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EXHIBIT 10.14
THIS LOAN AGREEMENT is dated as of November l, 1983, between the ECONOMIC
DEVELOPMENT CORPORATION OF THE CITY OF PLAINWELL (the "Issuer"), a political
subdivision and body corporate and politic of the State of Michigan (the
"State"), and PLAINWELL PAPER CO., INC., a corporation organized and existing
under the laws of the State (the "Company").
W I T N E S S E T H :
WHEREAS, the Issuer has been created under the provisions of and is
empowered pursuant to Xxx 000, Public Acts of Michigan, 1974, as amended (the
"Act"), to issue its revenue obligations t finance costs of providing certain
facilities including pollution control facilities; and
WHEREAS, the Company is pursuing the acquisition, construction and
installation of the facilities and equipment described in Exhibit A hereto (the
"Project"); and
WHEREAS, on April 26, 1983, the Board of Directors of the Issuer adopted
an initial resolution stating the intention of the Issuer to issue revenue bonds
in an aggregate amount of not to exceed $4,000,000 to finance costs of that
acquisition, construction and installation; and
WHEREAS, in furtherance of the purposes of the Act, the Issuer proposes to
issue its Variable Rate Demand Notes (Plainwell Paper Co., Inc. Project) (the
"Notes"), pursuant to the Indenture (as hereinafter defined) to finance the
costs of acquiring, constructing and installing the Project, and to sell the
Notes to a purchaser or purchasers provided by the Company; and
WHEREAS, the Issuer proposes to loan the proceeds from the sale of the
Notes to the Company upon the terms and conditions set forth herein;
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants hereinafter contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
All capitalized, undefined terms used herein shall have the same meanings
as used in Article I of the hereinafter defined Indenture. In addition, the
following words and phrases shall have the following meanings:
"Act" means Act 338, Public Acts of Michigan, 19/4, as amended.
"Company" means (i) Plainwell Paper Co., Inc., a Michigan corporation, and
its successors and assigns, and (ii) any surviving, resulting or transferee
corporation as provided in Section 2.2(d) hereof.
"Counsel" means an attorney at law (who may be counsel to the Trustee, the
Issuer, the Company or the Guarantor).
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"Default" means any Default under this Agreement as specified in and
defined by Section 8.1 hereof.
"Force Majeure" means any cause or event not reasonably within the control
of the Company, including without limitation the following: acts of God;
strikes, lock-outs or other industrial disturbances; acts of public enemies;
restraining orders of any kind of the government of the United States of America
or of the State or any of their departments, agencies or officials, or any civil
or military authority; insurrections; riots; landslides, earthquakes; fires;
storms; droughts; floods; explosions, breakage or accident to machinery,
transmission pipes or canals; civil disturbances; washouts; hurricanes;
tornados; and partial or entire failure or unavailability of transportation or
utilities.
"Indenture" means the Indenture of Trust dated as of this date between the
Issuer and the Trustee, pursuant to which the Notes are authorized to be issued,
and any amendments and supplements thereto.
"Issuer" means the Economic Development Corporation of the City of
Plainwell and any successor.
"Note Fund" means the fund created in Section 502 of the Indenture.
"Notes" means the Issuer's Variable Rate Demand Notes (Plainwell Paper
Co., Inc. Project).
"Project" means the project described in Exhibit A hereof.
"Project Costs" include those costs of the Project which are permitted to
be financed under the Act and which do not result in any loss of the exemption
for interest on the Notes under the Internal Revenue Code of 1954, as amended.
"Term of Agreement" means the term of this Agreement as specified in
Section 11.1 hereof.
"Trustee" means the Trustee at the time serving under the Indenture.
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES
Section 2.1. Representations, Covenants and Warranties of the Issuer. The
Issuer represents, covenants and warrants that:
(a) The Issuer is a political subdivision and body corporate and
politic of the State duly created and existing under the Act. Under the
Act, the Issuer is authorized to enter into the transactions contemplated
by this Agreement and the Indenture and to carry out its obligations
hereunder and thereunder. The Issuer has authorized the issuance,
execution and delivery of the Notes and the execution and delivery of this
Agreement and
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the Indenture. The Issuer will not take any action to interfere with any
obligation it may have with respect to the Notes, or the proceedings
authorizing the Notes, or this Agreement or the Indenture.
(b) The Issuer agrees to provide funds from the proceeds from the
sale of the Notes for the financing of the Project, and to secure the
Notes by assigning this Agreement to the Trustee under the Indenture.
(c) The Issuer covenants that it will not pledge the amounts derived
from this Agreement other than to secure the Notes.
Section 2.2. Representations, Covenants and Warranties of the Company. The
Company represents, covenants, and warrants as follows:
(a) The Company has been duly incorporated and is validly existing
and in good standing under the laws of the jurisdiction of its
incorporation, with the corporate power and authority to own its property
and to carry on its business as now being conducted.
