-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, kvhQrj6AUvwPPX762WPiU6ZE1wb7lemUABcsKaheq2JLm67U3YJVZEB2VC8xh++M /RitO8DkmQ0fBFM6Pxmt2g== 0000030067-94-000015.txt : 19941122 0000030067-94-000015.hdr.sgml : 19941122 ACCESSION NUMBER: 0000030067-94-000015 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19941031 ITEM INFORMATION: Other events FILED AS OF DATE: 19941116 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DRAVO CORP CENTRAL INDEX KEY: 0000030067 STANDARD INDUSTRIAL CLASSIFICATION: 1400 IRS NUMBER: 250447860 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-05642 FILM NUMBER: 94560626 BUSINESS ADDRESS: STREET 1: 3600 ONE OLIVER PLZ CITY: PITTSBURGH STATE: PA ZIP: 15222-2651 BUSINESS PHONE: 2054322651 MAIL ADDRESS: STREET 1: P O BOX 2068 CITY: MOBILE STATE: AL ZIP: 36652 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): August 18, 1994 Commission File Number: 1-5642 DRAVO CORPORATION (Exact name of registrant as specified in its charter) Pennsylvania 25-0447860 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) One Oliver Plaza, Pittsburgh, Pennsylvania 15222 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (412) 566-3000 DRAVO CORPORATION INDEX ITEM 5. LOAN DOCUMENTS Page No. Note Purchase Agreement 1 - 65 Rules of Usage and Definitions Relating to the Transaction Documents 1 - 28 Master Common Facilities Agreement 1 - 35 Deposit and Disbursement Agreement 1 - 23 Amendment Agreement 1 - 42 EX-4 2 NOTE PURCHASE AGREEMENT DRAVO BLACK RIVER LIMITED PARTNERSHIP NOTE PURCHASE AGREEMENT ___________________________________________ Dated as of August 1, 1994 ___________________________________________ Senior Secured Construction Notes Due September 30, 1995 Senior Secured Term Notes Due August 1, 2010 TABLE OF CONTENTS SECTION 1 PURCHASE AND SALE OF CONSTRUCTION NOTES. . . . . . . . . . . . 1 Section 1.1 Issuance of Construction Notes . . . . . . . . . . . . . 1 Section 1.2 Advance of Additional Funds. . . . . . . . . . . . . . . 2 Section 1.3 Draw Requests. . . . . . . . . . . . . . . . . . . . . . 2 Section 1.4 Conversion Date Advances.. . . . . . . . . . . . . . . . 3 Section 1.5 Interest Rate and Maturity of Construction Notes . . . . 3 Section 1.6 Payments on the Construction Notes . . . . . . . . . . . 3 Section 1.7 Fees Payable to the Purchaser in Connection with Construction Notes . . . . . . . . . . . . . . . . . . . . . . 4 Section 1.8 Use of Proceeds of Construction Notes . . . . . . . . . 5 SECTION 2 EXCHANGE OF CONSTRUCTION NOTES FOR TERM NOTES. . . . . . . . . 6 Section 2.1 Issuance of Term Notes . . . . . . . . . . . . . . . . . 6 Section 2.2 Payments on the Term Notes . . . . . . . . . . . . . . . 6 Section 2.3 Optional Prepayments of Term Notes.. . . . . . . . . . . 7 Section 2.4 Notice of Optional Prepayment. . . . . . . . . . . . . . 7 Section 2.5 Application of Prepayments.. . . . . . . . . . . . . . . 8 Section 2.6 Term Servicing Fee.. . . . . . . . . . . . . . . . . . . 8 Section 2.7 Surrender of Term Notes on Prepayment. . . . . . . . . . 8 Section 2.8 No Other Prepayments . . . . . . . . . . . . . . . . . . 8 SECTION 3 WARRANTIES AND REPRESENTATIONS OF PURCHASER. . . . . . . . . . 8 Section 3.1 Purchase for Investment. . . . . . . . . . . . . . . . . 8 Section 3.2 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . 9 SECTION 4 WARRANTIES AND REPRESENTATIONS OF THE SPV. . . . . . . . . . . 9 Section 4.1 Organization and Existence.. . . . . . . . . . . . . . . 9 Section 4.2 Due Authorization; No Conflict.. . . . . . . . . . . . . 9 Section 4.3 Enforceability.. . . . . . . . . . . . . . . . . . . . . 9 Section 4.4 Litigation.. . . . . . . . . . . . . . . . . . . . . . . 10 Section 4.5 Governmental Approvals.. . . . . . . . . . . . . . . . . 10 Section 4.6 Tax Returns. . . . . . . . . . . . . . . . . . . . . . . 11 Section 4.7 Compliance with Law. . . . . . . . . . . . . . . . . . . 11 Section 4.8 Title to the Project, etc. . . . . . . . . . . . . . . . 11 Section 4.9 No Events of Default.. . . . . . . . . . . . . . . . . . 11 Section 4.10 Full Disclosure. . . . . . . . . . . . . . . . . . 11 Section 4.11 Financial Statements of the Corporation and Lime.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Section 4.12 Absence of Material Contingencies. . . . . . . . . 12 Section 4.13 Material Patents and Licenses. . . . . . . . . . . 12 Section 4.14 Taxes. . . . . . . . . . . . . . . . . . . . . . . 12 Section 4.15 Utilities. . . . . . . . . . . . . . . . . . . . . 12 Section 4.16 Easements, Servitudes, Rights of Way, etc. . . . . 13 Section 4.17 Status of Project Contracts. . . . . . . . . . . . 13 Section 4.18 Collateral Documents.. . . . . . . . . . . . . . . 13 Section 4.19 Substantial Completion Date. . . . . . . . . . . . 13 Section 4.20 Independent Engineer's Certificate.. . . . . . . . 13 -ii- Section 4.21 ERISA. . . . . . . . . . . . . . . . . . . . . . . 13 Section 4.22 Environmental Matters. . . . . . . . . . . . . . . 14 Section 4.23 Federal Power Regulation Act . . . . . . . . . . . 15 Section 4.24 Holding Company Act. . . . . . . . . . . . . . . . 15 Section 4.25 Investment Company Act.. . . . . . . . . . . . . . 15 Section 4.26 Margin Regulations.. . . . . . . . . . . . . . . . 15 Section 4.27 Securities Act.. . . . . . . . . . . . . . . . . . 16 Section 4.28 Other Business.. . . . . . . . . . . . . . . . . . 16 Section 4.29 Uncontrollable Force.. . . . . . . . . . . . . . . 16 Section 4.30 Insurance; Statements to Insurers. . . . . . . . . 16 Section 4.31 Financial Broker; Fees.. . . . . . . . . . . . . . 16 Section 4.32 The Project. . . . . . . . . . . . . . . . . . . . 16 Section 4.33 Restrictive Agreements.. . . . . . . . . . . . . . 16 Section 4.34 Sufficiency of Support Agreements. . . . . . . . . 17 Section 4.35 Location of Chief Executive Office.. . . . . . . . 17 Section 4.36 Ownership. . . . . . . . . . . . . . . . . . . . . 17 Section 4.37 Labor Matters. . . . . . . . . . . . . . . . . . . 17 SECTION 5 CONDITIONS TO FUNDING. . . . . . . . . . . . . . . . . . . . . 17 Section 5.1 Initial Funding Date . . . . . . . . . . . . . . . . . . 17 Section 5.2 Equity Contribution. . . . . . . . . . . . . . . . . . . 17 Section 5.3 Opinions of Counsel. . . . . . . . . . . . . . . . . . . 17 Section 5.4 Warranties and Representations True; No Construction Defaults. . . . . . . . . . . . . . . . . . . . . 18 Section 5.5 Closing Certificates . . . . . . . . . . . . . . . . . . 18 Section 5.6 Legality; Litigation.. . . . . . . . . . . . . . . . . . 18 Section 5.7 Initial Funding Draw Request . . . . . . . . . . . . . . 19 Section 5.8 SPV Security Agreement . . . . . . . . . . . . . . . . . 19 Section 5.9 Construction Contracts; Construction Management Agreement. . . . . . . . . . . . . . . . . . . . . . . . 20 Section 5.10 OPCO Agreement.. . . . . . . . . . . . . . . . . . 20 Section 5.11 MCFA; Ground Lease . . . . . . . . . . . . . . . . 20 Section 5.12 Intercreditor Agreement. . . . . . . . . . . . . . 20 Section 5.13 Lime Security Agreement; Lime Pledge Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Section 5.14 Partner Security Agreement . . . . . . . . . . . . 21 Section 5.15 Project Mortgage and Title Insurance . . . . . . . 21 Section 5.16 Execution and Delivery of Other Transaction Documents; Copies. . . . . . . . . . . . . . . . . . . . . . . 22 Section 5.17 Governmental Approvals . . . . . . . . . . . . . . 22 Section 5.18 Surveys. . . . . . . . . . . . . . . . . . . . . . 22 Section 5.19 Soil Test. . . . . . . . . . . . . . . . . . . . . 22 Section 5.20 Environmental Site Assessments.. . . . . . . . . . 22 Section 5.21 Environmental Disclosures. . . . . . . . . . . . . 22 Section 5.22 Technical Evaluation of Project. . . . . . . . . . 22 Section 5.23 Easements. . . . . . . . . . . . . . . . . . . . . 23 Section 5.24 Utilities. . . . . . . . . . . . . . . . . . . . . 23 Section 5.25 Construction Matters . . . . . . . . . . . . . . . 23 Section 5.26 Insurance. . . . . . . . . . . . . . . . . . . . . 23 Section 5.27 Financial Statements; Projections. . . . . . . . . 23 Section 5.28 Private Placement Number.. . . . . . . . . . . . . 23 Section 5.29 Supporting Documentation.. . . . . . . . . . . . . 24 -iii- Section 5.30 Fees and Expenses. . . . . . . . . . . . . . . . . 24 Section 5.31 Material Adverse Change; Uncontrollable Force. . . 24 Section 5.32 Offering and Sale of Construction Notes. . . . . . 24 Section 5.33 Solvency . . . . . . . . . . . . . . . . . . . . . 24 Section 5.34 Collateral Agent; Disbursement Agent . . . . . . . 25 SECTION 6 CONDITIONS PRECEDENT TO SUBSEQUENT CONSTRUCTION FUNDINGS.. . . 25 Section 6.1 Continued Satisfaction of Initial Funding Conditions . . 25 Section 6.2 Material Adverse Change; No Default. . . . . . . . . . . 25 Section 6.3 Subsequent Funding Date Draw Requests. . . . . . . . . . 25 Section 6.4 Supporting Documentation.. . . . . . . . . . . . . . . . 26 Section 6.5 Equity Funding.. . . . . . . . . . . . . . . . . . . . . 26 Section 6.6 Proceedings Satisfactory.. . . . . . . . . . . . . . . . 26 SECTION 7 PROVISIONS RELATING TO CONSTRUCTION. . . . . . . . . . . . . . 26 Section 7.1 Completion of Construction.. . . . . . . . . . . . . . . 26 Section 7.2 Changes in Plans and Specifications. . . . . . . . . . . 27 Section 7.3 Inspection.. . . . . . . . . . . . . . . . . . . . . . . 27 Section 7.4 Contingency Fund.. . . . . . . . . . . . . . . . . . . . 27 Section 7.5 Sufficiency of Construction Note Proceeds. . . . . . . . 27 Section 7.6 Employment of the Independent Engineer.. . . . . . . . . 27 Section 7.7 Retainages . . . . . . . . . . . . . . . . . . . . . . . 27 Section 7.8 Off-Site Materials . . . . . . . . . . . . . . . . . . . 27 Section 7.9 Insurance. . . . . . . . . . . . . . . . . . . . . . . . 28 SECTION 8 CONDITIONS PRECEDENT TO PURCHASE OF TERM NOTES.. . . . . . . . 28 Section 8.1 Notice of Conversion Date. . . . . . . . . . . . . . . . 28 Section 8.2 No Default; Construction Note Interest Paid. . . . . . . 28 Section 8.3 Opinions of Counsel. . . . . . . . . . . . . . . . . . . 28 Section 8.4 Warranties and Representations True; No Defaults . . . . 28 Section 8.5 Closing Certificates . . . . . . . . . . . . . . . . . . 29 Section 8.6 Legality; Litigation.. . . . . . . . . . . . . . . . . . 29 Section 8.7 Execution and Delivery of Transaction Documents; Copies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Section 8.8 OPCO Agreement.. . . . . . . . . . . . . . . . . . . . . 29 Section 8.9 Continued Effectiveness of Agreements. . . . . . . . . . 29 Section 8.10 Title Policy Endorsements. . . . . . . . . . . . . 30 Section 8.11 Insurance. . . . . . . . . . . . . . . . . . . . . 30 Section 8.12 Fees and Expenses. . . . . . . . . . . . . . . . . 30 Section 8.13 Material Adverse Change; Uncontrollable Force. . . 30 Section 8.14 Final Approvals. . . . . . . . . . . . . . . . . . 30 Section 8.15 Completion Certificates. . . . . . . . . . . . . . 30 Section 8.16 As-Built Survey. . . . . . . . . . . . . . . . . . 30 Section 8.17 Operating Budget . . . . . . . . . . . . . . . . . 31 Section 8.18 Environmental Matters. . . . . . . . . . . . . . . 31 Section 8.19 Construction Costs; Required Reserve Payment . . . 31 Section 8.20 Solvency . . . . . . . . . . . . . . . . . . . . . 31 Section 8.21 Private Placement Number.. . . . . . . . . . . . . 31 -iv- Section 8.22 Proceedings Satisfactory; Additional Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . 31 SECTION 9 COVENANTS AND AGREEMENTS.. . . . . . . . . . . . . . . . . . . 31 Section 9.1 Maintenance of Existence . . . . . . . . . . . . . . . . 31 Section 9.2 Maintenance of Permits . . . . . . . . . . . . . . . . . 32 Section 9.3 Environmental Matters. . . . . . . . . . . . . . . . . . 32 Section 9.4 Payment of Notes and Maintenance of Office.. . . . . . . 32 Section 9.5 Maintenance of Books and Records . . . . . . . . . . . . 32 Section 9.6 Operation and Maintenance. . . . . . . . . . . . . . . . 33 Section 9.7 Plans and Specifications . . . . . . . . . . . . . . . . 33 Section 9.8 Operating Logs . . . . . . . . . . . . . . . . . . . . . 33 Section 9.9 Payment of Taxes . . . . . . . . . . . . . . . . . . . . 33 Section 9.10 Compliance with Applicable Law . . . . . . . . . . 33 Section 9.11 Purchase of Notes. . . . . . . . . . . . . . . . . 34 Section 9.12 Further Assurances . . . . . . . . . . . . . . . . 34 Section 9.13 Disposition of Assets. . . . . . . . . . . . . . . 35 Section 9.14 Change in Name . . . . . . . . . . . . . . . . . . 35 Section 9.15 Nature of Business . . . . . . . . . . . . . . . . 35 Section 9.16 Debt; Bank Account . . . . . . . . . . . . . . . . 35 Section 9.17 Filing of Reports. . . . . . . . . . . . . . . . . 35 Section 9.18 Transactions with Affiliates . . . . . . . . . . . 35 Section 9.19 Loans. . . . . . . . . . . . . . . . . . . . . . . 35 Section 9.20 Additional Agreements. . . . . . . . . . . . . . . 35 Section 9.21 Payment of Project Revenues. . . . . . . . . . . . 36 Section 9.22 Performance and Enforcement of Agreements. . . . . 36 Section 9.23 Liens. . . . . . . . . . . . . . . . . . . . . . . 36 Section 9.24 Reports of Liens.. . . . . . . . . . . . . . . . . 36 Section 9.25 Most Favored Nation. . . . . . . . . . . . . . . . 36 SECTION 10 INFORMATION AS TO THE COMPANIES. . . . . . . . . . . . . . . . 37 Section 10.1 Financial and Business Information.. . . . . . . . 37 Section 10.2 Officers' Certificates.. . . . . . . . . . . . . . 40 Section 10.3 Accountants' Certificates. . . . . . . . . . . . . 40 Section 10.4 Annual Independent Engineer's Report.. . . . . . . 40 Section 10.5 Annual Opinion of Counsel. . . . . . . . . . . . . 41 SECTION 11 CASUALTY; CONDEMNATION . . . . . . . . . . . . . . . . . . . . 41 Section 11.1Notice of Damage or Loss . . . . . . . . . . . . . . . . 41 Section 11.2 Repair . . . . . . . . . . . . . . . . . . . . . . 41 Section 11.3 Application of Payments on Total Loss. . . . . . . 42 Section 11.4 Application of Payments Relating to a Partial Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 SECTION 12 INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Section 12.1 Insurance by the SPV . . . . . . . . . . . . . . . 42 Section 12.2 Insurance By The Operator. . . . . . . . . . . . . 46 Section 12.3 Amendment of Requirements. . . . . . . . . . . . . 47 Section 12.4 Application of Proceeds. . . . . . . . . . . . . . 47 -v- Section 12.5 Conditions . . . . . . . . . . . . . . . . . . . . 47 Section 12.6 Evidence of Insurance. . . . . . . . . . . . . . . 48 Section 12.7 Insurance Report . . . . . . . . . . . . . . . . . 48 Section 12.8 Failure to Maintain Insurance. . . . . . . . . . . 48 Section 12.9 No Duty of the Collateral Agent to Verify. . . . . 48 Section 12.10 Maintenance of Insurance. . . . . . . . . . . . . . . 48 SECTION 13 EVENTS OF DEFAULTS--REMEDIES . . . . . . . . . . . . . . . . . 49 Section 13.1 Nature of Events . . . . . . . . . . . . . . . . . 49 Section 13.2 Acceleration of Notes. . . . . . . . . . . . . . . 52 Section 13.3 Remedies . . . . . . . . . . . . . . . . . . . . . 53 SECTION 14 INTERPRETATION OF THIS AGREEMENT . . . . . . . . . . . . . . . 53 Section 14.1 Terms Defined. . . . . . . . . . . . . . . . . . . 53 Section 14.2 Directly or Indirectly.. . . . . . . . . . . . . . 53 Section 14.3 Governing Law; Consent to Jurisdiction.. . . . . . 53 Section 14.4 Independent Construction . . . . . . . . . . . . . 54 Section 14.5 Certain Disclaimers by the Purchaser . . . . . . . 54 SECTION 15 PAYMENT OF EXPENSES. . . . . . . . . . . . . . . . . . . . . . 55 Section 15.1 Transaction Expenses . . . . . . . . . . . . . . . 55 Section 15.2 Continuing Expense Obligations . . . . . . . . . . 55 SECTION 16 REGISTRATION; SUBSTITUTION OF TERM NOTES.. . . . . . . . . . . 56 Section 16.1 Registration of Notes. . . . . . . . . . . . . . . 56 Section 16.2 Exchange of Notes. . . . . . . . . . . . . . . . . 56 Section 16.3 Replacement of Notes.. . . . . . . . . . . . . . . 57 SECTION 17 MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . 57 Section 17.1 Communications.. . . . . . . . . . . . . . . . . . 57 Section 17.2 General Indemnification. . . . . . . . . . . . . . 58 Section 17.3 Increased Costs. . . . . . . . . . . . . . . . . . 60 Section 17.4 Restriction on Sale of Notes . . . . . . . . . . . 60 Section 17.5 Disclosure to Other Persons. . . . . . . . . . . . 60 Section 17.6 Reproduction of Documents. . . . . . . . . . . . . 61 Section 17.7 Payments on Notes; other Amounts.. . . . . . . . . 62 Section 17.8 Survival . . . . . . . . . . . . . . . . . . . . . 62 Section 17.9 Successors and Assigns . . . . . . . . . . . . . . 62 Section 17.10 Amendments . . . . . . . . . . . . . . . . . . . . 63 Section 17.11 Section Headings, Table of Contents. . . . . . . . 63 Section 17.12 Duplicate Originals; Execution in Counterpart. . . 63 Section 17.13 Jury Trial Waiver. . . . . . . . . . . . . . . . . 63 -vi- DRAVO BLACK RIVER LIMITED PARTNERSHIP NOTE PURCHASE AGREEMENT Senior Secured Construction Notes Due September 30, 1995 Senior Secured Term Notes Due August 1, 2010 As of August 1, 1994 The Prudential Insurance Company of America Second Floor Gateway Center Four One Hundred Mulberry Street Newark, New Jersey 07102 Ladies and Gentlemen: Dravo Black River Limited Partnership, a Delaware limited partnership (the "SPV"), hereby agrees with you as follows: SECTION 1 PURCHASE AND SALE OF CONSTRUCTION NOTES. Section 1.1 Issuance of Construction Notes. (a) Authorization of Construction Notes. The SPV has authorized the issuance of an aggregate principal amount of up to Fifty Million Dollars ($50,000,000) (the "Commitment Amount") of its Senior Secured Construction Notes due September 30, 1995 (the "Construction Notes"). The Construction Notes shall be to the effect and substantially in the form of Exhibit A hereto. (b) Purchase and Sale of Construction Notes. The SPV hereby agrees to sell to you, and you hereby agree to purchase from the SPV, subject to the terms and conditions of this Agreement, Construction Notes in an aggregate amount equal to the Commitment Amount. (c) Initial Funding of Construction Notes. The closing of the initial sale of Construction Notes (the "Initial Funding") shall be held on August 18, 1994, or such other date as may be agreed to in writing by you and the SPV (the "Initial Funding Date"), at 10 a.m., Hartford, Connecticut time, at the offices of Hebb & Gitlin, your special counsel, One State Street, Hartford, Connecticut. At the Initial Funding, a single Construction Note will be delivered to you, which Construction Note will be (i) dated the Initial Funding Date, -1- (ii) payable as indicated on Annex 1 hereto, and (iii) in a stated principal amount equal to Fifty Million Dollars ($50,000,000). Delivery of such Construction Note to you shall be made on the Initial Funding Date against payment by you of the principal amount set forth in an Approved Draw Request delivered pursuant to Section 1.3 hereof. Section 1.2 Advance of Additional Funds. Subject to the terms and conditions of this Agreement, on each Funding Date (including, without limitation, the Initial Funding Date) you agree to advance (each an "Advance") from time to time, but not more often than once in any period of thirty (30) consecutive days and in an amount not less than Five Hundred Thousand Dollars ($500,000) (except in the case of Advances made pursuant to clause (ii) below), funds for the benefit of the SPV in an aggregate principal amount equal to the sum of (i) the amount set forth in a Draw Request delivered in compliance with Section 1.3 in respect of such Funding Date and (ii) such amount as may then be required to pay accrued interest on the outstanding Construction Notes, the fees provided for in Section 1.7 and (in connection with the Advance to be made on the Conversion Date) the Required Reserve Payment, whether or not such amounts shall be specified in a Draw Request (the SPV hereby authorizing you to advance the funds pursuant to this clause (ii) without further direction or documentation of any kind), provided that the maximum aggregate principal amount of all Advances hereunder, including the Advance made on the Initial Funding Date, shall not exceed the Commitment Amount, provided, further, that, with respect to any Subsequent Funding Date, the amount of any Advance shall be computed after giving effect to the Equity Amount to be paid pursuant to Section 3.15(b) of the Lime Security Agreement on or prior to such Subsequent Funding Date, and the application of such Equity Amount to the payment of Construction Costs and funding of the Debt Service Reserve to the extent contemplated by Section 8.19. Advances (other than those made pursuant to clause (ii) of the immediately preceding sentence) shall be deposited into the Construction Account, the Construction Completion Account and the Debt Service Reserve in accordance with this Agreement and the other Transaction Documents. Your obligations to make Advances shall terminate automatically upon the earliest to occur of (x) any acceleration of the Construction Notes pursuant to Section 13.2 hereof, (y) the Construction Note Maturity Date, or (z) the consummation of the transactions to be effected on the Conversion Date. You shall record your Advances on your Construction Notes, but any failure to make any such notation or any error in any such notation shall not affect the obligations of the SPV under such Construction Note or any other Transaction Document. At any time, the aggregate principal amount of the Construction Notes outstanding shall be the sum of the Advances made hereunder and not paid. Section 1.3 Draw Requests. The Construction Manager shall deliver a Draw Request signed by the SPV to you, the Independent Engineer, the Collateral Agent and the Disbursement Agent at least five (5) Business Days prior to any requested Funding Date. The Draw Request shall comply with Sections 5.7 and 5.29 or Sections 6.3 and 6.4, as the case may be, and shall be substantially in the form of Exhibit B hereto and in substance satisfactory to you, and shall specify (i) the requested Funding Date and (ii) the total amount of the requested Advance. Each Draw Request shall contain a representation and warranty by the Construction Manager and the SPV that all of the applicable conditions precedent to the Advance requested have been satisfied. You shall not be obligated to make an Advance with respect to any amount requested in a Draw Request which amount (1) has not been approved by the Independent Engineer or (2) when added to the aggregate principal amount of all prior Advances is in excess of the Commitment Amount. -2- Section 1.4 Conversion Date Advances. On the Conversion Date, Lime will deliver to you a Draw Request in compliance with Section 1.3, which Draw Request shall include all remaining unpaid Construction Costs (including, amounts to be deposited into the Construction Completion Account in respect of Punch List Items), the Required Reserve Payment and an amount equal to the result of (a) the sum of (i) the Commitment Amount, plus (ii) Twelve Million, Four Hundred Thousand Dollars ($12,400,000) plus (iii) Five Million, Three Hundred Thousand Dollars ($5,300,000) minus (b) the sum of (i) all Construction Costs plus Six Months' Debt Service. Any Required Reserve Payment shall be paid to the Disbursement Agent for deposit into the Debt Service Reserve in accordance with the Deposit and Disbursement Agreement. Section 1.5 Interest Rate and Maturity of Construction Notes. (a) Interest Rate. The Construction Notes will bear interest on the unpaid principal balance thereof at the rate of 10.13% per annum payable monthly. Overdue principal and (to the extent permitted by Applicable Law) any overdue installment of interest on the Construction Notes shall bear interest at a rate equal to the lesser of (x) the highest rate allowed by law or (y) 12.13% per annum. Interest on the Construction Notes shall be calculated on the basis of a 360- day year and actual days elapsed. (b) Maturity. The Construction Notes will mature on September 30, 1995 (the "Construction Note Maturity Date"). Section 1.6 Payments on the Construction Notes. (a) Interest Payments. Interest on the Construction Notes shall be payable monthly on each Debt Payment Date commencing on the Debt Payment Date next succeeding the Initial Funding Date until the principal amount thereof shall become due and payable. (b) Principal Payments. All or a portion of the outstanding principal amount of the Construction Notes shall be subject to prepayment only under the circumstances and upon the terms, set forth in Section 1.6(c) or Section 11 of this Agreement; otherwise the Construction Notes shall not be prepayable in whole or in part. The principal amount of the Construction Notes outstanding on the Construction Note Maturity Date shall be payable on such date with the proceeds of the Term Notes. (c) Prepayment. If the Construction Notes are outstanding on the Construction Option Amount Prepayment Date, the SPV may prepay the Construction Option Amount of the Construction Notes, or any portion thereof, on the Construction Option Amount Prepayment Date, together with interest on the Construction Option Amount, or such portion, accrued to the Construction Option Amount Prepayment Date. The SPV shall give written notice of any such prepayment to the Collateral Agent and to the Holders not less than ten (10) days nor more than thirty (30) days before the Construction Option Amount Prepayment Date, stating that the Construction Option Amount, or a specified portion thereof, will be prepaid on such date. Notice of such prepayment having been so given, the Construction Option Amount, or such specified portion thereof, accrued interest thereon (but not any Make-Whole Amount in respect thereof) and the Construction Exit Fee shall become due and payable on the Construction -3- Option Amount Prepayment Date. As used in this Section 1.6(c), the following terms have the following meanings: "Construction Exit Fee" shall mean, if the principal amount of Construction Notes to be prepaid on the Construction Option Amount Prepayment Date is $50,000,000, a fee equal to Seven Hundred Fifty Thousand Dollars ($750,000) and, if the principal amount of Construction Notes so to be prepaid is a lesser amount, a portion of such fee equal to (i) $750,000 multiplied by (ii) the quotient of (a) the principal amount so to be prepaid divided by (b) $50,000,000. "Construction Option Amount" means a principal amount of the Construction Notes equal to Fifty Million Dollars ($50,000,000). "Construction Option Amount Prepayment Date" means the date in the ninth calendar month after the month in which the Initial Funding Date falls that is the same numerical date of the month as the date of the Initial Funding Date. Section 1.7 Fees Payable to the Purchaser in Connection with Construction Notes. (a) Commitment Fees. Lime, on behalf of the SPV, has heretofore paid you $500,000 in respect of your consideration of the financing contemplated by this Agreement. On or prior to the Initial Funding Date, the SPV shall pay or cause to be paid to you an additional Seven Hundred Forty-Eight Thousand Dollars ($748,000) in consideration of your commitment hereunder. (b) Rate Delayed Delivery Fee. If all of the Construction Notes have not been advanced before the first day of the Rate Commitment Period with respect thereto, then, beginning on the last day of the first month following the commencement of such Rate Commitment Period and continuing on the last day of each month thereafter during such Rate Commitment Period, the SPV shall pay to you in respect of the amount of such unadvanced Construction Notes a fee (the "Rate Delayed Delivery Fee") equal to (i) the average daily balance of the unadvanced principal amount of the Construction Notes during such month, multiplied by (ii) a rate per annum equal to the Uncompensated Yield Rate with respect to the Construction Notes (determined as of the Rate Acceptance Date with respect to the Construction Notes), computed on the basis of a 360-day year and actual days elapsed, multiplied by (iii) the quotient of (x) the number of days in such month divided by (y) 360. As used herein, the "average daily balance" for any month shall mean the sum of the unadvanced balances on each and every day during such month divided by the number of such days. (c) Cancellation Fee. The SPV may at any time, upon thirty (30) days prior written notice to you, cancel all or any portion of the Unused Commitment, provided that, in the written opinion of the Independent Engineer (which shall be reasonably acceptable to you), the portion of the Unused Commitment remaining after such cancellation is sufficient to pay all Construction Costs as well as the initial funding of the Debt Service Reserve in an amount equal to One Year's Debt Service. Upon any such cancellation and, in any event, if the entire amount of the Commitment Amount has not been borrowed or cancelled prior to the earlier to occur of (i) the Conversion Date or (ii) the Construction -4- Note Maturity Date, the SPV shall immediately pay to you a cancellation fee (a "Cancellation Fee") as follows: (A) the amount of Construction Notes which has been so cancelled or not borrowed, multiplied by (B) (1) the Hedge Treasury Security Bid Price Increase with respect to the Construction Notes (determined as of the date of such notice, the Conversion Date or the Construction Note Maturity Date, as the case may be), divided by (2) the Hedge Treasury Security Bid Price. In no event shall any Cancellation Fee be less than zero ($0). The Cancellation Fee shall compensate you for lost opportunity costs and the costs of re-establishing any investment portfolio position altered at the time the relevant interest rate was accepted by the SPV. Such amount shall not be deemed to compensate you for any other fees incurred in connection with the preparation of, or the closing or funding of the transaction contemplated by, this Agreement. Upon payment of the Cancellation Fee, the Rate Delayed Delivery Fee shall cease to accrue with respect to that portion of the Unused Commitment so cancelled. (d) Servicing Fee. The SPV shall pay to you a construction servicing fee (the "Construction Servicing Fee") of Fifty Thousand Dollars ($50,000) per annum during the Construction Period, payable in equal installments semi-annually in arrears on each Debt Payment Date, commencing on the Debt Payment Date next succeeding the Initial Funding Date, with a final payment on the Conversion Date, provided that the Construction Servicing Fee due on the first Debt Payment Date and the Conversion Date shall be in amounts equal to a ratable portion of the Construction Servicing Fee then due for the period ending on such date and commencing on, in the case of the first Debt Payment Date, the Initial Funding Date and in the case of the Conversion Date, the Debt Payment Date immediately prior thereto. (e) Manner of Payment of Fees; Interest on Overdue fees. All fees required by this Section 1.7 shall be paid in the same manner as payments made in respect of the Construction Notes. Any amount of fees not paid on the date due shall thereafter bear interest at a rate per annum equal to the highest rate from time to time applicable to any overdue payment in respect of any of the Construction Notes. Section 1.8 Use of Proceeds of Construction Notes. The proceeds of the Construction Notes will be used to pay Construction Costs, Transaction Expenses, the Required Reserve Payment and the distribution (if any) provided for in the last sentence of Section 2.1(b) of the Deposit and Disbursement Agreement, and for no other purpose. The SPV shall not use the proceeds of the Construction Notes to pay any Contingency Costs unless such Contingency Costs are determined in writing by the Independent Engineer to be reasonably and necessarily incurred and you shall have concurred in such determination; provided, however, that the SPV may pay Contingency Costs that do not exceed $100,000 with respect to any individual instance and $750,000 in the aggregate (and enter into any change orders to effect the foregoing) without the prior consent of the Independent Engineer. On the Conversion Date, the amount of the Required Reserve Payment shall be deposited by the SPV to the Debt Service Reserve. -5- SECTION 2 EXCHANGE OF CONSTRUCTION NOTES FOR TERM NOTES. Section 2.1 Issuance of Term Notes. (a) Authorization of Term Notes. The SPV has authorized the issuance of up to an aggregate principal amount of Fifty Million Dollars ($50,000,000) of its Senior Secured Term Notes due August 1, 2010 (the "Term Notes"). Each Term Note will be to the effect and substantially in the form of Exhibit C hereto. (b) Delivery and Acceptance of Term Notes; Payment of Construction Notes. Subject to the terms and conditions of this Agreement, the SPV hereby agrees to execute and deliver to you, and you hereby agree to accept from the SPV, as payment in full of the outstanding principal amount of the Construction Notes, a principal amount of Term Notes equal to the aggregate principal amount of the Construction Notes outstanding on the Conversion Date after giving effect to all Advances required by Section 1 of this Agreement, including, without limitation, the Advances contemplated by Section 1.4. (c) Conversion Date Closing. The closing of the SPV's issuance of the Term Notes (the "Term Note Closing") shall be held on the Conversion Date at 10 a.m., Hartford, Connecticut time, at the offices of Hebb & Gitlin, One State Street, Hartford, Connecticut. At such closing, a single Term Note will be delivered to you, which Term Note will be (i) dated the Conversion Date, (ii) payable as indicated on Annex 1 hereto, and (iii) in a principal amount equal to the aggregate principal amount of the Construction Notes outstanding on the Conversion Date after giving effect to all Advances required by Section 1 of this Agreement, including, without limitation, the Advances contemplated by Section 1.4. Section 2.2 Payments on the Term Notes. (a) Principal and Interest Payments. In addition to making the payment required by Section 2.2(b) and paying the entire outstanding principal amount and interest due on the Term Notes on the Term Note Maturity Date, the SPV shall pay, and there shall become due and payable on each Debt Payment Date commencing on the first Debt Payment Date next succeeding the Conversion Date, an installment of principal together with interest thereon in the amount set forth on Annex 2 hereto opposite such date. The Term Notes will bear interest at the rate of 10.13% per annum calculated on the basis of a 360-day year of twelve 30-day months. Without limitation of the foregoing, all of the principal of the Term Notes remaining outstanding on August 1, 2010 (if any) together with interest accrued thereon, shall become due and payable on August 1, 2010. (b) Prepayment Upon Total Loss. Upon the occurrence of a Total Loss, the entire principal amount of the Term Notes shall become immediately due and payable, without Make-Whole Amount, and the SPV shall take the actions set forth in Section 11.3. -6- Section 2.3 Optional Prepayments of Term Notes. (a) Prepayment with Make-Whole Amount. After the Conversion Date, the SPV may prepay the entire principal amount of the Term Notes at any time together with (i) an amount equal to the Make-Whole Amount at such time in respect of the principal amount of the Term Notes being so prepaid, (ii) interest on such principal amount accrued to the prepayment date, and (iii) all other amounts due and owing to you and the Collateral Agent hereunder or under any other Transaction Document. (b) Prepayment Without Make-Whole Amount. If the SPV has not exercised the prepayment rights with respect to the Construction Notes set forth in Section 1.6(c) before the Conversion Date (and as a result there are no Construction Notes outstanding on the Construction Option Amount Prepayment Date), the SPV may prepay the Term Option Amount of the Term Notes, or any portion thereof, on the Term Option Amount Prepayment Date, together with interest on the Term Option Amount, or such portion, accrued to the Term Option Amount Prepayment Date. The SPV shall give notice of any such prepayment to the Collateral Agent and to the Holders not less than ten (10) days nor more than thirty (30) days before the Term Option Amount Prepayment Date, stating that the Term Option Amount, or a specified portion thereof, will be prepaid on such date. Notice of such prepayment having been so given, the Term Option Amount, or such specified portion thereof, accrued interest thereon (but not any Make-Whole Amount in respect thereof) and the Term Exit Fee shall become due and payable on the Term Option Amount Prepayment Date. As used in this Section 2.3(b), the following terms have the following meanings: "Term Exit Fee" means, if the principal amount of Term Notes to be prepaid on the Term Option Amount Prepayment Date is the $50,000,000, a fee equal to Seven Hundred Fifty Thousand Dollars ($750,000) and, if the principal amount of Term Notes so to be prepaid is a lesser amount, a portion of such fee equal to (i) $750,000 multiplied by (ii) the quotient of (a) the principal amount so to be prepaid divided by (b) $50,000,000. "Term Option Amount" means a principal amount of the Term Notes equal to Fifty Million Dollars ($50,000,000). "Term Option Amount Prepayment Date" means May 1, 1995. Section 2.4 Notice of Optional Prepayment. The SPV shall give written notice of any optional prepayment of Term Notes pursuant to Section 2.3(a) to the Collateral Agent and to the Holders of Term Notes not less than ten (10) days nor more than thirty (30) days before the date fixed for prepayment, specifying (a) such date, and -7- (b) that such prepayment is being made pursuant to Section 2.3(a) of this Agreement. Notice of prepayment having been so given, the aggregate outstanding principal amount of the Term Notes together with the Make-Whole Amount (as calculated by you absent manifest error), if any, and accrued interest thereon shall become due and payable on the specified prepayment date. Section 2.5 Application of Prepayments. Each prepayment made pursuant to Section 1.6(c) or Section 2.3 shall reduce pro rata the amounts of principal becoming due on each Debt Payment Date subsequent to the date of such prepayment, such pro rata reduction to be determined by multiplying the amount of each required payment of principal set forth on Annex 2 hereto by the quotient of the principal amount of Notes so prepaid divided by the principal amount of Notes outstanding immediately prior to such prepayment. Immediately after any such prepayment, Annex 2 hereto shall be deemed to have been amended to (i) reduce subsequent required payments of principal as aforesaid, and (ii) reduce the amount of interest payable on each subsequent Debt Payment Date to an amount equal to the amount of accrued and unpaid interest on the outstanding principal amount of the Notes to such date (assuming for such purpose that all payments will be made on the date due). Section 2.6 Term Servicing Fee. The SPV shall pay to you a term servicing fee of Twenty-Five Thousand Dollars ($25,000) per annum, payable in equal installments semi-annually in arrears on each Debt Payment Date, commencing on the Debt Payment Date next succeeding the Conversion Date, with a final payment on the Term Note Maturity Date, provided that the amount of such fee due on the first Debt Payment Date after the Conversion Date and the amount due on the Term Note Maturity Date shall be in amounts equal to a ratable portion of such fee then due for the period ending on such date and commencing on, in the case of such first Debt Payment Date after the Conversion Date, the Conversion Date, and in the case of the Term Note Maturity Date, the Debt Payment Date immediately prior thereto. Section 2.7 Surrender of Term Notes on Prepayment. If any Term Note is prepaid, such Term Note shall be surrendered to the SPV for cancellation and shall not be reissued, and no Term Note shall be issued in lieu of the prepaid principal amount of any Term Note. Section 2.8 No Other Prepayments. Except as provided in this Section 2, the SPV may not make any prepayment (whether directly or indirectly, or by purchase or other acquisition) in respect of the Term Notes. SECTION 3 WARRANTIES AND REPRESENTATIONS OF PURCHASER. You represent and warrant to the SPV as follows: Section 3.1 Purchase for Investment. That you are purchasing the Notes for your own account for investment and with no present intention of distributing or reselling the Notes or any part thereof, but without prejudice to your right at all times to -8- (a) sell or otherwise dispose of all or any part of the Notes under a registration statement filed under the Securities Act, or in a transaction exempt from the registration requirements of such Act, and (b) have control over the disposition of all of your assets to the fullest extent required by any Applicable Law. It is understood that, in making the representations set forth in Section 4.2 and Section 4.27 hereof, the SPV is relying, to the extent applicable, upon your representation as aforesaid. Section 3.2 ERISA. With respect to each source of funds to be used by you to purchase the Construction Notes (the "Source"), the following statement is accurate as of the Initial Funding Date: The Source is assets none of which constitutes assets of an "employee benefit plan" (as defined in Section 3 of ERISA) maintained by the SPV, Lime or any ERISA Affiliate or of a "plan" (as defined in Section 4975(e)(1) of the Code) maintained by the SPV or Lime or any ERISA Affiliate. In making this representation, you are relying upon the list of employee benefit plans, plans and trusts maintained by the SPV, Lime and their ERISA Affiliates (as set forth on Part 4.21(f) on Annex 3 attached hereto) which have contracts with you. As used herein, "plan" and "employee benefit plan" shall have the meaning set forth in Title I, section 3(3) of ERISA. SECTION 4 WARRANTIES AND REPRESENTATIONS OF THE SPV. To induce you to enter into this Agreement and to purchase the Construction Notes, the SPV warrants and represents as follows: Section 4.1 Organization and Existence. The SPV is a limited partnership duly organized, validly existing and in good standing under the laws of the state of Delaware, and has all requisite power and authority to enter into and perform its obligations under this Agreement, to own its Property, and to conduct its business in the manner and in the places in which it is presently proposed to be conducted. Section 4.2 Due Authorization; No Conflict. Each of this Agreement and the other Transaction Documents to which the SPV is a party has been duly authorized by all necessary action on its part, has been duly executed and delivered by the SPV, and its execution, delivery and performance thereof do not (i) violate the Partnership Agreement, (ii) contravene any Applicable Law binding on it or affecting the Project, (iii) contravene or result in any breach of, or constitute a default under, any indenture, mortgage, loan agreement, deed of trust, lease or other agreement or instrument to which it is a party or by which it is bound or (iv) result in, or require, the creation or imposition of any Lien (other than Permitted Liens) upon or with respect to any of the Property now owned or hereafter acquired by it. Section 4.3 Enforceability. Each of this Agreement and the other Transaction Documents to which the SPV is a party constitutes its legal, valid and binding obligation, -9- enforceable against it in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting the enforcement of creditors' rights generally and by general equitable principles. Section 4.4 Litigation. There is no action, suit, investigation, proceeding or arbitration pending or to the SPV's knowledge threatened against the SPV, any of its Properties, the Project, the Site or the Black River Common Facilities; and no such proceeding is pending or threatened against any of the foregoing that questions the validity, enforceability or performance of this Agreement, the Notes or any of the other Transaction Documents. Except as set forth on Part 4.4 of Annex 3 attached hereto, there is no action, suit, proceeding or arbitration pending or, to the best knowledge of the SPV, threatened against the SPV or Lime that (if and when decided) could reasonably be expected to have a material adverse effect on their respective business conditions (financial or otherwise) or operations, or the fulfillment of the Projections, or that could reasonably be expected to materially and adversely affect the ability of either of them to perform its obligations under any of the Transaction Documents, or the maintenance of the Project, the Site, the Black River Common Facilities, or the installation, construction, testing, ownership, leasing, use, possession, operation and maintenance of the Project or any part thereof, or the consummation of the transactions contemplated by this Agreement, the Notes or any of the other Transaction Documents. Section 4.5 Governmental Approvals. All Governmental Approvals required in connection with the execution and delivery of this Agreement and each other Transaction Document to which the SPV is a party, and all material Governmental Approvals required in connection with the construction of the Project or any part thereof as contemplated by the Transaction Documents, have been obtained and are completely and accurately listed in Annex 4 hereto, together with the name in which each such Governmental Approval must be issued. All such Governmental Approvals have been given, obtained, made, filed or recorded, as the case may be, and each is subsisting and in full force and effect and contains no condition required to be met on the date hereof which has not been met, and no such Governmental Approval is subject to any pending or, to the SPV's knowledge, threatened, suit, action, inquiry, investigation, proceeding or appeal (administrative, judicial or otherwise). The time for appeal with respect to each such Governmental Approval has expired (or if an appeal has been taken the same shall have been dismissed or otherwise been finally determined to be unsuccessful). Such Governmental Approvals are free from conditions or requirements which could reasonably be expected to affect materially and adversely (i) the performance by the SPV and Lime under the Transaction Documents, (ii) the construction of the Project and the Common Facilities or any part thereof as contemplated by the Transaction Documents, or (iii) the valid transfer, grant or assignment (as the case may be) of the rights, title, interests and estate to be transferred, granted and assigned pursuant to the Transaction Documents. The statements made and information provided by or on behalf of the SPV or Lime, as the case may be, in connection with each such Governmental Approval were true, complete and correct in all material respects when made. Annex 4 hereto lists all other material Governmental Approvals which will be necessary to obtain prior to the commencement of commercial operation of the Project (and the SPV has no reason to believe that such Governmental Approvals will not be obtained prior to the Conversion Date). To the SPV's knowledge, no Governmental Approvals are required to enable you, the Collateral Agent and the Disbursement Agent to participate in the transactions contemplated by this Agreement and the other Transaction Documents, prior to acquiring the Project through foreclosure or conveyance or transfer in lieu of foreclosure. All Governmental -10- Approvals with respect to which a public hearing was necessary have been duly issued, and any appeal period with respect to such issuance has expired. Section 4.6 Tax Returns. Each of the Partners and the SPV has filed all Federal, state and local income, franchise and other tax returns, if any, required to be filed by it on or prior to the date hereof, and has paid any Taxes shown to be due and payable on such returns; Lime has paid (or caused to be paid) all other Taxes in respect of the Project and the Site to the extent the same have become due and payable and before they have become delinquent. Section 4.7 Compliance with Law. Each of the Partners and the SPV is in compliance in all material respects with all Applicable Laws. Section 4.8 Title to the Project, etc. (a) The descriptions of the Project Land set forth in the Ground Lease and the description of the Easement Parcel as set forth in the Easement Agreement are true, correct and sufficiently complete to identify such Property and to convey and encumber the same as contemplated by this Agreement and the other Transaction Documents. (b) The Site, the Common Facilities and the Project conform in all material respects to all covenants, conditions, restrictions, reservations, and all zoning, environmental, subdivision control, land use and other applicable Federal, state and local laws, rules, regulations and ordinances, affecting any of the foregoing. (c) The SPV has a good, valid and marketable (x) leasehold estate in and to the Project Land pursuant to the Ground Lease, (y) easement and use rights in and to the Easement Parcel and the Black River Common Facilities in accordance with the terms of the Easement Agreement, and (z) fee title in and to the Project, free and clear of all Liens (other than Permitted Encumbrances), and such Permitted Encumbrances do not impair or interfere with (A) the marketability of the Project, the Project Land, the SPV's rights in and to the Easement Parcel or the leasehold estate created under the Ground Lease, or (B) the maintenance of the Project, the Site or the Black River Common Facilities or the construction, testing, ownership, leasing, use, possession, operation or maintenance of the Project, the Site or the Black River Common Facilities. (d) The SPV Collateral is not subject to any Lien, except for Permitted Encumbrances and Liens contemplated by the Transaction Documents. Section 4.9 No Events of Default. Neither the SPV nor Lime is in default with respect to any of its obligations hereunder or under any Transaction Document. No condition exists that would, upon consummation of the transactions contemplated hereby and by the other Transaction Documents, constitute a Default or an Event of Default. Lime is not in default under any of the Existing Creditors Loan Documents. Section 4.10 Full Disclosure. Neither this Agreement or any other Transaction Document, nor any certificate, document, or financial statement (other than the Projections) or other written information furnished to you by Lime, the SPV or any Partner in connection with the transactions contemplated hereby, contains any untrue statement of a material fact or omits to -11- state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading or that could materially and adversely affect Lime, the SPV, you, the Project, the Common Facilities or the Site. All written factual information delivered by Lime or the SPV or any Partner to the Independent Engineer was true, accurate and complete in all material respects at the time supplied and did not fail to state any material fact necessary to make the information supplied, in light of the circumstances under which it was made, not misleading. The Projections have been prepared in good faith, to the best knowledge of the SPV, by Continental Bank Lease Capital Group, and approved in good faith by each of the SPV and Lime, and are based upon (i) assumptions that the SPV believes are reasonable and (ii) the best information available from the management of Lime at the time of the preparation of such Projections. The SPV has no reason to believe that the Projections are false or misleading in any material respect. Section 4.11 Financial Statements of the Corporation and Lime. The copies of the financial statements of the Corporation and Lime delivered to you pursuant to Section 5.27 are complete and correct in all material respects and fairly present the Corporation's and Lime's financial position as of the dates thereof, and the results of their respective operations for the periods therein indicated, all in conformity with GAAP consistently applied (except as stated therein or in the notes thereto). Section 4.12 Absence of Material Contingencies. Neither the SPV nor any Partner has any contingent liability other than those created pursuant to the Transaction Documents. Section 4.13 Material Patents and Licenses. The SPV owns, possesses or is duly licensed for a period ending after the Term Note Maturity Date in respect of all patents, trade secrets, processes, trademarks, service marks, trade names, copyrights and licenses and rights as are necessary for the commercial operation of the Project, without any conflict with the rights of other Persons and without any obligation to pay royalties or license fees therefor. Section 4.14 Taxes. None of the acquisition, installation, construction, maintenance, financing, use, conveyance or operation of the Project, the Project Land, the Black River Common Facilities, or the execution, recordation or filing of any Transaction Document by the respective parties thereto, or the consummation of any of the transactions contemplated hereby or thereby, will result in any tax, levy, impost, duty, charge or withholding imposed as of the Initial Funding Date or Conversion Date, with respect to the respective transactions to be consummated on such dates, by the United States or the Commonwealth of Kentucky or any other taxing Governmental Authority or political subdivision thereof, except for: (i) transfer taxes and registration, recordation and other miscellaneous fees payable in connection with the recordation or filing of the Transaction Documents described on Part 4.14 of Annex 3 attached hereto to be so recorded or filed, all of which taxes and fees shall have been paid in full when due on or prior to the Initial Funding Date or the Conversion Date, as the case may be, pursuant to Section 15 hereof; (ii) Kentucky real and personal property taxes on its Property, including without limitation, the Project; and (iii) franchise and other similar taxes for which the SPV and Lime are responsible. Section 4.15 Utilities. All electrical, telephone, water, sanitary, septic or water treatment system and other utility services necessary for the construction, use, operation and maintenance of the Project, the Site and the Black River Common Facilities are available to the Project, the Site -12- and the Black River Common Facilities pursuant to the Ground Lease, the MCFA, the Easement Agreement or other public or private easement or use rights. Section 4.16 Easements, Servitudes, Rights of Way, etc. All roads, easements, servitudes, rights of way and other rights of ingress and egress as are necessary for the installation, construction, completion, testing, operation, maintenance and use of the Project, the Site and the Black River Common Facilities have been obtained pursuant to the Ground Lease, the MCFA, the Easement Agreement or other public or private easement or use rights and are not adversely affected by any of the Permitted Encumbrances in any material respect. Section 4.17 Status of Project Contracts. The Project Contracts are in full force and effect, in each case as required for the installation, construction, completion, testing, operation, maintenance and use of the Project, and the SPV or Lime, on the SPV's behalf, has complied with all agreements and conditions, if any, to be performed or satisfied by it or Lime thereunder on or before the date hereof in all material respects. To the best of the SPV's knowledge, after due inquiry, there is no default on the part of any party under any Project Contract and no default has occurred and is continuing which has not been cured or been waived by the relevant party to such documents. To the SPV's knowledge, each of Lime and the SPV will be able to comply with all of the terms and conditions of the Project Contracts to which such Person is a party. Other than the Transaction Documents to which the SPV is a party, the SPV is not a party to, nor is any Property of the SPV bound by, any other material agreement. Section 4.18 Collateral Documents. The SPV Security Agreement and the Project Mortgage are effective to create a legal, valid and enforceable Lien upon the SPV Collateral in favor of the Collateral Agent, and upon proper recording or filing in the locations set forth in Part 4.18 of Annex 3 attached hereto (or, in the case of collateral a Lien on which must be perfected by possession, delivery of such collateral to the Collateral Agent), the Collateral Agent will have a first-priority perfected Lien in the SPV Collateral. No further action is required to establish a valid and enforceable, first-priority Lien (subject to Permitted Liens) in and to the SPV Collateral in favor of the Collateral Agent. Section 4.19 Substantial Completion Date. The SPV has no reason to believe that the Substantial Completion Date will not occur on or before June 30, 1995. Section 4.20 Independent Engineer's Certificate. To the best of the SPV's knowledge, the statements set forth in the Independent Engineer's Certificate described in Section 5.7 are correct in all material respects and the SPV is not aware of any fact which could reasonably be expected to make such statements materially untrue, incorrect or incomplete. Section 4.21 ERISA. a. Prohibited Transactions. Neither the execution of any Transaction Document nor the purchase of the Construction Notes by you will constitute a "prohibited transaction" (as defined in section 406 of ERISA or section 4975 of the Code). -13- b. Compliance with ERISA. Each of the Corporation, Lime and the SPV are in compliance with ERISA, except for such failures to comply that, individually or in the aggregate, could not reasonably be expected to have a material adverse effect on the business, prospects, profits, Properties or condition (financial or otherwise) of such Persons or on the Project. c. Funding Status. No "accumulated funding deficiency" (as defined in section 302 of ERISA and section 412 of the Code) exists with respect to any Pension Plans of the Corporation, Lime or the SPV. No ERISA Affiliate has an accumulated funding deficiency that could reasonably be expected to have a material adverse effect on the business, prospects, profits, Properties or condition (financial or otherwise) of such Persons or on the Project. d. PBGC. No liability to the PBGC has been or is expected to be incurred by any of the Corporation, Lime or the SPV or any ERISA Affiliate of any such Persons with respect to any Pension Plan that, individually or in the aggregate, could reasonably be expected to have a material adverse effect on the business, prospects, profits, Properties or condition (financial or otherwise) of such Persons or on the Project. No circumstance exists that constitutes grounds under section 4042 of ERISA entitling the PBGC to institute proceedings to terminate, or appoint a trustee to administer, any Pension Plan or trust created thereunder, nor has the PBGC instituted any such proceeding. e. Multiemployer Plans. Neither the Corporation, Lime or the SPV, nor any ERISA Affiliate has incurred or presently expects to incur any withdrawal liability under Title IV of ERISA with respect to any Multiemployer Plan that could reasonably be expected to have a material adverse effect on the business, prospects, profits, Properties or condition (financial or otherwise) of such Persons or on the Project. There have been no "reportable events" (as defined in section 4043 of ERISA) with respect to any Multiemployer Plan that could result in the termination of such Multiemployer Plan and give rise to a liability of the Corporation, Lime or the SPV or any ERISA Affiliate in respect thereof that could reasonably be expected to have a material adverse effect on the business, prospects, profits, Properties or condition (financial or otherwise) of such Persons or on the Project. f. Existing Pension Plans. Part 4.21(f) of Annex 3 hereto sets forth a complete and accurate listing of all ERISA Affiliates, and all employee benefit plans, plans and trusts maintained by any one or more of them, indicating in each case whether any of such employee benefit plans, plans or trusts have contracts with Prudential. Section 4.22 Environmental Matters. Each of the SPV and Lime has at all times complied in all material respects with all Environmental Laws and the requirements of any permits issued under such Environmental Laws with respect to the Site and the Project. To the SPV's knowledge, there are no circumstances that may hinder, delay, interfere with or prevent the installation, ownership, construction, testing, maintenance and operation of the Project or the use of the Site, as contemplated by the Transaction Documents, in full compliance with applicable Environmental Laws. All material Governmental Approvals required under Environmental Laws to install, construct, test, maintain and operate the Project are completely and accurately listed -14- in Annex 4 hereto, together with the name in which such Governmental Approval must be issued. Except as disclosed on Part 4.22 of Annex 3 hereto, there are no past, pending or, to the SPV's knowledge, threatened Environmental Claims against Lime, the SPV, the Project, the Site or any of the Black River Common Facilities. Since the Site has been owned by Lime and, to the SPV's knowledge, before the Site was owned by Lime, Hazardous Materials have not been generated, used, treated, located or stored on, or transported to or from, the Site, the Black River Common Facilities or the Project, and the SPV has not used, and does not intend to use, nor permit, any portion of the Site, the Black River Common Facilities or the Project for such purposes other than, in the case of any of the foregoing, (i) as necessary to operate the Project and (ii) in compliance, in all material respects, with all applicable Environmental Laws. Since the Site has been owned by Lime and, to the SPV's knowledge, before the Site was owned by Lime, Hazardous Materials have not at any time been released, deposited or disposed of on or from the Site, the Black River Common Facilities or the Project in any way contrary to that which is allowed under applicable Environmental Laws. Except as disclosed on Part 4.22 of Annex 3 hereto, there are no present or, to the best knowledge of the SPV, after due inquiry, past actions, activities, circumstances, conditions, events or incidents, including the release, emission, discharge, presence or disposal of Hazardous Materials, that could (i) form the basis of an Environmental Claim against Lime or the SPV, the Project, the Site or the Black River Common Facilities, that individually or in the aggregate could have a material adverse effect on the business, prospects, profits, Properties or condition (financial or otherwise) of Lime, the SPV or the Project, (ii) cause the Site, the Black River Common Facilities or the Project to be subject to any restrictions on its ownership, occupancy, use or transferability under any Environmental Laws, (iii) interfere with the continued use and occupancy of the Site or the Black River Common Facilities or the installation, construction, testing, maintenance or operation of the Project, or (iv) prevent performance under the Transaction Documents. Except as set forth in Part 4.22 of Annex 3 hereto, there are not now and never have been any underground storage tanks located on the Site. Polychlorinated biphenyls ("PCBs") do not contaminate any part of the Site, and no PCBs are used, stored or located at the Site, the Black River Common Facilities or the Project, except in material compliance with Applicable Law. Section 4.23 Federal Power Regulation Act. The SPV is not subject to regulation under the Federal Power Act, as amended. Section 4.24 Holding Company Act. The SPV is neither a "public utility company" nor a company all of whose equity interest is owned by one or more public utility companies, all within the meaning of Rule 7(d)(1)(B) promulgated by the SEC under the Holding Company Act. Section 4.25 Investment Company Act. The SPV is not an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act. Section 4.26 Margin Regulations. None of the transactions contemplated by this Agreement or any other Transaction Document will violate or result in a violation of Section 7 of the Securities Exchange Act of 1934, as amended, or any regulations issued pursuant