1
EXHIBIT 4.9
REIMBURSEMENT AGREEMENT
DATED AS OF FEBRUARY 29, 1996
BETWEEN
THE HUNTINGTON NATIONAL BANK
AND
MCINNES STEEL COMPANY
Relating to
Erie County Industrial Development Authority Variable Rate Demand
Industrial Development Revenue Bonds
(McInnes Steel Company Project)
Porter, Wright, Morris & Arthur
41 South High Street
Columbus, Ohio 43215
2
TABLE OF CONTENTS
1. Definitions And Accounting Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Use of Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.3 Accounting Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.4 Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2. Letter of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3. Letter of Credit Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.1 Security Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.2 Other Documents and Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.3 Right of Set-Off Against the Borrower;
Additional Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4. Conditions to Issuance and Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.1 Conditions to Issuance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.2 Confirmation of Filing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.3 Closing of Other Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5. Reimbursement and Other Payments; Extension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.1 Reimbursement and Other Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.2 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.3 Increased Costs Due to Change in Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.4 Obligations Absolute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.5 Termination and Extension of Letter of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.6 Pledge of Custody Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.7 Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6. Events of Default and Remedies Upon Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.2 Remedies Upon Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.3 Cumulative Remedies; No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.1 Nonliability of the Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.2 No Representations by the Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.3 No Third Parties Benefitted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.4 Indemnity by the Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.5 Commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
-i-
3
7.6 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.7 Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.8 Amendments; Consents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.9 Cumulative Remedies; No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.10 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.11 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.12 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.13 Severability of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.14 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.15 Time of the Essence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.16 WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
-ii-
4
REIMBURSEMENT AGREEMENT
THIS REIMBURSEMENT AGREEMENT is entered into as of February 29, 1996, by
and between MCINNES STEEL, INC., a Pennsylvania corporation (the "Borrower")
and THE HUNTINGTON NATIONAL BANK, a national banking association (the "Bank").
1. Definitions And Accounting Terms.
1.1 Defined Terms. As used in this Reimbursement Agreement, the following
terms shall have the meaning set forth respectively after each:
"Agreement" means this Reimbursement Agreement, either as originally
executed or as it may from time to time be supplemented or amended.
"ALTA Policy" means the policy of title insurance covering the Property
required pursuant to Section 4.1.1 (f) of this Agreement.
"Authority" means the Erie County Industrial Development Authority, its
successors and assigns.
"Bond Documents" means all of the instruments and agreements which have
been or may hereafter be executed from time to time by the Trustee, the
Authority and/or the Borrower in connection with the Bonds, including without
limitation the following, as from time to time supplemented or amended:
(i) the Trust Indenture; and
(ii) the Bonds.
"Bonds" means the Erie County Industrial Development Authority Variable
Rate Industrial Development Revenue Bonds, (McInnes Steel Company Project),
Series 1991.
"Borrower's Representative" means each of one or more Persons authorized
in writing from time to time by the Borrower, with the approval of the Bank, to
deliver certificates and other documents, instruments and material to the Bank
pursuant to this Agreement.
"Business Day" means any day of the year, other than (a) a Saturday; (b) a
Sunday; (c) a day on which commercial banks located in any one or more of the
cities in which the principal corporate trust office of the Trustee, the
principal offices of the Bank and/or the Remarketing Agent are located are
required or authorized by law to remain closed; or (d) a day on which the New
York Stock Exchange is closed.
"Custody Bonds" shall have the meaning ascribed thereto in Section 4.04(a)
of the Trust Indenture and are pledged by the Borrower to the Bank pursuant to
Section 5.6 of this Agreement.
5
"Event of Default" means each of those events so designated in Article 6
of this Agreement.
"Financing Statements" means the UCC-1 financing statements covering the
personal property in which security interests are created pursuant to the
Letter of Credit Documents required pursuant to Section 3.1(b) of this
Agreement, as from time to time supplemented or amended.
"GAAP" means generally accepted accounting principles applied on a
consistent basis.
"Improvements" means the improvements now or hereafter located on the
Property.
"Letter of Credit" means the letter of credit to be issued by the Bank
pursuant to this Agreement, either as originally executed or as it may from
time to time be modified, extended, renewed or replaced.
"Letter of Credit Documents" means, collectively, this Agreement and the
Security Documents, as from time to time supplemented or amended with the
written consent of the Bank.
"Loan Agreement" means the Loan and Security Agreement between the
Borrower (among others) and the Bank;, dated February 29, 1996, as from time to
time supplemented or amended.
"Loans" shall have the meaning attributed thereto in the Loan Agreement.
"Mortgage" means the Open-End Mortgage, Assignment of Rents and Security
Agreement of even date herewith executed and delivered by the Authority and the
Borrower to the Bank, as from time to time supplemented or amended with the
written consent of the Bank.
"Permitted Encumbrances" means the utility, access and other easements,
rights-of-way, mineral rights, restrictions and exceptions of record,
encumbrances, irregularities and clouds on title encumbering the Property and
described in Schedule B - I, or described as subordinated to the lien of the
Mortgage on Schedule B - 2, of the policy of title insurance in favor of the
Bank insuring the lien of the Mortgage on the Property, as from time to time
supplemented or amended with the prior written consent of the Bank.
"Person" means and includes an individual, corporation, partnership,
limited liability company, trust, unincorporated organization or association
and a government or any department or agency thereof.
-2-
6
"Personal Property" means all of the Borrower's right, title and interest
in and to all inventory, equipment, furnishings and fixtures now owned or
hereafter acquired, located on, or used in connection with, the Property; all
permits, licenses and approvals necessary to operate the Project; and all of
the Borrower's accounts, including without limitation those arising from all
the rents and revenues of the Project, including those now due, past due, or to
become due, by virtue of any lease, license or other agreement for the
occupancy or use of all, or any portion, of the Project.
"Prime Rate" means the interest rate per annum established by The
Huntington National Bank from time to time as such bank's prime commercial rate
based on its consideration of economic, money market, business and competitive
factors, and is not necessarily such bank's most favored rate. Subject to any
minimum or maximum rate limitations specified by applicable law, the Prime Rate
will automatically and immediately change from time to time effective as of the
effective date of each such change in the prime commercial rate of such bank.
"Project" means the Property, the Project Facilities and the Personal
Property, which are owned and operated by the Borrower.
"Project Facilities" means the manufacturing facility described in Exhibit
B hereto, together with any additions, modifications and substitutions to those
facilities.
"Property" means the approximately 6.497-acre tract of real estate located
in Erie, Pennsylvania, in which the Authority owns fee simple title and the
Borrower owns a land contract vendee's interest, upon which the Project
Facilities are located, which real estate is more fully described in the
Mortgage.
"Remarketing Agent" means the Remarketing Agent as designated from time to
time pursuant to the provisions of the Trust Indenture.
"Security Documents" means, collectively, the Mortgage, the Financing
Statements, and any other deed of trust, mortgage, hypothecated mortgage,
security agreement, financing statement, guaranty or assignment now, heretofore
or hereafter executed to secure the obligations of the Borrower under this
Agreement, in each case either as originally executed or as the same may from
time to time be supplemented or amended with the written consent of the Bank.
"Trustee" means PNC Bank, National Association, a national banking
association, successor to Marine Bank, with its principal corporate trust
office located in Erie, Pennsylvania, or its successors as trustee under the
Trust Indenture.
"Trust Indenture" means the Trust Indenture dated as of November 1, 1991,
executed and delivered between the Authority and the Trustee, as from time to
time supplemented or amended.
-3-
7
1.2 Use of Defined Terms. All capitalized terms used and not otherwise
defined herein shall have the meaning ascribed thereto in the Loan Agreement.
Any defined term used in the plural shall refer to all members of the relevant
class, and any defined term used in the singular shall refer to any number of
the members of the relevant class.
1.3 Accounting Terms. All accounting terms not specifically defined in
this Agreement shall be construed in conformity with, and all financial data
required to be submitted by this Agreement shall be prepared in conformity
with, GAAP.
1.4 Exhibits. All Exhibits to this Agreement, either as now existing or as
the
2. Letter of Credit. The Borrower entered into the Bond Documents in order
to cause the issuance of the Bonds, so that the Bond Proceeds could be used to
finance the Project. Among other credit facilities to be extended to the
Borrower and related Persons by the Bank, as more fully described in the Loan
Agreement, the Borrower has requested the Bank to issue an irrevocable letter
of credit in the form attached hereto as Exhibit "A" to replace a letter of
credit currently securing repayment of the Bonds and issued by PNC Bank,
National Association. The Letter of Credit shall have a stated amount in an
aggregate amount not exceeding $4,610,959 of which an amount not exceeding
$4,500,000 shall be available to pay the principal amount of the Bonds or the
principal portion of the purchase price of the Bonds, and an amount not
exceeding $110,959 shall be available to pay for interest accrued on the Bonds
or the interest portion of the purchase price of the Bonds for up to a maximum
of 60 days at the actual interest rate on the Bonds not to exceed an interest
rate of 15% per annum, all as more particularly provided in the Letter of
Credit. The Bank is willing to issue the Letter of Credit on the terms and
conditions contained in this Agreement, the other Letter of Credit Documents
and the Loan Agreement.
3. Letter of Credit Documents.
3.1 Security Documents. In consideration of the Bank's entry into this
Agreement and the other Letter of Credit Documents, and as security for the
prompt payment when due of all sums of principal, purchase price and interest
advanced by the Bank pursuant to the Letter of Credit as well as for payment of
any other sums owing pursuant to the Loan Agreement, this Agreement or any of
the other Letter of Credit Documents, together with any and all extensions,
renewals, modifications and amendments thereof and as security for the
performance and observance of all of the covenants, agreements and conditions
contained in the Letter of Credit, the Loan Agreement, this Agreement and all
of the other Letter of Credit Documents, the Borrower shall, at its sole
expense, execute and deliver or cause to be executed and delivered to the Bank
and record or cause to be recorded, if appropriate, the following documents,
each of which shall be in such form and content, and executed by such persons
and/or entities, as the Bank shall in its reasonable discretion require:
(a) the Mortgage; and
-4-
8
(b) the Financing Statements.
