CREDIT AGREEMENT
Among
ALCOOL, INC.,
PEREGRINE INDUSTRIES, INC.
and
SOUTHTRUST BANK, NATIONAL ASSOCIATION
February 1, 1999
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This instrument prepared by:
Xxxx X. Xxxxxxx
Xxxxxx & Xxxxxx, P.C.
X.X. Xxx 0000
Xxxxxxxxxx, Xxxxxxx 00000-0000
(000)000-0000
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TABLE OF CONTENTS
Parties .......................................................................... 1
Recitals ........................................................................... 1
ARTICLE 1
DEFINITIONS AND OTHER
PROVISIONS OF GENERAL APPLICATION
Section 1.01 Definitions............................................................... 2
Section 1.02 Effect of Headings and Table of Contents.................................. 7
Section 1.03 Date of Credit Agreement.................................................. 7
Section 1.04 Separability Clause....................................................... 7
Section 1.05 Counterparts.............................................................. 7
ARTICLE 2
ISSUANCE OF LETTER OF
CREDIT; REIMBURSEMENT AND FEES
Section 2.01 Issuance of the Letter of Credit.......................................... 8
Section 2.02 Reimbursement............................................................. 8
Section 2.03 Collateral Security....................................................... 8
Section 2.04 Fees...................................................................... 9
Section 2.05 Increased Costs.......................................................... 10
Section 2.06 Place and Time of Payments................................................ 11
Section 2.07 Late Payments............................................................. 11
Section 2.08 Computation of Charges.................................................... 12
Section 2.09 Statements of Account..................................................... 12
Section 2.10 Obligations of the Credit Obligors Absolute............................... 12
Section 2.11 Pledged Bonds............................................................. 13
ARTICLE 3
CONDITIONS PRECEDENT TO
ISSUANCE OF LETTER OF CREDIT
Section 3.01 Conditions Precedent to Issuance of Letter of Credit...................... 14
(i)
ARTICLE 4
REPRESENTATIONS AND COVENANTS
Section 4.01 General Representations of the Credit Obligors............................ 16
Section 4.02 Corporate Existence....................................................... 19
Section 4.03 Accounting Records........................................................ 19
Section 4.04 Reports to Bank........................................................... 19
Section 4.05 Incorporation of Covenants by Reference................................... 20
Section 4.06 Payment of Taxes.......................................................... 20
Section 4.07 Maintenance of Properties................................................. 21
Section 4.08 Operation of Collateral................................................... 21
Section 4.09 Amendments to Financing Documents......................................... 21
Section 4.10 Other Agreements.......................................................... 21
Section 4.11 Financing of Project...................................................... 21
Section 4.12 Maintenance of Insurance.................................................. 22
Section 4.13 Compliance with Environmental Laws........................................ 23
Section 4.14 Damage and Destruction.................................................... 23
Section 4.15 Condemnation.............................................................. 23
Section 4.16 Redemption of Bonds....................................................... 24
Section 4.17 Disposition of Collateral................................................. 25
Section 4.18 Creation of Liens..........................................................25
Section 4.19 Financing and Other Operating Covenants....................................25
Section 4.20 Subordination of Stockholder Indebtedness..................................26
ARTICLE 5
EVENTS OF DEFAULT AND REMEDIES
Section 5.01 Events of Default......................................................... 26
Section 5.02 Remedies.................................................................. 28
Section 5.03 Acceleration of Reimbursement............................................. 29
Section 5.04 No Remedy Exclusive....................................................... 30
Section 5.05 Agreement to Pay Attorneys' Fees.......................................... 30
Section 5.06 No Additional Waiver Implied by One Waiver................................ 30
Section 5.07 Remedies Subject to Applicable Law........................................ 30
Section 5.08 Waiver by Credit Obligors................................................. 31
(ii)
ARTICLE 6
MISCELLANEOUS
Section 6.01 No Waiver................................................................. 31
Section 6.02 Entire Agreement.......................................................... 31
Section 6.03 Review by Credit Obligors................................................. 31
Section 6.04 Waiver of Trial by Jury................................................... 31
Section 6.05 Notices................................................................... 32
Section 6.06 Indemnification........................................................... 33
Section 6.07 Liability of the Bank..................................................... 33
Section 6.08 Continuing Obligation..................................................... 34
Section 6.09 Governing Law............................................................. 34
Section 6.10 Costs, Expenses and Taxes................................................. 34
Testimonium ...........................................................................35
Signatures ...........................................................................35
Exhibit A Letter of Credit
Exhibit B Project Equipment
Exhibit C Project Site
(iii)
CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of February 1, 1999, is entered into
among ALCOOL, INC., a corporation organized and existing under the laws of the
State of Alabama ("Alcool"), PEREGRINE INDUSTRIES, INC., a corporation organized
under the laws of the State of Florida ("Peregrine") and SOUTHTRUST BANK,
NATIONAL ASSOCIATION, a national banking association with a principal place of
business in Montgomery, Alabama. Alcool and Peregrine are herein sometimes
collectively called the "Credit Obligors."
R E C I T A L S:
Alcool has requested that The Industrial Development Board of the City
of Xxxxxxxxxx (the "Board") issue its $2,460,000 aggregate principal amount of
Variable Rate Industrial Development Revenue Bonds (Alcool, Inc. Project) Series
1999 (the "Bonds") in order to provide long-term financing for the cost of
acquiring certain manufacturing machinery and related personal property for use
by Alcool in the manufacture of aluminum heat exchanger coils (the "Project
Equipment"). The Project Equipment will be located in a building (the "Project
Building") owned by the Board and leased to Industrial Partners, a general
partnership ("Industrial Partners"), pursuant to a Lease Agreement dated
February 1, 1999 (the "Building Lease"). The Project Building will be subleased
by Industrial Partners to Alcool pursuant to a Lease Agreement dated December 9,
1998 (the "Building Sublease").
The Bonds will be issued pursuant to a Trust Indenture dated February
1, 1999 (the "Indenture") between the Board and SouthTrust Bank, National
Association (acting in such capacity, the "Trustee"). The Board will use the
proceeds of the Bonds (i) to reimburse Alcool for sums previously expended by
Alcool for the Project Equipment and (ii) to pay the remaining costs of the
Project Equipment. The Board will lease the Project Equipment to Alcool pursuant
to a Lease Agreement dated as of February 1, 1999 (the "Lease Agreement") and
Alcool will pay rent to the Board sufficient to pay the debt service on the
Bonds.
As security for the payment of the Bonds, the Credit Obligors will
cause SouthTrust Bank, National Association (herein, in its capacity as issuer
of the initial letter of credit referred to below, called the "Bank"), to issue
an irrevocable letter of credit in favor of the Trustee in the amount of (i) the
aggregate principal amount of the Bonds, to enable the Trustee to pay the
principal amount of the Bonds when due and to pay the principal portion of the
purchase price of Bonds tendered (or deemed tendered) for purchase, plus (ii)
interest on the Bonds for a period of 50 days at the rate of 13% per annum, to
enable the Trustee to pay interest on the Bonds when due and to pay the interest
portion of the purchase price of Bonds tendered (or deemed tendered) for
purchase. The initial letter of credit to be delivered to the Trustee and any
substitute letter of credit delivered to the Trustee pursuant to the Indenture
are herein referred to as the "Letter of Credit."
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As security for the Credit Obligors' obligations under this Agreement
with respect to the Letter of Credit, Alcool and the Board will execute a
Mortgage, Security Agreement and Assignment of Rents and Leases dated as of
February 1, 1999 (the "Mortgage") in favor of the Bank, whereby the Bank will be
granted a mortgage on and security interest in the Project Equipment and the
interest of Alcool as lessee under the Building Sublease.
As additional security for the Credit Obligors' obligations under this
Agreement with respect to the Letter of Credit, Xxxxxxx X. Xxxxxxxxx, Xx. will
execute an Individual Guaranty Agreement dated as of February 1, 1999 in favor
of the Bank and Peregrine Global, Inc., a United States Virgin Islands
corporation will execute a Corporate Guaranty Agreement dated as of February 1,
1999 in favor of the Bank.
References herein to the "Creditor Obligors" refers to the Credit
Obligors, jointly and severally, unless the context clearly indicates to the
contrary.
NOW, THEREFORE, in consideration of the premises and in order to induce
the Bank to issue the Letter of Credit, the Credit Obligors and the Bank hereby
covenant, agree, and bind themselves as follows:
ARTICLE 1
DEFINITIONS AND OTHER
PROVISIONS OF GENERAL APPLICATION
Section 1.01 Definitions
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(1) The terms defined in this Article have the meanings assigned to
them in this Article. Singular terms shall include the plural as well as the
singular and vice versa.
(2) All accounting terms not otherwise defined herein have the meanings
assigned to them, and all computations herein provided for shall be made in
accordance with generally accepted accounting principles, consistently applied.
All references herein to "generally accepted accounting principles" refer to
such principles as they exist at the date of application thereof.
(3) All references in this instrument to a designated "Article,"
"Section" or other subdivision are to the designated articles, sections, and
subdivisions of this instrument as originally executed.
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(4) The terms "herein," "hereof," and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
article, section or other subdivision.
(5) The term "person" shall include any individual, corporation,
partnership, limited liability company, joint venture, association, trust,
unincorporated organization and any government or any agency or political
subdivision thereof.
(6) Capitalized terms not otherwise defined in this Article shall have
the meaning assigned in the Indenture.
(7) As used in this Agreement, the following terms shall have the
following meanings unless the context hereof shall otherwise indicate:
"A Drawing" shall mean a drawing under the Letter of Credit to pay
the principal of the Bonds due to maturity, redemption, or
acceleration.
"Alcool" shall mean Alcool, Inc., a corporation organized and
existing under the laws of the State of Alabama, and its successors and
assigns as permitted herein.
"B Drawing" shall mean a drawing under the Letter of Credit to pay
interest on the Bonds.
