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EXHIBIT 10.21
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SIMCALA, INC.
REIMBURSEMENT AGREEMENT
Dated as of January 12, 2001
BANK OF AMERICA, N.A.
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TABLE OF CONTENTS
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ARTICLE I - DEFINITIONS................................................................................. 1
SECTION 1.1. DEFINITIONS.............................................................................. 1
SECTION 1.2. OTHER DEFINITIONAL PROVISIONS............................................................ 3
ARTICLE II - THE CREDIT.................................................................................. 4
SECTION 2.1. ADVANCES............................................................................... 4
SECTION 2.2. REPAYMENT OF ADVANCES.................................................................. 4
SECTION 2.3. INTEREST................................................................................ 4
SECTION 2.4. FEE..................................................................................... 4
SECTION 2.5. YIELD PROTECTION........................................................................ 5
SECTION 2.6. VERIFICATION............................................................................ 5
SECTION 2.7. COMMERCIAL PRACTICES.................................................................... 5
SECTION 2.8. MODIFICATIONS........................................................................... 6
SECTION 2.9. SEPARATE TRANSACTION.................................................................... 6
SECTION 2.10. TAXES.................................................................................. 6
ARTICLE III - PAYMENTS.................................................................................. 7
SECTION 3.1. METHOD OF PAYMENT....................................................................... 7
SECTION 3.2. PREPAYMENT.............................................................................. 7
SECTION 3.3. COMPUTATION OF INTEREST................................................................. 7
ARTICLE IV - SECURITY................................................................................... 7
SECTION 4.1. COLLATERAL.............................................................................. 7
SECTION 4.2. REGISTRATION............................................................................ 8
ARTICLE V - CONDITIONS PRECEDENT........................................................................ 8
SECTION 5.1. THE CREDIT.............................................................................. 8
ARTICLE VI - REPRESENTATIONS AND WARRANTIES............................................................. 9
SECTION 6.1. CORPORATE EXISTENCE..................................................................... 9
SECTION 6.2. FINANCIAL STATEMENTS.................................................................... 9
SECTION 6.3. CORPORATE EXISTENCE; NO BREACH.......................................................... 10
SECTION 6.4. OPERATION OF BUSINESS................................................................... 10
SECTION 6.5. LITIGATION AND JUDGMENTS................................................................ 10
SECTION 6.6. RIGHTS IN PROPERTIES; LIENS............................................................. 10
SECTION 6.7. ENFORCEABILITY.......................................................................... 10
SECTION 6.8. APPROVALS............................................................................... 10
SECTION 6.9. DEBT.................................................................................... 11
SECTION 6.10. TAXES.................................................................................. 11
SECTION 6.11. ERISA.................................................................................. 11
SECTION 6.12. DISCLOSURE............................................................................. 11
SECTION 6.13. SUBSIDIARIES........................................................................... 11
SECTION 6.14. AGREEMENTS............................................................................. 11
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SECTION 6.15. COMPLIANCE WITH LAWS................................................................... 12
SECTION 6.16. INVESTMENT COMPANY ACT................................................................. 12
SECTION 6.17. PUBLIC UTILITY HOLDING COMPANY ACT..................................................... 12
ARTICLE VII - POSITIVE COVENANTS........................................................................ 12
SECTION 7.1. REPORTING REQUIREMENTS.................................................................. 12
SECTION 7.2. MAINTENANCE OF EXISTENCE; CONDUCT OF BUSINESS........................................... 14
SECTION 7.3. MAINTENANCE OF PROPERTIES............................................................... 14
SECTION 7.4. TAXES AND CLAIMS........................................................................ 14
SECTION 7.5. INSURANCE............................................................................... 14
SECTION 7.6. INSPECTION RIGHTS....................................................................... 14
SECTION 7.7. KEEPING BOOKS AND RECORDS............................................................... 14
SECTION 7.8. COMPLIANCE WITH LAWS.................................................................... 14
SECTION 7.9. COMPLIANCE WITH AGREEMENTS.............................................................. 15
SECTION 7.10. FURTHER ASSURANCES..................................................................... 15
ARTICLE VIII - NEGATIVE COVENANTS....................................................................... 15
SECTION 8.1. TRANSACTIONS WITH AFFILIATES............................................................ 15
SECTION 8.2. NATURE OF BUSINESS...................................................................... 15
ARTICLE IX - DEFAULT.................................................................................... 15
SECTION 9.1. EVENTS OF DEFAULT....................................................................... 15
SECTION 9.2. REMEDIES UPON DEFAULT................................................................... 17
ARTICLE X - MISCELLANEOUS............................................................................... 17
SECTION 10.1. EXPENSES OF LENDER..................................................................... 17
SECTION 10.2. INDEMNITY.............................................................................. 17
SECTION 10.3. LIMITATION OF LIABILITY................................................................ 18
SECTION 10.4. NO DUTY................................................................................ 18
SECTION 10.5. LENDER NOT FIDUCIARY................................................................... 18
SECTION 10.6. EQUITABLE RELIEF....................................................................... 19
SECTION 10.7. NO WAIVER; CUMULATIVE REMEDIES......................................................... 19
SECTION 10.8. SUCCESSORS AND ASSIGNS................................................................. 19
SECTION 10.9. SURVIVAL............................................................................... 19
SECTION 10.10. ENTIRE AGREEMENT: AMENDMENT; EXISTING AGREEMENT; AMENDMENTS TO SECURITY AGREEMENT..... 19
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SECTION 10.11. MAXIMUM INTEREST RATE................................................................. 20
SECTION 10.12. NOTICES............................................................................... 21
SECTION 10.13. APPLICABLE LAW........................................................................ 21
SECTION 10.14. COUNTERPARTS.......................................................................... 22
SECTION 10.15. SEVERABILITY.......................................................................... 22
SECTION 10.16. HEADINGS.............................................................................. 22
SECTION 10.17. PARTICIPATIONS........................................................................ 22
SECTION 10.18. CONSTRUCTION.......................................................................... 22
SECTION 10.19. WAIVER OF JURY TRIAL.................................................................. 22
SECTION 10.20. RELEASE............................................................................... 22
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REIMBURSEMENT AGREEMENT
THIS REIMBURSEMENT AGREEMENT ("Agreement"), dated as of January 12,
2001, is between SIMCALA, INC., a Delaware corporation ("Applicant"), and BANK
OF AMERICA, N.A., a national banking association formerly known as NationsBank,
N.A. ("Lender").
RECITALS:
Pursuant to that certain Credit Agreement dated as of March 31, 1998,
between Applicant and Lender (as amended, the "Existing Agreement"), Lender
heretofore issued for the account of Applicant its letter of credit number
970696 dated March 31, 1998, in favor of Regions Bank, as trustee
("Beneficiary"), in the amount of $6,147,946 by order and for the account of
Applicant. Lender and Applicant desire to amend and restate in its entirety the
Existing Agreement.
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
Definitions
Section 1.1. Definitions. As used in this Agreement, the following
terms have the following meanings:
"Advance" means any payment by Lender of drafts drawn and presented in
accordance with the terms of the Credit.
"Affiliate" means, as to any Person, any other Person (i) that directly
or indirectly, through one or more intermediaries, controls or is controlled by,
or is under common control with, such Person; (ii) that directly or indirectly
beneficially owns or holds five percent (5%) or more of any class of voting
stock of such Person; or (iii) five percent (5%) or more of the voting stock of
which is directly or indirectly beneficially owned or held by the Person in
question. The term control means the possession, directly or indirectly, of the
power to direct or cause direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract, or otherwise;
provided, however, in no event shall Lender be deemed an Affiliate of Applicant
or any of its Subsidiaries.
