SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 18, 1994
Commission File Number: 1-5642
DRAVO CORPORATION
(Exact name of registrant as specified in its charter)
Pennsylvania 25-0447860
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
One Oliver Plaza, Pittsburgh, Pennsylvania 15222
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (412) 566-3000
DRAVO CORPORATION
INDEX
ITEM 5. LOAN DOCUMENTS
Page No.
Note Purchase Agreement 1 - 65
Rules of Usage and Definitions Relating to the
Transaction Documents 1 - 28
Master Common Facilities Agreement 1 - 35
Deposit and Disbursement Agreement 1 - 23
Amendment Agreement 1 - 42
DRAVO BLACK RIVER LIMITED PARTNERSHIP
NOTE PURCHASE AGREEMENT
___________________________________________
Dated as of August 1, 1994
___________________________________________
Senior Secured Construction Notes
Due September 30, 1995
Senior Secured Term Notes
Due August 1, 2010
<PAGE>
TABLE OF CONTENTS
SECTION 1 PURCHASE AND SALE OF CONSTRUCTION NOTES. . . . . . . . . . . . 1
Section 1.1 Issuance of Construction Notes . . . . . . . . . . . . . 1
Section 1.2 Advance of Additional Funds. . . . . . . . . . . . . . . 2
Section 1.3 Draw Requests. . . . . . . . . . . . . . . . . . . . . . 2
Section 1.4 Conversion Date Advances.. . . . . . . . . . . . . . . . 3
Section 1.5 Interest Rate and Maturity of Construction Notes . . . . 3
Section 1.6 Payments on the Construction Notes . . . . . . . . . . . 3
Section 1.7 Fees Payable to the Purchaser in Connection with
Construction Notes . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.8 Use of Proceeds of Construction Notes . . . . . . . . . 5
SECTION 2 EXCHANGE OF CONSTRUCTION NOTES FOR TERM NOTES. . . . . . . . . 6
Section 2.1 Issuance of Term Notes . . . . . . . . . . . . . . . . . 6
Section 2.2 Payments on the Term Notes . . . . . . . . . . . . . . . 6
Section 2.3 Optional Prepayments of Term Notes.. . . . . . . . . . . 7
Section 2.4 Notice of Optional Prepayment. . . . . . . . . . . . . . 7
Section 2.5 Application of Prepayments.. . . . . . . . . . . . . . . 8
Section 2.6 Term Servicing Fee.. . . . . . . . . . . . . . . . . . . 8
Section 2.7 Surrender of Term Notes on Prepayment. . . . . . . . . . 8
Section 2.8 No Other Prepayments . . . . . . . . . . . . . . . . . . 8
SECTION 3 WARRANTIES AND REPRESENTATIONS OF PURCHASER. . . . . . . . . . 8
Section 3.1 Purchase for Investment. . . . . . . . . . . . . . . . . 8
Section 3.2 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 4 WARRANTIES AND REPRESENTATIONS OF THE SPV. . . . . . . . . . . 9
Section 4.1 Organization and Existence.. . . . . . . . . . . . . . . 9
Section 4.2 Due Authorization; No Conflict.. . . . . . . . . . . . . 9
Section 4.3 Enforceability.. . . . . . . . . . . . . . . . . . . . . 9
Section 4.4 Litigation.. . . . . . . . . . . . . . . . . . . . . . . 10
Section 4.5 Governmental Approvals.. . . . . . . . . . . . . . . . . 10
Section 4.6 Tax Returns. . . . . . . . . . . . . . . . . . . . . . . 11
Section 4.7 Compliance with Law. . . . . . . . . . . . . . . . . . . 11
Section 4.8 Title to the Project, etc. . . . . . . . . . . . . . . . 11
Section 4.9 No Events of Default.. . . . . . . . . . . . . . . . . . 11
Section 4.10 Full Disclosure. . . . . . . . . . . . . . . . . . 11
Section 4.11 Financial Statements of the Corporation and
Lime.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 4.12 Absence of Material Contingencies. . . . . . . . . 12
Section 4.13 Material Patents and Licenses. . . . . . . . . . . 12
Section 4.14 Taxes. . . . . . . . . . . . . . . . . . . . . . . 12
Section 4.15 Utilities. . . . . . . . . . . . . . . . . . . . . 12
Section 4.16 Easements, Servitudes, Rights of Way, etc. . . . . 13
Section 4.17 Status of Project Contracts. . . . . . . . . . . . 13
Section 4.18 Collateral Documents.. . . . . . . . . . . . . . . 13
Section 4.19 Substantial Completion Date. . . . . . . . . . . . 13
Section 4.20 Independent Engineer's Certificate.. . . . . . . . 13
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Section 4.21 ERISA. . . . . . . . . . . . . . . . . . . . . . . 13
Section 4.22 Environmental Matters. . . . . . . . . . . . . . . 14
Section 4.23 Federal Power Regulation Act . . . . . . . . . . . 15
Section 4.24 Holding Company Act. . . . . . . . . . . . . . . . 15
Section 4.25 Investment Company Act.. . . . . . . . . . . . . . 15
Section 4.26 Margin Regulations.. . . . . . . . . . . . . . . . 15
Section 4.27 Securities Act.. . . . . . . . . . . . . . . . . . 16
Section 4.28 Other Business.. . . . . . . . . . . . . . . . . . 16
Section 4.29 Uncontrollable Force.. . . . . . . . . . . . . . . 16
Section 4.30 Insurance; Statements to Insurers. . . . . . . . . 16
Section 4.31 Financial Broker; Fees.. . . . . . . . . . . . . . 16
Section 4.32 The Project. . . . . . . . . . . . . . . . . . . . 16
Section 4.33 Restrictive Agreements.. . . . . . . . . . . . . . 16
Section 4.34 Sufficiency of Support Agreements. . . . . . . . . 17
Section 4.35 Location of Chief Executive Office.. . . . . . . . 17
Section 4.36 Ownership. . . . . . . . . . . . . . . . . . . . . 17
Section 4.37 Labor Matters. . . . . . . . . . . . . . . . . . . 17
SECTION 5 CONDITIONS TO FUNDING. . . . . . . . . . . . . . . . . . . . . 17
Section 5.1 Initial Funding Date . . . . . . . . . . . . . . . . . . 17
Section 5.2 Equity Contribution. . . . . . . . . . . . . . . . . . . 17
Section 5.3 Opinions of Counsel. . . . . . . . . . . . . . . . . . . 17
Section 5.4 Warranties and Representations True; No
Construction Defaults. . . . . . . . . . . . . . . . . . . . . 18
Section 5.5 Closing Certificates . . . . . . . . . . . . . . . . . . 18
Section 5.6 Legality; Litigation.. . . . . . . . . . . . . . . . . . 18
Section 5.7 Initial Funding Draw Request . . . . . . . . . . . . . . 19
Section 5.8 SPV Security Agreement . . . . . . . . . . . . . . . . . 19
Section 5.9 Construction Contracts; Construction Management
Agreement. . . . . . . . . . . . . . . . . . . . . . . . 20
Section 5.10 OPCO Agreement.. . . . . . . . . . . . . . . . . . 20
Section 5.11 MCFA; Ground Lease . . . . . . . . . . . . . . . . 20
Section 5.12 Intercreditor Agreement. . . . . . . . . . . . . . 20
Section 5.13 Lime Security Agreement; Lime Pledge
Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 5.14 Partner Security Agreement . . . . . . . . . . . . 21
Section 5.15 Project Mortgage and Title Insurance . . . . . . . 21
Section 5.16 Execution and Delivery of Other Transaction
Documents; Copies. . . . . . . . . . . . . . . . . . . . . . . 22
Section 5.17 Governmental Approvals . . . . . . . . . . . . . . 22
Section 5.18 Surveys. . . . . . . . . . . . . . . . . . . . . . 22
Section 5.19 Soil Test. . . . . . . . . . . . . . . . . . . . . 22
Section 5.20 Environmental Site Assessments.. . . . . . . . . . 22
Section 5.21 Environmental Disclosures. . . . . . . . . . . . . 22
Section 5.22 Technical Evaluation of Project. . . . . . . . . . 22
Section 5.23 Easements. . . . . . . . . . . . . . . . . . . . . 23
Section 5.24 Utilities. . . . . . . . . . . . . . . . . . . . . 23
Section 5.25 Construction Matters . . . . . . . . . . . . . . . 23
Section 5.26 Insurance. . . . . . . . . . . . . . . . . . . . . 23
Section 5.27 Financial Statements; Projections. . . . . . . . . 23
Section 5.28 Private Placement Number.. . . . . . . . . . . . . 23
Section 5.29 Supporting Documentation.. . . . . . . . . . . . . 24
<PAGE> -iii-<PAGE>
Section 5.30 Fees and Expenses. . . . . . . . . . . . . . . . . 24
Section 5.31 Material Adverse Change; Uncontrollable Force. . . 24
Section 5.32 Offering and Sale of Construction Notes. . . . . . 24
Section 5.33 Solvency . . . . . . . . . . . . . . . . . . . . . 24
Section 5.34 Collateral Agent; Disbursement Agent . . . . . . . 25
SECTION 6 CONDITIONS PRECEDENT TO SUBSEQUENT CONSTRUCTION FUNDINGS.. . . 25
Section 6.1 Continued Satisfaction of Initial Funding Conditions . . 25
Section 6.2 Material Adverse Change; No Default. . . . . . . . . . . 25
Section 6.3 Subsequent Funding Date Draw Requests. . . . . . . . . . 25
Section 6.4 Supporting Documentation.. . . . . . . . . . . . . . . . 26
Section 6.5 Equity Funding.. . . . . . . . . . . . . . . . . . . . . 26
Section 6.6 Proceedings Satisfactory.. . . . . . . . . . . . . . . . 26
SECTION 7 PROVISIONS RELATING TO CONSTRUCTION. . . . . . . . . . . . . . 26
Section 7.1 Completion of Construction.. . . . . . . . . . . . . . . 26
Section 7.2 Changes in Plans and Specifications. . . . . . . . . . . 27
Section 7.3 Inspection.. . . . . . . . . . . . . . . . . . . . . . . 27
Section 7.4 Contingency Fund.. . . . . . . . . . . . . . . . . . . . 27
Section 7.5 Sufficiency of Construction Note Proceeds. . . . . . . . 27
Section 7.6 Employment of the Independent Engineer.. . . . . . . . . 27
Section 7.7 Retainages . . . . . . . . . . . . . . . . . . . . . . . 27
Section 7.8 Off-Site Materials . . . . . . . . . . . . . . . . . . . 27
Section 7.9 Insurance. . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 8 CONDITIONS PRECEDENT TO PURCHASE OF TERM NOTES.. . . . . . . . 28
Section 8.1 Notice of Conversion Date. . . . . . . . . . . . . . . . 28
Section 8.2 No Default; Construction Note Interest Paid. . . . . . . 28
Section 8.3 Opinions of Counsel. . . . . . . . . . . . . . . . . . . 28
Section 8.4 Warranties and Representations True; No Defaults . . . . 28
Section 8.5 Closing Certificates . . . . . . . . . . . . . . . . . . 29
Section 8.6 Legality; Litigation.. . . . . . . . . . . . . . . . . . 29
Section 8.7 Execution and Delivery of Transaction Documents;
Copies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 8.8 OPCO Agreement.. . . . . . . . . . . . . . . . . . . . . 29
Section 8.9 Continued Effectiveness of Agreements. . . . . . . . . . 29
Section 8.10 Title Policy Endorsements. . . . . . . . . . . . . 30
Section 8.11 Insurance. . . . . . . . . . . . . . . . . . . . . 30
Section 8.12 Fees and Expenses. . . . . . . . . . . . . . . . . 30
Section 8.13 Material Adverse Change; Uncontrollable Force. . . 30
Section 8.14 Final Approvals. . . . . . . . . . . . . . . . . . 30
Section 8.15 Completion Certificates. . . . . . . . . . . . . . 30
Section 8.16 As-Built Survey. . . . . . . . . . . . . . . . . . 30
Section 8.17 Operating Budget . . . . . . . . . . . . . . . . . 31
Section 8.18 Environmental Matters. . . . . . . . . . . . . . . 31
Section 8.19 Construction Costs; Required Reserve Payment . . . 31
Section 8.20 Solvency . . . . . . . . . . . . . . . . . . . . . 31
Section 8.21 Private Placement Number.. . . . . . . . . . . . . 31
<PAGE> -iv-<PAGE>
Section 8.22 Proceedings Satisfactory; Additional
Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 9 COVENANTS AND AGREEMENTS.. . . . . . . . . . . . . . . . . . . 31
Section 9.1 Maintenance of Existence . . . . . . . . . . . . . . . . 31
Section 9.2 Maintenance of Permits . . . . . . . . . . . . . . . . . 32
Section 9.3 Environmental Matters. . . . . . . . . . . . . . . . . . 32
Section 9.4 Payment of Notes and Maintenance of Office.. . . . . . . 32
Section 9.5 Maintenance of Books and Records . . . . . . . . . . . . 32
Section 9.6 Operation and Maintenance. . . . . . . . . . . . . . . . 33
Section 9.7 Plans and Specifications . . . . . . . . . . . . . . . . 33
Section 9.8 Operating Logs . . . . . . . . . . . . . . . . . . . . . 33
Section 9.9 Payment of Taxes . . . . . . . . . . . . . . . . . . . . 33
Section 9.10 Compliance with Applicable Law . . . . . . . . . . 33
Section 9.11 Purchase of Notes. . . . . . . . . . . . . . . . . 34
Section 9.12 Further Assurances . . . . . . . . . . . . . . . . 34
Section 9.13 Disposition of Assets. . . . . . . . . . . . . . . 35
Section 9.14 Change in Name . . . . . . . . . . . . . . . . . . 35
Section 9.15 Nature of Business . . . . . . . . . . . . . . . . 35
Section 9.16 Debt; Bank Account . . . . . . . . . . . . . . . . 35
Section 9.17 Filing of Reports. . . . . . . . . . . . . . . . . 35
Section 9.18 Transactions with Affiliates . . . . . . . . . . . 35
Section 9.19 Loans. . . . . . . . . . . . . . . . . . . . . . . 35
Section 9.20 Additional Agreements. . . . . . . . . . . . . . . 35
Section 9.21 Payment of Project Revenues. . . . . . . . . . . . 36
Section 9.22 Performance and Enforcement of Agreements. . . . . 36
Section 9.23 Liens. . . . . . . . . . . . . . . . . . . . . . . 36
Section 9.24 Reports of Liens.. . . . . . . . . . . . . . . . . 36
Section 9.25 Most Favored Nation. . . . . . . . . . . . . . . . 36
SECTION 10 INFORMATION AS TO THE COMPANIES. . . . . . . . . . . . . . . . 37
Section 10.1 Financial and Business Information.. . . . . . . . 37
Section 10.2 Officers' Certificates.. . . . . . . . . . . . . . 40
Section 10.3 Accountants' Certificates. . . . . . . . . . . . . 40
Section 10.4 Annual Independent Engineer's Report.. . . . . . . 40
Section 10.5 Annual Opinion of Counsel. . . . . . . . . . . . . 41
SECTION 11 CASUALTY; CONDEMNATION . . . . . . . . . . . . . . . . . . . . 41
Section 11.1Notice of Damage or Loss . . . . . . . . . . . . . . . . 41
Section 11.2 Repair . . . . . . . . . . . . . . . . . . . . . . 41
Section 11.3 Application of Payments on Total Loss. . . . . . . 42
Section 11.4 Application of Payments Relating to a Partial
Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 12 INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 12.1 Insurance by the SPV . . . . . . . . . . . . . . . 42
Section 12.2 Insurance By The Operator. . . . . . . . . . . . . 46
Section 12.3 Amendment of Requirements. . . . . . . . . . . . . 47
Section 12.4 Application of Proceeds. . . . . . . . . . . . . . 47
<PAGE> -v-<PAGE>
Section 12.5 Conditions . . . . . . . . . . . . . . . . . . . . 47
Section 12.6 Evidence of Insurance. . . . . . . . . . . . . . . 48
Section 12.7 Insurance Report . . . . . . . . . . . . . . . . . 48
Section 12.8 Failure to Maintain Insurance. . . . . . . . . . . 48
Section 12.9 No Duty of the Collateral Agent to Verify. . . . . 48
Section 12.10 Maintenance of Insurance. . . . . . . . . . . . . . . 48
SECTION 13 EVENTS OF DEFAULTS--REMEDIES . . . . . . . . . . . . . . . . . 49
Section 13.1 Nature of Events . . . . . . . . . . . . . . . . . 49
Section 13.2 Acceleration of Notes. . . . . . . . . . . . . . . 52
Section 13.3 Remedies . . . . . . . . . . . . . . . . . . . . . 53
SECTION 14 INTERPRETATION OF THIS AGREEMENT . . . . . . . . . . . . . . . 53
Section 14.1 Terms Defined. . . . . . . . . . . . . . . . . . . 53
Section 14.2 Directly or Indirectly.. . . . . . . . . . . . . . 53
Section 14.3 Governing Law; Consent to Jurisdiction.. . . . . . 53
Section 14.4 Independent Construction . . . . . . . . . . . . . 54
Section 14.5 Certain Disclaimers by the Purchaser . . . . . . . 54
SECTION 15 PAYMENT OF EXPENSES. . . . . . . . . . . . . . . . . . . . . . 55
Section 15.1 Transaction Expenses . . . . . . . . . . . . . . . 55
Section 15.2 Continuing Expense Obligations . . . . . . . . . . 55
SECTION 16 REGISTRATION; SUBSTITUTION OF TERM NOTES.. . . . . . . . . . . 56
Section 16.1 Registration of Notes. . . . . . . . . . . . . . . 56
Section 16.2 Exchange of Notes. . . . . . . . . . . . . . . . . 56
Section 16.3 Replacement of Notes.. . . . . . . . . . . . . . . 57
SECTION 17 MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 17.1 Communications.. . . . . . . . . . . . . . . . . . 57
Section 17.2 General Indemnification. . . . . . . . . . . . . . 58
Section 17.3 Increased Costs. . . . . . . . . . . . . . . . . . 60
Section 17.4 Restriction on Sale of Notes . . . . . . . . . . . 60
Section 17.5 Disclosure to Other Persons. . . . . . . . . . . . 60
Section 17.6 Reproduction of Documents. . . . . . . . . . . . . 61
Section 17.7 Payments on Notes; other Amounts.. . . . . . . . . 62
Section 17.8 Survival . . . . . . . . . . . . . . . . . . . . . 62
Section 17.9 Successors and Assigns . . . . . . . . . . . . . . 62
Section 17.10 Amendments . . . . . . . . . . . . . . . . . . . . 63
Section 17.11 Section Headings, Table of Contents. . . . . . . . 63
Section 17.12 Duplicate Originals; Execution in Counterpart. . . 63
Section 17.13 Jury Trial Waiver. . . . . . . . . . . . . . . . . 63
<PAGE> -vi-<PAGE>
DRAVO BLACK RIVER LIMITED PARTNERSHIP
NOTE PURCHASE AGREEMENT
Senior Secured Construction Notes Due September 30, 1995
Senior Secured Term Notes Due August 1, 2010
As of August 1, 1994
The Prudential Insurance Company of America
Second Floor
Gateway Center Four
One Hundred Mulberry Street
Newark, New Jersey 07102
Ladies and Gentlemen:
Dravo Black River Limited Partnership, a Delaware limited partnership
(the "SPV"), hereby agrees with you as follows:
SECTION 1 PURCHASE AND SALE OF CONSTRUCTION NOTES.
Section 1.1 Issuance of Construction Notes.
(a) Authorization of Construction Notes. The SPV has
authorized the issuance of an aggregate principal amount of up to
Fifty Million Dollars ($50,000,000) (the "Commitment Amount") of its
Senior Secured Construction Notes due September 30, 1995 (the
"Construction Notes"). The Construction Notes shall be to the effect
and substantially in the form of Exhibit A hereto.
(b) Purchase and Sale of Construction Notes. The SPV hereby
agrees to sell to you, and you hereby agree to purchase from the SPV,
subject to the terms and conditions of this Agreement, Construction
Notes in an aggregate amount equal to the Commitment Amount.
(c) Initial Funding of Construction Notes. The closing of the
initial sale of Construction Notes (the "Initial Funding") shall be held
on August 18, 1994, or such other date as may be agreed to in writing
by you and the SPV (the "Initial Funding Date"), at 10 a.m., Hartford,
Connecticut time, at the offices of Hebb & Gitlin, your special
counsel, One State Street, Hartford, Connecticut. At the Initial
Funding, a single Construction Note will be delivered to you, which
Construction Note will be (i) dated the Initial Funding Date,
<PAGE> -1-
<PAGE>
(ii) payable as indicated on Annex 1 hereto, and (iii) in a stated principal
amount equal to Fifty Million Dollars ($50,000,000). Delivery of such
Construction Note to you shall be made on the Initial Funding Date against
payment by you of the principal amount set forth in an Approved Draw
Request delivered pursuant to Section 1.3 hereof.
Section 1.2 Advance of Additional Funds. Subject to the terms and
conditions of this Agreement, on each Funding Date (including, without
limitation, the Initial Funding Date) you agree to advance (each an
"Advance") from time to time, but not more often than once in any period of
thirty (30) consecutive days and in an amount not less than Five Hundred
Thousand Dollars ($500,000) (except in the case of Advances made pursuant
to clause (ii) below), funds for the benefit of the SPV in an aggregate
principal amount equal to the sum of (i) the amount set forth in a Draw
Request delivered in compliance with Section 1.3 in respect of such Funding
Date and (ii) such amount as may then be required to pay accrued interest
on the outstanding Construction Notes, the fees provided for in Section 1.7
and (in connection with the Advance to be made on the Conversion Date) the
Required Reserve Payment, whether or not such amounts shall be specified
in a Draw Request (the SPV hereby authorizing you to advance the funds
pursuant to this clause (ii) without further direction or documentation of
any kind), provided that the maximum aggregate principal amount of all
Advances hereunder, including the Advance made on the Initial Funding
Date, shall not exceed the Commitment Amount, provided, further, that, with
respect to any Subsequent Funding Date, the amount of any Advance shall
be computed after giving effect to the Equity Amount to be paid pursuant to
Section 3.15(b) of the Lime Security Agreement on or prior to such
Subsequent Funding Date, and the application of such Equity Amount to the
payment of Construction Costs and funding of the Debt Service Reserve to
the extent contemplated by Section 8.19. Advances (other than those made
pursuant to clause (ii) of the immediately preceding sentence) shall be
deposited into the Construction Account, the Construction Completion
Account and the Debt Service Reserve in accordance with this Agreement
and the other Transaction Documents. Your obligations to make Advances
shall terminate automatically upon the earliest to occur of (x) any
acceleration of the Construction Notes pursuant to Section 13.2 hereof, (y)
the Construction Note Maturity Date, or (z) the consummation of the
transactions to be effected on the Conversion Date. You shall record your
Advances on your Construction Notes, but any failure to make any such
notation or any error in any such notation shall not affect the obligations
of the SPV under such Construction Note or any other Transaction
Document. At any time, the aggregate principal amount of the Construction
Notes outstanding shall be the sum of the Advances made hereunder and not
paid.
Section 1.3 Draw Requests. The Construction Manager shall deliver a
Draw Request signed by the SPV to you, the Independent Engineer, the
Collateral Agent and the Disbursement Agent at least five (5) Business
Days prior to any requested Funding Date. The Draw Request shall comply
with Sections 5.7 and 5.29 or Sections 6.3 and 6.4, as the case may be, and
shall be substantially in the form of Exhibit B hereto and in substance
satisfactory to you, and shall specify (i) the requested Funding Date and
(ii) the total amount of the requested Advance. Each Draw Request shall
contain a representation and warranty by the Construction Manager and the
SPV that all of the applicable conditions precedent to the Advance
requested have been satisfied. You shall not be obligated to make an
Advance with respect to any amount requested in a Draw Request which
amount (1) has not been approved by the Independent Engineer or (2) when
added to the aggregate principal amount of all prior Advances is in excess
of the Commitment Amount.
<PAGE> -2-<PAGE>
Section 1.4 Conversion Date Advances. On the Conversion Date, Lime will
deliver to you a Draw Request in compliance with Section 1.3, which Draw
Request shall include all remaining unpaid Construction Costs (including,
amounts to be deposited into the Construction Completion Account in
respect of Punch List Items), the Required Reserve Payment and an amount
equal to the result of (a) the sum of (i) the Commitment Amount, plus (ii)
Twelve Million, Four Hundred Thousand Dollars ($12,400,000) plus (iii) Five
Million, Three Hundred Thousand Dollars ($5,300,000) minus (b) the sum of (i)
all Construction Costs plus Six Months' Debt Service. Any Required Reserve
Payment shall be paid to the Disbursement Agent for deposit into the Debt
Service Reserve in accordance with the Deposit and Disbursement
Agreement.
Section 1.5 Interest Rate and Maturity of Construction Notes.
(a) Interest Rate. The Construction Notes will bear interest
on the unpaid principal balance thereof at the rate of 10.13% per
annum payable monthly. Overdue principal and (to the extent permitted
by Applicable Law) any overdue installment of interest on the
Construction Notes shall bear interest at a rate equal to the lesser
of (x) the highest rate allowed by law or (y) 12.13% per annum. Interest
on the Construction Notes shall be calculated on the basis of a 360-
day year and actual days elapsed.
(b) Maturity. The Construction Notes will mature on September
30, 1995 (the "Construction Note Maturity Date").
Section 1.6 Payments on the Construction Notes.
(a) Interest Payments. Interest on the Construction Notes
shall be payable monthly on each Debt Payment Date commencing on the
Debt Payment Date next succeeding the Initial Funding Date until the
principal amount thereof shall become due and payable.
(b) Principal Payments. All or a portion of the outstanding
principal amount of the Construction Notes shall be subject to
prepayment only under the circumstances and upon the terms, set
forth in Section 1.6(c) or Section 11 of this Agreement; otherwise the
Construction Notes shall not be prepayable in whole or in part. The
principal amount of the Construction Notes outstanding on the
Construction Note Maturity Date shall be payable on such date with
the proceeds of the Term Notes.
(c) Prepayment. If the Construction Notes are outstanding on
the Construction Option Amount Prepayment Date, the SPV may prepay
the Construction Option Amount of the Construction Notes, or any
portion thereof, on the Construction Option Amount Prepayment Date,
together with interest on the Construction Option Amount, or such
portion, accrued to the Construction Option Amount Prepayment Date.
The SPV shall give written notice of any such prepayment to the
Collateral Agent and to the Holders not less than ten (10) days nor
more than thirty (30) days before the Construction Option Amount
Prepayment Date, stating that the Construction Option Amount, or a
specified portion thereof, will be prepaid on such date. Notice of
such prepayment having been so given, the Construction Option
Amount, or such specified portion thereof, accrued interest thereon
(but not any Make-Whole Amount in respect thereof) and the
Construction Exit Fee shall become due and payable on the
Construction
<PAGE> -3-<PAGE>
Option Amount Prepayment Date. As used in this Section 1.6(c), the following
terms have the following meanings:
"Construction Exit Fee" shall mean, if the principal amount
of Construction Notes to be prepaid on the Construction Option
Amount Prepayment Date is $50,000,000, a fee equal to Seven
Hundred Fifty Thousand Dollars ($750,000) and, if the principal
amount of Construction Notes so to be prepaid is a lesser
amount, a portion of such fee equal to (i) $750,000 multiplied by
(ii) the quotient of (a) the principal amount so to be prepaid
divided by (b) $50,000,000.
"Construction Option Amount" means a principal amount of
the Construction Notes equal to Fifty Million Dollars
($50,000,000).
"Construction Option Amount Prepayment Date" means the
date in the ninth calendar month after the month in which the
Initial Funding Date falls that is the same numerical date of
the month as the date of the Initial Funding Date.
Section 1.7 Fees Payable to the Purchaser in Connection with
Construction Notes.
(a) Commitment Fees. Lime, on behalf of the SPV, has
heretofore paid you $500,000 in respect of your consideration of the
financing contemplated by this Agreement. On or prior to the Initial
Funding Date, the SPV shall pay or cause to be paid to you an
additional Seven Hundred Forty-Eight Thousand Dollars ($748,000) in
consideration of your commitment hereunder.
(b) Rate Delayed Delivery Fee. If all of the Construction Notes
have not been advanced before the first day of the Rate Commitment
Period with respect thereto, then, beginning on the last day of the
first month following the commencement of such Rate Commitment
Period and continuing on the last day of each month thereafter
during such Rate Commitment Period, the SPV shall pay to you in
respect of the amount of such unadvanced Construction Notes a fee
(the "Rate Delayed Delivery Fee") equal to (i) the average daily
balance of the unadvanced principal amount of the Construction Notes
during such month, multiplied by (ii) a rate per annum equal to the
Uncompensated Yield Rate with respect to the Construction Notes
(determined as of the Rate Acceptance Date with respect to the
Construction Notes), computed on the basis of a 360-day year and
actual days elapsed, multiplied by (iii) the quotient of (x) the number
of days in such month divided by (y) 360. As used herein, the "average
daily balance" for any month shall mean the sum of the unadvanced
balances on each and every day during such month divided by the
number of such days.
(c) Cancellation Fee. The SPV may at any time, upon thirty (30)
days prior written notice to you, cancel all or any portion of the
Unused Commitment, provided that, in the written opinion of the
Independent Engineer (which shall be reasonably acceptable to you),
the portion of the Unused Commitment remaining after such
cancellation is sufficient to pay all Construction Costs as well as
the initial funding of the Debt Service Reserve in an amount equal to
One Year's Debt Service. Upon any such cancellation and, in any
event, if the entire amount of the Commitment Amount has not been
borrowed or cancelled prior to the earlier to occur of (i) the
Conversion Date or (ii) the Construction
<PAGE> -4-<PAGE>
Note Maturity Date, the SPV shall immediately pay to you a
cancellation fee (a "Cancellation Fee") as follows:
(A) the amount of Construction Notes which has been so
cancelled or not borrowed, multiplied by
(B) (1) the Hedge Treasury Security Bid Price Increase
with respect to the Construction Notes (determined as of the
date of such notice, the Conversion Date or the Construction
Note Maturity Date, as the case may be), divided by (2) the Hedge
Treasury Security Bid Price.
In no event shall any Cancellation Fee be less than zero ($0). The
Cancellation Fee shall compensate you for lost opportunity costs and
the costs of re-establishing any investment portfolio position
altered at the time the relevant interest rate was accepted by the
SPV. Such amount shall not be deemed to compensate you for any
other fees incurred in connection with the preparation of, or the
closing or funding of the transaction contemplated by, this
Agreement. Upon payment of the Cancellation Fee, the Rate Delayed
Delivery Fee shall cease to accrue with respect to that portion of
the Unused Commitment so cancelled.
(d) Servicing Fee. The SPV shall pay to you a construction
servicing fee (the "Construction Servicing Fee") of Fifty Thousand
Dollars ($50,000) per annum during the Construction Period, payable in
equal installments semi-annually in arrears on each Debt Payment
Date, commencing on the Debt Payment Date next succeeding the Initial
Funding Date, with a final payment on the Conversion Date, provided
that the Construction Servicing Fee due on the first Debt Payment
Date and the Conversion Date shall be in amounts equal to a ratable
portion of the Construction Servicing Fee then due for the period
ending on such date and commencing on, in the case of the first Debt
Payment Date, the Initial Funding Date and in the case of the
Conversion Date, the Debt Payment Date immediately prior thereto.
(e) Manner of Payment of Fees; Interest on Overdue fees. All
fees required by this Section 1.7 shall be paid in the same manner as
payments made in respect of the Construction Notes. Any amount of
fees not paid on the date due shall thereafter bear interest at a
rate per annum equal to the highest rate from time to time applicable
to any overdue payment in respect of any of the Construction Notes.
Section 1.8 Use of Proceeds of Construction Notes. The proceeds of
the Construction Notes will be used to pay Construction Costs, Transaction
Expenses, the Required Reserve Payment and the distribution (if any)
provided for in the last sentence of Section 2.1(b) of the Deposit and
Disbursement Agreement, and for no other purpose. The SPV shall not use
the proceeds of the Construction Notes to pay any Contingency Costs
unless such Contingency Costs are determined in writing by the Independent
Engineer to be reasonably and necessarily incurred and you shall have
concurred in such determination; provided, however, that the SPV may pay
Contingency Costs that do not exceed $100,000 with respect to any
individual instance and $750,000 in the aggregate (and enter into any
change orders to effect the foregoing) without the prior consent of the
Independent Engineer. On the Conversion Date, the amount of the Required
Reserve Payment shall be deposited by the SPV to the Debt Service Reserve.
<PAGE> -5-<PAGE>
SECTION 2 EXCHANGE OF CONSTRUCTION NOTES FOR TERM NOTES.
Section 2.1 Issuance of Term Notes.
(a) Authorization of Term Notes. The SPV has authorized the
issuance of up to an aggregate principal amount of Fifty Million
Dollars ($50,000,000) of its Senior Secured Term Notes due August 1,
2010 (the "Term Notes"). Each Term Note will be to the effect and
substantially in the form of Exhibit C hereto.
(b) Delivery and Acceptance of Term Notes; Payment of
Construction Notes. Subject to the terms and conditions of this
Agreement, the SPV hereby agrees to execute and deliver to you, and
you hereby agree to accept from the SPV, as payment in full of the
outstanding principal amount of the Construction Notes, a principal
amount of Term Notes equal to the aggregate principal amount of the
Construction Notes outstanding on the Conversion Date after giving
effect to all Advances required by Section 1 of this Agreement,
including, without limitation, the Advances contemplated by Section
1.4.
(c) Conversion Date Closing. The closing of the SPV's issuance
of the Term Notes (the "Term Note Closing") shall be held on the
Conversion Date at 10 a.m., Hartford, Connecticut time, at the offices
of Hebb & Gitlin, One State Street, Hartford, Connecticut. At such
closing, a single Term Note will be delivered to you, which Term Note
will be (i) dated the Conversion Date, (ii) payable as indicated on
Annex 1 hereto, and (iii) in a principal amount equal to the aggregate
principal amount of the Construction Notes outstanding on the
Conversion Date after giving effect to all Advances required by
Section 1 of this Agreement, including, without limitation, the
Advances contemplated by Section 1.4.
Section 2.2 Payments on the Term Notes.
(a) Principal and Interest Payments. In addition to making the
payment required by Section 2.2(b) and paying the entire outstanding
principal amount and interest due on the Term Notes on the Term Note
Maturity Date, the SPV shall pay, and there shall become due and
payable on each Debt Payment Date commencing on the first Debt
Payment Date next succeeding the Conversion Date, an installment of
principal together with interest thereon in the amount set forth on
Annex 2 hereto opposite such date. The Term Notes will bear interest
at the rate of 10.13% per annum calculated on the basis of a 360-day
year of twelve 30-day months. Without limitation of the foregoing, all
of the principal of the Term Notes remaining outstanding on August 1,
2010 (if any) together with interest accrued thereon, shall become due
and payable on August 1, 2010.
(b) Prepayment Upon Total Loss. Upon the occurrence of a Total
Loss, the entire principal amount of the Term Notes shall become
immediately due and payable, without Make-Whole Amount, and the SPV
shall take the actions set forth in Section 11.3.
<PAGE> -6-<PAGE>
Section 2.3 Optional Prepayments of Term Notes.
(a) Prepayment with Make-Whole Amount. After the Conversion
Date, the SPV may prepay the entire principal amount of the Term
Notes at any time together with
(i) an amount equal to the Make-Whole Amount at such
time in respect of the principal amount of the Term Notes being
so prepaid,
(ii) interest on such principal amount accrued to the
prepayment date, and
(iii) all other amounts due and owing to you and the
Collateral Agent hereunder or under any other Transaction
Document.
(b) Prepayment Without Make-Whole Amount. If the SPV has not
exercised the prepayment rights with respect to the Construction
Notes set forth in Section 1.6(c) before the Conversion Date (and as a
result there are no Construction Notes outstanding on the
Construction Option Amount Prepayment Date), the SPV may prepay the
Term Option Amount of the Term Notes, or any portion thereof, on the
Term Option Amount Prepayment Date, together with interest on the
Term Option Amount, or such portion, accrued to the Term Option
Amount Prepayment Date. The SPV shall give notice of any such
prepayment to the Collateral Agent and to the Holders not less than
ten (10) days nor more than thirty (30) days before the Term Option
Amount Prepayment Date, stating that the Term Option Amount, or a
specified portion thereof, will be prepaid on such date. Notice of
such prepayment having been so given, the Term Option Amount, or
such specified portion thereof, accrued interest thereon (but not any
Make-Whole Amount in respect thereof) and the Term Exit Fee shall
become due and payable on the Term Option Amount Prepayment Date.
As used in this Section 2.3(b), the following terms have the following
meanings:
"Term Exit Fee" means, if the principal amount of Term
Notes to be prepaid on the Term Option Amount Prepayment Date
is the $50,000,000, a fee equal to Seven Hundred Fifty Thousand
Dollars ($750,000) and, if the principal amount of Term Notes so
to be prepaid is a lesser amount, a portion of such fee equal to
(i) $750,000 multiplied by (ii) the quotient of (a) the principal
amount so to be prepaid divided by (b) $50,000,000.
"Term Option Amount" means a principal amount of the Term
Notes equal to Fifty Million Dollars ($50,000,000).
"Term Option Amount Prepayment Date" means May 1, 1995.
Section 2.4 Notice of Optional Prepayment. The SPV shall give written
notice of any optional prepayment of Term Notes pursuant to Section 2.3(a)
to the Collateral Agent and to the Holders of Term Notes not less than ten
(10) days nor more than thirty (30) days before the date fixed for
prepayment, specifying
(a) such date, and
<PAGE> -7-<PAGE>
(b) that such prepayment is being made pursuant to Section
2.3(a) of this Agreement.
Notice of prepayment having been so given, the aggregate outstanding
principal amount of the Term Notes together with the Make-Whole Amount (as
calculated by you absent manifest error), if any, and accrued interest
thereon shall become due and payable on the specified prepayment date.
Section 2.5 Application of Prepayments. Each prepayment made
pursuant to Section 1.6(c) or Section 2.3 shall reduce pro rata the amounts
of principal becoming due on each Debt Payment Date subsequent to the date
of such prepayment, such pro rata reduction to be determined by multiplying
the amount of each required payment of principal set forth on Annex 2
hereto by the quotient of the principal amount of Notes so prepaid divided
by the principal amount of Notes outstanding immediately prior to such
prepayment. Immediately after any such prepayment, Annex 2 hereto shall
be deemed to have been amended to (i) reduce subsequent required payments
of principal as aforesaid, and (ii) reduce the amount of interest payable on
each subsequent Debt Payment Date to an amount equal to the amount of
accrued and unpaid interest on the outstanding principal amount of the
Notes to such date (assuming for such purpose that all payments will be
made on the date due).
Section 2.6 Term Servicing Fee. The SPV shall pay to you a term
servicing fee of Twenty-Five Thousand Dollars ($25,000) per annum, payable
in equal installments semi-annually in arrears on each Debt Payment Date,
commencing on the Debt Payment Date next succeeding the Conversion Date,
with a final payment on the Term Note Maturity Date, provided that the
amount of such fee due on the first Debt Payment Date after the
Conversion Date and the amount due on the Term Note Maturity Date shall be
in amounts equal to a ratable portion of such fee then due for the period
ending on such date and commencing on, in the case of such first Debt
Payment Date after the Conversion Date, the Conversion Date, and in the
case of the Term Note Maturity Date, the Debt Payment Date immediately
prior thereto.
Section 2.7 Surrender of Term Notes on Prepayment. If any Term Note is
prepaid, such Term Note shall be surrendered to the SPV for cancellation
and shall not be reissued, and no Term Note shall be issued in lieu of the
prepaid principal amount of any Term Note.
Section 2.8 No Other Prepayments. Except as provided in this Section 2,
the SPV may not make any prepayment (whether directly or indirectly, or by
purchase or other acquisition) in respect of the Term Notes.
SECTION 3 WARRANTIES AND REPRESENTATIONS OF PURCHASER.
You represent and warrant to the SPV as follows:
Section 3.1 Purchase for Investment. That you are purchasing the
Notes for your own account for investment and with no present intention of
distributing or reselling the Notes or any part thereof, but without
prejudice to your right at all times to
<PAGE> -8-<PAGE>
(a) sell or otherwise dispose of all or any part of the Notes
under a registration statement filed under the Securities Act, or in a
transaction exempt from the registration requirements of such Act,
and
(b) have control over the disposition of all of your assets to
the fullest extent required by any Applicable Law.
It is understood that, in making the representations set forth in
Section 4.2 and Section 4.27 hereof, the SPV is relying, to the extent
applicable, upon your representation as aforesaid.
Section 3.2 ERISA. With respect to each source of funds to be used
by you to purchase the Construction Notes (the "Source"), the following
statement is accurate as of the Initial Funding Date:
The Source is assets none of which constitutes assets of
an "employee benefit plan" (as defined in Section 3 of ERISA)
maintained by the SPV, Lime or any ERISA Affiliate or of a
"plan" (as defined in Section 4975(e)(1) of the Code) maintained
by the SPV or Lime or any ERISA Affiliate. In making this
representation, you are relying upon the list of employee
benefit plans, plans and trusts maintained by the SPV, Lime and
their ERISA Affiliates (as set forth on Part 4.21(f) on Annex 3
attached hereto) which have contracts with you.
As used herein, "plan" and "employee benefit plan" shall have the
meaning set forth in Title I, section 3(3) of ERISA.
SECTION 4 WARRANTIES AND REPRESENTATIONS OF THE SPV.
To induce you to enter into this Agreement and to purchase the
Construction Notes, the SPV warrants and represents as follows:
Section 4.1 Organization and Existence. The SPV is a limited
partnership duly organized, validly existing and in good standing under the
laws of the state of Delaware, and has all requisite power and authority to
enter into and perform its obligations under this Agreement, to own its
Property, and to conduct its business in the manner and in the places in
which it is presently proposed to be conducted.
Section 4.2 Due Authorization; No Conflict. Each of this Agreement
and the other Transaction Documents to which the SPV is a party has been
duly authorized by all necessary action on its part, has been duly executed
and delivered by the SPV, and its execution, delivery and performance
thereof do not (i) violate the Partnership Agreement, (ii) contravene any
Applicable Law binding on it or affecting the Project, (iii) contravene or
result in any breach of, or constitute a default under, any indenture,
mortgage, loan agreement, deed of trust, lease or other agreement or
instrument to which it is a party or by which it is bound or (iv) result in, or
require, the creation or imposition of any Lien (other than Permitted Liens)
upon or with respect to any of the Property now owned or hereafter
acquired by it.
Section 4.3 Enforceability. Each of this Agreement and the other
Transaction Documents to which the SPV is a party constitutes its legal,
valid and binding obligation,
<PAGE> -9-<PAGE>
enforceable against it in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting the enforcement of creditors'
rights generally and by general equitable principles.
Section 4.4 Litigation. There is no action, suit, investigation,
proceeding or arbitration pending or to the SPV's knowledge threatened
against the SPV, any of its Properties, the Project, the Site or the Black
River Common Facilities; and no such proceeding is pending or threatened
against any of the foregoing that questions the validity, enforceability or
performance of this Agreement, the Notes or any of the other Transaction
Documents. Except as set forth on Part 4.4 of Annex 3 attached hereto,
there is no action, suit, proceeding or arbitration pending or, to the best
knowledge of the SPV, threatened against the SPV or Lime that (if and when
decided) could reasonably be expected to have a material adverse effect on
their respective business conditions (financial or otherwise) or
operations, or the fulfillment of the Projections, or that could reasonably
be expected to materially and adversely affect the ability of either of
them to perform its obligations under any of the Transaction Documents, or
the maintenance of the Project, the Site, the Black River Common Facilities,
or the installation, construction, testing, ownership, leasing, use,
possession, operation and maintenance of the Project or any part thereof,
or the consummation of the transactions contemplated by this Agreement,
the Notes or any of the other Transaction Documents.
Section 4.5 Governmental Approvals. All Governmental Approvals
required in connection with the execution and delivery of this Agreement
and each other Transaction Document to which the SPV is a party, and all
material Governmental Approvals required in connection with the
construction of the Project or any part thereof as contemplated by the
Transaction Documents, have been obtained and are completely and
accurately listed in Annex 4 hereto, together with the name in which each
such Governmental Approval must be issued. All such Governmental
Approvals have been given, obtained, made, filed or recorded, as the case
may be, and each is subsisting and in full force and effect and contains no
condition required to be met on the date hereof which has not been met, and
no such Governmental Approval is subject to any pending or, to the SPV's
knowledge, threatened, suit, action, inquiry, investigation, proceeding or
appeal (administrative, judicial or otherwise). The time for appeal with
respect to each such Governmental Approval has expired (or if an appeal
has been taken the same shall have been dismissed or otherwise been
finally determined to be unsuccessful). Such Governmental Approvals are
free from conditions or requirements which could reasonably be expected to
affect materially and adversely (i) the performance by the SPV and Lime
under the Transaction Documents, (ii) the construction of the Project and
the Common Facilities or any part thereof as contemplated by the
Transaction Documents, or (iii) the valid transfer, grant or assignment (as
the case may be) of the rights, title, interests and estate to be
transferred, granted and assigned pursuant to the Transaction Documents.
The statements made and information provided by or on behalf of the SPV or
Lime, as the case may be, in connection with each such Governmental
Approval were true, complete and correct in all material respects when
made. Annex 4 hereto lists all other material Governmental Approvals which
will be necessary to obtain prior to the commencement of commercial
operation of the Project (and the SPV has no reason to believe that such
Governmental Approvals will not be obtained prior to the Conversion Date).
To the SPV's knowledge, no Governmental Approvals are required to enable
you, the Collateral Agent and the Disbursement Agent to participate in the
transactions contemplated by this Agreement and the other Transaction
Documents, prior to acquiring the Project through foreclosure or
conveyance or transfer in lieu of foreclosure. All Governmental
<PAGE> -10-<PAGE>
Approvals with respect to which a public hearing was necessary have been
duly issued, and any appeal period with respect to such issuance has
expired.
Section 4.6 Tax Returns. Each of the Partners and the SPV has filed
all Federal, state and local income, franchise and other tax returns, if any,
required to be filed by it on or prior to the date hereof, and has paid any
Taxes shown to be due and payable on such returns; Lime has paid (or caused
to be paid) all other Taxes in respect of the Project and the Site to the
extent the same have become due and payable and before they have become
delinquent.
Section 4.7 Compliance with Law. Each of the Partners and the SPV is
in compliance in all material respects with all Applicable Laws.
Section 4.8 Title to the Project, etc.
(a) The descriptions of the Project Land set forth in the
Ground Lease and the description of the Easement Parcel as set forth
in the Easement Agreement are true, correct and sufficiently
complete to identify such Property and to convey and encumber the
same as contemplated by this Agreement and the other Transaction
Documents.
(b) The Site, the Common Facilities and the Project conform in
all material respects to all covenants, conditions, restrictions,
reservations, and all zoning, environmental, subdivision control, land
use and other applicable Federal, state and local laws, rules,
regulations and ordinances, affecting any of the foregoing.
(c) The SPV has a good, valid and marketable (x) leasehold
estate in and to the Project Land pursuant to the Ground Lease, (y)
easement and use rights in and to the Easement Parcel and the Black
River Common Facilities in accordance with the terms of the Easement
Agreement, and (z) fee title in and to the Project, free and clear of
all Liens (other than Permitted Encumbrances), and such Permitted
Encumbrances do not impair or interfere with (A) the marketability of
the Project, the Project Land, the SPV's rights in and to the Easement
Parcel or the leasehold estate created under the Ground Lease, or (B)
the maintenance of the Project, the Site or the Black River Common
Facilities or the construction, testing, ownership, leasing, use,
possession, operation or maintenance of the Project, the Site or the
Black River Common Facilities.
(d) The SPV Collateral is not subject to any Lien, except for
Permitted Encumbrances and Liens contemplated by the Transaction
Documents.
Section 4.9 No Events of Default. Neither the SPV nor Lime is in
default with respect to any of its obligations hereunder or under any
Transaction Document. No condition exists that would, upon consummation of
the transactions contemplated hereby and by the other Transaction
Documents, constitute a Default or an Event of Default. Lime is not in
default under any of the Existing Creditors Loan Documents.
Section 4.10 Full Disclosure. Neither this Agreement or any
other Transaction Document, nor any certificate, document, or financial
statement (other than the Projections) or other written information
furnished to you by Lime, the SPV or any Partner in connection with the
transactions contemplated hereby, contains any untrue statement of a
material fact or omits to
<PAGE> -11-<PAGE>
state any material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading or that
could materially and adversely affect Lime, the SPV, you, the Project, the
Common Facilities or the Site. All written factual information delivered by
Lime or the SPV or any Partner to the Independent Engineer was true,
accurate and complete in all material respects at the time supplied and did
not fail to state any material fact necessary to make the information
supplied, in light of the circumstances under which it was made, not
misleading. The Projections have been prepared in good faith, to the best
knowledge of the SPV, by Continental Bank Lease Capital Group, and
approved in good faith by each of the SPV and Lime, and are based upon (i)
assumptions that the SPV believes are reasonable and (ii) the best
information available from the management of Lime at the time of the
preparation of such Projections. The SPV has no reason to believe that the
Projections are false or misleading in any material respect.
Section 4.11 Financial Statements of the Corporation and Lime. The
copies of the financial statements of the Corporation and Lime delivered to
you pursuant to Section 5.27 are complete and correct in all material
respects and fairly present the Corporation's and Lime's financial position
as of the dates thereof, and the results of their respective operations
for the periods therein indicated, all in conformity with GAAP consistently
applied (except as stated therein or in the notes thereto).
Section 4.12 Absence of Material Contingencies. Neither the SPV
nor any Partner has any contingent liability other than those created
pursuant to the Transaction Documents.
Section 4.13 Material Patents and Licenses. The SPV owns,
possesses or is duly licensed for a period ending after the Term Note
Maturity Date in respect of all patents, trade secrets, processes,
trademarks, service marks, trade names, copyrights and licenses and rights
as are necessary for the commercial operation of the Project, without any
conflict with the rights of other Persons and without any obligation to pay
royalties or license fees therefor.
Section 4.14 Taxes. None of the acquisition, installation,
construction, maintenance, financing, use, conveyance or operation of the
Project, the Project Land, the Black River Common Facilities, or the
execution, recordation or filing of any Transaction Document by the
respective parties thereto, or the consummation of any of the transactions
contemplated hereby or thereby, will result in any tax, levy, impost, duty,
charge or withholding imposed as of the Initial Funding Date or Conversion
Date, with respect to the respective transactions to be consummated on
such dates, by the United States or the Commonwealth of Kentucky or any
other taxing Governmental Authority or political subdivision thereof,
except for: (i) transfer taxes and registration, recordation and other
miscellaneous fees payable in connection with the recordation or filing of
the Transaction Documents described on Part 4.14 of Annex 3 attached
hereto to be so recorded or filed, all of which taxes and fees shall have
been paid in full when due on or prior to the Initial Funding Date or the
Conversion Date, as the case may be, pursuant to Section 15 hereof; (ii)
Kentucky real and personal property taxes on its Property, including
without limitation, the Project; and (iii) franchise and other similar taxes
for which the SPV and Lime are responsible.
Section 4.15 Utilities. All electrical, telephone, water,
sanitary, septic or water treatment system and other utility services
necessary for the construction, use, operation and maintenance of the
Project, the Site and the Black River Common Facilities are available to the
Project, the Site
<PAGE> -12-<PAGE>
and the Black River Common Facilities pursuant to the Ground Lease, the
MCFA, the Easement Agreement or other public or private easement or use
rights.
Section 4.16 Easements, Servitudes, Rights of Way, etc. All roads,
easements, servitudes, rights of way and other rights of ingress and
egress as are necessary for the installation, construction, completion,
testing, operation, maintenance and use of the Project, the Site and the
Black River Common Facilities have been obtained pursuant to the Ground
Lease, the MCFA, the Easement Agreement or other public or private
easement or use rights and are not adversely affected by any of the
Permitted Encumbrances in any material respect.
Section 4.17 Status of Project Contracts. The Project Contracts
are in full force and effect, in each case as required for the installation,
construction, completion, testing, operation, maintenance and use of the
Project, and the SPV or Lime, on the SPV's behalf, has complied with all
agreements and conditions, if any, to be performed or satisfied by it or
Lime thereunder on or before the date hereof in all material respects. To
the best of the SPV's knowledge, after due inquiry, there is no default on
the part of any party under any Project Contract and no default has
occurred and is continuing which has not been cured or been waived by the
relevant party to such documents. To the SPV's knowledge, each of Lime and
the SPV will be able to comply with all of the terms and conditions of the
Project Contracts to which such Person is a party. Other than the
Transaction Documents to which the SPV is a party, the SPV is not a party
to, nor is any Property of the SPV bound by, any other material agreement.
Section 4.18 Collateral Documents. The SPV Security Agreement
and the Project Mortgage are effective to create a legal, valid and
enforceable Lien upon the SPV Collateral in favor of the Collateral Agent,
and upon proper recording or filing in the locations set forth in Part 4.18
of Annex 3 attached hereto (or, in the case of collateral a Lien on which
must be perfected by possession, delivery of such collateral to the
Collateral Agent), the Collateral Agent will have a first-priority perfected
Lien in the SPV Collateral. No further action is required to establish a
valid and enforceable, first-priority Lien (subject to Permitted Liens) in
and to the SPV Collateral in favor of the Collateral Agent.
Section 4.19 Substantial Completion Date. The SPV has no reason
to believe that the Substantial Completion Date will not occur on or before
June 30, 1995.
Section 4.20 Independent Engineer's Certificate. To the best of
the SPV's knowledge, the statements set forth in the Independent
Engineer's Certificate described in Section 5.7 are correct in all material
respects and the SPV is not aware of any fact which could reasonably be
expected to make such statements materially untrue, incorrect or
incomplete.
Section 4.21 ERISA.
a. Prohibited Transactions. Neither the execution of
any Transaction Document nor the purchase of the Construction Notes
by you will constitute a "prohibited transaction" (as defined in
section 406 of ERISA or section 4975 of the Code).
<PAGE> -13-<PAGE>
b. Compliance with ERISA. Each of the Corporation, Lime
and the SPV are in compliance with ERISA, except for such failures to
comply that, individually or in the aggregate, could not reasonably be
expected to have a material adverse effect on the business,
prospects, profits, Properties or condition (financial or otherwise) of
such Persons or on the Project.
c. Funding Status. No "accumulated funding deficiency"
(as defined in section 302 of ERISA and section 412 of the Code)
exists with respect to any Pension Plans of the Corporation, Lime or
the SPV. No ERISA Affiliate has an accumulated funding deficiency
that could reasonably be expected to have a material adverse effect
on the business, prospects, profits, Properties or condition
(financial or otherwise) of such Persons or on the Project.
d. PBGC. No liability to the PBGC has been or is
expected to be incurred by any of the Corporation, Lime or the SPV or
any ERISA Affiliate of any such Persons with respect to any Pension
Plan that, individually or in the aggregate, could reasonably be
expected to have a material adverse effect on the business,
prospects, profits, Properties or condition (financial or otherwise) of
such Persons or on the Project. No circumstance exists that
constitutes grounds under section 4042 of ERISA entitling the PBGC
to institute proceedings to terminate, or appoint a trustee to
administer, any Pension Plan or trust created thereunder, nor has
the PBGC instituted any such proceeding.
e. Multiemployer Plans. Neither the Corporation, Lime
or the SPV, nor any ERISA Affiliate has incurred or presently expects
to incur any withdrawal liability under Title IV of ERISA with respect
to any Multiemployer Plan that could reasonably be expected to have a
material adverse effect on the business, prospects, profits,
Properties or condition (financial or otherwise) of such Persons or on
the Project. There have been no "reportable events" (as defined in
section 4043 of ERISA) with respect to any Multiemployer Plan that
could result in the termination of such Multiemployer Plan and give
rise to a liability of the Corporation, Lime or the SPV or any ERISA
Affiliate in respect thereof that could reasonably be expected to
have a material adverse effect on the business, prospects, profits,
Properties or condition (financial or otherwise) of such Persons or on
the Project.
f. Existing Pension Plans. Part 4.21(f) of Annex 3
hereto sets forth a complete and accurate listing of all ERISA
Affiliates, and all employee benefit plans, plans and trusts
maintained by any one or more of them, indicating in each case
whether any of such employee benefit plans, plans or trusts have
contracts with Prudential.
