1
Exhibit 10.1
EXECUTION
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CREDIT AGREEMENT
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HECLA MINING COMPANY
and CERTAIN SUBSIDIARIES
and
NATIONSBANK OF TEXAS, N.A.
as Agent
and CERTAIN BANKS
as Lenders
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$55,000,000
August 11, 1997
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TABLE OF CONTENTS
Page
CREDIT AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I - Definitions and References . . . . . . . . . . . . . . . . . . 1
Section 1.1. Defined Terms . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Exhibits and Schedules . . . . . . . . . . . . . . . . 13
Section 1.3. Amendment of Defined Instruments . . . . . . . . . . . 13
Section 1.4. References and Titles . . . . . . . . . . . . . . . . . 14
Section 1.5. Calculations and Determinations . . . . . . . . . . . . 14
ARTICLE II - The Loans . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 2.1. Loans . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 2.2. Requests for Loans . . . . . . . . . . . . . . . . . . 15
Section 2.3. Continuations and Conversions of Existing Loans . . . . 16
Section 2.4. Use of Proceeds . . . . . . . . . . . . . . . . . . . . 16
Section 2.5. Fees . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 2.6. Agent's Fees . . . . . . . . . . . . . . . . . . . . . 18
Section 2.7. Optional Prepayments . . . . . . . . . . . . . . . . . 18
Section 2.8. Mandatory Prepayments . . . . . . . . . . . . . . . . . 18
Section 2.9. Payments to Lenders . . . . . . . . . . . . . . . . . . 20
Section 2.10. Increased Cost and Reduced Return . . . . . . . . . . . 21
Section 2.11. Limitation on Types of Loans . . . . . . . . . . . . . 22
Section 2.12. Illegality . . . . . . . . . . . . . . . . . . . . . . 22
Section 2.13. Treatment of Affected Loans . . . . . . . . . . . . . . 22
Section 2.14. Compensation . . . . . . . . . . . . . . . . . . . . . 23
Section 2.15. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE IIA -- Letters of Credit . . . . . . . . . . . . . . . . . . . . . 25
Section 2A.1 Letters of Credit, Xxxx XX . . . . . . . . . . . . . . 25
Section 2A.2 Requesting Letters of Credit . . . . . . . . . . . . . 26
Section 2A.3 Reimbursement . . . . . . . . . . . . . . . . . . . . . 26
Section 2A.4 Transferees of Letters of Credit . . . . . . . . . . . 27
Section 2A.5 Extension of Maturity . . . . . . . . . . . . . . . . . 28
Section 2A.6 Restriction on Liability . . . . . . . . . . . . . . . 28
Section 2A.7 No Duty to Inquire . . . . . . . . . . . . . . . . . . 29
Section 2A.8 Payment of LC Obligations . . . . . . . . . . . . . . . 29
ARTICLE III - Conditions Precedent to Lending . . . . . . . . . . . . . . . 32
Section 3.1. Documents to be Delivered . . . . . . . . . . . . . . . 32
Section 3.2. Additional Conditions Precedent . . . . . . . . . . . . 33
ARTICLE IV - Representations and Warranties . . . . . . . . . . . . . . . . 34
Section 4.1. Borrower's Representations and Warranties . . . . . . . 34
Section 4.2. Representation by Lenders . . . . . . . . . . . . . . . 37
ARTICLE V - Covenants of Borrower . . . . . . . . . . . . . . . . . . . . . 37
Section 5.1. Affirmative Covenants . . . . . . . . . . . . . . . . . 37
Section 5.2. Negative Covenants . . . . . . . . . . . . . . . . . . 42
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ARTICLE VI - Bank Accounts, Etc. . . . . . . . . . . . . . . . . . . . . . 45
Section 6.1. Bank Accounts; Offset . . . . . . . . . . . . . . . . . 45
ARTICLE VIA - Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 6A.1 Guaranty . . . . . . . . . . . . . . . . . . . . . . . 46
Section 6A.2 Unconditional Guaranty . . . . . . . . . . . . . . . . 46
Section 6A.3 Waiver . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 6A.4 No Subrogation . . . . . . . . . . . . . . . . . . . . 49
Section 6A.5. Subordination . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE VII - Events of Default and Remedies . . . . . . . . . . . . . . . 50
Section 7.1. Events of Default . . . . . . . . . . . . . . . . . . . 50
Section 7.2. Remedies . . . . . . . . . . . . . . . . . . . . . . . 52
Section 7.3. INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE VIII - Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 8.1. Appointment, Powers, and Immunities . . . . . . . . . . 53
Section 8.2. Reliance by Agent . . . . . . . . . . . . . . . . . . . 53
Section 8.3. Defaults . . . . . . . . . . . . . . . . . . . . . . . 54
Section 8.4. Rights as Lender . . . . . . . . . . . . . . . . . . . 54
Section 8.5. Indemnification . . . . . . . . . . . . . . . . . . . . 54
Section 8.6. Non-Reliance on Agent and Other Lenders . . . . . . . . 54
Section 8.7. Resignation of Agent . . . . . . . . . . . . . . . . . 55
Section 8.8. Lenders' Credit Decisions . . . . . . . . . . . . . . . 55
Section 8.9. Expenses; Indemnification . . . . . . . . . . . . . . . 55
Section 8.10. Rights as Lender . . . . . . . . . . . . . . . . . . . 56
Section 8.11. Right of Set-off; Adjustments . . . . . . . . . . . . . 56
Section 8.12. Investments . . . . . . . . . . . . . . . . . . . . . . 56
Section 8.13. Benefit of Article VIII . . . . . . . . . . . . . . . . 57
Section 8.14. Agency/Administrative Fee . . . . . . . . . . . . . . . 57
ARTICLE IX - Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 9.1. Waivers and Amendments; Acknowledgements . . . . . . . 57
Section 9.2. Survival of Agreements; Cumulative Nature . . . . . . . 58
Section 9.3. Notices . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 9.4. Joint and Several Liability; Parties in Interest . . . 59
Section 9.5. Governing Law; Submission to Process . . . . . . . . . 59
Section 9.6. Limitation on Interest . . . . . . . . . . . . . . . . 60
Section 9.7. Termination; Limited Survival . . . . . . . . . . . . . 60
Section 9.8. Severability . . . . . . . . . . . . . . . . . . . . . 61
Section 9.9. Confidentiality . . . . . . . . . . . . . . . . . . . . 61
Section 9.10. Counterparts . . . . . . . . . . . . . . . . . . . . . 61
SECTION 9.11. WAIVER OF JURY TRIAL, PUNITIVE DAMAGES, ETC. . . . . 61
Section 9.12. Assignments and Participations . . . . . . . . . . . . 62
Section 9.13. Restatement . . . . . . . . . . . . . . . . . . . . . . 63
Section 9.14. Ratification . . . . . . . . . . . . . . . . . . . . . 63
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SCHEDULES AND EXHIBITS
SCHEDULE 1 DISCLOSURE SCHEDULE
SCHEDULE 2 SUBSIDIARIES
SCHEDULE 3 LENDER'S PERCENTAGE SHARES
SCHEDULE 4 XXXX XX
SCHEDULE 5 SECURITY SCHEDULE
EXHIBIT A PROMISSORY NOTE
EXHIBIT B BORROWING NOTICE
EXHIBIT C CONTINUATION/CONVERSION NOTICE
EXHIBIT D CERTIFICATE ACCOMPANYING FINANCIAL STATEMENTS
EXHIBIT E OPINION OF BORROWER'S COUNSEL
EXHIBIT F STANDBY LETTER OF CREDIT APPLICATION AND AGREEMENT
EXHIBIT G SUBORDINATION AGREEMENT
EXHIBIT H ASSIGNMENT AND ACCEPTANCE
EXHIBIT I SUBSIDIARY GUARANTOR SECURITY AGREEMENT
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT is made as of August 11, 1997, by and among Hecla
Mining Company, a Delaware corporation (herein called "Borrower"), Kentucky-
Tennessee Clay Company, a Delaware corporation, K-T Feldspar Corporation, a
North Carolina corporation, MWCA, Inc., an Idaho corporation (successor by
merger to Colorado Aggregate Company of New Mexico, Inc., a New Mexico
corporation and Mountain West Products, Inc., an Idaho corporation) and
NationsBank of Texas, N.A., a national banking association (herein called
"Agent"), and the Lenders referred to below. In consideration of the mutual
covenants and agreements contained herein the parties hereto agree as follows:
ARTICLE I - DEFINITIONS AND REFERENCES
Section 1.1 DEFINED TERMS. As used in this Agreement, each of the following
terms has the meaning given it in this Section 1.1 or in the sections and
subsections referred to below:
"ADJUSTED CD RATE" means, with respect to each particular CD Loan and the
associated CD Rate and Reserve Requirement, the rate per annum calculated by
Agent (rounded upwards, if necessary, to the next higher 0.01%) determined on a
daily basis pursuant to the following formula:
Adjusted CD Rate =
CD RATE + Assessment Rate + A
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100.0% - Reserve Requirement
where A means the Fixed Rate Spread then in effect. The Adjusted CD Rate for
any CD Loan shall change whenever A changes, but if the Assessment Rate or the
Reserve Requirement changes during the Interest Period for a CD Loan, Agent may,
at its option, either change the Adjusted CD Rate for such CD Loan or leave it
unchanged for the duration of such Interest Period. The Adjusted CD Rate shall
in no event, however, exceed the Highest Lawful Rate.
"ADJUSTED LIBOR RATE" means, with respect to each particular LIBOR Loan and
the associated LIBOR Rate and Reserve Requirement, the rate per annum calculated
by Agent (rounded upwards, if necessary, to the next higher 0.01%) determined on
a daily basis pursuant to the following formula:
Adjusted LIBOR Rate =
LIBOR RATE + B
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100.0% - Reserve Requirement
where B means the Fixed Rate Spread then in effect. The Adjusted LIBOR Rate for
any LIBOR Loan shall change whenever B changes, but if the Reserve Requirement
changes during the Interest Period for a LIBOR Loan, Agent may, at its option,
either change the Adjusted LIBOR Loan or leave it unchanged for the duration of
such Interest Period. The Adjusted LIBOR Rate shall in no event, however,
exceed the Highest Lawful Rate.
"AFFILIATE" means, as to any Person, each other Person that directly or
indirectly (through one or more intermediaries or otherwise) controls, is
controlled by, or is under common control with, such Person. A Person shall be
deemed to be "controlled by" any other Person if such other Person possesses,
directly or indirectly, power
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(a) to vote 20% or more of the securities (on a fully diluted basis)
having ordinary voting power for the election of directors or managing
general partners; or
(b) to direct or cause the direction of the management and policies
of such Person whether by contract or otherwise.
"AGENT" means NationsBank, as Agent hereunder, and its successors in such
capacity.
"APPLICABLE BASE RATE PERCENTAGE" For purposes of the definition of Base
Rate, the term "Applicable Base Rate Percentage" shall be based on the Loan
Balance in effect on such day and calculated pursuant to the table below.
LOAN BALANCE APPLICABLE BASE RATE PERCENTAGE
less than or equal to
twenty-five percent (25%)
of the Maximum Loan Amount one-quarter of one percent (0.25%) per annum
less than or equal to fifty
percent (50%) but greater than
twenty-five percent (25%) of
the Maximum Loan Amount three-eighths of one percent (0.375%) per annum
less than or equal to
seventy-five percent (75%)
but greater than fifty
percent (50%) of the Maximum
Loan Amount one-half of one percent (0.50%) per annum
greater than seventy-five
percent of the Maximum Loan
Amount (75%) three-quarters of one percent (0.75%) per annum
"APPLICABLE LENDING OFFICE" means, for each Lender and for each Type of
Loan, the "Lending Office" of such Lender (or of an affiliate of such Lender)
designated for such Type of Loan on Schedule 3 or such other office of such
Lender (or an affiliate of such Lender) as such Lender may from time to time
specify to Agent and Borrower by written notice in accordance with the terms
hereof as the office by which its Loans of such Type are to be made and
maintained.
"ASSESSMENT RATE" means, on any day, the net annual assessment rate, as
determined by Agent (expressed as a percentage rounded to the next higher
0.01%), which is in effect on such day under the regulations of the Federal
Deposit Insurance Corporation (or any successor) for insuring time deposits made
in dollars at the principal office of Agent in Dallas, Texas. If such net
assessment rate changes after the date hereof, the Assessment Rate shall be
automatically increased or decreased correspondingly, from time to time as of
the effective time of each change in such net assessment rate.
"BASE RATE" means on each day, the Prime Rate in effect on such day plus
the Applicable Base Rate Percentage for such day. If the Prime Rate or the Loan
Balance changes after the date hereof, the Base Rate shall be automatically
increased or decreased, as the case may be, without notice to Borrower from time
to time as of the effective time of each change in the Prime Rate or the Loan
Balance. The Base Rate shall in no event, however, exceed the Highest Lawful
Rate.
"BASE RATE LOAN" means a Loan which does not bear interest at a Fixed Rate.
"BONDS" means the bonds issued under the Indenture.
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"XXXX XX" means that certain letter of credit issued by Issuing Bank
substantially in the form of Schedule 4, which provides for payment of the
Bonds, and any letter of credit issued by Issuing Bank in substitution therefor
in accordance with the terms of this Agreement and the original Xxxx XX.
"XXXX XX CASH COLLATERAL" has the meaning set forth in Section 2A.8(b).
"XXXX XX COLLATERAL ACCOUNT" has the meaning given it in Section 2A.8(b).
"XXXX XX OBLIGATIONS" means all LC Obligations arising with respect to the
Xxxx XX.
"BORROWER" means Hecla Mining Company, a Delaware corporation.
"BORROWING" means any of the following: (i) a borrowing of new Loans of a
single Type pursuant to Section 2.2; (ii) a continuation or conversion of
existing Loans into a single Type (and, in the case of Fixed Rate Loans, with
the same Interest Period) pursuant to Section 2.3; and (iii) a combination of
new Loans and a continuation or conversion of existing Loans in a single Type
(and, in the case of Fixed Rate Loans, with the same Interest Period).
"BORROWING NOTICE" means a request for a Borrowing made by Borrower either
(i) in writing in the form and substance of the "Borrowing Notice" attached
hereto as Exhibit B, duly completed, or (ii) by telephone providing the same
information to Agent.
"BUSINESS DAY" means a day, other than a Saturday or Sunday, on which
commercial banks are open for business with the public in Dallas, Texas. Any
Business Day in any way relating to CD Loans (such as the day on which a CD
Interest Period begins or ends) must also be a day on which, in the judgment of
Agent, significant transactions are carried out in the market for certificates
of deposit. Any Business Day in any way relating to LIBOR Loans (such as the
day on which a LIBOR Interest Period begins or ends) must also be a day on
which, in the judgment of Agent, significant transactions in dollars are carried
out in the interbank eurocurrency market.
"CASH COLLATERAL" means, collectively, the General XX Xxxx Collateral and
the Xxxx XX Cash Collateral.
"CASH EARNINGS" means as of the end of any Fiscal Quarter, Borrower's
Consolidated net income for such Fiscal Quarter, minus nonrecurring gains and
plus nonrecurring losses for such Fiscal Quarter, plus other non cash charges
taken into account in determining such net income, minus any cash dividend that
has been declared, has accrued or has been paid on common or preferred stock
during such Fiscal Quarter (but in no event shall any such dividend be included
more than once for purposes of this definition).
"CD INTEREST PERIOD" means, with respect to each particular CD Loan, a
period of 30, 60, 90 or 180 days, as specified in the Rate Election applicable
thereto, beginning on and including the date specified in such Rate Election
(which must be a Business Day), and ending on but not including the day which is
30, 60 or 90 days thereafter (e.g., a 30-day period beginning on March 1 will
end on but not include March 31), provided that each CD Interest Period which
would otherwise end on a day which is not a Business Day shall end on the next
succeeding Business Day. No CD Interest Period may be elected which would
extend past the date on which the associated Note is due and payable in full.
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"CD LOAN" means any Loan which is properly designated to bear interest at
the Adjusted CD Rate pursuant to Section 2.2 or 2.3.
"CD RATE" means, with respect to each particular CD Loan within a Borrowing
and with respect to the related Interest Period, the rate of interest per annum
determined by Agent in accordance with its customary general practices to be
representative of the bid rates quoted to NationsBank at approximately 9:00 a.m.
Dallas, Texas time on the first day of such Interest Period (by certificate of
deposit dealers of recognized standing selected by NationsBank in accordance
with its customary general practices) for the purchase at face value of a
domestic certificate of deposit issued by NationsBank in an amount equal or
comparable to the amount of NationsBank's CD Loan within such Borrowing and for
a period of time equal or comparable to such Interest Period. The CD Rate
determined by Agent with respect to a particular CD Loan shall be fixed at such
rate for the duration of the associated Interest Period. If Agent is unable so
to determine the CD Rate for any CD Loan, Borrower shall be deemed not to have
elected such CD Loan.
"COLLATERAL" means all property of any kind which is subject to a Lien in
favor of Agent for the benefit of Lenders, or which under the terms of the
Security Documents is purported to be subject to such a Lien and all Cash
Collateral.
"COMMITMENT PERIOD" means the period from and including the date hereof
until and including July 31, 2000 (or, if earlier, the day on which the Notes
first become due and payable in full).
"CONSOLIDATED" refers to the consolidation of any Person, in accordance
with GAAP, with its properly consolidated subsidiaries. References herein to a
Person's Consolidated financial statements, financial position, financial
condition, liabilities, etc. refer to the consolidated financial statements,
financial position, financial condition, liabilities, etc. of such Person and
its properly consolidated subsidiaries.
"CONTINUATION/CONVERSION NOTICE" means a request for a continuation or
conversion of existing Loans made by Borrower pursuant to Section 2.3 either
(i) in writing in the form and substance of the "Continuation/Conversion Notice"
attached hereto as Exhibit C, duly completed, or (ii) by telephone providing the
same information to Agent.
"CONTINUE", "CONTINUATION", and "CONTINUED" shall refer to the continuation
pursuant to Section 2.3 of a Fixed Rate Loan of one Type as a Fixed Rate Loan of
the same Type from one Interest Period to the next Interest Period.
"CONVERT", "CONVERSION", and "CONVERTED" shall refer to a conversion
pursuant to Section 2.3 or Sections 2.10 to 2.15 of one Type of Loan into
another Type of Loan.
"DEBT" means, as to any Person, all indebtedness, liabilities and
obligations of such Person, whether matured or unmatured, liquidated or
unliquidated, primary or secondary, direct or indirect, absolute, fixed or
contingent, and whether or not required to be considered pursuant to GAAP.
"DEFAULT" means any Event of Default and any default, event or condition
which would, with the giving of any requisite notices and the passage of any
requisite periods of time, constitute an Event of Default.
"DISCLOSURE REPORT" means either a notice given by Borrower under Section
5.1(d) or a certificate given by Borrower's chief financial officer under
Section 5.1(b)(ii).
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"DISCLOSURE SCHEDULE" means Schedule 1 hereto.
"EBITDA" means as of the end of any Fiscal Quarter, Borrower's Consolidated
net income for the four consecutive Fiscal Quarters then ended plus interest,
taxes, depreciation and amortization, nonrecurring losses and reclamation
charges, to the extent the foregoing have been deducted in determining such net
income, minus nonrecurring gains to the extent such gains have been included in
determining such net income.
"ELIGIBLE ASSIGNEE" means (i) a Lender; (ii) an Affiliate of a Lender; and
(iii) any other Person approved by Agent and, unless an Event of Default has
occurred and is continuing at the time any assignment is effected in accordance
with Section 9.12; Borrower, such approval not to be unreasonably withheld or
delayed by Borrower and such approval to be deemed given by Borrower if no
objection is received by the assigning Lender and Agent from Borrower within two
Business Days after notice of such proposed assignment has been provided by the
assigning Lender to Borrower; PROVIDED, HOWEVER, that any such Eligible Assignee
shall have capital and surplus in excess of $1,000,000,000 and provided further
that neither Borrower nor an Affiliate of Borrower shall qualify as an Eligible
Assignee.
"ENVIRONMENTAL LAWS" means any and all federal, state, local and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into the
environment including ambient air, surface water, ground water, or land, or
otherwise relating to the manufacture, processing, distribution use, treatment,
storage, disposal, transport, or handling of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, together with all rules and regulations promulgated
with respect thereto.
"ERISA PLAN" means any employee pension benefit plan subject to Title IV of
ERISA maintained by any Related Person or any Affiliate thereof with respect to
which any Related Person has a fixed or contingent liability.
"EVENT OF DEFAULT" has the meaning given it in Section 7.1.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; PROVIDED that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to Agent (in its
individual capacity) on such day on such transactions as determined by Agent.
"FINAL MATURITY DATE" means July 31, 2002.
"FISCAL QUARTER" means a three-month period ending on March 31, June 30,
September 30 or December 31, of any year.
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"FISCAL YEAR" means a twelve-month period ending on December 31, of any
year.
"FIXED CHARGES" means as of the end of any Fiscal Quarter, the sum of the
following for the period of four consecutive Fiscal Quarters then ended (i)
Borrower's Consolidated interest expense for such period, plus (ii) Borrower's
Consolidated long-term debt scheduled to be paid during such period, plus (iii)
Borrower's Consolidated capital lease payments scheduled to be paid during such
period, plus (iv) dividends on common and preferred stock declared, accrued or
paid (without duplication) by Borrower during such period, plus (v) Borrower's
Consolidated reclamation expenditures paid during such period.
"FIXED RATE" means, with respect to any Fixed Rate Loan, the related
Adjusted CD Rate or Adjusted LIBOR Rate.
"FIXED RATE LOAN" means any CD Loan or LIBOR Loan.
"FIXED RATE SPREAD" means on each day, the applicable percentage rate based
on the Loan Balance in effect on such day and calculated pursuant to the
following table:
LOAN BALANCE APPLICABLE PERCENTAGE
less than or equal to twenty-
five percent (25%) of the
Maximum Loan Amount one and seventeen and one-half one-hundredths
of one percent (1.175%) per annum
less than or equal to fifty
percent (50%) but greater than
twenty-five percent (25%) of
the Maximum Loan Amount one and thirty-seven and one-half one-
hundredths of one percent (1.375%) per annum
less than or equal to seventy-
five percent (75%) but greater
than fifty percent (50%) of the
Maximum Loan Amount one and fifty-seven and one-half one-
hundredths of one percent (1.575%) per annum
greater than seventy-five
percent of the Maximum Loan
Amount (75%) one and seventy seven and one-half one-
hundredths of one percent (1.775%) per annum
"FUNDED DEBT" of any Person means Debt in the following categories,
calculated without duplication :
(a) Debt for borrowed money or gold loans (excluding hedging
obligations) or,
(b) Debt evidenced by a bond, debenture, note or similar instrument.
"GAAP" means those generally accepted accounting principles and practices
which are recognized as such by the Financial Accounting Standards Board (or any
generally recognized successor) and which, in the case of Borrower and its
Consolidated subsidiaries, are applied for all periods after the date hereof in
a manner consistent with the manner in which such principles and practices were
applied to the audited Initial Financial Statements. If any change in any
accounting principle or practice is required by the Financial Accounting
Standards Board (or any such successor) in order for such principle or practice
to continue as a generally accepted accounting
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principle or practice, all reports and financial statements required hereunder
with respect to Borrower or with respect to Borrower and its Consolidated
subsidiaries may be prepared in accordance with such change, but all
calculations and determinations to be made hereunder may be made in accordance
with such change only after notice of such change is given to each Lender and
Majority Lenders and Borrower agree to such change insofar as it affects the
accounting of Borrower or of Borrower and its Consolidated subsidiaries.
"GENERAL XX XXXX COLLATERAL' has the meaning given it in Section 2A.8(b).
"GENERAL LC COLLATERAL ACCOUNT" has the meaning given it in Section
2A.8(b).
"GENERAL LC OBLIGATIONS" means all LC Obligations other than Xxxx XX
Obligations.
"GUARANTIES" means, as to any Person, any direct or indirect guaranty by
such Person in respect of, or obligation (contingent or otherwise) to purchase
or otherwise acquire, or to otherwise assure a creditor against loss in respect
of, Debt of any other Person.
"HAZARDOUS MATERIALS" means any substances regulated under any
Environmental Law, whether as pollutants, contaminants, or chemicals, or as
industrial, toxic or hazardous substances or wastes, or otherwise.
