Exhibit 10.5
[Execution Copy]
LOAN AND SECURITY AGREEMENT
by and among
THE DOE RUN RESOURCES CORPORATION
FABRICATED PRODUCTS, INC.
as Borrowers
and
CONGRESS FINANCIAL CORPORATION
as Lender
Dated: March 12, 1998
TABLE OF CONTENTS
Page
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RECITALS............................................................... 1
SECTION 1. DEFINITIONS.................................................1
SECTION 2. CREDIT FACILITY............................................20
2.1 Loans......................................................20
2.2 Letter of Credit Accommodations............................21
2.3 Maximum Credit.............................................23
2.4 Reserves...................................................23
2.5 Mandatory Prepayments......................................23
2.6 Interest...................................................24
2.7 Closing Fee................................................24
2.8 Servicing Fee..............................................24
2.9 Unused Line Fee............................................25
2.10 Authorization to Make Loans................................25
2.11 Use of Proceeds............................................25
SECTION 3. CONDITIONS PRECEDENT TO LOANS AND
OTHER FINANCIAL ACCOMMODATIONS .........................26
3.1 Conditions Precedent to Initial Loans and Letter
of Credit Accommodations................................26
3.2 Conditions Precedent to All Loans and Letter
of Credit Accommodations................................28
SECTION 4. COLLATERAL.................................................29
SECTION 5. REPRESENTATIONS AND WARRANTIES.............................30
5.1 Organization and Qualification.............................31
5.2 Corporate Power and Authority..............................31
5.3 Issuance of Senior Notes; Disposition of Proceeds..........31
5.4 Capitalization.............................................32
5.5 Compliance with Other Agreements and Applicable Law........33
5.6 Governmental Approval......................................34
5.7 Chief Executive Office; Collateral Locations...............34
5.8 Priority of Liens/Title to Properties......................35
5.9 Tax Returns................................................35
5.10 Litigation.................................................35
(i)
5.11 Intellectual Property......................................36
5.12 Accounts...................................................36
5.13 Employee Benefits..........................................36
5.14 Environmental Compliance...................................37
5.15 Bank Accounts..............................................38
5.16 Investment Company.........................................38
5.17 Regulation G; Securities Exchange Act of 1934..............38
5.18 No Material Adverse Change.................................39
5.19 Financial Statements.......................................39
5.20 Disclosure.................................................39
5.21 Labor Disputes.............................................40
5.22 Corporate Name; Prior Transactions.........................40
5.23 Restrictions on Subsidiaries...............................40
5.24 Material Contracts.........................................40
SECTION 6. ADDITIONAL COVENANTS.......................................41
6.1 Tradenames.................................................41
6.2 Subsidiaries...............................................41
6.3 Indebtedness...............................................42
6.4 Limitation on Liens........................................47
6.5 Loans, Investments, Guarantees, Etc. ......................50
6.6 Transactions with Affiliates...............................52
6.7 Restricted Payments........................................53
6.8 Changes in Business........................................55
6.9 Maintenance of Existence...................................55
6.10 Consolidated Net Worth.....................................55
6.11 Sale of Assets, Consolidation, Merger, Dissolution, Etc. ..55
6.12 Compliance with Laws, Regulations, Etc.....................56
6.13 Payment of Taxes and Claims................................57
6.14 Properties in Good Condition...............................57
6.15 Insurance..................................................58
6.16 Compliance with ERISA......................................59
6.17 Additional Bank Accounts...................................59
6.18 Notice of Default..........................................59
6.19 Financial Statements and Other Information.................59
6.20 Limitation of Voluntary Payments; Preferred Stock;
Amendments or Modifications of Certain Agreements; etc..64
6.21 Limitation on Restrictions Affecting Subsidiaries..........65
6.22 Further Assurances.........................................65
(ii)
SECTION 7. EVENTS OF DEFAULT AND REMEDIES.............................66
7.1 Events of Default..........................................66
7.2 Remedies...................................................68
SECTION 8. COLLECTION AND ADMINISTRATION..............................71
8.1 Collections; Management of Collateral......................71
8.2 Payments...................................................72
8.3 Borrowers' Loan Account....................................73
8.4 Statements.................................................73
8.5 Right of Inspection; Access................................73
8.6 Accounts Documentation.....................................74
8.7 Specific Powers............................................74
SECTION 9. EFFECTIVE DATE; TERMINATION; COSTS.........................75
9.1 Term.......................................................75
9.2 Expenses and Additional Fees...............................76
9.3 Survival of Agreement......................................77
9.4 No Waiver; Cumulative Remedies.............................77
9.5 Notices....................................................78
9.6 Entire Agreement...........................................78
9.7 Confidentiality............................................78
9.8 Partial Invalidity.........................................79
9.9 Headings...................................................79
9.10 Counterparts...............................................79
SECTION 10. JURY TRIAL WAIVER; OTHER WAIVERS
AND CONSENTS; GOVERNING LAW ...........................79
10.1 Governing Law; Choice of Forum; Service of Process;
Jury Trial Waiver.......................................79
10.2 Waiver of Notices..........................................80
10.3 Amendments and Waivers.....................................81
10.4 Waiver of Counterclaims....................................81
10.5 Indemnification............................................81
10.6 Successors and Assigns.....................................81
(iii)
EXHIBITS AND SCHEDULES
Exhibit A Borrowing Base Certificate
Schedule 1.5 List of Banco de Credito Agreements
Schedule 1.29 Concentration Criteria for Specific Account Debtors
Schedule 1.39 Existing Letters of Credit
Schedule 1.83 List of Intercompany Services Agreements
Schedule 5.1(a) Jurisdictions of Qualification
Schedule 5.1(b) Subsidiaries
Schedule 5.3 List of Senior Note Agreements
Schedule 5.5 Permits and Missing Permits
Schedule 5.7 Chief Executive Office and Locations of Collateral
Schedule 5.8 Existing Liens
Schedule 5.9 Tax Returns
Schedule 5.10 Pending Litigation
Schedule 5.13 Pension Plans
Schedule 5.14 Environmental Matters
Schedule 5.15 Bank Accounts
Schedule 5.21 Collective Bargaining Agreements
Schedule 5.22 Corporate Name; Tradenames; Prior Transactions
Schedule 5.24 Material Contracts
Schedule 6.3 Existing Indebtedness
Schedule 6.5 Existing Loans, Advances and Guarantees and
(iv)
Guarantee for Helicopter Purchase
(v)
LOAN AND SECURITY AGREEMENT
AGREEMENT dated March 12, 1998 is entered into by and among The Doe Run
Resources Corporation, a New York corporation ("Doe Run"), Fabricated Products,
Inc., a Delaware corporation ("Fabricated Products", and together with the Doe
Run, each individually a "Borrower" and collectively, "Borrowers") and Congress
Financial Corporation, a California corporation ("Lender" as hereinafter further
defined).
W I T N E S S E T H:
WHEREAS, Borrowers have requested that Lender enter into certain financing
arrangements with Borrowers pursuant to which Lender may make loans and provide
other financial accommodations to Borrowers; and
WHEREAS, Lender is willing to agree to make such loans and provide such
other financial accommodations on the terms and conditions set forth herein and
the other Financing Agreements (as defined below);
NOW, THEREFORE, in consideration of the mutual conditions and agreements
set forth herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. DEFINITIONS
For purposes of this Agreement and the other Financing Agreements, the
following terms shall have the respective meanings given to them below:
1.1 "Account Debtor" shall mean each debtor or obligor in any way
obligated on or in connection with any Account.
1.2 "Accounts" shall mean all present and future rights to payment arising
out of the sale, lease or other disposition of Inventory (or other goods to the
extent the sale, lease or other disposition of such other goods gives rise to
rights to payment which are included as accounts receivable in any report or
other information received by Lender) or rendition of services.
1.3 "Affiliate" shall mean, with respect to a specified Person, a
partnership, corporation or any other person which directly or indirectly,
through one or more intermediaries, controls or is controlled by or is under
common control with such Person, and without limiting the generality of the
foregoing, includes (a) any Person which beneficially owns or holds five (5%)
percent or more of any class of voting securities of such Person or other equity
interests in such
Person, (b) any Person of which such Person beneficially owns or holds five (5%)
percent or more of any class of voting securities or in which such Person
beneficially owns or holds five (5%) percent or more of the equity interests and
(c) any director, officer or employee of such Person. For the purposes of this
definition, the term "control" (including with correlative meanings, the terms
"controlled by" and "under common control with"), as used with respect to any
Person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting securities or by contract or otherwise.
1.4 "Banco de Credito" shall mean Banco de Credito Overseas Limited, a
corporation organized under the laws of the Commonwealth of the Bahamas, and its
successors and assigns.
1.5 "Banco de Credito Agreements" shall mean individually and
collectively, the agreements, documents and instruments listed on Schedule 1.5
hereto, as the same now exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.
1.6 "Banco de Credito Deposit Agreement" shall mean the Special Term
Deposit Contract, dated of even date herewith, by and between Banco de Credito
and Doe Run, as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.
1.7 "Blocked Accounts" shall have the meaning set forth in Section 8.1
hereof.
1.8 "Board" shall mean the Board of Governors of the Federal Reserve
System or any successor thereto.
1.9 "Borrowers" shall mean, collectively, (a) The Doe Run Resources
Corporation, a New York corporation, formerly known as St. Xxx Minerals
Corporation and as successor by operation of law to The Doe Run Company,
formerly a Missouri general partnership, and its successors and assigns and (b)
Fabricated Products, Inc., a Delaware corporation, and its successors and
assigns; being sometimes individually referred to herein as a "Borrower".
1.10 "Borrowing Base" shall mean at any time and from time to time the
amount determined by Lender calculated as follows:
(a) the sum of:
(i) up to eighty-five (85%) percent of the Net Amount of Eligible
Accounts of Borrowers, plus
(ii) up to sixty (60%) percent of the Value of the Eligible
Inventory of Borrowers (other than as to Doe Run, Eligible
Stores Inventory), plus
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(iii) as to Doe Run, the lesser of: (A) up to twenty-five (25%)
percent of the Value of the Eligible Stores Inventory or (B)
$2,500,000,
minus
(b) any reserves established by Lender pursuant to Section 2.4
hereof.
1.11 "Borrowing Base Certificate" shall mean a certificate substantially
in the form of Exhibit A hereto, as such form may from time to time be modified
by Lender, which is duly completed (including all schedules thereto) and
executed by the chief financial officer or other appropriate financial officer
of Doe Run acceptable to Lender and delivered to Lender.
1.12 "Business Day" shall mean any day other than a Saturday, Sunday, or
legal holidays on which commercial banks in New York, New York are authorized or
required to close, and any day on which Lender is open for the transaction of
business.
1.13 "By-Products" shall mean by-products resulting from the processing of
the lead ore of Doe Run consisting of copper, zinc, nickel, sulfuric acid,
silver, sodium sulfate and other minerals and chemicals resulting from such
processing.
1.14 "Capitalized Lease Obligations" shall mean any obligation to pay rent
or other amounts under a lease of (or other agreement conveying the right to
use) any property (whether real, personal or mixed) that is required to be
classified and accounted for as a capital lease obligation under GAAP, and, for
the purposes of this Agreement, the amount of such obligation at any date shall
be the capitalized amount thereof at such date, determined in accordance with
GAAP.
1.15 "Capital Stock" shall mean, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated) of
such Person's capital stock at any time outstanding, and any and all rights,
warrants or options exchangeable for or convertible into such capital stock (but
excluding any debt security that is exchangeable for or convertible into such
capital stock).
1.16 "Cash Equivalents" shall mean, at any time, (a) any evidence of
indebtedness with a maturity of one (1) year or less issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof; provided, that, the full faith and credit of the United
States of America is pledged in support thereof, except in the case of any such
evidence of indebtedness issued by the Student Loan Marketing Association, the
Federal National Mortgage Association, a Federal Farm Credit Bank or a Federal
Home Loan Bank so long as any such evidence of indebtedness issued by such
federal governmental entities is rated at least A-1 by Standard & Poor's Rating
Services, a division of The McGraw Hill Companies,
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Inc. ("S&P") or at least P-1 by Xxxxx'x Investor Service, Inc.; (b) certificates
of deposit or bankers' acceptances with a maturity of one (1) year or less of
any financial institution that is a member of the Federal Reserve System having
combined capital and surplus and undivided profits of not less than Two Hundred
Fifty Million Dollars ($250,000,000); (c) commercial paper (including variable
rate demand notes) with a maturity of one (1) year or less issued by a
corporation (except an Affiliate of a Borrower) organized under the laws of any
State of the United States of America or the District of Columbia and rated at
least A-1 by S&P or at least P-1 by Xxxxx'x Investor Service, Inc.; (d)
repurchase obligations with a term of not more than thirty (30) days for
underlying securities of the types described in clause (a) above entered into
with any bank meeting the qualifications specified in clause (b) above; (e)
repurchase agreements and reverse repurchase agreements relating to marketable
direct obligations issued or unconditionally guaranteed by the United States of
America, in each case maturing within one (1) year or less from the date of
acquisition; provided, that, the terms of such agreements comply with the
guidelines set forth in the Federal Financial Agreements of Depository
Institutions With Securities Dealers and Others, as adopted by the Comptroller
of the Currency on October 31, 1985; and (f) investments in money market funds
and mutual funds which invest substantially all of their assets in securities of
the types described in clauses (a) through (e) above.
1.17 "Change of Control" shall mean the occurrence of one or more of the
following events: (a) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all of
the assets of Renco Group or a Borrower to any Person or group of related
Persons for purposes of Section 13(d) of the Securities Exchange Act of 1934, as
amended (a "Group"), together with any Affiliates thereof; (b) the approval by
the holders of Capital Stock of Renco Group or a Borrower, as the case may be,
of any plan or proposal for the liquidation or dissolution of Renco Group or
such Borrower, as the case may be; (c) Renco Group or DRA ceases to own one
hundred (100%) percent of the Capital Stock of Doe Run; (d) Renco Group ceases
to own one hundred (100%) percent of the outstanding Capital Stock of DRA; (e)
Doe Run ceases to own one hundred (100%) percent of the Capital Stock of
Fabricated Products; and (f) the Permitted Holders cease to own ninety (90%) of
the outstanding Capital Stock of Renco Group.
1.18 "Code" shall mean the Internal Revenue Code of 1986, as the same now
exists or may from time to time hereafter be amended, modified, recodified or
supplemented, together with all rules, regulations and interpretations
thereunder or related thereto.
1.19 "Collateral" shall have the meaning set forth in Section 4 hereof.
1.20 "Collateral Access Agreement" shall mean an agreement in writing, in
form and substance satisfactory to Lender, from any lessor of premises to a
Borrower, or any other person to whom any Inventory is consigned or who has
custody, control or possession of any Inventory or is otherwise the owner or
operator of any premises on which any Inventory is located pursuant to which
such lessor, consignee or other person, inter alia, acknowledges the first
priority
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security interest of Lender in such Inventory, agrees to waive any and all
claims such lessor, consignee or other person may, at any time, have against
such Inventory, whether for processing, storage or otherwise, and agrees to
permit Lender access to, and the right to remain on, the premises of such
lessor, consignee or other person so as to exercise Lender's rights and remedies
and otherwise deal with the Collateral.
1.21 "Consolidated Net Income" shall mean, with respect to any Person, the
net income (or loss) of such Person and its Subsidiaries, on a consolidated
basis for such period determined in accordance with GAAP (and as to Doe Run,
including for such purpose Doe Run Cayman and its Subsidiaries); provided, that,
(a) the net income of any Person in which such Person or any Subsidiary of such
Person has an ownership interest with a third party (other than a person that
meets the definition of a Wholly-Owned Subsidiary) shall be included only to the
extent of the amount that has actually been received by such Person or its
Wholly-Owned Subsidiaries in the form of dividends or other distributions during
such period (subject to, in the case of any dividend or distribution received by
a Wholly-Owned Subsidiary of such person, the restrictions set forth in clause
(b) below) and (b) the net income of any Subsidiary of such Person that is
subject to any restrictions or limitation on the payment of dividends or the
making of other distributions shall be excluded to the extent of such
restriction or limitation; provided, that, for purposes of this definition, (i)
there shall be excluded (A) the net income (or loss) of any Person (acquired in
a pooling of interests transaction) accrued prior to the date it becomes a
Subsidiary of such Person or is merged into or consolidated with such Person or
any Subsidiary of such Person, (B) any gain (or loss) (and related tax effects)
resulting from an Asset Sale (as defined below), (C) any extraordinary, unusual
or nonrecurring gains or losses (and related tax effects) in accordance with
GAAP, and (D) any compensation-related expenses arising as a result of the
application of the net proceeds from the issuance of the Senior Notes, (ii) the
term "Asset Sale" as used in this definition shall mean any direct or indirect
sale, issuance, conveyance, transfer, lease, assignment or other transfer for
value by a Borrower or any of its Subsidiaries (including, without limitation,
any sale/leaseback) to any person, in one transaction or a series of related
transactions, of (A) any Capital Stock of any Subsidiary, (B) all or
substantially all of the properties and assets of any division or line of
business of a Borrower or its Subsidiaries or (C) any other properties or assets
of a Borrower or its Subsidiaries other than in the ordinary course of business,
and (iii) for purposes of Section 6.7(b) hereof, the amortization of deferred
financing costs relating to the issuance of the Senior Notes shall be excluded
from the definition of Consolidated Net Income.
1.22 "Consolidated Net Worth" shall mean, as to any Person at any time, in
accordance with GAAP, consistently applied, on a consolidated basis for such
Person and its Subsidiaries (and, as to Doe Run, including for such purpose Doe
Run Cayman and its Subsidiaries), the amount equal to (a) the difference
between: (i) the aggregate net book value of all assets of such Person and its
Subsidiaries, calculating the book value of inventory for this purpose on a
first-in-first-out basis, after deducting from such book values all appropriate
reserves in accordance with GAAP consistently applied (including all reserves
for doubtful receivables,
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obsolescence, depreciation and amortization) and (ii) the total aggregate
Indebtedness and other liabilities of such Person and its Subsidiaries,
including accruals for taxes, workmen's compensation liability and other proper
accruals (other than contingent liabilities which would not be included in the
balance sheet under GAAP) of such Person and its Subsidiaries.
1.23 "Credit Facility" shall mean, collectively, the secured Loans and
Letter of Credit Accommodations provided for hereunder and under the other
Financing Agreements.
1.24 "Doe Run" shall mean The Doe Run Resources Corporation, a New York
corporation, and its successors and assigns.
1.25 "Doe Run Cayman" shall mean Doe Run Cayman, Ltd., a company
incorporated under the laws of the Cayman Islands, and its successors and
assigns.
1.26 "Doe Run Mining" shall mean Doe Run Mining S.R. Ltda., Peruvian
company and its successors and assigns.
1.27 "Doe Run Peru" shall mean Doe Run Peru Ltda., a Peruvian company, and
its successors and assigns.
1.28 "DRA" shall mean DR Acquisition Corp., a Missouri corporation, and
its successors and assigns.
1.29 "Eligible Accounts" shall mean Accounts created by a Borrower arising
out of the sale of goods or rendition of services by such Borrower in the
ordinary course of business, which are and at all times shall continue to be
acceptable to Lender in all respects. Standards of eligibility may be fixed and
revised from time to time solely by Lender in its exclusive judgment. In
determining eligibility, Lender may, but need not, rely on agings, reports and
schedules of Accounts furnished to Lender by such Borrower, but reliance by
Lender thereon from time to time shall not be deemed to limit Lender's right to
revise standards of eligibility at any time as to both present and future
Accounts. In general, an Account shall not be deemed eligible if:
(a) such Borrower does not have sole lawful and absolute title to
such Account; or
(b) it arises out of a sale made by such Borrower to an Affiliate or
to an officer, director or employee of such Borrower, or the Account Debtor
includes any such Person; or
(c) such Accounts of a single Account Debtor or its Affiliates
constitute more than ten (10%) percent of all otherwise Eligible Accounts,
except as to Accounts of the Account Debtors listed on Schedule 1.29 hereto, in
which case if Accounts of such Account Debtors constitute more than the
percentage with respect thereto set forth on Schedule 1.29 hereto (but
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the portion of the Accounts not in excess of the applicable percentage may be
deemed Eligible Accounts); or
(d) such Accounts are unpaid within sixty (60) days after the
original due date for them, but in any event if such Accounts are unpaid more
than one hundred twenty (120) days after the date of the original invoice; or
(e) it is from an Account Debtor or one of its Affiliates that has
an Account excluded under clause (d) above and fifty (50%) percent or more of
all Accounts from such Account Debtor and such of its Affiliates are ineligible
under clause (d) or otherwise; or
(f) the payment terms with respect to such Account are greater than
sixty (60) days from the date of the original invoice;
(g) the Account Debtor for the Account is a creditor of such
Borrower or any Obligor, has or has asserted a right of setoff, has disputed its
liability or has made any claim with respect to the Account or any other Account
which has not been resolved, to the extent of the amount owed by such Borrower
or such Obligor to the Account Debtor, the amount of such actual or asserted
right of setoff (whichever is greater), or the amount of such dispute or claim,
as the case may be; or
(h) the Account Debtor is (or its assets are) the subject of a
proceeding under the U.S. Bankruptcy Code or any similar law or statute of any
other Governmental Authority or an assignment for the benefit of creditors, or
its business has failed or it has suspended its business operations, or has had
appointed a receiver or trustee for it or a substantial portion of its assets or
has generally failed or admitted its inability to pay its debts as they become
due; or
(i) the Account is not payable in U.S. Dollars or the Account Debtor
for the Account is either not incorporated under the laws of a jurisdiction of
the United States of America or any State thereof or Canada or any Province
thereof, or is located outside or has its principal place of business or
substantially all of its assets outside the continental United States or Canada,
except to the extent the Account is supported by an irrevocable letter of credit
that shall be (i) satisfactory to the Lender (as to form, substance and issuer),
(ii) assigned to Lender and directly drawable by Lender and (iii) in the
possession of Lender, provided, that, if the Account Debtor is incorporated in
Canada or any Province thereof, or is located or has its principal place of
business or substantially all of its assets in Canada, such Accounts may only be
Eligible Accounts if such Borrower shall have executed and delivered, or caused
to be executed and delivered, such agreements, documents and instruments as may
be required by Lender to perfect the security interests of Lender in the
Accounts owing by such Account Debtor in accordance with the applicable laws of
Canada or any Province thereof (as determined by Lender) and taken or caused to
be taken such other further actions as Lender may request to
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enable Lender as secured party with respect thereto to collect such Accounts
under the applicable laws of Canada and any Province thereof; or
(j) the sale to the Account Debtor is on a xxxx-and-hold guaranteed
sale (except as otherwise provided below), sale-and-return, ship-and-return,
sale on approval or consignment or other similar basis or made pursuant to any
other written agreement providing for repurchase or return of any merchandise
which has been claimed to be defective or otherwise unsatisfactory; or
(k) the Account Debtor is any Governmental Authority; or
(l) the goods giving rise to such Account have not been shipped and
delivered to the Account Debtor, or the Account otherwise does not represent a
final sale (subject only to the Account Debtor's right to reject non-conforming
goods) except that if the goods giving rise to such Account have not been
shipped and delivered to the Account Debtor, if Lender shall have received a
written agreement, in form and substance satisfactory to Lender, evidencing the
Account Debtor's unconditional obligation to take and pay for such goods; or
(m) the Account does not comply with all applicable law; or
(n) (i) either the perfection, enforceability or validity of
Lender's security interest or Lender's right or ability to receive direct
payments as to such Account is governed by any statutory requirement of any
Governmental Authority other than those of the Uniform Commercial Code, (ii) the
Account Debtor has not waived counterclaims or setoffs as to such Account, (iii)
it is not subject to a valid and perfected first priority security interest,
lien or other encumbrance in favor of the Lender, subject to no security
interest, liens or other encumbrances other than the security interests, liens
or other encumbrances (if any) permitted hereunder or (iv) it does not otherwise
conform to the representations and warranties contained herein or in the other
Financing Agreements; or
(o) as to all or any part of such Account, a check, promissory note,
draft, trade acceptance or other instrument for the payment of money has been
received, presented for payment and returned uncollected for any reason; or
(p) the Account is not payable directly to a lockbox that is subject
to a blocked account arrangement as provided in Section 8.1 hereof; or
(q) Lender in the exercise of its good faith judgment determines it
to be ineligible.
Any Accounts which Lender determines to be ineligible or unacceptable for
purposes of the Borrowing Base at any time shall nevertheless be and remain at
all times part of the Collateral.
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1.30 "Eligible Inventory" shall mean Inventory consisting of finished
goods held for sale in the ordinary course of the business of a Borrower and raw
materials and work-in-process for such finished goods, in each case to the
extent acceptable to Lender in all respects. Standards of eligibility may be
fixed and revised from time to time solely by Lender in its exclusive judgment.
In determining eligibility Lender may, but need not, rely on reports and
schedules of such Inventory furnished to Lender by such Borrower, but reliance
thereon by Lender from time to time shall not be deemed to limit Lender's right
to revise standards of eligibility at any time. In general, except in Lender's
discretion, Inventory shall not be deemed Eligible Inventory if:
(a) it is not owned solely by such Borrower or such Borrower does
not have sole and good, valid and marketable title thereto; or
(b) it is not either (i) located in the continental United States or
(ii) loaded, freight charges and insurance premiums paid, upon a vessel bound
for a port in the continental United States and covered by bills of lading or
other shipping documents, originals of which are in the possession of Lender; or
(c) it is not located at premises owned and operated by such
Borrower or it is on consignment to a third party, provided, that, any Inventory
which would otherwise be deemed Eligible Inventory at locations which are not
owned and operated by such Borrower may nevertheless be considered Eligible
Inventory: (i) if Lender shall have received a Collateral Access Agreement from
the holder of such Inventory or the owner and/or operator of such location, as
the case may be, and (ii) in addition to the agreement described above, if the
Inventory is delivered to the holder, owner and/or operator on consignment and
if required by Lender: (A) the holder, owner and/or operator executes
appropriate UCC-1 financing statements in favor of such Borrower, which are duly
assigned to Lender and (B) any lender to the holder, owner and/or operator with
any interest in Inventory is properly notified of the first priority security
interest in and lien on such Inventory of Lender; or
(d) it is packing or shipping materials or maintenance supplies; or
(e) it is not subject to a valid and perfected first priority
security interest and Lender, except, with respect to Inventory stored at sites
described in clause (c) above, for liens for unpaid rent or normal and customary
warehousing charges, in each case, not yet due; or
(f) it is goods returned or rejected by such Borrower's customers or
goods in transit to third parties (other than to warehouse sites covered by a
Collateral Access Agreement); or
(g) it (i) is prepaid or (ii) is excess (as so reserved by such
Borrower from time to time or as otherwise determined by Lender) or (iii) is
seconds or thirds or (iv) is obsolete, slow moving or unmerchantable, or (v) is
freight/drayage reserves, or (vi) is samples or Inventory on
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hand which is used for promotional and other sales activities, or (vii) does not
otherwise conform to the representations and warranties contained in the credit
documents; or
(h) is used or repossessed, or is attached, seized, made subject to
a writ or distress warrant, levied upon or brought within the possession of any
receiver, trustee, custodian or assignee for the benefit of creditors; or
(i) it is obsolete, defective, damaged or unmerchantable; or
(j) it is goods acquired by such Borrower in or as part of a "bulk"
transfer or sale of assets and such acquisition is not consummated in the
ordinary course of business unless such Borrower has complied with all
applicable bulk sales or bulk transfer laws in connection with such acquisition;
or
(k) it is unmined ore or otherwise constitutes real property; or
(l) Lender in the exercise of its good faith judgment determines it
to be ineligible.
Any Inventory which Lender determines to be ineligible or unacceptable for
purposes of the Borrowing Base at any time shall nevertheless be and remain at
all times part of the Collateral.
1.31 "Eligible Stores Inventory" shall mean Stores Inventory which is
Eligible Inventory.
1.32 "Environmental Laws" shall mean all Federal, State and local laws,
rules, regulations, ordinances, and consent decrees relating to health, safety,
hazardous substances, pollution and environmental matters, as now or at any time
hereafter in effect, applicable to the business and facilities of each Borrower
and its Subsidiaries (whether or not owned by it or any of them), including laws
relating to emissions, discharges, releases or threatened releases of
pollutants, contamination, chemicals, or hazardous, toxic or dangerous
substances, materials or wastes into the environment (including, without
limitation, ambient air, surface water, ground water, land surface or subsurface
strata) or otherwise relating to the generation, manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, chemicals, or hazardous, toxic or dangerous
substances, materials or wastes or relating to or imposing liability or
standards of conduct concerning mining or reclamation of mined land. Such laws
and regulations include, but are not limited to, the Resource Conservation and
Recovery Act of 1976, as amended; the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended; the Superfund Amendments and
Reauthorization Act; the Water Pollution Control Act of 1972; the Solid Waste
Disposal Act; the Insecticide, Fungicide and Rodenticide Act; the Mine Safety
and Health Act of 1977; the Surface Mining Control and Reclamation Act of 1977;
the Safe Drinking Water Act of 1974; the Toxic Substances Control Act, as
amended; the Clean Water Act, as amended; the Clean Air Act,
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as amended; the Hazardous Materials Transportation Act, as amended; U.S.
Department of Transportation and Environmental Protection Agency regulations;
and applicable state counterparts to any of such laws and any common law or
equitable doctrine that may impose liability or obligations for injuries or
damages due to, or threatened as a result of, the presence of or exposure to any
Hazardous Materials.
1.33 "Equipment" shall mean all of each Borrower's now owned and hereafter
acquired equipment and fixtures, of every kind and description, wherever
located, including, without limitation, any and all machinery used in connection
with the manufacture, sale, exchange or lease of goods or rendition of services,
machinery, tooling, tools, telephone equipment, computers, computer hardware and
related computer equipment and accessories (including software and records),
vehicles, dies, jigs, furniture, trade fixtures and fixtures, all attachments,
components, parts, accessions and property now or hereafter affixed thereto,
installed thereon or used in connection therewith, and all additions to and
substitutions and replacements thereof and all existing and future leasehold
interests in equipment and fixtures, wherever located, whether now owned or
hereafter acquired and all licenses and other rights of such Borrower relating
thereto, whether in the possession and control of such Borrower or in the
possession and control of a third person for the account of such Borrower and
all claims to the proceeds of insurance thereon and all maintenance and warranty
records relating thereto.
1.34 "ERISA" shall mean the United States Employee Retirement Income
Security Act of 1974, as the same now exists or may hereafter from time to time
be amended, modified, recodified or supplemented, together with all rules,
regulations and interpretations thereunder or related thereto.
1.35 "ERISA Affiliate" shall mean any (a) corporation which is a member of
the same controlled group of corporations (within the meaning of section 414(b)
of the Code) as a Borrower, (b) partnership or other trade or business (whether
or not incorporated) which is under common control (within the meaning of
Section 414(c) of the Code) with a Borrower, and (c) member of the same
affiliated service group (within the meaning of Section 414(m) of the Code) as a
Borrower.
1.36 "Event of Default" shall have the meaning set forth in Section 7.1
hereof.
1.37 "Excess Availability" shall mean the amount, as determined by Lender,
calculated at any time, equal to: (a) the lesser of (i) the Borrowing Base or
(ii) the Maximum Credit minus (b) the sum of: (i) the amount of all then
outstanding and unpaid Obligations plus (ii) the amount of all then outstanding
Letter of Credit Accommodations (to the extent not included in Obligations in
Section 1.37(b)(i) above), plus (iii) the aggregate amount of (A) all then
outstanding and unpaid trade payables of Borrowers which are outstanding and
unpaid more than sixty (60) days past due as of such time and (B) the book
overdraft of Borrowers.
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1.38 "Existing Lenders" shall mean, collectively, (a) the lenders who are
parties to the Loan and Security Agreement, dated October 23, 1997, by and among
such lenders, BT Commercial Corporation, in its capacity as Agent, Union Bank of
Switzerland, New York Branch, as Syndication Agent, DLJ Capital Funding, Inc.,
as Documentation Agent (in each case pursuant to the Loan and Security
Agreement, dated October 23, 1997, by and among Borrower, DRA, such parties and
the financial institutions who are parties thereto as lenders), and Bankers
Trust Company, as issuing bank, under such Loan and Security Agreement and such
lenders and (b) Bankers Trust Company, as Administrative Agent, Union Bank of
Switzerland, New York Branch, as Syndication Agent, DLJ Capital Funding, Inc.,
as Documentation Agent (in each case pursuant to the Credit Agreement, dated as
of October 23, 1997, by and among such parties and the financial institutions
who are parties thereto as lenders) and such lenders.
1.39 "Existing Letters of Credit" shall mean, collectively, the letters of
credit issued by CoreStates Bank, N.A. for the account of Doe Run set forth on
Schedule 1.39 hereto.
1.40 "Fabricated Products" shall mean Fabricated Products, Inc., a
Delaware corporation, and its successors and assigns.
1.41 "Financing Agreements" shall mean, collectively, this Agreement,
together with all other agreements, documents and instruments now or at any time
hereafter executed and/or delivered by a Borrower or any other person, with, to
or in favor of Lender in connection herewith or pursuant hereto, as this
Agreement and such other agreements, documents or instruments now exist or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.
1.42 "Fixed Rate Notes" shall mean individually and collectively, each and
all of the following (as the same now exist or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced): (a) the 11
1/4% Senior Notes due 2005, Series A (the "Series A Fixed Rate Notes") issued by
Doe Run on the date hereof pursuant to the Senior Note Indenture in the original
principal amount of $200,000,000 and (b) the 11 1/4% Senior Notes due 2005,
Series B (the "Series B Fixed Rate Notes") issued by Doe Run after the date
hereof which have terms identical to the terms of the Series A Fixed Rate Notes
and are offered to the holders of the Series A Fixed Rate Notes pursuant to a
registration statement to be filed by Doe Run with the Securities and Exchange
Commission in exchange for the Series A Fixed Rate Notes held by such person.
1.43 "Floating Rate Notes" shall mean individually and collectively, each
and all of the following (as the same now exist or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced): (a) the
Floating Interest Rate Senior Notes due 2003, Series A (the "Series A Floating
Rate Notes") issued by Doe Run on the date hereof pursuant to the Senior Note
Indenture in the original principal amount of $55,000,000 and (b) the Floating
Interest Rate Senior Notes due 2003, Series B (the "Series B Floating Rate
Notes") issued by
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Xxx Xxx after the date hereof which have terms identical to the terms of the
Series A Floating Rate Notes and are offered to holders of the Series A Floating
Rate Notes pursuant to a registration statement to be filed by Doe Run with the
Securities and Exchange Commission in exchange for the Series A Floating Rate
Notes held by such person.
1.44 "GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time as set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and the statements and pronouncements
of the Financial Accounting Standards Board which are applicable to the
circumstances as of the date of determination except that for purposes of
Section 6.10 hereof, GAAP shall be determined on the basis of such principles in
effect on the date hereof and consistent with those used in the preparation of
the financial statements delivered to Lender prior to the date hereof.
1.45 "Governmental Authority" shall mean any nation or government, any
state, province, or other political subdivision thereof, any central bank (or
similar monetary or regulatory authority) thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.
