Harris Trust Credit Agreement

EXHIBIT 10(y)


================================================================================


SECURED CREDIT AGREEMENT


NU-WEST INDUSTRIES, INC.,
AS BORROWER


AND


NU-WEST MINERALS, INC.
NU-WEST MINING, INC.,
AS GUARANTORS


AND


HARRIS TRUST AND SAVINGS BANK,
INDIVIDUALLY AND AS AGENT


AND


HARRIS TRUST AND SAVINGS BANK
FBS AG CREDIT, INC.
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
ST. PAUL BANK FOR COOPERATIVES
CAISSE NATIONALE DE CREDIT AGRICOLE


DATED AS OF AUGUST 3, 1995


================================================================================


TABLE OF CONTENTS


SECTION DESCRIPTION PAGE SECTION 1. THE CREDITS.................................................... 1
Section 1.1. The Revolving Credit......................................... 1
Section 1.2. The Term Credit One.......................................... 3
Section 1.3. The Term Credit Two.......................................... 4
Section 1.4. Manner of Borrowing.......................................... 4
Section 1.5. The Letter of Credit Facility................................ 5
Section 1.6. Reimbursement Obligation..................................... 6
Section 1.7. Participation in L/C's....................................... 6


SECTION 2. INTEREST....................................................... 7
Section 2.1. Options...................................................... 7
Section 2.2. Domestic Rate Portion........................................ 7
Section 2.3. LIBOR Portions............................................... 7
Section 2.4. Computation.................................................. 8
Section 2.5. Minimum Amounts.............................................. 8
Section 2.6. Manner of Rate Selection..................................... 8
Section 2.7. Change of Law................................................ 8
Section 2.8. Unavailability of Deposits or Inability to Ascertain the
Adjusted LIBOR............................................... 9
Section 2.9. Taxes and Increased Costs.................................... 9
Section 2.10. Funding Indemnity............................................10
Section 2.11. Lending Branch...............................................11
Section 2.12. Discretion of Banks as to Manner of Funding..................11 SECTION 3. FEES, PAYMENTS, REDUCTIONS, APPLICATIONS AND
NOTATIONS......................................................11
Section 3.1. Commitment Fee...............................................11
Section 3.2. Closing Fees.................................................11
Section 3.3. Letter of Credit Fees........................................11
Section 3.4. Agent's Fees.................................................11
Section 3.5. Voluntary Prepayments........................................12
Section 3.6. Mandatory Prepayments. (a) Borrowing Base Deficiency........12
(b) Fixed Asset Proceeds.........................................12
(c) Equity Offering..............................................13
Section 3.7. Terminations.................................................13
Section 3.8. Place and Application........................................13
Section 3.9. Notations and Requests.......................................15
Section 3.10. Capital Adequacy.............................................15 Section 4. The Collateral.................................................16


-3-


SECTION 5. REPRESENTATIONS AND WARRANTIES.................................16
Section 5.1. Organization and Qualification...............................16
Section 5.2. Subsidiaries.................................................17
Section 5.3. Financial Reports............................................17
Section 5.4. Litigation; Tax Returns; Approvals...........................17
Section 5.5. Regulation U.................................................18
Section 5.6. No Default...................................................18
Section 5.7. ERISA........................................................18
Section 5.8. Security Interests and Debt..................................18
Section 5.9. Accurate Information.........................................18
Section 5.10 Enforceability...............................................18
Section 5.11. No Default Under Other Agreements............................18
Section 5.12. Status Under Certain Laws....................................19
Section 5.13. Compliance with Laws.........................................19
Section 5.14. Tangible Net Worth on June 30, 1995..........................19
SECTION 6. CONDITIONS PRECEDENT...........................................19
Section 6.1. All Advances.................................................19
Section 6.2. Initial Advance..............................................20


