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CREDIT AGREEMENT
by and among
IRON DYNAMICS, INC.,
THE LENDERS PARTIES HERETO FROM TIME TO TIME
and
MELLON BANK, N.A., as Issuing Bank and Agent,
Dated as of December 31, 1997
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Table of Contents
Section Title Page
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ARTICLE I DEFINITIONS; CONSTRUCTIONS
1.01 Certain Definitions........................................ 1
1.02 Construction............................................... 19
1.03 Accounting Principles...................................... 20
ARTICLE II THE CREDITS
2.01 Revolving Credit Loans..................................... 20
2.02 Revolving Credit Commitment Fee; Reduction of the
Revolving Credit Committed Amounts......................... 21
2.03 Term Loans................................................. 22
2.04 Term Loan Commitment Fees.................................. 23
2.05 Making of Loans ........................................... 23
2.06 Interest Rates............................................. 24
2.07 Conversion or Renewal of Interest Rate Options ............ 27
2.08 Prepayments Generally; Refinancing Fee..................... 28
2.09 Optional Prepayments....................................... 29
2.10 Mandatory Prepayments...................................... 29
2.11 Interest Payment Dates..................................... 30
2.12 Pro Rata Treatment; Payments Generally; Interest on
Overdue Amounts ........................................... 30
2.13 Additional Compensation in Certain Circumstances .......... 32
2.14 Taxes...................................................... 33
2.15 Funding by Branch, Subsidiary or Affiliate................. 35
2.16 Borrowing Base............................................. 35
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2.17 The Letter of Credit Subfacility........................... 38
2.18 Procedure for Issuance and Amendment of Letters of
Credit .................................................... 39
2.19 Letter of Credit Participating Interests................... 41
2.20 Letter of Credit Drawings and Reimbursements............... 41
2.21 Obligations Absolute....................................... 42
2.22 Additional Compensation in Certain Circumstances .......... 43
2.23 Further Assurances......................................... 43
2.24 Letter of Credit Applications.............................. 43
2.25 Cash Collateral for Letters of Credit...................... 43
2.26 Certain Provisions Relating to the Issuing Bank ........... 44
ARTICLE III REPRESENTATIONS AND WARRANTIES
3.01 Corporate Status........................................... 45
3.02 Corporate Power and Authorization.......................... 45
3.03 Execution and Binding Effect............................... 45
3.04 Governmental Approvals and Filings......................... 45
3.05 Absence of Conflicts....................................... 46
3.06 Projections................................................ 46
3.07 Labor Matters.............................................. 47
3.08 Absence of Undisclosed Liabilities......................... 47
3.09 Accurate and Complete Disclosure........................... 47
3.10 Commitments................................................ 47
3.11 Solvency................................................... 47
3.12 Margin Regulations......................................... 47
3.13 Subsidiaries............................................... 47
3.14 Partnerships, etc.......................................... 47
3.15 Ownership and Control...................................... 48
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3.16 Litigation................................................. 48
3.17 Absence of Events of Default............................... 48
3.18 Absence of Other Conflicts................................. 48
3.19 Insurance.................................................. 48
3.20 Title to Property.......................................... 48
3.21 Intellectual and Other Property............................ 48
3.22 Taxes...................................................... 49
3.23 Employee Benefits.......................................... 49
3.24 Environmental Matters...................................... 49
3.25 Utility Loan............................................... 49
3.26 Project Compliance With Laws; Permits...................... 49
3.27 Sufficiency of Project Agreements.......................... 50
3.28 Subdivision; Separate Assessment........................... 50
3.29 Utility Services........................................... 50
3.30 Potential Conflicts of Interest............................ 51
3.31 Flood Area; Filled Land.................................... 51
3.32 Survey and Other Documents................................. 51
ARTICLE IV CONDITIONS OF LENDING
4.01 Conditions to Initial Loans and Letters of Credit ......... 51
4.02 Conditions to Term Loan Commitment Period Loans ........... 56
4.03 Conditions to All Loans or Letters of Credit............... 58
ARTICLE V AFFIRMATIVE COVENANTS
5.01 Basic Reporting Requirements............................... 59
5.02 Insurance.................................................. 64
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5.03 Payment of Taxes and Other Potential Charges
and Priority Claims ....................................... 64
5.04 Preservation of Corporate Status........................... 64
5.05 Governmental Approvals and Filings......................... 64
5.06 Maintenance of Properties.................................. 65
5.07 Avoidance of Other Conflicts............................... 65
5.08 Financial Accounting Practices............................. 65
5.09 Use of Proceeds............................................ 65
5.10 Continuation of or Change in Business...................... 65
5.11 Consolidated Tax Return.................................... 65
5.12 Fiscal Year................................................ 65
5.13 Tax Sharing Agreement...................................... 65
5.14 Construction of the Project................................ 65
5.15 Future Project Agreements.................................. 66
5.16 Consents to Assignment of Contract......................... 66
5.17 Debt Service Reserve Account............................... 66
ARTICLE VI NEGATIVE COVENANTS
6.01 Financial Covenants........................................ 67
6.02 Liens...................................................... 67
6.03 Indebtedness............................................... 68
6.04 Guarantees, Indemnities, etc............................... 69
6.05 Loans, Advances and Investments............................ 69
6.06 Dividends and Related Distributions........................ 69
6.07 Sale-Leasebacks............................................ 70
6.08 Leases..................................................... 70
6.09 Merger, Acquisitions, etc.................................. 70
6.10 Dispositions of Properties................................. 70
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6.11 No Plans................................................... 71
6.12 Dealings with Affiliates................................... 71
6.13 Capital Expenditures....................................... 71
6.14 Limitations on Modification of Certain Agreements
and Instruments ........................................... 72
6.15 Limitation on Other Restrictions on Liens.................. 72
6.16 Limitation on Other Restrictions on Amendment of
the Loan Documents, etc. .................................. 72
6.17 Maintenance of Business.................................... 72
6.18 Subsidiaries............................................... 72
6.19 Change Orders.............................................. 72
ARTICLE VII DEFAULTS
7.01 Events of Default.......................................... 73
7.02 Consequences of an Event of Default........................ 75
ARTICLE VIII THE AGENT
8.01 Appointment................................................ 77
8.02 General Nature of Agent's Duties........................... 77
8.03 Exercise of Powers......................................... 77
8.04 General Exculpatory Provisions............................. 78
8.05 Administration by the Agent................................ 78
8.06 Lender Not Relying on Agent or Other Lenders............... 79
8.07 Indemnification............................................ 79
8.08 Agent in its Individual Capacity........................... 80
8.09 Holders of Notes........................................... 80
8.10 Successor Agent............................................ 80
8.11 Additional Agents.......................................... 80
8.12 Calculations............................................... 81
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8.13 Agent's Fee................................................ 81
8.14 Funding by Agent........................................... 81
ARTICLE IX MISCELLANEOUS
9.01 Holidays................................................... 81
9.02 Records.................................................... 81
9.03 Amendments and Waivers..................................... 81
9.04 No Implied Waiver; Cumulative Remedies..................... 82
9.05 Notices.................................................... 83
9.06 Expenses; Taxes; Indemnity................................. 83
9.07 Severability............................................... 84
9.08 Prior Understandings....................................... 84
9.09 Duration; Survival......................................... 84
9.10 Counterparts............................................... 85
9.11 Limitation on Payments..................................... 85
9.12 Set-Off.................................................... 85
9.13 Sharing of Collections..................................... 85
9.14 Successors and Assigns; Participations; Assignments........ 86
9.15 Confidentiality............................................ 88
9.16 Governing Law; Submission to Jurisdiction; Waiver
of Jury Trial; Limitation of Liability..................... 88
Exhibit A Revolving Credit Note
Exhibit B Form of Term Loan Note
Exhibit C Form of Transfer Supplement
Exhibit D Form of Borrowing Base Certificate
Exhibit E Form of Annual Compliance Certificate
Exhibit F Form of Quarterly Compliance Certificate
Exhibit G Form of Security Agreement
Exhibit J Form of Mortgage
Exhibit K Form of Standard Xxxxxxxx
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Exhibit L Form of Letter of Credit Agreement
Exhibit M Form of Assignment of Contracts
Exhibit N Form of Consent to Assignment of Contracts
Exhibit O Form of Use of Advance Certificate
Exhibit P Form of Project Status Certificate
Exhibit Q Form of Adequacy of Funds Certificate
Exhibit V Form of Consent to Assignment of Future Project Agreements
Exhibit W Form of Project Monitor's Preliminary Acceptance Certificate
Exhibit W-2 Form of Project Monitor's Completion Certificate
Exhibit W-3 Form of Borrower's Final Acceptance Certificate
Exhibit X Form of Borrower's Preliminary Acceptance Certificate
Exhibit X-2 Form of Borrower's Completion Certificate
Exhibit X-3 Form of Project Monitor's Final Acceptance Certificate
Exhibit Y Form of Construction Progress Reports
Exhibit Z Form of Project Monitor Certificate
Exhibit AA Form of Future Project Agreements
Exhibit BB Form of Agreed Upon Procedures Report
Exhibit CC Form of Assignment of Future Project Agreements
Exhibit DD Title Commitment
Exhibit EE Terms of Replacement Revolver Facility
Schedule 1.01B Project Agreements
Schedule 1.01C Schedule of Project Costs constituting the Project Budget
Schedule 1.01D List of Specifications of the Project
Schedule 1.01E Future Project Agreements
Schedule 1.01F Assets Subject to Lien of Utility Loan
Schedule 1.01G Mannesmann Documents
Schedule 1.01H Mitsubishi Documents
Schedule 1.01I Tax Sharing Agreement
Schedule 3.04 Matters (other than Required Project Permits) in connection
with the execution and delivery of any Loan Document for which
Governmental Action is required
Schedule 3.05 Matters in connection with the execution of any Loan Document
as to which a consent or waiver is required and has been
obtained
Schedule 3.09 Listing of applicable Project Monitor firms, law firms,
appraisal firms, etc. to which IDI may provide information in
connection with any Loan Document and to whom IDI must make an
accurate and complete disclosure
Schedule 3.10 Other Commitments for financing (other than the Revolving
Credit Commitments, and the Term Loan and the Utility Loan
Commitments) received
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by IDI
Schedule 3.15 Authorized capitalization of IDI and certain information re:
IDI's capital stock
Schedule 3.16 Pending litigation
Schedule 3.23 Liability of IDI in connection with any Pension-Related Event
Schedule 3.26 Required Project Permits
Schedule 3.27 Listing of services, materials and equipment that are
necessary to construct, operate and maintain the Project but
not to be performed for or supplied to IDI pursuant to the
Project Agreements in effect on the Closing Date
Schedule 3.28 Exceptions to the Project Site being a single parcel from and
after the Recording Date
Schedule 3.29 Exceptions to the availability of all utility services
necessary for the construction, operation and maintenance of
the Project at the boundaries of the Project Site from and
after the Recording Date
Schedule 3.30 Potential Conflicts of Interest
Schedule 4.01(b) Contracts for which assignments of contracts and consents
thereto are required
Schedule 4.01(k) Counsel for other parties to certain contracts with IDI
Schedule 4.01(n) Contracts re: construction, engineering, equipment, etc.
Schedule 4.02(a) Proceeds that are receivable on or before the date of such
Loan or Letter of Credit
Schedule 4.02(e) Procedure for obtaining draw-related certificates
Schedule 5.02 Certain insurance required by the Required Lenders to be
maintained by IDI
Schedule 5.14(b) Contracts for which the delivery of the complete release of
liens may be delayed until final payment
Schedule 5.16 Contracts for which consents to assignment of contract will be
delivered
Schedule 6.02(f) Permitted liens
Schedule 6.04 Guaranty Equivalents to which Borrower is permitted to be or
to become subject
Schedule 6.05 Loans and investments existing on the date of the Credit
Agreement which are permitted to remain outstanding
Schedule 6.12 Contracts existing on the date of the Credit Agreement between
Borrower and
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any of its Affiliates
Schedule 6.14 Certain sections of Borrower's articles of incorporation and
bylaws that Borrower may amend
Schedule 7.01(d) Security Documents for which a default of any of the covenants
therein constitutes an immediate Event of Default
Schedule 9.15 Contracts containing information to be treated as confidential
Schedule Q [See Schedule Q to Adequacy of Funds Certificate]
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CREDIT AGREEMENT
THIS AGREEMENT, dated as of December 31, 1997, is made by and among
IRON DYNAMICS, INC., an Indiana corporation (the "Borrower"), the lenders
parties hereto from time to time (the "Lenders", as defined further below),
MELLON BANK, N.A., a national banking association, as issuing bank (in such
capacity, the "Issuing Bank", as defined further below) and MELLON BANK, N.A., a
national banking association, as agent for the Lenders hereunder (in such
capacity, together with its successors in such capacity, the "Agent").
Recitals:
WHEREAS, the Borrower wishes to borrow an aggregate amount of
$65,000,000, and this Agreement provides for (i) Term Loans in an aggregate
principal amount of up to $55,000,000 to be used to fund the construction and
operation of a reduced iron pellet and pig iron producing facility in Xxxxxx,
Indiana to produce approximately 600,000 metric tons per year of direct reduced
iron pellets yielding approximately 523,000 metric tons per year of liquid pig
iron (the "Project"), and (ii) Revolving Credit Loans or letters of credit in an
aggregate principal (or stated) amount of up to $10,000,000 to be used by
Borrower for working capital purposes.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained and intending to be legally bound hereby, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS; CONSTRUCTION
1.01. Certain Definitions. In addition to other words and terms
defined elsewhere in this Agreement, as used herein the following words and
terms shall have the following meanings, respectively, unless the context hereof
otherwise clearly requires:
"Adequacy of Funds End Date" shall mean the earlier to occur of (i)
the last day of the Term Loan Commitment Period and (ii) the Final
Acceptance Date.
"Adjusted Fixed Charges" for any period, with respect to the
Borrower, shall mean the sum of (a) Interest Expense for such period and
(b) principal payments which would have been scheduled to be made with
respect to any outstanding Indebtedness for such period if the initial
amount of Term Loans had been equal to the actual initial amount of Term
Loans minus the amount on deposit in the Debt Service Reserve Account on
the last day of such period, all as determined in accordance with GAAP.
"Administration Agreement" shall mean the agreement between Borrower
and SDI dated on or prior to the Closing Date.
"Affected Lender" shall have the meaning set forth in Section
2.06(e) hereof.
"Affiliate" of a Person (the "Specified Person") shall mean (a) any
Person which directly or indirectly controls, or is controlled by, or is
under common control with, the Specified Person, (b) any director or
officer (or, in the case of a Person which is not a corporation, any
individual having analogous powers) of the Specified Person or of a Person
who is an Affiliate of the Specified Person within the meaning of the
preceding clause (a), and (c) for each individual who is an Affiliate of
the Specified Person within the meaning of the foregoing clauses (a) or
(b), any other individual related to such Affiliate by consanguinity
within the third degree or in a step or adoptive relationship within such
third degree or related by affinity with such Affiliate or any such
individual. For purposes of the preceding sentence, "control" of a Person
means (a) the
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possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through
the ownership of voting securities, by contract or otherwise and (b) in
any case shall include direct or indirect ownership (beneficially or of
record) of, or direct or indirect power to vote, 5% or more of the
outstanding shares of any class of capital stock of such Person (or in the
case of a Person that is not a corporation, 5% or more of any class of
equity interest).
"Applicable Margin" shall have the meaning set forth in Section
2.06(b) hereof.
"Assignment of Contracts" shall have the meaning set forth in
Section 4.01(b)(i)(B) hereof.
"Base Rate" shall have the meaning set forth in Section 2.06(a)
hereof.
"Base Rate Option" shall have the meaning set forth in Section
2.06(a) hereof.
"Base Rate Portion" of any Loan or Loans shall mean at any time the
portion, including the whole, of such Loan or Loans bearing interest at
such time (i) under the Base Rate Option or (ii) in accordance with
Section 2.12(c)(ii) hereof. If no Loan or Loans is specified, "Base Rate
Portion" shall refer to the Base Rate Portion of all Loans outstanding at
such time.
"Borrowing Base" shall have the meaning set forth in Section 2.16
hereof.
"Borrowing Base Certificate" shall have the meaning set forth in
Section 2.16(e) hereof.
"Business Day" shall mean any day other than a Saturday, Sunday,
public holiday under the laws of the Commonwealth of Pennsylvania or of
the State of New York or other day on which banking institutions generally
are authorized or obligated to close in Pittsburgh, Pennsylvania or in New
York, New York.
"Capital Expenditures" of any Person shall mean, for any period, all
expenditures (whether paid in cash or accrued as liabilities during such
period) of such Person during such period which would be classified as
capital expenditures for purposes of GAAP (including, without limitation,
expenditures for maintenance and repairs which are capitalized, and
Capitalized Leases to the extent an asset is recorded in connection
therewith in accordance with GAAP).
"Capitalized Lease" shall mean at any time any lease which is, or is
required under GAAP to be, capitalized on the balance sheet of the lessee
at such time, and "Capitalized Lease Obligation" of any Person at any time
shall mean the aggregate amount which is, or is required under GAAP to be,
reported as a liability on the balance sheet of such Person at such time
as lessee under a Capitalized Lease.
"Cash Equivalent Investments" shall mean any of the following, to
the extent acquired for investment and not with a view to achieving
trading profits: (a) obligations fully backed by the full faith and credit
of the United States of America maturing not in excess of nine months from
the date of acquisition, (b) commercial paper maturing not in excess of
nine months from the date of acquisition and rated "P-2" by Xxxxx'x
Investors Service or "A-2" by Standard & Poor's Corporation on the date of
acquisition, (c) the following obligations of any domestic commercial bank
having capital and surplus in excess of $500,000,000, which has, or the
holding company of which has, a commercial paper rating meeting the
requirements specified in clause (b) above: (i) time deposits,
certificates of deposit and acceptances maturing not in excess of nine
months from the date of acquisition, or (ii) repurchase obligations with a
term of not more than seven days for underlying securities of the type
referred to in clause (a) above and (d)
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mutual funds investing solely in obligations described in clauses (a), (b)
or (c) of this definition.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, and any successor statute of
similar import, and regulations thereunder, in each case as in effect from
time to time.
"CERCLIS" shall mean the Comprehensive Environmental Response,
Compensation and Liability Information System List, as the same may be
amended from time to time.
"Change of Control" shall mean that at any time, prior to the date
on which the conditions set forth for a Level III Day shall have been
satisfied and the Final Acceptance Date shall have occurred, SDI shall
fail to own (beneficially and of record) 100% of the equity securities of
all classes of Borrower, except for liens in favor of certain lenders to
SDI in effect only prior to the Closing Date, free and clear of any
security interest, lien, pledge or claim or the failure of SDI to maintain
effective management control of Borrower, including without limitation,
failure to retain the right to elect at least a majority of the board of
directors of Borrower and at any time thereafter, SDI should fail to own
(beneficially and of record) at least 51% of the equity securities of all
classes of Borrower free and clear of any security interest, lien, pledge
or claim or the failure of SDI to retain the right to elect at least a
majority of the board of directors of Borrower.
"Closing Date" shall mean the date the initial Loan is made or
Letter of Credit is issued hereunder or such earlier date as may be
designated by Borrower to Agent upon not less than 10 days written notice.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute of similar import, and regulations thereunder, in each
case as in effect from time to time. References to sections of the Code
shall be construed also to refer to any successor sections.
"Collateral" shall mean the property from time to time subject to or
purported to be subject to the Liens of the Security Documents.
"Commitment Percentage" of a Lender at any time shall mean the
Commitment Percentage for such Lender set forth below its name on the
signature page hereof, subject to transfer to another Lender as provided
in Section 9.14 hereof.
"Commitments" of a Lender shall mean the Revolving Credit Commitment
and the Term Loan Commitment.
"Completion" "Complete" and "Completed" with respect to the
construction of the Project shall mean that (a) construction of the
Project in accordance with the Design and Construction Standard shall have
been completed and the Preliminary Acceptance Date and the Final
Acceptance Date shall have occurred, (b) the Project Monitor shall have
delivered to the Agent, with a copy for each Lender, a certificate in the
form of Exhibit W-2 hereto, with the blanks filled, and the Borrower shall
have delivered to the Agent, with a copy for each Lender, a certificate in
the form of Exhibit X-2 hereto, with the blanks appropriately filled, (c)
the Agent shall have received, with a copy for each Lender, a complete
release of liens signed by all contractors, subcontractors, materialmen
and suppliers providing goods and services to the Project who have
contract prices in excess of $1,000,000, except with respect to Liens
contested in good faith which are Permitted Liens under Section 6.02(c),
and (d) the Agent shall have theretofore received, with a copy for each
Lender, copies of all Required Project Permits and to the extent that the
same continue to be needed, they shall be in full force and effect and no
longer subject to appeal.
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"Consents to Assignment of Contracts" shall have the meaning set
forth in Section 4.01(b)(i)(C) hereof.
"Letter of Credit Agreement" shall mean the letter of credit
agreement executed and delivered by the Borrower substantially in the form
of Exhibit L hereto.
"Contractual Obligations" shall mean, as to any Person, any
provision of any security issued by such Person or of any agreement,
undertaking, contract, indenture, mortgage, deed of trust or other
instrument to which such Person is a party or by which it or any of its
property (now owned or hereafter acquired) is bound.
"Controlled Group Member" shall mean each trade or business (whether
or not incorporated) which together with the Borrower is treated as a
single employer under Sections 4001(a)(14) or 4001(b)(1) of ERISA or
Sections 414(b), (c), (m) or (o) of the Code.
"Corresponding Source of Funds" shall mean, in the case of any
Funding Segment of the Euro-Rate Portion, the proceeds of hypothetical
receipts by a Notional Euro-Rate Funding Office or by a Lender through a
Notional Euro-Rate Funding Office of one or more Dollar deposits in the
interbank eurodollar market at the beginning of the Euro-Rate Funding
Period corresponding to such Funding Segment having maturities
approximately equal to such Euro-Rate Funding Period and in an aggregate
amount approximately equal to such Lender's Pro Rata share of such Funding
Segment.
"Cumulative Net Income" shall mean for the period from December 31,
1997 until the end of the fiscal quarter completed most recently at the
time of measurement, the net earnings (without deduction for losses
incurred in any completed fiscal year or in any completed fiscal quarter
in the then current fiscal year) after taxes of the Borrower; provided,
that there shall be deducted therefrom (a) any restoration to income of
any contingency reserve, except to the extent that provision for such
reserve was made against income during such period, and (b) any gain
arising from the acquisition of any securities, or the extinguishment,
under GAAP, of any Indebtedness, of the Borrower.
"Cure Period" has the meaning ascribed thereto in Section 7.02(c).
"Current Assets" at any time shall mean the "current assets" of the
Borrower determined in accordance with GAAP, excluding advanced payments
on goods not yet delivered, and monies held in environmental or
reclamation escrow accounts or in the Debt Service Reserve Account to the
extent included in "current assets".
"Current Liabilities" at any time shall mean the "current
liabilities" of the Borrower determined in accordance with GAAP (excluding
current maturities of Indebtedness for borrowed money).
"Debt Service Reserve Account" shall mean the account established
and maintained by Borrower at Agent in accordance with the provisions of
Section 5.17 hereof.
"Design and Construction Standard" shall mean the design,
construction, equipping and completion of the Project (a) in a good and
workmanlike manner, (b) in such manner as to assure that the Project will
meet the Performance Guaranties under and as defined in the Mitsubishi
Documents and the Performance Guaranties under and as defined in the
Mannesmann Documents, and the standard herein set forth in the definition
of Final Acceptance, (c) without infringing on the patent rights and
similar rights of others and (d) in accordance with the Specifications
(except for variations which are, individually and collectively, de
minimis and which, if they had been the subject of change orders, would
have been permitted by
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Section 6.19), all applicable Required Project Permits, all applicable
Laws and restrictive covenants, sound engineering and construction
practice and sound iron and steel industry practice.
"Dollar," "Dollars" and the symbol "$" shall mean lawful money of
the United States of America.
"Early Period" shall mean the period of time commencing on the date
hereof and ending on the earlier to occur of (i) the date of the first
request by the Borrower for Term Loans and (ii) July 1, 1998.
"EBITDA" for any period, with respect to the Borrower, shall mean
the sum of (a) Net Income for such period, (b) Interest Expense for such
period, (c) charges against income for foreign, federal, state and local
income taxes for such period, (d) extraordinary losses to the extent
included in determining such Net Income, (e) depreciation expense for such
period, and (f) amortization expense for such period, minus (g)
extraordinary gains to the extent included in determining such Net Income,
(h) interest income, and (i) capitalized losses (exclusive of capitalized
interest), all as determined in accordance with GAAP.
"Eligible Inventory" shall have the meaning set forth in Section
2.16(d) hereof.
"Eligible Receivables" shall have the meaning set forth in Section
2.16(b) hereof.
"Environmental Affiliate" shall mean, with respect to any Person,
any other Person whose liability (contingent or otherwise) for any
Environmental Claim such Person has retained, assumed or otherwise is
liable for (by Law, agreement or otherwise).
"Environmental Approvals" shall mean any Governmental Action
pursuant to or required under any Environmental Law.
"Environmental Claim" shall mean, with respect to any Person, any
action, suit, proceeding, investigation, notice, claim, complaint, demand,
request for information or other communication (written or oral) by any
other Person (including but not limited to any Governmental Authority,
citizens' group or present or former employee of such Person) alleging,
asserting or claiming any actual or potential (a) violation of any
Environmental Law, (b) liability under any Environmental Law or (c)
liability for investigatory costs, cleanup costs, governmental response
costs, natural resources damages, property damages, personal injuries,
fines or penalties arising out of, based on or resulting from the
presence, or release into the environment, of any Environmental Concern
Materials at any location, whether or not owned by such Person.
"Environmental Cleanup Site" shall mean any location which is listed
or proposed for listing on the National Priorities List, on CERCLIS or on
any similar state list of sites requiring investigation or cleanup, or
which is the subject of any pending or threatened action, suit, proceeding
or investigation related to or arising from any alleged violation of any
Environmental Law.
"Environmental Concern Materials" shall mean (a) any flammable
substance, explosive, radioactive material, hazardous material, hazardous
waste, toxic substance, solid waste, pollutant, contaminant or any related
material, raw material, substance, product or by-product of any substance
specified in or regulated or otherwise affected by any Environmental Law
(including but not limited to any "hazardous substance" as defined in
CERCLA or any similar state Law), (b) any toxic chemical or other
substance from or related to industrial, commercial or institutional
activities, and (c) asbestos, gasoline, diesel fuel, motor oil, waste and
used oil,
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heating oil and other petroleum products or compounds, polychlorinated
biphenyls, radon and urea formaldehyde.
"Environmental Law" shall mean any Law, whether now existing or
subsequently enacted or amended, relating to (a) pollution or protection
of the environment, including natural resources, (b) exposure of Persons,
including but not limited to employees, to Environmental Concern
Materials, (c) protection of the public health or welfare from the effects
of products, by-products, wastes, emissions, discharges or releases of
Environmental Concern Materials or (d) regulation of the manufacture, use
or introduction into commerce of Environmental Concern Materials including
their manufacture, formulation, packaging, labeling, distribution,
transportation, handling, storage or disposal. Without limitation,
"Environmental Law" shall also include any Environmental Approval and the
terms and conditions thereof.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, and any successor statute of similar import, and
regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.
"Euro-Rate" shall have the meaning set forth in Section 2.06(a)
hereof.
"Euro-Rate Funding Period" shall have the meaning set forth in
Section 2.06(c) hereof.
"Euro-Rate Option" shall have the meaning set forth in Section
2.06(a) hereof.
"Euro-Rate Portion" of any Loan or Loans shall mean at any time the
portion, including the whole, of such Loan or Loans bearing interest at
any time under the Euro-Rate Option or at a rate calculated by reference
to the Euro-Rate under Section 2.12(c)(i) hereof. If no Loan or Loans is
specified, "Euro-Rate Portion" shall refer to the Euro-Rate Portion of all
Loans outstanding at such time.
"Euro-Rate Reserve Percentage" shall have the meaning set forth in
Section 2.06(a) hereof.
"Event of Default" shall mean any of the Events of Default described
in Section 7.01 hereof.
"Excess Cash Flow" for any period, with respect to any Person or
group of Persons shall mean the net increase, if any, in cash and cash
equivalents (including the net cash provided or used by the operating and
investing activities (but not, except as set forth below, financing
activities) of such Person or group, reflecting actual operating income,
capital expenditures and changes in working investment), during such
period as presented in such Person's or group's statement of cash flows
for such period prepared in conformity with GAAP (on a consolidated basis,
if applicable) and set forth in such Person's or group's audited year-end
financial statements; except that Excess Cash Flow for any period shall be
reduced (but not to an amount less than zero) by principal payments of
Indebtedness (other than payments on Revolving Credit Loans and other than
payments on Term Loans pursuant to Section 2.10(b) hereof) and Stock
Payments made pursuant to Section 6.06(a) hereof and there shall be
excluded from the calculation of Excess Cash Flow for any period payments
of Project Costs. For the purpose of the preparation of and presentation
of said statement of cash flows of any Person or group of Persons all
investments qualifying as a "cash equivalent" in accordance with GAAP
shall be included in the calculation and presentation of such Person's or
group's statement of cash flows without regard to such Person's or group's
policy concerning which of such investments are treated as cash
equivalents on its statement of cash flows.
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17
"Federal Funds Effective Rate" for any day shall mean the rate per
annum (rounded upward to the nearest 1/100 of 1%) announced by the Federal
Reserve Bank of New York (or any successor) on such day as being the
weighted average of the rates on overnight Federal funds transactions
arranged by Federal funds brokers on the previous trading day, as computed
and announced by such Federal Reserve Bank (or any successor) in
substantially the same manner as such Federal Reserve Bank computes and
announces the weighted average it refers to as the "Federal Funds
Effective Rate" as of the date of this Agreement; provided, that if such
Federal Reserve Bank (or its successor) does not announce such rate on any
day, the "Federal Funds Effective Rate" for such day shall be the Federal
Funds Effective Rate for the last day on which such rate was announced.
"Final Acceptance" shall mean the achievement by the Project of
production of direct reduced iron pellets from the rotary hearth furnace
at an average of 62.5 metric tons per hour for 30 consecutive days with an
85.0% degree of metallization and 73.0% metallic iron and production of
liquid pig iron from the submerged arc furnace at an average of 55.0
metric tons per hour for 30 consecutive days at 95.0% metallization.
"Final Acceptance Date" shall mean the earliest date on which all of
the following shall have occurred and on which no Event of Default or
Potential Default shall have occurred and be continuing or shall exist:
(a) the construction of the Project shall have been Completed, (b) Final
Acceptance shall have been achieved and (c) the Project Monitor shall have
delivered to the Agent, with a copy to each Lender, a certificate in the
form of Exhibit W-3 hereto with the blanks appropriately filled, and the
Borrower shall have delivered to the Agent, with a copy for each Lender, a
certificate in the form of Exhibit X-3 hereto, with the blanks
appropriately filled.
"Financial Covenant Date" shall mean the earlier of (a) the last day
of the first fiscal quarter after the Final Acceptance Date and (b) June
30, 2000.
"Fixed Charges" for any period, with respect to the Borrower, shall
mean the sum of (a) Interest Expense for such period and (b) scheduled
principal payments with respect to any outstanding Indebtedness for such
period all as determined in accordance with GAAP.
"Fixed Charge Coverage Ratio" for any period shall mean the ratio of
(a) EBITDA for such period minus consolidated Capital Expenditures of the
Borrower for such period to (b) Adjusted Fixed Charges for such period.
"Funded Indebtedness" of a person at any time shall mean all
Indebtedness (including the current portion thereof) of such person which
would at such time be classified in whole or part as a long-term liability
of such person in accordance with GAAP and shall also and in any event
include (i) any Indebtedness having a final maturity more than one year
from the date of creation of such Indebtedness and (ii) any Indebtedness,
regardless of its term, which is renewable or extendible by such person
(pursuant to the terms thereof or pursuant to a revolving credit or
similar agreement or otherwise) to a date more than one year from such
date or more than one year from the date of creation of such Indebtedness.
"Funding Breakage Date" shall have the meaning set forth in Section
2.13(b) hereof.
"Funding Breakage Indemnity" shall have the meaning set forth in
Section 2.13(b) hereof.
"Funding Periods" shall have the meaning set forth in Section
2.06(c) hereof.
"Funding Segment" of the Euro-Rate Portion of the Revolving Credit
Loans or the Term Loans at any time shall mean the entire principal amount
of such Portion to which at the time in
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question there is applicable a particular Funding Period beginning on a
particular day and ending on a particular day. (By definition, each such
Portion is at all times composed of an integral number of discrete Funding
Segments and the sum of the principal amounts of all Funding Segments of
any such Portion at any time equals the principal amount of such Portion
at such time.)
"Future Project Agreement" shall mean any contract or agreement
described on Schedule 1.01E hereof, and any contract or agreement (or
series of related contracts or agreements) entered into by any Loan Party
after the date hereof for (a) the purchase of raw materials of 75,000
metric tonnes or more annually for a term of one year or more, (b) the
sale of product for amounts of $4,000,000 or more annually for a term of
one year or more, (c) the disposal of Environmental Concern Material (and
other by-products of the Project) for a term of one year or more or (d)
the provision of materials or services for the construction of the Project
for a contract price of $1,000,000 or more.
"GAAP" shall have the meaning set forth in Section 1.03 hereof.
"Governmental Action" shall have the meaning set forth in Section
3.04 hereof.
"Governmental Authority" shall mean any government or political
subdivision or any agency, authority, bureau, central bank, commission,
department or instrumentality of either, or any court, tribunal, grand
jury or public or private mediator or arbitrator, in each case whether
foreign or domestic.
"Guaranty Equivalent": A Person (the "Deemed Guarantor") shall be
deemed to be subject to a Guaranty Equivalent in respect of any
indebtedness, obligation or liability (the "Assured Obligation") of
another Person (the "Deemed Obligor") if the Deemed Guarantor directly or
indirectly guarantees, becomes surety for, endorses, assumes, agrees to
indemnify the Deemed Obligor against, or otherwise agrees, becomes or
remains liable (contingently or otherwise) for, such Assured Obligation.
Without limitation, a Guaranty Equivalent shall be deemed to exist if a
Deemed Guarantor agrees, becomes or remains liable (contingently or
otherwise), directly or indirectly: (a) to purchase or assume, or to
supply funds for the payment, purchase or satisfaction of, an Assured
Obligation, (b) to make any loan, advance, capital contribution or other
investment in, or to purchase or lease any property or services from, a
Deemed Obligor (i) to maintain the solvency of the Deemed Obligor, (ii) to
enable the Deemed Obligor to meet any other financial condition, (iii) to
enable the Deemed Obligor to satisfy any Assured Obligation or to make any
Stock Payment or any other payment, or (iv) to assure the holder of such
Assured Obligation against loss, (c) to purchase or lease property or
services from the Deemed Obligor regardless of the non-delivery of or
failure to furnish such property or services, (d) in a transaction having
the characteristics of a take-or-pay or throughput contract or as
described in paragraph 6 of FASB Statement of Financial Accounting
Standards No. 47, or (e) in respect of any other transaction the effect of
which is to assure the payment or performance (or payment of damages or
other remedy in the event of nonpayment or nonperformance) of any Assured
Obligation.
"Indebtedness" of a Person shall mean:
(a) All obligations on account of money borrowed by, or credit
extended to or on behalf of, or for or on account of deposits with
or advances to, such Person;
(b) All obligations of such Person evidenced by bonds,
debentures, notes or similar instruments;
(c) All obligations of such Person for the deferred purchase
price of property or
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services;
(d) All obligations secured by a Lien on property owned by
such Person (whether or not assumed); and all obligations of such
Person under Capitalized Leases (without regard to any limitation of
the rights and remedies of the holder of such Lien or the lessor
under such Capitalized Lease to repossession or sale of such
property);
(e) The face amount of all letters of credit issued for the
account of such Person and, without duplication, the unreimbursed
amount of all drafts drawn thereunder, and all other obligations of
such Person associated with such letters of credit or draws thereon;
(f) All obligations of such Person in respect of acceptances
or similar obligations issued for the account of such Person;
(g) All obligations of such Person under a product financing
or similar arrangement described in paragraph 8 of FASB Statement of
Accounting Standards No. 49 or any similar requirement of GAAP; and
(h) All obligations of such Person under any interest rate or
currency protection agreement, interest rate or currency future,
interest rate or currency option, interest rate or currency swap or
cap or other interest rate or currency hedge agreement.
"Indemnified Parties" shall mean the Agent, the Lender Parties, the
Issuing Bank their respective affiliates, and the directors, officers,
employees, attorneys and agents of each of the foregoing.
"Initial Revolving Credit Committed Amount" shall have the meaning
set forth in Section 2.01(a) hereof.
"Interest Expense" for any period shall mean the total interest
expense of the Borrower for such period determined on a consolidated basis
in accordance with GAAP.
"Inventory" shall mean all goods now or hereafter owned by the
Borrower, whenever acquired and wherever located, held for sale or lease
or furnished or to be furnished under contracts of service, and all Raw
Materials, Spares and supplies, work in process and materials now or
hereafter owned by the Borrower whenever acquired and wherever located
[including ore stored at port facilities], and used or consumed in its
business.
"Issuing Bank" shall mean Mellon Bank, N. A.
"Law" shall mean any law (including common law), constitution,
statute, treaty, convention, regulation, rule, ordinance, order,
injunction, writ, decree or award of any Governmental Authority.