1.46 "Hazardous Materials" shall mean any hazardous, toxic or dangerous
substances or materials and wastes including without limitation, hydrocarbons
(including naturally occurring or man-made petroleum and hydrocarbons),
flammable explosives, asbestos, urea formaldehyde insulation, radioactive
materials, biological substances, polychlorinated biphenyl, pesticides,
herbicides and any other kind and/or type of pollutants or contaminants
(including, without limitation, materials which include hazardous constituents),
sewage, sludge, industrial slag, solvents and/or any other similar substances,
materials, or wastes and including any other substances, materials, or wastes
that are or became regulated under any Environmental Laws (including, without
limitation, any that are or become classified as hazardous or toxic under any
Environmental Laws.) In the event that any of the applicable Environmental Laws
are amended so as to broaden the meaning of any of the above-referenced terms,
such broader meaning shall apply subsequent to the effective date of such
amendment.
1.47 "Hedging Agreements" shall mean any agreement with respect to (a) the
hedging of price risk associated with the purchase or sale of lead, copper,
zinc, gold and silver under which a Borrower or any Subsidiary is a party or
beneficiary and (b) the hedging of currency risks in connection with funding
payroll expenses; so long as any such agreement under clause (a) or clause (b)
above has been entered into in the ordinary course of business consistent with
past price risk or currency management practices of such Borrower and its
Subsidiaries and not for purposes of speculation.
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1.48 "Indebtedness" shall mean, with respect to any Person, any liability
(a) in respect of borrowed money (whether or not the recourse of the lender is
to the whole of the assets of such Person or only to a portion thereof) or
evidenced by bonds, notes, indentures or similar instruments; (b) representing
the balance deferred and unpaid of the purchase price of any property or
services (except any such balance that constitutes an account payable to a trade
creditor (whether or not an Affiliate) created, incurred, assumed or guaranteed
by such Person in the ordinary course of business of such Person in connection
with obtaining goods, materials or services); (c) all Capitalized Lease
Obligations; (d) any contractual obligations, contingent or otherwise, of such
Person to pay or be liable for the payment of any indebtedness described in this
definition of another Person, including, without limitation, any such
indebtedness, directly or indirectly guaranteed, endorsed (other than for
collection or deposit in the ordinary course of business), co-made or discounted
or sold with recourse by such Person, or in respect of which such Person is
otherwise directly or indirectly liable, including contractual obligations
(contingent or otherwise) arising through any agreement to purchase, repurchase,
or otherwise acquire such indebtedness, obligation or liability or any security
therefor, or to provide funds for the payment or discharge thereof (whether in
the form of loans, advances, stock purchases, capital contributions or
otherwise), or to maintain solvency, assets, level of income, or other financial
condition, or to make payment other than for value received; (e) all obligations
with respect to redeemable stock and redemption or repurchase obligations under
any Capital Stock or other equity securities issued by such Person; (f) all
reimbursement obligations and other liabilities, contingent or otherwise, of
such Person with respect to bonds, letters of credit, banker's acceptances or
similar documents or instruments issued for such Person's account; (g) all
indebtedness of such Person in respect of indebtedness of another Person for
borrowed money or indebtedness of another Person otherwise described in this
definition which is secured by any security interest in, or mortgage or lien
upon the interest in any asset of such Person, whether or not such obligations,
liabilities or indebtedness are assumed by or are a personal liability of such
Person, all as of such time; and (h) all obligations, liabilities and
indebtedness of such Person (marked to market) constituting Interest Rate
Protection Obligations, Hedging Agreements or in respect of foreign exchange
agreements. The term "Indebtedness" shall not be construed to include
obligations for rent or similar amounts payable under operating leases.
1.49 "Initial Purchasers" shall mean, collectively, BT Alex. Xxxxx
Incorporated, Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation and UBS
Securities LLC, and their respective successors and assigns.
1.50 "Interest Rate" shall mean a rate of three-quarters (3/4%) percent
per annum above the Prime Rate; provided, that, Lender may, at its option,
increase such rate to a rate two and three-quarters (2 3/4%) percent per annum
above the Prime Rate at any time without notice (a) for the period on and after
(i) the date of termination or non-renewal hereof until such time as all
Obligations are indefeasibly paid in full (notwithstanding entry of any judgment
against a Borrower), or (ii) the date of any Event of Default, and for so long
as such Event of Default exists or is continuing, as determined by Lender and
(b) on the Loans at any time outstanding in
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excess of the Borrowing Base (whether or not such excess(es) arise or are made
with or without Lender's knowledge or consent and whether made before or after
an Event of Default).
1.51 "Interest Rate Protection Obligations" shall mean the obligations of
any Person pursuant to any arrangement with any other Person whereby, directly
or indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such Person
calculated by applying a fixed or a floating rate of interest on the same
notional amount and shall include, without limitation, interest rate swaps,
caps, floors, collars and similar agreements.
1.52 "Inventory" shall mean all of each Borrower's now owned and hereafter
acquired inventory, wherever located, including, without limitation, all raw
materials, work-in-process (including, without limitation, molten lead and slag
and kettle dross), and finished and semi-finished inventory of any kind, nature
or description, and including, without limitation, (a) all metals and minerals
in whatever form, whether ore, powder, sinter, concentrates, pellets, links,
pigs, or ingots, and including without limitation, lead, zinc, copper, nickel
sulfur, silver bullion, copper matte and other By-Products, (b) the Stores
Inventory, (c) all wrapping, packaging, advertising and shipping materials, and
any other personal property held for sale, exchange or lease or furnished or to
be furnished or used or consumed in the business or in connection with the
manufacturing, packaging, shipping, advertising, selling or furnishing or such
goods, inventory, merchandise and other personal property, and all right, title
and interest therein and thereto, wherever located, whether now owned or
hereafter acquired. The term "Inventory" as used herein shall not include
minerals constituting part of Real Property.
1.53 "Lending Formulas" shall mean the percentages with respect to
Eligible Accounts and Eligible Inventory set forth in the definition of the term
Borrowing Base contained herein.
1.54 "Letter of Credit Accommodations" shall mean with respect to the
Credit Facility, the letters of credit or other guaranties which are from time
to time either (a) issued or opened by Lender for the account of a Borrower or
any Obligor or (b) with respect to which Lender has agreed to indemnify the
issuer or guaranteed to the issuer the performance by a Borrower of its
obligations to such issuer (including, without limitation, the Existing Letters
of Credit).
1.55 "Loans" shall mean, the loans made to or for the benefit of Borrowers
by Lender on a revolving basis pursuant to the terms hereof (involving advances,
repayments and readvances) as set forth in Section 2.1 hereof.
1.56 "Management Agreement" shall mean the Management Consultant
Agreement, dated April 7, 1994, between Doe Run and Renco Group, as the same now
exists or may hereafter be amended, modified, supplemented, extended, renewed,
restated or replaced.
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1.57 "Material Adverse Effect" shall mean a material adverse effect on (a)
the condition (financial or otherwise), business, performance, operations or
properties of Borrowers (taken as a whole); (b) the legality, validity or
enforceability of this Agreement or any of the other Financing Agreements; (c)
the legality, validity, enforceability, perfection or priority of the security
interests and liens of Lender upon the Collateral or any other property which is
security for the Obligations; (d) the Collateral or any other property which is
security for the Obligations, or the value of the Collateral or such other
property; (e) the ability of each Borrower to repay the Obligations or of such
Borrower or any Obligor to perform its obligations under this Agreement or any
of the other Financing Agreements; or (f) the ability of Lender to enforce the
Obligations or realize upon the Collateral or otherwise with respect to the
rights and remedies of Lender under this Agreement or any of the other Financing
Agreements.
1.58 "Material Contract" shall mean any contract or other arrangements
(other than the Financing Agreements), whether written or oral, to which a
Borrower or its Subsidiaries is a party as to which the breach, nonperformance,
cancellation or failure to renew by any party thereto could be reasonably
expected to have a Material Adverse Effect.
1.59 "Maximum Credit" shall mean $100,000,000.
1.60 "Net Amount of Eligible Accounts" shall mean the gross amount of
Eligible Accounts less (a) sales, excise or similar taxes included in the amount
thereof and (b) rebates, discounts, claims, credits and allowances of any nature
at any time issued, owing, granted, outstanding or claimed with respect thereto.
1.61 "Obligations" shall mean any and all Loans, Letter of Credit
Accommodations and all other obligations, liabilities and indebtedness of every
kind, nature and description owing by either or both of Borrowers and/or any
Obligor to Lender and/or its affiliates, including principal, interest, charges,
fees, premiums, indemnities, costs and expenses, however evidenced, whether as
principal, surety, endorser, guarantor or otherwise, arising under or in
connection with this Agreement, any of the other Financing Agreements or by
operation of law in connection therewith, whether now existing or hereafter
arising, whether arising before, during or after the initial or any renewal term
of this Agreement, after the commencement of any case with respect to either or
both of Borrowers or any Obligor under the United States Bankruptcy Code or any
similar statute (including the payment of interest and other amounts which would
accrue and become due but for the commencement of such case, whether or not such
amounts are allowed or allowable in whole or in part in such case), whether
direct or indirect, absolute or contingent, joint or several, due or not due,
primary or secondary, liquidated or unliquidated or secured.
1.62 "Obligor" shall mean any guarantor, endorser, acceptor, surety, or
other person liable on or with respect to the Obligations or who is the owner of
any property which is security for the Obligations, other than Borrowers.
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1.63 "Participant" shall mean any financial institution that acquires a
participation in the interest of Lender in any of the Loans and Letter of Credit
Accommodations.
1.64 "Payment Account" shall have the meaning set forth in Section 8.1
hereof.
1.65 "Permits" shall have the meaning set forth in Section 5.5 hereof.
1.66 "Permitted Holders" shall mean Xxx Xxxx Xxxxxxx, his wife and his
Affiliates, estate, heirs and legatees, and the legal representatives of any of
the foregoing, including, without limitation, the trustee of any trust of which
one or more of the foregoing are the sole beneficiaries
1.67 "Person" or "person" shall mean any individual, sole proprietorship,
partnership, corporation (including, without limitation, any corporation which
elects subchapter S status under the Code), limited liability company, limited
liability partnership, business trust, unincorporated association, joint stock
corporation, trust, joint venture or other entity or any government or any
agency or instrumentality or political subdivision thereof.
1.68 "Prime Rate" shall mean the rate from time to time publicly announced
by CoreStates Bank, N.A., or any successor, as its prime rate, whether or not
such announced rate is the best rate available at such bank, calculated on the
basis of a three hundred sixty (360) day year and actual days elapsed, which
rate shall increase or decrease by an amount equal to each increase or decrease
effective on the first day of the month after any change in such prime rate
based on the prime rate in effect on the last day of the month in which any such
change occurs.
1.69 "Provision for Taxes" shall mean an amount equal to all taxes imposed
on or measured by net income, whether federal, state or local, and whether
foreign or domestic, that are paid or payable by any Person and its Subsidiaries
in respect of such fiscal year on a consolidated basis in accordance with GAAP.
1.70 "Real Property" shall mean all now owned or hereafter acquired real
property of each Borrower, including leasehold interests, together with all
buildings, structures, fixtures and other improvements relating thereto, and all
metals and minerals which are in, under, upon, or to be produced from such real
property to the extent of the rights of such Borrower to the same (but only to
the extent such metals and minerals have not been extracted from the real
property), wherever located.
1.71 "Receivables" shall have the meaning set forth in Section 4.1 hereof.
1.72 "Records" shall mean all of each Borrower's present and future books
of account of every kind or nature, purchase and sale agreements, invoices,
ledger cards, bills of lading and other shipping evidence, statements,
correspondence, memoranda, credit files and other data relating to the other
Collateral or any account debtor, together with the tapes, disks, diskettes and
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other data and software storage media and devices, file cabinets or containers
in or on which the foregoing are stored (including any rights of such Borrower
with respect to the foregoing maintained with or by any other person).
1.73 "Renco Group" shall mean The Renco Group, Inc., a New York
corporation, and its successors and assigns.
1.74 "Senior Note Agreements" shall mean, individually and collectively,
each and all of the following (as the same now exist or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced): (a)
the Senior Notes, (b) the Senior Note Indenture, (c) the Purchase Agreement,
dated March 12, 1998, between the Initial Purchasers and Doe Run with respect to
the purchase from Doe Run of all of the Senior Notes, and (d) the Senior Note
Registration Agreement.
1.75 "Senior Note Indenture" shall mean the Indenture, dated of even date
herewith, between Doe Run and the Senior Note Trustee with respect to the Senior
Notes, as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.
1.76 "Senior Note Registration Agreement" shall mean the Registration
Rights Agreement, dated as of March 12, 1998, between Doe Run and the Initial
Purchasers as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.
1.77 "Senior Notes" shall mean, individually and collectively, the
Floating Rate Notes and the Fixed Rate Notes.
1.78 "Senior Note Trustee" shall mean State Street Bank and Trust Company,
and its successors and assigns, and any replacement or other trustee under the
Senior Note Indenture.
1.79 "Stores Inventory" shall mean Inventory consisting of cast iron
fittings, paint, belts and hoses, bolts and nuts, wire and wire products,
welding supplies, tools, steel, rope, timber, railroad spikes, railroad car
parts and railroad crane parts, baghouse parts, pump parts, compressor parts,
electrical parts, bearings, drills, bits and accessories and other parts and
supplies.
1.80 "Subsidiary" or "subsidiary" shall mean any corporation, association
or organization, active or inactive, as to which more than fifty (50%) percent
of the outstanding voting stock or shares or interests shall now or hereafter be
owned or controlled, directly or indirectly, by a Borrower, any subsidiary of a
Borrower, or any subsidiary of such subsidiary, provided, that, the term
"Subsidiary" as used elsewhere in this Agreement, as to Doe Run, shall not
include Doe Run Cayman and its Subsidiaries or DR Exploration Company
(Proprietary)
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Ltd. (South Africa), except (a) as otherwise expressly provided in any specific
section of this Agreement, (b) for purposes of Section 5.1(b) hereof, and (c)
for purposes of this definition.
1.81 "Tax Sharing Agreement" shall mean the Tax Sharing Agreement, dated
February 8, 1990, by and among Renco Group and its Subsidiaries (including Doe
Run Cayman and its Subsidiaries for this purpose), as amended on November 1,
1992, which became applicable to DRA and Doe Run on April 7, 1994 and as the
same now exists or may hereafter be further amended, modified, supplemented,
extended, renewed, restated or replaced, provided, that, such agreement shall
not be amended, modified, supplemented, extended, renewed, restated or replaced
without the prior approval of Lender other than for amendments that do not
relate to or affect a Borrower or its Subsidiaries.
1.82 "Tradename" shall have the meaning set forth in Section 6.1 hereof.
1.83 "U.S. Services Agreements" shall mean, collectively, the agreements
listed on Schedule 1.83 hereto between Doe Run and Doe Run Mining or between Doe
Run and Doe Run Peru, or Doe Run and Doe Run Cayman and any of its other
Subsidiaries providing for Doe Run to provide technical, managerial or other
services to Doe Run Cayman or any of its Subsidiaries, as the same now exist or
may hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.
1.84 "Value" or "value" shall mean, as determined by Lender, with respect
to the Inventory, the lower of (a) cost computed on a first-in-first-out basis
in accordance with GAAP or (b) market value, as determined by Lender.
1.85 "Weighted Average Life to Maturity" shall mean, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding principal amount of such Indebtedness into (b) the total of the
product obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment.
1.86 "Wholly-Owned Subsidiary" shall mean any Subsidiary or such person to
the extent all of the Capital Stock or other ownership interests in such
Subsidiary (other than (a) directors' qualifying shares, (b) with respect to Doe
Run Peru, any shares purchased by employees of Doe Run Peru or the seller of
assets to Doe Run Peru on October 23, 1997, which retained amount shall not
exceed one (1%) percent of the total interests in Doe Run Peru, and (c) an
immaterial interest owned by other persons solely to comply with applicable law)
is owned directly or indirectly by such person or a Wholly-Owned Subsidiary of
such person.
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1.87 Terms. All accounting terms used in this Agreement which are not
specifically defined herein shall be construed in accordance with GAAP
consistently applied, except as otherwise stated herein.
1.88 Other Defined Terms The words "hereof", "herein", "hereunder", "this
Agreement" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement, as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.
1.89 Uniform Commercial Code Definitions. All terms used herein which are
not specifically defined herein which are defined or used in the Uniform
Commercial Code as in effect in the State of New York (the "UCC") shall have the
meanings as defined or used in the UCC.
1.90 Interpretation. For purposes of this Agreement, unless the context
otherwise requires, all other terms hereinbefore or hereinafter defined,
including but not limited to those terms defined in the recitals hereto, shall
have the meanings herein assigned to such terms. All references to each Borrower
and other Persons pursuant to the definitions set forth in the recitals hereto
or otherwise herein shall include their respective successors and assigns. All
references to any term in the plural shall include the singular and all
references to any term in the singular shall include the plural.
SECTION 2. CREDIT FACILITY
2.1 Loans
(a) Subject to and upon the terms and conditions contained herein,
at the request of a Borrower, Lender shall make Loans to Borrowers from time to
time in amounts requested by such Borrower, up to the lesser of: (i) the
Borrowing Base or (ii) Maximum Credit.
(b) Notwithstanding anything to the contrary contained herein or in
any of the other Financing Agreements, except in Lender's discretion, (i) the
aggregate unpaid principal amount of the Loans outstanding at any time based on
Eligible Inventory, regardless of the amounts of such Eligible Inventory, shall
not exceed $50,000,000, (ii) the aggregate unpaid principal amount of the Loans
outstanding at any time based on Eligible Stores Inventory, regardless of the
amounts of such Eligible Stores Inventory, shall not exceed $2,500,000, and
(iii) the aggregate unpaid principal amount of the Loans outstanding at any time
based on Eligible Accounts and Eligible Inventory of Fabricated Products,
regardless of the amount of such Eligible Accounts and Eligible Inventory, shall
not exceed $5,000,000.
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(c) Lender may, in its good faith discretion, from time to time,
upon not less than five (5) days prior notice to Doe Run, (i) reduce the Lending
Formula with respect to Eligible Accounts to the extent that Lender determines
that: (A) the dilution with respect to such Accounts for any period (based on
the ratio of (1) the aggregate amount of reductions in such Accounts other than
as a result of payments in cash to (2) the aggregate amount of total sales) has
increased in any respect or may be reasonably anticipated to increase in any
respect above historical levels, or (B) the general creditworthiness of Account
Debtors has declined or (ii) reduce any of the Lending Formulas with respect to
the Eligible Inventory to the extent that Lender determines that: (A) the number
of days of the turnover of such Inventory for any period has changed in any
material respect or (B) the liquidation value of such Eligible Inventory, or any
category thereof, has decreased, or (C) the nature, quality or mix of such
Inventory has deteriorated in any material respect. In determining whether to
reduce any of the Lending Formulas, Lender may consider events, conditions,
contingencies or risks which are also considered in determining Eligible
Accounts, Eligible Inventory or in establishing reserves as provided in Section
2.4. Borrowers may from time to time borrow, repay and reborrow Loans made to it
in accordance with the terms hereof.
2.2 Letter of Credit Accommodations
(a) Subject to and upon the terms and conditions contained herein,
at the request of a Borrower, Lender agrees to provide or arrange for Letter of
Credit Accommodations to be issued for the account of Borrowers containing terms
and conditions acceptable to Lender and the issuer thereof. Any payments made by
Lender to any issuer thereof and/or related parties in connection with the
Letter of Credit Accommodations shall constitute additional Loans pursuant to
this Section 2.
(b) In addition to any customary charges, fees or expenses charged
by any bank or issuer in connection with the Letter of Credit Accommodations,
Borrowers shall pay to Lender a letter of credit fee at a rate equal to one and
one-half (1 1/2%) percent per annum on the daily outstanding balance of the
Letter of Credit Accommodations for the immediately preceding month (or part
thereof), payable in arrears as of the first day of each succeeding month,
except that Lender may require Borrowers to pay to Lender such letter of credit
fee, without notice, at a rate equal to three and one-half (3 1/2%) percent per
annum on such daily outstanding balance for: (i) the period on and after the
date of termination or non-renewal hereof until such time as all Obligations are
indefeasibly paid in full (notwithstanding entry of a judgment against such
Borrower) and (ii) the period from and after the date of the occurrence of an
Event of Default for so long as such Event of Default is continuing, as
determined by Lender. Such letter of credit fee shall be calculated on the basis
of a three hundred sixty (360) day year and actual days elapsed and the
obligation of Borrowers to pay such fee shall survive the termination or
non-renewal of this Agreement. Borrowers shall not be required to pay such
letter of credit fee to Lender in respect of a Letter of Credit Accommodation
unless Lender has duly executed and delivered to
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the issuer of such Letter of Credit Accommodation the application or a guarantee
or indemnification in writing with respect to such Letter of Credit
Accommodation.
(c) No Letter of Credit Accommodations shall be available unless on
the date of the proposed issuance of such Letter of Credit Accommodations, the
Loans available to Borrowers (subject to the Borrowing Base, the Maximum Credit
and any reserves) are equal to or greater than one hundred (100%) percent of the
face amount thereof and all other commitments and obligations made or incurred
by Lender with respect thereto. Effective on the issuance of each Letter of
Credit Accommodation and for so long as such Letter of Credit Accommodation is
outstanding, the amount of Loans which might otherwise be available to Borrowers
shall be reduced by such amount.
(d) Except in Lender's discretion, the aggregate amount of all
outstanding Letter of Credit Accommodations and all other commitments and
obligations made or incurred by Lender in connection therewith shall not at any
time exceed $10,000,000. At any time an Event of Default exists or has occurred
and is continuing, the Lender may require each Borrower to either furnish cash
collateral to secure the reimbursement obligations to the issuer in connection
with any or all Letter of Credit Accommodations or furnish cash collateral to
Lender for the Letter of Credit Accommodations, and in either case, the Loans
otherwise available to Borrowers shall not be reduced as provided in Section
2.2(c) to the extent of such cash collateral.
(e) Each Borrower shall indemnify and hold Lender harmless from and
against any and all losses, claims, damages, liabilities, costs and expenses
which Lender may suffer or incur in connection with any Letter of Credit
Accommodations and any documents, drafts or acceptances relating thereto,
including, but not limited to, any losses, claims, damages, liabilities, costs
and expenses due to any action taken by any issuer or correspondent with respect
to any Letter of Credit Accommodation except resulting from the gross negligence
or wilful misconduct of Lender as determined pursuant to a final non-appealable
order of a court of competent jurisdiction. Each Borrower assumes all risks with
respect to the acts or omissions of the drawer under or beneficiary of any
Letter of Credit Accommodation and for such purposes the drawer or beneficiary
shall be deemed such Borrower's agent. Each Borrower assumes all risks for, and
agrees to pay, all foreign, Federal, State and local taxes, duties and levies
relating to any goods subject to any Letter of Credit Accommodations or any
documents, drafts or acceptances thereunder except resulting from the gross
negligence or wilful misconduct of Lender as determined pursuant to a final
non-appealable order of a court of competent jurisdiction. Each Borrower hereby
releases and holds Lender harmless from and against any acts, waivers, errors,
delays or omissions, whether caused by such Borrower, by any issuer or
correspondent or otherwise with respect to or relating to any Letter of Credit
Accommodation except resulting from the gross negligence or wilful misconduct of
Lender as determined pursuant to a final non-appealable order of a court of
competent jurisdiction. The provisions of this Section 2.2(e) shall survive the
payment of Obligations and the termination or non-renewal of this Agreement.
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(f) Nothing contained herein shall be deemed or construed to grant
Borrowers any right or authority to pledge the credit of Lender in any manner.
Lender shall have no liability of any kind with respect to any Letter of Credit
Accommodation provided by an issuer other than Lender, unless Lender has duly
executed and delivered to such issuer the application or a guarantee or
indemnification in writing with respect to such Letter of Credit Accommodation.
Borrowers shall be bound by any interpretation made in good faith by Lender, or
any other issuer or correspondent under or in connection with any Letter of
Credit Accommodation or any documents, drafts or acceptances thereunder,
notwithstanding that such interpretation may be inconsistent with any
instructions of Borrowers. At any time an Event of Default exists or has
occurred and is continuing, Lender shall have the sole and exclusive right and
authority to, and Borrowers shall not, (i) approve or resolve any questions of
non-compliance of documents, (ii) give any instructions as to acceptance or
rejection of any documents or goods or (iii) execute any and all applications
for steamship or airway guaranties, indemnities or delivery orders. Lender may
take such actions either in its own name or in a Borrower's name. At all times,
Borrowers shall not, without the prior written consent of Lender, grant any
extensions of the maturity of, time of payment for, or time of presentation of,
any drafts, acceptances, or documents or agree to any amendments, renewals,
extensions, modifications, changes or cancellations of any of the terms or
conditions of any of the applications, Letter of Credit Accommodations, or
documents, drafts or acceptances thereunder or any letters of credit included in
the Collateral.
(g) Any rights, remedies, duties or obligations granted or
undertaken by each Borrower to any issuer or correspondent in any application
for any Letter of Credit Accommodation, or any other agreement in favor of any
issuer or correspondent relating to any Letter of Credit Accommodation, shall be
deemed to have been granted or undertaken by such Borrower to Lender. Any
rights, remedies, duties or obligations undertaken by Lender to any issuer or
correspondent in any application for any Letter of Credit Accommodation, or any
other agreement by Lender in favor of any issuer or correspondent relating to
any Letter of Credit Accommodation, shall be deemed to have been granted or
undertaken by the Borrower requesting such Letter of Credit Accommodation to
Lender and to apply in all respects to such Borrower.
2.3. Maximum Credit. Except in Lender's discretion, the aggregate
amount of the Loans and the Letter of Credit Accommodations outstanding at any
time shall not exceed the Maximum Credit.
2.4. Reserves. Without limiting any other rights and remedies of
Lender hereunder or under the other Financing Agreements, all Loans otherwise
available to Borrowers shall be subject to Lender's continuing right in its
discretion, to establish a reserve reducing the amounts of Loans otherwise
available to Borrowers and to increase and decrease such reserve from time to
time, if and to the extent that, in Lender's judgment, such reserve is necessary
to protect Lender against possible non-payment for any reason by Account Debtors
or possible non-payment of any of the Obligations, or in respect of any state of
facts which does or would,
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with notice or passage of time or both, constitute an Event of Default hereunder
or for any other reason.
2.5 Mandatory Prepayments
(a) In the event that the outstanding amount of the Loans to
Borrowers exceed the Borrowing Base, or any component of the Loans exceed the
sublimits set forth in Section 2.1(b), or the aggregate amount of the
outstanding Letter of Credit Accommodations exceed the sublimit for Letter of
Credit Accommodations set forth in Section 2.2(d), or the aggregate amount of
the Loans and the Letter of Credit Accommodations outstanding at any time shall
exceed the Maximum Credit, such event shall not limit, waive or otherwise affect
any rights of Lender in that circumstance or on any future occasions and
Borrowers shall, upon demand by Lender, which may be made at any time or from
time to time, immediately repay to Lender, the entire amount of any such
excess(es) for which payment is demanded.
(b) Subject to Section 9.1(e) hereof, all such payments in respect
of the Loans pursuant to this Section 2.5 shall be without premium or penalty.
All interest accrued on the principal amount of the Loans paid pursuant to this
Section 2.5 shall be paid, or may be charged by Lender to the loan account(s) of
Borrowers, at Lender's option, on the date of such payment.
2.6 Interest.
(a) Interest on all of the Loans and other non-contingent
Obligations shall be payable by Borrowers to Lender at the Interest Rate.
(b) In no event shall the Interest Rate and other charges hereunder
exceed the highest rate permissible under any law which a court of competent
jurisdiction shall, in a final determination, deem applicable hereto. In the
event that a court determines that Lender has received interest and other
charges hereunder in excess of the highest rate applicable hereto, such excess
shall be deemed received on account of, and shall automatically be applied to
reduce, the Obligations other than interest in the inverse order of maturity,
and the provisions hereof shall be deemed amended to provide for the highest
permissible rate.
(c) Subject to the foregoing, all interest charges hereunder or in
connection herewith shall be (i) computed as provided herein and in the other
Financing Agreements and (ii) paid monthly to Lender on the first day of each
calendar month, or, at Lender's option, charged to a Borrower's account(s)
maintained by Lender as of the first day of each calendar month and deemed paid
by the first amounts subsequently credited thereto.
(d) Without limiting the continuing right of Lender to demand
payment of the Loans and other Obligations, or any portion thereof, in
accordance with the terms of this Agreement, or any of the other Financing
Agreements, all interest accruing hereunder on and
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after the date of any Event of Default or termination or non-renewal hereof,
shall be payable on demand.
2.7 Closing Fee. Borrowers shall pay to Lender a closing fee of $500,000,
which fee is fully earned and payable on the date hereof.
2.8 Servicing Fee. Borrowers shall pay monthly to Lender a servicing fee
in an amount equal to $10,000 for each month or part thereof during the term of
this Agreement and for so long thereafter as any of the Obligations are
outstanding, which fee shall be fully earned as of and payable in advance on the
first day of each month.
2.9 Unused Line Fee. Borrowers shall pay to Lender an unused line fee at a
rate equal to one-quarter (1/4%) percent per annum calculated upon the amount
(if any) by which (a) the Maximum Credit exceeds (b) the average aggregate daily
principal balance of the Loans and Letter of Credit Accommodations outstanding
during the immediately preceding month (or part thereof) while this Agreement is
in effect and for so long thereafter as any of the Obligations are outstanding,
which fee shall be payable on the first day of each month in arrears.
2.10 Authorization to Make Loans. Lender is authorized to make the Loans
and provide the Letter of Credit Accommodations based upon telephonic or other
instructions received from anyone purporting to be an officer of a Borrower or
other authorized person or, at the discretion of Lender, if such Loans are
necessary to satisfy any Obligations. All requests for Loans or Letter of Credit
Accommodations hereunder shall specify the date on which the requested Loan is
to be made or Letter of Credit Accommodation established (which day shall be a
Business Day) and the amount of the requested Loan and Letter of Credit
Accommodation. Requests received after 11:00 a.m. New York City time on any day
shall be deemed to have been made as of the opening of business on the
immediately following Business Day. All Loans and Letter of Credit
Accommodations under this Agreement shall be conclusively presumed to have been
made to, and at the request of and for the benefit of, Borrowers when deposited
to the credit of a Borrower or otherwise disbursed or established in accordance
with the instructions of a Borrower or in accordance with the terms and
conditions of this Agreement.
2.11 Use of Proceeds. All Loans made by Lender to or for the account of
Borrowers pursuant to this Agreement and the other Financing Agreements shall be
used by Borrowers for general operating and working capital purposes of
Borrowers and such other purposes as permitted by the terms hereof. In no event
shall any of the proceeds of the Loans be used to repay the existing
Indebtedness of Borrowers or any of their Affiliates to the Existing Lenders.
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2.12 Joint and Several Liability. Borrowers shall be liable for all
amounts due to Lender under this Agreement, regardless of which Borrower
actually receives the Loans or other extensions of credit hereunder or the
amount of such Loans received or the manner in which Lender accounts for such
Loans, Letter of Credit Accommodations or other extensions of credit on its
books and records. The Obligations with respect to Loans made to a Borrower, and
the Obligations arising as a result of the joint and several liability of a
Borrower hereunder, with respect to Loans made to the other Borrower hereunder,
shall be separate and distinct obligations, but all such other Obligations shall
be primary obligations of both Borrowers. The Obligations arising as a result of
the joint and several liability of a Borrower hereunder with respect to Loans,
Letter of Credit Accommodations or other extensions of credit made to the other
Borrower hereunder shall, to the fullest extent permitted by law, be
unconditional irrespective of (a) the validity or enforceability, avoidance or
subordination of the Obligations of the other Borrower or of any promissory note
or other document evidencing all or any part of the Obligations of the other
Borrower, (b) the absence of any attempt to collect the Obligations from the
other Borrower or any other security therefor, or the absence of any other
action to enforce the same, (c) the waiver, consent, extension, forbearance or
granting of any indulgence by Lender with respect to any provisions of any
instrument evidencing the Obligations of the other Borrower, or any part
thereof, or any other agreement now or hereafter executed by the other Borrower
and delivered to Lender, (d) the failure by Lender to take any steps to perfect
and maintain its security interest in, or to preserve its rights and maintain
its security or collateral for the Obligations of the other Borrower, (e) the
election of Lender in any proceeding instituted under the Bankruptcy Code, of
the application of Section 1111(b)(2) of the Bankruptcy Code, (f) any borrowings
or grant or a security interest by the other Borrower, as debtor-in-possession
under Section 364 of the Bankruptcy Code, (g) the disallowance of all or any
portion of the claim(s) of Lender for the repayment of the Obligations of the
other Borrower under Section 502 of the Bankruptcy Code, or (h) any other
circumstances which might constitute a legal or equitable discharge or defense
of a guarantor or of the other Borrower. With respect to the Obligations arising
as a result of the joint and several liability of a Borrower hereunder with
respect to Loans, Letter of Credit Accommodations or other extensions of credit
made to the other Borrower hereunder, each Borrower waives, until the
Obligations shall have been paid in full and this Agreement shall have been
terminated, any right to enforce any right of subrogation or any remedy which
Lender now has or may hereafter have against Borrowers, any endorser or any
guarantor of all or any part of the Obligations, and any benefit of, and any
right to participate in, any security or collateral given to Lender. Upon any
Event of Default, Lender may proceed directly and at once, without notice
(except as otherwise specifically provided for herein), against either Borrower
to collect and recover the full amount, or any portion of the Obligations,
without first proceeding against the other Borrower or any other Person, or
against any security or collateral for the Obligations. Each Borrower consents
and agrees that Lender shall be under no obligation to xxxxxxxx any assets in
favor of Borrower(s) or against or in payment of any or all of the Obligations.
