CREDIT AGREEMENT
CREDIT AGREEMENT dated as of July 9, 1998 between ACCURIDE DE
MEXICO, S.A. DE C.V., a corporation organized and existing under the laws of
the United Mexican States (the "BORROWER"), and CITIBANK MEXICO, S.A., GRUPO
FINANCIERO CITIBANK, a multiple banking institution organized and existing
under the laws of the United Mexican States ("CITIBANK MEXICO"), as lender
(the "LENDER").
PRELIMINARY STATEMENTS:
(1) The Borrower has requested that the Lender make available to
the Borrower the Facilities (as hereinafter defined) to finance the
construction of the Plant (as hereinafter defined), to pay transaction fees
and expenses, to refinance certain Existing Debt and to provide working
capital for general corporate purposes for the Borrower.
(2) The Lender is willing to provide the Facilities upon terms and
conditions provided herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. CERTAIN DEFINED TERMS. As used in this Agreement,
the following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms
defined):
"ACCURIDE" means Accuride Corporation, a Delaware corporation.
"ADVANCE" means a Term Advance or a Working Capital Advance.
"AFFILIATE" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common
control with such Person or is a director or officer of such Person.
For purposes of this definition, the term "control" (including the terms
"controlling," "controlled by" and "under common control with") of a
Person means the possession, direct or indirect, of the power to vote
10% or more of the Voting Stock of such Person or to direct or cause the
direction of the management and policies of such Person, whether through
the ownership of Voting Stock, by contract or otherwise.
"ANNUAL OPERATING BUDGET" means for any fiscal year of the
Borrower, the operating budget for such fiscal year prepared by the
Borrower.
"APPLICABLE LAWS" means any applicable federal, state, local or
municipal laws, rules, orders, judgments, regulations, ordinances,
codes, injunctions, writs or decrees of any Governmental Authority
(including any binding determination of an arbitrator or a court or
other Governmental Authority) of Mexico.
"APPLICABLE MARGIN" means
(a) through December 31, 1998, (i) 4.00% per annum for each
Term Advance and (ii) 2.75% per annum for each Working Capital Advance,
and
(b) thereafter, a percentage per annum for each Term Advance
and each Working Capital Advance, respectively, determined with
reference to the Leverage Ratio as set forth below:
WORKING
LEVERAGE RATIO TERM ADVANCE CAPITAL ADVANCE
-------------- ------------ ---------------
greater than or equal to 5.0 to 1 4.25% 3.00%
less that 5.0 to 1 and greater than 4.00% 2.75%
or equal to 4.0 to 1
less than 4.0 to 1 and greater than 3.50% 2.50%
or equal to 3.5 to 1
less than 3.5 to 1 and greater than 3.25% 2.25%
or equal to 3.0 to 1
less than 3.0 to 1 and greater than 3.00% 2.00%
or equal to 2.5 to 1
less than 2.5 to 1 and greater than 2.70% 1.75%
or equal to 2.0 to 1
less than 2.0 to 1 2.50% 1.50%
The Applicable Margin for each Advance shall be determined under
and for purposes of clause (b) above by reference to the Leverage Ratio
in effect on the first day of each Interest Period for such Advance.
Changes in the Applicable Margin resulting from changes in the Leverage
Ratio shall become effective (for purposes of this definition only, the
date of such effectiveness being the "EFFECTIVE DATE") as of the first
day following the last day of the most recent Fiscal Quarter or Fiscal
Year for which (A) financial statements are delivered to the Lender
pursuant to Section 5.03(b) or (c) and (B) a certificate of the chief
financial officer of the Borrower is delivered by the Borrower to the
Lender setting forth, with respect to such financial statements, the
then-applicable Leverage Ratio and the basis of the calculations
therefor, and shall remain in effect until
the next change to be effected pursuant to this definition; PROVIDED
that (i) if the Borrower shall have made any payments in respect of
interest during the period (for purposes of this definition only, the
"INTERIM PERIOD") from and including the Effective Date to the day on
which any change in the Leverage Ratio is determined as provided above,
then the amount of the next such payment of interest due by the Borrower
on or after such day shall be increased or decreased by an amount equal
to any underpayment or overpayment so made by the Borrower during such
Interim Period and (ii) each determination of the Leverage Ratio
pursuant to this definition shall be made with respect to the
Measurement Period ending at the end of the fiscal period covered by the
relevant financial statements.
"BANKRUPTCY" means, as to any Person: (a) entry by any
Governmental Authority of any jurisdiction or a court having
jurisdiction in the premises of (i) a decree or order for relief in
respect of such Person in an involuntary case or proceeding under any
applicable bankruptcy, insolvency, reorganization, SUSPENSION DE PAGOS
or other similar law or (ii) an involuntary or contested decree or order
adjudging such Person a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, SUSPENSION DE PAGOS,
arrangement, adjustment or composition of or in respect of such Person
under any Applicable Law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of
such Person or of any substantial part of the property of such Person,
or ordering the winding up or liquidation of the affairs of such Person;
or (b) commencement by a Person of a voluntary case or proceeding under
any applicable bankruptcy, insolvency, reorganization, SUSPENSION DE
PAGOS or other similar law or of any other case or proceeding to be
adjudicated a bankrupt or insolvent, or the consent by such Person to
the entry of a decree or order for relief in respect of such Person in a
involuntary case or proceeding under any applicable bankruptcy,
insolvency, reorganization, SUSPENSION DE PAGOS or other similar law or
to the commencement of any bankruptcy or insolvency case or proceeding
against such Person, or the filing by such Person of a petition or
answer or consent seeking reorganization or relief under any applicable
law; or consent by such Person to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official of such
Person or of any substantial part of the property of such Person, or the
making by such Person of an assignment for the benefit of creditors, or
the admission by such Person in writing of its inability to pay its
debts generally as they become due, or the taking of corporate action by
such Person in furtherance of any such action.
"BASE CASE PROJECTIONS" means the financial projections for the
Borrower delivered by the Borrower to the Lender on the date of the
Initial Extension of Credit.
"BLUEPRINTS" means the drawings and specifications for the
development and construction of the manufacturing and assembly portions
of the Plant, prepared by Docsa and approved by the Lender, the
Independent Engineer and, when necessary, each appropriate Governmental
Authority, all of which are more particularly described in Schedule
1.01(a) hereto, and all additions thereto and amendments and
modifications therefor approved by the Lender as required by Section
5.02(h) or (l).
"BORROWER" has the meaning specified in the recital of parties to
this Agreement.
"BORROWER'S ACCOUNT" means the account of the Borrower maintained
by the Borrower with Citibank at its office at 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Account No. 00000000.
"BUSINESS DAY" means a day of the year on which banks are not
required or authorized to close in New York, New York or Mexico, D.F.,
Mexico, or, with respect to any Eurodollar Rate Advance, a day of the
year on which dealings in deposits denominated in Dollars are carried on
in the London interbank market.
"CAPITAL BUDGET" means, for any fiscal year of the Borrower, the
budget prepared by the Borrower for Capital Expenditures identified as
such for such fiscal year.
"CAPITAL EXPENDITURES" means, for any Person for any period, the
sum, without duplication, of all expenditures made, directly or
indirectly (whether paid in cash or accrued as liabilities and including
in all events all amounts expended or capitalized under Capitalized
Leases, but excluding any amounts representing capitalized interest), by
such Person or any of its Subsidiaries during such period for equipment,
fixed assets, real property or improvements, or for replacements or
substitutions therefor or additions thereto, that have been or should
be, in accordance with GAAP, reflected as additions to property, plant
or equipment on a Consolidated balance sheet of such Person, provided
that Capital Expenditures shall not include (without duplication) (a)
any expenditures made in connection with the replacement, substitution,
repair or restoration of any assets to the extent financed (i) with
insurance proceeds received by the Borrower or any of its Subsidiaries
on account of the loss of, or any damage to, the assets being replaced,
substituted for, repaired or restored, or (ii) with the proceeds of any
compensation awarded to the Borrower or any of its Subsidiaries as a
result of the taking, by eminent domain or condemnation, of the assets
being replaced or substituted for, (b) any expenditures for the purchase
price of any equipment that is purchased simultaneously with the
trade-in of any existing equipment by the Borrower or any of its
Subsidiaries to the extent that the gross amount of such purchase price
is reduced by any credit granted by the seller of such equipment for the
equipment being traded in, (c) any expenditures for the purchase price
of any property, plant or equipment purchased within one year of the
consummation of any sale, lease, transfer or other disposition of any
asset of the Borrower or any of its Subsidiaries in accordance with the
provisions of Section 5.02(d) to the extent purchased with the proceeds
of such sale, lease, transfer or other disposition, (d) Investments made
pursuant to Section 5.02(e) or (e) any acquisition by the Borrower or
any of it Subsidiaries (by purchase or otherwise) of all or
substantially all of the business, property or fixed assets of, or the
stock or other evidence of beneficial ownership of, any Subsidiary or
any division, business unit or line of business of any Subsidiary in
accordance with Section 5.02(c).
"CAPITALIZED LEASES" means all leases that have been or should be,
in accordance with GAAP, recorded as capitalized or financial leases.
"CITIBANK" means Citibank, N.A., a national banking association
organized and existing under the laws of the United States of America.
"CITIBANK MEXICO" has the meaning specified in the recital of
parties to this Agreement.
"COLLATERAL" means all "Collateral" referred to in the Collateral
Documents and all other property that is or is intended to be subject to
any Lien in favor of the Lender.
"COLLATERAL DOCUMENTS" means the Industrial Mortgage, the Pledge
Agreement and any other agreement that creates or purports to create a
Lien in favor of the Lender to secure the Obligations of the Borrower
hereunder and under the Notes.
"COLLATERAL GRANTOR" means each of the Borrower, Accuride and IASA.
"COMMITMENT" means a Term Commitment or a Working Capital
Commitment.
"COMPLETION" has the meaning specified in Section 1.01 of the
Completion Guaranty.
"COMPLETION DATE" has the meaning specified in Section 1.01 of the
Completion Guaranty.
"COMPLETION DEFAULT" has the meaning specified in Section 6.01 of
the Completion Guaranty.
"COMPLETION GUARANTY" has the meaning specified in Section
3.01(f)(vi).
"CONFIDENTIAL INFORMATION" means information that the Borrower
furnishes to the Lender in a writing designated as confidential, but
does not include any such information that is or becomes generally
available to the public or that is or becomes available to the Lender
from a source other than the Borrower, except with regards to such
information from a source actually known by the Lender to have an
obligation not to disclose such information.
"CONSOLIDATED" refers to the consolidation of accounts in
accordance with GAAP.
"CONSTRUCTION BUDGET" means the budget of Construction Costs
delivered by the Borrower to the Lender on the date of the Initial
Extension of Credit.
"CONSTRUCTION COSTS" means the following costs and expenses
incurred by or on behalf of the Borrower in connection with the
construction, development, design,
engineering, acquisition, financing, outfitting, testing, start-up and
completion of the Plant, including the cost of Plant equipment and each
of the following: (a) all amounts payable by the Borrower to its
contractors, suppliers and subcontractors pursuant to the Construction
Documents; (b) the costs and expenses of all engineering, legal,
accounting and other professional advisers properly incurred by the
Borrower in connection with and attributable to the Plant; (c) costs of
Required Insurance; (d) Operating Costs incurred during the construction
period; (e) working capital in an amount not to exceed $7,500,000; and
(f) value-added tax, other taxes and customs charges payable in respect
of any of the above.
"CONSTRUCTION DOCUMENTS" means the Blueprints, the Timetable,
building and environmental permits, contracts with Docsa and any other
builders or contractors for the construction of the Plant, and copies of
all payments made to Docsa.
"COST CERTIFICATE" means, with respect to a Term Advance made, a
certificate of the President or another Senior Officer of the Borrower,
substantially in the form of Exhibit D hereto.
"DEBT" of any Person means, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all Obligations of
such Person for the deferred purchase price of property or services, (c)
all Obligations of such Person evidenced by notes, bonds, debentures or
other similar instruments, (d) all Obligations of such Person created or
arising under any conditional sale or other title retention agreement
with respect to property acquired by such Person (even though the rights
and remedies of the seller or lender under such agreement in the event
of default are limited to repossession or sale of such property), (e)
all Obligations of such Person as lessee under Capitalized Leases, (f)
all Obligations, contingent or otherwise, of such Person under
acceptance, letter of credit or similar facilities, (g) all Obligations
of such Person to purchase, redeem, retire, defease or otherwise make
any payment in respect of any capital stock of or other ownership or
profit interest in such Person or any other Person or any warrants,
rights or options to acquire such capital stock, (h) all Debt of others
referred to in clauses (a) through (g) above or clause (i) below
guaranteed directly or indirectly in any manner by such Person, or in
effect guaranteed directly or indirectly by such Person through an
agreement (A) to pay or purchase such Debt or to advance or supply funds
for the payment or purchase of such Debt, (B) to purchase, sell or lease
(as lessee or lessor) property, or to purchase or sell services,
primarily for the purpose of enabling the debtor to make payment of such
Debt or to assure the holder of such Debt against loss, (C) to supply
funds to or in any other manner invest in the debtor (including any
agreement to pay for property or services irrespective of whether such
property is received or such services are rendered) or (D) otherwise to
assure a creditor against loss, and (i) all Debt referred to in clauses
(a) through (g) above of another Person secured by (or for which the
holder of such Debt has an existing right, contingent or otherwise, to
be secured by) any Lien on property (including, without limitation,
accounts and contract rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such Debt.
"DEFAULT" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
"DOCSA" means Constructora Docsa, S.A. de C.V.
"DOLLARS" and "$" each means lawful money of the United States.
"DOLLAR FUNDING RATE" means, for any Interest Period for any Dollar
Funding Rate Advance, an interest rate per annum (rounded upward to the
nearest 1/8 of 1% per annum, if such rate is not such a multiple) equal
to the cost of funds rate for Dollar-denominated passive operations,
commonly referred to as the CCP-Dollars rate, as published in the DIARIO
OFFICIAL DE LA FEDERACION by the Banco de Mexico, in effect on the first
date of such Interest Period, or, if such rate is not available, any
replacement therefor promulgated by the Banco de Mexico (PROVIDED that
such replacement accurately reflects the Lender's cost of making,
funding or maintaining such Advance for such Interest Period for such
Advance), in effect on the first day of such Interest Period.
"DOLLAR FUNDING RATE ADVANCE" means any Advance that is either (i)
converted from a Eurodollar Rate Advance into a Dollar Funding Rate
Advance pursuant to Section 2.08(c) or (ii) made in Dollars at any time
after the obligation of the Lender to make Eurodollar Rate Advances is
suspended pursuant to Section 2.08(c).
"EBITDA" means, for any period, the sum, determined on a
Consolidated basis, of the amounts for such period of (a) Net Income
plus (b) to the extent included in computing Net Income, the sum
(without duplication) of (i) Interest Expense, (ii) taxes computed on
the basis of income, (iii) depreciation expense, (iv) amortization
expense (including amortization of deferred financing fees), (v) any
expenses or charges incurred in connection with any issuance of debt or
equity securities (including upfront fees payable in respect of bank
facilities), (vi) any fees and expenses related to Investments permitted
pursuant to Section 5.02(e) of this Agreement, (vii) losses on asset
sales, (viii) any deduction for minority interest expense, (ix) fees or
expenses incurred or paid by the Borrower or any of its Susbsidiaries in
connection with the transactions contemplated hereby, (x) any other
non-cash charges, (xi) any other non-recurring charges, (xii) currency
losses and (xiii) additional expenses in connection with labor
disruptions or the potential therefor, minus (c) to the extent included
in computing Net Income the sum, without duplication, of the amounts for
such period of (i) any non-recurring gains, (ii) all non-cash gains,
(iii) gains on asset sales, and (iv) currency gains, in each case of the
Borrower and its Subsidiaries, determined in accordance with GAAP for
such period, provided that, for purposes of such calculation, in the
case of any Subsidiary acquired by the Borrower or any of its
Subsidiaries following the commencement of any such period, amounts
attributable to such Subsidiary shall be calculated as though such
Subsidiary had been acquired on the first day of such period.
"ENVIRONMENTAL ACTION" means any action, suit, demand, demand
letter, claim, notice of non-compliance or violation, notice of
liability or potential liability, investigation, proceeding, consent
order or consent agreement relating in any way to any Environmental Law,
any Environmental Permit or Hazardous Material or arising from alleged
injury or threat to health, safety or the environment, including,
without limitation, (a) by any Governmental Authority having
jurisdiction over enforcement, cleanup, removal, response, remedial or
other actions or damages and (b) by any such Governmental Authority or
by any third party for damages, contribution, indemnification, cost
recovery, compensation or injunctive relief.
"ENVIRONMENTAL LAW" means any Applicable Law relating to any
Environmental Matter.
"ENVIRONMENTAL MATTER" means any (a) release, emission, entry or
introduction into the air, including the air within buildings and other
natural or man-made structures above ground; (b) discharge, release or
entry into water, including into any river, watercourse, lake or pond
(whether natural or artificial or above ground or which joins or flows
into any such water outlet above ground) or reservoir, or the surface of
the riverbed or of other land supporting such waters, ground waters,
sewer or the sea; (c) deposit, storage, treatment, importation,
exportation, production, transportation, handling, processing, carrying,
manufacture, collection, sorting or presence of any Hazardous Materials
(including, in the case of waste, any material which constitutes a scrap
material or an effluent or other unwanted surplus substance arising from
the application of any process or activity (including making it
re-usable or reclaiming substances from it) and any material or article
which is required to be disposed of as being broken, worn out,
contaminated or otherwise spoiled); (d) nuisance, noise, health and
safety at work, industrial illness, industrial injury due to
environmental factors, environmental health problems (including
asbestosis or any other illness or injury caused by exposure to
asbestos) or genetically modified organisms; (e) conservation,
preservation or protection of the natural or man-made environment or any
living organisms supported by the natural or man-made environment; or
(f) other matter whatsoever directly affecting the environment or any
part of it.
"ENVIRONMENTAL PERMIT" means any permit, approval, identification
number, license or other authorization required under any Environmental
Law.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"EUROCURRENCY LIABILITIES" has the meaning specified in Regulation
D of the Board of Governors of the Federal Reserve System of the United
States of America, as in effect from time to time.
"EURODOLLAR RATE" means, for any Interest Period for any Eurodollar
Rate Advance, an interest rate per annum (rounded upward to the nearest
whole multiple of
1/8 of 1% per annum, if such rate is not such a multiple) equal to the
rate per annum at which deposits in Dollars are offered by the principal
office of Citibank in London, England to prime banks in the London
interbank market at 11:00 A.M. (London time) two Business Days before
the first day of such Interest Period in an amount substantially equal
to such Eurodollar Rate Advance to be outstanding during such Interest
Period and for a period equal to such Interest Period.
"EURODOLLAR RATE ADVANCE" means any Advance other than a Dollar
Funding Rate Advance.
"EURODOLLAR RATE RESERVE PERCENTAGE" for any Interest Period for
any Eurodollar Rate Advance means the reserve percentage applicable two
Business Days before the first day of such Interest Period under
regulations issued from time to time by the Board of Governors of the
Federal Reserve System of the United States (or any successor) for
determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal Reserve System in New York
City with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities (or with respect to any other category of
liabilities that includes deposits by reference to which the interest
rate on Eurodollar Rate Advances is determined) having a term equal to
such Interest Period.
"EVENTS OF DEFAULT" has the meaning specified in Section 6.02.
"EXISTING DEBT" has the meaning specified in Section 4.01(aa)
hereof.
"FACILITIES" means the Term Facility or the Working Capital
Facility.
"FISCAL QUARTER" means any fiscal quarter of the Borrower and its
Subsidiaries that occurs within any Fiscal Year.
"FISCAL YEAR" means a fiscal year of the Borrower and its
Subsidiaries ending on December 31 in any calendar year.
"GAAP" has the meaning specified in Section 1.03.
"GOVERNMENTAL APPROVALS" means all approvals, authorizations,
claims, consents, exceptions, exemptions, variances, licenses, permits,
publications, filings, registrations, notices to and declarations of or
with any Governmental Authority having jurisdiction over the matter,
including all siting, environmental and operating permits and licenses
that are required for (a) the ownership, development, construction,
financing, use, operation and maintenance of the Plant and all such
other matters as may be necessary in connection with the Plant and (b)
(i) the making by the Borrower of the payments at the times and in the
currencies contemplated by the Transaction Documents, (ii) the
enforceability of any of the Transaction Documents and (iii) all
such other matters as may be necessary in connection with the
performance of any Loan Party's obligations under any Transaction
Document.