"Business Day" means any day on which commercial banks are not
authorized or required to close in Dallas, Texas.
"Code" means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated and rulings issued thereunder.
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"Collateral" has the meaning specified in Section 4. 1.
"Credit" means irrevocable letter of credit number 970696 issued by
Lender for the account of Applicant and for the benefit of Beneficiary, in
substantially the form of Exhibit "B" hereto, as the same may be amended,
supplemented or modified.
"Default Rate" means the sum of the Base Rate in effect from day to day
plus three and one quarter percent (3.25%), but in no event to exceed the
Maximum Rate.
"Dollars" and "$" means lawful money of the United States of America.
"Event of Default" has the meaning specified in Section 9. 1.
"GAAP" means generally accepted accounting principles, applied on a
consistent basis, as set forth in Opinions of the Accounting Principles Board of
the American Institute of Certified Public Accountants and/or in statements of
the Financial Accounting Standards Board and/or their respective successors and
which are applicable in the circumstances as of the date in question. Accounting
principles are applied on a "consistent basis" when the accounting principles
observed in a current period are comparable in all material respects to those
accounting principles applied in a preceding period.
"Loan Documents" means this Agreement and all promissory notes,
security agreements, deeds of trust, assignments, guaranties, and other
instruments, documents, and agreements executed and delivered pursuant to or in
connection with this Agreement, as such instruments, documents, and agreements
may be amended, modified, renewed, extended, or supplemented from time to time.
"Maximum Rate" means the maximum rate of nonusurious interest permitted
from day to day by applicable law, including as to Chapter 303, Texas Finance
Code (and as the same may be incorporated by reference in other Texas statutes),
but otherwise without limitation, that rate based upon the "weekly rate ceiling"
and calculated after taking into account any and all relevant fees, payments,
and other charges in respect of the Loan Documents which are deemed to be
interest under applicable law.
"Note" means the promissory note of Applicant payable to the order of
Lender, in substantially the form of Exhibit "A" hereto, and all extensions,
renewals, and modifications thereof.
"Obligated Party" means any Person who is or becomes party to any
agreement that guarantees or secures payment and performance of the Obligations
or any part thereof.
"Obligations" means all obligations, indebtedness, and liabilities of
Applicant to Lender, now existing or hereafter arising, whether direct,
indirect, related, unrelated,
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fixed, contingent, liquidated, unliquidated, joint, several, or joint and
several, including, without limitation, the obligations, indebtedness, and
liabilities of Applicant under this Agreement and the other Loan Documents, and
all interest accruing thereon and all attorneys' fees and other expenses
incurred in the enforcement or collection thereof.
"Person" means any individual, corporation, business trust,
association, company, partnership, joint venture, governmental authority, or
other entity.
"Prime Rate" means, at any time, the rate of interest per annum then
most recently established by Lender as its prime rate, which rate may not be the
lowest rate of interest charged by Lender to its customers.
"Reimbursement Obligation" means the obligation of Applicant under
Section 2.2 hereof and the Note to reimburse Lender for the amount of any
drawing under the Credit.
"Regulatory Change" means any change after the date of this Agreement
in federal, state, or foreign laws or regulations or the adoption or the making
after such date of any interpretation, directive, or request applying to a class
of banks including Lender of or under any federal, state, or foreign laws or
regulations (whether or not having the force of law) by any court or any
governmental or monetary authority charged with the interpretation or
administration thereof.
"Security Agreement" means the Assignment of Cash Collateral Account of
Applicant dated as of January 25, 1999, as the same may be amended,
supplemented, or modified.
"Subsidiary" means any corporation of which more than fifty percent
(50%) of the issued and outstanding securities having ordinary voting power for
the election of a majority of directors is owned or controlled, directly or
indirectly, by Applicant, by Applicant and one or more other Subsidiaries, or by
one or more other Subsidiaries.
Section 1.2. Other Definitional Provisions. All definitions contained
in this Agreement are equally applicable to the singular and plural forms of the
terms defined. The words "hereof", "herein", and "hereunder" and words of
similar import referring to this Agreement refer to this Agreement as a whole
and not to any particular provision of this Agreement. Unless otherwise
specified, all Article and Section references pertain to this Agreement. All
accounting terms not specifically defined herein shall be construed in
accordance with GAAP. Terms used herein that are defined in the Uniform
Commercial Code as adopted by the State of Texas, unless otherwise defined
herein, shall have the meanings specified in the Uniform Commercial Code as
adopted by the State of Texas.
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ARTICLE II
The Credit
Section 2.1. Advances. Each payment by Lender pursuant to a drawing
under the Credit shall constitute and be deemed an Advance by Lender to
Applicant under this Agreement as of the day and time such payment is made by
Lender and in the amount of such payment. Notwithstanding anything to the
contrary contained in this Agreement, Applicant shall have no right to borrow
and Lender shall have no duty to lend hereunder, except to the extent of the
payment of drafts drawn and presented in accordance with the terms of the
Credit. Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the indebtedness of Applicant to Lender resulting from
each Advance made by Lender from time to time, including the amounts of
principal and interest payable and paid to Lender from time to time hereunder.
The entries maintained in such accounts shall be prima facie evidence of the
existence and amounts of the Obligations therein recorded; provided, however,
that the failure of Lender to maintain such accounts or any error therein shall
not in any manner effect the obligation of Applicant to repay the Obligations in
accordance with the terms of this Agreement. The sole letter of credit issued
under this Agreement is the Credit, and Lender shall maintain the issuance
thereof in accordance with the Credit's terms.
Section 2.2. Repayment of Advances. Applicant shall repay to Lender the
Advances by 11:00 a.m. Central Standard Time on the date on which Lender is
obligated to pay a drawing under the Credit.
Section 2.3. Interest. The unpaid principal amount of the Advances
shall bear interest prior to maturity at a varying rate per annum equal from day
to day to the Default Rate, each such change in the rate of interest charged
hereunder to become effective, without notice to Applicant, on the effective
date of each change in the Prime Rate or the Maximum Rate, as the case may be;
provided, however, if at any time the rate of interest shall exceed the Maximum
Rate, thereby causing the interest on the Advances to be limited to the Maximum
Rate, then any subsequent reduction in the Prime Rate shall not reduce the rate
of interest on the Advances below the Maximum Rate until the aggregate amount of
interest accrued on the Advances equals the aggregate amount of interest which
would have accrued on the Advances if the interest rate specified in clause (b)
preceding had at all times been in effect. Accrued and unpaid interest on the
Advances shall be due and payable on demand.
Section 2.4. Fee. Applicant shall pay Lender a letter of credit fee on
demand, or if no demand is sooner made, quarterly in arrears on the last
Business Day of each March, June, September and December for the immediately
preceding quarter (or portion thereof) in an amount equal to one percent (1.00%)
per annum of the initial amount of the Credit, for the period during which the
Credit will remain outstanding, based on a 360 day year and the actual number of
days elapsed.
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Section 2.5. Yield Protection. Upon demand by Lender, Applicant shall
pay to Lender from time to time such amounts as Lender may determine to be
necessary to compensate it for any costs which Lender determines are
attributable to its issuance of the Credit or its obligation to honor drafts
drawn and presented in accordance with the terms of the Credit (such increases
in costs being hereinafter referred to as "Additional Costs") resulting from any
Regulatory Change which: (i) imposes or modifies any reserve, special deposit,
minimum capital, capital ratio, or similar requirements relating to letters of
credit issued by, assets of, or any deposits with or other liabilities of
Lender, or (ii) imposes any other condition affecting this Agreement or the
Credit. Determinations and allocations by Lender of Additional Costs caused by
any Regulatory Change shall, in the absence of manifest error, be conclusive and
binding for all purposes as to the amount thereof.