"HEDGING OBLIGATIONS" means all of the following:
(i) any and all present or future obligations of one or more of the
Related Persons to any one or more Lenders (or any affiliate of any Lender)
according to the terms of any present or future interest or currency rate
swap, rate cap, rate floor, rate collar, exchange transaction, forward rate
agreement, or other exchange or rate protection agreements or any option
with respect to any such transaction now existing or hereafter entered into
between any of the Related Persons and one or more parties constituting any
Lender (or any affiliate of any Lender); and
(ii) any and all present or future obligations of one or more Related
Persons to any one or more Lenders (or to any affiliate of any Lender)
according to the terms of any present or future swap agreements, cap,
floor, collar, exchange transaction, forward agreement or other exchange or
protection agreements relating to gold or other minerals, or any option
with respect to any such transaction now existing or hereafter entered into
between any of the Related Persons and one or more parties constituting any
Lender (or any affiliate of any Lender).
"HIGHEST LAWFUL RATE" means, with respect to each Lender, the maximum
nonusurious rate of interest that such Lender is permitted under applicable law
to contract for, take, charge, or receive with respect to its Loan. All
determinations herein of the Highest Lawful Rate, or of any interest rate
determined by reference to the Highest Lawful Rate, shall be made separately for
each Lender as appropriate to assure that the Loan Documents are not construed
to obligate any Person to pay interest to any Lender at a rate in excess of the
Highest Lawful Rate applicable to such Lender.
"INDENTURE" means that certain Indenture of Trust dated as of July 1, 1997,
between The Industrial Development Corporation of Xxxxxx County, Idaho and
Norwest Bank of Minnesota, National Association, as Trustee, pursuant to which
the solid waste disposal revenue bonds (Hecla Mining Company Project) series
1997 were issued.
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"INITIAL FINANCIAL STATEMENTS" means (i) the audited annual Consolidated
financial statements of Borrower dated as of December 31, 1996, and (ii) the
unaudited quarterly Consolidated financial statements of Borrower dated as of
March 31, 1997.
"INTEREST PERIOD" means, with respect to any Fixed Rate Loan, the
applicable CD Interest Period or LIBOR Interest Period.
"ISSUING BANK" means NationsBank in its capacity as the issuer of Letters
of Credit hereunder, and its successors in such capacity.
"LATE PAYMENT RATE" means, at the time in question, four percent (4.0%) per
annum plus the Base Rate then in effect. The Late Payment Rate shall in no
event, however, exceed the Highest Lawful Rate.
"LC APPLICATIONS" means any applications for letters of credit heretofore
or hereafter made by Borrower to Issuing Bank.
"LC OBLIGATIONS" means at the time in question, the sum of the Matured LC
Obligations plus the Maximum Drawing Amount.
"LENDERS" means each signatory hereto (other than Borrower and the
Subsidiary Guarantors), including NationsBank in its capacity as a lender
hereunder rather than as Agent, and the successors of each as holder of a Note.
"LETTERS OF CREDIT" means the standby letters of credit issued by Issuing
Bank at the application of Borrower and the Xxxx XX.
"LETTER OF CREDIT SUBLIMIT" means the amount of $15,000,000.
"LIBOR INTEREST PERIOD" means, with respect to any LIBOR Loan, a period of
1, 2, 3 or 6 months, as specified in the Borrowing Notice or
Continuation/Conversion Notice applicable thereto, beginning on and including
the date specified in such Borrowing Notice or Continuation/Conversion Notice
(which must be a Business Day), and ending on but not including the same day of
the month as the day on which it began (e.g., a period beginning on the third
day of one month shall end on but not include the third day of another month),
provided that each LIBOR Interest Period which would otherwise end on a day
which is not a Business Day shall end on the next succeeding Business Day
(unless such next succeeding Business Day is the first Business Day of a
calendar month, in which case such LIBOR Interest Period shall end on the
immediately preceding Business Day). No Interest Period may be elected, which
would extend past the date on which the associated Note is due and payable in
full.
"LIBOR LOAN" means any Loan which is properly designated to bear interest
at the Adjusted LIBOR Rate pursuant to Section 2.2 or 2.3.
"LIBOR RATE" means, for any LIBOR Loan within a Borrowing and with respect
to the related Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any
successor page) as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period. If for
any reason such rate is not available, the term "LIBOR Rate" shall mean, for any
LIBOR Loan within a Borrowing and with respect to
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the related Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as
the London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period; PROVIDED, HOWEVER, if more
than one rate is specified on Reuters Screen LIBO Page, the applicable rate
shall be the arithmetic mean of all such rates (rounded upwards, if necessary,
to the nearest 1/100 of 1%).
"LIEN" means, with respect to any property or assets, any right or interest
therein of a creditor to secure Debt owed to him or any other arrangement with
such creditor which provides for the payment of such Debt out of such property
or assets or which allows him to have such Debt satisfied out of such property
or assets prior to the general creditors of any owner thereof, including any
lien, mortgage, security interest, pledge, deposit, production payment, rights
of a vendor under any title retention or conditional sale agreement or lease
substantially equivalent thereto, tax lien, mechanic's or materialman's lien, or
any other charge or encumbrance for security purposes, whether arising by law or
agreement or otherwise, but excluding any right of offset which arises without
agreement in the ordinary course of business. "Lien" also means any filed
financing statement, any registration of a pledge (such as with an issuer of
uncertificated securities), or any other arrangement or action which would serve
to perfect a Lien described in the preceding sentence, regardless of whether
such financing statement is filed, such registration is made, or such
arrangement or action is undertaken before or after such Lien exists.
"LLC" has the meaning given it in the LLC Pledge Agreement.
"LLC AGREEMENT" has the meaning given to it in the LLC Pledge Agreement.
"LLC PLEDGE AGREEMENT" means the LLC Pledge Agreement dated October 31,
1996 made by Borrower in favor of Agent.
"LOAN" has the meaning given it in Section 2.1.
"LOAN AGREEMENT" means that certain Loan Agreement dated as of July 1,
1997, between Borrower and The Industrial Development Corporation of Xxxxxx
County, Idaho.
"LOAN BALANCE" means during each Quarterly Period, the amount of the
average aggregate unpaid principal balance of the Loans calculated for the
immediately preceding Quarterly Period, as determined by Agent in its sole
discretion. As used in this definition of Loan Balance, "QUARTERLY PERIOD"
means each of the following periods for each calendar year: (i) the period from
and including January 1 until and including March 31, (ii) the period from and
including April 1 until and including July 30, (iii) the period from and
including July 1 until and including September 30, and (iv) the period from and
including October 1 until December 31.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Security Documents,
the LC Applications and all other agreements, certificates, documents,
instruments and writings at any time delivered in connection herewith or
therewith (exclusive of term sheets, commitment letters, correspondence and
similar documents used in the negotiation hereof, except to the extent the same
contain information about Borrower or its Affiliates, properties, business or
prospects).
"MATERIAL SUBSIDIARY" means each Subsidiary of Borrower that is designated
as a "Material Subsidiary" on Schedule 2 attached hereto.
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"MAJORITY LENDERS" means at any time Lenders collectively having Percentage
Shares totalling in the aggregate at least sixty-six and two-thirds percent (66
2/3%).
"MATURED LC OBLIGATIONS" means all amounts paid by Issuing Bank under or
reasonably purported to be under any Letter of Credit or under any LC
Application which have not been repaid to Issuing Bank.
"MAXIMUM DRAWING AMOUNT" means the aggregate amounts which Issuing Bank
might be called upon to advance under all Letters of Credit issued at the
application of Borrower then outstanding.
"MAXIMUM GUARANTEED AMOUNT" means with respect to any Subsidiary Guarantor
as of the date of determination, the lesser of (a) the amount of the Obligations
outstanding on such date and (b) the largest amount that would not render such
Subsidiary Guarantor's guarantee of the Obligations hereunder subject to
avoidance under Section 548 of the United States Bankruptcy Code or any
comparable provisions of any applicable state law.
"MAXIMUM LOAN AMOUNT" means the amount of $55,000,000.
"MAXIMUM TOTAL DEBT TO CASH EARNINGS RATIO" has the meaning given it in
Section 2.8(a).
"NATIONSBANK" means NationsBank of Texas, N.A. and its successors and
assigns.
"NOTE" has the meaning given it in Section 2.1.
"OBLIGATIONS" means (a) all Debt from time to time owing by any of the
Related Persons to Agent or any Lender under or pursuant to any of the Loan
Documents, including without limitation all LC Obligations plus (b) all Hedging
Obligations. "OBLIGATION" means any part of the Obligations.
"PERCENTAGE SHARE" means, with respect to any Lender (a) when used in
Sections 2.1 or 2.3, in any Borrowing Notice or when no Loans are outstanding
hereunder, the percentage set forth opposite such Lender's name on Schedule 3,
and (b) when used otherwise, the percentage obtained by dividing (i) the sum of
the unpaid principal balance of such Lender's Loan at the time in question plus
the Matured LC Obligations which such Lender has funded pursuant to Section
2A.3(b) plus the portion of the Maximum Drawing Amount which such Lender might
be obligated to fund under Section 2A.3(b), divided by (ii) the sum of the
aggregate unpaid principal balance of all Loans at such time plus the aggregate
amount of LC Obligations outstanding at such time.
"PERMITTED DEBT" means (i) if the aggregate outstanding Funded Debt is
equal to or less than $15,000,000, all of such Funded Debt which matures after
the Final Maturity Date and is not subject to terms which are more restrictive
than the terms and conditions set forth in this Agreement, as determined by
Majority Lenders in their sole discretion; and (ii) if the aggregate outstanding
Funded Debt is greater than $15,000,000, all of such Funded Debt which matures
after the Final Maturity Date and is not subject to terms which are more
restrictive than the terms and conditions set forth in this Agreement, as
determined by Majority Lenders in their sole discretion; provided that such
Funded Debt shall not constitute Permitted Debt unless either (A) Majority
Lenders have exercised the Pricing Adjustment Option and the Loan Documents have
been amended to provide for the increase in the Applicable Base Rate Percentage
and the Fixed Rate Spread pursuant thereto or (B) Agent has notified Borrower
that Majority Lenders will not exercise the Pricing Adjustment Option.
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"PERMITTED INVESTMENTS" means investments of up to $5,000,000, plus
investments:
(a) in open market commercial paper, maturing within 270 days after
acquisition thereof, which has the highest or second highest credit rating
given by either Standard & Poor's Corporation or Xxxxx'x Investors Service,
Inc.
(b) in marketable obligations, maturing within 24 months after
acquisition thereof, issued or unconditionally guaranteed by the United
States of America or an instrumentality or agency thereof and entitled to
the full faith and credit of the United States of America.
(c) in demand deposits, and time deposits (including certificates of
deposit) maturing within 24 months from the date of deposit thereof, with
(i) any office of any Lender, (ii) a domestic office of any national or
state bank or trust company which is organized under the laws of the United
States of America or any state therein, which has capital, surplus and
undivided profits of at least $500,000,000, and whose certificates of
deposit have at least the third highest credit rating given by either
Standard & Poor's Corporation or Xxxxx'x Investors Service, Inc. or (iii)
any other bank, provided that the aggregate amount of all such deposits
with all such other banks under this clause (iii) shall not at any time
exceed $5,000,000.
(d) in Subsidiary Guarantors.
(e) consisting of acquisitions of existing businesses which are
engaged in the business activities that are the same or similar to those
engaged in by Borrower and Subsidiary Guarantors.
(f) consisting of acquisitions of assets which are used in businesses
engaged in the business activities that are the same or similar to those
engaged in by Borrower and Subsidiary Guarantors.
"PERSON" means an individual, corporation, partnership, limited liability
company, association, joint stock company, trust or trustee thereof, estate or
executor thereof, unincorporated organization or joint venture, court or
governmental unit or any agency or subdivision thereof, or any other legally
recognizable entity.
"PRICING ADJUSTMENT OPTION" means the right of Majority Lenders, in the
event that Funded Debt ever exceeds $15,000,000, to increase the Applicable Base
Rate Percentage and the Fixed Rate Spread by an amount determined by Majority
Lenders, in their sole discretion, to be necessary to reflect market interest
rates for a borrower with a financial condition similar to Borrower and a credit
facility similar to this Agreement and to require Borrower and Subsidiary
Guarantors to amend the Loan Documents to provide for such increase.
"PRIME RATE" means the per annum rate of interest established from time to
time by NationsBank as its prime rate, which rate may not be the lowest rate of
interest charged by NationsBank to its customers.
"PROHIBITED LIEN" means any Lien not expressly allowed under Section
5.2(b).
"REGULATION D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect.
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"RELATED PERSON" means any of Borrower, each Subsidiary Guarantor and each
other Material Subsidiary of Borrower.
"REQUEST FOR LOAN" means a written or telephonic request, or a written
confirmation, made by Borrower which meets the requirements of Section 2.2.
"RESERVE REQUIREMENT" means, at any time, the maximum rate at which
reserves (including, without limitation, any marginal, special, supplemental, or
emergency reserves) are required to be maintained under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or any
successor) by member banks of the Federal Reserve System against (a) in the case
of LIBOR Loans, "Eurocurrency liabilities" (as such term is used in Regulation
D) or (b) in the case of CD Loans, non-personal Dollar time deposits in an
amount of $100,000 or more. Without limiting the effect of the foregoing, the
Reserve Requirement shall reflect any other reserves required to be maintained
by such member banks with respect to (i) any category of liabilities which
includes deposits by reference to which the Adjusted LIBOR Rate or Adjusted CD
Rate (as the case may be) is to be determined, or (ii) any category of
extensions of credit or other assets which include LIBOR Loans or CD Loans. The
Adjusted LIBOR Rate and the Adjusted CD Rate shall be adjusted automatically on
and as of the effective date of any change in the Reserve Requirement.
"SECURITY DOCUMENTS" means the instruments listed in the Security Schedule
and all other security agreements, deeds of trust, mortgages, chattel mortgages,
pledges, guaranties, financing statements, continuation statements, extension
agreements and other agreements and instruments now, heretofore, or hereafter
delivered by Borrower or any Subsidiary Guarantor to Agent in connection with
this Agreement or any transaction contemplated hereby to secure or guarantee the
payment of any part of the Obligations or the performance of Borrower's or any
Subsidiary Guarantor's other duties and obligations under the Loan Documents.
"SECURITY SCHEDULE" means Schedule 5 attached hereto.
"SUBJECT PROPERTIES" means all of the properties identified in subparagraph
1.1 of Exhibit A of the LLC Agreement.
"SUBORDINATION AGREEMENT" means the Subordination Agreement by and among
Borrower, Agent, and the Surety, substantially in the form of Exhibit G hereto.
"SUBSIDIARY" means, with respect to any Person, any corporation,
association, partnership, joint venture, or other business or corporate entity,
enterprise or organization which is directly or indirectly (through one or more
intermediaries) controlled by or owned fifty percent or more by such Person.
"SUBSIDIARY GUARANTOR" means each of MWCA, Inc. (successor by merger to
Colorado Aggregate Company of New Mexico and Mountain West Products, Inc.),
Kentucky-Tennessee Clay Company, K-T Feldspar Corporation, and any other
Subsidiary who has guaranteed some or all of the Obligations pursuant to Article
VIA.
"SUBSIDIARY GUARANTOR SECURITY AGREEMENT" shall mean the a Security
Agreement of a Subsidiary Guarantor in favor of Agent substantially in the form
of Exhibit I attached hereto.
"SURETY" means, collectively, Van American Insurance Company, United States
Fidelity & Guaranty Company and American International Company.
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"SURETY AGREEMENT" means, collectively, the agreements between Borrower and
the Surety dated ____________________.
"TERMINATION EVENT" means (a) the occurrence with respect to any ERISA Plan
of (i) a reportable event described in Sections 4043(b)(5) or (6) of ERISA or
(ii) any other reportable event described in Section 4043(b) of ERISA other than
a reportable event not subject to the provision for 30-day notice to the Pension
Benefit Guaranty Corporation pursuant to a waiver by such corporation under
Section 4043(a) of ERISA, or (b) the withdrawal of any Related Person or of any
Affiliate of any Related Person from an ERISA Plan during a plan year in which
it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA, or
(c) the filing of a notice of intent to terminate any ERISA Plan or the
treatment of any ERISA Plan amendment as a termination under Section 4041 of
ERISA, or (d) the institution of proceedings to terminate any ERISA Plan by the
Pension Benefit Guaranty Corporation under Section 4042 of ERISA, or (e) any
other event or condition which might constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
ERISA Plan.
"THIRD PARTY FUNDS" has the meaning given it in Section 2A.8.
"TOTAL DEBT" means Borrower's Consolidated Debt in the following
categories, calculated without duplication:
(a) Obligations;
(b) Funded Debt (other than the Obligations);
(c) Debt constituting principal under leases capitalized in
accordance with GAAP;
(d) Debt with respect to letters of credit or applications or
reimbursement agreements therefor (other than the Obligations); and
(e) Debt with respect to any operating, reclamation or other bond not
secured in whole or in part by a letter of credit or cash deposit.
"TOTAL DEBT TO CASH EARNINGS RATIO" means as of the end of any Fiscal
Quarter, the ratio of (i) Borrower's Consolidated Total Debt at the end of such
Fiscal Quarter to (ii) the sum of Borrower's Consolidated Cash Earnings for the
two consecutive Fiscal Quarters then ended plus the projected Cash Earnings for
Borrower and its Consolidated subsidiaries for the immediately succeeding two
Fiscal Quarters as set forth in the cash flow projections delivered to Agent and
approved by Majority Lenders in accordance with Section 2.8(b).
"TYPE" means, with respect to any Loan, the characterization of such Loan
as either a Base Rate Loan or Fixed Rate Loan.
Section 1.2 EXHIBITS AND SCHEDULES. All Exhibits and Schedules attached
to this Agreement are a part hereof for all purposes.
Section 1.3 AMENDMENT OF DEFINED INSTRUMENTS. Unless the context
otherwise requires or unless otherwise provided herein the terms defined in this
Agreement which refer to a particular agreement, instrument or document also
refer to and include all renewals, extensions, modifications, amendments and
restatements of such agreement, instrument or document, provided that
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nothing contained in this section shall be construed to authorize any such
renewal, extension, modification, amendment or restatement.
Section 1.4 REFERENCES AND TITLES. All references in this Agreement to
Exhibits, Schedules, articles, sections, subsections and other subdivisions
refer to the Exhibits, Schedules, articles, sections, subsections and other
subdivisions of this Agreement unless expressly provided otherwise. Titles
appearing at the beginning of any subdivisions are for convenience only and do
not constitute any part of such subdivisions and shall be disregarded in
construing the language contained in such subdivisions. The words "this
Agreement", "this instrument", "herein", "hereof", "hereby", "hereunder" and
words of similar import refer to this Agreement as a whole and not to any
particular subdivision unless expressly so limited. The phrases "this section"
and "this subsection" and similar phrases refer only to the sections or
subsections hereof in which such phrases occur. The word "or" is not exclusive,
and the word "including" (in its various forms) means "including without
limitation". Pronouns in masculine, feminine and neuter genders shall be
construed to include any other gender, and words in the singular form shall be
construed to include the plural and vice versa, unless the context otherwise
requires.
Section 1.5 CALCULATIONS AND DETERMINATIONS. All calculations under the
Loan Documents of fees and of interest shall be made on the basis of actual days
elapsed (including the first day but excluding the last) and a year of 360 days.
Each determination by Agent or a Lender of amounts to be paid under Sections
2.10 through 2.14 or any other matters which are to be determined hereunder by
Agent or a Lender (such as any Adjusted CD Rate, Adjusted LIBOR Rate, Assessment
Rate, CD Rate, LIBOR Rate, Business Day, Interest Period, or Reserve
Requirement) shall, in the absence of manifest error, be conclusive and binding.
Unless otherwise expressly provided herein or unless Majority Lenders otherwise
consent all financial statements and reports furnished to Agent or any Lender
hereunder shall be prepared and all financial computations and determinations
pursuant hereto shall be made in accordance with GAAP, except for financial
projections.
ARTICLE II - THE LOANS
Section 2.1 LOANS. Subject to the terms and conditions hereof, each
Lender agrees to make loans to Borrower (herein called such Lender's "Loans")
upon request from time to time during the Commitment Period so long as (a) all
Lenders are requested to make Loans of the same Type in accordance with their
respective Percentage Shares and as part of the same Loan, and (b) the sum of
(i) the aggregate amount of such Lender's Loans outstanding at any time plus
(ii) the Maximum Drawing Amount for which such Lender is liable by virtue of
Section 2A.3(b), plus (iii) the Matured LC Obligations which have been funded by
such Lender under such section, does not exceed such Lender's Percentage Share
of the Maximum Loan Amount determined as of the date on which the requested Loan
is to be made and (c) the making of such Loan does not cause the Total Debt to
Cash Earnings Ratio for the Fiscal Quarter in which such Loan is made to exceed
the Maximum Total Debt to Cash Earnings Ratio for such Fiscal Quarter
(calculated using Total Debt as of the date of such Loan, and including the
amount of such Loan, and using Cash Earnings as of the end of the most recent
Fiscal Quarter). The aggregate amount of all Loans requested of all Lenders in
any Request for Loan must be greater than or equal to $500,000 or must equal the
unadvanced portion of the Maximum Loan Amount. The obligation of Borrower to
repay to each Lender the aggregate amount of all Loans made by such Lender,
together with interest accruing in connection therewith, shall be evidenced by a
single promissory note (herein called such Lender's "Note") made by Borrower
payable to the order of such Lender in the form of Exhibit A with appropriate
insertions. The amount of principal owing
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on any Lender's Note at any given time shall be the aggregate amount of all
Loans theretofore made by such Lender minus all payments of principal
theretofore received by such Lender on such Note. Interest on each Note shall
accrue and be due and payable as provided herein and therein. Subject to the
terms and conditions hereof, Borrower may borrow, repay, and reborrow hereunder.
Section 2.2 REQUESTS FOR LOANS. Borrower must give to Agent a Borrowing
Notice for any requested Loans (i) by telephone (which telephonic notice shall
be confirmed in writing), or (ii) if Agent so requests, in writing. Each
Borrowing Notice must:
(a) specify (i) the aggregate amount of any such Borrowing of new
Base Rate Loans and the date on which such Base Rate Loans are to be
advanced, or (ii) the aggregate amount of any such Loan of new Fixed Rate
Loans, the date on which such Fixed Rate Loans are to be advanced (which
shall be the first day of the Interest Period which is to apply thereto),
and the length of the applicable Interest Period, or (iii) if such new
Fixed Rate Loans are to be combined with existing Loans in a new Borrowing
the foregoing information with respect to such combined Borrowing; and
(b) be received by Agent not later than 11:00 a.m., Dallas, Texas
time, on (i) the day on which any such Base Rate Loans are to be made, or
(ii) if Fixed Rate Loans are to be made, the third Business Day preceding
the day on which such Fixed Rate Loans are to be made.
Each such telephonic request shall be deemed a representation, warranty,
acknowledgment and agreement by Borrower as to the matters which are required to
be set out in such written confirmation. Notwithstanding the foregoing
provisions of this Section 2.2, each payment of a draft or demand for payment
under a Letter of Credit honored by Issuing Bank shall constitute a Borrowing
Notice in the amount of such payment. Upon receipt of any Borrowing Notice,
Agent shall give each Lender prompt notice of the terms thereof. If all
conditions precedent to the Loans requested in any manner described above have
been met, each Lender will on the date requested promptly remit to Agent at
Agent's office in Dallas, Texas the amount of such Lender's Loan in immediately
available funds, and upon receipt of such funds, unless to its actual knowledge
any conditions precedent to such Loans have been neither met nor waived as
provided herein, Agent shall promptly make the Loans available to Borrower.
Each Borrowing Notice shall be irrevocable and binding on Borrower. Unless
Agent shall have received prompt notice from a Lender that such Lender will not
make available to Agent such Lender's Loan, Agent may in its discretion assume
that such Lender has made such Loan available to Agent in accordance with this
section and Agent may if it chooses, in reliance upon such assumption, make such
Loan available to Borrower. If and to the extent such Lender shall not so make
its Loan available to Agent, such Lender and Borrower severally agree to pay or
repay to Agent within three days after demand the amount of such Loan together
with interest thereon, for each day from the date such amount is made available
to Borrower until the date such amount is paid or repaid to Agent, with interest
at (i) the Federal Funds Rate, if such Lender is making such payment and
(ii) the interest rate applicable at the time to the other Loans made on such
date, if Borrower is making such repayment. If neither such Lender nor Borrower
pay or repay to Agent such amount within such three-day period, Agent shall in
addition to such amount be entitled to recover from such Lender and from
Borrower, on demand, interest thereon at the Late Payment Rate, calculated from
the date such amount was made available to Borrower. The failure of any Lender
to make any Loan to be made by it hereunder shall not relieve any other Lender
of its obligation hereunder, if any, to make its Loan, but no Lender shall be
responsible for the failure of any other Lender to make any Loan to be made by
such other Lender.