(b) The Company has full power and authority to enter into this
Agreement, the Remarketing Agreement and the Credit Agreement, and the
execution and delivery of each of such documents have been duly authorized
by all necessary corporate action. No consent or approval of or any filing
with any municipal, state or federal regulatory authority is required as a
condition to the execution, delivery or validity of this Agreement, the
Remarketing Agreement or the Credit Agreement.
(c) This Agreement, the Remarketing Agreement and the Credit
Agreement constitute valid and binding agreements of the Company
enforceable in accordance with their terms except that the enforceability
thereof may be limited by bankruptcy, insolvency or other similar laws
affecting creditor's rights generally and by general principles of equity
(regardless of whether enforceability is considered in a proceeding in
equity or at law).
(d) The Company agrees that during the Term of Agreement it will
maintain its existence, will continue to be a corporation in good standing
in the State, will not dissolve or otherwise dispose of all or
substantially all of its assets and will not consolidate with or merge
into another legal entity or permit one or more other legal entities to
consolidate with or merge into it, provided that the Company may, without
violating the agreement contained in this Section, consolidate with or
merge into another legal entity, or permit one or more legal entities to
consolidate with or merge into it, or sell or otherwise transfer to
another legal entity all or substantially all of its assets as an entirety
and thereafter dissolve, provided (i) that such acquisition,
consolidation, merger, or transfer will not affect the tax-exempt status
of the interest on the Notes; and (ii) that if the surviving, resulting or
transferee legal entity, as the case may be, is not the Company, then such
legal entity shall be a legal entity organized and existing under the laws
of one of the States of the United States of America and shall assume all
of the obligations of the
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Company under the Agreement, the Remarketing Agreement and the Credit
Agreement, in which event the Issuer shall release the Company in writing,
concurrently with and contingent upon such acquisition, consolidation,
merger or transfer.
(e) Neither the execution and delivery of this Agreement, the
Remarketing Agreement or the Credit Agreement, the consummation of the
transactions contemplated hereby and thereby, nor the fulfillment of or
compliance with the terms and conditions thereof conflicts with or results
in a breach of the terms, conditions, or provisions of any restriction or
any agreement or instrument to which the Company is now a party or by
which the Company is bound, or constitutes a default under any of the
foregoing, or results in the creation or imposition of any lien, charge or
encumbrance whatsoever upon any of the property or assets of the Company
under the terms of any instrument or agreement.
(f) There is no action, suit, proceeding, inquiry or investigation,
at law or in equity, before or by any court, public board or body, known
to be pending or threatened against or affecting the Company or any of its
officers nor to the best of the knowledge of the Company is there any
basis therefor, wherein an unfavorable decision, ruling, or finding would
materially adversely affect the transactions contemplated by this
Agreement or which would adversely affect, in any way, the validity or
enforceability of the Notes, this Agreement, the Credit Agreement, the
Remarketing Agreement, or any agreement or instrument to which the Company
is a party, used or contemplated for use in the consummation of the
transactions contemplated hereby.
Section 2.3. The Project. The Company will cause the Project to be
completed in accordance with the Company's specifications and directions. It is
the Company's present intention to use the Project throughout the Term of
Agreement primarily in connection with its present business. The Company may use
the Project during the Term of Agreement, however, for any lawful purpose if
Counsel satisfactory to the Trustee renders an opinion to the Issuer and the
Trustee that the use will not affect the validity or the tax-exempt nature of
the Notes. The failure or inability of the Company to use the Project for the
intended purposes shall not affect in any way the Company's obligations under
this Agreement and shall not be deemed a breach or Default under this Agreement
as long as the use does not affect the validity or tax-exempt nature of the
Notes.
ARTICLE III
ACQUISITION AND CONSTRUCTION OF THE PROJECT;
ISSUANCE OF THE NOTES
Section 3.1. Agreement to Acquire, Construct and Install the Project. The
Company agrees that it will acquire, construct, and install the Project with all
reasonable dispatch and use its best efforts to cause the acquisition,
construction and installation of the Project to be completed by October 1, 1986,
or as soon thereafter as may be practicable, delays caused by Force Majeure only
excepted; but if for any reason such acquisition, construction and installation
is not completed by said date there shall be no resulting liability on the part
of the Company and
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no diminution in or postponement of the payments required in Section 4.2 hereof
to be paid by the Company.
Section 3.2. Agreement to Issue Notes; Application of Note Proceeds. In
order to provide funds for payment of the Project Costs, the Issuer,
concurrently with the execution of this Agreement, will issue, sell, and deliver
the Notes and deposit the net proceeds thereof with the Trustee in the Project
Fund.
