AMENDMENT NO. 1
DATED AS OF MARCH 12, 1997
TO
LOAN AND SECURITY AGREEMENT
DATED AS OF MARCH 15, 1995
AMONG
ZEMEX CORPORATION AND
THE FELDSPAR CORPORATION
AND
NATIONSBANK OF TENNESSEE, N.A.,
AND THE CHASE MANHATTAN BANK
AND
NATIONSBANK OF TENNESSEE, N.A., AS AGENT
TABLE OF CONTENTS
1. Definitions 2
2. Amendments to Agreement 2
3. Representations and Warranties 13
3.1. Incorporation 13
3.2. Due Authorization, No Conflicts, Etc. 13
3.3. Due Execution, Etc. 14
3.4. Real Property 14
4. Conditions Precedent 14
4.1. Conditions Precedent to Effectiveness of Amendment No. 14
5. Effectiveness of Amendment No. 1 17
6. Closing 17
7. Post Closing Deliveries 17
8. Governing Law, Etc. 18
9. Section Titles and Table of Contents 18
10. Waiver of Jury Trial 18
11. Counterparts 18
12. Agreement to Remain in Effect 18
AMENDMENT NO. 1 dated as of March 12, 1997, under and
to that certain Loan and Security Agreement dated as of March
15, 1995 (the "Agreement"), among Zemex Corporation, a Delaware
corporation, and The Feldspar Corporation, a North Carolina
corporation (individually and collectively, the "Borrower"), the
Guarantors, jointly and severally, including the additional
Participating Subsidiaries; each of the undersigned Banks (in
such capacity the "Banks") and NationsBank of Tennessee, N.A. as
agent for the Banks (in such capacity the "Agent").
W I T N E S S E T H:
WHEREAS, Borrower, the Banks and the Agent are parties
to the Agreement; and
WHEREAS, Borrower has formed a new subsidiary, Zemex
Industrial Minerals, Inc., a Delaware corporation, and has also
acquired all of the stock of Alumitech, Inc., a Delaware
corporation, located in Streetsboro, Ohio; and
WHEREAS, Alumitech, Inc. has two subsidiaries, being
Engineered Thermal Systems, Inc., an Ohio corporation, and
Aluminum Waste Technology, Inc., a Delaware corporation; and
WHEREAS, Aluminum Waste Technology, Inc. has one
subsidiary, being AWT Properties, Inc., an Ohio corporation; and
WHEREAS, Borrower desires to have all five (5)
corporations become Participating Subsidiaries under the
Agreement; and
WHEREAS, the Borrower has requested that the Banks
increase their Revolving Loan Commitments from $10,000,000 to
$30,000,000, and provide for the issuance of standby letters of
credit in aggregate amounts up to $18,000,000 as a subfacility
under the Revolving Loan Commitments;
WHEREAS, the Banks are willing to increase their
Revolving Loan Commitments, provide for the issuance of letters
of credit, and add Alumitech, Inc., Engineered Thermal Systems,
Inc., Aluminum Waste Technology, Inc., AWT Properties, Inc. and
Zemex Industrial Minerals, Inc. as Participating Subsidiaries,
subject to the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the foregoing and
the mutual covenants and agreements set forth herein, and for
other good and valuable consideration, the receipt and legal
sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Definitions. All capitalized terms used in this
Amendment No. 1 which are not otherwise defined herein shall have
the respective meanings ascribed thereto in the Agreement.
2. Amendments to Agreement.
2.1. Section I of the Agreement, Definitions, is hereby
amended by adding thereto the following new definitions as
follows:
"Amendment No. 1 Effective Date" has the meaning
specified in Section 5 of Amendment No. 1.
"Issuing Bank" means NationsBank of Tennessee,
N.A. or any successor thereto, as the issuer of Letters
of Credit under Paragraph 2.9, together with its
successors and assigns; provided that no successor or
assign may have a letter of credit risk rating less
than that accorded to letters of credit issued by
NationsBank or its affiliates.
"Letter of Credit" shall have the meaning assigned
to such term in Paragraph 2.9, but shall exclude the
Existing Xxxxx Letter of Credit.
"Letter of Credit Documents" means, with respect
to any Letter of Credit, collectively, any application
for any Letter of Credit and any other agreements,
instruments, guarantees or other documents (whether
general in application or applicable only to such
Letter of Credit) governing or providing for (a) the
rights and obligations of the parties concerned or at
risk with respect to such Letter of Credit or (b) any
collateral security for any of such obligations.
"Letter of Credit Interest" means, for each Bank,
such Bank's participation interest (or, in the case of
the Issuing Bank, the Issuing Bank's retained interest)
in the Issuing Bank's liability under Letters of Credit
and such Bank's rights and interests in Reimbursement
Obligations and fees, interest and other amounts
payable in connection with Letters of Credit and
Reimbursement Obligations.
"Letter of Credit Liability" means, without
duplication, at any time and in respect of any Letter
of Credit, the sum of (a) the undrawn face amount of
such Letter of Credit plus (b) the aggregate unpaid
principal amount of all Reimbursement Obligations of
Zemex Corporation and/or the Borrower at such time due
and payable in respect of all drawings made under such
Letter of Credit. For purposes of this Agreement, a
Bank (other than the Issuing Bank) shall be deemed to
hold a Letter of Credit Liability in an amount equal to
its participation interest in the related Letter of
Credit under Paragraph 2.9, and the Issuing Bank shall
be deemed to hold a Letter of Credit Liability in an
amount equal to its retained interest in the related
Letter of Credit after giving effect to the acquisition
by the Banks (other than the Issuing Bank) of their
participation interests under Paragraph 2.9.
"Quarterly Dates" means the first day of each
January, April, July, or October, commencing with
April 1, 1997.
"Quarterly Period" means (a) the Period from the
Amendment No. 1 Effective Date to the next succeeding
Quarterly Date and (b) thereafter, any period from the
first day after a Quarterly Date to the next succeeding
Quarterly Date.
"Reimbursement Obligations" means, at any time,
the obligation of Zemex Corporation and/or the Borrower
then outstanding, or which may thereafter arise in
respect of any or all Letters of Credit then
outstanding, to reimburse amounts paid by the Issuing
Bank and the other Banks with respect to their Letter
of Credit Interests in respect of any drawings under a
Letter of Credit.
