SECOND AMENDMENT
TO
LETTER OF CREDIT REIMBURSEMENT AGREEMENT
BETWEEN
PYRON CORPORATION
AND
CHEMICAL BANK
THIS AMENDMENT to the Letter of Credit Reimbursement
Agreement dated as of November 1, 1989, dated March 15, 1995, is
entered into between PYRON CORPORATION, a corporation organized
and existing under the laws of the State of New York (the
"Company"), and CHEMICAL BANK, a banking corporation organized
and existing under the laws of the State of New York (the
"Bank").
RECITALS
The Company and the Bank entered into a Letter of Credit
Reimbursement Agreement dated as of November 1, 1989, as amended
by the First Amendment to Letter of Credit Reimbursement
Agreement dated as of March 19, 1990 (the "Reimbursement
Agreement"), and now desire to amend certain provisions thereof
on the terms and conditions hereinafter set forth.
AGREEMENT
In consideration of the premises, the mutual covenants
contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby mutually
acknowledged, the Company and the Bank agree as follows:
1. The definition of Corporate Guaranty in Section 1.01 is
hereby amended to read as follows:
"Corporate Guaranty" shall mean the Amended and
Restated Corporate Guaranty dated as of March 15, 1995,
as may be amended from time to time, from the Corporate
Guarantor to the Bank."
2. The definiton of "Loan Agreement" is hereby added to
Section 1.01 to read as follows:
"Loan Agreement" shall mean the Loan and Security
Agreement made as of the 15th day of March, 1995, by
and among Zemex Corporation, a Delaware corporation,
The Feldspar Corporation, a North Carolina corporation,
Pyron Corporation, a New York corporation, Pyron Metal
Powders, Inc., a Delaware corporation, Suzorite Mica
Products, Inc., an Ontario corporation, Suzorite
Mineral Products, Inc., a Delaware corporation,
NationsBank of Tennessee, N.A. and Chemical Bank."
3. Section 2.03(a) of the Reimbursement Agreement with
respect to fees shall be amended to read as follows:
Section 2.03. Fees.
. . .
(a) A letter of credit fee, payable quarterly in
arrears on the last Business Day of each calendar
quarter commencing with a payment on the first such
date following the Date of Issuance for the period of
time from the Date of Issuance to the Expiration Date
at a rate equal to 1.00% per annum in excess of the
Applicable Letter of Credit Fee Margin on the Letter of
Credit Amount; provided, however, that within ten (10)
days after the end of each calendar quarter the actual
fee due with respect to such calendar quarter shall be
calculated by the Bank on the average daily amount of
the Letter of Credit Amount during such calendar
quarter taking into account the amount of any
reduction and reinstatement of the Principal Component
or Interest Component, as defined in the Letter of
Credit and (i) in the event that any overpayment of
the Letter of Credit fee has been made with respect to
such calendar quarter, then the excess amount paid
shall be credited against the Letter of Credit fee
payable in respect of the next succeeding calendar
quarter (unless the quarter in respect of which the fee
was paid was the last calendar quarter with respect to
which any such fee is payable hereunder, in which case
the Bank shall remit the excess to the Company promptly
following calculation of the actual fee), and (ii) in
the event that an underpayment of the Letter of Credit
fee has been made with respect to such calendar
quarter, then the difference between the amount paid
and the amount owed shall be paid together with the
Letter of Credit fees payable in respect of the next
succeeding calendar quarter (unless the quarter in
respect of which the fee was paid was the last calendar
quarter with respect to which any such fee is payable
hereunder, in which case the Company shall remit the
deficiency to the Bank promptly following calculation
of the actual fee). "Applicable Letter of Credit Fee
Margin" means one percent (1.0%) per annum; provided
however, that during any fiscal quarter of the Borrower
where the Borrower shall have satisfied the Funded Debt
to Capital ratio test indicated in the table below,
then the Applicable Letter of Credit Fee Margin for the
Effective Period (as defined below) shall be the
percentage rate per annum set forth opposite the
appropriate test in the table below:
Funded Debt to Capital Applicable Letter of
Credit Fee Margin
Equal to or Greater than 35% 1.00%
per annum
Equal to or Greater than 25% and Less Than 35% .05%
per annum
Less than 25% .00%
per annum
The Funded Debt to Capital ratio shall be computed as
set forth in Section 3.16(b) of the Corporate Guaranty,
and the Applicable Letter of Credit Rate Margin shall
be confirmed by the Bank on the basis of quarter-annual
financial statements of the Corporate Guarantor
delivered to the Bank pursuant to Section 3.01(a) of
the Corporate Guaranty and year end financial
statements delivered pursuant to Section 3.01(b) of the
Corporate Guaranty. The "Effective Period" shall be
the period commencing on the first business day of the
first month following delivery to the Bank of the
financial statements of the Corporate Guarantor
pursuant to Section 3.01(a) and 3.01(b) of the
Corporate Guaranty, which financial statements indicate
that the applicable test set forth above has been
satisfied for the preceding fiscal quarter, and ending
on the date that is three months after such
commencement date except for the third and fourth
fiscal quarters of each year, where the ending date
shall be four months after the commencement date and
two months after the commencement date, respectively.