Section 3.3. Disbursements from the Project Fund. The Issuer has, in the
Indenture, authorized and directed the Trustee to make disbursements from the
Project Fund to pay the Project Costs, or to reimburse the Company for any
Project Costs paid by the Company. The Trustee shall make payments from the
Project Fund upon receipt of requisitions signed by a Company Representative
stating:
(a) the requisition number,
(b) the name and address of the Person to whom payment is due or to
whom the Company has made payment for which reimbursement is to be made,
(c) the amount to be paid, and
(d) that each obligation has been properly incurred, is a proper
charge against the Project Fund, and has not been the basis of any
previous withdrawal. The requisition shall be accompanied by copies of
such invoices, cancelled checks (or other evidence of payment) and similar
documentation as the Trustee may reasonably request.
Section 3.4. Establishment of Completion Date. The end of the Construction
Period shall be evidenced to the Issuer and the Trustee by a certificate signed
by a Company Representative stating that, except for amounts retained by the
Trustee at the Company's direction to pay any Project Costs not then due and
payable, the acquisition, construction and installation of the Project has been
completed and the Project Costs have been paid. Notwithstanding the foregoing,
such certificate shall state that it is given without prejudice to any rights
against third parties which exist at the date of such certificate or which may
subsequently come into being. Forthwith upon completion of the acquisition,
construction and installation of the Project, the Company agrees to cause such
certificate to be furnished to the Issuer and the Trustee. Upon receipt of such
certificate, the Trustee shall retain in the Project Fund a sum equal to the
amounts necessary for payment of the Project Costs not then due and payable
according to such certificate. If any such amounts so retained are not
subsequently used, prior to any transfer of said amounts to the Note Fund as
provided below, the Trustee shall give notice to the Company of the failure to
apply said funds for payment of the Project Costs. Any amount not to be retained
in the Project Fund for payment of the Project Costs, and all amounts so
retained but not subsequently used, shall be transferred by the Trustee into the
Note Fund. The transferred amounts (the "Excess Proceeds") shall be retained in
a segregated subaccount in the Note Fund for the payment or redemption of
Outstanding Notes at the earliest possible date after such amounts become
Available Moneys. Any provision of this Agreement or the Indenture to the
contrary notwithstanding, the Excess Proceeds held in the Note Fund may not be
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invested to produce a yield (as computed under Section 1.103-13 of the Federal
Income Tax Regulations) greater than the yield on the Notes. The Trustee shall
have the right to request from the Company and to rely on instructions with
respect to the yield on the Notes.
Section 3.5. The Company Required to Pay in Event Project Fund
Insufficient. In the event the moneys in the Project Fund available for payment
of the Project Costs should not be sufficient to pay the Project Costs in full,
the Company agrees to complete the construction of the Project and to pay that
portion of the Project Costs in excess of the moneys available therefor in the
Project Fund. The Company agrees that if, after exhaustion of the moneys in the
Project Fund, the Company should pay any portion of the Project Costs pursuant
to the provisions of this Section, the Company shall not be entitled to any
reimbursement therefor from the Issuer, the Trustee or the Owners of any of the
Notes, nor shall the Company be entitled to any diminution of the amounts
payable under Section 4.2 hereof.
Section 3.6. Investment of Moneys. Any moneys held as a part of the
Project Fund shall be invested or reinvested by the Trustee, to the extent
permitted by law, at the written request of and as directed by a Company
Representative, in any of the investments authorized in Article VI of the
Indenture.
Section 3.7. The Covenants with Respect to Arbitrage. The Company
covenants with the Issuer and to and for the benefit of the purchasers and
Owners of the Notes that no use will be made of the proceeds from the issuance
and sale of the Notes which, if such use had been reasonably expected on the
date of issue of the Notes, would have caused the Notes to be classified as
"arbitrage bonds" within the meaning of Section 103(c)(2) of the Code. As long
as any of the Notes are Outstanding, the Company shall not willfully violate the
requirements of Section 103(c) of the Code and any regulations thereunder. The
Company reserves the right, however, to make any investment of proceeds
authorized hereunder and under the Indenture and permitted by the laws of the
State, if Section 103(c) or the regulations thereunder are repealed or relaxed
or held void by final judgment of a court of competent jurisdiction, so long as
the investment would not result in making the interest on the Notes subject to
federal income taxation. In making investments, the Company may rely on an
opinion of nationally recognized bond counsel.
ARTICLE IV
LOAN OF PROCEEDS TO THE COMPANY;
LOAN PROVISIONS
Section 4.1. Loan of Proceeds. The Issuer agrees, upon the terms and
conditions contained in this Agreement, to lend to the Company the proceeds
received by the Issuer from the sale of the Notes. Such proceeds shall be
disbursed to or on behalf of the Company as provided in Section 3.3 hereof.
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Section 4.2. Amounts Payable.