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SECTION 3. CONDITIONS PRECEDENT TO LOANS AND OTHER FINANCIAL ACCOMMODATIONS
3.1 Conditions Precedent to Initial Loans and Letter of Credit
Accommodations. Each of the following is a condition precedent to the initial
Loans and Letter of Credit Accommodations pursuant to this Agreement and the
other Financing Agreements which shall be satisfied in a manner acceptable to
Lender (any of which may be waived, in whole or in part, only by Lender in
writing):
(a) Lender shall have received, in form and substance satisfactory
to Lender, all releases, terminations and such other documents as Lender may
request to evidence and effectuate the termination and release by the Existing
Lenders of Borrowers and Obligors from obligations, liabilities and indebtedness
of each Borrower and Obligors to the Existing Lenders and the termination and
release by each of them of any interest in and to any assets and properties of
each Borrower and Obligors, duly authorized, executed and delivered by it,
including, but not limited to, (i) UCC termination statements for all UCC
financing statements previously filed by any of them, or on their behalf, as
secured party and each Borrower or Obligor, as debtor and (ii) satisfactions and
discharges of any mortgages, deeds of trust or deeds to secure debt by each
Borrower or Obligor in favor of any of the Existing Lenders, in form acceptable
for recording in the appropriate government office;
(b) Lender shall have received, in form and substance satisfactory
to Lender, a consolidated pro-forma balance sheet of Doe Run and its
Subsidiaries (including for this purpose, Doe Run Cayman and its Subsidiaries)
reflecting the initial transactions contemplated hereunder, including, but not
limited to, the transactions contemplated by the Senior Note Agreements,
accompanied by a certificate dated of even date herewith of the chief financial
officer or treasurer of Doe Run acceptable to Lender stating that such pro-forma
balance sheet represents the reasonable, good faith opinion of such officer as
to the subject matter thereof as of October 31, 1997;
(c) Lender shall have received, in form and substance satisfactory
to Lender, evidence that: (i) the Senior Notes, the other Senior Note Agreements
and all agreements, documents and instruments relating thereto have been duly
authorized, executed and delivered by the parties thereto in accordance with
their terms, (ii) Doe Run has received from or on behalf of the holders of the
Senior Notes cash or other immediately available funds in the aggregate amount
of approximately $248,000,000 constituting the proceeds after the underwriters'
commission from the issuance of the Senior Notes, (iii) Doe Run has received
$23,000,000 in cash or other immediately available funds in repayment of the
loan by Doe Run on October 23, 1997 to Doe Run Mining;
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(d) Lender shall have received, in form and substance satisfactory
to Lender, the Banco de Credito Deposit Agreement providing for, inter alia, the
deposit by Doe Run of $125,000,000 with such bank on the date hereof with a
portion of the proceeds from the issuance of the Senior Notes and the agreement
of such bank to pay to Doe Run amounts equal to the obligations of Borrower in
respect of a principal amount of the Fixed Rate Notes equal to $125,000,000,
duly authorized, executed and delivered by Doe Run and such bank;
(e) Lender shall have received, in form and substance satisfactory
to Lender, all other consents, waivers, acknowledgments, releases, terminations
and other agreements and documents from third persons which Lender may deem
necessary or desirable in order to permit, protect and perfect its security
interests in and liens upon the Collateral or to effectuate the provisions or
purposes of this Agreement and the other Financing Agreements;
(f) each Borrower shall have established a lockbox and the Blocked
Accounts for its collections and the transfer thereof to Lender, which shall be
in form and substance satisfactory to Lender, in accordance with Section 8.1
hereof;
(g) Lender shall have received true, correct and complete copies of
each of the following as duly executed by the parties thereto: (i) the Tax
Sharing Agreement, (ii) the Management Agreement, as amended on or about the
date hereof, (iii) all Material Contracts and (iv) the Banco de Credito
Agreements;
(h) Lender shall have received evidence of insurance and loss payee
endorsements required under this Agreement and under the other Financing
Agreements, in form and substance satisfactory to Lender, and certificates of
insurance policies and/or endorsements naming Lender as loss payee, all at
Borrowers' cost and expense;
(i) Lender shall have received evidence, in form and substance
satisfactory to Lender, that Lender has, or will have upon the filing of
appropriate UCC-1 financing statements, a valid perfected first priority
security interest in all of the Collateral;
(j) Lender shall have received and reviewed UCC search results for
all jurisdictions in which assets of Borrowers are located in the United States,
which search results shall be in form and substance satisfactory to Lender;
(k) the aggregate amount of the Excess Availability of Borrowers, as
determined by Lender, as of the date hereof, shall be not less than $35,000,000
after giving effect to the initial Loans made or to be made, and Letter of
Credit Accommodations issued or to be issued in connection with the initial
transactions hereunder;
(l) Lender shall have received, in form and substance satisfactory
to Lender, an opinion letter of counsel to Borrowers with respect to the Senior
Note Agreements, the
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transactions contemplated therein, the Financing Agreements and such other
matters as Lender or its counsel may request;
(m) this Agreement, the other Financing Agreements and all
instruments and documents hereunder and thereunder shall have been duly
authorized, executed and delivered to Lender, in form and substance satisfactory
to Lender.
3.2 Conditions Precedent to All Loans and Letter of Credit
Accommodations. Each of the following is an additional condition precedent to
the Loans and Letter of Credit Accommodations to Borrowers, including the
initial Loans and Letter of Credit Accommodations and any future Loans and
Letter of Credit Accommodations:
(a) all representations and warranties contained herein and in the
other Financing Agreements shall be true and correct in all respects with the
same effect as though such representations and warranties had been made on and
as of the date of the making of each such Loan or providing each such Letter of
Credit Accommodation and after giving effect thereto, except to the extent that
such representation and warranties expressly relate solely to an earlier date
(in which case such representations and warranties shall have been true and
accurate on and as of such earlier date);
(b) no law, regulation, order, judgment or decree of any
Governmental Authority shall, and Lender shall not have received any notice that
any action, suit, investigation, litigation or proceeding is pending or
threatened in any court or before any arbitrator or Governmental Authority which
(i) purports to enjoin, prohibit, restrain or otherwise affect (A) the making of
the Loans or (B) the consummation of the transactions contemplated pursuant to
the terms hereof of the Financing Agreements or (ii) has or could reasonably be
expected to have a Material Adverse Effect; and
(c) no Event of Default and no event or condition which, with notice
or passage of time or both, would constitute an Event of Default, shall exist or
have occurred and be continuing on and as of the date of the making of such Loan
or providing each such Letter of Credit Accommodation and after giving effect
thereto.
SECTION 4. COLLATERAL
As collateral security for the prompt performance, observance and payment
in full of all of the Obligations, each Borrower hereby grants, pledges and
assigns to Lender continuing security interests in and liens upon, and rights of
setoff against, all of the following now owned and hereafter acquired or
existing assets and properties of such Borrower (which assets and properties,
together with all other collateral security for the Obligations granted to or
otherwise held or acquired by Lender are referred to herein as the
"Collateral"):
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4.1 all now owned or hereafter acquired Accounts, together with all of the
following now owned or hereafter acquired assets and properties of such
Borrower, wherever located (collectively, the "Receivables"): (a) chattel paper,
documents, notes and other instruments which evidence or relate to any of the
Accounts or other property described in this Section 4 and including all
documents of title with respect to any Inventory or which evidence or relate to
indebtedness arising pursuant to Accounts or other property described in this
Section 4; (b) all monies, securities, investment property, credit balances and
other property and the proceeds thereof, now or hereafter held or received or
held by, or in transit to, Lender whether for safekeeping, pledge, custody,
transmission, collection or otherwise to the extent constituting proceeds of the
Accounts or other property described in this Section 4; (c) deposits (general or
special) and balances to the extent held in the Blocked Accounts, or any deposit
account (or other account) used in connection with the collection of Receivables
or other property described in this Section 4 or the remittance thereof to
Lender, or containing proceeds of Receivables or other property described in
this Section 4; (d) all present and future liens, security interests, rights,
remedies, title and interest in, to and in respect of Accounts or any of the
other property described in this Section 4, including, without limitation, (i)
rights and remedies under or relating to guaranties, contracts of suretyship,
letters of credit and credit and other insurance related to the Accounts or any
of the other property described in this Section 4, (ii) rights of stoppage in
transit, replevin, repossession, reclamation and other rights and remedies of an
unpaid vendor, lienor or secured party, (iii) rights to goods described in
invoices, documents, contracts or instruments with respect to, or otherwise
representing or evidencing Accounts or other property described in this Section
4, including, without limitation, returned, repossessed and reclaimed goods, and
(iv) deposits by, and property of, Account Debtors or other persons securing the
obligations of Account Debtors, provided, that, for purposes of this Section
4.1, the Collateral shall not include the U.S. Services Agreements listed on
Schedule 1.83 hereto or Accounts arising in the ordinary course of business
payable by Doe Run Mining or Doe Run Peru to Doe Run under the U.S. Services
Agreements listed on Schedule 1.83 hereof;
4.2 all Inventory;
4.3 all now owned or hereafter acquired contracts, contract rights,
licenses, customer lists and other general intangibles relating to the
Receivables and the Inventory, including, without limitation, (a) trademarks,
patents and other intellectual property to the extent affixed to, or to be
affixed to, any Inventory or other property described in this Section 4 for
purposes of selling the same, or otherwise necessary or reasonably desirable in
connection with the collection, sale or other disposition of the Receivables or
any of the other property described in this Section 4), (b) choses in action,
causes of action and other claims and rights relating to the Receivables and
Inventory, including, without limitation, those against Account Debtors, and
against shippers and carriers, (c) agreements or arrangements with sales agents,
distributors or the like and/or consignees, warehouses or other third persons in
possession of any Inventory, (d) the Blocked Accounts, or any deposit account
(or other account) used in connection with the collection of
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Receivables or other property described in this Section 4 or the remittance
thereof to Lender or containing proceeds of Receivables or other property
described in this Section 4, and (e) guaranty or warranty claims with respect to
Receivables or Inventory;
4.4 all monies, securities, investment property, credit balances and other
property and the proceeds thereof, now of herafter held or received or held by,
or in transit to, Lender, whether for safekeeping, pledge, custody,
transmission, collection or otherwise;
4.5 all Records; and
4.6 all products and proceeds of the foregoing, in any form, including,
without limitation, any insurance proceeds and any claims against third persons
for loss or damage to or destruction of any or all of the foregoing.
SECTION 5. REPRESENTATIONS AND WARRANTIESSECTION 5. REPRESENTATIONS AND
WARRANTIES
Each Borrower hereby jointly and severally represents and warrants to
Lender as follows, which representations and warranties are continuing and shall
survive the execution and delivery hereof, and the truth and accuracy of each,
together with the representations and warranties in the other Financing
Agreements, being a continuing condition of each Loan and Letter of Credit
Accommodations:
5.1 Organization and Qualification.
(a) Each Borrower and its Subsidiaries is a duly organized and
validly existing corporation in good standing under the laws of its state or
jurisdiction of incorporation, with perpetual corporate existence, and has the
corporate power and authority to own its properties and to transact the business
in which it is engaged or presently proposes to engage. Each Borrower and its
Subsidiaries has qualified to do business as a foreign corporation in the states
and other jurisdictions listed on Schedule 5.1(a) hereto, which constitute all
states or other jurisdictions where the nature of its business or the ownership
or use of property requires such qualification.
(b) Each Borrower does not have any Subsidiaries as of the date
hereof, except as set forth on Schedule 5.1(b) hereto.
5.2 Corporate Power and Authority. Each Borrower has the corporate power
and authority to borrow and to execute, deliver and carry out the terms and
provisions of this Agreement and the other Financing Agreements and all other
agreements, instruments and documents delivered by such Borrower and its
Subsidiaries pursuant hereto and thereto applicable to it, and each Borrower and
its Subsidiaries has taken or caused to be taken all
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necessary corporate action to authorize the execution, delivery and performance
of this Agreement, the other Financing Agreements and the other agreements
relating hereto or thereto to which it is a party, the present and future
borrowings by such Borrower hereunder and thereunder and the execution, delivery
and performance of the instruments and documents delivered and to be delivered
by it pursuant hereto and thereto. This Agreement and the other Financing
Agreements to which it is a party constitute and will constitute legal, valid
and binding obligations of each Borrower, enforceable in accordance with their
respective terms.
5.3 Issuance of Senior Notes; Disposition of Proceeds.
(a) The Senior Notes have been duly authorized, issued and delivered
by Doe Run and all agreements, documents and instruments related thereto,
including, but not limited to, the Senior Note Indenture, have been duly
authorized, executed and delivered and the transactions contemplated thereunder
performed in accordance with their terms by the respective parties thereto in
all respects, including the fulfillment (not merely the waiver) of all
conditions precedent set forth herein. All actions and proceedings required by
the Senior Note Agreements and the agreements, documents and instruments related
thereto, applicable law or regulation have been taken and the transactions
required thereunder have been duly and validly taken and consummated. Neither
the execution and delivery of the Senior Notes, any of the other Senior Note
Agreements or any of the instruments and documents to be delivered pursuant
thereto, nor the consummation of the transactions therein contemplated, nor
compliance with the provisions therein contemplated, has violated or will
violate any law or regulation or any order or decree of any court or other
Governmental Authority in any respect or does or will conflict with or result in
the breach of, or constitute a default in any respect under, any indenture,
mortgage, deed of trust, agreement or instrument to which each Borrower or its
Subsidiaries (including for this purpose, Doe Run Cayman and its Subsidiaries)
is a party or may be bound, or result in the creation or imposition of any lien,
charge or encumbrance upon any of the property of a Borrower (except as
specifically contemplated hereunder or under the other Financing Agreements) or
violate any provision of the Certificate of Incorporation or By-Laws of a
Borrower.
(b) No court of competent jurisdiction has issued any injunction,
restraining order or other order which prohibits consummation of the issuance of
the Senior Notes and the transactions described therein and no governmental or
other action or proceeding has been threatened or commenced, seeking any
injunction, restraining order or other order which seeks to void or otherwise
modify the issuance of the Senior Notes.
(c) Borrowers have delivered, or caused to be delivered, to Lender
true, correct and complete copies of the Senior Note Agreements. Set forth in
Schedule 5.3 hereto is a correct and complete list of the Senior Note Agreements
and all other agreements, documents and instruments existing as of the date
hereof by Borrowers and their Affiliates in connection therewith.
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(d) Doe Run has deposited with Banco de Credito $125,000,000 of the
proceeds from the issuance of the Senior Notes, and Banco de Credito has made a
loan to Doe Run Mining in the original principal amount of $125,000,000, the
proceeds of which have been used to repay all of the outstanding Indebtedness of
Doe Run Mining to Bankers Trust Company, Union Bank of Switzerland, New York
Branch and DLJ Capital Funding, Inc. (and any successors or assigns of any of
them) and to repay the Indebtedness of Doe Run Mining to Doe Run arising
pursuant to the $23,000,000 loan made by Doe Run to Doe Run Mining on or about
October 23, 1997. Pursuant to the terms of the Banco de Credito Deposit
Agreement, Banco de Credito has agreed to make payments to Doe Run in amounts
equal to the payments of interest on $125,000,000 of the Fixed Rate Notes at the
times that Doe Run is required to make payments of interest under the Fixed Rate
Notes. Doe Run has received on the date hereof not less than $23,000,000 in cash
or other immediately available funds in payment of the loan by Doe Run to Doe
Run Mining in such amount made by Doe Run to Doe Run Mining on or about October
23, 1997.
5.4 Capitalization.
(a) All of the issued and outstanding shares of Capital Stock of
Fabricated Products are directly and beneficially owned and held by Doe Run and
have been duly authorized and are fully paid and non-assessable, free and clear
of all claims, liens, pledges and encumbrances of any kind. All of the issued
and outstanding shares of Capital Stock of Doe Run are directly and beneficially
owned and held by DRA and have been duly authorized and are fully paid and
non-assessable, free and clear of all claims, liens, pledges and encumbrances of
any kind. All of the issued and outstanding shares of Capital Stock of DRA are
directly and beneficially owned and held by Renco Group and have been duly
authorized and are fully paid and non-assessable, free and clear of all claims,
liens, pledges and encumbrances of any kind.
(b) After the creation of the Obligations, the security interests of
Lender and the other transactions contemplated hereunder, each Borrower shall
continue to be able to pay its debts as they mature and has (and has reason to
believe it will continue to have) sufficient capital (and not unreasonably small
capital) to carry on its business and all businesses in which it is about to
engage. The assets and properties of each Borrower at a fair valuation and at
their present fair salable value are, and will be, greater than the Indebtedness
and other liabilities of such Borrower, and including subordinated and
contingent liabilities computed in the amount which, to the best of Borrowers'
knowledge, represents an amount which can reasonably be expected to become an
actual or matured liability. Each Borrower has sufficient capital to carry on
all businesses and transactions in which it now engages or proposes to engage
in, is solvent and will, in the reasonable, good faith determination of such
Borrower as of the date hereof, continue to be solvent after the creation of the
Obligations and the security interests in favor of Lender, and is able to pay
its debts as they mature.
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5.5 Compliance with Other Agreements and Applicable Law.
(a) Each Borrower and its Subsidiaries is not in default under, in
violation of or in contravention of, in any respect, any indenture, mortgage,
deed of trust, deed to secure debt, agreement or instrument to which it is a
party or by which it or any of its assets or properties may be or are bound, in
each case where such default, violation or contravention has or would have a
Material Adverse Effect.
(b) Neither the execution and delivery of this Agreement, the other
Financing Agreements, or any of the instruments and documents to be delivered
pursuant hereto or thereto, nor the consummation of the transactions herein or
therein contemplated, nor compliance with the provisions hereof or thereof, has
violated any law or regulation or any order or decree of any court or
Governmental Authority in any respect or does or will conflict with or result in
the breach of, or constitute a default in any respect under, any indenture,
mortgage, deed of trust, agreement or instrument to which such Borrower or any
of its Subsidiaries is a party or may be bound, which in any case has or would
have a Material Adverse Effect, or result in the creation or imposition of any
lien, charge or encumbrance upon any of the property of such Borrower or any of
its Subsidiaries (except as specifically contemplated hereunder or under the
other Financing Agreements) or violate any provision of the Certificate of
Incorporation or By-Laws of such Borrower or any of its Subsidiaries.
(c) Each Borrower has obtained all material permits, licenses,
approvals, consents, certificates, orders or authorizations of any Governmental
Authority required for the lawful conduct of its business and is in compliance
in all material respects with the requirements of all applicable laws, rules,
regulations and orders of any Governmental Authority (including, but not limited
to, Federal Mine Safety and Health Administration, Federal Office of Surface
Mining and Reclamation, and the Federal Environmental Protection Agency)
relating to its business (including, without limitation, those set forth in or
promulgated pursuant to ERISA, the Occupational Safety and Health Act of 1970,
as amended, the Surface Mining Control and Reclamation Act of 1977, the Mine
Safety and Health Act of 1977, the Fair Labor Standards Act of 1938, as amended,
the Code, and the Environmental Laws). Schedule 5.5 hereto sets forth all
material permits, licenses, approvals, consents, certificates, orders or
authorizations ("Permits") issued or held by each Borrower as of the date hereof
by any federal, state or local Governmental Authority. The Permits constitute
all permits, licenses, approvals, consents, certificates, orders or
authorizations necessary for each Borrower to own and operate its business as
presently conducted or proposed to be conducted where the failure to have such
Permits would have a Material Adverse Effect. Except as described on Schedule
5.5 hereto, all of the Permits are valid and subsisting and in full force and
effect and there are no actions, claims or proceedings pending or threatened
that seek the revocation, cancellation, suspension or modification of any of the
Permits.
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5.6 Governmental Approval. No consent, approval or other action of, or
filing with, or notice to any Governmental Authority is required in connection
with the execution, delivery and performance of this Agreement, the other
Financing Agreements or any of the instruments or documents to be delivered
pursuant hereto or thereto, except for the filing of UCC financing statements.
5.7 Chief Executive Office; Collateral Locations.
(a) The address of the principal place of business and chief
executive office of each Borrower is as set forth on Schedule 5.7 hereto, which
address is the mailing address for such principal place of business and chief
executive office. The books and records relating to the Accounts of each
Borrower are located at such address. The Collateral is located only at the
locations set forth on Schedule 5.7.
(b) Each Borrower may open any new location within the continental
United States provided it (i) gives Lender thirty (30) days prior written notice
of the intended opening of any such new location, except, that, such Borrower
may only give Lender written notice of any intended new location on the same day
it is established, provided, that, (A) no Event of Default, or act, condition or
event which with notice or passage of time or both would constitute an Event of
Default shall exist or have occurred, (B) the value of all of the Collateral
located at all of such new locations shall not exceed $2,500,000 as to Doe Run
or $100,000 as to Fabricated Products, and (C) within fifteen (15) days after
the date of any such notice from such Borrower, Lender shall have received all
agreements, documents and instruments pursuant to Section 5.7(b)(ii) below as
Lender may require, and (ii) executes and delivers, or causes to be executed and
delivered, to Lender such agreements, documents, and instruments consistent with
the other then existing Financing Agreements to the extent applicable or
otherwise as Lender may deem reasonably necessary or desirable to protect its
interests in the Collateral to be located in such location, including, without
limitation, UCC financing statements and agreements from appropriate Persons
acknowledging the liens of Lender on the Collateral to be located in such
location, waiving any lien or claim by such Person to the Collateral and
permitting Lender access to the premises to exercise its rights and remedies and
otherwise deal with the Collateral.
5.8 Priority of Liens/Title to Properties.
(a) The security interests and liens granted to Lender under this
Agreement and the other Financing Agreements constitute valid and perfected
liens and security interests in and upon the Collateral subject only to the
liens indicated on Schedule 5.8 hereto and the liens permitted under Section 6.4
hereof.
(b) Each Borrower and its Subsidiaries has good and marketable title
to all of its properties and assets subject to no liens, mortgages, pledges,
security interests, encumbrances or charges of any kind, except those directly
in favor of or assigned to Lender and such others as are
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specifically permitted under the provisions of this Agreement as listed on
Schedule 5.8 hereto or under Section 6.4 hereof and the other Financing
Agreements. Each Borrower and its Subsidiaries has peaceful and undisturbed
possession of all Real Property and Equipment and such other assets as may be
necessary for its business as presently conducted or proposed to be conducted
and under all leases, licenses and easements necessary for the operation of its
properties and business. None of such leases, licenses and easements contain any
unusual or burdensome provisions which might materially affect or impair the
operations of such properties and business and all such leases, licenses and
easements are valid and subsisting and in full force and effect.
5.9 Tax Returns. Except as set forth on Schedule 5.9, each Borrower and
its Subsidiaries has filed, or caused to be filed all Federal, State, county,
local, foreign and other tax returns, reports and declarations which are
required to be filed by it and as to which an extension has not been granted and
has paid or caused to be paid all taxes shown to be due and payable on said
returns and reports or in any assessment received by it, to the extent that such
taxes have become due and payable, except taxes the validity of which are being
contested in good faith by appropriate proceedings diligently pursued and
available to such Borrower or Subsidiary and with respect to which adequate
reserves have been set aside on its books. Adequate provision has been made for
the payment of all accrued and unpaid Federal, State, county, local, foreign and
other taxes whether or not yet due and payable and whether or not disputed.
5.10 Litigation. Except as set forth on Schedule 5.10 hereto, there is no
present investigation by any Governmental Authority pending or, to the best of
the knowledge of each Borrower, threatened against or affecting such Borrower or
its Subsidiaries or their respective properties or business and there is no
present action, suit, proceeding or claim by any Person pending or, to the best
of the knowledge of each Borrower, threatened against such Borrower or its
Subsidiaries or its or their assets or goodwill, or against or affecting any
transactions contemplated by this Agreement, the other Financing Agreements, or
other instruments, agreements or documents delivered in connection herewith or
therewith, which if adversely determined with respect to it, would have a
Material Adverse Effect.
5.11 Intellectual Property. Each Borrower and its Subsidiaries owns or
licenses all patents, trademarks, service-marks, logos, tradenames, trade
secrets, know-how, copyrights, or licenses and other rights with respect to any
of foregoing, which are necessary for the operation of its business as presently
conducted or proposed to be conducted. No trademark, service-xxxx, logo or
similar item at any time used by a Borrower or its Subsidiaries which is owned
by another person or owned by such Borrower or its Subsidiaries subject to any
security interest, lien, collateral assignment, pledge or other encumbrance in
favor of any person other than Lender is affixed to any Eligible Inventory. To
the best of the knowledge of each Borrower, no product, process, method,
substance, part or other material presently contemplated to be sold by or
employed by such Borrower infringes any patent, trademark, service-xxxx,
tradename, copyright, license or other right owned by any other Person and no
claim or litigation is pending or
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threatened against or affecting either Borrower contesting its right to sell or
use any such product, process, method, substance, part or other material.
5.12 Accounts. Each Eligible Account of a Borrower represents a valid and
legally enforceable indebtedness based upon an actual and bona fide sale and
delivery of goods or rendition of services in the ordinary course of the
business of such Borrower which has been finally accepted by the Account Debtor
and for which the Account Debtor is unconditionally liable to make payment of
the amount stated in each invoice, document or instrument evidencing the
Eligible Account in accordance with the terms thereof, without offset, defense
or counterclaim (except that for sales of By-Products by Doe Run, the amount of
the Account may be subject to adjustment based on the results of the assay (and
final prices and weights) with respect to the By-Products sold giving rise to
such Account). All statements made and all unpaid balances appearing in the
invoices, documents and instruments evidencing each Eligible Account are true
and correct and are in all respects what they purport to be and all signatures
and endorsements that appear thereon are genuine and all signatories and
endorsers have full capacity to contract and each Account Debtor is solvent and
financially able to pay in full the Eligible Account when it matures. None of
the transactions underlying or giving rise to any Account violates any Federal,
State or foreign laws or regulations, and all documents relating to the Accounts
are legally sufficient under such laws or regulations and shall be legally
enforceable in accordance with their terms and all recording, filing and other
requirements of giving public notice under any applicable law have been duly
complied with.
5.13 Employee Benefits.
(a) Each Borrower and its Subsidiaries has not engaged in any
transaction in connection with which such Borrower and its Subsidiaries or any
of its or their ERISA Affiliates, could be subject to either a civil penalty
assessed pursuant to Section 502(i) of ERISA or a tax imposed by Section 4975 of
the Code.
(b) No liability to the Pension Benefit Guaranty Corporation (other
than liability for premiums in the ordinary course of the business of Borrowers)
has been or is expected by either Borrower to be incurred with respect to any
employee pension benefit plan of such Borrower, and its Subsidiaries or any of
its or their ERISA Affiliates. There has been no reportable event (within the
meaning of Section 4043(b) of ERISA) or any other event or condition with
respect to any employee pension benefit plan of either Borrower and its
Subsidiaries or any of its or their ERISA Affiliates which presents a risk of
termination of any such plan by the Pension Benefit Guaranty Corporation.
(c) Full payment has been made of all amounts which each Borrower
and its Subsidiaries or any of its or their ERISA Affiliates is required under
Section 302 of ERISA and Section 412 of the Code to have paid under the terms of
each employee pension benefit plan as contributions to such plan as of the last
day of the most recent fiscal year of such plan ended
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prior to the date hereof, except as set forth on Schedule 5.13 hereto, and no
accumulated funding deficiency (as defined in Section 302 of ERISA and Section
412 of the Code), whether or not waived, exists with respect to any employee
pension benefit plan.
(d) The current value of all vested accrued benefits under all
employee pension benefit plans maintained by each Borrower or its Subsidiaries
that are subject to Title IV of ERISA does not exceed the current value of the
assets of such plans allocable to such vested accrued benefits, except as set
forth on Schedule 5.13 hereto. The terms "current value" and "accrued benefit"
have the meanings specified in Section 4062(b)(1)(A) and Section 3 of ERISA,
respectively.
(e) Except as set forth on Schedule 5.13, neither Borrower and its
Subsidiaries nor any of its or their ERISA Affiliates is or has ever been
obligated to contribute to any "multiemployer plan" (as such term is defined in
Section 4001(a)(3) of ERISA) that is subject to Title IV of ERISA.
5.14 Environmental Compliance.
(a) Except as set forth on Schedule 5.14 hereto, neither Borrower
nor its Subsidiaries have generated, used, stored, treated, transported,
manufactured, handled, produced or disposed of any Hazardous Materials, on or
off its premises (whether or not owned by it) in any manner which at any time
violates any applicable Environmental Law or any license, permit, certificate,
approval or similar authorization thereunder in any material respect and the
operations of each Borrower and its Subsidiaries comply in all material respects
with all Environmental Laws and all licenses, permits, certificates, approvals
and similar authorizations thereunder.
(b) Except as set forth on Schedule 5.14 hereto, there has been no
investigation, proceeding, complaint, order, directive, claim, citation or
notice by any Governmental Authority or any other person nor is any pending or,
to the best of each Borrower's knowledge, threatened, with respect to any
non-compliance with or violation of the requirements of any Environmental Law by
such Borrower or any of its Subsidiaries in any material respect or the release,
spill or discharge, threatened or actual, of any Hazardous Material or the
generation, use, storage, treatment, transportation, manufacturer, handling,
production or disposal of any Hazardous Materials or any other environmental,
health or safety matter, which affects such Borrower or its Subsidiaries or
their businesses, operations or assets or any properties at which such Borrower
or its Subsidiaries transported, stored or disposed of any Hazardous Materials
in any material respect.
(c) Except as set forth on Schedule 5.14 hereto, neither Borrower
nor its Subsidiaries have any material liability (contingent or otherwise) in
connection with a release, spill or discharge, threatened or actual, of any
Hazardous Materials or the generation, use,
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storage, treatment, transportation, manufacture, handling, production or
disposal of any Hazardous Materials.
(d) Except as set forth on Schedule 5.14, each Borrower and its
Subsidiaries has all material licenses, certificates, approvals and other
Permits required to be obtained or filed in connection with the operations of
such Borrower and its Subsidiaries under any Environmental Law and all of such
licenses, permits, certificates, approvals and other Permits are valid and in
full force and effect.
5.15 Bank Accounts. All of the deposit accounts, investment accounts or
other accounts in the name of or used by each Borrower or its Subsidiaries
maintained at any bank or other financial institution are set forth on Schedule
5.15 hereto, subject to the right of each Borrower to establish new accounts in
accordance with Section 6.17 below.
5.16 Investment Company. Each Borrower and its Subsidiaries are not an
"investment company", or an "affiliated person" or "promoter" or "principal
underwriter", as such terms are defined in the Investment Company Act of 1940,
as amended. The making of the Loans by Lender, the application of the proceeds
and the repayment thereof by each Borrower and the performance of the
transactions contemplated herein will not violate any provision of the
Investment Company Act of 1940, as amended, or any rule, regulation or order
issued pursuant thereto.
5.17 Regulation G; Securities Exchange Act of 1934. Neither Borrower owns
any "margin security" as such term is defined in Regulation G, as amended (12
C.F.R. Part 207) of the Board. The proceeds of the borrowings made pursuant to
this Agreement and the other Financing Agreements will be used by each Borrower
only for the purposes contemplated hereunder. None of the proceeds will be used,
directly or indirectly, for the purpose of purchasing or carrying any margin
security or for the purpose of reducing or retiring any Indebtedness which was
originally incurred to purchase or carry any margin security or for any other
purpose which might cause any of the Loans to be considered a "purpose credit"
within the meaning of Regulation G of the Board, as amended. Neither Borrower
will take or permit any agent acting in its behalf to take, any action which
might cause this Agreement or the other Financing Agreements, or instruments
delivered pursuant hereto or thereto, to violate any regulation of the Board or
to violate the Securities Exchange Act of 1934 or any state or other securities
laws, in each case as in effect on the date hereof or as amended hereafter.
5.18 No Material Adverse Change5.18 No Material Adverse Change. There has
been no material adverse change in the business, assets, condition (financial or
otherwise) or results of operations of each Borrower and its Subsidiaries (taken
as a whole) since the date of the most recent financial statements with respect
thereto submitted to Lender or field examination with respect thereto conducted
by Lender.
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5.19 Financial Statements
(a) None of the financial statements, reports and other information
furnished or to be furnished by a Borrower to Lender with respect to such
Borrower and its Subsidiaries contain, as of their respective dates, any untrue
statement of material fact or (taken as a whole) omit to state any material fact
necessary to make the information therein not misleading. Such financial
statements and reports were and will be prepared in accordance with GAAP
consistently applied, and shall fairly present the consolidated and
consolidating financial condition and results of operations of the applicable
Persons, as of the dates and for the periods indicated thereon.
(b) The future cash flow projections for Doe Run and its
Subsidiaries (together with the summaries of assumptions and projected
assumptions, based on historical performance with respect thereto) furnished by
Doe Run to Lender taken as a whole represent the reasonable, good faith opinion
of such Borrower and its management as to the subject matter thereof.
5.20 Disclosure
(a) The information contained in the representations and warranties
of each Borrower set forth in this Agreement, the other Financing Agreements, or
in any other instrument, document, list, certificate, statement, schedule or
exhibit heretofore delivered or to be delivered to Lender, as contemplated in
this Agreement or in the other Financing Agreements, does not contain and will
not contain any untrue statement of a material fact and (taken as a whole) does
not omit and will not omit to state a material fact necessary in order to make
the information contained herein or therein not misleading.
(b) After giving effect to the transactions contemplated by this
Agreement, the other Financing Agreements, and the other instruments or
documents delivered in connection herewith and therewith, there does not exist
and there has not occurred any act, condition or event which constitutes an
Event of Default or which, with notice or passage of time or both would
constitute an Event of Default.
5.21 Labor Disputes.
(a) Set forth on Schedule 5.21 hereto is a list (including dates of
termination) of all collective bargaining or similar agreements between or
applicable to each Borrower or any of its Subsidiaries and any union, labor
organization or other bargaining agent in respect of the employees of such
Borrower and/or any of its Subsidiaries on the date hereof.
(b) Neither Borrower nor any of its Subsidiaries is engaged in any
unfair labor practice that is reasonably likely to have a Material Adverse
Effect. There is (i) no significant unfair labor practice complaint pending
against either Borrower or its Subsidiaries or, to the best
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of each Borrower's knowledge, threatened against either of them, before the
National Labor Relations Board, and no significant grievance or significant
arbitration proceeding arising out of or under any collective bargaining
agreement is pending on the date hereof against either Borrower or any of its
Subsidiaries or, to best of each Borrower's knowledge, threatened against any of
them, (ii) no significant strike, labor dispute, slowdown or stoppage is pending
against either Borrower or any of its Subsidiaries or, to the best of each
Borrower's knowledge, threatened against either Borrower or any of its
Subsidiaries, except (with respect to any matter specified in clause (i) and
(ii) above, either individually or in the aggregate) such as is not reasonably
likely to have a Material Adverse Effect.
5.22 Corporate Name; Prior Transactions. Each Borrower and its
Subsidiaries (including for this purpose Doe Run Cayman and its Subsidiaries)
have not, during the past five years, been known by or used any other corporate
or fictitious name or been a party to any merger or consolidation, or acquired
all or substantially all of the assets of any Person, or acquired any of its
property or assets out of the ordinary course of business, except as set forth
on Schedule 5.22 hereto.
5.23 Restrictions on Subsidiaries. Except for restrictions contained in
any agreement with respect to Indebtedness of either Borrower permitted
hereunder as in effect on the date hereof, there are no contractual or
consensual restrictions on such Borrower or any of its Wholly-Owned Subsidiaries
which prohibit or otherwise restrict (a) the transfer of cash or other assets
(i) between such Borrower and any of its Wholly-Owned Subsidiaries or (ii)
between any Subsidiaries of such Borrower or (b) the ability of such Borrower or
any of its Wholly-Owned Subsidiaries to grant security interests to Lender in
the Collateral.
5.24 Material Contracts. All of the Material Contracts of each Borrower
and its Subsidiaries are set forth on Schedule 5.24 hereto. Each Borrower has
delivered true, correct and complete copies of such Material Contracts to Lender
on or before the date hereof. Neither Borrower nor any of its Subsidiaries is in
breach of or in default under any Material Contract. There has been no breach of
or default under the U.S. Services Agreements.
SECTION 6. ADDITIONAL COVENANTS
In addition to the covenants set forth in the other Financing Agreements,
each Borrower hereby jointly and severally covenants to and agrees with Lender
that Borrowers shall comply with the following covenants, or cause the same to
be complied with, unless Lender shall otherwise consent in writing:
6.1 Tradenames. Some of a Borrower's invoices may from time to time be
rendered to customers under the tradenames listed on Schedule 5.22 hereto
(which, together with any new
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tradenames used after the date hereof are referred to collectively as the
"Tradenames" and individually, as a "Tradename"). As to the Tradenames used by
it, and the related Accounts:
(a) Each Tradename is a tradename (and not an independent
corporation or other legal entity) by which such Borrower may identify and sell
or lease certain of its goods or services and conduct a portion of its business.
