2 The Loan Documents and all other documents contemplated
hereby and thereby, when executed and delivered, will be the legally valid and
binding obligations of Borrower, enforceable against it in accordance with
their respective terms, except as enforcement may be limited by equitable
principles or by bankruptcy, insolvency, reorganization, moratorium or similar
laws, usury laws, or equitable principles relating to or limiting creditors'
rights generally.
4.3 Subsidiaries. Schedule 1.1 correctly sets forth as to each
Subsidiary, its name, the jurisdiction of its incorporation, the name of its
immediate parent and the percentage of its capital stock that is directly or
indirectly owned by Borrower. Other than (1) as set forth in its annual
reports as filed with the SEC, (2) Xxxxxx Specialty Steel, Inc., and (3) the
Subsidiaries, Borrower does not own any material amount of capital stock in
any Person.
4.4 Title. Borrower and Subsidiaries, as applicable, have good and
valid legal title to the assets reflected in Borrower's audited consolidated
financial statements dated as of December 25, 1993 previously submitted to
each of the Banks and there are no Liens, charges or encumbrances (other than
Permitted Liens), on such property or assets except those reflected on such
financial statements.
4.5 Litigation; Adverse Facts. Except as set forth on Schedule 4.5 to
this Agreement, there is no action, suit, dispute, investigation, inquiry,
arbitration, tax claim or other proceeding (including, without limitation, the
enactment or promulgation of a statute or rule) at law or in equity or before
or by any arbitrator or Governmental Authority pending or, to the knowledge of
Borrower, threatened, against Borrower or any Subsidiary which might
reasonably be expected to result in any material adverse change in the
business, operations, properties or in the business prospects or condition
(financial or otherwise), of Borrower and its Subsidiaries, taken as a whole,
or would materially adversely affect Borrower's ability to perform its
Obligations hereunder and under any other Loan Document.
19
4.6 Payment of Taxes. All material tax returns and reports required
to be filed by Borrower and each Subsidiary have been prepared in accordance
with acceptable standards and have been timely filed, and all Taxes,
assessments, fees and amounts required to be withheld and paid to a
Governmental Authority, and other governmental charges upon Borrower and each
Subsidiary and upon their properties, assets, income and franchises which are
shown on such returns to be due and payable have been paid when due and
payable. Borrower does not know of any proposed, asserted or assessed tax
deficiency against it or any Subsidiary that would be material to the
condition (financial or otherwise) of Borrower or any Subsidiary (other than
Mining Remedial Recovery Corporation and its subsidiaries). Except for the
tax sharing agreements described in Schedule 4.6 to this Agreement, neither
Borrower nor any Subsidiary is a party to, bound by or obligated under any tax
sharing or similar agreement.
4.7 Materially Adverse Agreements; Performance.
4.7.1 Neither Borrower nor any Subsidiary is a party to or
subject to any material agreement, instrument, charter or other internal
restriction materially adversely affecting the business, properties or assets
of Borrower or any Subsidiary or the operations, business prospects or
condition (financial or otherwise) of Borrower and Subsidiaries, taken as a
whole.
4.7.2 To the best of Borrower's knowledge, neither Borrower nor
any Subsidiary is in material default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in
any of its contractual obligations and no condition exists which, with the
giving of notice or the lapse of time or both, would constitute such a
default.
4.7.3 Borrower and each Subsidiary owns or possesses all patents,
trademarks, service marks, trade names, copyrights, licenses and rights
necessary for the present and planned future conduct of its business, without
any known conflict with the rights of others.
4.8 Disclosure. No representation or warranty of Borrower contained in
this Agreement or in any other Loan Document or other document, certificate or
written statement furnished to the Banks by or on behalf of Borrower with
respect to the business prospects or condition (financial or otherwise) of
Borrower and each Subsidiary for use in connection with the transactions
contemplated by this Agreement, knowingly contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained herein or therein not misleading. There is no fact known
to Borrower which adversely affects the business, operations, property or
assets of Borrower or any Subsidiary or the business prospects, or condition
(financial or otherwise) of Borrower and its Subsidiaries, taken as a whole,
which has not been disclosed herein or in such other documents, certificates
and statements furnished to the Banks for use in connection with the
transactions contemplated hereby.
20
4.9 ERISA Compliance. Borrower and Subsidiaries are in compliance in
all material respects with any applicable provisions of ERISA. Except as set
forth on Schedule 4.9 to this Agreement, to the best of Borrower's knowledge,
neither a Reportable Event nor a Prohibited Transaction has occurred or is
continuing in relation to any pension plan and Borrower and each Subsidiary
have not incurred any liability to the Pension Benefit Guaranty Corporation,
except where the occurrence of such event could not reasonably be expected to
materially impact the future of the Borrower and its Subsidiaries, taken as a
whole, or the ability of the Borrower to repay the Loan or to observe and
perform its obligations under the Loan Documents.
4.10 Environmental Matters. Except as set forth in Schedule 4.10 to
this Agreement, to the best of Borrower's knowledge, Borrower and each
Subsidiary has complied in all respects with all Environmental Protection
Statutes, except where the lack of compliance could not reasonably be expected
to materially impact the future of Borrower and its Subsidiaries, taken as a
whole, or the ability of Borrower to repay the Loan or to observe and perform
its obligations under the Loan Documents. Except as set forth on Schedule
4.10 to this Agreement, to the best of Borrower's knowledge, neither Borrower
nor any Subsidiary nor any other Person has used any real property owned or
leased by Borrower or any Subsidiary in the disposal of or to refine,
generate, produce, store, treat, transfer, release or transport any hazardous
waste or hazardous substance, or been designated by the United States
Environmental Protection Agency or under any Environmental Protection Statute
as a hazardous waste or hazardous substance disposal or removal site,
superfund or clean-up site or candidate for removal or closure pursuant to any
Environmental Protection Statute. No lien arising under or in connection with
any environmental protection statute has attached to any revenues or to any
real or personal property owned by Borrower or any Subsidiary (other than
Mining Remedial Recovery Corporation and its subsidiaries). Borrower agrees
to indemnify and hold each Bank harmless from any and all violations by
Borrower or any Subsidiary of any Environmental Protection Statute.
4.11 Investment Company. Borrower is not directly or indirectly
controlled by, or acting on behalf of, a Person which is an "Investment
Company" within the meaning of the Investment Company Act of 1940, as amended,
that is organized or otherwise created under the laws of the United States,
any State of the United States, the District of Columbia, Puerto Rico, the
Philippine Islands, the Virgin Islands or any other possession of the United
States.
4.12 Regulations U and X. No part of the proceeds of the Loan will be
used to purchase or carry any margin stock (within the meaning of Regulation U
of the Board) or to extend credit to others for the purpose of purchasing or
carrying any margin stock. Neither Borrower nor any Subsidiary is engaged
principally, or as one of its important activities, in the business of
extending credit for the purposes of purchasing or carrying any such margin
stock. If requested by Agent, Borrower will furnish Agent with a statement in
conformity with the requirements of Federal Reserve Form U-1 referred to in
said Regulation. Borrower also warrants that no part of the proceeds of the
borrowings hereunder will be used by it for any purpose which violates, or
which is inconsistent with, the provisions of Regulation X of said Board of
Governors.