Section 2.6. Verification. Lender shall have no duty to verify or make
any inquiry with regard to the truth or accuracy of any statement made in any
draft or document presented to Lender under the Credit, nor shall Lender have
any duty to make any inquiry into the genuineness of any signature on any such
draft or document or into the due authorization of any party to execute and/or
present such draft or document or to receive payment under any drafts drawn
under Credit.
Section 2.7. Commercial Practices. Neither Lender nor any of Lender's
correspondents shall be liable or have any responsibility for: (i) the failure
of any draft to bear any reference or adequate reference to the Credit, or the
failure of any documents to accompany any draft at negotiation, or the failure
of any Person to surrender or to take up the Credit or to send documents apart
from drafts as required by the terms of the Credit, or the failure of any Person
to note the amount of any instrument on the Credit, each of which requirements,
if contained in the Credit itself, it is agreed may be waived by Lender, (ii)
errors, omissions, interruptions, or delays in transmission or delivery of any
messages, in person, by mail, cable, telegraph, wireless or otherwise whether or
not they may be in cipher, (iii) any use which may be made of the Credit, (iv)
any acts or omissions of Beneficiary (whether or not related to the Credit), (v)
the validity, sufficiency, or genuineness of documents, or any endorsement(s)
thereon, even if such documents should in fact prove to be in any and all
respects invalid, insufficient, fraudulent, or forged, or (vi) the payment by
Lender to the beneficiary of the Credit against presentation of any draft or
other document that does not comply with the terms of the Credit, except, in
each case, where such act or omission constitutes gross negligence or willful
misconduct. Lender shall not be responsible for any act, error, neglect,
default, omission, insolvency, or failure in business of any of Lender's
correspondents, and the happening of any one or more of the contingencies
referred to in this sentence or the preceding sentence shall not affect, impair,
or prevent the vesting of any of Lender's rights or powers under this Agreement
and the other Loan Documents. Lender and/or any of Lender's correspondents may
receive, accept, or pay as complying with the terms of the Credit, any drafts or
other documents, otherwise in order, which may be signed by, or issued to, the
administrator or executor of, or the trustee in bankruptcy of, or the receiver
for any of the property of, the party in whose name the Credit provides that any
drafts or any other documents should be drawn or issued. In
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furtherance and extension and not in limitation of the foregoing provisions, it
is hereby further agreed that any action, inaction, or omission taken or
suffered by Lender, or by any of Lender's correspondents, under or in connection
with the Credit or any drafts or documents referenced therein, if in good faith
and in conformity with such foreign or domestic laws and customs or other
regulations as Lender or any of Lender's correspondents may deem to be
applicable thereto, shall be binding upon Applicant and shall not place Lender
or any of Lender's correspondents under any resulting liability to Applicant.
Section 2.8. Modifications. In the event of any change or modification
with respect to: (i) the amount or duration of the Credit; (ii) the drawing,
negotiation, presentation, acceptance, or maturity of any drafts or documents
referenced in the Credit, or (iii) any of the other terms or provisions of the
Credit, this Agreement shall be binding upon Applicant in all respects with
regard to the Credit as so changed or modified, inclusive of any action taken by
Lender or any of Lender's correspondents relative thereto.
Section 2.9. Separate Transaction. Applicant hereby acknowledges that
Lender has not made any representation in respect of and is not otherwise
connected with the transaction underlying the issuance of the Credit, except as
expressly provided herein. Applicant agrees that Lender may pay all drafts drawn
and presented in accordance with the terms of the Credit notwithstanding any
protests, objections, or instructions by Applicant.
Section 2.10. Taxes. Applicant covenants and agrees that whether or not
the Credit is issued hereunder:
(a) Applicant shall pay when due, for its own account, all
present and future stamp and other taxes and levies, imposts,
deductions, charges, compulsory loans and withholdings howsoever
imposed, assessed, levied or collected by any governmental or taxing
authority, together with interest thereon and penalties with respect
thereto, if any, on or relating to this Agreement, the Credit, or any
other Loan Document and all payments of commissions, principal,
interest, charges, fees, Reimbursement Obligation, Prepayment
Obligation or other amounts made on, under or in respect thereof (all
such taxes, levies, imposts, deductions, charges, compulsory loans and
withholdings, and related interest and penalties, other than taxes or
levies based on, imposed on, or measured by the net income or profits
of Lender and other than franchise taxes, doing business taxes or
minimum taxes imposed on it in the jurisdiction in which Lender is
organized or the jurisdiction in which the principal office or lending
office of Lender is located, being hereinafter called "Taxes"), and
Applicant will promptly furnish Lender tax receipts and other evidence
(if required by Lender) to demonstrate compliance with this Section
2.10.
(b) Applicant will indemnify Lender against and reimburse
Lender upon demand for any Taxes paid by Lender.
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(c) All payments of the Advances, the Prepayment Obligation,
interest, fees, default commissions and all other amounts payable by
Applicant to Lender hereunder or under any other Loan Document shall be
made free and clear of and without reduction by reason of Taxes.
(d) The covenants and agreements of Applicant under this
Section 2.10 shall survive the payment of Applicant's other obligations
under the Loan Documents and the cancellation or expiration of the
Credit.
ARTICLE III
Payments
Section 3.1. Method of Payment. All payments of principal, interest,
default commission, and other amounts to be made by Applicant under this
Agreement or any other Loan Document shall be made to Lender at its office at
901 Main Street, Dallas, Texas 75202, without setoff, deduction, or
counterclaim, in Dollars and in immediately available funds. Applicant shall, at
the time of making each such payment, specify to Lender the sums payable by
Applicant under this Agreement or other Loan Document to which such payment is
to be applied (and in the event Applicant fails to so specify, or if an Event of
Default has occurred and is continuing, Lender may apply such payment to the
Obligations in such order and manner as it may elect in its sole discretion).
Whenever any payment under this Agreement or any other Loan Document shall be
stated to be due on a day that is not a Business Day, such payment may be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest and commitment fee,
as the case may be.
Section 3.2. Prepayment. Applicant may terminate the Credit at any time
without premium or penalty.
Section 3.3. Computation of Interest. Interest on the Advances
outstanding from time to time shall be computed on the basis of a year of 360
days and the actual number of days elapsed (including the first day but
excluding the last day) unless such calculation would result in a usurious rate,
in which case interest shall be calculated on the basis of a year of 365 or 366
days, as the case may be.
ARTICLE IV
Security
Section 4.1. Collateral. To secure full and complete payment and
performance of the Obligations, Applicant shall execute and deliver or cause to
be executed and delivered the documents described below covering the property
and collateral described in this Section (which, together with any other
property and collateral which may now or
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hereafter secure the Obligations or any part thereof, is sometimes herein called
the "Collateral"):
(a) Applicant shall grant to Lender a first priority lien on
the deposit account number 3751246822 of Applicant maintained with
Lender, all amounts on deposit therein, and all proceeds thereof and
substitutions or replacements therefore pursuant to the Security
Agreement.
(b) Applicant shall execute and cause to be executed such
further documents and instruments, including, without limitation,
Uniform Commercial Code financing statements, as Lender, in its sole
discretion, deems necessary or desirable to evidence and perfect its
liens and security interests in the Collateral.
