LOAN AGREEMENT
Dated as of December 1, 1999
Among
VERMONT ECONOMIC DEVELOPMENT AUTHORITY
and
VERMONT PURE HOLDINGS, LTD.
and
VERMONT PURE SPRINGS, INC.
TABLE OF CONTENTS
Page
ARTICLE I ............ DEFINITIONS 2
Section 1.01 ........ Definitions 2
Section 1.02 ........ Content of Certificates and Opinions 2
Section 1.03 ........ Interpretation 3
ARTICLE II ........... THE LOAN; USE OF PROCEEDS 3
Section 2.01 ........ Loan of Funds to the Company 3
Section 2.02 ........ Use of Proceeds 3
Section 2.03 ........ Establishment of Completion Date 3
Section 2.04 ........ Covenants for Benefit of Bondholders and Bank 4
ARTICLE III .......... PAYMENT PROVISIONS 4
Section 3.01 ........ Loan Payments 4
Section 3.02 ........ Letters of Credit 5
Section 3.03 ........ Time of Loan Payments 5
Section 3.04 ........ Additional Payments; Taxes; Utility Charges 6
Section 3.05 ........ Acceleration of Payment to Redeem Bonds 7
Section 3.06 ........ No Defense or Set-Off 7
Section 3.07 ........ Termination Upon Payment or Defeasance of Bonds 7
Section 3.08 ........ Assignment of Authority's Rights 8
Section 3.09 ........ Assignment by Company 8
Section 3.10 ........ Indemnity Against Claims 8
Section 3.11 ........ Authority is Conduit Issuer; Company is Real
Party in Interest; Covenant Not to Xxx 10
ARTICLE IV ........ COMPANY OBLIGATIONS; ASSIGNMENT TO TRUSTEE 10
Section 4.01 ........ General Obligation of the Company 10
Section 4.02 ........ Assignment to Trustee 10
Section 4.03 ........ Maintenance and Operation of the Project
Facilities 11
Section 4.04 ........ Maintenance of Existence 11
Section 4.05 ........ Compliance with Laws 11
Section 4.06 ........ Notice of Bankruptcy Case Commencement 12
Section 4.07 ........ Substitute Letter of Credit 12
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TABLE OF CONTENTS
(continued)
Page
ARTICLE V ........ TAX MATTERS 12
Section 5.01 ........ Prohibited Uses 12
Section 5.02 ........ Covenants and Representations with Respect
to Arbitrage 13
ARTICLE VI ........ INSURANCE; DESTRUCTION, DAMAGE, EMINENT DOMAIN 13
Section 6.01 ........ Insurance to be Maintained 13
Section 6.02 ........ Destruction, Damage and Eminent Domain 13
Section 6.03 ........ Notice of Property Loss 14
Section 6.04 ........ Disposition of Casualty Insurance and
Condemnation Award Proceeds 14
ARTICLE VII ........ ADDITIONAL COVENANTS OF THE COMPANY 14
Section 7.01 ........ Compliance with Laws 14
Section 7.02 ........ Power to Perform Obligations 15
Section 7.03 ........ Inspection 15
Section 7.04 ........ Additional Information 15
ARTICLE VIII ........ EVENTS OF DEFAULT AND REMEDIES 15
Section 8.01 ........ Events of Default 15
Section 8.02 ........ Acceleration 16
Section 8.03 ........ Payment of Loan Payments on Default;
Suit Therefor 16
Section 8.04 ........ Other Remedies 17
Section 8.05 ........ Waiver 17
Section 8.06 ........ Cumulative Rights 17
Section 8.07 ........ No Exercise of Remedies Without Consent of Bank 18
Section 8.08 ........ Determination of Taxability Not a Default 18
ARTICLE IX ........ OPTIONS TO TERMINATE AGREEMENT 18
Section 9.01 ........ Option to Terminate Upon Defeasance 18
Section 9.02 ........ Option to Terminate Upon the Occurrence
of Certain Events 18
ARTICLE X ........ MISCELLANEOUS 20
Section 10.01 ........ Approval of Indenture 20
Section 10.02 ........ Illegal Provisions Disregarded 20
Section 10.03 ........ Limitation of Liability of the Agency 20
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TABLE OF CONTENTS
(continued)
Page
Section 10.04 ........ No Recourse as to the Agency 20
Section 10.05 ........ Reference to Statute or Regulation 21
Section 10.06 ........ Notices 21
Section 10.07 ........ Applicable Law 22
Section 10.08 ........ Amendments 22
Section 10.09 ........ Term of Agreement 22
Section 10.10 ........ Amounts Remaining in Bond Fund 22
Section 10.11 ........ Survival of Covenants, Conditions and
Representations 22
Section 10.12 ........ Multiple Counterparts 22
Section 10.13 ........ Consent 22
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THIS LOAN AGREEMENT dated December 1, 1999 (the "Agreement"), is by and
among VERMONT ECONOMIC DEVELOPMENT AUTHORITY (with its successors, the
"Authority"), VERMONT PURE HOLDINGS, LTD., a Delaware corporation (with its
successors, "Holdings") and VERMONT PURE SPRINGS, INC., a Delaware corporation
(with its successors, "Springs," and, collectively with Holdings, the
"Company").