"Bank" shall mean SouthTrust Bank, National Association, a national
banking association with a principal place of business in Montgomery,
Alabama, in its capacity as the issuer of the Letter of Credit, and its
successors and assigns.
"Base Rate" shall mean the variable rate of interest designated by
the Bank periodically as the Bank's Base Rate. The Base Rate is not
necessarily the lowest rate charged by the Bank. The Base Rate on the
date of this Agreement is 7.5%.
"Board" shall mean The Industrial Development Board of the City of
Xxxxxxxxxx, a public corporation organized and existing under the laws
of the State of Alabama, and its successors and assigns.
"Bonds" shall mean the $2,460,000 aggregate principal amount of
Variable Rate Industrial Development Revenue Bonds (Alcool, Inc.
Project) Series 1999 issued by the Company pursuant to the Indenture.
"Building Lease" shall mean the Lease Agreement dated as of
February 1, 1999 pursuant to which the Board has leased the Project
Site and Project Building to Industrial Partners.
3
"Building Sublease" shall mean the Lease Agreement dated December
9, 1998 pursuant to which Industrial Partners has subleased the Project
Site and the Project Building to Alcool.
"Business Day" shall mean any day other than (i) a Saturday or
Sunday; (ii) a day on which banking institutions are required or
authorized to remain closed in (A) the city in which the principal
office of the Trustee is located, (B) the city in which the principal
office of the Remarketing Agent is located, or (C) the city in which
the office of the Bank where drawings under the Letter of Credit are to
be made is located; or (iii) a day on which the payment system of the
Federal Reserve System is not operational.
"C Drawing" shall mean a drawing under the Letter of Credit to pay
the purchase price of Tendered Bonds.
"Collateral" shall mean all property and rights mortgaged,
assigned, pledged, or otherwise subject to the lien of the Mortgage,
the Deerfield Security Agreement and all other collateral from time to
time securing the Obligations.
"Corporate Guarantor" shall mean Peregrine Global, Inc., a United
States Virgin Islands corporation.
"Corporate Guaranty Agreement" shall mean the Corporate Guaranty
Agreement dated as of February 1, 1999 executed by the Corporate
Guarantor in favor of the Bank.
"Credit Agreement" or "Agreement" shall mean this instrument as
originally executed or as it may from time to time be supplemented,
modified or amended by one or more instruments entered into pursuant to
the applicable provisions hereof.
"Credit Amount" shall mean the maximum amount available to be drawn
under the Letter of Credit, as reduced from time to time and reinstated
from time to time pursuant to the terms and conditions thereof.
"Credit Obligors" shall mean, collectively, Alcool and Peregrine.
References herein to the Credit Obligors shall mean each of the Credit
Obligors acting individually and the Credit Obligors acting jointly
unless the context clearly indicates to the contrary.
"Deerfield Equipment" shall mean the machinery, equipment and other
personal property owned by Peregrine as shown on Exhibit B hereto as
the "Deerfield Equipment."
4
"Deerfield Security Agreement" shall mean the Security Agreement
dated as of February 1, 1999 between Peregrine and the Bank relating to
the Deerfield Equipment.
"Event of Default" shall have the meanings stated in Section 5.01
hereof. An Event of Default shall "exist" if an Event of Default shall
have occurred and be continuing.
"Financing Documents" shall mean the Indenture, the Lease
Agreement, the Building Sublease, this Agreement, the Mortgage, the
Deerfield Security Agreement, the Individual Guaranty Agreement and the
Corporate Guaranty Agreement.
"Financing Participants" shall mean the Credit Obligors, the Board,
the Bank, the Trustee, the Individual Guarantor, the Corporate
Guarantor, the Remarketing Agent and the holders of the Bonds.
"Indenture" shall mean that certain Trust Indenture dated as of
February 1, 1999, between the Board and the Trustee relating to the
Bonds, including any amendments or supplements to such instrument from
time to time entered into pursuant to the applicable provisions
thereof.
"Individual Guarantor" shall mean Xxxxxxx X. Xxxxxxxxx, Xx.
"Individual Guaranty Agreement" shall mean the Individual Guaranty
Agreement dated as of February 1, 1999 executed by the Individual
Guarantor in favor of the Bank.
"Lease Agreement" shall mean the Lease Agreement dated as of
February 1, 1999 between the Board, as lessor, and Alcool, as lessee,
relating to the Project Equipment, including any amendments or
supplements to such instrument from time to time entered into pursuant
to the applicable provisions thereof.
"Letter of Credit" shall mean the letter of credit with respect to
the Bonds to be issued by the Bank in favor of the Trustee pursuant to
this Agreement substantially in the form of Exhibit A.
"Mortgage" shall mean that certain Mortgage, Security Agreement and
Assignment of Rents and Leases dated as of February 1, 1999, executed
by Alcool and the Board in favor of the Bank, securing the obligations
of the Credit Obligors under this Agreement, including any amendments,
modifications, restatements, consolidations or supplements to such
instrument from time to time entered into pursuant to the applicable
provisions thereof.
5
"Obligations" shall mean all indebtedness or obligations of the
Credit Obligors to the Bank under this Agreement or secured by the
Mortgage, including without limitation (i) the Credit Obligors'
obligation to reimburse the Bank for draws made under the Letter of
Credit and (ii) the Credit Obligors' obligation to pay fees and charges
to the Bank for the issuance and continuation of the Letter of Credit.
"Peregrine" shall mean Peregrine Industries, Inc., a corporation
organized and existing under the laws of the State of Florida, and its
successors and permitted assigns.
"Pledged Bonds" shall mean the Bonds purchased pursuant to the
optional or mandatory tender provisions of the Indenture with moneys
drawn under the Letter of Credit.
"Project" shall mean the Project Site, the Project Building and the
Project Equipment, as they may at any time exist.
"Project Building" shall mean the certain building and all other
structures now located on the Project Site or hereafter acquired or
constructed on the Project Site.
"Project Equipment" shall mean the machinery, equipment,
furnishings, fixtures and other personal property described on Exhibit
B (not including the Deerfield Equipment) and all other machinery,
equipment, furnishings, fixtures and other personal property of Alcool
now or hereafter located on the Project Site and used in the operation
of the Project.
"Project Site" shall mean the real property described in Exhibit C
hereto.
"Remarketing Agent" shall mean Merchant Capital, L.L.C. or its
successor or successors under the Remarketing Agreement.
"Remarketing Agreement" shall mean that certain Remarketing
Agreement dated as of February 1, 1999 among Alcool, the Board and
Merchant Capital, L.L.C., as remarketing agent.
"Revolving Line of Credit" shall mean the Revolving Line of Credit
from SouthTrust Bank, National Association to Peregrine in the current
maximum principal amount of $1,000,000.
"Security Documents" shall mean the Mortgage, the Deerfield
Security Agreement, the Individual Guaranty Agreement and the Corporate
Guaranty Agreement.
6
"Stated Expiration Date" shall mean the date on which the Letter of
Credit will, by its terms, expire unless the Letter of Credit is
terminated on an earlier date in accordance with its terms.
"Subsidiary" shall mean any corporation, limited liability company,
partnership, or other business association of which either of the
Credit Obligors and/or one or more subsidiaries owns directly or
indirectly, 50% or more of capital stock or equity interest.
"Tendered Bonds" shall mean Bonds tendered (or deemed tendered) for
purchase pursuant to the optional or mandatory tender provisions of the
Indenture.
"Termination Date" shall mean the Stated Expiration Date, or such
earlier date on which the Letter of Credit terminates in accordance
with its terms.
"Trustee" shall mean SouthTrust Bank, National Association, a
national banking association with a principal place of business in
Birmingham, Alabama, in its capacity as trustee under the Indenture,
and its successors and assigns.
Section 1.02 Effect of Headings and Table of Contents
The article and section headings herein and in the Table of Contents
are for convenience only and shall not affect the construction hereof.
Section 1.03 Date of Credit Agreement
The date of this Agreement is intended as and for a date for the
convenient identification of this Credit Agreement and is not intended to
indicate that this Agreement was executed and delivered on said date.
Section 1.04 Separability Clause
If any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Section 1.05 Counterparts
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed an original, but all such counterparts shall
together constitute but one and the same instrument.
7
ARTICLE 2
ISSUANCE OF LETTER OF
CREDIT; REIMBURSEMENT AND FEES
Section 2.01 Issuance of the Letter of Credit
(a) The Credit Obligors hereby request and instruct the Bank to issue
the Letter of Credit substantially in the form provided in Exhibit A hereto. The
Bank hereby agrees to issue the Letter of Credit, subject to the terms and
conditions of this Agreement.
(b) The Letter of Credit shall be issued on the date of delivery of the
Bonds to the original purchaser or purchasers thereof from the Board.
Section 2.02 Reimbursement
(a) On each date that the Bank honors any A Drawing or B Drawing under
the Letter of Credit, the Credit Obligors shall immediately reimburse the Bank
for the amount of such draw.
(b) The Credit Obligors shall reimburse the Bank for the amount of any
C Drawing within 90 days after the date such C Drawing is honored (or, if
sooner, on the Termination Date). In addition, the Credit Obligors shall pay to
the Bank interest on the unreimbursed amount of each C Drawing at a variable per
annum rate equal to the Base Rate plus 2% from the date such C Drawing is paid
by the Bank until the amount of such C Drawing is reimbursed in full to the
Bank. Such interest shall be payable in arrears on the first day of each month
following such C Drawing and on the date that such C Drawing is reimbursed in
full to the Bank.
(c) No interest shall be payable with respect to a C Drawing if the
Bank is reimbursed in full for such C Drawing by 12:00 noon (Montgomery, Alabama
time) on the same date that such C Drawing is paid by the Bank.
(d) All amounts received by the Bank in respect of principal, premium
or interest on Pledged Bonds shall be credited first against interest payable on
the unreimbursed amount of the C Drawing with respect to such Pledged Bonds and
the balance, if any, shall be credited against the amount of such C Drawing.
