EXHIBIT 99.3
[XXXXX FARGO LETTERHEAD]
December 22, 2002
Xxxxxxx X. Xxxxx, Manager
Xxxxxxx X. Xxxxx, Manager
Keystone Financing LLC
MS VR 900
P.O. Box 4030
Golden, CO 80403
Dear Messrs. Coors:
This letter is to confirm XXXXX FARGO BANK, NATIONAL ASSOCIATION
("Bank"), subject to all terms and conditions contained herein, has agreed to
make available the credit described below to Keystone Financing LLC
("Borrower"):
1. A commitment under which Bank will make advances to Borrower from
time to time up to and including June 14, 2003, not to exceed the aggregate
principal amount of Two Hundred Million Dollars ($200,000,000.00) ("Loan"),
the proceeds of which shall be used to make a loan or loans to one or more
affiliates to purchase stock of CoorsTek, Inc. and to pay all related costs,
fees, expenses, and a portion of which shall be converted on June 15, 2003,
to a five year term loan, as described more fully below.
I. CREDIT TERMS:
1. LOAN:
(a) NOTE. Xxxxxxxx's obligation to repay advances under the Loan
shall be evidenced by a promissory note substantially in the form of
Exhibit "A" attached hereto ("Note"), all terms of which are incorporated
herein by this reference.
(b) LIMITATION ON BORROWINGS. Notwithstanding any other provision of
this letter, the aggregate amount of all outstanding borrowings under the
Loan shall not at any time exceed a maximum of Two Hundred Million Dollars.
(c) LIMITATION ON ADVANCES. On the date of any advance, the amount
of all outstanding borrowings under the Loan, after taking into account such
advance, shall not exceed forty percent (40%) of the value of the Shares.
(d) BORROWING AND REPAYMENT. Borrower may from time to time during
the period in which Bank will make advances under the Loan borrow and
partially or wholly repay its outstanding borrowings, subject to all the
limitations, terms and conditions contained herein; provided that amounts
repaid may not be reborrowed; and provided further, that the total
outstanding borrowings under the Loan shall not at any time exceed the
maximum principal amount available thereunder, as set forth above.
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December 22, 2002
Page 2
The outstanding principal balance of the Loan shall be due and payable
in full on June 15, 2003; provided however, that so long that no Event of
Default, or any condition, event or act which with the giving of notice or
the passage of time or both would constitute an Event of Default (a
"Default") has occurred, Bank agrees to convert the Loan into, and this Loan
shall become, a five year term loan with a principal balance in the amount of
the lesser of (i) the amount of advances made as of such date, or (ii) One
Hundred Forty Million Dollars ($140,000,000.00), or (iii) fifty percent
(50%) of the value of the Shares on such date, that shall be due and payable
on June 15, 2008 (the "Term Conversion").
(e) PREPAYMENT. Borrower may prepay principal on the Loan solely in
accordance with the provisions of the Note.
2. COLLATERAL:
(a) SECURITIES COLLATERAL. As security for all indebtedness of
Borrower to Bank subject hereto, Borrower hereby grants to Bank security
interests of first priority in 7,782,994 shares of Xxxxxx Xxxxx Company
(NYSE: RKY) Class B Common Stock (the "Shares") to be held in a custody
account number 00000000 with Xxxxx Fargo Bank, National Association, acting
through its investment group, during the term of the Loan. The Shares shall
be maintained with Bank as collateral throughout the term of the Loan. Bank
shall be provided with all necessary documents and consents to allow Bank to
exercise all available remedies against the Collateral pursuant to he terms
of the Loan Documents.
All of the foregoing shall be evidenced by and subject to the terms of
such security agreements, financing statements, deeds of trust and other
documents as Bank shall reasonably require, all in form and substance
satisfactory to Bank. Borrower shall reimburse Bank immediately upon demand
for all reasonable costs and expenses incurred by Bank in connection with any
of the foregoing security, including without limitation, filing and recording
fees and costs of appraisals, audits and title insurance.
(b) DIVIDEND COLLATERAL. All dividends from the Shares shall be
deposited into a restricted account with Bank, viz. custody account number
00000000 (the "Dividend Account"), pursuant to which Bank is authorized upon
the occurrence of an Event of Default, or as otherwise provided in Section
II-5 hereof, to withdraw funds sufficient to make all payments of debt
service on the Loan.
