EXHIBIT 10.15
LOAN AGREEMENT
THIS LOAN AGREEMENT made and entered into as of March 20, 2003, by and
between THE DIRECTOR OF DEVELOPMENT OF THE STATE OF OHIO, acting on behalf of
the State of Ohio (the "Director"), and REPUBLIC ENGINEERED PRODUCTS LLC, a
Delaware limited liability company (the "Company"), under the circumstances
summarized in the following recitals (the capitalized terms not defined in the
recitals are being used therein as defined in Article I hereof):
A. Pursuant to the Act, the Director is authorized, among other
things, to make loans to assist in the financing of an Eligible Project.
B. The Company has requested that the Director provide the
financial assistance for the Project hereinafter described.
C. The Director has determined that the Project constitutes an
Eligible Project and that the financial assistance to be provided pursuant to
this Loan Agreement is appropriate under the Act and will be in furtherance and
in implementation of the public policy set forth in the Act.
D. The financial assistance to be provided pursuant to this Loan
Agreement has been reviewed and approved by the a Development Financing Advisory
Council and the Controlling Board pursuant to the Act.
NOW, THEREFORE, in consideration of the premises and the
representations and agreements herein contained, the Director and the Company
agree as follows:
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ARTICLE I
DEFINITIONS
Section 1.1. Use of Defined Terms. In addition to the words and terms
elsewhere defined in this Loan Agreement or by reference to the Security
Documents or other instruments, the words and terms set forth in Section 1.2
hereof shall have the meanings therein set forth unless the context or use
expressly indicates a different meaning or intent. Such definitions shall be
equally applicable to both the singular and plural forms of any of the words and
terms therein defined.
Section 1.2. Definitions. As used herein:
"Act" means Chapter 166, Ohio Revised Code, as from time to time
amended and supplemented.
"Allowable Costs" means "allowable costs" of the Project within the
meaning of the Act.
"Application" means the Application of the Company submitted to the
Director requesting assistance under the Act.
"Closing Date" means March 20, 2003, the date of execution and delivery
of the Loan Documents.
"Commitment" means the Commitment Letter between the Director and the
Company dated October 28, 2002.
"Controlling Board" means the Controlling Board of the State.
"Cost Certification" means a certification of the Company, as of a
specified date, setting forth in reasonable detail the costs incurred and, if
appropriate, to be incurred, by the Company in completing the Provision of the
Project, including a detail by category of all Allowable Costs.
"Development Financing Advisory Council" means the Development
Financing Advisory Council of the State.
"Disbursement Date" means the date upon which the proceeds of the Loan
are disbursed to, or for the benefit of, the Company, which shall be on or
before June 30, 2003, or such subsequent date as may be established by the
Director in writing in accordance with Section 3.7 hereof for the disbursement
of the Loan.
"Eligible Project" means an "eligible project" within the meaning of
the Act and, with respect to the Loan, means the Project Equipment.
"Environmental Law" means any federal, state or local law, regulation,
ordinance, order or directive pertaining to the protection of the environment.
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"ERISA" means the Employee Retirement Income Security Act of 1974, and
any successor statute of similar import, together with all rules and regulations
thereunder, as amended, reformed or otherwise modified from time to time.
References to sections or titles of ERISA shall be construed to also refer to
successor sections or titles.
"Event of Default" means any of the events described as an event of
default in Section 5.1 hereof.
"Final Cost Certification" means the Cost Certification dated as of the
Closing Date or Disbursement Date, as applicable.
"Governing Instruments" means the Certificate of Formation and
Operating Agreement of the Company.
"Governmental Authority" means, collectively, the United States of
America, the State, any political subdivision thereof, any municipality, and any
agency, department, commission, board or bureau of any of the foregoing having
jurisdiction over the Project.
"Hazardous Substance" means a hazardous substance as defined under the
Comprehensive Emergency Response Compensation and Liability Act of 1980, 42
U.S.C. Section 9601, as from time to time amended.
"Hazardous Waste" means a hazardous waste as defined under the Resource
Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901, as from time to
time amended.
"Indenture" means that certain Indenture dated as of August 16, 2002,
among the Indenture Trustee, the Collateral Agent, the Company, Blue Bar, L.P.,
Blue Steel Capital Corp. and N & T Railway Company, LLC, pursuant to which the
Company and Blue Steel issued the Senior Notes.
"Indenture Trustee" and/or "Collateral Agent" means LaSalle Bank
National Association in its capacity as indenture trustee and/or collateral
agent under the Indenture.
"Intercreditor Agreement" means the Intercreditor Agreement dated as of
March 20, 2003, between the Director and the Indenture Trustee relating to the
Project Equipment, as the same may be amended, modified, supplemented, restated
or replaced from time to time.
"Interest Rate for Advances" means the rate per annum equal to the
lesser of: (i) eighteen percent (18%), or (ii) the maximum rate permitted by
law.
"Loan" means the loan by the Director to the Company in the total sum
of the Loan Amount, to be disbursed pursuant to Section 3.8 hereof.
"Loan Agreement" means this Loan Agreement, as the same may be amended,
modified, supplemented, restated or replaced from time to time.
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"Loan Amount" means the lesser of (i) Five Million Dollars ($5,000,000)
or (ii) thirty and thirty-four hundredths percent (30.34%) of the total
Allowable Costs of the Project, as determined by the Director in the Director's
sole discretion pursuant to this Loan Agreement.
"Loan Approval Documents" means, with respect to the Loan, the
Recommendation of the Director to the Development Financing Advisory Council
dated September 30, 2002, the Resolution of the Development Financing Advisory
Council dated September 30, 2002, the Approval of the Controlling Board dated
October 28, 2002, and the Commitment.
"Loan Documents" means this Loan Agreement, the Note, the Security
Agreement and all other documents or instruments delivered to or required by the
Director to evidence or secure the Loan as required by the Commitment and this
Loan Agreement, as the same may be amended, modified, supplemented, restated or
replaced from time to time.
"Note" means the Cognovit Promissory Note of even date herewith, in the
form attached hereto as EXHIBIT A, evidencing the unconditional obligation of
the Company to repay the Loan, as the same may be amended, modified,
supplemented, restated or replaced from time to time.
"Notice Address" means:
(a) As to the Director:
Department of Development
Economic Development Finance Division, 28th Floor
00 Xxxxx Xxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxx, Xxxx 00000-0000
Attention: Loan Servicing
(b) As to the Company:
Republic Engineered Products LLC
0000 Xxxxxxx Xxxxxxx
Xxxxxxxx, Xxxx 00000
Attn: Xxxxxx X. Xxxxxx
or such additional or different address, notice of which is given under Section
6.2 hereof.
"Petroleum" means petroleum as defined under the Resource Conservation
and Recovery Act of 1976, 42 U.S.C. Section 6901, as from time to time amended.
"Project" means the Project Equipment constituting an Eligible Project.
"Project Equipment" means the machinery, equipment and personal
property described in EXHIBIT B attached hereto, as from time to time amended or
supplemented.
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"Project Purposes" means the acquisition of the Project Equipment for
use by the Company in connection with its manufacturing operations at the
Project Site.