"GOVERNMENTAL AUTHORITY" means the government of Mexico or of any
state or other political subdivision thereof and includes any entity
within Mexico exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"GUARANTORS" means Accuride and IASA, as regards their respective
Obligations under the Completion Guaranty.
"HAZARDOUS MATERIALS" means (a) petroleum or petroleum products,
by-products or breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon gas
and (b) any other chemicals, materials or substances designated,
classified or regulated as hazardous or toxic or as a pollutant or
contaminant under any Environmental Law.
"HEDGE AGREEMENTS" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts, commodities future or
option contracts for materials used in the ordinary course of business
and other similar agreements.
"IASA" means Industria Automotriz, S.A. de C.V., a corporation
organized and existing under the laws of Mexico.
"INDEMNIFIED PARTY" has the meaning specified in Section 7.04(b).
"INDEPENDENT ENGINEER" means the independent engineer selected from
time to time by the Lender and approved by the Borrower, which
independent engineer shall initially be Rockford Consulting.
"INDUSTRIAL MORTGAGE" has the meaning specified in Section
3.01(f)(v).
"INITIAL EXTENSION OF CREDIT" means the earlier to occur of the
initial Term Advance or the initial Working Capital Advance.
"INTEREST EXPENSE" means, for any Person for any period, cash
interest expense (including that attributable to Capital Leases in
accordance with GAAP), net of cash interest income, of such Person with
respect to all outstanding Debt of such Person, including, without
limitation, all commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financing and
net costs under Hedge Agreements (other than currency swap agreements,
currency future or option contracts and other similar agreements), but
excluding, however, amortization of deferred financing costs and any
other amounts of non-cash interest, all as calculated in accordance with
GAAP.
"INTEREST PERIOD" means:
(a) for each Eurodollar Rate Advance, the period commencing
on the date of such Eurodollar Rate Advance and ending on the last
day of the period selected by the Borrower pursuant to the
provisions below and, thereafter, each subsequent period commencing
on the last day of the immediately preceding Interest Period
therefor and ending on the last day of the period selected by the
Borrower pursuant to the provisions below. The duration of each
such Interest Period shall be one, two, three or six months, as the
Borrower may, in the applicable Notice of Term Borrowing or Notice
of Working Capital Borrowing, or as the case may be, select; and
(b) for each Dollar Funding Rate Advance, the period
commencing on the date of such Dollar Funding Rate Advance and
ending on the day that occurs one calendar month after such date
and, thereafter, each subsequent one-month period commencing on the
last day of the immediately preceding Interest Period therefor and
ending on the last day of such one-month period;
PROVIDED, HOWEVER, in the case of clauses (a) and (b) above that:
(i) with respect to any Interest Period for any Advance that
begins before, and would otherwise end after, any principal
repayment installment date or maturity date for such Advance, such
Interest Period shall end on such principal repayment installment
date or maturity date;
(ii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next
succeeding Business Day, PROVIDED, HOWEVER, that, if such extension
would cause the last day of such Interest Period to occur in the
next following calendar month, the last day of such Interest Period
shall occur on the next preceding Business Day; and
(iii) subject to subclause (ii) above, if the last day of the
initial Interest Period would otherwise occur on a date during any
calendar month that is after the 25th day of such calendar month,
the last day of such initial Interest Period shall occur on the
25th day of such calendar month.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"INVESTMENT" in any Person means any loan or advance to such
Person, any purchase or other acquisition of any capital stock or other
ownership or profit interest, warrants, rights, options, obligations or
other securities of such Person, any capital contribution to such Person
or any other investment in such Person, including, without
limitation, any arrangement pursuant to which the investor incurs Debt
of the types referred to in clause (h) or (i) of the definition of
"Debt" in respect of such Person.
"JOINT VENTURE AGREEMENT" means that certain Joint Venture
Agreement dated as of November 5, 1997 by and among Accuride, IASA,
Grupo Industrial Xxxxxxx, X.X., a corporation organized and existing
under the laws of Mexico, and the Borrower, as such Joint Venture
Agreement may be amended, supplemented or otherwise modified from time
to time in compliance with the provisions of this Agreement.
"LENDER" has the meaning specified in the recital of parties to
this Agreement.
"LENDER PARTIES" means the Lender, the Participants, and any
sub-participant approved by the Borrower pursuant to Section 11 of any
Participation Agreement.
"LENDER'S ACCOUNT" means the account of Citibank at its office at
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, ABA No. 000000000, Account
No. 00000000, NAIB Agency Medium Term Finance, Ref: Accuride de Mexico,
S.A. de C.V. Attention: Xxxxxx Xxxxx, tel: (000) 000-0000, fax: (302)
000-0000.
"LENDING OFFICE" means, with respect to the Lender, the office of
the Lender specified as its "Lending Office" under its name on the
signature pages hereto and, with respect to any Participant, the office
of such Participant specified as its "Lending Office" in the
Participation Agreement to which such Participant is a party.
"LETTER OF COMFORT" has the meaning specified in Section
3.01(f)(vii).
"LEVERAGE RATIO" means, as of any date of determination, the ratio
of (a) the aggregate amount of Consolidated Debt of the Borrower and its
Subsidiaries at the end of the most recently completed Measurement
Period prior to such date, to (b) Consolidated EBITDA of the Borrower
and its Subsidiaries for such Measurement Period.
"LIEN" means with respect to any property or assets, any mortgage
or deed of trust (including "FIDEICOMISOS"), pledge, hypothecation,
assignment, deposit arrangement, security interest, lien, charge,
easement (other than any easement not materially impairing usefulness or
marketability), encumbrance, preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
on or with respect to such property or assets (including any conditional
sale or other title retention agreement having substantially the same
economic or legal effect as any of the foregoing).
"LOAN DOCUMENTS" means (i) this Agreement, (ii) the Notes, (iii)
the Completion Guaranty, (iv) the Letter of Comfort, and (v) the
Collateral Documents, in each case as amended, supplemented or otherwise
modified from time to time.
"LOAN PARTIES" means the Borrower and the Guarantors.
"MATERIAL ADVERSE CHANGE" means (a) any material adverse change in
the business, financial condition, operations, assets or liabilities of
the Borrower and its Subsidiaries, taken as a whole, or (b) any change
in the business, financial condition, operations, assets or liabilities
of any Guarantor and its Subsidiaries, taken as a whole, which change
would have a material adverse effect on the ability of such Guarantor to
perform its obligations under the Completion Guaranty.
"MATERIAL ADVERSE EFFECT" means (a) a material adverse effect on
(i) the business, financial condition, operations, assets or liabilities
of the Borrower and its Subsidiaries, taken as a whole, or (ii) the
rights and remedies of the Lender under any Loan Document or (b) an
effect on the business, financial condition, operations, assets or
liabilities of a Guarantor and its Subsidiaries, taken as a whole, which
change would have a material adverse effect on the ability of such
Guarantor to perform its obligations under the Completion Guaranty.
"MEASUREMENT PERIOD" means, as of any date of determination, the
most recently completed four consecutive Fiscal Quarters ending on or
immediately prior to such date, EXCEPT that during the first year after
the date hereof the "Measurement Period" means, as of any date of
determination, the period from the date hereof to the end of the Fiscal
Quarter ending on or immediately prior to such date.
"MEXICAN GAAP" means generally accepted accounting principles in
Mexico as in effect from time to time.
"MEXICAN TAXING AUTHORITY" has the meaning specified in Section
2.10(a).
"MEXICO" means the United Mexican States.
"MULTIPLE EMPLOYER PLAN" means a single employer plan, as defined
in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of
the Borrower or any of its Subsidiaries and at least one Person other
than the Borrower and its Subsidiaries or (b) was so maintained and in
respect of which the Borrower or any of its Subsidiaries could have
liability under Section 4064 or 4069 or ERISA in the event such plan has
been or were to be terminated.
"NET INCOME" means, with respect to any Person for any period, the net
income (or loss) of such Person; PROVIDED that, for purposes of
determining Net Income for any Person, there shall be excluded from such
determination (i) any after-tax gains or losses, and any related fees
and expenses, in each case to the extent attributable to the sale of
assets, and (ii) any net extraordinary gains (or losses).
"NON-EXCLUDED TAXES" has the meaning specified in Section 2.l0(a).
"NOTE" means a Term Note or a Working Capital Note.
"NOTICE OF BORROWING" means a Notice of Term Borrowing or a Notice
of Working Capital Borrowing.
"NOTICE OF TERM BORROWING" has the meaning specified in Section
2.02(a).
"NOTICE OF WORKING CAPITAL BORROWING" has the meaning specified in
Section 2.02(b).
"OBLIGATION" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including,
without limitation, any liability of such Person on any claim, whether
or not the right of any creditor to payment in respect of such claim is
reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, disputed, undisputed, legal, equitable, secured or unsecured,
and whether or not such claim is discharged, stayed or otherwise
affected by any proceeding referred to in Section 6.02(f).
"OFFICERS' CERTIFICATE" means a certificate signed by (i) the
Director General of the Borrower and (ii) another Senior Officer of the
Borrower.
"OPERATING COSTS" means, for any period, all cash expenditures
incurred by the Borrower in administering, operating or maintaining the
Plant during such period.
"OTHER TAXES" has the meaning specified in Section 2.10(b).
"PARTICIPANT" means a bank or other financial institution that the
Borrower has approved in writing as a Participant and that becomes a
party to a Participation Agreement.
"PARTICIPATION AGREEMENT" means any Participation Agreement between
the Lender and any Participant, under which such Participant shall agree
to purchase participations in the Advances made and to be made under
this Agreement in substantially the form attached as Exhibit L hereto,
or in any other form agreed to by the Lender and the Borrower, as the
same may be amended, supplemented or otherwise modified from time to
time.
"PERMITTED INVESTMENTS" means (a) securities issued or directly and
fully guaranteed or insured by the United States government or the
government of Mexico, or any agency or instrumentality of any such
government having maturities of not more than 12 months from the date of
acquisition; (b) certificates of deposit and eurodollar time deposits
with maturities of 12 months or less from the date of acquisition,
bankers' acceptances with maturities not exceeding 12 months and
overnight bank deposits, in each case, with any U.S. or Mexican
commercial bank of recognized stature having capital and surplus in
excess of $500,000,000 and having a commercial paper rating (or
the holding company thereof having a commercial paper rating) of A-1 (or
the equivalent thereof) or better by Standard & Poor's Ratings Services
or any Mexican Affiliate thereof ("S&P") or P-1 (or the equivalent
thereof) or better by Xxxxx'x Investors Service, Inc. or any Mexican
Affiliate thereof ("MOODY'S") or D-1 (or the equivalent thereof) or
better by Duff and Xxxxxx Credit Rating Co. or any Mexican Affiliate
thereof ("DUFF"), and which is a member of the Federal Reserve System of
the United States of America or a duly licensed Mexican banking
institution; (c) commercial paper rated at least A-1, P-1 or D-1 or the
equivalent thereof, by S&P, Moody's or Xxxx, respectively, and maturing
within 270 days after the date of acquisition; (d) guaranteed investment
contracts maturing within 12 months of the date of acquisition thereof
and entered into with (or fully guaranteed by) financial institutions
whose long-term unsecured non-credit enhanced indebtedness is rated A-
or better by S&P or Duff or A3 or better by Moody's; and (e) investments
in money market funds having a rating from each of S&P, Moody's and
Fitch Investors Service, Inc. in the highest investment category granted
thereby.
"PERMITTED LIENS" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall
have been commenced:
(a) Liens for taxes, assessments, governmental charges or
levies not delinquent or being contested in good faith by
appropriate proceedings and for which adequate cash reserves have
been set aside in accordance with Mexican GAAP, including Liens for
import taxes and value-added taxes;
(b) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in
connection with the importation of goods;
(c) Liens for deposits or pledges made in the ordinary
course of business to secure obligations under workmen's
compensation, social security or similar laws, or under
unemployment insurance, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases,
government contracts, performance and return-of-money bonds, and
other similar obligations incurred in the ordinary course of
business;
(d) statutory mechanics', workmen's, materialmen's,
carrier's, supplier's, vendor's, warehousemen's or other like Liens
arising in the ordinary course of business securing obligations
which are not due or which are being contested in good faith;
(e) easements, rights of way, reservations, restrictions,
covenants, agreements for joint or common use, landlord's rights of
distraint and other similar imperfections, charges or encumbrances
of title on real estate that do not render title to the property
encumbered thereby unmarketable or interfere in any
material respect with the business of the Borrower and its
Subsidiaries taken as a whole;
(f) attachment, judgment and other similar Liens arising in
circumstances not constituting an Event of Default or in connection
with court proceedings that are being contested in good faith by
appropriate proceedings and for which adequate cash reserves have
been set aside;
(g) Liens on the assets and/or Voting Stock of the Borrower
in order to secure Replacement Debt, if any; PROVIDED that the
obligations of the Borrower hereunder are secured, equally and
ratably with such Liens, also by Lien on such assets and/or Voting
Stock under the Collateral Documents;
(h) ground leases in respect of real property on which
facilities owned or leased by the Borrower or any of its
Subsidiaries are located;
(i) any interest or title of a lessor or secured by a
lessor's interest under any lease permitted by this Agreement and
any Liens arising from any financing statement filed in connection
with such lease;
(j) Liens on goods, the purchase price of which is financed
by a documentary letter of credit issued for the account of the
Borrower or any of its Subsidiaries, provided that such Lien
secures only the obligations of the Borrower in respect of such
letter of credit to the extent permitted under Section 5.02(b); and
(k) leases or subleases granted to others and not
interfering in any material respect with the business of the
Borrower and its Subsidiaries taken as a whole.
"PERSON" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.
"PLAN" means any multiemployer or single-employer plan, as defined
in Section 4001 of ERISA and subject to Title IV of ERISA, that is or
was within any of the preceding five plan years maintained or
contributed to by (or to which there is or was an obligation to
contribute or to make payments of) the Borrower or any of its
Subsidiaries.
"PLANT" means the new, approximately 260,000 sq. ft. manufacturing
facility of the Borrower to be located in Cienega xx Xxxxxx, Nuevo Xxxx,
Mexico.
"PLEDGE AGREEMENT" has the meaning specified in Section 6.02(k).
"PRO FORMA EBITDA" has the meaning specified in Section
5.02(a)(vi)(V).
"PRUDENT INDUSTRY PRACTICES" has the meaning specified in Section
5.01(j).
"RELATED DOCUMENTS" means the Joint Venture Agreement and the
ESCRITURA CONSTITUTIVA and Bylaws of the Borrower.
"RELEASE" means disposing, discharging, injecting, spilling, leaking,
leaching, dumping, pumping, pouring, emitting, escaping, emptying, seeping,
placing and the like, into or upon any land or water or air, or otherwise
entering into the environment.
"REQUIRED GOVERNMENTAL APPROVAL" has the meaning specified in Section
4.01(d).
"REPLACEMENT DEBT" means Debt for borrowed money incurred by the
Borrower to replace and to refund the Working Capital Facility, subject to
the conditions set forth in Section 5.02(b)(iii).
"REQUIRED INSURANCE" has the meaning specified in Section 5.01(d).
"SENIOR OFFICER" means, with respect to any Person, the chief
executive officer, the president or any senior vice president of such
Person or, with respect to financial matters, the chief financial officer
or treasurer of such Person, or such other officers, comparable in
seniority and responsibility, as such Person may have.
"SOLVENT" and "SOLVENCY" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of
such Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person, (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 does not intend
to, and does not believe that it will, incur debts or liabilities beyond
such Person's ability to pay such debts and liabilities as they mature and
(d) such Person is not engaged in business or a transaction, and is not
about to engage in business or a transaction, for which such Person's
property would constitute an unreasonably small capital. The amount of
contingent liabilities at any time shall be computed as the amount that, in
the light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual
or matured liability.
"SUBORDINATED DEBT" means any Debt of the Borrower that is
subordinated to the Obligations of the Borrower under the Loan Documents
on, and that otherwise contains, terms and conditions satisfactory to the
Lender (including, without limitation, the term and condition that such
Debt may not be paid or prepaid until all the
Obligations of the Borrower under this Agreement and the Notes shall be
paid in full in cash).
"SUBSIDIARY" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which)
more than 50% of (a) the issued and outstanding capital stock having
ordinary voting power to elect a majority of the Board of Directors of such
corporation (irrespective of whether at the time capital stock of any other
class or classes of such corporation shall or might have voting power upon
the occurrence of any contingency), (b) the interest in the capital or
profits of such partnership, joint venture or limited liability company or
(c) the beneficial interest in such trust or estate is at the time directly
or indirectly owned or controlled by such Person, by such Person and one or
more of its other Subsidiaries or by one or more of such Person's other
Subsidiaries.
"SURVIVING DEBT" has the meaning specified in Section 3.01(b).
"TAXES" means any taxes, levies, imposts, duties, deductions,
withholdings, fees, liabilities and similar charges (and all interest,
penalties and other liabilities imposed with respect thereto) imposed by or
on behalf of any Governmental Authority or any political subdivision
thereof or taxing jurisdiction therein.
"TERM ADVANCE" has the meaning specified in Section 2.01(a).
"TERM COMMITMENT" means, with respect to the Lender at any time, the
obligation of the Lender, subject to the conditions set forth in this
Agreement, to make Term Advances to the Borrower up to an aggregate
principal amount equal to $25,000,000, as such amount may be reduced at or
prior to such time pursuant to Section 2.04.
"TERM FACILITY" means, at any time, the amount of the Lender's Term
Commitment at such time.
"TERM LOAN TERMINATION DATE" means the earlier of March 31, 2000 and
the date of termination in whole of the Term Commitment pursuant to Section
2.04 or 6.01.
"TERM NOTE" means a promissory note of the Borrower payable to the
order of the Lender, in substantially the form of Exhibit A hereto,
evidencing the indebtedness of the Borrower to the Lender resulting from a
Term Advance made by the Lender.
"TERMINATION DATE" means, as applicable, either the Term Loan
Termination Date or the Working Capital Termination Date.
"TIMETABLE" means the timetable attached as Schedule 1.01(b) hereto.
"TRANSACTION DOCUMENTS" means, collectively, the Loan Documents, the
Related Documents and the Construction Documents.
"U.S. GAAP" means generally accepted accounting principles in the
United States as in effect from time to time.
"UNITED STATES" and "U.S." each means the United States of America.
"UNUSED WORKING CAPITAL COMMITMENT" means, with respect to the Lender
at any time, (a) the Lender's Working Capital Commitment at such time MINUS
(b) the aggregate principal amount of the Lender's Working Capital Advances
outstanding at such time.
"VOTING STOCK" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such
Person, even if the right so to vote has been suspended by the happening of
such a contingency.
"WORKING CAPITAL ADVANCE" has the meaning specified in
Section 2.01(b).
"WORKING CAPITAL COMMITMENT" means, with respect to the Lender at any
time, the obligation of the Lender, subject to the conditions set forth in
this Agreement, to make Working Capital Advances to the Borrower from time
to time up to an aggregate principal amount equal to $7,500,000, as such
amount may be reduced at or prior to such time pursuant to Section 2.04.
"WORKING CAPITAL FACILITY" means, at any time, the amount of the
Lender's Working Capital Commitment at such time.
"WORKING CAPITAL NOTE" means a promissory note of the Borrower payable
to the order of the Lender, in substantially the form of Exhibit B hereto,
evidencing the indebtedness of the Borrower to the Lender resulting from a
Working Capital Advance made by the Lender.
"WORKING CAPITAL TERMINATION DATE" means the earlier of (x) the date
that occurs one year from the date hereof, or such later date as provided
for pursuant to Section 2.12, and (y) the date of termination in whole of
the Working Capital Commitments pursuant to Section 2.04 or 6.01.
SECTION 1.02. COMPUTATION OF TIME PERIODS. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding."
SECTION 1.03. ACCOUNTING TERMS. Except as otherwise provided in this
Agreement, all computations and determinations as to financial matters, and all
financial statements to be
delivered under this Agreement, shall be made or prepared in accordance with
Mexican GAAP reconciled to U.S. GAAP (including principles of consolidation
where appropriate) ("GAAP") and applied on a consistent basis.
SECTION 1.04. OTHER DEFINITIONAL PROVISIONS. (a) The words
"hereof," "herein" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Article, Section, Schedule and Exhibit
references are to this Agreement unless otherwise specified.
(b) Except as otherwise specified herein, each reference in this
Agreement to a Transaction Document shall be deemed (i) to include all exhibits,
annexes, schedules or other attachments thereto and (ii) to refer to such
Transaction Document as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms and, to the extent
applicable, Sections 5.02(k) and 5.02(l).