(c) MINIMUM COLLATERAL VALUE. The value of the Shares shall not at
any time be less that two hundred percent (200%) of the outstanding principal
amount of the Loan (the "Required Value"). In the event the value of the
Shares, for any reason and at any time, is less than the Required Value,
Borrower shall within ten (10) business days make a principal reduction on
the Loan or provide additional collateral of a nature satisfactory to Bank,
in either case in amounts or with values sufficient to achieve the Required
Value. As used in this Agreement, the value of Shares shall be the closing
price of such Shares as quoted on the New York Stock Exchange on the date of
determination.
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December 22, 2002
Page 3
II. INTEREST/FEES:
1. INTEREST. The outstanding principal balance of the Note shall
bear interest at the rate of interest set forth in the Note.
2. COMPUTATION AND PAYMENT. Interest shall be computed on the basis
of a 360-day year, actual days elapsed. Interest shall be payable at the
times and place set forth in the Note.
3. COMMITMENT FEE. Borrower shall pay to Bank a non-refundable
commitment fee for the Note equal to one half percent (.50%) of the converted
amount, which fee shall be due and payable in full on June 15, 2003, upon the
occurrence of the Term Conversion.
4. COMPENSATING BALANCES. From and after the Term Conversion,
Borrower, together with any affiliates of Borrower, shall collectively
maintain with Bank average free collected deposit balances ("Compensating
Balances"), calculated on a quarterly basis, equal to an aggregate of Twenty
Five Million Dollars ($25,000,000.00). To the extent such Compensating
Balances are not maintained after the Term Conversion, Borrower shall either
(i) pay to Bank a fee equal to eight-tenths percent (0.8%) above LIBOR (as
defined in the Note) for a Fixed Rate Term (as defined in the Note) of one
month or (ii) adjust the interest rate on the Loan in an amount to be
determined by Bank, in its sole discretion, based on the prevailing market
conditions at the time of such deficiency and in proportion to the amount of
the balance deficiency.
5. COLLECTION OF PAYMENTS. Borrower authorizes Bank to collect all
principal, interest and fees due under each credit subject hereto by charging
either (i) Borrower's deposit account number 3846732703 with Bank, (ii) the
Dividend Account, or any other deposit account maintained by Borrower with
Bank, for the full amount thereof. Should there be insufficient funds in any
such deposit account to pay all such sums when due, the full amount of such
deficiency shall be immediately due and payable by Borrower.
III. REPRESENTATIONS AND WARRANTIES:
Borrower makes the following representations and warranties to Bank,
which representations and warranties shall survive the execution of this
letter and shall continue in full force and effect until the full and final
payment, and satisfaction and discharge, of all obligations of Borrower to
Bank subject to this letter.
1. LEGAL STATUS. Borrower is a limited liability company, duly
organized and existing and in good standing under the laws of the State of
Delaware, and is qualified or licensed to do business in all jurisdictions in
which such qualification or licensing is required or in which the failure to
so qualify or to be so licensed could have a material adverse effect on
Borrower.
2. AUTHORIZATION AND VALIDITY. This letter agreement, the Note and
each other contract, instrument and document deemed necessary by Bank to
evidence any extension of credit to Borrower pursuant to the terms and
conditions hereof (collectively, the "Loan Documents") have been duly
authorized, and upon their execution and delivery in accordance with the
provisions
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December 22, 2002
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hereof will constitute legal, valid and binding agreements and obligations of
Borrower, enforceable in accordance with their respective terms.
3. NO VIOLATION. The execution, delivery and performance by
Borrower of each of the Loan Documents do not violate any provision of any
law or regulation, or contravene any provision of the Articles of
Organization or Operating Agreement of Borrower, or result in a breach of or
constitute a default under any contract, obligation, indenture or other
instrument to which Borrower is a party or by which Borrower may be bound.
4. LITIGATION. There are no pending, or to the Borrower's knowledge
threatened, actions, claims, investigations, suits or proceedings by or
before any governmental authority, arbitrator, court or administrative agency
which could have a material adverse effect on the financial condition or
operation of Borrower other than those disclosed by Borrower to Bank in
writing prior to the date hereof.
5. INCOME TAX RETURNS. Borrower has no knowledge of any pending
assessments or adjustments of its income tax payable with respect to any year.
6. NO SUBORDINATION. There is no agreement, indenture, contract or
instrument to which Borrower is a party or by which Borrower is bound that
requires the subordination in right of payment of any of Borrower's
obligations subject to this letter to any other obligation of Borrower.
