EXHIBIT 10(h)
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REIMBURSEMENT AGREEMENT
by and between
CORE MATERIALS CORPORATION
and
KEYBANK NATIONAL ASSOCIATION
DATED AS OF APRIL 1, 1998
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REIMBURSEMENT AGREEMENT
This REIMBURSEMENT AGREEMENT ("Agreement"), dated as of the 1st day of
April, 1998, is by and between CORE MATERIALS CORPORATION, a Delaware
corporation (the "Borrower"), and KEYBANK NATIONAL ASSOCIATION, a national
banking association (the "Bank").
WHEREAS, in order to provide financing for the costs of acquiring,
constructing, equipping and improving an industrial building, to be located at
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ Industrial Part Tract "E", Gaffney, South
Carolina (the "South Carolina Premises") (the building located on the South
Carolina Premises and the improvements to such building and other portions of
the Premises to be constructed are herein referred to as the "Project"), the
South Carolina Jobs-Economic Development Authority (the "Issuer") proposes to
issue its Multi-Mode Variable Rate Industrial Development Revenue Bonds, Series
1998 (Core Materials Corporation Project), in the aggregate principal amount of
Seven Million Five Hundred Thousand Dollars ($7,500,000) (the "Bonds") under the
terms and conditions more fully set forth in the Trust Indenture dated as of
April 1, 1998 (the "Indenture"), by and between the Issuer and The Huntington
National Bank, Columbus, Ohio, as Trustee; and
WHEREAS, to enhance the marketability of the Bonds the Borrower has
applied to the Bank for the issuance of a letter of credit (the "Letter of
Credit") in favor of the Trustee in an amount not to exceed a maximum stated
amount of Seven Million Seven Hundred Twenty-Six Thousand Twenty-Eight Dollars
($7,726,028.00) to secure the payment of the principal of and accrued interest
on the Bonds; and
WHEREAS, it is the purpose of this Agreement to set forth the Bank's
commitment to issue the Letter of Credit and the Borrower's agreement to
reimburse the Bank for any and all payments made by the Bank pursuant to the
Letter of Credit.
NOW THEREFORE, in consideration of the mutual agreements made herein
and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto agree as follows:
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SECTION ONE
DEFINITIONS
SECTION 1.1. TERMS DEFINED. As used in this Agreement, the following
terms have the following respective meanings. Any accounting term used but not
specifically defined herein shall be construed in accordance with GAAP. The
definition of each agreement, document, and instrument set forth in this Section
1.1 shall be deemed to mean and include such agreement, document, or instrument
as amended, restated, or modified from time to time:
"BANK OBLIGATION" shall mean an amount equal to the aggregate
outstanding liability of the Bank from time to time under the Letter of Credit.
"BANK" shall mean KeyBank National Association, its successors and
assigns.
"BOND DOCUMENTS" shall mean, collectively the Indenture, the Loan
Agreement and any other document executed by the Borrower in connection with the
issuance of the Bonds (other than the Credit Documents).
"BOND PLEDGE AGREEMENT" shall mean the Bond Pledge Agreement, dated as
of April 1, 1998, among the Borrower, the Bank, and the Trustee.
"BONDS" shall mean the Issuer's $7,500,000 Multi-Mode Variable Rate
Industrial Development Revenue Bonds, Series 1998 (Core Materials Corporation
Project) issued pursuant to the Indenture.
"BORROWER" shall mean, Core Materials Corporation, a Delaware
corporation.
"BUSINESS DAY" shall mean any day of the year other than (i) a Saturday
or Sunday, (ii) any day on which banks located in either Cleveland, Ohio, or the
principal corporate trust office of the Trustee is located are required or
authorized by law to remain closed, or (iii) any day on which the New York Stock
Exchange is closed.
"COMPLETION DATE" shall mean March 31, 1999.
"CREDIT DOCUMENTS" shall mean, collectively, this Reimbursement
Agreement, the Mortgages, the Security Agreement, the Bond Pledge Agreement and
the Letter of Credit Note.
"DATE OF ISSUANCE" shall mean the date of issuance of the Letter of
Credit.
"EBITDA" shall mean, for any period, (A) the sum of the amounts for
such period of (1) net income, (2) interest expense, (3) charges for federal,
state, local and foreign income taxes, (4) depreciation and amortization
expense, and (5) extraordinary losses (and any unusual losses arising outside
the ordinary course of business not included in extraordinary losses determined
in accordance with GAAP) minus (b) the sum of the amounts for such period of (1)
extraordinary gains (and any unusual gains arising outside the ordinary course
of business not included in extraordinary gains determined in accordance with
GAAP) and (2) to the extent not deducted
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from total interest expense, any net payments received during such period under
interest rate contracts and any interest income received in respect of cash
investments.
"ENVIRONMENTAL LAW" shall mean any federal, state, or local statute,
law, ordinance, code, rule, regulation, order or decree regulating, relating to,
or imposing liability upon a Person in connection with the use, release or
disposal of any hazardous, toxic or dangerous substance, waste or material.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as the same may from time to time be amended or supplemented, and all
regulations thereunder.
"EVENT OF DEFAULT" shall have the meaning assigned thereto in Section 8
hereof.
"EXPIRATION DATE" shall mean April 17, 2003, unless extended by the
Bank in writing pursuant to Section 2.5.
"FEE CALCULATION AMOUNT" shall have the meaning set forth in Section
2.2(b).
"FUNDED DEBT" shall mean, at a particular date, the Indebtedness of the
Borrower for money borrowed, whether secured or unsecured, having a final
maturity (or which by the term thereof is renewable or extendible at the option
of the obligor for a period ending) more than one year after the date of
creation thereof.
"GAAP" shall mean generally accepted accounting principles as then in
effect, which shall include the official interpretations thereof by the
Financial Accounting Standards Board, consistently applied.
"IMPROVEMENTS" shall mean the leasehold improvements to be constructed
in and to the Project and financed, in part, by the proceeds of the Bonds.
"INDEBTEDNESS" shall mean, at a particular date, the liabilities of
Borrower, as determined in accordance with GAAP, consistently applied,
including, without limitation, all indebtedness for money borrowed or for the
deferred purchase price of property and lease obligations of the Borrower which
have been, or which in accordance with Statement of Financial Accounting
Standards No. 13, as from time to time amended, should be, capitalized.
"INDENTURE" shall mean the Trust Indenture, dated as of April 1, 1998,
between the Issuer and the Trustee.
"INDENTURE DEFAULT" shall mean an Event of Default under and pursuant
to the Indenture.
"INTEREST COMMITMENT" shall have the meaning set forth in the Letter of
Credit.
"INTEREST DRAWING" shall have the meaning set forth in the Letter of
Credit.
"INTEREST PORTION" shall have the meaning set forth in the Letter of
Credit.
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"ISSUER" shall mean the South Carolina Jobs-Economic Development
Authority, a public body politic and corporate and an agency of the State of
South Carolina.
"LETTER OF CREDIT" shall mean the Letter of Credit to be issued by the
Bank on the Closing Date pursuant to this Agreement, such Letter of Credit to be
substantially in the form of Exhibit B attached hereto.
"LETTER OF CREDIT COMMITMENT" shall have the meaning set forth in the
Letter of Credit.
"LETTER OF CREDIT FEE" shall have the meaning set forth in Section
2.2(b) of this Agreement.
"LETTER OF CREDIT NOTE" shall mean the promissory note from the
Borrower to the Bank in the form attached hereto as Exhibit A evidencing the
Borrower's obligations to make payment to the Bank under this Agreement for
amounts drawn under the Letter of Credit.
"LOAN AGREEMENT" shall mean the Loan Agreement, dated as of April 1,
1998, between the Issuer and the Borrower.
"LOANS" shall mean any loans or other credit facilities by the Bank in
favor of the Borrower including but not limited to (a) loans or credit of any
type extended to the Borrower by the Bank, including the loan evidenced by the
Variable Rate Loan, the Sale/Leaseback, and the Operating Lease, and any other
loans of indebtedness of Borrower to the Bank as may now exist of hereafter
arise; (b) the creation of debt by the Bank's payment of or agreement to pay
money to Borrower or to a third party for the account of Borrower; (c) the
creation of a debt by a credit to an account with the Bank upon which Borrower
is entitled to draw immediately; (d) the forbearance of debt arising from a
loan; and (e) the creation of debt by execution of installment loans or lease
agreements for vehicles or equipment between Borrower and the Bank.
"MAXIMUM SENIOR FUNDED DEBT TO EBITDA RATIO" shall man the (A) sum of
the commitment amount of the Variable Rate Loan ($7,500,000 as of the date
hereof), the total Sale/Leaseback Obligations, the outstanding principal amount
of the Bonds and any other permitted debt (other than the Subordinated Debt)
divided by (B) EBITDA.
"MINIMUM FIXED CHARGE COVERAGE RATIO" shall mean the sum of EBITDA and
rent (lease) expense, including without limitation rent payments in connection
with the Sale/Leaseback and the Operating Lease, for a given period, divided by
the sum of (A) interest expense (which shall not include interest on the
Subordinated Debt which is deferred and not paid), (B) rent (lease) expense,
including without limitation rent payments in connection with the Sale/Leaseback
and Operating Lease, (C) principal payments on the Subordinated Debt, the Bonds
and any other permitted debt, and (D) Unfunded Capital Expenditures in the
amounts disclosed by Borrower in its financial statements, for such period.
"MINIMUM DEBT SERVICE COVERAGE RATIO" shall mean the sum of EBITDA and
rent (lease) expense, including without limitation rent payments in connection
with the Sale/Leaseback and the Operating Lease, for a given period, divided by
the sum of (A) interest expense (which
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shall not include interest on the Subordinated Debt which is deferred and not
paid, (B) rent (lease) expense, including without limitation rent payments in
connection with the Sale/Leaseback and Operating Lease, and (C) principal
payments on the Subordinated Debt, the Bonds and any other permitted debt, for
such period.
"MORTGAGES" shall mean, collectively, the Open-End Mortgage, Assignment
of Rents and Leases and Security Agreement, dated as of May 7, 1998, given by
the Borrower to the Bank, and filed for record with the County Recorder,
Franklin County, Ohio on May 7, 1998, and the Open-End Mortgage, Assignment of
Rents and Leases and Security Agreement dated, as of December 3, 1997, given by
the Borrower to the Bank, and filed for record with the Clerk of Court, Cherokee
County, South Carolina on December 19, 1997, at Volume 543, Page 303, as amended
and supplemented by the Supplemental Open-End Mortgage, Assignment of Rents and
Leases and Security Agreement, dated as of May 7, 1998.
"OBLIGATIONS" shall mean all liabilities and obligations of any kind,
direct or indirect, owing by the Borrower or any one of them, to the Bank,
whether arising under this Agreement or any other Credit Documents, whether
absolute or contingent, now existing or hereafter arising, including without
limitation, letter of credit reimbursement obligations, interest, fees, Related
Expenses and Guaranteed Obligations (as defined in Section 10.4 herein).
"OHIO PREMISES" shall mean the Borrower's building located at ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇.
"OPERATING LEASE" shall mean the Equipment Lease, to be entered into by
and between the Bank and the Borrower, in an aggregate amount of $5,500,000.
"PERMITTED ENCUMBRANCES" shall mean, as of any particular time, (a)
liens for ad valorem taxes and special assessments not then delinquent, (b) this
Agreement, the Mortgages, Bond Pledge Agreement, the Security Agreement and any
security interest or other lien created thereby, (c) such minor defects,
irregularities, encumbrances and clouds on title as normally exist with respect
to property similar in character to the Pledged Collateral and as do not, in a
written certificate of an officer of the Borrower, interfere with or impair the
use or value of the property affected thereby, (d) any security interest granted
from time to time to the Bank, and (e) any items set forth on Exhibit C attached
hereto.
"PERSON" means any natural person, corporation (which shall be deemed
to include business trust), association, partnership, political entity, or
political subdivision thereof.
"PLAN" shall mean any plan defined in Section 4021(a) of ERISA in
respect of which Borrower is an "employer" or a "substantial employer" as
defined in Section 3(5) and 4001(a)(2) of ERISA, respectively.
"PLEDGED COLLATERAL" shall mean the collateral in which the Borrower
has given the Bank a security interest pursuant to the Mortgages, Security
Agreement and/or the Bond Pledge Agreement.
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"PREMISES" shall mean, collectively, the Ohio Premises and the South
Carolina Premises.
"PRIME RATE" shall mean that interest rate established from time to
time by the Bank as Bank's Prime Rate, whether or not such rate is publicly
announced. The Prime Rate may not be the lowest rate charged by the Bank for
commercial or other extensions of credit.
"PRINCIPAL COMMITMENT" shall have the meaning set forth in the Letter
of Credit.
"PRINCIPAL DRAWING" shall have the meaning set forth in the Letter of
Credit.
"PRINCIPAL PORTION" shall have the meaning set forth in the Letter of
Credit.
"PROHIBITED TRANSACTION" shall mean any prohibited transaction as that
term is defined for purposes of ERISA.
"PROJECT" shall mean the Project as defined in the recitals hereof.