Section 4.22 Environmental Matters. Each of the SPV and Lime has
at all times complied in all material respects with all Environmental Laws
and the requirements of any permits issued under such Environmental Laws
with respect to the Site and the Project. To the SPV's knowledge, there are
no circumstances that may hinder, delay, interfere with or prevent the
installation, ownership, construction, testing, maintenance and operation
of the Project or the use of the Site, as contemplated by the Transaction
Documents, in full compliance with applicable Environmental Laws. All
material Governmental Approvals required under Environmental Laws to
install, construct, test, maintain and operate the Project are completely
and accurately listed
<PAGE> -14-<PAGE>
in Annex 4 hereto, together with the name in which such Governmental
Approval must be issued. Except as disclosed on Part 4.22 of Annex 3
hereto, there are no past, pending or, to the SPV's knowledge, threatened
Environmental Claims against Lime, the SPV, the Project, the Site or any of
the Black River Common Facilities. Since the Site has been owned by Lime
and, to the SPV's knowledge, before the Site was owned by Lime, Hazardous
Materials have not been generated, used, treated, located or stored on, or
transported to or from, the Site, the Black River Common Facilities or the
Project, and the SPV has not used, and does not intend to use, nor permit,
any portion of the Site, the Black River Common Facilities or the Project
for such purposes other than, in the case of any of the foregoing, (i) as
necessary to operate the Project and (ii) in compliance, in all material
respects, with all applicable Environmental Laws. Since the Site has been
owned by Lime and, to the SPV's knowledge, before the Site was owned by
Lime, Hazardous Materials have not at any time been released, deposited or
disposed of on or from the Site, the Black River Common Facilities or the
Project in any way contrary to that which is allowed under applicable
Environmental Laws. Except as disclosed on Part 4.22 of Annex 3 hereto,
there are no present or, to the best knowledge of the SPV, after due
inquiry, past actions, activities, circumstances, conditions, events or
incidents, including the release, emission, discharge, presence or disposal
of Hazardous Materials, that could (i) form the basis of an Environmental
Claim against Lime or the SPV, the Project, the Site or the Black River
Common Facilities, that individually or in the aggregate could have a
material adverse effect on the business, prospects, profits, Properties or
condition (financial or otherwise) of Lime, the SPV or the Project, (ii) cause
the Site, the Black River Common Facilities or the Project to be subject to
any restrictions on its ownership, occupancy, use or transferability under
any Environmental Laws, (iii) interfere with the continued use and
occupancy of the Site or the Black River Common Facilities or the
installation, construction, testing, maintenance or operation of the
Project, or (iv) prevent performance under the Transaction Documents.
Except as set forth in Part 4.22 of Annex 3 hereto, there are not now and
never have been any underground storage tanks located on the Site.
Polychlorinated biphenyls ("PCBs") do not contaminate any part of the Site,
and no PCBs are used, stored or located at the Site, the Black River Common
Facilities or the Project, except in material compliance with Applicable Law.
Section 4.23 Federal Power Regulation Act. The SPV is not subject
to regulation under the Federal Power Act, as amended.
Section 4.24 Holding Company Act. The SPV is neither a "public
utility company" nor a company all of whose equity interest is owned by one
or more public utility companies, all within the meaning of Rule 7(d)(1)(B)
promulgated by the SEC under the Holding Company Act.
Section 4.25 Investment Company Act. The SPV is not an
"investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act.
Section 4.26 Margin Regulations. None of the transactions
contemplated by this Agreement or any other Transaction Document will
violate or result in a violation of Section 7 of the Securities Exchange Act
of 1934, as amended, or any regulations issued pursuant thereto, including,
without limitation, Regulations G, T, U and X of the Board of Governors of
the Federal Reserve System, 11 C.F.R., Chapter 11, as amended and none of
the Corporation, Lime or the SPV is engaged in the business of extending
credit for the purpose of purchasing or carrying margin stock as defined in
Regulation G.
<PAGE> -15-<PAGE>
Section 4.27 Securities Act. Neither the SPV or Lime nor any
Person authorized to act on behalf of any of such Persons (each, a "Lime
Offeror"), has offered directly or indirectly, any "security" within the
meaning of the Securities Act, with respect to the Project, the Construction
Notes or the Term Notes, as the case may be, for issue or sale to, or
solicited offers to acquire any thereof from, or otherwise approached or
negotiated with any Person other than an aggregate, for all the Lime
Offerors, of thirty (30) Accredited Investors (in addition to you), nor has
any Lime Offeror conducted any offering or solicitation which, for
purposes of the Securities Act and the rules and regulations of the SEC
promulgated thereunder, would be deemed to be part of the offering or
solicitation described in the preceding sentence in violation of Section 5
of the Securities Act, and no Lime Offeror has taken or, on the Conversion
Date, will have taken, any action which would subject the issuance or sale
of any such security to the registration requirements of said Section 5.
Section 4.28 Other Business. The SPV has not engaged in any
business transaction unrelated to the development, construction,
ownership, operation, maintenance, and financing of the Project; and the
SPV is not a shareholder in any corporation or a partner, party or
participant in any partnership, joint venture or other similar commercial
venture.
Section 4.29 Uncontrollable Force. No Uncontrollable Force which
would allow any party to any Transaction Document to avoid all or any part
of its obligations under such Transaction Document has occurred or, to the
best of its knowledge, after due inquiry, is threatened.
Section 4.30 Insurance; Statements to Insurers. All insurance
coverage required by Section 12 hereof is in full force and effect. All
representations and warranties made by the SPV, Lime or their respective
authorized representatives to any insurer in connection with any
insurance required to be maintained by the SPV or Lime under any
Transaction Document were true, correct and complete in all material
respects when made.
Section 4.31 Financial Broker; Fees. Neither the SPV nor Lime has
retained any broker, finder or financial advisor, and neither of them is
liable for payment of any fee to any Person for brokerage or financial
advisory services rendered on its behalf, in connection with any of the
transactions contemplated by this Agreement and the other Transaction
Documents, except for the relationship between Lime and Continental Bank
Lease Capital Group.
Section 4.32 The Project. The Project has been, and is being,
properly constructed on the Site in good and workmanlike manner and, in all
material respects, in accordance with the Plans and Specifications and
Applicable Law and in a manner that will allow it to be operated and
maintained in accordance with the Transaction Documents. The SPV has no
reason to believe that the Project does not or will not have the capacity
and functional ability to perform, on a continuous basis, the functions and
the capacity for which it was designed. The SPV is not aware of any event
or condition existing which presently adversely affects or is likely in the
future to adversely affect, such design, construction, equipping,
installation, operation or maintenance.
Section 4.33 Restrictive Agreements. The SPV is not a party to
any document, instrument, security, evidence of Debt or any other
agreement, document or instrument of any kind, other than the Transaction
Documents, which restricts the ability of the SPV to incur indebtedness or
enter into leases with respect to any Property or engage in sale and
leaseback
<PAGE> -16-<PAGE>
transactions or dispose of assets, or which contains terms and provisions
which subject after-acquired Property of the SPV to any Lien.
Section 4.34 Sufficiency of Support Agreements. The rights to be
granted to the SPV pursuant to the Ground Lease, the Easement Agreement,
the MCFA and the other Transaction Documents are sufficient in the
aggregate to enable the SPV to occupy, use, possess, own, operate and
maintain on a commercially reasonable and economic basis (at Total Net
Capability) and possess the Site, the Project and the Black River Common
Facilities until the Term Note Maturity Date. The rights of the SPV under
the Ground Lease, the MCFA, and the Easement Agreement, which are the only
real property and other rights necessary for the construction, operation,
maintenance, repair, testing, use, possession and ownership of the Project,
have been validly obtained and are in full force and effect. The SPV does
not have any reason to believe that there will be contractual or, based
upon Applicable Law, other legal rights required for such occupancy, use,
possession, ownership, operation and maintenance of the Site, the Project
and the Black River Common Facilities, or that there will be other services
or materials required for such operation, maintenance, use, occupancy and
possession of the Site, the Project and the Black River Common Facilities,
other than those provided for under the Ground Lease, the Easement
Agreement and the MCFA.
Section 4.35 Location of Chief Executive Office. The chief
executive office and chief place of business of the SPV is located on P.O.
Box 137, Highway 8 - Carntown, Butler, Kentucky 41006; and the office where
the SPV keeps its records concerning its accounts relating to the Project
is located at (i) McDuffie Island Ezra Trice Boulevard, Mobile, Alabama 36602
and (ii) 3600 One Oliver Place, Pittsburgh, Pennsylvania 15222, and no other
place.
Section 4.36 Ownership. DBR General Inc. is the sole general
partner, and Dravo Black River Limited Inc. is the sole limited partner of
the SPV. One hundred percent (100%) of the capital stock of Dravo Black
River Limited Inc. is owned by Lime. One hundred percent (100%) of the Class
A Common Stock of DBR General Inc. is owned by Lime.
Section 4.37 Labor Matters. The SPV is not a signatory to any
labor or collective bargaining agreement. Neither the SPV nor Lime has
been the subject of a labor stoppage or strike during the period from July
1, 1989 through the date hereof.
SECTION 5 CONDITIONS TO FUNDING.
Your obligations to make an Advance on the Initial Funding Date shall
be subject to satisfaction of all of the following conditions precedent:
Section 5.1 Initial Funding Date. The Initial Funding shall occur no
later than September 30, 1994.
Section 5.2 Equity Contribution. Lime, through the Partners, shall
have made the Investment.
Section 5.3 Opinions of Counsel. You shall have received from
(a) Hebb & Gitlin, your special counsel,
<PAGE> -17-<PAGE>
(b) Wyatt, Tarrant & Combs, your Kentucky counsel,
(c) Buchanan Ingersoll, counsel to the SPV, the Partners and
to Lime,
(d) Richards, Layton & Finger, counsel to the Collateral
Agent,
(e) internal counsel to OPCO, and
(f) internal counsel to KVS,
closing opinions, addressed to you and dated the Initial Funding Date, in
form and substance satisfactory to you. In addition, you shall have
received closing opinions from counsel to such other Project participants
and as to such matters as you shall reasonably request.
Section 5.4 Warranties and Representations True; No Construction
Defaults. The warranties and representations contained in Section 4
hereof, and all warranties and representations made by each other party to
any Transaction Document (other than you) in any of the Transaction
Documents or in any certificate delivered pursuant to Section 5.5 of this
Agreement, shall be true and correct on the Initial Funding Date with the
same effect as though made on and as of that date, and no Default or Event
of Default shall exist.
Section 5.5 Closing Certificates. You shall have received:
(a) a certificate of the SPV, dated the Initial Funding Date,
in form and substance satisfactory to you, certifying that all
actions required to be taken by the SPV prior to the initial purchase
of the Construction Notes have been duly taken, that the
representations and warranties contained in Section 4 hereof, and
all other representations made by the SPV in any other Transaction
Document, are true and correct on and as of the Initial Funding Date,
and that no Default or Event of Default exists;
(b) certificates dated the Initial Funding Date and signed by
a Senior Officer of each other party to any Financing Document
(other than you), in form and substance satisfactory to you,
certifying that all representations and warranties made by such
Person in any Transaction Document or in any certificate delivered
pursuant thereto, are true and correct on and as of the Initial
Funding Date;
(c) a certificate of the SPV dated the Initial Funding Date in
form and substance satisfactory to you, with respect to the
Partnership Agreement and related matters; and
(d) a certificate dated the Initial Funding Date and signed by
the Secretary or an Assistant Secretary of Lime and each of the
Partners, in form and substance satisfactory to you, with respect to
the certificate of incorporation of Lime , each Partner and their
respective by-laws, resolutions and other corporate matters.
Section 5.6 Legality; Litigation. The issuance of the Construction
Notes and the Class B Common Stock, and consummation of the transactions
contemplated by the Transaction
<PAGE> -18-<PAGE>
Documents, shall not violate any Applicable Law; and no suit or similar
proceeding shall have been initiated challenging the legality or validity of
the Construction Notes, the Class B Common Stock or any other Transaction
Document or any Governmental Approval. The Construction Notes shall
qualify as a legal investment for insurance companies under applicable
insurance law (without regard to any "basket" or "leeway" provisions) and
you shall have received such evidence as you may reasonably request to
establish compliance with this condition. No litigation, governmental
investigation or other proceeding shall be pending or threatened by any
Person which, if adversely determined, could prevent or make unlawful or
impose any material adverse condition upon the Project (or any part
thereof) or the OPCO Agreement or the construction, start-up or operation
of the Project (or any part thereof) or the SPV's ownership thereof or the
Collateral Agent's Liens on the collateral under the SPV Security
Agreement and the other Transaction Documents.
Section 5.7 Initial Funding Draw Request. The Construction Manager
shall have submitted a Draw Request signed by the SPV to you and the
Independent Engineer, not less than five (5) Business Days prior to the
Initial Funding Date, together with a construction status report prepared
by the Construction Manager detailing the progress of the construction of
the Project and containing a statement to the effect that, after giving
effect to the requested funding, the Project can be completed in
accordance with the Construction Schedule and at a cost within the
Construction Budget; and, not less than two (2) Business Days prior to the
Initial Funding Date, the Independent Engineer shall have delivered to you
a certificate (the "Independent Engineer's Certificate") in form and
substance satisfactory to you, stating that the Independent Engineer (i)
concurs with such construction status report and (ii) has approved such
Draw Request in all respects.
Section 5.8 SPV Security Agreement.
(a) SPV Security Agreement. The SPV and the Collateral Agent
shall have entered into the SPV Security Agreement which shall
encumber, among other things, all personal property of the SPV. The
SPV Security Agreement shall be in full force and effect, the SPV
shall be in full compliance with all of its obligations thereunder, and
the Liens of the Collateral Agent created by the SPV Security
Agreement and the other Transaction Documents shall constitute
valid first-priority Liens upon the SPV Collateral subject only to
Permitted Liens.
(b) Financing Statements and Other Filings. All filings of
Uniform Commercial Code financing statements and all other filings
and actions necessary for the consummation of the transactions
contemplated by this Agreement and the Transaction Documents and to
establish, perfect, preserve and protect the security interests and
Liens created and granted under, or assigned by, the SPV Security
Agreement and the other Transaction Documents shall have been filed
or taken, and you shall have received evidence satisfactory to you of
the proper recording of such financing statements and the first
priority perfected status of such security interests and Liens,
subject only to Permitted Liens. All recording, subscription and other
similar fees, and all taxes and other expenses related to such
filings, registrations and recordings shall have been paid in full by
the SPV.
<PAGE> -19-<PAGE>
(c) Taxes. All Taxes, if any, payable in connection with the
execution, delivery, recording or filing of any Transaction Document
or in connection with the transactions to be consummated on the
Initial Funding Date, shall have been paid in full.
Section
(a) Construction Contracts. Lime shall have executed and
delivered the Construction Contracts, and Lime's interest in the
Construction Contracts and all other contracts and agreements
relating to the construction of the Project shall have been
absolutely assigned to the SPV. Such assignments shall have been (i)
effected pursuant to one or more assignments in form and substance
acceptable to you, and (ii) in the case of the contractors listed on
Part 5.9(b) of Annex 3, consented to by such contractors. The
Construction Contracts shall be in full force and effect and each
party thereto shall be in full compliance with its respective
obligations thereunder.
(b) Construction Management Agreement. The SPV and Lime shall
have executed and delivered the Construction Management Agreement,
the Construction Management Agreement shall be satisfactory to you
in all respects, the Construction Management Agreement shall be in
full force and effect and each party thereto shall be in full
compliance with its obligations thereunder.
Section 5.10 OPCO Agreement. The rights and interests of Lime
under the OPCO Agreement shall have been absolutely assigned to the SPV
pursuant to documentation satisfactory to you in all respects, and the
rights and interests of the SPV therein shall have been assigned to the
Collateral Agent pursuant to the SPV Security Agreement. On the Initial
Closing Date, (i) the OPCO Agreement (as so assigned) shall be in full force
and effect, (ii) each party thereto shall be in full compliance with its
obligations thereunder, (iii) OPCO, Lime and the SPV shall have each
executed and delivered to the Collateral Agent the OPCO Consent, and (iv)
the OPCO Consent shall be in full force and effect.
Section 5.11 MCFA; Ground Lease; Easement Agreement. Lime and the
SPV shall have entered into the MCFA, the Ground Lease and the Easement
Agreement. On the Initial Funding Date, (i) each of the MCFA, the Ground
Lease and the Easement Agreement shall be in full force and effect, (ii)
each of the parties thereto shall be in full compliance with its respective
obligations thereunder, and (iii) the Ground Lease and the Easement
Agreement shall have been duly recorded in each office in which
recordation is necessary in order to publish notice of the rights, titles
and interests created thereunder.
Section 5.12 Intercreditor Agreement. The Secured Parties shall
have executed and delivered the Intercreditor Agreement and such
agreement shall be in full force and effect.
Section 5.13 Lime Security Agreement; Lime Pledge Agreement. Lime
shall have executed and delivered to the Collateral Agent the Lime Security
Agreement and the Lime Pledge Agreement, and both shall be in full force
and effect. The Lien of the Collateral Agent created by the Lime Security
Agreement shall constitute a valid perfected Lien on the Property
purported to be encumbered thereby, junior only to the Lien of the Existing
Creditors to the extent set forth in the Intercreditor Agreement. The Lien
of the Collateral Agent created by the Lime Pledge Agreement shall
constitute a valid first perfected Lien on the Equity Collateral. All stock
<PAGE> -20-<PAGE>
certificates representing the Equity Collateral shall have been delivered
to the Collateral Agent together with stock powers duly endorsed in blank.
Section 5.14 Partner Security Agreement. The SPV General Partner
and the SPV Limited Partner shall have executed and delivered to the
Collateral Agent the Partner Security Agreement conveying to the
Collateral Agent a security interest in and to the entire partnership
interest of each such partner in the SPV, together with one or more
appropriate financing statements duly executed by each such partner. The
security interests created by the Partner Security Agreement shall be
perfected, first security interests, and the Partner Collateral shall be
subject to no other Lien except a Lien in favor of the Existing Creditors.
Section 5.15 Project Mortgage and Title Insurance.
(a) Project Mortgage. The SPV shall have executed and
delivered to the Collateral Agent the Project Mortgage which shall
encumber, among other things, the leasehold estate of the SPV
created by the Ground Lease and the easements and other rights
created by the Easement Agreement. The Project Mortgage shall have
been properly recorded in the public land records in and for
Pendleton County, Kentucky, and any other office in which it is
required to be recorded to give the public constructive notice
thereof and of the interests created thereby or otherwise to perfect
the same, and all taxes, recording fees and other fees and charges
required by Applicable Law to be paid in connection therewith shall
have been duly paid in full. In addition, any and all other actions
required to give the public constructive notice of, or otherwise to
perfect, the Project Mortgage and the interest created thereby shall
have been taken. The Project Mortgage shall have created a valid
first-priority Lien in and to the interests of the SPV purported to be
encumbered thereby, subject to no Liens other than Permitted Liens.
The Project Mortgage shall be in full force and effect without any
defaults thereunder.
(b) Title Insurance. The SPV shall have delivered to you and
the Collateral Agent a policy of mortgage title insurance (ALTA
Leasehold Loan Policy Form 1975) (the "Title Policy") insuring the
Project Mortgage. The Title Policy shall
(i) be issued by the Title Company,
(ii) be dated not earlier than the Initial Funding Date,
(iii) be in an amount not less than the Commitment Amount,
(iv) insure that Lime has good and marketable title to
the Project Land,
(v) insure the SPV's leasehold interest in the Project
Land,
(vi) insure the SPV's interest in the Easement Parcel,
and
(vii) be otherwise satisfactory to you in all respects.
<PAGE> -21-<PAGE>
You shall have received certified copies of all encumbrances listed
as exceptions to the Title Policy, in sufficient time for review by you and
your counsel prior to the Initial Funding Date, and such encumbrances shall
be satisfactory to you in all respects.
Section 5.16 Execution and Delivery of Other Transaction Documents;
Copies. Each of the parties thereto (other than you) shall have taken the
actions, and executed and delivered the other Transaction Documents,
including, without limitation, the Subscription and the Class B Common Stock,
which they are required to take, execute and deliver pursuant to this
Agreement; and each of the Transaction Documents shall be in full force
and effect and each party thereto shall be in full compliance with its
respective obligations thereunder. You shall have received original fully
executed counterparts of each of the Transaction Documents.
Section 5.17 Governmental Approvals. All material Governmental
Approvals required by Applicable Law in connection with the ownership,
construction and financing of the Project shall have been duly obtained;
certified copies of all such authorizations, licenses, orders, permits and
approvals shall have been delivered to you; and all of such authorizations,
licenses, orders, permits and approvals shall be in full force and effect,
and (to the extent assignable without rendering them void or voidable) shall
have been assigned to the Collateral Agent pursuant to the SPV Security
Agreement.
Section 5.18 Surveys. On or prior to the Initial Funding Date, the
SPV shall have delivered to you a current survey or surveys of the Site,
certified to you, the Collateral Agent and the Title Company as of a date
not more than thirty (30) days prior to the Initial Funding Date, which
survey or surveys shall be in form, scope and substance satisfactory to
you and the Title Company.
Section 5.19 Soil Test. The SPV shall have delivered to you, in
sufficient time for review by you and the Independent Engineer prior to the
Initial Funding Date, a soil test report or reports prepared by a soil
engineer licensed by the Commonwealth of Kentucky satisfactory to you and
the Independent Engineer and addressed to you, and containing boring logs
for all borings and showing the locations of all borings, together with
recommendations by such engineer for the design of the foundations of the
Project and confirming that no conditions exist which could cause
subsidence of any portion of the Site.
Section 5.20 Environmental Site Assessments. You shall have
received a Phase I environmental site assessment, addressed to you, and
such other environmental investigations, reports or analyses from the
Environmental Consultant as you may request in respect of the Site, all in
form and substance satisfactory to you.
Section 5.21 Environmental Disclosures. You shall have received,
in sufficient time for review by you, the Independent Engineer and your
counsel prior to the Initial Funding Date, a copy of any environmental
disclosure statement (or similar filing) required by any Governmental
Authority, or evidence reasonably satisfactory to you that no such
environmental disclosure statement is required.
Section 5.22 Technical Evaluation of Project. You shall have
received an evaluation from the Independent Engineer, addressed to you, in
form and substance reasonably satisfactory
<PAGE> -22-<PAGE>
to you, regarding the construction, feasibility and operation of the Project
and such other matters relating thereto as you may request.
Section 5.23 Easements. You shall have received evidence
reasonably satisfactory to you that the Project is benefited by such
easements or other rights as may be necessary for the ownership,
construction, maintenance and operation of the Project, including without
limitation, vehicular and pedestrian access, egress and regress to, from
and over the Project, together with all instruments and agreements by
which such easements or other rights are created, all in sufficient time
for review by you and your counsel prior to the Initial Funding Date.
Section 5.24 Utilities. You shall have received, in sufficient
time for review by you and your counsel prior to the Initial Funding Date,
certified by the SPV, letters from appropriate Governmental Authorities or
other evidence reasonably satisfactory to you that the Project will have
adequate water, gas and electrical supply, storm and sanitary sewer
facilities, and other required public utilities, fire and police protection
and means of access to publicly dedicated roadways.
Section 5.25 Construction Matters. The General Contractor, the
Construction Contracts, the Plans and Specifications, the Construction
Schedule, the Construction Budget and all other matters relating to the
construction of the Project shall be satisfactory to you and the
Independent Engineer in all respects.
Section 5.26 Insurance. You shall have received a certificate
from the insurance broker or agent engaged by the SPV or Lime in respect
of the Project and from the Insurance Consultant, each addressed to you
and in form and substance satisfactory to you, to the effect that all of
the insurance policies contemplated by Section 12 of this Agreement have
been obtained by the SPV or Lime. All such policies shall be in full force
and effect, and the Collateral Agent and you shall have received binders or
certificates acceptable to you and the Insurance Consultant with respect
thereto.
Section 5.27 Financial Statements; Projections. You shall have
received
(a) financial statements from the Corporation and Lime for
each of their five most recently completed fiscal years, together
with financial statements for their most recently completed fiscal
quarter at the time of the Initial Funding (unless such fiscal quarter
is the fourth fiscal quarter of their fiscal years), in each case
satisfactory to you, and
(b) certified copies of the Projections, in form and substance
satisfactory to you, showing the projected revenues and expenses of
the Project during the period commencing on the Conversion Date
through and including the Term Note Maturity Date.
Section 5.28 Private Placement Number. You shall have obtained a
private placement number from Standard & Poor's CUSIP Service Bureau for
the Construction Notes.
<PAGE> -23-<PAGE>
Section 5.29 Supporting Documentation. In connection with the
Draw Request submitted with respect to the Initial Funding Date, you shall
have received each of the following, and each shall be satisfactory to you
in all respects:
(a) Lien Waivers -- from the General Contractor and each
other contractor, supplier, materialman or other Person that has
supplied labor, materials or services for procurement, design or
construction of the Project or that otherwise might be entitled to
claim a contractual or statutory Lien against the Project, the Site,
the Black River Common Facilities or any part thereof, waivers of
Liens and any other statement, instrument or agreement as you may
deem to be necessary or desirable;
(b) Contractor Disputes -- if any significant dispute has
arisen between the SPV or the Construction Manager and any
contractor or subcontractor, a written summary of the nature of such
dispute; and
(c) Other Information -- such other information and documents
as you may reasonably request in connection with such Draw Request
and the status of construction of the Project.
Section 5.30 Fees and Expenses. All of the fees and expenses
required to have been paid to you on or prior to the Initial Funding Date,
including without limitation the balance of the commitment fee due pursuant
to Section 1.7(a) hereof and the Transaction Expenses pursuant to Section
15 hereof, shall have been paid. In addition, Lime shall have paid to you a
fee in the amount of One Million Eleven Thousand Four Hundred Forty-Three
and 09/100's Dollars ($1,011,443.09) for the prepayment rights set forth in
Section 1.6(c) and Section 2.3(b).
Section 5.31 Material Adverse Change; Uncontrollable Force. There
shall have been no change in the business, prospects or financial condition
of any one or more of the SPV, the Project, Lime, or OPCO which, in your
reasonable judgment, could be expected to have a material adverse effect
on the Project or the ability of any of such Persons to perform any
material obligation under any Transaction Document. There shall not have
occurred any Uncontrollable Force which would allow any party to any of the
Transaction Documents to avoid all or any material part of its obligations
thereunder.
Section 5.32 Offering and Sale of Construction Notes. You shall
have received a letter, dated the Initial Funding Date, from Continental
Bank Lease Capital Group to the effect that it has not directly or
indirectly offered any Security with respect to the Project for issue or
sale to, or solicited offers to acquire such Security from, or otherwise
approached or negotiated with, more than thirty (30) Accredited Investors in
addition to you, and that it has not taken any action which would subject the
issuance and sale of the Construction Notes or the Term Notes to the
registration requirements of Section 5 of the Securities Act.
Section 5.33 Solvency. You shall have received pro forma balance
sheets of each of the SPV and Lime as of the Initial Funding Date showing
the effect of the transactions contemplated by this Agreement on such
date, which balance sheets shall show a solvent financial condition and be
certified by the respective Senior Financial Officers of each of the SPV
and Lime, as the case may be.
<PAGE> -24-<PAGE>
Section 5.34 Collateral Agent; Disbursement Agent. You, the
Collateral Agent, the SPV, Lime and each of the Partners shall have entered
into the Collateral Agency Agreement, and such agreement shall be in full
force and effect. The Collateral Agent, the Disbursement Agent and the
SPV shall have entered into the Deposit and Disbursement Agreement, and
such agreement shall be in full force and effect.
Section 5.35 Proceedings Satisfactory; Additional Documents. All
proceedings taken in connection with the sale of the Construction Notes
and all documents and papers relating thereto shall be reasonably
satisfactory in all respects to you and your counsel. You and your counsel
shall have received copies of such documents and papers as you or they
may reasonably request in connection therewith or in connection with your
counsel's closing opinion, all in form and substance satisfactory to you and
such counsel. You shall have received such other approvals, opinions or
documents as you shall reasonably request.
SECTION 6 CONDITIONS PRECEDENT TO SUBSEQUENT CONSTRUCTION FUNDINGS.
Your obligations to make Advances in respect of the Construction
Notes on any Funding Date subsequent to the Initial Funding Date (each a
"Subsequent Funding Date") shall be subject to satisfaction of all of the
following terms and conditions:
Section 6.1 Continued Satisfaction of Initial Funding Conditions. All
Transaction Documents shall be in full force and effect and no Default or
Event of Default shall exist. All conditions required to have been
satisfied by Section 5.2, Section 5.4, Section 5.6, Section 5.8, Section 5.9,
Sections 5.10 through 5.17, Section 5.25, Section 5.26, Section 5.31 and
Section 5.34 of this Agreement on and as of the Initial Funding Date shall,
whether or not fulfillment of such conditions shall have previously been
waived, be satisfied on and as of such Subsequent Funding Date and all
references therein to the Initial Funding Date shall be deemed to be
references to such Subsequent Funding Date; and you shall have received
such certificates, legal opinions and other evidence of such continued
satisfaction as you may deem necessary or appropriate.
Section 6.2 Material Adverse Change; No Default. All Transaction
Documents shall be in full force and effect. There shall have been no
change in the business, prospects or financial condition of any one or more
of the SPV, the Project, Lime, or OPCO which, in your reasonable judgment,
could be expected to have a material adverse effect on the Project or the
ability of any of such Persons to perform any material obligation under any
Transaction Document; and no Default or Event of Default shall exist.
There shall not have occurred any Uncontrollable Force which would allow
any party to any of the Transaction Documents to avoid all or any material
part of its obligations thereunder.
Section 6.3 Subsequent Funding Date Draw Requests. The Construction
Manager shall have submitted to you and the Independent Engineer a Draw
Request signed by the SPV, not less than five (5) Business Days prior to
such Subsequent Funding Date, together with a construction status report
prepared by the Construction Manager detailing the progress of the
construction of the Project and containing a statement to the effect that,
after giving effect to the requested funding, the Project can be completed
in accordance with the Construction Schedule and at a cost within the
Construction Budget; and, not less than two (2) Business Days prior to the
such Subsequent Funding Date, the Independent Engineer shall have
delivered to you the
<PAGE> -25-<PAGE>
Independent Engineer's Certificate, stating that the Independent Engineer
(i) concurs with such construction status report and (ii) has approved such
Draw Request in all respects.
Section 6.4 Supporting Documentation. You shall have received each of
the following, and each shall be satisfactory to you in all respects:
(a) Lien Waivers -- from the General Contractor and each
other contractor, supplier, materialman or other Person that has
supplied labor, materials or services for procurement, design or
construction of the Project or that otherwise might be entitled to
claim a contractual or statutory Lien against the Project, the Site or
any part thereof, waivers of Liens and any other statement,
instrument or agreement as you may deem to be necessary or
desirable;
(b) Contractor Disputes -- if any significant dispute has
arisen between the SPV or Lime, as construction supervisor under the
Construction Management Agreement, and any contractors or
subcontractors, a written summary of the nature of such dispute;
(c) Other Information -- such other information and documents
as you may reasonably request in connection with such disbursement
request and the status of construction of the Project; and
(d) Title Policy Endorsements -- such endorsements to the
Title Policy as you may deem necessary or appropriate to insure the
Project Mortgage as security for the entire amount of Construction
Notes outstanding at any time, which endorsements shall delete any
exceptions for mechanics' liens and "pending disbursements" with
respect to the requested Advance and all previous Advances and be
satisfactory to you in all respects.
Section 6.5 Equity Funding. Lime shall have made the contributions to
the equity capital of the SPV required by Section 3.15 of the Lime Security
Agreement.
Section 6.6 Proceedings Satisfactory. All proceedings taken in
connection with such disbursement and all documents and papers relating
thereto shall be reasonably satisfactory in all respects to you and your
special counsel (including Kentucky counsel). You and your counsel shall
have received copies of such documents and papers as you or they may
reasonably request in connection therewith, all in form and substance
reasonably satisfactory to you and such counsel. You shall have received
such other approvals and documents as you shall reasonably request.
SECTION 7 PROVISIONS RELATING TO CONSTRUCTION.
Section 7.1 Completion of Construction. The SPV shall diligently and
continuously cause to be pursued the construction of the Project (and any
rebuilding of the Project required under Section 9.6 of this Agreement) in
accordance with Prudent Industry Practice and generally accepted
engineering practice and construction procedures, the Plans and
Specifications and the Construction Schedule. The construction shall be
completed in a good and workmanlike manner with materials of high quality,
free of defects and Liens (other than Permitted Liens) and in accordance
(in all material respects) with all Applicable Laws and insurance
requirements
<PAGE> -26-<PAGE>
under the Transaction Documents. The Project shall have achieved
Substantial Completion not later than June 30, 1995.
Section 7.2 Changes in Plans and Specifications. The SPV shall not
make any changes to the Plans and Specifications without your prior
written consent. Except to the extent permitted by Section 1.8, the SPV
shall not amend any Construction Contract or the Construction Budget
without your prior written consent.
Section 7.3 Inspection. The SPV agrees to cooperate and to cause Lime
to cooperate in arranging and allowing any one or more of you, the
Independent Engineer, the Environmental Consultant and any of their
respective designees or representatives to inspect and review from time to
time the progress of construction of the Project at reasonable times and
at reasonable intervals.
Section 7.4 Contingency Fund. The Construction Budget shall contain a
line item designated as the contingency fund which shall represent an
amount necessary to fund cost overruns or change orders in amounts in
excess of the Construction Costs set forth in the Construction Budget.
Except to the extent otherwise permitted by Section 1.8, any decisions as to
whether to use all or any portion of the contingency fund for payment of
any such cost overruns or other unexpected additional costs shall be made
only with your consent.
Section 7.5 Sufficiency of Construction Note Proceeds. If at any time
you, after consultation with the Independent Engineer, reasonably
determine that the Unused Commitment will not be sufficient to pay in full
all Construction Costs and other amounts required to be paid in accordance
with this Agreement, then you shall have no obligation to make further
Advances until the SPV has provided you with adequate assurance that
additional equity funds are or will be available on terms and conditions and
from creditworthy entities acceptable to you, in your sole discretion, to
complete the Project in accordance with the requirements of Section 7.1.
Section 7.6 Employment of the Independent Engineer. You shall have the
right to employ the Independent Engineer, the Environmental Consultant,
the Insurance Consultant and such other advisors as you may deem
reasonably necessary or appropriate to review the Project Contracts and
all other matters related to construction of the Project, and to inspect
such construction and the progress thereof from time to time in accordance
with Section 7.3.
Section 7.7 Retainages. No Draw Request shall request an Advance for
more than the total amount then due in respect of any Construction
Contract (less applicable retainage) or any Construction Costs that are
otherwise due and payable, as certified by the Independent Engineer. That
portion of the Unused Commitment which has not been advanced as a
consequence of the foregoing sentence shall be advanced only upon (i)
completion of the work to be performed under such Construction Contract in
accordance with the Plans and Specifications as certified by the
Independent Engineer and (ii) delivery of a final waiver of Lien and sworn
statement from such contractor, subcontractor or material supplier as to
its receipt of full and final payment for the work done or materials
provided.
Section 7.8 Off-Site Materials. You shall not be required to advance
proceeds of any Construction Notes in respect of material to be used in
connection with the construction of the Project but which is stored off-
site unless you, in your sole discretion, determine to make such
<PAGE> -27-<PAGE>
an Advance after having been provided with satisfactory evidence that (i)
such stored material is included within the coverages of insurance
required to be maintained by the Transaction Documents, (ii) the ownership
of such material is vested in the SPV free of any Liens and claims of third
parties, (iii) the Collateral Agent has a valid and perfected first-priority
Lien thereon under the Project Mortgage or the SPV Security Agreement and
(iv) such materials are protected against theft and damage.
Section 7.9 Insurance. The SPV shall cause the Construction Manager
to maintain the insurance coverages required by Section 12 of this
Agreement.
SECTION 8 CONDITIONS PRECEDENT TO PURCHASE OF TERM NOTES.
Notwithstanding anything herein to the contrary, your obligation to
purchase the Term Notes in accordance with Section 2.1 of this Agreement
shall be subject to satisfaction of the following conditions precedent not
later than the Construction Note Maturity Date; provided that your
obligation shall not be subject to your own performance or compliance if
such performance or compliance is within your control:
Section 8.1 Notice of Conversion Date. The SPV shall have submitted to
you a written notice specifying the Conversion Date, which date shall be (i)
not earlier than ten (10) days after the date of such notice, and (ii) not
later than the Construction Note Maturity Date.
Section 8.2 No Default; Construction Note Interest Paid. No Default or
Event of Default shall exist, and the SPV shall have paid the interest on
the Construction Notes accrued to the Conversion Date as well as all other
outstanding amounts then owed to you pursuant to this Agreement and each
other Transaction Document.
Section 8.3 Opinions of Counsel. You shall have received from
(a) Hebb & Gitlin, your special counsel,
(b) Wyatt, Tarrant & Combs, your Kentucky counsel,
(c) Buchanan Ingersoll, counsel to the SPV, the Partners and
to Lime, and
(d) Richards, Layton & Finger, counsel to the Collateral
Agent,
and such other counsel as you deem reasonably necessary, closing opinions,
each dated as of the Conversion Date, covering matters of the type covered
by the opinions delivered pursuant to Section 5.3 hereof, and such other
matters as you may reasonably request.
Section 8.4 Warranties and Representations True; No Defaults. The
warranties and representations contained in Section 4 hereof, and all
warranties and representations made by the SPV and each other party in
any other Transaction Document or in any certificate delivered pursuant to
Section 8.5 of this Agreement, shall be true and correct on the Conversion
Date with the same effect as though made on and as of that date. The
Governmental Approvals listed in Annex 4 hereto shall have been obtained,
and all representations and warranties set forth in Section 4.5 shall apply
thereto and be true and correct on the Conversion Date.
<PAGE> -28-<PAGE>
Section 8.5 Closing Certificates. You shall have received
(a) a certificate of the SPV, dated the Conversion Date, in
form and substance satisfactory to you, certifying that all actions
required to be taken by the SPV prior to the Conversion Date have
been duly taken, that the representations and warranties contained
in Section 4 hereof and all other representations made by the SPV in
any other Transaction Document are true and correct on and as of the
Conversion Date, and that no Default or Event of Default has
occurred, and
(b) certificates dated the Conversion Date and signed by a
Responsible Officer of each party to any Financing Document (other
than you) in form and substance satisfactory to you, certifying that
all representations and warranties made by such Person in any
Transaction Document and in each certificate delivered pursuant
thereto, are true and correct on and as of the Conversion Date.
Section 8.6 Legality; Litigation. The issuance of the Term Notes and
consummation of the transactions contemplated by the Transaction
Documents shall not violate any Applicable Law; and no suit or similar
proceeding shall have been initiated challenging the legality or validity of
the Term Notes. The Term Notes shall qualify as a legal investment for
insurance companies under applicable insurance law (without regard to any
"basket" or "leeway" provisions) and you shall have received such evidence
as you may reasonably request to establish compliance with this condition.
No litigation, governmental investigation or other proceeding shall be
pending or threatened by any Person which, if adversely determined, could
prevent performance under the Transaction Documents or make unlawful or
impose any material adverse condition upon the Project (or any part
thereof) or the OPCO Agreement or the construction, start-up or operation
of the Project (or any part thereof) or the SPV's ownership thereof or the
Collateral Agent's Liens on any of the Collateral.
Section 8.7 Execution and Delivery of Transaction Documents; Copies.
Each Person (other than you) required to act under any Transaction
Document shall have taken the actions, and executed and delivered those
Transaction Documents (including, without limitation, the Transportation
Agreement), which such Person is required to take, execute and deliver
pursuant thereto; and such Transaction Documents shall be in full force
and effect and each party thereto shall be in full compliance with its
respective obligations thereunder. You shall have received original fully
executed counterparts of each of such Transaction Documents.
Section 8.8 OPCO Agreement. On the Conversion Date, (i) the OPCO
Agreement shall be in full force and effect, (ii) each party thereto shall be
in full compliance with its obligations thereunder (including, without
limitation, that commercial operation of the Project shall have commenced),
and (iii) the OPCO Consent shall be in full force and effect.
Section 8.9 Continued Effectiveness of Agreements. Each of the MCFA,
the Deposit and Disbursement Agreement, the Ground Lease, the Easement
Agreement, the Mortgage Subordination Agreement, the Construction
Management Agreement, the Construction Contracts and the Intercreditor
Agreement shall be in full force and effect and each party to such
documents shall be in material compliance with its respective obligations
thereunder.
<PAGE> -29-<PAGE>
Section 8.10 Title Policy Endorsements. The SPV shall have
executed and delivered a statement in accordance with Kentucky Revised
Statutes Section 382.380 and such other mortgage modification
documentation as may be required by you. You shall have received such
endorsements to the Title Policy as you may deem reasonably necessary or
appropriate to insure your interest, and such endorsements shall be
satisfactory to you in all respects.
Section 8.11 Insurance. All of the insurance policies required by
Section 12 of this Agreement shall be in full force and effect, and you
shall have received binders or certificates acceptable to you and the
Insurance Consultant with respect thereto.
Section 8.12 Fees and Expenses. All of the fees and expenses
required to have been paid to you on or prior to the Conversion Date
pursuant to Section 15 hereof shall have been paid.
Section 8.13 Material Adverse Change; Uncontrollable Force. There
shall have been no change in the business, prospects, or condition
(financial or otherwise) of any one or more of the SPV, the Project, the
Black River Facility, Lime, or OPCO which could reasonably be expected to
have a material adverse effect on the Project or the ability of any of such
Persons to perform any material obligation under any Transaction
Document. There shall not have occurred any Uncontrollable Force which
would allow any party to any Transaction Document to avoid all or any part
of its obligations under such Transaction Document.
Section 8.14 Final Approvals. You shall have received true and
correct copies of all Final Approvals. All Final Approvals shall have been
duly obtained, be in full force and effect, have been validly issued, be
final and nonappealable and not be subject to any condition, limitation, or
other provision that in your reasonable judgment has had or could
reasonably be expected to have a material adverse effect on the Project.
The Project shall comply in all material respects with all Final Approvals.
Section 8.15 Completion Certificates. The Construction Manager
shall have delivered a completion certificate, in form and substance
satisfactory to you, and the Independent Engineer shall have delivered a
completion certificate, in form and substance satisfactory to you, each of
which shall, among other things, certify that the Project has been
completed subject only to Punch List Items, and that the Project meets or
exceeds the Plans and Specifications and the Performance Criteria set
forth in the Construction Contracts.
Section 8.16 As-Built Survey. You shall have received an as-built
survey of the Site, prepared by a registered or certified land surveyor of
the Commonwealth of Kentucky, showing the perimeter boundary of the Site,
all encroachments by or upon the Site, all building line restrictions,
easements, drainage or flowage rights, rights-of-way, means of access and
any uses which affect the Site (together with appropriate references to
recorded instruments relating to such instruments), all buildings,
structures and other improvements thereon and all paving, driveways and
fences, if any, in place, and such other information as you may reasonably
request. Said survey or surveys shall be currently dated and shall be
prepared in accordance with the standards issued by the American Land
Title Association, bearing a certification in favor of you, the Collateral
Agent, the Title Company and the SPV that is in all respects satisfactory to
you.
<PAGE> -30-<PAGE>
Section 8.17 Operating Budget. You shall have received an
operating budget for the twelve (12) month period immediately following the
Conversion Date which shall be in form and content reasonably
satisfactory to you.
Section 8.18 Environmental Matters. You shall have received such
environmental site assessments and other reports regarding the current
state of the Project as you or the Environmental Consultant deem
reasonably necessary or desirable, all acceptable to you in form and
content.
Section 8.19 Construction Costs; Required Reserve Payment. All
Construction Costs shall have been paid in full, or an amount sufficient to
pay any remaining Construction Costs shall have been delivered to the
Disbursement Agent for deposit into the Construction Completion Account.
The Required Reserve Payment, if any, shall have been paid to the
Disbursement Agent for deposit pursuant to Section 2.3(a) of the Deposit
and Disbursement Agreement, and, after giving effect to such deposit and
any payment required to be made by Lime pursuant to Section 3.15 of the
Lime Security Agreement, the amount on deposit in the Debt Service Reserve
shall be not less than Six Months' Debt Service.
Section 8.20 Solvency. You shall have received a pro forma
balance sheet of each of the SPV and Lime as of the Conversion Date
showing the effect of the transactions contemplated by this Agreement
which balance sheets shall show a solvent financial condition and be
certified by the respective Senior Financial Officers of each of the SPV
and Lime.
Section 8.21 Private Placement Number. You shall have obtained a
private placement number for the Term Notes from Standard & Poor's CUSIP
Service Bureau.
Section 8.22 Proceedings Satisfactory; Additional Documents. All
proceedings taken in connection with the purchase of the Term Notes, and
all documents and papers relating thereto, shall be reasonably
satisfactory in all respects to you and your counsel. You and your counsel
shall have received copies of such documents and papers as you or they
may reasonably request in connection therewith or in connection with your
counsel's closing opinion, all in form and substance reasonably
satisfactory to you and such counsel. You shall have received such other
approvals, opinions or documents as either of you shall reasonably
request.
SECTION 9 COVENANTS AND AGREEMENTS.
The SPV covenants and agrees that on and after the Initial Closing
Date and so long as any of the Notes shall be outstanding:
Section 9.1 Maintenance of Existence. The SPV shall at all times
maintain its existence as a limited partnership organized under the laws of
the state of Delaware, shall not take or permit to be taken any action which
would have the effect of terminating its existence, and shall qualify and
remain qualified to do business and to carry on its operations in the
Commonwealth of Kentucky. The SPV will acquire, maintain and renew all
Governmental Approvals, contracts, powers, privileges, leases, lands,
sanctions, franchises and other authorizations necessary for the conduct
of its operations, and will comply with all Applicable Laws, in each case
where the failure to do so would have a material adverse effect upon its
<PAGE> -31-<PAGE>
business or financial condition or its ability to perform its obligations
under this Agreement or any other Transaction Document.
Section 9.2 Maintenance of Permits. The SPV will keep or cause to be
kept current and will obtain, maintain or cause to be obtained and
maintained in full force and effect all material Governmental Approvals
and will promptly obtain and maintain the effectiveness of all other
licenses, consents, regulatory commission approvals, certificates of public
convenience and necessity and permits that from time to time may be
necessary or, in your reasonable judgment, advisable, in connection with (x)
the installation, construction, testing, delivery, conveyance and operation
of the Project and the Black River Common Facilities, (y) the performance by
the SPV of its obligations under this Agreement or any of the other
Transaction Documents or (z) maintaining and ensuring the legality,
validity, binding effect or enforceability of any of the Transaction
Documents.
Section 9.3 Environmental Matters. The SPV shall comply (or shall
cause Lime, as Operator, to comply) in all material respects with all
Environmental Laws now or hereafter applicable to the Site, the Project,
the Black River Common Facilities or the installation, construction, testing,
delivery, conveyance, use, modification or operation thereof. The SPV
shall, or it shall cause Lime as Operator to, conduct any investigation,
study, sampling or testing required by Applicable Law, and undertake any
cleanup, removal, remedial action or other action necessary to remove from
and clean up or remediate all Hazardous Materials at or released on or from
the Site, the Black River Common Facilities or the Project, in accordance
with all applicable Environmental Laws and Governmental Approvals. If the
SPV or Lime shall be required to take any action pursuant to the preceding
sentence, it shall cause to be prepared by an environmental consulting firm
(selected by the SPV or Lime and reasonably acceptable to you) a report
describing the environmental condition requiring such action and the
actions taken by it in response to such environmental condition, and shall
obtain a statement by such firm that such condition has been remedied in
compliance with all applicable Environmental Laws.
Section 9.4 Payment of Notes and Maintenance of Office.
(a) Payment of Notes. The SPV will punctually pay, or cause to
be paid, the principal of and interest (and Make-Whole Amount, if any)
on, the Notes, as and when the same shall become due according to the
terms hereof and of the Notes.
(b) Maintenance of Chief Executive Office. The SPV will
maintain its chief executive office at the address of the SPV set
forth in Section 4.35 hereof where notices, presentations and
demands in respect hereof or the Notes may be made upon it. The SPV
shall not change the location of its chief executive office without
providing at least thirty (30) days prior written notice to each Holder
and to the Collateral Agent.
Section 9.5 Maintenance of Books and Records. The SPV shall maintain
true and correct books of records and accounts in which full and correct
entries will be made of all its business transactions (i) in accordance with
sound business practices and GAAP consistently applied and (ii) so as to
enable the SPV and Lime to comply with their respective obligations under
the Transaction Documents and to permit proper audits and accountings of
the transactions contemplated thereby.
<PAGE> -32-<PAGE>
Section 9.6 Operation and Maintenance. The SPV shall, or shall cause
the Operator to, (a) at all times maintain the Project Land and operate,
maintain, service and repair the Project and the Project-Owned Common
Facilities in such condition that it will have the capacity and functional
ability to perform, on a continuing basis, in normal commercial operation,
the functions for which it was designed, and at Total Net Capability,
ordinary wear and tear excepted; (b) operate, service, maintain, inspect,
overhaul, test and repair the Project and replace all necessary or useful
parts and components thereof so that the condition and operating
efficiency of the Project will be maintained and preserved in all respects
in accordance with (i) Prudent Industry Practice, (ii) such operating
standards as shall be required to take advantage of and enforce all
available warranties, (iii) all manufacturers' recommended procedures, (iv)
such operating standards and procedures as are or may from time to time be
mandated by any Governmental Authority or as may be required in order to
perform its obligations under the Project Contracts, (v) the terms and
conditions of, and so as to preserve all coverage under, all insurance
policies required to be maintained pursuant to Section 12 hereof, (vi) to the
extent not inconsistent with the other requirements of this Section 9.6,
Lime's operation and maintenance practices with respect to similar
facilities owned, leased or operated by it, and (vii) all requirements of
Applicable Law (except as otherwise provided in Section 9.10) and the Ground
Lease, and (c) maintain all records, logs, manuals and other materials in
respect of the Project and the Site, in accordance with Prudent Industry
Practice. The SPV shall not permit the Project or the Site to be maintained,
used or operated in any manner or for any purpose excepted from any
insurance in respect of the Project. For purposes of enabling it to comply
with the requirements of this Section 9.6, the SPV shall at all times
maintain (or cause to be maintained) a sufficient inventory of spare parts,
consistent with Prudent Industry Practice, giving due regard to
manufacturers' recommendations in this regard.
Section 9.7 Plans and Specifications. The SPV shall at all times
maintain and keep on file at its chief executive office a complete set of
the Plans and Specifications.
Section 9.8 Operating Logs. The SPV shall (i) maintain daily operating
logs showing the production from the Project, (ii) keep maintenance and
repair reports in sufficient detail to indicate the nature of all major work
done with respect to the Project and (iii) maintain current operating
manuals (including training, maintenance and technology manuals) and a
complete set of plans and an as-built survey of the Project in sufficient
detail to enable an engineer not otherwise familiar with the Project to
locate and identify the various items of Property comprising the Project, in
each case in accordance with Prudent Industry Practice. Such logs and
reports shall be kept on file at the Project and at its chief executive
office for at least ten years, shall be retained so long as any Note is
outstanding and shall be made available in compliance with Section 10.6
hereof.
Section 9.9 Payment of Taxes. The SPV shall file or cause to be filed
all Federal, state and local tax returns which are required to be filed by it,
and shall pay or discharge or cause to be paid or discharged before any
penalty accruing from the failure to so pay or discharge, all taxes,
assessments and governmental charges, imposts, duties and levies charged,
levied or imposed upon it or upon its income, profits or Property (including
withholding and any penalties, interest and additions to taxes).
Section 9.10 Compliance with Applicable Law. The SPV shall comply
in all material respects with all requirements of Applicable Law and shall
obtain and maintain all material
<PAGE> -33-<PAGE>
Governmental Approvals (and furnish copies thereof to the Holders) as
shall at any time be necessary or, in the reasonable opinion of the Holders,
advisable, under Applicable Law in connection with the ownership,
construction, operation, use, possession or maintenance of the Project, the
Site and the Black River Common Facilities or any material Governmental
Approval and the Ground Lease except if: (a) the SPV shall be contesting
diligently and in good faith by appropriate proceedings such requirement of
Applicable Law or Governmental Approval and has established all necessary
or appropriate reserves in compliance with GAAP in connection with such
contest; or (b) compliance with such requirements or Governmental Approval
shall have been excused or exempted by a valid nonconforming use permit,
waiver, extension or forbearance exempting the SPV from such requirement
or action. If the foregoing clause (a) or (b) shall apply then the failure by
the SPV to comply with such requirement or to obtain such action shall not
constitute a Default or an Event of Default hereunder; provided, however,
that such contest or noncompliance does not involve (i) any risk of the
imposition of criminal liability on any Person (except Persons not party to
any Transaction Document who shall have agreed in writing to accept the
risk of foreclosure, sale, forfeiture or loss of the Site, the Project, or
the Black River Common Facilities or any material Governmental Approval),
(ii) any risk of material civil liability being imposed upon any Person
(except Persons not party to any Transaction Document who shall have
agreed in writing to accept such risk and its consequences), or (iii) any
material risk of (A) the creation of a Lien (other than a Permitted Lien) on
the Site, the Project or the Black River Common Facilities, or (B) the
extension of the ultimate imposition of such requirement or Governmental
Approval beyond the date that is six months after the Term Note Maturity
Date. The SPV shall promptly, but in any event within 10 days of the
occurrence thereof, provide you with notice of any contest or
noncompliance of the types described in clauses (a) and (b) of the second
sentence of this Section 9.10 in detail sufficient to enable you to
ascertain whether such contest or noncompliance may have any effect of
the type described in the proviso to the first sentence in this Section 9.10.
At your request, the SPV agrees to contest, at its sole cost and expense
and using counsel reasonably acceptable to you, any requirement of
Applicable Law; provided that the SPV receives (x) an opinion of counsel
reasonably acceptable to it to the effect that there is a reasonable
likelihood of success on the merits and (y) a reasonably detailed
explanation of the reasons for such request for the SPV to contest such
matters and provided, further, that the contest will not have a material
adverse effect on the operation of the Project, and that such contest, or
noncompliance during such contest, does not violate the standards set
forth in the proviso to the second sentence in this Section 9.10.
Section 9.11 Purchase of Notes. Neither the SPV nor any of its
Affiliates shall acquire or hold, directly or indirectly, any Note (or any
interest therein), whether by purchase, participating interest, pledge or
otherwise.
Section 9.12 Further Assurances. The SPV shall at its sole cost
and expense cause to be promptly and duly taken, executed, acknowledged
and delivered all such further acts, documents, assurances and information
(financial or otherwise) relating to the Site, the Project, the Black River
Common Facilities or the Transaction Documents or the rights of the other
parties thereto as such other Persons may, from time to time, reasonably
request in order to carry out more effectively the intent and purposes of
this Agreement and the other Transaction Documents, and the transactions
contemplated hereby and thereby. The SPV shall cause the financing
statements (and continuation statements with respect thereto), termination
statements and the documents enumerated and described in Part 4.18 of
Annex 3 hereto, and all other documents necessary in that connection, to be
recorded or filed at such places and times, and in such
<PAGE> -34-<PAGE>
manner, and shall take, or shall cause to be taken, all such other action as
may from time to time be necessary or reasonably requested by you in order
to (i) establish, preserve, protect and perfect the SPV's right, title and
interest in and to the Project, and (ii) establish, preserve, protect and
perfect the Lien and security interest of the Collateral Agent in and to
the Collateral.
Section 9.13 Disposition of Assets. The SPV shall not convey,
sell, lease, sublease or otherwise dispose of, in one transaction or a
series of transactions (or agree in writing to do any of the foregoing at
any future time) any of its Property or any part thereof, including, without
limitation, the OPCO Agreement, other than sales of processed lime in the
ordinary course of business and distributions to Lime of amounts paid to
the SPV pursuant to Section 2.2(b)(ii)(F) of the Deposit and Disbursement
Agreement.
Section 9.14 Change in Name. The SPV shall not change its name or
adopt an assumed, business or trade name without providing at least thirty
(30) days prior written notice to each Holder and to the Collateral Agent.
Section 9.15 Nature of Business. The SPV shall not (i) engage in
any business other than the ownership, operation and maintenance of the
Project as contemplated by the Transaction Documents, or (ii) directly or
indirectly become a shareholder in any corporation or acquire or become a
party to any other commercial enterprise or venture.