7. PERMITS, FRANCHISES. Borrower possesses, and will hereafter
possess, all permits, consents, approvals, franchises and licenses required
and all rights to trademarks, trade names, patents and fictitious names, if
any, necessary to enable it to conduct the business in which it is now
engaged in compliance with applicable law.
8. ERISA. Borrower is in compliance in all material respects with
all applicable provisions of the Employee Retirement Income Security Act of
1974, as amended or recodified from time to time ("ERISA"); Borrower has not
violated any provision of any defined employee pension benefit plan (as
defined in ERISA) maintained or contributed to by Borrower (each, a "Plan");
no Reportable Event, as defined in ERISA, has occurred and is continuing with
respect to any Plan initiated by Borrower; Borrower has met its minimum
funding requirements under ERISA with respect to each Plan; and each Plan
will be able to fulfill its benefit obligations as they come due in
accordance with the Plan documents and under generally accepted accounting
principles.
9. OTHER OBLIGATIONS. Borrower is not in default on any obligation
for borrowed money, any purchase money obligation or any other material
lease, commitment, contract, instrument or obligation.
10. ENVIRONMENTAL MATTERS. Except as disclosed by Borrower to Bank
in writing prior to the date hereof, Borrower is in compliance in all
material respects with all applicable federal or state environmental,
hazardous waste, health and safety statutes, and any rules or regulations
adopted pursuant thereto, which govern or affect any of Borrower's operations
and/or properties, including without limitation, the Comprehensive Environmental
Response,
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December 22, 2002
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Compensation and Liability Act of 1980, the Superfund Amendments and
Reauthorization Act of 1986, the Federal Resource Conservation and Recovery Act
of 1976, and the Federal Toxic Substances Control Act, as any of the same may be
amended, modified or supplemented from time to time. None of the operations of
Borrower is the subject of any federal or state investigation evaluating whether
any remedial action involving a material expenditure is needed to respond to a
release of any toxic or hazardous waste or substance into the environment.
Borrower has no material contingent liability in connection with any release of
any toxic or hazardous waste or substance into the environment.
IV. CONDITIONS:
1. CONDITIONS OF INITIAL EXTENSION OF CREDIT. The obligation of
Bank to extend any credit contemplated by this letter is subject to
fulfillment to Bank's satisfaction of all of the following conditions:
(a) DOCUMENTATION. Bank shall have received each of the Loan
Documents, duly executed by Xxxxxxxx and the other parties to be bound
thereby and in form and substance satisfactory to Bank.
(b) FINANCIAL CONDITION. There shall have been no material adverse
change, as determined by Bank, in the financial condition or business of
Borrower, nor any material decline, as determined by Bank, in the market
value of any collateral required hereunder or a substantial or material
portion of the assets of Borrower.
(c) SECURITIES DOCUMENTATION. (i) Borrower shall have furnished to
Bank all documents necessary to enable Bank to comply with all applicable
securities laws in connection with any sale by Bank of the Shares. Such
documents shall include, but not be limited to, all documents necessary to
enable Bank to sell the Shares in compliance with SEC Rule 144.
(ii) Borrower shall have furnished to Bank a current, as of the date
of closing, calculation of the volume, timing and other limitations imposed
by applicable securities laws, including Rule 144, on the Bank's ability to
liquidate the Shares.
(d) LEGAL OPINIONS. Borrower shall have provided, or caused to be
provided, legal opinions from counsel for the Coors Family Trusts, counsel
for Borrower and chief counsel of the Xxxxxx Xxxxx Company, as shall be
required by Bank, or counsel to Bank.
(e) RIGHT OF FIRST REFUSAL. Borrower shall have provided evidence
that Xxxxxx Xxxxx Company has waived its right of first refusal in connection
with the transfers of the Shares from their current owners into the Borrower,
the transfer of the Shares from the Borrower to the Bank as collateral for
the Loan, or the any transfer of Shares in the event of the exercise of any
remedies by Bank.