(b) All Accounts and proceeds thereof (including any returned
merchandise) which arise from the sale or lease of goods or rendition of
services invoiced under the Tradename shall be owned solely by such Borrower and
shall be subject to the security interests of Lender and other terms of this
Agreement and the other Financing Agreements.
(c) All assignments or confirmatory schedules of Accounts delivered
to Lender by such Borrower, whether in the name of any of the Tradenames or of
such Borrower, shall be executed by such Borrower as owner of such assigned
Accounts, as the case may be.
(d) New Tradenames may be used by a Borrower, but only if (i) Lender
is given at least thirty (30) days prior written notice of the intended use of
any new Tradename and (ii) such supplemental financing statements or similar
instruments as Lender may request shall be executed and delivered to Lender by
such Borrower for filing or recording by Lender prior to the use of such new
Tradename.
6.2 Subsidiaries. Each Borrower shall not form or acquire any Subsidiaries
without the prior written consent of Lender. In the event Lender so consents,
promptly upon such formation or acquisition, (a) such Subsidiary shall be
subject to the terms of this Agreement and bound by the terms and conditions
hereof applicable to the Subsidiaries of a Borrower and (b) each Borrower shall
cause any such Subsidiary to execute and deliver to Lender, in form and
substance satisfactory to Lender and its counsel: (i) an absolute and
unconditional guarantee of payment of any and all present and future Obligations
of Borrowers to Lender containing terms substantially similar to those
guarantees entered into by each Borrower in favor of Lender as of the date
hereof, (ii) a security agreement granting to Lender a first lien (except as
otherwise consented to in writing by Lender) upon the same types and categories
of assets of such Subsidiary as those assets constituting the Collateral
containing terms substantially similar to this Agreement to the extent that
Lender deems appropriate and related Uniform Commercial Code Financing
Statements; provided, that, in the event Lender elects, at its option, not to
include any assets of such Subsidiary in the Borrowing Base or not to make loans
or provide other financial accommodations to or for the benefit of such
Subsidiary, such Subsidiary shall not be required to execute and deliver such a
security agreement, unless (A) the amount of the capital contributions or other
investments by a Borrower in, or loans by a Borrower to, or any other payments
by a Borrower in connection with the acquisition or formation of such
Subsidiary, shall at any time exceed $1,000,000 or (B) a Borrower (1) provides
credit support for, or guarantees any Indebtedness of, such Subsidiary or (2)
is, or agrees to be, directly or indirectly liable for any
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Indebtedness of such Subsidiary or Subsidiary of such Subsidiary or (C) any
default by such Subsidiary in respect of any Indebtedness of such Subsidiary
would permit (upon notice or passage of time or both) any holder of any
Indebtedness of a Borrower or any Obligor to declare a default on such
Indebtedness of such Borrower or Obligor or cause the payment of such
Indebtedness of a Borrower or any Obligor to be accelerated or payable prior to
its final scheduled maturity and (iii) such other agreements, documents and
instruments as Lender may require, including, but not limited to, supplements
and amendments hereto and other loan agreements or instruments evidencing
Indebtedness of such new Subsidiary to Lender.
6.3 Indebtedness. Each Borrower shall not, and shall not permit any
Subsidiary to, create, incur, assume or permit to exist, contingently or
otherwise, any Indebtedness, except:
(a) the Obligations;
(b) Capitalized Lease Obligations and other Indebtedness incurred in
the ordinary course of its business secured only by liens permitted under
Section 6.4(k) hereof;
(c) Indebtedness of Doe Run to the State Environmental Improvement
Authority of Missouri (the "Authority") pursuant to the Installment Sale
Agreement, dated as of December 15, 1973, between the Authority and Doe Run in
connection with the 5 3/4% Pollution Control Revenue Bonds, 1973 Series, due
December 15, 1998, issued by the Authority secured by certain pollution control
equipment located at the Real Property of Doe Run in Herculaneum, Missouri;
provided, that, (i) Doe Run may only make regularly scheduled payments of
principal and interest in respect of such Indebtedness in accordance with the
terms of the agreement or instrument evidencing or giving rise to such
Indebtedness as in effect on the date hereof (except as otherwise permitted
pursuant to Section 6.3(l) below), (ii) Doe Run shall not, directly or
indirectly, (A) amend, modify, alter or change the terms of such Indebtedness or
any agreement, document or instrument related thereto as in effect on the date
hereof, except, that, Doe Run may, after not less than ten (10) Business Days
prior written notice to Lender, amend, modify or change the terms thereof so as
to extend the maturity thereof or defer the timing of any payments in respect
thereof, or to forgive or cancel any portion of such Indebtedness (other than
pursuant to payments thereof), or to reduce the interest rate or any fees in
connection therewith, or to make any covenants contained therein less
restrictive or burdensome as to Doe Run or (B) redeem, retire, defease, purchase
or otherwise acquire such Indebtedness, or set aside or otherwise deposit or
invest any sums for such purpose (except as otherwise permitted pursuant to
Section 6.3(l) below), and (iii) Doe Run shall furnish to Lender all notices or
demands in connection with such Indebtedness either received by it or on its
behalf, promptly after the receipt thereof, or sent by it or on its behalf,
concurrently with the sending thereof, as the case may be;
(d) Indebtedness of Doe Run up to the principal amount of
$255,000,000 consisting of the principal amount of $200,000,000 evidenced by the
Fixed Rate Notes and $55,000,000 evidenced by the Floating Rate Notes, in each
case as reduced by payments of
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principal in respect thereof, plus interest thereon at the rate provided for in
the Senior Notes as in effect on the date hereof; provided, that: (i) Doe Run
shall only make regularly scheduled payments of principal and interest or other
mandatory payments in respect of such Indebtedness in accordance with the terms
of the Senior Notes as in effect on the date of the issuance thereof, except
that Doe Run may prepay, in whole or in part, the Senior Notes as in effect on
the date of the issuance thereof, so long as (A) Doe Run provides Lender with
two (2) Business Days' prior written notice of the intention of Borrower to make
any such prepayment, (B) as of the date of such prepayment and after giving
effect thereto, no Obligations (other than pursuant to Letter of Credit
Accommodations and the costs, expenses and other charges relating thereto) shall
be then outstanding, (C) after giving effect to such prepayment, there shall be
Excess Availability of not less than $10,000,000, and (D) no Event of Default,
exists or has occurred and is continuing, (ii) Doe Run shall not, directly or
indirectly, (A) amend, modify, alter or change the terms of the Senior Note
Agreements or any agreements, documents or instruments executed and/or delivered
in connection therewith as in effect on the original date of the execution and
delivery thereof or (B) redeem, retire, defease, purchase or otherwise deposit
or invest any sums for such purpose, except for (1) prepayments permitted under
Section 6.3(d)(i) above, (2) mandatory repurchases of Senior Notes required in
accordance with the terms of the Senior Note Indebtedness (as in effect on the
date hereof) in connection with (aa) the sales of certain assets of Doe Run and
its Subsidiaries (other than the Collateral) and (bb) changes in control of Doe
Run and (3) the exchange of the Senior Notes consisting of the Series A Fixed
Rate Notes and the Series A Floating Rate Notes for the Series B Fixed Rate
Notes and the Series B Floating Rate Notes, respectively, (iii) Doe Run shall
furnish to Lender copies of all notices, demands or other materials either
received from the Senior Note Trustee or any of the holders of the Senior Notes,
or on its or their behalf, promptly after receipt thereof, or sent by Doe Run or
any of its Affiliates, or on its or their behalf, to the Senior Note Trustee or
any other representative of the holders of the Senior Notes, concurrently with
the sending thereof, as the case may be, and (iv) such Indebtedness is and shall
at all times be unsecured;
(e) Indebtedness of each Borrower or any of its Wholly-Owned
Subsidiaries evidenced by performance bonds, surety bonds or similar guarantees
incurred in the ordinary course of business for purposes of insuring the
performance of such Borrower or Wholly-Owned Subsidiary in an aggregate
principal amount not to exceed at any time outstanding $10,000,000; provided,
that, in the event that the issuer of any such performance bonds, surety bonds
or guarantees has any security interest in, or any other claim or right to any
of the Collateral (whether contingent upon a default by such Borrower or
Subsidiary and/or pursuant to rights of subrogation or otherwise) Lender may, at
its option, either (i) establish a reserve pursuant to Section 2.4 hereof in an
amount equal to the liability of such Borrower or Subsidiary to such issuer as
determined by Lender or (ii) determine that the Receivables and Inventory
related to the bonds or guarantees shall not be Eligible Accounts or Eligible
Inventory;
(f) contingent Indebtedness permitted under Section 6.5 hereof;
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(g) Indebtedness of Doe Run in respect of (i) Interest Rate
Protection Obligations incurred in the ordinary course of business so long as
the same has been approved by Lender and (ii) Hedging Agreements incurred in the
ordinary course of business; provided, that, at no time shall the aggregate
maximum exposure (marked to market) pursuant to such Interest Rate Protection
Obligations and Hedging Agreements exceed $20,000,000;
(h) unsecured Indebtedness of each Borrower to any Subsidiaries
(including for this purpose Doe Run Cayman and its Subsidiaries) arising after
the date hereof pursuant to loans by such Subsidiaries to Borrower, provided,
that, (i) such Indebtedness is subject to, and subordinate in right of payment
to, the right of Lender to receive the prior indefeasible payment and
satisfaction in full of all of the Obligations on terms and conditions
acceptable to Lender (provided that payments shall be permitted in respect of
such Indebtedness to the extent provided in Section 6.3(h)(iii) below), (ii)
Lender shall have received, in form and substance satisfactory to Lender, a
subordination agreement providing for the terms of the subordination in right of
payment of such Indebtedness of such Borrower to the prior indefeasible payment
and satisfaction in full of all of the Obligations, duly authorized, executed
and delivered by such Subsidiaries and such Borrower, (iii) Borrowers shall not,
directly or indirectly make, or be required to make, any payments in respect of
such Indebtedness so long as any of the Obligations are outstanding and unpaid
and this Agreement has not been terminated, except that a Borrower may make
regularly scheduled payments in respect of such Indebtedness in accordance with
the terms of such Indebtedness, to the extent each of the following conditions
is satisfied as determined by Lender: (A) as of the date of any such payment and
after giving effect thereto, no Event of Default, or act, condition or event
which with notice or passage of time or both would constitute an Event of
Default, shall exist or have occurred, (B) as of the date of any such payment
and after giving effect thereto, the daily average of the Excess Availability
for the immediately preceding thirty (30) consecutive day period shall not be
less than $10,000,000, and as of the date of such payment and after giving
effect thereto, Excess Availability shall be not less than $10,000,000, and (C)
Lender shall receive two (2) Business Days prior notice of any such payment,
(iv) Borrowers shall not, directly or indirectly, (A) amend, modify, alter or
change any terms of such Indebtedness or any agreement, document or instrument
related thereto, or (B) redeem, retire, defease, purchase or otherwise acquire
such Indebtedness, or set aside or otherwise deposit or invest any sums for such
purpose, and (v) Borrowers shall furnish to Lender all notices, demands or other
materials in connection with such Indebtedness either received by either
Borrower or on its behalf, promptly after receipt thereof, or sent by either
Borrower or on its behalf, concurrently with the sending thereof, as the case
may be;
(i) unsecured Indebtedness of Subsidiaries of each Borrower to such
Borrower arising after the date hereof pursuant to loans by such Borrower to
such Subsidiaries to the extent such loans by such Borrower are permitted under
Section 6.5 below, provided, that, such Indebtedness shall not be evidenced by
any promissory note or other instrument, unless the original of such note or
other instrument is pledged and delivered to Lender (with such endorsement
thereof as Lender may require);
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(j) Indebtedness of each Borrower existing on the date hereof which
is described on Schedule 6.3 hereto; provided, that: (i) Borrower may only make
regularly scheduled payments of principal and interest as set forth on Schedule
6.3, (ii) Borrowers shall not, directly or indirectly, (A) make any prepayments
or other non-mandatory payments in respect of such Indebtedness (except as
otherwise permitted pursuant to Section 6.3(l) below), or (B) amend, modify,
alter or change the terms of the agreements with respect to such payments or
otherwise, except, that, Borrowers may, after prior written notice to Lender,
amend, modify, alter or change the terms thereof so as to extend the maturity
thereof or defer the timing of any payments in respect thereof, or to forgive or
cancel any portion of such Indebtedness (other than pursuant to payments
thereof), or to reduce the interest rate or any fees in connection therewith, or
to make any covenants contained therein less restrictive or burdensome as to
such Borrower, or (C) redeem, retire, defease, purchase or otherwise acquire
such Indebtedness, or set aside or otherwise deposit or invest any sums for such
purpose (except as otherwise permitted pursuant to Section 6.3(l) below), and
(iii) Borrowers shall furnish to Lender all notices, demands or other materials
in connection with such Indebtedness either received by either Borrower or on
its behalf, promptly after the receipt thereof or sent by either Borrower or on
its behalf concurrently with the sending thereof, as the case may be;
(k) Indebtedness of each Borrower or any of its Subsidiaries,
arising after the date hereof, other than Indebtedness otherwise permitted under
this Section 6.3, provided, that, as to each and all of such Indebtedness: (i)
Lender shall have not received less than ten (10) Business Days prior written
notice of the intention to incur such Indebtedness, which notice shall set forth
in reasonable detail satisfactory to Lender, the amount of such Indebtedness,
whether such Borrower or a Subsidiary of such Borrower is incurring the
Indebtedness, the person to whom such Indebtedness will be owed, the interest
rate, the schedule of repayments and maturity date with respect thereto and such
other information with respect thereto as Lender may request, (ii) Lender shall
have received true, correct and complete copies of all agreements, documents and
instruments evidencing or otherwise related to such Indebtedness, as duly
authorized, executed and delivered by the parties thereto, (iii) such
Indebtedness shall be incurred by such Borrower or Subsidiary at commercially
reasonable rates and terms in an arm's length transaction, (iv) such
Indebtedness shall not at any time include terms and conditions which in any
manner adversely affect Lender or any rights of Lender as determined in good
faith by Lender and confirmed by Lender to such Borrower or Subsidiary in
writing or which are more restrictive or burdensome than the terms or conditions
of any other Indebtedness of such Borrower or Subsidiary as in effect on the
date hereof, (v) as of the date of incurring such Indebtedness and after giving
effect thereto, no Event of Default or act, condition or event which with notice
or passage of time or both would constitute an Event of Default shall exist or
have occurred and be continuing, (vi) in no event shall the aggregate principal
amount of such Indebtedness at any time outstanding exceed $5,000,000, (vii)
such Borrower or Subsidiary may only make regularly scheduled payments of
principal and interest in respect of such Indebtedness (except as otherwise
permitted pursuant to Section 6.3(l) below), (viii) such Borrower or Subsidiary
shall not, directly or
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indirectly, (A) amend, modify, alter or change the terms of the agreements with
respect to such Indebtedness or (B) redeem, retire, defease, purchase or
otherwise acquire such Indebtedness, or set aside or otherwise deposit or invest
any sums for such purpose (except as otherwise permitted pursuant to Section
6.3(l) below), and (ix) such Borrower or Subsidiary shall furnish to Lender all
notices or demands in connection with such Indebtedness either received by such
Borrower or Subsidiary or on its behalf promptly after the receipt thereof, or
sent by such Borrower or Subsidiary or on its behalf, concurrently with the
sending thereof, as the case may be;
(l) Indebtedness issued in exchange for, or the proceeds of which
are used to extend, refinance, replace, substitute or refund Indebtedness
referred to in Sections 6.3(b), 6.3(c), 6.3(e), 6.3(g), 6.3(j) and 6.3(k) hereof
prior to the final maturity thereof (the "Refinancing Indebtedness"); provided,
that, (i) the principal amount of such Refinancing Indebtedness shall not exceed
the principal amount of the Indebtedness so extended, refinanced, replaced,
substituted or refunded (plus the amount of reasonable refinancing fees and
expenses incurred in connection therewith), (ii) the Refinancing Indebtedness
shall have a Weighted Average Life to Maturity and a final maturity equal to or
greater than the Weighted Average Life to Maturity and the final maturity,
respectively, of the Indebtedness being extended, refinanced, replaced,
substituted or refunded, (iii) the Refinancing Indebtedness shall rank in the
right of payment no more senior than, and be at least as subordinated (if
subordinated) to, the Obligations as the Indebtedness being extended,
refinanced, replaced, substituted or refunded, (iv) if the Indebtedness so
extended, refinanced, replaced, substituted or replaced is secured, the
Refinancing Indebtedness may be secured by the same assets that secure the
Indebtedness so extended, refinanced, replaced, substituted or replaced,
provided, that, such security interest with respect to the Refinancing
Indebtedness shall have a priority no more senior than, and be at least as
subordinated (on terms and conditions acceptable to Lender) as the security
interest with respect to the Indebtedness so extended, refinanced, replaced,
substituted or refunded, and (v) the Refinancing Indebtedness shall not include
terms and conditions with respect to a Borrower which are more burdensome or
restrictive than those included in the Indebtedness so extended, refinanced,
replaced, substituted or refunded, (vi) Lender shall have received not less than
ten (10) Business Days prior written notice of the intention to incur such
Indebtedness, which notice shall set forth in reasonable detail satisfactory to
Lender, the amount of such Indebtedness, the person to whom such Indebtedness
will be owed, the interest rate, the schedule of repayments and maturity date
with respect thereto and such other information with respect thereto as Lender
may request, (vii) promptly upon Lender's request, Lender shall have received
true, correct and complete copies of all agreements, documents and instruments
evidencing or otherwise related to such Indebtedness, as duly authorized,
executed and delivered by the parties thereto, (viii) such Indebtedness incurred
by a Borrower or any Subsidiary of such Borrower shall be at rates and with fees
or other charges no higher or greater than the Indebtedness so extended,
refinanced, replaced, substituted or refunded, (ix) as of the date of incurring
such Indebtedness and after giving effect thereto, no Event of Default, or act,
condition or event which with notice or passage of time or both would constitute
an Event of Default, shall exist or have occurred and be continuing, (x) such
Borrower or Subsidiary may only make regularly scheduled payments of
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principal and interest in respect of such Indebtedness (except as otherwise
permitted pursuant to this Section 6.3(l)), (xi) such Borrower or Subsidiary
shall not, directly or indirectly, (A) amend, modify, alter or change the terms
of the agreements with respect to such Indebtedness, except, that, such Borrower
may, after prior written notice to Lender, amend, modify, alter or change the
terms thereof so as to extend the maturity thereof or defer the timing of any
payments in respect thereof, or to forgive or cancel any portion of such
Indebtedness (other than pursuant to payments thereof), or to reduce the
interest rate or any fees in connection therewith, or to make any covenants
contained therein less restrictive or burdensome as to such Borrower or
Subsidiary, and (B) redeem, retire, defease, purchase or otherwise acquire such
Indebtedness, or set aside or otherwise deposit or invest any sums for such
purpose (except as otherwise permitted pursuant to this Section 6.3(l)), and
(xii) such Borrower shall furnish to Lender all notices, demands or other
materials concerning such Indebtedness either received by such Borrower or on
its behalf, promptly after the receipt thereto, or sent by such Borrower on its
behalf, concurrently with the sending thereof, as the case may be.
6.4 Limitation on Liens. Each Borrower shall not, and shall not permit any
Subsidiary to, create or suffer to exist any mortgage, pledge, security
interest, lien, encumbrance, defect in title or restriction upon the use, any of
its assets or properties, whether now owned or hereafter acquired, except:
(a) the security interests in and liens upon the Collateral in favor
of Lender;
(b) mechanics, materialmen, warehousemen and other like statutory
liens arising in the ordinary course of such Borrower's or any of its
Subsidiaries' respective businesses to the extent (i) such liens secure
Indebtedness which is not overdue or (ii) until foreclosure or similar
proceedings shall have been commenced, such liens secure Indebtedness relating
to claims or liabilities which are (A) fully insured and being defended at the
sole cost and expense and the sole risk of the insurer or (B) being contested in
good faith by appropriate proceedings diligently pursued and available to such
Borrower or its Subsidiaries which proceedings have the effect of preventing the
forfeiture or sale of the property or asset subject to such lien and are
adequately escrowed for or reserved against in the judgment of Lender;
(c) liens for taxes not yet due and payable or liens for taxes being
contested in good faith and by appropriate proceedings for which adequate
reserves have been established in accordance with GAAP;
(d) liens (other than any lien imposed by ERISA) incurred on assets
or property other than the Collateral, or deposits of cash made, in each case in
the ordinary course of business, (i) in connection with liability insurance,
workers' compensation, unemployment insurance and other types of social
security, or (ii) to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, contracts, performance and
return-of-money
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bonds and other similar obligations incurred in the ordinary course of business,
in an aggregate amount (in the case of this clause (d)(ii)) not to exceed
$10,000,000 at any time outstanding);
(e) leases or subleases granted to third Persons not interfering
with the ordinary course of business of a Borrower or any of its Subsidiaries;
(f) any attachment or judgment lien arising from a judgment not
giving rise to an Event of Default, or an act, condition or event which with
notice or passage of time or both would constitute an Event of Default so long
as such lien, if encumbering Collateral, has not attached to such Collateral for
more than forty-five (45) days and so long as no enforcement action has
commenced with respect to such Collateral;
(g) easements, rights-of-way, restrictions, encroachments, licenses,
zoning restrictions, and other similar charges or encumbrances, in each case not
interfering in any material respect with the business of a Borrower and its
Subsidiaries;
(h) non-consensual liens which may arise or be created under ERISA
and under Environmental Laws that are being contested in good faith and as to
which adequate reserves have been established to the extent required by GAAP;
provided that, the amount of all of the liabilities secured by all such liens do
not in the aggregate exceed $2,000,000;
(i) liens arising from (i) operating leases and the precautionary
UCC financing statement filings in respect thereof and (ii) equipment borrowed
(but not in connection with, or as part of, the financing thereof) from time to
time in the ordinary course of business and consistent with past practices and
the precautionary UCC financing statement filings in respect thereof;
(j) the security interests in and liens upon the Equipment
consisting of certain pollution control facilities as described in the
Installment Sale Agreement, dated as of December 15, 1973, between the Authority
and Doe Run (as in effect on the date hereof) to secure the Indebtedness of Doe
Run to the Authority permitted under Section 6.3 hereof, which security
interests and liens are, in all respects, senior and prior to the security
interests and liens of Lender in such Equipment;
(k) purchase money mortgages or other purchase money liens or
security interests upon any specific fixed assets hereafter acquired or liens or
security interests existing on any such future fixed assets at the time of
acquisition thereof and including in any event any leases with respect to
Capitalized Lease Obligations; provided, that: (i) no such purchase money lien
or security interest (or lease with respect to Capitalized Lease Obligations, as
the case may be) covering specific future fixed assets or as refinanced shall
extend to or cover any other property other than the specific fixed assets so
acquired, or acquired subject to such lien or security interest (or lease) and
the proceeds thereof, (ii) such lien or security interest only secures the
obligation to pay the purchase price of such specific fixed assets (or the
Capitalized Lease
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Obligations, as the case may be), (iii) the principal amount secured thereby
shall not exceed one hundred (100%) percent of the cost of the fixed assets so
acquired (or leased); and (iv) as of the date of the granting of such mortgage,
lien or security interest and after giving effect thereto, no Event of Default,
or act, condition or event which with notice or passage of time or both would
constitute an Event of Default, shall exist or have occurred and be continuing;
(l) liens on the cash collateral of Doe Run pledged by Doe Run to
Banco de Credito pursuant to the Banco de Credito Deposit Agreement as in effect
on the date hereof in the amount of $125,000,000 from a portion of the proceeds
of the issuance of the Senior Notes, to secure the Indebtedness of Doe Run
Mining to Banco de Credito arising pursuant to the Banco de Credito Agreements
(as in effect on the date hereof), provided, that, (i) Lender shall have
received true, correct and complete copies of the Banco de Credito Agreements
and such other agreements and information with respect thereto as Lender may
request, (ii) in no event shall the total liability of Doe Run for such
Indebtedness of Doe Run Mining to Banco de Credito at any time exceed
$125,000,000, as reduced by any payments of principal in respect of such
Indebtedness, (iii) Doe Run and Doe Run Mining shall not, directly nor
indirectly, amend, modify, alter or change the terms of the Banco de Credito
Deposit Agreement or the Banco de Credito Agreements (except to cancel the
obligations of Doe Run), (iv) the liability of Doe Run in respect of such
Indebtedness of Doe Run Mining to Banco de Credito shall be limited to the cash
collateral pledged by Doe Run to Banco de Credito pursuant to the Banco de
Credito Deposit Agreement and Doe Run shall not have any other or additional
liability to Banco de Credito in connection therewith, and (v) Doe Run shall
furnish to Lender all notices, demands or other materials in connection with the
Banco de Credito Deposit Agreement or the Banco de Credito Agreements either
received by Doe Run or Doe Run Mining, or on its or their behalf, promptly after
the receipt thereof, or sent by Doe Run or Doe Run Mining, or on its or their
behalf, concurrently with the sending thereof, as the case may be;
(m) the liens, encumbrances or security interests listed on Schedule
5.8 hereto, provided, that, such liens, encumbrances or security interests (i)
do not interfere with the use of the property or the ordinary conduct of the
businesses of each Borrower or its Subsidiaries as presently conducted or
proposed to be conducted thereon and (ii) do not impair the value of the
affected property; and
(n) liens on assets of each Borrower or its Subsidiaries (other than
Collateral) not otherwise permitted above, that secure obligations otherwise
permitted hereunder not in excess of $1,000,000 in the aggregate.
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6.5 Loans, Investments, Guarantees, Etc. Each Borrower shall not, and
shall not permit any Subsidiary to, directly or indirectly, make any loans or
advance money or property to any Person, or invest in (by capital contribution,
dividend or otherwise) or purchase or own a futures contract or otherwise become
liable for the purchase and sale of any currency, commodities or raw materials
at a future date in the nature of a futures contract (which for this purpose
shall not include the customary agreements entered into by Doe Run with its
customers for the sale of Inventory in the ordinary course of business
consistent with its current practices as of the date hereof), purchase or
repurchase the Capital Stock or Indebtedness or all or a substantial part of the
assets or property of any Person, or guarantee, assume, endorse, or otherwise
become responsible for (directly or indirectly) the Indebtedness, performance,
obligations or dividends of any Person, or hold any cash or Cash Equivalents, or
agree or commit to do any of the foregoing, except:
(a) the endorsement of instruments for collection or deposit in the
ordinary course of business;
(b) investments in cash or Cash Equivalents so long as no Loans are
outstanding, which shall be pledged and delivered to Lender upon Lender's
request;
(c) capital contributions or other investments by each Borrower in,
or loans by each Borrower to, or any other payments by such Borrower in
connection with the acquisition or formation of, its Wholly-Owned Subsidiaries,
provided, that, (i) as of the date of such capital contribution or other
investments, loans or payments, as the case may be, and after giving effect
thereto, no Event of Default, or act, condition or event which with notice or
passage of time or both would constitute an Event of Default shall exist or have
occurred, (ii) in no event shall the total amount of any capital contributions,
investments, loans or other payments by Borrowers to or in connection with any
such Subsidiaries outstanding at any time exceed $1,000,000 in the aggregate
with respect to all of such Subsidiaries which have not executed and delivered a
security agreement to Lender as described in Section 6.2(b)(ii) or $5,000,000 in
the aggregate with respect to all such Subsidiaries (including both Subsidiaries
which have executed and delivered a security agreement to Lender as described in
Section 6.2(b)(ii) and Subsidiaries which have not executed and delivered a
security agreement to Lender as described in Section 6.2(b)(ii)), in each case
calculated without giving effect to any write-ups, write-downs or write-offs
thereof, but net of dividends or other distributions received by Borrowers from,
or any repayment of any loans or advances made by, the respective Wholly-Owned
Subsidiary after the making of such capital contribution, investment or loan),
(iii) the proceeds of accounts receivable and sales of inventory and goods of
such Subsidiary shall be paid to the Blocked Accounts, and (iv) to the extent
required under Section 6.2 hereof, such Subsidiary has executed and delivered to
Lender such agreements, documents and instruments as are described in Section
6.2 hereof;
(d) loans by Doe Run after the date hereof to Doe Run Cayman or its
Subsidiaries, provided, that, (i) in no event shall the total amount of all such
loans exceed $10,000,000 in the
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aggregate outstanding at any time, (ii) as of the date of each such loan, and
after giving effect thereto, no Event of Default, or act, condition or event
which with notice or passage of time or both would constitute an Event of
Default shall exist or have occurred, (iii) as of the date of each such loan,
and after giving effect thereto, the daily average of the Excess Availability
for the immediately preceding thirty (30) consecutive day period shall be not
less than $10,000,000, and as of the date of such loan and after giving effect
thereto, Excess Availability shall be not less than $10,000,000, (iv) Lender
shall have received not less than three (3) Business Days prior written notice
of the intention of Doe Run to make any such loan, (v) the proceeds of such loan
shall only be used by Doe Run Cayman or its Subsidiaries for working capital in
the ordinary course of business, (vi) Doe Run shall not, directly or indirectly,
amend, modify, alter or change the terms of such loan or any agreement,
documents or instrument related thereto, and (vii) Doe Run shall furnish to
Lender all notices, demands or other materials in connection with such loans
either received by Doe Run or on its behalf, promptly after the receipt thereof,
or sent by Doe Run or on its behalf, concurrently with the sending thereof, as
the case may be;
(e) capital contributions or other investments by Doe Run, in, or
loans by Doe Run to, Doe Run Exploration S.A. (Proprietary) Ltd. (South Africa)
after the date hereof, provided, that, (i) in no event shall the total amount of
all such capital contributions, investments and loans exceed $3,000,000 in any
fiscal year of Doe Run, (ii) as of the date of each such capital contribution,
other investment in or loan to, Doe Run Exploration S.A. (Proprietary) Ltd.
(South Africa), and after giving effect thereto, no Event of Default, or act,
condition or event which with notice or passage of time or both would constitute
an Event of Default shall exist or have occurred, and (iii) as of the date of
each such capital contribution, other investment or loan, and after giving
effect thereto, the daily average of the Excess Availability for the immediately
preceding thirty (30) consecutive day period shall be not less than $10,000,000,
and as of the date of such loan and after giving effect thereto, Excess
Availability shall be not less than $10,000,000;
(f) guarantees by any Wholly-Owned Subsidiary of each Borrower of
the Obligations in favor of Lender;
(g) loans by Subsidiaries of each Borrower to such Borrower or other
Wholly-Owned Subsidiaries of such Borrower after the date hereof to the extent
the Indebtedness of such Borrower to such Subsidiaries or of such Subsidiaries
to other Subsidiaries as a result of such loans is permitted under Section 6.3
hereof;
(h) loans, payments, dividends, investments or distributions of any
kind by Borrower to DRA and Renco Group or by DRA to Renco Group to the extent
permitted under Section 6.7 hereof;
(i) unsecured contingent obligations of each Borrower or any of its
Wholly-Owned Subsidiaries evidenced by guarantees, performance bonds and surety
bonds incurred in
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the ordinary course of business of such Borrower or such Wholly-Owned Subsidiary
to the extent constituting Indebtedness permitted under Section 6.3;
(j) guarantees by each Borrower or any Wholly-Owned Subsidiary of
such Borrower of Indebtedness of such Borrower or Subsidiary permitted under
Section 6.3 hereof and the guarantee by Doe Run of the Indebtedness of Doe Run
Peru arising pursuant to the purchase by Doe Run Peru of the helicopter as
described on Schedule 6.5 hereto;
(k) loans and advances to employees, officers and directors of
Borrowers in an aggregate principal amount not to exceed $500,000 at any time
outstanding;
(l) purchases of raw materials by a Borrower or its Subsidiaries in
the ordinary course of business and consistent with current practices as of the
date hereof (including pursuant to forward purchase agreements so long as
reasonably related to such Borrower's or its respective Subsidiary's anticipated
needs for such raw material in its production process, and so long as such
forward purchase agreements are not speculative in nature and do not extend for
a period longer than twelve (12) months after the date thereof);
(m) investments or other Indebtedness which may be deemed to exist
as a result of Interest Rate Protection Obligations or Hedging Agreements, to
the extent Indebtedness in connection with such arrangements is permitted under
Section 6.3 hereof;
(n) the guarantee by Fabricated Products of the Indebtedness of Doe
Run evidenced by the Senior Notes to the extent such Indebtedness of Doe Run is
permitted under Section 6.3 hereof;
(o) the other existing loans, advances and guarantees by each
Borrower or its Subsidiaries outstanding as of the date hereof as set forth on
Schedule 6.5 hereto not otherwise permitted above; provided, that, as to such
loans, advances and guarantees, (i) such Borrower or its Subsidiary shall not,
directly or indirectly, (A) amend, modify, alter or change the terms of such
loans, advances or guarantees or any agreement, document or instrument related
thereto, or (B) as to such guarantees, redeem, retire, defease, purchase or
otherwise acquire such guarantee or set aside or otherwise deposit or invest any
sums for such purpose and (ii) such Borrower and Subsidiary shall furnish to
Lender all notices, demands or other materials in connection with such loans,
advances or guarantees either received by Borrower or Subsidiary or on its
behalf, promptly after the receipt thereof, or sent by such Borrower or
Subsidiary or on its behalf, concurrently with the sending thereof, as the case
may be.
6.6 Transactions with Affiliates. Each Borrower shall not, and shall not
permit any Subsidiary to, directly or indirectly, purchase, acquire or lease any
property from, or sell, transfer or lease any property to, any shareholder,
officer, director, agent, employee or other Affiliate of either Borrower (and in
any event from or to Renco Group and any Affiliate of Renco Group or
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from or to Doe Run Cayman and any of its Subsidiaries) except (a) in the
ordinary course of and pursuant to the reasonable requirements of such Person's
business, and upon fair and reasonable terms no less favorable to such Borrower
or Subsidiary than such Borrower or Subsidiary would obtain in a comparable
arms'-length transaction with a person who is not an Affiliate (including with
respect to costs, prices and amounts), and (b) payments by Borrower to DRA or
Renco Group to the extent permitted under Section 6.7 hereof.
6.7 Restricted Payments.
(a) Except as set forth in Section 6.7(b) below, each Borrower shall
not, and shall not permit any Subsidiary to, directly or indirectly, (i) declare
or pay any cash dividends or dividends payable in property other than Capital
Stock on account of any shares of any class of Capital Stock of such Borrower
now or hereafter outstanding, or set apart any sums for such purpose, or redeem,
retire, defease, purchase or otherwise acquire any shares of any class of
Capital Stock of such Borrower (or set aside or otherwise deposit or invest any
sums for such purpose) for any consideration other than Capital Stock or apply
or set apart any sums, or make any other distribution (by reduction of capital
or otherwise) in respect of any such shares or agree to do any of the foregoing,
(ii) pay to any shareholder, officer, director, agent, employee or other
Affiliate of a Borrower (and in any event including Renco Group and any
Affiliate of Renco Group) any management, consulting or other fees or any amount
for any management assistance or services rendered by such persons to a
Borrower, or (iii) make any payments in respect of Indebtedness owing to any
shareholder, officer, director or other Affiliate of Borrower (and in any event
including Renco Group and any Affiliate of Renco Group).