"Lenders" shall mean lender parties listed on the signature pages
hereof, subject to the provisions of Section 9.14 hereof pertaining to
Persons becoming or ceasing to be Lenders, and "Lender" shall mean any of
them.
"Lender Parties" shall mean the Lenders, the Issuing Bank, the
Co-Agents, and the Agent.
"Letter of Credit" shall mean each Standby Letter of Credit and each
Trade Letter of Credit issued by the Issuing Bank for the account of the
Borrower pursuant to this Agreement,
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each as amended, modified or supplemented from time to time.
"Letter of Credit Application" shall have the meaning given that
term in Section 2.18(a) hereof.
"Letter of Credit Collateral Account" shall have the meaning given
that term in Section 2.25(b) hereof.
"Letter of Credit Exposure" at any time shall mean the sum at such
time of (a) the aggregate Letter of Credit Unreimbursed Draws and (b) the
aggregate Letter of Credit Undrawn Availability.
"Letter of Credit Facing Fee" shall have the meaning set forth in
Section 2.17(e) hereof.
"Letter of Credit Fee" shall have the meaning given that term in
Section 2.17(d) hereof.
"Letter of Credit Participating Interest" shall have the meaning
given that term in Section 2.19(a) hereof.
"Letter of Credit Reimbursement Obligation" with respect to a Letter
of Credit means the obligation of the Borrower to reimburse the Issuing
Bank for Letter of Credit Unreimbursed Draws, together with interest
thereon.
"Letter of Credit Undrawn Availability" with respect to a Letter of
Credit at any time shall mean the maximum amount available to be drawn
under such Letter of Credit at such time or thereafter, regardless of the
existence or satisfaction of any conditions or limitations on drawing.
"Letter of Credit Unreimbursed Draws" with respect to a Letter of
Credit at any time shall mean the aggregate amount at such time of all
payments made by the Issuing Bank under such Letter of Credit, to the
extent not repaid by the Borrower.
"Level 0 Day" shall mean each day in the period from and including
the Closing Date to and including the date that the initial Loan is made
under this Agreement.
"Level I Day" shall mean each day in the period from but not
including the date on which the initial Loan is made under this Agreement
to but not including the Preliminary Acceptance Date.
"Level II Day" shall mean each day in the period from and including
the Preliminary Acceptance Date and to but not including the first Level
III Day.
"Level III Day" shall mean each day after the occurrence of the
first day when the Preliminary Acceptance Date shall have occurred and the
Borrower shall have had EBITDA greater than zero for each of three
consecutive months and which is not a level IV Day or a Level V Day.
"Level IV Day" shall mean a day (1) which is not a Level V Day; (2)
on which Final Acceptance shall have theretofore occurred; (3) on which
$4,500,000 shall be on deposit in the Debt Service Reserve Account; and
(4) as to which the Fixed Charge Coverage Ratio for the Measurement Period
relating to the most recent Test Date is not less than 1.5 to 1 in the
case of a Measurement Period ending in 1998, 1999, 2000 or 2001, not less
than 1.4 to 1 in the case of a Measurement Period ending in 2002, not less
than 1.25 to 1 in the case of a Measurement Period ending in 2003 and not
less than 1.1 to 1 in the case of a Measurement Period ending after 2003.
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21
"Level V Day" shall mean a day (1) as to which the ratio of (x)
Funded Indebtedness minus the amount on deposit in the Debt Service
Reserve Account to (y) Tangible Net Worth on the last day of the
Measurement Period relating to the most recent Test Date is not greater
than 1 to 1 and (2) which, if it were not a Level V Day, would be a Level
IV Day.
"Lien" shall mean any mortgage, deed of trust, pledge, lien,
security interest, charge or other encumbrance or security arrangement of
any nature whatsoever, including but not limited to any conditional sale
or title retention arrangement, and any assignment, deposit arrangement or
lease intended as, or having the effect of, security.
"Loan" shall mean any loan by a Lender to the Borrower under this
Agreement, and "Loans" shall mean all Loans made by the Lenders under this
Agreement.
"Loan Documents" shall mean this Agreement, the Notes, the Transfer
Supplements, the Letters of Credit, the Letter of Credit Agreement, the
Letter of Credit Applications (and any other agreements or documents
pursuant to which any Letter of Credit may be issued or amended), the
Security Documents, and all other agreements and instruments extending,
renewing, refinancing or refunding any indebtedness, obligation or
liability arising under any of the foregoing, in each case as the same may
be amended, modified or supplemented from time to time hereafter.
"Loan Parties" shall mean the Borrower and each Subsidiary of the
Borrower (it being understood that, without the consent of the Required
Lenders, the Borrower may have no subsidiaries), and "Loan Party" shall
mean any one of them.
"London Business Day" shall mean a day for dealing in deposits in
Dollars by and among banks in the London interbank market and which is a
Business Day.
"Mannesmann" shall mean Mannesmann Demag Corporation.
"Mannesmann Documents" shall mean the document set forth on Schedule
1.01G hereof.
"Marketing Study" shall mean the Information Memorandum dated
September 1997 prepared by XxXxxxxx & Company.
"Material Adverse Effect" shall mean: (a) a material adverse effect
on the business, operations or condition (financial or otherwise) of the
Borrower or SDI, (b) a material adverse effect on the ability of the
Borrower or any other Loan Party to perform or comply with any of the
terms and conditions of any Loan Document or an adverse effect on the
ability of the Borrower or any other Loan Party or SDI to perform or
comply with any of the terms and conditions of any Project Agreement if,
in the case of the Borrower or any other Loan Party, the effect thereof
could excuse or preclude the other party to such Project Agreement from
performing any of its obligations or duties thereunder material to the
Project or could increase the duties or obligations of the Borrower or any
other Loan Party thereunder to an extent material to the Project, or (c) a
material adverse effect on (i) the legality, validity, binding effect,
enforceability or admissibility into evidence of any Loan Document, or
(ii) the ability of the Agent or any Lender Party to enforce any rights or
remedies under or in connection with any Loan Document which could, in the
judgment of the Required Lenders reasonably exercised, prevent the
practical realization of the rights and benefits of the Lenders under such
Loan Document, or (iii) the ability of any Loan Party to enforce any
rights or remedies material to the Project under or in connection with any
Project Agreement, or (iv) the ability of the Borrower to achieve
Completion of the Project.
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"Measurement Period" shall mean a period of four consecutive
calendar quarters.
"Mellon" shall mean Mellon Bank, N.A., a national banking
association.
"Mitsubishi" shall mean Mitsubishi Heavy Industries America, Inc.
"Mitsubishi Documents" shall mean the document set forth on Schedule
1.01H hereof.
"Mortgage" shall have the meaning set forth in Section 4.01(c).
"Multiemployer Plan" shall mean any employee benefit plan which is a
"multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and
to which any Loan Party or any Controlled Group Member has or had an
obligation to contribute.
"Net Cash Proceeds" with respect to any property or issuance of debt
or equity securities shall mean cash or cash equivalents received by any
Loan Party from, and payments of principal of any Capitalized Lease
Obligations or other obligation received by any Loan Party in connection
with, the sale, lease or other disposition of such property or securities,
minus the sum of (a) expenses reasonably incurred in respect of such sale,
lease or other disposition, (b) any sales or transfer taxes payable as a
result of such sale, lease or other disposition, (c) incremental income
taxes reasonably estimated by the Borrower to be payable by such Loan
Party as a result of such sale, lease or other disposition and (d) the
amount required to discharge any indebtedness or obligation secured by a
Lien on such property and required to be discharged in connection with
such sale, lease or other disposition.
"Net Income" for any period shall mean the net earnings (or loss)
after taxes of the Borrower for such period determined in accordance with
GAAP; provided, that there shall be deducted therefrom (a) any restoration
to income of any contingency reserve, except to the extent that provision
for such reserve was made against income during such period, and (b) any
gain arising from the acquisition of any securities, or the
extinguishment, under GAAP, of any Indebtedness, of the Borrower.
"Non-PP&E Costs" shall mean Project Costs other than PP&E Costs.
"Notes" shall mean the Revolving Credit Notes and the Term Loan
Notes of the Borrower executed and delivered under this Agreement,
together with all extensions, renewals, refinancings or refundings of any
thereof in whole or part, and "Note" shall mean any one of the Notes.
"Notional Euro-Rate Funding Office" shall have the meaning given to
that term in Section 2.15(a) hereof.
"Obligations" shall mean all indebtedness, obligations and
liabilities of any Loan Party to any Lender Party or the Agent from time
to time arising under or in connection with or related to or evidenced by
or secured by or under color of this Agreement or any other Loan Document,
and all extensions, renewals or refinancings thereof, whether such
indebtedness, obligations or liabilities are direct or indirect, otherwise
secured or unsecured, joint or several, absolute or contingent, due or to
become due, whether for payment or performance, now existing or hereafter
arising. Without limitation of the foregoing, such indebtedness,
obligations and liabilities include the principal amount of Loans,
interest, Letter of Credit Reimbursement Obligations, guaranty
obligations, interest rate protection agreements, overdrafts, foreign
exchange transactions, cash management services, fees, indemnities or
expenses under or in connection with this Agreement or any other Loan
Document, and all extensions, renewals and refinancings thereof, whether
or not such Loans were made or such Letters of Credit were issued
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23
or other transactions were entered into in compliance with the terms and
conditions of this Agreement or in excess of the obligation of the Lenders
to lend or the authority of the Issuing Bank to issue Letters of Credit.
Obligations shall remain Obligations notwithstanding any assignment or
transfer or any subsequent assignment or transfer of any of the
Obligations or any interest therein.
"Office," when used in connection with the Agent, shall mean its
office located at One Mellon Bank Center, Pittsburgh, Pennsylvania, or at
such other office or offices of the Agent or any branch, subsidiary or
affiliate thereof as may be designated in writing from time to time by the
Agent to the Borrower.
"Option" shall mean the Base Rate Option or the Euro-Rate Option, as
the case may be.
"Other Finished Goods" shall mean finished goods which are not
Commercial Grade Finished Goods.
"Participants" shall have the meaning set forth in Section 9.14(b)
hereof.
"PBGC" means the Pension Benefit Guaranty Corporation established
under Title IV of ERISA or any other governmental agency, department or
instrumentality succeeding to the functions of said corporation.
"Pension-Related Event" shall mean any of the following events or
conditions:
(a) Any action is taken by any Person (i) to terminate, or
which would result in the termination of, a Plan, either pursuant to
its terms or by operation of law (including, without limitation, any
amendment of a Plan which would result in a termination under
Section 4041(e) of ERISA) other than compliance with Section 4041(b)
of ERISA, or (ii) to have a trustee appointed for a Plan pursuant to
Section 4042 of ERISA;
(b) PBGC notifies any Person of its determination that an
event described in Section 4042 of ERISA has occurred with respect
to a Plan, that a Plan should be terminated, or that a trustee
should be appointed for a Plan;
(c) Any Reportable Event occurs with respect to a Plan;
(d) Any action occurs or is taken which could result in any
Loan Party becoming subject to liability for a complete or partial
withdrawal by any Person from a Multiemployer Plan (including,
without limitation, seller liability incurred under Section
4204(a)(2) of ERISA), or any Loan Party or any Controlled Group
Member receives from any Person a notice or demand for payment on
account of any such alleged or asserted liability; or
(e) (i) There occurs any failure to meet the minimum funding
standard under Section 302 of ERISA or Section 412 of the Code with
respect to a Plan, or any tax return is filed showing any tax
payable under Section 4971(a) of the Code with respect to any such
failure, or any Loan Party or any Controlled Group Member receives a
notice of deficiency from the Internal Revenue Service with respect
to any alleged or asserted such failure, or (ii) any request is made
by any Person for a variance from the minimum funding standard, or
an extension of the period for amortizing unfunded liabilities, with
respect to a Plan.
"Permitted Liens" shall have the meaning set forth in Section 6.02
hereof.
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"Person" shall mean an individual, corporation, partnership, trust,
unincorporated association, joint venture, joint-stock company,
Governmental Authority or any other entity.
"Plan" means any employee pension benefit plan within the meaning of
Section 3(2) of ERISA (other than a Multiemployer Plan) covered by Title
IV of ERISA by reason of Section 4021 of ERISA, of which any Loan Party or
any Controlled Group Member is or has been within the preceding five years
a "contributing sponsor" within the meaning of Section 4001(a)(13) of
ERISA, or which is or has been within the preceding five years maintained
for employees of any Loan Party or any Controlled Group Member.
"Portion" shall mean the Base Rate Portion or the Euro-Rate Portion,
as the case may be.
"Postretirement Benefits" shall mean any benefits, other than
retirement income, provided by any Loan Party to retired employees, or to
their spouses, dependents or beneficiaries, including, without limitation,
group medical insurance or benefits, or group life insurance or death
benefits.
"Postretirement Benefit Obligation" shall mean that portion of the
actuarial present value of all Postretirement Benefits expected to be
provided by any Loan Party which is attributable to employees' service
rendered to the date of determination (assuming that such liability
accrues ratably over an employee's working life to the earlier of his date
of retirement or the date on which the employee would first become
eligible for full benefits), reduced by the fair market value as of the
date of determination of any assets which are segregated from the assets
of the applicable Loan Party and which have been restricted so that they
cannot be used for any purpose other than to provide Postretirement
Benefits or to defray related expenses.
"Potential Default" shall mean any event or condition which with
notice, passage of time, or both, would constitute an Event of Default.
"PP&E Costs" shall mean all costs incurred or to be incurred by the
Borrower for work, labor, materials and services furnished or to be
furnished in connection with the design, construction, equipping,
acquisition and testing of the Project.
"Preliminary Acceptance Date" shall mean the earliest date on which
all of the following shall have occurred: (a) construction of the Project
in accordance with the Design and Construction Standard shall have been
Completed (but the Project need not be operating at projected efficiency
and the Final Acceptance Date need not have occurred), and (b) the Project
shall have achieved production of direct reduced iron pellets from the
rotary hearth furnace of an average of 50.0 metric tons per hour for 30
consecutive days with an 85.0% degree of metallization and 73.0% metallic
iron and production of liquid pig iron from the submerged arc furnace of
an average of 45.0 metric tons per hour for 30 consecutive days at 95.0%
metallization, and (c) the Project Monitor shall have delivered to the
Agent, with a copy to each Lender, a certificate in the form of Exhibit W
hereto, with the blanks filled, and the Borrower shall have delivered to
the Agent, with a copy for each Lender, a certificate in the form of
Exhibit X hereto, with the blanks appropriately filled, and (d) the Agent
shall have theretofore received, with a copy for each Lender, copies of
all Required Project Permits necessary for the production of direct
reduced iron pellets and liquid pig iron produced therefrom (including
safety and disposal of Environmental Concern Material and other
by-products if any), on an uninterrupted basis and the same shall be in
full force and effect and no longer subject to appeal.
"Prime Rate" as used herein, shall mean the interest rate per annum
announced from time to time by the Agent as its prime rate, such rate to
change automatically effective as of the effectiveness of each announced
change in such prime rate. The Prime Rate may be greater or less than
other interest rates charged by the Agent to other borrowers and is not
solely based or
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dependent upon the interest rate which the Agent may charge any particular
borrower or class of borrower.
"Project" shall mean the direct reduced iron pellet and liquid pig
iron producing facility yielding approximately 600,000 metric tons per
year of direct reduced iron pellets and approximately 523,000 metric tons
per year of liquid iron and related improvements (including without
limitation the drying and concentration, grinding and agglomeration
facilities, rotary health furnace, submerged arc furnace, electric
substation, water-distribution system and railroad tracks) to be
constructed on the Project Site in accordance with the Design and
Construction Standard.
"Project Agreements" shall mean the contracts and agreements listed
on Schedule 1.01B hereto, the SDI Offtake Agreement, the Administration
Agreement and any Future Project Agreements after execution and delivery
thereof by the Loan Party which is a party thereto.
"Project Budget" shall mean the schedule of Project Costs attached
hereto as Schedule 1.01C.
"Project Costs" shall mean the costs incurred or to be incurred by
the Borrower in connection with the design, construction, equipping,
acquisition, testing and start-up and financing of the Project, and net
operating losses (calculated without deduction for depreciation,
amortization and other non-cash charges) in connection with operations
through the Adequacy of Funds End Date, including costs under any category
listed on the Project Budget.
"Project Monitor" shall mean X. X. Xxxxxxxxx Company, Inc.
"Project Site" shall mean the property described in Exhibit A to the
Mortgage and which is located in Xxxxxx, Dekalb County, Indiana.
"Project Status Certificate" shall have the meaning set forth in
Section 4.02(d)(ii) hereof.
"Pro Rata" shall mean from or to each Revolving Credit Lender in
proportion to its Revolving Credit Commitment Percentage and from or to
each Term Loan Lender in proportion to its Term Loan Commitment.
"Purchasing Lender" shall have the meaning set forth in Section
9.14(c) hereof.
"Raw Materials" shall mean iron units, coal, lime, limestone, coke
and other ingredients necessary to the formulation of direct reduced iron
pellets.
"Register" shall have the meaning set forth in Section 9.14(d)
hereof.
"Regular Payment Date" shall mean the last day of each February,
May, August and November after the date hereof, commencing February 28,
1998.
"Remaining Project Costs" shall mean all PP&E Costs required to
Complete the construction of the Project and all Non-PP&E Costs in
connection with the Project through the Adequacy of Funds End Date,
excluding Project Costs theretofore paid.
"Replacement Revolver Facility" shall have the meaning set forth in
Section 2.01(e) hereof.
"Reportable Event" means (i) a reportable event described in Section
4043 of ERISA and regulations thereunder, (ii) a withdrawal by a
substantial employer from a Plan to which more
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26
than one employer contributes, as referred to in Section 4063(b) of ERISA,
(iii) a cessation of operations at a facility causing more than twenty
percent (20%) of Plan participants to be separated from employment, as
referred to in Section 4062(e) of ERISA, or (iv) a failure to make a
required installment or other payment with respect to a Plan when due in
accordance with Section 412 of the Code or Section 302 of ERISA which
causes the total unpaid balance of missed installments and payments
(including unpaid interest) to exceed $750,000.
"Required Lenders" shall mean, as of any date, Lenders as to which
the sum of the outstanding principal amount of Loans, outstanding Letter
of Credit Exposure, unused Revolving Credit Committed Amounts and Term
Loan Committed Amounts on such date is at least 51% of the sum of the
total outstanding principal amount of Loans, outstanding Letter of Credit
Exposure, unused Revolving Credit Committed Amounts and Term Loan
Committed Amounts of all Lenders on such date, provided, however, that (i)
in the case of requests under Section 7.01(a) or 7.01(c), "Required
Lenders" on any date shall mean Lenders whose aggregate outstanding
principal amount of Loans and outstanding Letter of Credit Exposure on
such date exceeds 50% of the total aggregate outstanding principal amount
of Loans and outstanding Letter of Credit Exposure of all Lenders on such
date, and (ii) in the case of a modification to this Agreement which would
change a condition of lending insofar as such condition is applicable only
to Revolving Credit Loans and not to Term Loans (including any such change
to a condition of lending after the Term Loan Commitment Period has
expired), "Required Lenders" shall mean, on the date of such proposed
modification, (x) Lenders which have made Term Loans constituting, in the
aggregate, at least 51% in principal amount of Term Loans outstanding on
such date and (y) Lenders which have Revolving Credit Commitments
constituting, in the aggregate, at least 51% of the total Revolving Credit
Commitments of all the Lenders on such date, it being understood that a
permanent amendment to any covenant or a permanent waiver of any
misrepresentation shall not be included within the meaning of this clause
(ii).
"Required Project Permits" shall mean all Governmental Action
necessary for the design, construction, equipping, acquisition, testing,
start-up, ownership, occupancy or operation of the Project, including in
connection with the disposal of any Environmental Concern Materials and
other by-products from the Project.
"Requirement of Law" shall mean, as to any Person, the certificate
or articles of incorporation and by-laws or other organizational or
governing documents of such Person, and any Law, right, privilege,
qualification, license or franchise or determination of an arbitrator or a
court or other Governmental Authority, in each case applicable or binding
upon such Person or any of its property (now owned or hereafter acquired)
or to which such Person or any of its property is subject or pertaining to
any or all of the transactions contemplated or referred to herein.
"Responsible Officer" shall mean the President, any Vice President,
the Treasurer or the Chief Financial Officer of the Borrower.
"Revolving Credit Commitment" shall have the meaning set forth in
Section 2.01(a) hereof.
"Revolving Credit Commitment Fee" shall have the meaning set forth
in Section 2.02(a) hereof.
"Revolving Credit Commitment Percentage" for any Lender shall mean
the Revolving Credit Commitment Percentage for such Lender set forth below
its name on the signature page hereof, subject to transfer to another
Lender as provided in Section 9.14 hereof.
"Revolving Credit Committed Amount" shall have the meaning set forth
in
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Section 2.01(a) hereof.
"Revolving Credit Lenders" shall mean the Lenders listed on the
signature pages hereof who have a Revolving Credit Committed Amount
greater than zero set forth thereon, subject to the provisions of Section
9.14 hereof pertaining to Persons becoming or ceasing to be Lenders;
"Revolving Credit Lender" shall mean any one of them.
"Revolving Credit Loans" shall have the meaning set forth in Section
2.01(a) hereof.
"Revolving Credit Maturity Date" shall mean May 31, 2000.
"Revolving Credit Notes" shall mean the promissory notes of the
Borrower executed and delivered under Section 2.01(c) hereof, any
promissory notes issued in substitution therefor pursuant to Sections
2.15(b) or 9.14(c) hereof, together with all extensions, renewals,
refinancings or refundings thereof in whole or part; "Revolving Credit
Note" shall mean any one of them.
"SDI" shall mean Steel Dynamics, Inc. an Indiana corporation.
"SDI Offtake Agreement" shall mean the agreement between the
Borrower and SDI dated on or prior to the Closing Date.
"Security Agreement" shall have the meaning set forth in Section
4.01(b)(i)(A).
"Security Documents" shall mean the Security Agreement, the
Mortgage, the Assignment of Contracts (and each assignment of contract
entered into pursuant to Section 5.15 hereof), together with the Consents
to Assignment of Contracts (and each consent to assignment of contract
delivered pursuant to Section 5.15 hereof) and any other agreements or
instruments from time to time to time granting or purporting to grant the
Agent a Lien in any property for the benefit of the Lenders to secure the
Obligations, or constituting a Guaranty Equivalent for the Obligations.
"Solvent" means, with respect to any Person at any time, that at
such time (a) the sum of the debts and liabilities (including, without
limitation, contingent liabilities) of such Person is not greater than all
of the assets of such Person at a fair valuation, (b) the present fair
salable value of the assets of such Person is not less than the amount
that will be required to pay the probable liability of such Person on its
debts as they become absolute and matured, (c) such Person has not
incurred, does not intend to incur, and does not believe that it will
incur, debts or liabilities (including, without limitation, contingent
liabilities) beyond such person's ability to pay as such debts and
liabilities mature, (d) such Person is not engaged in, and is not about to
engage in, a business or a transaction for which such person's property
constitutes or would constitute unreasonably small capital, and (e) such
Person is not otherwise insolvent as defined in, or otherwise in a
condition which could in any circumstances then or subsequently render any
transfer, conveyance, obligation or act then made, incurred or performed
by it avoidable or fraudulent pursuant to, any Law that may be applicable
to such Person pertaining to bankruptcy, insolvency or creditors' rights
(including but not limited to the Bankruptcy Code of 1978, as amended,
and, to the extent applicable to such Person, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act, or any other
applicable Law pertaining to fraudulent conveyances or fraudulent
transfers or preferences).
"Spares" shall mean spares and supplies of the Borrower which the
Agent in its reasonable discretion determines to be readily marketable.
"Specifications" shall mean at any time the detailed plans, drawings
and specifications
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for the construction and equipping of the Project in existence at such
time, whether preliminary or final, as the same may be modified from time
to time in accordance with Section 6.20 hereof. A list of the
Specifications, as currently developed, is set forth in Schedule 1.01D
hereto.
"Specified Early Period Default" shall mean any of the following
Events of Default which occurs or first exists during the Early Period:
(i) an Event of Default specified in Section 7.01(c) hereof which relates
to a representation or warranty made in Section 3.04, 3.05(b)(iii),
3.18(c), 3.21, 3.24, 3.26, 3.27, 3.28, or 3.29 hereof; (ii) an Event of
Default specified in Section 7.01(e) hereof which relates to a covenant
made in Section 5.03, 5.05, 5.07(c), 5.14(b) or 5.15; (iii) an Event of
Default specified in Section 7.01(f), 7.01(g), 7.01(h), 7.01(i), 7.01(n),
7.01(o), 7.01(t) or 7.01(z) hereof; or (iv) an Event of Default specified
in Section 7.01(c) hereof which relates to a representation or warranty
made in Section 3.17 to the extent such representation or warranty relates
to a Specified Early Period Default (other than pursuant to this clause
(iv).
"Standard Notice" shall mean an irrevocable notice provided to the
Agent on a Business Day which is
(a) On or before the same Business Day in the case of
selection of, conversion to or renewal of the Base Rate Option or
prepayment of any Base Rate Portion;
(b) At least four London Business Days in advance in the case
of selection of the Euro-Rate Option or prepayment of any Euro-Rate
Portion.
Standard Notice must be provided no later than 10:00 a.m., Pittsburgh
time, on the last day permitted for such notice.
"Standby Letter of Credit" shall mean a Letter of Credit which is
not a Trade Letter of Credit.
"Stock Payment" by any Person shall mean any dividend, distribution
or payment of any nature (whether in cash, securities, or other property)
on account of or in respect of any shares of the capital stock (or
warrants, options or rights therefor) of such Person, including but not
limited to any payment on account of the purchase, redemption, retirement,
defeasance or acquisition of any shares of the capital stock (or warrants,
options or rights therefor) of such Person, in each case regardless of
whether required by the terms of such capital stock (or warrants, options
or rights) or any other agreement or instrument.
"Subsidiary" shall mean any corporation of which a majority (by
number of shares or number of votes) of any class of outstanding capital
stock normally entitled to vote for the election of one or more directors
(regardless of any contingency which does or may suspend or dilute the
voting rights of such class) is at such time owned directly or indirectly,
beneficially or of record, by the Borrower or one or more Subsidiaries of
the Borrower.
"Tangible Net Worth" at any time shall mean the total amount of
stockholders' equity of the Borrower at such time determined on a
consolidated basis in accordance with GAAP, except that there shall be
deducted therefrom the book value of all intangible assets and deferred
charges of the Borrower at such time (that were created after the
Financial Covenant Date) determined in accordance with GAAP.
"Tax Affected Lender" shall have the meaning assigned to that term
in Section 2.14(f) hereof.
"Taxes" shall have the meaning set forth in Section 2.14 hereof.
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"Tax Sharing Agreement" shall mean the agreement between Borrower
and SDI described on Schedule 1.01I hereof.
"Term Loan Commitment" shall have the meaning assigned to that term
in Section 2.03(a) hereof.
"Term Loan Commitment Fee" shall have the meaning assigned to that
term in Section 2.04 hereof.
"Term Loan Commitment Period" shall mean the period from the date
hereof to and including the first to occur of (a) March 31, 2000 and (b)
the date on which (i) final payments have been made by Borrower under all
Project Agreements and (ii) there shall first be on deposit in the Debt
Service Reserve Account the amount of $2,200,000; provided, however, for
purposes only of advances of Term Loans to Borrower for payment by
Borrower to SDI of the dividend described in Section 6.06 hereof, the Term
Loan Commitment Period shall end on August 31, 2000.
"Term Loan Committed Amount" shall have the meaning assigned to that
term in Section 2.03(a) hereof.
"Term Loan Lenders" shall mean the Lenders listed on the signature
pages hereof who have a Term Loan Committed Amount greater than zero set
forth thereon, subject to the provisions Section 9.14 hereof pertaining to
Persons becoming or ceasing to be Lenders; "Term Loan Lender" shall mean
anyone of them.
"Term Loan Maturity Date" shall mean November 30, 2005.
"Term Loan Notes" shall mean the promissory notes of the Borrower
executed and delivered under Section 2.03(c) or any promissory note issued
in substitution therefor pursuant to Sections 2.15(b) or 9.14(c) hereof,
together with all extensions, renewals, refinancings or refundings thereof
in whole or part, and "Term Loan Note" shall mean any one of them.
"Term Loans" shall have the meaning assigned to that term in Section
2.04 hereof.
"Test Date" shall mean the date on which the Borrower provides to
the Agent (or is required to have provided to the Agent), pursuant to
Section 5.01 hereof, financial statements for the then most recently
completed fiscal quarter and the Measurement Period related to a Test Date
is the Measurement Period which ends with such fiscal quarter.
"Total Revolving Credit Exposure" of any Lender at any time shall
mean the sum of the outstanding principal amount of such Lender's
Revolving Credit Loans plus such Lender's Pro Rata share of the aggregate
Letter of Credit Exposure at such time.
"Trade Letter of Credit" shall mean a Letter of Credit which is
designated as such by the Issuing Bank after determination by the Issuing
Bank that such Letter of Credit may, in accordance with the Issuing Bank's
usual operating practice, be treated as a documentary or trade letter of
credit.
"Transfer Effective Date" shall have the meaning set forth in the
applicable Transfer Supplement.
"Transfer Supplement" shall have the meaning set forth in Section
9.14(c) hereof.
"Treasury Rate" as of any Funding Breakage Date shall mean the rate
per annum
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determined by the applicable Lender (which determination shall be
conclusive absent manifest error) to be the semiannual equivalent yield to
maturity (expressed as a semiannual equivalent and decimal and, in the
case of United States Treasury bills, converted to a bond equivalent
yield) for United States Treasury securities maturing on the last day of
the corresponding Funding Period and trading in the secondary market in
reasonable volume (or if no such securities mature on such date, the rate
determined by standard securities interpolation methods as applied to the
series of securities maturing as close as possible to, but earlier than,
such date, and the series of such securities maturing as close as possible
to, but later than, such date).
"Utility Loan" shall mean the $6,500,000 loan from American Electric
Power Financial Services or its nominee to Borrower secured by a lien only
on the assets set forth on Schedule 1.01F hereof and having terms and
provisions satisfactory in all respects to Agent.
"Working Capital" at any time shall mean Current Assets at such time
minus Current Liabilities at such time.
1.02. Construction. Unless the context of this Agreement otherwise
clearly requires, references to the plural include the singular, the singular
the plural and the part the whole; "or" has the inclusive meaning represented by
the phrase "and/or"; and "property" includes all properties and assets of any
kind or nature, tangible or intangible, real, personal or mixed. References in
this Agreement to "determination" (and similar terms) by the Agent or by any
Lender include good faith estimates by the Agent or by any Lender (in the case
of quantitative determinations) and good faith beliefs by the Agent or by any
Lender (in the case of qualitative determinations). The words "hereof,"
"herein," "hereunder" and similar terms in this Agreement refer to this
Agreement as a whole and not to any particular provision of this Agreement.
References herein to "out-of-pocket expenses" of a Person (and similar terms)
include, but are not limited to, the fees of in-house counsel and other in-house
professionals of such Person to the extent that such fees are routinely
identified and separately and specifically charged under such Person's normal
cost accounting system consistent with past practice. The terms "include" and
"including" mean "including without limitation". The section and other headings
contained in this Agreement and the Table of Contents preceding this Agreement
are for reference purposes only and shall not control or affect the construction
of this Agreement or the interpretation thereof in any respect. Section,
subsection and exhibit references are to this Agreement unless otherwise
specified.
1.03. Accounting Principles.
(a) As used herein, "GAAP" shall mean generally accepted accounting
principles in the United States, applied on a basis consistent with the
principles used in preparing the financial statements of SDI as of September 30,
1997 and for the fiscal quarter then ended.
(b) Except as otherwise provided in this Agreement, all computations
and determinations as to accounting or financial matters shall be made, and all
financial statements to be delivered pursuant to this Agreement shall be
prepared, in accordance with GAAP (including principles of consolidation where
appropriate), and all accounting or financial terms shall have the meanings
ascribed to such terms by GAAP.
(c) If and to the extent that the financial statements generally
prepared by the Borrower apply accounting principles other than GAAP, all
financial statements referred to in this Agreement or any other Loan Document
shall be delivered in duplicate, one set based on the accounting principles then
generally applied by the Borrower and one set based on GAAP. To the extent this
Agreement or such other Loan Document requires financial statements to be
accompanied by an opinion of independent accountants, each set of financial
statements shall be accompanied by such an opinion.
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ARTICLE II
THE CREDITS
2.01. Revolving Credit Loans.
(a) Revolving Credit Commitments. Subject to the terms and
conditions and relying upon the representations and warranties herein set forth,
each Revolving Credit Lender, severally and not jointly, agrees (such agreement
being herein called such Revolving Credit Lender's "Revolving Credit
Commitment") to make loans (the "Revolving Credit Loans") to the Borrower at any
time or from time to time on or after the February 28, 1998 and to but not
including the Revolving Credit Maturity Date; provided, however, that prior to
the Preliminary Acceptance Date the Total Revolving Credit Exposure shall not
exceed $8,000,000. Following the date that is 90 days after the Preliminary
Acceptance Date, a Revolving Credit Lender shall have no obligation to make any
Revolving Credit Loan to the extent that the aggregate principal amount of such
Revolving Credit Lender's Total Revolving Credit Exposure at any time would
exceed the lesser of (x) such Revolving Credit Lender's Revolving Credit
Committed Amount at such time and (y) such Revolving Credit Lender's Pro Rata
share of the Borrowing Base at such time. Each Revolving Credit Lender's
"Revolving Credit Committed Amount" at any time shall be equal to the amount set
forth as its "Initial Revolving Credit Committed Amount" below its name on the
signature pages hereof, as such amount may have been reduced under Section 2.02
hereof at such time, and subject to transfer to another Lender as provided in
Section 9.14 hereof. Notwithstanding the foregoing, the Borrower shall not
request, and shall not be entitled to borrow, Revolving Credit Loans if, after
such borrowing, the aggregate unborrowed amount of Term Loan Commitments and
Revolving Credit Commitments is less than the positive difference between
$2,200,000 and the amount of funds on deposit in the Debt Service Reserve Fund.
(b) Nature of Credit. Within the limits of time and amount set forth
in this Section 2.01, and subject to the provisions of this Agreement, the
Borrower may borrow, repay and reborrow Revolving Credit Loans hereunder.
(c) Revolving Credit Notes. The obligation of the Borrower to repay
the unpaid principal amount of the Revolving Credit Loans made to it by each
Revolving Credit Lender and to pay interest thereon shall be evidenced in part
by promissory notes of the Borrower, one to each Revolving Credit Lender, dated
the Date hereof (the "Revolving Credit Notes") in substantially the form
attached hereto as Exhibit A, with the blanks appropriately filled, payable to
the order of such Revolving Credit Lender in a face amount equal to such
Revolving Credit Lender's Initial Revolving Credit Committed Amount.
(d) Maturity; Amortization. To the extent not due and payable
earlier, the Revolving Credit Loans shall be due and payable on the Revolving
Credit Maturity Date; provided, however, that if all of the following conditions
shall have been satisfied on the Revolving Credit Maturity Date, the aggregate
principal amount (the "Converted Amount") then outstanding under the Revolving
Credit Notes shall be due and payable in equal quarterly installments of
principal and interest as hereafter set forth in this section 2.01(d): (i) no
Event of Default or Potential Default shall have occurred, (ii) the Borrower
shall have requested such amortization by written notice to Agent not less than
60 days nor more than 90 days prior to the Revolving Credit Maturity Date, (iii)
all of the conditions set forth in Section 4.02 and Section 4.03 hereof shall
have been satisfied and such updating information as may be required by Agent
shall have been furnished to Agent and (iv) the Borrower shall have executed
such modifications to the Revolving Credit Notes as may be required by Agent in
order to evidence such amortization of the Converted Amount. The Converted
Amount, together with interest thereon, shall be payable in equal quarterly
installments of principal and interest in amounts sufficient to fully amortize
the Converted Amount on November 30, 2005. The first such quarterly installment
shall be due and payable on May 30, 2001, and subsequent payments shall be due
and payable thereafter on each succeeding August 31, November 30, February 28
and May 30 to and including November 30, 2005 (each such date being a
"Conversion Payment Date"). If not sooner due and payable in accordance with
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the terms hereof, the entire unpaid balance of the Converted Amount, together
with accrued and unpaid interest thereon, shall be due and payable in full on
November 30, 2005. Payment of the Converted Amount shall, inter alia, be subject
to the provisions of Section 2.16(e) hereof and Section 2.10 hereof.
(e) Replacement Revolver Facility. The Borrower may, if it wishes to
do so, at any time during March of 2000 or at any time after (i) Preliminary
Acceptance has been achieved and (ii) the Borrower has maintained positive
EBITDA for each of three consecutive months, request the Lenders to consent to
the modification of the terms of this Agreement relating to maturities and
amortizations of the Revolving Credit Loans as set forth on Exhibit EE hereto.
Such modification shall become effective if, and only if, all of the Lenders
agree to such modification in writing (which agreement shall be in the sole
discretion of each of the Lenders). The term "Replacement Revolver Facility", as
used herein, means the Revolving Credit Loans as so modified.
(f) Letters of Credit. Letters of Credit may be issued in accordance
with the terms and provisions of Section 2.17 hereof.
2.02. Revolving Credit Commitment Fee; Reduction of the Revolving
Credit Committed Amounts.