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Section 2.3 CONTINUATIONS AND CONVERSIONS OF EXISTING LOANS. Borrower
may make the following elections with respect to Loans already outstanding: to
Convert Base Rate Loans to Fixed Rate Loans, to Convert Fixed Rate Loans to Base
Rate Loans on the last day of the Interest Period applicable thereto, to
continue Fixed Rate Loans beyond the expiration of such Interest Period by
designating a new Interest Period to take effect at the time of such expiration.
In making such elections, Borrower may combine existing Loans made pursuant to
separate Borrowings into one new Borrowing or divide existing Loans made
pursuant to one Borrowing into separate new Borrowings or combine existing Loans
with new Loans. To make any such election, Borrower must give to Agent a
Continuation/Conversion Notice for any such conversion or continuation of
existing Loans, with a separate notice given for each new Borrowing (i) by
telephone (which telephonic notice shall be confirmed in writing by Agent) or
(ii) if Agent so requests, in writing. Each such Continuation/Conversion Notice
must:
(a) specify the existing Loans which are to be Continued or
Converted, and if such existing Loans are to be combined with new Loans,
specify such new Loans;
(b) specify (i) the aggregate amount of any Borrowing of Base Rate
Loans into which such existing Loans are to be continued or converted and
the date on which such Continuation or Conversion is to occur, or (ii) the
aggregate amount of any Borrowing of Fixed Rate Loans into which such
existing Loans are to be continued, converted or combined, the date on
which such Continuation, Conversion or combination is to occur (which shall
be the first day of the Interest Period which is to apply to such Fixed
Rate Loans), and the length of the applicable Interest Period; and
(c) be received by Agent not later than 11:00 a.m., Dallas, Texas
time, on (i) the day on which any such continuation or conversion to Base
Rate Loans is to occur, or (ii) the third Business Day preceding the day on
which any such Continuation or Conversion to Fixed Rate Loans is to occur.
Each telephonic Continuation/Conversion Notice shall be deemed a representation,
warranty, acknowledgment and agreement by Borrower as to the matters which are
required to be set out in the written Continuation/Conversion Notice. Upon
receipt of any Continuation/Conversion Notice, Agent shall give each Lender
prompt notice of the terms thereof. Each Continuation/Conversion Notice shall
be irrevocable and binding on Borrower. During the continuance of any Default,
Borrower may not make any election to convert existing Loans into Fixed Rate
Loans or continue existing Loans as Fixed Rate Loans. If (due to the existence
of a Default or for any other reason) Borrower fails to timely and properly give
any notice of continuation or conversion with respect to a Borrowing of existing
Fixed Rate Loans at least three days prior to the end of the Interest Period
applicable thereto, such Fixed Rate Loans shall automatically be converted into
Base Rate Loans at the end of such Interest Period. No new funds shall be
repaid by Borrower or advanced by any Lender in connection with any continuation
or conversion of existing Loans pursuant to this section, and no such
continuation or conversion shall be deemed to be a new advance of funds for any
purpose; such continuations and conversions merely constitute a change in the
interest rate applicable to already outstanding Loans.
Section 2.4 USE OF PROCEEDS. Borrower shall use all funds from Loans to
finance the development of mineral reserves and other capital expenditures
(including acquisitions) of Borrower and the Subsidiary Guarantors and to
provide working capital for the operations of Borrower and the Subsidiary
Guarantors and for other general business purposes, including but not limited to
extending credit to the Subsidiary Guarantors for such purposes. In no
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event shall the funds from any Loan be used directly or indirectly by any
Persons for personal, family, household or agricultural purposes or for the
purpose, whether immediate, incidental or ultimate, of purchasing, acquiring or
carrying any "margin stock" or any "margin securities" (as such terms are
defined respectively in Regulation U and Regulation G promulgated by the Board
of Governors of the Federal Reserve System) or to extend credit to others
directly or indirectly for the purpose of purchasing or carrying any such margin
stock or margin securities. Borrower represents and warrants that Borrower is
not engaged principally, or as one of Borrower's important activities, in the
business of extending credit to others for the purpose of purchasing or carrying
such margin stock or margin securities.
Section 2.5 FEES.
(a) FACILITY FEES. In consideration of each Lender's commitment to make
Loans, Borrower will pay to Agent for the account of Lenders a nonrefundable
quarterly facility fee for each Fiscal Quarter. The fee for each Fiscal Quarter
shall be equal to the product of (i) the Applicable Fee Percentage (based on the
average daily loan balance for such Fiscal Quarter) multiplied by (ii) the
number of days in such Fiscal Quarter divided by 360 multiplied by (iii) the
Maximum Loan Amount, and shall be due and payable in arrears on the tenth day
after the end of such Fiscal Quarter. For each Fiscal Quarter, the "Applicable
Fee Percentage" shall be determined according to the following table:
AVERAGE DAILY LOAN BALANCE APPLICABLE FEE PERCENTAGE
less than or equal to twenty-five
percent (25%) of the Maximum
Loan Amount thirty-two and one-half one-hundredths of one
percent (0.325%) per annum
less than or equal to fifty percent
(50%) but greater than twenty-five
percent (25%) of the Maximum
Loan Amount thirty-seven and one-half one-hundredths of
one percent (0.375%) per annum
less than or equal to seventy-five
percent (75%) but greater than
fifty percent (50%) of the Maximum
Loan Amount forty-two and one-half one-hundredths of one
percent (.425%) per annum
greater than seventy-five percent
of the Maximum Loan Amount (75%) forty-seven and one-half one-hundredths
of one percent (.475%) per annum
(b) LETTER OF CREDIT FEES. In consideration of the issuance of each
Letter of Credit by Issuing Bank, Borrower agrees to pay:
i. an issuance fee for each Letter of Credit in the amount
calculated by applying one-eighth of one percent (0.125%) per annum of
the face amount of such Letter of Credit for the term thereof, payable
to Issuing Bank for its own account at the time of issuance of such
Letter of Credit;
ii. a letter of credit fee equal to the greater of (A) the amount
calculated by applying the Fixed Rate Spread to the face amount of
such Letter of Credit for the term thereof or (B) $500, in each case
payable to Issuing Bank at the time of issuance of such Letter of
Credit for the account of Lenders in accordance with their Percentage
Shares.
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(c) AMENDMENT FEE. In consideration of Lenders' execution and
delivery of this Agreement, Borrower agrees to pay an amendment fee to
Agent for the account of each Lender in an amount equal to five basis
points (.05%) times such Lender's Percentage Share of the Maximum Loan
Amount.
Section 2.6 AGENT'S FEES. In addition to all other amounts due to Agent
under the Loan Documents, Borrower will pay a non-refundable annual fee in an
amount agreed to by Agent and Borrower. Each such fee shall be payable in
advance, on the date hereof and on each anniversary of the date hereof until
this Agreement shall have been terminated.
Section 2.7 OPTIONAL PREPAYMENTS. Borrower may, upon one Business Day's
notice to each Lender, from time to time and without premium or penalty prepay
the Notes, in whole or in part, so long as the aggregate amounts of all partial
prepayments of principal on the Notes equals $500,000 or any higher integral
multiple of $500,000, and so long as Borrower pays any costs with respect to the
prepayment of any Fixed Rate Loan due under Section 2.13. Each partial
prepayment of principal made after the end of the Commitment Period shall be
applied to the regular installments of principal due under the Notes in the
inverse order of their maturities. Each prepayment of principal under this
section shall be accompanied by all interest then accrued and unpaid on the
principal so prepaid. Any principal or interest prepaid pursuant to this
section shall be in addition to, and not in lieu of, all payments otherwise
required to be paid under the Loan Documents at the time of such prepayment.
Section 2.8 MANDATORY PREPAYMENTS; DETERMINATION OF TOTAL DEBT TO CASH
EARNINGS RATIO.
(a) APPLICABLE CASH EARNINGS RATIO.
i. During the Commitment Period:
(1) if the Total Debt to Cash Earnings Ratio exceeds 3.75 to 1.0
as of the end of any Fiscal Quarter during the period beginning on the
date hereof and ending on or prior to July 31, 1998;
(2) if the Total Debt to Cash Earnings Ratio exceeds 3.5 to 1.0
as of the end of any Fiscal Quarter during the period beginning on
August 1, 1998 and ending on or prior to July 31, 1999; or
(3) if the Total Debt to Cash Earnings Ratio exceeds 3.25 to 1.0
as of the end of any Fiscal Quarter ending after July 31, 1999 (the
maximum Total Debt to Cash Earnings Ratio specified in this Section
2.8(a)(i) and in Section 2.8(a)(ii) for a particular period is herein
called the "MAXIMUM TOTAL DEBT TO CASH EARNINGS RATIO" for such
period);
Then, Borrower shall make a prepayment of the Loan Balance to
Agent for distribution to Lenders in the amount necessary to cause the
Total Debt to Cash Earnings Ratio to be equal to or less than the
Maximum Total Debt to Cash Earnings Ratio for such period (in this
section called a "Required Prepayment Amount"), all in accordance with
the following provisions of this Section 2.8.
ii. After the Commitment Period expires, if the Total Debt to Cash
Earnings Ratio exceeds 3.25 to 1.0 as of the end of any Fiscal Quarter,
then Borrower shall make a prepayment of the Loan Balance to Agent for
distribution to Lenders in the amount necessary to cause the Total Debt to
Cash Earnings Ratio to be equal to or less than 3.25 to
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1.0 (in this section called a "Required Prepayment Amount"), all in
accordance with the following provisions of this Section 2.8.
Before the end of the second calendar month immediately following such
Fiscal Quarter, Borrower shall give written notice to Agent electing to pay
the Required Prepayment Amount to Agent for distribution to Lenders either
(i) on the last day of the next calendar month or (ii) in six (6) equal
consecutive monthly installments due on the last day of each of the next
six calendar months beginning with the month following the month in which
such election is made. (For example, if the Total Debt to Cash Earnings
Ratio as of the end of the Fiscal Quarter ended September 30, 1997 were to
exceed 3.75 to 1.0, Borrower would be required to elect by November 30,
1997 whether to pay the full Required Prepayment Amount on December 31,
1997 or to pay the Required Prepayment Amount in six equal consecutive
monthly installments beginning on December 31, 1997.) If such installment
payments are elected, Borrower shall pay each such installment when due.
Each such prepayment made after the end of the Commitment Period shall be
applied to the regular installments of principal due under the Notes in the
inverse order of their maturities. Each prepayment of principal under this
section shall be accompanied by all interest then accrued and unpaid on the
principal so prepaid, together with any other amounts then due and payable
under Section 2.14. Any principal or interest prepaid pursuant to this
section shall be in addition to, and not in lieu of, all payments otherwise
required to be paid under the Loan Documents at the time of such
prepayment.
(b) Agent and Lenders shall review the cash flow projections and
supporting information delivered pursuant to Section 5.1(b)(iii) (the "BORROWER
PROJECTIONS") and determine whether to approve the Borrower Projections for
purposes of calculating the Total Debt to Cash Earnings Ratio, which approval
shall not be unreasonably withheld. Within seven (7) days after receipt of the
Borrower Projections, each Lender shall notify Agent whether or not it approves
the Borrower Projections (any Lender's failure to so notify the Agent shall be
deemed approval of the Borrower Projections by such Lender) and within ten (10)
days after receipt of the Borrower Projections, Agent shall notify Borrower
whether Majority Lenders have approved the Borrower Projections, and if not
approved (i) the reason for withholding such approval and (ii) the Borrower
Projections, as adjusted by Majority Lenders in their reasonable discretion, as
they deem necessary based on the information concerning Borrower then available
to Majority Lenders (the "ADJUSTED PROJECTIONS"). In the event that Majority
Lenders do not approve the Borrower Projections:
i. the Adjusted Projections shall be used to calculate the Total Debt to
Cash Earnings Ratio for the Fiscal Quarter in question to determine
any Required Prepayment Amount for such Fiscal Quarter as set forth in
Section 2.8(a) above;
ii. Borrower, Agent and Majority Lenders will use their best efforts to
reach agreement as to such projections, and in furtherance thereof,
Lenders agree that upon the request of Borrower, Lenders will consult
with an independent mining consultant regarding such projections,
provided that the fees and expenses of such consultant shall be paid
by Borrower;
iii. If Majority Lenders and Borrower subsequently agree as to cash flow
projections for the Fiscal Quarter in question (the "AGREED
PROJECTIONS"), the Agreed Projections shall be used to recalculate the
Total Debt to Cash Earnings Ratio for such Fiscal Quarter to determine
any Required Prepayment Amount for such Fiscal Quarter as set forth in
Section 2.8(a) above; and
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iv. In the event that (A) the aggregate amount of payments made by
Borrower pursuant to Section 2.8(a) hereof based upon a Required
Prepayment Amount for any Fiscal Quarter determined pursuant to clause
(1) above, exceeds (B) the Required Prepayment Amount for such Fiscal
Quarter as redetermined pursuant to clause (3) above, Lenders shall
promptly refund such excess to Borrower.
In the event that cash flow projections are not delivered to Agent as required
under Section 5.1(b)(iii) for any Fiscal Quarter, Majority Lenders shall
themselves make such a cash flow projection for the relevant period based on the
information concerning Borrower then available to Majority Lenders, which shall
be used in calculating the Total Debt to Cash Earnings Ratio; provided that any
such determination by Majority Lenders shall not constitute any waiver of any
Default or Event of Default arising out of such failure to deliver such
projections.
Section 2.9 PAYMENTS TO LENDERS. Borrower will make each payment which
it owes under the Loan Documents to Agent for the account of the Lender to whom
such payment is owed. Each such payment must be received by Agent not later
than 11:00 a.m., Dallas, Texas time, on the date such payment becomes due and
payable, in lawful money of the United States of America, without set-off,
deduction or counterclaim, and in immediately available funds. Any payment
received by Agent after such time will be deemed to have been made on the next
following Business Day. Should any such payment (other than a payment of
interest on a Fixed Rate Loan which is addressed in the definition of "LIBOR
Interest Period") become due and payable on a day other than a Business Day, the
maturity of such payment shall be extended to the next succeeding Business Day,
and, in the case of a payment of principal or past due interest, interest shall
accrue and be payable thereon for the period of such extension as provided in
the Loan Document under which such payment is due. Each payment under a Loan
Document shall be due and payable at the place provided therein and, if no
specific place of payment is provided, shall be due and payable at the place of
payment of Agent's Note. When Agent collects or receives money on account of
the Obligations, Agent shall distribute all money so collected or received, and
Lenders shall apply all such money they receive from Agent, as follows:
(a) first, for the payment of all Obligations (other than
Hedging Obligations) which are then due (and if such money is
insufficient to pay all such Obligations, first to any reimbursements
due Agent under Section 5.1(i) or (j) and then to the partial payment
of all other Obligations then due in proportion to the amounts
thereof, or as Lenders shall otherwise agree);
(b) then for the prepayment of amounts owing under the Loan
Documents (other than principal on the Notes) if so specified by
Borrower;
(c) then for the prepayment of principal on the Notes, together
with accrued and unpaid interest on the principal so prepaid;
(d) then for the payment or prepayment of any other Obligations
(other than Hedging Obligations); and
(e) last, for the pro rata payment of any Hedging Obligations of
Borrower to Lenders or other indebtedness secured by the Security
Documents.
All payments applied to principal or interest on any Note shall be applied first
to any interest then due and payable, then to principal then due and
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payable, and last to any prepayment of principal and interest in compliance with
Section 2.7. All distributions of amounts described in any of subsections (b),
(c), (d) or (e) above shall be made by Agent pro rata to Agent and each Lender
then owed Obligations described in such subsection in proportion to all amounts
owed to Agent and all Lenders which are described in such subsection.
Section 2.10 INCREASED COST AND REDUCED RETURN.
(a) If, after the date hereof, the adoption of any applicable law, rule,
or regulation, or any change in any applicable law, rule, or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank, or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such governmental authority, central bank, or comparable agency:
i. shall subject such Lender (or its Applicable Lending Office) to
any tax, duty, or other charge with respect to any Fixed Rate Loans, its
Notes, or its obligation to make Fixed Rate Loans, or change the basis of
taxation of any amounts payable to such Lender (or its Applicable Lending
Office) under this Agreement or its Notes in respect of any Fixed Rate
Loans (other than taxes imposed on the overall net income of such Lender by
the jurisdiction in which such Lender has its principal office or such
Applicable Lending Office);
ii. shall impose, modify, or deem applicable any reserve, special
deposit, assessment, or similar requirement (other than the Reserve
Requirement utilized in the determination of the Fixed Rate) relating to
any extensions of credit or other assets of, or any deposits with or other
liabilities or commitments of, such Lender (or its Applicable Lending
Office), including the Commitment of such Lender hereunder; or
iii. shall impose on such Lender (or its Applicable Lending Office) or
the London interbank market any other condition affecting this Agreement or
its Notes or any of such extensions of credit or liabilities or
commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, Converting into, Continuing, or
maintaining any Fixed Rate Loans or to reduce any sum received or receivable by
such Lender (or its Applicable Lending Office) under this Agreement or its Notes
with respect to any Fixed Rate Loans, then Borrower shall pay to such Lender on
demand such amount or amounts as will compensate such Lender for such increased
cost or reduction. If any Lender requests compensation by Borrower under this
Section 2.10(a), Borrower may, by notice to such Lender (with a copy to Agent),
suspend the obligation of such Lender to make or Continue Loans of the Type with
respect to which such compensation is requested, or to Convert Loans of any
other Type into Loans of such Type, until the event or condition giving rise to
such request ceases to be in effect (in which case the provisions of Section
2.13 shall be applicable); PROVIDED that such suspension shall not affect the
right of such Lender to receive the compensation so requested.
(b) If, after the date hereof, any Lender shall have determined that the
adoption of any applicable law, rule, or regulation regarding capital adequacy
or any change therein or in the interpretation or administration thereof by any
governmental authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or any request or directive regarding
capital adequacy (whether or not having the force of law) of any such
governmental authority, central bank, or comparable agency, has or would have
the effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of such
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Lender's obligations hereunder to a level below that which such Lender or such
corporation could have achieved but for such adoption, change, request, or
directive (taking into consideration its policies with respect to capital
adequacy), then from time to time upon demand Borrower shall pay to such Lender
such additional amount or amounts as will compensate such Lender for such
reduction.
(c) Each Lender shall promptly notify Borrower and Agent of any event of
which it has knowledge, occurring after the date hereof, which will entitle such
Lender to compensation pursuant to this Section 2.10(c) and will designate a
different Applicable Lending Office if such designation will avoid the need for,
or reduce the amount of, such compensation and will not, in the judgment of such
Lender, be otherwise disadvantageous to it. Any Lender claiming compensation
under this Section 2.10(c) shall furnish to Borrower and Agent a statement
setting forth the additional amount or amounts to be paid to it hereunder which
shall be conclusive in the absence of manifest error. In determining such
amount, such Lender may use any reasonable averaging and attribution methods.
Section 2.11 LIMITATION ON TYPES OF LOANS. If on or prior to the first
day of any Interest Period for any Fixed Rate Loan:
(a) Agent determines (which determination shall be conclusive) that by
reason of circumstances affecting the relevant market, adequate and reasonable
means do not exist for ascertaining the Fixed Rate for such Interest Period; or
(b) the Majority Lenders determine (which determination shall be
conclusive) and notify Agent that the Fixed Rate will not adequately and fairly
reflect the cost to Lenders of funding Fixed Rate Loans for such Interest
Period;
then Agent shall give Borrower prompt notice thereof specifying the relevant
Type of Loans and the relevant amounts or periods, and so long as such condition
remains in effect, Lenders shall be under no obligation to make additional Loans
of such Type, Continue Loans of such Type, or to Convert Loans of any other Type
into Loans of such Type and Borrower shall, on the last day(s) of the then
current Interest Period(s) for the outstanding Loans of the affected Type,
either prepay such Loans or Convert such Loans into another Type of Loan in
accordance with the terms of this Agreement.
Section 2.12 ILLEGALITY. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to make, maintain, or fund Fixed Rate Loans hereunder,
then such Lender shall promptly notify Borrower thereof and such Lender's
obligation to make or Continue Fixed Rate Loans and to Convert other Types of
Loans into Fixed Rate Loans shall be suspended until such time as such Lender
may again make, maintain, and fund Fixed Rate Loans (in which case the
provisions of Section 2.13 shall be applicable).
Section 2.13 TREATMENT OF AFFECTED LOANS. If the obligation of any
Lender to make a particular Type of Fixed Rate Loan or to Continue, or to
Convert Loans of any other Type into, Loans of a particular Type shall be
suspended pursuant to Section 2.10 or 2.12 hereof (Loans of such Type being
herein called "AFFECTED LOANS" and such Type being herein called the "AFFECTED
TYPE"), such Lender's Affected Loans shall be automatically Converted into Base
Rate Loans on the last day(s) of the then current Interest Period(s) for
Affected Loans (or, in the case of a Conversion required by Section 2.12 hereof,
on such earlier date as such Lender may specify to Borrower with a copy to
Agent) and, unless and until such Lender gives notice as provided below that the
circumstances specified in Section 2.10 or 2.12 hereof that gave rise to such
Conversion no longer exist:
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(a) to the extent that such Lender's Affected Loans have been so
Converted, all payments and prepayments of principal that would otherwise be
applied to such Lender's Affected Loans shall be applied instead to its Base
Rate Loans; and
(b) all Loans that would otherwise be made or Continued by such Lender as
Loans of the Affected Type shall be made or Continued instead as Base Rate
Loans, and all Loans of such Lender that would otherwise be Converted into Loans
of the Affected Type shall be Converted instead into (or shall remain as) Base
Rate Loans.
If such Lender gives notice to Borrower (with a copy to Agent) that the
circumstances specified in Section 2.10 or 2.12 hereof that gave rise to the
Conversion of such Lender's Affected Loans pursuant to this Section 2.13 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Loans of the Affected Type made by other
Lenders are outstanding, such Lender's Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Loans of the Affected Type, to the extent necessary so that,
after giving effect thereto, all Loans held by Lenders holding Loans of the
Affected Type and by such Lender are held pro rata (as to principal amounts,
Types, and Interest Periods) in accordance with their respective Commitments.
Section 2.14 COMPENSATION. Upon the request of any Lender, Borrower
shall pay to such Lender such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any loss, cost, or
expense (including loss of anticipated profits) incurred by it as a result of:
(a) any payment, prepayment, or Conversion of a Fixed Rate Loan for any
reason (including, without limitation, the acceleration of the Loans pursuant to
Section 8.1) on a date other than the last day of the Interest Period for such
Loan; or
(b) any failure by Borrower for any reason (including, without limitation,
the failure of any condition precedent specified in Article IV to be satisfied)
to borrow, Convert, Continue, or prepay a Fixed Rate Loan on the date for such
borrowing, Conversion, Continuation, or prepayment specified in the relevant
notice of borrowing, prepayment, Continuation, or Conversion under this
Agreement.
Section 2.15 TAXES.
(a) Any and all payments by Borrower to or for the account of any Lender or
Agent hereunder or under any other Loan Document shall be made free and clear of
and without deduction for any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, EXCLUDING, in the case of each Lender and Agent, taxes imposed on its
income, and franchise taxes imposed on it, by the jurisdiction under the laws of
which such Lender (or its Applicable Lending Office) or Agent (as the case may
be) is organized or any political subdivision thereof (all such non-excluded
taxes, duties, levies, imposts, deductions, charges, withholdings, and
liabilities being hereinafter referred to as "TAXES"). If Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable under
this Agreement or any other Loan Document to any Lender or Agent, (i) the sum
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.15) such Lender or Agent receives an amount equal to the sum it
would have received had no such deductions been made, (ii) Borrower shall make
such deductions, and (iii) Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law.
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(b) In addition, Borrower agrees to pay any and all present or future
stamp or documentary taxes and any other excise or property taxes or charges or
similar levies which arise from any payment made under this Agreement or any
other Loan Document or from the execution or delivery of, or otherwise with
respect to, this Agreement or any other Loan Document (hereinafter referred to
as "OTHER TAXES").
(c) Borrower agrees to indemnify each Lender and Agent for the full amount
of Taxes and Other Taxes (including, without limitation, any Taxes or Other
Taxes imposed or asserted by any jurisdiction on amounts payable under this
Section 2.15) paid by such Lender or Agent (as the case may be) and any
liability (including penalties, interest, and expenses) arising therefrom or
with respect thereto.