3.2 Other Documents and Actions. The Borrower agrees to execute,
acknowledge and/or deliver or cause to be executed, acknowledged and/or
delivered to the Bank such other instruments, agreements and documents, and to
take such actions, upon request by the Bank, as the Bank may reasonably require
in order to carry out the purposes of the Loan Agreement, this Agreement and
the other Letter of Credit Documents, and the transactions contemplated
thereby, and to protect and/or further the validity, priority and/or
enforceability of the Security Documents or subject to the Security Documents
and the security interests thereby created, any property, together with any
renewals, additions, substitutions, replacements or betterments thereto,
intended by the terms of the Loan Agreement, this Agreement or the other Letter
of Credit Documents to be covered by the Security Documents.
3.3 Right of Set-Off Against the Borrower; Additional Collateral.
(a) Upon the occurrence and during the continuance of any Event of Default
hereunder, the Bank is hereby authorized at any time and from time to time,
without prior notice to the Borrower (any such notice being expressly waived by
the Borrower) and to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by the Bank to or for
the credit or the account of the Borrower, against any and all of the
obligations of the Borrower now or hereafter existing under this Agreement, the
Loan Agreement or the Letter of Credit Documents, irrespective of whether or
not the Bank shall have made any demand hereunder and although such obligations
may be unmatured.
(b) The Bank agrees promptly to notify the Borrower after any such set-off
and application, provided that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of the Bank under this
Section 3.3 are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which the Bank may have.
4. Conditions to Issuance and Closing.
4.1 Conditions to Issuance. The obligation of the Bank to issue the Letter
of Credit is subject to the following conditions precedent, in addition to and
not in lieu of those set forth in the Loan Agreement, unless specifically
waived in writing by the Bank:
4.1.1 The Bank shall have received all of the following, each of which
shall be in form and substance satisfactory to the Bank:
(a) manually executed counterparts of the Letter of Credit
Documents and the fees and expenses required by Section 5.1 of this
Agreement to be paid on the date of issuance of the Letter of Credit;
-5-
9
(b) all of the opinions, certificates, and other documents
specified in Section 7.07 of the Trust Indenture (except to the extent
that such opinions, certificates and other documents are for the
benefit of the Trustee and are waived by the Trustee) or requested by
the Bank pursuant to the Loan Agreement and the Letter of Credit
Documents;
(c) a written opinion of counsel for the Borrower in form and
substance satisfactory to the Bank;
(d) a written opinion of counsel, in form and substance
satisfactory to the Bank, covering such matters relating to the Bond
Documents as may be required by the Bank;
(e) a current survey (or current certification of an existing
survey) of the Property certified to the Bank and the title insurance
company issuing the ALTA Policy issued by a registered surveyor in
conformity with the Bank's survey requirement standards locating the
buildings on the Property, all access roads, easements and other
encumbrances set forth in the ALTA Policy;
(f) (i) a standard ALTA mortgagee title insurance commitment, in
form and substance and issued by a title insurance company
satisfactory to the Bank, together with satisfactory evidence of
reinsurance of a portion of the title insurance company's obligations
under the final policy of title insurance if required by the Bank in
its discretion, naming the Bank as insured in a policy amount of not
less than $5,500,000.00, reflecting the Authority's marketable title
in and to, and the Borrower's land contract vendee's interest in and
to, the Project and containing only exceptions acceptable to the Bank;
and (ii) after closing and recording, a final policy of title
insurance on the ALTA 1970 (Revised 1984) form naming the Bank as
insured, containing no exceptions for filed or unfiled mechanics' or
materialmens' liens, the rights of parties in possession or as to
matters of survey, together with such endorsements and coverages as
may from time to time be required by the Bank, and insuring the
Mortgage as a valid first lien on the Project, subject only to
Permitted Encumbrances, all in conformity to the Bank's title
insurance requirements;
(g) evidence satisfactory to the Bank that there is satisfactory
ingress to and egress from the Property;
(h) evidence satisfactory to the Bank indicating that no portion
of the Property is located in a flood hazard area designated by the
U.S. Department of Housing and Urban Development;
(i) receipt with respect to the Project of: (i) a current zoning
letter from the appropriate governmental authority indicating the
final and unappealable zoning classification of the Project, a copy of
the applicable portion of the zoning code
-6-
10
indicating the permitted uses and restrictions in such zoning
classification, and a certificate of the Borrower or the Borrower's
engineer, that the Project is in compliance therewith; (ii) evidence
of the availability of public water, sewer and all other utilities
necessary for the use and operation of the Project and that the
capacities of each such utility are sufficient to adequately service
the Project; and (iii) copies of all governmental approvals required
to occupy and operate the Project;
(j) receipt of (i) a "Phase I" environmental report in conformity
with the Bank's Phase I environmental report requirements for the
Project addressed to the Bank prepared by a licensed environmental
engineering firm acceptable to the Bank, which report must indicate to
the Bank's satisfaction that the Project is free from hazardous
substance contamination and (ii) such other evidence of compliance of
the Project with applicable federal, state and local environmental
laws, regulations and requirements as the Bank may require;
(k) receipt with respect to the Borrower of: (i) a current
certified copy of its Articles of Incorporation, as amended, certified
by the Secretary of State of Pennsylvania; (ii) a current certificate
of good standing from the Secretary of State of Pennsylvania; and
(iii) a copy of its Code of Regulations, as amended, certified by its
Secretary or Assistant Secretary;
(l) receipt of certified copies of resolutions of the Board of
Directors of the Borrower authorizing it to enter into the Loan
Agreement and the Letter of Credit Documents to which it is a party,
which resolutions shall designate the names of the officers of the
Borrower authorized to execute such documents,
(m) a descriptive, narrative appraisal of the Project in form
acceptable to the Bank and certifying a valuation reasonably
satisfactory to the Bank, by an MAI appraiser acceptable to the Bank;
and
(n) such additional certificates, documents, consents or
opinions, in form and substance satisfactory to the Bank, as the Bank
may reasonably, request.
4.2 Confirmation of Filing. The Bank shall have received confirmation to
its satisfaction that the Letter of Credit Documents have been duly executed,
acknowledged, delivered and recorded or filed, as appropriate.
4.3 Closing of Other Transactions. All of the other Loans contemplated by
the Loan Agreement shall have closed, simultaneously with the issuance of the
Letter of Credit.
-7-
11
5. Reimbursement and Other Payments; Extension.
5.1 Reimbursement and Other Payments. The Borrower hereby agrees
to pay to the Bank:
(a) on the date of any Interest Draft, Tender Draft or Redemption
Draft (as such terms are defined in the Letter of Credit), a sum equal
to the amount of such Interest Draft, Tender Draft or Redemption
Draft, plus the sum of One Hundred Dollars ($100.00) for each drawing
made on the Letter of Credit;
(b) on demand, all reasonable amounts expended, advanced or
incurred by the Bank to satisfy any obligation of the Borrower under
this Agreement or any other Letter of Credit Document or to enforce
the rights of the Bank under this Agreement or any other Letter of
Credit Document or Bond Document (including without limitation any
costs incurred by the Bank in connection with any insolvency or
bankruptcy proceeding affecting the Borrower, any Guarantor, or any
tenant, sub-tenant, licensee or occupant with respect to any portion
of the Project or any other guarantor of the Borrower's obligations
under this Agreement, the Loan Agreement or any of the Security
Documents, which amounts will include all court costs, reasonable
attorneys' fees, fees of auditors and accountants and investigation
expenses reasonably incurred by the Bank in connection with any such
matters;
(c) on demand, except as otherwise provided herein, interest on
any and all amounts unpaid by the Borrower to the Bank when due under
this Agreement or any other Letter of Credit Document from the date
such amounts become due until paid in full at a fluctuating rate per
annum (computed on the basis of a year of 360 days but calculated on
the actual number of days outstanding) equal to two percent (2%) per
annum in excess of the Prime Rate;
(d) on demand, any other amounts owing to the Bank by the
Borrower under this Agreement or any of the other Letter of Credit
Documents;
(e) on the date of issuance of the Letter of Credit (i) all
attorneys' fees and out-of-pocket expenses incurred by the Bank
counsel and Bond counsel in connection with the negotiation,
preparation and execution of this Agreement, the Letter of Credit and
any and all of the other Letter of Credit Documents and security
documents in connection therewith and the transactions contemplated
thereby (including any amendments hereto or thereto or consents or
waivers hereunder or thereunder); and (ii) all fees, charges or taxes
for the recording or filing of Security Documents paid by the Bank;
(f) on the date of issuance of the Letter of Credit, the initial
fee equal to $46,878.08 for the period from the date of issuance
through and including June 30, 1996 (the "Initial Fee"); and
-8-
12
(g) on each July 1, October 1, January 1 and April 1 thereafter
that the Letter of Credit remains in effect, for the ensuing calendar
quarter commencing on the first day of that month (a "Fee Period"), a
quarterly fee (the "Quarterly Fee") equal to 0.75% of the undrawn
amount available to be drawn under the Letter of Credit on such date
(which amount will take into account all reductions or increases in
such undrawn amount through such preceding quarter), payable in
advance on the next succeeding July 1, October 1, January 1 and April
1 of the commencement of such Fee Period.
If subsequent to the payment of a Quarterly Fee under this subsection, any
amount is reinstated under the Letter of Credit which increases the undrawn
amount available to be drawn under the Letter of Credit to an amount greater
than the amount on which such fee was calculated (the "Increase Amount"), the
Borrower will pay to the Bank the Quarterly Fee on the Increase Amount within
five days of demand therefor by the Bank. In no event shall the Bank have any
obligation to make reimbursement or to otherwise account to the Borrower in
respect of fees paid by the Borrower as a result of any reduction in the
undrawn amount under the Letter of Credit and/or any later adjustment to a
fixed rate of interest on the Bonds at less than the maximum interest rate of
15% per annum. If at any point in time the Borrower fixes the interest rate on
the Bonds at a rate less than the maximum rate of 15% per annum, the Quarterly
Fee due and payable thereafter shall be due and payable on the undrawn amount
of such Letter of Credit representing the actual rate of interest on the Bonds
for the next respective Fee Period, if fixed for such Fee Period, but if the
rate of interest on the Bonds can vary during such Fee Period, the Quarterly
Fee shall be calculated on the assumed maximum interest rate of 15% per annum.