W I T N E S S E T H :
WHEREAS, the Authority is a body corporate and politic and a public
instrumentality of the State, organized and existing under the Act, and is
authorized under the Act to finance industrial facilities; and
WHEREAS, the Company has requested the Authority to finance a project (the
"Project") that consists of, among other things (i) construction, acquisition
and improvement of an approximately 38,000 square foot addition to the Company's
existing spring water production and bottling facility located on Route 66 in
the Catamount Industrial Park within the Town of Xxxxxxxx, together with related
machinery and equipment therefor; and (ii) the payment of a portion of the costs
of issuance of the Bonds; and
WHEREAS, in order to provide funds for and toward the payment of a portion
of the costs of the Project, the Authority has authorized the issuance and sale
of its Bonds; and
WHEREAS, the Bonds are to be issued under and secured by a Trust Indenture
dated as of December 1, 1999 (the "Indenture") between the Authority and the
Trustee; and
WHEREAS, this Agreement provides that the Authority will loan the proceeds
of the Bonds to the Company to finance the Project and the Company will agree,
among other things, to repay the loan in installments equal to payments of debt
service on the Bonds when due; and
WHEREAS, the Trustee has agreed under the Indenture to draw on the Letters
of Credit for the Series A Bonds and the Series A-T Bonds, respectively, at such
times and in such amounts as shall be sufficient to pay when due the principal
of, premium, if any, interest and Purchase Price on the Bonds and to credit all
amounts paid under such Letters of Credit against the Company's obligation to
make loan repayments under this Agreement for such items; and
WHEREAS, execution and delivery of this Agreement and the issuance
hereunder and under the Act of the Bonds have been in all respects duly and
validly authorized by resolution of the board of directors of the Authority duly
adopted prior to such execution and delivery; and
WHEREAS, as security for the full and prompt payment and performance of all
its obligations under the Indenture, including, specifically, without limiting
the generality of the foregoing, its obligation to make payment of principal of,
premium, if any, Purchase Price and interest on the Bonds, when due, the
Authority has, pursuant to the provisions of the Indenture, assigned to the
Trustee all of its right, title and interest in, to and under this Agreement
(except its right to indemnification and to receive its fees and expenses
hereunder), including without limitation, the right to receive loan payments
payable by the Company hereunder; and
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WHEREAS, in order to assure full and prompt payment of the Bonds, the
Company, among other things, has caused the Bank to issue its Letters of Credit
to assure payment of principal of, Purchase Price and interest on the Bonds when
due (subject to reduction and reinstatement as provided therein) pursuant to the
Reimbursement Agreement.
NOW, THEREFORE, THIS LOAN AGREEMENT WITNESSETH:
That the parties hereto, intending to be legally bound hereby and in
consideration of the mutual covenants hereinafter contained, DO HEREBY AGREE to
all the terms and conditions set forth in this Agreement. This Agreement is a
financing document in accordance with Chapter 12 of Title 10 of the Vermont
Statutes Annotated, as amended (the "Act").
ARTICLE I.
DEFINITIONS
Section 1.01. Definitions. Terms used as defined terms in the recitals
shall have the same meanings throughout this Agreement, and, in addition
thereto, capitalized terms used and not defined herein shall have the meanings
assigned to such terms in the Indenture, unless the context clearly indicates
otherwise.