(a) Revolving Credit Commitment Fee. The Borrower shall pay to the
Agent for the account of each Revolving Credit Lender a commitment fee (the
"Revolving Credit Commitment Fee") equal to 0.25% per annum for each Level O Day
and 0.375% per annum for each other day, in each instance based on a year of 365
days and actual days elapsed, for each day from and including the date hereof to
but not including the Revolving Credit Maturity Date on the amount (not less
than zero) equal to (i) such Revolving Credit Lender's Revolving Credit
Committed Amount on such day, minus (ii) the aggregate principal amount of such
Revolving Credit Lender's Revolving Credit Loans outstanding on such day, minus
(iii) such Revolving Credit Lender's Pro Rata share of Letter of Credit Exposure
on such day. Such Revolving Credit Commitment Fee shall be due and payable for
the preceding period for which such fee has not been paid: (x) on each Regular
Payment Date, (y) on the date of each reduction of the Revolving Credit
Committed Amounts (whether optional or mandatory) on the amount so reduced and
(z) on the Revolving Credit Maturity Date. The amount of the Revolving Credit
Commitment Fee applicable to the Replacement Revolver Facility is expected to be
equal to 0.175% per annum for each Level IV Day and 0.125% for each Level V Day,
in each instance based on a year of 365 days and actual days elapsed and
calculated as described in clauses (i), (ii) and (iii) above.
(b) Reduction of the Revolving Credit Committed Amounts. The
Borrower may at any time or from time to time reduce Pro Rata the Revolving
Credit Committed Amounts of the Revolving Credit Lenders to an aggregate amount
(which may be zero) not less than the sum of the unpaid principal amount of the
Revolving Credit Loans then outstanding plus the principal amount of all
Revolving Credit Loans not yet made as to which notice has been given by the
Borrower under Section 2.05 hereof plus the Letter of Credit Exposure at such
time. Any reduction of the Revolving Credit Committed Amounts shall be in an
aggregate amount which is an integral multiple of $1,000,000. Reduction of the
Revolving Credit Committed Amounts shall be made by providing not less than
three Business Days' notice (which notice shall be irrevocable) to such effect
to the Agent. After the date specified in such notice the Revolving Credit
Commitment Fee shall be calculated upon the Revolving Credit Committed Amounts
as so reduced.
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2.03. Term Loans.
(a) Term Loan Commitments. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, each Lender,
severally and not jointly, agrees (such agreement being herein called such
Lender's "Term Loan Commitment") to make loans (the "Term Loans") to the
Borrower during the Term Loan Commitment Period in such principal amounts as may
be requested by the Borrower but not exceeding such Lender's Term Loan Committed
Amount. Each Lender's Term Loan Committed Amount at any time shall be equal to
the amount set forth as its "Term Loan Committed Amount" below its name on the
signature pages hereof, subject to transfer to another Lender as provided in
Section 9.14 hereof. Notwithstanding the foregoing, the Borrower shall not
request, and shall not be entitled to borrow, Term Loans if, after such
borrowing, the aggregate unborrowed amount of Term Loan Commitments and
Revolving Credit Commitments is less than the positive difference between
$2,200,000 and the amount of funds on deposit in the Debt Service Reserve Fund.
(b) Nature of Credit. The Borrower may not reborrow amounts repaid
with respect to Term Loans.
(c) Term Loan Notes. The obligation of the Borrower to repay the
unpaid principal amount of the Term Loans made to it by each Term Loan Lender
and to pay interest thereon shall be evidenced in part by the Term Loan Notes of
the Borrower to each Lender, dated the date hereof in substantially the form
attached hereto as Exhibit B, with the blanks appropriately filled, payable to
the order of such Lender in a face amount equal to the principal amount of such
Lender's Term Loan Committed Amount.
(d) Advances. Subject to the conditions set forth herein, during the
Term Loan Commitment Period, advances of the Term Loans may be made (not more
often than two times monthly). Each advance shall be an integral multiple of
$500,000 which is not less than $1,000,000. No advances shall be made after the
expiration of the Term Loan Commitment Period, at which time the Term Lenders'
Term Loan Commitments shall expire. After (a) the Final Acceptance Date shall
have occurred and (b) all Project Costs shall have been paid in full, advances
of Term Loans shall be limited to advances for the payment by Borrower to SDI of
the cash dividend described in Section 6.06 hereof.
(e) Scheduled Amortization; Maturity. The Term Loans shall be due
and payable in installments on the dates and in the amounts corresponding to the
percentages as set forth below:
Percentage of
Initial Principal
Amount of Term Loans
Date Due and Payable
---- --------------------
November 30, 2000 5.0%
May 30, 2001 7.5%
November 30, 2001 7.5%
May 30, 2002 7.5%
November 30, 2002 7.5%
May 30, 2003 7.5%
November 30, 2003 7.5%
May 30, 2004 10.0%
November 30, 2004 10.0%
May 30, 2005 12.5%
November 30, 2005 17.5%
100.0%
=====
The "Initial Principal Amount of Term Loans" shall be the principal amount
outstanding on the date the
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Term Loan Commitments expire. To the extent not due and payable earlier, the
Term Loans shall be due and payable on the Term Loans Maturity Date.
2.04. Term Loan Commitment Fees. The Borrower shall pay to the Agent
for the account of each Term Loan Lender a commitment fee (the "Term Loan
Commitment Fee") equal to 0.25% per annum for each Level O Day and 0.375% per
annum for each other day, in each instance based on a year of 365 days and
actual days elapsed on the unused portion of each Lender's Term Loan Committed
Amount, for each day from and including the date hereof to and including the
last day of the Term Loan Commitment Period.
2.05. Making of Loans. Whenever the Borrower desires that the
Lenders make Revolving Credit Loans or Term Loans, the Borrower shall provide
Standard Notice to the Agent setting forth the following information (a separate
notice being required for each such type of Loans):
(a) Whether the proposed Loans are Revolving Credit Loans or Term
Loans;
(b) The date, which shall be a Business Day, on which such proposed
Loans are to be made;
(c) The aggregate principal amount of such proposed Loans, which
shall be the sum of the principal amounts selected pursuant to clause (d)
of this Section 2.05, and which (in the case of proposed Revolving Credit
Loans) shall be an integral multiple of $500,000 not less than $1,000,000
and which (in the case of proposed Term Loans) shall be in the amount set
forth in Section 2.03(d) hereof;
(d) The interest rate Option or Options selected in accordance with
Section 2.06(a) hereof and the principal amounts selected in accordance
with Section 2.06(d) hereof of the Base Rate Portion and each Funding
Segment of the Euro-Rate Portion, as the case may be, of such proposed
Loans; and
(e) With respect to each such Funding Segment of such proposed
Loans, the Funding Period to apply to such Funding Segment, selected in
accordance with Section 2.06(c) hereof.
Standard Notice having been so provided, the Agent shall promptly notify each
Lender no later than 12:00 o'clock Noon, Pittsburgh time, of the information
contained therein and of the amount of such Lender's Loan. Unless any applicable
condition specified in Article IV hereof has not been satisfied, on the date
specified in such Standard Notice each Lender shall make the proceeds of its
Loan available to the Agent at the Agent's Office, no later than 2:00 o'clock
P.M., Pittsburgh time, in funds immediately available at such Office. Promptly
after its receipt thereof, the Agent will make the funds so received available
to the Borrower in funds immediately available at the Agent's Office.
2.06. Interest Rates.
(a) Optional Bases of Borrowing. The unpaid principal amount of
Revolving Credit Loans shall bear interest for each day until due on one or more
bases selected by the Borrower from among the interest rate Options set forth
below. The unpaid principal amount of Term Loans shall bear interest for each
day on the basis of the Euro-Rate Option described below. Subject to the
provisions of this Agreement the Borrower may select different Options to apply
simultaneously to different Portions of the Revolving Credit Loans and may
select different Funding Segments to apply simultaneously to different parts of
the Euro-Rate Portion of the Loans. Each selection of a rate Option shall apply
separately and without overlap to the Revolving Credit Loans as a class and the
Term Loans as a class. The aggregate number of Funding Segments applicable to
the Euro-Rate Portion of the Revolving Credit Loans at any time shall not exceed
six, and the aggregate number of Funding Segments applicable to the Euro-Rate
Portion of the Term Loans at any time shall not exceed six.
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(i) "Base Rate Option": A rate per annum (computed on the basis of a
year of 365 days and actual days elapsed) for each day equal to the Base
Rate for such day plus the Applicable Margin for such day. The "Base Rate"
for any day shall mean the greater of (A) the Prime Rate for such day or
(B) 0.50% plus the Federal Funds Effective Rate for such day, such
interest rate to change automatically from time to time effective as of
the effective date of each change in the Prime Rate or the Federal Funds
Effective Rate.
(ii) "Euro-Rate Option": A rate per annum (based on a year of 360
days and actual days elapsed) for each day equal to the Euro-Rate for such
day plus the Applicable Margin for such day. "Euro-Rate" for any day, as
used herein, shall mean for each Funding Segment of the Euro-Rate Portion
corresponding to a proposed or existing Euro-Rate Funding Period the rate
per annum determined by the Agent by dividing (the resulting quotient to
be rounded upward to the nearest 1/100 of 1%) (A) the rate of interest
(which shall be the same for each day in such Euro-Rate Funding Period)
quoted on the Xxxxxx'x screen ISDA page to be (or, if such Xxxxxx'x
quotation is not available, determined in good faith by the Agent, after
inquiry to three reference banks selected by the Agent from among the
Lenders, in accordance with its usual procedures when reference banks are
consulted (which determination shall be conclusive) to be) the average of
the rates per annum for deposits in Dollars offered to major money center
banks in the London interbank market at approximately 11:00 a.m., London
time, two London Business Days prior to the first day of such Euro-Rate
Funding Period for delivery on the first day of such Euro-Rate Funding
Period in amounts comparable to such Funding Segment and having maturities
comparable to such Funding Period by (B) a number equal to 1.00 minus the
Euro-Rate Reserve Percentage.
"Euro-Rate Reserve Percentage" for any day shall mean the percentage
(expressed as a decimal, rounded upward to the nearest 1/100 of 1%), as
determined in good faith by the Agent (which determination shall be
conclusive absent manifest error), which is in effect on such day as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) representing the maximum reserve requirement (including,
without limitation, supplemental, marginal and emergency reserve
requirements) with respect to eurocurrency funding (currently referred to
as "Eurocurrency liabilities") of a member bank in such System. The
Euro-Rate shall be adjusted automatically as of the effective date of each
change in the Euro-Rate Reserve Percentage. The Euro-Rate Option shall be
calculated in accordance with the foregoing whether or not any Lender is
actually required to hold reserves in connection with its eurocurrency
funding or, if required to hold such reserves, is required to hold
reserves at the "Euro-Rate Reserve Percentage" as herein defined.
The Agent shall give prompt notice to the Borrower and to the
Lenders of the Euro-Rate determined or adjusted in accordance with the
definition of the Euro-Rate, which determination or adjustment shall be
conclusive if made in good faith.
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(b) Applicable Margins.
(i) The "Applicable Margin" for both the Revolving Credit Loans and
Term Loans, as applicable, and interest rate Option for any day shall mean
the percentage set forth below:
Applicable
Applicable Margin Margin For
Applicable Day For Base Rate Option Euro-Rate Option
-------------- -------------------- ----------------
For each Level I Day 0.25% 2.00%
For each Level II Day 0% 1.75%
For each Level III Day 0% 1.50%
For each Level IV Day 0% 1.25%
For each Level V Day 0% 1.00%
(ii) Notwithstanding clause (i) above, upon the occurrence of an
Event of Default, the Applicable Margin for each type of Loan and the
interest rate option for any day shall mean the percentage set forth with
respect thereto in clause (i) plus 2%. Such Applicable Margin shall remain
in effect from the date of the occurrence of such Event of Default until
the earlier to occur of (a) the date on which such Event of Default is
cured or waived or otherwise ceases to exist (and no other Event of
Default exists), in which case the Applicable Margin shall be determined
in accordance with clause (i) above, and (b) the date on which the unpaid
principal amount of the Loans, interest accrued thereon and all other
Obligations are declared to be immediately due and payable pursuant to
Section 7.02(a)(ii) hereof, in which case Section 2.12(c) shall apply.
(c) Funding Periods. At any time when the Borrower shall select,
convert to or renew the Euro-Rate Option to apply to any part of the Loans, the
Borrower shall specify one or more periods (the "Funding Periods") during which
each such Option shall apply, such Funding Periods being one, two, three or six
months ("Euro-Rate Funding Period"); provided, that:
(i) Each Euro-Rate Funding Period shall begin on a London Business
Day, and the term "month", when used in connection with a Euro-Rate
Funding Period, shall mean the interval between the Euro-Convention Dates
in consecutive calendar months as to such Euro-Rate Funding Period (and
the "Euro-Convention Date" in a calendar month as to any Euro-Rate Funding
Period shall mean the day in such calendar month numerically corresponding
to the first day of such Euro- Rate Funding Period, except (x) if there is
no such numerically corresponding day in a calendar month, the
"Euro-Convention Date" for such calendar month shall mean the last London
Business Day of such calendar month, (y) if the first day of such
Euro-Rate Period is the last day of a calendar month, the "Euro-Convention
Date" for any calendar month shall mean the last London Business Day of
such calendar month and (z) otherwise, if a numerically corresponding day
in a given calendar month is not a London Business Day, the
"Euro-Convention Date" for such calendar month shall mean the next
following day that is a London Business Day, but not later than the last
Business Day of such calendar month);
(ii) In the case of (A) Revolving Credit Loans, the Borrower may not
select a Funding Period that would end after the Revolving Credit Maturity
Date and (B) Term Loans, the Borrower may not select a Funding Period that
would end after the Term Loan Maturity Date; and
(iii) The Borrower shall, in selecting any Funding Period, allow for
scheduled mandatory payments and foreseeable mandatory prepayments of the
Loans.
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(d) Transactional Amounts. Every selection of, conversion from,
conversion to or renewal of an interest rate Option and every payment or
prepayment of any Loans shall be in a principal amount such that after giving
effect thereto the aggregate principal amount of the Base Rate Portion of the
Revolving Credit Loans, or the aggregate principal amount of each Funding
Segment of the Euro-Rate Portion of the Revolving Credit Loans and the Term
Loans, respectively, as the case may be, shall be as set forth below:
Portion or Funding Segment Allowable Aggregate Principal Amounts
-------------------------- -------------------------------------
Base Rate Portion Any; and
Each Funding Segment of the Euro-Rate
Portion $1,000,000 or integral multiples of
$500,000.
(e) Euro-Rate Unascertainable; Impracticability. If
(i) on any date on which a Euro-Rate would otherwise be set the
Agent (in the case of clauses (A) or (B) below) or any Lender (in the case
of clause (C) below) shall have determined in good faith (which
determination shall be conclusive) that:
(A) adequate and reasonable means do not exist for
ascertaining such Euro-Rate,
(B) a contingency has occurred which materially and adversely
affects the interbank eurodollar market, as the case may be, or
(C) the effective cost to such Lender of funding a proposed
Funding Segment of the Euro-Rate Portion from a Corresponding Source
of Funds shall exceed the Euro-Rate applicable to such Funding
Segment, or
(ii) at any time any Lender shall have determined in good faith
(which determination shall be conclusive) that the making, commitment to
make, maintenance or funding of any part of the Euro-Rate Portion has been
made impracticable or unlawful by compliance by such Lender or a Notional
Euro-Rate Funding Office in good faith with any Law or guideline or
interpretation or administration thereof by any Governmental Authority
charged with the interpretation or administration thereof or with any
request or directive of any such Governmental Authority (whether or not
having the force of law);
then, and in any such event, the Agent or such Lender, as the case may be, shall
promptly notify the Borrower of such determination (and any Lender giving such
notice shall notify the Agent). Upon such date as shall be specified in such
notice (which shall not be earlier than the date such notice is given), the
obligation of each of the Potential Base Rate Lenders to allow the Borrower to
select, convert to or renew the Euro-Rate Option shall be suspended until the
Agent or such Lender, as the case may be, shall have later notified the Borrower
(and any Lender giving such notice shall notify the Agent) of the Agent's or
such Potential Base Rate Lender's determination in good faith (which
determination shall be conclusive) that the circumstance giving rise to such
previous determination no longer exist. The obligation of each of the Lenders
which are not Potential Base Rate Lenders to allow the Borrower to select,
convert to or renew the Euro-Rate Option shall not be suspended, provided that,
in the case of a determination under clause A of subsection (i) of this Section
2.06(e), the Euro-Rate shall be deemed to be the most recent ascertainable
Euro-Rate with a Euro-Rate Funding Period of one month (or, at the option of the
applicable Lender, such Lender's cost of funds as verified to the Borrower and
the Agent) until the Agent shall have later notified the Borrower of the Agent's
determination in good faith (which determination shall be conclusive) that the
circumstances giving rise to such previous determination no longer exist.
If any Potential Base Rate Lender notifies the Borrower of a
determination under subsection (ii) of this Section 2.06(e), the Euro-Rate
Portion of the Loans of such Lender (the "Affected Lender") shall automatically
be converted to the Base Rate Option as of the date specified in such notice
(and accrued interest thereon shall be due and payable on such date). When such
Affected Lender later
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notifies the Borrower and the Agent of such Affected Lender's determination in
good faith (which determination shall be conclusive) that the circumstances
giving rise to such previous determination no longer exist, any portion of the
Term Loans of the Affected Lender bearing interest at the Base Rate Option shall
automatically be converted to the Euro-Rate Option in accordance with paragraphs
(c) and (d) of this Section 2.06 as of the date specified in such notice (which
specified date of conversion shall not be earlier than the fourth Business Day
after the date of such notice) and accrued interest thereon shall be due and
payable on such date.
If at the time the Agent or a Potential Base Rate Lender makes a
determination under subsection (i) or (ii) of this Section 2.06(e) the Borrower
previously has notified the Agent that it wishes to select, convert to or renew
the Euro-Rate Option with respect to any proposed Loans but such Loans have not
yet been made, such notification shall be deemed to provide for selection of,
conversion to or renewal of the Base Rate Option instead of the Euro-Rate Option
with respect to such Loans or, in the case of a determination by a Lender, such
Loans of such Lender.
2.07. Conversion or Renewal of Interest Rate Options.
(a) Conversion or Renewal. Subject to the provisions of Section
2.13(b) hereof, and if no Event of Default or Potential Default shall have
occurred and be continuing or shall exist, the Borrower may convert any part of
the Loans from any interest rate Option or Options to one or more different
interest rate Options and may renew the Euro-Rate Option as to any Funding
Segment of the Euro-Rate Portion of the Loans:
(i) At any time with respect to conversion from the Base Rate
Option; or
(ii) At the expiration of any Funding Period with respect to
conversions from or renewals of the Euro-Rate Option as to the Funding
Segment corresponding to such expiring Funding Period.
Whenever the Borrower desires to convert or renew any interest rate Option or
Options, the Borrower shall provide to the Agent Standard Notice setting forth
the following information:
(v) Whether such renewal is to apply to Revolving Credit Loans or
Term Loans;
(w) The date, which shall be a Business Day, on which the proposed
conversion (in the case of Revolving Credit Loans only) or renewal is to
be made;
(x) The principal amounts selected in accordance with Section
2.06(d) hereof of the Base Rate Portion and each Funding Segment of the
Euro-Rate Portion to be converted from or renewed;
(y) The interest rate Option or Options selected in accordance with
Section 2.06(a) hereof and the principal amounts selected in accordance
with Section 2.06(d) hereof of the Base Rate Portion and each Funding
Segment of the Euro-Rate Portion to be converted to (in the case of
Revolving Credit Loans only); and
(z) With respect to each Funding Segment to be converted to (in the
case of Revolving Credit Loans only) or renewed, the Funding Period
selected in accordance with Section 2.06(c) hereof to apply to such
Funding Segment.
Standard Notice having been so provided, after the date specified in such
Standard Notice, interest shall be calculated upon the principal amount of the
Loans as so converted or renewed. Interest on the principal amount of any part
of the Loans converted or renewed (automatically or otherwise) shall be due and
payable on the conversion or renewal date.
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(b) Failure to Convert or Renew. Absent due notice from the Borrower
of conversion or renewal in the circumstances described in Section 2.07(a)(ii)
hereof, (i) any part of the Euro-Rate Portion of the Revolving Credit Loans for
which such notice is not received shall be converted automatically to the Base
Rate Option on the last day of the expiring Funding Period and (ii) any part of
the Euro-Rate Portion of the Term Loans for which such notice is not received
shall be renewed with a Funding Period of one month.
2.08. Prepayments Generally; Refinancing Fee.
(a) Prepayments Generally. Whenever the Borrower desires or is
required to prepay any part of its Loans, it shall provide Standard Notice to
the Agent setting forth the following information:
(i) Whether such prepayment is to be applied to the Revolving Credit
Loans or the Term Loans;
(ii) The date, which shall be a Business Day, on which the proposed
prepayment is to be made;
(iii) The total principal amount of such prepayment, which shall be
the sum of the principal amounts selected pursuant to clause (a)(iv) of
this Section 2.08; and
(iv) The principal amounts selected in accordance with Section
2.06(d) hereof of the Base Rate Portion and each part of each Funding
Segment of the Euro-Rate Portion to be prepaid.
Standard Notice having been so provided, on the date specified in such Standard
Notice, the principal amounts of the Base Rate Portion and each part of the
Euro-Rate Portion specified in such notice, together with interest on each such
principal amount to such date, shall be due and payable.
(b) Refinancing Fee. In the event the Loans are prepaid in full
within 18 months of the Preliminary Acceptance Date with the proceeds of or in
connection with the incurrence of debt or the issuance by any Loan Party of debt
or equity securities, or both, the Borrower shall pay to each Lender a fee in
the amount of one-half percent of the sum of (i) such Lender's full Revolving
Credit Committed Amount in effect on such date and (ii) the previously
outstanding amount of the Term Loans made by such Lender prepaid on such date.
2.09. Optional Prepayments. (a) The Borrower shall have the right at
its option from time to time to prepay its Loans in whole or part without
premium or penalty (subject, however, to Section 2.13(b) hereof):
(i) At any time with respect to any part of the Base Rate Portion;
or
(ii) At the expiration of any Funding Period with respect to
prepayment of the Euro-Rate Portion with respect to any part of the
Funding Segment corresponding to such expiring Funding Period.
Any such prepayment shall be made in accordance with Section 2.08 hereof.
(b) Optional prepayment, if made, shall be in integral multiples of
$1,000,000.
(c) Optional prepayments of the Term Loans shall be applied as
follows:
(i) First, to the next scheduled installment of principal due under
the Term Loans.
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(ii) Second, to the remaining installments due under the Term Loans,
on a pro rata basis among all the installments or, if the Borrower should
so elect by written notice to Agent at the time of such prepayment, in the
inverse order of their scheduled maturities.
2.10. Mandatory Prepayments.
(a) Borrowing Base. If on any date any Borrowing Base Certificate is
required to be furnished pursuant to Section 2.16(e) hereof the aggregate
principal amount of the Total Revolving Credit Exposures of the Revolving Credit
Lenders exceeds the Borrowing Base, the Borrower shall prepay (on the prepayment
date described in the last sentence of this paragraph) a principal amount of the
Revolving Credit Loans (and, to the extent of undrawn Letters of Credit, provide
cash collateral therefor in accordance with the terms hereof) in an aggregate
amount not less than the amount of such excess. The provision of cash collateral
in accordance with Section 2.25 hereof for Letters of Credit issued under this
Agreement shall be equivalent to the making of a prepayment under this Section
2.10(a). Concurrently with the delivery of any Borrowing Base Certificate which
shows such an excess, the Borrower shall give notice to the Agent of such
prepayment in accordance with Section 2.08 hereof, which notice shall specify a
prepayment date no later than three Business Days after the date of delivery of
such Borrowing Base Certificate.
(b) Asset Sales. The Borrower shall prepay a principal amount of the
Loans from time to time in an amount equal to the Net Cash Proceeds upon the
sale or other disposition, if any, of assets as to which sale or disposition the
consent of the Required Lenders is required to be, and has been, obtained (it
being understood that sales or other dispositions of assets permitted by Section
6.10(a) shall not require such prepayment and that sales or dispositions of
assets referred to in 6.10(b) from which the Net Cash Proceeds are deposited in
the Debt Service Reserve Account pursuant to the provisions of Section 5.17
hereof or are used to purchase replacement assets shall not require such
prepayment).
(c) Debt Issuances. The Borrower shall prepay a principal amount of
the Loans in an amount equal to the Net Cash Proceeds upon the issuance of any
indebtedness which is not permitted by the terms of Section 6.03 but is issued
pursuant to a waiver granted by the Required Lenders in their sole discretion
pursuant to the provisions of Section 9.03 hereof. Said principal amount shall
be paid on the date of receipt by any Loan Party of such Net Cash Proceeds.
(d) Equity Issuances. The Borrower shall prepay a principal amount
of the Loans in an amount equal to the Net Cash Proceeds upon the issuance of
equity securities of any Loan Party (other than the equity securities described
in Schedule 3.15 hereto), payable on the date of receipt by any Loan Party of
such Net Cash Proceeds.
(e) Insurance Proceeds and Condemnation Awards. The Borrower shall
prepay a principal amount of the Loans from time to time in an amount not less
than the amount of Net Proceeds (as defined Section 2.06 of the Mortgage) of
casualty insurance or of any condemnation award not (i) used for the payment of
costs of restoring improvements and equipment in accordance with such Section
2.06 or (ii) deposited in the Debt Service Reserve Account as set forth in
Section 5.17 hereof. Such prepayment shall be made on the earliest date on which
it shall have been determined that the Borrower will not, or is not entitled
under such Section 2.06 to, apply such proceeds to such restoration.
(f) Applicability of Certain Provisions. Prepayments required by
this Section 2.10 are subject to all of the terms and conditions applicable to
prepayments generally pursuant to Section 2.08 hereof and Section 2.13(b) hereof
and to all of the terms and conditions applicable to optional prepayments
pursuant to Section 2.09 hereof, except that Sections 2.08(a)(iv) and 2.09(b)
hereof shall not apply to such prepayments to the extent necessary to comply
with this Section 2.10. If the Borrower is required to give notice of a
prepayment but for any reason fails to give a notice in accordance with the
provisions of this Agreement, the amount as to which the Borrower is required to
have given notice of prepayment shall nevertheless be deemed due and payable as
of the date required to have been prepaid
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(for purposes of calculating interest on such amounts pursuant to Section
2.12(c) hereof and otherwise).
(h) Application of Prepayments. Prepayments required by subsections
(b), (c), (d) and (e) of this Section 2.10 shall be applied to the Term Loans in
the inverse order of their maturities.
2.11. Interest Payment Dates. Interest on the Base Rate Portion
shall be due and payable in arrears on each Regular Payment Date. Interest on
each Funding Segment of the Euro-Rate Portion shall be due and payable on the
last day of the corresponding Euro-Rate Funding Period and, if such Euro-Rate
Funding Period is longer than three months, also every third month during such
Funding Period. After maturity of any part of the Loans (by acceleration or
otherwise), interest on such part of the Loans shall be due and payable on
demand.
2.12. Pro Rata Treatment; Payments Generally; Interest on Overdue
Amounts.
(a) Pro Rata Treatment.
(i) Revolving Credit Loans. Each borrowing and conversion and
renewal of interest rate Options hereunder shall be made, and all payments
made in respect of principal, interest, Revolving Credit Commitment Fees,
and Letter of Credit Fees due from the Borrower hereunder or under the
Revolving Notes shall be applied, Pro Rata from and to each Revolving
Credit Lender, except for payments of interest involving an Affected
Lender as provided in Section 2.06(e) hereof and payments to a Lender
subject to a withholding deduction under Section 2.14(c) hereof. The
failure of any Revolving Credit Lender to make a Revolving Credit Loan (or
the failure of any other Lender to make any other Loan) shall not relieve
any other Revolving Credit Lender of its obligation to lend hereunder, but
neither the Agent nor any other Lender shall be responsible for the
failure of any other Lender to make a Revolving Credit Loan.
(ii) Term Loans. Each borrowing and conversion and renewal of
interest rate Options hereunder shall be made, and all payments made in
respect of principal, interest, Term Loan Commitment Fees due from the
Borrower hereunder or under the Notes in respect of Term Loans shall be
applied, Pro Rata from and to each Term Lender, except for payments of
interest involving an Affected Lender as provided in Section 2.06(e)
hereof and payments to a Lender subject to a withholding deduction under
Section 2.14(c) hereof. The failure of any Term Loan Lender to make a Term
Loan (or the failure of any other Lender to make any other Loan) shall not
relieve any other Lender of its obligation to lend hereunder, but neither
the Agent nor any other Lender shall be responsible for the failure of any
other Lender to make a Term Loan.
(b) Payments Generally. All payments and prepayments to be made by
any Loan Party in respect of principal, interest, fees, indemnity, expenses or
other amounts due from any Loan Party hereunder or under any Loan Document shall
be payable in Dollars at 12:00 o'clock Noon, Pittsburgh time, on the day when
due without presentment, demand, protest or notice of any kind, all of which are
hereby expressly waived, and an action therefor shall immediately accrue,
without setoff, counterclaim, withholding or other deduction of any kind or
nature, except for payments to a Lender subject to a withholding deduction under
Section 2.14(f) hereof. Except for payments under Sections 2.13, 2.22 and 9.06
hereof, such payments shall be made to the Agent at its Office in Dollars in
funds immediately available at such Office, and payments under Sections 2.13,
2.22 and 9.06 hereof shall be made to the applicable Lender or Issuing Bank at
such domestic account as it shall specify to the Borrower from time to time in
funds immediately available at such account. Any payment or prepayment received
by the Agent or such Lender or Issuing Bank after 12:00 o'clock Noon, Pittsburgh
time, on any day shall be deemed to have been received on the next succeeding
Business Day. The Agent shall distribute to the Lenders all such payments
received by it from any Loan Party as promptly as practicable after receipt by
the Agent, but in any event by 2:00 o'clock P.M., Pittsburgh time, if received
by 12:00 o'clock Noon, Pittsburgh time.
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(c) Interest on Overdue Amounts. To the extent permitted by law,
after there shall have become due (by acceleration or otherwise) principal,
interest, fees, indemnity, expenses or any other amounts due from any Loan Party
hereunder or under any other Loan Document, such amounts shall bear interest for
each day until paid (before and after judgment), payable on demand, at a rate
per annum (in each case based on a year of 365 days and actual days elapsed)
which for each day shall be equal to the following:
(i) In the case of any part of the Euro-Rate Portion of any Loans,
(A) until the end of the applicable then-current Funding Period at a rate
per annum 2% above the rate otherwise applicable to such part, and (B)
thereafter in accordance with the following clause (ii); and
(ii) In the case of any other amount due from any Loan Party
hereunder or under any Loan Document, 2% above the then-current Base Rate
Option applicable to Revolving Loans.
To the extent permitted by law, interest accrued on any amount which has become
due hereunder or under any Loan Document shall compound on a day-by-day basis,
and hence shall be added daily to the overdue amount to which such interest
relates.
2.13. Additional Compensation in Certain Circumstances.
(a) Increased Costs or Reduced Return Resulting From Taxes,
Reserves, Capital Adequacy Requirements, Expenses, Etc. If any Law or guideline
or interpretation or application thereof by any Governmental Authority charged
with the interpretation or administration thereof or compliance with any request
or directive of any Governmental Authority (whether or not having the force of
law) now existing or hereafter adopted:
(i) subjects any Lender or any Notional Euro-Rate Funding Office to
any tax or changes the basis of taxation with respect to this Agreement,
the Notes, the Loans or payments by any Loan Party of principal, interest,
commitment fee or other amounts due from the Borrower hereunder or under
the Notes (except for taxes on the overall net income or overall gross
receipts of such Lender or such Notional Euro-Rate Funding Office imposed
by the jurisdictions (federal, state and local) in which the Lender's
principal office or Notional Euro-Rate Funding Office is located),
(ii) imposes, modifies or deems applicable any reserve, special
deposit or similar requirement against credits or commitments to extend
credit extended by, assets (funded or contingent) of, deposits with or for
the account of, other acquisitions of funds by, such Lender or any
Notional Euro-Rate Funding Office (other than requirements expressly
included herein in the determination of the Euro-Rate hereunder),
(iii) imposes, modifies or deems applicable any capital adequacy or
similar requirement (A) against assets (funded or contingent) of, or
credits or commitments to extend credit extended by, any Lender or any
Notional Euro-Rate Funding Office, or (B) otherwise applicable to the
obligations of any Lender or any Notional Euro-Rate Funding Office under
this Agreement, or
(iv) imposes upon any Lender or any Notional Euro-Rate Funding
Office any other condition or expense with respect to this Agreement, the
Notes or its making, maintenance or funding of any Loan or any security
therefor,
and the result of any of the foregoing is to increase the cost to, reduce the
income receivable by, or impose any expense (including loss of margin) upon any
Lender, any Notional Euro-Rate Funding Office
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or, in the case of clause (iii) hereof, any Person controlling a Lender, with
respect to this Agreement, the Notes or the making, maintenance or funding of
any Loan (or, in the case of any capital adequacy or similar requirement, to
have the effect of reducing the rate of return on such Lender's or controlling
Person's capital, taking into consideration such Lender's or controlling
Person's policies with respect to capital adequacy) by an amount which such
Lender deems to be material (such Lender being deemed for this purpose to have
made, maintained or funded each Funding Segment of the Euro-Rate Portion from a
Corresponding Source of Funds), such Lender may from time to time notify the
Borrower of the amount determined in good faith (using any averaging and
attribution methods) by such Lender (which determination shall be conclusive
absent manifest error) to be necessary to compensate such Lender or such
Notional Euro-Rate Funding Office for such increase, reduction or imposition.
Such amount shall be due and payable by the Borrower to such Lender fifteen
Business Days after such notice is given, together with an amount equal to
interest on such amount from the date two Business Days after the date demanded
until such due date at the Base Rate Option applicable to Term Loans. A
certificate by such Lender as to the amount due and payable under this Section
2.13(a) from time to time and the method of calculating such amount shall be
conclusive absent manifest error. Each Lender agrees that it will use good faith
efforts to notify the Borrower of the occurrence of any event that would give
rise to a payment under this Section 2.13(a); provided, however, that any
failure of such Lender to give any such notice shall have no effect on any Loan
Party's obligations hereunder.
(b) Funding Breakage. In addition to all other amounts payable
hereunder, if and to the extent for any reason any part of any Funding Segment
of any Euro-Rate Portion of the Loans becomes due (by acceleration or
otherwise), or is paid, prepaid or converted to another interest rate Option
(whether or not such payment, prepayment or conversion is mandatory or automatic
and whether or not such payment or prepayment is then due), on a day other than
the last day of the corresponding Funding Period (the date such amount so
becomes due, or is so paid, prepaid or converted, being referred to as the
"Funding Breakage Date"), the Borrower shall pay each Lender an amount ("Funding
Breakage Indemnity") determined by such Lender as follows:
(i) first, calculate the following amount: (A) the principal amount
of such Funding Segment of the Loans owing to such Lender which so became
due, or which was so paid, prepaid or converted, times (B) the greater of
(x) zero or (y) the rate of interest applicable to such principal amount
on the Funding Breakage Date minus the Treasury Rate as of the Funding
Breakage Date, times (C) the number of days from and including the Funding
Breakage Date to but not including the last day of such Funding Period,
times (D) 1/360;
(ii) the Funding Breakage Indemnity to be paid by the Borrower to
such Lender shall be the amount equal to the present value as of the
Funding Breakage Date (discounted at the Treasury Rate as of such Funding
Breakage Date, and calculated on the basis of a year of 365 or 366 days,
as the case may be, and actual days elapsed) of the amount described in
the preceding clause (i) (which amount described in the preceding clause
(i) is assumed for purposes of such present value calculation to be
payable on the last day of the corresponding Funding Period).
Such Funding Breakage Indemnity shall be due and payable on demand, and each
Lender shall, upon making such demand, notify the Agent of the amount so
demanded. In addition, the Borrower shall, on the due date for payment of any
Funding Breakage Indemnity, pay to such Lender an additional amount equal to
interest on such Funding Breakage Indemnity from the Funding Breakage Date to
but not including such due date at the Base Rate Option (calculated on the basis
of a year of 365 days and actual days elapsed). The amount payable to each
Lender under this Section 2.13(b) shall be determined in good faith by such
Lender, and such determination shall be conclusive.
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2.14 Taxes.
(a) Payments Net of Taxes. All payments made by any Loan Party under
this Agreement or any other Loan Document shall be made free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding (x) in the case of each Lender and the Agent, net income taxes (but
not withholding taxes imposed on gross interest income) imposed on such Lender
or the Agent (as the case may be) by the United States, and net income taxes and
franchise taxes imposed on such Lender or the Agent (as the case may be) by the
jurisdiction under the laws of which such Lender or the Agent (as the case may
be) is organized or by any political subdivision thereof, and (y) in the case of
each Lender, net income taxes and franchise taxes imposed on such Lender by the
jurisdiction in which is located the Lender's lending office which makes or
books a particular extension of credit hereunder or any political subdivision
thereof (all such non-excluded taxes, levies, imposts, deduction, charges,
withholdings and liabilities being referred to as "Taxes"). If any Loan Party
shall be required by law to deduct any Taxes from or in respect of any sum
payable under this Agreement or any other Loan Document to the Lender or the
Agent, (i) the sum payable shall be increased as may be necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 2.14) such Lender or the Agent (as the case may
be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) such Loan Party shall make such deductions, and (iii)
such Loan Party shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.