(b) Notwithstanding anything to the contrary contained in Section
6.5 or Section 6.7(a) above:
(i) any Subsidiary of a Borrower may declare and pay dividends
to such Borrower or any Wholly-Owned Subsidiary of such Borrower which owns any
equity interests in such Subsidiary;
(ii) any Subsidiary of a Borrower which is not a Wholly-Owned
Subsidiary may declare and pay dividends to its shareholders generally, so long
as such Borrower and/or any other Subsidiary of such Borrower which owns equity
interests in such Subsidiary receives at least its proportionate share (based
upon its respective equity interests) of any dividend so declared paid;
(iii) each Borrower may make payments to Renco Group on behalf
of itself and its Subsidiaries (including for this purpose, Doe Run Cayman and
its Subsidiaries) pursuant to the Tax Sharing Agreement between Borrowers and
their Subsidiaries and Renco Group (as in effect on the date hereof); provided,
that, (A) each Borrower and its Subsidiaries are included in the consolidated
federal income tax return filed by Renco Group as to which such Borrower is
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making such payments, (B) the payments in any year shall not exceed the tax
liability that such Borrower would have been liable for if such Borrower had
filed its tax returns on a stand-alone basis except that such Borrower will not
have the benefit of any of its tax loss carry forwards and any intercompany
items shall, for tax liability purposes, be recorded on a cash basis rather than
on an accrual basis, (C) such payments shall be made by such Borrower no earlier
than ten (10) days prior to the date on which Renco Group is required to make
its payments to the Internal Revenue Service, and (D) in the event that such
Borrower also joins with Renco Group in filing any combined or consolidated (or
similar) state or local income tax returns, then the making of payments to Renco
Group shall be allowed in a manner as similar as possible to that provided
herein with respect to federal income taxes;
(iv) Doe Run may make payments to Renco Group in respect of
the monthly management fee owed by Doe Run to Renco Group under the terms of the
Management Agreement (as in effect on the date hereof); provided, that, (A) the
aggregate amount of all such payments by Doe Run in any month shall not exceed
$200,000, except that in the event Doe Run pays less than $200,000 of such fee
in any month, Doe Run may pay the difference between $200,000 and the amount
actually paid in respect of such fee by Doe Run in such month at any time
thereafter within the same fiscal year and (B) as of the date of each such
monthly payment and after giving effect thereto, no Event of Default, or act,
condition or event which with notice or passage of time or both would constitute
an Event of Default, shall exist or have occurred and be continuing and (C) as
of the date of each such payment and after giving effect thereto, the daily
average of the Excess Availability for the immediately preceding thirty (30)
consecutive day period shall be not less than $1.00, and as of the date of such
payment and after giving effect thereto, Excess Availability shall be not less
than $1.00;
(v) Doe Run may pay dividends on account of any shares of
common stock of Doe Run now outstanding, make any loans or advance money or
property to Renco Group, or make any payments in respect of any Indebtedness
owing by Doe Run to DRA provided, that, in each case as to any of the foregoing,
each of the following conditions is satisfied as determined by Lender:
(A) no Event of Default, or act, condition or event which with
notice or passage of time or both would constitute an Event of Default shall
exist or have occurred and be continuing at the time of or after giving effect
to any such payments;
(B) any dividends or other distributions shall be out of funds
legally available therefor;
(C) as of the date of any such payments and after giving
effect thereto, the aggregate amount of all such payments made in any fiscal
year of Doe Run shall not exceed the amount equal to fifty (50%) percent of the
cumulative Consolidated Net Income of Doe Run (or if cumulative Consolidated Net
Income shall be a loss, minus one hundred (100%) percent of
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such loss) earned subsequent to the date hereof and prior to the date the
payment occurs (treating such period as a single accounting period);
(vi) Doe Run may redeem the shares of preferred stock of Doe
Run held by Renco Group as of the date hereof and pay certain transaction fees
to Renco Group in connection with the issuance of the Senior Notes, in each case
with a portion of the proceeds from the issuance of the Senior Notes; provided,
that, in no event shall the total amount paid by Doe Run to Renco Group to
redeem such shares and to pay such fees exceed $5,000,000 in the aggregate;
(vii) Borrowers may make payments to Renco Group in respect of
premiums and fees for insurance maintained by Renco Group with respect to the
assets and properties of each Borrower and its Subsidiaries and in connection
with the business of each Borrower and its Subsidiaries.
6.8 Changes in Business. Each Borrower and its Subsidiaries shall not
engage in any business other than the businesses of such Borrower and its
Subsidiaries on the date hereof and any businesses reasonably related, ancillary
or complimentary to the businesses in which such Borrower and its Subsidiaries
are engaged on the date hereof.
6.9 Maintenance of Existence. Each Borrower shall, and shall cause each
Subsidiary to, at all times preserve, renew and keep in full force and effect
their corporate existence and rights and franchises with respect thereto and
maintain in full force and effect all licenses, trademarks, tradenames,
approvals, authorizations, leases, contracts and Permits necessary to carry on
the business as presently or proposed to be conducted.
6.10 Consolidated Net Worth. Doe Run shall, at all times, maintain a
Consolidated Net Worth of not less than the amount set forth below for the
period indicated:
=======================================================
Period Amount
------ ------
-------------------------------------------------------
(a) From and including the date $2,500,000
hereof through and
including October 30, 1998
-------------------------------------------------------
(b) From and including October $5,000,000
31, 1998 through and
including April 29, 1999
-------------------------------------------------------
(c) From and including April $10,000,000
30, 1999 to and including
October 30, 1999
-------------------------------------------------------
(d) From and including October 31, $12,500,000
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-------------------------------------------------------
1999 and at all times thereafter
=======================================================
6.11 Sale of Assets, Consolidation, Merger, Dissolution, Etc. Each
Borrower shall not, and shall not permit any Subsidiary to, directly or
indirectly, (a) merge into or with or consolidate with any other Person or
permit any other Person to merge into or with or consolidate with it, or (b)
sell, assign, lease, transfer, abandon or otherwise dispose of any Capital Stock
or Indebtedness to any other Person or any of its properties or assets to any
other Person (except for (i) sales or other dispositions by a Borrower or its
Subsidiaries of assets in the ordinary course of the business of such Borrower
or Subsidiary which consist of Equipment or Real Property; provided, that, as to
each and all such sales, (A) at least eighty (80%) percent of the consideration
received from such sale is in the form of cash or Cash Equivalents, (B) the net
cash proceeds from such sale or other disposition are first used to repay any
Indebtedness secured by the property so sold or otherwise disposed of and any
net cash proceeds thereafter are applied to make an investment, capital
expenditure or other expenditure which is related to the business of such
Borrower as it is conducted on the date hereof and is otherwise permitted
hereunder, within two hundred seventy (270) days of such sale or other
disposition, provided, that, such Borrower shall not be required to make such
investment, capital expenditure or other expenditure with the proceeds of such
sale or other disposition to the extent of such proceeds do not exceed
$5,000,000 in the aggregate, (C) Lender shall have received not less than ten
(10) Business Days prior written notice of such sale, which notice shall set
forth in reasonable detail satisfactory to Lender, the parties to such sale or
other disposition, the assets to be sold or otherwise disposed of, the purchase
price and the manner of payment thereof and such other information with respect
thereto as Lender may reasonably request, and (D) as of the date of such sale or
other disposition and after giving effect thereto, no Event of Default, or act,
condition or event which with notice or passage of time would constitute an
Event of Default shall exist or have occurred, (ii) sales of Inventory in the
ordinary course of business, (iii) the disposition of worn-out or obsolete
Equipment or Equipment no longer used or useful in the business of a Borrower or
its Subsidiaries, and (iv) the sale of a helicopter by Doe Run after the date
hereof as described on Schedule 6.5 hereto), or (c) wind up, liquidate or
dissolve, or (d) agree to do any of the foregoing.
6.12 Compliance with Laws, Regulations, Etc.
(a) Each Borrower shall, and shall cause each Subsidiary to, at all
times comply in all material respects with all applicable provisions of laws,
rules, regulations, licenses, approvals, orders and other Permits and duly
observe all requirements, of any foreign, Federal, State or local Governmental
Authority, including, without limitation, ERISA, the Code, the Occupational
Safety and Health Act of 1970, as amended, the Surface Mining Control and
Reclamation Act of 1977, the Mine Safety Health Act of 1977, the Fair Labor
Standards Act of 1938, as amended, and the rules and regulations thereunder and
all statutes, rules, regulations, orders, permits and stipulations relating to
environmental pollution and employee health and safety, including, without
limitation, all of the Environmental Laws.
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(b) Each Borrower shall, and shall cause each Subsidiary to, take
prompt and appropriate action to respond to any material non-compliance with any
of the Environmental Laws and shall regularly report to Lender with regard to
such response. If a Borrower receives any notice of (i) the happening of any
event involving the use, spill, discharge or clean-up of any Hazardous Material
or (ii) any complaint, order, citation or notice with regard to air emissions,
water discharges, noise emissions or any other environmental, health or safety
matter affecting such Borrower from any Person, including, but not limited to,
the United States Environmental Protection Agency or any state or local
environmental agency or authority, then such Borrower shall give within three
(3) Business Days both oral and written notice of same to Lender if the same has
or could reasonably be expected to have a Material Adverse Effect, or otherwise
ten (10) Business Days written notice of same to Lender. Without limiting the
generality of the foregoing, whenever there is material non-compliance, or any
condition which requires any action by or on behalf of a Borrower in order to
avoid any material non-compliance, with any Environmental Law, such Borrower
shall, at the reasonable request of Lender and such Borrower's expense: (A)
cause an independent environmental engineer reasonably acceptable to Lender to
conduct such tests of the site where such Borrower's material noncompliance or
alleged material non-compliance with Environmental Laws has occurred as to such
material non-compliance and prepare and deliver to Lender a report as to such
material non-compliance setting forth the results of such tests, a proposed plan
for responding to any environmental problems described therein, and an estimate
of the costs thereof and (B) provide to Lender a supplemental report of such
engineer whenever the scope of such material non-compliance, or such Borrower's
response thereto or the estimated costs thereof, shall change in any material
respect.
6.13 Payment of Taxes and Claims. Each Borrower shall, and shall cause
each Subsidiary to, duly pay and discharge all taxes, assessments, contributions
and governmental charges upon or against it or them or its or their properties
or assets, except for taxes the validity of which are being contested in good
faith by appropriate proceedings diligently pursued and available to such
Borrower or Subsidiary prior to the date on which penalties attach thereto.
Borrowers shall be liable for any tax or penalty imposed upon any transaction
under this Agreement or any of the other Financing Agreements or giving rise to
the Accounts or any other Collateral or which Lender may be required to withhold
or pay for any reason, and each Borrower agrees to indemnify and hold Lender
harmless with respect thereto, and to repay to Lender on demand the amount
thereof, and until paid by Borrowers such amount shall be added and deemed part
of the Loans, provided, that, nothing contained herein shall be construed to
require Borrowers to pay any income tax attributable to the income of Lender
from any amounts charged or paid hereunder to Lender.
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6.14 Properties in Good Condition.
(a) Each Borrower shall keep its properties, and shall cause each
Subsidiary to keep its properties, in good repair, working order and condition
(reasonable wear and tear excepted) and, from time to time, make and cause each
Subsidiary to make all needful and proper repairs, renewals, replacements,
additions and improvements thereto, so that the business carried on may be
properly and advantageously conducted at all times in accordance with prudent
business management. The Inventory shall only be used in each Borrower's
business and not for personal, family, household or farming use.
(b) All of the Inventory of each Borrower is and will be held for
sale or lease, or to be furnished in connection with the rendition of services,
in the ordinary course of such Borrower's business, and is and will be fit for
such purposes. Each Borrower shall keep the Inventory of such Borrower in good
and marketable condition, at its own expense. Each Borrower will not acquire or
accept any Inventory on consignment or approval, except if such Inventory is at
all times clearly identified on the books and records of such Borrower as
Inventory held on consignment or approval and such Inventory is separately
reported to Lender and not included in the Inventory of such Borrower as
reported to Lender in a manner satisfactory to Lender. Each Borrower agrees that
all Inventory will be mined and produced in accordance with all applicable laws,
including the Surface Mining Control and Reclamation Act of 1977, the Mine
Safety and Health Act of 1977, the Federal Fair Labor Standards Act of 1938, as
amended, and all rules, regulations, and orders thereunder. Each Borrower shall
conduct a physical count of the Inventory at least once per fiscal year, and at
any time on or after an Event of Default and so long as the same is continuing,
at such other times as Lender reasonably requests, and in each case shall
promptly supply Lender with a copy of such count accompanied by a report of the
Value of such Inventory. Borrowers shall not, without Lender's prior written
consent, sell any Inventory on a xxxx-and-hold (except if reported to Lender as
xxxx-and-hold goods), guaranteed sale, sale and return, sale on approval, or
other repurchase or return basis.
6.15 Insurance. Borrowers shall at all times maintain with financially
sound and reputable insurers, insurance with respect to the Collateral against
loss or damage of the kind and in the amounts customarily insured against by
corporations of established reputation engaged in the same or similar businesses
and similarly situated and Borrowers shall maintain public liability insurance
against claims for personal injury, death or property damage occurring upon, in,
about or in connection with the use of any properties owned, occupied or
controlled by Borrowers and occurring in connection with the use (or otherwise)
of any products manufactured or sold by Borrowers, and workmen's compensation
insurance (except as to workmen's compensation insurance to the extent a
Borrower is self-insured with respect thereto). Said policies of insurance shall
be satisfactory to Lender as to form, amount and insurer. Borrowers shall
furnish certificates, policies or endorsements to Lender as proof of such
insurance, and, if a Borrower fails to do so, Lender is authorized, but not
required, to obtain such insurance at the expense of Borrowers. All policies
shall provide for at least thirty (30) days prior written notice
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to Lender of any cancellation or reduction of coverage and that Lender may act
as attorney for each Borrower in obtaining, and at any time on or after the
occurrence of an Event of Default, adjusting, settling and amending such
insurance. Borrowers shall obtain non-contributory lender's loss payable
endorsements to all insurance policies with respect to the Collateral in form
and substance reasonably satisfactory to Lender specifying that the proceeds of
such insurance shall be payable to Lender as its interests may appear and
further specifying that Lender shall be paid regardless of any act or omission
by Borrowers. At its option, Lender may apply any insurance proceeds with
respect to the Collateral received by Lender at any time to the cost of
replacement of Collateral and/or to payment of the Obligations, whether or not
then due, in any order and in such manner as Lender may determine or Lender may
hold such insurance proceeds as cash collateral for the Obligations as Lender
may determine.
6.16 Compliance with ERISA.
(a) Borrowers shall not with respect to all "employee pension
benefit plans" maintained by a Borrower or any of its ERISA Affiliates: (i)
terminate any of such employee pension benefit plans so as to incur any
liability to the Pension Benefit Guaranty Corporation established pursuant to
ERISA, (ii) allow or suffer to exist any prohibited transaction involving any of
such employee pension benefit plans or any trust created thereunder which would
subject Borrower or such ERISA Affiliate to a tax or penalty or other liability
on prohibited transactions imposed under Section 4975 of the Code or ERISA,
(iii) fail to pay to any such employee pension benefit plan any contribution
which it is obligated to pay under Section 302 of ERISA, Section 412 of the Code
or the terms of such plan, (iv) allow or suffer to exist any accumulated funding
deficiency, whether or not waived, with respect to any such employee pension
benefit plan, (v) allow or suffer to exist any occurrence of a reportable event
or any other event or condition which presents a material risk of termination by
the Pension Benefit Guaranty Corporation of any such employee pension benefit
plan that is a single employer plan, which termination could result in any
liability to the Pension Benefit Guaranty Corporation or (vi) incur any
withdrawal liability with respect to any multiemployer pension plan, except as
set forth on Schedule 5.13 hereto.
(b) As used in this Section 6.16, the term "employee pension benefit
plans," "employee benefit plans", "accumulated funding deficiency" and
"reportable event" shall have the respective meanings assigned to them in ERISA,
and the term "prohibited transaction" shall have the meaning assigned to it in
Section 4975 of the Code and ERISA.
6.17 Additional Bank Accounts. Each Borrower shall not, and shall not
permit any Subsidiary to, directly or indirectly, open, establish or maintain
any deposit account, investment account or any other account with any bank or
other financial institution, other than the Blocked Accounts and the accounts
set forth in Schedule 5.15 hereto, except: (a) as to any new or additional
Blocked Accounts and other such new or additional accounts which contain any
Collateral or proceeds thereof, with the prior written consent of Lender and
subject to such
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conditions thereto as Lender may establish and (b) as to any accounts used by
such Borrower or its Subsidiaries to make payments of payroll, taxes or other
obligations to third parties, after prior written notice to Lender.
6.18 Notice of Default. Promptly upon becoming aware of the existence of
any condition or event which constitutes an Event of Default or any condition or
event which, with the passage of time or notice or both would constitute such an
Event of Default, pursuant to the provisions of this Agreement or the other
Financing Agreements, Borrowers shall give Lender written notice thereof
specifying the nature of such condition or event.
6.19 Financial Statements and Other Information.
(a) Each Borrower shall promptly furnish to Lender all such
financial and other information as Lender shall reasonably request relating to
the Collateral and the assets, businesses and operations of Borrowers and their
Subsidiaries, and notify the auditors and accountants of Borrowers that Lender
is authorized to obtain such information directly from them. Without limiting
the foregoing, Borrowers shall furnish to Lender, in such detail as Lender shall
request, the following:
(i) As soon as available, but in any event not later than
ninety (90) days after the close of each fiscal year, audited consolidated
balance sheet, consolidated statement of operations and consolidated statement
of cash flows for Doe Run and its Subsidiaries (including for this purpose, Doe
Run Cayman and its Subsidiaries) for such fiscal year, and the accompanying
notes thereto, and unaudited consolidating balance sheets, statements of
operations and statements of cash flows for Doe Run and its Subsidiaries
(including for this purpose, Doe Run Cayman and its Subsidiaries) for such
fiscal year, and the accompanying notes thereto, setting forth in each case in
comparative form figures for the previous fiscal year, all in reasonable detail,
fairly presenting the financial position and the results of operations of Doe
Run and its Subsidiaries (including for this purpose, Doe Run Cayman and its
Subsidiaries) as at the date thereof and for the fiscal year then ended, and
prepared in accordance with GAAP consistently applied. Such audited consolidated
statements of Doe Run and its Subsidiaries shall be examined in accordance with
generally accepted auditing standards by and accompanied by a report thereon
unqualified as to scope of independent certified public accountants selected by
Doe Run and satisfactory to Lender.
(ii) As soon as available, but in any event not later than
forty-five (45) days after the close of each fiscal quarter other than the
fourth quarter of a fiscal year, consolidated and consolidating unaudited
balance sheets of Doe Run and its Subsidiaries (including for this purpose, Doe
Run Cayman and its Subsidiaries) as at the end of such quarter, and consolidated
and consolidating unaudited statements of operations and statements of cash flow
for Doe Run and its Subsidiaries (including for this purpose, Doe Run Cayman and
its Subsidiaries) for such quarter and for the period from the beginning of the
fiscal year to the end of such quarter,
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together with the accompanying notes thereto, all in reasonable detail, fairly
presenting the financial position and results of operation of Doe Run and its
Subsidiaries (including for this purpose, Doe Run Cayman and its Subsidiaries)
as at the date thereof and for such periods, prepared in accordance with GAAP
consistently applied (subject to normal year-end adjustments). Such statements
shall be certified to be correct by the chief financial officer of Doe Run,
subject to normal year-end adjustments.
(iii) As soon as available, but in any event not later than
thirty (30) days after the end of each month, consolidated and consolidating
unaudited balance sheets of Doe Run and its Subsidiaries (including for this
purpose, Doe Run Cayman and its Subsidiaries) as at the end of such month, and
consolidated and consolidating unaudited statements of operations for Doe Run
and its Subsidiaries (including for this purpose, Doe Run Cayman and its
Subsidiaries) for such month and for the period from the beginning of the fiscal
year to the end of such month, all in reasonable detail, fairly presenting the
financial position and results of operation of Doe Run and its Subsidiaries
(including for this purpose, Doe Run Cayman and its Subsidiaries) as at the date
thereof and for such periods, and prepared in accordance with GAAP consistently
applied (except that such interim financial statements shall not include
accompanying notes and shall be subject to normal year-end adjustments). Such
statements shall be certified to be correct by the chief financial officer of
Doe Run, subject to normal year-end adjustments.
(iv) With each of the audited financial statements delivered
pursuant to Section 6.19 above, a certificate of the independent certified
public accountants that examined such statements to the effect that they have
reviewed and are familiar with the Financing Agreements and that, in examining
such financial statements, they did not become aware of any fact or condition
which then constituted an Event of Default, except for those, if any, described
in reasonable detail in such certificate.
(v) Simultaneously with the delivery of each of the annual
audited and quarterly unaudited financial statements as set forth herein, Lender
shall receive a certificate of the chief financial officer of Doe Run (A)
stating that, except as explained in reasonable detail in such certificate, (1)
all of the representations, warranties and covenants of Borrowers contained in
this Agreement and the other Financing Agreements are correct and complete as at
the date of such certificate and (2) no Event of Default then exists or existed
during the period covered by such financial statements, and (B) describing and
analyzing in reasonable detail all material trends, changes and developments in
each and all financial statements. If such certificate discloses that a
representation or warranty is not correct or complete, or that a covenant has
not been complied with, or that an Event of Default existed or exists, such
certificate shall set forth what action Borrowers have taken or propose to take
with respect thereto.
(vi) No sooner than ninety (90) days prior to, and no less
than, fifteen (15) days after the beginning of each fiscal year of Doe Run,
projected balance sheets, statements of income and expense, and statements of
cash flow for Doe Run and its Subsidiaries (including for
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this purpose, Doe Run Cayman and its Subsidiaries) as at the end of and for each
month of such fiscal year.
(vii) Promptly after delivery thereof, copies of any
management letters and reports by such independent certified public accountants
to a Borrower and its Subsidiaries (including for this purpose, Doe Run Cayman
and its Subsidiaries).
(viii) Monthly accounts receivable agings and inventory
reports (including, without limitation, Inventory consisting of work-in-process)
and such schedules of Accounts and Inventory, together with any further
financial and other information regarding the Collateral, as Lender may request
from time to time.
(ix) Subject to the terms and conditions contained herein,
except as Lender may otherwise agree, Borrowers shall deliver to Lender a
Borrowing Base Certificate setting forth a calculation of the Loans and Letter
of Credit Accommodations available to Borrowers pursuant to the terms and
conditions contained herein, duly completed and executed by the chief financial
officer or other appropriate financial officer acceptable to Lender, together
with all schedules required pursuant to the terms of the Borrowing Base
Certificate duly completed.
(A) Commencing on the date hereof, and for so long as for any
four (4) consecutive week period (1) the average of the daily principal balance
of the outstanding Loans and Letter of Credit Accommodations for such four (4)
week period is less than $5,000,000 and (2) the average of the Excess
Availability for such four (4) week period (calculated based on the Excess
Availability at the end of each day) is greater than $10,000,000, then Borrowers
shall deliver such Borrowing Base Certificate to Lender on a monthly basis, by
no later than the tenth (10th) day of each month, calculating Loans and Letter
of Credit Accommodations available as of the last day of the immediately
preceding month.
(B) If at any time for any one (1) week either (1) the average
of the daily principal balance of the outstanding Loans and Letter of Credit
Accommodations for such week is greater than $20,000,000 (calculated based on
the outstanding amounts at the end of each day) or (2) the average of the Excess
Availability for such week is less than $10,000,000 (calculated based on the
Excess Availability at the end of each day), then Borrowers shall thereafter
deliver such Borrowing Base Certificate to Lender on a daily basis calculating
Loans and Letter of Credit Accommodations available as of the close of business
on the immediately preceding day.
(C) If at any time for any one (1) week both (1) the average
of the daily principal balance of the outstanding Loans and Letter of Credit
Accommodations for such week is greater than $10,000,000 but equal to or less
than $20,000,000 (calculated based on the outstanding amounts at the end of each
day) and (2) the average of the Excess Availability for such week (calculated
based on the Excess Availability at the end of each day) is greater than
$10,000,000, then Borrowers shall thereafter deliver such Borrowing Base
Certificate to Lender
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on a weekly basis calculating Loans and Letters of Credit Accommodations
available as of the last Business Day of the immediately preceding week.
(D) If at any time for any two consecutive two (2) weeks, both
(1) the average of the daily principal balance of the outstanding Loans and
Letter of Credit Accommodations for such two (2) week period is equal to or
greater than $5,000,000 but less than $10,000,000 (calculated based on the
outstanding amounts at the end of each day) and (2) the average of the Excess
Availability for such two (2) week period (calculated based on the Excess
Availability at the end of each day) is greater than $10,000,000, then Borrowers
shall thereafter deliver such Borrowing Base Certificate to Lender every two (2)
weeks calculating Loans and Letter of Credit Accommodations available as of the
last Business Day of the immediately preceding week.
(E) Notwithstanding anything to the contrary contained herein,
without limiting any other rights of Lender, upon Lender's request, Borrowers
shall provide Lender on a daily basis with a schedule of Accounts, collections
received and credits issued and on a daily basis with an inventory report in the
event that at any time either: (1) an Event of Default or act, condition or
event which with notice or passage of time or both would constitute an Event of
Default, shall exist or have occurred, or (2) Borrower shall have failed to
deliver any Borrowing Base Certificate in accordance with the terms hereof, or
(3) upon Lender's good faith belief, any information contained in any Borrowing
Base Certificate is incomplete, inaccurate or misleading.
(F) Nothing contained in any Borrowing Base Certificate shall
be deemed to limit, impair or otherwise affect the rights of Lender contained
herein and in the event of any conflict or inconsistency between the calculation
of the Loans and Letter of Credit Accommodations available to Borrowers as set
forth in any Borrowing Base Certificate and as determined by Lender, the
determination of Lender shall govern and be conclusive and binding upon
Borrowers. Without limiting the foregoing, Borrowers shall furnish to Lender any
information which Lender may reasonably request regarding the determination and
calculation of any of the amounts set forth in the Borrowing Base Certificate.
(G) Borrowers shall promptly notify Lender in writing in the
event that at any time after the delivery of a Borrowing Base Certificate to
Lender but prior to the delivery of the next Borrowing Base Certificate to be
delivered by Borrowers to Lender in accordance with the terms hereof: (1) the
amount of Loans and Letter of Credit Accommodations available to Borrowers
pursuant to the terms and conditions contained herein is less than eighty (80%)
percent of the amount of Loans and Letter of Credit Accommodations available to
Borrowers pursuant to the terms and conditions contained herein reflected in the
most recent Borrowing Base Certificate delivered by Borrowers to Lender pursuant
to Section 6.19 hereof, or (2) the Loans made by Lender to Borrowers and/or
Letter of Credit Accommodations outstanding at such time exceed the amount of
the Loans and Letter of Credit Accommodations then available to Borrowers under
the terms hereof as a result of any decrease in the amount of Loans and Letter
of Credit Accommodations then available and the amount of such excess.
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(H) If any of Borrowers' records or reports of the Collateral
are prepared or maintained by an accounting service, contractor, shipper or
other agent, Borrowers hereby irrevocably authorize such service, contractor,
shipper or agent to deliver such records, reports and related documents to
Lender and to follow Lender's instructions with respect to further services at
any time that an Event of Default exists or has occurred and is continuing.
(x) Promptly and in any event after becoming aware of the
occurrence of any of the following events: (A) any Material Contract of a
Borrower or any of its Subsidiaries is terminated or any new Material Contract
is entered into (in which event such Borrower shall provide Lender with a copy
of such Material Contract); or (B) any of the material terms (other than price)
upon which material suppliers of Borrower or any of its Subsidiaries do business
with such Borrower or Subsidiary are changed or amended in any manner adverse to
such Borrower or Subsidiary in any material respect; or (C) any order, judgment
or decree shall have been entered against Doe Run in excess of $2,500,000 or
against Fabricated Products in excess of $100,000 (in each case after reasonably
expected insurance and indemnity recovery) or any of their respective properties
or assets; or (D) any notification of violation of any law or regulation shall
have been received by a Borrower or any of its Subsidiaries from any
Governmental Authority the results of which are reasonably likely to have a
Material Adverse Effect.
(b) Each Borrower shall promptly notify Lender in writing of any
loss, damage, investigation, action, suit, proceeding or claim relating to the
Collateral or which might result in any material adverse change in its business,
properties, assets, goodwill or condition, financial or otherwise.
(c) Each Borrower shall promptly provide Lender such budgets,
forecasts, projections and other information respecting the business operations
and financial or other condition of such Borrower and its Subsidiaries, as
Lender may, from time to time, reasonably request.
(d) Lender is hereby authorized to deliver a copy of any financial
statement or any other information relating to the business, operations or
financial condition of Doe Run or its Subsidiaries (including for this purpose,
Doe Run Cayman and its Subsidiaries), which may be furnished to it hereunder or
otherwise, to any regulatory body or agency or other Governmental Authority
having jurisdiction over Lender or upon notice to Doe Run (to the extent
permitted under applicable law), to any court or to any other Person which
shall, or shall have any right or obligation to, succeed to all or any part of
Lender's interests in any of the Loans, this Agreement, the other Financing
Agreements or the Collateral, including, without limitation, any assignee or any
Participant (subject to Section 9.7 hereof).
(e) Each Borrower hereby irrevocably authorizes and directs all
accountants, auditors or other third parties to deliver to Lender upon Lender's
reasonable request, at such
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Borrower's expense, copies of the financial statements, and other accounting
records relating to Doe Run and its Subsidiaries of any nature in their
possession.
6.20 Limitation of Voluntary Payments; Preferred Stock; Amendments or
Modifications of Certain Agreements; etc. Each Borrower shall not, and shall not
permit any Subsidiary to: (a) with respect to any Indebtedness make (or give any
notice in respect of) any voluntary or optional redemption of or acquisition for
value of (including, without limitation, by way of depositing with the trustee
with respect thereto money or securities before due for the purpose of paying
when due), exchange, or purchase, redeem or acquire for value (whether as a
result of a Change of Control, the consummation of assets sales or otherwise);
(b) with respect to each Borrower, issue any preferred or preference stock which
is mandatorily redeemable prior to the then current term of this Agreement and
with respect its Subsidiaries, issue any preferred or preference stock; or (c)
amend, modify or terminate, or permit the amendment, modification or termination
of any of (i) the Tax Sharing Agreement, (ii) the Management Agreement, (iii)
the Banco de Credito Deposit Agreement, or (iv) the Banco de Credito Agreements.
6.21 Limitation on Restrictions Affecting Subsidiaries. Each Borrower
shall not, and shall not permit any Subsidiary (including Doe Run Cayman and its
Subsidiaries for this purpose) to, directly, or indirectly, create or otherwise
cause or suffer to exist any encumbrance or restriction which prohibits or
limits the ability of any such Subsidiary of a Borrower to (a) pay dividends or
make other distributions on its Capital Stock or any other interest or
participation in, or measured by, its profits, owned by Borrower or any
Subsidiary of such Borrower, or pay any Indebtedness owed to a Borrower or any
Subsidiary of such Borrower; (b) make loans or advances to a Borrower or any
Subsidiary of such Borrower; or (c) transfer any of its properties or assets to
a Borrower or any Subsidiary of such Borrower; except in each case for such
encumbrances or restrictions existing under or by reason of: (i) applicable law,
(ii) this Agreement or the Senior Note Indenture, (iii) customary non-assignment
provisions of any lease governing a leasehold interest of a Borrower or its
Subsidiaries, (iv) any instruments governing Indebtedness of a Person acquired
by a Borrower or its Subsidiaries at the time of such acquisition, which
encumbrance or restriction is not applicable to any Person, or the properties or
assets of any Person, other than the Person or its Subsidiaries so acquired, (v)
any written agreement existing on the date hereof or amendments or modifications
thereto, provided, that, no such agreement shall be modified or amended in such
a manner as to make the encumbrance or restriction more restrictive than as in
effect on the date hereof, (vi) Indebtedness under one or more working capital
facilities or other working capital or lease financings or programs entered into
by Doe Run Peru and its Subsidiaries from time to time or any refinancings,
refundings, replacements or extensions thereof, provided, that, such
restrictions do not prohibit payments pursuant to the U.S. Service Agreements or
any other intercompany agreements between Doe Run and Doe Run Cayman and its
Subsidiaries (including, without limitation, Doe Run Mining and Doe Run Peru),
or pursuant to any replacements thereof or pursuant to any comparable agreements
thereto, in each case providing for the same or similar payments, and (vii)
Indebtedness of Borrowers permitted hereunder or Indebtedness of Doe Run Cayman
and its
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Subsidiaries permitted under the Senior Note Indenture (as in effect on the date
hereof); provided, that, as to Indebtedness of Borrowers, such encumbrance or
restriction shall be no more restrictive than any encumbrance or restriction
contained in this Agreement and as to Indebtedness of Doe Run Cayman and its
Subsidiaries, such encumbrance or restriction shall be no more restrictive than
any encumbrance or restriction contained in the Senior Note Indenture (as in
effect on the date hereof).
6.22 Further Assurances. Each Borrower has executed or will
contemporaneously herewith execute and deliver to Lender such of the other
Financing Agreements to which it is a party and financing statements pursuant to
the UCC, in form and substance satisfactory to Lender. Each Borrower shall, at
its expense, at any time or times duly execute and deliver, or shall cause to be
duly executed and delivered, such further agreements, instruments and documents,
including, without limitation, additional security agreements, collateral
assignments, UCC financing statements or amendments or continuations thereof,
certificates of title with respect to motor vehicles and applications for
notation of the liens of Lender thereon, landlord's or mortgagee's waivers of
liens and consents to the exercise by Lender of all the rights and remedies
hereunder, under any of the other Financing Agreements or applicable law with
respect to the Collateral, and do or cause to be done such further acts as may
be necessary or proper in Lender's opinion to evidence, perfect, maintain and
enforce the security interest and the priority thereof in the Collateral and to
otherwise effectuate the provisions or purposes of this Agreement or any of the
other Financing Agreements. Where permitted by law, each Borrower hereby
authorizes Lender to execute and file one or more UCC financing statements
signed only by Lender. Upon the request of Lender, at any time and from time to
time, each Borrower shall, at its cost and expense, do, make, execute, deliver
and record, register or file, financing statements, mortgages, deeds of trust,
deeds to secure debt, and other instruments, acts, pledges, assignments and
transfers (or cause the same to be done) and will deliver to Lender such
instruments evidencing items of Collateral as may be requested by Lender.