(a) The Company hereby covenants and agrees to repay the loan in
installments, as follows: on or before any interest payment date for the
Notes or any other date that payments are required to be made to the
Trustee pursuant to Section 308 of the Indenture in order to effect
redemption on the date fixed for redemption of any or all of the Notes
pursuant to the Indenture, until the principal of, premium, if any, and
interest on the Notes shall have been fully paid or provision for the
payment thereof shall have been made in accordance with the Indenture, in
immediately available funds, a sum which, together with any Available
Moneys available for such payment in the Note Fund, will enable the
Trustee to pay the amount payable on such date as principal of (whether at
maturity or upon redemption or acceleration or otherwise), premium, if
any, and interest on the Notes as provided in the Indenture; provided,
however, that the obligation of the Company to make any payment hereunder
shall be deemed satisfied and discharged to the extent of the
corresponding payment made by the Bank to the Trustee under the Letter of
Credit upon reimbursement by the Company to the Bank in full for such
payment pursuant to the terms of the Credit Agreement.
It is understood and agreed that all payments payable by the Company
under subsection (a) of this Section are assigned by the Issuer to the
Trustee for the benefit of the Owners of the Notes. The Company assents to
such assignment. The Issuer hereby directs the Company and the Company
hereby agrees to pay to the Trustee at the Principal Office of the Trustee
all payments payable by the Company pursuant to this Section.
(b) The Company will also pay the reasonable expenses of the Issuer
related to the issuance of the Notes and incurred upon the written request
of the Company and the reasonable fees and expenses of the Issuer caused
by a Default under this Agreement.
(c) The Company will also pay the reasonable fees and expenses of
the Trustee under the Indenture, including those incurred in connection
with the Trustee's indemnification of its agent appointed pursuant to
Section 314 of the Indenture, and all other amounts which may be payable
to the Trustee under Section 902 of the Indenture, such amounts to be paid
directly to the Trustee for the Trustee's own account as and when such
amounts become due and payable, and any reasonable expenses in connection
with any redemption of the Notes. The Company will also pay the reasonable
fees and expenses of the Paying Agent, any Co-Paying Agent, the Note
Registrar, any Co-Note Registrar, any Authenticating Agent, and the agent
of the Trustee appointed pursuant to Section 314 of the Indenture, for
their services rendered under the Indenture and all advances, counsel fees
and other expenses reasonably made or incurred by such Persons in
connection with such services.
(d) The Company covenants, for the benefit of the Owners of the
Notes, to pay or cause to be paid to the Trustee such amounts as shall be
necessary to enable the Trustee to pay the Purchase Price of Notes
delivered to it for purchase, all as more particularly described in
Sections 303, 304 and 306 of the indenture; provided, however,
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that the obligation of the Company to make any such payment hereunder
shall be reduced by the amount of moneys available for such payment
described in subsections (i) or (ii) of Section 311 of the Indenture; and
provided, further, that the obligation of the Company to make. any payment
hereunder shall be deemed to be satisfied and discharged to the extent of
the corresponding payment made by the Bank to the Trustee under the Letter
of Credit.
In the event the Company should fail to make 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, and the Company agrees to pay the same with interest thereon, to the
extent permitted by law, from the date when such payment was due at the Late
Payment Rate.
Section 4.3. Obligations of the Company Hereunder Unconditional. The
obligations of the Company to make the payments required in Section 4.2 and
other sections hereof and to perform and observe the other agreements contained
herein shall be absolute and unconditional and shall not be subject to any
defense or any right of setoff, counterclaim or recoupment arising out of any
breach by the Issuer or the Trustee of any obligation to the Company, whether
hereunder or otherwise, or out of any indebtedness or liability at any time
owing to the Company by the Issuer or the Trustee, and, until such time as the
principal of, premium, if any, and interest on the Notes 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 4.2 hereof, (ii) will perform and observe all other
agreements contained in this Agreement and (iii) except as provided in Article
IX hereof, will not terminate the Term of Agreement for any cause, including,
without limiting the generality of the foregoing, failure of the Company to
complete the acquisition, construction, and installation of the Project, the
occurrence of any acts or circumstances that may constitute failure of
consideration, eviction or constructive eviction, destruction of or damage to
the Project, the taking by eminent domain of title to or temporary use of any or
all of the Project, commercial frustration of purpose, any change in the tax or
other laws of the United States of America or of the State or any political
subdivision of either thereof or any failure of the Issuer or the Trustee to
perform and observe any agreement, whether express or implied, or any duty,
liability or obligation arising out of or connected with this Agreement. Nothing
contained in this Section shall be construed to release the Issuer from the
performance of any of the agreements on its part herein contained, and in the
event the Issuer or the Trustee should fail to perform any such agreement on its
part, the Company may institute such action against the Issuer or the Trustee as
the Company may deem necessary to compel performance so long as such action does
not abrogate the obligations of the Company contained in the first sentence of
this Section. The Company may, however, at its own cost and expense and in its
name or in the name of the Issuer, prosecute or defend any action or proceeding
or take any other action involving third persons which the Company deems
reasonably necessary in order to secure or protect the Company's right of
possession, occupancy and use hereunder, and in such event the Issuer hereby
agrees to cooperate fully with the Company and to take all action necessary to
effect the substitution of the Company for the Issuer in any such action or
proceeding if the Company shall so request.