"Project Site" means the real property described in EXHIBIT C attached
hereto, together with all appurtenances thereto.
"Provision" means, as applicable, the acquiring, constructing,
reconstructing, rehabilitating, renovation, enlarging, installing, improving, or
furnishing of the Project.
"Required Equity Funding" means One Million Six Hundred Forty-Eight
Thousand Dollars ($1,648,000) to be provided by the Company in cash to pay a
portion of the Allowable Costs of the Project.
"Senior Notes" means the $80,000,000 10% Senior Secured Notes Due 2009
issued by the Company and Blue Steel Capital Corp. pursuant to the Indenture.
"Senior Note Documents" means the Indenture together with all other
documents or instruments evidencing or securing the Senior Notes.
"Security Agreement" means the Security Agreement between the Company
and the Director of even date herewith securing the Loan, as the same may be
amended, modified, supplemented, restated or replaced from time to time.
"Security Documents" means, collectively, the Security Agreement, UCC
Financing Statements and any ancillary documents, as the same may be amended,
modified, supplemented, restated or replaced from time to time.
"State" means the State of Ohio.
"Toxic Chemicals" means toxic chemicals as defined under Title III of
The Superfund Amendments and Reauthorization Act of 1986 (also cited as the
Emergency Planning and Community Right-to-Know Act) 42 U.S.C. Section 11001, as
from time to time amended.
"UCC Financing Statements" means the financing statements evidencing
the Director's security interest in the collateral described in the Security
Agreement.
Section 1.3. Certain Words and References. Any reference herein to the
Director shall include those succeeding to the Director's functions, duties or
responsibilities pursuant to or by operation of law or lawfully performing such
functions. Any reference to a section or provision of the Constitution of the
State or to a section or provision of the Act or to a section, provision or
chapter of the Ohio Revised Code shall include such section, provision or
chapter as from time to time amended.
The terms "hereof," "hereby," "herein," "hereto," "hereunder" and
similar terms refer to this Loan Agreement; and the term "heretofore" means
before, and the term "hereafter" means after, the Closing Date. Words of the
masculine gender include the feminine and the neuter, and when the sense so
indicates, words of the neuter gender may refer to any gender.
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ARTICLE II
DETERMINATIONS AND REPRESENTATIONS
Section 2.1. Determinations of the Director. Pursuant to the Act and on
the basis of the representations and other information provided by the Company,
the Director has heretofore made certain determinations, as set forth in the
Loan Approval Documents, which are hereby confirmed, and the Director hereby
determines that the financial assistance to be provided by the State pursuant to
this Loan Agreement will conform to the requirements of the Act, including
Section 166.07 thereof, and will further implement the purposes of the Act by
creating new jobs or preserving existing jobs and employment opportunities and
improving the economic welfare of the people of the State.
Section 2.2. Representations, Warranties and Covenants of the Company.
The Company hereby represents, warrants and covenants that:
(a) The Company is a limited liability company duly organized,
validly existing and in good standing under the laws of the
State of Delaware, and has all requisite power, corporate or
otherwise, to conduct its business and to own, or hold under
lease, its assets and properties.
(b) The Company is qualified to do business as a foreign limited
liability company in the State, and in each other jurisdiction
wherein the character of the properties owned or held under
lease by the Company or the nature of the business conducted
or proposed to be conducted by the Company makes such
qualification necessary, except in such jurisdiction where the
failure to be so qualified, licensed, admitted or approved
will not have a material adverse effect on the business,
operations or financial condition of the Company. The Company
is in full force and effect under the laws of the State.
(c) The Company has full power and authority to execute, deliver
and perform the Loan Documents and Senior Note Documents and
to enter into and carry out the transactions contemplated
thereby. Such execution, delivery and performance do not, and
will not, violate any provision of law applicable to the
Company or the Governing Instruments of the Company and do
not, and will not, conflict with or result in a default under
any material agreement or instrument to which the Company is a
party or by which the Company or any property or assets of the
Company is or may be bound. The Loan Documents and Senior Note
Documents have, by proper action, been duly authorized,
executed and delivered and all necessary actions have been
taken to constitute the Loan Documents and Senior Note
Documents as legal, valid and binding obligations of the
Company, except as such enforceability may be limited by (1)
bankruptcy, insolvency, reorganization, or other laws relating
to or affecting the enforcement of creditor's rights, and (2)
general principles of equity.
(d) The provision of financial assistance pursuant to the Loan
Approval Documents and this Loan Agreement induced the Company
to provide the Project, thereby creating
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new jobs or preserving existing jobs and employment
opportunities and improving the economic welfare of the people
of the State.
(e) The Provision of the Project will be completed by the Company
and the Project will be operated and maintained by the Company
in such manner as to conform with all applicable laws,
including without limitation, all Environmental Laws and
zoning, planning, building and other governmental regulations
imposed by any Governmental Authority and as to be consistent
with the purposes of the Act.
(f) The Company presently intends that the Project will be used
and operated in a manner consistent with the Project Purposes
in Lorain, Lorain County, Ohio until the date on which the
Loan has been fully repaid, and the Company knows of no reason
why the Project will not be so operated.
(g) There are no actions, suits or proceedings pending or, to the
knowledge of the Company, threatened against or affecting the
Company or the Project which, if adversely determined, would
individually or in the aggregate materially impair the ability
of the Company to perform any of the Company's obligations
under the Loan Documents or Senior Note Documents, or
materially and adversely affect the financial condition of the
Company.
(h) The Company is not in default under any of the Loan Documents
or Senior Note Documents, or in the payment of any
indebtedness for borrowed money or under any agreement or
instrument evidencing any such indebtedness, and no event has
occurred which by notice, the passage of time or otherwise
would constitute any such event of default.
(i) The Project Site is zoned by the City of Lorain, Lorain
County, Ohio under zoning ordinances which permit the
Provision of the Project thereon and the operation of the
Company's business; and all utilities, including water, storm
and sanitary sewer, gas, electric and telephone, and rights of
access to public ways are currently available or will be
provided to the Project Site in sufficient locations and
capacities to meet the requirements of operating the Project
and of any applicable Governmental Authority.
(j) The Company has made no contract or arrangement of any kind,
other than the Loan Documents and Senior Note Documents, which
has given rise to, or the performance of which by the other
party thereto would give rise to, a lien or claim of lien on
the Project or other collateral covered by the Loan Documents,
other than liens as set forth in Section 4.2(f) hereof.
(k) No representation or warranty of the Company contained in any
of the Loan Approval Documents, Loan Documents or Senior Note
Documents, and no statement contained in any certificate,
schedule, list, financial statement or other instrument
furnished to the Director by or on behalf of the Company,
including, without limitation, the Application, contains any
untrue statement of a material fact,
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or omits to state a material fact necessary to make the
statements contained herein or therein not misleading.
(l) All proceeds of the Loan shall be used for the payment of
Allowable Costs relating to Provision of the Project. No part
of any such proceeds shall be knowingly paid to or retained by
the Company or any partner, officer, shareholder, director or
employee of the Company as a fee, kick-back or consideration
of any type. The Company has no identity of interest with any
supplier, contractor, architect, subcontractor, laborer or
materialman performing work or services or supplying materials
in connection with the Provision of the Project.