Section 1.02. Content of Certificates and Opinions. The Trustee may, but
shall not be obligated to, require that every certificate or opinion provided
for in this Agreement with respect to compliance with any provision hereof shall
include (1) a statement to the effect that the Person making or giving such
certificate or opinion has read such provision and the definitions herein
relating thereto; (2) a brief statement as to the nature and scope of the
examination or investigation upon which the certificate or opinion is based; (3)
a statement to the effect that in the opinion of such Person, he has made or
caused to be made such examination or investigation as is necessary to enable
him to express an informed opinion with respect to the subject matter referred
to in the instrument to which his signature is affixed; (4) a statement of the
assumptions upon which such certificate or opinion is based, and that such
assumptions are reasonable; and (5) a statement as to whether, in the opinion of
such Person, such provision has been complied with.
Any such certificate or opinion made or given by an officer of the
Authority or the Company may be based, insofar as it relates to legal or
accounting matters, upon a certificate or opinion of or representation by
Counsel or an accountant, unless such officer knows, or in the exercise of
reasonable care should have known, that the certificate, opinion or
representation with respect to the matters upon which such certificate or
statement may be based, as aforesaid, is erroneous. Any such certificate or
opinion made or given by Counsel or an accountant may be based, insofar as it
relates to factual matters (with respect to which information is in the
possession of the Authority or the Company, as the case may be) upon a
certificate or opinion of or representation by an officer of the Authority or
the Company, unless such Counsel or accountant knows, or in the exercise of
reasonable care should have known, that the certificate or opinion or
representation with respect to the matters upon which such certificat or opinion
or representation may be based, as aforesaid, is erroneous. The same officer of
the Authority or the Company, or the same Counsel or accountant, as the case may
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be, need not certify to all of the matters required to be certified under any
provision of this Agreement, but different officers, Counsel or accountants may
certify to different matters, respectively.
Section 1.03. Interpretation.
(a) Unless the context otherwise indicates, words expressed in the
singular shall include the plural and vice versa and the use of the neuter,
masculine, or feminine gender is for convenience only and shall be deemed to
mean and include the neuter, masculine or feminine gender, as appropriate.
(b) Headings of articles and sections herein and the table of content
hereof are solely for convenience of reference, do not constitute a part hereof
and shall not affect the meaning, construction or effect hereof.
(c) All references herein to "Articles," "Sections" and other
subdivisions are to the corresponding Articles, Sections or subdivisions of this
Agreement; the words "herein," "hereof," "hereby," "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any particular
Article, Section or subdivision hereof.
(d) Whenever in this Agreement it is required that notice be provide
to the Bank or that consent of the Bank be obtained, such provisions shall be
effective only when (i) the Letters of Credit are in effect, (ii) the Bank, in
its capacity as provider of the Letters of Credit, is the Holder of any Bonds or
(iii) any amounts are due and owing to the Bank under the Reimbursement
Agreement.
ARTICLE II.
THE LOAN; USE OF PROCEEDS
Section 2.01. Loan of Funds to the Company. The Authority hereby agrees
that simultaneously with the execution and delivery of this Agreement, it will
loan to the Company, upon the terms and conditions specified herein and in the
Indenture, the proceeds of the sale of the Bonds, and the Company agrees to
receive such loan from the Authority, for the purposes provided herein and in
the Indenture.
Section 2.02. Use of Proceeds. The proceeds of the Bonds shall be deposited
with the Trustee and applied as provided in the Indenture and in this Agreement
to finance the Project.
Section 2.03. Establishment of Completion Date. The Completion Date shall
be evidenced to the Authority and the Trustee by a certificate signed by an
Authorized Representative of the Company stating in effect that (i) construction
of the Project has been completed and all costs of labor, services, materials
and supplies used in connection with such construction have been paid; (ii) all
equipment for the Project has been acquired and installed and all costs and
expenses incurred in connection therewith have been paid; and (iii) all other
facilities necessary in connection with the Project have been acquired,
constructed, improved and equipped and all costs and expenses incurred in
connection therewith have been paid. Notwithstanding the foregoing, such
certificate shall state that it is given without prejudice to any rights against
third parties which exist at the date of such certificate or which may
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subsequently come into being. Forthwith upon completion of the Project, the
Company agrees to cause such certificate to be furnished to the Authority and
the Trustee. Upon receipt of such certificate, the Trustee shall give notice to
the Company of the amount of funds remaining unspent in the Construction Fund.