(b) Other Taxes. In addition, the Borrower agrees to pay any present
or future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies which arise from any payment made under this Agreement
or any other Loan Document or from the execution, delivery or registration of,
or otherwise with respect to, this Agreement or any other Loan Document
(hereinafter referred to as "Other Taxes").
(c) Indemnity. The Borrower will indemnify each Lender and the Agent
for the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 2.14) paid by such Lender or the Agent (as the case may be) and any
liability (including, without limitation, penalties, interest and expenses)
arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted. This indemnification shall be made
within 30 days from the date such Lender or the Agent (as the case may be) makes
written demand therefor.
(d) Receipts, etc. Within 45 days after the date of any payment of
Taxes or Other Taxes, the Borrower will furnish to the Agent the original or a
certified copy of a receipt evidencing payment thereof.
(e) Other. Without prejudice to the survival of any other agreement
of the Borrower hereunder, the obligations of the Borrower contained in this
Section 2.14 shall survive the payment in full of all other obligations of the
Borrower under this Agreement and the other Loan Documents, termination of all
commitments to extend credit under, and all letters of credit issued under, the
Loan Documents, and all other events and circumstances whatever. Nothing in this
Section 2.14 or otherwise in this Agreement shall require the Agent or any
Lender to disclose to the Borrower any of its tax returns (or any other
information that it deems to be confidential or proprietary).
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(f) Withholding Tax Exemption.
(i) Each Lender organized under the laws of a jurisdiction outside
the United States shall, on the date such Lender becomes party to this
Agreement, and from time to time thereafter if requested in writing by the
Borrower or the Agent, provide the Agent and the Borrower with the forms
prescribed by the United States Internal Revenue Service certifying as to
such Lender's status for purposes of determining exemption from, or
reduced rate applicable to, United States withholding taxes with respect
to payments to be made to such Lender under this Agreement and the other
Loan Documents; provided, that a Lender shall not be obligated to provide
any such form after the date such Lender becomes party to this Agreement
if such Lender is not legally able to do so.
(ii) The Borrower shall not be required to indemnify any Lender, or
to pay any additional amounts to any Lender, in respect of United States
withholding taxes (or any withholding tax imposed by a state of the United
States that applies only when such United States withholding tax is
imposed), pursuant to Sections 2.14(a) or 2.14(c), to the extent that: (A)
the obligation to withhold amounts with respect to United States
withholding tax existed on the date such Lender became a party to this
Agreement; provided, that this clause (A) shall not apply to a Lender that
became a Lender as a result of an assignment made or other action taken at
the request of the Borrower, or (B) the obligation to make such
indemnification or to pay such additional amounts would not have arisen
but for a failure of such Lender to comply with the provisions of Section
2.14(f)(i).
(iii) If the Borrower is required under Section 2.14(a) or 2.14(c)
to indemnify any Lender organized under the laws of a jurisdiction outside
the United States, or to pay additional amounts to any such Lender, in
respect of United States withholding taxes (or any withholding tax imposed
by a state of the United States that applies only when such United States
withholding tax is imposed), and such Lender (herein the "Tax Affected
Lender") does not waive the requirement for such indemnification or
payment after request by the Borrower that it do so, then, if the Borrower
finds a financial institution which offers in writing to purchase all such
Tax Affected Lender's outstanding Notes and Commitments, in accordance
with Section 9.14(c), at a price equal to the full outstanding principal
amount thereof together with accrued and unpaid interest and fees to the
date of purchase and all other amounts accrued or payable to such Tax
Affected Lender to the date of purchase (including but not limited to
funding breakage under Section 2.13(b) to the extent such date of purchase
falls within a Euro-Rate Funding Period), such Tax Affected Lender will
accept such offer. Nothing in this Section 2.14(f) shall limit the rights
of the Agent and the Issuing Bank under Section 9.14(c) or shall require a
Lender which is also the Agent or the Issuing Bank to accept any such
offer.
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2.15. Funding by Branch, Subsidiary or Affiliate.
(a) Notional Funding. Each Lender shall have the right from time to
time, prospectively or retrospectively, without notice to the Borrower, to deem
any branch, subsidiary or affiliate of such Lender to have made, maintained or
funded any part of the Euro-Rate Portion at any time. Any branch, subsidiary or
affiliate so deemed shall be known as a "Notional Euro-Rate Funding Office."
Such Lender shall deem any part of the Euro-Rate Portion of the Loans or the
funding therefor to have been transferred to a different Notional Euro-Rate
Funding Office if such transfer would avoid or cure an event or condition
described in Section 2.06(e)(ii) hereof or would lessen compensation payable by
the Borrower under Section 2.13(a) hereof, and if such Lender determines in its
sole discretion that such transfer would be practicable and would not have a
material adverse effect on such part of the Loans, such Lender or any Notional
Euro-Rate Funding Office (it being assumed for purposes of such determination
that each part of the Euro-Rate Portion is actually made or maintained by or
funded through the corresponding Notional Euro-Rate Funding Office). Notional
Euro-Rate Funding Offices may be selected by such Lender without regard to such
Lender's actual methods of making, maintaining or funding Loans or any sources
of funding actually used by or available to such Lender.
(b) Actual Funding. Each Lender shall have the right from time to
time to make or maintain any part of the Euro-Rate Portion by arranging for a
branch, subsidiary or affiliate of such Lender to make or maintain such part of
the Euro-Rate Portion. Such Lender shall have the right to (i) hold any
applicable Note payable to its order for the benefit and account of such branch,
subsidiary or affiliate or (ii) request the Borrower to issue one or more
promissory notes in the principal amount of such Euro-Rate Portion, in
substantially the form attached hereto as Exhibit A or Exhibit B, as the case
may be, with the blanks appropriately filled, payable to such branch, subsidiary
or affiliate and with appropriate changes reflecting that the holder thereof is
not obligated to make any additional Loans to the Borrower. The Borrower agrees
to comply promptly with any request under subsection (ii) of this Section
2.15(b). If any Lender causes a branch, subsidiary or affiliate to make or
maintain any part of the Euro-Rate Portion hereunder, all terms and conditions
of this Agreement shall, except where the context clearly requires otherwise, be
applicable to such part of the Euro-Rate Portion and to any note payable to the
order of such branch, subsidiary or affiliate to the same extent as if such part
of the Euro-Rate Portion were made or maintained and such note were a Revolving
Credit Note or Term Loan Note, as the case may be, payable to such Lender's
order.
2.16. Borrowing Base.
(a) Borrowing Base. The "Borrowing Base" at any time shall mean the
sum, at the date of the most recent Borrowing Base Certificate required to be
furnished pursuant to Section 2.16(e) hereof, of
(i) 95% of the net value of Eligible Receivables; plus
(ii) the sum of 65% of the net value of Raw Materials, plus
30% of the net value of Spares, in each case which are owned by the Borrower and
which meet each of the requirements for Eligible Inventory set forth in Section
2.16(d) hereof and in the case of Commercial Grade Finished Goods and Other
Finished Goods are held for sale by the Borrower in the ordinary course of its
business; provided that, after the Final Acceptance Date, the sum calculated
under this subsection (a)(ii) shall not constitute more than one-half of the
Borrowing Base.
(b) Eligible Receivables. "Eligible Receivable" at any time shall
mean all rights to payments due and to become due to the Borrower from SDI (each
such right, a "Receivable") which meet each of the following requirements at
such time:
(i) The Borrower has good title to such Receivable, free and
clear of any Lien, except for the Liens in favor of the Agent for the benefit of
the Lenders and the Agent securing the
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Obligations, and such Receivable is subject to such a valid and perfected Lien
in favor of the Agent;
(ii) Such Receivable constitutes an "account" as defined in
the Uniform Commercial Code as in effect in the State of Indiana (and,
accordingly, without limitation, is not evidenced by any promissory note or
other instrument);
(iii) Such Receivable arises from the sale of goods or
rendering of services performed by the Borrower in the ordinary course of its
business. Such transaction was effected pursuant to the Borrower's ordinary and
customary policies, practices and procedures, including but not limited to
credit policies;
(iv) Such Receivable is collectible, is not disputed, and
represents an unconditional payment obligation in favor of the Borrower. All
services in connection with such Receivable have been rendered and all
merchandise sold in connection with such Receivable has been shipped (other than
merchandise with respect to Receivables not exceeding $7,000,000 in the
aggregate at any time, which merchandise is being temporarily held pending
shipment) and has not been subject to return, rejection, repossession, dispute,
offset, defense or counterclaim (including but not limited to any claim for
credits, allowances or adjustments). No contra account or other obligation,
contingent or otherwise, exists from the Borrower to such obligor;
(v) Such Receivable has been fully invoiced by the Borrower,
is payable by its terms in full in Dollars on ordinary trade terms, and in any
event is payable no later than 30 days after its original invoice date. The due
date of such Receivable has not been extended;
(vi) The related invoice has not remained unpaid for more than
35 days past its original invoice date;
(vii) Such Receivable shall not have arisen out of a contract
or agreement which by its terms purports to forbid or make void or unenforceable
any assignment thereof or Lien thereon;
(viii) No invoices (excluding amounts in dispute) of the
Borrower to the obligor on such Receivable remain unpaid 35 days past their
respective invoice dates.
(ix) SDI shall have waived in writing and to the satisfaction
of Agent any and all rights of setoff, defense or counterclaim that SDI might
have with respect to such payments.
Notwithstanding the foregoing, "Eligible Receivable" shall not include (A) any
Receivable with respect to which the account debtor's obligation to pay is
conditional upon such account debtor's approval or is otherwise subject to any
repurchase obligation or return right, as with sales made on a xxxx-and-hold
(except as permitted by clause (iv) above), guaranteed sale, sale-and-return,
sale on approval or consignment basis; (B) any Receivable with respect to which
the account debtor is domiciled or has its principal place of business or chief
executive office in Indiana, Minnesota, New Jersey or any other state denying
creditors access to its courts in the absence of a Notice of Business Activities
Report (which in Indiana, Minnesota and New Jersey are currently required by
Xxxxx In. Stat. Xxx. ss. 6-8.1-6-6, 1988 Minn. Sess. Law Serv. Sec. 41 (West)
and N.J. Stat. Xxx. ss. 14A.13-18, respectively) or other similar filing, unless
a current Notice of Business Activities Report or similar filing has been made
with the applicable state agency (and a copy thereof provided to the Agent) or
unless an exemption from such requirement exists; or (C) any Receivable
generated by the sale of merchandise which is being held pending shipment in any
public warehouse or premises leased by the Borrower or any other premises not
owned by the Borrower, if the bailee, landlord or owner thereof has not
consented in writing to the existence and first priority of the Liens in favor
of the Agent for the benefit of the Lenders and the Agent securing the
Obligations and the Agent's right to enter such warehouse or premises and take
possession of and remove such merchandise. Any Receivable which is at any time
an Eligible Receivable, but which subsequently fails to meet any of the
foregoing requirements, shall forthwith cease to be an
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Eligible Receivable until such time as it once again meets all of the foregoing
requirements.
The "Net Value" of an Eligible Receivable shall be its face amount, net of any
discount for prompt payment (and net of any other amount representing payment of
finance charges, late charges, or interest (however denominated)), and net of
any portion thereof which constitutes payment of sales, use or other taxes.
(c) Certain Adjustments and Exclusions. The Agent, upon the
direction of the Required Lenders, from time to time may adjust the percentages
or dollar amounts set forth in Section 2.16(a) or exclude any otherwise Eligible
Receivables from the class of Eligible Receivables, in each case based on
reasonable determinations as to the creditworthiness of the obligor, as to the
aggregate amount of receivables owing by such obligor and its affiliates, or as
to such other and further eligibility standards as the Required Lenders may
reasonably elect to impose from time to time; provided, however, that neither
the percentages nor the dollar amounts set forth in Section 2.16(a) may be
increased without the written consent of all the Revolving Credit Lenders. The
Agent shall give notice to the Borrower of the terms of any such adjustment or
exclusion at least thirty days prior to the effective date thereof. Except as
otherwise expressly stated in such notice, all such exclusions shall be
continuing and cumulative, and an exclusion as to any obligor shall apply in the
aggregate to all receivables of such obligor and its affiliates. The Borrower
shall, not later than one Business Day after the Agent effects any such
exclusion, deliver to the Agent a revised Borrowing Base Certificate reflecting
the Borrowing Base as redetermined in accordance with such exclusion. The making
of a Revolving Credit Loan in reliance on a Borrowing Base Certificate shall not
affect the Lenders' right later to exclude any receivables in accordance with
this Section 2.16(c). No Eligible Receivable excluded under this Section 2.16(c)
shall be included by the Borrower in any later Borrowing Base Certificate
without written permission by the Agent.
(d) Eligible Inventory. "Eligible Inventory" shall mean at any time
(i) Raw Materials and (ii) Spares, in each case owned by the Borrower and held
for use by the Borrower in the ordinary course of its business which meet each
of the following requirements at such time:
(i) The Borrower has good title to such Inventory, free and
clear of any Lien, except for the Liens in favor of the Agent for the benefit of
the Lenders and the Agent securing the Obligations, and such Inventory and
proceeds thereof is subject to such a valid and perfected Lien in favor of the
Agent;
(ii) Such Inventory is in good and merchantable condition, is
readily salable or usable by the Borrower in the ordinary course of its business
and has not been held by the Borrower for more than 180 days except for Raw
Materials and Spares;
(iii) Such Inventory is located in the United States or Canada
and is in the possession of the Borrower; and
(iv) Such Inventory conforms to such other eligibility
standards as the Required Lenders reasonably may impose from time to time by
notice to the Borrower of such eligibility standards at least thirty days prior
to the effective date thereof.
Notwithstanding the foregoing, no Inventory shall constitute Eligible Inventory
(A) if, at the request of the Borrower, the Lenders release their security
interest therein, (B) if it is produced in violation of the Fair Labor Standards
Act and subject to the so-called "hot goods" provision contained in Title 219,
ss.215(a)(1) of the United States Code, (C) if it is finished goods held for
consumption by the Borrower and not for sale in the ordinary course of business,
or (D) if it is located in any public warehouse or premises leased by the
Borrower, or any other premises not owned by the Borrower, where the bailee,
landlord or owner thereof has not consented in writing to the existence and
first priority of the Liens in favor of the Agent for the benefit of the Lenders
and the Agent securing the Obligations and the Agent's
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right to enter such warehouse or premises and take possession of and remove such
Inventory. Any Inventory which is at any time Eligible Inventory, but which
subsequently fails to meet any of the foregoing requirements, shall forthwith
cease to be Eligible Inventory until such time as it once again meets all of the
foregoing requirements.
The "Net Value" of Eligible Inventory shall be the Borrower's book value of such
Eligible Inventory at lower of cost or market, net of all reserves against such
Eligible Inventory required by GAAP, with "cost" calculated on a first-in,
first-out basis, all determined in accordance with GAAP.
(e) Borrowing Base Certificates. On the date of the initial
Revolving Credit Loan made hereunder and from time to time thereafter as
specified herein, including without limitation during the period of amortization
described in Section 2.01(d) hereof, the Borrower shall furnish to the Agent a
certificate ("Borrowing Base Certificate") substantially in the form of Exhibit
D hereto, appropriately completed, signed by a Responsible Officer of the
Borrower and setting forth the Borrowing Base and the other information required
therein. Borrowing Base Certificates shall be delivered to the Agent:
(i) on the first Business Day of each month after the date of the
initial Revolving Credit Loan made hereunder;
(ii) as required by Section 2.16(c) hereof; and
(iii) not later than two Business Days after the reasonable request
therefor by the Agent or the Required Lenders from time to time.
To the extent the Borrower is required to deliver a Borrowing Base Certificate
on a particular day (A) the Eligible Receivables reflected on such Borrowing
Base Certificate and the Net Value applicable thereto shall be determined as of
a day (which shall be specified in the Borrowing Base Certificate) not earlier
than the Business Day before the day the Borrower is required to deliver such
Borrowing Base Certificate, and (B) the Eligible Inventory reflected on such
Borrowing Base Certificate and the Net Value applicable thereto shall be
determined as of a day (which shall be specified in the Borrowing Base
Certificate) not earlier than the Business Day before the day the Borrower is
required to deliver such Borrowing Base Certificate, provided, however, that
such date of determination may be a day not earlier than 40 days before the day
the Borrower is required to deliver such Borrowing Base Certificate, if the
Borrowing Base Certificate includes certification that there has been no
material decrease in the Net Value of Eligible Inventory since such specified
date. The Borrowing Base set forth in any such Borrowing Base Certificate shall
be effective until delivery of a subsequent Borrowing Base Certificate.
(f) Any failure to comply with the requirements of Section 2.10 with
respect to a principal amount of Loans not exceeding the lesser of $1,500,000
and an amount equal to 15% of the Borrowing Base for a period not longer than
five Business Days shall be deemed to have been waived by the Lenders if the
Agent, in the exercise of its sole and absolute discretion, determines such
waiver to be appropriate.
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2.17. The Letter of Credit Subfacility.
(a) General. Subject to the terms and conditions of this Agreement,
and relying upon the representations and warranties herein set forth and upon
the agreements of the Revolving Credit Lenders set forth in Sections 2.19 and
2.20 hereof, the Issuing Bank agrees to issue Letters of Credit for the account
of the Borrower at any time or from time to time on or after the Closing Date;
provided, however, that (i) the Issuing Bank shall have no obligation to issue
any Letter of Credit if the aggregate Letter of Credit Exposure upon such
issuance would exceed $10,000,000 at any time after the Preliminary Acceptance
Date or would exceed $8,000,000 at any time after February 28, 1998 and prior to
the Preliminary Acceptance Date or would exceed $1,500,000 after the date hereof
and on or prior to February 28, 1998, and (ii) the Issuing Bank shall have no
obligation to issue any Letter of Credit if the aggregate Total Revolving Credit
Exposure of all Revolving Credit Lenders upon such issuance would exceed the
least of (x) the aggregate Revolving Credit Committed Amounts of the Revolving
Credit Lenders at such time, (y) the Borrowing Base at such time and (z) from
February 28, 1998 until the Preliminary Acceptance Date but not thereafter
$8,000,000 or from the Closing Date until February 28, 1998, $1,500,000. The
issuance of a Letter of Credit shall be equivalent to the making of a Revolving
Credit Loan in accordance with Section 2.01 hereof.
(b) Terms of Letters of Credit. The Borrower shall not request any
Letter of Credit to be issued except within the following limitations: (i) each
Letter of Credit shall have an expiration date no later than the earlier of (A)
12 months after the date of issuance thereof and (B) the date which is 60 days
prior to the Revolving Credit Maturity Date, (ii) shall be denominated in
Dollars and (iii) shall be payable only against sight drafts (and not time
drafts).
(c) Letters of Credit Satisfactory to Issuing Bank. Each Letter of
Credit shall be satisfactory in form, substance and beneficiary to the Issuing
Bank in its discretion. Each Standby Letter of Credit shall be used by the
Borrower as a standby letter of credit to provide credit enhancement for
workers' compensation obligations, contract performance guarantees, and like
bonding requirements, all in the ordinary course of business of the Borrower.
The provisions of this Section 2.17(c) represent only an obligation of the
Borrower to the Issuing Bank and the Revolving Credit Lenders; the Issuing Bank
shall have no obligation to the Revolving Credit Lenders to ascertain the
purpose of any Letter of Credit, and the rights and obligations of the Revolving
Credit Lenders and the Issuing Bank among themselves shall not be impaired or
affected by a breach of this Section 2.17(c).
(d) Letter of Credit Fee. The Borrower shall pay to the Agent for
the account of each Revolving Credit Lender a fee (the "Letter of Credit Fee")
equal to 0.50% per annum for Trade Letters of Credit and the Applicable Margin
per annum over the Euro-Rate Option as set forth in Section 2.06(b) hereof and
in effect from time to time during the applicable period, for Standby Letters of
Credit (in each case based on a year of 365 or 366 days, as the case may be, and
actual days elapsed), for each Letter of Credit for each day from and including
the date of issuance thereof to and including the date of expiration or
termination thereof, on the Letter of Credit Undrawn Availability on such day.
Such Letter of Credit Fee shall be due and payable for the preceding period for
which such fee has not been paid on each of the following dates: (i) each
Regular Payment Date, (ii) the date of each drawing on such Letter of Credit,
and (iii) the date of expiration or termination of such Letter of Credit.
(e) Facing Fee; Administration Fees. The Borrower shall pay to the
Agent, for the sole account of the Issuing Bank, for each Letter of Credit, on
the date of issuance of such Letter of Credit, a fee (the "Letter of Credit
Facing Fee") equal to (i) in the case of a Standby Letter of Credit, 0.25% of
the stated amount of such Standby Letter of Credit and (ii) in the case of a
Trade Letter of Credit, .125% of the stated amount of such Trade Letter of
Credit. In addition, the Borrower shall pay to the Agent, for the sole account
of the Issuing Bank, such other administration, maintenance, amendment, drawing
and negotiation fees as may be customarily charged by the Issuing Bank from time
to time in connection with letters of credit.
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2.18. Procedure for Issuance and Amendment of Letters of Credit.
(a) Request for Issuance. The Borrower may from time to time
request, upon at least three Business Days' notice, the Issuing Bank to issue a
Letter of Credit by:
(i) delivering to the Issuing Bank and the Agent a written request
to such effect, specifying the date on which such Letter of Credit is to
be issued, the expiration date thereof, and the stated amount thereof, and
(ii) delivering to the Issuing Bank an application, in such form as
may from time to time be approved by the Issuing Bank (the "Letter of
Credit Application"), completed to the satisfaction of the Issuing Bank,
together with such other certificates, documents and other papers and
information as the Issuing Bank may request.
Upon issuing each such Letter of Credit, the Issuing Bank shall promptly notify
the Agent (by telephone or otherwise), and furnish the Agent with the proposed
form of Letter of Credit to be issued. The Agent shall, promptly upon receiving
such notice, notify the Revolving Credit Lenders of such proposed Letter of
Credit (which notice shall specify the stated amount and term of such proposed
Letter of Credit), and shall determine, as of the close of business on the
Business Day before such proposed issuance, whether such proposed Letter of
Credit complies with the limitations set forth in Sections 2.17(a) and 2.17(b)
hereof. Unless such limitations are not satisfied, or unless the Required
Lenders have given notice to the Agent to cease issuing Letters of Credit
pursuant to Section 2.18(c)(ii) hereof, the Agent shall notify the Issuing Bank
(in writing or by telephone promptly confirmed in writing) that the Issuing Bank
is authorized to issue such Letter of Credit. If the Issuing Bank issues a
Letter of Credit, it shall deliver the original of such Letter of Credit to the
beneficiary thereof or as the Borrower shall otherwise direct, and shall
promptly notify the Agent thereof and furnish a copy thereof to the Agent.
(b) Request for Extension or Increase. The Borrower may from time to
time request the Issuing Bank to extend the expiration date of an outstanding
Letter of Credit or increase the Letter of Credit Undrawn Availability of such
Letter of Credit. Such extension or increase shall for all purposes hereunder be
treated as though the Borrower had requested issuance of a replacement Letter of
Credit (except only that the Issuing Bank may, if it elects, issue a notice of
extension or increase in lieu of issuing a new Letter of Credit in substitution
for the outstanding Letter of Credit).
(c) Limitations on Issuance, Extension and Amendment.
(i) As between the Issuing Bank, on the one hand, and the Agent and
the Lenders, on the other hand, the Issuing Bank shall be justified and
fully protected in issuing such Letter of Credit after receiving
authorization from the Agent as provided in Section 2.18(a) hereof,
notwithstanding any subsequent notices to the Issuing Bank, any knowledge
of an Event of Default (unless the Issuing Bank shall have received a
notice specifying that such Event of Default is an "Event of Default"
under this Agreement) or Potential Default, any knowledge of failure of
any condition specified in Section 4.03 hereof to be satisfied, any other
knowledge of the Issuing Bank, or any other event, condition or
circumstance whatever. The Issuing Bank may amend, modify or supplement
Letters of Credit or Letter of Credit Applications, or waive compliance to
any condition of issuance or payment, without the consent of, and without
liability to, the Agent or any Lender, provided that any such amendment,
modification or supplement that extends the expiration date or increases
the Letter of Credit Undrawn Availability of an outstanding Letter of
Credit shall be subject to Sections 2.17(a) and (b) hereof.
(ii) As between the Agent, on the one hand, and the Lenders, on the
other hand, the Agent shall not authorize issuance of any Letter of Credit
if the Agent shall have received, at least two Business Days before
authorizing such issuance, from the Required Lenders an unrevoked written
notice that any condition precedent set forth in Section 4.03 will not be
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satisfied and expressly requesting that the Agent direct the Issuing Bank
to cease to issue Letters of Credit. Absent such notice, or unless the
Agent determines that the applicable limitations set forth in Sections
2.17(a) and 2.17(b) hereof are not satisfied, the Agent shall be justified
and fully protected, as against the Lenders, in authorizing the Issuing
Bank to issue such Letter of Credit, notwithstanding any subsequent
notices to the Agent, any knowledge of an Event of Default or Potential
Default, any knowledge of failure of any condition specified in Section
4.03 hereof to be satisfied, any other knowledge of the Agent, or any
other event, condition or circumstance whatever.
2.19. Letter of Credit Participating Interests.
(a) Generally. Concurrently with the issuance of each Letter of
Credit, the Issuing Bank automatically shall be deemed, irrevocably and
unconditionally, to have sold, assigned, transferred and conveyed to each other
Revolving Credit Lender, and each other Revolving Credit Lender automatically
shall be deemed, irrevocably and unconditionally, severally to have purchased,
acquired, accepted and assumed from the Issuing Bank, without recourse to, or
representation or warranty by, the Issuing Bank, an undivided interest, in a
proportion equal to such Revolving Credit Lender's Pro Rata share, in all of the
Issuing Bank's rights and obligations in, to or under such Letter of Credit, the
related Letter of Credit Application, the Letter of Credit Reimbursement
Obligations, and all collateral, guarantees and other rights from time to time
directly or indirectly securing the foregoing (such interest of each Revolving
Credit Lender being referred to herein as a "Letter of Credit Participating
Interest"). Amounts other than Letter of Credit Reimbursement Obligations and
Letter of Credit Fees payable from time to time under or in connection with a
Letter of Credit or Letter of Credit Application shall be for the sole account
of the Issuing Bank. On the date that any Purchasing Lender becomes a party to
this Agreement in accordance with Section 9.14 hereof, Letter of Credit
Participating Interests in any outstanding Letters of Credit held by the
Revolving Credit Lender from which such Purchasing Lender acquired its interest
hereunder shall be proportionately reallotted between such Purchasing Lender and
such transferor Revolving Credit Lender (and, to the extent such transferor
Revolving Credit Lender is the Issuing Bank, the Purchasing Lender shall be
deemed to have acquired a Letter of Credit Participating Interest from such
transferor Revolving Credit Lender to such extent).
(b) Obligations Absolute. Notwithstanding any other provision
hereof, each Revolving Credit Lender hereby agrees that its obligation to
participate in each Letter of Credit issued in accordance herewith, its
obligation to make the payments specified in Section 2.20 hereof, and the right
of the Issuing Bank to receive such payments in the manner specified therein,
are each absolute, irrevocable and unconditional and shall not be affected by
any event, condition or circumstance whatever. The failure of any Revolving
Credit Lender to make any such payment shall not relieve any other Revolving
Credit Lender of its funding obligation hereunder on the date due, but no
Revolving Credit Lender shall be responsible for the failure of any other
Revolving Credit Lender to meet its funding obligations hereunder.
2.20. Letter of Credit Drawings and Reimbursements.
(a) Borrower's Reimbursement Obligation. The Borrower hereby agrees
to reimburse the Issuing Bank, by making payment to the Agent for the account of
the Issuing Bank in accordance with Section 2.12(b) hereof on the date of each
payment made by the Issuing Bank under any Letter of Credit, without notice,
protest or demand, all of which are hereby waived, and an action therefor shall
immediately accrue. To the extent such payment is not timely made, the Borrower
hereby agrees to pay to the Agent, for the account of the Issuing Bank, on
demand, interest on any Letter of Credit Unreimbursed Draws for each day from
and including the date of such payment by the Issuing Bank until paid (before
and after judgment) in accordance with Section 2.12(c) hereof, at the rate per
annum set forth in Section 2.12(c)(ii) hereof.
(b) Payment by Lenders on Account of Unreimbursed Draws. If the
Issuing Bank
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makes a payment under any Letter of Credit and is not reimbursed in full
therefor on such payment date in accordance with Section 2.20(a) hereof, the
Issuing Bank will promptly notify the Agent thereof (which notice may be by
telephone), and the Agent shall forthwith notify each Revolving Credit Lender
(which notice may be by telephone promptly confirmed in writing) thereof. No
later than the Agent's close of business on the date such notice is given, each
such Revolving Credit Lender will pay to the Agent, for the account of the
Issuing Bank, in immediately available funds, an amount equal to such Revolving
Credit Lender's Pro Rata share of the unreimbursed portion of such payment by
the Issuing Bank, provided such notice is given no later than 2:00 o'clock P.M.,
Pittsburgh time. If and to the extent that any Revolving Credit Lender fails to
make such payment to the Issuing Bank on such date, such Revolving Credit Lender
shall pay such amount on demand, together with interest, for the Issuing Bank's
own account, for each day from and including the date of the Issuing Bank's
payment to and including the date of repayment to the Issuing Bank (before and
after judgment) at the rate per annum for each day from and including the date
of such payment by the Issuing Bank to and including the second Business Day
thereafter, as set forth in Section 8.14.
(c) Distributions to Lenders. If, at any time, after there occurs a
Letter of Credit Unreimbursed Draw and the Issuing Bank has received from any
Revolving Credit Lender such Revolving Credit Lender's share of such Letter of
Credit Unreimbursed Draw, and the Issuing Bank receives any payment or makes any
application of funds on account of the Letter of Credit Reimbursement Obligation
arising from such Letter of Credit Unreimbursed Draw, the Issuing Bank will pay
to the Agent, for the account of such Revolving Credit Lender, such Revolving
Credit Lender's Pro Rata share of such payment.
(d) Rescission. If any amount received by the Issuing Bank on
account of any Letter of Credit Reimbursement Obligation shall be avoided,
rescinded or otherwise returned or paid over by the Issuing Bank for any reason
at any time, whether before or after the termination of this Agreement (or the
Issuing Bank believes in good faith that such avoidance, rescission, return or
payment is required, whether or not such matter has been adjudicated), each such
Revolving Credit Lender will, promptly upon notice from the Agent or the Issuing
Bank, pay over to the Agent for the account of the Issuing Bank its Pro Rata
share of such amount, together with its Pro Rata share of any interest or
penalties payable with respect thereto.
(e) Equalization. If any Revolving Credit Lender receives any
payment or makes any application on account of its Letter of Credit
Participating Interest, such Revolving Credit Lender shall forthwith pay over to
the Issuing Bank, in Dollars and in like kind of funds received or applied by it
the amount in excess of such Revolving Credit Lender's ratable share of the
amount so received or applied.
2.21. Obligations Absolute. The payment obligations of the Borrower
and of the Revolving Credit Lenders under Section 2.20 shall be unconditional
and irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including, without limitation, the following
circumstances:
(a) any lack of validity or enforceability of this Agreement, any
Letter of Credit or any other Loan Document;
(b) the existence of any claim, set-off, defense or other right
which the Borrower or any other Person may have at any time against any
beneficiary or transferee of any Letter of Credit (or any Persons for whom
any such beneficiary or transferee may be acting), the Issuing Bank, any
Lender, or any other Person, whether in connection with this Agreement,
the transactions contemplated hereby or any unrelated transaction;
(c) any draft, certificate, statement or other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
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(d) payment by the Issuing Bank under any Letter of Credit against
presentation of a draft or certificate which does not comply with the
terms of such Letter of Credit, or payment by the Issuing Bank under the
Letter of Credit in any other circumstances in which conditions to payment
are not met, except any such wrongful payment resulting solely from the
gross negligence or willful misconduct of the Issuing Bank; or
(e) any other event, condition or circumstance whatever, whether or
not similar to any of the foregoing.
The Borrower bears the risk of, and neither the Issuing Bank, any of its
directors, officers, employees or agents, nor any Lender, shall be liable or
responsible for any of, the foregoing matters, the use which may be made of any
Letter of Credit, or acts or omissions of the beneficiary or any transferee in
connection therewith, except for such person's gross negligence or willful
misconduct.
2.22. Additional Compensation in Certain Circumstances. Without
limitation of any provision of Section 2.13(a) hereof, the Issuing Bank and each
Revolving Credit Lender shall be entitled to the benefit of Section 2.13(a)
hereof, and the Borrower shall pay additional compensation to the Issuing Bank
and each Revolving Credit Lender in accordance with such Section 2.13(a), in
respect of this Agreement, the Letters of Credit and Letter of Credit
Participating Interests, to the same extent and in the same manner as if the
word "Lender," in each place in which it occurs in such Section 2.13(a), were
replaced with "Lender or Issuing Bank," and the word "Loan," in each place in
which it occurs in such Section 2.13(a), were replaced with "Loan, Letter of
Credit or Letter of Credit Participating Interest."
2.23. Further Assurances. The Borrower hereby agrees, from time to
time, to do and perform any and all acts and to execute any and all further
instruments reasonably requested by the Issuing Bank more fully to effect the
purposes of this Agreement and the issuance of the Letters of Credit hereunder.
2.24. Letter of Credit Applications. The representations, warranties
and covenants by the Borrower under, and the rights and remedies of the Issuing
Bank under, the Letter of Credit Agreement and any Letter of Credit Application
relating to any Letter of Credit are in addition to, and not in limitation or
derogation of, representations, warranties and covenants by the Borrower under,
and rights and remedies of the Issuing Bank and the Lenders under, this
Agreement, the Loan Documents, and applicable Law. The Borrower acknowledges and
agrees that all rights of the Issuing Bank under any Letter of Credit
Application shall inure to the benefit of each Revolving Credit Lender to the
extent of its Revolving Credit Commitment Percentage as fully as if such Lender
was a party to such Letter of Credit Application. In the event of any
inconsistency between the terms of this Agreement and any Letter of Credit
Application, this Agreement shall prevail.
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2.25. Cash Collateral for Letters of Credit.
(a) Cash Collateral for Letter of Credit Exposure in Certain
Circumstances. To the extent that this Agreement or any other Loan Document
requires a payment or prepayment to be made with respect to the Revolving Credit
Loans, such provision shall be construed as follows: after payment in full of
the outstanding Revolving Credit Loans, then, to the extent of the excess, if
any, of the aggregate Letter of Credit Exposure at such time over the balance in
the Letter of Credit Collateral Account, an amount equal to the remainder of the
amount so required to be paid by the Borrower shall immediately be paid by the
Borrower to the Agent for deposit in the Letter of Credit Collateral Account. In
addition, the Borrower agrees that, without limitation of the foregoing or of
any other provisions of this Agreement or the Loan Documents requiring
collateral for the Letters of Credit or other Obligations in whole or in part,
and without limitation of other rights and remedies under this Agreement or any
Loan Document or at law or in equity, if all of the Loans become due and payable
pursuant to Section 7.02 hereof, the Borrower shall immediately pay to the
Agent, for deposit in the Letter of Credit Collateral Account, an amount equal
to the excess, if any, of the aggregate Letter of Credit Exposure at such time
over the balance in the Letter of Credit Collateral Account.
(b) Letter of Credit Collateral Account. The Agent shall maintain in
its own name at its Office a deposit account (the "Letter of Credit Collateral
Account"), which shall bear interest (added to the deposit balance) in
accordance with the Agent's ordinary practices for deposit accounts of like size
and nature, over which the Agent shall have sole dominion and control, and the
Borrower shall have no right to withdraw any funds deposited therein. The Agent
shall deposit into the Letter of Credit Collateral Account such funds as are
required to be paid therein by Section 2.25(a). As security for the payment of
all Obligations, the Borrower hereby grants, conveys, assigns, pledges,
transfers to the Agent, and creates in the Agent's favor a continuing Lien on
and security interest in, the Letter of Credit Collateral Account, all amounts
from time to time on deposit therein, all proceeds of the conversion, voluntary
or involuntary, thereof into cash, instruments, securities or other property,
and all other proceeds thereof. The Borrower hereby represents, warrants,
covenants and agrees that such Lien shall at all times be valid and perfected,
prior to all other Liens, and the Borrower shall take or cause to be taken such
actions and execute and deliver such instruments and documents as may be
necessary or, in the Agent's judgment, desirable to perfect or protect such
Lien. The Borrower shall not create or suffer to exist any Lien on any amounts
or investment held in the Letter of Credit Collateral Account other than the
Lien in favor of the Agent granted under this Section.
(c) Application of Funds. The Agent shall apply funds in the Letter
of Credit Collateral Account: (i) on account of Letter of Credit Reimbursement
Obligations as and when the same become due and payable if and to the extent
that the Borrower fails directly to pay the same, and (ii) if no Letter of
Credit Reimbursement Obligations are due and payable, no Letters of Credit are
outstanding and the balance of the Letter of Credit Collateral Account exceeds
the aggregate Letter of Credit Exposure, the excess shall be applied on account
of the other Obligations secured hereby (it being understood that, if no Event
of Default or Potential Default has occurred or is continuing, the Borrower may
direct that such application be delayed for such time as is necessary to avoid
the requirement of a payment under Section 2.13(b)). If all Obligations (other
than Obligations constituting contingent obligations under indemnification
provisions which survive indefinitely, so long as no unsatisfied claim has been
made under any such indemnification provision) have been indefeasibly paid in
full in cash, all Commitments have terminated and all Letters of Credit have
expired, the Agent shall release to the Borrower all remaining funds in the
Letter of Credit Collateral Account.
