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Loan Agreement - The Industrial Development Authority of the City of Moberly, Missouri and Everlast Fitness Manufacturing Corp.
Manufacturing Forms
LOAN AGREEMENT
Between
THE INDUSTRIAL DEVELOPMENT AUTHORITY
OF THE CITY OF MOBERLY, MISSOURI
And
EVERLAST FITNESS MFG. CORP.
----------------------
Dated as of March 1, 1996
----------------------
Relating to
$4,250,000
The Industrial Development Authority
of the City of Moberly, Missouri
Variable Rate Demand
Private Activity Revenue Bonds, Series 1996
(Everlast Fitness Mfg. Corp. Project)
--------------------------------------------------------------------------------
All right, title and interest of The Industrial Development Authority of the
City of Moberly, Missouri in this Agreement (with the exception of its rights
under Sections 4.2(c), 5.3 and 6.3 hereof) has been assigned pursuant to the
Indenture referred to herein, for the benefit of the owners of, and as security
for payment of, the Bonds of said Issuer described herein.
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TABLE OF CONTENTS
Parties......................................................................1
Preamble.....................................................................1
ARTICLE 1
DEFINITION OF TERMS
Section 1.1 Definitions...................................................1
ARTICLE 2
REPRESENTATIONS
Section 2.1 Representation of the Issuer..................................5
Section 2.2 Representation of the Borrower ...............................5
ARTICLE 3
CONSTRUCTION OF THE PROJECT; ISSUANCE OF THE BONDS
Section 3.1 Agreement to Construct and Equip the Project..................6
Section 3.2 Agreement to Issue Bonds: Application of Bond Proceeds........7
Section 3.3 Disbursements from the Project Fund...........................7
Section 3.4 Establishment of Completion Date: Obligation of the Borrower
to Compete....................................................9
Section 3.5 Investments..................................................11
Section 3.6 Arbitrage Certifications.....................................11
Section 3.7 Cost of Issuance.............................................12
ARTICLE 4
LOAN OF BOND PROCEEDS; PAYMENT OBLIGATIONS
Section 4.1 Loan of Bond Proceeds........................................12
Section 4.2 Amounts Payable by Borrower..................................12
Section 4.3 No Defense or Set-off, Unconditional Obligation..............14
Section 4.4 Assignment and Pledge of Issuer's Rights.....................15
Section 4.5 No Third Party Beneficiary...................................15
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ARTICLE 5
SPECIAL COVENANTS AND AGREEMENTS
Section 5.1 Right of Access to the Project...............................15
Section 5.2 Maintain its Existence: Conditions Under Which Executions
Permitted....................................................15
Section 5.3 Release and Indemnification Covenants........................16
Section 5.4 Validity and Tax-exempt Status of the Bonds..................17
Section 5.5 Taxes and Government Charges.................................18
Section 5.6 Maintenance and Repair; Insurance............................18
Section 5.7 Financial Reports............................................19
Section 5.8 Letter of Credit.............................................19
Section 5.9 Option to Convert to Fixed Rate..............................21
Section 5.10 Operation of Project.........................................22
Section 5.11 Qualification in State.......................................22
Section 5.12 Compliance with Orders, Ordinances, Etc......................22
Section 5.13 No Warranty by Issuer........................................22
Section 5.14 Insurance and Condemnation Awards............................22
Section 5.15 Governmental Approvals.......................................24
ARTICLE 6
EVENTS OF DEFAULT AND REMEDIES
Section 6.1 Events of Default............................................26
Section 6.2 Remedies on Default..........................................28
Section 6.3 Agreement to Pay Attorneys' Fees and Expenses................29
Section 6.4 No Remedy Exclusive..........................................29
Section 6.5 No Implied Waiver............................................29
Section 6.6 Notice of Default............................................30
ARTICLE 7
PREPAYMENT
Section 7.1 Obligation to Prepay.........................................30
Section 7.2 Option to Prepay.............................................31
Section 7.3 Redemption of the Bonds......................................31
ARTICLE 8
MISCELLANEOUS
Section 8.1 Notices......................................................32
Section 8.2 Assignment By Borrower.......................................32
Section 8.3 Severability.................................................32
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Section 8.4 Execution of Counterparts....................................32
Section 8.5 Amounts Remaining in any Fund or With Trustee................32
Section 8.6 Amendments, Changes and Modification.........................32
Section 8.7 Governing Law................................................32
Section 8.8 Authorized Borrower Representative...........................33
Section 8.9 Term of this Agreement.......................................33
Section 8.10 Binding Effect...............................................33
Section 8.11 Limited Liability of Officers, Etc...........................33
Section 8.12 References to Bank, Letter of Credit and Credit Facility.....34
Exhibit A Project Description
Exhibit B Description of Project Site
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LOAN AGREEMENT
THIS LOAN AGREEMENT dated as of March 1, 1996, by and between THE
INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF MOBERLY, MISSOURI, a public
corporation of the State of Missouri (the "Issuer"), and EVERLAST FITNESS MFG.
CORP., a corporation duly organized and validly existing under the laws of the
State of Missouri (the "Borrower");
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Issuer is empowered by the provisions of Chapter 349,
Revised Statutes of Missouri (1994), as amended (the "Act"), to issue its
revenue bonds to finance "projects" within the meaning of the Act (including
manufacturing plants) for the purposes set forth in the Act; and
WHEREAS, pursuant to and in accordance with the provisions of the Act,
and at the request of the Borrower, the Issuer has agreed to issue its Variable
Rate Demand Private Activity Revenue Bonds, Series 1996 (Everlast Fitness Mfg.
Corp. Project) in the aggregate principal amount of $4,250,000 (the "Bonds") and
to loan the proceeds thereof to the Borrower to defray the cost of certain
manufacturing facilities (the "Project") located in the City of Moberly,
Missouri for ownership and use by the Borrower; and
WHEREAS, the Bonds will be secured by (i) an assignment and pledge of
the Issuer's rights under this Agreement (except its rights under Sections
4.2(c), 5.3 and 6.3 hereof) and (ii) moneys derived from drawings under the
irrevocable, transferable direct pay letter of credit issued by Chemical Bank, a
New York banking corporation, in favor of Commerce Bank, National Association,
as Trustee for the benefit of the owners from time to time of the Bonds, and any
other letter of credit or credit facility issued in accordance with the terms
hereof, and
WHEREAS, the execution and delivery of this Agreement have been in all
respects duly and validly authorized by action of the Issuer's governing body;
NOW, THEREFORE, in consideration of the respective representations and
agreements herein contained, the parties hereto agree as follows (provided, that
in the performance of the agreements of the Issuer herein contained, any
obligation it may thereby incur shall be payable solely out of the revenues and
receipts derived from this Agreement, the sale of the Bonds, the income from the
temporary investment thereof and moneys derived from any Credit Facility):
ARTICLE 1
DEFINITION OF TERMS
Section 1.1 Definitions. All words and phrases defined in Article I of
the Indenture shall have the same meanings in this Agreement. Certain terms used
in this Agreement are hereinafter defined in this Article I. When used herein,
such terms shall have the meanings given them by the language employed in this
Article I defining such terms unless the context clearly indicates otherwise:
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"Agreement" means this Loan Agreement, as from time to time
supplemented and amended.
"Authorized Borrower Representative" means such person at the time and
from time to time designated to act on behalf of the Borrower by written
certificate furnished to the Issuer, the Bank and the Trustee, containing the
specimen signature of such person, signed on behalf of the Borrower by the chief
executive officer, the vice chairman, any vice president, the treasurer, any
assistant treasurer, the secretary or any assistant secretary of the Borrower.
Such certificate may designate an alternative or alternatives.
"Borrower" means Everlast Fitness Mfg. Corp., a corporation duly
organized and validly existing under the laws of the State of Missouri, and any
surviving, resulting or transferee corporation as permitted by Section 5.2
hereof.
"Completion Date" means the date of completion of the Project.
"Construction Period" means the period between the beginning of
construction of the Project or the date on which Bonds are first delivered to
the purchasers thereof, whichever is earlier, and the Completion Date.
"Cost of the Project" means the sum of the items authorized to be paid
from the Project Fund pursuant to the provisions of Section 3.3 hereof.
"Determination of Taxability" means a decision by the Internal Revenue
Service or a court of competent jurisdiction, as a result of a proceeding in
which the Borrower participates or is given the opportunity to participate, at
its expense, from which decision no further right of appeal exists, that as a
result of any action taken, permitted or omitted to be taken by the Borrower,
the interest payable on the Bonds (or any of the Bonds) is includable in the
gross income of any owner thereof for federal income tax purposes (other than
any owner who is a "substantial user" or a "related person" within the meaning
of Section 147(a) of the Code and the applicable regulations thereunder).
"Event of Default" means any occurrence or event specified as such in
and defined as such by Section 6.1 hereof.
"Event of Taxability" means the enactment of legislation, the issuance
or rendering of a judicial decision or decree, or an order, ruling, regulation
or official statement of general application of the Department of the Treasury
or of the Internal Revenue Service of the United States, the issuance or
revocation of any published ruling or other announcement or procedure of general
application by the Department of the Treasury or the Internal Revenue Service of
the United States, or the occurrence of any other act, event or circumstance,
but in all cases excluding the occurrence of a Determination of Taxability,
which, in the opinion of Bond Counsel, will cause interest income on the Bonds,
or any portion thereof, to be includable either currently or retroactively in
the gross income of any owner thereof for federal income tax purposes (other
than an owner who is a "substantial user" or "related person' within the meaning
of Section 147(a) of the Code and the applicable regulations thereunder).
Notwithstanding the foregoing, no Event of Taxability shall occur unless the
Borrower has been afforded the opportunity, at its
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expense, to contest any such opinion of Bond Counsel and until the Trustee, the
Issuer and the Borrower shall have agreed with such opinion after such contest;
provided, however, that, such contest must be completed within 180 days of such
opinion of Bond Counsel or, if the Borrower has decided to seek a determination
by the Internal Revenue Service or a court of competent jurisdiction as to the
status of the interest income on the Bonds, then no Event of Taxability shall
occur until a Determination of Taxability occurs. Taxes which are or may be
imposed on the interest payable on the Bonds because such interest is or may be
as a specific preference item for individuals or corporations or as an
adjustment item in computing any minimum tax or in computing the environmental
tax imposed on certain corporations or in computing the branch profits tax
imposed on certain foreign corporations are examples of taxes which do not
result in the interest payable on the Bonds (or any of the Bonds) being
includable in the gross income of any owner thereof for federal income tax
purposes.
"Manufacturing Facilities" means manufacturing facilities within the
meaning of Section 144(a)(12)(c) of the Code.
"Mid-Month" means the fifteenth day of any month, whether or not a
Business Day.
"MSRB" means the Municipal Securities Rulemaking Board.
"NRMSIR" means any information repository recognized by the Securities
and Exchange Commission as a nationally recognized municipal securities
information repository under its Rule 15c2- 12.
"Obligations" shall have the same meaning herein as in the Letter of
Credit Agreement.
"Permitted Investments" means:
(a) Bonds or other obligations of the United States of
America;
(b) Bonds or other obligations, the payment of the principal
and interest of which is unconditionally guaranteed by the United
States of America;
(c) Obligations issued or guaranteed as to principal and
interest by any agency or person controlled or supervised by and acting
as an instrumentality of the United States of America pursuant to
authority granted by the Congress of the United States of America;
(d) Securities or receipts evidencing ownership interests in
obligations or specified portions (such as principal or interest) of
obligations described in (a), (b) or (c) above;
(e) Commercial or finance company paper which is rated either
P-1 or A-1 or an equivalent by Moody's or S&P (including investments in
pools or such commercial or finance company paper owned by the Trustee
or any affiliate of the Trustee);
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(f) Obligations issued by or on behalf of any state of the
United States of America, or any political subdivision of any such
state, which are rated at least A (or an equivalent) by Moody's or S&P;
(g) Funds comprised of obligations described in (f) above to
the extent described under the definition of "tax-exempt bond" in
Treasury Regulation 1.150-1(b), including any such fund managed by the
Trustee or any affiliate of the Trustee;
(h) Money market funds which are rated prime-1 or AAAm (or an
equivalent) by Moody's or S&P, including any such money market fund
managed by the Trustee or any affiliate of the Trustee; or
(i) Any other investment not prohibited by the applicable law
(as evidenced by an opinion of Counsel furnished to the Trustee).