(d) Each Lender organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Lender listed on the signature pages hereof and on
or prior to the date on which it becomes a Lender in the case of each other
Lender, and from time to time thereafter if requested in writing by Borrower or
Agent (but only so long as such Lender remains lawfully able to do so), shall
provide Borrower and Agent with (i) Internal Revenue Service Form 1001 or 4224,
as appropriate, or any successor form prescribed by the Internal Revenue
Service, certifying that such Lender is entitled to benefits under an income tax
treaty to which the United States is a party which reduces the rate of
withholding tax on payments of interest or certifying that the income receivable
pursuant to this Agreement is effectively connected with the conduct of a trade
or business in the United States, (ii) Internal Revenue Service Form W-8 or W-9,
as appropriate, or any successor form prescribed by the Internal Revenue
Service, and (iii) any other form or certificate required by any taxing
authority (including any certificate required by Sections 871(h) and 881(c) of
the Internal Revenue Code), certifying that such Lender is entitled to an
exemption from or a reduced rate of tax on payments pursuant to this Agreement
or any of the other Loan Documents.
(e) For any period with respect to which a Lender has failed to provide
Borrower and Agent with the appropriate form pursuant to Section 2.15(d) (unless
such failure is due to a change in treaty, law, or regulation occurring
subsequent to the date on which a form originally was required to be provided),
such Lender shall not be entitled to indemnification under Section 2.15(a) or
2.15(b) with respect to Taxes imposed by the United States; PROVIDED, HOWEVER,
that should a Lender, which is otherwise exempt from or subject to a reduced
rate of withholding tax, become subject to Taxes because of its failure to
deliver a form required hereunder, Borrower shall take such steps as such Lender
shall reasonably request to assist such Lender to recover such Taxes.
(f) If Borrower is required to pay additional amounts to or for the
account of any Lender pursuant to this Section 2.15, then such Lender will agree
to use reasonable efforts to change the jurisdiction of its Applicable Lending
Office so as to eliminate or reduce any such additional payment which may
thereafter accrue if such change, in the judgment of such Lender, is not
otherwise disadvantageous to such Lender and in the event Lender is reimbursed
for an amount paid by Borrower pursuant to this Section 2.15, it shall promptly
return such amount to Borrower.
(g) Within thirty (30) days after the date of any payment of Taxes,
Borrower shall furnish to Agent the original or a certified copy of a receipt
evidencing such payment.
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(h) Without prejudice to the survival of any other agreement of Borrower
hereunder, the agreements and obligations of Borrower contained in this Section
2.15 shall survive the termination of the Commitments and the payment in full of
the Notes.
ARTICLE IIA -- Letters of Credit
Section 2A.1 LETTERS OF CREDIT, XXXX XX.
(a) TERMS APPLICABLE TO ALL LETTERS OF CREDIT INCLUDING XXXX XX.
Subject to the terms and conditions hereof, Issuing Bank agrees to issue
from time to time during the Commitment Period, in reliance on the
agreements of Lenders set forth in Section 2A.3(b), at Borrower's
application, such Letters of Credit as Borrower may from time to time
request, so long as:
i. the sum of (1) the aggregate amount of LC Obligations at such
time, plus (2) the amount of such Letter of Credit, does not exceed
the Letter of Credit Sublimit;
ii. the sum of (1) the aggregate amount of Loans outstanding at
the time such Letter of Credit is issued plus (2) the aggregate amount
of LC Obligations at such time, plus (3) the amount of such Letter of
Credit, does not exceed the Maximum Loan Amount;
iii. the form and terms of such Letter of Credit are
satisfactory to Issuing Bank in its sole and absolute discretion;
iv. the expiration date of such Letter of Credit is on or before
the Business Day immediately preceding the last day of the Commitment
Period, unless otherwise agreed to by Majority Lenders; and
v. the issuance of such Letter of Credit shall not cause the
Total Debt to Cash Earnings Ratio for the Fiscal Quarter in which such
Loan is made to exceed the Maximum Total Debt to Cash Earnings Ratio
for such Fiscal Quarter (calculated using Total Debt as of the date of
issuance of such Letter of Credit, and including the amount of such
Letter of Credit, and using Cash Earnings as of the end of the most
recent Fiscal Quarter).
(b) TERMS APPLICABLE TO XXXX XX. i. Each Lender hereby agrees
that the form of the Xxxx XX attached hereto as Schedule 4 is
acceptable to it and hereby consents to the issuance of the Xxxx XX in
such form; provided that (1) all of the terms and conditions set forth
in Section 2A.1(a) above, (2) all other conditions precedent to the
issuance of a Letter of Credit hereunder, and (3) all conditions
precedent to the purchase of the Bonds set forth in Section IV of that
certain Placement Agreement by and among Borrower, The Industrial
Development Corporation of Xxxxxx County, Idaho, and NationsBank,
N.A., except for delivery of an opinion of Xxxxxxxx & Xxxxxx, P.C.,
counsel for Agent, and the Xxxx XX, have been satisfied. (Such
consent shall not obligate the Issuing Bank to obtain such Lender's
consent to the issuance or extension of the term of any Letter of
Credit or the extension of the term of the Xxxx XX except any
extension of the expiration date beyond the last day of the Commitment
Period.)
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ii. The term of the Xxxx XX may be extended at the written
request of Borrower (in this subparagraph called "Request for
Extension") for an additional period determined by the Issuing Bank if
the Issuing Bank shall have given written notice to Borrower of such
extension and shall have delivered to the Trustee a notice in the form
of Annex E to the Xxxx XX (and the Trustee shall have accepted such
notice) at least forty-five (45) days prior to the end of the then
effective expiration date of the Xxxx XX, subject to the terms and
conditions set forth in this Agreement and the Xxxx XX, and subject to
earlier termination of the Xxxx XX in accordance with its terms. If
the Issuing Bank shall not have received from Borrower a Request for
Extension at least ninety (90) days prior to the then effective
expiration date of the Xxxx XX, Issuing Bank shall have no obligation
to consider extending the term of the Xxxx XX. Issuing Bank shall
notify Borrower whether or not it shall extend the term of the Xxxx XX
within forty-five (45) days after Issuing Bank's receipt of a Request
for Extension. Any determination to extend the term of the Letter of
Credit shall be made at Issuing Bank's sole discretion; no course of
dealing or other circumstances shall require the Issuing Bank to
extend the Letter of Credit.
Section 2A.2 REQUESTING LETTERS OF CREDIT. Borrower must make written
application for any Letter of Credit at least three Business Days before such
Letter of Credit is issued by Issuing Bank or if otherwise, within the time
permitted by the agreements described below in this section. Each such written
application must be made in writing in the form and substance of the "Standby
Letter of Credit Application and Agreement" attached hereto as Exhibit F, duly
completed and signed by an Authorized Officer of Borrower, the terms and
provisions of such agreements being incorporated herein by reference. By each
such application for a Letter of Credit Borrower shall be deemed to have made
all representations and warranties set forth herein as of the date of such
application. If all conditions precedent to the issuance of such Letter of
Credit have been met, Issuing bank will, in reliance on the agreements of
Lenders set forth in Section 2A.3(b), on the date requested, issue such Letter
of Credit at Issuing Bank's office in Dallas, Texas. Provisions of any LC
Application shall be deemed to apply only to the related Letter of Credit;
provided, however, that any "default" or "event of default" under such LC
Application shall also constitute an Event of Default hereunder. If any
provisions of any LC Application conflict with any provisions of this Agreement,
the provisions of this Agreement shall govern and control.
Section 2A.3 REIMBURSEMENT.
(a) REIMBURSEMENT BY BORROWER. Each payment of a draft or demand for
payment honored by Issuing Bank shall constitute a loan to and obligation of
Borrower. Borrower promises to pay to Issuing Bank, or to Issuing Bank's order
at such Issuing Bank's office in Dallas, Texas on demand, in legal tender of the
United States of America, any and all amounts paid by Issuing Bank under or
purporting to be under any Letter of Credit, together with interest on any such
amounts (i) from the date payment is made by Issuing Bank under such Letter of
Credit until and including the first Business Day following such date of
payment, at the Base Rate and (ii) thereafter, provided that notice is given to
Borrower of such honor by Issuing Bank, until the repayment of such amounts to
Issuing Bank, at the Late Payment Rate. Borrower hereby promises to pay, when
due, all present and future taxes, levies, costs and charges whatsoever imposed,
assessed, levied or collected on, under or in respect of this Agreement or any
Letter of Credit and any payments of principal, interest or other amounts made
on or in respect of any thereof (excluding, however, any such taxes, levies,
costs and charges imposed on or measured by the overall net income of Issuing
Bank). Borrower promises to indemnify Issuing Bank against, and to reimburse
Issuing Bank on demand for, any of the foregoing taxes, levies, costs or charges
paid by Issuing Bank and
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any loss, liability, claim or expense, including interest, penalties and legal
fees, that Issuing Bank may incur because of or in connection with the failure
of Borrower to make any such payment of taxes, levies, costs or charges when due
or any payment of Matured LC Obligations when due.
(b) PARTICIPATION BY LENDERS. Issuing Bank irrevocably agrees to grant
and hereby grants to each Lender, and, to induce Issuing Bank to issue Letters
of Credit hereunder, each Lender irrevocably agrees to accept and purchase and
hereby accepts and purchases from Issuing Bank, on the terms and conditions
hereinafter stated, for such Lender's own account and risk an undivided interest
equal to such Lender's Percentage Share of Issuing Bank's obligations and rights
under each Letter of Credit issued hereunder and the amount of each draft paid
by Issuing Bank thereunder. In the event that Borrower should fail to pay
Issuing Bank on demand the amount of any draft or other request for payment
drawn under or purporting to be drawn under a Letter of Credit as provided in
subsection (a) above, each Lender shall, before 2:00 p.m. (Dallas Time) on the
Business Day Issuing Bank shall have given notice to Lenders of Borrower's
failure to so pay Issuing Bank, if such notice is given by 11:00 a.m., Dallas
time (or on the Business Day immediately succeeding the day such notice is given
after 11:00 a.m. Dallas time), pay to Issuing Bank at Issuing Bank's offices in
Dallas, Texas, in legal tender of the United States of America, in same day
funds, such Lender's Percentage Share of the amount of such draft or other
request for payment, plus interest on such amount i. from the date Issuing Bank
shall have paid such draft or request for payment until and including the first
Business Day following such date of payment, at the Base Rate and ii.
thereafter, to the date of such payment by such Lender, at the Late Payment
Rate. Each Lender's obligation to reimburse Issuing Bank pursuant to the terms
of this Section 2A.3(b) is irrevocable and unconditional. If any such amount
required to be paid by any Lender pursuant to this Section 2A.3(b) is not in
fact made available by such Lender to Issuing Bank within three Business Days
after the date such payment is due, Issuing Bank shall be entitled to recover
from such Lender, on demand, such amount required to be paid by such Lender,
plus interest thereon calculated from such due date at the Federal Funds Rate.
A written advice(s) setting forth in reasonable detail the amounts owing under
this Section 2A.3, submitted by Issuing Bank to Borrower from time to time,
shall be conclusive, absent manifest error, as to the amounts thereof.
Whenever, at any time after Issuing Bank has made payment under any Letter of
Credit, and has received from any Lender its Percentage Share of such payment in
accordance with this Section 2A.3(b), Issuing Bank receives any payment related
to such Letter of Credit (whether directly from Borrower or otherwise, including
proceeds of Cash Collateral applied thereto by Issuing Bank), or any payment of
interest on account thereof, Issuing Bank will distribute to such Lender its
Percentage Share thereof; PROVIDED, HOWEVER, that in the event that any such
payment received by Issuing Bank shall be required to be returned by Issuing
Bank, such Lender shall return to Issuing Bank the portion thereof previously
distributed by Issuing Bank to it.
c. PAYMENT OF REIMBURSEMENT OBLIGATION WITH LOANS. Each time payment of
a draft or demand for payment under a Letter of Credit is honored by Issuing
Bank, Borrower shall be deemed to have made a Borrowing Notice in the amount of
such payment pursuant to Section 2.2. If all conditions precedent to the making
of such Loan have been satisfied and such Loan is made, the proceeds thereof
shall be applied to the payment of Borrower's obligation to reimburse Issuing
Bank for such payment.
Section 2A.4 TRANSFEREES OF LETTERS OF CREDIT. Borrower agrees that if
any Letter of Credit provides that it is transferable, Issuing Bank is under no
duty to determine the proper identity of anyone appearing as transferee of such
Letter of Credit, nor shall Issuing Bank be charged with responsibility of any
nature or character for the validity or correctness of any transfer or
successive transfers, and payment by Issuing Bank to any purported transferee or
transferees as determined by Issuing Bank is hereby authorized and approved, and
Borrower further agrees to hold Issuing Bank and
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each Lender harmless and indemnified against any liability or claim in
connection with or arising out of the foregoing.
Section 2A.5 EXTENSION OF MATURITY. Borrower agrees that if the maturity
of any Letter of Credit is extended by its terms or by law or governmental
action, if any extension of the maturity or time for presentation of drafts or
any other modification of the terms of any Letter of Credit is made at the
request of Borrower, or if the amount of any such Letter of Credit is increased
at the request of Borrower, subject in each case to Section 2A.1, this Agreement
shall be binding upon Borrower with respect to such Letter of Credit as so
extended, increased or otherwise modified, with respect to drafts and property
covered thereby, and with respect to any action taken by Issuing Bank or any of
Issuing Bank's correspondents in accordance with such extension, increase or
other modification.
Section 2A.6 RESTRICTION ON LIABILITY. The users of each Letter of
Credit shall be deemed the agents of Borrower and neither Issuing Bank, nor its
correspondents shall be responsible for:
a. the use which may be made of any Letter of Credit or for any
actions or omissions of the users of any Letter of Credit;
b. the existence or nonexistence of a default under any instrument
secured or supported by any Letter of Credit or any other event which gives
rise to a right to call upon any Letter of Credit;
c. the validity, sufficiency or genuineness of any document delivered
in connection with any Letter of Credit, even if such document should in
fact prove to be in any or all respects invalid, fraudulent or forged;
d. except as specifically required by a Letter of Credit, failure of
any instrument to bear any reference or adequate reference to any Letter of
Credit, or failure of documents to accompany any draft at negotiation, or
failure of any person to note the amount of any draft on the reverse of any
Letter of Credit or to surrender or take up any Letter of Credit; or
e. errors, omissions, interruptions or delays in transmission or
delivery of any messages by mail, cable, telegraph, wireless, or otherwise.
Issuing Bank shall not be responsible for any act, error, neglect or default,
omission, insolvency or failure in the business of any of the correspondents of
Issuing Bank, for any refusal by Issuing Bank or any of its correspondents to
pay or honor drafts drawn under any Letter of Credit because of any applicable
law, decree or edict, legal or illegal, of any governmental agency now or
hereafter enforced, or for any matter beyond the control of Issuing Bank. The
happening of any one or more of the contingencies referred to in the preceding
clauses of this paragraph shall not affect, impair or prevent the vesting of any
of the rights or powers of Issuing Bank and or Lenders under this Agreement or
the obligation of Borrower to make reimbursement hereunder. In furtherance and
extension and not in limitation of the specific provisions hereinabove set
forth, Borrower agrees that any action, unless such action constitutes willful
misconduct or gross negligence, not contrary to the terms of any Letter of
Credit, which is taken by Issuing Bank or any Lender issuing such Letter of
Credit or by any correspondent under or in connection with such Letter of Credit
shall be binding on Borrower and shall not put Issuing Bank or any Lender or any
correspondent under any resulting liability to Borrower and Borrower makes a
like agreement as to any inaction or omission unless such action or inaction
constitutes gross negligence or willful misconduct.
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Section 2A.7 NO DUTY TO INQUIRE. Borrower agrees that Issuing Bank is
authorized and instructed to accept and pay drafts under any Letter of Credit
without requiring, and without responsibility for, the determination as to the
existence of any event giving rise to said draft, either at the time of
acceptance of payment or thereafter; provided that Issuing Bank and Lenders will
comply with the provisions of Article 15 of the Uniform Customs and Practices
for Documentary Credits (1994 Revision) International Chamber of Commerce
Publication 500. Borrower agrees that Issuing Bank is under no duty to
determine the proper identity of anyone presenting such a draft or making such a
demand (whether by tested telex or otherwise) as the officer, representative or
agent of any beneficiary under any Letter of Credit issued by Issuing Bank, and
payment by Issuing Bank to any such beneficiary when requested by any such
purported officer, representative or agent is hereby authorized and approved by
Borrower. Borrower agrees to hold Issuing Bank and each Lender harmless and
indemnified against any liability or claim in connection with or arising out of
the foregoing provisions and the subject matter of this section.
Section 2A.8 PAYMENT OF LC OBLIGATIONS.
(a) CASH COLLATERAL FOR LC OBLIGATIONS.
i. ACCELERATION. If the Obligations, or any part thereof, become
immediately due and payable pursuant to Article VII, then all LC
Obligations shall become immediately due and payable without regard for
actual drawings or payments on the Letters of Credit and Borrower shall
immediately pay to Agent for the account of the Issuing Bank an amount
equal to the aggregate LC Obligations then outstanding.
ii. LONG-TERM LETTERS OF CREDIT. If in accordance with the terms of
Section 2A.1 of this Agreement, Majority Lenders have agreed to extend the
expiration date of any Letter of Credit beyond the last Business Day of the
Commitment Period, on such Business Day Borrower will pay to Agent for the
account of the Issuing Bank an amount equal to the aggregate LC Obligations
relating to such Letters of Credit, in addition to all other amounts then
due under the Loan Documents.
iii. REQUIRED PREPAYMENT AMOUNT. If at the time Borrower is required
to pay a Required Prepayment Amount pursuant to Section 2.8, the
Obligations which are not LC Obligations (in this Section called the "NON-
LC OBLIGATIONS") then outstanding are less than the Required Prepayment
Amount then due, Borrower shall pay to Agent for the account of Issuing
Bank the amount by which (1) the Required Prepayment Amount then due
exceeds (2) the Non-LC Obligations then outstanding, (in each case the
"EXCESS AMOUNT") to be held pursuant to Section 2A.8.
iv. REFUND OF EXCESS AMOUNTS. If at the end of any Fiscal Quarter
during which Agent has held Cash Collateral pursuant to subsection iii.
above: (1) Borrower has delivered financial statements pursuant to Section
5.1(b) for such Fiscal Quarter;
(2) Borrower is not required to make a Mandatory Prepayment pursuant to
Section 2.8 and (3) no Default or Event of Default has occurred and is
continuing, then upon the written request of Borrower within ninety (90)
days after the end of such Fiscal Quarter, Agent shall remit to Borrower
the amount of Cash Collateral previously deposited pursuant to subsection
iii. above.
(b) CASH COLLATERAL ACCOUNTS. i. GENERAL LC COLLATERAL ACCOUNT. All
amounts due and payable by Borrower under this Section 2A.8 with respect
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to all Letters of Credit (other than the Xxxx XX) shall be (1) first
applied to Borrower's General LC Obligations that are then due and payable,
and (2) second held in an account established at NationsBank or an
Affiliate thereof designated the Hecla Mining Company General LC Collateral
Account (the "GENERAL LC COLLATERAL ACCOUNT"), as security for the
remaining Obligations other than Xxxx XX Obligations (in this Section 2A.8
all such amounts held in the General LC Collateral Account and all
investments made with funds in the General LC Collateral Account are
collectively called the "GENERAL XX XXXX COLLATERAL"). The General XX Xxxx
Collateral shall be applied to General LC Obligations as they become due
and payable and when no General LC Obligations remain outstanding, the
General XX Xxxx Collateral shall be applied to all other Obligations
(excluding Xxxx XX Obligations) as they become due and payable. At any
time, and from time to time so long as no Default or Event of Default has
occurred and is continuing, Agent, at the written request of Borrower,
shall invest and reinvest funds held in the General LC Collateral Account
in Permitted Investments at such prices as are set forth in such request,
subject to the Lien in favor of Agent. Upon the occurrence and during the
continuance of an Event of Default, Agent shall invest and reinvest funds
held in the General LC Collateral Account in Permitted Investments, at such
prices as it in its sole discretion determines, subject to the Lien in
favor of Agent. Agent shall have no liability for losses on any such
Permitted Investments. Any proceeds and interest or other earnings shall
be retained in the General LC Collateral Account and invested in the same
manner as other funds therein or applied to Obligations then due and owing.
ii. XXXX XX COLLATERAL ACCOUNT. All amounts due and payable by
Borrower under this Section 2A.8 with respect to the Xxxx XX shall be (1)
first applied to Borrower's Xxxx XX Obligations that are then due and
payable, and (2) second held in an account established at NationsBank or an
Affiliate thereof designated the Hecla Mining Company Xxxx XX Collateral
Account (the "XXXX XX COLLATERAL ACCOUNT"), as security for the remaining
Obligations (in this Section 2A.8 all such amounts held in the Xxxx XX
Collateral Account and all investments made with funds in the Xxxx XX
Collateral Account are collectively called the "XXXX XX CASH COLLATERAL").
The Xxxx XX Cash Collateral shall be applied to Xxxx XX Obligations as they
become due and payable and when no Xxxx XX Obligations remain outstanding,
the Xxxx XX Cash Collateral shall be applied to all other Obligations as
they become due and payable. At any time, and from time to time so long as
no Default or Event of Default has occurred and is continuing, Agent, at
the written request of Borrower, shall invest and reinvest funds held in
the Xxxx XX Collateral Account in Permitted Investments at such prices as
are set forth in such request, subject to the Lien in favor of Agent. Upon
the occurrence and during the continuance of an Event of Default, Agent
shall invest and reinvest funds held in the Xxxx XX Collateral Account in
Permitted Investments at such prices as it in its sole discretion
determines, subject to the Lien in favor of Agent. Agent shall have no
liability for losses on any such Permitted Investments. Any proceeds and
interest or other earnings shall be retained in the Xxxx XX Collateral
Account and invested in the same manner as other funds therein or applied
to Obligations then due and owing. NOTWITHSTANDING THE FOREGOING PROVISION
OF THIS SECTION 2A.8, in no event shall Agent invest or fail to invest any
funds on deposit in the Xxxx XX Collateral Account, or fail to pay any
requested rebate to the United States of America, if such investment or
failure to invest or such failure to pay any required rebate, would cause
the Bonds to be or become "ARBITRAGE BONDS" within the meaning of Section
148 of the Internal Revenue Code, as amended, and any applicable
regulations thereunder; Agent shall only invest funds on deposit in the
Xxxx XX Collateral Account at a yield not in excess of the yield on the
Bonds. The term "YIELD" means with respect to the issue of which the Bonds
are a part, the discount rate that, when used in computing the present
value of the issue date of all
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unconditionally payable payments of principal, interest and fees for
qualified guarantees on the issue, produces an amount equal to the present
value using the same discount rate of the aggregate issue price of the
issue as of the issue date. Agent may conclusively rely on an opinion of
its legal counsel (including in-house counsel) in determining whether it
has complied with the obligations of this subsection and Agent shall not be
liable for any failure to comply with such obligations if Agent shall have
relied on any such opinion. Such proceeds, interest or income which are
not so invested or reinvested in Permitted Investments due to the
restriction described above shall be deposited and held by the Agent in the
Xxxx XX Cash Collateral Account.
iii. Neither Borrower nor any Person claiming on behalf of or through
Borrower shall have any right to withdraw any of the funds held in the
General LC Collateral Account or the Xxxx XX Collateral Account, except as
otherwise provided in subsection 2A.8(a)(iii) above or until this Agreement
has been terminated pursuant to Section 9.7.
iv. Borrower agrees that it will not sell or otherwise dispose of any
interest in the General XX Xxxx Collateral Account, the Xxxx XX Collateral
Account or the Cash Collateral, or create or permit to exist any Lien upon
or with respect to any of the foregoing except in favor of Agent.
(c) GRANT OF SECURITY INTEREST. Borrower hereby assigns and grants to
Agent a continuing security interest for the benefit of Lenders in the Cash
Collateral and all proceeds thereof to secure the Obligations and agrees
that Agent shall have all of the rights and remedies of a secured party
under the Uniform Commercial Code as adopted in the State of Texas with
respect to such security interest and that an Event of Default under this
Agreement shall constitute a default for purposes of such security
interest. Borrower agrees that, to the extent notice of sale of any
Permitted Investments shall be required by law, at least five Business
Days' notice to Borrower of the time and place of any public sale or the
time after which any private sale is to be made shall constitute reasonable
notification. Agent may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it will
be so adjourned.