The payments to be made by the Borrower pursuant to this Agreement are in
addition to, and not in lieu of or substitution for, payments to be made to the
Bank pursuant to the Loan Agreement and the other agreements and documents
executed in connection therewith.
5.2 Payments. All payments by the Borrower to the Bank hereunder shall be
made in lawful currency of the United States of America and in immediately
available funds before 2:00 p.m., Columbus, Ohio time on the date when such
payment is due at the office of the Bank at 41 South High Street, Columbus,
Ohio 43215, Attention: International Division, Letter of Credit Department, or
at such other location as the Bank shall designate to the Borrower from time to
time in writing. Any payment received and accepted by the Bank after such time
shall be considered for all purposes (including the calculation of interest, to
the extent permitted by law) as having been made on the Bank's next following
Business Day.
If the date for any payment hereunder falls on a day that is not a
Business Day, then for all purposes of this Agreement the same shall be deemed
to have fallen on the next following Business Day, and such extension of time
shall in such case be included in the computation of payments of interest.
5.3 Increased Costs Due to Change in Law. If any change in any law or
regulation or in the interpretation thereof by any court or administrative
agency shall either (i)
-9-
13
impose, modify or deem applicable any reserve, special deposit or similar
requirement against or in connection with letters of credit issued by the Bank,
or (ii) impose on the Bank any other condition regarding this Agreement or the
Letter of Credit (other than changes in the rates of income taxation generally
applicable to the Bank), and the result of any such event shall be to increase
the cost to the Bank of issuing or maintaining the Letter of Credit (which
increase in cost shall be determined by the Bank's reasonable allocation of the
aggregate of such cost increases resulting from such events), then (a) the Bank
shall so notify the Borrower, and (b) upon receipt of such notice from the
Bank, the Borrower shall promptly pay to the Bank from time to time as
specified by the Bank additional amounts which shall be sufficient to
compensate the Bank for such increased costs, together with interest on each
such amount for the period from the date of such notice until payment in full
thereof at the Prime Rate plus two percent (2%) (computed on the basis of a
year of 360 days but calculated on the actual number of days outstanding). A
certificate setting forth in reasonable detail such increased cost incurred by
the Bank as a result of any such event, submitted by the Bank to the Borrower,
shall be prima facie evidence, absent manifest error, as to the amount thereof.
5.4 Obligations Absolute. The obligations of the Borrower under this
Agreement shall be absolute, unconditional and irrevocable, and shall be paid
and performed strictly in accordance with the terms of this Agreement, under
all circumstances whatsoever, including, without limitation, the following
circumstances:
(a) any lack of validity or enforceability of the Letter of
Credit, or any of the Letter of Credit Documents, the Loan Agreement
or the Bond Documents or any other agreement or instrument related
thereto;
(b) any amendment or waiver of, or any consent to departure from,
the terms of the Letter of Credit or any of the Letter of Credit
Documents, the Loan Agreement or the Bond Documents or any other
agreement or instrument related thereto;
(c) the existence of any claim, set-off, defense or other right
which the Borrower may have at any time against the Trustee, any
beneficiary or any transferee of the Letter of Credit (or any Person
for whom the Trustee, any such beneficiary or any such transferee may
be acting), the Bank or any other Person, whether in connection with
this Agreement, the Letter of Credit, any of the other Letter of
Credit Documents, the Bonds, the Loan Agreement or any other agreement
or instrument related thereto, or in connection with the Project, the
Loans or any unrelated transaction;
(d) any statement, draft or any other document presented under
the Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect, or any statement therein being untrue or
inaccurate in any respect whatsoever (except to the extent acceptance
or reliance upon any such statement, draft or other document is a
result of the Bank's gross negligence or willful misconduct);
-10-
14
(e) the surrender or impairment of any security for the
performance or observance of the terms of this Agreement, any of the
other Letter of Credit Documents, the Loan Agreement or any other
agreement related thereto; or
(f) any other circumstance, happening or omission whatsoever,
whether or not similar to any of the foregoing, provided, that such
circumstance, happening or omission is not a result of the Bank's
gross negligence or willful misconduct.
5.5 Termination and Extension of Letter of Credit. The Letter of Credit
shall terminate in accordance with the terms and conditions of the Letter of
Credit; provided, however, that, subject to such terms and conditions, the
Expiration Date, as set forth in the Letter of Credit, may be extended pursuant
to, and otherwise in accordance with, the following terms and conditions:
(a) On November 6, 1999, and, if so extended on November 6, 1999,
on November 6, 2000, if the Extension Notice (as hereinafter
described) shall have theretofore been timely delivered by the Bank to
the Borrower and the Trustee, the Expiration Date shall be extended
for one full year. If the Expiration Date is so extended, the Trustee
shall, not later than thirty (30) days thereafter, surrender the
outstanding Letter of Credit to the Bank and accept, upon such
surrender, a substitute irrevocable letter of credit in the form of
Exhibit A to this Agreement, dated the date of such substitution and
having an Expiration Date which is one year later than the Expiration
Date, but otherwise having terms identical to the surrendered Letter
of Credit. In lieu of surrendering the Letter of Credit and accepting
a substitute therefor, the Trustee may accept a written notice of
extension from the Bank notifying the Trustee that the Bank has
extended the Expiration Date for a period of one year.
(b) Not later than 6 months prior to November 6, 1999, and, if
extended on November 6, 1999, not later than 6 months prior to
November 6, 2000, and, provided the Bank has theretofore timely given
the Borrower and the Trustee the Extension Notice, the Bank may, in
its sole discretion, by notice in writing given by the Bank to the
Borrower and the Trustee (the "Extension Notice"), advise the Borrower
and the Trustee that the Expiration Date will be extended in
accordance with paragraph (a) of this Section 5.5. In the event the
Bank determines not to extend the Expiration Date, the Bank agrees to
give the Borrower at least 6 months' written notice of such
determination.
5.6 Pledge of Custody Bonds.
(a) As security for the payment and performance of all
obligations of the Borrower to the Bank hereunder and under the other
Letter of Credit Documents, the Borrower hereby agrees that upon the
making of a Tender Draft (as defined in the Letter of Credit) the
Borrower will forthwith deliver to the Trustee for the benefit of the
Bank Bonds free and clear of all other liens and encumbrances in an
aggregate principal
-11-
15
amount equal to the amount of such Tender Draft, less (i) any portion
of such Tender Draft representing interest on the Bonds so
purchased, and (ii) the amounts the Bank is reimbursed by 2:00 p.m.
Columbus, Ohio time on the Bond Purchase Date corresponding to the
date of such Tender Draft (collectively, the "Custody Bonds"), and the
Borrower hereby grants to the Bank a security interest in the Custody
Bonds and in the proceeds thereof.
(b) The Borrower hereby agrees to deliver or cause to be
delivered immediately to the Trustee for the benefit of the Bank the
Custody Bonds which shall be held by the Trustee in its custody and
control for the benefit of the Bank in accordance with Section 4.04 of
the Trust Indenture. The Borrower further agrees to cause the Trustee
to enter into its registration books as the address to which payments
of principal, premium, if any, and interest with respect to Custody
Bonds are to be sent, the Bank's address for notices pursuant to
Section 7.11 hereof as in effect from time to time.
(c) If the Borrower shall become entitled to receive or shall
receive any Custody Bonds, any payment of interest with respect to the
Custody Bonds, or any and all other proceeds thereof, the Borrower
shall accept any such items as the Bank's agent, shall hold them in
trust for the Bank, and shall deliver them forthwith to the Bank in
the exact form received, with the Borrower's endorsement to the order
of the Bank when necessary, to be held by the Bank, subject to the
terms hereof, as security for the payment and performance of all
obligations of the Borrower hereunder and under the other Letter of
Credit Documents, except that the Bank shall credit all payments and
proceeds received by the Bank directly against the Borrower's
obligations under Section 5.1 of this Agreement as provided below.
(d) All principal, premium, if any, and interest paid on the
Custody Bonds shall be retained by the Bank (or if received by the
Borrower shall be forthwith delivered by it to the Bank in the
original form received) and applied by the Bank to the payment of
amounts due the Bank from the Borrower hereunder, under the Loan
Agreement and under the other Letter of Credit Documents.
(e) If the Borrower makes or causes to be made to the Bank a
payment of a Tender Draft pursuant to Section 5.l(a) hereof, or a
Remarketing Agent resells Custody Bonds on behalf of the Borrower, the
Bank agrees to release from the lien of this Agreement and, if the
Custody Bonds are in the Bank's possession, to deliver to the Borrower
or the Remarketing Agent as the case may be, Custody Bonds, endorsed
in blank without recourse in an aggregate principal amount equal to
the amount of such payment with respect to principal so made, or the
principal amount of the Custody Bonds so resold to the extent that the
proceeds of such resale are delivered to the Bank.
(f) In addition to the rights and remedies granted to the Bank in
this Agreement, the Bank shall have all of the rights and remedies of
a secured party under Chapter 1309 of the Ohio Revised Code and such
other rights and remedies as are
-12-
16
granted to a secured party in similar situations to the extent of
the security interest granted under paragraph (a) above.
(g) The Borrower shall be liable for the deficiency if the
proceeds of any sale or other disposition of the Custody Bonds by the
Bank are insufficient to pay all amounts to which the Bank is
entitled, including principal and interest as provided herein, and the
reasonable fees of any outside attorneys employed by the Bank to
collect such deficiency.
5.7 Reinstatement.
(a) In connection with any Tender Draft, upon (1)(i) receipt by
the Bank or the Trustee of immediately available funds in an amount
equal to the principal amount of the Bonds that have been remarketed
in accordance with Section 4.01 of the Trust Indenture, and (ii)
receipt by the Bank from the Trustee of a certificate with respect to
such reinstatement in the form of Annex 5 attached to the Letter of
Credit, or (2) Bonds for the Bank's benefit in the aggregate principal
amount equal to the unpaid amount of the principal portion of such
Tender Draft delivered by the Borrower or on its behalf, registered or
recorded in the name of the Borrower as pledgor and the Bank as
pledgee in accordance with Section 5.6 hereof, or (3) the Bank's
otherwise advising the Trustee in writing that such reinstatement
shall occur, as provided in the Letter of Credit, the Trustee's right
to draw on the Letter of Credit shall automatically be reinstated in
an amount equal to the principal portion plus the interest portion of
such Tender Draft, or the aggregate principal amount of such Bonds
plus the interest portion of such Tender Draft, as the case may be.