(m) The Company shall provide the Required Equity Funding by the
Disbursement Date.
(n) The financial statements of the Company heretofore delivered
to the Director are true and correct in all material respects,
have been prepared in accordance with generally accepted
accounting principles consistently applied, and fairly present
in all material respects the financial condition and the
results of operations of the Company as of the dates thereof.
No materially adverse change has occurred in the financial
condition of the Company reflected therein since the
respective dates thereof.
(o) To the best of the Company's knowledge after due inquiry, no
Hazardous Substance, Hazardous Waste, Toxic Chemical or
Petroleum has been or shall be discharged, dispersed,
released, stored or treated at the Project Site in violation
of any applicable laws or Environmental Laws. No asbestos or
asbestos-containing materials have been installed, used,
incorporated into any buildings, structures, additions,
improvements, facilities, fixtures or installations at the
Project Site, or disposed of on or otherwise released at or
from the Project Site. To the best of the Company's knowledge
after due inquiry, no underground storage tanks are located at
the Project Site. No investigation, administrative order,
consent order and agreement, litigation, or settlement under
any Environmental Law with respect to any Hazardous Substance,
Hazardous Waste, Toxic Chemical, Petroleum, asbestos or
asbestos-containing material is proposed, in existence, or, to
the best of the knowledge of the Company, threatened or
anticipated with respect to the Eligible Project and/or
Project Site. To the best of the Company's knowledge after due
inquiry, the Eligible Project and Project Site are in
compliance with all applicable Environmental Laws and the
Company has received no notice from any entity, governmental
body, or individual claiming any violation of, or requiring
compliance with any Environmental Law. The Company has
received no request for information, notice of claim, demand
or other notification that the Company may be responsible for
a threatened or actual release of any Toxic Chemical,
Hazardous Substance, Hazardous Waste, Petroleum, asbestos or
asbestos-containing material or for any damage to the
environment or to natural resources.
(p) The Company is the owner of the Project Site, and is, or will
be upon its acquisition, the owner of the Project Equipment.
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All representations and warranties contained in, or made in connection with,
this Loan Agreement and the other Loan Documents shall survive the Closing Date
and the disbursement of the Loan by the Director, and shall not be limited or
otherwise affected by any and all inspections, investigations, reviews or other
inquiries made or other actions taken by the Director or any of the Director's
agents, representatives and designees or any other person or board assisting any
of the foregoing or acting for or on behalf of the State in connection with the
Application, the Loan Approval Documents, the Loan Documents or the consummation
of the Loan.
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ARTICLE III
LOAN, PROVISION OF PROJECT AND CONDITIONS TO DISBURSEMENT
Section 3.1. Loan and Repayment. On the terms and conditions of this
Loan Agreement and the Commitment, the Director shall lend to the Company the
Loan Amount to assist in the Provision of the Project. The Loan shall be
evidenced by this Loan Agreement and the Note and secured by the Security
Documents and other Loan Documents, as applicable. Those instruments shall be
executed and delivered by the Company to the Director on the Closing Date,
concurrently with the execution and delivery of this Loan Agreement and the
delivery of all other documents and the satisfaction of all other closing
conditions required by this Loan Agreement and the Commitment. The Loan shall be
disbursed pursuant to Section 3.8 hereof upon the satisfaction of the conditions
set forth in Section 3.6 hereof. The Loan shall be disbursed only from, and only
to the extent that on the Disbursement Date, funds not heretofore committed are
available to make the Loan from moneys in, the "Facilities Establishment Fund"
created by the Act and as defined in such Act.
The terms of repayment of the Loan shall be as set forth in the Note
and the Company shall make all payments required to be made under the Note as
and when due.
Section 3.2. Provision of Project. The Company (a) has commenced or
shall promptly hereafter commence the Provision of the Project, (b) shall pay
all expenses incurred in such Provision from funds made available therefor in
accordance with this Loan Agreement, the Senior Note Documents or otherwise, and
(c) shall, where commercially reasonable, demand, xxx for, levy and recover all
sums of money and debts which may be due and payable under the terms of any
contract, order, receipt, guaranty, warranty, writing or instruction in
connection with the Provision of the Project and will enforce the material terms
of any contract, agreement, obligation, and or other performance security with
respect thereto. The Company confirms its agreement in the Commitment that all
wages paid to laborers and mechanics employed on the Provision of the Project
shall be paid, as required by Chapter 4115, Ohio Revised Code, at not less than
the prevailing rates of wages for laborers and mechanics for the class of work
called for by the Project, which wages shall be determined in accordance with
the requirements of Chapter 4115, Ohio Revised Code, for determination of
prevailing wage rates; provided, that if the Company undertakes, as part of the
Project, work to be performed by the Company's regular bargaining unit employees
who are covered under collective bargaining agreements which were in existence
prior to the date of the Commitment, the rate of pay provided under the
applicable collective bargaining agreement may be paid to such employees.
Section 3.3. [Reserved]
Section 3.4. Company Required to Pay Costs in Event Proceeds
Insufficient. In the event that the proceeds of the Loan, the Senior Notes and
the Required Equity Contribution are not sufficient to pay all costs of the
Project, the Company shall, nonetheless and irrespective of the cause of such
deficiency, complete the Project and pay all costs of such completion in full
from the Company's own funds.