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Section 4.4. Substitute Letter of Credit. The Company may, at any time,
provide for the delivery to the Trustee of a Substitute Letter of Credit. Any
Substitute Letter of Credit shall be delivered to the Trustee not less than
sixty (60) days prior to expiration of the Letter of Credit it is being issued
to replace; provided, however, that at least twenty (20) days but not more than
sixty (60) days prior to such delivery date, the Company shall have mailed to
each Owner of Notes the notice required pursuant to Section 315 of the
Indenture.
ARTICLE V
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 5.1. Damage, Destruction and Condemnation. Unless the Company
shall have exercised its option to terminate this Agreement pursuant to the
provisions of Section 9.2(a) or Section 9.2(b) hereof, if prior to full payment
of the Notes (or prior to provision for payment thereof having been made in
accordance with the provisions of the Indenture) (i) the Project or any portion
thereof is destroyed (in whole or in part) or is damaged by fire or other
casualty or (ii) title to or any interest in, or the temporary use of, the
Project or any part thereof shall be taken under the exercise of the power of
eminent domain by any governmental body or by any person, firm or corporation
acting under governmental authority, the Company shall be obligated to continue
to pay the amounts specified in Section 4.2 hereof.
ARTICLE VI
SPECIAL COVENANTS
Section 6.1. Further Assurances and Corrective Instruments. The Issuer and
the Company agree that they will, from time to time, execute, acknowledge and
deliver, or cause to be executed, acknowledged and delivered, such supplements
hereto and such further instruments as may reasonably be required for correcting
any inadequate or incorrect description of the Project or for carrying out the
expressed intention of this Agreement.
Section 6.2. The Issuer and the Company Representatives. Whenever under
the provisions of this Agreement the approval of the Issuer or the Company is
required or the Issuer or the Company is required to take some action at the
request of the other, such approval or such request shall be given for the
Issuer by an Issuer Representative and for the Company by a Company
Representative; the Trustee and any party hereto shall be authorized to act on
any such approval or request.
Section 6.3. Covenants of the Company with Respect to Use of Note
Proceeds. The Issuer is issuing the Notes pursuant to an exemption contained in
Section 103(b)(4) of the Code. It is the intention of the parties that the
interest on the Notes remain free from federal income taxation and to that end
the Company covenants with the Issuer and with the Trustee for the benefit of
the Owners of any Notes, that it will never, insofar as it is able, permit the
use of Note proceeds so as to cause the loss of the exemption claimed.
Section 6.4. Security Interest. The Company agrees to execute and file any
and all financing statements or amendments thereof or continuation statements
thereto necessary to
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perfect and continue the perfection of the security interest granted in the
Indenture. The Company shall pay all costs of filing such instruments.
ARTICLE VII
REDEMPTION AND INDEMNIFICATION
Section 7.1. Redemption of Notes. The Company shall have and is hereby
granted the option to prepay from time to time the amounts payable under this
Agreement in sums and at times sufficient to redeem or to pay or cause to be
paid all or part of the Notes in accordance with the provisions of the
Indenture. The Issuer, at the request of the Company, shall forthwith take all
steps (other than the payment of the money required for such redemption)
necessary under the applicable redemption provisions of the Indenture to effect
redemption of all or part of the Outstanding Notes, as may be specified by the
Company, on the date established for such redemption.
Section 7.2. References to Notes Ineffective After Notes Paid. Upon
payment in full of the Notes (or provision for payment thereof having been made
in accordance with the provisions of the Indenture) and payment of all fees and
charges of the Trustee, and payment of all amounts payable to the Bank under the
Credit Agreement, all references in this Agreement to the Notes and the Trustee
shall be ineffective, and neither the Trustee nor the Owners of any of the Notes
shall thereafter have any rights hereunder, saving and excepting those that
shall have theretofore vested or would affect the tax-exempt status of interest
on the Notes.
Section 7.3. The Issuer to Grant Security Interest to the Trustee. The
parties hereto agree that pursuant to the Indenture, the Issuer shall assign to
the Trustee in order to secure payment of the Notes all of the Issuer's right,
title, and interest in this Agreement except the Issuer's rights under Sections
4.2(b) and 8.4 hereof.