thereto, including, without limitation, Regulations G, T, U and X of the Board of Governors of the Federal Reserve System, 11 C.F.R., Chapter 11, as amended and none of the Corporation, Lime or the SPV is engaged in the business of extending credit for the purpose of purchasing or carrying margin stock as defined in Regulation G. -15- Section 4.27 Securities Act. Neither the SPV or Lime nor any Person authorized to act on behalf of any of such Persons (each, a "Lime Offeror"), has offered directly or indirectly, any "security" within the meaning of the Securities Act, with respect to the Project, the Construction Notes or the Term Notes, as the case may be, for issue or sale to, or solicited offers to acquire any thereof from, or otherwise approached or negotiated with any Person other than an aggregate, for all the Lime Offerors, of thirty (30) Accredited Investors (in addition to you), nor has any Lime Offeror conducted any offering or solicitation which, for purposes of the Securities Act and the rules and regulations of the SEC promulgated thereunder, would be deemed to be part of the offering or solicitation described in the preceding sentence in violation of Section 5 of the Securities Act, and no Lime Offeror has taken or, on the Conversion Date, will have taken, any action which would subject the issuance or sale of any such security to the registration requirements of said Section 5. Section 4.28 Other Business. The SPV has not engaged in any business transaction unrelated to the development, construction, ownership, operation, maintenance, and financing of the Project; and the SPV is not a shareholder in any corporation or a partner, party or participant in any partnership, joint venture or other similar commercial venture. Section 4.29 Uncontrollable Force. No Uncontrollable Force which would allow any party to any Transaction Document to avoid all or any part of its obligations under such Transaction Document has occurred or, to the best of its knowledge, after due inquiry, is threatened. Section 4.30 Insurance; Statements to Insurers. All insurance coverage required by Section 12 hereof is in full force and effect. All representations and warranties made by the SPV, Lime or their respective authorized representatives to any insurer in connection with any insurance required to be maintained by the SPV or Lime under any Transaction Document were true, correct and complete in all material respects when made. Section 4.31 Financial Broker; Fees. Neither the SPV nor Lime has retained any broker, finder or financial advisor, and neither of them is liable for payment of any fee to any Person for brokerage or financial advisory services rendered on its behalf, in connection with any of the transactions contemplated by this Agreement and the other Transaction Documents, except for the relationship between Lime and Continental Bank Lease Capital Group. Section 4.32 The Project. The Project has been, and is being, properly constructed on the Site in good and workmanlike manner and, in all material respects, in accordance with the Plans and Specifications and Applicable Law and in a manner that will allow it to be operated and maintained in accordance with the Transaction Documents. The SPV has no reason to believe that the Project does not or will not have the capacity and functional ability to perform, on a continuous basis, the functions and the capacity for which it was designed. The SPV is not aware of any event or condition existing which presently adversely affects or is likely in the future to adversely affect, such design, construction, equipping, installation, operation or maintenance. Section 4.33 Restrictive Agreements. The SPV is not a party to any document, instrument, security, evidence of Debt or any other agreement, document or instrument of any kind, other than the Transaction Documents, which restricts the ability of the SPV to incur indebtedness or enter into leases with respect to any Property or engage in sale and leaseback -16- transactions or dispose of assets, or which contains terms and provisions which subject after-acquired Property of the SPV to any Lien. Section 4.34 Sufficiency of Support Agreements. The rights to be granted to the SPV pursuant to the Ground Lease, the Easement Agreement, the MCFA and the other Transaction Documents are sufficient in the aggregate to enable the SPV to occupy, use, possess, own, operate and maintain on a commercially reasonable and economic basis (at Total Net Capability) and possess the Site, the Project and the Black River Common Facilities until the Term Note Maturity Date. The rights of the SPV under the Ground Lease, the MCFA, and the Easement Agreement, which are the only real property and other rights necessary for the construction, operation, maintenance, repair, testing, use, possession and ownership of the Project, have been validly obtained and are in full force and effect. The SPV does not have any reason to believe that there will be contractual or, based upon Applicable Law, other legal rights required for such occupancy, use, possession, ownership, operation and maintenance of the Site, the Project and the Black River Common Facilities, or that there will be other services or materials required for such operation, maintenance, use, occupancy and possession of the Site, the Project and the Black River Common Facilities, other than those provided for under the Ground Lease, the Easement Agreement and the MCFA. Section 4.35 Location of Chief Executive Office. The chief executive office and chief place of business of the SPV is located on P.O. Box 137, Highway 8 - Carntown, Butler, Kentucky 41006; and the office where the SPV keeps its records concerning its accounts relating to the Project is located at (i) McDuffie Island Ezra Trice Boulevard, Mobile, Alabama 36602 and (ii) 3600 One Oliver Place, Pittsburgh, Pennsylvania 15222, and no other place. Section 4.36 Ownership. DBR General Inc. is the sole general partner, and Dravo Black River Limited Inc. is the sole limited partner of the SPV. One hundred percent (100%) of the capital stock of Dravo Black River Limited Inc. is owned by Lime. One hundred percent (100%) of the Class A Common Stock of DBR General Inc. is owned by Lime. Section 4.37 Labor Matters. The SPV is not a signatory to any labor or collective bargaining agreement. Neither the SPV nor Lime has been the subject of a labor stoppage or strike during the period from July 1, 1989 through the date hereof. SECTION 5 CONDITIONS TO FUNDING. Your obligations to make an Advance on the Initial Funding Date shall be subject to satisfaction of all of the following conditions precedent: Section 5.1 Initial Funding Date. The Initial Funding shall occur no later than September 30, 1994. Section 5.2 Equity Contribution. Lime, through the Partners, shall have made the Investment. Section 5.3 Opinions of Counsel. You shall have received from (a) Hebb & Gitlin, your special counsel, -17- (b) Wyatt, Tarrant & Combs, your Kentucky counsel, (c) Buchanan Ingersoll, counsel to the SPV, the Partners and to Lime, (d) Richards, Layton & Finger, counsel to the Collateral Agent, (e) internal counsel to OPCO, and (f) internal counsel to KVS, closing opinions, addressed to you and dated the Initial Funding Date, in form and substance satisfactory to you. In addition, you shall have received closing opinions from counsel to such other Project participants and as to such matters as you shall reasonably request. Section 5.4 Warranties and Representations True; No Construction Defaults. The warranties and representations contained in Section 4 hereof, and all warranties and representations made by each other party to any Transaction Document (other than you) in any of the Transaction Documents or in any certificate delivered pursuant to Section 5.5 of this Agreement, shall be true and correct on the Initial Funding Date with the same effect as though made on and as of that date, and no Default or Event of Default shall exist. Section 5.5 Closing Certificates. You shall have received: (a) a certificate of the SPV, dated the Initial Funding Date, in form and substance satisfactory to you, certifying that all actions required to be taken by the SPV prior to the initial purchase of the Construction Notes have been duly taken, that the representations and warranties contained in Section 4 hereof, and all other representations made by the SPV in any other Transaction Document, are true and correct on and as of the Initial Funding Date, and that no Default or Event of Default exists; (b) certificates dated the Initial Funding Date and signed by a Senior Officer of each other party to any Financing Document (other than you), in form and substance satisfactory to you, certifying that all representations and warranties made by such Person in any Transaction Document or in any certificate delivered pursuant thereto, are true and correct on and as of the Initial Funding Date; (c) a certificate of the SPV dated the Initial Funding Date in form and substance satisfactory to you, with respect to the Partnership Agreement and related matters; and (d) a certificate dated the Initial Funding Date and signed by the Secretary or an Assistant Secretary of Lime and each of the Partners, in form and substance satisfactory to you, with respect to the certificate of incorporation of Lime , each Partner and their respective by-laws, resolutions and other corporate matters. Section 5.6 Legality; Litigation. The issuance of the Construction Notes and the Class B Common Stock, and consummation of the transactions contemplated by the Transaction -18- Documents, shall not violate any Applicable Law; and no suit or similar proceeding shall have been initiated challenging the legality or validity of the Construction Notes, the Class B Common Stock or any other Transaction Document or any Governmental Approval. The Construction Notes shall qualify as a legal investment for insurance companies under applicable insurance law (without regard to any "basket" or "leeway" provisions) and you shall have received such evidence as you may reasonably request to establish compliance with this condition. No litigation, governmental investigation or other proceeding shall be pending or threatened by any Person which, if adversely determined, could prevent or make unlawful or impose any material adverse condition upon the Project (or any part thereof) or the OPCO Agreement or the construction, start-up or operation of the Project (or any part thereof) or the SPV's ownership thereof or the Collateral Agent's Liens on the collateral under the SPV Security Agreement and the other Transaction Documents. Section 5.7 Initial Funding Draw Request. The Construction Manager shall have submitted a Draw Request signed by the SPV to you and the Independent Engineer, not less than five (5) Business Days prior to the Initial Funding Date, together with a construction status report prepared by the Construction Manager detailing the progress of the construction of the Project and containing a statement to the effect that, after giving effect to the requested funding, the Project can be completed in accordance with the Construction Schedule and at a cost within the Construction Budget; and, not less than two (2) Business Days prior to the Initial Funding Date, the Independent Engineer shall have delivered to you a certificate (the "Independent Engineer's Certificate") in form and substance satisfactory to you, stating that the Independent Engineer (i) concurs with such construction status report and (ii) has approved such Draw Request in all respects. Section 5.8 SPV Security Agreement. (a) SPV Security Agreement. The SPV and the Collateral Agent shall have entered into the SPV Security Agreement which shall encumber, among other things, all personal property of the SPV. The SPV Security Agreement shall be in full force and effect, the SPV shall be in full compliance with all of its obligations thereunder, and the Liens of the Collateral Agent created by the SPV Security Agreement and the other Transaction Documents shall constitute valid first-priority Liens upon the SPV Collateral subject only to Permitted Liens. (b) Financing Statements and Other Filings. All filings of Uniform Commercial Code financing statements and all other filings and actions necessary for the consummation of the transactions contemplated by this Agreement and the Transaction Documents and to establish, perfect, preserve and protect the security interests and Liens created and granted under, or assigned by, the SPV Security Agreement and the other Transaction Documents shall have been filed or taken, and you shall have received evidence satisfactory to you of the proper recording of such financing statements and the first priority perfected status of such security interests and Liens, subject only to Permitted Liens. All recording, subscription and other similar fees, and all taxes and other expenses related to such filings, registrations and recordings shall have been paid in full by the SPV. -19- (c) Taxes. All Taxes, if any, payable in connection with the execution, delivery, recording or filing of any Transaction Document or in connection with the transactions to be consummated on the Initial Funding Date, shall have been paid in full. Section (a) Construction Contracts. Lime shall have executed and delivered the Construction Contracts, and Lime's interest in the Construction Contracts and all other contracts and agreements relating to the construction of the Project shall have been absolutely assigned to the SPV. Such assignments shall have been (i) effected pursuant to one or more assignments in form and substance acceptable to you, and (ii) in the case of the contractors listed on Part 5.9(b) of Annex 3, consented to by such contractors. The Construction Contracts shall be in full force and effect and each party thereto shall be in full compliance with its respective obligations thereunder. (b) Construction Management Agreement. The SPV and Lime shall have executed and delivered the Construction Management Agreement, the Construction Management Agreement shall be satisfactory to you in all respects, the Construction Management Agreement shall be in full force and effect and each party thereto shall be in full compliance with its obligations thereunder. Section 5.10 OPCO Agreement. The rights and interests of Lime under the OPCO Agreement shall have been absolutely assigned to the SPV pursuant to documentation satisfactory to you in all respects, and the rights and interests of the SPV therein shall have been assigned to the Collateral Agent pursuant to the SPV Security Agreement. On the Initial Closing Date, (i) the OPCO Agreement (as so assigned) shall be in full force and effect, (ii) each party thereto shall be in full compliance with its obligations thereunder, (iii) OPCO, Lime and the SPV shall have each executed and delivered to the Collateral Agent the OPCO Consent, and (iv) the OPCO Consent shall be in full force and effect. Section 5.11 MCFA; Ground Lease; Easement Agreement. Lime and the SPV shall have entered into the MCFA, the Ground Lease and the Easement Agreement. On the Initial Funding Date, (i) each of the MCFA, the Ground Lease and the Easement Agreement shall be in full force and effect, (ii) each of the parties thereto shall be in full compliance with its respective obligations thereunder, and (iii) the Ground Lease and the Easement Agreement shall have been duly recorded in each office in which recordation is necessary in order to publish notice of the rights, titles and interests created thereunder. Section 5.12 Intercreditor Agreement. The Secured Parties shall have executed and delivered the Intercreditor Agreement and such agreement shall be in full force and effect. Section 5.13 Lime Security Agreement; Lime Pledge Agreement. Lime shall have executed and delivered to the Collateral Agent the Lime Security Agreement and the Lime Pledge Agreement, and both shall be in full force and effect. The Lien of the Collateral Agent created by the Lime Security Agreement shall constitute a valid perfected Lien on the Property purported to be encumbered thereby, junior only to the Lien of the Existing Creditors to the extent set forth in the Intercreditor Agreement. The Lien of the Collateral Agent created by the Lime Pledge Agreement shall constitute a valid first perfected Lien on the Equity Collateral. All stock -20- certificates representing the Equity Collateral shall have been delivered to the Collateral Agent together with stock powers duly endorsed in blank. Section 5.14 Partner Security Agreement. The SPV General Partner and the SPV Limited Partner shall have executed and delivered to the Collateral Agent the Partner Security Agreement conveying to the Collateral Agent a security interest in and to the entire partnership interest of each such partner in the SPV, together with one or more appropriate financing statements duly executed by each such partner. The security interests created by the Partner Security Agreement shall be perfected, first security interests, and the Partner Collateral shall be subject to no other Lien except a Lien in favor of the Existing Creditors. Section 5.15 Project Mortgage and Title Insurance. (a) Project Mortgage. The SPV shall have executed and delivered to the Collateral Agent the Project Mortgage which shall encumber, among other things, the leasehold estate of the SPV created by the Ground Lease and the easements and other rights created by the Easement Agreement. The Project Mortgage shall have been properly recorded in the public land records in and for Pendleton County, Kentucky, and any other office in which it is required to be recorded to give the public constructive notice thereof and of the interests created thereby or otherwise to perfect the same, and all taxes, recording fees and other fees and charges required by Applicable Law to be paid in connection therewith shall have been duly paid in full. In addition, any and all other actions required to give the public constructive notice of, or otherwise to perfect, the Project Mortgage and the interest created thereby shall have been taken. The Project Mortgage shall have created a valid first-priority Lien in and to the interests of the SPV purported to be encumbered thereby, subject to no Liens other than Permitted Liens. The Project Mortgage shall be in full force and effect without any defaults thereunder. (b) Title Insurance. The SPV shall have delivered to you and the Collateral Agent a policy of mortgage title insurance (ALTA Leasehold Loan Policy Form 1975) (the "Title Policy") insuring the Project Mortgage. The Title Policy shall (i) be issued by the Title Company, (ii) be dated not earlier than the Initial Funding Date, (iii) be in an amount not less than the Commitment Amount, (iv) insure that Lime has good and marketable title to the Project Land, (v) insure the SPV's leasehold interest in the Project Land, (vi) insure the SPV's interest in the Easement Parcel, and (vii) be otherwise satisfactory to you in all respects. -21- You shall have received certified copies of all encumbrances listed as exceptions to the Title Policy, in sufficient time for review by you and your counsel prior to the Initial Funding Date, and such encumbrances shall be satisfactory to you in all respects. Section 5.16 Execution and Delivery of Other Transaction Documents; Copies. Each of the parties thereto (other than you) shall have taken the actions, and executed and delivered the other Transaction Documents, including, without limitation, the Subscription and the Class B Common Stock, which they are required to take, execute and deliver pursuant to this Agreement; and each of the Transaction Documents shall be in full force and effect and each party thereto shall be in full compliance with its respective obligations thereunder. You shall have received original fully executed counterparts of each of the Transaction Documents. Section 5.17 Governmental Approvals. All material Governmental Approvals required by Applicable Law in connection with the ownership, construction and financing of the Project shall have been duly obtained; certified copies of all such authorizations, licenses, orders, permits and approvals shall have been delivered to you; and all of such authorizations, licenses, orders, permits and approvals shall be in full force and effect, and (to the extent assignable without rendering them void or voidable) shall have been assigned to the Collateral Agent pursuant to the SPV Security Agreement. Section 5.18 Surveys. On or prior to the Initial Funding Date, the SPV shall have delivered to you a current survey or surveys of the Site, certified to you, the Collateral Agent and the Title Company as of a date not more than thirty (30) days prior to the Initial Funding Date, which survey or surveys shall be in form, scope and substance satisfactory to you and the Title Company. Section 5.19 Soil Test. The SPV shall have delivered to you, in sufficient time for review by you and the Independent Engineer prior to the Initial Funding Date, a soil test report or reports prepared by a soil engineer licensed by the Commonwealth of Kentucky satisfactory to you and the Independent Engineer and addressed to you, and containing boring logs for all borings and showing the locations of all borings, together with recommendations by such engineer for the design of the foundations of the Project and confirming that no conditions exist which could cause subsidence of any portion of the Site. Section 5.20 Environmental Site Assessments. You shall have received a Phase I environmental site assessment, addressed to you, and such other environmental investigations, reports or analyses from the Environmental Consultant as you may request in respect of the Site, all in form and substance satisfactory to you. Section 5.21 Environmental Disclosures. You shall have received, in sufficient time for review by you, the Independent Engineer and your counsel prior to the Initial Funding Date, a copy of any environmental disclosure statement (or similar filing) required by any Governmental Authority, or evidence reasonably satisfactory to you that no such environmental disclosure statement is required. Section 5.22 Technical Evaluation of Project. You shall have received an evaluation from the Independent Engineer, addressed to you, in form and substance reasonably satisfactory -22- to you, regarding the construction, feasibility and operation of the Project and such other matters relating thereto as you may request. Section 5.23 Easements. You shall have received evidence reasonably satisfactory to you that the Project is benefited by such easements or other rights as may be necessary for the ownership, construction, maintenance and operation of the Project, including without limitation, vehicular and pedestrian access, egress and regress to, from and over the Project, together with all instruments and agreements by which such easements or other rights are created, all in sufficient time for review by you and your counsel prior to the Initial Funding Date. Section 5.24 Utilities. You shall have received, in sufficient time for review by you and your counsel prior to the Initial Funding Date, certified by the SPV, letters from appropriate Governmental Authorities or other evidence reasonably satisfactory to you that the Project will have adequate water, gas and electrical supply, storm and sanitary sewer facilities, and other required public utilities, fire and police protection and means of access to publicly dedicated roadways. Section 5.25 Construction Matters. The General Contractor, the Construction Contracts, the Plans and Specifications, the Construction Schedule, the Construction Budget and all other matters relating to the construction of the Project shall be satisfactory to you and the Independent Engineer in all respects. Section 5.26 Insurance. You shall have received a certificate from the insurance broker or agent engaged by the SPV or Lime in respect of the Project and from the Insurance Consultant, each addressed to you and in form and substance satisfactory to you, to the effect that all of the insurance policies contemplated by Section 12 of this Agreement have been obtained by the SPV or Lime. All such policies shall be in full force and effect, and the Collateral Agent and you shall have received binders or certificates acceptable to you and the Insurance Consultant with respect thereto. Section 5.27 Financial Statements; Projections. You shall have received (a) financial statements from the Corporation and Lime for each of their five most recently completed fiscal years, together with financial statements for their most recently completed fiscal quarter at the time of the Initial Funding (unless such fiscal quarter is the fourth fiscal quarter of their fiscal years), in each case satisfactory to you, and (b) certified copies of the Projections, in form and substance satisfactory to you, showing the projected revenues and expenses of the Project during the period commencing on the Conversion Date through and including the Term Note Maturity Date. Section 5.28 Private Placement Number. You shall have obtained a private placement number from Standard & Poor's CUSIP Service Bureau for the Construction Notes. -23- Section 5.29 Supporting Documentation. In connection with the Draw Request submitted with respect to the Initial Funding Date, you shall have received each of the following, and each shall be satisfactory to you in all respects: (a) Lien Waivers -- from the General Contractor and each other contractor, supplier, materialman or other Person that has supplied labor, materials or services for procurement, design or construction of the Project or that otherwise might be entitled to claim a contractual or statutory Lien against the Project, the Site, the Black River Common Facilities or any part thereof, waivers of Liens and any other statement, instrument or agreement as you may deem to be necessary or desirable; (b) Contractor Disputes -- if any significant dispute has arisen between the SPV or the Construction Manager and any contractor or subcontractor, a written summary of the nature of such dispute; and (c) Other Information -- such other information and documents as you may reasonably request in connection with such Draw Request and the status of construction of the Project. Section 5.30 Fees and Expenses. All of the fees and expenses required to have been paid to you on or prior to the Initial Funding Date, including without limitation the balance of the commitment fee due pursuant to Section 1.7(a) hereof and the Transaction Expenses pursuant to Section 15 hereof, shall have been paid. In addition, Lime shall have paid to you a fee in the amount of One Million Eleven Thousand Four Hundred Forty-Three and 09/100's Dollars ($1,011,443.09) for the prepayment rights set forth in Section 1.6(c) and Section 2.3(b). Section 5.31 Material Adverse Change; Uncontrollable Force. There shall have been no change in the business, prospects or financial condition of any one or more of the SPV, the Project, Lime, or OPCO which, in your reasonable judgment, could be expected to have a material adverse effect on the Project or the ability of any of such Persons to perform any material obligation under any Transaction Document. There shall not have occurred any Uncontrollable Force which would allow any party to any of the Transaction Documents to avoid all or any material part of its obligations thereunder. Section 5.32 Offering and Sale of Construction Notes. You shall have received a letter, dated the Initial Funding Date, from Continental Bank Lease Capital Group to the effect that it has not directly or indirectly offered any Security with respect to the Project for issue or sale to, or solicited offers to acquire such Security from, or otherwise approached or negotiated with, more than thirty (30) Accredited Investors in addition to you, and that it has not taken any action which would subject the issuance and sale of the Construction Notes or the Term Notes to the registration requirements of Section 5 of the Securities Act. Section 5.33 Solvency. You shall have received pro forma balance sheets of each of the SPV and Lime as of the Initial Funding Date showing the effect of the transactions contemplated by this Agreement on such date, which balance sheets shall show a solvent financial condition and be certified by the respective Senior Financial Officers of each of the SPV and Lime, as the case may be. -24- Section 5.34 Collateral Agent; Disbursement Agent. You, the Collateral Agent, the SPV, Lime and each of the Partners shall have entered into the Collateral Agency Agreement, and such agreement shall be in full force and effect. The Collateral Agent, the Disbursement Agent and the SPV shall have entered into the Deposit and Disbursement Agreement, and such agreement shall be in full force and effect. Section 5.35 Proceedings Satisfactory; Additional Documents. All proceedings taken in connection with the sale of the Construction Notes and all documents and papers relating thereto shall be reasonably satisfactory in all respects to you and your counsel. You and your counsel shall have received copies of such documents and papers as you or they may reasonably request in connection therewith or in connection with your counsel's closing opinion, all in form and substance satisfactory to you and such counsel. You shall have received such other approvals, opinions or documents as you shall reasonably request. SECTION 6 CONDITIONS PRECEDENT TO SUBSEQUENT CONSTRUCTION FUNDINGS. Your obligations to make Advances in respect of the Construction Notes on any Funding Date subsequent to the Initial Funding Date (each a "Subsequent Funding Date") shall be subject to satisfaction of all of the following terms and conditions: Section 6.1 Continued Satisfaction of Initial Funding Conditions. All Transaction Documents shall be in full force and effect and no Default or Event of Default shall exist. All conditions required to have been satisfied by Section 5.2, Section 5.4, Section 5.6, Section 5.8, Section 5.9, Sections 5.10 through 5.17, Section 5.25, Section 5.26, Section 5.31 and Section 5.34 of this Agreement on and as of the Initial Funding Date shall, whether or not fulfillment of such conditions shall have previously been waived, be satisfied on and as of such Subsequent Funding Date and all references therein to the Initial Funding Date shall be deemed to be references to such Subsequent Funding Date; and you shall have received such certificates, legal opinions and other evidence of such continued satisfaction as you may deem necessary or appropriate. Section 6.2 Material Adverse Change; No Default. All Transaction Documents shall be in full force and effect. There shall have been no change in the business, prospects or financial condition of any one or more of the SPV, the Project, Lime, or OPCO which, in your reasonable judgment, could be expected to have a material adverse effect on the Project or the ability of any of such Persons to perform any material obligation under any Transaction Document; and no Default or Event of Default shall exist. There shall not have occurred any Uncontrollable Force which would allow any party to any of the Transaction Documents to avoid all or any material part of its obligations thereunder. Section 6.3 Subsequent Funding Date Draw Requests. The Construction Manager shall have submitted to you and the Independent Engineer a Draw Request signed by the SPV, not less than five (5) Business Days prior to such Subsequent Funding Date, together with a construction status report prepared by the Construction Manager detailing the progress of the construction of the Project and containing a statement to the effect that, after giving effect to the requested funding, the Project can be completed in accordance with the Construction Schedule and at a cost within the Construction Budget; and, not less than two (2) Business Days prior to the such Subsequent Funding Date, the Independent Engineer shall have delivered to you the -25- Independent Engineer's Certificate, stating that the Independent Engineer (i) concurs with such construction status report and (ii) has approved such Draw Request in all respects. Section 6.4 Supporting Documentation. You shall have received each of the following, and each shall be satisfactory to you in all respects: (a) Lien Waivers -- from the General Contractor and each other contractor, supplier, materialman or other Person that has supplied labor, materials or services for procurement, design or construction of the Project or that otherwise might be entitled to claim a contractual or statutory Lien against the Project, the Site or any part thereof, waivers of Liens and any other statement, instrument or agreement as you may deem to be necessary or desirable; (b) Contractor Disputes -- if any significant dispute has arisen between the SPV or Lime, as construction supervisor under the Construction Management Agreement, and any contractors or subcontractors, a written summary of the nature of such dispute; (c) Other Information -- such other information and documents as you may reasonably request in connection with such disbursement request and the status of construction of the Project; and (d) Title Policy Endorsements -- such endorsements to the Title Policy as you may deem necessary or appropriate to insure the Project Mortgage as security for the entire amount of Construction Notes outstanding at any time, which endorsements shall delete any exceptions for mechanics' liens and "pending disbursements" with respect to the requested Advance and all previous Advances and be satisfactory to you in all respects. Section 6.5 Equity Funding. Lime shall have made the contributions to the equity capital of the SPV required by Section 3.15 of the Lime Security Agreement. Section 6.6 Proceedings Satisfactory. All proceedings taken in connection with such disbursement and all documents and papers relating thereto shall be reasonably satisfactory in all respects to you and your special counsel (including Kentucky counsel). You and your counsel shall have received copies of such documents and papers as you or they may reasonably request in connection therewith, all in form and substance reasonably satisfactory to you and such counsel. You shall have received such other approvals and documents as you shall reasonably request. SECTION 7 PROVISIONS RELATING TO CONSTRUCTION. Section 7.1 Completion of Construction. The SPV shall diligently and continuously cause to be pursued the construction of the Project (and any rebuilding of the Project required under Section 9.6 of this Agreement) in accordance with Prudent Industry Practice and generally accepted engineering practice and construction procedures, the Plans and Specifications and the Construction Schedule. The construction shall be completed in a good and workmanlike manner with materials of high quality, free of defects and Liens (other than Permitted Liens) and in accordance (in all material respects) with all Applicable Laws and insurance requirements -26- under the Transaction Documents. The Project shall have achieved Substantial Completion not later than June 30, 1995. Section 7.2 Changes in Plans and Specifications. The SPV shall not make any changes to the Plans and Specifications without your prior written consent. Except to the extent permitted by Section 1.8, the SPV shall not amend any Construction Contract or the Construction Budget without your prior written consent. Section 7.3 Inspection. The SPV agrees to cooperate and to cause Lime to cooperate in arranging and allowing any one or more of you, the Independent Engineer, the Environmental Consultant and any of their respective designees or representatives to inspect and review from time to time the progress of construction of the Project at reasonable times and at reasonable intervals. Section 7.4 Contingency Fund. The Construction Budget shall contain a line item designated as the contingency fund which shall represent an amount necessary to fund cost overruns or change orders in amounts in excess of the Construction Costs set forth in the Construction Budget. Except to the extent otherwise permitted by Section 1.8, any decisions as to whether to use all or any portion of the contingency fund for payment of any such cost overruns or other unexpected additional costs shall be made only with your consent. Section 7.5 Sufficiency of Construction Note Proceeds. If at any time you, after consultation with the Independent Engineer, reasonably determine that the Unused Commitment will not be sufficient to pay in full all Construction Costs and other amounts required to be paid in accordance with this Agreement, then you shall have no obligation to make further Advances until the SPV has provided you with adequate assurance that additional equity funds are or will be available on terms and conditions and from creditworthy entities acceptable to you, in your sole discretion, to complete the Project in accordance with the requirements of Section 7.1. Section 7.6 Employment of the Independent Engineer. You shall have the right to employ the Independent Engineer, the Environmental Consultant, the Insurance Consultant and such other advisors as you may deem reasonably necessary or appropriate to review the Project Contracts and all other matters related to construction of the Project, and to inspect such construction and the progress thereof from time to time in accordance with Section 7.3. Section 7.7 Retainages. No Draw Request shall request an Advance for more than the total amount then due in respect of any Construction Contract (less applicable retainage) or any Construction Costs that are otherwise due and payable, as certified by the Independent Engineer. That portion of the Unused Commitment which has not been advanced as a consequence of the foregoing sentence shall be advanced only upon (i) completion of the work to be performed under such Construction Contract in accordance with the Plans and Specifications as certified by the Independent Engineer and (ii) delivery of a final waiver of Lien and sworn statement from such contractor, subcontractor or material supplier as to its receipt of full and final payment for the work done or materials provided. Section 7.8 Off-Site Materials. You shall not be required to advance proceeds of any Construction Notes in respect of material to be used in connection with the construction of the Project but which is stored off- site unless you, in your sole discretion, determine to make such -27- an Advance after having been provided with satisfactory evidence that (i) such stored material is included within the coverages of insurance required to be maintained by the Transaction Documents, (ii) the ownership of such material is vested in the SPV free of any Liens and claims of third parties, (iii) the Collateral Agent has a valid and perfected first-priority Lien thereon under the Project Mortgage or the SPV Security Agreement and (iv) such materials are protected against theft and damage. Section 7.9 Insurance. The SPV shall cause the Construction Manager to maintain the insurance coverages required by Section 12 of this Agreement. SECTION 8 CONDITIONS PRECEDENT TO PURCHASE OF TERM NOTES. Notwithstanding anything herein to the contrary, your obligation to purchase the Term Notes in accordance with Section 2.1 of this Agreement shall be subject to satisfaction of the following conditions precedent not later than the Construction Note Maturity Date; provided that your obligation shall not be subject to your own performance or compliance if such performance or compliance is within your control: Section 8.1 Notice of Conversion Date. The SPV shall have submitted to you a written notice specifying the Conversion Date, which date shall be (i) not earlier than ten (10) days after the date of such notice, and (ii) not later than the Construction Note Maturity Date. Section 8.2 No Default; Construction Note Interest Paid. No Default or Event of Default shall exist, and the SPV shall have paid the interest on the Construction Notes accrued to the Conversion Date as well as all other outstanding amounts then owed to you pursuant to this Agreement and each other Transaction Document. Section 8.3 Opinions of Counsel. You shall have received from (a) Hebb & Gitlin, your special counsel, (b) Wyatt, Tarrant & Combs, your Kentucky counsel, (c) Buchanan Ingersoll, counsel to the SPV, the Partners and to Lime, and (d) Richards, Layton & Finger, counsel to the Collateral Agent, and such other counsel as you deem reasonably necessary, closing opinions, each dated as of the Conversion Date, covering matters of the type covered by the opinions delivered pursuant to Section 5.3 hereof, and such other matters as you may reasonably request. Section 8.4 Warranties and Representations True; No Defaults. The warranties and representations contained in Section 4 hereof, and all warranties and representations made by the SPV and each other party in any other Transaction Document or in any certificate delivered pursuant to Section 8.5 of this Agreement, shall be true and correct on the Conversion Date with the same effect as though made on and as of that date. The Governmental Approvals listed in Annex 4 hereto shall have been obtained, and all representations and warranties set forth in Section 4.5 shall apply thereto and be true and correct on the Conversion Date. -28- Section 8.5 Closing Certificates. You shall have received (a) a certificate of the SPV, dated the Conversion Date, in form and substance satisfactory to you, certifying that all actions required to be taken by the SPV prior to the Conversion Date have been duly taken, that the representations and warranties contained in Section 4 hereof and all other representations made by the SPV in any other Transaction Document are true and correct on and as of the Conversion Date, and that no Default or Event of Default has occurred, and (b) certificates dated the Conversion Date and signed by a Responsible Officer of each party to any Financing Document (other than you) in form and substance satisfactory to you, certifying that all representations and warranties made by such Person in any Transaction Document and in each certificate delivered pursuant thereto, are true and correct on and as of the Conversion Date. Section 8.6 Legality; Litigation. The issuance of the Term Notes and consummation of the transactions contemplated by the Transaction Documents shall not violate any Applicable Law; and no suit or similar proceeding shall have been initiated challenging the legality or validity of the Term Notes. The Term Notes shall qualify as a legal investment for insurance companies under applicable insurance law (without regard to any "basket" or "leeway" provisions) and you shall have received such evidence as you may reasonably request to establish compliance with this condition. No litigation, governmental investigation or other proceeding shall be pending or threatened by any Person which, if adversely determined, could prevent performance under the Transaction Documents or make unlawful or impose any material adverse condition upon the Project (or any part thereof) or the OPCO Agreement or the construction, start-up or operation of the Project (or any part thereof) or the SPV's ownership thereof or the Collateral Agent's Liens on any of the Collateral. Section 8.7 Execution and Delivery of Transaction Documents; Copies. Each Person (other than you) required to act under any Transaction Document shall have taken the actions, and executed and delivered those Transaction Documents (including, without limitation, the Transportation Agreement), which such Person is required to take, execute and deliver pursuant thereto; and such Transaction Documents shall be in full force and effect and each party thereto shall be in full compliance with its respective obligations thereunder. You shall have received original fully executed counterparts of each of such Transaction Documents. Section 8.8 OPCO Agreement. On the Conversion Date, (i) the OPCO Agreement shall be in full force and effect, (ii) each party thereto shall be in full compliance with its obligations thereunder (including, without limitation, that commercial operation of the Project shall have commenced), and (iii) the OPCO Consent shall be in full force and effect. Section 8.9 Continued Effectiveness of Agreements. Each of the MCFA, the Deposit and Disbursement Agreement, the Ground Lease, the Easement Agreement, the Mortgage Subordination Agreement, the Construction Management Agreement, the Construction Contracts and the Intercreditor Agreement shall be in full force and effect and each party to such documents shall be in material compliance with its respective obligations thereunder. -29- Section 8.10 Title Policy Endorsements. The SPV shall have executed and delivered a statement in accordance with Kentucky Revised Statutes Section 382.380 and such other mortgage modification documentation as may be required by you. You shall have received such endorsements to the Title Policy as you may deem reasonably necessary or appropriate to insure your interest, and such endorsements shall be satisfactory to you in all respects. Section 8.11 Insurance. All of the insurance policies required by Section 12 of this Agreement shall be in full force and effect, and you shall have received binders or certificates acceptable to you and the Insurance Consultant with respect thereto. Section 8.12 Fees and Expenses. All of the fees and expenses required to have been paid to you on or prior to the Conversion Date pursuant to Section 15 hereof shall have been paid. Section 8.13 Material Adverse Change; Uncontrollable Force. There shall have been no change in the business, prospects, or condition (financial or otherwise) of any one or more of the SPV, the Project, the Black River Facility, Lime, or OPCO which could reasonably be expected to have a material adverse effect on the Project or the ability of any of such Persons to perform any material obligation under any Transaction Document. There shall not have occurred any Uncontrollable Force which would allow any party to any Transaction Document to avoid all or any part of its obligations under such Transaction Document. Section 8.14 Final Approvals. You shall have received true and correct copies of all Final Approvals. All Final Approvals shall have been duly obtained, be in full force and effect, have been validly issued, be final and nonappealable and not be subject to any condition, limitation, or other provision that in your reasonable judgment has had or could reasonably be expected to have a material adverse effect on the Project. The Project shall comply in all material respects with all Final Approvals. Section 8.15 Completion Certificates. The Construction Manager shall have delivered a completion certificate, in form and substance satisfactory to you, and the Independent Engineer shall have delivered a completion certificate, in form and substance satisfactory to you, each of which shall, among other things, certify that the Project has been completed subject only to Punch List Items, and that the Project meets or exceeds the Plans and Specifications and the Performance Criteria set forth in the Construction Contracts. Section 8.16 As-Built Survey. You shall have received an as-built survey of the Site, prepared by a registered or certified land surveyor of the Commonwealth of Kentucky, showing the perimeter boundary of the Site, all encroachments by or upon the Site, all building line restrictions, easements, drainage or flowage rights, rights-of-way, means of access and any uses which affect the Site (together with appropriate references to recorded instruments relating to such instruments), all buildings, structures and other improvements thereon and all paving, driveways and fences, if any, in place, and such other information as you may reasonably request. Said survey or surveys shall be currently dated and shall be prepared in accordance with the standards issued by the American Land Title Association, bearing a certification in favor of you, the Collateral Agent, the Title Company and the SPV that is in all respects satisfactory to you. -30- Section 8.17 Operating Budget. You shall have received an operating budget for the twelve (12) month period immediately following the Conversion Date which shall be in form and content reasonably satisfactory to you. Section 8.18 Environmental Matters. You shall have received such environmental site assessments and other reports regarding the current state of the Project as you or the Environmental Consultant deem reasonably necessary or desirable, all acceptable to you in form and content. Section 8.19 Construction Costs; Required Reserve Payment. All Construction Costs shall have been paid in full, or an amount sufficient to pay any remaining Construction Costs shall have been delivered to the Disbursement Agent for deposit into the Construction Completion Account. The Required Reserve Payment, if any, shall have been paid to the Disbursement Agent for deposit pursuant to Section 2.3(a) of the Deposit and Disbursement Agreement, and, after giving effect to such deposit and any payment required to be made by Lime pursuant to Section 3.15 of the Lime Security Agreement, the amount on deposit in the Debt Service Reserve shall be not less than Six Months' Debt Service. Section 8.20 Solvency. You shall have received a pro forma balance sheet of each of the SPV and Lime as of the Conversion Date showing the effect of the transactions contemplated by this Agreement which balance sheets shall show a solvent financial condition and be certified by the respective Senior Financial Officers of each of the SPV and Lime. Section 8.21 Private Placement Number. You shall have obtained a private placement number for the Term Notes from Standard & Poor's CUSIP Service Bureau. Section 8.22 Proceedings Satisfactory; Additional Documents. All proceedings taken in connection with the purchase of the Term Notes, and all documents and papers relating thereto, shall be reasonably satisfactory in all respects to you and your counsel. You and your counsel shall have received copies of such documents and papers as you or they may reasonably request in connection therewith or in connection with your counsel's closing opinion, all in form and substance reasonably satisfactory to you and such counsel. You shall have received such other approvals, opinions or documents as either of you shall reasonably request. SECTION 9 COVENANTS AND AGREEMENTS. The SPV covenants and agrees that on and after the Initial Closing Date and so long as any of the Notes shall be outstanding: Section 9.1 Maintenance of Existence. The SPV shall at all times maintain its existence as a limited partnership organized under the laws of the state of Delaware, shall not take or permit to be taken any action which would have the effect of terminating its existence, and shall qualify and remain qualified to do business and to carry on its operations in the Commonwealth of Kentucky. The SPV will acquire, maintain and renew all Governmental Approvals, contracts, powers, privileges, leases, lands, sanctions, franchises and other authorizations necessary for the conduct of its operations, and will comply with all Applicable Laws, in each case where the failure to do so would have a material adverse effect upon its -31- business or financial condition or its ability to perform its obligations under this Agreement or any other Transaction Document. Section 9.2 Maintenance of Permits. The SPV will keep or cause to be kept current and will obtain, maintain or cause to be obtained and maintained in full force and effect all material Governmental Approvals and will promptly obtain and maintain the effectiveness of all other licenses, consents, regulatory commission approvals, certificates of public convenience and necessity and permits that from time to time may be necessary or, in your reasonable judgment, advisable, in connection with (x) the installation, construction, testing, delivery, conveyance and operation of the Project and the Black River Common Facilities, (y) the performance by the SPV of its obligations under this Agreement or any of the other Transaction Documents or (z) maintaining and ensuring the legality, validity, binding effect or enforceability of any of the Transaction Documents. Section 9.3 Environmental Matters. The SPV shall comply (or shall cause Lime, as Operator, to comply) in all material respects with all Environmental Laws now or hereafter applicable to the Site, the Project, the Black River Common Facilities or the installation, construction, testing, delivery, conveyance, use, modification or operation thereof. The SPV shall, or it shall cause Lime as Operator to, conduct any investigation, study, sampling or testing required by Applicable Law, and undertake any cleanup, removal, remedial action or other action necessary to remove from and clean up or remediate all Hazardous Materials at or released on or from the Site, the Black River Common Facilities or the Project, in accordance with all applicable Environmental Laws and Governmental Approvals. If the SPV or Lime shall be required to take any action pursuant to the preceding sentence, it shall cause to be prepared by an environmental consulting firm (selected by the SPV or Lime and reasonably acceptable to you) a report describing the environmental condition requiring such action and the actions taken by it in response to such environmental condition, and shall obtain a statement by such firm that such condition has been remedied in compliance with all applicable Environmental Laws. Section 9.4 Payment of Notes and Maintenance of Office. (a) Payment of Notes. The SPV will punctually pay, or cause to be paid, the principal of and interest (and Make-Whole Amount, if any) on, the Notes, as and when the same shall become due according to the terms hereof and of the Notes. (b) Maintenance of Chief Executive Office. The SPV will maintain its chief executive office at the address of the SPV set forth in Section 4.35 hereof where notices, presentations and demands in respect hereof or the Notes may be made upon it. The SPV shall not change the location of its chief executive office without providing at least thirty (30) days prior written notice to each Holder and to the Collateral Agent. Section 9.5 Maintenance of Books and Records. The SPV shall maintain true and correct books of records and accounts in which full and correct entries will be made of all its business transactions (i) in accordance with sound business practices and GAAP consistently applied and (ii) so as to enable the SPV and Lime to comply with their respective obligations under the Transaction Documents and to permit proper audits and accountings of the transactions contemplated thereby. -32- Section 9.6 Operation and Maintenance. The SPV shall, or shall cause the Operator to, (a) at all times maintain the Project Land and operate, maintain, service and repair the Project and the Project-Owned Common Facilities in such condition that it will have the capacity and functional ability to perform, on a continuing basis, in normal commercial operation, the functions for which it was designed, and at Total Net Capability, ordinary wear and tear excepted; (b) operate, service, maintain, inspect, overhaul, test and repair the Project and replace all necessary or useful parts and components thereof so that the condition and operating efficiency of the Project will be maintained and preserved in all respects in accordance with (i) Prudent Industry Practice, (ii) such operating standards as shall be required to take advantage of and enforce all available warranties, (iii) all manufacturers' recommended procedures, (iv) such operating standards and procedures as are or may from time to time be mandated by any Governmental Authority or as may be required in order to perform its obligations under the Project Contracts, (v) the terms and conditions of, and so as to preserve all coverage under, all insurance policies required to be maintained pursuant to Section 12 hereof, (vi) to the extent not inconsistent with the other requirements of this Section 9.6, Lime's operation and maintenance practices with respect to similar facilities owned, leased or operated by it, and (vii) all requirements of Applicable Law (except as otherwise provided in Section 9.10) and the Ground Lease, and (c) maintain all records, logs, manuals and other materials in respect of the Project and the Site, in accordance with Prudent Industry Practice. The SPV shall not permit the Project or the Site to be maintained, used or operated in any manner or for any purpose excepted from any insurance in respect of the Project. For purposes of enabling it to comply with the requirements of this Section 9.6, the SPV shall at all times maintain (or cause to be maintained) a sufficient inventory of spare parts, consistent with Prudent Industry Practice, giving due regard to manufacturers' recommendations in this regard. Section 9.7 Plans and Specifications. The SPV shall at all times maintain and keep on file at its chief executive office a complete set of the Plans and Specifications. Section 9.8 Operating Logs. The SPV shall (i) maintain daily operating logs showing the production from the Project, (ii) keep maintenance and repair reports in sufficient detail to indicate the nature of all major work done with respect to the Project and (iii) maintain current operating manuals (including training, maintenance and technology manuals) and a complete set of plans and an as-built survey of the Project in sufficient detail to enable an engineer not otherwise familiar with the Project to locate and identify the various items of Property comprising the Project, in each case in accordance with Prudent Industry Practice. Such logs and reports shall be kept on file at the Project and at its chief executive office for at least ten years, shall be retained so long as any Note is outstanding and shall be made available in compliance with Section 10.6 hereof. Section 9.9 Payment of Taxes. The SPV shall file or cause to be filed all Federal, state and local tax returns which are required to be filed by it, and shall pay or discharge or cause to be paid or discharged before any penalty accruing from the failure to so pay or discharge, all taxes, assessments and governmental charges, imposts, duties and levies charged, levied or imposed upon it or upon its income, profits or Property (including withholding and any penalties, interest and additions to taxes). Section 9.10 Compliance with Applicable Law. The SPV shall comply in all material respects with all requirements of Applicable Law and shall obtain and maintain all material -33- Governmental Approvals (and furnish copies thereof to the Holders) as shall at any time be necessary or, in the reasonable opinion of the Holders, advisable, under Applicable Law in connection with the ownership, construction, operation, use, possession or maintenance of the Project, the Site and the Black River Common Facilities or any material Governmental Approval and the Ground Lease except if: (a) the SPV shall be contesting diligently and in good faith by appropriate proceedings such requirement of Applicable Law or Governmental Approval and has established all necessary or appropriate reserves in compliance with GAAP in connection with such contest; or (b) compliance with such requirements or Governmental Approval shall have been excused or exempted by a valid nonconforming use permit, waiver, extension or forbearance exempting the SPV from such requirement or action. If the foregoing clause (a) or (b) shall apply then the failure by the SPV to comply with such requirement or to obtain such action shall not constitute a Default or an Event of Default hereunder; provided, however, that such contest or noncompliance does not involve (i) any risk of the imposition of criminal liability on any Person (except Persons not party to any Transaction Document who shall have agreed in writing to accept the risk of foreclosure, sale, forfeiture or loss of the Site, the Project, or the Black River Common Facilities or any material Governmental Approval), (ii) any risk of material civil liability being imposed upon any Person (except Persons not party to any Transaction Document who shall have agreed in writing to accept such risk and its consequences), or (iii) any material risk of (A) the creation of a Lien (other than a Permitted Lien) on the Site, the Project or the Black River Common Facilities, or (B) the extension of the ultimate imposition of such requirement or Governmental Approval beyond the date that is six months after the Term Note Maturity Date. The SPV shall promptly, but in any event within 10 days of the occurrence thereof, provide you with notice of any contest or noncompliance of the types described in clauses (a) and (b) of the second sentence of this Section 9.10 in detail sufficient to enable you to ascertain whether such contest or noncompliance may have any effect of the type described in the proviso to the first sentence in this Section 9.10. At your request, the SPV agrees to contest, at its sole cost and expense and using counsel reasonably acceptable to you, any requirement of Applicable Law; provided that the SPV receives (x) an opinion of counsel reasonably acceptable to it to the effect that there is a reasonable likelihood of success on the merits and (y) a reasonably detailed explanation of the reasons for such request for the SPV to contest such matters and provided, further, that the contest will not have a material adverse effect on the operation of the Project, and that such contest, or noncompliance during such contest, does not violate the standards set forth in the proviso to the second sentence in this Section 9.10. Section 9.11 Purchase of Notes. Neither the SPV nor any of its Affiliates shall acquire or hold, directly or indirectly, any Note (or any interest therein), whether by purchase, participating interest, pledge or otherwise. Section 9.12 Further Assurances. The SPV shall at its sole cost and expense cause to be promptly and duly taken, executed, acknowledged and delivered all such further acts, documents, assurances and information (financial or otherwise) relating to the Site, the Project, the Black River Common Facilities or the Transaction Documents or the rights of the other parties thereto as such other Persons may, from time to time, reasonably request in order to carry out more effectively the intent and purposes of this Agreement and the other Transaction Documents, and the transactions contemplated hereby and thereby. The SPV shall cause the financing statements (and continuation statements with respect thereto), termination statements and the documents enumerated and described in Part 4.18 of Annex 3 hereto, and all other documents necessary in that connection, to be recorded or filed at such places and times, and in such -34- manner, and shall take, or shall cause to be taken, all such other action as may from time to time be necessary or reasonably requested by you in order to (i) establish, preserve, protect and perfect the SPV's right, title and interest in and to the Project, and (ii) establish, preserve, protect and perfect the Lien and security interest of the Collateral Agent in and to the Collateral. Section 9.13 Disposition of Assets. The SPV shall not convey, sell, lease, sublease or otherwise dispose of, in one transaction or a series of transactions (or agree in writing to do any of the foregoing at any future time) any of its Property or any part thereof, including, without limitation, the OPCO Agreement, other than sales of processed lime in the ordinary course of business and distributions to Lime of amounts paid to the SPV pursuant to Section 2.2(b)(ii)(F) of the Deposit and Disbursement Agreement. Section 9.14 Change in Name. The SPV shall not change its name or adopt an assumed, business or trade name without providing at least thirty (30) days prior written notice to each Holder and to the Collateral Agent. Section 9.15 Nature of Business. The SPV shall not (i) engage in any business other than the ownership, operation and maintenance of the Project as contemplated by the Transaction Documents, or (ii) directly or indirectly become a shareholder in any corporation or acquire or become a party to any other commercial enterprise or