SECTION 7. COMPANY COVENANTS..............................................23
Section 7.1. Maintenance..................................................23
Section 7.2. Taxes........................................................23
Section 7.3. Maintenance of Insurance.....................................23
Section 7.4. Financial Reports............................................23
Section 7.5. Inspection and Reviews.......................................25
Section 7.6. Funded Debt Ratio............................................25
Section 7.7. Fixed Charge Coverage Ratio..................................25
Section 7.8. Interest Coverage Ratio......................................26
Section 7.9. Tangible Net Worth...........................................26
Section 7.10. Funded Debt to Total Capitalization..........................26
Section 7.11. Capital Expenditures.........................................26
Section 7.12. Turnaround Expenses..........................................27
Section 7.13. Consolidation and Merger.....................................27
Section 7.14. Transactions with Affiliates.................................27
Section 7.15. Dividends and Certain Other Restricted Payments..............27
Section 7.16. Liens........................................................27
Section 7.17. Borrowings and Guaranties....................................28
Section 7.18. Investments, Loans and Advances..............................29
Section 7.19. Sale of Property.............................................29
Section 7.20. Notice of Suit, Adverse Change in Business or Default........30
Section 7.21. ERISA........................................................30
Section 7.22. Use of Loan Proceeds.........................................30


-4-


Section 7.23. Conduct of Business and Maintenance of Existence.............30
Section 7.24. Compliance with Laws, etc....................................31
Section 7.25. New Subsidiaries.............................................31
Section 7.26. Environmental Covenant.......................................31
Section 7.27. Hedging Arrangements.........................................31
Section 7.28. Concentration Accounts.......................................31
SECTION 8. EVENTS OF DEFAULT AND REMEDIES.................................32
Section 8.1. Events of Default............................................32
Section 8.2. Remedies for Non-Bankruptcy Defaults.........................34
Section 8.3. Remedies for Bankruptcy Defaults.............................34
Section 8.4. L/C's........................................................34 SECTION 9. DEFINITIONS....................................................35
Section 9.1. Certain Terms Defined........................................35
Section 9.2. Accounting Terms.............................................48 SECTION 10. THE AGENT......................................................48
Section 10.1. Appointment and Authorization................................48
Section 10.2. Rights as a Bank.............................................49
Section 10.3. Standard of Care.............................................49
Section 10.4. Costs and Expenses...........................................50
Section 10.5. Indemnity....................................................50


SECTION 11. THE GUARANTEES.................................................50
Section 11.1. The Guarantees...............................................50
Section 11.2. Guarantee Unconditional......................................51
Section 11.3. Discharge Only Upon Payment in Full; Reinstatement in Certain
Circumstances................................................52
Section 11.4. Subrogation..................................................52
Section 11.5. Waivers......................................................52
Section 11.6. Stay of Acceleration.........................................52 SECTION 12. MISCELLANEOUS..................................................52
Section 12.1. Holidays.....................................................52
Section 12.2. No Waiver, Cumulative Remedies...............................53
Section 12.3. Waivers, Modifications and Amendments........................53
Section 12.4. Costs and Expenses...........................................53
Section 12.5. Stamp Taxes..................................................54
Section 12.6. Survival of Representations..................................54
Section 12.7. Construction.................................................54
Section 12.8. Accounting Principles........................................54
Section 12.9. Addresses for Notices........................................54


-5-


Section 12.10. Headings.....................................................55
Section 12.11. Severability of Provisions...................................55
Section 12.12. Counterparts.................................................55
Section 12.13. Binding Nature, Governing Law, Etc...........................55
Section 12.14. Assignment Agreements........................................55
Section 12.15. Participations...............................................56
Section 12.16. Certain Junior Subordinated Debt.............................56 Signature Page......................................................................58


Exhibit A Revolving Credit Note


Exhibit B Term Credit One Note


Exhibit C Term Credit Two Note


Exhibit D Borrowing Base Certificate


Exhibit E Compliance Certificate


Schedule 5.2. Subsidiaries


Schedule 5.13 Compliance with Laws


Schedule 7.17 Existing Capital Leases


-6-


NU-WEST INDUSTRIES, INC.


CREDIT AGREEMENT


To:


Harris Trust and Savings Bank


Chicago, Illinois


FBS Ag Credit, Inc.