"PURCHASER" shall mean the original purchaser or purchasers of the
Bonds.
"REMARKETING AGENT" shall mean, initially, Key Capital Markets, Inc.
"REMARKETING COMMITMENT" shall have the meaning set forth in the Letter
of Credit.
"REMARKETING DRAWING" shall have the meaning set forth in the Letter of
Credit.
"REMARKETING PORTION" shall have the meaning set forth in the Letter of
Credit.
"REPORTABLE EVENT" shall mean any reportable event as that term is
defined in ERISA.
"SALE/LEASEBACK" shall mean the Sale/Leaseback Equipment Financing
Facility, entered into as of December 3, 1997, by and between the Borrower and
the Bank in the aggregate amount of $12,000,000.
"SECURITY AGREEMENT" shall mean the Security Agreement dated as of
December 3, 1997 by the Borrower to the Bank.
"SOUTH CAROLINA PREMISES" shall mean the South Carolina Premises as
defined in the recitals hereto.
"STATED AMOUNT" shall have the meaning set forth in the Letter of
Credit.
"SUBORDINATED DEBT" shall mean the amount of outstanding principal and
interest owed by Borrower to Navistar International Transportation Corp., a
Delaware Corporation, at any given point in time.
"TRUSTEE" means The Huntington National Bank, Columbus, Ohio, or any
successor Trustee under the Indenture.
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"UNFUNDED CAPITAL EXPENDITURES" shall mean any capital expenditure made
for which no long-term funding source is specifically available.
"VARIABLE RATE LOAN" shall mean the $7,500,000 revolving loan from the
Bank in favor of the Borrower, as evidenced by the Variable Rate Promissory Note
and the Loan Agreement, each entered into as of December 3, 1997.
SECTION TWO
ISSUANCE OF LETTER OF CREDIT
SECTION 2.1. ISSUANCE OF LETTER OF CREDIT. Subject to the terms and
conditions hereof, the Bank agrees to execute and deliver the Letter of Credit.
The obligations of the Bank under the Letter of Credit shall be absolute and
irrevocable and shall be performed strictly in accordance with the terms of the
Letter of Credit and this Agreement. All payments made under the Letter of
Credit shall be made with the Bank's funds.
SECTION 2.2. FEES AND REIMBURSEMENT FOR LETTER OF CREDIT
(a) The Borrower hereby agrees to pay to the Bank:
(i) Before 2:00 p.m., Cleveland, Ohio time, on each date
that any amount is drawn under the Letter of Credit
pursuant to a Principal Drawing, an Interest Drawing
and/or a Remarketing Drawing, each as defined in the
Letter of Credit, a sum equal to the amount drawn
under the Letter of Credit, plus (x) interest
accrued, if any, on the amount so drawn under the
Letter of Credit as determined pursuant to clause
(iii) of this subsection (a) of this Section 2.2,
plus (y) any and all charges and expenses which the
Bank may pay or incur relative to such drawing under
the Letter of Credit, plus (z) a fee in the amount of
Two Hundred Dollars ($200) for each Principal
Drawing, Remarketing Drawing, or Interest Drawing
under the Letter of Credit; provided, however, that
in the event there is a Remarketing Drawing and the
Bonds purchased pursuant to such drawing are unable
to be remarketed by the Remarketing Agent for a
period of thirty (30) consecutive days, then such
Remarketing Drawing shall be paid on the Expiration
Date (unless the date of such payment is accelerated
pursuant to Section 8.2). Notwithstanding the
foregoing, in such event, the principal and interest
payments on such Bonds shall remain unaltered, and
the Borrower shall pay such amounts as and when due
and payable under such Bonds.
(ii) Upon each transfer of the Letter of Credit in
accordance with its terms and as a condition thereto,
a sum in such amount as shall be reasonably necessary
to cover the costs and expenses to the Bank incurred
in connection with such transfer;
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(iii) On demand interest on any and all amounts not paid by
the Borrower when due under any section of this
Agreement from the date such amounts become due until
payment in full, such interest at a rate per annum
equal to the Prime Rate;
(iv) On demand, reasonable costs, fees and expenses
incurred by the Bank in connection with the issuance
or sale of the Bonds or issuance of the Letter of
Credit or the preparation or execution of any
documents or opinions related thereto, which may
include but not be limited to legal, documentation,
search and recording fees;
(v) On demand, any and all reasonable expenses incurred
by the Bank in enforcing any of its rights under the
Credit Documents;
(vi) On or prior to the Closing Date, a one-time
origination fee in the amount of $20,000.
(b) The Borrower hereby agrees to pay to the Bank a commitment fee
(the "Letter of Credit Fee") equal to an amount calculated at
the rate (the "LOC Fee Rate") of one percent (1%) per annum
(using a 360-day year and 30-day month, but calculated on the
number of actual days elapsed) of the maximum "Fee Calculation
Amount" as hereinafter defined, available on each date of
payment of the Letter of Credit Fee. The Letter of Credit Fee
shall be payable in annual installments in advance on the
Closing Date and thereafter on each anniversary date of the
first day of the month in which the Closing Date occurred;
provided, however, that upon the Date of Issuance of the
Letter of Credit, the Borrower shall pay an installment of the
Letter of Credit Fee for the period from the Date of Issuance
to and including March 31, 1999. The "Fee Calculation Amount"
shall be the maximum amount then available to be drawn under
the Letter of Credit with respect to the Principal Commitment
plus, (ii) the maximum amount then available to be drawn under
the Letter of Credit with respect to the Interest Commitment.
If the Letter of Credit is terminated prior to the Expiration
Date, the Letter of Credit Fee shall be refunded to the
Borrower for any calendar quarter that the Letter of Credit
will not be outstanding provided that the Borrower returns or
causes to be returned the Letter of Credit to the Bank prior
to the start of such calendar quarter.
(c) If any change in any law or regulation or in the
interpretation thereof by any court or administrative or
governmental authority charged with the administration thereof
shall impose, modify or deem applicable any reserve, special
deposit or similar requirement which would increase or
decrease the Bank's costs (i) generally upon the issuance or
maintenance of letters of credit by the Bank, (ii)
specifically in respect of this Agreement or the Letter of
Credit, or (iii) in respect of any capital adequacy
requirement (including, without limitation, a requirement
which affects the manner in which the Bank allocates capital
resources to its commitments), and the result of such an
increase or decrease in costs as described
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in clause (i), (ii), or (iii) above shall be to increase or
decrease the costs to the Bank of issuing or maintaining the
Letter of Credit (which increase or decrease in costs shall be
the result of the Bank's reasonable allocation, of the
aggregate of such cost increases or decreases resulting from
such events), then, (x) within thirty (30) days of the Bank's
obtaining knowledge of such change in law, regulations or
interpretation thereof, the Bank shall so notify the Borrower
and (y) immediately upon receipt of such notice from the Bank,
accompanied by a certificate as to such increased or decreased
cost, the Borrower shall pay or receive a refund as of the
effective date of such change or interpretation all additional
amounts which are necessary to compensate the Bank or the
Borrower for such increased or decreased cost incurred by the
Bank.
(d) The Borrower's obligations to make payments to the Bank under
this Section 2.2 shall be deemed satisfied to the extent of
payments made by the Trustee to the Bank from funds on deposit
with and held by the Trustee pursuant to the Indenture.
SECTION 2.3. BORROWER'S OBLIGATIONS UNCONDITIONAL. The payment
obligations of the Borrower under this Agreement shall be absolute,
unconditional and irrevocable and shall be satisfied 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 Credit
Documents, the Bond Documents or any other agreement or
instrument relating thereto;
(b) Any amendment or waiver of or any consent to departure from
the terms of the Letter of Credit, the Credit Documents, the
Bond Documents or any other agreement or instrument relating
thereto;
(c) The existence of any claim, setoff, defense or right which the
Borrower may have at any time against any beneficiary or any
transferee of the Letter of Credit (or any persons or entities
for whom any such beneficiary or any such transferee may be
acting), the Bank, or any other person or entity, whether in
connection with this Agreement, the transactions contemplated
by the Credit Documents, the Bond Documents, or any unrelated
transaction;
(d) Any statement 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; or
(e) Payment by the Bank under the Letter of Credit against
presentation of a request which on its face appears to be in
accordance with the terms of the Letter of Credit.
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SECTION 2.4. PAYMENTS. All payments by the Borrower hereunder to the
Bank shall be made in lawful currency of the United States and in immediately
available funds to the main office of the Bank at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇.
SECTION 2.5. LETTER OF CREDIT EXTENSION. The Bank may in writing,
effective on each April 1, extend the Expiration Date of the Letter of Credit
for an additional one-year period; provided, however, that such extension shall
be, in each instance, made in the sole discretion of the Bank and the Bank may
at any time, upon written notice delivered to Borrower and Trustee, elect not to
extend the Expiration Date. The Bank shall notify Borrower and Trustee of its
decision of whether the Expiration Date shall be extended no later than thirty
(30) days prior to April 1 of each year, provided that the failure of Bank to
deliver such notice, or to deliver any notice, shall mean that Bank has elected
not to extend the Expiration Date. If the Bank extends the Expiration Date, it
shall do so in the form of an amendment to the Letter of Credit, which it shall
promptly deliver to Trustee.
SECTION THREE
REPRESENTATIONS AND WARRANTIES
The Borrower expressly represents and warrants that:
SECTION 3.1. EXISTENCE AND LEGAL AUTHORITY. The Borrower is a Delaware
corporation duly incorporated and validly existing and in good standing under
the laws of the State of Delaware and has all requisite power and authority to
own its property and to carry on its business as now being conducted, to enter
into the Credit Documents to which it is a party and the other agreements
referred to herein and transactions contemplated thereby, and to carry out the
provisions and conditions of such Credit Documents to which it is a party. The
Borrower is duly qualified to do business and is in full force and effect or is
in good standing in every jurisdiction where the failure to so qualify would
have a material adverse effect on the business of Borrower, including Ohio and
South Carolina.
SECTION 3.2. DUE EXECUTION AND DELIVERY. The Borrower has full power,
authority and legal right to incur the obligations provided for in, and to
execute and deliver and to perform and observe the terms and provisions of, the
Credit Documents to which it is a party, and each of them has been duly executed
and delivered by Borrower and authorized, by all required action, and Borrower
has obtained all requisite consents to the transactions contemplated thereby
under any instrument to which it is a party, and the Credit Documents constitute
the legal, valid and binding obligations of Borrower enforceable against
Borrower in accordance with their respective terms, except as the enforceability
thereof may be limited by applicable bankruptcy, insolvency or other similar
laws affecting creditors' rights generally.
SECTION 3.3. NO BREACH OF OTHER INSTRUMENTS. Neither the execution and
delivery of the Credit Documents, nor the compliance by the Borrower with the
terms and conditions of the Credit Documents, nor the consummation of the
transactions contemplated thereby, will conflict with or result in a breach of
the Certificate of Incorporation or Bylaws of the Borrower, or any
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charter or other corporate restriction, other restriction or law, regulation,
rule or order of any governmental body or agency to which the Borrower is now a
party or is subject.
SECTION 3.4. GOVERNMENT AUTHORIZATION. Except for Federal and state
securities laws with respect to the sale of the Bonds, no consent, approval,
authorization or order of any court or governmental agency or body is required
which if not obtained would have a material adverse effect on such transaction
for the consummation by the Borrower of the transactions contemplated by the
Credit Documents.
SECTION 3.5. PLEDGED COLLATERAL. The Borrower has good fee simple title
to the Premises, free and clear of all liens, pledges, mortgages, security
interests, charges, claims and other encumbrances, except the Permitted
Encumbrances. Upon proper filing with the appropriate authorities, the
Mortgages, the Security Agreement and the Bond Pledge Agreement have created or
will create, as appropriate, a valid and prior perfected security interest and
lien in favor of the Bank, subject to no other liens or encumbrances arising by,
through or under the Borrower or any other Person, except for Permitted
Encumbrances or as otherwise provided in the Bond Documents.
SECTION 3.6. ABSENCE OF DEFAULTS, ETC. The Borrower is not (i) in
default under any indenture or material contract or material agreement to which
it is a party or by which it is bound, (ii) in violation of its Certificate of
Incorporation or Bylaws, (iii) in default with respect to any order, writ,
injunction or decree of any court, or (iv) in default under any order or license
of any federal or state governmental department, which default or violation in
any of the aforesaid cases materially and adversely affects its business or
property. There exists no condition, event or act which constitutes, or after
notice or lapse of time or both would constitute, an Event of Default.
SECTION 3.7. INDEBTEDNESS OF BORROWER. The Borrower does not have
outstanding on the date hereof, any Indebtedness for borrowed money, except for
such Indebtedness reflected on the financial statements referred to in Section
3.8 hereof.
SECTION 3.8. FINANCIAL CONDITION. The Borrower has furnished to the
Bank true and correct financial statements reviewed by a certified public
accountant as of the end of the Borrower's fiscal year which ended December 31,
1997 which financial statements present fairly each Borrower's financial
condition at such date, and there has been no material adverse change in
Borrower's financial condition since that date.