venture. Section 9.16 Debt; Bank Account. The SPV shall not directly or indirectly create, incur, assume, issue or otherwise become liable, directly or indirectly, with respect to any Debt other than pursuant to, or as contemplated by, the Transaction Documents. The SPV shall maintain no bank accounts (or similar accounts) other than those maintained pursuant to the Deposit and Disbursement Agreement. Section 9.17 Filing of Reports. The SPV, at its own expense, shall prepare and, upon the request of any Holder, file, in timely fashion any reports with respect to the construction, start-up, maintenance, ownership, condition or operation of the Project that shall be required to be filed with any Governmental Authority by the Project Contracts, by Applicable Law or in connection with the transactions contemplated by this Agreement or any of the other Transaction Documents. Section 9.18 Transactions with Affiliates. The SPV shall not engage in any transaction with any Affiliate, except (a) transactions with Affiliates as expressly contemplated by and in accordance with the Transaction Documents and (b) with respect to transactions other than those referenced in clause (a), only (i) in the ordinary course of business and pursuant to the good faith reasonable requirements of the SPV's and such Affiliate's business and (ii) upon fair and reasonable terms which are not less favorable to it than would be available in a comparable transaction with an unrelated Person. Section 9.19 Loans; Investments. The SPV shall not make any loans, advances or extensions of credit to any of its Partners, employees, agents or contractors, or make any investment in any Person or Property except as contemplated by the Transaction Documents. Section 9.20 Additional Agreements. If at any time the SPV shall enter into any new Project Contract or other material contract or agreement for the supply of essential goods and -35- services or obtain any additional Governmental Approval, the SPV shall promptly execute and deliver an assignment in form and substance reasonably satisfactory to you, assigning to the Collateral Agent all right, title and interest of the SPV in, to and under such Project Contract or material contract or agreement or Governmental Approval which Project Contract, material contract, agreement or Governmental Approval shall become part of the Collateral; provided, however, that the SPV shall have no obligation to assign any Governmental Approval the assignment or encumbrance of which is prohibited by Applicable Law. Section 9.21 Payment of Project Revenues. The SPV shall (i) instruct all Persons obligated to it for the payment of money to pay all such sums directly to the Disbursement Agent and (ii) pay over to the Disbursement Agent promptly upon receipt all the Project Revenues in the form received (together with any required endorsements), all such funds to be held and disbursed by the Disbursement Agent in accordance with the Deposit and Disbursement Agreement. Section 9.22 Performance and Enforcement of Agreements. The SPV shall at all times, unless the Holders otherwise consent in writing, perform and observe all of its covenants under each of the Project Contracts, diligently enforce all of its rights and obligations thereunder, and maintain each Project Contract in full force and effect, and (except to the extent expressly permitted herein or in any other Transaction Document) shall not amend, modify, supplement, terminate or waive any provision of, any Project Contract, or consent to any such amendment, modification, supplement, termination or waiver, without the prior written consent of the Holders. Section 9.23 Liens. The SPV shall not directly or indirectly create, incur, assume or suffer to exist any Lien on or with respect to the Site, Project, the Black River Common Facilities, the Ground Lease, the Collateral, the Assigned Documents, the SPV's title thereto or interest therein, or on or with respect to any title or interest of the SPV therein or in any other asset of the SPV, except Permitted Liens; and the SPV, at its own risk and expense, shall promptly take such action as may be necessary duly to discharge any such Lien. The SPV shall take or cause to be taken all action necessary to maintain and preserve the Lien of the SPV Security Agreement and the Project Mortgage. Section 9.24 Reports of Liens. The SPV shall promptly, and in no event later than five (5) Business Days after it shall have obtained knowledge of the attachment of any Lien other than a Permitted Lien, notify the Collateral Agent in writing of the attachment of such Lien and of the full particulars thereof unless the same shall have been theretofore discharged or removed. Section 9.25 Most Favored Nation. The SPV shall not, without the consent of the Holders, take any action which would require it to adjust the purchase price to OPCO under the OPCO Agreement in accordance with Article XXII of the OPCO Agreement. -36- SECTION 10 INFORMATION AS TO THE COMPANIES. Section 10.1 Financial and Business Information. The SPV shall deliver to Holder, the Collateral Agent and the Disbursement Agent: (a) Fiscal Quarter Statements of the SPV -- as soon as practicable after the end of each of the first three fiscal quarters of each fiscal year, and in any event within forty-five (45) days thereafter, (i) an unaudited balance sheet of the SPV as at the end of such fiscal quarter, and (ii) statements of operations, retained earnings and cash flows of the SPV, for such fiscal quarter and the portion of the fiscal year through such fiscal quarter, all in reasonable detail, prepared in accordance with GAAP applicable to quarterly financial statements generally, and setting forth in each case, in comparative form, (A) the figures for the corresponding period in the previous fiscal year and (B) the corresponding figures set forth in the Projections, and certified as complete and correct, subject to changes resulting from year-end adjustments, by a Senior Financial Officer of the SPV, and accompanied by the certificate required by Section 10.2 hereof; (b) Annual Statements of the SPV -- as soon as practicable after the end of each fiscal year of the SPV, and in any event within ninety (90) days thereafter, (i) a balance sheet of the SPV, as at the end of such fiscal year, and (ii) statements of operations, retained earnings and cash flows of the SPV, for such fiscal year, all in reasonable detail, prepared in accordance with GAAP applicable to annual financial statements generally, and setting forth, in comparative form, (A) the corresponding figures for the previous fiscal year and (B) the corresponding figures set forth in the Projections, and accompanied by a report thereon by an accounting firm of recognized national standing, which report shall, without qualification (including, without limitation, qualifications related to the scope of the audit or the ability of the SPV to continue as a going concern), state that such financial statements present fairly, in all material respects, the financial position of the SPV and its results of operations and cash flows and have been prepared in conformity with GAAP, and that the examination of such accountants in connection with such financial statements has been made in accordance with generally accepted auditing standards, and that such audit provides a reasonable basis for such report in the circumstances; (c) Fiscal Quarter Project Statements -- as soon as practicable, but in any event within 45 days after the end of each of the first three fiscal quarters of the SPV, in each fiscal year, the SPV shall prepare or cause to be prepared financial statements and -37- cash flow statements for each of the Project and the Black River Facility, setting forth in each case in comparative form (i) the corresponding figures for corresponding periods in the preceding fiscal year and (ii) the corresponding figures in the Projections; (d) Fiscal Year Project Statements -- as soon as practicable, but in any event within 90 days after the end of each fiscal year of the SPV, the SPV shall prepare or cause to be prepared financial statements and cash flow statements for each of the Project and the Black River Facility, setting forth in each case in comparative form (i) the corresponding figures for the preceding fiscal year and (ii) the corresponding figures in the Projections; (e) Federal Income Tax Returns -- promptly upon filing, copies of each federal income tax return of the SPV; (f) Lime Sales -- as soon as practicable, but in any event within 45 days after the end of each fiscal quarter, a written statement indicating (i) the amount of lime sold (expressed in tons) to OPCO and each other Person during such fiscal quarter, (ii) the rate or rates at which such lime was sold and (iii) the amount, if any, refunded or required to be refunded to OPCO with respect to such fiscal quarter in accordance with the OPCO Agreement, accompanied by a certificate of a Senior Financial Officer of the SPV attesting to the accuracy thereof; (g) Notice of Default or Event of Default -- promptly upon any Senior Financial Officer of the SPV obtaining knowledge of any condition or event which constitutes a Default or an Event of Default, a written notice specifying the nature and period of existence thereof and what action the SPV is taking or proposes to take with respect thereto; (h) Accountants' Reports -- promptly upon receipt, a copy of each material report or letter delivered to the SPV by its independent public accountants in connection with any annual, quarterly or special audit of its financial statements or its financial condition; (i) Change of Accountants -- as soon as practicable, but in any event within forty-five (45) days thereof, a statement indicating any change in the SPV's regularly retained firm of independent certified public accountants, and the reason for such change; (j) Material Adverse Change -- promptly upon becoming aware thereof, written notice of any material adverse change in the business, operations, prospects, profits, Properties or condition (financial or otherwise) of the SPV, the Project, the Black River Facility or Lime, or any material default, breach, event of default or material claim under any Transaction Documents or any other material contractual obligation relating to the Project; (k) Project Notices -- promptly upon the receipt or sending thereof, each material notice, demand, report or other communication (other than those, such as invoices, which are delivered in the ordinary course of business or otherwise required to -38- be delivered pursuant to the Transaction Documents, but including, without limitation, all change orders) delivered or received by it pursuant to any Project Contract or otherwise in respect of the Project (together with copies of the same); (l) Actions, Proceedings -- promptly after the filing of any complaint with, or the initiation of any proceeding by, any Person relating to any party to the Transaction Documents (to the extent based on such Person's participation in the Project or the transactions contemplated by the Transaction Documents), the Site, the Project, the Black River Common Facilities, any of the Transaction Documents or any of the transactions contemplated by any of the Transaction Documents, a written notice thereof and in each case with a copy of all pleadings and a written statement setting forth the details of the action (if any) it is taking or proposes to take with respect to such proceedings; (m) Certain Environmental Matters -- immediately upon becoming aware thereof, written notice of, and a description of (i) (A) any condition or occurrence at, on, or arising from the Site, the Project or the Black River Common Facilities that results in any material noncompliance with any Environmental Law, or (B) any pending or threatened Environmental Claim by any Person against Lime, the SPV, or any other party to the Transaction Documents (to the extent based on such Person's participation in the Project or the transactions contemplated by the Transaction Documents), the Site, the Project or the Black River Common Facilities and (ii) all written communications with any Governmental Authority relating to an alleged violation of any Environmental Laws and all written communications with any Person relating to Environmental Claims, together with copies of any written communications or material relating to the same. All such notices shall describe in reasonable detail the nature of the claim, investigation, condition, incident, or occurrence and the SPV's response thereto. It shall also promptly provide such detailed reports of any Environmental Claims as may reasonably be requested by any such party; (n) ERISA -- promptly upon becoming aware thereof, written notice of the occurrence of any Reportable Event as defined in ERISA and of any additional act or condition arising in connection with any Pension Plan which could reasonably constitute grounds for the termination thereof by the PBGC or for the appointment by the appropriate United States district court of a trustee to administer any such Pension Plan; (o) Notice of Change in Governmental Approval -- promptly upon becoming aware thereof, written notice of any change or proposed change in, or any notice or claim of violation of, Applicable Law, or any Governmental Approval which has (or could reasonably be expected to have) a material adverse effect on its business, operations, prospects, profits, Properties, or condition (financial or otherwise) or its ability to perform its obligations under any Transaction Documents, or the installation, construction, testing, bringing into commercial operation, conveyance, ownership, leasing, use, possession, occupancy, operation, maintenance or financing of the Site, the Project or the Black River Common Facilities or on the perfection or priority of any of the Liens created pursuant to the Transaction Documents; -39- (p) Financial Reports of the Corporation -- promptly after the filing thereof with the SEC, a copy of each annual report on Form 10- K, quarterly report on Form 10-Q and proxy statement of the Corporation; and (q) Requested Information -- with reasonable promptness, such other data and information with respect to the SPV, the Project or Lime as from time to time may be requested by any Holder. Section 10.2 Officers' Certificates. Within 45 days after the end of each of its first three fiscal quarters (but in no event sooner than the delivery of the financial statements required for such fiscal quarter by Section 10.1(a)) and within 90 days after the end of each fiscal year (but in no event sooner than the delivery of the audited financial statements required for such fiscal year by Section 10.1(b)), the SPV shall deliver to each Holder a certificate of a Senior Financial Officer of the SPV, setting forth: (a) Event of Default -- a statement that the signers have reviewed the relevant terms hereof and have made, or caused to be made, under their supervision, a review of the transactions and conditions of the SPV from the beginning of the accounting period covered by the financial statements being delivered therewith to the date of the certificate and that such review shall not have disclosed the existence during such period of any condition or event that constitutes a Default or an Event of Default or, if any such condition or event existed or exists, specifying the nature and period of existence thereof and what action the SPV shall have taken or shall propose to take with respect thereto; and (b) Financial Statements -- a statement that the signers have reviewed the relevant financial statements and that such financial statements have been prepared in conformity with GAAP and, in conjunction with the notes thereto, give a true and fair view of the financial condition of the SPV as at the end of such period and of the results of their operations during such period. Section 10.3 Accountants' Certificates. Each set of annual financial statements delivered pursuant to Section 10.1(b) shall be accompanied by a certificate of the accountants who report on such financial statements, stating that they have reviewed this Agreement and stating further, whether, in making their audit, such accountants have become aware of any condition or event that then constitutes a Default or an Event of Default, and, if such accountants are aware that any such condition or event then exists, specifying the nature and period of existence thereof. Section 10.4 Annual Independent Engineer's Report. Promptly upon the same becoming available, the SPV shall deliver to each Holder a report of the Independent Engineer (which the SPV covenants to obtain at its own cost and expense), dated a date not later than 90 days following the end of each fiscal year of the SPV, stating that (a) the Independent Engineer has read the provisions of the Transaction Documents relating to the operation, maintenance, repair and improvement of the Project, and (b) on the basis of an annual inspection of the Project, the maintenance and repair logs and records with respect thereto and the Site, the Project and the Black River Common Facilities completed within 30 days of the date of such report, no knowledge was obtained by the Independent Engineer of any event or circumstance -40- which constitutes a material failure to adhere to such provisions or, if such knowledge was obtained, specifying the nature of any such event or circumstance and any proposed remedial action. Section 10.5 Annual Opinion of Counsel. The SPV shall, at its sole cost and expense, within 90 days of the end of each fiscal year, furnish to the Collateral Agent an opinion of counsel to the SPV (which counsel shall be reasonably satisfactory to the Holders) identifying all filings, recordings, refilings and rerecordings (including the filing of UCC continuation statements), if any, necessary or advisable (as of the date of such opinion or at any date in the twelve-month period following such date) to establish, reestablish, perfect, preserve, protect and continue the Liens of the Collateral Agent in and to the Collateral. Section 10.6 Inspection. Upon not less than three(3) Business Days' notice to the SPV, you, your authorized representatives and the Independent Engineer shall have the right, subject to the SPV's reasonable safety and security procedures, during normal business hours: (i) to inspect the Project and the Site at such Person's sole cost and expense; and (ii) to inspect the operating logs, books and records of the SPV relating to the Project, and to make copies thereof and extracts therefrom (other than copies of and extracts from proprietary data and information), and to discuss the SPV's affairs, finances and accounts with its executive officers and the SPV's independent public accountants (and, by this provision, the SPV authorizes and directs the SPV's accountants to discuss such matters with any such Person), all at such reasonable times and as often as may be reasonably required; provided, however, that if a Default or Event of Default shall have occurred and be continuing, the SPV shall be responsible for the cost and expense incurred in respect of any such inspection made by any such Person pursuant to this Section 10.6. Neither the Collateral Agent nor you shall have any duty whatsoever to make any inspection or inquiry referred to in this Section 10.6 and shall not incur any liability or obligation by reason of not making such inspection or inquiry. You shall keep confidential any information with respect of the SPV or the Project which the SPV indicates in writing at the time such information is supplied is to be treated confidentially in compliance with Section 17.5 of this Agreement. SECTION 11 CASUALTY; CONDEMNATION. Section 11.1 Notice of Damage or Loss. If any part or portion of the Site, the Project or the Black River Common Facilities suffers any Loss Event, the SPV shall promptly, and in any case within 5 Business Days after such event, so notify the Holders, the Independent Engineer and the Collateral Agent. Section 11.2 Repair. Upon the occurrence of any Loss Event (other than a Total Loss), the SPV shall cause the affected Property to be repaired or replaced to the condition required by Section 9.6 as soon as practicable but in any event within 180 days from the date of the occurrence of such Loss Event; provided, however, that if, within such 180- day period the SPV shall have commenced the repair or replacement of such Property and shall be diligently pursuing such repair or replacement, but is unable to complete the same within such 180-day period (in which case the SPV shall so notify the Holders and the Collateral Agent), then the time for repair or replacement shall be extended for such longer period as shall be determined by the Independent Engineer to be necessary to complete such repair or replacement, provided further that if the SPV shall fail to repair or replace the Project within such period (including any -41- extension thereof as provided above), such failure shall be deemed an Event of Default hereunder. Section 11.3 Application of Payments on Total Loss. Payments received by the Collateral Agent or the SPV from any Governmental Authority, insurer or other Person in respect of a Total Loss shall be paid to the Disbursement Agent for deposit into the Windup Account. Section 11.4 Application of Payments Relating to a Partial Loss. Payments received by the Collateral Agent or by the SPV from any Governmental Authority, insurer or other Person with respect to any Partial Loss, shall be paid to the Disbursement Agent for deposit into the Casualty Account. SECTION 12 INSURANCE. Section 12.1 Insurance by the SPV. (a) The SPV shall procure at its own expense and maintain in full force and effect at all times on and after the Initial Funding Date and continuing throughout the term of this Agreement with responsible insurance companies authorized to do business in the Commonwealth of Kentucky with a Best Insurance Reports rating of "A- " or better and a financial size category of "IX" or higher (and other insurance companies acceptable to the Collateral Agent), with limits and coverage provisions sufficient to satisfy the requirements set forth in each of the Project Contracts, but in no event less than the limits and coverage provisions set forth below: (i) Workers' Compensation Insurance. At all times that the SPV has employees, workers' compensation insurance as required by applicable state laws including employer's liability insurance with a $1,000,000 minimum limit per accident, the policies with respect to which shall include Longshoremen's and Harbor Workers' Compensation Act insurance. (ii) General Liability Insurance. Liability insurance on an occurrence basis against claims for personal injury (including bodily injury and death) and property damage. Such insurance shall provide coverage for products-completed operations, blanket contractual, explosion, collapse and underground coverage, broad form property damage, personal injury insurance, and hostile fire liability with a $1,000,000 minimum limit per occurrence for combined bodily injury and property damage, provided that policy aggregates, if any, shall apply separately to claims occurring with respect to the Project. A maximum self-insured retention or deductible of $250,000 shall be allowed. (iii) Automobile Liability Insurance. Automobile liability insurance against claims for personal injury (including bodily injury and death) and property damage covering all owned, leased, non-owned and hired motor vehicles, including loading and unloading, with a $1,000,000 minimum limit per occurrence for combined bodily injury and property damage and containing appropriate no-fault insurance provisions wherever applicable. A maximum self-insured retention or deductible of $100,000 shall be allowed. -42- (iv) Excess Insurance. Excess liability insurance on an occurrence basis covering claims in excess of the underlying insurance described in the foregoing subsections (i), (ii) and (iii), with a $19,000,000 minimum limit per occurrence, provided that aggregate limits of liability, if any, shall apply separately to claims occurring with respect to the Project. The amounts of insurance required in the foregoing subsections (i), (ii), (iii) and this subsection (iv) may be satisfied by the SPV purchasing coverage in the amounts specified or by any combination thereof, so long as the total amount of insurance procured meets the requirements specified above. (v) Builder's Risk (Property) Insurance. A builder's risk or property insurance policy on an "all risk" basis, including coverage against damage or loss caused by earth movement (including but not limited to earthquake, landslide, subsidence and volcanic eruption) and flood. Such insurance shall be on a completed value form, with no periodic reporting requirements, insuring the Construction Costs and providing coverage for (a) insuring the buildings, structures, machinery, equipment (including electrical equipment), facilities, fixtures, supplies, fuel and other properties constituting a part of the Project, (b) off-site storage with sub-limits sufficient to insure the full replacement value of any property or equipment not stored at the Project, (c) removal of debris with a sub-limit not less than 10 percent of the Construction Costs, (d) increased cost of construction and loss to undamaged property as the result of enforcement of building laws or ordinances with a sub-limit not less than 20 percent of the Construction Costs, (e) extra expenses in an amount not less than $2,000,000 and (f) foundations and other property below the surface of the ground. Such property damage insurance policy may also provide coverage for property damage and business interruption resulting from damage or loss to the Project or the Black River Facility caused by earth movement (including, but not limited to, earthquake, landslide, subsidence and volcanic eruption) and flood. The deductible for all such insurance shall not exceed $500,000 for earth movement and flood coverage and $50,000 for all other coverage. The policy is to insure electrical transmission lines and equipment to the extent the SPV has an insurable interest. The ocean/air transit policy (which may be written separately) shall be on a "warehouse to warehouse" basis. The builder's risk or property coverage shall not contain an exclusion for freezing, mechanical breakdown, loss or damage covered under any guaranty or warranty, or resultant damage caused by faulty workmanship, design or materials. Coverage required by this clause (v) shall remain in effect until replaced by physical damage insurance as specified in Section 12.1(b)(i). The earth movement and flood coverages may be insured with a sub-limit not less than 80% of the "full insurable value" of the Project plus 80% of the Operating Expense amount required by Section 12.1(b)(ii) below, but in no case less than $50,000,000. (vi) Delayed Opening Insurance. Delayed opening coverage in an amount equal to 12 months projected continuing expenses plus debt service of the SPV caused by damage or loss to any property required to be covered by clause (v) above. The policy providing such coverage shall have a deductible of not greater than 10 days or, in the case of flood, a deductible of not greater than -43- $500,000. Coverage shall remain in effect until replaced by business interruption insurance as specified in Section 12.1(b)(ii). As respects the foregoing clauses (v) and (vi), subrogation is waived in favor of the SPV, the Collateral Agent, any Holder and their respective officers, agents and employees. The policy(s) are to be endorsed to provide either an agreed amount clause or waiver of coinsurance and include as insured all contractors and the SPV. (b) After Substantial Completion. On or prior to the Substantial Completion Date, the SPV shall procure at its own expense and maintain in full force and effect, with responsible insurance companies authorized to do business in the Commonwealth of Kentucky with a Best Insurance Reports rating of "A-" or better and a financial size category of "IX" or higher (and other insurance companies acceptable to the Collateral Agent), with limits and coverage provisions sufficient to satisfy the requirements set forth in each of the Project Contracts, but in no event less than the limits and coverage provisions set forth below: (i) Physical Damage Insurance. Property damage insurance on an "all risk" basis, including coverage against damage or loss caused by earth movement (including but not limited to earthquake, landslide, subsidence and volcanic eruption) and flood and providing coverage for (1) the Project in a minimum aggregate amount equal to the "full insurable value" of the Project, (2) transit, including ocean marine coverage if applicable, with sub-limits sufficient to insure the full replacement value of all property or equipment removed from the Project and insurance coverage while located off the Project, (3) electrical transmission lines along with related equipment including transformers, electric motors and electrical equipment, to the extent the SPV has an insurable interest, (4) foundations and other property below the surface of the ground, (5) soft costs defined as attorneys' fees, engineering and other consulting costs, and permit fees that may be incurred due to damage to the premises in a minimum amount of $1,000,000, and (6) extra expenses in an amount not less than $2,000,000. Such property damage insurance policy may also provide coverage for property damage and business interruption resulting from damage or loss to the Project and the Black River Facility caused by earth movement (including, but not limited to, earthquake, landslide, subsidence and volcanic eruption) and flood. For purposes of this Section 12(b)(i), "full insurable value" shall mean the full replacement value of the Project, including any improvements, equipment, fuel and supplies, without deduction for physical depreciation and/or obsolescence. For all such insurance the deductible shall not exceed $50,000, except for the earth movement and flood coverage which shall have a deductible not exceeding $500,000. Such insurance shall include an agreed amount clause or waiver of coinsurance and provide for increased cost of construction, debris removal, and loss to undamaged property as the result of enforcement of building laws or ordinances with sub-limits not less than 25% of the "full insurable value" of the Project. The earth movement and flood coverages may be insured with a sub-limit not less than 80% of the "full insurable value" of the Project plus 80% of the Operating Expense amount required by Section 12.1(b)(ii) below, but in no case -44- less than $50,000,000. The amount of physical damage and business interruption insurance with regard to impact damage to the docks located on the Easement Parcel shall be no less than $2,000,000. (ii) Business Interruption Insurance. Business interruption insurance covering continuing normal operating expenses of the SPV including payroll and debt service ("Operating Expense") for a period of 12 months, arising from damage or loss insured by Section 12.1(b)(i) above. The policy providing such coverage shall have a maximum deductible of not greater than 10 days or, in the case of flood, a deductible not greater than $500,000. Such insurance shall also insure that portion of fixed expenses and debt service not earned arising from an insured loss or occurrence at the OPCO Gavin Power Station and the underground property at the Black River Facility for a period of four months. Such insurance shall include either an agreed amount clause or waiver of coinsurance. (iii) Wharfingers Liability Insurance. Wharfingers liability insurance covering liability arising out of the damage to or destruction of barges and vessels owned by others and the removal of wrecks with a $5,000,000 minimum limit per occurrence. (c) Endorsements. All policies of liability, physical damage and business interruption insurance to be maintained by the SPV shall provide for waivers of subrogation in favor of the Collateral Agent and the Holders and their respective officers and employees (and such other Persons as may be required by the Project Contracts). All policies of liability insurance required to be maintained by the SPV under this Section 12.1 shall be endorsed as follows: (i) To provide a severability of interest or cross liability clause; (ii) That the insurance shall be primary and not excess to or contributing with any insurance or self-insurance maintained by the Collateral Agent or the Holders; and (iii) To name the Collateral Agent and the Holders and their respective officers and employees (and such other Persons as may be required by the Project Contracts) as additional insureds. (d) Waiver of Subrogation. The SPV hereby waives any and every claim for recovery from the Holders for any and all loss or damage covered by any of the insurance policies to be maintained under this Agreement to the extent that such loss or damage is recovered under any such policy. Inasmuch as the foregoing waiver will preclude the assignment of any such claim to the extent of such recovery, by subrogation (or otherwise), to an insurance company (or other Person), the SPV shall give written notice of the terms of such waiver to each insurance company which has issued, or which may issue in the future, any such policy of insurance (if such notice is required by the insurance policy) and shall cause each such insurance policy to be properly endorsed by the issuer thereof to, or to otherwise contain one or more provisions that, prevent the invalidation of the insurance coverage provided thereby by reason of such waiver. -45- Section 12.2 Insurance By The Operator. The SPV shall cause the Operator to procure at its own expense and to maintain in full force and effect at all times that the Project is being operated, with responsible insurance companies authorized to do business in the Commonwealth of Kentucky with a Best Insurance Reports rating of "A-" or better and a financial size category of "IX" or higher (except for other companies acceptable to the Collateral Agent), with limits and coverage provisions sufficient to satisfy the requirements set forth in each of the Project Contracts, but in no event less than the limits and coverage provisions set forth below; however, the requirements of this Section 12.2 can also be satisfied by naming the Operator as an insured on the insurance policies procured by the SPV pursuant to the provisions of Section 12.1. (a) General Liability Insurance. Liability insurance on an occurrence basis against claims for personal injury (including bodily injury and death) and property damage. Such insurance shall provide coverage for products-completed operations, blanket contractual, explosion, collapse and underground coverage, broad form property damage, personal injury insurance, and hostile fire liability with a $1,000,000 minimum limit per occurrence for combined bodily injury and property damage, provided that policy aggregates, if any, shall apply separately to claims occurring with respect to the Project. A maximum self-insured retention or deductible of $250,000 shall be allowed. (b) Automobile Liability Insurance. Automobile liability insurance against claims for personal injury (including bodily injury and death) or property damage arising out of the use of all owned, leased, non-owned and hired motor vehicles, including loading and unloading, with a $1,000,000 minimum limit per occurrence for combined bodily injury and property damage and containing appropriate no- fault insurance provisions where applicable. A maximum self-insured retention or deductible of $100,000 shall be allowed. (c) Workers' Compensation Insurance. Workers' compensation insurance as required by applicable state laws, including employer's liability insurance for all employees of the Operator with a $1,000,000 minimum limit per accident, the policies with respect to which shall include Longshoremen's and Harborworkers' Compensation Act insurance. (d) Excess Insurance. Excess liability insurance on an occurrence basis covering claims in excess of the underlying insurance described in the foregoing subsections (a), (b) and (c), with a $19,000,000 minimum limit per occurrence, provided that aggregate limits of liability, if any, shall apply separately to claims occurring with respect to the Project. The amounts of insurance required in the foregoing subsections (a), (b), (c) and this subsection (d) may be satisfied by the Operator purchasing coverage in the amounts specified or by any combination thereof, so long as the total amount of insurance meets the requirements specified above. (e) Endorsements. All policies of liability insurance to be maintained by the Operator shall provide for waivers of subrogation in favor of the SPV, the Collateral Agent, the Holders and their respective officers and employees (and such other Persons as may be required by the Project Contracts). These policies shall also be endorsed as follows: -46- (i) To provide a severability of interests or cross liability clause; (ii) That the insurance shall be primary and not excess to or contributing with any insurance or self-insurance maintained by the SPV, the Collateral Agent or the Holders; and (iii) To name the SPV, the Collateral Agent, the Holders and their respective officers and agents (and such other Persons as may be required by the Project Contracts) as additional insureds. Section 12.3 Amendment of Requirements. The Collateral Agent may at any time amend the requirements and approved insurance companies of this Section 12 due to (i) new information not known by the Collateral Agent on the Initial Funding Date or (ii) changed circumstances after the Initial Funding Date which in the reasonable judgment of the Collateral Agent either renders such coverage materially inadequate or materially reduces the financial ability of the approved insurance companies to pay claims. Section 12.4 Application of Proceeds. All insurance proceeds recovered by the Collateral Agent as aforesaid on account of a Loss Event shall be applied pursuant to Sections 11.3 and 11.4 of this Agreement. If the aggregate damage or loss to (i) the Black River Facility and (ii) the Project caused by an event of earth movement and/or flood is in excess of the collectible insurance available to the SPV, the proceeds of the property damage insurance paid out in respect of such event of earth movement and/or flood shall be allocated proportionately to the Owner (or its assigns) and to the SPV in the amounts which reflect the percentage of the total loss attributable to the Black River Facility and the Project, respectively. If the insurance policies providing coverage for earth movement and flood also insure facilities other than the Project and the Black River Facility, then the proceeds of the collectible property damage insurance paid out in the event of damage or loss due to earth movement or flood shall be allocated to the Project and the Black River Facility up to 100% of their loss or damage before any proceeds are allocated to the other insured facilities. Section 12.5 Conditions. (a) The SPV shall promptly notify the Collateral Agent of any loss covered by any insurance maintained pursuant to Section 12.1 or Section 12.2. (b) All policies of insurance required to be maintained pursuant to Sections 12.1(a)(v) and (vi), (b)(i) and (ii), shall provide that the proceeds of such policies shall be payable to the Collateral Agent pursuant to a standard first mortgage endorsement substantially equivalent to the lender loss payable endorsement 438BFU, without contribution; provided that if the proceeds thereof are less than $250,000, such proceeds shall be paid to the SPV. The Collateral Agent shall have the right to join the SPV in adjusting any loss in excess of $250,000. All policies (other than in respect to liability or workers' compensation insurance) shall insure the interests of the Holders regardless of any breach or violation by the SPV of warranties, declarations or conditions contained in such policies, any action or inaction of the SPV or others, or any foreclosure relating to the Project or any change in ownership of all or any portion of the Project. All policies, other than workers' compensation, shall waive any right of subrogation of the insurers as -47- against the SPV, the Holders or the Operator, and shall waive any right of the insurers to any set off or counterclaim or any other deduction (the foregoing may be accomplished by the use of the lender loss payable endorsement required above). (c) All policies of insurance required to be maintained pursuant to this Section 12 shall be endorsed so that if at any time should they be cancelled, or coverage be reduced which affects the interests of the Holders, such cancellation or reduction shall not be effective as to the Holders for 60 days, except for non-payment of premium which shall be for 10 days, after receipt by the Collateral Agent of written notice from such insurer of such cancellation or reduction. Section 12.6 Evidence of Insurance. On the Initial Funding Date and on an annual basis at least 10 days prior to each policy anniversary, the SPV shall furnish the Collateral Agent with approved certification of all required insurance. Such certification shall be executed by each insurer or by an authorized representative of each insurer where it is not practical for such insurer to execute the certificate itself. Such certification shall identify underwriters, the type of insurance, the insurance limits and the policy term and shall specifically list the special provisions enumerated for such insurance required by this Section 12. Upon request, the SPV will promptly furnish the Collateral Agent with copies of all insurance policies, binders and cover notes or other evidence of such insurance relating to the Project. Section 12.7 Insurance Report. Concurrently with the furnishing of the certification referred to in Section 12.6 and at least 10 days prior to the expiration of any insurance policy required of the SPV, the SPV shall furnish the Collateral Agent with a certificate signed by a Responsible Officer of the SPV and by a Responsible Officer of the Insurance Consultant stating that in the opinion of such Responsible Officer, the insurance then carried or to be renewed is in accordance with the each terms of this Section 12. Section 12.8 Failure to Maintain Insurance. In the event the SPV fails, or fails to cause the Operator, to take out or maintain the full insurance coverage required by this Section 12, the Collateral Agent, upon 30 days' prior notice (unless the aforementioned insurance would lapse within such period, in which event notice should be given as soon as reasonably possible) to the SPV of any such failure, may (but shall not be obligated to) take out the required policies of insurance and pay the premiums on the same. All amounts so advanced in respect thereof by the Collateral Agent shall become an additional obligation of the SPV to the Collateral Agent, and the SPV shall forthwith pay such amounts to the Collateral Agent, together with interest thereon at the Late Payment Rate from the date so advanced. Section 12.9 No Duty of the Collateral Agent to Verify. No provision of this Section 12 or any other provision of this Agreement shall impose on the Collateral Agent any duty or obligation to verify the existence or adequacy of the insurance coverage maintained by the SPV, nor shall the Collateral Agent be responsible for any representations or warranties made by or on behalf of the SPV to any insurance company or underwriter. Section 12.10 Maintenance of Insurance. The SPV shall at all times maintain the insurance coverage required under the terms of the Project Contracts. -48- Section 12.11 Insurance after the Initial Funding Date. The SPV shall procure not later than 20 days following the Initial Funding Date the following required insurance coverages: (a) $25,000,000 excess of $25,000,000 of physical damage and business interruption coverage due to earth movement coverage as required by Sections 12.1(a)(v), (a)(vi), (b)(i) and (b)(ii); and (b) $18,000,000 excess of $32,000,000 of physical damage and business interruption coverage due to flood as required by Sections 12.1(a)(v), (a)(vi), (b)(i) and (b)(ii). SECTION 13 EVENTS OF DEFAULTS--REMEDIES. Section 13.1 Nature of Events. An "Event of Default" shall exist if any of the following occurs and is continuing: (a) Principal, Interest or Make-Whole Amount Payments -- the SPV shall fail to make or cause to be made any payment of principal of, or Make-Whole Amount, if any, on, any Note on or before the date such payment is due or any payment of interest on any Notes on or before five (5) Business Days after the date such payment becomes due; (b) Construction Covenant Defaults -- prior to the Final Completion Date the SPV shall fail to comply with any of the provisions of Sections 7.1, 7.2, 7.3, 7.4, 7.5, 7.7 or 7.9 hereof; (c) Other Covenant Defaults -- if at any time the SPV shall fail (i) to comply with any of the provisions of Sections 9.1, 9.4(b), 9.11, 9.13, 9.14, 9.15, 9.16, 9.18, 9.19, 9.21, 9.22, 9.23, 9.24 or 9.25 hereof, Section 10.1(g) or Section 12 hereof or (ii) to comply with any other provision of this Agreement or any other Transaction Document and such failure shall continue for more than thirty (30) days; or, if at any time Lime, as Owner under the MCFA, (i) shall fail to make any Capacity Payment or Tolling Payment within 5 Business Days after the date any such payment is due, (ii) shall default in the performance of any of its obligations under Article 2 of the MCFA and such default shall remain uncured for 10 days thereafter or (iii) shall violate Section 2.8 of the MCFA; (d) Warranties or Representations -- any warranty or representation made by or on behalf of the SPV contained in this Agreement, in any other Transaction Document, or in any certificate furnished in compliance with or in reference to any of the foregoing, or any warranty or representation made by Lime in any Transaction Document shall have been false or misleading in any material respect when made; -49- (e) Project Contracts -- (i) any party to a Project Contract shall fail to comply with any provision thereof, and such failure shall continue for more than thirty (30) days after such failure shall first become known to any such party (whether or not such failure constitutes a default under such Project Contract at the time it first became known to such Party); or a default or event of default (as therein defined) shall have occurred and be continuing under any Project Contract and all applicable cure periods related thereto shall have expired, (ii) any material obligation of any party to any Project Contract shall be unenforceable, or any party thereto shall claim that any such obligation is unenforceable or shall refuse to perform voluntarily any such obligation, or (iii) any Project Contract shall be terminated for any reason, or any party thereto shall claim that any such Project Contract is terminated, other than in accordance with its terms upon full performance of all obligations therein by the parties thereto, in each case where the effect of such occurrence could reasonably be expected to have a material adverse effect upon the Project; (f) Cessation of Construction -- prior to completion of the Project, work on construction of the Project shall cease for a period of thirty (30) consecutive days or more; (g) Loss, Theft, Destruction -- any loss, theft, damage or destruction of a material portion of the tangible Collateral which is not covered by insurance; (h) Governmental Approvals -- (i) any material Governmental Approval shall be lost, terminated, revoked or otherwise not be in effect, or shall suffer a materially adverse amendment, or (ii) any proceeding or other action shall be commenced by any Person seeking any termination, revocation, forfeiture or adverse amendment of any Governmental Approval; (i) Undischarged Final Judgments -- final judgment or judgments for the payment of money aggregating in excess of Two Million Dollars ($2,000,000) is or are outstanding against the SPV or the Project and any one of such judgments shall have been outstanding for more than thirty (30) days from the date of its entry and shall not have been discharged in full; (j) Unenforceability of Liens -- any Lien granted to the Collateral Agent pursuant to any of the Transaction Documents shall become invalid, void, unenforceable or unperfected or shall cease to have the priority it enjoyed on the Initial Funding Date (subject to any inchoate liens for taxes not yet due and payable), or any Person shall have commenced any proceeding or taken other action to render any such Lien invalid, or to avoid any such Lien or to render any such Lien unenforceable or unperfected or to challenge the priority of such Lien; -50- (k) OPCO Agreement -- (i) the OPCO Agreement (or any material portion thereof) shall be or become invalid, unenforceable or ineffective in any material respect, or OPCO shall disaffirm, repudiate or terminate in whole or in any material part its obligations under the OPCO Agreement; or (ii) OPCO shall have given notice of an OPCO Agreement default to the Collateral Agent pursuant to Section 4(a) of the OPCO Consent; (l) SPV Security Agreement -- an "Event of Default" shall occur under or within the meaning of the SPV Security Agreement; (m) Project Mortgage -- an "Event of Default" shall occur under or within the meaning of the Project Mortgage; (n) Lime Agreements -- an "Event of Default" shall occur under or within the meaning of the Lime Security Agreement or the Lime Pledge Agreement; (o) Partner Security Agreement -- an "Event of Default" shall occur under or within the meaning of the Partner Security Agreement; (p) Ground Lease -- the Ground Lease (or any material portion thereof) shall be or become invalid, unenforceable or ineffective in any material respect or Lime shall disaffirm, repudiate or terminate in any material respect its obligations under the Ground Lease; (q) Insolvency, Bankruptcy Proceedings -- the SPV shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar Applicable Law now or hereafter in effect, or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, or shall consent to any such relief or the appointment of or taking of possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they became due within the meaning of the Bankruptcy Code or shall admit in writing its failure to pay its debts as they become due or shall take any action to authorize any of the foregoing; or any involuntary case or other proceeding shall be commenced against the SPV seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar Applicable Law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official or agency of it or any substantial part of its property, and such involuntary case or other proceeding shall remain uncontested for a period of 90 days or undismissed for a period of 90 days; (r) Dravo-Related Default -- a Dravo-Related Event of Default; (s) Black River Facility -- Lime shall have abandoned the Black River Facility (not including a sale thereof to an Acceptable Transferee in accordance with Section 1.10(b) or Section 5.6(c) of the MCFA), or the SPV shall have abandoned the Project, in each case, for a period of 120 days; -51- (t) Black River Common Facility -- an event or condition (unless due to Uncontrollable Forces) affecting the Black River Common Facilities shall occur which shall have, or could reasonably be expected to have, a material adverse effect on the operation of the Project, and either (i) the operator of the Black River Processing Complex shall not have commenced remedial action, within 60 days after the occurrence of such event or condition, designed to cure such event or condition in such manner as shall be necessary to cause such adverse effect to cease to be material (or to cause such expectation to cease to be reasonable) or (ii) such remedial action shall not have been completed within 90 days after the occurrence of such event or condition, if reasonably susceptible to cure within such period, or, if not reasonably susceptible to cure within such period, such operator shall not be diligently pursuing the steps necessary to effect such cure; or (u) Change of Control -- The Partners shall fail for any reason to own one hundred percent (100%) of the general and limited partnership interests in the SPV or Lime shall fail to own one hundred percent (100%) of the capital stock of the SPV Limited Partner, and one hundred percent (100%) of the Class A Common Stock of SPV General Partner. Section 13.2 Acceleration of Notes. (a) Acceleration. (i) If an Event of Default specified in clause (q) of Section 13.1 shall exist, all of the Notes shall automatically become immediately due and payable together with interest accrued thereon and, to the extent permitted by law, the Make- Whole Amount at such time with respect to the principal amount of such Notes, without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived; (ii) If an Event of Default (other than that specified in clause (q) of Section 13.1) shall exist, the Required Holders then outstanding may declare the entire principal of, all interest accrued and Make-Whole Amount, if any, on, and all other amounts due in respect of, all the Notes then outstanding to be, and such Notes shall thereupon become, forthwith due and payable, without any presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the SPV, and the SPV will forthwith pay to the Holders the entire principal of, all interest accrued on, and all other amounts due in respect of, such Notes and, to the extent permitted by law, the Make-Whole Amount, if any, at such time with respect to such principal amount of Notes. (b) Valuable Rights. The SPV acknowledges and agrees that the right of each Holder to maintain its investment in the Notes free from repayment by the SPV (except as herein specifically provided for) is a valuable right, and that the provision for payment of a Make-Whole Amount by the SPV under certain circumstances if the Notes are paid or prepaid, or are accelerated as a result of an Event of Default, is intended to provide compensation for the deprivation of such right under such circumstances. -52- (c) Expenses. If the SPV shall fail to pay when due any principal of, or Make-Whole Amount or interest on, any Note, or shall fail to comply with any other provision of this Agreement or any of the other Financing Documents, the SPV shall pay to either or both of the Collateral Agent or the Holders, to the extent permitted by law, such further amounts as shall be sufficient to cover the costs and expenses, including, but not limited to, reasonable attorneys' fees, incurred by the Collateral Agent and such Holders in collecting any sums due on the Notes or such obligations or in otherwise assessing, analyzing, evaluating, protecting, asserting, defending or enforcing any of the rights and remedies that are or may be available to the Collateral Agent or any such Holder. Section 13.3 Remedies. If an Event of Default exists, without limitation of any other rights and remedies which may be available to any Holder, the Required Holders may, in accordance with the Collateral Agency Agreement, cause the Collateral Agent to exercise any and all remedies available to it under the SPV Security Agreement, the Project Mortgage or any of the other Transaction Documents. Each Holder may take all steps necessary or advisable to protect and enforce its rights hereunder, whether by action, suit or proceeding at law or in equity, for the specific performance of any covenant, condition or agreement contained herein, or in aid of the execution of any power herein granted, or for the enforcement of any other appropriate legal or equitable remedy or otherwise as such Holder shall deem necessary or advisable. No right or remedy hereunder shall be exclusive of any other right, power or remedy, but shall be cumulative and in addition to any other right or remedy hereunder or now or hereafter existing by law or in equity and the exercise by a party hereto of any one or more of such rights, power or remedies shall not preclude the simultaneous exercise of any or all of such other rights, powers or remedies. Any failure to insist upon the strict performance of any provision hereof or to exercise any option, right, power or remedy contained herein shall not constitute a waiver or relinquishment thereof for the future. SECTION 14 INTERPRETATION OF THIS AGREEMENT Section 14.1 Terms Defined. As used in this Agreement, the capitalized terms shall have the respective meanings set forth in Annex A to this Agreement and the rules of usage set forth in said Annex A shall apply hereto. Section 14.2 Directly or Indirectly. Where any provision in this Agreement or the other Financing Documents prohibits a Person from taking any action, such provision shall be applicable whether such action is taken directly or indirectly by such Person. Section 14.3 Governing Law; Consent to Jurisdiction. (a) General. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING ALL OTHER CHOICE-OF-LAW AND CONFLICTS-OF-LAW RULES. -53- (b) Consent to Jurisdiction. ANY SUIT, ACTION OR PROCEEDING, WHETHER AT LAW OR IN EQUITY, RELATING IN ANY WAY TO THIS AGREEMENT OR THE NOTES MAY BE BROUGHT AND ENFORCED IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK; AND THE SPV IRREVOCABLY CONSENTS AND SUBMITS TO THE JURISDICTION OF EACH SUCH COURT IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING. THE SPV FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, RETURN RECEIPT REQUESTED, TO THE SPV AT ITS ADDRESS SET FORTH BELOW. THE FOREGOING SHALL NOT LIMIT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW OR TO BRING ANY ACTION OR PROCEEDING, OR TO OBTAIN EXECUTION OF ANY JUDGMENT, IN ANY OTHER JURISDICTION. THE SPV HEREBY IRREVOCABLY WAIVES ANY OPTION OR OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH ACTION OR PROCEEDING ARISING UNDER OR RELATING TO THIS AGREEMENT OR THE NOTES IN ANY COURT LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK, AND HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT A COURT LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK IS NOT A CONVENIENT FORUM FOR ANY SUCH ACTION OR PROCEEDING. Section 14.4 Independent Construction. Each covenant contained herein shall be construed (absent an express contrary provision herein) as being independent of each other covenant contained herein, and compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with one or more other covenants. Section 14.5 Certain Disclaimers by the Purchaser. (a) This Agreement is made for the sole benefit of the SPV and you (and your successors and permitted assigns), and no other Person shall have any benefits, rights or remedies under or by virtue of this Agreement. You shall not be liable (i) to any contractors, subcontractors or any Persons providing labor or services or supplying materials in respect of the Project or (ii) for or in respect of any claims, debts or demands of any such contractors, subcontractors or other Persons accruing against the SPV or Lime. Neither the SPV nor Lime shall be deemed to be your agent for any purpose. You shall not be deemed to be a partner or joint venturer with or fiduciary of the SPV or Lime as a consequence of this Agreement and the other Transaction Documents. You shall not be deemed to be in privity of contract with any of the contractors providing labor, services or materials to the Project. This Agreement shall not be deemed to create any third-party beneficiary rights in any Person not a party to this Agreement. (b) You shall not have any liability, obligation or responsibility whatsoever with respect to the construction of the Project. Any inspections of construction of the Project to be made pursuant to this Agreement are for the purpose of administering the disbursement of the Note proceeds or determining the compliance with the covenants and agreements contained herein; neither the SPV nor Lime shall be entitled to rely upon the same with respect to the quality, adequacy or suitability of the materials or -54- workmanship, conformity with the Plans and Specifications, state of completion or otherwise. Lime, pursuant to the terms of the Construction Management Agreement, shall be bound to make its own inspections and determinations, on behalf of itself and the SPV, as to the conformity of the construction of the Project with the Plans and Specifications, and shall notify you promptly upon discovering any non-conformance. (c) By accepting or approving anything required to be done, observed or performed pursuant to this Agreement or any other Transaction Document, including any certificate or other submission required pursuant hereto, you shall not be deemed to have warranted or represented to any party as to the sufficiency, effectiveness or legality of the same. (d) You do not assume any duty to the SPV or Lime to select, review, supervise, evaluate or inform as to the performance of any Person in respect of the Project. You do not owe any duty of care to protect the SPV or Lime in respect of negligent, faulty, inadequate or defective building or construction. SECTION 15 PAYMENT OF EXPENSES. Section 15.1 Transaction Expenses. The SPV shall pay all of your out-of-pocket expenses, disbursements and costs, incurred in connection with the negotiation, preparation, execution and delivery of the Transaction Documents and the consummation of the transactions provided for therein, including, without limitation those set out in clauses (a) through (f) below ("Transaction Expenses"): (a) the fees and disbursements of Hebb & Gitlin, your special counsel, Wyatt, Tarrant & Combs, your special local counsel, and Richards, Layton & Finger, counsel to the Collateral Agent and the Disbursement Agent; (b) the fees and expenses of the Collateral Agent and the Disbursement Agent; (c) the fees and expenses of the Environmental Consultant; (d) the fees and expenses of the Insurance Consultant; (e) the fees and expenses of the Independent Engineer; and (f) all recording fees and filing fees charges and expenses and the fees and premiums in respect of title insurance. Such payments shall be made on the Initial Funding Date and on the Conversion Date. Section 15.2 Continuing Expense Obligations. (a) In the event that the transactions contemplated to occur on the Initial Funding Date or the Conversion Date shall fail to occur, the SPV will, or will cause Lime to, pay all Transaction Expenses; provided, however, that if such failure is a result of a breach by any you hereunder you shall be responsible for your own fees, expenses and disbursements. -55- (b) The SPV will pay, in addition to all payments due with respect to the Notes (and subject to receipt of reasonably detailed statements), (i) the reasonable ongoing fees, expenses, disbursements and costs (including legal fees and expenses) of or incurred by the Collateral Agent, the Disbursement Agent, the Insurance Consultant, the Environmental Consultant, the Independent Engineer, the Title Company and the Holders incurred pursuant to or in connection with the Transaction Documents (including, without limitation, the fees and expenses of the Independent Engineer attributable to its annual review of the operations and maintenance of the Project), and (ii) all reasonable fees, expenses, disbursements and costs (including legal fees and expenses) incurred by the Collateral Agent, the Disbursement Agent, the Insurance Consultant, the Environmental Consultant, the Independent Engineer, the Title Company, and the Holders in connection with: (A) the entering into or giving or withholding of any amendment, modification, supplement, approved, waiver or consent with respect to any Transaction Document (or any agreement document or instrument related thereto or entered into in connection therewith), whether such amendment, modification, supplement, waiver or consent shall become effective or not, and all recording and filing fees, stamp taxes and other recording or filing taxes payable in connection with the recordation or filing of any such amendments, modifications, supplements, waivers and consents and in connection with any continuation statements or other documents filed to maintain and protect the rights of the parties under the Transaction Documents; (B) the exercise or evaluation by any such Person of any remedy under any Transaction Document, (C) its intervention or participation in, or institution of, any Federal or state regulatory proceeding before any state or Federal administrative or judicial tribunal, (1) at the request of the SPV, (2) at the direction of any Governmental Authority in connection with the transactions contemplated hereby or (3) when reasonably deemed by the Holders to be necessary, in each case so long as such proceeding shall arise from any of the transactions contemplated hereby; (D) any Loss Event; or (E) any instructions from or under or any interpretations required in connection with any of the Transaction Documents. SECTION 16 REGISTRATION; SUBSTITUTION OF TERM NOTES. Section 16.1 Registration of Notes. The SPV shall maintain a register for the registration and transfer of the Notes at its chief executive office set forth in Section 4.35. The name and address of each Holder, the type of Note held, each transfer thereof and the name and address of each transferee of one or more Notes shall be registered in the register. The Person in whose name any Note shall be registered shall be deemed and treated as the owner and holder thereof for all purposes hereof, and the SPV shall not be affected by any notice or knowledge to the contrary. Section 16.2 Exchange of Notes. Upon surrender of any Note at the office of the SPV, duly endorsed or accompanied by a written instrument of transfer duly executed by the registered holder of such Note or his attorney duly authorized in writing, the SPV shall execute and deliver, at the SPV's expense (except as provided below), new Notes in exchange therefor, in such denominations as may be requested by the surrendering holder (but not less than Fifty Thousand Dollars ($50,000), except as may be necessary to reflect any principal amount not evenly divisible by Fifty Thousand Dollars ($50,000)), in an aggregate principal amount equal to the unpaid principal amount of the surrendered Note. Each such new Note shall be payable to such Person as such holder may -56- request and shall be substantially in the form of the Note surrendered. Each such new Note shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Note or dated the date of the surrendered Note if no interest shall have been paid thereon. The SPV may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes. Section 16.3 Replacement of Notes. Upon receipt by the SPV of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note (which evidence shall be, in the case of an Institutional Investor, notice from such Institutional Investor of such ownership and such loss, theft, destruction or mutilation) and (a) in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it (provided that if the holder of such Note is an Institutional Investor, such holder's own agreement of indemnity shall be deemed to be satisfactory), or (b) in the case of mutilation, upon surrender and cancellation thereof, the SPV at its own expense shall execute and deliver, in lieu thereof, a new Note, dated and bearing interest from the date to which interest shall have been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or mutilated Note if no interest shall have been paid thereon. SECTION 17 MISCELLANEOUS. Section 17.1 Communications. All notices, demands, declarations, consents, directions, approvals, instructions, requests and other communications required or permitted by the terms hereof or any other Transaction Document shall be in writing and shall be given to any Participant (i) in person or (ii) by means of telecopy or other wire transmission, confirmed by same day mailing by registered or certified mail, or same day dispatch by overnight courier, in each case to the telecopy number and address provided in Annex B or to such other address as any Participant shall from time to time designate in writing to the other parties hereto in accordance with said Annex B. Any such communication shall become effective as to any Participant upon of receipt thereof by such Participant. -57- Section 17.2 General Indemnification. The SPV agrees (regardless of whether (a) any of the transactions contemplated hereby are consummated, (b) such Indemnitee shall also be indemnified as to such Expense by any other Person (except to the extent the Indemnitee has received payment from such other Person) or (c) such Expense arises or accrues prior to the date of this Agreement), to defend, indemnify and make whole each Indemnitee against, and to protect, save and keep harmless each Indemnitee from, any and all Expenses that may be imposed on, incurred by or asserted by any Person against, such Indemnitee, which Expenses are in any way attributable or relating to or arising out of (i) the Project, the Site, the MCFA, the Easement Agreement or any part thereof or interest therein; (ii) any of the Transaction Documents (or any other agreement, contract or instrument entered into in connection therewith or related thereto) or any of the transactions contemplated thereby or the exercise by any Indemnitee of remedies thereunder, and (iii) the construction, financing, acquisition, ownership, possession, use, regulation, operation, maintenance and condition of all or any part of or any interest in the Site, the Project or the Black River Common Facilities or the imposition of any Lien thereon, including, in each case, without limitation (and whether the subject of litigation or not) (but without duplication of any Construction Costs or liquidated damages which Lime is obligated to pay): (A) claims or penalties arising from any product liability, negligence, statutory liability or violation of Applicable Law or in tort (strict, absolute or otherwise), (B) Environmental Claims or other loss of or damage to any property or the environment (including, without limitation, all Expenses associated with remediation, response, removal, corrective action, financial assurance, natural resource damages and the protection of wildlife, aquatic species and vegetation, and any relevant mitigative action required under applicable Environmental Laws), or death or injury to any Person, (C) latent or other defects, whether or not discoverable, (D) the breach by Lime or the SPV of any representations or warranties, or the failure by Lime or the SPV to perform or observe any covenants or agreements, under any Transaction Document (or any other agreement, contract or instrument entered into in connection therewith or related thereto); and (E) any claim for patent, trademark or copyright infringement; provided, however, that the foregoing indemnity shall not extend to any Expense imposed on, incurred by or asserted against any Indemnitee to the extent the same (y) constitutes an Expense which such Indemnitee is expressly liable for payment of hereunder or under any other Transaction Document or (z) relates to or arises the willful misconduct or gross negligence of such Indemnitee or of its agents, officers, directors or employees. If the SPV shall obtain knowledge of any Expense indemnified against under this Section 17.2, it shall give prompt written notice thereof to the appropriate Indemnitee or Indemnitees, and if any Indemnitee shall obtain any such knowledge, such Indemnitee shall give prompt written notice thereof to the SPV, but failure of any Indemnitee to give notice shall not affect the obligations of the SPV in respect thereof. With respect to any Expense that the SPV is requested by an Indemnitee to pay by reason of this Section 17.2, such Indemnitee shall, if so requested by the SPV and prior to any payment, submit such additional information to the SPV as the SPV may reasonably request to substantiate the requested payment. In case any action, suit or proceeding shall be brought against any Indemnitee, such Indemnitee shall promptly notify the SPV of the commencement thereof (but the failure to do so shall not relieve the SPV of its obligation to indemnify such Indemnitee except to the extent that the SPV is prejudiced as a result of such failure), and the SPV, so long as no Default or Event of Default shall have then occurred and be continuing, shall be entitled, at its expense, acting through counsel reasonably acceptable to such Indemnitee, to participate in, and, to the extent -58- that the SPV desires (if the SPV has acknowledged in writing its obligations hereunder to indemnify fully such Indemnitee with respect to all such Expenses under this Section 17.2) to assume and control the defense thereof; provided, however, that the SPV shall not be entitled to assume and control the defense of any such action, suit or proceeding if and to the extent that, in the reasonable discretion of such Indemnitee, (i) such action, suit or proceeding involves the possible imposition of criminal liability on such Indemnitee, (ii) such action, suit or proceeding involves a reasonable likelihood of the imposition of civil liability on such Indemnitee which the SPV is not obligated to indemnify hereunder, (iii) such Indemnitee determines, in its reasonable discretion, that it may raise a defense or defenses which is or are unavailable to the SPV or different from the defenses available to the SPV in such action, suit or proceeding, (iv) such control and assumption, in the reasonable discretion of such Indemnitee, involves a conflict of interest between such Indemnitee and the SPV or any other Indemnitee with respect to such action or proceeding, or (v) such action, suit or proceeding entails a reasonable possibility of compromising or jeopardizing a substantial interest of such Indemnitee; and in any such event such Indemnitee may retain additional and separate counsel to represent it or, at its option, assume the defense of such action and the SPV will pay all of the Expenses of such Indemnitee in respect of such defense, provided that if the SPV shall not elect in writing to assume the defense thereof to the extent entitled to do so, an Indemnitee may, after written notice to the SPV and after the SPV's failure to remedy promptly the same, assume the defense thereof, including the employment of counsel, in which case the SPV shall pay all of the Expenses of such Indemnitee incurred in respect of such defense. An Indemnitee shall, in any case, be entitled, at its expense, to participate in any action, suit or proceeding the defense of which has been assumed by the SPV; provided however, that if the SPV fails to employ counsel reasonably satisfactory to such Indemnitee the fees and expenses of counsel to such Indemnitee shall be paid by the SPV. No Indemnitee shall enter into any settlement or other compromise with respect to any Expense without the prior written consent of the SPV (which consent shall not be unreasonably withheld or delayed) unless such Indemnitee waives its right to be indemnified under this Section 17.2 with respect to such Expense or an Event of Default shall have then occurred and be continuing. In any action, suit or proceeding to which any Indemnitee is a party, the SPV shall not enter into any settlement or other compromise with respect to any Expense without the prior written consent of such Indemnitee which consent shall not be unreasonably withheld or delayed. Upon payment of any Expense by the SPV pursuant to this Section 17.2 to or on behalf of an Indemnitee, the SPV, without any further action, shall be subrogated to any and all claims that such Indemnitee may have to recover such Expense from any other Person (other than claims in respect of insurance policies maintained by such Indemnitee at its own expense), and such Indemnitee shall cooperate with the SPV and give such further assurances as are reasonably necessary or advisable to enable the SPV to pursue such claims; provided that the SPV's rights of subrogation shall be subordinated to the full and complete payment of all principal, interest, Make-Whole Amount and other amounts due with respect to the Notes. Nothing in this Section 17.2 shall be construed as a guaranty by the SPV of any residual or market value in the Project, the Project Land or of the performance capability or operating capacity of the Project or as a guaranty of any Notes. -59- Section 17.3 Increased Costs. If, (i) the compliance by any Holder with any direction, requirement or request after the date hereof from any Governmental Authority, whether or not having the force of law, with which such Holder must reasonably comply (including, without limitation the National Association of Insurance Commissioners); or (ii) the change in the interpretation or application of any law or the enactment of any law after the date hereof imposing or modifying any reserve requirement (including, without limitation, any requirement of the National Association of Insurance Commissioners), capital adequacy requirement or similar requirement with respect to any class of assets or liabilities of, deposits with or for the account of, or loans or investments by, any Holder (or with respect to any change therein or in the amount thereof); or (iii) the occurrence after the date hereof of any other condition or circumstance (other than conditions or circumstances relating only to such Holder and arising solely as a result of an exercise of discretion by such Holder) with respect to this Agreement and/or the maintenance by such Holder of its investment in the Notes, shall (A) result in any increase in cost to any Holder in connection with or arising out of any Note, (B) result in any reduction in the amount of any payment receivable by any Holder hereunder or thereunder or (C) result in any reduction of the rate of the return on any Holder's capital as a consequence of its obligations hereunder below that which such Holder could have achieved but for such circumstances, then, in each such case, the SPV shall fully reimburse such Holder the amount of such increase in cost, reduction in payment receivable or reduction in rate of return promptly after written notification thereof to the SPV by such Holder, which notification shall include such Holder's relevant calculations and all relevant additional facts, assumptions and information that such Holder customarily provides in like circumstances. The Holders shall (consistent with their internal policies and legal and regulatory restrictions) use their reasonable efforts to avoid such increased costs by giving the SPV prompt notice thereof. If at any time a Holder gives notice that any amount is due under this Section 17.3, the SPV shall, for a thirty (30) day period following receipt of such notice, have the right to prepay such Holder's Notes at par (without any payment of the Make-Whole Amount). Section 17.4 Restriction on Sale of Notes. So long as no Default or Event of Default shall exist, no Holder shall sell any Note to (a) any Person engaged in a business substantially similar to that of Lime on the Initial Funding Date, or (b) any electric utility company. Section 17.5 Disclosure to Other Persons. Each Holder shall use its best efforts to hold in confidence and not to disclose any Confidential Information, provided, that any Holder will be free, after notice to the SPV, to correct any false or misleading information that may become public concerning its relationship to the SPV or Lime or to the transactions contemplated by this Agreement. Notwithstanding the foregoing, the SPV acknowledges that any Holder may deliver copies of any financial statements and other documents delivered to such Holder, and disclose any other information disclosed to such Holder (including, without limitation, Confidential Information), by or on behalf of the SPV in connection with or pursuant to this Agreement, to -60- (a) such Holder's directors, officers, employees, agents and professional consultants, (b) any other Holder, (c) any Institutional Investor to which such Holder sells or offers to sell such Note or any part thereof, provided that such Institutional Investor signs a written agreement to comply with the confidentiality provisions of this Agreement, regardless of whether or not such offeree purchases any Notes, and provided further that no such agreement shall be required so long as such Institutional Investor is furnished only with information that is not Confidential Information, (d) any Institutional Investor to which such Holder sells or offers to sell a participation in all or any part of such Note, provided that such Institutional Investor signs a written agreement to comply with the confidentiality provisions of this Agreement, regardless of whether or not such offeree purchases any Notes, and provided further that no such agreement shall be required so long as such Institution Investor is furnished only with information that is not Confidential Information, (e) any federal or state regulatory authority having jurisdiction over such Holder, (f) the National Association of Insurance Commissioners or any similar organization or (g) any other Person to which such delivery or disclosure may be necessary, (i) in compliance with any law, rule, regulation or order applicable to such Holder, (ii) in response to any subpoena or other legal process, or (iii) in connection with any litigation to which such Holder is a party. Section 17.6 Reproduction of Documents. This Agreement, each other Transaction Document and all documents relating hereto or thereto, including, without limitation, (a) consents, waivers and modifications which may hereafter be executed, (b) documents received by you in connection with any Advance (except the Notes themselves), and (c) financial statements, certificates and other information previously or hereafter furnished to you or any other holder of Notes, may be reproduced by you or any other Holder of Notes by any photographic, photostatic, microfilm, micro-card, miniature photographic or other similar process and each Holder may destroy any original document so reproduced. The SPV agrees and stipulates that any such -61- reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by such Holder in the regular course of business) and that any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence. Section 17.7 Payments on Notes; other Amounts. (a) Manner of Payment. The SPV shall make each payment of principal, interest, Make-Whole Amount and all other amounts due with respect to each Note (without any presentment of such Notes and without any notation of such payment being made thereon) by crediting, by federal funds bank wire transfer, your account designated on Annex 1 prior to noon New York City time on the date such payment is due. (b) Payments Due on Holidays. If any payment due on, or with respect to, any Note shall fall due on a day other than a Business Day, then such payment shall be made on the first Business Day following the day on which such payment shall have so fallen due; provided that if all or any portion of such payment shall consist of a payment of interest, for purposes of calculating such interest, such payment shall be deemed to have been originally due on such first following Business Day, such interest shall accrue and be payable to (but not including) the actual date of payment, and the amount of the next succeeding interest payment shall be adjusted accordingly. If any payment is to be made on the first Business Day following the day on which the same shall have fallen due, as provided in this paragraph, and is not so paid on such first Business Day, interest shall accrue thereon (to the extent permitted by applicable law) with respect to each Note at the rate provided in such Note on overdue payments of principal from (in each case) the originally scheduled day of its payment. (c) Payments, When Received. Any payment to be made to any Holders shall be deemed to have been made on the Business Day such payment actually becomes available to such Holder at such Holder's bank prior to noon (New York City time). (d) Other Amounts. Any fees, expenses, costs and other amounts due from the SPV to you pursuant to this Agreement or any other Transaction Document which are not paid when due shall bear interest thereafter at a rate per annum equal to the Late Payment Rate. Section 17.8 Survival. All warranties, representations, certifications and covenants made by the SPV herein or in any certificate or other instrument delivered by it or on its behalf under this Agreement or any other Transaction Document shall be considered to have been relied upon by you and shall survive the delivery to you of the Notes regardless of any investigation made by you or on your behalf. All statements in any such certificate or other instrument shall constitute warranties and representations by the SPV hereunder. Section 17.9 Successors and Assigns. The SPV may not assign any of its interests, rights or obligations hereunder without your prior written consent. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties hereto. The provisions of this Agreement are intended to be for the benefit of all Holders -62- and shall be enforceable by any such Holder, whether or not an express assignment to such Holder of rights under this Agreement has been made by you or your successor or assign. Section 17.10 Amendments. The provisions of this Agreement may not be waived, modified, amended, supplemented or terminated in any manner whatsoever except by written instrument signed by each party against which enforcement or applicability of the waiver, modification, amendment, supplement or termination is sought. Section 17.11 Section Headings, Table of Contents. The titles of the Sections and the Table of Contents appear as a matter of convenience only, do not constitute a part hereof and shall not affect the construction hereof. The words "herein," "hereof," "hereunder" and "hereto" refer to this Agreement as a whole and not to any particular Section or other subdivision. Section 17.12 Duplicate Originals; Execution in Counterpart. Two or more duplicate originals of this Agreement may be signed by the parties, each of which shall be an original but all of which together shall constitute one and the same instrument. This Agreement may be executed in one or more counterparts and will be effective when at least one counterpart has been executed and delivered by each party hereto; and each set of counterparts which, collectively, shows execution by all of the parties hereto shall constitute one duplicate original. Section 17.13 Jury Trial Waiver. NEITHER THE SPV NOR THE PURCHASER (NOR ANY OF THEIR RESPECTIVE SUCCESSORS OR ASSIGNS) SHALL SEEK A JURY TRIAL IN ANY ACTION BASED UPON OR ARISING OUT OF OR OTHERWISE RELATING TO THIS AGREEMENT, ANY OF THE FINANCING DOCUMENTS, ANY COLLATERAL FOR THE INDEBTEDNESS EVIDENCED BY THE NOTES, OR THEIR DEALINGS OR RELATIONSHIPS WITH EACH OTHER, AND EACH OF THEM AGREE THAT NO SUCH ACTION WITH RESPECT TO WHICH A JURY TRIAL HAS BEEN WAIVED SHALL BE SOUGHT TO BE CONSOLIDATED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT OR HAS NOT BEEN WAIVED. THIS PARAGRAPH HAS BEEN FULLY DISCUSSED BY THE SPV AND YOU, EACH OF WHOM HAVE BEEN REPRESENTED BY COUNSEL, AND THIS PARAGRAPH SHALL NOT BE SUBJECT TO ANY EXCEPTIONS. [Remainder of page intentionally left blank; next page is signature page.] -63- If this Agreement is satisfactory to you, please so indicate by signing the acceptance at the foot of a counterpart hereof and returning such counterpart to the SPV, whereupon this Agreement will become binding among us in accordance with its terms. Very truly yours, DRAVO BLACK RIVER LIMITED PARTNERSHIP By DBR General Inc., its General Partner By A. H. TENHUNDFELD, JR. Name: A. H. Tenhundfeld, Jr. Title: Vice President Accepted: THE PRUDENTIAL INSURANCE COMPANY OF AMERICA By SCOTT W. ISLEY Name: Scott W. Isley Title: Vice President -64,65- EX-4 3 RULES OF USAGE & DEFINITIONS-TRANSACTION DOCUMENTS Annex A to the Note Purchase Agreement RULES OF USAGE AND DEFINITIONS RELATING TO THE TRANSACTION DOCUMENTS SECTION 1.01. Rules of Usage. The following rules of usage shall apply to this Annex A and each of the Transaction Documents (and each appendix, schedule, exhibit and annex to the foregoing) unless otherwise required by the context: (a) Except as otherwise expressly provided, any definitions set forth herein or in any other document shall be equally applicable to the singular and plural forms of the terms defined. (b) Except as otherwise expressly provided, references in any document to articles, sections, paragraphs, clauses, annexes, appendices, schedules or exhibits are references to articles, sections, paragraphs, clauses, annexes, appendices, schedules or exhibits in or to such document. (c) The headings, subheadings and table of contents used in any document are solely for convenience of reference and shall not constitute a part of any such document nor shall they affect the meaning, construction or effect of any provisions thereof. (d) References to any Person shall include such Person, its successors and permitted assigns and transferees. (e) Except as otherwise expressly provided, references to any Applicable Law include any amendment or modification to such Applicable Law and any rules or regulations issued and promulgated thereunder and any Applicable Law enacted in substitution or replacement therefor. (f) When used in any document, words such as "hereunder," "hereto," "hereof," and "herein" and other words of like import shall, unless the context clearly indicates to the contrary, refer to the whole of the applicable document and not to any particular article, section, subsection, paragraph or clause thereof. (g) Notwithstanding the fact that some (but not all) references to "including" are expressly indicated as being "including, without limitation," reference to "including" means including without limiting the generality of any description preceding such term and for purposes hereof the rule of ejusdem generis shall not be applicable to limit a general statement, followed by or referable to an enumeration of specific matters, to matters similar to those specifically mentioned. (h) Each of the parties to the Transaction Documents and their counsel have reviewed and revised, or requested revisions to, the Transaction Documents, and the usual rule of construction that any ambiguities are to be resolved against the drafting party shall be inapplicable in the construing and interpretation of the Transaction Documents. -1- (i) Except as otherwise expressly provided, reference to any agreement, instrument or document means such agreement as amended, modified or supplemented from time to time in accordance with the provisions thereof and the provisions of the Transaction Documents. SECTION 1.02. Definitions. As used in this Annex A and the Transaction Documents, the following terms shall have the respective meanings set forth below: "Acceleration" shall mean a declaration (or deemed declaration) pursuant to Section 13.2 of the Note Purchase Agreement that the Notes then outstanding are immediately due and payable. "Acceptable Transferee" shall have the meaning ascribed thereto in Section 1.11(b)(iv) of the MCFA. "Accounts" shall mean each of the Construction Account, Project Revenue Account, the Additional Reserve, the Default Reserve, the Debt Service Reserve, the Casualty Account, the Construction Completion Account and the Windup Account. "Accredited Investor" shall have the meaning ascribed thereto in Regulation D under the Securities Act. "Additional Reserve" shall mean the account entitled "Black River Expansion Additional Reserve Account" maintained by the SPV with the Disbursement Agent pursuant to Section 2.4 of the Deposit and Disbursement Agreement. "Advance" shall have the meaning ascribed thereto in Section 1.2 of the Note Purchase Agreement. "Affiliate" shall mean, in respect of any Person at any time, another Person (a) that directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such Person, (b) that beneficially owns or holds five percent (5%) or more of any class of the Voting Stock or equity interests of such Person, or (c) five percent (5%) or more of the Voting Stock (or in the case of a Person that is not a corporation, five percent (5%) or more of the equity interest) of which is beneficially owned or held by such Person. For the purposes of this definition of "Affiliate," (i) a partnership, its general partners and limited partners are Affiliates of each other; and (ii) "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. "Agreement, this" shall mean the Note Purchase Agreement. -2- "Applicable Law" shall mean all applicable Governmental Approvals, Environmental Laws, laws, statutes, treaties, rules, codes, ordinances, regulations, certificates, orders, interpretations, licenses and permits of any Governmental Authority and judgments, decrees, injunctions, writs, orders or like action of any court, arbitrator or other administrative, judicial or quasi-judicial tribunal or agency of competent jurisdiction. "Approved Draw Request" shall mean a Draw Request which has been approved by the Independent Engineer and the Lender. "Assigned Documents" shall mean, collectively, the Construction Contracts, the OPCO Agreement, the Transportation Agreement and any other Project Contracts or other material contract or agreement that may from time to time be assigned by Lime to the SPV and assumed by the SPV as contemplated by the Transaction Documents. "Assigned Governmental Approvals" shall mean the Governmental Approvals listed in Annex 4 to the Note Purchase Agreement (other than those identified therein as not assigned), and any other Governmental Approval that may from time to time be assigned by Lime to the SPV pursuant to Section 9.20 of the Note Purchase Agreement. "Assigned Lime Contract Collateral" shall mean all accounts receivable arising from, and all general intangibles comprising, Assigned Lime Contracts. "Assigned Lime Contracts" shall mean all Compatible Lime Supply Agreements of a type that would be subject to a Lien in favor of one or more of the Existing Creditors' Agent and the Existing Creditors under the Existing Creditors Security Documents as such Existing Creditors Security Documents are in effect on August 1, 1994. "Bankruptcy" shall mean, with respect to any Person: (a) the commencement of any proceeding against such Person seeking reorganization, arrangements, composition, readjustment, liquidation, dissolution, or similar relief under any Federal or state bankruptcy or insolvency law or other similar law which proceeding is not dismissed within 90 days, or the appointment without the Person's consent of a trustee, receiver or liquidator of such Person or of all or a substantial part of such Person's Property, which appointment is not vacated within 90 days after it is made; (b) the filing by such Person of a petition, answer or consent seeking relief under any Federal or state bankruptcy or insolvency law or other similar law, or the seeking or consent of such Person to the institution of proceedings thereunder or to the filing of any such petition or to the appointment or taking possession of a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of such Person or of any substantial part of its Property or the filing of an answer or other pleading admitting or failing to contest the material allegations of a petition filed against it or described in this clause; (c) the making by such Person of a general assignment for the benefit of creditors; or -3- (d) the taking of corporate or partnership action by such Person in furtherance of any of the foregoing actions. "Bankruptcy Code" shall mean the Bankruptcy Reform Act of 1978, as amended, as the same may be further amended, and any other Applicable Law with respect to bankruptcy, insolvency or reorganization that is successor thereto. "Basic" shall mean Dravo Basic Materials Company, Inc., an Alabama corporation. "Black River Common Facilities" shall have the meaning ascribed thereto in the Easement Agreement. "Black River Facility" shall mean the limestone mines and lime processing and production facilities of Lime at or adjacent to the Project Land (other than the Project). "Business Day" shall mean a day other than a Saturday, a Sunday or a day on which banks are required by law (other than a general banking moratorium or holiday for a period exceeding four (4) consecutive days) to be closed in the State of New York or the State of Delaware. "Cancellation Fee" shall have the meaning ascribed thereto in Section 1.7(c) of the Note Purchase Agreement. "Capacity Payment" shall have the meaning ascribed thereto in Section 3.2(b)(i) of the MCFA. "Casualty" shall mean (i) any destruction, loss or damage of or to the Project, the Black River Common Facilities or any building, structure or other improvement situated on the Site, (ii) any cessation or material impairment of the operation of the Project, the Black River Common Facilities or any component thereof as a result of damage to the Project, the Black River Common Facilities or the Site, (iii) any theft, vandalism or other criminal mischief affecting all or any portion of the Project, the Black River Common Facilities or any building, structure or other improvement situated on the Site, or (iv) any other occurrence that results in an insurance payment or settlement with respect to the Project, the Black River Common Facilities or any building, structure or other improvement situated on the Site, as the case may be. "Casualty Account" shall mean the account entitled "Black River Expansion Casualty Account" maintained by the SPV with the Disbursement Agent pursuant to Section 2.6 of the Deposit and Disbursement Agreement. "Class B Common Stock" shall mean the share of Class B Common Stock, $1.00 par value, of the General Partner issued to the Purchaser pursuant to the Subscription Agreement. "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, or any successor Federal statute. "Collateral" shall mean, collectively, the SPV Collateral, the Lime Collateral and the Partner Collateral. -4- "Collateral Agency Agreement" shall mean the Collateral Agency Agreement, dated as of August 1, 1994, by and among Wilmington Trust Company, as the Collateral Agent, Prudential, the SPV, the SPV General Partner and the SPV Limited Partner. "Collateral Agent" shall mean Wilmington Trust Company, a Delaware corporation, not in its individual capacity but solely as Collateral Agent pursuant to the Collateral Agency Agreement. "Commitment Amount" shall have the meaning ascribed thereto in Section 1.1(a) of the Note Purchase Agreement. "Compatible Lime Supply Agreements" shall mean, at any time, lime supply agreements for non-metallurgical lime contracted by Lime for the Maysville Facility or the Black River Facility that are or could have been serviced by the Project at such time in compliance with the technical requirements relating to the chemical composition of processed lime set forth in such agreements. "Confidential Information" shall mean any information furnished to any Holder by the SPV or Lime in connection with any Transaction Document or obtained by any Holder in connection with an inspection made pursuant to any Transaction Document, and that is marked by the SPV or Lime as being confidential, other than such information, (i) that was publicly known, or otherwise known to such Holder, at the time the information was furnished to such Holder, (ii) that subsequently becomes publicly known through no act or omission by such Holder, or (iii) that otherwise becomes known to such Holder other than through disclosure by the SPV or Lime. "Construction Account" shall mean the "Black River Expansion Construction Account" maintained by the SPV with the Disbursement Agent pursuant to Section 2.1 of the Deposit and Disbursement Agreement. "Construction Agreement" shall mean the Agreement, dated as of August 27, 1993, as amended, by and between KVS and Lime, providing for the construction of the Project Kilns. "Construction Budget" shall mean the budget prepared by Lime as of the Initial Funding Date setting forth Construction Costs in form and substance satisfactory to Prudential. "Construction Completion Account" shall mean the account entitled "Black River Expansion Construction Completion Account" maintained by the SPV with the Disbursement Agent pursuant to Section 2.7 of the Deposit and Disbursement Agreement. "Construction Contracts" shall mean those contracts for the construction of various portions of the Project, including, without limitation, the Construction Agreement. -5- "Construction Costs" shall mean the costs incurred in connection with the development, financing and construction of the Project, including, without limitation, engineering, procurement, equipment, labor, construction and construction management costs relating to the Project, and amounts for insurance, accrued interest on amounts outstanding under the Construction Notes, fees required by Section 2.11 of the Construction Management Agreement, Transaction Expenses, and other fees, costs and expenses payable to Prudential or to the Collateral Agent under the Note Purchase Agreement or any other Transaction Document on or prior to the Conversion Date and amounts advanced to the Construction Completion Account to finance Punch List Items. Construction Costs shall not include Contingency Costs except to the extent that payment of the same has been approved or is permitted by Section 1.8 of the Note Purchase Agreement and Section 2.2 of the Construction Management Agreement. "Construction Exit Fee" shall have the meaning ascribed thereto in Section 1.6(c) of Note Purchase Agreement. "Construction Management Agreement" shall mean the Construction Management Agreement, dated as of August 1, 1994, by and between the SPV and Lime. "Construction Manager" shall mean Lime and any successor or permitted assign under the Construction Management Agreement. "Construction Notes" shall have the meaning ascribed thereto in Section 1.1(a) of the Note Purchase Agreement. "Construction Note Maturity Date" shall have the meaning ascribed thereto in Section 1.5(b) of the Note Purchase Agreement. "Construction Option Amount" shall have the meaning ascribed thereto in Section 1.6(c) of the Note Purchase Agreement. "Construction Option Amount Prepayment Date" shall have the meaning ascribed thereto in Section 1.6(c) of the Note Purchase Agreement. "Construction Period" shall mean the period of time from the Initial Funding Date up to, but not including, the Conversion Date. "Construction Schedule" shall mean a time schedule for the construction of the Project acceptable to Prudential under which the Project shall have reached significant Project milestones and Substantial Completion not later than the Construction Note Maturity Date. "Construction Servicing Fee" shall have the meaning ascribed thereto in Section 1.7(d) of the Note Purchase Agreement. "Contingency Costs" shall mean, collectively, (a) for any item or category identified in the Construction Budget, an amount equal to the excess, if any, of (i) the actual cost of such item or category to the Construction Manager over (ii) the cost of such item or category set forth in the Construction Budget and (b) for any cost incurred by or on behalf of the Construction Manager which is not accounted for in the Construction Budget, the actual amount of such cost. -6- "Contractor" shall mean KVS or any successor thereto. "Contract Year" shall mean the 12-month period commencing at 12:00 a.m. on January 1 of each year and ending at 11:59 p.m. on the following December 31, except that the first Contract Year shall begin on the Operation Commencement Date and the last Contract Year shall end on the Ground Lease Expiration Date. "Controversy" shall have the meaning ascribed thereto in Section 5.2 of the MCFA. "Conversion Date" shall mean the date on which all of the conditions set forth in Section 8 of the Note Purchase Agreement have been satisfied or waived. "Corporation" shall mean Dravo Corporation, a Pennsylvania corporation. "Debt" of any Person shall mean, at any date, without duplication, (i) indebtedness for borrowed money or under interest rate and/or currency hedge or swap agreement or for the deferred purchase price of Property or services and any other item that would be included in determining total balance sheet liabilities of such Person in accordance with GAAP (excluding obligations under agreements for the purchase of goods and services in the ordinary course of business and which are paid in the ordinary course of business, but including obligations under agreements relating to the issuance of performance letters of credit or acceptance financing), (ii) obligations of such Person as lessee under leases which shall have been or should be, in accordance with GAAP, recorded as capital leases, (iii) all obligations of such Person secured by a Lien on any Property or assets owned or held by such Person, regardless of whether such Debt is assumed by such Person, (iv) dividends or distributions payable by such Person on or in connection with a preferred stock, and (v) obligations of such Person (including lease, dividend, distribution and other obligations) under direct or indirect guaranties in respect of, and obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise provide funds for the payment or discharge of, or to assure a creditor against loss in respect of, indebtedness or obligations of others of the kinds referred to in clause (i), (ii), (iii) or (iv) above, or to maintain the solvency or any balance sheet or other financial condition of the obligor of such indebtedness, or to make payment for any products, materials or supplies or for any transportation or services of such Person regardless of the delivery or nondelivery or nonfurnishing thereof, in any such case if the purpose or intent of such agreement is to provide assurance that such indebtedness, lease, dividend, distribution or obligation will be paid or discharged, or that the holders of such indebtedness, lease, dividend, distribution or obligation will be protected against loss in respect thereof. "Debt Payment Date" shall mean (a) prior to the Conversion Date, the final day of each month beginning August 31, 1994, (b) the Conversion Date, (c) subsequent to the Conversion Date, each February 1 and August 1, and (d) the Term Note Maturity Date. "Debt Placement Memorandum" shall mean the Debt Placement Memorandum dated July, 1993, prepared by Continental Bank Lease Capital Group in respect of the Project. "Debt Service" shall mean, for any period, the aggregate amount of all installments of principal and interest due with respect to the Notes for such period, as set forth on Schedule II -7- to the Deposit and Disbursement Agreement, as said Schedule may be amended, from time to time. "Debt Service Payment" shall mean, in respect of any Debt Payment Date, the aggregate amount of principal and interest due on the Term Notes on such date, as set forth in Schedule II to the Deposit and Disbursement Agreement, as said Schedule may be amended, from time to time. "Debt Service Reserve" shall mean the account entitled "Black River Expansion Debt Service Reserve" maintained by the SPV with the Disbursement Agent pursuant to Section 2.3 of the Deposit and Disbursement Agreement. "Debt Service Shortfall" shall have the meaning ascribed thereto in Section 2.3(b)(ii) of the Deposit and Disbursement Agreement. "Deemed Cash Flow" shall mean, with respect to a specified number of tons of processed lime purchased (or deemed purchased) by OPCO pursuant to the OPCO Agreement or by the purchaser pursuant to any Economically Similar Contract, the cash flow generated (or deemed generated) by such purchase (or deemed purchase) as determined by reference to Schedule 5 to the MCFA. "Default" shall mean, with respect to any Transaction Document, an event or condition the occurrence of which, with the giving of notice, the passage of time or both, would constitute an "Event of Default" within the meaning of such Transaction Document. "Default Reserve" shall mean the account entitled "Black River Expansion Default Reserve Account" maintained by the SPV with the Disbursement Agent pursuant to Section 2.5 of the Deposit and Disbursement Agreement. "Deposit and Disbursement Agreement" shall mean the Deposit and Disbursement Agreement, dated as of August 1, 1994, by and among the SPV, the Collateral Agent and the Disbursement Agent. "Disbursement Agent" shall mean Wilmington Trust Company, a Delaware corporation, not in its individual capacity but solely as Disbursement Agent pursuant to the Deposit and Disbursement Agreement. "Dravo Parties" shall mean collectively each of the Corporation, Lime and Basic together with their successors and permitted assigns. "Dravo-Related Event of Default" or "Dravo-Related Default" shall mean any of the following events (whatever the reason for such event and whether it shall be voluntary or involuntary, or come about or be effected by operation of law or be pursuant to or in compliance with Applicable Law): (i) Lime shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar Applicable Law now or hereafter in effect, or -8- seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, or shall consent to any such relief or the appointment of or taking of possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they became due within the meaning of the Bankruptcy Code or shall admit in writing its failure to pay its debts as they become due or shall take any action to authorize any of the foregoing; or any involuntary case or other proceeding shall be commenced against Lime seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar Applicable Law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official or agency of it or any substantial part of its property, and such involuntary case or other proceeding shall remain uncontested for a period of 90 days or undismissed for a period of 90 days; or (ii)(a)Any one or more of the Dravo Parties shall default in the payment when due of any amount in respect of any Debt owing to or for the benefit of the Existing Creditors in excess of $2,000,000, and such default shall continue beyond the applicable grace period, if any, specified in the note, agreement, lease or other instrument relating to such Debt, or (b) any other event shall occur under any note, agreement, lease or other instrument by which any such Debt is evidenced or under which any such Debt is created which, in either of the events specified in the foregoing clauses (a) or (b) causes such Debt to become due prior to its stated maturity or payment date, and such event shall not be (x) cured within the applicable grace period, if any, specified in such note, agreement, lease or other instrument or (y) rescinded or stayed by the Existing Creditors within 60 days of such acceleration. "Draw Request" shall mean a written request by the SPV for Advances under the Note Purchase Agreement, which shall (i) be substantially in the form of Exhibit B of the Note Purchase Agreement and (ii) meet all of the requirements of the Note Purchase Agreement, including, without limitation, Section 1.3 thereof. "Easement Agreement" shall mean the Easement Agreement, dated as of August 1, 1994, by and between Lime and the SPV. "Easement Parcel" shall have the meaning ascribed thereto in the second recital of the Easement Agreement. "EC Lime Pledge Agreement" shall mean the Stock Pledge Agreement, dated as of August 1, 1994, by Lime in favor of the Existing Creditors' Agent, as it may be amended, modified or supplemented from time to time in accordance with its terms. "EC Partner Pledge Agreement" shall mean the Partner Pledge Agreement, dated as of August 1, 1994, by the SPV General Partner and the SPV Limited Partner in favor of the Existing Creditors' Collateral Agent, as it may be amended, modified or supplemented from time to time in accordance with its terms. -9- "Economically Similar Contracts" shall mean, simultaneously with the acceptance of the Holders as provided in clause (ii) below, one or more lime supply agreements (excluding any renewals or extensions of an Assigned Lime Contract which Assigned Lime Contract was in existence on the date of termination of the OPCO Agreement referred to below) entered into by the SPV (or assigned to the SPV by Lime with the consent of the Existing Creditors) after the date upon which the OPCO Agreement has been terminated in whole or in material part, which agreement or agreements (i) in the sole discretion of the Holders, contain provisions regarding purchase quantities, pricing and quality standards, and other material terms, which when taken as a whole are at least as favorable to the SPV as the corresponding provisions and terms under the terminated provisions of the OPCO Agreement, and (ii) have been accepted in writing by the Holders as a substitute for the terminated provisions of the OPCO Agreement to the extent terminated. "Environmental Claims" shall mean any and all administrative, regulatory or judicial actions, suits, proceedings, executory decrees, judgments, demands, demand letters, orders, directives, claims (including claims involving liabilities in tort), Liens, notices of noncompliance or violation, or investigations relating to any Environmental Law or Governmental Approval issued under any such Environmental Law or arising from the presence or release into the environment of Hazardous Materials, including Expenses claimed or asserted by any Governmental Authority or by any third party for enforcement, cleanup, removal, response, remedial or other actions, or for damages, contribution, indemnification, cost recovery, compensation or injunctive relief pursuant to any Environmental Law. "Environmental Consultant" shall mean John T. Boyd Company on or prior to the Initial Funding Date, and thereafter John T. Boyd Company or such other engineering firm which shall be selected by the SPV and reasonably satisfactory to the Required Holder and the Collateral Agent. "Environmental Laws" shall mean all Federal, state and local laws, statutes, ordinances, regulations, criteria, guidelines and rules of common law now or hereafter in effect, and in each case as amended, and any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment relating to the regulation and protection of human health, safety, the environment and natural resources (including without limitation ambient air, surface water, groundwater, wetlands, land surface or subsurface strata, and wildlife, aquatic species and vegetation), including without limitation, laws and regulations relating to emissions, discharges, releases or threatened releases of Hazardous Materials or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials. "EPA" shall mean the United States Environmental Protection Agency, or any successor agency, body or entity. "Equity Collateral" shall mean the issued and outstanding capital stock of the Partners other than the Class B Common Stock of the SPV General Partner. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time. -10- "ERISA Affiliate" shall mean any corporation or trade or business that (i) is a member of the same controlled group of corporations (within the meaning of Section 414(b) of the Code) as the Corporation, Lime, the SPV, the SPV General Partner or the SPV Limited Partner or (ii) is under common control (within the meaning of Section 414(c) of the Code) with the Corporation, Lime, the SPV, the SPV General Partner or the SPV Limited Partner. "Event of Default" shall have the meaning ascribed thereto in Section 13.1 of the Note Purchase Agreement. "Existing Creditors" shall have the meaning ascribed thereto in the preamble to the Intercreditor Agreement. "Existing Creditors' Agent" shall have the meaning ascribed thereto in the preamble to the Intercreditor Agreement. "Existing Creditors Loan Documents" shall mean the Override Agreement and the Existing Creditors Credit Agreement, the Dravo Parties Note Agreement, the Basic Note Agreement and the other Operative Documents (in each case, as defined in the Intercreditor Agreement). "Existing Creditors Indebtedness" shall have the meaning ascribed thereto in Article 10 of the Intercreditor Agreement. "Existing Creditors Pledge Agreement" shall have the meaning ascribed thereto in the third recital of the Intercreditor Agreement. "Existing Creditors Security Agreement" shall have the meaning ascribed thereto in the third recital of the Intercreditor Agreement. "Existing Creditors Security Documents" shall mean the Existing Creditors Security Agreement, the Existing Creditors Pledge Agreement, the EC Partner Pledge Agreement and the EC Lime Pledge Agreement. "Expenses" shall mean liabilities, obligations, losses, damages, penalties, interest, claims (including, without limitation, claims involving liability in tort, strict or otherwise), Environmental Claims, actions, suits, judgments, fees, costs, expenses and disbursements (including legal and other professional fees and expenses and costs of investigation) of any kind and nature whatsoever, regardless of whether the underlying claim for such is founded or unfounded and including any fees, costs, expenses and disbursements (including legal and other professional fees and expenses and costs of investigation) of any kind and nature whatsoever arising from condemnation proceedings. "Final Approvals" shall mean all Governmental Approvals necessary or desirable for the in order to allow the Project to begin commercial operation. "Final Completion" shall have the meaning ascribed thereto in Section 2.5(c) of the Construction Management Agreement. -11- "Final Completion Date" shall mean the date of Final Completion of the Project. "Financing Documents" shall mean the Note Purchase Agreement, the Notes, the SPV Security Agreement, the Project Mortgage, the Lime Security Agreement, the Lime Pledge Agreement, the Partner Security Agreement, the OPCO Consent, the written consents obtained by Lime and/or the SPV relating to the assignment of the Assigned Lime Contracts, the Intercreditor Agreement, the Mortgage Subordination Agreement, the Deposit and Disbursement Agreement, the Collateral Agency Agreement and each other document or instrument evidencing or securing the obligations evidenced by the Notes. "Funding Date" shall mean the Initial Funding Date and each additional date on which an Advance is made in accordance with Section 1.2 of the Note Purchase Agreement. "GAAP" shall mean generally accepted accounting principles, consistently applied, as in effect in the United States from time to time. "General Contractor" shall mean Lime. "Governmental Approvals" shall mean all permits, authorizations, registrations, franchises, consents, approvals, waivers, exceptions, variances, claims, orders, judgments, interpretations and decrees, licenses, exemptions, publications, filings, notices to and declarations of or with any Governmental Authority and shall include, without limitation, all siting, environmental and operating permits and licenses that are required for the construction, installation, support, operation, existence, inspection, maintenance, repair of the Project, the safety of Persons using any portion of the Project, the Black River Common Facilities, the Project Land and the Easement Parcel, as contemplated by the Transaction Documents. "Governmental Authority" shall mean any Federal, state, county, municipal, regional, local, administrative or other governmental, quasi-governmental or regulatory authority, agency, board, body, instrumentality, commission, court, tribunal or judicial or quasi-judicial body or political subdivision of any of the foregoing. "Ground Lease" shall mean the Ground Lease, dated as of August 1, 1994, by and between Lime and the SPV. "Ground Lease Expiration Date" shall mean October 2, 2020. "Hazardous Materials" shall mean: (a) any petroleum or petroleum products, explosive, radioactive materials, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, lead and radon gas; (b) any chemical, material or substance that is now or hereafter becomes defined as or included in the definition of "hazardous substance," "restricted hazardous waste," "hazardous material," "extremely hazardous substance," "restricted hazardous waste," "toxic substance," "toxic pollutant," or words of similar import, under any applicable Environmental Law; and (c) any chemical, material, substance, or waste, exposure to which the presence, use, generation, treatment, release, emission, discharge, transport, storage or disposal of which could give rise to any Environmental Claim or is now or hereafter prohibited, limited or regulated under any Environmental Law or by any Governmental Authority. -12- "Hedge Treasury Security" shall mean, on any date, the U.S. Treasury security or securities, reported at 10 a.m. local time in Newark, New Jersey on such date on the Telerate Service (or any service that in the opinion of Prudential is comparable) for actively traded U.S. Treasury securities, having a duration (in the reasonable opinion of Prudential) most nearly equal to the duration of the Construction Notes (calculated using the Unused Commitment immediately prior to such date and the funding schedule set forth in the Construction Budget). Duration will be calculated in accordance with the customary financial practices of Prudential. "Hedge Treasury Security Bid Price" with respect to any Hedge Treasury Security shall mean the bid price of such Hedge Treasury Security on the Rate Acceptance Date expressed in relation to an assumed par value of One Hundred Dollars ($100). "Hedge Treasury Security Bid Price Increase" with respect to any Hedge Treasury Security shall mean, on any date, the Current Hedge Treasury Security Ask Price with respect to such Hedge Treasury Security minus the Hedge Treasury Security Bid Price with respect to such Hedge Treasury Security, rounded off to two decimal places, and expressed, in each case, in relation to an assumed par value of One Hundred Dollars ($100), but in no event less than Zero Dollars ($0). As used in this definition, "Current Hedge Treasury Security Ask Price" means, on the date of calculation of the Hedge Treasury Security Bid Price Increase, the ask price on such date of the actual Hedge Treasury Security used in the determination of the Hedge Treasury Security Bid Price. "Holder" shall mean, as to any Note then outstanding, the Person in whose name such Note is registered pursuant to Section 16.1 of the Note Purchase Agreement. "Holding Company Act" shall mean the Public Utility Holding Company Act of 1935, as amended. "Impositions" shall have the meaning ascribed thereto in Section 1.4 of the Project Mortgage. "Improvements Deed" shall have the meaning ascribed thereto in Section 2.1 of the Ground Lease. "Indemnitee" shall mean each of the Holders, the Collateral Agent and the Disbursement Agent, Wilmington Trust Company in its individual capacity, any Affiliate of any of the foregoing and the respective successor, assigns, agents, representatives, partners, officers, shareholders, directors, servants or employees of the foregoing. "Independent Engineer" shall mean John T. Boyd Company on or prior to the Initial Funding Date, and thereafter John T. Boyd Company or such other engineering firm which shall be selected by the SPV and reasonably satisfactory to the Required Holder and the Collateral Agent. "Independent Engineer's Certificate" shall have the meaning ascribed thereto in Section 5.7 of the Note Purchase Agreement. -13- "Industry Standards" shall mean the latest edition or revision of all industry codes, standards or regulations (hereinafter referred to collectively in this definition as "codes") applicable to the operation, maintenance, repair or modification of the Project or any portion, part or system thereof or incorporated therein; provided, however, that where any such codes are subject to interpretation or where several different codes may be applicable under Applicable Law or where the selection of any code is not required by Applicable Law, the selection of such codes to be complied with shall be made by the Independent Engineer. "Initial Funding" shall have the meaning ascribed thereto in Section 1.1(c) of the Note Purchase Agreement. "Initial Funding Date" shall have the meaning ascribed thereto in Section 1.1(c) of the Note Purchase Agreement. "Institutional Investor" shall mean any Accredited Investor. "Insurance Consultant" shall mean Alexander & Alexander, or such other consultant on insurance matters selected by the Holders. "Intercreditor Agreement" shall mean the Intercreditor Agreement, dated as of August 1, 1994, by and among the Collateral Agent, Prudential, the Existing Creditors and the Existing Creditors Agent, as consented to and acknowledged by Lime and the SPV. "Intercreditor Obligations" shall mean collectively, at any time, each of the obligations of one or more of the Dravo Parties owing to the Existing Creditors, the Existing Creditors' Agent, the Collateral Agent and Prudential at such time. "Interim Period" shall mean, in each calendar year, the semi-annual period commencing January 1 through and including June 30 and the semi- annual period commencing July 1 through and including December 31. "Investment" shall mean the Eleven Million Dollar ($11,000,000) equity contribution to the capital of the SPV made by the Partners. "Investment Company Act" shall mean the Investment Company Act of 1940, as amended. "KVS" shall mean Svedala Industries, Inc., through its Kennedy Van Saun division. "Late Payment Rate" shall mean at any time an interest rate per annum equal to the lesser of (i) the highest rate permitted by Applicable Law, or (ii) an interest rate equal to two percentage points over the highest interest payable on the Notes at such time. "Lender" shall mean The Prudential Insurance Company of America, a New Jersey insurance corporation, as lender under the Note Purchase Agreement. "Lien" shall mean any interest in Property securing an obligation owed to, or a claim by, a Person other than the owner of the Property, whether such interest is based on the common -14- law, statute or contract (including Liens arising under Environmental Laws), and including but not limited to the security interest lien arising from a mortgage, encumbrance, pledge, conditional sale or trust receipt or a lease, consignment or bailment for security purposes, and the filing of any financing statement under the Uniform Commercial Code of any jurisdiction, or any agreement to give or grant any of the foregoing as well as any reservations, exceptions, encroachments, easements, rights-of-way, covenants, conditions, restrictions, leases, claims and other title exceptions and encumbrances (including, with respect to stock, stockholder agreements, voting trust agreements, buy-back agreements and all similar arrangements) affecting Property. "Lime" shall mean Dravo Lime Company, a Delaware corporation. "Lime Collateral" shall mean any and all Property purported to be granted by Lime to the Collateral Agent pursuant to the Lime Security Agreement, the Lime Pledge Agreement and any other Transaction Document. "Lime Contract Party" shall mean each Person (other than Lime) that is a party to the Assigned Lime Contracts. "Lime Offeror" shall have the meaning ascribed thereto in Section 4.27 of the Note Purchase Agreement. "Lime Pledge Agreement" shall mean the Pledge Agreement, dated as of August 1, 1994, by and between Lime and the Collateral Agent. "Lime Security Agreement" shall mean the Security Agreement, dated as of August 1, 1994, by and between Lime and the Collateral Agent. "Loss Event" shall mean any Casualty, Requisition of Title or Requisition of Use with respect to the Project, the Project Land, the Easement Parcel or any part thereof. "Make-Whole Amount" shall mean at any time with respect to a principal amount of the Notes being prepaid (in whole or in part) means the greater of (a) Zero Dollars ($0) or (b) the remainder of (i) the sum of the present values (determined using a discount rate per compounding period equal to one-half the Make-Whole Discount Rate at such time with respect to such principal amount of Notes and a compounding period of six (6) months) of (A) the then remaining scheduled payments of principal and interest that would be payable but for the prepayment or acceleration of such principal amount of Notes being prepaid or accelerated (except for the interest payment due on the payment date next succeeding the date of payment or prepayment, as the case may be), plus (B) the Interest Stub at such time in respect of such principal amount of Notes minus -15- (ii) the aggregate principal amount of the