Section 4.2. Registration. Lender is hereby authorized, at Lender's
option and without any obligation to do so, to transfer to and/or register in
the name(s) of Lender's nominee(s) all or part of any of the Collateral which
may be held by Lender as security at any time for the Obligations or any part
thereof, and to do so before or after maturity of any of the Obligations and
with or without notice to Applicant.
ARTICLE V
Conditions Precedent
Section 5.1. The Credit. The obligation of Lender to accept and execute
this Agreement is subject to the condition precedent that Lender shall have
received all of the following, each of which shall be in form and substance
satisfactory to Lender:
(a) Resolutions. Resolutions of the Board of Directors of
Applicant certified by its Secretary or an Assistant Secretary which
authorize the execution, delivery, and performance by Applicant of this
Agreement and the other Loan Documents to which Applicant is or is to
be a party;
(b) Incumbency Certificate. A certificate of incumbency
certified by the Secretary or an Assistant Secretary of Applicant
certifying the names of the officers of Applicant authorized to sign
this Agreement and each of the other Loan Documents to which Applicant
is or is to be a party (including the certificates contemplated herein)
together with specimen signatures of such officers;
(c) Certificate of Incorporation. The certificate of
incorporation of Applicant certified by the Secretary of State of
Delaware and dated as of a date current with the date of execution of
this Agreement (or a certificate to the effect that no amendments to
the certificate of incorporation of Applicant have been adopted since
March 31, 1998);
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(d) Bylaws. The bylaws of Applicant certified by the Secretary
or an Assistant Secretary of Applicant (or a certificate to the effect
that no amendments to the bylaws of Applicant have been adopted since
March 31, 1998);
(e) Governmental Certificates. Certificates of the appropriate
government officials of the state of incorporation of Applicant as to
the existence and good standing of Applicant, each dated within ten
(10) days prior to the date hereof; and
(f) Attorneys' Fees and Expenses. Evidence that the costs and
expenses (including reasonable attorneys' fees) referred to in Section
10.1, to the extent incurred, shall have been paid in full by
Applicant.
ARTICLE VI
Representations and Warranties
To induce Lender to enter into this Agreement, Applicant represents and
warrants to Lender that:
Section 6.1. Corporate Existence. Applicant and each Subsidiary (a) is
a corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation; (b) has all requisite corporate
power and authority to own its assets and carry on its business as now being or
as proposed to be conducted; and (c) is qualified to do business in all
jurisdictions in which the nature of its business makes such qualification
necessary and where failure to so qualify would have a material adverse effect
on its business, condition (financial or otherwise), operations, prospects, or
properties. Applicant has the corporate power and authority to execute, deliver,
and perform its obligations under this Agreement and the other Loan Documents to
which it is or may become a party.
Section 6.2. Financial Statements. Applicant has delivered to Lender
audited consolidated financial statements of Applicant and its Subsidiaries as
at and for the fiscal year ended December 31, 1999, and unaudited consolidated
financial statements of Applicant and its Subsidiaries for the nine (9)-month
period ended September 30, 2000. Such financial statements are true and correct,
have been prepared in accordance with GAAP, and fairly and accurately present,
on a consolidated basis, the financial condition of Applicant and its
Subsidiaries as of the respective dates indicated therein and the results of
operations for the respective periods indicated therein. Neither Applicant nor
any of its Subsidiaries has any material contingent liabilities, liabilities for
taxes, material forward or long-term commitments, or unrealized or anticipated
losses from any unfavorable commitments not reflected in such financial
statements. There has been no material adverse change in the business, condition
(financial or otherwise), operations, prospects, or properties of Applicant or
any of its Subsidiaries since the effective date of the most recent financial
statements referred to in this Section.
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Section 6.3. Corporate Existence; No Breach. The execution, delivery,
and performance by Applicant of this Agreement, the other Loan Documents to
which Applicant is or may become a party, and the Applicant's Note and the
issuance of the Credit for the account of Applicant have been duly authorized by
all requisite action on the part of Applicant and do not and will not violate or
conflict with the articles of incorporation or bylaws of Applicant or any law,
rule, or regulation or any order, writ, injunction, or decree of any court,
governmental authority or arbitrator, and do not and will not conflict with,
result in a breach of, or constitute a default under, or result in the
imposition of any Lien (except as provided in Article IV) upon any of the
revenues or assets of Applicant or any Subsidiary pursuant to the provisions of
any indenture, mortgage, deed of trust, security agreement, franchise, permit,
license, or other instrument or agreement by which Applicant or any Subsidiary
or their respective properties is bound.
Section 6.4. Operation of Business. Applicant and each of its
Subsidiaries possess all licenses, permits, franchises, patents, copyrights,
trademarks, and tradenames, or rights thereto, to conduct their respective
businesses substantially as now conducted and as presently proposed to be
conducted, where the failure to so possess could reasonably be expected to have
a material adverse effect upon Applicant, and Applicant, and each of its
Subsidiaries are not in violation of any valid rights of others with respect to
any of the foregoing.
Section 6.5. Litigation and Judgments. There is no action, suit,
investigation, or proceeding before any court, governmental authority, or
arbitrator pending, or to the knowledge of Applicant, threatened against or
affecting Applicant or any Subsidiary, that would, if adversely determined, have
a material adverse effect on the business, condition (financial or otherwise),
operations, prospects, or properties of Applicant or any Subsidiary or the
ability of Applicant to pay and perform the Obligations. There are no
outstanding judgments against Applicant or any Subsidiary other than a judgment
against Applicant in the amount of $125,000 in favor of American Coal Trade
Association.
Section 6.6. Rights in Properties; Liens. Applicant and each Subsidiary
have good and indefeasible title to or valid leasehold interests in their
respective properties and assets, real and personal, including the properties,
assets, and leasehold interests reflected in the financial statements described
in Section 6.2.
Section 6.7. Enforceability. This Agreement and the Applicant's Note
constitute, and the other Loan Documents to which Applicant is party, when
delivered, shall constitute, the legal, valid, and binding obligations of
Applicant, enforceable against Applicant in accordance with their respective
terms, except as limited by bankruptcy, insolvency, or other laws of general
application relating to the enforcement of creditor's rights.
Section 6.8. Approvals. No authorization, approval, or consent of, and
no filing or registration with, any court, governmental authority, or third
party is or will be necessary for (i) the issuance of the Credit for the account
of Applicant, (ii) for the
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execution, delivery, or performance by Applicant of this Agreement and the other
Loan Documents to which Applicant is or may become a party or the validity or
enforceability thereof, (iii) the execution, delivery, and performance by
Applicant of the Applicant's Note, or (iv) otherwise in connection with the
transactions contemplated hereby.
Section 6.9. Debt. Applicant and its Subsidiaries have no Debt, except
as disclosed in the financial statements of Applicant heretofore delivered to
Lender.
Section 6.10. Taxes. Applicant and each Subsidiary have filed all tax
returns (federal, state and local) required to be filed, including all income,
franchise, employment, property, and sales taxes, and have paid all of their
respective liabilities for taxes, assessments, governmental charges, and other
levies that are due and payable, and Applicant knows of no pending investigation
of Applicant or any Subsidiary by any taxing authority or of any pending but
unassessed tax liability of Applicant or any Subsidiary.
Section 6.11. ERISA. Applicant and each Subsidiary have complied with
all applicable minimum funding requirements and all other applicable and
material requirements of the ERISA and there are no existing conditions that
would give rise to liability thereunder. No Reportable Event has occurred in
connection with any Plan that might constitute grounds for the termination
thereof by the PBGC or for the appointment by the appropriate United States
District Court of a trustee to administer such Plan.