(c) Except as otherwise specified herein, each reference in this
Agreement to an Applicable Law or a Governmental Approval shall be deemed to
refer to such Applicable Law or Governmental Approval as the same may be
amended, supplemented or otherwise modified from time to time.
(d) Each reference in this Agreement to a Person shall be deemed to
include such Person's permitted successors and assigns.
(e) The use of the word "including" in this Agreement means
"including, without limitation."
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. THE ADVANCES. (a) THE TERM ADVANCES. The Lender
agrees, on the terms and conditions hereinafter set forth, to make advances
(each a "TERM ADVANCE" and, collectively, the "TERM ADVANCES") to the Borrower
in Dollars from time to time on any Business Day during the period from the date
hereof until the Term Loan Termination Date in an aggregate amount not to exceed
the Lender's Term Commitment at such time. Amounts borrowed under this
Section 2.01(a) and repaid or prepaid may not be reborrowed.
(b) THE WORKING CAPITAL ADVANCES. The Lender agrees, on the terms
and conditions hereinafter set forth, to make advances (each a "WORKING CAPITAL
ADVANCE") to the Borrower in Dollars from time to time on any Business Day
during the period from the date hereof until the Working Capital Termination
Date in an amount for each such Advance not to exceed the Lender's Unused
Working Capital Commitment at such time. Within the limits of the Lender's
Unused Working Capital Commitment in effect from time to time, the Borrower
may borrow under this Section 2.01(b), prepay pursuant to Section 2.05(b) and
reborrow under this Section 2.01(b).
SECTION 2.02. MAKING THE ADVANCES. (a) Each Term Advance shall be
made upon notice given by the Borrower to the Lender not fewer than three
Business days prior to the date of the proposed Term Advance. Each such notice
of a Term Advance (a "NOTICE OF TERM BORROWING") shall be by telephone,
confirmed immediately in writing, or telex or telecopier, in substantially the
form of Exhibit C hereto, specifying therein the requested (i) date of such Term
Advance, (ii) aggregate amount of such Term Advance and (iii) initial Interest
Period for such Term Advance. The Lender shall, before 11:00 A.M. (New York
City time) on the date of such Term Advance, make such funds available to the
Borrower, as such funds may be reduced in accordance with Section 2.02(f) below,
upon fulfillment of the applicable conditions set forth in Article III by
crediting the Borrower's Account.
(b) Each Working Capital Advance shall be made upon notice given by
the Borrower to the Lender not later than 11:00 A.M. (New York City time) on the
third Business Day prior to the date of the proposed Working Capital Advance.
Each such notice of a Working Capital Advance (a "NOTICE OF WORKING CAPITAL
BORROWING") shall be by telephone, confirmed immediately in writing, or telex or
telecopier, in substantially the form of Exhibit E hereto, specifying therein
the requested (i) date of such Working Capital Advance, (ii) aggregate amount of
such Working Capital Advance, (iii) initial Interest Period for such Working
Capital Advance and (iv) the maturity of such Working Capital Advance, which
maturity shall occur on the last day of any Interest Period for such Working
Capital Advance but no later than the then existing Working Capital Termination
Date. The Lender shall, before 11:00 A.M. (New York City time) on the date of
such Working Capital Advance, make such funds available to the Borrower, as such
funds may be reduced in accordance with Section 2.02(f) below, upon fulfillment
of the applicable conditions set forth in Article III by crediting the
Borrower's Account.
(c) No more than six separate Term Advances and no more than six
separate Working Capital Advances may be outstanding on any one day.
(d) Each Notice of Term Borrowing and Notice of Working Capital
Borrowing shall be irrevocable and binding on the Borrower. The Borrower shall
indemnify the Lender or any Participant against any loss, cost or expense
incurred by the Lender or such Participant as a result of any failure to fulfill
on or before the date specified in a Notice of Borrowing for an Advance, the
applicable conditions set forth in Article III, including, without limitation,
any loss (including loss of anticipated profits), cost or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
the Lender or such Participant to fund such Advance to be made by the Lender
when such Advance, as a result of such failure, is not made on such date.
(e) Unless the Lender shall have received notice from any Participant
prior to the date of any Advance that such Participant will not make available
to the Lender such Participant's ratable portion of such Advance, the Lender may
assume that such Participant has
made such portion available to the Lender on the date of such Advance in
accordance with subsection (a) or (b) of this Section 2.02 and the Lender
may, in reliance upon such assumption, make available to the Borrower on such
date a corresponding amount. If and to the extent that such Participant
shall not have so made such ratable portion available to the Lender, the
Borrower agrees upon notice from the Lender to repay to the Lender forthwith
on demand such corresponding amount together with interest thereon, for each
day from the date such amount is made available to the Borrower until the
date such amount is repaid to the Lender, at the interest rate applicable at
the time to such Advance. If such Participant shall repay to the Lender such
corresponding amount, such amount so repaid shall constitute such
Participant's portion of such Advance for purposes of this Agreement.
(f) The Lender shall not be responsible for the failure of any
Participant to fund its ratable portion of any Advance to be funded by such
Participant on the date of such Advance, and such Advance made to the Borrower
shall be reduced by the amount of any such ratable portion that is not funded by
any Participant.
SECTION 2.03. REPAYMENT OF ADVANCES. (a) TERM ADVANCES. The
Borrower shall repay to the Lender the principal amount of each Term Advance in
eight substantially equal quarterly installments on the 25th day of each March,
June, September and December, commencing June 25, 2001 and ending March 25,
2003; PROVIDED, HOWEVER, that the final principal installment shall in any event
be in an amount equal to the principal amount of such Term Advance then
outstanding.
(b) WORKING CAPITAL ADVANCES. The Borrower shall repay to the Lender
the principal amount of each Working Capital Advance on the maturity thereof
stated in the Working Capital Note that evidences such Working Capital Advance
in accordance with clause (iv) of the second sentence of Section 2.02(b).
SECTION 2.04. OPTIONAL TERMINATION OR REDUCTION OF THE COMMITMENTS.
The Borrower may, upon at least three Business Days' notice to the Lender,
terminate in whole or reduce in part the unused portions of its Term Commitment
and its Unused Working Capital Commitment; PROVIDED, HOWEVER, that each partial
reduction of any Facility shall be in an aggregate amount of $500,000 or an
integral multiple of $500,000 in excess thereof.
SECTION 2.05. PREPAYMENTS. (a) TERM ADVANCES. The Borrower may,
upon at least three Business Days' notice to the Lender stating the proposed
date and aggregate principal amount of the prepayment, and if such notice is
given the Borrower shall, prepay the outstanding aggregate principal amount of
any Term Advance in whole or in part, together with (i) accrued interest to the
date of such prepayment on the aggregate principal amount prepaid and (ii) a
premium, if such prepayment occurs on a date that is less than two years from
the date hereof, of 0.85% of the aggregate principal amount so prepaid, and if
such prepayment occurs on a date that is two years from the date hereof or
later, but less than three years from the date hereof, of 0.55% of the aggregate
principal amount so prepaid, and if such prepayment occurs three years from the
date hereof or later, of 0.25% of the aggregate principal amount so prepaid;
PROVIDED, HOWEVER, that (x) each partial prepayment shall be in an
aggregate principal amount of $1,000,000 or an integral multiple of
$1,000,000 in excess thereof and (y) in the event of any such prepayment of
such Advance during any Interest Period thereof, the Borrower shall reimburse
the Lender in respect thereof pursuant to Section 7.04(c). Each prepayment
of Term Advances shall be applied to the installments thereof as indicated by
the Borrower in its sole discretion.
(b) WORKING CAPITAL ADVANCES. The Borrower may, upon at least three
Business Days' notice to the Lender stating the proposed date and aggregate
principal amount of the prepayment, and if such notice is given the Borrower
shall, prepay without premium or penalty the aggregate principal amount of any
Working Capital Advances in whole or in part, together with accrued interest to
the date of such prepayment on the aggregate principal amount prepaid; PROVIDED,
HOWEVER, that (x) each partial prepayment shall be in an aggregate principal
amount of $100,000 or an integral multiple of $100,000 in excess thereof and (y)
in the event of any such prepayment of any Advance during any Interest Period
thereof, the Borrower shall reimburse the Lender in respect thereof pursuant to
Section 7.04(c).
SECTION 2.06. INTEREST. (a) SCHEDULED INTEREST. The Borrower shall
pay interest on the unpaid principal amount of each Advance owing to the Lender
from the date of such Advance until such principal amount shall be paid in full,
at a rate per annum equal at all times (i) during each Interest Period for such
Advance, if such Advance is a Eurodollar Rate Advance, to the sum of (A) the
Eurodollar Rate for such Interest Period for such Advance PLUS (B) the
Applicable Margin in effect from time to time for such Advance, payable in
arrears on the last day of such Interest Period and, if such Interest Period has
a duration of more than three months, on each day that occurs during such
Interest Period every three months from the first day of such Interest Period
and on the date such Advance shall be paid in full and (ii) during each Interest
Period for such Advance, if such Advance is a Dollar Funding Rate Advance, to
the sum of (A) the Dollar Funding Rate for such Interest Period for such Advance
PLUS (B) the Applicable Margin in effect from time to time for such Advance, in
each case payable in arrears on the last day of each Interest Period therefor.
(b) DEFAULT INTEREST. Anything herein to the contrary
notwithstanding, the Borrower shall pay interest on (i) that principal amount of
each Advance which is not paid when due, payable in arrears on the dates
referred to in subsection (a) above and on demand, at a rate per annum equal at
all times to 4% per annum above the rate per annum required to be paid on such
Advance pursuant to subsection (a) above and (ii) to the fullest extent
permitted by law, the amount of any interest, fee or other amount payable
hereunder which is not paid when due, from the date such amount shall be due
until such amount shall be paid in full, payable in arrears on the date such
amount shall be paid in full and on demand, at a rate per annum equal at all
times to 4% per annum above the rate per annum required to be paid, in the case
of interest, on the Advance on which such interest has accrued pursuant to
subsection (a) above, and, in all other cases, on the Advance which bears the
highest rate per annum from time to time.
(c) NOTICE OF INTEREST RATE. Promptly after receipt of a Notice of
Borrowing pursuant to Section 2.02(a) or 2.02(b), the Lender shall give notice
to the Borrower of the applicable interest rate determined by the Lender for
purposes of clause (a).
SECTION 2.07. FEES. (a) COMMITMENT FEE. The Borrower shall pay to
the Lender a commitment fee, from the date hereof until the applicable
Termination Date, payable in arrears on the date of the initial Term Advance or
Working Capital Advance hereunder and thereafter quarterly on the last Business
Day of each March, June, September and December commencing September 30, 1998,
and on each Termination Date, at the rate of 0.50 of 1% per annum on the average
daily unused portion of the Lender's Term Commitment and on the average daily
Unused Working Capital Commitment of the Lender.
(b) UPFRONT FEE. The Borrower shall pay to the Lender on the date
hereof a one time upfront fee equal to 1.00% of the Lender's Commitments
hereunder.
(c) OTHER FEES. The Borrower shall pay to the Lender such other fees
as may from time to time be agreed upon by and between the Borrower and the
Lender.
SECTION 2.08. INCREASED COSTS, ETC. (a) In the event that, due to
either (i) the introduction of or any change (other than any change by way of
imposition or increase of reserve requirements included in the Eurodollar Rate
Reserve Percentage) in or in the interpretation or administration of any
applicable law or regulation after the date hereof, (ii) the compliance with any
applicable guideline or request from any central bank or other governmental
authority (whether or not having the force of law) or (iii) any other
circumstance affecting the interbank Eurodollar market or the position of any
Lender Party in such market which leads such Lender Party to reasonably
determine that the Eurodollar Rate for any Interest Period for any Eurodollar
Rate Advance will not adequately reflect the cost to such Lender Party of
making, funding or maintaining such Eurodollar Rate Advance or its participation
therein or any portion thereof for such Interest Period, there shall be any
increase in the cost to or reduction in the amount received or receivable by
such Lender Party as a result of agreeing to make or of making, funding or
maintaining Eurodollar Rate Advances or its participation therein or any portion
thereof (excluding for purposes of this Section 2.08 any such increased costs
resulting from Taxes or Other Taxes, as to which Section 2.10 shall govern, then
the Borrower shall from time to time, upon demand by such Lender Party and, in
the case of any Participant, with a copy of such demand to the Lender, pay to
such Lender Party additional amounts sufficient to compensate such Lender Party
for such increased cost; PROVIDED, HOWEVER, such Lender Party before claiming
any additional amounts under this Section 2.08(a) will use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions) to
designate a different Lending Office for any Eurodollar Rate Advances affected
by such event if the making of such a designation would avoid the need for, or
reduce the amount of, such increased cost that may thereafter accrue; PROVIDED
that such designation is made on terms that such Lender Party and its Lending
Office suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the operation of this
subsection (a). A certificate as to the amount of such increased cost and
showing in reasonable detail the basis for the calculation thereof, submitted
to the Borrower by any Lender Party at the time of demand, shall be
conclusive and binding for all purposes, absent manifest error.
(b) If, due to either (i) the introduction of or any change in or in
the interpretation or administration of any applicable law or regulation after
the date hereof or (ii) the compliance with any applicable guideline or request
from any central bank or other governmental authority (whether or not having the
force of law), there shall be any increase in the amount of capital required or
expected to be maintained by any Lender Party or any corporation controlling any
Lender Party which has or would have the effect of reducing the rate of return
on such Lender Party's capital or assets as a result of or based upon the
existence of such Lender Party's commitments and obligations under this
Agreement or a Participation Agreement to a level below that which such Lender
Party could have achieved but for such change or compliance (taking into
consideration such Lender Party's or such corporation's policies with respect to
capital adequacy), then, upon demand by such Lender Party and, in the case of
any Participant, with a copy of such demand to the Lender, the Borrower shall
pay to such Lender Party, from time to time as specified by such Lender Party,
additional amounts sufficient to compensate such Lender Party in light of such
circumstances, it being understood and agreed that such Lender Party shall not
be entitled to such compensation as a result of such Lender Party's compliance
with, or pursuant to any request or directive to comply with, any such law,
regulation, guideline or request in effect on the date hereof. Any amount
payable pursuant to this Section 2.08(b) shall be payable only to the extent
that such Lender Party reasonably determines such increase in capital to be
allocable to the existence of such Lender Party's commitment to lend hereunder
or under a Participation Agreement. A certificate as to such amounts and
showing in reasonable detail the basis for the calculation thereof submitted to
the Borrower by any Lender Party at the time of demand shall be conclusive and
binding for all purposes, absent manifest error.
(c) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or the central bank or other governmental
authority shall assert that it is unlawful, for any Lender Party or its Lending
Office to perform its obligations hereunder or under a Participation Agreement
to make or participate in Eurodollar Rate Advances or to continue to fund or
maintain Eurodollar Rate Advances or its participation in Eurodollar Rate
Advances, then, on notice thereof by such Lender Party to the Borrower and, in
the case of any Participant, with a copy of such demand to the Lender, the
Borrower will either (i) on the last day of the then existing Interest Period
therefor, convert each Eurodollar Rate Advance affected by such circumstances
into a Dollar Funding Rate Advance, or (ii) if such Advance shall not have been
made, cancel such Advance by giving the Lender telephonic notice (confirmed
promptly in writing) thereof on the same date that the Borrower was notified by
such Lender Party pursuant to this subsection (c). In the event of an
illegality as described in this subsection (c) the obligation of the Lender to
make Eurodollar Advances shall be suspended until the Lender shall notify the
Borrower that the Lender has determined that the circumstances causing such
suspension no longer exist; PROVIDED, HOWEVER, that, before the Lender shall
make any such demand, the Lender agrees to use, or in the case of any
Participant, shall have received from such Participant confirmation that it has
used, reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to designate a
different Lending Office for any Advances affected by such event if the
making of such a designation would allow such Lender Party or its Lending
Office to continue to perform its obligations to make or participate in
Eurodollar Rate Advances or to continue to fund or maintain Eurodollar Rate
Advances or its participation in Eurodollar Rate Advances; PROVIDED that such
designation is made on terms that such Lender Party and its Lending Office
suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the operation of this
subsection.
(d) The Borrower shall pay to the Lender a fee on the unpaid
principal amount of each Eurodollar Rate Advance from the date of such
Eurodollar Rate Advance until such principal amount is paid in full, at a rate
per annum equal at all times to the remainder obtained by subtracting (i) the
Eurodollar Rate for the then current Interest Period from time to time for such
Eurodollar Rate Advance from (ii) the rate obtained by dividing such Eurodollar
Rate by a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage
for such Interest Period, payable on each date on which interest is payable on
such Eurodollar Rate Advance. Such fee shall be determined by the Lender and
notified to the Borrower by the Lender.
SECTION 2.09. PAYMENTS AND COMPUTATIONS. (a) The Borrower shall
make each payment hereunder and under the Notes, irrespective of any right of
counterclaim or set-off, not later than 11:00 A.M. (New York City time) on the
day when due to the Lender at the Lender's Account in New York, New York for the
account of the Lender in same day funds in Dollars.
(b) The Borrower hereby authorizes the Lender, if and to the extent
payment owed to the Lender is not made when due hereunder or under the Notes, to
charge from time to time against any or all of the Borrower's accounts with the
Lender any amount so due.
(c) All computations of interest and fees shall be made by the Lender
on the basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest or fees are payable. Each determination by the Lender of an
interest rate or fee hereunder shall be conclusive and binding for all purposes,
absent manifest error.
(d) Whenever any payment hereunder or under the Notes shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or fee, as the case may be;
PROVIDED, HOWEVER, that, if such extension would cause payment of interest on or
principal of Advances to be made in the next following calendar month, such
payment shall be made on the next preceding Business Day.
SECTION 2.10. TAXES. (a) Any and all payments made by the Borrower
under this Agreement and any Note shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future income,
stamp or other taxes, levies, imposts, duties,
charges, fees, deductions, or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by Mexico (or by any political subdivision or
taxing authority thereof or therein or any organization or federation of
which Mexico is at any time a member) or of any other jurisdiction or
subdivision (including, without limitation, any present or future income,
stamp or other taxes, levies, imposts, duties, charges, fees, deductions, or
withholdings arising with respect to any Participant) excluding net income
taxes and franchise taxes (imposed in lieu of net income taxes) imposed on
the Lender or any of the Participants as a result of a present or former
connection between the Lender or such Participant and Mexico or any political
subdivision or taxing authority thereof or therein (other than any such
connection arising solely from the Lender's or such Participant's having
executed, delivered or performed its obligations or received a payment under,
or enforced this Agreement or the Notes). If any such non-excluded taxes,
levies, imposts, duties, charges, fees, deductions or withholdings
("NON-EXCLUDED TAXES") are required to be withheld or deducted from any
amounts payable to the Lender hereunder or under any Note, the amounts so
payable to the Lender shall be increased to the extent necessary to yield to
the Lender (after payment of all taxes), interest or any such other amounts
payable hereunder at the rates or in the amounts specified in this Agreement
so that such net sum is equal to what the Lender would have received and so
retained had no such deduction or withholding been required or made. Within
45 days after such Non-Excluded Taxes are due, the Borrower shall send to the
Lender the original official receipt, or a certified copy thereof, received
by the Borrower showing payment thereof. If the Borrower fails to pay any
such Non-Excluded Taxes when due to the appropriate taxing authority or fails
to remit to the Lender the required receipts or other required documentary
evidence, the Borrower shall indemnify the Lender against any incremental
taxes, interest or penalties that may become payable by the Lender as a
result of any such failure.
(b) In addition, the Borrower shall pay any present or future stamp,
documentary, excise, property or similar taxes, charges or levies that arise
from any payment made hereunder or under the Notes or any other Loan Document or
from the execution, delivery, notarization or registration of, performing under,
or otherwise with respect to, this Agreement, the Notes or any other Loan
Document ("OTHER TAXES").
(c) In the event that any Lender Party shall for any reason become
liable for any Non-Excluded Taxes or Other Taxes, then the Borrower shall
indemnify such Lender Party on demand and on an after-tax basis for the amount
of such liability.
SECTION 2.11. USE OF PROCEEDS. (a) The proceeds of each Term
Advance shall be available (and the Borrower agrees that it shall use such
proceeds) solely (x) to pay the Construction Costs and (y) to repay, as of the
date of the initial Term Advance, the Existing Debt, as more specifically set
forth in the Cost Certificate delivered by the Borrower in respect of such Term
Advance.