(d) ACCOUNT TRANSFERS. When Borrower is required to make payments under
this Section 2A.8 and fails to do so on the day when due, Agent may without
notice to Borrower or any other Related Person make such payment (whether
by application of proceeds of Cash Collateral, by transfers from other
accounts maintained with NationsBank or otherwise) using any funds then
available to any Related Person or any other Person liable for all or any
part of Borrower's Obligations hereunder or under Borrower's LC
Applications. Following any such payment by such transfer of accounts and
upon delivery to Agent by Borrower of evidence satisfactory to Agent, in
its sole discretion, that such accounts, at the time of such application
contained funds held in the legal capacity of agent, operator or trustee
for a third party (any funds so held, "THIRD PARTY FUNDS"), Agent will
remit to the Person or Persons in whose name the account is held such Third
Party Funds. Any amounts which are required to be paid pursuant to this
Section 2A.8 and which are not paid on the date due shall, for purposes of
each Loan Document, be considered past due Obligations owing hereunder, and
Agent is hereby authorized to liquidate Cash Collateral, demand under any
and all guarantees of all or part of the Obligations and otherwise exercise
its respective rights under each Loan Document to obtain such amounts.
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(e) PERFECTION AND PROTECTION OF SECURITY INTERESTS AND LIENS. Borrower
will from time to time deliver to Agent any financing statements,
continuation statements and other documents, properly completed and
executed (and acknowledged when required) by the Related Persons in form
and substance satisfactory to Agent, which Agent requests for the purpose
of perfecting, confirming, or protecting any Liens or other rights in the
Cash Collateral.
(f) CUSTODY OF CASH COLLATERAL. The Agent shall exercise reasonable care
in the custody and preservation of the Cash Collateral and shall be deemed
to have exercised such care if the Cash Collateral is accorded treatment
substantially equivalent to that which the Agent accords its own property,
it being understood that the Agent shall not have any responsibility for
taking any necessary steps to preserve rights against any parties with
respect to the Cash Collateral.
ARTICLE III - CONDITIONS PRECEDENT TO LENDING
Section 3.1 DOCUMENTS TO BE DELIVERED. No Lender has any obligation to
make its first Loan unless Agent shall have received all of the following, at
Agent's office in Dallas, Texas, duly executed and delivered and in form,
substance and date satisfactory to Agent:
(a) This Agreement and any other documents that Lenders are to
execute in connection herewith.
(b) Each Lender's Note.
(c) Certain certificates of Borrower including:
i. An "Omnibus Certificate" of the Secretary or Assistant
Secretary and of the Chairman of the Board or President or any Vice
President of Borrower, which shall contain the names and signatures of
the officers of Borrower authorized to execute Loan Documents and
which shall certify to the truth, correctness and completeness of the
following exhibits attached thereto: ii. a copy of resolutions duly
adopted by the Board of Directors of Borrower and in full force and
effect at the time this Agreement is entered into, authorizing the
execution of this Agreement and the other Loan Documents delivered or
to be delivered in connection herewith and the consummation of the
transactions contemplated herein and therein, iii. a copy of the
charter documents of Borrower and all amendments thereto, certified by
the appropriate official of Borrower's state of organization, and iv.
a copy of any bylaws of Borrower; and v. A "Compliance Certificate"
of the chief financial officer, chief accounting officer, Treasurer or
Vice-President Finance of Borrower, of even date with such Loan, in
which such officers certify to the satisfaction of the conditions set
out in subsections (a), (b), (c) and (d) of Section 3.2.
(d) A certificate (or certificates) of the due formation, valid
existence and good standing of Borrower in its state of organization,
issued by the appropriate authorities of such jurisdiction.
(e) A favorable opinion of counsel for Borrower, substantially in the
form set forth in Exhibit E.
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(f) Documents similar to those specified in subsections (c) and (d)
of this section with respect to each Subsidiary Guarantor and the execution
by it of its guaranty of Borrower's Obligations.
(g) A Fee Letter.
Section 3.2 ADDITIONAL CONDITIONS PRECEDENT. No Lender has any
obligation to make any Loan (including its first) unless the following
conditions precedent have been satisfied:
(a) All representations and warranties made by any Related Person in
any Loan Document shall be true on and as of the date of such Loan (except
to the extent that the facts upon which such representations are based have
been changed by the extension of credit hereunder) as if such
representations and warranties had been made as of the date of such Loan.
(b) No Default shall exist at the date of such Loan.
(c) No material adverse change shall have occurred in Borrower's
Consolidated financial condition or results of operations.
(d) Each Related Person shall have performed and complied with all
agreements and conditions required in the Loan Documents to be performed or
complied with by it on or prior to the date of such Loan.
(e) The making of such Loan shall not be prohibited by any law or any
regulation or order of any court or governmental agency or authority and
shall not subject any Lender to any penalty or other onerous condition
under or pursuant to any such law, regulation or order.
(f) Agent shall have received all documents and instruments which
Agent has then requested, in addition to those described in Section 3.1
(including opinions of legal counsel for the Related Persons and Agent;
corporate documents and records; documents evidencing governmental
authorizations, consents, approvals, licenses and exemptions; and
certificates of public officials and of officers and representatives of
Borrower and other Persons), as to
(g) the accuracy and validity of or compliance with all
representations, warranties and covenants made by any of the Related
Persons in this Agreement and the other Loan Documents,
(h) the satisfaction of all conditions contained herein or therein,
and all other matters pertaining hereto and thereto and
(i) the making of such Loan or the issuance of such Letter of Credit
shall not cause the Total Debt to Cash Earnings Ratio to exceed Maximum
Total Debt to Cash Earnings Ratio (calculated using Total Debt as of the
date of such Loan or the issuance of such Letter of Credit, and including
the amount of such Loan or Letter of Credit, and using Cash Earnings as of
the end of the most recent Fiscal Quarter).
All such additional documents and instruments shall be satisfactory
to Agent in form, substance and date.
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ARTICLE IV - REPRESENTATIONS AND WARRANTIES
Section 4.1 BORROWER'S REPRESENTATIONS AND WARRANTIES. To confirm each
Lender's understanding concerning Borrower and Borrower's business, properties
and obligations and to induce Agent and each Lender to enter into this Agreement
and to make the Loans, Borrower represents and warrants to Agent and each Lender
that:
(a) NO DEFAULT. No Related Person is in default in the performance
of any of the covenants and agreements contained herein. No event has
occurred and is continuing which constitutes a Default.
(b) ORGANIZATION AND GOOD STANDING. Each Related Person which is a
corporation, limited liability company or partnership is duly organized,
validly existing and in good standing under the laws of its state of
organization, having all corporate or partnership powers required to carry
on its business and enter into and carry out the transactions contemplated
hereby. Each such Related Person is duly qualified, in good standing, and
authorized to do business in all other jurisdictions within the United
States wherein the character of the properties owned or held by it or the
nature of the business transacted by it makes such qualification necessary
except where the failure to do so would not result in a material adverse
effect on the business or operations of such Related Person. Each such
Related Person has taken all actions and procedures customarily taken in
order to enter, for the purpose of conducting business or owning property,
each jurisdiction outside the United States wherein the character of the
properties owned or held by it or the nature of the business transacted by
it makes such actions and procedures desirable except where the failure to
do so would not result in a material adverse effect on the business or
operations of such Related Person.
(c) AUTHORIZATION. Each Related Person which is a corporation,
limited liability company or partnership has duly taken all corporate or
partnership action necessary to authorize the execution and delivery by it
of the Loan Documents to which it is a party and to authorize the
consummation of the transactions contemplated thereby and the performance
of its obligations thereunder. Borrower is duly authorized to borrow funds
hereunder.
(d) NO CONFLICTS OR CONSENTS. The execution and delivery by the
various Related Persons of the Loan Documents to which each is a party, the
performance by each of its obligations under such Loan Documents, and the
consummation of the transactions contemplated by the various Loan
Documents, do not and will not i. conflict with any provision of ii. any
domestic or foreign law, statute, rule or regulation, iii. the articles or
certificate of incorporation, bylaws, charter, membership agreement or
partnership agreement or certificate of any Related Person, or iv. any
agreement, judgment, license, order or permit applicable to or binding upon
any Related Person, v. result in the acceleration of any Debt owed by any
Related Person, or vi. result in or require the creation of any Lien upon
any assets or properties of any Related Person except as expressly
contemplated in the Loan Documents. Except as expressly contemplated in
the Loan Documents no consent, approval, authorization or order of, and no
notice to or filing with, any court or governmental authority or third
party is required in connection with the execution, delivery or performance
by any Related Person of any Loan Document or to consummate any
transactions contemplated by the Loan Documents.
(e) ENFORCEABLE OBLIGATIONS. This Agreement is, and the other Loan
Documents when duly executed and delivered will be, legal, valid and
binding obligations of each Related Person which is a party hereto
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or thereto, enforceable in accordance with their terms except as such
enforcement may be limited by bankruptcy, insolvency or similar laws of
general application relating to the enforcement of creditors' rights.
(f) INITIAL FINANCIAL STATEMENTS. The Initial Financial Statements
fairly present Borrower's Consolidated financial position at the respective
dates thereof and the Consolidated results of Borrower's operations and
Borrower's Consolidated cash flows for the respective periods thereof.
Since the date of the audited annual Initial Financial Statements no
material adverse change has occurred in Borrower's financial condition or
businesses or in Borrower's Consolidated financial condition or businesses,
except as reflected in the quarterly Initial Financial Statements or in the
Disclosure Schedule. All Initial Financial Statements were prepared in
accordance with GAAP.
(g) OTHER OBLIGATIONS AND RESTRICTIONS. No Related Person has any
outstanding Debt of any kind (including contingent obligations, tax
assessments, and unusual forward or long-term commitments) which is, in the
aggregate, material to Borrower or material with respect to Borrower's
Consolidated financial condition and not shown in the Initial Financial
Statements or disclosed in the Disclosure Schedule or a Disclosure Report.
Except as shown in the Initial Financial Statements or disclosed in the
Disclosure Schedule or a Disclosure Report, no Related Person is subject to
or restricted by any franchise, contract, deed, charter restriction, or
other instrument or restriction which is materially likely in the
foreseeable future to materially and adversely affect the businesses,
properties, prospects, operations, or financial condition of such Related
Person or of Borrower on a Consolidated basis.
(h) FULL DISCLOSURE. No certificate, statement or other information
delivered herewith or heretofore by any Related Person to Agent or any
Lender in connection with the negotiation of this Agreement or in
connection with any transaction contemplated hereby contains any untrue
statement of a material fact or omits to state any material fact known to
any Related Person (other than industry-wide risks normally associated with
the types of businesses conducted by the Related Persons) necessary to make
the statements contained herein or therein not misleading as of the date
made or deemed made. There is no fact known to any Related Person (other
than industry-wide risks normally associated with the types of businesses
conducted by the Related Persons) that has not been disclosed to Agent and
each Lender in writing which could materially and adversely affect
Borrower's properties, business, prospects or condition (financial or
otherwise) or Borrower's Consolidated properties, businesses, prospects or
condition (financial or otherwise). Borrower has heretofore delivered to
Agent and each Lender true, correct and complete copies of the Initial
Financial Statements.
(i) LITIGATION. Except as disclosed in the Initial Financial
Statements or in the Disclosure Schedule: (i) there are no actions, suits
or legal, equitable, arbitrative or administrative proceedings pending, or
to the knowledge of any Related Person threatened, against any Related
Person before any federal, state, municipal or other court, department,
commission, body, board, bureau, agency, or instrumentality, domestic or
foreign, which do or may reasonably be expected to have a material adverse
effect on Borrower or, on a Consolidated basis, Borrower and its properly
Consolidated subsidiaries, their ownership or use of any of their assets or
properties, their businesses or financial condition or prospects, or the
right or ability of any Related Person to enter into the Loan Documents to
which it is a party or to consummate the transactions contemplated thereby
or to perform its obligations thereunder and (ii) there are no outstanding
judgments, injunctions, writs, rulings or orders by any such governmental
entity against any
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Related Person or any Related Person's stockholders, partners, directors or
officers which have or may reasonably be expected to have any such effect.
(j) ERISA LIABILITIES. All currently existing ERISA Plans are listed
in the Disclosure Schedule or a Disclosure Report. Except as disclosed in
the Initial Financial Statements or in the Disclosure Schedule or a
Disclosure Report, no Termination Event has occurred with respect to any
ERISA Plan and the Related Persons are in compliance with ERISA in all
material respects. No Related Person is required to contribute to, or has
any other absolute or contingent liability in respect of, any
"multiemployer plan" as defined in Section 4001 of ERISA. Except as set
forth in the Disclosure Schedule or a Disclosure Report: (i) no
"accumulated funding deficiency" (as defined in Section 412(a) of the
Internal Revenue Code of 1986, as amended) exists with respect to any ERISA
Plan, whether or not waived by the Secretary of the Treasury or his
delegate, and (ii) the current value of each ERISA Plan's benefits does not
exceed the current value of such ERISA Plan's assets available for the
payment of such benefits by more than $500,000.
(k) ENVIRONMENTAL AND OTHER LAWS. Except as disclosed in the
Disclosure Schedule or a Disclosure Report: i. the Related Persons are
conducting their businesses in material compliance with all applicable
federal, state and local laws, including Environmental Laws, and have and
are in compliance in all material respects with all licenses and permits
required under any such laws; ii. none of the operations or properties of
any Related Person is the subject of federal, state or local investigation
regarding any release of any Hazardous Materials into the environment or
the improper storage or disposal (including storage or disposal at offsite
locations) of any Hazardous Materials in which an adverse determination
would potentially result in a loss in excess of five percent (5%) of
Borrower's Consolidated net worth; iii. no Related Person (and to the best
knowledge of Borrower, no other Person) has filed or received any notice
under any federal, state or local law of any actual or potential violation
of Environmental Laws or any violation of any applicable license or permit,
which violation would potentially result in a loss in excess of five
percent (5%) of Borrower's Consolidated net worth; and iv. no Related
Person otherwise has any known contingent liability under any Environmental
Laws or in connection with the release into the environment, or the storage
or disposal, of any Hazardous Materials in excess of five percent (5%) of
Borrower's Consolidated net worth.
(l) NAMES AND PLACES OF BUSINESS. Neither Borrower nor any
Subsidiary Guarantor, during the preceding five years, had, been known by,
or used any other corporate, trade, or fictitious name, except as disclosed
in the Disclosure Schedule. Except as otherwise indicated in the
Disclosure Schedule or a Disclosure Report, the chief executive office and
principal place of business of Borrower and each of the Subsidiary
Guarantors are (and for the preceding five years have been) located at the
address of Borrower set out in Section 9.3 or (if different) the address of
each such Related Person set out in the Disclosure Schedule. Except as
indicated in the Disclosure Schedule or a Disclosure Report, neither
Borrower nor any Subsidiary Guarantor has any other office or place of
business.
(m) BORROWER'S SUBSIDIARIES. Borrower does not presently have any
Subsidiary that has assets in excess of $1,000,000 (calculated at net book
value), other than Material Subsidiaries. Except as otherwise revealed in
a Disclosure Report, Borrower owns, directly or indirectly, the equity
interest in each of its Subsidiaries which is indicated in Schedule 2.
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(n) TITLE TO PROPERTIES. Each Related Person has good and defensible
title to all of its material properties and assets, free and clear of all
Prohibited Liens.
(o) GOVERNMENT REGULATION. Neither Borrower nor any other Related
Person owing Obligations is subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act, the Investment Company
Act of 1940 (as any of the preceding acts have been amended) or any other
statute, law, regulation or decree which regulates the incurring by such
Person of Debt, including statutes, laws, regulations or decrees relating
to common contract carriers or the sale of electricity, gas, steam, water
or other public utility services.
(p) INSIDER. Neither Borrower, nor any other Related Person, nor any
Person having "control" (as that term is defined in 12 U.S.C. Section
375b(9) or in regulations promulgated pursuant thereto) of Borrower, is a
"director" or an "executive officer" or "principal shareholder" (as those
terms are defined in 12 U.S.C. Section 375b(8) or (9) or in regulations
promulgated pursuant thereto) of Lender, of a bank holding company of which
Lender is a Subsidiary or of any Subsidiary of a bank holding company of
which Lender is a Subsidiary.
(q) OFFICERS AND DIRECTORS. The officers and directors of Borrower
are those persons disclosed in the definitive proxy statement prepared by
Borrower and filed with the Securities and Exchange Commission in
connection with Borrower's most recent annual meeting, copies of which
proxy statement have been previously furnished in connection with the
negotiation hereof.
(r) SOLVENCY. Neither Borrower nor any Subsidiary Guarantor is
"insolvent" on the date hereof (that is, the sum of such Person's absolute
and contingent liabilities, including the Obligations, exceeds the fair
market value of such Person's assets). Borrower's and each Subsidiary
Guarantor's capital is adequate for the businesses in which such Person is
engaged and intends to be engaged. Neither Borrower nor any Subsidiary
Guarantor has hereby incurred, nor does Borrower nor any Subsidiary
Guarantor intend to incur or believe that it will incur, debts which will
be beyond its ability to pay as such debts mature. The direct or indirect
value of the consideration received and to be received by each Subsidiary
Guarantor in connection herewith is reasonably worth at least as much as
the liability and obligations of such Subsidiary Guarantor under Article
VIA and the incurrence of such liability and obligations in return for such
consideration may reasonably be expected to benefit each Subsidiary
Guarantor, directly or indirectly.
Section 4.2 REPRESENTATION BY LENDERS. Each Lender hereby represents
that it will acquire its Note for its own account in the ordinary course of its
commercial lending business; however, the disposition of such Lender's property
shall at all times be and remain within its control and, in particular and
without limitation, such Lender may sell or otherwise transfer its Note, any
participation interest or other interest in its Note, or any of its other rights
and obligations under the Loan Documents.
ARTICLE V - COVENANTS OF BORROWER
Section 5.1 AFFIRMATIVE COVENANTS. To conform with the terms and
conditions under which each Lender is willing to have credit outstanding to
Borrower, and to induce Agent and each Lender to enter into this Agreement and
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make the Loans, Borrower warrants, covenants and agrees that until the full and
final payment of the Obligations and the termination of this Agreement, unless
Majority Lenders (or all Lenders as set forth in Section 9.1(a)) have previously
agreed otherwise:
(a) PAYMENT AND PERFORMANCE. Borrower will pay all amounts due under
the Loan Documents in accordance with the terms thereof and will observe,
perform and comply with every covenant, term and condition expressed in the
Loan Documents. Borrower will cause the other Related Persons to observe,
perform and comply with every such term, covenant and condition.
(b) BOOKS, FINANCIAL STATEMENTS AND REPORTS. Each Related Person
will at all times maintain full and materially accurate books of account
and records. Borrower will maintain and will cause its Subsidiaries to
maintain a standard system of accounting and will furnish the following
statements and reports to Agent and each Lender at Borrower's expense:
i. As soon as available, and in any event within 90 days after
the end of each Fiscal Year, complete Consolidated financial
statements of Borrower together with all notes thereto, prepared in
reasonable detail in accordance with GAAP, together with an opinion,
based on an audit using generally accepted auditing standards, by
Coopers & Xxxxxxx or other independent certified public accountants
selected by Borrower and acceptable to Majority Lenders, stating that
such Consolidated financial statements have been so prepared. These
financial statements shall contain a Consolidated balance sheet as of
the end of such Fiscal Year and Consolidated and consolidating
statements of earnings, of cash flows, and of changes in owners'
equity for such Fiscal Year, each setting forth in comparative form
the corresponding figures for the preceding Fiscal Year. In addition,
within 100 days after the end of each Fiscal Year Borrower will
furnish a report signed by such accountants stating that they have
read this Agreement and further stating that in making the examination
and reporting on the Consolidated financial statements described above
they did not conclude that any Default existed at the end of such
Fiscal Year or at the time of their report, or, if they did conclude
that a Default existed, specifying its nature and period of existence.
ii. As soon as available, and in any event within 45 days after
the end of each of the first three Fiscal Quarters in each Fiscal Year
of Borrower's Consolidated and consolidating balance sheet as of the
end of such Fiscal Quarter and Consolidated and consolidating
statements of Borrower's earnings and cash flows for the period from
the beginning of the then current Fiscal Year to the end of such
Fiscal Quarter, all in reasonable detail and prepared in accordance
with GAAP, subject to changes resulting from normal year-end
adjustments. In addition Borrower will, together with each such set
of financial statements and each set of financial statements furnished
under subsection (b)(i) of this section, furnish a certificate in the
form of Exhibit D signed by the chief financial officer of Borrower
stating that such financial statements are accurate and complete,
stating that he has reviewed the Loan Documents, containing
calculations showing compliance (or non-compliance) at the end of such
Fiscal Quarter with the requirements of Sections 5.2(a), 5.2(d),
5.2(k) and 5.2(l) and stating that no Default exists at the end of
such Fiscal Quarter or at the time of such certificate or specifying
the nature and period of existence of any such Default.
iii. Within 45 days after the end of each Fiscal Quarter, cash
flow projections based on a rolling four quarter basis, to be used to
calculate the Total Debt to Cash Earnings Ratio as set forth in
Section 2.8(b), and by November 30 of each year annual
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five-year cash flow projections, together with (A) information
prepared by Borrower and/or its geologists and/or consultants
supporting such projections and (B) as to such quarterly projections,
any available information regarding actual cash flow since the end of
such Fiscal Quarter.
iv. Promptly upon their becoming available, copies of all
financial statements, reports, notices and proxy statements sent by
Borrower to its stockholders and all registration statements, periodic
reports and other statements and schedules filed by Borrower with any
securities exchange, the Securities and Exchange Commission or any
similar governmental authority.
v. A quarterly variance report explaining material variances
between actual versus budgeted amounts for all material business units
of Borrower, including information such as unit price and cost data,
capital expenditures, revenues, and operating costs.
(c) OTHER INFORMATION AND INSPECTIONS. Each Related Person will
furnish to Agent any information which Agent may from time to time
reasonably request in writing for itself or on behalf of any Lender
concerning any covenant, provision or condition of the Loan Documents or
any matter in connection with the Related Persons' businesses and
operations. Each Related Person will permit representatives appointed by
Agent (including independent accountants, agents, attorneys, appraisers and
any other Persons) to visit and inspect any of such Related Person's
property, including its books of account, other books and records, and any
facilities or other business assets, and to make extra copies therefrom and
photocopies and photographs thereof, and to write down and record any
information such representatives obtain, and each Related Person shall
permit Agent or its representatives to investigate and verify the accuracy
of the information furnished to Agent or any Lender in connection with the
Loan Documents and to discuss all such matters with its officers, employees
and representatives.
(d) NOTICE OF MATERIAL EVENTS AND CHANGES OF NAME OR ADDRESS.
Borrower will promptly notify Agent:
i. of any material adverse change in Borrower's financial
condition or Borrower's Consolidated financial condition,
ii. of the occurrence of any Default,
iii. of the acceleration of the maturity of any Debt owed by any
Related Person or of any default by any Related Person under any
indenture, mortgage, agreement, contract or other instrument to which
any of them is a party or by which any of them or any of their
properties is bound, if such acceleration or default might have a
material adverse effect upon Borrower's Consolidated financial
condition,
iv. of the occurrence of any Termination Event,
v. of any suit, action or proceeding reasonably anticipated to
result in a claim in excess of $1,000,000, any notice of potential
liability under any Environmental Laws which might exceed such amount,
or any other material adverse claim asserted against any Related
Person or with respect to any Related Person's properties, and
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vi. of any labor controversy resulting in or threatening to
result in a strike against any Related Person; and
vii. of the filing of any suit or proceeding against any Related
Person in which an adverse decision could have a material adverse
effect upon any Related Person's financial condition, business or
operations.
Upon the occurrence of any of the foregoing the Related Persons will take
all necessary or appropriate steps to remedy promptly any such material
adverse change, Default, acceleration, default or Termination Event, to
protect against any such adverse claim, to defend any such suit or
proceeding, and to attempt to resolve or properly contest all controversies
on account of any of the foregoing.
BORROWER WILL ALSO NOTIFY AGENT AND AGENT'S COUNSEL IN WRITING AT
LEAST TWENTY BUSINESS DAYS PRIOR TO THE DATE THAT ANY RELATED PERSON
CHANGES ITS NAME OR THE LOCATION OF ITS CHIEF EXECUTIVE OFFICE OR PRINCIPAL
PLACE OF BUSINESS.
(e) MAINTENANCE OF PROPERTIES. Each Related Person will maintain,
preserve, protect, and keep all property material to the conduct of its
business in good condition and in substantial compliance with all
applicable laws, rules and regulations.