Section 6.12. Disclosure. No statement, information, report,
representation, or warranty made by Applicant in this Agreement or in any other
Loan Document or furnished to Lender in connection with the negotiation or
preparation of this Agreement contains any untrue statement of a material fact
or omits to state any material fact necessary to make the statements herein or
therein not misleading. There is no fact known to Applicant which has a material
adverse effect, or which might in the future have a material adverse effect, on
the business, condition (financial or otherwise), operations, prospects, or
properties of Applicant or any Subsidiary that has not been disclosed in writing
to Lender.
Section 6.13. Subsidiaries. Applicant has no Subsidiaries.
Section 6.14. Agreements. Neither Applicant nor any Subsidiary is a
party to any indenture, loan, or credit agreement, or to any lease or other
agreement or instrument, or subject to any charter or corporate restriction
which could have a material adverse effect on the business, properties, assets,
operations, or conditions, financial or otherwise, of Applicant or any
Subsidiary, or the ability of Applicant to pay and perform its obligations under
the Loan Documents to which it is a party. Neither Applicant nor any Subsidiary
is in default in any respect in the performance, observance, or fulfillment of
any of the obligations, covenants, or conditions contained in any agreement or
instrument material to its business to which it is a party.
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Section 6.15. Compliance with Laws. Neither Applicant nor any
Subsidiary is in violation in any material respect of any law, rule, regulation,
order, or decree of any court, governmental authority, or arbitrator.
Section 6.16. Investment Company Act. Neither Applicant nor any
Subsidiary is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
Section 6.17. Public Utility Holding Company Act. Neither Applicant nor
any Subsidiary is a "holding company" or a "subsidiary company" of a "holding
company" or an "affiliate" of a "holding company" or a "public utility" within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
ARTICLE VII
Positive Covenants
Applicant covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or Lender has any commitment hereunder, Applicant
will perform and observe the following positive covenants, unless Lender shall
otherwise consent in writing:
Section 7.1. Reporting Requirements. Applicant will furnish to Lender:
(a) Annual Financial Statements. As soon as available, and in
any event within ninety (90) days after the end of each fiscal year of
Applicant, beginning with the fiscal year ending December 31, 2000, (i)
a copy of the annual audit report of Applicant and the Subsidiaries for
such fiscal year containing, on a consolidated basis, balance sheets,
statements of income, statements of retained earnings, and statements
of cash flows as at the end of such fiscal year and for the 12-month
period then ended, in each case setting forth in comparative form the
figures for the preceding fiscal year, all in reasonable detail and
audited and certified by independent certified public accountants of
recognized standing acceptable to Lender, to the effect that such
report has been prepared in accordance with GAAP, together with
Applicant's Form 10-K as filed with the Securities and Exchange
Commission; and (ii) an opinion of such independent certified public
accountants to the effect that such financial statements have been
prepared in accordance with GAAP (except for changes with which such
accountants shall concur) and which opinion shall not be limited as to
the scope of the audit or qualified as to the status of Applicant as a
going concern;
(b) Quarterly Financial Statements. As soon as available, and
in any event within forty-five (45) days after the end of each of the
quarters of each fiscal year of Applicant, a copy of an unaudited
financial report of Applicant and the Subsidiaries as of the end of
such fiscal quarter and for the portion of the fiscal year then ended,
containing, on a consolidated basis, balance sheets,
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statements of income, statements of retained earnings, and statements
of cash flows, in each case setting forth in comparative form the
figures for the corresponding period of the preceding fiscal year, all
in reasonable detail certified by the chief financial officer of
Applicant to have been prepared in accordance with GAAP and to fairly
and accurately present (subject to year-end audit adjustments) the
financial condition and results of operations of Applicant and the
Subsidiaries, on a consolidated basis, at the date and for the periods
indicated therein, together with Applicants Form 10-Q as filed with the
Securities and Exchange Commission;
(c) Management Letters. Promptly upon a request therefor by
Lender, a copy of any management letter or written report submitted to
Applicant or any Subsidiary by independent certified public accountants
with respect to the business, condition (financial or otherwise),
operations, prospects, or properties of Applicant or any Subsidiary;
(d) Notice of Litigation. Promptly after the commencement
thereof, notice of all material actions, suits, and proceedings before
any court or governmental department, commission, board, bureau,
agency, or instrumentality, domestic or foreign, affecting Applicant or
any Subsidiary which, if determined adversely to Applicant or such
Subsidiary, could have a material adverse effect on the business,
condition (financial or otherwise), operations, prospects, or
properties of Applicant or such Subsidiary;
(e) Notice of Default. As soon as possible and in any event
within five (5) days after the occurrence of each Event of Default and
each event which, with the giving of notice or lapse of time or both,
would constitute an Event of Default, a written notice setting forth
the details of such Event of Default or event and the action which
Applicant has taken and proposes to take with respect thereto;
(f) Reports to Other Creditors. Promptly after the request
therefor by Lender, copies of any statement or report furnished to any
other party pursuant to the terms of any indenture, loan, or credit or
similar agreement and not otherwise required to be furnished to Lender
pursuant to any other clause of this Section;
(g) Notice of Material Adverse Effect. As soon as possible and
in any event within five (5) days after the occurrence thereof, written
notice of any matter that could reasonably be expected to have a
material adverse effect on the business, condition (financial or
otherwise), operations, prospects, or properties of Applicant or any
Subsidiary;
(h) General Information. Promptly, such other information
concerning Applicant or any Subsidiary as Lender may from time to time
reasonably request.
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Section 7.2. Maintenance of Existence; Conduct of Business. Applicant
will preserve and maintain, and will cause each Subsidiary to preserve and
maintain, its corporate existence and all of its leases, privileges, licenses,
permits, franchises, qualifications and rights that are necessary or desirable
in the ordinary conduct of its business, and conduct, and cause each Subsidiary
to conduct, its business as presently conducted in an orderly and efficient
manner in accordance with good business practices except where the failure to do
so could not reasonably be expected to have a material adverse effect upon
Applicant.
Section 7.3. Maintenance of Properties. Applicant will maintain, keep,
and preserve, and cause each Subsidiary to maintain, keep, and preserve, all of
its properties (tangible and intangible) necessary or useful in the proper
conduct of its business in good working order and condition.
Section 7.4. Taxes and Claims. Applicant will pay or discharge, and
will cause each Subsidiary to pay or discharge, at or before maturity or before
becoming delinquent (i) all taxes, levies, assessments, and governmental charges
imposed on it or its income or profits or any of its property, and (ii) all
lawful claims for labor, material, and supplies, which, if unpaid, might become
a Lien upon any of its property; provided, however, that neither Applicant nor
any Subsidiary shall be required to pay or discharge any tax, levy, assessment,
or governmental charge which is being contested in good faith by appropriate
proceedings diligently pursued, and for which adequate reserves have been
established.
Section 7.5. Insurance. Applicant will maintain, and will cause each
Subsidiary to maintain, with financially sound and reputable insurance
companies, workmen's compensation insurance, liability insurance, and insurance
on its property, assets, and business at least in such amounts and against such
risks as are usually insured against by Persons engaged in similar businesses.
Section 7.6. Inspection Rights. At any reasonable time and from time to
time during normal working hours, Applicant will permit, and will cause each
Subsidiary to permit, representatives of Lender to examine and make copies of
the books and records of, and visit and inspect the properties of Applicant and
any Subsidiary, and to discuss the business, operations, and financial condition
of Applicant and the Subsidiaries with their respective officers and employees
and, with their independent certified public accountants.