(b) The proceeds of the Working Capital Advances shall be available
(and the Borrower agrees that it shall use such proceeds) solely (x) to pay fees
and expenses in connection with the Loan Documents and (y) to provide working
capital and for general corporate purposes of the Borrower.
SECTION 2.12. WORKING CAPITAL COMMITMENT EXTENSIONS. (a) If (i)
with respect to the Working Capital Termination Date that is scheduled to occur
one year from the date hereof, on the 91st day prior to such Working Capital
Termination Date the Borrower is in compliance with all of its covenants
contained in Section 5.04 and no Default shall have occurred and be continuing,
or (ii) with respect to any other Working Capital Termination Date in effect at
any other time, neither the Borrower nor the Lender shall provide the notice
referred to in subsection (b) below and no Default shall have occurred and be
continuing on the 91st day prior to such Working Capital Termination Date, then,
in the case of either (i) or (ii) above the term of the Working Capital Facility
shall, on the Working Capital Termination Date then in effect hereunder,
automatically extend for an additional one-year period and the Working Capital
Termination Date shall extend to a date that occurs one year after the Working
Capital Termination Date then in effect hereunder.
(b) If the Borrower provides a written notice to the Lender, or the
Lender provides a written notice to the Borrower, in either case at least 90
days prior to the then effective Working Capital Termination Date to the effect
that the Working Capital Facility shall not be extended, then no extension of
the Working Capital Facility shall occur.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. CONDITIONS PRECEDENT TO INITIAL EXTENSION OF CREDIT.
The obligation of the Lender to make an Advance on the occasion of the Initial
Extension of Credit hereunder is subject to the satisfaction of the following
conditions precedent before or concurrently with the Initial Extension of
Credit:
(a) The Lender shall be reasonably satisfied with any changes made
after December 31, 1997 to the corporate and legal structure and
capitalization of the Borrower, including the terms and conditions of the
Borrower's ESCRITURA CONSTITUTIVA, its bylaws, each class of capital stock
of the Borrower, the Joint Venture Agreement and each other agreement or
instrument relating to such structure or capitalization, in each case to
the extent that the Lender determines such changes are adverse to the
Lender or the Borrower.
(b) The Lender shall be satisfied that (i) all Existing Debt
(including the Debt that the Borrower owes Citibank Mexico immediately
before the Initial Extension of Credit), other than the Debt identified on
Schedule 3.01(b) (the "SURVIVING DEBT"), has been, or will with the
proceeds of the Initial Extension of Credit be, prepaid or otherwise
satisfied and extinguished, and (ii) all such Surviving Debt shall be on
terms and conditions satisfactory to the Lender.
(c) Before giving effect to the transactions contemplated by the
Transaction Documents, there shall have occurred no Material Adverse Change
since December 31, 1997.
(d) There shall exist no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of its Subsidiaries pending or
threatened before any court, governmental agency or arbitrator that
(i) could reasonably be expected to have a Material Adverse Effect or
(ii) purports to affect the legality, validity or enforceability of the
Transaction Documents or the consummation of the transactions contemplated
thereby.
(e) The Borrower shall have paid all documented accrued fees and
expenses of the Lender (including the accrued fees and expenses of counsel
to the Lender).
(f) The Lender shall have received on or before the day of the
Initial Extension of Credit the following loan documentation, each dated
such day (unless otherwise specified), in form and substance satisfactory
to the Lender and in the number of copies as requested by the Lender:
(i) Copies of the resolutions (or other authorizing actions or
instruments) of the Board of Directors or the Shareholders of the
Borrower and each other Loan Party approving this Agreement, the Notes
and each other Loan Document to which it is or is to be a party, and
of all documents evidencing other necessary corporate action and
governmental and other third party approvals and consents, if any,
with respect to this Agreement, the Notes and each other Loan
Document, in each case certified by an Officers' Certificate of such
Loan Party or by a notary public.
(ii) A copy of the charter and bylaws of the Borrower and each
amendment thereto, certified (as of a date reasonably near the date of
the Initial Extension of Credit) by the appropriate Governmental
Authority or by a notary public of the jurisdiction of its
incorporation as being a true and correct copy thereof.
(iii) An Officers' Certificate of the Borrower and each other
Loan Party, dated the date of the Initial Extension of Credit (the
statements made in which certificate shall be true on and as of the
date of the Initial Extension of Credit), certifying as to (A) the
absence of any amendments to the charter of the Borrower or such other
Loan Party since the date of the certificate referred to in
Section 3.01(f)(ii), (B) a true and correct copy of the bylaws of the
Borrower and such other Loan Party as in effect on the date of the
Initial Extension of Credit, (C) the due incorporation of the Borrower
and such other Loan Party as a corporation organized under the laws of
the state of its incorporation, and the absence of any proceeding for
the dissolution or liquidation of the Borrower or such other Loan
Party, (D) the truth in all material respects of the representations
and warranties contained in the Loan Documents as though made on and
as of the date of the Initial Extension of Credit, and (E) the absence
of any event occurring and continuing, or resulting from the Initial
Extension of Credit, that constitutes a Default.
(iv) An Officers' Certificate of the Borrower and each other
Loan Party certifying the names and true signatures of the officers of
the Borrower and such other Loan Party authorized to sign this
Agreement, the Notes and each other Loan Document to which they are or
are to be parties and the other documents to be delivered hereunder
and thereunder.
(v) An industrial mortgage (HIPOTECA INDUSTRIAL) covering all
the properties and assets of the Borrower, including the properties
listed on Schedule 4.01(ii) (together with each supplement delivered
pursuant to Section 5.01(p), in each case as amended, supplemented or
otherwise modified from time to time in accordance with their terms,
the "INDUSTRIAL MORTGAGE"), duly executed by the Borrower, together
with:
(A) evidence that the first testimony of the public
deed that contains the Industrial Mortgage has been submitted for
filing or recording on or before the day of the Initial Extension
of Credit in all filing or recording offices that the Lender may
deem necessary or desirable in order to create a valid first and
subsisting Lien on the property described therein in favor of the
Lender and that all filing and recording taxes and duties have
been paid, and
(B) evidence that all other action that the Lender may
deem necessary or desirable in order to create valid first
and subsisting Liens on the property described in the Industrial
Mortgage has been taken.
(vi) A Completion Guaranty Agreement in substantially the form
of Exhibit F (as amended, supplemented or otherwise modified from time
to time in accordance with its terms, the "COMPLETION GUARANTY"), duly
executed by each Guarantor, or such insurance, guaranty or other
agreement in form and substance acceptable to the Lender, duly
executed by a party or parties acceptable to the Lender.
(vii) A Letter of Comfort in substantially the form of Exhibit G
(as amended, supplemented or otherwise modified from time to time in
accordance with its terms, the "LETTER OF COMFORT"), duly executed by
each Guarantor.
(viii) Participation Agreements duly executed by Participants
and funding at least $17,500,000 of the Facilities.
(ix) Certified copies of each of the Related Documents, duly
executed by the parties thereto and in form and substance satisfactory
to the Lender, together with all agreements, instruments and other
documents delivered in connection therewith.
(x) Such financial, business and other information regarding
each Loan Party as the Lender shall have requested, including, without
limitation, information as to possible contingent liabilities, tax
matters, environmental matters, obligations under employee benefit
plans, collective bargaining agreements and other arrangements with
employees, audited annual financial statements dated December 31,
1997, interim financial statements dated the end of the most recent
fiscal quarter for which financial statements are available (or, in
the event the Lender's due diligence review reveals material changes
since such financial statements, as of a later date within 45 days of
the day of the Initial Extension of Credit), pro forma financial
statements as to the Borrower, in form and substance satisfactory to
the Lender, of balance sheets, income statements and cash flow
statements on a monthly basis for the first year following the day of
the Initial Extension of Credit and on an annual basis for each year
thereafter until the Termination Date.
(xi) Certificates, in form and substance satisfactory to the
Lender, attesting to the Solvency of each Loan Party together with
such Loan Party's Subsidiaries, taken as a whole, after giving effect
to the transactions contemplated by the Transaction Documents, from
its chief financial officer.
(xii) Evidence that the Lender, on behalf of the Lender Parties,
has been named as a loss payee under all insurance policies maintained
with respect to the property described in the Industrial Mortgage, for
purposes of Article 109 and 110 of the Mexican Insurance Contract Law
(LEY SOBRE EL CONTRATO DE SEGURO).
(g) The Lender shall have received on or before the day of the
Initial Extension of Credit the following project documentation, each dated
such day (unless otherwise specified), in form and substance satisfactory
to the Lender and in the number of copies as requested by the Lender:
(i) An original (or copy certified by the Borrower to be true
and complete) of each of the Construction Documents together with an
Officers' Certificate from the Borrower to the effect that (i) each
Construction Document is in full force and effect, (ii) there are no
agreements, side letters or other documents to which the Borrower (or
to its knowledge any other Person) is a party that are not included in
the definition of Construction Documents that have the effect of
modifying or supplementing in any respect any of the respective rights
or obligations of the Borrower or any other party under any of the
Construction Documents and (iii) neither the Borrower nor, to its
knowledge, any other party to any such Construction Document is in
breach or default thereunder.
(ii) An Officers' Certificate of the Borrower (A) attaching
copies of all Governmental Approvals required to be obtained for
constructing the Plant as of the date of the Initial Extension of
Credit and (B) stating that each such
Governmental Approval has been duly obtained, is in full force and
effect, is final and is not subject to any unsatisfied condition
required to be satisfied as of such date that may allow
modification, cancellation or revocation thereof, and no event has
occurred that would result in such modification, cancellation or
revocation thereof, and that the Borrower has no reason to believe
that all Governmental Approvals required to be obtained subsequent
to the Initial Extension of Credit will not be obtained by the
dates by which they are required.
(iii) An Officers' Certificate of the Borrower dated as of the
date of the Initial Extension of Credit, stating that the Borrower as
of such date is in compliance with the requirements of Schedule
5.01(d).
(iv) Certified copies of all policies evidencing the insurance
required pursuant to Section 5.01(d) and pursuant to the Industrial
Mortgage, in form and substance satisfactory to the Lender.
(v) Evidence, in form and substance satisfactory to the
Lender, that (i) the Borrower and the other Loan Parties have each
irrevocably appointed as its agent for service of process CT
Corporation System (or another Person satisfactory to the Lender), and
that such agent has accepted the appointment and has agreed to forward
forthwith to such Person all legal process in New York, New York,
addressed to such Person, as applicable, received by such agent and
(ii) the Borrower and IASA have granted an irrevocable power of
attorney in favor of the agent for service of process in accordance
with Mexican law.
(vi) Evidence, in form and substance satisfactory to the
Lender, that the Joint Venture Agreement has been amended to permit a
grant by Accuride and IASA of the Collateral under the Pledge
Agreement.
(h) The Lender shall have received on or before the day of the
Initial Extension of Credit the following opinions, each dated such date:
(i) A favorable opinion of Xxxxxxxxxxx y Steta, S.C., Mexican
counsel for the Borrower, in substantially the form of Exhibit H-1
hereto, and a favorable opinion of Xxxxxx & Xxxxxxx, New York counsel
for the Borrower, in substantially the form of Exhibit H-2 hereto,
and, in each case, as to such other matters as the Lender may
reasonably request.
(ii) A favorable opinion of Xxxxxx & Xxxxxxx, counsel for
Accuride, in substantially the form of Exhibit I hereto and as to such
other matters as the Lender may reasonably request.
(iii) A favorable opinion of Xxxxxx Xxxxxxxx Xxxxxxxx, counsel
for IASA, in substantially the form of Exhibit J hereto and as to such
other matters as the Lender may reasonably request.
(iv) A favorable opinion of Martinez, Algaba, Xxxxxxxx, Xx Xxxx
y Xxxxxx-Xxxxx, S.C., Mexican counsel for the Lender, in substantially
the form of Exhibit K hereto and otherwise in form and substance
satisfactory to the Lender.
(v) A favorable opinion of Shearman & Sterling, New York
counsel for the Lender, in form and substance satisfactory to the
Lender.
SECTION 3.02. CONDITIONS PRECEDENT TO EACH TERM ADVANCE. The
obligation of the Lender to make a Term Advance (including the Initial
Extension of Credit consisting of a Term Advance) shall be subject to the
further conditions precedent that on the date of such Term Advance:
(a) The Lender shall have received on or before the day of such Term
Advance the following documentation:
(i) at least three Business Days prior to such Term Advance, a
Notice of Term Borrowing executed and delivered by a duly authorized
officer of the Borrower in respect of the Term Advance to be extended
in accordance with the terms of Section 2.02(a) hereof;
(ii) at least three Business Days prior to such Term Advance, a
Cost Certificate, a copy of which shall have been delivered to the
Lender and the Independent Engineer by the Borrower, with respect to
the requested Term Advance and a copy of any related application for
payment delivered by the contractors under the Construction Documents,
together with copies of all invoices (where available) and other
statements of charges (including reasonable estimates of charges) with
respect to the payment to be made to the contractors pursuant to the
Construction Documents on the date of such Term Advance and with
respect to all other items of Construction Costs to be paid on such
date; and
(iii) A Term Note duly executed by the Borrower, evidencing, and
reflecting the payment terms of, the indebtedness resulting from such
Term Advance.
(b) The following statements shall be true (and each of the delivery
to the Lender of the applicable Notice of Term Borrowing, and the
acceptance by the Borrower of the proceeds of such Term Advance shall
constitute a representation and warranty by the Borrower that both on the
date of such delivery and on the date of such Term Advance such statements
are true):
(i) the representations and warranties contained in each Loan
Document are correct in all material respects on and as of such date,
before and after giving effect to such Term Advance and to the
application of the proceeds therefrom, as though made on and as of
such date other than any such representations or warranties that, by
their terms, refer to a specific date other than the date of such Term
Advance, in which case as of such specific date; and
(ii) no event has occurred and is continuing, or would result
from such Term Advance or from the application of the proceeds
therefrom, that constitutes a Default.
(c) The Lender shall have received from each Participant funds in
Dollars in an amount equal to such Participant's ratable share of such Term
Advance.
(d) The Lender shall have received such other approvals, opinions or
documents as the Lender may reasonably request.
SECTION 3.03. CONDITIONS PRECEDENT TO EACH WORKING CAPITAL
ADVANCE. The obligation of the Lender to make a Working Capital Advance
(including the Initial Extension of Credit consisting of a Working Capital
Advance) shall be subject to the further conditions precedent that on the
date of such Working Capital Advance:
(a) The Lender shall have received on or before the day of such
Working Capital Advance the following documentation:
(i) at least three Business Days prior to such Working Capital
Advance, a Notice of Working Capital Borrowing executed and delivered
by a duly authorized officer of the Borrower in respect of the Working
Capital Advance to be extended in accordance with the terms of Section
2.02(b) hereof; and
(ii) A Working Capital Note duly executed by the Borrower,
evidencing, and reflecting the payment terms of, the indebtedness
resulting from such Working Capital Advance.
(b) The following statements shall be true (and each of the giving of
the Notice of Working Capital Borrowing, and the acceptance by the Borrower
of the proceeds of such Working Capital Advance shall constitute a
representation and warranty by the Borrower that both on the date of such
notice and on the date of such Advance such statements are true):
(i) the representations and warranties contained in each Loan
Document are correct in all material respects on and as of such date,
before and after giving effect to such Working Capital Advance and to
the application of the proceeds therefrom, as though made on and as of
such date other than any
such representations or warranties that, by their terms, refer to a
specific date other than the date of such Working Capital Advance,
in which case as of such specific date; and
(ii) no event has occurred and is continuing, or would result
from such Working Capital Advance or from the application of the
proceeds therefrom, that constitutes a Default.
(c) The Lender shall have received from each Participant funds in an
amount equal to such Participant's ratable share of such Working Capital
Advance.
(d) The Lender shall have received such other approvals, opinions or
documents as the Lender may reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The
Borrower represents and warrants as follows:
(a) The Borrower (i) is a corporation duly organized and validly
existing under the laws of Mexico, and (ii) has all requisite corporate
power and authority (including, without limitation, all governmental
licenses, permits and other approvals other than those the absence of which
would not have a Material Adverse Effect upon the business of the Borrower)
to own or lease and operate its properties and to carry on its business as
now conducted and as proposed to be conducted and to perform its
obligations under the Transaction Documents. All of the outstanding
capital stock of the Borrower has been validly issued, is fully paid and
non-assessable and is owned by Accuride and IASA free and clear of all
Liens, except those created under the Pledge Agreement, if any.
(b) Set forth on Schedule 4.01(b) hereto is a complete and accurate
list of all Subsidiaries of the Borrower, showing as of the date hereof (as
to each such Subsidiary) the jurisdiction of its incorporation, the number
of shares of each class of capital stock authorized, and the number
outstanding, on the date hereof and the percentage of the outstanding
shares of each such class owned (directly or indirectly) by the Borrower
and the number of shares covered by all outstanding options, warrants,
rights of conversion or purchase and similar rights at the date hereof.
All of the outstanding capital stock of all of such Subsidiaries has been
validly issued, is fully paid and non-assessable and is owned by the
Borrower or one or more of its Subsidiaries free and clear of all Liens,
except those created under the Collateral Documents. Each such Subsidiary
(i) is a corporation duly organized, validly existing and, if applicable,
in good standing under the laws of the jurisdiction of its incorporation,
and (ii) has all requisite corporate power and authority (including,
without limitation, all governmental
licenses, permits and other approvals) to own or lease and operate its
properties and to carry on its business as now conducted and as
proposed to be conducted.
(c) The execution, delivery and performance by the Borrower of this
Agreement, the Notes, each other Loan Document, each Construction Document
and each Related Document to which it is or is to be a party, and the
consummation of the transactions contemplated thereby, are within the
Borrower's corporate powers, have been duly authorized by all necessary
corporate action, and do not (i) contravene the Borrower's charter or
by-laws, (ii) violate any Applicable Law or any rule, regulation, order,
writ, judgment, injunction, decree, determination or award rendered or
promulgated under or pursuant to such Applicable Law, (iii) result in the
breach of, or constitute a default under, any loan agreement, indenture,
mortgage, deed of trust, lease or other financial instrument, or any other
material contract or agreement, binding on or affecting the Borrower, any
of its Subsidiaries or any of their properties or (iv) except for the Liens
created under the Collateral Documents, result in or require the creation
or imposition of any Lien upon or with respect to any of the properties of
the Borrower or any of its Subsidiaries. None of the Borrower and its
Subsidiaries is in violation of any such law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award or in breach of
any such contract, loan agreement, indenture, mortgage, deed of trust,
lease or other instrument, the violation or breach of which could have a
Material Adverse Effect. No Applicable Law or rule, regulation, order,
writ, judgment, injunction, decree, determination or award rendered or
promulgated under or pursuant to any Applicable Law exists that restrains,
prevents or imposes conditions upon the fulfillment of any obligation or
benefit of any party under this Agreement and the other Loan Documents in
such a way as to have a Material Adverse Effect.
(d) No authorization or approval (including exchange credit approval)
or other action by, and no notice to or filing with, any Governmental
Authority or regulatory body or any other third party is required for
(i) the due execution, delivery, recordation, filing or performance by the
Borrower of this Agreement, the Notes, any other Loan Document, any
Construction Document or any Related Document to which it is or is to be a
party, or for the consummation of the transactions contemplated thereby,
except, with respect to any Construction Document only, for those the
absence of which will not have a Material Adverse Effect, (ii) the
Blueprints, except for those the absence of which will not have a Material
Adverse Effect, (iii) the grant by the Borrower of the Liens granted by it
pursuant to the Collateral Documents, (iv) the perfection or maintenance of
the Liens created by the Collateral Documents (including the first priority
nature thereof) or (v) the exercise by the Lender of its rights under the
Loan Documents or the remedies in respect of the Collateral pursuant to the
Collateral Documents, except for the authorizations, approvals, actions,
notices and filings listed on Schedule 4.01(d)(i), all of which have been
duly obtained, taken, given or made and are in full force and effect,
EXCEPT for the Industrial Mortgage and (with regard to the pledge of shares
of stock of the Borrower contemplated by Section 6.02(k)) the Borrower's
by-laws, each of which has been filed for recordation at the proper Public
Registries of Property and Commerce in Mexico. Each Governmental Approval
that is necessary for the performance by the Borrower of its Obligations
under the Construction Documents, the transactions contemplated thereby and
the siting, construction and operation of the Plant (each, a "REQUIRED
GOVERNMENTAL APPROVAL") is listed on Schedule 4.01(d)(ii). Each such
Required Governmental Approval has been duly obtained, is in full force and
effect, is final and is not subject to any unsatisfied condition required
to be satisfied as of such date that may allow modification, cancellation
or revocation thereof, and no event has occurred that would result in the
modification, cancellation or revocation thereof, EXCEPT for such Required
Governmental Approvals (for the construction and operation of the Plant)
which will be filed in the ordinary course of business during the
construction of the Plant or upon completion of the Plant and which the
Borrower expects to duly obtain as and when required and in the ordinary
course of business. The Borrower has no basis to believe that any such
Required Governmental Approvals referred to in the EXCEPT clause of the
immediately preceding sentence will not be so duly obtained.