In addition to the foregoing new definitions, the following
definitions are hereby amended:
(i) "Adjusted Surplus Capital" is hereby amended to
replace the date of September 30, 1994 with the date of
September 30, 1996 and to replace the date of
December 31, 1995 with the date of December 31, 1996;
(ii) "Collateral Documents" is hereby amended to add
the following documents: the Stock Pledge Agreement
from Alumitech, Inc. pledging its stock in both
Engineered Thermal Systems, Inc. and Aluminum Waste
Technology, Inc., as well as the Stock Pledge Agreement
from Aluminum Waste Technology, Inc. pledging its stock
in AWT Properties, Inc., all as required by
Paragraph 4.1(g) below; the Guaranty and Suretyship
Agreements of Alumitech, Inc., Engineered Thermal
Systems, Inc., Aluminum Waste Technology, Inc., AWT
Properties, Inc., and Zemex Industrial Minerals, Inc.
required by Paragraph 4.1(e) below; and, with respect
to all Collateral Documents, all documents amending,
modifying and/or restating any Collateral Document from
time to time;
(iii) the terms "Letter of Credit Facility", "Letter of
Credit Fees", "Letter of Credit Liability", "Letter of
Credit Reimbursement Agreement" and "Letter of Credit
Reimbursement Agreement Guaranty" presently appearing
in the Agreement prior to this Amendment No. 1 are
hereby each amended to place in front of each term the
words "Existing Xxxxx", such that the new terms are
retitled and placed in proper alphabetical sequence as
follows: "Existing Xxxxx Letter of Credit Facility",
"Existing Xxxxx Letter of Credit Fees", "Existing Xxxxx
Letter of Credit Liabilities", "Existing Xxxxx Letter
of Credit Reimbursement Agreement", and "Existing Xxxxx
Letter of Credit Reimbursement Agreement Guaranty";
furthermore, the references contained in said
definitions to the Letter of Credit Facility and Letter
of Credit Reimbursement Agreement are hereby modified
to refer instead to the Existing Xxxxx Letter of Credit
Facility and the Existing Xxxxx Letter of Credit
Reimbursement Agreement;
(iv) "Obligations" is hereby amended to change
subparagraphs (B), (C) and (D) to subparagraphs (C),
(D) and (E) and to insert a new subparagraph (B) as
follows: "(B) To pay all Letter of Credit Liabilities,
including any Reimbursement Obligations and any other
amount owed by Zemex Corporation and/or the Borrower
under any Letter of Credit Documents;"
(v) "Loan Documents" is hereby amended to insert before
the clause "and the Collateral Documents," the clause
"the Letter of Credit Documents,";
(vi) "Participating Subsidiary" is hereby amended to
add the following corporations as subparagraphs (E)
through (I), respectively, as follows: Alumitech,
Inc., a Delaware corporation; Engineered Thermal
Systems, Inc., an Ohio corporation; Aluminum Waste
Technology, Inc., a Delaware corporation, AWT
Properties, Inc., an Ohio corporation, and Zemex
Industrial Minerals, Inc., a Delaware corporation; and
each of the foregoing shall also be a Subsidiary for
the purposes of the Agreement;
(vii) "Surplus Capital" is hereby amended by deleting
the definition therein contained and replacing it with
the definition of: "means Ten Million Dollars
($10,000,000.00)"; and
(viii) "Working Capital Loan Termination Date" is
hereby amended to replace "June 30, 1996" with "June
30, 1997."
2.2. Paragraph 2.1(A) is hereby amended by deleting
everything after the subtitle in its entirety and replacing it
with the following:
(A) Subject to the terms and conditions
of and relying on the representations,
warranties and covenants contained in this
Agreement, through the day prior to the Loan
Termination Date, each Bank agrees to fund
severally but not jointly to the Borrower the
amount set out beside their names, which for
all of the Banks shall be an aggregate
maximum principal amount of up to Thirty
Million Dollars ($30,000,000.00), as follows:
Banks Revolving Loan Commitments
NationsBank of Tennessee, N.A. $15,000,000.00
The Chase Manhattan Bank $15,000,000.00
TOTAL $30,000,000.00
The Revolving Loans shall be evidenced by the (i) Fifteen Million
Dollars ($15,000,000.00) Note of Borrower to NationsBank of
Tennessee, N.A., and (ii) the Fifteen Million Dollars
($15,000,000.00) Note of Borrower to The Chase Manhattan Bank,
which Notes are substantially in the form set forth in Exhibit X-
0 xxxxxxxx hereto, with each Note payable in accordance with its
terms. The Borrower may obtain Loans, repay without penalty or
premium except as set forth in Paragraph 2.13 below and reborrow
hereunder, from the date of this Agreement up to the day prior to
the Loan Termination Date, the then available Revolving Loan
Commitments or any lesser sum which is in the minimum amount of
One Million Dollars ($1,000,000.00) and in an integral multiple
of Two Hundred Fifty Thousand Dollars ($250,000.00) in the case
of Eurodollar Loans and in the minimum amount of Two Hundred
Fifty Thousand Dollars ($250,000.00) and in an integral multiple
of One Hundred Thousand Dollars ($100,000.00) in the case of
Floating Rate Loans; provided, however, Borrower may not borrow
more than two (2) times in any calendar month. Each advance of
the Revolving Loans hereunder shall be made by each Bank ratably
in accordance with its respective Revolving Loan Commitment
Percentage of such advance.
2.3. Paragraph 2.1 is hereby further amended in
Subparagraph (B) to delete everything appearing after the
semicolon and to insert in its place the following: "provided,
no more than an aggregate of Eighteen Million Dollars
($18,000,000.00) may be outstanding at any one time for Letter of
Credit Liabilities; and provided further, that the Banks shall
have no obligation to fund and/or issue a Letter of Credit if the
conditions precedent in Paragraph 3.2 below have not been
satisfied nor shall the Banks have any obligation to fund any
advances or issue a Letter of Credit for the purpose of
constructing any new Alumitech Plants if the conditions precedent
in Paragraph 3.3 below have not been satisfied." In addition,
Subparagraph (D) is hereby amended to delete the last sentence
thereof in its entirety.