4.13 Indebtedness. Neither Borrower nor any Subsidiary has any
outstanding Indebtedness except Indebtedness described in (1) Schedule 4.13 to
this Agreement or (2) Section 6.1 to this Agreement.
21
4.14 Survival. All of the representations and warranties set forth in
this Section 4 will survive until all of the Obligations are satisfied in full
and there remain no outstanding commitments hereunder.
5. AFFIRMATIVE COVENANTS. Borrower covenants and agrees that, until all of
the Obligations are satisfied, Borrower will perform each and all of the
following:
5.1 Use of Proceeds. Borrower will use the proceeds of the Loan only
for the purposes set forth in Section 2.5.
5.2 Accounting Records. Borrower will maintain adequate records in
accordance with sound business practices and GAAP, applied on a Consistent
Basis, except for changes required by GAAP or consented to in writing by Agent
(which consent will not be unreasonably withheld). Upon five (5) days' prior
notice, Borrower will provide, and cause each Subsidiary to provide, access to
representatives of each Bank to visit any of the properties of Borrower or any
Subsidiary and examine the books of account and discuss Borrower's and each
Subsidiary's affairs, finances and accounts with, and be advised of the same
by, Borrower's and each Subsidiary's officers, all at such reasonable times
and as often as any Bank may reasonably request.
5.3 Reports. Borrower will deliver to Agent:
5.3.1 As soon as available and in any event within forty-five
(45) days after the end of each fiscal month of Borrower, management prepared
consolidated and consolidating financial statements of Borrower and
Subsidiaries as of the end of such month, and the consolidated and
consolidating statements of profit and loss and surplus of Borrower and
Subsidiaries from the beginning of Borrower's and Subsidiaries' fiscal year to
the end of such month, certified as correct (subject to year end adjustments)
by the chief financial officer of Borrower.
5.3.2 As soon as available, and in any event within one hundred
twenty (120) days after the end of each fiscal year of Borrower, the complete
audited, consolidated financial statements of Borrower and Subsidiaries,
including the consolidated balance sheet of Borrower and Subsidiaries as of
the end of such year and the consolidated statements of profit and loss and
surplus of Borrower and Subsidiaries for the fiscal year then ended, certified
by Ernst & Young, or such other independent certified public accountants of
recognized standing, to be prepared in accordance with GAAP and to present
fairly the financial position and results of operation of Borrower and
Subsidiaries.
5.3.3 Upon Agent's request, accounts receivable aging reports,
accounts payable aging reports and inventory certifications.
5.3.4 Within forty-five (45) days after the end of each calendar
quarter, a compliance certificate in the form of Exhibit 5.3.4 to this
Agreement, duly completed and executed by the chief financial officer of
Borrower.
5.3.5 Promptly, and in any event within fifteen (15) days of the
filing thereof, certification that Borrower has filed its federal income tax
return.
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5.3.6 Promptly upon Borrower becoming aware of the occurrence of
any: (a) Reportable Event; or (b) Prohibited Transaction in connection with
any pension plan or any trust created thereunder, a written notice specifying
the nature thereof, what action Borrower is taking or proposes to take with
respect thereto, and, when known, any action taken by the Internal Revenue
Service with respect thereto, will be delivered to Agent by Borrower.
5.3.7 Promptly upon becoming aware of any Person's seeking to
obtain or threatening in writing to seek to obtain a decree or order for
relief with respect to Borrower or any wholly-owned Subsidiary in an
involuntary case under any applicable bankruptcy, insolvency, or other similar
law now or hereafter in effect, a written notice thereof specifying what
action Borrower or such Subsidiary is taking or proposes to take with respect
thereto.
5.3.8 Promptly, copies of all amendments to the charter or bylaws
of Borrower or any Brass Subsidiary.
5.3.9 Promptly, and in any event within five (5) days after the
receipt thereof by Borrower or any Subsidiary, a copy of any notice, summons,
citation, directive, letter or other form of communication from any
governmental agency or instrumentality, in any way concerning any action or
omission on the part of Borrower or any Subsidiary in connection with any
Environmental Protection Statute, or concerning the filing of a lien upon,
against or in connection with Borrower or any Subsidiary, or any of their real
or personal property, in connection with any Environmental Protection Statute,
except where such action or omission by Borrower or any Subsidiary could not
reasonably be expected to materially impact the future of the Borrower and its
Subsidiaries, taken as a whole, or the ability of the Borrower to repay the
Loan or to observe and perform its obligations under the Loan Documents.
5.3.10 Promptly after the sending or filing thereof, copies of all
reports, proxy statements and financial statements which Borrower files with
its shareholders or any securities exchange or the SEC, including, without
limitation, all reports on Form 10-K, 10-Q, and 8-K. Such reports need not
include exhibits. Borrower agrees to promptly provide Agent with exhibits
specifically requested by Agent.
5.3.11 Promptly, and in any event within five (5) days of the
receipt thereof by Borrower, a copy of a notice, summons, citation, directive,
letter, complaint, or other form of communication from the U.S. Department of
Labor, or any other Governmental Authority or instrumentality, or any other
Person, in any way concerning any material action or omission on the part of
Borrower or any Subsidiary in connection with the payment of minimum and/or
overtime wages to its employees, or concerning the filing of a lien upon,
against or in connection with Borrower or any Subsidiary, or any of its real
or personal property, in connection with the FLSA.
5.3.12 Promptly, upon Borrower's learning of any litigation or
proceeding in which it or any Subsidiary is a party if an adverse decision in
any such matter is reasonably likely to require it to pay more than One
Million ($1,000,000) Dollars or deliver assets the value of which exceeds such
sum (whether or not the claim is considered to be covered by insurance) or of
the institution of any other suit or proceeding to which Borrower or any
Subsidiary is a party that, by itself or together with any other such matters,
might materially and adversely affect the operations, financial condition,
property, or business prospects of the Borrower and its Subsidiaries, taken as
a whole.
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5.3.13 Promptly, such other information and data with respect to
any Bank.
5.4 Financial Covenants. Borrower will at all times comply with the
following financial covenants:
5.4.1 Borrower will maintain a minimum Tangible Net Worth of One
Hundred Seventy-Five Million ($175,000,000) Dollars, to be adjusted upward at
the end of each fiscal quarter commencing September 24, 1994, by twenty-five
percent (25%) of net income after taxes and before dividends for such quarter.
Once adjusted upward, the Tangible Net Worth requirement set forth herein will
not decrease.
5.4.2 Borrower will maintain the ratio of Borrower's debt
(current liabilities plus long-term liabilities) to Tangible Net Worth equal
to or less than 1.50 to 1.00, on a consolidated basis.
5.4.3 Borrower will maintain a ratio of Current Assets to Current
Liabilities (including, for this purpose, any amounts drawn and outstanding
under the Line of Credit) of at least 1.5 to 1.00, on a consolidated basis.
5.4.4 Borrower will maintain a Debt Service Coverage ratio of at
least 1.25 to 1.00, as measured quarterly on a rolling four-quarter basis and
as reflected in Borrower's audited financial statements.
