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Exhibit 10.38 Loan Agreement
THE XXXXXX COUNTY INDUSTRIAL FACILITIES
AND POLLUTION CONTROL FINANCING AUTHORITY
and
XXXXXX-XXXXX, INC.
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LOAN AGREEMENT
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Dated as of June 1, 1997
Relating to
$7,000,000
Industrial Development Revenue Bonds
(Xxxxxx-Xxxxx, Inc. Project)
Series 1997
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All right, title and interest of The Xxxxxx County Industrial Facilities and
Pollution Control Financing Authority (the "Issuer") in this Loan Agreement have
been pledged and assigned to Norwest Bank Minnesota, National Association, as
Trustee under an Indenture of Trust dated as of June 1, 1997, between the Issuer
and the Trustee.
TABLE OF CONTENTS
(This Table of Contents is not a part of the Loan Agreement and is only for
convenience of reference.)
Parties......................................................................1
Recitals.....................................................................1
ARTICLE I
DEFINITIONS
Section 1.1. Definitions.................................................. 2
Section 1.2. Use of Words and Phrases..................................... 4
ARTICLE II
REPRESENTATIONS
Section 2.1. Representations and Warranties of the Issuer................. 4
Section 2.2. Representations by Company................................... 6
ARTICLE III
THE PROJECT
Section 3.1. Loan of Proceeds............................................. 7
Section 3.2. Agreement to Acquire, Construct and Equip Project............ 7
Section 3.3. Agreement to Issue Bonds..................................... 8
Section 3.4. Establishment of Completion Date............................. 8
Section 3.5. Reserved..................................................... 8
Section 3.6. Limitation of Issuer's Liability............................. 8
Section 3.7. Disclaimer of Warranties..................................... 8
Section 3.8. Taxes, Other Governmental Charges, Utility Charges........... 9
Section 3.9. Insurance.................................................... 9
Section 3.10. Maintenance of the Project................................... 9
ARTICLE IV
PAYMENT PROVISIONS
Section 4.1. Repayment of Bonds and Payment of Other Amounts Payable...... 9
Section 4.2. No Defense or Set-off -- Unconditional Obligation............ 11
Section 4.3. Assignment of Issuer's Rights................................ 11
Section 4.4. Letter of Credit............................................. 11
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ARTICLE V
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 5.1. Parties to Give Notice....................................... 12
Section 5.2. Damage and Destruction....................................... 12
Section 5.3. Condemnation and Loss of Title............................... 12
ARTICLE VI
SPECIAL COVENANTS AND AGREEMENTS
Section 6.1. Maintenance of Corporate Existence........................... 13
Section 6.2. Financial Reports............................................ 13
Section 6.3. Project List................................................. 13
Section 6.4. Inspection of Project........................................ 13
Section 6.5. Use of Proceeds; Other Matters with Respect to Project,
Bonds and Tax Exemption...................................... 14
Section 6.6. Indemnification by Company................................... 15
Section 6.7. Qualification of Company in North Carolina................... 17
Section 6.8. Permits or Licenses.......................................... 17
Section 6.9. Issuer's and Trustee's Access to Project..................... 17
Section 6.10. Arbitrage Covenant........................................... 17
Section 6.11. Reference to Bonds Ineffective after Bonds Paid.............. 17
Section 6.12. Notification of a Bankruptcy Filing or Event of Default...... 18
Section 6.13. Obligations Under Indenture.................................. 18
Section 6.14. Undertaking to Provide Continuing Disclosure................. 18
ARTICLE VII
ASSIGNMENT, LEASING AND SELLING
Section 7.1. Conditions................................................... 18
Section 7.2. Instrument Furnished to Trustee.............................. 18
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
Section 8.1. Events of Default............................................ 19
Section 8.2. Force Majeure................................................ 19
Section 8.3. Remedies on Default.......................................... 20
Section 8.4. No Remedy Exclusive.......................................... 20
Section 8.5. Agreement to Pay Attorneys' Fees and Expenses................ 21
Section 8.6. Waiver of Breach............................................. 21
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ARTICLE IX
REDEMPTION OF BONDS
Section 9.1. Optional Redemption of Bonds................................. 21
Section 9.2. Extraordinary Optional Redemption of Bonds................... 21
Section 9.3. Mandatory Prepayment of Bonds Upon a Determination of
Taxability................................................... 22
Section 9.4. Mandatory Prepayment of Bonds Upon Cessation of Operation.... 23
Section 9.5. Amounts Payable by Company................................... 23
Section 9.6. Procedure for Exercise of Options............................ 24
ARTICLE X
MISCELLANEOUS
Section 10.1. Notices...................................................... 24
Section 10.2. Severability................................................. 26
Section 10.3. Execution of Counterparts.................................... 26
Section 10.4. Amounts Remaining in Bond Fund............................... 26
Section 10.5. Amendments, Changes and Modifications........................ 26
Section 10.6. Governing Law................................................ 26
Section 10.7. Authorized Company Representative............................ 26
Section 10.8. Term of the Agreement........................................ 26
Section 10.9. No Personal Liability........................................ 27
Section 10.10.Parties in Interest.......................................... 27
Signatures and Seals........................................................28
Receipt.....................................................................29
Exhibit A -- Description of Project.........................................30
Exhibit B -- Form of Promissory Note........................................31
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LOAN AGREEMENT
This Loan Agreement, dated as of June 1, 1997, by and between THE XXXXXX
COUNTY INDUSTRIAL FACILITIES AND POLLUTION CONTROL FINANCING AUTHORITY, a
political subdivision and body corporate and politic of the State of North
Carolina (the "Issuer"), and XXXXXX-XXXXX, INC., a Delaware corporation
organized and existing under the laws of the State of Delaware (the "Company");
W I T N E S S E T H :
WHEREAS, the Industrial and Pollution Control Facilities Financing Act,
Chapter 159C of the General Statutes of North Carolina, as amended (the "Act"),
authorizes the creation of industrial facilities and pollution control financing
authorities by the several counties in North Carolina and empowers such
authorities to acquire, construct, own, repair, maintain, extend, improve,
rehabilitate, renovate, furnish, equip and sell, lease, exchange, transfer or
otherwise dispose of industrial or manufacturing facilities to the end that such
authorities may be able to promote the right to gainful employment opportunity
and private industry and thereby promote the general welfare of the inhabitants
of North Carolina by exercising such powers to aid in financing industrial or
manufacturing facilities for the purpose of alleviating unemployment or raising
below average manufacturing wages and further authorizes such authorities to
loan to others the proceeds of bonds issued for the purpose of paying for all or
any part of an industrial or manufacturing facility, to mortgage and pledge any
or all of such facilities, whether then owned or thereafter acquired, as
security for the payment of the principal of, premium, if any, and interest on
any such bonds and any agreements made in connection therewith and to pledge or
assign the revenues and receipts from such facilities or loan or from any other
source to the payment of such bonds; and
WHEREAS, the Issuer has been duly organized pursuant to the Act; and
WHEREAS, in order to further the purposes of the Act, the Issuer proposes
to reimburse the Company for the cost of construction of a 156,000 square foot
expansion to the Company's existing facility, and the acquisition and
installation therein of equipment for the manufacture of building products (the
"Project") in Xxxxxx County, North Carolina, which constitutes an industrial
project under the Act, and to obtain the funds therefor by the issuance of its
Bonds (as hereinafter defined) under an Indenture of Trust securing such Bonds,
between the Issuer and Norwest Bank Minnesota, National Association,
Minneapolis, Minnesota, as Trustee, dated as of the date hereof (the
"Indenture"); and
WHEREAS, the Issuer proposes to loan the proceeds from the sale of the
Bonds, as hereinafter defined, to the Company to acquire, construct and equip
the Project upon the terms and conditions hereinafter set forth; and
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WHEREAS, the Company and Branch Banking and Trust Company will enter into
a Reimbursement Agreement (the "Reimbursement Agreement") dated as of the date
hereof pursuant to which the Bank will issue an irrevocable letter of credit in
an amount not to exceed $7,466,666 to the Trustee at the request and for the
account of the Company upon the terms set forth in the Reimbursement Agreement;
and
WHEREAS, it has been determined that the financing of the acquisition,
construction and installing of the Project will require the issuance, sale and
delivery by the Issuer of a series of bonds in the aggregate principal amount of
Seven Million and no/100 Dollars ($7,000,000) (the "Bonds"); and
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants herein made, and subject to the conditions herein set forth, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. In addition to the words and terms elsewhere
defined in this Agreement or in the Indenture, the following words and terms as
used in this Agreement shall have the following meanings unless the context or
use indicates another or different meaning:
"Agreement" shall mean this Loan Agreement and any amendments and
supplements hereto.
"Authorized Company Representative" shall mean the person or persons at
the time designated to act on behalf of the Company, such designation in each
case to be evidenced by a certificate furnished to the Issuer and the Trustee
containing the specimen signature of such person or persons and signed on behalf
of the Company by its President, any Vice President, Treasurer or Assistant
Treasurer, or Secretary or Assistant Secretary. Such certificate may designate
an alternate or alternates.
"Bond Counsel" shall mean initially Hunton & Xxxxxxxx, and any other firm
of nationally recognized municipal bond counsel selected by the Company and
acceptable to the Issuer and the Trustee.
"Bond Fund" shall mean the fund by that name created and established in
Section 501 of the Indenture.
"Bonds" shall mean The Xxxxxx County Industrial Facilities and Pollution
Control Financing Authority Industrial Development Revenue Bonds (Xxxxxx-Xxxxx,
Inc. Project), Series 1997, in the aggregate principal amount of $7,000,000,
issued under and secured by the Indenture, and any Additional Bonds issued under
Section 213 of the Indenture.
"Closing Date" shall mean the date on which the Bonds are issued and
delivered.
"Company" shall mean Xxxxxx-Xxxxx, Inc., a corporation organized and
operating under the laws of the State of North Carolina, and its permitted
successors and assigns under this Agreement.
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"Conversion Date" shall mean the date specified by the Company pursuant to
Section 202(d) of the Indenture, on which the variable rate feature borne by the
Bonds shall be terminated and the Bonds shall thereafter bear interest at a
fixed rate.
"Event of Default" shall mean any event of default specified in Section
8.1 hereof.
"Indenture" shall mean the Indenture of Trust dated as of June 1, 1997, by
and between Issuer and Trustee, securing the Bonds, and any amendments and
supplements thereto.
"Issuer" shall mean The Xxxxxx County Industrial Facilities and Pollution
Control Financing Authority, a political subdivision and a body corporate and
politic of the State of North Carolina and its successors and assigns.