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2.26. Certain Provisions Relating to the Issuing Bank.
(a) General. The Issuing Bank shall have no duties or
responsibilities except those expressly set forth in this Agreement and the
other Loan Documents, and no implied duties or responsibilities on the part of
the Issuing Bank shall be read into this Agreement or any Loan Document or shall
otherwise exist. The duties and responsibilities of the Issuing Bank to the
other Lender Parties under this Agreement and the other Loan Documents shall be
mechanical and administrative in nature, and the Issuing Bank shall not have a
fiduciary relationship in respect of any Lender Party or any other Person. The
Issuing Bank shall not be liable for any action taken or omitted to be taken by
it under or in connection with this Agreement or any other Loan Document, unless
caused by its own gross negligence or willful misconduct. The Issuing Bank shall
not be under any obligation to ascertain, inquire or give any notice relating to
(i) the performance or observance of any of the terms or conditions of this
Agreement or any other Loan Document on the part of the Borrower, (ii) the
business, operations, condition (financial or otherwise) or prospects of the
Borrower or any other Person, or (iii) the existence of any Event of Default or
Potential Default. The Issuing Bank shall not be under any obligation, either
initially or on a continuing basis, to provide the Agent or any Lender with any
notices, reports or information of any nature, whether in its possession
presently or hereafter, except for such notices, reports and other information
expressly required by this Agreement to be so furnished.
(b) Administration. The Issuing Bank may rely upon any notice or
other communication of any nature (written or oral, including but not limited to
telephone conversations, whether or not such notice or other communication is
made in a manner permitted or required by this Agreement or any Loan Document)
purportedly made by or on behalf of the proper party or parties, and the Issuing
Bank shall not have any duty to verify the identity or authority of any Person
giving such notice or other communication. The Issuing Bank may consult with
legal counsel (including, without limitation, in-house counsel for the Issuing
Bank or in-house or other counsel for the Borrower), independent public
accountants and any other experts selected by it from time to time, and the
Issuing Bank shall not be liable for any action taken or omitted to be taken in
good faith in accordance with the advice of such counsel, accountants or
experts. Whenever the Issuing Bank shall deem it necessary or desirable that a
matter be proved or established with respect to the Borrower or Lender Party,
such matter may be established by a certificate of the Borrower or Lender Party,
as the case may be, and the Issuing Bank may conclusively rely upon such
certificate.
(c) Indemnification of Issuing Bank by Lenders. Each Revolving
Credit Lender hereby agrees to reimburse and indemnify the Issuing Bank and each
of their respective directors, officers, employees and agents (to the extent not
reimbursed by the Borrower and without limitation of the obligations of the
Borrower to do so), Pro Rata, from and against any and all amounts, losses,
liabilities, claims, damages, expenses, obligations, penalties, actions,
judgments, suits, costs or disbursements of any kind or nature (including,
without limitation, the fees and disbursements of counsel (other than in-house
counsel) for the Issuing Bank or such other Person in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not the Issuing Bank or such other Person shall be designated a party
thereto) that may at any time be imposed on, incurred by or asserted against the
Issuing Bank, in its capacity as such, or such other Person, as a result of, or
arising out of, or in any way related to or by reason of, this Agreement, any
other Loan Document, any transaction from time to time contemplated hereby or
thereby, or any transaction financed in whole or in part or directly or
indirectly with the proceeds of any Letter of Credit, provided, that no
Revolving Credit Lender shall be liable for any portion of such amounts, losses,
liabilities, claims, damages, expenses, obligations, penalties, actions,
judgments, suits, costs or disbursements resulting from the gross negligence or
willful misconduct of the Issuing Bank or such other Person, as finally
determined by a court of competent jurisdiction.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents and warrants to each Lender Party as
follows:
3.01. Corporate Status. Each Loan Party is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation. Each Loan Party has corporate power and authority
to own its property and to transact the business in which it is engaged or
presently proposes to engage. Each Loan Party is duly qualified to do business
as a foreign corporation and is in good standing in all jurisdictions in which
the ownership of its properties or the nature of its activities or both makes
such qualification necessary or advisable except where the failure to so qualify
could not have a Material Adverse Effect.
3.02. Corporate Power and Authorization. Each Loan Party has
corporate power and authority to execute, deliver, perform, and take all actions
contemplated by, each Loan Document to which it is a party, and all such action
has been duly and validly authorized by all necessary corporate proceedings on
its part. Without limitation of the foregoing, the Borrower has the corporate
power and authority to borrow and request Letters of Credit to be issued
pursuant to the Loan Documents to the fullest extent permitted hereby and
thereby from time to time, and has taken all necessary corporate action to
authorize such borrowings and requests.
3.03. Execution and Binding Effect. This Agreement and each other
Loan Document to which any Loan Party is a party and which is required to be
delivered on or before the Closing Date pursuant to Section 4.01 hereof has been
duly and validly executed and delivered by such Loan Party. This Agreement
constitutes, and each other Loan Document when executed and delivered by each
Loan Party which is a party thereto will constitute, the legal, valid and
binding obligation of the Borrower or such Loan Party, as the case may be,
enforceable in accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency or other similar laws of general
application affecting the enforcement of creditors' rights or by general
principles of equity limiting the availability of equitable remedies.
3.04. Governmental Approvals and Filings. No approval, order,
consent, authorization, certificate, license, permit or validation of, or
exemption or other action by, or filing, recording or registration with, or
notice to, any Governmental Authority (collectively, "Governmental Action") is
or will be necessary in connection with execution and delivery of any Loan
Document by any Loan Party, consummation by any Loan Party of the transactions
herein or therein contemplated, performance of or compliance with the terms and
conditions hereof or thereof by any Loan Party, except for (i) Required Project
Permits, (ii) recordings and filings necessary to perfect the Liens granted by
the Security Documents and (iii) matters set forth in Schedule 3.04 hereof. Each
Governmental Action referred to in such Schedule 3.04 has been duly obtained or
made, as the case may be, and is in full force and effect, and there is no
action, suit, proceeding or investigation pending or, to the Borrower's
knowledge, threatened which seeks or has a reasonable possibility of resulting
in the reversal, rescission, termination, modification or suspension of any such
Governmental Action. No Governmental Action referred to in such Schedule 3.04
requires any further act to be performed or condition to be satisfied by any
Person as a condition to continued effectiveness thereof, except as set forth in
such Schedule 3.04. With respect to each of the matters set forth in Schedule
3.04, no Loan Party made any application to any Governmental Authority in
connection therewith which application, when taken together with all amendments,
supplements and modifications thereto, contained any untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements contained therein not misleading.
3.05. Absence of Conflicts. Neither the execution and delivery of
any Loan Document by any Loan Party, nor consummation by any Loan Party of the
transactions herein or therein contemplated, nor performance of or compliance
with the terms and conditions hereof or thereof by any Loan Party does or will
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(a) violate or conflict with any Requirement of Law, or
(b) violate, conflict with or result in a breach of any term or
condition of, or constitute a default under, or result in (or give rise to
any right, contingent or otherwise, of any Person to cause) any
termination, cancellation, prepayment or acceleration of performance of,
or result in the creation or imposition of (or give rise to any
obligation, contingent or otherwise, to create or impose) any Lien upon
any of the property of any Loan Party (except for any Lien in favor of the
Agent for the benefit of the Lenders and the Agent securing the
Obligations) pursuant to, or otherwise result in (or give rise to any
right, contingent or otherwise, of any Person to cause) any change in any
right, power, privilege, duty or obligation of any Loan Party under or in
connection with,
(i) the certificate or articles of incorporation or by-laws
(or other constituent documents) of any Loan Party,
(ii) any Contractual Obligations creating, evidencing or
securing any Indebtedness or Guaranty Equivalent to which any Loan
Party is a party or by which it or any of its properties (now owned
or hereafter acquired) may be subject or bound, or
(iii) any other Contractual Obligations of any Loan Party,
except (in the case of each of (a) and (b) above) for matters as to which a
consent, waiver, amendment or agreement which has been duly obtained and is in
full force and effect (all of which matters are set forth on Schedule 3.05
hereof), and the Agent and each Lender has received a true, correct and complete
copy of each such consent, waiver, amendment or agreement and of each of the
underlying agreements or instruments to which it relates and except for matters
which, individually or in the aggregate, could not have a Material Adverse
Effect.
3.06. Projections. The Borrower has furnished to the Agent and each
Lender projections prepared by the Borrower demonstrating the projected
financial condition and results of operations of the Borrower after giving
effect to Completion of construction of the Project, for the period commencing
on January 1, 1997 and ending on December 31, 2002, which projections are
accompanied by a written statement of the assumptions and estimates underlying
such projections. Such projections were prepared on the basis of such
assumptions and estimates. Such projections, assumptions and estimates, as of
the date of preparation thereof and as of the date hereof, are reasonable, are
made in good faith, represent the Borrower's best judgment as to such matters on
the date thereof and do not contain assumptions or methods of calculation which
are inconsistent with the requirements of the Loan Documents. Nothing contained
in this Section shall constitute a representation or warranty that such future
financial performance or results of operations will in fact be achieved.
3.07. Labor Matters. No Loan Party is a party to any collective
bargaining agreements with respect to any of its employees.
3.08. Absence of Undisclosed Liabilities. Except as disclosed in
writing to the Lenders, no Loan Party has any liability or obligation of any
nature whatever (whether absolute, accrued, contingent or otherwise, whether or
not due), forward or long-term commitments or unrealized or anticipated losses
from unfavorable commitments, except matters that, individually or in the
aggregate, could not have a Material Adverse Effect.
3.09. Accurate and Complete Disclosure. All information provided (in
writing) by or on behalf of any Loan Party to the Agent or any Lender (or to the
Persons listed on Schedule 3.09 hereto) pursuant to or in connection with any
Loan Document or any transaction contemplated hereby or thereby (excluding,
however, for purposes of this Section 3.09, the projections described in Section
3.06 hereof and the Project Budget) is true and accurate in all material
respects on the date as of which such
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information is dated (or, if not dated, when received by the Agent or such
Lender, as the case may be) and such information, taken as a whole, which was
provided on or prior to the time this representation is made or remade, does not
omit to state any material fact necessary to make such information not
misleading at such time in light of the circumstances in which it was provided.
3.10. Commitments. Except for the Utility Loan and the commitments
as set forth on Schedule 3.10 hereto or as permitted by Section 6.03 hereof, no
Loan Party has received any commitments for financing other than the Revolving
Credit Commitments and the Term Loan Commitments.
3.11. Solvency. On the date hereof and on and as of the Closing
Date, after consummation of the transactions contemplated herein and after
giving effect to all Loans and other obligations and liabilities being incurred
on such date in connection therewith, and on the date of each subsequent Loan or
other extension of credit hereunder and after giving effect to application of
the proceeds thereof in accordance with the terms of the Loan Documents, the
Borrower and each other Loan Party is and will be Solvent.
3.12. Margin Regulations. No part of the proceeds of any Loan
hereunder will be used for the purpose of buying or carrying any "margin stock,"
as such term is used in Regulations G and U of the Board of Governors of the
Federal Reserve System, as amended from time to time, or to extend credit to
others for the purpose of buying or carrying any "margin stock". No Loan Party
is engaged in the business of extending credit to others for the purpose of
buying or carrying "margin stock". No Loan Party owns any "margin stock".
Neither the making of any Loan nor any use of proceeds of any such Loan will
violate or conflict with the provisions of Regulation G, T, U or X of the Board
of Governors of the Federal Reserve System, as amended from time to time.
3.13. Subsidiaries. Except as otherwise expressly and specifically
permitted by this Agreement, the Borrower has no Subsidiaries.
3.14. Partnerships, etc. Except as otherwise specifically permitted
by this Agreement, no Loan Party is a partner (general or limited) of any
partnership, is a party to any joint venture or is an owner (beneficially or of
record) of any equity or similar interest in any Person (including but not
limited to any interest pursuant to which the Borrower has or may in any
circumstance have an obligation to make capital contributions to, or be
generally liable for or on account of the liabilities, acts or omissions of such
other Person).
3.15. Ownership and Control. Schedule 3.15 hereof states as of the
date hereof the authorized capitalization of each Loan Party, the number of
shares of each class of capital stock issued and outstanding of each Loan Party
and the number and percentage of outstanding shares of each such class of
capital stock and the names of the record owners of such shares and, to the
Borrower's knowledge, the beneficial owners of such shares. The outstanding
shares of capital stock of each Loan Party have been duly authorized and validly
issued and are, except as designated on Schedule 3.15 hereof, fully paid and
nonassessable. There are no options, warrants, calls, subscriptions, conversion
rights, exchange rights, preemptive rights or other rights, agreements or
arrangements (contingent or otherwise) which may in any circumstances now or
hereafter obligate any Loan Party to issue any shares of its capital stock or
any other securities, except for matters set forth in Schedule 3.15 hereof and
except for matters which are permitted by the terms hereof and notice of which
is provided by the Borrower to the Agent. Schedule 3.15 hereof describes as of
the date hereof all options, rights, purchase agreements, buy-sell agreements,
restrictions on transfer, pledges, proxies, voting trusts, powers of attorney,
voting agreements and other agreements, instruments or arrangements to which any
Loan Party is a party or is subject or bound, or to which any record or
beneficial owner of capital stock of any Loan Party is a party or is subject or
bound, which pertain to any shares of capital stock (now or hereafter
outstanding) of any Loan Party, including any matter which may affect beneficial
or record ownership thereof or transferability thereof or voting rights with
respect thereto.
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3.16. Litigation. Except as set forth in Schedule 3.16 hereof, there
is no pending or, to the Borrower's knowledge, threatened action, suit, claim,
proceeding or investigation by or before any Governmental Authority against or
affecting any Loan Party which could, if adversely determined, have a Material
Adverse Effect.
3.17. Absence of Events of Default. No event has occurred and is
continuing and no condition exists which constitutes an Event of Default or
Potential Default.
3.18. Absence of Other Conflicts. None of the Loan Parties is in
violation of or conflict with, or is subject to any contingent liability on
account of any violation of or conflict with:
(a) any Requirement of Law,
(b) its certificate or articles of incorporation or by-laws (or
other constituent documents), or
(c) any Contractual Obligations to which it is party, which
violation or conflict could have a Material Adverse Effect.
3.19. Insurance. Each Loan Party maintains with financially sound
and reputable insurers the insurance required by Section 5.02 hereof.
3.20. Title to Property. Each Loan Party has good and marketable
title in fee simple to all real property owned or purported to be owned by it
and good title to all other property of whatever nature owned or purported to be
owned by it, in each case free and clear of all Liens, other than Permitted
Liens.
3.21. Intellectual and Other Property. Each Loan Party owns, or is
licensed or otherwise has the right to use, all the patents, trademarks, service
marks, names (trade, service, fictitious or otherwise), copyrights, technology
(including but not limited to all equipment comprising part of the Project and
computer programs and software), processes, data bases and other rights, free
from burdensome restrictions, necessary to own and operate its properties and to
carry on its business as presently conducted and presently planned to be
conducted without conflict with the rights of others in any material respect.
3.22. Taxes. All tax and information returns required to be filed by
or on behalf of each Loan Party have been properly prepared, executed and filed,
except when the failure to do so could not have a Material Adverse Effect. All
taxes, assessments, fees and other governmental charges upon any Loan Party or
upon any of its properties, incomes, sales or franchises which are due and
payable have been paid other than those not yet delinquent and payable without
premium or penalty, and except for those being diligently contested in good
faith by appropriate proceedings, and in each case adequate reserves and
provisions for taxes have been made on the books of such Loan Party. The
reserves and provisions for taxes on the books of each Loan Party are adequate
for all open years and for its current fiscal period. The Borrower does not know
of any proposed additional assessment or basis for any material assessment for
additional taxes against any Loan Party (whether or not reserved against)
except, with respect to times after the Project Acceptance Date, assessments or
basis therefor which could not have a Material Adverse Effect.
3.23. Employee Benefits. Schedule 3.23 hereof sets forth as of the
date hereof a list of all Plans and Multiemployer Plans, and all information
available to the Borrower with respect to the direct, indirect or potential
withdrawal liability to any Multiemployer Plan of any Loan Party or any
Controlled Group Member. On the Closing Date, except as set forth in Schedule
3.23 hereof, no Loan Party has any liability (contingent or otherwise) for or in
connection with, and none of their respective properties is subject to a Lien in
connection with, any Pension-Related Event.
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3.24. Environmental Matters.
(a) Each Loan Party, and to the Borrower's knowledge each of its
Environmental Affiliates, is and has been in compliance with all applicable
Environmental Laws, except where the failure to so comply, individually or in
the aggregate, could not have a Material Adverse Effect. There are no
circumstances that may prevent or interfere with such compliance by any Loan
Party in the future.
(b) All Environmental Approvals necessary for the ownership and
operation of any Loan Party's properties, facilities and businesses as presently
owned and operated and as presently proposed to be owned and operated are
Required Project Permits.
(c) There is no Environmental Claim pending or, to the Borrower's
knowledge, threatened, and there are no past or present acts, omissions, events
or circumstances (including but not limited to any dumping, leaching,
deposition, removal, abandonment, escape, emission, discharge or release of any
Environmental Concern Material at, on or under any facility or property now or
previously owned, operated or leased by any Loan Party or, to Borrower's
knowledge, any of its Environmental Affiliates) that could form the basis of any
Environmental Claim, against any Loan Party or any of its Environmental
Affiliates, except matters which, individually or in the aggregate, could not
have a Material Adverse Effect.
(d) No facility or property now or previously owned, operated or
leased by any Loan Party is an Environmental Cleanup Site. Neither any Loan
Party nor, to Borrower's knowledge, any of its Environmental Affiliates has
directly transported or directly arranged for the transportation of any material
quantities of Environmental Concern Materials to any Environmental Cleanup Site,
except matters which, individually or in the aggregate, could not have a
Material Adverse Effect. No Lien exists, and no condition exists which could
result in the filing of a Lien, against any property of any Loan Party or any of
its Environmental Affiliates, under any Environmental Law.
3.25. Utility Loan. The documents evidencing and securing the
Utility Loan will be set forth on a list to be furnished to the Lenders prior to
the Closing Date, and the Borrower shall furnish to the Lenders prior to the
Closing Date true, correct and complete copies thereof.
3.26. Project Compliance With Laws; Permits. The construction of the
Project as contemplated by the Specifications and the intended use of the
Project comply with all applicable Laws (including Environmental Laws and Laws
relating to zoning), restrictive covenants and applicable Required Project
Permits. All Required Project Permits are listed in Schedule 3.26 hereto. All
Required Project Permits (except those Required Project Permits which are
designated on Schedule 3.26 hereto as being receivable after the date hereof,
which permits are not necessary until a later stage of, or completion of,
construction of the Project, as designated on such Schedule) have been duly
obtained, have not been modified and, to the extent still necessary, are in full
force and effect (with all appeal periods having expired except as set forth on
Schedule 3.26), and there is no action, suit, proceeding, investigation, claim,
complaint or demand pending or, to the Borrower's knowledge, threatened with
respect thereto or which seeks or may result in (a) the reversal, rescission,
termination or suspension of any Required Project Permit or (b) any modification
of any Required Project Permit. In obtaining each Required Project Permit, no
Loan Party made any application to any Governmental Authority in connection
therewith which application, when taken together with all amendments,
supplements and modifications thereto, contained any untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements contained therein not misleading. As to any Required Project Permits
that have not yet been obtained, (a) such Required Project Permits are not
discretionary in nature and are expected to be obtainable prior to the time they
are needed to maintain without material delay the process of construction of the
Project in order to achieve the Preliminary Acceptance Date on or before June
30, 1999 and to maintain without material disruption operation of the Project
thereafter, (b) the Borrower is not aware of any facts or circumstances which
could reasonably be expected to preclude the Borrower from obtaining such
Required Project Permits on a timely basis and (c) no
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unusual or materially burdensome conditions are expected to be placed upon the
issuance of, or required by, such Required Project Permits.
3.27. Sufficiency of Project Agreements. The copies of the Project
Agreements provided to the Agent are true, correct and complete. To the best
knowledge of the Borrower after due inquiry, except as described on Schedule
3.27 hereof, the services to be performed for, and the materials and equipment
to be supplied to and the easements and other rights granted to, the Borrower
pursuant to Project Agreements in effect on the date hereof (a) comprise all of
the property and property interests necessary to construct, install, equip, own,
operate and maintain the Project in accordance with all applicable Laws,
Required Project Permits and restrictive covenants and as contemplated by the
Project Agreements, (b) are sufficient to enable the Project to be located,
constructed and operated on the Project Site, (c) provide adequate ingress and
egress from the Project Site for any reasonable purpose in connection with the
construction and operation of the Project and (d) can reasonably be expected to
enable the Borrower to operate the Project at the capacity and efficiency
contemplated by this Agreement and to achieve Preliminary Acceptance and Final
Acceptance; all without reference to any proprietary information not owned by
the Borrower or which the Borrower does not have the legal right to use. The
Borrower has not entered into and, without the prior written consent of the
Required Lenders, will not enter into any other contract or agreement for or
relating to the design, planning or construction of the Project; provided,
however, that Borrower may without the consent of the Required Lenders enter
into such a contract if (a) the contract is the standard form of contract in the
form attached hereto as Exhibit K and (b) the amount of the contract is less
than $1,000,000 or if greater than $1,000,000 has been assigned to the Agent for
the benefit of the Lenders pursuant to an Assignment of Contracts in the form
set forth in Exhibit M hereto and the Agent has been provided with a Consent to
Assignment of Contracts with respect thereto in the form of Exhibit N hereto.
3.28. Subdivision; Separate Assessment. Except as set forth on
Schedule 3.28, from and after the date hereof, the Project Site will be a single
parcel under the applicable Laws regulating subdivision and land development,
will be separately assessed for ad valorem real property taxes, and may be
leased, transferred and/or developed by constructing the Project thereon without
the approval of any Governmental Authority having the jurisdiction to regulate
or control subdivision or land development.
3.29. Utility Services. Except as set forth on Schedule 3.29, from
and after the date hereof, all utility services necessary for the construction
of the Project and the operation and maintenance thereof will be available at
the boundaries of the Project Site, directly from a public way or by easements
that are not subject to any Lien, including water supply (including process
water) and sanitary and storm sewer facilities and gas, electric and telephone
facilities, and the costs of construction for installing the same are included
in the Project Budget.
3.30 Potential Conflicts of Interest. As of the date hereof, except
as set forth on Schedule 3.30, to the best knowledge of the Borrower, without
independent investigation, no Affiliate of the Borrower: (a) owns, directly or
indirectly, any interest in (excepting less than 5% stock holdings for
investment purposes in securities of publicly held and traded companies), or is
an officer, director, employee or consultant of, any Person which is, or is
engaged in business as, a competitor, lessor, lessee, supplier, distributor,
sales agent or customer of, or lender to, or borrower from, the Borrower; (b)
owns, directly or indirectly, in whole or in part, any tangible or intangible
property that the Borrower or any of its Subsidiaries uses in the conduct of
business; or (c) has any cause of action or other claim whatsoever against, or
owes any amount to, the Borrower, except for claims in the ordinary course of
business.
3.31. Flood Area; Filled Land. The Project Site is not in an "area
of special flood hazard", as that term is defined in the National Flood
Insurance Act of 1968 (as amended and supplemented by the Flood Disaster
Protection Act of 1973, as amended). No portion of the Project Site consists of
and no portion of the improvements will be located on filled in land.
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3.32. Survey and Other Documents. The survey of the Land furnished
to the Agent pursuant to Section 4.01(c) accurately depicts the state of facts
it purports to depict and each other document furnished to the Agent pursuant to
Section 4.01 and Section 4.02 is a true and correct copy thereof, has not been
modified or amended and is in full force and effect on the date hereof.
ARTICLE IV
CONDITIONS OF LENDING
4.01. Conditions to Initial Loans and Letters of Credit. The
obligation of each Lender Party to make Loans or issue Letters of Credit is
subject to the satisfaction, on or before the Closing Date, of the following
conditions precedent, in addition to the conditions precedent set forth in
Sections 4.02 and 4.03 hereof:
(a) Agreement; Notes; Fees. The Agent shall have received an
executed counterpart of this Agreement for each Lender, duly executed by
the Borrower, and executed Revolving Credit Notes and Term Loan Notes
conforming to the requirements hereof and all of the other Loan Documents,
duly executed on behalf of the Borrower, and each Lender, within two
Business Days after the date hereof, shall have received the fees set
forth in a letter from the Borrower to such Lender dated on or about the
date hereof.
(b) Certain Security Documents Pertaining to Personal Property. The
Agent shall have received the following, with a copy for each Lender
(except for instruments pledged pursuant to the Security Documents):
(i) Executed copies of each of the following:
(A) A Security Agreement, duly executed on behalf of the
Borrower, in substantially the form of Exhibit G hereto (as
amended, modified or supplemented from time to time, the
"Security Agreement").
(B) Assignment of Contracts, in substantially the form
of Exhibit M hereto ("Assignment of Contracts"), with respect
to the contracts listed on Schedule 4.01(b) hereto.
(C) Consents to Assignment of Contracts, in
substantially the form of Exhibit N hereto ("Consents to
Assignment of Contracts"), with respect to the contracts
listed on Schedule 4.01(b) hereto.
(ii) Evidence of the completion of all recordings and filings
of or with respect to, and of all other actions with respect to, the
above Security Documents as may be necessary or, in the opinion of
the Agent, desirable to create or perfect the Liens created or
purported to be created by such Security Documents as valid,
continuing and perfected Liens in favor of the Agent for the benefit
of the Agent and the Lenders securing the Obligations, prior to all
other Liens; and evidence of the payment of any necessary fee, tax
or expense relating to such recording or filing. Without limitation
of the foregoing, the Agent shall receive:
(A) Acknowledgment copies of proper financing statements
duly filed under the Uniform Commercial Code in all
jurisdictions as may be necessary or, in the opinion of the
Agent, desirable to create or perfect such Liens in favor of
the Agent);
(B) Evidence of filings of assignments in form and
substance satisfactory to Agent with the United States Patent
and Trademark Office with
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respect to each patent assignment and security agreement and
each trademark security agreement; and
(iii) Evidence of the insurance required by the terms of this
Agreement, containing the endorsements required by this Agreement.
(iv) Evidence that all other actions necessary or, in the
opinion of the Agent, desirable to create, perfect or protect the
Liens created or purported to be created by the above Security
Documents have been taken.
(v) A search dated not more than twenty days prior to the
Closing Date of UCC, real property, tax, judgment and litigation
dockets and records and other appropriate registers shall have
revealed no filings or recordings in effect with respect to the
Collateral purported to be covered by the above Security Documents,
except such as are acceptable to the Agent and each Lender (it being
understood that such acceptance does not limit the obligations of
any Loan Party with respect to the priority of the Liens in favor of
the Agent), and the Agent shall have received a copy of the search
reports received as a result of the search and of the acknowledgment
copies of the financing statements or other instruments required to
be filed or recorded pursuant to this subsection bearing evidence of
the recording of such statements or instruments at each of such
filing or recording places.
(c) Certain Security Documents Pertaining to Real Property. The
Agent shall have received the following, each of which shall be in form
and substance satisfactory to the Agent, with a copy for each Lender:
(i) Executed copies of a Mortgage, duly executed on behalf of
the Borrower, in substantially the form of Exhibit J hereto (as
amended, modified or supplemented from time to time, the
"Mortgage").
(ii) Evidence of the completion of all recordings and filings
of or with respect to, and of all other actions with respect to, the
above Security Documents as may be necessary or, in the opinion of
the Agent or any Lender, desirable or required to create or perfect
the Liens created or purported to be created by such Security
Documents as valid, continuing and perfected Liens in favor of the
Agent for the benefit of the Agent and the Lenders securing the
Obligations, prior to all other Liens; and evidence of the payment
of any necessary fee, tax or expense relating to such recording or
filing.
(iii) With respect to such Security Documents, the Agent shall
have received in respect of each property or estate constituting
Collateral thereunder one or more mortgagee's title insurance
policies (or marked up unconditional binders or commitments for such
insurance) dated the Recording Date. Each such policy shall: (A) be
in an amount not unsatisfactory to the Lenders; (B) be issued at
ordinary rates; (C) insure that each Security Document insured
thereby creates a valid first priority Lien on such property or
estate of the mortgagor, free and clear of all Liens, defects and
other exceptions to title, except such as are listed on the title
commitment attached hereto as Exhibit DD or as may be approved by
the Lenders; (D) name the Agent for the benefit of the Lenders and
the Agent as the insured thereunder; (E) be in the form of ALTA Loan
Policy -- 1970 (or other form reasonably acceptable to the Agent);
(F) contain such endorsements and affirmative coverage as the
Lenders may reasonably request, including without limitation a
revolving credit endorsement, comprehensive lender's endorsement,
access endorsement and affirmative coverage with respect to
mechanics' and materialmen's liens; (G) be issued by Lawyers Title
Insurance Company (or another nationally recognized title insurance
company reasonably satisfactory to Agent); and (H)
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be accompanied by such coinsurance and reinsurance and direct access
agreements as the Lenders may reasonably require. The Agent shall
have received a copy of all of the recorded documents referred to,
or listed as exceptions to title in, such policy or policies or
binders or commitments and a copy of all other documents requested
by the Agent or any Lender affecting the property covered by each
such Security Document. The Agent and such title insurers shall have
received such affidavits from the mortgagor as they may reasonably
require.
(iv) With respect to such Security Documents, the Agent and
the title insurance company issuing any applicable title insurance
policy or binder or commitment referred to in clause (iii) above
shall have received a survey of the site of each property or estate
covered by each Security Document, certified to the Agent and such
title insurance company in a manner satisfactory to the Agent, each
Lender and such title insurance company, dated a date satisfactory
to each of them by an independent professional licensed land
surveyor satisfactory to each of them. Such survey shall include
such matters as the Agent, any Lender or such title insurance
company may request.
(v) With respect to Collateral referred to in such Security
Documents, certified copies of all leases (as lessor or as lessee),
if any, pertaining to any part of such Collateral.
(vi) Such Governmental Actions and other agreements, estoppel
letters, consents from such Governmental Authorities and other
Persons in respect of the above Security Documents, and the property
subject thereto, as may be reasonably requested by the Agent or any
Lender.
(vii) Evidence of the insurance required by the terms of the
above Security Documents, containing the endorsements required by
such Security Documents and this Agreement.
(viii) A release of lien covering the Project Site and any
security interest in the stock of IDI from or on behalf of all
lenders to SDI for whose benefit a mortgage encumbers the Project
Site and such consents and subordinations as may be required by the
Agent in connection with all easements that benefit the Project Site
and that cross the lands owned by SDI.
(ix) Evidence that all other action necessary or, in the
reasonable opinion of the Agent, desirable to create, perfect and
protect the Liens created or purported to be created by the above
Security Documents have been taken.
(d) Capitalization, etc. The corporate and capital structure of each
Loan Party, the certificate or articles of incorporation and by-laws (or
other constituent documents) of each of them, and the terms, conditions,
amounts and holders of all equity, debt and other indebtedness,
obligations and liabilities of each of them, shall be not unsatisfactory
to the Lenders.
(e) Governmental Approvals and Filings. The Agent shall have
received, with copies and executed counterparts for each Lender, true and
correct copies (in each case certified as to authenticity on such date on
behalf of the Borrower) of all items referred to in Schedule 3.04 and
Schedule 3.26 hereof which are designated on such Schedule to be
receivable on or prior to the Closing Date and such items shall be
satisfactory in form and substance to the Agent and shall be in full force
and effect.
(f) Other Conflicts. The Agent shall have received, with copies and
executed
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counterparts for each Lender, true and correct copies (in each case
certified as to authenticity on such date on behalf of the Borrower) of
all items referred to in Schedule 3.05 hereof (if any) and such items
shall be satisfactory in form and substance to the Agent and each Lender
and shall be in full force and effect.
(g) Corporate Proceedings. The Agent shall have received, with a
counterpart for each Lender, certificates by the Secretary of each Loan
Party dated as of the Closing Date as to (i) true copies of the
certificate or articles of incorporation and by-laws (or other constituent
documents) of such Loan Party in effect on such date (which, in the case
of the certificate or articles of incorporation or other constituent
documents filed or required to be filed with the Secretary of State or
other Governmental Authority in its jurisdiction of incorporation, shall
be certified to be true, correct and complete by such Secretary of State
or other Governmental Authority not more than 30 days before the Closing
Date), (ii) true copies of all corporate action taken by such Loan Party
relative to this Agreement and the other Loan Documents and (iii) the
incumbency and signature of the respective officers of such Loan Party
executing this Agreement and the other Loan Documents, together with
satisfactory evidence of the incumbency of such Secretary or Assistant
Secretary. The Agent shall have received, with a copy for each Lender,
certificates from the appropriate Secretaries of State or other applicable
Governmental Authorities dated not more than 30 days before the Closing
Date showing the good standing of each Loan Party in its state of
incorporation and each state in which it does business.
(h) Insurance. The Agent shall have received a report from Xxxxx &
McLennan or another insurance consultant reasonably acceptable to Agent,
with a copy for each Lender, addressed to the Agent and each Lender,
satisfactory in form and substance to the Agent, as to insurance matters
pertaining to the Loan Parties. The Agent shall have received evidence
satisfactory to it that the insurance policies required by this Agreement
and the other Loan Documents have been obtained, containing the
endorsements required hereby and thereby.
(i) Environmental Matters. The Agent shall have a report from Rust
Environment Infrastructure Inc. or another environmental consultant
reasonably acceptable to Agent, with a copy for each Lender, addressed to
the Agent and each Lender, not unsatisfactory in form or substance to the
Agent and each Lender, as to such environmental matters pertaining to the
Loan Parties as any Lender may request (including but not limited to a
Phase I environmental risk report for all real property constituting
Collateral). In addition, the Agent shall have received, with a copy for
each Lender, such certifications by officers or employees of the Borrower
as any Lender may request with respect to (A) compliance by each Loan
Party with existing Environmental Laws, (B) potential environmental
liabilities arising from past or present conditions, operations or
practices, and (C) potential environmental liabilities arising from
off-site disposal of materials generated by any Loan Party.
(j) Projections. The Agent shall have received, with a counterpart
for each Lender, copies of the projections referred to in Section 3.06
hereof.
(k) Legal Opinions. The Agent shall have received, with an executed
counterpart for each Lender, opinions addressed to the Agent and each
Lender, dated the Closing Date of counsel to (including without limitation
patent counsel) the Borrower and to SDI and the individuals or firms
listed on Schedule 4.01(k) hereto, counsel for the respective parties
listed on such schedule, as to such matters as may be requested by the
Agent or any Lender and in form and substance satisfactory to the Agent
and each Lender.
(l) Officers' Certificates. The Agent shall have received, with an
executed counterpart for each Lender, certificates from such officers of
each Loan Party as to such matters as the Agent or any Lender may request.
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(m) Fees, Expenses, etc. All fees and other compensation required to
be paid to the Agent or the Lenders pursuant hereto or pursuant to any
other written agreement on or prior to the date hereof or prior to the
Closing Date shall have been paid or received.
(n) Third Party Contracts. The SDI Offtake Agreement and the
Administration Agreement shall have been executed and delivered and shall
be satisfactory to the Lenders and copies thereof shall have been
delivered to the Agent. All of the other Project Agreements and all other
contracts (including without limitation those regarding construction,
engineering, equipment, supply of raw materials, provision of electric and
other utilities, and sales) set forth on Schedule 4.01(n) hereto, shall
have been executed and delivered, copies thereof shall have been delivered
to the Agent and shall contain terms not reasonably unsatisfactory to the
Agent.
(o) Marketing Study. The Agent shall have received the Marketing
Study addressing the marketability of the products to be produced at the
Project by Borrower in form and substance satisfactory in all respects to
Agent.
(p) Employment Agreements. Xxxxx Xxxxxxxx shall have executed and
delivered an employment agreement containing terms satisfactory to the
Agent, and conformed copies of the same shall have been provided to the
Agent.
(q) Material Adverse Change. There shall have been no material
adverse change in the projections described in Section 3.06 hereto.
(r) Project Monitor's Report. The Agent shall have received the
following, which shall be in form and substance satisfactory to the
Lenders, with a copy for each Lender: A report from the Project Monitor as
to all aspects of the Project reviewed by it, including the design of the
Project, the projected capacity and efficiency of the Project,
construction schedules, cost estimates for construction, operation and
maintenance of the Project, the adequacy of performance tests, operating
performance feasibility (including without limitation capability of
producing a specified volume of Commercial Grade Finished Goods),
environmental matters, Required Project Permits, reasonableness of
liquidated damage amounts and other Project matters. Said report shall
state that the Specifications to the extent then developed are
satisfactory and have been sufficiently developed in order to establish an
adequate basis for the Design and Construction Standard.
(s) Tax Sharing Agreement. The Borrower and SDI shall have executed
the Tax Sharing Agreement and shall have furnished to Agent a copy
thereof.
(t) Adequacy of Funds Certificate. The Agent shall have received,
with a copy for each Lender, an "Adequacy of Funds Certificate" (in form
and scope described in Section 4.02(d) hereof) as of November 30, 1997,
together with the related Project Monitor's Certificate described in
Section 4.02(e) hereof.
(u) Equity. The Borrower shall have expended at least $30,000,000 of
its own funds in payment of Project Costs and evidence thereof
satisfactory to Agent shall have been provided to Agent.