Section 9.16 Debt; Bank Account. The SPV shall not directly or
indirectly create, incur, assume, issue or otherwise become liable, directly
or indirectly, with respect to any Debt other than pursuant to, or as
contemplated by, the Transaction Documents. The SPV shall maintain no bank
accounts (or similar accounts) other than those maintained pursuant to the
Deposit and Disbursement Agreement.
Section 9.17 Filing of Reports. The SPV, at its own expense, shall
prepare and, upon the request of any Holder, file, in timely fashion any
reports with respect to the construction, start-up, maintenance, ownership,
condition or operation of the Project that shall be required to be filed with
any Governmental Authority by the Project Contracts, by Applicable Law or
in connection with the transactions contemplated by this Agreement or any
of the other Transaction Documents.
Section 9.18 Transactions with Affiliates. The SPV shall not
engage in any transaction with any Affiliate, except (a) transactions with
Affiliates as expressly contemplated by and in accordance with the
Transaction Documents and (b) with respect to transactions other than
those referenced in clause (a), only (i) in the ordinary course of business
and pursuant to the good faith reasonable requirements of the SPV's and
such Affiliate's business and (ii) upon fair and reasonable terms which are
not less favorable to it than would be available in a comparable transaction
with an unrelated Person.
Section 9.19 Loans; Investments. The SPV shall not make any
loans, advances or extensions of credit to any of its Partners, employees,
agents or contractors, or make any investment in any Person or Property
except as contemplated by the Transaction Documents.
Section 9.20 Additional Agreements. If at any time the SPV shall
enter into any new Project Contract or other material contract or
agreement for the supply of essential goods and
<PAGE> -35-<PAGE>
services or obtain any additional Governmental Approval, the SPV shall
promptly execute and deliver an assignment in form and substance
reasonably satisfactory to you, assigning to the Collateral Agent all right,
title and interest of the SPV in, to and under such Project Contract or
material contract or agreement or Governmental Approval which Project
Contract, material contract, agreement or Governmental Approval shall
become part of the Collateral; provided, however, that the SPV shall have no
obligation to assign any Governmental Approval the assignment or
encumbrance of which is prohibited by Applicable Law.
Section 9.21 Payment of Project Revenues. The SPV shall (i)
instruct all Persons obligated to it for the payment of money to pay all
such sums directly to the Disbursement Agent and (ii) pay over to the
Disbursement Agent promptly upon receipt all the Project Revenues in the
form received (together with any required endorsements), all such funds to
be held and disbursed by the Disbursement Agent in accordance with the
Deposit and Disbursement Agreement.
Section 9.22 Performance and Enforcement of Agreements. The SPV
shall at all times, unless the Holders otherwise consent in writing, perform
and observe all of its covenants under each of the Project Contracts,
diligently enforce all of its rights and obligations thereunder, and
maintain each Project Contract in full force and effect, and (except to the
extent expressly permitted herein or in any other Transaction Document)
shall not amend, modify, supplement, terminate or waive any provision of,
any Project Contract, or consent to any such amendment, modification,
supplement, termination or waiver, without the prior written consent of the
Holders.
Section 9.23 Liens. The SPV shall not directly or indirectly
create, incur, assume or suffer to exist any Lien on or with respect to the
Site, Project, the Black River Common Facilities, the Ground Lease, the
Collateral, the Assigned Documents, the SPV's title thereto or interest
therein, or on or with respect to any title or interest of the SPV therein or
in any other asset of the SPV, except Permitted Liens; and the SPV, at its
own risk and expense, shall promptly take such action as may be necessary
duly to discharge any such Lien. The SPV shall take or cause to be taken
all action necessary to maintain and preserve the Lien of the SPV Security
Agreement and the Project Mortgage.
Section 9.24 Reports of Liens. The SPV shall promptly, and in no
event later than five (5) Business Days after it shall have obtained
knowledge of the attachment of any Lien other than a Permitted Lien, notify
the Collateral Agent in writing of the attachment of such Lien and of the
full particulars thereof unless the same shall have been theretofore
discharged or removed.
Section 9.25 Most Favored Nation. The SPV shall not, without the
consent of the Holders, take any action which would require it to adjust the
purchase price to OPCO under the OPCO Agreement in accordance with
Article XXII of the OPCO Agreement.
<PAGE> -36-<PAGE>
SECTION 10 INFORMATION AS TO THE COMPANIES.
Section 10.1 Financial and Business Information.
The SPV shall deliver to Holder, the Collateral Agent and the
Disbursement Agent:
(a) Fiscal Quarter Statements of the SPV -- as soon as
practicable after the end of each of the first three fiscal quarters
of each fiscal year, and in any event within forty-five (45) days
thereafter,
(i) an unaudited balance sheet of the SPV as at the end
of such fiscal quarter, and
(ii) statements of operations, retained earnings and
cash flows of the SPV, for such fiscal quarter and the portion
of the fiscal year through such fiscal quarter,
all in reasonable detail, prepared in accordance with GAAP applicable
to quarterly financial statements generally, and setting forth in
each case, in comparative form, (A) the figures for the corresponding
period in the previous fiscal year and (B) the corresponding figures
set forth in the Projections, and certified as complete and correct,
subject to changes resulting from year-end adjustments, by a Senior
Financial Officer of the SPV, and accompanied by the certificate
required by Section 10.2 hereof;
(b) Annual Statements of the SPV -- as soon as practicable
after the end of each fiscal year of the SPV, and in any event within
ninety (90) days thereafter,
(i) a balance sheet of the SPV, as at the end of such
fiscal year, and
(ii) statements of operations, retained earnings and
cash flows of the SPV, for such fiscal year,
all in reasonable detail, prepared in accordance with GAAP applicable
to annual financial statements generally, and setting forth, in
comparative form, (A) the corresponding figures for the previous
fiscal year and (B) the corresponding figures set forth in the
Projections, and accompanied by a report thereon by an accounting
firm of recognized national standing, which report shall, without
qualification (including, without limitation, qualifications related to
the scope of the audit or the ability of the SPV to continue as a going
concern), state that such financial statements present fairly, in all
material respects, the financial position of the SPV and its results
of operations and cash flows and have been prepared in conformity
with GAAP, and that the examination of such accountants in connection
with such financial statements has been made in accordance with
generally accepted auditing standards, and that such audit provides
a reasonable basis for such report in the circumstances;
(c) Fiscal Quarter Project Statements -- as soon as
practicable, but in any event within 45 days after the end of each of
the first three fiscal quarters of the SPV, in each fiscal year, the
SPV shall prepare or cause to be prepared financial statements and
<PAGE> -37-<PAGE>
cash flow statements for each of the Project and the Black River
Facility, setting forth in each case in comparative form (i) the
corresponding figures for corresponding periods in the preceding
fiscal year and (ii) the corresponding figures in the Projections;
(d) Fiscal Year Project Statements -- as soon as practicable,
but in any event within 90 days after the end of each fiscal year of
the SPV, the SPV shall prepare or cause to be prepared financial
statements and cash flow statements for each of the Project and the
Black River Facility, setting forth in each case in comparative form
(i) the corresponding figures for the preceding fiscal year and (ii)
the corresponding figures in the Projections;
(e) Federal Income Tax Returns -- promptly upon filing, copies
of each federal income tax return of the SPV;
(f) Lime Sales -- as soon as practicable, but in any event
within 45 days after the end of each fiscal quarter, a written
statement indicating (i) the amount of lime sold (expressed in tons) to
OPCO and each other Person during such fiscal quarter, (ii) the rate
or rates at which such lime was sold and (iii) the amount, if any,
refunded or required to be refunded to OPCO with respect to such
fiscal quarter in accordance with the OPCO Agreement, accompanied by
a certificate of a Senior Financial Officer of the SPV attesting to
the accuracy thereof;
(g) Notice of Default or Event of Default -- promptly upon any
Senior Financial Officer of the SPV obtaining knowledge of any
condition or event which constitutes a Default or an Event of
Default, a written notice specifying the nature and period of
existence thereof and what action the SPV is taking or proposes to
take with respect thereto;
(h) Accountants' Reports -- promptly upon receipt, a copy of
each material report or letter delivered to the SPV by its
independent public accountants in connection with any annual,
quarterly or special audit of its financial statements or its
financial condition;
(i) Change of Accountants -- as soon as practicable, but in
any event within forty-five (45) days thereof, a statement indicating
any change in the SPV's regularly retained firm of independent
certified public accountants, and the reason for such change;
(j) Material Adverse Change -- promptly upon becoming aware
thereof, written notice of any material adverse change in the
business, operations, prospects, profits, Properties or condition
(financial or otherwise) of the SPV, the Project, the Black River
Facility or Lime, or any material default, breach, event of default or
material claim under any Transaction Documents or any other material
contractual obligation relating to the Project;
(k) Project Notices -- promptly upon the receipt or sending
thereof, each material notice, demand, report or other communication
(other than those, such as invoices, which are delivered in the
ordinary course of business or otherwise required to
<PAGE> -38-<PAGE>
be delivered pursuant to the Transaction Documents, but including,
without limitation, all change orders) delivered or received by it
pursuant to any Project Contract or otherwise in respect of the
Project (together with copies of the same);
(l) Actions, Proceedings -- promptly after the filing of any
complaint with, or the initiation of any proceeding by, any Person
relating to any party to the Transaction Documents (to the extent
based on such Person's participation in the Project or the
transactions contemplated by the Transaction Documents), the Site,
the Project, the Black River Common Facilities, any of the Transaction
Documents or any of the transactions contemplated by any of the
Transaction Documents, a written notice thereof and in each case
with a copy of all pleadings and a written statement setting forth the
details of the action (if any) it is taking or proposes to take with
respect to such proceedings;
(m) Certain Environmental Matters -- immediately upon becoming
aware thereof, written notice of, and a description of (i) (A) any
condition or occurrence at, on, or arising from the Site, the Project
or the Black River Common Facilities that results in any material
noncompliance with any Environmental Law, or (B) any pending or
threatened Environmental Claim by any Person against Lime, the SPV,
or any other party to the Transaction Documents (to the extent based
on such Person's participation in the Project or the transactions
contemplated by the Transaction Documents), the Site, the Project or
the Black River Common Facilities and (ii) all written communications
with any Governmental Authority relating to an alleged violation of
any Environmental Laws and all written communications with any
Person relating to Environmental Claims, together with copies of any
written communications or material relating to the same. All such
notices shall describe in reasonable detail the nature of the claim,
investigation, condition, incident, or occurrence and the SPV's
response thereto. It shall also promptly provide such detailed
reports of any Environmental Claims as may reasonably be requested
by any such party;
(n) ERISA -- promptly upon becoming aware thereof, written
notice of the occurrence of any Reportable Event as defined in ERISA
and of any additional act or condition arising in connection with any
Pension Plan which could reasonably constitute grounds for the
termination thereof by the PBGC or for the appointment by the
appropriate United States district court of a trustee to administer
any such Pension Plan;
(o) Notice of Change in Governmental Approval -- promptly upon
becoming aware thereof, written notice of any change or proposed
change in, or any notice or claim of violation of, Applicable Law, or
any Governmental Approval which has (or could reasonably be expected
to have) a material adverse effect on its business, operations,
prospects, profits, Properties, or condition (financial or otherwise)
or its ability to perform its obligations under any Transaction
Documents, or the installation, construction, testing, bringing into
commercial operation, conveyance, ownership, leasing, use,
possession, occupancy, operation, maintenance or financing of the
Site, the Project or the Black River Common Facilities or on the
perfection or priority of any of the Liens created pursuant to the
Transaction Documents;
<PAGE> -39-<PAGE>
(p) Financial Reports of the Corporation -- promptly after the
filing thereof with the SEC, a copy of each annual report on Form 10-
K, quarterly report on Form 10-Q and proxy statement of the
Corporation; and
(q) Requested Information -- with reasonable promptness, such
other data and information with respect to the SPV, the Project or
Lime as from time to time may be requested by any Holder.
Section 10.2 Officers' Certificates. Within 45 days after the end
of each of its first three fiscal quarters (but in no event sooner than the
delivery of the financial statements required for such fiscal quarter by
Section 10.1(a)) and within 90 days after the end of each fiscal year (but in
no event sooner than the delivery of the audited financial statements
required for such fiscal year by Section 10.1(b)), the SPV shall deliver to
each Holder a certificate of a Senior Financial Officer of the SPV, setting
forth:
(a) Event of Default -- a statement that the signers have
reviewed the relevant terms hereof and have made, or caused to be
made, under their supervision, a review of the transactions and
conditions of the SPV from the beginning of the accounting period
covered by the financial statements being delivered therewith to the
date of the certificate and that such review shall not have disclosed
the existence during such period of any condition or event that
constitutes a Default or an Event of Default or, if any such
condition or event existed or exists, specifying the nature and period
of existence thereof and what action the SPV shall have taken or
shall propose to take with respect thereto; and
(b) Financial Statements -- a statement that the signers have
reviewed the relevant financial statements and that such financial
statements have been prepared in conformity with GAAP and, in
conjunction with the notes thereto, give a true and fair view of the
financial condition of the SPV as at the end of such period and of the
results of their operations during such period.
Section 10.3 Accountants' Certificates. Each set of annual
financial statements delivered pursuant to Section 10.1(b) shall be
accompanied by a certificate of the accountants who report on such
financial statements, stating that they have reviewed this Agreement and
stating further, whether, in making their audit, such accountants have
become aware of any condition or event that then constitutes a Default or
an Event of Default, and, if such accountants are aware that any such
condition or event then exists, specifying the nature and period of
existence thereof.
Section 10.4 Annual Independent Engineer's Report. Promptly upon
the same becoming available, the SPV shall deliver to each Holder a report
of the Independent Engineer (which the SPV covenants to obtain at its own
cost and expense), dated a date not later than 90 days following the end of
each fiscal year of the SPV, stating that (a) the Independent Engineer has
read the provisions of the Transaction Documents relating to the
operation, maintenance, repair and improvement of the Project, and (b) on
the basis of an annual inspection of the Project, the maintenance and
repair logs and records with respect thereto and the Site, the Project and
the Black River Common Facilities completed within 30 days of the date of
such report, no knowledge was obtained by the Independent Engineer of any
event or circumstance
<PAGE> -40-<PAGE>
which constitutes a material failure to adhere to such provisions or, if
such knowledge was obtained, specifying the nature of any such event or
circumstance and any proposed remedial action.
Section 10.5 Annual Opinion of Counsel. The SPV shall, at its sole
cost and expense, within 90 days of the end of each fiscal year, furnish to
the Collateral Agent an opinion of counsel to the SPV (which counsel shall
be reasonably satisfactory to the Holders) identifying all filings,
recordings, refilings and rerecordings (including the filing of UCC
continuation statements), if any, necessary or advisable (as of the date of
such opinion or at any date in the twelve-month period following such date)
to establish, reestablish, perfect, preserve, protect and continue the
Liens of the Collateral Agent in and to the Collateral.
Section 10.6 Inspection. Upon not less than three(3) Business
Days' notice to the SPV, you, your authorized representatives and the
Independent Engineer shall have the right, subject to the SPV's reasonable
safety and security procedures, during normal business hours: (i) to
inspect the Project and the Site at such Person's sole cost and expense;
and (ii) to inspect the operating logs, books and records of the SPV relating
to the Project, and to make copies thereof and extracts therefrom (other
than copies of and extracts from proprietary data and information), and to
discuss the SPV's affairs, finances and accounts with its executive
officers and the SPV's independent public accountants (and, by this
provision, the SPV authorizes and directs the SPV's accountants to discuss
such matters with any such Person), all at such reasonable times and as
often as may be reasonably required; provided, however, that if a Default
or Event of Default shall have occurred and be continuing, the SPV shall be
responsible for the cost and expense incurred in respect of any such
inspection made by any such Person pursuant to this Section 10.6. Neither
the Collateral Agent nor you shall have any duty whatsoever to make any
inspection or inquiry referred to in this Section 10.6 and shall not incur
any liability or obligation by reason of not making such inspection or
inquiry. You shall keep confidential any information with respect of the
SPV or the Project which the SPV indicates in writing at the time such
information is supplied is to be treated confidentially in compliance with
Section 17.5 of this Agreement.
SECTION 11 CASUALTY; CONDEMNATION.
Section 11.1 Notice of Damage or Loss. If any part or portion of
the Site, the Project or the Black River Common Facilities suffers any Loss
Event, the SPV shall promptly, and in any case within 5 Business Days after
such event, so notify the Holders, the Independent Engineer and the
Collateral Agent.
Section 11.2 Repair. Upon the occurrence of any Loss Event
(other than a Total Loss), the SPV shall cause the affected Property to be
repaired or replaced to the condition required by Section 9.6 as soon as
practicable but in any event within 180 days from the date of the
occurrence of such Loss Event; provided, however, that if, within such 180-
day period the SPV shall have commenced the repair or replacement of such
Property and shall be diligently pursuing such repair or replacement, but is
unable to complete the same within such 180-day period (in which case the
SPV shall so notify the Holders and the Collateral Agent), then the time for
repair or replacement shall be extended for such longer period as shall be
determined by the Independent Engineer to be necessary to complete such
repair or replacement, provided further that if the SPV shall fail to repair
or replace the Project within such period (including any
<PAGE> -41-<PAGE>
extension thereof as provided above), such failure shall be deemed an
Event of Default hereunder.
Section 11.3 Application of Payments on Total Loss. Payments
received by the Collateral Agent or the SPV from any Governmental
Authority, insurer or other Person in respect of a Total Loss shall be paid
to the Disbursement Agent for deposit into the Windup Account.
Section 11.4 Application of Payments Relating to a Partial Loss.
Payments received by the Collateral Agent or by the SPV from any
Governmental Authority, insurer or other Person with respect to any
Partial Loss, shall be paid to the Disbursement Agent for deposit into the
Casualty Account.
SECTION 12 INSURANCE.
Section 12.1 Insurance by the SPV.
(a) The SPV shall procure at its own expense and maintain in
full force and effect at all times on and after the Initial Funding
Date and continuing throughout the term of this Agreement with
responsible insurance companies authorized to do business in the
Commonwealth of Kentucky with a Best Insurance Reports rating of "A-
" or better and a financial size category of "IX" or higher (and other
insurance companies acceptable to the Collateral Agent), with limits
and coverage provisions sufficient to satisfy the requirements set
forth in each of the Project Contracts, but in no event less than the
limits and coverage provisions set forth below:
(i) Workers' Compensation Insurance. At all times that
the SPV has employees, workers' compensation insurance as
required by applicable state laws including employer's liability
insurance with a $1,000,000 minimum limit per accident, the
policies with respect to which shall include Longshoremen's and
Harbor Workers' Compensation Act insurance.
(ii) General Liability Insurance. Liability insurance on
an occurrence basis against claims for personal injury
(including bodily injury and death) and property damage. Such
insurance shall provide coverage for products-completed
operations, blanket contractual, explosion, collapse and
underground coverage, broad form property damage, personal
injury insurance, and hostile fire liability with a $1,000,000
minimum limit per occurrence for combined bodily injury and
property damage, provided that policy aggregates, if any, shall
apply separately to claims occurring with respect to the
Project. A maximum self-insured retention or deductible of
$250,000 shall be allowed.
(iii) Automobile Liability Insurance. Automobile liability
insurance against claims for personal injury (including bodily
injury and death) and property damage covering all owned,
leased, non-owned and hired motor vehicles, including loading
and unloading, with a $1,000,000 minimum limit per occurrence
for combined bodily injury and property damage and containing
appropriate no-fault insurance provisions wherever applicable.
A maximum self-insured retention or deductible of $100,000
shall be allowed.
<PAGE> -42-<PAGE>
(iv) Excess Insurance. Excess liability insurance on an
occurrence basis covering claims in excess of the underlying
insurance described in the foregoing subsections (i), (ii) and
(iii), with a $19,000,000 minimum limit per occurrence, provided
that aggregate limits of liability, if any, shall apply separately
to claims occurring with respect to the Project. The amounts of
insurance required in the foregoing subsections (i), (ii), (iii) and
this subsection (iv) may be satisfied by the SPV purchasing
coverage in the amounts specified or by any combination
thereof, so long as the total amount of insurance procured
meets the requirements specified above.
(v) Builder's Risk (Property) Insurance. A builder's risk
or property insurance policy on an "all risk" basis, including
coverage against damage or loss caused by earth movement
(including but not limited to earthquake, landslide, subsidence
and volcanic eruption) and flood. Such insurance shall be on a
completed value form, with no periodic reporting requirements,
insuring the Construction Costs and providing coverage for (a)
insuring the buildings, structures, machinery, equipment
(including electrical equipment), facilities, fixtures, supplies,
fuel and other properties constituting a part of the Project, (b)
off-site storage with sub-limits sufficient to insure the full
replacement value of any property or equipment not stored at
the Project, (c) removal of debris with a sub-limit not less than
10 percent of the Construction Costs, (d) increased cost of
construction and loss to undamaged property as the result of
enforcement of building laws or ordinances with a sub-limit not
less than 20 percent of the Construction Costs, (e) extra
expenses in an amount not less than $2,000,000 and (f)
foundations and other property below the surface of the
ground. Such property damage insurance policy may also provide
coverage for property damage and business interruption
resulting from damage or loss to the Project or the Black River
Facility caused by earth movement (including, but not limited to,
earthquake, landslide, subsidence and volcanic eruption) and
flood. The deductible for all such insurance shall not exceed
$500,000 for earth movement and flood coverage and $50,000
for all other coverage. The policy is to insure electrical
transmission lines and equipment to the extent the SPV has an
insurable interest. The ocean/air transit policy (which may be
written separately) shall be on a "warehouse to warehouse"
basis. The builder's risk or property coverage shall not contain
an exclusion for freezing, mechanical breakdown, loss or damage
covered under any guaranty or warranty, or resultant damage
caused by faulty workmanship, design or materials. Coverage
required by this clause (v) shall remain in effect until replaced
by physical damage insurance as specified in Section 12.1(b)(i).
The earth movement and flood coverages may be insured with a
sub-limit not less than 80% of the "full insurable value" of the
Project plus 80% of the Operating Expense amount required by
Section 12.1(b)(ii) below, but in no case less than $50,000,000.
(vi) Delayed Opening Insurance. Delayed opening coverage
in an amount equal to 12 months projected continuing expenses
plus debt service of the SPV caused by damage or loss to any
property required to be covered by clause (v) above. The policy
providing such coverage shall have a deductible of not greater
than 10 days or, in the case of flood, a deductible of not
greater than
<PAGE> -43-<PAGE>
$500,000. Coverage shall remain in effect until replaced by
business interruption insurance as specified in Section
12.1(b)(ii).
As respects the foregoing clauses (v) and (vi), subrogation is
waived in favor of the SPV, the Collateral Agent, any Holder and
their respective officers, agents and employees. The policy(s)
are to be endorsed to provide either an agreed amount clause or
waiver of coinsurance and include as insured all contractors
and the SPV.
(b) After Substantial Completion. On or prior to the
Substantial Completion Date, the SPV shall procure at its own expense
and maintain in full force and effect, with responsible insurance
companies authorized to do business in the Commonwealth of Kentucky
with a Best Insurance Reports rating of "A-" or better and a financial
size category of "IX" or higher (and other insurance companies
acceptable to the Collateral Agent), with limits and coverage
provisions sufficient to satisfy the requirements set forth in each
of the Project Contracts, but in no event less than the limits and
coverage provisions set forth below:
(i) Physical Damage Insurance. Property damage
insurance on an "all risk" basis, including coverage against
damage or loss caused by earth movement (including but not
limited to earthquake, landslide, subsidence and volcanic
eruption) and flood and providing coverage for (1) the Project in
a minimum aggregate amount equal to the "full insurable value"
of the Project, (2) transit, including ocean marine coverage if
applicable, with sub-limits sufficient to insure the full
replacement value of all property or equipment removed from
the Project and insurance coverage while located off the
Project, (3) electrical transmission lines along with related
equipment including transformers, electric motors and
electrical equipment, to the extent the SPV has an insurable
interest, (4) foundations and other property below the surface
of the ground, (5) soft costs defined as attorneys' fees,
engineering and other consulting costs, and permit fees that
may be incurred due to damage to the premises in a minimum
amount of $1,000,000, and (6) extra expenses in an amount not
less than $2,000,000. Such property damage insurance policy
may also provide coverage for property damage and business
interruption resulting from damage or loss to the Project and
the Black River Facility caused by earth movement (including,
but not limited to, earthquake, landslide, subsidence and
volcanic eruption) and flood. For purposes of this Section
12(b)(i), "full insurable value" shall mean the full replacement
value of the Project, including any improvements, equipment,
fuel and supplies, without deduction for physical depreciation
and/or obsolescence. For all such insurance the deductible
shall not exceed $50,000, except for the earth movement and
flood coverage which shall have a deductible not exceeding
$500,000. Such insurance shall include an agreed amount
clause or waiver of coinsurance and provide for increased cost
of construction, debris removal, and loss to undamaged property
as the result of enforcement of building laws or ordinances
with sub-limits not less than 25% of the "full insurable value"
of the Project. The earth movement and flood coverages may be
insured with a sub-limit not less than 80% of the "full
insurable value" of the Project plus 80% of the Operating
Expense amount required by Section 12.1(b)(ii) below, but in no
case
<PAGE> -44-<PAGE>
less than $50,000,000. The amount of physical damage and
business interruption insurance with regard to impact damage
to the docks located on the Easement Parcel shall be no less
than $2,000,000.
(ii) Business Interruption Insurance. Business
interruption insurance covering continuing normal operating
expenses of the SPV including payroll and debt service
("Operating Expense") for a period of 12 months, arising from
damage or loss insured by Section 12.1(b)(i) above. The policy
providing such coverage shall have a maximum deductible of not
greater than 10 days or, in the case of flood, a deductible not
greater than $500,000. Such insurance shall also insure that
portion of fixed expenses and debt service not earned arising
from an insured loss or occurrence at the OPCO Gavin Power
Station and the underground property at the Black River
Facility for a period of four months. Such insurance shall
include either an agreed amount clause or waiver of
coinsurance.
(iii) Wharfingers Liability Insurance. Wharfingers
liability insurance covering liability arising out of the damage
to or destruction of barges and vessels owned by others and
the removal of wrecks with a $5,000,000 minimum limit per
occurrence.
(c) Endorsements. All policies of liability, physical damage and
business interruption insurance to be maintained by the SPV shall
provide for waivers of subrogation in favor of the Collateral Agent
and the Holders and their respective officers and employees (and
such other Persons as may be required by the Project Contracts). All
policies of liability insurance required to be maintained by the SPV
under this Section 12.1 shall be endorsed as follows:
(i) To provide a severability of interest or cross
liability clause;
(ii) That the insurance shall be primary and not excess
to or contributing with any insurance or self-insurance
maintained by the Collateral Agent or the Holders; and
(iii) To name the Collateral Agent and the Holders and
their respective officers and employees (and such other
Persons as may be required by the Project Contracts) as
additional insureds.
(d) Waiver of Subrogation. The SPV hereby waives any and
every claim for recovery from the Holders for any and all loss or
damage covered by any of the insurance policies to be maintained
under this Agreement to the extent that such loss or damage is
recovered under any such policy. Inasmuch as the foregoing waiver
will preclude the assignment of any such claim to the extent of such
recovery, by subrogation (or otherwise), to an insurance company (or
other Person), the SPV shall give written notice of the terms of such
waiver to each insurance company which has issued, or which may
issue in the future, any such policy of insurance (if such notice is
required by the insurance policy) and shall cause each such
insurance policy to be properly endorsed by the issuer thereof to, or
to otherwise contain one or more provisions that, prevent the
invalidation of the insurance coverage provided thereby by reason of
such waiver.
<PAGE> -45-<PAGE>
Section 12.2 Insurance By The Operator. The SPV shall cause the
Operator to procure at its own expense and to maintain in full force and
effect at all times that the Project is being operated, with responsible
insurance companies authorized to do business in the Commonwealth of
Kentucky with a Best Insurance Reports rating of "A-" or better and a
financial size category of "IX" or higher (except for other companies
acceptable to the Collateral Agent), with limits and coverage provisions
sufficient to satisfy the requirements set forth in each of the Project
Contracts, but in no event less than the limits and coverage provisions set
forth below; however, the requirements of this Section 12.2 can also be
satisfied by naming the Operator as an insured on the insurance policies
procured by the SPV pursuant to the provisions of Section 12.1.
(a) General Liability Insurance. Liability insurance on an
occurrence basis against claims for personal injury (including bodily
injury and death) and property damage. Such insurance shall provide
coverage for products-completed operations, blanket contractual,
explosion, collapse and underground coverage, broad form property
damage, personal injury insurance, and hostile fire liability with a
$1,000,000 minimum limit per occurrence for combined bodily injury and
property damage, provided that policy aggregates, if any, shall apply
separately to claims occurring with respect to the Project. A maximum
self-insured retention or deductible of $250,000 shall be allowed.
(b) Automobile Liability Insurance. Automobile liability
insurance against claims for personal injury (including bodily injury
and death) or property damage arising out of the use of all owned,
leased, non-owned and hired motor vehicles, including loading and
unloading, with a $1,000,000 minimum limit per occurrence for combined
bodily injury and property damage and containing appropriate no-
fault insurance provisions where applicable. A maximum self-insured
retention or deductible of $100,000 shall be allowed.
(c) Workers' Compensation Insurance. Workers' compensation
insurance as required by applicable state laws, including employer's
liability insurance for all employees of the Operator with a
$1,000,000 minimum limit per accident, the policies with respect to
which shall include Longshoremen's and Harborworkers' Compensation
Act insurance.
(d) Excess Insurance. Excess liability insurance on an
occurrence basis covering claims in excess of the underlying
insurance described in the foregoing subsections (a), (b) and (c), with
a $19,000,000 minimum limit per occurrence, provided that aggregate
limits of liability, if any, shall apply separately to claims occurring
with respect to the Project.
The amounts of insurance required in the foregoing subsections (a),
(b), (c) and this subsection (d) may be satisfied by the Operator
purchasing coverage in the amounts specified or by any combination
thereof, so long as the total amount of insurance meets the
requirements specified above.
(e) Endorsements. All policies of liability insurance to be
maintained by the Operator shall provide for waivers of subrogation
in favor of the SPV, the Collateral Agent, the Holders and their
respective officers and employees (and such other Persons as may be
required by the Project Contracts). These policies shall also be
endorsed as follows:
<PAGE> -46-<PAGE>
(i) To provide a severability of interests or cross
liability clause;
(ii) That the insurance shall be primary and not excess
to or contributing with any insurance or self-insurance
maintained by the SPV, the Collateral Agent or the Holders; and
(iii) To name the SPV, the Collateral Agent, the Holders
and their respective officers and agents (and such other
Persons as may be required by the Project Contracts) as
additional insureds.
Section 12.3 Amendment of Requirements. The Collateral Agent may
at any time amend the requirements and approved insurance companies of
this Section 12 due to (i) new information not known by the Collateral Agent
on the Initial Funding Date or (ii) changed circumstances after the Initial
Funding Date which in the reasonable judgment of the Collateral Agent
either renders such coverage materially inadequate or materially reduces
the financial ability of the approved insurance companies to pay claims.
Section 12.4 Application of Proceeds. All insurance proceeds
recovered by the Collateral Agent as aforesaid on account of a Loss Event
shall be applied pursuant to Sections 11.3 and 11.4 of this Agreement. If the
aggregate damage or loss to (i) the Black River Facility and (ii) the Project
caused by an event of earth movement and/or flood is in excess of the
collectible insurance available to the SPV, the proceeds of the property
damage insurance paid out in respect of such event of earth movement
and/or flood shall be allocated proportionately to the Owner (or its
assigns) and to the SPV in the amounts which reflect the percentage of the
total loss attributable to the Black River Facility and the Project,
respectively. If the insurance policies providing coverage for earth
movement and flood also insure facilities other than the Project and the
Black River Facility, then the proceeds of the collectible property damage
insurance paid out in the event of damage or loss due to earth movement or
flood shall be allocated to the Project and the Black River Facility up to
100% of their loss or damage before any proceeds are allocated to the other
insured facilities.
Section 12.5 Conditions.
(a) The SPV shall promptly notify the Collateral Agent of any
loss covered by any insurance maintained pursuant to Section 12.1 or
Section 12.2.
(b) All policies of insurance required to be maintained
pursuant to Sections 12.1(a)(v) and (vi), (b)(i) and (ii), shall
provide that the proceeds of such policies shall be payable to the
Collateral Agent pursuant to a standard first mortgage endorsement
substantially equivalent to the lender loss payable endorsement
438BFU, without contribution; provided that if the proceeds thereof
are less than $250,000, such proceeds shall be paid to the SPV. The
Collateral Agent shall have the right to join the SPV in adjusting any
loss in excess of $250,000. All policies (other than in respect to
liability or workers' compensation insurance) shall insure the
interests of the Holders regardless of any breach or violation by the
SPV of warranties, declarations or conditions contained in such
policies, any action or inaction of the SPV or others, or any
foreclosure relating to the Project or any change in ownership of all
or any portion of the Project. All policies, other than workers'
compensation, shall waive any right of subrogation of the insurers as
<PAGE> -47-<PAGE>
against the SPV, the Holders or the Operator, and shall waive any
right of the insurers to any set off or counterclaim or any other
deduction (the foregoing may be accomplished by the use of the lender
loss payable endorsement required above).
(c) All policies of insurance required to be maintained
pursuant to this Section 12 shall be endorsed so that if at any time
should they be cancelled, or coverage be reduced which affects the
interests of the Holders, such cancellation or reduction shall not be
effective as to the Holders for 60 days, except for non-payment of
premium which shall be for 10 days, after receipt by the Collateral
Agent of written notice from such insurer of such cancellation or
reduction.
Section 12.6 Evidence of Insurance. On the Initial Funding Date
and on an annual basis at least 10 days prior to each policy anniversary,
the SPV shall furnish the Collateral Agent with approved certification of
all required insurance. Such certification shall be executed by each
insurer or by an authorized representative of each insurer where it is not
practical for such insurer to execute the certificate itself. Such
certification shall identify underwriters, the type of insurance, the
insurance limits and the policy term and shall specifically list the special
provisions enumerated for such insurance required by this Section 12.
Upon request, the SPV will promptly furnish the Collateral Agent with copies
of all insurance policies, binders and cover notes or other evidence of
such insurance relating to the Project.
Section 12.7 Insurance Report. Concurrently with the furnishing
of the certification referred to in Section 12.6 and at least 10 days prior
to the expiration of any insurance policy required of the SPV, the SPV shall
furnish the Collateral Agent with a certificate signed by a Responsible
Officer of the SPV and by a Responsible Officer of the Insurance
Consultant stating that in the opinion of such Responsible Officer, the
insurance then carried or to be renewed is in accordance with the each
terms of this Section 12.
Section 12.8 Failure to Maintain Insurance. In the event the SPV
fails, or fails to cause the Operator, to take out or maintain the full
insurance coverage required by this Section 12, the Collateral Agent, upon
30 days' prior notice (unless the aforementioned insurance would lapse
within such period, in which event notice should be given as soon as
reasonably possible) to the SPV of any such failure, may (but shall not be
obligated to) take out the required policies of insurance and pay the
premiums on the same. All amounts so advanced in respect thereof by the
Collateral Agent shall become an additional obligation of the SPV to the
Collateral Agent, and the SPV shall forthwith pay such amounts to the
Collateral Agent, together with interest thereon at the Late Payment Rate
from the date so advanced.
Section 12.9 No Duty of the Collateral Agent to Verify. No
provision of this Section 12 or any other provision of this Agreement shall
impose on the Collateral Agent any duty or obligation to verify the
existence or adequacy of the insurance coverage maintained by the SPV,
nor shall the Collateral Agent be responsible for any representations or
warranties made by or on behalf of the SPV to any insurance company or
underwriter.
Section 12.10 Maintenance of Insurance. The SPV shall at all times
maintain the insurance coverage required under the terms of the Project
Contracts.
<PAGE> -48-<PAGE>
Section 12.11 Insurance after the Initial Funding Date. The SPV shall
procure not later than 20 days following the Initial Funding Date the
following required insurance coverages:
(a) $25,000,000 excess of $25,000,000 of physical damage and
business interruption coverage due to earth movement coverage as
required by Sections 12.1(a)(v), (a)(vi), (b)(i) and (b)(ii); and
(b) $18,000,000 excess of $32,000,000 of physical damage and
business interruption coverage due to flood as required by Sections
12.1(a)(v), (a)(vi), (b)(i) and (b)(ii).
SECTION 13 EVENTS OF DEFAULTS--REMEDIES.
Section 13.1 Nature of Events.
An "Event of Default" shall exist if any of the following occurs and is
continuing:
(a) Principal, Interest or Make-Whole Amount Payments -- the
SPV shall fail to make or cause to be made any payment of principal
of, or Make-Whole Amount, if any, on, any Note on or before the date
such payment is due or any payment of interest on any Notes on or
before five (5) Business Days after the date such payment becomes
due;
(b) Construction Covenant Defaults -- prior to the Final
Completion Date the SPV shall fail to comply with any of the
provisions of Sections 7.1, 7.2, 7.3, 7.4, 7.5, 7.7 or 7.9 hereof;
(c) Other Covenant Defaults -- if at any time the SPV shall fail
(i) to comply with any of the provisions of Sections 9.1, 9.4(b), 9.11,
9.13, 9.14, 9.15, 9.16, 9.18, 9.19, 9.21, 9.22, 9.23, 9.24 or 9.25 hereof,
Section 10.1(g) or Section 12 hereof or (ii) to comply with any other
provision of this Agreement or any other Transaction Document and
such failure shall continue for more than thirty (30) days; or, if at
any time Lime, as Owner under the MCFA, (i) shall fail to make any
Capacity Payment or Tolling Payment within 5 Business Days after the
date any such payment is due, (ii) shall default in the performance of
any of its obligations under Article 2 of the MCFA and such default
shall remain uncured for 10 days thereafter or (iii) shall violate
Section 2.8 of the MCFA;
(d) Warranties or Representations -- any warranty or
representation made by or on behalf of the SPV contained in this
Agreement, in any other Transaction Document, or in any certificate
furnished in compliance with or in reference to any of the foregoing,
or any warranty or representation made by Lime in any Transaction
Document shall have been false or misleading in any material respect
when made;
<PAGE> -49-<PAGE>
(e) Project Contracts --
(i) any party to a Project Contract shall fail to comply
with any provision thereof, and such failure shall continue for
more than thirty (30) days after such failure shall first become
known to any such party (whether or not such failure
constitutes a default under such Project Contract at the time
it first became known to such Party); or a default or event of
default (as therein defined) shall have occurred and be
continuing under any Project Contract and all applicable cure
periods related thereto shall have expired,
(ii) any material obligation of any party to any Project
Contract shall be unenforceable, or any party thereto shall
claim that any such obligation is unenforceable or shall refuse
to perform voluntarily any such obligation, or
(iii) any Project Contract shall be terminated for any
reason, or any party thereto shall claim that any such Project
Contract is terminated, other than in accordance with its terms
upon full performance of all obligations therein by the parties
thereto,
in each case where the effect of such occurrence could reasonably be
expected to have a material adverse effect upon the Project;
(f) Cessation of Construction -- prior to completion of the
Project, work on construction of the Project shall cease for a period
of thirty (30) consecutive days or more;
(g) Loss, Theft, Destruction -- any loss, theft, damage or
destruction of a material portion of the tangible Collateral which is
not covered by insurance;
(h) Governmental Approvals -- (i) any material Governmental
Approval shall be lost, terminated, revoked or otherwise not be in
effect, or shall suffer a materially adverse amendment, or (ii) any
proceeding or other action shall be commenced by any Person seeking
any termination, revocation, forfeiture or adverse amendment of any
Governmental Approval;
(i) Undischarged Final Judgments -- final judgment or judgments
for the payment of money aggregating in excess of Two Million Dollars
($2,000,000) is or are outstanding against the SPV or the Project and
any one of such judgments shall have been outstanding for more than
thirty (30) days from the date of its entry and shall not have been
discharged in full;
(j) Unenforceability of Liens -- any Lien granted to the
Collateral Agent pursuant to any of the Transaction Documents shall
become invalid, void, unenforceable or unperfected or shall cease to
have the priority it enjoyed on the Initial Funding Date (subject to
any inchoate liens for taxes not yet due and payable), or any Person
shall have commenced any proceeding or taken other action to render
any such Lien invalid, or to avoid any such Lien or to render any such
Lien unenforceable or unperfected or to challenge the priority of
such Lien;
<PAGE> -50-<PAGE>
(k) OPCO Agreement -- (i) the OPCO Agreement (or any material
portion thereof) shall be or become invalid, unenforceable or
ineffective in any material respect, or OPCO shall disaffirm,
repudiate or terminate in whole or in any material part its obligations
under the OPCO Agreement; or (ii) OPCO shall have given notice of an
OPCO Agreement default to the Collateral Agent pursuant to Section
4(a) of the OPCO Consent;
(l) SPV Security Agreement -- an "Event of Default" shall occur
under or within the meaning of the SPV Security Agreement;
(m) Project Mortgage -- an "Event of Default" shall occur
under or within the meaning of the Project Mortgage;
(n) Lime Agreements -- an "Event of Default" shall occur under
or within the meaning of the Lime Security Agreement or the Lime
Pledge Agreement;
(o) Partner Security Agreement -- an "Event of Default" shall
occur under or within the meaning of the Partner Security Agreement;
(p) Ground Lease -- the Ground Lease (or any material portion
thereof) shall be or become invalid, unenforceable or ineffective in
any material respect or Lime shall disaffirm, repudiate or terminate
in any material respect its obligations under the Ground Lease;
(q) Insolvency, Bankruptcy Proceedings -- the SPV shall
commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar Applicable Law now
or hereafter in effect, or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief
or the appointment of or taking of possession by any such official in
an involuntary case or other proceeding commenced against it, or
shall make a general assignment for the benefit of creditors, or shall
fail generally to pay its debts as they became due within the meaning
of the Bankruptcy Code or shall admit in writing its failure to pay its
debts as they become due or shall take any action to authorize any of
the foregoing; or any involuntary case or other proceeding shall be
commenced against the SPV seeking liquidation, reorganization or
other relief with respect to it or its debts under any bankruptcy,
insolvency or other similar Applicable Law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official or agency of it or any substantial
part of its property, and such involuntary case or other proceeding
shall remain uncontested for a period of 90 days or undismissed for a
period of 90 days;
(r) Dravo-Related Default -- a Dravo-Related Event of Default;
(s) Black River Facility -- Lime shall have abandoned the
Black River Facility (not including a sale thereof to an Acceptable
Transferee in accordance with Section 1.10(b) or Section 5.6(c) of the
MCFA), or the SPV shall have abandoned the Project, in each case, for
a period of 120 days;
<PAGE> -51-<PAGE>
(t) Black River Common Facility -- an event or condition
(unless due to Uncontrollable Forces) affecting the Black River
Common Facilities shall occur which shall have, or could reasonably be
expected to have, a material adverse effect on the operation of the
Project, and either (i) the operator of the Black River Processing
Complex shall not have commenced remedial action, within 60 days
after the occurrence of such event or condition, designed to cure
such event or condition in such manner as shall be necessary to
cause such adverse effect to cease to be material (or to cause such
expectation to cease to be reasonable) or (ii) such remedial action
shall not have been completed within 90 days after the occurrence of
such event or condition, if reasonably susceptible to cure within
such period, or, if not reasonably susceptible to cure within such
period, such operator shall not be diligently pursuing the steps
necessary to effect such cure; or
(u) Change of Control -- The Partners shall fail for any
reason to own one hundred percent (100%) of the general and limited
partnership interests in the SPV or Lime shall fail to own one
hundred percent (100%) of the capital stock of the SPV Limited
Partner, and one hundred percent (100%) of the Class A Common Stock
of SPV General Partner.
Section 13.2 Acceleration of Notes.
(a) Acceleration.
(i) If an Event of Default specified in clause (q) of
Section 13.1 shall exist, all of the Notes shall automatically
become immediately due and payable together with interest
accrued thereon and, to the extent permitted by law, the Make-
Whole Amount at such time with respect to the principal amount
of such Notes, without presentment, demand, protest or notice
of any kind, all of which are hereby expressly waived;
(ii) If an Event of Default (other than that specified in
clause (q) of Section 13.1) shall exist, the Required Holders then
outstanding may declare the entire principal of, all interest
accrued and Make-Whole Amount, if any, on, and all other
amounts due in respect of, all the Notes then outstanding to be,
and such Notes shall thereupon become, forthwith due and
payable, without any presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by
the SPV, and the SPV will forthwith pay to the Holders the
entire principal of, all interest accrued on, and all other
amounts due in respect of, such Notes and, to the extent
permitted by law, the Make-Whole Amount, if any, at such time
with respect to such principal amount of Notes.
(b) Valuable Rights. The SPV acknowledges and agrees that the
right of each Holder to maintain its investment in the Notes free
from repayment by the SPV (except as herein specifically provided
for) is a valuable right, and that the provision for payment of a
Make-Whole Amount by the SPV under certain circumstances if the
Notes are paid or prepaid, or are accelerated as a result of an Event
of Default, is intended to provide compensation for the deprivation
of such right under such circumstances.
<PAGE> -52-<PAGE>
(c) Expenses. If the SPV shall fail to pay when due any
principal of, or Make-Whole Amount or interest on, any Note, or shall
fail to comply with any other provision of this Agreement or any of
the other Financing Documents, the SPV shall pay to either or both of
the Collateral Agent or the Holders, to the extent permitted by law,
such further amounts as shall be sufficient to cover the costs and
expenses, including, but not limited to, reasonable attorneys' fees,
incurred by the Collateral Agent and such Holders in collecting any
sums due on the Notes or such obligations or in otherwise assessing,
analyzing, evaluating, protecting, asserting, defending or enforcing
any of the rights and remedies that are or may be available to the
Collateral Agent or any such Holder.
Section 13.3 Remedies.
If an Event of Default exists, without limitation of any other rights
and remedies which may be available to any Holder, the Required Holders
may, in accordance with the Collateral Agency Agreement, cause the
Collateral Agent to exercise any and all remedies available to it under the
SPV Security Agreement, the Project Mortgage or any of the other
Transaction Documents. Each Holder may take all steps necessary or
advisable to protect and enforce its rights hereunder, whether by action,
suit or proceeding at law or in equity, for the specific performance of any
covenant, condition or agreement contained herein, or in aid of the
execution of any power herein granted, or for the enforcement of any other
appropriate legal or equitable remedy or otherwise as such Holder shall
deem necessary or advisable.
No right or remedy hereunder shall be exclusive of any other right,
power or remedy, but shall be cumulative and in addition to any other right
or remedy hereunder or now or hereafter existing by law or in equity and
the exercise by a party hereto of any one or more of such rights, power or
remedies shall not preclude the simultaneous exercise of any or all of such
other rights, powers or remedies. Any failure to insist upon the strict
performance of any provision hereof or to exercise any option, right, power
or remedy contained herein shall not constitute a waiver or relinquishment
thereof for the future.
SECTION 14 INTERPRETATION OF THIS AGREEMENT
Section 14.1 Terms Defined.
As used in this Agreement, the capitalized terms shall have the
respective meanings set forth in Annex A to this Agreement and the rules
of usage set forth in said Annex A shall apply hereto.
Section 14.2 Directly or Indirectly. Where any provision in this
Agreement or the other Financing Documents prohibits a Person from taking
any action, such provision shall be applicable whether such action is taken
directly or indirectly by such Person.
Section 14.3 Governing Law; Consent to Jurisdiction.
(a) General. THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE
OF NEW YORK, INCLUDING SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW BUT EXCLUDING ALL OTHER CHOICE-OF-LAW AND
CONFLICTS-OF-LAW RULES.
<PAGE> -53-<PAGE>
(b) Consent to Jurisdiction. ANY SUIT, ACTION OR PROCEEDING,
WHETHER AT LAW OR IN EQUITY, RELATING IN ANY WAY TO THIS AGREEMENT
OR THE NOTES MAY BE BROUGHT AND ENFORCED IN THE COURTS OF THE
STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK; AND THE SPV IRREVOCABLY CONSENTS AND SUBMITS
TO THE JURISDICTION OF EACH SUCH COURT IN RESPECT OF ANY SUCH SUIT,
ACTION OR PROCEEDING. THE SPV FURTHER IRREVOCABLY CONSENTS TO
THE SERVICE OF PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY
THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, RETURN RECEIPT REQUESTED, TO THE SPV AT ITS
ADDRESS SET FORTH BELOW. THE FOREGOING SHALL NOT LIMIT THE RIGHT
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW
OR TO BRING ANY ACTION OR PROCEEDING, OR TO OBTAIN EXECUTION OF ANY
JUDGMENT, IN ANY OTHER JURISDICTION. THE SPV HEREBY IRREVOCABLY
WAIVES ANY OPTION OR OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE
TO THE LAYING OF VENUE OF ANY SUCH ACTION OR PROCEEDING ARISING
UNDER OR RELATING TO THIS AGREEMENT OR THE NOTES IN ANY COURT
LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK, AND HEREBY
FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT A COURT LOCATED IN THE
COUNTY OF NEW YORK, STATE OF NEW YORK IS NOT A CONVENIENT FORUM
FOR ANY SUCH ACTION OR PROCEEDING.
Section 14.4 Independent Construction. Each covenant contained
herein shall be construed (absent an express contrary provision
herein) as being independent of each other covenant contained
herein, and compliance with any one covenant shall not (absent such
an express contrary provision) be deemed to excuse compliance with
one or more other covenants.
Section 14.5 Certain Disclaimers by the Purchaser.
(a) This Agreement is made for the sole benefit of the SPV
and you (and your successors and permitted assigns), and no other
Person shall have any benefits, rights or remedies under or by virtue
of this Agreement. You shall not be liable (i) to any contractors,
subcontractors or any Persons providing labor or services or
supplying materials in respect of the Project or (ii) for or in respect
of any claims, debts or demands of any such contractors,
subcontractors or other Persons accruing against the SPV or Lime.
Neither the SPV nor Lime shall be deemed to be your agent for any
purpose. You shall not be deemed to be a partner or joint venturer
with or fiduciary of the SPV or Lime as a consequence of this
Agreement and the other Transaction Documents. You shall not be
deemed to be in privity of contract with any of the contractors
providing labor, services or materials to the Project. This Agreement
shall not be deemed to create any third-party beneficiary rights in
any Person not a party to this Agreement.
(b) You shall not have any liability, obligation or
responsibility whatsoever with respect to the construction of the
Project. Any inspections of construction of the Project to be made
pursuant to this Agreement are for the purpose of administering the
disbursement of the Note proceeds or determining the compliance with
the covenants and agreements contained herein; neither the SPV nor
Lime shall be entitled to rely upon the same with respect to the
quality, adequacy or suitability of the materials or
<PAGE> -54-<PAGE>
workmanship, conformity with the Plans and Specifications, state of
completion or otherwise. Lime, pursuant to the terms of the
Construction Management Agreement, shall be bound to make its own
inspections and determinations, on behalf of itself and the SPV, as to
the conformity of the construction of the Project with the Plans and
Specifications, and shall notify you promptly upon discovering any
non-conformance.
(c) By accepting or approving anything required to be done,
observed or performed pursuant to this Agreement or any other
Transaction Document, including any certificate or other submission
required pursuant hereto, you shall not be deemed to have warranted
or represented to any party as to the sufficiency, effectiveness or
legality of the same.
(d) You do not assume any duty to the SPV or Lime to select,
review, supervise, evaluate or inform as to the performance of any
Person in respect of the Project. You do not owe any duty of care to
protect the SPV or Lime in respect of negligent, faulty, inadequate or
defective building or construction.
SECTION 15 PAYMENT OF EXPENSES.
Section 15.1 Transaction Expenses. The SPV shall pay all of your
out-of-pocket expenses, disbursements and costs, incurred in connection
with the negotiation, preparation, execution and delivery of the
Transaction Documents and the consummation of the transactions provided
for therein, including, without limitation those set out in clauses (a)
through (f) below ("Transaction Expenses"):
(a) the fees and disbursements of Hebb & Gitlin, your special
counsel, Wyatt, Tarrant & Combs, your special local counsel, and
Richards, Layton & Finger, counsel to the Collateral Agent and the
Disbursement Agent;
(b) the fees and expenses of the Collateral Agent and the
Disbursement Agent;
(c) the fees and expenses of the Environmental Consultant;
(d) the fees and expenses of the Insurance Consultant;
(e) the fees and expenses of the Independent Engineer; and
(f) all recording fees and filing fees charges and expenses
and the fees and premiums in respect of title insurance.
Such payments shall be made on the Initial Funding Date and on the
Conversion Date.
Section 15.2 Continuing Expense Obligations.
(a) In the event that the transactions contemplated to occur on the
Initial Funding Date or the Conversion Date shall fail to occur, the SPV will,
or will cause Lime to, pay all Transaction Expenses; provided, however, that
if such failure is a result of a breach by any you hereunder you shall be
responsible for your own fees, expenses and disbursements.
<PAGE> -55-<PAGE>
(b) The SPV will pay, in addition to all payments due with respect to
the Notes (and subject to receipt of reasonably detailed statements), (i) the
reasonable ongoing fees, expenses, disbursements and costs (including
legal fees and expenses) of or incurred by the Collateral Agent, the
Disbursement Agent, the Insurance Consultant, the Environmental
Consultant, the Independent Engineer, the Title Company and the Holders
incurred pursuant to or in connection with the Transaction Documents
(including, without limitation, the fees and expenses of the Independent
Engineer attributable to its annual review of the operations and
maintenance of the Project), and (ii) all reasonable fees, expenses,
disbursements and costs (including legal fees and expenses) incurred by
the Collateral Agent, the Disbursement Agent, the Insurance Consultant,
the Environmental Consultant, the Independent Engineer, the Title Company,
and the Holders in connection with: (A) the entering into or giving or
withholding of any amendment, modification, supplement, approved, waiver or
consent with respect to any Transaction Document (or any agreement
document or instrument related thereto or entered into in connection
therewith), whether such amendment, modification, supplement, waiver or
consent shall become effective or not, and all recording and filing fees,
stamp taxes and other recording or filing taxes payable in connection with
the recordation or filing of any such amendments, modifications,
supplements, waivers and consents and in connection with any continuation
statements or other documents filed to maintain and protect the rights of
the parties under the Transaction Documents; (B) the exercise or evaluation
by any such Person of any remedy under any Transaction Document, (C) its
intervention or participation in, or institution of, any Federal or state
regulatory proceeding before any state or Federal administrative or
judicial tribunal, (1) at the request of the SPV, (2) at the direction of any
Governmental Authority in connection with the transactions contemplated
hereby or (3) when reasonably deemed by the Holders to be necessary, in
each case so long as such proceeding shall arise from any of the
transactions contemplated hereby; (D) any Loss Event; or (E) any
instructions from or under or any interpretations required in connection
with any of the Transaction Documents.
SECTION 16 REGISTRATION; SUBSTITUTION OF TERM NOTES.
Section 16.1 Registration of Notes.
The SPV shall maintain a register for the registration and transfer
of the Notes at its chief executive office set forth in Section 4.35. The
name and address of each Holder, the type of Note held, each transfer
thereof and the name and address of each transferee of one or more Notes
shall be registered in the register. The Person in whose name any Note
shall be registered shall be deemed and treated as the owner and holder
thereof for all purposes hereof, and the SPV shall not be affected by any
notice or knowledge to the contrary.
Section 16.2 Exchange of Notes.
Upon surrender of any Note at the office of the SPV, duly endorsed or
accompanied by a written instrument of transfer duly executed by the
registered holder of such Note or his attorney duly authorized in writing,
the SPV shall execute and deliver, at the SPV's expense (except as provided
below), new Notes in exchange therefor, in such denominations as may be
requested by the surrendering holder (but not less than Fifty Thousand
Dollars ($50,000), except as may be necessary to reflect any principal
amount not evenly divisible by Fifty Thousand Dollars ($50,000)), in an
aggregate principal amount equal to the unpaid principal amount of the
surrendered Note. Each such new Note shall be payable to such Person as
such holder may
<PAGE> -56-<PAGE>
request and shall be substantially in the form of the Note surrendered.
Each such new Note shall be dated and bear interest from the date to which
interest shall have been paid on the surrendered Note or dated the date of
the surrendered Note if no interest shall have been paid thereon. The SPV
may require payment of a sum sufficient to cover any stamp tax or
governmental charge imposed in respect of any such transfer of Notes.
Section 16.3 Replacement of Notes.