(e) This Agreement has been, and each of the Notes and each of the
other Loan Documents, Related Documents and Construction Documents to which
the Borrower is a party when delivered hereunder will have been, duly
executed and delivered by the Borrower. This Agreement is, and each of the
Notes and each of the other Loan Documents, Related Documents and
Construction Documents to which the Borrower is a party when delivered
hereunder will be, the legal, valid and binding obligation of the Borrower,
enforceable against the Borrower in accordance with its terms.
(f) The Consolidated balance sheet of the Borrower and its
Subsidiaries as at December 31, 1997, and the related Consolidated
statements of income and cash flows of the Borrower and its Subsidiaries
for the fiscal year then ended, certified by the chief financial officer of
the Borrower, copies of which have been furnished to the Lender, fairly
present the Consolidated financial condition of the Borrower and its
Subsidiaries as at such date and the Consolidated pro forma results of
operations of the Borrower and its Subsidiaries for the fiscal year ended
on such date, in each case giving effect to the transactions contemplated
hereby, all in accordance with GAAP.
(g) The Consolidated forecasted balance sheets, income statements and
cash flows statements of the Borrower and its Subsidiaries delivered to the
Lender pursuant to Section 3.01(f)(x) or 5.03 (e) were prepared in good
faith on the basis of the assumptions stated therein, which assumptions
were believed by the Borrower to be fair in light of conditions existing at
the time of delivery of such forecasts, and represented, at the time of
delivery, the Borrower's best estimate of its future financial performance.
(h) No information, exhibit, financial statement, schedule or report
furnished by the Borrower to the Lender in connection with the negotiation
of the Loan Documents or pursuant to the terms of the Loan Documents
contained any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements made therein not misleading.
(i) There is no action, suit, investigation, litigation or proceeding
affecting the Borrower or any of its Subsidiaries, including any
Environmental Action, pending or threatened before any court, governmental
agency or arbitrator that (i) could have a Material Adverse Effect or
(ii) purports to affect the legality, validity or enforceability of this
Agreement, any Note, any other Loan Document, any Construction Document or
any Related Document or the consummation of the transactions contemplated
hereby.
(j) (i) Neither the Borrower nor any of its Subsidiaries has or is
subject to any Plan or Multiple Employer Plan; and
(ii) With respect to each scheme or arrangement mandated by a
government other than the United States (a "FOREIGN GOVERNMENT SCHEME
OR ARRANGEMENT") and with respect to each employee benefit plan
maintained or contributed to by the Borrower or any Subsidiary of the
Borrower that is not subject to United States law (a "NON-U.S. PLAN"):
(A) Any employer and employee contributions required
by law or by the terms of any Foreign Government Scheme or
Arrangement or any Non-U.S. Plan have been made, or, if
applicable, accrued, in accordance with normal accounting
practices.
(B) The fair market value of the assets of each funded
Non-U.S. Plan, the liability of each insurer for any Non-U.S.
Plan funded through insurance or the book reserve established for
any Non-U.S. Plan, together with any accrued contributions, is
sufficient to procure or provide for the accrued benefit
obligations, as of the date hereof, with respect to all current
and former participants in such Non-U.S. Plan according to the
actuarial assumptions and valuations most recently used to
account for such obligations in accordance with applicable
generally accepted accounting principles.
(C) Each Non-U.S. Plan required to be registered has
been registered and has been maintained in good standing with
applicable regulatory authorities.
(k) Neither the business nor the properties of the Borrower or any of
its Subsidiaries are affected by any fire, explosion, accident, strike,
lockout or other labor dispute, drought, storm, hail, earthquake, embargo,
act of God or of the public enemy or other casualty (whether or not covered
by insurance) or other event of FORCE MAJEURE that would excuse the
Borrower from its duty to perform its obligations under the Transaction
Documents or that could have a Material Adverse Effect.
(l) The operations and properties of the Borrower and each of its
Subsidiaries comply in all material respects with all applicable
Environmental Laws and
Environmental Permits, all past non-compliance with such Environmental
Laws and Environmental Permits has been resolved without ongoing
obligations or costs, and no circumstances exist that could (i) form
the basis of an Environmental Action against the Borrower or any of
its Subsidiaries or any of their properties that could have a Material
Adverse Effect or (ii) cause any such property to be subject to any
restrictions on ownership, occupancy, use or transferability under any
Environmental Law. The Borrower has filed with the applicable Governmental
Authority, and such Governmental Authority has not rejected, the Manifiesto
de Impacto Ambiental related to the construction of the Plant dated June
15, 1998 by the Borrower.
(m) Neither the Borrower nor any of its Subsidiaries is undertaking,
and has not completed, either individually or together with other
potentially responsible parties, any investigation or assessment or
remedial or response action relating to any actual or threatened release,
discharge or disposal of Hazardous Materials at any site, location or
operation, either voluntarily or pursuant to the order of any governmental
or regulatory authority or the requirements of any Environmental Law; and
all Hazardous Materials generated, used, treated, handled or stored at, or
transported to or from, any property currently or formerly owned or
operated by the Borrower or any of its Subsidiaries have been disposed of
in a manner not reasonably expected to result in material liability to the
Borrower or any of its Subsidiaries.
(n) Neither the Borrower nor, to the knowledge of the Borrower, any
third party, has caused or permitted the Release of, or has used,
generated, manufactured, produced, stored or disposed of in, on, under or
about the Plant or transported thereto or therefrom, any Hazardous Material
that could reasonably be expected to subject the Borrower to any material
liability under any Environmental Law.
(o) There are no Hazardous Materials used, stored or present at, on
or, to the knowledge of the Borrower, near the Plant except as may be used,
stored or present in connection with the construction, operation or
ownership of the Plant in accordance with Prudent Industry Practices and
all Applicable Laws.
(p) To the knowledge of the Borrower, there is and has been no
condition, circumstances, action, activity or event that could reasonably
form the basis of any violation of, or any material liability to the
Borrower under, any Environmental Law.
(q) To the knowledge of the Borrower, there is no proceeding,
investigation or inquiry by any Governmental Authority with respect to the
presence or Release of Hazardous Materials in, on, from or to the Plant.
(r) The Borrower has no knowledge of any past or existing violations
of any Environmental Laws affecting the Plant. The Borrower has received
no written complaint, order, directive, citation or notice from any
Governmental Authority with respect to any Environmental Law.
(s) Neither the Borrower nor any of its properties has any immunity
under the laws of Mexico from jurisdiction or suit of any court or from any
legal process or remedy (whether through service, notice, attachment prior
to judgment, attachment in aid of execution, execution or otherwise).
(t) The Borrower has filed or caused to be filed all tax returns
required to be filed by it, and has paid and discharged all taxes shown to
be due and payable on such returns, or on any assessments made against it
or any of its properties, and all other taxes, assessments and governmental
charges or levies lawfully imposed on it or its property following a formal
demand for payment from appropriate governmental officials except such as
are contested in good faith and by appropriate proceedings and with respect
to which adequate cash reserves have been set aside by the Borrower. As of
the date hereof, there are no disputes pending or, to its knowledge,
threatened, between the Borrower and any governmental taxing authority.
(u) As of the date hereof, no income, stamp or other taxes or levies,
imposts, deductions, charges, compulsory loans or withholdings whatsoever
are or will be, under applicable law in Mexico, imposed, assessed, levied
or collected by Mexico or any political subdivision or taxing authority
thereof or therein or on or in respect of principal, interest, premiums,
fees or other amounts payable hereunder to any Lender Party, except that a
Mexican withholding tax is payable in respect of interest, fees and other
amounts payable hereunder, other than principal, with respect to Advances
owed to Lender Parties that are not residents of Mexico.
(v) The obligations of the Borrower hereunder do and shall at all
times rank PARI PASSU with the Borrower's other Debt other than any such
Debt which is subordinated or which has any priority pursuant to Applicable
Law.
(w) The Borrower is in compliance with, and has no reason to believe
that the Plant will not comply fully with, all Applicable Laws, all
Required Governmental Approvals obtained on or prior to the date of
determination and all Construction Documents. Each license, permit,
authorization, consent and approval required by any Governmental Authority
for the construction of the Plant, and for the operation of the Borrower in
respect of the Plant, to the extent such construction has progressed and
operation has commenced, (i) has been obtained by the Borrower, (ii) is
without restriction or modification, (iii) does not require any
modification of the Blueprints, (iv) allows the Plant to be used as
contemplated by the Borrower and (v) remains in full force and effect.
(x) All Required Insurance has been obtained and is in full force and
effect, and such insurance complies with the requirements of Section
5.01(d).
(y) Neither the Borrower nor any of its Subsidiaries is an
"investment company," or an "affiliated person" of, or "promoter" or
"principal underwriter" for,
an "investment company," as such terms are defined in the Investment
Company Act of 1940, as amended.
(z) The Borrower is, individually and together with its Subsidiaries,
Solvent.
(aa) Set forth on Schedule 4.01(aa) hereto is a complete and accurate
list of all existing Debt (the "EXISTING DEBT") (other than Surviving
Debt), showing as of the date hereof the principal amount outstanding
thereunder.
(bb) Set forth on Schedule 3.01(b) hereto is a complete and accurate
list of all Surviving Debt, showing as of the date hereof the principal
amount outstanding thereunder, the maturity date thereof and the
amortization schedule therefor.
(cc) The property interests and other rights obtained, or, as
contemplated to be obtained, and the materials to be supplied, pursuant to
the Construction Documents:
(i) comprise all of the property interests necessary to secure
any right or privilege which is material to the
acquisition, development, construction, installation,
completion, operation and maintenance of the Plant in
accordance with the Construction Documents and all
Applicable Laws;
(ii) are sufficient to enable the Plant to be located,
constructed and operated as contemplated by the
Construction Documents; and
(iii) provide adequate ingress and egress from the Plant as may
be required in connection with the construction and
operation of the Plant.
(dd) There are no services, materials or rights required for the
construction or operation of the Plant in accordance with the Construction
Documents other than those that can reasonably be expected to be
commercially available on terms consistent with the Construction Budget and
the Base Case Projections.
(ee) The Lender has received a true and complete copy of each
Construction Document as in effect on the date of this representation
(including all exhibits, schedules and disclosure letters referred to
therein or delivered pursuant thereto) and of any amendments thereto. None
of the Construction Documents have been amended, supplemented, modified or
terminated and all of the Construction Documents are in full force and
effect.
(ff) All conditions precedent to the obligations of the respective
parties under the Construction Documents have been satisfied, except for
such conditions precedent which by their terms cannot be met until a later
stage in the construction or operation of the Plant, and the Borrower has
no reason to believe that any such condition precedent
cannot be satisfied on or prior to the appropriate state in the
construction or operation of the Plant.
(gg) The Construction Budget accurately specifies in all material
respects all costs and expenses incurred and the Borrower's best estimate
of all costs and expenses anticipated by the Borrower to be incurred prior
to the latest date on which the Completion Date is scheduled at such time,
as confirmed by the Independent Engineer, to construct and finance the
construction of the Plant in the manner contemplated by the Construction
Documents.
(hh) All projections and budgets (including the Construction Budget
and the Base Case Projections) furnished or to be furnished to the Lender
by or on behalf of the Borrower (A) have been and will be prepared with due
care, (B) fairly represent, and will fairly represent, as of the date of
delivery, in all material respects, the Borrower's expectations as to the
matters covered thereby as of their date, (C) are based on, and will be
based on, as of the date of delivery, reasonable assumptions as to all
factual and legal matters material to the estimates therein (including
interest rates and costs), (D) are and will be, as of the date of delivery,
in all material respects consistent with the provisions of the Transaction
Documents and (E) are, and will be, as of the date of delivery, prepared on
a basis substantially consistent with the corresponding projections and
budgets, if any, previously furnished to the Lender.
(ii) Set forth on Schedule 4.01(ii) hereto is a complete and accurate
list of all real property owned by the Borrower, showing as of the date
hereof the street address, county or other relevant jurisdiction, state,
record owner and book and fair value thereof. The Borrower has good,
marketable and insurable legal title to such real property, free and clear
of all Liens, other than Liens created or permitted by the Loan Documents.
(jj) Set forth on Schedule 4.01(jj) hereto is a complete and accurate
list of all leases of real property under which the Borrower is the lessee,
showing as of the date hereof the street address, county or other relevant
jurisdiction, state, lessor, lessee, expiration date and annual rental cost
thereof. Each such lease is the legal, valid and binding obligation of the
lessor thereof, enforceable in accordance with its terms.
(kk) No Material Adverse Change has occurred since December 31, 1997.
(ll) The Borrower will (i) initiate a review and assessment of all
areas within its and each of its Subsidiaries' business and operations
(including those affected by suppliers, vendors and customers) that could
be adversely affected by the risk that computer applications used by the
Borrower or any of its Subsidiaries, suppliers, vendors or customers may
be unable to recognize and perform properly date-sensitive functions
involving certain dates prior to and any date after December 31, 1999
(such risk, the "YEAR 2000 PROBLEM") and (ii) develop a plan and timeline
for addressing the Year 2000 Problem on a timely basis. Based on the
foregoing, the Borrower believes that all computer applications (including
those of its suppliers, vendors and
customers) that are material to its or any of its Subsidiaries' business
and operations are reasonably expected on a timely basis to be able to
perform properly date-sensitive functions for all dates before and after
January 1, 2000, except to the extent that a failure to do so could not
reasonably be expected to have a Material Adverse Effect.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. AFFIRMATIVE COVENANTS. So long as any Advance shall
remain unpaid or the Lender shall have any Commitment hereunder, the Borrower
will:
(a) COMPLIANCE WITH LAWS, ETC. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all Applicable Laws
and all Governmental Approvals. The Borrower shall notify the Lender,
promptly following the occurrence thereof, of any disputes pending or to
its knowledge threatened between the Borrower or any Governmental
Authority.
(b) PAYMENT OF TAXES, ETC. Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become delinquent,
all Taxes imposed upon it or upon its property or upon other assets of the
Plant; PROVIDED, HOWEVER, that neither the Borrower nor any of its
Subsidiaries shall be required to pay or discharge any such tax,
assessment, charge or claim that is being contested in good faith and by
proper proceedings and as to which appropriate reserves are being
maintained. The Borrower shall notify the Lender, promptly following the
occurrence thereof, of any disputes pending or to its knowledge threatened
between the Borrower and any Governmental Authority relating to claims for
Taxes due.
(c) COMPLIANCE WITH ENVIRONMENTAL LAWS. Comply, and cause each of
its Subsidiaries and all lessees and other Persons operating or occupying
its properties to comply, in all material respects, with all applicable
Environmental Laws and Environmental Permits; obtain and renew and cause
each of its Subsidiaries to obtain and renew all Environmental Permits
necessary for its operations and properties; construct and operate the
Plant in such a manner as to comply with substantially the same
environmental requirements with which Accuride's production facilities in
the State of Kentucky in the United States comply; and conduct, and cause
each of its Subsidiaries to conduct, any investigation, study, sampling and
testing, and undertake any cleanup, removal, remedial or other action
necessary to remove and clean up all Hazardous Materials from any of its
properties, in accordance with the requirements of all Environmental Laws;
PROVIDED, HOWEVER, that neither the Borrower nor any of its Subsidiaries
shall be required to undertake any such cleanup, removal, remedial or other
action to the extent that its obligation to do so is being contested in
good faith and by proper proceedings and appropriate reserves are being
maintained with respect to such circumstances.
(d) MAINTENANCE OF INSURANCE. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such risks
as is usually carried by companies engaged in similar businesses and owning
similar properties in the same general areas in which the Borrower or such
Subsidiary operates; and maintain or cause to be maintained with respect to
construction and operation of the Plant the insurance set forth on
Schedule 5.01(d) required as of the date of determination (the "REQUIRED
INSURANCE").
(e) PRESERVATION OF CORPORATE EXISTENCE, ETC. Preserve and maintain,
and cause each of its Subsidiaries to preserve and maintain, its existence,
legal structure and legal name. The Borrower shall have its principal
place of business and chief executive office in Cienega xx Xxxxxx, X.X.,
Mexico, and shall maintain in such place originals or copies of the
principal books and records relating to its business.
(f) VISITATION RIGHTS. At any reasonable time and from time to time,
upon reasonable notice and during normal business hours, permit the Lender
or any authorized agents or representatives thereof, to examine and make
copies of and abstracts from the records and books of account of, and visit
the properties of, the Borrower and any of its Subsidiaries, and to discuss
the affairs, finances and accounts of the Borrower and any of its
Subsidiaries with any of their officers or directors and with their
independent certified public accountants; provided that the Borrower may,
if it so chooses, be present at or participate in any such discussion.
(g) PREPARATION OF ENVIRONMENTAL REPORTS. At the request of the
Lender, not more frequently than once per year, after receipt by the
Borrower of any notice of non-compliance with Environmental Laws or
knowledge by the Borrower of a Release, provide to the Lender within 60
days after such request, at the expense of the Borrower, an environmental
site assessment report for any of its or its Subsidiaries' properties
described in such request, prepared by an environmental consulting firm
acceptable to the Lender, indicating the presence or absence of Hazardous
Materials and the estimated cost of any compliance, removal or remedial
action in connection with any Hazardous Materials on such properties;
without limiting the generality of the foregoing, if the Lender determines
at any time that a material risk exists that any such report will not be
provided within the time referred to above, the Lender may retain an
environmental consulting firm to prepare such report at the expense of the
Borrower, and the Borrower hereby grants and agrees to cause any Subsidiary
that owns any property described in such request to grant at the time of
such request, to the Lender, such firm and any agents or representatives
thereof an irrevocable non-exclusive license, subject to the rights of
tenants, to enter onto their respective properties to undertake such an
assessment.
(h) KEEPING OF BOOKS. Keep, and cause each of its Subsidiaries to
keep, proper books of record and account, in which full and correct entries
shall be made of all financial transactions and the assets and business of
the Borrower and each such
Subsidiary in accordance with generally accepted accounting principles in
effect from time to time in Mexico.
(i) MAINTENANCE OF PROPERTIES, ETC. Maintain and preserve, and cause
each of its Subsidiaries to maintain and preserve, all of its properties
that are used or useful in the conduct of its business in good working
order and condition, ordinary wear and tear excepted.
(j) CONSTRUCTION AND OPERATION OF PLANT. Construct the Plant and
complete all tasks with respect thereto (x) in accordance with good, sound
engineering practices, (y) in a good workmanlike manner and (z) in
accordance with generally accepted industry practices (each of such
standards referred to in (x), (y) and (z) are herein collectively referred
to as "PRUDENT INDUSTRY PRACTICES"); maintain the Plant in good repair and
from time to time make all repairs and replacements thereto in accordance
with Prudent Industry Practices; maintain all equipment and spare parts
necessary to maintain and repair the Plant as aforesaid; operate the Plant
or cause the Plant to be operated in accordance with Prudent Industry
Practices.
(k) PERFORMANCE OF RELATED DOCUMENTS AND CONSTRUCTION DOCUMENTS.
Perform and observe all of the terms and provisions of each Related
Document and Construction Document to be performed or observed by it,
maintain each such Related Document or Construction Document in full force
and effect, enforce such Related Document or Construction Document in
accordance with its terms, take all such action to such end as may be from
time to time requested by the Lender and, upon the reasonable request of
the Lender, make to each other party to each such Related Document or
Construction Document such demands and requests for information and reports
or for action as the Borrower is entitled to make under such Related
Document or Construction Document.
(l) SEEK AND MAINTAIN GOVERNMENTAL APPROVALS. Seek and maintain in
validity all Governmental Approvals without any modifications thereto that
could have a Material Adverse Effect.
(m) TRANSACTIONS WITH AFFILIATES. Conduct, and cause each of its
Subsidiaries to conduct, all transactions otherwise permitted under the
Loan Documents with any of their Affiliates on terms that are fair and
reasonable and no less favorable to the Borrower or such Subsidiary than it
would obtain in a comparable arm's-length transaction with a Person not an
Affiliate.