(f) MAINTENANCE OF EXISTENCE AND QUALIFICATIONS. Each Related Person
which is a corporation or partnership will maintain and preserve its
corporate or partnership existence and its rights and franchises in full
force and effect and will qualify to do business as a foreign corporation
or partnership in all states or jurisdictions where required by applicable
law, except where the failure so to qualify will not have any material
adverse effect on Borrower or any Subsidiary Guarantor.
(g) PAYMENT OF TRADE DEBT, TAXES, ETC. Each Related Person will i.
timely file all required tax returns; ii. timely pay all taxes,
assessments, and other governmental charges or levies imposed upon it or
upon its income, profits or property; iii. within ninety days after the
same becomes due pay all Debt owed by it on ordinary trade terms to
vendors, suppliers and other Persons providing goods and services used by
it in the ordinary course of its business; iv. pay and discharge when due
all other Debt now or hereafter owed by it; and v. maintain appropriate
accruals and reserves for all of the foregoing in accordance with GAAP.
Each Related Person may, however, delay paying or discharging any of the
foregoing so long as it is in good faith contesting the validity thereof by
appropriate proceedings and has set aside on its books adequate reserves
therefor in accordance with GAAP.
(h) INSURANCE. Each Related Person will keep or cause to be kept
adequately insured by financially sound and reputable insurers its property
(including without limitation "all-risk" (earthquake, boiler, machinery)
insurance on general property, and insurance on office contents, mobile
equipment, metals, ores and the like on premises, property-in-transit and
mobile service equipment) in amounts that are customary in the type of
businesses in which the Related Persons are engaged, and such other
endorsements as are customary in the type of businesses in which the
Related Persons are engaged. Upon demand by Agent any insurance policies
covering any such property shall be endorsed i. to provide that such
policies may not be cancelled, reduced or affected in any manner for any
reason without fifteen days prior notice to Agent, and ii. to provide for
any other matters which Agent may reasonably require and as are customary
in transactions of this type. Each Related Person shall at all times
maintain adequate insurance
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against its liability for injury to persons or property, which insurance
shall be by financially sound and reputable insurers and shall without
limitation provide the following coverages: comprehensive general
liability and automobile liability. Borrower self insures for workers
compensation.
(i) PAYMENT OF EXPENSES. Whether or not the transactions
contemplated by this Agreement are consummated, Borrower will promptly (and
in any event, within 30 days after any invoice or other statement or
notice) pay all reasonable costs and expenses incurred by or on behalf of
i. Agent (including attorneys' fees) in connection with ii. the
negotiation, preparation, execution and delivery of the Loan Documents, and
any and all consents, waivers or other documents or instruments relating
thereto, iii. the filing, recording, refiling and re-recording of any Loan
Documents and any other documents or instruments or further assurances
required to be filed or recorded or refiled or re-recorded by the terms of
any Loan Document, and iv. the borrowings hereunder and other action
reasonably required in the course of administration hereof, and v. Agent or
any Lender (including attorneys' fees) in connection with the defense or
enforcement of the Loan Documents or the defense of Agent's or any Lender's
exercise of its rights thereunder (including costs and expenses of
determining whether and how to carry out such defense or enforcement).
(j) PERFORMANCE ON BORROWER'S BEHALF. If any Related Person fails to
pay any taxes, insurance premiums, expenses, attorneys' fees or other
amounts it is required to pay under any Loan Document, Agent may pay the
same. Borrower shall immediately reimburse Agent for any such payments and
each amount paid by Agent shall constitute an Obligation owed hereunder
which is due and payable on the date such amount is paid by Agent.
(k) INTEREST. Borrower hereby promises to Agent and Lenders to pay
interest at the Late Payment Rate on all Obligations which Borrower has in
this Agreement promised to pay (including Obligations to pay fees or to
reimburse or indemnify Agent or any Lender) and which are not paid when
due. Such interest shall accrue from the date such Obligations become due
until they are paid.
(l) COMPLIANCE WITH AGREEMENTS AND LAW. Each Related Person will
perform all material obligations it is required to perform under the terms
of each indenture, mortgage, deed of trust, security agreement, lease,
franchise, agreement, contract or other instrument or obligation to which
it is a party or by which it or any of its properties is bound. Each
Related Person will conduct its business and affairs in compliance with all
laws, regulations, and orders applicable thereto, including Environmental
Laws, in all material respects.
(m) EVIDENCE OF COMPLIANCE. Each Related Person will furnish to
Agent at such Related Person's or Borrower's expense all evidence which
Agent from time to time reasonably requests in writing as to the accuracy
and validity of or compliance with all representations, warranties and
covenants made by any Related Person in the Loan Documents, the
satisfaction of all conditions contained therein, and all other matters
pertaining thereto.
(n) SUBSIDIARY GUARANTORS. Borrower shall cause each of its
Subsidiaries now existing or created, acquired or coming into existence
after the date hereof, that has assets at any time in excess of $1,000,000
(calculated at net book value) or having net cash earnings constituting
more than ten percent (10%) of Cash Earnings for any Fiscal Quarter, to
become a Subsidiary Guarantor and a party hereto at such time and to
execute and deliver to Agent a Subsidiary Guarantor Security Agreement, and
shall cause such Subsidiary to deliver at such time
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written evidence satisfactory to Agent and its counsel that such Subsidiary
has taken all corporate or partnership action necessary to duly approve and
authorize its joinder hereto and the performance of its obligations as a
Subsidiary Guarantor hereunder. Notwithstanding the foregoing, in the
event it is impracticable for any Subsidiary organized under the laws of a
jurisdiction other than the United States to become a Subsidiary Guarantor
as set forth above, such Subsidiary shall not be required to become a
Subsidiary Guarantor.
Section 5.2 NEGATIVE COVENANTS. To conform with the terms and
conditions under which each Lender is willing to have credit outstanding to
Borrower, and to induce Agent and each Lender to enter into this Agreement and
make the Loans, Borrower warrants, covenants and agrees that until the full and
final payment of the Obligations and the termination of this Agreement, unless
Majority Lenders have previously agreed otherwise:
(a) LIMITATION ON DEBT. No Related Person will in any manner owe or
be liable for any Funded Debt or any Debt under any Guaranty of any Funded
Debt except;
i. Permitted Debt owed by Borrower.
ii. Funded Debt (other than Funded Debt permitted in clause (i)
above) and Debt under any Guaranties of any Funded Debt, that, in the
aggregate for all such Funded Debt and Debt under Guaranties for all
Related Persons, does not exceed $5,000,000.
(b) LIMITATION ON LIENS. No Related Person will create, assume or
permit to exist any Lien upon any of the properties or assets which it now
owns or hereafter acquires, except:
i. Liens which secure Obligations only.
ii. statutory Liens for taxes, statutory mechanics' and
materialmen's Liens incurred in the ordinary course of business, and
other similar statutory Liens incurred in the ordinary course of
business, provided such Liens do not secure Funded Debt and secure
only Debt which is not delinquent or which is being contested as
provided in Section 5.1(g).
iii. deposits or pledges of cash or cash equivalents to secure
the payment of workers' compensation, unemployment insurance or other
social security or retirement benefits or obligations, or to secure
the performance of bids, trade contracts, leases, public or statutory
obligations, surety or appeal bonds and other obligations of a like
nature incurred in the ordinary course of business.
iv. Liens disclosed in the Disclosure Schedule.
v. Liens securing the purchase price of equipment or filed in
connection with leases of equipment.
vi. Liens granted to operators of mining joint ventures to
secure the obligations of Related Persons that are not operators.
vii. Liens granted by Borrower pursuant to the Surety Agreement
in favor of the Surety on cash collateral held by the
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Surety in an aggregate amount not to exceed $10,000,000 at any time,
so long as the Surety has executed and delivered the Subordination
Agreement.
viii. subordinated Liens granted by Related Persons pursuant
to the Surety Agreement in favor of the Surety, so long as the Surety
has executed and delivered the Subordination Agreement and such
Related Person has granted to Agent a first priority Lien in the
property to be encumbered by the subordinated Lien.
(c) LIMITATION ON MERGERS, ISSUANCES OF SECURITIES. Except as
expressly provided in this subsection no Related Person will merge or
consolidate with or into any other business entity. Any Person may be
merged into Borrower, so long as Borrower is the surviving business entity,
and any Subsidiary of Borrower, including Material Subsidiaries, may be
merged into or consolidated with i. another Subsidiary of Borrower, so long
as a Subsidiary Guarantor is the surviving business entity, or
ii. Borrower, so long as Borrower is the surviving business entity.
Borrower will not issue any securities other than Permitted Debt and shares
of its common stock and any options or warrants giving the holders thereof
only the right to acquire such shares. No Material Subsidiary of Borrower
will issue any additional shares of its capital stock or other securities
or any options, warrants or other rights to acquire such additional shares
or other securities except to Borrower and only to the extent not otherwise
forbidden under the terms hereof. No Material Subsidiary of Borrower which
is a partnership will allow any diminution of Borrower's interest (direct
or indirect) therein.
(d) LIMITATION ON SALES OF PROPERTY. No Related Person will sell,
transfer, lease, exchange, alienate or dispose of any of its material
assets or properties or any material interest therein except:
i. equipment which is worthless or obsolete or which is replaced
by equipment of equal suitability and value or is sold in the ordinary
course of business.
ii. inventory which is sold in the ordinary course of business
on ordinary trade terms.
iii. properties or assets, or interests therein, the value of
which does not exceed in the aggregate ten million dollars
($10,000,000) during any Fiscal Year; provided that immediately upon
any such sale the Total Debt to Cash Earnings Ratio shall be
recalculated excluding the Cash Earnings attributable to the
properties and assets so sold (excluding any gain or including any
losses attributable to such sale).
iv. the transfer of the Subject Properties from Borrower to the
LLC.
Neither Borrower nor any of Borrower's Subsidiaries will sell, transfer or
otherwise dispose of capital stock of any of Borrower's Subsidiaries except
that any Material Subsidiary of Borrower may sell or issue its own capital
stock to the extent not otherwise prohibited hereunder. No Related Person
will discount, sell, pledge or assign any notes payable to it, accounts
receivable or future income except to the extent expressly permitted under
the Loan Documents.
(e) LIMITATION ON DIVIDENDS AND REDEMPTIONS. No Related Person will
declare or pay any dividends on, or make any other distribution in respect
of, any class of its capital stock or any partnership or other interest in
it, nor will any Related Person directly or indirectly make
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any capital contribution to or purchase, redeem, acquire or retire any
shares of the capital stock of or partnership interests in any Related
Person (whether such interests are now or hereafter issued, outstanding or
created), or cause or permit any reduction or retirement of the capital
stock of any Related Person, except as expressly provided in this section.
Such dividends, distributions, contributions, purchases, redemptions,
acquisitions, retirements or reductions may be made by the Related Persons
without limitation, to Borrower; and to Subsidiary Guarantors. In addition
to the foregoing each Related Person may declare and pay to any Persons
with respect to common or preferred stock (x) cash dividends so long as no
Default or Event of Default has occurred and is continuing, and (y)
dividends payable only in common stock, so long as no Related Person's
interest in any of its Subsidiaries is thereby reduced. If no Default or
Event of Default has occurred and is continuing, Borrower may pay dividends
on its preferred stock.
(f) LIMITATION ON INVESTMENTS AND NEW BUSINESSES. No Related Person
will
i. make any expenditure or commitment or incur any
obligation or enter into or engage in any transaction except in the
ordinary course of business,
ii. engage directly or indirectly in any business or conduct
any operations except in connection with or incidental to its present
businesses and operations, or
iii. make any acquisitions of or capital contributions to or
other investments in any Person, other than Permitted Investments.
(g) LIMITATION ON CREDIT EXTENSIONS. Except for Permitted
Investments, no Related Person will extend credit, make advances or make
loans other than
i. normal and prudent extensions of credit to customers
buying goods and services in the ordinary course of business, which
extensions shall not be for longer periods than those extended by
similar businesses operated in a normal and prudent manner,
ii. loans to Borrower or to any Subsidiary Guarantor,
iii. loans in an aggregate outstanding principal amount not
to exceed $1,000,000 to third parties.
(h) TRANSACTIONS WITH AFFILIATES. No Related Person will engage in
any material transaction with any of its Affiliates on terms which are less
favorable to it than those which would have been obtainable at the time in
arm's-length dealing with Persons other than such Affiliates, provided that
such restriction shall not apply to transactions among Borrower and its
wholly owned Subsidiaries.
(i) ERISA PLANS. No Related Person will incur any obligation to
contribute to any "multiemployer plan" as defined in Section 4001 of ERISA.
(j) FISCAL YEAR. Neither Borrower nor any Subsidiary Guarantor will
change its fiscal year.
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(k) WORKING CAPITAL AND CURRENT RATIO. The ratio of Borrower's
Consolidated current assets to Borrower's Consolidated current liabilities
will never be less than 1.5 to 1.0. For purposes of this subsection,
Borrower's Consolidated current liabilities will be calculated without
including any payments of principal on the Note which are required to be
repaid within one year from the time of calculation.
(l) FIXED CHARGE COVERAGE RATIO. The ratio of (1) Borrower's
Consolidated EBITDA as of the end of each Fiscal Quarter to (2) Borrower's
Consolidated Fixed Charges as of the end of such Fiscal Quarter will never
be less than (A) 1.25 to 1.0 from the date hereof until December 31, 1997;
(B) 1.00 to 1.00 from January 1, 1998 until December 31, 1998; (C) 1.25 to
1.00 from January 1, 1999 until December 31, 1999; and (D) 1.5 to 1.0 at
any time after December 31, 1999.
(m) TANGIBLE NET WORTH. Borrower's Consolidated Tangible Net Worth
as of the end of any Fiscal Quarter ending after the date hereof will not
be less than the sum of i. $150,000,000, plus ii. 50% of Borrower's
Consolidated net income earned during the period from January 1, 1997 to
the end of such Fiscal Quarter, if positive, or zero, if negative, plus
iii. 100% of the net proceeds from the issuance of equity securities of
Borrower during the period from July 1, 1997 to the end of such Fiscal
Quarter.
As used in this subsection (m), the following terms shall have the meanings
set forth below:
(A) "Borrower's Consolidated Debt" means all Consolidated liabilities
and similar balance sheet items of Borrower, together with all Funded Debt
of any Related Person.
(B) "Borrower's Consolidated Tangible Net Worth" means the remainder
of (x) all Consolidated Assets of Borrower, other than intangible assets
(including without limitation as intangible assets such assets as patents,
copyrights, licenses, franchises, goodwill, trade names, trade secrets and
leases other than oil, gas or mineral leases or leases required to be
capitalized under GAAP), minus (y) Borrower's Consolidated Date.
ARTICLE VI - BANK ACCOUNTS, ETC.
Section 6.1 BANK ACCOUNTS; OFFSET. To secure the repayment of the
Obligations Borrower and each Subsidiary Guarantor hereby grants to Agent and
each Lender and to each financial institution which hereafter acquires a
participation or other interest in any Loan or Note (in this section called a
"Participant") a security interest, a lien, and a right of offset, each of which
shall be in addition to all other interests, liens, and rights of Agent or any
Lender or Participant at common law, under the Loan Documents, or otherwise, and
each of which shall be upon and against (a) any and all moneys, securities or
other property (and the proceeds therefrom) of Borrower or such Subsidiary
Guarantor now or hereafter held or received by or in transit to Agent or any
Lender or Participant from or for the account of Borrower or such Subsidiary
Guarantor, whether for safekeeping, custody, pledge, transmission, collection or
otherwise, (b) any and all deposits (general or special, time or demand,
provisional or final) of Borrower or such Subsidiary Guarantor with Agent or any
Lender or Participant, and (c) any other credits and claims of Borrower or such
Subsidiary Guarantor at any time existing against Agent or any Lender or
Participant, including claims under certificates of deposit. Upon the
occurrence of any Default, each of Agent and Lenders and Participants is hereby
authorized to foreclose upon, offset, appropriate, and apply, at any time and
from time to time, without notice to Borrower or any Subsidiary Guarantor, any
and all items hereinabove referred to against the Obligations then due and
payable.
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ARTICLE VIA - GUARANTY
Section 6A.1 GUARANTY.
(a) Each Subsidiary Guarantor hereby irrevocably, absolutely, and
unconditionally guarantees to Lenders the prompt, complete, and full
payment when due, and no matter how the same shall become due, of all
Obligations. Without limiting the generality of the foregoing, each
Subsidiary Guarantor's liability hereunder shall extend to and include all
post-petition interest, expenses, and other duties and liabilities of
Borrower described above in this subsection (a), or below in the following
subsection (b), which would be owed by Borrower but for the fact that they
are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization, or similar proceeding involving Borrower.
(b) Each Subsidiary Guarantor hereby irrevocably, absolutely, and
unconditionally guarantees to Lenders the prompt, complete and full
performance, when due, and no matter how the same shall become due, of all
obligations and undertakings of Borrower to Lenders under, by reason of, or
pursuant to any of the Loan Documents.
(c) If Borrower shall for any reason fail to pay any Obligation, as
and when such Obligation shall become due and payable, whether at its
stated maturity, as a result of the exercise of any power to accelerate, or
otherwise, each Subsidiary Guarantor will, forthwith upon demand by Agent,
pay such Obligation in full to Agent for distribution to Lenders. If
Borrower shall for any reason fail to perform promptly any Obligation, each
Subsidiary Guarantor will, forthwith upon demand by Agent, cause such
Obligation to be performed or, if specified by Agent or Lenders, provide
sufficient funds, in such amount and manner as Agent shall in good faith
determine, for the prompt, full and faithful performance of such Obligation
by Agent or such other Person as Agent shall designate.
(d) If either Borrower or any Subsidiary Guarantor fails to pay or
perform any Obligation as described in the immediately preceding
subsections (a), (b), or (c), each Subsidiary Guarantor will incur the
additional obligation to pay to Agent, and each Subsidiary Guarantor will
forthwith upon demand by Agent pay to Agent for distribution to Lenders,
the amount of any and all expenses, including fees and disbursements of
Agent's and Lender's counsel and of any experts or agents retained by
Agent, which Agent or Lenders may incur as a result of such failure.
(e) Notwithstanding the foregoing or any other provisions of this
Agreement, it is agreed and understood that no Subsidiary Guarantor shall
be required to pay hereunder at any time more than the Maximum Guaranteed
Amount determined with respect to such Subsidiary Guarantor as of such
time. Each Subsidiary Guarantor agrees that the Obligations may at any
time exceed the sum of the Maximum Guaranteed Amount plus the aggregate
maximum amount of all Obligations of all other Subsidiary Guarantors,
without affecting or impairing the Obligations of such Subsidiary
Guarantor.
Section 6A.2 UNCONDITIONAL GUARANTY.
(a) No action which Agent or Lenders may take or omit to take in
connection with any of the Loan Documents, any of the Obligations (or any
other indebtedness owing by Borrower to Agent or Lenders), or any
Collateral, and no course of dealing of Agent or Lenders with any other
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Person, shall release or diminish any Subsidiary Guarantor's obligations,
liabilities, agreements or duties hereunder, affect any Subsidiary
Guarantor's guaranty any way, or afford any Subsidiary Guarantor any
recourse against Agent or Lenders, regardless of whether any such action or
inaction may increase any risks to or liabilities of Agent or Lender or any
other Person or increase any risk to or diminish any safeguard of any
Collateral. Without limiting the foregoing, each Subsidiary Guarantor
hereby expressly agrees that Agent or Lenders may, from time to time,
without notice to or the consent of any Subsidiary Guarantor, do any or all
of the following:
i. Amend, change or modify, in whole or in part, any one or more
of the Loan Documents and give or refuse to give any waivers or other
indulgences with respect thereto.
ii. Neglect, delay, fail, or refuse to take or prosecute any
action for the collection or enforcement of any of the Obligations, to
foreclose or take or prosecute any action in connection with any
Collateral or Loan Document, to bring suit against any Person, or to
take any other action concerning the Obligations or the Loan
Documents.
iii. Accelerate, change, rearrange, extend, or renew the time,
terms, or manner for payment or performance of any one or more of the
Obligations.
iv. Compromise or settle any unpaid or unperformed Obligation or
any other obligation or amount due or owing, or claimed to be due or
owing, under any one or more of the Loan Documents.
v. Take, exchange, amend, eliminate, surrender, release, or
subordinate any or all Collateral for any or all of the Obligations,
accept additional or substituted Collateral therefor, and perfect or
fail to perfect Lenders' rights in any or all Collateral.
vi. Discharge, release, substitute or add obligors.
vii. Apply all monies received from obligors or others, or from
any Collateral for any of the Obligations, as Agent or Lenders may
determine to be in its best interest, without in any way being
required to xxxxxxxx Collateral or assets or to apply all or any part
of such monies upon any particular Obligations.
(b) No action or inaction of any Person, and no change of law or
circumstances, shall release or diminish any Subsidiary Guarantor's
obligations, liabilities, agreements, or duties hereunder, affect this
guaranty in any way, or afford any Subsidiary Guarantor any recourse
against Agent or Lenders. Without limiting the foregoing, the obligations,
liabilities, agreements, and duties of Subsidiary Guarantors under this
Guaranty shall not be released, diminished, impaired, reduced, or affected
by the occurrence of any or all of the following from time to time, even if
occurring without notice to or without the consent of any Subsidiary
Guarantor:
i. Any voluntary or involuntary liquidation, dissolution, sale
of all or substantially all assets, marshalling of assets or
liabilities, receivership, conservatorship, assignment for the benefit
of creditors, insolvency, bankruptcy, reorganization,
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arrangement, or composition of Borrower or any Subsidiary Guarantor or
any other proceedings involving Borrower or any Subsidiary Guarantor
or any of the assets of Borrower or any Subsidiary Guarantor under
laws for the protection of debtors, or any discharge, impairment,
modification, release, or limitation of the liability of, or stay of
actions or lien enforcement proceedings against, Borrower or any
Subsidiary Guarantor, any properties of Borrower or any Subsidiary
Guarantor, or the estate in bankruptcy of Borrower or any Guarantor in
the course of or resulting from any such proceedings.
ii. The failure by Agent or Lenders to file or enforce a claim
in any proceeding described in the immediately preceding subsection
(i) or to take any other action in any proceeding to which Borrower or
any Subsidiary Guarantor is a party.
iii. The release by operation of law of Borrower or any
Subsidiary Guarantor from any of the Obligations or any other
obligations to Lender.
iv. The invalidity, deficiency, illegality, or unenforceability
of any of the Obligations or the Loan Documents, in whole or in part,
any bar by any statute of limitations or other law of recovery on any
of the Obligations, or any defense or excuse for failure to perform on
account of force majeure, act of God, casualty, impossibility,
impracticability, or other defense or excuse whatsoever.
v. The failure of Borrower or any Subsidiary Guarantor or any
other Person to sign any guaranty or other instrument or agreement
within the contemplation of Borrower or any Subsidiary Guarantor,
Agent or Lender.
vi. The fact that any Subsidiary Guarantor may have incurred
directly part of the Obligations or is otherwise primarily liable
therefor.
vii. Without limiting any of the foregoing, any fact or event
(whether or not similar to any of the foregoing) which in the absence
of this provision would or might constitute or afford a legal or
equitable discharge or release of or defense to a guarantor or surety
other than the actual payment and performance by any Subsidiary
Guarantor under this guaranty.
(c) Agent and Lenders may invoke the benefits of this Article against
any Subsidiary Guarantor before pursuing any remedies against Borrower or
any other Subsidiary Guarantor or any other Person. Agent or Lenders may
maintain an action against any Subsidiary Guarantor hereunder without
joining Borrower or any other Subsidiary Guarantor therein and without
bringing separate action against Borrower or any other Subsidiary
Guarantor.
(d) If any payment to Agent or Lenders by Borrower or any Subsidiary
Guarantor is held to constitute a preference or a voidable transfer under
applicable state or federal laws, or if for any other reason Agent or any
Lender is required to refund such payment to the payor thereof or to pay
the amount thereof to any other Person, such payment to Agent or Lenders
shall not constitute a release of any guarantor from any liability
hereunder, and each guarantor agrees to pay such amount to Agent or Lenders
on demand and agrees and acknowledges that this guaranty shall continue to
be effective or shall be reinstated, as the case may be, to the extent of
any such payment or payments. Any transfer by subrogation which is made as
contemplated in Section 6A.6 prior to any such payment or payments shall
(regardless of
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the terms of such transfer) be automatically voided upon the making of any
such payment or payments, and all rights so transferred shall thereupon
revert to and be vested in Agent and Lenders.
(e) This is a continuing guaranty and shall apply to and cover all
Obligations and renewals and extensions thereof and substitutions therefor
from time to time.