Section 7.7. Keeping Books and Records. Applicant will maintain, and
will cause each Subsidiary to maintain, proper books of record and account in
which full, true, and correct entries in conformity with GAAP shall be made of
all dealings and transactions in relation to its business and activities.
Section 7.8. Compliance with Laws. Applicant will comply, and will
cause each Subsidiary to comply, in all material respects with all applicable
laws, rules, regulations, orders, or decrees of any court, governmental
authority, or arbitrator, except for instances
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of noncompliance where the failure to so comply could not reasonably be expected
to have a material adverse effect upon Applicant.
Section 7.9. Compliance with Agreements. Applicant will comply, and
will cause each Subsidiary to comply, in all material respects with all material
agreements, contracts, and instruments binding on it or affecting its properties
or business.
Section 7.10. Further Assurances. Applicant will execute and deliver,
and will cause each Subsidiary to execute and deliver, such further instruments
as may be requested by Lender to carry out the provisions and purposes of this
Agreement and the other Loan Documents and to preserve and perfect the Liens of
Lender in the Collateral.
ARTICLE VIII
Negative Covenants
Applicant covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or Lender has any commitment hereunder, Applicant
will perform and observe the following negative covenants, unless Lender shall
otherwise consent in writing:
Section 8.1. Transactions With Affiliates. Applicant will not enter
into, and will not permit any Subsidiary to enter into, any transaction,
including, without limitation, the purchase, sale, or exchange of property or
the rendering of any service, with any Affiliate of Applicant or such
Subsidiary, except in the ordinary course of and pursuant to the reasonable
requirements of Applicant's or such Subsidiary's business and upon fair and
reasonable terms no less favorable to Applicant or such Subsidiary than would be
obtained in a comparable arms-length transaction with a Person not an Affiliate
of Applicant or such Subsidiary.
Section 8.2. Nature of Business. Applicant will not, and will not
permit any Subsidiary to, engage in any business other than the businesses in
which they are engaged as of the date hereof or any business reasonably related
thereto.
ARTICLE IX
Default
Section 9.1. Events of Default. Each of the following shall be deemed
an "Event of Default":
(a) Applicant shall fail to pay when due the Obligations or
any part thereof.
(b) Any representation or warranty made or deemed made by
Applicant or any Obligated Party (or any of their respective officers)
in any Loan
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Document or in any certificate, report, notice, or financial statement
furnished at any time in connection with this Agreement shall be false,
misleading, or erroneous in any material respect when made or deemed to
have been made.
(c) Applicant or any Obligated Party shall fail to perform,
observe, or comply with any covenant, agreement or term contained in
this Agreement or any other Loan Document.
(d) Applicant, any Subsidiary, or any Obligated Party shall
commence a voluntary proceeding seeking liquidation, reorganization, or
other relief with respect to itself or its debts under any bankruptcy,
insolvency, or other similar law now or hereafter in effect or seeking
the appointment of a trustee, receiver, liquidator, custodian, or other
similar official of it or a substantial part of its property or shall
consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other
proceeding commenced against it or shall make a general assignment for
the benefit of creditors or shall generally fail to pay its debts as
they become due or shall take any corporate action to authorize any of
the foregoing.
(e) An involuntary proceeding shall be commenced against
Applicant, any Subsidiary, or any Obligated Party seeking liquidation,
reorganization, or other relief with respect to it or its debts under
any bankruptcy, insolvency, or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official for it or a substantial part of its
property, and such involuntary proceeding shall remain undismissed and
unstayed for a period of sixty (60) days.
(f) Applicant, any Subsidiary, or any Obligated Party shall
fail to discharge within a period of thirty (30) days after the
commencement thereof any attachment, sequestration, or similar
proceeding or proceedings involving an aggregate amount in excess of
One Million Dollars ($1,000,000) against any of its assets or
properties.
(g) Applicant, any Subsidiary, or any Obligated Party shall
fail to satisfy and discharge promptly any judgment or judgments
against it for the payment of money in an amount in excess of One
Million Dollars ($1,000,000).
(h) Applicant, any Subsidiary, or any Obligated Party shall
fail to pay when due any principal of or interest on any Debt (other
than the Obligations), or the maturity of any such Debt shall have been
accelerated, or any such Debt shall have been required to be prepaid
prior to the stated maturity thereof.
(i) This Agreement or any other Loan Document shall cease to
be in full force and effect or shall be declared null and void or the
validity or enforceability thereof shall be contested or challenged by
Applicant, any Subsidiary, any Obligated Party or any of their
respective shareholders, or
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Applicant or any Obligated Party shall deny that it has any further
liability or obligation under any of the Loan Documents, or any lien or
security interest created by the Loan Documents shall for any reason
cease to be a valid, first priority perfected security interest in and
lien upon any of the Collateral purported to be covered thereby.
Section 9.2. Remedies Upon Default. If any Event of Default shall
occur, Lender may declare the Obligations or any part thereof to be immediately
due and payable, and the same shall thereupon become immediately due and
payable, without notice, demand, presentment, notice of dishonor, notice of
acceleration, notice of intent to accelerate, notice of intent to demand,
protest, or other formalities of any kind, all of which are hereby expressly
waived by Applicant; provided, however, that upon the occurrence of an Event of
Default under Section 9.1(d) or Section 9.1(e), the Obligations shall become
immediately due and payable without notice, demand, presentment, notice of
dishonor, notice of acceleration, notice of intent to accelerate, notice of
intent to demand, protest, or other formalities of any kind, all of which are
hereby expressly waived by Applicant. If any Event of Default shall occur,
Lender may exercise all rights and remedies available to it in law or in equity,
under the Loan Documents, or otherwise. Without limiting the generality of the
foregoing, if any Event of Default shall occur, Lender may, at its sole
discretion, (i) sell or foreclose upon any or all of the Collateral, (ii) apply
Collateral or proceeds thereof to the Obligations in such order and manner as
Lender may determine in its sole discretion, and/or (iii) hold proceeds of
Collateral as security for the Obligations pursuant to the terms of this
Agreement and the other Loan Documents.
ARTICLE X
Miscellaneous
Section 10.1. Expenses of Lender. Applicant hereby agrees to pay Lender
on demand: (i) all costs and expenses incurred by Lender in connection with the
preparation, negotiation, and execution of this Agreement and the other Loan
Documents and any and all amendments, modifications, renewals, extensions, and
supplements thereof and thereto, including, without limitation, the fees and
expenses of Lender's legal counsel, (ii) all costs and expenses incurred by
Lender in connection with the enforcement of this Agreement or any other Loan
Document, including, without limitation, the fees and expenses of Lender's legal
counsel, and (iii) all other costs and expenses incurred by Lender in connection
with this Agreement or any other Loan Document, including, without limitation,
all costs, expenses, taxes, assessments, filing fees, and other charges levied
by an governmental authority or otherwise payable in respect of this Agreement
or any other Loan Document.