Section 7.4. Indemnification of the Trustee, etc. The Company shall and
hereby agrees to indemnify the Trustee for, and hold the Trustee harmless
against, any loss, liability or expense (including the costs and expenses of
defending against any claim of liability) incurred without negligence or willful
misconduct by the Trustee and arising out of or in connection with its acting as
Trustee under the Indenture.
ARTICLE VIII
DEFAULTS AND REMEDIES
Section 8.1. Defaults Defined. The following shall be "Defaults" under
this Agreement and the term "Default" shall mean, whenever it is used in this
Agreement, any one or more of the following events:
(a) Failure by the Company to pay any amount required to be paid
under subsection (a) or (d) of Section 4.2 hereof at the time specified
therein.
(b) Failure by the Company to observe and perform any covenant,
condition or agreement on its part to be observed or performed, other than
as referred to in Section
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8.1(a), for a period of thirty (30) Business Days after written notice
specifying such failure and requesting that it be remedied shall have been
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 diligently pursued until such failure is corrected.
(c) The dissolution or liquidation of the Company, except as
authorized by Section 2.2 hereof, or the voluntary initiation by the
Company of any proceeding under any federal or state law relating to
bankruptcy, insolvency, arrangement, reorganization, readjustment of debt
or any other form of debtor relief, or the initiation against the Company
of any such proceeding which shall remain undismissed for sixty (60) days,
or failure by the Company to promptly have discharged any execution,
garnishment or attachment of such consequence as would impair the ability
of the Company to carry on its operations at the Project, or assignment by
the Company for the benefit of creditors, or the entry by the Company into
an agreement of composition with creditors or the failure generally by the
Company to pay its debts as they become due.
(d) The occurrence of a Default under the Indenture or the Guaranty.
(e) Any representation or warranty made by the Company herein or any
statement or representation in any certificate, report or other document
delivered by the Company in connection herewith shall prove to have been
misleading in any material respect when made.
The provisions of subsection (b) of this Section are subject to the following
limitation: if by reason of Force Majeure the Company is unable in whole or in
part to carry out any of its agreements contained herein (other than its
obligations contained in Article IV hereof), the Company shall not be deemed in
Default during the continuance of such inability. The Company agrees, however,
to remedy with all reasonable dispatch the cause or causes preventing the
Company from carrying out its agreement, provided that the settlement of strikes
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 8.2. Remedies on Default. Whenever any Default referred to in
Section 8.1 hereof shall have happened and be continuing, the Trustee or the
Issuer with the written consent of the Trustee may take one or any combination
of the following remedial steps:
(a) If the Trustee has declared the Notes immediately due and
payable pursuant to Section 802 of the Indenture, by written notice to the
Company, declare an amount equal to all amounts then due and payable on
the Notes, whether by acceleration of maturity (as provided in the
Indenture) or otherwise, to be immediately due and
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payable as liquidated damages under this Agreement and not as a penalty,
whereupon the same shall become immediately due and payable; or
(b) Take whatever action at law or in equity may appear necessary or
desirable to collect the amounts then due and thereafter to become due, 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
paid into the Note Fund and applied in accordance with the provisions of the
Indenture.
Section 8.3. No Remedy Exclusive. Subject to Section 802 of the Indenture,
no remedy herein conferred upon or reserved to the Issuer 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. No delay
or omission to exercise any right or power accruing upon any 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 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. Such rights and
remedies as are given the Issuer hereunder shall also extend to the Trustee, and
the Trustee and the Owners of the Notes, subject to the provisions of the
Indenture, shall be entitled to the benefit of all covenants and agreements
herein contained.
Section 8.4. 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 should employ attorneys or incur other expenses for the collection of
payments required hereunder or the enforcement of performance or observance of
any obligation or agreement on the part of the Company herein contained, the
Company agrees that it will on demand therefor pay to the Issuer the reasonable
fee of such attorneys and such other expenses so incurred by the Issuer, and any
such amounts paid by the Issuer shall be added to the indebtedness secured by
the Indenture.
Section 8.5. No Additional Waiver Implied by One Waiver. In the event any
agreement contained in this Agreement should be breached by either party and
thereafter waived by the other party, such waiver shall be limited to the
particular breach so waived and shall not be deemed to waive any other breach
hereunder.