Section 6A.3 WAIVER. Each Subsidiary Guarantor hereby waives, with
respect to the Obligations, this guaranty, and the other Loan Documents:
(a) notice of the incurrence of any Obligation by Borrower.
(b) notice that Agent, Lenders, Borrower, any Subsidiary Guarantor, or
any other Person has taken or omitted to take any action under any Loan
Document or any other agreement or instrument relating thereto or relating
to any Obligation.
(c) notice of acceptance of this guaranty and all rights of Subsidiary
Guarantor under Section 34.02 of the Texas Business and Commerce Code.
(d) demand, presentment for payment, and notice of demand, dishonor,
nonpayment, or nonperformance.
(e) notice of intention to accelerate, notice of acceleration,
protest, notice of protest, and all other notices of any kind whatsoever.
Section 6A.4 NO SUBROGATION. No Subsidiary Guarantor shall have any
right of subrogation with respect hereto (including any right of subrogation
under Section 34.04 of the Texas Business and Commerce Code). Each Subsidiary
Guarantor hereby waives any rights to enforce any remedy which such Subsidiary
Guarantor may have against Borrower with respect to its obligations under this
Article VI or under applicable laws. Each Subsidiary Guarantor hereby
irrevocably agrees, to the fullest extent permitted by law, that it will not
exercise (and herein waives) any rights against Borrower or any other Person
which it may acquire by way of subrogation, contribution, reimbursement,
indemnification or exoneration under or with respect to this Agreement, the
other Loan Documents or applicable law, by any payment made hereunder or
otherwise. If the foregoing waivers are adjudicated unenforceable by a court of
competent jurisdiction, then each Subsidiary Guarantor agrees that no liability
or obligation of Borrower that shall accrue by virtue of any right to
subrogation, contribution, indemnity, reimbursement or exoneration shall be
paid, nor shall any such liability or obligation be deemed owed, until all of
the Obligations shall have been paid in full.
Section 6A.5. SUBORDINATION. Each Subsidiary Guarantor hereby
subordinates and makes inferior to the Obligations any and all indebtedness now
or at any time hereafter owed by Borrower to any Subsidiary Guarantor. Each
Subsidiary Guarantor agrees that after the occurrence of any Default or Event of
Default it will neither permit Borrower to repay such indebtedness or any part
thereof nor accept payment from Borrower of such indebtedness or any part
thereof without the prior written consent of Majority Lender. If any Subsidiary
Guarantor receives any such payment without the prior written consent of
Majority Lenders, the amount so paid shall be held in trust for the benefit of
Agent and Lenders, shall be segregated from the other funds of such Subsidiary
Guarantor, and shall forthwith be paid over to Agent and Lenders to be held by
Agent and Lenders as collateral for, or then or at any time thereafter applied
in whole or in part by Agent and Lenders against, all or any portions of the
Obligations, whether matured or unmatured, in such order as Agent and Lenders
shall elect.
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ARTICLE VII - EVENTS OF DEFAULT AND REMEDIES
Section 7.1 EVENTS OF DEFAULT. Each of the following events constitutes
an Event of Default under this Agreement:
(a) Any Related Person fails to pay any Obligation constituting
interest within five (5) days after the date when due or any Related Person
fails to pay any other Obligation when due and payable in each case,
whether at a date for the payment of a fixed installment or as a contingent
or other payment becomes due and payable or as a result of acceleration or
otherwise;
(b) Any "default" or "event of default" occurs under any Loan
Document which defines either such term, and the same is not remedied
within the applicable period of grace (if any) provided in such Loan
Document;
(c) Any Related Person fails to duly observe, perform or comply with
any covenant, agreement or provision of Section 5.1(d), Section 5.2 or
Section 6A.1;
(d) Any Related Person fails (other than as referred to in
subsections (a), (b) or (c) above) to duly observe, perform or comply with
any covenant, agreement, condition or provision of any Loan Document, and
such failure remains unremedied for a period of thirty (30) days after
notice of such failure is given by Agent to Borrower;
(e) Any representation or warranty previously, presently or hereafter
made in writing by or on behalf of any Related Person in connection with
any Loan Document shall prove to have been false or incorrect in any
material respect on any date on or as of which made, or any Loan Document
at any time ceases to be valid, binding and enforceable as warranted in
Section 4.1(e) for any reason other than its release or subordination by
Agent;
(f) Any Related Person fails to duly observe, perform or comply with
any agreement with any Person or any term or condition of any instrument,
if such agreement or instrument is materially significant to Borrower or
materially significant to any Subsidiary Guarantor, and such failure is not
remedied within the applicable period of grace (if any) provided in such
agreement or instrument;
(g) Any Related Person i. fails to pay any portion, when such portion
is due, of any of its Debt in excess of $1,000,000, or ii. breaches or
defaults in the performance of any agreement or instrument by which any
such Debt is issued, evidenced, governed, or secured, which breach would
entitle the holder thereof to accelerate such Debt, and any such failure,
breach or default continues beyond any applicable period of grace provided
therefor;
(h) Any Related Person:
i. suffers the entry against it of a judgment, decree or order
for relief by a court of competent jurisdiction in an involuntary
proceeding commenced under any applicable bankruptcy, insolvency or
other similar law of any jurisdiction now or hereafter in effect,
including the federal Bankruptcy Code, as from time to time amended,
or has any such proceeding commenced against it which remains
undismissed for a period of thirty days; or
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ii. commences a voluntary case under any applicable bankruptcy,
insolvency or similar law now or hereafter in effect, including the
federal Bankruptcy Code, as from time to time amended; or applies for
or consents to the entry of an order for relief in an involuntary case
under any such law; or makes a general assignment for the benefit of
creditors; or fails generally to pay (or admits in writing its
inability to pay) its debts as such debts become due; or takes
corporate or other action to authorize any of the foregoing; or
iii. suffers the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of all or a substantial part of its assets in a
proceeding brought against or initiated by it, and such appointment is
neither made ineffective nor discharged within thirty days after the
making thereof, or such appointment or taking possession is at any
time consented to, requested by, or acquiesced to by it; or
iv. suffers the entry against it of a final judgment for the
payment of money in excess of $1,000,000 (not covered by insurance
satisfactory to Agent in its discretion), unless the same is
discharged within thirty days after the date of entry thereof or an
appeal or appropriate proceeding for review thereof is taken within
such period and a stay of execution pending such appeal is obtained;
or
v. suffers a writ or warrant of attachment or any similar
process to be issued by any court against all or any substantial part
of its property, and such writ or warrant of attachment or any similar
process is not stayed or released prior to the seizure thereunder of
any such property (and in any event within thirty days after the entry
or levy thereof or after any stay is vacated or set aside);
(i) Either i. any "accumulated funding deficiency" (as defined in
Section 412(a) of the Internal Revenue Code of 1986, as amended) in excess
of $3,000,000 exists with respect to any ERISA Plan, whether or not waived
by the Secretary of the Treasury or his delegate, or ii. any Termination
Event occurs with respect to any ERISA Plan and the then current value of
such ERISA Plan's benefit liabilities exceeds the then current value of
such ERISA Plan's assets available for the payment of such benefit
liabilities by more than $3,000,000 (or in the case of a Termination Event
involving the withdrawal of a substantial employer, the withdrawing
employer's proportionate share of such excess exceeds such amount); and
(j) Any material adverse change occurs in Borrower's Consolidated
financial condition or results of operations; and
(k) an `Event of Default' occurs and is continuing under the
Indenture or under the Loan Agreement;
(l) any party to the Indenture fails to observe or perform any of the
covenants, conditions, or agreements of the Indenture or the Bonds in any
material respect, or any party to the Loan Agreement fails to observe or
perform any of the covenants, conditions, or agreements of the Loan
Agreement in any material respect, and such failure has not been waived or
not cured within any applicable grace period; and
(m) a Lien is placed on any property of any Related Person other than
a Lien described in Section 5.2(b).
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Upon the occurrence of an Event of Default described in subsection (h)(i),
(h)(ii) or (h)(iii) of this section with respect to Borrower, all of the
Obligations shall thereupon be immediately due and payable, without demand,
presentment, notice of demand or of dishonor and nonpayment, protest, notice of
protest, notice of intention to accelerate, declaration or notice of
acceleration, or any other notice or declaration of any kind, all of which are
hereby expressly waived by Borrower and each Related Person who at any time
ratifies or approves this Agreement. During the continuance of any other Event
of Default, Agent at any time and from time to time may (and upon written
instructions from Majority Lenders, Agent shall), without notice to Borrower or
any other Related Person, declare any or all of the Obligations immediately due
and payable, and all such Obligations shall thereupon be immediately due and
payable, without demand, presentment, notice of demand or of dishonor and
nonpayment, protest, notice of protest, notice of intention to accelerate,
declaration or notice of acceleration, or any other notice or declaration of any
kind, all of which are hereby expressly waived by Borrower and each Related
Person who at any time ratifies or approves this Agreement. After any such
acceleration (whether automatic or due to any declaration by Agent), any
obligation of any Lender to make any further Loans shall be permanently
terminated.
Section 7.2 REMEDIES. If any Default shall occur and be continuing (a)
Agent shall, upon written instructions from Majority Lenders, protect and
enforce Lenders' rights under the Loan Documents by any appropriate proceedings
and enforce the payment of any Obligations due Lenders or enforce any other
legal or equitable right which Lenders may have, provided Agent shall not be
required to exercise any discretion or take any action which exposes it to a
risk of personal liability that it considers unreasonable or which is contrary
to the Loan Documents or to applicable law, and (b) each Lender may protect and
enforce its rights under the Loan Documents by any appropriate proceedings,
including proceedings for specific performance of any covenant or agreement
contained in any Loan Document, and may enforce the payment of any Obligations
due it or enforce any other legal or equitable right which it may have. All
rights, remedies and powers conferred upon Agent and Lenders under the Loan
Documents shall be deemed cumulative and not exclusive of any other rights,
remedies or powers available under the Loan Documents or at law or in equity.
Section 7.3 INDEMNITY. BORROWER AGREES TO INDEMNIFY AGENT AND EACH
LENDER, UPON DEMAND, FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS,
CLAIMS, LOSSES, DAMAGES, PENALTIES, FINES, ACTIONS, JUDGMENTS, SUITS,
SETTLEMENTS, COSTS, EXPENSES OR DISBURSEMENTS (INCLUDING REASONABLE FEES OF
ATTORNEYS, ACCOUNTANTS, EXPERTS AND ADVISORS) OF ANY KIND OR NATURE WHATSOEVER
(IN THIS SECTION COLLECTIVELY CALLED "LIABILITIES AND COSTS") WHICH TO ANY
EXTENT (IN WHOLE OR IN PART) MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST
AGENT OR SUCH LENDER GROWING OUT OF, RESULTING FROM OR IN ANY OTHER WAY
ASSOCIATED WITH ANY OF THE LOAN DOCUMENTS AND THE TRANSACTIONS AND EVENTS
(INCLUDING THE ENFORCEMENT OR DEFENSE THEREOF) AT ANY TIME ASSOCIATED THEREWITH
OR CONTEMPLATED THEREIN (INCLUDING ANY VIOLATION OR NONCOMPLIANCE WITH ANY
ENVIRONMENTAL LAWS BY ANY RELATED PERSON OR ANY LIABILITIES OR DUTIES OF ANY
RELATED PERSON, AGENT OR ANY LENDER WITH RESPECT TO HAZARDOUS MATERIALS FOUND IN
OR RELEASED INTO THE ENVIRONMENT). THE FOREGOING INDEMNIFICATION SHALL APPLY
WHETHER OR NOT SUCH LIABILITIES AND COSTS ARE IN ANY WAY OR TO ANY EXTENT OWED,
IN WHOLE OR IN PART, UNDER CLAIM OR THEORY OF STRICT LIABILITY, OR ARE CAUSED,
IN WHOLE OR IN PART, BY ANY NEGLIGENT ACT OR OMISSION OF ANY KIND BY AGENT,
ISSUING BANK OR ANY LENDER.
NOTWITHSTANDING ANYTHING ELSE CONTAINED IN THIS AGREEMENT, NEITHER AGENT,
ISSUING BANK NOR ANY LENDER SHALL BE ENTITLED UNDER THIS SECTION TO RECEIVE
INDEMNIFICATION FOR THAT PORTION, IF ANY, OF ANY LIABILITIES AND COSTS WHICH IS
PROXIMATELY CAUSED BY ITS OWN INDIVIDUAL GROSS NEGLIGENCE OR WILLFUL MISCONDUCT,
AS DETERMINED IN A FINAL JUDGMENT. If any Person (including
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Borrower or any of its Affiliates) ever alleges such gross negligence or willful
misconduct by Agent, Issuing Bank or any Lender, the indemnification provided
for in this section shall nonetheless be paid upon demand, subject to later
adjustment or reimbursement, until such time as a court of competent
jurisdiction enters a final judgment as to the extent and effect of the alleged
gross negligence or willful misconduct. As used in this section the terms
"Agent," "Issuing Bank" and "Lender" shall refer not only to the Persons
designated as such in Section 1.1 but also to each director, officer, agent,
attorney, employee, representative and Affiliate of such Person.
ARTICLE VIII - AGENT
Section 8.1 APPOINTMENT, POWERS, AND IMMUNITIES. Each Lender hereby
irrevocably appoints and authorizes Agent to act as its agent under this
Agreement and the other Loan Documents with such powers and discretion as are
specifically delegated to Agent by the terms of this Agreement and the other
Loan Documents, together with such other powers as are reasonably incidental
thereto. Agent (which term as used in this sentence and in Section 9.5 and the
first sentence of Section 9.6 hereof shall include its affiliates and its own
and its affiliates' officers, directors, employees, and agents): (a) shall not
have any duties or responsibilities except those expressly set forth in this
Agreement and shall not be a trustee or fiduciary for any Lender; (b) shall not
be responsible to Lenders for any recital, statement, representation, or
warranty (whether written or oral) made in or in connection with any Loan
Document or any certificate or other document referred to or provided for in, or
received by any of them under, any Loan Document, or for the value, validity,
effectiveness, genuineness, enforceability, or sufficiency of any Loan Document,
or any other document referred to or provided for therein or for any failure by
any Related Person or any other Person to perform any of its obligations
thereunder; (c) shall not be responsible for or have any duty to ascertain,
inquire into, or verify the performance or observance of any covenants or
agreements by any Related Person or the satisfaction of any condition or to
inspect the property (including the books and records) of any Related Person or
any of its Subsidiaries or affiliates; (d) shall not be required to initiate or
conduct any litigation or collection proceedings under any Loan Document; and
(e) shall not be responsible for any action taken or omitted to be taken by it
under or in connection with any Loan Document, except for its own gross
negligence or willful misconduct. Agent may employ agents and attorneys-in-fact
and shall not be responsible for the negligence or misconduct of any such agents
or attorneys-in-fact selected by it with reasonable care.
Section 8.2 RELIANCE BY AGENT. Agent shall be entitled to rely upon any
certification, notice, instrument, writing, or other communication (including,
without limitation, any thereof by telephone or telecopy) believed by it to be
genuine and correct and to have been signed, sent or made by or on behalf of the
proper Person or Persons, and upon advice and statements of legal counsel
(including counsel for any Related Person), independent accountants, and other
experts selected by Agent. Agent may deem and treat the payee of any Note as
the holder thereof for all purposes hereof unless and until Agent receives and
accepts an Assignment and Acceptance executed in accordance with Section 10.5
hereof. As to any matters not expressly provided for by this Agreement, Agent
shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Majority Lenders,
and such instructions shall be binding on all of Lenders; PROVIDED, HOWEVER,
that Agent shall not be required to take any action that exposes Agent to
personal liability or that is contrary to any Loan Document or applicable law or
unless it shall first be indemnified to its satisfaction by Lenders against any
and all liability and expense which may be incurred by it by reason of taking
any such action.
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Section 8.3 DEFAULTS. Agent shall not be deemed to have knowledge or
notice of the occurrence of a Default or Event of Default unless Agent has
received written notice from a Lender or Borrower specifying such Default or
Event of Default and stating that such notice is a "Notice of Default". In the
event that Agent receives such a notice of the occurrence of a Default or Event
of Default, Agent shall give prompt notice thereof to Lenders. Agent shall
(subject to Section 9.2 hereof) take such action with respect to such Default or
Event of Default as shall reasonably be directed by the Majority Lenders,
PROVIDED THAT, unless and until Agent shall have received such directions, Agent
may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default or Event of Default as it shall deem
advisable in the best interest of Lenders.
Section 8.4 RIGHTS AS LENDER. With respect to its Commitment and the
Loans made by it, NationsBank (and any successor acting as Agent) in its
capacity as a Lender hereunder shall have the same rights and powers hereunder
as any other Lender and may exercise the same as though it were not acting as
Agent, and the term "Lender" or "Lenders" shall, unless the context otherwise
indicates, include Agent in its individual capacity. NationsBank (and any
successor acting as Agent) and its affiliates may (without having to account
therefor to any Lender) accept deposits from, lend money to, make investments
in, provide services to, and generally engage in any kind of lending, trust, or
other business with any Related Person or any of its Subsidiaries or affiliates
as if it were not acting as Agent, and NationsBank (and any successor acting as
Agent) and its affiliates may accept fees and other consideration from any
Related Person or any of its Subsidiaries or affiliates for services in
connection with this Agreement or otherwise without having to account for the
same to Lenders.
Section 8.5 INDEMNIFICATION. Lenders agree to indemnify Agent (to the
extent not reimbursed under Section 8.3 hereof, but without limiting the
obligations of Borrower under such Section) ratably in accordance with their
respective Commitments, for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses (including
attorneys' fees), or disbursements of any kind and nature whatsoever that may be
imposed on, incurred by or asserted against Agent (including by any Lender) in
any way relating to or arising out of any Loan Document or the transactions
contemplated thereby or any action taken or omitted by Agent under any Loan
Document (INCLUDING ANY OF THE FOREGOING ARISING FROM THE NEGLIGENCE OF AGENT);
PROVIDED that no Lender shall be liable for any of the foregoing to the extent
they arise from the gross negligence or willful misconduct of the Person to be
indemnified. Without limitation of the foregoing, each Lender agrees to
reimburse Agent promptly upon demand for its ratable share of any costs or
expenses payable by Borrower under Section 8.3, to the extent that Agent is not
promptly reimbursed for such costs and expenses by Borrower. The agreements
contained in this Section shall survive payment in full of the Loans and all
other amounts payable under this Agreement.
Section 8.6 NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender agrees
that it has, independently and without reliance on Agent or any other Lender,
and based on such documents and information as it has deemed appropriate, made
its own credit analysis of the Related Persons and their Subsidiaries and
decision to enter into this Agreement and that it will, independently and
without reliance upon Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under the Loan Documents.
Except for notices, reports, and other documents and information expressly
required to be furnished to Lenders by Agent hereunder, Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition, or business of any
Related Person or any of its Subsidiaries or affiliates that may come into the
possession of Agent or any of its affiliates.
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Section 8.7 RESIGNATION OF AGENT. Agent may resign at any time by
giving notice thereof to Lenders and Borrower. Upon any such resignation, the
Majority Lenders shall have the right to appoint a successor Agent with the
consent of Borrower, which consent shall not be unreasonably withheld. If no
successor Agent shall have been so appointed by the Majority Lenders and shall
have accepted such appointment within thirty (30) days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of Lenders, appoint a successor Agent which shall be a commercial bank organized
under the laws of the United States of America having combined capital and
surplus of at least $1,000,000,000 and which shall have experience lending to
oil and gas companies. Upon the acceptance of any appointment as Agent
hereunder by a successor, such successor shall thereupon succeed to and become
vested with all the rights, powers, discretion, privileges, and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article IX shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Agent.
Section 8.8 LENDERS' CREDIT DECISIONS. Each Lender acknowledges that it
has, independently and without reliance upon Agent or any other Lender, made its
own analysis of Borrower and the transactions contemplated hereby and its own
independent decision to enter into this Agreement and the other Loan Documents.
Each Lender also acknowledges that it will, independently and without reliance
upon Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Loan Documents.
Section 8.9 EXPENSES; INDEMNIFICATION.
(a) Borrower agrees to pay on demand all reasonable costs and expenses of
Agent in connection with the syndication, preparation, execution, delivery,
administration, modification, and amendment of this Agreement, the other Loan
Documents, and the other documents to be delivered hereunder, including, without
limitation, the reasonable fees and expenses of counsel for Agent (including the
cost of internal counsel) with respect thereto and with respect to advising
Agent as to its rights and responsibilities under the Loan Documents. Borrower
further agrees to pay on demand all costs and expenses of Agent and Lenders, if
any (including, without limitation, reasonable attorneys' fees and expenses and
the cost of internal counsel), in connection with the enforcement (whether
through negotiations, legal proceedings, or otherwise) of the Loan Documents and
the other documents to be delivered hereunder.
(b) Borrower agrees to indemnify and hold harmless Agent and each Lender
and each of their affiliates and their respective officers, directors,
employees, agents, and advisors (each, an "INDEMNIFIED PARTY") from and against
any and all claims, damages, losses, liabilities, costs, and expenses
(including, without limitation, reasonable attorneys' fees) that may be incurred
by or asserted or awarded against any Indemnified Party, in each case arising
out of or in connection with or by reason of (including, without limitation, in
connection with any investigation, litigation, or proceeding or preparation of
defense in connection therewith) the Loan Documents, any of the transactions
contemplated herein or the actual or proposed use of the proceeds of the Loans
(INCLUDING ANY OF THE FOREGOING ARISING FROM THE NEGLIGENCE OF THE INDEMNIFIED
PARTY), EXCEPT TO THE EXTENT SUCH CLAIM, DAMAGE, LOSS, LIABILITY, COST, OR
EXPENSE IS FOUND IN A FINAL, NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT
JURISDICTION TO HAVE RESULTED FROM SUCH INDEMNIFIED PARTY'S GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT and except to the extent that such claim, damage, loss,
liability, cost, or expense arises in a suit by one Lender against another
Lender in each case solely in its capacity as a "Lender" hereunder and not in
its capacity as Agent or Issuing Bank. In the
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case of an investigation, litigation or other proceeding to which the indemnity
in this Section 9.11 applies, such indemnity shall be effective whether or not
such investigation, litigation or proceeding is brought by Borrower, its
directors, shareholders or creditors or an Indemnified Party or any other Person
or any Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated hereby are consummated.
(c) Without prejudice to the survival of any other agreement of Borrower
hereunder, the agreements and obligations of Borrower contained in this Section
9.11 shall survive the payment in full of the Loans and all other amounts
payable under this Agreement.
Section 8.10 RIGHTS AS LENDER. In its capacity as a Lender, Agent shall
have the same rights and obligations as any Lender and may exercise such rights
as though it were not Agent. Agent may accept deposits from, lend money to, act
as Trustee under indentures of, and generally engage in any kind of business
with any of the Related Persons or their Affiliates, all as if it were not Agent
hereunder and without any duty to account therefor to any other Lender.
Section 8.11 RIGHT OF SET-OFF; ADJUSTMENTS.
(a) Upon the occurrence and during the continuance of any Event of
Default, each Lender (and each of its affiliates) is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, 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
Lender (or any of its affiliates) to or for the credit or the account of the
Borrower against any and all of the obligations of the Borrower now or hereafter
existing under this Agreement and the Note held by such Lender, irrespective of
whether such Lender shall have made any demand under this Agreement or such Note
and although such obligations may be unmatured. Each Lender agrees promptly to
notify the Borrower after any such set-off and application made by such Lender;
PROVIDED, HOWEVER, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) that such Lender may have.
(b) If any Lender (a "BENEFITTED LENDER") shall at any time receive any
payment of all or part of the Loans owing to it, or interest thereon, or receive
any collateral in respect thereof (whether voluntarily or involuntarily, by set-
off, or otherwise), in a greater proportion than any such payment to or
collateral received by any other Lender, if any, in respect of such other
Lender's Loans owing to it, or interest thereon, such benefitted Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of each such other Lender's Loans owing to it, or shall provide such
other Lenders with the benefits of any such collateral, or the proceeds thereof,
as shall be necessary to cause such benefitted Lender to share the excess
payment or benefits of such collateral or proceeds ratably with each of Lenders;
PROVIDED, HOWEVER, that if all or any portion of such excess payment or benefits
is thereafter recovered from such benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest. The Borrower agrees that any Lender so
purchasing a participation from a Lender pursuant to this Section 9.13 may, to
the fullest extent permitted by law, exercise all of its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Person were the direct creditor of the Borrower in the amount of such
participation.