Upon receipt by the SPV of evidence reasonably satisfactory to it of
the ownership of and the loss, theft, destruction or mutilation of any Note
(which evidence shall be, in the case of an Institutional Investor, notice
from such Institutional Investor of such ownership and such loss, theft,
destruction or mutilation) and
(a) in the case of loss, theft or destruction, of
indemnity reasonably satisfactory to it (provided that if the
holder of such Note is an Institutional Investor, such holder's
own agreement of indemnity shall be deemed to be satisfactory),
or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
the SPV at its own expense shall execute and deliver, in lieu thereof, a new
Note, dated and bearing interest from the date to which interest shall have
been paid on such lost, stolen, destroyed or mutilated Note or dated the
date of such lost, stolen, destroyed or mutilated Note if no interest shall
have been paid thereon.
SECTION 17 MISCELLANEOUS.
Section 17.1 Communications. All notices, demands, declarations,
consents, directions, approvals, instructions, requests and other
communications required or permitted by the terms hereof or any other
Transaction Document shall be in writing and shall be given to any
Participant (i) in person or (ii) by means of telecopy or other wire
transmission, confirmed by same day mailing by registered or certified mail,
or same day dispatch by overnight courier, in each case to the telecopy
number and address provided in Annex B or to such other address as any
Participant shall from time to time designate in writing to the other parties
hereto in accordance with said Annex B. Any such communication shall
become effective as to any Participant upon of receipt thereof by such
Participant.
<PAGE> -57-<PAGE>
Section 17.2 General Indemnification. The SPV agrees (regardless
of whether (a) any of the transactions contemplated hereby are
consummated, (b) such Indemnitee shall also be indemnified as to such
Expense by any other Person (except to the extent the Indemnitee has
received payment from such other Person) or (c) such Expense arises or
accrues prior to the date of this Agreement), to defend, indemnify and make
whole each Indemnitee against, and to protect, save and keep harmless each
Indemnitee from, any and all Expenses that may be imposed on, incurred by
or asserted by any Person against, such Indemnitee, which Expenses are in
any way attributable or relating to or arising out of (i) the Project, the
Site, the MCFA, the Easement Agreement or any part thereof or interest
therein; (ii) any of the Transaction Documents (or any other agreement,
contract or instrument entered into in connection therewith or related
thereto) or any of the transactions contemplated thereby or the exercise
by any Indemnitee of remedies thereunder, and (iii) the construction,
financing, acquisition, ownership, possession, use, regulation, operation,
maintenance and condition of all or any part of or any interest in the Site,
the Project or the Black River Common Facilities or the imposition of any
Lien thereon, including, in each case, without limitation (and whether the
subject of litigation or not) (but without duplication of any Construction
Costs or liquidated damages which Lime is obligated to pay): (A) claims or
penalties arising from any product liability, negligence, statutory liability
or violation of Applicable Law or in tort (strict, absolute or otherwise), (B)
Environmental Claims or other loss of or damage to any property or the
environment (including, without limitation, all Expenses associated with
remediation, response, removal, corrective action, financial assurance,
natural resource damages and the protection of wildlife, aquatic species
and vegetation, and any relevant mitigative action required under
applicable Environmental Laws), or death or injury to any Person, (C) latent
or other defects, whether or not discoverable, (D) the breach by Lime or the
SPV of any representations or warranties, or the failure by Lime or the
SPV to perform or observe any covenants or agreements, under any
Transaction Document (or any other agreement, contract or instrument
entered into in connection therewith or related thereto); and (E) any claim
for patent, trademark or copyright infringement; provided, however, that
the foregoing indemnity shall not extend to any Expense imposed on,
incurred by or asserted against any Indemnitee to the extent the same (y)
constitutes an Expense which such Indemnitee is expressly liable for
payment of hereunder or under any other Transaction Document or (z)
relates to or arises the willful misconduct or gross negligence of such
Indemnitee or of its agents, officers, directors or employees.
If the SPV shall obtain knowledge of any Expense indemnified against
under this Section 17.2, it shall give prompt written notice thereof to the
appropriate Indemnitee or Indemnitees, and if any Indemnitee shall obtain
any such knowledge, such Indemnitee shall give prompt written notice
thereof to the SPV, but failure of any Indemnitee to give notice shall not
affect the obligations of the SPV in respect thereof. With respect to any
Expense that the SPV is requested by an Indemnitee to pay by reason of
this Section 17.2, such Indemnitee shall, if so requested by the SPV and
prior to any payment, submit such additional information to the SPV as the
SPV may reasonably request to substantiate the requested payment.
In case any action, suit or proceeding shall be brought against any
Indemnitee, such Indemnitee shall promptly notify the SPV of the
commencement thereof (but the failure to do so shall not relieve the SPV of
its obligation to indemnify such Indemnitee except to the extent that the
SPV is prejudiced as a result of such failure), and the SPV, so long as no
Default or Event of Default shall have then occurred and be continuing,
shall be entitled, at its expense, acting through counsel reasonably
acceptable to such Indemnitee, to participate in, and, to the extent
<PAGE> -58-<PAGE>
that the SPV desires (if the SPV has acknowledged in writing its obligations
hereunder to indemnify fully such Indemnitee with respect to all such
Expenses under this Section 17.2) to assume and control the defense
thereof; provided, however, that the SPV shall not be entitled to assume
and control the defense of any such action, suit or proceeding if and to the
extent that, in the reasonable discretion of such Indemnitee, (i) such
action, suit or proceeding involves the possible imposition of criminal
liability on such Indemnitee, (ii) such action, suit or proceeding involves a
reasonable likelihood of the imposition of civil liability on such Indemnitee
which the SPV is not obligated to indemnify hereunder, (iii) such Indemnitee
determines, in its reasonable discretion, that it may raise a defense or
defenses which is or are unavailable to the SPV or different from the
defenses available to the SPV in such action, suit or proceeding, (iv) such
control and assumption, in the reasonable discretion of such Indemnitee,
involves a conflict of interest between such Indemnitee and the SPV or any
other Indemnitee with respect to such action or proceeding, or (v) such
action, suit or proceeding entails a reasonable possibility of compromising
or jeopardizing a substantial interest of such Indemnitee; and in any such
event such Indemnitee may retain additional and separate counsel to
represent it or, at its option, assume the defense of such action and the
SPV will pay all of the Expenses of such Indemnitee in respect of such
defense, provided that if the SPV shall not elect in writing to assume the
defense thereof to the extent entitled to do so, an Indemnitee may, after
written notice to the SPV and after the SPV's failure to remedy promptly
the same, assume the defense thereof, including the employment of counsel,
in which case the SPV shall pay all of the Expenses of such Indemnitee
incurred in respect of such defense. An Indemnitee shall, in any case, be
entitled, at its expense, to participate in any action, suit or proceeding the
defense of which has been assumed by the SPV; provided however, that if
the SPV fails to employ counsel reasonably satisfactory to such Indemnitee
the fees and expenses of counsel to such Indemnitee shall be paid by the
SPV.
No Indemnitee shall enter into any settlement or other compromise
with respect to any Expense without the prior written consent of the SPV
(which consent shall not be unreasonably withheld or delayed) unless such
Indemnitee waives its right to be indemnified under this Section 17.2 with
respect to such Expense or an Event of Default shall have then occurred
and be continuing. In any action, suit or proceeding to which any Indemnitee
is a party, the SPV shall not enter into any settlement or other compromise
with respect to any Expense without the prior written consent of such
Indemnitee which consent shall not be unreasonably withheld or delayed.
Upon payment of any Expense by the SPV pursuant to this Section 17.2
to or on behalf of an Indemnitee, the SPV, without any further action, shall
be subrogated to any and all claims that such Indemnitee may have to
recover such Expense from any other Person (other than claims in respect
of insurance policies maintained by such Indemnitee at its own expense),
and such Indemnitee shall cooperate with the SPV and give such further
assurances as are reasonably necessary or advisable to enable the SPV to
pursue such claims; provided that the SPV's rights of subrogation shall be
subordinated to the full and complete payment of all principal, interest,
Make-Whole Amount and other amounts due with respect to the Notes.
Nothing in this Section 17.2 shall be construed as a guaranty by the
SPV of any residual or market value in the Project, the Project Land or of
the performance capability or operating capacity of the Project or as a
guaranty of any Notes.
<PAGE> -59-<PAGE>
Section 17.3 Increased Costs. If,
(i) the compliance by any Holder with any direction,
requirement or request after the date hereof from any Governmental
Authority, whether or not having the force of law, with which such
Holder must reasonably comply (including, without limitation the
National Association of Insurance Commissioners); or
(ii) the change in the interpretation or application of any law
or the enactment of any law after the date hereof imposing or
modifying any reserve requirement (including, without limitation, any
requirement of the National Association of Insurance Commissioners),
capital adequacy requirement or similar requirement with respect to
any class of assets or liabilities of, deposits with or for the account
of, or loans or investments by, any Holder (or with respect to any
change therein or in the amount thereof); or
(iii) the occurrence after the date hereof of any other
condition or circumstance (other than conditions or circumstances
relating only to such Holder and arising solely as a result of an
exercise of discretion by such Holder) with respect to this Agreement
and/or the maintenance by such Holder of its investment in the Notes,
shall (A) result in any increase in cost to any Holder in connection with or
arising out of any Note, (B) result in any reduction in the amount of any
payment receivable by any Holder hereunder or thereunder or (C) result in
any reduction of the rate of the return on any Holder's capital as a
consequence of its obligations hereunder below that which such Holder
could have achieved but for such circumstances, then, in each such case,
the SPV shall fully reimburse such Holder the amount of such increase in
cost, reduction in payment receivable or reduction in rate of return
promptly after written notification thereof to the SPV by such Holder,
which notification shall include such Holder's relevant calculations and all
relevant additional facts, assumptions and information that such Holder
customarily provides in like circumstances. The Holders shall (consistent
with their internal policies and legal and regulatory restrictions) use
their reasonable efforts to avoid such increased costs by giving the SPV
prompt notice thereof.
If at any time a Holder gives notice that any amount is due under this
Section 17.3, the SPV shall, for a thirty (30) day period following receipt of
such notice, have the right to prepay such Holder's Notes at par (without
any payment of the Make-Whole Amount).
Section 17.4 Restriction on Sale of Notes. So long as no Default
or Event of Default shall exist, no Holder shall sell any Note to (a) any
Person engaged in a business substantially similar to that of Lime on the
Initial Funding Date, or (b) any electric utility company.
Section 17.5 Disclosure to Other Persons. Each Holder shall use
its best efforts to hold in confidence and not to disclose any Confidential
Information, provided, that any Holder will be free, after notice to the SPV,
to correct any false or misleading information that may become public
concerning its relationship to the SPV or Lime or to the transactions
contemplated by this Agreement. Notwithstanding the foregoing, the SPV
acknowledges that any Holder may deliver copies of any financial
statements and other documents delivered to such Holder, and disclose any
other information disclosed to such Holder (including, without limitation,
Confidential Information), by or on behalf of the SPV in connection with or
pursuant to this Agreement, to
<PAGE> -60-<PAGE>
(a) such Holder's directors, officers, employees, agents and
professional consultants,
(b) any other Holder,
(c) any Institutional Investor to which such Holder sells or
offers to sell such Note or any part thereof, provided that such
Institutional Investor signs a written agreement to comply with the
confidentiality provisions of this Agreement, regardless of whether
or not such offeree purchases any Notes, and provided further that
no such agreement shall be required so long as such Institutional
Investor is furnished only with information that is not Confidential
Information,
(d) any Institutional Investor to which such Holder sells or
offers to sell a participation in all or any part of such Note,
provided that such Institutional Investor signs a written agreement
to comply with the confidentiality provisions of this Agreement,
regardless of whether or not such offeree purchases any Notes, and
provided further that no such agreement shall be required so long as
such Institution Investor is furnished only with information that is
not Confidential Information,
(e) any federal or state regulatory authority having
jurisdiction over such Holder,
(f) the National Association of Insurance Commissioners or
any similar organization or
(g) any other Person to which such delivery or disclosure may
be necessary,
(i) in compliance with any law, rule, regulation or order
applicable to such Holder,
(ii) in response to any subpoena or other legal process,
or
(iii) in connection with any litigation to which such
Holder is a party.
Section 17.6 Reproduction of Documents. This Agreement, each
other Transaction Document and all documents relating hereto or thereto,
including, without limitation,
(a) consents, waivers and modifications which may hereafter
be executed,
(b) documents received by you in connection with any Advance
(except the Notes themselves), and
(c) financial statements, certificates and other information
previously or hereafter furnished to you or any other holder of
Notes,
may be reproduced by you or any other Holder of Notes by any photographic,
photostatic, microfilm, micro-card, miniature photographic or other similar
process and each Holder may destroy any original document so reproduced.
The SPV agrees and stipulates that any such
<PAGE> -61-<PAGE>
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by such Holder in
the regular course of business) and that any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence.
Section 17.7 Payments on Notes; other Amounts.
(a) Manner of Payment. The SPV shall make each payment of
principal, interest, Make-Whole Amount and all other amounts due with
respect to each Note (without any presentment of such Notes and
without any notation of such payment being made thereon) by
crediting, by federal funds bank wire transfer, your account
designated on Annex 1 prior to noon New York City time on the date
such payment is due.
(b) Payments Due on Holidays. If any payment due on, or with
respect to, any Note shall fall due on a day other than a Business
Day, then such payment shall be made on the first Business Day
following the day on which such payment shall have so fallen due;
provided that if all or any portion of such payment shall consist of a
payment of interest, for purposes of calculating such interest, such
payment shall be deemed to have been originally due on such first
following Business Day, such interest shall accrue and be payable to
(but not including) the actual date of payment, and the amount of the
next succeeding interest payment shall be adjusted accordingly. If
any payment is to be made on the first Business Day following the day
on which the same shall have fallen due, as provided in this
paragraph, and is not so paid on such first Business Day, interest
shall accrue thereon (to the extent permitted by applicable law) with
respect to each Note at the rate provided in such Note on overdue
payments of principal from (in each case) the originally scheduled day
of its payment.
(c) Payments, When Received. Any payment to be made to any
Holders shall be deemed to have been made on the Business Day such
payment actually becomes available to such Holder at such Holder's
bank prior to noon (New York City time).
(d) Other Amounts. Any fees, expenses, costs and other
amounts due from the SPV to you pursuant to this Agreement or any
other Transaction Document which are not paid when due shall bear
interest thereafter at a rate per annum equal to the Late Payment
Rate.
Section 17.8 Survival. All warranties, representations,
certifications and covenants made by the SPV herein or in any certificate
or other instrument delivered by it or on its behalf under this Agreement
or any other Transaction Document shall be considered to have been relied
upon by you and shall survive the delivery to you of the Notes regardless
of any investigation made by you or on your behalf. All statements in any
such certificate or other instrument shall constitute warranties and
representations by the SPV hereunder.
Section 17.9 Successors and Assigns. The SPV may not assign any
of its interests, rights or obligations hereunder without your prior written
consent. This Agreement shall inure to the benefit of and be binding upon
the successors and permitted assigns of each of the parties hereto. The
provisions of this Agreement are intended to be for the benefit of all
Holders
<PAGE> -62-<PAGE>
and shall be enforceable by any such Holder, whether or not an express
assignment to such Holder of rights under this Agreement has been made by
you or your successor or assign.
Section 17.10 Amendments. The provisions of this Agreement may
not be waived, modified, amended, supplemented or terminated in any manner
whatsoever except by written instrument signed by each party against
which enforcement or applicability of the waiver, modification, amendment,
supplement or termination is sought.
Section 17.11 Section Headings, Table of Contents. The titles of
the Sections and the Table of Contents appear as a matter of convenience
only, do not constitute a part hereof and shall not affect the construction
hereof. The words "herein," "hereof," "hereunder" and "hereto" refer to
this Agreement as a whole and not to any particular Section or other
subdivision.
Section 17.12 Duplicate Originals; Execution in Counterpart. Two or
more duplicate originals of this Agreement may be signed by the parties,
each of which shall be an original but all of which together shall
constitute one and the same instrument. This Agreement may be executed in
one or more counterparts and will be effective when at least one
counterpart has been executed and delivered by each party hereto; and
each set of counterparts which, collectively, shows execution by all of the
parties hereto shall constitute one duplicate original.
Section 17.13 Jury Trial Waiver. NEITHER THE SPV NOR THE
PURCHASER (NOR ANY OF THEIR RESPECTIVE SUCCESSORS OR ASSIGNS) SHALL SEEK A
JURY TRIAL IN ANY ACTION BASED UPON OR ARISING OUT OF OR OTHERWISE RELATING TO
THIS AGREEMENT, ANY OF THE FINANCING DOCUMENTS, ANY COLLATERAL FOR THE
INDEBTEDNESS EVIDENCED BY THE NOTES, OR THEIR DEALINGS OR RELATIONSHIPS WITH
EACH OTHER, AND EACH OF THEM AGREE THAT NO SUCH ACTION WITH RESPECT TO WHICH A
JURY TRIAL HAS BEEN WAIVED SHALL BE SOUGHT TO BE CONSOLIDATED WITH ANY OTHER
ACTION IN WHICH A JURY TRIAL CANNOT OR HAS NOT BEEN WAIVED. THIS PARAGRAPH
HAS BEEN FULLY DISCUSSED BY THE SPV AND YOU, EACH OF WHOM HAVE BEEN
REPRESENTED BY COUNSEL, AND THIS PARAGRAPH SHALL NOT BE SUBJECT TO ANY
EXCEPTIONS.
[Remainder of page intentionally left blank; next page is signature page.]
<PAGE> -63-<PAGE>
If this Agreement is satisfactory to you, please so indicate by
signing the acceptance at the foot of a counterpart hereof and returning
such counterpart to the SPV, whereupon this Agreement will become binding
among us in accordance with its terms.
Very truly yours,
DRAVO BLACK RIVER LIMITED PARTNERSHIP
By DBR General Inc., its General Partner
By A. H. TENHUNDFELD, JR.
Name: A. H. Tenhundfeld, Jr.
Title: Vice President
Accepted:
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By SCOTT W. ISLEY
Name: Scott W. Isley
Title: Vice President
<PAGE> -64,65-
Annex A
to the Note Purchase Agreement
RULES OF USAGE AND DEFINITIONS
RELATING TO THE TRANSACTION DOCUMENTS
SECTION 1.01. Rules of Usage. The following rules of usage shall
apply to this Annex A and each of the Transaction Documents (and each
appendix, schedule, exhibit and annex to the foregoing) unless otherwise
required by the context:
(a) Except as otherwise expressly provided, any definitions
set forth herein or in any other document shall be equally applicable
to the singular and plural forms of the terms defined.
(b) Except as otherwise expressly provided, references in
any document to articles, sections, paragraphs, clauses, annexes,
appendices, schedules or exhibits are references to articles,
sections, paragraphs, clauses, annexes, appendices, schedules or
exhibits in or to such document.
(c) The headings, subheadings and table of contents used in
any document are solely for convenience of reference and shall not
constitute a part of any such document nor shall they affect the
meaning, construction or effect of any provisions thereof.
(d) References to any Person shall include such Person, its
successors and permitted assigns and transferees.
(e) Except as otherwise expressly provided, references to
any Applicable Law include any amendment or modification to such
Applicable Law and any rules or regulations issued and promulgated
thereunder and any Applicable Law enacted in substitution or
replacement therefor.
(f) When used in any document, words such as "hereunder,"
"hereto," "hereof," and "herein" and other words of like import shall,
unless the context clearly indicates to the contrary, refer to the
whole of the applicable document and not to any particular article,
section, subsection, paragraph or clause thereof.
(g) Notwithstanding the fact that some (but not all)
references to "including" are expressly indicated as being "including,
without limitation," reference to "including" means including without
limiting the generality of any description preceding such term and
for purposes hereof the rule of ejusdem generis shall not be
applicable to limit a general statement, followed by or referable to an
enumeration of specific matters, to matters similar to those
specifically mentioned.
(h) Each of the parties to the Transaction Documents and
their counsel have reviewed and revised, or requested revisions to,
the Transaction Documents, and the usual rule of construction that
any ambiguities are to be resolved against the drafting party shall
be inapplicable in the construing and interpretation of the
Transaction Documents.
<PAGE> -1-<PAGE>
(i) Except as otherwise expressly provided, reference to any
agreement, instrument or document means such agreement as amended,
modified or supplemented from time to time in accordance with the
provisions thereof and the provisions of the Transaction Documents.
SECTION 1.02. Definitions. As used in this Annex A and the
Transaction Documents, the following terms shall have the respective
meanings set forth below:
"Acceleration" shall mean a declaration (or deemed declaration)
pursuant to Section 13.2 of the Note Purchase Agreement that the Notes
then outstanding are immediately due and payable.
"Acceptable Transferee" shall have the meaning ascribed thereto in
Section 1.11(b)(iv) of the MCFA.
"Accounts" shall mean each of the Construction Account, Project
Revenue Account, the Additional Reserve, the Default Reserve, the Debt
Service Reserve, the Casualty Account, the Construction Completion
Account and the Windup Account.
"Accredited Investor" shall have the meaning ascribed thereto in
Regulation D under the Securities Act.
"Additional Reserve" shall mean the account entitled "Black River
Expansion Additional Reserve Account" maintained by the SPV with the
Disbursement Agent pursuant to Section 2.4 of the Deposit and
Disbursement Agreement.
"Advance" shall have the meaning ascribed thereto in Section 1.2 of
the Note Purchase Agreement.
"Affiliate" shall mean, in respect of any Person at any time, another
Person
(a) that directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common
control with, such Person,
(b) that beneficially owns or holds five percent (5%) or more
of any class of the Voting Stock or equity interests of such Person,
or
(c) five percent (5%) or more of the Voting Stock (or in the
case of a Person that is not a corporation, five percent (5%) or more
of the equity interest) of which is beneficially owned or held by such
Person.
For the purposes of this definition of "Affiliate," (i) a partnership, its
general partners and limited partners are Affiliates of each other; and (ii)
"control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or
otherwise.
"Agreement, this" shall mean the Note Purchase Agreement.
<PAGE> -2-<PAGE>
"Applicable Law" shall mean all applicable Governmental Approvals,
Environmental Laws, laws, statutes, treaties, rules, codes, ordinances,
regulations, certificates, orders, interpretations, licenses and permits of
any Governmental Authority and judgments, decrees, injunctions, writs,
orders or like action of any court, arbitrator or other administrative,
judicial or quasi-judicial tribunal or agency of competent jurisdiction.
"Approved Draw Request" shall mean a Draw Request which has been
approved by the Independent Engineer and the Lender.
"Assigned Documents" shall mean, collectively, the Construction
Contracts, the OPCO Agreement, the Transportation Agreement and any other
Project Contracts or other material contract or agreement that may from
time to time be assigned by Lime to the SPV and assumed by the SPV as
contemplated by the Transaction Documents.
"Assigned Governmental Approvals" shall mean the Governmental
Approvals listed in Annex 4 to the Note Purchase Agreement (other than
those identified therein as not assigned), and any other Governmental
Approval that may from time to time be assigned by Lime to the SPV pursuant
to Section 9.20 of the Note Purchase Agreement.
"Assigned Lime Contract Collateral" shall mean all accounts receivable
arising from, and all general intangibles comprising, Assigned Lime
Contracts.
"Assigned Lime Contracts" shall mean all Compatible Lime Supply
Agreements of a type that would be subject to a Lien in favor of one or
more of the Existing Creditors' Agent and the Existing Creditors under the
Existing Creditors Security Documents as such Existing Creditors Security
Documents are in effect on August 1, 1994.
"Bankruptcy" shall mean, with respect to any Person:
(a) the commencement of any proceeding against such Person
seeking reorganization, arrangements, composition, readjustment,
liquidation, dissolution, or similar relief under any Federal or state
bankruptcy or insolvency law or other similar law which proceeding is
not dismissed within 90 days, or the appointment without the Person's
consent of a trustee, receiver or liquidator of such Person or of all
or a substantial part of such Person's Property, which appointment is
not vacated within 90 days after it is made;
(b) the filing by such Person of a petition, answer or consent
seeking relief under any Federal or state bankruptcy or insolvency
law or other similar law, or the seeking or consent of such Person to
the institution of proceedings thereunder or to the filing of any
such petition or to the appointment or taking possession of a
receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of such Person or of any substantial part of
its Property or the filing of an answer or other pleading admitting or
failing to contest the material allegations of a petition filed against
it or described in this clause;
(c) the making by such Person of a general assignment for the
benefit of creditors; or
<PAGE> -3-<PAGE>
(d) the taking of corporate or partnership action by such
Person in furtherance of any of the foregoing actions.
"Bankruptcy Code" shall mean the Bankruptcy Reform Act of 1978, as
amended, as the same may be further amended, and any other Applicable Law
with respect to bankruptcy, insolvency or reorganization that is successor
thereto.
"Basic" shall mean Dravo Basic Materials Company, Inc., an Alabama
corporation.
"Black River Common Facilities" shall have the meaning ascribed
thereto in the Easement Agreement.
"Black River Facility" shall mean the limestone mines and lime
processing and production facilities of Lime at or adjacent to the Project
Land (other than the Project).
"Business Day" shall mean a day other than a Saturday, a Sunday or a
day on which banks are required by law (other than a general banking
moratorium or holiday for a period exceeding four (4) consecutive days) to
be closed in the State of New York or the State of Delaware.
"Cancellation Fee" shall have the meaning ascribed thereto in Section
1.7(c) of the Note Purchase Agreement.
"Capacity Payment" shall have the meaning ascribed thereto in Section
3.2(b)(i) of the MCFA.
"Casualty" shall mean (i) any destruction, loss or damage of or to the
Project, the Black River Common Facilities or any building, structure or
other improvement situated on the Site, (ii) any cessation or material
impairment of the operation of the Project, the Black River Common
Facilities or any component thereof as a result of damage to the Project,
the Black River Common Facilities or the Site, (iii) any theft, vandalism or
other criminal mischief affecting all or any portion of the Project, the
Black River Common Facilities or any building, structure or other
improvement situated on the Site, or (iv) any other occurrence that results
in an insurance payment or settlement with respect to the Project, the
Black River Common Facilities or any building, structure or other
improvement situated on the Site, as the case may be.
"Casualty Account" shall mean the account entitled "Black River
Expansion Casualty Account" maintained by the SPV with the Disbursement
Agent pursuant to Section 2.6 of the Deposit and Disbursement Agreement.
"Class B Common Stock" shall mean the share of Class B Common Stock,
$1.00 par value, of the General Partner issued to the Purchaser pursuant
to the Subscription Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, or any successor Federal statute.
"Collateral" shall mean, collectively, the SPV Collateral, the Lime
Collateral and the Partner Collateral.
<PAGE> -4-<PAGE>
"Collateral Agency Agreement" shall mean the Collateral Agency
Agreement, dated as of August 1, 1994, by and among Wilmington Trust
Company, as the Collateral Agent, Prudential, the SPV, the SPV General
Partner and the SPV Limited Partner.
"Collateral Agent" shall mean Wilmington Trust Company, a Delaware
corporation, not in its individual capacity but solely as Collateral Agent
pursuant to the Collateral Agency Agreement.
"Commitment Amount" shall have the meaning ascribed thereto in Section
1.1(a) of the Note Purchase Agreement.
"Compatible Lime Supply Agreements" shall mean, at any time, lime supply
agreements for non-metallurgical lime contracted by Lime for the Maysville
Facility or the Black River Facility that are or could have been serviced by
the Project at such time in compliance with the technical requirements
relating to the chemical composition of processed lime set forth in such
agreements.
"Confidential Information" shall mean any information furnished to
any Holder by the SPV or Lime in connection with any Transaction Document
or obtained by any Holder in connection with an inspection made pursuant to
any Transaction Document, and that is marked by the SPV or Lime as being
confidential, other than such information,
(i) that was publicly known, or otherwise known to such
Holder, at the time the information was furnished to such
Holder,
(ii) that subsequently becomes publicly known through
no act or omission by such Holder, or
(iii) that otherwise becomes known to such Holder other
than through disclosure by the SPV or Lime.
"Construction Account" shall mean the "Black River Expansion
Construction Account" maintained by the SPV with the Disbursement Agent
pursuant to Section 2.1 of the Deposit and Disbursement Agreement.
"Construction Agreement" shall mean the Agreement, dated as of August
27, 1993, as amended, by and between KVS and Lime, providing for the
construction of the Project Kilns.
"Construction Budget" shall mean the budget prepared by Lime as of the
Initial Funding Date setting forth Construction Costs in form and
substance satisfactory to Prudential.
"Construction Completion Account" shall mean the account entitled
"Black River Expansion Construction Completion Account" maintained by the
SPV with the Disbursement Agent pursuant to Section 2.7 of the Deposit and
Disbursement Agreement.
"Construction Contracts" shall mean those contracts for the
construction of various portions of the Project, including, without
limitation, the Construction Agreement.
<PAGE> -5-<PAGE>
"Construction Costs" shall mean the costs incurred in connection with
the development, financing and construction of the Project, including,
without limitation, engineering, procurement, equipment, labor, construction
and construction management costs relating to the Project, and amounts for
insurance, accrued interest on amounts outstanding under the Construction
Notes, fees required by Section 2.11 of the Construction Management
Agreement, Transaction Expenses, and other fees, costs and expenses
payable to Prudential or to the Collateral Agent under the Note Purchase
Agreement or any other Transaction Document on or prior to the Conversion
Date and amounts advanced to the Construction Completion Account to
finance Punch List Items. Construction Costs shall not include Contingency
Costs except to the extent that payment of the same has been approved or
is permitted by Section 1.8 of the Note Purchase Agreement and Section 2.2
of the Construction Management Agreement.
"Construction Exit Fee" shall have the meaning ascribed thereto in
Section 1.6(c) of Note Purchase Agreement.
"Construction Management Agreement" shall mean the Construction
Management Agreement, dated as of August 1, 1994, by and between the SPV
and Lime.
"Construction Manager" shall mean Lime and any successor or permitted
assign under the Construction Management Agreement.
"Construction Notes" shall have the meaning ascribed thereto in
Section 1.1(a) of the Note Purchase Agreement.
"Construction Note Maturity Date" shall have the meaning ascribed
thereto in Section 1.5(b) of the Note Purchase Agreement.
"Construction Option Amount" shall have the meaning ascribed thereto
in Section 1.6(c) of the Note Purchase Agreement.
"Construction Option Amount Prepayment Date" shall have the meaning
ascribed thereto in Section 1.6(c) of the Note Purchase Agreement.
"Construction Period" shall mean the period of time from the Initial
Funding Date up to, but not including, the Conversion Date.
"Construction Schedule" shall mean a time schedule for the
construction of the Project acceptable to Prudential under which the
Project shall have reached significant Project milestones and Substantial
Completion not later than the Construction Note Maturity Date.
"Construction Servicing Fee" shall have the meaning ascribed thereto
in Section 1.7(d) of the Note Purchase Agreement.
"Contingency Costs" shall mean, collectively, (a) for any item or
category identified in the Construction Budget, an amount equal to the
excess, if any, of (i) the actual cost of such item or category to the
Construction Manager over (ii) the cost of such item or category set forth
in the Construction Budget and (b) for any cost incurred by or on behalf of
the Construction Manager which is not accounted for in the Construction
Budget, the actual amount of such cost.
<PAGE> -6-<PAGE>
"Contractor" shall mean KVS or any successor thereto.
"Contract Year" shall mean the 12-month period commencing at 12:00 a.m.
on January 1 of each year and ending at 11:59 p.m. on the following December
31, except that the first Contract Year shall begin on the Operation
Commencement Date and the last Contract Year shall end on the Ground
Lease Expiration Date.
"Controversy" shall have the meaning ascribed thereto in Section 5.2
of the MCFA.
"Conversion Date" shall mean the date on which all of the conditions
set forth in Section 8 of the Note Purchase Agreement have been satisfied
or waived.
"Corporation" shall mean Dravo Corporation, a Pennsylvania
corporation.
"Debt" of any Person shall mean, at any date, without duplication, (i)
indebtedness for borrowed money or under interest rate and/or currency
hedge or swap agreement or for the deferred purchase price of Property or
services and any other item that would be included in determining total
balance sheet liabilities of such Person in accordance with GAAP (excluding
obligations under agreements for the purchase of goods and services in
the ordinary course of business and which are paid in the ordinary course
of business, but including obligations under agreements relating to the
issuance of performance letters of credit or acceptance financing), (ii)
obligations of such Person as lessee under leases which shall have been or
should be, in accordance with GAAP, recorded as capital leases, (iii) all
obligations of such Person secured by a Lien on any Property or assets
owned or held by such Person, regardless of whether such Debt is assumed
by such Person, (iv) dividends or distributions payable by such Person on or
in connection with a preferred stock, and (v) obligations of such Person
(including lease, dividend, distribution and other obligations) under direct
or indirect guaranties in respect of, and obligations (contingent or
otherwise) to purchase or otherwise acquire, or otherwise provide funds
for the payment or discharge of, or to assure a creditor against loss in
respect of, indebtedness or obligations of others of the kinds referred to
in clause (i), (ii), (iii) or (iv) above, or to maintain the solvency or any
balance sheet or other financial condition of the obligor of such
indebtedness, or to make payment for any products, materials or supplies or
for any transportation or services of such Person regardless of the
delivery or nondelivery or nonfurnishing thereof, in any such case if the
purpose or intent of such agreement is to provide assurance that such
indebtedness, lease, dividend, distribution or obligation will be paid or
discharged, or that the holders of such indebtedness, lease, dividend,
distribution or obligation will be protected against loss in respect thereof.
"Debt Payment Date" shall mean (a) prior to the Conversion Date, the
final day of each month beginning August 31, 1994, (b) the Conversion Date,
(c) subsequent to the Conversion Date, each February 1 and August 1, and (d)
the Term Note Maturity Date.
"Debt Placement Memorandum" shall mean the Debt Placement Memorandum
dated July, 1993, prepared by Continental Bank Lease Capital Group in
respect of the Project.
"Debt Service" shall mean, for any period, the aggregate amount of all
installments of principal and interest due with respect to the Notes for
such period, as set forth on Schedule II
<PAGE> -7-<PAGE>
to the Deposit and Disbursement Agreement, as said Schedule may be
amended, from time to time.
"Debt Service Payment" shall mean, in respect of any Debt Payment
Date, the aggregate amount of principal and interest due on the Term Notes
on such date, as set forth in Schedule II to the Deposit and Disbursement
Agreement, as said Schedule may be amended, from time to time.
"Debt Service Reserve" shall mean the account entitled "Black River
Expansion Debt Service Reserve" maintained by the SPV with the
Disbursement Agent pursuant to Section 2.3 of the Deposit and
Disbursement Agreement.
"Debt Service Shortfall" shall have the meaning ascribed thereto in
Section 2.3(b)(ii) of the Deposit and Disbursement Agreement.
"Deemed Cash Flow" shall mean, with respect to a specified number of
tons of processed lime purchased (or deemed purchased) by OPCO pursuant
to the OPCO Agreement or by the purchaser pursuant to any Economically
Similar Contract, the cash flow generated (or deemed generated) by such
purchase (or deemed purchase) as determined by reference to Schedule 5 to
the MCFA.
"Default" shall mean, with respect to any Transaction Document, an
event or condition the occurrence of which, with the giving of notice, the
passage of time or both, would constitute an "Event of Default" within the
meaning of such Transaction Document.
"Default Reserve" shall mean the account entitled "Black River
Expansion Default Reserve Account" maintained by the SPV with the
Disbursement Agent pursuant to Section 2.5 of the Deposit and
Disbursement Agreement.
"Deposit and Disbursement Agreement" shall mean the Deposit and
Disbursement Agreement, dated as of August 1, 1994, by and among the SPV,
the Collateral Agent and the Disbursement Agent.
"Disbursement Agent" shall mean Wilmington Trust Company, a Delaware
corporation, not in its individual capacity but solely as Disbursement Agent
pursuant to the Deposit and Disbursement Agreement.
"Dravo Parties" shall mean collectively each of the Corporation, Lime
and Basic together with their successors and permitted assigns.
"Dravo-Related Event of Default" or "Dravo-Related Default" shall mean
any of the following events (whatever the reason for such event and
whether it shall be voluntary or involuntary, or come about or be effected
by operation of law or be pursuant to or in compliance with Applicable Law):
(i) Lime shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other similar
Applicable Law now or hereafter in effect, or
<PAGE> -8-<PAGE>
seeking the appointment of a trustee, receiver, liquidator, custodian
or other similar official of it or any substantial part of its
property, or shall consent to any such relief or the appointment of or
taking of possession by any such official in an involuntary case or
other proceeding commenced against it, or shall make a general
assignment for the benefit of creditors, or shall fail generally to
pay its debts as they became due within the meaning of the
Bankruptcy Code or shall admit in writing its failure to pay its debts
as they become due or shall take any action to authorize any of the
foregoing; or any involuntary case or other proceeding shall be
commenced against Lime seeking liquidation, reorganization or other
relief with respect to it or its debts under any bankruptcy,
insolvency or other similar Applicable Law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official or agency of it or any substantial
part of its property, and such involuntary case or other proceeding
shall remain uncontested for a period of 90 days or undismissed for a
period of 90 days; or
(ii)(a)Any one or more of the Dravo Parties shall default in the
payment when due of any amount in respect of any Debt owing to or for
the benefit of the Existing Creditors in excess of $2,000,000, and
such default shall continue beyond the applicable grace period, if
any, specified in the note, agreement, lease or other instrument
relating to such Debt, or (b) any other event shall occur under any
note, agreement, lease or other instrument by which any such Debt is
evidenced or under which any such Debt is created which, in either of
the events specified in the foregoing clauses (a) or (b) causes such
Debt to become due prior to its stated maturity or payment date, and
such event shall not be (x) cured within the applicable grace period, if
any, specified in such note, agreement, lease or other instrument or
(y) rescinded or stayed by the Existing Creditors within 60 days of
such acceleration.
"Draw Request" shall mean a written request by the SPV for Advances
under the Note Purchase Agreement, which shall (i) be substantially in the
form of Exhibit B of the Note Purchase Agreement and (ii) meet all of the
requirements of the Note Purchase Agreement, including, without limitation,
Section 1.3 thereof.
"Easement Agreement" shall mean the Easement Agreement, dated as of
August 1, 1994, by and between Lime and the SPV.
"Easement Parcel" shall have the meaning ascribed thereto in the
second recital of the Easement Agreement.
"EC Lime Pledge Agreement" shall mean the Stock Pledge Agreement,
dated as of August 1, 1994, by Lime in favor of the Existing Creditors'
Agent, as it may be amended, modified or supplemented from time to time in
accordance with its terms.
"EC Partner Pledge Agreement" shall mean the Partner Pledge
Agreement, dated as of August 1, 1994, by the SPV General Partner and the
SPV Limited Partner in favor of the Existing Creditors' Collateral Agent, as
it may be amended, modified or supplemented from time to time in accordance
with its terms.
<PAGE> -9-<PAGE>
"Economically Similar Contracts" shall mean, simultaneously with the
acceptance of the Holders as provided in clause (ii) below, one or more lime
supply agreements (excluding any renewals or extensions of an Assigned
Lime Contract which Assigned Lime Contract was in existence on the date of
termination of the OPCO Agreement referred to below) entered into by the
SPV (or assigned to the SPV by Lime with the consent of the Existing
Creditors) after the date upon which the OPCO Agreement has been
terminated in whole or in material part, which agreement or agreements (i) in
the sole discretion of the Holders, contain provisions regarding purchase
quantities, pricing and quality standards, and other material terms, which
when taken as a whole are at least as favorable to the SPV as the
corresponding provisions and terms under the terminated provisions of the
OPCO Agreement, and (ii) have been accepted in writing by the Holders as a
substitute for the terminated provisions of the OPCO Agreement to the
extent terminated.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, proceedings, executory decrees,
judgments, demands, demand letters, orders, directives, claims (including
claims involving liabilities in tort), Liens, notices of noncompliance or
violation, or investigations relating to any Environmental Law or
Governmental Approval issued under any such Environmental Law or arising
from the presence or release into the environment of Hazardous Materials,
including Expenses claimed or asserted by any Governmental Authority or by
any third party for enforcement, cleanup, removal, response, remedial or
other actions, or for damages, contribution, indemnification, cost recovery,
compensation or injunctive relief pursuant to any Environmental Law.
"Environmental Consultant" shall mean John T. Boyd Company on or prior
to the Initial Funding Date, and thereafter John T. Boyd Company or such
other engineering firm which shall be selected by the SPV and reasonably
satisfactory to the Required Holder and the Collateral Agent.
"Environmental Laws" shall mean all Federal, state and local laws,
statutes, ordinances, regulations, criteria, guidelines and rules of common
law now or hereafter in effect, and in each case as amended, and any
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment relating to the regulation
and protection of human health, safety, the environment and natural
resources (including without limitation ambient air, surface water,
groundwater, wetlands, land surface or subsurface strata, and wildlife,
aquatic species and vegetation), including without limitation, laws and
regulations relating to emissions, discharges, releases or threatened
releases of Hazardous Materials or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials.
"EPA" shall mean the United States Environmental Protection Agency,
or any successor agency, body or entity.
"Equity Collateral" shall mean the issued and outstanding capital
stock of the Partners other than the Class B Common Stock of the SPV
General Partner.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
<PAGE> -10-<PAGE>
"ERISA Affiliate" shall mean any corporation or trade or business
that (i) is a member of the same controlled group of corporations (within the
meaning of Section 414(b) of the Code) as the Corporation, Lime, the SPV, the
SPV General Partner or the SPV Limited Partner or (ii) is under common
control (within the meaning of Section 414(c) of the Code) with the
Corporation, Lime, the SPV, the SPV General Partner or the SPV Limited
Partner.
"Event of Default" shall have the meaning ascribed thereto in Section
13.1 of the Note Purchase Agreement.
"Existing Creditors" shall have the meaning ascribed thereto in the
preamble to the Intercreditor Agreement.
"Existing Creditors' Agent" shall have the meaning ascribed thereto
in the preamble to the Intercreditor Agreement.
"Existing Creditors Loan Documents" shall mean the Override Agreement
and the Existing Creditors Credit Agreement, the Dravo Parties Note
Agreement, the Basic Note Agreement and the other Operative Documents (in
each case, as defined in the Intercreditor Agreement).
"Existing Creditors Indebtedness" shall have the meaning ascribed
thereto in Article 10 of the Intercreditor Agreement.
"Existing Creditors Pledge Agreement" shall have the meaning ascribed
thereto in the third recital of the Intercreditor Agreement.
"Existing Creditors Security Agreement" shall have the meaning
ascribed thereto in the third recital of the Intercreditor Agreement.
"Existing Creditors Security Documents" shall mean the Existing
Creditors Security Agreement, the Existing Creditors Pledge Agreement, the
EC Partner Pledge Agreement and the EC Lime Pledge Agreement.
"Expenses" shall mean liabilities, obligations, losses, damages,
penalties, interest, claims (including, without limitation, claims involving
liability in tort, strict or otherwise), Environmental Claims, actions, suits,
judgments, fees, costs, expenses and disbursements (including legal and
other professional fees and expenses and costs of investigation) of any
kind and nature whatsoever, regardless of whether the underlying claim for
such is founded or unfounded and including any fees, costs, expenses and
disbursements (including legal and other professional fees and expenses
and costs of investigation) of any kind and nature whatsoever arising from
condemnation proceedings.
"Final Approvals" shall mean all Governmental Approvals necessary or
desirable for the in order to allow the Project to begin commercial
operation.
"Final Completion" shall have the meaning ascribed thereto in Section
2.5(c) of the Construction Management Agreement.
<PAGE> -11-<PAGE>
"Final Completion Date" shall mean the date of Final Completion of the
Project.
"Financing Documents" shall mean the Note Purchase Agreement, the
Notes, the SPV Security Agreement, the Project Mortgage, the Lime Security
Agreement, the Lime Pledge Agreement, the Partner Security Agreement, the
OPCO Consent, the written consents obtained by Lime and/or the SPV
relating to the assignment of the Assigned Lime Contracts, the
Intercreditor Agreement, the Mortgage Subordination Agreement, the Deposit
and Disbursement Agreement, the Collateral Agency Agreement and each
other document or instrument evidencing or securing the obligations
evidenced by the Notes.
"Funding Date" shall mean the Initial Funding Date and each additional
date on which an Advance is made in accordance with Section 1.2 of the Note
Purchase Agreement.
"GAAP" shall mean generally accepted accounting principles,
consistently applied, as in effect in the United States from time to time.
"General Contractor" shall mean Lime.
"Governmental Approvals" shall mean all permits, authorizations,
registrations, franchises, consents, approvals, waivers, exceptions,
variances, claims, orders, judgments, interpretations and decrees,
licenses, exemptions, publications, filings, notices to and declarations of
or with any Governmental Authority and shall include, without limitation, all
siting, environmental and operating permits and licenses that are required
for the construction, installation, support, operation, existence,
inspection, maintenance, repair of the Project, the safety of Persons using
any portion of the Project, the Black River Common Facilities, the Project
Land and the Easement Parcel, as contemplated by the Transaction
Documents.
"Governmental Authority" shall mean any Federal, state, county,
municipal, regional, local, administrative or other governmental,
quasi-governmental or regulatory authority, agency, board, body,
instrumentality, commission, court, tribunal or judicial or quasi-judicial
body or political subdivision of any of the foregoing.
"Ground Lease" shall mean the Ground Lease, dated as of August 1, 1994,
by and between Lime and the SPV.
"Ground Lease Expiration Date" shall mean October 2, 2020.
"Hazardous Materials" shall mean: (a) any petroleum or petroleum
products, explosive, radioactive materials, asbestos, urea formaldehyde
foam insulation, polychlorinated biphenyls, lead and radon gas; (b) any
chemical, material or substance that is now or hereafter becomes defined
as or included in the definition of "hazardous substance," "restricted
hazardous waste," "hazardous material," "extremely hazardous substance,"
"restricted hazardous waste," "toxic substance," "toxic pollutant," or words
of similar import, under any applicable Environmental Law; and (c) any
chemical, material, substance, or waste, exposure to which the presence,
use, generation, treatment, release, emission, discharge, transport,
storage or disposal of which could give rise to any Environmental Claim or
is now or hereafter prohibited, limited or regulated under any
Environmental Law or by any Governmental Authority.
<PAGE> -12-<PAGE>
"Hedge Treasury Security" shall mean, on any date, the U.S. Treasury
security or securities, reported at 10 a.m. local time in Newark, New Jersey
on such date on the Telerate Service (or any service that in the opinion of
Prudential is comparable) for actively traded U.S. Treasury securities,
having a duration (in the reasonable opinion of Prudential) most nearly
equal to the duration of the Construction Notes (calculated using the
Unused Commitment immediately prior to such date and the funding schedule
set forth in the Construction Budget). Duration will be calculated in
accordance with the customary financial practices of Prudential.
"Hedge Treasury Security Bid Price" with respect to any Hedge
Treasury Security shall mean the bid price of such Hedge Treasury
Security on the Rate Acceptance Date expressed in relation to an assumed
par value of One Hundred Dollars ($100).
"Hedge Treasury Security Bid Price Increase" with respect to any Hedge
Treasury Security shall mean, on any date, the Current Hedge Treasury
Security Ask Price with respect to such Hedge Treasury Security minus the
Hedge Treasury Security Bid Price with respect to such Hedge Treasury
Security, rounded off to two decimal places, and expressed, in each case, in
relation to an assumed par value of One Hundred Dollars ($100), but in no
event less than Zero Dollars ($0). As used in this definition,
"Current Hedge Treasury Security Ask Price" means, on the date
of calculation of the Hedge Treasury Security Bid Price Increase, the
ask price on such date of the actual Hedge Treasury Security used in
the determination of the Hedge Treasury Security Bid Price.
"Holder" shall mean, as to any Note then outstanding, the Person in
whose name such Note is registered pursuant to Section 16.1 of the Note
Purchase Agreement.
"Holding Company Act" shall mean the Public Utility Holding Company Act
of 1935, as amended.
"Impositions" shall have the meaning ascribed thereto in Section 1.4
of the Project Mortgage.
"Improvements Deed" shall have the meaning ascribed thereto in Section
2.1 of the Ground Lease.
"Indemnitee" shall mean each of the Holders, the Collateral Agent and
the Disbursement Agent, Wilmington Trust Company in its individual
capacity, any Affiliate of any of the foregoing and the respective
successor, assigns, agents, representatives, partners, officers,
shareholders, directors, servants or employees of the foregoing.
"Independent Engineer" shall mean John T. Boyd Company on or prior to
the Initial Funding Date, and thereafter John T. Boyd Company or such other
engineering firm which shall be selected by the SPV and reasonably
satisfactory to the Required Holder and the Collateral Agent.
"Independent Engineer's Certificate" shall have the meaning ascribed
thereto in Section 5.7 of the Note Purchase Agreement.
<PAGE> -13-<PAGE>
"Industry Standards" shall mean the latest edition or revision of all
industry codes, standards or regulations (hereinafter referred to
collectively in this definition as "codes") applicable to the operation,
maintenance, repair or modification of the Project or any portion, part or
system thereof or incorporated therein; provided, however, that where any
such codes are subject to interpretation or where several different codes
may be applicable under Applicable Law or where the selection of any code
is not required by Applicable Law, the selection of such codes to be
complied with shall be made by the Independent Engineer.
"Initial Funding" shall have the meaning ascribed thereto in Section
1.1(c) of the Note Purchase Agreement.
"Initial Funding Date" shall have the meaning ascribed thereto in
Section 1.1(c) of the Note Purchase Agreement.
"Institutional Investor" shall mean any Accredited Investor.
"Insurance Consultant" shall mean Alexander & Alexander, or such other
consultant on insurance matters selected by the Holders.
"Intercreditor Agreement" shall mean the Intercreditor Agreement,
dated as of August 1, 1994, by and among the Collateral Agent, Prudential,
the Existing Creditors and the Existing Creditors Agent, as consented to
and acknowledged by Lime and the SPV.
"Intercreditor Obligations" shall mean collectively, at any time, each
of the obligations of one or more of the Dravo Parties owing to the Existing
Creditors, the Existing Creditors' Agent, the Collateral Agent and
Prudential at such time.
"Interim Period" shall mean, in each calendar year, the semi-annual
period commencing January 1 through and including June 30 and the semi-
annual period commencing July 1 through and including December 31.
"Investment" shall mean the Eleven Million Dollar ($11,000,000) equity
contribution to the capital of the SPV made by the Partners.
"Investment Company Act" shall mean the Investment Company Act of
1940, as amended.
"KVS" shall mean Svedala Industries, Inc., through its Kennedy Van
Saun division.
"Late Payment Rate" shall mean at any time an interest rate per annum
equal to the lesser of (i) the highest rate permitted by Applicable Law, or
(ii) an interest rate equal to two percentage points over the highest
interest payable on the Notes at such time.
"Lender" shall mean The Prudential Insurance Company of America, a
New Jersey insurance corporation, as lender under the Note Purchase
Agreement.
"Lien" shall mean any interest in Property securing an obligation
owed to, or a claim by, a Person other than the owner of the Property,
whether such interest is based on the common
<PAGE> -14-<PAGE>
law, statute or contract (including Liens arising under Environmental Laws),
and including but not limited to the security interest lien arising from a
mortgage, encumbrance, pledge, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes, and the filing of any
financing statement under the Uniform Commercial Code of any jurisdiction,
or any agreement to give or grant any of the foregoing as well as any
reservations, exceptions, encroachments, easements, rights-of-way,
covenants, conditions, restrictions, leases, claims and other title
exceptions and encumbrances (including, with respect to stock, stockholder
agreements, voting trust agreements, buy-back agreements and all similar
arrangements) affecting Property.
"Lime" shall mean Dravo Lime Company, a Delaware corporation.
"Lime Collateral" shall mean any and all Property purported to be
granted by Lime to the Collateral Agent pursuant to the Lime Security
Agreement, the Lime Pledge Agreement and any other Transaction Document.
"Lime Contract Party" shall mean each Person (other than Lime) that is
a party to the Assigned Lime Contracts.
"Lime Offeror" shall have the meaning ascribed thereto in Section 4.27
of the Note Purchase Agreement.
"Lime Pledge Agreement" shall mean the Pledge Agreement, dated as of
August 1, 1994, by and between Lime and the Collateral Agent.
"Lime Security Agreement" shall mean the Security Agreement, dated as
of August 1, 1994, by and between Lime and the Collateral Agent.
"Loss Event" shall mean any Casualty, Requisition of Title or
Requisition of Use with respect to the Project, the Project Land, the
Easement Parcel or any part thereof.
"Make-Whole Amount" shall mean at any time with respect to a principal
amount of the Notes being prepaid (in whole or in part) means the greater of
(a) Zero Dollars ($0) or
(b) the remainder of
(i) the sum of the present values (determined using a
discount rate per compounding period equal to one-half the
Make-Whole Discount Rate at such time with respect to such
principal amount of Notes and a compounding period of six (6)
months) of (A) the then remaining scheduled payments of
principal and interest that would be payable but for the
prepayment or acceleration of such principal amount of Notes
being prepaid or accelerated (except for the interest payment
due on the payment date next succeeding the date of payment or
prepayment, as the case may be), plus (B) the Interest Stub at
such time in respect of such principal amount of Notes minus
<PAGE> -15-<PAGE>
(ii) the aggregate principal amount of the Notes so
prepaid or accelerated.
As used in this definition:
"Applicable H.15" shall mean, at any time, United States Federal
Reserve Statistical Release H.15(519) or its successor publication
most recently published and available to the public at such time, or if
no such successor publication is available, then any other source of
current information in respect of interest rates on Securities of the
United States of America that is generally available and, in the
judgment of the Required Holders, provides information reasonably
comparable to the H.15(519) report.
"Interest Stub" shall mean, at any time, in respect of a principal
amount of Notes, the amount of the interest payment due on the
payment date next succeeding the date of prepayment or payment in
respect of such principal amount of Notes, less the interest accrued
subsequent to the payment date immediately preceding such next
succeeding payment date, to but not including such time, in respect of
such principal amount of Notes.
"Make-Whole Discount Rate" shall mean, at any time, with respect
to a principal amount of Notes being prepaid or accelerated, the
percentage rate (rounded to the nearest three decimal places) equal
to
(a) the yields reported, as of 10:00 a.m. (New York City time)
on the date two Business Days prior to the date of such
prepayment or acceleration, as the case may be (as reported on
page 678 of the Telerate Service or any other nationally
recognized trading screen, reasonably selected by the Required
Holders, reporting on-line intraday trading in United States
government securities), for actively traded U.S. Treasury
securities having a maturity equal to the Weighted Average Life
to Maturity of the principal amount of the Notes then being
prepaid or accelerated, or, if such yields shall not be reported
as of such time or the yields as of such time shall not be
ascertainable,
(b) the annual yield to maturity at such time of the United
States Treasury obligation listed in the then Applicable H.15
for the most recently available day in such Applicable H.15 with
a Treasury Constant Maturity (as such term is defined in such
Applicable H.15) equal to the Weighted Average Life to Maturity
of the principal amount of the Notes then being prepaid or
accelerated.
"Remaining Dollar-Years" shall mean, at any time, with respect
to any indebtedness for borrowed money the result obtained by
(a) multiplying
(i) the amount of each then remaining required
principal payment (including repayment of principal at final
maturity) of such borrowing unpaid immediately prior to such
time, by
<PAGE> -16-<PAGE>
(ii) the number of years (calculated to the nearest one-
twelfth) that will elapse between such time and the date each
such required principal payment is due, and
(b) calculating the sum of the products thereby obtained.
For purposes of this definition, it shall be assumed, notwithstanding
Section 1.5(b) of the Note Purchase Agreement, that the Construction Notes
have a final maturity date and principal amortization schedule identical to
those of the Term Notes.
"Weighted Average Life to Maturity" at any time with respect to
any indebtedness for borrowed money shall mean the number of years
obtained by dividing the then Remaining Dollar-Years of such
indebtedness by the then outstanding principal amount of such
indebtedness.
"Margin Security" shall mean "margin stock" or "margin security" within
the meaning of Regulations G, T, U and X of the Board of Governors of the
Federal Reserve System, 12 C.F.R., Chapter II, as amended from time to time.
"Maximum Capacity Payment" shall have the meaning set forth in Section
3.2(b)(iii) of the MCFA.
"Maysville Facility" shall mean the limestone mines and lime
processing and production facilities of Lime located in Maysville, Kentucky.
"MCFA" shall mean the Master Common Facilities Agreement, dated as of
August 1, 1994, by and between Lime, as Operator and Owner, and the SPV.