SECTION 3.9. NO ADVERSE CHANGE. Subsequent to the date of the financial
statements referred to in Section 3.8 hereof, the Borrower has not incurred any
liabilities or obligations, direct or contingent, not in the ordinary course of
business and there has not been any increase in the aggregate amount of Funded
Debt of the Borrower, or any change in the business, properties or condition,
financial or otherwise, of the Borrower, except for changes arising in the
ordinary course of business or in connection with the issuance and sale of the
Bonds or as may be otherwise disclosed in writing to the Bank prior to the date
hereof.
SECTION 3.10. TAXES. The Borrower has filed all tax returns which are
to be filed and has paid, or has made adequate provision for the payment of, all
taxes which have or may become due
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pursuant to said returns or to assessments received by them. The provisions for
taxes reflected in the most recent balance sheet referred to in Section 3.8 are
believed adequate to cover any and all accrued and unpaid taxes for which the
Borrower is liable for the period ended on the date of such balance sheet and
all prior periods. The Borrower does not know of any material deficiency
assessment or proposed material deficiency assessment of taxes against the
Borrower, except as may be otherwise disclosed in writing to the Bank prior to
the date hereof.
SECTION 3.11. LITIGATION. Prior to the date hereof, there are no
actions, suits or proceedings pending, or to the actual knowledge of the
Borrower, threatened against or affecting the Borrower or property of the
Borrower in any court, or before or by any federal, state or municipal or other
governmental department, commission, board, bureau, agency or other
instrumentality, domestic or foreign, which could result in any materially
adverse change in the business, property or assets, or in the condition,
financial or otherwise, of Borrower, except for actions, suits or proceedings of
a character normally incident to the kind of business conducted by Borrower,
none of which, either individually or in the aggregate, if adversely determined,
would materially impair Borrower's right or ability to carry on its business
substantially as now conducted or materially adversely affect the financial
position or operations of Borrower.
SECTION 3.12. OWNERSHIP OF PROPERTY. Except for Permitted Encumbrances
or as otherwise permitted in the Mortgages, the Security Agreement or this
Agreement, the Borrower has good and marketable fee title to its real properties
in accordance with the laws of the jurisdiction where located, and good and
marketable title to substantially all its other property and assets, subject,
however, in the case of real property, to title defects and restrictions which
do not materially interfere with the operations conducted thereon by Borrower;
provided, further, however, that the parties acknowledge that in connection with
a fee in lieu of taxes arrangement with Cherokee County, South Carolina, the
Borrower may, at some future date, transfer its title to the South Carolina
Premises, subject to the Mortgage related thereto, and its other property and
assets located therein. Except for Permitted Encumbrances, the real property and
all other property and assets of the Borrower are free from any liens or
encumbrance securing Indebtedness and from any other liens, encumbrances,
charges or security interests of any kind. Each lease, if any, to which the
Borrower is a party is in full force and effect, and no material default on the
part of the Borrower to its knowledge, any other party thereto exists.
SECTION 3.13. ENVIRONMENTAL MATTERS. The Borrower is in compliance with
all Environmental Laws and all applicable federal, state and local health and
safety laws, regulations, ordinances or rules, except to the extent that any
non-compliance will not, in the aggregate, have a materially adverse effect on
the Borrower or the ability of the Borrower to fulfill its obligations under
this Agreement, the Mortgages or the Letter of Credit Note.
SECTION 3.14. MORTGAGES AND SECURITY AGREEMENT. The Borrower hereby
acknowledges that the Obligations owing by the Borrower to the Bank hereunder
are "other indebtedness" to the Bank as contemplated by Section 2(d) of the
Security Agreement and Section iv of each of the Mortgages.
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SECTION FOUR
CLOSING CONDITIONS
The obligation of the Bank to issue the Letter of Credit on the Closing
Date shall be subject to the following conditions precedent:
SECTION 4.1. EXECUTION AND DELIVERY OF THE CREDIT DOCUMENTS AND THE
BOND DOCUMENTS. With respect to issuance of the Letter of Credit, the Borrower
shall have delivered to the Bank fully executed copies of each of the Credit
Documents, and the Trustee and the Borrower shall have duly executed and
delivered the Bond Documents.
SECTION 4.2. ISSUANCE AND SALE OF THE BONDS. The Bonds shall have been
duly issued and sold to the Purchaser pursuant to the Bond Documents.
SECTION 4.3. REPRESENTATIONS AND WARRANTIES TRUE AS OF CLOSING AND NO
EVENT OF DEFAULT. The representations and warranties contained in this Agreement
and the other Credit Documents shall be true in all material respects on the
Closing Date with the same effect as though made on and as of that date and no
condition, event or act shall have occurred which constitutes an Event of
Default or, with notice or lapse of time, or both, would constitute an Event of
Default.
SECTION 4.4. OPINION OF BORROWER'S COUNSEL. The Bank shall have
received from counsel to the Borrower, on behalf of the Bank, an opinion with
respect to (i) the matters described in Sections 3.1, 3.2, and 3.4 of this
Agreement, (ii) the matters described in Sections 3.3, 3.6 and 3.11 of this
Agreement, to such counsel's knowledge and belief after inquiry and (iii) such
other matters incident to the transactions contemplated hereby as the Bank may
reasonably request.
SECTION 4.5. OPINION OF COUNSEL. Bank shall have received from Bond
Counsel, an opinion with regard to the tax-exempt status of the Bonds and the
absence of any securities registration requirements with respect to the Bonds
under the Securities Act of 1933, as amended. Bank shall have received from its
counsel, an opinion with regard to the absence of any securities registration
requirements with respect to the Letter of Credit under the Securities Act of
1933, as amended.
SECTION 4.6. PROCEEDINGS SATISFACTORY. All proceedings taken in
connection with the execution and delivery of this Reimbursement Agreement and
the other Credit Documents shall be reasonably satisfactory to the Bank and the
Bank shall have received copies of such certificates, documents and papers as
reasonably requested in connection therewith, all in form and substance
satisfactory to the Bank.
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SECTION FIVE
DISBURSEMENTS FROM PROJECT FUND
The Borrower shall not request or receive any disbursement of funds
from the Project Fund unless and until the Bank shall have approved such
disbursement in writing and all of the following conditions shall be true with
respect to each such disbursement:
SECTION 5.1. EXECUTION AND DELIVERY OF MISCELLANEOUS DOCUMENTS. The
Borrower shall have delivered to the Bank:
(a) Evidence that the Premises are not located in a special flood
hazard area as identified by HUD;
(b) Certificates of insurance and evidence of payment of premiums
therefor with respect to the insurance required by the Bank with respect to the
Premises as set forth in Section 6.2 below, including, but not limited to,
general liability insurance and hazard insurance, and flood insurance if
applicable;
(c) A current certified survey of the Premises prepared by a registered
surveyor satisfactory to the Bank, and containing on the face thereof the
completed certificate of the surveyor in the form of the surveyor's certificate
required by the Bank, dated a date satisfactory to the Bank, and in compliance
with the Minimum Standard Detail Requirements for ALTA/ASCM Class A land title
surveys, as adopted by the American Land Title Association and American Congress
on Surveying and Mapping in 1992;
(d) A current Phase I environmental audit of the Premises satisfactory
to the Bank in its sole discretion prepared by an environmental consultant
satisfactory to the Bank;
(e) A Commitment to issue an ALTA Loan Policy of Title Insurance issued
by the Title Company in the amount of the Letter of Credit (i) insuring that the
Mortgages, as of their respective time of filing for record, are liens upon the
Premises, and that the title to the Premises is free, clear and unencumbered,
subject only to the Permitted Encumbrances; (ii) insuring the priority of the
Mortgages over mechanics or materialmen's liens; (iii) obligating the Title
Company to affirmatively insure that access to Premises is by a dedicated and
accepted public right-of-way; and (iv) including such endorsements and
affirmative insurance as may be reasonably required by the Bank, including, but
not limited to, the so-called "Pending Disbursement Endorsement" and "Revolving
Credit Endorsement";
(f) Evidence satisfactory to the Bank that the Project, when completed,
and the Premises, and the proposed and actual use thereof, does and/or will
comply with all applicable laws, statutes, codes, ordinances, rules and
regulations, including, but not limited to, zoning and Environmental Laws, of
all governmental authorities having jurisdiction over the same, and that there
is no action or proceeding pending (or any time for an appeal of any decision
rendered) before any court, quasi-judicial body or administrative agency at the
Date of Issuance relating to the validity of this Reimbursement Agreement on the
transactions contemplated hereby or the proposed or actual use or operation of
the Premises; and
14
(g) A written appraisal (the "Appraisal") satisfactory to the Bank in
all respects, prepared by an appraiser selected and directly engaged by the Bank
pursuant to an engagement letter issued by the Bank, the cost of which Appraisal
will be charged to the Borrower, and which Appraisal shall be prepared in
accordance with the Uniform Standards of Professional Appraisal Practice
applicable to Federally Related Transactions as set out in Appendix A to the
real estate appraisal regulations adopted by the Office of the Comptroller of
the Currency pursuant to the Financial Institutions Reform, Recovery and
Enforcement Act of 1989 ("FIRREA") (Sub-part C of 12 C.F.R. 34) and which
Appraisal shall be updated, at the reasonable cost of the Borrower, upon the
occurrence of an Event of Default under any of the Credit Documents.
SECTION 5.2. BANK'S INSPECTOR'S CERTIFICATE. Prior to each disbursement
an inspector selected by the Bank shall inspect the property to verify that the
request for disbursement accurately indicates the amount of construction
completed to said date. The Bank shall have received a certificate from such
inspector certifying (i) that the construction of the Project theretofore
completed, if any, has been performed substantially in accordance with the Plans
and Specifications; (ii) that the quality of construction of the Project
theretofore completed is in accordance with generally accepted standards in the
construction industry for the cost of the construction of the Project; (iii)
that the undisbursed portion of the Project Fund together with other monies to
be provided by Borrower are adequate to complete the construction and equipping
of the Project pursuant to the Plans and Specifications by the Completion Date;
and (iv) that it is reasonable to expect that the completion of the Project will
occur on or before the Completion Date. It is understood and agreed that the
Bank shall not be liable for any reason as a result of such inspections, the
parties hereby agreeing that the inspections are solely for the benefit of the
Bank.
SECTION 5.3. NO LIENS. The Bank shall have received evidence
satisfactory to the Bank that since the last preceding disbursement from the
Project Fund there has been no change in the state of title to the Premises,
together with an endorsement to the Title Policy insuring the priority of the
Mortgages against mechanic's and materialmen's liens arising by reason of unpaid
labor and materials supplied in connection with the construction and development
of the Project. The Borrower shall pay the cost of each title update required by
the Bank from the Title Company in connection with each request for approval of
disbursement and each endorsement to the Title Policy.
SECTION 5.4. REQUEST FOR APPROVAL OF DISBURSEMENT. Not later than ten
(10) business days before the date on which the Borrower desires a disbursement
from the Project Fund, the Borrower shall submit to the Bank (i) a written
request for approval of the disbursement from the Project Fund; (ii) a
certification of the Borrower that, among other things, the Borrower has paid or
actually incurred the costs for which the request is being made; (iii) a revised
Project Budget showing the balance of each category of Project costs; and (iv) a
requisition using AIA Form G702 and/or G703 if the draw is used for construction
or such other form as the Bank may request, accompanied by a cost breakdown, the
accuracy of which shall be verified by the Bank's Inspector.
SECTION 5.5. TIMING. The Borrower will submit draw requests not more
often than once a month. Each disbursement shall not be more than 95% of the
value of work-in-place and
15
the balance will be paid upon completion based on requirements set forth below.
Retainage will be held on a subcontract by subcontract basis, and released in
connection with a particular subcontract provided all work thereunder has been
completed to the satisfaction of the Bank and its inspector and a mechanic's
lien waiver has been received from the subcontractor for all their work done on
the property. There are no retainage requirements for "soft costs" on the
project. "Soft costs" are defined as expenses which have no mechanic's lien
rights on the subject security (this does not include the contingency line item
under the general contractor's agreement).
SECTION 5.6. SUPPORTING DOCUMENTATION. The Borrower shall furnish the
Title Company with all evidence, lien waivers, or affidavits required at the
time of each disbursement to insure that all bills then due and payable for
labor and materials used in constructing the Improvements and all bills due and
payable to contractors, subcontractors, laborers, and materialmen have been paid
in full, except those bills to be paid with the proceeds of such disbursement,
and except for retainages.
SECTION 5.7. MATERIAL DAMAGE. Notwithstanding any provision of this
Reimbursement Agreement to the contrary, if the Project shall have suffered any
material damage or destruction prior to any disbursement from the Project Fund,
such damaged or destroyed portion shall be restored or replaced in a manner
acceptable to the Bank without cost to the Bank prior to the approval by the
Bank of any further disbursement from the Project Fund; provided that if such
damage or destruction shall occur during the construction period for the
Improvements, the Borrower may use any insurance proceeds to rebuild or repair
the Project.