(e) Anything herein to the contrary notwithstanding, the Credit
Obligors will not reimburse the Bank for any A Drawing, B Drawing or C Drawing
until the same has been honored in full by the Bank, and no such reimbursement
shall be prepaid.
8
Section 2.03 Collateral Security
As security for the performance of its Obligations under this
Agreement, Alcool and the Board shall execute the Mortgage and Peregrine shall
execute the Deerfield Security Agreement and deliver the same to the Bank
simultaneously with the delivery of this Agreement. In addition the Credit
Obligors shall cause the Individual Guarantor to execute the Individual Guaranty
Agreement and an assignment of life insurance on the life of Xxxxxxx X.
Xxxxxxxxx, Xx. in an amount not less than $750,000 and the Corporate Guarantor
to execute the Corporate Guaranty Agreement and deliver the same to the Bank
simultaneously with the delivery of this Agreement. The Obligations shall be
further secured by all security securing the Revolving Line of Credit.
Section 2.04 Fees
(a) The Credit Obligors agree to pay to the Bank an annual fee
calculated at the rate of 1.5% per annum on the daily average of the Credit
Amount available during the next succeeding year under the Letter of Credit. The
annual fee shall be payable in advance on the date of issuance of the Letter of
Credit for the period beginning on such date and ending on June 15, 1999 and
thereafter on each June 15 for the annual period beginning on June 16 and ending
on the next June 15 (or, if sooner, the Termination Date). Fees payable for the
first and the last annual payment shall be prorated based on the number of days
during which the Letter of Credit is outstanding during such periods.
(b) The fees payable for each annual period specified in subsection (a)
above shall be calculated on the assumption that the Credit Amount available
under the Letter of Credit on such due date will be available for the entire
annual period for which such commission is payable. At the end of such annual
period, the fee shall be recalculated based on the actual daily average of the
Credit Amount for such period and the difference, if any, shall be added to or
subtracted from, as the case may be, the next annual payment or, if no fee is
payable for the ensuing period, shall be paid to the party entitled thereto
within ten days of the end of such last period; provided, however, no adjustment
shall be made for reductions in the Credit Amount made during the last 15 days
(June 1 through June 15) of the annual period. If a Substitute Letter of Credit
is obtained by the Credit Obligors, no refund of fees already paid shall be
allowed for any period after the cancellation of the Letter of Credit unless the
Bank notified the Credit Obligors after such commission was paid that increased
costs will be payable pursuant to Section 2.05.
(c) Fees payable for the first annual period with respect to the
Letter of Credit shall be fully earned and shall be nonrefundable in the event
the Letter of Credit terminates during or at the end of such period. For each
annual period thereafter, if the Letter of Credit expires or terminates, the
Credit Obligors shall be entitled to a rebate of the annual fee paid with
respect to the expired or terminated Letter of Credit based upon the number of
days remaining in the annual period during which such termination occurs.
9
(d) In addition to the fees payable under subsection (a) above, the
Credit Obligors shall pay to the Bank such amount as shall at the time of a
transfer of the Letter of Credit then be the charge which the Bank is
customarily making for transfers of similar letters of credit. Such charges
shall be paid within ten days of receipt by the Credit Obligors of a written
statement therefor.
(e) For each draw on the Letter of Credit the Credit Obligors shall pay
a processing fee in the amount of $75. The processing fee shall be due on the
date such draw is made.
Section 2.05 Increased Costs
(a) If, after the date of delivery of this Agreement, any change in any
law or regulation or in the interpretation, administration or enforcement
thereof by any court or governmental authority charged with the administration
thereof or any action by any governmental authority (whether or not constituting
or resulting from such change) shall either
(1) impose, modify or deem applicable any reserve, assessment,
special deposit or similar requirement against letters of credit issued
by the Bank, or
(2) impose on the Bank any other condition regarding this
Agreement or the Letter of Credit,
and the result of any such event shall be to increase the cost to the Bank of
issuing or maintaining the Letter of Credit (which increase in cost shall be the
result of the Bank's reasonable allocation of the aggregate of such cost
increases resulting from such events and shall be calculated without giving
effect to any participation granted in the Letter of Credit), then, upon demand
by the Bank, the Credit Obligors shall pay to the Bank from time to time, within
30 days of the Credit Obligors' receipt of the certificate referred to in
paragraph 2.05(b) below, as specified by the Bank in writing, such additional
amounts which shall be sufficient to compensate the Bank for the portion of such
increased costs that are allocable to the Letter of Credit.
(b) The Bank shall deliver to the Credit Obligors a certificate as to
such increased costs incurred by the Bank as a result of any event referred to
in subsection (a) of this Section, and such certificate shall be conclusive,
absent manifest error, as to the amount thereof. In making the determination
contemplated by such certificate, the Bank may make such reasonable estimates,
assumptions, allocations, and the like that the Bank deems to be appropriate.
(c) The Bank shall make a good faith effort to notify the Credit
Obligors when the Bank becomes aware of circumstances that may in the future
require the imposition of increased costs pursuant to this Section, but the
failure to give such notice shall not preclude the imposition of such increased
costs.
10
(d) If, after the date of this Agreement, the Bank shall have
determined that the adoption or implementation of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Bank with any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on the Bank's capital, on this credit facility or
otherwise, as a consequence of its obligations hereunder and under the Letter of
Credit to a level below that which the Bank could have achieved but for such
adoption, change or compliance (taking into consideration the Bank's policies
with respect to capital adequacy) by an amount deemed by the Bank to be
material, then from time to time, promptly upon demand by the Bank, the Credit
Obligors hereby agree to pay the Bank such additional amount or amounts as will
compensate the Bank for such reduction. A certificate of the Bank claiming
compensation under this subsection and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive absent manifest error. In
determining any such amount, the Bank may use any reasonable averaging and
attribution methods.
(e) Upon the occurrence of any of the events described in paragraphs
2.05(a) or (d) above, the Credit Obligors may, at its option, provide a
substitute letter of credit for the Letter of Credit, in which event the Bank
will refund any prepaid Letter of Credit fees provided all Obligations have been
paid in full.
Section 2.06 Place and Time of Payments
(a) All payments by the Credit Obligors to the Bank hereunder shall be
made in lawful currency of the United States and in immediately available funds
to the Bank at its address set forth in Section 6.05 hereof or at such other
address within the continental United States as shall be specified by the Bank
by notice to the Credit Obligors.
(b) All amounts payable by the Credit Obligors to the Bank hereunder
for which a payment date is expressly set forth herein (including without
limitation payments due pursuant to Sections 2.02 and 2.04) shall be payable
without notice or written demand by the Bank. All amounts payable by the Credit
Obligors to the Bank hereunder for which no payment date is expressly set forth
herein shall be payable on written demand by the Bank to the Credit Obligors
within 15 days of receipt thereof.
(c) The Bank may, at its option, send written notice to the Credit
Obligors of amounts payable pursuant to Sections 2.02 and 2.04, but the failure
to send such notice shall not affect or excuse the Credit Obligors' obligation
to make payment of the amounts required by such Sections on the due date
specified in such Sections.
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(d) Payments which are due on a day which is not a Business Day shall
be payable on the next succeeding Business Day, and any interest payable thereon
shall be payable for such extended time at the specified rate.
Section 2.07 Late Payments
With respect to all amounts payable to the Bank by the Credit Obligors
pursuant to this Article (i) which are not paid on the due date, in the case of
amounts payable on a specified date, or (ii) which are not paid within 15 days
of written notice to the Credit Obligors, in the case of amounts payable on
demand, the Credit Obligors agree to pay to the Bank on demand interest at a
variable per annum rate equal to 2% in excess of the Base Rate for each day from
the specified date of payment, or the date of written demand for payment, as the
case may be, to the date payment is made.
Section 2.08 Computation of Charges
The interest and charges provided for in this Agreement payable in
arrears based upon annual rates shall be computed on the basis of a 360-day year
of 12 consecutive 30-day months, for actual days elapsed. All interest rates
based upon the Base Rate shall change when and as the Base Rate shall change,
effective on the opening of business on the date of any such change, unless such
change is announced after the close of regular banking hours, in which case such
change shall be effective on the following day.
Section 2.09 Statements of Account
The Bank will deliver to the Credit Obligors within a reasonable time
after request a statement of charges and payments made pursuant to this
Agreement.
Section 2.10 Obligations of the Credit Obligors Absolute
The obligations of the Credit Obligors under this Agreement shall be
absolute, unconditional, and irrevocable and shall be paid strictly in
accordance with the terms of this Agreement, under all circumstances whatsoever,
including, without limitation, the following:
(1) any lack of validity or enforceability of all or any of the
Letter of Credit, the Bonds, or any Financing Document;
(2) any amendment or waiver of or any consent to departure from all
or any of the Letter of Credit, the Bonds, or any Financing Document
unless consented to in writing by the Bank and the Credit Obligors;
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(3) the existence of any claim, setoff, defense or other rights
which the Credit Obligors may have at any time against any Financing
Participant, or any other person or entity, whether in connection with
this Agreement, the Letter of Credit, the Bonds, or any Financing
Document, or any unrelated transaction;
(4) any statement or any other document presented under the Letter
of Credit proves to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein proves to be untrue or inaccurate
in any respect whatsoever;
(5) payment by the Bank under the Letter of Credit against
presentation of a draft or certificate which does not comply with the
terms of the Letter of Credit, provided such payment shall not have
constituted gross negligence or willful misconduct by the Bank; and
(6) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, provided the same shall not have
constituted gross negligence or willful misconduct by the Bank.
No act of commission or omission of any kind at any time on the part of
the Bank in respect of any matter whatsoever, except for the gross negligence or
willful misconduct of the Bank, shall in any way affect or impair any right,
power or benefit of the Bank under this Agreement and, to the extent permitted
by applicable law, no setoff, claim, reduction, diminution of any obligation, or
any defense of any kind or nature which the Credit Obligors may have against the
Bank, except for the gross negligence or willful misconduct of the Bank, shall
be available against the Bank in any suit or action brought by the Bank to
enforce any right, power or benefit under this Agreement.