Section 3.5. [Reserved]
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Section 3.6. Conditions to Disbursement. The disbursement of the Loan
shall be made on the Disbursement Date, provided the Director shall have
received the following on or before the Disbursement Date:
(a) this Loan Agreement, duly executed;
(b) the duly executed Note;
(c) the duly executed Security Agreement;
(d) the duly executed UCC Financing Statements;
(e) the duly executed Intercreditor Agreement;
(f) certification by the Company that (i) the Company's
representations and warranties made in the Loan Approval
Documents, Loan Documents and Senior Note Documents remain
true, accurate and complete as of the Disbursement Date in all
material respects, (ii) no default or event which, by notice,
the passage of time or otherwise, would constitute a default,
exists under the Loan Documents or Senior Note Documents,
(iii) that the value of the Project is, or upon completion
will be, equal to or greater than the total amount of money
expended in the Provision of the Project, and (iv) the amount
of the Loan will not exceed thirty and thirty-four hundredths
percent (30.34%) of the total Allowable Costs of the Project;
(g) a Certificate of Compliance from the Ohio Department of
Development, certifying as to full compliance with Chapter
4115, Ohio Revised Code;
(h) evidence of the liability and property insurance required by
the Loan Documents;
(i) Cost Certifications or a Final Cost Certification, as the case
may be;
(j) evidence of ownership of the Project Equipment and copies of
executed purchase agreements therefor, together with a
complete list of all costs and expenses incurred in connection
with the Provision of the Project, including invoices and
receipts (or cancelled checks or other evidence of payment
and/or supporting documentation for all such costs and
expenses incurred by the Company), which items shall
constitute evidence of the Required Equity Contribution;
(k) the Company's Certificates of Good Standing issued by the
Secretary of State of the States of Delaware and Ohio, dated
not more than twenty (20) days prior to the Disbursement Date;
(l) certified copies of the resolutions of the Company authorizing
execution and delivery of all documents with respect to the
Loan, the Senior Notes and performance thereunder;
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(m) a certificate of incumbency as to the officers executing the
Loan Documents on behalf of the Company;
(n) copies, certified by the Company to be true, correct and
complete, of the Governing Instruments of the Company;
(o) copy of the Indenture, certified by the Company as being true,
accurate and complete;
(p) an opinion of the Company's counsel, which sets forth the
following:
(i) the Company has been duly organized and is validly
existing as a limited liability company in good
standing under the laws of the State of Delaware, is
qualified to do business as a foreign limited
liability company in good standing in the State, and
has all requisite power and authority to conduct the
Company's business and to own, or hold under lease,
the Company's properties;
(ii) the Company has full power and authority to execute
and deliver the Loan Documents and Senior Note
Documents;
(iii) the Company has duly authorized the taking of any and
all actions necessary to carry out and give effect to
the transactions contemplated to be performed on the
Company's part under the Loan Documents and Senior
Note Documents;
(iv) each Loan Document and Senior Note Document has been
duly and validly authorized, executed and delivered
by the Company, is in full force and effect and is a
legal, valid and binding obligation of the Company,
enforceable in accordance with its terms, except as
such enforcement may be limited by the application of
bankruptcy, insolvency, reorganization, moratorium
and other similar laws or equitable principles
affecting creditors' rights generally;
(v) the execution and delivery of each of the Loan
Documents and Senior Note Documents and the
performance by the Company of the actions required of
the Company thereby and the consummation of the
transactions contemplated therein do not and will not
(A) conflict with or violate any provisions of the
Company's Governing Instruments, or (B) constitute a
default under or conflict with or violate any
resolution of the board of directors of the Company,
or (C) conflict with or violate any provisions of any
applicable law, or (D) to the best knowledge of such
counsel, any judgment, decree, indenture, mortgage,
deed of trust, guaranty, lease, agreement or other
instrument to which the Company is a party or by
which the Company or any of the property of the
Company is bound;
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(vi) there is no action, temporary restraining order,
injunction, suit, proceeding, inquiry or
investigation at law or in equity, before or by any
judicial or administrative court or agency, pending
or to the best knowledge of such counsel threatened
against, affecting or involving the Company or the
Project which, if adversely determined, would
individually or in the aggregate materially impair
the ability of the Company to perform any of its
obligations under the Loan Documents or Senior Note
Documents, or would materially adversely affect the
financial condition of the Company; and
(vii) the Company has obtained any and all requisite
governmental consents, permits, licenses and
approvals necessary for it to operate the Eligible
Project, as defined in the Loan Agreement, and to
enter into, execute and deliver the Loan Documents
and Senior Note Documents and to perform the
Company's obligations thereunder.
(q) evidence satisfactory to the Director that the Project is not
located in a "Flood Hazard Area" as defined by the United
States Department of Housing and Urban Development in the
Flood Disaster Protection Act of 1973, as amended, or if the
Project is located in a such flood-prone area, that
appropriate flood insurance or other satisfactory measures
have been taken to protect the Project from flood damage;
(r) UCC record searches of the financing statements in the Office
of the Lorain County Recorder and the Office of the Secretary
of State of Delaware showing no liens, pledges, mortgages or
security interests in the Collateral (as defined in the
Security Agreement);
(s) a duly executed disbursement request pursuant to Section 3.8;
(t) a duly executed Power of Attorney to authorize wire transfers,
if any;
(u) an Authorization Agreement for Preauthorized Payment; and
(v) such other certifications, documents or opinions as the
Director may reasonably request.
Section 3.7. Postponement of the Disbursement Date. At the written
request of the Company setting forth the reasons therefor and received at least
(20) days prior to the Disbursement Date, the Director may, but shall be under
no obligation to, postpone the Disbursement Date to a later date. No such
postponement shall be deemed to have been granted unless stated in a writing
signed by the Director specifying the length of the extension given. If for any
reason the Loan shall not have been disbursed on or before the Disbursement
Date, or such subsequent date as the Director shall have specified in writing
pursuant to the preceding sentence, this Loan Agreement and the Commitment shall
automatically terminate and, subject to the provisions of Section 3.9 hereof, be
of no further force and effect. For purposes of this Section, time is of the
essence.
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Section 3.8. Disbursement of Loan. At the request of the Company for
disbursement of the Loan Amount hereunder, the Director shall disburse the Loan
by delivering funds in the Loan Amount, as determined by the Director in the
Director's sole discretion based on the Final Cost Certification, to the order
of, or at the direction of, the Company on the Disbursement Date.
Section 3.9. Payment of Costs; Indemnification. The Company shall pay
all costs incident to the Loan, including recording fees, insurance fees, escrow
fees, filing fees, and all other costs and expenses incurred by the Director,
other than the initial fees (but including all of the expenses) of the counsel
assisting the Director in connection with the closing and disbursement of the
Loan. The Company shall defend, indemnify and hold the Director and any
officers, employees, agents or representatives of the Director or the State
harmless from and against any and all loss, cost, expense, claims or actions
arising out of or connected with the execution and delivery of this Loan
Agreement or any of the other Loan Documents and the transactions contemplated
thereby, and the preparation of documents relating to the disbursement of the
Loan, including all aforementioned costs and expenses, regardless of whether or
not the disbursement of the Loan shall actually occur. The provisions of this
Section will survive the termination of this Loan Agreement.
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ARTICLE IV
ADDITIONAL COVENANTS AND AGREEMENTS
Section 4.1. Affirmative Covenants of the Company. Throughout the term
of this Loan Agreement, the Company shall:
(a) Taxes and Assessments. Pay and discharge promptly, or cause to
be paid and discharged promptly, when due and payable, all
taxes, assessments and governmental charges or levies imposed
upon the Company, the Company's income or any of the Company's
property, or upon any part thereof, as well as all claims of
any kind (including claims for labor, materials and supplies)
which, if unpaid, might by law become a lien or charge upon
the Company's property.
Notwithstanding the preceding paragraph, the Company may, at
the Company's expense and after prior notice to the Director,
by appropriate proceedings diligently prosecuted, contest in
good faith the validity or amount of any such taxes,
assessments, governmental charges, levies and claims and
during the period of contest, and after notice to the
Director, may permit the items so contested to remain unpaid.
However, if at any time the Director shall notify the Company
that, in the opinion of legal counsel satisfactory to the
Director, by nonpayment of any such items, the lien or
security interest created by the Security Documents as to any
part of the Project will be materially affected or that the
Project or any part thereof will be subject to imminent loss
or forfeiture, the Company shall promptly pay such taxes,
assessments, charges, levies or claims.
(b) Maintain Existence. Do or cause to be done all things
necessary to preserve and keep in full force and effect the
Company's existence and the Company's material rights and
franchises.