SECTION 5.8. OTHER DISBURSEMENT APPROVAL CONDITIONS. The Bank shall not
be obligated to approve any disbursement from the Project Fund if, at the time
of a proposed disbursement, (i) an Event of Default or an event which, with the
passage of time or service of notice, or both, would be an Event of Default
under any of the Credit Documents has occurred, or (ii) any representation or
warranty made by the Borrower in any of the Credit Documents proves to be untrue
in any material respect, or (iii) the Bank determines, at any time, that the
Project will not be approved by the appropriate governmental regulatory
authorities.
SECTION 5.9. PERMITS. The Borrower shall have delivered to the Bank
building, zoning, and other required permits covering construction of the
Project together with evidence satisfactory to the Bank that all approvals
required with respect to the South Carolina Premises from third parties or any
governmental or quasi-governmental authorities have been obtained or, in the
case of approvals relating to the operation of the Project which cannot be
obtained until completion of construction, evidence satisfactory to the Bank
that such approvals are obtainable. Such evidence shall include copies of all
letters of grant or approval of all zoning changes and other site plan approvals
and subdivision approvals, all variances of zoning regulations affecting the
height, bulk, location or configuration of the Project and the South Carolina
Premises (or satisfactory opinion of counsel that the same are not required),
and all approvals or variances relating to parking or loading areas (both
on-street and off-street) and all appurtenant easements required by governmental
authorities with respect to the South Carolina Premises;
SECTION 5.10. UTILITIES. The Borrower shall have delivered to the Bank
evidence satisfactory to the Bank that (i) the South Carolina Premises has
available to it adequate water,
16
gas and electrical supply, storm and sanitary sewage facilities, other required
public utilities, and means of access between the South Carolina Premises and
public highways; and (ii) that all such facilities comply with all applicable
laws, rules and regulations, and all necessary easements to provide such utility
service to the South Carolina Premises have been obtained;
SECTION 5.11. BORROWER'S AFFIDAVIT. The Borrower shall have delivered
to the Bank the affidavit of the Borrower affirming (among other things) as of
the date of each draw, (i) that all costs for labor and material for the
construction and equipping of all improvements comprising any part of the
Project furnished to the date of Borrower's affidavit have been paid in full (in
accordance with Section 5.6 above), and (ii) that no bankruptcy or other
insolvency proceedings have been instituted by or against the Borrower.
SECTION SIX
COVENANTS
The Borrower covenants and agrees that, from the date of this Agreement
and until the obligations of the Borrower to the Bank hereunder are satisfied in
full, it will comply with the following provisions:
SECTION 6.1. ACCOUNTING; FINANCIAL STATEMENTS AND OTHER INFORMATION.
The Borrower will maintain, a standard system of accounting, established and
administered in accordance with GAAP consistently followed throughout the
periods involved, and will set aside on its books, for each fiscal year, the
proper amounts for depreciation, obsolescence, amortization, bad debts, current
and deferred taxes, and other purposes as shall be required by GAAP. The
Borrower will deliver to the Bank or cause to be delivered to the Bank:
(a) Monthly internally prepared financial statements for Borrower
certified as being true, accurate and complete by an officer
of the Borrower, not later than fifty (50) days after the
expiration of each month;
(b) As soon as practicable after the end of each fiscal year, and
in any event within ninety-five (95) days thereafter, the
audited annual financial statements of Borrower, including the
balance sheets, as at the end of such fiscal year, together
with related statements of income and retained earnings (or
accumulated deficit) and statement of cash flows for such
fiscal year, setting forth in comparative form the
corresponding figures as at the end of or for the previous
fiscal year, all in reasonable detail and in accordance with
GAAP, prepared by a certified public accountant reflected by
the Borrower and acceptable to Bank;
(c) quarterly and annual covenant compliance certificates for
Borrower certified as being true, accurate, and complete by of
officer of the Borrower, relating to those covenants describe
in Section 6.10, below, not later than fifty (50) days after
the expiration of each fiscal quarter and ninety-five (95)
days after expiration of each fiscal year, as applicable, of
the Borrower;
17
(d) With reasonable promptness, such other data and information as
from time to time may be reasonably requested by the Bank.
SECTION 6.2. INSURANCE AND MAINTENANCE OF PROPERTIES AND BUSINESS. The
Borrower will maintain, with financially sound and reputable insurers, insurance
to protect its properties and business against losses or damages of the kind
customarily insured against by corporations of established favorable reputation
engaged in the same or a similar business and similarly situated, including, but
not limited to, (a) adequate fire and extended coverage insurance in amounts and
issued by insurers acceptable to the Bank, (b) necessary workers' compensation
insurance, (c) adequate public liability and professional liability insurance,
and (d) such other insurance as may be required by law or as may be reasonably
required in writing by the Bank. The Borrower will, upon request, furnish to the
Bank a schedule of all insurance carried by it, setting forth in detail the
amount and type of such insurance. The Borrower will maintain, in good repair,
working order and condition, all properties used or useful in the businesses of
the Borrower.
SECTION 6.3. PAYMENT OF INDEBTEDNESS AND TAXES. The Borrower will pay
(a) all of its Indebtedness (not required to be subordinated hereunder) and
other obligations in accordance with normal terms or any applicable grace
periods and (b) all taxes, assessments, and other governmental charges levied
upon any of its respective properties or assets or in respect of its respective
franchises, business, income, or profits before the same become delinquent,
provided, that, (unless any material item or property would be lost, forfeited,
or materially damaged as a result thereof) Borrower's failure to pay any such
tax, assessment or charge shall not be a default if Borrower pays the same
within thirty (30) days after Borrower becomes aware that the same is overdue or
if it is being diligently contested in good faith by Borrower and, if such
contested charges, together with all interest and penalties thereon, exceeds
$250,000, if Bank is notified in advance of such contest and receives adequate
reserve or other appropriate security (including without limitation demonstrated
financial capacity of borrower to pay same) reasonably accept to the Bank to
protect the Bank against any loss therefrom.
SECTION 6.4. LITIGATION; ADVERSE CHANGES. The Borrower will promptly
notify the Bank in writing of (a) any event which, if existing at the date
hereof, would require a material qualification of the representations and
warranties set forth in Section 3.11 and (b) any material adverse change in the
condition, business, or prospects, financial or otherwise, of the Borrower.
SECTION 6.5. NOTICE OF DEFAULT. The Borrower will promptly notify the
Bank of (a) any Event of Default or event which with the passage of time or
service of notice or both would constitute an Event of Default hereunder and (b)
any demands made upon the Borrower by any Person for the acceleration and
immediate payment of any material Indebtedness owed to such Person.
SECTION 6.6. INSPECTION. The Borrower will make available for
inspection by duly authorized representatives of the Bank, its books, records,
and properties, and will furnish the Bank such information regarding its
respective business affairs and financial condition within a reasonable time
after written request therefor.
18
SECTION 6.7. ENVIRONMENTAL MATTERS. The Borrower:
(a) Shall comply in all material respects with all Environmental
Laws.
(b) Shall deliver promptly to the Bank (i) immediately upon
receipt, copies of any correspondence, notice, pleading,
citation, indictment, complaint, order, decree, or other
documents from any source asserting or alleging a circumstance
or condition which requires or may require a cleanup, removal,
remedial action, or other response by or on the part of the
Borrower under Environmental Laws or which seeks criminal or
punitive penalties from the Borrower for an alleged violation
of Environmental Law, and (ii) copies of any documents
submitted by such Borrower in response to any items listed in
(i) above.
SECTION 6.8. PAYMENT SCHEDULE OF BONDS. The Borrower shall cause the
principal amount of the Bonds to be repaid not later than the scheduled
quarterly payments as indicated on Exhibit D attached hereto and made a part
hereof.
SECTION 6.9. EXISTENCE; BUSINESS. The Borrower will cause to be done
all things reasonably necessary to preserve and keep in full force and effect
its existence and rights, to conduct its business in a prudent manner, to
maintain in full force and effect, and renew from time to time, its franchises,
permits, licenses, patents, and trademarks that are necessary to operate its
business. The Borrower will comply in all material respects with all valid laws
and regulations now in effect or hereafter promulgated by any properly
constituted governmental authority having jurisdiction; provided, however,
Borrower shall not be required to comply with any law or regulation which it is
contesting in good faith by appropriate proceedings as long as either the effect
of such law or regulation is stayed pending the resolution of such proceedings
or the effect of not complying with such law or regulation is not to jeopardize
any franchise, license, permit, patent, or trademark necessary to conduct such
Borrower's business.
SECTION 6.10. FINANCIAL COVENANTS.
(a) Maximum Senior Funded Debt to EBITDA Ratio. The Borrower shall
not permit the Maximum Senior Funded Debt to EBITDA Ratio to
exceed 4.0:1.0 as determined at the end of each fiscal
quarter, commencing December 31, 1998, calculated for the four
quarters then ended.
(b) Minimum Fixed Charge Coverage Ratio. The Borrower shall not
permit the Minimum Fixed Charge Coverage Ratio to be less than
1.1:1.0 as determined at the end of each fiscal quarter,
commencing December 31, 1999, calculated for the four quarters
then ended.
(c) Minimum Debt Service Coverage Ratio. The Borrower shall not
permit the Minimum Debt Service Coverage Ratio to be less than
1.5:1.0 as determined at the end of each fiscal quarter,
commencing June 30, 1998, for two fiscal quarters then ended;
September 30, 1998, for the three fiscal quarters then ended;
19
December 31, 1998, and each fiscal quarter thereafter, for the
four fiscal quarters then ended.
(d) Unfunded Capital Expenditures. The Borrower shall not incur
Unfunded Capital Expenditures in excess of $5,500,000 during
the fiscal year ending December 31, 1998.
SECTION 6.11. PLEDGE OF CASH OR INVESTMENT SECURITIES. Notwithstanding
anything to the contrary herein or in any Credit Document or any other document,
instrument or agreement, the Borrower's obligations hereunder and under the
Letter of Credit Note to reimburse the Bank for draws made under the Letter of
Credit with respect to the Bonds (the "Reimbursement Obligations") shall not be
secured by the FNMA Security (as defined in the Security Agreement), nor shall
the Bank require, as security for the Reimbursement Obligations, any pledge of
cash or investment type securities, coupled with covenants or arrangements which
would restrict the transfer of such cash or investment type securities in the
ordinary course of business, unless, prior to pledging such cash or securities
to the Bank coupled with such restrictive covenants or arrangements, the
Borrower delivers to the Trustee an opinion of nationally recognized bond
counsel to the effect that such pledge will not adversely affect the exclusion
of the interest on the Bonds from gross income for federal income tax purposes.
SECTION 6.12. NAVISTAR SUBORDINATION. The Borrower shall obtain a
written instrument wherein Navistar International Transportation Corp.
("Navistar") subordinates the debt owed to Navistar by the Borrower to the
Borrower's obligations to the Bank hereunder and under the Letter of Credit
Note. Such subordination instrument shall be in form and substance satisfactory
to the Bank.
SECTION SEVEN
NEGATIVE COVENANTS
The Borrower further covenants and agrees that, from the date of this
Agreement and until the obligations of the Borrower to the Bank hereunder are
satisfied in full, the Borrower will, unless the Bank shall otherwise consent or
agree, comply with the following provisions:
SECTION 7.1. USE OF COLLATERAL.
(a) Except for Cherokee County, South Carolina, which will possibly
hold title to the Premises solely for the purposes of providing the Borrower
with the benefits of a fee in lieu of tax program, the Borrower covenants that
it will not sell, assign, convey, hypothecate, lease, or sublease, or attempt to
sell, assign, convey, hypothecate, lease or sublease, all or any part of the
Premises, or any legal or equitable interest therein or cease using all or any
part of the Premises without the prior written consent of the Bank. If the Bank
consents to a change of ownership of all or any part of the Premises, the Bank
may, without notice to the Borrower, deal with such successor or successors in
interest of the Borrower with reference to the Mortgages and the Loans in the
same manner as with the Borrower, may forbear to ▇▇▇, or may extend time for
payment under or the performance of any of the Loans without discharging or in
any way affecting the liability of the Borrower under the Mortgages or the
Loans, or may make such other arrangements with such successor or successors in
interest regarding the performance of the
20
Loans as the Bank in its judgment shall consider necessary or advisable without
releasing or discharging the Borrower from any obligations or liabilities which
the Borrower may have relating to the Loans.
(b) Except in connection with the ordinary and usual course of its
business, the Borrower shall not sell, assign, pledge or otherwise transfer or
encumber any Collateral (as defined in the Security Agreement).
SECTION 7.2. MORTGAGES, SECURITY INTERESTS, AND LIENS. The Borrower
hereby covenants that it will not:
(a) allow the entry of any material judgment or lien against the
Borrower which is not satisfied, discharged or bonded-off, or
any collection action relating to such judgment or lien is not
stayed so as to prevent the issuance of a certificate of
judgment against the Borrower, within ten (10) days after the
date of entry of such judgment or lien;
(b) cause or permit any liens or encumbrances to effect or attach
to any of its properties and assets, whether now owned or
hereafter acquired, without the prior written consent of the
Bank, except for purchase money liens for assets purchased by
the Borrower after the Closing.