Denver, Colorado


First Union National Bank of North Carolina


Charlotte, North Carolina


St. Paul Bank for Cooperatives


St. Paul, Minnesota


Caisse Nationale de Credit Agricole


Chicago, Illinois


Gentlemen:


The undersigned, Nu-West Industries, Inc., a Delaware corporation (the "Company"), applies to the Banks (as hereinafter defined) for their several commitments, subject to all of the terms and conditions hereof and on the basis of the representations and warranties hereinafter set forth, to make a revolving credit (the "Revolving Credit"), a letter of credit facility (the "Letter of Credit Facility") and, a term credit ("Term Credit One") and to the Banks for a term credit ("Term Credit Two" and, together with Term Credit One, collectively, the "Term Credits") available to the Company, all as more fully hereinafter set forth.


.C.SECTION 1. THE CREDITS;.


.c2.Section 1.1. The Revolving Credit. (a) Subject to all of the terms and conditions hereof, the Banks agree, severally and not jointly, to extend a Revolving Credit to the Company which may be utilized by the Company in the form of loans (individually a "Revolving Credit Loan" and collectively the "Revolving Credit Loans"). The aggregate principal amount of all Revolving Credit Loans at any time outstanding shall not exceed the lesser of (i) the sum of the Banks' Revolving Credit Commitments (as hereinafter defined) in effect from time to time during the term of this Agreement (as hereinafter defined) and (ii) the Borrowing Base as then


-7-


determined and computed. The Revolving Credit shall be available to the Company, and may be availed of by the Company from time to time, be repaid (subject to the restrictions on prepayment set forth herein) and used again, during the period from the date hereof to and including June 30, 2000 (the "Termination Date"). Each Revolving Credit Loan obtained pursuant to Section 1.6 and 1.7 hereof, shall be in a minimum principal amount of $250,000 or any greater amount which is a whole multiple of $100,000.


(b) The Revolving Credit shall consist of a base revolving credit (the "Base Credit") in an aggregate principal amount at any one time outstanding of up to $10,000,000, which shall be available at all times during the term of this Agreement and an excess revolving credit (the "Excess Credit") in an aggregate principal amount at any one time outstanding of up to $5,000,000, which shall be available only during the period from July 1 through the last day of the following February of each year during the term hereof.


The respective maximum aggregate principal amounts of the Base Credit at any one time outstanding and the percentage of the Base Credit available at any time which each Bank by its acceptance hereof severally agrees to make available to the Company and each Bank's percentage thereof (its "Commitment Percentage") are as follows (collectively, the "Base Revolving Credit Commitments" and individually, a "Base Revolving Credit Commitment"):


Harris Trust and Savings Bank $3,333,333.34 33.33333340%


FBS Ag Credit, Inc. $2,000,000.00 20%


First Union National Bank of North $2,000,000.00 20% Carolina


St. Paul Bank for Cooperatives $1,333,333.33 13.33333330%


Caisse Nationale de Credit Agricole $1,333,333.33 13.33333330%


-8-


Total $10,000,000 100%


The respective maximum aggregate principal amounts of the Excess Credit at any one time outstanding and the percentage of the Excess Credit available at any time which each Bank by its acceptance hereof severally agrees to make available to the Company are as follows (collectively, the "Excess Revolving Credit Commitments" and individually, an "Excess Revolving Credit Commitment"):


Harris Trust and Savings Bank $1,666,666.66 33.33333320%


FBS Ag Credit, Inc. $1,000,000.00 20%


First Union National Bank of $1,000,000.00 North Carolina 20%


St. Paul Bank for Cooperatives $666,666.67 13.33333340%


Caisse Nationale de Credit Agricole $666,666.67 13.33333340%


Total $5,000,000 100%


Each Bank's Base Revolving Credit Commitment and Excess Revolving Credit Commitment during any period are hereinafter referred to collectively as the "Revolving Credit Commitment" for such Bank during such period and the Base Revolving Credit Commitments and Excess Revolving Credit Commitments for all Banks during any period are hereinafter collectively


-9-


referred to as the "Revolving Credit Commitments" during such period.