"Letter of Credit" shall mean the irrevocable letter of credit in an
amount not to exceed $7,466,666 dated the date of the issuance of the Bonds and
issued by the Bank to the Trustee at the request and for the account of the
Company pursuant to the Reimbursement Agreement, including any permitted
amendments thereto and any renewals or substitutes therefor, or any Substitute
Letter of Credit.
"LGC" shall mean the North Carolina Local Government Commission within the
North Carolina Department of State Treasurer.
"Net Proceeds", when used with respect to any insurance recovery or
condemnation award with respect to the Project, shall mean the gross proceeds
from such insurance recovery or condemnation award less payment of attorneys'
fees, fees and expenses of the Trustee and all other expenses properly incurred
in the collection of such gross proceeds.
"Note" shall mean the promissory note of the Company in the principal
amount of $7,000,000, dated June ___, 1997, in the form attached hereto as
Exhibit B, issued pursuant hereto and delivered to the Issuer as consideration
for the loan of the proceeds of the Bonds for the undertaking of the Project,
and any amendment or supplement thereto or substitution therefor.
"Payment of the Bonds" shall mean payment in full of principal of and
interest and premium, if any, on the Bonds, or provision for such payment
sufficient to discharge the Indenture.
"Project" shall mean the industrial manufacturing facility to be
constructed by the Company with the proceeds of the Bonds in Xxxxxx County,
North Carolina, all as more particularly described in Exhibit A attached to this
Loan Agreement.
"Reimbursement Agreement" shall mean the Reimbursement Agreement dated as
of the date of this Loan Agreement between the Company and the Bank, including
any supplements or amendments thereto, and any similar agreement between the
Company and the issuer of a Substitute Letter of Credit.
"Related Person" shall mean a "related person" within the meaning of
Section 147(a)(3) of the Code.
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"Substantial User" shall mean, with respect to any "facilities" (as the
term "facilities" is used in Section 144(a) of the Code), a "substantial user"
of such "facilities" within the meaning of Section 147(a) of the Code.
"Tax Regulations" shall mean the applicable treasury regulations
promulgated under the Code or under Section 103 of the Internal Revenue Code of
1954, as amended, whether at the time proposed, temporary, final or otherwise.
"Trustee" shall mean Norwest Bank Minnesota, National Association,
Minneapolis, Minnesota, a national banking corporation or association, and its
successor or successors.
Section 1.2. Use of Words and Phrases. "Herein," "hereby," "hereunder,"
"hereof," "hereinabove," "hereinafter," and other equivalent words and phrases
refer to this Agreement and not solely to the particular portion thereof in
which any such word is used. The definitions set forth in Section 1.1 hereof
include both singular and plural. Whenever used herein, any pronoun shall be
deemed to include both singular and plural and to cover all genders. All
capitalized terms used but not defined herein shall have the meaning given to
them in the Indenture.
ARTICLE II
REPRESENTATIONS
Section 2.1. Representations and Warranties of the Issuer. The Issuer
makes the following representations as the basis for the undertakings herein
contained:
(a) The Issuer is duly organized, existing and in good standing
under the Act.
(b) The Issuer has the power to issue bonds for the purpose of
paying the costs of the acquisition, construction and installation of the
Project from the proceeds of the sale of the Bonds and to loan the Company the
proceeds from the sale of the Bonds pursuant to the provisions of this Loan
Agreement, such loan being in furtherance of the purposes for which the Issuer
was organized.
(c) The Issuer proposes to issue its Bonds in the aggregate
principal amount of $7,000,000 to provide amounts necessary to reimburse the
Company for the Cost of the Project under the Indenture pursuant to which the
Issuer's interest in this Loan Agreement and the revenues and receipts
therefrom, including the Note and the payments thereon by the Company, will be
assigned and pledged by the Issuer to the Trustee as security for payment of the
principal of, premium, if any, and interest on the Bonds.
(d) The Issuer has the power to enter into this Loan Agreement and
the Indenture and to carry out its obligations hereunder and thereunder and to
issue the Bonds to finance the Cost of the Project; by proper action has duly
authorized the execution and delivery of this Loan Agreement and the Indenture,
the performance of its obligations hereunder and thereunder and the issuance of
the Bonds; and, simultaneously with the execution and delivery of this Loan
Agreement, has duly executed and delivered the Indenture and issued the Bonds.
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(e) The Issuer hereby finds that the financing of the Project serves
the purposes of the Act.
(f) The Issuer is not in default in the payment of the principal of
or interest on any of its indebtedness for borrowed money and is not in default
under any instrument under or subject to which any indebtedness for borrowed
money has been incurred, and no event has occurred and is continuing under the
provisions of any such instrument that with the lapse of time or the giving of
notice, or both, would constitute an event of default thereunder.
(g) The Issuer is not, to the knowledge of its officers, (1) in
violation of the resolution creating it or any existing law, rule or regulation
applicable to it or (2) in default under any indenture, mortgage, deed of trust,
lien, lease, contract, note, order, judgment, decree or other agreement,
instrument or restriction of any kind by which it or any of its assets are or
may be bound or affected. To the best of Issuer's knowledge, the execution and
delivery by the Issuer of this Loan Agreement, the Indenture and the Bonds and
compliance with the terms and conditions hereof and thereof will not conflict
with or result in the breach of or constitute a default under any of the above
described instruments or other restrictions.
(h) To the best of Issuer's knowledge, no further approval, consent
or withholding of objection on the part of any Federal, state or local
regulatory body, is required in connection with (1) the execution, issuance,
sale and delivery of the Bonds by the Issuer or (2) the execution or delivery of
or compliance by the Issuer with the terms and conditions of this Loan Agreement
and the Indenture, or (3) the assignment by the Issuer of its rights under the
Loan Agreement and the Note. To the best of Issuer's knowledge, the consummation
by the Issuer of the transactions set forth in the manner and under the terms
and conditions as provided herein will comply with all applicable state, local
or Federal laws and any rules and regulations promulgated thereunder by any
regulatory authority or agency.
(i) To the best of Issuer's knowledge, no litigation, inquiry or
investigation of any kind in or by any judicial or administrative court or
agency is pending or threatened against the Issuer with respect to (1) the
organization and existence of the Issuer, (2) its authority to execute or
deliver this Loan Agreement, the Indenture or the Bonds, (3) the validity or
enforceability of this Loan Agreement, the Indenture or the Bonds, or the
transactions contemplated hereby or thereby, (4) the title of any officer of the
Issuer who executed this Loan Agreement, the Indenture or the Bonds, or (5) any
authority or proceedings related to the execution and delivery of this Loan
Agreement, the Indenture or the Bonds, on behalf of the Issuer, and no such
authority or proceedings have been repealed, revoked, rescinded or amended but
are in full force and effect.
(j) The Issuer acknowledges that the Company has acquired,
constructed and equipped the Project in the manner determined by the Company,
without any responsibility or liability of the Issuer therefore.
(k) Neither this Loan Agreement, the Note and the payments thereon
by the Company nor any of the revenues to be received hereunder or thereunder
have been pledged or hypothecated by the Issuer in any manner or for any purpose
other than as provided in the Indenture as security for the payment of the
Bonds.
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Section 2.2. Representations by Company. The Company makes the following
representations as the basis for its undertakings hereunder:
(a) The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware, is qualified to do
business in North Carolina, has the power to enter into this Agreement and the
transactions contemplated hereby and to perform its obligations hereunder and
has duly authorized the execution and delivery of this Agreement and the
performance of its obligations hereunder.
(b) The execution and delivery of this Agreement and the Note and
the performance by the Company of its obligations hereunder do not and will not
(1) conflict with, or constitute a breach or result in a violation of, its
articles of incorporation or bylaws, (2) constitute a default under any material
agreement or other material instrument to which the Company is a party or by
which it is bound, or (3) result in a violation of any material agreement or
other material instrument to which the Company is a party or by which it is
bound or to the knowledge of the Company, any constitutional or statutory
provision or material order, rule, regulation, decree or ordinance of any court,
government or governmental authority having jurisdiction over the Company or its
property.
(c) The Company will operate the Project, or cause it to be operated
as an industrial project within the meaning of the Act and as a manufacturing
facility within the meaning of Section 144(a)(12) of the Code, until Payment of
the Bonds.
(d) The Company is not in default in the payment of the principal of
or interest on any of its material indebtedness for borrowed money and is not in
default in any material respect under any instrument under and subject to which
any indebtedness has been incurred, and no event has occurred and is continuing
under the provisions of any such agreement that, with the lapse of time or the
giving of notice, or both, would constitute an event of default thereunder.
(e) Except as described in the reports and registration statements
which the Company has filed with the Securities and Exchange Commission prior to
the date of this Agreement, there is no action, suit, proceeding or
investigation at law or in equity, or before or by any court, public board or
body, known to be pending or, to the best knowledge and information of the
Company, threatened, in which any liability of the Company is not adequately
covered by insurance or in which any judgment or order would have a material
adverse effect upon the business or assets of the Company or which would affect
its existence or authority to do business, operation of the Project, the
validity of this Agreement or the Note or the performance of the Company's
obligations hereunder or thereunder.
(f) The Company has obtained all consents, approvals, authorizations
and orders of any governmental or regulatory authority that are required to be
obtained by the Company as a condition precedent to the issuance of the Bonds or
the execution and delivery of this Agreement or the performance by the Company
of its obligations hereunder.
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(g) The Project is of the type authorized and permitted by the Act,
and the Project is substantially the same in all material respects to that
described in the notice of public hearing published on December 2, 1996.
(h) The Project has been acquired and installed and will be operated
by the Company in such manner as to conform with all applicable zoning,
planning, building, environmental and other regulations of the governmental
authorities having jurisdiction over the Project.
(i) The Company will cause all of the proceeds of the Bonds to be
applied solely to the payment of Costs of the Project (including the costs of
issuance enumerated therein).
(j) The Company has not, to its knowledge, taken action, and has not
omitted to take any action, which action or omission to take action would in any
way affect or impair the excludability of interest on the Bonds from gross
income of the Holders thereof for federal income tax purposes.
(k) The Project is located wholly within Xxxxxx County.
(l) The representations and warranties contained in Exhibit C and
made a part hereof are true and complete.
ARTICLE III
THE PROJECT
Section 3.1. Loan of Proceeds. The Issuer hereby loans the proceeds from
the sale of the Bonds pursuant to this Loan Agreement to the Company, and the
Company hereby borrows the same from the Issuer as evidenced by this Loan
Agreement and the issuance and delivery of the Note to the Issuer. The Company
covenants to use such proceeds to pay the Cost of the Project.