Section 8.12 INVESTMENTS. Whenever Agent in good faith determines that
it is uncertain about how to distribute to Lenders any funds which it has
received, or whenever Agent in good faith determines that there is any dispute
among Lenders about how such funds should be distributed, Agent may choose to
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defer distribution of the funds which are the subject of such uncertainty or
dispute. If Agent in good faith believes that the uncertainty or dispute will
not be promptly resolved, or if Agent is otherwise required to invest funds
pending distribution to Lenders, Agent shall invest such funds pending
distribution; all interest on any such investment shall be distributed upon the
distribution of such investment and in the same proportion and to the same
Persons as such investment. All moneys received by Agent for distribution to
Lenders (other than to the Person who is Agent in its separate capacity as a
Lender) shall be held by Agent pending such distribution solely as Agent for
such Lenders, and Agent shall have no equitable title to any portion thereof.
Section 8.13 BENEFIT OF ARTICLE VIII. The provisions of this Article
(other than the following Section 8.9) are intended solely for the benefit of
Agent and Lenders, and no Related Person shall be entitled to rely on any such
provision or assert any such provision in a claim or defense against Agent or
any Lender. Agent and Lenders may waive or amend such provisions as they desire
without any notice to or consent of Borrower or any Related Person.
Section 8.14 AGENCY/ADMINISTRATIVE FEE. To compensate Agent for
performing its duties under the Loan Documents and for expenses incurred by
Agent in connection with such performance, Borrower shall pay to Agent an agency
and administrative fee in an amount mutually agreed upon by Borrower and Agent.
ARTICLE IX - MISCELLANEOUS
Section 9.1 WAIVERS AND AMENDMENTS; ACKNOWLEDGEMENTS.
(a) WAIVERS AND AMENDMENTS. No failure or delay (whether by course
of conduct or otherwise) by Agent, Issuing Bank or any Lender in exercising
any right, power or remedy which Agent, Issuing Bank or such Lender may
have under any of the Loan Documents shall operate as a waiver thereof or
of any other right, power or remedy, nor shall any single or partial
exercise by Agent, Issuing Bank or such Lender of any such right, power or
remedy preclude any other or further exercise thereof or of any other
right, power or remedy. No failure or delay (whether by course of conduct
or otherwise) by Borrower in exercising any right, power or remedy which
Borrower may have under any of the Loan Documents shall operate as a waiver
thereof or of any other right, power or remedy, nor shall any single or
partial exercise by Borrower of any such right, power or remedy preclude
any other or further exercise thereof or of any other right, power or
remedy. No waiver of any provision of any Loan Document and no consent to
any departure therefrom shall ever be effective unless it is in writing and
signed as provided below in this section, and then such waiver or consent
shall be effective only in the specific instances and for the purposes for
which given and to the extent specified in such writing. No notice to or
demand on any Related Person shall in any case of itself entitle any
Related Person to any other or further notice or demand in similar or other
circumstances.
(b) NO WAIVER. No waiver of or supplement to this Agreement or the
other Loan Documents shall be valid or effective against any party hereto
unless the same is in writing and signed by i. if such party is Borrower,
by Borrower, ii. if such party is Agent, by Agent and iii. if such party is
Issuing Bank, by Issuing Bank, and (iv) if such party is a Lender, by
Majority Lenders or by Agent on behalf of Lenders with the written consent
of Majority Lenders (which consent regarding the termination of the Loan
Documents has already been given as provided in
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Section 9.7). Notwithstanding the foregoing or anything to the contrary
herein, Agent shall not, without the prior consent of each individual
Lender, execute and deliver on behalf of such Lender any waiver or
amendment which would: iv. waive any of the conditions specified in
Article III (provided that Agent may in its discretion withdraw any request
it has made under Section 3.2(f)), v. increase the amount of such Lender's
Percentage Share of the Maximum Loan Amount or subject such Lender to any
additional obligations, vi. reduce any fees hereunder, or the principal of,
or interest on, such Lender's Note, vii. postpone any date fixed for any
payment of any fees hereunder, or principal of, or interest on, such
Lender's Note, viii. amend the definition herein of "Majority Lenders" or
otherwise change the aggregate amount of Percentage Shares which is
required for Agent, Lenders or any of them to take any particular action
under the Loan Documents, or ix. release Borrower from its obligation to
pay such Lender's Note and Subsidiary Guarantor from its guaranty of such
payment.
(c) ACKNOWLEDGEMENTS AND ADMISSIONS. Borrower hereby represents,
warrants, acknowledges and admits that i. it has been advised by counsel in
the negotiation, execution and delivery of the Loan Documents to which it
is a party, ii. it has made an independent decision to enter into this
Agreement and the other Loan Documents to which it is a party, without
reliance on any representation, warranty, covenant or undertaking by Agent,
Issuing Bank or any Lender, whether written, oral or implicit, other than
as expressly set out in this Agreement or in another Loan Document
delivered on or after the date hereof, iii. there are no representations,
warranties, covenants, undertakings or agreements by Agent, Issuing Bank or
any Lender as to the Loan Documents except as expressly set out in this
Agreement or in another Loan Document delivered on or after the date
hereof, iv. neither Agent, Issuing Bank nor any Lender has any fiduciary
obligation toward Borrower with respect to any Loan Document or the
transactions contemplated thereby, v. the relationship pursuant to the Loan
Documents between Borrower, on one hand, and Agent, Issuing Bank and each
Lender, on the other hand, is and shall be solely that of debtor and
creditor, respectively, vi. no partnership or joint venture exists with
respect to the Loan Documents between any of Borrower, Agent, Issuing Bank
and Lenders, vii. Agent is not Borrower's Agent, but Agent for Lenders,
viii. should an Event of Default or Default occur or exist Agent and each
Lender will determine in its sole discretion and for its own reasons what
remedies and actions it will or will not exercise or take at that time, ix.
without limiting any of the foregoing, Borrower is not relying upon any
representation or covenant by Agent or any Lender, or any representative
thereof, and no such representation or covenant has been made, that Agent
or any Lender will, at the time of an Event of Default or Default, or at
any other time, waive, negotiate, discuss, or take or refrain from taking
any action permitted under the Loan Documents with respect to any such
Event of Default or Default or any other provision of the Loan Documents,
and Agent and all Lenders have relied upon the truthfulness of the
acknowledgements in this section in deciding to execute and deliver this
Agreement and to make their Loans.
THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Section 9.2 SURVIVAL OF AGREEMENTS; CUMULATIVE NATURE. All of the
Related Persons' various representations, warranties, covenants and agreements
in the Loan Documents shall survive the execution and delivery of this
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Agreement and the other Loan Documents and the performance hereof and thereof,
including the making or granting of the Loans and the delivery of the Notes and
the other Loan Documents, and shall further survive until all of the Obligations
are paid in full to Agent and Lenders and all of Agent's, Issuing Bank's and
Lenders' obligations to Borrower are terminated. All statements and agreements
contained in any certificate or other instrument delivered by any Related Person
to Agent, Issuing Bank or any Lender under any Loan Document shall be deemed
representations and warranties by Borrower or agreements and covenants of
Borrower under this Agreement. The representations, warranties, indemnities,
and covenants made by the Related Persons in the Loan Documents, and the rights,
powers, and privileges granted to Agent, Issuing Bank and Lenders in the Loan
Documents, are cumulative, and, except for expressly specified waivers and
consents, no Loan Document shall be construed in the context of another to
diminish, nullify, or otherwise reduce the benefit to Agent, Issuing Bank or any
Lender of any such representation, warranty, indemnity, covenant, right, power
or privilege. In particular and without limitation, no exception set out in
this Agreement to any representation, warranty, indemnity, or covenant herein
contained shall apply to any similar representation, warranty, indemnity, or
covenant contained in any other Loan Document, and each such similar
representation, warranty, indemnity, or covenant shall be subject only to those
exceptions which are expressly made applicable to it by the terms of the various
Loan Documents.
Section 9.3 NOTICES. All notices, requests, consents, demands and other
communications required or permitted under any Loan Document shall be in
writing, unless otherwise specifically provided in such Loan Document (provided
that Agent may give telephonic notices to Lenders), and shall be deemed
sufficiently given or furnished if delivered by personal delivery, by telecopy
or telex, by delivery service with proof of delivery, or by registered or
certified United States mail, postage prepaid, to Borrower and the Related
Persons at the address of Borrower specified on the signature pages hereto and
to Agent, Issuing Bank and the other Lenders at their addresses specified on the
signature pages hereto (unless changed by similar notice in writing given by the
particular Person whose address is to be changed). Any such notice or
communication shall be deemed to have been given (a) in the case of personal
delivery or delivery service, as of the date of first attempted delivery at the
address provided herein, (b) in the case of telecopy or telex, upon receipt, or
(c) in the case of registered or certified United States mail, three days after
deposit in the mail; provided, however, that no Borrowing Notice or
Continuation/Conversion Notice shall become effective until actually received by
Agent.
Section 9.4 JOINT AND SEVERAL LIABILITY; PARTIES IN INTEREST;
ASSIGNMENTS. All Obligations which are incurred by two or more Related Persons
shall be their joint and several obligations and liabilities subject to the
limitations expressly set forth in Article 6A. All grants, covenants and
agreements contained in the Loan Documents shall bind and inure to the benefit
of the parties thereto and their respective successors and assigns; provided,
however, that no Related Person may assign or transfer any of its rights or
delegate any of its duties or obligations under any Loan Document without the
prior consent of Majority Lenders. Neither Borrower nor any Affiliates of
Borrower shall directly or indirectly purchase or otherwise retire any
Obligations owed to any Lender nor will any Lender accept any offer to do so,
unless each Lender shall have received substantially the same offer with respect
to the same Percentage Share of the Obligations owed to it. If Borrower or any
Affiliate of Borrower at any time purchases some but less than all of the
Obligations owed to Agent, Issuing Bank and all Lenders, such purchaser shall
not be entitled to any rights under the Loan Documents unless and until Borrower
or its Affiliates have purchased all of the Obligations.
Section 9.5 GOVERNING LAW; SUBMISSION TO PROCESS. Except to the extent
that the law of another jurisdiction is expressly elected in a Loan Document,
the Loan Documents shall be deemed contracts and instruments made under the
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laws of the State of Texas and shall be construed and enforced in accordance
with and governed by the laws of the State of Texas and the laws of the United
States of America, without regard to principles of conflicts of law. Chapter 15
of Texas Revised Civil Statutes Annotated Article 5069 (which regulates certain
revolving credit loan accounts and revolving tri-party accounts) does not apply
to this Agreement or to the Notes. Each of Borrower and the Subsidiary
Guarantors hereby irrevocably submits itself to the non-exclusive jurisdiction
of the state and federal courts sitting in the State of Texas and agrees and
consents that service of process may be made upon it or any of the Related
Persons in any legal proceeding relating to the Loan Documents or the
Obligations by any means allowed under Texas or federal law. Each Related
Person agrees to appoint an agent for service of process in Texas.
Section 9.6 LIMITATION ON INTEREST. Agent, Issuing Bank, Lenders, the
Related Persons and any other parties to the Loan Documents intend to contract
in strict compliance with applicable usury law from time to time in effect. In
furtherance thereof such Persons stipulate and agree that none of the terms and
provisions contained in the Loan Documents shall ever be construed to create a
contract to pay, for the use, forbearance or detention of money, interest in
excess of the maximum amount of interest permitted to be charged by applicable
law from time to time in effect. Neither any Related Person nor any present or
future guarantors, endorsers, or other Persons hereafter becoming liable for
payment of any Obligation shall ever be liable for unearned interest thereon or
shall ever be required to pay interest thereon in excess of the maximum amount
that may be lawfully charged under applicable law from time to time in effect,
and the provisions of this section shall control over all other provisions of
the Loan Documents which may be in conflict or apparent conflict herewith.
Agent, Issuing Bank and Lenders expressly disavow any intention to charge or
collect excessive unearned interest or finance charges in the event the maturity
of any Obligation is accelerated. If i. the maturity of any Obligation is
accelerated for any reason, ii. any Obligation is prepaid and as a result any
amounts held to constitute interest are determined to be in excess of the legal
maximum, or iii. Agent, Issuing Bank or any Lender or any other holder of any or
all of the Obligations shall otherwise collect moneys which are determined to
constitute interest which would otherwise increase the interest on any or all of
the Obligations to an amount in excess of that permitted to be charged by
applicable law then in effect, then all sums determined to constitute interest
in excess of such legal limit shall, without penalty, be promptly applied to
reduce the then outstanding principal of the related Obligations or, at Agent's,
Issuing Bank's or such Lender's or holder's option, promptly returned to
Borrower or the other payor thereof upon such determination. In determining
whether or not the interest paid or payable, under any specific circumstance,
exceeds the maximum amount permitted under applicable law, Agent, Issuing Bank,
Lenders and the Related Persons (and any other payors thereof) shall to the
greatest extent permitted under applicable law, iv. characterize any
non-principal payment as an expense, fee or premium rather than as interest,
v. exclude voluntary prepayments and the effects thereof, and vi. amortize,
prorate, allocate, and spread the total amount of interest throughout the entire
contemplated term of the instruments evidencing the Obligations in accordance
with the amounts outstanding from time to time thereunder and the maximum legal
rate of interest from time to time in effect under applicable law in order to
lawfully charge the maximum amount of interest permitted under applicable law.
In the event applicable law provides for an interest ceiling under Texas Revised
Civil Statutes Annotated article 5069-1.04, that ceiling shall be the indicated
rate ceiling and shall be used when appropriate in determining the Highest
Lawful Rate. As used in this section the term "applicable law" means the laws
of the State of Texas or the laws of the United States of America, whichever
laws allow the greater interest, as such laws now exist or may be changed or
amended or come into effect in the future.
Section 9.7 TERMINATION; LIMITED SURVIVAL. In its sole and absolute
discretion Borrower may at any time that no Obligations are owing elect in a
written notice delivered to Agent to terminate this Agreement. Upon receipt
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by Agent of such a notice, if no Obligations are then owing this Agreement and
all other Loan Documents shall thereupon be terminated and the parties thereto
released from all prospective obligations thereunder. Notwithstanding the
foregoing or anything herein to the contrary, any waivers or admissions made by
any Related Person in any Loan Document, any Obligations under Sections 2.10
through 2.14, and any obligations which any Person may have to indemnify or
compensate Agent, Issuing Bank or any Lender shall survive any termination of
this Agreement or any other Loan Document. At the request and expense of
Borrower, Agent shall prepare and execute all necessary instruments to reflect
and effect such termination of the Loan Documents. Agent is hereby authorized
to execute all such instruments on behalf of all Lenders, without the joinder of
or further action by any Lender.
Section 9.8 SEVERABILITY. If any term or provision of any Loan Document
shall be determined to be illegal or unenforceable all other terms and
provisions of the Loan Documents shall nevertheless remain effective and shall
be enforced to the fullest extent permitted by applicable law.
Section 9.9 CONFIDENTIALITY. Agent and each Lender (each, a "LENDING
PARTY") agree to keep confidential any information furnished or made available
to it by Borrower pursuant to this Agreement that is marked confidential;
PROVIDED that nothing herein shall prevent any Lending Party from disclosing
such information (a) to any other Lending Party or any affiliate of any Lending
Party, or any officer, director, employee, agent, or advisor of any Lending
Party or affiliate of any Lending Party, (b) to any other Person if reasonably
incidental to the administration of the credit facility provided herein, (c) as
required by any law, rule, or regulation, (d) upon the order of any court or
administrative agency, (e) upon the request or demand of any regulatory agency
or authority, (f) that is or becomes available to the public or that is or
becomes available to any Lending Party other than as a result of a disclosure by
any Lending Party prohibited by this Agreement, (g) in connection with any
litigation to which such Lending Party or any of its affiliates may be a party,
(h) to the extent necessary in connection with the exercise of any remedy under
this Agreement or any other Loan Document, and (i) subject to provisions
substantially similar to those contained in this Section, to any actual or
proposed participant or assignee.
Section 9.10 COUNTERPARTS. This Agreement may be separately executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to constitute one
and the same Agreement.
SECTION 9.11 WAIVER OF JURY TRIAL, PUNITIVE DAMAGES, ETC. EACH OF
BORROWER, AGENT, ISSUING BANK AND LENDERS HEREBY KNOWINGLY, VOLUNTARILY,
INTENTIONALLY, AND IRREVOCABLY (a) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED
BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT OF, UNDER OR IN
CONNECTION WITH THE LOAN DOCUMENTS OR ANY TRANSACTION CONTEMPLATED THEREBY OR
ASSOCIATED THEREWITH, BEFORE OR AFTER MATURITY; (b) WAIVES, TO THE MAXIMUM
EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY
SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR
DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (c) CERTIFIES THAT NO
PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE
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THE FOREGOING WAIVERS, AND (d) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER
INTO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED
HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
CONTAINED IN THIS SECTION. BORROWER HEREBY REPRESENTS AND ACKNOWLEDGES THAT IT
IS A "BUSINESS CONSUMER" FOR THE PURPOSES OF THE TEXAS DECEPTIVE TRADE PRACTICES
- CONSUMER PROTECTION ACT, THAT IT HAS ASSETS OF $5,000,000 OR MORE ACCORDING TO
ITS MOST RECENT FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES, THAT IT HAS KNOWLEDGE AND EXPERIENCE IN
FINANCIAL AND BUSINESS MATTERS THAT ENABLE IT TO EVALUATE THE MERITS AND RISKS
OF CREDIT TRANSACTIONS GENERALLY AND OF THE TRANSACTIONS CONTEMPLATED BY THE
LOAN DOCUMENTS IN PARTICULAR, AND THAT IT IS NOT IN A SIGNIFICANTLY DISPARATE
BARGAINING POSITION WITH RESPECT TO THE PARTIES TO AND THE TRANSACTIONS
CONTEMPLATED BY THE LOAN DOCUMENTS; BORROWER HEREBY WAIVES THE PROVISIONS OF THE
TEXAS DECEPTIVE TRADE PRACTICES - CONSUMER PROTECTION ACT (OTHER THAN SECTION
17.555 THEREOF), AS FROM TIME TO TIME AMENDED.
Section 9.12 ASSIGNMENTS AND PARTICIPATIONS.
(a) Each Lender may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Loans, its Note, and its Commitment);
PROVIDED, HOWEVER, that
i. each such assignment shall be to an Eligible Assignee;
ii. except in the case of an assignment to another Lender or an
assignment of all of a Lender's rights and obligations under this
Agreement, any such partial assignment shall be in an amount at least equal
to $10,000,000 or an integral multiple of $5,000,000 in excess thereof;
iii. each such assignment by a Lender shall be of a constant, and not
varying, percentage of all of its rights and obligations under this
Agreement and the Note; and
iv. the parties to such assignment shall execute and deliver to Agent
for its acceptance an Assignment and Acceptance in the form of Exhibit H
hereto, together with any Note subject to such assignment and a processing
fee of $3,500.
Upon execution, delivery, and acceptance of such Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender hereunder and
the assigning Lender shall, to the extent of such assignment, relinquish its
rights and be released from its obligations under this Agreement. Upon the
consummation of any assignment pursuant to this Section, the assignor, Agent and
Borrower shall make appropriate arrangements so that, if required, new Notes are
issued to the assignor and the assignee. If the assignee is not incorporated
under the laws of the United States of America or a state thereof, it shall
deliver to Borrower and Agent certification as to exemption from deduction or
withholding of Taxes in accordance with Section 2.15(d).
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(b) Agent shall maintain at its address set forth on its signature page
hereto a copy of each Assignment and Acceptance delivered to and accepted by it
and a register for the recordation of the names and addresses of Lenders and the
Commitment of, and principal amount of the Loans owing to, each Lender from time
to time (the "REGISTER"). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and Borrower, Agent and Lenders
may treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
(c) Upon its receipt of an Assignment and Acceptance executed by the
parties thereto, together with any Note subject to such assignment and payment
of the processing fee, Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit F hereto, i. accept such
Assignment and Acceptance, ii. record the information contained therein in the
Register and iii. give prompt notice thereof to the parties thereto.
(d) Each Lender may sell participations to one or more Persons in all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and its Loans); PROVIDED, HOWEVER, that (i) such
participant shall be an Eligible Assignee, (ii) such Lender's obligations under
this Agreement shall remain unchanged, (iii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iv) the participant shall be entitled to the benefit of the yield protection
provisions contained in Article II and the right of set-off contained in Section
7.2, and (v) Borrower shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement, and such Lender shall retain the sole right to enforce the
obligations of Borrower relating to its Loans and its Note and to approve any
amendment, modification, or waiver of any provision of this Agreement (other
than amendments, modifications, or waivers decreasing the amount of principal of
or the rate at which interest is payable on such Loans or Note, extending any
scheduled principal payment date or date fixed for the payment of interest on
such Loans or Note, or extending its Commitment).
(e) Notwithstanding any other provision set forth in this Agreement, any
Lender may at any time assign and pledge all or any portion of its Loans and its
Note to any Federal Reserve Bank as collateral security pursuant to Regulation A
and any Operating Circular issued by such Federal Reserve Bank. No such
assignment shall release the assigning Lender from its obligations hereunder.
(f) Any Lender may furnish any information concerning Borrower or any of
its Subsidiaries in the possession of such Lender from time to time to assignees
and participants (including prospective assignees and participants), subject,
however, to the provisions of Section 9.9 hereof.
(g) No Lender will request that a rating agency prepare a credit rating
for Borrower without giving prior notice to Borrower.
Section 9.13 RESTATEMENT
This Agreement amends and restates in its entirety that certain Credit
Agreement dated as of August 30, 1994 among Borrower, Subsidiary Guarantors and
the Lenders party thereto.
Section 9.14 RATIFICATION
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Each of Borrower and Subsidiary Guarantors hereby (i) ratifies and confirms
each of the Security Documents listed on the Security Schedule (the "Designated
Security Documents") to which it is a party; (ii) agrees that, as used in each
of the Designated Security Documents, each reference to: (A) the "Credit
Agreement," shall henceforth be deemed to be a reference to this Agreement and
(B) the "Notes" shall henceforth be deemed to be a reference to the "Note" as
used in this Agreement (iii) agrees that the "Obligations" as defined in this
Agreement are part of the Secured Obligations (as defined in each of the
Designated Security Documents) and (iv) agrees that each of its obligations and
covenants with respect to such Designated Security Documents to which it is a
party shall remain in full force and effect after the execution of this
Agreement.
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IN WITNESS WHEREOF, this Agreement is executed as of the date first written
above.
BORROWER: HECLA MINING COMPANY
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------
Xxxx X. Xxxxxxxx
Vice President-Finance - Chief Financial
Officer
Address (for Borrower and Subsidiary
Guarantors):
0000 Xxxxxxx Xxxxx
Xxxxx x'Xxxxx, Xxxxx 00000-0000
Attention: Vice President-Finance
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
SUBSIDIARY GUARANTORS: MWCA, Inc., successor by merger to Colorado
Aggregate Company of New Mexico and Mountain
West Products, Inc.
By: /s/ J. Gary Childress
---------------------------------
Name: J. Gary Childress
Title: President
KENTUCKY-TENNESSEE CLAY COMPANY
By: /s/ J. Gary Childress
---------------------------------
Name: J. Gary Childress
Title: Vice President
K-T FELDSPAR CORPORATION
By: /s/ J. Gary Childress
---------------------------------
Name: J. Gary Childress
Title: Vice President
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AGENT AND LENDER: NATIONSBANK OF TEXAS, N.A.
By: /s/ Xxxxx Xxxxxxxxx
---------------------------------
Xxxxx Xxxxxxxxx,
Senior Vice President
Address:
NationsBank Plaza
000 Xxxx Xxxxxx, 00xx Xxxxx (75202)
Post Office Xxx 000000
Xxxxxx, Xxxxx 00000
Attention: Energy Lending Group
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
NationsBank of Texas, N.A.
Denver Energy Group
000 Xxxxxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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LENDERS: BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, doing business as SEAFIRST BANK
successor to Bank of America N W, N.A.
By: /s/ Xxx X. Xxxx
---------------------------------
Xxx Xxxx, Vice President
Address:
Corporate Banking, Xxxxxxx Xxxxxx
Xxxx 000 Xxxxxxxxx Xxx., Xx. SFC-5
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxx Xxxxx, Vice Pres.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
FIRST SECURITY BANK, N.A., Lender
By: /s/ Xxxxx Xxxx
---------------------------------
Xxxxx Xxxx, Vice President
Corporate Banking Division
000 Xxxxx 0xx Xxxxxx
Xxxxx Xxxxx 00000
Attention: Xxxxx Xxxx, Vice President
Telephone: (000)000-0000
Telecopy: (000)000-0000
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