Notes so prepaid or accelerated. As used in this definition: "Applicable H.15" shall mean, at any time, United States Federal Reserve Statistical Release H.15(519) or its successor publication most recently published and available to the public at such time, or if no such successor publication is available, then any other source of current information in respect of interest rates on Securities of the United States of America that is generally available and, in the judgment of the Required Holders, provides information reasonably comparable to the H.15(519) report. "Interest Stub" shall mean, at any time, in respect of a principal amount of Notes, the amount of the interest payment due on the payment date next succeeding the date of prepayment or payment in respect of such principal amount of Notes, less the interest accrued subsequent to the payment date immediately preceding such next succeeding payment date, to but not including such time, in respect of such principal amount of Notes. "Make-Whole Discount Rate" shall mean, at any time, with respect to a principal amount of Notes being prepaid or accelerated, the percentage rate (rounded to the nearest three decimal places) equal to (a) the yields reported, as of 10:00 a.m. (New York City time) on the date two Business Days prior to the date of such prepayment or acceleration, as the case may be (as reported on page 678 of the Telerate Service or any other nationally recognized trading screen, reasonably selected by the Required Holders, reporting on-line intraday trading in United States government securities), for actively traded U.S. Treasury securities having a maturity equal to the Weighted Average Life to Maturity of the principal amount of the Notes then being prepaid or accelerated, or, if such yields shall not be reported as of such time or the yields as of such time shall not be ascertainable, (b) the annual yield to maturity at such time of the United States Treasury obligation listed in the then Applicable H.15 for the most recently available day in such Applicable H.15 with a Treasury Constant Maturity (as such term is defined in such Applicable H.15) equal to the Weighted Average Life to Maturity of the principal amount of the Notes then being prepaid or accelerated. "Remaining Dollar-Years" shall mean, at any time, with respect to any indebtedness for borrowed money the result obtained by (a) multiplying (i) the amount of each then remaining required principal payment (including repayment of principal at final maturity) of such borrowing unpaid immediately prior to such time, by -16- (ii) the number of years (calculated to the nearest one- twelfth) that will elapse between such time and the date each such required principal payment is due, and (b) calculating the sum of the products thereby obtained. For purposes of this definition, it shall be assumed, notwithstanding Section 1.5(b) of the Note Purchase Agreement, that the Construction Notes have a final maturity date and principal amortization schedule identical to those of the Term Notes. "Weighted Average Life to Maturity" at any time with respect to any indebtedness for borrowed money shall mean the number of years obtained by dividing the then Remaining Dollar-Years of such indebtedness by the then outstanding principal amount of such indebtedness. "Margin Security" shall mean "margin stock" or "margin security" within the meaning of Regulations G, T, U and X of the Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter II, as amended from time to time. "Maximum Capacity Payment" shall have the meaning set forth in Section 3.2(b)(iii) of the MCFA. "Maysville Facility" shall mean the limestone mines and lime processing and production facilities of Lime located in Maysville, Kentucky. "MCFA" shall mean the Master Common Facilities Agreement, dated as of August 1, 1994, by and between Lime, as Operator and Owner, and the SPV. "Moody's" shall mean Moody's Investors Service, Inc., and any successor that issues nationally accepted securities ratings. "Mortgage Subordination Agreement" shall mean the Mortgage Subordination Agreement, dated as of August 1, 1994, by and between the Existing Creditors' Agent and the SPV. "Multiemployer Plan" shall mean any multiemployer plan (as defined in section 3(37) of ERISA) in respect of which the Corporation, Lime, the SPV, the SPV General Partner or the SPV Limited Partner or any ERISA Affiliate is an "employer" (as such term is defined in section 3 of ERISA). "Multiple Employer Pension Plan" shall mean any employee benefit plan within the meaning of Section 3(3) of ERISA, other than a Multiemployer Pension Plan subject to Title IV of ERISA to which the Corporation, Lime, the SPV, the SPV General Partner or the SPV Limited Partner or any ERISA Affiliate and an employer (as such term is defined in Section 3 of ERISA) other than an ERISA Affiliate or the Corporation, Lime, the SPV, the SPV General Partner or the SPV Limited Partner contribute. -17- "Non-OPCO Contracts" shall mean all lime supply contracts to which Lime or an Affiliate is or may, from time to time, be a party (other than the OPCO Agreement) pursuant to which Lime or an Affiliate is or may, from time to time, be obligated to provide, or has provided, processed lime produced by the Black River Facility, the Project or the Maysville Facility. "Non-OPCO Lime" shall mean processed lime produced by the Black River Facility, the Project and the Maysville Facility to satisfy Lime's obligations under Non-OPCO Contracts, which lime could have been produced by the Project in compliance with the relevant Non-OPCO Contract and the quality and technological standards set forth therein. "Note Purchase Agreement" shall mean the Note Purchase Agreement, dated as of August 1, 1994, by and between Prudential and the SPV. "Notes" shall mean, collectively, the then outstanding Construction Notes and Term Notes. "Occupational Safety and Health Act" means the Occupational Safety and Health Act of 1970, as amended, and all rules and regulations promulgated thereunder. "Officer's Certificate" means a certificate signed by a Responsible Officer, duly authorized by appropriate corporate action to execute such certificate. "One Year's Debt Service" shall have the meaning ascribed thereto in Section 2.3(c)(ii) of the Deposit and Disbursement Agreement. "OPCO" shall mean Ohio Power Company, an Ohio corporation. "OPCO Agreement" shall mean the Lime Supply Agreement, dated June 21, 1993, between Lime and OPCO. "OPCO Consent" shall mean that certain Consent Agreement by and among OPCO, Lime, the SPV and the Collateral Agent, relating to the assignment of the OPCO Agreement from Lime to the SPV and certain related matters. "Operating Expenses" shall mean, at any time all items identified as Operation and Maintenance Costs in the then current approved Project Budget. "Operating Work" shall have the meaning ascribed thereto in Section 1.2(a) of the MCFA. "Operation and Maintenance Costs" shall have the meaning ascribed thereto in Article 4 of the MCFA. "Operation Commencement Date" shall mean (i) the Conversion Date, or (ii) if the Conversion Date has not occurred, the Substantial Completion Date. "Operator" shall have the meaning ascribed thereto in Section 1.1 of the MCFA. -18- "Override Agreement" shall mean the Override Agreement dated as of January 21, 1992, by and among the Dravo Parties and the Existing Creditors, as amended by certain Amendments dated as of March 10, 1993, March 7, 1994 and August 1, 1994. "Owner" shall have the meaning ascribed thereto in paragraph 2 of the preliminary statements to the MCFA. "Partial Loss" shall mean a Loss Event other than a Total Loss. "Participants" shall mean, collectively, Prudential, the SPV, Lime, the Partners, the Collateral Agent, the Disbursement Agent, the Existing Creditors and the Existing Creditors' Agent and the respective successors and assigns of the foregoing. "Partner Collateral" shall mean any and all Property purported to granted by the Partners to the Collateral Agent pursuant to the Partner Security Agreement and any other Transaction Document. "Partner Security Agreement" shall mean the Partner Security Agreement, dated as of August 1, 1994, by and among the Partners and the Collateral Agent. "Partners" shall mean, collectively, DBR General Inc., a Delaware corporation, and Dravo Black River Limited Inc., a Delaware corporation. "Partnership Agreement" shall mean that certain Limited Partnership Agreement dated as of July 18, 1994 by and between the SPV General Partner and the SPV Limited Partner. PBGC shall mean the Pension Benefit Guaranty Corporation and any successor corporation or governmental agency. Pension Plan shall mean, at any time, any "employee pension benefit plan" (as such term is defined in section 3 of ERISA) maintained at such time by the SPV or any ERISA Affiliate for employees of the SPV or such ERISA Affiliate, excluding any Multiemployer Plan, but including, without limitation any Multiple Employer Pension Plan. "Performance Criteria" shall mean the performance criteria set forth in the Construction Agreement with respect to the Project Kilns, including, without limitation, Article 8 and Article 10 thereof and the Performance Standards annexed thereto. "Permitted Encumbrances" shall mean the exceptions to title listed on the Title Policy and such other exceptions as the Holders may consent to in writing. "Permitted Investments" shall mean, to the extent any of the following do not have a remaining maturity in excess of 6 months from the time of purchase, (i) direct obligations of the United States Government, (ii) obligations fully guaranteed by the United States, (iii) certificates of deposit issued by, or bankers' acceptances of, or time deposits with, any bank, trust company or national banking association incorporated or doing business under the laws of the United States or one of the States thereof having combined capital and surplus and retained earnings of at least $100,000,000 and having general obligations rated at least AA (or the then equivalent -19- grade) by Moody's and Standard & Poor's, (iv) commercial paper of any holding company of a bank, trust company or national banking association described in the preceding clause (iii) provided such obligations are rated "A-1"/"P-1" (or the then equivalent grade) by Standard & Poor's and Moody's; (v) bonds, notes or other obligations of any State of the United States, or any political subdivision of any such State, or any agencies or other instrumentalities of any such State, including but not limited to industrial development bonds, pollution control revenue bonds, public power bonds, housing bonds, other revenue bonds or other general obligations bonds, provided that, at the time of their purchase, such obligations are rated "A" (or its equivalent) or better by Standard & Poor's and Moody's; (vi) mutual funds that invest solely in Securities of the type referred to in any one or more of clauses (i) through (v) above. "Permitted Liens" shall mean: (a) the respective rights and interests of the various parties created by the Transaction Documents, as provided therein; (b) Liens for Taxes that either are not yet due and payable or are being contested in good faith and by appropriate proceedings diligently conducted, so long as such proceedings do not (i) involve any risk of the foreclosure, forfeiture or loss of the Project or the Site or any part thereof or interest therein or any substantial danger of the sale of the Project or the Site or any parts thereof or interest therein, (ii) interfere with the use, possession or disposition of the Project or any part thereof or interest therein, or (iii) involve any risk of the invalidity or the loss of the priority of the Lien of the Collateral Agent under any Transaction Document; (c) materialmens', mechanics', workmens', repairmens', employees', carriers', warehousemens' and other like Liens relating to any construction, rebuilding or repair of the Project or on the Project Land or arising in the ordinary course of business for amounts that either are not more than 30 days past due or are being contested in good faith by appropriate proceedings, so long as such proceedings satisfy the conditions for the continuation of proceedings to contest Taxes set forth in clause (b) above; (d) Liens of any of the types referred to in clauses (b) and (c) above that have been bonded by a reputable bonding company of recognized financial standing reasonably acceptable to the Holders and the Collateral Agent for the full amount in dispute (or as to which other security arrangements reasonably satisfactory to the Holders and the Collateral Agent have been made); (e) Liens arising out of judgments or awards with respect to which appeals or other proceedings for review are being prosecuted in good faith and for the payment of which adequate reserves have been provided as required by GAAP or other appropriate provisions have been made, so long as such proceedings have the effect of staying the execution of such judgments or awards and satisfy the conditions for the continuation of proceedings to contest Taxes set forth in clause (b) above; (f) all Permitted Encumbrances; -20- (g) other Liens affecting the Project or the Site consisting of easements, rights-of-way or similar rights of use that do not, individually or in the aggregate, impair (other than to an insignificant extent) the use, value or useful life of the Project or the Site; and (h) with respect to the Shared Collateral, (i) Liens in favor of the Existing Creditors' Agent created by the Existing Creditors Security Documents, (ii) the Lien in favor of First Alabama Bank with respect to the Requirements Contract dated June 30, 1990 by and between Lime and Basic, and the Limestone Lease Agreement dated June 8, 1990 by and between Lime and Basic, and (iii) such other Liens as may from time to time be consented to by the Holders. "Person" shall mean any individual, partnership, corporation, trust, limited liability company, joint venture, unincorporated organization, Governmental Authority or other entity. "Plans and Specifications" shall mean the plans and specifications for the design, construction and operation of the Project, certified copies of which have been delivered to Prudential and the Independent Engineer prior to the Initial Funding Date. "Project" shall mean the lime production facility to be constructed on the Site in accordance with the Plans and Specifications, having a production capability of not less than 700,000 tons per year of processed lime and including, without limitation, any and all appliances, parts, components, instruments, appurtenances, accessories, machinery, equipment, fixtures and other Property that may be incorporated or installed in or attached to or otherwise become part of such facility, together with all substitutions, replacements, supplements and modifications thereof. "Project Budget" shall have the meaning ascribed thereto in Section 1.4(a)(iii) of the MCFA. "Project Contracts" shall mean the Construction Contracts, the Construction Management Agreement, the Ground Lease, the Easement Agreement, the MCFA, the OPCO Agreement, the Transportation Agreement, all Governmental Approvals and all other agreements, documents, instruments and contracts of whatever nature, now or hereafter arising, relating to the construction testing, bringing into operation, possession, operation, use, repair or maintenance of the Project, the Project Land or the Easement Parcel as such documents are approved by the Purchaser in accordance with Section 5.25 of the Note Purchase Agreement. "Project Kilns" shall mean the two rotary preheater kilns including fines lime calcining system and course lime calcining system to be constructed on the Project Land pursuant to the Construction Agreement, together with all the equipment, parts, components, instruments, accessories, machinery and fixtures related thereto located on the Project Land. -21- "Project Land" shall mean that certain piece or parcel of land leased by Lime to the SPV pursuant to the Ground Lease and described in Exhibit A to the Ground Lease. "Project Mortgage" shall mean the Leasehold Mortgage, Assignment of Rents and Leases, Security Agreement and Fixture Filing, dated as of August 1, 1994, by the SPV in favor of Collateral Agent. "Project-Owned Common Facilities" shall mean the Project other than the Project Kilns. "Project Profit Margin Per Ton" shall mean, (a) as used in Section 3.2 of the MCFA, for any Contract Year, the excess of (i) the Adjusted Base Price for such Contract Year (as such term is defined in the OPCO Agreement) minus (ii) the quotient of (A) all Operation and Maintenance Costs for such Contract Year that would have been incurred had all processed lime produced at the Project, the Black River Facility and the Maysville Facility been produced at the Project divided by (B) the number of tons of Non-OPCO Lime under Compatible Lime Supply Agreements actually produced at the Project, the Black River Processing Complex and the Maysville Processing Complex during such Contract Year, and (b) as used in Section 3.3 of the Intercreditor Agreement, for any year in a Measuring Period (the "Calculation Year"), the excess of (i) the Adjusted Base Price (as such term is defined in the OPCO Agreement) for the Base Year, increased at the rate of 3% per annum for each year subsequent to the Base Year up to and including the Calculation Year minus (ii) the quotient of (A) all Operation and Maintenance Costs incurred during the Base Year, increased at the rate of 3% per annum for each year subsequent to the Base Year up to and including the Calculation Year, divided by (B) the number of tons of processed lime produced by the Project during the Base Year. The "Base Year" shall mean the complete Contract Year immediately preceding the date of determination of the Discounted Present Value of the 60,000 Ton Receivables pursuant to Section 3.3 of the Intercreditor Agreement. "Project Revenue Account" shall mean the account entitled "Black River Expansion Project Revenue Account" maintained by the SPV with the Disbursement Agent pursuant to Section 2.2 of the Deposit and Disbursement Agreement. "Project Revenues" in respect of any period, shall mean all revenues of the SPV in respect of such period including, without limitation, all payments by OPCO under the OPCO Agreement (or any payments by any Person under any Economically Similar Contract), all payments by either the Owner or Operator to the SPV under the MCFA, any Capacity Payment under the MCFA, the proceeds of any business interruption insurance, all revenues from sales of processed lime referred to in the first sentence of Section 3.2(d) of the MCFA, interest accrued on the balances of the Accounts and all other income, however earned, of the SPV, but excluding (i) insurance proceeds and condemnation awards to the extent dealt with in Section 2.6 of the Deposit and Disbursement Agreement, (ii) payments made by the Existing Creditors, or the Existing Creditors' Agent on behalf of the Existing Creditors, pursuant to the exercise of cure -22- rights under Article 6 of the Intercreditor Agreement, and (iii) any proceeds from the sale of the Notes. "Projections" shall mean the financial projections of revenues and expenses of the Project prepared by Continental Bank Lease Capital Group and delivered to the Purchaser pursuant to Section 5.27 of the Note Purchase Agreement. "Property" shall mean any interest in any kind of property or asset, whether real, personal or mixed, and whether tangible or intangible. "Prudential" shall mean The Prudential Insurance Company of America, a New Jersey insurance corporation, as lender under the Note Purchase Agreement. "Prudent Industry Practice" shall mean, at any given time, any of the practices, methods and acts engaged in or approved by a significant portion of the lime processing industry at the time the decision was made to utilize such practices, methods or acts or any of the practices, methods and acts that, in the exercise of reasonable judgment in light of the facts known at the time when the decision was made, would have been expected to accomplish the desired result, consistent with considerations of reliability, safety, expedition, and protection of the environment and with due regard for, among other things, manufacturers' warranties, engineering and operating conditions, and the requirements of Governmental Authorities and the requirements of the Transaction Documents. "Punch List Items" shall mean as of the Substantial Completion Date any items identified by the SPV and by the Independent Engineer as having to be completed in order for Final Completion to be achieved. "Purchaser" shall mean The Prudential Insurance Company of America, a New Jersey insurance corporation, as purchaser of the Notes under the Note Purchase Agreement. "Rate Acceptance Date" shall mean the date on which Prudential and the SPV agree on the interest rate to apply to the Construction Notes. "Rate Commitment Period" shall mean, with respect to any Construction Notes, the period beginning on and including the forty-third (43rd) day after the Rate Acceptance Date applicable to such Construction Notes (not counting in such forty-three (43) day period the Rate Acceptance Date), and ending on but excluding the earlier of: (a) the date such Construction Notes are fully advanced, or (b) the date the SPV cancels the Unused Commitment in full. "Rate Delayed Delivery Fee" shall have the meaning ascribed thereto in Section 1.7(b) of the Note Purchase Agreement. "Required Holders" shall mean, at any time, the holders of a majority in outstanding principal amount of the Notes at such time. -23- "Required Reserve Payment" shall mean an amount equal to the lesser of (i) that portion of the Commitment Amount which has not been cancelled and which remains unadvanced after the payment of (or provision for) all Construction Costs, and (ii) One Year's Debt Service. "Requisition of Title" shall mean any circumstance or event in consequence of which the Project or the Site or any material portion of any of the foregoing, shall be condemned or seized or title thereto shall be requisitioned or taken by any Governmental Authority or any other Person under power of eminent domain or otherwise. "Requisition of Use" shall mean any circumstance or event (other than a Requisition of Title) in consequence of which the use of the Project or the Site or any material portion thereof shall be requisitioned or taken by any Governmental Authority or any other Person under power of eminent domain or otherwise. "Responsible Officer" shall mean, with respect to the subject matter of any representation, warranty, covenant, agreement, obligation or Officer's Certificate of any party contained in or delivered pursuant to any Transaction Document, the President, or any Vice President, Assistant Vice President, Treasurer, Assistant Treasurer or other officer who in the normal performance of his or her operational responsibility would have knowledge of such matter and the requirements with respect thereto, or in the case of the SPV, such an officer of the SPV General Partner. "Scheduled Variable Cost Savings Per Ton" shall mean (a) as of any date of determination thereof that falls in any year up to and including 1998, the amount set forth in the table below opposite the year in which such date of determination falls, and (b) as of any date of determination that falls in any year subsequent to 1998, (i) the sum of the Table Amount plus the General Index Amount divided by (ii) five. The "Table Amount" shall mean (x) the amount calculated in the manner indicated in the last entry in the table below multiplied by (y) three. The "General Index Amount" shall mean (x) (1) $8.25 multiplied by (2) a fraction, of which, (A) for 1999, the numerator is the average monthly General Purpose Machine and Equipment Index (No. 114) (the "Machine and Equipment Index") published by the United States Bureau of Statistics for the twelve months from November, 1997 to October, 1998, inclusive, and the denominator is the average monthly Machine and Equipment Index for the twelve months from November, 1996 to October, 1997, inclusive, and (B) for any year after 1999, the numerator is the average monthly Machine and Equipment Index for the twelve consecutive months ending with and including October of the year immediately preceding such year and the denominator is the average monthly Machine and Equipment Index for the twelve months from November, 1997 to October, 1998, inclusive, multiplied by (y) two. Table Amount Year $4.50 1995 $6.50 1996 $7.35 1997 $8.25 1998 (CAFC divided by BAFC) multiplied by $8.25 Each year after 1998 -24- "CAFC" ("Current Average Fuel Cost") shall mean the actual delivered price per ton of coal, divided by the BTU content per ton of coal, for the coal delivered to the Black River Processing Complex during November of the year preceding the year in respect of which a determination is being made. "BAFC" ("Base Average Fuel Cost") for the year 1999 shall mean the actual delivered price per ton of coal, divided by the BTU content per ton of coal, for the coal delivered to the Black River Processing Complex during January, 1998; for each year subsequent to 1999, BAFC shall mean the actual delivered price per ton of coal, divided by the BTU content per ton of coal, for the coal delivered to the Black River Processing Complex during November, 1998. "SEC" shall mean the U.S. Securities and Exchange Commission. "Secured Obligations" shall mean, at any time, (a) the indebtedness from time to time evidenced by the Notes and any and all other sums required to be paid by the SPV or Lime from time to time to the Holders or the Collateral Agent pursuant to the Notes, the Note Purchase Agreement or any other Transaction Documents, and (b) all covenants, agreements, conditions and other provisions required to be kept, performed, observed and complied with by or on behalf of the SPV or Lime from time to time in connection with the Notes, the Note Purchase Agreement or any of the other Transaction Documents. "Secured Parties" shall mean the Existing Creditors, the Existing Creditors Agent, Prudential and the Collateral Agent, together with their successors and assigns. "Securities Act" shall mean the Securities Act of 1933, as amended. "Security" shall have the same meaning ascribed thereto in Section 2(1) of the Securities Act. "Senior Financial Officer" shall mean, with respect to any Person, any one of the chief financial officer, the principal accounting officer or the treasurer (or the equivalent) of such Person, or in the case of the SPV, such an officer of the SPV General Partner. "Senior Officer" shall mean, with respect to any Person, any one of the chairman of the board of directors, the chief executive officer, the chief operating officer, the president, the chief financial officer and the treasurer (or the equivalent) of such Person, or in the case of the SPV, such an officer of the SPV General Partner. -25- "Shared Collateral" shall mean for so long as both the Collateral Agent and the Existing Creditors' Agent shall have Lien thereon, the Partner Collateral, the Equity Collateral and the Assigned Lime Contract Collateral. "Site" shall mean, collectively, the Project Land and the Easement Parcel. "Six Months' Debt Service" shall mean as of the Conversion Date fifty percent (50%) of One Year's Debt Service as of such date. "Soil Test" shall have the meaning set forth in Section 5.19 of the Note Purchase Agreement. "Source" shall have the meaning described in Section 3.2 of the Note Purchase Agreement. "SPV" shall mean Dravo Black River Limited Partnership, a Delaware limited partnership. "SPV Collateral" shall mean any and all Property purported to be granted by the SPV to the Collateral Agent pursuant to the SPV Security Agreement, the Project Mortgage and any other Transaction Document. "SPV General Partner" shall mean DBR General Inc., a Delaware corporation. "SPV Limited Partner" shall mean Dravo Black River Limited Inc., a Delaware corporation. "SPV Security Agreement" shall mean the Security Agreement, dated as of August 1, 1994, by and between the SPV and the Collateral Agent. "Standard & Poor's" shall mean Standard & Poor's Ratings Group and any successor that issues nationally accepted securities ratings. "Subscription Agreement" shall mean the Subscription Agreement dated August 2, 1994, between the General Partner and the Purchaser. "Subsequent Funding Date" shall have the meaning ascribed thereto in Section 6 of the Note Purchase Agreement. "Substantial Completion" shall mean completion of the construction of the Project in accordance with the Plans and Specifications, except for the Punch List Items. "Substantial Completion Date" shall mean the date on which Substantial Completion is achieved. "Tax or Taxes" shall mean any and all fees (including, without limitation, documentation, recording, license and registration fees), taxes (including, without limitation, net income, franchise, value added, ad valorem, gross income, gross receipts, sales, use, excise, transfer, rental, property (personal and real, tangible and intangible) and stamp taxes), levies, imposts, duties, charges, assessments or withholdings of any nature whatsoever, general or special, ordinary or -26- extraordinary, together with any and all penalties, fines, additions to tax, interest thereon and other charges. "Term Exit Fee" shall have the meaning ascribed thereto in Section 2.3(b) of Note Purchase Agreement. "Term Note Closing" shall have the meaning ascribed thereto in Section 2.1(c) of the Note Purchase Agreement. "Term Note Maturity Date" shall mean August 1, 2010. "Term Notes" shall have the meaning ascribed thereto in Section 2.1(a) of the Note Purchase Agreement. "Term Option Amount" shall have the meaning ascribed thereto in Section 2.3(b) of Note Purchase Agreement. "Term Option Amount Prepayment Date" shall have the meaning ascribed thereto in Section 2.3 of Note Purchase Agreement. "Title Company" shall mean Commonwealth Land Title Insurance Company, together with any other title insurance company providing co-insurance or reinsurance acceptable to the Holders. "Title Policy" shall have the meaning ascribed thereto in Section 5.15(b) of the Note Purchase Agreement. "Tolling Payment" has the meaning ascribed thereto in Section 3.2(a)(i) of the MCFA. "Total Loss" shall mean a Loss Event or failure of title that results in any dispossession of the SPV or Lime from the Site, which, in either case, renders the Project unable to be operated on a commercially reasonable basis as determined by the Required Holders. A "Total Loss" shall be deemed to occur (A) in the event of a Casualty described in clause (i), clause (iii) or clause (iv) of the definition thereof, on the date of the occurrence of such event; (B) in the event of a Casualty described in clause (ii) of the definition thereof, on the date the Independent Engineer determines that a Total Loss has occurred or, upon the failure of the Independent Engineer to make such determination within the time period provided in Section 12.2 of the Ground Lease, on the day following the last day of such period; (C) in the event of a Requisition of Title, on the date thereof; and (D) in the event of a Requisition of Use, on the first day following the date on which the Independent Engineer determines that such Requisition of Use shall extend or reasonably be expected to extend (i) beyond one year, (ii) beyond the Ground Lease Expiration Date, or (iii) for an indefinite period of time. "Total Net Capability" shall mean, during any period, the maximum amount of processed lime (expressed in tons) that the Project is capable of producing during such period, in each case as determined by the Independent Engineer in accordance with Prudent Industry Practice, but in no event less than 650,000 tons per year. -27- "Total Net Production" shall mean, during any period, the amount of processed lime (expressed in tons) that the Project produced during such period, as measured by the Operator in accordance with Prudent Industry Practice. "Transaction Documents" shall mean, collectively, the Financing Documents, the Project Contracts, the Subscription Agreement and the Class B Common Stock. "Transaction Expenses" shall have the meaning ascribed thereto in Section 15.1 of the Note Purchase Agreement. "Transportation Agreement" shall mean that certain agreement to be entered into between Marine Equipment Management Corporation and Lime and/or the SPV relating to the transportation of processed lime from the Site to OPCO. "UCC" or "Uniform Commercial Code" shall mean the Uniform Commercial Code as in effect in any applicable jurisdiction. "Uncompensated Yield Rate" shall mean, at any time, the interest rate applicable to the Construction Notes, minus the Alternative Investment Yield at such time. As used in this definition, "Alternative Investment Yield" shall mean, at any time, the average per annum rate of interest on investments that at such time, in the opinion of Prudential, are readily available to Prudential, are suitable for the short-term investment of money by Prudential, and have a maturity most nearly comparable to the maturity of the Construction Notes (assuming that the Construction Notes are advanced in the amounts and at the times set forth in the Construction Budget). "Uncontrollable Forces" shall have the meaning set forth in Article 4 of the MCFA. "Unused Commitment" shall mean at any time the excess of (a) the Commitment Amount, at such time, over (b) the sum of (i) the aggregate principal amount outstanding under each Note held by any Holder, at such time, plus (ii) the aggregate dollar amount of cancellations previously made by the SPV with respect to such Commitment Amount in accordance with Section 1.7(c) of the Note Purchase Agreement, at such time. "Voting Stock" shall mean the capital stock of any class or classes of a corporation the holders of which are ordinarily, in the absence of contingencies, entitled to elect a majority of corporate directors (or Persons performing similar functions). "Windup Account" shall mean the account entitled "Black River Expansion Windup Account" maintained by the SPV with the Disbursement Agent pursuant to Section 2.8 of the Deposit and Disbursement Agreement. -28- EX-4 4 MASTER COMMON FACILITIES AGREEMENT MASTER COMMON FACILITIES AGREEMENT Dated as of August 1, 1994 Between DRAVO LIME COMPANY, as Operator and Owner and DRAVO BLACK RIVER LIMITED PARTNERSHIP Regarding the Black River Lime Production Facility (Carntown, Kentucky) TABLE OF CONTENTS Page ARTICLE 1. OPERATION AND MAINTENANCE OF THE PROJECT 1 1.1 Appointment of the Operator 1 1.2 Operational Responsibilities and Obligations of the Operator 2 1.3 Matters Requiring Approval 2 1.4 Operation and Maintenance Costs; Budget 3 1.5 Outages 7 1.6 Books and Records; Reports 8 1.7 Inspection Rights 8 1.8 Annual Audit 9 1.9 Uncontrollable Forces 9 1.10 Removal of Operator 9 1.11 Appointment of a New Operator 11 1.12 Indemnification 12 ARTICLE 2. OWNER'S SUPPLY OBLIGATIONS 13 2.1 Limestone Supply 13 2.2 Additional Supply Obligations of the Owner 13 2.3 Books of Record; Reports 14 2.4 Access to Books and Records 14 2.5 Payment of Supply Costs 14 2.6 Annual Audit 15 2.7 Uncontrollable Forces 15 2.8 Most Favored Nation 15 ARTICLE 3. COMMON FACILITIES AND TOLLING 15 3.1 Tolling and Use of Common Facilities 15 3.2 Tolling Payments and Capacity Payments 16 3.3 Uncontrollable Forces 19 3.4 Maysville and Black River Production 19 3.5 Books and Records; Access 19 ARTICLE 4. DEFINITIONS 19 ARTICLE 5. MISCELLANEOUS 21 5.1 Change of Control 21 5.2 Dispute Resolution 21 5.3 Term of Agreement 22 5.4 Notices 22 5.5 Nature of Obligations 22 5.6 Successors and Assigns 22 5.7 Amendments 23 5.8 Consultations 23 -i- 5.9 Counterparts 24 5.10 Set-off 24 5.11 Governing Law 24 5.12 Cooperation 24 5.13 Severability 24 5.14 WAIVER OF JURY TRIAL 25 5.15 Jurisdiction; Consent to Service of Process 25 5.16 Consent of SPV 25 5.17 Right to Cure 25 -ii- MASTER COMMON FACILITIES AGREEMENT MASTER COMMON FACILITIES AGREEMENT (this "Agreement"), dated as of August 1, 1994, between DRAVO LIME COMPANY, a Delaware corporation, as Owner and Operator, and DRAVO BLACK RIVER LIMITED PARTNERSHIP, a Delaware limited partnership. PRELIMINARY STATEMENTS 1. Pursuant to the Ground Lease the SPV will acquire from Lime a leasehold interest in the Project Land. The SPV desires to complete construction of the Project upon the Site. Lime has assigned to the SPV its rights under the Construction Contracts. In addition, the SPV has appointed Lime to act as construction manager of the Project pursuant to the Construction Management Agreement. 2. Lime, as owner of the Black River Facility (together with its successors and permitted assigns as owner of the Black River Facility, in such capacity, the "Owner"), desires (i) to provide certain facility support and services and to supply limestone and other necessary items to the Project and (ii) to serve as initial Operator of the Project. 3. In exchange therefor and for other good and valuable consideration, the SPV wishes to grant to the Owner the right to use the Project for the processing of the Owner's limestone and the handling and storage of processed lime. 4. The parties hereto desire to enter into this Agreement, the Ground Lease and various other Transaction Documents to establish their respective rights and obligations in respect of the foregoing arrangements. For purposes of this Agreement, capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to them in Annex A to the Note Purchase Agreement, dated as of August 1, 1994, between the SPV and the Lender. The rules of usage set forth in such Annex A shall apply hereto. NOW, THEREFORE, in consideration of the premises and of the mutual agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: ARTICLE 1. OPERATION AND MAINTENANCE OF THE PROJECT 1.1 Appointment of the Operator. The SPV hereby appoints Lime as sole operator of the Project (such sole Operator, in such capacity, together with its successors and permitted assigns, being herein referred to as the "Operator") from and after the date hereof until the termination of this Agreement or until Lime shall have been removed in accordance with Section 1.10. Lime hereby agrees to serve as the initial Operator on the terms and subject to the conditions of this Agreement. -1- 1.2 Operational Responsibilities and Obligations of the Operator. (a) The Operator shall be responsible for providing all work and services with respect to the start-up, operation and maintenance of the Project and the operation and maintenance of the Black River Common Facilities as set forth in Schedule 1 and the other provisions of this Agreement (the "Operating Work"). Each of the parties hereto acknowledges and agrees that the Operator, in performing its duties hereunder, is acting as an independent contractor. (b) Subject to Section 1.3, the Operator may enter into such agreements or subcontracts as the Operator, in compliance with Prudent Industry Practice, deems necessary or appropriate, or as may be required by Applicable Law, with respect to the Operating Work. If any such agreement or subcontract (or modification thereof), except for any collective bargaining agreement, shall provide for the payment of more than $100,000 by any party thereto or shall refer to the SPV, the Lender or the Collateral Agent, such agreement or subcontract (or modification thereof) shall expressly provide that it does not impose on the SPV or any other party to a Transaction Document (other than the Operator) any obligation, liability or duty to any contractor or subcontractor or create any contractual relationship between any contractor or subcontractor and the SPV or any other party to a Transaction Document (other than the Operator). (c) In fulfilling its obligations under this Article 1, the Operator shall not, except as otherwise expressly set forth herein (including Section 1.9 and Section 3.1(b) hereof), be required to take any action that would have the effect of discriminating against the Black River Facility or any other lime production facility owned by it or any of its Affiliates, or in the use of the Project or the Black River Common Facilities in connection therewith. In addition, the Operator shall not take any action in connection with the operation of the Black River Processing Complex or any other lime production facility owned by it or any of its Affiliates that would have the effect of discriminating against the Project. For purposes of this Section 1.2(c), "discriminating" means providing available supplies and/or services on any basis other than ratably, in accordance with then applicable production or maintenance requirements, among the Project and all lime production facilities operated by the Operator capable of servicing Compatible Lime Supply Agreements. 1.3 Matters Requiring Approval. The Operator shall not take any action with respect to the Project except as set forth in Section 1.2 or in the Easement Agreement. In any case, and without limiting the generality of the foregoing, the Operator shall not take any of the following actions without the prior written consent of the SPV: (a) any action the effect of which may be to reduce the production level at which the Project is capable of being operated for Capability as of the Conversion Date unless such action is in consequence of an Operating Emergency as to which (i) the Operator shall have given the SPV, the Lender and the Independent Engineer notice setting forth the details of such Operating Emergency within 48 hours after the occurrence of such event or circumstance ("Emergency Notice") and (ii) within one week after receipt of the Emergency Notice by the Independent Engineer, the Independent Engineer shall have agreed that such reduction in production level is, consistent with Prudent Industry Practice, necessary to -2- avoid or alleviate such Operating Emergency; provided, however, that any such reduction on account of an Operating Emergency shall be permitted for only such period of time as the Independent Engineer, in consultation with the Operator, shall deem appropriate, in accordance with Prudent Industry Practice; (b) make any Capital Additions or Modifications, or any adjustments, alterations or other physical changes to the Project (i) the effect of which may be to reduce the Total Net Capability of the Project or (ii) which may be inconsistent with the obligations of the SPV under the Note Purchase Agreement (as in effect on the Initial Funding Date); provided, however, that in the case of any Capital Additions or Modifications, or any adjustment, alteration or other physical change of any kind whatsoever, which is consented to in writing by the SPV, the costs thereof shall not constitute Operation and Maintenance Costs, or be paid with Project Revenues, unless otherwise agreed in writing by the SPV; and provided, further, that no Capital Additions or Modifications or any adjustment, alteration or other physical change shall be made to the Project-Owned Common Facilities which could reasonably be expected to have a material adverse effect on the Black River Facility without the prior written consent of the holders of 66-2/3% in principal amount of the Existing Creditors Indebtedness; (c) any action the effect of which could reasonably be expected to cause a Permanent Shutdown to occur; (d) settlement of any dispute with a contractor or supplier in respect of goods or services contracted for by the Operator hereunder, if the amount involved is in excess of $250,000; (e) other than for Operating Emergencies which are governed by Section 1.3(a), any action to take the Project out of service for any continuous period that (i) exceeds one week, (ii) when combined with all periods of voluntary outage of the Project not requiring consent under this Section 1.3(e) which shall have occurred in the 12-month period immediately preceding the date of any such action, would exceed in the aggregate three weeks, (iii) is not permitted pursuant to Section 1.5 or (iv) constitutes a Permanent Shutdown; (f) the adoption of any Project Budget or Extended Budget, and any changes to either thereof; or (g) make any material substitution, replacement or repair of any part or equipment incorporated into the Project. Notwithstanding the foregoing, the scheduled recurring capital expenditures referred to on Schedule 2 hereto shall constitute Operation and Maintenance Costs. 1.4 Operation and Maintenance Costs; Budget. (a) (i) At least 60 days prior to the beginning of each Contract Year, the Operator shall prepare and submit to the SPV, the Independent Engineer, the Existing Creditors, the Lender and the Owner, (A) a draft line item budget (the -3- "Draft Project Budget") setting forth by category the Operator's projections of the cost of operating the Project during the upcoming Contract Year, on a month by month basis, (B) detailed backup information sufficient to permit an informed review of such Draft Project Budget, and (C) the levels of projected lime purchases provided to the SPV by OPCO pursuant to Article III(c) of the OPCO Agreement. Each Draft Project Budget and each Project Budget shall contain a separate line item for the costs of coal/petroleum coke, electricity, insurance, property taxes, labor, scheduled recurring capital expenses, and Other Costs based upon the projected levels of lime purchases provided to the SPV by OPCO pursuant to Article III(c) of the OPCO Agreement, all as more fully set forth on Schedule 2 hereto. No Draft Project Budget or Project Budget shall provide for any Capital Additions or Modifications or any other items requiring prior written consent pursuant to Section 1.3 (unless such consent shall be granted). (ii) Within 45 days after its receipt of a Draft Project Budget for any Contract Year, the SPV and the Lender shall give written notice to the Operator that such Draft Project Budget has been approved or disapproved by the SPV and the Lender. If such Draft Project Budget shall be disapproved, the Operator shall in good faith propose modifications thereto until such Draft Project Budget, as so modified, shall be approved. If the Operator, the SPV and the Lender cannot agree on a Draft Project Budget for any Contract Year, such disagreement shall be resolved in accordance with the procedures set forth in Section 5.2. (iii) Not later than the first day of any Contract Year, the Operator shall submit to the SPV, the Independent Engineer, the Lender, the Existing Creditors, the Disbursement Agent and the Owner a final project budget (the "Project Budget") which shall be the same as the Draft Project Budget in respect of such Contract Year that has been approved by the SPV and the Lender, with only such changes therein as shall not, without the prior written consent of the SPV and the Lender (which consent shall not be unreasonably withheld), add or delete any line item set forth in such Draft Project Budget or increase or decrease any line item amount set forth in such Draft Project Budget by more than 2%; provided that, if no Draft Project Budget has been approved by the SPV and the Lender by the first day of any Contract Year, a Draft Project Budget for such Contract Year that is so approved subsequent to such date shall be the Project Budget for such Contract Year with no modifications therein that are not approved by the SPV and the Lender. (iv) The Operator shall not make any expenditure in respect of Operation and Maintenance Costs for any Contract Year except (subject to Section 1.4(c)) pursuant to a Project Budget that has been submitted to the SPV and the Lender in accordance with the foregoing clause (iii) (unless any such expenditure is to be made at a time when a Project Budget for such time has not been approved, in which event such expenditure shall be made pursuant to the Extended Budget applicable to such time, if any). (v) No later than 60 days after the end of each Contract Year, the Operator shall, in compliance with accepted financial practice and Prudent -4- Industry Practice, prepare and submit to the SPV, the Lender and the Independent Engineer an item by item reconciliation (rounded to the nearest $1,000) of the previous Contract Year's Project Budget and the actual Operation and Maintenance Costs for such Contract Year, together with an explanation, in reasonable detail, of the principal causes of any variances of more than $50,000 from the Project Budget. (b) Not later than June 1 of each year, the Operator shall prepare and submit to the SPV, the Independent Engineer, the Existing Creditors, the Disbursement Agent, the Lender and the Owner (i) a proposed line item budget (as finally approved as provided in this paragraph (b), the "Extended Budget") setting forth by category the Operator's projections of the cost of operating the Project during the 12 consecutive months ending on June 30 of the following year, on a month by month basis, (ii) detailed backup information sufficient to permit an informed review of such proposed Extended Budget, and (iii) the levels of projected lime purchases by OPCO during the twelve month period beginning on July 1 of such year, based upon: (A) with respect to the first six months of such period, the levels of projected lime purchases provided to the SPV by OPCO pursuant to Article III (c) of the OPCO Agreement, and (B) with respect to the final six months of such period the Operator's best estimate of OPCO purchases based upon all of the facts known to the Operator at such time. Each Extended Budget shall contain a separate line item for the costs of coal/petroleum coke, electricity, insurance, property taxes, labor, scheduled recurring capital expenses, and Other Costs based upon the projected levels of lime purchases provided to the SPV by OPCO pursuant to Article III(c) of the OPCO Agreement, all as more fully set forth on Schedule 2 hereto. Within 45 days after its receipt of a proposed Extended Budget for any period, the SPV and the Lender shall give written notice to the Operator that such proposed Extended Budget has been approved or disapproved by the SPV and the Lender. If such proposed Extended Budget shall be disapproved, the Operator shall in good faith propose modifications thereto until an Extended Budget, as so modified, shall be approved (at which time copies of such approved Extended Budget shall be delivered to the SPV, the Independent Engineer, the Existing Creditors, the Disbursement Agent, the Lender and the Owner). If the Operator, the SPV and the Lender cannot agree on an Extended Budget for any period, such disagreement shall be resolved in accordance with the procedures set forth in Section 5.2. The Extended Budget shall only be used for purposes of determining deposit and disbursement obligations under Section 2.4 of the Deposit and Disbursement Agreement and for the purposes set forth in Section 1.4(a)(iv) and Section 1.4(c). -5- (c) The Operator shall make all expenditures of Operation and Maintenance Costs, consistent with Prudent Industry Practice and the then current Project Budget, in the normal course of business and as necessary or advisable for the performance of the Operating Work; provided, however, that: (i) subject to clauses (ii) and (iii) below, if such expenditures by the Operator in any Contract Year would, when taken together with all other such expenditures for such Contract Year, exceed any applicable line item amount in the Project Budget for such Contract Year (or the relevant Extended Budget, if applicable), the Operator shall give the SPV, the Lender and the Independent Engineer prompt notice of such fact; (ii) subject to clause (iii) below, the Operator may not, without the prior written consent of the SPV and the Lender, make any expenditure (A) in any month, if such expenditure together with all other similar expenditures in such month would exceed the line item amount applicable to such expenditure in the Project Budget (or the Extended Budget, if applicable) for such month by 10% or more, or (B) in any Contract Year, if such expenditure together with all other expenditures made in such Contract Year at or prior to such time would exceed by 5% or more the total expenditures in the Project Budget (or the Extended Budget, if applicable) for such portion of such Contract Year; (iii) the restrictions set forth in clauses (i) and (ii) above shall not apply if (A) an Operating Emergency shall have occurred; (B) the Operator shall have given the SPV and the Independent Engineer an Emergency Notice within 48 hours after the occurrence of such Operating Emergency; and (C) such expenditures are necessary, consistent with Prudent Industry Practice, within such 48-hour period to avoid or alleviate such Operating Emergency; no such expenditures shall be made after such 48-hour period without the prior written consent of the SPV; (iv) the restrictions set forth in clause (ii) above shall not apply to the line item amounts for coal/petroleum coke, electricity and Other Costs if the number of tons of processed lime produced by the Project in any month or in any Contract Year is more than the number of tons projected by the Project Budget or the Extended Budget, as the case may be, for such period; provided, however, that any increase in any such line item amount, as set forth in the Project Budget or the Extended Budget, as the case may be, shall not exceed a percentage of such line item amount equal to the percentage increase in the number of tons of lime produced by the Project during such month or Contract Year, as the case may be, over the number of tons projected to be so produced during such period in the Project Budget or the Extended Budget, as the case may be; and (v) the restriction set forth in clause (ii)(A) above shall not apply to any scheduled recurring capital expenditure. All such expenditures incurred by the Operator in compliance with the terms of this Agreement (including, without limitation, the preceding proviso), and all expenditures for -6- material substitutions, replacements or repairs of parts or equipment incorporated into the Project with the prior written consent of the SPV, shall be binding upon the SPV and shall constitute Operation and Maintenance Costs for all purposes hereunder. Expenditures (that are made with the prior written consent of the SPV) in respect of Capital Additions or Modifications, or adjustments, alterations or other physical changes to the Project, shall not constitute Operation and Maintenance Costs for any purpose hereunder unless otherwise agreed to in writing by the SPV. Notwithstanding the foregoing, the scheduled recurring capital expenditures referred to on Schedule 2 hereto shall constitute Operation and Maintenance Costs. (d) All payments of Operation and Maintenance Costs shall be made in accordance with Section 2.2(b)(ii)(A) of the Deposit and Disbursement Agreement. In the event that the Disbursement Agent fails to make all or a portion of the disbursement required to be made by it pursuant to Section 2.2(b)(ii)(A) of the Deposit and Disbursement Agreement, or the amount of such disbursement is insufficient to pay all Operation and Maintenance Costs then due and payable and the SPV (or any Person on behalf of the SPV, as provided in the Transaction Documents) has not paid to the Disbursement Agent or the Operator an amount equal to such shortfall, then the Operator shall advance the amount of such disbursement or portion thereof (including all amounts due to the Owner hereunder) and shall continue to perform the Operating Work. If the Disbursement Agent has not fully repaid the amounts owing to the Operator under this Section 1.4(d) with respect to an advance under this Section 1.4(d) by the close of business on the first Business Day after the 60th day following the date on which the advance was made, the Operator shall not have any further obligation to advance additional funds pursuant to this Section 1.4(d) or to continue to perform the Operating Work and the SPV shall remain obligated to repay such advances; provided, however, that the Operator shall not institute legal proceedings to recover such advances from the SPV, except to the extent provided in Section 5.10, unless and until the Secured Obligations have been paid in full. Except as provided in this Section 1.4(d), the Operator shall not be required to advance funds to the SPV or the Owner in order to comply with its obligations under this Agreement. 1.5 Outages. At the same time the Project Budget is delivered pursuant to Section 1.4(a), the Operator shall deliver to the SPV and the Independent Engineer a schedule (the "Outage Schedule") of all planned outages (including those for inspection and ordinary maintenance of the Project) for such Contract Year. The Operator shall, to the extent practicable, adhere to such Outage Schedule during such Contract Year. The scheduling and carrying out of such outages shall be (i) to the extent consistent with clauses (iii) and (iv) below, made on a nondiscriminatory basis with respect to the Black River Facility, (ii) to the extent consistent with clauses (iii) and (iv) below, coordinated with the Operator's other plant maintenance outages in accordance with Prudent Industry Practice, (iii) coordinated with OPCO and any other purchasers of processed lime from the SPV to minimize any interruption in the supply of processed lime that is to be delivered to OPCO pursuant to the OPCO Agreement, to the purchasers under Economically Similar Contracts, and to the purchasers under the other lime supply contracts to which the SPV may, from time to time, be a party (with the consent of the Existing Creditors) and (iv) made in accordance with Prudent Industry Practice to minimize both interruptions to the operation of the Project and the Black River Facility and any loss of profits as a result of the timing of such interruptions. In the event of an Operating Emergency or any other emergency -7- outage, forced outage, or reduction in production below a Total Net Capability of at least 650,000 tons per annum for any reason, the Operator shall schedule and perform all required repairs and replacements, and restore production to a Total Net Capability of at least 650,000 tons per annum, in an expeditious manner in accordance with Prudent Industry Practice and the other requirements of this Agreement. 1.6 Books and Records; Reports. (a) The Operator shall keep all necessary books of record, books of account and memoranda of all transactions referred to in this Article 1 involving the Project, including, without limitation, of the services provided and the funds received and expended by the Operator in the course of performing the Operating Work. Such books of record, books of account and memoranda shall be kept by the Operator in such manner as to conform to GAAP and to all Applicable Laws. The Operator shall, if it owns and/or is operating or is otherwise involved with the Black River Facility, keep separate books of record, books of account and memoranda of transactions for each of the Project and the Black River Facility. (b) The Operator shall prepare and, to the extent permitted by Applicable Law, file in a timely fashion; or, if the SPV shall be required to so file, the Operator shall prepare and deliver to the SPV within a reasonable time prior to the date for filing, all reports with respect to the Project or the Black River Facility, or the condition or operation thereof, that shall be required to be filed with any Governmental Authority. (c) The Operator shall, not later than 20 days after the end of each calendar month, prepare and deliver a report to the SPV (with copies to the Lender and the Independent Engineer) setting forth the monthly and annual cumulative output, the production levels, the variance from forecast, and a description of outages and operating hours for the Project. In addition, the Operator shall prepare and deliver such other reports as the SPV or the Lender may reasonably request. (d) The Operator shall, not later than 60 days after the end of each Project Quarter, prepare and deliver a report to the SPV (with copies to the Lender and the Independent Engineer) summarizing the operating and maintenance costs and revenues for such Project Quarter, which report shall provide a breakdown of Operation and Maintenance Costs. 1.7 Inspection Rights. Upon reasonable notice to the Operator, during normal business hours, the SPV, the Lender, the Existing Creditors and their respective representatives shall, subject to customary confidentiality and safety procedures, have (i) access to the Project and the Black River Facility for purposes of the inspection thereof and (ii) the right to inspect the books of record, books of account and memoranda of the Operator relating to the Project and the Black River Facility, to make copies and extracts therefrom (other than copies of and extracts from proprietary data and information) and to discuss with the executive officers of the Operator the finances and accounts relating to the Project and the Black River Facility and, with respect to the operations of the Project, the senior technical employees of the Operator. The Operator will cooperate with such Persons in connection with any such inspection or discussion. Such inspection and copying shall be solely at the expense of the Person requesting the same, unless -8- done in connection with the removal of the Operator (in which case such inspection shall be at the sole expense of the Operator). 1.8 Annual Audit. The books, records and accounts of Operation and Maintenance Costs maintained by the Operator pursuant to Section 1.6 shall be subject to an audit as of the end of and for each Contract Year by KPMG Peat Marwick or another firm of nationally recognized independent public accountants selected by the Operator. The SPV, the Lender and the Existing Creditors, and any of their respective representatives, shall be permitted to check and review all accounting records relating to the operation of the Project and the Black River Facility and to observe the procedures followed by the Operator's accountants. The report of such firm of independent public accountants for such Contract Year shall be submitted to the Operator, with a copy to the SPV, each Existing Creditor and the Lender within 90 days after the end of such Contract Year. The cost of such annual audit shall constitute an Operation and Maintenance Cost. 1.9 Uncontrollable Forces. The Operator shall not be considered to be in default in the performance of any of its obligations under this Article 1, other than obligations to pay money, if (a) such failure of performance shall be due to Uncontrollable Forces and (b) the obligations of the "Producer" are similarly excused under the OPCO Agreement as well as under any Economically Similar Contract and each and every other contract to supply processed lime to which the SPV is then a party; provided, that the Operator agrees that if such Uncontrollable Forces arise as a result of the unavailability of the Operator's personnel, the SPV may hire such personnel as may be necessary to permit operation and maintenance of the Project to the extent consistent with applicable law. If the Operator is rendered unable to fulfill any obligation by reason of Uncontrollable Forces, it shall give prompt notice of such fact to the SPV (with copies to the Lender and the Independent Engineer) and shall exercise reasonable diligence to remove said inability with all reasonable dispatch. Nothing contained herein shall be construed to require a party to settle any strike or labor dispute in which it may be involved. 