Any remaining moneys on deposit in the Construction Fund shall be forthwith
applied to the payment of the Costs of the Project, or if not so applied shall
be promptly transferred by the Trustee into the Bond Fund and used by the
Trustee in accordance with the terms of Section 6.08 of the Indenture.
Section 2.04. Covenants for Benefit of Bondholders and Bank. This Agreement
is executed in part to induce (a) the purchase by others of the Bonds and (b)
the issuance by the Bank of the Letters of Credit, and the participation by the
Bank in the funding of advances under the Letters of Credit. Accordingly, all
covenants and agreements on the part of the Company and the Authority, as set
forth in this Agreement, are hereby declared to be for the benefit of the Owners
from time to time of the Bonds and for the benefit of the Bank.
ARTICLE III.
PAYMENT PROVISIONS
Section 3.01. Loan Payments.
(a) The Company hereby agrees to pay duly and punctually (i) the
principal, premium, if any, and interest due and payable on the Bonds; (ii) the
Purchase Price of the Bonds, and (iii) any other amounts due and payable by the
Company under this Agreement or the Indenture. The Company shall be given an
immediate credit in the amount of (i) all draws paid to the Trustee under the
Letters of Credit and (ii) the proceeds of the remarketing of Bonds used to pay
the Purchase Price of the Bonds pursuant to Article V of the Indenture, against
the loan payments due hereunder. Any portion of the loan payments due under this
Agreement which is not timely paid (upon proper demand under the Letters of
Credit by the Trustee) from draws under the Letters of Credit shall be paid to
the Trustee directly by the Company as provided in Section 3.03 hereof. Any
other amounts required to be paid under this Agreement shall be paid by the
Company to the party entitled to receive same hereunder and in the manner
provided for herein. Loan payments shall be made by the Company with the
Company's funds, except to the extent a credit in respect thereof has been
granted pursuant to the terms of this Agreement. It is the intention of the
Authority and the Company that, notwithstanding any other provision of this
Agreement, the Authority shall receive funds from the Company under this
Agreement at such times and in such amounts as will enable the Authority to meet
all of its obligations under the Bonds and the Indenture, including any such
obligations surviving the payment of the Bonds and the defeasance of the
Indenture. The loan payments required by this Section 3.01(a) shall be reduced
after payment of the principal, premium if any and interest on the Bonds in
accordance with the terms of the Indenture has been made.
(b) All loan payments and other sums due and payable to the Authority
or the Trustee under this Agreement shall be absolutely net to the Authority or
the Trustee, as applicable, free of any taxes, costs, liabilities or other
deductions whatsoever with respect to the Project Facilities and the
maintenance, repair, rebuilding, use or occupation thereof or any portion
4
thereof, so that this Agreement shall yield all amounts due hereunder net to the
Authority or the Trustee throughout the term hereof.
Section 3.02. Letters of Credit. Concurrently with the issuance by the
Authority of the Bonds, the Company shall cause to be delivered to the Trustee
the Letters of Credit issued by the Bank, authorizing the Trustee to make draws
on the Bank, up to an aggregate stated amount of Four Million Three Hundred
Eighty-Four Thousand Seventy-Two Dollars and Eighty-Eight Cents ($4,384,072.88),
of which Four Million Three Hundred Thousand Dollars ($4,300,000) shall be in
respect of aggregate principal on the Bonds and Eighty-Four Thousand Seventy-Two
Dollars and Eighty-Eight Cents ($84,072.88) shall be in respect of up to
forty-six (46) days' aggregate interest accrued on the Bonds on or prior to the
maturity thereof.
Section 3.03. Time of Loan Payments.
(a) The Company shall pay to the Trustee, as assignee of the Authority
(but only to the extent such amounts have not been advanced to the Trustee under
the Letters of Credit), on the dates and times hereinafter set forth, for
deposit in the Bond Fund, the following sums:
(i) On any Interest Payment Date or any other date that any
payment of interest, premium, if any, or principal is required to be
made in respect of the Bonds pursuant to the Indenture, until the
principal of, premium, if any, and interest on the Bonds shall have
been fully paid or provision for the payment thereof shall have been
made in accordance with the Indenture, in immediately available funds,
a sum which, together with any moneys available for such payment in
the Bond Fund, will enable the Trustee to pay the amount payable on
such date as principal of (whether at maturity or upon redemption or
acceleration or otherwise), premium, if any, and interest on the Bonds
as provided in the Indenture; provided, however, that the obligation
of the Company to make any payment hereunder shall be deemed satisfied
and discharged to the extent of the corresponding payment made by the
Bank to the Trustee under the Letters of Credit.