Section 3.2. Agreement to Acquire, Construct and Equip Project. The
Company has caused the acquisition, construction and equipping of the Project as
described in Exhibit A attached hereto, as such Exhibit A may be amended from
time to time by the Company, provided that in the case of any material change in
such Exhibit A there shall be filed with the Issuer and the Trustee the written
approving opinion of Bond Counsel acceptable to the Trustee to the effect that
such change shall not impair the Federal income tax exemption of interest on any
of the Bonds under Section 103 of the Code (other than interest on Bonds held by
a Substantial User of the Project or a Related Person to a Substantial User).
The Company agrees to obtain all licenses, permits and consents required for the
acquisition, construction, equipping and operation of the Project, and the
Issuer shall have no responsibility therefor.
The Company will not take any action or fail to take any action which
would adversely affect the qualification of the Project under the Act or the
exclusion of interest on the Bonds from Federal income taxation under Section
103 of the Code.
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Section 3.3. Agreement to Issue Bonds. In order to provide funds for
payment of the Cost of the Project the Issuer shall simultaneously with the
execution and delivery hereof proceed with the issuance and sale of the Bonds
bearing interest, maturing and having the other terms and provisions set forth
in the Indenture. The obligation of the Issuer to pay for the Cost of the
Project shall be limited to the proceeds in the Construction Fund derived from
the sale of the Bonds in accordance with the Indenture.
Section 3.4. Establishment of Completion Date. The Company hereby
certifies that the Project is complete, and was placed in service for federal
income tax purposes on January 1, 1996, that the Cost of the Project was
$6,860,000, that the acquisition, construction and equipping of the Project has
been completed substantially in accordance with Section 3.2 hereof, and that the
full Cost of the Project has been paid. Such certification is given without
prejudice to any rights against third parties which exist at the date hereof or
which may subsequently come into being.
Section 3.5. Reserved.
Section 3.6. Limitation of Issuer's Liability. Anything contained in this
Loan Agreement to the contrary notwithstanding, any obligation the Issuer may
incur in connection with the undertaking of the Project for the payment of money
shall not be deemed to constitute a debt or general obligation of the Issuer or
the Xxxxxx County Board of Commissioners but shall be payable solely from the
revenues and receipts derived by it from the loan of the proceeds of the sale of
the Bonds pursuant to this Loan Agreement, including payments received under the
Note and from payments pursuant to the Letter of Credit. No provision in this
Loan Agreement or any obligation herein imposed upon the Issuer, or the breach
thereof, shall constitute or give rise to or impose upon the Issuer a pecuniary
liability or a charge upon its general credit or taxing powers. No officer or
member of the Issuer shall be personally liable on this Loan Agreement.
Section 3.7. Disclaimer of Warranties. The Company recognizes that since
the Project has been acquired, constructed and equipped by the Company and by
contractors and suppliers selected by the Company in accordance with plans and
specifications prepared by architects or engineers selected by the Company, THE
ISSUER MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO
THE MERCHANTABILITY, CONDITION OR WORKMANSHIP OF ANY PART OF THE PROJECT OR ITS
SUITABILITY FOR THE COMPANY'S PURPOSES OR THE EXTENT TO WHICH PROCEEDS DERIVED
FROM THE SALE OF THE BONDS WILL PAY THE COST TO BE INCURRED IN CONNECTION
THEREWITH.
Section 3.8. Taxes, Other Governmental Charges, Utility Charges. The
Company shall pay, as the same become due, all taxes, assessments, impositions
and governmental charges of any kind whatsoever, general and specific, foreseen
and unforeseen, and all water and sewer charges that may be lawfully assessed,
levied or imposed on the payments under the Note and this Loan Agreement or with
respect to the Project. The Company shall pay as the same become due all utility
and other charges incurred in the operation, maintenance, use and occupancy of
the Project and all assessments and charges lawfully made by any governmental
body for public improvements to the Project. The Company may allow to exist any
indebtedness for any such tax, assessment, charge, levy or claim, provided any
such tax, assessment, charge, levy or claim is being contested in good faith by
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appropriate proceedings and the Company shall have established and maintained
adequate reserves for the payment of the same. Upon the request of the Issuer,
the Company shall provide the Issuer with proof of payment of all taxes and
charges as required under this Section 3.8.
Section 3.9. Insurance. The Company shall keep the Project insured against
fire and other risks to the extent usually insured against by companies owning
and operating similar property, by reputable insurance companies or, at the
Company's election, with respect to all or any element or unit of the Project,
by means of an adequate insurance fund set aside and maintained by it out of its
own earnings or in conjunction with other companies through an insurance fund,
trust or other agreement. Upon the request of the Issuer, the Company shall
provide a certificate to the Issuer indicating its insurance coverage.
Section 3.10. Maintenance of the Project. The Company shall use, maintain
and operate the Project, or cause it to be used, maintained and operated, in
good repair, in accordance with all applicable laws, rules and regulations,
subject to ordinary wear and tear and obsolescence. The Company may make
modifications, replacements and renewals of and to the Project as the Company
shall deem necessary or desirable and that do not adversely affect the value of
the Project provided that all such additions, modifications or improvements
comply with all applicable Federal, state and local codes.
ARTICLE IV
PAYMENT PROVISIONS
Section 4.1. Repayment of Bonds and Payment of Other Amounts Payable. (a)
On or before any date that interest on the Bonds is due as set forth in the
Indenture, or any date fixed for the redemption of any or all of the Bonds
pursuant to the Indenture, until the principal of and premium, if any, and
interest on the Bonds shall have been fully paid or provision for the payment
thereof shall have been made in accordance with the Indenture, the Company
covenants and agrees to pay or to cause to be paid in lawful money of the United
States of America to the Trustee for deposit in the Bond Fund, a sum equal to
the amount payable on such payment date as principal (whether at maturity, upon
redemption or otherwise) of and premium, if any, and interest on the Bonds as
provided in the Indenture and in the Note. All payments made pursuant to this
Section shall be made in immediately available funds at the principal corporate
trust office of the Trustee during normal banking hours. The Company covenants
to make all payments on the Note, as and when the same become due.
In the event that the payment of the principal of and accrued interest on
the Bonds is accelerated under Section 902 of the Indenture, the Company
covenants and agrees to pay, or cause to be paid, to the Trustee as provided
above a sum equal to all the principal of and premium, if any, and interest on
the Bonds then outstanding.
Each payment pursuant to this Section shall at all times be sufficient to
pay the total amount of principal (whether at maturity, upon redemption or
otherwise) of and premium, if any, and interest payable on the Bonds on the date
that such payment is due; provided that excess Bond Fund moneys
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held by the Trustee in the Bond Fund on such date and available to pay principal
and interest on the Bonds shall be credited against the payment due on such
date. Subject to the provisions of the next succeeding sentence, if at any time
the amount held by the Trustee in the Bond Fund should be sufficient (and remain
sufficient) to pay at the times required the principal of and premium, if any,
and interest on the Bonds then remaining unpaid, the Company shall not be
obligated to make any further payments under the provisions of this Section.
Notwithstanding the provisions of the preceding sentence, if on any date excess
Bond Fund moneys held by the Trustee in the Bond Fund are insufficient to make
the then required payments of principal (whether at maturity, upon redemption or
otherwise) of and premium, if any, and interest on the Bonds on such date, the
Company shall forthwith pay such deficiency as a payment hereunder.
(b) The Company agrees to pay the reasonable fees, charges and
expenses, including reasonable attorneys' fees, of the Trustee and any Paying
Agent relating to the Bonds, including but not limited to enforcing the
Indenture and the Loan Agreement.
(c) The Company agrees to pay the Issuer's reasonable costs
(including reasonable attorneys' fees) in connection with (i) the authorization,
issuance and sale of the Bonds; (ii) prepayment or redemption of the Bonds; and
(iii) administrative costs and expenses of the Issuer, including the fees of
attorneys, accountants, engineers, appraisers or consultants, paid or incurred
by the Issuer by reason of the Bonds being outstanding or pursuant to
requirements of this Agreement. The Company also agrees to pay the LGC's fee in
connection with its approval of the issuance of the Bonds.
(d) The Company agrees to pay to the Trustee amounts equal to the
amounts to be paid by the Trustee pursuant to Section 1201 of the Indenture,
such amounts to be paid by the Company to the Trustee on the dates such payments
pursuant to Section 1201 of the Indenture are to be made; provided, however,
that the amount of any such payment hereunder shall be reduced by the amount of
moneys available for such payment under Section 1201(a) of the Indenture.
(e) In the event the Company should fail to make, or cause to be
made, any of the payments required in this Section, 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.
Section 4.2. No Defense or Set-off -- Unconditional Obligation. The
obligations of the Company to make the payments required in Section 4.1 hereof
and to perform and observe the other agreements on its part contained herein
shall be absolute and unconditional, irrespective of any defense or any right of
set-off, recoupment or counterclaim it might otherwise have against the Issuer
or the Trustee, and the Company shall pay net during the term of this Agreement
the payments to be made as prescribed in Section 4.1 and all other payments
required hereunder free of any deductions and without abatement, diminution or
set-off; and until such time as the principal of and premium, if any, and
interest on the Bonds shall have been fully paid, or provision for the payment
thereof shall have been made in accordance with the Indenture, the Company: (i)
will not suspend or discontinue any payments provided for in Section 4.1 hereof;
(ii) will perform and observe all of its other agreements contained in this
Agreement; and (iii) except as provided in Article VIII hereof, will not
terminate this Agreement for any cause, including, without limiting the
generality of the foregoing, failure to complete the Project, the occurrence of
any act or circumstances that may constitute failure
10
of consideration, destruction of or damage to the Project, commercial
frustration of purpose, any change in the tax laws of the United States of
America or the State of North Carolina or any political subdivision of either of
them, or any failure of the Issuer or the Trustee to perform or observe any
agreement, whether express or implied, or any duty, liability or obligation
arising out of or connected with this Agreement or the Indenture.
Section 4.3. Assignment of Issuer's Rights. As security for the payment of
the Bonds, the Issuer will assign to the Trustee the Issuer's rights under this
Agreement (except for the Issuer's rights under Sections 4.1(c), 6.4, 6.6 and
8.5 hereof and any rights of the Issuer to receive notices, certificates, or
other communications hereunder or to give its consent hereunder) and the Note,
including the right to receive payments hereunder and the proceeds thereof, and
hereby directs the Company to make said payments, or to cause said payments to
be made, directly to the Trustee. The Company herewith assents to such
assignment and will make payments, or cause payments to be made, directly to the
Trustee.