1.10 Removal of Operator. (a) So long as any of the Secured Obligations shall remain outstanding, Lime shall be subject to removal as Operator by the Lender or the Collateral Agent if: (i) 45 days' prior written notice of such removal has been provided to Lime and the Existing Creditors' Agent by the Lender or the Collateral Agent, and (ii) (A) either (1) Lime, as Operator, shall have failed to perform or observe any covenants or agreements to be performed or observed by it, as Operator, under Section 1.3 hereof; (2) Lime, as Owner, shall have failed to perform or observe any covenant or agreement to be performed or observed by it under Section 2.1, Section 2.2, Section 2.5, Section 3.1(b), Section 3.1(c) or Section 3.2, and such failure shall have continued, after -9- Lime has been given a notice specifying such failure and requiring such failure to be remedied, for a period of 10 days; (3) an Event of Default under the Note Purchase Agreement (as in effect on the Initial Funding Date) shall exist; or (4)(I) Lime shall have failed to perform or observe any other covenant or agreement to be performed or observed by it, as either Owner or Operator, under this Agreement or in any capacity under any other Transaction Document to which it is a party, and the failure referred to in this subclause (4)(I) has had, or could reasonably be expected to have, a material adverse effect on the Project, or (II) such failure shall have continued, after Lime has been given a notice specifying such failure and requiring it to be remedied, for a period of 30 days and (B) any applicable period for the cure of any failure to perform or observe, or any applicable period for the cure of any Event of Default referred to in the foregoing clause (A) shall have expired. (b) So long as any of the Existing Creditor Indebtedness shall remain outstanding, the Existing Creditors shall have the right, but not the obligation, to replace Lime as the operator of the Black River Facility if the Existing Creditors or the Existing Creditors' Agent (acting on behalf of the Existing Creditors) shall have conveyed, assigned or sold the same to an Acceptable Transferee. If the Existing Creditors have foreclosed on the Black River Facility and such Acceptable Transferee intends to operate and maintain the Black River Facility itself, the Existing Creditors may request that the Lender or the Collateral Agent remove Lime as the Operator and appoint such Acceptable Transferee in lieu thereof, and, if the Independent Engineer has confirmed to the Lender in writing that such Acceptable Transferee has the experience, personnel and expertise necessary to operate the Project, the Lender or the Collateral Agent shall effect such replacement. (c) If at any time Lime has been replaced as Operator by the Lender or the Collateral Agent, the Existing Creditors shall have the right, but not the obligation, to replace Lime as the operator of the Black River Facility. (d) If Lime has been replaced as Operator, any Replacement Operator (other than Lime if Lime shall have been reinstated as Operator) shall be subject to removal at any time, with or without cause, upon 3 Business Days' prior written notice (i) from the Lender or the Collateral Agent or (ii) by the Existing Creditors pursuant to Section 1.10(b). (e) In the event of the removal of any Operator, such removed Operator shall (i) cooperate and use its reasonable efforts to transfer (to the extent transferable) any Governmental Approvals that it may have which are required or useful in the operation of the Project to any Replacement Operator or the SPV, and -10- (ii) immediately thereafter deliver to any Replacement Operator or to the SPV all books and records, equipment, operating manuals, plans and specifications, tools, spare parts and other materials used by such removed Operator in connection with the Operating Work; provided, however, that such removed Operator shall not be obliged to transfer any such Governmental Approvals or equipment, operating manuals, plans and specifications, tools, spare parts or other materials if (A) such items are required or used by Lime in connection with the operation of the Black River Facility, and (B) the cost of obtaining same was not paid with funds provided by the SPV. With regard to Governmental Approvals for which the cost was not paid by SPV, but which are required or useful in the operation of the Project by any Replacement Operator or the SPV, such removed Operator: (A) shall not interfere with or lodge objection to any efforts by Replacement Operator to obtain its own Governmental Approvals for activities conducted on the Site, (B) upon request, shall consent to and cooperate in the deletion, division and/or transfer to Replacement Operator of those portions of the Governmental Approvals governing those portions of the Site and activities that cannot or will not, by virtue of removal of Operator, be used by it in connection with the operation of the Black River Facility, and (C) with regard to Governmental Approvals for which Replacement Operator cannot obtain new or transferred Governmental Approvals without delay or unreasonable interference with the continued operation of the Project, shall consent to and not interfere with Replacement Operator's use of the then- existing Governmental Approvals for the activities conducted on the Site. (f) Any Person that shall become the Operator or a Replacement Operator hereunder shall have all of the rights, duties and obligations of the Operator as specified herein. 1.11 Appointment of a New Operator. (a) In connection with any removal of the Operator pursuant to Section 1.10(a), the Lender shall, subject to (1) approval by the Independent Engineer, (2) the provisions of Section 1.10(a) and (b) and (3) the following provisions of this Section 1.11(a), appoint a new Operator (the "Replacement Operator") to assume the duties and obligations of the Operator under this Agreement. Upon such appointment, all references to the Operator herein shall be deemed to be references to the Replacement Operator. During the 45-day period referred to in Section 1.10(a)(i), the Lender and the Existing Creditors shall attempt to reach mutual agreement as to a Replacement Operator to be appointed hereunder. If the Lender and the Existing Creditors agree to an appropriate Replacement Operator -11- during such 45-day period, then the Lender shall appoint such Person as Replacement Operator. If the Lender and the Existing Creditors are unable to agree as to an appropriate Replacement Operator during such 45-day period, then the Lender may, subject to Section 1.10(b), appoint a Replacement Operator without the Existing Creditors' consent; (b) Any Replacement Operator shall have an obligation to negotiate in good faith with the Existing Creditors to enter into an operation and maintenance agreement with respect to the Black River Facility, but neither such negotiation nor the execution of any such agreement shall be a condition to any Replacement Operator acting hereunder. 1.12 Indemnification. (a) The Operator shall defend, indemnify and hold harmless each Indemnitee and each Existing Creditor from and against any and all Expenses incurred by or asserted against any Indemnitee or Existing Creditor as a result of, arising out of, related to or in connection with the Operator's, or any of its subcontractors', performance of the Operator's obligations hereunder, including, without limitation, claims (i) for injury to or death of persons and loss of or damage to property (including, without limitation, the Project); (ii) on account of any violation of any Applicable Law to be complied with by the Operator or any contractor or subcontractor hereunder; or (iii) in respect of any taxes imposed on or attributable to the income, property or activities of the Operator or demands by or liens of suppliers or subcontractors for nonpayment of amounts due as a result of furnishing work or materials to the Operator in connection with the Project; provided, however, that the Operator shall not defend, indemnify or hold harmless any Indemnitee or Existing Creditor from and against, and no Indemnitee or Existing Creditor shall be exculpated from, any Expense to the extent (A) caused by or arising from the gross negligence or willful misconduct of such Indemnitee or Existing Creditor or (B)(1) consisting of any Expense provided for in any Project Budget or Extended Budget, or otherwise expressly provided for in this Agreement, including Schedule 2 hereto, or (2) consisting of any principal of, or interest or Make-Whole Amount in respect of, the Notes. (b) The procedures for such indemnification shall be governed by Section 17.2 of the Note Purchase Agreement, which Section is incorporated herein, mutatis mutandis, as if fully set forth herein. (c) Notwithstanding any other provision of this Agreement, the Operator's obligations under this Section 1.12 are intended to, and shall, survive termination of this Agreement. -12- (d) Notwithstanding anything to the contrary in this Section 1.12, the Operator shall not be liable to indemnify any Indemnitee or Existing Creditor for any Expenses representing any indirect, special or consequential damages. ARTICLE 2. OWNER'S SUPPLY OBLIGATIONS 2.1 Limestone Supply. Subject to the requirements of this Article 2, the Owner hereby agrees to supply and sell to the Operator, for the account of the SPV, such quantities of unprocessed limestone as shall be necessary or advisable for the SPV to meet the requirements of the SPV for the continuous operation of the Project at a Total Net Capability of at least 650,000 tons per annum. Such unprocessed limestone supplied by the Owner hereunder shall be suitable to meet the technical and other specifications for processed lime set forth in the OPCO Agreement and all such other processed lime supply contracts the SPV may, from time to time, enter into in compliance with the Transaction Documents. The Owner shall cause such unprocessed limestone to be tested in accordance with reasonable and customary tests established by the Independent Engineer, in accordance with Prudent Industry Practice, and shall maintain records of the results of all such tests. Title to the unprocessed limestone sold to the SPV pursuant to this Section 2.1 shall pass to the SPV at such time as the unprocessed limestone is placed in the Project Kilns. Risk of loss shall follow title. 2.2 Additional Supply Obligations of the Owner. (a) The Owner further agrees to supply and sell to the Operator, for the account of the SPV, all supplies, goods, materials and other products, items and services set forth in Schedule 3 and such other goods and services as may be required by the Operator in connection with the Operating Work (collectively, together with the unprocessed limestone, the "Supplies"). The cost of Supplies provided by the Owner shall be determined in accordance with Schedule 2 hereto. Each of the parties hereto acknowledges and agrees that the Owner, in performing its duties hereunder, is acting as an independent contractor. (b) The Owner may enter into such agreements or subcontracts (and modifications thereof) and take such other action as the Owner, in compliance with Prudent Industry Practice, deems necessary or appropriate, in its judgment, or as may be required by Applicable Law, to comply with the provisions of this Agreement. Any such agreement or subcontract (or modification thereof), except for any collective bargaining agreement, that provides for the payment of more than $100,000 by any party thereto, or shall refer to the SPV, the Lender or the Collateral Agent, shall expressly provide that it does not impose on the SPV or any other party to the Transaction Documents (other than the Owner) any obligation, liability or duty to a contractor or subcontractor or create any contractual relationship between a contractor or subcontractor and the SPV or any other party to the Transaction Documents (other than the Owner). (c) If the Owner shall at any time breach its obligation to supply unprocessed limestone or any other Supplies required by this Article 2 (whether by anticipatory breach or otherwise), the SPV may take commercially reasonable steps to obtain as promptly as possible a suitable replacement for such limestone or other supplies; and the Owner shall be liable to the SPV for the excess of the price so paid by the SPV for such limestone -13- or other Supplies (including the cost of labor attributable to mining and the cost of such Supplies) over the price which SPV would have been liable to pay therefor hereunder had the Owner not breached its supply obligation, plus any expenses incidental to obtaining such suitable replacement or other supplies. (d) Without limiting the generality of the foregoing, the Owner shall obtain and maintain at all times for the benefit of the SPV or its designee and the Project all material Governmental Approvals relating to (i) the ownership, construction, operation and maintenance of the Project in accordance with Applicable Law, and (ii) which can not be, or are not, issued in the name of the SPV. The Owner shall from time to time take any action as shall be necessary or desirable to have issued in the name of the SPV any such material Governmental Approval that must, by its nature, be issued in the name of the SPV in accordance with Applicable Law. (e) If OPCO becomes entitled to receive deliveries of processed lime under the OPCO Agreement prior to the Substantial Completion Date, promptly upon notice thereof from the SPV or the Operator, Lime shall cause such deliveries to be made to OPCO on behalf of the SPV, from lime processed at the Black River Processing Complex or the Maysville Processing Complex, in strict compliance with the OPCO Agreement. In no event shall Lime be entitled to receive any amounts payable by OPCO to the SPV under the OPCO Agreement in respect of such lime deliveries except as provided in Section 3.4 hereof. 2.3 Books of Record; Reports. The Owner shall keep all necessary books of record, books of account and memoranda of all transactions referred to in this Article 2 and in Article 3, including, without limitation, records as to the Supplies provided and the funds received and expended by the Owner in the performance of its obligations hereunder. Such books of record, books of account and memoranda shall be kept by the Owner in such manner as to conform to GAAP and all Applicable Laws. The Owner shall keep separate books of record, books of account and memoranda of transactions for each of the Project and the Black River Facility. 2.4 Access to Books and Records. Upon reasonable notice to the Owner, during normal business hours, the SPV, the Existing Creditors, the Lender and their respective representatives shall, subject to customary confidentiality and safety procedures, have (i) access to the Project and the Black River Facility for purposes of the inspection thereof and (ii) the right to inspect the books of record, books of account and memoranda of the Owner relating to the Project or the Black River Facility, to make copies and extracts therefrom (other than copies of and extracts from proprietary data and information) and to discuss same with the executive officers of the Owner. The Owner will cooperate with such Persons in connection with any such inspection or discussion. Such inspection and copying shall be solely at the risk and expense of the Person requesting the same. 2.5 Payment of Supply Costs. The cost of Supplies under Sections 2.1 and 2.2 hereof shall be determined in accordance with Schedule 2 and shall constitute Operation and Maintenance Costs. All payments of supply costs shall be made by the Operator pursuant to Article 1 hereof. In the event that the Operator fails to make all or a portion of the payments to the Owner required to be made by the Operator hereunder, or the amount of such disbursement is insufficient to pay all supply costs then due and payable, then the Owner shall advance the -14- amount of such disbursement or portion thereof and shall continue to perform its obligations under this Article 2. If the Operator has not fully repaid the amounts owing to the Owner under this Section 2.5 with respect to an advance under this Section 2.5 by the close of business on the first Business Day after the 60th day following the date on which the advance was made, the Owner shall not have any further obligation to advance additional funds pursuant to this Section 2.5 or to continue to perform its obligations under this Article 2, and the Operator shall remain obligated to repay such advances. Except as provided in this Section 2.5, the Owner shall not be required to advance its own funds to the Operator in order to comply with its obligations under this Agreement. 2.6 Annual Audit. The books, records and accounts of supply costs maintained by the Owner pursuant to Section 2.3 shall be subject to an audit as of the end of and for each Contract Year by KPMG Peat Marwick or another firm of nationally recognized independent public accountants selected by the Operator. The SPV, the Lender and the Existing Creditors, and any of their respective representatives, shall be permitted to check and review all accounting records relating to the Project or the Black River Facility and to observe the procedures followed by the Owner's accountants. The report of such firm of independent public accountants shall be submitted to the Owner, with a copy to the Operator, the SPV, each Existing Creditor and the Lender within 90 days after the end of such Contract Year. The cost of such annual audits shall constitute Operation and Maintenance Costs. 2.7 Uncontrollable Forces. The Owner shall not be considered to be in default in the performance of any of its obligations under this Article 2, other than obligations to pay money, if (a) such failure of performance shall be due to Uncontrollable Forces and (b) the obligations of the "Producer" are similarly excused under the OPCO Agreement as well as under each and every Economically Similar Contract. If the Owner is rendered unable to perform any obligation by reason of Uncontrollable Forces, it shall, upon acquiring knowledge of the same, give prompt notice of such fact to the other parties hereto and shall exercise reasonable diligence to remove said inability with all reasonable dispatch. Lime covenants that, to the extent that SPV is unable to produce processed lime at the Project required to service the OPCO Agreement as the result of an Operating Emergency or Uncontrollable Forces (or any combination of the foregoing), Lime shall comply with the OPCO Agreement (including, without limitation, Articles 1(a) and (b) thereof). 2.8 Most Favored Nation. Neither Lime, nor any party that would be a successor to or assign of Lime for purposes of the OPCO Agreement, or that would otherwise be bound by the OPCO Agreement, shall, without the consent of the Holders, take any action which would require an adjustment to the purchase price to OPCO under the OPCO Agreement in accordance with Article XXII of the OPCO Agreement ARTICLE 3. COMMON FACILITIES AND TOLLING 3.1 Tolling and Use of Common Facilities. (a) The SPV hereby covenants that, if the Owner has made all payments due from it hereunder (including, without limitation, payments due under Section 3.2) and the Owner is otherwise in full compliance with its obligations under Article 2 and Section 5.6(c) hereof and under the Easement Agreement, then the Owner shall, on and after the -15- Operation Commencement Date, have the right, subject to Section 3.1(b), to deliver unprocessed limestone to the Project for processing by the Operator. Subject to the provisions hereof (including, without limitation, Sections 1.5 and 3.1(b)), the Operator shall process through the Project any and all unprocessed limestone delivered by the Owner pursuant to the preceding sentence. (b) The parties hereto agree that processed lime produced by the Project shall be utilized to satisfy lime supply contracts in the following order of priority: first, the OPCO Agreement or any Economically Similar Contracts; second, if and to the extent that the Owner has made all payments due hereunder (including under Section 3.2) and the Owner is otherwise in full compliance with its obligations under Article 2 hereof and Section 5.6(c) and under the Easement Agreement, the existing lime supply contracts of Lime set forth on Schedule 4, as such contracts may from time to time be amended, supplemented, replaced or otherwise modified in accordance with their respective terms, and any other lime supply contracts of Lime entered into after the date hereof; and third, other lime supply contracts, if any, entered into by the SPV with the consent of the Existing Creditors. (c) (i) The Owner covenants that the Operator and the SPV shall, on and after the Operation Commencement Date, and for so long as the SPV shall be in compliance with this Section 3.1, have the right to use the Black River Common Facilities in connection with the exercise of the rights and the discharge of the duties of the Operator and the SPV under this Agreement and as contemplated by the Easement Agreement. (ii) The Operator and the SPV covenant that the Owner shall, on and after the Operation Commencement Date, and for so long as the Owner shall be in compliance with its obligations under Article 2, have the right to use the Project-Owned Common Facilities in connection with the exercise of the rights and the discharge of the duties of the Owner under this Agreement and as contemplated by the Easement Agreement. (iii) The Operator shall operate the Project and the Black River Processing Complex for the benefit of the Owner and the SPV in accordance with this Agreement and the Easement Agreement. Each of the Operator and the Owner covenants that, during the term of this Agreement, it shall operate, maintain, rebuild and repair the Project in compliance with the requirements imposed upon the SPV by Section 9 of the Note Purchase Agreement to the extent applicable to such operation, maintenance, rebuilding or repair (other than Sections 9.4, 9.12 to 9.16, inclusive, 9.18 and 9.19), which Section to the extent so applicable (other than such specified sections) is incorporated herein by reference, mutatis mutandis. 3.2 Tolling Payments and Capacity Payments. (a) No later than 30 days after the end of each calendar month following the Substantial Completion Date, the Owner shall -16- (i) make a payment (each, a "Tolling Payment") to the Disbursement Agent, in an amount equal to 50% of the result of (A) the Scheduled Variable Cost Savings Per Ton multiplied by (y) the number of Non-OPCO Tons produced by the Project during such month; and (ii) make a payment to the Disbursement Agent in an amount equal to the result of (A) the Operation and Maintenance Costs of the Project during such month (other than Operation and Maintenance Costs paid with the written consent of the SPV that relate to Capital Additions or Modifications, adjustments, alterations, and other physical changes to the Project and material substitutions, replacements or repairs of parts or equipment incorporated into the Project) multiplied by (B) a fraction the numerator of which is the number of Non-OPCO Tons produced by the Project during such month and the denominator of which is the total number of tons of processed lime produced by the Project during such month. (b) (i) Subject to Section 3.2(b)(ii) below, no later than 30 days after the end of each Project Quarter, Lime shall make a capacity payment (each, a "Capacity Payment") to the Disbursement Agent in an amount equal to one half of (A) the product obtained by multiplying (1) 1.3 by (2) the amount of Capacity Payment Debt Service payable with respect to such Project Quarter and the next succeeding Project Quarter, minus (B) the Deemed Cash Flow attributable to the sum of (1) the actual number of tons of processed lime purchased by OPCO pursuant to the OPCO Agreement or purchased pursuant to Economically Similar Contracts during such Project Quarter plus (2) the number of tons of processed lime projected to be purchased by OPCO during such next succeeding Project Quarter, as set forth in the letter delivered by OPCO pursuant to Article III(c) of the OPCO Agreement (provided, that in no event shall such sum be less than 150,000), minus (C) the sum of the Tolling Payments made by the Owner in respect of such Project Quarter and the immediately preceding Project Quarter; provided, however, that the Capacity Payment shall not be less than zero. (ii) Notwithstanding Section 3.2(b)(i), the aggregate amount of Capacity Payments payable by Lime with respect to any Contract Year shall not exceed the lesser of (A) the sum of the payments due with respect to Project Quarters during such Contract Year pursuant to Section 3.2(b)(i); and (B) the Maximum Capacity Payment with respect to such Contract Year. (iii) The Maximum Capacity Payment with respect to any Contract Year shall be an amount equal to (A) the product obtained by multiplying (1) 1.3 and (2) the amount of Capacity Payment Debt Service payable with respect to such Contract Year, minus (B) the Deemed Cash Flow attributable to 300,000 tons of -17- processed lime; provided, however, that, so long as Lime is the Owner and owns and operates the Maysville Processing Complex, in the event that an aggregate of less than 190,000 tons of Non-OPCO Lime under Compatible Lime Supply Agreements are produced at the Project, the Black River Processing Complex and the Maysville Processing Complex during a Contract Year, the Maximum Capacity Payment for such Contract Year shall be reduced by an amount equal to the product of (x) the Scheduled Variable Cost Savings Per Ton and (y) the excess of (I) 190,000 over (II) the aggregate number of tons (but not less than 60,000 in any event) of Non-OPCO Lime under Compatible Lime Supply Agreements produced at the Project, the Black River Processing Complex and the Maysville Processing Complex during such Contract Year; and provided further, that, so long as Lime is the Owner and owns and operates the Maysville Processing Complex, in the event that an aggregate of less than 60,000 tons of Non-OPCO Lime under Compatible Lime Supply Agreements are produced at the Project, the Black River Processing Complex and the Maysville Processing Complex during a Contract Year, the Maximum Capacity Payment for such Contract Year shall be further reduced by an amount equal to the product of (xx) the Project Profit Margin Per Ton and (yy) the excess of (I) 60,000 over (II) the aggregate number of tons of Non-OPCO Lime under Compatible Lime Supply Agreements produced at the Project, the Black River Processing Complex and the Maysville Processing Complex during such Contract Year. (iv) Deemed Cash Flow for various levels of lime production shall be as set forth on Schedule 5 hereto. (v) The Capacity Payment payable with respect to any Project Quarter shall be adjusted to reflect the limitations set forth in Section 3.2(b)(ii) and Section 3.2(b)(iii); provided, however, that if the Capacity Payments paid at any time during a Contract Year equal the Maximum Capacity Payment with respect to such Contract Year, no further Capacity Payments shall be payable with respect to such Contract Year. (c) Each payment made by the Owner or Lime under this Article 3 shall be accompanied by an Officer's Certificate of the Owner or Lime, as the case may be, setting forth in detail the calculations of such payment. Upon the request of the Lender or the SPV, the Owner or Lime, as the case may be, shall provide such additional information and details as such Person may reasonably request concerning the calculation of such payment. (d) If OPCO has claimed a credit under Article 3(e) and Article 3(f) of the OPCO Agreement with respect to any processed lime sold to a purchaser other than OPCO, Lime shall pay to the SPV, promptly upon receipt thereof, all revenues arising from such sale. If such processed lime was processed at the Black River Processing Complex or the Maysville Processing Complex, the SPV will make the payment provided for in Section 3.4 (ii) for the cost of production thereof, and such cost of production shall constitute Operation and Maintenance Costs for purposes of the Deposit and Disbursement Agreement. -18- 3.3 Uncontrollable Forces. Neither the Owner nor the SPV shall be considered to be in default in the performance of any of its obligations under this Article 3, other than obligations to pay money, if such failure of performance shall be due to Uncontrollable Forces; provided that if such Uncontrollable Forces arise as a result of the unavailability of the Owner's personnel, the SPV may hire such personnel, in accordance with Applicable Law, as may be necessary to permit operation and maintenance of the Project and the Black River Common Facilities. If either such party is rendered unable to fulfill any obligation by reason of Uncontrollable Forces, it shall, upon acquiring knowledge of the same, give prompt notice of such fact to the other parties hereto and shall exercise reasonable diligence to remove said inability with all reasonable dispatch. 3.4 Maysville and Black River Production. If the SPV is paid the gross revenues arising from the sale of any quantity of processed lime that was processed at the Black River Processing Complex or the Maysville Processing Complex, including, without limitation, (i) lime sold to OPCO pursuant to Section 2.2(e) or Section 2.7 hereof and (ii) processed lime in respect of which OPCO has claimed a credit under Article 3(e) and Article 3(f) of the OPCO Agreement, the SPV will, on the first and fifteenth days of each month, pay to Lime for each ton of such processed lime for which SPV has received such revenues, an amount equal to the fixed and variable costs of producing such ton at the facility where such production occurred. 3.5 Books and Records; Access. Lime shall keep all necessary books of record, books of account and memoranda with respect to its Capacity Payment obligation hereunder. Upon reasonable notice to Lime, during normal business hours, the SPV, the Existing Creditors, the Lender and their respective representatives shall, subject to customary confidentiality and safety procedures, have the right to inspect such books of record, books of account and memoranda, to make copies and extracts therefrom (other than copies of and extracts from proprietary data and information) and to discuss the same with Lime's executive officers. Lime will cooperate with such Persons in connection with any such inspection or discussion. Such inspection and copying shall be solely at the risk and expense of the Person requesting the same. ARTICLE 4. DEFINITIONS As set forth in the preliminary statements, the capitalized terms shall have the respective meanings set forth in Annex A to the Note Purchase Agreement and the rules of usage set forth in said Annex A shall apply hereto. In addition, the following terms shall have the following meanings: "Acceptable Transferee" shall mean a Person meeting the requirements of clauses A through E of Section 5.6(c). "Agreement, this" shall have the meaning ascribed thereto in the introductory sentence hereof. "Black River Facility" shall mean the limestone mines and lime processing and production facilities of Lime at or adjacent to the Project Land (other than the Project). -19- "Black River Processing Complex" shall mean the Black River Facility, but excluding the limestone mines related thereto. "Capacity Payment" shall have the meaning ascribed thereto in Section 3.2(b)(i) hereof. "Capacity Payment Debt Service" shall mean, for any period, the actual aggregate amount of all installments of principal and interest due with respect to the Notes for such period, but in no event to exceed the amounts set forth on Schedule II to the Deposit and Disbursement Agreement, as in effect on the Initial Funding Date. "Capital Additions or Modifications" shall mean any capital addition, additions, alterations, improvements or modifications of or to the Project, other than original, substitute or replacement parts incorporated into the Project. "Compatible Lime Supply Agreements" shall have the meaning set forth in Section 3.3(ii)(d) of the Intercreditor Agreement. "Draft Project Budget" shall have the meaning ascribed thereto in Section 1.4(a)(i) hereof. "Emergency Notice" shall have the meaning ascribed thereto in Section 1.3(a) hereof. "Extended Budget" shall have the meaning ascribed thereto in Section 1.4(b) hereof. "Maximum Capacity Payment" shall have the meaning ascribed thereto in Section 3.2(b)(iii) hereof. "Maysville Facility" shall mean the limestone mines and lime processing and production facilities of Lime located in Maysville, Kentucky. "Maysville Processing Complex" shall mean the Maysville Facility, but excluding the limestone mines related thereto. "Non-OPCO Tons" shall mean tons of lime processed by the Project for any purchaser of processed lime other than (i) OPCO under the OPCO Agreement, (ii) any purchaser under any Economically Similar Contract, and (iii) any purchaser to the extent the tons of lime purchased by such purchaser constitute Default Tonnage (as defined in the OPCO Agreement). "O&M Procedures" shall have the meaning ascribed thereto in Paragraph V(A) of Schedule 1 hereto. "Operating Emergency" shall mean an event occurring at the Project which poses actual or imminent risk of serious personal injury or serious physical damage to the Project requiring immediate preventative or remedial action by the Operator and for which advance approval of SPV, the Lender and the Independent Engineer otherwise required under this Agreement would be impossible or impractical and for which there was no advance notice given to the Operator and the Owner of the need for such action. "Operating Work" shall have the meaning ascribed thereto in Section 1.2 hereof. -20- "Operations Manual" shall have the meaning ascribed thereto in Paragraph V(A) of Schedule 1 hereof. "Operation and Maintenance Costs" shall mean the costs, fees, expenses and disbursements duly incurred by the Operator for, with respect to, or in connection with Operating Work, to the extent described in Schedule 2 of this Agreement and otherwise in compliance with the terms and conditions hereof, including, without limitation costs and expenses incurred pursuant to Section 1.4(c)(iii). "Operator" shall have the meaning ascribed thereto in Section 1.1 hereof. "Outage Schedule" shall have the meaning ascribed thereto in Section 1.5 hereof. "Owner" shall have the meaning ascribed thereto in paragraph 2 of the Preliminary Statements hereof. "Project Budget" shall have the meaning set forth in Section 1.4(a)(iii) hereof. "Project Quarter" shall mean each of the 3-month periods, commencing at 12:00 a.m. on January 1, April 1, July 1, and October 1, except that the first Project Quarter shall commence on the Operation Commencement Date and the last Project Quarter shall end on the Ground Lease Expiration Date. "Replacement Operator" shall have the meaning ascribed thereto in Section 1.11(a) hereof. "Supplies" shall have the meaning ascribed thereto in Section 2.2(a) hereof. "Tolling Payment" shall have the meaning ascribed thereto in Section 3.2(a)(i) hereof. "Uncontrollable Forces" shall mean any cause beyond the control of the Person affected thereby that, by the exercise of reasonable diligence, such party is unable to overcome, and shall include acts of God, fire, flood, explosion, insurrection, riot, strike, sabotage, acts of the public enemy, acts of civil or military authority, and laws, rules and regulations of any Governmental Authority. ARTICLE 5. MISCELLANEOUS 5.1 Change of Control. Lime hereby covenants and agrees that, so long as any of the Secured Obligations are outstanding, it will continue to own, legally and beneficially, all of the Class A Common Stock of the SPV General Partner and all of the capital stock of the SPV Limited Partner, and will cause the SPV General Partner and the SPV Limited Partner to own, legally and beneficially, all of the partnership interests in the SPV. 5.2 Dispute Resolution. The parties hereto agree to make a diligent, good faith attempt to resolve each and every claim, dispute, disagreement or other matter in question (a "Controversy") between the parties that arises with respect to the terms and conditions of this Agreement or with respect to the performance by the parties of their respective obligations under -21- this Agreement. If the representatives of the parties are unable to resolve a Controversy informally within fifteen (15) days after notice from one party to the other, such Controversy shall be submitted promptly to the respective designated representative of each party. Such designated representatives shall meet, in person or by telephone, not later than seven (7) days after the date that such Controversy was submitted to them and shall issue a written opinion with respect to the Controversy within ten (10) days thereafter. In the event that the designated representatives cannot resolve the Controversy, each of the parties hereto shall have all of their respective rights and remedies provided under the Transaction Documents and at law or equity. During the pendency of any such Controversy, the parties shall continue to fulfill their respective obligations under this Agreement. 5.3 Term of Agreement. This Agreement shall be effective when executed and delivered by the parties hereto. This Agreement shall terminate (except such obligations as are expressed as surviving such termination) upon the final and indefeasible payment to the Lender of all of the Secured Obligations. 5.4 Notices. All notices, demands, declarations, consents, directions, approvals, instructions, requests and other communications required or permitted by the terms hereof shall be in writing and shall be given to any party hereto (a) in person or (b) by means of telecopy or other wire transmission, confirmed by same day mailing by registered or certified mail, or same day dispatch by overnight courier, in each case to the telecopy number and address provided in Schedule 6 hereto or at such other address as any party shall from time to time designate in writing to the other party or parties hereto in accordance with said Schedule 6. Any such communication shall become effective as to any party upon receipt thereof by such party and acknowledgement by telecopy of receipt by such party to the party sending any such communication. In addition, wherever in this Agreement there is a requirement for Lime, the Operator or the Owner to provide the SPV with any report, budget, schedule or notice, Lime, the Operator or the Owner, as the case may be, shall provide a duplicate copy thereof to the Collateral Agent at the same time and in the same manner as such report or notice is provided to the SPV. 5.5 Nature of Obligations. The duties, obligations and liabilities of each of the parties hereunder are intended to be several and not joint (or joint and several), and no party shall be jointly or severally liable for the acts, omissions or obligations of another party. Nothing herein contained shall be construed to create an association, joint venture or partnership, or impose a partnership duty, obligation or liability on or with regard to any of the parties. No party shall have the right or authority to bind another party without its express written consent, except as may be expressly provided in this Agreement. 5.6 Successors and Assigns. (a) This Agreement shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and permitted assigns. (b) The parties hereto hereby consent to assignment of this Agreement in whole or in part by the SPV to the Collateral Agent as security for the Secured Obligations and by Lime to the Existing Creditors' Agent on behalf of the Existing Creditors as security for the Existing Creditors Indebtedness (and to any further assignment or assignments by the Collateral Agent -22- and the Existing Creditors' Agent on behalf of the Existing Creditors in connection with, or following, an exercise of remedies with respect to such security). Neither the SPV nor Lime shall assign this Agreement except as contemplated by the preceding sentence. (c) Except in connection with an exercise of remedies by the Existing Creditors, none of the Operator, the Owner or Lime, may assign any of its rights or obligations under this Agreement to any other Person without the prior written consent of the SPV. The Owner hereby covenants that it shall not sell, assign, transfer or convey, or permit any such sale, assignment, transfer or conveyance of, its right, title and interest in and to the Black River Facility to any Person, unless such Person: (A) acquires in such transaction the entire Black River Facility (including the limestone mines); (B) has a tangible net worth of at least $50 million; (C) assumes all of the Owner's rights and obligations under Article 2, Article 3 and Article 5 hereof (other than Section 3.2(b) and Section 3.2(c), it being understood that the Owner, in such capacity, does not have any obligation under Section 3.2(b) or with respect to delivery of the Officer's Certificate to be delivered by Lime pursuant to Section 3.2(c)) pursuant to an instrument satisfactory in form and substance to the SPV; (D) provides a favorable opinion of counsel (which counsel and opinion shall be satisfactory to the SPV in all respects) as to the due authorization, execution and delivery by such Person of such instrument and as to the enforceability against such Person of this Agreement and such instrument and as to such other matters as the SPV may reasonably request; and (E) has the experience, personnel and expertise necessary to perform as Owner hereunder in the written opinion of the Independent Engineer (a Person meeting the requirements of clauses (A) through (E) above shall be referred to herein as an "Acceptable Transferee"). (d) Without limiting any of the requirements contained herein, in the event of a transfer of the Black River Facility to an Acceptable Transferee, Lime shall cooperate and use its best efforts to transfer (to the extent transferable without rendering void or voidable) any Governmental Approvals that it may hold which are necessary or desirable for the operation of the Black River Facility or the Project to the successor Owner, and Lime shall promptly deliver to such successor Owner all books, records, equipment, operating manuals, plans and specifications, tools, spare parts and all other materials used by Lime in its capacity as Operator or Owner hereunder, as the case may be. 5.7 Amendments. Neither this Agreement nor any of the terms hereof may be terminated, amended, supplemented, waived or modified orally, but only by an instrument in writing signed by the party against which the enforcement of the termination, amendment, supplement, waiver or modification is sought; provided, however, that it is understood and agreed that the Operator and the SPV may amend Article 1 and the Schedules hereto corresponding to such Article without the prior consent of the Owner, and the Owner and the SPV may amend Articles 2 and 3 and the Schedules hereto corresponding to such Articles without the prior consent of the Operator; provided, further, that any such action shall be subject to the provisions of Section 9.1 of the Intercreditor Agreement. 5.8 Consultations. Notwithstanding any other provision of this Agreement, the Operator and the Owner will, upon reasonable prior notice, consult with the SPV and its representatives and designees to review any matter pertaining to their respective obligations hereunder. -23- 5.9 Counterparts. This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. 5.10 Set-off. Each of the SPV, the Owner and the Operator shall have the right to set off any payments owing by it to either of the other two such Persons hereunder against payments owing by the Person against which such right of set-off is exercised. 5.11 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING ALL OTHER CHOICE-OF-LAW AND CONFLICTS-OF-LAW RULES EXCEPT TO THE EXTENT PRECLUDED BY THE MANDATORY APPLICATION OF ANOTHER STATE'S LAW). 5.12 Cooperation. The SPV, the Owner and the Operator will cooperate in good faith in all activities relating to the Project and the Black River Facility, including, without limitation, in the filing of applications for all Governmental Approvals and the execution of such other documents as may be reasonably necessary to carry out the provisions of this Agreement. The Operator and the Owner shall use their best efforts, and the SPV shall cooperate therewith, to obtain as quickly as possible all Governmental Approvals and vendor approvals required to be obtained by any Person for the transactions contemplated hereby. The SPV, the Owner and the Operator shall discharge all their respective obligations under this Agreement in good faith and in accordance with Prudent Industry Practice. The SPV shall cooperate with the Owner and the Operator in connection with the filing of applications for all Governmental Approvals but shall not be required to expend any funds or incur any liabilities in connection therewith. The SPV shall permit Lime, the Owner and the Operator (i) to make application, in the SPV's name, for any Governmental Approval necessary for the operation or maintenance of the Black River Facility and (ii) to utilize (to the extent permitted by Applicable Law) any Governmental Approval necessary for such operation or maintenance, and the SPV shall render reasonable cooperation to Lime, the Owner or the Operator, as the case may be, in connection therewith, provided that (a) such Governmental Approval can only be issued in the name of the SPV, (b) all costs and expenses related to such application or utilization are paid by Lime, the Owner or the Operator, and (c) neither Lime, the Owner nor the Operator has taken any action, or failed to take any action, which action or failure to act prohibits issuance of such Governmental Approval in the name of Lime, the Owner or the Operator, as the case may be. 5.13 Severability. Any provision of this Agreement that may be determined by competent authority to be prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. -24- FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT, OR ATTORNEY OF THE OTHER PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTY HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. 5.15 Jurisdiction; Consent to Service of Process. (a) Each of the parties hereto hereby irrevocably and unconditionally submits to the nonexclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State court or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Applicable Law. (b) Each of the parties hereto hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action, or proceeding arising out of or relating to this Agreement in any New York State court or Federal court of the United States of America sitting in New York City. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by Applicable Law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. (c) Each party to this Agreement irrevocably consents to service of process by certified mail. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by Applicable Law. 5.16 Consent of SPV. Wherever in this Agreement there is a requirement for Lime, the Operator or the Owner to obtain the consent or approval of the SPV, such requirement shall (unless specifically provided herein to the contrary) be deemed to mean and refer to the consent and approval of both the SPV and the Collateral Agent in consultation with the Independent Engineer. 5.17 Right to Cure. The Lender shall have the right to cure any failure to perform by the SPV hereunder until the later of (i) the expiration of any grace period applicable to such failure and (ii) ten (10) days after the Lender has knowledge of such failure. [remainder of page intentionally left blank; next page is signature page] -25- IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be duly executed by a duly authorized officer as of the day and year first above written. Operator: DRAVO LIME COMPANY By: A. H. TENHUNDFELD, JR. Name: A. H. Tenhundfeld, Jr. Title: Vice President Owner: DRAVO LIME COMPANY By: A. H. TENHUNDFELD, JR. Name: A. H. Tenhundfeld, Jr. Title: Vice President DRAVO BLACK RIVER LIMITED PARTNERSHIP: By: DBR General Inc. Its General Partner By: A. H. TENHUNDFELD, JR. Name: A. H. Tenhundfeld, Jr. Title: Vice President Accepted and Agreed to: DRAVO LIME COMPANY By: A. H. TENHUNDFELD, JR. Name: A. H. Tenhundfeld, Jr. Title: Vice President -26,27- SCHEDULE 1 OPERATING WORK I. Standard of Care. The Operator shall perform all of its duties and obligations under this Agreement in accordance with the standards mandated under the OPCO Agreement (and each other lime supply or processing agreement to which the SPV or the Owner may, from time to time, be a party), in a good, workmanlike and commercially reasonable manner and in accordance with Prudent Industry Practice. The Operator shall exercise such care and shall act diligently as a prudent business entity engaged in the business of managing and operating a limestone processing facility comparable to the Project owned by it (or its Affiliates) would exercise for the advancement and protection of its own economic interests. II. Insurance; Compliance with Insurance Policies, Governmental Requirements, etc. The Operator shall procure and maintain all insurance required to be maintained by the SPV under the Transaction Documents, and also shall be responsible for making and administering all claims on behalf of the SPV under insurance policies covering the SPV or the Project during the term of this Agreement. The Operator shall comply in all material respects with, and cause the Project and all Operator personnel to comply in all material respects with, all applicable standards required by Prudent Industry Practice, all insurance policies in effect from time to time with respect to the Project, all manufacturer's recommended guidelines, all Applicable Laws, all applicable Governmental Approvals and the Transaction Documents. Without limiting the generality of the foregoing, the Operator shall obtain and maintain at all times for the benefit of the SPV or its designee and the Project all material Governmental Approvals, and which can not be, or are not, issued in the name of the SPV. The Operator shall from time to time take such action as shall be necessary to have issued in the name of the SPV any such material Governmental Approval that must, by its nature, be issued in the name of the SPV in accordance with Applicable Law. III. Personnel. The Operator shall at all times employ, or cause to be employed, qualified personnel, properly trained to perform the Operating Work, and shall pay all wages and benefits required by Applicable Law or contract. The Operator shall be responsible for all matters relating to labor relations, working conditions, training, employee benefits, safety programs and related matters pertaining to its employees. IV Warranties and Guarantees. The Operator shall use reasonable efforts to obtain warranties for the SPV for parts, equipment, materials or services provided by third-party suppliers in fulfilling the Operator's obligations under this Agreement. The Operator shall comply with all applicable warranties and guarantees provided by manufacturers or contractors, and shall take no action that in any way impairs any rights or claims of the SPV under any manufacturer's, supplier's or other party's warranty. Without limiting the foregoing, the Operator shall use spare parts that will not adversely affect the SPV's protections or rights under such warranties or guarantees. V. Operation and Maintenance. The Operator shall operate and maintain the Project throughout the term of this Agreement and shall provide the following services hereunder: -28- A. Prior to the Operation Commencement Date. Prior to the Operation Commencement Date, the Operator shall, at its own cost and expense: (i) (A) secure or prepare an operations and maintenance manual (the "Operations Manual"). Such Operations Manual shall include all procedures necessary to operate the Project in compliance with this Schedule 1, and (B) upon approval of the Operations Manual by the Independent Engineer, the Operator shall develop and implement additional operating and maintenance procedures for the Project as may be necessary or appropriate for purposes of safety or for the efficient operation of the Project (the "O&M Procedures"). The Operator shall reference the previously supplied Operations Manual and develop and implement such supplemental procedures, as necessary or advisable, for equipment, components, systems or other portions of the Project. The O&M Procedures shall, among other things, include (A) Project-specific preventive maintenance procedures, (B) adequate safety and fire prevention measures and procedures, including, safety procedures for the safe operation and maintenance of primary Project equipment, and (C) adequate security measures and procedures. With respect to the maintenance of the Project, the O&M Procedures shall provide for the development of an annual major maintenance schedule defining outage time for regular overhaul work to be performed on the Project. (ii) As the General Contractor approaches completion of construction of the Project in accordance with the Transaction Documents, an orderly transition shall occur from construction (under the control and supervision of the General Contractor) to operation (under the control and supervision of the Operator). The Operator shall participate in an orderly process of transition from construction through check-out, completion, start-up, testing and acceptance of the Project by the SPV. During the period prior to the Operation Commencement Date, Operator shall use its best efforts to cooperate and coordinate with the General Contractor. (iii) Comply with the obligations, if any, imposed upon the Operator or any Affiliate of the Operator under the Project Contracts during the period of testing, said compliance to continue after the Operation Commencement Date. B. Commencing on Operation Commencement Date. Commencing on the Operation Commencement Date, the Operator shall, as authorized by the then applicable Project Budget: (i) provide all services necessary or advisable to use, operate and maintain the Project in good operating condition and in compliance with this Schedule 1, the Operations Manual, the O&M Procedures and the other applicable provisions of this Agreement; (ii) subject to the requirements of any prior approvals as set forth in Section 1.3 hereof, make payments for necessary Operation and Maintenance Costs; -29- (iii) review all Applicable Laws establishing compliance requirements in connection with the Operating Work; secure or renew, as necessary, appropriate Governmental Approvals required by any Person for the ownership and operation of the Project; (iv) establish and maintain a complete inventory of the Project (including but not limited to those items outlined in (v) and (vi) below owned by the SPV) and review and update the inventory at least semi-annually; (v) provide in accordance with the applicable Project Budget, all materials, supplies, parts, equipment, vehicles and other items necessary for the operation and maintenance of the Project, which are in addition to the Project as constructed and which are not required to be provided by the Owner pursuant to Article 2 hereof (in which case, the Operator shall cause the Owner to provide the same); (vi) maintain an appropriate spare parts inventory for other components of the Project and replace equipment, material or parts in the inventory as necessary or advisable from time to time (including equipment, material and parts necessary for the operation of a scale for weighing kiln feed for the Project Kilns, unless such function is already being adequately performed at the Black River Facility by another Person). The Operator shall periodically review the adequacy of the spare parts inventory and procedures for the automatic replacement of spare parts; (vii) make available all equipment, tools and clothing as are necessary to accomplish routine maintenance and major and emergency repairs to the components of the Project including, but not limited to, cranes, forklifts, electronic test equipment and special tools, if any, recommended by the manufacturer of the components; (viii) perform, or cause to be performed by subcontractors, all rebricking and other maintenance activities required consistent with the Transaction Documents, the Operations Manual and the O&M Manuals to maintain the Project in good working condition and capable of operating at maximum profitability, consistent with Prudent Industry Practice (including recalibrating the scale for weighing kiln feed for the Project Kilns as necessary, unless such function is already being adequately performed at the Black River Facility by another Person). Make changes to the Operations Manuals and O&M Procedures, if required or desirable, in order to facilitate efficient and safe operation and maintenance of the Project; (ix) provide administrative and procurement services related to the Operating Work as necessary; (x) retain any failed components for inspection if required by manufacturers' and suppliers' insurance carriers, and cooperate with such carriers' personnel regarding such inspections; -30- (xi) provide commercially reasonable safety and security measures for the Project; (xii) maintain complete and accurate records of all operation and maintenance activities relating to the Project and maintain any operating logs which the SPV may be required to prepare under the Transaction Documents or which are required under any warranties or any insurance policies; (xiii) deliver processed lime to OPCO in accordance with the OPCO Agreement, bill OPCO for deliveries made and check the payments made by OPCO under the OPCO Agreement, and take any actions necessary to collect amounts owed by OPCO under the OPCO Agreement. (xiv) coordinate for the SPV and implement all manufacturers' requirements for plant data reports and warranty claims and, as appropriate, provide recommendations as to revisions to the Operations Manual and O&M Procedures; (xv) provide all technical support and other services reasonable and necessary for the operation and maintenance of the Project; (xvi) provide notices to the SPV and the Collateral Agent, all in reasonable detail and promptly upon learning of the event requiring notice, as follows: (a) notice of any material occurrence which is covered by any warranty given by the manufacturer of any part of, or equipment relating to, the Project; (b) notice of any actual or potential material violation of any Applicable Law, including, without limitation, Environmental Laws; and (c) notice of all events, occurrences, conditions and issues of which Operator shall become aware and which the Operator reasonably considers are material to, or are likely to have a material effect on, the Project or the operation, maintenance or results of operations thereof (including notice of any occurrence of any Event of Default or Loss Event), and shall endeavor to keep the SPV informed on a timely basis with regard thereto. Without limiting the generality of the foregoing, all notices of Liens and claims of Liens shall be deemed material to the Project; (xvii) provide written recommendations to the SPV of actions to repair any material damage to any major component of the Project, to prevent the recurrence of any such damage or to respond to any event described in clause (xvi) above or improve the profitability of the Project, including estimates of the costs of implementation of such recommended actions; -31- (xviii) take such other action as may from time to time be necessary or appropriate to enable the SPV to be in compliance with the obligations of the Producer" under the OPCO Agreement; (xix) keep, for a period of at least one year, records reflecting the daily amount of processed lime produced by the Project; and (xx) provide to the SPV such other information as the SPV may reasonably request. C. Emergencies. In the event of an Operating Emergency, Operator shall, subject to Section 1.3, perform such additional services outside the scope of the Project Budget then in effect as may be necessary to ensure the safety of personnel and property at the Project Land. D. Liens. Operator shall not, directly or indirectly, create, incur or, to the extent arising directly or indirectly by reason of the service contemplated hereunder, permit to exist any Lien on the Project (other than such Lien rights as arise by operation of law pending payment) except any such Lien that arises solely as a result of the SPV failing to make timely payment for any equipment, services, supplies, utilities or other items supplied or procured by the Operator under this Agreement. -32- SCHEDULE 2 OPERATION AND MAINTENANCE COSTS During the term of the Agreement, Operation and Maintenance Costs shall be determined as follows: 1. coal/petroleum coke - actual incremental cost of coal/petroleum coke consumed in operating the Project; 2. electricity - actual incremental cost of electricity consumed in operating the Project; 3. insurance - actual incremental cost of insurance attributable to Project; 4. actual incremental property taxes attributable to the Project; 5. labor - actual incremental cost of operating the Project and mining limestone and delivering limestone to the Project Kilns; 6. scheduled recurring capital expenditures for the Project actually made; 7. actual incremental expenses incurred pursuant to Section 1.4(c)(iii) hereof; and 8. actual incremental other costs for materials, supplies, mining and maintaining the Project ("Other Costs") - for purposes of disbursements to be made pursuant to Section 2.2(b)(ii)(A) of the Deposit and Disbursement Agreement in any month, the "Other Costs" component of Operation and Maintenance Costs shall be deemed to be the "Other Costs" projected for such month in the current Project Budget. Beginning in the second month after the Conversion Date and every month thereafter, there shall be a reconciliation of the previous month's projected "Other Costs" versus the actual amount thereof, and the disbursement to be made pursuant to Section 2.2(b)(ii)(A) of the Deposit and Disbursement Agreement on the fifteenth (15th) day of such following month shall be increased or decreased, as the case may be, to reflect actual "Other Costs" incurred for such previous month. "Other Costs" shall in no event include any costs related to any item listed in entries 1 to 7, inclusive on this Schedule 2. Operation and Maintenance Costs shall be determined using a methodology consistent with the methodology used in preparing the incremental analysis of costs attached to this Schedule 2 as Schedule 2-A. -33- SCHEDULE 3 SUPPLIES The Owner shall deliver, or cause to be delivered, to the Project the following Supplies at such times, in such quantities and with such qualities as shall permit the Operator to operate and maintain the Project in compliance with this Agreement, all of which Supplies, as well as the Owner, shall comply in all material respects with all applicable Governmental Approvals, Applicable Laws, Prudent Industry Practice, and all requirements under the insurance policies required to be in effect pursuant to the Transaction Documents, the Operations Manual and the O&M Procedures: 1. unprocessed limestone 2. electricity; 3. coal/petroleum coke; 4. solid and liquid waste storage and disposal; 5. effluent treatment; 6. utility access; 7. tools and spare parts; and 8. such other supplies, goods, materials and other products, items and services as the Operator may request for its performance of its obligations under this Agreement. -34- SCHEDULE 4 Description of Existing Lime Supply Contracts Dravo Lime Company January 13, 1994 Long Term Lime Contracts DLC Div Utility/Customer Station Unit Contract Minimum Expected Expiration Renewal Type* Annual Annual Date Tonnage Tonnage
Maysv Ohio Edison-CAPCO Bruce Mansfield 1,2,3 Take 327,600 420,000 12/31/06 2 5 Yr Terms Maysv Columbus So. Power Conesville 5&6 Take 51,000 70,000 12/31/96 None Maysv Allegheny Power Pleasants & 1&2 Take 163,200 170,000 12/31/94 None Mitchell 3 Incl. 30,000 Maysv Big Rivers Elec. Robert Reid 2&3 Take 85,000 90,000 12/31/97 2 5 Yr Terms (Green) Maysv Cincinnati Gas East Bend 2 T-Mins 50,000 30,000 12/31/00 2x300,000 Tns BL River Cincinnati Gas Zimmer 1 T-Mins 120,000 200,000 12/31/00 2x1,000,000 Tns BL River Ohio Power Co. (AEP) Gavin 1&2 Take 300,000 500,000 12/31/10 5 Year Term BL River Specialty Minerals Chillicothe & Require None 24,000 12/31/96 None West Carrollton * Contract Types Take = Take or pay T-Mins = Target Tonnage with Minimums Require = Requirements R-Mins = Requirements with Minimums