SECTION 7. EVENTS OF DEFAULT AND REMEDIES
7.1 Events of Default. The occurrence of any one or more of the following
events shall constitute an "Event of Default" hereunder:
(a) a Borrower shall be in default in the payment of any of the
Obligations when due, which default shall continue for three (3) days; or
(b) a Borrower or any Obligor shall fail to observe or perform any
covenants or agreements contained in this Agreement, the other Financing
Agreements or in any other document or instrument referred to herein or therein
other than as described in Section 7.1(a) above and such failure shall continue
for fifteen (15) days, provided, that, such fifteen (15) day period shall not
apply in the case of: (i) any failure to observe any such covenant or agreement
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which is not capable of being cured at all or within such fifteen (15) day
period or which has been the subject of a prior failure within a six (6) month
period or (ii) an intentional breach by a Borrower or its or their management of
any such covenant or agreement, or (iii) the failure to observe or perform any
of the covenants or agreements contained in Sections 6.2, 6.3, 6.4, 6.5, 6.6,
6.17, 6.20, 6.21, 6.22 and 6.23 of this Agreement or any covenants or agreements
covering substantially the same matter as such sections in any of the other
Financing Agreements; or
(c) any present or future representation, warranty or statement of
fact when made by or on behalf of a Borrower or any Obligor to Lender is false
or misleading in any material respect; or
(d) a judgment is rendered against Doe Run or any Obligor in excess
of $1,000,000 in any one case or in excess of $2,500,000 in the aggregate or
against Fabricated Products in excess of $100,000 in any one case or in excess
of $250,000 in the aggregate and the same shall remain undischarged for a period
in excess of thirty (30) days or execution shall at any time not be effectively
stayed except if it is a judgment for which such Borrower or Obligor is fully
insured and with respect to which the insurer has admitted in writing its
liability for the full amount thereof and so long as execution is at all times
effectively stayed; or
(e) a Borrower or any Obligor shall be generally unable to pay its
debts as they mature, suspend or discontinue doing business for any reason,
become insolvent, call a meeting of creditors or have a creditors' committee
appointed, make a general assignment for the benefit of creditors, shall admit
in writing its inability to pay its debts as they become due or shall commence
any action or proceeding for the appointment of any trustee, receiver, custodian
or liquidator of such Borrower or such Obligor or all or any part of their
respective properties or assets; or
(f) a Borrower or any Obligor shall commence any action or
proceeding for relief under the Bankruptcy Code or any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under the Bankruptcy Code or any other present or future statute, law or
regulation or shall take any corporate action to authorize any of such actions
or proceedings; or
(g) a Borrower or any Obligor shall have commenced against it any
action or proceeding for relief under the Bankruptcy Code or any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under the Bankruptcy Code or any other present or future statute, law or
regulation, or any action or proceeding for the appointment of any trustee,
receiver, custodian or liquidator of such Borrower or Obligor or all or any part
of their respective properties or assets, which is not dismissed within
forty-five (45) days of its commencement, or such Borrower or Obligor shall file
any answer admitting or not contesting the allegations of a petition filed
against it in any such proceeding or by any act or
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omission indicates its consent to, acquiescence in or approval of, any such
action or proceeding or if the relief requested is granted sooner; or
(h) a Borrower or any Obligor shall default in the payment of any
amounts at any time due on any Indebtedness for borrowed money in excess of
$2,500,000 (including, without limitation, any Indebtedness evidenced by or
arising under the Senior Notes or the other Senior Note Agreements), Capitalized
Lease Obligations or any contingent Indebtedness in connection with any
guarantee, letter of credit, indemnity or similar type of instrument at any time
owing to any Person other than Lender or in the performance of any other terms
or covenants or any evidence of same or other agreement relating thereto
(including, without limitation, the Senior Note Agreements) or securing same and
which causes or permits the holders of such Indebtedness to cause such
Indebtedness to become due prior to its maturity, and which default continues
for more than the applicable cure period, if any, with respect thereto, but in
no event more than thirty (30) days after the occurrence of any such default; or
(i) any default by Doe Run Mining under the Banco de Credito
Agreements which gives Banco de Credito the right to cease or suspend making
payments to Doe Run thereunder or the failure of Banco de Credito to make any
payment to Doe Run required under the terms of the Banco de Credito Deposit
Agreement for any reason;
(j) there is a Change of Control; or
(k) the occurrence of any default or event of default under any of
the other Financing Agreements.
7.2 Remedies.
(a) Without limiting Lender's rights to demand payment sooner as
provided in this Agreement, upon or at any time after the occurrence or
existence of any one or more of such Events of Default, upon termination of this
Agreement or the other Financing Agreements, or if this Agreement and the other
Financing Agreements are not renewed, in addition to any other rights Lender may
have under the Financing Agreements or otherwise:
(i) Lender may terminate all provisions of this Agreement for
future Loans and Letter of Credit Accommodations (such that no more Loans shall
be made or Letter of Credit Accommodations provided hereunder), without
presentment for payment, demand, notice of dishonor or notice of protest or any
other or further notice, all of which are hereby expressly waived by Borrowers;
or
(ii) Lender may declare any or all of the Obligations to be
immediately due and payable, together with interest at the highest rate of
interest hereunder until fully and indefeasibly paid, without presentment for
payment, demand, notice of dishonor or protest or any
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or other further notice, all of which are hereby expressly waived by Borrowers
(provided, that, upon the occurrence of any Events of Default described in
Sections 7.1(f) or 7.1(g), all Obligations shall automatically become
immediately due and payable); and
(iii) each Participant, to the fullest extent permitted by
applicable law, shall have the right to (A) set off against the Obligations any
and all deposits (whether general or special, time or demand, provisional or
final), credits, balances, accounts, monies or other assets which are the
property of Borrowers and held by such Participant or owed by such Participant
to such Borrower and (B) remit the same to Lender for application to the
Obligations;
(iv) without further notice to Borrowers, Lender may
appropriate, set off and apply to the payment of any or all of the Obligations,
any or all Collateral, in such manner as Lender shall determine, enforce payment
of any Collateral, settle, compromise or release in whole or in part, any
amounts owing on the Collateral, make allowances and adjustments with respect
thereto, issue credits in Lender's or either Borrower's name, sell, assign and
deliver the Collateral (or any part thereof), at public or private sale, at
broker's board, for cash, upon credit or otherwise, at Lender's option and
discretion, and Lender may bid or become purchaser at any such sale, if public,
free from any right of redemption which is hereby expressly waived;
(v) without limiting the generality of the foregoing, Lender
is hereby authorized at any time and from time to time, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other Indebtedness at any time owing by Lender to or for the
credit or the account of Borrowers against any and all of the Obligations,
whether or not then due and payable;
(vi) Lender shall have the right, without notice to Borrowers
(except as otherwise expressly provided herein), at any time and from time to
time in its discretion, with or without judicial process or the aid or
assistance of others and without cost to Lender (A) to enter upon any premises
on or in which any of the Inventory may be located and, without resistance or
interference by Borrowers, take possession of the Inventory, (B) to complete
processing, manufacturing and repair of all or any portion of the Inventory, (C)
to sell, foreclose or otherwise dispose of any part or all of the Inventory on
or in any premises of Borrower or premises of any other party, (D) to require
each Borrower, at its expense, to assemble and make available to Lender any part
or all of the Inventory at any reasonable place and time designated by Lender,
and (E) to remove any or all of the Inventory from any premises on or in which
the same may be located, for the purpose of effecting the sale, foreclosure or
other disposition thereof or for any other purpose.
(b) Lender shall have all of the rights and remedies of a secured
party under the UCC or applicable law of any State in which any Collateral may
be situated, in addition to all of the rights and remedies set forth in this
Agreement and the other Financing Agreements, and in
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any instrument or document referred to herein or therein, and/or under any other
applicable law relating to this Agreement, the other Financing Agreements, the
Obligations or the Collateral.
(c) Each Borrower agrees that the giving of ten (10) days notice to
Doe Run by Lender at Doe Run's address set forth below, designating the place
and time of any public sale or of the time after which any private sale or other
intended disposition of the Collateral is to be made, shall be deemed to be
reasonable notice thereof and each Borrower waives any other notice with respect
thereto.
(d) The proceeds resulting from the exercise of any of the foregoing
rights or remedies shall be applied by Lender to the payment of the Obligations
in such order as Lender may elect, and each Borrower shall remain liable to
Lender for any deficiency. Without limiting the generality of the foregoing, if
Lender enters into any credit transaction, directly or indirectly, in connection
with the disposition of any Collateral, it shall have the option, at any time,
in its discretion, to reduce the Obligations by the principal amount of such
credit transaction or to defer the reduction thereof until actual receipt by
Lender of cash or other immediately available funds in connection therewith.
(e) In the event Lender institutes an action to recover any
Collateral or seeks recovery of any Collateral by way of prejudgment remedy or
otherwise, each Borrower hereby irrevocably waives (i) the posting of any bond,
surety or security with respect thereto which might otherwise be required, (ii)
any demand for possession prior to the commencement of any suit or action to
recover the Collateral, and (iii) any requirement that Lender retain possession
and not dispose of any Collateral until after trial or final judgment.
(f) Lender may, at its option, cure any default by a Borrower under
any agreement with any Person, which constitutes, or with notice or passage of
time or both would constitute, an Event of Default hereunder or under any of the
other Financing Agreements, or pay or bond on appeal any judgment entered
against a Borrower (irrespective of the amount of said judgment or the time
elapsed since entry thereof), and charge such Borrower's account(s) therefor,
such amounts to be repayable by such Borrower on demand, together with interest
thereon at the highest rate of interest payable hereunder; provided, however,
Lender shall be under no obligation to effect such cure, payment or bonding and
shall not, by making any payment for such Borrower's account(s), be deemed to
have assumed any obligation or liability of such Borrower.
(g) The enumeration of the foregoing rights and remedies is not
intended to be exclusive, and such rights and remedies are in addition to and
not by way of limitation of any other rights or remedies Lender may have under
the UCC or other applicable law. Lender shall have the right to determine which
rights and remedies, and in which order any of the same, are to be exercised,
and to determine which Collateral is to be proceeded against and in which order,
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and the exercise of any right or remedy shall not preclude the exercise of any
others, all of which shall be cumulative.
(h) No act, failure or delay by Lender shall constitute a waiver of
any of the rights and remedies of Lender. No single or partial waiver by Lender
of any provision of this Agreement or any of the other Financing Agreements, or
breach or default thereunder, or of any right or remedy which Lender may have
shall operate as a waiver of any other provision, breach, default, right or
remedy or of the same provision, breach, default, right or remedy on a future
occasion.
(i) Each Borrower waives presentment, notice of dishonor, protest
and notice of protest of all instruments included in or evidencing any of the
Obligations or the Collateral and any and all notices or demands whatsoever
(except as expressly provided herein). Lender may, at all times, proceed
directly against either or both of Borrowers to enforce payment of the
Obligations and shall not be required to take any action of any kind to
preserve, collect or protect any rights in the Collateral.
SECTION 8. COLLECTION AND ADMINISTRATION
8.1 Collections; Management of Collateral.
(a) Each Borrower shall establish and maintain, at its expense,
blocked accounts or lockboxes and related blocked accounts (in either case,
"Blocked Accounts"), as Lender may specify, with such banks as are acceptable to
Lender into which such Borrower shall promptly deposit and direct its account
debtors to directly remit all payments on Accounts and all payments constituting
proceeds of Inventory or other Collateral in the identical form in which such
payments are made, whether by cash, check or other manner. The banks at which
the Blocked Accounts are established shall enter into an agreement, in form and
substance satisfactory to Lender, providing that all items received or deposited
in the Blocked Accounts are subject to the security interests and rights of
Lender, that the depository bank has no lien upon, or right to setoff against,
the Blocked Accounts, the items received for deposit therein, or the funds from
time to time on deposit therein and that the depository bank will wire, or
otherwise transfer, in immediately available funds, on a daily basis, at such
time as Lender shall direct, all funds received or deposited into the Blocked
Accounts to such bank account of Lender as Lender may from time to time
designate for such purpose ("Payment Account"). Borrowers agree that all
payments made to such Blocked Accounts or other funds received and collected by
Lender, whether on the Accounts or as proceeds of Inventory or other Collateral
or otherwise shall be subject to the security interests and rights of Lender.
(b) For purposes of calculating interest on the Obligations, such
payments or other funds received will be applied (conditional upon final
collection) to the Obligations one (1)
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Business Day following the date of receipt of immediately available funds by
Lender in the Payment Account (the "Collection Period"). In the event that as of
any day there are no Loans outstanding, Lender shall be entitled to charge
Borrowers an administrative fee equivalent to the interest Lender would have
received for the Collection Period had there been Loans outstanding on such day,
in the amount of the payments and other funds received pursuant to the preceding
sentence by Lender in the Payment Account on such day. For purposes of
calculating the amount of the Loans available to each Borrower such payments
will be applied (conditional upon final collection) to the Obligations on the
Business Day of receipt by Lender in the Payment Account, if such payments are
received within sufficient time (in accordance with Lender's usual and customary
practices as in effect from time to time) to credit such Borrower's loan account
on such day, and if not, then on the next Business Day. To the extent Lender may
hold cash collateral to secure all of the Obligations on terms and conditions
determined by Lender, so long as no Event of Default shall exist or have
occurred and be continuing, the Borrower providing such cash collateral shall
receive a credit to its loan account maintained by Lender at a rate equal to
three (3%) percent per annum less than the Prime Rate. Such credit shall be
applied to the loan account of such Borrower as of the first day of each month.
(c) Each Borrower and all of its Subsidiaries, shareholders,
directors, employees, agents and other Affiliates shall, acting as trustee for
Lender, receive, as the property of Lender according to its interest hereunder,
any monies, checks, notes, drafts or any other payment relating to and/or
proceeds of Accounts or other Collateral which come into their possession or
under their control and immediately upon receipt thereof, shall deposit or cause
the same to be deposited in the Blocked Accounts, or remit the same or cause the
same to be remitted, in kind, to Lender. In no event shall the same be
commingled with such Borrower's own funds. Each Borrower agrees to reimburse
Lender on demand for any amounts owed or paid to any bank at which a Blocked
Account is established or any other bank or person involved in the transfer of
funds to or from the Blocked Accounts arising out of Lender's payments to or
indemnification of such bank or person. The obligation of Borrowers to reimburse
Lender for such amounts pursuant to this Section 8.1 shall survive the
termination or non-renewal of this Agreement.
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8.2 Payments.
(a) All Obligations shall be payable to the Payment Account as
designated under Section 8.1 or such other place as Lender may designate from
time to time. The Obligations shall be payable upon the effective date of
termination or non-renewal or maturity of the Credit Facility, or earlier upon
an Event of Default, or otherwise as provided elsewhere herein or in the other
Financing Agreements. Lender may apply payments received or collected from a
Borrower or for the account of a Borrower (including, without limitation, the
monetary proceeds of collections or of realization upon any Collateral) to such
of the Obligations, whether or not then due, and to such other Obligations then
due, in each case in such order and manner as Lender determines. Lender shall
have the continuing and exclusive right to apply and reverse and reapply any and
all such proceeds and payments to any portion of the Obligations. Upon the
request of Lender, Borrowers shall execute and deliver to Lender one or more
promissory notes, in form and substance satisfactory to Lender, to evidence
further the Loans, or any portion thereof.
(b) If after receipt of any payment of, or proceeds applied to the
payment of, all or any part of the Obligations, Lender is for any reason
required to surrender such payment or proceeds to any Person, because such
payment or proceeds is invalidated, declared fraudulent, set aside, determined
to be void or voidable as a preference, or a diversion of trust funds, or for
any other reason, then the Obligations or any part thereof intended to be
satisfied shall be revived and continue and this Agreement shall continue in
full force as if such payment or proceeds had not been received by such Lender
and Borrowers shall be liable to pay to Lender, and hereby does indemnify Lender
and hold Lender harmless for the amount of such payment or proceeds surrendered.
The provisions of this Section 8.2(b) shall be and remain effective
notwithstanding any contrary action which may have been taken by Lender in
reliance upon such payment or proceeds, and any such contrary action so taken
shall be without prejudice to the rights of Lender under this Agreement and
shall be deemed to have been conditioned upon such payment or proceeds having
become final and irrevocable. The provisions of this Section 8.2(b) shall
survive the termination of this Agreement and the other Financing Agreements.
(c) At Lender's option, all principal, interest, fees, commissions,
costs, expenses, or other charges hereunder, under the other Financing
Agreements or in connection herewith or therewith, and any and all Loans, may be
charged directly to any account(s) of Borrowers maintained by Lender.
(d) Each Borrower shall make all payments in respect of the
Obligations free and clear of, and without deduction or withholding for or on
account of, any setoff, counterclaim, defense, duties, taxes, levies, imposts,
fees, deductions, withholdings, restrictions or conditions of any kind or nature
whatsoever.
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8.3 Borrowers' Loan Account. Lender shall maintain one or more loan
account(s) on its books in which shall be recorded (a) all Loans, Letter of
Credit Accommodations and other Obligations and the Collateral, (b) all payments
made by or on behalf of a Borrower and (c) all other appropriate debits and
credits as provided in this Agreement, including, without limitation, fees,
charges, costs, expenses and interest. All entries in the loan account(s) shall
be made in accordance with Lender's customary practices as in effect from time
to time. All Collateral or other collateral security held by or granted to
Lender by a Borrower or any third persons shall be security for the payment and
performance of any and all Obligations to Lender (including, but not limited to,
the Loans), notwithstanding the maintenance of separate accounts for Borrowers
or third persons or the existence of any notes.
8.4 Statements. Lender shall render to Doe Run each month a statement
setting forth the balance in each Borrower's loan account(s) maintained by
Lender for such Borrower pursuant to the provisions of this Agreement, including
principal, interest, fees, costs and expenses. Each such statement shall be
subject to subsequent adjustment by Lender but shall, absent manifest errors or
omissions, be considered correct and deemed accepted by Borrowers and
conclusively binding upon Borrowers as an account stated except to the extent
that Lender receives a written notice from Borrowers of any specific exceptions
of Borrowers thereto within thirty (30) days after the date such statement has
been mailed by Lender. Until such time as Lender shall have rendered to Doe Run
a written statement as provided above, the balance in such Borrower's loan
account(s) shall be presumptive evidence of the amounts due and owing by such
Borrower to Lender.
8.5 Right of Inspection; Access. Lender and its representatives shall, at
all reasonable times and upon reasonable prior written notice prior to an Event
of Default and at any time and without notice at any time on or after an Event
of Default, have free access to and right of inspection of the Collateral and
have full access to and the right to examine and make copies of the books and
records of Borrowers to confirm and verify all Accounts, to perform general
audits and to do whatever else Lender deems necessary to protect the interests
of Lender. Lender may at any time remove from the premises of Borrowers or
require Borrower or any accountants and auditors employed by Borrowers to
deliver any books and records and Lender may, without cost or expense to any of
it, use such of Borrowers' personnel, supplies, computer equipment and space at
its places of business as may be reasonably necessary for the handling of
collections.
8.6 Accounts Documentation. Each Borrower shall maintain its shipping
forms, invoices and other related documents in a form reasonably satisfactory to
Lender and each Borrower shall maintain its books, records and accounts in
accordance with GAAP consistently applied. Each Borrower shall keep and
maintain, at its cost and expense, satisfactory and complete books and records
of all Accounts, all payments received or credits granted thereon, and all other
dealings therewith. At such times as Lender may reasonably request, each
Borrower shall deliver to Lender, all original documents evidencing the sale and
delivery of
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goods or the performance of services which created any Accounts, including, but
not limited to, all contracts, orders, invoices, bills of lading, warehouse
receipts, delivery tickets and shipping receipts, together with schedules
describing the Accounts and/or written confirmatory assignments to Lender of
each Account, in form and substance satisfactory to Lender and duly executed by
such Borrower, together with such other information as Lender may request. In no
event shall the making or the failure to make or the content of any schedule or
assignment or such Borrower's failure to comply with the provisions hereof be
deemed or construed as a waiver, limitation or modification of the security
interest in, lien upon and assignment of the Collateral or the representations,
warranties or covenants under this Agreement or the other Financing Agreements.
Any documents, schedules, invoices or other papers delivered to Lender, pursuant
to this Section or otherwise, may be destroyed or otherwise disposed of by it
one (1) year after the same are delivered, unless Borrowers make written request
therefor and pay all expenses attendant to their return, in which event Lender
shall return same when its actual or anticipated need therefor has ceased.
8.7 Specific Powers. Each Borrower hereby constitutes Lender and its
designees, as such Borrower's attorney-in-fact, with power of substitution, at
the cost and expense of Borrowers, to exercise at any time all or any of the
following powers which appointment, being coupled with an interest, shall be
irrevocable until all Obligations have been indefeasibly paid in full: (a) to
receive, take, endorse, assign, deliver, accept and deposit, in the name of
Lender or such Borrower, any and all checks, notes, drafts, remittances and
other instruments and documents or chattel paper, in each case to the extent
relating to the Collateral; (b) to transmit to Account Debtors notice of
Lender's interest therein and to request from such Account Debtors at any time,
in the name of Lender or such Borrower or that of Lender's designee, information
concerning the Collateral and the amounts owing thereon; (d) on or after the
occurrence of an Event of Default, or an event which with notice, passage of
time or both would constitute an Event of Default, to notify Account Debtors to
make payment directly to Lender; (e) on or after the occurrence of an Event of
Default, or an event which with notice, passage of time or both would constitute
an Event of Default, to take or bring, in the name of Lender or such Borrower,
all steps, actions, suits or proceedings deemed by Lender necessary or desirable
to effect collection of the Collateral; and (f) to execute in such Borrower's
name and on its behalf any UCC financing statements relating to the Collateral
or amendments thereto. Each Borrower hereby releases Lender and its officers,
employees and designees, from any liability arising from any act or acts under
this Agreement or in furtherance thereof, whether of omission or commission, and
whether based upon any error of judgment or mistake of law or fact, except for
acts of gross negligence or wilful misconduct of Lender as determined pursuant
to a final non-appealable order of a court of competent jurisdiction.
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SECTION 9. EFFECTIVE DATE; TERMINATION; COSTS
9.1 Term.
(a) This Agreement and the other Financing Agreements shall become
effective as of the date hereof and shall continue in full force and effect for
a term ending on the date three (3) years from the date hereof (the "Renewal
Date") and from year to year thereafter, unless sooner terminated pursuant to
the terms hereof; provided, that, Lender or Borrowers may terminate this
Agreement and the other Financing Agreements effective on the Renewal Date or on
the anniversary of the Renewal Date in any subsequent year by giving to the
other parties hereto at least sixty (60) days prior written notice. This
Agreement and all other Financing Agreements must be terminated simultaneously.
(b) In addition, Lender may terminate this Agreement and the other
Financing Agreements, or terminate only the provisions of this Agreement as to
future Loans and Letter of Credit Accommodations, immediately at any time upon
the occurrence of an Event of Default or an act, condition or event which with
notice or passage of time or both would constitute an Event of Default.
(c) Upon the effective date of termination or non-renewal of the
Financing Agreements, Borrowers shall pay to Lender in full, all outstanding and
unpaid Obligations (including, but not limited to, the Loans and all interest,
fees (including the early termination fees provided herein, if applicable),
charges, expenses and other amounts provided for hereunder, under the other
Financing Agreements or otherwise) and shall furnish cash collateral to Lender
in such amounts as Lender determines are reasonably necessary to secure Lender
from loss, cost, damage or expense, including reasonable attorneys' fees and
legal expenses, in connection with any contingent Obligations, including Letter
of Credit Accommodations and any checks or other payments provisionally credited
to the Obligations and/or as to which Lender has not yet received final and
indefeasible payment. Such payments in respect of the Obligations and cash
collateral shall be remitted by wire transfer in Federal funds to such bank
account of Lender, as Lender may, in its discretion, designate in writing to
Borrowers for such purpose. Interest at the Interest Rate shall be due until and
including the next Business Day, if the amounts so paid by Borrower to the bank
account designated by Lender are received in such bank account later than 12:00
noon, New York, New York time.
(d) No termination of all or any part of the Financing Agreements
shall relieve or discharge either Borrower of its duties, obligations and
covenants under the Financing Agreements until all Obligations have been fully
indefeasibly discharged and paid, and the continuing security interests of
Lender in the Collateral shall remain in effect until all such Obligations have
been fully and indefeasibly discharged and paid.
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(e) If this Agreement terminates upon the occurrence of an Event of
Default or at the request of either Borrower prior to the Renewal Date, in view
of the impracticality and extreme difficulty of ascertaining actual damages and
by mutual agreement of the parties as to a reasonable calculation of the lost
profits of Lender as a result thereof, Borrowers hereby agree to pay to Lender,
upon the effective date of such termination, an early termination fee in an
amount equal to:
(i) two (2%) percent of the Maximum Credit, if such
termination is effective on or prior to the first
anniversary of this Agreement; or
(ii) one (1%) percent of the Maximum Credit, if such
termination is effective after the first anniversary of
this Agreement but on or prior to the second anniversary
of this Agreement; or
(iii) one-half (1/2%) percent of the Maximum Credit, if such
termination is effective after the second anniversary of
this Agreement but prior to the third anniversary of
this Agreement, or if the Agreement continues for any
renewal term thereafter, if such termination is
effective prior to the last day of such renewal term.
Such early termination fee shall be presumed to be the amount of damages
sustained by said early termination and Borrowers agree that it is reasonable
under the circumstances currently existing. The early termination fee provided
for in this Section 9.1 shall be deemed included in the Obligations.
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9.2 Expenses and Additional Fees.
(a) Each Borrower shall pay to Lender on demand all reasonable costs
and expenses that Lender may pay or incur in connection with the negotiation,
preparation, consummation, administration, enforcement, and termination of this
Agreement and the other Financing Agreements, including, without limitation: (i)
reasonable attorneys' and paralegals' fees and disbursements of counsel to
Lender and any Participant (including allocated costs of in-house counsel); (ii)
costs and expenses (including reasonable attorneys' and paralegals' fees and
disbursements, and allocated costs of in-house counsel) for any amendment,
supplement, waiver, consent, or subsequent closing in connection with the
Financing Agreements and the transactions contemplated thereby; (iii) costs and
expenses of lien and title searches and title insurance; (iv) taxes, fees and
other charges for recording any agreements or documents with the Office of
Patents and Trademarks, the Copyright Office or any other governmental
authority, and the filing of UCC financing statements and continuations, and
other actions to perfect, protect, and continue the security interests and liens
of Lender in the Collateral; (v) sums paid or incurred to pay any amount or take
any action required of Borrowers under the Financing Agreements that Borrowers
fail to pay or take; (vi) with respect to the Collateral, costs of appraisals,
inspections and verifications thereof (including, without limitation, travel,
lodging, and meals) and inspections of each Borrower's operations by Lender,
Participants or their agents, plus a charge of $650 per person per day for the
field examiners of Lender and any Participant; (vii) costs and expenses of
forwarding loan proceeds, collecting checks and other items of payment, and
establishing and maintaining payment accounts and lock boxes; (viii) costs and
expenses of preserving and protecting the Collateral; and (ix) costs and
expenses (including reasonable attorneys' and paralegals' fees and disbursements
and allocated costs of in-house counsel) paid or incurred to obtain payment of
the Obligations, enforce the security interests and liens of Lender, sell or
otherwise realize upon the Collateral, and otherwise enforce the provisions of
this Agreement and the other Financing Agreements, or to defend any claims made
or threatened against Lender arising out of the transactions contemplated hereby
(including, without limitation, preparations for and consultations concerning
any such matters). The foregoing shall not be construed to limit any other
provisions of the Financing Agreements regarding costs and expenses to be paid
by Borrowers.
(b) Borrowers shall pay to Lender all of its customary charges and
fees in connection with (i) any payment, claim or refund relating to the
dishonor of any checks or other items of Borrowers or Account Debtors, and (ii)
wire transfers to Borrowers.
(c) All sums provided for in this Section 9.2 shall be part of the
Obligations, shall be payable on demand, and shall accrue interest after demand
for payment thereof at the applicable rate of interest then payable hereunder.
Lender is hereby irrevocably authorized to charge any amounts payable hereunder
directly to any of the account(s) maintained by Lender with respect to
Borrowers.
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9.3 Survival of Agreement. All agreements, representations and warranties
contained herein or made in writing by the parties hereto in connection with the
transactions contemplated hereby shall survive the execution and delivery of
this Agreement, the other Financing Agreements and the consummation of the
transactions contemplated herein or therein regardless of any investigation made
by or on behalf of Lender.
9.4 No Waiver; Cumulative Remedies. No failure to exercise, and no delay
in exercising on the part of Lender any right, power or privilege under this
Agreement or under any of the other Financing Agreements or other documents
referred to herein or therein shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder or
thereunder preclude any other or further exercise thereof or the exercise of any
other right, power and privilege. No notice to or demand on a Borrower not
required hereunder or any of the other Financing Agreements shall entitle a
Borrower to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of Lender to any other or
further action in any circumstances without notice or demand. The rights and
remedies of Lender under this Agreement, the other Financing Agreements and any
other present and future agreements between Lender and a Borrower are cumulative
and not exclusive of any rights or remedies provided by law or under any of the
Financing Agreements or such other agreements and all such rights and remedies
may be exercised successively or concurrently.
9.5 Notices. All notices, requests and demands hereunder shall be in
writing and (a) made to the applicable party at its address set forth on the
signature page hereof, or to such other address as either party may designate by
written notice to the other in accordance with this provision, and (b) deemed to
have been given or made: if delivered in person, immediately upon delivery; if
by telex, telegram or facsimile transmission, immediately upon sending and upon
confirmation of receipt; if by nationally recognized overnight courier service
with instructions to deliver the next Business Day, one (1) Business Day after
sending; and if by certified mail, return receipt requested, ten (10) days after
mailing.
9.6 Entire Agreement. This Agreement, the other Financing Agreements, any
supplements hereto or thereto, and any instruments or documents delivered or to
be delivered in connection herewith or therewith represent the entire agreement
and understanding concerning the subject matter hereof and thereof between the
parties hereto, and supersede all other prior and contemporaneous agreements,
understandings, negotiations and discussions, representations, warranties,
commitments, offers and contracts concerning the subject matter hereof and
thereof, whether oral or written.
9.7 Confidentiality.
(a) Lender shall use all reasonable efforts to keep confidential, in
accordance with its customary procedures for handling confidential information
and safe and sound lending practices, any non-public information supplied to it
by Borrowers pursuant to this Agreement
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which is clearly and conspicuously marked as confidential at the time such
information is furnished by Borrowers to Lender, provided, that, nothing
contained herein shall limit the disclosure of any such information: (i) to the
extent required by statute, rule, regulation, subpoena or court order, (ii) to
bank examiners and other regulators, auditors and/or accountants, (iii) in
connection with any litigation to which Lender is a party, (iv) to any Affiliate
of Lender, (v) to any assignee or participant (or prospective assignee or
participant) so long as such assignee or participant (or prospective assignee or
participant) shall have first agreed in writing to treat such information as
confidential in accordance with this Section 9.7, or (vi) to counsel for Lender
or any participant or assignee (or prospective participant or assignee).
(b) In no event shall this Section 9.7 or any other provision of
this Agreement or applicable law be deemed: (i) to apply to or restrict
disclosure of information that has been or is made public by Borrowers or any
third party without breach of this Section 9.7 or otherwise becomes generally
available to the public other than as a result of a disclosure in violation
hereof, (ii) to apply to or restrict disclosure of information that was or
becomes available to Lender on a non-confidential basis from a person other than
Borrowers, (iii) require Lender to return any materials furnished by Borrowers
to Lender or (iv) prevent Lender from responding to routine informational
requests in accordance with the Code of Ethics for the Exchange of Credit
Information promulgated by The Xxxxxx Xxxxxx Associates or other applicable
industry standards relating to the exchange of credit information. The
obligations of Lender under this Section 9.7 shall supersede and replace the
obligations of Lender under any confidentiality letter signed prior to the date
hereof.
9.8 Partial Invalidity. If any provision of this Agreement or the other
Financing Agreements is held to be invalid or unenforceable, such invalidity or
unenforceability shall not invalidate this Agreement or the other Financing
Agreements as a whole but this Agreement or the particular Financing Agreement,
as the case may be, shall be construed as though it did not contain the
particular provision or provisions held to be invalid or unenforceable and the
rights and obligations of the parties shall be construed and enforced only to
such extent as shall be permitted by law.
9.9 Headings. The headings used herein are for convenience only and do not
constitute matters to be considered in interpreting this Agreement.
9.10 Counterparts. This Agreement may be executed in any number of
counterparts, and by Lender and Borrowers in separate counterparts, each of
which shall be an original, but all of which shall together constitute one and
the same agreement.
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SECTION 10. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW
10.1 Governing Law; Choice of Forum; Service of Process; Jury Trial
Waiver.
(a) The validity, interpretation and enforcement of this Agreement
and the other Financing Agreements and any dispute arising out of the
relationship between the parties hereto, whether in contract, tort, equity or
otherwise, shall be governed by the internal laws of the State of New York
(without giving effect to principles of conflicts of law).
(b) Borrowers and Lender irrevocably consent and submit to the
non-exclusive jurisdiction of the Supreme Court of the State of New York in New
York County and the United States District Court for the Southern District of
New York and waive any objection based on venue or forum non conveniens with
respect to any action instituted therein arising under this Agreement or any of
the other Financing Agreements or in any way connected with or related or
incidental to the dealings of the parties hereto in respect of this Agreement or
any of the other Financing Agreements or the transactions related hereto or
thereto, in each case whether now existing or hereafter arising, and whether in
contract, tort, equity or otherwise, and agree that any dispute with respect to
any such matters shall be heard only in the courts described above. Lender shall
have the right to bring any action or proceeding against either or both of
Borrowers or its or their property in the courts of any other jurisdiction which
Lender deems necessary or appropriate in order to realize on the Collateral or
to otherwise enforce its rights against Borrower or its or their property).
(c) Each Borrower hereby waives personal service of any and all
process upon it and consents that all such service of process may be made by
registered mail, postage prepaid, directed to its address set forth on the
signature pages hereof and service so made shall be deemed to be completed ten
(10) days after the same shall have been so deposited in the U.S. mails,
registered mail, postage prepaid, or, at Lender's option, by service upon
Borrower in any other manner provided under the rules of any of the foregoing
courts. Within thirty (30) days after such service, such Borrower shall appear
in answer to such process, failing which such Borrower shall be deemed in
default and judgment may be entered by Lender against such Borrower for the
amount of the claim and other relief requested.
(d) BORROWERS AND LENDER EACH HEREBY WAIVES ANY RIGHT TO TRIAL BY
JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS
AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR (ii) IN ANY WAY CONNECTED
WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT
OF THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR THE TRANSACTIONS
RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY
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OR OTHERWISE. BORROWERS AND LENDER EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY AND THAT BORROWERS OR LENDER MAY FILE AN ORIGINAL COUNTERPART OF A COPY
OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(e) Lender shall not have any liability to Borrowers (whether in
tort, contract, equity or otherwise) for losses suffered by Borrowers in
connection with, arising out of, or in any way related to the transactions or
relationships contemplated by this Agreement, or any act, omission or event
occurring in connection herewith, unless it is determined by a final and
non-appealable judgment by a court of competent jurisdiction that the losses
were the result of such party's own acts or omissions constituting gross
negligence or willful misconduct. In any such litigation, Lender shall be
entitled to the benefit of the rebuttable presumption that it acted in good
faith and with the exercise of ordinary care in the performance by it of the
terms of this Agreement.
10.2 Waiver of Notices. Borrowers hereby expressly waive demand,
presentment, protest and notice of protest and notice of dishonor with respect
to any and all instruments and commercial paper, included in or evidencing any
of the Obligations or the Collateral, and any and all other demands and notices
of any kind or nature whatsoever with respect to the Obligations, the Collateral
and this Agreement, except such as are expressly provided for herein. No notice
to or demand on a Borrower which Lender may elect to give shall entitle
Borrowers to any other or further notice or demand in the same, similar or other
circumstances. Without limiting the generality of the foregoing, Borrowers waive
(a) notice prior to Lender's taking possession or control of any of the
collateral or any bond or security which might be required by any court prior to
allowing Lender to exercise any of Lender's remedies, including the issuance of
an immediate writ of possession and (b) the benefit of all valuation,
appraisement and exemption laws.