SECTION 7.3. MERGERS; CONSOLIDATION. The Borrower will not dissolve,
reorganize or undergo any change in its corporate structure without the prior
written consent of the Bank.
SECTION 7.4. BOND DOCUMENTS. The Borrower will not enter into an
amendment of the Bond Documents, without the prior written consent of the Bank.
SECTION EIGHT
EVENTS OF DEFAULT
SECTION 8.1. EVENTS OF DEFAULT. The occurrence of any one or more of
the following events shall constitute an Event of Default under this Agreement:
(a) Subject to any applicable notice, right to cure, and grace
period provisions, the Borrower fails to make or cause to be
made any payment to the Bank required to be made pursuant to
the terms of the Credit Documents or any Loan, or
(b) If any representation or warranty made herein by the Borrower,
in any other written statement, certificate, report, or
financial statement at any time furnished by or for the
Borrower in connection herewith or any Loan, proves to be
incorrect in any material respect when made, or
(c) If the Borrower fails to perform or observe any other
provision, covenant, or agreement contained in this Agreement
or in any other of the Credit Documents or
21
in any of the Loans, and such failure remains unremedied for
fifteen (15) calendar days after the Bank shall have given
written notice thereof to the Borrower, or
(d) An Indenture Default shall have occurred under the Indenture,
or
(e) Any change in the financial condition of the Borrower which,
in the reasonable opinion of the Bank, materially and
adversely affects the Bank's security position with respect to
the Collateral;
(f) If the Borrower (i) is adjudicated a debtor or insolvent, or
ceases, is unable, or admits in writing its inability to pay
its debts as they mature, or makes an assignment for the
benefit of creditors, (ii) applies for, or consents to, the
appointment of any receiver, trustee, or similar officer for
it or for all or any substantial part of its property, or any
such receiver, trustee, or similar officer is appointed
without the application or consent of the Borrower, (iii)
institutes, or consents to the institution of, by petition,
application, or otherwise, any bankruptcy reorganization,
arrangement, readjustment of debt, dissolution, liquidation,
or similar proceeding relating to it under the laws of any
jurisdiction, (iv) has any such proceeding described in clause
(iii) instituted against it which remains thereafter
undismissed for a period of twenty-five (25) days or (v) has
any judgment, writ, warrant of attachment or execution or
similar process is issued or levied against a substantial part
of its property and such judgment, writ, or similar process is
not released, vacated, or fully bonded within ninety (90) days
after its issue or levy.
(i) If an event of default occurs under either of the Mortgages or
the Loans.
SECTION 8.2. NO WAIVER; REMEDIES. If an Event of Default occurs, the
Bank may exercise any and all remedies, legal or equitable on behalf of the
Bank, to collect the amounts due from the Borrower pursuant to this Agreement,
and, in its sole discretion, may instruct the Trustee to redeem the Bonds. Upon
receipt by the Trustee of such instructions from the Bank, the Bonds shall be
redeemed pursuant to the Indenture. No failure on the part of the Bank to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right or remedy. The remedies herein provided are cumulative and not exclusive
of any remedies provided by law or equity.
SECTION NINE
TRANSFER, REDUCTION OR TERMINATION OF LETTER OF CREDIT
SECTION 9.1. TRANSFER OF LETTER OF CREDIT; REDUCTION OF STATED AMOUNT
AND TERMINATION OF LETTER OF CREDIT AND RELATED MATTERS.
(a) The Letter of Credit may be transferred in accordance with the
provisions set forth therein.
22
(b) If the Borrower shall be entitled to a credit against the
principal amount of the Bonds prior to maturity (the "Credit")
pursuant to an optional redemption of a portion of the Bonds
or to the purchase of Bonds in the open market and
cancellation of such Bonds in accordance with the provisions
of the Indenture, and such amounts have been paid by or on
behalf of the Borrower other than by the Bank, the Borrower
shall have the right at any time thereafter to reduce
permanently, without penalty or premium, the Stated Amount in
the manner set forth below. The Stated Amount and the
Remarketing Portion will be reduced by an amount equal to the
sum of the following corresponding reductions in the Principal
Portion, the Remarketing Portion, and the Interest Portion:
(a) the Principal Portion and the Remarketing Portion will be
reduced by an amount equal to the amount of such Credit; and
(b) the Interest Portion will be reduced by an amount equal to
one hundred ten (110) days' interest on the amount of such
Credit at the rate of ten percent (10%) per annum (calculated
on the basis of a 365-day year; 366 days in a leap year). The
aforementioned reduction will occur not less than three (3)
Business Days' after written notice to the Bank, accompanied
by the original Letter of Credit and the written certificate
of the Trustee and the Borrower stating that the Borrower is
entitled to such Credit and designating the amount of such
Credit and the date upon which such credit shall become
effective (which shall be a Business Day).
(c) If the Stated Amount shall be reduced pursuant to paragraph
(b) hereof, and the Bank shall have received from the Trustee
the outstanding Letter of Credit then, in substitution for the
then outstanding Letter of Credit, a substitute irrevocable
letter of credit, shall be issued dated such date, for an
amount equal to the amount to which the Stated Amount shall
have been so reduced (also less the amount of any drawings
upon the Letter of Credit which have not been reinstated under
paragraph (d) hereof) but otherwise having terms identical to
the then outstanding Letter of Credit.
(d) The obligation of the Bank to honor Interest Drawings, under
the Letter of Credit, up to the amount of the Interest
Portion, (as same may have been reduced pursuant to subsection
(b) of this Section 9.1), will be automatically reinstated
unless, before the end of five (5) days after the date of an
Interest Drawing, the Bank shall deliver to the Trustee and
the Borrower a certificate in the form of Schedule 4 to the
Letter of Credit, appropriately completed, stating that the
Bank is not reinstating the amount paid pursuant to such
Interest Drawing. Failure to deliver such certificate within
the time stated shall be deemed to mean the amounts drawn have
been reinstated in full, but shall not be deemed an admission
that the Bank has in fact been reimbursed by the Borrower.
Notwithstanding the Bank's delivery of a certificate providing
that the automatic reinstatement has not occurred, the Bank
may thereafter present a new certificate reinstating the
amount of such drawing as a part of the available Stated
Amount Letter of Credit Commitment.
23
(e) The Bank shall reinstate amounts drawn under the Letter of
Credit pursuant to a Remarketing Drawing upon receipt by the
Bank of money (other than draws under the Letter of Credit)
then held by the Trustee and designed to reimburse the Bank
for all or a portion of the amounts drawn pertaining to said
Remarketing Drawing with respect to the Principal Portion for
Bonds tendered for purchase to and remarketed by the
Remarketing Agent.
The Letter of Credit shall terminate automatically on the earliest of
(i) the payment by the Bank to the Trustee of the final drawing available to be
made under the Letter of Credit; (ii) receipt by the Bank of the Letter of
Credit and a certificate in the form of Schedule 7 signed by an officer of the
Trustee and an authorized representative of Borrower stating that no Bonds
remain outstanding; (iii) receipt by the Bank of the Letter of Credit and a
certificate in the form of Schedule 8 to the Letter of Credit signed by an
officer of the Trustee and an authorized representative of Borrower; or (iv) the
stated Expiration Date. Notwithstanding the foregoing, the Expiration Date may
be extended as of April 1 of each year at the Bank's option pursuant to Section
2.5 hereof.
SECTION TEN
MISCELLANEOUS
SECTION 10.1. LIABILITY OF THE BANK. Between the Borrower and the Bank,
the Borrower assumes all risks of the acts or omissions of the Trustee and any
transferee of the Letter of Credit with respect to its use of the Letter of
Credit or its proceeds. Neither the Bank nor any of its officers or directors
shall be liable or responsible for: (a) the use which may be made of the Letter
of Credit or any of the proceeds thereof, or for any acts or omissions of the
Trustee and any transferee in connection therewith; (b) the validity,
sufficiency or genuineness of documents, inaccuracy of any of the statements or
representations contained therein or of any endorsement(s) thereon, even if such
documents should in fact prove to be in any or all respects invalid,
insufficient, fraudulent or forged; (c) payment by the Bank against presentation
of documents which do not strictly comply with the terms of the Letter of
Credit, including any failure of any documents to bear any reference or adequate
reference to the Letter of Credit; or (d) any other circumstances whatsoever in
making or failing to make payment under the Letter of Credit, except the
Borrower shall have a claim against the Bank, and the Bank shall be liable to
the Borrower, to the extent, but only to the extent of any direct, as opposed to
consequential, damages suffered by the Borrower which the Borrower proves were
caused by (i) the Bank's willful misconduct or gross negligence in honoring a
draft under the Letter of Credit, or (ii) the Bank's willful failure to pay
under the Letter of Credit after presentation to it by the Trustee (or a
successor trustee under the Indenture to whom the Letter of Credit has been
transferred in accordance with its terms) of a sight draft and certificate
strictly complying with the terms and conditions of the Letter of Credit. In
furtherance and not in limitation of the foregoing, the Bank may accept
documents that appear on their face to be in order, and may assume the
genuineness and rightfulness of any signature thereon, without responsibility
for further investigation, regardless of any notice or information to the
contrary unless actually received by the Bank; provided, that if the Bank shall
receive written notification from both the Trustee and the Borrower that
documents conforming to the terms of the Letter of Credit to be presented to the
24
Bank are not to be honored, the Bank agrees that it will not honor such
documents and the Borrower shall indemnify and hold the Bank harmless from such
failure to honor.
SECTION 10.2. RIGHT TO SET-OFF. Upon the occurrence of any Event of
Default hereunder, the Bank shall have the right to setoff against all
obligations of the Borrower to the Bank hereunder, whether matured or unmatured,
all amounts owed to the Borrower by the Bank, whether or not then due and
payable, and all other funds or property of the Borrower on deposit with or
otherwise held in the custody of the Bank or any of its affiliates, all without
notice to or demand on the Borrower, such notice and demand being hereby waived.
SECTION 10.3. ADDITIONAL COLLATERAL. As additional security for this
Agreement, the Borrower agrees that in the event that the Trustee shall, after
the occurrence of a continuing Event of Default hereunder and acceleration of
the indebtedness evidenced hereby, draw upon the Letter of Credit, the Bank
shall be and become the assignee of all rights and interests of the Borrower and
the Trustee. The Borrower does hereby consent to such assignment, and does agree
to execute any and all such documents, instruments and certificates in
connection therewith as the Bank shall deem appropriate.
SECTION 10.4. NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to have been
made when delivered, or mailed first-class postage prepaid, or sent by wire,
telex, telecopier or similar electronic means of communication or delivered to a
telegraph office for transmission, addressed to the appropriate address set
forth below,
if to the Bank, at:
KeyBank National Association
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: International Department
Fax Number: 216/▇▇▇-▇▇▇▇
and a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
KeyBank National Association
Commercial Banking Division
▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as may have been furnished for such purpose to the
Borrower by the Bank in writing; or
25
if to the Borrower, at:
Core Materials Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Vorys, ▇▇▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇▇ LLP
▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as may have been furnished for such purpose to the Bank
by the Borrower in writing.
SECTION 10.5. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
agreements, representations and warranties contained in the Credit Documents
shall survive the execution and delivery of this Agreement, any investigation at
any time made by or on behalf of the Bank and the issuance and acceptance of the
Letter of Credit. All statements contained in any certificates or other
instruments delivered by the Borrower pursuant hereto shall constitute
representations and warranties by the Borrower under this Agreement.
SECTION 10.6. PAYMENTS ON HOLIDAYS. Whenever any payment to be made
pursuant to this Agreement shall be stated to be due on a public holiday in the
State of Ohio, Saturday or Sunday, such payment may be made on the next
succeeding business day and such extension of time shall in such case be
included in computing interest, if any, in connection with such payment.
SECTION 10.7. COMPUTATION OF INTEREST. Except as otherwise provided,
all computations of interest with respect to the Letter of Credit or the Letter
of Credit Note hereunder shall be made on the basis of a three hundred
sixty-five (365) day year.
SECTION 10.8. ENTIRE AGREEMENT. The Credit Documents and the Letter of
Credit embody the entire agreement and understanding among the parties hereto
and supersede all prior agreements and understandings relating to the subject
matter hereof.
SECTION 10.9. PARTIES IN INTEREST. All the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and assigns of the parties hereto and, in
particular, shall inure to the benefit of and be enforceable by the holder or
holders at any time of the Letter of Credit Note.
26
SECTION 10.10. EXPENSES. The Borrower agrees, regardless of whether or
not the Bonds are eventually issued and sold and regardless of whether or not
the transactions contemplated hereby shall be consummated, to pay all reasonable
expenses (accompanied by a detailed itemization) incurred by the Bank incident
to such transactions in the preparation of documentation relating thereto,
including all reasonable fees and disbursement of the counsel (whether special
outside counsel or attorneys in its Law Group) of the Bank, for services to the
Bank. The Borrower further agrees to pay all like expenses (accompanied by a
detailed itemization) incurred by the Bank in connection with any amendments of
or waivers or consents requested by the Borrower under or with respect to the
Credit Documents.
SECTION 10.11. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument and any of the parties hereto may execute this Agreement by
signing any such counterpart.