-35- EX-4 5 DEPOSIT AND DISBURSEMENT AGREEMENT DEPOSIT AND DISBURSEMENT AGREEMENT among WILMINGTON TRUST COMPANY, as Collateral Agent and WILMINGTON TRUST COMPANY, as Disbursement Agent and DRAVO BLACK RIVER LIMITED PARTNERSHIP Dated as of August 1, 1994 REGARDING BLACK RIVER FACILITY PROJECT CARNTOWN, KENTUCKY TABLE OF CONTENTS Page 1. APPOINTMENT OF DISBURSEMENT AGENT; ESTABLISHMENT OF THE ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.1 Acceptance of Appointment of Disbursement Agent. . . . . . . . 1 1.2 Creation of the Accounts . . . . . . . . . . . . . . . . . . . 2 1.3 Security Interests . . . . . . . . . . . . . . . . . . . . . . 2 2. DEPOSITS INTO AND DISBURSEMENTS FROM ACCOUNTS. . . . . . . . . . . . 3 2.1 Construction Account.. . . . . . . . . . . . . . . . . . . . . 3 2.2 Project Revenue Account. . . . . . . . . . . . . . . . . . . . 4 2.3 Debt Service Reserve . . . . . . . . . . . . . . . . . . . . . 6 2.4 Additional Reserve . . . . . . . . . . . . . . . . . . . . . . 8 2.5 Default Reserve. . . . . . . . . . . . . . . . . . . . . . . . 10 2.6 Casualty Account . . . . . . . . . . . . . . . . . . . . . . . 11 2.7 Construction Completion Account. . . . . . . . . . . . . . . . 12 2.8 Windup Account . . . . . . . . . . . . . . . . . . . . . . . . 12 2.9 Cure Rights. . . . . . . . . . . . . . . . . . . . . . . . . . 14 2.10 Permitted Investments. . . . . . . . . . . . . . . . . . . . . 14 3. THE DISBURSEMENT AGENT . . . . . . . . . . . . . . . . . . . . . . . 14 3.1 Appointment of Disbursement Agent; Powers and Immunities . . . 14 3.2 Reliance by Disbursement Agent . . . . . . . . . . . . . . . . 16 3.3 Court Orders . . . . . . . . . . . . . . . . . . . . . . . . . 16 3.4 Resignation or Removal of Disbursement Agent . . . . . . . . . 16 4. EXPENSES AND FEES. . . . . . . . . . . . . . . . . . . . . . . . . . 17 4.1 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 4.2 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 5. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 6. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 6.1 Delivery of Budget . . . . . . . . . . . . . . . . . . . . . . 18 6.2 Action by Disbursement Agent . . . . . . . . . . . . . . . . . 18 6.3 Books of Account; Statements.. . . . . . . . . . . . . . . . . 19 6.4 Amendments; Etc. . . . . . . . . . . . . . . . . . . . . . . . 19 6.5 Addresses for Notices. . . . . . . . . . . . . . . . . . . . . 19 6.6 Governing Law; Terms . . . . . . . . . . . . . . . . . . . . . 19 6.7 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 6.8 Limited Third Party Beneficiaries. . . . . . . . . . . . . . . 20 6.9 Satisfaction Requirement . . . . . . . . . . . . . . . . . . . 20 6.10 No Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . 20 6.11 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 20 -i- 6.12 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 20 6.13 Successors and Assigns . . . . . . . . . . . . . . . . . . . . 20 6.14 Amounts Available. . . . . . . . . . . . . . . . . . . . . . . 20 6.15 Change of Accounts . . . . . . . . . . . . . . . . . . . . . . 21 Schedule I - Account Numbers Schedule II - Term Note Amortization Schedule Schedule III - Payments to the Holders Exhibit A - Certificate pursuant to Section 2.2(b)(i) Exhibit B - Certificate pursuant to Section 2.2(b)(ii)(A)(1) Exhibit C - Certificate pursuant to Section 2.2(b)(ii)(A)(2) Exhibit D - Certificate pursuant to Section 2.2(b)(ii)(A)(3) Exhibit E - Certificate pursuant to Section 2.3(a)(ii) Exhibit F - Certificate pursuant to Section 2.3(b)(i) Exhibit G - Certificate pursuant to Section 2.3(b)(iii) Exhibit H - Certificate pursuant to Section 2.4(a) Exhibit I - Certificate pursuant to Section 2.4(b)(ii) Exhibit J - Certificate pursuant to Section 2.6(b)(i) Exhibit K - Certificate pursuant to Section 2.7(b) Exhibit L - Certificate pursuant to Section 2.8(b) -ii- DEPOSIT AND DISBURSEMENT AGREEMENT DEPOSIT AND DISBURSEMENT AGREEMENT, dated as of August 1, 1994, between WILMINGTON TRUST COMPANY, as Disbursement Agent and as Collateral Agent and DRAVO BLACK RIVER LIMITED PARTNERSHIP (the "SPV"). W I T N E S S E T H: WHEREAS, for purposes of this Agreement capitalized terms used but not otherwise defined herein shall have the respective meanings given such terms in Annex A to the Note Purchase Agreement; the rules of usage set forth in said Annex A shall apply to this Agreement; and WHEREAS, in order to finance the acquisition, construction and equipping of the Project and certain related expenditures, the SPV, among other things, has entered into the Note Purchase Agreement pursuant to which the Lender shall purchase the Notes; and WHEREAS, the Lender and any other holder or holders of any of the Notes from time to time shall be referred to herein individually as a "Holder" and collectively as the "Holders"; and WHEREAS, the Disbursement Agent is willing to act as Disbursement Agent hereunder and to hold and disburse the funds deposited hereunder in accordance with the terms of this Agreement; and WHEREAS, pursuant to the SPV Security Agreement, the SPV has, among other things, pledged its interest in the Accounts created hereunder to the Collateral Agent as security for the Secured Obligations; and WHEREAS, the Lender, the Collateral Agent and the SPV desire to appoint the Disbursement Agent to administer the Accounts established hereunder and to receive, deposit and disburse all Project Revenues, all on the terms and subject to the conditions set forth in this Agreement; NOW, THEREFORE, in consideration of the premises and in order to induce the Lender to purchase the Notes pursuant to the Note Purchase Agreement and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto hereby agree as follows: 1. APPOINTMENT OF DISBURSEMENT AGENT; ESTABLISHMENT OF THE ACCOUNTS 1.1 Acceptance of Appointment of Disbursement Agent. (a) Acceptance of Appointment. The Disbursement Agent is hereby appointed and agrees to act as the Disbursement Agent for all Project Revenues and all other revenues, receipts, monies, proceeds and other sums derived in any manner from or constituting the Collateral. The Disbursement Agent shall hold and safeguard each Account during the term of this Agreement and shall treat the cash, instruments and securities in such Account as SPV Collateral. -1- (b) No SPV Rights. Neither the SPV nor any Affiliate thereof shall have any rights against the Disbursement Agent (other than rights which may arise as a result of the Disbursement Agent's gross negligence or wilful misconduct), as a third party beneficiary or otherwise, including, without limitation, any right to direct the Disbursement Agent to distribute or allocate any funds in the Accounts. Any withdrawal, transfer or investment made or caused to be made in accordance with the provisions hereof is expressly understood to be made with the permission of the parties hereto. In performing its functions and duties under this Agreement, the Disbursement Agent shall act solely as agent for the Collateral Agent and does not assume and shall not be deemed to have assumed any obligation toward, or relationship of agency or trust with or for, the SPV or any of its Affiliates. 1.2 Creation of the Accounts. (a) Accounts. The Disbursement Agent hereby establishes the following special, segregated and irrevocable cash collateral accounts which shall be maintained at all times until the termination of this Agreement: (i) Construction Account, (ii) Project Revenue Account, (iii) Debt Service Reserve, (iv) Additional Reserve, (v) Default Reserve, (vi) Casualty Account, (vii) Construction Completion Account, and (viii)Windup Account. The account number for each Account is set forth on Schedule I hereto. All amounts from time to time in any Account shall be held in the name of the Disbursement Agent for the benefit of the Collateral Agent. All amounts at any time in any of the Accounts shall constitute a part of the SPV Collateral and shall not constitute payment of any obligation owing to the Holders until applied as hereinafter provided. (b) Bailment. The Collateral Agent hereby appoints the Disbursement Agent as its bailee of the SPV Collateral held by the Disbursement Agent hereunder, subject to the terms and conditions of this Agreement. 1.3 Security Interests; Revenues; Miscellaneous. (a) Security Interests in Project Revenues. Each of the parties (but in the case of the Disbursement Agent, solely in reliance upon the acknowledgment of the other -2- parties, without independent knowledge or investigation) hereby acknowledges that (i) the SPV has assigned the SPV Collateral (including the Accounts) to the Collateral Agent pursuant to the SPV Security Agreement and the other Transaction Documents. It is pursuant to the Collateral Agent's rights as holder of a security interest in the SPV Collateral that the Collateral Agent has the right to appoint a Disbursement Agent hereunder and otherwise has rights under this Agreement. (b) Direct Deposit of Project Revenues And Other Amounts. Subject to Section 2.8, the SPV agrees to arrange, and hereby confirms that it has arranged, for the direct payment to the Disbursement Agent (for the benefit of the Collateral Agent) of all Project Revenues. The SPV hereby agrees that all Project Revenues shall be deposited in the Project Revenue Account. To the extent any Project Revenues or other amounts (except the amounts specified in clauses (i) through (iii) of the definition of Project Revenues in Annex A to the Note Purchase Agreement) are at any time received by the SPV, the SPV will hold all Project Revenues and other such amounts (including all Substitute OPCO Revenues (as defined in Section 2.3(c) hereof)) in trust for the benefit of the Collateral Agent and will pay Project Revenues and other such amounts to the Disbursement Agent for deposit into the Project Revenue Account on the Business Day following receipt thereof (duly endorsed, if necessary, to the Disbursement Agent). Without limiting the generality of the foregoing, the SPV has instructed OPCO and any other Person to which it sells lime or any other commodity, or to which it provides any other services, to pay directly to the Disbursement Agent for deposit in the Project Revenue Account all amounts payable under the OPCO Agreement or otherwise and, with respect to other such Persons, the related agreement. (c) UCC Filings. The Disbursement Agent shall take such action as may be requested by the SPV or the Collateral Agent in order to comply with the provisions of the Uniform Commercial Code (as in effect in any applicable jurisdiction) governing the establishment, preservation, protection or perfection of security interests in the Accounts. 2. DEPOSITS INTO AND DISBURSEMENTS FROM ACCOUNTS The SPV hereby authorizes the Disbursement Agent to make the following deposits and withdrawals with respect to the Accounts. All obligations with regard to deposits and disbursements set forth in any provision of this Section are subject to the wind-up provisions set forth in Section 2.8 and the cure rights set forth in Section 2.9. 2.1 Construction Account. (a) Deposits. The Disbursement Agent shall deposit into the Construction Account (i) all amounts advanced by the Lender pursuant to the Note Purchase Agreement and transferred by the Lender to the Disbursement Agent for deposit into the Construction Account and (ii) all amounts contributed by Lime, through the Partners, pursuant to Section 3.15 of the Lime Security Agreement and transferred by Lime to the Disbursement Agent for deposit into the Construction Account. -3- (b) Disbursements. The Disbursement Agent shall disburse funds in the Construction Account, within one Business Day of its receipt of such funds, to the Persons and in the amounts set forth in the Approved Draw Request pursuant to which such funds were advanced by the Lender. In addition, on the Conversion Date, after giving effect to the Advance, if any, to be made on such date pursuant to the Note Purchase Agreement, and upon (i) the purchase of the Term Notes by the Lender on such date and (ii) the disbursement of funds, if any, into the Construction Completion Account and the Debt Service Reserve in compliance with Section 8.19 of the Note Purchase Agreement, the Disbursement Agent shall disburse to the SPV all moneys on deposit in the Construction Account up to, but not in excess of, Five Million Three Hundred Thousand Dollars ($5,300,000). 2.2 Project Revenue Account. (a) Deposits. The Disbursement Agent shall deposit in the Project Revenue Account all moneys required to be deposited into the Project Revenue Account from any other Account pursuant to the provisions hereof or any other Transaction Document, and all Project Revenues and other amounts required to be deposited into the Project Revenue Account by Section 1.3(b) hereof, including, without limitation: (i) all payments received from the Operator and the Owner under the MCFA; and (ii) all payments received from OPCO or any other Person for goods or services supplied by the Project. If the conditions for disbursement from any Account to the Project Revenue Account have been satisfied on any Debt Payment Date (whether due to an overfunding of such Account or otherwise), the amount to be disbursed from the Project Revenue Account on such date shall include the amount to be disbursed from such other Account to the Project Revenue Account on such date. (b) Disbursements. (i) If, prior to the Conversion Date, funds are deposited into the Project Revenue Account in respect of sales of processed lime other than Substitute OPCO Revenues, the Disbursement Agent shall disburse from the Project Revenue Account to the Operator so long as the Operator is not in default of its obligations under the MCFA (or if any such default exists, the grace period, if any, in respect thereof has not expired (it being understood that "grace period" does not include any cure period referred to in Section 6 of the Intercreditor Agreement)), the Operation and Maintenance Costs attributable to such sales of lime as determined in accordance with the methodology to be observed in determining Operation and Maintenance Costs under Project Budgets, as specified in a certificate (in the form of Exhibit A hereto) executed by Lime and delivered by the SPV to the -4- Disbursement Agent and the Lender at least 5 days before such disbursement is to be made. (ii) From and after the Conversion Date, the Disbursement Agent shall disburse from the Project Revenue Account, in the following order of priority, on each Debt Payment Date (except with respect to subclause (A) below in which event disbursements shall be made as therein provided), so that, if there shall be insufficient funds in the Project Revenue Account to make all payments then due, no payment set forth below shall be made until all amounts owing in respect of all payments then due with a higher priority shall have been paid in full: (A) First, (1) on the first Business Day of each month, to the Disbursement Agent and the Collateral Agent, all amounts due and owing in respect of fees and expenses of the Disbursement Agent and the Collateral Agent, as specified in a certificate (in the form of Exhibit B hereto) executed by the Disbursement Agent or the Collateral Agent, as the case may be, delivered to the Disbursement Agent and the Lender at least 5 days before such Business Day; (2) on Thursday of each week, to the Operator an amount due in respect of the Operator's payroll for the preceding week as specified in a certificate (in the form of Exhibit C hereto) executed by the Operator and delivered to the Disbursement Agent at least 2 Business Days prior to such date; (3) on the first and fifteenth days of each month, to Lime so long as Lime is not in default of its obligations under the MCFA (or if any such default exists, the grace period, if any, in respect thereof has not expired (it being understood that "grace period" does not include any cure period referred to in Section 6 of the Intercreditor Agreement)), the amount due and owing under the MCFA including, without limitation, Operation and Maintenance Costs and the costs of lime production at the Maysville Facility and the Black River Facility payable by the SPV pursuant to Section 3.4 of the MCFA and not required to be disbursed pursuant to Section 2.3(b)(i) hereof, as specified in a certificate (in the form of Exhibit D hereto) executed by Lime and delivered by the SPV to the Disbursement Agent and the Lender at least 5 days before such date; and (4) if the amounts on deposit in the Project Revenue Account are insufficient to pay all such fees and expenses, on any date, then ratably to the Persons owed such amounts in accordance with the respective amounts owing to each on such date; -5- provided that no such payment shall be made pursuant to this subclause (A) in respect of any expenditure if such expenditure would violate any provision of Section 1.4(c) of the MCFA. (B) Second, to the account specified in Schedule III hereto in partial satisfaction of the SPV's obligation to pay Debt Service an amount equal to the sum of (1) the Debt Service Payment then due and payable, plus (2) the aggregate amount, if any, of all prior Debt Service that remains unpaid on such Debt Payment Date (together with interest on such unpaid amount at the Late Payment Rate); (C) Third, to the Debt Service Reserve, all remaining amounts in the Project Revenue Account until no further deposits are required to be made into the Debt Service Reserve, as set forth in Section 2.3(a); (D) Fourth, to the Additional Reserve, the amount, if any, required to be deposited therein pursuant to Section 2.4(a); (E) Fifth, to the Default Reserve, the amount, if any, required to be deposited therein pursuant to Section 2.5(a); (F) Sixth, to Lime, all amounts remaining after the payments required by the foregoing clauses (A) to (E), inclusive. 2.3 Debt Service Reserve. (a) Deposits. The Disbursement Agent shall deposit into the Debt Service Reserve the following amounts: (i) prior to the Conversion Date, all Substitute OPCO Revenues which may at any time have been paid to the Project Revenue Account, immediately upon the receipt thereof, (ii) on the Conversion Date, such amounts, if any, as are (x) borrowed on the Conversion Date by the SPV pursuant to Section 1.4 of the Note Purchase Agreement and paid to the Disbursement Agent in respect of the Required Reserve Payment as specified in a certificate (in the form of Exhibit E hereto) delivered to the Disbursement Agent by the SPV and (y) payable by Lime pursuant to Section 3.15 of the Lime Security Agreement, and (iii) from and after the Conversion Date, 100% of Excess Cash Flow from the Project Revenue Account, until the aggregate amount on deposit in the Debt Service Reserve shall equal One Year's Debt Service. (b) Disbursements. -6- (i) Prior to the Conversion Date, the Disbursement Agent shall disburse from the Debt Service Reserve on the first and fifteenth days of each month, to Lime so long as Lime is not in default of its obligations under the MCFA (or if any such default exists, the grace period, if any, in respect thereof has not expired (it being understood that "grace period" does not include any cure period referred to in Section 6 of the Intercreditor Agreement)), the amount due and owing to Lime under Section 3.4 of the MCFA, as specified in a certificate (in the form of Exhibit F hereto) executed by Lime and delivered by the SPV to the Disbursement Agent and the Lender at least 5 days before such date. (ii) The Disbursement Agent shall disburse funds from the Debt Service Reserve to the Lender on each Debt Payment Date if the amount available for disbursement on such date from the Project Revenue Account for the payment of Debt Service due on or prior to such date shall be less than the amount of such Debt Service (the amount of such shortfall being referred to herein as the "Debt Service Shortfall"). The amount of such disbursement shall be equal to the lesser of (x) the Debt Service Shortfall minus any amount applied to the Debt Service Shortfall from the Additional Reserve and (y) the amount on deposit in the Debt Service Reserve. (iii) Upon receipt of a certificate (in the form of Exhibit G hereto) executed by the SPV and the Collateral Agent in respect of an overfunding of the Debt Service Reserve, the Disbursement Agent shall disburse funds from the Debt Service Reserve to the Project Revenue Account on each Debt Payment Date to the extent that the aggregate amount on deposit in the Debt Service Reserve shall exceed One Year's Debt Service (whether by reason of interest and other sums earned in respect of the Debt Service Reserve or otherwise), as specified in such certificate. The Collateral Agent shall be obligated to deliver such a certificate to the Disbursement Agent after it has received evidence satisfactory to it from the SPV that any such excess shall exist. (c) Definitions. As used in this Agreement, the following terms shall have the following meanings: (i) "Excess Cash Flow" means, as of any date of determination and for any period, the amount by which (A) the aggregate amount of all Project Revenues in respect of such period paid on or prior to the date of determination, exceeds (B) the aggregate amount of disbursements required to be made by the Disbursement Agent during such period (whether or not actually made) pursuant to subclauses (1) through (4), inclusive, of Section 2.2(b)(ii)(A) and pursuant to Section 2.2(b)(ii)(B). (ii) "One Year's Debt Service" means, the largest aggregate amount of principal and interest scheduled to be paid in respect of the Notes during any -7- period of twelve consecutive months ending on or prior to the maturity of the Term Notes, in each case as determined by reference to Schedule II hereto. (iii) "Substitute OPCO Revenues" means all amounts payable by OPCO under the OPCO Agreement in respect of lime which was not processed by the Project. 2.4 Additional Reserve. (a) Deposits. If, either (i) on any Debt Payment Date, the Debt Service Coverage Ratio for the Interim Period most recently ended as of such date was equal to or less than 1.30 to 1, or (ii) on any Debt Payment Date, the Projected Debt Service Coverage Ratio for each of the two consecutive Interim Periods immediately following such most recently ended Interim Period is equal to or less than 1.30 to 1, then, on such Debt Payment Date and on each Debt Payment Date thereafter, upon receipt of a certificate (in the form of Exhibit H hereto) (an "Additional Reserve Certificate") executed by the Collateral Agent in respect of such conditions, the Disbursement Agent shall disburse 100% of Excess Cash Flow, net of any deposits required to be made into the Debt Service Reserve pursuant to Section 2.3(a), from the Project Revenue Account and deposit such sum into the Additional Reserve until the Debt Payment Date on which both (x) the Debt Service Coverage Ratio for each of the two then most recently ended Interim Periods, and (y) the Projected Debt Service Coverage Ratio for each of the two consecutive Interim Periods immediately following the then most recently ended Interim Period, shall be equal to or greater than 1.40 to 1. Effective as of the Debt Payment Date on which both of the conditions set forth in the foregoing subclauses (x) and (y) shall be satisfied, but only upon its receipt of an Additional Reserve Certificate executed by the Collateral Agent in respect of such conditions, the Disbursement Agent shall make no further such disbursements from the Project Revenue Account pursuant to this Section 2.4(a) but all Excess Cash Flow theretofore deposited into the Additional Reserve pursuant to this Section 2.4(a) shall remain on deposit therein (subject to disbursement as provided herein); provided, however, that, at such time as either of the conditions set forth in the foregoing clauses (i) and (ii) shall again be satisfied, and upon its receipt of an appropriate Additional Reserve Certificate, the Disbursement Agent shall again make the deposits provided for in the first sentence of this Section 2.4(a). The Collateral Agent shall be obligated to deliver an appropriate Additional Reserve Certificate to the Disbursement Agent if, after either of the conditions set forth in the foregoing clauses (i) and (ii) have occurred, it shall have received evidence satisfactory to it from the SPV that both of the conditions set forth in the foregoing clauses (x) and (y) have been satisfied. (b) Disbursements. (i) The Disbursement Agent shall disburse funds from the Additional Reserve to the Lender on any Debt Payment Date if there shall be a Debt Service -8- Shortfall on such date. The amount of such disbursement shall be equal to the lesser of (A) the Debt Service Shortfall for such date and (B) the amount on deposit in the Additional Reserve. (ii) If, on any Debt Payment Date, (A) the Debt Service Coverage Ratio for each of the two then most recently ended Interim Periods was equal to or greater than 1.50 to 1 and (B) the Projected Debt Service Coverage Ratio for each of the two consecutive Interim Periods immediately following the then most recently ended Interim Period is equal to or greater than 1.50 to 1, the Disbursement Agent shall, upon receipt of a certificate (in the form of Exhibit I hereto) (an "Additional Reserve Disbursement Certificate") executed by the SPV and the Collateral Agent in respect of such conditions, disburse all amounts on deposit in the Additional Reserve and deposit such funds into the Project Revenue Account for disbursement as provided in Section 2.2. The Collateral Agent shall be obligated to deliver an Additional Reserve Disbursement Certificate to the Disbursement Agent after it shall have received evidence satisfactory to it from the SPV that the conditions set forth in the foregoing clauses (A) and (B) have been satisfied. (iii) As used in this Section 2.4, the following terms shall have the following meanings: (A) "Projected Debt Service Coverage Ratio" means, for any period, the ratio of (1) the amount of all Project Revenues projected to be paid during such period minus the aggregate amount of disbursements projected to be made by the Disbursement Agent during such period pursuant to subclause (A) of Section 2.2(b)(ii), to (2) the aggregate amount of disbursements projected to be made by the Disbursement Agent during such period in respect of payments pursuant to subclause (B) of Section 2.2(b)(ii), in each case as set forth in the Project Budget (or the Extended Project Budget if applicable) delivered to the Disbursement Agent and the Collateral Agent in respect of such period. (B) "Debt Service Coverage Ratio" means, as of any date of determination and for any period, the ratio of (1) the amount of all Project Revenues in respect of such period paid on or prior to the date of determination, minus the -9- disbursements required to be made by the Disbursement Agent during such period (whether or not actually made) pursuant to subclause (A) of Section 2.2(b)(ii), to (2) the aggregate amount of disbursements required to be made by the Disbursement Agent during such period in respect of payments (whether or not actually made) pursuant to subclause (B) of Section 2.2(b)(ii). 2.5 Default Reserve. (a) Deposits. On any Debt Payment Date when an Event of Default exists, unless otherwise instructed by the Collateral Agent, and so long as no deposits are required to be made into the Additional Reserve on such date pursuant to Section 2.4(a) (it being understood that no deposit shall be made into the Default Reserve at any time if a deposit is required to be made into the Additional Reserve at such time), the Disbursement Agent shall disburse 100% of Excess Cash Flow, net of any deposits required to be made into the Debt Service Reserve pursuant to Section 2.3(a), from the Project Revenue Account and deposit such amount into the Default Reserve; provided, however, that if, (i) (A) on the immediately preceding Debt Payment Date one or more Dravo-Related Defaults existed and no other Event of Default existed, and (B) the Disbursement Agent made the disbursement and deposit in respect thereof, as contemplated by this Section 2.5(a), and (ii) on such then current Debt Payment Date, the only Event of Default in existence is the Dravo-Related Default or Dravo-Related Defaults that were in existence on such immediately preceding Debt Payment Date, then no such disbursement and deposit shall be made on such then current Debt Payment Date. All amounts deposited into the Default Reserve at any time when an Event of Default, other than a Dravo- Related Default, exists shall remain on deposit in the Default Reserve, regardless of whether such Event of Default shall thereafter be cured or otherwise cease to exist, and regardless of whether a Dravo-Related Default existed at the same time as such Event of Default. (b) Disbursements. All amounts deposited into the Default Reserve at any time when the only Event of Default which exists is a Dravo-Related Default shall remain on deposit in the Default Reserve until the first Debt Payment Date on which no Event of Default shall exist, at which time such amounts shall be disbursed from the Default Reserve and deposited into the Project Revenue Account for disbursement as provided in Section 2.3(b). (c) Knowledge of Defaults. The Disbursement Agent shall not be deemed to have knowledge of an Event of Default unless and until it shall have received notice thereof from the SPV, the Lender or the Collateral Agent, and shall assume that no Event of Default exists except Events of Default in respect of which it shall have received such -10- notice. The Disbursement Agent shall assume that each Event of Default of which it has received notice is continuing until such time as it shall receive notice from the Lender or the Collateral Agent that such Event of Default has been cured. The Collateral Agent shall be obligated to deliver such notice to the Disbursement Agent promptly after it receives notice from the Holders that any Event of Default has been cured. 2.6 Casualty Account. (a) Deposits. Each party hereto acknowledges and agrees that if it shall receive any proceeds (other than proceeds of any business interruption policy) in respect of a Loss Event (collectively, "Casualty Proceeds") which is a Partial Loss, such party shall promptly remit such Casualty Proceeds (less the actual costs, fees, and expenses incurred in the collection thereof as certified in a certificate executed by the SPV or Lime) to the Disbursement Agent for deposit into the Casualty Account, together with a certificate stating the source of the Casualty Proceeds, a detailed description of the Partial Loss giving rise to such party's receipt thereof, and instructions to deposit such Casualty Proceeds into the Casualty Account. Until such time that such party shall remit such Casualty Proceeds to the Disbursement Agent, it shall hold such proceeds in trust for the benefit of the Disbursement Agent for application as provided herein. (b) Disbursements. (i) If (A) the aggregate Casualty Proceeds received by the Disbursement Agent in respect of any single Partial Loss shall not exceed Five Hundred Thousand Dollars ($500,000), (B) the SPV shall, at least ten days prior to any disbursement pursuant to this Section 2.6(b), deliver to the Disbursement Agent and the Lender a certificate (in the form of Exhibit J) setting forth, inter alia, a detailed description of the repairs to be effected with such Casualty Proceeds, a certification that the sum of (x) the amount of such Casualty Proceeds, plus (y) the applicable deductibles and self-insured amounts under the SPV's insurance policies, is not less than the amount of such repairs and an undertaking to complete such repairs, and (C) no Event of Default shall exist at the time of proposed disbursement, the Disbursement Agent shall disburse such Casualty Proceeds to (or at the direction of) the SPV in the amounts specified in such certificate. (ii) If the aggregate Casualty Proceeds received by the Disbursement Agent in respect of any single Partial Loss shall exceed Five Hundred Thousand Dollars ($500,000) and no Event of Default shall exist, the Disbursement Agent shall disburse such proceeds to the SPV from time to time, in each case upon presentation to the Disbursement Agent of a request therefor, approved by the Independent Engineer: (A) specifying the amount so to be disbursed, (B) annexing invoices (not previously used as a basis for any disbursement of funds pursuant to this Section 2.6(b)(ii)) demonstrating expenditures made or to be made by the SPV upon receipt of such funds for repair and/or replacement of the Project and (C) certifying that (i) such repair and/or replacement is technically feasible for a cost not in excess of the sum of (x) the amount of available Casualty Proceeds plus (y) the applicable deductibles and self-insured amounts under the -11- SPV's insurance policies, and (2) such repair and/or restoration is proceeding in compliance with the SPV's obligations under Section 11.2 of the Note Purchase Agreement and the other Transaction Documents. (c) Knowledge of Defaults. The Disbursement Agent shall determine the existence or non-existence of an Event of Default in the manner provided in Section 2.5(c). 2.7 Construction Completion Account. (a) Deposits. On the Conversion Date, the SPV, pursuant to Section 8.19 of the Note Purchase Agreement, shall deposit into the Construction Completion Account an amount equal to 100% of the aggregate cost of completing the Punch List Items. (b) Disbursements. From time to time, upon the request of the SPV (or Lime as Construction Manager) made pursuant to a certificate (in the form of Exhibit K hereto) approved by the Independent Engineer and the Lender and delivered to the Disbursement Agent at least five days prior to the proposed disbursement date, the Disbursement Agent shall disburse from the Construction Completion Account the amount set forth in such certificate to pay the cost of completed Punch List Items. Such disbursement shall be made directly to Lime for payment to such Persons as the SPV shall specify in such certificate. Following receipt by the Disbursement Agent of a notice from the SPV that all Punch List Items have been completed and the cost thereof has been paid, the Disbursement Agent shall disburse any remaining balance in the Construction Completion Account and deposit such balance into the Project Revenue Account. 2.8 Windup Account. (a) Deposits. The Disbursement Agent shall deposit into the Windup Account any of the following amounts received from any Person: (i) Casualty Proceeds (less the actual costs, fees and expenses incurred in the collection thereof as certified in a certificate executed by the SPV or Lime) received as a result of the occurrence of a Total Loss; and (ii) all amounts received as a result of the exercise of any remedy under any Transaction Document. (b) Disbursements. (i) Any provision of this Agreement to the contrary notwithstanding (subject, however, to the proviso set forth below), upon receipt of a certificate (in the form of Exhibit L hereto) executed by the Collateral Agent stating that a Windup Event has occurred and is continuing and specifying the nature of same, the Disbursement Agent shall not make any further transfers pursuant to any Section of this Agreement other than this Section 2.8 and shall transfer to the Windup Account (x) all amounts then on deposit in all other Accounts and (y) all -12- Project Revenues and other amounts then held or subsequently received by the Disbursement Agent which would otherwise have been deposited in any Account. On the date or dates specified in such certificate or in a subsequent certificate executed by the Collateral Agent, the Disbursement Agent shall make disbursements from the Windup Account in the following order of priority (so that, if there shall be insufficient funds to make all such payments, no payment set forth below shall be made until all amounts owing in respect of all payments with a higher priority shall have been paid in full): (A) First, to the payment of the costs and expenses of foreclosure or suit, if any, and of the sale of the Collateral, and all proper expenses, liability and advances, including reasonable legal expenses and attorneys' fees, incurred or made by the Collateral Agent and the Disbursement Agent, and all taxes, assessments or Liens superior to the Lien of the Collateral Agent on the Collateral, except any taxes, assessments or other superior Lien subject to which said sale may have been made; (B) Second, to the payment of all reasonable expenses, liabilities and advances, including reasonable legal expenses and attorneys' fees, incurred or made by the Holders; (C) Third, to the payment of the accrued and unpaid interest on the Notes then outstanding, and, in case such proceeds shall be insufficient to pay in full such amounts, then ratably to each Holder according to the aggregate principal amount of Notes held by each; (D) Fourth, to the payment of the unpaid principal amount of the Notes then outstanding and, in case such proceeds shall be insufficient to pay in full the entire principal amount so unpaid, then ratably to each Holder according to the aggregate principal amount of Notes held by each; (E) Fifth, to the payment of the Make-Whole Amount, if any, then unpaid with respect to the outstanding Notes and, in case such proceeds shall be insufficient to pay in full such amounts, then ratably to each Holder according to the principal amount of Notes held by each; (F) Sixth, to the payment of all other amounts owed with respect to the Notes and the other Secured Obligations and, in case such proceeds shall be insufficient to pay in full such amounts, then ratably to each holder thereof; and (G) Seventh, to Lime or to whomever else may be entitled thereto pursuant to the Transaction Documents or applicable law. (ii) As used herein, "Windup Event" means the occurrence of any of the following events: -13- (A) the occurrence of a Total Loss; or (B) the acceleration of the principal balance of the Notes. 2.9 Cure Rights. Any payments made to the Disbursement Agent by any Person exercising any cure right pursuant to Article 6 of the Intercreditor Agreement shall be deposited into the Account designated by such Person in a notice accompanying such payment and shall be applied as herein provided. If no Account shall be designated, such amount shall be deposited into the Project Revenue Account and applied as herein provided. 2.10 Permitted Investments. The Disbursement Agent shall invest any cash held in any Account from time to time in Permitted Investments. All such investments shall be made so as to mature on or prior to the date or dates on which the Disbursement Agent anticipates that funds therein will be required for disbursements to be made hereunder (but the Disbursement Agent shall use its best efforts to invest in Permitted Investments with the longest available maturity consistent with such requirement). Any income or gain realized as a result of any such investment shall be held as part of the applicable Account and reinvested as provided in this Agreement until disbursed in compliance with this Section 2. For purposes of any income tax payable on account of any such income or gain, such income or gain shall be for the account of the SPV. The Disbursement Agent shall have no liability for any loss resulting from any such investment other than by reason of its wilful misconduct or gross negligence. Any such investment may be liquidated by the Disbursement Agent, in a manner intended to minimize any loss of principal prior to maturity, whenever necessary to make any deposit, distribution or transfer required by this Agreement. The Disbursement Agent shall not be liable to any Person for any investment loss resulting from any such liquidation of investments. 3.1 Appointment of Disbursement Agent; Powers and Immunities. (a) Appointment of Disbursement Agent. The Collateral Agent, on behalf of the Lender, hereby irrevocably appoints and authorizes the Disbursement Agent to act as its agent hereunder, with such powers as are expressly delegated to the Disbursement Agent by the terms of this Agreement and such other powers as are reasonably incidental thereto; and the SPV consents to such appointment. (b) Duties and Responsibilities. The Disbursement Agent shall not have any duties or responsibilities except those expressly set forth in this Agreement. Without limiting the generality of the foregoing, prior to satisfaction in full of the Secured Obligations, the Disbursement Agent shall take all actions as the Collateral Agent shall direct it in writing to perform in accordance with the provisions of this Agreement. The Disbursement Agent shall not take any actions hereunder except in accordance with such instructions and shall be fully protected in acting, or in refraining from acting, hereunder in accordance with such instructions. Notwithstanding anything to the contrary contained -14- herein, the Disbursement Agent shall not be required to take any action which is contrary to this Agreement or applicable law or which in its reasonable judgment would involve it in expense or liability unless it has been furnished with adequate indemnity to its reasonable satisfaction against such expense or liability. The Disbursement Agent shall not have any duties or responsibilities except those expressly set forth herein and those necessarily incidental thereto, and no implied covenants, functions, responsibilities or duties on the part of the Disbursement Agent shall be read into this Agreement or shall otherwise exist against the Disbursement Agent. (c) Disclaimer of Representations, etc. by Other Persons. Neither the Disbursement Agent nor any of its Affiliates shall be responsible to any Person for any recitals, statements, representations or warranties made by any other Person contained in this Agreement or any other Transaction Document or in any certificate or other document referred to or provided for herein or therein, for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Transaction Document or any other document referred to or provided for herein or therein, or for any failure by the SPV or the Collateral Agent, to perform their respective obligations hereunder or thereunder. Except as expressly stated in the Transaction Documents, the Disbursement Agent shall not be required to ascertain or inquire as to the performance by the SPV or the Collateral Agent of any of their respective obligations under this Agreement, any other Transaction Document, or any other document or agreement contemplated hereby or thereby. The Disbursement Agent shall not be (i) required to initiate or conduct any litigation or collection proceeding hereunder or under any other Transaction Document or (ii) responsible for any action taken or omitted to be taken by it hereunder or in connection herewith or therewith, except for its own gross negligence or wilful misconduct. (d) Consultation with Experts, Obtaining Instructions, etc. Whenever in the administration of this Agreement the Disbursement Agent shall deem it necessary or desirable that a factual matter be proved or established in connection with the Disbursement Agent's taking, suffering or omitting to take any action hereunder, such matter (unless other evidence in respect thereof is herein specifically prescribed) may be deemed to be conclusively proved or established by a certificate of the SPV, the Collateral Agent or the Lender required to be delivered pursuant to the provisions hereof. The Disbursement Agent may consult with counsel, accountants or other experts, and any opinion of such counsel, accountants or other experts shall be full authorization and protection in respect of any action taken, suffered or omitted by the Disbursement Agent under this Agreement in accordance therewith. The Disbursement Agent shall have the right at any time to seek instructions concerning the administration of this Agreement from any court of competent jurisdiction, or, prior to satisfaction in full of the Secured Obligations, from the Collateral Agent. The Disbursement Agent shall provide a copy of any certificate received pursuant to this Section to the SPV, and shall inform the SPV in the event that it consults with, or seeks the opinion of, any counsel, accountant, or other expert, or seeks instructions from any court. The Disbursement Agent may execute any of its duties hereunder through agents or attorneys-in-fact and shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care. -15- 3.2 Reliance by Disbursement Agent. The Disbursement Agent shall be entitled to rely upon any signature, certificate, notice or other document (including any cable, telegram, telecopy or telex) believed by it to be genuine and correct and to have been signed or sent by or on behalf of the proper Person or Persons so long as the Disbursement Agent confirms receipt of such certificate, notice or other document by delivery of a written acknowledgment to the sender prior to taking action in reliance thereon. The Disbursement Agent shall also be entitled to rely upon advice of legal counsel, independent accountants and other experts selected by the Disbursement Agent, and shall have no liability for its actions taken in reliance thereon, unless due to the Disbursement Agent's wilful misconduct or gross negligence. 3.3 Court Orders. (a) Retention of Funds Pending Resolution of Uncertainties, Disputes, etc. In the event of any uncertainty on the part of the Disbursement Agent, or any dispute, as to any amount to be transferred or paid pursuant to this Agreement, the Disbursement Agent is authorized and directed to retain in its possession the amount in question until such uncertainty or dispute shall have been resolved or settled or until it has been provided appropriate indemnification, in either case to its satisfaction. The Disbursement Agent shall not be liable to any Person on account of its exercise, in good faith, of its rights under this Section 3.3(a). (b) Compliance with Orders. The Disbursement Agent is hereby authorized and directed to obey and comply with all writs, orders, judgments or decrees issued by any court or administrative agency affecting any money, documents or things held by the Disbursement Agent. The Disbursement Agent shall not be liable to any of the parties hereto or the Lender by reason of the Disbursement Agent's compliance with such writs, orders, judgments or decrees, notwithstanding that such writ, order, judgment or decree is later reversed, modified, set aside or vacated. 3.4 Resignation or Removal of Disbursement Agent. Subject to the appointment and acceptance of a successor Disbursement Agent as provided below, the Disbursement Agent may resign at any time by giving notice thereof to all other parties hereto, and the Disbursement Agent may be removed at any time with or without cause by the Collateral Agent, at any time prior to satisfaction in full of the Secured Obligations. Upon any such resignation or removal, the Collateral Agent shall have the right to appoint a successor Disbursement Agent. If no successor Disbursement Agent shall have been appointed and shall have accepted such appointment within sixty (60) days after the retiring Disbursement Agent's giving of notice of resignation or the removal of the retiring Disbursement Agent, then the retiring Disbursement Agent may apply to any court of competent jurisdiction for the appointment of a successor; provided that any Disbursement Agent so appointed shall immediately and without further act be superseded by a Disbursement Agent appointed by the Collateral Agent. Upon the execution and delivery of an instrument accepting its appointment as Disbursement Agent hereunder by the successor Disbursement Agent, (a) without further act, deed or conveyance, such successor Disbursement Agent shall thereupon succeed to and become vested with all the rights, powers, privileges, obligations and duties of the retiring -16- Disbursement Agent, and the retiring Disbursement Agent shall be discharged from its duties and obligations hereunder and (b) the retiring Disbursement Agent shall promptly transfer all Accounts within its possession or control to the possession or control of the successor Disbursement Agent and shall execute and deliver such notices, instructions and assignments as may be necessary or desirable to transfer more fully and certainly the rights, powers, privileges, obligations and duties of the Disbursement Agent with respect to the Accounts to the successor Disbursement Agent. After the retiring Disbursement Agent's resignation or removal hereunder as Disbursement Agent, the provisions of this Section 3 and of Section 4 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as Disbursement Agent. 4. EXPENSES AND FEES 4.1 Expenses. The SPV agrees to pay or reimburse on demand all reasonable and documented out-of-pocket expenses of the Disbursement Agent (including reasonable expenses for legal services of every kind) in respect of, or incident to, the preparation, execution and delivery of this Agreement, the administration of this Agreement and the Accounts, the enforcement of any of the provisions of this Agreement or in connection with any amendment, waiver or consent relating to this Agreement. The Disbursement Agent shall not have any recourse to the Collateral Agent, the Lender or the Collateral for amounts in payment of compensation, reimbursement or indemnification hereunder. If the Disbursement Agent incurs expenses or renders services following the filing of a case in bankruptcy with respect to the SPV, such expenses and the compensation for such services are intended to constitute expenses of administration under any federal or state bankruptcy, insolvency, arrangement, moratorium, reorganization or other debtor relief law. 4.2 Fees. The SPV agrees to pay the Disbursement Agent such fees and expenses as shall have been separately agreed upon prior to the consummation of the transactions contemplated hereby. 5. DEFINITIONS As set forth in the recitals hereto, the capitalized terms shall have the respective meanings set forth in Annex A to the Note Purchase Agreement and the rules of usage set forth in said Annex A shall apply hereto. In addition, the following terms shall have the following meanings: "Additional Reserve Certificate" shall have the meaning ascribed thereto in Section 2.4(a) hereof. "Additional Reserve Disbursement Certificate" shall have the meaning ascribed thereto in Section 2.4(b)(ii) hereof. "Agreement, this" shall have the meaning ascribed thereto in the first recital hereof. -17- "Casualty Proceeds" shall have the meaning ascribed thereto in Section 2.6(a) hereof. "Debt Service Coverage Ratio" shall have the meaning ascribed thereto in Section 2.4(b)(iii)(B) hereof "Debt Service Shortfall" shall have the meaning ascribed thereto in Section 2.3(b)(ii) hereof. "Excess Cash Flow" shall have the meaning ascribed thereto in Section 2.3(c)(i) hereof. "Holder" shall have the meaning ascribed thereto in the third recital hereto. "One Year's Debt Service" shall have the meaning ascribed thereto in Section 2.3(c)(ii) hereof. "Projected Debt Service Coverage Ratio" shall have the meaning ascribed thereto in Section 2.4(b)(iii)(A) hereof. "Substitute OPCO Revenues" shall have the meaning ascribed thereto in Section 2.3(c)(iii) hereof. "Windup Event" shall have the meaning ascribed thereto in Section 2.8(b)(ii) hereof. 6. MISCELLANEOUS 6.1 Delivery of Budget. The SPV shall deliver to the Disbursement Agent (a) not later than the first day of each Contract Year (or such later time as a Draft Project Budget shall have been approved in accordance with Section 1.4 of the MCFA), a copy of the Project Budget prepared by the Operator in respect of such Fiscal Year and (b) not later than July 30th of each year (or such later time as a proposed Extended Budget shall have been approved in accordance with Section 1.4 of the MCFA), a copy of the Extended Budget for the period of 12 consecutive months ending on June 30th of the following year. 6.2 Action by Disbursement Agent. Notwithstanding any provisions to the contrary in this Agreement, if any disbursement, deposit or payment of any funds by the Disbursement Agent, or any other action to be taken by the Disbursement Agent under this Agreement, is to be made or taken on a day other than a Business Day, such disbursement, deposit or payment shall be made or taken on the next succeeding Business Day. -18- 6.3 Books of Account; Statements. (a) Books of Account. The Disbursement Agent shall maintain books of account on a cash basis and record therein all deposits into and transfers from the Accounts, and all investment transactions effected by the Disbursement Agent pursuant to this Agreement, all in accordance with its customary practices and procedures. The Disbursement Agent shall make such books of account available during normal business hours for inspection and audit by the SPV, the Collateral Agent or the Lender. (b) Statements. The Disbursement Agent shall deliver monthly to the Collateral Agent, the Lender and the SPV a statement setting forth the transactions in each Account during the preceding month and specifying the Project Revenues, investments, securities and other amounts held on deposit in each Account at the close of business on the Business Day as of which the statement is prepared. The Disbursement Agent shall also deliver to each of such Persons a similar statement as of the end of and for each Contract Year and the first six months in each Contract Year. 6.4 Amendments; Etc. No amendment or waiver of any provision of this Agreement shall be effective unless the same shall be in writing and signed by each party hereto. 6.5 Addresses for Notices. All notices and communications to be given pursuant to this Agreement shall be in writing and shall be given in the manner and with the effect set forth in Section 17.1 of the Note Purchase Agreement. 6.6 Governing Law; Terms. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING ALL OTHER CHOICE-OF-LAW AND CONFLICTS- OF-LAW RULES); PROVIDED, HOWEVER, THAT SO LONG AS WILMINGTON TRUST COMPANY SHALL SERVE AS DISBURSEMENT AGENT, THE DUTIES AND LIABILITIES OF THE DISBURSEMENT AGENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE. 6.7 Headings. Headings used in this Agreement are for convenience of reference only and do not constitute part of this Agreement for any purpose. -19- 6.8 Limited Third Party Beneficiaries. The agreements of the parties hereto are solely for the benefit of the parties hereto and the Holders, and no other Person shall have any rights hereunder. 6.9 Satisfaction Requirement. If any agreement, certificate or other writing, or any action taken or to be taken, is by the terms of this Agreement required to be satisfactory to any Person, then the determination of such satisfaction shall be made by such Person in its sole and exclusive judgment exercised in good faith. 6.10 No Waiver. No failure on the part of the Disbursement Agent or the Collateral Agent to exercise, and no course of dealing with respect to, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise by the Disbursement Agent or the Collateral Agent of any right, power or remedy hereunder preclude any other or future exercise thereof or the exercise of any other right, power or remedy. The remedies herein are cumulative and are not exclusive of any remedies provided by law. 6.11 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Agreement and without affecting the validity or enforceability of such provision or any other provision in any other jurisdiction. 6.12 Counterparts. This Agreement may be executed simultaneously in counterparts, each of which shall be deemed an original, and it shall not be necessary in making proof of this Agreement to produce or account for more than one fully executed counterpart for each party hereto. 6.13 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. 