(c) Maintain Property. Maintain and keep the Company's property in
good repair, working order and condition and from time to time
make all repairs, renewals and replacements which, in the
opinion of the Company, are necessary and proper so that the
business carried on in connection therewith may be properly
conducted at all times; provided, however, that nothing in
this subsection shall prevent the Company from selling or
otherwise disposing of any property whenever, in the good
faith judgment of the Company, such property is obsolete, worn
out, without economic value or unnecessary for the conduct of
the business of the Company; provided, further, that with
respect to the Collateral (as defined in the Security
Agreement), the Company shall comply with the terms of the
Security Agreement.
(d) Maintain Insurance. Keep the Project Equipment insured against
loss or damage by fire and other risks, maintain public
liability insurance against claims for personal injury, death,
or property damage suffered by others upon, in or about the
Project Site; and maintain all such worker's compensation or
similar insurance as may be required under the laws of any
state or jurisdiction in which the Company may be engaged in
business. All insurance for which provision has been made in
this
- 15 -
subsection (d) shall be maintained against such risks and in
at least such amounts as required by the Security Agreement,
except that the Company may effect worker's compensation or
similar insurance in respect of operations in any state or
other jurisdiction either through an insurance fund operated
by such state or other jurisdiction or by causing to be
maintained a system or systems of self-insurance which is in
accordance with applicable law.
(e) Furnish Information. Furnish or cause to be furnished to the
Director:
(i) Quarterly Reports. Within forty-five (45) days after
the end of each of the first three quarterly periods
of each fiscal year of the Company, the compiled
financial statements of the Company, including the
balance sheets, as at the end of such quarterly
period, together with related statements of income
and retained earnings (or accumulated deficit) and
changes in financial position for such quarterly
period, setting forth in comparative form the
corresponding figures as at the end of or for the
corresponding quarter of the previous fiscal year,
all in reasonable detail, prepared in accordance with
generally accepted accounting principles applied on a
consistent basis, subject to usual year-end audit
adjustments.
(ii) Annual Reports. Within ninety (90) days after the
last day of each fiscal year of the Company, a copy
of the Company's reviewed annual financial statements
containing a balance sheet of the Company as at the
end of such fiscal year, together with related
statements of income and retained earnings (or
accumulated deficit) and changes in financial
position for such fiscal year, setting forth in
comparative form the corresponding figures as at the
end of or for the previous fiscal year, all in
reasonable detail and all examined by, and
accompanied by a certificate of, the Company's chief
financial officer or accountant to the effect that
such financial statements were prepared in accordance
with generally accepted accounting principles
consistently applied, and present fairly the
Company's financial position at the close of the
period covered by such financial statements and the
results of the Company's operations for such period.
(iii) Employment Statement. The Company shall furnish to
the Director upon request, but in any event not less
frequently than concurrently with the annual
financial statements to be furnished pursuant to this
Section throughout the term of the Loan, a statement
certifying: (a) the number of employees of the
Company employed on the Eligible Project as of the
Closing Date; (b) the number of employees of the
Company currently employed on the Eligible Project;
(c) the number of any and all employees of the
Company laid off or terminated from the Eligible
Project since the Closing Date; (d) the current
number of women and minority employees of the Company
employed on the Eligible Project; and (e) such other
employment, economic and statistical data concerning
the Project as may be reasonably requested by the
Director.
- 16 -
(iv) Certificate; No Default. With each of the financial
statements required to be furnished pursuant to this
Section, a certificate of the Company's chief
executive officer, chief financial officer,
treasurer, assistant treasurer or other authorized
officer stating that (a) no Event of Default has
occurred and is continuing and no event or
circumstance which would constitute an Event of
Default, but for the requirement that notice be given
or time elapse or both, has occurred and is
continuing, or, if such an Event of Default or such
event or circumstance has occurred and is continuing,
a statement as to the nature thereof and the action
which the Company proposes to take with respect
thereto, and (b) no action, suit or proceeding by the
Company or against the Company at law or in equity,
or before any governmental instrumentality or agency,
is pending or, to the best of the Company's
knowledge, threatened, which, if adversely
determined, would materially impair the right or
ability of the Company to carry on the business which
is contemplated in connection with the Project or
would materially impair the right or ability of the
Company to perform the transactions contemplated by
the Loan Documents or Senior Note Documents, or would
materially and adversely affect the Company's
business, operations, properties, assets or
condition, all as of the date of such certificate,
except as disclosed in such certificate.
(v) Other Information. Such other information respecting
the business, properties or the condition or
operations, financial or otherwise, of the Company as
the Director may reasonably request.
(f) Deliver Notice. Promptly upon learning of any of the
following, deliver written notice thereof to the Director,
describing the same and the steps being taken by the Company
with respect thereto:
(i) the occurrence of an Event of Default or an event or
circumstance which would constitute an Event of
Default, but for the requirement that notice be given
or time elapse or both; or
(ii) any action, suit or proceeding by or against the
Company at law or in equity, or before any
governmental instrumentality or agency, instituted or
to the knowledge of the Company threatened which, if
adversely determined, would materially impair the
right or ability of the Company to carry on the
business which is contemplated in connection with the
Project or would materially impair the right or
ability of the Company to perform the transactions
contemplated by the Loan Documents or Senior Note
Documents, or would materially and adversely affect
the Company's business, operations, properties,
assets or condition; or
(iii) the occurrence of a Reportable Event, as defined in
ERISA, under, or the institution of steps by the
Company to withdraw from, or the institution of any
steps to terminate, any Plan, as defined in Section
4.2(d) hereof, as to which the Company may have
liability; or
- 17 -
(iv) any material communication affecting the Project, the
Project Site or the Senior Note Documents, and the
Company will promptly respond fully to any inquiry of
the Director made with respect thereto.
(g) Inspection Rights. At any reasonable time and from time to
time during normal business hours, and with prior notice,
permit the Director, or any agents or representatives thereof,
to visit the location of the Project and discuss the general
business affairs of the Company with any of the Company's
officers.
(i) Preference for Ohio Goods and Services. The Company will use
its best efforts to purchase goods and services relating to
the Project from persons, partnerships and corporations
located in Ohio.
Section 4.2. Negative Covenants of the Company. Throughout the term of
this Loan Agreement, the Company shall not:
(a) Maintain Existence. Sell, transfer or otherwise dispose of
all, or substantially all, of the Company's assets,
consolidate with or merge into any other entity, or permit one
or more entities to consolidate with or merge into the
Company; provided, however, that the Company may, without
violating the agreement contained in this subsection (a),
consolidate with or merge into another corporation, or permit
one or more other corporations to consolidate with or merge
into the Company, or sell, transfer, or otherwise dispose of
all, or substantially all, of its assets and thereafter
dissolve, if: (i) the prior written consent of the Director is
obtained, which consent shall not be unreasonably withheld;
(ii) the surviving, resulting or transferee entity, as the
case may be, assumes in writing all of the respective
obligations of the Company hereunder (if such surviving,
resulting or transferee entity is other than the Company); and
(iii) the surviving, resulting or transferee entity, as the
case may be, is an entity duly organized and validly existing
under the laws of the State or duly qualified to do business
therein, and has a net worth of not less than that of the
Company immediately prior to such disposition, consolidation
or merger, transfer or change of form.