(b) In the event of an Interest Draft, the Stated Amount shall
automatically be reinstated in the amount of the related Interest
Draft at the close of business on the fifteenth day following the date
of such draft unless the Bank shall have delivered to the Trustee a
written notice specifically referring to the Letter of Credit stating
that an Event of Default has occurred under this Agreement and is
continuing and that such reinstatement shall not occur.
6. Events of Default and Remedies Upon Default.
6.1 Events of Default. The occurrence of any one or more of the
following, whatever the reason therefor, shall constitute an Event of Default
hereunder:
(a) The Borrower shall fail to pay any amount of principal,
purchase price or interest or any other sum owing under this Agreement
or any other Letter of Credit Document on the due date thereof; or
(b) An Event of Default occurs and is existing under the Loan
Agreement.
-13-
17
6.2 Remedies Upon Default. Upon the occurrence of any Event of Default, in
addition to and not in lieu of all rights and remedies available to the Bank
under the Loan Agreement and the other agreements and documents executed in
connection therewith, in law or at equity, the Bank may, at its option, do any
or all of the following:
(a) Declare the principal of all amounts owing under this
Agreement and the other Letter of Credit Documents (including all
obligations secured by the Security Documents) and all other
indebtedness of the Borrower to the Bank, together with interest
thereon, to be forthwith due and payable, regardless of any other
specified maturity or due date, without notice of default, presentment
or demand for payment, protest or notice of nonpayment or dishonor, or
other notices or demands of any kind or character, and without the
necessity of prior recourse to any security;
(b) Implement any remedies available to the Bank under or in
connection with the Bond Documents, including without limitation
instructing the Trustee, in the Bank's sole discretion, to accelerate
the maturity of the Bonds and causing and paying a full or partial
drawing under the Letter of Credit (whether or not any amounts have
previously been paid under the Letter of Credit) and exercising all of
the rights and remedies available to the Bank in connection therewith;
(c) If the Event of Default may be cured by the Bank by taking
actions or making payments of money, the Bank shall have the right
(but not the obligation) to take such actions (including without
limitation the retention of attorneys and the commencement or
prosecution of actions on its own behalf or on behalf of the
Borrower), and to make such payments and pay for the costs of such
actions (including without limitation attorneys' fees and court costs)
from its own funds; provided, that the taking of such actions at the
Bank's expense or the making of such payments by the Bank out of the
Bank's own funds shall not be deemed to cure such Event of Default,
and the same shall not be so cured unless and until the Borrower shall
have reimbursed the Bank, for such payment, together with interest at
the Prime Rate plus two percent (2%), from the date of such payment
until the date of reimbursement. If the Bank advances its own funds
for such purposes, such funds shall be secured by the Security
Documents, notwithstanding that such advances may cause the total
amount advanced hereunder to exceed the amount committed to be
advanced pursuant to this Agreement, and the Borrower shall
immediately upon demand reimburse the Bank therefore with interest at
the Prime Rate plus two percent (2%), from the date of such advance
until the date of reimbursement; and
(d) Exercise any and all of its rights under the Letter of Credit
Documents, the Loan Agreement or the other agreements and documents
executed in connection therewith, or the Bond Documents, or otherwise
as a secured creditor, including, without limitation, foreclosing on
any security, and exercising any other rights with respect to security
whether under the Security Documents or any other agreement
-14-
18
or as provided by law, all in such order and in such manner as the
Bank in its sole discretion may determine.
6.3 Cumulative Remedies; No Waiver. All remedies of the Bank provided for
herein are cumulative and shall be in addition to any and all other rights and
remedies provided in the Letter of Credit, the Security Documents, the Bond
Documents, any of the Letter of Credit Documents or the Loan Agreement or the
other agreements and documents executed in connection with the Loan Agreement,
or provided by law from time to time. The exercise of any right or remedy by
the Bank hereunder shall not in any way constitute a cure or waiver of default
hereunder or under the Letter of Credit, the Security Documents, the Bond
Documents, any of the Letter of Credit Documents, or the Loan Agreement or the
other agreements and documents executed in connection with the Loan Agreement,
nor invalidate any notice of default or any act done pursuant to any such
notice, nor prejudice the Bank in the exercise of any rights hereunder or under
the Letter of Credit, the Security Documents, the Bond Documents, the Letter of
Credit Documents or the Loan Agreement, unless in the exercise of said right,
the Bank realizes all amounts owed to it under the Letter of Credit, this
Agreement, the Security Documents, the Bond Documents, the Letter of Credit
Documents, the Loan Agreement and the other agreements and documents executed
in connection with the Loan Agreement, and all Events of Default are cured. No
waiver by the Bank of any default or breach by the Borrower hereunder shall be
implied from any omission by the Bank to take action on account of such default
if such default persists or is other than the default expressly made the
subject of the waiver. Any such express waiver shall be operative only for
the time and to the extent therein stated. Any waiver of any covenant, term or
condition contained herein shall not be construed as a waiver of any subsequent
breach of the same covenant, term or condition. The consent or approval by the
Bank to or of any act by the Borrower shall not be deemed to waive or render
unnecessary consent or approval to or of any subsequent act.
7. Miscellaneous.
7.1 Nonliability of the Bank. The Borrower acknowledges and agrees that:
(a) The Bank shall not be responsible or liable to the Borrower
for the use which may be made of the Letter of Credit or for any acts
or omissions of the Trustee and any beneficiary or transferee in
connection therewith;
(b) The Bank shall not be responsible or liable to the Borrower
for the validity, sufficiency or genuineness of documents (except as
to the Bank's signatures thereon), or of any endorsements thereon,
even if such documents should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent, or forged
(except to the extent acceptance or reliance upon such documents is a
result of the Bank's gross negligence or willful misconduct); and
(c) The Bank shall not be responsible or liable to the Borrower
as a result of any circumstances in any way related to the making or
failure to make payment
-15-
19
under the Letter of Credit, other than as a result of the gross
negligence or willful misconduct of the Bank.
7.2 No Representations by the Bank. By accepting or approving anything
required to be observed, performed or fulfilled, or to be given to the Bank
pursuant to this Agreement or any of the other Letter of Credit Documents or
Bond Documents, including any certificate, statement of profit and loss or
other financial statement, survey, appraisal or insurance policy, the Bank
shall not be deemed to have warranted or represented the sufficiency, legality,
effectiveness or legal effect of the same, or of any term, provision or
condition thereof, and such acceptance or approval thereof shall not be or
constitute any warranty or representation to anyone with respect thereto by the
Bank. The Bank may accept documents in connection with the Letter of Credit or
any of the other Letter of Credit Documents or Bond Documents which appear on
their face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary.
7.3 No Third Parties Benefitted. This Agreement is made for the purpose of
defining and setting forth certain obligations, rights and duties of the
Borrower and the Bank in connection with the Letter of Credit. It is made for
the sole protection of the Borrower and the Bank, and the Bank's successors and
assigns. No other Person shall have any rights of any nature hereunder or by
reason hereof.
7.4 Indemnity by the Borrower. The Borrower hereby indemnifies and holds
harmless the Bank and its directors, officers, agents and employees
(collectively the "indemnitees") from and against:
(a) any and all claims, demands, actions or causes of action that
are asserted against any indemnitee by any Person if the claim,
demand, action or cause of action directly or indirectly relates to a
claim, demand, action or cause of action that the Person has or
asserts against the Borrower, whether in connection with the Letter of
Credit, the Bonds, any of the Bond Documents, any of the Letter of
Credit Documents or this Agreement, or otherwise;
(b) any and all claims, demands, actions or causes of action that
are asserted against any indemnitee by any Person and arising from or
in connection with (I) any statement or omission, actual or alleged,
in the Bond Documents, or (ii) any breach or default, actual or
alleged, of the representations, warranties, covenants, conditions or
agreements contained in this Agreement or any of the other Letter of
Credit Documents or in any of the Bond Documents; and
(c) any and all liabilities, losses, costs or expenses (including
court costs and attorneys' fees) that any indemnitee suffers or incurs
as a result of the assertion of any claim, demand, action or cause
of action specified in Section 7.4(a) or Section 7.4(b) of this
Agreement.
-16-
20
Any obligation or liability of the Borrower to any indemnitee as provided
in this Section 7.4 shall be secured by the Security Documents. The indemnity
contained in this Section 7.4 shall not extend to any claims, demands, actions,
causes of action, liabilities, losses, costs or expenses which result solely
from the gross negligence or willful misconduct of the Bank.
7.5 Commissions. The Borrower hereby indemnifies and holds the Bank
harmless from any responsibility, cost and/or liability, including any
attorneys' fees incurred, in connection with any claim by any Person for the
payment of any commission, charge or brokerage fee in connection with the Bonds
or any of the other transactions contemplated in connection with this Agreement
arising by virtue of any action taken, directly or indirectly, by the Borrower.
7.6 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Borrower and the Bank and their respective successors and
assigns, subject to the provisions of Article 6 of the Loan Agreement.
7.7 Execution in Counterparts. This Agreement and any other Letter of
Credit Document may be executed in any number of counterparts and any party
hereto or thereto may execute any counterpart, each of which when executed and
delivered will be deemed to be an original and all of which counterparts of
this Agreement or any other Letter of Credit Document, as the case may be,
taken together will be deemed to be but one and the same instrument. The
execution of this Agreement or any other Letter of Credit Document by any party
hereto or thereto will not become effective until counterparts hereof or
thereof, as the case may be, have been executed by all the parties hereto or
thereto.
7.8 Amendments; Consents. No amendment, modification, supplement,
termination or waiver of any provision of this Agreement or any of the Letter
of Credit Documents, and no consent to any departure by the Borrower therefrom,
may in any event be effective unless in writing signed by the Bank, and then
only in the specific instance and for the specific purpose given.