"Plans and Specifications" means the plans and specifications prepared
for the Project by the Borrower, as amended from time to time prior to the
Completion Date, which plans and specifications are on file at the principal
office of the Borrower and a copy of which has been filed with the Bank.
"Project" means those items of machinery, equipment, structures and
related property being or to be acquired and constructed or installed at the
Project Site with proceeds from the sale of the Bonds or the proceeds of any
payment by the Borrower pursuant to Section 3.4 of this Agreement, as more
particularly described in Exhibit A hereto.
"Project Site" means the real estate and interests therein constituting
the site of the Project, as described in Exhibit B hereto.
"Rule 15c2-12" means Rule 15c2-12 adopted by the Securities and
Exchange commission under the Securities Exchange Act of 1934, as it may be
amended from time to time.
"SID" means any public or private information depository, if any,
designated by the State as such for purposes of Rule 15c2-12.
"State" means the State of Missouri.
"Tax Agreement" means the Federal Income Tax Compliance Agreement,
dated the Dated Date, by and among the Issuer, the Borrower and the Trustee, as
from time to time supplemented and amended.
The words "hereof", "herein", "hereunder" and other words of similar
import refer to this Agreement as a whole.
Unless otherwise specified, references to Articles, Sections and other
subdivisions of this Agreement are to the designated Articles, Sections and
other subdivisions of this Agreement as originally executed.
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The titles and headings of the paragraphs of this Agreement are for
convenience only and shall not define or limit the provisions hereof.
ARTICLE 2
REPRESENTATIONS
Section 2.1 Representations of the Issuer. The Issuer makes the
following representations as the basis for the undertakings on its part herein
contained:
(a) The Issuer is a public corporation of the State, duly
organized and validly existing under the laws and Constitution of the
State.
(b) Under the provisions of the Act and proceedings of the
Issuer, the Issuer has the power and authority to enter into the
transactions contemplated by, and to execute and deliver, this
Agreement, the Tax Agreement, the Indenture and the Bonds and to carry
out its obligations hereunder and thereunder.
(c) None of the execution and delivery of this Agreement, the
Indenture, the Tax Agreement and the Bonds, the consummation of the
transactions contemplated hereby or thereby and the fulfillment of or
compliance with the terms and conditions of this Agreement, the
Indenture, the Tax Agreement and the Bonds conflicts with or results in
a breach of the terms, conditions or provisions of any restriction or
any agreement or instrument to which the Issuer is now a party or by
which it is bound, or constitutes a default under any of the foregoing.
(d) The Bonds are to be issued under the Indenture and the
payment of the principal of, premium, if any, and interest on the Bonds
is to be secured under the Indenture by an assignment and pledge to the
Trustee of all right, title and interest of the Issuer in and to this
Agreement (except the rights of the Issuer under Sections 4.2(c), 5.3
and 6.3 hereof) and the Letter of Credit or any other Credit Facility.
(e) The Issuer has not assigned or pledged and will not assign
or pledge its right, tide or interest in or to this Agreement, other
than to secure the Bonds and as otherwise provided in the Indenture.
(f) The Issuer has not been notified of any listing or
proposed listing of it by the Internal Revenue Service as a bond issuer
whose arbitrage certifications may not be relied upon.
Section 2.2 Representations of the Borrower. The Borrower makes the
following representations as the basis for the undertakings on its part herein
contained:
(a) The Borrower is a corporation duly organized and validly
existing under the laws of the State, is authorized to do business in,
and is in good standing under the
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laws of, the State, and has the power to enter into, and by proper
corporate action has been duly authorized to execute and deliver, this
Agreement and the Tax Agreement.
(b) None of the execution and delivery of this Agreement and
the Tax Agreement, the consummation of the transactions contemplated
hereby or thereby, and the fulfillment of or compliance with the terms
and conditions of this Agreement and the Tax Agreement, conflicts with
or results in a breach of any of the terms, conditions or provisions of
any restriction or any agreement or instrument to which the Borrower is
now a party or by which it is bound, or constitutes a default under any
of the foregoing, or results in the creation or imposition of any lien,
charge or encumbrance whatsoever upon any of the property or assets of
the Borrower or any subsidiary thereof (excluding any liens created in
contemplation of the issuance of the Bonds or otherwise permitted under
this Agreement or the Indenture). No condition exists to the knowledge
of the Borrower which would, upon the execution of the Agreement, with
the lapse of time or the giving of notice, or both, become an Event of
Default hereunder.
(c) The statements, information, descriptions, estimates and
assumptions contained in the Tax Agreement are true, correct and
complete and are based upon the best information available to the
Borrower.
(d) The Borrower intends to operate the Project in a manner
consistent with the purposes of the Act until the date on which the
Bonds have been fully paid and are no longer Outstanding and knows of
no reason why the Project will not be so used. If, in the future, there
is a cessation of such use, the Borrower will use its best efforts to
resume such use or accomplish an alternate use by it or others which
will be consistent with the Act. The Borrower agrees that the actions
herein permitted to be taken shall only be taken in such manner as
shall not materially impair the character or significance of the
Project as furthering the purposes of the Act.
ARTICLE 3
CONSTRUCTION OF THE PROJECT; ISSUANCE OF THE BONDS
Section 3.1 Agreement to Construct and Equip the Project. (a) The
Borrower agrees that it will acquire and construct, or complete the acquisition
and construction and construction of, the Project substantially in accordance
with the Plans and Specifications. In the event that Exhibit A hereto is to be
amended or supplemented in accordance with the provisions of Section 12.1 of the
Indenture, the Issuer will enter into, and will instruct the Trustee to consent
to, an amendment of or supplement to Exhibit A hereto upon receipt of:
(i) a certificate of an Authorized Borrower
Representative describing in detail the proposed changes; and
(ii) a copy of the proposed form of amendment or
supplement to Exhibit A hereto and such other documents,
certificates and showing as may be
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required by counsel rendering the opinion described in clause
(c) of this paragraph; and
(iii) an opinion of Bond Counsel to the effect that
such amendment complies with the requirements of this Section
3.1, is in proper form for execution and delivery by the
Issuer and will not adversely affect the validity of the Bonds
or the exemption from federal income taxes of the interest
thereon.
(b) The Borrower shall have the right to enter into or to
authorize the entering into of change orders with respect to the
Project without obtaining the Bank's or the Construction Consultant's
prior consent, provided that (i) no such change order will materially
change the gross square feet or the manufacturing capacity of its
Project after completion of construction of the Project, or involve the
use of materials or equipment which will not be at least equal in
quality to the materials and equipment originally specified in or
required by the Plans and Specifications, as accepted by the Bank and
the Construction Consultant, (ii) no such change order shall, in a
single instance, result in an increase or decrease in the cost of
constructing the Project of more than $20,000, and (iii) the aggregate
cost of all such change orders which have not been accepted by the Bank
and the Construction Consultant shall not, at any given time, result in
an increase or decrease in the cost of constructing the Project of more
than $150,000, it being agreed that such aggregate $150,000 maximum
increase or decrease in the cost of constructing the Project as a
result of such change orders shall not include the cost of any change
order entered into without the prior acceptance of the Bank and the
Construction Consultant pursuant to this paragraph with respect to
which the acceptance of the Bank and the Construction Consultant shall
have been subsequently obtained. The Borrower shall also have the
right, without obtaining the Bank's or the Construction Consultant's
prior acceptance, to enter into change orders or field changes which do
not increase or decrease the cost of constructing the Project, provided
that the requirements of clause (i) of the preceding sentence are
satisfied with respect thereto. The Borrower shall submit to the Bank
and the Construction Consultant copies of all change orders entered
into with respect to the Project within fifteen (15) days after the
same entered into and irrespective of whether the same require the
prior acceptance of the Bank and the Construction Consultant pursuant
to this Agreement.
Section 3.2 Agreement to Issue Bonds: Application of the Bond Proceeds.
To provide funds to finance the Cost of the Project, the Issuer agrees that it
will issue under the Indenture, sell and cause to be delivered to the
Underwriter, the Bonds in the aggregate principal amount of $4,250,000 bearing
interest and maturing as set forth in the Indenture. The Issuer will thereupon
deposit the proceeds received from the sale of the Bonds as follows; (1) in the
Bond Fund, a sum equal to the accrued interest, if any, paid by the Underwriter;
and (2) in the Project Fund, the balance of the proceeds received from the sale
of the Bonds.
Section 3.3 Disbursements from the Project Fund. The Issuer hereby
authorizes and directs the Trustee, upon the compliance with Section 6.7 of the
Indenture, to disburse the moneys in the Project Fund to or on behalf of the
Borrower for the following purposes (but, subject to the provisions of Section
3.4 and 3.5 hereof, for no other purpose):
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(a) Payment to the Borrower of such amounts, if any, as shall
be necessary to reimburse the Borrower in full for all advances and
payments made by it at any time prior to or after the delivery of the
Bonds for expenditures in connection with the preparation of the Plans
and Specifications (including any preliminary study or planning of the
Project or any aspect thereof) and the construction and acquisition of
the Project.
(b) Payment of the initial or acceptance fee of the Trustee
and the Tender Agent, legal, financial and accounting fees and
expenses, rating agency fees, original issue discount, and printing and
engraving costs incurred in connection with the authorization, sale and
issuance of the Bonds, the execution and recording of the Indenture and
the preparation and recording or filing of all other documents in
connection therewith, and payment of all fees, costs and expenses for
the preparation of the Agreement, the Tax Agreement, the Indenture and
all other documents in connection with the authorization, sale and
issuance of the Bonds; provided, however, that in no event shall the
Borrower or the Issuer permit the use of more than $85,000 of the
Proceeds of the Bonds (including but not limited to investment earnings
and profits) to finance costs relating to the issuance of the Bonds
within the meaning of Section 147(g) of the Code, including any
underwriter's discount or placement agent's fee.
(c) Payment for labor, services, materials and supplies used
or furnished in the construction and acquisition of the Project, and
payment of amounts due under contracts for the acquisition,
construction and installation of the Project, all as provided in the
Plans and Specifications and work orders therefor.
(d) Payment of the fees, if any , for architectural,
engineering, legal, underwriting and supervisory services with respect
to the Project.
(e) To the extent not paid by a contractor for construction or
installation with respect to any part of the Project, payment of the
premiums on all insurance required to be taken out and maintained
during the Construction Period.
(f) Payment of the taxes, assessments and other charges, if
any, that may become payable during the Construction Period with
respect to the Project, or reimbursement thereof if paid by the
Borrower.
(g) Interest on the Bonds during construction of the Project.
(h) Payment of any other costs which constitute part of the
Cost of the Project in accordance with generally accepted accounting
principles and which are permitted by the Act and will not affect the
exemption from federal income taxes of interest on any of the Bonds.
The Borrower covenants and agrees that at all times at least 95% of the
moneys so disbursed out of the Project Fund, excluding amounts used to pay or
reimburse the Borrower for the payment of interest on the Bonds and Letter of
Credit fees to the extent herein authorized, will be used to pay or reimburse
the Borrower for the payment of qualifying costs of Manufacturing Facilities.
The Borrower further covenants and agrees that it will not take any
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action or authorize or permit, to the extent such action is within its control,
any action to be taken which would cause the interest on the Bonds to become
includable in the federal gross income of the owners of the Bonds, provided that
the Borrower shall not have violated this covenant if the interest on any of the
Bonds becomes includable in the federal gross income of an owner who is a
"substantial user" of the Project or a "related person" within the meaning of
Section 147(a) of the Code.