"Moody's" shall mean Moody's Investors Service, Inc., and any
successor that issues nationally accepted securities ratings.
"Mortgage Subordination Agreement" shall mean the Mortgage
Subordination Agreement, dated as of August 1, 1994, by and between the
Existing Creditors' Agent and the SPV.
"Multiemployer Plan" shall mean any multiemployer plan (as defined in
section 3(37) of ERISA) in respect of which the Corporation, Lime, the SPV,
the SPV General Partner or the SPV Limited Partner or any ERISA Affiliate
is an "employer" (as such term is defined in section 3 of ERISA).
"Multiple Employer Pension Plan" shall mean any employee benefit plan
within the meaning of Section 3(3) of ERISA, other than a Multiemployer
Pension Plan subject to Title IV of ERISA to which the Corporation, Lime, the
SPV, the SPV General Partner or the SPV Limited Partner or any ERISA
Affiliate and an employer (as such term is defined in Section 3 of ERISA)
other than an ERISA Affiliate or the Corporation, Lime, the SPV, the SPV
General Partner or the SPV Limited Partner contribute.
<PAGE> -17-<PAGE>
"Non-OPCO Contracts" shall mean all lime supply contracts to which Lime
or an Affiliate is or may, from time to time, be a party (other than the OPCO
Agreement) pursuant to which Lime or an Affiliate is or may, from time to
time, be obligated to provide, or has provided, processed lime produced by
the Black River Facility, the Project or the Maysville Facility.
"Non-OPCO Lime" shall mean processed lime produced by the Black River
Facility, the Project and the Maysville Facility to satisfy Lime's
obligations under Non-OPCO Contracts, which lime could have been produced
by the Project in compliance with the relevant Non-OPCO Contract and the
quality and technological standards set forth therein.
"Note Purchase Agreement" shall mean the Note Purchase Agreement,
dated as of August 1, 1994, by and between Prudential and the SPV.
"Notes" shall mean, collectively, the then outstanding Construction
Notes and Term Notes.
"Occupational Safety and Health Act" means the Occupational Safety
and Health Act of 1970, as amended, and all rules and regulations
promulgated thereunder.
"Officer's Certificate" means a certificate signed by a Responsible
Officer, duly authorized by appropriate corporate action to execute such
certificate.
"One Year's Debt Service" shall have the meaning ascribed thereto in
Section 2.3(c)(ii) of the Deposit and Disbursement Agreement.
"OPCO" shall mean Ohio Power Company, an Ohio corporation.
"OPCO Agreement" shall mean the Lime Supply Agreement, dated June 21,
1993, between Lime and OPCO.
"OPCO Consent" shall mean that certain Consent Agreement by and
among OPCO, Lime, the SPV and the Collateral Agent, relating to the
assignment of the OPCO Agreement from Lime to the SPV and certain related
matters.
"Operating Expenses" shall mean, at any time all items identified as
Operation and Maintenance Costs in the then current approved Project
Budget.
"Operating Work" shall have the meaning ascribed thereto in Section
1.2(a) of the MCFA.
"Operation and Maintenance Costs" shall have the meaning ascribed
thereto in Article 4 of the MCFA.
"Operation Commencement Date" shall mean (i) the Conversion Date, or (ii)
if the Conversion Date has not occurred, the Substantial Completion Date.
"Operator" shall have the meaning ascribed thereto in Section 1.1 of
the MCFA.
<PAGE> -18-<PAGE>
"Override Agreement" shall mean the Override Agreement dated as of
January 21, 1992, by and among the Dravo Parties and the Existing
Creditors, as amended by certain Amendments dated as of March 10, 1993,
March 7, 1994 and August 1, 1994.
"Owner" shall have the meaning ascribed thereto in paragraph 2 of the
preliminary statements to the MCFA.
"Partial Loss" shall mean a Loss Event other than a Total Loss.
"Participants" shall mean, collectively, Prudential, the SPV, Lime, the
Partners, the Collateral Agent, the Disbursement Agent, the Existing
Creditors and the Existing Creditors' Agent and the respective successors
and assigns of the foregoing.
"Partner Collateral" shall mean any and all Property purported to
granted by the Partners to the Collateral Agent pursuant to the Partner
Security Agreement and any other Transaction Document.
"Partner Security Agreement" shall mean the Partner Security
Agreement, dated as of August 1, 1994, by and among the Partners and the
Collateral Agent.
"Partners" shall mean, collectively, DBR General Inc., a Delaware
corporation, and Dravo Black River Limited Inc., a Delaware corporation.
"Partnership Agreement" shall mean that certain Limited Partnership
Agreement dated as of July 18, 1994 by and between the SPV General Partner
and the SPV Limited Partner.
PBGC shall mean the Pension Benefit Guaranty Corporation and any
successor corporation or governmental agency.
Pension Plan shall mean, at any time, any "employee pension benefit
plan" (as such term is defined in section 3 of ERISA) maintained at such time
by the SPV or any ERISA Affiliate for employees of the SPV or such ERISA
Affiliate, excluding any Multiemployer Plan, but including, without limitation
any Multiple Employer Pension Plan.
"Performance Criteria" shall mean the performance criteria set forth
in the Construction Agreement with respect to the Project Kilns, including,
without limitation, Article 8 and Article 10 thereof and the Performance
Standards annexed thereto.
"Permitted Encumbrances" shall mean the exceptions to title listed on
the Title Policy and such other exceptions as the Holders may consent to in
writing.
"Permitted Investments" shall mean, to the extent any of the following
do not have a remaining maturity in excess of 6 months from the time of
purchase, (i) direct obligations of the United States Government, (ii)
obligations fully guaranteed by the United States, (iii) certificates of
deposit issued by, or bankers' acceptances of, or time deposits with, any
bank, trust company or national banking association incorporated or doing
business under the laws of the United States or one of the States thereof
having combined capital and surplus and retained earnings of at least
$100,000,000 and having general obligations rated at least AA (or the then
equivalent
<PAGE> -19-<PAGE>
grade) by Moody's and Standard & Poor's, (iv) commercial paper of any holding
company of a bank, trust company or national banking association described
in the preceding clause (iii) provided such obligations are rated "A-1"/"P-1"
(or the then equivalent grade) by Standard & Poor's and Moody's; (v) bonds,
notes or other obligations of any State of the United States, or any
political subdivision of any such State, or any agencies or other
instrumentalities of any such State, including but not limited to industrial
development bonds, pollution control revenue bonds, public power bonds,
housing bonds, other revenue bonds or other general obligations bonds,
provided that, at the time of their purchase, such obligations are rated "A"
(or its equivalent) or better by Standard & Poor's and Moody's; (vi) mutual
funds that invest solely in Securities of the type referred to in any one
or more of clauses (i) through (v) above.
"Permitted Liens" shall mean:
(a) the respective rights and interests of the various
parties created by the Transaction Documents, as provided therein;
(b) Liens for Taxes that either are not yet due and payable
or are being contested in good faith and by appropriate proceedings
diligently conducted, so long as such proceedings do not (i) involve
any risk of the foreclosure, forfeiture or loss of the Project or the
Site or any part thereof or interest therein or any substantial
danger of the sale of the Project or the Site or any parts thereof or
interest therein, (ii) interfere with the use, possession or
disposition of the Project or any part thereof or interest therein, or
(iii) involve any risk of the invalidity or the loss of the priority of
the Lien of the Collateral Agent under any Transaction Document;
(c) materialmens', mechanics', workmens', repairmens',
employees', carriers', warehousemens' and other like Liens relating to
any construction, rebuilding or repair of the Project or on the
Project Land or arising in the ordinary course of business for
amounts that either are not more than 30 days past due or are being
contested in good faith by appropriate proceedings, so long as such
proceedings satisfy the conditions for the continuation of
proceedings to contest Taxes set forth in clause (b) above;
(d) Liens of any of the types referred to in clauses (b) and
(c) above that have been bonded by a reputable bonding company of
recognized financial standing reasonably acceptable to the Holders
and the Collateral Agent for the full amount in dispute (or as to which
other security arrangements reasonably satisfactory to the Holders
and the Collateral Agent have been made);
(e) Liens arising out of judgments or awards with respect to
which appeals or other proceedings for review are being prosecuted
in good faith and for the payment of which adequate reserves have
been provided as required by GAAP or other appropriate provisions
have been made, so long as such proceedings have the effect of
staying the execution of such judgments or awards and satisfy the
conditions for the continuation of proceedings to contest Taxes set
forth in clause (b) above;
(f) all Permitted Encumbrances;
<PAGE> -20-<PAGE>
(g) other Liens affecting the Project or the Site consisting
of easements, rights-of-way or similar rights of use that do not,
individually or in the aggregate, impair (other than to an
insignificant extent) the use, value or useful life of the Project or
the Site; and
(h) with respect to the Shared Collateral,
(i) Liens in favor of the Existing Creditors' Agent
created by the Existing Creditors Security Documents,
(ii) the Lien in favor of First Alabama Bank with respect
to the Requirements Contract dated June 30, 1990 by and
between Lime and Basic, and the Limestone Lease Agreement
dated June 8, 1990 by and between Lime and Basic, and
(iii) such other Liens as may from time to time be
consented to by the Holders.
"Person" shall mean any individual, partnership, corporation, trust,
limited liability company, joint venture, unincorporated organization,
Governmental Authority or other entity.
"Plans and Specifications" shall mean the plans and specifications for
the design, construction and operation of the Project, certified copies of
which have been delivered to Prudential and the Independent Engineer prior
to the Initial Funding Date.
"Project" shall mean the lime production facility to be constructed on
the Site in accordance with the Plans and Specifications, having a
production capability of not less than 700,000 tons per year of processed
lime and including, without limitation, any and all appliances, parts,
components, instruments, appurtenances, accessories, machinery,
equipment, fixtures and other Property that may be incorporated or
installed in or attached to or otherwise become part of such facility,
together with all substitutions, replacements, supplements and
modifications thereof.
"Project Budget" shall have the meaning ascribed thereto in Section
1.4(a)(iii) of the MCFA.
"Project Contracts" shall mean the Construction Contracts, the
Construction Management Agreement, the Ground Lease, the Easement
Agreement, the MCFA, the OPCO Agreement, the Transportation Agreement, all
Governmental Approvals and all other agreements, documents, instruments
and contracts of whatever nature, now or hereafter arising, relating to the
construction testing, bringing into operation, possession, operation, use,
repair or maintenance of the Project, the Project Land or the Easement
Parcel as such documents are approved by the Purchaser in accordance with
Section 5.25 of the Note Purchase Agreement.
"Project Kilns" shall mean the two rotary preheater kilns including
fines lime calcining system and course lime calcining system to be
constructed on the Project Land pursuant to the Construction Agreement,
together with all the equipment, parts, components, instruments,
accessories, machinery and fixtures related thereto located on the Project
Land.
<PAGE> -21-<PAGE>
"Project Land" shall mean that certain piece or parcel of land leased
by Lime to the SPV pursuant to the Ground Lease and described in Exhibit A
to the Ground Lease.
"Project Mortgage" shall mean the Leasehold Mortgage, Assignment of
Rents and Leases, Security Agreement and Fixture Filing, dated as of
August 1, 1994, by the SPV in favor of Collateral Agent.
"Project-Owned Common Facilities" shall mean the Project other than
the Project Kilns.
"Project Profit Margin Per Ton" shall mean,
(a) as used in Section 3.2 of the MCFA, for any Contract Year,
the excess of (i) the Adjusted Base Price for such Contract Year (as
such term is defined in the OPCO Agreement) minus (ii) the quotient of
(A) all Operation and Maintenance Costs for such Contract Year that
would have been incurred had all processed lime produced at the
Project, the Black River Facility and the Maysville Facility been
produced at the Project divided by (B) the number of tons of Non-OPCO
Lime under Compatible Lime Supply Agreements actually produced at
the Project, the Black River Processing Complex and the Maysville
Processing Complex during such Contract Year, and
(b) as used in Section 3.3 of the Intercreditor Agreement, for
any year in a Measuring Period (the "Calculation Year"), the excess of
(i) the Adjusted Base Price (as such term is defined in the OPCO
Agreement) for the Base Year, increased at the rate of 3% per annum
for each year subsequent to the Base Year up to and including the
Calculation Year minus (ii) the quotient of (A) all Operation and
Maintenance Costs incurred during the Base Year, increased at the
rate of 3% per annum for each year subsequent to the Base Year up to
and including the Calculation Year, divided by (B) the number of tons
of processed lime produced by the Project during the Base Year.
The "Base Year" shall mean the complete Contract Year immediately
preceding the date of determination of the Discounted Present Value of the
60,000 Ton Receivables pursuant to Section 3.3 of the Intercreditor
Agreement.
"Project Revenue Account" shall mean the account entitled "Black River
Expansion Project Revenue Account" maintained by the SPV with the
Disbursement Agent pursuant to Section 2.2 of the Deposit and
Disbursement Agreement.
"Project Revenues" in respect of any period, shall mean all revenues
of the SPV in respect of such period including, without limitation, all
payments by OPCO under the OPCO Agreement (or any payments by any Person
under any Economically Similar Contract), all payments by either the Owner
or Operator to the SPV under the MCFA, any Capacity Payment under the
MCFA, the proceeds of any business interruption insurance, all revenues
from sales of processed lime referred to in the first sentence of Section
3.2(d) of the MCFA, interest accrued on the balances of the Accounts and all
other income, however earned, of the SPV, but excluding (i) insurance
proceeds and condemnation awards to the extent dealt with in Section 2.6 of
the Deposit and Disbursement Agreement, (ii) payments made by the Existing
Creditors, or the Existing Creditors' Agent on behalf of the Existing
Creditors, pursuant to the exercise of cure
<PAGE> -22-<PAGE>
rights under Article 6 of the Intercreditor Agreement, and (iii) any
proceeds from the sale of the Notes.
"Projections" shall mean the financial projections of revenues and
expenses of the Project prepared by Continental Bank Lease Capital Group
and delivered to the Purchaser pursuant to Section 5.27 of the Note
Purchase Agreement.
"Property" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, and whether tangible or intangible.
"Prudential" shall mean The Prudential Insurance Company of America,
a New Jersey insurance corporation, as lender under the Note Purchase
Agreement.
"Prudent Industry Practice" shall mean, at any given time, any of the
practices, methods and acts engaged in or approved by a significant portion
of the lime processing industry at the time the decision was made to utilize
such practices, methods or acts or any of the practices, methods and acts
that, in the exercise of reasonable judgment in light of the facts known at
the time when the decision was made, would have been expected to accomplish
the desired result, consistent with considerations of reliability, safety,
expedition, and protection of the environment and with due regard for,
among other things, manufacturers' warranties, engineering and operating
conditions, and the requirements of Governmental Authorities and the
requirements of the Transaction Documents.
"Punch List Items" shall mean as of the Substantial Completion Date
any items identified by the SPV and by the Independent Engineer as having
to be completed in order for Final Completion to be achieved.
"Purchaser" shall mean The Prudential Insurance Company of America, a
New Jersey insurance corporation, as purchaser of the Notes under the
Note Purchase Agreement.
"Rate Acceptance Date" shall mean the date on which Prudential and the
SPV agree on the interest rate to apply to the Construction Notes.
"Rate Commitment Period" shall mean, with respect to any Construction
Notes, the period beginning on and including the forty-third (43rd) day
after the Rate Acceptance Date applicable to such Construction Notes (not
counting in such forty-three (43) day period the Rate Acceptance Date), and
ending on but excluding the earlier of:
(a) the date such Construction Notes are fully advanced, or
(b) the date the SPV cancels the Unused Commitment in full.
"Rate Delayed Delivery Fee" shall have the meaning ascribed thereto in
Section 1.7(b) of the Note Purchase Agreement.
"Required Holders" shall mean, at any time, the holders of a majority in
outstanding principal amount of the Notes at such time.
<PAGE> -23-<PAGE>
"Required Reserve Payment" shall mean an amount equal to the lesser of
(i) that portion of the Commitment Amount which has not been cancelled and
which remains unadvanced after the payment of (or provision for) all
Construction Costs, and (ii) One Year's Debt Service.
"Requisition of Title" shall mean any circumstance or event in
consequence of which the Project or the Site or any material portion of any
of the foregoing, shall be condemned or seized or title thereto shall be
requisitioned or taken by any Governmental Authority or any other Person
under power of eminent domain or otherwise.
"Requisition of Use" shall mean any circumstance or event (other than
a Requisition of Title) in consequence of which the use of the Project or
the Site or any material portion thereof shall be requisitioned or taken by
any Governmental Authority or any other Person under power of eminent
domain or otherwise.
"Responsible Officer" shall mean, with respect to the subject matter of
any representation, warranty, covenant, agreement, obligation or Officer's
Certificate of any party contained in or delivered pursuant to any
Transaction Document, the President, or any Vice President, Assistant Vice
President, Treasurer, Assistant Treasurer or other officer who in the
normal performance of his or her operational responsibility would have
knowledge of such matter and the requirements with respect thereto, or in
the case of the SPV, such an officer of the SPV General Partner.
"Scheduled Variable Cost Savings Per Ton" shall mean (a) as of any date
of determination thereof that falls in any year up to and including 1998,
the amount set forth in the table below opposite the year in which such
date of determination falls, and (b) as of any date of determination that
falls in any year subsequent to 1998, (i) the sum of the Table Amount plus
the General Index Amount divided by (ii) five. The "Table Amount" shall mean
(x) the amount calculated in the manner indicated in the last entry in the
table below multiplied by (y) three. The "General Index Amount" shall mean (x)
(1) $8.25 multiplied by (2) a fraction, of which, (A) for 1999, the numerator is
the average monthly General Purpose Machine and Equipment Index (No. 114)
(the "Machine and Equipment Index") published by the United States Bureau
of Statistics for the twelve months from November, 1997 to October, 1998,
inclusive, and the denominator is the average monthly Machine and
Equipment Index for the twelve months from November, 1996 to October, 1997,
inclusive, and (B) for any year after 1999, the numerator is the average
monthly Machine and Equipment Index for the twelve consecutive months
ending with and including October of the year immediately preceding such
year and the denominator is the average monthly Machine and Equipment
Index for the twelve months from November, 1997 to October, 1998, inclusive,
multiplied by (y) two.
Table
Amount Year
$4.50 1995
$6.50 1996
$7.35 1997
$8.25 1998
(CAFC divided by BAFC)
multiplied by $8.25 Each year after 1998
<PAGE> -24-<PAGE>
"CAFC" ("Current Average Fuel Cost") shall mean the actual delivered price
per ton of coal, divided by the BTU content per ton of coal, for the coal
delivered to the Black River Processing Complex during November of the
year preceding the year in respect of which a determination is being made.
"BAFC" ("Base Average Fuel Cost") for the year 1999 shall mean the actual
delivered price per ton of coal, divided by the BTU content per ton of coal,
for the coal delivered to the Black River Processing Complex during
January, 1998; for each year subsequent to 1999, BAFC shall mean the
actual delivered price per ton of coal, divided by the BTU content per ton
of coal, for the coal delivered to the Black River Processing Complex during
November, 1998.
"SEC" shall mean the U.S. Securities and Exchange Commission.
"Secured Obligations" shall mean, at any time,
(a) the indebtedness from time to time evidenced by the Notes
and any and all other sums required to be paid by the SPV or Lime from
time to time to the Holders or the Collateral Agent pursuant to the
Notes, the Note Purchase Agreement or any other Transaction
Documents, and
(b) all covenants, agreements, conditions and other
provisions required to be kept, performed, observed and complied with
by or on behalf of the SPV or Lime from time to time in connection with
the Notes, the Note Purchase Agreement or any of the other
Transaction Documents.
"Secured Parties" shall mean the Existing Creditors, the Existing
Creditors Agent, Prudential and the Collateral Agent, together with their
successors and assigns.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Security" shall have the same meaning ascribed thereto in Section
2(1) of the Securities Act.
"Senior Financial Officer" shall mean, with respect to any Person, any
one of the chief financial officer, the principal accounting officer or the
treasurer (or the equivalent) of such Person, or in the case of the SPV,
such an officer of the SPV General Partner.
"Senior Officer" shall mean, with respect to any Person, any one of
the chairman of the board of directors, the chief executive officer, the
chief operating officer, the president, the chief financial officer and the
treasurer (or the equivalent) of such Person, or in the case of the SPV,
such an officer of the SPV General Partner.
<PAGE> -25-<PAGE>
"Shared Collateral" shall mean for so long as both the Collateral Agent
and the Existing Creditors' Agent shall have Lien thereon, the Partner
Collateral, the Equity Collateral and the Assigned Lime Contract Collateral.
"Site" shall mean, collectively, the Project Land and the Easement
Parcel.
"Six Months' Debt Service" shall mean as of the Conversion Date fifty
percent (50%) of One Year's Debt Service as of such date.
"Soil Test" shall have the meaning set forth in Section 5.19 of the
Note Purchase Agreement.
"Source" shall have the meaning described in Section 3.2 of the Note
Purchase Agreement.
"SPV" shall mean Dravo Black River Limited Partnership, a Delaware
limited partnership.
"SPV Collateral" shall mean any and all Property purported to be
granted by the SPV to the Collateral Agent pursuant to the SPV Security
Agreement, the Project Mortgage and any other Transaction Document.
"SPV General Partner" shall mean DBR General Inc., a Delaware
corporation.
"SPV Limited Partner" shall mean Dravo Black River Limited Inc., a
Delaware corporation.
"SPV Security Agreement" shall mean the Security Agreement, dated as
of August 1, 1994, by and between the SPV and the Collateral Agent.
"Standard & Poor's" shall mean Standard & Poor's Ratings Group and
any successor that issues nationally accepted securities ratings.
"Subscription Agreement" shall mean the Subscription Agreement dated
August 2, 1994, between the General Partner and the Purchaser.
"Subsequent Funding Date" shall have the meaning ascribed thereto in
Section 6 of the Note Purchase Agreement.
"Substantial Completion" shall mean completion of the construction of
the Project in accordance with the Plans and Specifications, except for the
Punch List Items.
"Substantial Completion Date" shall mean the date on which Substantial
Completion is achieved.
"Tax or Taxes" shall mean any and all fees (including, without
limitation, documentation, recording, license and registration fees), taxes
(including, without limitation, net income, franchise, value added, ad
valorem, gross income, gross receipts, sales, use, excise, transfer, rental,
property (personal and real, tangible and intangible) and stamp taxes),
levies, imposts, duties, charges, assessments or withholdings of any nature
whatsoever, general or special, ordinary or
<PAGE> -26-<PAGE>
extraordinary, together with any and all penalties, fines, additions to tax,
interest thereon and other charges.
"Term Exit Fee" shall have the meaning ascribed thereto in Section
2.3(b) of Note Purchase Agreement.
"Term Note Closing" shall have the meaning ascribed thereto in Section
2.1(c) of the Note Purchase Agreement.
"Term Note Maturity Date" shall mean August 1, 2010.
"Term Notes" shall have the meaning ascribed thereto in Section 2.1(a)
of the Note Purchase Agreement.
"Term Option Amount" shall have the meaning ascribed thereto in
Section 2.3(b) of Note Purchase Agreement.
"Term Option Amount Prepayment Date" shall have the meaning ascribed
thereto in Section 2.3 of Note Purchase Agreement.
"Title Company" shall mean Commonwealth Land Title Insurance Company,
together with any other title insurance company providing co-insurance or
reinsurance acceptable to the Holders.
"Title Policy" shall have the meaning ascribed thereto in Section
5.15(b) of the Note Purchase Agreement.
"Tolling Payment" has the meaning ascribed thereto in Section 3.2(a)(i)
of the MCFA.
"Total Loss" shall mean a Loss Event or failure of title that results
in any dispossession of the SPV or Lime from the Site, which, in either case,
renders the Project unable to be operated on a commercially reasonable
basis as determined by the Required Holders. A "Total Loss" shall be deemed
to occur (A) in the event of a Casualty described in clause (i), clause (iii) or
clause (iv) of the definition thereof, on the date of the occurrence of such
event; (B) in the event of a Casualty described in clause (ii) of the
definition thereof, on the date the Independent Engineer determines that a
Total Loss has occurred or, upon the failure of the Independent Engineer
to make such determination within the time period provided in Section 12.2
of the Ground Lease, on the day following the last day of such period; (C) in
the event of a Requisition of Title, on the date thereof; and (D) in the
event of a Requisition of Use, on the first day following the date on which
the Independent Engineer determines that such Requisition of Use shall
extend or reasonably be expected to extend (i) beyond one year, (ii) beyond
the Ground Lease Expiration Date, or (iii) for an indefinite period of time.
"Total Net Capability" shall mean, during any period, the maximum
amount of processed lime (expressed in tons) that the Project is capable of
producing during such period, in each case as determined by the
Independent Engineer in accordance with Prudent Industry Practice, but in
no event less than 650,000 tons per year.
<PAGE> -27-<PAGE>
"Total Net Production" shall mean, during any period, the amount of
processed lime (expressed in tons) that the Project produced during such
period, as measured by the Operator in accordance with Prudent Industry
Practice.
"Transaction Documents" shall mean, collectively, the Financing
Documents, the Project Contracts, the Subscription Agreement and the Class
B Common Stock.
"Transaction Expenses" shall have the meaning ascribed thereto in
Section 15.1 of the Note Purchase Agreement.
"Transportation Agreement" shall mean that certain agreement to be
entered into between Marine Equipment Management Corporation and Lime
and/or the SPV relating to the transportation of processed lime from the
Site to OPCO.
"UCC" or "Uniform Commercial Code" shall mean the Uniform Commercial
Code as in effect in any applicable jurisdiction.
"Uncompensated Yield Rate" shall mean, at any time, the interest rate
applicable to the Construction Notes, minus the Alternative Investment
Yield at such time. As used in this definition,
"Alternative Investment Yield" shall mean, at any time, the
average per annum rate of interest on investments that at such time,
in the opinion of Prudential, are readily available to Prudential, are
suitable for the short-term investment of money by Prudential, and
have a maturity most nearly comparable to the maturity of the
Construction Notes (assuming that the Construction Notes are
advanced in the amounts and at the times set forth in the
Construction Budget).
"Uncontrollable Forces" shall have the meaning set forth in Article 4
of the MCFA.
"Unused Commitment" shall mean at any time the excess of (a) the
Commitment Amount, at such time, over (b) the sum of (i) the aggregate
principal amount outstanding under each Note held by any Holder, at such
time, plus (ii) the aggregate dollar amount of cancellations previously made
by the SPV with respect to such Commitment Amount in accordance with
Section 1.7(c) of the Note Purchase Agreement, at such time.
"Voting Stock" shall mean the capital stock of any class or classes of
a corporation the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of corporate directors (or
Persons performing similar functions).
"Windup Account" shall mean the account entitled "Black River
Expansion Windup Account" maintained by the SPV with the Disbursement
Agent pursuant to Section 2.8 of the Deposit and Disbursement Agreement.
<PAGE> -28-
MASTER COMMON FACILITIES AGREEMENT
Dated as of August 1, 1994
Between
DRAVO LIME COMPANY,
as Operator and Owner
and
DRAVO BLACK RIVER LIMITED PARTNERSHIP
Regarding the Black River Lime
Production Facility
(Carntown, Kentucky)
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1. OPERATION AND MAINTENANCE OF THE PROJECT 1
1.1 Appointment of the Operator 1
1.2 Operational Responsibilities and Obligations
of the Operator 2
1.3 Matters Requiring Approval 2
1.4 Operation and Maintenance Costs; Budget 3
1.5 Outages 7
1.6 Books and Records; Reports 8
1.7 Inspection Rights 8
1.8 Annual Audit 9
1.9 Uncontrollable Forces 9
1.10 Removal of Operator 9
1.11 Appointment of a New Operator 11
1.12 Indemnification 12
ARTICLE 2. OWNER'S SUPPLY OBLIGATIONS 13
2.1 Limestone Supply 13
2.2 Additional Supply Obligations of the Owner 13
2.3 Books of Record; Reports 14
2.4 Access to Books and Records 14
2.5 Payment of Supply Costs 14
2.6 Annual Audit 15
2.7 Uncontrollable Forces 15
2.8 Most Favored Nation 15
ARTICLE 3. COMMON FACILITIES AND TOLLING 15
3.1 Tolling and Use of Common Facilities 15
3.2 Tolling Payments and Capacity Payments 16
3.3 Uncontrollable Forces 19
3.4 Maysville and Black River Production 19
3.5 Books and Records; Access 19
ARTICLE 4. DEFINITIONS 19
ARTICLE 5. MISCELLANEOUS 21
5.1 Change of Control 21
5.2 Dispute Resolution 21
5.3 Term of Agreement 22
5.4 Notices 22
5.5 Nature of Obligations 22
5.6 Successors and Assigns 22
5.7 Amendments 23
5.8 Consultations 23
<PAGE> -i-<PAGE>
5.9 Counterparts 24
5.10 Set-off 24
5.11 Governing Law 24
5.12 Cooperation 24
5.13 Severability 24
5.14 WAIVER OF JURY TRIAL 25
5.15 Jurisdiction; Consent to Service of Process 25
5.16 Consent of SPV 25
5.17 Right to Cure 25
<PAGE> -ii-<PAGE>
MASTER COMMON FACILITIES AGREEMENT
MASTER COMMON FACILITIES AGREEMENT (this "Agreement"), dated as of
August 1, 1994, between DRAVO LIME COMPANY, a Delaware corporation, as
Owner and Operator, and DRAVO BLACK RIVER LIMITED PARTNERSHIP, a Delaware
limited partnership.
PRELIMINARY STATEMENTS
1. Pursuant to the Ground Lease the SPV will acquire from Lime a
leasehold interest in the Project Land. The SPV desires to complete
construction of the Project upon the Site. Lime has assigned to the SPV
its rights under the Construction Contracts. In addition, the SPV has
appointed Lime to act as construction manager of the Project pursuant to
the Construction Management Agreement.
2. Lime, as owner of the Black River Facility (together with its
successors and permitted assigns as owner of the Black River Facility, in
such capacity, the "Owner"), desires (i) to provide certain facility
support and services and to supply limestone and other necessary items to
the Project and (ii) to serve as initial Operator of the Project.
3. In exchange therefor and for other good and valuable consideration,
the SPV wishes to grant to the Owner the right to use the Project for the
processing of the Owner's limestone and the handling and storage of
processed lime.
4. The parties hereto desire to enter into this Agreement, the Ground
Lease and various other Transaction Documents to establish their
respective rights and obligations in respect of the foregoing
arrangements. For purposes of this Agreement, capitalized terms used
herein and not otherwise defined herein shall have the meanings assigned
to them in Annex A to the Note Purchase Agreement, dated as of August 1,
1994, between the SPV and the Lender. The rules of usage set forth in
such Annex A shall apply hereto.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties
hereto hereby agree as follows:
ARTICLE 1. OPERATION AND MAINTENANCE OF THE PROJECT
1.1 Appointment of the Operator. The SPV hereby appoints Lime as
sole operator of the Project (such sole Operator, in such capacity,
together with its successors and permitted assigns, being herein referred
to as the "Operator") from and after the date hereof until the termination
of this Agreement or until Lime shall have been removed in accordance with
Section 1.10. Lime hereby agrees to serve as the initial Operator on the
terms and subject to the conditions of this Agreement.
<PAGE> -1-<PAGE>
1.2 Operational Responsibilities and Obligations of the Operator.
(a) The Operator shall be responsible for providing all work and
services with respect to the start-up, operation and maintenance of the
Project and the operation and maintenance of the Black River Common
Facilities as set forth in Schedule 1 and the other provisions of this
Agreement (the "Operating Work"). Each of the parties hereto
acknowledges and agrees that the Operator, in performing its duties
hereunder, is acting as an independent contractor.
(b) Subject to Section 1.3, the Operator may enter into such
agreements or subcontracts as the Operator, in compliance with Prudent
Industry Practice, deems necessary or appropriate, or as may be
required by Applicable Law, with respect to the Operating Work. If any
such agreement or subcontract (or modification thereof), except for any
collective bargaining agreement, shall provide for the payment of more
than $100,000 by any party thereto or shall refer to the SPV, the
Lender or the Collateral Agent, such agreement or subcontract (or
modification thereof) shall expressly provide that it does not impose
on the SPV or any other party to a Transaction Document (other than the
Operator) any obligation, liability or duty to any contractor or
subcontractor or create any contractual relationship between any
contractor or subcontractor and the SPV or any other party to a
Transaction Document (other than the Operator).
(c) In fulfilling its obligations under this Article 1, the
Operator shall not, except as otherwise expressly set forth herein
(including Section 1.9 and Section 3.1(b) hereof), be required to take
any action that would have the effect of discriminating against the
Black River Facility or any other lime production facility owned by it
or any of its Affiliates, or in the use of the Project or the Black
River Common Facilities in connection therewith. In addition, the
Operator shall not take any action in connection with the operation of
the Black River Processing Complex or any other lime production
facility owned by it or any of its Affiliates that would have the
effect of discriminating against the Project. For purposes of this
Section 1.2(c), "discriminating" means providing available supplies
and/or services on any basis other than ratably, in accordance with
then applicable production or maintenance requirements, among the
Project and all lime production facilities operated by the Operator
capable of servicing Compatible Lime Supply Agreements.
1.3 Matters Requiring Approval. The Operator shall not take any
action with respect to the Project except as set forth in Section 1.2 or
in the Easement Agreement. In any case, and without limiting the
generality of the foregoing, the Operator shall not take any of the
following actions without the prior written consent of the SPV:
(a) any action the effect of which may be to reduce the
production level at which the Project is capable of being operated for
Capability as of the Conversion Date unless such action is in
consequence of an Operating Emergency as to which (i) the Operator
shall have given the SPV, the Lender and the Independent Engineer
notice setting forth the details of such Operating Emergency within 48
hours after the occurrence of such event or circumstance ("Emergency
Notice") and (ii) within one week after receipt of the Emergency Notice
by the Independent Engineer, the Independent Engineer shall have agreed
that such reduction in production level is, consistent with Prudent
Industry Practice, necessary to
<PAGE> -2-<PAGE>
avoid or alleviate such Operating Emergency; provided, however, that
any such reduction on account of an Operating Emergency shall be
permitted for only such period of time as the Independent Engineer, in
consultation with the Operator, shall deem appropriate, in accordance
with Prudent Industry Practice;
(b) make any Capital Additions or Modifications, or any
adjustments, alterations or other physical changes to the Project (i)
the effect of which may be to reduce the Total Net Capability of the
Project or (ii) which may be inconsistent with the obligations of the
SPV under the Note Purchase Agreement (as in effect on the Initial
Funding Date); provided, however, that in the case of any Capital
Additions or Modifications, or any adjustment, alteration or other
physical change of any kind whatsoever, which is consented to in
writing by the SPV, the costs thereof shall not constitute Operation
and Maintenance Costs, or be paid with Project Revenues, unless
otherwise agreed in writing by the SPV; and provided, further, that no
Capital Additions or Modifications or any adjustment, alteration or
other physical change shall be made to the Project-Owned Common
Facilities which could reasonably be expected to have a material
adverse effect on the Black River Facility without the prior written
consent of the holders of 66-2/3% in principal amount of the Existing
Creditors Indebtedness;
(c) any action the effect of which could reasonably be expected
to cause a Permanent Shutdown to occur;
(d) settlement of any dispute with a contractor or supplier in
respect of goods or services contracted for by the Operator hereunder,
if the amount involved is in excess of $250,000;
(e) other than for Operating Emergencies which are governed by
Section 1.3(a), any action to take the Project out of service for any
continuous period that (i) exceeds one week, (ii) when combined with
all periods of voluntary outage of the Project not requiring consent
under this Section 1.3(e) which shall have occurred in the 12-month
period immediately preceding the date of any such action, would exceed
in the aggregate three weeks, (iii) is not permitted pursuant to
Section 1.5 or (iv) constitutes a Permanent Shutdown;
(f) the adoption of any Project Budget or Extended Budget, and
any changes to either thereof; or
(g) make any material substitution, replacement or repair of any
part or equipment incorporated into the Project.
Notwithstanding the foregoing, the scheduled recurring capital
expenditures referred to on Schedule 2 hereto shall constitute Operation
and Maintenance Costs.
1.4 Operation and Maintenance Costs; Budget.
(a) (i) At least 60 days prior to the beginning of each
Contract Year, the Operator shall prepare and submit to the SPV,
the Independent Engineer, the Existing Creditors, the Lender and
the Owner, (A) a draft line item budget (the
<PAGE> -3-<PAGE>
"Draft Project Budget") setting forth by category the Operator's
projections of the cost of operating the Project during the
upcoming Contract Year, on a month by month basis, (B) detailed
backup information sufficient to permit an informed review of
such Draft Project Budget, and (C) the levels of projected lime
purchases provided to the SPV by OPCO pursuant to Article III(c)
of the OPCO Agreement. Each Draft Project Budget and each
Project Budget shall contain a separate line item for the costs
of coal/petroleum coke, electricity, insurance, property taxes,
labor, scheduled recurring capital expenses, and Other Costs
based upon the projected levels of lime purchases provided to the
SPV by OPCO pursuant to Article III(c) of the OPCO Agreement, all
as more fully set forth on Schedule 2 hereto. No Draft Project
Budget or Project Budget shall provide for any Capital Additions
or Modifications or any other items requiring prior written
consent pursuant to Section 1.3 (unless such consent shall be
granted).
(ii) Within 45 days after its receipt of a Draft Project
Budget for any Contract Year, the SPV and the Lender shall give
written notice to the Operator that such Draft Project Budget has
been approved or disapproved by the SPV and the Lender. If such
Draft Project Budget shall be disapproved, the Operator shall in
good faith propose modifications thereto until such Draft Project
Budget, as so modified, shall be approved. If the Operator, the
SPV and the Lender cannot agree on a Draft Project Budget for any
Contract Year, such disagreement shall be resolved in accordance
with the procedures set forth in Section 5.2.
(iii) Not later than the first day of any Contract Year,
the Operator shall submit to the SPV, the Independent Engineer,
the Lender, the Existing Creditors, the Disbursement Agent and
the Owner a final project budget (the "Project Budget") which
shall be the same as the Draft Project Budget in respect of such
Contract Year that has been approved by the SPV and the Lender,
with only such changes therein as shall not, without the prior
written consent of the SPV and the Lender (which consent shall
not be unreasonably withheld), add or delete any line item set
forth in such Draft Project Budget or increase or decrease any
line item amount set forth in such Draft Project Budget by more
than 2%; provided that, if no Draft Project Budget has been
approved by the SPV and the Lender by the first day of any
Contract Year, a Draft Project Budget for such Contract Year that
is so approved subsequent to such date shall be the Project
Budget for such Contract Year with no modifications therein that
are not approved by the SPV and the Lender.
(iv) The Operator shall not make any expenditure in
respect of Operation and Maintenance Costs for any Contract Year
except (subject to Section 1.4(c)) pursuant to a Project Budget
that has been submitted to the SPV and the Lender in accordance
with the foregoing clause (iii) (unless any such expenditure is
to be made at a time when a Project Budget for such time has not
been approved, in which event such expenditure shall be made
pursuant to the Extended Budget applicable to such time, if any).
(v) No later than 60 days after the end of each Contract
Year, the Operator shall, in compliance with accepted financial
practice and Prudent
<PAGE> -4-<PAGE>
Industry Practice, prepare and submit to the SPV, the Lender and
the Independent Engineer an item by item reconciliation (rounded
to the nearest $1,000) of the previous Contract Year's Project
Budget and the actual Operation and Maintenance Costs for such
Contract Year, together with an explanation, in reasonable
detail, of the principal causes of any variances of more than
$50,000 from the Project Budget.
(b) Not later than June 1 of each year, the Operator shall
prepare and submit to the SPV, the Independent Engineer, the Existing
Creditors, the Disbursement Agent, the Lender and the Owner
(i) a proposed line item budget (as finally approved as
provided in this paragraph (b), the "Extended Budget") setting
forth by category the Operator's projections of the cost of
operating the Project during the 12 consecutive months ending on
June 30 of the following year, on a month by month basis,
(ii) detailed backup information sufficient to permit an
informed review of such proposed Extended Budget, and
(iii) the levels of projected lime purchases by OPCO
during the twelve month period beginning on July 1 of such year,
based upon:
(A) with respect to the first six months of such
period, the levels of projected lime purchases provided to the
SPV by OPCO pursuant to Article III (c) of the OPCO Agreement,
and
(B) with respect to the final six months of such
period the Operator's best estimate of OPCO purchases
based upon all of the facts known to the Operator at
such time.
Each Extended Budget shall contain a separate line item for the costs of
coal/petroleum coke, electricity, insurance, property taxes, labor,
scheduled recurring capital expenses, and Other Costs based upon the
projected levels of lime purchases provided to the SPV by OPCO pursuant to
Article III(c) of the OPCO Agreement, all as more fully set forth on
Schedule 2 hereto. Within 45 days after its receipt of a proposed
Extended Budget for any period, the SPV and the Lender shall give written
notice to the Operator that such proposed Extended Budget has been
approved or disapproved by the SPV and the Lender. If such proposed
Extended Budget shall be disapproved, the Operator shall in good faith
propose modifications thereto until an Extended Budget, as so modified,
shall be approved (at which time copies of such approved Extended Budget
shall be delivered to the SPV, the Independent Engineer, the Existing
Creditors, the Disbursement Agent, the Lender and the Owner). If the
Operator, the SPV and the Lender cannot agree on an Extended Budget for
any period, such disagreement shall be resolved in accordance with the
procedures set forth in Section 5.2. The Extended Budget shall only be
used for purposes of determining deposit and disbursement obligations
under Section 2.4 of the Deposit and Disbursement Agreement and for the
purposes set forth in Section 1.4(a)(iv) and Section 1.4(c).
<PAGE> -5-<PAGE>
(c) The Operator shall make all expenditures of Operation and
Maintenance Costs, consistent with Prudent Industry Practice and the
then current Project Budget, in the normal course of business and as
necessary or advisable for the performance of the Operating Work;
provided, however, that:
(i) subject to clauses (ii) and (iii) below, if such
expenditures by the Operator in any Contract Year would, when
taken together with all other such expenditures for such Contract
Year, exceed any applicable line item amount in the Project
Budget for such Contract Year (or the relevant Extended Budget,
if applicable), the Operator shall give the SPV, the Lender and
the Independent Engineer prompt notice of such fact;
(ii) subject to clause (iii) below, the Operator may not,
without the prior written consent of the SPV and the Lender, make
any expenditure (A) in any month, if such expenditure together
with all other similar expenditures in such month would exceed
the line item amount applicable to such expenditure in the
Project Budget (or the Extended Budget, if applicable) for such
month by 10% or more, or (B) in any Contract Year, if such
expenditure together with all other expenditures made in such
Contract Year at or prior to such time would exceed by 5% or more
the total expenditures in the Project Budget (or the Extended
Budget, if applicable) for such portion of such Contract Year;
(iii) the restrictions set forth in clauses (i) and (ii) above
shall not apply if (A) an Operating Emergency shall have
occurred; (B) the Operator shall have given the SPV and the
Independent Engineer an Emergency Notice within 48 hours after
the occurrence of such Operating Emergency; and (C) such
expenditures are necessary, consistent with Prudent Industry
Practice, within such 48-hour period to avoid or alleviate such
Operating Emergency; no such expenditures shall be made after
such 48-hour period without the prior written consent of the SPV;
(iv) the restrictions set forth in clause (ii) above shall not
apply to the line item amounts for coal/petroleum coke,
electricity and Other Costs if the number of tons of processed
lime produced by the Project in any month or in any Contract Year
is more than the number of tons projected by the Project Budget
or the Extended Budget, as the case may be, for such period;
provided, however, that any increase in any such line item
amount, as set forth in the Project Budget or the Extended
Budget, as the case may be, shall not exceed a percentage of such
line item amount equal to the percentage increase in the number
of tons of lime produced by the Project during such month or
Contract Year, as the case may be, over the number of tons
projected to be so produced during such period in the Project
Budget or the Extended Budget, as the case may be; and
(v) the restriction set forth in clause (ii)(A) above shall not
apply to any scheduled recurring capital expenditure.
All such expenditures incurred by the Operator in compliance with the
terms of this Agreement (including, without limitation, the preceding
proviso), and all expenditures for
<PAGE> -6-<PAGE>
material substitutions, replacements or repairs of parts or equipment
incorporated into the Project with the prior written consent of the
SPV, shall be binding upon the SPV and shall constitute Operation and
Maintenance Costs for all purposes hereunder. Expenditures (that are
made with the prior written consent of the SPV) in respect of Capital
Additions or Modifications, or adjustments, alterations or other
physical changes to the Project, shall not constitute Operation and
Maintenance Costs for any purpose hereunder unless otherwise agreed to
in writing by the SPV. Notwithstanding the foregoing, the scheduled
recurring capital expenditures referred to on Schedule 2 hereto shall
constitute Operation and Maintenance Costs.
(d) All payments of Operation and Maintenance Costs shall be
made in accordance with Section 2.2(b)(ii)(A) of the Deposit and
Disbursement Agreement. In the event that the Disbursement Agent fails
to make all or a portion of the disbursement required to be made by it
pursuant to Section 2.2(b)(ii)(A) of the Deposit and Disbursement
Agreement, or the amount of such disbursement is insufficient to pay
all Operation and Maintenance Costs then due and payable and the SPV
(or any Person on behalf of the SPV, as provided in the Transaction
Documents) has not paid to the Disbursement Agent or the Operator an
amount equal to such shortfall, then the Operator shall advance the
amount of such disbursement or portion thereof (including all amounts
due to the Owner hereunder) and shall continue to perform the Operating
Work. If the Disbursement Agent has not fully repaid the amounts owing
to the Operator under this Section 1.4(d) with respect to an advance
under this Section 1.4(d) by the close of business on the first
Business Day after the 60th day following the date on which the advance
was made, the Operator shall not have any further obligation to advance
additional funds pursuant to this Section 1.4(d) or to continue to
perform the Operating Work and the SPV shall remain obligated to repay
such advances; provided, however, that the Operator shall not institute
legal proceedings to recover such advances from the SPV, except to the
extent provided in Section 5.10, unless and until the Secured
Obligations have been paid in full. Except as provided in this Section
1.4(d), the Operator shall not be required to advance funds to the SPV
or the Owner in order to comply with its obligations under this
Agreement.
1.5 Outages. At the same time the Project Budget is delivered
pursuant to Section 1.4(a), the Operator shall deliver to the SPV and the
Independent Engineer a schedule (the "Outage Schedule") of all planned
outages (including those for inspection and ordinary maintenance of the
Project) for such Contract Year. The Operator shall, to the extent
practicable, adhere to such Outage Schedule during such Contract Year.
The scheduling and carrying out of such outages shall be (i) to the extent
consistent with clauses (iii) and (iv) below, made on a nondiscriminatory
basis with respect to the Black River Facility, (ii) to the extent
consistent with clauses (iii) and (iv) below, coordinated with the
Operator's other plant maintenance outages in accordance with Prudent
Industry Practice, (iii) coordinated with OPCO and any other purchasers of
processed lime from the SPV to minimize any interruption in the supply of
processed lime that is to be delivered to OPCO pursuant to the OPCO
Agreement, to the purchasers under Economically Similar Contracts, and to
the purchasers under the other lime supply contracts to which the SPV may,
from time to time, be a party (with the consent of the Existing Creditors)
and (iv) made in accordance with Prudent Industry Practice to minimize
both interruptions to the operation of the Project and the Black River
Facility and any loss of profits as a result of the timing of such
interruptions. In the event of an Operating Emergency or any other
emergency
<PAGE> -7-<PAGE>
outage, forced outage, or reduction in production below a Total Net
Capability of at least 650,000 tons per annum for any reason, the Operator
shall schedule and perform all required repairs and replacements, and
restore production to a Total Net Capability of at least 650,000 tons per
annum, in an expeditious manner in accordance with Prudent Industry
Practice and the other requirements of this Agreement.
1.6 Books and Records; Reports.
(a) The Operator shall keep all necessary books of record, books of
account and memoranda of all transactions referred to in this Article 1
involving the Project, including, without limitation, of the services
provided and the funds received and expended by the Operator in the
course of performing the Operating Work. Such books of record, books
of account and memoranda shall be kept by the Operator in such manner
as to conform to GAAP and to all Applicable Laws. The Operator shall,
if it owns and/or is operating or is otherwise involved with the Black
River Facility, keep separate books of record, books of account and
memoranda of transactions for each of the Project and the Black River
Facility.
(b) The Operator shall prepare and, to the extent permitted by
Applicable Law, file in a timely fashion; or, if the SPV shall be
required to so file, the Operator shall prepare and deliver to the SPV
within a reasonable time prior to the date for filing, all reports with
respect to the Project or the Black River Facility, or the condition or
operation thereof, that shall be required to be filed with any
Governmental Authority.
(c) The Operator shall, not later than 20 days after the end of each
calendar month, prepare and deliver a report to the SPV (with copies to
the Lender and the Independent Engineer) setting forth the monthly and
annual cumulative output, the production levels, the variance from
forecast, and a description of outages and operating hours for the
Project. In addition, the Operator shall prepare and deliver such
other reports as the SPV or the Lender may reasonably request.
(d) The Operator shall, not later than 60 days after the end of each
Project Quarter, prepare and deliver a report to the SPV (with copies
to the Lender and the Independent Engineer) summarizing the operating
and maintenance costs and revenues for such Project Quarter, which
report shall provide a breakdown of Operation and Maintenance Costs.
1.7 Inspection Rights. Upon reasonable notice to the Operator, during
normal business hours, the SPV, the Lender, the Existing Creditors and
their respective representatives shall, subject to customary
confidentiality and safety procedures, have (i) access to the Project and
the Black River Facility for purposes of the inspection thereof and (ii)
the right to inspect the books of record, books of account and memoranda
of the Operator relating to the Project and the Black River Facility, to
make copies and extracts therefrom (other than copies of and extracts from
proprietary data and information) and to discuss with the executive
officers of the Operator the finances and accounts relating to the Project
and the Black River Facility and, with respect to the operations of the
Project, the senior technical employees of the Operator. The Operator
will cooperate with such Persons in connection with any such inspection or
discussion. Such inspection and copying shall be solely at the expense of
the Person requesting the same, unless
<PAGE> -8-<PAGE>
done in connection with the removal of the Operator (in which case such
inspection shall be at the sole expense of the Operator).
1.8 Annual Audit. The books, records and accounts of Operation and
Maintenance Costs maintained by the Operator pursuant to Section 1.6 shall
be subject to an audit as of the end of and for each Contract Year by KPMG
Peat Marwick or another firm of nationally recognized independent public
accountants selected by the Operator. The SPV, the Lender and the
Existing Creditors, and any of their respective representatives, shall be
permitted to check and review all accounting records relating to the
operation of the Project and the Black River Facility and to observe the
procedures followed by the Operator's accountants. The report of such
firm of independent public accountants for such Contract Year shall be
submitted to the Operator, with a copy to the SPV, each Existing Creditor
and the Lender within 90 days after the end of such Contract Year. The
cost of such annual audit shall constitute an Operation and Maintenance
Cost.
1.9 Uncontrollable Forces. The Operator shall not be considered to be
in default in the performance of any of its obligations under this Article
1, other than obligations to pay money, if (a) such failure of performance
shall be due to Uncontrollable Forces and (b) the obligations of the
"Producer" are similarly excused under the OPCO Agreement as well as under
any Economically Similar Contract and each and every other contract to
supply processed lime to which the SPV is then a party; provided, that the
Operator agrees that if such Uncontrollable Forces arise as a result of
the unavailability of the Operator's personnel, the SPV may hire such
personnel as may be necessary to permit operation and maintenance of the
Project to the extent consistent with applicable law. If the Operator is
rendered unable to fulfill any obligation by reason of Uncontrollable
Forces, it shall give prompt notice of such fact to the SPV (with copies
to the Lender and the Independent Engineer) and shall exercise reasonable
diligence to remove said inability with all reasonable dispatch. Nothing
contained herein shall be construed to require a party to settle any
strike or labor dispute in which it may be involved.
1.10 Removal of Operator.
(a) So long as any of the Secured Obligations shall remain
outstanding, Lime shall be subject to removal as Operator by the Lender
or the Collateral Agent if:
(i) 45 days' prior written notice of such removal has been
provided to Lime and the Existing Creditors' Agent by the Lender
or the Collateral Agent, and
(ii) (A) either
(1) Lime, as Operator, shall have failed to perform or
observe any covenants or agreements to be performed or
observed by it, as Operator, under Section 1.3 hereof;
(2) Lime, as Owner, shall have failed to perform or
observe any covenant or agreement to be performed or
observed by it under Section 2.1, Section 2.2, Section
2.5, Section 3.1(b), Section 3.1(c) or Section 3.2, and
such failure shall have continued, after
<PAGE> -9-<PAGE>
Lime has been given a notice specifying such failure
and requiring such failure to be remedied, for a period
of 10 days;
(3) an Event of Default under the Note Purchase
Agreement (as in effect on the Initial Funding Date)
shall exist; or
(4)(I) Lime shall have failed to perform or observe
any other covenant or agreement to be performed or
observed by it, as either Owner or Operator, under this
Agreement or in any capacity under any other
Transaction Document to which it is a party, and the
failure referred to in this subclause (4)(I) has had,
or could reasonably be expected to have, a material
adverse effect on the Project, or (II) such failure
shall have continued, after Lime has been given a
notice specifying such failure and requiring it to be
remedied, for a period of 30 days and
(B) any applicable period for the cure of any failure
to perform or observe, or any applicable period for the cure of
any Event of Default referred to in the foregoing clause (A)
shall have expired.
(b) So long as any of the Existing Creditor Indebtedness shall
remain outstanding, the Existing Creditors shall have the right, but
not the obligation, to replace Lime as the operator of the Black River
Facility if the Existing Creditors or the Existing Creditors' Agent
(acting on behalf of the Existing Creditors) shall have conveyed,
assigned or sold the same to an Acceptable Transferee. If the Existing
Creditors have foreclosed on the Black River Facility and such
Acceptable Transferee intends to operate and maintain the Black River
Facility itself, the Existing Creditors may request that the Lender or
the Collateral Agent remove Lime as the Operator and appoint such
Acceptable Transferee in lieu thereof, and, if the Independent Engineer
has confirmed to the Lender in writing that such Acceptable Transferee
has the experience, personnel and expertise necessary to operate the
Project, the Lender or the Collateral Agent shall effect such
replacement.
(c) If at any time Lime has been replaced as Operator by the Lender
or the Collateral Agent, the Existing Creditors shall have the right,
but not the obligation, to replace Lime as the operator of the Black
River Facility.
(d) If Lime has been replaced as Operator, any Replacement Operator
(other than Lime if Lime shall have been reinstated as Operator) shall
be subject to removal at any time, with or without cause, upon 3
Business Days' prior written notice (i) from the Lender or the
Collateral Agent or (ii) by the Existing Creditors pursuant to Section
1.10(b).
(e) In the event of the removal of any Operator, such removed
Operator shall
(i) cooperate and use its reasonable efforts to transfer (to
the extent transferable) any Governmental Approvals that it may
have which are required or useful in the operation of the Project
to any Replacement Operator or the SPV, and
<PAGE> -10-<PAGE>
(ii) immediately thereafter deliver to any Replacement
Operator or to the SPV all books and records, equipment,
operating manuals, plans and specifications, tools, spare parts
and other materials used by such removed Operator in connection
with the Operating Work;
provided, however, that such removed Operator shall not be obliged to
transfer any such Governmental Approvals or equipment, operating
manuals, plans and specifications, tools, spare parts or other
materials if (A) such items are required or used by Lime in connection
with the operation of the Black River Facility, and (B) the cost of
obtaining same was not paid with funds provided by the SPV.
With regard to Governmental Approvals for which the cost was not paid by
SPV, but which are required or useful in the operation of the Project by
any Replacement Operator or the SPV, such removed Operator:
(A) shall not interfere with or lodge objection to
any efforts by Replacement Operator to obtain its own
Governmental Approvals for activities conducted on the
Site,
(B) upon request, shall consent to and cooperate in
the deletion, division and/or transfer to Replacement
Operator of those portions of the Governmental
Approvals governing those portions of the Site and
activities that cannot or will not, by virtue of
removal of Operator, be used by it in connection with
the operation of the Black River Facility, and
(C) with regard to Governmental Approvals for which
Replacement Operator cannot obtain new or transferred
Governmental Approvals without delay or unreasonable interference
with the continued operation of the Project, shall consent to and
not interfere with Replacement Operator's use of the then-
existing Governmental Approvals for the activities conducted on
the Site.