Section 2.11 Pledged Bonds
(a) As additional security for the performance of its obligations under
this Agreement, Alcool hereby pledges, assigns, hypothecates and transfers to
the Bank all of its right, title and interest in and to the Pledged Bonds, and
does hereby grant to the Bank a security interest in the Pledged Bonds and all
amounts payable thereon and the proceeds thereof.
(b) If the Bank is reimbursed for the purchase price of Pledged Bonds
with respect to which a C Drawing has been made, such Pledged Bonds shall be
released from the pledge and assignment made hereby and shall be delivered to or
upon the order of Alcool.
(c) All payments of principal and interest on Pledged Bonds shall be
made directly to the Bank. If, while the Bank or its designated agent holds
Pledged Bonds, Alcool shall receive any interest or principal payment in respect
of such Pledged Bonds, Alcool agrees to accept the same as agent for the Bank
and to hold the same in trust on behalf of the Bank and to deliver the same
forthwith to the Bank. All sums of money so paid in respect of principal,
premium or interest on
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such Pledged Bonds which are received by Alcool and paid to the Bank, or which
shall be received directly by the Bank from the Trustee, shall be credited
against the reimbursement obligation of the Credit Obligors as provided in
Section 2.02(d).
(d) If an Event of Default exists, the Bank may, without notice,
exercise all rights, privileges or options pertaining to any Pledged Bonds as if
it were the absolute owner thereof, upon such terms and conditions as it may
determine, all without liability except to account to Alcool for property
actually received by it. In addition to the rights and remedies granted to it in
this Agreement, the Bank or its designated agent shall have the authority to
exercise all rights and remedies of a secured party under the Alabama Uniform
Commercial Code. The Credit Obligors shall be liable for the deficiency if the
proceeds of any sale or other disposition of the Pledged Bonds and the
Collateral are insufficient to pay all amounts to which the Bank is entitled.
The Bank shall have no duty to exercise any of such rights, privileges or
options and shall not be responsible for any failure to do so or any delay in so
doing.
(e) Except as contemplated herein, without the prior written consent of
the Bank, Alcool agrees that it will not sell, assign, transfer, exchange, or
otherwise dispose of, or grant any option with respect to, the Pledged Bonds,
nor will it create, incur or permit to exist any pledge, lien, mortgage,
hypothecation, security interest, charge, option or any other encumbrance with
respect to any of the Pledged Bonds, or any interest therein, or any proceeds
thereof, except for the lien and security interest provided for by this
Agreement.
(f) Alcool further agrees to do or cause to be done all such other
reasonable acts and things as may be necessary to make any disposition or sale
of any portion or all of the Pledged Bonds permitted by this Agreement valid and
binding and in compliance with any and all applicable laws, regulations, orders,
writs, injunctions, decrees or awards of any and all courts or governmental
authorities having jurisdiction over any such disposition or sales, all at
Alcool's expense.
ARTICLE 3
CONDITIONS PRECEDENT TO
ISSUANCE OF LETTER OF CREDIT
Section 3.01 Conditions Precedent to Issuance of Letter of Credit
The obligation of the Bank to issue the Letter of Credit is subject to
the receipt by the Bank of the following documents, each of which shall be
satisfactory to the Bank in form and substance:
(1) Financing Documents. An executed counterpart of each of the
Financing Documents.
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(2) Issuance of Bonds. Evidence that the Bonds shall have been
executed, issued, authenticated, and delivered by the Board to the
purchaser thereof.
(3) Official Statement. A copy of the Official Statement
distributed in connection with the offering and sale of the Bonds,
executed or certified on behalf of Alcool and the Board.
(4) Opinion of Bond Counsel. An opinion of bond counsel (Xxxxxx &
Xxxxxx, P.C., Montgomery, Alabama) in form and substance satisfactory
to the Bank.
(5) Opinion of Counsel for the Credit Obligors. An opinion of
counsel for the Credit Obligors (Xxxxxx & Xxxxxx, P.C., Montgomery,
Alabama) in form and substance satisfactory to the Bank.
(6) Opinion of Counsel for the Board. An opinion of counsel for the
Board (Xxx X. Xxxxxxxxxx, Xx.) in form and substance satisfactory to
the Bank.
(7) Approvals of Credit Obligors. A certified copy of proceedings
of the Credit Obligors with respect to actions respectively taken by
the Credit Obligors approving the Financing Documents and the
consummation of the transactions contemplated thereby.
(8) Certificates of the Credit Obligors. A certificate by each of
the Credit Obligors to the effect that, as of the date of delivery of
the Letter of Credit and after giving effect thereto: (i) no Event of
Default shall have occurred and be continuing; (ii) no event shall have
occurred and be continuing which, with notice or lapse of time or both,
would constitute an Event of Default under this Agreement, and (iii)
the representations and warranties made by the Credit Obligor in
Section 4.01 hereof shall be true on and as of such date with the same
force and effect as if made on and as of such date.
(9) Insurance. Copies of all insurance policies required hereby.
(10) UCC Report. A report from the offices where Uniform Commercial
Code financing statements would be properly filed with respect to
property and interests of the Credit Obligors located in the State of
Alabama and the State of Florida indicating that there are no liens
against that portion of the Collateral constituting personal property
except for liens as shall be acceptable to the Bank.
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(11) Corporate Guaranty Agreement. The Corporate Guaranty Agreement
of Peregrine Global, Inc. in favor of the Bank guaranteeing all of the
obligations of the Credit Obligors hereunder.
(12) Individual Guaranty Agreement. The Individual Guaranty
Agreement of Xxxxxxx X. Xxxxxxxxx, Xx. in favor of the Bank
guaranteeing all of the Obligations of the Credit Obligors hereunder.
(13) Building Sublease. The Building Sublease.
(14) Origination Fee. Payment of the origination fee in the amount
of .25% of the face amount of the Letter of Credit.
(15) Appraisal. An appraisal of the Deerfield Equipment and such
other additional personal property constituting Collateral (not
including, however, collateral to be purchased with the proceeds of the
Bonds) which appraisal must indicate a value of not less than an amount
equal to 20% of the face amount of the Letter of Credit.
(16) Landlord's Lien Waiver and Non-Disclosure Agreement. An
agreement executed by the owner and any mortgagee of the Project
Building and Project Site, in form satisfactory to the Bank,
recognizing the Bank's security interest in the collateral and waiving
all liens prior thereto.
(17) Additional Evidence. Such additional legal opinions,
certificates, proceedings, instruments, and other documents as the Bank
or its counsel may reasonably request to evidence (i) compliance by the
Credit Obligors with legal requirements, (ii) the truth and accuracy,
as of the date of delivery of the Letter of Credit, of the
representations of Credit Obligors contained in the Financing
Documents, and (iii) the due performance or satisfaction by the Credit
Obligors, at or prior to the date of delivery of the Letter of Credit,
of all agreements then required to be performed and all conditions then
required to be satisfied by the Credit Obligors pursuant to the
Financing Documents.
Any proposed material change in the cost budget for the Project from the cost
budget originally approved by the Bank shall be subject to the Bank's approval.
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ARTICLE 4
REPRESENTATIONS AND COVENANTS
Section 4.01 General Representations of the Credit Obligors
The Credit Obligors each individually make the following
representations and warranties as the basis for the undertakings herein
contained:
(1) It is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Alabama, in the case of
Alcool, and the State of Florida, in the case of Peregrine, and is
authorized to do business in all jurisdictions in which the character
of its properties or the nature of its business requires such
qualifications or authorization.
(2) It has the power and authority to own its properties and assets
and to carry on its business as now being conducted and as now proposed
to be conducted.
(3) Its financial statements that have been furnished to the Bank
are complete and correct in all material respects and fairly present
its financial condition as of the date or dates indicated and for the
periods involved. There has been no materially adverse change in its
financial condition or operations since the date of its most recent
financial statements furnished to the Bank.
(4) It has good and marketable title to all its properties and
assets reflected on its most recent balance sheet furnished to the
Bank, except for such properties and assets as have been disposed of
since the date of such balance sheet as no longer used or useful in the
conduct of its business or as have been disposed of in the ordinary
course of its business. All such properties and assets are free and
clear of liens of any nature, except as disclosed in such financial
statements.
(5) It has filed or caused to be filed all federal, state and local
tax returns which are required to be filed by it as of the date hereof,
and has paid or caused to be paid all taxes as shown on such returns or
on any assessments received by it to the extent that such taxes have
become due and payable, except such taxes or returns the failure to pay
or file would not have a material adverse affect on the business or
operations of the Credit Obligors.
(6) It has not used, and does not intend to use, any part of the
proceeds of the Bonds, and has not incurred any indebtedness to be
reduced, retired, or purchased by it out of such proceeds, for the
purpose of purchasing or carrying any margin stock within the meaning
of Regulation U of the Board of Governors of the Federal Reserve
System, and it does not own and has no intention of acquiring any such
margin stock.
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(7) The execution and delivery of the Financing Documents to which
it is a party does not involve any prohibited transaction within the
meaning of the Employee Retirement Income Security Act of 1974, as
amended (ERISA), of the Internal Revenue Code. It has fulfilled its
obligations, if any, under minimum funding standards of ERISA and is in
compliance in all material respects with the applicable provisions of
ERISA.
(8) It has full legal power to consummate the transactions
contemplated by the Financing Documents to which it is a party.
(9) By proper action of its Board of Directors and Stockholders it
has duly authorized the execution and delivery of the Financing
Documents to which it is a party and the consummation of the
transactions contemplated therein.
(10) It has obtained all consents, approvals, authorizations, and
orders of governmental authorities that are required to be obtained by
it as a condition to the execution and delivery of the Financing
Documents to which it is a party.