Any disbursement request of Proceeds of the Bonds in the Project Fund
for any item not described in, or the cost for which item is other than as
described in, the Tax Agreement which formed the basis for the information
statement filed in connection with the issuance of the Bonds as required by
Section 149(e) of the Code shall be accompanied by a certificate from Authorized
Borrower Representative to the Trustee that the average reasonably expected
economic life of the Project being financed by the Bonds will not be reduced or,
if such evidence is not presented with the disbursement or at the request of the
Trustee, by an Opinion of Bond Counsel to the effect that such disbursement will
not adversely affect the exclusion of the interest on the Bonds from gross
income for federal income tax purposes under the Code.
The Borrower understands that the Tax Agreement may impose additional
restrictions on withdrawals from the Project Fund, and the Borrower agrees to be
bound by such restrictions, if any.
All moneys remaining in the Project Fund after the Completion Date and
after payment or provision for payment of all other items provided for in the
preceding subsections (a) to (i), inclusive, of this Section, shall at the
direction of the Borrower be used in accordance with Section 3.4 hereof.
Section 3.4 Establishment of Completion Date: Obligation of the
Borrower to Complete. As soon as practicable after the completion of
construction of the Project, and in any event not more than ninety (90) days
thereafter, the Borrower shall furnished to the Trustee a certificate signed by
an Authorized Borrower Representative and the Construction Consultant stating
(i) that construction of the Project has been completed substantially in
accordance with the Plans and Specifications, (ii) the Completion Date, (iii)
the Cost of the Project, (iv) the portion of the Cost of the Project which has
then been paid and (v) the portion of the Cost of the Project which has not yet
then been paid. Such certificate may state that it is given without prejudice to
any rights against third parties which exist at the date of such certificate or
which may subsequently come into being. Moneys (including investment proceeds)
remaining in the Project Fund on the date of such certificate may be used, at
the direction of an Authorized Borrower Representative, to the extent indicated,
for one or more of the following purposes:
(a) for the payment, in accordance with the provisions of this
Agreement, of any Cost of the Project not then paid as specified in the
above-mentioned certificate; or
(b) for transfer to the Bond Fund, but only if, and to the
extent that, the Trustee has been furnished with an opinion of Bond
Counsel to the effect that such transfer is permitted by the Act and
does not adversely affect the exemption from federal income taxes of
interest on any of the Bonds; or
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(c) for the redemption of Bonds in accordance with the
provisions of Section 3.1(e) of the Indenture within 180 days following
the filing of said completion certificate with the Trustee, such moneys
to be used only to pay principal of Bonds upon any such redemption.
Any moneys (including investment proceeds) remaining in the Project
Fund on the date of the aforesaid certificate and not set aside for the payment
of the Cost of the Project as specified in (a) above or transferred to the Bond
Fund pursuant to (b) above shall on such date be placed by the Trustee in a
separate and segregated escrow account and used to pay principal of the Bonds
upon the redemption thereof as provided in (c) above; provided that, until so
used such moneys may also be used, at the direction of the Borrower, for one or
more of the following purposes:
(d) to pay all or part of the price of purchasing Bonds on
tender, in the open market or at private sale, on or before such date
or dates, for the purpose of cancellation;
(e) for the payment of the cost of any additional
Manufacturing Facilities, provided that prior to such use this
Agreement is amended in accordance with Section 3.1 hereof to include
such additional facilities within the definition of Project as used
herein; or
(f) for any other purpose;
provided that, no moneys on deposit in such escrow account may be used for any
of the purposes specified in (d), (e) or (f) of this paragraph unless and until
the Borrower delivers to the Trustee an opinion of Bond Counsel upon which the
Trustee may rely to the effect that such use is permitted by the Act and does
not adversely affect the exemption from federal income taxes of interest on any
of the Bonds; and provided further that, until used for one or more of the
foregoing purposes, moneys on deposit in such escrow account may be invested in
investments authorized by the first paragraph of Section 3.5 of this Agreement,
but may not be invested to produce a yield on such moneys (computed from the
Completion Date and taking into account any investment of such moneys during the
period from the Completion Date until such moneys were deposited in such escrow
account) greater than the yield on the Bonds, all as such terms are used in and
determined in accordance with relevant provisions of the Code and regulations
promulgated or proposed thereunder.
In the event the moneys in the Project Fund available for payment of
the Cost of the Project should not be sufficient to pay the costs thereof in
full, the Borrower agrees to pay directly, or to deposit in the Project Fund
moneys sufficient to pay, the costs of completing the Project as may be in
excess of the moneys available therefor in the Project Fund. The Issuer does not
make any warranty, either express or implied, that the moneys which will be paid
into the Project Fund and which, under the provisions of this Agreement, will be
available for payment of the Cost of the Project, will be sufficient to pay all
the costs which will be incurred in that connection. The Borrower agrees that if
after exhaustion of the moneys in the Project Fund the Borrower should pay, or
deposit moneys in the Project Fund for the payment of, any portion of the Cost
of the Project pursuant to the provisions of this Section, it shall not be
entitled to any reimbursement therefor from the Issuer, the Bank or from the
Trustee or from the owners
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of any of the Bonds, nor shall it be entitled to any diminution of the amounts
payable under Section 4.2 hereof.
Section 3.5 Investments. Any moneys held as a part of the Project Fund,
the Bond Fund (other than the Credit Facility Account therein) or the Rebate
Fund shall be invested or reinvested by the Trustee, at the direction of the
Authorized Borrower Representative as provided in Article VII of the Indenture
and in the Tax Agreement, to the extent permitted by law in Permitted
Investments. Any such investment may be purchased at the offering or market
price thereof at the time of such purchase. The Trustee may Trustee may make any
and all such investments through its own bond department.
The investments so purchased shall be held by the Trustee and shall be
deemed at all times a part of the fund for which they were made, and the
interest accruing thereon and any profit realized therefrom shall be credited to
such fund and any net losses resulting from such investment shall be charged to
such fund (on the date on which the proceeds of any such investment are needed
for the purposes of such fund) and paid by the Borrower.
Any moneys held as part of the Bond Purchase Fund or the Credit
Facility Account of the Bond Fund shall not be invested.
The Borrower covenants that any funds (including investment proceeds)
on deposit in the Project Fund more than three years after the date of the
delivery of the Bonds will not be invested to produce a yield greater than the
yield on the Bonds, all as such terms are used in and determined in accordance
with the regulations promulgated or proposed under relevant provisions of the
Code.
Section 3.6 Arbitrage Certifications. The Borrower reasonably expects,
based on its knowledge, information and belief, and hereby certifies and
represents to the Issuer and the Issuer hereby certifies that it reasonably
expects, that the proceeds of the Bonds will not be used in a manner that would
cause the Bonds to be classified as "arbitrage bonds" under Section 148 of the
Code and regulations prescribed under that Section. The Issuer and the Borrower
jointly and severally certify and covenant with all purchasers and owners of the
Bonds from time to time outstanding and with the Bank that, so long as any of
the Bonds remain outstanding, moneys on deposit in any fund or account in
connection with the Bonds, whether or not such moneys were derived from the
proceeds of the sale of the Bonds or from any other sources, will not be used in
a manner which will cause the Bonds to be "arbitrage bonds" within the meaning
of the Code, and any lawful regulations promulgated or proposed thereunder. The
Borrower covenants for the benefit of the Issuer and the purchasers of the Bonds
and the Bank that all actions with respect to the Bonds required by Section
148(f) of the Code shall be taken. Upon request of the Issuer or the Trustee,
the Borrower shall within 25 days after (i) each anniversary of the Dated Date,
unless the final payment, whether upon redemption in whole or at maturity, of
the Bonds shall have occurred prior to such anniversary, and (ii) such final
payment, file with the Trustee a statement to the effect that the Borrower is
then in compliance with its covenant contained in the preceding sentence,
together with supporting calculations; provided, however, that if the Borrower
shall furnish to the Trustee and the Issuer an opinion of Bond Counsel to the
effect that no further action by the Borrower is required for such compliance
with respect to the Bonds, the Borrower shall not thereafter be required to
delivery any such statements or calculations.
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Section 3.7 Costs of Issuance. The Borrower covenants and agrees to pay
all costs incurred in connection with the issuance of the Bonds, and the Issuer
shall have no obligation with respect to such costs.
ARTICLE 4
LOAN OF BOND PROCEEDS; PAYMENT OBLIGATIONS
Section 4.1 Loan of Bond Proceeds. The Issuer agrees, upon the terms
and conditions in this Agreement, to lend to the Borrower the proceeds
(exclusive of accrued interest, if any) received by the Issuer from the sale of
the Bonds.
Section 4.2 Amounts Payable by Borrower.
(a) The Borrower covenants and agrees to pay to the Trustee as
a loan repayment installment, on each date provided below until the
principal of, premium, if any, and interest on the Bonds shall have
been fully paid or provisions for the payment thereof shall have been
made in accordance with the Indenture, in lawful money of the United
States of America, for deposit in the Bond Fund, a sum equal to the
following amounts:
(1) During the Variable Rate Period:
(i) on May 15, 1996 and June 15, 1996 an
amount equal to one-half (1/2) of the amount
coming due (based on the interest rate(s) in
effect from the Dated Date of the Bonds) as
interest on the Bonds on July 1, 1996;
(ii) on July 15, 1996 and on the fifteenth
(15th) day of each month thereafter, an
amount equal to one-third (1/3) of the
amount coming due (based on the interest
rate(s) in effect from the next previous
Variable Rate Interest Payment Date) on the
next succeeding Variable Rate Interest
Payment Date;
(iii) on May 15, 1996 and on the fifteenth
(15th) day of each month thereafter to and
including March 15, 1997, an amount equal to
one- eleventh (1/11) of the amount coming
due as principal of the Bonds on April 1,
1997;
(iv) on April 15, 1997, and on the fifteenth
(15th) day of each month thereafter, an
amount equal to one-twelfth (1/12) of the
amount coming due as principal of the Bonds
on the next succeeding April 1.
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(2) During the Fixed Rate Period:
(i) On the fifteenth (15th) day of each
month, an amount equal to the amount coming
due as interest on the Bonds on the next
succeeding Fixed Rate Interest Payment Date
divided by the number of Mid-Months from the
Conversion Date or last previous Fixed Rate
Interest Payment Date, as the case may be,
to the next succeeding Fixed Rate Interest
Payment Date;
(ii) on the fifteenth (15th) day of each
month, an amount equal to the amount coming
due as principal on the Bonds on the next
succeeding April 1 divided by the number of
Mid-Months from the Conversion Date or last
previous April 1, as the case may be, to the
next succeeding April 1.
(3) Upon the redemption of any Bonds, on the
fifteenth (15th) day immediately preceding the date
fixed for redemption, to the extent not already on
deposit in the Bond Fund and available for payment
thereof, an amount equal to the redemption price of
the Bonds to be redeemed.
(4) On the third Business Day before any principal
of, premium or interest on the Bonds is due and
payable, the Trustee will notify the Borrower of the
amount on deposit in the Bond Fund and available for
that payment. If such amount is not sufficient to
make that payment, the Borrower promptly (and in any
event before the date of principal of, premium or
interest on the Bonds is payable) will pay to the
Trustee, in immediately available funds, the amount
of the deficiency. If such amount is in excess of its
amount necessary to make that payment, the amount of
the excess will be credited against the next
succeeding monthly payment(s) due from the Borrower.
(5) If the Borrower shall fail to pay any amount
under this Section 4.2(a), the amount so in default
shall continue as an obligation of the Borrower until
the amount so in default shall have been fully paid,
and the Borrower agrees to pay the same with interest
thereon until paid (to the extent legally
enforceable) at a rate equal to the rate borne by the
Bonds from time to time from the due date thereof
until paid.
(b) In addition to the payments required to be made by the
Borrower pursuant to Section 4.2(a) hereof, the Borrower agrees to pay
to the Tender Agent amounts sufficient and at such times as to enabled
the Tender Agent to pay the purchase price of any Bonds to be purchased
pursuant to Section 4.1 or Section 4.2 of the Indenture on each
purchase date of such Bonds as set forth in said Section 4.1 or Section
4.2, as the case may be. All such payments shall be made to the Tender
Agent in lawful money of the United States of America in federal or
other immediately available funds at the designated corporate trust
office of the Tender Agent. Each payment pursuant to this Section
4.2(b) shall at all times be sufficient to pay the purchase price of
any Bonds to be purchased on
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such date pursuant to Section 4.1 or Section 4.2 of the Indenture;
provided that remarketing proceeds held by the Tender Agent in the Bond
Purchase Fund on any such date and available to pay any such purchase
price pursuant to Section 6.11(b)(i) or 6.11(b)(ii) of the Indenture
shall be credited against the amount due on such date pursuant to this
Section 4.2(b) to the extent available to pay the purchase price of
such Bonds on such date. So long as a Credit Facility is in effect and
no wrongful dishonor has occurred and is continuing, the Borrower
agrees not to purchase, and not to permit any Insider of the Borrower
to purchase, any Bonds except with Available Moneys.
(c) The Borrower also agrees to pay when due, upon written
request, or to promptly reimburse the Issuer for (i) all costs incurred
by the Issuer in connection with the financing and administration of
the Project, except as may be paid out of the proceeds of the Bonds,
including without limitation, any necessary expenses incurred by
authorized officials of the Issuer while engaged in the performance of
their duties as such authorized officials of the Issuer, (ii) the
reasonable fees and expenses of counsel to the Issuer and Bond Counsel
and (iii) all publication, filing and recording fees. In the event the
Borrower should fail to make any of the payments required in this
Section 4.2(c), the item or installment so in default shall continue as
an obligation of the Borrower until the amount in default shall have
been fully paid, and the Borrower agrees to pay the same with interest
thereon to the extent permitted by law at the rate of interest borne by
the Bonds from the due date thereof until paid.
(d) The Borrower also agrees to pay to the Bond Registrar, the
Tender Agent and the Trustee (1) the initial acceptance fee of the
Trustee and the Tender Agent and the costs and expenses, including
reasonable attorney's fees, incurred by the Trustee in entering into
and executing the Indenture, and (2) during the term of this Agreement
(i) an amount equal to the annual fee of the trustee for the ordinary
services of the Trustee, as trustee, rendered and its ordinary expenses
incurred under the Indenture, including reasonable attorneys' fees, as
and when the same become due, (ii) the fees, charges and expenses of
the Trustee, the Bond Registrar and the Tender Agent, as and when the
same become due, and (iii) the fees, charges and expenses of the
Trustee for the necessary extraordinary services rendered by it and
extraordinary expenses incurred by it under the Indenture, including
reasonable attorneys' fees, as and when the same become due.
(e) The Borrower also agrees to pay all fees, charges and
expenses of the Remarketing Agent as they become due and payable
pursuant to Section 3 of the Remarketing Agreement.
Section 4.3 No Defense or Set-off, Unconditional Obligation.
The obligations of the Borrower to make the payments required in
Section 4.2(a) and (b) hereof shall be absolute and unconditional,
irrespective of any defense or any rights of setoff, recoupment or
counterclaim it might otherwise have against the Issuer, the Trustee,
the Tender Agent, the Paying Agent or the Bond Registrar. The Borrower
shall pay net during the term of this Agreement the payments to be made
under Section 4.2(a) and (b) hereof free of any deductions and without
abatement, diminution or set-off other than those herein expressly
provided. Until such time as the principal of, premium, if any, and
interest on the Bonds shall have been fully paid, or provision for the
payment thereof shall have been made in
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accordance with the Indenture, the Borrower: (i) will not suspend or
discontinue any payments provided for in Section 4.2(a) and (b) hereof;
(ii) will perform and observe all of its agreements contained in this
Agreement; and (iii) will not terminate this Agreement for any cause,
including, without limiting the generality of the foregoing, the
occurrence of any acts or circumstances that may constitute failure of
consideration, destruction of or damage to the Project, commercial
frustration of purpose, any change in the tax laws of the United States
of America or the State or an political subdivision thereof, or any
failure of the Issuer, the Trustee, the Tender Agent, the Paying Agent,
the Bond Registrar or the Bank to perform and observe any agreement,
whether express or implied, or any duty, liability or obligation
arising out of or connected with this Agreement, except to the extent
permitted by this Agreement.
Section 4.4 Assignment and Pledge of Issuer's Rights. As security for
the payment of its Bonds and, on a subordinate basis and after payment in full
of the Bonds, all Obligations, the Issuer will assign and pledge to the Trustee
all right, title and interest of the Issuer in and to this Agreement, including
the right to receive payments hereunder and thereunder (except the right to
receive payments, if any, under Sections 4.2(c), 5.3 and 6.3 hereof and the
rights to make determinations and receive notices as herein provided), and
hereby directs the Borrower to make said payments directly to the Trustee. The
Borrower herewith assents to such assignment and pledge and will make payments
directly to the Trustee without defense or set-off by reason of any dispute
between the Borrower and the Issuer, the Trustee, the Tender Agent, the Bond
Registrar, the Paying Agent or the Bank.
Section 4.5 No Third Party Beneficiary. It is specifically agreed
between the parties executing this Agreement that it is not intended by any of
the provisions of any part of this Agreement to establish in favor of the public
or any member thereof, other than as expressly provided herein or as
contemplated in this Agreement, the rights of a third party beneficiary
hereunder, or to authorize anyone not a party to this Agreement to maintain a
suit for personal injuries or property damage pursuant to the terms or
provisions of this Agreement. The duties, obligations and responsibilities of
the parties to this Agreement with respect to third parties shall remain as
imposed by law.
ARTICLE 5
SPECIAL COVENANTS AND AGREEMENTS
Section 5.1 Right of Access to the Project. The Borrower agrees that
during the term of this Agreement the Issuer, the Trustee, the Bank and their
duly authorized agents shall have the right during regular business hours, with
reasonable notice, to examine and inspect the Project. The Borrower agrees that
the Issuer, the Trustee, the Bank and their duly authorized agents shall have,
subject to such limitations, restrictions and requirements as the Borrower may
reasonably prescribe, such rights of access.
Section 5.2 Maintain its Existence: Conditions Under Which Executions
Permitted. The Borrower agrees that during the term of this Agreement it will
maintain its corporate existence, will not dissolve or otherwise dispose of all
or substantially all of its assets, and will not
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consolidate with or merge into another corporation or permit one or more
corporations to consolidate with or merge into it unless the Borrower is the
surviving, resulting or transferee corporation, as the case may be; provided,
that the Borrower may, without violating the agreements contained in this
Section 5.2, consolidate with or merge into another domestic corporation (i.e.,
a corporation incorporated and existing under the laws of the United States of
America or any state, district or territory thereof) or permit one or more other
domestic corporations to consolidate with or merge into it, or sell or otherwise
transfer to another domestic corporation all or substantially all of its assets
as an entirety and thereafter dissolve, provided, in the event the Borrower is
not the surviving, resulting or transferee corporation, as the case may be, that
the surviving, resulting or transferee corporation (i) is a domestic corporation
as aforesaid, (ii) is qualified to do business in the State, (iii) assumes in
writing all of the obligations of the Borrower under this Agreement, the Tax
Agreement and the Letter of Credit Agreement and (iv) has been approved in
writing by the Bank.
Section 5.3 Release and Indemnification Covenants.
(a) The Borrower agrees to indemnify and save the Issuer, its
directors officials, officers, employees and agents (each an
"indemnified party") harmless against and from all claims by or on
behalf of any person, firm or corporation arising from the conduct or
management of, or from any work or thing done on, the Project or
relating to the issuance of the Bonds, including but not limited to (i)
any condition of the Project, (ii) any breach or default on the part of
the Borrower in the performance of any of its obligations under this
Agreement, the Tax Agreement or the Indenture, (iii) any act of
negligence of the Borrower or of any of its agents, contractors,
servants, employees or licensees, (iv) any act of negligence of any
assignee or lessee of the Borrower, or of any agents, contractors,
servants, employees or licensees of any assignee or lessee of the
Borrower, (v) any violation by the Borrower of state or federal
securities laws in connection with the offer and sale of the Bonds or
any liability resulting from or related to the issuance or sale of the
Bonds, (vi) any performance by any indemnified party of any act
required under this Agreement, the Tax Agreement or the Indenture or
requested by the Borrower; excluding, however, claims occasioned by the
gross negligence or willful misconduct of the indemnified party, or
(vii) any loss or damage to property or any injury to or death of any
person occurring on or about or resulting from the Project or the
operation thereof. The Borrower agrees to indemnify and save each
indemnified party harmless from and against all costs and expenses
incurred in or in connection with any such claim arising as aforesaid
or in connection with any action or proceeding brought thereon. If any
such claim shall be made or action brought based upon any such claim in
respect of which indemnity may be sought against the Borrower, upon
receipt of notice promptly given to the Borrower in writing from the
indemnified party setting forth the particulars of such claim or
action, the Borrower shall assume the defense thereof including the
employment of counsel and the payment of all costs and expenses. Each
indemnified party shall have the right to employ separate counsel in
any such action and to participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such
indemnified party, unless (A) the employment of such counsel has been
specifically authorized in writing by the Borrower, or (B)
representation of both the indemnified party and the Borrower by the
same counsel is inappropriate by applicable standards of professional
conduct which attorneys maintain in the jurisdiction in which the suit
shall
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have been instituted due to actual or potential conflicting interests
(it being understood that the Borrower shall not be liable for the
expense of more than one separate counsel representing such indemnified
party unless representation by more than one counsel shall have been
specifically authorized in writing by the Borrower).
(b) The Borrower also agrees to pay and to indemnify and hold
harmless the Remarketing Agent, the Trustee, the Bank, the Tender
Agent, the Bond Registrar, any person who "controls" the Remarketing
Agent, the Bond Registrar, the Tender Agent, the Bank or the Trustee
within the meaning of Section 15 of the Securities Act of 1933, as
amended, and any member, officer, director, official and employee of
the Remarketing Agent, the Bond Registrar, the Tender Agent, the Bank
or the Trustee (collectively called the "Indemnified Parties") from and
against, any and all claims, damages, demands, expenses, liabilities
and losses of every kind, character and nature asserted by or on behalf
of any person arising out of, resulting from, or in any way connected
with, the condition, use, possession, conduct, management, planning,
design, acquisition, construction, installation, renovation or sale of
the Project or any part thereof. The Borrower also covenants and
agrees, at its expense, to pay, and to indemnify and save the
Indemnified Parties harmless of, from and against, all costs,
reasonable counsel fees, expenses and liabilities incurred in any
action or proceeding brought by reason of any such claim or demand
subject, however, to the provisions contained below in this paragraph
and excluding claims occasioned by the gross negligence or willful
misconduct of the Indemnified Parties. If any action or proceeding is
brought against any Indemnified Party by reason of any such claim or
demand, such Indemnified Party shall immediately notify the Borrower,
which shall resist and defend any action or proceeding on behalf of
such Indemnified Party, including the employment of counsel, the
payment of all expenses and the right to negotiate and consent to
settlement. Each Indemnified Party shall have the right to employ
separate counsel in any such action and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Parties unless the (A) employment of such
counsel has been specifically authorized in writing by the Borrower or
(B) representation of both the Indemnified Parties and the Borrower by
the same counsel is inappropriate by applicable standards of
professional conduct which attorneys maintain in the jurisdiction in
which the suit shall have been instituted due to actual or potential
conflicting interests (it being understood that the Borrower shall not
be liable for the expense of more than one separate counsel
representing any of the Indemnified Parties unless representation by
more than one counsel shall have been specifically authorized in
writing by the Borrower). If such separate counsel is employed, the
Borrower may join in any such suit for the protection of its own
interests. The Borrower shall not be liable for any settlement of any
such action effected without its consent, but if settled with the
consent of the Borrower or if there be a final judgment for the
plaintiff in any such action, the Borrower agrees to indemnify and hold
harmless the Indemnified Parties.
Section 5.4 Validity and Tax-empt Status of the Bonds. The Borrower and
the Issuer covenant and agree that they, and each of them, will not take or
authorize or permit any action to be taken and have not taken or authorized or
permitted any action to be taken which results in interest paid on the Bonds
being included in the gross income of any owner thereof for purposes of federal
income taxation (other than an owner who is a "substantial user" of the
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Project or a "related person" within the meaning of Section 147(a) of the Code
or adversely affects the validity of the Bonds. Promptly after the Borrower
first becomes aware of any Determination of Taxability, the Borrower shall give
written notice thereof to the Issuer, the Trustee, the Remarketing Agent and the
Bank.
Section 5.5 Taxes and Government Charges. The Borrower will promptly
pay, as the same become due, all lawful taxes, assessments, utility charges and
other governmental charges of any kind whatsoever levied or assessed by federal,
state or any municipal government upon or with respect to the Project or any
part thereof or any payments under this Agreement. The Borrower may, at its
expense and in its own name and behalf or in the name and behalf of the Issuer,
if it is a necessary party thereto, in good faith contest any such taxes,
assessments and other charges and, in the event of such contest, permit the
taxes, assessments or other charges so contested to remain unpaid during the
period of such contest and any appeal therefrom, provided that such non-payment
does not adversely affect the payment by the Borrower of all other amounts
required to be paid by it hereunder or adversely affect the validity of the
Bonds or the tax-exempt status of the interest thereon. All taxes, assessments
and other charges levied or imposed with respect to the Project shall be the
obligation of the Borrower, and the Issuer shall have no obligation or liability
in that regard.
Section 5.6 Maintenance and Repair; Insurance. (a) The Borrower will
maintain the Project in a reasonably safe and sound operating condition, making
from time to time all needed repairs thereto.
(b) The Borrower shall maintain the following insurance at its
sole cost and expense:
(i) Insurance in such amounts as the Bank shall
approve. which shall not be less than the principal amount of
the Bonds nor more than the full insurable value of the
Project, against loss and/or damage to the Project under a
policy or policies covering such risks as are ordinarily
insured against by companies owning similar manufacturing
facilities, including, without limiting the generality of the
foregoing, fire, earthquake, lightning, windstorm, hail,
explosion, riot, riot attending a strike, civil commotion,
damage from aircraft, smoke and uniform standard extended
coverage and vandalism and malicious mischief endorsements,
limited only as may be provided in the standard form of such
endorsements at the time in use in the State of Missouri.
(ii) Comprehensive general public liability insurance
including blanket contractual liability and personal injury
liability (with employee exclusion deleted) protecting the
Borrower against liability for injuries to persons and
property in such coverage amounts and with terms as are
normally carried by similar manufacturing companies, and
naming the Issuer, the Bank and the Trustee as additional
insureds, as their respective interests may appear.
(iii) Automobile insurance (excluding collision
insurance) including owned, non-owned and hired automobiles
protecting the Borrower against liability for injuries to
persons and property with limits as follows: for property
damage
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and for bodily injury, $500,000 for each occurrence and for
each year; with a deductible amount in each case of not more
than $50,000 for each occurrence and not more than $50,000 for
each year.
(iv) Use and occupancy (or business interruption)
insurance, covering interruption of the Borrower's operations
in whole or in part by reason of the total or partial
suspension of, or interruption in, the operation of the
Project, including its rental of buildings, caused by the
damage to or destruction of any part of the Project caused by
any of the perils described in paragraph (i), with such
exceptions as are customarily imposed by insurers, in an
amount sufficient to comply with the requirements of a
standard 50% gross earnings business interruption form. All
policies evidencing insurance required by this paragraph (iv)
shall be carried in the name of in the Borrower, and the names
of the Issuer, the Bank and the Trustee as their respective
interests may appear, provided that all losses thereunder as
to the Borrower shall provide for payment consistent with
Section 5.14 hereof. the net proceeds of such insurance shall
(if required by Section 5.14 hereof) be deposited in the Bond
Fund under the Indenture to the extent necessary to pay
interest on or principal of the Bonds, as the case may be, as
the same become due during the period of interruption of the
Borrower's operations. Such deposit shall be credited against
the Borrower's obligation to make such payments, and any
remaining balance shall be paid to the Borrower.
(v) Workers' compensation insurance respecting all
employees of the Borrower, in such amount as is customarily
carried by like organizations engaged in like activities of
comparable size and liability exposure.
All such policies of insurance set forth above shall be issued by
responsible insurance companies or associations (which companies or associations
may be affiliated with the Borrower) selected by the Borrower, permitted under
the laws of the State of Missouri to assume the risks covered thereby and who
shall have a minimum policy holders rating of "A" per the latest rating
publication of Property and Casualty Insurers by A.M. Best Company. Not fewer
than ten (10) days before the expiration of each policy required under this
Section 5.6, the Borrower shall deliver to the Bank certificates or other
evidence satisfactory to the Bank that such policy has been renewed or replaced
and the premium thereon has been paid.
Section 5.7 Financial Reports. The Trustee and the Issuer shall be
permitted during regular business hours, upon reasonable notice to the Borrower,
during the terms of this Agreement to examine the books and records of the
Borrower with respect to the Project.
The Borrower agrees that any such information furnished to the Trustee
in accordance with this Section 5.7 may be furnished by the Trustee to any
Bondholder who so requests.
Section 5.8 Letter of Credit.
(a) On or prior to the issuance, sale and delivery of the
Bonds to the Underwriter pursuant to Section 2.6 of the Indenture, the
Borrower hereby covenants and agrees to obtain and deliver to the
Trustee the initial , irrevocable, transferable, direct pay
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Letter of Credit to be issued by the Bank in favor of the Trustee for
the benefit of the owners from time to time of the Bonds in the form of
Annex I to the initial Letter of Credit Agreement. The initial Letter
of Credit shall be dated the Dated Date; shall expire on April 15, 1999
or earlier as described in the Letter of Credit, unless otherwise
extended in accordance with the terms and provisions of subsection (b)
below and the Letter of Credit Agreement, shall be in the amount of (i)
the aggregate principal amount of the Bonds (A) to enable the Trustee
to pay the principal of the Bonds at maturity, upon call for redemption
prior to maturity or acceleration, and (B) to enable the Trustee to pay
the portion of the purchase price of Bonds tendered or deemed to be
tendered to the Tender Agent for purchase, equal to the aggregate
principal amount of such Bonds plus (ii) an amount equal to the
interest to accrue on the Bonds for one hundred and thirteen (113) days
at a maximum rate of ten percent (10%) per annum calculated on the
basis of a year of 365 days (A) to enable the Trustee to pay interest
accrued on the Bonds on the dates and in the manner set forth in the
Indenture, and (B) to enable the Trustee to pay the portion of the
portion of the purchase price of Bonds tendered or deemed to be
tendered to the Tender Agent for purchase, equal to the accrued
interest on such Bonds plus (iii) an amount equal to three percent (3%)
of the aggregate principal amount of the Bonds to enable to Trustee to
pay the call premium if the Bonds are called for redemption pursuant to
Section 3.1(c) of the Indenture.
(b) Except as hereinafter provided, at any time during the
Variable Rate Period, the Borrower may, at its option (if provided by,
and in accordance with, the terms of the related Letter of Credit
Agreement) provide for the extension of the term of the Letter of
Credit then in effect, if any, deliver to the trustee a substitute
Letter of Credit as hereinafter provided or allow the Letter of Credit
then in effect to expire or terminate in accordance with its terms. The
term "substitute Letter of Credit" as used herein shall mean any Letter
of Credit delivered in accordance with the terms hereof, other than (1)
the initial Letter of Credit delivered on the date of the initial
delivery of the Bonds and any (2) extensions of, or new Letters of
Credit issued by the issuer of, the Letter of Credit then in effect. If
the Borrower chooses to provide for the extension of the term of the
Letter of Credit then in effect, such extension shall be for a period
of at least one (1) year after the Stated Termination Date of the
existing Letter of Credit and shall provide that it is to expire
fifteen (15) days after a Variable Rate Interest Payment Date, and the
Borrower shall furnish proof of such extension or a replacement Letter
of Credit with terms identical to the existing Letter of Credit (except
for the Stated Termination Date), in the form of an amendment to the
Letter of Credit or a replacement Letter of Credit or a notice form the
Bank of such extension, as provided in the Letter of Credit, evidencing
such extension, to the Trustee no later than forty-five (45) days prior
to the Stated Termination Date of the Letter of Credit. If the Borrower
chooses to provide a substitute Letter of Credit to replace a Letter of
Credit scheduled to terminate, to replace an existing Letter of Credit
at any time while a Letter of Credit is in effect or at any time while
no Letter of Credit is in effect, such substitute Letter of Credit
shall be an irrevocable letter of credit in substantially the same form
and tenor as the initial Letter of Credit in an amount equal to the
outstanding principal amount of the Bonds plus an amount equal to the
maximum interest to accrue on the Bonds then Outstanding for one
hundred and thirteen (113) days at a maximum rate of ten percent (10%)
per annum calculated on the basis of a year of 365 days, plus an amount
equal to three percent (3%) of the outstanding
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principal amount of the Bonds with administrative provisions reasonably
satisfactory to the Trustee, but provided to expire at least one (1)
year after the Stated Termination Date of the existing Letter of Credit
(or, if no Letter of Credit is then in effect, having a term of at
least one (1) year), providing that it is to expire fifteen (15) days
after a Variable Rate Interest Payment Date, and to be issued by a
commercial bank and delivered to the Trustee at least two (2) Business
Days before the Stated Termination Date of the Letter of Credit, if
any, then in effect to the Trustee. Simultaneously with the delivery of
such substitute Letter of Credit to the Trustee, the Borrower shall
also provide the Trustee with (i) if such substitute Letter of Credit
is issued by a bank other than a domestic commercial bank, an opinion
or opinions of Counsel acceptable to the Trustee that no registration
of the Bonds or such substitute Letter of Credit is required under the
Securities Act of 1933, as amended, nor is the Indenture required to be
qualified under the Trust Indenture Act of 1939, as amended, (ii) an
opinion of Counsel satisfactory to the Trustee to the effect that such
substitute Letter of Credit is a valid and enforceable obligation of
the issuer or provider thereof, and (iii) an opinion of Bond Counsel
that such substitute Letter of Credit is authorized under this
Agreement, complies with the terms hereof and that the provision
thereof will not have an adverse effect on the exclusion of the
interest on the Bonds from the gross income of the owners thereof for
federal income tax purposes. If the Borrower shall fail to furnish to
the Trustee such opinions described above on or before the specified
date, the Trustee shall be deemed not to have received the substitute
Letter of Credit. Upon delivery of a substitute Letter of Credit and
the foregoing opinions, the Trustee is authorized and directed to
surrender the existing Letter of Credit, if any, then in effect and to
approve the cancellation of the existing Letter of Credit (by, inter
alia, completing and delivering to the Bank any appropriate certificate
to the Letter of Credit). The Bonds shall be subject to mandatory
tender for purchase pursuant to Section 4.2 of the Indenture upon the
expiration or termination of the Letter of Credit unless such Letter of
Credit is extended. The Borrower hereby covenants and agrees to give
the Issuer, the Trustee, the Bank and the Remarketing Agent written
notice of its intention to delivery any substitute Letter of Credit or
to terminate a Letter of Credit or of the expiration of a Letter of
Credit at least forty-five (45) days prior to the date on which the
Borrower expects to deliver such substitute Letter of Credit or on
which such termination or expiration is to occur.
(c) If the Borrower elects to exercise its option to cause the
interest rate on the Bonds to be converted to the Fixed Rate in
accordance with the provisions of Section 5.9 hereof, the Bonds shall
not be secured by a Credit Facility during the Fixed Rate Period, but
the Bonds must be rated at least investment grade by any Rating Agency
on and after the Conversion Date.
Section 5.9 Option to Convert to Fixed Rate. The Borrower shall have,
and is hereby granted, the option to elect to convert the interest rate borne by
the Bonds to the Fixed Rate, pursuant to the provisions of Section 2.2 of the
Indenture, subject to the terms and conditions set forth therein. At the time
of, and as a condition to, the giving of the notice by the Borrower of the
exercise of its option to convert the interest rate borne by the Bonds to the
Fixed Rate, the Borrower shall deliver to the Issuer and the Trustee a letter
from a Rating Agency stating that the Bonds will be rated at least investment
grade by such Rating Agency on and after the Proposed Conversion Date.
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Section 5.10 Operation of Project. Although the Borrower intends to
operate, or cause to be operated, the Project for its designed purposes until
the date on which no Bonds are outstanding, the Borrower is not required by this
Agreement to operate, or cause to be operated, any portion of the Project after
the Borrower shall deem in its discretion that such continued operation is not
advisable, and in such event it is not prohibited by this Agreement from
selling, leasing or retiring all or any such portion of the Project. Unless
otherwise approved by the Bank in writing, the net proceeds from such sale,
lease or other disposition shall be deposited in the Bond Fund and used to
redeem or otherwise retire Bonds on the earliest date practicable after such
deposit. No such sale, lease or other disposition of all or any portion of the
Project shall reduce or otherwise affect the Borrower's obligation to pay
amounts under Section 4.2 hereof.
The Borrower shall, within thirty (30) days after the delivery thereof,
furnish or cause to be furnished to the Issuer and to the Trustee a true and
complete copy of any deed, lease or other instrument, as the case may be,
conveying any interest in the Project. The Borrower understands that in
connection with any such cessation of operation of the Project, that it may be
required to redeem the Bonds in accordance with Section 3.1(f) of the Indenture
and Section 7.1(d) hereof.
Section 5.11 Qualification in State. The Borrower agrees that
throughout the term of this Agreement it will be qualified to do business in the
State.
Section 5.12 Compliance with Orders, Ordinances, Etc. The Borrower
agrees that it will use its best efforts promptly to comply with all statutes,
codes, laws, acts, ordinances, orders, judgments, decrees, injunctions, rules,
regulations, permits, licenses, authorizations, directions and requirements of
all federal, state, county, municipal and other governmental authorities,
foreseen or unforeseen, ordinary or extraordinary, which now or at any time
hereafter may be applicable to the Project or any part thereof, or to any use,
manner of use or condition of the Project or any part thereof.
Section 5.13 No Warranty by Issuer. The Issuer makes no warranty,
either express or implied, as to the Project of that it will be suitable for the
purposes or needs of the Borrower.
Section 5.14 Insurance and Condemnation Awards.
(a) In the event of damage to, or destruction of, the Project
or any portion thereof resulting from fire or other casualty, the
Borrower promptly will notify the Bank, and, if the net proceeds of any
insurance relating to such damage are not more than fifteen percent
(15%) of the buildings and improvements now or hereafter located on the
Project Site (as determined by a duly licensed, reputable and third
party insurance adjuster aat the time of such damage or destruction),
the Borrower will forthwith replace, repair, reconstruct and restore
the Project, as applicable, to substantially the same or an improved
condition or utility value as existed prior to the event causing such
damage and will to the extent necessary apply the net proceeds of any
insurance relating to such damage received by the Borrower to the
payment or reimbursement of the costs of such replacement, repair,
reconstruction and restoration.
In the event the Project or any portion thereof is destroyed
by fire or other casualty and the damage or destruction is estimated to
exceed fifteen percent (15%) of the
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original cost of constructing the Project, the Borrower agrees promptly to
notify the Bank and the Trustee of such event, and the Borrower shall, within 90
days after such damage or destruction, elect, in accordance with the written
direction of the Bank, one of the following two options by written notice of
such election to the Trustee.
(i) Option A-Repair and Restoration. The Borrower may
elect to use all or part of such net proceeds to replace,
repair, reconstruct and restore the damaged Project. In such
event the Borrower shall proceed forthwith to replace, repair,
reconstruct and restore the damaged Project to substantially
the same condition or utility value as existed prior to the
event causing such damage or destruction and will apply the
net proceeds of any insurance relating to such damage or
destruction received by the Borrower to the payment or
reimbursement of the costs of such replacement, repair,
reconstruction and restoration.
It is further understood and agreed that in the event
the Borrower shall elect this Option A or is unable to obtain
the opinion required by Option B below, the Borrower shall
complete the replacement, repair, reconstruction and
restoration of the Project, as applicable, whether or not the
net proceeds of insurance received by the Borrower for such
purposes are sufficient to pay for the same.
The Borrower agrees to apply such net proceeds so
received solely to the purposes specified in such notice of
election.
(ii) Option B-Prepayment of Bonds. The Borrower may
elect to have all or part of such net proceeds payable as a
result of such damage or destruction applied to the prepayment
of the Bonds; provided that the Borrower supplies the Trustee
with an opinion of an architect or an engineer stating that
the property destroyed was not essential to the use of the
Project, and that the revenues of the Borrower will not be
materially adversely affected by such destruction; provided,
however, no such opinion shall be required if all Bonds
Outstanding are to be redeemed and paid. In such event the
Borrower shall, in its notice of election to the Trustee,
direct the Trustee to deposit such net proceeds or a specified
portion thereof, when and as received, in the Bond Fund. If
only part of such net proceeds is applied to the prepayment of
the bonds, then the remaining part of such net proceeds shall
be applied as provided under Option A above.
(b) The lien of this Agreement shall terminate as to the
Project or any portion thereof condemned or taken for any public or
quasi-public use when title thereto vests in the party condemning or
taking the same (hereinafter referred to as the "condemnation date").
In the event such award or insurance proceeds exceed fifteen
percent (15%) of the original cost of constructing the Project, the
Borrower shall within 90 days after the termination date or the date on
which such insurance proceeds are determined, whichever is later,
elect, subject to the written approval of the Trustee and the Bank,
which approval shall not be unreasonably withheld, one of the following
two options by written notice of such election to Trustee:
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(i) Option A-Repairs and Improvements. The Borrower
may elect to use all or part of the net proceeds of the award
made in connection with such condemnation or taking or of such
insurance for replacement of or repairs and improvements to
the Project, as applicable.
The Borrower agrees to apply any such net proceeds so
received solely to the purposes specified in such notice of election.
(ii) Option B-Prepayment of Bonds. The Borrower may
elect to have all or part of such net proceeds payable as a
result of such condemnation or taking or of such insurance
applied to the prepayment of the Bonds; provided that the
Borrower supplies the Trustee with an opinion of an architect
or an engineer stating that the property condemned or the
property interest lost because of the title defect which
resulted in the realization on such insurance, as the case may
be, was not essential to the use of the Project, and that the
Borrower's revenues will not be materially adversely affected
by such condemnation or taking or title defect; provided,
however, no such opinion shall be required if all Bonds
Outstanding are to be redeemed and paid. IN such event the
Borrower shall, in its notice of election to the Trustee,
direct the Trustee to deposit such net proceeds, or part
thereof, when and as received, in the Bond Fund. If only part
of such net proceeds is applied to the prepayment of the
Bonds, then the remaining part of such net proceeds shall be
applied as provided under Option A above.
The Issuer and the Trustee, at the Borrower's sole expense,
shall cooperate with the Borrower in the handling and conduct of any
prospective or pending condemnation proceedings with respect to the
Project or any part of either.
Section 5.15 Governmental Approvals. The Borrower covenants that it
will obtain or cause to be obtained all necessary approvals from any and all
governmental agencies requisite to the construction and acquisition of the
Project, and that the Project will be constructed and acquired in compliance
with all federal, State and local laws and ordinances and regulations applicable
thereto. The Borrower will obtain or cause to be obtained all required occupancy
permits and licenses from appropriate authorities authorizing the construction,
occupancy and use of the Project for the purposes contemplated by the Borrower.
Borrower will furnish the Bank with a copy of all such permits, licenses,
authorization and other governmental approvals promptly after it receives them.
Section 5.16 Continuing Disclosure.
(a) The Borrower intends that the Bonds will be offered and
sold in a primary offering that is exempt from the requirements of Rule
15c2-12 by reason of the exemption provided in subparagraph (d)(1)
thereof. If interest on the Bonds is converted to a fixed rate, or if,
for any other reason, an exemption from the requirements of Rule
15c2-12 is not available, the Borrower, for the benefit of the
Bondholders, hereby covenants and agrees to provide the information, at
the times and to the information repositories and depositories as
described in subsection (b) and (c) below.
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(b) Within 120 days after the close of each fiscal year
beginning with the fiscal year ending December 31, 1996, the Borrower
will furnish to each NRMSIR and each SID, if any, a copy of the
financial statements of the Borrower prepared in accordance with
generally accepted accounting principles by its independent auditors
(or if not available as of that date, the unaudited financial
statements of the Borrower with the audited financial statements to
follow as soon as practicable after they become available.
Any financial statements required by this paragraph (b) may be
incorporated by cross reference to other documents, including official
statements of debt issues of the Borrower that have been filed with
each NRMSIR or the Securities and Exchange commission, and, in the case
of a final official statement, that is available from the MSRB. The
Borrower shall identify clearly each document provided by cross
reference and the source from which it is available.
(c) The Borrower shall send to each NRMSIR or to the MSRB, and
to each SID, if any, promptly upon the occurrence thereof notice of nay
of the following events with respect to the Bonds, if material:
1. Principal or interest payment delinquencies;
2. Non-payment related defaults;
3. Unscheduled draws on the debt service
reserves reflecting financial difficulties;
4. Unscheduled draws on credit enhancements
reflecting financial difficulty;
5. Substitution of credit or liquidity
providers or their failure to perform;
6. Adverse tax opinions or events affecting the
tax exempt status of the Bonds;
7. Modifications of rights of security holders;
8. Bond calls;
9. Defeasances;
10. Release, substitution, or sale of property
securing repayment of the Bonds;
11. Changes in the ratings of the Bonds.
In addition, the Borrower will also provide the SID, if any,
and each NRMSIR or the MSRB, as promptly as practicable, notice of any
failure of the Borrower to provide the NRMSIR's and the SID, if any,
the annual financial statements required by subparagraph (b) above on
or before the date specified.
(d) The Borrower's obligations under this Section 5.16 shall
terminate upon the payment in full (including the defeasance)
of the Bonds either at maturity or upon redemption prior to
maturity.
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ARTICLE 6
EVENTS OF DEFAULT AND REMEDIES
Section 6.1 Events of Default. The occurrence and continuation of any
one of the following shall constitute an Event of Event of Default hereunder:
(a) failure by the Borrower to pay any amount required to be
paid under Section 4.2(a) hereof in the manner specified herein,
provided, any failure to make any monthly payment required by Section
4.2(a) shall not be a default if the Borrower shall pay and cause to be
on deposit in the Bond Fund the amounts required to be on deposit
therein on the first day of January, April, July and October of each
year during the term of this Agreement; or
(b) failure by the Borrower to pay any amounts required to be
paid under Section 4.2(b) hereof on the dates and in the manner
specified herein; or
(c) failure by the Borrower to perform any covenant, condition
or agreement on its part to be observed or performed in this Agreement,
other than as referred to in subsections (a) and (b) above, for a
period of thirty (30) days after written notice, specifying such
failure and requesting that it be remedied, is given to the Borrower by
the Issuer, the Bank or the Trustee, unless (i) the Issuer, the Bank
and the Trustee shall agree in writing to an extension of such time
prior to its expiration or (ii) if the failure is such that it can be
corrected but not within such 30- day period, corrective action is
instituted by the Borrower within such period and diligently pursued
until such failure is corrected; or
(d) the dissolution or liquidation of the Borrower or the
filing by the Borrower of a voluntary petition in bankruptcy, or
failure by the Borrower promptly to lift any execution, garnishment or
attachment of such consequence as will impair its ability to carry on
its obligations hereunder, or an order for relief under Title 11 of the
United States Code, as amended from time to time, is entered against
the Borrower, or a petition or answer proposing the entry of an order
for relief against the Borrower under Title 11 of the United States
Code, as amended from time to time, or its reorganization, arrangement
or debt readjustment under any present or future federal bankruptcy act
or any similar federal or state law shall be filed in any court and
such petition or answer shall not be discharged within ninety (90) days
after the filing thereof, or the Borrower shall fail generally to pay
its debts as they become due, or a custodian (including without
limitation a receiver, trustee, assignee for the benefit of creditors
or liquidator of the Borrower) shall be appointed for or take
possession of all or a substantial part of its property and shall not
be discharged within ninety (90) days after such appointment or taking
possession, or the Borrower shall consent to or acquiesce in such
appointment or taking possession, or assignment by the Borrower for the
benefit of its creditors, or the entry by the Borrower into an
agreement of composition with its creditors, or the adoption of a
resolution by the board of directors of the Borrower or the taking of
any other corporate action to file a petition or answer proposing the
entry of an order for relief against the Borrower under Title 11 of the
United States Code, as amended from time to time, or its
reorganization, arrangement or debt readjustment under any present or
future federal bankruptcy act or any similar or state laws; provided,
that the term
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"dissolution or liquidation of the Borrower", as used in this
subsection (d), shall not be construed to include the cessation of the
corporate existence of the Borrower resulting either from a merger or
consolidation of the Borrower into or with another domestic corporation
or a dissolution or liquidation of the Borrower following a transfer of
all or substantially all of its assets as an entirety, under the
conditions permitting such actions contained in Section 5.2 hereof; or
(e) any material warranty, representation or other statement
made by or on behalf of the Borrower contained herein, or in any
document or certificate furnished by the Borrower in compliance with or
in reference hereto, is false or misleading in any material respect; or
(f) an "event of default" shall occur and be continuing under
the Indenture.
The foregoing provisions of subsection (c) of this Section are subject
to the limitations that if by reason of Force Majeure the Borrower is unable in
whole or in part to perform or observe its agreements under this Loan agreement
other than its obligation to make payments required hereunder, the Borrower
shall not be deemed in default during the continuance of such inability,
including a reasonable time for the removal of the effect thereof.
The term "Force Majeure" shall mean, without limitation, the following:
(a) acts of God; strikes, lockouts or other industrial
disturbances; acts of public enemies; orders or restraints of any kind
of the government of the United States or of the State or any of their
departments, agencies, political subdivisions or officials, or any
civil or military authority; insurrections; civil disturbances; riots;
epidemics; landslides; lightning; earthquakes; fires; hurricanes;
storms; droughts; floods; arrests; restraint of government and people;
explosions; breakage, malfunction or accident to facilities, machinery,
transmission pipes or canals; partial or entire failure of utilities;
shortages of labor, materials, supplies or transportation; or
(b) any cause, circumstance or event not reasonably within the
control of the Borrower.
The Borrower will use its best efforts to remedy with all reasonable
dispatch the Force Majeure preventing the Borrower from performing or observing
its agreements under this Loan Agreement; provided, that the settlement of
strikes, lockouts and other industrial disturbances shall be entirely within the
discretion of the Borrower, and the Borrower shall not be required to make
settlement of strikes, lockouts and other industrial disturbances by acceding to
the demands of the opposing party or parties.
Section 6.2 Remedies on Default. Whenever any Event of Default shall
have occurred and be continuing hereunder, the Trustee may take any one or more
of the following remedial steps:
(a) The Trustee may exercise any right, power or remedy
permitted to it by law, and shall have in particular, without limiting
the generality of the foregoing, the right
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to declare the entire principal payable under Section 4.2(a) hereof,
and all unpaid interest accrued thereon to the date of such declaration
and any premium the Borrower shall have become obligated to pay to be
immediately due and payable, if, concurrently with or prior to such
notice, the unpaid principal of and all unpaid accrued interest and
premium on the Bonds have become or have been declared to be due and
payable under the Indenture, and upon such acceleration the principal
payable under Section 4.2(a) hereof, the unpaid accrued interest
thereon and such premium shall thereupon become forthwith due and
payable in an amount sufficient to pay the principal of, premium, if
any, and interest on the Bonds under Section 9.2 of the Indenture,
without presentment, demand or protest, all of which are hereby
expressly waived. The Borrower shall forthwith pay to the Trustee the
entire principal, premium, if any, and interest payable under Section
4.2(a) hereof. The Trustee shall waive, rescind and annul such
declaration and the consequences thereof, when any declaration of
acceleration on the Bonds has been waived, rescinded and annulled
pursuant to and in accordance with Section 9.11 of the Indenture.
(b) The Issuer or the Trustee may take whatever action at law
or in equity may appear necessary or desirable to collect the payments
and other amounts then due and thereafter to become due or to enforce
the performance and observance of any obligation, agreement or covenant
of the Borrower under this Agreement.
(c) Neither the Issuer nor the Trustee may exercise any remedy
without the Bank's prior written consent, so long as no wrongful
dishonor of the Credit Facility has occurred and is continuing, except
that the Bank may not direct the Trustee's actions hereunder in
connection with an event of default under Section 9.1(d), (e) or (g) of
the Indenture (to the extent that the event of default under Section
9.1(g) results from an Event of Default under Section 6.1(g) hereof) as
provided in Section 9.13 of the Indenture.
In case the Issuer or the Trustee shall have proceeded to enforce its
rights under this Agreement, and such proceedings shall have been discontinued
or abandoned for any reason or shall have been determined adversely to the
Issuer or the Trustee, as the case may be, then and in every such case the
Borrower, the Issuer and the Trustee shall be restored respectively to their
several positions and rights hereunder, and all rights, remedies and powers of
the Borrower, the Issuer and the Trustee shall continue as though no such
proceeding had been taken.
In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Borrower under the federal bankruptcy laws or any
other applicable law, or in case a receiver or trustee shall have been appointed
for the property of the Borrower, or in the case of any other similar judicial
proceedings relative to the Borrower, or to the creditors or property of the
Borrower, the Trustee shall be entitled and empowered, by intervention in such
proceedings or otherwise, to file and prove a claim or claims for the whole
amount owing and unpaid pursuant to this Agreement and, in case of any judicial
proceedings, to file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee allowed in
such judicial proceedings relative to the Borrower, its creditors or its
property, and to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute the same after the deduction
of its charges and expenses; and any receiver, assignee or trustee in bankruptcy
or reorganization is hereby authorized to make such
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payments to the Trustee, and to pay to the Trustee any amount due it for
compensation and expenses, including reasonable counsel fees incurred by it up
to the date of such distribution. When the Trustee incurs expenses or renders
services after the occurrence of an Event of Default described in Section 6.1
hereof, the expenses and compensation for services are intended to constitute
expenses of administration under any bankruptcy law.
Section 6.3 Agreement to Pay Attorneys' Fees and Expenses. In the event
the Issuer or the Trustee should reasonably employ attorneys or incur other
expenses for the collection of the payments due under this Agreement or the
enforcement of the performance or observance of any obligation or agreement on
the part of the Borrower herein contained, the Borrower agrees that it will on
demand therefor pay to the Issuer or the Trustee the reasonable fees of such
attorneys and such other expenses so incurred by the Issuer or the Trustee.
Section 6.4 No Remedy Exclusive. No remedy herein conferred upon or
reserved to the Issuer or the Trustee is intended to be exclusive of any other
available remedy or remedies but each and every such remedy shall be cumulative
and shall be in addition to every other remedy given under this Agreement and
the Indenture or now or hereafter existing at law or in equity or by statute. No
delay or omission to exercise any right or power accruing upon any Event of
Default hereunder shall impair any such right or power or shall be construed to
be a waiver thereof, but any such right and power may be exercised from time to
time and as often as may be deemed expedient. In order to entitle the Issuer to
exercise any remedy reserved to it in this Article VI, it shall not be necessary
to give any notice other than such notice as may be herein expressly required.
Such rights and remedies as are given the Issuer hereunder shall also extend to
the Trustee and the Bank, and the Trustee, the Bank and the owners from time to
time of the Bonds shall be deemed third party beneficiaries of all covenants and
agreements herein contained.
Section 6.5 No Waiver Implied. In the event any agreement contained in
this Loan Agreement should be breached by either party and thereafter waived by
the other party, such waiver shall be limited to the particular breach so waived
and shall not be deemed to waive any other breach hereunder. No failure by the
Trustee or the Issuer to insist upon the strict performance of any term hereof
or to exercise any right, power or remedy consequent upon a breach hereof, shall
constitute a waiver of any such term or of any such breach. No waiver of any
breach shall affect or alter this Loan Agreement, which shall continue in full
force and effect with respect to any other then existing or subsequent breach.
Section 6.6 Notice of Default. The Borrower shall notify the Trustee
and the Bank immediately if it becomes aware of the occurrence of any Event of
Default hereunder or of any fact, condition or event which, with the giving of
notice or passage of time or both, would become an Event of Default.
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ARTICLE 7
PREPAYMENT
Section 71. Obligation to Prepay.
(a) Upon the occurrence of a Determination of Taxability the
Borrower shall have, and hereby accepts, the obligation to prepay the
principal payable under Section 4.2(a) hereof as a whole, or in part,
on any date within ninety (90) days of the occurrence of a
Determination of Taxability, for redemption of the Bonds pursuant to
Section 3.1(c) of the Indenture. The amount to be prepaid pursuant to
this Section 7.1(a) in such event shall be 100% of the principal amount
of the Bonds to be redeemed pursuant to Section 3.1(c) of the Indenture
plus accrued interest to the date fixed for redemption.
(b) Upon the occurrence of an Event of Taxability, the
Borrower shall have, and hereby accepts, the obligation to prepay the
principal payable under Section 4.2(a) hereof as a whole, or in part,
on any date within ninety (90) days of the date of the occurrence of an
Event of Taxability, for redemption of the Bonds pursuant to Section
3.1(d) of the Indenture. The amount to be prepaid pursuant to this
Section 7.1(b) in such event shall be 100% of the principal amount of
the Bonds to be redeemed pursuant to Section 3.1(d) of the Indenture
plus accrued interest to the date fixed for redemption.
(c) If proceeds of the Bonds, including income from the
investment thereof, shall remain unspent after the completion of the
Project and the payment of all costs of the Project, the Borrower shall
have, and hereby accepts, the obligations to prepay the principal
payable under Section 4.2(a) hereof, in whole or in part, within one
hundred eighty (180) days following the filing of a completion
certificate in accordance with Section 3.4 hereof, for redemption of
the Bonds pursuant to Section 3.1(e) of the Indenture. The amount to be
prepaid pursuant to this Section 7.1(c) in such event shall be 100% of
the principal amount of the Bonds to be redeemed plus accrued interest
to the date fixed for redemption.
(d) If the Borrower ceases operation of the Project and the
Project is not thereafter operated as a "project" within the meaning of
the Act by an affiliate of the Borrower or by a purchaser or lessee of
the Projects and the Issuer, by resolution duly adopted by its
governing body, requests the Borrower to cause the Bonds to be
redeemed, the Borrower shall have, and hereby accepts, the obligation
to prepay the principal payable under Section 4.2(a) hereof, in whole
and not in part, within one hundred eighty (180) days after receipt by
the Borrower of certified copies of such resolutions, for redemption of
the Bonds pursuant to Section 3.1(f) of the Indenture. The amount to be
prepaid pursuant to this Section 7.1(d) in such event shall be 100% of
the principal amount of the Bonds plus accrued interest to the date
fixed for redemption.
(e) The Borrower shall have, and hereby accepts, the
obligation to prepay the principal payable under Section 4.2(a) hereof
prior to each Mandatory Redemption Date for the mandatory sinking fund
redemption of the Bonds pursuant to Section 3.1(g) of the Indenture.
The amount to be prepaid pursuant to this Section 7.1(e) in such event
shall be 100% of the principal amount of the Bonds to be redeemed
pursuant to Section 3.1(g) of the Indenture plus accrued interest to
the date fixed for redemption.
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(f) So long as a Credit Facility is in effect, and to the
extent that Available Moneys described in clauses (a), (b) and (c) of
Section 6.4 of the Indenture are not on deposit in the Bond Fund and
available to repay the principal of and accrued interest payable under
this Section 7.1, the Trustee shall, in accordance with Section 6.4 of
the Indenture, take such actions as are necessary to realize moneys
under such Credit Facility to prepay the principal of and accrued
interest payable under this Section 7.1 in accordance with the terms of
such Credit Facility.
Section 7.2 Option to Prepay. The Borrower shall have, and is hereby
granted, the option (with consent of the Bank) to prepay the principal payable
under Section 4.2(a) hereof with respect to the Bonds as a whole, or in part, by
paying to the Trustee an amount sufficient to redeem all or a portion of the
Bonds then Outstanding, in the manner, at the redemption prices (including
premium, if any), from the sources and on the dates specified in Section 3.1(a)
and 3.1(b) of the Indenture. So long as a Credit Facility is in effect, and to
the extent that Available Moneys described in clauses (a), (b) and (c) of
Section 6.4 of the Indenture are not on deposit in the Bond Fund and available
to prepay the principal of an accrued interest payable under this Section 7.2,
the Trustee shall, in accordance with Section 6.4 of the Indenture, take such
actions as are necessary to realize moneys under such Credit Facility to prepay
the principal of and accrued interest payable under this Section 7.2 in
accordance with the terms of such Credit Facility.
Section 7.3 Redemption of the Bonds. To perform an obligation imposed
upon the Borrower or to exercise an option granted to the Borrower by this
Article VII, the Borrower shall give written notice to the Issuer, the Trustee,
the Bank and the Bond Registrar, which notice shall specify therein the date
upon which prepayment of the principal payable under Section 4.2(a) hereof (or a
portion thereof) will be made, which date shall be not less than forty-five (45)
days from the date the notice is mailed, and shall specify that all of the
principal amount payable under Section 4.2(a) hereof or a specified portion
thereof is to be so prepaid. The Issuer has directed the Trustee and the Bond
Registrar to take forthwith all steps (other than they payment of the money
required to redeem the Bonds) necessary under the applicable provisions of the
Indenture to effect the redemption of the Bonds (or a portion thereof) in
amounts equal to the amount of the principal so prepaid as provided in this
Article VII.
ARTICLE 8
MISCELLANEOUS
Section 8.1 Notices. All notices or other communications hereunder
shall be sufficiently given and shall be deemed given when delivered or mailed
as provided in the Indenture.
Section 8.2 Assignment By Borrower. Except as otherwise permitted in
this Loan Agreement, the Borrower may not assign its rights and obligations
under this Loan Agreement without the consent of the Issuer, the Trustee, and
the Bank, and no assignment will relieve the Borrower from primary liability for
any obligations under this Loan Agreement.
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Section 8.3 Severability. If any provision of this Loan Agreement shall
be determined to be unenforceable at any time, that shall not affect any other
provision of this Loan Agreement or the enforceability of that provision at any
other time.
Section 8.4 Execution of Counterparts. This Loan Agreement may be
executed in several counterparts, each of which will be an original, and all of
them together shall constitute one and the same instrument.
Section 8.5 Amounts Remaining in any Fund or With Trustee. If, after
full payment of the Bonds and all fees and expenses of the Trustee with moneys
paid to or for the account of the Issuer by the Borrower hereunder, any moneys
then remain in any fund created under the Indenture (other than the Rebate
Fund), the Issuer hereby assigns to the Borrower the amount of any such moneys
and will cause the Trustee to pay such moneys to the Borrower; provided, that
the Trustee first shall request a written statement from the Bank as to whether
or not the Bank has been reimbursed by the Borrower for any and all amounts
owing in respect of such Credit Facility and for all other Obligations under the
Letter of Credit Agreement. The amounts remaining in the Bond Fund or the Bond
Purchase Fund shall, upon written notice form the Bank that the Borrower has not
reimbursed the Bank under the Letter of Credit Agreement for any such payment
under the Credit Facility or any such Obligations (which notice shall state the
unreimbursed amount of such Obligations), belong to and be paid to the Bank by
the Trustee to the extent that the Borrower has not so reimbursed the Bank.
Section 8.6 Amendments, Changes and Modifications. Except as otherwise
provided in this Agreement or the Indenture, subsequent to the initial issuance
of the Bonds and prior to their payment in full, this Agreement may not be
effectively amended, changed, modified, altered or terminated without the
written consent of the Trustee, or while a Credit Facility is in effect or any
Obligations are owing to the Bank.
Section 8.7 Governing Law. This Agreement shall be governed exclusively
by and construed in accordance with the applicable law of the State.
Section 8.8 Authorized Borrower Representative. Whenever under the
provisions of this Agreement the approval of the Borrower is required or the
Borrower is required to take some action at the request of the Issuer, the
Trustee, the Tender Agent, the Bond Registrar, the Bank or the Remarketing
Agent, such approval or such request shall be given for the Borrower by the
Authorized Borrower Representative, and the Issuer, the Trustee, the Tender
Agent, the Bond Registrar, the Bank and the Remarketing Agent shall be
authorized to act on any such approval or request and neither party hereto shall
have any complaint against the other or against the Trustee, the Tender Agent,
the Bond Registrar, the Bank or the Remarketing Agent as a result of any such
action taken.
Section 8.9 Term of this Agreement. This Agreement shall be in full
force and effect from the date hereof, and shall continue in effect until the
payment in full of all principal of, and premium, if any, and interest on the
Bonds, or provision for the payment thereof shall have been made pursuant to
Article VIII of the Indenture, all fees, charges, indemnities and expenses of
the Issuer, the Trustee, the Tender Agent, the Bond Registrar and the
Remarketing Agent have been
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fully paid or provision made for such payment (the payment of which fees,
charges, indemnities and expenses shall be evidenced by a written certification
of the Borrower that it has fully paid all such fees, charges, indemnities and
expenses) and all other amounts due hereunder have been duly paid or provision
made for such payment. All representations, certifications and covenants by the
Borrower as to the indemnification of various parties as described in Section
5.3 hereof, the payment of fees and expenses of the Issuer and the Trustee as
described in Section 6.3 hereof, and all matters affecting the tax-exempt status
of the Bonds shall survive the termination of this Agreement.
Section 8.10 Binding Effect. This Agreement shall inure to the benefit
of and shall be binding upon the Issuer, the Borrower, the Bank and their
respective successors and assigns, subject, however, to the limitations
contained in Sections 4.4 and 5.2 hereof.
Section 8.11 Limited Liability of Officers, Etc. (a) No recourse shall
be had for the payment of the principal of, premium, if any, and interest on the
Bonds or for any claim based thereon or upon any obligation, covenant or
agreement contained in this Agreement, the Indenture or the Tax Agreement
against any past, present or future member, officer or employee of the Issuer,
or any member, officer, employee, director or trustee of any successor entity,
as such, either directly or through the Issuer or any successor entity, under
any rule of law or equity, statute or constitution or by the enforcement of any
assessment or penalty or otherwise, and all such liability of any such
incorporator, member, officer, employee, director or trustee as such is hereby
expressly waived and released as a condition of and in consideration for the
execution of this Agreement and the Indenture and the issuance of the Bonds.
(b) Notwithstanding any other provision of this Agreement (a) the
Issuer shall not be liable to the Borrower, the Trustee, any Bondholder or any
other person for any failure of the Issuer to take action under this Agreement
unless the Issuer (i) is reasonably requested in writing by an appropriate
person to take such action, (ii) is assured of payment of or reimbursement for
any expenses in such action, and (iii) is afforded, under the existing
circumstances, a reasonable period to take such action, and (b) neither the
Issuer nor any member, officer or employee or agent of the Issuer shall be
liable to the Borrower, the Trustee, any Bondholder or any other person for any
action taken by the Issuer or by its officers, servants, agents or employees, or
for any failure to take action under this Agreement or the Indenture, except the
Issuer agrees to take or refrain from any action required by any injunction and
to comply with any final judgment or decree for specific performance. In acting
under this Agreement, or in refraining from acting under this Agreement, the
Issuer may, subject to its agreement in the preceding sentence, conclusively
rely on the advice of its legal counsel.
Section 8.12 References to Bank, Letter of Credit and Credit Facility.
At any time while no Letter of Credit is in effect and if at such time there
shall be no Pledged Bonds outstanding and if no Obligations are then owing to
the Bank, all references herein to the Bank, the Letter of Credit and Credit
Facility shall be ineffective. Any provisions hereof requiring the consent of
the Bank shall be deemed ineffective if the Bank has previously wrongfully
dishonored a proper demand for payment under the Letter of Credit, which
wrongful dishonor is continuing.
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IN WITNESS WHEREOF, the Issuer and the Borrower have caused this
Agreement to be executed in their respective names and attested by their duly
authorized officers and sealed, all as of the date first above written.
THE INDUSTRIAL DEVELOPMENT AUTHORITY
OF THE CITY OF MOBERLY, MISSOURI
By /s/ Illegible
-------------------------------
President
EVERLAST FITNESS MFG. CORP.
By /s/ Ben Nadorf
-------------------------------
President
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EXHIBIT A
PROJECT DESCRIPTION
The Project shall consist of the acquisition, installation and
construction of a manufacturing plant containing approximately 300,000 square
feet to be used for the manufacture of fitness equipment to be located at 1900
Highway DD, Moberly, Missouri.
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EXHIBIT B
DESCRIPTION OF THE PROJECT SITE
A tract of land situated in the Northwest Quarter of the Southeast Quarter of
Section 26, Township 54 North, Range 14 West, Randolph County, Missouri, and
being more particularly described as follows: Commencing at the South Quarter
point of said Section 26; thence along the South line of said Section 26 South
88 degrees 34 minutes 13 seconds East a distance of 30.6 feet to a found right
of way marker on the Easterly right of way of Route DD; thence along said right
of way North 01 degree 13 minutes 50 seconds East a distance of 1342.65 feet to
the point of beginning of the description herein TOWIT: Thence along said right
of way North 01 degree 13 minutes 51 seconds East a distance of 91.84 feet to
the point of curvature of a tangent curve, concave to the West, having a radius
of 859.02 feet and a central angle of 12 degrees 02 minutes 34 seconds; thence
North along said curve a distance of 180.55 feet; thence along the East line of
a country road North 01 degree 42 minutes 53 seconds East a distance of 1060.06
feet to the centerline of the country road; thence along the centerline of said
county road South 88 degrees 22 minutes 09 seconds East a distance of 1436.91
feet to the Westerly right of way of Buchanan Street Road (50 feet wide); thence
along said Westerly right of way the following courses and distances, South 02
degrees 01 minute 25 seconds West a distance of 7.27 feet; thence South 02
degrees 31 minutes 45 seconds West a distance of 796.06 feet; thence South 02
degrees 30 minutes 08 seconds West a distance of 303.37 feet to the point of
curvature of a non-tangent curve, concave to the West, having a radius of 338.94
feet, a central angle of 33 degrees 33 minutes 37 seconds, and a chord of 195.70
feet bearing South 19 degrees 17 minutes 23 seconds West; thence South along
said curve, a distance of 198.53 feet to the point of curvature of a non-tangent
curve, concave to the Southeast, having a radius of 373.49 feet, a central angle
of 05 degrees 33 minutes 48 seconds, a chord of 36.25 feet bearing South 33
degrees 17 minutes 14 seconds West; thence Southwest along said curve a distance
of 36.27 feet; thence leaving said Westerly right of way, North 88 degrees 40
minutes 35 seconds West, a distance of 1322.15 feet to the point of beginning.
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