(c) Revolving Credit Loans made by each Bank hereunder shall be evidenced by a single Revolving Credit Note of the Company substantially in the form (with appropriate insertions) of Exhibit A hereto (individually, a "Revolving Note" and together, the "Revolving Notes") payable to the order of such Bank in the principal amount of such Bank's Revolving Credit Commitment, but the aggregate principal amount of indebtedness evidenced by such Revolving Note at any time shall be, and the same is to be determined by, the aggregate principal amount of all Revolving Credit Loans made by such Bank to the Company pursuant hereto on or prior to the date of determination less the aggregate amount of principal repayments on such Revolving Credit Loans received by or on behalf of such Bank on or prior to such date of determination. Each Revolving Note shall be dated as of the execution date of this Agreement, shall be delivered concurrently herewith, and shall be expressed to mature on the Termination Date and to bear interest as provided in Section 2 hereof.


.c2.Section 1.2. The Term Credit One;. Subject to all of the terms and conditions hereof, each Bank agrees to make a loan to the Company under the Term Credit One in the amount set forth below opposite its name (collectively, the "Term Credit One Commitments" and individually a "Term Credit One Commitment"):


Harris Trust and Savings Bank $8,333,333.34 33.333333336%


FBS Ag Credit, Inc. $5,000,000.00 20%


First Union National Bank of $5,000,000.00 20% North Carolina


St. Paul Bank for Cooperatives $3,333,333.33 13.33333332%


Caisse Nationale de Credit Agricole $3,333,333.33 13.33333332%


-10-


Total $25,000,000 100%


The loans from all Banks under the Term Credit One (the "Term Credit One Loans") shall be made concurrently and such loans shall be made, if at all, on or before July 31, 1995, at which time the commitments of the Banks to make the Term Credit One Loans shall expire. The Term Credit One Loan made by each Bank shall be evidenced by a Term Credit One Note of the Company (individually a "Term Credit One Note" and collectively the "Term Credit One Notes") payable to the order of such Bank in the amount of its Term Credit One Commitment, each Term Credit One Note to be in the form (with appropriate insertions) attached hereto as Exhibit B hereto. Each Term Credit One Note shall be expressed to bear interest as provided in Section 2 hereof and to mature in twenty (20) consecutive quarterly installments of principal, commencing on September 30, 1995 and continuing on the last day of each December, March, June and September occurring thereafter to and including June 30, 2000, the final maturity date thereof, with each installment on all Term Credit One Notes to aggregate $1,250,000 and with the amount of each installment due on the Term Credit One Note held by each Bank to be a pro rata part (based on the relationship which its Term Credit One Commitment bears to the total Term Credit One Commitments) of each such aggregate amount.


.c2.Section 1.3. The Term Credit Two;. Subject to all of the terms and conditions hereof, each Bank agrees to make a loan to the Company under the Term Credit Two in the amount set forth below opposite (collectively, the "Term Credit Two Commitments" and individually a "Term Credit Two Commitment"):