(11) The execution and delivery by it of the Financing Documents to
which it is a party and the consummation by it of the transactions
contemplated therein do not and will not (i) conflict with, be in
violation of, or constitute (upon notice or lapse of time or both) a
default under its articles of incorporation or bylaws or any indenture,
mortgage, deed of trust or other contract, agreement or instrument to
which it is a party or is subject, or any resolution, order, rule,
regulation, writ, injunction, decree or judgment of any governmental
authority or court having jurisdiction over it which would result in a
material adverse effect on the business or operations of the Credit
Obligors or (ii) result in or require the creation or imposition of any
lien of any nature upon or with respect to any of its properties now
owned or hereafter acquired, except as contemplated by the Financing
Documents.
(12) The Financing Documents to which it is a party constitute
legal, valid, and binding obligations and are enforceable against it in
accordance with the terms of such instruments, except as enforcement
thereof may be limited by (i) bankruptcy, insolvency, or other similar
laws affecting the enforcement of creditors' rights and (ii) general
principles of equity, regardless of whether such enforceability is
considered in a proceeding at equity or at law.
(13) Except as described in the Official Statement relating to the
Bonds, there is no action, suit, proceeding, inquiry or investigation
pending before any court or governmental authority, or, to the best of
the Credit Obligor's knowledge, threatened against it or affecting it
or its properties, that (i) involves the consummation of the
transactions contemplated by, or the validity or enforceability
18
of, any of the Financing Documents or (ii) could have a materially adverse
impact upon its financial condition or operations.
(14) All utility and sanitary sewage services necessary for the use
of the Project are available to the Project.
(15) Neither the Credit Obligor nor any of the Collateral is in
violation of any easements, covenants or restrictions affecting any the
Collateral, the violation of which could have a material adverse effect
on the business or operations of the Credit Obligor.
(16) It has obtained all necessary licenses, franchises, permits,
certificates of need and other authorizations necessary for the
operation of the Collateral under applicable laws, ordinances, and
regulations, except where the failure to do so would not have a
material adverse affect on the business or operations of the Credit
Obligor.
(17) Neither the Collateral nor the Credit Obligors are in material
violation of, or subject to, any existing, pending, or to the Credit
Obligors' knowledge, threatened investigation or inquiry by any
governmental authority or any remedial obligations under any applicable
laws, rules or regulations pertaining to health or the environment,
including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended ("CERCLA")
or the Resource Conservation and Recovery Act of 1976, as amended
("RCRA"), and there are no facts, conditions or circumstances known to
them which are likely to result in any such investigation or inquiry if
such facts, conditions and circumstances, if any, were fully disclosed
to the applicable governmental authority, and the Credit Obligors will
promptly notify the Bank if the Credit Obligors become aware of any
such facts, conditions or circumstances or any such investigation or
inquiry; the Credit Obligors have obtained all material permits,
licenses, or similar authorizations to construct, occupy, operate or
use any buildings, improvements, fixtures or equipment in connection
with the Collateral constructed or to be constructed by reason of any
environmental laws, rules or regulations; no oil, toxic or hazardous
substances, solid wastes, irritants, contaminants, or infectious or
medical wastes have been disposed of or released at the site of the
Collateral, except in the ordinary course of business and in compliance
with all applicable laws and regulations, and the Credit Obligors agree
that they will not in their use of such property dispose of or release
oil, toxic or hazardous substances, solid wastes, irritants,
contaminants, or infectious or medical wastes on such property except
in the ordinary course of business and in compliance with all
applicable laws and regulations, (the terms "hazardous substance" and
"release" shall have the meanings specified in CERCLA, and the terms
"solid waste" and "disposal," "dispose" or "disposed" shall have the
meanings specified in RCRA, except that if such acts are amended to
broaden the meanings thereof, the broader meaning shall apply herein).
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(18) No proceedings are pending, or, to the best of the Credit
Obligors' knowledge, threatened, to acquire any power of condemnation
or eminent domain, with respect to the Collateral or any interest
therein, or to enjoin or similarly prevent or restrict the operation of
the Collateral in any manner.
Section 4.02 Corporate Existence
The Credit Obligors shall do or cause to be done all things necessary
to keep their corporate existences in full force and effect and shall not merge
with any other entity or dissolve or transfer all or substantially all their
assets to any other person without the prior written consent of the Bank.
Section 4.03 Accounting Records
The Credit Obligors will maintain proper books of record and account,
in which full and correct entries regarding its business and affairs will be
made.
Section 4.04 Reports to Bank
Peregrine shall furnish to the Bank on a consolidated basis with Alcool
and all of its other subsidiaries:
(1) Not later than 20 days after the end of each calendar month, an
unaudited income and expense statement and balance sheet of Peregrine
certified by the chief financial officer of Peregrine, together with
statements in comparative form for the preceding month.
(2) Not later than 120 days after the end of each fiscal year of
Peregrine, audited financial statements of income and retained earnings
of Peregrine for such fiscal year, together with statements in
comparative form for the preceding such fiscal year, prepared by an
independent certified public accountant acceptable to the Bank.
(3) Together with the financial statements required by paragraphs
(1) and (2) above, a certificate of the chief financial officer of
Peregrine stating that, except as disclosed in such certificate, (i) no
event of default exists under any of the Financing Documents to which
the Credit Obligors are a party or under any instrument evidencing or
securing any other indebtedness or contingent liability of the Credit
Obligors, and (ii) no event has occurred and is continuing which, with
notice or lapse of time or both, would constitute an event of default
under any of the Financing Documents to which the Credit Obligors are a
party or under any instrument evidencing or securing any other
indebtedness or contingent liability of the Credit Obligors. If any
such event of default exists or any such event has
20
occurred and is continuing, such certificate shall contain a
description of the nature and extent thereof.
(4) Not less than annually a certified personal financial statement
of Xxxxxxx X. Xxxxxxxxx, Xx.
(5) Such other information regarding the Collateral or the
financial condition or operations of Peregrine as the Bank shall
reasonably request.
Section 4.05 Incorporation of Covenants by Reference
The Credit Obligors agree that they will perform and comply with each
and every covenant and agreement required to be performed or observed by them in
the Financing Documents, which provisions, as well as related defined terms
contained therein, are hereby incorporated by reference herein with the same
effect as if each and every such provision were set forth herein in its
entirety. To the extent that any such incorporated provision permits the Trustee
or the holders of one or more Bonds or any other person to waive compliance with
such provision or requires that a document, opinion or other instrument or any
event or condition be acceptable or satisfactory to the Trustee or the holders
of one or more Bonds or any other person, for purposes of this Agreement, such
provision shall be complied with only if it is waived by the Bank and such
document, opinion or other instrument and such event or condition shall be
acceptable or satisfactory only if it is acceptable and satisfactory to the
Bank. No amendment to such covenants and agreements or defined terms made
pursuant to any of the Financing Documents shall be effective to amend such
covenants and agreements and defined terms as incorporated by reference herein
without the consent of the Bank.
Section 4.06 Payment of Taxes
The Credit Obligors will pay or cause to be paid as they become due and
payable, prior to penalty or the expiration of applicable grace periods, all
taxes, assessments and other governmental charges lawfully levied or assessed or
imposed upon them or their properties or any part thereof or upon any income
therefrom; provided, that the Credit Obligors shall not be required to pay and
discharge or cause to be paid and discharged any such tax, assessment or
governmental charge to the extent that the amount, applicability or validity
thereof shall currently be contested in good faith by appropriate proceedings,
the Credit Obligors promptly notify the Bank of such contest and the Credit
Obligors shall have established and maintain with the Bank security satisfactory
to the Bank, or established reserves with respect thereto in accordance with
generally accepted accounting principles, against any loss, damage or injury
that may result if the Credit Obligors are unsuccessful in such contest. The
Bank may, at its option, require the Credit Obligors to make monthly escrow
deposits with the Bank for annual payments of ad valorem taxes and hazard
insurance premiums.
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Section 4.07 Maintenance of Properties
The Credit Obligors will cause all their properties necessary or useful
in the conduct of their businesses to be maintained and kept in good condition,
repair and working order and supplied with all necessary equipment and will
cause to be made all necessary repairs, renewals, replacements, alterations,
betterments and improvements thereof, all as in the judgment of the Credit
Obligors may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times.
Section 4.08 Operation of Collateral
The Credit Obligors will conduct the operation of the Collateral at all
times in a prudent manner in compliance with applicable laws and regulations
relating thereto and will maintain in effect all material licenses, permits, and
certificates necessary for the use and operation of the Collateral.
Section 4.09 Amendments to Financing Documents
Unless the Bank shall otherwise consent in writing (which consent may
be granted or refused in the Bank's reasonable discretion), the Credit Obligors
agree not to enter into or consent to or effectuate any amendment to or
assignment of any of the Financing Documents.
Section 4.10 Other Agreements
The Credit Obligors shall not enter into any agreement containing any
provision which would be violated or breached by the performance of their
obligations hereunder or under the Financing Documents or under any instrument
or document delivered or to be delivered by them hereunder or in connection
therewith.
Section 4.11 Financing of Project
Simultaneously with the closing of the sale of the Bonds, the Credit
Obligors shall cause the Board to apply the net proceeds received from the sale
of the Bonds for the following purposes and in the following order:
(1) There shall be paid all costs of the issuance of the Bonds
including, without limitation, all recording costs, appraisal fees,
legal fees and expenses (including the legal fees and expenses of the
Bank's counsel), engineering fees, printing costs, and fiscal agent's
fees.
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(2) The balance, if any, of the proceeds of the Bonds shall be
deposited in the Construction Fund created under the Indenture and
disbursed as therein provided.
There shall also be paid from the Construction Fund, upon closing, all amounts
owing SouthTrust Bank, National Association under temporary loans the proceeds
of which were used on or after September 30, 1998 to purchase any part of the
Collateral. It is anticipated that the total Project Costs will exceed the
$2,460,000 principal amount of the Bonds and will be approximately $2,800,000.