2.4. Paragraph 2.5 is hereby amended to provide that a
facility fee of $60,000 will be payable in full on the Amendment
No. 1 Effective Date to the Banks.
2.5. Paragraph 2.7 is hereby amended to replace the figure
of Twenty Thousand Dollars ($20,000.00) with the figure of Thirty
Thousand Dollars ($30,000.00), commencing with the Agent's fee
due December 31, 1997. In addition, the Borrowers shall pay a
fee to the Agent of Forty Thousand Dollars ($40,000.00) on or
before the Amendment No. 1 Effective Date.
2.6. Paragraphs 2.9, 2.10, 2.11, 2.12 and 2.13 are hereby
renumbered, respectively, as Paragraphs 2.10, 2.11, 2.12, 2.13
and 2.14, and a new Paragraph 2.9 is hereby inserted as follows:
2.9 Letters of Credit. Subject to the terms and
conditions of this Agreement, the Revolving Loan
Commitments may be utilized, upon the request of Zemex
Corporation, in addition to the Loans provided for by
Paragraph 2.1, for the issuance by the Issuing Bank of
letters of credit (collectively, but excluding the
Existing Xxxxx Letter of Credit, the "Letters of
Credit") for the account of Zemex Corporation and/or
the Borrower; provided that in no event shall (i) the
aggregate amount of all Letter of Credit Liabilities,
together with the aggregate principal amount of the
Loans exceed the aggregate amount of the Revolving Loan
Commitments as in effect from time to time, (ii) the
outstanding aggregate amount of all Letter of Credit
Liabilities exceed $18,000,000.00 and (iii) the
expiration date of any Letter of Credit extend beyond
the earlier of the Loan Termination Date and the date
twelve months following the issuance of such Letter of
Credit. The following additional provisions shall
apply to Letters of Credit:
(A) Zemex Corporation and/or the Borrower
shall give the Agent at least three Business Days'
irrevocable prior notice (effective upon receipt)
specifying the Business Day (which shall be no later
than 90 days preceding the Loan Termination Date) each
Letter of Credit is to be issued and describing in
reasonable detail the proposed terms of such Letter of
Credit (including its beneficiary) and the nature of
the transactions or obligations proposed to be
supported (including whether such Letter of Credit is
to be a commercial letter of credit or a standby letter
of credit). Zemex Corporation and/or the Borrower
shall be the account party for each Letter of Credit,
including Letters of Credit issuable to a beneficiary
having a claim or potential claim against a Subsidiary
of Zemex Corporation.
(B) On each day during the period commencing
with the issuance by the Issuing Bank of any Letter of
Credit and until such Letter of Credit shall have
expired or been terminated or, if drawn upon, until the
resulting Reimbursement Obligations have been
reimbursed in full by the Borrower and/or Zemex
Corporation (whether by a borrowing under this
agreement or otherwise), the Revolving Loan Commitment
of each Bank shall be deemed to be utilized for all
purposes of this Agreement in an amount equal to such
Bank's Revolving Loan Commitment Percentage of the then
Letter of Credit Liabilities associated with such
Letter of Credit. Each Bank (other than the Issuing
Bank) agrees that, upon the issuance of any Letter of
Credit it shall automatically acquire a participation
in the Issuing Bank's liability under such Letter of
Credit in an amount equal to such Bank's Revolving Loan
Commitment Percentage of such liability, and each Bank
(other than the Issuing Bank) thereby shall absolutely,
unconditionally and irrevocably assume, as primary
obligor and not as surety, and shall be unconditionally
obligated to the Issuing Bank to pay and discharge when
due, its Revolving Loan Commitment Percentage of the
Issuing Bank's liability under such Letter of Credit.
(C) Upon receipt from the beneficiary of any
Letter of Credit or any demand for payment under such
Letter of Credit, the Issuing Bank shall promptly
notify the Borrower and/or Zemex Corporation (through
the Agent) of the amount to be paid by the Issuing Bank
as a result of such demand and the date on which
payment is to be made by the Issuing Bank to such
beneficiary in respect of such demand. The Borrower
hereby unconditionally agrees to pay and reimburse the
Agent for the account of the Issuing Bank and the other
Banks with respect to their Letter of Credit Interest
for the amount of each demand for payment under such
Letter of Credit at or prior to the date on which
payment is to be made by the Issuing Bank to the
beneficiary under such Letter of Credit, without
presentment, demand, protest or other formalities of
any kind. Any amounts not so paid or borrowed as set
forth in (D) below shall bear interest at the rate(s)
specified in the Letter of Credit Documents or, if
higher, at the rate(s) specified on the Revolving Notes
(including the Default Rate, if applicable).
(D) Forthwith upon its receipt of a notice
referred to in clause (C) of this Paragraph 2.9, the
Borrower shall advise the Agent whether or not the
Borrower intends to borrow under Paragraph 2.1 to
finance the obligation to reimburse the Issuing Bank
for the amount of the related demand for payment and,
if it does, submit a notice of such borrowing as
provided in Paragraph 2.4. In the event that the
Borrower fails to so advise the Agent, and if the
Borrower fails to reimburse the Issuing Bank for a
demand for payment under a Letter of Credit by the date
of such payment, the Agent shall give each Bank prompt
notice of the amount of the demand for payment,
specifying such Bank's Revolving Loan Commitment
Percentage of the amount of the related demand for
payment, and the Borrower shall be deemed in default
hereunder for breaching Subparagraph 2.9(C) above.
(E) Each Bank (other than the Issuing Bank)
shall pay to the Agent for the account of the Issuing
Bank in Dollars and in immediately available funds, the
amount of such Bank's Revolving Loan Commitment
Percentage of any payment under a Letter of Credit
(excluding the Existing Xxxxx Letter of Credit for
which separate provision has been made) upon notice by
the Agent to such Bank requesting such payment and
specifying such amount as provided in clause (D) of
this Paragraph 2.9. Each such Bank's obligation to
make such payments to the Agent for the account of the
Issuing Bank under this clause (E), and the Issuing
Bank's right to receive the same, shall be absolute and
unconditional and shall not be affected by any
circumstance whatsoever, including (i) the failure of
any other Bank to make its payment under this clause
(E), the financial condition of the Borrower (or any
other account party), the existence of any Default or
(ii) the termination of the Commitments. Each such
payment to the Issuing Bank shall be made without any
offset, abatement, withholding or reduction whatsoever;
provided, nothing contained in the foregoing shall
limit the Issuing Bank's liability for its gross
negligence or willful misconduct in improperly honoring
a draft drawn under a Letter of Credit.