5.5 Corporate Existence. Except as provided in Section 6.3, Borrower
will at all times preserve and keep in full force and effect its and each
Subsidiary's corporate existence (except for (i) individual Subsidiaries whose
book value is less than $100,000 and (ii) more than one of such Subsidiaries
whose collective book value is not greater than $1,000,000, at the time of the
event affecting such Subsidiary's or Subsidiaries' corporate existence) and
any rights material to its business and will maintain its and each
Subsidiary's right to transact business in each jurisdiction where its assets
or the nature of its activities makes such qualification necessary, except
where the failure could not reasonably be expected to materially impact the
Borrower or such Subsidiary, as the case may be.
5.6 Payment of Taxes and Claims. Borrower will pay all Taxes,
assessments and other governmental charges imposed upon Borrower or any
Subsidiary (other than Mining Remedial Recovery Corporation and its
subsidiaries) before any penalty or interest accrues thereon; provided,
however, that Borrower will not be required to pay any such Taxes,
assessments, or charges if (a) the validity thereof will currently be
contested in good faith by appropriate proceedings, (b) Borrower will have set
aside on its books adequate reserves with respect to such Taxes, assessments,
or charges and (c) Borrower gives notice in writing of such action to Agent;
provided that any such Taxes, assessments, or charges will be paid immediately
upon the commencement of proceedings to foreclose any liens securing the same,
or upon institution of distraint proceedings.
5.7 Insurance. Borrower will maintain and cause each Subsidiary to
maintain, in full force and effect, adequate fire and extended risk coverage,
business interruption, workers' compensation, public liability and such other
insurance coverages as may be required by law and/or in such amounts as is
customary in the case of entities of well-established reputation engaged in
the same or similar business. Borrower will allow representatives of each
Bank to meet with senior management of Borrower and Subsidiary, from time to
time as the Banks reasonably request in order to assess the adequacy of such
insurance policies.
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5.8 Compliance with Laws, etc. Borrower will exercise all due
diligence in order to comply, in all material respects, with all Requirements
of Laws, except where the lack of compliance could not reasonably be expected
to materially impact the future of Borrower and the Subsidiaries, taken as a
whole, or the ability of Borrower to repay the Loan or observe and perform any
of its obligations under the Loan Documents, including, without limitation,
the following:
5.8.1 Borrower will comply with all applicable workers'
compensation laws, regulations and administrative rules, directives or
requirements. Borrower will furnish Agent upon demand evidence in form and
substance as Agent or its counsel may reasonably require in order to verify
such compliance. In the event that Borrower is qualified to self-insure under
such laws, regulations and administrative rules, directives or requirements,
and that Borrower is not otherwise precluded from so self-insuring by the
terms of this Agreement, Borrower will fully comply with all such laws,
regulations, rules, directives and requirements pertaining to its self-insured
status.
5.8.2 Neither Borrower nor any of its pension plans will engage
in any Prohibited Transaction; incur any "accumulated funding deficiency" (as
such term is defined in Section 302 of ERISA) whether or not waived; or
terminate any such pension plan in a manner which could result in the
imposition of a lien on the property of Borrower, pursuant to Section 4068 of
ERISA or any successor provision thereto.
5.8.3 Borrower will comply with FLSA and will furnish Agent upon
demand evidence in form and substance as Agent or its counsel will require to
verify such compliance.
5.8.4 Borrower will comply with all applicable Environmental
Protection Statutes.
5.9 Payment of Indebtedness. Borrower and each of its wholly-owned
Subsidiaries will pay all of its Indebtedness, promptly when due in accordance
with the terms of such Indebtedness, except to the extent that failure to pay
such Indebtedness would not constitute an Event of Default under Section 7.1.4
hereof, and except to the extent a good faith basis exists for delay or non-
payment thereof and Borrower or Subsidiary, as the case may be, is contesting
in good faith any claim for payment thereof.
5.10 Maintenance of Franchises, etc. Borrower and each Brass
Subsidiary will do or cause to be done all things necessary to preserve, renew
and keep in full force and effect the rights, licenses, permits, franchises,
agency agreements, and trade names material to the conduct of its business,
and maintain and operate such businesses properly and efficiently, and in
substantially the manner in which they are presently conducted and operated
(subject to changes in the ordinary course of business).
5.11 Further Assurances. At any time or from time to time, upon the
request of Agent, Borrower will execute and deliver such further documents and
do such other acts and things as Agent may reasonably request in order to
effect fully the purpose of this Agreement, the other Loan Documents and other
agreements contemplated hereby and to provide for payment of and security for
the Loan made hereunder in accordance with the terms of this Agreement.
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6. NEGATIVE COVENANTS. Borrower covenants and agrees that, until all of the
Obligations are satisfied, Borrower will not, without the prior written
consent of the Requisite Banks do any of the following:
6.1 Indebtedness. Except as set forth on Schedule 4.13 to this
Agreement, Borrower will not, and will cause each of its wholly-owned
Subsidiaries not to, create, incur, assume, permit or otherwise become or
remain, directly or indirectly, liable with respect to any Indebtedness except
for (i) the Obligations, (ii) Indebtedness with respect to Permitted Liens,
(iii) Indebtedness of Borrower and its wholly-owned Subsidiaries in an
aggregate amount not to exceed Ten Million ($10,000,000) Dollars and (iv)
consolidating inter-company indebtedness as shown on consolidating financial
statements delivered pursuant to Section 5.3.1 of this Agreement.
6.2 Liens. Borrower will not, and will cause each Subsidiary (other
than Mining Remedial Recovery Corporation and its subsidiaries) not to,
directly or indirectly, create, incur, assume or permit to exist any Lien on
or with respect to any property or asset of any kind of Borrower or any
wholly-owned Subsidiary, whether now owned or hereafter acquired except (i)
Permitted Liens, (ii) liens created by or resulting from any litigation or
legal proceeding which is currently being contested in good faith by
appropriate proceedings, (iii) the Liens incidental to the normal conduct of
the ordinary course of business of the Borrower and the Subsidiaries, (iv)
Liens existing on the Closing Date as set forth on Schedule 6.2 hereof, and
(v) Liens representing the extension, renewal or replacement of a Lien under
immediately preceding clause (iv) in respect of the same property.
6.3 Restriction on Fundamental Changes. Borrower will not, and will
cause each Brass Subsidiary not to fundamentally change the nature of its
business, enter into any merger, consolidation, reorganization or
recapitalization, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell (other than in the ordinary
course of its business), assign, lease, transfer or otherwise dispose of, in
one transaction or a series of transactions, all or any part of its business,
property, assets or securities, whether now owned or hereafter acquired, or
acquire by purchase or otherwise, all or substantially all the business,
property, assets, securities or interest of any Person; provided that (a) a
Brass Subsidiary may merge or consolidate with Borrower, provided that the
Borrower will be the surviving corporation, (b) a Brass Subsidiary may merge
or consolidate with another Brass Subsidiary, (c) a Brass Subsidiary may sell,
lease, transfer or otherwise dispose of any of its assets to Borrower or
another Brass Subsidiary, (d) Borrower may acquire or form additional
subsidiaries; provided that each such newly formed or acquired subsidiary is
wholly-owned by Borrower (unless Borrower has obtained the prior written
consent of Agent to acquire or form a subsidiary which will not be wholly-
owned, which consent will not be unreasonably withheld), and (e) Borrower may
complete the divestiture of its iron assets.