Advances from the Construction Fund will be made as requested for the payment of
Project Costs so long as the total amount advanced does not exceed 80% of the
invoice purchase price of equipment purchased plus 80% of the appraised value of
additional collateral furnished (i.e., 80% of the appraised value of the
Deerfield Equipment or other equipment paid for by Alcool). If the full amount
of the proceeds in the Construction Fund have not been disbursed within 18
months from the date of closing, any remaining funds in the Construction Fund
shall be used to redeem Bonds.
Section 4.12 Maintenance of Insurance
The Credit Obligors will at all times maintain and keep in force
insurance of the types and in the amounts customarily carried in lines of
business similar to the Credit Obligors' and such other insurance as the Bank
may reasonably require, including, without limitation, property insurance
indicating all-risk coverage on the Project Equipment, in each case in amounts
sufficient to cover the replacement of the cost of the subject property,
containing a replacement cost endorsement, and insuring against such potential
causes of loss as shall be required by the Bank, including, but not limited to
loss or damage from wind, fire, ice and subsidence. The Credit Obligors shall
provide the Bank a mortgagee endorsement with respect thereto. The Credit
Obligors will also provide business interruption insurance in an amount mutually
acceptable to the Credit Obligors and the Bank. All policies shall name the Bank
as mortgagee and loss payee and provide that the Bank shall receive not less
than 30 days written notice of cancellation. The Credit Obligors will also
maintain and provide the Bank with evidence of liability insurance satisfactory
to the Bank, and will provide xxxxxxx'x compensation insurance, in an amount
required by Alabama law. In the event the survey indicates that any of the
Project lies within a flood hazard area, the Credit Obligors agree to furnish
flood insurance as required by the Bank. The issuer and form of all policies
shall be subject to the Bank's review and approval. The Credit Obligors shall
deliver to the Bank from time to time at the Bank's request copies of all such
insurance policies and certificates of insurance and schedules setting forth all
insurance then in effect.
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Section 4.13 Compliance with Environmental Laws
The Credit Obligors will at all times maintain all of their real
property and business operations in compliance with all applicable present and
future federal, state and local environmental laws, regulations and court or
administrative orders relating to pollution control and environmental
contamination unless such failure to comply would not have a material adverse
effect on the Credit Obligors; and immediately notify the Bank of any knowledge,
notice, actions, lien or other similar action alleging either the location of
any hazardous substances or the violation of any environmental laws with respect
to such real property.
Section 4.14 Damage and Destruction
(a) If before the Obligations are paid in full, all or any portion of
the Collateral is damaged or destroyed by fire, explosion or other hazard, and
if the Credit Obligors, within ten days after the event causing such damage or
destruction, advise the Bank in writing that in the Credit Obligors' opinion the
Collateral can be restored within six months after such event to substantially
the same operating utility that it had prior to such event, then at the Credit
Obligors' request the net proceeds of insurance resulting from such damage or
destruction shall be given to the Credit Obligors to be used, to the extent
necessary, for the purpose of reconstructing any damaged portion of the
Collateral or remedying a loss thereof, provided, however, that if the damage or
loss is of an amount in excess of $250,000 such proceeds shall be held by the
Bank prior to reconstruction or reinvestment in the Collateral and paid over to
the Credit Obligors only upon delivery of invoices or other appropriate
documentation. Any net proceeds of insurance that are not paid to the Credit
Obligors pursuant to the preceding sentence shall be paid to the Trustee and
applied toward prepayment of the Obligations, in any order, whether or not then
due.
(b) If before all Obligations are paid in full, all or any portion of
the Collateral is damaged or destroyed by fire, explosion or other hazard, and
if the Credit Obligors fail to advise the Bank, within ten days after the event
causing such damage or destruction, that in the Credit Obligors' opinion the
Collateral can be restored within six months after the event causing such damage
or destruction to substantially the same operating utility it had prior to such
event, then at the option of the Bank, the net proceeds of insurance resulting
from such damage or destruction shall be paid to the Bank and applied toward
prepayment of the Obligations, in any order, whether or not then due.
Section 4.15 Condemnation
If before all Obligations are paid in full, title to, or the temporary
use of, the Collateral or any portion thereof is 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 proceeds received by the
Credit Obligors and/or the Bank from any award in such eminent domain
proceedings shall be applied and certain related actions shall be taken as
follows:
24
(1) if in the Bank's reasonable opinion exercised in good faith
such taking does not significantly impair the operating utility of the
Collateral, then the proceeds of such award shall be paid to the Credit
Obligors;
(2) if in the Bank's reasonable opinion exercised in good faith
such taking significantly impairs the operating utility of the
Collateral and
A. in the Credit Obligors' opinion, repairs, restorations,
modifications, relocations, rearrangements and acquisitions of
substitute facilities and improvements can be made within three
months after such taking to the extent necessary to restore the
Collateral to substantially the same operating utility that it had
prior to such taking and the Credit Obligors agree to make such
restoration and pay all of the costs thereof in excess of the
proceeds of such award, then the proceeds of such award shall be
paid to the Credit Obligors; or
B. in the Credit Obligors' opinion, the Collateral cannot
within three months after such taking be restored to substantially
the same operating utility that it had prior to such taking, or if
the Credit Obligors do not agree to undertake such restoration and
pay the costs thereof in excess of the proceeds of such award,
then the proceeds of such award shall be paid to the Bank and
applied toward prepayment of the Obligations, in any order,
whether or not then due.
Section 4.16 Redemption of Bonds
The Credit Obligors agree to cause the Board to redeem outstanding
Bonds pursuant to the optional redemption provisions contained in Article VI of
the Indenture in accordance with the following schedule:
Principal Amount
Redemption Date to be Redeemed
--------------- --------------
(June 1)
2000 $295,000
2001 310,000
2002 330,000
2003 350,000
2004 370,000
2005 390,000
2006 415,000
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The Credit Obligors shall make monthly payments, on the first day of each month
commencing July 1, 1999, to the Trustee for deposit into the Bond Fund in an
amount equal to one-twelfth (1/12) of the amount of the principal required to be
redeemed, as set forth above, on the next succeeding June 1. Such payments shall
be deemed "Basic Rental Payments" under Section 4.02(a) of the Lease Agreement.
The provisions of this Section 4.16 are for the benefit of the Bank only and may
be waived or terminated at any time by the Bank and may be modified or amended
at any time by the written agreement of the Bank and the Credit Obligors without
the consent of the Trustee or any other party; provided, however, the Bank shall
promptly notify the Trustee of any changes in the principal redemption schedule.
Section 4.17 Disposition of Collateral
The Credit Obligors hereby agree that as long as any of the Obligations
hereunder of the Credit Obligors to the Bank remain unpaid, the Credit Obligors,
unless the Bank consents in writing, shall not sell, assign, lease, convey or
otherwise dispose of any portion of the Collateral in any one fiscal year having
an aggregate market value in excess of $250,000, wherever located, whether now
owned or hereafter acquired, or permit any Subsidiary to do so, except in the
ordinary course of business. In addition, the Credit Obligors may repair or
replace inadequate, obsolete or worn out machinery and equipment so long as the
Credit Obligors substitute other machinery or equipment therefor of equal or
greater value.
Section 4.18 Creation of Liens
The Credit Obligors hereby agree that as long as any of the Obligations
hereunder of the Credit Obligors to the Bank remain unpaid, the Credit Obligors,
unless the Bank consents in writing, shall not create, incur or permit any
mortgage, encumbrance, lien, or security interest against any of the Collateral
except (i) those currently outstanding, (ii) those pledged previously to the
Bank or incurred pursuant to this Agreement, (iii) deposits regarding worker's
compensation unemployment insurance, pensions or other employee benefits, (iv)
tax liens for taxes not due or which are being contested in good faith, during
any fiscal year or (v) materialmen's lien for sums not yet due and payable.
Section 4.19 Financing and Other Operating Covenants
The Credit Obligors hereby covenant and agree that Peregrine, on a
consolidated basis with all of its Subsidiaries, shall at all times maintain
(1) Fixed Charge Coverage Ratio: a Fixed Charge Coverage Ratio of not
less than 1.25 to 1. As used herein, "Fixed Charge Coverage Ratio"
shall mean the ratio of net income plus depreciation, interest
expense and lease expense to current maturities of long-term debt
plus interest expense and lease
26
expense. "Lease expense," as used herein, shall include without
limitation, rent payable under the Building Lease.
(2) Debt to Net Worth Ratio: a total Debt to tangible net worth ratio
not exceeding 2.0 to 1.0. As used herein, "Debt" shall mean (i) all
indebtedness for the repayment of borrowed money, (ii) all deferred
indebtedness for the payment of the purchase price of property or
assets purchased, (iii) all capitalized lease obligations and (iv)
all indebtedness secured by any mortgage or pledge of, or lien on,
property, whether or not indebtedness secured thereby shall have
been assumed.
The Credit Obligors further hereby covenant and agree that they
(including their Subsidiaries) shall
(1) make no capital expenditures outside of the United States in
any one fiscal year in excess of $75,000;
(2) maintain a Warranty Reserve Account at a level satisfactory to
the Bank, adjusted from time to time;
(3) continue to insure foreign receivables at the maximum amounts
insurable; and
(4) require payment from foreign customers in United States dollars
only, except for Canadian customers who may pay in Canadian dollars.
Accounting terms used herein but not otherwise defined in this Section 4.19
shall have the meanings given them under generally accepted accounting
principles.
Section 4.20 Subordination of Stockholder Indebtedness
Any indebtedness of the Credit Obligors now or hereafter existing which
is payable to any stockholder of the Credit Obligors shall be subordinated to
any indebtedness of the Credit Obligors due SouthTrust Bank, National
Association in terms of both collateral and payment; provided, however, payments
of current interest (but not principal payments) will be permitted subject to
the rate of interest being paid not exceeding the Bank's Base Rate; and
provided, further, the provisions of this Section 4.20 shall not apply to the
currently outstanding 5% cumulative convertible Preferred Stock of Peregrine.