(b) Agreements. Enter into any agreement containing any provision
which would be violated or breached by the performance of the
Company's obligations hereunder or under any instrument or
document delivered or to be delivered by the Company hereunder
or in connection herewith.
(c) Assignment, Sale or Lease. In whole or in part, assign this
Loan Agreement or sell, lease or grant the right to occupy or
use any portion of the Project to others, without the prior
written consent of the Director, which consent shall not be
unreasonably withheld.
(d) ERISA. Voluntarily terminate any employee benefit plan or
other plan (a "Plan") maintained for employees of the Company
and covered by Title IV of ERISA, so as to result in any
material liability of the Company to the Pension Benefit
Guaranty Corporation ("PBGC"), enter into any Prohibited
Transaction (as defined in Section
- 18 -
4975 of the Internal Revenue Code of 1986, as amended, and in
ERISA) involving any Plan which results in any material
liability of the Company to the PBGC, cause any occurrence of
any Reportable Event (as defined in Title IV of ERISA) which
results in any material liability of it to the PBGC, or allow
or suffer to exist any other event or condition which results
in any material liability of the Company to the PBGC.
(e) Suspension of Operation. Suspend or discontinue operation of
the Project (other than for routine repairs and/or
maintenance) without the prior written consent of the
Director.
(f) Encumbered Assets. Without the prior written consent of the
Director, pledge, assign, sell, leaseback, hypothecate or in
any manner encumber the Project Equipment except as follows:
(i) Mortgages, liens, pledges, and security interests in
favor of the Director and the Indenture Trustee
and/or Collateral Agent covering all of the Project
Equipment, which mortgages, liens, pledges, and
security interests shall be subject to the terms and
conditions of the Intercreditor Agreement;
(ii) Liens, charges, conditions, or restrictions arising
from any personal property tax abatement agreements;
and
(iii) (1) Liens arising from judgments or awards in respect
of which the Company shall in good faith be
prosecuting an appeal or proceedings for review and
in respect of which the Company shall have secured a
subsisting stay of execution pending such appeal or
proceedings for review, provided the Company shall
have set aside on the Company's books adequate
reserves with respect to such judgment or award; (2)
liens for taxes, assessments, or governmental charges
or levies, provided the Director shall not have
notified the Company in accordance with Section
4.1(a) hereof with respect to such liens; (3)
deposits, liens or pledges to secure payments of
workmen's compensation, unemployment insurance,
pensions or other social security obligations, public
or statutory obligations, surety, stay or appeal
bonds, or other similar obligations arising in the
ordinary course of business; and (4) mechanic's,
workmen's, repairmen's, warehousemen's, vendor's or
carriers' liens, or other similar liens arising in
the ordinary course of business and securing sums
which are not past due, or deposits or pledges to
obtain the release of any such liens, provided that
the Company shall have complied with Section 3.2 of
the Security Agreement.
(g) Leasebacks. Enter into any arrangements, directly or
indirectly, with any person, whereby the Company shall sell or
transfer any property, whether now owned or hereafter
acquired, used or useful in the Company's business, in
connection with the rental or lease of the property so sold or
transferred or of other property which the Company intends to
use for substantially the same purpose or purposes as the
property so sold or transferred.
- 19 -
(h) Change of Business. Enter into any business which is
substantially different from that presently conducted by the
Company without the written consent of the Director, which
consent shall not be unreasonably withheld.
(i) Modification of Senior Note Documents. Enter into any
modification, amendment or alteration of the Senior Note
Documents which changes the outstanding amount of the Senior
Notes or which changes the payment schedule for the Senior
Notes without the prior written consent of the Director.
[Balance of page intentionally left blank.]
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ARTICLE V
EVENTS OF DEFAULT, REMEDIES AND TERMINATION
Section 5.1. Events of Default. Each of the following shall be an
"Event of Default":
(a) The Company shall fail to pay any amount payable pursuant to
this Loan Agreement, the Note, any Security Document or any
other Loan Document on the date on which such payment is due
and payable, or within five (5) business days thereafter; or
(b) The Company shall fail to observe and perform any agreement,
term or condition contained in this Loan Agreement or any
other Loan Document, other than as required pursuant to
subsection (a) above, and such failure shall continue for a
period of thirty (30) days after the Company has knowledge
thereof; provided, however, that if the nature of the
Company's failure is such that more than thirty (30) days are
reasonably required for its cure, then the Company shall not
be deemed to be in default if the Company commences such cure
as soon as possible within said thirty (30) day period and
thereafter diligently prosecutes such cure to completion;
provided, further that such cure period will not apply to (i)
any failure which in the Director's good faith determination
is incapable of cure, (ii) any failure which has previously
occurred, (iii) any failure to maintain and keep in effect any
insurance required by the Loan Documents, or (iv) any failure
to permit the Director to inspect the Project and/or Project
Site, or the books and records of the Company; or
(c) Any representation or warranty made by the Company, or any of
the Company's officers, herein or in any other Loan Documents,
the Loan Approval Documents or in connection herewith or
therewith shall prove to have been incorrect in any material
respect when made; or
(d) The Company shall fail to pay any indebtedness of the Company,
or any interest or premium thereon, when due (whether by
scheduled maturity, required prepayment, by acceleration, on
demand or otherwise) and such failure shall continue after the
applicable grace period, if any, specified in the agreement or
instrument relating to such indebtedness; or any other default
under any agreement or instrument relating to any such
indebtedness, or any other event, shall occur and shall
continue after the applicable grace period, if any, specified
in such agreement or instrument, if the effect of such default
or event is to accelerate, or to permit the acceleration of,
the maturity of such indebtedness; or any such indebtedness
shall be declared to be due and payable, or required to be
prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof; provided
that, the foregoing shall not be deemed to be an Event of
Default if, at the Company's expense and after prior notice to
the Director, by appropriate proceedings diligently
prosecuted, the Company contests in good faith the validity or
amount of any of the foregoing items and during the period of
contest, and after notice to the Director, may permit the
items so contested to remain unpaid; provided further that, if
at any time the Director, in the Director's reasonable
discretion, shall instruct the Company to pay
- 21 -
any such items and such items are not paid within three (3)
days after notice from the Director, such failure to pay shall
be an Event of Default hereunder; or
(e) The Company commences a voluntary case concerning it under
Title 11 of the United States Code entitled "Bankruptcy" as
now or hereafter in effect, or any successor thereto (the
"Bankruptcy Code"); or an involuntary case is commenced
against the Company under the Bankruptcy Code and relief is
ordered against the Company, or the petition is controverted
but is not dismissed within sixty (60) days after the
commencement of the case; or the Company is not generally
paying its debts as such debts become due; or a custodian (as
defined in the Bankruptcy Code) is appointed for, or takes
charge of, all or substantially all of the property of the
Company; or the Company commences any other proceeding under
any reorganization, arrangement, readjustment of debt, relief
of debtors, dissolution, insolvency or liquidation or similar
law of any jurisdiction whether now or hereafter in effect; or
there is commenced against the Company any such proceeding
which remains undismissed for a period of sixty (60) days; or
the Company is adjudicated insolvent or bankrupt; or the
Company fails to controvert in a timely manner any such case
under the Bankruptcy Code or any such proceeding or any order
of relief or other order approving any such case or proceeding
or in the appointment of any custodian or the like of or for
it or any substantial part of its property or suffers any such
appointment to continue undischarged or unstayed for a period
of sixty (60) days; or the Company makes a general assignment
of for the benefit of creditors; or any action is taken by the
Company for the purpose of effecting any of the foregoing; or
a receiver or trustee or any other officer or representative
of the court or of creditors, or any court, governmental
officer or agency, shall under color of legal authority, take
and hold possession of any substantial part of the property or
assets of the Company for a period in excess of sixty (60)
days; or
(f) A judgment or order for the payment of money in excess of
Fifty Thousand Dollars ($50,000) shall be rendered against the
Company and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order, or (ii)
there shall be any period of thirty (30) consecutive days
during which a stay of enforcement of such judgment or order,
by reason of a pending appeal or otherwise, shall not be in
effect; or
(g) The Company fails to meet the Company's minimum funding
requirements under Section 301 et seq. of ERISA, with respect
to any of the Company's Plans; or
(h) Any event of default under the Senior Note Documents shall
have occurred and be continuing.