10.3 Amendments and Waivers. Neither this Agreement nor any provision
hereof shall be amended, modified, waived or discharged orally or by course of
conduct, but only by a written agreement signed by an authorized officer of
Lender, and as to amendments, as also signed by authorized officers of
Borrowers. Lender shall not, by any act, delay, omission or otherwise be deemed
to have expressly or impliedly waived any of its rights, powers and/or remedies
unless such waiver shall be in writing and signed by an authorized officer of
Lender. Any such waiver shall be enforceable only to the extent specifically set
forth therein. A waiver by Lender of any right, power and/or remedy on any one
occasion shall not be construed as a bar to or waiver of any such right, power
and/or remedy which Lender would otherwise have on any future occasion, whether
similar in kind or otherwise.
-83-
10.4 Waiver of Counterclaims. Each Borrower waives all rights to interpose
any claims, deductions, setoffs or counterclaims of any nature (other than
compulsory counterclaims) in any action or proceeding with respect to this
Agreement, the Obligations, the Collateral or any matter arising therefrom or
relating hereto or thereto.
10.5 Indemnification. Each Borrower shall indemnify and hold Lender and
its respective officers, directors, agents, employees and counsel, harmless from
and against any and all losses, claims, damages, liabilities, costs or expenses
imposed on, incurred by or asserted against any of them in connection with any
litigation, investigation, claim or proceeding commenced or threatened related
to the negotiation, preparation, execution, delivery, enforcement, performance
or administration of this Agreement, any other Financing Agreements, or any
undertaking or proceeding related to any of the transactions contemplated hereby
or any act, omission, event or transaction related or attendant thereto,
including, without limitation, amounts paid in settlement, court costs, and the
fees and expenses of counsel except to the extent resulting directly from the
gross negligence or wilful misconduct of Lender as determined pursuant to a
final non-appealable order of a court of competent jurisdiction. To the extent
that the undertaking to indemnify, pay and hold harmless set forth in this
Section may be unenforceable because it violates any law or public policy,
Borrowers shall pay the maximum portion which it is permitted to pay under
applicable law to Lender in satisfaction of indemnified matters under this
Section. The foregoing indemnity shall survive the payment of the Obligations
and the termination or non-renewal of this Agreement.
10.6 Successors and Assigns. This Agreement, the other Financing
Agreements and any other document referred to herein or therein shall be binding
upon and inure to the benefit of and be enforceable by Lender, Borrowers, and
their respective successors and assigns, except that Borrowers may not assign
its rights under this Agreement, the other Financing Agreements and any other
document referred to herein or therein without the prior written consent of
Lender. Lender may, after prior notice to Doe Run, assign its rights and
delegate its obligations under this Agreement and the other Financing Agreements
and further may assign, or, after prior notice to Doe Run, sell participations
in, all or any part of the Loans, the Letter of Credit Accommodations or any
other interest herein to another financial institution or other person, in which
event, the assignee or participant shall have, to the extent of such assignment
or participation, the same rights and benefits as it would have if it were the
Lender hereunder, except as otherwise provided by the terms of such assignment
or participation. Upon the request of Doe Run, Lender shall identify any
Participants to Doe Run.
-84-
IN WITNESS WHEREOF, Lender and Borrowers have caused these presents to be
duly executed as of the day and year first above written.
LENDER BORROWERS
CONGRESS FINANCIAL CORPORATION, THE DOE RUN RESOURCES CORPORATION
By: /s/ Xxxxxxxx Xxxxx By: /s/ Xxxxx X. Xxxxxx
--------------------------- ---------------------------
Title: First Vice President Title: Treasurer
------------------------ ------------------------
Address: Chief Executive Office:
1133 Avenue of the Americas 0000 Xxxx 000 Xxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxx Attention: Chief Financial Officer
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Telecopier: (000) 000-0000 Telecopier: (000) 000-0000
FABRICATED PRODUCTS, INC.
By: /s/ Xxxxx X. Xxxxxx
---------------------------
Title: President
------------------------
Chief Executive Office:
0000 Xxxx 000 Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
-85-
EXHIBIT A
TO
LOAN AND SECURITY AGREEMENT
Date: (A)
Number: (B)
BORROWING BASE CERTIFICATE
Pursuant to the Loan and Security Agreement between Congress Financial
Corporation ("Lender") and the undersigned ("Borrower"), and any amendments
thereto (the "Loan Agreement), Borrower hereby certifies to Lender, as of the
above date, as follows:
RECONCILIATION OF COLLATERAL BALANCE
Note: Letters and numbers in the chart correspond to the instructions provided
on the prior four pages.
Accounts Availability - Doe Run
1. Total Accounts as of _________ $_______
2. Less: Collections $_______
3. Less: Credits and Adjustments since
date of prior Certificate $_______
4. Add: New sales since date of prior
Certificate $_______
5. Current total of all Accounts $_______
6. Total amount of Accounts which are
not Eligible Accounts (as per $_______
Schedule I annexed hereto)
7. Net Amount of Eligible Accounts
(item 5 less item 6) $_______
-86-
8. Accounts Receivable Advance Rate (%) 85%
-------
9. Availability based on Net Amount
of Eligible Accounts $_______
10. Less: Availability Reserves $_______
11. Accounts Availability - Doe Run $_______
Accounts Availability - Fabricated Products
12. Total Accounts as of____ $_______
13. Less: Collections $_______
14. Less: Credits and Adjustments since
date of prior Certificate $_______
15. Add: New sales since date of prior
Certificate $_______
16. Current total of all Accounts $_______
17. Total amount of Accounts which are
not Eligible Accounts (as per $_______
Schedule II annexed hereto)
18. Net Amount of Eligible Accounts
(item 16 less item 17) $_______
19. Accounts Receivable Advance Rate (%) 85%
-------
20. Availability based on Net Amount
of Eligible Accounts $_______
21. Less: Availability Reserves $_______
22. Accounts Availability - Fabricated Products $_______
Inventory Availability - Doe Run
23. Total Value of Inventory as of
______
-87-
(a) Value of Inventory other than
Stores Inventory $_______
(b) Value of Stores Inventory $_______
24. (a) Total Value of Inventory which
is not Eligible Inventory (other
than Eligible Stores Inventory)
(as per Schedule III annexed hereto) $_______
(b) Value of Eligible Inventory (other
than Eligible Stores Inventory) $_______
(c) Inventory Advance Rate (for other
than Eligible Stores Inventory)(%) 60%
------
(d) Availability based on Eligible Inventory
other than Eligible Stores Inventory $_______
25. (a) Value of Eligible Stores Inventory $_______
(b) Stores Inventory Advance Rate (%) 25%
-------
(c) Formula Availability based on
Eligible Stores Inventory $_______
(d) Stores Sublimit $_______
(e) Availability based on Eligible
Stores Inventory (the lesser of
25(c) or 25(d)) $_______
26. Availability based on Eligible Inven-
tory and Eligible Stores Inventory $_______
27. Less: Availability Reserves $_______
28. Inventory Formula Availability $_______
29. Inventory Sublimit $_______
30. Inventory Availability - Doe Run (lesser of
item 28 or item 29) $_______
-88-
Inventory Availability - Fabricated Products
31. Total Value of Inventory
as of (D)
-----------------
(a) Value of Inventory $_______
32. (a) Total Value of Inventory which
is not Eligible Inventory (as per
Schedule IV annexed hereto) $_______
(b) Value of Eligible Inventory $_______
(c) Inventory Advance Rate (%) 60%
-------
(d) Availability based on Eligible
Inventory $_______
33. Availability based on Eligible Inven-
tory $_______
34. Less: Availability Reserves $_______
35. Inventory Formula Availability $_______
36. Inventory Sublimit $_______
37. Inventory Availability - Fabricated Products
(lesser of item 35 or item 36) $_______
Total Availability
38. Total Availability based on Accounts
and Inventory (item 38(a) plus item
38(d)).
(a) Total Availability based on Doe Run
Accounts and Inventory (item 11
plus item 30) $_______
(b) Total Availability based on Fabricated
Products Accounts and Inventory
(item 22 plus item 37) $_______
-89-
(c) Sublimit on advances against Fabricated
Products Accounts and Inventory $ 5,000,000
-----------
(d) Availability based on Fabricated Products
Accounts and Inventory (lesser of
item 38(b) or item 38(c)) $_______
39. Less: 100% of undrawn amounts of
Letter of Credit Accommodations $_______
40. Availability (item 38 minus item 39) $_______
41. Maximum Credit $_______
42. Total Availability (lesser of item 41 or item 42) $_______
RECONCILIATION OF LOAN BALANCE
43. Principal amount of outstanding Loans
as of the date of prior Certificate $_______
44. Less: Net cash collections since
date of prior Certificate $_______
45. Add: Principal amount of Loans made
since date of prior Certificate $_______
46. Current principal amount of outstanding
Loans $_______
47. Current undrawn amount of outstanding
Letter of Credit Accommodations $_______
48. Total Loans and Letters of Credit
Accommodations (item 46 plus item 47) $_______
49. Unused availability (item 42 less item 48) $_______
-90-
As of the date of this Certificate, no Event of Default exists or has
occurred and is continuing. Borrower acknowledges that the Loans and Letter of
Credit Accommodations by Lender to Borrower are based upon Lender's reliance on
the information contained herein and all representations and warranties with
respect to Accounts and Inventory in the Loan Agreement are applicable to the
Accounts and Inventory included in this Certificate. The reliance by Lender on
this Certificate should not be deemed to limit the right of Lender to establish
or revise criteria of eligibility or Availability Reserves or otherwise limit,
impair, or affect in any manner the rights of Lender under the Loan Agreement.
In the event of any conflict between the determination of Lender of the amount
of the Loans and Letter of Credit Accommodations available to Borrower in
accordance with the terms of the Loan Agreement and the determination by
Borrower of such amounts, the determination of Lender shall govern. All
capitalized terms used in this Certificate shall have the meaning assigned to
them in the Loan Agreement.
By:
Title:
-91-
SCHEDULE I
to
BORROWING BASE CERTIFICATE
DOE RUN
1. Accounts unpaid more than 60 days
after due date $_______
2. Cross-Age Accounts $_______
3. Credits in past due $_______
4. Concentration Accounts $_______
5. Affiliate Accounts $_______
6. Returns, Discounts, Claims, Credits
Allowances, Taxes $_______
7. Xxxx and Hold Invoices $_______
8. Foreign Accounts not backed
by L/Cs $_______
9. Contra Accounts $_______
10. Assay pending/retainage $_______
11. Accounts in legal, bankruptcy,
risky credits $_______
12. Sales-in-transit $_______
13. Dilution Reserve $_______
14. Other $_______
15. Other $_______
Total Accounts which are
not Eligible Accounts $
=======
-92-
SCHEDULE II
to
BORROWING BASE CERTIFICATE
FABRICATED PRODUCTS
1. Accounts unpaid more than 60 days
after due date $_______
2. Cross-Age Accounts $_______
3. Credits in past due $_______
4. Concentration Accounts $_______
5. Affiliate Accounts $_______
6. Returns, Discounts, Claims, Credits
Allowances, Taxes $_______
7. Xxxx and Hold Invoices $_______
8. Foreign Accounts not backed
by L/Cs $_______
9. Contra Accounts $_______
10. Lone Star accounts less than 60 days $_______
11. Accounts in legal, bankruptcy,
risky credits $_______
12. Other $_______
13. Other $_______
Total Accounts which are
not Eligible Accounts $
=======
-93-
SCHEDULE III
to
BORROWING BASE CERTIFICATE
DOE RUN
1. Slow Moving/Obsolete $_______
2. Packaging and Supplies $_______
3. Other $_______
4. Other $_______
5. Other $_______
6. Other $_______
7. Other $_______
8. Other $_______
Total Value of Inventory
which is not Eligible Inventory $
=======
-94-
SCHEDULE IV
to
BORROWING BASE CERTIFICATE
FABRICATED PRODUCTS
1. Slow Moving/Obsolete $_______
2. Packaging and Supplies $_______
3. Other $_______
4. Other $_______
5. Other $_______
6. Other $_______
7. Other $_______
8. Other $_______
Total Value of Inventory
which is not Eligible Inventory $
=======
-95-
SCHEDULE 1.29
TO
LOAN AND SECURITY AGREEMENT
Concentration Criteria for Specific Account Debtors
Percentage of Total
Account Debtor Eligible Accounts
-------------- -----------------
Big River Zinc Corp. 15%
Xxxxxxx Controls, Inc. 20% *
East Penn Mfg. Co., Inc. 15%
Yuasa Exide Corp. 20%
----------
* For September and October of any year, may be 30%
SCHEDULE 1.39
TO
LOAN AND SECURITY AGREEMENT
Existing Letters of Credit
Doe Run Outstanding Letters of Credit
===============================================================================
L/C# Dated Opened Amount Reason Beneficiary
-------------------------------------------------------------------------------
P13991 June 14, 1996 $250,000.00 Bonded Warehouse American
(Surety Bond Motorist
security) Insurance
-------------------------------------------------------------------------------
P1512 April 25, 1996 $2,868,012.00 Financial Mercantile Bank/
Assurance Missouri Dept.
of Nat. Res.
-------------------------------------------------------------------------------
P15522 May 9, 1995 $72,808.00 General Insurance
Liability Company of N.
Insurance America
-------------------------------------------------------------------------------
P17382 August 29, 1996 $1,000,000.00 Workers Comp. DRC Insurance
Company of N.
America
-------------------------------------------------------------------------------
P17384 August 29, 1996 $57,000.00 Auto Liability Indemnity
(Old Policy) Insurance of N.
America
-------------------------------------------------------------------------------
P17383 August 29, 1996 $33,000.00 Workers Comp. LS Indemnity
Insurance of N.
America
-------------------------------------------------------------------------------
P14568 December 2, 1994 $300,000.00 Auto Liability National
Insurance (New Casualty
Policy) Insurance
===============================================================================
SCHEDULE 1.5
TO
LOAN AND SECURITY AGREEMENT
Banco de Credito Agreements
1. The Contract for a Loan in Foreign Currency by and between Banco de
Credito Overseas Ltd. and Doe Run Mining S.R. Ltda., dated as of March 12, 1998.
2. The Special Term Deposit Contract between Banco de Credito Overseas
Ltd. and The Doe Run Resources Corporation dated as of March 12, 1998.
3. The Promissory Note by Doe Run Mining S.R. Ltda. in favor of Banco de
Credito Overseas Ltd. dated as of March 12, 1998.
SCHEDULE 1.83
TO
LOAN AND SECURITY AGREEMENT
List of Intercompany Service Agreements
1. The United States Services Agreement dated as of March 12, 1998 between
The Doe Run Resources Corporation and Doe Run Mining S.R. Ltda.
2. The Technology Assistance Agreement dated as of March 12, 1998 between
The Doe Run Resources Corporation and Doe Run Mining S.R. Ltda.
3. The Professional Services Agreement dated as of March 12, 1998 between
The Doe Run Resources Corporation and Doe Run Mining S.R. Ltda.
4. The Technical, Managerial and Professional Services Agreement dated as
of March 12, 1998 between The Doe Run Resources Corporation and Doe Run Mining
S.R. Ltda.
5. The Sales Agency Agreement dated as of March 12, 1998 between Doe Run
Peru S.R. Ltda. and Doe Run Mining S.R. Ltda.
6. The Technical, Managerial and Professional Services Agreement dated as
of March 12, 1998 between Doe Run Peru S.R. Ltda. and Doe Run Mining S.R. Ltda.
7. The International Sales Agency Agreement dated as of March 12, 1998
between Doe Run Peru S.R. Ltda. and The Doe Run Resources Corporation.
SCHEDULE 5.1(a)
TO
LOAN AND SECURITY AGREEMENT
Jurisdictions of Qualification
A. The Doe Run Resources Corporation
California
Louisiana
Minnesota
Missouri
New York
Pennsylvania
Tennessee
Wyoming
B. Fabricated Products, Inc.
Arizona
California
Delaware
Louisiana
Missouri
Texas
Washington
SCHEDULE 5.1(b)
TO
LOAN AND SECURITY AGREEMENT
Subsidiaries
Parent's %
Company Parent Ownership
------- ------ ---------
1. DR Acquisition Corp., Renco Group 100%
a Missouri corporation ("DRA")
2. The Doe Run Resources Corporation, DRA 100%
a New York corporation ("Doe Run")
3. Fabricated Products, Inc., Doe Run 100%
a Delaware corporation
4. Doe Run Exploration X.X. Xxx Run 100%
(Proprietary) Ltd. (South Africa)
5. Doe Run Cayman Ltd., Doe Run 100%
a Cayman Islands corporation ("Cayman")
6. Doe Run Mining S.R. Ltda., Cayman 99.9%
a Peruvian company ("DRM")
7. Doe Run Peru S.R. Ltda., DRM 99.9%
a Peruvian company ("DRPeru")
SCHEDULE 5.10
TO
LOAN AND SECURITY AGREEMENT
Pending Litigation and Environmental Claims
Litigation
a. Lead Exposure
Xxxxxx x. Xxx Run Corporation, et al
Superior Court, Xxxxxx County, New Jersey, Case No.
Xxxxx et xx x. The Xxx Run Resources Corporation, et al
Circuit Court, Hillsboro, Missouri, Case No. CV195-51, as more
particularly described on Attachment A hereto.
Xxxxxxxxxx, et al v. The Doe Run Resources Corporation, et al
Circuit Court, Hillsboro, Missouri, Case No. CV195-5492-CC, as more
particularly described on Attachment A hereto.
Heath et al v. The Doe Run Resources Corporation, et al
Circuit Court, Hillsboro, Missouri, Case No. CV195-6936-CC, as more
particularly described on Attachment A hereto.
Massa, et al v. The Doe Run Resources Corporation, et al
Circuit Court, Hillsboro, Missouri, Case No. CV195-7290-CC, as more
particularly described on Attachment A hereto.
Xxxxxx, et xx x. Lendco Investments, Inc., et al
Circuit Court, Hillsboro, Missouri, Case No. CV196-3569
Xxxxxx, et al v. Lead Industries Association, et al
Circuit Court, Baltimore, Maryland Case No. 94363042/CL190488 and
Case No. 94363043/CL190488
(case dismissed - on appeal)
b. Wrongful Termination
Xxxxxxx x. The Xxx Run resources Corporation, et al
Circuit Court, Jefferson County, Case No. CV195-7303-CC
c. Declaratory Relief
St. Xxx Minerals Corporation v. Allianz Insurance Company, et al
Orange County Superior Court, California Case No. 697526
(suit for coverage for superfund sites)
d. Personal injury
Xxxxx v. The Doe Run Resources Corporation, et al
Superior Court, California, County of Nevada, Case No. 56974
e. Bankruptcy - Creditor's Claims
Doe Run Claim against Eagle-Picher Industries, Inc.
f. Tax
United States of America, v. St. Xxx Minerals Corporation*
U.S.D.C. Eastern District, Missouri, Case No. 4:93CV001380
g. Environmental
Amoco Chemical Company v. United States of America, et al
U.S. District Court, South District Texas, Case No. G-76-272
RSR Corporation & Quementco, Inc. et al
Avanti Development, Inc., et al,
U.S. District Court, South District Indiana, Case No. IP95-1359CM/S
Xxxxxxx Development Company v. Mo. Electric Works, Inc., et al
Circuit Court, Cape Girardeau, Case no. CV696-438CC
Non-Lead Business
Xxxxxx, Baker, Beane, et al v. R. T. Vanderbilt Company, Inc.,
Gouvemeur Talc Company, Inc., St. Xxx Minerals Corporation and Fluor
Corporation*
New York Supreme Court, St. Xxxxxxxx County, New York
St. Xxx Minerals Corporation v. Allianz Insurance Company, et al
Orange County Superior Court, California Case No. 697526
This is a suit to establish insurance coverage for the company's
superfund liabilities for historic mine and smelter operations.
There is a judgment in favor of St. Xxx establishing a duty to
defend, which judgment is on appeal. Coverage under the policies has
not yet been heard.
h. Notice of Potential Claims
Xxxxxx X. Xxxx - Notice letter for personal injury on company
property.
Xxxxxx X. Xxxxxxx - Notice letter for personal injury on company
property.
Burlington Northern - Notice letter for contribution to remediation
of Railroad property.
-2-
Government Environmental Proceedings/Claims
a. Listed Superfund Sites
Cherokee County Site, Kansas
Jasper County Site, Missouri
Tar Creek Site, Oklahoma
Missouri Electric Works/Cape Girardeau Site, Missouri
Desloge/Big River Mines Site, St. Francois County, Missouri
(negotiated remediation plan in progress)
b. Non-Listed Potential Superfund Sites
Bonne Terre Site, St. Francois County, Missouri (engineering plans
under development)
Leadwood Site, St. Francois County, Missouri (future action)
Rivermines Site, St. Francois County, Missouri (future action)
Indian Creek Site, Washington County, Missouri (possible future
action)
National Site, St. Francois County, Missouri (request to develop
engineering plans)
St. Francois County, Missouri remedial investigation of potential
off-sit contamination.
Federal Site, St. Francois County, Missouri (study underway)
Block "P" Site, Montana
Nacimiento Copper Mine Site, New Mexico*
c. Potential Claims
Bunker Hill Superfund Site
Pintiar Corp. has made a demand by letter for cost Recovery. St. Xxx
declined participation on "product sale" basis. EPA issued
information request letter - issued subsequent letter declining to
join St. Xxx.
-3-
Port of Pascagoula, Miss. Lead Storage/Port
Fluor Corporation was incorrectly contacted as a PRP. St. Xxx
shipped a small amount of lead to this site, but it has not been
pursued by the state.
d. Stormwater/Dam Safety, Projects
Indian Creek Tailings Dam
Leadwood/Xxxxx Tailings Dam
Rivermines Tailings Area
e. Settled/Closed/Inactive Sites
Harbor Island Superfund Site
Quemetco, Inc., a dissolved former wholly owned subsidiary of St.
Xxx, was a previous owner of the site.
Iiada Energy Superfund Site
EPA claim relates to time period when Amax owned/operated Buick
facility. Claim was forwarded to Amax for handling.
ILCO Superfund Site
Doe Run was a de minimis provider of product.
NL Industries, Inc. Superfund Site
Doe Run was a de minimis provider of product.
Taracorp/Granite City Superfund Site
St. Xxx is a PRP; de minimis settlement reached.
f. Non-Lead Superfund Sites
Bartlesville/Xxxxxx/Monaca*
Zinc mining and smelting sites. Flour gave environmental
indemnification to buyer when Zinc business was sold in 1987.
-4-
Employment Claims
a. Workers Compensation
Southeast Missouri Mining/Milling
As of February 1998, there were approximately 60 open files.
Herculaneum
As of February 1998, there were approximately 400 open files.
St. Xxx - Xxxxxx/Bartlesville/Monaca*
As of February 1998, there are approximately 380 open files.
b. EEOC/Missouri Commission on Human Rights
Xxxxxx v. The Doe Run Company, et al, Charge No. 280971177
Freeman v. The Doe Run Company
Charte No. ME-9/91-9645
*Covered by Fluor indemnification to St. Xxx
-5-
SCHEDULE 5.13
TO
LOAN AND SECURITY AGREEMENT
Pension Plans
1. The Doe Run Resources Corporation Supplemental Employee Retirement Plan
effective as of November 1, 1996, as the same has been and may be amended from
time to time.
2. The Doe Run Resources Company Savings Resource Plan effective as of November
1, 1996, as the same has been and may be amended from time to time.
3. The Doe Run Resources Corporation Retirement Plan, Benefits for Salaried
Employees effective as of June 1, 1994, as the same has been and may be amended
from time to time.
4. The Doe Run Resources Corporation Retirement Plan, Benefits for Employees in
Southeast Missouri effective as of June 1, 1994, as the same has been and may be
amended from time to time.
5. The Doe Run Resources Corporation Retirement Plan, Benefits for Employees at
Herculaneum effective as of June 1, 1994, as the same has been and may be
amended from time to time.
SCHEDULE 5.14
TO
LOAN AND SECURITY AGREEMENT
Environmental Matters
1. Matters with respect to The Doe Run Resources Corporation set forth in the
"Environmental Assessment of the La Oroya Metallurgical Complex and The
Doe Run Company" dated October 1997 prepared for BT Securities Corporation
by Environ International Corporation, a division of APBI's Environmental
Sciences Group, Inc.
2. Matters disclosed on Schedule 5.10 hereto.
3. All active and inactive mine and smelter sites are on the Environmental
Protection Agency CERCLA list. Information requested and submitted on old
Viburnum tailings facility.
4. Primary smelter slag produced by and stored at the Herculaneum smelter is
currently exempt from hazardous waste regulation under the Resource
Conservation and Recovery Act of 1973, as amended ("RCRA"). However, the
Environmental Protection Agency recently published a proposed rule which,
if adopted, would require this slag to be managed as a hazardous waste.
Certain other waste materials, including baghouse dust, generated at the
smelter now recycled in the smelter may also become regulated as hazardous
wastes. If the slag or other wastes at the smelter are regulated as
hazardous waste, the Company may be required to take corrective action
under RCRA at the smelter, as well as to adopt stricter management
practices for these wastes.
5. The Herculaneum smelter, currently has not attained the ambient air
quality standard for lead promulgated under the federal Clean Air Act. The
Company is working with regulators to develop a new three-year compliance
plan to begin after fiscal 1998 to implement identified control measures.
6. The Buick smelter area is designated non-attainment for the air lead
standard. The last 5 years of monitoring demonstrates the smelter is in
compliance and an application has been made to certify the area in
compliance.
7. Doe Run's recycling facility is subject to corrective action requirements
under RCRA, as a result of a storage permit for certain wastes issued in
1989. This has required and may involve future remediation of solid waste
management units at the site.
8. The Environmental Protection Agency is reviewing Maximum Achievable
Control Technology ("MACT") for primary smelters but has not at this time
proposed a MACT rule. In the event a MACT rule for primary smelters is
proposed and adopted by the Environmental Protection Agency, the rule
could increase compliance costs at the Herculaneum smelter.
9. The Company's operating facilities have waste water discharge permits
issued under the federal Clean Water Act, as amended. It is expected that
stricter discharge limits than previously in effect will be included in
permits now subject to renewal. As a result, there will be additional
treatment facilities required.
10. The Company's mining and milling operations include five mine waste
disposal facilities that are subject to Missouri mine closure permit
requirements.
11. The Missouri Department of Natural Resources ("MDNR") by letter dated
April 11, 1997 issued Notice of Excess Emissions observed on August 1,
1997, at the Herculaneum smelter. After response in writing by Doe Run,
MDNR issued a letter dated September 12, 1997 that they will not take
additional action.
12. The MDNR issued an air inspection report dated May 13, 1997 of potential
Notice of Excess Emissions of an opacity excursion at the Buick facility.
After response by Doe Run, an MDNR official gave verbal response that MDNR
will probably not issue a NOEE.
13. The NDNR, by letter of February 4, 1997, noticed exceedences of water
discharge limits for zinc at the Buick Mine/mill facility. A compliance
agreement was entered into in May, 1997, whereby Doe Run paid a $25,000
penalty and constructed a pump-back basin. Compliance with the zinc
discharge limit was demonstrated within 30 days of construction as
required in the agreement.
-2-
SCHEDULE 5.15
TO
LOAN AND SECURITY AGREEMENT
Bank Accounts
BANK ACCOUNT NUMBER TITLE/DESCRIPTION
---- -------------- -----------------
Xxxxxxx'x 10-0101186361 Doe Run Concentration Account
Xxxxxxx'x 10-0101273991 Fabricated Products-Payroll
Account (for direct deposit)
Xxxxxxx'x 10-0100012415 Doe Run Hourly Payroll Account
Xxxxxxx'x 10-0101255072 Doe Run Salary Payroll Account
Xxxxxxx'x 10-0101234378 DR Acquisition Corp.
Xxxxxxx'x 10-0101267233 Fabricated Products Inc. Corp.
Account
Xxxxxxx'x 58-0100090603 Doe Run Disbursement
Account/Smelting
58-0100090638 Doe Run Disbursement
Account/Mining
58-0100090611 Doe Run Disbursement
Account/Hdqtrs.
58-0100090654 Doe Run Disbursement Account/Buick
58-0100082163 Doe Run Disbursement Account/Lone
Star
58-0100083402 Disbursement Account/Seafab Metals
Xxxxxxx'x 35-0119027465 Doe Run/Herculaneum Payroll
Account
Mercantile Bank 1001107919 Doe Run Lockbox 95619
1001109790 Doe Run Lockbox returns account
FX account
Texas Commerce 00100915850 Lone Star Lead-Payroll Account
Seafirst Bank 00000000 Seafab Metals payroll account-WA
Bank of America 2552260249 Seafab Metals payroll account-AZ
Quad State Bank 0133634701 Doe Run Real Estate Account
(Options)
0133675801 Doe Run Savings Bond Account
Standard Bank of South 000-000-000 DR Exploration Pty. Ltd.
Africa
First National Bank of 1000013625 DR Exploration Field Expenses
South Africa-Griguantown (imprest)
SCHEDULE 5.21
TO
LOAN AND SECURITY AGREEMENT
Collective Bargaining Agreements
1. The Doe Run Resources Corporation: None
2. Fabricated Products, Inc.: Agreement by and between Fabricated
Products, Inc. and Sheet Metal Workers'
Union, Local No. 66, dated June 6, 1997.
The Agreement is in effect from
September 1, 1996 through December 31,
1997 and continues in full force and
effect from year to year thereafter,
until a minimum 60 days written notice
of intent to terminate. No notice of
termination has been sent or received as
of March 6, 1998.
SCHEDULE 5.22
TO
LOAN AND SECURITY AGREEMENT
Corporate Name; Tradenames;
Prior Transactions
1. The Doe Run Resources Corporate
a) Tradename: The Doe Run Company
b) Prior Transactions: None
2. Fabricated Products, Inc.
a) Tradenames: Seafab Metals Company
Fab Division
Oxide Division
Lone Star Lead Construction
b) Prior Transactions:
Acquisition of all of capital stock of Seafab Metal Corporation, a
Washington Corporation pursuant to Asset Purchase Agreement, dated
August 30, 1996, by and among Seafab Metal Corporation, Xxxx X.
Xxxxxx, Xxxxxx X. Xxxxxxx and Fabricated Products, Inc.
Acquisition of all of assets of Lone Star Lead Construction Corp., a
New York Corporation, pursuant to the Asset Purchase Agreement,
dated as of August 31, 1995, by and among Lone Star Lead
Construction Corp., ASARCO Incorporated, and the Doe Run Resources
Corporation.
3. Doe Run Peru S.R. Ltda.
a) Tradename: Doe Run Peru
b) Prior Transactions:
Acquisition of substantially all of capital stock of Empresa
Metalurgica La Oroya S.A. ("Metaloroya") from Empresa Minera del
Centro del Peru S.A., a Peruvian government-owned conglomerate. On
December 30, 1997, Metaloroya was merged into Doe Run Peru.
SCHEDULE 5.24
TO
LOAN AND SECURITY AGREEMENT
Material Contracts
XXXXXXX CONTROLS/DOE RUN
TOLL CONVERSION AGREEMENT - LEAD ACID BATTERIES
OCTOBER 17, 1996-SEPTEMBER 30, 1999
BIG RIVER ZINC/DOE RUN
SALES AGREEMENT - ZINC CONCENTRATES
ORIGINAL TERM - JULY 1, 1996-DECEMBER 31, 1997
EVERGREEN RENEWED IN TWO-YEAR PERIODS UNLESS CANCELLED -
PRESENTLY RENEWED TO DECEMBER 31, 1999
XXXXXXX CONTROLS/FABRICATED PRODUCTS (SEAFAB DIVISION)
SALES AGREEMENT - LEAD OXIDE
NOVEMBER 1, 1996-OCTOBER 31, 2002
THE PURCHASE AGREEMENT AND RELATED FINANCING AGREEMENTS PURSUANT TO WHICH DOE
RUN WILL PURCHASE A HELICOPTER, AS MORE PARTICULARLY DESCRIBED ON SCHEDULE 6.5,
THE AGREEMENT PURSUANT TO WHICH DOE RUN SELLS SUCH HELICOPTER TO DOE RUN PERU
AND ANY GUARANTY BY DOE RUN OF DOE RUN PERU IN CONNECTION WITH THE FOREGOING
TRANSACTION.
SCHEDULE 5.3
TO
LOAN AND SECURITY AGREEMENT
List of Senior Note Agreements
1. Fixed Interest Senior Notes due 2005, Series A, issued by The Doe Run
Resources Corporation on March 12, 1998, in the original principal amount of
$200,000,000.
2. Floating Interest Senior Notes due 2003, Series A, issued by The Doe Run
Resources Corporation on March 12, 1998, in the original principal amount of
$55,000,000.
3. The Indenture by and among The Doe Run Resources Corporation, Fabricated
Products, Inc., Doe Run Cayman Ltd., Doe Run Mining S.R. Ltda., and Doe Run Peru
S.R., Ltda., and State Street Bank and Trust Company, as Trustee, dated as of
March 12, 1998, with respect to the Senior Notes due 2005 in the original
principal amount of $180,000,000 and Senior Notes due 2003 in the original
principal amount of $75,000,000.
4. Purchase Agreement dated as of March 6, 1998 by and among The Doe Run
Resources Corporation, Fabricated Products, Inc., Doe Run Cayman Ltd., Doe Run
Mining S.R. Ltda., and BT Alex, Xxxxx Incorporated, Xxxxxxxxx, Lufkin & Xxxxxxxx
Corporation and UBS Securities, LLC.
5. Registration Rights Agreement dated as of March 12, 1998, by and among The
Doe Run Resources Corporation, Fabricated Products, Inc., Doe Run Cayman Ltd.,
Doe Run Mining S.R. Ltda., and BT Alex, Xxxxx Incorporated, Xxxxxxxxx, Lufkin &
Xxxxxxxx Corporation and UBS Securities, LLC.
6. Each of the Guaranties of Fixed Interest Rate Senior Notes and the Floating
Interest Senior Notes by Fabricated Products, Inc., Doe Run Cayman Ltd., and Doe
Run Mining S.R. Ltda.