7.9 Cumulative Remedies; No Waiver. The rights, powers and remedies of the
Bank under the Letter of Credit Documents are cumulative and not exclusive of
any right, power or remedy provided by law or equity or otherwise. No failure
or delay on the part of the Bank in exercising any right, power or remedy may
be, or may be deemed to be, a waiver thereof; nor may any single or partial
exercise of any right, power or remedy preclude any other or further exercise
of any other right, power or remedy.
7.10 Survival of Representations and Warranties. All representations and
warranties of the Borrower contained herein or in the Loan Agreement or any
other Letter of Credit Document will survive the delivery of the Letter of
Credit, and are material and have been or will be relied upon by the Bank,
notwithstanding any investigation made by the Bank or on behalf of the Bank.
For the purpose of the foregoing, all statements contained in any
-17-
21
certificate, agreement or other writing delivered by or on behalf of the
Borrower pursuant hereto or pursuant to the Loan Agreement or any other Letter
of Credit Document or in connection with the transactions contemplated hereby
or thereby shall be deemed to be covenants, representations and warranties of
the Borrower contained herein or in the Loan Agreement or in any other Letter
of Credit Documents, as the case may be.
7.11 Notices. All notices, requests, demands, directions and other
communications provided for in this Agreement shall be given in the manner
provided for notices in the Loan Agreement.
7.12 Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of Ohio.
7.13 Severability of Provisions. Any provision in any Letter of Credit
Document that is held to be inoperative, unenforceable or invalid shall be
inoperative, unenforceable or invalid without affecting the remaining
provisions, and to this end the provisions of all Letter of Credit Documents
are declared to be severable.
7.14 Headings. Article and section headings in this Agreement are included
for convenience of reference only and are not part of this Agreement for any
other purpose.
7.15 Time of the Essence. Time is of the essence for all purposes under
this Agreement and the other Letter of Credit Documents.
7.16 WAIVER OF JURY TRIAL. THE BANK AND THE BORROWER, AFTER CONSULTING OR
HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT EITHER OF THEM MAY HAVE TO A TRIAL BY JURY IN ANY
LITIGATION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY RELATED
INSTRUMENT OR AGREEMENT, OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREBY, OR
ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR
ACTIONS OF EITHER OF THEM WITH RESPECT THERETO. THIS WAIVER SHALL NOT IN ANY
WAY EFFECT THE BANK'S ABILITY TO PURSUE REMEDIES PURSUANT TO ANY WARRANT OF
ATTORNEY OR COGNOVIT PROVISION CONTAINED HEREIN OR IN ANY RELATED INSTRUMENT OR
AGREEMENT. NEITHER THE BORROWER NOR THE BANK SHALL SEEK TO CONSOLIDATE, BY
COUNTERCLAIM OR OTHERWISE, ANY ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED
WITH ANY OTHER ACTION WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.
THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR
RELINQUISHED BY EITHER THE BORROWER OR THE BANK EXCEPT BY A WRITTEN INSTRUMENT
EXECUTED BY BOTH OF THEM.
-18-
22
7.17 Warrant of Attorney. The Borrower authorizes any attorney-at-law to
appear in any Court of Record in the State of Ohio or in any other state or
territory of the United States after the obligations hereunder become due,
whether by acceleration or otherwise, to waive the issuing and service of
process, and to confess judgment against the Borrower in favor of the Bank for
the amount then appearing due, together with costs of suit, and thereupon to
waive all rights of appeal and stays of execution.
IN WITNESS WHEREOF, the Borrower has caused this Agreement to be executed
on its behalf by its duly authorized representative and the Bank has caused
this Agreement to be executed on its behalf by its duly authorized officer as
of the date first above written.
WARNING--BY SIGNING THIS PAPER, YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME, A COURT JUDGMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT
OR ANY OTHER CAUSE.
MCINNES STEEL COMPANY
By: /s/ Timothy M. Hunter
--------------------------------
Title: Secretary/Treasurer
-----------------------------
THE HUNTINGTON NATIONAL
BANK
By: /s/ Bill T. Frazier
--------------------------------
Title: Vice President
-----------------------------
-19-
23
The Huntington National Bank HUNTINGTON
P.O. Box 1558 BANKS
Columbus, Ohio 43216
Direct Telephone Number EXHIBIT A
IRREVOCABLE LETTER OF CREDIT NO. 106192
February 29, 1996
PNC Bank, National Association, Trustee
901 State Street
Erie, Pennsylvania 16501
Attention: Corporate Trust Department
Dear Sirs:
1. At the request of McInnes Steel Company, a Pennsylvania corporation
(the "Company"), we hereby establish in your favor, as successor to Marine
Bank, Trustee (the "Trustee") under the Trust Indenture dated as of November 1,
1991 (the "Indenture") between the Trustee and Erie County Industrial
Development Authority (the "Issuer"), pursuant to which $6,000,000.00 aggregate
principal amount of Variable Rate Demand Revenue Bonds, Series of 1991 (McInnes
Steel Company Project) (the "Bonds") were issued by the Issuer, our Irrevocable
Letter of Credit No. 106192 (the "Letter of Credit") in the amount of
$4,610,959.00 (as more fully described below), effective immediately and
expiring at 5:00 p.m. on November 6, 1999 or, if such day is not a Business Day
(as defined in the Indenture), on the next succeeding Business Day (the "Stated
Expiration Date"), unless, at our option, we deliver to you a written amendment
signed by an authorized signer (specifically referring to "THE HUNTINGTON
NATIONAL BANK Irrevocable Letter of Credit No.106192") extending the Stated
Expiration Date to the date set forth in such amendment, in which case this
Letter of Credit shall expire on such extended Stated Expiration Date unless
further extended, it being understood that we shall be under no obligation
herein to grant any such extension. This Letter of Credit is subject to
automatic termination as provided in paragraph 8 hereof.
2. We hereby irrevocably authorize you to draw on us in accordance with
the terms and conditions hereinafter set forth, by one or more drafts on us, an
aggregate amount not exceeding Four Million Six Hundred Ten Thousand Nine
Hundred Fifty-Nine and no/100 Dollars ($4,610,959.00) (as reduced and
reinstated from time to time in accordance with the provisions hereof, the
"Letter of Credit Amount"), of which (i) an aggregate amount not exceeding
$4,500,000.00 (as reduced and reinstated from time to time in accordance with
the provisions hereof, the "Principal Component") may be drawn upon with
respect to principal of the Bonds and (ii) an aggregate amount not exceeding
$110.959.00 (as reduced and reinstated from time to time in accordance with the
provisions hereof, the "Interest Component") may be
24
drawn upon with respect to interest accrued on the Bonds. The Principal
Component shall not THE HUNTINGTON NATIONAL BANK
Irrevocable Letter of Credit No. 106192
Page 2
be available to pay amounts corresponding to the interest on the Bonds, and the
Interest Component shall not be available to pay amounts corresponding to
principal of the Bonds.
3. Funds under this Letter of Credit are available to you at the time
specified below, (a) in one or more drawings by one or more of your drafts,
each dated the date of its presentation and stating on its face: "Drawn under
The Huntington National Bank Irrevocable Letter of Credit No. 106192",
accompanied by one or more of your certificates in the form of Annex 1 attached
hereto appropriately completed and executed (any such draft accompanied by such
certificate being herein called an "Interest Draft"); (b) in one or more
drawings by one or more of your drafts, each dated the date of its presentation
and stating on its face "Drawn under The Huntington National Bank Irrevocable
Letter of Credit No.106192", accompanied by one or more of your certificates in
the form of Annex 2 attached hereto appropriately completed and executed (any
such draft accompanied by such certificate being herein called a "Tender
Draft"); and (c) in one or more drawings by one or more of your drafts, each
dated the date of its presentation and stating on its face "Drawn under The
Huntington National Bank Irrevocable Letter of Credit No.106192 ", accompanied
by one or more of your certificates in the form of Annex 3 attached hereto
appropriately completed and executed (any such draft accompanied by such
certificate being herein called a "Redemption Draft"). Each such draft and
certificate shall be presented at our office at The Huntington National Bank,
41 South High Street, Columbus, Ohio 43287, Attention: International
Department, or such other office of ours that we hereafter designate by written
notice to you, and shall be made either (i) in the form of a letter on your
letterhead manually signed by one of your officers and addressed to us at The
Huntington National Bank, 41 South High Street, Columbus, Ohio 43287,
Attention: International Department, or at any other office of ours that we
hereafter designate by written notice delivered to you, or (ii) in the form of
a tested telex sent by one of your officers, such telex number that may be
designated by us by written notice delivered to you, or (iii) in the form of a
telecopy transmission of the documents described in clause (i) of this sentence
to Telecopier No. (614) 480-4354 pr Telecopier No. (614) 480-3761(with
transmission confirmed by call to Telephone No. (614) 480-4374) or such other
telecopier and telephone numbers that we hereunder designate by written notice
delivered to you. If a drawing is made by telex or telecopier, it must contain
an additional certification by you that originals of the draft and certificate
on your letterhead manually signed by one of your officers will be mailed to us
concurrently by first class United States mail. If we receive your Interest
Draft or Redemption Draft at such office, all in strict conformity with the
terms and conditions of this Letter of Credit at or prior to 9:00 A.M., on a
Business Day, we will honor the same in accordance with your payment
instructions by 12:00 noon on the later of (a) the Business Day on which you
present to us your draft and certificate or (b) the "Value Date" set forth in
such certificate; and if we receive your Interest Draft or Redemption Draft at
such office, all in strict conformity with the terms and conditions of this
Letter of Credit, after 9:00 A.M., on a Business Day, we will honor the
same in accordance with your payment instructions by 12:00 noon on the later of
(1) the Business Day immediately
25
THE HUNTINGTON NATIONAL BANK
Irrevocable Letter of Credit No. 106192
Page 3
following the Business Day on which you present to us your draft and
certificate or (2) the "Value Date" set forth in such certificate. If we
receive your Tender Draft at such office with respect to Bonds bearing interest
at the Daily Rate (as defined in its Indenture), all in strict conformity with
the terms and conditions of this Letter of Credit, at or prior to 12:00 noon,
on a Business Day, we will honor the same in accordance with your payment
instructions by 2:00 p.m. on the later of (x) the Business Day on which you
present to us your draft and certificate or (y) the "Value Date" set forth in
such certificate; and if we receive your Tender Draft at such office, all in
strict conformity with the terms and conditions of this Letter of Credit, after
12:00 noon, on a Business Day, we will honor the same in accordance with your
payment instructions by 2:00 p.m. on the later of (i) the Business Day
immediately following the Business Day on which you present to us your draft
and certificate or (ii) the "Value Date" set forth in such certificate. If we
receive your Tender Draft at such office with respect to Bonds bearing interest
at the Weekly or Monthly Rate (as such terms are defined in the Indenture), all
in strict conformity with the terms and conditions of this Letter of Credit, at
or prior to 4:00 p.m. on a Business Day, we will honor the same in accordance
with your payment instructions by 10:00 a.m. on the later of (o) the Business
Day immediately following the Business Day on which you present to us your
draft and certificate or (p) the "Value Date" as set forth in such certificate.