(n) NOTICE OF EXTRAORDINARY EVENTS. Notify the Lender promptly after
the discovery by any Senior Officer of the Borrower of the occurrence of:
(i) any casualty loss involving, or condemnation of property
of the Borrower or any of its Subsidiaries having a net book value of
at least $500,000 (or its equivalent in any other currency); and
(ii) any material breach or material default by any party under
any Construction Document;
in each case describing the nature thereof and the action the Borrower
proposes to take with respect thereto.
(o) MAINTENANCE OF SECURITY INTERESTS. Preserve or cause to be
preserved the security interests granted under the Collateral Documents and
undertake all actions which are necessary or appropriate in the reasonable
judgment of the Lender to (A) maintain the Lender's security interest in
the Collateral under the Collateral Documents in full force and effect at
all times (including the priority thereof), and (B) preserve and protect
said Collateral and protect and enforce the Borrower's or its Subsidiaries'
rights and title and the rights of the Lender to said Collateral, including
the making or delivery of all filings and recordations, the payments of
fees and other charges and the issuance of supplemental information.
(p) SECURITY INTEREST IN NEWLY ACQUIRED PROPERTY. Upon the
acquisition of any material interest in property (including, without
limitation, shares of stock of any Subsidiary of the Borrower) not covered
by any Collateral Document, execute, deliver and record either a supplement
to an existing applicable Collateral Document, or a new applicable
Collateral Document, in either case satisfactory in form and substance to
the Lender, subjecting such interests to the Lien and security interests
created by such Collateral Document and take all steps to ensure that the
security interest in such interest will be a valid, effective and perfected
security interest on terms comparable to the security interest of the
Lender in the Collateral under the then existing Collateral Documents.
(q) GUARANTIES BY NEW SUBSIDIARIES. Cause each Subsidiary hereafter
acquired or formed by the Borrower, other than a Subsidiary of a Subsidiary
of the Borrower, to execute and deliver to the Lender, upon such
acquisition or formation, a guaranty of payment of all the Obligations of
the Borrower hereunder and under the Notes, such guaranty to be governed by
the law of the State of New York and to be in form and substance
satisfactory to the Lender, together with a favorable legal opinion
addressed to the Lender covering the authorization, execution and delivery
by such Subsidiary of such guaranty and the legality, binding effect and
enforceability against such Subsidiary of such guaranty.
SECTION 5.02. NEGATIVE COVENANTS. So long as any Advance shall
remain unpaid or the Lender shall have any Commitment hereunder, the Borrower
will not, at any time:
(a) LIENS, ETC. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist, any
Lien on or with respect to any of its properties of any character whether
now owned or hereafter acquired, or sign or suffer to exist, or permit any
of its Subsidiaries to sign or suffer to exist, any
security agreement with respect to any of its properties of any character
whether now owned or hereafter acquired, or assign, or permit any of its
Subsidiaries to assign, any accounts or other right to receive income,
EXCLUDING, HOWEVER, from the operation of the foregoing restrictions
the following:
(i) Liens created under the Loan Documents,
(ii) Permitted Liens,
(iii) Liens existing on the date hereof and described on
Schedule 5.02(a)(iii) hereto,
(iv) (A) purchase money Liens upon or in real property or
equipment acquired or held by the Borrower or any of its Subsidiaries
in the ordinary course of business to secure the purchase price of
such property or equipment or to secure Debt incurred solely for the
purpose of financing the acquisition, construction or improvement of
any such property or equipment to be subject to such Liens, or Liens
existing on any such property or equipment at the time of acquisition
(other than any such Liens created in contemplation of such
acquisition that do not secure the purchase price), or extensions,
renewals or replacements of any of the foregoing for the same or a
lesser amount and (B) Liens to secure Debt incurred within 270 days of
the acquisition, construction or improvement of fixed or capital
assets to finance the acquisition, construction or improvement of such
fixed or capital assets or otherwise incurred during such 270 day
period in respect of Capital Expenditures permitted pursuant to
section 5.02(o); PROVIDED, HOWEVER, that no such Lien shall extend to
or cover any property other than the property or equipment being
acquired, constructed or improved, and no such extension, renewal or
replacement shall extend to or cover any property not theretofore
subject to the Lien being extended, renewed or replaced; and PROVIDED
FURTHER, HOWEVER, that the aggregate principal amount of the Debt
secured by Liens permitted by this clause (iv) shall not exceed the
aggregate amount permitted under Section 5.02(b)(iv) at any time
outstanding and that any such Debt shall not otherwise be prohibited
by the terms of this Agreement,
(v) Liens arising in connection with Capitalized Leases
permitted under Section 5.02(b)(iv); PROVIDED that no such Lien shall
extend to or cover any Collateral or assets other than the assets
subject to such Capitalized Leases,
(vi) (A) Liens upon or in fixed or capital assets acquired by
the Borrower to secure the purchase price of such assets or to secure
Debt incurred solely for the purpose of financing the acquisition of
such assets to be subject to such Liens, or Liens existing on any such
assets at the time of such acquisition (other than any such Liens
created in contemplation of such acquisition that do
not secure the purchase price), or extensions, renewals or
replacements of any of the foregoing for the same or a lesser amount,
and (B) Liens upon or in any property acquired or held by any
Subsidiary of the Borrower to secure the purchase price of such
property acquired by such Subsidiary or the purchase price of such
Subsidiary acquired by the Borrower, or to secure Debt incurred
solely for the purpose of financing such acquisition by such
Subsidiary of any such property or such acquisition by the Borrower
of such Subsidiary, or Liens existing on any such property at the
time of such acquisition (other than any such Liens created in
contemplation of such acquisition that do not secure the purchase
price), or extensions, renewals or replacements of any of the
foregoing for the same or a lesser amount; PROVIDED, HOWEVER, that
any such Liens under subclause (A) or (B) above in connection with any
such acquisition will be permitted under this clause (vi) only if the
following conditions are satisfied:
(V) the ratio of (1) the Consolidated Debt of the
Borrower and its Subsidiaries as of such date after giving effect
to such acquisition and to the related Debt to be incurred
pursuant to Section 5.02(b)(v), to (2) the Consolidated EBITDA of
the Borrower and its Subsidiaries for the Measurement Period
ending with the end of the most recent Fiscal Quarter after
giving effect to such acquisition and including the EBITDA during
such Measurement Period relating to the assets and property so
being acquired as though such assets and property were owned by
the Borrower and/or its Subsidiaries, as appropriate, during such
Measurement Period, (the "PRO FORMA EBITDA"), is less than the
ratio of (I) the Consolidated Debt of the Borrower and its
Subsidiaries as of such date without giving effect to such
acquisition, to (II) the Consolidated EBITDA of the Borrower and
its Subsidiaries for such Measurement Period without giving
effect to such acquisition;
(W) the ratio of (1) the Pro Forma EBITDA to (2) the
sum of (a) cash interest payable on, and amortization of debt
discount in respect of, all Debt scheduled to be paid during the
period of 12 months next succeeding such date for the Borrower
and its Subsidiaries after giving effect to such acquisition and
to the related Debt to be incurred pursuant to Section
5.02(b)(v), PLUS (b) principal amounts of all Debt (other than
repayments of Working Capital borrowings as a result of a
non-extension of the Working Capital Commitment) scheduled to be
paid during the period of 12 months next succeeding such date
for the Borrower and its Subsidiaries after giving effect to such
acquisition and to the related Debt to be incurred pursuant to
Section 5.02(b)(v), is greater than the ratio of (I) the
Consolidated EBITDA of the Borrower and its Subsidiaries for such
Measurement Period without giving effect to such acquisition, to
(II) the sum of (a) cash interest payable on, and amortization of
debt discount in respect of, all Debt scheduled to be paid during
the period of 12 months next succeeding such date for the
Borrower and its Subsidiaries without giving effect to such
acquisition, PLUS (b) principal amounts of all Debt
(other than repayments of Working Capital borrowings as a result
of a non-extension of the Working Capital Commitment) scheduled
to be paid during the period of 12 months next succeeding such
date for the Borrower and its Subsidiaries without giving effect
to such acquisition;
(X) the total amount of Debt incurred in connection
with such acquisition shall not exceed the greater of (1) 2.0
TIMES the EBITDA during such Measurement Period relating solely
to the assets and property so being acquired as though such
assets and property were owned by the Borrower and/or its
Subsidiaries, as appropriate, during such Measurement Period and
(2) an amount of Debt which when added to the Debt already
outstanding would not in the aggregate exceed 2.75 TIMES the Pro
Forma EBITDA;
(Y) no payment of principal of the Debt incurred in
connection with such acquisition shall, by the terms of such
Debt, be due and payable until after the final maturity date of
the Advances; and
(Z) the terms of the Debt incurred in connection with
such acquisition shall be in all other respects reasonably
acceptable to the Lender,
(vii) other Liens securing Obligations of the Borrower
and its Subsidiaries in an aggregate principal amount not to exceed
$1,000,000 at any time outstanding, and
(viii) Liens on any accounts receivable incurred in connection
with the disposition of such accounts receivable pursuant to Section
5.02(d)(v).
(b) DEBT. Create, incur, assume or suffer to exist, or permit any of
its Subsidiaries to create, incur, assume or suffer to exist, any Debt
other than, in the case of the Borrower and any of its Subsidiaries:
(i) Debt under the Loan Documents,
(ii) the Surviving Debt,
(iii) the Replacement Debt, provided that:
(A) such Debt is incurred only after the Working Capital
Termination Date as defined in clause (x) of the definition
thereof contained in Section 1.01;
(B) such Debt is incurred only after all outstanding
Working Capital Advances shall have been, or shall be
concurrently with the incurrence
of such Debt, paid or prepaid in full, together with all
accrued and unpaid interest thereon and other fees and
amounts related to the Working Capital Advances and
Working Capital Commitments; and
(C) such Debt is for a maximum amount no greater than
$7,500,000 or the equivalent thereof at any time outstanding,
(iv) Debt secured by Liens permitted by Section 5.02(a)(iv) and
Capitalized Leases not to exceed an aggregate amount equal to $500,000
at any time outstanding,
(v) Debt secured by Liens permitted by Section 5.02(a)(vi),
(vi) Debt of any Person existing at the time such Person is
merged into or consolidated with, or acquired by, the Borrower or any
of its Subsidiaries or becomes a Subsidiary of the Borrower in
accordance with the provisions of Section 5.02(e)(vi); PROVIDED that
such Debt was not incurred in contemplation of such merger,
consolidation or investment; and PROVIDED FURTHER that the aggregate
amount of all Debt incurred hereunder shall in no event exceed
$1,000,000 in the aggregate at any time outstanding,
(vii) indorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business,
(viii) Debt consisting of guaranty Obligations in the ordinary
course of business of the obligations of suppliers, customers,
franchisees and licensees of the Borrower and its Subsidiaries,
(ix) Debt in respect of any bankers' acceptance, letter of
credit, warehouse receipt or similar facilities entered into in the
ordinary course of business,
(x) Debt in respect of Hedge Agreements incurred in the
ordinary course of business and consistent with prudent business
practice, and
(xi) Subordinated Debt of the Borrower not to exceed in the
aggregate $10,000,000 at any time outstanding, PROVIDED that such
Subordinated Debt may be incurred on any date only if the ratio of
Consolidated EBITDA of the Borrower and its Subsidiaries for the
Measurement Period ending with the end of the most recent Fiscal
Quarter to the sum of (1) cash interest payable on, and amortization
of debt discount in respect of, all Debt of the Borrower and its
Subsidiaries scheduled to be paid during the period of 12 months next
succeeding such date, PLUS (2) principal amounts of all Debt payable
(other than repayments of Working Capital borrowings as a result of a
non-extension of the Working Capital Commitment) by the Borrower and
its Subsidiaries scheduled to be paid
during the period of 12 months next succeeding such date, PLUS
(3) interest on such Subordinated Debt to be incurred on such date,
scheduled to be paid during the period of 12 months next
succeeding such date, is not less than 2.75 to 1; PROVIDED,
FURTHER, that Subordinated Debt which does not require interest
to be paid in cash until such ratio has been satisfied may be
issued notwithstanding the failure to satisfy such ratio; and
PROVIDED, FURTHER, that no payment of principal of or deferred
interest on such Subordinated Debt shall by the terms of such Debt be
due and payable until after the Advances have all been paid in full in
cash; and such Subordinated Debt shall be in all other respects on
terms reasonably acceptable to the Lender,
(xii) Subordinated Debt of the Borrower resulting solely and
directly from the lending of Funds To Complete (as defined in the
Completion Guaranty) by the Shareholders pursuant to Section
2.01(b)(ii) of the Completion Guaranty, PROVIDED that on the date of
such lending no event shall have occurred and shall be continuing, or
would result from such lending, that constitutes a Default, and
(xiii) Subordinated Debt of the Borrower the proceeds of which
are used solely and directly to pay or prepay (pursuant to Section
2.05(a)) the Term Advances then outstanding.
(c) MERGERS, ETC. Merge into or consolidate with any Person or
permit any Person to merge into it, or permit any of its Subsidiaries to do
so, or effect or permit any of its Subsidiaries to effect an ESCISION,
except that (i) any Subsidiary of the Borrower may merge into or
consolidate with the Borrower or with any other Subsidiary of the Borrower
provided that, in the case of any such merger or consolidation, the Person
formed by such merger or consolidation shall be a wholly owned Subsidiary
of the Borrower (excluding qualifying shares) and (ii) any Subsidiary of
the Borrower may merge into any other Person or permit any other Person to
merge into it and (iii) any Subsidiary of the Borrower may split up,
provided that the resulting companies shall be Subsidiaries of the
Borrower; PROVIDED, HOWEVER, that in each case, immediately after giving
effect thereto, no event shall occur and be continuing as a result of said
merger or consolidation that constitutes a Default.
(d) SALES, ETC., OF ASSETS. Sell, lease, transfer or otherwise
dispose of, or permit any of its Subsidiaries to sell, lease, transfer or
otherwise dispose of, any assets or grant any option or other right to
purchase, lease or otherwise acquire any assets other than:
(i) assets transferred or disposed of in the ordinary course
of the Borrower's or its Subsidiaries' business,
(ii) assets that are replaced by other assets used in the
Borrower's or its Subsidiaries' business,
(iii) assets transferred or disposed of as a result of an
expropriation of assets that does not create an Event of Default,
(iv) in any Fiscal Year, obsolete assets or assets not required
in connection with the operation of the Plant; PROVIDED that any
single disposition of such property in excess of $100,000 (or its
equivalent in any other currency) shall only be permitted with the
prior written consent of the Independent Engineer or the Lender, and
(v) accounts receivable, PROVIDED that all proceeds from any
such disposition of accounts receivable are applied forthwith to
prepay Term Advances pursuant to Section 2.05(a).
(e) INVESTMENTS IN OTHER PERSONS. Make or hold, or permit any of its
Subsidiaries to make or hold, any Investment in any Person other than:
(i) Permitted Investments;
(ii) Investments existing on the date hereof and described on
Schedule 5.02(e)(ii) hereto;
(iii) Investments in Hedge Agreements permitted under Section
5.02(b)(ix);
(iv) loans and advances to employees in the ordinary course of
business as presently conducted in an aggregate amount not to exceed
$250,000 at any time outstanding;
(v) Investments received in connection with the bankruptcy or
reorganization of suppliers or customers and in settlement of
delinquent obligations of, and other disputes with, customers arising
in the ordinary course of business; and
(vi) other Investments in an aggregate amount invested not to
exceed $5,000,000 (or its equivalent in any other currency) as of the
date on which the Investment was made); PROVIDED that, with respect to
Investments made under this clause (vi): (1) any newly acquired or
created Subsidiary of the Borrower or any of its Subsidiaries shall be
a wholly-owned Subsidiary thereof except as otherwise required under
Mexican law; (2) immediately before and after giving effect thereto,
no Default shall have occurred and be continuing as a result
therefrom; and (3) any business acquired or invested in pursuant to
this clause (vi) shall be in the same line of business as the business
of the Borrower or any of its Subsidiaries.
(f) DIVIDENDS, ETC. Declare or pay any dividends, purchase, redeem,
retire, defease or otherwise acquire for value any of its capital stock or
any warrants, rights or options to acquire such capital stock, now or
hereafter outstanding, return any capital to
its stockholders as such, make any distribution of assets, capital stock,
warrants, rights, options, obligations or securities to its stockholders
as such or issue or sell any capital stock or any warrants, rights or
options to acquire such capital stock, or permit any of its Subsidiaries
to purchase, redeem, retire, defease or otherwise acquire for value any
capital stock of the Borrower or any warrants, rights or options to
acquire such capital stock or to issue or sell any capital stock or any
warrants, rights or options to acquire such capital stock.
(g) CHANGE IN NATURE OF BUSINESS. Make, or permit any of its
Subsidiaries to make, any material change in the nature of its business as
carried on at the date hereof.
(h) AMENDMENTS TO CHARTER DOCUMENTS, DEBT, MATERIAL AGREEMENTS, ETC.
Amend or otherwise modify, or permit any of its Subsidiaries to amend or
modify, (i) its ESCRITURA CONSTITUTIVA or bylaws in any manner that would
have a Material Adverse Effect, (ii) any Construction Document, (iii) any
Related Document, or (iv) any other material agreement, in each case in any
way that would have a Material Adverse Effect.
(i) ACCOUNTING CHANGES. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in (i) accounting policies or
reporting practices, except as required by generally accepted accounting
principles or (ii) its Fiscal Year.
(j) PREPAYMENTS, ETC., OF DEBT. Prepay, redeem, purchase, defease or
otherwise satisfy prior to the scheduled maturity thereof in any manner, or
make any payment in violation of any subordination terms of, any Debt,
other than (i) the prepayment of the Advances in accordance with the terms
of this Agreement and (ii) regularly scheduled or required repayments or
redemptions of Surviving Debt, or amend, modify or change in any manner any
term or condition of any Surviving Debt, or permit any of its Subsidiaries
to do any of the foregoing other than to prepay any Debt payable to the
Borrower.
(k) AMENDMENT, ETC., OF RELATED DOCUMENTS. Cancel or terminate any
Related Document or consent to or accept any cancellation or termination
thereof, amend, modify or change in any manner any term or condition of any
Related Document or give any consent, waiver or approval thereunder, waive
any default under or any breach of any term or condition of any Related
Document, agree in any manner to any other amendment, modification or
change of any term or condition of any Related Document or take any other
action in connection with any Related Document that would materially impair
the value of the interest or rights of the Borrower thereunder or that
would materially impair the rights or interests of the Lender, or permit
any of its Subsidiaries to do any of the foregoing.
(l) AMENDMENT, ETC., OF CONSTRUCTION DOCUMENTS. Cancel or terminate
any Construction Document or consent to or accept any cancellation or
termination thereof, amend or otherwise modify any Construction Document or
give any waiver thereunder,
waive any default under or breach of any Construction Document, agree in
any manner to any other amendment, modification or change of any term or
condition of any Construction Document or take any other action in
connection with any Construction Document, which, as to any of the
foregoing, would materially impair the value of the interest or rights
of the Borrower thereunder or that would materially impair the interest
or rights of the Lender, or permit any of its Subsidiaries to do any
of the foregoing.
(m) NEGATIVE PLEDGE. Enter into or suffer to exist, or permit any of
its Subsidiaries to enter into or suffer to exist, any agreement
prohibiting or conditioning the creation or assumption of any Lien upon any
of its property or assets other than (i) in favor of the Lender, (ii) in
connection with any Surviving Debt, (iii) in connection with any
Replacement Debt or (iv) in connection with any Liens permitted to be
incurred pursuant to Section 5.02(a) with respect to the property which is
the subject of such Liens, provided that any agreement in connection with a
Lien permitted by Section 5.02(a) will not prevent the creation, assumption
or existence of any future Lien on other property of the Borrower or any of
its Subsidiaries or restrict or have any effect on any existing Lien.
(n) PARTNERSHIPS, ETC. Become a general partner in any general or
limited partnership or joint venture, or permit any of its Subsidiaries to
do so, other than any Subsidiary the sole assets of which consist of its
interest in such partnership or joint venture.