ARTICLE IX
OPTIONS TO TERMINATE AGREEMENT
Section 9.1. Option to Terminate At Any Time. The Company shall have, and
is hereby granted, the option to terminate this Agreement at any time prior to
full payment of the Notes (or provision for payment thereof having been made in
accordance with the provisions of the Indenture). The Company may terminate this
Agreement (a) by paying or causing to be paid to the Trustee an amount equal to
the sum of the following:
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(i) an amount of money which, when added to the amount then on
deposit and available in the Note Fund, will be sufficient to pay, retire
and redeem all the Outstanding Notes on the earliest possible redemption
date after notice as provided in the Indenture including, without
limitation to, the principal amount thereof, all interest to accrue to
said redemption date and premium, if any, expenses of redemption, plus
(ii) An amount of money equal to the Trustee's fees and expenses
under the Indenture accrued and to accrue until such final payment and
redemption of the Notes, plus
(iii) An amount of money equal to the Issuer's fees and expenses
under this Agreement accrued and to accrue until such final payment and
redemption of the Notes;
(b) in case of redemption, by making arrangements satisfactory to the
Trustee for the giving of the required notice of redemption and (c) by giving
the Issuer notice in writing of such termination, and such termination shall
forthwith become effective.
Section 9.2. Option to Terminate Upon the Occurrence of Certain Events.
The Company shall have, and is hereby granted, the option to terminate this
Agreement prior to the full payment of the Notes (or provision for payment
thereof having been made in accordance with the provisions of the Indenture) at
any time any of the events set forth below shall occur:
(a) The Project shall have been damaged or destroyed (i) to such
extent that it cannot, in the Company's judgment be reasonably restored
within a period of six (6) 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 operations at the Project for a period of six (6) months or
more.
(b) Title to, or the temporary use for a period of six (6) months or
more of, all or substantially all 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 operations
at the Project for a period of six (6) months or more).
(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 for the purposes contemplated by this Agreement 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.
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To exercise such option, the Company shall, within ninety (90) days following
the event authorizing such termination, give written notice to the Issuer and
the Bank, and to the Trustee if any of the Notes shall then be unpaid, and shall
specify therein the date of termination, which date shall be not less than
thirty (30) days nor more than ninety (90) days from the date such notice is
mailed, and in case of a redemption of the Notes in accordance with the
provisions of the Indenture, shall make arrangements satisfactory to the Trustee
for the giving of the required notice of redemption. In order to exercise such
option, the Company shall pay, or cause to be paid, on or prior to the
applicable redemption date, to the Trustee, an amount equal to the sum of the
following:
(1) An amount of money which, when added to the amount then on
deposit and available in the Note Fund, will be sufficient to pay, retire
and redeem all the Outstanding Notes on the earliest possible redemption
date after notice as provided in the Indenture, including, without
limitation, the principal amount thereof, all interest to accrue to said
redemption date and premium, if any, and expenses of redemption, plus
(2) An amount of money equal to the Trustee's fees and expenses
under the Indenture accrued and to accrue until such final payment and
redemption of the Notes, plus
(3) An amount of money equal to the Issuer's fees and expenses under
this Agreement accrued and to accrue until such final payment and
redemption of the Notes.
Section 9.3. Payment Under Letter of Credit. The Company's obligation to
make any payments under this Article IX shall be deemed satisfied and discharged
to the extent of the corresponding payment made by the Bank under the Letter of
Credit upon reimbursement by the Company to the Bank in full for such payment
pursuant to the terms of the Credit Agreement.
ARTICLE X
OBLIGATION TO TERMINATE AGREEMENT IN EVENT OF
A DETERMINATION OF TAXABILITY OR A
DETERMINATION OF UNENFORCEABILITY
Section 10.1. Obligation to Terminate Agreement. The Company shall be
obligated to terminate this Agreement and accordingly cause the Notes to be
redeemed, within one hundred eighty (180) days after a Determination of
Taxability (as defined below) or a Determination of Unenforceability (as defined
below) shall have occurred by paying or causing to be paid &n amount which, when
added to other funds on deposit in the Note Fund and available for such purpose,
is equal to (a) one hundred percent (100%) of the aggregate principal amount of
Notes Outstanding on the redemption date plus accrued interest to the redemption
date, plus (b) an amount of money equal to the Trustee's fees and expenses under
the Indenture accrued and to accrue until such purchase and redemption of the
Notes, plus (c) an amount of money equal to the Issuer's fees and expenses under
this Agreement accrued and to accrue until such purchase and redemption of the
Notes.
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A "Determination of Taxability" shall have been deemed to occur if a final
decree or judgment of any federal court or a final action of the Internal
Revenue Service determines that interest paid or payable on any Note is or was
includable in the gross income of an Owner of the Notes for federal income tax
purposes under the Code (other than an Owner who is a substantial user or
related person within the meaning of Section 103(b) of the Code). No such
decree, judgment, or action will be considered final for this purpose, however,
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 Owner of a Note, and until conclusion of any
appellate review, if sought. If the Trustee receives written notice from any
Owner of Notes stating that (i) the Owner of Notes has been notified in writing
by the Internal Revenue Service that it proposes to include the interest on any
Note in the gross income of such Owner of Notes for the reasons described
therein or any other proceeding has been instituted against such Owner of Notes
which may lead to a final decree, judgment, or action as described herein, and
(ii) such Owner of Notes will afford the Company the opportunity to contest the
same, either directly or in the name of the Owner of Notes, until a conclusion
of any appellate review, if sought, then the Trustee shall promptly give notice
thereof to the Company, the Issuer, the Bank and the Owner of each Note
Outstanding. The Trustee shall thereafter coordinate any similar requests or
notices it may have received from other Owners of Notes and shall keep them
informed of the progress of any administrative proceedings or litigation.