Section 10.2. INDEMNITY. APPLICANT HEREBY INDEMNIFIES LENDER AND EACH
AFFILIATE THEREOF AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,
ATTORNEYS, AND AGENTS FROM, AND HOLDS EACH OF THEM HARMLESS AGAINST, ANY AND ALL
LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, COSTS, AND EXPENSES
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(INCLUDING ATTORNEYS' FEES) TO WHICH ANY OF THEM MAY BECOME SUBJECT WHICH
DIRECTLY OR INDIRECTLY ARISE FROM OR RELATE TO (I) THE NEGOTIATION, EXECUTION,
DELIVERY, PERFORMANCE, ADMINISTRATION, OR ENFORCEMENT OF ANY OF THE LOAN
DOCUMENTS, (II) ANY OF THE TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS,
(III) ANY ACTION TAKEN BY LENDER IN CONNECTION WITH THE CREDIT, (IV) ANY BREACH
BY APPLICANT OF ANY REPRESENTATION, WARRANTY, COVENANT, OR OTHER AGREEMENT
CONTAINED IN ANY OF THE LOAN DOCUMENTS, (V) THE PRESENCE, RELEASE, THREATENED
RELEASE, DISPOSAL, REMOVAL, OR CLEANUP OF ANY HAZARDOUS SUBSTANCE LOCATED ON,
ABOUT, WITHIN, OR AFFECTING ANY OF THE PROPERTIES OR ASSETS OF APPLICANT OR ANY
SUBSIDIARY, OR (VI) ANY INVESTIGATION, LITIGATION, OR OTHER PROCEEDING,
INCLUDING, WITHOUT LIMITATION, ANY THREATENED INVESTIGATION, LITIGATION, OR
OTHER PROCEEDING RELATING TO ANY OF THE FOREGOING. Without limiting any
provision of this Agreement or of any other Loan Document, it is the express
intention of the parties hereto that each Person to be indemnified under this
Section shall be indemnified from and held harmless against any and all losses,
liabilities, claims, damages, penalties, judgments, costs, and expenses
(including attorneys' fees) arising out of or resulting from the sole or
contributory negligence of the Person to be indemnified, but not resulting from
the gross negligence or willful misconduct of Lender.
Section 10.3. Limitation of Liability. Neither Lender nor any
Affiliate, officer, director, employee, attorney, or agent of Lender shall have
any liability with respect to, and Applicant hereby waives, releases, and agrees
not to sue any of them upon, any claim for any special, indirect, incidental, or
consequential damages suffered or incurred by Applicant in connection with,
arising out of, or in any way related to, this Agreement or any of the other
Loan Documents, or any of the transactions contemplated by this Agreement or any
of the other Loan Documents. Applicant hereby waives, releases, and agrees not
to sue Lender or any of Lender's Affiliates, officers, directors, employees,
attorneys, or agents for punitive damages in respect of any claim in connection
with, arising out of, or in any way related to, this Agreement or any of the
other Loan Documents, or any of the transactions contemplated by this Agreement
or any of the other Loan Documents.
Section 10.4. No Duty. All attorneys, accountants, appraisers, and
other professional Persons and consultants retained by Lender shall have the
right to act exclusively in the interest of Lender and shall have no duty of
disclosure, duty of loyalty, duty of care, or other duty or obligation of any
type or nature whatsoever to Applicant or any of Applicant's shareholders or any
other Person.
Section 10.5. Lender Not Fiduciary. The relationship between Applicant
and Lender is solely that of debtor and creditor, and Lender has no fiduciary or
other special relationship with Applicant, and no term or condition of any of
the Loan Documents shall be construed so as to deem the relationship between
Applicant and Lender to be other than that of debtor and creditor.
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Section 10.6. Equitable Relief. Applicant recognizes that in the event
Applicant fails to pay, perform, observe, or discharge any or all of the
Obligations, any remedy at law may prove to be inadequate relief to Lender.
Applicant therefore agrees that Lender, if Lender so requests, shall be entitled
to temporary and permanent injunctive relief in any such case without the
necessity of proving actual damages.
Section 10.7. No Waiver; Cumulative Remedies. No failure on the part of
Lender to exercise and no delay in exercising, and no course of dealing with
respect to, any right, power, or privilege under this Agreement shall operate as
a waiver thereof, nor shall any single or partial exercise of any right, power,
or privilege under this Agreement preclude any other or further exercise thereof
or the exercise of any other right, power, or privilege. The rights and remedies
provided for in this Agreement and the other Loan Documents are cumulative and
not exclusive of any rights and remedies provided by law.
Section 10.8. Successors and Assigns. This Agreement is binding upon
and shall inure to the benefit of Lender and Applicant and their respective
successors and assigns, except that Applicant may not assign or transfer any of
its rights or obligations under this Agreement without the prior written consent
of Lender. Lender may assign or transfer this Agreement, or any instrument(s)
evidencing all or any of the Obligations and may deliver all or any of the
Collateral then held as security therefor, to the transferee(s), who shall
thereupon become vested with all the powers and rights in respect thereto given
Lender herein or in the instrument(s) transferred, and Lender shall thereafter
be forever relieved and fully discharged from any liability or responsibility
with respect thereto, but Lender shall retain all rights and powers hereby given
with respect to any and all instrument(s), rights, or property not so
transferred.
Section 10.9. Survival. All representations and warranties made in this
Agreement or any other Loan Document or in any document, statement, or
certificate furnished in connection with this Agreement shall survive the
execution and delivery of this Agreement and the other Loan Documents, and no
investigation by Lender or any closing shall affect the representations and
warranties or the right of Lender to rely upon them. Without prejudice to the
survival of any other obligation of Applicant hereunder, the obligations of
Applicant under Sections 2.5, 2.10, 10.1, and 10.2 shall survive repayment of
the Note and any cancellation or expiration of the Credit.
Section 10.10. ENTIRE AGREEMENT: AMENDMENT; EXISTING AGREEMENT;
Amendments to Security Agreement. THIS AGREEMENT, THE NOTE, AND THE OTHER LOAN
DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE
PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE
SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE
PARTIES HERETO. THERE ARE NO ORAL
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AGREEMENTS AMONG THE PARTIES HERETO. The provisions of this Agreement and the
other Loan Documents to which Applicant is a party may be amended or waived only
by an instrument in writing signed by the parties hereto. This Agreement amends
and restates in its entirety the Existing Agreement. Effective as of the date
hereof, Lender has no obligation to advance further funds or issue additional
letters of credit to or for the account of Borrower. Lender hereby waives any
Event of Default under Section 9.1 of the Existing Agreement which occurred as a
result of Applicants failure to comply with Section 7.11 of the Existing
Agreement for any fiscal quarter ending on or before December 31, 2000. Subject
to the satisfaction of the conditions precedent to the effectiveness of this
Agreement, Lender agrees to release its security interests in all assets of
Applicant other than the Collateral. Applicant hereby ratifies and confirms the
Security Agreement as amended hereby and Lender's security interest in the
Collateral. Effective as of the date hereof, the Security Agreement is hereby
amended (a) to revise the last sentence of Section 1.02 thereof to read as
follows: "The foregoing power of attorney shall be a power coupled with an
interest and shall be irrevocable," (b) to revise Section 1.03 thereof to delete
therefrom the following phrase: "provided, however, so long as no Default or
Event of Default has occurred and is continuing, the Pledgor may withdraw any
interest earned on the Account so long as the Account contains funds in an
amount greater than or equal to the amount of all outstanding LOC Obligations,"
and substitute in lieu thereof the following: "provided, however, so long as no
Default or Event of Default has occurred and is continuing, the Lender shall, on
a monthly basis, deliver any interest income from the Account to an account
specified by the Pledgor so long as the Account contains funds in an amount
greater than or equal to the amount of all outstanding Obligations," and (c) to
revise the last sentence of Section 2.01 thereof to read as follows: "The
Pledgor shall not grant a security interest in or permit a lien or encumbrance
upon the Collateral to anyone except the Lender." All references in the Security
Agreement from and after the date hereof to the Credit Party Obligations and the
LOC Obligations shall hereinafter mean references to the Obligations, all
references to the Agent shall mean references to the Lender, and all references
to the Credit Agreement shall mean references to this Agreement as amended,
modified or restated from time to time. Upon effectiveness of this Agreement,
all other Collateral Documents (as defined in the Existing Agreement) are hereby
cancelled and of no force and effect. The Agent's Fee Letter (as defined in the
Existing Agreement) is hereby cancelled and of no force and effect. Lender
agrees to execute all UCC, release, real estate quit claims and other lien
release documents as Applicant shall reasonably request, at Applicant's expense,
as may be necessary or appropriate to further evidence the cancellation of such
Collateral Documents and the release of lien effected hereby. Lender shall
return to Applicant all capital stock pledged to secure the obligations of
Applicant under the Existing Agreement.