Section 5.2. Remedies on Default. If any Event of Default shall have
occurred and be continuing, the Director, at any time, at the Director's
election, may exercise any or all or any combination of the remedies conferred
upon or reserved to the Director under this Loan Agreement, the Security
Documents, the Note, any other Loan Document or any instrument or document
collateral thereto, or now or hereafter existing at law, or in equity or by
statute. Subject to the foregoing, any one or more of the following remedies may
be exercised:
- 22 -
(a) If the Loan has not been disbursed, the Director may terminate
any and all of the Director's obligations under this Loan
Agreement and the Commitment;
(b) The Director may declare all payments under the Note to be
immediately due and payable, whereupon the same shall become
immediately due and payable;
(c) The Director may exercise any or all or any combination of the
remedies provided to the Director under this Loan Agreement or
any of the other Loan Documents or any instrument or document
collateral thereto;
(d) The Director may have access to, inspect, examine and make
copies of the books, records, accounts and financial data of
the Company; and/or
(e) The Director may pursue all remedies now or hereafter existing
at law or in equity to collect all amounts then due and
thereafter to become due under this Loan Agreement, the Note,
the Security Documents or any other Loan Document, or to
enforce the performance and observance of any other obligation
or agreement of the Company under the Loan Documents,
including without limitation, as a secured party under the
Commercial Code (as defined in the Security Agreement) or
other similar laws in effect.
Section 5.3. No Remedy Exclusive. No remedy conferred upon or reserved
to the Director by this Loan Agreement is intended to be exclusive of any other
available remedy or remedies, but each and every such remedy shall be cumulative
and shall be in addition to every other remedy given under this Loan Agreement,
the Note, the Security Documents, each other Loan Document, the Intercreditor
Agreement, or now or hereafter existing at law, in equity or by statute. No
delay or omission to exercise any right or power accruing upon any default shall
impair any such right or power or shall be construed to be a waiver thereof, but
any such right and power may be exercised from time to time and as often as may
be deemed expedient. In order to entitle the Director to exercise any remedy
reserved to it in this Article, it shall not be necessary to give any notice,
other than such notice as may be expressly provided herein or required by law.
Section 5.4. Agreement to Pay Expenses and Attorneys' Fees. If an Event
of Default shall occur and the Director shall incur expenses, including
attorney's fees, in connection with the enforcement of this Loan Agreement, the
Note, the Security Documents, the Intercreditor Agreement, any other Loan
Document or the collection of sums due thereunder, the Company shall reimburse
the Director for the expenses so incurred upon demand. If any such expenses are
not so reimbursed, the amount thereof, together with interest thereon from the
date of demand for payment at the Interest Rate for Advances, shall constitute
additional indebtedness secured by the Security Documents, and in any action
brought to collect such indebtedness or to enforce the Security Documents, the
Director shall be entitled to seek the recovery of such expenses in such action.
Section 5.5. No Waiver. No failure by the Director to insist upon the
strict performance by the Company of any provision hereof shall constitute a
waiver of the Director's right to strict performance, and no express waiver
shall be deemed to apply to any other existing or subsequent right to remedy the
failure by the Company to observe or comply with any provision hereof.
- 23 -
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.1. Term of Loan Agreement. This Loan Agreement shall be and
remain in full force and effect from the date of its delivery until (a) the
termination of this Loan Agreement pursuant to Section 5.2(a) hereof, or (b)
such time as the Loan shall have been fully repaid and all other sums payable by
the Company under this Loan Agreement, the Security Documents, the Note and any
other Loan Documents shall have been indefeasibly paid in full.
Section 6.2. Notices. All notices, certificates, requests or other
communications hereunder shall be in writing and shall be deemed to be
sufficiently given when mailed by registered or certified mail, postage prepaid,
or sent by nationally recognized overnight courier service, or sent by facsimile
and confirmed by telephone and in each case addressed to the appropriate Notice
Address. The Company or the Director may, by notice given hereunder, designate
any further or different addresses to which subsequent notices, certificates,
requests or communications shall be sent.
Section 6.3. Extent of Covenants of the Director; No Personal
Liability. All covenants, obligations and agreements of the Director contained
in this Loan Agreement or any other Loan Document shall be effective to the
extent authorized and permitted by applicable law. No such covenant, obligation
or agreement shall be deemed to be a covenant, obligation or agreement of any
former, present or future Director in other than such Director's official
capacity acting pursuant to the Act, an no such Director shall be personally
liable or in any way personally obligated by reason hereof or any responsibility
under the Act.
Section 6.4. Binding Effect. This Loan Agreement shall inure to the
benefit of and shall be binding in accordance with its terms upon the Director,
the Company and their respective successors and assigns, provided, however, the
Company may not assign this Loan Agreement or any of the Loan Documents without
the prior written consent of the Director.
Section 6.5. Amendments and Supplements. This Loan Agreement may not be
amended or supplemented except by an instrument in writing executed by the
Director and the Company.
Section 6.6. Execution Counterparts. This Loan Agreement may be
executed in any number of counterparts, each of which shall be regarded as an
original and all of which shall constitute but one and the same instrument.
Section 6.7. Severability. If any provision of this Loan Agreement, or
any covenant, obligation or agreement contained herein is determined by a court
to be invalid or unenforceable, such determination shall not affect any other
provision, covenant, obligation or agreement, each of which shall be construed
and enforced as if such invalid or unenforceable provision were not contained
herein. Such invalidity or unenforceability shall not affect any valid and
enforceable application thereof, and each such provision, covenant, obligation
or agreement, shall be deemed to be effective, operative, made, entered into or
taken in the manner and to the full extent permitted by law.