SCHEDULE 5.5
TO
LOAN AND SECURITY AGREEMENT
Permits
a. Bureau of Land Management Development Contracts
(Contracts for mining government mineral leases)
BUICK DEVELOPMENT CONTRACT
Buick Mine/Mill
Seven producing and five inactive leases
VIBURNUM DEVELOPMENT CONTRACT
Xx. 00 (Xxxxxxxx), Xx. 00 and No. 35 (Xxxxxxx) Mines serving
the Viburnum Mill
Four producing and seven inactive leases
XXXXXXXX DEVELOPMENT CONTRACT
Xxxxxxxx Mine/Mill
Two producing and two inactive leases
BRUSHY CREEK DEVELOPMENT CONTRACT
Brushy Creek Mine/Mill
Two producing and one inactive lease
b. Environmental permits
WATER PERMITS
Mine/Mill operations - five permits Herculaneum smelter - one
permit
Buick recycling facility - one permit
Fabricated Products, Xxxxxxxx Division - one permit
Seafab Division - one permit
MISSOURI METALLIC MINERAL WASTE MANAGEMENT PERMITS Mine/Mill
operations - four permits Smelter Operations - two permits
RCRA (Hazardous Waste) PERMITS
Buick Recycling Facility - Part B Storage Permit
Every operating facility has a Generator's I.D. Number
MISSOURI DAM SAFETY PERMITS
No. 29 Mine Ore Haul Road-North (Xxxxx Xxxx Dam)
Viburnum City Lake Dam
Old Viburnum Tailings Dam
New Viburnum Tailings Dam
Bushy Creek Mill Reservoir Dam
Buick Tailings Dam
Buick Clear Water Dam
Railroad Embankment Dam
No. 27 Culvert Dam
Xxxxxxxx Tailings Dam
Xxxxxxxx Clarification Dam
Brushy Creek Tailings Dam
Brushy Creek Clarification Dam
Viburnum No. 35 West Dam (pending)
Xxxxxxxx Xx. 00 Xxxx Xxx
Xxxxxxxx Tailings Dam
Indian Creek Mine Lower Dam (pending)
Indian Creek Mine Upper Dam (pending)
Xxxxx Tailings Dam
STORMWATER PERMITS
The following closed tailings facilities:
Leadwood
Rivermines
Indian Creek
MISSOURI RESOURCE RECYCLING PERMIT
Herculaneum smelter
Buick recycling facility
AIR PERMITS
Fabricated Products,
Seafab Division - Seattle - operating permit
Casa Grande - construction permit
Vancouver Washington - construction permit
-2-
SCHEDULE 5.7
TO
LOAN AND SECURITY AGREEMENT
Chief Executive Office, Principal Place of Business, and Equipment
A. The Doe Run Resources Corporation
1. Chief Executive Office: 0000 Xxxx 000 Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
2. Principal Place of Business: 0000 Xxxx 000 Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
3. Equipment:
Mines in the following areas (leased and owned)
County State
------ -----
Niobrara County Wyoming
Xxxxxxxxx County Missouri
Camden County Missouri
Xxxxxxxx County Missouri
Dent County Missouri
Iron County Missouri
Jefferson County Missouri
Madison County Missouri
Oregon County Missouri
Perry County Missouri
Xxxxxxxx County Missouri
Xxxxxxx County Missouri
St. Xxxxxxx County Missouri
Washington County Missouri
Xxxxxxx County Tennessee
4. Inventory:
Mines in the following areas (leased and owned)
County State
------ -----
Niobrara County Wyoming
Xxxxxxx County Tennessee
Xxxxxxxxx County Missouri
Camden County Missouri
Xxxxxxxx County Missouri
Dent County Missouri
Iron County Missouri
Jefferson County Missouri
Madison County Missouri
Oregon County Missouri
Perry County Missouri
Xxxxxxxx County Missouri
Xxxxxxx County Missouri
St. Xxxxxxx County Missouri
Washington County Missouri
5. Consigned Inventory Locations:
C&D Power Systems, Inc.
000 Xxxx Xxxx Xxxxxx, Xxxxxx, Xxx. 00000
0000 Xxxxxxxxxx Xxxx., Xxxxxxx, XX 00000
00 Xxxx Xxxx Xxxxxx, Xxxxx, XX 00000
Xxxxx Xx. 000, Xxxxxxxx, XX 00000
Xxxxxxx Controls Inc.
000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxx, XX 00000
0000 Xxxx Xxxxxx, XX. Xxxxxx, XX 00000
00000 Xxxxxxxxxx Xxxx, Xxxxxxx, Xxxx 00000
Xxx Xxxxxxxxxx Xx., Xxxxxxx-Xxxxx, XX 00000
x/x Xxxxxxxx, Xxxxx Xxx. 00, Xxxxxx XX 00000
c/o Water Gremlin, 0000 Xxxxxxxx Xxx., Xxxxx Xxxx Xxxx, XX
00000
Yuasu Exide Corp.
Xxx Xxxxx Xxxx, Xxxx, Xxxxxx 00000
Xxxx Corporation
000 Xxxxxxxx Xxxxxx, X. Xxxxx, XX 00000
-2-
6. Warehouse Locations:
The Doe Run Company
Herculaneum Smelter (Owned)
000 Xxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
The Doe Run Company
Buick Resource, Recycling Facility (Owned),
XX 0 Xxx 0000, Xxxx, XX 00000
Xxxxxx Underground (3rd Party)
0000 Xxxxxx Xxxx, Xx. Xxxxx, XX 00000
7. The location of cash proceeds and inventory in transit is indeterminate
and cannot be specified at this time.
B. Fabricated Products, Inc.
1. Chief Executive Office: 0000 Xxxx 000 Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
2. Warehouse Locations:
Alamac Transportation
00000 Xxxx Xxxxx Xxx, Xxxxxxxx Xxxxxxx, XX 00000
Seafab Metals Company, a division of Fabricated Products, Inc.
0000 00xx Xxxxxx, X.X., Xxxxxxx, XX 00000
Fab Division of Fabricated Products, Inc.
0000 XXX Xxxx., Xxxx Xxxxxx, XX 00000
Oxide Division of Fabricated Products, Inc.
0000 X.X. Xxxxx Xxxxx Xx., Xxx. 2575, X.X. Xxx 0000,
Xxxxxxxxx, XX 00000
Lone Star Lead Construction, a division of Fabricated Products, Inc.
0000 Xxxxxx Xxxxxx Xxxx, Xxxxxxx, XX 00000
3 The location of cash proceeds and inventory in transit is indeterminate
and cannot be specified at this time.
-3-
SCHEDULE 5.8
TO
LOAN AND SECURITY AGREEMENT
Existing Liens
THE DOE RUN RESOURCES CORPORATION
I. UCC Filings in Missouri
A. Secretary of State, Missouri
Number Date Secured Party Description of Collateral
1. 2559042 07/05/95 Associates One (1) Xxxxxxxxx Xxxx Model
Leasing XP750WCU Air Compressor S/N
Incorporated 246099 together with all
Suite 250 present 00000 Xxxxxxx xxx
Xxxxxxxx Xxxx, XX future attachments, Rd.,
67212 accessories, replacement parts,
repairs, additions and all
proceeds thereof.
2. 2595395 10/24/95 Associates Leasing One (1) Moxy Model MT30S
Incorporated Articulated Truck S/N 352076
00000 Xxxxxxx Xx., together with all present and
Xxxxx 000 xxxxxx xxxxxxxxxxx,
Xxxxxxxx Xxxx, XX accessories, replacement parts,
67212 repairs, additions and all
proceeds thereof.
3. 2694214 08/06/96 Xxxxxx Machinery One (1) Xxxxxxxxx-Xxxx Model
Company HP1300AWC Portable Air
000 X. Xxxxxxx Xxxx. Compressor s/n:247988 together
Springfield, IL with all present and future
62702 attachments, accessories,
replacement parts, additions,
and all proceeds thereof.
4. 2731179 11/25/96 Xxxxxx Machinery One (1) Moxy Model MT30 30 Ton
Company 0 Xxxxx Xxxxx Xxxxxxxxxxx Xxxxx
0000 Xxxxx Xxxxxxxxx S/N: 353215 together with all
Blvd. present and future attachments,
Xxxxxxxxx, XX 00000 accessories, replacement parts,
additions, and all proceeds
thereof.
5. 2488415 12/30/94 Caterpillar Financial (1) Caterpillar Model 980F
Services Corporation Wheel Loader S/N:8JN00319. and
000 Xxxxxxxxxxx Xxxx substitutions, replacements,
#304 additions, and accessions
Xxxxx, XX 00000-0000 thereto, now owned or hereafter
acquired, and proceeds thereof.
6. 2728643 11/26/96 Caterpillar Financial 1 - Used Caterpillar 980F Wheel
Services Corporation Loader S/N 8CJ00460 "and
000 Xxxxxxxxxxx Xxxx substitutions, replacements,
#304 additions and accessions
Xxxxx, XX 00000 thereto, now owned or hereafter
acquired and proceeds thereof.
7. 2768235 03/18/97 Caterpillar Financial (1) Used 920 Caterpillar Wheel
Services Corporation Loader S/N: 62K05665 and
000 Xxxxxxxxxxx Xxxx substitutions, replacements,
#304 additions, and accessions
Xxxxx, XX 00000 thereto, now owned or hereafter
acquired, and proceeds thereof.
Equipment location: Buick Mine,
Xxxxxxxx, XX 00000, Iron County
8. 2768237 03/18/97 Caterpillar Financial (1) Used 950B Caterpillar Wheel
Services Corporation Loader S/N: 31R00918 and
000 Xxxxxxxxxxx Xxxx substitutions, replacements,
#304 additions, and accessions
Xxxxx, XX 00000 thereto, now owned or hereafter
acquired, and proceeds thereof.
Equipment Location: Buick Mine,
Xxxxxxxx, XX 00000 Iron County
9. 2768238 03/18/97 Caterpillar Financial (1) Used 930 Caterpillar Wheel
Services Corporation Loader S/N: 41K07081 and
000 Xxxxxxxxxxx Xxxx substitutions, replacements,
#304 additions, and accessions
Xxxxx, XX 00000 thereto, now owned or hereafter
acquired, and proceeds thereof.
Equipment Location: Xxxxxx
Xxxxx Xxxx, Xxxx, XX 00000 Dent
County
10. 2768236 03/18/97 Caterpillar Financial (1) Used 930 Caterpillar Wheel
Services Corporation Loader S/N: 71H02832 and
000 Xxxxxxxxxxx Xxxx substitutions, replacements,
#304 additions, and accessions
Xxxxx, XX 00000 thereto, now owned or hereafter
acquired, and proceeds thereof.
Equipment Location: Xxxxxx
Xxxxx Xxxx, Xxxx, XX 00000 Dent
County
11. 2501179 01/30/95 Clarklift of Cape, 1- GC30S Daewoo Forklift - S/N
Inc. 06-01400 W/ Fork Positioner
P.O. Box 752 1- G30S Daewoo Forklift - S/N
Cape Girardeau, MO 12-01176 W/ Fork Rotator
63702-0752 1- G30S Daewoo Forklift - S/N
12-01177 W/ Fork Rotator
1- G30S Daewoo Forklift - S/N
12-01178 W/ Drum Clamp
12. 2515102 03/06/95 Xxxxx Credit Four Daewoo Forklift model
Corporation GC30S s/n 06-01400; model G30S
000 Xxxxxx Xxxxx X/X 00-00000, 00-00000
Xxxxxxxx, XX00000- & 12-01178
1395 Assigned to: Clarklift of Cape,
CAP114 K#472715-8 Inc., XXXxx 000, Xxxx
Xxxxxxxxx, XX 00000-0000
2
13. 2505000 02/10/95 Lessor(s) 2 - 1995 Bobcat Loaders, S/N
Clarklift Of Cape, 512719000 & 512719001
Inc. X. Xxxx. Tires, Boss
X.X. Xxx 000 Aux. Hyd. & Bucket
Xxxx Xxxxxxxxx, XX
00000-0000
14. 2698940 08/22/96 Metlife Capital, Proceeds of collateral also
Limited covered. This is a true lease
Partnership filed for public record.
00000 XX 0xx Xx. 1033695-006,007 MM/KRD
Xxxxx 000
Xxxxxxxx, XX 00000 One used Xxxxxx ST-8B Loader
DA15P0399 to be located at the
Buick Mine, Route KK, City of
Boss, State of Missouri, One
used Volvo L180C Wheel Loader
s/n L180CV60325 to be located
at the #28 Mine, City of
Viburnum, State of Missouri,
together with all accessions,
attachments and additions
thereto and substitutions and
replacement thereof.
15. 2594653 10/20/95 MetLife Capital Proceeds of Collateral also
Limited Partnership covered.
00000 XX 0xx Xx.
Xxxxx 000 THIS IS A TRUE LEASE FILED FOR
Xxxxxxxx, XX 00000 PUBLIC RECORD. 1033695--
VAR/MM/PJR
One (1) new Komatsu PC3000LC-5
Crawler Excavator, serial no.
A30252, One (1) new Caterpillar
Model D6HLGP Tractor, serial
no. 3YG06216 with Engine,
serial no. 8Z86847 and Dozer,
serial no. 1AH01978, and Three
(3) Moxy MT30 Articulated Dump
Trucks, serial nos. 353328,
353138 and 353327, together
with all accessions,
attachments and additions
thereto and substitutions and
replacements thereof.
16. 2728220 11/25/96 MetLife Capital, Two (2) Moxy Model MT30X 30 Ton
Limited Partnership Six Wheel Drive Articulated
00000 XX 0xx Xxxxxx Trucks with Tailgates, S/N's
Suite 500 353565, 353566 together with
Xxxxxxxx, XX 00000 all accessions, attachments and
additions thereto and
replacements and substitutions
thereof. Proceeds of collateral
also covered. This is a true
lease filed for public record.
1033695-008/MM/KRD
3
17. 2759029 02/21/97 MetLife Capital, One (1) used Xxxxxx ST-8B 4
Limited Partnership Wheel Drive Scooptram Loader
00000 XX 0xx Xxxxxx XX00X0000 together with all
Suite 500 accessions, attachments and
Xxxxxxxx, XX 00000 additions thereto and
replacements thereof. This is a
true lease filed for public
record. 1033695-009
MM/KRD/Secretary Of State MO.
Proceeds of collateral also
covered.
18. 2729241 11/25/96 Lessor(s) 1 - Daewoo Forklift Model G30S
Forklifts Of Cape, w/ S/N 12-04808 Side Shifting
Inc. Fork Positioner. This financing
X.X. Xxx 000 statement was filed for
Cape Girardeau, MO information purposes only and
63702-0752 was intended to protect the
rights of lessor in the
collateral described above. The
transaction between the parties
is a lease and not a secured
transaction.
19. 2735886 12/11/96 Lessor(s) 1 - 1996 Xxxxxxx Forklift Model
Forklifts Of Cape, SD-100 S/N 28586111032-4 w/
Inc. Grapple Attachment. This
X.X. Xxx 000 financing statement was filed
Cape Girardeau, MO for information purposes only
63702-0752 and was intended to protect the
right of lessor in the
collateral described. The
transaction between the parties
is a lease and not a secured
transaction.
20. 2747676 01/21/97 Lessor(s) 3 - Daewoo Forklifts Model G30S
Forklifts Of Cape, S/N 12-05345 12-05346,
Inc. 12-05347. This financing
X.X. Xxx 000 statement was filed for
Cape Girardeau, MO information purposes only and
63702-0752 was intended to protect the
right of lessor in the
collateral described above. The
transaction between the parties
is a lease and not a secured
transaction.
21. 2755542 02/10/97 Lessor(s) 1 - Daewoo Forklift Model G30S
Forklifts Of Cape, S/N 06-04034 w/ 117" Std.
Inc. Upright. This financing
X.X. Xxx 000 statement was filed for
Cape Girardeau, MO information purposes only and
63702-0752 was intended to protect the
right of lessor in the
collateral described above. The
transaction between the parties
is a lease and not a secured
transaction.
22. 2652440 04/08/96 Forklifts Of Cape, 2 G30S Daewoo Forklifts S/N's
Inc. 12-03970 & 12-03990 w/ fork
X.X. Xxx 000 xxxxxxxx
Xxxx Xxxxxxxxx, XX
00000-0000 1 GC30S Daewoo Forklift S/N
06-02937 w/ fork positioner
4
23. 2779658 04/16/97 Lessor(s) 1 - 1997 Xxxxxxx Forklift Model
Forklifts Of Cape, SG-60 S/N 2969703652-4. This
Inc. financing statement was filed
X.X. Xxx 000 for information purposes only
Cape Girardeau, MO and was intended to protect the
63702-0752 rights of lessor in the
collateral described. The
transaction between the parties
is a lease and not a secured
transaction.
24. 2815961 07/29/97 Lessor(s) 1 - Daewoo Forklift Model G30S
Forklifts Of Cape, s/n 12-06356 w/ fork positioner
Inc. attachment. This financing
X.X. Xxx 000 statement was filed for
Cape Girardeau, MO information purposes only and
63702-0752 was intended to protect the
right of Lessor in the
collateral described above. The
transaction between the parties
is a lease and not a secured
transaction.
25. 2436986 08/03/94 Lessor One (1) Moxy Model MT30S, 30
The CIT ton articulated off-road truck
Group/Equipment s/n 352065 with 6 wheeldrive,
Financing, Inc. Scandia D8905, 254 h.p. engine;
0000 Xxxxxx Xxxx enclosed cab and air
Lane conditioning
Xxxxxx, XX 00000
26. 2513111 03/06/95 Lessor(s) 1 - 1994 Bobcat Loader S/N
Xxxxx Rental 512212699 w/Flot. tires, boss,
System, Inc. aux. hyd. 66" Ind. Grapple -
500 Circle Drive 66" L.P. Bucket. Pallet forks
Xxxxxxxx, XX 00000 and frame
27. 2617724 01/02/96 Xxxxx Rental 1 New Melroe Model 453 Bobcat
System, Inc. Loader S/N 561811357
000 Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
28. 2632895 02/14/96 Associates 1 - 1996 Xxxxxxx Forklift Model
Commercial Corp. SG60 Rough Terrain Forklift S/N
P.O. Box 410587 2601601652
Kansas City, MO 1 - 1996 Xxxxxxx Forklift Model
64141 SG60 Rough Terrain Forklift S/N
0000000000
29. 2760981 02/27/97 Forklifts Of Cape, 2 - Daewoo Forklifts Model G30S
Inc. S/N 12-06003 & 12-06076. This
X.X. Xxx 000 financing statement was filed
Cape Girardeau, for information purposes only
MO 63702-0752 and was intended to protect the
right of lessor in the
collateral described above. The
transaction between the parties
is a lease and not a secured
transaction.
5
30. 2672236 06/03/96 Lessor(s) 0 - Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxxxx Xx Xxxx, XXX00 S/N P365D-0033-9410
Inc.
X.X. Xxx 000
Xxxx Xxxxxxxxx,
XX 00000-0000
31. 2673063 06/04/96 Lessor(s) 1 - 1996 Daewoo Forklift Model
Forklifts Of Cape, G30S S/N 12-04049 w/ revolving
Inc. drum clamp S/N 15308-00010P.
X.X. Xxx 000 This financing statement was
Cape Girardeau, filed for information purposes
MO 63702-0752 only and was intended to
protect the rights of lessor in
the collateral described above.
The transaction between the
parties is a lease and not a
secured transaction.
32. 2780509 04/18/97 General Electric This financing statement was
Capital Corporation filed solely as a precaution if
0000 X. 00xx Xxxxxx contrary to the intention of
4th Floor the parties described above as
Oak Brook, IL Lessee and Lessor, the
60521 transaction relating to the
property described herein is
deemed to be other than a lease
within the meaning of 1-201
(37) of the Uniform Commercial
Code. The equipment being
covered consists of one (1)
Xxxxxx Jumbo Drill, Model DP
12-HD, S/N 200919 and one (1)
Xxxxxxxx Ejector Wagon, Model
RW45SP, S/N 27926 with all
additions, attachments,
accessories and proceeds now
existing or hereafter acquired.
33. 2742107 01/06/97 General Electric This financing statement was
Capital Corporation filed solely as a precaution if
0000 X. 00xx Xxxxxx contrary to the parties
Suite 300 described above as
Oak Brook, IL Debtor/Lessee and Secured
60521 Party/Lessor, the transaction
relating to the property
described herein is deemed to
be other than a lease within
the meaning of 1-201 (37) of
the Uniform Commercial Code.
The property being covered are
One (1) Volvo Model L120C Wheel
Loader S/N: L120CV61561, Two
(2) Model L180C Wheel Loaders
S/N's: L180CV60425 and
L180CV60429, One (1) Volvo
Model A35C Articulated Truck
S/N: X00XX0000 and One (1)
Caterpillar Model 120H Road
Grader S/N: 4MK00223, including
all attachments, accessories,
additions and proceeds now
existing or hereafter acquired.
6
34. 2753181 02/06/97 General Electric This financing statement was
Capital Corporation filed solely as a precaution if
0000 X. 00xx Xxxxxx contrary to the parties
Suite 300 described above as
Oak Brook, IL Debtor/Lessee and Secured
60521 Party/Lessor, the transaction
relating to the property
described herein is deemed to
be other than a lease within
the meaning of 1-201 (37) of
the Uniform Commercial Code.
The property being covered
consists of One (1) Komatsu
Model D58-1B Crawler Dozer S/N:
81306 with all attachments,
accessories, additions and
proceeds now existing or
hereafter acquired. Equipment
Location: #000 Xxxxxxx Xxxx,
Xxxxxxxx, Xxxxxxxx 00000.
35. 2771456 03/26/97 General Electric This financing statement was
Capital Corporation filed solely as a precaution,
0000 X. 00xx Xxxxxx if contrary to the intention of
Suite 400 the parties described above as
Oak Brook, IL Lessee/Debtor and
60521 Lessor/Secured Party, the
transaction relating to the
property described herein is
deemed to be other than a lease
within the meaning of 1-201
(37) of the Uniform Commercial
Code. The property being
covered is: One (1) MTI/JCI 400
M LHD Scoop Tram, S/N:
21891RB97
36. 2785957 05/07/97 General Electric This financing statement was
Capital Corporation filed solely as a precaution if
0000 X. 00xx Xxxxxx contrary to the intention of
Suite 400 the parties described above as
Oak Brook, IL Lessee and Lessor, the
60521 transaction relating to the
property described herein is
deemed to be other than a lease
within the property being
covered consists of One (1)
Xxxxxx-Xxxxx/Tamrock Drilling
Machine, Model RBM11-14H, S/N
463, one (1) Mining
Technologies Load Haul Dump,
Model 700M LHD, S/N
60363/4933/97 and two (2)
Charging Rigs, Model 975A, S/N
9750897 and 9750898 together
with all additions,
attachments, accessories and
proceeds now existing or
hereafter acquired.
7
37. 2823105 08/21/97 General Electric This financing statement was
Capital Corporation filed solely as a precaution
0000 X. 00xx Xxxxxx Lessee and Lessor, the
Suite 400 transaction relating to the
Oak Brook, IL property described herein is
60521 deemed to be other than a lease
within the meaning of 1-201
(37) of the Uniform Commercial
Code. The property being
covered is one (1) Xxxxxx
Scaler, Model S330, S/N6519,
together with all additions,
attachments, accessories and
proceeds now existing or
hereafter acquired. Filed with
Secretary Of State of Missouri
Acct. #40654-008
38. 2761380 02/27/97 Unicyn Funding "This financing statement was
Group filed for informational
0000 X. Xxxxxxx purposes only to give notice of
Park Blvd the secured party's ownership
Suite 301 of the equipment."
Xxxxxxxxxx, XX
00000
00-0000000
39. 2819216 08/07/97 Trinity Capital All equipment leased or
Corporation financed by Trinity Capital
000 Xxxxxxx Xxxxxx Corporation including but not
19th Floor limited to the items set forth
San Francisco, CA in Lease No. 0012881-001,
94111 including proceeds.
40. 2826730 09/02/97 Rental Equipment Used Xxxxxxx MH4000 Light Tower
Service Company Serial #5462.
Xxxxxx Field
P. O. Xxx 0000
Xxxxxxxxxx, XX
00000-0000
41. 2862594 12/29/97 Caterpillar 1 - New Caterpillar Model IT38F
Financial Integrated Tool Carrier S/N
Services 6FN00364, "and substitutions,
Corporation replacements, additions and
901 Warrenville accessions thereto, now owned
Road or hereafter acquired and
Xxxxx, XX 00000 proceeds thereof."
8
42. 2852648 11/20/97 IBM Credit All computer, information
Corporation processing and other peripheral
1133 Westchester equipment and goods (including
Avenue all additions, accessions,
White Plains, NY upgrades, and replacements)
10604 referenced on IBM supplement
#397476 dated 11/05/97 Qty-IBM
type: 001-9406 001-C74303
001-C96527 001-F06372
(11/17/97) referenced on IBM
supplement #397476 dated
11/05/97 Qty-IBM Type:
001-M22473 001-M50642
001-N91770 referenced on IBM
supplement #397476 dated
11/05/97 Qty-IBM Type:
001-S51798 001-T37001
001-V04636 referenced on IBM
Supplement #397476 dated
11/05/97 Qty-IBM type:
001-W48844 001-Y07592 UCC Log
Number: CPC00397476 7838309.
43. 2720940 10/30/96 IBM Credit IBM Equipment (including all
Corporation additions, accessions,
1133 Westchester upgrades, and replacements)
Avenue referenced on IBM Xxx#000000
Xxxxx Xxxxxx, XX Dated 10/18/96 Qty-Type
10604 002-9337 001-9406 001-C74303
001-C96527 001-F06372
001-M50642 001-N91770
001-S51798 001-T37001
001-T37012 001-T39959
001-U72260 001-V04636
001-W48844 001-Y07592
001-Y17093 001-Y52778
(10/24/96) UCC Log Number:
CP7MW291297 7838309.
44. 2719639 10/23/96 KDC Financial One (1) Komatsu WA420-3 Wheel
Limited Loader S/N 30006.
Partnership
1333 Butterfield This transaction is a lease and
Road, Suite 600 is not intended by the Debtor
Downers Grove, IL as a security transaction; the
60515 filing is only intended to make
the lease a matter of public
record. Claiming proceeds does
not constitute permission for
the Debtor to dispose of the
collateral.
45. 2719640 10/23/96 KDC Financial One (1) Komatsu WA600-1L Wheel
Limited Loader S/N A50103.
Partnership
1333 Xxxxxxxxxxx This transaction is a lease and
Road is not intended by the Debtor
Suite 600 as a security transaction; the
Downers Grove, IL filing is only intended to make
60515 the lease a matter of public
record. Claiming proceeds does
not constitute permission for
the Debtor to dispose of the
collateral.
9
46. 2760089 02/24/97 KDC Financial One Komatsu WA320-3L Wheel
Limited Partnership Loader, s/n A30013.
0000 Xxxxxxxxxxx
Xxxx This transaction is a lease and
Suite 600 is not intended by the Debtor
Downers Grove, IL as a security transaction; the
60515 filing is only intended to make
the lease a matter of public
record. Claiming proceeds does
not constitute permission for
the Debtor to dispose of the
collateral.
47. 2760090 02/24/97 KDC Financial One Komatsu WA320-3L Wheel
Limited Partnership Loader, s/n A30012.
0000 Xxxxxxxxxxx
Xxxx This transaction is a lease and
Suite 600 is not intended by the Debtor
Downers Grove, IL as a security transaction; the
60515 filing is only intended to make
the lease a matter of public
record. Claiming proceeds does
not constitute permission for
the Debtor to dispose of the
collateral.
48. 2809941 07/14/97 KDC Financial One Komatsu PC300LC-5 Hydraulic
Limited Partnership Excavator, s/n A71618.
0000 Xxxxxxxxxxx
Xxxx This transaction is a lease and
Suite 600 is not intended by the Debtor
Downers Grove, IL as a security transaction; the
60515 filing is only intended to make
the lease a matter of public
record. Claiming proceeds does
not constitute permission for
the Debtor to dispose of the
collateral.
49. 2758859 02/19/97 Machinery, Inc. 1997 JCB 212S Backhoe Loader
5081 Manchester S/N XXX000XXXX0000000. Equipped
Avenue with cab, 00" Xxxxxxx Xxxxxx,
Xx. Xxxxx, XX Pallet Forks, 73" .80 cu yd
63110 loader bucket and 12.8 x 18 10
ply tires.
50. 2761499 02/27/97 Mercantile Leasing 1 - MDX1000 Multi-Dispersive
Corporation X-Ray Fluorescence Spectrometer
0000 00xx Xx., (XXXXX) S/N X-R153.889.00 - IBM
Xxxx Xxx Xxxxxx, XX, Xxxxx 000 Xxxxxxx, xxx
XX 00000 Software.
This is a lease transaction.
51. 2774751 04/03/97 Mercantile Leasing 1 - Used 1992 Model MR-937
Corporation Xxxxxxx Boom Lift S/N 23811937.
0000 00xx Xx.,
Xxxxx 000
Xxxx Xxx Xxxxxx, XX
00000
10
52. 2729111 11/25/96 Mercantile Leasing 1 - Pillar Recovery Drill Jumbo
Corporation S/N 441, rebuilt 1996, as per
0000 00xx Xx., following spec: Mine xxxx
Suite 504 carrier c/w F6L912W Duetz
West Des Moines, diesel engine, Xxxxxx Xxxxx
XX 00000 MBE-8 Boom modified, Xxxxxx
Xxxxx MBE-8 Boom c/w manbasket
modified with Taxxon head,
Tamrock drilling components
including HL538 drill, KS140H
feed, RC510 xxx xxxxxxx, Pito
11 centralizer, TA400 control
panel, KVL-10-1 lubricator, air
water mist flushing system,
emergency hydraulic lowering
kit, Danfoss proportional
electric control valves,
stabilizing jacks, front and
rear diesel hydraulic operation
for underground use,
manufactured in Canada.
53. 2743015 01/06/97 Mercantile Leasing 1988 International Harvester
Corporation Truck F-2375
0000 00xx Xx., XXX#0XXXXXXX0XXX00000.
Suite 000
Xxxx Xxx Xxxxxx,
XX 00000
54. 2791255 05/20/97 Oce-USA, Inc. One Oce 7055, together with all
5450 No. spare parts, accessories,
Cumberland Avenue attachments, replacements,
Xxxxxxx, XX 00000 substitutions, and additions
thereto, now or hereafter
acquired and the proceeds
thereof (including insurance
proceeds).
55. 2795449 06/02/97 Xxxx Equipment New Euclid Model R600/406LD
Company Rear Dump Hauler, s/n 75795.
0000 Xxxxxx Xxxxx
Xxxx
Xxxxxxxxxx, XX
00000
56. 2872670 01/20/98 Shipping (1) Hyster lift truck Model
Utilities, Inc. H60XM together with all tires,
10539 Liberty wheels, and all other
Avenue attachments and accessories.
Xx. Xxxxx, XX
00000
II. LEASED EQUIPMENT:
1. 3/97 (2) 385 Sweepers SN7017 and
SN7073
2. 8/97 KDC Financial (2) Komatsu WA-420 Loaders, s/n
Partnership Limited A30006 and s/n A30064.
0000 Xxxxxxxxxxx
Xxxx
Xxxxx 000
Xxxxxxx Xxxxx, XX
00000
3. (1) PC150 Excavator, s/n 7820
11
4. (2) Komatsu WA-320 Loaders, s/n
A30013 and s/n A30012.
5. (1) Moxy Xxxxx XX00, s/n 353214
6. 12/13/96 KDC Financial PC 400LC-5 Hydraulic Excavator,
Limited Partnership s/n A70662
0000 Xxxxxxxxxxx
Xxxx
Xxxxx 000
Xxxxxxx Xxxxx, XX
00000
7. 7/9/97 KDC Financial PC 300LC-5 Excavator, s/n
Limited Partnership A71618
0000 Xxxxxxxxxxx
Xxxx
Xxxxx 000
Xxxxxxx Xxxxx, XX
00000
8. 10/24/96 KDC Financial WA 000-XX Xxxxx Xxxxxx, x/x
Xxxxxxx Xxxxxxxxxxx X00000
0000 Xxxxxxxxxxx
Xxxx
Xxxxx 000
Xxxxxxx Xxxxx, XX
00000
9. 1/31/96 Mercantile Leasing Ford 555D Backhoe Breaker
Corporation
0000 00xx Xx.,
Xxxxx 000
Xxxx Xxx Xxxxxx,
XX 00000
10. 1/9/98 Hyster Credit Co. Hyster Lift Truck Model 860XM,
X.X. Xxx 0000 s/n D177B39827U
Xxxxxxxx, XX 00000
11. 11/21/97 Caterpillar Caterpillar Integrated Tool
Financial Center, s/n 6FN00365
Services
Corporation
000 Xxxxxxxxxxx
Xxxx
Xxxxx, XX 00000
12. 1/31/96 Mercantile Leasing (8) Hyster Spacesaver
Corporation Automotive Lift Trucks Model
0000 00xx Xx., 000XX
Suite 000
Xxxx Xxx Xxxxxx,
XX 00000
12
13. 3/25/96 Mercantile Leasing EnviroWhirl I Surface Cleaner,
Corporation s/n EVH0081694
0000 00xx Xx.,
Xxxxx 000
Xxxx Xxx Xxxxxx,
XX 00000
III. LEASED EQUIPMENT - South East Missouri
See Attachment A
LONE STAR LEAD CONSTRUCTION CORP.
I. Jurisdiction: Texas
A. Secretary of State, Texas
1. 199981 10/07/96 GTE Leasing 1 - Option 11E Package AC/DC
Corporation 1 - RTU-R21 Software Cartridge-
500 East Xxxxxxxxx Gen.
Freeway 1 - Analog Message Waiting Line
Xxxxxx, XX 00000 Card
2 - Universal Trunk Card
1 - Digital Line Card
1 - Console/Line Card Package
1 - ONEAC Power Conditioner
10 - M2008 Basic Sets, Ash
9 - N2616 Basic Sets, Ash
19 - Pre-Printed Key Package
2 - M1 Modular Telephone User
Guides
1 - DEC Terminal Package
2 - 50 Pair Lighting Protector
1 - Ground Wire
4 - Paging Horns
9 - Inside Cables
13
SCHEDULE 5.9
TO
LOAN AND SECURITY AGREEMENT
Tax Returns
None.
SCHEDULE 6.3
TO
LOAN AND SECURITY AGREEMENT
The Doe Run Resources Corporation
Schedule of Existing Indebtedness
1. The following other indebtedness in the total amount
of $2,392,000.00
Financial Statement
Balance
-------
(in 000's)
Contingent purchase price - payable only if certain
net income levels are met, non-interest bearing, the
expected face amount at January 31, 1998 of
$3,963,000 discounted to an effective rate of 13.5%.
Expires January 29, 2002. Payee - Seafab Metal $1,867
Corporation.
Contingent purchase price - payable only if certain
net income levels are met, non-interest bearing.
Expires January 29, 2000, maximum payments for
remainder of agreement are $525 total long term
debt. Payee - ASARCO. $525*
$2,392
------
* $118,000 represents amount paid in fiscal year 1997; estimated
amount to be paid in each of 1998, 1999 and 2000 is $50,000.
SCHEDULE 6.4
TO
LOAN AND SECURITY AGREEMENT
Helicopter Transaction
The Doe Run Resources Corporation ("Doe Run") will be purchasing a
helicopter for an amount not to exceed $4.500,000. Doe Run may finance the
purchase of such helicopter and grant purchase money security interests in same.
Doe Run will in turn, directly or indirectly sell such helicopter to Doe Run
Peru for an amount not less than the amount Doe Run expended in connection with
purchasing such helicopter, and Doe Run may guaranty any debt incurred by Doe
Run Peru (up to but not exceeding $4,500,000) in connection with such direct or
indirect sale.
SCHEDULE 6.5
TO
LOAN AND SECURITY AGREEMENT
Existing Loans, Advances, and Guarantees
1. Doe Run will be purchasing a helicopter for an amount not to exceed
$4,500,000. Doe Run may finance the purchase of such helicopter and grant
purchase money security interests in same. Doe Run may in turn, directly or
indirectly sell such helicopter to Doe Run Peru for cash or other immediately
available funds in an amount not less than the amount Doe Run expended in
connection with purchasing such helicopter, and Doe Run may guaranty any debt
incurred by Doe Run Peru (up to but not exceeding $4,500,000) in connection with
such direct or indirect sale.