(f) Any Person that shall become the Operator or a Replacement
Operator hereunder shall have all of the rights, duties and obligations
of the Operator as specified herein.
1.11 Appointment of a New Operator.
(a) In connection with any removal of the Operator pursuant to
Section 1.10(a), the Lender shall, subject to (1) approval by the
Independent Engineer, (2) the provisions of Section 1.10(a) and (b) and
(3) the following provisions of this Section 1.11(a), appoint a new
Operator (the "Replacement Operator") to assume the duties and
obligations of the Operator under this Agreement. Upon such
appointment, all references to the Operator herein shall be deemed to
be references to the Replacement Operator. During the 45-day period
referred to in Section 1.10(a)(i), the Lender and the Existing
Creditors shall attempt to reach mutual agreement as to a Replacement
Operator to be appointed hereunder. If the Lender and the Existing
Creditors agree to an appropriate Replacement Operator
<PAGE> -11-<PAGE>
during such 45-day period, then the Lender shall appoint such Person as
Replacement Operator. If the Lender and the Existing Creditors are
unable to agree as to an appropriate Replacement Operator during such
45-day period, then the Lender may, subject to Section 1.10(b), appoint
a Replacement Operator without the Existing Creditors' consent;
(b) Any Replacement Operator shall have an obligation to negotiate
in good faith with the Existing Creditors to enter into an operation
and maintenance agreement with respect to the Black River Facility, but
neither such negotiation nor the execution of any such agreement shall
be a condition to any Replacement Operator acting hereunder.
1.12 Indemnification.
(a) The Operator shall defend, indemnify and hold harmless each
Indemnitee and each Existing Creditor from and against any and all
Expenses incurred by or asserted against any Indemnitee or Existing
Creditor as a result of, arising out of, related to or in connection
with the Operator's, or any of its subcontractors', performance of the
Operator's obligations hereunder, including, without limitation, claims
(i) for injury to or death of persons and loss of or damage to
property (including, without limitation, the Project);
(ii) on account of any violation of any Applicable Law to be
complied with by the Operator or any contractor or subcontractor
hereunder; or
(iii) in respect of any taxes imposed on or attributable to the
income, property or activities of the Operator or demands by or
liens of suppliers or subcontractors for nonpayment of amounts
due as a result of furnishing work or materials to the Operator
in connection with the Project;
provided, however, that the Operator shall not defend, indemnify or
hold harmless any Indemnitee or Existing Creditor from and against, and
no Indemnitee or Existing Creditor shall be exculpated from, any
Expense to the extent (A) caused by or arising from the gross
negligence or willful misconduct of such Indemnitee or Existing
Creditor or (B)(1) consisting of any Expense provided for in any
Project Budget or Extended Budget, or otherwise expressly provided for
in this Agreement, including Schedule 2 hereto, or (2) consisting of
any principal of, or interest or Make-Whole Amount in respect of, the
Notes.
(b) The procedures for such indemnification shall be governed by
Section 17.2 of the Note Purchase Agreement, which Section is
incorporated herein, mutatis mutandis, as if fully set forth herein.
(c) Notwithstanding any other provision of this Agreement, the
Operator's obligations under this Section 1.12 are intended to, and
shall, survive termination of this Agreement.
<PAGE> -12-<PAGE>
(d) Notwithstanding anything to the contrary in this Section 1.12,
the Operator shall not be liable to indemnify any Indemnitee or
Existing Creditor for any Expenses representing any indirect, special
or consequential damages.
ARTICLE 2. OWNER'S SUPPLY OBLIGATIONS
2.1 Limestone Supply. Subject to the requirements of this Article 2,
the Owner hereby agrees to supply and sell to the Operator, for the
account of the SPV, such quantities of unprocessed limestone as shall be
necessary or advisable for the SPV to meet the requirements of the SPV for
the continuous operation of the Project at a Total Net Capability of at
least 650,000 tons per annum. Such unprocessed limestone supplied by the
Owner hereunder shall be suitable to meet the technical and other
specifications for processed lime set forth in the OPCO Agreement and all
such other processed lime supply contracts the SPV may, from time to time,
enter into in compliance with the Transaction Documents. The Owner shall
cause such unprocessed limestone to be tested in accordance with
reasonable and customary tests established by the Independent Engineer, in
accordance with Prudent Industry Practice, and shall maintain records of
the results of all such tests. Title to the unprocessed limestone sold to
the SPV pursuant to this Section 2.1 shall pass to the SPV at such time as
the unprocessed limestone is placed in the Project Kilns. Risk of loss
shall follow title.
2.2 Additional Supply Obligations of the Owner.
(a) The Owner further agrees to supply and sell to the Operator, for
the account of the SPV, all supplies, goods, materials and other
products, items and services set forth in Schedule 3 and such other
goods and services as may be required by the Operator in connection
with the Operating Work (collectively, together with the unprocessed
limestone, the "Supplies"). The cost of Supplies provided by the Owner
shall be determined in accordance with Schedule 2 hereto. Each of the
parties hereto acknowledges and agrees that the Owner, in performing
its duties hereunder, is acting as an independent contractor.
(b) The Owner may enter into such agreements or subcontracts (and
modifications thereof) and take such other action as the Owner, in
compliance with Prudent Industry Practice, deems necessary or
appropriate, in its judgment, or as may be required by Applicable Law,
to comply with the provisions of this Agreement. Any such agreement or
subcontract (or modification thereof), except for any collective
bargaining agreement, that provides for the payment of more than
$100,000 by any party thereto, or shall refer to the SPV, the Lender or
the Collateral Agent, shall expressly provide that it does not impose
on the SPV or any other party to the Transaction Documents (other than
the Owner) any obligation, liability or duty to a contractor or
subcontractor or create any contractual relationship between a
contractor or subcontractor and the SPV or any other party to the
Transaction Documents (other than the Owner).
(c) If the Owner shall at any time breach its obligation to supply
unprocessed limestone or any other Supplies required by this Article 2
(whether by anticipatory breach or otherwise), the SPV may take
commercially reasonable steps to obtain as promptly as possible a
suitable replacement for such limestone or other supplies; and the
Owner shall be liable to the SPV for the excess of the price so paid by
the SPV for such limestone
<PAGE> -13-<PAGE>
or other Supplies (including the cost of labor attributable to mining
and the cost of such Supplies) over the price which SPV would have been
liable to pay therefor hereunder had the Owner not breached its supply
obligation, plus any expenses incidental to obtaining such suitable
replacement or other supplies.
(d) Without limiting the generality of the foregoing, the Owner
shall obtain and maintain at all times for the benefit of the SPV or
its designee and the Project all material Governmental Approvals
relating to (i) the ownership, construction, operation and maintenance
of the Project in accordance with Applicable Law, and (ii) which can
not be, or are not, issued in the name of the SPV. The Owner shall
from time to time take any action as shall be necessary or desirable to
have issued in the name of the SPV any such material Governmental
Approval that must, by its nature, be issued in the name of the SPV in
accordance with Applicable Law.
(e) If OPCO becomes entitled to receive deliveries of processed lime
under the OPCO Agreement prior to the Substantial Completion Date,
promptly upon notice thereof from the SPV or the Operator, Lime shall
cause such deliveries to be made to OPCO on behalf of the SPV, from
lime processed at the Black River Processing Complex or the Maysville
Processing Complex, in strict compliance with the OPCO Agreement. In
no event shall Lime be entitled to receive any amounts payable by OPCO
to the SPV under the OPCO Agreement in respect of such lime deliveries
except as provided in Section 3.4 hereof.
2.3 Books of Record; Reports. The Owner shall keep all necessary
books of record, books of account and memoranda of all transactions
referred to in this Article 2 and in Article 3, including, without
limitation, records as to the Supplies provided and the funds received and
expended by the Owner in the performance of its obligations hereunder.
Such books of record, books of account and memoranda shall be kept by the
Owner in such manner as to conform to GAAP and all Applicable Laws. The
Owner shall keep separate books of record, books of account and memoranda
of transactions for each of the Project and the Black River Facility.
2.4 Access to Books and Records. Upon reasonable notice to the Owner,
during normal business hours, the SPV, the Existing Creditors, the Lender
and their respective representatives shall, subject to customary
confidentiality and safety procedures, have (i) access to the Project and
the Black River Facility for purposes of the inspection thereof and (ii)
the right to inspect the books of record, books of account and memoranda
of the Owner relating to the Project or the Black River Facility, to make
copies and extracts therefrom (other than copies of and extracts from
proprietary data and information) and to discuss same with the executive
officers of the Owner. The Owner will cooperate with such Persons in
connection with any such inspection or discussion. Such inspection and
copying shall be solely at the risk and expense of the Person requesting
the same.
2.5 Payment of Supply Costs. The cost of Supplies under Sections 2.1
and 2.2 hereof shall be determined in accordance with Schedule 2 and shall
constitute Operation and Maintenance Costs. All payments of supply costs
shall be made by the Operator pursuant to Article 1 hereof. In the event
that the Operator fails to make all or a portion of the payments to the
Owner required to be made by the Operator hereunder, or the amount of such
disbursement is insufficient to pay all supply costs then due and payable,
then the Owner shall advance the
<PAGE> -14-<PAGE>
amount of such disbursement or portion thereof and shall continue to
perform its obligations under this Article 2. If the Operator has not
fully repaid the amounts owing to the Owner under this Section 2.5 with
respect to an advance under this Section 2.5 by the close of business on
the first Business Day after the 60th day following the date on which the
advance was made, the Owner shall not have any further obligation to
advance additional funds pursuant to this Section 2.5 or to continue to
perform its obligations under this Article 2, and the Operator shall
remain obligated to repay such advances. Except as provided in this
Section 2.5, the Owner shall not be required to advance its own funds to
the Operator in order to comply with its obligations under this Agreement.
2.6 Annual Audit. The books, records and accounts of supply costs
maintained by the Owner pursuant to Section 2.3 shall be subject to an
audit as of the end of and for each Contract Year by KPMG Peat Marwick or
another firm of nationally recognized independent public accountants
selected by the Operator. The SPV, the Lender and the Existing Creditors,
and any of their respective representatives, shall be permitted to check
and review all accounting records relating to the Project or the Black
River Facility and to observe the procedures followed by the Owner's
accountants. The report of such firm of independent public accountants
shall be submitted to the Owner, with a copy to the Operator, the SPV,
each Existing Creditor and the Lender within 90 days after the end of such
Contract Year. The cost of such annual audits shall constitute Operation
and Maintenance Costs.
2.7 Uncontrollable Forces. The Owner shall not be considered to be in
default in the performance of any of its obligations under this Article 2,
other than obligations to pay money, if (a) such failure of performance
shall be due to Uncontrollable Forces and (b) the obligations of the
"Producer" are similarly excused under the OPCO Agreement as well as under
each and every Economically Similar Contract. If the Owner is rendered
unable to perform any obligation by reason of Uncontrollable Forces, it
shall, upon acquiring knowledge of the same, give prompt notice of such
fact to the other parties hereto and shall exercise reasonable diligence
to remove said inability with all reasonable dispatch. Lime covenants
that, to the extent that SPV is unable to produce processed lime at the
Project required to service the OPCO Agreement as the result of an
Operating Emergency or Uncontrollable Forces (or any combination of the
foregoing), Lime shall comply with the OPCO Agreement (including, without
limitation, Articles 1(a) and (b) thereof).
2.8 Most Favored Nation. Neither Lime, nor any party that would be a
successor to or assign of Lime for purposes of the OPCO Agreement, or that
would otherwise be bound by the OPCO Agreement, shall, without the consent
of the Holders, take any action which would require an adjustment to the
purchase price to OPCO under the OPCO Agreement in accordance with Article
XXII of the OPCO Agreement
ARTICLE 3. COMMON FACILITIES AND TOLLING
3.1 Tolling and Use of Common Facilities.
(a) The SPV hereby covenants that, if the Owner has made all
payments due from it hereunder (including, without limitation, payments
due under Section 3.2) and the Owner is otherwise in full compliance
with its obligations under Article 2 and Section 5.6(c) hereof and
under the Easement Agreement, then the Owner shall, on and after the
<PAGE> -15-<PAGE>
Operation Commencement Date, have the right, subject to Section 3.1(b), to
deliver unprocessed limestone to the Project for processing by the
Operator. Subject to the provisions hereof (including, without
limitation, Sections 1.5 and 3.1(b)), the Operator shall process through
the Project any and all unprocessed limestone delivered by the Owner
pursuant to the preceding sentence.
(b) The parties hereto agree that processed lime produced by the
Project shall be utilized to satisfy lime supply contracts in the
following order of priority: first, the OPCO Agreement or any
Economically Similar Contracts; second, if and to the extent that the
Owner has made all payments due hereunder (including under Section 3.2)
and the Owner is otherwise in full compliance with its obligations
under Article 2 hereof and Section 5.6(c) and under the Easement
Agreement, the existing lime supply contracts of Lime set forth on
Schedule 4, as such contracts may from time to time be amended,
supplemented, replaced or otherwise modified in accordance with their
respective terms, and any other lime supply contracts of Lime entered
into after the date hereof; and third, other lime supply contracts, if
any, entered into by the SPV with the consent of the Existing
Creditors.
(c) (i) The Owner covenants that the Operator and the SPV shall, on
and after the Operation Commencement Date, and for so long as the SPV
shall be in compliance with this Section 3.1, have the right to use the
Black River Common Facilities in connection with the exercise of the
rights and the discharge of the duties of the Operator and the SPV
under this Agreement and as contemplated by the Easement Agreement.
(ii) The Operator and the SPV covenant that the Owner shall, on
and after the Operation Commencement Date, and for so long as the Owner
shall be in compliance with its obligations under Article 2, have the
right to use the Project-Owned Common Facilities in connection with the
exercise of the rights and the discharge of the duties of the Owner under
this Agreement and as contemplated by the Easement Agreement.
(iii) The Operator shall operate the Project and the Black River
Processing Complex for the benefit of the Owner and the SPV in
accordance with this Agreement and the Easement Agreement. Each of the
Operator and the Owner covenants that, during the term of this
Agreement, it shall operate, maintain, rebuild and repair the Project
in compliance with the requirements imposed upon the SPV by Section 9
of the Note Purchase Agreement to the extent applicable to such
operation, maintenance, rebuilding or repair (other than Sections 9.4,
9.12 to 9.16, inclusive, 9.18 and 9.19), which Section to the extent so
applicable (other than such specified sections) is incorporated herein
by reference, mutatis mutandis.
3.2 Tolling Payments and Capacity Payments.
(a) No later than 30 days after the end of each calendar month
following the Substantial Completion Date, the Owner shall
<PAGE> -16-<PAGE>
(i) make a payment (each, a "Tolling Payment") to the
Disbursement Agent, in an amount equal to 50% of the result of
(A) the Scheduled Variable Cost Savings Per Ton multiplied by (y)
the number of Non-OPCO Tons produced by the Project during such
month; and
(ii) make a payment to the Disbursement Agent in an amount
equal to the result of (A) the Operation and Maintenance Costs of
the Project during such month (other than Operation and
Maintenance Costs paid with the written consent of the SPV that
relate to Capital Additions or Modifications, adjustments,
alterations, and other physical changes to the Project and
material substitutions, replacements or repairs of parts or
equipment incorporated into the Project) multiplied by (B) a
fraction the numerator of which is the number of Non-OPCO Tons
produced by the Project during such month and the denominator of
which is the total number of tons of processed lime produced by
the Project during such month.
(b) (i) Subject to Section 3.2(b)(ii) below, no later than 30
days after the end of each Project Quarter, Lime shall make a
capacity payment (each, a "Capacity Payment") to the Disbursement
Agent in an amount equal to one half of
(A) the product obtained by multiplying (1) 1.3 by
(2) the amount of Capacity Payment Debt Service payable
with respect to such Project Quarter and the next
succeeding Project Quarter, minus
(B) the Deemed Cash Flow attributable to the sum of
(1) the actual number of tons of processed lime
purchased by OPCO pursuant to the OPCO Agreement or
purchased pursuant to Economically Similar Contracts
during such Project Quarter plus (2) the number of tons
of processed lime projected to be purchased by OPCO
during such next succeeding Project Quarter, as set
forth in the letter delivered by OPCO pursuant to
Article III(c) of the OPCO Agreement (provided, that in
no event shall such sum be less than 150,000), minus
(C) the sum of the Tolling Payments made by the Owner
in respect of such Project Quarter and the immediately
preceding Project Quarter;
provided, however, that the Capacity Payment shall not be less
than zero.
(ii) Notwithstanding Section 3.2(b)(i), the aggregate amount
of Capacity Payments payable by Lime with respect to any Contract
Year shall not exceed the lesser of (A) the sum of the payments
due with respect to Project Quarters during such Contract Year
pursuant to Section 3.2(b)(i); and (B) the Maximum Capacity
Payment with respect to such Contract Year.
(iii) The Maximum Capacity Payment with respect to any
Contract Year shall be an amount equal to (A) the product
obtained by multiplying (1) 1.3 and (2) the amount of Capacity
Payment Debt Service payable with respect to such Contract Year,
minus (B) the Deemed Cash Flow attributable to 300,000 tons of
<PAGE> -17-<PAGE>
processed lime; provided, however, that, so long as Lime is the
Owner and owns and operates the Maysville Processing Complex, in
the event that an aggregate of less than 190,000 tons of Non-OPCO
Lime under Compatible Lime Supply Agreements are produced at the
Project, the Black River Processing Complex and the Maysville
Processing Complex during a Contract Year, the Maximum Capacity
Payment for such Contract Year shall be reduced by an amount
equal to the product of (x) the Scheduled Variable Cost Savings
Per Ton and (y) the excess of (I) 190,000 over (II) the aggregate
number of tons (but not less than 60,000 in any event) of
Non-OPCO Lime under Compatible Lime Supply Agreements produced at
the Project, the Black River Processing Complex and the Maysville
Processing Complex during such Contract Year; and provided
further, that, so long as Lime is the Owner and owns and operates
the Maysville Processing Complex, in the event that an aggregate
of less than 60,000 tons of Non-OPCO Lime under Compatible Lime
Supply Agreements are produced at the Project, the Black River
Processing Complex and the Maysville Processing Complex during a
Contract Year, the Maximum Capacity Payment for such Contract
Year shall be further reduced by an amount equal to the product
of (xx) the Project Profit Margin Per Ton and (yy) the excess of
(I) 60,000 over (II) the aggregate number of tons of Non-OPCO
Lime under Compatible Lime Supply Agreements produced at the
Project, the Black River Processing Complex and the Maysville
Processing Complex during such Contract Year.
(iv) Deemed Cash Flow for various levels of lime production
shall be as set forth on Schedule 5 hereto.
(v) The Capacity Payment payable with respect to any Project
Quarter shall be adjusted to reflect the limitations set forth in
Section 3.2(b)(ii) and Section 3.2(b)(iii); provided, however,
that if the Capacity Payments paid at any time during a Contract
Year equal the Maximum Capacity Payment with respect to such
Contract Year, no further Capacity Payments shall be payable with
respect to such Contract Year.
(c) Each payment made by the Owner or Lime under this Article 3
shall be accompanied by an Officer's Certificate of the Owner or Lime,
as the case may be, setting forth in detail the calculations of such
payment. Upon the request of the Lender or the SPV, the Owner or Lime,
as the case may be, shall provide such additional information and
details as such Person may reasonably request concerning the
calculation of such payment.
(d) If OPCO has claimed a credit under Article 3(e) and Article 3(f)
of the OPCO Agreement with respect to any processed lime sold to a
purchaser other than OPCO, Lime shall pay to the SPV, promptly upon
receipt thereof, all revenues arising from such sale. If such
processed lime was processed at the Black River Processing Complex or
the Maysville Processing Complex, the SPV will make the payment
provided for in Section 3.4 (ii) for the cost of production thereof,
and such cost of production shall constitute Operation and Maintenance
Costs for purposes of the Deposit and Disbursement Agreement.
<PAGE> -18-<PAGE>
3.3 Uncontrollable Forces. Neither the Owner nor the SPV shall be
considered to be in default in the performance of any of its obligations
under this Article 3, other than obligations to pay money, if such failure
of performance shall be due to Uncontrollable Forces; provided that if
such Uncontrollable Forces arise as a result of the unavailability of the
Owner's personnel, the SPV may hire such personnel, in accordance with
Applicable Law, as may be necessary to permit operation and maintenance of
the Project and the Black River Common Facilities. If either such party
is rendered unable to fulfill any obligation by reason of Uncontrollable
Forces, it shall, upon acquiring knowledge of the same, give prompt notice
of such fact to the other parties hereto and shall exercise reasonable
diligence to remove said inability with all reasonable dispatch.
3.4 Maysville and Black River Production. If the SPV is paid the
gross revenues arising from the sale of any quantity of processed lime
that was processed at the Black River Processing Complex or the Maysville
Processing Complex, including, without limitation, (i) lime sold to OPCO
pursuant to Section 2.2(e) or Section 2.7 hereof and (ii) processed lime
in respect of which OPCO has claimed a credit under Article 3(e) and
Article 3(f) of the OPCO Agreement, the SPV will, on the first and
fifteenth days of each month, pay to Lime for each ton of such processed
lime for which SPV has received such revenues, an amount equal to the
fixed and variable costs of producing such ton at the facility where such
production occurred.
3.5 Books and Records; Access. Lime shall keep all necessary books of
record, books of account and memoranda with respect to its Capacity
Payment obligation hereunder. Upon reasonable notice to Lime, during
normal business hours, the SPV, the Existing Creditors, the Lender and
their respective representatives shall, subject to customary
confidentiality and safety procedures, have the right to inspect such
books of record, books of account and memoranda, to make copies and
extracts therefrom (other than copies of and extracts from proprietary
data and information) and to discuss the same with Lime's executive
officers. Lime will cooperate with such Persons in connection with any
such inspection or discussion. Such inspection and copying shall be
solely at the risk and expense of the Person requesting the same.
ARTICLE 4. DEFINITIONS
As set forth in the preliminary statements, the capitalized terms shall
have the respective meanings set forth in Annex A to the Note Purchase
Agreement and the rules of usage set forth in said Annex A shall apply
hereto. In addition, the following terms shall have the following
meanings:
"Acceptable Transferee" shall mean a Person meeting the requirements of
clauses A through E of Section 5.6(c).
"Agreement, this" shall have the meaning ascribed thereto in the
introductory sentence hereof.
"Black River Facility" shall mean the limestone mines and lime
processing and production facilities of Lime at or adjacent to the Project
Land (other than the Project).
<PAGE> -19-<PAGE>
"Black River Processing Complex" shall mean the Black River Facility,
but excluding the limestone mines related thereto.
"Capacity Payment" shall have the meaning ascribed thereto in Section
3.2(b)(i) hereof.
"Capacity Payment Debt Service" shall mean, for any period, the actual
aggregate amount of all installments of principal and interest due with
respect to the Notes for such period, but in no event to exceed the
amounts set forth on Schedule II to the Deposit and Disbursement
Agreement, as in effect on the Initial Funding Date.
"Capital Additions or Modifications" shall mean any capital addition,
additions, alterations, improvements or modifications of or to the
Project, other than original, substitute or replacement parts incorporated
into the Project.
"Compatible Lime Supply Agreements" shall have the meaning set forth in
Section 3.3(ii)(d) of the Intercreditor Agreement.
"Draft Project Budget" shall have the meaning ascribed thereto in
Section 1.4(a)(i) hereof.
"Emergency Notice" shall have the meaning ascribed thereto in Section
1.3(a) hereof.
"Extended Budget" shall have the meaning ascribed thereto in Section
1.4(b) hereof.
"Maximum Capacity Payment" shall have the meaning ascribed thereto in
Section 3.2(b)(iii) hereof.
"Maysville Facility" shall mean the limestone mines and lime processing
and production facilities of Lime located in Maysville, Kentucky.
"Maysville Processing Complex" shall mean the Maysville Facility, but
excluding the limestone mines related thereto.
"Non-OPCO Tons" shall mean tons of lime processed by the Project for
any purchaser of processed lime other than (i) OPCO under the OPCO
Agreement, (ii) any purchaser under any Economically Similar Contract, and
(iii) any purchaser to the extent the tons of lime purchased by such
purchaser constitute Default Tonnage (as defined in the OPCO Agreement).
"O&M Procedures" shall have the meaning ascribed thereto in Paragraph
V(A) of Schedule 1 hereto.
"Operating Emergency" shall mean an event occurring at the Project
which poses actual or imminent risk of serious personal injury or serious
physical damage to the Project requiring immediate preventative or
remedial action by the Operator and for which advance approval of SPV, the
Lender and the Independent Engineer otherwise required under this
Agreement would be impossible or impractical and for which there was no
advance notice given to the Operator and the Owner of the need for such
action.
"Operating Work" shall have the meaning ascribed thereto in Section 1.2
hereof.
<PAGE> -20-<PAGE>
"Operations Manual" shall have the meaning ascribed thereto in
Paragraph V(A) of Schedule 1 hereof.
"Operation and Maintenance Costs" shall mean the costs, fees, expenses
and disbursements duly incurred by the Operator for, with respect to, or
in connection with Operating Work, to the extent described in Schedule 2
of this Agreement and otherwise in compliance with the terms and
conditions hereof, including, without limitation costs and expenses
incurred pursuant to Section 1.4(c)(iii).
"Operator" shall have the meaning ascribed thereto in Section 1.1
hereof.
"Outage Schedule" shall have the meaning ascribed thereto in Section
1.5 hereof.
"Owner" shall have the meaning ascribed thereto in paragraph 2 of the
Preliminary Statements hereof.
"Project Budget" shall have the meaning set forth in Section
1.4(a)(iii) hereof.
"Project Quarter" shall mean each of the 3-month periods, commencing at
12:00 a.m. on January 1, April 1, July 1, and October 1, except that the
first Project Quarter shall commence on the Operation Commencement Date
and the last Project Quarter shall end on the Ground Lease Expiration
Date.
"Replacement Operator" shall have the meaning ascribed thereto in
Section 1.11(a) hereof.
"Supplies" shall have the meaning ascribed thereto in Section 2.2(a)
hereof.
"Tolling Payment" shall have the meaning ascribed thereto in Section
3.2(a)(i) hereof.
"Uncontrollable Forces" shall mean any cause beyond the control of the
Person affected thereby that, by the exercise of reasonable diligence,
such party is unable to overcome, and shall include acts of God, fire,
flood, explosion, insurrection, riot, strike, sabotage, acts of the public
enemy, acts of civil or military authority, and laws, rules and
regulations of any Governmental Authority.
ARTICLE 5. MISCELLANEOUS
5.1 Change of Control. Lime hereby covenants and agrees that, so long
as any of the Secured Obligations are outstanding, it will continue to
own, legally and beneficially, all of the Class A Common Stock of the SPV
General Partner and all of the capital stock of the SPV Limited Partner,
and will cause the SPV General Partner and the SPV Limited Partner to own,
legally and beneficially, all of the partnership interests in the SPV.
5.2 Dispute Resolution. The parties hereto agree to make a diligent,
good faith attempt to resolve each and every claim, dispute, disagreement
or other matter in question (a "Controversy") between the parties that
arises with respect to the terms and conditions of this Agreement or with
respect to the performance by the parties of their respective obligations
under
<PAGE> -21-<PAGE>
this Agreement. If the representatives of the parties are unable to
resolve a Controversy informally within fifteen (15) days after notice
from one party to the other, such Controversy shall be submitted promptly
to the respective designated representative of each party. Such
designated representatives shall meet, in person or by telephone, not
later than seven (7) days after the date that such Controversy was
submitted to them and shall issue a written opinion with respect to the
Controversy within ten (10) days thereafter. In the event that the
designated representatives cannot resolve the Controversy, each of the
parties hereto shall have all of their respective rights and remedies
provided under the Transaction Documents and at law or equity. During the
pendency of any such Controversy, the parties shall continue to fulfill
their respective obligations under this Agreement.
5.3 Term of Agreement. This Agreement shall be effective when
executed and delivered by the parties hereto. This Agreement shall
terminate (except such obligations as are expressed as surviving such
termination) upon the final and indefeasible payment to the Lender of all
of the Secured Obligations.
5.4 Notices. All notices, demands, declarations, consents,
directions, approvals, instructions, requests and other communications
required or permitted by the terms hereof shall be in writing and shall be
given to any party hereto (a) in person or (b) by means of telecopy or
other wire transmission, confirmed by same day mailing by registered or
certified mail, or same day dispatch by overnight courier, in each case to
the telecopy number and address provided in Schedule 6 hereto or at such
other address as any party shall from time to time designate in writing to
the other party or parties hereto in accordance with said Schedule 6. Any
such communication shall become effective as to any party upon receipt
thereof by such party and acknowledgement by telecopy of receipt by such
party to the party sending any such communication.
In addition, wherever in this Agreement there is a requirement for
Lime, the Operator or the Owner to provide the SPV with any report,
budget, schedule or notice, Lime, the Operator or the Owner, as the case
may be, shall provide a duplicate copy thereof to the Collateral Agent at
the same time and in the same manner as such report or notice is provided
to the SPV.
5.5 Nature of Obligations. The duties, obligations and liabilities of
each of the parties hereunder are intended to be several and not joint (or
joint and several), and no party shall be jointly or severally liable for
the acts, omissions or obligations of another party. Nothing herein
contained shall be construed to create an association, joint venture or
partnership, or impose a partnership duty, obligation or liability on or
with regard to any of the parties. No party shall have the right or
authority to bind another party without its express written consent,
except as may be expressly provided in this Agreement.
5.6 Successors and Assigns. (a) This Agreement shall be binding upon
and inure to the benefit of each of the parties hereto and their
respective successors and permitted assigns.
(b) The parties hereto hereby consent to assignment of this Agreement
in whole or in part by the SPV to the Collateral Agent as security for the
Secured Obligations and by Lime to the Existing Creditors' Agent on behalf
of the Existing Creditors as security for the Existing Creditors
Indebtedness (and to any further assignment or assignments by the
Collateral Agent
<PAGE> -22-<PAGE>
and the Existing Creditors' Agent on behalf of the Existing Creditors in
connection with, or following, an exercise of remedies with respect to
such security). Neither the SPV nor Lime shall assign this Agreement
except as contemplated by the preceding sentence.
(c) Except in connection with an exercise of remedies by the Existing
Creditors, none of the Operator, the Owner or Lime, may assign any of its
rights or obligations under this Agreement to any other Person without the
prior written consent of the SPV. The Owner hereby covenants that it
shall not sell, assign, transfer or convey, or permit any such sale,
assignment, transfer or conveyance of, its right, title and interest in
and to the Black River Facility to any Person, unless such Person: (A)
acquires in such transaction the entire Black River Facility (including
the limestone mines); (B) has a tangible net worth of at least $50
million; (C) assumes all of the Owner's rights and obligations under
Article 2, Article 3 and Article 5 hereof (other than Section 3.2(b) and
Section 3.2(c), it being understood that the Owner, in such capacity, does
not have any obligation under Section 3.2(b) or with respect to delivery
of the Officer's Certificate to be delivered by Lime pursuant to Section
3.2(c)) pursuant to an instrument satisfactory in form and substance to
the SPV; (D) provides a favorable opinion of counsel (which counsel and
opinion shall be satisfactory to the SPV in all respects) as to the due
authorization, execution and delivery by such Person of such instrument
and as to the enforceability against such Person of this Agreement and
such instrument and as to such other matters as the SPV may reasonably
request; and (E) has the experience, personnel and expertise necessary to
perform as Owner hereunder in the written opinion of the Independent
Engineer (a Person meeting the requirements of clauses (A) through (E)
above shall be referred to herein as an "Acceptable Transferee").
(d) Without limiting any of the requirements contained herein, in the
event of a transfer of the Black River Facility to an Acceptable
Transferee, Lime shall cooperate and use its best efforts to transfer (to
the extent transferable without rendering void or voidable) any
Governmental Approvals that it may hold which are necessary or desirable
for the operation of the Black River Facility or the Project to the
successor Owner, and Lime shall promptly deliver to such successor Owner
all books, records, equipment, operating manuals, plans and
specifications, tools, spare parts and all other materials used by Lime in
its capacity as Operator or Owner hereunder, as the case may be.
5.7 Amendments. Neither this Agreement nor any of the terms hereof
may be terminated, amended, supplemented, waived or modified orally, but
only by an instrument in writing signed by the party against which the
enforcement of the termination, amendment, supplement, waiver or
modification is sought; provided, however, that it is understood and
agreed that the Operator and the SPV may amend Article 1 and the Schedules
hereto corresponding to such Article without the prior consent of the
Owner, and the Owner and the SPV may amend Articles 2 and 3 and the
Schedules hereto corresponding to such Articles without the prior consent
of the Operator; provided, further, that any such action shall be subject
to the provisions of Section 9.1 of the Intercreditor Agreement.
5.8 Consultations. Notwithstanding any other provision of this
Agreement, the Operator and the Owner will, upon reasonable prior notice,
consult with the SPV and its representatives and designees to review any
matter pertaining to their respective obligations hereunder.
<PAGE> -23-<PAGE>
5.9 Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
5.10 Set-off. Each of the SPV, the Owner and the Operator shall have
the right to set off any payments owing by it to either of the other two
such Persons hereunder against payments owing by the Person against which
such right of set-off is exercised.
5.11 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING ALL OTHER
CHOICE-OF-LAW AND CONFLICTS-OF-LAW RULES EXCEPT TO THE EXTENT PRECLUDED BY
THE MANDATORY APPLICATION OF ANOTHER STATE'S LAW).
5.12 Cooperation. The SPV, the Owner and the Operator will cooperate
in good faith in all activities relating to the Project and the Black
River Facility, including, without limitation, in the filing of
applications for all Governmental Approvals and the execution of such
other documents as may be reasonably necessary to carry out the provisions
of this Agreement. The Operator and the Owner shall use their best
efforts, and the SPV shall cooperate therewith, to obtain as quickly as
possible all Governmental Approvals and vendor approvals required to be
obtained by any Person for the transactions contemplated hereby. The SPV,
the Owner and the Operator shall discharge all their respective
obligations under this Agreement in good faith and in accordance with
Prudent Industry Practice. The SPV shall cooperate with the Owner and the
Operator in connection with the filing of applications for all
Governmental Approvals but shall not be required to expend any funds or
incur any liabilities in connection therewith.
The SPV shall permit Lime, the Owner and the Operator (i) to make
application, in the SPV's name, for any Governmental Approval necessary
for the operation or maintenance of the Black River Facility and (ii) to
utilize (to the extent permitted by Applicable Law) any Governmental
Approval necessary for such operation or maintenance, and the SPV shall
render reasonable cooperation to Lime, the Owner or the Operator, as the
case may be, in connection therewith, provided that
(a) such Governmental Approval can only be issued in the name of the
SPV,
(b) all costs and expenses related to such application or utilization
are paid by Lime, the Owner or the Operator, and
(c) neither Lime, the Owner nor the Operator has taken any action, or
failed to take any action, which action or failure to act prohibits
issuance of such Governmental Approval in the name of Lime, the Owner or
the Operator, as the case may be.
5.13 Severability. Any provision of this Agreement that may be
determined by competent authority to be prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction.
<PAGE> -24-<PAGE>
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT, OR ATTORNEY OF THE OTHER
PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTY HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.
5.15 Jurisdiction; Consent to Service of Process. (a) Each of the
parties hereto hereby irrevocably and unconditionally submits to the
nonexclusive jurisdiction of any New York State court or Federal court of
the United States of America sitting in New York City, and any appellate
court from any thereof, in any action or proceeding arising out of or
relating to this Agreement, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State court or, to
the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by Applicable Law.
(b) Each of the parties hereto hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any
suit, action, or proceeding arising out of or relating to this Agreement
in any New York State court or Federal court of the United States of
America sitting in New York City. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by Applicable Law, the
defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of
process by certified mail. Nothing in this Agreement will affect the
right of any party to this Agreement to serve process in any other manner
permitted by Applicable Law.
5.16 Consent of SPV. Wherever in this Agreement there is a
requirement for Lime, the Operator or the Owner to obtain the consent or
approval of the SPV, such requirement shall (unless specifically provided
herein to the contrary) be deemed to mean and refer to the consent and
approval of both the SPV and the Collateral Agent in consultation with the
Independent Engineer.
5.17 Right to Cure. The Lender shall have the right to cure any
failure to perform by the SPV hereunder until the later of (i) the
expiration of any grace period applicable to such failure and (ii) ten
(10) days after the Lender has knowledge of such failure.
[remainder of page intentionally left blank; next page is signature page]
<PAGE> -25-<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed by a duly authorized officer as of the day
and year first above written.
Operator:
DRAVO LIME COMPANY
By: A. H. TENHUNDFELD, JR.
Name: A. H. Tenhundfeld, Jr.
Title: Vice President
Owner:
DRAVO LIME COMPANY
By: A. H. TENHUNDFELD, JR.
Name: A. H. Tenhundfeld, Jr.
Title: Vice President
DRAVO BLACK RIVER LIMITED
PARTNERSHIP:
By: DBR General Inc.
Its General Partner
By: A. H. TENHUNDFELD, JR.
Name: A. H. Tenhundfeld, Jr.
Title: Vice President
Accepted and Agreed to:
DRAVO LIME COMPANY
By: A. H. TENHUNDFELD, JR.
Name: A. H. Tenhundfeld, Jr.
Title: Vice President
<PAGE> -26,27-<PAGE>
SCHEDULE 1
OPERATING WORK
I. Standard of Care. The Operator shall perform all of its duties and
obligations under this Agreement in accordance with the standards mandated
under the OPCO Agreement (and each other lime supply or processing
agreement to which the SPV or the Owner may, from time to time, be a
party), in a good, workmanlike and commercially reasonable manner and in
accordance with Prudent Industry Practice. The Operator shall exercise
such care and shall act diligently as a prudent business entity engaged in
the business of managing and operating a limestone processing facility
comparable to the Project owned by it (or its Affiliates) would exercise
for the advancement and protection of its own economic interests.
II. Insurance; Compliance with Insurance Policies, Governmental
Requirements, etc. The Operator shall procure and maintain all insurance
required to be maintained by the SPV under the Transaction Documents, and
also shall be responsible for making and administering all claims on
behalf of the SPV under insurance policies covering the SPV or the Project
during the term of this Agreement. The Operator shall comply in all
material respects with, and cause the Project and all Operator personnel
to comply in all material respects with, all applicable standards required
by Prudent Industry Practice, all insurance policies in effect from time
to time with respect to the Project, all manufacturer's recommended
guidelines, all Applicable Laws, all applicable Governmental Approvals and
the Transaction Documents. Without limiting the generality of the
foregoing, the Operator shall obtain and maintain at all times for the
benefit of the SPV or its designee and the Project all material
Governmental Approvals, and which can not be, or are not, issued in the
name of the SPV. The Operator shall from time to time take such action as
shall be necessary to have issued in the name of the SPV any such material
Governmental Approval that must, by its nature, be issued in the name of
the SPV in accordance with Applicable Law.
III. Personnel. The Operator shall at all times employ, or cause to
be employed, qualified personnel, properly trained to perform the
Operating Work, and shall pay all wages and benefits required by
Applicable Law or contract. The Operator shall be responsible for all
matters relating to labor relations, working conditions, training,
employee benefits, safety programs and related matters pertaining to its
employees.
IV Warranties and Guarantees. The Operator shall use reasonable
efforts to obtain warranties for the SPV for parts, equipment, materials
or services provided by third-party suppliers in fulfilling the Operator's
obligations under this Agreement. The Operator shall comply with all
applicable warranties and guarantees provided by manufacturers or
contractors, and shall take no action that in any way impairs any rights
or claims of the SPV under any manufacturer's, supplier's or other party's
warranty. Without limiting the foregoing, the Operator shall use spare
parts that will not adversely affect the SPV's protections or rights under
such warranties or guarantees.
V. Operation and Maintenance. The Operator shall operate and maintain
the Project throughout the term of this Agreement and shall provide the
following services hereunder:
<PAGE> -28-<PAGE>
A. Prior to the Operation Commencement Date. Prior to the
Operation Commencement Date, the Operator shall, at its own cost and
expense:
(i) (A) secure or prepare an operations and maintenance
manual (the "Operations Manual"). Such Operations Manual shall
include all procedures necessary to operate the Project in
compliance with this Schedule 1, and (B) upon approval of the
Operations Manual by the Independent Engineer, the Operator shall
develop and implement additional operating and maintenance
procedures for the Project as may be necessary or appropriate for
purposes of safety or for the efficient operation of the Project
(the "O&M Procedures"). The Operator shall reference the
previously supplied Operations Manual and develop and implement
such supplemental procedures, as necessary or advisable, for
equipment, components, systems or other portions of the Project.
The O&M Procedures shall, among other things, include (A)
Project-specific preventive maintenance procedures, (B) adequate
safety and fire prevention measures and procedures, including,
safety procedures for the safe operation and maintenance of
primary Project equipment, and (C) adequate security measures and
procedures. With respect to the maintenance of the Project, the
O&M Procedures shall provide for the development of an annual
major maintenance schedule defining outage time for regular
overhaul work to be performed on the Project.
(ii) As the General Contractor approaches completion of
construction of the Project in accordance with the Transaction
Documents, an orderly transition shall occur from construction (under
the control and supervision of the General Contractor) to operation
(under the control and supervision of the Operator). The Operator
shall participate in an orderly process of transition from construction
through check-out, completion, start-up, testing and acceptance of the
Project by the SPV. During the period prior to the Operation
Commencement Date, Operator shall use its best efforts to cooperate and
coordinate with the General Contractor.
(iii) Comply with the obligations, if any, imposed upon the
Operator or any Affiliate of the Operator under the Project
Contracts during the period of testing, said compliance to
continue after the Operation Commencement Date.
B. Commencing on Operation Commencement Date. Commencing on the
Operation Commencement Date, the Operator shall, as authorized by the
then applicable Project Budget:
(i) provide all services necessary or advisable to use,
operate and maintain the Project in good operating condition and
in compliance with this Schedule 1, the Operations Manual, the
O&M Procedures and the other applicable provisions of this
Agreement;
(ii) subject to the requirements of any prior approvals as set
forth in Section 1.3 hereof, make payments for necessary
Operation and Maintenance Costs;
<PAGE> -29-<PAGE>
(iii) review all Applicable Laws establishing compliance
requirements in connection with the Operating Work; secure or
renew, as necessary, appropriate Governmental Approvals required
by any Person for the ownership and operation of the Project;
(iv) establish and maintain a complete inventory of the
Project (including but not limited to those items outlined in (v)
and (vi) below owned by the SPV) and review and update the
inventory at least semi-annually;
(v) provide in accordance with the applicable Project Budget,
all materials, supplies, parts, equipment, vehicles and other
items necessary for the operation and maintenance of the Project,
which are in addition to the Project as constructed and which are
not required to be provided by the Owner pursuant to Article 2
hereof (in which case, the Operator shall cause the Owner to
provide the same);
(vi) maintain an appropriate spare parts inventory for other
components of the Project and replace equipment, material or
parts in the inventory as necessary or advisable from time to
time (including equipment, material and parts necessary for the
operation of a scale for weighing kiln feed for the Project
Kilns, unless such function is already being adequately performed
at the Black River Facility by another Person). The Operator
shall periodically review the adequacy of the spare parts
inventory and procedures for the automatic replacement of spare
parts;
(vii) make available all equipment, tools and clothing as are
necessary to accomplish routine maintenance and major and
emergency repairs to the components of the Project including, but
not limited to, cranes, forklifts, electronic test equipment and
special tools, if any, recommended by the manufacturer of the
components;
(viii) perform, or cause to be performed by subcontractors,
all rebricking and other maintenance activities required
consistent with the Transaction Documents, the Operations Manual
and the O&M Manuals to maintain the Project in good working
condition and capable of operating at maximum profitability,
consistent with Prudent Industry Practice (including
recalibrating the scale for weighing kiln feed for the Project
Kilns as necessary, unless such function is already being
adequately performed at the Black River Facility by another
Person). Make changes to the Operations Manuals and O&M
Procedures, if required or desirable, in order to facilitate
efficient and safe operation and maintenance of the Project;
(ix) provide administrative and procurement services related
to the Operating Work as necessary;
(x) retain any failed components for inspection if required by
manufacturers' and suppliers' insurance carriers, and cooperate
with such carriers' personnel regarding such inspections;
<PAGE> -30-<PAGE>
(xi) provide commercially reasonable safety and security
measures for the Project;
(xii) maintain complete and accurate records of all operation
and maintenance activities relating to the Project and maintain
any operating logs which the SPV may be required to prepare under
the Transaction Documents or which are required under any
warranties or any insurance policies;
(xiii) deliver processed lime to OPCO in accordance with the
OPCO Agreement, bill OPCO for deliveries made and check the
payments made by OPCO under the OPCO Agreement, and take any
actions necessary to collect amounts owed by OPCO under the OPCO
Agreement.
(xiv) coordinate for the SPV and implement all manufacturers'
requirements for plant data reports and warranty claims and, as
appropriate, provide recommendations as to revisions to the
Operations Manual and O&M Procedures;
(xv) provide all technical support and other services
reasonable and necessary for the operation and maintenance of the
Project;
(xvi) provide notices to the SPV and the Collateral Agent, all
in reasonable detail and promptly upon learning of the event requiring
notice, as follows:
(a) notice of any material occurrence which is
covered by any warranty given by the manufacturer of
any part of, or equipment relating to, the Project;
(b) notice of any actual or potential material
violation of any Applicable Law, including, without
limitation, Environmental Laws; and
(c) notice of all events, occurrences, conditions
and issues of which Operator shall become aware and
which the Operator reasonably considers are material
to, or are likely to have a material effect on, the
Project or the operation, maintenance or results of
operations thereof (including notice of any occurrence
of any Event of Default or Loss Event), and shall
endeavor to keep the SPV informed on a timely basis
with regard thereto. Without limiting the generality
of the foregoing, all notices of Liens and claims of
Liens shall be deemed material to the Project;
(xvii) provide written recommendations to the SPV of actions
to repair any material damage to any major component of the
Project, to prevent the recurrence of any such damage or to
respond to any event described in clause (xvi) above or improve
the profitability of the Project, including estimates of the
costs of implementation of such recommended actions;
<PAGE> -31-<PAGE>
(xviii) take such other action as may from time to time be
necessary or appropriate to enable the SPV to be in compliance
with the obligations of the Producer" under the OPCO Agreement;
(xix) keep, for a period of at least one year, records
reflecting the daily amount of processed lime produced by the
Project; and
(xx) provide to the SPV such other information as the SPV may
reasonably request.
C. Emergencies. In the event of an Operating Emergency,
Operator shall, subject to Section 1.3, perform such additional
services outside the scope of the Project Budget then in effect as may
be necessary to ensure the safety of personnel and property at the
Project Land.
D. Liens. Operator shall not, directly or indirectly, create,
incur or, to the extent arising directly or indirectly by reason of the
service contemplated hereunder, permit to exist any Lien on the Project
(other than such Lien rights as arise by operation of law pending
payment) except any such Lien that arises solely as a result of the SPV
failing to make timely payment for any equipment, services, supplies,
utilities or other items supplied or procured by the Operator under
this Agreement.
<PAGE> -32-<PAGE>
SCHEDULE 2
OPERATION AND MAINTENANCE COSTS
During the term of the Agreement, Operation and Maintenance Costs shall
be determined as follows:
1. coal/petroleum coke - actual incremental cost of coal/petroleum
coke consumed in operating the Project;
2. electricity - actual incremental cost of electricity consumed in
operating the Project;
3. insurance - actual incremental cost of insurance attributable to
Project;
4. actual incremental property taxes attributable to the Project;
5. labor - actual incremental cost of operating the Project and mining
limestone and delivering limestone to the Project Kilns;
6. scheduled recurring capital expenditures for the Project actually
made;
7. actual incremental expenses incurred pursuant to Section
1.4(c)(iii) hereof; and
8. actual incremental other costs for materials, supplies, mining and
maintaining the Project ("Other Costs") - for purposes of disbursements to
be made pursuant to Section 2.2(b)(ii)(A) of the Deposit and Disbursement
Agreement in any month, the "Other Costs" component of Operation and
Maintenance Costs shall be deemed to be the "Other Costs" projected for
such month in the current Project Budget. Beginning in the second month
after the Conversion Date and every month thereafter, there shall be a
reconciliation of the previous month's projected "Other Costs" versus the
actual amount thereof, and the disbursement to be made pursuant to Section
2.2(b)(ii)(A) of the Deposit and Disbursement Agreement on the fifteenth
(15th) day of such following month shall be increased or decreased, as the
case may be, to reflect actual "Other Costs" incurred for such previous
month. "Other Costs" shall in no event include any costs related to any
item listed in entries 1 to 7, inclusive on this Schedule 2.
Operation and Maintenance Costs shall be determined using a methodology
consistent with the methodology used in preparing the incremental analysis
of costs attached to this Schedule 2 as Schedule 2-A.
<PAGE> -33-<PAGE>
SCHEDULE 3
SUPPLIES
The Owner shall deliver, or cause to be delivered, to the Project the
following Supplies at such times, in such quantities and with such
qualities as shall permit the Operator to operate and maintain the Project
in compliance with this Agreement, all of which Supplies, as well as the
Owner, shall comply in all material respects with all applicable
Governmental Approvals, Applicable Laws, Prudent Industry Practice, and
all requirements under the insurance policies required to be in effect
pursuant to the Transaction Documents, the Operations Manual and the O&M
Procedures:
1. unprocessed limestone
2. electricity;
3. coal/petroleum coke;
4. solid and liquid waste storage and disposal;
5. effluent treatment;
6. utility access;
7. tools and spare parts; and
8. such other supplies, goods, materials and other
products, items and services as the Operator may
request for its performance of its obligations under
this Agreement.
<PAGE> -34-<PAGE>
<TABLE>
SCHEDULE 4
Description of Existing Lime Supply Contracts
Dravo Lime Company January 13, 1994
Long Term Lime Contracts
DLC Div Utility/Customer Station Unit Contract Minimum Expected Expiration Renewal
Type* Annual Annual Date
Tonnage Tonnage
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Maysv Ohio Edison-CAPCO Bruce Mansfield 1,2,3 Take 327,600 420,000 12/31/06 2 5 Yr
Terms
Maysv Columbus So. Power Conesville 5&6 Take 51,000 70,000 12/31/96 None
Maysv Allegheny Power Pleasants & 1&2 Take 163,200 170,000 12/31/94 None
Mitchell 3 Incl. 30,000
Maysv Big Rivers Elec. Robert Reid 2&3 Take 85,000 90,000 12/31/97 2 5 Yr Terms
(Green)
Maysv Cincinnati Gas East Bend 2 T-Mins 50,000 30,000 12/31/00 2x300,000
Tns
BL River Cincinnati Gas Zimmer 1 T-Mins 120,000 200,000 12/31/00 2x1,000,000
Tns
BL River Ohio Power Co. (AEP) Gavin 1&2 Take 300,000 500,000 12/31/10 5 Year Term
BL River Specialty Minerals Chillicothe & Require None 24,000 12/31/96 None
West Carrollton
* Contract Types
Take = Take or pay
T-Mins = Target Tonnage with Minimums
Require = Requirements
R-Mins = Requirements with Minimums
</TABLE>
-35-
DEPOSIT AND DISBURSEMENT AGREEMENT
among
WILMINGTON TRUST COMPANY,
as Collateral Agent
and
WILMINGTON TRUST COMPANY,
as Disbursement Agent
and
DRAVO BLACK RIVER LIMITED PARTNERSHIP
Dated as of August 1, 1994
REGARDING
BLACK RIVER FACILITY PROJECT
CARNTOWN, KENTUCKY
<PAGE> <PAGE>
TABLE OF CONTENTS
Page
1. APPOINTMENT OF DISBURSEMENT AGENT; ESTABLISHMENT OF THE
ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Acceptance of Appointment of Disbursement Agent. . . . . . . . 1
1.2 Creation of the Accounts . . . . . . . . . . . . . . . . . . . 2
1.3 Security Interests . . . . . . . . . . . . . . . . . . . . . . 2
2. DEPOSITS INTO AND DISBURSEMENTS FROM ACCOUNTS. . . . . . . . . . . . 3
2.1 Construction Account.. . . . . . . . . . . . . . . . . . . . . 3
2.2 Project Revenue Account. . . . . . . . . . . . . . . . . . . . 4
2.3 Debt Service Reserve . . . . . . . . . . . . . . . . . . . . . 6
2.4 Additional Reserve . . . . . . . . . . . . . . . . . . . . . . 8
2.5 Default Reserve. . . . . . . . . . . . . . . . . . . . . . . . 10
2.6 Casualty Account . . . . . . . . . . . . . . . . . . . . . . . 11
2.7 Construction Completion Account. . . . . . . . . . . . . . . . 12
2.8 Windup Account . . . . . . . . . . . . . . . . . . . . . . . . 12
2.9 Cure Rights. . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.10 Permitted Investments. . . . . . . . . . . . . . . . . . . . . 14
3. THE DISBURSEMENT AGENT . . . . . . . . . . . . . . . . . . . . . . . 14
3.1 Appointment of Disbursement Agent; Powers and Immunities . . . 14
3.2 Reliance by Disbursement Agent . . . . . . . . . . . . . . . . 16
3.3 Court Orders . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.4 Resignation or Removal of Disbursement Agent . . . . . . . . . 16
4. EXPENSES AND FEES. . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.1 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.2 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.1 Delivery of Budget . . . . . . . . . . . . . . . . . . . . . . 18
6.2 Action by Disbursement Agent . . . . . . . . . . . . . . . . . 18
6.3 Books of Account; Statements.. . . . . . . . . . . . . . . . . 19
6.4 Amendments; Etc. . . . . . . . . . . . . . . . . . . . . . . . 19
6.5 Addresses for Notices. . . . . . . . . . . . . . . . . . . . . 19
6.6 Governing Law; Terms . . . . . . . . . . . . . . . . . . . . . 19
6.7 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.8 Limited Third Party Beneficiaries. . . . . . . . . . . . . . . 20
6.9 Satisfaction Requirement . . . . . . . . . . . . . . . . . . . 20
6.10 No Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.11 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 20
<PAGE> -i-<PAGE>
6.12 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.13 Successors and Assigns . . . . . . . . . . . . . . . . . . . . 20
6.14 Amounts Available. . . . . . . . . . . . . . . . . . . . . . . 20
6.15 Change of Accounts . . . . . . . . . . . . . . . . . . . . . . 21
Schedule I - Account Numbers
Schedule II - Term Note Amortization Schedule
Schedule III - Payments to the Holders
Exhibit A - Certificate pursuant to Section 2.2(b)(i)
Exhibit B - Certificate pursuant to Section 2.2(b)(ii)(A)(1)
Exhibit C - Certificate pursuant to Section 2.2(b)(ii)(A)(2)
Exhibit D - Certificate pursuant to Section 2.2(b)(ii)(A)(3)
Exhibit E - Certificate pursuant to Section 2.3(a)(ii)
Exhibit F - Certificate pursuant to Section 2.3(b)(i)
Exhibit G - Certificate pursuant to Section 2.3(b)(iii)
Exhibit H - Certificate pursuant to Section 2.4(a)
Exhibit I - Certificate pursuant to Section 2.4(b)(ii)
Exhibit J - Certificate pursuant to Section 2.6(b)(i)
Exhibit K - Certificate pursuant to Section 2.7(b)
Exhibit L - Certificate pursuant to Section 2.8(b)
<PAGE> -ii-<PAGE>
DEPOSIT AND DISBURSEMENT AGREEMENT
DEPOSIT AND DISBURSEMENT AGREEMENT, dated as of August 1, 1994,
between WILMINGTON TRUST COMPANY, as Disbursement Agent and as Collateral
Agent and DRAVO BLACK RIVER LIMITED PARTNERSHIP (the "SPV").