6.4 Environmental Statutes. Borrower will not, and will not permit any
other Person to violate an Environmental Protection Statute, except where such
violation could not reasonably be expected to materially impact the future of
the Borrower and its Subsidiaries, taken as a whole, or the ability of the
Borrower to repay the Loan or to observe and perform its obligations under the
Loan Documents.
26
6.5 Conflicting Agreements. Borrower will not, and will cause each
Subsidiary not to, enter into any agreement containing any material provisions
which would be violated or breached by the performance of its obligations
hereunder or under any instrument or document delivered or to be delivered by
it hereunder or in connection herewith.
6.6 Misrepresentations. Borrower will not, and will cause each
Subsidiary not to, knowingly furnish any Bank any certificate or other
document that will contain any untrue statement of material fact or that will
omit to state a material fact necessary to make it not misleading in light of
the circumstances under which it was furnished.
6.7 Violation of Regulations. Borrower will not make any investment of
any nature which would result in the violation of Regulations G, U, or X of
the Board of Governors of the Federal Reserve System as the same may from time
to time be amended or modified.
6.8 Subsidiary Distribution of Earnings. Borrower will not, and will
cause each Subsidiary not to, enter into any agreement which could prohibit,
or have the effect of prohibiting, the payment of dividends by or other
distribution of the earnings of any Brass Subsidiary to Borrower.
6.9 Scope of Business Activity. Borrower will not engage in any
business or activities other than those representing its present business,
provided that Borrower may acquire or commence new or additional related
businesses which do not materially adversely effect the nature or operation of
Borrower's existing business.
6.10 Dividends and Distributions; Capital Structure. Borrower will not,
and will cause each Subsidiary not to, pay or declare any dividends or other
distributions upon its capital stock (except, in the case of the Subsidiaries,
dividends or other distributions to such Subsidiary's parent corporation), or
purchase or retire, or commit Borrower or any Subsidiary to purchase or
retire, any of its capital stock at any time, during any period that Borrower
is in default under Section 5.4 hereof or if such distribution, purchase or
retirement would render Borrower in default under Section 5.4 hereof.
7. EVENTS OF DEFAULT; ACCELERATION; REMEDIES.
7.1 Events of Default. The occurrence of any one or more of the
following events, acts or occurrences will constitute an event of default (an
"Event of Default") hereunder:
7.1.1 Failure to Make Payments When Due. Borrower will fail to
pay any principal and/or interest owing under any Note when such amount is due
(whether at stated maturity, as a result of a mandatory prepayment
requirement, by acceleration, by notice of prepayment or otherwise), or
Borrower will fail to pay any other amounts (including, without limitation,
fees, costs and expenses) payable under this Agreement when such amounts are
due.
7.1.2 Breach of Representation, Warranty or Certification. Any
representation, warranty or certification made or furnished by Borrower or any
Subsidiary under this Agreement, any other Loan Document or in any statement,
document, letter or other writing or instrument furnished or delivered to any
Bank pursuant to or in connection with this Agreement or other Loan Document
or as an inducement to the Banks to enter into this Agreement, will, at any
time, prove to have been materially false, incorrect or incomplete when made,
effective or reaffirmed, as the case may be.
27
7.1.3 Default Under Loan Documents, etc. Borrower or any
Subsidiary will fail to observe, or perform any term, covenant, condition,
agreement set forth in Sections 5.1, 5.2, 5.4, 5.5, 5.8, 5.9, 5.10, 5.11, 6.1,
6.2, 6.3, 6.5, 6.6, 6.7, 6.8, 6.9 and 6.10.
7.1.4 Default on Other Agreements. Any creditor or
representative of any creditor of Borrower or any wholly-owned Subsidiary
declares or is or becomes entitled to declare any Indebtedness owing on any
bond, debenture, note or other evidence of Indebtedness for borrowed money in
an aggregate amount in excess of One Million ($1,000,000) Dollars of Borrower
or such Subsidiary to be due and payable prior to its expressed maturity by
reason of any default by Borrower or such Subsidiary in the performance or
observance of any obligation or condition (whether or not such creditor or
representative has declared such Indebtedness to be due and payable) or any
such Indebtedness becomes due by its terms and is not promptly paid or
extended; provided, however, that an Event of Default will not occur under
this Agreement if such other default or breach is being contested in good
faith by appropriate proceedings, notice thereof is promptly given to Agent
and adequate reserves in accordance with GAAP have been made therefor and no
other Event of Default has occurred.
7.1.5 Other Defaults Under Loan Documents. Borrower or any
Subsidiary will default in the performance of or compliance with any term or
covenant contained in this Agreement or the other Loan Documents (other than
those referred to above in Sections 7.1.1, 7.1.2 or 7.1.3 of this Agreement),
and such default will continue unremedied for a period of ten (10) days;
provided, that (1) the ten (10) day time period will not start until Agent
provides notice to Borrower in the case of defaults under Sections 5.3.1,
5.3.2, 5.3.3, 5.3.4, 5.3.5, 5.9, 5.10 and 5.11, and (2) no Bank will be
obligated to make an Advance once such a default has occurred until such
default has been remedied to each Bank's satisfaction.
7.1.6 Involuntary Bankruptcy; Appointment of Trustee, etc.
(a) If an involuntary case seeking the liquidation or
reorganization of Borrower or any wholly-owned Subsidiary (other than Mining
Remedial Recovery Corporation and its subsidiaries) under Chapter 7 or Chapter
11, respectively, of the federal Bankruptcy Code or any similar proceeding
will be commenced against Borrower or any wholly-owned Subsidiary (other than
Mining Remedial Recovery Corporation and its subsidiaries) under any other
applicable law and any one or more of the following events occur: (i)
Borrower or such Subsidiary consents to the institution of the involuntary
case, (ii) the petition commencing the involuntary case is not timely
controverted; (iii) the petition commencing the involuntary case is not
dismissed within sixty (60) days of its filing; (iv) an interim trustee is
appointed to take possession of all or a substantial portion of the property
and/or to operate all or any substantial portion of the business of Borrower
or such Subsidiary or (v) an order for relief will have been issued or entered
therein.
28
(b) A decree or order of a court having jurisdiction in
the premises for the appointment of a receiver, liquidator, sequestrator,
custodian, trustee or other officer having similar powers of Borrower or any
wholly-owned Subsidiary (other than Mining Remedial Recovery Corporation and
its subsidiaries) to take possession of all or a substantial portion of the
property and/or to operate all or a substantial portion of the business of
Borrower or such Subsidiary will have been entered and, within sixty (60) days
from the date of entry, is not vacated, discharged or bonded against, or any
similar relief will be granted against Borrower or such Subsidiary under any
applicable federal or state law, and, within sixty (60) days from the date of
entry, is not vacated, discharged or bonded against.
7.1.7 Voluntary Bankruptcy; Appointment of Trustee, etc.
(a) Borrower or any wholly-owned Subsidiary (other than
Mining Remedial Recovery Corporation and its subsidiaries) will (i) institute
a voluntary case seeking liquidation or reorganization under Chapter 7 or
Chapter 11, respectively, of the federal Bankruptcy Code; (ii) file a
petition, answer or complaint or will otherwise institute any similar
proceeding under any other applicable law, or will consent thereto; (iii)
consent to the conversion of a voluntary case to an involuntary case; (iv)
consent to the conversion of an involuntary case to a voluntary case, (v)
consent or acquiesce to the appointment of a trustee, receiver, liquidator,
sequestrator, custodian or other officer with similar powers to take
possession of all or a substantial portion of the property and/or to operate
all or a substantial portion of the business of Borrower or any Subsidiary; or
(vi) make a general assignment for the benefit of creditors.