(F) Upon the making of each payment by a
Bank to the Issuing Bank pursuant to clause (E) above
in respect of any Letter of Credit, such Bank shall,
automatically and without any further action on the
part of the Agent, the Issuing Bank or such Bank,
acquire (i) a participation in any amount equal to such
payment in the Reimbursement Obligation owing to the
Issuing Bank by the Borrower and/or Zemex Corporation
under this Agreement and under the Letter of Credit
Documents relating to such Letter of Credit and (ii) a
participation in a percentage equal to such Bank's
Revolving Loan Commitment Percentage in any interest or
other amounts payable by the Borrower and/or Zemex
Corporation under such Letter of Credit Documents and
the other Loan Documents in respect of such
Reimbursement Obligation (other than the commissions,
charges, costs and expenses payable to the Issuing Bank
pursuant to clause (G) of this Paragraph 2.9). Upon
receipt by the Issuing Bank from or for the account of
the Borrower and/or Zemex Corporation of any payment in
respect of any Reimbursement Obligation or any such
interest or other amount (including by way of set-off
or application of proceeds of any collateral security)
the Issuing Bank shall promptly pay to the Agent for
the account of each Bank who shall have previously
assumed a participation in such payment under clause
(ii) above, such Bank's Revolving Loan Commitment
Percentage of such payment, each such payment by the
Issuing Bank to be made in the same money and funds in
which received by the Issuing Bank. In the event any
payment received by the Issuing Bank and so paid to the
Banks is rescinded or must otherwise be returned by the
Issuing Bank, each Bank shall, upon the request of the
Issuing Bank (through the Agent), repay to the Issuing
Bank (through the Agent) the amount of such payment
paid to such Bank, with interest at the rate specified
in clause (J) of this Paragraph 2.9.
(G) Borrower shall pay to the Agent for the
account of each Bank a letter of credit fee in respect
of each Letter of Credit on the daily average undrawn
face amount of such Letter of Credit for the period
from and including the date of issuance of such Letter
of Credit to and including the date such Letter of
Credit is drawn in full, expires or is terminated (such
fee to be non-refundable, to be paid in arrears on each
Quarterly Date and on the Loan Termination Date and to
be calculated, for any day, after giving effect to any
payments made under such Letter of Credit on such day)
in an amount equal to two percent (2.0%) per annum or,
for any Quarterly Period prior to the first day of
which (and in any event no later than 45 days after the
end of the fiscal quarter most recently ended) Zemex
Corporation has delivered to the Agent a certificate of
Zemex Corporation calculating the Funded Debt to Cash
Flow Ratio as at the last day of such fiscal quarter
(other than such portion of such period during which a
Default shall be continuing), the percentage per annum
set forth below opposite the Funded Debt to Capital for
Zemex Corporation and its Subsidiaries reflected on
such certificate:
Funded Debt to Capital Percentage Rate
Equal to or Greater than 35% 2.00% per annum
Equal to or Greater than 25%
and Less Than 35% 1.50% per annum
Less than 25% 1.00% per annum
Provided, following the occurrence and during the
continuation of any Event of Default hereunder, the
letter of credit fee shall be that letter of credit fee
otherwise due hereunder plus an additional three
percent (3%) per annum.
All calculations of Letter of Credit fees shall be
based on a 360 day year counting the actual number of
elapsed days.
(H) Upon the request of any Bank from time
to time, the Issuing Bank shall deliver any information
reasonably requested by such Bank with respect to each
Letter of Credit then outstanding.
(I) The issuance by the Issuing Bank of each
Letter of Credit shall be subject, in addition to the
conditions precedent set forth in Paragraphs 3.2 and,
if applicable, 3.3, to the conditions precedent that
(i) such Letter of Credit shall be in such form,
contain such terms and support such transactions as
shall be satisfactory to the Issuing Bank consistent
with its then current practices and procedures with
respect to letters of credit of the same type and if
the stated amount of the Letter of Credit exceeds
$1,000,000, shall also be in such form, contain such
terms and support such transactions as shall be
satisfactory to the Majority Banks, and (ii) the
Borrower and/or Zemex Corporation shall have executed
and delivered such applications, agreements and other
instruments relating to such Letter of Credit as the
Issuing Bank shall have reasonably requested consistent
with its then current practices and procedures with
respect to letters of credit of the same type; provided
that in the event of any conflict between any such
application, agreement or other instrument and the
provisions of this Agreement, the provisions of this
Agreement shall control.
(J) To the event that any Bank fails to pay
any amount required to be paid pursuant to clause (E)
or (F) of this Paragraph 2.9 when due, such Bank shall
pay interest to the Issuing Bank (through the Agent) on
such amount from and including such due date to but
excluding the date such payment is made (i) during the
period form and including such due date to but
excluding the date three Business Days thereafter, at a
rate per annum equal to the Federal Funds Rate (as in
effect from time to time) and (ii) thereafter, at a
rate per annum equal to the Prime Rate plus 2.0%.
(K) The issuance by the Issuing Bank of any
modification or supplement to any Letter of Credit
shall be subject to the same conditions applicable
under this Paragraph 2.9 to the issuance of new Letters
of Credit, and no such modification or supplement shall
be issued unless either (x) the respective Letter of
Credit as affected by such action would have complied
with such conditions had it originally been issued in
such modified or supplemented form or (y) each Bank
shall have consented to such modification or
supplement.