For purposes of this Letter of Credit, we shall be deemed to have "honored" a
draft at the time at which we commence a wire transfer of immediately available
funds in accordance with your instructions.
4. As used herein the term "Business Day" means any day other than (i) a
Saturday or Sunday, (ii) a day on which commercial banking institutions in
Columbus, Ohio, Erie, Pennsylvania or New York, New York or in any other city
where your principal office or our office or the principal office of the
Remarketing Agent is located are required or authorized by law (including
executive order) to close or on which any of such offices is closed for a
reason not related to financial conditions. References to any time of day in
this Letter of Credit shall refer to Eastern standard time or Eastern daylight
saving time. as in effect in Columbus, Ohio on such day.
5. Each drawing honored by us hereunder shall reduce the Letter of Credit
Amount and the respective Principal and Interest Components thereof by the
respective amounts of such drawing and the corresponding components of such
drawing. In addition, the Letter of Credit Amount and the respective Principal
and Interest Components thereof shall be reduced automatically, without notice
to you, upon our receipt from you of a certificate in the form of Annex 4
attached hereto appropriately completed and executed, each such reduction to be
(i) in the amounts necessary to reduce the Letter of Credit Amount and the
Principal and Interest Components thereof to the respective amounts specified
by you in such certificate and (ii) effective on the Business Day on which we
receive such certificate from you. No drawing hereunder honored by us shall
exceed the Letter of Credit Amount at the time of such drawing,
26
as the Letter of Credit Amount has been reduced and reinstated in accordance
with the terms
THE HUNTINGTON NATIONAL BANK
Irrevocable Letter of Credit No. 106192
Page 4
hereof, and no component of any such drawing corresponding to principal of or
interest on the Bonds shall exceed the corresponding Principal and Interest
Component of the Letter of Credit Amount as such Component has been reduced and
reinstated in accordance with the terms hereof.
6. On the fifteenth calendar day following the date of each drawing under
this Letter of Credit by your Interest Draft, the Letter of Credit Amount and
the Interest Component shall be automatically reinstated by an amount equal to
the amount of such drawing, unless before said fifteenth day, we give written
notice specifically referring to "The Huntington National Bank Irrevocable
Letter of Credit No. 106192 " signed by our authorized officer and received by
you, to the effect that an Event of Default has occurred under the
Reimbursement Agreement dated as of February 29, 1996 between the Company and
us and such reinstatement shall not occur, in which case such reinstatement
shall not occur.
7. Following any drawing under this Letter of Credit by your Tender Draft,
the Letter of Credit Amount and the Principal and Interest Components thereof
shall be reinstated with respect to such drawing (a) automatically when and to
the extent that both (i) we have received reimbursement for such drawing in
immediately available funds (or you have received immediately available funds
which, pursuant to Section 4.04 of the Indenture, you will immediately remit to
us as reimbursement for such drawing, such funds to be remitted to the
attention of our International Department stating that they are repayments for
Tender Drafts drawn under The Huntington National Bank Letter of Credit No.
106192) and (ii) you have delivered to us a certificate in respect of such
reinstatement in the form of Annex 5 attached hereto appropriately completed
and executed, which may be sent by tested telex or telecopier in the manner, to
the numbers and with the confirmations and follow-up mailings described in
paragraph 3 of this Letter of Credit or (b) when and to the extent that we, at
our option, upon the Company's request, otherwise advise you in writing that
such reinstatement shall occur, it being understood that we shall have no
obligation to grant any such reinstatement except as provided in clause (a) of
this sentence.
8. This Letter of Credit shall automatically terminate upon the first to
occur of: (a) the Stated Expiration Date (as such date may have been extended),
(b) the date on which we receive a certificate from you in the form of Annex 6
attached hereto, appropriately completed and executed, to the effect that there
are no Bonds Outstanding (as defined in the Indenture) other than bonds secured
by a Replacement Letter of Credit (as defined in the Indenture) or (c) the date
on which the final drawing available hereunder is honored. This Letter of
Credit shall be promptly surrendered to us by you upon such termination. The
Company's election to convert the mode whereby interest is calculated to a
Fixed Rate, and thereafter the actual Conversion,
27
THE HUNTINGTON NATIONAL BANK
Irrevocable Letter of Credit No. 106192
Page 5
will not effect a termination of this Letter of Credit.
9. This Letter of Credit is transferable in its entirety (but not in part)
to any transferee who you certify to us has succeeded you as Trustee under the
Indenture, and may be successively transferred. Transfer of this Letter of
Credit to such transferee shall be effected by the presentation to us of this
Letter of Credit accompanied by a certificate substantially in the form of
Annex 7 attached hereto appropriately completed and executed.
10. Only you (or a transferee permitted by the terms of this Letter of
Credit) may make drawings under this Letter of Credit. Upon the payment to you
or your account of the amount specified in a draft drawn hereunder, we shall be
fully discharged of our obligation under this Letter of Credit with respect to
such draft, and we shall not thereafter be obligated to make any further
payments under this Letter of Credit with respect to such draft.
11. This Letter of Credit sets forth in full the terms of our undertaking,
and this undertaking shall not in any way be modified, amended, amplified or
limited by reference to any document, instrument or agreement referred to
herein or in which this Letter of Credit is referred to or to which this Letter
of Credit relates, except only the drafts and certificates referred to herein;
and any such reference shall not be deemed to incorporate herein by reference
any document, instrument or agreement, except such drafts and certificates. All
drafts and certificates referred to herein that are presented to us from time
to time shall become an integral part of this Letter of Credit and shall be
binding on any transferee permitted by the terms of this Letter of Credit.
Payment of all drawings honored under this Letter of Credit will be made with
our own funds.
12. This Letter of Credit is subject to the "Uniform Customs and Practice
for Documentary Credits, 1993 Revision, International Chamber of Commerce,
Publication No. 500" (the "Uniform Customs"). This Letter of Credit shall be
deemed a contract made under the laws of the State of Ohio and shall, as to
matters not governed by the UCP, be governed and construed and in accordance
with the laws and said state, without regard to principles of conflicts of law.
Very truly yours,
THE HUNTINGTON NATIONAL BANK
By:_________________________________
Title:______________________________
28
ANNEX 1 to The Huntington National Bank
Irrevocable Letter of Credit No. 106192
To: The Huntington National Bank
41 South High Street
Columbus, Ohio 43287
Attention: International Department
CERTIFICATE FOR INTEREST DRAWING OF ACCRUED INTEREST
ON VARIABLE RATE DEMAND REVENUE BONDS, SERIES OF 1991
(McINNES STEEL COMPANY PROJECT) ISSUED BY
ERIE COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY
The undersigned, a duly authorized officer of PNC BANK, NATIONAL
ASSOCIATION, successor to Marine Bank, TRUSTEE (the "Trustee") under the Trust
Indenture dated as of November 1, 1991 between the Issuer and the Trustee (the
"Indenture") under which the Bonds have been issued, hereby certifies, with
reference to Irrevocable Letter of Credit No.106192 (the "Letter of Credit")
issued by The Huntington National Bank (the "Bank") in favor of the Trustee
(the capitalized terms used herein and not defined herein shall have the
meanings ascribed to them in the Letter of Credit, or if not so defined
therein, in the Indenture), that:
1. The Trustee is the Trustee under the Indenture for the holders of the
Bonds.
2. This Certificate accompanies a draft in the amount of $____________ by
which the Trustee is making a drawing under the Letter of Credit in respect of
the payment of accrued interest on Bonds, which payment is due on or before
____________ (the "Value Date"). None of such Bonds is a Company Bond or a
Custody Bond as defined in the Indenture.
3. The Trustee has not received a notice from the Bank that reinstatement
of the Letter of Credit in respect of any Interest Draft shall not occur.
4. The amount of the draft accompanying this Certificate (i) is being
drawn against the Interest Component of the Letter of Credit Amount and does
not exceed the Letter of Credit Amount, as reduced and reinstated in accordance
with the terms of the Letter of Credit, or the Interest Component, as reduced
and reinstated in accordance with the terms of the Letter of Credit, (ii) was
computed in accordance with the terms and conditions of the Bonds and the
Indenture, (iii) does not include any amount in respect of interest on Bonds
which was included in any Interest Draft, Tender Draft or Redemption Draft
presented and not dishonored on or prior to the date of this Certificate, and
(iv) shall be applied pursuant to the provisions of the Bonds and the Indenture
to the payment of accrued interest on Bonds which are not Company Bonds or
Custody Bonds.
29
ANNEX 1 to The Huntington National Bank
Irrevocable Letter of Credit No. 106192
5. If this Certificate and the accompanying draft are initially presented
by telex or telecopier, the originals of such draft and this Certificate on the
Trustee's letterhead manually signed by one of its officers are being mailed to
you concurrently by first class United States mail.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the day of the ______ day of ____________________ , 19_.