(v) Utility Loan. The Borrower shall have received from American
Electric Power Financial Services or its nominee or from another source
satisfactory to Agent a commitment for the Utility Loan, at least $650,000
in proceeds thereof shall have been advanced on behalf of Borrower to pay
Project Costs and evidence thereof satisfactory to Agent shall have been
furnished to Agent.
(w) Notice of Business Activities Report. A Notice of Business
Activities Report shall
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have been filed in Indiana if required pursuant to Xxxxx In. Stat. Xxx.
ss. 6-8.1-6-6.
(x) Staffing Plan. The Agent shall have received, with sufficient
copies for each Lender, a staffing plan of the Borrower and such plan
shall not be unsatisfactory to the Required Lenders.
(y) Performance Bonds. The Agent shall have received copies of
performance and payment bonds or other similar instruments, in form an
substance reasonably satisfactory to the Agent, with respect to such
Project Agreements relating to the supply of components of, or the
construction of, the Project as the Agent may reasonably request.
(z) Additional Matters. The Agent shall have received such other
certificates, opinions, documents and instruments as may be requested by
any Lender. All corporate and other proceedings, and all documents,
instruments and other matters in connection with the transactions
contemplated by this Agreement and the other Loan Documents shall be
satisfactory in form and substance to the Agent and each Lender.
4.02. Conditions to Term Loan Commitment Period Loans. The
obligation of each Lender Party to make any Revolving Credit Loan or issue any
Letter of Credit or make any Term Loan during the Term Loan Commitment Period is
subject to the performance by each Loan Party of its obligations to be performed
hereunder or under the other Loan Documents on or before the date of such Loan
or of the issuance of such Letter of Credit, satisfaction of the conditions
precedent set forth herein (including Sections 4.01(b), 4.01(c) and 4.03 hereof)
and in the other Loan Documents and to satisfaction of the following further
conditions precedent:
(a) Receipt of Certain Proceeds. Borrower shall have received such
proceeds and benefits as are designated on Schedule 4.02(a) as receivable
on or prior to the date of such Loan or Letter of Credit and such proceeds
and benefits shall have been committed by the Borrower for construction
and other operating costs of the Project.
(b) Certification as to Certain Governmental Approvals. The Borrower
shall have provided an officer's certificate in form and substance
satisfactory to the Agent with supporting documentation reasonably
requested by the Agent confirming proper zoning and the availability of
utility and municipal services.
(c) Title Insurance. With respect to each Loan, a title insurance
policy endorsement satisfactory to the Agent covering the applicable Loan
shall have been received by the Agent.
(d) Certain Additional Officer's Certificates. The Borrower shall
have provided (at least three Business Days prior to the date of the
applicable Loans) the following officer's certificates in form and
substance satisfactory to the Agent:
(i) if a Loan is requested, a "Use of Advance Certificate",
substantially in the form of Exhibit O hereto, with the blanks
appropriately filled in, stating that such Loan will only be used to
pay capital expenditures, working capital and other operating costs
which are necessary for the construction and operation of the
Project and which, in the case of any Term Loan, are Project Costs
that have been incurred and are payable or, if the same is interest
on the Loans or other costs which are due on a particular schedule
and are of a category of cost referenced in Attachment 1 to the form
of "Use of Advance Certificate" attached hereto as Exhibit O, will
become due and payable within 30 days after the date such Loan is to
be made; and, if any of the Project Costs to be paid by a Term Loan
were not included as actual Project Costs to date in the "Project
Status Certificate" and "Adequacy of Funds Certificate" referred to
below in this Section 4.02(d), such "Use of Advance Certificate"
shall include a statement that such
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Project Costs and the payment thereof by the Borrower, if the same
had been included in such "Adequacy of Funds Certificate", would not
have caused the Net Excess amount less the sum of total Project
Costs and required contingency) set forth in the Summary section of
Schedule Q of such "Adequacy of Funds Certificate" to be less than
zero;
(ii) if a Term Loan is requested, a "Project Status
Certificate", substantially in the form of Exhibit P hereto, with
the blanks appropriately filled in, setting forth, as of a date not
more than thirty days prior to the date such Loan is to be made, the
Project Budget, the Project Costs thereof to date and the Remaining
Project Costs (including costs associated with any damage or other
casualty), and the percentage of completion of construction of the
Project;
(iii) if a Term Loan is requested, an "Adequacy of Funds
Certificate", substantially in the form of Exhibit Q hereto, with
the blanks appropriately filled in, stating and demonstrating that,
as of a date not more than forty-five days prior to the date such
Loan is to be made, the Net Excess amount (total financing less the
sum of total Project Costs and required contingency) is zero or
more.
(e) Project Monitor's and Accountant's Certificates. If a Term Loan
is requested, the conditions set forth in this Section 4.02(e) shall have
been satisfied. The Project Monitor shall have provided a certificate,
substantially in the form of Exhibit Z hereto, with the blanks
appropriately filled in, stating (i) the status of the Project with
respect to the PP&E Costs (PP&E Costs to date, PP&E Costs required to
Complete the construction of the Project and percentage of completion),
(ii) any variances in such PP&E Costs from the Project Status Certificate,
and (iii) the date by which the Preliminary Acceptance Date can be
expected to occur. The independent certified public accountants of the
Borrower shall have provided an "Agreed Upon Procedures Report"
substantially in the form of Exhibit BB hereto, with the blanks
appropriately filled in, on the Project Status Certificate with respect to
the Non-PP&E Costs contained therein. The timing and procedure for
obtaining the aforesaid certificate and report is described in Schedule
4.02(e) hereto. If, at any time, despite the reasonable and diligent
efforts of the Borrower, the independent certified public accountants of
the Borrower refuse, for internal business policy reasons, to continue to
provide the aforesaid report in the form described above, such report may
be modified (for purposes of this Section 4.02(e) and Section 5.01(p)
hereof) to the extent necessary for such accountants to issue the report,
or, if for such reasons such accountants refuse to issue any report, such
report shall thereafter not be required under this Section 4.02(e) nor
under Section 5.01(p) hereof.
(f) Damage. On the date of such Loan or Letter of Credit, the
Project shall not have been materially injured or damaged by fire or other
casualty and have remained unrestored unless the Borrower has complied
with all the requirements of Section 2.06 of the Mortgage.
(g) Required Project Permits. The Agent shall have received, with a
copy for each Lender, on or before the date of such Loan or Letter of
Credit, true and correct copies (in each case certified as to the
authenticity on such date on behalf of the Borrower) of all Required
Project Permits referred to in Schedule 3.04 and Schedule 3.26 hereof
which are designated on such Schedule to be receivable on or prior to the
date of such Loan or Letter of Credit and such items shall be satisfactory
in form and substance to the Agent and shall be in full force and effect.
(h) Adequacy of Funds. The remaining availability under the Term
Loan Commitment, plus the other undrawn committed financing of Borrower
from the sources listed on Schedule Q hereto shall be greater than the
Remaining Project Costs plus the Required Contingency.
(i) Certain Future Project Agreements. Each Future Project Agreement
described on
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Schedule 3.27 hereto as being expected prior to the initial Term Loans
shall have been executed and delivered by the Borrower and each other
party thereto, and the Borrower shall have complied with all of the
applicable requirements of Section 5.15 hereof with respect to each such
Future Project Agreement.
(j) Railroad Rights of Way. All rights of way, including, without
limitation, rights of way over existing railroad tracks of SDI, necessary
to connect the Project with the railroad track system of Norfolk Southern
Railroad shall have been obtained.
(k) Utility Regulatory Commission Approval. The Indiana Utility
Regulatory Commission shall have approved the Contract for Electric
Service between the Borrower and Indiana Michigan Power Company and the
rate structure therein, and shall have approved the Transmission
Facilities Agreement between Indiana Michigan Power Company and the
Borrower (it being understood that (i) approval does not include final
approval of such commission in the event that there is reconsideration or
appeal from such approval and (ii) if necessary to obtain the above
approval, the rates under the Contract for Electric Service may be
increased to a level which is less than or equal to that used for the
Borrower's projections described in Section 3.06 hereof).
4.03. Conditions to All Loans or Letters of Credit. The obligation
of each Lender Party to make any Loan or issue any Letter of Credit is subject
to the performance by each Loan Party of its obligations to be performed
hereunder or under the other Loan Documents on or before the date of such Loan
or of the issuance of such Letter of Credit, satisfaction of the conditions
precedent set forth herein and in the other Loan Documents and to satisfaction
of the following further conditions precedent:
(a) Notice. Appropriate notice of such Loan or Letter of Credit
shall have been given by the Borrower as provided in Article II hereof.
(b) Borrowing Base. In the case of Revolving Credit Loans and, from
and after February 28, 1998, the , Letters of Credit, the Agent shall have
received a Borrowing Base Certificate, signed by a Responsible Officer of
the Borrower, complying with the provisions of Section 2.16.
(c) Representations and Warranties. Each of the representations and
warranties made by the Borrower in Article III hereof or made by any Loan
Party in each other Loan Document (other than in the Assignment of
Contracts) shall be true and correct in all material respects on and as of
such date as if made on and as of such date, both before and after giving
effect to the Loans or Letters of Credit requested to be made or issued on
such date; provided, however, that, with respect to Section 3.16, the
condition precedent in this paragraph (c) shall not be deemed to be
unsatisfied solely as a result of a pending or threatened action, suit,
proceeding or investigation (i) which is the subject of a currently dated
certificate of the Borrower delivered to the Agent stating that the
Borrower believes such action, suit, proceeding or investigation is
without merit and (ii) as to which the Required Lenders have reasonably
determined that an outcome adverse to each Loan Party affected thereby is
remote.
(d) No Defaults. No Event of Default or Potential Default shall have
occurred and be continuing on such date or after giving effect to the
Loans or Letters of Credit requested to be made or issued on such date.
(e) No Violations of Law, etc. Neither the making, issuing nor use
of the Loans or Letters of Credit shall cause any Lender to violate or
conflict with any Requirement of Law.
(f) No Material Adverse Change. There shall not have occurred a
material adverse change in the business, operations, assets or condition
(financial or otherwise) of the Borrower
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since the more recent of (i) the Closing Date or (ii) the most recently
delivered audited financial statements provided to the Agent in accordance
with Section 5.01(a) hereof. There shall not have occurred any other
event, act or condition which could have a Material Adverse Effect.
(g) Letter of Credit Dollar Limits. The dollar limits set forth in
Section 2.17 hereof with respect to the issuance of all Letters of Credit
have been and are being complied with.
Each request by the Borrower for any Loan or Letter of Credit or extension of
the maturity of Revolving Credit Loans shall constitute a representation and
warranty by the Borrower that the conditions set forth in this Section 4.03 have
been satisfied as of the date of such request (except that no representation or
warranty will be deemed to be made as to whether the Required Lenders have made
the determination referred to in the proviso to paragraph (c) above). Failure of
the Agent to receive notice from the Borrower to the contrary before such Loan
is made shall constitute a further representation and warranty by the Borrower
that the conditions referred to in this Section 4.03 have been satisfied as of
the date such Loan is made or Letter of Credit is issued.
ARTICLE V
AFFIRMATIVE COVENANTS
The Borrower hereby covenants to the Agent and each Lender as
follows:
5.01. Basic Reporting Requirements.
(a) Annual Audit Reports. As soon as practicable, and in any event
within 90 days after the close of each fiscal year of the Borrower, the Borrower
shall furnish to the Agent, with a copy for each Lender, statements of income,
cash flows and changes in stockholders' equity of the Borrower for such fiscal
year and balance sheet of the Borrower as of the close of such fiscal year, and
notes to each, all in reasonable detail, setting forth in comparative form the
corresponding figures for the preceding fiscal year. Such financial statements
shall be accompanied by an opinion of Deloitte & Touche or other independent
certified public accountants of recognized national standing selected by the
Borrower. Such opinion shall be free of exceptions or qualifications other than
exceptions for accounting changes. Such opinion in any event shall contain a
written statement of such accountants substantially to the effect that (i) such
accountants examined such financial statements in accordance with generally
accepted auditing standards and accordingly made such tests of accounting
records and such other auditing procedures as such accountants considered
necessary in the circumstances and (ii) in the opinion of such accountants such
financial statements present fairly in all material respects the financial
position of the Borrower as of the end of such fiscal year and the results of
operations and cash flows and changes in stockholders' equity for such fiscal
year, in conformity with GAAP. The Borrower shall deliver to the Agent, with a
copy for each Lender, an Annual Compliance Certificate in substantially the form
set forth as Exhibit E hereto, duly completed and signed by a Responsible
Officer of the Borrower concurrently with the delivery of the financial
statements referred to in this Section 5.01(a).
(b) Quarterly Reports. As soon as practicable, and in any event
within 60 days after the close of each of the first three fiscal quarters of
each fiscal year of the Borrower, the Borrower shall furnish to the Agent, with
a copy for each Lender, unaudited and (unless the Borrower has no Subsidiaries)
consolidating statements of income, cash flows and changes in stockholders'
equity of the Borrower for such fiscal quarter and for the period from the
beginning of such fiscal year to the end of such fiscal quarter and unaudited
and (unless the Borrower has no Subsidiaries) consolidating balance sheets of
the Borrower as of the close of such fiscal quarter, and notes to each which
would be required to be included in a Form 10-Q quarterly report if the Borrower
were required to file such a report under the Securities Exchange Act of 1934,
all in reasonable detail, setting forth in comparative form the corresponding
figures for the same periods or as of the same date during the preceding fiscal
year (except for the balance sheet, which shall set forth in comparative form
the corresponding balance sheet as of the prior fiscal year end). Such financial
statements shall be certified by a Responsible Officer of the
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Borrower as presenting fairly in all material respects the financial position of
the Borrower as of the end of such fiscal quarter and the results of operations
and cash flows and changes in stockholders' equity for such fiscal year, in
conformity with GAAP, subject to normal and recurring year-end audit
adjustments. The Borrower shall deliver to the Agent, with a copy for each
Lender, a Quarterly Compliance Certificate in substantially the form set forth
as Exhibit F hereto, duly completed and signed by a Responsible Officer of the
Borrower concurrently with the delivery of the financial statements referred to
in this Section 5.01(b).
(c) Monthly Reports. As soon as practicable, and in any event within
30 days after the close of each month of each fiscal year of the Borrower, the
Borrower shall furnish to the Agent, with a copy for each Lender, unaudited
statements of income, cash flows and changes in stockholders' equity of the
Borrower for such month and for the period from the beginning of such fiscal
year to the end of such month and an unaudited balance sheet of the Borrower as
of the close of such month, all in reasonable detail, setting forth in
comparative form the corresponding figures for the same periods or as of the
same date during the preceding fiscal year (except for the balance sheet, which
shall set forth in comparative form the corresponding balance sheet as of the
prior fiscal year end). Such financial statements shall be certified by a
Responsible Officer of the Borrower as presenting fairly in all material
respects the financial position of the Borrower as of the end of such month and
the results of operations and cash flows and changes in stockholders' equity for
such fiscal year, in conformity with GAAP, subject to normal and recurring
year-end audit adjustments.
(d) Accountants' Certificate. Each set of financial statements
delivered pursuant to Section 5.01(a) hereof shall be accompanied by (i) a
certificate or report dated the date of such statements and balance sheet by the
independent certified public accountants who opined on such financial statements
stating in substance that they have read this Agreement and that in making the
examination necessary for their certification of such statements and balance
sheet they did not become aware of any Event of Default or Potential Default, or
if they did become so aware, such certificate or report shall state the nature
and period of existence thereof, and (ii) a certificate or report dated as of
the date of such financial statements by such accountants stating in reasonable
detail the information and calculations necessary to establish compliance with
the financial covenants set forth in Section 6.01 hereof as of the end of such
fiscal year.
(e) Projections.
(i) On the Closing Date (with respect to the then-current current
fiscal year of the Borrower), and as soon as practicable and in any event
within 20 days after the close of each subsequent fiscal year of the
Borrower, the Borrower shall furnish to the Agent, with a copy for each
Lender, a certificate signed by a Responsible Officer on behalf of the
Borrower containing a projection of the balance sheet and the revenues,
expenditures (capital or otherwise) and results of operations and cash
position of the Borrower as of the end of each month in the forthcoming
fiscal year, together with a statement of the assumptions and estimates
upon which such projections are based. Such projections, estimates and
assumptions, as of the date of preparation thereof, shall be made in good
faith, shall represent the Borrower's best judgment as to such matters on
the date thereof and shall not contain assumptions or methods of
calculation which are inconsistent with the requirements of the Loan
Documents.
(ii) As soon as practicable, and in any event within 30 days after
the end of each month after the Closing Date, the Borrower shall furnish
to the Agent, with a copy for each Lender, a certificate signed by a
Responsible Officer of the Borrower containing the unaudited balance sheet
and statements of revenues, expenditures (capital or otherwise) and
results of operations and cash position of the Borrower for such month and
for the period from the beginning of the Borrower's fiscal year to the end
of such month, together with management commentary thereon, all in
reasonable detail, setting forth in comparative form the corresponding
figures projected for the same period or as of the same date as set forth
in the
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most recent projections referred to in subsection (i) of this Section
5.01(f), and shall contain an analysis of significant variances from such
projections. Such report shall be certified by a Responsible Officer of
the Borrower as presenting fairly the financial position of the Borrower
as of the end of such month and the results of their operations and their
cash flows for the periods covered thereby, in conformity with GAAP,
subject to normal and recurring year-end audit adjustments.
(f) Business Plan. On the Closing Date (with respect to the
then-current current fiscal year of the Borrower), and as soon as practicable
and in any event within 20 days after the commencement of each subsequent fiscal
year of the Borrower, the Borrower shall furnish to the Agent, with a copy for
each Lender, a certificate signed by a Responsible Officer on behalf of the
Borrower containing the Borrower's business plan for the forthcoming fiscal
year.
(g) Commercial Finance Reports. At such times as the Agent or the
Required Lenders shall reasonably specify from time to time in writing, which
may be as frequently as every month, the Borrower shall furnish to the Agent,
with a copy for each Lender, a report of a Responsible Officer of the Borrower
setting forth such matters pertaining to the working capital of the Borrower and
in such detail as the Agent may specify from time to time, which may include,
among other things, information as to receivables (which may include, among
other things, a breakout of aging and collections, identification of each
receivable, obligor, due date and original invoice date, identification of
write-offs and changes made in reserves for bad debts, and identification of any
extension of the maturity of, refinancing or other material change in the terms
of any receivables), inventory (which may include, among other things, a
breakdown of the amount of inventory by type (raw materials, work-in-progress
and finished goods), by location, and identification of write-offs and
write-downs), payables (which may include, among other things, a breakout of
aging and payments), sales, credits collections, backlog, and forecasts.
(h) Certain Other Reports and Information. Promptly upon their
becoming available to the Borrower, the Borrower shall deliver to the Agent,
with a copy for each Lender, a copy of (i) all regular or special reports,
registration statements and amendments to the foregoing which the Borrower shall
file with the Securities and Exchange Commission (or any successor thereto) or
any securities exchange, (ii) all reports, proxy statements, financial
statements and other information distributed by the Borrower to their respective
stockholders, bondholders or the financial community generally, and (iii) all
accountants' management letters pertaining to, all other reports submitted by
accountants in connection with any audit of, and all other material reports from
outside accountants with respect to, any Loan Party.
(i) Further Information. The Borrower will promptly furnish to the
Agent, with a copy for each Lender, such other information and in such form as
the Agent or any Lender may reasonably request from time to time.
(j) Notice of Certain Events. Promptly upon becoming aware of any of
the following, the Borrower shall give the Agent notice thereof, together with a
written statement of a Responsible Officer of the Borrower setting forth the
details thereof and any action with respect thereto taken or proposed to be
taken by the Borrower:
(i) Any Event of Default or Potential Default.
(ii) Any material adverse change in the business, operations or
condition (financial or otherwise) or prospects of any Loan Party.
(iii) Any pending or threatened action, suit, proceeding or
investigation by or before any Governmental Authority against or affecting
any Loan Party which seeks damages in excess of $300,000) or which, if
adversely determined, could have a Material Adverse Effect.
(iv) Any material violation, breach or default by any Loan Party of
or under any
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agreement or instrument to which such Loan Party is a party material to
the business, operations, condition (financial or otherwise) or prospects
of such Loan Party or the Borrower.
(v) Any amendment or supplement to, or extension, renewal,
refinancing, or refunding of, or waiver by any other party thereto of any
right under or conditions of, any agreement or instrument creating,
evidencing or securing any Indebtedness or Guaranty Equivalent of any Loan
Party, or any agreement or instrument material to the business,
operations, condition (financial or otherwise) or prospects of any Loan
Party and any negotiations pertaining to any of the foregoing.
(vi) Any Pension-Related Event. Such notice shall be accompanied by
a copy of any notice, request, return, petition or other document received
by any Loan Party or any Controlled Group Member from any Person, or which
has been or is to be filed with or provided to any Person (including
without limitation the Internal Revenue Service, PBGC or any Plan
participant, beneficiary, alternate payee or employer representative), in
connection with such Pension-Related Event.
(vii) Any Environmental Claim pending or threatened against any Loan
Party or any of its Environmental Affiliates, or any past or present acts,
omissions, events or circumstances (including but not limited to any
dumping, leaching, deposition, removal, abandonment, escape, emission,
discharge or release of any Environmental Concern Material at, on or under
any facility or property now or previously owned, operated or leased by
any Loan Party or any of its Environmental Affiliates) that could form the
basis of such Environmental Claim, which Environmental Claim, if adversely
resolved, individually or in the aggregate, could have a Material Adverse
Effect.
(viii) Any material difficulty in obtaining labor or materials in a
timely manner or any other matter which could materially impair the
Borrower's ability to achieve the Preliminary Acceptance Date by June 30,
1999 or the Final Acceptance Date by March 31, 2000.
(ix) Any lapse or other termination of any Required Project Permit
or other Governmental Action (unless such Permit or Action is no longer
necessary) in connection with the Loan Documents, or the other Project
Agreements or matters contemplated therein, or any dispute between any
Loan Party and any Governmental Authority which may have a Material
Adverse Effect.
(x) Any Loan Party becoming a party to a collective bargaining
agreement with respect to any of its employees.
(xi) Any default by any Person under a Project Agreement.
(k) Notices Under Other Agreements. Concurrently with any Loan
Party's delivery or receipt thereof, the Borrower shall provide the Agent with
copies of any reports, certificates or notices furnished by any Loan Party to
any other party to any agreement or instrument creating, evidencing or securing
any Indebtedness or Guaranty Equivalent of any Loan Party, or any agreement or
instrument material to the business, operations, condition (financial or
otherwise) or prospects of any Loan Party, or received by any Loan Party from
any other party to any of the foregoing.
(l) Visitation; Verification. Upon reasonable prior notice, the
Borrower shall permit (and cause each Loan Party to permit) the Agent or any
Lender or its accountants, attorneys or other agents to visit and inspect any of
the properties of any Loan Party, to examine its books and records and take
copies and extracts therefrom and to discuss its affairs with its directors,
officers, employees and independent accountants at such times and as often as
the Agent or any Lender may reasonably request; provided, that a Loan Party
shall have the right to have an officer present at any discussion with its
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employees; and provided, further, that the Lenders (as opposed to the Agent)
shall not have any right under this Section to examine any proprietary technical
information of the Borrower; the foregoing shall not preclude walk-through
visits of the properties of a Loan Party by the Agent or any Lender. The
Borrower hereby authorizes (and directs each Loan Party to authorize) such
officers, employees and independent accountants to discuss with the Agent or any
Lender the affairs of any Loan Party. The Agent and the Lenders shall have the
right to examine and verify accounts, inventory and other properties and
liabilities of each Loan Party from time to time, and the Borrower shall
cooperate with the Agent and the Lenders in such verification. Any such
inspection of the Project shall be for the protection of the Agent and the
Lenders and neither the Agent nor any Lender shall have any responsibility to
any Loan Party or any other Person for any deficiency in construction or
variance from the Specifications which may be revealed by any inspection by the
Project Monitor, the Agent or any Lender, whether or not discovered by any of
such Persons.
(m) Borrowing Base. The Borrower shall provide Borrowing Base
Certificates from time to time in accordance with Section 2.16 hereof.
(n) Environmental Audit. The Agent or the Required Lenders shall
have the right from time to time upon reasonable notice to designate such
Persons ("Environmental Auditors") as the Agent may select to visit, inspect and
have access to any of the properties, products or wastes of each Loan Party and,
to the extent possible, its Environmental Affiliates, for the purpose of
investigating whether there may be a basis for any Environmental Claim or any
condition which could result in any liability, cost or expense to the Agent or
any Lender; provided that unless an Event of Default or Potential Default shall
have occurred and be continuing, or unless there is reasonable cause, such
visitation and investigation shall not occur more than once during any period of
two calendar years. Such investigation may include, among other things, above
and below ground testing for the presence of Environmental Concern Materials and
such other tests as may be necessary or advisable in the opinion of the Agent,
after consultation with the Borrower. The Borrower will supply to the
Environmental Auditors such historical and operational information, including
the results of all samples sent for analysis, correspondence with Governmental
Authorities and environmental audits or reviews regarding properties, products
and wastes of each Loan Party or its Environmental Affiliates as are within its
possession, custody or control, or which are available to it, and will make
available for meetings with the Environmental Auditors appropriate personnel
employed by or consultants retained by the Borrower having knowledge of such
matters.
(o) Construction Progress Reports. The Borrower shall furnish to the
Agent, with a copy for each Lender, monthly reports concerning the progress of
engineering, procurement, design and construction of the Project, in
substantially the form of Exhibit Y hereto.
(p) Adequacy of Funds Certificate. As soon as practicable (but no
later than thirty days) after the end of each calendar month commencing January
31, 1998 and continuing until the Adequacy of Funds End Date, the Borrower shall
furnish to the Agent, with a copy for each Lender, an Adequacy of Funds
Certificate (in form and scope described in Section 4.02(d) hereof) as of such
date, together with the related Project Monitor's certificate and with respect
to each such certificate furnished at the end of a calendar quarter, the
independent accountants' certificate described in Section 4.02(e) hereof.
5.02. Insurance. The Borrower shall, and shall cause each other Loan
Party to, (a) maintain with financially sound and reputable insurers insurance
with respect to the Project, its business and against such liabilities,
casualties and contingencies and of such types and in such amounts as is
satisfactory to the Required Lenders (including without limitation product and
other liability, casualty, workers' compensation and umbrella coverage, and such
insurance described on Schedule 5.02 hereof), (b) provide that such insurance
cannot terminate, expire, be canceled or amended in any material respect without
30 days' prior notice to the Agent, (c) furnish to each Lender from time to time
upon reasonable request the policies under which such insurance is issued,
certificates of insurance and such other information relating to such insurance
as such Lender may reasonably request, (d) cause the insurance
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policies to contain (i) a "replacement cost endorsement", (ii) a standard first
mortgagee endorsement, without contribution, substantially equivalent to the New
York standard mortgagee endorsement, and (iii) an endorsement that any loss
shall be payable in accordance with the terms of such policy notwithstanding any
act or negligence of any Loan Party which might otherwise give rise to a defense
by the insurer, and (e) provide such other insurance and endorsements as are
required by this Agreement and the other Loan Documents.
5.03. Payment of Taxes and Other Potential Charges and Priority
Claims. The Borrower shall, and shall cause each other Loan Party to, pay or
discharge:
(a) on or prior to the date on which penalties attach thereto, all
taxes, assessments and other governmental charges imposed upon it or any
of its properties;
(b) on or prior to the date when due, all lawful claims of
materialmen, mechanics, carriers, warehousemen, landlords and other like
Persons which, if unpaid, might result in the creation of a Lien upon any
such property; and
(c) on or prior to the date when due, all other lawful claims which,
if unpaid, might result in the creation of a Lien upon any such property
or which, if unpaid, might give rise to a claim entitled to priority over
general creditors of the Borrower or such Loan Party in a case under Title
11 (Bankruptcy) of the United States Code, as amended;
provided, that unless and until foreclosure, distraint, levy, sale or similar
proceedings shall have been commenced the Loan Parties need not pay or discharge
any such tax, assessment, charge or claim so long as (x) the validity thereof is
contested in good faith and by appropriate proceedings diligently conducted and
(y) such reserves or other appropriate provisions as may be required by GAAP
shall have been made therefor.
5.04. Preservation of Corporate Status. The Borrower shall, and
shall cause each other Loan Party to, maintain its status as a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and, unless failure to do so could not have a
Material Adverse Effect, to be duly qualified to do business as a foreign
corporation and in good standing in all jurisdictions in which the ownership of
its properties or the nature of its business or both make such qualification
necessary or advisable.
5.05. Governmental Approvals and Filings. The Borrower shall, and
shall cause each other Loan Party to, keep and maintain in full force and effect
all Governmental Actions necessary or advisable in connection with execution and
delivery of any Loan Document by any Loan Party, consummation by each Loan Party
of the transactions herein or therein contemplated, performance of or compliance
with the terms and conditions hereof or thereof by any Loan Party or to ensure
the legality, validity, binding effect, enforceability or admissibility in
evidence hereof or thereof.
5.06. Maintenance of Properties. The Borrower shall, and shall cause
each other Loan Party to, maintain or cause to be maintained in good repair,
working order and condition (ordinary wear and tear excepted) the properties now
or hereafter owned, leased or otherwise possessed by it so that the business
carried on in connection therewith may be conducted at all times in accordance
with the customary practice of facilities producing direct reduced iron or pig
iron.
5.07. Avoidance of Other Conflicts. The Borrower shall, and shall
cause each other Loan Party to, not violate or conflict with, be in violation of
or conflict with, or be or remain subject to any liability (contingent or
otherwise) on account of any violation or conflict with
(a) any Requirement of Law (including without limitation any
Environmental Law),
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(b) its certificate or articles of incorporation of by-laws (or
other constituent documents), or
(c) any Contractual Obligations to which it is party, which
violation could have Material Adverse Effect.
5.08. Financial Accounting Practices. The Borrower shall, and shall
cause each other Loan Party to, make and keep books, records and accounts which,
in reasonable detail, accurately and fairly reflect its transactions and
dispositions of its assets and maintain a system of internal accounting controls
sufficient to provide reasonable assurances that (a) transactions are executed
in accordance with management's general or specific authorization, (b)
transactions are recorded as necessary (i) to permit preparation of financial
statements in conformity with GAAP, and (ii) to maintain accountability for
assets, (c) access to assets is permitted only in accordance with management's
general or specific authorization and (d) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
5.09. Use of Proceeds. The Borrower shall apply the proceeds of the
Revolving Credit Loans for working capital purposes and the proceeds of the Term
Loans only to pay Project Costs and the dividend to SDI to the extent permitted
by Section 6.06 hereof. The Borrower shall not use, or permit the use of, the
proceeds of any Loans hereunder directly or indirectly for any unlawful purpose,
in any manner inconsistent with Section 3.12 hereof, or inconsistent with any
other provision of any Loan Document.
5.10. Continuation of or Change in Business. The Borrower shall, and
shall cause each other Loan Party to, continue to engage in its business as
currently contemplated, and no Loan Party shall engage in any other business.
5.11. Consolidated Tax Return. The Borrower shall not, and shall not
permit any other Loan Party to, file or consent to the filing of any
consolidated income tax return with any Person other than a Loan Party and SDI.
5.12. Fiscal Year. The Borrower shall not change its fiscal year or
fiscal quarter or permit any other Loan Party to do so.
5.13. Tax Sharing Agreement. The Borrower shall comply with all of
the provisions of the Tax Sharing Agreement.
5.14. Construction of the Project. (a) The Borrower shall, promptly
after the date hereof, cause the construction of the Project to commence and
will prosecute the same with diligence and continuity to Completion. The
Borrower will cause the Project to be designed, constructed and Completed in
accordance with the Design and Construction Standard, will cause the Preliminary
Acceptance Date to occur on or before June 30, 1999, the Final Acceptance Date
to occur on or before March 31, 2000, and will cause construction of the Project
to be Completed, free and clear of all Liens (or claims of Liens) for material
supplied or work performed in connection therewith, on or before December 31,
2000. Upon demand of the Agent, the Borrower will correct any material departure
from the Design and Construction Standard.
(b) The Borrower will furnish to the Agent (i) within 45 days after
the foundations of the Project have been located on the Project Site, a survey
certified by a registered engineer or surveyor reasonably satisfactory to the
Agent, in form and scope reasonably acceptable to the Agent, showing that the
foundations are located within the perimeter of the Project Site and any setback
lines and at the location shown in the Specifications, and (ii) as promptly as
practicable upon completion of construction of the Project, (A) an "as-built"
survey certified by a registered engineer or surveyor reasonably satisfactory to
the Agent, in form and scope reasonably acceptable to the Agent, showing the
completed
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Project, (B) the final "as-built" Specifications for the Project and (C) the
complete releases of Liens described in clause (c) of the definition of
"Completion" contained in Section 1.01 hereof, except that delivery of such
complete release of liens may be delayed with respect to each contract
identified on Schedule 5.14(b) attached hereto until final payment under such
contract. The Borrower shall not make final payment under any construction or
supply contract unless concurrently with or prior to such payment it receives
such a complete release of Liens for such contract.
(c) At all times during the period commencing on the earlier of the
date the first Loan is made and June 30, 1998 and ending on the Adequacy of
Funds End Date, the Borrower shall be in compliance with the adequacy of funds
test described in Section 4.02(h).
5.15. Future Project Agreements. The Borrower shall furnish to the
Agent, with a copy for each Lender, certified copies of any Future Project
Agreements within five days of the execution and delivery thereof, together with
(i) a duly executed consent and agreement from each other party to such Future
Project Agreements, in substantially the form attached hereto as Exhibit V, with
such changes therein as the Required Lenders may reasonably approve and with the
blanks appropriately filled, (ii) if such Future Project Agreement is with a
Loan Party other than the Borrower, a duly executed assignment of contract
executed by such Loan Party substantially in the form of Exhibit CC hereto and
(iii) if such Future Project Agreement involves amounts in excess of $2,000,000,
an opinion addressed to the Agent and each Lender, of each such other party's
counsel addressing such matters as may reasonably be requested by the Agent.
Each such consent and agreement shall be in form and substance, and each such
Future Project Agreement which is listed on Schedule 1.01E hereof or is of the
type described in clause (c) of the definition thereof shall be in form and
substance, reasonably satisfactory to the Agent and the Required Lenders prior
to execution and delivery thereof. Each such Future Project Agreement shall be
in form and substance reasonably satisfactory to the Agent, or shall be on a
standard form (without material modification thereto) included in Exhibit AA
hereto.
5.16. Consents to Assignment of Contract. The Borrower shall, prior
to the earlier of (a) 120 days after the date hereof or (b) the Closing Date,
cause fully executed Consents to Assignment of Contract, in form reasonably
satisfactory to the Agent, to be delivered to the Agent, with a copy for each
Lender, with respect to the contracts listed on Schedule 5.16 hereto.
5.17. Debt Service Reserve Account. On the Closing Date the Borrower
shall open at Agent and shall maintain until all of the Obligations shall have
been paid in full and all commitments to lend hereunder shall have terminated, a
Debt Service Reserve Account into which account Borrower will deposit or cause
to be deposited (a) the Net Sale Proceeds of the sale of all assets not
described in Section 6.10(a) hereof, (b) the Net Proceeds of casualty insurance
and of condemnation awards, not used for the payment of costs of restoring
improvements or equipment in accordance with Section 2.06 of the Mortgage and
(c) the Net Income of Borrower (after payment of all ordinary and necessary
operating expenses incurred in the normal course of operating the Project in
accordance with normal industry standards) until there shall be on deposit in
the Debt Service Reserve Account the amount of $4,500,000. Funds in the Debt
Service Reserve Account may be made available to Borrower only to pay Debt
Service to the extent that Borrower shall have demonstrated to satisfaction of
Agent that the then Net Income of Borrower is not sufficient to pay Debt Service
then due and payable and then only to the extent of such deficiency. Borrower
shall be required to make the deposits from the sources described in this
Section 5.17 so as to maintain the amount of $4,500,000 on deposit in the Debt
Service Reserve Account. Absent an Event of Default, funds in the Debt Service
Reserve Account shall earn interest in accordance with the customary practices
of the Agent as in effect from time to time and may be invested in Cash
Equivalent Investments. If an Event of Default should occur, the Agent may, at
its option, apply all funds to the Loans in such order as Agent in its sole
discretion may determine. The Agent shall have the sole dominion and control
over the Debt Service Reserve Account and over the funds on deposit therein and
shall have the sole right to draw on such funds for application as set forth in
this Section 5.17.
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ARTICLE VI
NEGATIVE COVENANTS
The Borrower hereby covenants to the Agent and each Lender as
follows:
6.01. Financial Covenants.
(a) Tangible Net Worth. From and after the Financial Covenant Date,
Tangible Net Worth shall not at any time be less than the sum of (i) $15,000,000
and (ii) 50% of Cumulative Net Income at such time.
(b) Fixed Charge Coverage Ratio. As of the last day of each fiscal
quarter commencing with the fiscal quarter in which the Financial Covenant Date
occurs (each such last day of the fiscal quarter being called a "test day"), the
Fixed Charge Coverage Ratio for the Measurement Period ending on such test day
shall not be less than 1.5 to 1 for Measurement Periods ending in the calendar
year 1999 or 2000 and 1.1 to 1 for Measurement Periods ending in the calendar
year after the calendar year 2000. "Measurement Period" shall mean (i) the
fiscal quarter in which the Financial Covenant Date occurs (the "Initial
Quarter"), (ii) the period consisting of the Initial Quarter and the immediately
succeeding fiscal quarter, (iii) the period consisting of the Initial Quarter
and the immediately succeeding two fiscal quarters, (iv) the period consisting
of the Initial Quarter and the immediately succeeding three fiscal quarters and
(v) each succeeding period of four consecutive fiscal quarters.