SECTION 10.12. OHIO CONTRACT. This Agreement shall be construed and
enforced in accordance with and be governed by the laws of the State of Ohio.
27
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as of the date first above written.
CORE MATERIALS CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Its: Vice President, Secretary,
Treasurer and Chief Financial Officer
KEYBANK NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------
Its: Senior Vice President
28
EXHIBIT A
LETTER OF CREDIT
NOTE
$7,726,028.00 Dated: May 7, 1998
FOR VALUE RECEIVED, on the Expiration Date (as defined in the Agreement
hereinafter described), or sooner as hereinafter provided, the undersigned, CORE
MATERIALS CORPORATION, a Delaware corporation (the "Borrower"), promises to pay
to the order of KEYBANK NATIONAL ASSOCIATION (herein called the "Bank"), the
lesser of (a) the face amount of a certain Letter of Credit No. S98/95374 issued
by the Bank on May 7, 1998, in the amount of Seven Million Seven Hundred
Twenty-Six Thousand Twenty-Eight Dollars ($7,726,028.00) (the "Letter of
Credit"), or (b) the unpaid balance of all draws theretofore made under the
Letter of Credit, as shown on the ledger or other record of the Bank.
Prior to maturity, the Borrower shall repay the principal amount of
this Note when and as provided in Section 2.2(a)(i) of the Agreement (hereafter
described).
The Borrower agrees to pay to the Bank interest on the unpaid principal
balance hereof at a rate per annum equal to the Prime Rate. The interest rate
hereon will change immediately upon a change in the Prime Rate. Interest hereon
shall be payable monthly on the first day of each calendar month in each year,
commencing on the first such day after the date hereof, and at maturity, or on
demand, if earlier. For any payment of principal and/or interest not paid when
due (taking into account any grace periods), except a Remarketing Drawing (as
defined in the Agreement), the Borrower shall pay a late charge of an amount
equal to the greater of twenty-five dollars ($25) or two percent (2%) of the
amount of the payment. In addition, if this Note is not fully paid as to
principal and interest at maturity (by acceleration or otherwise) the entire
unpaid balance shall thereafter bear interest at a rate per annum equal to the
Prime Rate, which rate shall be immediately and correspondingly adjusted with
each change in the Prime Rate. Interest and late fees shall be calculated using
a 365-day year. The Prime Rate is defined as that interest rate established from
time to time by the Bank as the Bank's Prime Rate, whether or not such rate is
publicly announced. The Prime Rate may not be the lowest interest rate charged
by the Bank for commercial or other extensions of credit. At no time shall the
interest rate hereon exceed the maximum permitted by law.
This Note is executed and delivered to the Bank pursuant to the terms
and conditions of a Reimbursement Agreement of even date herewith (the
"Agreement") by and between the Borrower and the Bank to which reference is made
for a statement of the rights, duties and obligations of the parties and the
security for this Note, but neither this reference to the Agreement or any
provision thereof shall affect or impair the absolute and unconditional
obligation of the Borrower to pay the principal of, and interest and late fees,
if any, on this Note when due. This Note is the Letter of Credit Note described
in the Agreement.
A-1
Payment of the principal of, and interest on, this Note shall be made
in lawful money of the United States of America, at any office of the Bank, or
at such other place as the Bank or any subsequent holder hereof shall have
designed to the Borrower in writing. The term "the Bank" as used in this Note
shall include in its meaning any subsequent holder of this Note.
The Borrower waives demand, presentment for payment, notice of
dishonor, protest and notice of protest, and diligence in the collection and
bringing suit and agrees to the application of any bank balance as payment or
part payment of this Note, or as an offset thereto, and that the Bank may extend
the time for payment, accept partial payment, take security therefor, or
exchange or release any collateral, without discharging or releasing the
Borrower.
This Note is executed at __________________.
Borrower, to the extent permitted by law, waives any right to have a
jury participate in resolving any dispute, whether sounding in contract, tort,
or otherwise, between Bank and Borrower arising out of, in connection with,
related to, or incidental to the relationship established between the Borrower
and the Bank in connection with this Note or any other agreement, instrument or
document executed or delivered in connection therewith or the transactions
related thereto.
CORE MATERIALS CORPORATION
BY:______________________________
ITS: VICE PRESIDENT, SECRETARY,
TREASURER AND CHIEF
FINANCIAL OFFICER
A-2
KEYBANK Irrevocable Transferable Letter of Credit No. S98/95374
EXHIBIT "B"
KEYBANK NATIONAL ASSOCIATION
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Date: May 7, 1998
IRREVOCABLE TRANSFERABLE LETTER OF CREDIT NO. S98/95374
Beneficiary: Applicant:
The Huntington National Bank, Trustee Core Materials Corporation
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
AMOUNT: USD $7,726,028.00
EXPIRATION DATE: April 17, 2003
Dear Sirs:
You, as Trustee under the Trust Indenture, dated as of April 1, 1998
(the "Indenture"), between you and the South Carolina Jobs-Economic Development
Authority (the "Issuer") pursuant to which Seven Million Five Hundred Thousand
Dollars ($7,500,000) in aggregate principal amount of South Carolina
Jobs-Economic Development Authority Multi-Mode Variable Rate Industrial
Development Revenue Bonds, Series 1998 (Core Materials Corporation Project) (the
"Bonds") are being issued by the Issuer, are hereby irrevocably authorized to
draw on KeyBank National Association pursuant to this Irrevocable Letter of
Credit, for the account of Core Materials Corporation, a Delaware corporation
(the "Borrower"), available by one or more of your drafts at sight, upon the
terms and conditions hereinafter set forth, an amount (subject to reinstatement
as hereinafter set forth) not exceeding Seven Million Seven Hundred Twenty-Six
Thousand Twenty-Eight Dollars ($7,726,028.00) (the "Letter of Credit
Commitment") of which (a) an amount not exceeding Seven Million Five Hundred
Thousand Dollars ($7,500,000.00) may be drawn to pay the principal amount of the
Bonds as and when the same become due at maturity or by acceleration or by
redemption (the "Principal Commitment"); or (b) an amount not exceeding Two
Hundred Twenty Six Thousand Twenty-Eight Dollars ($226,028.00) (the "Interest
Commitment") may be drawn with respect to the payment of up to 110 days'
interest at a rate per annum of ten percent (10%) (using a 365 day divisor) (the
"Maximum Rate") to pay interest on the Bonds when due; or (c) an amount not
exceeding Seven Million Seven Hundred Twenty-Six Thousand Twenty-Eight Dollars
($7,726,028.00) may be drawn to pay (i) the purchase price or a portion of the
purchase price equal to the principal amount of any Bonds tendered for purchase
by the Holders thereof, to the extent remarketing proceeds are not available for
such purpose to pay the portion of the purchase price of any Bonds tendered for
purchase by the Holders thereof and (ii) up to 110 days' interest at a rate per
annum equal to the Maximum Rate for interest accrued, if any, on such Bonds to
the extent remarketing proceeds are not available for such purpose (together,
the "Remarketing Commitment"), in each instance effective immediately and
expiring at the close of business on April 17, 2003, as such date may be
extended pursuant to the terms of the Reimbursement Agreement (the "Expiration
Date").
Funds under this Letter of Credit are available to you against your
executed sight draft(s) drawn on us, stating on their face: "Drawn under KeyBank
National Association Irrevocable Transferable Letter of Credit No. S98/95374 and
accompanied by: (A) if the drawing is being made with respect to the payment of
principal on the Bonds, whether due at maturity, upon mandatory or optional
redemption or upon acceleration (a "Principal Drawing"), a certificate signed by
you in the form of Schedule 1 attached hereto appropriately completed, (B) if
the drawing is being made with respect to a payment of interest on the Bonds
when due (an "Interest Drawing"), a certificate signed by you in the form of
Schedule 2 hereto appropriately completed and (c) if a drawing is being made
------------------------------------ --------------------------------------
Authorized Signature Authorized Signature
Page 1 of 1
KEYBANK Irrevocable Transferable Letter of Credit No. S98/95374
to pay the principal amount of and accrued interest on any Bonds tendered for
purchase by the Holders thereof, to the extent remarketing proceeds are not
available for such purpose (a "Remarketing Drawing") a certificate signed by you
in the form of Schedule 3 hereto appropriately completed. Presentation of such
draft(s) and certificate(s) shall be made at our ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Manager, International Department, or at
any other office of ours in the City of Cleveland, Ohio which may be designated
by us by written notice delivered to you. We hereby agree that all drafts drawn
under and in compliance with the terms of this Letter of Credit and presented
before 11:00 a.m. (Cleveland, Ohio time) on a Business Day will be duly honored
by us within one Business Day after delivery of the draft(s) and certificate(s);
provided, however, if a drawing is presented to pay the purchase price of Bonds
which have not been remarketed by the Remarketing Agent and if conforming
drawing documentation is presented at or prior to 11:00 a.m. (Cleveland, Ohio
time) on a Business Day, payments shall be made to you on such Business Day. If
requested by you, payment under this Letter of Credit may be made by wire
transfer of federal funds to your account at the Federal Reserve Bank of
Cleveland, or by deposit of immediately available funds into a designated
account that you maintain with us. As used herein, "Business Day" shall mean any
day of the year other than (i) a Saturday or Sunday, (ii) a day on which
commercial banks located in New York, New York, or the city or cities in which
are located the corporate trust offices of the Trustee and the Tender Agent and
our office at which demands for payment under this Letter of Credit are to be
presented are authorized by law to close or (iii) any day on which the New York
Stock Exchange is closed.
Drawings hereunder shall not exceed the Letter of Credit Commitment, as
the Letter of Credit Commitment may be reduced or reinstated pursuant hereto,
and, except as hereinafter provided, each drawing honored by us shall pro tanto
reduce the amount available under this Letter of Credit.
We will reinstate amounts drawn hereunder pursuant to a Remarketing
Drawing hereunder, as to the Principal Commitment and the Interest Commitment,
upon receipt by us of money (other than drawn under this Letter of Credit) then
held by the Trustee and designated to reimburse us for all or a portion of the
amounts drawn hereunder pertaining to such Remarketing Drawing with respect to
the Principal Commitment and the Interest Commitment for the principal portion
of and accrued interest on Bonds tendered for purchase to and remarketed by the
Remarketing Agent.
In connection with any Interest Drawing if you shall not have received
from us within five (5) days from the date of any demand for payment a written
notice from us in the form of the certificate attached hereto as Schedule 4
appropriately completed indicating we are not reinstating amounts paid under
such Interest Drawing or the full amount as existed prior to such drawing of the
Interest Commitment then the full amount of the Interest Commitment will be
automatically reinstated. Failure to deliver to you such certificate within the
time stated shall be deemed to mean the interest amount drawn has been
reinstated in full to the amount as existed prior to such drawing, but shall not
be deemed to be an admission that the Bank has in fact been reimbursed by the
Borrower. Upon presentation by you of any Principal Drawing, the amount of this
Letter of Credit and the amounts available to be drawn by you by any subsequent
Principal Drawing, shall be automatically decreased by an amount equal to the
amount of such Principal Drawing. If the Borrower shall be entitled to a credit
against the principal amount of the Bonds prior to maturity (the "Credit")
pursuant to an optional redemption of a portion of the Bonds or to the purchase
of Bonds in the open market and cancellation thereof in accordance with the
provisions of the Indenture or the Loan Agreement, and such amounts have been
paid by or on behalf of the Borrower other than by us, the Borrower shall have
the right at any time thereafter to reduce permanently, without penalty or
premium, the Letter of Credit Commitment in the manner set forth below. The
Letter of Credit Commitment will be reduced by an amount equal to the sum of the
following corresponding reductions in the Principal Commitment and the Interest
Commitment: (i) the Principal Commitment will be reduced to an amount equal to
the amount of such Credit, and (ii) the Interest Commitment will be reduced to
an amount equal to one hundred ten (110) days' interest at the Maximum Rate
(using a 365-day divisor) on the Bonds remaining outstanding. The reduction in
the Letter of Credit Commitment pursuant to such Credit will occur not less than
three (3) Business Days after written notice to us, accompanied by this Letter
of Credit and your written certificate in the form of Schedule 5 attached hereto
stating that the Borrower are entitled to such reduction and designating the
amount of such Credit and the date of
----------------------------------- ----------------------------------
Authorized Signature Authorized Signature
Page 2 of 1
KEYBANK Irrevocable Transferable Letter of Credit No. S98/95374
the Business Day upon which such reduction shall become effective. Upon such
presentation we will either reissue this Letter of Credit in the maximum amount
available hereunder or otherwise amend this Letter of Credit to reflect such
maximum amount then available.
Only you, as Trustee, may make a drawing under this Letter of Credit.
Upon the payment to you or your account of the amount specified in a sight draft
drawn hereunder, we shall be fully discharged on our obligation under this
Letter of Credit with respect to such sight draft, and we shall not thereafter
be obligated to make any further payments under this Letter of Credit in respect
of such sight draft to you or to any other person who may have made to you or
who makes to you a demand for payment of principal of or interest on any of the
Bonds.