Section 4.4. Letter of Credit. The Company shall provide for the payment
of amounts due under Section 4.1(a) by delivery to the Trustee on the date of
initial authentication and delivery of the Bonds of a Letter of Credit in favor
of the Trustee and for the benefit of the holders of the Bonds (other than
Company Bonds and Bank Bonds). The Company shall be entitled to provide a
Substitute Letter of Credit under certain circumstances as provided in the
Indenture. Any extension of the Letter of Credit shall be for at least one year
or, if less, the fifteenth day after the maturity date of the Bonds. The Company
agrees to cause a letter of credit to be in effect at all times with respect to
the Bonds.
EXCEPT AS RESERVED IN SECTION 4.3, THIS LOAN AGREEMENT HAS BEEN ASSIGNED
TO, AND IS SUBJECT TO A SECURITY INTEREST IN FAVOR OF NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION, AS TRUSTEE UNDER AN INDENTURE OF TRUST DATED AS OF JUNE 1,
1997, BETWEEN THE XXXXXX COUNTY INDUSTRIAL FACILITIES AND POLLUTION CONTROL
FINANCING AUTHORITY AND SUCH TRUSTEE, AS AMENDED OR SUPPLEMENTED FROM TIME TO
TIME. INFORMATION CONCERNING SUCH SECURITY INTEREST MAY BE OBTAINED FROM THE
TRUSTEE AT ITS PRINCIPAL OFFICE IN MINNEAPOLIS, MINNESOTA.
ARTICLE V
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 5.1. Parties to Give Notice. In case of any material damage
to or destruction of any part of the Project, the Company shall give prompt
notice thereof to the Issuer and the Trustee. In case of a taking of all or any
part of the Project or any right therein under the exercise of the power of
eminent domain or any loss thereof because of failure of title thereto or the
commencement of any proceedings or negotiations which might result in such a
taking or loss, the party upon which notice of such taking is served shall give
prompt notice to the other and to the Trustee. Each such notice shall describe
generally the nature and extent of such damage, destruction, taking, loss,
proceeding or negotiations.
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Section 5.2. Damage and Destruction. Unless the Company terminates this
Loan Agreement and prepays the Note pursuant to Article IX, and subject to the
terms and conditions of the Reimbursement Agreement, if all or any part of the
Project is destroyed or damaged by fire or other casualty, the Company shall be
obligated to continue to make payments required under the Note and shall
promptly replace, repair, rebuild or restore the property damaged or destroyed
to substantially its same condition as prior to such damage or destruction, with
such alterations and additions as the Company may determine and as will not
impair the capacity or character of the Project for the purpose for which it is
then being used or is intended to be used.
Section 5.3. Condemnation and Loss of Title. Unless the Company terminates
this Loan Agreement and prepays the Note pursuant to Article IX, and subject to
the terms and conditions of the Reimbursement Agreement, if before the
Completion Date title to or the temporary use of all or any part of the Project
shall be taken under the exercise of the power of eminent domain, the Company
shall be obligated to continue to make the payments required under the Note. The
Company shall cause the Net Proceeds from any such condemnation award to be
applied to the restoration of the Project affected by the taking to
substantially its same condition as prior to the exercise of such power of
eminent domain with such repairs and replacements as the Company may determine
and as will not impair the capacity or character of the Project for the purpose
for which it is then being used or is intended to be used.
ARTICLE VI
SPECIAL COVENANTS AND AGREEMENTS
Section 6.1. Maintenance of Corporate Existence. The Company agrees that
it will maintain its corporate existence and will not dissolve or otherwise
dispose of all or substantially all of its assets and will not consolidate with
or merge into another Person or permit one or more other Persons to consolidate
with or merge into it, except the Company may, without violating the foregoing,
consolidate with or merge into another corporation, or permit one or more other
corporations to consolidate with or merge into it, or transfer all or
substantially all of its assets to another corporation (and thereafter dissolve
or not dissolve as it may elect) if the corporation surviving such merger or
resulting from such consolidation, or the corporation to which all or
substantially all of the assets of the Company are transferred, as the case may
be: (i) shall be a domestic corporation organized under the laws of the United
States of America, the District of Columbia or one of the states of the United
States, and (ii) shall assume in writing all of the obligations of the Company
hereunder. Notwithstanding the foregoing, the Company may at any time permit any
wholly owned subsidiary to merge into it without violating this Section. In the
event the Company consolidates or merges with another company in accordance with
this Section it shall provide written notice of such merger or consolidation to
the Trustee and the Issuer. No transfer of all or substantially all of the
Company's assets to another Person shall relieve the Company of its obligations
hereunder unless the Company has received prior written consent of the Issuer,
the Bank and the Trustee to such transfer. The Company shall not sell or lease
the Project or any part thereof except in accordance with Article VII hereof.
Section 6.2. Financial Reports. The Company shall, within thirty (30) days
following June 30 of each year, provide a written report to the LGC, the Xxxxxx
County Finance Officer (at the
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Issuer's address) and the Issuer, indicating the principal amount of Bonds
outstanding as of June 30 of such year.
Section 6.3. Project List. The Company shall maintain at the Project site
a list setting forth in reasonable detail all items constituting the Project.
Section 6.4. Inspection of Project. The Issuer, the Trustee and their duly
authorized agents shall have the right at all reasonable times, after reasonable
notice, during normal business hours to enter upon any part of the Project and
to examine and inspect the same as may be reasonably necessary for the purpose
of determining whether the Company is in compliance with its obligations under
Section 3.10 hereof or in the event of failure of the Company to perform its
obligations under Section 3.10 hereof, and the Issuer, the Trustee and their
duly authorized agents shall also have the right at all reasonable times to
examine the books and records of the Company insofar as such books and records
relate to the installation and maintenance of the Project.
Section 6.5. Use of Proceeds; Other Matters with Respect to Project, Bonds
and Tax Exemption.
(a) Use of Proceeds; Prohibited Uses of Project, etc. Neither the
Issuer nor the Company shall cause any proceeds of the Bonds to be expended
except pursuant to the Indenture and the Reimbursement Agreement. The Company
shall not (1) requisition or otherwise allow any payment out of proceeds of the
Bonds (A) if such payment is to be used for the acquisition of any property (or
an interest therein) unless the first use of such property is pursuant to such
acquisition, provided that this clause (A) shall not apply to any building (and
the equipment purchased as a part thereof, if any,) if the "rehabilitation
expenditures", as defined in Section 147(d) of the Code, with respect to the
building equal or exceed 15% of the portion of the cost of acquiring the
building (including such equipment) financed with the proceeds of the Bonds, (B)
if as a result of such payment, 25% or more of the proceeds of the Bonds would
be considered as having been used directly or indirectly for the acquisition of
land (or an interest therein), (C) if, as a result of such payment, less than
95% of the net proceeds of the Bonds, expended at the time of such requisition
would be considered as having been used for costs of the acquisition,
construction, or reconstruction or improvement of land or property of a
character subject to the allowance for depreciation within the meaning of
Section 144(a)(1)(A) of the Code ("Qualifying Costs") or (D) if such payment is
used to pay issuance costs (including counsel fees and placement fees) of the
Bonds in excess of an amount equal to 2% of the principal amount of the Bonds;
(2) take or omit, or permit to be taken or omitted, any other action with
respect to the use of such proceeds the taking or omission of which would result
in the loss of exemption of interest on the Bonds from Federal income taxation
under Section 144 of the Code; or (3) take or omit, or permit to be taken or
omitted, any other action the taking or omission of which would cause the loss
of such exemption.
(b) Commencement of Construction; First Users. The Company hereby
represents that neither "construction" nor "acquisition" of the Project
"commenced" more than 60 days prior to "official action" of the Issuer within
the meaning of Section 142 of the Code, which took place on November 16, 1994.
No person, firm or corporation who was a Substantial User of the Project (within
the meaning described in such term under Section 144(a) of the Code) before the
date of issuance of the Bonds and who was or will be a Substantial User of the
Project following its being
13
placed in service, has received or will receive, directly or indirectly, any
proceeds from the issuance and sale of the Bonds.
(c) Economic Life of Project. The Company hereby represents that the
"average reasonably expected economic life" of the components comprising the
Project, determined pursuant to Section 147(b) of the Code, is not less than the
amount set forth in the certificates or letters of representation of the Company
delivered on the Closing Date. The weighted average maturity of the Bonds does
not exceed 120% of the remaining "average reasonably expected economic life" of
the components comprising the Project, determined pursuant to Section 147(b) of
the Code. The Company agrees that it will not make any changes in the Project
which would, at the time made, cause the "average reasonably expected economic
life" of the components of the Project, determined pursuant to Section 147(b) of
the Code, to be less than the "average reasonably expected estimated economic
life" of the components set forth in the certificates or letters of
representation of the Company delivered on the Closing Date, unless the Company
shall file with the Issuer and the Trustee an opinion of Bond Counsel that such
change to the Project will not impair the exemption of interest on the Bonds
from Federal income taxation pursuant to Section 144 of the Code.
(d) Certificate of Information; 8038 Form. The Company hereby
represents that the information contained in the certificates or letters of
representation of the Company with respect to the compliance with the
requirements of Section 103 of the Code, including the information in Form 8038
(excluding the issue number and the employer identification number of the
Issuer), filed by the Issuer with respect to the Bonds and the Project, is true
and correct in all material respects. The Company shall bear all expenses of
filling out and filing such form.
(e) 144(a)(4) Election. The Issuer hereby elects to have the
provisions of Section 144(a)(4) of the Code apply to the Bonds.