(b) The Board of Directors of Borrower or any wholly-owned Subsidiary
(other than Mining Remedial Recovery Corporation and its subsidiaries) adopt
any resolution or otherwise authorizes action to approve any of the foregoing;
provided, that nothing herein shall be construed to prevent Arava Natural
Resources Company, Inc., in its capacity as a shareholder of Mining Remedial
Recovery Corporation, from adopting resolutions or authorizing action with
respect to Mining Remedial Recovery Corporation and or its subsidiaries.
7.1.8 Judgments and Attachments.
(a) Borrower or any wholly-owned Subsidiary (other than Mining Remedial
Recovery Corporation and its subsidiaries) will suffer any money judgment(s),
fines or penalties not covered by insurance, writ(s) or warrant(s) of
attachment or similar process(es) involving an amount, in the aggregate, in
excess of One Million ($1,000,000) Dollars and will not satisfy, discharge,
vacate, bond or stay the same within a period of thirty (30) days or, in any
event, within ten (10) days of the date of any proposed sale thereunder.
(b) A judgment creditor will obtain possession of any material portion
of the properties or assets of Borrower or any wholly-owned Subsidiary (other
than Mining Remedial Recovery Corporation and its subsidiaries) by any means,
including, without limitation, levy, distraint, replevin or self-help.
7.1.9 Dissolution. Any order, judgment or decree will be entered
against Borrower or any wholly-owned Subsidiary having assets in excess of
$100,000 (other than Mining Remedial Recovery Corporation and its
subsidiaries) decreeing the dissolution or division of it and such order will
remain undischarged or unstayed for a period in excess of thirty (30) days.
29
7.1.10 Termination of Loan Documents, etc. Any of the Loan
Documents will cease to be in full force and effect for any reason other than
a release or termination thereof upon the full payment and satisfaction of the
Obligations.
7.1.11 Environmental Violations. A breach of Sections 4.10, 5.8.4
or 6.4 will have occurred.
7.2 Remedies; Termination of Commitments. Upon the occurrence of an
Event of Default, all Obligations will, at the option of the Requisite Banks,
immediately be due and payable without presentment, demand, protest, notice or
other requirements of any kind, all of which are hereby expressly waived by
Borrower, and all commitments of the Banks hereunder will terminate, at each
Bank's option, without further action of any kind. Upon acceleration, Agent
may proceed to protect, exercise and enforce the Banks' rights and remedies
hereunder and under the other Loan Documents and any other rights and remedies
as are provided by law or equity. If the Loan is then one which may be repaid
only upon payment of a Yield Maintenance Payment, the Agent may also assess a
Yield Maintenance Payment. Agent may determine, in its sole discretion, the
order and manner in which the Banks' rights and remedies are to be exercised,
and all payments received by Agent will be applied as follows: first, to all
costs and expenses incurred by Agent in collecting any Obligations by reason
of such Event of Default; second, to accrued interest; third, to other
Obligations in such order as Agent may determine in its sole discretion; and
fourth, to Borrower or as otherwise provided by any Requirement of Law.
7.3 Right of Set-Off. In addition to all other remedies available to
the Banks, after any Event of Default which has not been cured within any
applicable period provided in this Section 7, each Bank is hereby authorized
at any time and from time to time, without further notice to Borrower, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time
owing by such Bank to or for the credit or the account of Borrower, against
any and all the obligations of Borrower, now or hereafter existing under any
Loan Document.
8. THE AGENT AND RELATIONS AMONG BANKS, ETC.
8.1 Appointment. Each Bank hereby designates and appoints the Agent
the limited administrative agent for all Banks under this Agreement and the
other Loan Documents. Each Bank hereby irrevocably authorizes Agent on its
behalf to take or refrain from taking any action, and to exercise or refrain
from the exercise of any power, as is required or permitted by the Banks to be
taken under the provisions of this Agreement and the other Loan Documents,
together with such other powers as are reasonably incidental thereto, subject
only to the express limitations of this Agreement. The duties of Agent under
this Agreement and the other Loan Documents are mechanical and administrative
in nature, are limited to those expressly provided herein, and do not
establish a fiduciary relationship as between the Agent and any Bank. In
performing its function and duties under this Agreement and the other Loan
Documents, Agent will act solely as an agent of Banks and assumes no
obligation towards or relationship of agency or trust with Borrower. Agent
may perform any of its duties under this Agreement or another Loan Document by
or through its agents or employees.
30
8.2 Advances and Payments.
8.2.1 Advances: In General. All Advances will be made by Agent
on behalf of the Banks on the requested Advance Date, except that the Ratable
Share of any Bank which the Agent receives after 1:00 p.m. Detroit time on the
Advance Date, or at any time after the Advance Date, will be disbursed on the
Business Day following its receipt. Nothing in this Agreement or any other
Loan Document is to be construed to require Agent to advance funds on behalf
of any Bank or to relieve any Bank from its obligation to make Advances or to
prejudice any rights that Borrower may have against any Bank as a result of
any default by that Bank hereunder.
8.2.2 Advances. In order to minimize transfers between the Agent
and each Bank of funds representing the Bank's Ratable Share of an Advance, a
Borrower payment, or (to the extent that Agent has not been promptly
reimbursed by Borrower) other amounts for which the Agent is entitled to Bank
reimbursement or indemnification, coincidental transfer and loan account
adjustments may be made on a "net" basis. Not later than the Business Day
immediately preceding an Advance Date or a date on which Bank reimbursement of
the Agent is requested, Agent will advise each Bank by telephone, telex or
telecopy as to the purpose and aggregate amount to be disbursed or paid by
Agent and the Advance Date or actual or anticipated payment date, as the case
may be; the amount which is such Bank's Ratable Share thereof; and, if in
order to cause all loan accounts maintained by Agent for such Bank to conform
to its Ratable Share of the Loan, the amount which such Bank is requested to
remit to Agent will be different, the identity of the loan account(s)
requiring adjustment and the nature and amounts due to or from the Bank with
respect thereto. All amounts which a Bank is required to remit to Agent will
be made available to Agent by transfer of same day funds to the designated
wire account of Agent not later than 1:00 p.m. Detroit time on the Advance
Date, as evidenced by a wire transfer number or actual receipt by Agent.
Agent will have no liability to Borrower for the failure of any Bank to make
an Advance on the Advance Date, and if any Advance Date is on a day when any
of the Banks are not open for business, then each Bank shall transfer to Agent
its Ratable Share on the next day such Bank is open for business.
8.2.3 Distribution of Payments. All Loan payments in respect of
Advances, interest, fees or expenses incurred by the Banks and required by
Borrower to be reimbursed will be deemed paid when immediately available U.S.
currency or its equivalent is paid in the amount required by Borrower to
Agent. On the Business Day Agent receives a Borrower payment, Agent will
advise each Bank by telephone, telex, or telecopy of the aggregate amount and
such Bank's Ratable Share of amounts actually received by Agent in respect of
Advances, interest, fees, or, to the extent that the Banks previously have
remitted to Agent therefor, reimbursements for other amounts for which Agent
has required Bank reimbursement or indemnification. Agent will pay to such
Bank on the same Business Day, by transfer to such Bank's wire account (as
specified by such Bank on Exhibit 8.2.3 to this Agreement or as amended by
such Bank from time to time after the date hereof) its Ratable Share, "netted"
as permitted herein, of any such payment received by Agent not later than 1:00
p.m. Detroit time, and otherwise on the next Business Day.