This Letter of Credit shall be governed by the International Chamber of
Commerce Uniform Customs and Practice for Documentary Credits, Publication No.
500 (1993 Revision), (and including any amendments, modifications, or revisions
thereof) and the laws of the State of Ohio. Communications with respect to this
Letter of Credit shall be in writing and shall be addressed to KeyBank National
Association, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention:
International Department specifically referring thereon to KeyBank National
Association Irrevocable Transferable Letter of Credit No. S98/95374.
This Letter of Credit is transferable in its entirety (but not in part)
to any transferee who has succeeded you as Trustee under the Indenture and such
transferred Letter of Credit may be successively transferred to any Successor
Trustee or Co-Trustee thereunder, but may not be assigned, transferred or
conveyed under any other circumstance. Transfer of the amount available under
this Letter of Credit to such transferee shall be effected by the presentation
to us of this Letter of Credit accompanied by the transfer fee in the amount of
$500.00 and the transfer form in the form attached hereto as Schedule 6 and,
unless this Letter of Credit is so presented to us, we shall have no obligation
hereunder to any transferee. Upon such transfer, we will either reissue this
Letter of Credit in the maximum amount then available hereunder or otherwise
amend this Letter of Credit to reflect such maximum amount then available.
Upon the earliest of (i) the honoring by us of the final drawing
available to be made hereunder, (ii) our receipt of this outstanding Letter of
Credit and a written certificate signed by your officer and an authorized
representative of the Borrower in the form of Schedule 7 hereto appropriately
completed, stating that: (a) no Bonds are Outstanding within the meaning of the
Indenture; and (b) such officer and representative are duly authorized to sign
such certificate on behalf of you and the Borrower, (iii) our receipt of this
Letter of Credit and a written certificate signed by your officer and an
authorized representative of the Borrower in the form of Schedule 8 hereto
appropriately completed, stating that: (a) an Alternate Credit Facility has been
accepted by you and is in effect; and (b) such officer and representative are
duly authorized to sign such certificate on behalf of you and the Borrower, or
(iv) the Expiration Date, this Letter of Credit shall automatically terminate
and be delivered to us for cancellation.
This Letter of Credit sets forth in full our undertaking, and such
undertaking shall not in any way be modified, amended, amplified or limited by
reference to any document, instrument or agreement referred to herein
(including, without limitation, the Bonds or the Reimbursement Agreement),
except only the certificates and the sight draft(s) referred to herein; and any
such reference shall not be deemed to incorporate herein by reference any
document, instrument or agreement except for such certificate(s) and such sight
draft(s).
----------------------------------- ----------------------------------
Authorized Signature Authorized Signature
Page 3 of 1
KEYBANK Irrevocable Transferable Letter of Credit No. S98/95374
SCHEDULE 1
CERTIFICATE FOR THE PAYMENT OF PRINCIPAL
OF SOUTH CAROLINA JOBS-ECONOMIC DEVELOPMENT AUTHORITY
MULTI-MODE VARIABLE RATE INDUSTRIAL DEVELOPMENT
REVENUE BONDS, SERIES 1998
(CORE MATERIALS CORPORATION PROJECT)
(THE "BONDS")
The undersigned, a duly authorized signer of The Huntington National
Bank, as Trustee (the "Trustee"), hereby certifies to KeyBank National
Association (the "Bank"), with reference to Irrevocable Transferable Letter of
Credit No. S98/95374 (the "Letter of Credit" and other capitalized terms used
herein and not defined shall have their respective meanings as set forth in the
Letter of Credit) issued by the Bank in favor of the Trustee, that:
1. The Trustee is the Trustee under the Indenture for the holders of
the Bonds.
2. The Trustee is making a drawing under the Letter of Credit with
respect to the payment of principal of the Bonds.
3. The amount of principal of the Bonds which will be due and payable
on _______________________, is $_____________________.
4. The amount of the sight draft accompanying this Certificate
($___________________), together with the aggregate of all prior payments made
pursuant to Principal Drawings under this Letter of Credit for the payment of
the Bonds, does not exceed $__________________
5. The amount of the sight draft accompanying this Certificate was
computed in accordance with the terms and conditions of the Letter of Credit,
the Bonds and the Indenture.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the ______ day of _________________________, _____.
THE HUNTINGTON NATIONAL BANK,
AS TRUSTEE
By:_________________________________________
(Name and Title)
_____________________________ ___________________________________
Authorized Signature Authorized Signature
Page 4 of 1
KEYBANK Irrevocable Transferable Letter of Credit No. S98/95374
SCHEDULE 2
CERTIFICATE FOR THE PAYMENT OF INTEREST
OF SOUTH CAROLINA JOBS-ECONOMIC DEVELOPMENT AUTHORITY
MULTI-MODE VARIABLE RATE INDUSTRIAL DEVELOPMENT
REVENUE BONDS, SERIES 1998
(CORE MATERIALS CORPORATION PROJECT)
(THE "BONDS")
The undersigned, a duly authorized signer of The Huntington National
Bank, Trustee (the "Trustee"), hereby certifies to KeyBank National Association
(the "Bank"), with reference to Irrevocable Transferable Letter of Credit No.
S98/95374 (the "Letter of Credit" and other capitalized terms used herein and
not defined shall have their respective meanings as set forth in the Letter of
Credit) issued by the Bank in favor of the Trustee, that:
1. The Trustee is the Trustee under the Indenture for the holders of
the Bonds.
2. The Trustee is making a drawing under the Letter of Credit with
respect to a payment of interest accrued on the Bonds on or prior to their
stated maturity date.
3. The amount of interest on the Bonds which will be due and payable on
__________________, 19___ is $___________________________.
4. The amount of the sight draft accompanying this Certificate
($________________) does not exceed the amount available on the date hereof to
be drawn under the Letter of Credit in respect of the payment of interest
accrued on the Bonds on or prior to their stated maturity date.
5. The amount of the sight draft accompanying this Certificate was
computed in accordance with the terms and conditions of the Letter of Credit,
the Bonds and the Indenture.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the ______ day of ________________________, ______.
THE HUNTINGTON NATIONAL BANK,
AS TRUSTEE
By:_________________________________________
(Name and Title)
________________________________ ______________________________________
Authorized Signature Authorized Signature
Page 5 of 1
KEYBANK Irrevocable Transferable Letter of Credit No. S98/95374
SCHEDULE 3
CERTIFICATE FOR THE PAYMENT OF PURCHASE PRICE IN REMARKETING
OF SOUTH CAROLINA JOBS-ECONOMIC DEVELOPMENT AUTHORITY
MULTI-MODE VARIABLE RATE INDUSTRIAL DEVELOPMENT
REVENUE BONDS, SERIES 1998
(CORE MATERIALS CORPORATION PROJECT)
(THE "BONDS")
The undersigned, a duly authorized signer of The Huntington National
Bank, as Trustee (the "Trustee"), hereby certifies to KeyBank National
Association (the "Bank") with reference to KeyBank National Association
Irrevocable Transferable Letter of Credit No. S98/95374 (the "Letter of Credit"
and other capitalized terms used herein and not defined shall have their
respective meanings as set forth in the Letter of Credit) issued by the Bank in
favor of the Trustee that:
The Trustee is the Trustee under the Indenture for the holders of the
Bonds. The total amount of Bonds outstanding (as defined in the Indenture) is
$___________________.
The Trustee is making a drawing under the Letter of Credit at the
written request of the Remarketing Agent (as defined in the Indenture), to pay,
pursuant to the terms of the Indenture, the purchase price equal to the
principal amount of those Bonds which the Remarketing Agent has been unable to
remarket following this tender pursuant to the Indenture.
The Trustee: (a) is delivering or causing to be delivered to the Bank,
or its designated agent, a principal amount of the Bonds, registered in the name
of the Borrower as pledgor and the Bank as pledgee, equal to the amount of the
draft accompanying this Certificate; (b) acknowledges the pledge by the Borrower
to the Bank of the Bonds delivered pursuant to subparagraph (a) and; (c) agrees
that all payments of principal, premium, if any, and interest made on such Bonds
shall be made to the Bank, so long as the Bank is the pledgee of such Bonds.
The principal amount of the Bonds delivered to the Remarketing Agent
which the Remarketing Agent has been unable to remarket is $_________________.
The amount of interest upon such Bonds which has accrued but is unpaid is
$___________________. The amount of the draft accompanying this Certificate does
not exceed such amount due as the purchase price of the Bonds and interest
accrued thereon.
Upon receipt by the Trustee of the amount demanded hereby, (a) the
Trustee will deliver it to Bond holders only for the purpose of payment of the
purchase price of the Bonds referenced in the second paragraph hereof, (b) no
portion of it shall be applied by the Trustee for any other purpose, and (c) no
portion of it shall be commingled with other funds held by the Trustee. This
drawing is made in accordance with the provisions of the Indenture and the
Letter of Credit.
The amount of the draw accompanying this Certificate was computed in
accordance with the terms and conditions of the Bonds and the Indenture.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
certificate as of the _______ day of _______________________, ________.
THE HUNTINGTON NATIONAL BANK,
AS TRUSTEE
By:________________________________________
(Name and Title)
_____________________________ ______________________________________
Authorized Signature Authorized Signature
Page 6 of 1
KEYBANK Irrevocable Transferable Letter of Credit No. S98/95374
SCHEDULE 4
CERTIFICATE OF NONREINSTATEMENT
KEYBANK NATIONAL ASSOCIATION
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Date:___________________
KeyBank National Association Irrevocable
Transferable Letter of Credit No. S98/95374
The Huntington National Bank
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
Gentlemen:
With regard to the above mentioned Letter of Credit, be advised that in
accordance with the terms of the Letter of Credit, the amount of
$_______________ which was the subject of the __________________, ____ Interest
Drawing by you under the Letter of Credit is not being reinstated under the
Letter of Credit.
Except as herein expressly set forth, all other terms and conditions of
the Letter of Credit remain unchanged.
Very truly yours,
KEYBANK NATIONAL ASSOCIATION
By:_______________________________________
_____________________________ _____________________________________
Authorized Signature Authorized Signature
Page 7 of 1
KEYBANK Irrevocable Transferable Letter of Credit No. S98/95374
SCHEDULE 5
CERTIFICATE AS TO REDUCTION
OF LETTER OF CREDIT COMMITMENT
KeyBank National Association
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: International Department
RE: KeyBank National Association Irrevocable Transferable Letter of Credit
No. S98/95374
Gentlemen:
The undersigned, a duly authorized signer of The Huntington National
Bank, as Trustee (the "Trustee"), and a duly authorized representative of CORE
MATERIALS CORPORATION (the "Borrower"), hereby certify to KeyBank National
Association with reference to KeyBank National Association Irrevocable
Transferable Letter of Credit No. S98/95374 (the "Letter of Credit" and other
capitalized terms used herein and not defined shall have their respective
meanings as set forth in the Letter of Credit) issued by KeyBank National
Association in favor of the Trustee that:
A. The Trustee is the Trustee under the Indenture for the holders
of the Bonds.
B. The Borrower is entitled to a reduction in the Letter of
Credit Commitment. The Letter of Credit Commitment shall be
reduced, effective as of ______________________, as follows:
1. The Principal Commitment shall be reduced to
$___________________.
2. The Interest Commitment shall be reduced to
$____________________.
3. The Remarketing Commitment shall be reduced to
$________________.
C. The undersigned officer and representative are duly authorized
to sign this certificate on behalf of the Trustee and on
behalf of the Borrower respectively.
_________________________________ ______________________________________
Authorized Signature Authorized Signature
Page 8 of 1
KEYBANK Irrevocable Transferable Letter of Credit No. S98/95374
IN WITNESS WHEREOF, the Trustee and the Borrower have executed and
delivered this Certificate as of the ______ day of ________________________,
_________.
TRUSTEE: THE HUNTINGTON NATIONAL BANK,
as Trustee
By:______________________________________
Title:___________________________________
BORROWER: CORE MATERIALS CORPORATION
By:______________________________________
Title: Authorized Representative
______________________________ _____________________________________
Authorized Signature Authorized Signature
Page 9 of 1
KEYBANK Irrevocable Transferable Letter of Credit No. S98/95374
SCHEDULE 6
CERTIFICATE OF TRANSFER
KeyBank National Association
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: International Department
Date:_________________, 1998
RE: KeyBank National Association
Irrevocable Transferable Letter of Credit No. S98/95374
Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to the following (the "Transferee"):
(Name of Transferee)
(Address)
all rights of the undersigned beneficiary to draw under the above Letter of
Credit in its entirety.
By this transfer, all rights of the undersigned beneficiary in the
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 of the Letter of Credit, whether increases in the amount to be drawn
thereunder, extensions of the Expiration Date thereof, or other amendments, and
whether such amendments now exist or are made after the date hereof. All
amendments of the Letter of Credit are to be advised direct to the Transferee
without necessity of any consent of or notice to the undersigned beneficiary.
The undersigned hereby certifies that the Transferee has become successor
Trustee under the Trust Indenture dated as of April 1, 1998, between the
undersigned and the South Carolina Jobs-Economic Development Authority (the
"Issuer") relating to the Issuer's $7,500,000 Multi-Mode Variable Rate
Industrial Development Revenue Bonds, Series 1998 (Core Materials Corporation
Project) and has accepted such appointment in writing.