It is understood and agreed that all payments payable by the Company
under subsection (a)(i) of this Section 3.03 are assigned by the Authority to
the Trustee for the benefit of the Owners of the Bonds, as applicable. The
Company assents to such assignment. The Authority hereby directs the Company and
the Company hereby agrees to pay to the Trustee at the Principal Office of the
Trustee all payments payable by the Company pursuant to this subsection.
(ii) The Company covenants, for the benefit of the Owners of the
Bonds, to pay or cause to be paid, to the Tender Agent, such amounts
as shall be necessary to enable the Tender Agent to pay the Purchase
Price of the Bonds delivered to it for purchase, all as more
particularly described in Sections 5.01, 5.03 and 5.04 of the
Indenture; provided, however, that the obligation of the Company to
make any such payment under this subsection (a)(ii) with respect to
the Bonds shall be reduced by the amount of moneys available for such
payment described in subsection (i) or (ii) of Section 5.05(a) of the
Indenture; and provided, further, that the obligation of the Company
5
to make any payment under this subsection (ii) shall be deemed to be
satisfied and discharged to the extent of the corresponding payment
made by the Bank under the Letters of Credit.
(iii) Additionally, from time to time, the Company shall make
such payments as shall be necessary to make up any deficiency in or to
fund fully any of the funds established under the Indenture.
Section 3.04. Additional Payments; Taxes; Utility Charges. As Additional
Payments hereunder, the Company, during the term of this Agreement, shall pay or
cause to be paid the following:
(a) To the public officers charged with the collection thereof,
promptly as the same become due, all taxes (or contributions or payments in lieu
thereof), including but not limited to income, profits or property taxes, which
may now or hereafter be imposed by the United States of America, any state or
municipality or any political subdivision or subdivisions thereof, and all
assessments for public improvements or other assessments, levies, license fees,
charges for publicly supplied water or sewer services, excises, franchises,
imposts and charges, general and special, ordinary and extraordinary (including
interest, penalties and all costs resulting from delayed payment of any of the
foregoing) of whatever name, nature and kind and whether or not now within the
contemplation of the parties hereto and which are now or may hereafter be
levied, assessed, charged or imposed or which are or may become a lien upon the
payments due under this Agreement, the Project Facilities or the use or
occupation thereof, or upon the Company or the Authority, or upon any
franchises, businesses, transactions, income, earnings and receipts (gross, net
or otherwise) of the Company in connection with the Project Facilities, or its
earnings, profits or receipts from, or its leasing or subleasing of, the Project
Facilities; provided, however, that the Company shall not be required to pay or
discharge or cause to be paid or discharged any tax, assessment, lien or other
matter hereunder so long as the validity thereof is being contested in good
faith and by appropriate legal proceedings diligently pursued, so long as the
operation of the Project Facilities or the receipt of income therefrom is not
adversely affected by reason thereof;
(b) All reasonable fees, charges and expenses of the Trustee, the
Remarketing Agent, the Placement Agent, the Tender Agent and the Bank, as and
when the same become due and payable, as agreed to by the Company under the
provisions of the agreements governing such fees, charges and expenses;
(c) The reasonable fees and expenses of such accountants, consultants,
attorneys and other experts as may be engaged by the Authority, the Trustee or
the Tender Agent to prepare audits, financial statements, reports, opinions or
provide such other services required or permitted under this Agreement or the
Indenture; and
(d) The reasonable fees and expenses of the Authority in connection
with this Agreement, the Bonds, the Indenture, the Tender Agent Agreement or the
Remarketing Agreement, and any and all other expenses incurred in connection
with the authorization, issuance, sale and delivery of any such Bonds or
incurred by the Authority in connection with any litigation which may at any
time be instituted involving this Agreement, the Bonds, the Indenture or any of
6
the other documents contemplated thereby, or incurred in connection with the
administration of this Agreement, or otherwise in connection with this
Agreement, the Indenture, the Bonds, the Tender Agent Agreement, the Remarketing
Agreement or any of the other documents, instruments or agreements in connection
therewith.