(c) Negative EBITDA.) From January 1, 1998 to December 31, 1998, the
Borrower's cumulative negative EBITDA shall not exceed $5,000,000, and during
the period from January 1, 1998 through December 31, 1999 cumulative negative
EBITDA of Borrower shall not exceed $7,000,000.
(d) Funded Indebtedness to EBITDA. The ratio of (x) Funded
Indebtedness minus the amount on deposit in the Debt Service Reserve Account to
(y) EBITDA for each Measurement Period ending in the calendar years 1999 or 2000
shall be not greater than 4.0 to 1 on the last day of each such Measurement
Period and for each Measurement Period ending after the calendar year 2000,
shall be not greater than 3.0 to 1 on the last day of each such Measurement
Period.
6.02. Liens. The Borrower shall not, and shall not permit any other
Loan Party to, at any time create, incur, assume or suffer to exist any Lien on
any of its property (now owned or hereafter acquired), or agree, become or
remain liable (contingently or otherwise) to do any of the foregoing, except for
the following ("Permitted Liens"):
(a) Liens pursuant to the Security Documents in favor of the Agent
for the benefit of the Lenders and the Agent to secure the Obligations;
(b) Liens which are granted by the Borrower pursuant to the Utility
Loan;
(c) Liens arising from taxes, assessments, charges or claims
described in Section 5.03 hereof that are not yet due or that remain
payable without penalty or to the extent permitted to remain unpaid under
the proviso to such Section 5.03 and under the second proviso contained in
Section 2.07 of the Mortgage;
(d) Deposits or pledges of cash or securities in the ordinary course
of business to secure (i) workmen's compensation, unemployment insurance
or other social security obligations, (ii) performance of bids, tenders,
trade contracts (other than for payment of money) or leases, (iii) stay,
surety or appeal bonds, or (iv) other obligations of a like nature
incurred in the ordinary course of business; and
(e) Easements, rights of way and other restrictions on the use of
real property which are
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described in Schedule B-II of the title insurance policy insuring the Lien
of the Mortgage.
(f) Liens described on Schedule 6.02(f) and Liens on property of the
Borrower securing all or part of the purchase price thereof, provided
that: (i) such Lien is created before or substantially simultaneously with
the purchase of such property by the Borrower and in any event after the
Final Acceptance Date, (ii) such Lien is confined solely to the property
so purchased and proceeds thereof, (iii) the aggregate amount secured by
all such Liens on any particular property at the time purchased by the
Borrower shall not exceed the lesser of the purchase price of such
property and the fair market value of such property at the time of
purchase, (iv) such property shall not consist of anything integral to the
iron ore or coal storage facility, the iron ore drying and concentration
facility, the iron ore concentrate grading line, the coal reductant
grading line, the pellet agglomeration facility, the rotary hearth furnace
or the submerged arc furnace or to the production of direct reduced iron
pellets or liquid pig iron, (v) the purchase price of such property shall
have been included in the calculation required by Section 6.13 hereof and
(vi) the aggregate amount secured by all Liens described in this Section
6.02(f) shall not at any time exceed $2,000,000.
(g) Liens on accounts receivable of any Loan Party in favor of the
Borrower.
"Permitted Lien" shall in no event include any Lien imposed by, or required to
be granted pursuant to, ERISA or any Environmental Law. Nothing in this Section
6.02 shall be construed to limit any other restriction on Liens imposed by the
Security Documents or otherwise in the Loan Documents.
6.03. Indebtedness. The Borrower shall not, and shall not permit any
other Loan Party to, at any time create, incur, assume or suffer to exist any
Indebtedness, or agree, become or remain liable (contingently or otherwise) to
do any of the foregoing, except:
(a) Indebtedness to the Lenders and the Agent pursuant to this
Agreement and the other Loan Documents;
(b) The Indebtedness of the Borrower incurred pursuant to the
Utility Loan and refinancings thereof on the same terms (other than
interest rate or a longer maturity);
(c) Accounts payable to trade creditors arising out of purchases of
goods or services in the ordinary course of business, provided that (i)
such accounts payable are payable not later than 90 days after the
original invoice date according to the original terms of sale, and (ii) as
of the end of each calendar month, not more than 15% of such accounts
payable are more than 90 days past due, and not more than 5% of such
accounts payable are more than 120 days past due, in each case according
to the original terms of sale (except to the extent that any such account
payable is being contested in good faith and by appropriate proceedings
diligently conducted and so long as such reserves or other appropriate
provisions as may be required by GAAP shall have been made with respect
therefor);
(d) Any licensing or royalty fees owed by the Borrower in the
ordinary course of business;
(e) Indebtedness secured by Liens permitted by Section 6.02(f)
hereof;
(f) Unsecured Indebtedness of the Borrower in an aggregate principal
amount not exceeding $2,000,000 at any time outstanding;
(g) Indebtedness of another Loan Party to the Borrower as to which
the Borrower's rights are subject to a first perfected Lien in favor of
the Agent;
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6.04. Guaranties, Indemnities, etc. The Borrower shall not be or
become subject to or bound by any Guaranty Equivalent, or agree, become or
remain liable (contingently or otherwise) to do any of the foregoing, and shall
not permit any other Loan Party to do so, except:
(a) Guaranty Equivalents existing on the date hereof and listed in
Schedule 6.04 hereto;
(b) Contingent liabilities arising from the endorsement of
negotiable or other instruments for deposit or collection or similar
transactions in the ordinary course of business;
(c) Indemnities by the Borrower or another Loan Party of the
liabilities of its directors or officers in their capacities as such
pursuant to provisions presently contained in their certificate or
articles of incorporation or by-laws (or other constituent documents) or
as permitted by Law;
(d) Contingent liabilities arising from any interest rate protection
agreements.
6.05. Loans, Advances and Investments. The Borrower shall not, and
shall not permit any Loan Party to, at any time make or suffer to exist or
remain outstanding any loan or advance to, or purchase, acquire or own
(beneficially or of record) any stock, bonds, notes or securities of, or any
partnership interest (whether general or limited) in, or any other interest in,
or make any capital contribution to or other investment in, any other Person, or
agree, become or remain liable (contingently or otherwise) to do any of the
foregoing, except:
(a) Loans and investments existing on the date hereof and listed in
Schedule 6.05 hereof;
(b) Receivables owing to the Borrower arising from sales of
inventory under usual and customary terms in the ordinary course of
business; and loans and advances extended by the Borrower to
subcontractors or suppliers (excluding subcontractors or suppliers who are
Affiliates of the Borrower) under usual and customary terms in the
ordinary course of business;
(c) Advances to officers and employees, other agents and independent
contractors of the Borrower to meet expenses incurred by such persons in
the ordinary course of business or for relocation and in amounts at any
time outstanding not exceeding $50,000 to any one officer or employee and
$500,000 in the aggregate;
(d) Cash Equivalent Investments;
6.06. Dividends and Related Distributions. The Borrower shall not
declare or make any Stock Payment, or agree, become or remain liable
(contingently or otherwise) to do any of the foregoing, and shall not permit any
other Loan Party to do so, except as follows:
(a) The Borrower may pay a one-time cash dividend to SDI in the
amount of up to $5,000,000 if, and only if, (i) no Event of Default or
Potential Default exists or is continuing or would result from the payment
of such dividend, (ii) the Preliminary Acceptance Date shall have
occurred, (iii) for each of three consecutive months the sum of the
Borrower's Net Income plus depreciation shall have been greater than zero,
(iv) there shall be on deposit in the Debt Service Reserve Account the
amount of $2,200,000, (v) there shall have been delivered an Adequacy of
Funds Certificate reasonably satisfactory in all respects to the Required
Lenders demonstrating to the satisfaction of such Lenders that Final
Acceptance may be achieved without reducing to zero the remaining
unadvanced portion of the Term Loan Committed Amount, (vi) the payment of
such dividend shall not result in a reduction in the Tangible Net Worth of
Borrower below $20,000,000 and (vii) all of the conditions of Section 4.02
hereof shall have been satisfied on the date of such payment; and
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(b) The Borrower may pay cash dividends to SDI in an amount equal to
50% of Excess Cash Flow for any fiscal quarter if, and only if, (i) no
Event of Default or Potential Default exists or would result from the
payment of such dividends, (ii) there is on deposit in the Debt Service
Reserve Account the amount of $4,500,000, (iii) $27,500,000 of principal
amount of Term Loans shall have been repaid by Borrower either from Excess
Cash Flow or Net Cash Proceeds of equity securities that may be issued by
Borrower subject to the terms of this Agreement and (iv) financial
statements for such quarter shall have theretofore been delivered to the
Agent pursuant to Section 5.01 hereof.
6.07. Sale-Leasebacks. The Borrower shall not at any time enter into
or suffer to remain in effect any transaction to which the Borrower is a party
involving the sale, transfer or other disposition by the Borrower of any
property (now owned or hereafter acquired), with a view directly or indirectly
to the leasing back of any part of the same property or any other property used
for the same or a similar purpose or purposes, or agree, become or remain liable
(contingently or otherwise) to do any of the foregoing, and shall not permit any
other Loan Party to do so.
6.08. Leases. The Borrower shall not at any time enter into or
suffer to remain in effect any lease, as lessee, of any property, or agree,
become or remain liable (contingently or otherwise) to do any of the foregoing,
or permit any other Loan Party to do so, except operating leases of data
processing equipment, office equipment, transportation equipment and other
manufacturing equipment or office space used by the lessee in the ordinary
course of business, provided that such leases will not result in the payment or
accrual by the Borrower of more than $750,000 in the aggregate in any
twelve-month period and no such lease has a term longer than seven years; and
provided further that such leases will not result in the payment or accrual by
all Loan Parties other than the Borrower of more than $150,000 in the aggregate
in any twelve-month period.
6.09. Mergers, Acquisitions, etc. The Borrower shall not, and shall
not permit any other Loan Party to, (a) merge with or into or consolidate with
any other Person, (b) liquidate, wind-up, dissolve or divide, (c) acquire all or
any substantial portion of the properties of any going concern or going line of
business, (d) acquire all or any substantial portion of the properties of any
other Person other than in the ordinary course of business, unless such
acquisition is made by the Borrower after the Final Acceptance Date and would
not result in the sum of (i) the aggregate amount paid for all such acquisitions
plus (ii) the aggregate amount of investments made under Section 6.05(e)
exceeding $2,000,000 or (z) agree, become or remain liable (contingently or
otherwise) to do any of the foregoing.
6.10. Dispositions of Properties. The Borrower shall not, and shall
not permit any other Loan Party to, sell, convey, assign, lease, transfer,
abandon or otherwise dispose of, voluntarily or involuntarily, any of its
properties, or agree, become or remain liable (contingently or otherwise) to do
any of the foregoing, except:
(a) The Borrower and any other Loan Party may sell Inventory in the
ordinary course of business;
(b) In addition to the asset sales permitted by paragraph (a) above
the Borrower may, for cash, dispose of assets in a maximum aggregate
annual amount of $1,000,000; and
Provided in each instance that the Net Cash Proceeds of all such sales are
applied as set forth in this Agreement.
By way of illustration, and without limitation, it is understood
that the following are dispositions of property subject to this Section 6.10:
any disposition of accounts, chattel paper or general intangibles, with or
without recourse; and any disposition of any leasehold interest. Nothing in this
Section 6.10 shall be construed to limit any other restriction on dispositions
of property imposed by the Security Documents or otherwise in the Loan
Documents.
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6.11. No Plans. The Borrower will not, and will not permit any other
Loan Party to, enter into any contract or arrangement pursuant to which any Plan
is maintained for any of its employees.
6.12. Dealings with Affiliates. The Borrower shall not, and shall
not permit any other Loan Party to, enter into or carry out any transaction with
(including, without limitation, purchase or lease property or services from,
sell or lease property or services to, loan or advance to, or enter into, suffer
to remain in existence or amend any contract, agreement or arrangement with) any
Affiliate of the Borrower, directly or indirectly, or agree, become or remain
liable (contingently or otherwise) to do any of the foregoing, except:
(a) Execution and performance of contracts, agreements and
arrangements in existence as of the date hereof and set forth in Schedule
6.12 hereof;
(b) Directors, officers and employees of a Loan Party may be
compensated for services rendered in such capacity to such Loan Party,
provided that such compensation is in good faith and on terms no less
favorable to such Loan Party than those that could have been obtained in a
comparable transaction on an arm's-length basis from an unrelated Person,
and the board of directors of the Borrower (including a majority of the
directors having no direct or indirect interest in such transaction)
approve the same;
(c) The SDI Offtake Agreement, the Administration Agreement and the
Tax Sharing Agreement.
(d) Other transactions in the ordinary course of the Borrower's
business with Affiliates in good faith and on terms no less favorable to
the Borrower than those that could have been obtained in a comparable
transaction on an arm's-length basis from an unrelated Person, as to which
the board of directors of Borrower (including a majority of the directors
having no direct or indirect interest in such transaction) approve such
transaction and determine that such terms are no less favorable to the
Borrower than those that could have been obtained in a comparable
transaction on an arm's-length basis from an unrelated Person; provided,
that the Borrower shall not enter into any such transaction or series of
related transactions having a value in excess of $1,000,000 unless the
Agent has received a copy of the foregoing resolution of such board of
directors to the effect that such transaction is fair to the Borrower from
a financial point of view.
6.13. Capital Expenditures. On or after the Final Acceptance Date,
Borrower shall not, and shall not permit any other Loan Party to, make any
Capital Expenditures in any fiscal year except for Capital Expenditures of the
Borrower not in excess of the lesser of (i) $2,000,000 and (ii) 50% of Excess
Cash Flow for the immediately preceding fiscal year (but not less than zero),
plus the amount which was permitted to be used for Capital Expenditures in the
immediately preceding fiscal year but was not used, in each case less the sum
equal to actual expenditures made in such fiscal year towards completion of the
Project. Notwithstanding the foregoing, in the event that the Final Acceptance
Date occurs on any day that is not the first day of a fiscal year, the amount
set forth in clause (i) and the amount determined pursuant to clause (ii) in the
immediately preceding sentence shall be reduced to the amount determined by
multiplying such amount by a fraction, the numerator of which is the number of
days from and excluding the Final Acceptance Date to and including the last day
of the fiscal year and the denominator of which is 365.
6.14. Limitations on Modification of Certain Agreements and
Instruments. The Borrower shall not amend, modify or supplement, or suffer any
amendment, modification or supplement to, the Utility Loan or any of the
agreements governing the Utility Loan, the SDI Offtake Agreement, the
Administration Agreement, the Tax Sharing Agreement or its certificate of
incorporation or by-laws (or similar constituent documents) except that the
Borrower may, without the consent of the Required Lenders, amend or modify the
sections of its certificate of incorporation or bylaws or Stockholders'
Agreement listed on Schedule 6.14 hereto.
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6.15. Limitation on Other Restrictions on Liens. The Borrower shall
not, and shall not permit any other Loan Party to, enter into, become or remain
subject to any agreement or instrument to which the Borrower or such Loan Party,
as the case may be, is a party or by which it or any of its properties (now
owned or hereafter acquired) may be subject or bound that would prohibit the
grant of any Lien upon any of its properties (now owned or hereafter required),
except:
(a) The Loan Documents;
(b) (i) Restrictions pursuant to non-assignment provisions of any
executory contract or of any lease by the Borrower as lessee, and (ii)
restrictions on granting Liens on property subject to a Permitted Lien for
the benefit of the holder of such Permitted Lien to the extent in
existence on the date hereof.
6.16. Limitation on Other Restrictions on Amendment of the Loan
Documents, etc. The Borrower shall not, and shall not permit any other Loan
Party to, enter into, become or remain subject to any agreement or instrument to
which the Borrower or such Loan Party, as the case may be, is a party or by it
or any of its properties (now owned or hereafter acquired) may be subject or
bound that would prohibit or require the consent of any Person to any amendment,
modification or supplement to any of the Loan Documents, except for the Loan
Documents.
6.17. Maintenance of Business. The Borrower shall not change its
primary line of business from that of constructing, owning and operating the
Project.
6.18. Subsidiaries. The Borrower shall not organize, incorporate,
acquire or otherwise suffer to exist any Subsidiaries.
6.19. Change Orders. The Borrower will not modify the Specifications
or accept any change order without the prior written consent of the Required
Lenders, except that the Specifications may, without such consent, be modified
by a change order as to which all documentation has been delivered to the
Project Monitor to the extent that such modifications do not change the Project
from the definition thereof set forth in Section 1.01 hereof, are consistent
with the Design and Construction Standard (except for that portion of the Design
and Construction Standard relating to the Specifications), do not involve any
delay in the Preliminary Acceptance Date beyond June 30, 1999 or the Final
Acceptance Date beyond March 31, 2000 or an increase in Project Costs (other
than increases of less than $5,000,000 in the aggregate for all change orders
and less than $1,000,000 for any single change order or series of related change
orders, do not adversely affect the capacity, efficiency or performance of the
Project and are not the subject of a notice delivered by the Project Monitor to
the effect that such change order does not comply, in the Project Monitor's
opinion, with the foregoing requirements (provided that such requirements shall
not be deemed to have been met solely because of the absence of delivery of such
notice by the Project Monitor).
ARTICLE VII
DEFAULTS
7.01. Events of Default. An Event of Default shall mean the
occurrence or existence of one or more of the following events or conditions
(for any reason, whether voluntary, involuntary or effected or required by Law):
(a) The Borrower shall fail to pay when due principal of any Loan or
any Letter of Credit Reimbursement Obligation, or shall fail to make when
due any required cash collateralization of outstanding Letters of Credit.
(b) Any Loan Party shall fail to pay when due interest on any Loan,
any fees, indemnity or expenses, or any other amount due hereunder or
under any other Loan Document and, if such
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failure is unintentional, such failure shall have continued for a period
of five Business Days.
(c) Any representation or warranty made by any Loan Party in or
pursuant to or in connection with any Loan Document, or deemed made by any
Loan Party in or pursuant to any Loan Document, or any statement made by
any Loan Party in any financial statement, certificate, report (excluding
projections and the Project Budget) or exhibit furnished by any Loan Party
to the Agent or any Lender pursuant to or in connection with any Loan
Document, shall prove to have been false or misleading in any material
respect as of the time when made or deemed made (including by omission of
material information necessary to make such representation, warranty or
statement not misleading).
(d) The Borrower or any Loan Party shall default in the performance
or observance of any covenant contained in Article VI hereof, other than
Section 6.12, or any of the covenants contained in Sections 2.10, 2.16,
5.01(k)(i), 5.09, 5.10, or 5.12 hereof or any Section of the Security
Documents listed on Schedule 7.01(d) hereto.
(e) Any Loan Party shall default in the performance or observance of
any other covenant, agreement or duty under this Agreement or any other
Loan Document and (i) in the case of a default under Section 5.01 hereof
(other than as referred to in subsection (k)(i) thereof) such default
shall have continued for a period of ten days and (ii) in the case of any
other default such default shall have continued for a period of 30 days.
(f) Any Cross-Default Event shall occur with respect to any
Cross-Default Obligation; provided, that if a Cross-Default Event would
have occurred with respect to a Cross-Default Obligation but for the grant
of a waiver or similar indulgence, a Cross-Default Event shall
nevertheless be deemed to have occurred if the Borrower gave or agreed to
give any fee or other monetary compensation for such waiver or indulgence.
As used herein, "Cross-Default Obligation" shall mean any Indebtedness of
the Borrower in excess of $500,000 in aggregate principal amount or of SDI
in excess of $10,000,000 aggregate principal amount, or commitment of any
Person to make a loan or loans to the Borrower in the aggregate principal
amount in excess of $500,000 or to SDI in the aggregate principal amount
in excess of $10,000,000. As used herein, "Cross-Default Event" with
respect to a Cross-Default Obligation shall mean the occurrence of any
default, event or condition which causes or which would permit any Person
or Persons to cause or which would with the giving of notice or the
passage of time or both would permit any Person or Persons to cause all or
any part of such Cross-Default Obligation to become due (by acceleration,
mandatory prepayment or repurchase, or otherwise) before its otherwise
stated maturity or to terminate its commitment to make loans to the
Borrower or SDI, as the case may be or failure to pay all or any part of
such Cross-Default Obligation at its stated maturity.
(g) One or more judgments for the payment of money shall have been
entered against the Borrower or any other Loan Party, which judgment or
judgments exceed $100,000 in the aggregate, and such judgment or judgments
shall have remained undischarged and unstayed for a period of forty-five
consecutive days.
(h) One or more writs or warrants of attachment, garnishment,
execution, distraint or similar process exceeding in value the aggregate
amount of $100,000 shall have been issued against the Borrower or any
other Loan Party or any of their respective properties and shall have
remained undischarged and unstayed for a period of forty-five consecutive
days.
(i) Any Governmental Action now or hereafter made by or with any
Governmental Authority in connection with any Loan Document is not
obtained or shall have ceased to be in full force and effect or shall have
been modified or amended or shall have been held to be illegal or invalid,
unless the same could not have a Material Adverse Effect.
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(j) Any Security Document shall cease to be in full force and
effect, or any Lien created or purported to be created in any Collateral
pursuant to any Security Document shall fail to be valid, enforceable and
perfected Lien in favor of the Agent for the benefit of the Lenders and
the Agent securing the Obligations, prior to all other Liens (except for
Permitted Liens under Section 6.02(b), (e) or (f)), or any Loan Party
shall assert any of the foregoing.
(k) Any Loan Document shall cease to be in full force and effect, or
any Loan Party shall, or shall purport to, terminate, repudiate, declare
voidable or void or otherwise contest, any Loan Document or any obligation
or liability of any Loan Party thereunder.
(l) The Required Lenders shall have determined in good faith that an
event or condition has occurred which could have a Material Adverse
Effect.
(m) Any one or more Pension-Related Events referred to in subsection
(a)(ii) or (b) of the definition of "Pension-Related Event" shall have
occurred; any one or more Pension-Related Events referred to in subsection
(e)(i) of the definition of "Pension-Related Event" shall have occurred
and such event shall not have been cured within fifteen days after the
occurrence thereof; or any one or more other one or more other
Pension-Related Events shall have occurred and the Required Lenders shall
determine in good faith (which determination shall be conclusive) that
such other Pension-Related Events, individually or in the aggregate, could
have a Material Adverse Effect.
(n) Any one or more of the events or conditions set forth in the
following clauses (i) or (ii) shall have occurred in respect of any Loan
Party or any of its Environmental Affiliates, and the Required Lenders
shall determine in good faith that such events or conditions, individually
or in the aggregate, could have a Material Adverse Effect: (i) any past or
present violation of any Environmental Law by such Person, or (ii)
existence of any pending or threatened Environmental Claim against any
such Person, or existence of any past or present acts, omissions, events
or circumstances that could form the basis of any Environmental Claim
against any such Person.
(o) A Change of Control shall have occurred.
(p) The Borrower or any other Person shall default under any of the
Project Agreements and such defaults shall have continued without cure for
such a period as to have a material adverse impact on construction or
operation of the Project or SDI shall default in the performance of its
obligations under the SDI Offtake Agreement or the Administration
Agreement.
(q) The Preliminary Acceptance Date does not occur on or before June
30, 1999 or the Final Acceptance Date does not occur on or before March
31, 2000.
(r) Any action or proceeding for the Condemnation (as defined in the
Mortgage) of all or a substantial portion of the Project shall be
commenced and continue undismissed for a period of forty-five days.
(s) Any of the Project Agreements shall be materially and adversely
amended or shall fail to be in full force and effect if such amendment or
failure could have a Material Adverse Effect.
(t) A proceeding shall have been instituted in respect of the
Borrower, any other Loan Party or SDI,
(i) seeking to have an order for relief entered in respect of
such Person, or seeking a declaration or entailing a finding that
such Person is insolvent or a similar
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declaration or finding, or seeking dissolution, winding-up, charter
revocation or forfeiture, liquidation, reorganization, arrangement,
adjustment, composition or other similar relief with respect to such
Person, its assets or its debts under any Law relating to
bankruptcy, insolvency, relief of debtors or protection of
creditors, termination of legal entities or any other similar Law
now or hereafter in effect, or
(ii) seeking appointment of a receiver, trustee, liquidator,
assignee, sequestrator or other custodian for such Person or for all
or any substantial part of its property
and such proceeding shall result in the entry, making or grant of any such
order for relief, declaration, finding, relief or appointment, or such
proceeding shall remain undismissed, undischarged and unstayed for a
period of sixty consecutive days.
(u) The Borrower or any other Loan Party shall become insolvent;
shall fail to pay, become unable to pay, or state that it is or will be
unable to pay, its debts as they become due; shall voluntarily suspend
transaction of its or his business; shall make a general assignment for
the benefit of creditors; shall institute (or fail to controvert in a
timely and appropriate manner) a proceeding described in Section
7.01(v)(i) hereof, or (whether or not any such proceeding has been
instituted) shall consent to or acquiesce in any such order for relief,
declaration, finding or relief described therein; shall institute or take
corporate action authorizing the institution of (or fail to controvert in
a timely and appropriate manner) a proceeding described in Section
7.01(v)(ii) hereof, or (whether or not any such proceeding has been
instituted) shall consent to or acquiesce in any such appointment or to
the taking of possession by any such custodian of all or any substantial
part of its or his property; shall dissolve, wind-up, revoke or forfeit
its charter (or other constituent documents) or liquidate itself or any
substantial part of its property.
(v) Any party shall obtain an order or decree in any court of
competent jurisdiction enjoining or delaying the construction or operation
of the Project or enjoining or prohibiting the carrying out of any of the
Loan Documents, any of the Project Agreements and such order or decree is
not vacated within thirty days or, in the case of an order or decree
enjoining or delaying the construction of the Project, such order or
decree is not vacated within such period of time as is necessary to permit
the Borrower (without non-concurrence by the Project Monitor) to certify
that it is reasonably to be expected that the Preliminary Acceptance Date
will occur on or before June 30, 1999 or that the Final Acceptance Date
will occur on or before March 31, 2000.
(w) The Borrower shall abandon construction or operation of the
Project.
7.02. Consequences of an Event of Default.
(a) If an Event of Default under Section 7.01 hereof (other than a
Specified Early Period Default and other than an Event of Default specified in
subsection (t) or (u) thereof) shall occur and be continuing or shall exist,
then, in addition to all other rights and remedies which the Agent or any Lender
may have hereunder or under any other Loan Document, at law, in equity or
otherwise, the Lenders shall be under no further obligation to make Loans and
the Issuing Bank shall be under no further obligation to issue Letters of Credit
hereunder, and the Agent shall, upon the written request of the Required
Lenders, by notice to the Borrower, from time to time do any or all of the
following:
(i) Declare the Commitments terminated, whereupon the Commitments
will terminate and any fees hereunder shall be immediately due and payable
without presentment, demand, protest or further notice of any kind, all of
which are hereby waived, and an action therefor shall immediately accrue.
(ii) Declare the unpaid principal amount of any or all of the Loans,
interest accrued thereon and all other Obligations (including without
limitation the obligation to cash
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collateralize outstanding Letters of Credit) to be immediately due and
payable without presentment, demand, protest or further notice of any
kind, all of which are hereby waived, and an action therefor shall
immediately accrue.
(iii) Exercise one or more of the remedies set forth in the Security
Documents.
(b) If an Event of Default specified in subsection (vt or (u) of
Section 7.01 hereof shall occur or exist, then, in addition to all other rights
and remedies which the Agent or any Lender may have hereunder or under any other
Loan Document, at law, in equity or otherwise, the Commitments shall
automatically terminate and the Lenders shall be under no further obligation to
make Loans and the Issuing Bank shall be under no further obligation to issue
Letters of Credit, and the unpaid principal amount of the Loans, interest
accrued thereon and all other Obligations (including without limitation the
obligation to cash collateralize outstanding Letters of Credit) shall become
immediately due and payable without presentment, demand, protest or notice of
any kind, all of which are hereby waived, and an action therefor shall
immediately accrue.
(c) If a Specified Early Period Default shall occur and be
continuing or shall exist, then the Lenders shall be under no obligation to make
Loans and the Issuing Bank shall be under no obligation to issue Letters of
Credit hereunder and, unless the Cure Period, if any, applicable to such
Specified Early Period Default shall not have expired, in addition to all other
rights and remedies which the Agent or any Lender may have hereunder or under
any other Loan Document, at law, in equity or otherwise, the Agent may, and upon
the written request of the Required Lenders shall, by notice to the Borrower,
from time to time do any or all of the following:
(i) Declare the Commitments terminated, whereupon the Commitments
will terminate and any fees hereunder shall be immediately due and payable
without presentment, demand, protest or further notice of any kind, all of
which are hereby waived, and an action therefor shall immediately accrue.
(ii) Declare the unpaid principal amount of all Obligations
(including without limitation the obligation to cash collateralize
outstanding Letters of Credit) to be immediately due and payable without
presentment, demand, protest or further notice of any kind, all of which
are hereby waived, and an action therefor shall immediately accrue.
(iii) Exercise one or more of the remedies set forth in the Security
Documents.
The term "Cure Period" with respect to a Specified Early Period Default shall
mean the period of time (commencing on the date such Specified Early Period
Default occurs or first exists and expiring not later than the earlier to occur
of the last day of the Early Period and the date on which such Specified Early
Period Default is cured in a manner which could not have a Material Adverse
Effect) during which the Borrower proceeds with all due diligence to cure such
Specified Early Period Default and during which the Borrower has provided and
continuously maintained Cash Collateral in an amount at least equal to the
aggregate Letter of Credit Exposure. A Cure Period shall be applicable to a
Specified Early Period Default only if such Specified Early Period Default is
and remains curable by the Borrower in a manner which could not have a Material
Adverse Effect and the Borrower commences its reasonable and diligent efforts to
cure such Specified Early Period Default promptly after becoming aware thereof.
With respect to a Special Specified Early Period Default, the cure referred to
in the second preceding sentence shall include the designation by the Borrower
on a supplement to Schedule 3.26 of additional Required Project Permits which
have been obtained within the applicable Cure Period.
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ARTICLE VIII
THE AGENT
8.01. Appointment. Each Lender Party hereby irrevocably (subject to
the second sentence of Section 8.10 hereof) appoints Mellon to act as Agent for
such Lender Party under this Agreement and the other Loan Documents. Each Lender
Party hereby irrevocably (subject to the second sentence of Section 8.10 hereof)
authorizes the Agent to take such action on behalf of such Lender under the
provisions of this Agreement and the other Loan Documents, and to exercise such
powers and to perform such duties, as are expressly delegated to or required of
the Agent by the terms hereof or thereof, together with such powers as are
reasonably incidental thereto. Mellon hereby agrees to act as Agent on behalf of
the Lender Parties on the terms and conditions set forth in this Agreement and
the other Loan Documents, subject to its right to resign as provided in Section
8.10 hereof. Each Lender Party hereby irrevocably authorizes the Agent to
execute and deliver each of the Loan Documents and to accept delivery of such of
the other Loan Documents as may not require execution by the Agent. Each Lender
Party agrees that the rights and remedies granted to the Agent under the Loan
Documents shall be exercised exclusively by the Agent, and that no Lender Party
shall have any right individually to exercise any such right or remedy, except
to the extent expressly provided herein or therein.
8.02. General Nature of Agent's Duties. Notwithstanding anything to
the contrary elsewhere in this Agreement or in any other Loan Document:
(a) The Agent shall have no duties or responsibilities except those
expressly set forth in this Agreement and the other Loan Documents, and no
implied duties or responsibilities on the part of the Agent shall be read
into this Agreement or any Loan Document or shall otherwise exist.
(b) The duties and responsibilities of the Agent under this
Agreement and the other Loan Documents shall be mechanical and
administrative in nature, and the Agent shall not have a fiduciary
relationship in respect of any Lender Party.
(c) The Agent is and shall be solely the agent of the Lender
Parties. The Agent does not assume, and shall not at any time be deemed to
have, any relationship of agency or trust with or for, or any other duty
or responsibility to, the Borrower or any other Person (except only for
its relationship as agent for, and its express duties and responsibilities
to, the Lender Parties as provided in this Agreement and the other Loan
Documents).
(d) The Agent shall be under no obligation to take any action
hereunder or under any other Loan Document if the Agent believes in good
faith that taking such action may conflict with any Law or any provision
of this Agreement or any other Loan Document, or may require the Agent to
qualify to do business in any jurisdiction where it is not then so
qualified.
8.03. Exercise of Powers. The Agent shall take any action of the
type specified in this Agreement or any other Loan Document as being within the
Agent's rights, powers or discretion in accordance with directions from the
Required Lenders (or, to the extent this Agreement or such Loan Document
expressly requires the direction or consent of some other Person or set of
Persons, then instead in accordance with the directions of such other Person or
set of Persons). In the absence of such directions, the Agent shall have the
authority (but under no circumstances shall be obligated), in its sole
discretion, to take any such action, except to the extent this Agreement or such
Loan Document expressly requires the direction or consent of the Required
Lenders (or some other Person or set of Persons), in which case the Agent shall
not take such action absent such direction or consent. Any action or inaction
pursuant to such direction, discretion or consent shall be binding on all the
Lender Parties. The Agent shall not have any liability to any Person as a result
of (x) the Agent acting or refraining from acting in accordance with the
directions of the Required Lenders (or other applicable Person or set of
Persons), (y) the Agent refraining from acting in the absence of instructions to
act from the Required Lenders (or other
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applicable Person or set of Persons), whether or not the Agent has discretionary
power to take such action, or (z) the Agent taking discretionary action it is
authorized to take under this Section (subject, in the case of this clause (z),
to the provisions of Section 8.04(a) hereof).
8.04. General Exculpatory Provisions. Notwithstanding anything to
the contrary elsewhere in this Agreement or any other Loan Document:
(a) The Agent shall not be liable for any action taken or omitted to
be taken by it under or in connection with this Agreement or any other
Loan Document, unless caused by its own gross negligence or willful
misconduct.
(b) The Agent shall not be responsible for (i) the execution,
delivery, effectiveness, enforceability, genuineness, validity or adequacy
of this Agreement or any other Loan Document, (ii) any recital,
representation, warranty, document, certificate, report or statement in,
provided for in, or received under or in connection with, this Agreement
or any other Loan Document, (iii) any failure of any Loan Party or any
Lender or Issuing Bank to perform any of their respective obligations
under this Agreement or any other Loan Document, (iv) the existence,
validity, enforceability, perfection, recordation, priority, adequacy or
value, now or hereafter, of any Lien or other direct or indirect security
afforded or purported to be afforded by any of the Loan Documents or
otherwise from time to time, (v) caring for, protecting, insuring, or
paying any taxes, charges or assessments with respect to any Collateral or
(vi) whether any Collateral meets any requirement for eligibility, whether
under the requirements of Section 2.16 hereof or otherwise.
(c) The Agent shall not be under any obligation to ascertain,
inquire or give any notice relating to (i) the performance or observance
of any of the terms or conditions of this Agreement or any other Loan
Document on the part of any Loan Party, (ii) the business, operations,
condition (financial or otherwise) or prospects of any Loan Party or any
other Person, or (iii) except to the extent set forth in Section 8.05(f)
hereof, the existence of any Event of Default or Potential Default.
(d) The Agent shall not be under any obligation, either initially or
on a continuing basis, to provide any Lender Party with any notices,
reports or information of any nature, whether in its possession presently
or hereafter, except for such notices, reports and other information
expressly required by this Agreement or any other Loan Document to be
furnished by the Agent to such Lender Party.
8.05. Administration by the Agent.
(a) The Agent may rely upon any notice or other communication of any
nature (written or oral, including but not limited to telephone conversations,
whether or not such notice or other communication is made in a manner permitted
or required by this Agreement or any Loan Document) purportedly made by or on
behalf of the proper party or parties, and the Agent shall not have any duty to
verify the identity or authority of any Person giving such notice or other
communication.
(b) The Agent may consult with legal counsel (including, without
limitation, in-house counsel for the Agent or in-house or other counsel for the
Borrower), independent public accountants and any other experts selected by it
from time to time, and the Agent shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts.
(c) The Agent may conclusively rely upon the truth of the statements
and the correctness of the opinions expressed in any certificates or opinions
furnished to the Agent in accordance with the requirements of this Agreement or
any other Loan Document. Whenever the Agent shall deem
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it necessary or desirable that a matter be proved or established with respect to
any Loan Party or any Lender or Issuing Bank, such matter may be established by
a certificate of the Borrower or such Lender or Issuing Bank, as the case may
be, and the Agent may conclusively rely upon such certificate (unless other
evidence with respect to such matter is specifically prescribed in this
Agreement or another Loan Document).
(d) The Agent may fail or refuse to take any action unless it shall
be indemnified to its satisfaction from time to time against any and all
amounts, liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature which
may be imposed on, incurred by or asserted against the Agent by reason of taking
or continuing to take any such action.
(e) The Agent may perform any of its duties under this Agreement or
any other Loan Document by or through agents or attorneys-in-fact. The Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected and supervised by it with reasonable care.
(f) The Agent shall not be deemed to have any knowledge or notice of
the occurrence of any Event of Default or Potential Default unless the Agent has
received notice from a Lender or the Borrower referring to this Agreement,
describing such Event of Default or Potential Default, and stating that such
notice is a "notice of default". If the Agent receives such a notice, the Agent
shall give prompt notice thereof to each Lender and Issuing Bank.