W I T N E S S E T H:
WHEREAS, for purposes of this Agreement capitalized terms used but
not otherwise defined herein shall have the respective meanings given
such terms in Annex A to the Note Purchase Agreement; the rules of usage
set forth in said Annex A shall apply to this Agreement; and
WHEREAS, in order to finance the acquisition, construction and
equipping of the Project and certain related expenditures, the SPV, among
other things, has entered into the Note Purchase Agreement pursuant to
which the Lender shall purchase the Notes; and
WHEREAS, the Lender and any other holder or holders of any of the
Notes from time to time shall be referred to herein individually as a
"Holder" and collectively as the "Holders"; and
WHEREAS, the Disbursement Agent is willing to act as Disbursement
Agent hereunder and to hold and disburse the funds deposited hereunder in
accordance with the terms of this Agreement; and
WHEREAS, pursuant to the SPV Security Agreement, the SPV has, among
other things, pledged its interest in the Accounts created hereunder to the
Collateral Agent as security for the Secured Obligations; and
WHEREAS, the Lender, the Collateral Agent and the SPV desire to
appoint the Disbursement Agent to administer the Accounts established
hereunder and to receive, deposit and disburse all Project Revenues, all on
the terms and subject to the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lender to purchase the Notes pursuant to the Note Purchase
Agreement and for other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto hereby agree as follows:
1. APPOINTMENT OF DISBURSEMENT AGENT; ESTABLISHMENT OF THE ACCOUNTS
1.1 Acceptance of Appointment of Disbursement Agent.
(a) Acceptance of Appointment. The Disbursement Agent is
hereby appointed and agrees to act as the Disbursement Agent for all
Project Revenues and all other revenues, receipts, monies, proceeds
and other sums derived in any manner from or constituting the
Collateral. The Disbursement Agent shall hold and safeguard each
Account during the term of this Agreement and shall treat the cash,
instruments and securities in such Account as SPV Collateral.
<PAGE> -1-<PAGE>
(b) No SPV Rights. Neither the SPV nor any Affiliate thereof
shall have any rights against the Disbursement Agent (other than rights
which may arise as a result of the Disbursement Agent's gross negligence
or wilful misconduct), as a third party beneficiary or otherwise, including,
without limitation, any right to direct the Disbursement Agent to distribute
or allocate any funds in the Accounts. Any withdrawal, transfer or
investment made or caused to be made in accordance with the provisions
hereof is expressly understood to be made with the permission of the
parties hereto. In performing its functions and duties under this
Agreement, the Disbursement Agent shall act solely as agent for the
Collateral Agent and does not assume and shall not be deemed to have
assumed any obligation toward, or relationship of agency or trust with or
for, the SPV or any of its Affiliates.
1.2 Creation of the Accounts.
(a) Accounts. The Disbursement Agent hereby establishes
the following special, segregated and irrevocable cash collateral
accounts which shall be maintained at all times until the termination
of this Agreement:
(i) Construction Account,
(ii) Project Revenue Account,
(iii) Debt Service Reserve,
(iv) Additional Reserve,
(v) Default Reserve,
(vi) Casualty Account,
(vii) Construction Completion Account, and
(viii)Windup Account.
The account number for each Account is set forth on Schedule I
hereto. All amounts from time to time in any Account shall be held in
the name of the Disbursement Agent for the benefit of the Collateral
Agent. All amounts at any time in any of the Accounts shall
constitute a part of the SPV Collateral and shall not constitute
payment of any obligation owing to the Holders until applied as
hereinafter provided.
(b) Bailment. The Collateral Agent hereby appoints the
Disbursement Agent as its bailee of the SPV Collateral held by the
Disbursement Agent hereunder, subject to the terms and conditions of
this Agreement.
1.3 Security Interests; Revenues; Miscellaneous.
(a) Security Interests in Project Revenues. Each of the
parties (but in the case of the Disbursement Agent, solely in reliance
upon the acknowledgment of the other
<PAGE> -2-<PAGE>
parties, without independent knowledge or investigation) hereby
acknowledges that (i) the SPV has assigned the SPV Collateral
(including the Accounts) to the Collateral Agent pursuant to the SPV
Security Agreement and the other Transaction Documents. It is
pursuant to the Collateral Agent's rights as holder of a security
interest in the SPV Collateral that the Collateral Agent has the right
to appoint a Disbursement Agent hereunder and otherwise has rights
under this Agreement.
(b) Direct Deposit of Project Revenues And Other Amounts.
Subject to Section 2.8, the SPV agrees to arrange, and hereby
confirms that it has arranged, for the direct payment to the
Disbursement Agent (for the benefit of the Collateral Agent) of all
Project Revenues. The SPV hereby agrees that all Project Revenues
shall be deposited in the Project Revenue Account. To the extent any
Project Revenues or other amounts (except the amounts specified in
clauses (i) through (iii) of the definition of Project Revenues in
Annex A to the Note Purchase Agreement) are at any time received by
the SPV, the SPV will hold all Project Revenues and other such
amounts (including all Substitute OPCO Revenues (as defined in
Section 2.3(c) hereof)) in trust for the benefit of the Collateral
Agent and will pay Project Revenues and other such amounts to the
Disbursement Agent for deposit into the Project Revenue Account on
the Business Day following receipt thereof (duly endorsed, if
necessary, to the Disbursement Agent). Without limiting the
generality of the foregoing, the SPV has instructed OPCO and any
other Person to which it sells lime or any other commodity, or to which
it provides any other services, to pay directly to the Disbursement
Agent for deposit in the Project Revenue Account all amounts payable
under the OPCO Agreement or otherwise and, with respect to other
such Persons, the related agreement.
(c) UCC Filings. The Disbursement Agent shall take such
action as may be requested by the SPV or the Collateral Agent in
order to comply with the provisions of the Uniform Commercial Code (as
in effect in any applicable jurisdiction) governing the establishment,
preservation, protection or perfection of security interests in the
Accounts.
2. DEPOSITS INTO AND DISBURSEMENTS FROM ACCOUNTS
The SPV hereby authorizes the Disbursement Agent to make the
following deposits and withdrawals with respect to the Accounts. All
obligations with regard to deposits and disbursements set forth in
any provision of this Section are subject to the wind-up provisions
set forth in Section 2.8 and the cure rights set forth in Section 2.9.
2.1 Construction Account.
(a) Deposits. The Disbursement Agent shall deposit into the
Construction Account (i) all amounts advanced by the Lender pursuant
to the Note Purchase Agreement and transferred by the Lender to the
Disbursement Agent for deposit into the Construction Account and (ii)
all amounts contributed by Lime, through the Partners, pursuant to
Section 3.15 of the Lime Security Agreement and transferred by Lime
to the Disbursement Agent for deposit into the Construction Account.
<PAGE> -3-<PAGE>
(b) Disbursements. The Disbursement Agent shall disburse
funds in the Construction Account, within one Business Day of its
receipt of such funds, to the Persons and in the amounts set forth in
the Approved Draw Request pursuant to which such funds were
advanced by the Lender. In addition, on the Conversion Date, after
giving effect to the Advance, if any, to be made on such date
pursuant to the Note Purchase Agreement, and upon (i) the purchase
of the Term Notes by the Lender on such date and (ii) the
disbursement of funds, if any, into the Construction Completion
Account and the Debt Service Reserve in compliance with Section 8.19
of the Note Purchase Agreement, the Disbursement Agent shall
disburse to the SPV all moneys on deposit in the Construction Account
up to, but not in excess of, Five Million Three Hundred Thousand
Dollars ($5,300,000).
2.2 Project Revenue Account.
(a) Deposits. The Disbursement Agent shall deposit in the
Project Revenue Account all moneys required to be deposited into the
Project Revenue Account from any other Account pursuant to the
provisions hereof or any other Transaction Document, and all Project
Revenues and other amounts required to be deposited into the Project
Revenue Account by Section 1.3(b) hereof, including, without limitation:
(i) all payments received from the Operator and the
Owner under the MCFA; and
(ii) all payments received from OPCO or any other
Person for goods or services supplied by the Project.
If the conditions for disbursement from any Account to the Project
Revenue Account have been satisfied on any Debt Payment Date
(whether due to an overfunding of such Account or otherwise), the
amount to be disbursed from the Project Revenue Account on such date
shall include the amount to be disbursed from such other Account to
the Project Revenue Account on such date.
(b) Disbursements.
(i) If, prior to the Conversion Date, funds are
deposited into the Project Revenue Account in respect of sales
of processed lime other than Substitute OPCO Revenues, the
Disbursement Agent shall disburse from the Project Revenue
Account to the Operator so long as the Operator is not in
default of its obligations under the MCFA (or if any such
default exists, the grace period, if any, in respect thereof has
not expired (it being understood that "grace period" does not
include any cure period referred to in Section 6 of the
Intercreditor Agreement)), the Operation and Maintenance Costs
attributable to such sales of lime as determined in accordance
with the methodology to be observed in determining Operation
and Maintenance Costs under Project Budgets, as specified in a
certificate (in the form of Exhibit A hereto) executed by Lime
and delivered by the SPV to the
<PAGE> -4-<PAGE>
Disbursement Agent and the Lender at least 5 days before such
disbursement is to be made.
(ii) From and after the Conversion Date, the
Disbursement Agent shall disburse from the Project Revenue
Account, in the following order of priority, on each Debt
Payment Date (except with respect to subclause (A) below in
which event disbursements shall be made as therein provided),
so that, if there shall be insufficient funds in the Project
Revenue Account to make all payments then due, no payment set
forth below shall be made until all amounts owing in respect of
all payments then due with a higher priority shall have been
paid in full:
(A) First,
(1) on the first Business Day of each month,
to the Disbursement Agent and the Collateral Agent,
all amounts due and owing in respect of fees and
expenses of the Disbursement Agent and the
Collateral Agent, as specified in a certificate (in
the form of Exhibit B hereto) executed by the
Disbursement Agent or the Collateral Agent, as the
case may be, delivered to the Disbursement Agent
and the Lender at least 5 days before such
Business Day;
(2) on Thursday of each week, to the
Operator an amount due in respect of the Operator's
payroll for the preceding week as specified in a
certificate (in the form of Exhibit C hereto)
executed by the Operator and delivered to the
Disbursement Agent at least 2 Business Days prior
to such date;
(3) on the first and fifteenth days of each
month, to Lime so long as Lime is not in default of
its obligations under the MCFA (or if any such
default exists, the grace period, if any, in respect
thereof has not expired (it being understood that
"grace period" does not include any cure period
referred to in Section 6 of the Intercreditor
Agreement)), the amount due and owing under the
MCFA including, without limitation, Operation and
Maintenance Costs and the costs of lime production
at the Maysville Facility and the Black River
Facility payable by the SPV pursuant to Section 3.4
of the MCFA and not required to be disbursed
pursuant to Section 2.3(b)(i) hereof, as specified in
a certificate (in the form of Exhibit D hereto)
executed by Lime and delivered by the SPV to the
Disbursement Agent and the Lender at least 5 days
before such date; and
(4) if the amounts on deposit in the Project
Revenue Account are insufficient to pay all such
fees and expenses, on any date, then ratably to the
Persons owed such amounts in accordance with the
respective amounts owing to each on such date;
<PAGE> -5-<PAGE>
provided that no such payment shall be made pursuant to
this subclause (A) in respect of any expenditure if such
expenditure would violate any provision of Section 1.4(c)
of the MCFA.
(B) Second, to the account specified in Schedule
III hereto in partial satisfaction of the SPV's obligation
to pay Debt Service an amount equal to the sum of (1) the
Debt Service Payment then due and payable, plus (2) the
aggregate amount, if any, of all prior Debt Service that
remains unpaid on such Debt Payment Date (together with
interest on such unpaid amount at the Late Payment Rate);
(C) Third, to the Debt Service Reserve, all
remaining amounts in the Project Revenue Account until no
further deposits are required to be made into the Debt
Service Reserve, as set forth in Section 2.3(a);
(D) Fourth, to the Additional Reserve, the amount,
if any, required to be deposited therein pursuant to
Section 2.4(a);
(E) Fifth, to the Default Reserve, the amount, if
any, required to be deposited therein pursuant to Section
2.5(a);
(F) Sixth, to Lime, all amounts remaining after the
payments required by the foregoing clauses (A) to (E),
inclusive.
2.3 Debt Service Reserve.
(a) Deposits. The Disbursement Agent shall deposit into the
Debt Service Reserve the following amounts:
(i) prior to the Conversion Date, all Substitute OPCO
Revenues which may at any time have been paid to the Project
Revenue Account, immediately upon the receipt thereof,
(ii) on the Conversion Date, such amounts, if any, as are
(x) borrowed on the Conversion Date by the SPV pursuant to
Section 1.4 of the Note Purchase Agreement and paid to the
Disbursement Agent in respect of the Required Reserve Payment
as specified in a certificate (in the form of Exhibit E hereto)
delivered to the Disbursement Agent by the SPV and (y) payable
by Lime pursuant to Section 3.15 of the Lime Security Agreement,
and
(iii) from and after the Conversion Date, 100% of Excess
Cash Flow from the Project Revenue Account,
until the aggregate amount on deposit in the Debt Service Reserve
shall equal One Year's Debt Service.
(b) Disbursements.
<PAGE> -6-<PAGE>
(i) Prior to the Conversion Date, the Disbursement
Agent shall disburse from the Debt Service Reserve on the
first and fifteenth days of each month, to Lime so long as Lime
is not in default of its obligations under the MCFA (or if any
such default exists, the grace period, if any, in respect
thereof has not expired (it being understood that "grace period"
does not include any cure period referred to in Section 6 of the
Intercreditor Agreement)), the amount due and owing to Lime
under Section 3.4 of the MCFA, as specified in a certificate (in
the form of Exhibit F hereto) executed by Lime and delivered by
the SPV to the Disbursement Agent and the Lender at least 5
days before such date.
(ii) The Disbursement Agent shall disburse funds from
the Debt Service Reserve to the Lender on each Debt Payment
Date if the amount available for disbursement on such date
from the Project Revenue Account for the payment of Debt
Service due on or prior to such date shall be less than the
amount of such Debt Service (the amount of such shortfall being
referred to herein as the "Debt Service Shortfall"). The amount
of such disbursement shall be equal to the lesser of (x) the
Debt Service Shortfall minus any amount applied to the Debt
Service Shortfall from the Additional Reserve and (y) the
amount on deposit in the Debt Service Reserve.
(iii) Upon receipt of a certificate (in the form of Exhibit
G hereto) executed by the SPV and the Collateral Agent in
respect of an overfunding of the Debt Service Reserve, the
Disbursement Agent shall disburse funds from the Debt Service
Reserve to the Project Revenue Account on each Debt Payment
Date to the extent that the aggregate amount on deposit in the
Debt Service Reserve shall exceed One Year's Debt Service
(whether by reason of interest and other sums earned in
respect of the Debt Service Reserve or otherwise), as specified
in such certificate. The Collateral Agent shall be obligated to
deliver such a certificate to the Disbursement Agent after it
has received evidence satisfactory to it from the SPV that any
such excess shall exist.
(c) Definitions. As used in this Agreement, the following
terms shall have the following meanings:
(i) "Excess Cash Flow" means, as of any date of
determination and for any period, the amount by which
(A) the aggregate amount of all Project Revenues in
respect of such period paid on or prior to the date of
determination, exceeds
(B) the aggregate amount of disbursements required
to be made by the Disbursement Agent during such period
(whether or not actually made) pursuant to subclauses (1)
through (4), inclusive, of Section 2.2(b)(ii)(A) and pursuant
to Section 2.2(b)(ii)(B).
(ii) "One Year's Debt Service" means, the largest
aggregate amount of principal and interest scheduled to be paid
in respect of the Notes during any
<PAGE> -7-<PAGE>
period of twelve consecutive months ending on or prior to the
maturity of the Term Notes, in each case as determined by
reference to Schedule II hereto.
(iii) "Substitute OPCO Revenues" means all amounts
payable by OPCO under the OPCO Agreement in respect of lime
which was not processed by the Project.
2.4 Additional Reserve.
(a) Deposits. If, either
(i) on any Debt Payment Date, the Debt Service
Coverage Ratio for the Interim Period most recently ended as of
such date was equal to or less than 1.30 to 1, or
(ii) on any Debt Payment Date, the Projected Debt
Service Coverage Ratio for each of the two consecutive Interim
Periods immediately following such most recently ended Interim
Period is equal to or less than 1.30 to 1,
then, on such Debt Payment Date and on each Debt Payment Date
thereafter, upon receipt of a certificate (in the form of Exhibit H
hereto) (an "Additional Reserve Certificate") executed by the
Collateral Agent in respect of such conditions, the Disbursement
Agent shall disburse 100% of Excess Cash Flow, net of any deposits
required to be made into the Debt Service Reserve pursuant to
Section 2.3(a), from the Project Revenue Account and deposit such sum
into the Additional Reserve until the Debt Payment Date on which both
(x) the Debt Service Coverage Ratio for each of the two then most
recently ended Interim Periods, and (y) the Projected Debt Service
Coverage Ratio for each of the two consecutive Interim Periods
immediately following the then most recently ended Interim Period,
shall be equal to or greater than 1.40 to 1. Effective as of the Debt
Payment Date on which both of the conditions set forth in the
foregoing subclauses (x) and (y) shall be satisfied, but only upon its
receipt of an Additional Reserve Certificate executed by the
Collateral Agent in respect of such conditions, the Disbursement
Agent shall make no further such disbursements from the Project
Revenue Account pursuant to this Section 2.4(a) but all Excess Cash
Flow theretofore deposited into the Additional Reserve pursuant to
this Section 2.4(a) shall remain on deposit therein (subject to
disbursement as provided herein); provided, however, that, at such
time as either of the conditions set forth in the foregoing clauses (i)
and (ii) shall again be satisfied, and upon its receipt of an
appropriate Additional Reserve Certificate, the Disbursement Agent
shall again make the deposits provided for in the first sentence of
this Section 2.4(a). The Collateral Agent shall be obligated to deliver
an appropriate Additional Reserve Certificate to the Disbursement
Agent if, after either of the conditions set forth in the foregoing
clauses (i) and (ii) have occurred, it shall have received evidence
satisfactory to it from the SPV that both of the conditions set forth
in the foregoing clauses (x) and (y) have been satisfied.
(b) Disbursements.
(i) The Disbursement Agent shall disburse funds from
the Additional Reserve to the Lender on any Debt Payment Date
if there shall be a Debt Service
<PAGE> -8-<PAGE>
Shortfall on such date. The amount of such disbursement shall
be equal to the lesser of (A) the Debt Service Shortfall for
such date and (B) the amount on deposit in the Additional
Reserve.
(ii) If, on any Debt Payment Date,
(A) the Debt Service Coverage Ratio for each of
the two then most recently ended Interim Periods was
equal to or greater than 1.50 to 1 and
(B) the Projected Debt Service Coverage Ratio for
each of the two consecutive Interim Periods immediately
following the then most recently ended Interim Period is
equal to or greater than 1.50 to 1,
the Disbursement Agent shall, upon receipt of a certificate (in
the form of Exhibit I hereto) (an "Additional Reserve
Disbursement Certificate") executed by the SPV and the
Collateral Agent in respect of such conditions, disburse all
amounts on deposit in the Additional Reserve and deposit such
funds into the Project Revenue Account for disbursement as
provided in Section 2.2. The Collateral Agent shall be obligated
to deliver an Additional Reserve Disbursement Certificate to
the Disbursement Agent after it shall have received evidence
satisfactory to it from the SPV that the conditions set forth in
the foregoing clauses (A) and (B) have been satisfied.
(iii) As used in this Section 2.4, the following terms
shall have the following meanings:
(A) "Projected Debt Service Coverage Ratio"
means, for any period, the ratio of
(1) the amount of all Project Revenues
projected to be paid during such period minus the
aggregate amount of disbursements projected to be
made by the Disbursement Agent during such period
pursuant to subclause (A) of Section 2.2(b)(ii), to
(2) the aggregate amount of disbursements
projected to be made by the Disbursement Agent
during such period in respect of payments pursuant
to subclause (B) of Section 2.2(b)(ii),
in each case as set forth in the Project Budget (or the
Extended Project Budget if applicable) delivered to the
Disbursement Agent and the Collateral Agent in respect of
such period.
(B) "Debt Service Coverage Ratio" means, as of
any date of determination and for any period, the ratio of
(1) the amount of all Project Revenues in
respect of such period paid on or prior to the date
of determination, minus the
<PAGE> -9-<PAGE>
disbursements required to be made by the
Disbursement Agent during such period (whether or
not actually made) pursuant to subclause (A) of
Section 2.2(b)(ii), to
(2) the aggregate amount of disbursements
required to be made by the Disbursement Agent
during such period in respect of payments (whether
or not actually made) pursuant to subclause (B) of
Section 2.2(b)(ii).
2.5 Default Reserve.
(a) Deposits. On any Debt Payment Date when an Event of
Default exists, unless otherwise instructed by the Collateral Agent,
and so long as no deposits are required to be made into the Additional
Reserve on such date pursuant to Section 2.4(a) (it being understood
that no deposit shall be made into the Default Reserve at any time if
a deposit is required to be made into the Additional Reserve at such
time), the Disbursement Agent shall disburse 100% of Excess Cash
Flow, net of any deposits required to be made into the Debt Service
Reserve pursuant to Section 2.3(a), from the Project Revenue Account
and deposit such amount into the Default Reserve; provided, however,
that if,
(i) (A) on the immediately preceding Debt Payment Date
one or more Dravo-Related Defaults existed and no other Event
of Default existed, and (B) the Disbursement Agent made the
disbursement and deposit in respect thereof, as contemplated
by this Section 2.5(a), and
(ii) on such then current Debt Payment Date, the only
Event of Default in existence is the Dravo-Related Default or
Dravo-Related Defaults that were in existence on such
immediately preceding Debt Payment Date,
then no such disbursement and deposit shall be made on such then
current Debt Payment Date. All amounts deposited into the Default
Reserve at any time when an Event of Default, other than a Dravo-
Related Default, exists shall remain on deposit in the Default
Reserve, regardless of whether such Event of Default shall
thereafter be cured or otherwise cease to exist, and regardless of
whether a Dravo-Related Default existed at the same time as such
Event of Default.
(b) Disbursements. All amounts deposited into the Default
Reserve at any time when the only Event of Default which exists is a
Dravo-Related Default shall remain on deposit in the Default Reserve
until the first Debt Payment Date on which no Event of Default shall
exist, at which time such amounts shall be disbursed from the Default
Reserve and deposited into the Project Revenue Account for
disbursement as provided in Section 2.3(b).
(c) Knowledge of Defaults. The Disbursement Agent shall not
be deemed to have knowledge of an Event of Default unless and until
it shall have received notice thereof from the SPV, the Lender or the
Collateral Agent, and shall assume that no Event of Default exists
except Events of Default in respect of which it shall have received
such
<PAGE> -10-<PAGE>
notice. The Disbursement Agent shall assume that each Event of
Default of which it has received notice is continuing until such time
as it shall receive notice from the Lender or the Collateral Agent
that such Event of Default has been cured. The Collateral Agent
shall be obligated to deliver such notice to the Disbursement Agent
promptly after it receives notice from the Holders that any Event of
Default has been cured.
2.6 Casualty Account.
(a) Deposits. Each party hereto acknowledges and agrees
that if it shall receive any proceeds (other than proceeds of any
business interruption policy) in respect of a Loss Event
(collectively, "Casualty Proceeds") which is a Partial Loss, such party
shall promptly remit such Casualty Proceeds (less the actual costs,
fees, and expenses incurred in the collection thereof as certified in
a certificate executed by the SPV or Lime) to the Disbursement Agent
for deposit into the Casualty Account, together with a certificate
stating the source of the Casualty Proceeds, a detailed description
of the Partial Loss giving rise to such party's receipt thereof, and
instructions to deposit such Casualty Proceeds into the Casualty
Account. Until such time that such party shall remit such Casualty
Proceeds to the Disbursement Agent, it shall hold such proceeds in
trust for the benefit of the Disbursement Agent for application as
provided herein.
(b) Disbursements.
(i) If (A) the aggregate Casualty Proceeds received by
the Disbursement Agent in respect of any single Partial Loss
shall not exceed Five Hundred Thousand Dollars ($500,000), (B)
the SPV shall, at least ten days prior to any disbursement
pursuant to this Section 2.6(b), deliver to the Disbursement
Agent and the Lender a certificate (in the form of Exhibit J)
setting forth, inter alia, a detailed description of the repairs
to be effected with such Casualty Proceeds, a certification
that the sum of (x) the amount of such Casualty Proceeds, plus
(y) the applicable deductibles and self-insured amounts under
the SPV's insurance policies, is not less than the amount of
such repairs and an undertaking to complete such repairs, and
(C) no Event of Default shall exist at the time of proposed
disbursement, the Disbursement Agent shall disburse such
Casualty Proceeds to (or at the direction of) the SPV in the
amounts specified in such certificate.
(ii) If the aggregate Casualty Proceeds received by the
Disbursement Agent in respect of any single Partial Loss shall
exceed Five Hundred Thousand Dollars ($500,000) and no Event
of Default shall exist, the Disbursement Agent shall disburse
such proceeds to the SPV from time to time, in each case upon
presentation to the Disbursement Agent of a request therefor,
approved by the Independent Engineer: (A) specifying the
amount so to be disbursed, (B) annexing invoices (not previously
used as a basis for any disbursement of funds pursuant to this
Section 2.6(b)(ii)) demonstrating expenditures made or to be made
by the SPV upon receipt of such funds for repair and/or
replacement of the Project and (C) certifying that (i) such
repair and/or replacement is technically feasible for a cost
not in excess of the sum of (x) the amount of available Casualty
Proceeds plus (y) the applicable deductibles and self-insured
amounts under the
<PAGE> -11-<PAGE>
SPV's insurance policies, and (2) such repair and/or restoration
is proceeding in compliance with the SPV's obligations under
Section 11.2 of the Note Purchase Agreement and the other
Transaction Documents.
(c) Knowledge of Defaults. The Disbursement Agent shall
determine the existence or non-existence of an Event of Default in
the manner provided in Section 2.5(c).
2.7 Construction Completion Account.
(a) Deposits. On the Conversion Date, the SPV, pursuant to
Section 8.19 of the Note Purchase Agreement, shall deposit into the
Construction Completion Account an amount equal to 100% of the
aggregate cost of completing the Punch List Items.
(b) Disbursements. From time to time, upon the request of
the SPV (or Lime as Construction Manager) made pursuant to a
certificate (in the form of Exhibit K hereto) approved by the
Independent Engineer and the Lender and delivered to the
Disbursement Agent at least five days prior to the proposed
disbursement date, the Disbursement Agent shall disburse from the
Construction Completion Account the amount set forth in such
certificate to pay the cost of completed Punch List Items. Such
disbursement shall be made directly to Lime for payment to such
Persons as the SPV shall specify in such certificate. Following
receipt by the Disbursement Agent of a notice from the SPV that all
Punch List Items have been completed and the cost thereof has been
paid, the Disbursement Agent shall disburse any remaining balance in
the Construction Completion Account and deposit such balance into
the Project Revenue Account.
2.8 Windup Account.
(a) Deposits. The Disbursement Agent shall deposit into the
Windup Account any of the following amounts received from any
Person:
(i) Casualty Proceeds (less the actual costs, fees and
expenses incurred in the collection thereof as certified in a
certificate executed by the SPV or Lime) received as a result of
the occurrence of a Total Loss; and
(ii) all amounts received as a result of the exercise of
any remedy under any Transaction Document.
(b) Disbursements.
(i) Any provision of this Agreement to the contrary
notwithstanding (subject, however, to the proviso set forth
below), upon receipt of a certificate (in the form of Exhibit L
hereto) executed by the Collateral Agent stating that a Windup
Event has occurred and is continuing and specifying the nature
of same, the Disbursement Agent shall not make any further
transfers pursuant to any Section of this Agreement other
than this Section 2.8 and shall transfer to the Windup Account
(x) all amounts then on deposit in all other Accounts and (y) all
<PAGE> -12-<PAGE>
Project Revenues and other amounts then held or subsequently
received by the Disbursement Agent which would otherwise have
been deposited in any Account. On the date or dates specified
in such certificate or in a subsequent certificate executed by
the Collateral Agent, the Disbursement Agent shall make
disbursements from the Windup Account in the following order of
priority (so that, if there shall be insufficient funds to make
all such payments, no payment set forth below shall be made
until all amounts owing in respect of all payments with a higher
priority shall have been paid in full):
(A) First, to the payment of the costs and
expenses of foreclosure or suit, if any, and of the sale
of the Collateral, and all proper expenses, liability and
advances, including reasonable legal expenses and
attorneys' fees, incurred or made by the Collateral Agent
and the Disbursement Agent, and all taxes, assessments or
Liens superior to the Lien of the Collateral Agent on the
Collateral, except any taxes, assessments or other
superior Lien subject to which said sale may have been
made;
(B) Second, to the payment of all reasonable
expenses, liabilities and advances, including reasonable
legal expenses and attorneys' fees, incurred or made by
the Holders;
(C) Third, to the payment of the accrued and
unpaid interest on the Notes then outstanding, and, in
case such proceeds shall be insufficient to pay in full
such amounts, then ratably to each Holder according to
the aggregate principal amount of Notes held by each;
(D) Fourth, to the payment of the unpaid principal
amount of the Notes then outstanding and, in case such
proceeds shall be insufficient to pay in full the entire
principal amount so unpaid, then ratably to each Holder
according to the aggregate principal amount of Notes held
by each;
(E) Fifth, to the payment of the Make-Whole
Amount, if any, then unpaid with respect to the
outstanding Notes and, in case such proceeds shall be
insufficient to pay in full such amounts, then ratably to
each Holder according to the principal amount of Notes
held by each;
(F) Sixth, to the payment of all other amounts
owed with respect to the Notes and the other Secured
Obligations and, in case such proceeds shall be
insufficient to pay in full such amounts, then ratably to
each holder thereof; and
(G) Seventh, to Lime or to whomever else may be
entitled thereto pursuant to the Transaction Documents
or applicable law.
(ii) As used herein, "Windup Event" means the occurrence
of any of the following events:
<PAGE> -13-<PAGE>
(A) the occurrence of a Total Loss; or
(B) the acceleration of the principal balance of
the Notes.
2.9 Cure Rights.
Any payments made to the Disbursement Agent by any Person
exercising any cure right pursuant to Article 6 of the Intercreditor
Agreement shall be deposited into the Account designated by such Person in
a notice accompanying such payment and shall be applied as herein provided.
If no Account shall be designated, such amount shall be deposited into the
Project Revenue Account and applied as herein provided.
2.10 Permitted Investments.
The Disbursement Agent shall invest any cash held in any Account
from time to time in Permitted Investments. All such investments shall be
made so as to mature on or prior to the date or dates on which the
Disbursement Agent anticipates that funds therein will be required for
disbursements to be made hereunder (but the Disbursement Agent shall use
its best efforts to invest in Permitted Investments with the longest
available maturity consistent with such requirement). Any income or gain
realized as a result of any such investment shall be held as part of the
applicable Account and reinvested as provided in this Agreement until
disbursed in compliance with this Section 2. For purposes of any income tax
payable on account of any such income or gain, such income or gain shall be
for the account of the SPV. The Disbursement Agent shall have no liability
for any loss resulting from any such investment other than by reason of
its wilful misconduct or gross negligence. Any such investment may be
liquidated by the Disbursement Agent, in a manner intended to minimize any
loss of principal prior to maturity, whenever necessary to make any
deposit, distribution or transfer required by this Agreement. The
Disbursement Agent shall not be liable to any Person for any investment
loss resulting from any such liquidation of investments.
3.1 Appointment of Disbursement Agent; Powers and Immunities.
(a) Appointment of Disbursement Agent. The Collateral Agent,
on behalf of the Lender, hereby irrevocably appoints and authorizes
the Disbursement Agent to act as its agent hereunder, with such
powers as are expressly delegated to the Disbursement Agent by the
terms of this Agreement and such other powers as are reasonably
incidental thereto; and the SPV consents to such appointment.
(b) Duties and Responsibilities. The Disbursement Agent
shall not have any duties or responsibilities except those expressly
set forth in this Agreement. Without limiting the generality of the
foregoing, prior to satisfaction in full of the Secured Obligations,
the Disbursement Agent shall take all actions as the Collateral Agent
shall direct it in writing to perform in accordance with the provisions
of this Agreement. The Disbursement Agent shall not take any actions
hereunder except in accordance with such instructions and shall be
fully protected in acting, or in refraining from acting, hereunder in
accordance with such instructions. Notwithstanding anything to the
contrary contained
<PAGE> -14-<PAGE>
herein, the Disbursement Agent shall not be required to take any
action which is contrary to this Agreement or applicable law or which
in its reasonable judgment would involve it in expense or liability
unless it has been furnished with adequate indemnity to its
reasonable satisfaction against such expense or liability. The
Disbursement Agent shall not have any duties or responsibilities
except those expressly set forth herein and those necessarily
incidental thereto, and no implied covenants, functions,
responsibilities or duties on the part of the Disbursement Agent
shall be read into this Agreement or shall otherwise exist against the
Disbursement Agent.
(c) Disclaimer of Representations, etc. by Other Persons.
Neither the Disbursement Agent nor any of its Affiliates shall be
responsible to any Person for any recitals, statements,
representations or warranties made by any other Person contained in
this Agreement or any other Transaction Document or in any
certificate or other document referred to or provided for herein or
therein, for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other
Transaction Document or any other document referred to or provided
for herein or therein, or for any failure by the SPV or the Collateral
Agent, to perform their respective obligations hereunder or
thereunder. Except as expressly stated in the Transaction
Documents, the Disbursement Agent shall not be required to ascertain
or inquire as to the performance by the SPV or the Collateral Agent
of any of their respective obligations under this Agreement, any
other Transaction Document, or any other document or agreement
contemplated hereby or thereby. The Disbursement Agent shall not be
(i) required to initiate or conduct any litigation or collection
proceeding hereunder or under any other Transaction Document or (ii)
responsible for any action taken or omitted to be taken by it
hereunder or in connection herewith or therewith, except for its own
gross negligence or wilful misconduct.
(d) Consultation with Experts, Obtaining Instructions, etc.
Whenever in the administration of this Agreement the Disbursement
Agent shall deem it necessary or desirable that a factual matter be
proved or established in connection with the Disbursement Agent's
taking, suffering or omitting to take any action hereunder, such
matter (unless other evidence in respect thereof is herein
specifically prescribed) may be deemed to be conclusively proved or
established by a certificate of the SPV, the Collateral Agent or the
Lender required to be delivered pursuant to the provisions hereof.
The Disbursement Agent may consult with counsel, accountants or
other experts, and any opinion of such counsel, accountants or other
experts shall be full authorization and protection in respect of any
action taken, suffered or omitted by the Disbursement Agent under
this Agreement in accordance therewith. The Disbursement Agent
shall have the right at any time to seek instructions concerning the
administration of this Agreement from any court of competent
jurisdiction, or, prior to satisfaction in full of the Secured
Obligations, from the Collateral Agent. The Disbursement Agent shall
provide a copy of any certificate received pursuant to this Section
to the SPV, and shall inform the SPV in the event that it consults
with, or seeks the opinion of, any counsel, accountant, or other
expert, or seeks instructions from any court. The Disbursement Agent
may execute any of its duties hereunder through agents or
attorneys-in-fact and shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
<PAGE> -15-<PAGE>
3.2 Reliance by Disbursement Agent.
The Disbursement Agent shall be entitled to rely upon any signature,
certificate, notice or other document (including any cable, telegram,
telecopy or telex) believed by it to be genuine and correct and to have been
signed or sent by or on behalf of the proper Person or Persons so long as
the Disbursement Agent confirms receipt of such certificate, notice or
other document by delivery of a written acknowledgment to the sender prior
to taking action in reliance thereon. The Disbursement Agent shall also be
entitled to rely upon advice of legal counsel, independent accountants and
other experts selected by the Disbursement Agent, and shall have no
liability for its actions taken in reliance thereon, unless due to the
Disbursement Agent's wilful misconduct or gross negligence.
3.3 Court Orders.
(a) Retention of Funds Pending Resolution of Uncertainties,
Disputes, etc. In the event of any uncertainty on the part of the
Disbursement Agent, or any dispute, as to any amount to be
transferred or paid pursuant to this Agreement, the Disbursement
Agent is authorized and directed to retain in its possession the
amount in question until such uncertainty or dispute shall have been
resolved or settled or until it has been provided appropriate
indemnification, in either case to its satisfaction. The Disbursement
Agent shall not be liable to any Person on account of its exercise, in
good faith, of its rights under this Section 3.3(a).
(b) Compliance with Orders. The Disbursement Agent is hereby
authorized and directed to obey and comply with all writs, orders,
judgments or decrees issued by any court or administrative agency
affecting any money, documents or things held by the Disbursement
Agent. The Disbursement Agent shall not be liable to any of the
parties hereto or the Lender by reason of the Disbursement Agent's
compliance with such writs, orders, judgments or decrees,
notwithstanding that such writ, order, judgment or decree is later
reversed, modified, set aside or vacated.
3.4 Resignation or Removal of Disbursement Agent.
Subject to the appointment and acceptance of a successor
Disbursement Agent as provided below, the Disbursement Agent may resign
at any time by giving notice thereof to all other parties hereto, and the
Disbursement Agent may be removed at any time with or without cause by the
Collateral Agent, at any time prior to satisfaction in full of the Secured
Obligations. Upon any such resignation or removal, the Collateral Agent
shall have the right to appoint a successor Disbursement Agent. If no
successor Disbursement Agent shall have been appointed and shall have
accepted such appointment within sixty (60) days after the retiring
Disbursement Agent's giving of notice of resignation or the removal of the
retiring Disbursement Agent, then the retiring Disbursement Agent may
apply to any court of competent jurisdiction for the appointment of a
successor; provided that any Disbursement Agent so appointed shall
immediately and without further act be superseded by a Disbursement Agent
appointed by the Collateral Agent. Upon the execution and delivery of an
instrument accepting its appointment as Disbursement Agent hereunder by
the successor Disbursement Agent, (a) without further act, deed or
conveyance, such successor Disbursement Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges, obligations and
duties of the retiring
<PAGE> -16-<PAGE>
Disbursement Agent, and the retiring Disbursement Agent shall be
discharged from its duties and obligations hereunder and (b) the retiring
Disbursement Agent shall promptly transfer all Accounts within its
possession or control to the possession or control of the successor
Disbursement Agent and shall execute and deliver such notices,
instructions and assignments as may be necessary or desirable to transfer
more fully and certainly the rights, powers, privileges, obligations and
duties of the Disbursement Agent with respect to the Accounts to the
successor Disbursement Agent. After the retiring Disbursement Agent's
resignation or removal hereunder as Disbursement Agent, the provisions of
this Section 3 and of Section 4 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting
as Disbursement Agent.
4. EXPENSES AND FEES
4.1 Expenses.
The SPV agrees to pay or reimburse on demand all reasonable and
documented out-of-pocket expenses of the Disbursement Agent (including
reasonable expenses for legal services of every kind) in respect of, or
incident to, the preparation, execution and delivery of this Agreement, the
administration of this Agreement and the Accounts, the enforcement of any
of the provisions of this Agreement or in connection with any amendment,
waiver or consent relating to this Agreement.
The Disbursement Agent shall not have any recourse to the Collateral
Agent, the Lender or the Collateral for amounts in payment of compensation,
reimbursement or indemnification hereunder. If the Disbursement Agent
incurs expenses or renders services following the filing of a case in
bankruptcy with respect to the SPV, such expenses and the compensation
for such services are intended to constitute expenses of administration
under any federal or state bankruptcy, insolvency, arrangement,
moratorium, reorganization or other debtor relief law.
4.2 Fees.
The SPV agrees to pay the Disbursement Agent such fees and
expenses as shall have been separately agreed upon prior to the
consummation of the transactions contemplated hereby.
5. DEFINITIONS
As set forth in the recitals hereto, the capitalized terms shall have
the respective meanings set forth in Annex A to the Note Purchase
Agreement and the rules of usage set forth in said Annex A shall apply
hereto. In addition, the following terms shall have the following meanings:
"Additional Reserve Certificate" shall have the meaning ascribed
thereto in Section 2.4(a) hereof.
"Additional Reserve Disbursement Certificate" shall have the meaning
ascribed thereto in Section 2.4(b)(ii) hereof.
"Agreement, this" shall have the meaning ascribed thereto in the first
recital hereof.
<PAGE> -17-<PAGE>
"Casualty Proceeds" shall have the meaning ascribed thereto in Section
2.6(a) hereof.
"Debt Service Coverage Ratio" shall have the meaning ascribed thereto
in Section 2.4(b)(iii)(B) hereof
"Debt Service Shortfall" shall have the meaning ascribed thereto in
Section 2.3(b)(ii) hereof.
"Excess Cash Flow" shall have the meaning ascribed thereto in Section
2.3(c)(i) hereof.
"Holder" shall have the meaning ascribed thereto in the third recital
hereto.
"One Year's Debt Service" shall have the meaning ascribed thereto in
Section 2.3(c)(ii) hereof.
"Projected Debt Service Coverage Ratio" shall have the meaning
ascribed thereto in Section 2.4(b)(iii)(A) hereof.
"Substitute OPCO Revenues" shall have the meaning ascribed thereto in
Section 2.3(c)(iii) hereof.
"Windup Event" shall have the meaning ascribed thereto in Section
2.8(b)(ii) hereof.
6. MISCELLANEOUS
6.1 Delivery of Budget.
The SPV shall deliver to the Disbursement Agent (a) not later than the
first day of each Contract Year (or such later time as a Draft Project
Budget shall have been approved in accordance with Section 1.4 of the
MCFA), a copy of the Project Budget prepared by the Operator in respect of
such Fiscal Year and (b) not later than July 30th of each year (or such
later time as a proposed Extended Budget shall have been approved in
accordance with Section 1.4 of the MCFA), a copy of the Extended Budget for
the period of 12 consecutive months ending on June 30th of the following
year.
6.2 Action by Disbursement Agent.
Notwithstanding any provisions to the contrary in this Agreement, if
any disbursement, deposit or payment of any funds by the Disbursement
Agent, or any other action to be taken by the Disbursement Agent under this
Agreement, is to be made or taken on a day other than a Business Day, such
disbursement, deposit or payment shall be made or taken on the next
succeeding Business Day.
<PAGE> -18-<PAGE>
6.3 Books of Account; Statements.
(a) Books of Account. The Disbursement Agent shall maintain
books of account on a cash basis and record therein all deposits into
and transfers from the Accounts, and all investment transactions
effected by the Disbursement Agent pursuant to this Agreement, all
in accordance with its customary practices and procedures. The
Disbursement Agent shall make such books of account available during
normal business hours for inspection and audit by the SPV, the
Collateral Agent or the Lender.
(b) Statements. The Disbursement Agent shall deliver monthly
to the Collateral Agent, the Lender and the SPV a statement setting
forth the transactions in each Account during the preceding month
and specifying the Project Revenues, investments, securities and
other amounts held on deposit in each Account at the close of
business on the Business Day as of which the statement is prepared.
The Disbursement Agent shall also deliver to each of such Persons a
similar statement as of the end of and for each Contract Year and
the first six months in each Contract Year.
6.4 Amendments; Etc.
No amendment or waiver of any provision of this Agreement shall be
effective unless the same shall be in writing and signed by each party
hereto.
6.5 Addresses for Notices.
All notices and communications to be given pursuant to this Agreement
shall be in writing and shall be given in the manner and with the effect set
forth in Section 17.1 of the Note Purchase Agreement.
6.6 Governing Law; Terms.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW BUT EXCLUDING ALL OTHER CHOICE-OF-LAW AND CONFLICTS-
OF-LAW RULES); PROVIDED, HOWEVER, THAT SO LONG AS WILMINGTON TRUST COMPANY
SHALL SERVE AS DISBURSEMENT AGENT, THE DUTIES AND LIABILITIES OF THE
DISBURSEMENT AGENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF DELAWARE.
6.7 Headings.
Headings used in this Agreement are for convenience of reference
only and do not constitute part of this Agreement for any purpose.
<PAGE> -19-<PAGE>
6.8 Limited Third Party Beneficiaries.
The agreements of the parties hereto are solely for the benefit of
the parties hereto and the Holders, and no other Person shall have any
rights hereunder.
6.9 Satisfaction Requirement.
If any agreement, certificate or other writing, or any action taken or
to be taken, is by the terms of this Agreement required to be satisfactory
to any Person, then the determination of such satisfaction shall be made by
such Person in its sole and exclusive judgment exercised in good faith.
6.10 No Waiver.
No failure on the part of the Disbursement Agent or the Collateral
Agent to exercise, and no course of dealing with respect to, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by the Disbursement Agent
or the Collateral Agent of any right, power or remedy hereunder preclude
any other or future exercise thereof or the exercise of any other right,
power or remedy. The remedies herein are cumulative and are not exclusive
of any remedies provided by law.
6.11 Severability.
Any provision of this Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Agreement and without affecting the validity
or enforceability of such provision or any other provision in any other
jurisdiction.
6.12 Counterparts.
This Agreement may be executed simultaneously in counterparts, each
of which shall be deemed an original, and it shall not be necessary in making
proof of this Agreement to produce or account for more than one fully
executed counterpart for each party hereto.
6.13 Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
6.14 Amounts Available. In determining the amount available in
any Account at any time, the Disbursement Agent shall treat as cash
available the amount that the Disbursement Agent would have received on
such day if the Disbursement Agent had liquidated all the securities then
on deposit in such Account at then prevailing market prices. The
Disbursement Agent will use its best efforts to sell securities in order
that actual cash shall be available on each date on which a transfer or
payment is to be made pursuant to this Disbursement Agreement.
<PAGE> -20-<PAGE>
6.15 Change of Accounts. The Account referred to in Schedule III
hereto may be changed at any time by written notice from the Holders to the
Disbursement Agent specifying the new account or accounts to which
payments pursuant to Section 2.2(b)(ii)(B) should be made.
[remainder of page intentionally left blank; next page is signature page]
<PAGE> -21-<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
DRAVO BLACK RIVER LIMITED
PARTNERSHIP
By: DBR General Inc.
Its General Partner
By: A. H. TENHUNDFELD, JR.
Name: Albert H. Tenhundfeld, Jr.
Title: Vice President
WILMINGTON TRUST COMPANY, not in its
individual capacity, but solely
as Collateral Agent
By: BRUCE BISSON
Name: Bruce Bisson
Title: Vice President
WILMINGTON TRUST COMPANY, not in its
individual capacity, but solely
as Disbursement Agent
By: JOHN M BESSON, JR.
Name: John M. Besson, Jr.
Title: Vice President
<PAGE> -22,23-
[EXECUTION COPY]
AMENDMENT AGREEMENT
This AMENDMENT AGREEMENT (this Agreement or this
Amendment), dated as of August 1, 1994, is entered into by and
among DRAVO CORPORATION, a Pennsylvania corporation (Dravo),
DRAVO LIME COMPANY, a Delaware corporation (Lime), DRAVO BASIC
MATERIALS COMPANY, INC., an Alabama corporation (Basic,
together with Lime referred to herein as the Companies), FIRST
ALABAMA BANK (FAB), PNC BANK, NATIONAL ASSOCIATION (formerly
known as Pittsburgh National Bank) (PNC), CONTINENTAL BANK
(formerly known as Continental Bank N.A.) (Continental), THE
PRUDENTIAL INSURANCE COMPANY OF AMERICA (acting through
Prudential Capital Group, Prudential; FAB, PNC, Continental and
Prudential herein collectively referred to as Lenders and each
a Lender), and FAB, as agent for the Lenders (in such capacity,
together with its successors and assigns, the Agent).
PRELIMINARY STATEMENTS
(1) The Companies, Dravo and the Lenders have
entered into an Override Agreement, dated as of January 21,
1992, as amended by the First Amendment to Override Agreement,
dated March 10, 1993, and the Second Amendment to Override
Agreement, dated as of March 7, 1994 (as so amended, the
Override Agreement). In addition, the Companies, the Agent and
the Lenders have entered into an Amended and Restated
Revolving Credit Agreement, dated as of January 21, 1992, as
amended by the First Amendment to Amended and Restated
Revolving Credit Agreement, dated as of March 7, 1994 (as so
amended, the Revolving Credit Agreement). Capitalized terms
used but not defined herein shall have the meanings assigned
to such terms in the Override Agreement, as amended hereby.
(2) Lime has entered into a lime supply agreement,
dated June 21, 1993 (the OPCO Agreement), with Ohio Power
Company, an Ohio corporation. In order to fulfill its obligations
under the OPCO Agreement, Lime requires additional production
facilities (the New Project) at its Black River Facility. In
addition, to the extent that the New Project has capacity beyond
that needed to service the OPCO Agreement, Lime plans to utilize
the New Project to service other lime supply agreements in
order to benefit from the cost savings to be realized from the
efficiency of the New Project's equipment.
<PAGE> -1-<PAGE>
(3) To finance a portion of the cost of constructing
the New Project, the Lenders have agreed to increase their
commitments under the Revolving Credit Agreement by $6,000,000
and to extend the maturity thereof, and Prudential, acting
through Prudential Power Funding Associates (PruPower), has
agreed to purchase up to $50,000,000 of promissory notes to be
issued by Lime SPV.
(4) The parties hereto desire to amend the Revolving
Credit Agreement, the Override Agreement and certain other
Operative Documents to reflect the financing of the New
Project and that, among other things, additional property is
being pledged to the Lenders as collateral security.
NOW, THEREFORE, in consideration of the premises, the
parties hereto agree as follows:
ARTICLE I
THIRD AMENDMENT TO OVERRIDE AGREEMENT
1.01. Amendments to Override Agreement The Override
Agreement shall be, effective as of the date hereof and subject
to the satisfaction of the conditions precedent set forth in
Section 5.01 hereof, amended as follows:
(a) Amendments to Article IV. Article IV shall be
amended as follows:
(i) Section 4.01(a)(viii) is amended by deleting in
its entirety the phrase "generally recognized under
law." appearing in the last sentence thereof and
substituting therefor the new phrase "generally
recognized under law; and", and by adding the following
new clause (ix) thereafter:
"(ix) promptly upon receipt or transmission
thereof, a copy of each report (financial or
otherwise), notice (including, without limitation,
any notice disclosing any default), certificate or
statement received or provided by it or any of its
Subsidiaries pursuant to any Transaction
Document, to the extent not provided to the
Lenders by any Dravo Party pursuant to clauses (i)
through (viii) above."
(ii) Section 4.01(b) is amended by deleting in its
entirety the phrase "and its Subsidiaries" in each place
in which it appears
<PAGE> -2-<PAGE>
therein and substituting therefor in each case the new
phrase "and its Subsidiaries (other than Lime SPV)".
(iii) Section 4.01(b) is further amended by adding
the following sentences at the end thereof:
"The inspection rights of the Lenders with respect
to Lime SPV shall be governed by the Master Common
Facilities Agreement as in effect on the Initial
Funding Date. Each of the Dravo Parties further
covenants that, so long as a Lender shall hold any
Note or Notes or any Secured Obligation shall
remain outstanding, it will permit one of the
Lenders and its representatives to perform an
annual collateral audit with respect to the
Collateral, at the expense of the Dravo Parties,
which collateral audit shall be conducted in
accordance with such Lender's then existing
practices and procedures relating to collateral
audits."
(iv) Section 4.01(c) is amended by deleting in its
entirety the phrase "if any of the Dravo Parties
creates" and substituting therefor the new phrase "if
any of the Dravo Parties or any Subsidiary of a Dravo
Party creates".
(v) Section 4.01(d) is amended by deleting in its
entirety the phrase "or any of its Subsidiaries" and
substituting therefor the new phrase "or any of its
Subsidiaries (other than Lime SPV, the SPV General
Partner and the SPV Limited Partner)".
(vi) Section 4.01(e) is amended by deleting in its
entirety the phrase "and will cause each of its
Subsidiaries" and substituting therefor the new phrase
"and will cause each of its Subsidiaries (other than Lime
SPV, the SPV General Partner and the SPV Limited
Partner)".
(vii) Section 4.01(f) is amended by deleting in its
entirety the phrase "nor any Subsidiary" and
substituting therefor the new phrase "nor any
Subsidiary (other than Lime SPV, the SPV General Partner
and the SPV Limited Partner)".
(viii) Section 4.01(g) is amended by deleting in its
entirety the phrase "(other than Discontinued
Subsidiaries)" in each place in which it appears therein
and substituting therefor in each case the new phrase
"(other than Discontinued Subsidiaries, Lime SPV, the SPV
General Partner and the SPV Limited Partner)".
<PAGE> -3-<PAGE>
(ix) Section 4.01(h) is amended by deleting in its
entirety the phrase "and will cause each of its
Subsidiaries" and substituting therefor the new phrase
"and will cause each of its Subsidiaries (other than Lime
SPV, the SPV General Partner and the SPV Limited
Partner)".
(x) Section 4.01(l) is amended by adding
immediately following the phrase "the commencement of
any such operations thereon by the Dravo Parties" the
phrase "(other than any properties acquired by Lime SPV
for use in the Project)".
(xi) Section 4.01 is amended by adding the
following new subsections (m), (n), (o), (p), (q), (r) and (s) at
the end thereof:
"(m) Direct Ownership of Lime SPV, the SPV
General Partner and the SPV Limited Partner. Lime
shall maintain direct 100% ownership of all capital
stock (other than the Class B Common Stock of the
SPV General Partner) of the SPV General Partner
and the SPV Limited Partner, and shall cause the
SPV General Partner and the SPV Limited Partner
to maintain direct 100% ownership of all of the
partnership interests of Lime SPV.
(n) Lime SPV, SPV General Partner and SPV
Limited Partner Organizational Documents. Lime
shall not, without the prior written consent of the
Lenders, permit Lime SPV, the SPV General Partner
and the SPV Limited Partner to amend, supplement,
replace, restate or otherwise modify any of the
organizational documents of such Person,
including, without limitation, (i) the limited
partnership agreement and certificate of limited
partnership of Lime SPV and (ii) the articles of
incorporation of the SPV General Partner and the
SPV Limited Partner.
<PAGE> -4-<PAGE>
(o) Issuance of Additional Capital Stock by
the SPV General Partner and the SPV Limited
Partner. Except for (i) one share of Class B
Common Stock issued by the SPV General Partner to
PruPower and (ii) any shares of capital stock
issued by the SPV General Partner and the SPV
Limited Partner to Lime on or before the Initial
Funding Date, Lime shall not permit the SPV General
Partner or the SPV Limited Partner to issue, sell
or otherwise dispose of (either directly, or
indirectly by the issuance of rights or options
for, or securities convertible into, such shares)
any shares of any class of its capital stock.
(p) Distributions Under Deposit and
Disbursement Agreement. Lime shall cause Lime
SPV, the SPV General Partner and the SPV Limited
Partner to distribute immediately to Lime all funds
received by Lime SPV pursuant to the Deposit and
Disbursement Agreement.
(q) Amendments to Master Common Facilities
Agreement and Deposit and Disbursement
Agreement. Lime shall not, without the prior
written consent of the Lenders, enter into any
amendment of (i) the provisions of the Master
Common Facility Agreement set forth in Section 9.1
of the Project Intercreditor Agreement or (ii) the
requirement set forth in Section 2.2(b)(ii) of the
Deposit and Disbursement Agreement that Lime
shall receive all remaining amounts after all other
required payments (including, without limitation,
required payments resulting from any amendment to
said Section 2.2(b)(ii)) have been made pursuant
thereto.
(r) Replacement of Lime as Operator of the
Black River Facility. Lime agrees and acknowledges
that the Lenders shall have the right to replace
Lime as the operator of the Black River Facility in
accordance with the terms of the Master Common
Facilities Agreement.
(s) Indemnity of Lime SPV Against Lime.
Notwithstanding anything to the contrary
contained in the Master Common Facilities
Agreement, Lime (in its capacity as "Operator"
thereunder) shall have no obligation to indemnify
Lime SPV with respect to any amounts due and
payable on the Notes (as defined in the Note
Purchase Agreement) (including, without limitation,
any principal, interest, fees or Make-Whole Amount
(as defined in the Note
<PAGE> -5-<PAGE>
Purchase Agreement)), except to the extent of any
amounts realized upon the sale, foreclosure or
other disposition of the Shared Collateral (as
defined in Annex A to the Project Intercreditor
Agreement)."
(xii) Section 4.02(b) is amended in its entirety to
read as follows:
"(i) Dravo shall cause the Fixed Charge
Coverage Ratio of Dravo and its Subsidiaries as at
the end of each of Dravo's fiscal quarters to
equal or exceed the following values for the fiscal
quarters ending during the following periods:
Minimum Fixed
Relevant Period Charge Ratio
January 1, 1994 through and
including December 31, 1994 1.70
January 1, 1995 through and
including December 31, 1995 1.35
January 1, 1996 through and
including December 31, 1996 2.00
January 1, 1997 through and
including December 31, 1997 2.75
January 1, 1998 and thereafter 3.00
provided, however, that in the event that the
maturity date of the Debt of Lime to FAB under the
Longview Credit Agreement is extended for at least
12 months beyond the maturity date of such Debt as
in effect on August 1, 1994, the minimum Fixed
Charge Coverage Ratio of Dravo and its
Subsidiaries with respect to the period January 1,
1995 through and including December 31, 1995 shall
be 1.70.