- 24 -
Section 6.8. Captions; Entire Agreement. The captions and headings in
this Loan Agreement shall be solely for convenience of reference and shall in no
way define, limit or describe the scope or intent of any provisions or Sections
of this Loan Agreement. All exhibits and schedules to this Loan Agreement shall
be annexed hereto and shall be deemed to be part of this Loan Agreement. This
Loan Agreement and the other Loan Documents embody the entire agreement and
understanding between the Director and the Company and supersede all prior
agreements and understandings relating to the subject matter hereof.
Section 6.9. Interpretation. This Agreement shall be deemed to have
been prepared jointly by the parties hereto and any uncertainty or ambiguity
existing herein shall not be interpreted against any party but shall be
interpreted according to the rules for the interpretation of arm's-length
agreements.
Section 6.10. Mutual Waiver of Jury Trial. THE COMPANY AND THE
DIRECTOR, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH
COUNSEL, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT EITHER OF THEM
MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS
LOAN AGREEMENT, THE NOTE, THE SECURITY DOCUMENTS OR ANY RELATED INSTRUMENT OR
AGREEMENT, OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREBY, OR ANY COURSE OF
CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF EITHER OF
THEM. THIS WAIVER SHALL NOT IN ANY WAY AFFECT THE DIRECTOR'S ABILITY TO PURSUE
REMEDIES PURSUANT TO ANY CONFESSION OF JUDGMENT OR COGNOVIT PROVISION CONTAINED
IN THE NOTE, IN THE SECURITY DOCUMENTS OR ANY RELATED INSTRUMENT OR AGREEMENT.
NEITHER THE COMPANY NOR THE DIRECTOR SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM
OR OTHERWISE, ANY ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER
ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS
SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY THE
COMPANY OR THE DIRECTOR EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY BOTH OF THEM.
Section 6.11. Consent to Jurisdiction/Service of Process. The Company
hereby irrevocably agrees and submits to the exclusive jurisdiction of any state
or federal court located within Franklin County, Ohio, or, at the option of the
Director in its sole discretion, of any state or federal court(s) located within
any other county, state or jurisdiction in which the Director at any time or
from time to time chooses in its sole discretion to bring an action or otherwise
exercise a right or remedy, and the Company irrevocably waives any and all
objections based on forum non conveniens and/or objection to venue of any such
action or proceeding. The Company hereby irrevocably consents that all service
of process be made by certified mail directed to the Company at its address set
forth herein for notice purposes and service so made will be deemed completed
upon the earlier of the Company's actual receipt thereof or three (3) business
days after the same has been deposited in the U.S. Mail, postage prepaid.
Nothing contained herein will prevent the Director from servicing process in any
other manner permitted by law.
- 25 -
Section 6.12. Governing Law. This Loan Agreement shall be deemed to be
a contract made under the laws of the State and for all purposes shall be
governed by and construed in accordance with the laws of the State.
Section 6.13. Attorney Review. The terms and conditions of this Loan
Agreement (including all Exhibits) were reviewed by an attorney for the Company,
and said terms and conditions were explained to the appropriate
officers/representatives of the Company who, by their execution hereof, hereby
acknowledged that they fully understand the terms hereof.
Section 6.14. Time is of the Essence. Time is of the essence in all
respects hereunder.
[Balance of page intentionally left blank.]
- 26 -
IN WITNESS WHEREOF, this Loan Agreement has been executed and delivered
all as of the date first hereinbefore written.
THE DIRECTOR OF DEVELOPMENT OF THE STATE
OF OHIO, acting on behalf of the State of Ohio
By:_____________________________________________
Name:_______________________________________
Title:______________________________________
REPUBLIC ENGINEERED PRODUCTS LLC,
a Delaware limited liability company
By:_____________________________________________
Xxxxxx X. Xxxxxxxx, President and CEO
By:_____________________________________________
Xxxxxx X. Xxxxxx, Vice President of Finance
and Controller
- 27 -
EXHIBIT A
Form of Cognovit Promissory Note
[To be attached]
EXHIBIT B
Project Equipment
[To be attached]
EXHIBIT C
Legal Description of Project Site
[To be attached]
TABLE OF CONTENTS
(This Table of Contents is not a part of this Loan Agreement
and is only for convenience of reference.)
Preambles.............................................................................................. 1
ARTICLE I
DEFINITIONS
Section 1.1. Use of Defined Terms................................................................. 2
Section 1.2. Definitions.......................................................................... 2
Section 1.3. Certain Words and References......................................................... 5
ARTICLE II
DETERMINATIONS AND REPRESENTATIONS
Section 2.1. Determinations of the Director....................................................... 6
Section 2.2. Representations, Warranties and Covenants of the Company............................. 6
ARTICLE III
LOAN, PROVISION OF PROJECT AND CONDITIONS TO DISBURSEMENT
Section 3.1. Loan and Repayment................................................................... 10
Section 3.2. Provision of Project................................................................. 10
Section 3.3. [Reserved]........................................................................... 10
Section 3.4. Company Required to Pay Costs in Event Proceeds Insufficient......................... 10
Section 3.5. [Reserved]........................................................................... 10
Section 3.6. Conditions to Disbursement........................................................... 11
Section 3.7. Postponement of the Disbursement Date................................................ 13
Section 3.8. Disbursement of Loan................................................................. 14
Section 3.9. Payment of Costs; Indemnification.................................................... 14
ARTICLE IV
ADDITIONAL COVENANTS AND AGREEMENTS
Section 4.1. Affirmative Covenants of the Company................................................. 15
Section 4.2. Negative Covenants of the Company.................................................... 18
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ARTICLE V
EVENTS OF DEFAULT, REMEDIES AND TERMINATION
Section 5.1. Events of Default.................................................................... 21
Section 5.2. Remedies on Default.................................................................. 22
Section 5.3. No Remedy Exclusive.................................................................. 23
Section 5.4. Agreement to Pay Expenses and Attorneys' Fees........................................ 23
Section 5.5. No Waiver............................................................................ 23
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.1. Term of Loan Agreement............................................................... 24
Section 6.2. Notices.............................................................................. 24
Section 6.3. Extent of Covenants of the Director; No Personal Liability........................... 24
Section 6.4. Binding Effect....................................................................... 24
Section 6.5. Amendments and Supplements........................................................... 24
Section 6.6. Execution Counterparts............................................................... 24
Section 6.7. Severability......................................................................... 24
Section 6.8. Captions; Entire Agreement........................................................... 25
Section 6.9. Interpretation....................................................................... 25
Section 6.10. Mutual Waiver of Jury Trial.......................................................... 25
Section 6.11. Consent to Jurisdiction/Service of Process........................................... 25
Section 6.12. Governing Law........................................................................ 26
Section 6.13. Attorney Review...................................................................... 26
Section 6.14. Time is of the Essence............................................................... 26
Signatures .............................................................................................. 27
Exhibit A - Form of Cognovit Promissory Note
Exhibit B - Project Equipment
Exhibit C - Legal Description of Project Site
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================================================================================
LOAN AGREEMENT
between
THE DIRECTOR OF DEVELOPMENT
OF THE STATE OF OHIO
and
REPUBLIC ENGINEERED PRODUCTS LLC
Dated
as of
March 20, 2003
================================================================================