___________________________________ ______________________________________
Authorized Signature Authorized Signature
Page 10 of 1
KEYBANK Irrevocable Transferable Letter of Credit No. S98/95374
The original of such Letter of Credit is returned herewith, and in
accordance therewith we ask you to endorse the within transfer on the reverse
thereof, and forward it directly to the Transferee with your customary notice of
transfer, or issue a replacement Letter of Credit to the Transferee as provided
therein.
We enclose our check for $500.00 representing your transfer fee.
Very truly yours,
SIGNATURE AUTHENTICATED THE HUNTINGTON NATIONAL BANK, Trustee
___________________________________ By:____________________________________
(Authorized Officer) (Bank)
___________________________________
(Authorized Signature)
___________________________________ _____________________________________
Authorized Signature Authorized Signature
Page 11 of 1
KEYBANK Irrevocable Transferable Letter of Credit No. S98/95374
SCHEDULE 7
CERTIFICATE THAT NO BONDS ARE OUTSTANDING
KeyBank National Association
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: International Department
RE: KeyBank National Association
Irrevocable Transferable Letter of Credit No. S98/95374
Gentlemen:
The undersigned, a duly authorized signer of The Huntington National
Bank, as Trustee (the "Trustee"), and _________________, duly authorized
representative of Core Materials Corporation (the "Borrower"), hereby certify to
KeyBank National Association with reference to KeyBank National Association
Irrevocable Transferable Letter of Credit No. S98/95374 (the "Letter of Credit"
and other capitalized terms used herein and not defined shall have their
respective meanings as set forth in the Letter of Credit) issued by KeyBank
National Association in favor of the Trustee that:
1. The Trustee is the Trustee under the Indenture for the holders
of the Bonds.
2. No Bonds are Outstanding within the meaning of the Indenture.
3. The undersigned officers and representatives are duly
authorized to sign this certificate on behalf of the Trustee
and on behalf of the Borrower respectively.
___________________________________ ______________________________________
Authorized Signature Authorized Signature
Page 12 of 1
KEYBANK Irrevocable Transferable Letter of Credit No. S98/95374
IN WITNESS WHEREOF, the Trustee and the Borrower have executed and
delivered this Certificate as of the ______ day of ________________________,
_______.
THE HUNTINGTON NATIONAL BANK, TRUSTEE
By:__________________________________________
(Name and Title)
CORE MATERIALS CORPORATION
By:__________________________________________
Title: Authorized Representative
___________________________________ ______________________________________
Authorized Signature Authorized Signature
Page 13 of 1
KEYBANK Irrevocable Transferable Letter of Credit No. S98/95374
SCHEDULE 8
CERTIFICATE OF ACCEPTANCE OF ALTERNATE
LETTER OF CREDIT
KeyBank National Association
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: International Department
RE: KeyBank National Association Irrevocable Transferable Letter of Credit
No. S98/95374
Gentlemen:
The undersigned, a duly authorized signer of The Huntington National
Bank, Trustee (the "Trustee"), and _____________________, a duly authorized
representative of Core Materials Corporation (the "Borrower"), hereby certify to
KeyBank National Association with reference to KeyBank National Association
Irrevocable Transferable Letter of Credit No. S98/95374 (the "Letter of Credit"
and other capitalized terms used herein and not defined shall have their
respective meanings as set forth in the Letter of Credit) issued by KeyBank
National Association in favor of the Trustee that:
1. The Trustee is the Trustee under the Indenture for the holders
of the Bonds.
2. An alternate Letter of Credit in substitution for the Letter
of Credit has been accepted by the Trustee.
3. The undersigned officer and representative are duly authorized
to sign this certificate on behalf of the Trustee and on
behalf of the Borrower, respectively.
___________________________________ ______________________________________
Authorized Signature Authorized Signature
Page 14 of 1
KEYBANK Irrevocable Transferable Letter of Credit No. S98/95374
IN WITNESS WHEREOF, the Trustee and the Borrower have executed and
delivered this certificate as of the ______ day of _____________________,
______.
THE HUNTINGTON NATIONAL BANK, TRUSTEE
By:_________________________________________
(Name and Title)
CORE MATERIALS CORPORATION
By:_________________________________________
Title: Authorized Representative
___________________________________ ______________________________________
Authorized Signature Authorized Signature
Page 15 of 1
EXHIBIT C -- PERMITTED ENCUMBRANCES
Permitted Encumbrances for South Carolina Premises
1. Taxes and assessment for the year 1998, and subsequent years, which are
a lien not yet due and payable.
2. Any taxes assessed under the rollback provision of ss. ▇▇-▇▇-▇▇▇ (D-4)
South Carolina Code of Laws 1976, as amended.
3. Right-of-way to Board of Public Works of Gaffney, South Carolina, dated
June 30, 1951 and recorded in the Office of the Clerk of Court for
Cherokee County in Deed Book 3U at page 375.
4. Right-of-way Agreement from ▇. ▇. ▇▇▇▇ & Sons, Inc. to Board of Public
Works of Gaffney, South Carolina, dated August 16, 1951 and recorded
September 4, 1951 in the Office of the Clerk of Court for Cherokee
County in Deed Book 3Y at page 212.
5. Right-of-way for oil and natural gas pipeline from ▇. ▇. ▇▇▇▇ & Sons,
Inc. to Gaffney Pipeline Company, dated August 15, 1951 and recorded
October 17, 1951 in the Office of the Clerk of Court for Cherokee
County in Deed Book 3U at page 420.
6. Easement and right-of-way for transmission line from ▇. ▇. ▇▇▇▇ & Sons,
Inc. to Duke Power Company, dated March 6, 1950 and recorded April 15,
1950 in the Office of the Clerk of Court for Cherokee County in Deed
Book 3S at page 260.
7. Power line easement from J. ▇▇▇▇▇▇ ▇▇▇▇ to ▇▇▇▇ Power Company, dated
June 24, 1958 and recorded in the Office of the Clerk of Court for
Cherokee County in Deed Book 4W at page 10.
8. Power line easement from J. ▇▇▇▇▇▇ ▇▇▇▇ to Duke Power Company dated
February 21, 1950 and recorded April 15, 1950 in the Office of the
Clerk of Court for Cherokee County in Deed Book 3S at page 262.
9. Right-of-way from ▇▇▇▇▇▇▇ Properties, Inc. to the Board of Public Works
of the City of Gaffney, S.C., dated June 23, 1988 and recorded June 27,
1988 in the Office of the Clerk of Court for Cherokee County in Deed
Book 12V at page 867.
10. Right-of-way from ▇▇▇▇▇▇▇ Properties, Inc. to the Board of Public Works
of the City of Gaffney, S.C., dated June 23, 1988 and recorded June 27,
1988 in the Office of the Clerk of Court for Cherokee County in Deed
Book 12V at 870.
11. Covenants, conditions, easements and restrictions contained in
Declaration of Restrictive Covenants, Conditions and Easements upon
Meadowcreek Industrial Community recorded on October 14, 1987 in the
Office of the Clerk of Court for Cherokee County in Deed Book 12R at
page 384; and amended by Amendment to Declaration of Restrictive
Covenants, Conditions and Easements upon Meadowcreek Industrial
Community recorded on February 10, 1988 in the aforesaid office in Deed
Book 12T at page 683.
12. Matters of survey as shown on the Referenced Plat, specifically, the
following:
a. Reserved 10' utility easement;
b. gas line;
c. temporary power lines
d. power poles
Permitted Encumbrances for Ohio Premises
1. The premises are subject to building setback lines, platted
easements and restrictions as shown on the recorded Dedication of Manor Park
Drive of record in Plat Book 48, page 49, Recorder's office, Franklin County,
Ohio.
2. The premises are subject to restrictions contained in the deed from
Manor Real Estate Company to Realty International Inc., dated March 5, 1973,
filed April 19, 1973, and recorded in Deed Book 3326, page 384, Recorder's
Office, Franklin County, Ohio.
3. The premises are subject to an easement from International Harvester
Company to Columbus Southern Power Company dated July 27, 1992, filed August 19,
1992, and recorded in Official Record Volume 20134, page 5-03, Recorder's
Office, Franklin County, Ohio.
4. The premises are subject to a Deed easement from Navistar
International Transportation Corporation to the City of Columbus, Ohio dated May
31, 1988, filed June 10, 1988, and recorded in Official Record Volume 11731,
page B-03, Recorder's Office, Franklin County, Ohio.
5. The premises are subject to an easement from Realty International,
Inc. to Columbus and Southern Ohio Electric Company dated November 12, 1973,
filed November 20, 1973, and recorded in Deed Book 3382, page 241, Recorder's
Office, Franklin County, Ohio.
6. The premises are subject to an easement from Rockwell International
Corporation to Columbus and Southern Ohio Electric Company dated May 29, 1974,
filed June 18, 1974 and recorded in Deed Book 3417, page 276, Recorder's Office,
Franklin County, Ohio.
7 The premises are subject to an encroachment of a chain link fence
encroaching onto the adjoining parcel to the north a maximum distance of 2.8
feet, and asphalt pavement encroaching onto the adjoining parcel to the north a
maximum distance of 1.2 feet as reflected on the survey prepared by ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ of ▇▇▇▇ & ▇▇▇▇▇, dated November 8, 1996.
8. Real estate taxes not yet due and payable.
9. Zoning and building laws and ordinances.
10. Lease with GE Capital; Term Commencement Date: October 1, 1991;
Basic Term 113 months; Property: Wemhoner Press SN #20079, GMF Robotic Unloader
SN #91403132.
11. Lease with GE Capital (formerly New England Merchants Leasing
Corporation -- NEMLC); Term Commencement Date: January 1, 1989; Lease Term 10
years; Property: 2,500 ton ▇▇▇▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ #▇▇▇▇, 3,000 ton
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Molding Press, SN#4595.
EXHIBIT D
PAYMENT SCHEDULE OF BONDS
=====================================================================================================================
PAYMENT DUE DATE PAYMENT DUE DATE
INTEREST PAYMENT DATE IN PRINCIPAL AMOUNT INTEREST PAYMENT DATE IN PRINCIPAL AMOUNT
=====================================================================================================================
July 1998 $ 65,000 January 2006 120,000
----------------------------------------------------------------------------------------------------------------------
October 1998 65,000 April 2006 120,000
----------------------------------------------------------------------------------------------------------------------
January 1999 70,000 July 2006 125,000
----------------------------------------------------------------------------------------------------------------------
April 1999 70,000 October 2006 125,000
----------------------------------------------------------------------------------------------------------------------
July 1999 70,000 January 2007 130,000
----------------------------------------------------------------------------------------------------------------------
October 1999 75,000 April 2007 130,000
----------------------------------------------------------------------------------------------------------------------
January 2000 75,000 July 2007 135,000
----------------------------------------------------------------------------------------------------------------------
April 2000 75,000 October 2007 135,000
----------------------------------------------------------------------------------------------------------------------
July 2000 75,000 January 2008 140,000
----------------------------------------------------------------------------------------------------------------------
October 2000 80,000 April 2008 145,000
----------------------------------------------------------------------------------------------------------------------
January 2001 80,000 July 2008 145,000
----------------------------------------------------------------------------------------------------------------------
April 2001 80,000 October 2008 150,000
----------------------------------------------------------------------------------------------------------------------
July 2001 85,000 January 2009 150,000
----------------------------------------------------------------------------------------------------------------------
October 2001 85,000 April 2009 155,000
----------------------------------------------------------------------------------------------------------------------
January 2002 85,000 July 2009 155,000
----------------------------------------------------------------------------------------------------------------------
April 2002 90,000 October 2009 160,000
----------------------------------------------------------------------------------------------------------------------
July 2002 90,000 January 2010 165,000
----------------------------------------------------------------------------------------------------------------------
October 2002 90,000 April 2010 165,000
----------------------------------------------------------------------------------------------------------------------
January 2003 95,000 July 2010 170,000
----------------------------------------------------------------------------------------------------------------------
April 2003 95,000 October 2010 175,000
----------------------------------------------------------------------------------------------------------------------
July 2003 100,000 January 2011 175,000
----------------------------------------------------------------------------------------------------------------------
October 2003 100,000 April 2011 180,000
----------------------------------------------------------------------------------------------------------------------
January 2004 100,000 July 2011 185,000
----------------------------------------------------------------------------------------------------------------------
April 2004 105,000 October 2011 190,000
----------------------------------------------------------------------------------------------------------------------
July 2004 105,000 January 2012 190,000
----------------------------------------------------------------------------------------------------------------------
October 2004 110,000 April 2012 195,000
----------------------------------------------------------------------------------------------------------------------
January 2005 110,000 July 2012 200,000
----------------------------------------------------------------------------------------------------------------------
April 2005 110,000 October 2012 205,000
----------------------------------------------------------------------------------------------------------------------
July 2005 115,000 January 2013 210,000
----------------------------------------------------------------------------------------------------------------------
October 2005 115,000 April 2013 210,000
=====================================================================================================================