2. CONDITIONS OF EACH EXTENSION OF CREDIT. The obligation of Bank
to make each extension of credit requested by Xxxxxxxx hereunder shall be
subject to the fulfillment to Bank's satisfaction of each of the following
conditions:
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Page 6
(a) COMPLIANCE. The representations and warranties contained herein
and in each of the other Loan Documents shall be true on and as of the date
of the signing of this letter and on the date of each extension of credit by
Bank pursuant hereto, with the same effect as though such representations and
warranties had been made on and as of each such date, and on each such date,
no Default shall have occurred and be continuing or shall exist. Without
limiting the foregoing, Xxxxxxxx agrees that the requirement of compliance
with the terms of this Agreement shall specifically include compliance with
the limitations on advances in Section I.1, and the collateral value
requirement in Section 1.2(c).
(b) DOCUMENTATION. Bank shall have received all additional documents
which may be required in connection with such extension of credit.
V. COVENANTS:
Borrower covenants that so long as Bank remains committed to extend
credit to Borrower pursuant hereto, or any liabilities (whether direct or
contingent, liquidated or unliquidated) of Borrower to Bank under any of the
Loan Documents remain outstanding, and until payment in full of all
obligations of Borrower subject hereto, Borrower shall, unless Bank otherwise
consents in writing:
1. PUNCTUAL PAYMENT. Punctually pay all principal, interest, fees
or other liabilities due under any of the Loan Documents at the times and
place and in the manner specified therein.
2. ACCOUNTING RECORDS. Maintain adequate books and records in
accordance with accounting principles satisfactory to Bank consistently
applied, and permit any representative of Bank, at any reasonable time during
normal business hours, to inspect, audit and examine such books and records,
to make copies of the same and inspect the properties of Borrower.
3. FINANCIAL STATEMENTS. Provide to Bank all of the following, in
form and detail satisfactory to Bank:
(a) not later than ninety (90) days after and as of the end of each
fiscal year, a financial statement of Borrower, prepared by an independent
certified public accountant acceptable to Bank, to include a balance sheet,
income statement, statement of cash flow, and application of funds statement,
and within 10 days after filing, but in no event later than each April 15,
unless Borrower has provided bank with evidence of the granting of an
extension for such filing, copies of Xxxxxxxx's filed federal income tax
returns for such year; and
(b) contemporaneously with each annual financial statement of
Xxxxxxxx, a certificate of a manager of Xxxxxxxx that said financial
statements are accurate and that there exists no Default or Event of Default;
(c) from time to time such other information as Bank may reasonably
request.
4. COMPLIANCE. Preserve and maintain all licenses, permits,
governmental approvals, rights, privileges and franchises necessary for the
conduct of its business; and comply with the provisions of all documents
pursuant to which Borrower is organized and/or which govern
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Xxxxxxxx's continued existence and comply in all material respects with the
requirements of all laws, rules, regulations and orders of a governmental agency
applicable to Borrower and/or its business.
5. INSURANCE. Maintain and keep in force insurance of the types and
in amounts customarily carried in lines of business similar to that of
Borrower, and deliver to Bank from time to time at Bank's request schedules
setting forth all insurance then in effect.
6. FACILITIES. Keep all properties useful or necessary to
Borrower's business in good repair and condition, normal wear and tear
excepted, and from time to time make necessary repairs, renewals and
replacements thereto so that such properties shall be fully and efficiently
preserved and maintained.
7. TAXES AND OTHER LIABILITIES. Pay and discharge when due any and
all indebtedness, obligations, assessments and taxes, both real or personal,
including without limitation federal and state income taxes and state and
local property taxes and assessments, except (a) such as Borrower may in good
faith contest or as to which a bona fide dispute may arise, and (b) for which
Borrower has made provision, to Bank's satisfaction, for eventual payment
thereof in the event Borrower is obligated to make such payment.
8. LITIGATION. Promptly give notice in writing to Bank of any
litigation pending or threatened against Borrower with a claim in excess of
$1,000,000.00.
9. CAPITAL EXPENDITURES. Not make any additional investment in
fixed assets in any fiscal year.
10. LEASE EXPENDITURES. Not incur operating lease expense in any
fiscal year.
11. OTHER INDEBTEDNESS. Not create, incur, assume or permit to exist
any indebtedness or liabilities resulting from borrowings, loans or advances,
whether secured or unsecured, matured or unmatured, liquidated or
unliquidated, joint or several, except (a) the liabilities of Borrower to
Bank, (b) ) indebtedness of Borrower to one or more members of Borrower, to
the Xxxxxx Xxxxx Xx. Trust, or to Golden Heritage LLC, in an aggregate amount
not to exceed $50,000,000 incurred in connection with the Term Conversion,
which indebtedness shall be completely subordinated in right of repayment to
the Loan, and (c) any other liabilities of Borrower existing as of, and
disclosed to Bank and deemed acceptable by Bank, prior to the date hereof.
12. MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Not merge into or
consolidate with any other entity; nor make any substantial change in the
nature of Xxxxxxxx's business as conducted as of the date hereof; nor acquire
all or substantially all of the assets of any other entity; nor sell, lease,
transfer or otherwise dispose of all or a substantial or material portion of
Borrower's assets except in the ordinary course of its business.
13. GUARANTIES. Not guarantee or become liable in any way as surety,
endorser (other than as endorser of negotiable instruments for deposit or
collection in the ordinary course of business), accommodation endorser or
otherwise for, nor pledge or hypothecate any assets of
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Borrower as security for, any liabilities or obligations of any other person or
entity, except any of the foregoing in favor of Bank.
14. LOANS, ADVANCES, INVESTMENTS. Not make any loans or advances to
or investments in any person or entity, except any of the foregoing existing
as of, and disclosed to Bank and deemed acceptable by, Bank prior to Bank's
extension of any credit to Borrower, and additional loans or advances to
Keystone Acquisition Corp. or Keystone Holdings, LLC, in amounts not to
exceed an aggregate of $200,000,000.00 outstanding at any one time.
15. PLEDGE OF ASSETS. Not mortgage, pledge, grant or permit to exist
a security interest in, or lien upon, all or any portion of Xxxxxxxx's assets
now owned or hereafter acquired, except any of the foregoing in favor of Bank
or which are existing as of, and disclosed to Bank in writing prior to, the
date hereof.
VI. DEFAULT, REMEDIES:
1. DEFAULT, REMEDIES. Upon the occurrence of an Event of Default or
defined event of default under any of the Loan Documents and upon notice to
Debtor (except that no notice shall be required with respect to an Event of
Default described in clause (f) of the Note under the heading Events of
Default or with respect to the action described in clause (b) of this
Section): (a) all indebtedness of Borrower under each of the Loan Documents,
any term thereof to the contrary notwithstanding, shall, at Bank's option
become immediately due and payable; (b) the obligation, if any, of Bank to
extend any further credit under any of the Loan Documents shall immediately
cease and terminate; and (c) Bank shall have all rights, powers and remedies
available under each of the Loan Documents, or accorded by law, including
without limitation the right to resort to any or all security for any credit
subject hereto and to exercise any or all of the rights of a beneficiary or
secured party pursuant to applicable law. All rights, powers and remedies of
Bank may be exercised at any time by Bank and from time to time after the
occurrence of any such Event of Default or defined event of default, are
cumulative and not exclusive, and shall be in addition to any other rights,
powers or remedies provided by law or equity. Upon the occurrence of a
Default under any of the Loan Documents, the obligation, if any, of Bank to
make advances under any of the Loan Documents shall immediately cease during
the cure period with respect to such Default.
2. NO WAIVER. No delay, failure or discontinuance of Bank in
exercising any right, power or remedy under any of the Loan Documents shall
affect or operate as a waiver of such right, power or remedy; nor shall any
single or partial exercise of any such right, power or remedy preclude, waive
or otherwise affect any other or further exercise thereof or the exercise of
any other right, power or remedy. Any waiver, permit, consent or approval of
any kind by Bank of any breach of or default under any of the Loan Documents
must be in writing and shall be effective only to the extent set forth in
such writing.
VII. MISCELLANEOUS:
1. NOTICES. All notices, requests and demands which any party is
required or may desire to give to any other party under any provision of this
letter must be in writing delivered to each party at its address first set
forth above, or to such other address as any party may
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Page 9
designate by written notice to all other parties. Each such notice, request and
demand shall be deemed given or made as follows: (a) if sent by hand delivery,
upon delivery; (b) if sent by mail, upon the earlier of the date of receipt or
three (3) days after deposit in the U.S. mail, first class and postage prepaid;
and (c) if sent by telecopy, upon receipt.