Section 6.6. Indemnification by Company. The Company shall at all times
indemnify and save harmless the Issuer, the County of Xxxxxx, the LGC, and the
Trustee from and against all liabilities, obligations, claims, damages,
penalties, causes of action, costs and expenses (including, without limitation,
reasonable counsel fees and expenses) imposed upon or incurred by or asserted
against the Issuer, the County of Xxxxxx, the LGC, or the Trustee on account of
(a) any failure of the Company to comply with any of the terms of this Agreement
or (b) any loss or damage to property or any injury to or death of any Person
pertaining to the Project or the use thereof, and shall further indemnify and
save harmless the Issuer, the LGC and the Trustee and their respective past,
present and future officers, commissioners, directors, employees and agents (the
"Indemnitees") from and against all liabilities, obligations, claims, damages,
penalties, fines, losses, reasonable costs and expenses (the "Damages")
including, without limitation:
(a) all amounts paid in settlement of any litigation commenced or
threatened against the Indemnitees, or any of them, if such settlement is
effected with the written consent of the Company;
(b) all expenses reasonably incurred in the investigation of,
preparation for or defense of any litigation, proceeding or investigation of any
nature whatsoever, commenced or threatened against the Company, the Project, or
any Indemnitees;
14
(c) any judgments, penalties, fines, damages, assessments,
indemnities or contributions; and
(d) the reasonable fees of attorneys, auditors and consultants;
provided that the Damages arise out of:
(1) any failure by the Company or its officers, partners, employees
or agents, to comply with the terms of the Loan Agreement, the Note, the
Indenture (to the extent the Indenture makes requirements of the Company
which it expressly assumes herein) or any other document to which the
Company is a party delivered in connection with the sale of the Bonds (the
"Financing Documents") and any agreements, covenants, obligations, or
prohibitions set forth herein or therein;
(2) any action, suit, claim or demand contesting or affecting the
title of the Project;
(3) any breach of any representation or warranty of the Company set
forth in the Financing Documents or any certificate or any letter of
representation delivered by the Company pursuant thereto, and any claim
that any statement, representation or warranty of the Company contains or
contained any untrue or misleading statement of material fact or omits or
omitted to state any material facts necessary to make the statements made
therein not misleading in light of the circumstances under which they were
made;
(4) any action, suit, claim, proceeding or investigation of a
judicial, legislative, administrative or regulatory nature arising from or
in connection with the financing, acquisition, installation, ownership,
operation, occupation or use of the Project; or
(5) any suit, action, administrative proceeding, enforcement action,
or governmental or private action of any kind whatsoever commenced against
the Company, the Project, or any Indemnitee which might adversely affect
the validity or enforceability of the Bonds, the Financing Documents, or
the performance by the Company or the Indemnitees of any of their
respective obligations thereunder;
provided that such indemnity shall be effective only to the extent of any loss
that may be sustained by the Indemnitees in excess of the net proceeds received
by it or them from insurance, if any, required hereunder or under any of the
Financing Documents with respect to such loss, and provided further that the
benefits of this Section shall not inure to any person other than the
Indemnitees and their successors and assigns. Nothing contained herein shall
require the Company to indemnify the Issuer for any claim or liability resulting
from the Issuer's or the LGC's willful, wrongful acts or the Trustee for any
claim or liability resulting from its negligence or its willful, wrongful acts.
The Issuer may require advance payment or assurance of payment for any fees,
expenses, or costs incurred or expected to be incurred by it in connection with
the performance of any act or thing it may be called upon to do under the term
of this Agreement. The foregoing sentence does not apply to the Issuer's
obligations set forth in Sections 3.3 or 4.3 hereof.
15
If any action, suit or proceeding is brought against any Indemnitee for
any loss or damage for which the Company is required to provide indemnification
under this Section, such Indemnitee shall promptly notify the Company and the
Company shall have the sole right and duty to assume, and shall assume, the
defense thereof, with full power to litigate, compromise or settle the same in
its sole discretion. Notwithstanding the foregoing, in the event the Indemnitee
is the Issuer or the LGC, in the event the Issuer or the LGC reasonably believes
there are defenses available to it that are not being pursued, the Issuer or the
LGC, as the case may be, may, in its sole discretion, hire independent counsel
to pursue its own defense, and the Company shall be liable for the cost of such
counsel. The obligations of the Company under this Section shall survive any
termination of this Agreement.
Section 6.7. Qualification of Company in North Carolina. The Company
agrees that throughout the term of this Agreement it will be qualified to do
business in the State of North Carolina.
Section 6.8. Permits or Licenses. In the event that it may be necessary
for the proper performance of this Agreement on the part of the Company or the
Issuer that any application or applications for any permit or license to do or
to perform certain things be made to any governmental or other agency by the
Company or the Issuer, the Company and the Issuer each shall, upon the request
of either, execute such application or applications.
Section 6.9. Issuer's and Trustee's Access to Project. The Issuer and the
Trustee shall have the right, upon appropriate prior notice to the Company, to
have reasonable access to the Project and the books and records of the Company
with respect to the Project during normal business hours for the purpose of
making examinations and inspections of the same.
Section 6.10. Arbitrage Covenant. The Issuer and the Company covenant that
no use of the proceeds of the Bonds or the earnings thereon will be made or
directed, and no other action will be taken, which would cause the Bonds to be
"arbitrage bonds" within the meaning of Section 148 of the Code. The Company
further covenants that (a) all actions with respect to the Bonds required by
Section 148(f) of the Code shall be taken, (b) it shall make the determinations
required by Section 510 of the Indenture at its own expense and promptly notify
the Trustee and the Issuer of the same, together with supporting calculations,
and (c) it shall within forty-five (45) days after the final payment, whether
upon redemption in whole or at maturity, of the Bonds, file with the Trustee,
and, at the request of the Issuer, with the Issuer, a statement signed by the
Company to the effect that the Company is then in compliance with its covenants
contained in clauses (a) and (b) of this sentence, together with supporting
calculations; provided, however, that if the Company shall furnish an opinion of
Bond Counsel to the Trustee to the effect that no further action by the Company
is required for such compliance with respect to the Bonds, the Company shall not
thereafter be required to deliver any such statements or calculations.
Notwithstanding the foregoing, the Company shall take such steps and provide
such information to the Issuer as may be required by the Issuer for it to meet
any requirements (relating to rebate or otherwise) required by the Code, the
Internal Revenue Service, or any other Federal or state government agency.
Section 6.11. Reference to Bonds Ineffective after Bonds Paid. Upon
payment of the Bonds and upon payment of all obligations under this Loan
Agreement, all references in this Loan Agreement to the Bonds and the Trustee
shall be ineffective, and neither the Trustee, the Issuer nor
16
the holders of any of the Bonds shall thereafter have any rights hereunder
except as provided in Section 6.6 hereof and except with regard to payments of
costs and expenses of the Trustee and the Issuer by the Company.
Section 6.12. Notification of a Bankruptcy Filing or Event of Default. The
Issuer and the Company shall each notify the other, the Bank, the LGC and the
Trustee within two Business Days after either of them receives notice that an
Event of Bankruptcy has occurred with respect to the Company or the Issuer, or
after either of them becomes aware that an Event of Default (as defined in
Article VIII) has occurred.
Section 6.13. Obligations Under Indenture. The Company covenants and
agrees to perform all of the obligations imposed on the Company under the
Indenture.
Section 6.14. Undertaking to Provide Continuing Disclosure.
Notwithstanding any provisions in the Indenture to the contrary, no conversion
to a Fixed Rate shall be permitted unless the Trustee, the Issuer and the
Remarketing Agent shall have received, at least two (2) Business Days prior to
the proposed Conversion Date, a copy of a continuing disclosure agreement
imposing obligations upon the Company, the Trustee or any other responsible
party to comply with the regulations of Rule 15c2-12 promulgated under the
Securities and Exchange Act of 1934, as amended ("Rule 15c2-12"), as it may be
amended or supplemented from time to time, with respect to the Bonds, together
with such disclosure documents as the Remarketing Agent shall require in order
to comply with such Rule.
ARTICLE VII
ASSIGNMENT, LEASING AND SELLING
Section 7.1. Conditions. (a) The Company's interest in this Agreement may
be assigned in whole or in part, and the Project may be leased or sold as a
whole or in part (whether a specific element or unit or an undivided interest),
by the Company, subject, however, to the condition that no assignment, lease or
sale (other than as described in Section 6.1 hereof) shall relieve the Company
from primary liability for its obligations hereunder, and from its obligation to
utilize the Project as a manufacturing facility.
(b) Notwithstanding the provisions of Section 7.1(a) above, the
Company may sell or lease the Project and assign its interest in this Agreement
in full, and may be released from all liability under this Agreement, so long as
the Trustee receives (1) consent of the Bank, the Issuer and 66-2/3% of the
Holders of the Bonds to such transfer or assignment, (2) the purchaser or
assignee agrees in writing to assume the Company's obligations hereunder and (3)
an opinion of Bond Counsel to the effect that such assignment will not have an
adverse effect on the tax-exempt status of interest on the Bonds.
Section 7.2. Instrument Furnished to Trustee. The Company shall, within
fifteen (15) days after the delivery thereof, furnish to the Issuer and the
Trustee a true and complete copy of the agreements or other documents
effectuating any such assignment, lease or sale.
17
Section 7.3. Limitation. This Agreement shall not be assigned nor shall
the Project be leased or sold, in whole or in part, except as provided in this
Article VII or in Section 6.1 hereof.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
Section 8.1. Events of Default. Each of the following events shall
constitute and is referred to in this Agreement as an "Event of Default":
(a) Failure by the Company to pay when due any payment required to
be made under Section 4.1(a) or (d) hereof, which failure shall have resulted in
an "Event of Default" under clause (a), (b) or (c) of the first paragraph of
Section 901 of the Indenture.
(b) Failure by the Company to observe and perform any covenant,
condition or agreement on its part to be observed or performed in the Loan
Agreement, other than as referred to in Section 8.1(a) above, which failure
shall continue for a period of thirty (30) days after written notice, specifying
such failure and requesting that it be remedied, is given to the Company by the
Issuer or the Trustee, unless the Issuer and the Trustee shall agree in writing
to an extension of such time prior to its expiration; provided, however, if the
failure stated in the notice cannot be corrected within the applicable period,
the Issuer and the Trustee will not unreasonably withhold their consent to an
extension of such time if corrective action is instituted by the Company within
the applicable period and is being diligently pursued.
(c) The dissolution or liquidation of the Company or the filing by
the Company of a voluntary petition in bankruptcy, or failure by the Company
promptly to lift any execution, garnishment or attachment of such consequence as
will impair its ability to carry out its obligations under this Agreement, or
the entry of an order of relief in any involuntary bankruptcy proceedings
against the Company, or an assignment by the Company for the benefit of its
creditors, or the entry by the Company into an agreement of composition with its
creditors, or the approval by a court of competent jurisdiction of a petition
applicable to the Company in any proceeding for its reorganization instituted
under the provisions of any bankruptcy act, or under any similar act which may
hereafter be enacted. The term "dissolution or liquidation of the Company," as
used in this subsection, shall not be construed to include the cessation of the
corporate existence of the Company resulting either from a merger or
consolidation of the Company into or with another corporation or a dissolution
or liquidation of the Company following a transfer of all or substantially all
of its assets as an entirety, under the conditions permitting such actions
contained in Section 6.1 hereof.