8.06. Lender Not Relying on Agent or Other Lenders. Each Lender
acknowledges as follows: (a) Neither the Agent nor any other Lender has made any
representations or warranties to it, and no act taken hereafter by the Agent or
any other Lender shall be deemed to constitute any representation or warranty by
the Agent or such other Lender to it. (b) It has, independently and without
reliance upon the Agent or any other Lender, and based upon such documents and
information as it has deemed appropriate, made its own credit and legal analysis
and decision to enter into this Agreement and the other Loan Documents. (c) It
will, independently and without reliance upon the Agent or any other Lender, and
based upon such documents and information as it shall deem appropriate at the
time, make its own decisions to take or not take action under or in connection
with this Agreement and the other Loan Documents.
8.07. Indemnification. Each Lender agrees to reimburse and indemnify
the Agent and its directors, officers, employees and agents (to the extent not
reimbursed by the Borrower and without limitation of the obligations of the
Borrower to do so), Pro Rata, from and against any and all amounts, losses,
liabilities, claims, damages, reasonable expenses, obligations, penalties,
actions, judgments, suits, costs or disbursements of any kind or nature
(including, without limitation, the fees and disbursements of counsel for the
Agent or such other Person in connection with any investigative, administrative
or judicial proceeding commenced or threatened, whether or not the Agent or such
other Person shall be designated a party thereto) that may at any time be
imposed on, incurred by or asserted against the Agent or such other Person as a
result of, or arising out of, or in any way related to or by reason of, this
Agreement, any other Loan Document, any transaction from time to time
contemplated hereby or thereby, or any transaction financed in whole or in part
or directly or indirectly with the proceeds of any Loan or Letter of Credit,
provided that no Lender shall be liable for any portion of such amounts, losses,
liabilities, claims, damages, expenses, obligations, penalties, actions,
judgments, suits, costs or disbursements resulting solely from the gross
negligence or willful misconduct of the Agent or such other Person, as finally
determined by a court of competent jurisdiction. Payments under this Section
shall be due and payable on demand, and to the extent that any Lender fails to
pay any such amount on demand, such amount shall bear interest for each day from
and after the date of demand until paid (before and after judgment) at a rate
per annum (calculated on the basis of a year of 360 days and actual days
elapsed) which shall be equal to 2% plus the Federal Funds Effective Rate.
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8.08. Agent in its Individual Capacity. With respect to its
Commitments and the Obligations owing to it, the Agent shall have the same
rights and powers under this Agreement and each other Loan Document as any other
Lender and may exercise the same as though it were not the Agent, and the terms
"Issuing Bank," "Lenders," "holders of Notes" and like terms shall include the
Agent in its individual capacity as such. The Agent and its affiliates may,
without liability to account, make loans to, accept deposits from, acquire debt
or equity interests in, act as trustee under indentures of, and engage in any
other business with, the Borrower and any stockholder or affiliate of the
Borrower, as though the Agent were not the Agent hereunder.
8.09. Holders of Notes. The Agent may deem and treat the Lender
which is payee of a Note as the owner and holder of such Note for all purposes
hereof unless and until a Transfer Supplement with respect to the assignment or
transfer thereof shall have been filed with the Agent in accordance with Section
9.14 hereof. Any authority, direction or consent of any Person who at the time
of giving such authority, direction or consent is shown in the Register as being
a Lender shall be conclusive and binding on each present and subsequent holder,
transferee or assignee of any Note or Notes payable to such Lender or of any
Note or Notes issued in exchange therefor.
8.10. Successor Agent. The Agent may resign at any time by giving 30
days' prior written notice thereof to the Lenders and the Borrower. The Agent
may be removed by the Required Lenders at any time by giving 30 days' prior
written notice thereof to the Agent, the other Lenders and the Borrower. Upon
any such resignation or removal, the Required Lenders shall have the right to
appoint a successor Agent. If no successor Agent shall have been so appointed
and consented to, and shall have accepted such appointment, within 90 days after
such notice of resignation or removal, then the retiring Agent may, on behalf of
the Lenders, appoint a successor Agent. The resignation or removal of the Agent
shall not become effective until a successor Agent shall have been appointed,
consented to, if such consent is required under the terms hereof, and shall have
accepted such appointment. Each successor Agent shall be a commercial bank or
trust company organized, or having a branch or agency organized, under the laws
of the United States of America or any State thereof and having a combined
capital and surplus of at least $500,000,000. Upon the acceptance by a successor
Agent of its appointment as Agent hereunder, such successor Agent shall
thereupon succeed to and become vested with all the properties, rights, powers,
privileges and duties of the former Agent, without further act, deed or
conveyance. Upon the effective date of resignation or removal of a retiring
Agent, such Agent shall be discharged from its duties under this Agreement and
the other Loan Documents, but the provisions of this Agreement shall inure to
its benefit as to any actions taken or omitted by it while it was Agent under
this Agreement. If and so long as no successor Agent shall have been appointed,
then any notice or other communication required or permitted to be given by the
Agent shall be sufficiently given if given by the Required Lenders, all notices
or other communications required or permitted to be given to the Agent shall be
given to each Lender, and all payments to be made to the Agent shall be made
directly to the Borrower or Lender for whose account such payment is made.
8.11. Additional Agents. If the Agent shall from time to time deem
it necessary or advisable, for its own protection in the performance of its
duties hereunder or in the interest of the Lender Parties, the Agent and the
Borrower shall execute and deliver a supplemental agreement and all other
instruments and agreements necessary or advisable, in the opinion of the Agent,
to constitute another commercial bank or trust company, or one or more other
Persons approved by the Agent, to act as co-agent or separate agent with respect
to any part of the Collateral, with such powers of the Agent as may be provided
in such supplemental agreement, and to vest in such bank, trust company or
Person as such co-Agent or separate agent, as the case may be, any properties,
rights, powers, privileges and duties of the Agent under this Agreement or any
other Loan Document.
8.12. Calculations. The Agent shall not be liable for any
calculation, apportionment or distribution of payments made by it in good faith.
If such calculation, apportionment or distribution is subsequently determined to
have been made in error, the sole recourse of any Lender Party to whom payment
was due but not made shall be to recover from the other Lender Parties any
payment in excess
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of the amount to which they are determined to be entitled or, if the amount due
was not paid by the Borrower, to recover such amount from the Borrower.
8.13. Agent's Fee. The Borrower agrees to pay to the Agent, for its
individual account, a nonrefundable Agent's fee of $100,000 on the date hereof
and, thereafter, $50,000 per annum, payable yearly in advance on each
anniversary of the date hereof.
8.14. Funding by Agent. Unless the Agent shall have been notified in
writing by any Lender not later than 4:00 p.m., Pittsburgh time, on the day
before the day on which Loans are requested by the Borrower to be made that (or,
if the request for a Loan is made by the Borrower on the date such Loan is to be
made, then not later than 11:00 a.m. on such day) such Lender will not make its
ratable share of such Loans, the Agent may assume that such Lender will make its
ratable share of the Loans, and in reliance upon such assumption the Agent may
(but in no circumstances shall be required to) make available to the Borrower a
corresponding amount. If and to the extent that any Lender fails to make such
payment to the Agent on such date, such Lender shall pay such amount on demand
(or, if such Lender fails to pay such amount on demand, the Borrower shall pay
such amount on demand), together with interest, for the Agent's own account, for
each day from and including the date of the Agent's payment to and including the
date of repayment to the Agent (before and after judgment) at the rate or rates
per annum set forth below. All payments to the Agent under this Section shall be
made to the Agent at its Office in Dollars in funds immediately available at
such Office, without set-off, withholding, counterclaim or other deduction of
any nature. If funds deliverable by any Lender to the Agent or by the Agent to
any Lender are not made available when required hereunder, the party which has
not made such funds available shall pay interest to the other at the Federal
Funds Effective Rate for the first three days such funds are not made available
and 2% in excess of the Federal Funds Effective Rate thereafter.
ARTICLE IX
MISCELLANEOUS
9.01. Holidays. Whenever any payment or action to be made or taken
hereunder or under any other Loan Document shall be stated to be due on a day
which is not a Business Day, such payment or action shall be made or taken on
the next following Business Day and such extension of time shall be included in
computing interest or fees, if any, in connection with such payment or action.
9.02. Records. The unpaid principal amount of the Loans owing to
each Lender, the unpaid interest accrued thereon, the interest rate or rates
applicable to such unpaid principal amount, the duration of such applicability,
each Lender's Revolving Credit Committed Amount, and the accrued and unpaid
Revolving Credit Commitment Fees shall at all times be ascertained from the
records of the Agent, which shall be conclusive absent manifest error. The
unpaid Letter of Credit Reimbursement Obligation, the unpaid interest accrued
thereon and the interest rate or rates applicable thereto shall at all times be
ascertained from the records of the Issuing Bank, which shall be conclusive
absent manifest error.
9.03. Amendments and Waivers. Neither this Agreement nor any Loan
Document may be amended, modified or supplemented except in accordance with the
provisions of this Section. The Agent, the Borrower and, if applicable, any
other Loan Party may from time to time amend, modify or supplement the
provisions of this Agreement or any other Loan Document for the purpose of
amending, adding to, or waiving any provisions thereof, releasing any
Collateral, or changing in any manner the rights and duties of the Borrower or
any Lender Party thereunder. Any such amendment, modification, waiver or
supplement made by Borrower and the Agent in accordance with the provisions of
this Section shall be binding upon the Borrower, each Loan Party and each Lender
Party. The Agent shall enter into such amendments, modifications or supplements
from time to time as directed by the Required Lenders, and only as so directed,
provided, that no such amendment, modification or supplement may be made which
will:
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(a) Increase the Revolving Credit Committed Amount of any Lender
over the amount thereof then in effect, or extend the Revolving Credit
Maturity Date, without the written consent of each Lender affected thereby
or increase the Term Loan Committed Amount of any Lender over the amount
thereof then in effect without the written consent of each Lender affected
thereby or amend the proviso to Section 2.17(a) without the consent of all
the Revolving Credit Lenders or create a Replacement Revolver Facility
without the consent of all of the Lenders or;
(b) Reduce the principal amount of or extend the scheduled final
maturity or time for any scheduled payment of principal of any Loan or
Letter of Credit Reimbursement Obligation, or reduce the rate of interest
or extend the time for payment of interest borne by any Loan or Letter of
Credit Reimbursement Obligation, or reduce or postpone the date for
payment of any fees, expenses, indemnities or amounts payable under any
Loan Document, without the written consent of each Lender Party affected
thereby;
(c) Change the definition of "Required Lenders" or amend this
Section 9.03, without the written consent of all the Lenders;
(d) Amend or waive any of the provisions of Article VIII hereof, or
impose additional duties upon the Agent or otherwise adversely affect the
rights, interests or obligations of the Agent, without the written consent
of the Agent;
(e) Release any Collateral or Guaranty Equivalent, other than Liens
on Collateral, the disposition of which is expressly permitted under
Section 6.10 hereof or any other section of the Loan Documents and Liens
on after-acquired Equipment to the extent such Equipment is the subject of
a purchase money security interest permitted under Section 6.02(f) hereof
without the written consent of all the Lenders;
(f) Reduce any Letter of Credit Unreimbursed Draw, or extend the
time for payment by the Borrower of any Letter of Credit Reimbursement
Obligation, without the written consent of each Lender affected thereby;
(g) Amend or waive any of the provisions of Sections 2.17 through
2.26, or impose additional duties upon the Issuing Bank or otherwise
adversely affect the rights, interests or obligations of the Issuing Bank,
without the written consent of the Issuing Bank;
(h) Change any requirement for the consent of all Lenders without
the written consent of all Lenders or change any requirement for the
consent of all of a category of Lenders (that is, Revolving Credit Lenders
or Term Lenders) without the written consent of all Lenders in such
category;
and provided further, that Transfer Supplements may be entered into in the
manner provided in Section 9.14 hereof. Any such amendment, modification or
supplement must be in writing and shall be effective only to the extent set
forth in such writing. Any Event of Default or Potential Default waived or
consented to in any such amendment, modification or supplement shall be deemed
to be cured and not continuing to the extent and for the period set forth in
such waiver or consent, but no such waiver or consent shall extend to any other
or subsequent Event of Default or Potential Default or impair any right
consequent thereto.
9.04. No Implied Waiver; Cumulative Remedies. No course of dealing
and no delay or failure of the Agent or any Lender Party in exercising any
right, power or privilege under this Agreement or any other Loan Document shall
affect any other or future exercise thereof or exercise of any other right,
power or privilege; nor shall any single or partial exercise of any such right,
power or privilege or any abandonment or discontinuance of steps to enforce such
a right, power or privilege preclude any further exercise thereof or of any
other right, power or privilege. The rights and remedies of the Agent
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and the Lender Parties under this Agreement and any other Loan Document are
cumulative and not exclusive of any rights or remedies which the Agent or any
Lender Party would otherwise have hereunder or thereunder, at law, in equity or
otherwise.
9.05. Notices.
(a) Except to the extent otherwise expressly permitted hereunder or
thereunder, all notices, requests, demands, directions and other communications
(collectively "notices") under this Agreement or any Loan Document shall be in
writing (including telexed and telecopied communication) and shall be sent by
first-class mail, or by nationally-recognized overnight courier, or by telex or
telecopier (with confirmation in writing mailed first-class or sent by such an
overnight courier), or by personal delivery. All notices shall be sent to the
applicable party at the address stated on the signature pages hereof or in
accordance with the last unrevoked written direction from such party to the
other parties hereto, in all cases with postage or other charges prepaid. Any
such properly given notice to the Agent or any Lender Party shall be effective
when received. Any such properly given notice to the Borrower shall be effective
on the earliest to occur of receipt, telephone confirmation of receipt of telex
or telecopy communication, one Business Day after delivery to a
nationally-recognized overnight courier, or three Business Days after deposit in
the mail.
(b) Any Lender Party giving any notice to the Borrower or any other
party to a Loan Document shall simultaneously send a copy thereof to the Agent,
and the Agent shall promptly notify the other Lenders of the receipt by it of
any such notice.
(c) The Agent and each Lender Party may rely on any notice (whether
or not such notice is made in a manner permitted or required by this Agreement
or any Loan Document) purportedly made by or on behalf of the Borrower, and
neither the Agent nor any Lender Party shall have any duty to verify the
identity or authority of any Person giving such notice.
9.06. Expenses; Taxes; Indemnity.
(a) The Borrower agrees to pay or cause to be paid and to save the
Agent, the Issuing Bank and each of the Lender Parties harmless against
liability for the payment of all reasonable out-of-pocket costs and expenses
(including but not limited to reasonable fees and expenses of counsel, including
local counsel (but not separate counsel for any Lender other than Mellon in
connection with clause (i) below), auditors, consulting engineers, appraisers,
and all other professional, accounting, evaluation and consulting costs)
incurred by the Agent or any Lender from time to time arising from or relating
to (i) the negotiation, preparation, execution, delivery, administration,
syndication and performance of this Agreement and the other Loan Documents
(including but not limited to collateral management fees and expenses of field
examinations and periodic commercial finance audits of the Borrower), (ii) any
requested amendments, modifications, supplements, waivers or consents (whether
or not ultimately entered into or granted) to this Agreement or any Loan
Document, and (iii) the enforcement or preservation of rights under this
Agreement or any Loan Document (including but not limited to any such costs or
expenses arising from or relating to (A) the creation, perfection or protection
of the Agent's Lien on any Collateral, (B) the protection, collection, lease,
sale, taking possession of, preservation of, or realization on, any Collateral,
including without limitation advances for storage, insurance premiums,
transportation charges, taxes, filing fees and the like, (C) collection or
enforcement of an outstanding Loan, Letter of Credit Reimbursement Obligation or
any other amount owing hereunder or thereunder by the Agent or any Lender Party,
and (D) any litigation, proceeding, dispute, work-out, restructuring or
rescheduling related in any way to this Agreement or the Loan Documents).
(b) The Borrower hereby agrees to pay all stamp, document, transfer,
recording, filing, registration, search, sales and excise fees and taxes and all
similar impositions now or hereafter determined by the Agent or any Lender
Parties to be payable in connection with this Agreement or any other Loan
Documents or any other documents, instruments or transactions pursuant to or in
connection
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herewith or therewith, and the Borrower agrees to save the Agent and each Lender
Party harmless from and against any and all present or future claims,
liabilities or losses with respect to or resulting from any omission to pay or
delay in paying any such fees, taxes or impositions.
(c) The Borrower hereby agrees to reimburse and indemnify each of
the Indemnified Parties from and against any and all losses, liabilities,
claims, damages, expenses, obligations, penalties, actions, judgments, suits,
costs or disbursements of any kind or nature whatsoever (including, without
limitation, the fees and disbursements of counsel for such Indemnified Party in
connection with any investigative, administrative or judicial proceeding
commenced or threatened, whether or not such Indemnified Party shall be
designated a party thereto) that may at any time be imposed on, asserted against
or incurred by such Indemnified Party as a result of, or arising out of, or in
any way related to or by reason of, this Agreement or any other Loan Document,
any transaction from time to time contemplated hereby or thereby, or any
transaction financed in whole or in part or directly or indirectly with the
proceeds of any Loan (and without in any way limiting the generality of the
foregoing, including any violation or breach of any Environmental Law or any
other Law by any Loan Party or any of its Environmental Affiliates; any
Environmental Claim arising out of the management, use, control, ownership or
operation of property by any of such Persons, including all on-site and off-site
activities involving Environmental Concern Materials; any grant of Collateral;
or any exercise by the Agent or any Lender Party of any of its rights or
remedies under this Agreement or any other Loan Document; any breach of any
representation or warranty, covenant or agreement of any Loan Party); but
excluding any such losses, liabilities, claims, damages, expenses, obligations,
penalties, actions, judgments, suits, costs or disbursements to the extent
resulting from the gross negligence or willful misconduct of such Indemnified
Party, as finally determined by a court of competent jurisdiction. If and to the
extent that the foregoing obligations of the Borrower under this subsection (c),
or any other indemnification obligation of the Borrower hereunder or under any
other Loan Document, are unenforceable for any reason, the Borrower hereby
agrees to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable Law.
9.07. Severability. The provisions of this Agreement are intended to
be severable. If any provision of this Agreement shall be held invalid or
unenforceable in whole or in part in any jurisdiction such provision shall, as
to such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without in any manner affecting the validity or enforceability
thereof in any other jurisdiction or the remaining provisions hereof in any
jurisdiction.
9.08. Prior Understandings. This Agreement and the other Loan
Documents supersede all prior and contemporaneous understandings and agreements,
whether written or oral, among the parties hereto relating to the transactions
provided for herein and therein.
9.09. Duration; Survival. All representations and warranties of the
Borrower and each other Loan Party contained herein or in any other in the Loan
Document or made in connection herewith or therewith shall survive the making
of, and shall not be waived by the execution and delivery, of this Agreement or
any other Loan Document, any investigation by or knowledge of the Agent or any
Lender Party, the making of any Loan, the issuance of any Letter of Credit, or
any other event or condition whatever. All covenants and agreements of the
Borrower and each other Loan Party contained herein or in any other Loan
Document shall continue in full force and effect from and after the date hereof
so long as the Borrower may borrow hereunder and until payment in full of all
Obligations. Without limitation, all obligations of the Borrower hereunder or
under any other Loan Document to make payments to or indemnify the Agent or any
Lender shall survive the payment in full of all other Obligations, termination
of the Borrower's right to borrow hereunder, and all other events and conditions
whatever. In addition, all obligations of each Lender to make payments to or
indemnify the Agent or Issuing Bank shall survive the payment in full by the
Borrower of all Obligations, termination of the Borrower's right to borrow
hereunder, and all other events or conditions whatever.
9.10. Counterparts. This Agreement may be executed in any number of
counterparts
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and by the different parties hereto on separate counterparts each of which, when
so executed, shall be deemed an original, but all such counterparts shall
constitute but one and the same instrument.
9.11. Limitation on Payments. The parties hereto intend to conform
to all applicable Laws in effect from time to time limiting the maximum rate of
interest that may be charged or collected. Accordingly, notwithstanding any
other provision hereof or of any other Loan Document, the Borrower shall not be
required to make any payment to or for the account of any Lender, and each
Lender shall refund any payment made by the Borrower, to the extent that such
requirement or such failure to refund would violate or conflict with nonwaivable
provisions of applicable Laws limiting the maximum amount of interest which may
be charged or collected by such Lender.
9.12. Set-Off. The Borrower hereby agrees that, to the fullest
extent permitted by law, if an Event of Default shall have occurred and be
continuing or shall exist and if any Obligation of the Borrower shall be due and
payable (by acceleration or otherwise), each Lender Party shall have the right,
without notice to the Borrower, to set-off against and to appropriate and apply
to such Obligation any indebtedness, liability or obligation of any nature owing
to the Borrower by such Lender Party, including but not limited to all deposits
(whether time or demand, general or special, provisionally credited or finally
credited, whether or not evidenced by a certificate of deposit, and including
without limitation accounts in foreign currencies) now or hereafter maintained
by the Borrower with such Lender Party. Such right shall be absolute and
unconditional in all circumstances and, without limitation, shall exist whether
or not such Lender Party or any other Person shall have given notice or made any
demand to the Borrower or any other Person, whether such indebtedness,
obligation or liability owed to the Borrower is contingent, absolute, matured or
unmatured (it being agreed that such Lender Party may deem such indebtedness,
obligation or liability to be then due and payable at the time of such setoff),
and regardless of the existence or adequacy of any collateral, guaranty or any
other security, right or remedy available to any Lender Party or any other
Person. The Borrower hereby agrees that, to the fullest extent permitted by law,
any Participant and any branch, subsidiary or affiliate of any Lender Party or
any Participant shall have the same rights of set-off as a Lender Party as
provided in this Section (regardless of whether such Participant, branch,
subsidiary or affiliate would otherwise be deemed in privity with or a direct
creditor of the Borrower). The rights provided by this Section are in addition
to all other rights of set-off and banker's lien and all other rights and
remedies which any Lender Party (or any such Participant, branch, subsidiary or
affiliate) may otherwise have under this Agreement, any other Loan Document, at
law or in equity, or otherwise, and nothing in this Agreement or any Loan
Document shall be deemed a waiver or prohibition of or restriction on the rights
of set-off or bankers' lien of any such Person.
9.13. Sharing of Collections. The Lenders hereby agree among
themselves that if any Lender shall receive (by voluntary payment, realization
upon security, set-off or from any other source) any amount on account of the
Loans, interest thereon, or any other Obligation contemplated by this Agreement
or the other Loan Documents to be made by the Borrower pro rata to all Lenders
(or pro rata to holders of Notes of a particular series or to another class of
Lenders) in greater proportion than any such amount received by any other
applicable Lender, then the Lender receiving such proportionately greater
payment shall notify each other Lender and the Agent of such receipt, and
equitable adjustment will be made in the manner stated in this Section so that,
in effect, all such excess amounts will be shared ratably among all of the
applicable Lenders. The Lender receiving such excess amount shall purchase
(which it shall be deemed to have done simultaneously upon the receipt of such
excess amount) for cash from the other applicable Lenders a participation in the
applicable Obligations owed to such other Lenders in such amount as shall result
in a ratable sharing by all applicable Lenders of such excess amount (and to
such extent the receiving Lender shall be a Participant). If all or any portion
of such excess amount is thereafter recovered from the Lender making such
purchase, such purchase shall be rescinded and the purchase price restored to
the extent of such recovery, together with interest or other amounts, if any,
required by Law to be paid by the Lender making such purchase. The Borrower
hereby consents to and confirms the foregoing arrangements. Each Participant
shall be bound by this Section as fully as if it were a Lender hereunder.
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9.14. Successors and Assigns; Participations; Assignments.
(a) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Borrower, the Lender Parties, all future holders of
the Notes, the Agent and their respective successors and assigns, except that
the Borrower may not assign or transfer any of its rights hereunder or interests
herein without the prior written consent of all the Lenders and the Agent, and
any purported assignment without such consent shall be void.
(b) Participations. Any Lender may, in the ordinary course of its
commercial banking business and in accordance with applicable Law, at any time
sell participations to one or more commercial banks or other Persons (each a
"Participant") in a portion of its rights and obligations under this Agreement
and the other Loan Documents (including, without limitation, all or a portion of
its Commitments and the Loans owing to it and any Note held by it); provided,
that:
(i) any such participation sold to a Participant which is not a
Lender, an affiliate of a Lender or a Federal Reserve Bank shall be made
only with the consent (which in each case shall not be unreasonably
withheld) of the Borrower and the Agent, unless an Event of Default has
occurred and is continuing, in which case the consent of the Borrower
shall not be required,
(ii) any such Lender's obligations under this Agreement and the
other Loan Documents shall remain unchanged,
(iii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations,
(iv) the parties hereto shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations
under this Agreement and each of the other Loan Documents,
(v) such Participant shall be bound by the provisions of Section
9.13 hereof, and the Lender selling such participation shall obtain from
such Participant a written confirmation of its agreement to be so bound,
(vi) no Participant (unless such Participant is an affiliate of such
Lender, or is itself a Lender) shall be entitled to require such Lender to
take or refrain from taking action under this Agreement or under any other
Loan Document, except that such Lender may agree with such Participant
that such Lender will not, without such Participant's consent, take action
of the type described in subsections (a), (b), (c) or (e) of Section 9.03
hereof, and
The Borrower agrees that any such Participant shall be entitled to the benefits
of Sections 2.13, 2.14, 2.22 and 9.06 with respect to its participation in the
Commitments and the Loans and Letters of Credit outstanding from time to time;
provided, that no such Participant shall be entitled to receive any greater
amount pursuant to such Sections than the transferor Lender would have been
entitled to receive in respect of the amount of the participation transferred to
such Participant had no such transfer occurred.
(c) Assignments. Any Lender may, in the ordinary course of its
commercial banking business and in accordance with applicable Law, at any time
assign all or a portion of its rights and obligations under this Agreement and
the other Loan Documents (including, without limitation, all or any portion of
its Commitments and Loans owing to it and any Note held by it) to any Lender,
any affiliate of a Lender or to one or more additional commercial banks or other
Persons (each a "Purchasing Lender"); provided, that
(i) any such assignment to a Purchasing Lender which is not a Lender
or an affiliate of a Lender shall be made only with the consent (which in
each case shall not be
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unreasonably withheld) of the Borrower, the Agent and, if the Purchasing
Lender is to be a Revolving Credit Lender, the Issuing Bank, unless an
Event of Default has occurred and is continuing or exists, in which case
the consent of the Borrower shall not be required,
(ii) if a Lender makes such an assignment of less than all of its
then remaining rights and obligations under this Agreement and the other
Loan Documents, such assignment shall be in a minimum aggregate principal
amount of $5,000,000 of the Commitments and Loans then outstanding,
(iii) each such assignment shall be of a constant, and not a
varying, percentage of each Commitment of the transferor Lender and of all
of the transferor Lender's rights and obligations under this Agreement and
the other Loan Documents, and
(iv) each such assignment shall be made pursuant to a Transfer
Supplement in substantially the form of Exhibit C to this Agreement, duly
completed (a "Transfer Supplement").
In order to effect any such assignment, the transferor Lender and the Purchasing
Lender shall execute and deliver to the Agent a duly completed Transfer
Supplement (including the consents required by clause (i) of the preceding
sentence) with respect to such assignment, together with any Note or Notes
subject to such assignment (the "Transferor Lender Notes") and a processing and
recording fee of $2,500; and, upon receipt thereof, the Agent shall accept such
Transfer Supplement. Upon receipt of the Purchase Price Receipt Notice pursuant
to such Transfer Supplement, the Agent shall record such acceptance in the
Register. Upon such execution, delivery, acceptance and recording, from and
after the close of business at the Agent's Office on the Transfer Effective Date
specified in such Transfer Supplement
(x) the Purchasing Lender shall be a party hereto and, to the extent
provided in such Transfer Supplement, shall have the rights and
obligations of a Lender hereunder, and
(y) the transferor Lender thereunder shall be released from its
obligations under this Agreement to the extent so transferred (and, in the
case of a Transfer Supplement covering all or the remaining portion of a
transferor Lender's rights and obligations under this Agreement, such
transferor Lender shall cease to be a party to this Agreement) from and
after the Transfer Effective Date.
On or prior to the Transfer Effective Date specified in an Transfer Supplement,
the Borrower, at its expense, shall execute and deliver to the Agent (for
delivery to the Purchasing Lender) new Notes evidencing such Purchasing Lender's
assigned Commitments or Loans and (for delivery to the transferor Lender)
replacement Notes in the principal amount of the Loans or Commitments retained
by the transferor Lender (such Notes to be in exchange for, but not in payment
of, those Notes then held by such transferor Lender). Each such Note shall be
dated the date and be substantially in the form of the predecessor Note. The
Agent shall xxxx the predecessor Notes "exchanged" and deliver them to the
Borrower. Accrued interest and accrued fees shall be paid to the Purchasing
Lender at the same time or times provided in the predecessor Notes and this
Agreement.
(d) Register. The Agent shall maintain at its office a copy of each
Transfer Supplement delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Lenders and the Commitment of, and
principal amount of the Loans owing to, each Lender from time to time. The
entries in the Register shall be conclusive absent manifest error and the
Borrower, the Agent and the Lenders may treat each person whose name is recorded
in the Register as a Lender hereunder for all purposes of the Agreement. The
Register shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
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(e) Financial and Other Information. The Borrower authorizes the
Agent and each Lender to disclose to any Participant or Purchasing Lender (each,
a "transferee") and any prospective transferee any and all financial and other
information in such Person's possession concerning the Borrower, any Loan Party
and their affiliates which has been or may be delivered to such Person by or on
behalf of the Borrower in connection with this Agreement or any other Loan
Document or such Person's credit evaluation of the Borrower and affiliates. At
the request of any Lender, the Borrower, at the Borrower's expense, shall
provide to each prospective transferee the conformed copies of documents
referred to in Section 4 of the form of Transfer Supplement.
9.15. Confidentiality. Each of the Agent and the Lenders agree to
keep confidential any information relating to the Borrower or to the Project
received by it pursuant to or in connection with this Agreement which is (a)
trade information which the Agent and the Lenders reasonably expect that the
Borrower would want to keep confidential, (b) technical information with respect
to the equipment or operations of the Project, (c) information contained in the
contracts described in Schedule 9.15 hereto, (d) financial or environmental
information or (e) information which is clearly marked "CONFIDENTIAL"; provided,
however, that this Section 9.15 shall not be construed to prevent the Agent or
any Lender from disclosing such information (i) to any Affiliate that shall
agree to be bound by this obligation of confidentiality, (ii) upon the order of
any court or administrative agency of competent jurisdiction, (iii) upon the
request or demand of any regulatory agency or authority having jurisdiction over
the Agent or such Lender (whether or not such request or demand has the force of
law), (iv) that has been publicly disclosed, other than from a breach of this
provision by the Agent or any Lender, (v) that has been obtained from any person
that is neither a party to this Agreement nor an Affiliate of any such party,
(vi) in connection with the exercise of any right or remedy hereunder or under
any other Loan Document, (vii) as expressly contemplated by this Agreement or
any other Loan Document or (viii) to any prospective purchaser of all or any
part of the interest of any Lender which shall agree to be bound by the
obligation of confidentiality in this Agreement or the other Loan Documents if
such prospective purchaser is a financial institution or has been consented to
by the Borrower, which consent will not be withheld if such purchaser is not a
competitor of the Borrower or an Affiliate of a competitor of the Borrower. The
Borrower acknowledges that the Project Monitor and agents of the Agent and the
Lenders may visit the Project Site and collect information relating to the
Project subject to the terms of this Section 9.15.
9.16. Governing Law; Submission to Jurisdiction: Waiver of Jury
Trial; Limitation of Liability.
(a) Governing Law. THIS AGREEMENT AND ALL OTHER LOAN DOCUMENTS
(EXCEPT TO THE EXTENT, IF ANY, OTHERWISE EXPRESSLY STATED IN SUCH OTHER LOAN
DOCUMENTS) SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CHOICE OF LAW PRINCIPLES.
(b) Certain Waivers. THE BORROWER HEREBY IRREVOCABLY AND
UNCONDITIONALLY:
(i) AGREES THAT ANY ACTION, SUIT OR PROCEEDING BY ANY PERSON ARISING
FROM OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY
STATEMENT, COURSE OF CONDUCT, ACT, OMISSION, OR EVENT OCCURRING IN
CONNECTION HEREWITH OR THEREWITH (COLLECTIVELY, "RELATED LITIGATION") MAY
BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION SITTING
IN ALLEGHENY COUNTY, PENNSYLVANIA OR NEW YORK COUNTY, NEW YORK, SUBMITS TO
THE JURISDICTION OF SUCH COURTS, AND TO THE FULLEST EXTENT PERMITTED BY
LAW AGREES THAT IT WILL NOT BRING ANY RELATED LITIGATION IN ANY OTHER
FORUM (BUT NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT OR ANY
LENDER
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PARTY TO BRING ANY ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM);
(ii) WAIVES ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE
LAYING OF VENUE OF ANY RELATED LITIGATION BROUGHT IN ANY SUCH COURT,
WAIVES ANY CLAIM THAT ANY SUCH RELATED LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM, AND WAIVES ANY RIGHT TO OBJECT, WITH RESPECT TO ANY
RELATED LITIGATION BROUGHT IN ANY SUCH COURT, THAT SUCH COURT DOES NOT
HAVE JURISDICTION OVER THE BORROWER;
(iii) CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT OR
OTHER LEGAL PROCESS IN ANY RELATED LITIGATION BY REGISTERED OR CERTIFIED
U.S. MAIL, POSTAGE PREPAID, TO THE BORROWER AT THE ADDRESS FOR NOTICES
DESCRIBED IN SECTION 9.05 HEREOF, AND CONSENTS AND AGREES THAT SUCH
SERVICE SHALL CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE (BUT
NOTHING HEREIN SHALL AFFECT THE VALIDITY OR EFFECTIVENESS OF PROCESS
SERVED IN ANY OTHER MANNER PERMITTED BY LAW); AND
(iv) WAIVES THE RIGHT TO TRIAL BY JURY IN ANY RELATED LITIGATION.
(c) Limitation of Liability. TO THE FULLEST EXTENT PERMITTED BY LAW,
NO CLAIM MAY BE MADE BY THE BORROWER AGAINST THE AGENT, ANY LENDER PARTY OR ANY
AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE, ATTORNEY OR AGENT OF ANY OF THEM FOR ANY
SPECIAL, INCIDENTAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES IN RESPECT OF
ANY CLAIM ARISING FROM OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
OR ANY STATEMENT, COURSE OF CONDUCT, ACT, OMISSION, OR EVENT OCCURRING IN
CONNECTION HEREWITH OR THEREWITH (WHETHER FOR BREACH OF CONTRACT, TORT OR ANY
OTHER THEORY OF LIABILITY). THE BORROWER HEREBY WAIVES, RELEASES AND AGREES NOT
TO XXX UPON ANY CLAIM FOR ANY SUCH DAMAGES, WHETHER SUCH CLAIM PRESENTLY EXISTS
OR ARISES HEREAFTER AND WHETHER OR NOT SUCH CLAIM IS KNOWN OR SUSPECTED TO EXIST
IN ITS FAVOR. THIS PARAGRAPH (C) SHALL NOT LIMIT ANY RIGHTS OF THE BORROWER
ARISING SOLELY OUT OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
-91-
102
IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly
authorized, have executed and delivered this Agreement as of the date first
above written.
IRON DYNAMICS, INC.
/s/ Xxxxx X. Xxxxxxxxxxxx
By ______________________________________
Title: Vice President
Address for Notices:
______________________________________
______________________________________
______________________________________
Attn: ___________________________________
Telephone: (317)_________________________
Telecopier: (317)________________________
MELLON BANK, N.A., individually and as
Agent
/s/ Xxxxx X. Xxxxxxx
By ______________________________________
Title:
Initial Revolving Credit
Committed Amount: $5,000,000
Revolving Credit
Commitment Percentage: 50.00%
Term Loan
Committed Amount: $35,000,000
Term Loan
Commitment Percentage: 63.64%
Address for Notices:
Xxx Xxxxxx Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Attn: Xxxxx X. Xxxxxxx
Telephone: 000-000-0000
Telecopier: 000-000-0000
-92-
103
COMERICA BANK
/s/ Xxxxxxx X. Xxxxxxx
By ______________________________________
Title:
Initial Revolving Credit
Committed Amount: $-0-
Revolving Credit
Commitment Percentage: -0-%
Term Loan
Committed Amount: $10,000,000
Term Loan
Commitment Percentage: 18.18%
Address for Notices:
000 Xxxxxxxx Xxxxxx
XX0000
Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx
Telephone: 000-000-0000
Telecopier: 000-000-0000
000
XXXXXXXX XXXX XXXX XX XXXXXXX
/s/ Xxxx Xxxxxx
By ______________________________________
Title:
Initial Revolving Credit
Committed Amount: $-0-
Revolving Credit
Commitment Percentage: -0-%
Term Loan
Committed Amount: $5,000,000
Term Loan
Commitment Percentage: 9.09%
Address for Notices:
000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxx
Telephone: 000-000-0000
Telecopier: 000-000-0000
000
XXXX XXXXX NATIONAL BANK
/s/ Xxxxxxx X. Xxxxxx XX
By ______________________________________
Title:
Initial Revolving Credit
Committed Amount: $5,000,000
Revolving Credit
Commitment Percentage: 50.00%
Term Loan
Committed Amount: $5,000,000
Term Loan
Commitment Percentage: 9.09%
Address for Notices:
000 Xxxx Xxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx XX
Telephone: 000-000-0000
Telecopier: 000-000-0000