27
ARTICLE 5
EVENTS OF DEFAULT AND REMEDIES
Section 5.01 Events of Default
Any one or more of the following shall constitute an event of default
(an "Event of Default") under this Agreement (whatever the reason for such event
and whether it shall be voluntary or involuntary or be effected by operation of
law or pursuant to any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body or whether committed by
either or both of the Credit Obligors):
(1) default in any payment required under Article 2 hereof as
and when the same shall become due and payable; or
(2) default in the performance or breach of any covenant or
warranty of the Credit Obligors in this Agreement (other than a
covenant or warranty, a default in the performance or breach of
which is elsewhere in this Section specifically dealt with), and
the continuance of such default or breach for a period of 30 days
after there has been given to the Credit Obligors by the Bank a
written notice specifying such default or breach; or
(3) the filing of a petition in bankruptcy (or other
commencement of a bankruptcy or similar proceeding) by the Credit
Obligors under any applicable bankruptcy, insolvency,
reorganization, or similar law, now or hereafter in effect; or
(4) the filing of a petition in bankruptcy (or other
commencement of a bankruptcy or similar proceeding) against the
Credit Obligors under any applicable bankruptcy, insolvency,
reorganization, or similar law, now or hereafter in effect, and
such petition shall not be discharged or dismissed within 90 days
after the date on which such petition was filed; or
(5) any representation or warranty made by the Credit Obligors
herein or in any document, instrument or certificate furnished to
the Bank in connection with the issuance of the Letter of Credit or
the consummation of the transactions contemplated by the Financing
Documents shall at any time prove to have been false or incorrect
in any material adverse respect as of the time made; or
(6) the occurrence of an Event of Default, as therein defined,
under any Financing Document and the expiration of the applicable
grace period, if any, specified therein; or
(7) if a judgment in excess of $100,000 is rendered against the
Credit Obligors or any Subsidiary and such judgment not having been
satisfied or released by the holder thereof within a period of 30
days after final adjudication thereof.
28
(8) if any executive officer of the Credit Obligors shall
receive notice or otherwise have knowledge of hazardous discharge
or environmental complaint which may have a material adverse effect
on the Credit Obligors, and the Credit Obligors shall fail to give
notice of such hazardous discharge or environmental complaint to
the Bank within five days of such executive officer's first
knowledge thereof.
(9) if there exists any "prohibited transaction" under Section
406 of the Employee Retirement Income Security Act (ERISA) or
Section 4975 of the Internal Revenue Code, or any existence "of any
reportable event" under Section 4043 of ERISA, in any employee
benefit plan of the Credit Obligors or any Subsidiary subject to
ERISA or there occurs the termination of any defined benefit plan
of the Credit Obligors or any Subsidiary, and such transaction,
event or termination has a material adverse effect on the Credit
Obligors or creates a lien on any assets of the Credit Obligors
superior to the security interest granted the Bank in the Financing
Documents and such lien remains outstanding for a period of 30 days
without discharge.
(10) if either of the Credit Obligors or any Subsidiary
abandons its business, either voluntarily or involuntarily.
(11) if the Credit Obligors sell or otherwise transfer or
encumber the Project Equipment or any portion of the Collateral
without the prior written consent of the Bank except as may be
permitted by the Financing Documents.
(12) if the Individual Guarantor defaults in the payment or
performance of any obligation under the Individual Guaranty
Agreement or the Corporate Guarantor defaults in the payment or
performance of any obligation under the Corporate Guaranty
Agreement.
(13) if Peregrine defaults under the terms of the Revolving
Line of Credit.
(14) The sale of transfer by the Credit Obligors of any part of
the Collateral other than in the ordinary course of business
without the written consent of the Bank.
(15) The sale or transfer of all or any part of Peregrine's
100% ownership interest in Alcool or the reduction in the ownership
of Xxxxxxx X. Xxxxxxxxx, Xx. in Peregrine to below 51% of the
equity interest therein.
(16) The death of Xxxxxxx X. Xxxxxxxxx, Xx.; provided the Bank
shall take no remedial action under Section 5.02 because of the
death of Xxxxxxx X. Xxxxxxxxx, Xx. for a period of 60 days
immediately following the death of Xxxxxxx X. Xxxxxxxxx, Xx.
29
Section 5.02 Remedies
(a) Upon the occurrence of any Event of Default, regardless of any
requirement that notice be given or a period of time elapse, the Bank shall have
the absolute right and at its option and election and in its sole discretion to
exercise alternatively or cumulatively any or all of the remedies set forth in
this Section 5.02.
(b) Without limitation upon the provisions of paragraph (a) above, if
any Event of Default shall have occurred and be continuing, the Bank may
exercise any of the following remedies:
(1) give written notice of an Event of Default under the Credit
Agreement to the Trustee directing the Trustee to effect a purchase of
the Bonds as provided in Section 4.05(a)(3) of the Indenture; or
(2) give written notice of an Event of Default under the Credit
Agreement to the Trustee directing the Trustee to "accelerate the
Bonds" pursuant to Sections 12.01(4) and 12.02 of the Indenture,
whereupon an event of default shall occur under the Indenture, and the
Trustee shall declare the Bonds immediately due and payable and shall
make a draw under the Letter of Credit to pay the principal of the
Bonds and the interest thereon to the date of such declaration; or
(3) upon notice to the Credit Obligors, declare all amounts, if
any, not otherwise immediately due under this Credit Agreement to be,
and all such amounts shall thereupon become, due and payable to the
Bank, without presentment, demand, protest, or other notice of any
kind, all of which are expressly waived, anything in this Credit
Agreement to the contrary notwithstanding; or
(4) exercise any or all rights, powers or remedies granted the Bank
under any or all of the Security Documents;
(5) exercise any or all rights, powers or remedies granted
SouthTrust Bank, National Association under the Revolving Line of
Credit or any document securing the same;
(6) exercise its banker's lien or right of set-off; or
(7) proceed to protect its rights by suit in equity, action at law
or other appropriate proceedings, whether for the specific performance
of any covenant or agreement of the Credit Obligors herein contained or
in aid of the exercise of any power or remedy granted to the Bank under
any Financing Document.
30
Section 5.03 Acceleration of Reimbursement
If an Event of Default exists under this Agreement and the maturity of
the Bonds has not been accelerated pursuant to Section 12.02 of the Indenture,
the Credit Obligors agree to pay to the Bank, promptly upon demand by the Bank
therefor, an amount equal to the maximum amount available to be drawn under the
Letter of Credit. All amounts so paid to the Bank (or recovered by the Bank by
legal or other action in the event the Credit Obligors shall fail or refuse to
make payment as required by this Section) shall be held by the Bank in reserve
as security for reimbursement for any draws the Bank may be required to pay
under the Letter of Credit with respect to which an acceleration has not
occurred. The Bank may maintain any reserve held under the terms of this
Agreement in any manner the Bank may see fit, and the Bank shall invest the same
in such investment or investments (including but not limited to certificates of
deposit issued by the Bank) as the Bank may choose, subject to any applicable
arbitrage restriction or regulation. The Bank shall not be required to pay, or
to account to the Credit Obligors or anyone else for, any interest or other
earnings on any reserve at any time held by the Bank under this Agreement,
except that any income or profits from any investment of such reserve made by
the Bank shall become a part of such reserve. At such time as all of the
Obligations have been paid in full and the Letter of Credit has been terminated,
all amounts remaining in such reserve (if any) shall be paid to the Credit
Obligors.
Section 5.04 No Remedy Exclusive
No remedy herein conferred upon or reserved to the Bank 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
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.
Section 5.05 Agreement to Pay Attorneys' Fees
If the Credit Obligors should default under any of the provisions of
this Agreement and the Bank should employ attorneys or incur other expenses for
the collection of any payments due hereunder or the enforcement of performance
or observance of any agreement or covenant on the part of the Credit Obligors
herein contained, the Credit Obligors will, within 15 days of the Credit
Obligors' receipt of demand therefor, pay to the Bank the reasonable fees of
such attorneys and such other reasonable expenses so incurred.
Section 5.06 No Additional Waiver Implied by One Waiver
If any agreement contained in this Agreement should be breached by the
Credit Obligors and thereafter waived by the Bank, such waiver shall be limited
to the particular breach so waived and shall not be deemed to waive any other
breach hereunder.
31
Section 5.07 Remedies Subject to Applicable Law
All rights, remedies and powers provided by this Article may be
exercised only to the extent the exercise thereof does not violate any
applicable provision of law in the premises, and all the provisions of this
Article are intended to be subject to all applicable mandatory provisions of law
which may be controlling in the premises and to be limited to the extent
necessary so that they will not render this Agreement invalid or unenforceable.
Section 5.08 Waiver by Credit Obligors
The Credit Obligors hereby waive, as to the enforceability of this
Agreement, except as set forth herein or in any of the other Financing
Documents, presentation and demand for payment (or protest of nonpayment) of the
Obligations or, until the Obligations have been fully paid, any rights of
subrogation it may have against others by reason of performance under this
Agreement.
ARTICLE 6
MISCELLANEOUS
Section 6.01 No Waiver
No failure or delay on the part of the Bank in exercising any right,
power or remedy hereunder shall be construed as a waiver of such; nor shall any
single or partial exercise of any such right, power or remedy preclude any other
or further exercise thereof. The remedies herein provided are cumulative and not
exclusive of any other remedies provided by law.
Section 6.02 Entire Agreement
This Agreement contains the entire agreement between the parties
relating to the subject matter hereof and supersedes all oral statements and
prior writings and agreements with respect thereto.
Section 6.03 Review by Credit Obligors
The Credit Obligors expressly acknowledge that they have had an
adequate opportunity to review this Agreement and all documents related thereto,
that they are under no compulsion to execute this Agreement or any instruments
contemplated herein, that they have not in any way relied upon the advice or
recommendations of the Bank, its officers, shareholders, directors, employees,
or attorneys, except as set forth in this Agreement.