Section 8.2. Force Majeure. The provisions of Section 8.1(b) hereof are
subject to the following limitation: if by reason of acts of God; strikes,
lockouts or other industrial disturbances; acts of public enemies; orders or
other acts of any kind of the Government of the United States or of the State of
North Carolina, or any other sovereign entity or body politic, or any
department, agency, political subdivision, court or official of any of them, or
any civil or military authority; insurrections; riots; epidemics; landslides;
lightning; earthquakes, volcanoes; fires; hurricanes; tornadoes; storms; floods;
washouts; droughts; arrests; restraint of government and people; civil
disturbances; explosions, breakage or accident to machinery; partial or entire
failure of utilities; or any cause or event not reasonably within the control of
the Company, the Company is unable in whole
18
or in part to carry out any one or more of its agreements or obligations
contained herein, other than its obligations under Sections 4.1(a) and (d), 6.1,
6.2, 6.5, 9.3, 9.4 and 10.1 hereof, the Company shall not be deemed in default
by reason of not carrying out said agreement or agreements or performing said
obligation or obligations during the continuance of such inability. The Company
agrees, however, to use its best efforts to remedy with all reasonable dispatch
the cause or causes preventing it from carrying out its agreements; provided,
that the settlement of strikes, lockouts and other industrial disturbances shall
be entirely within the discretion of the Company, and the Company shall not be
required to make settlement of strikes, lockouts and other industrial
disturbances by acceding to the demands of the opposing party or parties when
such course is in the judgment of the Company unfavorable to the Company.
Section 8.3. Remedies on Default. Whenever any Event of Default hereunder
shall have happened and be continuing, any one or more of the following remedial
steps may be taken:
(a) The Issuer with the prior consent of the Trustee, or the
Trustee, may at its option, and shall, if acceleration occurs or is declared
pursuant to Section 902 of the Indenture, declare all unpaid amounts payable
under this Agreement, together with interest then due thereon, to be immediately
due and payable, whereupon the same shall become due and payable.
(b) The Issuer with the prior consent of the Trustee, or the
Trustee, may take any action at law or in equity to collect the payments then
due and thereafter to come due hereunder, or to enforce performance and
observance of any obligation, agreement or covenant of the Company under this
Agreement.
Any amounts collected pursuant to action taken under this Section shall be
applied in accordance with the Indenture.
In case any proceeding taken by the Issuer or the Trustee on account of
any Event of Default shall have been discontinued or abandoned for any reason,
or shall have been determined adversely to the Issuer or the Trustee, then and
in every case the Issuer and the Trustee shall be restored to their former
positions and rights hereunder, respectively, and all rights, remedies and
powers of the Issuer and the Trustee shall continue as though no such proceeding
has been taken.
Section 8.4. No Remedy Exclusive. No remedy conferred upon or reserved to
the Issuer or the Trustee by this 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
Agreement or now or hereafter existing at law or in equity or by statute. No
delay or omission to exercise any right or power accruing upon any Event of
Default shall impair any such right or power or shall be construed to be a
waiver thereof, but 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 the
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 required in this
Article.
Section 8.5. Agreement to Pay Attorneys' Fees and Expenses. In the event
the Company should default under any of the provisions of this Agreement and the
Issuer or the Trustee should employ attorneys or incur other expenses for the
collection of payments due hereunder or for the
19
enforcement of performance or observance of any obligation or agreement on the
part of the Company contained herein, the Company agrees that it will on demand
therefor pay to the Issuer or the Trustee, as the case may be, the reasonable
fees of such attorneys and such other reasonable expenses so incurred. In the
event the Company fails to pay such amount, the Trustee may, to the extent of
funds available under the Indenture, pay such fees and expenses.
Section 8.6. Waiver of Breach. In the event that any agreement contained
herein shall be breached by either the Company or the Issuer and such breach
shall thereafter be waived by the other party, such waiver shall be limited to
the particular breach so waived and shall not be deemed to waive any other
breach hereunder. In view of the assignment of the Issuer's rights in and under
this Agreement to the Trustee under the Indenture, the Issuer shall have no
power to waive any default hereunder by the Company without the consent of the
Trustee, and the Trustee may exercise any of the rights of the Issuer hereunder.
ARTICLE IX
REDEMPTION OF BONDS
Section 9.1. Optional Redemption of Bonds. Prior to the Conversion Date,
the Company shall have and is hereby granted the option to prepay installments
payable hereunder for the purpose of redeeming prior to maturity the Bonds, in
whole or in part, pursuant to Section 301(c) of the Indenture, but only after
receipt of prior written consent of the Bank to such prepayment. After the
Conversion Date, the Company shall have and is hereby granted the option to
prepay installments payable hereunder for the purpose of redeeming the Bonds
prior to maturity, in whole or in part, pursuant to Section 301(e) of the
Indenture.
Section 9.2. Extraordinary Optional Redemption of Bonds. The Company shall
have and is hereby granted the option to prepay installments payable hereunder
in whole for the purpose of redeeming the Bonds prior to maturity, pursuant to
Section 301(a) of the Indenture, upon the occurrence of any of the following,
but only after receipt of prior written consent from the Bank:
(a) The Project shall have been damaged or destroyed (i) to such
extent that it cannot be reasonably restored within a period of six months to
the condition thereof immediately preceding such damage or destruction, or (ii)
to such extent that the Company is thereby prevented, in the Company's judgment,
from carrying on its normal operation of the Project for a period of six months,
or (iii) to such extent that it would not be economically feasible, in the
Company's judgment, for the Company to repair the Project.
(b) Title to, or the temporary use for a period of six months or
more of, all or substantially all of the Project, or such part thereof as shall
materially interfere, in the Company's judgment, with the operation of the
Project for the purpose for which the Project is designed, shall have been 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 (including
such a taking or takings as results in the Company being thereby prevented from
carrying on its normal operation of the Project for a period of six months).
20
(c) Changes which the Company cannot reasonably control or overcome,
in the economic availability of materials, supplies, labor, equipment and other
properties and things necessary for the efficient operation of the Project shall
have occurred, or technological or other changes shall have occurred which in
the judgment of the Company, render the continued operation of the Project
uneconomic for such purposes.
(d) As a result of any changes in the Constitution of North Carolina
or the Constitution of the United States of America or of legislative or
administrative action (whether state or Federal) or by final decree, judgment or
order of any court or administrative body (whether state or Federal) entered
after the contest thereof by the Company in good faith, this Agreement shall
have become void or unenforceable or impossible of performance in accordance
with the intent and purposes of the parties as expressed in this Agreement, or
unreasonable burdens or excessive liabilities shall have been imposed on the
Company in respect to the Project, including, without limitation, Federal, state
or other ad valorem, property, income or other taxes not being imposed on the
date of this Agreement.
Section 9.3. Mandatory Prepayment of Bonds Upon a Determination of
Taxability. In the event that there shall occur a Determination of Taxability,
as hereinafter defined, the Company agrees to prepay in whole, or in part to the
extent prepayment of fewer than all of the Bonds would result in the interest
payable on the Bonds remaining Outstanding being excluded from gross income for
Federal income tax purposes, within thirty days after the occurrence of the
Determination of Taxability, the installments payable hereunder for the purpose
of redeeming the Bonds prior to maturity (including for such purpose Bonds
deemed to be paid in accordance with Article IX of the Indenture), plus accrued
interest to the redemption date, plus a premium equal to 3% of the principal
amount of Bonds to be redeemed, plus any reasonable expenses of redemption and
Trustee's and Paying Agent's reasonable fees and charges, but after the
deduction of the amounts, if any, then in the Bond Fund.
The term "Determination of Taxability" shall mean any determination,
decision or decree made in regard to Section 103 of the Code, by the
Commissioner or any District Director of the Internal Revenue Service, or, if
there is an appeal from any such determination by a Commissioner or District
Director, when a final administrative or judicial determination has been made,
or by a final decision of any court of competent jurisdiction, or the receipt by
the Trustee of an opinion of Bond Counsel, that the interest paid or payable on
any Bond is or was includable in the gross income of a holder thereof for
Federal income tax purposes (other than a Holder who is a Substantial User of
the Project or Related Person as such terms are defined in the Code and
regulations thereunder and other than a Holder who includes such interest in
gross income for purposes of any alternative minimum income tax computations).
However, no such determination, decision or decree will be considered final for
this purpose unless the Company has been given written notice and, if it is so
desired and is legally allowed, has been afforded the opportunity to contest the
same, either directly or in the name of any Holder of a Bond. Furthermore, no
opinion of Bond Counsel shall be considered final for this purpose unless the
Company has been given written notice thereof and the opportunity (but not
longer than 30 days) to provide a second opinion of Bond Counsel. In the event
the opinions provided to the Trustee conflict, the Trustee shall, at the cost of
the Company, obtain a third opinion of Bond Counsel. If the opinion of such Bond
Counsel concurs with the original opinion delivered to the Trustee, the Trustee
shall proceed with the redemption of Bonds as described above.
21
Notwithstanding the foregoing provisions, if a final determination, decision,
decree or opinion has not occurred within three (3) years after the Company
first receives written notice as described above, the Company shall prepay the
amounts payable under this Agreement on such date as is three (3) years from the
date that it first received written notice and the Trustee shall proceed with
the redemption of the Bonds as described above.
The obligation of the Company under this Section 9.3 shall survive any
termination of this Agreement.
Section 9.4. Mandatory Prepayment of Bonds Upon Cessation of Operation. In
the event of a "cessation of operation" of the Project as an "industrial project
for industry," as defined in the Act, the Company agrees to prepay the Bonds in
whole, together with accrued interest to the redemption date on the first
Interest Payment Date that is not less than 90 days after the Issuer has
notified the Company and the Bank in writing that the Company has, in the
opinion of the Issuer, ceased to operate the project as an "industrial project
for industry." A cessation of operation shall not be deemed to have occurred
until 90 days shall have elapsed after written notice has been given to the
Company and the Bank by the Issuer that operations at the Project shall have
ceased and the Company shall not have demonstrated to the satisfaction of the
Issuer that the Company has resumed the operations of the Project as an
"industrial project for industry" within the meaning of the Act or that the
Company is, in good faith, seeking to arrange resumption of an economically
reasonable operation of the Project by the Company or, if permitted under this
Loan Agreement, by an assignee or purchaser of the Project as such an
"industrial project for industry"; provided that a temporary shutdown due to a
strike or other labor dispute, lack of fuel or similar occurrence shall not be
deemed a cessation of operation.