(L) The obligations of the Borrower and/or
Zemex Corporation under this Paragraph 2.9 shall be
unconditional and absolute and shall not be affected,
modified or impaired, upon the happening at any time or
from time to time of any event, including any of the
following, whether or not with notice to or the consent
of the Borrower and/or Zemex Corporation:
1. the compromise, settlement,
release, modification, amendment (whether material or
otherwise) or termination of any or all of the
obligations, conditions covenants or agreements of any
Person in respect of any of the Loan Documents;
2. the occurrence, or the failure by
the Agent, any Bank or any other Person to give notice
to the Borrower and/or Zemex Corporation of the
occurrence, of any Event of Default or any default
under any of the other Loan Documents;
3. any failure, omission or delay on
the part of the Agent, any Bank, the Borrower, Zemex
Corporation or the beneficiary of any Letter of Credit
to enforce, assert or exercise any right, remedy, power
or privilege conferred by this Agreement or any of the
Loan Documents, or any other act or acts on the part of
the Agent, any Bank, the Borrower, Zemex Corporation or
the beneficiary of any Letter of Credit;
4. the voluntary or involuntary
liquidation, dissolution, sale or other disposition of
all or substantially all the assets of, the marshalling
of assets and liabilities, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition with creditors
or readjustment of, or other similar proceedings which
affect, the Borrower, Zemex Corporation or any other
party to any of the Loan Documents;
5. any lack of validity or
enforceability of this Agreement, any Letter of Credit
or any other Loan Document, or any allegation of
invalidity or unenforceability or any contest of such
validity or enforceability;
6. the existence of any claim, set-
off, defense or other right which the Borrower and/or
Zemex Corporation may have at any time against the
Agent, any Bank or any beneficiary or any transferee of
any Letter of Credit (or any persons or entities for
whom the Bank or any such beneficiary or transferee may
be acting), or any other Person, whether in connection
with this Agreement or any of the other Loan Documents
or any of the transactions contemplated by any Loan
Document or any unrelated transaction;
7. any statement in any certificate or
any other document presented under any Letter of Credit
proving to be forged, fraudulent, invalid or
insufficient in any respect or any such statement being
untrue or inaccurate in any respect whatsoever;
8. payment by the Issuing Bank under
any Letter of Credit against presentation of a demand
or certificate which does not comply with the terms of
such Letter of Credit;
9. the release or discharge by
operation of law of the Borrower and/or Zemex
Corporation form the performance or observance of any
obligation, covenant or agreement contained in any of
the Loan Documents; or
10. any other circumstance or happening
whatsoever, whether or not similar to any of the
foregoing.
(M) Without affecting the Borrower's
liability under Paragraph 10.7, the Borrower agrees to
indemnify each of the Issuing Bank, the Agent and the
Banks and their respective affiliates, directors,
officers, employees, attorneys and agents from, and
hold each of them harmless against, any and all losses,
liabilities, damages or expenses incurred by any of
them in connection with or by reason of any actual or
threatened investigation, litigation or other
proceeding (including, in respect of the Issuing Bank
and the Agent, any such investigations, litigation or
other proceeding between the Issuing Bank or the Agent
and any Bank) relating to (a) the execution and
delivery of any Letter of Credit; (b) the use of the
proceeds of any drawing under any Letter of Credit; or
(c) the transfer or substitution of, or payment or
failure to pay under, any Letter of Credit, including
the reasonable fees and disbursements of counsel
incurred in connection with any such investigation,
litigation or other proceeding, but excluding damages,
losses, liabilities or expenses to the extent, but only
to the extent, incurred by reason of (x) the willful
misconduct or gross negligence of the Issuing Bank in
determining whether a document presented under any
Letter of Credit complies with the terms of such Letter
of Credit or (y) in the case of the Issuing Bank, such
Bank's failure to pay under any Letter of Credit after
presentation to it of documents strictly complying with
the terms and condition of such Letter of Credit. It
shall not be a condition to any such indemnification
that the Issuing Bank, the Agent or any Bank shall be a
party to any such investigations, litigation or other
proceeding. Nothing in this Paragraph 2.9 is intended
to limit the Borrower's or Zemex Corporation's payment
obligations under this Agreement.
(N) The Borrower assumes all risks of the
acts or omissions of any beneficiary of any Letter of
Credit with respect to the use of the Letter of Credit.
None of the Agent, any Bank nor any of their respective
affiliates, officers, directors, employees, attorneys
or agents shall be liable or responsible for: (a) the
use which may be made of the Letter of Credit or for
any acts or omissions of any beneficiary of any Letter
of Credit in connection with such Letter of Credit; (b)
the validity, sufficiency or genuineness of documents
presented to the Issuing Bank, or of any endorsement on
such documents, even if such documents should in fact
prove to be in any or all respects invalid,
insufficient, fraudulent or forged; (c) payment by the
Issuing Bank against presentation of documents which do
not comply with the terms of any Letter of Credit,
including failure of any documents to bear any
reference or adequate reference to such Letter of
Credit; or (d) any other circumstances whatsoever in
making or failure to make payment under any Letter of
Credit; provided that the Borrower shall have a claim
against the Issuing Bank to the extent, but only to the
extent, of any direct, as opposed to consequential,
damages suffered by the Borrower which the Borrower
proves were caused by (i) the Issuing Bank's willful
misconduct or gross negligence in determining whether a
document presented under any Letter of Credit complies
with the terms of such Letter of Credit or (ii) the
Issuing Bank's willful failure to pay under the Letter
of Credit after presentation to it of documents
strictly complying with the terms and conditions of
such Letter of Credit. In furtherance and not in
limitation of the foregoing, the Issuing Bank may
accept documents that appear on their face to be in
order, without responsibility for further
investigation, regardless of any notice or information
to the contrary.
2.7. Section III of the Agreement is hereby amended to
renumber Paragraph 3.3 as Paragraph 3.4, and to insert a new
Paragraph 3.3 as follows:
"3.3 Alumitech Plant Advances. As an express
condition precedent to the disbursement of any
Revolving Loans and/or the issuance of any Letter of
Credit in connection with the development and/or
construction of any new plant by or for Alumitech, Inc.
or any Subsidiary thereof, the Agent and Banks shall be
granted either:
(A) if the new plant is to be owned one
hundred percent (100%) by Zemex Corporation, Alumitech,
Inc., or any Subsidiary thereof, a first lien mortgage
and security interest in all real property, personal
property, and machinery and equipment associated with
the new plant and facility, in form and substance
satisfactory to the Banks; or
(B) if the new plant is to be owned in a
joint venture or partnership with a Person who is not
an Affiliate of Zemex Corporation, then a first lien
security interest in the partnership or joint venture
interest owned by Zemex Corporation or one of its
Subsidiaries in form and substance satisfactory to the
Banks, including such written consents from the other
joint venture or partnership party as the Banks may
require in their discretion;
provided, prior to the issuance of any Letter of Credit
to support the financing of such a plant, the Banks
must also approve in their discretion the terms and
conditions of any underlying financing which the Letter
of Credit is intended to enhance; and provided further,
prior to the issuance of any Letter of Credit or the
advancement of any Revolving Loans, the Banks must also
approve the construction budget, the draw request
procedure, the contractor and architect, and such other
matters as are typically reviewed and/or approved by
Banks in initiating and administering a construction
loan.