Such Additional Payments shall be billed to the Company, from time to
time, by the Authority, the Trustee, the Remarketing Agent, the Tender Agent or
the Bank, as the case may be, together with a statement certifying that the
amount billed has been paid or incurred and attaching reasonable supporting
documentation indicating that the amount billed has been paid or incurred for
one or more of the above items. After such a demand, amounts so billed shall be
paid by the Company within thirty (30) days after receipt of the xxxx by the
Company.
Section 3.05. Acceleration of Payment to Redeem Bonds. Whenever the Bonds
are subject to optional redemption or extraordinary redemption pursuant to the
Indenture and the provisions hereof, the Authority will, upon the written
request of the Company, direct the Trustee to call the same for redemption as
provided in the Indenture. Whenever any Bond is subject to mandatory redemption
pursuant to the Indenture, the Company will cooperate with the Authority and the
Trustee in effecting such redemption. In the event of any mandatory, optional or
extraordinary redemption of the Bonds, the Company will pay or cause to be paid
to the Trustee an amount equal to the applicable redemption price as a
prepayment of that portion of the loan payment corresponding to the Bonds to be
redeemed together with interest accrued to the date of redemption and will also
pay all fees and expenses of the Authority and the Trustee arising with respect
to such redemption or otherwise due and owing hereunder or under the Indenture
at such times and in such amounts as are required to effect the mandatory,
optional or extraordinary redemption of the Bonds under the terms of the
Indenture.
Section 3.06. No Defense or Set-Off. The obligations of the Company to make
loan payments shall be absolute and unconditional without any defense or set-off
for any reason, including, without limitation, any acts or circumstances that
may constitute failure of consideration, destruction of or damage to the Project
Facilities, invalidity or unenforceability of Bonds, commercial frustration of
purpose or failure of the Authority to perform and observe any agreement,
whether express or implied, or any duty, liability or obligation arising out of
or connected with this Agreement, it being the intention of the parties that the
payments required of the Company hereunder will be paid in full when due without
any delay or diminution whatsoever.
Section 3.07. Termination Upon Payment or Defeasance of Bonds. When (a)
interest on, and principal or the redemption price (as the case may be) of, all
Series A Bonds or Series A-T Bonds issued under the Indenture, together with all
other amounts due and payable by the Company hereunder and under the Indenture,
shall have been paid, or (b) there shall have been deposited with the Trustee an
amount evidenced by moneys or Government Obligations, the principal of and
interest on which, when due, without reinvestment, will provide sufficient
moneys to fully pay the principal or redemption price (as the case may be) of,
and all accrued interest on, all Bonds then Outstanding, as well as all other
sums payable or to become payable by the Company under this Agreement, as
evidenced by a verification report from an Accountant, delivered to the Trustee,
no further loan payments shall be payable hereunder and, with the consent of the
Bank (if any Letter of Credit remains outstanding or if any amounts are due and
7
owin to the Bank under the Reimbursement Agreement or any of the other Related
Documentation (as such term is defined in the Reimbursement Agreement)), this
Agreement shall thereupon be terminated, and the Authority (i) shall cause the
Trustee to pay over to the Company any additional moneys then remaining in any
funds or accounts under the Indenture (and which will not be required to pay any
amounts as set forth immediately above in this Section 3.07), and (ii) shall pay
over to the Company any additional moneys which may be paid to the Authority by
the Trustee; provided, however, that in each such case moneys remaining in any
fund or account under the Indenture or any additional moneys shall be first paid
to the Bank to the extent of any moneys then due and owing from the Company to
the Bank under the Reimbursement Agreement or any of the other Related
Documentation (as such term is defined in the Reimbursement Agreement).
Section 3.08. Assignment of Authority's Rights. As security for the payment
of the Bonds and amounts payable under this Agreement, the Authority will assign
to the Trustee all of the Authority's rights (except the Authority's rights to
indemnification and the payment of its fees and expenses and the reasonable fees
and expenses of its attorneys and other professionals) under this Agreement.