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8.2.4 Return of Payments. Any Agent payment to a Bank under this
Agreement in the belief or expectation that a related payment has been or will
be received by Agent from Borrower, which related payment in fact is not
received by Agent, will entitle Agent to recover such amount from the Bank
without set-off, counterclaim or deduction of any kind. If Agent determines
at any time that an amount received by Agent under this Agreement must be
returned to Borrower or paid to any other Person pursuant to any solvency law
or otherwise, then, notwithstanding any other term or condition of this
Agreement, Agent will not be required to distribute any portion thereof to any
Bank. However, if Agent has previously distributed such amount, each Bank
will repay to Agent on demand any portion of such amount that Agent has
distributed to such Bank, together with interest at such rate, if any, as
Agent is required to pay to Borrower or such other Person, without set-off,
counterclaim or deduction of any kind by the Bank.
8.3 Dissemination of Information. Agent will distribute promptly to
each Bank the executed promissory notes evidencing such Bank's Ratable Share
of the Loan. Agent will have no duty or responsibility, either initially or
on a continuing basis, to provide any Bank with any credit or other
information with respect to Borrower (other than financial information
received by it in accordance herewith and only if not received by the Bank
from Borrower), whether coming into its possession before the date of this
Agreement or at any time or times thereafter. Agent will use its best efforts
after written request therefor by any Bank, and only if not received by such
Bank from Borrower, to distribute promptly to each Bank copies of every
notice, request, communication, report or other information received by Agent
from Borrower pursuant to this Agreement or another Loan Document; provided,
that Agent will be liable to the Banks for any failure to do so only if such
failure is attributable to Agent's gross negligence or willful misconduct,
which will not include the Agent's failure to obtain any of the foregoing from
Borrower.
8.4 Amendments, Consents and Waivers for Certain Actions. Agent is
authorized and empowered on behalf of the Banks to amend or modify in writing
any provision of this Agreement or another Loan Document which relates or
pertains to the Borrower, or to consent to or waive Borrower's performance of
any obligation on any Event of Default, with the prior written consent of the
Requisite Banks. When Agent requests the consent of the Requisite Banks and
does not receive a written denial thereof from any Bank within five (5)
Business Days after such Bank's receipt of such request, then such Bank will
be deemed to have denied such consent. Borrower agrees that it will not
assert any claim of amendment, modification, consent or waiver which is not in
writing, which writing (i) references this Agreement or any of the other Loan
Documents and (ii) is signed by the Requisite Banks.
32
8.5 Exculpation. Agent and its officers, directors, employees and
agents will be liable to any Bank only for the performance of their express
obligations under this Agreement and the other Loan Documents and for their
own gross negligence or willful misconduct in the performance of any action
taken or omitted in connection therewith. If any apportionment or
distribution of payments made by Agent in good faith is subsequently
determined to have been made in error, Agent will not be liable therefor, but
the sole recourse of any Bank to whom payment was due but not made will be to
recover from other Banks any payment in excess of the amount to which they are
determined to be entitled (and such other Banks hereby agree to return to such
Bank any such erroneous payments received by them). In performing its
functions and duties hereunder, Agent will exercise the same care which it
would in dealing with loans for its own account. Agent will not be
responsible to any Bank for the truth or completeness of any recitals,
statements, representations or warranties herein, the execution,
effectiveness, genuineness, validity, enforce- ability, collectability, or
sufficiency of this Agreement or any other Loan Document or the transactions
contemplated thereby, or the financial condition of Borrower. Agent will not
be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this Agreement or
any other Loan Document, the financial condition of Borrower, or the existence
or possible existence of any Event of Default. Agent at any time may request
instructions from the Requisite Banks with respect to any action, inaction,
failure or approval which, by the terms of this Agreement or any other Loan
Document, Agent is permitted or required to take or to grant, and if such
instructions are promptly requested, Agent may refrain from taking any action
or withhold any approval and may refrain from any action or withhold any
approval until it has received such instructions from the Requisite Banks. No
Bank will have any right of action whatsoever against Agent as a result of
Agent acting or refraining from acting in accordance with instructions of the
Requisite Banks.
8.6 Reliance. Agent may rely upon any written notices, statements,
certificates, orders or other documents or any telephone message or other
communication (including any writing, telex, telecopy or telegram) believed by
it in good faith to be genuine and correct and to have been signed, sent or
made by the proper Person, and with respect to all matters pertaining to this
Agreement or any other Loan Document, upon advice of legal counsel as to legal
matters, independent accountants as to audit and accounting matters, and other
experts selected by it, and when doing so will not be liable to any Bank for
any action taken or omitted by Agent in good faith. If any written
confirmation of a telephonic notice or instructions differs from the action
taken by Agent in connection with such telephonic notice of instructions,
Agent's records will govern absent manifest error.
8.7 Credit Decisions. Each Bank acknowledges that, independently of
Agent and each other Bank and based on the financial information received by
it and such other documents, information, and independent investigation of the
financial condition and affairs of Borrower as it has deemed appropriate, it
has made and will continue to make its own appraisal of the creditworthiness
of Borrower and credit decision to participate in the Loan in accordance with
this Agreement. Each Bank also acknowledges that, independently of Agent and
each other Bank, and based on such other documents, information, and
investigations as it deems appropriate at any time, it will continue to make
its own credit decisions as to exercising or not exercising from time to time
any rights and privileges available to it under this Agreement or any other
Loan Document.
33
8.8 Indemnification. Each Bank agrees (which agreement shall survive
any termination of this Agreement) to indemnify Agent according to such Bank's
Ratable Share of the Loan from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, excess Advances or payments of any kind or nature whatsoever which
may at any time be imposed on, incurred by, or asserted against Agent in any
way relating to or arising out of this Agreement or any other Loan Document,
including (without limitation) the reimbursement of Agent for all expenses
(including reasonable attorneys' and paralegals' fees, the allocated expense
of in-house attorneys and paralegals, and all reasonable out-of-pocket
expenses) incurred by Agent under or in connection with this Agreement or any
other Loan Document or in enforcing the Obligations, in all cases as to which
Agent is not reimbursed by Borrower, provided that no Bank will be liable for
the payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses, Advances or payments as
are determined by a court of competent jurisdiction in a final, non-appealable
decision or order to have resulted solely from Agent's gross negligence,
willful misconduct, violation of any relevant statute, law, ordinance, rule or
regulation or violation of this Agreement or any other Loan Document. Agent
will not be required to take any action hereunder or under any other Loan
Document, or to prosecute or defend any action or proceeding in respect of
this Agreement or any other Loan Document, unless it is indemnified, in
accordance with each Bank's Ratable Share of the Loan, to its satisfaction by
the Banks against losses, costs, liabilities, and expenses. If any indemnity
in favor of Agent is impaired, Agent, in its reasonable judgment, may call for
additional indemnity and cease to do the acts indemnified against until such
additional indemnity is given.