2.8. Each of Alumitech, Inc., a Delaware corporation,
Engineered Thermal Systems, Inc., an Ohio corporation, Aluminum
Waste Technology, Inc., a Delaware corporation, AWT Properties,
Inc., an Ohio corporation, and Zemex Industrial Minerals, Inc., a
Delaware corporation, hereby grants and ratifies and confirms the
grant of the security interest by it contained in Paragraphs 4.2
and 4.4 of the Agreement as security for the prompt satisfaction
of all Obligations and all Guaranties of the Obligations,
including without limitation the Guaranties required to be
executed by each of them pursuant to Paragraph 4.1(e) below.
2.9. Paragraph 6.17 is hereby amended to replace the figure
of 0.40 in Subparagraph (B) with the figure of 0.45, to replace
the ratio of 3.0 to 1.0 in Subparagraph (C) with the ratio of
3.50 to 1.0, and to replace the ratio of 1.35 to 1.0 in
Subparagraph (D) with the ratio of 1.25 to 1.00.
2.10. Subparagraph 7.2(B) is hereby amended to insert
the words "Existing Xxxxx" before the term "Letter of Credit
Facility" where it appears therein.
2.11. Paragraph 7.9 is hereby amended in subparagraph
(iii) thereof to insert "Existing Xxxxx" before the term "Letter
of Credit Reimbursement Agreement."
2.12. Paragraph 7.16(F) is hereby amended to delete the
clause "and a Participating Subsidiary" and to replace it with
the clause "and be considered by the Banks for inclusion as a
Participating Subsidiary".
2.13. Paragraph 7.17 is hereby amended to delete
everything after "Five Million Dollars ($5,000,000.00)" and to
insert instead the clause "in any fiscal year."
2.14. Paragraph 8.1 is hereby amended in subparagraph
(M) to insert the words "Existing Xxxxx" in front of the terms
"Letter of Credit Facility" and "Letter of Credit Reimbursement
Agreement." In addition, a new subparagraph (P) is hereby added
thereto as follows:
"(P) A breach or default shall occur under
any Letter of Credit Document."
2.15. Paragraph 9.9 is hereby amended to delete the
first sentence thereof in its entirety and to replace it with the
following:
"Except as may be provided in other sections
of this Agreement, including Paragraphs
2.14(B) and 7.2, all of the funds received by
Banks, or any of them, with the exception of
funds received by The Chase Manhattan Bank
with respect to the Existing Xxxxx Letter of
Credit Reimbursement Agreement shall be
allocated pro rata among all Banks in
proportion to their respective outstanding
Loan balances and Reimbursement Obligations,
if any; provided, following the occurrence of
an Event of Default and the acceleration of
the Obligations, all funds received by the
Banks thereafter shall, unless the Banks
otherwise agree, be allocated in proportion
to the sum of their respective outstanding
Loan balances, Letter of Credit Liabilities,
and Existing Xxxxx Letter of Credit
Liabilities."
2.16. Paragraph 9.11 is hereby amended to delete the
clause in the first sentence "in proportion to the Letter of
Credit Liabilities and the respective outstanding Loan amounts"
and to replace it with the clause "in proportion to the Letter of
Credit Liabilities, the Existing Xxxxx Letter of Credit
Liabilities and the respective outstanding Loan amounts."
2.17. Exhibit N to the Agreement is hereby supplemented
by adding thereto the additional environmental disclosures
contained in Exhibit N-1 attached hereto and incorporated herein
by reference. The Borrower and its Participating Subsidiaries
hereby warrant that, except as may be disclosed on Exhibit N-1,
the respective assets and operations of Alumitech, Inc.,
Engineered Thermal Systems, Inc., Aluminum Waste Technology,
Inc., AWT Properties, Inc. and Zemex Industrial Minerals, Inc.
are in compliance in all material respects with all Environmental
Laws and are in a clean and healthful condition, free of asbestos
and of all contamination by Hazardous Materials and other
potentially harmful chemical or physical conditions; all storage
tanks (whether above or below ground) located in or on such
plants, facilities and properties are in sound condition, free of
corrosion or leaks that could allow or threaten the release of
any stored material; and no Hazardous Materials are or to the
best of Borrower's knowledge, have been used, stored, treated or
disposed of in violation of applicable Laws and regulations. No
Borrower or Participating Subsidiary is a defendant in any
administrative or judicial actions alleging liability under
CERCLA with respect to such properties and assets, nor has any
Borrower or Participating Subsidiary received a notice that it is
a potentially responsible party under CERCLA or other similar
state Laws.
2.18. The Agreement is hereby modified to replace
Chemical Bank wherever such name appears with The Chase Manhattan
Bank.
3. Representations and Warranties. To induce the Banks
and the Agent to enter into this Amendment No. 1, Borrower and
Guarantors jointly and severally represent and warrant to the
Banks and the Agent as follows:
3.1. Incorporation. Alumitech, Inc., Aluminum Waste
Technology, Inc. and Zemex Industrial Minerals, Inc. are
corporations duly organized, validly existing and in good
standing under the laws of the State of Delaware, and Engineered
Thermal Systems, Inc. and AWT Properties, Inc. are corporations
duly organized, validly existing and in good standing under the
laws of the State of Ohio; each of said corporations has the
lawful power to own its properties and to engage in the business
it conducts, and each is duly qualified and in good standing as a
foreign corporation in the jurisdictions wherein the nature of
the business transacted by it or property owned by it is both
material and makes qualification necessary; Zemex Industrial
Minerals, Inc. has its chief executive office and principal place
of business in Atlanta, Georgia and each of the other
corporations has its chief executive office and principal place
of business located at Streetsboro, Portage County, Ohio; each of
Alumitech, Inc., Aluminum Waste Technology, Inc., Engineered
Thermal Systems, Inc., and AWT Properties, Inc. has its equipment
and inventory located in the State of Ohio and Zemex Industrial
Minerals, Inc. has all of its inventory and equipment located in
Atlanta, Georgia.