PNC BANK, NATIONAL ASSOCIATION, TRUSTEE
By___________________________________
Name_________________________________
Title__________________________________
30
ANNEX 2 to The Huntington National Bank
Irrevocable Letter of Credit No. 106192
To: The Huntington National Bank
41 South High Street
Columbus, Ohio 43287
Attention: International Department
CERTIFICATE FOR INTEREST DRAWING IN RESPECT OF PRINCIPAL
AND ACCRUED INTEREST ON VARIABLE RATE DEMAND
REVENUE BONDS, SERIES OF 1991 (McINNES STEEL COMPANY PROJECT)
ISSUED BY ERIE COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY
The undersigned, a duly authorized officer of PNC BANK, NATIONAL
ASSOCIATION, successor to Marine Bank, TRUSTEE (the "Trustee") under the Trust
Indenture dated as of November 1, 1991 between the Issuer and the Trustee (the
"Indenture") under which the Bonds have been issued, hereby certifies. with
reference to Irrevocable Letter of Credit No. 106192 (the "Letter of Credit")
issued by The Huntington National Bank (the "Bank") in favor of the Trustee
(the capitalized terms used herein and not defined herein shall have the
meanings ascribed to them in the Letter of Credit, or if not so defined
therein, in the Indenture), that:
1. The Trustee is the Trustee under the Indenture for the holders of the
Bonds.
2. This Certificate accompanies a draft in the amount of
$_________________ by which the Trustee is making a drawing under the Letter
of Credit in respect of the payment of the purchase price of Bonds,
corresponding to the principal thereof and accrued interest thereon, tendered
for purchase pursuant to the provisions of the Indenture and in the case of
Bonds tendered pursuant to Section 4.01 of the Indenture, not successfully
remarketed by the Remarketing Agent (as defined in the Indenture) with the
purchase price therefor received as required under the terms of the Indenture.
Such Bonds are herein called Tendered Bonds". The purchase price payment for
the Tendered Bonds is due on or before __________________ (the "Value Date").
None of the Tendered Bonds is presently a Company Bond or a Custody Bond as
defined in the Indenture.
3. The amount of the draft accompanying this Certificate is equal to the
sum of (i) $___________________ being drawn against the Principal Component of
the Letter of Credit Amount in respect of the payment of the portion of the
purchase price of the Tendered Bonds corresponding to the principal thereof and
(ii) $________________ being drawn against the Interest Component of the Letter
Of Credit Amount in respect of the portion of the purchase price of the
Tendered Bonds corresponding to accrued interest thereon.
31
ANNEX 2 to The Huntington National Bank
Irrevocable Letter of Credit No.106192
4. The amount of the draft accompanying this Certificate does not exceed
the Letter of Credit Amount, as reduced and reinstated in accordance with the
terms of the Letter of Credit.
Neither of the components of the amount of the draft set forth in paragraph 3
of this Certificate exceeds the corresponding component of the Letter of Credit
Amount as reduced and reinstated in accordance with the terms of the Letter of
Credit. The amount of the draft accompanying this Certificate (i) was computed
in accordance with the terms and conditions of the Bonds and the Indenture,
(ii) does not include any amount in respect of principal of or interest on the
Bonds which was included in any Interest Draft, Tender Draft or Redemption
Draft presented and not dishonored on or prior to the date of this Certificate
and (iii) shall be applied pursuant to the provisions of the Bonds and the
Indenture, to the payment of purchase price of the Tendered Bonds.
5. If this Certificate and the accompanying sight draft are initially
presented by telex or telecopier, the originals of such draft and this
Certificate on the Trustee's letterhead manually signed by one of its officers
are being mailed to you concurrently by first class United States mail.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the day of the ______ day of ________________, 19_.
PNC BANK, NATIONAL ASSOCIATION, TRUSTEE
By___________________________________
Name_________________________________
Title__________________________________
32
ANNEX 3 to The Huntington National Bank
Irrevocable Letter of Credit No. 106192
To: The Huntington National Bank
41 South High Street
Columbus, Ohio 43287
Attention: International Department
CERTIFICATE FOR REDEMPTION OR FINAL PAYMENT DRAWING IN RESPECT OF
PRINCIPAL AND ACCRUED INTEREST ON VARIABLE RATE DEMAND REVENUE
BONDS, SERIES OF 1991 (McINNES STEEL COMPANY PROJECT)
ISSUED BY ERIE COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY
The undersigned, a duly authorized officer of PNC BANK, NATIONAL
ASSOCIATION, successor to Marine Bank, TRUSTEE (the "Trustee") under the Trust
Indenture dated as of November 1, 1991 between the Issuer and the Trustee (the
"Indenture") under which the Bonds have been issued, hereby certifies, with
reference to Irrevocable Letter of Credit No.106192 (the "Letter of Credit")
issued by The Huntington National Bank (the "Bank") in favor of the Trustee
(the capitalized terms used herein and not defined herein shall have the
meanings ascribed to them in the Letter of Credit, or if not so defined
therein, in the Indenture), that:
1. The Trustee is the Trustee under the Indenture for the holders of the
Bonds.
2. This Certificate accompanies a draft in the amount of $________ by
which the Trustee is making a drawing under the Letter of Credit in respect of
the payment of principal of and accrued interest on Bonds (other than Company
Bonds or Custody Bonds as defined in the Indenture) upon the applicable event
indicated in paragraph 3 of this Certificate, which payment is due on or before
_________ (the "Value Date").
3. The Trustee is presenting this Certificate and the accompanying draft
in connection with (check and complete one):
[ ] An optional redemption of the Bonds in the principal
amount of $______ pursuant to Section 9.01 of the
Indenture. After such redemption, $______ principal
amount of the Bonds will remain outstanding and will not
presently be Company Bonds or Custody Bonds.
[ ] A sinking fund redemption of the Bonds in the principal
amount of $______ pursuant to Section 9.05 of the
Indenture. After such redemption, $______ principal
amount of the Bonds will remain outstanding and will not
presently be Company Bonds or Custody Bonds.
33
ANNEX 3 to The Huntington National Bank
Irrevocable Letter of Credit No. 106192
[ ] The payment of the Bonds upon acceleration of the
maturity thereof pursuant to Section 11.02 of the
Indenture.
[ ] The payment of the Bonds at final maturity thereof
pursuant to Section 6.02 of the Indenture.
4. The amount of the draft accompanying this Certificate is equal to the
sum of (i) $________ being drawn against the Principal Component of the Letter
of Credit Amount in respect of the principal of Bonds (other than Bonds which
are presently Company Bonds or Custody Bonds) and (ii) $________ being drawn
against the Interest Component of the Letter of Credit Amount in respect of
interest accrued on such Bonds.
5. The amount of the draft accompanying this Certificate does not exceed
the Letter of Credit Amount, as reduced and reinstated in accordance with the
terms of the Letter of Credit. Neither of the components of the amount of the
draft set forth in paragraph 4 of this Certificate exceeds the corresponding
component of the Letter of Credit Amount, as reduced and reinstated in
accordance with the terms of the Letter of Credit. The amount of the draft
accompanying this Certificate (i) was computed in accordance with the terms and
conditions of the Bonds and the Indenture. (ii) does not include any amount in
respect of principal of or interest on the Bonds which was included in any
Interest Draft, Tender Draft or Redemption Draft presented and not dishonored
on or prior to the date of this Certificate, and (iii) shall be applied
pursuant to the provisions of the Bonds and the Indenture to the payment of the
principal of and accrued interest on Bonds which are not Company Bonds or
Custody Bonds.
6. If this Certificate and the accompanying draft are initially presented
by telex or telecopier, the originals of such draft and this Certificate on the
Trustee's letterhead manually signed by one of its officers are being mailed to
you concurrently by first class United States mail.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the day of the ______ day of _______________, 19_.
PNC BANK, NATIONAL ASSOCIATION, TRUSTEE
By___________________________________
Name_________________________________
Title__________________________________
34
ANNEX 4 to The Huntington National Bank
Irrevocable Letter of Credit No 106192
To: The Huntington National Bank
41 South High Street
Columbus, Ohio 43287
Attention: International Department
CERTIFICATE FOR REDUCING THE HUNTINGTON NATIONAL BANK (THE "BANK")
IRREVOCABLE LETTER OF CREDIT NO.106192 (THE "LETTER OF CREDIT")
SUPPORTING VARIABLE RATE DEMAND REVENUE BONDS, SERIES OF 1991
(McINNES STEEL COMPANY PROJECT)
ISSUED BY ERIE COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY
The undersigned, a duly authorized officer of PNC BANK, NATIONAL
ASSOCIATION, successor to Marine Bank. TRUSTEE (the "Trustee") under the Trust
Indenture dated as of November 1, 1991 between the Issuer and the Trustee (the
"Indenture") under which the Bonds have been issued. hereby certifies that (the
capitalized terms used herein and not defined herein shall have the meanings
ascribed to them in the Letter of Credit, or if not so defined therein, in the
Indenture):
1. The Trustee is the Trustee under the Indenture for the holders of the
Bonds
2. Pursuant to the provisions of the Bonds and the Indenture $________
principal amount of the Bonds have been redeemed or are deemed to have been
paid pursuant to Article XVII of the Indenture, and the remaining aggregate
principal amount of the Bonds Outstanding is $________
3. Pursuant to the terms of the Letter of Credit, the Bank is hereby
directed to reduce the Letter of Credit Amount and the Principal and Interest
Components thereof, effective on the Business Day on which you receive this
Certificate, so that after such reduction the Letter of Credit Amount shall be
$________ of which $________ shall be the Principal Component and $________
shall be the Interest Component (calculated on the basis of 60 days interest on
the Outstanding Bonds and a 365-day year, at an assumed maximum interest rate
of 15% per annum).
4. If this Certificate is initially presented by telex or telecopier, the
originals of this Certificate on the Trustee's letterhead manually signed by
one of its officers are being mailed to you concurrently by first class United
States mail.
35
ANNEX 4 to The Huntington National Bank
Irrevocable Letter of Credit No. 106192
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the day of the ______ day of ________________, 19_.
PNC BANK, NATIONAL ASSOCIATION,
TRUSTEE
By___________________________________
Name_________________________________
Title__________________________________
36
ANNEX 5 to The Huntington National Bank
Irrevocable Letter of Credit No. 106192
To: The Huntington National Bank
41 South High Street
Columbus, Ohio 43287
Attention: International Department
CERTIFICATE FOR REINSTATING THE HUNTINGTON NATIONAL BANK (THE
("BANK") IRREVOCABLE LETTER OF CREDIT NO. 106192 (THE "LETTER OF
CREDIT") SUPPORTING VARIABLE RATE DEMAND REVENUE BONDS, SERIES OF
1991 (McINNES STEEL COMPANY PROJECT) ISSUED BY
ERIE COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY
The undersigned, a duly authorized officer of PNC BANK, NATIONAL
ASSOCIATION, successor to Marine Bank. TRUSTEE (the "Trustee") under the Trust
Indenture dated as of November 1, 1991 between the Issuer and the Trustee (the
"Indenture") under which the Bonds have been issued, hereby certifies that (the
capitalized terms used herein and not defined herein shall have the meanings
ascribed to them in the Letter of Credit. or if not so defined therein, in the
Indenture):
1. The Trustee is the Trustee under the Indenture for the holders of the
Bonds.