(o) CAPITAL EXPENDITURES. Make, or permit any of its Subsidiaries to
make, any Capital Expenditures that would cause the aggregate amount of all
Capital Expenditures made by the Borrower and its Subsidiaries in any
Fiscal set forth below to exceed the amount set forth below for such Fiscal
Year:
Fiscal Year Amount
----------- ------
1998 $23,000,000
1999 10,000,000
2000 5,000,000
2001 5,000,000
2002 5,000,000
PROVIDED that (i) the unused portion of Capital Expenditures permitted in
any Fiscal Year and not used in such Fiscal Year may be carried over and
added to the amount otherwise permitted in the immediately succeeding
Fiscal Year, it being understood that for purposes of the foregoing, the
Borrower and its Subsidiaries shall be deemed to have used the amount
originally available during the succeeding Fiscal Year prior to using any
such carry-over amount, (ii) the aggregate amount carried over pursuant to
the preceding clause (i) may not exceed 50% of the total amount of Capital
Expenditures permitted during the Fiscal Year from which such Capital
Expenditures are carried over, and (iii) each Capital Expenditure shall be
made in accordance with the then applicable Capital Budget.
(p) LEASE OBLIGATIONS. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist,
any obligations as lessee (i) for the rental or hire of real or personal
property in connection with any sale and leaseback transaction, or (ii) for
the rental or hire of real or personal property of any kind under leases or
agreements to lease including Capitalized Leases having an original term of
one year or more that would cause the direct and contingent liabilities of
the Borrower and its Subsidiaries, on a Consolidated basis, in respect of
all such obligations to exceed $75,000 (or its equivalent in any other
currency) payable in any period of 12 consecutive months.
SECTION 5.03. REPORTING REQUIREMENTS. So long as any Advance shall
remain unpaid or the Lender shall have any Commitment hereunder, the Borrower
will furnish to the Lender:
(a) DEFAULT NOTICE. As soon as possible and in any event within two
days after the occurrence of each Default or any event, development or
occurrence reasonably likely to have a Material Adverse Effect continuing
on the date of such statement, a statement of a Senior Officer of the
Borrower setting forth details of such Default and the action that the
Borrower has taken and proposes to take with respect thereto.
(b) QUARTERLY FINANCIALS. As soon as available and in any event
within 45 days after the end of each of the first three Fiscal Quarters,
Consolidated balance sheets of the Borrower and its Subsidiaries as of the
end of such Fiscal Quarter and Consolidated statements of income and
Consolidated statements of cash flows of the Borrower and its Subsidiaries
for the period commencing at the end of the previous Fiscal Quarter and
ending with the end of such Fiscal Quarter and Consolidated statements of
income and Consolidated statements of cash flows of the Borrower and its
Subsidiaries for the period commencing at the end of the previous Fiscal
Year and ending with the end of such Fiscal Quarter, setting forth in each
case in comparative form the corresponding figures for the corresponding
period of the preceding Fiscal Year, all in reasonable detail and duly
certified (subject to year-end audit adjustments) by a Senior Officer of
the Borrower as having been prepared in accordance with GAAP, together with
(i) a certificate of such Senior Officer stating that no Default has
occurred and is continuing or, if a Default has occurred and is continuing,
a statement as to the nature thereof and the action that the Borrower has
taken and proposes to take with respect thereto and (ii) a schedule in form
satisfactory to the Lender of the computations used by the Borrower in
determining compliance with the covenants contained in subsections 5.04(a)
through (e) and Section 5.02(o).
(c) ANNUAL FINANCIALS. As soon as available and in any event within
120 days after the end of each Fiscal Year, a copy of the annual audit
report for such year for the Borrower and its Subsidiaries, including
therein a Consolidated balance sheets of the Borrower and its Subsidiaries
as of the end of such Fiscal Year and a
Consolidated statement of income and a Consolidated statement of cash
flows of the Borrower and its Subsidiaries for such Fiscal Year, in each
case accompanied by an opinion that shall be unqualified as to the scope
of the audit and as to the going concern status of the Borrower and its
Subsidiaries taken as a whole, of Deloitte & Touche or its affiliated
Mexican firm or of any other independent public accountants of
recognized standing acceptable to the Lender, together with (i) a
certificate of such accounting firm to the Lender stating that in the
course of the regular audit of the business of the Borrower and its
Subsidiaries, which audit was conducted by such accounting firm in
accordance with generally accepted auditing standards, such accounting
firm has obtained no knowledge that a Default has occurred and is
continuing, or if, in the opinion of such accounting firm, a Default
has occurred and is continuing, a statement as to the nature thereof,
(ii) a schedule in form satisfactory to the Lender of the computations used
by a Senior Officer in determining, as of the end of such Fiscal Year,
compliance with the covenants contained in subsections 5.04(a) through (e)
and Section 5.02(o) and (iii) a certificate of a Senior Officer of the
Borrower stating that no Default has occurred and is continuing or, if a
default has occurred and is continuing, a statement as to the nature
thereof and the action that the Borrower has taken and proposes to take
with respect thereto.
(d) ANNUAL FORECASTS. As soon as available and in any event no later
than 15 days before the end of each Fiscal Year, forecasts prepared by
management of the Borrower, in form satisfactory to the Lender, of balance
sheets, income statements and cash flow statements on a monthly basis for
the Fiscal Year following such Fiscal Year then ended and on an annual
basis for the four subsequent Fiscal Years thereafter.
(e) LITIGATION. Promptly after the commencement thereof, notice of
all actions, suits, investigations, litigation and proceedings before any
court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting the Borrower or any of its
Subsidiaries of the type described in Section 4.01(i), that reasonably
could be expected to result in a Material Adverse Effect.
(f) SECURITIES REPORTS. Promptly after the filing thereof, copies of
all regular, periodic and special reports, and all registration statements,
that the Borrower or any of its Subsidiaries files with the United States
Securities and Exchange Commission or any similarly situated Governmental
Authority, or with any national securities exchange.
(g) CREDITOR REPORTS. Promptly after the furnishing thereof, copies
of any statement or report furnished to any other holder of the securities
of the Borrower or of any of its Subsidiaries pursuant to the terms of any
indenture, loan or credit or similar agreement and not otherwise required
to be furnished to the Lender pursuant to any other clause of this
Section 5.03.
(h) AGREEMENT NOTICES. Promptly upon receipt thereof, copies of all
notices, requests and other documents received by the Borrower or any of
its Subsidiaries under or pursuant to any Related Document or Construction
Document regarding or related to any breach or default by any party thereto
or any other event that could materially impair the value of the interests
or the rights of the Borrower or otherwise have a Material Adverse Effect
and, from time to time upon request by the Lender, such information and
reports regarding the Related Documents and the Construction Documents as
the Lender may reasonably request.
(i) ENVIRONMENTAL CONDITIONS. Promptly after the assertion or
occurrence thereof, notice of any Environmental Action against or of any
noncompliance by the Borrower or any of its Subsidiaries with any
Environmental Law or Environmental Permit that (i) could reasonably be
expected to have a Material Adverse Effect or (ii) cause any property
described in the Industrial Mortgage to be subject to any restrictions on
ownership, occupancy, use or transferability under any Environmental Law.
(j) REAL PROPERTY. As soon as available and in any event within 30
days after the end of each Fiscal Year, a report supplementing
Schedules 4.01(ii) and 4.01(jj) hereto, including an identification of all
real and leased property disposed of by the Borrower or any of its
Subsidiaries during such Fiscal Year, a list and description (including the
street address, county or other relevant jurisdiction, state, record owner,
book value thereof, and in the case of leases of property, lessor, lessee,
expiration date and annual rental cost thereof) of all real property
acquired or leased during such Fiscal Year and a description of such other
changes in the information included in such Schedules as may be necessary
for such Schedules to be accurate and complete.
(k) INSURANCE. As soon as available and in any event within 30 days
after the end of each Fiscal Year, a report summarizing the insurance
coverage, including any Required Insurance (specifying type, amount and
carrier), in effect for the Borrower and its Subsidiaries and containing
such additional information as the Lender may reasonably specify.
(l) CONSTRUCTION REPORT. Not later than 30 days after the end of
each month prior to the Completion Date, a construction report prepared by
or at the request of the Borrower describing the construction of the Plant
conducted during such month and including physical progress to date.
(m) ANNUAL OPERATING BUDGET AND CAPITAL BUDGET. Not later than 15
days prior to the beginning of each Fiscal Year, the Annual Operating
Budget and Capital Budget prepared by the Borrower for such Fiscal Year.
The Borrower will furnish promptly to the Lender any material changes to
such Annual Operating Budget or Capital Budget or any forecasts made in
connection with any such budgets.
(n) COMPARISONS TO BUDGETS. Concurrently with the delivery of the
financial statements referred to in subsections 5.03(c) and (d), a profit
and loss account and a statement of sources and application of funds
showing actual expenditures to date against the applicable Capital Budget
and Annual Operating Budget.
(o) NOTICE OF AMENDMENTS TO DOCUMENTS. (i) At least five Business
Days prior to the date of execution thereof, a copy of each amendment or
other modification to the charter, bylaws, Joint Venture Agreement or other
organizational documents of the Borrower or any of its Subsidiaries, and
(ii) within at least five Business Days after the execution thereof, or
copy of each amendment, waiver or other modification to any documents
evidencing or relating to any Debt, any Construction Document, or any
Related Document.
(p) NOTICE OF INSUFFICIENT RESOURCES. If at any time the Borrower
believes that the funds on deposit in the Borrower's Account together with
the funds available to be drawn under the remaining unused Commitments plus
the funds reasonably projected by the Borrower to be available from its
operating cash flow through March 31, 2000 will not be sufficient for
Completion of the Plant, prompt notice to such effect.
(q) OTHER INFORMATION. Such other information respecting the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower or any of its Subsidiaries as the
Lender or the Independent Engineer may from time to time reasonably
request.
SECTION 5.04. FINANCIAL COVENANTS. So long as any Advance shall
remain unpaid or the Lender shall have any Commitment hereunder, the Borrower
will:
(a) DEBT TO EBITDA. Maintain at the end of each Fiscal Quarter a
ratio of Consolidated Debt of the Borrower and its Subsidiaries as of the
end of such Fiscal Quarter to Consolidated EBITDA of the Borrower and its
Subsidiaries for each Measurement Period ending with the end of such Fiscal
Quarter set forth below, of not more than the ratio set forth below
opposite such Measurement Period:
Measurement Period Ending Ratio (to 1)
------------------------- ------------
3rd Quarter 1998 6.75
4th Quarter 1998 6.25
1st Quarter 1999 5.875
2nd Quarter 1999 5.5
3rd Quarter 1999 5.25
4th Quarter 1999 4.75
1st Quarter 2000 4.5
2nd Quarter 2000 4.0
3rd Quarter 2000 3.75
4th Quarter 2000 3.5
1st Quarter 2001 3.25
2nd Quarter 2001 3.0
3rd Quarter 2001 3.0
4th Quarter 2001 2.75
1st Quarter 2002 2.0
2nd Quarter 2002 2.0
3rd Quarter 2002 2.0
4th Quarter 2002 2.0
(b) INTEREST COVERAGE RATIO. Maintain at all times a ratio of
(i) Consolidated EBITDA of the Borrower and its Subsidiaries to (ii) the
sum of cash interest payable on all Debt PLUS the portion of any payments
made in connection with Capitalized Leases allocable to interest expense,
in each case of the Borrower and its Subsidiaries for each Measurement
Period ending with the end of such Fiscal Quarter set forth below, of not
less than the ratio for such Measurement Period set forth below:
Measurement Period Ending Ratio (to 1)
------------------------- ------------
3rd Quarter 1998 1.75
4th Quarter 1998 1.75
1st Quarter 1999 1.875
2nd Quarter 1999 1.875
3rd Quarter 1999 2.0
4th Quarter 1999 2.25
1st Quarter 2000 2.25
2nd Quarter 2000 2.25
3rd Quarter 2000 2.5
4th Quarter 2000 2.75
1st Quarter 2001 2.75
2nd Quarter 2001 2.75
3rd Quarter 2001 3.0
4th Quarter 2001 3.0
1st Quarter 2002 3.0
2nd Quarter 2002 3.0
3rd Quarter 2002 3.0
4th Quarter 2002 3.0
(c) FIXED CHARGE COVERAGE RATIO. Maintain at all times a ratio of
Consolidated EBITDA of the Borrower and its Subsidiaries to the sum of
(i) cash interest payable on, and amortization of debt discount in respect
of, all Debt PLUS (ii) principal amounts of all Debt payable (other than
repayments of Working Capital borrowings as a result of a non-extension of
the Working Capital Commitment), in each case, by the Borrower and its
Subsidiaries for each Measurement Period ending with the end of such Fiscal
Quarter set forth below, of not less than the ratio for such Measurement
Period set forth below:
Measurement Period Ending Ratio (to 1)
------------------------- ------------
3rd Quarter 1998 1.75
4th Quarter 1998 1.75
1st Quarter 1999 1.875
2nd Quarter 1999 1.875
3rd Quarter 1999 2.0
4th Quarter 1999 2.25
1st Quarter 2000 2.25
2nd Quarter 2000 2.25
3rd Quarter 2000 2.5
4th Quarter 2000 2.75
1st Quarter 2001 2.75
2nd Quarter 2001 1.25
3rd Quarter 2001 1.25
4th Quarter 2001 1.25
1st Quarter 2002 1.15
2nd Quarter 2002 1.15
3rd Quarter 2002 1.15
4th Quarter 2002 1.15
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. ACCELERATION AFTER DEFAULT. If any Event of Default
occurs and is continuing (whether it is voluntary or involuntary, or results
from operation of law or otherwise), then, and in any such event, the Lender
(i) may, in its sole discretion, by notice to the Borrower, declare the
obligation of the Lender to make either or both of the Term Advances and Working
Capital Advances to be terminated, whereupon the same shall forthwith terminate,
and (ii) may, in its sole discretion, by notice to the Borrower, with respect to
the Working Capital Advances, the Term Advances, or both, declare the relevant
Notes, all interest thereon and all other amounts payable under this Agreement
and the other Loan Documents to be forthwith due and payable, whereupon the
relevant Notes, all such interest and all such amounts shall become and be
forthwith due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Borrower;
PROVIDED, HOWEVER, that in the event of Bankruptcy with respect to any Loan
Party, (x) the obligation of the Lender to make Advances shall automatically be
terminated and (y) the Notes, all such interest and all such amounts shall
automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by
the Borrower.
SECTION 6.02. EVENTS OF DEFAULT. If any of the following events
("EVENTS OF DEFAULT") shall occur and be continuing:
(a) the Borrower shall (i) fail to pay any principal of any Advance
when the same shall become due and payable or (ii) fail to pay any interest
on any Advance, or any fees payable pursuant to Section 2.07, or any other
amounts owing by it under any Loan Document, in each case within two
Business Days after the same becomes due and payable; or
(b) any representation or warranty made by any Loan Party (or any of
its officers) under or in connection with any Loan Document shall prove to
have been incorrect in any material respect when made; or
(c) the Borrower shall fail to perform or observe any term, covenant
or agreement contained in Section 2.11, 5.01(e), 5.02, 5.03 or 5.04; or
(d) any Loan Party shall fail to perform any other term, covenant or
agreement contained in any Loan Document on its part to be performed or
observed if such failure shall remain unremedied for 10 days after the
earlier of the date on which (A) any Senior Officer of the Borrower becomes
aware of such failure or (B) written notice thereof shall have been given
to the Borrower by the Lender; or
(e) the Borrower or any of its Subsidiaries shall fail to pay any
principal of, premium or interest on or any other amount payable in respect
of any Debt that is outstanding in a principal amount of at least $750,000
(or the equivalent in any other currency) either individually or in the
aggregate (but excluding Debt outstanding hereunder) of such Loan Party or
such Subsidiary (as the case may be), when the same becomes due and payable
(whether by scheduled maturity, required prepayment, acceleration, demand
or otherwise); or any other event shall occur or condition shall exist
under any agreement or instrument relating to any such Debt, if the effect
of such event or condition is to accelerate, or to permit the acceleration
of, the maturity of such Debt or otherwise to cause, or to permit the
holder thereof to cause, such Debt to mature; or any such Debt shall be
declared to be due and payable or required to be prepaid or redeemed (other
than by a regularly scheduled required prepayment or redemption), purchased
or defeased, or an offer to prepay, redeem, purchase or defease such Debt
shall be required to be made, in each case prior to the stated maturity
thereof; or
(f) any Loan Party or any of its Subsidiaries shall make a general
assignment for the benefit of creditors; or any Bankruptcy proceeding shall
be instituted by or against any Loan Party or any of its Subsidiaries and,
in the case of any such proceeding instituted against it (but not
instituted by it) that is being diligently contested by it in good faith,
either such proceeding shall remain undismissed or unstayed for a period of
60 days or any of the actions sought in such proceeding shall occur; or any
Loan Party or any of its Subsidiaries shall take any corporate action to
authorize any of the actions set forth above in this subsection (f); or
(g) any judgment or order for the payment of money in excess of
$750,000 (or the equivalent in any other currency) shall be rendered
against the Borrower or any of its Subsidiaries and either (i) enforcement
proceedings shall have been commenced by any creditor upon such judgment or
order or (ii) there shall be any period of 60 consecutive days during which
a stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; or
(h) any non-monetary judgment or order shall be rendered against any
Loan Party or any of its Subsidiaries that could have a Material Adverse
Effect, and there shall be any period of 60 consecutive days during which a
stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; or
(i) any provision of any Loan Document after delivery thereof
pursuant to Section 3.01, 3.02, 3.03, 5.01(p) or 6.02(k) shall for any
reason cease to be valid and binding on or enforceable against any Loan
Party to it, or any such Loan Party shall so state in writing, EXCEPT, in
the case of the Completion Guaranty only, to the extent that the Lender
shall have been furnished such insurance, guaranty or other agreement in
form and substance acceptable to the Lender, duly executed by a party or
parties acceptable to the Lender, in substitution for the Completion
Guaranty; or
(j) any Collateral Document after delivery thereof pursuant to
Section 3.01, 5.01(p) or 6.02(k) shall for any reason (other than pursuant
to the terms thereof) cease to create a valid and perfected first priority
Lien on and security interest in the Collateral purported to be covered
thereby; or
(k) either Accuride or IASA shall, within 5 Business Days after the
cessation of contractual restrictions binding on IASA contained in the Acta
de Emision de Obligaciones de Industria Automotriz, S.A. de C.V.
con Garantia Fiduciaria y Solidaria (IASASA) 92 (Indenture for the
Issuance of Bonds of IASA with Fiduciary and Joint Guaranty) evidenced
in public deed 14956 granted on September 2, 1992 before Notary Public
Xx. 00 xx Xxxxxxxxx, X.X., Xxxxxx, as amended, which prohibit the pledge
to the Lender of IASA's shares of stock of the Borrower, fail to deliver
to the Lender (i) a pledge agreement, in substantially the form of
Exhibit M hereto (as amended, supplemented or otherwise modified from time
to time, the "PLEDGE AGREEMENT"), by Accuride and IASA in favor of the
Lender, under which Accuride and IASA together shall pledge 100% of the
outstanding shares of Voting Stock of the Borrower in order to secure the
obligations of the Borrower under this Agreement, the Notes and the
other Loan Documents to which the Borrower is a party, together with
(ii) certificates representing such shares endorsed in pledge
(ENDOSO EN GARANTIA) in favor of the Lender, (iii) a certificate, issued
by the Secretary of the Borrower stating that such pledge has been duly
recorded in the share registry book of the Borrower,
(iv) evidence that all other action that the Lender may deem necessary
or desirable in order to perfect the security interest created under
the Pledge Agreement has been taken and (v) a favorable opinion of
Xxxxxxxxxxx y Steta, S.C., counsel for Accuride, and a favorable opinion
of Xxxxxx Xxxxxxxx Xxxxxxxx, counsel for IASA, in each case confirming
the due authorization, execution and delivery of the Pledge Agreement
by Accuride and IASA, respectively, the validity, perfection and first
priority of the security interest created by the Pledge Agreement in
the shares of stock of the Borrower, and otherwise in form and substance
satisfactory to the Lender; or
(l) the termination of or default under any Construction Document,
the termination of or default under which has resulted in a Material
Adverse Effect; or
(m) failure of the Completion Date to occur by March 31, 2000; or
(n) the Borrower shall have voluntarily abandoned the development,
construction or operation of the Plant on a permanent basis; or
(o) all or a substantial part of the Plant is destroyed or suffers an
actual or constructive loss or damage or is condemned or expropriated, in
each case, to the extent that the Borrower is not fully insured for such
loss, damage, condemnation or expropriation or, if fully insured, is not
fully reimbursed in connection with such insurance within 120 days of the
occurrence of such loss, damage, condemnation or expropriation; or
(p) Accuride shall cease to own, directly or indirectly, at least 51%
of the Voting Stock of the Borrower; or
(q) Kohlberg Kravis Xxxxxxx & Co., L.P., a Delaware limited
partnership, ("KKR"), or any Affiliate of KKR shall cease to own, directly
or indirectly, at least 35% of the Voting Stock of Accuride, other than as
a result of one or more widely distributed public offerings of common stock
of Accuride; or
(r) a Completion Default shall have occurred and be continuing.