Section 9.5. Amounts Payable by Company. (a) In the case of a prepayment
for the redemption of the Bonds in whole pursuant to Section 9.1, 9.2, 9.3 or
9.4 hereof, the amount to be prepaid by the Company hereunder (which shall fully
discharge the obligation of the Company to make payments hereunder) will be a
sum sufficient, together with other funds deposited with the Trustee and
available for such purpose, to pay (1) the principal of all Bonds then
outstanding, plus interest accrued and to accrue to the date upon which the
Bonds will be redeemed, plus premium, if any, pursuant to the Indenture, (2) all
reasonable and necessary fees and expenses of the Trustee and any Paying Agent
accrued and to accrue through final payment of the Bonds, and (3) all other
liabilities of the Company accrued and to accrue under this Agreement.
(b) In case of a prepayment for the redemption of the Bonds in part
pursuant to Section 9.1 hereof, the amount to be prepaid by the Company
hereunder will be a sum sufficient, together with other funds deposited with the
Trustee and available for such purpose, to pay (1) the principal of all Bonds
then being redeemed, plus interest accrued and to accrue to the date upon which
the Bonds will be redeemed, plus premium, if any, pursuant to the Indenture, (2)
all reasonable and necessary fees and expenses of the Trustee and any Paying
Agent accrued and to accrue in connection with said redemption, and (3) all
other liabilities of the Company accrued or to accrue under this Agreement in
connection with said redemption.
(c) The Company agrees to and shall pay to the Trustee any amount
required to be paid by it under this Section 9.5, and the Trustee shall be
directed to use the moneys so paid to it to
22
redeem the Bonds pursuant to the provisions of the Indenture. Any amount
required to be paid under this Section 9.5, shall not be deemed to be paid until
it is received by the Trustee.
Section 9.6. Procedure for Exercise of Options. To exercise an option
granted in Section 9.1 or 9.2 hereof, the Company shall give written notice to
the Issuer and the Trustee, which shall specify therein the date upon which
redemption of the Bonds will be made and the applicable redemption provisions of
the Indenture. Such date shall be not less than 45 nor more than 90 days from
the date the notice is given. Upon receipt of such notice, the Issuer shall
forthwith take all steps (other than the payment of the money required for such
redemption) necessary under the applicable provisions of the Indenture to effect
redemption of all or part, as the case may be, of the Bonds on the earliest
practicable date thereafter on which such redemption may be made under the
applicable provisions of the Indenture.
ARTICLE X
MISCELLANEOUS
Section 10.1. Notices. Except as otherwise provided in this Agreement, all
notices, certificates or other communications shall be sufficiently given and
shall be deemed given when mailed by registered or certified mail, postage
prepaid, to the Issuer, the Company, the Trustee, the Bank, or the Remarketing
Agent. Facsimiles of each notice, certificate or other communication given
hereunder to the Company shall, in addition to mailing, be telecopied to the
Company, and copies of each notice, certificate or other communication given
hereunder by or to the Company shall be mailed by registered or certified mail,
postage prepaid, to the Trustee and the Bank; provided, however, that the
effectiveness of any such notice shall not be affected by the failure to
telecopy any such facsimiles or to send any such copies. Notices, certificates
or other communications shall be sent to the following addresses:
Company: Xxxxxx-Xxxxx, Inc.
4501 Circle 75 Parkway, Suite F-6300
Xxxxxxx, Xxxxxxx 00000
Attention: President
Bank: Branch Banking and Trust Company
Xxxx Xxxxxx Xxx 0000
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
with a copy to: Xxxxx Xxxxx Mulliss & Xxxxx, L.L.P.
Post Office Box 31247 (28231)
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: J. Xxxxxxx Xxxxxxx, Esquire
Issuer: The Xxxxxx County Industrial Facilities and Pollution
Control Financing Authority
23
c/o Clerk, Xxxxxx County Board of Commissioners
The Xxxx Xxxxx
Xxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Chairman
with a copy to: Xxxxxx County Attorney
Courthouse
Xxxx Xxxxxx Xxx 0
Xxxxxx, Xxxxx Xxxxxxxx 00000
Attention: C. Xxxxx Xxxxxxxx
Trustee and Norwest Bank Minnesota, National Association
Paying Agent: Sixth and Marquette
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Corporate Trust Department
Remarketing Agent: Xxxxxx Xxxxxxx & Xxxxx, Inc.
00 Xxxxx Xxxxxx (36104)
Xxxx Xxxxxx Xxxxxx 0000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Xx.
Any of the foregoing may, by notice given hereunder, designate any further or
different addresses to which subsequent notices, certificates or other
communications shall be sent.
Section 10.2. Severability. If any provision of this Agreement shall be
held or deemed to be or shall, in fact, be illegal, inoperative or
unenforceable, the same shall not affect any other provision or provisions
herein contained or render the same invalid, inoperative, or unenforceable to
any extent whatever.
Section 10.3. Execution of Counterparts. This Agreement may be
simultaneously executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same instrument;
except that, to the extent that this Agreement shall constitute personal
property under the Uniform Commercial Code of North Carolina, no security
interest in this Agreement may be created or perfected through the transfer or
possession of any counterpart of this Agreement other than the original
counterpart, which shall be the counterpart containing the receipt therefor
executed by the Trustee following the signatures to this Agreement.
Section 10.4. Amounts Remaining in Bond Fund. It is agreed by the parties
hereto that after payment in full of (i) the Bonds (or the provision for payment
thereof having been made in accordance with the provisions of the Indenture),
(ii) the fees, charges and expenses of the Trustee and Paying Agents in
accordance with the Indenture, (iii) all amounts owing to the Bank under the
Reimbursement Agreement, and (iv) all other amounts required to be paid under
this Agreement and the Indenture, any amounts remaining in the Bond Fund shall
belong to and be paid by the Trustee to the Company.
24
Section 10.5. Amendments, Changes and Modifications. Except as otherwise
provided in this Agreement or the Indenture, subsequent to the initial issuance
of Bonds and prior to payment in full of the Bonds (or the provision for payment
thereof having been made in accordance with the provisions of the Indenture),
this Agreement may not be effectively amended, changed, modified, altered or
terminated nor any provision waived, without the written consent of the Trustee.
Section 10.6. Governing Law. This Agreement shall be governed exclusively
by and construed in accordance with the applicable laws of the State of North
Carolina.
Section 10.7. Authorized Company Representative. An Authorized Company
Representative shall act on behalf of the Company whenever the approval of the
Company is required or the Company requests the Issuer to take some action, and
the Issuer and the Trustee shall be authorized to act on any such approval or
request and neither the Issuer nor the Company shall have any complaint against
the other or against the Trustee as a result of any such action taken at the
direction of the Authorized Company Representative.
Section 10.8. Term of the Agreement. This Agreement shall be in full force
and effect from the date hereof and shall continue in effect so long as any
Bonds are outstanding or the Trustee shall hold any moneys under Article IX of
the Indenture, whichever is later. All representations and certifications by the
Company as to all matters affecting the tax-exempt status of the Bonds shall
survive the termination of this Agreement.
Section 10.9. No Personal Liability. No covenant or agreement contained in
this Agreement shall be deemed to be the covenant or agreement of any official,
officer, agent, attorney, or employee of the Issuer or the Company in his
individual capacity, and no such person shall be subject to any personal
liability or accountability by reason of the issuance thereof.
Section 10.10. Parties in Interest. This Agreement shall inure to the
benefit of and shall be binding upon the Issuer, the Company and their
respective successors and assigns, and no other person, firm or corporation
shall have any right, remedy or claim under or by reason of this Agreement;
provided, however, that any obligation of the Issuer created by or arising out
of this Agreement shall be payable solely out of the revenues derived from this
Agreement or the sale of the Bonds or income earned on invested funds as
provided in the Indenture and shall not constitute, and no breach of this
Agreement by the Issuer shall impose, a pecuniary liability upon the Issuer or a
charge upon the Issuer's general credit or against its taxing powers.
25
IN WITNESS WHEREOF, the Issuer and the Company have caused this Agreement
to be executed in their respective corporate names by their respective duly
authorized officers, all as of the date first above written.
(Corporate Seal) THE XXXXXX COUNTY INDUSTRIAL
FACILITIES AND POLLUTION CONTROL
FINANCING AUTHORITY
Attest:
By:
------------------------- ----------------------------
Secretary Chairman
(Corporate Seal) XXXXXX-XXXXX, INC.
Attest:
By:
------------------------- ----------------------------
Secretary Its:
----------------------------
26
RECEIPT
Receipt of the foregoing original counterpart of the Loan Agreement dated
as of June 1, 1997, between The Xxxxxx County Industrial Facilities and
Pollution Control Financing Authority and Xxxxxx-Xxxxx, Inc. is hereby
acknowledged.
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
-----------------------------
Corporate Trust Officer
3
EXHIBIT A
DESCRIPTION OF PROJECT
The Project consists of the construction of a 156,000 square foot
expansion to the Company's existing facility, and the acquisition and
installation of equipment therein for the manufacture of building products,
constituting an industrial facility, to be located at 000 XxXxx Xxxx, Xxxxxx,
Xxxxx Xxxxxxxx 00000.
A-1
EXHIBIT B
Promissory Note
Xxxxxx-Xxxxx, Inc.
$7,000,000 June 13, 1997
Xxxxxx-Xxxxx, Inc., a Delaware corporation (the "Company"), for value
received, hereby promises to pay to The Xxxxxx County Industrial Facilities and
Pollution Control Financing the Authority (the "Issuer"), or assigns, on June 1,
the principal sum of SEVEN MILLION DOLLARS ($7,000,000) subject to prior
payment, with interest on the unpaid principal sum, from June 13, 1997, until
said principal sum shall be paid, and to the extent permitted by law, interest
on overdue installments of such interest, at the then interest rate provided in
the Bonds, as hereinafter defined. Interest hereunder shall be payable at the
time interest is payable on the Bonds.
Payments shall be made in lawful money of the United States of America in
immediately available funds on the date payment is due, at the principal
corporate trust office of Norwest Bank Minnesota, National Association (the
"Trustee"), in Minneapolis, Minnesota, or at such other place as the Trustee may
direct in writing.
Anything herein to the contrary notwithstanding, any amount held by the
Trustee in the Bond Fund referred to in the Indenture, hereinafter defined,
shall be credited against the next succeeding payment hereunder and shall reduce
the payment to be made by the Company. If the amount held by the Trustee in the
Bond Fund should be sufficient to pay at the times required the principal of,
premium, if any, and interest on the Bonds then remaining unpaid and to pay all
fees and expenses of the Trustee and the Paying Agents accrued and to accrue
through final payment of the Bonds, then the Company shall not be obligated to
make any further payments hereunder, except to the extent losses may be incurred
in connection with investment of moneys in the Bond Fund.