A "Determination of Unenforceability" shall have been deemed to occur if,
as a result of any changes in the Constitution of the State 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.
If a Determination of Taxability or a Determination of Unenforceability is
made, the Trustee shall give notice of the redemption of the Notes at the
earliest practicable date, but not later than the date specified in this
Article, and in the manner provided by Section 307 of the Indenture.
The Company's obligation to make any payments under this Article X shall
be deemed satisfied and discharged to the extent of the corresponding payment
made by the Bank under the Letter of Credit upon reimbursement by the Company to
the Bank in full for such payment pursuant to the terms of the Credit Agreement.
ARTICLE XI
MISCELLANEOUS
Section 11.1. Term of Agreement. This Agreement shall remain in full force
and effect from the date hereof to and including November 1, 2007, or until such
time as all of the Notes and the fees and expenses of the Issuer and the Trustee
and all amounts payable to the Bank under the Credit Agreement shall have been
fully paid or provision made for such payments,
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whichever is later; provided, however, that this Agreement may be terminated
prior to such date pursuant to Article IX of this Agreement.
Section 11.2. Notices. All notices, certificates or other communications
hereunder shall be sufficiently given and shall be deemed given when delivered
or mailed by registered mail, postage prepaid, addressed as follows:
if to the Issuer to:
Economic Development Corporation of the City of Plainwell
000 Xxxxx Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: President
if to the Company to:
Xxxxxx Xxxxxx Industrial Incorporated
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Secretary
with a copy to:
Xxxxxx Xxxxxx Incorporated
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Secretary
if to the Bank to:
First Interstate Bank
000 Xxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxx,
Letter of Credit Division
or if to the issuer of a Substitute Letter of Credit at its address designated
in writing to the Trustee. A duplicate copy of each notice, certificate or other
communication given hereunder by the Issuer or the Company shall also be given
to the Trustee, the Guarantor and the Bank. The Issuer, the Company, the
Guarantor, the Trustee, and the Bank may, by written notice given hereunder,
designate any further or different addresses to which subsequent notices,
certificates or other communications shall be sent.
Section 11.3. Binding Effect. This Agreement shall inure to the benefit of
and shall be binding upon the Issuer, the Company, the Bank, the Trustee, the
Owners of Notes and their
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respective successors and assigns, subject, however, to the limitations
contained in Sections 2.2(d) and 7.3 hereof.
Section 11.4. Severability. The invalidity or unenforceability of any one
or more phrases, sentences, clauses or Sections in this Agreement shall not
affect the validity or enforceability of the remaining portions of this
Agreement or any part thereof.
Section 11.5. Amounts Remaining in Funds. Subject to the provisions of
Sections 512 and 513 of the Indenture, it is agreed by the parties hereto that
any amounts remaining in the Note Fund or the Project Fund, or any other fund
created under the Indenture upon expiration or earlier termination of the Term
of Agreement, as provided in this Agreement, after payment in full of the Notes
(or provision for payment thereof having been made in accordance with the
provisions of the Indenture) and the fees and expenses of the Trustee in
accordance with the Indenture, shall belong to and be paid to the Company by the
Trustee.
Section 11.6. Amendments, Changes and Modifications. Subsequent to the
issuance of Notes and prior to their payment in full (or provision for the
payment thereof having been made in accordance with the provisions of the
Indenture), and except as otherwise herein expressly provided, this Agreement
may not be effectively amended, changed, modified, altered or terminated without
the written consent of the Trustee, the Guarantor and, prior to the Letter of
Credit Termination Date and payment of all amounts payable to the Bank under the
Credit Agreement, the consent of the Bank if required by the provisions of the
Indenture.
Section 11.7. Execution in 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.
Section 11.8. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State.
Section 11.9. Captions. The captions and headings in this Agreement are
for convenience only and in no way define, limit or describe the scope or intent
of any provisions or Sections of this Agreement.
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IN WITNESS WHEREOF, the Issuer has caused this Agreement to be executed in
its name and with its official seal hereunto affixed and attested by its duly
authorized officer and the Company has caused this Agreement to be executed in
its name and attested by its duly authorized officer, all as of the date first
above written.
[SEAL] ECONOMIC DEVELOPMENT
CORPORATION OF THE CITY OF
PLAINWELL
Attest: By:
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Secretary President
[SEAL] PLAINWELL PAPER CO., INC.
Attest: By:
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Title: Title:
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