At the end of any Effective Period, the Applicable
Letter of Credit Fee Margin shall automatically become
one percent (1%) per annum unless at or prior to such
time the next Effective Period shall have commenced.
4. Sections 7.03, 7.04, 7.07, 7.09, 7.11, 7.14, 8.02,
8.03, 8.04, 8.05, 8.06, 8.07, 8.08 and 8.09 of the Reimbursement
Agreement are hereby deleted.
5. Section 7.05 is amended to read as follows:
Section 7.05 Notice of Lawsuits, Material
Adverse Changes, Etc. Promptly inform the Bank of each
of the following promptly after the Company knows or
has reason to know:
(a) of the commencement of which it has knowledge,
of any action, suit, claim, counterclaim or proceeding
against or any audit or investigation by any
governmental or regulatory body of it which questions
the validity of this Reimbursement Agreement, any
Related Document or any other agreement or instrument
required hereunder, or any action taken or to be taken
pursuant to any of the foregoing; or
(b) of any representation or warranty in this
Reimbursement Agreement which was or has proven to be
incorrect in any material respect on or as of the date
made or deemed made.
6. Section 9.01(l) is hereby added to read as follows:
Section 9.01 Events of Default.
. . .
(l) The occurance and continuance of an Event of
Default under the Loan Agreement:
7. The notification addresses set forth in Section 10.02
are hereby amended to read as follows:
To the Company:
Pyron Corporation
5950 Packard Road
Niagara Falls, New York 14094
Attn: President
Copy to the Corporate Guarantor:
Zemex Corporation
Canada Trust Tower
BCE Place, 161 Bay Street
Suite 3750
Toronto, Ontario M5J 251
Attn: Chief Financial Officer
Facsimile: (416) 365-8094
To the Bank:
Chemical Bank
2300 Main Place Tower
Buffalo, New York 14202
Attention: Account Officer for Pyron
Corporation
Facsimile: (716) 843-4939
8. The Company hereby represents and warrants to the Bank
as follows:
(a) Corporate Existence. The Company and its Guaranty
Subsidiaries are duly organized, validly existing and in
good standing under the laws of the respective jurisdictions
of their incorporation, have the corporate power to own
their assets and to transact the businesses in which they
are currently engaged, and are duly qualified as foreign
corporations and in good standing under the laws of each
jurisdiction where their ownership or lease of property or
the conduct of their business requires such qualification
except in jurisdictions where the failure to become so
qualified, in any case or in the aggregate, would not have a
material adverse effect on the business, operations, assets
or financial condition of the Company and its Guaranty
Subsidiaries taken as a whole.
(b) Corporate Power; Authorization; Enforceable
Obligations. The Company has the corporate power, authority
and legal right to make, deliver and perform this
Reimbursement Agreement Amendment has taken all necessary
corporate action to authorize the borrowings on the terms
and conditions of this Reimbursement Agreement as heretofore
and herein and to authorize its execution, delivery and
performance of this Reimbursement Agreement Amendment. No
consent of any Person (including, without limitation,
stockholders or creditors of the Company), and no consent,
license, permit, approval or authorization of, exemption by,
notice or report to, or registration, filing or declaration
with, any governmental authority which has not been obtained
is required on the part of the Company in connection with
its borrowings hereunder or with the execution, delivery or
performance by the Company, or the validity or
enforceability against the Company of this Reimbursement
Agreement Amendment; provided, however, that no
representation or warranty is made as to any state
securities or "Blue Sky" laws. This Reimbursement Agreement
Amendment has been executed and delivered by a duly
authorized officer of the Company and constitutes the legal,
valid and binding obligations of the Company.
c. No Legal Bar to Loans. The execution, delivery
and performance of this Reimbursement Agreement Amendment
and will not constitute a violation by the Company of any
provision of any existing law or regulation, or of any
order, judgment, award or decree of any court, arbitrator or
governmental authority, or of the Certificate of
Incorporation or By-Laws of the Company or any of its
Subsidiaries, or of any securities issued by the Company or
any of its Subsidiaries, or of any mortgage, indenture or
lease, or any material contract or other material agreement,
instrument or undertaking to which the Company or any of its
Subsidiaries is a party or by which the Company or any of
its Subsidiaries or any of their respective assets may be
bound, and will not result in, or require, the creation or
imposition of any Lien on any of the property, assets or
revenues of the Company pursuant to the provisions of any
such mortgage, indenture, lease, contract or other
agreement, instrument or undertaking except as contemplated
hereby or by any of the Company Related Documents; provided,
however, that no representation or warranty is made as to
any state securities or "Blue Sky" laws.
d. No Default. No Event of Default specified in
Article IX of the Reimbursement Agreement, nor any event
which, upon notice or lapse of time or both, would
constitute such an Event of Default, has occurred and is
continuing.
9. Except as specifically amended by the terms hereof, the
Reimbursement Agreement shall remain in full force and effect in
accordance with its terms.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be duly executed on the date first above written.
ATTEST: PYRON CORPORATION
By:/s/ Patricia Mora By:/s/ Allen J. Pamiere
Assistant Secretary Vice President
[SEAL]
CHEMICAL BANK
By:
Daniel J. Zimmer,
Vice President