(ii) Dravo shall cause the Discontinued
Operations Fixed Charge Coverage Ratio of Dravo
and its Subsidiaries as at the end of each of
Dravo's fiscal quarters to equal or exceed the
following values for the fiscal quarter ending
during the following periods:
<PAGE> -6-<PAGE>
Minimum Discontinued
Operations Fixed Charge
Relevant Period Coverage Ratio
January 1, 1994 through and
including December 31, 1994 1.50
January 1, 1995 through and
including December 31, 1995 1.25
January 1, 1996 through and
including December 31, 1996 2.00
January 1, 1997 through and
including December 31, 1997 2.75
January 1, 1998 and thereafter 3.00"
provided, however, that in the event that the
maturity date of the Debt of Lime to FAB under the
Longview Credit Agreement is extended for at least
12 months beyond the maturity date of such Debt as
in effect on August 1, 1994, the minimum
Discontinued Operations Fixed Charge Coverage
Ratio of Dravo and its Subsidiaries with respect to
the period January 1, 1995 through and including
December 31, 1995 shall be 1.50."
(b) Amendments to Article V. Article V shall be amended
as follows:
(i) Section 5.01(c) is amended in its entirety to
read as follows:
"(c) Debt. Dravo shall not, and shall not
permit any of its Subsidiaries to, create, incur,
assume or suffer to exist any Debt in excess of
the lesser of:
(i) the following percentages of Dravo
Consolidated Net Tangible Assets ("DCNTA") of Dravo
and its Subsidiaries during the periods
corresponding to such percentages in the table
set forth below:
<PAGE> -7-<PAGE>
Amount of Permitted
Debt as a Percentage
Relevant Period of DCNTA
January 1, 1994 through and
including December 31, 1995 61%
January 1, 1996 through and
including December 31, 1996 57%
January 1, 1997 through and
including December 31, 1997 50%
January 1, 1998 and thereafter 45%
OR
(ii) the sum of (x) $170,000,000 plus (y) 100%
of the cash proceeds received by Dravo in
connection with the issuance or sale of any
capital stock of Dravo (net of any reasonable
costs and expenses incurred by Dravo in
connection with such issuance or sale) occurring
after the Closing Date plus (z) 100% of the amount
by which Consolidated Net Earnings from
Continuing Operations generated after
September 30, 1991 exceeds the greater of (A)
$40,000,000 and (B) the aggregate amount of Losses
from Discontinued Operations after September 30,
1991; provided, however, that in no event shall such
amount be less than zero."
(ii) Section 5.01(d) is amended by deleting the
phrase "(other than the Secured Obligations)" in its
entirety and substituting therefor the new phrase
"(other than (A) the Secured Obligations, (B) any Debt
incurred in connection with the Project pursuant to the
Note Purchase Agreement and the other Financing
Documents and (C) any Debt permitted by Section 5.01(e)
hereof)".
(iii) Section 5.01(d) is further amended by
deleting the phrase "in excess of 10% of Dravo
Consolidated Net Tangible Assets" in its entirety and
substituting therefor the new phrase "in excess of 7%
of Dravo Consolidated Net Tangible Assets".
(iv) Section 5.01 is amended by adding the
following new subsection (e) at the end thereof:
<PAGE> -8-<PAGE>
(e) Maximum Project Debt. Dravo shall not
permit Lime SPV, the SPV General Partner and the
SPV Limited Partner to create, incur, assume or
suffer to exist at any time subsequent to the
Initial Funding Date, any Debt for borrowed money
or any guaranties of Debt for borrowed money
(other than the outstanding principal amount of
the Notes (as defined in the Note Purchase
Agreement), which in no event shall exceed
$50,000,000) in an aggregate amount in excess of
the sum of (i) $10,000,000, (ii) the amount of any
Debt incurred to finance capital expenditures
required to enable such Persons to comply with
Applicable Law (including, without limitation,
Environmental Laws (as defined in the Note
Purchase Agreement)) and (iii) the amount of any
Debt incurred by such Persons upon the
occurrence and during the continuance of an Event
of Default (as defined in Annex A to the Project
Intercreditor Agreement).
(v) Section 5.02(a)(iii) is amended by deleting the
phrase "or any other Affiliate" in its entirety and
substituting therefor the new phrase "or any other
Affiliate, except to Lime as contemplated by, and
pursuant to, the Transaction Documents".
(vi) Section 5.02(b) is amended by adding the word
"and" immediately following clause (G) thereof and by
adding the following new clause (H) immediately
thereafter:
"(H) Debt incurred in connection with the
Project pursuant to the Note Purchase Agreement
and the other Financing Documents, including,
without limitation, any Debt permitted by Section
5.01(e) hereof;"
(vii) Section 5.02 is amended by adding the
following new subsection (d) at the end thereof:
"(d) Lime shall not permit Lime SPV to enter
into any lime supply agreements other than (i)
Economically Similar Contracts (as defined in
Annex A to the Project Intercreditor Agreement)
and (ii) other lime supply agreements that are
approved in writing by the Lenders."
(viii) Section 5.03(a)(i)(H) is amended in its entirety
to read as follows:
<PAGE> -9-<PAGE>
"(H) Liens created or permitted (1) by any
Operative Document entered into in connection with
this Agreement and (2) by any Transaction
Document (including, without limitation, Permitted
Liens (as defined in the Note Purchase
Agreement)), and"
(ix) Section 5.03(a)(ii) is amended by adding the
following proviso at the end thereof:
"provided, however, that (a) notwithstanding
the foregoing, Lime may (i) make advances to Lime
SPV pursuant to Section 1.4(d) of the Master Common
Facilities Agreement and (ii) make capital
contributions (including, without limitation, the
Investment (as defined in the Note Purchase
Agreement)) to, and pay any other amount
(including, without limitation, any amount required
to be paid by Lime pursuant to Section 3.15 of the
Lime Security Agreement (as defined in the Note
Purchase Agreement) as in effect on the Initial
Funding Date) on behalf of, Lime SPV, the SPV
General Partner and the SPV Limited Partner (x) on
or before the Conversion Date (as defined in Annex
A to the Project Intercreditor Agreement) pursuant
to the Financing Documents, in an aggregate amount
not to exceed the sum of (A) $12,400,000 in the
aggregate on the Initial Funding Date and (B)
$5,300,000 in the aggregate for amounts required
to be contributed by Lime to Lime SPV pursuant to
Section 3.15(b) of the Lime Security Agreement (as
defined in the Note Purchase Agreement) as in
effect on the Initial Funding Date, and (y) from
time to time after said Conversion Date, in an
aggregate amount not to exceed the lesser of (1)
$4,000,000 and (2) the amount disbursed to Lime SPV
from the Construction Account (as defined in Annex
A to the Project Intercreditor Agreement) on the
Conversion Date pursuant to Section 2.1(b) of the
Deposit and Disbursement Agreement as in effect
on the Initial Funding Date, and (b) the foregoing
provisions of this Section 5.03(a)(ii) shall not
apply to Lime SPV, the SPV General Partner and the
SPV Limited Partner."
<PAGE> -10-<PAGE>
(x) Section 5.03(a)(iii) is amended by deleting the
phrase "shall not apply to any Discontinued Subsidiary"
in its entirety and substituting therefor the new phrase
"shall not apply to any Discontinued Subsidiary, Lime
SPV, the SPV General Partner or the SPV Limited
Partner".
(xi) Section 5.03(a)(iv) is amended by deleting the
phrase "except that so long as no Default" in its
entirety and substituting therefor the new phrase
"except that (1) Lime SPV, the SPV General Partner and
the SPV Limited Partner may sell or otherwise dispose of
assets in the ordinary course of business (including,
without limitation, the sale or other disposition of worn-
out or obsolete equipment), (2) Lime SPV, the SPV General
Partner and the SPV Limited Partner may sell or
otherwise dispose of any assets to the Lenders (on
behalf of the Companies) or, in the event that the
Lenders have been given a right of first refusal to
purchase such assets and have declined to exercise
such right, to any other Person, (3) Lime SPV, the SPV
General Partner and the SPV Limited Partner may merge
or consolidate with or into any Person if the continuing
or surviving entity is Lime SPV, the SPV General Partner
or the SPV Limited Partner, and (4) so long as no
Default".
(xii) Section 5.03(a)(iv) is further amended by
adding the following proviso at the end thereof:
provided, however, that any decision by the
Lenders to purchase assets from Lime SPV, the SPV
General Partner or the SPV Limited Partner
pursuant to clause (2) above shall be made by the
Majority Lenders (provided, that any Lender that
does not concur in the decision of the Majority
Lenders shall not be obligated to provide any
funds for the purchase price of such assets,
unless such funds are otherwise available to be
borrowed by the Companies from such Lender
pursuant to the Revolving Credit Agreement and
the Companies so request such borrowing pursuant
to the terms thereof);
(xiii) Neither Lime SPV, the SPV General Partner
nor the SPV Limited Partner shall be obligated to comply
with, and no Dravo Party shall cause Lime SPV, the SPV
General Partner or the SPV Limited Partner to comply
with, Sections 5.03(a)(v), 5.03(a)(vi), 5.03(a)(vii),
5.03(a)(viii), 5.03(a)(ix), 5.03(b) or 5.03(c).
(c) Amendments to Article VI. Article VI shall be
amended as follows:
(i) Section 6.01(c) is amended by deleting in its
entirety the phrase "any Subsidiary" in each place in
which it appears therein and substituting therefor in
each case the new phrase "any Subsidiary (other than
Lime SPV, SPV General Partner and SPV Limited Partner)".
<PAGE> -11-<PAGE>
(ii) Section 6.01(e) is amended by deleting the
phrase "4.01(j)" in its entirety and substituting therefor
the new phrase "4.01(j), 4.01(m), 4.01(o)"
(iii) Section 6.01(g) is amended by deleting the
phrase "or any Subsidiary thereof" in its entirety and
substituting therefor the new phrase "or any Subsidiary
thereof (other than Lime SPV, SPV General Partner and
SPV Limited Partner)".
(iv) Section 6.01(h) is amended by deleting the
phrase "or any Subsidiary thereof" in its entirety and
substituting therefor the new phrase "or any Subsidiary
thereof (other than Lime SPV, SPV General Partner and
SPV Limited Partner)".
(v) Section 6.01(i) is amended by deleting the
phrase "or any Subsidiary thereof" in its entirety in
each place in which it appears therein and substituting
therefor in each case the new phrase "or any Subsidiary
thereof (other than Lime SPV, SPV General Partner and
SPV Limited Partner)".
(vi) Section 6.01(j) is amended by deleting the
phrase "or any Subsidiary thereof" in its entirety in
each place in which it appears therein and substituting
therefor in each case the new phrase "or any Subsidiary
thereof (other than Lime SPV, SPV General Partner and
SPV Limited Partner)".
(vii) Section 6.01(l) is amended by deleting the
phrase "or any Subsidiary thereof" in its entirety and
substituting therefor the new phrase "or any Subsidiary
thereof (other than Lime SPV, SPV General Partner and
SPV Limited Partner)".
(viii) Section 6.01(m) is amended by deleting the
phrase "or any Subsidiary thereof" in its entirety and
substituting therefor the new phrase "or any Subsidiary
thereof (other than Lime SPV, SPV General Partner and
SPV Limited Partner)".
(ix) Section 6.01(o) is amended in its entirety to
read as follows:
"(o) at any time, the aggregate commitment
for advances (excluding any sublimit or commitment
for the issuance of letters of credit) under all
revolving credit facilities of the Companies
having a revolving term with an
<PAGE> -12-<PAGE>
expiration date later than seven calendar months
after such time shall be less than $46,700,000;"
(x) Section 6.01 is amended by adding the
following new subsections (q), (r) and (s) at the end
thereof:
"(q) an "Event of Default" shall have
occurred under the Note Purchase Agreement and
the Notes (as defined in the Note Purchase
Agreement) shall have been declared due and
payable pursuant to the terms thereof; or
(r) any event or condition (unless due to
Uncontrollable Forces (as defined in Article 4 of
the Master Common Facilities Agreement as in
effect on the Initial Funding Date)) affecting the
Project (other than the Project Kilns (as defined in
Annex A to the Project Intercreditor Agreement))
shall have occurred that has had, or could
reasonably be expected to have, a material
adverse effect on the operation of the Black River
Facility, and either (i) Lime SPV shall not have
commenced remedial action, within 60 days after
the occurrence of such event or condition, to cure
such event or condition in such manner as shall be
necessary to cause such adverse effect to cease
to be material (or to cause such expectation to
cease to be reasonable) or (ii) such remedial action
shall not have been completed within 90 days after
the occurrence of such event or condition, if
reasonably susceptible to cure within such period,
or, if not reasonably susceptible to cure within
such period, Lime SPV shall not be diligently
pursuing the steps necessary to effect such cure;
or
(s) Lime shall have failed to make a Capacity
Payment (as defined in the Note Purchase
Agreement) and the Collateral Agent shall have
received a written notice from the Required
Holders (as defined in the Note Purchase
Agreement) directing it to take action to realize
upon the Assigned Lime Contract Collateral (as
defined in Annex A to the Project Intercreditor
Agreement) as a result of such failure;"
(xi) Section 6.01 is amended by deleting the
phrase "clauses (a) through (f), inclusive, or (k) through
(p)" in its entirety and substituting therefor the new
phrase "clauses (a) through (f), inclusive, or (k) through
(s)".
<PAGE> -13-<PAGE>
(d) Amendments to Article VII. Article VII shall be
amended as follows:
(i) Section 7.01(a) is amended in full to read as
follows:
"(a) Organization and Qualification. Each
of the Dravo Parties is a corporation duly
organized and existing in good standing under the
laws of its state of incorporation, each Subsidiary
(other than a Discontinued Subsidiary) of a Dravo
Party is duly organized and existing in good
standing under the laws of the jurisdiction in
which it is incorporated or organized, as the case
may be, and each of the Dravo Parties and each
such Subsidiary has all requisite power and
authority (corporate, partnership, or otherwise) to
own its respective property and to carry on its
respective business as now being conducted, and
each of the Dravo Parties and each such
Subsidiary is duly qualified as a foreign
corporation or partnership (as the case may be) to
do business and is in good standing in every
jurisdiction in which the nature of the respective
business conducted by it makes such qualification
necessary."
(ii) Section 7.01 is amended by adding the
following new subsections (q) and (r) at the end thereof:
"(q) Ownership of Lime SPV, the SPV General
Partner and the SPV Limited Partner. Lime owns
directly 100% of all capital stock (other than one
share of Class B Common Stock of the SPV General
Partner that is owned by PruPower) of the SPV
General Partner and the SPV Limited Partner, and
the SPV General Partner and the SPV Limited
Partner own directly 100% of the partnership
interests of Lime SPV.
(r) Project Improvements. The real estate
improvements described in Exhibit A to the
Improvements Deed, dated as of August 1, 1994,
between Lime and Lime SPV, have been constructed
for use by the Project and were purchased with
proceeds from the issuance of the Construction
Notes and with additiontal funds made available to
Lime SPV as equity contributions."
<PAGE> -14-<PAGE>
(e) Amendments to Article VIII. Section 8.12 is amended
by deleting each reference to "Section 4.02(c)" contained
therein and substituting therefor in each case a reference to
"Section 4.02(b)".
1.02. Amendments to Appendix A Appendix A to the
Override Agreement shall be amended as follows:
(a) The definition "PNB" is amended in its entirety to
read as follows:
"PNC" shall mean PNC Bank, National Association and
its successors and assigns.
All references in the Override Agreement to "PNB" shall be
deemed to be references to "PNC".
(b) The definition "Consolidated Net Earnings" is
amended by adding the following new phrase immediately
following the phrase "(except for gains resulting from the use
of net operating loss carry forwards),":
"any items of gain (or plus any items of loss) that were
included in determining such consolidated net income and
were not realized in the ordinary course of business
(whether or not classified as "ordinary" by GAAP),"
(c) The definition "Consolidated Net Earnings" is
further amended by adding the following new phrase immediately
preceding the period at the end thereof:
"provided, however, that any taxes deducted from
earnings to amortize any deferred tax asset recognized
after March 31, 1994 shall not be deducted in determining
Consolidated Net Earnings"
(d) The definition "Discontinued Operations Fixed
Charge Coverage Ratio" is amended by deleting the phrase
"EBDIAT of Dravo and its Subsidiaries" in its entirety and
substituting therefor the new phrase "EBDIAT of Dravo and its
Subsidiaries (provided, that with respect to Lime SPV, the SPV
General Partner and the SPV Limited Partner, EBDIAT of such
Persons shall not include Unavailable Cash unless and until
such Unavailable Cash is distributed to Lime)".
(e) The definition "Dravo Consolidated Net Tangible
Assets" is amended by deleting the phrase "for borrowed money,
and (iv) treasury" in its entirety and substituting therefor the
new phrase "for borrowed money,
<PAGE> -15-<PAGE>
(iv) any gain from a reduction after March 31, 1994 in the
valuation allowance against any deferred tax asset and (v)
treasury".
(f) The definition "Fixed Charge Coverage Ratio" is
amended by deleting the phrase "EBDIAT of Dravo and its
Subsidiaries for the three" in its entirety and substituting
therefor the new phrase "EBDIAT of Dravo and its Subsidiaries
(provided, that with respect to Lime SPV, the SPV General
Partner and the SPV Limited Partner, EBDIAT of such Persons
shall not include Unavailable Cash unless and until such
Unavailable Cash is distributed to Lime) for the three".
(g) The definition "Funded Debt" is amended by adding
the following new phrase immediately preceding the period at
the end thereof:
" plus (iii) all off-balance sheet indebtedness (including,
without limitation, guaranty obligations and
indebtedness incurred in connection with sale/leaseback
transactions), other than obligations under operating
leases"
(h) The definition "Notes" is amended by adding the
phrase "the Additional Notes" immediately following the phrase
"the Prudential Revolving Note,".
(i) The definition "Operative Documents" is amended by
adding the phrase "the SPV Stock Pledge Agreement, the SPV
Partner Pledge Agreement, the Project Intercreditor Agreement,
the Assignment and Security Agreement," immediately following
the phrase "the Basic Mortgage,".
(j) The definition "Security Documents" is amended by
adding the phrase "the SPV Stock Pledge Agreement, the SPV
Partner Pledge Agreement, the Assignment and Security
Agreement," immediately following the phrase "the Basic
Mortgage,".
(k) The definition "Subsidiary" is amended in its
entirety to read as follows:
"Subsidiary" shall mean, with respect to any
Person, any corporation or unincorporated entity
(including, without limitation, any general partnership or
limited partnership) of which an aggregate of 50% or
more of the outstanding capital stock (or comparable
interest) having ordinary voting power (irrespective of
whether at the time capital stock (or comparable
interest) of any other class or classes of such
corporation or entity shall or might have voting power
upon the occurrence of any contingency) is at the time
directly or
<PAGE> -16-<PAGE>
indirectly owned by said Person (whether directly or
through one or more other Subsidiaries of such Person).
In the case of an unincorporated entity, a Person shall
be deemed to have 50% or more of interests having
ordinary voting power only if such Person's vote in
respect of such interests comprises 50% or more of the
total voting power of all such interests in the
unincorporated entity.
(l) The following sentence is added to the end of
Appendix A:
"Each of the parties to the Operative Documents
and the Transaction Documents and their counsel have
reviewed and revised, or requested revisions to, the
Operative Documents, and the usual rule of construction
that any ambiguities are to be resolved against the
drafting party shall be inapplicable in the construing
and interpretation of the Operative Documents and the
defined terms contained herein and therein."
(m) The following new definitions shall be inserted in
alphabetical order in Appendix A:
"Additional Notes" shall mean those certain
Revolving Notes attached as Exhibits A-5, A-6, A-7 and
A-8 to the Revolving Credit Agreement, executed by each
of Basic and Lime in favor of each of the Lenders,
respectively, and each Note delivered in substitution or
exchange for any such Note.
"Assignment and Security Agreement" means the
Assignment and Security Agreement, dated as of August 1,
1994, by Lime in favor of the Collateral Agent, as the
same may be amended, modified or supplemented from time
to time in accordance with its terms.
"Black River Facility" shall have the meaning set
forth in Annex A to the Project Intercreditor Agreement.
"Construction Notes" shall have the meaning set
forth in the Note Purchase Agreement.
"Deposit and Disbursement Agreement" shall mean the
Deposit and Disbursement Agreement, dated as of August
1, 1994, among Wilmington Trust Company, as Collateral
Agent, Wilmington Trust Company, as Disbursement Agent,
and Lime SPV, as said Agreement may be amended, modified
or supplemented from time
<PAGE> -17-<PAGE>
to time in accordance with the terms thereof and the
terms of the other Transaction Documents.
"Dravo Parties" shall have the meaning set forth in
the first preliminary statement to the Override
Agreement.
"Financing Documents" shall have the meaning set
forth in Annex A to the Project Intercreditor Agreement.
"Initial Funding Date" shall have the meaning set
forth in the Note Purchase Agreement.
"Lime SPV" shall mean Dravo Black River Limited
Partnership, a Delaware limited partnership.
"Longview Credit Agreement" shall mean the
$12,900,000 Loan Agreement, dated as of June 8, 1990,
between Lime and FAB, as the same may be amended,
modified or supplemented from time to time in accordance
with its terms.
"Master Common Facilities Agreement" shall mean that
certain Master Common Facilities Agreement, dated as of
August 1, 1994, between Lime and Lime SPV, as said
Agreement may be amended, modified or supplemented
from time to time in accordance with the terms thereof
and the terms of the other Transaction Documents.
"Note Purchase Agreement" shall mean that certain
Note Purchase Agreement, dated as of August 1, 1994, by
and between Lime SPV and PruPower, as said Agreement
may be amended, modified or supplemented from time to
time in accordance with the terms thereof and the terms
of the other Transaction Documents.
"Project" shall have the meaning set forth in Annex
A to the Project Intercreditor Agreement.
"Project Intercreditor Agreement" shall mean the
Intercreditor Agreement, dated as of August 1, 1994, by
and among Wilmington Trust Company, PruPower, the
Collateral Agent, FAB, PNC, Continental and Prudential,
as consented to and acknowledged by Lime and Lime SPV,
as such Agreement may be amended, modified or
supplemented from time to time in accordance with its
terms.
<PAGE> -18-<PAGE>
"Prudential" shall mean The Prudential Insurance
Company of America, acting through Prudential Capital
Group, and its successors and assigns.
"PruPower" shall mean The Prudential Insurance
Company of America, as purchaser of the Construction
Notes of Lime SPV pursuant to the Note Purchase
Agreement, and its successors and assigns.
"SPV General Partner" shall mean DBR General Inc., a
Delaware corporation.
"SPV Limited Partner" shall mean Dravo Black River
Limited Inc., a Delaware corporation.
"SPV Partner Pledge Agreement" shall mean the
Partner Security Agreement, dated as of August 1, 1994,
by the SPV General Partner and the SPV Limited Partner
in favor of the Collateral Agent, as it may be amended,
modified or supplemented from time to time in accordance
with its terms.
"SPV Stock Pledge Agreement" shall mean the Stock
Pledge Agreement, dated as of August 1, 1994, by Lime in
favor of the Collateral Agent, as it may be amended,
modified or supplemented from time to time in accordance
with its terms.
"Transaction Documents" shall have the meaning set
forth in Annex A to the Project Intercreditor Agreement.
"Unavailable Cash" shall mean any and all Project
Revenues (as defined in Annex A of the Project
Intercreditor Agreement) that, pursuant to the terms of
the Deposit and Disbursement Agreement or any other
Transaction Document, are not available for distribution
to Lime (other than any amounts paid for Debt Service
(as defined in Annex A to the Project Intercreditor
Agreement) and Operation and Maintenance Costs (as
defined in Article 4 of the Master Common Facilities
Agreement as in effect on the Initial Funding Date));
provided, however, that Unavailable Cash shall include
any expenditures made by Lime SPV for Capital Additions
or Modifications (as defined in Article 4 of the Master
Common Facilities Agreement as in effect on the Initial
Funding Date), or for any adjustments, alterations or
other physical changes to the Project of any kind
whatsoever, in excess of $1,500,000 in any calendar year
to the extent that such excess was not funded with (i)
additional
<PAGE> -19-<PAGE>
Debt of Lime SPV or (ii) any equity contribution by Lime
to Lime SPV made in accordance with Section 5.03(a)(ii) of
the Override Agreement.
ARTICLE II
SECOND AMENDMENT TO REVOLVING CREDIT AGREEMENT
2.01. Amendments to Revolving Credit Agreement The
Revolving Credit Agreement shall be, effective as of the date
hereof and subject to the satisfaction of the conditions
precedent set forth in Section 5.01 hereof, amended as follows:
(a) Amendments to Article I. Article I shall be amended
as follows:
(i) The first sentence of Section 1.1 is amended
in its entirety to read as follows:
Subject to all the terms and conditions hereof,
including without limitation Section 1.3, and so long
as there shall exist no Event of Default or
Default, Lenders, subject to the terms and
conditions hereof, agree to lend to Borrowers such
sums as Borrowers may request, from time to time,
and at any time, on a revolving basis until April 30,
1996 (as such date may be extended pursuant to
Section 1.9, the "Maturity Date"), provided that,
after giving effect to the making of any such
loans and the issuance of any Letter of Credit,
the aggregate principal amount of outstanding
revolving line of credit loans (including any loans
deemed to be made pursuant to Section 11.2 as a
result of a drawing on any Letter of Credit) plus
the Stated Amount of all outstanding Letters of
Credit (calculated after giving effect to any such
drawing) made pursuant to this Agreement shall not
at any time exceed the sum of SEVENTY FIVE MILLION
AND NO/100THS ($75,000,000.00) DOLLARS, and
provided further that the aggregate principal
amount of outstanding revolving line of credit
loans (including any loans deemed to be made
pursuant to Section 11.2 as a result of a drawing
on any Letter of Credit) plus the Stated Amount of
all outstanding Letters of Credit (calculated after
giving effect to any such drawing) made by a
Lender pursuant to this Agreement shall not
exceed the maximum limitation for each Lender
shown opposite the name of each Lender and
designated the
<PAGE> -20-<PAGE>
"Revolving Line of Credit and Letters of Credit
Facilities Combined" on Schedule I attached hereto
and made a part hereof (calculated after giving
effect to any termination of a Lender's Commitment
(as defined in Section 1.9) pursuant to Section 1.9).
amended in its entirety to read as follows:
Subject to all the terms and conditions hereof,
Borrowers may borrow, repay and reborrow at any
time or from time to time from the date hereof to
and including April 30, 1996 (unless extended in
writing pursuant to Section 1.9) or the termination
of the revolving aspects of this Agreement with
respect to advances pursuant to Section 8.1,
whichever is earlier.
(iii) The fifth sentence of Section 1.1 is amended
in its entirety to read as follows:
All sums advanced pursuant to the Revolving Line
of Credit shall be payable, as to both principal and
interest, and shall bear interest, at the rate and
in the manner stated in the Revolving Notes of
Borrowers, copies of which are attached hereto,
marked Exhibits A-1, A-2, A-3, A-4, A-5, A-6, A-7
and A-8, and expressly made a part hereof as
though fully set forth herein (the Revolving
Notes).
(iv) The sixth sentence of Section 1.1 is amended
in its entirety to read as follows:
Borrowers shall execute and deliver to Lenders
the Revolving Notes in the aggregate sum of
SEVENTY FIVE MILLION AND NO/100THS
($75,000,000.00) DOLLARS; provided, however, the
liability of Borrowers to Lenders for the principal
indebtedness of the Revolving Line of Credit shall
be limited to the net principal amount actually
advanced by Lenders to Borrowers under the
Revolving Notes.
(v) The fifth sentence of Section 1.3 is amended
in its entirety to read as follows:
The expiration date for each Letter of Credit
issued hereunder (or caused to be issued
hereunder) shall not be
<PAGE> -21-<PAGE>
later than one year after the issuance date
thereof, and no Letters of Credit issued
hereunder by a Lender (or caused to be issued by a
Lender) shall provide for an expiration date later
than April 30, 1996 (as such date may be extended
pursuant to Section 1.9).
(vi) Section 1.5 is amended by adding the
following sentence at the end thereof:
"In addition, the Borrowers agree to pay each
Lender that agrees to extend the Maturity Date
pursuant to Section 1.9 an annual renewal fee
equal to the sum of (i) 0.125% of the amount of such
Lender's Commitment and (ii) 0.625% of the excess,
if any, of (A) such Lender's Commitment over (B)
such Lender's Percentage of $69,000,000, payable
on June 30 of the year in which such Lender
agrees to such extension."
(vii) The first sentence of Section 1.6 is amended
in its entirety to read as follows:
Borrowers agree to pay to Lenders on a basis
proportionate with such respective Lender's
Revolving Line of Credit commitment hereunder
non-usage fees (the "Non-Usage Fees") in an
aggregate amount equal to one-half of one percent
(1/2 of 1%) per annum on the unutilized portion of
the $75,000,000.00 Revolving Line of Credit
payable quarterly in arrears on the fifth
business day following each calendar quarter
during the term of this Agreement.
(viii) The following new Section 1.9 is added at the
end of Article I:
Section 1.9 Extension of Maturity Date. (a)
At least 10 but not more than 60 days before each
June 30, the Borrowers may, by delivering a written
request to the Agent (each such request being
irrevocable), request that each Lender extend for
one year the Maturity Date with respect to such
Lender's Revolving Line of Credit commitment and
commitment to issue (or cause to be issued) Letters
of Credit (such commitments referred to herein
collectively, with respect to each Lender, as such
Lender's "Commitment"). The Agent shall, upon its
receipt of such a request, promptly notify each
Lender thereof, and request that each Lender
<PAGE> -22-<PAGE>
promptly advise the Agent of its approval or
rejection of such request.
(b) Upon receipt of such notification from
the Agent, each Lender may (but shall not be
required to), in its sole and absolute discretion
(notwithstanding any covenant or other provision
contained herein), agree to extend the Maturity
Date with respect to its Commitment for a period of
one year, and shall (should it determine to do so),
no later than 60 days following its receipt of such
notification, notify the Agent of its approval
concerning such request. If any Lender shall not
so notify the Agent, such Lender shall be deemed
not to have consented to such request. The Agent
shall thereupon provide written notice (the
"Extension Notice") to the Borrowers and all of the
Lenders as to the Lenders, if any, that have
consented to such request. If, within such 60-day
period, any Lender has elected not to extend (or
failed to notify the Agent of its consent to
extend) its Commitment, then each Lender that has
agreed to extend the Maturity Date may, in its sole
and absolute discretion, within ten business days
after its receipt of the Extension Notice, withdraw
its previous approval concerning such request.
(c) The Commitment of each Lender that
agrees to extend the Maturity Date shall be
extended for a period of one year, commencing on
the then-scheduled Maturity Date. If any Lender
has elected not to extend (or failed to notify the
Agent of its consent to extend) its Commitment,
such Lender's Commitment shall terminate
automatically on the then-scheduled Maturity
Date, and the Borrowers shall be required to repay
on such date the outstanding principal amount of
all Revolving Line of Credit loans, if any, made by
such Lender, together with accrued interest, fees
and all other amounts then payable to such Lender
pursuant to this Agreement; provided, however,
that the Borrowers may, provided that no Default
or Event of Default shall then have occurred and
be continuing, demand that such Lender assign to
one or more financial institutions designated by
the Borrowers (a "Replacement Lender"), on terms
and conditions reasonably acceptable to such
Lender, all (but not less than all) of such Lender's
Commitment and the Revolving Line of Credit
advances owing to it, which assignment shall be
consummated within 45 days after such Lender
notifies the
<PAGE> -23-<PAGE>
Agent of its election not to extend its Commitment
(or, if such Lender fails to notify the Agent of its
consent to extend, within 45 days after such
Lender is deemed to have failed to consent to such
extension). The Borrower shall, as a condition to
the effectiveness of any such assignment, cause
the replacement of all Letters of Credit issued by
such Lender with Letters of Credit issued by the
Replacement Lender. The Borrowers shall notify
the Lenders of any proposed Replacement Lender
no later than ten days prior to the effectiveness
of any such assignment. If, prior to the end of
such 45-day period, any Lender that has agreed to
extend the Maturity Date notifies the Borrowers
that any proposed Replacement Lender is not
acceptable to it, such Lender may withdraw its
previous approval concerning such extension.
(b) Amendment to Article V. Section 5.1(b)(1) is
amended by inserting the phrase "and in the Note
Purchase Agreement" immediately following the phrase
"the representations and warranties of the Dravo
Parties set forth herein".
(c) Amendments to Article IX. Article IX shall be
amended as follows:
(i) The first sentence of Section 9.1(a) is
amended in its entirety to read as follows:
Lenders agree as between themselves that upon
receipt of a request for an advance hereunder by
Borrowers (or either of them), and so long as there
shall exist no Event of Default or Default, FAB will
advance 31.88% of such request, PNC will advance
24.64% of such request, Continental will advance
28.99% of such request and Prudential will advance
14.49% of such request (each such percentage
referred to herein as such Lender's "Percentage";
provided, however, that in no event shall the
aggregate principal amount of the Revolving Line
of Credit loans made hereunder by Lenders exceed
$75,000,000.00.
(ii) Section 9.1 is further amended by adding the
following new subsections (c), (d) and (e) at the end
thereof:
(c) Notwithstanding subsections (a) and (b)
above, in the event that any Lender does not agree
to provide any funds (to the extent that such
funds are not otherwise
<PAGE> -24-<PAGE>
available to be borrowed by the Borrowers from
such Lender pursuant to this Agreement) for (i) the
cure of any defaults pursuant to Article 6 of the
Project Intercreditor Agreement or (ii) the
purchase price of any assets sold by Lime SPV in
connection with the exercise by the Lenders of any
right of first refusal pursuant to Section
5.03(a)(iv)(2) of the Override Agreement, the
Lenders that agree to provide such funds (the
"Funding Lenders") shall advance such funds on a
pro rata basis, based on the proportion of each
Funding Lender's Commitment to the aggregate
amount of the Commitments of the Funding Lenders.
So long as no Event of Default shall have occurred
and be continuing, notwithstanding Section 11.7,
any amounts of principal prepaid or repaid by the
Borrowers pursuant to this Agreement shall be
applied, first, to the repayment of all advances
made by the Funding Lenders pursuant to clauses
(i) and (ii) above (on a pro rata basis based on the
amount of advances made by each of the Funding
Lenders) and second, to the repayment of all other
amounts owing to the Lenders hereunder (on a pro
rata basis in accordance with their respective
percentages set forth in subsection (a) above), in
each case otherwise in accordance with this
Agreement. Upon the occurrence and during the
continuance of an Event of Default, any amounts
of principal prepaid or repaid by the Borrowers or
otherwise realized pursuant to any Security
Document shall be applied on a pro rata basis in
accordance with the percentages of the Lenders
set forth in subsection (a) above. Any funds
provided by a Funding Lender pursuant to clauses
(i) and (ii) above shall be deemed to be a Revolving
Line of Credit advance made by such Lender to the
Borrowers, and the Borrowers shall be obligated to
repay such advances pursuant to the terms
hereof. In furtherance of the foregoing, any
purchase of assets pursuant to clause (ii) above
shall be made on behalf of Lime, and Lime shall be
the legal and beneficial owner of such assets.
(d) In connection with any advances made
by the Funding Lenders pursuant to subsection (c)
above, the Companies shall execute such
agreements, documents and instruments (including,
without limitation, additional promissory notes),
and take such further actions, as any Funding
Lender may reasonably request.
<PAGE> -25-<PAGE>
(e) Notwithstanding anything to the
contrary contained herein, in order to effect the
cure of any default pursuant to Article 6 of the
Project Intercreditor Agreement, the Lenders shall
have the right (but not the obligation) to advance
funds on behalf of the Borrowers and to make any
payments directly to any Persons (other than the
Borrowers) to the extent necessary to cure such
default.
(d) Amendment to Article XI. The third sentence
of Section 11.1 is amended by adding the phrase "provided,
however, that until such time as the Additional Notes are
paid in full and cancelled, all payments and prepayments
of principal by the Borrowers shall be applied, first, to
the payment of any amounts of principal outstanding
under the Additional Notes and, second, to the payment
of any amounts of principal outstanding under the other
Revolving Notes" immediately preceding the period at the
end thereof.
(e) Amendment to Article XIII. The address for
notices to Prudential contained in Section 13.6 shall be
amended in its entirety to read as follows (and such
address shall be used for all notices under the
Operative Documents):
The Prudential Insurance Company of
America
c/o Prudential Capital Corporation
Three Gateway Center
100 Mulberry Street
Newark, New Jersey 07102
Attention: Investment Adminstration
Unit
With a copy to:
Until September 15, 1994:
The Prudential Insurance Company of
America
c/o Prudential Capital Group
One Atlantic Center, Suite 3050
1201 West Peachtree Street
Atlanta, Georgia 30309
Attention: Managing Director
<PAGE> -26-<PAGE>
On and after September 15, 1994:
The Prudential Insurance Company of
America
c/o Prudential Capital Group
1230 Peachtree Street, Suite 2525
Atlanta, Georgia 30309
Attention: Managing Director
And to:
Patricia Ferrari, Esq.
King & Spalding
120 West 45th Street
New York, New York 10036
(f) Schedules and Exhibits. Schedules I and II to
the Revolving Credit Agreement are deleted in their
entirety and Schedules I and II attached hereto are
substituted therefor, respectively. Exhibits A-1, A-2,
A-3 and A-4 to the Revolving Credit Agreement are
deleted in their entirety and Exhibits A-1, A-2, A-3 and
A-4 attached hereto are substituted therefor,
respectively. Exhibits A-5, A-6, A-7 and A-8 attached
hereto are hereby added as Exhibits A-5, A-6, A-7 and A-
8, respectively, to the Revolving Credit Agreement.
ARTICLE III
AMENDMENTS TO INTERCREDITOR AGREEMENT
3.01. Amendments to Intercreditor Agreement The
Intercreditor Agreement shall be, effective as of the date
hereof and subject to the satisfaction of the conditions
precedent set forth in Section 5.01 hereof, amended as follows:
(a) Amendments to Section 1. Section 1 shall be amended
by adding the following new subsections (j), (k), (l), (m), (n) and (o)
at the end thereof:
"(j) Notwithstanding the terms of the Override
Agreement or any Transaction Document, in the event
that the Collateral Agent receives notice pursuant to
the first sentence of Article 5 of the
<PAGE> -27-<PAGE>
Project Intercreditor Agreement, the Collateral Agent
shall take actions pursuant to said Article 5 only at the
direction of the Majority Lenders; provided, however,
that any Secured Party that does not concur in the
directions of the Majority Lenders shall not be obligated
to provide any funds for the purchase price of the
"Existing Creditors Call Option" (as defined in said
Article 5), unless such funds are otherwise available to
be borrowed by the Companies from such Secured Party
pursuant to the Revolving Credit Agreement and the
Companies so request such borrowing pursuant to the
terms thereof.
(k) Notwithstanding the terms of the Override
Agreement or any Transaction Document, the Collateral
Agent shall take actions pursuant to Article 6 of the
Project Intercreditor Agreement only at the direction of
the Majority Lenders; provided, however, that any
Secured Party that does not concur in the directions of
the Majority Lenders shall not be obligated to provide
any funds for the cure of any defaults pursuant to said
Article 6, unless such funds are otherwise available to
be borrowed by the Companies from such Secured Party
pursuant to the Revolving Credit Agreement and the
Companies so request such borrowing pursuant to the
terms thereof.
(l) Notwithstanding the terms of the Override
Agreement or any Transaction Document, the Collateral
Agent shall take actions pursuant to Section 3.3(vi) of
the Project Intercreditor Agreement only at the
direction of the Majority Lenders.
(m) Notwithstanding the terms of the Override
Agreement or any Transaction Document, the Collateral
Agent shall agree to amendments of (i) Article III of the
Master Common Facilities Agreement only with the
consent or at the direction of all of the Secured
Parties, (ii) any provisions in the Master Common
Facilities Agreement regarding the use or disposition of
any Collateral only with the consent or at the direction
of all of the Secured Parties, and (iii) any other
provisions in the Master Common Facility Agreement only
with the consent or at the direction of the Majority
Lenders.
(n) The Secured Parties hereby consent to the
execution and delivery by the Collateral Agent of the
following documents on or before the Initial Funding
Date: (i) amendments to the Basic Mortgage and the Lime
Mortgages, in substantially the form of Exhibits B-1, B-
2, B-3 and B-4 attached to the Amendment Agreement,
dated as of August 1, 1994, among the Dravo Parties, the
Lenders and FAB, as agent for the Lenders; (ii) the
Mortgage
<PAGE> -28-<PAGE>
Subordination Agreement, dated as of August 1, 1994, by
and between the Collateral Agent and Lime SPV; (iii) the
Assignment and Security Agreement; (iv) the SPV Stock
Pledge Agreement; (v) the SPV Partner Pledge Agreement;
(vi) UCC-1 financing statements with respect to the
collateral described in the Assignment and Security
Agreement, the SPV Partner Pledge Agreement and the
amendments described in clause (i) above; (vii) a Deed of
Partial Release (the "Release") with respect to certain
improvements located on the Site (as defined in the Note
Purchase Agreement) that will be owned by Lime SPV; and
(viii) UCC-3 financing statement amendments with
respect to the property described in the Release and in
the Warranty Bill of Sale and Assignment, dated as of
August 1, 1994, by Lime to Lime SPV.
(o) Each Secured Party shall have the right, but
not the obligation, to provide funds for the purchase
price of the "Existing Creditors Call Option" (as defined
in Article 5 of the Project Intercreditor Agreement) in
an amount equal to such Secured Party's Percentage (as
defined in Section 9.1(a) of the Revolving Credit
Agreement) of such purchase price (or such lesser or
greater amount as such Secured Party may agree to
provide)."
ARTICLE IV
AMENDMENTS TO SECURITY AGREEMENT
4.01. Amendments to Security Agreement The Security
Agreement shall be, effective as of the date hereof and subject
to the satisfaction of the conditions precedent set forth in
Section 5.01 hereof, amended as follows:
(a) Amendments to Section 1. Section 1 shall be amended
as follows:
(i) The definition "Collateral" is amended by
deleting the word "and" at the end of subsection (g)
thereof, by redesignating subsection "(h)" as subsection
"(i)", and by adding the following new subsection (h)
immediately after subsection (g) thereof:
"(g) all machinery, furnishings,
accessories and equipment of the Companies in all
of its forms, wherever located (including, without
limitation, all machinery and equipment set forth
in Schedule VII attached hereto), now or
<PAGE> -29-<PAGE>
hereafter existing, all fixtures and all parts
thereof and all accessions thereto, and any
additions, substitutions or replacements thereof;
and"
(ii) The definition "Assigned Contracts" is
amended by adding the following phrase immediately
preceding the period at the end thereof:
", and the contracts set forth on Schedule
VII attached hereto"
(b) Schedule VII attached hereto is hereby designated
as "Schedule VII" to the Security Agreement and shall be deemed
to be attached thereto and made a part thereof.
ARTICLE V
CONDITIONS PRECEDENT
5.01. Conditions of Effectiveness This Amendment shall
become effective when, and only when, (a) the Agent shall have
received counterparts of this Amendment executed by each of
the Dravo Parties and the Lenders, (b) all accrued but unpaid
interest, fees and expenses under the terms of the Revolving
Credit Agreement, as amended hereby, all fees set forth in the
Lenders Fee Letter (as defined below) and the Prudential Fee
Letter (as defined below), and all outstanding fees and
expenses of counsel to the Agent and the Lenders, shall have
been paid in full to the extent due and payable after giving
effect to this Amendment, (c) the Agent additionally shall have
received all of the following documents, each (unless otherwise
indicated) being dated the date of receipt thereof by the Agent
(which date shall be the same for all such documents), in form
and substance satisfactory to the Agent and the Lenders:
(i) Copies of (A) all documents evidencing all
requisite corporate action of each Dravo Party
(including any and all resolutions of the Board of
Directors of each Dravo Party) authorizing the
execution, delivery and performance of this Amendment
and the matters contemplated hereby and thereby, (B) all
documents evidencing all Governmental Approvals, if any,
with respect to this Amendment and the matters
contemplated hereby and thereby, (C) the certificate or
articles of incorporation (certified as of a recent date
by the Secretary of the State of its jurisdiction of
incorporation) and by-laws of each Dravo Party, the SPV
General
<PAGE> -30-<PAGE>
Partner and the SPV Limited Partner, (D) the agreement
of limited partnership and the certificate of limited
partnership of Lime SPV, and (E) each Transaction
Document, in each case certified by the Secretary or an
Assistant Secretary of the relevant Dravo Party as
being in full force and effect and not having been
modified, rescinded or revoked and, in the case of clause
(E) above, as being true and correct copies of all of the
Transaction Documents.
(ii) A good standing certificate issued by the
Secretary of State of its incorporation and certificates
of qualification to do business as a foreign corporation
for each Dravo Party issued by the Secretary of State
of each State in which such Dravo Party is required by
law to be qualified to do business, each dated as of a
date not more than five days prior to the date hereof.
(iii) A certificate of the Secretary or an
Assistant Secretary of each Dravo Party certifying the
names and true signatures of the officers authorized to
sign this Amendment on behalf of such Dravo Party and,
in the case of Lime and Basic, the amendments to the
Lime Mortgages and the Basic Mortgage, and any other
documents to be delivered by such Dravo Party
hereunder or thereunder.
(iv) Duly executed copies of the Notes, in
substantially the forms of Exhibits A-1, A-2, A-3, A-4, A-
5, A-6, A-7 and A-8 attached hereto.
(v) A duly executed copy of the SPV Stock Pledge
Agreement, granting to the Lenders a second priority
Lien on the capital stock of the SPV General Partner and
the SPV Limited Partner.
(vi) A duly executed copy of the SPV Partner
Pledge Agreement, granting to the Lenders a second
priority Lien on the partnership interests of the SPV
General Partner and the SPV Limited Partner in Lime SPV.
(vii) A duly executed copy of an amendment to each
of the Basic Mortgage and the Lime Mortgages, in
substantially the form of Exhibits B-1, B-2, B-3 and B-4,
respectively, attached hereto (the "Mortgage
Amendments").
(viii) A duly executed copy of the Assignment and
Security Agreement.
<PAGE> -31-<PAGE>
(ix) Evidence satisfactory to the Agent of the
completion of all recordings, notices and filings
necessary to perfect the Liens created of the SPV
Partner Pledge Agreement, the SPV Stock Pledge
Agreement, the Assignment and Security Agreement and
the Mortgage Amendments.
(x) A signed copy of a commitment for title
insurance providing for a date-down endorsement to the
title insurance policies issued by Commonwealth Land
Title Insurance Company, Loan Policy Numbers E0836267,
E0835807, E0836263 and E0836659, containing such
exceptions as the Lenders may determine to be
acceptable.
(xi) An executed copy of (A) the fee letter from
the Dravo Parties to the Lenders (the Lenders Fee
Letter), setting forth certain fees payable to the
Lenders on the date of effectiveness of this Amendment
(the Effective Date) and (B) the fee letter from the
Dravo Parties to Prudential (the Prudential Fee Letter),
setting forth certain fees payable to Prudential on the
Effective Date.
(xii) The six outstanding Letters of Credit issued
by the Lenders pursuant to the Revolving Credit
Agreement shall have been replaced with new Letters of
Credit, each in form and substance satisfactory to the
Lenders.
(xiii) Each of the conditions precedent set forth
in Section 5 of the Note Purchase Agreement shall have
been fulfilled to the satisfaction of, or waived by,
PruPower and PruPower shall have purchased the
Construction Notes.
(xiv) A favorable opinion of Buchanan Ingersoll,
Professional Corporation, special counsel for the Dravo
Parties, in substantially the form of Exhibit D-1
attached hereto.
(xv) An opinion from legal counsel licensed to
practice in each State in which the property covered by
the Lime Mortgages and the Basic Mortgage is located, in
substantially the form of Exhibit D-2 attached hereto.
(xvi) Such other documents, instruments,
approvals (and, if required by the Agent, certified
duplicates of executed copies thereof) or opinions as
the Agent or any Lender may reasonably request.
<PAGE> -32-<PAGE>
(d) The representations and warranties contained
herein shall be true on and as of the Effective Date; there
shall exist on the Effective Date no Event of Default or
Default; there shall exist no material adverse change in the
financial condition, business operation or prospects of any
Dravo Party or its Subsidiaries since December 31, 1993; and
each Dravo Party shall have delivered to the Lenders an
Officer's Certificate, dated the Effective Date, with respect
thereto.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.01. Representations and Warranties of the Dravo
Parties (a) Each of the Dravo Parties hereby repeats and
confirms each of the representations and warranties made by it
in Article VII of the Override Agreement, as amended hereby, as
though made on and as of the date hereof, with each reference
therein to "this Agreement", the "Operative Documents",
"hereof", "hereunder", "thereof", "thereunder" and words of like
import being deemed to be a reference to the Override
Agreement and the Operative Documents, in each case as
amended hereby.
(b) Each of the Dravo Parties represents and
warrants as follows:
(i) Such Dravo Party and each of its
Subsidiaries (other than Lime SPV) is a corporation duly
organized, validly existing and in good standing under
the laws of the state of its incorporation and is duly
qualified to do business in, and is in good standing in,
all other jurisdictions where the nature of its business
or the nature of property owned or used by it makes such
qualification necessary.
(ii) Lime SPV is a limited partnership duly
organized, validly existing and in good standing under
the laws of the state of its organization and is duly
qualified to do business in, and is in good standing in,
all other jurisdictions where the nature of its business
or the nature of property owned or used by it makes such
qualification necessary.
(iii) The execution, delivery and performance by
such Dravo Party of this Amendment are within its
corporate powers, have been duly authorized by all
necessary corporate action and do not contravene (A)
such Dravo Party's charter or by-laws, (B) law or (C) any
legal or contractual restriction binding on or affecting
such Dravo Party; and such execution, delivery and
performance do not
<PAGE> -33-<PAGE>
or will not result in or require the creation of any Lien
(other than as contemplated hereby) upon or with respect
to any of its properties.
(iv) No Governmental Approval is required for the
due execution, delivery and performance by such Dravo
Party of this Amendment, except for such Governmental
Approvals as have been duly obtained or made and which
are in full force and effect on the date hereof and not
subject to appeal.
(v) This Amendment constitutes the legal, valid
and binding obligations of such Dravo Party enforceable
against such Dravo Party in accordance with its terms;
subject to the qualifications, however, that the
enforcement of the rights and remedies herein is
subject to bankruptcy and other similar laws of general
application affecting rights and remedies of creditors
and that the remedy of specific performance or of
injunctive relief is subject to the discretion of the
court before which any proceedings therefor may be
brought.
(vi) Except as set forth in the Litigation Status
Report, dated August 3, 1994, from James J. Puhala, Vice
President, General Counsel and Secretary of Dravo, a
copy of which has been delivered to each of the Lenders,
there are no pending or threatened actions, suits or
proceedings affecting such Dravo Party or any of its
Subsidiaries or the properties of such Dravo Party or
any of its Subsidiaries before any court, governmental
agency or arbitrator, that may, if adversely determined,
materially adversely affect the financial condition,
properties, business, operations or prospects of such
Dravo Party and it Subsidiaries, considered as a whole,
or affect the legality, validity or enforceability of the
Override Agreement or any other Operative Document, in
each case as amended by this Amendment.
ARTICLE VII
MISCELLANEOUS
7.01. Reference to and Effect on the Operative
Documents (a) Upon the effectiveness of this Amendment, on and
after the date hereof each reference in the Revolving Credit
Agreement and the Override Agreement to "this Agreement",
"hereunder", "hereof" or words of like import referring to the
Revolving Credit Agreement and the Override Agreement,
respectively, and each reference in the other Operative
Documents to "the Revolving
<PAGE> -34-<PAGE>
Credit Agreement", "the Override Agreement", "thereunder",
"thereof" or words of like import referring to the Revolving
Credit Agreement and the Override Agreement, shall mean and be
a reference to the Revolving Credit Agreement and the Override
Agreement, respectively, as amended hereby.
(b) Except as specifically amended above, the
Revolving Credit Agreement, the Override Agreement and the
Notes, and all other Operative Documents, are and shall
continue to be in full force and effect and are hereby in all
respects ratified and confirmed. Without limiting the
generality of the foregoing, the Security Documents and all of
the Collateral described therein do and shall continue to
secure the payment of all obligations of the Dravo Parties
under the Revolving Credit Agreement, the Notes and the other
Operative Documents, in each case as amended hereby.
(c) The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein,
operate as a waiver of any right, power or remedy of any Lender
or the Agent under any of the Operative Documents, nor
constitute a waiver of any provision of any of the Operative
Documents.
7.02. Consent to Project Intercreditor Agreement The
Dravo Parties hereby consent to the terms and conditions of
the Project Intercreditor Agreement and to the Lenders
entering into such Agreement.
7.03. Costs and Expenses The Dravo Parties jointly and
severally agree to pay on demand all costs and expenses
incurred by the Agent and the Lenders in connection with the
preparation, execution and delivery of this Amendment, the
Transaction Documents and the other documents to be delivered
hereunder and thereunder, including, without limitation, the
reasonable fees and out-of-pocket expenses of counsel for the
Agent and the Lenders with respect thereto and with respect to
advising the Agent and the Lenders as to their rights and
responsibilities under this Amendment. The Dravo Parties
jointly and severally further agree to pay on demand all costs
and expenses, if any (including, without limitation, reasonable
counsel fees and expenses of counsel), incurred by the Agent
and the Lenders in connection with the enforcement (whether
through negotiations, legal proceedings or otherwise) of this
Amendment, the Transaction Documents and the other documents
to be delivered hereunder and thereunder, including, without
limitation, counsel fees and expenses in connection with the
enforcement of rights under this Section 7.03.
7.04. Execution in Counterparts This Amendment may be
executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so
executed and delivered shall be
<PAGE> -35-<PAGE>
deemed to be an original and all of which taken together shall
constitute but one and the same instrument.
7.05. Governing Law This Amendment shall be governed
by, and construed in accordance with, the laws of the State of
New York.
[Signatures on Next Two Pages.]
<PAGE> -36-<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers
thereunto duly authorized, as of the date first above written.
FIRST ALABAMA BANK
By F. W. TAUL
Name: F. W. Taul
Title: Executive Vice President
PNC BANK, NATIONAL ASSOCIATION
By RICHARD D. RODGERS
Name: Richard D. Rogers
Title: Vice President
CONTINENTAL BANK
By ADAM BALBACH
Name: Adam Balbach
Title: Vice President
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By CATHERINE A. CATES
Vice President
<PAGE> -37,38,39-<PAGE>
DRAVO CORPORATION
By ERNEST F. LADD III
Name: Ernest F. Ladd III
Title: Executive Vice President
DRAVO LIME COMPANY
By ERNEST F. LADD III
Name: Ernest F. Ladd III
Title: Executive Vice President
DRAVO BASIC MATERIALS
COMPANY, INC.
By ERNEST F. LADD III
Name: Ernest F. Ladd III
Title: Executive Vice President
<PAGE> -40-<PAGE>
SCHEDULE I
SCHEDULE I TO REVOLVING CREDIT AGREEMENT
Financing Commitments
(Expressed in Millions)
FIRST ALABAMA BANK
- Revolving Line of Credit and Letters
of Credit Facilities Combined $23.91
PNC BANK, NATIONAL ASSOCIATION
- Revolving Line of Credit and Letters
of Credit Facilities Combined $18.48
CONTINENTAL BANK
- Revolving Line of Credit and Letters
of Credit Facilities Combined $21.74
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
- Revolving Line of Credit and Letters
of Credit Facilities Combined $10.87
TOTAL $75.0
<PAGE> -41-<PAGE>
SCHEDULE II
SCHEDULE II TO REVOLVING CREDIT AGREEMENT
Maximum Stated Amount of Letters of Credit
To Be Issued (or Cause To Be Issued) By Lenders
Lender's
Stated Amount Percentage
FIRST ALABAMA BANK $3,179,905.00 31.88%
PNC BANK, NATIONAL $2,457,740.00 24.64%
ASSOCIATION
CONTINENTAL BANK $2,891,635.00 28.99%
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA $1,445,320.00 14.49%
TOTAL $9,974,600.00 100.00%
<PAGE> -42-<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DRAVO CORPORATION
(Registrant)
Date: November 15, 1994 /s/ERNEST F. LADD III
Ernest F. Ladd III
Executive Vice President,
Finance and Administration
Date: November 15, 1994 /s/LARRY J. WALKER
Larry J. Walker
Controller
(Principal Accounting Officer)