6.14 Amounts Available. In determining the amount available in any Account at any time, the Disbursement Agent shall treat as cash available the amount that the Disbursement Agent would have received on such day if the Disbursement Agent had liquidated all the securities then on deposit in such Account at then prevailing market prices. The Disbursement Agent will use its best efforts to sell securities in order that actual cash shall be available on each date on which a transfer or payment is to be made pursuant to this Disbursement Agreement. -20- 6.15 Change of Accounts. The Account referred to in Schedule III hereto may be changed at any time by written notice from the Holders to the Disbursement Agent specifying the new account or accounts to which payments pursuant to Section 2.2(b)(ii)(B) should be made. [remainder of page intentionally left blank; next page is signature page] -21- IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. DRAVO BLACK RIVER LIMITED PARTNERSHIP By: DBR General Inc. Its General Partner By: A. H. TENHUNDFELD, JR. Name: Albert H. Tenhundfeld, Jr. Title: Vice President WILMINGTON TRUST COMPANY, not in its individual capacity, but solely as Collateral Agent By: BRUCE BISSON Name: Bruce Bisson Title: Vice President WILMINGTON TRUST COMPANY, not in its individual capacity, but solely as Disbursement Agent By: JOHN M BESSON, JR. Name: John M. Besson, Jr. Title: Vice President -22,23- EX-4 6 AMENDMENT AGREEMENT [EXECUTION COPY] AMENDMENT AGREEMENT This AMENDMENT AGREEMENT (this Agreement or this Amendment), dated as of August 1, 1994, is entered into by and among DRAVO CORPORATION, a Pennsylvania corporation (Dravo), DRAVO LIME COMPANY, a Delaware corporation (Lime), DRAVO BASIC MATERIALS COMPANY, INC., an Alabama corporation (Basic, together with Lime referred to herein as the Companies), FIRST ALABAMA BANK (FAB), PNC BANK, NATIONAL ASSOCIATION (formerly known as Pittsburgh National Bank) (PNC), CONTINENTAL BANK (formerly known as Continental Bank N.A.) (Continental), THE PRUDENTIAL INSURANCE COMPANY OF AMERICA (acting through Prudential Capital Group, Prudential; FAB, PNC, Continental and Prudential herein collectively referred to as Lenders and each a Lender), and FAB, as agent for the Lenders (in such capacity, together with its successors and assigns, the Agent). PRELIMINARY STATEMENTS (1) The Companies, Dravo and the Lenders have entered into an Override Agreement, dated as of January 21, 1992, as amended by the First Amendment to Override Agreement, dated March 10, 1993, and the Second Amendment to Override Agreement, dated as of March 7, 1994 (as so amended, the Override Agreement). In addition, the Companies, the Agent and the Lenders have entered into an Amended and Restated Revolving Credit Agreement, dated as of January 21, 1992, as amended by the First Amendment to Amended and Restated Revolving Credit Agreement, dated as of March 7, 1994 (as so amended, the Revolving Credit Agreement). Capitalized terms used but not defined herein shall have the meanings assigned to such terms in the Override Agreement, as amended hereby. (2) Lime has entered into a lime supply agreement, dated June 21, 1993 (the OPCO Agreement), with Ohio Power Company, an Ohio corporation. In order to fulfill its obligations under the OPCO Agreement, Lime requires additional production facilities (the New Project) at its Black River Facility. In addition, to the extent that the New Project has capacity beyond that needed to service the OPCO Agreement, Lime plans to utilize the New Project to service other lime supply agreements in order to benefit from the cost savings to be realized from the efficiency of the New Project's equipment. -1- (3) To finance a portion of the cost of constructing the New Project, the Lenders have agreed to increase their commitments under the Revolving Credit Agreement by $6,000,000 and to extend the maturity thereof, and Prudential, acting through Prudential Power Funding Associates (PruPower), has agreed to purchase up to $50,000,000 of promissory notes to be issued by Lime SPV. (4) The parties hereto desire to amend the Revolving Credit Agreement, the Override Agreement and certain other Operative Documents to reflect the financing of the New Project and that, among other things, additional property is being pledged to the Lenders as collateral security. NOW, THEREFORE, in consideration of the premises, the parties hereto agree as follows: ARTICLE I THIRD AMENDMENT TO OVERRIDE AGREEMENT 1.01. Amendments to Override Agreement The Override Agreement shall be, effective as of the date hereof and subject to the satisfaction of the conditions precedent set forth in Section 5.01 hereof, amended as follows: (a) Amendments to Article IV. Article IV shall be amended as follows: (i) Section 4.01(a)(viii) is amended by deleting in its entirety the phrase "generally recognized under law." appearing in the last sentence thereof and substituting therefor the new phrase "generally recognized under law; and", and by adding the following new clause (ix) thereafter: "(ix) promptly upon receipt or transmission thereof, a copy of each report (financial or otherwise), notice (including, without limitation, any notice disclosing any default), certificate or statement received or provided by it or any of its Subsidiaries pursuant to any Transaction Document, to the extent not provided to the Lenders by any Dravo Party pursuant to clauses (i) through (viii) above." (ii) Section 4.01(b) is amended by deleting in its entirety the phrase "and its Subsidiaries" in each place in which it appears -2- therein and substituting therefor in each case the new phrase "and its Subsidiaries (other than Lime SPV)". (iii) Section 4.01(b) is further amended by adding the following sentences at the end thereof: "The inspection rights of the Lenders with respect to Lime SPV shall be governed by the Master Common Facilities Agreement as in effect on the Initial Funding Date. Each of the Dravo Parties further covenants that, so long as a Lender shall hold any Note or Notes or any Secured Obligation shall remain outstanding, it will permit one of the Lenders and its representatives to perform an annual collateral audit with respect to the Collateral, at the expense of the Dravo Parties, which collateral audit shall be conducted in accordance with such Lender's then existing practices and procedures relating to collateral audits." (iv) Section 4.01(c) is amended by deleting in its entirety the phrase "if any of the Dravo Parties creates" and substituting therefor the new phrase "if any of the Dravo Parties or any Subsidiary of a Dravo Party creates". (v) Section 4.01(d) is amended by deleting in its entirety the phrase "or any of its Subsidiaries" and substituting therefor the new phrase "or any of its Subsidiaries (other than Lime SPV, the SPV General Partner and the SPV Limited Partner)". (vi) Section 4.01(e) is amended by deleting in its entirety the phrase "and will cause each of its Subsidiaries" and substituting therefor the new phrase "and will cause each of its Subsidiaries (other than Lime SPV, the SPV General Partner and the SPV Limited Partner)". (vii) Section 4.01(f) is amended by deleting in its entirety the phrase "nor any Subsidiary" and substituting therefor the new phrase "nor any Subsidiary (other than Lime SPV, the SPV General Partner and the SPV Limited Partner)". (viii) Section 4.01(g) is amended by deleting in its entirety the phrase "(other than Discontinued Subsidiaries)" in each place in which it appears therein and substituting therefor in each case the new phrase "(other than Discontinued Subsidiaries, Lime SPV, the SPV General Partner and the SPV Limited Partner)". -3- (ix) Section 4.01(h) is amended by deleting in its entirety the phrase "and will cause each of its Subsidiaries" and substituting therefor the new phrase "and will cause each of its Subsidiaries (other than Lime SPV, the SPV General Partner and the SPV Limited Partner)". (x) Section 4.01(l) is amended by adding immediately following the phrase "the commencement of any such operations thereon by the Dravo Parties" the phrase "(other than any properties acquired by Lime SPV for use in the Project)". (xi) Section 4.01 is amended by adding the following new subsections (m), (n), (o), (p), (q), (r) and (s) at the end thereof: "(m) Direct Ownership of Lime SPV, the SPV General Partner and the SPV Limited Partner. Lime shall maintain direct 100% ownership of all capital stock (other than the Class B Common Stock of the SPV General Partner) of the SPV General Partner and the SPV Limited Partner, and shall cause the SPV General Partner and the SPV Limited Partner to maintain direct 100% ownership of all of the partnership interests of Lime SPV. (n) Lime SPV, SPV General Partner and SPV Limited Partner Organizational Documents. Lime shall not, without the prior written consent of the Lenders, permit Lime SPV, the SPV General Partner and the SPV Limited Partner to amend, supplement, replace, restate or otherwise modify any of the organizational documents of such Person, including, without limitation, (i) the limited partnership agreement and certificate of limited partnership of Lime SPV and (ii) the articles of incorporation of the SPV General Partner and the SPV Limited Partner. -4- (o) Issuance of Additional Capital Stock by the SPV General Partner and the SPV Limited Partner. Except for (i) one share of Class B Common Stock issued by the SPV General Partner to PruPower and (ii) any shares of capital stock issued by the SPV General Partner and the SPV Limited Partner to Lime on or before the Initial Funding Date, Lime shall not permit the SPV General Partner or the SPV Limited Partner to issue, sell or otherwise dispose of (either directly, or indirectly by the issuance of rights or options for, or securities convertible into, such shares) any shares of any class of its capital stock. (p) Distributions Under Deposit and Disbursement Agreement. Lime shall cause Lime SPV, the SPV General Partner and the SPV Limited Partner to distribute immediately to Lime all funds received by Lime SPV pursuant to the Deposit and Disbursement Agreement. (q) Amendments to Master Common Facilities Agreement and Deposit and Disbursement Agreement. Lime shall not, without the prior written consent of the Lenders, enter into any amendment of (i) the provisions of the Master Common Facility Agreement set forth in Section 9.1 of the Project Intercreditor Agreement or (ii) the requirement set forth in Section 2.2(b)(ii) of the Deposit and Disbursement Agreement that Lime shall receive all remaining amounts after all other required payments (including, without limitation, required payments resulting from any amendment to said Section 2.2(b)(ii)) have been made pursuant thereto. (r) Replacement of Lime as Operator of the Black River Facility. Lime agrees and acknowledges that the Lenders shall have the right to replace Lime as the operator of the Black River Facility in accordance with the terms of the Master Common Facilities Agreement. (s) Indemnity of Lime SPV Against Lime. Notwithstanding anything to the contrary contained in the Master Common Facilities Agreement, Lime (in its capacity as "Operator" thereunder) shall have no obligation to indemnify Lime SPV with respect to any amounts due and payable on the Notes (as defined in the Note Purchase Agreement) (including, without limitation, any principal, interest, fees or Make-Whole Amount (as defined in the Note -5- Purchase Agreement)), except to the extent of any amounts realized upon the sale, foreclosure or other disposition of the Shared Collateral (as defined in Annex A to the Project Intercreditor Agreement)." (xii) Section 4.02(b) is amended in its entirety to read as follows: "(i) Dravo shall cause the Fixed Charge Coverage Ratio of Dravo and its Subsidiaries as at the end of each of Dravo's fiscal quarters to equal or exceed the following values for the fiscal quarters ending during the following periods: Minimum Fixed Relevant Period Charge Ratio January 1, 1994 through and including December 31, 1994 1.70 January 1, 1995 through and including December 31, 1995 1.35 January 1, 1996 through and including December 31, 1996 2.00 January 1, 1997 through and including December 31, 1997 2.75 January 1, 1998 and thereafter 3.00 provided, however, that in the event that the maturity date of the Debt of Lime to FAB under the Longview Credit Agreement is extended for at least 12 months beyond the maturity date of such Debt as in effect on August 1, 1994, the minimum Fixed Charge Coverage Ratio of Dravo and its Subsidiaries with respect to the period January 1, 1995 through and including December 31, 1995 shall be 1.70. (ii) Dravo shall cause the Discontinued Operations Fixed Charge Coverage Ratio of Dravo and its Subsidiaries as at the end of each of Dravo's fiscal quarters to equal or exceed the following values for the fiscal quarter ending during the following periods: -6- Minimum Discontinued Operations Fixed Charge Relevant Period Coverage Ratio January 1, 1994 through and including December 31, 1994 1.50 January 1, 1995 through and including December 31, 1995 1.25 January 1, 1996 through and including December 31, 1996 2.00 January 1, 1997 through and including December 31, 1997 2.75 January 1, 1998 and thereafter 3.00" provided, however, that in the event that the maturity date of the Debt of Lime to FAB under the Longview Credit Agreement is extended for at least 12 months beyond the maturity date of such Debt as in effect on August 1, 1994, the minimum Discontinued Operations Fixed Charge Coverage Ratio of Dravo and its Subsidiaries with respect to the period January 1, 1995 through and including December 31, 1995 shall be 1.50." (b) Amendments to Article V. Article V shall be amended as follows: (i) Section 5.01(c) is amended in its entirety to read as follows: "(c) Debt. Dravo shall not, and shall not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Debt in excess of the lesser of: (i) the following percentages of Dravo Consolidated Net Tangible Assets ("DCNTA") of Dravo and its Subsidiaries during the periods corresponding to such percentages in the table set forth below: -7- Amount of Permitted Debt as a Percentage Relevant Period of DCNTA January 1, 1994 through and including December 31, 1995 61% January 1, 1996 through and including December 31, 1996 57% January 1, 1997 through and including December 31, 1997 50% January 1, 1998 and thereafter 45% OR (ii) the sum of (x) $170,000,000 plus (y) 100% of the cash proceeds received by Dravo in connection with the issuance or sale of any capital stock of Dravo (net of any reasonable costs and expenses incurred by Dravo in connection with such issuance or sale) occurring after the Closing Date plus (z) 100% of the amount by which Consolidated Net Earnings from Continuing Operations generated after September 30, 1991 exceeds the greater of (A) $40,000,000 and (B) the aggregate amount of Losses from Discontinued Operations after September 30, 1991; provided, however, that in no event shall such amount be less than zero." (ii) Section 5.01(d) is amended by deleting the phrase "(other than the Secured Obligations)" in its entirety and substituting therefor the new phrase "(other than (A) the Secured Obligations, (B) any Debt incurred in connection with the Project pursuant to the Note Purchase Agreement and the other Financing Documents and (C) any Debt permitted by Section 5.01(e) hereof)". (iii) Section 5.01(d) is further amended by deleting the phrase "in excess of 10% of Dravo Consolidated Net Tangible Assets" in its entirety and substituting therefor the new phrase "in excess of 7% of Dravo Consolidated Net Tangible Assets". (iv) Section 5.01 is amended by adding the following new subsection (e) at the end thereof: -8- (e) Maximum Project Debt. Dravo shall not permit Lime SPV, the SPV General Partner and the SPV Limited Partner to create, incur, assume or suffer to exist at any time subsequent to the Initial Funding Date, any Debt for borrowed money or any guaranties of Debt for borrowed money (other than the outstanding principal amount of the Notes (as defined in the Note Purchase Agreement), which in no event shall exceed $50,000,000) in an aggregate amount in excess of the sum of (i) $10,000,000, (ii) the amount of any Debt incurred to finance capital expenditures required to enable such Persons to comply with Applicable Law (including, without limitation, Environmental Laws (as defined in the Note Purchase Agreement)) and (iii) the amount of any Debt incurred by such Persons upon the occurrence and during the continuance of an Event of Default (as defined in Annex A to the Project Intercreditor Agreement). (v) Section 5.02(a)(iii) is amended by deleting the phrase "or any other Affiliate" in its entirety and substituting therefor the new phrase "or any other Affiliate, except to Lime as contemplated by, and pursuant to, the Transaction Documents". (vi) Section 5.02(b) is amended by adding the word "and" immediately following clause (G) thereof and by adding the following new clause (H) immediately thereafter: "(H) Debt incurred in connection with the Project pursuant to the Note Purchase Agreement and the other Financing Documents, including, without limitation, any Debt permitted by Section 5.01(e) hereof;" (vii) Section 5.02 is amended by adding the following new subsection (d) at the end thereof: "(d) Lime shall not permit Lime SPV to enter into any lime supply agreements other than (i) Economically Similar Contracts (as defined in Annex A to the Project Intercreditor Agreement) and (ii) other lime supply agreements that are approved in writing by the Lenders." (viii) Section 5.03(a)(i)(H) is amended in its entirety to read as follows: -9- "(H) Liens created or permitted (1) by any Operative Document entered into in connection with this Agreement and (2) by any Transaction Document (including, without limitation, Permitted Liens (as defined in the Note Purchase Agreement)), and" (ix) Section 5.03(a)(ii) is amended by adding the following proviso at the end thereof: "provided, however, that (a) notwithstanding the foregoing, Lime may (i) make advances to Lime SPV pursuant to Section 1.4(d) of the Master Common Facilities Agreement and (ii) make capital contributions (including, without limitation, the Investment (as defined in the Note Purchase Agreement)) to, and pay any other amount (including, without limitation, any amount required to be paid by Lime pursuant to Section 3.15 of the Lime Security Agreement (as defined in the Note Purchase Agreement) as in effect on the Initial Funding Date) on behalf of, Lime SPV, the SPV General Partner and the SPV Limited Partner (x) on or before the Conversion Date (as defined in Annex A to the Project Intercreditor Agreement) pursuant to the Financing Documents, in an aggregate amount not to exceed the sum of (A) $12,400,000 in the aggregate on the Initial Funding Date and (B) $5,300,000 in the aggregate for amounts required to be contributed by Lime to Lime SPV pursuant to Section 3.15(b) of the Lime Security Agreement (as defined in the Note Purchase Agreement) as in effect on the Initial Funding Date, and (y) from time to time after said Conversion Date, in an aggregate amount not to exceed the lesser of (1) $4,000,000 and (2) the amount disbursed to Lime SPV from the Construction Account (as defined in Annex A to the Project Intercreditor Agreement) on the Conversion Date pursuant to Section 2.1(b) of the Deposit and Disbursement Agreement as in effect on the Initial Funding Date, and (b) the foregoing provisions of this Section 5.03(a)(ii) shall not apply to Lime SPV, the SPV General Partner and the SPV Limited Partner." -10- (x) Section 5.03(a)(iii) is amended by deleting the phrase "shall not apply to any Discontinued Subsidiary" in its entirety and substituting therefor the new phrase "shall not apply to any Discontinued Subsidiary, Lime SPV, the SPV General Partner or the SPV Limited Partner". (xi) Section 5.03(a)(iv) is amended by deleting the phrase "except that so long as no Default" in its entirety and substituting therefor the new phrase "except that (1) Lime SPV, the SPV General Partner and the SPV Limited Partner may sell or otherwise dispose of assets in the ordinary course of business (including, without limitation, the sale or other disposition of worn- out or obsolete equipment), (2) Lime SPV, the SPV General Partner and the SPV Limited Partner may sell or otherwise dispose of any assets to the Lenders (on behalf of the Companies) or, in the event that the Lenders have been given a right of first refusal to purchase such assets and have declined to exercise such right, to any other Person, (3) Lime SPV, the SPV General Partner and the SPV Limited Partner may merge or consolidate with or into any Person if the continuing or surviving entity is Lime SPV, the SPV General Partner or the SPV Limited Partner, and (4) so long as no Default". (xii) Section 5.03(a)(iv) is further amended by adding the following proviso at the end thereof: provided, however, that any decision by the Lenders to purchase assets from Lime SPV, the SPV General Partner or the SPV Limited Partner pursuant to clause (2) above shall be made by the Majority Lenders (provided, that any Lender that does not concur in the decision of the Majority Lenders shall not be obligated to provide any funds for the purchase price of such assets, unless such funds are otherwise available to be borrowed by the Companies from such Lender pursuant to the Revolving Credit Agreement and the Companies so request such borrowing pursuant to the terms thereof); (xiii) Neither Lime SPV, the SPV General Partner nor the SPV Limited Partner shall be obligated to comply with, and no Dravo Party shall cause Lime SPV, the SPV General Partner or the SPV Limited Partner to comply with, Sections 5.03(a)(v), 5.03(a)(vi), 5.03(a)(vii), 5.03(a)(viii), 5.03(a)(ix), 5.03(b) or 5.03(c). (c) Amendments to Article VI. Article VI shall be amended as follows: (i) Section 6.01(c) is amended by deleting in its entirety the phrase "any Subsidiary" in each place in which it appears therein and substituting therefor in each case the new phrase "any Subsidiary (other than Lime SPV, SPV General Partner and SPV Limited Partner)". -11- (ii) Section 6.01(e) is amended by deleting the phrase "4.01(j)" in its entirety and substituting therefor the new phrase "4.01(j), 4.01(m), 4.01(o)" (iii) Section 6.01(g) is amended by deleting the phrase "or any Subsidiary thereof" in its entirety and substituting therefor the new phrase "or any Subsidiary thereof (other than Lime SPV, SPV General Partner and SPV Limited Partner)". (iv) Section 6.01(h) is amended by deleting the phrase "or any Subsidiary thereof" in its entirety and substituting therefor the new phrase "or any Subsidiary thereof (other than Lime SPV, SPV General Partner and SPV Limited Partner)". (v) Section 6.01(i) is amended by deleting the phrase "or any Subsidiary thereof" in its entirety in each place in which it appears therein and substituting therefor in each case the new phrase "or any Subsidiary thereof (other than Lime SPV, SPV General Partner and SPV Limited Partner)". (vi) Section 6.01(j) is amended by deleting the phrase "or any Subsidiary thereof" in its entirety in each place in which it appears therein and substituting therefor in each case the new phrase "or any Subsidiary thereof (other than Lime SPV, SPV General Partner and SPV Limited Partner)". (vii) Section 6.01(l) is amended by deleting the phrase "or any Subsidiary thereof" in its entirety and substituting therefor the new phrase "or any Subsidiary thereof (other than Lime SPV, SPV General Partner and SPV Limited Partner)". (viii) Section 6.01(m) is amended by deleting the phrase "or any Subsidiary thereof" in its entirety and substituting therefor the new phrase "or any Subsidiary thereof (other than Lime SPV, SPV General Partner and SPV Limited Partner)". (ix) Section 6.01(o) is amended in its entirety to read as follows: "(o) at any time, the aggregate commitment for advances (excluding any sublimit or commitment for the issuance of letters of credit) under all revolving credit facilities of the Companies having a revolving term with an -12- expiration date later than seven calendar months after such time shall be less than $46,700,000;" (x) Section 6.01 is amended by adding the following new subsections (q), (r) and (s) at the end thereof: "(q) an "Event of Default" shall have occurred under the Note Purchase Agreement and the Notes (as defined in the Note Purchase Agreement) shall have been declared due and payable pursuant to the terms thereof; or (r) any event or condition (unless due to Uncontrollable Forces (as defined in Article 4 of the Master Common Facilities Agreement as in effect on the Initial Funding Date)) affecting the Project (other than the Project Kilns (as defined in Annex A to the Project Intercreditor Agreement)) shall have occurred that has had, or could reasonably be expected to have, a material adverse effect on the operation of the Black River Facility, and either (i) Lime SPV shall not have commenced remedial action, within 60 days after the occurrence of such event or condition, to cure such event or condition in such manner as shall be necessary to cause such adverse effect to cease to be material (or to cause such expectation to cease to be reasonable) or (ii) such remedial action shall not have been completed within 90 days after the occurrence of such event or condition, if reasonably susceptible to cure within such period, or, if not reasonably susceptible to cure within such period, Lime SPV shall not be diligently pursuing the steps necessary to effect such cure; or (s) Lime shall have failed to make a Capacity Payment (as defined in the Note Purchase Agreement) and the Collateral Agent shall have received a written notice from the Required Holders (as defined in the Note Purchase Agreement) directing it to take action to realize upon the Assigned Lime Contract Collateral (as defined in Annex A to the Project Intercreditor Agreement) as a result of such failure;" (xi) Section 6.01 is amended by deleting the phrase "clauses (a) through (f), inclusive, or (k) through (p)" in its entirety and substituting therefor the new phrase "clauses (a) through (f), inclusive, or (k) through (s)". -13- (d) Amendments to Article VII. Article VII shall be amended as follows: (i) Section 7.01(a) is amended in full to read as follows: "(a) Organization and Qualification. Each of the Dravo Parties is a corporation duly organized and existing in good standing under the laws of its state of incorporation, each Subsidiary (other than a Discontinued Subsidiary) of a Dravo Party is duly organized and existing in good standing under the laws of the jurisdiction in which it is incorporated or organized, as the case may be, and each of the Dravo Parties and each such Subsidiary has all requisite power and authority (corporate, partnership, or otherwise) to own its respective property and to carry on its respective business as now being conducted, and each of the Dravo Parties and each such Subsidiary is duly qualified as a foreign corporation or partnership (as the case may be) to do business and is in good standing in every jurisdiction in which the nature of the respective business conducted by it makes such qualification necessary." (ii) Section 7.01 is amended by adding the following new subsections (q) and (r) at the end thereof: "(q) Ownership of Lime SPV, the SPV General Partner and the SPV Limited Partner. Lime owns directly 100% of all capital stock (other than one share of Class B Common Stock of the SPV General Partner that is owned by PruPower) of the SPV General Partner and the SPV Limited Partner, and the SPV General Partner and the SPV Limited Partner own directly 100% of the partnership interests of Lime SPV. (r) Project Improvements. The real estate improvements described in Exhibit A to the Improvements Deed, dated as of August 1, 1994, between Lime and Lime SPV, have been constructed for use by the Project and were purchased with proceeds from the issuance of the Construction Notes and with additiontal funds made available to Lime SPV as equity contributions." -14- (e) Amendments to Article VIII. Section 8.12 is amended by deleting each reference to "Section 4.02(c)" contained therein and substituting therefor in each case a reference to "Section 4.02(b)". 1.02. Amendments to Appendix A Appendix A to the Override Agreement shall be amended as follows: (a) The definition "PNB" is amended in its entirety to read as follows: "PNC" shall mean PNC Bank, National Association and its successors and assigns. All references in the Override Agreement to "PNB" shall be deemed to be references to "PNC". (b) The definition "Consolidated Net Earnings" is amended by adding the following new phrase immediately following the phrase "(except for gains resulting from the use of net operating loss carry forwards),": "any items of gain (or plus any items of loss) that were included in determining such consolidated net income and were not realized in the ordinary course of business (whether or not classified as "ordinary" by GAAP)," (c) The definition "Consolidated Net Earnings" is further amended by adding the following new phrase immediately preceding the period at the end thereof: "provided, however, that any taxes deducted from earnings to amortize any deferred tax asset recognized after March 31, 1994 shall not be deducted in determining Consolidated Net Earnings" (d) The definition "Discontinued Operations Fixed Charge Coverage Ratio" is amended by deleting the phrase "EBDIAT of Dravo and its Subsidiaries" in its entirety and substituting therefor the new phrase "EBDIAT of Dravo and its Subsidiaries (provided, that with respect to Lime SPV, the SPV General Partner and the SPV Limited Partner, EBDIAT of such Persons shall not include Unavailable Cash unless and until such Unavailable Cash is distributed to Lime)". (e) The definition "Dravo Consolidated Net Tangible Assets" is amended by deleting the phrase "for borrowed money, and (iv) treasury" in its entirety and substituting therefor the new phrase "for borrowed money, -15- (iv) any gain from a reduction after March 31, 1994 in the valuation allowance against any deferred tax asset and (v) treasury". (f) The definition "Fixed Charge Coverage Ratio" is amended by deleting the phrase "EBDIAT of Dravo and its Subsidiaries for the three" in its entirety and substituting therefor the new phrase "EBDIAT of Dravo and its Subsidiaries (provided, that with respect to Lime SPV, the SPV General Partner and the SPV Limited Partner, EBDIAT of such Persons shall not include Unavailable Cash unless and until such Unavailable Cash is distributed to Lime) for the three". (g) The definition "Funded Debt" is amended by adding the following new phrase immediately preceding the period at the end thereof: " plus (iii) all off-balance sheet indebtedness (including, without limitation, guaranty obligations and indebtedness incurred in connection with sale/leaseback transactions), other than obligations under operating leases" (h) The definition "Notes" is amended by adding the phrase "the Additional Notes" immediately following the phrase "the Prudential Revolving Note,". (i) The definition "Operative Documents" is amended by adding the phrase "the SPV Stock Pledge Agreement, the SPV Partner Pledge Agreement, the Project Intercreditor Agreement, the Assignment and Security Agreement," immediately following the phrase "the Basic Mortgage,". (j) The definition "Security Documents" is amended by adding the phrase "the SPV Stock Pledge Agreement, the SPV Partner Pledge Agreement, the Assignment and Security Agreement," immediately following the phrase "the Basic Mortgage,". (k) The definition "Subsidiary" is amended in its entirety to read as follows: "Subsidiary" shall mean, with respect to any Person, any corporation or unincorporated entity (including, without limitation, any general partnership or limited partnership) of which an aggregate of 50% or more of the outstanding capital stock (or comparable interest) having ordinary voting power (irrespective of whether at the time capital stock (or comparable interest) of any other class or classes of such corporation or entity shall or might have voting power upon the occurrence of any contingency) is at the time directly or -16- indirectly owned by said Person (whether directly or through one or more other Subsidiaries of such Person). In the case of an unincorporated entity, a Person shall be deemed to have 50% or more of interests having ordinary voting power only if such Person's vote in respect of such interests comprises 50% or more of the total voting power of all such interests in the unincorporated entity. (l) The following sentence is added to the end of Appendix A: "Each of the parties to the Operative Documents and the Transaction Documents and their counsel have reviewed and revised, or requested revisions to, the Operative Documents, and the usual rule of construction that any ambiguities are to be resolved against the drafting party shall be inapplicable in the construing and interpretation of the Operative Documents and the defined terms contained herein and therein." (m) The following new definitions shall be inserted in alphabetical order in Appendix A: "Additional Notes" shall mean those certain Revolving Notes attached as Exhibits A-5, A-6, A-7 and A-8 to the Revolving Credit Agreement, executed by each of Basic and Lime in favor of each of the Lenders, respectively, and each Note delivered in substitution or exchange for any such Note. "Assignment and Security Agreement" means the Assignment and Security Agreement, dated as of August 1, 1994, by Lime in favor of the Collateral Agent, as the same may be amended, modified or supplemented from time to time in accordance with its terms. "Black River Facility" shall have the meaning set forth in Annex A to the Project Intercreditor Agreement. "Construction Notes" shall have the meaning set forth in the Note Purchase Agreement. "Deposit and Disbursement Agreement" shall mean the Deposit and Disbursement Agreement, dated as of August 1, 1994, among Wilmington Trust Company, as Collateral Agent, Wilmington Trust Company, as Disbursement Agent, and Lime SPV, as said Agreement may be amended, modified or supplemented from time -17- to time in accordance with the terms thereof and the terms of the other Transaction Documents. "Dravo Parties" shall have the meaning set forth in the first preliminary statement to the Override Agreement. "Financing Documents" shall have the meaning set forth in Annex A to the Project Intercreditor Agreement. "Initial Funding Date" shall have the meaning set forth in the Note Purchase Agreement. "Lime SPV" shall mean Dravo Black River Limited Partnership, a Delaware limited partnership. "Longview Credit Agreement" shall mean the $12,900,000 Loan Agreement, dated as of June 8, 1990, between Lime and FAB, as the same may be amended, modified or supplemented from time to time in accordance with its terms. "Master Common Facilities Agreement" shall mean that certain Master Common Facilities Agreement, dated as of August 1, 1994, between Lime and Lime SPV, as said Agreement may be amended, modified or supplemented from time to time in accordance with the terms thereof and the terms of the other Transaction Documents. "Note Purchase Agreement" shall mean that certain Note Purchase Agreement, dated as of August 1, 1994, by and between Lime SPV and PruPower, as said Agreement may be amended, modified or supplemented from time to time in accordance with the terms thereof and the terms of the other Transaction Documents. "Project" shall have the meaning set forth in Annex A to the Project Intercreditor Agreement. "Project Intercreditor Agreement" shall mean the Intercreditor Agreement, dated as of August 1, 1994, by and among Wilmington Trust Company, PruPower, the Collateral Agent, FAB, PNC, Continental and Prudential, as consented to and acknowledged by Lime and Lime SPV, as such Agreement may be amended, modified or supplemented from time to time in accordance with its terms. -18- "Prudential" shall mean The Prudential Insurance Company of America, acting through Prudential Capital Group, and its successors and assigns. "PruPower" shall mean The Prudential Insurance Company of America, as purchaser of the Construction Notes of Lime SPV pursuant to the Note Purchase Agreement, and its successors and assigns. "SPV General Partner" shall mean DBR General Inc., a Delaware corporation. "SPV Limited Partner" shall mean Dravo Black River Limited Inc., a Delaware corporation. "SPV Partner Pledge Agreement" shall mean the Partner Security Agreement, dated as of August 1, 1994, by the SPV General Partner and the SPV Limited Partner in favor of the Collateral Agent, as it may be amended, modified or supplemented from time to time in accordance with its terms. "SPV Stock Pledge Agreement" shall mean the Stock Pledge Agreement, dated as of August 1, 1994, by Lime in favor of the Collateral Agent, as it may be amended, modified or supplemented from time to time in accordance with its terms. "Transaction Documents" shall have the meaning set forth in Annex A to the Project Intercreditor Agreement. "Unavailable Cash" shall mean any and all Project Revenues (as defined in Annex A of the Project Intercreditor Agreement) that, pursuant to the terms of the Deposit and Disbursement Agreement or any other Transaction Document, are not available for distribution to Lime (other than any amounts paid for Debt Service (as defined in Annex A to the Project Intercreditor Agreement) and Operation and Maintenance Costs (as defined in Article 4 of the Master Common Facilities Agreement as in effect on the Initial Funding Date)); provided, however, that Unavailable Cash shall include any expenditures made by Lime SPV for Capital Additions or Modifications (as defined in Article 4 of the Master Common Facilities Agreement as in effect on the Initial Funding Date), or for any adjustments, alterations or other physical changes to the Project of any kind whatsoever, in excess of $1,500,000 in any calendar year to the extent that such excess was not funded with (i) additional -19- Debt of Lime SPV or (ii) any equity contribution by Lime to Lime SPV made in accordance with Section 5.03(a)(ii) of the Override Agreement. ARTICLE II SECOND AMENDMENT TO REVOLVING CREDIT AGREEMENT 2.01. Amendments to Revolving Credit Agreement The Revolving Credit Agreement shall be, effective as of the date hereof and subject to the satisfaction of the conditions precedent set forth in Section 5.01 hereof, amended as follows: (a) Amendments to Article I. Article I shall be amended as follows: (i) The first sentence of Section 1.1 is amended in its entirety to read as follows: Subject to all the terms and conditions hereof, including without limitation Section 1.3, and so long as there shall exist no Event of Default or Default, Lenders, subject to the terms and conditions hereof, agree to lend to Borrowers such sums as Borrowers may request, from time to time, and at any time, on a revolving basis until April 30, 1996 (as such date may be extended pursuant to Section 1.9, the "Maturity Date"), provided that, after giving effect to the making of any such loans and the issuance of any Letter of Credit, the aggregate principal amount of outstanding revolving line of credit loans (including any loans deemed to be made pursuant to Section 11.2 as a result of a drawing on any Letter of Credit) plus the Stated Amount of all outstanding Letters of Credit (calculated after giving effect to any such drawing) made pursuant to this Agreement shall not at any time exceed the sum of SEVENTY FIVE MILLION AND NO/100THS ($75,000,000.00) DOLLARS, and provided further that the aggregate principal amount of outstanding revolving line of credit loans (including any loans deemed to be made pursuant to Section 11.2 as a result of a drawing on any Letter of Credit) plus the Stated Amount of all outstanding Letters of Credit (calculated after giving effect to any such drawing) made by a Lender pursuant to this Agreement shall not exceed the maximum limitation for each Lender shown opposite the name of each Lender and designated the -20- "Revolving Line of Credit and Letters of Credit Facilities Combined" on Schedule I attached hereto and made a part hereof (calculated after giving effect to any termination of a Lender's Commitment (as defined in Section 1.9) pursuant to Section 1.9). amended in its entirety to read as follows: Subject to all the terms and conditions hereof, Borrowers may borrow, repay and reborrow at any time or from time to time from the date hereof to and including April 30, 1996 (unless extended in writing pursuant to Section 1.9) or the termination of the revolving aspects of this Agreement with respect to advances pursuant to Section 8.1, whichever is earlier. (iii) The fifth sentence of Section 1.1 is amended in its entirety to read as follows: All sums advanced pursuant to the Revolving Line of Credit shall be payable, as to both principal and interest, and shall bear interest, at the rate and in the manner stated in the Revolving Notes of Borrowers, copies of which are attached hereto, marked Exhibits A-1, A-2, A-3, A-4, A-5, A-6, A-7 and A-8, and expressly made a part hereof as though fully set forth herein (the Revolving Notes). (iv) The sixth sentence of Section 1.1 is amended in its entirety to read as follows: Borrowers shall execute and deliver to Lenders the Revolving Notes in the aggregate sum of SEVENTY FIVE MILLION AND NO/100THS ($75,000,000.00) DOLLARS; provided, however, the liability of Borrowers to Lenders for the principal indebtedness of the Revolving Line of Credit shall be limited to the net principal amount actually advanced by Lenders to Borrowers under the Revolving Notes. (v) The fifth sentence of Section 1.3 is amended in its entirety to read as follows: The expiration date for each Letter of Credit issued hereunder (or caused to be issued hereunder) shall not be -21- later than one year after the issuance date thereof, and no Letters of Credit issued hereunder by a Lender (or caused to be issued by a Lender) shall provide for an expiration date later than April 30, 1996 (as such date may be extended pursuant to Section 1.9). (vi) Section 1.5 is amended by adding the following sentence at the end thereof: "In addition, the Borrowers agree to pay each Lender that agrees to extend the Maturity Date pursuant to Section 1.9 an annual renewal fee equal to the sum of (i) 0.125% of the amount of such Lender's Commitment and (ii) 0.625% of the excess, if any, of (A) such Lender's Commitment over (B) such Lender's Percentage of $69,000,000, payable on June 30 of the year in which such Lender agrees to such extension." (vii) The first sentence of Section 1.6 is amended in its entirety to read as follows: Borrowers agree to pay to Lenders on a basis proportionate with such respective Lender's Revolving Line of Credit commitment hereunder non-usage fees (the "Non-Usage Fees") in an aggregate amount equal to one-half of one percent (1/2 of 1%) per annum on the unutilized portion of the $75,000,000.00 Revolving Line of Credit payable quarterly in arrears on the fifth business day following each calendar quarter during the term of this Agreement. (viii) The following new Section 1.9 is added at the end of Article I: Section 1.9 Extension of Maturity Date. (a) At least 10 but not more than 60 days before each June 30, the Borrowers may, by delivering a written request to the Agent (each such request being irrevocable), request that each Lender extend for one year the Maturity Date with respect to such Lender's Revolving Line of Credit commitment and commitment to issue (or cause to be issued) Letters of Credit (such commitments referred to herein collectively, with respect to each Lender, as such Lender's "Commitment"). The Agent shall, upon its receipt of such a request, promptly notify each Lender thereof, and request that each Lender -22- promptly advise the Agent of its approval or rejection of such request. (b) Upon receipt of such notification from the Agent, each Lender may (but shall not be required to), in its sole and absolute discretion (notwithstanding any covenant or other provision contained herein), agree to extend the Maturity Date with respect to its Commitment for a period of one year, and shall (should it determine to do so), no later than 60 days following its receipt of such notification, notify the Agent of its approval concerning such request. If any Lender shall not so notify the Agent, such Lender shall be deemed not to have consented to such request. The Agent shall thereupon provide written notice (the "Extension Notice") to the Borrowers and all of the Lenders as to the Lenders, if any, that have consented to such request. If, within such 60-day period, any Lender has elected not to extend (or failed to notify the Agent of its consent to extend) its Commitment, then each Lender that has agreed to extend the Maturity Date may, in its sole and absolute discretion, within ten business days after its receipt of the Extension Notice, withdraw its previous approval concerning such request. (c) The Commitment of each Lender that agrees to extend the Maturity Date shall be extended for a period of one year, commencing on the then-scheduled Maturity Date. If any Lender has elected not to extend (or failed to notify the Agent of its consent to extend) its Commitment, such Lender's Commitment shall terminate automatically on the then-scheduled Maturity Date, and the Borrowers shall be required to repay on such date the outstanding principal amount of all Revolving Line of Credit loans, if any, made by such Lender, together with accrued interest, fees and all other amounts then payable to such Lender pursuant to this Agreement; provided, however, that the Borrowers may, provided that no Default or Event of Default shall then have occurred and be continuing, demand that such Lender assign to one or more financial institutions designated by the Borrowers (a "Replacement Lender"), on terms and conditions reasonably acceptable to such Lender, all (but not less than all) of such Lender's Commitment and the Revolving Line of Credit advances owing to it, which assignment shall be consummated within 45 days after such Lender notifies the -23- Agent of its election not to extend its Commitment (or, if such Lender fails to notify the Agent of its consent to extend, within 45 days after such Lender is deemed to have failed to consent to such extension). The Borrower shall, as a condition to the effectiveness of any such assignment, cause the replacement of all Letters of Credit issued by such Lender with Letters of Credit issued by the Replacement Lender. The Borrowers shall notify the Lenders of any proposed Replacement Lender no later than ten days prior to the effectiveness of any such assignment. If, prior to the end of such 45-day period, any Lender that has agreed to extend the Maturity Date notifies the Borrowers that any proposed Replacement Lender is not acceptable to it, such Lender may withdraw its previous approval concerning such extension. (b) Amendment to Article V. Section 5.1(b)(1) is amended by inserting the phrase "and in the Note Purchase Agreement" immediately following the phrase "the representations and warranties of the Dravo Parties set forth herein". (c) Amendments to Article IX. Article IX shall be amended as follows: (i) The first sentence of Section 9.1(a) is amended in its entirety to read as follows: Lenders agree as between themselves that upon receipt of a request for an advance hereunder by Borrowers (or either of them), and so long as there shall exist no Event of Default or Default, FAB will advance 31.88% of such request, PNC will advance 24.64% of such request, Continental will advance 28.99% of such request and Prudential will advance 14.49% of such request (each such percentage referred to herein as such Lender's "Percentage"; provided, however, that in no event shall the aggregate principal amount of the Revolving Line of Credit loans made hereunder by Lenders exceed $75,000,000.00. (ii) Section 9.1 is further amended by adding the following new subsections (c), (d) and (e) at the end thereof: (c) Notwithstanding subsections (a) and (b) above, in the event that any Lender does not agree to provide any funds (to the extent that such funds are not otherwise -24- available to be borrowed by the Borrowers from such Lender pursuant to this Agreement) for (i) the cure of any defaults pursuant to Article 6 of the Project Intercreditor Agreement or (ii) the purchase price of any assets sold by Lime SPV in connection with the exercise by the Lenders of any right of first refusal pursuant to Section 5.03(a)(iv)(2) of the Override Agreement, the Lenders that agree to provide such funds (the "Funding Lenders") shall advance such funds on a pro rata basis, based on the proportion of each Funding Lender's Commitment to the aggregate amount of the Commitments of the Funding Lenders. So long as no Event of Default shall have occurred and be continuing, notwithstanding Section 11.7, any amounts of principal prepaid or repaid by the Borrowers pursuant to this Agreement shall be applied, first, to the repayment of all advances made by the Funding Lenders pursuant to clauses (i) and (ii) above (on a pro rata basis based on the amount of advances made by each of the Funding Lenders) and second, to the repayment of all other amounts owing to the Lenders hereunder (on a pro rata basis in accordance with their respective percentages set forth in subsection (a) above), in each case otherwise in accordance with this Agreement. Upon the occurrence and during the continuance of an Event of Default, any amounts of principal prepaid or repaid by the Borrowers or otherwise realized pursuant to any Security Document shall be applied on a pro rata basis in accordance with the percentages of the Lenders set forth in subsection (a) above. Any funds provided by a Funding Lender pursuant to clauses (i) and (ii) above shall be deemed to be a Revolving Line of Credit advance made by such Lender to the Borrowers, and the Borrowers shall be obligated to repay such advances pursuant to the terms hereof. In furtherance of the foregoing, any purchase of assets pursuant to clause (ii) above shall be made on behalf of Lime, and Lime shall be the legal and beneficial owner of such assets. (d) In connection with any advances made by the Funding Lenders pursuant to subsection (c) above, the Companies shall execute such agreements, documents and instruments (including, without limitation, additional promissory notes), and take such further actions, as any Funding Lender may reasonably request. -25- (e) Notwithstanding anything to the contrary contained herein, in order to effect the cure of any default pursuant to Article 6 of the Project Intercreditor Agreement, the Lenders shall have the right (but not the obligation) to advance funds on behalf of the Borrowers and to make any payments directly to any Persons (other than the Borrowers) to the extent necessary to cure such default. (d) Amendment to Article XI. The third sentence of Section 11.1 is amended by adding the phrase "provided, however, that until such time as the Additional Notes are paid in full and cancelled, all payments and prepayments of principal by the Borrowers shall be applied, first, to the payment of any amounts of principal outstanding under the Additional Notes and, second, to the payment of any amounts of principal outstanding under the other Revolving Notes" immediately preceding the period at the end thereof. (e) Amendment to Article XIII. The address for notices to Prudential contained in Section 13.6 shall be amended in its entirety to read as follows (and such address shall be used for all notices under the Operative Documents): The Prudential Insurance Company of America c/o Prudential Capital Corporation Three Gateway Center 100 Mulberry Street Newark, New Jersey 07102 Attention: Investment Adminstration Unit With a copy to: Until September 15, 1994: The Prudential Insurance Company of America c/o Prudential Capital Group One Atlantic Center, Suite 3050 1201 West Peachtree Street Atlanta, Georgia 30309 Attention: Managing Director -26- On and after September 15, 1994: The Prudential Insurance Company of America c/o Prudential Capital Group 1230 Peachtree Street, Suite 2525 Atlanta, Georgia 30309 Attention: Managing Director And to: Patricia Ferrari, Esq. King & Spalding 120 West 45th Street New York, New York 10036 (f) Schedules and Exhibits. Schedules I and II to the Revolving Credit Agreement are deleted in their entirety and Schedules I and II attached hereto are substituted therefor, respectively. Exhibits A-1, A-2, A-3 and A-4 to the Revolving Credit Agreement are deleted in their entirety and Exhibits A-1, A-2, A-3 and A-4 attached hereto are substituted therefor, respectively. Exhibits A-5, A-6, A-7 and A-8 attached hereto are hereby added as Exhibits A-5, A-6, A-7 and A- 8, respectively, to the Revolving Credit Agreement. ARTICLE III AMENDMENTS TO INTERCREDITOR AGREEMENT 3.01. Amendments to Intercreditor Agreement The Intercreditor Agreement shall be, effective as of the date hereof and subject to the satisfaction of the conditions precedent set forth in Section 5.01 hereof, amended as follows: (a) Amendments to Section 1. Section 1 shall be amended by adding the following new subsections (j), (k), (l), (m), (n) and (o) at the end thereof: "(j) Notwithstanding the terms of the Override Agreement or any Transaction Document, in the event that the Collateral Agent receives notice pursuant to the first sentence of Article 5 of the -27- Project Intercreditor Agreement, the Collateral Agent shall take actions pursuant to said Article 5 only at the direction of the Majority Lenders; provided, however, that any Secured Party that does not concur in the directions of the Majority Lenders shall not be obligated to provide any funds for the purchase price of the "Existing Creditors Call Option" (as defined in said Article 5), unless such funds are otherwise available to be borrowed by the Companies from such Secured Party pursuant to the Revolving Credit Agreement and the Companies so request such borrowing pursuant to the terms thereof. (k) Notwithstanding the terms of the Override Agreement or any Transaction Document, the Collateral Agent shall take actions pursuant to Article 6 of the Project Intercreditor Agreement only at the direction of the Majority Lenders; provided, however, that any Secured Party that does not concur in the directions of the Majority Lenders shall not be obligated to provide any funds for the cure of any defaults pursuant to said Article 6, unless such funds are otherwise available to be borrowed by the Companies from such Secured Party pursuant to the Revolving Credit Agreement and the Companies so request such borrowing pursuant to the terms thereof. (l) Notwithstanding the terms of the Override Agreement or any Transaction Document, the Collateral Agent shall take actions pursuant to Section 3.3(vi) of the Project Intercreditor Agreement only at the direction of the Majority Lenders. (m) Notwithstanding the terms of the Override Agreement or any Transaction Document, the Collateral Agent shall agree to amendments of (i) Article III of the Master Common Facilities Agreement only with the consent or at the direction of all of the Secured Parties, (ii) any provisions in the Master Common Facilities Agreement regarding the use or disposition of any Collateral only with the consent or at the direction of all of the Secured Parties, and (iii) any other provisions in the Master Common Facility Agreement only with the consent or at the direction of the Majority Lenders. (n) The Secured Parties hereby consent to the execution and delivery by the Collateral Agent of the following documents on or before the Initial Funding Date: (i) amendments to the Basic Mortgage and the Lime Mortgages, in substantially the form of Exhibits B-1, B- 2, B-3 and B-4 attached to the Amendment Agreement, dated as of August 1, 1994, among the Dravo Parties, the Lenders and FAB, as agent for the Lenders; (ii) the Mortgage -28- Subordination Agreement, dated as of August 1, 1994, by and between the Collateral Agent and Lime SPV; (iii) the Assignment and Security Agreement; (iv) the SPV Stock Pledge Agreement; (v) the SPV Partner Pledge Agreement; (vi) UCC-1 financing statements with respect to the collateral described in the Assignment and Security Agreement, the SPV Partner Pledge Agreement and the amendments described in clause (i) above; (vii) a Deed of Partial Release (the "Release") with respect to certain improvements located on the Site (as defined in the Note Purchase Agreement) that will be owned by Lime SPV; and (viii) UCC-3 financing statement amendments with respect to the property described in the Release and in the Warranty Bill of Sale and Assignment, dated as of August 1, 1994, by Lime to Lime SPV. (o) Each Secured Party shall have the right, but not the obligation, to provide funds for the purchase price of the "Existing Creditors Call Option" (as defined in Article 5 of the Project Intercreditor Agreement) in an amount equal to such Secured Party's Percentage (as defined in Section 9.1(a) of the Revolving Credit Agreement) of such purchase price (or such lesser or greater amount as such Secured Party may agree to provide)." ARTICLE IV AMENDMENTS TO SECURITY AGREEMENT 4.01. Amendments to Security Agreement The Security Agreement shall be, effective as of the date hereof and subject to the satisfaction of the conditions precedent set forth in Section 5.01 hereof, amended as follows: (a) Amendments to Section 1. Section 1 shall be amended as follows: (i) The definition "Collateral" is amended by deleting the word "and" at the end of subsection (g) thereof, by redesignating subsection "(h)" as subsection "(i)", and by adding the following new subsection (h) immediately after subsection (g) thereof: "(g) all machinery, furnishings, accessories and equipment of the Companies in all of its forms, wherever located (including, without limitation, all machinery and equipment set forth in Schedule VII attached hereto), now or -29- hereafter existing, all fixtures and all parts thereof and all accessions thereto, and any additions, substitutions or replacements thereof; and" (ii) The definition "Assigned Contracts" is amended by adding the following phrase immediately preceding the period at the end thereof: ", and the contracts set forth on Schedule VII attached hereto" (b) Schedule VII attached hereto is hereby designated as "Schedule VII" to the Security Agreement and shall be deemed to be attached thereto and made a part thereof. ARTICLE V CONDITIONS PRECEDENT 5.01. Conditions of Effectiveness This Amendment shall become effective when, and only when, (a) the Agent shall have received counterparts of this Amendment executed by each of the Dravo Parties and the Lenders, (b) all accrued but unpaid interest, fees and expenses under the terms of the Revolving Credit Agreement, as amended hereby, all fees set forth in the Lenders Fee Letter (as defined below) and the Prudential Fee Letter (as defined below), and all outstanding fees and expenses of counsel to the Agent and the Lenders, shall have been paid in full to the extent due and payable after giving effect to this Amendment, (c) the Agent additionally shall have received all of the following documents, each (unless otherwise indicated) being dated the date of receipt thereof by the Agent (which date shall be the same for all such documents), in form and substance satisfactory to the Agent and the Lenders: (i) Copies of (A) all documents evidencing all requisite corporate action of each Dravo Party (including any and all resolutions of the Board of Directors of each Dravo Party) authorizing the execution, delivery and performance of this Amendment and the matters contemplated hereby and thereby, (B) all documents evidencing all Governmental Approvals, if any, with respect to this Amendment and the matters contemplated hereby and thereby, (C) the certificate or articles of incorporation (certified as of a recent date by the Secretary of the State of its jurisdiction of incorporation) and by-laws of each Dravo Party, the SPV General -30- Partner and the SPV Limited Partner, (D) the agreement of limited partnership and the certificate of limited partnership of Lime SPV, and (E) each Transaction Document, in each case certified by the Secretary or an Assistant Secretary of the relevant Dravo Party as being in full force and effect and not having been modified, rescinded or revoked and, in the case of clause (E) above, as being true and correct copies of all of the Transaction Documents. (ii) A good standing certificate issued by the Secretary of State of its incorporation and certificates of qualification to do business as a foreign corporation for each Dravo Party issued by the Secretary of State of each State in which such Dravo Party is required by law to be qualified to do business, each dated as of a date not more than five days prior to the date hereof. (iii) A certificate of the Secretary or an Assistant Secretary of each Dravo Party certifying the names and true signatures of the officers authorized to sign this Amendment on behalf of such Dravo Party and, in the case of Lime and Basic, the amendments to the Lime Mortgages and the Basic Mortgage, and any other documents to be delivered by such Dravo Party hereunder or thereunder. (iv) Duly executed copies of the Notes, in substantially the forms of Exhibits A-1, A-2, A-3, A-4, A- 5, A-6, A-7 and A-8 attached hereto. (v) A duly executed copy of the SPV Stock Pledge Agreement, granting to the Lenders a second priority Lien on the capital stock of the SPV General Partner and the SPV Limited Partner. (vi) A duly executed copy of the SPV Partner Pledge Agreement, granting to the Lenders a second priority Lien on the partnership interests of the SPV General Partner and the SPV Limited Partner in Lime SPV. (vii) A duly executed copy of an amendment to each of the Basic Mortgage and the Lime Mortgages, in substantially the form of Exhibits B-1, B-2, B-3 and B-4, respectively, attached hereto (the "Mortgage Amendments"). (viii) A duly executed copy of the Assignment and Security Agreement. -31- (ix) Evidence satisfactory to the Agent of the completion of all recordings, notices and filings necessary to perfect the Liens created of the SPV Partner Pledge Agreement, the SPV Stock Pledge Agreement, the Assignment and Security Agreement and the Mortgage Amendments. (x) A signed copy of a commitment for title insurance providing for a date-down endorsement to the title insurance policies issued by Commonwealth Land Title Insurance Company, Loan Policy Numbers E0836267, E0835807, E0836263 and E0836659, containing such exceptions as the Lenders may determine to be acceptable. (xi) An executed copy of (A) the fee letter from the Dravo Parties to the Lenders (the Lenders Fee Letter), setting forth certain fees payable to the Lenders on the date of effectiveness of this Amendment (the Effective Date) and (B) the fee letter from the Dravo Parties to Prudential (the Prudential Fee Letter), setting forth certain fees payable to Prudential on the Effective Date. (xii) The six outstanding Letters of Credit issued by the Lenders pursuant to the Revolving Credit Agreement shall have been replaced with new Letters of Credit, each in form and substance satisfactory to the Lenders. (xiii) Each of the conditions precedent set forth in Section 5 of the Note Purchase Agreement shall have been fulfilled to the satisfaction of, or waived by, PruPower and PruPower shall have purchased the Construction Notes. (xiv) A favorable opinion of Buchanan Ingersoll, Professional Corporation, special counsel for the Dravo Parties, in substantially the form of Exhibit D-1 attached hereto. (xv) An opinion from legal counsel licensed to practice in each State in which the property covered by the Lime Mortgages and the Basic Mortgage is located, in substantially the form of Exhibit D-2 attached hereto. (xvi) Such other documents, instruments, approvals (and, if required by the Agent, certified duplicates of executed copies thereof) or opinions as the Agent or any Lender may reasonably request. -32- (d) The representations and warranties contained herein shall be true on and as of the Effective Date; there shall exist on the Effective Date no Event of Default or Default; there shall exist no material adverse change in the financial condition, business operation or prospects of any Dravo Party or its Subsidiaries since December 31, 1993; and each Dravo Party shall have delivered to the Lenders an Officer's Certificate, dated the Effective Date, with respect thereto. ARTICLE VI REPRESENTATIONS AND WARRANTIES 6.01. Representations and Warranties of the Dravo Parties (a) Each of the Dravo Parties hereby repeats and confirms each of the representations and warranties made by it in Article VII of the Override Agreement, as amended hereby, as though made on and as of the date hereof, with each reference therein to "this Agreement", the "Operative Documents", "hereof", "hereunder", "thereof", "thereunder" and words of like import being deemed to be a reference to the Override Agreement and the Operative Documents, in each case as amended hereby. (b) Each of the Dravo Parties represents and warrants as follows: (i) Such Dravo Party and each of its Subsidiaries (other than Lime SPV) is a corporation duly organized, validly existing and in good standing under the laws of the state of its incorporation and is duly qualified to do business in, and is in good standing in, all other jurisdictions where the nature of its business or the nature of property owned or used by it makes such qualification necessary. (ii) Lime SPV is a limited partnership duly organized, validly existing and in good standing under the laws of the state of its organization and is duly qualified to do business in, and is in good standing in, all other jurisdictions where the nature of its business or the nature of property owned or used by it makes such qualification necessary. (iii) The execution, delivery and performance by such Dravo Party of this Amendment are within its corporate powers, have been duly authorized by all necessary corporate action and do not contravene (A) such Dravo Party's charter or by-laws, (B) law or (C) any legal or contractual restriction binding on or affecting such Dravo Party; and such execution, delivery and performance do not -33- or will not result in or require the creation of any Lien (other than as contemplated hereby) upon or with respect to any of its properties. (iv) No Governmental Approval is required for the due execution, delivery and performance by such Dravo Party of this Amendment, except for such Governmental Approvals as have been duly obtained or made and which are in full force and effect on the date hereof and not subject to appeal. (v) This Amendment constitutes the legal, valid and binding obligations of such Dravo Party enforceable against such Dravo Party in accordance with its terms; subject to the qualifications, however, that the enforcement of the rights and remedies herein is subject to bankruptcy and other similar laws of general application affecting rights and remedies of creditors and that the remedy of specific performance or of injunctive relief is subject to the discretion of the court before which any proceedings therefor may be brought. (vi) Except as set forth in the Litigation Status Report, dated August 3, 1994, from James J. Puhala, Vice President, General Counsel and Secretary of Dravo, a copy of which has been delivered to each of the Lenders, there are no pending or threatened actions, suits or proceedings affecting such Dravo Party or any of its Subsidiaries or the properties of such Dravo Party or any of its Subsidiaries before any court, governmental agency or arbitrator, that may, if adversely determined, materially adversely affect the financial condition, properties, business, operations or prospects of such Dravo Party and it Subsidiaries, considered as a whole, or affect the legality, validity or enforceability of the Override Agreement or any other Operative Document, in each case as amended by this Amendment. ARTICLE VII MISCELLANEOUS 7.01. Reference to and Effect on the Operative Documents (a) Upon the effectiveness of this Amendment, on and after the date hereof each reference in the Revolving Credit Agreement and the Override Agreement to "this Agreement", "hereunder", "hereof" or words of like import referring to the Revolving Credit Agreement and the Override Agreement, respectively, and each reference in the other Operative Documents to "the Revolving -34- Credit Agreement", "the Override Agreement", "thereunder", "thereof" or words of like import referring to the Revolving Credit Agreement and the Override Agreement, shall mean and be a reference to the Revolving Credit Agreement and the Override Agreement, respectively, as amended hereby. (b) Except as specifically amended above, the Revolving Credit Agreement, the Override Agreement and the Notes, and all other Operative Documents, are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed. Without limiting the generality of the foregoing, the Security Documents and all of the Collateral described therein do and shall continue to secure the payment of all obligations of the Dravo Parties under the Revolving Credit Agreement, the Notes and the other Operative Documents, in each case as amended hereby. (c) The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Lender or the Agent under any of the Operative Documents, nor constitute a waiver of any provision of any of the Operative Documents. 7.02. Consent to Project Intercreditor Agreement The Dravo Parties hereby consent to the terms and conditions of the Project Intercreditor Agreement and to the Lenders entering into such Agreement. 7.03. Costs and Expenses The Dravo Parties jointly and severally agree to pay on demand all costs and expenses incurred by the Agent and the Lenders in connection with the preparation, execution and delivery of this Amendment, the Transaction Documents and the other documents to be delivered hereunder and thereunder, including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the Agent and the Lenders with respect thereto and with respect to advising the Agent and the Lenders as to their rights and responsibilities under this Amendment. The Dravo Parties jointly and severally further agree to pay on demand all costs and expenses, if any (including, without limitation, reasonable counsel fees and expenses of counsel), incurred by the Agent and the Lenders in connection with the enforcement (whether through negotiations, legal proceedings or otherwise) of this Amendment, the Transaction Documents and the other documents to be delivered hereunder and thereunder, including, without limitation, counsel fees and expenses in connection with the enforcement of rights under this Section 7.03. 7.04. Execution in Counterparts This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be -35- deemed to be an original and all of which taken together shall constitute but one and the same instrument. 7.05. Governing Law This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York. [Signatures on Next Two Pages.] -36- IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written. FIRST ALABAMA BANK By F. W. TAUL Name: F. W. Taul Title: Executive Vice President PNC BANK, NATIONAL ASSOCIATION By RICHARD D. RODGERS Name: Richard D. Rogers Title: Vice President CONTINENTAL BANK By ADAM BALBACH Name: Adam Balbach Title: Vice President THE PRUDENTIAL INSURANCE COMPANY OF AMERICA By CATHERINE A. CATES Vice President -37,38,39- DRAVO CORPORATION By ERNEST F. LADD III Name: Ernest F. Ladd III Title: Executive Vice President DRAVO LIME COMPANY By ERNEST F. LADD III Name: Ernest F. Ladd III Title: Executive Vice President DRAVO BASIC MATERIALS COMPANY, INC. By ERNEST F. LADD III Name: Ernest F. Ladd III Title: Executive Vice President -40- SCHEDULE I SCHEDULE I TO REVOLVING CREDIT AGREEMENT Financing Commitments (Expressed in Millions) FIRST ALABAMA BANK - Revolving Line of Credit and Letters of Credit Facilities Combined $23.91 PNC BANK, NATIONAL ASSOCIATION - Revolving Line of Credit and Letters of Credit Facilities Combined $18.48 CONTINENTAL BANK - Revolving Line of Credit and Letters of Credit Facilities Combined $21.74 THE PRUDENTIAL INSURANCE COMPANY OF AMERICA - Revolving Line of Credit and Letters of Credit Facilities Combined $10.87 TOTAL $75.0 -41- SCHEDULE II SCHEDULE II TO REVOLVING CREDIT AGREEMENT Maximum Stated Amount of Letters of Credit To Be Issued (or Cause To Be Issued) By Lenders Lender's Stated Amount Percentage FIRST ALABAMA BANK $3,179,905.00 31.88% PNC BANK, NATIONAL $2,457,740.00 24.64% ASSOCIATION CONTINENTAL BANK $2,891,635.00 28.99% THE PRUDENTIAL INSURANCE COMPANY OF AMERICA $1,445,320.00 14.49% TOTAL $9,974,600.00 100.00% -42- EX-4 7 SIGNATURES SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. DRAVO CORPORATION (Registrant) Date: November 15, 1994 /s/ERNEST F. LADD III Ernest F. Ladd III Executive Vice President, Finance and Administration Date: November 15, 1994 /s/LARRY J. WALKER Larry J. Walker Controller (Principal Accounting Officer) -----END PRIVACY-ENHANCED MESSAGE-----