SECTION 6.03. REMEDIES. Upon acceleration of the Notes pursuant
to Section 6.01, the Lender may proceed to protect and enforce the rights,
privileges and remedies granted under this Agreement and the other Loan
Documents and under the Applicable Laws of any relevant jurisdiction by
instituting such judicial or other proceedings and by taking all such other
actions as the Lender may determine, at law, in equity, in bankruptcy or
otherwise, whether for specific enforcement of any covenant or agreement
contained in this Agreement or any other Loan Document, or in aid of the
exercise of any right, power, privilege or remedy granted hereunder,
thereunder or under the Applicable Laws of any relevant jurisdiction, or for
any foreclosure upon the Collateral and sale thereof under any judgment or
decree in any judicial proceeding, or to enforce any other legal or equitable
right or remedy granted or
otherwise available to the Lender under this Agreement or any other Loan
Document or the Applicable Laws of any relevant jurisdiction.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. AMENDMENTS, ETC. No amendment or waiver of any
provision of this Agreement or the Notes or any other Loan Document, nor consent
to any departure by the Borrower therefrom, shall in any event be effective
unless the same shall be in writing and signed (or, in the case of the
Collateral Documents, consented to) by the Lender and, in the case of any
amendment, by the Borrower, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
SECTION 7.02. NOTICES, ETC. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy or
telex communication) in the English language (or accompanied by an accurate
English language translation upon which any recipient shall have the right to
rely for all purposes) and mailed, telegraphed, telecopied, telexed or
delivered, if to the Borrower, at its address at Avenida Universidad 1011 Nte,
Planta Alta, San Xxxxxxx xx xxx Xxxxx, X.X., Xxxxxx 00000, Attention: Xxxxx
Xxxxxxxx; and if to the Lender, at its address at Citibank Mexico, S.A., Grupo
Financiero Xxxxxxxx, Xxxxxxx 000, Xxxxxx, X.X. 00000, Attention: Xxxxxx
Xxxxxxxx; or, as to the Borrower or the Lender, at such other address as shall
be designated by such party in a written notice to the other parties and, as to
each other party, at such other address as shall be designated by such party in
a written notice to the Borrower and the Lender. All such notices and
communications shall, when mailed, telegraphed, telecopied or telexed, be
effective when deposited in the mails, delivered to the telegraph company,
transmitted by telecopier or confirmed by telex answerback, respectively, except
that notices and communications to the Lender pursuant to Article II or III
shall not be effective until received by the Lender. Delivery by telecopier of
an executed counterpart of any amendment or waiver of any provision of this
Agreement or the Notes or of any Exhibit hereto to be executed and delivered
hereunder shall be effective as delivery of a manually executed counterpart
thereof.
SECTION 7.03. NO WAIVER; REMEDIES. No failure on the part of the
Lender to exercise, and no delay in exercising, any right hereunder or under any
Note shall operate as a waiver thereof; nor shall any single or partial exercise
of any such right preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 7.04. COSTS, EXPENSES. (a) The Borrower agrees to pay on
demand (i) all costs and expenses of the Lender in connection with the
preparation, execution, delivery, administration, modification and amendment of
the Loan Documents (including, without limitation, (A) all due diligence,
collateral review, syndication, transportation, computer, duplication,
appraisal, audit, insurance, consultant, search, filing and recording fees and
expenses and (B) the reasonable fees and expenses of counsel for the Lender with
respect thereto, with respect to advising the Lender as to its rights and
responsibilities, or the perfection, protection or preservation of rights or
interests, under the Loan Documents, with respect to negotiations with any Loan
Party or with other creditors of any Loan Party or any of its Subsidiaries
arising out of any Default or any events or circumstances that may give rise to
a Default and with respect to presenting claims in or otherwise participating in
or monitoring any Bankruptcy or other similar proceeding affecting creditors'
rights generally and any proceeding ancillary thereto) and (ii) all costs and
expenses of the Lender in connection with the enforcement of the Loan Documents,
whether in any action, suit or litigation, any Bankruptcy or other similar
proceeding affecting creditors' rights generally (including, without limitation,
the reasonable fees and expenses of counsel for the Lender with respect
thereto).
(b) The Borrower agrees to indemnify and hold harmless each
Lender Party, and each of its Affiliates and its officers, directors,
employees, agents and advisors (each, an "INDEMNIFIED PARTY") from and
against any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel) that
may be incurred by or asserted or awarded against any Indemnified Party, in
each case arising out of or in connection with or by reason of (including,
without limitation, in connection with (x) any investigation, litigation or
proceeding or preparation of a defense in connection therewith or (y) any
foreclosure on any Collateral) (i) the Facilities, the actual or proposed use
of the proceeds of the Advances, the Loan Documents, the Related Documents,
the Construction Documents or any of the transactions contemplated thereby,
or (ii) the actual or alleged presence of Hazardous Materials on any property
of any Loan Party or any of its Subsidiaries or any Environmental Action
relating in any way to any Loan Party or any of its Subsidiaries, except to
the extent such claim, damage, loss, liability or expense is found in a
final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful
misconduct. In the case of an investigation, litigation or other proceeding
to which the indemnity in this Section 7.04(b) applies, such indemnity shall
be effective whether or not such investigation, litigation or proceeding is
brought by any Loan Party, its directors, shareholders or creditors or an
Indemnified Party or any Indemnified Party is otherwise a party thereto and
whether or not the transactions contemplated hereby are consummated. The
Borrower also agrees not to assert any claim against any Lender Party or any
of its Affiliates, or any of their respective officers, directors, employees,
attorneys and agents, on any theory of liability, for special, indirect,
consequential or punitive damages arising out of or otherwise relating to the
Facilities, the actual or proposed use of the proceeds of the Advances, the
Loan Documents, the Related Documents, the Construction Documents or any of
the transactions contemplated thereby.
(c) If any payment of principal of any Advance is made by the
Borrower to or for the account of the Lender other than on the last day of the
Interest Period for such Advance, as a result of a payment pursuant to Sections
2.05 or 2.08(c), acceleration of the maturity of the Notes pursuant to
Section 6.01 or for any other reason, the Borrower shall, upon demand by the
Lender, pay to the Lender for the account of the Lender any amounts required to
compensate the Lender for any additional losses, costs or expenses that it may
reasonably incur as a result of such payment, including, without limitation, any
loss (including loss of
anticipated profits), cost or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by the Lender to fund or
maintain such Advance.
(d) If the Borrower fails to pay when due any costs, expenses or
other amounts payable by it under any Loan Document, including, without
limitation, fees and expenses of counsel and indemnities, such amount may be
paid on behalf of such Loan Party by the Lender in its sole discretion.
(e) Without prejudice to the survival of any other agreement of any
Loan Party hereunder or under any other Loan Document, the agreements and
obligations of the Borrower contained in Sections 2.08 and 2.10 and this
Section 7.04 shall survive the payment in full of principal, interest and all
other amounts payable hereunder and under any of the other Loan Documents.
SECTION 7.05. RIGHT OF SET-OFF. Upon the occurrence and during the
continuance of any Event of Default, the Lender and each of its Affiliates is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and otherwise apply any and all deposits (general
or special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by the Lender or such Affiliate to or for the
credit or the account of the Borrower against any and all of the Obligations of
the Borrower now or hereafter existing under this Agreement and the Notes held
by the Lender, irrespective of whether the Lender shall have made any demand
under this Agreement or such Notes and although such Obligations may be
unmatured. The Lender agrees promptly to notify the Borrower after any such
set-off and application; PROVIDED, HOWEVER, that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of
the Lender and its Affiliates under this Section are in addition to other rights
and remedies (including, without limitation, other rights of set-off) that the
Lender and its Affiliates may have.
SECTION 7.06. BINDING EFFECT. This Agreement shall become effective
when it shall have been executed by the Borrower and the Lender and thereafter
shall be binding upon and inure to the benefit of the Borrower, the Lender and
their respective successors and assigns, except that the Borrower shall not have
the right to assign its rights hereunder or any interest herein without the
prior written consent of the Lender.
SECTION 7.07. PARTICIPATIONS. (a) The Lender may sell
participations to Participants in and to the Advances and the Notes pursuant to
Participation Agreements; PROVIDED that (i) subject to the terms and conditions
of each Participation Agreement, the Participants will provide funding to the
Lender in order for the Lender to make the Advances available to the Borrower
and (ii) there is no debtor-creditor relationship arising hereunder with respect
to the Advances between the Borrower and the Participants that will result from
the Participants so funding such Advances.
(b) The Lender may, in connection with any participation or proposed
participation pursuant to this Section 7.07, disclose to any Participant or
proposed Participant, any information relating to the Borrower furnished to the
Lender by or on behalf of the Borrower;
PROVIDED, HOWEVER, that, prior to any such disclosure, the Participant or
proposed Participant shall agree to preserve the confidentiality of any
Confidential Information received by it from the Lender.
(c) Notwithstanding any other provision set forth in this Agreement,
the Lender may at any time create a security interest in all or any portion of
its rights under this Agreement (including, without limitation, the Advances
owing to it and the Notes held by it) in favor of any United States Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of the
United States Federal Reserve System.
SECTION 7.08. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 7.09. EXECUTION IN TWO LANGUAGES. This Agreement and each
Note shall be executed in both the English and Spanish languages, both of which
bind the parties hereto and constitute but one agreement and instrument,
respectively; PROVIDED, HOWEVER, that in case of doubt as to the proper
interpretation or construction of this Agreement or any Note, the English text
shall be controlling in all cases except with respect to any action brought in
the courts of Mexico, in which case the Spanish text shall be controlling.
SECTION 7.10. CONFIDENTIALITY. The Lender shall not disclose any
Confidential Information to any Person without the consent of the Borrower,
other than (a) to the Lender's Affiliates and their officers, directors,
employees, agents and advisors and to actual or prospective Participants, and
then only on a confidential basis, (b) as required by any law, rule or
regulation or judicial process and (c) as requested or required by any state,
federal or foreign authority or examiner regulating banks or banking.
SECTION 7.11. JURISDICTION, ETC. (a) Each of the parties hereto
irrevocably agrees that any legal action, suit or proceeding arising out of or
relating to this Agreement, the Notes or any other agreements to which the
Borrower is a party may be brought in the courts of the State of New York or of
the United States located in the Southern District of New York or of the Federal
District of Mexico, at the election of the plaintiff. Final judgment against
the Borrower in any such action, suit or proceeding shall be conclusive and may
be enforced in any other jurisdiction, including Mexico, by suit on the
judgment, a certified or exemplified copy of which shall be conclusive evidence
of the judgment, or in any other manner provided by law.
(b) By the execution and delivery of this Agreement, each of the
parties irrevocably submits to the non-exclusive jurisdiction of the courts of
the State of New York and of the United States District Court for the Southern
District of New York, and of the Federal District of Mexico, in any such action,
suit or proceeding and designates, appoints and
empowers CT Corporation System, at 0000 Xxxxxxxx, Xxx Xxxx, XX 00000 as its
authorized agent to receive for and on its behalf service of any summons,
complaint or other legal process in any such action, suit or proceeding in
the State of New York for so long as any obligation of the Borrower shall
remain outstanding hereunder. The Borrower shall grant an irrevocable power
of attorney to CT Corporation System in respect of such appointment and shall
maintain such power of attorney in full force and effect for so long as any
obligation of the Borrower shall remain outstanding hereunder.
(c) Nothing in this Agreement shall affect the right of the Lender to
commence legal proceedings or otherwise xxx the Borrower in Mexico or any other
appropriate jurisdiction or to serve process, pleadings and other legal papers
upon the Borrower in any manner authorized by the laws of any such jurisdiction.
(d) As long as this Agreement remains in force, the Borrower shall
maintain a duly appointed agent for the service of summons, complaint and other
legal process in New York, New York, United States, for purposes of any legal
action, suit or proceeding the Lender may bring in respect of this Agreement or
any other Loan Document to which the Borrower is a party. The Borrower shall
keep the Lender advised of the identity and location of such agent.
(e) The Borrower also irrevocably consents, if for any reason the
Borrower's authorized agent for service of process of summons, complaint and
other legal process in any such action, suit or proceeding is not present in New
York, New York, service of such papers may be made out of those courts by
mailing copies of the papers by registered United States air mail, postage
prepaid, to the Borrower at its address specified in Section 7.02. In such a
case, the Lender shall also send by telex or facsimile, or have sent by telex or
facsimile, a copy of the papers to the Borrower.
(f) Service in the manner provided in subsection (e) above in any
such action, suit or proceeding will be deemed personal service, will be
accepted by the Borrower as such and will be valid and binding upon the Borrower
for all purposes of any such action, suit or proceeding.
(g) The Borrower irrevocably waives: (i) any objection which it may
have now or in the future to the laying of the venue of any such action, suit or
proceedings in any court referred to in this Section; and (ii) any claim that
any such action, suit or proceedings has been brought in an inconvenient forum;
and (iii) any jurisdiction rights which it may be entitled to now or in the
future by reason of its present or any future domicile, or otherwise.
SECTION 7.12. JUDGMENT. (a) If for the purposes of obtaining
judgment in any court it is necessary to convert a sum due hereunder or under
any of the other Loan Documents in Dollars into another currency, the parties
hereto agree, to the fullest extent that they may effectively do so, that the
rate of exchange used shall be that at which in accordance with normal banking
procedures the Lender could purchase Dollars with such other currency at
Citibank in New York, New York on the Business Day preceding that on which final
judgment is given.
(b) The obligation of the Borrower in respect of any sum due in
Dollars from it to the Lender hereunder or under any of the other Loan Documents
held by the Lender shall, notwithstanding any judgment in any other currency, be
discharged only to the extent that on the Business Day of receipt by the Lender
of any sum adjudged to be so due in such other currency the Lender may in
accordance with normal banking procedures purchase Dollars with such other
currency; if the amount of Dollars so purchased is less than the sum originally
due by the Borrower to the Lender in Dollars, the Borrower agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify the Lender
against such loss, and if the amount of Dollars so purchased exceeds the sum
originally due by the Borrower to the Lender in Dollars, the Lender agrees to
remit to the Borrower such excess
SECTION 7.13. CONSTRUCTION DOCUMENTS. The Lender shall not be
responsible in any way for the Construction Documents and no claim against any
person with respect to the performances of the Construction Documents will
affect the obligations of the Borrower under this Agreement or the Notes.
SECTION 7.14. GOVERNING LAW. This Agreement and the Notes shall be
governed by, and construed in accordance with, the law of the State of New York,
United States; PROVIDED, HOWEVER, that in connection with any legal action or
proceeding (other than an action to enforce a judgment obtained in another
jurisdiction) brought by the Lender in respect of this Agreement or the Notes in
the courts of Mexico or any political subdivision thereof, this Agreement and
the Notes shall be deemed to be instruments made under the laws of Mexico and
for such purposes shall be governed by, and construed in accordance with, the
law of Mexico.
SECTION 7.15. ENTIRE AGREEMENT. This Agreement and the Exhibits and
Schedules hereto constitute the entire agreement between the parties with
respect to the subject matter hereof and supersede all prior and contemporaneous
agreements, understandings, negotiations, correspondence, undertakings and
communications, both oral and written, between the parties with respect to the
subject matter hereof, including, without limitation, the Accuride de Mexico,
S.A. de C.V. Summary of Terms and Conditions (finally negotiated by the parties
in May 1998). There are no restrictions, promises, representations, warranties,
covenants or undertakings by or between the parties with respect to the subject
matter hereof other than those expressly set forth or referred to herein.
SECTION 7.16. WAIVER OF JURY TRIAL. Each of the Borrower and the
Lender irrevocably waive all right to trial by jury in any action, proceeding or
counterclaim (whether based on contract, tort or otherwise) arising out of or
relating to any of the Loan Documents, the Advances or the actions of the Lender
in the negotiation, administration, performance or enforcement thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
ACCURIDE DE MEXICO, S.A. DE C.V.,
as Borrower
By /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Director General
CITIBANK MEXICO, S.A., GRUPO
FINANCIERO CITIBANK, as Lender
By /s/ Xxxxxx Libuic
-------------------------------------
Name: Xxxxxx Libuic
Title: Attorney-in-Fact
EXECUTION COPY
$32,500,000
CREDIT AGREEMENT
Dated as of July 9, 1998
Between
ACCURIDE DE MEXICO, S.A. DE C.V.
AS BORROWER
and
CITIBANK MEXICO, S.A., GRUPO FINANCIERO CITIBANK
AS LENDER
T A B L E O F C O N T E N T S
SECTION PAGE
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01. CERTAIN DEFINED TERMS 1
1.02. COMPUTATION OF TIME PERIODS 21
1.03. ACCOUNTING TERMS 22
1.04. OTHER DEFINITIONAL PROVISIONS 22
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
2.01. THE ADVANCES 22
2.02. MAKING THE ADVANCES 23
2.03. REPAYMENT OF ADVANCES 24
2.04. OPTIONAL TERMINATION OR REDUCTION OF THE COMMITMENTS 24
2.05. PREPAYMENTS 25
2.06. INTEREST 25
2.07. FEES 26
2.08. INCREASED COSTS, ETC. 26
2.09. PAYMENTS AND COMPUTATIONS 29
2.10. TAXES 29
2.11. USE OF PROCEEDS 30
2.12. WORKING CAPITAL COMMITMENT EXTENSIONS 30
ARTICLE III
CONDITIONS OF LENDING
3.01. CONDITIONS PRECEDENT TO INITIAL EXTENSION OF CREDIT 31
3.02. CONDITIONS PRECEDENT TO EACH TERM ADVANCE 36
3.03. CONDITIONS PRECEDENT TO EACH WORKING CAPITAL ADVANCE 37
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWER 39
ARTICLE VCOVENANTS OF THE BORROWER
5.01. AFFIRMATIVE COVENANTS 47
5.02. NEGATIVE COVENANTS 51
5.03. REPORTING REQUIREMENTS 61
SECTION PAGE
5.04. FINANCIAL COVENANTS 64
ARTICLE VI
EVENTS OF DEFAULT
6.01. ACCELERATION AFTER DEFAULT 67
6.02. EVENTS OF DEFAULT 68
6.03. REMEDIES 71
ARTICLE VII
MISCELLANEOUS
7.01. AMENDMENTS, ETC. 71
7.02. NOTICES, ETC. 71
7.03. NO WAIVER; REMEDIES 72
7.04. COSTS, EXPENSES 72
7.05. RIGHT OF SET-OFF 73
7.06. BINDING EFFECT 74
7.07. PARTICIPATIONS 74
7.08. EXECUTION IN COUNTERPARTS 74
7.09. EXECUTION IN TWO LANGUAGES 75
7.10. CONFIDENTIALITY 75
7.11. JURISDICTION, ETC. 75
7.12. JUDGMENT 76
7.13. CONSTRUCTION DOCUMENTS 77
7.14. GOVERNING LAW 77
7.15. ENTIRE AGREEMENT 77
7.16. WAIVER OF JURY TRIAL 77
SCHEDULES
Schedule 1.01(a) - Blueprints
Schedule 1.01(b) - Timetable
Schedule 3.01(b) - Surviving Debt
Schedule 4.01(b) - Subsidiaries of the Borrower
Schedule 4.01(d)(i) - Authorizations, Approvals, Etc.
Schedule 4.01(d)(ii) - Required Governmental Approvals
Schedule 4.01(aa) - Existing Debt
Schedule 4.01(ii) - Real Property
Schedule 4.01(jj) - Leases of Real Property
Schedule 5.01(d) - Required Insurance
Schedule 5.02(a)(iii) - Liens
Schedule 5.02(e)(ii) - Investments
EXHIBITS
Exhibit A - Term Loan Promissory Note
Exhibit B - Working Capital Promissory Note
Exhibit C - Notice of Term Borrowing
Exhibit D - Form of Cost Certificate
Exhibit E - Notice of Working Capital Borrowing
Exhibit F - Completion Guaranty
Exhibit G - Letter of Comfort
Exhibit H - Form of Opinion of Counsel for the Borrower
Exhibit I - Form of Opinion of Counsel for Accuride
Exhibit J - Form of Opinion of Counsel for Iasa
Exhibit K - Form of Opinion of Mexican Counsel for the Lender
Exhibit L - Form of Participation Agreement
Exhibit M - Form of Pledge Agreement