Harris Trust and Savings Bank $10,000,000.00 33.33333333%


FBS Ag Credit, Inc. $6,000,000.00 20%


-11-


First Union National Bank of $6,000,000.00 20% North Carolina


St. Paul Bank for Cooperatives $4,000,000.00 13.33333333%


Caisse Nationale de Credit Agricole $4,000,000.00 13.33333333%


Total $30,000,000 100%


The loans from all Banks under the Term Credit Two (the "Term Credit Two Loans") shall be made concurrently and such loans shall be made, if at all, on or before July 31, 1995, at which time the commitments of the Banks to make the Term Credit Two Loans shall expire. The Term Credit Two Loan made by each Bank shall be evidenced by a Term Credit Two Note of the Company (individually a "Term Credit Two Note" and collectively the "Term Credit Two Notes") payable to the order of such Bank in the amount of its Term Credit Two Commitment, each Term Credit Two Note to be in the form (with appropriate insertions) attached hereto as Exhibit C hereto. Each Term Credit Two Note shall be expressed to bear interest as provided in Section 2 hereof and to mature in twenty-four (24) consecutive quarterly installments of principal, commencing on September 30, 1995 and continuing on the last day of each December, March, June and September occurring thereafter to and including June 30, 2001, the final maturity date thereof, in the following aggregate principal amounts; $250,000 on September 30, 1995, December 31, 1995, March 31, 1996, June 30, 1996, September 30, 1996, December 31, 1996, March 31, 1997, and June 30, 1997; $1,000,000 on September 30, 1997, December 31, 1997, March 31, 1998 and June 30, 1998; $1,250,000 on September 30, 1998, December 31, 1998, March 31, 1999 and, June 30, 1999; $1,500,000 on September 30, 1999, December 31, 1999, March 31, 2000 and June 30, 2000; and $3,250,000 on September 30, 2000, December 31, 2000, March 31, 2001 and June 30, 2001. The amount of each installment due on the Term Credit Two Note held by each Bank shall be a pro rata part (based on the relationship which its Term Credit Two Commitment bears to the total Term Credit Two Commitments) of each such


-12-


aggregate amount.


.c2.Section 1.4. Manner of Borrowing;. The Company shall give written or telephonic notice to the Agent (which notice shall be irrevocable once given and, if given by telephone, shall be promptly confirmed in writing) by no later than 11:00 a.m. (Chicago time) one (1) Business Day prior to the date the Company requests that any Loan be made to it under any of the Commitments, and the Agent shall promptly notify each Bank that has a Commitment of that type of the Agent's receipt of each such notice. Each such notice shall specify the date of the Loan requested (which must be a Business Day) and the amount and type of such Loan. Each Loan shall initially constitute part of the applicable Domestic Rate Portion except to the extent the Company has otherwise timely elected as provided in Section 2 hereof. The Company agrees that the Agent may rely upon any written or telephonic notice given by any person purporting to be a person authorized to act on behalf of the Company hereunder, without the necessity of independent investigation and, in the event any telephonic notice conflicts with the written confirmation, such telephonic notice shall govern if the Agent and the relevant Banks have acted in reliance thereon. Not later than 1:00 p.m. (Chicago time) on the date specified for any Loan to be made by a Bank hereunder, such Bank shall make the proceeds of its pro rata share of such Loan available to the Agent in Chicago, Illinois in immediately available funds. Subject to the provisions of Section 6 hereof, the proceeds of each Loan shall be made available to the Company at the principal office of the Agent in Chicago, Illinois, in immediately available funds, upon receipt by the Agent from each Bank of its pro rata share of such Loan. Unless the Agent shall have been notified by a Bank prior to the date a Loan is to be made by it hereunder that such Bank does not intend to make its pro rata share of such Loan available to the Agent, the Agent may assume that such Bank has made such share available to the Agent on such date and the Agent may in reliance upon such assumption make available to the Company a corresponding amount. If such corresponding amount is not in fact made available to the Agent by such Bank and the Agent has made such amount available to the Company, the Agent shall be entitled to receive such amount from such Bank forthwith upon the Agent's demand, together with interest thereon in respect of each day during the period commencing on the date such amount was made available to the Company and ending on but excluding the date the Agent recovers such amount at a rate per annum equal to the effective rate charged to the Agent for overnight federal funds transactions with member banks of the federal reserve system for each day as determined by the Agent (or in the case of a day which is not a Business Day, then for


-13-


the preceding day). If such amount is not received from such Bank by the Agent immediately upon demand, the Company will, on demand, repay to the Agent the proceeds of the Loan attributable to such Bank with interest thereon at a rate per annum equal to the interest rate applicable to the relevant Loan, together with any amount payable under Section 2.10 hereof with respect to such payment. Nothing in this Section 1.4 shall be deemed to permit any Bank to breach its obligations to make Loans hereunder or to limit the Company's claims against any Bank for such breach.


.c2.Section 1.5. The Letter of Credit Facility;. (a) Subject to all the terms and con ...