Section 10.11. Maximum Interest Rate. No provision of this Agreement or
any other Loan Document shall require the payment or the collection of interest
in excess of the maximum permitted by applicable law. If any excess of interest
in such respect is hereby provided for, or shall be adjudicated to be so
provided, in any Loan Document or otherwise in connection with this loan
transaction, the provisions of this Section shall govern and prevail and neither
Applicant nor the sureties, guarantors, successors, or
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assigns of Applicant shall be obligated to pay the excess amount of such
interest or any other excess sum paid for the use, forbearance, or detention of
sums loaned pursuant hereto. In the event Lender ever receives, collects, or
applies as interest any such sum, such amount which would be in excess of the
maximum amount permitted by applicable law shall be applied as a payment and
reduction of the principal of the indebtedness evidenced by this Agreement; and,
if the principal owing under this Agreement has been paid in full, any remaining
excess shall forthwith be paid to Applicant. In determining whether or not the
interest paid or payable exceeds the Maximum Rate, Applicant and Lender shall,
to the extent permitted by applicable law, (i) characterize any non-principal
payment as an expense, fee, or premium rather than as interest, (ii) exclude
voluntary prepayments and the effects thereof, and (iii) amortize, prorate,
allocate, and spread in equal or unequal parts the total amount of interest
throughout the entire contemplated term of the indebtedness owing pursuant to
this Agreement so that interest for the entire term does not exceed the Maximum
Rate.
Section 10.12. Notices. All notices and other communications provided
for in this Agreement and the other Loan Documents to which Applicant is a party
shall be given or made by telex, telegraph, telecopy, cable, or in writing and
telexed, telecopied, telegraphed, cabled, mailed by certified mail return
receipt requested, or delivered to the intended recipient at the "Address for
Notices" specified below its name on the signature pages hereof; or, as to any
party at such other address as shall be designated by such party in a notice to
the other party given in accordance with this Section. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given when transmitted by telex or telecopy, subject to telephone
confirmation of receipt, or delivered to the telegraph or cable office, subject
to telephone confirmation of receipt, or when personally delivered or, in the
case of a mailed notice, when duly deposited in the mails, in each case given or
addressed as aforesaid; provided, however, notices to Lender pursuant to Article
II shall not be effective until received by Lender.
Section 10.13. Applicable Law. This Agreement has been entered into in
Dallas County, Texas, and shall be performable for all purposes in Dallas
County, Texas. The Uniform Customs and Practice for Documentary Credits (1993
Revision), International Chamber of Commerce Publication No. 500 ("UCP") shall
apply to the Credit. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, except to the extent such laws
are inconsistent with the UCP. Any action or proceeding against Applicant under
or in connection with any of the Loan Documents may be brought in any state or
federal court in Dallas County, Texas. Applicant hereby irrevocably (i) submits
to the nonexclusive jurisdiction of such courts, and (ii) waives any objection
it may now or hereafter have as to the venue of any such action or proceeding
brought in any such court or that any such court is an inconvenient forum.
Applicant agrees that service of process upon it may be made by certified or
registered mail, return receipt requested, at its address specified or
determined in accordance with the provisions of Section 10.12. Nothing herein or
in any of the other Loan Documents shall affect the right of Lender to serve
process in any other manner permitted by law or shall limit the right of Lender
to bring any action or proceeding against Applicant or with respect to its
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property in courts in other jurisdictions. Any action or proceeding by Applicant
against Lender shall be brought only in a court located in Dallas County, Texas.
Section 10.14. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Telecopies of signatures
shall be binding and effective as originals.
Section 10.15. Severability. Any provision of this Agreement held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Agreement and the effect thereof shall be
confined to the provision held to be invalid or illegal.
Section 10.16. Headings. The headings, captions, and arrangements used
in this Agreement are for convenience only and shall not affect the
interpretation of this Agreement.
Section 10.17. Participations. Lender shall have the right at any time
and from time to time to grant participations in the indebtedness owing pursuant
to this Agreement and any other Loan Documents. Each participant shall be
entitled to receive all information received by Lender regarding the
creditworthiness of Applicant, including, without limitation, information
required to be disclosed to a participant pursuant to Banking Circular 181
(Rev., August 2, 1984), issued by the Comptroller of the Currency (whether the
participant is subject to the circular or not).
Section 10.18. Construction. Applicant and Lender acknowledge that each
of them has had the benefit of legal counsel of its own choice and has been
afforded an opportunity to review this Agreement and the other Loan Documents
with its legal counsel and that this Agreement and the other Loan Documents
shall be construed as if jointly drafted by Applicant and Lender.
Section 10.19. WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, APPLICANT HEREBY IRREVOCABLY AND EXPRESSLY WAIVES ALL RIGHT
TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED
UPON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF LENDER IN
THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT THEREOF.
Section 10.20. RELEASE.
(a) Applicant hereby unconditionally and irrevocably remises, acquits,
and fully and forever releases and discharges Lender and all respective
affiliates and subsidiaries of the Lender, its respective officers, servants,
employees, agents, attorneys, principals, directors and shareholders, and their
respective heirs, legal representatives,
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successors and assigns (collectively, the "Released Lender Parties") from any
and all claims, demands, causes of action, obligations, remedies, suits, damages
and liabilities (collectively, the "Borrower Claims") of any nature whatsoever,
whether now known, suspected or claimed, whether arising under common law, in
equity or under statute, which the Applicant ever had or now has against the
Released Lender Parties which may have arisen at any time on or prior to the
date of this Agreement and which were in any manner related to any of the Loan
Documents or the enforcement or attempted enforcement by the Lender of rights,
remedies or recourses related thereto.
(b) Applicant covenants and agrees never to commence, voluntarily aid
in any way, prosecute or cause to be commenced or prosecuted against any of the
Released Lender Parties any action or other proceeding based upon any of the
Borrower Claims which may have arisen at any time on or prior to the date of
this Agreement and were in any manner related to any of the Loan Documents.
(c) The agreements of Applicant set forth in this Section 10.20 shall
survive termination of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
APPLICANT:
SIMCALA, INC.
By: /s/ R. Myles Cowan
--------------------------------
Title: Chief Financial Officer
-----------------------------
Address for Notices:
1940 Ohio Ferro Road
-----------------------------------
Mt. Meigs, AL 36057-0068
-----------------------------------
Fax No.: (334) 215-8969
---------------------------
Telephone No.: (334) 215-7560 x228
---------------------
Attention: Myles Cowan
-------------------------
LENDER:
BANK OF AMERICA, N.A.
By: /s/ Mike W. Colon
--------------------------------
Mike W. Colon, Principal
Address for Notices:
TX1-492-66-01
901 Main Street, 66th Floor
Dallas, Texas 75202
Fax No.: (214) 209-3533
Telephone No.: (214) 209-0931
Attention: Mike W. Colon
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