8.9 Successor. Agent may resign as such at any time upon at least 30
days' prior notice to Borrower and all Banks, which resignation will be
effective when a successor Agent is in place. If Agent resigns, the Requisite
Banks may appoint another Person as a successor Agent which thereupon will
become the Agent. If no successor to the Agent is appointed by the Requisite
Banks and accepts such appointment within 30 days after the retiring Agent's
notice of resignation, then the retiring Agent may, on behalf of the Banks,
appoint a successor Agent, which will be one of the Banks or a commercial
banking institution organized under the laws of the United States or a United
States branch or agency of a commercial banking institution, and having a
combined capital and surplus of at least $250,000,000. Upon the acceptance by
any successor an appointment as Agent hereunder, such successor Agent will be
entitled to receive from the retiring Agent such documents of transfer and
assignment as such successor Agent may reasonably request, and will thereupon
succeed to, and become vested with all rights, powers, privileges, and duties
of the retiring Agent, and the retiring Agent will be discharged from all
duties and obligations arising under this Agreement and the other Loan
Documents from and after the date on which its resignation is effective.
After any retiring Agent's resignation or removal hereunder as Agent, the
provision of this Agreement and the other Loan Documents will continue to bind
and inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent. If the successor Agent is not one of the Banks, Borrower
shall have right to reasonably approve such successor Agent.
34
8.10 Agent as a Bank. Agent, in its capacity as a Bank, will have the
same rights, powers, duties and liabilities with respect to the Loan as any
other Bank and may exercise the same as if it were not the Agent. Unless
otherwise required by the context, the terms "Bank", "Banks" and "Requisite
Banks" or any similar terms will include the Agent when acting in its
individual capacity. Agent may lend money to, and generally engage in any
kind of banking, trust or other business with Borrower to the same extent as
any other financial institution.
8.11 Borrower Not A Beneficiary. The provisions of this Section 8 are
solely for the benefit of Agent and the Banks and Borrower will have no rights
as a third party beneficiary of any of the provisions hereof; provided,
however, Borrower will be bound by the provisions hereof. Borrower will have
no right against Agent for any claims of Borrower arising from this Agreement,
all such claims being assertable only against the Banks.
9. MISCELLANEOUS.
9.1 Costs and Attorneys' Fees. All fees, costs and expenses incurred
by Agent in connection with the preparation, execution, delivery, performance
and administration of the Loan Documents, any and all amendments, supplements
and modifications thereof and the other instruments and documents to be
delivered hereunder in connection with any matters contemplated by or arising
out of this Agreement, whether (a) to commence, defend any action commenced by
any party other than Borrower, or intervene in any litigation or to file a
petition, complaint, answer, motion or other pleadings, (b) to take any other
action in or with respect to any suit or proceedings (bankruptcy or
otherwise), (c) to consult with officers of Agent or to advise Agent or (d) to
enforce any rights of the Banks to collect any of the Obligations, including,
without limitation, reasonable fees, costs and expenses of Agent's attorneys
and paralegals, the allocated costs of Agent's internal counsel, together with
interest thereon at the highest applicable Default Rate hereunder, will be
part of the Obligations, payable on demand. All of the foregoing amounts may,
at Agent's option, be charged as an Advance under the Loan.
9.2 Waivers, Modifications in Writing. No failure or delay on the part
of Agent or any Bank in exercising any right, power or remedy hereunder will
operate as a waiver thereof, nor will any single or partial exercise of any
such right, power or remedy preclude any other or further exercise thereof or
the exercise of any other right, power or remedy. The remedies provided for
under this Agreement, in the Notes and in the other Loan Documents are
cumulative and are not exclusive of any remedies that may be available to the
Banks at law, in equity or otherwise. No amendment, modification, supplement,
termination, consent or waiver of or to any provision of this Agreement, the
Notes or the other Loan Documents, nor any consent to any departure therefrom,
will in any event be effective unless the same will be in writing and signed
by or on behalf of the Banks and Borrower.
35
9.3 Notices, etc. All notices, demands, instructions and other
communications required or permitted to be given to or made upon any party
hereto will be in writing and (except for financial statements and other
related informational documents to be furnished pursuant hereto which may be
sent by first-class mail, postage prepaid), will be personally delivered or
sent by registered or certified mail, postage prepaid or sent by nationally
recognized overnight delivery service and, if mailed, will be deemed to be
received for purposes of this Agreement three (3) Business Days after mailing
by the sender or one (1) Business Day if sent by overnight delivery service.
Unless otherwise specified in a notice sent or delivered in accordance with
the foregoing provisions of this Section 9.3, notices, demands, instruments
and other communications in writing will be given to or made upon the
respective parties hereto as follows: if to Agent, at Agent's Address, with a
copy to Agent's Counsel; and if to Borrower, at Borrower's Address, with a
copy to Borrower's Counsel.
9.4 Notice of Wrongful Act or Omission by Agent or Banks. No action
will be commenced by Borrower against Agent or any Bank arising out of or
attributable to any act or omission of Agent or any Bank unless a notice
specifically describing the act or omission will have been given to Agent or
such Bank thirty (30) days prior to such judicial action.
9.5 Agent's Failure to Advance. If Agent will be in breach of the
Banks' obligation under this Agreement by reason of failure to make an
Advance, notwithstanding Borrower's conformance with the provisions of hereof,
Borrower's sole remedies on account thereof will be:
(a) to compel Agent to make the Advance which is determined to
have been wrongfully withheld; and
(b) to recover actual and provable damages on account of such
breach, and neither Agent nor any Bank will ever be liable to Borrower for
consequential damages, whatever the nature of the breach by Agent or such Bank
hereunder.
9.6 Headings. Section headings used in this Agreement are for
convenience of reference only and will not constitute a part of this Agreement
for any other purpose or affect the construction of this Agreement.
9.7 Execution in Counterparts. This Agreement may be executed in
counterparts and by different parties on separate counterparts, both of which
counterparts, when so executed and delivered, will be deemed to be an original
and both of which counterparts, taken together, will constitute but one and
the same agreement. This Agreement will become effective upon the execution
of a counterpart hereof by each of the parties hereto.
9.8 Binding Effect; Assignment. This Agreement will be binding upon,
and inure to the benefit of, Borrower and the Banks, and their respective
successors and assigns; provided, however, that Borrower may not assign its
rights hereunder or in connection herewith or any interest herein
(voluntarily, by operation of law or otherwise) without the prior written
consent of the Requisite Banks. This Agreement will not be construed so as to
confer any right or benefit upon any Person other than the parties to this
Agreement and each of their respective successors and assigns.
36
9.9 Severability of Provisions. Any provision of this Agreement which
is illegal, invalid, prohibited or unenforceable in any jurisdiction will, as
to such jurisdiction, be ineffective to the extent of such illegality,
invalidity, prohibition or unenforceability without invalidating or impairing
the remaining provisions hereof or affecting the validity or enforceability of
such provision in any other jurisdiction.