2. COSTS, EXPENSES AND ATTORNEYS' FEES. Borrower shall pay to Bank
immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees (to include outside
counsel fees and all allocated costs of Bank's in-house counsel), expended or
incurred by Bank in connection with (a) the negotiation and preparation of
this letter and the other Loan Documents, Bank's continued administration
hereof and thereof, and the preparation of amendments and waivers hereto and
thereto, (b) the enforcement of Bank's rights and/or the collection of any
amounts which become due to Bank under any of the Loan Documents, and (c) the
prosecution or defense of any action in any way related to any of the Loan
Documents, including without limitation, any action for declaratory relief,
whether incurred at the trial or appellate level, in an arbitration
proceeding or otherwise, and including any of the foregoing incurred in
connection with any bankruptcy proceeding (including without limitation, any
adversary proceeding, contested matter or motion brought by Bank or any other
person) relating to any Borrower or any other person or entity.
3. SUCCESSORS, ASSIGNMENT. This letter shall be binding upon and
inure to the benefit of the heirs, executors, administrators, legal
representatives, successors and assigns of the parties; provided however,
that Borrower may not assign or transfer its interest hereunder without
Bank's prior written consent. Bank reserves the right to sell, assign,
transfer, negotiate or grant participations in all or any part of, or any
interest in, Bank's rights and benefits under each of the Loan Documents. In
connection therewith Bank may disclose all documents and information which
Bank now has or hereafter may acquire relating to any credit subject hereto,
Borrower or its business or any collateral required hereunder.
4. ENTIRE AGREEMENT; AMENDMENT. This letter and the other Loan
Documents constitute the entire agreement between Borrower and Bank with
respect to each credit subject hereto and supersede all prior negotiations,
communications, discussions and correspondence concerning the subject matter
hereof. This letter may be amended or modified only in writing signed by
each party hereto.
5. NO THIRD PARTY BENEFICIARIES. This letter is made and entered
into for the sole protection and benefit of the parties hereto and their
respective permitted successors and assigns, and no other person or entity
shall be a third party beneficiary of, or have any direct or indirect cause
of action or claim in connection with, this letter or any other of the Loan
Documents to which it is not a party.
6. SEVERABILITY OF PROVISIONS. If any provision of this letter
shall be prohibited by or invalid under applicable law, such provision shall
be ineffective only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or any remaining provisions of
this letter.
7. GOVERNING LAW. This letter shall be governed by and construed in
accordance with the laws of the State of Colorado.
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Page 10
8. ARBITRATION.
(a) ARBITRATION. The parties hereto agree, upon demand by any party,
to submit to binding arbitration all claims, disputes and controversies
between or among them (and their respective employees, officers, directors,
attorneys, and other agents), whether in tort, contract or otherwise arising
out of or relating to in any way (i) the Loan and related Loan Documents
which are the subject of this Agreement and its negotiation, execution,
collateralization, administration, repayment, modification, extension,
substitution, formation, inducement, enforcement, default or termination; or
(ii) requests for additional credit.
(b) GOVERNING RULES. Any arbitration proceeding will (i) proceed in
a location in Colorado selected by the American Arbitration Association
("AAA"); (ii) be governed by the Federal Arbitration Act (Title 9 of the
United States Code), notwithstanding any conflicting choice of law provision
in any of the documents between the parties; and (iii) be conducted by the
AAA, or such other administrator as the parties shall mutually agree upon, in
accordance with the AAA's commercial dispute resolution procedures, unless
the claim or counterclaim is at least $1,000,000.00 exclusive of claimed
interest, arbitration fees and costs in which case the arbitration shall be
conducted in accordance with the AAA's optional procedures for large, complex
commercial disputes (the commercial dispute resolution procedures or the
optional procedures for large, complex commercial disputes to be referred to,
as applicable, as the "Rules"). If there is any inconsistency between the
terms hereof and the Rules, the terms and procedures set forth herein shall
control. Any party who fails or refuses to submit to arbitration following a
demand by any other party shall bear all costs and expenses incurred by such
other party in compelling arbitration of any dispute. Nothing contained
herein shall be deemed to be a waiver by any party that is a bank of the
protections afforded to it under 12 U.S.C. ss.91 or any similar applicable
state law.
(c) NO WAIVER OF PROVISIONAL REMEDIES, SELF-HELP AND FORECLOSURE.
The arbitration requirement does not limit the right of any party to
(i) foreclose against real or personal property collateral; (ii) exercise
self-help remedies relating to collateral or proceeds of collateral such as
setoff or repossession; or (iii) obtain provisional or ancillary remedies such
as replevin, injunctive relief, attachment or the appointment of a receiver,
before during or after the pendency of any arbitration proceeding. This
exclusion does not constitute a waiver of the right or obligation of any party
to submit any dispute to arbitration or reference hereunder, including those
arising from the exercise of the actions detailed in sections (i), (ii) and
(iii) of this paragraph.