The Issuer, by the execution of the Indenture, as hereinafter defined, and
the assignment form at the foot of this Note, is assigning this Note and the
payments thereon to the Trustee acting pursuant to an Indenture of Trust dated
as of June 1, 1997 (the "Indenture"), between the Issuer and the Trustee as
security for the Issuer's $7,000,000 Industrial Development Revenue Bonds
(Xxxxxx-Xxxxx, Inc. Project), Series 1997 (the "Bonds"), as defined in the
Indenture, all as issued pursuant to the Indenture. Payments of principal of and
interest on this Note shall be made directly to the Trustee for the account of
the Issuer pursuant to such assignment and applied only to the principal of and
interest on the Bonds. All obligations of the Company hereunder shall terminate
when all sums due and to become due pursuant to the Indenture, this Note, the
Loan Agreement, hereinafter defined, and the Bonds have been paid.
B-1
In addition to the payments of principal and interest specified in the
first paragraph hereof, the Company shall also pay such additional amounts, if
any, which, together with other moneys available therefor pursuant to the
Indenture, may be necessary to provide for payment when due of principal of
(whether at maturity, by acceleration, upon purchase, upon call for mandatory,
extraordinary or optional redemption, or otherwise), premium, if any, and
interest on the Bonds.
The Company shall have the option or may be required to prepay this Note
in whole or in part upon the terms and conditions and in the manner specified in
the Loan Agreement dated as of June 1, 1997 (the "Loan Agreement"), between the
Issuer and the Company.
This Note is issued pursuant to the Loan Agreement in satisfaction of the
Company's payment obligation in Section 4.1 thereof and is entitled to the
benefits and subject to the conditions thereof, including the provisions of
Section 4.2 thereof that the Company's obligations thereunder and hereunder
shall be unconditional as provided in such Section 4.2. All the terms,
conditions and provisions of the Loan Agreement and the applicable provisions of
the Bonds and the Indenture are, by this reference thereto, incorporated herein
as a part of this Note.
In case an Event of Default, as defined in the Loan Agreement, shall
occur, the principal of and interest on this Note may be declared immediately
due and payable as provided in the Loan Agreement. This Note shall be governed
by, and construed in accordance with, the laws of the State of North Carolina.
IN WITNESS WHEREOF, the Company has caused this Note to be executed in its
corporate name and its seal to be hereunto affixed and attested by its duly
authorized officers, all as of the date first above written.
XXXXXX-XXXXX, INC.
Attest:
By: By:
----------------------- -----------------------
Secretary President
B-2
ASSIGNMENT
The Xxxxxx County Industrial Facilities and Pollution Control Financing
Authority (the Issuer), hereby irrevocably assigns, without recourse, the
foregoing Note to Norwest Bank Minnesota, National Association, Trustee under an
Indenture of Trust dated as of June 1, 1997 (the Indenture), between the Issuer
and the Trustee, and hereby directs Xxxxxx-Xxxxx, Inc. (the Company) as the
maker of the Note to make all payments of principal of and interest thereon
directly to the Trustee at its principal corporate trust office in Minneapolis,
Minnesota, or at such other place as the Trustee may direct in writing. Such
assignment is made as security for the payment of the Issuer's $7,000,000
Industrial Development Revenue Bonds (Xxxxxx-Xxxxx, Inc. Project), Series 1997,
issued pursuant to the Indenture.
THE XXXXXX COUNTY INDUSTRIAL
FACILITIES AND POLLUTION
CONTROL FINANCING AUTHORITY
By:
----------------------------------
Chairman, Board of Commissioners
June 13, 1997
B-2
EXHIBIT C
REPRESENTATIONS AND WARRANTIES RELATING TO TAX MATTERS
WITH RESPECT TO THE BONDS AND THE PROJECT
1. Not less than 95% of the net proceeds of the Bonds (consisting of the
face amount of the Bonds less any original issue discount plus any original
issue premium, but including issuance costs) shall be used to provide facilities
to be used in the manufacturing or production of tangible personal property,
including facilities that are directly related and ancillary to such
manufacturing facilities and located on the same site as the manufacturing
facilities; provided, however, that not more than twenty-five percent (25%) of
the net proceeds shall be used to provide such ancillary facilities.
2. The aggregate amount of capital expenditures (as defined by Section
1.103- 10(b)(2) of the Tax Regulations to include any expenditure which was or
could have been treated as a capital expenditure under any rule or election
under the Code) with respect to facilities located in the same incorporated
municipality as the Project, or which are contiguous or integrated facilities,
the principal user of which was or is the Company or any Related Person, paid or
incurred during the period beginning three years before the date of issuance of
the Bonds, and financed otherwise than out of the Bond proceeds (not including
investment earnings thereon) and otherwise than out of the proceeds of other
outstanding issues to which Section 144(a)(2) of the Code applies, is
$_________________.
3. The aggregate face amount of all prior issues outstanding as of the
date of issuance of the Bonds (whether or not the issuer of each issue is the
same) to which Section 144(a) of the Code or Section 103(b)(6) of the Internal
Revenue Code of 1954, as amended applies, the proceeds of which were or will be
used to any extent with respect to facilities located in the same incorporated
municipality as the incorporated municipality in which the Project is located
and the principal user of which is the Company or a Related Person, is $-0-. The
Issuer hereby elects to have the provisions of Section 144(a) of the Code apply
to the Bonds. The Company and, at the direction of the Company, the Issuer,
shall file any reports or statements and take any other action as may be
required from time to time with respect to the qualification of the Bonds as an
exempt small issue within the meaning of Section 144(a) of the Code.
4. (a) During the period commencing 15 days before the date of issuance of
the Bonds, neither the Company nor any Related Person (or group of Related
Persons which includes the Company) has guaranteed, arranged, participated in,
assisted with, borrowed the proceeds of, or leased facilities financed by,
obligations issued under Section 144(a) of the Code by any state or local
governmental unit or any constituted authority empowered to issue obligations by
or on behalf of any state or local governmental unit other than the Issuer.
Except for the Company or any "Related Person" (or group of "Related Persons"),
no Person has (1) guaranteed, arranged, participated in, assisted with or paid
any portion of the cost of the issuance of the Bonds, or
C-1
(2) provided any property or any franchise, trademark or trade name (within the
meaning of Section 1253 of the Code) which is to be used in connection with the
Project.
(b) During the period commencing on the date of issuance of the Bonds and
ending 15 days thereafter, there will be no obligations issued under Section
144(a) of the Code which are guaranteed by the Company or any Related Person (or
group of Related Persons which includes the Company) or which are issued with
the assistance or participation of, or by arrangement with, the Company or any
Related Person (or group of Related Persons which includes the Company) without
the written opinion of Hunton & Xxxxxxxx to the effect that the issuance of such
obligations will not adversely affect their opinion as to the exemption from
present federal income tax of interest on the Bonds. Other than the Company or
any Related Person (or group of Related Persons including the Company), no
Person has (i) guaranteed, arranged, participated in, assisted with the issuance
of, or paid any portion of the cost of the issuance of, any of the Bonds, and
(ii) provided any property or any franchise, trademark or trade name (within the
meaning of Section 1253 of the Code) which is to be used in connection with the
Project.
(c) The Bonds are not being issued as part of an issue the interest of
which is exempt from federal income taxation under any other provision of law
other than Section 144(a) of the Code.
5. No portion of the Bond proceeds is being used to provide a facility, a
purpose of which is retail food and beverage services, automobile sales or
service, or the provision of recreation or entertainment. No portion of the Bond
proceeds is being used to provide any private or commercial golf course, country
club, health club, massage parlor, tennis club, skating facility (including
roller skating, skateboard and ice skating), racquet sports facility (including
any handball or racquetball court), hot tub facility, suntan facility,
racetrack, skybox or other luxury box, airplane, store the principal business of
which is the sale of alcoholic beverages for consumption off premises, or
facility used primarily for gambling. No portion of the Bond proceeds is being
used directly or indirectly to provide residential real property for family
units.
6. (a) As of the date of issuance of the Bonds, the sum of (i) the
aggregate authorized face amount of the Bonds allocated in accordance with
Section 144(a)(10)(C) of the Code to the Company or any Related Person to the
Company plus (ii) the aggregate authorized face amount of any outstanding
tax-exempt facility-related bonds (as defined in Section 144(a)(10)(B) of the
Code) of the Company, or any Related Person to the Company, does not exceed $40
million.
(b) As of the date of issuance of the Bonds, the sum of (i) the aggregate
authorized face amount of the Bonds allocated in accordance with Section
144(a)(10)(C) of the Code to any known test-period beneficiary, as defined in
Section 144(a)(10)(D) of the Code, or any Related Person to such test-period
beneficiary (other than the Company or any Related Person to the Company) plus
(ii) the aggregate authorized face amount of any outstanding tax-exempt
facility-related bonds (as defined in Section 144(a)(10)(B) of the Code) of such
known test-period
C-2
beneficiary, or any Related Person thereto (other than the Company or any
Related Person to the Company), does not exceed $40 million.
7. There are no other bonds to which Section 144(a) of the Code applies
which, together with the Bonds, are to be used with respect to (a) a single
building, (b) an enclosed shopping mall, or (c) a strip of offices, stores or
warehouses, using substantial common facilities with the Project or a portion
thereof.
8. Bond proceeds were used only with respect to either real or personal
property the first use of which was pursuant to such acquisition with the Bond
proceeds.
9. (a) No portion of the Bond proceeds has been used directly or
indirectly for the acquisition of land or any interest therein to be used for
the purpose of farming.
(b) Less than 25% of the Bond proceeds will be used directly or indirectly
to reimburse the Company for the cost of the acquisition of land to be used for
purposes other than farming.
10. The Bonds will not be federally guaranteed within the meaning of
Section 149(b) of the Code. For purposes of this representation, no principal
user of the financed property has entered into any leases of the financed
property to, or sales or service contracts with, any federal government agency.
11. The costs of the issuance of the Bonds including, but not limited to,
underwriter's spread, counsel fees, financial advisor fees, rating agency fees,
trustee fees incurred in connection with the borrowing, paying agent and
certifying and authenticating agent fees related to the issuance of the Bonds,
accountant fees, printing costs and costs incurred in obtaining public approval
of the Bonds, paid from the proceeds of the Bonds or investment earnings
thereon, will not exceed 2% of the aggregate face amount of the Bonds.
12. The Company hereby represents that the information contained in the
certificates or letters of representation of the Company with respect to the
compliance with the requirements of Section 103 of the Code, including the
information in Form 8038 (excluding the issue number and the employer
identification number of the Issuer), filed by the Company on behalf of the
Issuer with respect to the Bonds, and the Tax Code Compliance Questionnaire
completed by the Company and dated April 18, 1997.
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