9.10 Changes in Accounting Principles. If any changes in accounting
principles from those used in the preparation of the financial statements
referred to in this Agreement are hereafter occasioned by the promulgation of
rules, regulations, pronouncements or opinions of or required by the FASB or
the American Institute of Certified Public Accountants (or successors thereto
or agencies with similar functions), or there will occur any change in
Borrower's fiscal or tax years and, as a result of any such changes, there
will result in a change in the method of calculating any of the financial
covenants, negative covenants, standards, or other terms or conditions found
in this Agreement, then the parties hereto agree to enter into negotiations in
order to amend such provisions so as to equitably reflect such changes with
the desired result that the criteria for evaluating Borrower's financial
condition will be the same after such changes as if such changes had not been
made.
9.11 Survival of Agreements; Representations, Warranties Indemnities and
Covenants. All agreements, representations, warranties, indemnities and
covenants made herein will survive the execution and delivery of this
Agreement, the making of the Loan hereunder and the execution and delivery of
the Notes.
9.12 Independence of Covenants. All covenants under this Agreement will
each be given independent effect so that if a particular action or condition
is not permitted by any such covenant, the fact that it would be permitted by
another covenant, by an exception thereto, or be otherwise within the
limitations thereof, will not avoid the occurrence of an Event of Default or
Unmatured Event of Default if such action is taken or condition exists.
9.13 Construction of Agreement. Neither this Agreement nor any
uncertainty or ambiguity herein will be construed or resolved against any
Bank, whether under any rule of construction or otherwise. On the contrary,
this Agreement has been reviewed by each of the parties and their counsel and
will be construed and interpreted according to the ordinary meaning of the
words used so as to fairly accomplish the purposes and intentions of all
parties hereto.
9.14 Complete Agreement. This Agreement, together with the exhibits and
schedules to this Agreement, the Notes and the other Loan Documents, and the
other agreements referred to herein or by their terms referring hereto, is
intended by the parties as a final expression of their agreement and is
intended as a complete statement of the terms and conditions of their
agreement.
9.15 Equitable Relief. Borrower recognizes that, in the event Borrower
fails to perform, observe or discharge any of its Obligations under this
Agreement, any remedy at law may prove to be inadequate relief to the Banks;
therefore, Borrower agrees that the Banks will be entitled to temporary and
permanent injunctive relief in any such case without the necessity of proving
actual damages.
37
9.16 No Fiduciary Relationship. No provision herein or in any of the
other Loan Documents and no course of dealing between the parties will be
deemed to create any fiduciary duty by Agent or the Banks to Borrower.
9.17 Choice of Law. The validity of this Agreement, its construction,
interpretation and enforcement and the rights of the parties hereto will be
determined under, governed by and construed in accordance with the internal
laws of the State of Michigan, without regard to principles of conflicts of
law.
9.18 Venue; Jurisdiction. The parties agree that all actions or
proceedings arising in connection with this Agreement, the Loan Documents and
the Loan will be tried and litigated only in the federal courts of the United
States of the Eastern District of Michigan. Borrower hereby irrevocably
accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of such courts. Borrower irrevocably
consents to the service of process out of any such courts in any such action
or proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to Borrower, at its address set forth for notices in
this Agreement, such service to become effective ten (10) days after such
mailing. Nothing herein will affect the right of any Bank to serve process in
any other manner permitted by law or to commence legal proceedings or
otherwise proceed against Borrower in any other jurisdiction. Borrower
irrevocably waives any right it may have to assert the doctrine of forum non
conveniens or to object to venue to the extent any proceeding is brought in
accordance with this Section 9.18.
9.19 Other Waivers. Borrower hereby waives, to the extent permitted by
applicable law, in connection with a "claim and delivery" action by any Bank
or Agent on any Bank's behalf pursuant to Michigan Court Rule 3.105, the right
to request that a court require any Bank to post a bond pursuant to Michigan
Court Rule 3.105(E)(4)(c)(i).
9.20 Waivers Voluntary. The waivers contained in this Agreement are
freely, knowingly and voluntarily given by each party, without any duress or
coercion, after each party has had opportunity to consult with its counsel and
has carefully and completely read all of the terms and provisions of this
Agreement, specifically including the waivers contained in this Section 9.
Neither the Banks nor Borrower will be deemed to have relinquished the waivers
contained herein except by a writing signed by the party to be charged with
having relinquished any such waiver.
9.21 Waiver of Jury Trial. Banks and Borrower acknowledge and agree
that there may be a constitutional right to a jury trial in connection with
any claim, dispute or lawsuit arising between them, but that such right may
be waived. Accordingly, the parties agree that notwithstanding such
constitutional right, in this commercial matter the parties believe and agree
that it will be in their best interest to waive such right, and accordingly,
hereby waive such right to jury trial, and further agree that the best forum
for hearing any claim, dispute or lawsuit, if any, arising in connection with
this Agreement, any Loan Document or the relationship between the Banks and
Borrower, will be a court of competent jurisdiction sitting without a jury.
38
BORROWER ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY COUNSEL OF ITS
CHOICE WITH RESPECT TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
HEREBY, AND BORROWER ACKNOWLEDGES AND AGREES THAT (a) EACH OF THE WAIVERS SET
FORTH HEREIN, WERE KNOWINGLY AND VOLUNTARILY MADE; (b) THE OBLIGATIONS OF THE
BANKS HEREUNDER, INCLUDING THE OBLIGATION TO ADVANCE AND LEND FUNDS TO
BORROWER IN ACCORDANCE HEREWITH, WILL BE STRICTLY CONSTRUED AND WILL BE
EXPRESSLY SUBJECT TO SUCH BORROWER'S COMPLIANCE IN ALL RESPECTS WITH THE TERMS
AND CONDITIONS HEREIN SET FORTH; AND (c) NO REPRESENTATIVE OF ANY BANK HAS
WAIVED OR MODIFIED ANY OF THE PROVISIONS OF THIS AGREEMENT AS OF THE DATE
HEREOF AND NO SUCH WAIVER OR MODIFICATION FOLLOWING THE DATE HEREOF WILL BE
EFFECTIVE UNLESS MADE IN ACCORDANCE WITH SECTION 9.2 HEREOF.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed and delivered as of the date first hereinabove set forth.
"BORROWER"
XXXXXXX INDUSTRIES, INC.
WITNESS:
________________________ By:_____________________
________________________ Its: Executive Vice
President
"BANKS"
MICHIGAN NATIONAL BANK
WITNESS:
________________________ By:_____________________
________________________ Its: Vice President
Ratable Share: 6.25%
Commitment: $1,875,000
BANK IV KANSAS, N.A.
________________________ By:_____________________
________________________ Its:____________________
Ratable Share: 18.75%
Commitment: $5,625,000
FIRST BANK NATIONAL
ASSOCIATION
________________________ By:_____________________
________________________ Its:____________________
Ratable Share: 18.75%
Commitment: $5,625,000
LASALLE NATIONAL BANK
________________________ By:_____________________
________________________ Its:____________________
Ratable Share: 18.75%
Commitment: $5,625,000
NBD BANK, N.A.
________________________ By:_____________________
________________________ Its:____________________
Ratable Share: 18.75%
Commitment: $5,625,000
39
SOCIETY NATIONAL BANK
________________________ By:_____________________
________________________ Its:____________________
Ratable Share: 18.75%
Commitment: $5,625,000
"AGENT"
MICHIGAN NATIONAL BANK
________________________ By:_____________________
________________________ Its:____________________