(d) ARBITRATOR QUALIFICATIONS AND POWERS. Any arbitration proceeding
in which the amount in controversy is $5,000,000.00 or less will be decided
by a single arbitrator selected according to the Rules, and who shall not
render an award of greater than $5,000,000.00. Any dispute in which the
amount in controversy exceeds $5,000,000.00 shall be decided by majority vote
of a panel of three arbitrators; provided however, that all three arbitrators
must actively participate in all hearings and deliberations. The arbitrator
will be a neutral attorney licensed in the State of Colorado or a neutral
retired judge of the state or federal judiciary of Colorado, in either case
with a minimum of ten years experience in the substantive law applicable to
the subject matter of the dispute to be arbitrated. The arbitrator will
determine whether or not an
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December 22, 2002
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issue is arbitratable and will give effect to the statutes of limitation in
determining any claim. In any arbitration proceeding the arbitrator will decide
(by documents only or with a hearing at the arbitrator's discretion) any
pre-hearing motions which are similar to motions to dismiss for failure to state
a claim or motions for summary adjudication. The arbitrator shall resolve all
disputes in accordance with the substantive law of Colorado and may grant any
remedy or relief that a court of such state could order or grant within the
scope hereof and such ancillary relief as is necessary to make effective any
award. The arbitrator shall also have the power to award recovery of all costs
and fees, to impose sanctions and to take such other action as the arbitrator
deems necessary to the same extent a judge could pursuant to the Federal Rules
of Civil Procedure, the Colorado Rules of Civil Procedure or other applicable
law. Judgment upon the award rendered by the arbitrator may be entered in any
court having jurisdiction. The institution and maintenance of an action for
judicial relief or pursuit of a provisional or ancillary remedy shall not
constitute a waiver of the right of any party, including the plaintiff, to
submit the controversy or claim to arbitration if any other party contests such
action for judicial relief.
(e) DISCOVERY. In any arbitration proceeding discovery will be
permitted in accordance with the Rules. All discovery shall be expressly
limited to matters directly relevant to the dispute being arbitrated and must
be completed no later than 20 days before the hearing date and within 180
days of the filing of the dispute with the AAA. Any requests for an
extension of the discovery periods, or any discovery disputes, will be
subject to final determination by the arbitrator upon a showing that the
request for discovery is essential for the party's presentation and that no
alternative means for obtaining information is available.
(f) CLASS PROCEEDINGS AND CONSOLIDATIONS. The resolution of any
dispute arising pursuant to the terms of this Agreement shall be determined
by a separate arbitration proceeding and such dispute shall not be
consolidated with other disputes or included in any class proceeding.
(g) PAYMENT OF ARBITRATION COSTS AND FEES. The arbitrator shall
award all costs and expenses of the arbitration proceeding.
(h) MISCELLANEOUS. To the maximum extent practicable, the AAA, the
arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the dispute with the
AAA. No arbitrator or other party to an arbitration proceeding may disclose
the existence, content or results thereof, except for disclosures of
information by a party required in the ordinary course of its business or by
applicable law or regulation. If more than one agreement for arbitration by
or between the parties potentially applies to a dispute, the arbitration
provision most directly related to the Loan Documents or the subject matter
of the dispute shall control. This arbitration provision shall survive
termination, amendment or expiration of any of the Loan Documents or any
relationship between the parties.
Keystone Financing LLC
December 22, 2002
Page 12
Your acknowledgment of this letter shall constitute acceptance of the
foregoing terms and conditions. Bank's commitment to extend any credit to
Borrower pursuant to the terms of this letter shall terminate on December 31,
2002, unless this letter is acknowledged by Xxxxxxxx and returned to Bank on
or before that date.
Sincerely,
XXXXX FARGO BANK,
NATIONAL ASSOCIATION
By: /s/ XXXXXXXXX X'XXXXXX
-------------------------------------
Xxxxxxxxx X'Xxxxxx, Vice President
Acknowledged and accepted as of DECEMBER 22, 2002:
-----------------
KEYSTONE FINANCING LLC
By: /s/ XXXXXXX X. XXXXX
--------------------------------------------
Xxxxxxx X. Xxxxx, Manager