3.2. Due Authorization, No Conflicts, Etc. The execution,
delivery and performance by the Borrower and Guarantors of this
Amendment No. 1 and any and all other agreements, instruments and
documents to be executed and/or delivered by the Borrower or any
Guarantor pursuant hereto or in connection herewith, and the
consummation by Borrower and Guarantors of the transactions con
templated hereby or thereby: (a) are within the corporate powers
of each; (b) have been duly authorized by all necessary corporate
action, including without limitation, the consent of stockholders
where required; (c) do not and will not (i) contravene the
respective certificate of incorporation or by-laws or other
comparable governing documents of Borrower or any Guarantor, (ii)
violate any Laws, or any order or decree of any court or
governmental authority, or (iii) conflict with or result in the
breach of, or constitute a default under, or result in the termi
nation of, any material contractual obligation of Borrower or any
Guarantor, and (d) do not require the consent, authorization by,
or approval of, or notice to, or filing or registration with, any
governmental authority or any other Person other than those which
have been obtained and copies of which have been delivered to the
Agent pursuant to Subsection 4.1(a)(ii) hereof, each of which is
in full force and effect.
3.3. Due Execution, Etc. This Amendment No. 1 and each of
the other agreements, instruments and documents to be executed
and/or delivered by Borrower or any Guarantor pursuant hereto or
in connection herewith (a) has been duly executed and delivered,
and (b) constitutes the legal, valid and binding obligation of
each, enforceable against it in accordance with its terms,
subject however to state and federal bankruptcy, insolvency,
reorganization and other laws and general principles of equity
affecting enforcement of the rights of creditors generally.
3.4. Real Property. The Borrower and its Participating
Subsidiaries have good and marketable title to the Real Property
subject to no encumbrances other than Permitted Liens and those
noted in the Deeds of Trust originally executed and delivered on
March 15, 1995.
4. Conditions Precedent. The effectiveness of this
Amendment No. 1 is subject to the fulfillment of the following
conditions precedent on or prior to the Amendment No. 1 Effective
Date (as hereinafter defined in Section 5 hereof):
4.1. Conditions Precedent to Effectiveness of Amendment No.
1. The Agent shall have received, on or prior to the Amendment
No. 1 Effective Date, the following, each dated on or prior to
the Amendment No. 1 Effective Date unless otherwise indicated, in
form and substance satisfactory to the Agent and in sufficient
copies for each Bank:
(a) Certified copies of (i) the resolutions of the
Board of Directors of Borrower and each Guarantor approving this
Amendment No. 1 and each other agreement, instrument or document
to be executed by them pursuant hereto or as contemplated hereby,
and (ii) all documents evidencing other necessary corporate
action and required governmental and third party approvals,
licenses and consents with respect to this Amendment No. 1 and
the transactions contemplated hereby.
(b) A certificate of the Secretary or an Assistant
Secretary of Borrower and each Guarantor certifying the names and
true signatures of the officers of Borrower and each Guarantor
who have been authorized to execute on behalf of Borrower and
such Guarantor this Amendment No. 1 and any other agreement,
instrument or document executed or to be executed by Borrower and
any Guarantor in connection herewith.
(c) A certificate dated the Amendment No. 1 Effective
Date signed by the President or any Vice-President of Borrower,
to the following effect:
(i) The representations and warranties of
the Borrower contained in Sections 3.1, 3.2 and 3.3 of
this Amendment No. 1 are true and correct on and as of
such date as though made on and as of such date;
(ii) No Default or Event of Default has
occurred and is continuing, and no Default or Event of
Default would result from the execution and delivery of
this Amendment No. 1 or the other agreements,
instruments and documents contemplated hereby; and
(iii) The Borrower has paid or
agreed to pay all amounts payable by it pursuant to the
Agreement as amended hereby (including, without
limitation, all legal fees and expenses of Banks'
counsel incurred in connection herewith) to the extent
then due and payable.
(d) Two (2) original Revolving Notes duly
executed by Zemex Corporation and The Feldspar Corporation,
jointly and severally, in the amount of $15,000,000 each,
evidencing the renewal, modification and increase of the existing
Revolving Notes, in the form attached hereto as Exhibit A-1.
(e) An original Guaranty and Suretyship Agreement
duly executed by each of Alumitech, Inc., a Delaware corporation,
Engineered Thermal Systems, Inc., an Ohio corporation, Aluminum
Waste Technology, Inc., a Delaware corporation, and AWT
Properties, Inc., an Ohio corporation, and Zemex Industrial
Minerals, Inc., a Delaware corporation, in the form attached
hereto as Exhibit B, together with Amended and Restated Guaranty
and Suretyship Agreements executed by Xxxxx Corporation, Xxxxx
Metal Powders, Inc., Suzorite Mineral Products, Inc. and Suzorite
Mica Products, Inc. Les Produits Mica Suzorite, Inc.
(f) Such UCC financing statements as may be
required by the Banks, showing Alumitech, Inc., Engineered
Thermal Systems, Inc., Aluminum Waste Technology, Inc., AWT
Properties, Inc., and Zemex Industrial Minerals, Inc. as the
debtors therein.
(g) An original Amendment No. 1 to Stock Pledge
Agreement duly executed by Zemex Corporation in the form attached
hereto as Exhibit C, and Stock Pledge Agreements in the form
attached hereto as Exhibit D, duly executed by each of Alumitech,
Inc. and AWT Properties, Inc.
(h) A favorable opinion of Messrs. Xxxxx, Xxxxxx
& Xxxxxx, L.L.P., counsel to the Borrower, in substantially the
form of Exhibit E hereto, and as to such other matters as any
Bank, through the Agent, may reasonably request.
(i) A favorable opinion of Messrs. Xxxxx Xxxxx,
special Canadian counsel, in substantially the form of Exhibit F
hereto.