2. On the date of this Certificate $_____________ aggregate principal
amount of Bonds are being purchased upon a remarketing thereof by the
Remarketing Agent (as defined in the Indenture). All of such Bonds were
heretofore purchased (or anticipated to be purchased) with the proceeds of one
or more Tender Drafts in the total drawing amount, of $________________ of
which proceeds $___________ was drawn in respect of principal of such Bonds and
$________ was drawn in respect of accrued interest on such Bonds. Prior to the
date of this Certificate there has been no reinstatement of the Letter of
Credit Amount with respect to amounts drawn by such Tender Drafts to purchase
such Bonds.
3. The Paying Agent has received for immediate payment (or repayment) to
the Bank in respect of the Bonds described in paragraph 2 of this Certificate
the total amount of $________, consisting of $_______________ from the
Remarketing Agent, $________________ from the Company and $_________ from the
Bank. Such total amount is being paid to the Bank at the above address with
reference to Letter of Credit No.106192, pursuant to Section 4.04 of the
Indenture, as reimbursement for amounts drawn under the Letter of Credit by the
Tender Drafts described in paragraph 2 of this Certificate; provided that,
unless such reimbursement is being made on the same day that payment of such
Tender Drafts was received by the Trustee from the Bank, the Trustee will
release the Bonds described in paragraph 2 of this Certificate for remarketing
and will make such payment to the Bank only upon receipt by the Trustee of
telephonic confirmation from the Bank of the reinstatement described in
paragraph 6 below. Such confirmation shall be made to the Trustee at (814)
871-9314, Attention: Corporate Trust
37
ANNEX 5 to The Huntington National Bank
Irrevocable Letter of Credit No. 106192
Department (which confirmation shall thereafter be sent in writing to the
Trustee at its address on file with you).
4. Of the total amount referred to in paragraph 3 of this Certificate,
$________ represents the aggregate principal amount of Bonds described in
paragraph 2 of this Certificate and $________ represents accrued interest on
such Bonds.
5. Payment of the total amount referred to in paragraph 3 of this
Certificate, together with other amounts heretofore paid to the Bank by or on
behalf of the Company, represents reimbursement for the entire outstanding
balance of all amounts drawn in respect of the Bonds described in paragraph 2
of this Certificate. The foregoing certification is made in reliance upon
representations by the Company and/or the Bank to the Trustee that, upon
payment of such amounts, the Bank will be fully reimbursed for all Tender
Drafts (or allocable portions thereof) presented to the Bank to purchase such
Bonds. No Certification is made by the Trustee as to the payment of interest
accrued pursuant to the Reimbursement, Credit and Security Documents described
in the Letter of Credit on the amounts drawn by such Tender Drafts.
6. Pursuant to paragraph 7 of the Letter of Credit, the Letter of Credit
Amount shall be automatically reinstated by an amount equal to $__________
(which does not exceed the aggregate amount of the Tender Drafts, or allocable
portions thereof, paid by the Bank to purchase such Bonds) of which $_________
(which does not exceed the aggregate amount of such Tender Drafts, or
allocable portions thereof, drawn against the Principal Component) shall be
applied to the Principal Component and $__________ (which does not exceed the
aggregate amount of such Tender Drafts, or allocable portions thereof, drawn
against the Interest Component) shall be applied to the Interest Component.
7. If this Certificate is initially presented by telex or telecopier, the
original of this Certificate on the Trustee's letterhead manually signed by one
of its officers is being mailed to you concurrently by first class United
States mail.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the day of the ______ day of ________________ , 19_.
PNC BANK, NATIONAL ASSOCIATION, TRUSTEE
By___________________________________
Name_________________________________
Title__________________________________
38
ANNEX 6 to The Huntington National Bank
Irrevocable Letter of Credit No.106192
To: The Huntington National Bank
41 South High Street
Columbus, Ohio 43287
Attention: International Department
CERTIFICATE FOR TERMINATING THE HUNTINGTON NATIONAL BANK (THE
"BANK") IRREVOCABLE LETTER OF CREDIT NO.106192 (THE "LETTER OF CREDIT")
SUPPORTING VARIABLE RATE DEMAND REVENUE BONDS, SERIES OF 1991
(McINNES STEEL COMPANY PROJECT) ISSUED BY
ERIE COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY
The undersigned, a duly authorized officer of PNC BANK, NATIONAL
ASSOCIATION, successor to Marine Bank, TRUSTEE (the "Trustee") under the Trust
Indenture dated as of November 1, 1991 between the Issuer and the Trustee (the
"Indenture") under which the Bonds have been issued, hereby certifies that (the
capitalized terms used herein and not defined herein shall have the meanings
ascribed to them in the Letter of Credit, or if not so defined therein, in the
Indenture):
1. The Trustee is the Trustee under the Indenture for the holders of the
Bonds.
2. Pursuant to the Indenture and the Letter of Credit, the Letter of
Credit shall be terminated on the date the Bank receives this Certificate, and
the Trustee is herewith surrendering the Letter of Credit for cancellation,
because no Bonds remain outstanding other than Bonds secured by a replacement
Letter of Credit.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the day of the _______ day of _______________, 19_.
PNC BANK, NATIONAL ASSOCIATION, TRUSTEE
By___________________________________
Name_________________________________
Title__________________________________
39
ANNEX 7 to The Huntington National Bank
Irrevocable Letter of Credit No. 106192
To: The Huntington National Bank
41 South High Street
Columbus, Ohio 43287
Attention: International Department
Re: The Huntington National Bank
Irrevocable Letter of Credit
No. 106192
Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
(Name of Transferee)
(Address)
all rights of the undersigned beneficiary to draw under the above Letter of
Credit in its entirety. Said transferee has succeeded to the undersigned,
successor to Marine Bank, as Trustee under the Trust Indenture dated as of
November 1, 1991 between Erie County Industrial Development Authority and
Marine Bank, as Trustee.
By this transfer, all rights of the undersigned beneficiary in such Letter
of Credit are transferred to the transferee and the transferee shall have the
sole rights as beneficiary thereof, including sole rights relating to any
amendments whether increases or extensions or other amendments and whether now
existing or hereafter made. All amendments are to be advised direct to the
transferee without necessity of any consent of or notice to the undersigned
beneficiary.
The original of such Letter of Credit is returned herewith, and in
accordance therewith we ask you to transfer the Letter of Credit to the
transferee in the Letter of Credit Amount (as defined in the Letter of Credit)
with provision for reinstating or increasing the Letter of Credit Amount with
respect to all drawings by Interest Drafts and Tender Drafts (as defined in the
40
Letter of Credit) with respect to which the Letter of Credit Amount of the
original Letter of Credit may be reinstated, and forward it directly to the
transferee with your customary notice of transfer.
Very truly yours,
SIGNATURE AUTHENTICATED PNC BANK, NATIONAL ASSOCIATION,
TRUSTEE
__________________________ By___________________________________
__________________________ Title__________________________________
(Authorized Signature)
41
EXHIBIT B
PROJECT FACILITIES
The Project Facilities consist in part of a one-story 29,955 square foot
building and related furnishings, machinery and equipment now or hereafter to
be incorporated into said building as constructed on approximately 6.5 acres of
land, located in the City of Erie, Erie County, Pennsylvania. Such land on
which such building is located is more fully described in Exhibit B-1 attached
hereto.
The following is an itemization of the Project Facilities furnishings,
machinery and equipment components as the same were identified as part of the
Project Facilities at the time of initial acquisition:
Machinery, Fixtures and Equipment, including, but not limited to:
Ring Mill: - The Ring Mill is a Wagner, Type RAW 63/63 - 1600/315, radial
axial rolling machine, custom engineered to McInnes specification. The machine
is computer controlled, has an axial and radial rolling force of 63 metric tons
and is capable of rolling seamless rings with an outside diameter ranging from
100 mm - 1600 mm (4" - 63"), ring height from 20 mm - 315 mm (1 " - 12") and a
maximum ring weight of 630 KG (1,400 lbs.)
Hydraulic Press - The Hydraulic Press is an open die forging - ring
preform press and will be utilized in preforming blanks for the Ring Mill. The
Press is a four column, push down of moving cylinder design with a capacity of
1,200 U.S. tons to 1,800 U.S. tons. Ring blanks prepared on this press will
typically weigh 10 KG (25 lbs.) and greater.
Mechanical Press - The Mechanical Press is a 1,600 U.S. ton to 2,500 U.S.
ton forging press that will be utilized in preforming ring blanks for the Ring
Mill in the smaller than 10 KG (25 lbs.) size range.
Forge Furnaces - To support the flexibility of the Wagner Ring Mill four
Forge Furnaces were needed.
Heat Treat Furnaces - Two Heat Treat Furnaces were initially budgeted to
handle several heat treat cycles. The design parameters were based on a single
car bottom style furnace, with a working chamber size of 72 inches width, 144
inches depth and 36 inches in height. Temperatures to 1,500 degrees Fahrenheit
can be expected with heat uniformity of +/- 15 degrees Fahrenheit.
Electrical Service Upgrades - Two Transformers were required for the
building.
42
The transformers have been sized to provide current and future anticipated
demands. The 12,500 volt primary service was stepped down to two secondary
services through the respective transformers, one being 4,160 volts, 2,000 KVA
and the second a 480 volt, 1,500 KVA service.
TOGETHER with all additions thereto, substitutions therefor, replacements
thereof, and proceeds thereof, and together also with all other fixtures,
furnishings, machinery and equipment of whatever description hereinafter
incorporated into, becoming a part of or erected upon the aforesaid 6.5 acres
of land and the building constructed thereon so as to constitute a complete and
assembled economic unit and manufacturing facility.
B-2