32
Section 6.04 Waiver of Trial by Jury
TO THE EXTENT LEGALLY ENFORCEABLE, THE BANK AND THE CREDIT OBLIGORS
IRREVOCABLY WAIVE ALL RIGHTS TO A TRIAL BY JURY IN ANY COURT IN ANY ACTION: (a)
THE BANK BRINGS TO COLLECT AMOUNTS OWED THE BANK UNDER THIS AGREEMENT AND (b)
ALLEGING THAT (i) THE BANK HAS BREACHED THIS AGREEMENT, OR ANY AGREEMENT
RELATING TO THIS AGREEMENT, (ii) THE BANK HAS BREACHED ANY OTHER AGREEMENT,
EXPRESS OR IMPLIED, (iii) THE BANK OR ANY OF ITS OFFICERS, EMPLOYEES OR AGENTS
HAVE ACTED WRONGFULLY, NEGLIGENTLY OR OTHERWISE TORTIOUSLY WITH RESPECT TO THE
CREDIT OBLIGORS.
To the extent that any court of competent jurisdiction determines that
such jury waiver is inapplicable or unenforceable with respect to any claim or
dispute, such claim or dispute shall be submitted to and settled by final and
binding arbitration under the Federal Arbitration Act or other applicable law
pursuant to the Commercial Arbitration Rules of the American Arbitration
Association. Such proceeding shall be held before a single arbitrator who is an
active attorney or retired judge. The party against which the decision is
rendered shall pay the costs and reasonable attorneys' fees of the prevailing
party for any arbitration proceeding.
Section 6.05 Notices
(a) Any request, demand, authorization, direction, notice, consent, or
other document provided or permitted by this Agreement to be made upon, given or
furnished to, or filed with, Alcool, Peregrine or the Bank shall be sufficient
for every purpose hereunder if in writing and (except as otherwise provided in
this Agreement) either (i) delivered personally to the party or, if such party
is not an individual, to an officer, partner, member or other legal
representative of the party to whom the same is directed, or (ii) mailed by
registered or certified mail, postage prepaid and addressed as follows:
If to Alcool:
Alcool, Inc.
0000 XxxXxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: President
If to Peregrine:
Peregrine Industries, Inc.
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxxx, Xx.
33
If to the Bank:
SouthTrust Bank, National Association
0000 Xxxxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxxx
Any of such parties may specify a different address for the receipt of such
documents by mail by giving notice of the change in address to the other party
as provided in this Section.
(b) Any such notice or other document shall be deemed to be received
(i) as of the date delivered, if delivered personally in accordance with
subsection (a)(i) of this Section, or (ii) as of three days after the date
deposited in the mail, if mailed in accordance with subsection (a)(ii) of this
Section.
Section 6.06 Indemnification
(a) The Credit Obligors, jointly and severally, agree to defend,
indemnify, and hold harmless the Bank, its directors, officers, employees, and
agents from and against any and all claims, demands, judgments, damages,
actions, causes of action, injuries, orders, penalties, reasonable costs and
expenses, (including without limitation, costs of court and reasonable
attorney's fees) of any kind whatsoever in connection with the execution and
delivery or transfer of or payment or failure to pay under the Letter of Credit;
provided, however, said indemnities shall not apply to any claims, damages,
lawsuits, liabilities, costs, or expenses to the extent, but only to the extent,
caused by (i) the willful misconduct or negligence of the Bank in determining
whether a draft or certificate presented under the Letter of Credit complied
with the terms of the Letter of Credit; or (ii) the Bank's negligent or willful
failure to pay under the Letter of Credit after presentation to it by the
Trustee of a draft and certificate strictly complying with the terms and
conditions of the Letter of Credit.
(b) The Credit Obligors shall indemnify and hold the Bank harmless from
and against any fines, charges, expenses, fees, attorney fees and costs incurred
by the Bank in the event the Credit Obligors or the Collateral (whether or not
due to any fault of the Credit Obligors) are hereafter determined to be in
violation of any environmental laws, rules or regulations applicable thereto,
including, without limitation, those described in Section 4.01(17) of this
Agreement, but only with respect to such violations that occur or exist prior to
foreclosure of the Mortgage or transfer of deed in lieu of foreclosure, and this
indemnity shall survive any foreclosure of the Mortgage or deed in lieu of
foreclosure and repayment of the Obligations.
34
Section 6.07 Liability of the Bank
For the exclusive benefit of the Bank and as between the Bank and the
Credit Obligors only, the Credit Obligors assume all risks of, but shall not be
liable or responsible to the Bank or any other person or entity for damages
arising out of, the acts or omissions of the Trustee and any transferee of the
Letter of Credit with respect to the Trustee's or such transferee's use of the
Letter of Credit. Neither the Bank nor any of its officers or directors shall be
liable or responsible for: (i) the use which may be made of the Letter of Credit
or for any acts or omissions of the Trustee and any such transferee in
connection therewith; (ii) the validity, sufficiency or genuineness of
documents, or of any endorsement(s) thereon, even if such documents should in
fact prove to be in any or all respects invalid, insufficient, fraudulent or
forged; (iii) payment by the Bank under the Letter of Credit against presentment
of documents which do not strictly comply with the terms of the Letter of
Credit, including but not limited to, failure of any documents to bear any
reference or adequate reference to the Letter of Credit; or (iv) any other
circumstances whatsoever in making or failing to make payment under the Letter
of Credit, except only that the Credit Obligors shall have a claim against the
Bank, and the Bank shall be liable to the Credit Obligors, to the extent, but
only to the extent, of any damages suffered by the Credit Obligors which were
caused by (A) the Bank's willful misconduct or gross negligence in determining
whether documents presented under the Letter of Credit comply with the terms of
the Letter of Credit or (B) the Bank's willful or negligent failure to pay under
the Letter of Credit after the presentation to it by the Trustee of a draft and
certificate strictly complying with the terms and conditions of the Letter of
Credit. In furtherance and not in limitation of the foregoing, the Bank may
accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary.
Section 6.08 Continuing Obligation
This Credit Agreement is a continuing obligation and shall (i) be
binding upon the Credit Obligors, jointly and severally, and the Bank, their
successors and assigns, and (ii) inure to the benefit of and be enforceable by
the Credit Obligors and the Bank and their successors and assigns; provided,
that the Credit Obligors may not assign all or any part of this Credit Agreement
without the prior written consent of the Bank.
Section 6.09 Governing Law
The Letter of Credit shall be governed by and construed in accordance
with the laws of the State of Alabama.
Section 6.10 Costs, Expenses and Taxes
The Credit Obligors agree to pay at the time of the issuance of the
Bonds (i) the reasonable costs and expenses in connection with the preparation,
execution, and delivery of this Credit
35
Agreement and any other documents which may be delivered in connection with this
Credit Agreement, including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel for the Bank with respect thereto, and (ii)
after the occurrence of an Event of Default, or the occurrence of an event which
the Bank reasonably believes may lead to an Event of Default, the reasonable
fees and out-of-pocket expenses of counsel for the Bank with respect to advising
the Bank as to its rights and responsibilities under this Credit Agreement. In
addition, the Credit Obligors shall pay any and all stamp and other taxes and
fees payable or determined to be payable in connection with the execution,
delivery, filing and recording of the Mortgage and such other documents and
agrees to save the Bank harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to pay such taxes
and fees.
36
IN WITNESS WHEREOF, Alcool, Inc., Peregrine Industries, Inc. and
SouthTrust Bank, National Association have caused this instrument to be executed
and delivered by their duly authorized officers.
ALCOOL, INC.
By: /s/
----------------------------------
Its President
ATTEST:
-----------------------------------
Its Secretary
PEREGRINE INDUSTRIES, INC.
By: /s/
----------------------------------
Its
ATTEST:
-----------------------------------
Its
-------------------------------
SOUTHTRUST BANK,
NATIONAL ASSOCIATION
By: /s/
----------------------------------
------------------------------------ Its
37
EXHIBIT A
to
Credit Agreement
between
Alcool, Inc., Peregrine Industries, Inc. and
SouthTrust Bank, National Association
Letter of Credit
EXHIBIT B
to
Credit Agreement
between
Alcool, Inc., Peregrine Industries, Inc. and
SouthTrust Bank, National Association
Project Equipment
All furniture, furnishings, machinery, equipment and other personal property
owned by The Industrial Development Board of the City of Xxxxxxxxxx or by
Alcool, Inc. or Peregrine Industries, Inc. and located on the Real Property
described in Exhibit C hereto and used in connection with the operation of the
manufacturing facilities located thereon, including but not limited to the
following:
Alcool Facility
Item Description
---- -----------
1 (2) Indexing C.A.B Furnaces and Fluxer
2 (2) Manual Core Assembly Machines
3 FIN Machine #1
4 Continuous Core Builder #1
5 FIN Machine #2
6 Paint Line
7 Hydrophilic Coating Line
8 Jigs and Fixtures
9 (2) Test Tanks
10 Multi-Core Assembly Machine
11 (2) Cooling Towers
12 Air Compressor with Dryer
13 Furniture and Computers
14 Conveyors
15 (2) Fork Lifts
16 Serpentine Core Assembly Machine
17 Helium Leak Tester
18 Storage Racks
19 Floor Scrubber
20 Trash Compactor
21 TIG Welder
22 Bus Bar
B-1
Deerfield Equipment
EXHIBIT C
to
Credit Agreement
between
Alcool, Inc., Peregrine Industries, Inc. and
SouthTrust Bank, National Association
PROJECT SITE
LEGAL DESCRIPTION
Lot 2-9B according to the Map of Part of Parcel 0-0 Xxxxxx Xxxxxxxxxx
Xxxx Xxxx 1 and Parcel 0-0 Xxxxxx Xxxxxxxxxx Xxxx Xxxx 2, being in the
west 1/2 of Section 35, T17N, R18E and Xxxxxxx 0, X00X, X00X,
Xxxxxxxxxx Xxxxxx, Xxxxxxx, as said map appears of record in the office
of the Judge of Probate of Montgomery County, Alabama, in Plat Book 27,
Page 80, containing 6.26 acres, more or less.