(j) Duly executed Amended and Restated
Environmental Indemnity Agreement of the Borrower and the
Guarantors with respect to all real property owned or leased by
any of them.
(k) Duly executed First Amendment to the North
Carolina Commercial Deed of Trust and Security Agreement for
Securing Revolving Line of Credit and Other Indebtedness and the
recordation of same in the Register of Deeds for Xxxxxxxx County,
North Carolina together with the receipt by the Agent of an
endorsement to the Lawyers Title Insurance Corporation Mortgagee
Loan Policy #135-00-780-653 reflecting the recordation of said
First Amendment and bringing forward the effective date of the
Mortgagee Title Insurance Policy without any other change or
modification.
(l) Duly executed First Amendment to the Jasper
County, Georgia Commercial Deed to Secure Debt and Security
Agreement and the recordation of same in the Clerk's Office of
the Superior Court for Jasper County, Georgia.
(m) Duly executed First Amendment to the Xxxxxx
County, Georgia Commercial Deed to Secure Debt and Security
Agreement and the recordation of same in the Clerk's Office for
the Superior Court for Xxxxxx County, Georgia.
5. Effectiveness of Amendment No. 1. This Amendment
No. 1 and the Exhibits attached hereto shall become effective at
such time as (a) each of the conditions precedent set forth in
Section 4.1 hereof shall have been satisfied, and (b)
counterparts of this Amendment No. 1, executed and delivered by
the Borrowers, the Banks and the Agent shall have been received
by the Agent (or, alternatively, confirmation of the execution
hereof by such parties shall have been received by the Agent).
The date upon which the conditions described in clauses (a) and
(b) of the foregoing sentence shall have been fulfilled is
referred to herein as the "Amendment No. 1 Effective Date".
6. Closing. The Closing under this Amendment No. 1
shall occur on the Amendment Effective Date at the offices of
Boult, Cummings, Xxxxxxx & Xxxxx, 0 XxxxxxxXxxx Xxxxx, Xxxxxxxxx,
Xxxxxxxxx 00000, or such other location as the parties may
agree.
7. Post Closing Deliveries. The Borrower covenants
to deliver to the Agent on behalf of the Banks: (a) on or before
March 27, 1997, terminations of all UCC statements filed by Ohio
Savings Bank and ORIX Credit Alliance, Inc. against any of the
Subsidiaries of Alumitech, Inc., including without limitation AWT
Properties, Inc., together with such other evidence as the Banks
may request showing that the outstanding indebtedness to Ohio
Savings Bank and ORIX Credit Alliance, Inc. has been paid in
full, and (b) on or before May 12, 1997, a fully executed
Collateral Mortgage Modification Agreement substantially in the
form attached hereto as Exhibit G amending the Collateral
Mortgage and Security Agreement from Xxxxx Corporation and the
Niagara County Industrial Development Agency to NationsBank of
Tennessee, N.A. as Agent for itself and the Chase Manhattan Bank
(formerly Chemical Bank) dated March 15, 1995 and recorded in the
Clerk's Office for Niagara County, New York in Liber 3047, page
178, together with evidence of the approval of said Modification
by the Niagara County Industrial Development Agency and an
endorsement to the Ticor Title Mortgagee Policy of Title
Insurance No. 5295-25021 bringing forward its effective date to
the date of the recordation of the Collateral Mortgage
Modification Agreement without showing any other changes to
title. Borrower's failure to comply herewith shall constitute an
Event of Default.
8. Governing Law, Etc. This Amendment No. 1 shall be
governed by, and construed in accordance with, the laws of the
State of Tennessee as provided in Section 10.9 of the Agreement,
which Section is incorporated herein by reference and made a part
hereof as though set forth in full herein.
9. Section Titles and Table of Contents. The Section
Titles and Table of Contents contained in this Amendment No. 1
are and shall be without substantive meaning or content of any
kind whatsoever and are not a part of the agreement among the
parties hereto.
10. Waiver of Jury Trial. EACH PARTY HERETO,
INCLUDING THE BORROWER, EACH SUBSIDIARY, THE BANKS, AND THE
AGENT, HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE (TO
THE EXTENT PERMITTED BY APPLICABLE LAWS) ANY RIGHTS THEY MAY HAVE
TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER, RELATING TO, OR
CONNECTED WITH THIS AGREEMENT, THE COLLATERAL OR ANY OTHER
AGREEMENT, INSTRUMENT OR DOCUMENT CONTEMPLATED HEREBY OR
DELIVERED IN CONNECTION HEREWITH AND AGREE THAT ANY SUCH DISPUTE
SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE BANKS' AND THE AGENT
ENTERING INTO THIS AGREEMENT.
11. Counterparts. This Amendment No. 1 may be
executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together
shall constitute one and the same instrument.
12. Agreement to Remain in Effect. Except as
expressly provided herein, the Agreement and each other
Collateral Document shall be and shall continue in full force and
effect in accordance with its respective terms.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment No. 1 to be executed by their respective officers
thereunto duly authorized, as of the date first above written.
AGENT BORROWER
NATIONSBANK OF TENNESSEE, N.A., ZEMEX CORPORATION
as Agent
BY: BY:
TITLE: TITLE:
BY:
TITLE:
BANKS
NATIONSBANK OF TENNESSEE, N.A. THE FELDSPAR CORPORATION
BY: BY:
TITLE: TITLE:
THE CHASE MANHATTAN BANK GUARANTORS AND PARTICIPATING
(formerly Chemical Bank) SUBSIDIARIES
XXXXX CORPORATION
BY:
TITLE: BY:
TITLE:
XXXXX METAL POWDERS, INC.
BY:
TITLE:
SUZORITE MICA PRODUCTS INC. LES
PRODUITS MICA SUZORITE INC.
BY:
TITLE:
SUZORITE MINERAL PRODUCTS, INC.
BY:
TITLE:
ALUMITECH, INC.
BY:
TITLE:
ENGINEERED THERMAL SYSTEMS,INC.
BY:
TITLE:
ALUMINUM WASTE TECHNOLOGY, INC.
BY:
TITLE:
AWT PROPERTIES, INC.
BY:
TITLE:
ZEMEX INDUSTRIAL MINERALS, INC.
BY:
TITLE:
