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EXHIBIT 10.16
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NEBRASKA INVESTMENT FINANCE AUTHORITY
(Issuer)
and
Transcrypt International, Ltd.
(Company)
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LOAN AGREEMENT
Dated as of January 15, 1994
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$850,000
Nebraska Investment Finance Authority
Industrial Development Revenue Bonds
(Transcrypt International, Ltd., Project)
Series 1994
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THIS INSTRUMENT ALSO CONSTITUTES A SECURITY AGREEMENT
UNDER THE NEBRASKA UNIFORM COMMERCIAL CODE
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LOAN AGREEMENT
Table of Contents
The Table of Contents for this Loan Agreement is for convenience of
reference only and is not intended to define, limit or describe the scope or
intent of any provision of this Loan Agreement.
Page
ARTICLE I DEFINITIONS AND INTERPRETATION
Section 1.01 Terms Defined in this Loan Agreement 2
Section 1.02 Construction and Interpretation 6
ARTICLE II REPRESENTATIONS
Section 2.01 Representations by the Issuer 7
Section 2.02 Representations by the Company 8
ARTICLE III CONSTRUCTION OF THE PROJECT; ISSUANCE OF THE
BONDS AND APPLICATION OF BOND PROCEEDS
Section 3.01 Agreement to Issue Bonds and
Application of Bond Proceeds 10
Section 3.02 Agreement to Construct the Project 10
Section 3.03 Project Costs 11
Section 3.04 Company Required to Pay Project Costs
in Event Bond Proceeds Insufficient 11
Section 3.05 Additional Security for Company's
Obligations 11
Section 3.06 Consent to Assignment of Agreement
and Grant of Security 11
ARTICLE IV TERMS OF LOAN AND NOTE; PAYMENT, PREPAYMENT
Section 4.01 Terms of Loan and Note 12
Section 4.02 Payments on the Note 12
Section 4.03 Place of Payments 12
Section 4.04 Additional Payments 12
Section 4.05 Company's Obligations Unconditional 13
Section 4.06 Interest on Unpaid Payments 14
Section 4.07 Prepayment of Note; Redemption of
Series 1994 Bonds 14
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Section 4.08 Company's Remedies 15
ARTICLE V USE, MAINTENANCE, CHARGES AND INSURANCE
Section 5.01 Use of Project 15
Section 5.02 Inspection of Project 16
Section 5.03 Maintenance of Property by Company 16
Section 5.04 Alterations 16
Section 5.05 Liens 16
Section 5.06 Taxes, Other Governmental Charges
and Utility Charges 17
Section 5.07 Insurance Required 17
Section 5.08 No Suits if Loss Covered by Insurance 19
ARTICLE VI DAMAGE, DESTRUCTION AND CONDEMNATION
Section 6.01 Damage and Destruction 19
Section 6.02 Application of Insurance Proceeds 19
Section 6.03 Application of Condemnation Award 20
Section 6.04 Release of Proceeds 21
Section 6.05 Net Proceeds Insufficient 21
ARTICLE VII SPECIAL COVENANTS
Section 7.01 Granting Easements 21
Section 7.02 Prepayment of the Bonds 22
Section 7.03 To Observe Laws, Ordinances and
Regulations 22
Section 7.04 Further Assurances 22
Section 7.05 Observance of Covenants and Terms of
the Trust Indenture and Deed of Trust 23
Section 7.06 Financial Covenants 23
Section 7.07 Company to Maintain its Properties 24
Section 7.08 Release and Indemnification 24
Section 7.09 Tax Covenants 25
Section 7.10 Waiver of Covenants 29
ARTICLE VIII ASSIGNMENT, SUBLEASING AND SELLING
Section 8.01 Assignments and Subleasing by
the Company 29
Section 8.02 Partial Release of Collateral 29
ARTICLE IX EVENTS OF DEFAULT AND REMEDIES
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Section 9.01 Events of Default 30
Section 9.02 Remedies on Default 32
Section 9.03 Liability of Company Unconditional 32
Section 9.04 Access to the Project Upon Default 32
Section 9.05 No Default Unless Bond Outstanding 33
Section 9.06 Remedies Cumulative, Delay Not to
Constitute Waiver 33
Section 9.07 Agreement to Pay Attorneys' Fees and
Expenses 33
Section 9.08 Recognition of Security Interest in
Pledge of Revenues and Income 34
Section 9.09 Exercise of the Issuer's Remedies 34
ARTICLE X COMPANY'S OPTIONS AND OBLIGATIONS
TO PURCHASE 34
ARTICLE XI AMENDMENTS 36
ARTICLE XII CONSTRUCTION AND ENFORCEMENT
Section 12.01 Performance of Company's Obligations 37
Section 12.02 Governing Law 37
Section 12.03 No Pecuniary Liability of the Issuer 37
Section 12.04 Assignment of Note; Company
Unconditionally Obligated 37
Section 12.05 No Rights to Set-Off 38
Section 12.06 Delegation of Duties 38
Section 12.07 Reference to Series 1994 Bonds
Ineffective After Series 1994
Bond Paid 38
Section 12.08 Severability 38
Section 12.09 Benefit of Bondholders 39
Section 12.10 Further Limitations 39
ARTICLE XIII MISCELLANEOUS
Section 13.01 Access 40
Section 13.02 Binding Effect 40
Section 13.03 Counterparts 40
Section 13.04 Notices 40
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LOAN AGREEMENT
This LOAN AGREEMENT is dated January 15, 1994, by and
between the Nebraska Investment Finance Authority ("Issuer"), as
lender, and TRANSCRYPT INTERNATIONAL, LTD. ("Company"), a Nebraska
limited partnership, as Borrower.
W I T N E S S E T H:
WHEREAS, Issuer is a body politic and corporate, not a state agency
but an independent instrumentality exercising essential public functions,
organized and existing under the laws of the State of Nebraska, with lawful
power and authority to enter into this Loan Agreement;
WHEREAS, Issuer, in furtherance of the purposes and pursuant to the
provisions of Sections 58-201 et. seq., Reissue Revised Statutes of Nebraska,
1943, as amended (collectively the "Act"), has authorized the issuance of its
$850,000 Industrial Development Revenue Bonds (Transcrypt International, Ltd.,
Project) Series 1994, dated January 15, 1994;
WHEREAS, Issuer has proposed and does hereby propose that it shall:
(a) Issue Eight Hundred Fifty Thousand Dollars ($850,000) in aggregate
principal amount of its Industrial Development Revenue Bonds (Transcrypt
International, Ltd., Project), Series 1994, dated January 15, 1994 ("Series 1994
Bonds"), under and pursuant to the Act for the purpose of making a loan to
Company to acquire, construct and equip manufacturing facilities to be used by
Company;
(b) Make a loan to the Company evidenced by the Note and upon the terms
and conditions hereinafter set forth; and
WHEREAS, the Company desires to accept the proposals of the Issuer
and to enter into this Loan Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein set forth, the Issuer and
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the Company do hereby covenant, agree and bind themselves as follows:
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ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.01 Terms Defined in this Loan Agreement.
Unless the context otherwise requires, the following terms shall
have the following meanings for all purposes of this Loan Agreement, such
definitions to be equally applicable to both the singular and plural forms and
masculine, feminine and neuter gender of any of the terms defined:
"Act" means Sections 58-201 et. seq., Reissue Revised Statutes of
Nebraska, 1943, and acts amendatory thereof and supplemental thereto.
"Acquisition Fund" means the fund created pursuant to Section 3.01
of the Trust Indenture.
"Architect" means Design Associates of Lincoln, Inc., or any other
licensed architect, acceptable to the Trustee, and assuming the obligations of
Architect under the agreement between Owner and Architect with respect to the
Project.
"Authorized Company Representative" means the person at the time
designated to act on behalf of the Company by written certificate furnished to
the Issuer and the Trustee, containing the specimen signature of such person and
signed on behalf of the Company by an authorized officer of the Company. Such
certificate may designate an alternate or alternates.
"Authorized Issuer Representative" means the Chairperson, Vice
Chairperson or Executive Director or such other person at the time designated to
act on behalf of the Issuer by written certificate furnished to the Company and
the Trustee, containing the specimen signature of such person and signed on
behalf of the Issuer by its Chairperson, Vice Chairperson or Executive Director.
Such certificate may designate an alternate or alternates.
"Bond Documents" means the Trust Indenture, the Deed of Trust, this
Loan Agreement and all documents referred to in any of the foregoing.
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"Bond Fund" means the fund created in Section 4.01 of the Trust
Indenture.
"Bondholder" means the holders of Series 1994 Bonds from time to
time outstanding.
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"Bonds" or "Series 1994 Bonds" mean the Nebraska Investment Finance
Authority, Industrial Development Revenue Bonds (Transcrypt International, Ltd.
Project), Series 1994, dated January 15, 1994, in the original principal amount
of $850,000, authorized by the Resolution and the Trust Indenture and described
therein.
"Closing" means the date of delivery of the Bonds pursuant to the
Indenture.
"Code" means the Internal Revenue Code of 1986, as amended, and the
applicable regulations issued thereunder.
"Collateral" means the property pledged to Trustee as security for
the Bondholders pursuant to Article X of this Loan Agreement.
"Company" means Transcrypt International, Ltd., a Nebraska
corporation, its successors and assigns, including any surviving, resulting or
transferee corporation or entity, permitted by Section 7.06 of this Loan
Agreement.
"Completion Date" means the earlier of the date of completion of
acquisition, construction and equipping of the Project or January 15, 1997.
"Costs of Issuance" means costs of issuance as defined in Section
147(g)(1) of the Code, including but not limited to underwriting fees and
expenses, bond and other printing expenses, legal fees and expenses, initial
Trustee's fees, fees of the Issuer and other expenses incurred in connection
with the issuance and sale of the Bonds.
"Costs of Issuance Account" means the subaccount created in the
Acquisition Fund pursuant to Section 3.02 of the Indenture.
"Deed of Trust" means the Deed of Trust and Construction Security
Agreement between Issuer and Trustee dated January 15, 1994.
"Determination of Taxability" means (i) the entry of a final decree
or judgment of any federal court or the taking of a
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final action by the Internal Revenue Service, which decree, judgment or action
determines that interest paid or payable on any Series 1994 Bond is or was
includable in the gross income of a holder of the Series 1994 Bonds for federal
income tax purposes under the Code (other than a holder who is a "substantial
user" or a "related person" within the meaning of Section 147 of the Code); or
(ii) the adoption of legislation by the United States Congress, the effect of
which is, in the opinion of Bond Counsel, to cause interest paid or payable on
the Series 1994 bonds to be includable in the gross income of holders of the
Series 1994 Bonds for federal income tax purposes under the Code (other than a
holder who is a "substantial user" or "related person" within the meaning of
Section 147 of the Code); or (iii) the filing with the Trustee, with notice to
the Issuer and to the Company, of an opinion by Bond Counsel to the effect that
interest on the Series 1994 Bonds has become includable in the gross income of
holders of the Series 1994 Bonds for purposes of federal income taxation (other
than a holder who is a "substantial user" or "related person" within the meaning
of Section 147 of the Code). No decree or action described in clause (i) shall
be considered "final," however, unless the Company has been given written notice
and, if it so desires and is legally allowed, has been afforded the opportunity
to contest the same either directly or in the name of any holder of Series 1994
Bonds, and until conclusion of any appellate review, if sought.
"Event of Taxability" means (i) the failure of Company to observe
any covenant, agreement or representation herein, which failure results in a
Determination of Taxability; or (ii) the enactment of federal legislation having
the effect of retroactively rendering interest on the Series 1994 Bonds taxable
to the holder thereof.
"Governing Body" means the members of the Issuer.
"Independent Counsel" means any attorney duly admitted to practice
law before the highest court of any state and not an officer or a full time
employee of the Issuer or the Company.
"Issuer" means the Nebraska Investment Finance Authority, a body
politic and corporate, not a state agency but an independent instrumentality,
organized and existing under the laws of the State of Nebraska, and any
successor thereto.
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"Loan Agreement" or "Agreement" means this Loan Agreement, dated
January 15, 1994, between the Issuer and the Company which provides for the
lending of proceeds of the Bonds by the Issuer to the Company.
"Note" means the Promissory Note from Company to Issuer in the
amount of $850,000 executed and delivered pursuant to this Loan Agreement.
"Original Purchasers" means the original purchasers of the Bonds,
initially Security National Bank.
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"Outstanding" means all Bonds issued, authenticated and delivered
pursuant to the Indenture except Bonds cancelled by Trustee or delivered to
Trustee for cancellation and Bonds the payment or redemption of which has been
made or provided for by depositing money or Governmental Obligations as provided
in the Indenture.
"Paying Agent" means Trustee and any successor paying
agent pursuant to the Indenture.
"Permitted Encumbrances" means, as of any particular time, (i) the
Trust Indenture; (ii) liens for ad valorem taxes and special assessments not
then delinquent; (iii) the Deed of Trust; (iv) this Loan Agreement; (v) utility,
access and other easements and rights-of-way, mineral rights, reservations,
restrictions and exceptions that are of record on January 15, 1994; (vi) such
minor defects, irregularities, encumbrances, easements, rights-of-way and clouds
on title as normally exist with respect to properties similar in character to
the Site and as do not in the aggregate, in the opinion of Independent Counsel,
materially impair the property affected thereby for the purposes for which it
was acquired or is held by the Company; and (viii) those additional
encumbrances, if any, identified in Exhibit D attached hereto and incorporated
herein by this reference.
"Project" means the Site and the facility to be constructed thereon,
as generally described on Exhibit A, which constitute a facility suitable for
use for manufacturing or industrial enterprises and a "project" under the Act.
"Project Costs" means only costs or expense incurred by Company
which are used to provide property of a character subject to the allowance for
depreciation under Sections 167 or 168 of the Code or amounts paid or incurred
which are, for federal income tax purposes, chargeable to Company's capital
account or would be chargeable either with a proper election by the Company or
but for a proper election by the Company to deduct such amounts, which
constitute a manufacturing facility within the meaning of Section 144(a)(12)(C)
of the Code. Project Costs shall not include Costs of Issuance, except to the
extent Costs of Issuance not exceeding two percent of the amount of the Bonds
may be paid from the Costs
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of Issuance Account in the Bond Fund pursuant to Section 3.02 of the Indenture.
"Resolution" means the Resolution of the Issuer adopted on January
18, 1994, authorizing the issuance and sale of the Bonds, as the same may be
amended, modified or supplemented by any amendments or modifications thereof.
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"Site" means all that certain real property situated in Lincoln,
Nebraska, more particularly described on Exhibit A attached hereto and
incorporated herein by this reference, including all improvements thereon,
together with all of the shrubs, trees, plants, crops, easements, rights,
privileges, franchises, appurtenances, oil, gas, mineral, water and water rights
(whether riparian, appropriative or otherwise, and whether or not appurtenant),
used in connection therewith, thereunto belonging or in any way appertaining and
all of the estate, right, title, interest, claim or demand whatsoever of Company
therein or thereto, either in law or in equity, in possession or expectancy, now
or hereafter acquired.
"Tax Equivalent Rate" means interest on a Bond calculated at a rate
of eight and one/fourth percent (8.25%) per annum.
"Taxable Date" means, in the event of a Determination of Taxability,
the first date as of which interest on the Series 1994 Bonds is included in
gross income of a holder of a Series 1994 Bond.
"Trust Estate" means any and all property or interest therein,
whether real or personal or tangible or intangible, mortgaged or pledged to the
Trustee, or in which the Trustee is granted a security interest, to secure the
payment of principal, premium, if any, and interest on the Bonds and all other
obligations of the Issuer under the Bonds, the Resolution and the Trust
Indenture, and the obligations of the Company pursuant to the Loan Agreement and
the Deed of Trust, including, but not limited to, the property described in
paragraphs I, II, III and IV of the granting clauses of the Trust Indenture.
"Trust Indenture" or "Indenture" means the Trust Indenture.
"Trustee" means Norwest Bank Nebraska, N.A., Omaha, Nebraska, its
successor or successors in trust under the Trust Indenture.
Section 1.02 Construction and Interpretation.
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The provisions of this Loan Agreement shall be construed and
interpreted in accordance with the following provisions:
(a) Any terms defined in the Trust Indenture but not defined herein shall
have the same meaning herein unless the context hereof clearly requires
otherwise.
(b) This Loan Agreement shall be interpreted in accordance with and
governed by the laws of the State of Nebraska.
(c) Wherever in this Loan Agreement it is provided that any person may do
or perform any act or thing the word "may" shall be deemed permissive and not
mandatory and it shall be construed that such person shall have the right, but
shall not be obligated, to do and perform any such act or thing.
(d) The phrase "at any time" shall be construed as meaning "at any time or
from time to time."
(e) The word "including" shall be construed as meaning "including, but not
limited to."
(f) The words "will" and "shall" shall each be construed as mandatory.
(g) The words "herein," "hereof," "hereunder," "hereinafter" and words of
similar import shall refer to this Loan Agreement as a whole rather than to any
particular paragraph, section or subsection, unless the context specifically
refers thereto.
(h) Forms of words in the singular, plural, masculine, feminine or neuter
shall be construed to include the other forms as the context may require.
(i) The captions to the sections of this Loan Agreement are for
convenience only and shall not be deemed part of the text of the respective
sections and shall not vary by implication or otherwise any of the provisions
hereof.
ARTICLE II
REPRESENTATIONS
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Section 2.01 Representations by the Issuer.
The Issuer makes the following representations:
(a) By resolution duly adopted on August 24, 1993, the Issuer adopted an
intent resolution with respect to providing for the issuance of the Series 1994
Bonds.
(b) The issuance and sale of the Series 1994 Bonds, the execution and
delivery of the Trust Indenture, the execution and delivery of this Loan
Agreement and the performance of all covenants and agreements of the Issuer
contained in this Loan Agreement and in the Trust Indenture and of all other
acts and things required under the Constitution and laws of the State of
Nebraska to make this Loan Agreement and the Trust Indenture valid
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and binding limited obligations of the Issuer in accordance with their terms,
are authorized and have been duly authorized by the Resolution of the Governing
Body duly adopted at a meeting of the Governing Body duly called and held on
January 18, 1994, by a majority vote of its members.
(c) To finance the loan to Company, the Issuer proposes to issue, pursuant
to the Act, $850,000 in original principal amount of Series 1994 Bonds
simultaneously with the execution and delivery of this Loan Agreement and the
Trust Indenture. The date, denomination, interest rate or rates, maturity
schedule, prepayment provisions and other pertinent provisions with respect to
the Series 1994 Bonds are set forth in the Trust Indenture and by this reference
are incorporated herein.
(d) Except as set forth in the Closing Certificate of the Issuer, there is
no litigation pending or to the best of its knowledge threatened against the
Issuer relating to the loan to Company or to the authorization, issuance, sale
or delivery of the Series 1994 Bonds or to this Loan Agreement or questioning
the organization, powers or authority of the Issuer.
Section 2.02 Representations by the Company.
The Company makes the following representations:
(a) The Company is a limited partnership organized and existing in good
standing under the laws of the State of Nebraska and duly authorized to transact
business in the State of Nebraska, having the power to enter into this Loan
Agreement and the Deed of Trust and perform all obligations contained herein and
the Deed of Trust and by proper partnership action has been duly authorized to
execute and deliver this Loan Agreement and in the Deed of Trust.
(b) The execution and delivery of this Loan Agreement and the Deed of
Trust and the consummation of the transactions herein contemplated and in the
Deed of Trust will not conflict with or constitute a breach of or default under
the partnership agreement or certificate of partnership of the Company or any
bond, debenture, note or other evidence of indebtedness or any contract, loan
agreement or lease to which the Company is a party or by which it is bound, or
result in the creation or imposition of any lien,
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charge or encumbrance of any nature upon any of the property or assets of the
Company contrary to the terms of any instrument or agreement.
(c) At all times during the term of this Loan Agreement and the Deed of
Trust, the Company will, at its own expense, operate the Project (with such
changes, improvements or additions as the Company may deem desirable; provided
the Project continues to qualify as a "Project" under the Act) for the useful
life of the Project and shall maintain and repair the Project in conformity with
the Company's normal maintenance and repair programs; provided that the Company
shall have no obligation to operate, maintain or repair any element or item of
the Project the operation, maintenance or repair of which becomes uneconomic to
the Company because of damage or destruction or obsolescence (including economic
obsolescence), or change in government standards and regulations, or, the
termination by the Company of the operation of the facilities to which the
element or item of the Project is an adjunct.
(d) There is no litigation pending or to the best of its knowledge
threatened against the Company affecting its ability to carry out the
acquisition, construction, improvement or financing of the Project or the
carrying into effect of this Loan Agreement or the Deed of Trust or, except as
disclosed in writing to the Issuer and the Trustee, as to any other matter
materially affecting the ability of the Company to perform its obligations
hereunder.
(e) Any financial statements of the Company or its officers delivered to
the Original Purchaser or the Trustee prior to the date hereof are true and
correct in all respects and fairly present the financial condition of the
Company and each of its officers as of the dates thereof; no materially adverse
change has occurred in the financial condition reflected therein since the
respective dates thereof; and no additional borrowings have been made by the
Company since the date thereof except in the ordinary course of business, other
than the borrowing contemplated hereby or borrowings disclosed to or approved by
the Trustee.
(f) So long as the Series 1994 Bonds remain outstanding, the Company will
operate the Project as an authorized "project" within the meaning of the Act.
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(g) All of the proceeds of the Series 1994 Bonds will be used only as
provided in Article III of this Loan Agreement.
(h) In addition to the Series 1994 Bonds, no other obligations have been
or are expected to be issued under Section 103 of the Code for sale at
substantially the same time as the Series 1994 Bonds are sold pursuant to a
common plan of marketing and at substantially the same rate of interest as the
Series 1994Bonds and which are payable in whole or in part by Company or
otherwise have with the Series 1994 Bonds any common or pooled security for the
payment of debt service thereon.
(i) As of the date hereof, the use of the Project as designed and proposed
to be operated, complies, in all material respects, with all presently
applicable laws, regulations, rules of the State of Nebraska and the respective
agencies thereof and the political subdivision in which the Project is located.
(j) The Company has not made, done, executed or suffered, and warrants
that it will not make, do, execute or suffer, any act or thing whereby its title
to the lands, easements and other rights described in Exhibit A as and for the
Site shall or may be impaired, charged or encumbered in any manner whatsoever
except by Permitted Encumbrances or in the Indenture.
ARTICLE III
CONSTRUCTION OF THE PROJECT;
ISSUANCE OF THE BONDS AND APPLICATION OF BOND PROCEEDS
Section 3.01 Agreement to Issue Bonds and Application of Bond Proceeds.
Issuer and the Company have contracted for the sale of the Series
1994 Bonds to the Original Purchaser. Upon execution of this Loan Agreement,
Issuer shall issue and direct the Trustee to deliver the Series 1994 Bonds to
the Original Purchaser and the proceeds thereof shall be deposited as provided
in the Trust Indenture to be disbursed as provided in the Trust Indenture.
Company shall direct the investment by the Trustee of moneys in the Bond Fund
and Acquisition Fund in permitted investments as specified in Section 4.05 of
the Trust Indenture.
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Section 3.02 Agreement to Construct the Project.
Company agrees that it will construct the Project as herein provided
and as described on Exhibit A hereto and will construct, acquire and install
other facilities and real and personal property, if any, deemed necessary for
the operation of the Project. Company agrees that only such changes will be made
in the Project which will not change the nature of the Project to the extent
that (a) it would not constitute a "project" as authorized by the Act or (b) it
would not constitute a facility which can be financed with the proceeds of the
Bonds pursuant to Section 144 of the Code.
Company agrees that the acquisition and construction of the Project
shall proceed with all reasonable dispatch and to use its best efforts to cause
such acquisition and construction to be completed by January 1, 1997, or as soon
thereafter as may be practicable, delays incident to strikes, riots, acts of
nature or the public enemy beyond the reasonable control of the Company only
excepted, but if for any reason such acquisition or construction is not
completed by such date, there shall be no diminution in or postponement of the
payments of principal and interest on the Note and as required hereby to be paid
by the Company. Pursuant to the Trust Indenture, all moneys in the Acquisition
Fund as of January 1, 1997, shall be transferred to the Bond Fund on such date
notwithstanding the incompletion of the Project.
Section 3.03 Project Costs.
For the purposes of this Loan Agreement, Project Costs shall include
only the costs of the Company which are incurred after August 24, 1993, in
connection with the acquisition and construction of the Project, which are used
to provide property of a character subject to the allowance for depreciation
within the meaning of Section 167 or 168 of the Internal Revenue Code of 1986 as
amended and in effect at the time of Closing, or amounts paid or incurred which
are, for federal income tax purposes, chargeable to the Project's capital
account or would be chargeable either with a proper election by the Company or
but for a proper election by the Company to deduct such amounts.
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Company shall submit requisition forms, together with the
certification for payment of such amounts signed by the Architect, to Trustee
for distribution of funds to pay Project Costs from the Acquisition Fund in
accordance with Section 3.03 of the Trust Indenture. Such requisition forms
shall specify the amount to be paid, the vendor or other entity to whom payment
is to be made (which may include reimbursement of Project Costs paid by
Company), and shall include a certification by Company that such disbursement is
a qualified Project Cost.
Section 3.04 Company Required to Pay All Project Costs in Event
Bond Proceeds Insufficient.
In the event, after the Series 1994 Bonds have been issued, the
proceeds thereof are not sufficient to pay the Project Costs in full, the
Company agrees, to complete the Project and to provide such amounts as are
necessary and sufficient for payment of the balance of the Project Costs. The
Issuer does not make any warranty, either express or implied, that the proceeds
of the Series 1994 Bonds will be sufficient to pay all the costs which will be
incurred in that connection.
Section 3.05 Additional Security for Company's Obligations.
As additional security for Company's obligations under this Loan
Agreement, Company shall execute and deliver simultaneously herewith the Deed of
Trust from Company to Trustee granting Trustee a first lien in the Project,
subject only to Permitted Encumbrances.
Section 3.06 Consent to Assignment of Agreement and Grant of
Security.
Company hereby consents to and approves Issuer's assignment of this
Loan Agreement to Trustee as security for the holders of the Series 1994 Bonds.
ARTICLE IV
PAYMENTS, PREPAYMENT
Section 4.01 Terms of Loan and Note.
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Company agrees to execute and deliver the Note to evidence its
obligation to repay the loan provided for in this Loan Agreement. The Note shall
be dated January 15, 1994, in the principal amount of $850,000, and shall be in
the form attached to this Loan Agreement as Exhibit B. Principal and interest on
the Note shall be paid by Company on the date and in the amount specified in the
Note.
Section 4.02 Payments on the Note.
The Company agrees to pay and shall pay principal and interest as
set forth in the Note.
Section 4.03 Place of Payment.
The Note is assigned by the Issuer to the Trustee for the benefit of
the Bondholders, and the Issuer hereby irrevocably directs all payments on the
Note to be paid by Company to Trustee at its principal place of business, for
the benefit of the Bondholders, at such address as it may from time to time
direct, for the account of the Issuer.
Section 4.04 Additional Payments.
In addition to payments on the Note and payments to be made pursuant
to Article V of this Loan Agreement, Company agrees to make the following
payments:
(a) Company will also pay from the Costs of Issuance Account in the
Acquisition Fund and, to the extent funds in such Account are not sufficient,
from its own funds, all costs, fees and expenses related to the issuance of the
Bonds, including but not limited to bond counsel fees, Issuer's fees, Issuer's
counsel fees, printing and copying charges and related fees and expenses.
(b) Company will also pay the initial, annual and special fees and
expenses of Trustee and any Paying Agents under the Trust Indenture, such fees
and expenses to be paid directly to Trustee, or any Paying Agents for the
Trustee's or any such Paying Agent's own account as and when such fees and
expenses become due and payable, and expenses in connection with any redemption
of the Bonds and any expenses incurred by the Trustee or the Issuer in
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connection with the registration, printing, reprinting or transfer of Bonds,
including the preparation of any Investment Letter.
(c) Company will also pay all fees, costs related to the payment of the
rebate or the calculation of the rebate and any required rebate amounts and will
cause to be performed, any rebate calculation required by Section 148(f) of the
Code. In the event Company fails to make any of the payments required in this
Section 4.04, the item so in default shall continue as an obligation of the
Company until the amount in default shall have been fully paid, and the Company
agrees to pay the same with interest thereon at the highest rate allowed by law.
(d) In the event the Project is transferred by Company during the term of
this Loan Agreement, Company will pay to Issuer an Assumption Fee equal to the
greater of one/eighth of one percent of the principal amount of Bonds then
Outstanding or $1,000.
(e) To the extent, in the performance of any of its duties to the Trust
Indenture or in the exercise of any of its rights or powers under the Trust
Indenture the Issuer shall incur any costs, fees or expenses (including
attorney's fees in connection with the review of any performance by Issuer of
any such duties or the exercise by the Issuer of any of such rights or powers),
Company will promptly pay all of such costs, fees and expenses upon the request
of the Issuer.
Section 4.05 Company's Obligations Unconditional.
The obligations of Company to make the payments required in Sections
4.02 and 4.04 hereof and to perform and observe the other agreements on its part
contained herein shall be absolute and unconditional; and, until such time as
the principal of, premium, if any, and interest on the Series 1994 Bonds shall
have been fully paid or provision for the payment thereof shall have been made
in accordance with the Series 1994 Bonds and the Trust Indenture, the Company
(i) will not suspend or discontinue any payments provided for in Sections 4.02
and 4.04 hereof, (ii) will perform and observe all of its other agreements
contained in this Loan Agreement and the Deed of Trust, and (iii) will not be
relieved of its obligations hereunder for any cause, including, without limiting
the generality of each of the foregoing, failure to complete the
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Project, any acts or circumstances that may constitute failure of consideration,
destruction of or damage to the Project, frustration of purpose, any change in
the tax or other laws or administrative rulings of or administrative actions by
the United States of America or the State of Nebraska or any political
subdivision of either, or any failure of the Issuer to perform and observe any
agreement, whether express or implied, or any duty, liability or obligation
arising out of or connected with this Loan Agreement or the Series 1994 Bonds.
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Section 4.06 Interest on Unpaid Amounts.
In the event the Company shall fail to make any payment under the
Note or Section 4.04 the item or installment so in default shall continue as an
obligation of the Company until the amount in default shall have been fully paid
with interest thereon as provided in the Note and Section 4.04.
Section 4.07 Prepayment of Note; Redemption of Series 1994 Bonds.
Company shall have the right or obligation to make prepayments on
the Note and direct the redemption of the Series 1994 Bonds as follows:
(a) Company may, at any time and from time to time make prepayments on the
Note, in whole or in part, at a prepayment price equal to the redemption price
for any Series 1994 Bonds directed by the Company to be called for redemption
prior to maturity plus accrued interest on the principal amount redeemed to the
date fixed for redemption, all in accordance with the terms of the Trust
Indenture.
(b) Company shall prepay the Note in full at a prepayment price equal to
the total outstanding principal amount of the Series 1994 Bonds, together with
accrued interest thereon to the date fixed for redemption, all in accordance
with the Trust Indenture, in the event that:
(i) there is damage to or destruction of the Project and Company
elects not to repair or reconstruct the Project as provided in Section 6.02
hereof; or
(ii) the condemnation of the Project to the extent it cannot
reasonably be restored or repaired as provided in Section 6.03 hereof; or
(iii) from funds remaining in the Acquisition Fund as of the
Completion Date.
(c) At any time Company may prepay the Note in full by depositing with the
Trustee monies or Government Obligations (as
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defined in the Indenture) sufficient so that after such deposit all of the
Series 1994 Bonds will no longer be Outstanding under the terms of the
Indenture.
In the event that Company elects to prepay or is required to prepay
the Note under one or the other of the prepayment terms provided for in this
Section 4.07, Issuer agrees to take such action as directed by the Company
required to bring about the redemption of any of the Series 1994 Bonds under the
terms of the Trust Indenture which are to be redeemed in connection with such
prepayment of the Note. Prior to making any optional payment on the Note,
Company shall give the Trustee at least forty-five (45) days notice in advance
of the redemption date, provided that the Trustee may waive any such notice in
its discretion.
Section 4.08 Company's Remedies.
Nothing contained in this Article shall be construed to release
Issuer from the performance of any of its agreements herein, and if Issuer
should fail to perform any such agreements, Company may institute such action
against the Issuer as the Company may deem necessary to compel the performance
so long as such action for specific performance shall not violate Company's
agreements in Section 4.05 or diminish or delay the amounts required to be paid
by Company pursuant to Sections 4.02 or 4.04 of this Loan Agreement. Company
acknowledges however and agrees that any obligation, pecuniary or otherwise, of
the Issuer created by or arising out of this Loan Agreement shall be payable
solely out of the monies derived from the Note, the sale of the Series 1994
Bonds, or other disposition of the Project upon a default by the Company or
otherwise.
ARTICLE V
USE, MAINTENANCE, CHARGES AND INSURANCE
Section 5.01 Use of Project.
Company agrees that it will use and operate the Project, and permit
it to be used and operated, only as a facility eligible to be and defined as a
"project" under the Act. Company will not use or permit any person to use the
Project for any use or purpose
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in violation of the laws of the United States of America, the State of Nebraska
or any ordinance of the City of Lincoln, Nebraska, and agrees to comply with all
the orders, rules, regulations and requirements of the officers or board of any
municipality, county, state or other governmental authority having jurisdiction
over the Project. Company shall have the right to contest by appropriate legal
proceedings, without cost or expense to the Issuer, the validity of any law,
ordinance, order, rule, regulation or requirement of the nature herein referred
to, and if by its terms compliance therewith legally may be held in abeyance
without subjecting the Project to any lien, charge, liability, damage or loss,
the Company may postpone compliance until the final determination of any such
proceedings.
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Section 5.02 Inspection of Project.
The Issuer and the Trustee shall have the right at all reasonable
times during the Term of the Loan Agreement to enter the Project for the purpose
of examining or inspecting the Project. Nothing in this Section shall imply any
duty upon the part of the Issuer or Trustee to examine the Project or to do or
pay for any work which under any provision of this Loan Agreement the Company is
required to perform, and the performance thereof by the Issuer or the Trustee
shall not constitute a waiver of the Company's default in failing to perform the
same.
Section 5.03 Maintenance of Project by Company.
Company agrees that during the term of the Loan Agreement it will
(i) keep the Project, including all appurtenances thereto and the equipment and
machinery therein, in good repair, working order and operating condition at its
own cost, (ii) abstain from and not permit the commission of waste in or about
the Project, and (iii) comply with all laws and regulations of any governmental
authority with reference to the Project and the manner of using or operating the
same and with all restrictive covenants, if any, affecting the title to the
Project or any part thereof.
Section 5.04 Alterations.
Company may remodel the Project or making such alterations,
additions, modifications and improvements to the Project from time to time as
it, in its discretion, may deem to be desirable for its uses and purposes;
provided that no change or alteration in the Project shall be made which, when
completed, would diminish the value of the Project and provided further that the
Project shall continue to qualify as a "project" under the Act. All alterations,
additions, improvements and modifications to the Project made by Company shall
be erected or made in a first class workmanlike manner, and the costs and
expenses thereof shall be promptly paid by Company.
Section 5.05 Liens.
Company agrees not to permit any mechanics', construction or other
liens to be established or to remain against the Project
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for labor or materials furnished in connection with any construction,
remodeling, additions, modifications, improvements, repairs, renewals or
replacements; provided, that if Company shall first notify Trustee of its
intention so to do, Company may in good faith contest any mechanics',
construction or other liens filed or established against the Project, and in
such event may permit the items so contested to remain undischarged and
unsatisfied during the period of such contest and any appeal therefrom unless
the Trustee shall notify Company that, in the opinion of Independent Counsel, by
nonpayment of any such items the lien of the Deed of Trust will be materially
endangered or the Project or any part thereof will be subject to loss or
forfeiture, in which event Company shall promptly pay or cause to be satisfied
and discharged all such unpaid items.
Section 5.06 Taxes, Other Governmental Charges and Utility
Charges.
Company agrees to pay, as the same respectively become due, all
taxes, payments in lieu of taxes, special assessments and governmental charges
of any kind whatsoever that may at any time be lawfully assessed or levied
against or with respect to the Project or any furnishings, equipment or other
property installed or brought by Company therein or thereon, and all claims for
rents, royalties, labor, materials, supplies, utilities and other charges
incurred in the operation, maintenance, use, occupancy and upkeep of the
Project.
Company may, at its expense contest in good faith any such taxes,
payments in lieu of taxes, assessments and other charges and, in the event of
any such contest, may permit the taxes, payments in lieu of taxes, assessments
or other charges so contested to remain unpaid during the period of such contest
and any appeal therefrom unless the Trustee shall notify the Company that, in
the opinion of the Trustee, by nonpayment of any such items, the revenues
pledged under the Deed of Trust or the interest of the Trustee in the Project
will be materially endangered or the Project or any part thereof will be subject
to loss or forfeiture, in which event such taxes, payments in lieu of taxes,
assessments or charges shall be paid promptly.
Section 5.07 Insurance Required.
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(a) Prior to the Completion Date, Company shall provide for or procure and
maintain builders risk insurance against such risks and in such amounts as are
customary for a prudent owner or contractor of property comparable to the
Project, and shall furnish to Trustee a certificate naming Trustee as a loss
payee. Thereafter throughout the term of the Loan Agreement, Company agrees to
procure and maintain continuously in effect with respect to the Project policies
of insurance against such risks and in such amounts as are customary for a
prudent owner of property comparable to that comprising the Project. Without
limiting the generality of the foregoing provision, Company specifically agrees
to maintain the following insurance coverages:
(i) Direct damage insurance covering loss from fire, "all risks,"
vandalism and malicious mischief in an amount not less than the then unpaid
principal balance of the Series 1994 Bonds which policies shall be subject to no
coinsurance clause and may include a deductibility provision not exceeding
$10,000;
(ii) General liability insurance against liability for injuries to
or death of any person or damage to or loss of property arising out of or in any
way relating to the condition of the Project or any part thereof in an amount
not less than $1,000,000 single limit coverage, provided that the requirements
of this subparagraph (ii) with respect to the amount of insurance may be
satisfied by an excess coverage policy;
(iii) Workmens' compensation coverage to the extent required by then
applicable law; and
(iv) Insurance against such other casualties and contingencies as
Trustee may from time to time require, if such insurance against such other
casualties and contingencies is available, all in such manner and for such
amounts as may be reasonably satisfactory to the Trustee.
(b) All insurance provided for in subsection (a) shall be effective under
a valid and enforceable non-assessable policy or policies.
(c) All policies of insurance required by Section 5.07(a)(i) shall be
written in the names of the Company and Trustee as their
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respective interests may appear and shall provide that the proceeds of such
insurance shall be payable to the Trustee pursuant to a standard clause to be
attached to each such policy.
(d) Company agrees to deposit with Trustee annually certificates of the
respective insurers evidencing that the insurance required by this Section 5.07
is in force and effect. Each policy of insurance herein required shall contain a
provision, by endorsement or otherwise, that the insurer shall not cancel,
refuse to renew or materially modify it without giving written notice to Trustee
at least 30 days before the cancellation, nonrenewal or modification becomes
effective. Before the expiration of any policy of insurance herein required,
Company shall furnish Trustee with evidence satisfactory to Trustee that the
policy has been renewed or replaced by another policy conforming to the
provisions of this Section 5.07 or that there is no necessity therefor under the
terms hereof. In lieu of separate policies, Company may maintain blanket
policies having the coverage required herein, provided original counterparts of
such insurance, or such other evidence as may be required by Trustee in its
discretion, as deposited with Trustee.
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Section 5.08 No Suits if Loss Covered By Insurance.
Each policy of insurance required by Section 5.07 shall contain a
provision that no act or omission of the Trustee or the Company shall affect or
limit the obligation of the insurance company to pay the amount of any loss
sustained and shall contain the standard form of waiver of subrogation. To the
extent permissible under applicable insurance policies, Trustee and Company and
all parties claiming under them hereby mutually release and discharge each other
from all claims and liabilities arising from or caused by any hazard covered by
insurance on the Project or covered by insurance in connection with property on
or activities conducted on the Project, regardless of the cause of the loss or
damage. No claim shall be made and no suit or action at law or in equity shall
be brought by the Trustee, or by anyone claiming by, through or under the
Trustee, against the Company for any damage to the Project, however caused, to
the extent the same is covered by insurance as in this Article required,
provided nothing in this Section 5.08 shall diminish Company's obligations to
repair or rebuild the Project as provided in Article VI.
ARTICLE VI
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 6.01 Damage and Destruction.
If prior to full payment of the Series 1994 Bonds (i) the Project or
any portion thereof is damaged or destroyed (in whole or in part) by fire or
other casualty or (ii) title to, or the temporary use of, the Project or any
part thereof shall be taken under the exercise of the power of eminent domain by
any governmental body or by any person, firm or corporation acting under
governmental authority, Company shall nevertheless be obligated to continue to
pay the amounts specified in Section 4.02 or 4.04 of this Loan Agreement.
Section 6.02 Application of Insurance Proceeds.
If prior to full payment of the Series 1994 Bonds (or provision for
payment thereof having been made in accordance with the provisions of the Trust
Indenture) the Project is damaged by
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fire or other casualty, Company (a) will promptly repair, rebuild or restore the
property damaged or destroyed to substantially the same condition as it existed
prior thereto with such changes, alterations and modification (including
substitutions and additions) as may be desired by Company and as will not change
the character of the Project so that it would not constitute a "project" within
the meaning of the Act, and (b) will apply for such purpose so much of any
insurance proceeds resulting from claims for such losses, and any additional
monies of the Company, as may be necessary to effect such repair, rebuilding or
restoration. All insurance proceeds resulting from claims for such losses not in
excess of $25,000 will be paid directly to Company for such application.
If prior to full payment of the Series 1994 Bonds (or provisions for
payment thereof having been made in accordance with the provisions of the Trust
Indenture) all or substantially all of the Project is destroyed by fire or other
casualty, Company may elect to prepay the Note or may elect to rebuild or repair
the Project. In the event Company elects to rebuild or repair the Project, or in
any event when a loss exceeds $25,000, all insurance proceeds resulting from
such loss will be paid to and held by the Trustee in a "Replacement Account."
Company will proceed promptly to repair, rebuild or restore the property damaged
or destroyed to substantially the same condition as existed prior to the event
causing such damage or destruction with such changes, alterations and
modifications (including the substitution and addition of other property) as may
be desired by Company and as will not change the character of the Project so
that it would not constitute a "project" within the meaning of the Act, and the
Trustee will apply so much of said proceeds as may be necessary to the cost of
such repair, rebuilding or restoration. Company will complete the work and will
pay any amount required for such purpose of advance to the Trustee all sums
required to complete such work.
Section 6.03 Application of Condemnation Award.
Should any of the Project be taken by exercise of the power of
eminent domain, any award or consideration for the property so taken shall be
paid over to the Trustee, except awards not in excess of $25,000, which shall be
paid directly to Company, and shall be applied first to the payment of all costs
or
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consideration and then, if no Event of Default has occurred and is continuing
under the Trust Indenture or this Loan Agreement, to the restoration or repair
of the Project without affecting the lien created pursuant to the Trust
Indenture and the obligations of the Company hereunder. If such an Event of
Default has occurred and is continuing under the Trust Indenture or this Loan
Agreement, or if by virtue of the nature or extent of the taking the Project
cannot reasonably be restored or repaired, the net proceeds of such condemnation
shall be applied by the Trustee to the payment or prepayment of the Series 1994
Bonds and interest accrued thereon, any balance remaining after payment in full
of the Series 1994 Bonds and all other amounts secured by this Loan Agreement
and the Deed of Trust and pursuant to the Trust Indenture shall be paid by the
Trustee to the Company.
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Section 6.04 Release of Proceeds.
In the event insurance proceeds or condemnation awards available to
the Company pursuant to Section 6.02 or 6.03 (except in the case of losses not
exceeding $25,000), such proceeds shall be made available, from time to time,
upon the Trustee being furnished with satisfactory evidence of the estimated
cost of completion of the repair or restoration of the Project and with such
architect's certificates, waivers of lien, contractor's sworn statements and
other evidence of cost and of payments, including, at the option of the Trustee,
insurance against mechanics' and construction liens and/or a performance bond or
bonds in form satisfactory to the Trustee, with premium fully prepaid, under the
terms of which the Trustee shall be either the sole or dual obligee, and which
shall be written with such surety company or companies as may be satisfactory to
Trustee, and with all plans and specifications for which rebuilding or
restoration to be submitted to and approved by Trustee.
Section 6.05 Net Proceeds Insufficient.
In the event the Trustee makes the insurance proceeds or
condemnation awards available to the Company pursuant to Section 6.02 or 6.03
and the net proceeds are insufficient to pay in full the cost of the repair,
restoration, modification or improvement of the Project, Company agrees to
complete the work and to pay any cost in excess of the amount of the net
proceeds.
ARTICLE VII
SPECIAL COVENANTS
Section 7.01 Granting Easements.
If Company is not then in default, Company from time to time may
grant easements, licenses, rights-of-way (including the dedication of public
highways) and other rights or privileges in the nature of easements with respect
to the Project, or may release existing easements, licenses, rights-of-way or
other rights or privileges with or without consideration, and the Trustee shall
execute and deliver any instrument necessary or appropriate to grant or release
any easement, license, right-of-way or other right
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or privilege upon receipt of (i) a copy of the instrument of grant or release
and (ii) a written application signed by the Company requesting such instrument
and certifying that in its opinion such grant or release is not detrimental to
the proper use or operation of the Project.
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Section 7.02 Prepayment of the Series 1994 Bonds.
The Issuer, at the request at any time of the Company and if the
same may then be prepaid, shall forthwith take all steps that may be necessary
under the applicable prepayment provisions of the Series 1994 Bonds to effect
the prepayment of all or part of the then outstanding Series 1994 Bonds, as may
be specified by Company, on the earliest prepayment date on which such
prepayment may be made under such applicable provisions and as specified by the
Company, provided the Company shall have made available to the Trustee funds
adequate in amount therefor and shall pay any expenses or costs (including legal
fees) of the Issuer related thereto. It is understood that all expenses of such
prepayment shall be paid by the Company, and not by the Issuer from any of its
funds. The Issuer shall, upon being indemnified by the Company, cooperate with
the Company in effecting any purchase of the Series 1994 Bonds or application of
funds pursuant to the provisions of the Trust Indenture pertaining to the
prepayment of the Series 1994 Bonds. Except as herein otherwise provided, the
Series 1994 Bonds shall be called for prepayment by the Issuer only upon the
direction of the Company.
Section 7.03 To Observe Laws, Ordinances and Regulations.
Company agrees to observe all applicable laws, regulations,
ordinances and orders of the United States of America, the State of Nebraska and
agencies and political subdivisions thereof and each department or agency
thereof applicable to the Company, its business and property. Company shall have
the right to contest by appropriate procedures the adoption, validity or
applicability of any laws, regulations, ordinances and orders referred to in
this Section and to delay compliance therewith, without violating the provisions
of this Section , if (i) the Trustee shall consent to such delay in writing,
(ii) a court of competent jurisdiction shall so order or determine or (iii) in
the opinion of Independent Counsel furnished to the Trustee, the procedures
taken by the Company to contest the validity or applicability of any such law,
regulation, ordinance or order are appropriate and have the effect of staying
the finality and enforceability thereof against the Company.
Section 7.04 Further Assurances.
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Company agrees to execute or cause to be executed any and all
further instruments that may reasonably be requested by the Issuer and Trustee
to vest in Trustee the right to receive and apply the revenues and income
pledged to the payment or protection and security of the Series 1994 Bonds, and
to execute, deliver, file or record any financing statement pursuant to the
Nebraska Uniform Commercial Code if such filing, registration or recording shall
be necessary or convenient to effect, protect or confirm the pledge of such
revenues and income. Company agrees to pay all recording, filing and
registration taxes and fees, together with all expenses incidental to the
preparation, execution, acknowledgement, filing and registration taxes and fees,
together with all expenses incidental to the preparation, execution,
acknowledgement, filing, registering and recording of any paper pursuant to the
Nebraska Uniform Commercial Code and of any instrument of further assurance, and
all stamp taxes, mortgage registry taxes and other taxes, duties, impositions,
assessments and charges lawfully imposed upon the Series 1994 Bonds or upon this
Loan Agreement.
Section 7.05 Observance of Covenants and Terms of the Trust
Indenture and Deed of Trust.
Company will not do or require the Issuer to do, in any manner,
anything otherwise than in accordance with the provisions of the Resolution or
Trust Indenture, and will not suffer or permit any default to occur under the
Trust Indenture or Deed of Trust, but will faithfully observe and perform, and
will do all things necessary so that the Issuer may observe and perform, all the
conditions, covenants and requirements of the Trust Indenture. Issuer agrees
that it will observe and perform all obligations imposed upon it by the Trust
Indenture and the Series 1994 Bonds, provided, that the Issuer has no obligation
to use its own funds or funds of the State of Nebraska, or any agency or
political subdivision thereof, to perform or cause performance of any such
obligations.
Section 7.06 Financial Covenants.
So long as any of the Series 1994 Bonds are outstanding, Company
agrees:
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(a) Company will preserve its corporate existence and its qualification to
do business in the State of Nebraska.
(b) Company will not (i) dispose of all or substantially all of its
assets, or (ii) consolidate or merge into another corporation, unless the
acquirer of assets or the corporation with which it shall consolidate or into
which it shall merge shall (A) be a corporation organized and existing under the
laws of one of the states of the United States of America, (B) be qualified to
do business in the State of Nebraska and in all other states in which the nature
of its business so requires, (C) have a tangible net worth immediately
subsequent to such acquisition, consolidation or merger at least equal to that
of Company prior to such acquiring, consolidating with or merging into, (D)
assume in writing all of the obligations of Company under the Loan Agreement and
(E) pay to the Issuer, at the time of such disposal, consolidation or merger,
the Assumption Fee in the amount described in Section 4.04(d).
(c) Company will furnish compilation financial statements from independent
certified public accountants to Trustee within 180 days of its fiscal year end.
Such statements will include, on a consolidated basis, a balance sheet, related
statements of income, retained earnings and statements of cash flow and relevant
footnotes.
(d) Not more than 60% of Company's stock will be sold or otherwise
transferred from existing stockholders to persons who are not presently
stockholders in any twelve (12) month period.
Section 7.07 Company to Maintain Its Properties.
The Company covenants and agrees that it will maintain, preserve and
keep its properties, including the Project in good repair and working order, and
from time to time will make all necessary repairs, replacements, renewals,
additions and deletions so that at all times the efficiency thereof shall be
maintained and will maintain licenses and permits necessary for the conduct of
its businesses.
Section 7.08 Release and Indemnification.
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(a) Company agrees to protect, indemnify and save Issuer and its
officials, officers, members, agents and employees, harmless from and against
all liability, losses, damages, costs, expenses (including attorney's fees),
taxes, causes of action, suits, claims, demands and judgments of any nature or
from, by or on behalf of any person, firm, corporation or other legal entity
arising in any manner from the transaction of which this Loan Agreement is a
part or arising in any manner in connection with the Project or the financing of
the Project, the Series 1994 Bonds, including, without limiting the generality
of the foregoing, those arising from (i) any work done on the Project or the
operation of the Project while this Loan Agreement is in effect, (ii) any breach
or default on the part of the Company in the performance of its obligations
under this Loan Agreement, (iii) the Project or any part thereof, (iv) any
violation of contract, agreement or restriction by the Company relating to the
Project, or (v) any violation of law, ordinance or regulation affecting the
Project or any part thereof or the ownership or occupancy of use thereof. Upon
notice from Issuer, Company shall defend Issuer in any action or proceeding
brought in connection with any of the above.
(b) It is the intention of the parties that Issuer and its Governing Body,
officials, officers, members, agents and employees shall not incur pecuniary
liability by reason of the terms of this Loan Agreement or by reason of the
undertakings required of the Issuer or its Governing Body, officials, officers,
members, agents and employees hereunder in connection with the issuance of the
Series 1994 Bonds, the adoption of the Resolution, the execution of the Trust
Indenture, the performance of any act required of Issuer or its Governing Body,
officials, officers, members, agents or employees by this Loan Agreement or the
Trust Indenture, or the performance of any act requested of the Issuer or its
Governing Body, officials, officers, members, agents or employees by the Company
or in any way arising from the transaction of which this Loan Agreement or the
Trust Indenture is a part or arising in any manner in connection with the
Project, the Series 1994 Bonds, or the financing of the Project; nevertheless,
if the Issuer or its Governing Body, officials, officers, members, agents or
employees should incur any such pecuniary liability, then in such event, the
Company shall indemnify and hold the Issuer and its Governing Body, officials,
officers, members, agents and employees harmless against all claims by or on
behalf of any person, firm, corporation or
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other legal entity, arising out of the same, and all cost and expenses,
including reasonable attorneys' fees, incurred in connection with any such claim
or in connection with any action or proceeding brought thereon and upon notice
from the Issuer, the Company shall defend the Issuer and its Governing Body,
officials, officers, members, agents and employees in any such action or
proceeding.
Section 7.09 Tax Covenants.
(a) It is the intention of the parties hereto that the interest on the
Bonds shall be and remain exempt from inclusion in gross income for purposes of
computing federal income taxation pursuant to Section 103 of the Code and to
that end the Company does hereby represent and agree with the Issuer and with
Trustee as follows:
(i) Other than as listed on Exhibit C attached hereto, the Company
represents that there have never been issued any industrial development bonds
with respect to "facilities" described in Section 144(a)(4)(B) of the Code which
are located in the City of Lincoln, Nebraska, which bonds would be taken into
account in determining the aggregate face amount of the Bonds as provided in
Section 144(a)(2) of the Code.
(b) Company will not exceed the limitations set forth in Section 144(a)(2)
of the Code.
(c) Company covenants, warrants and agrees that:
(i) Company intends to and will utilize or cause the Project to be
utilized, to the expiration or earlier termination of this Loan Agreement, as
provided herein, as a "Project" within the meaning of the Act and to accomplish
the foregoing, Company agrees not to enter into any subleases of the Project
except with subtenants who will utilize the Project for purposes permitted by
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the Act and who will not otherwise cause the loss of tax exemption under Section
103 of the Code for the interest on the Bonds, whether by virtue of excess
capital expenditures or otherwise.
(ii) No portion of the proceeds of the Series 1994 Bonds will be
used to provide working capital for Company or any related person.
(iii) The Project consists, and will at all times consist, of a
manufacturing facility within the meaning of Section 144(a)(12)(c) of the Code.
(iv) Ninety-five percent (95%) of the par value of the Series 1994
Bonds constituting substantially all (within the meaning of Section 144 of the
Code) of the said par value of the Bond(s) will be used for the acquisition,
construction and equipping of the Project.
(v) Company is required to file its federal income tax returns with
the Internal Revenue Service Center, Ogden, Utah.
(vi) Not more than twenty-five percent (25%) of the proceeds of the
Series 1994 Bonds shall be used for the acquisition of land, none of which will
be agricultural land.
(vii) None of the proceeds of the Series 1994 Bonds shall be used
for the acquisition of property (or an interest therein) unless the first use of
such property is pursuant to such acquisition except as permitted by Section
147(d)(2) of the Code and the Company agrees to comply with the provisions of
Section 147(d)(2) and any and all rules and regulations issued or proposed in
connection therewith.
(viii) The aggregate authorized par value of bonds described in
Section 144(a)(2) of the Code (including the Series 1994 Bonds) which can be
allocated to any "test period beneficiary" as such term is defined in Section
144(a)(10) of the Code (including, but not limited to the Company) will not
exceed $40,000,000.
(ix) None of the proceeds of the Series 1994 Bonds will be used to
provide any airplane, skybox or other private luxury
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box, any facility primarily used for gambling, any store the principal business
of which is sale of alcoholic beverages for consumption off premises, any
private or commercial golf course, country club, massage parlor, tennis club,
health club facility, skating facility (including roller skating; skateboard and
ice skating), racquet sports facility (including any handball or racquetball
court), hot tub facility, suntan facility or racetrack,
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or any facility the primary purpose of which is one of the following: retail
food and beverage services, automobile sale or service, or the provision of
recreation or entertainment.
(x) No portion of the payments of principal and interest to be made
under the Series 1994 Bonds is "federally guaranteed," directly or indirectly,
within the meaning of Section 149(b) of the Code.
(xi) Company will pay from its own funds and not out of Bond
Proceeds all "costs of issuance" in excess of two percent of the face amount of
the Series 1994 Bonds and will maintain sufficient records to evidence the
payment of said "issuance costs" from its own funds and not proceeds of the
Series 1994 Bonds.
(xii) Company will undertake construction of the Project and expend
all of the net proceeds of the Bond prior to the Completion Date.
(d) Issuer and Company further agree to fully comply, so long as any Bonds
are outstanding, with all effective rules, rulings and regulations promulgated
by the Department of Treasury or the Internal Revenue Service with respect to
bonds issued under Section 144 of the Code so as to maintain the exemption from
gross income as provided in Section 103 of the Code.
(e) The provisions of this Section 7.09 establish minimum tax compliance
requirements. To the extent other provisions of this Loan Agreement establish
more restrictive requirements, such provisions shall control provided compliance
with such provisions does not violate this Section .
(f) The parties hereto recognize that the Series 1994 Bonds are being sold
on the basis that the interest payable on the Series 1994 Bonds is excludable
from the gross income of the holder(s) thereof under Section 103 of the Code,
except with respect to the Series 1994 Bonds when in the hands of an owner or
holder who is a "substantial user" of the Project or a "related person" as
defined in the Code. Company does hereby covenant and agree for the benefit of
the Bondholders that the proceeds of the Series 1994 Bonds shall not be used or
applied in such manner as to constitute
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any of the Series 1994 Bonds an "arbitrage bond" as that term is defined in
Section 148 of the Code.
(g) Company shall cause to be filed an Information Return for Private
Activity Bond Issues in accordance with Section 149(e) of the Code. To assure
Issuer of the correctness and completeness of such Information Return, the
Company warrants and represents to the Issuer that the following is a true
description of the facilities to be acquired pursuant to this Loan Agreement by
the lendable proceeds of the Series 1994 Bonds:
1. Cost of Land (or portion thereof
financed by issue) . . . . . . . . . . $ 0
2. Cost of Buildings and Structures (or
portion thereof financed by issue) . . $850,000
3. Cost of equipment with an ACRS life
of more than 5 years (or portion
thereof financed by issue) . . . . . . $ 0
4. Cost of equipment with an ACRS life
of 5 years or less (or portion
thereof financed by issue) . . . . . . $ 0
(h) The weighted economic life of the facilities to be acquired pursuant
to this Loan Agreement by the lendable proceeds of the Series 1994 Bonds is 30
years. The average maturity of the Series 1994 Bonds does not exceed 120% of the
average reasonably expected economic life of the Project within the meaning of
Section 147(b) of the Code.
(i) Company covenants with all purchasers and holders of the Series 1994
Bonds which at any time remain outstanding, that moneys on deposit in any fund
or account in connection with the Series 1994 Bonds, whether or not such moneys
were derived from the proceeds of the sale of the Series 1994 Bonds or from any
other sources, will not be used in a manner which will cause the Series 1994
Bonds to be "Arbitrage Bonds" within the meaning of Section 148 of the Code, and
any lawful regulations promulgated or heretofore proposed thereunder, as the
same exist on this date, or may from time to time hereafter be amended,
supplemented, or
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revised. Issuer hereby appoints Company to take all actions necessary on its
behalf to comply with the requirements of Section 148 and maintain the
tax-exempt status of the Series 1994 Bonds. Company covenants that it shall take
all actions necessary to comply with said Section 148 and any Treasury
regulations. Trustee shall observe all instructions of the Company given with
respect to investment of moneys in the Acquisition Fund and the Bond Fund held
by the Trustee for purposes of achieving compliance with said Section 148 and
applicable Treasury Regulations.
(j) Company, on behalf of the Issuer, shall pay to the United States, all
sums required to be rebated pursuant to Section 148 of the Code and Treasury
Regulations issued pursuant thereto, such sums to be an amount equal to the sum
of (1) the excess of (A) the aggregate amount earned on all Nonpurpose
Investments (other than investments attributable to an excess described in this
section), over (B) the amount which would have been earned if all Nonpurpose
Investments were invested at a rate equal to the Yield on the Series 1994 Bonds,
plus (2) any income attributable to the excess described in clause (1), at the
times and in the amounts required by Section 148(b) of the Code, all within the
meaning of Section 148(f) of the Code. Trustee shall maintain records of the
interest rate borne by the Series 1994 Bonds and the investments of all Funds
and earnings thereon in adequate detail to enable the Company to calculate the
amount of any rebate required to be made to the United States. Company shall pay
the rebate to the United States at times and in installments which satisfy
Section 148(f) of the Code and the Treasury Regulations. The rebate shall be
calculated as provided in Sections 1.148-1T through 1.148-8T of the Treasury
Regulations.
Section 7.10 Waiver of Covenants.
The covenants and agreements made by the Company under Sections 7.06
and 7.07 (except Section 7.06(b)(ii)(E), which can be waived only by Issuer) may
be waived, either temporarily or permanently, by the Bondholders. Any such
waiver shall be evidenced by instrument(s) in writing signed by the holders of
all Series 1994 Bonds then outstanding.
ARTICLE VIII
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ASSIGNMENT, SUBLEASING AND SELLING
Section 8.01 Assignment and Pledging of the Loan Agreement by the
Issuer.
The Issuer may assign its interest in this Loan Agreement, and
pledge any monies receivable from the Project, including all amounts receivable
hereunder, to the Trustee pursuant to the Trust Indenture as security for
payment of the principal of, premium, if any, and interest on the Series 1994
Bonds.
Section 8.02 Partial Release of Land or Equipment.
Trustee may, upon request from Company, at any time and from time to
time, release specific land or equipment constituting a portion of the Project
from this Agreement and from any security interest or other assignment or pledge
created in connection herewith. No such property shall be released unless
Company provides Trustee with security in collateral of similar value and such
release does not materially impair the operation of the Project as a "project"
within the meaning of the Act or the security held by Trustee for Company's
obligations.
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ARTICLE IX
EVENTS OF DEFAULT AND REMEDIES
Section 9.01 Events of Default.
The following shall be "Events of Default" under this Loan Agreement
and the term "Event of Default" shall mean, whenever used in this Loan
Agreement, any one or more of the following events:
(a) If Company fails to pay any installment of principal or interest on
the Note on the date the same shall become due and payable; or
(b) If Company fails to pay any additional amounts required to be paid
pursuant to Section 4.04 hereof within ten (10) days after notice of nonpayment
from Issuer or Trustee; or
(c) If Company defaults in the due and punctual performance of any of the
covenants, conditions, agreements and provisions contained in this Loan
Agreement or in the Trust Indenture and such default continues for a period of
60 days after written notice, specifying such default and requiring the same to
be remedied, shall have been given to the Company by the Issuer or the Trustee
or unless all reasonable and necessary steps to remedy such default are taken
within said 60-day period and the default is remedied within 6 months after such
notice; or
(d) If any representation or warranty made by the Company in this Loan
Agreement or in the Trust Indenture is or was, at the time it is made, false or
misleading in any material respect; or
(e) If any Event of Default, as that term is defined in the
Trust Indenture shall have occurred and be continuing; or
(f) Without limiting the generality of paragraph (b) of this Section , if
the Company fails to maintain its existence or sells, transfers or assigns its
interest in the Project in violation of this Loan Agreement; or
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(g) If a petition commencing a case under Title 11 of the United States
Code, as now constituted or as hereafter amended, shall be filed by or against
the Company and, unless such petition shall have been dismissed, nullified,
stayed or otherwise rendered ineffective (but then only so long as such stay
shall continue in force or such ineffectiveness shall continue), all the
obligations of the Company under this Loan Agreement shall not have been and
shall not continue to be duly assumed within the time provided and otherwise in
accordance with the provisions of 11 U.S.C. Section 365 by a trustee or trustees
appointed (whether or not subject to ratification) in such proceedings in such
manner that such obligations shall have the same status as expenses of
administration and obligations incurred by such trustee or trustees; or
(h) If any other proceeding shall be commenced by or against the Company
for any relief which includes or might result in any modification of the
obligations of the Company hereunder under any bankruptcy or insolvency laws or
laws relating to the relief of debtors, readjustments of indebtedness,
reorganizations, arrangements, compositions or extensions (other than a law
which does not permit any readjustments of the obligations of the Company
hereunder), and, unless such proceedings shall have been dismissed, nullified,
stayed or otherwise rendered ineffective (but then only so long as such stay
shall continue in force or such ineffectiveness shall continue), all the
obligations of the Company under this Loan Agreement shall not have been and
shall not continue to be duly assumed in writing within 60 days after such
proceedings shall have been commenced, pursuant to a court order or decree, by a
trustee or trustees or receiver or receivers appointed (whether or not subject
to ratification) for the Company or for the property of the Company in
connection with any such proceedings in such manner that such obligations shall
have the same status as expenses of administration and obligations incurred by
such trustee or trustees or receiver or receivers; or
(i) If the Company shall at any time become insolvent within the meaning
of 11 U.S.C. Section 101(26), as now constituted or hereinafter amended, or
shall cease generally to pay their debts as such debts become due.
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The provisions of paragraph (c) of this Section are subject to the
following limitations: If by reason of force majeure the Company is unable in
whole or in part to carry out any of the agreements on its part to be performed,
the Company shall not be deemed in default during the continuance of such
disability. The term "force majeure" as used herein includes the following: acts
of nature; strikes, lockouts or other employee disturbances; acts of public
enemies; orders of any kind of the government of the United States of America or
of the State of Nebraska or any of their departments, agencies, political
subdivisions or officials, or any civil or military authority; insurrections;
riots; epidemics; landslides; lightning; earthquakes; fires; hurricanes or
storms; floods; washouts; droughts; arrests; restraint of government and people;
civil disturbances; explosion; breakage or accident to machinery, transmission
pipes or canals; partial or entire failure of utilities; or any other cause or
event not reasonably within the control of the Company.
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Section 9.02 Remedies on Default.
Whenever any Event of Default shall have happened and be continuing,
any one or more of the following steps may be taken by the Trustee:
(a) The Trustee may declare all installments of Principal and accrued
Interest on the Note (in an amount equal to the unpaid principal, premium, if
any, and interest on the Series 1994 Bonds) to be immediately due and payable,
whereupon the same shall become immediately due and payable, together with
interest thereon;
(b) The Trustee may seek and shall be entitled to receive injunctive or
other appropriate relief to restrain and prevent the Company from taking, or (to
the extent that it can exercise control over the same) permitting to be taken,
any action which would result in a default in the keeping of any of the
covenants set forth in this Loan Agreement;
(c) Trustee may pursue any remedies available under Article X of this Loan
Agreement relating to Nebraska Uniform Commercial Code remedies, and remedies
under the Note, Deed of Trust, or any other document granting to Issuer rights
in connection herewith;
(d) The Trustee may take whatever action at law or in equity may appear
necessary or desirable to enforce performance and observance of any obligation,
agreement or covenant of the Company under this Loan Agreement.
Section 9.03 Liability of Company Unconditional.
The liability of the Company and the liability of any successor,
assign or personal representative of any of the foregoing, hereunder and under
the Trust Indenture is and shall continue to be absolute, unconditional and
irrevocable, and shall not be limited to the Company's interest in the Project,
and neither the Issuer, the Trustee nor any other firm, person or entity shall
be required to look exclusively to the Project or the security provided by the
Deed of Trust for payment and satisfaction of the obligations of the Company
under the Trust Indenture.
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Any amounts collected pursuant to action taken under this Section
9.03 shall be paid to the Trustee.
Section 9.04 No Election to Terminate Loan Agreement.
Neither the seeking of such injunctive or other relief nor the
taking of possession of the Project shall relieve the Company of its obligation
to pay all amounts payable under Sections 4.02 and 4.04, or of any of their
other obligations under this Loan Agreement, all of which shall survive such
action or repossession, and the Company shall continue to pay such amounts so
long as any amounts are outstanding under the Note or Bonds and whether or not
the Project shall have been sold or relet, less the net receipts, if any, of any
sale or reletting of the Project after deduction of all the Trustee's and the
Issuer's expenses in or in connection with such action or reletting, including,
without limitation, all repossession charges, brokerage commissions, legal
expenses, reasonable attorneys' fees, expenses of employees, alteration costs
and expenses of preparation for reletting.
Section 9.05 Access to the Project Upon Default.
Whenever an Event of Default shall be continuing, the Trustee shall
have and is hereby granted by the Company the right to enter the Project in the
exercise of any of the remedies hereinabove provided.
Section 9.06 Remedies Cumulative, Delay Not to Constitute Waiver.
No remedy conferred upon or reserved to the Issuer, the Trustee or a
receiver by this Loan Agreement 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 Loan Agreement
or now or hereafter existing at law or in equity or by statute. The Issuer,
Trustee and the Company shall each be entitled to seek specific performance and
injunctive or other equitable relief for any breach or threatened breach of any
of the provisions of this Loan Agreement, notwithstanding availability of an
adequate remedy at law, and each party hereby waives the right to raise such
defense in any proceeding in equity. No delay or omission to exercise any right
or power accruing upon any default shall impair any such
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right or power, and any such right or power may be exercised from time to time
and as often as may be deemed expedient. In order to entitle the Issuer or
Trustee to exercise any remedy reserved to it in this Article, it shall not be
necessary to give any notice, other than such notice as may be herein expressly
required. 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 a particular breach so waived and shall not be deemed to
waive any other breach hereunder. No acceptance of any payments with knowledge
of any default shall be deemed a waiver of such default.
Section 9.07 Agreement to Pay Attorneys' Fees and Expenses.
In the event the Company should default under any of the provisions
of this Loan Agreement and the Issuer or Trustee should employ attorneys or
incur other expenses for the collection of rent or the enforcement of
performance or observance of any obligation or agreement on the part of the
Company contained in this Loan Agreement, the Company agrees that it will on
demand therefor reimburse the Issuer or Trustee for the reasonable fees of such
attorneys and such other expenses so incurred, to the extent permitted by law.
Section 9.08 Recognition of Security Interest in Pledge of
Revenues and Income.
The Company agrees that the Issuer and Trustee, as the case may be,
shall have each of the rights of a secured party provided by the Uniform
Commercial Code as in effect in the State of Nebraska with respect to the pledge
of collateral under this Loan Agreement.
Section 9.09 Exercise of the Issuer's Remedies.
Whenever any Event of Default shall have occurred and be continuing,
Trustee shall exercise any or all of the rights of the Issuer under this Article
IX.
ARTICLE X
SECURITY INTEREST UNDER THE UNIFORM COMMERCIAL CODE
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As provided in this Article X, this Loan Agreement constitutes a
"security agreement" under the Uniform Commercial Code of the State of Nebraska
(the "UCC") with respect to the following terms and conditions:
(a) Company hereby pledges and grants to Trustee, as security for the Note
and the Series 1994 Bonds, a first priority security interest in all fixtures
located at or used in connection with the Project, now owned or hereafter
acquired, including all proceeds and products thereof, and all substitutions,
replacements and accessories with respect to any such property (for purposes of
this section and Article IX the "Collateral").
(b) All of the terms, provisions, conditions and agreements contained in
this Loan Agreement pertain and apply to the Collateral as fully and to the same
extent as to any other property comprising the Project; and the following
provisions of this Section shall not limit the applicability of any other
provisions of this Loan Agreement, but shall be in addition thereto;
(i) Company (being the "debtor" as that term is used in the UCC) is
and will be the true and lawful owner of the Collateral, subject to no liens,
charges or encumbrances other than the lien hereof and Permitted Encumbrances.
(ii) The Collateral is to be used by Company solely for business
purposes and is being installed in the Project.
(iii) The Collateral will be kept at the Project and will not be
removed, sold, assigned or transferred therefrom by the Company or any other
person without the prior written consent of the Trustee (being the "secured
party" as that term is used in the UCC), which consent shall not be unreasonably
withheld; and the Collateral may be affixed to such real estate but will not be
affixed to any other real estate. Trustee may from time to time release
collateral as provided in this Loan Agreement.
(iv) Proceeds of the Collateral are also covered by the lien of this
Loan Agreement; however, such provision shall not be construed to mean that the
Trustee consents to any sale of the Collateral.
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(v) No financing statement covering any of the Collateral or any
proceeds thereof is on file in any public office except pursuant hereto; and
Company will at its own cost and expense, upon demand, furnish to Trustee such
further information and will execute and deliver to the Trustee such financing
statement and other documents in form satisfactory to Trustee and will do all
such acts and things as the Trustee may at any time or from time to time
reasonably request or as may be necessary or appropriate to establish and
maintain a perfected security interest in the Collateral as security for the
indebtedness hereby secured, subject to no adverse liens or encumbrances, other
than Permitted Encumbrances; and Company will pay the cost of filing the same or
filing or recording such financing statements or other documents in all public
offices where filing or recording is deemed by Trustee to be necessary or
desirable.
(vi) Upon an Event of Default hereunder and at any time thereafter
(such default not having previously been cured), Trustee at its option may
declare the indebtedness hereby secured immediately due and payable and
thereupon Trustee shall have the remedies of a secured party under the UCC,
including, without limitation, the right to take immediate and exclusive
possession of the Collateral, or any part thereof, and for that purpose may, so
far as Company can give authority therefore, with or without judicial process,
enter (if this can be done without breach of the peace) upon any place where the
Collateral or any part thereof may be situated and remove the same therefrom
(provided that, if the Collateral is affixed to real estate, such removal shall
be subject to the conditions stated in the UCC); and the Trustee shall be
entitled to hold, maintain, preserve and prepare the Collateral for sale, until
disposed of, or may propose to retain the Collateral subject to the Company's
right of redemption in satisfaction of the Company's obligations, as provided in
the UCC. The Trustee without removal may render the Collateral unusable and
dispose of the Collateral at the Project. Trustee may require the Company to
assemble the Collateral and make it available to Trustee for its possession at a
place to be designated by Trustee which is reasonably convenient to both
parties. Trustee will give Company at least five days' notice prior to the time
and place of any private sale or any other intended disposition thereof. The
requirements of reasonable notice shall be met if such notice is mailed, by
certified or registered mail, postage prepaid, to the
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address of the Company herein set forth at least five days before the time of
the sale or disposition. The Trustee or any Bondholder may buy at any public
sale, and, if the Collateral is of a type customarily sold in a recognized
market or is of a type which is the subject of widely distributed standard price
quotations, the Issuer, Trustee or any Bondholder may buy at private sale. Any
such sale may be held as part of and in conjunction with any foreclosure sale of
the real estate comprised within the Project, the Collateral and real estate to
be sold as one lot if the Trustee so elects. The net proceeds realized upon any
such disposition, after deduction for the expenses of retaking, holding,
preparing for sale, selling or the like and the reasonable attorneys' fees and
legal expenses incurred by Trustee shall be applied in satisfaction of the
indebtedness hereby secured in accordance with this Loan Agreement. Trustee will
account to the Company for any surplus realized on such disposition.
(vii) The remedies of Issuer and Trustee hereunder are cumulative
and the exercise of any one or more of the remedies provided for herein under
the UCC shall not be construed as a waiver of any of the other remedies of
Issuer and Trustee, including having the Collateral deemed part of the realty
upon any foreclosure thereof so long as part of the indebtedness hereby secured
remains unsatisfied.
ARTICLE XI
AMENDMENTS
The Company accepts notice that this Loan Agreement is to be pledged
and that the Note has been assigned to the Trustee as security for the Series
1994 Bonds. The Company consents and agrees for the benefit of the Bondholders
that, until payment in full of the Series 1994 Bonds or until funds sufficient
for such payment have been duly provided, this Loan Agreement may not be
effectively amended, changed or modified (except for the purpose of curing any
ambiguity or formal defect or omission, or making any other change herein which,
in the written opinion of counsel to the Trustee is not to the prejudice of the
Series 1994 Bondholders), without the concurring written consent of the
Bondholders and the Trustee has and may exercise, by right of subrogation to the
Issuer, all rights
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and remedies of the Issuer provided for in this Loan Agreement, either in its
own name or in the name of the Issuer.
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ARTICLE XII
CONSTRUCTION AND ENFORCEMENT
Section 12.01 Performance of Company's Obligations.
If the Company shall fail to keep or perform any of its obligations
as provided in this Loan Agreement, including, but not limited to, (i)
maintenance of insurance, (ii) payment of impositions, (iii) compliance with
legal or insurance requirements, or (iv) keeping the Project lien free, then the
Trustee, on behalf of the Issuer, may (but shall not be obligated to do so)
after the period of written notice to the Company as provided in Article IX
shall have expired, and without waiving or releasing the Company from any of its
obligations, as an additional but not exclusive remedy, make any such payment or
perform any such obligations, and all sums so paid by the Trustee and all
necessary incidental costs and expenses incurred by the Trustee in performing
such obligation, together with interest thereon, shall be paid to the Trustee on
demand, and, if not so paid by Company, Trustee shall have the same rights and
remedies as in the case of default by the Company in the payment on the Note.
Section 12.02 Governing Law.
This Loan Agreement shall be construed and enforced in accordance
with the laws of the State of Nebraska. Whenever in this Loan Agreement it is
provided that either party shall or will make any payment or perform or refrain
from performing any act or obligation, each such provision shall, even though
not so expressed, be construed as an express covenant to make such payment or to
perform or not to perform, as the case may be, such act or obligation.
Section 12.03 No Pecuniary Liability of the Issuer.
This Loan Agreement is entered into under and pursuant to the
provisions of the Act, and no provision hereof shall be construed so as to give
rise to a pecuniary liability of the Issuer or a charge against its general
credit or taxing powers. All obligations of the Issuer arising herefrom are
limited to the proper application of the proceeds of the sale of the Series 1994
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Bonds and the payments on the Note and the other funds received by it in
connection herewith.
Section 12.04 Assignment of Note; Company Unconditionally Obligated.
All rights of the Issuer hereunder (except the right to receive
payments, if any, under Section 4.04, Section 7.06, Section 7.08 and Article IX,
and the right to expenses and attorneys' fees under Article IX hereof) are to be
assigned, pledged, mortgaged and transferred to the Trustee as security for the
Series 1994 Bonds, but subject to the Company's rights hereunder. The rights of
the Trustee or any party or parties on behalf of whom the Trustee is acting
(including specifically, but without limitation, the right to receive the
principal and interest payments on the Note and other sums to be paid hereunder)
shall not be subject to any abatement, defense, set off, counterclaim or
recoupment whatsoever, whether arising by reason of any costs, event or
circumstance referred to in Section 4.05 hereof, any failure or defect in title,
or out of any breach of any obligation of the Issuer hereunder or by reason of
any other indebtedness or liability at any time owing by the Issuer to the
Company, it being the intent hereof that the Company shall be absolutely and
unconditionally obligated to pay all payments on the Note and other sums
provided hereunder to the Trustee.
Section 12.05 No Rights to Set-Off.
Company agrees that so long as any Series 1994 Bonds are outstanding
the Company shall have no right to set-off or reduce or xxxxx its payments on
the Note or other payments hereunder as a result of a default by the Issuer.
Section 12.06 Delegation of Duties.
The parties agree that under the terms of this Loan Agreement, the
Issuer has delegated certain of its duties hereunder to the Company and to the
Trustee. The fact of such delegation shall be deemed sufficient compliance by
the Issuer to satisfy the duties so delegated and the Issuer shall not be liable
in any way by reason of acts done or omitted by the Company, the Trustee or any
of their employees or agents. The Issuer shall have the right
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at all times to act in reliance upon the authorization, representation or
certification of the Company or the Trustee.
Section 12.07 Reference to Series 1994 Bonds Ineffective After
Series 1994 Bonds Paid.
Upon payment in full of the Series 1994 Bonds (or provision for
payment thereof having been made in accordance with the provisions of the Trust
Indenture), all references in this Loan Agreement to the Series 1994 Bonds, the
Trustee and the Bondholders shall be ineffective and the Trustee Bondholders
shall thereafter have no rights hereunder, saving and excepting those that shall
have theretofore vested.
Section 12.08 Severability.
In case any section or provision of this Loan Agreement, or in case
any covenant, stipulation, obligation, agreement, act or action or part thereof,
made, assumed, entered into or taken under this Loan Agreement, or any
application thereof, is for any reason held to be illegal or invalid, or is at
any time inoperable by reason of any law or actions thereunder, such illegality,
invalidity or inoperability shall not affect the remainder thereof or any other
section or provision of this Loan Agreement or any other covenant stipulation,
obligation, agreement, act or action, or part thereof, made, assumed, entered
into or taken under this Loan Agreement which shall at the time be construed and
enforced as if such illegal, invalid or inoperable portion were not contained
therein, nor shall such illegality, invalidity or inoperability or any
application thereof affect any legal, valid or operable application thereof from
time to time, and each such section, provision, covenant, stipulation,
obligation, agreement, act or action, or part thereof, shall be deemed to be
effective, operative, made, entered into or taken in the manner and to the full
extent from time to time permitted by law.
Section 12.09 Benefit of Bondholders.
This Loan Agreement is executed in part to induce the purchase by
the Bondholders of the Series 1994 Bonds to be issued by the Issuer to finance
the cost of the Project, and accordingly all covenants and agreements on the
part of the Company and the
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Issuer and the pledge of revenues and income granted and obtained as set forth
in this Loan Agreement are hereby declared to be for the benefit of the
registered owner from time to time of the Series 1994 Bonds issued by the Issuer
to finance the cost of the Project and persons claiming through such registered
owners.
Section 12.10 Further Limitations.
Anything in this Loan Agreement to the contrary notwithstanding, it
is expressly understood and agreed by the parties hereto that:
(a) The Issuer may rely conclusively on the truth and accuracy of any
certificate, opinion, notice or other instrument furnished to the Issuer by the
Trustee, Bondholders or the Company as to the existence of a fact or state of
affairs required hereunder to be noticed by the Issuer.
(b) The Issuer shall not be under any obligation to perform any record
keeping or to provide any legal service, it being understood that services shall
be performed or provided for by the Trustee, Bondholders or the Company.
(c) None of the provisions of this Loan Agreement shall require the Issuer
to expend or risk its own funds or otherwise endure financial liability in the
performance of any of its duties or in the exercise of any of its rights
hereunder, unless it shall first have been adequately indemnified to its
satisfaction against the costs, expenses and liabilities which may be incurred
thereby.
ARTICLE XIII
MISCELLANEOUS
Section 13.01 Access.
Whenever in this Loan Agreement the Issuer or the Trustee is given
the right of inspection of or entry into or upon the Project or any part
thereof, it is understood and agreed that such inspection or entry shall be
performed at reasonable times and in a reasonable manner so as not to unduly
interfere with the business operations of the Company carried on therein.
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Section 13.02 Binding Effect.
This Loan Agreement shall inure to the benefit of and shall be
binding upon the Issuer, the Company and their respective successors and
assigns, subject, however, to the limitations contained in Sections 7.06, 8.01,
8.02 and 12.07 hereof.
Section 13.03 Counterparts.
This Loan Agreement may be executed in several counterparts, each of
which shall be regarded as an original and all of which shall constitute but one
and the same Loan Agreement.
Section 13.04 Notices.
Any notice, demand, certificate, request, instrument or other
communication authorized or required by this Loan Agreement shall be deemed to
have been sufficiently given or filed for all purposes of this Loan Agreement if
and when mailed by registered mail, return receipt requested, postage prepaid,
addressed as follows:
IF TO THE ISSUER: Nebraska Investment Finance Authority
0000 "X" Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
IF TO THE BORROWER: Transcrypt International, Ltd.
0000 Xxxxx 00xx Xxxxxx
Xxxxxxx, XX 00000
IF TO THE TRUSTEE: Norwest Bank Nebraska, N.A.
0000 Xxxxxxx Xxxxxx, Xxx 0000
Xxxxx, XX 00000
Any person may, by notice given hereunder, specify any further or
different addresses to which subsequent notices, certificates, request or other
communications shall be sent.
Section 13.05 Acceptance and Acknowledgment of the Trust Indenture.
The Company hereby agrees to the terms and conditions of the Trust
Indenture, including without limitation, such provisions
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therein as provide for duties and responsibilities, including payment of certain
fees and expenses, of the Company and the Company specifically accepts such
duties and responsibilities.
IN WITNESS WHEREOF, the Nebraska Investment Finance Authority, being
hereunto duly authorized by a valid and subsisting Resolution duly adopted, has
caused this Loan Agreement to be executed and delivered in its name and on its
behalf under its seal by its officer thereunder duly authorized, and Company has
caused this Loan Agreement to be executed and delivered in its name and on its
behalf by its officers thereunder duly authorized, all as of the date set forth
on the cover page hereof.
The Nebraska Investment
Finance Authority
By:_____________________________
Executive Director
Transcrypt International, Ltd.,
a Nebraska limited partnership
By: Transcrypt International,
Inc., General Partner
By:_____________________________
Its Chairman
The Trustee hereby accepts assignment of this Loan Agreement
pursuant to the Trust Indenture and agrees to the terms and conditions hereof.
NORWEST BANK, NEBRASKA,
NATIONAL ASSOCIATION, Trustee
By: ________________________________
Its: ___________________________
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EXHIBIT A
Legal Description
Xxx 0, Xxxxxxxxx Xxxxxxxxx 0xx Xxxxxxxx, Xxxxxxx,
Xxxxxxxxx Xxxxxx, Nebraska
Description of Project
Manufacturing facility to be constructed in accordance with the standard
form of Agreement between Owner and Contractor dated October 21, 1993,
between Company and Xxxx Xxxx Construction Co., Inc., as amended.
A-1
65
EXHIBIT B
Note
$850,000 January 15, 1994
FOR VALUE RECEIVED, the undersigned Transcrypt International, Ltd.,
Lincoln, Nebraska, a Nebraska limited partnership ("Company"), hereby promises
to pay to The Nebraska Investment Finance Authority ("Issuer"), or its assigns,
at the principal banking office of Norwest Bank Nebraska, N.A., Omaha, Nebraska,
the principal sum of Eight Hundred Fifty Thousand Dollars ($850,000).
Principal and interest payments on this Promissory Note shall be in
the amount necessary to pay principal and interest, as the same fall due, on
Issuer's Industrial Development Revenue Bonds (Transcrypt International, Ltd.
Project), Series 1994 (the "Series 1994 Bonds"), issued pursuant to a Trust
Indenture dated as of January 15, 1994 (the "Indenture"), by and between Issuer
and Norwest Bank Nebraska, N.A., Omaha, Nebraska, as Trustee (the "Trustee").
Interest on this Note shall be payable on April 15, 1994, and
quarterly thereafter on July 15, October 15, January 15 and April 15 of each
year. Principal on this Note shall be payable on January 15, 2004 and shall bear
interest from the date of this Note at the rate of 6.25% per annum, computed on
the basis of a 360 day year consisting of 12 thirty day months.
As provided in Section 2.11 of the Indenture, in the Event of a
Determination of Taxability, the outstanding principal amount due on the Note
shall bear interest at a rate of eight and one/fourth percent (8.25%) per annum
from and after the Taxable Date, all as defined in the Indenture.
This Note is issued pursuant to and is secured by a Loan Agreement
of even date herewith between Company and Issuer (the "Loan Agreement") wherein,
among other things, the Issuer has agreed to loan to the Company and the Company
has agreed to borrow from the Issuer the proceeds derived by Issuer from the
sale of the Series 1994 Bonds. The Bonds are issued pursuant to the Indenture.
B-1
66
This Note is also secured by a Deed of Trust and Construction Security Agreement
from Company to Trustee dated as of the date of the Note.
Upon the occurrence of any Event of Default as described in the Loan
Agreement, all unpaid principal and interest of this Note may be declared to be
forthwith due and payable if and in the manner and with the effect provided in
the Loan Agreement. Failure to exercise this right shall not constitute a waiver
of the right to exercise the same in the event of any subsequent occurrence of
such an event of default. If this Note shall be placed in the hands of an
attorney or attorneys for collection, Company agrees to pay in addition to the
amount due hereon, the reasonable costs and expenses of collection, including
reasonable attorney's fees.
Company may prepay the Note in whole or in part at any time, or from
time to time at a prepayment price equal to the redemption price for any Series
1994 Bonds. Prepayments shall be applied first to interest, with the remainder
to principal. Company shall prepay the Note in full following damage or
destruction of the Project if Company elects not to repair or reconstruct the
Project as provided in the Indenture or in the event of a taking in condemnation
of the Project to the extent it cannot be reasonably replaced or restored as
provided in the Loan Agreement and in the Indenture.
The liability of Company and of any guarantor of the Note or any
successor, assign or personal representative of any of the foregoing to any
person or entity under this Note is joint and several, absolute and irrevocable,
and shall not be limited to Company's interest in the Project and the Loan
Agreement, and any person or entity shall not be required to look exclusively
thereto or to the Deed of Trust for payment of all obligations arising out of
this Note or any other agreement securing the obligations of the Company or the
Series 1994 Bonds.
All parties to this Note, whether principal, surety, guarantor or
endorser, hereby waive presentment for payment, demand, protest, notice of
protest and notice of dishonor.
Signed as of the 15th day of January, 1994.
B-2
67
Transcrypt International, Ltd.,
a Nebraska limited partnership
By: Transcrypt International,
Inc., General Partner
By:_____________________________
Its Chairman
B-3
68
FOR VALUE RECEIVED, the Nebraska Investment Finance Authority,
hereby assigns all of its right, title and interest in and to the above
Promissory Note, dated January 15, 1994, to Norwest Bank Nebraska, N.A., Omaha,
Nebraska, as Trustee, or to its successor or successors as Trustee, under that
certain Indenture of Trust, dated January 15, 1994, by and between the
undersigned and said Trustee. This assignment is made without recourse.
DATED as of January 15, 1994
Nebraska Investment Finance
Authority
By:_____________________________
Its Executive Director
B-4
69
EXHIBIT C
Outstanding Industrial Development Bonds
None
X-0
00
XXXXXXX X
Xxxxxxxxx Xxxxxxxxxxxx
Xxxx
X-0