Subject to the prior assignment made to the Trustee to secure the Bonds, the
Authority will also assign all the Authority's rights under this Agreement to
the Bank to secure all of the obligations of the Company to the Bank under the
Reimbursement Agreement. The Company consents to such assignments and agrees to
make the loan payments under Section 3.01 and Section 3.05 hereof directly to
the Trustee without defense or set-off by reason of any dispute between the
Company and the Trustee or the Authority. Whenever the Company is required to
obtain the consent of the Authority hereunder, the Company shall also obtain the
written consent of the Bank.
Section 3.09. Assignment by Company. This Agreement may be assigned in
whole or in part by the Company without the necessity of obtaining the consent
of the Trustee or the Owners of the Bonds; provided, however, any such
assignment shall require the prior written consent of the Bank (as long as the
Bank is not in default under the Letters of Credit) and the Authority; and
further provided that no assignment pursuant to this Section shall be made
otherwise than in accordance with the Act and the Code as from time to time
amended. The Company shall, within thirty (30) days after execution thereof,
furnish or cause to be furnished to the Authority, the Trustee and the Bank a
true and complete copy of each such assignment together with any instrument of
assumption.
Section 3.10. Indemnity Against Claims.
(a) The Company agrees that at all times it will protect and hold the
Authority and the Trustee and their officers, directors, members, employees and
agents harmless and indemnified from and against all claims for losses, damages
or injuries to others, including death, personal injury and property damage or
loss, arising during the term hereof or during any other period arising out of
the acquisition, construction, installment, equipping or operation of the
Project Facilities; and the Authority and the Trustee shall not be liable for
any loss, damage or injury to the Person or property of the Company or its
agents, servants or employees or any other Person who or which may be upon the
Project Facilities or damaged or injured as a result of any condition existing
or activity occurring upon the Project Facilities or any other matter connected
directly or indirectly therewith due to any act or negligence of any Person,
8
excepting only willful misconduct of the Authority or the Trustee or their
officers, directors, agents, members or employees. The indemnity provided for in
this Section 3.10(a) shall be effective only to the extent that any loss
sustained by the Authority or the Trustee or their officers, directors, members,
employees and agents shall be in excess of the net proceeds actually recovered
and received by, or on behalf of, the Authority or the Trustee from any
insurance carried with respect to the loss sustained.
(b) The Company hereby covenants and agrees that it will indemnify and
hold harmless the Trustee and its directors, officers, agents and employees
(collectively, the "Indemnitees") harmless from and against any and all claims,
liabilities, losses, damages, fines, penalties, and expenses, including
out-of-pocket, incidental expenses, legal fees and expenses, and the allocated
costs and expenses of in-house counsel and legal staff ("Losses") that may be
imposed on, incurred by, or asserted against, the Indemnitees or any of them for
following any instructions or other directions upon which the Trustee is
authorized to rely pursuant to the terms of this Agreement and the Indenture. In
addition to and not in limitation of the immediately preceding sentence, the
Company also agrees to indemnify and hold the Indemnitees and each of them
harmless from and against any and all Losses that may be imposed on, incurred
by, or asserted against the Indemnitees or any of them in connection with or
arising out of the Trustee's performance under this Agreement or the Indenture,
provided the Trustee has not acted with gross negligence or engaged in willful
misconduct.
(c) The Company will indemnify, hold harmless and defend the Authority
and the Trustee, counsel to the Authority and the Trustee and the respective
officers, members, directors, officials and employees of each of them against
all losses, costs, damages, expenses, suits, judgments, actions and liabilities
of whatever nature including, specifically, any liability under any state or
federal securities laws (including but not limited to reasonable attorneys'
fees, litigation and court costs, amounts paid in settlement and amounts paid to
discharge judgments) directly or indirectly resulting from or arising out of or
related to: (i) the design, construction, installation, operation, use,
occupancy, maintenance or ownership of the Project Facilities (including
compliance with laws, ordinances and rules and regulations of public authorities
relating thereto); or (ii) any statements or representations with respect to the
Company, the Project Facilities, this Agreement, the Bonds, the Indenture, the
Letters of Credit, the Reimbursement Agreement or any other documents or
instruments delivered at or in connection with the closing held on the Closing
Date (including any statements or representations made in connection with the
offer or sale thereof) made or given to the Authority, the Trustee or any
underwriters or purchasers of any of the Bonds, by the Company or any of its
officers, agents or employees, including, but not limited to, statements or
representations of facts, financial information or Company affairs. The Company
also will pay and discharge and indemnify and hold harmless the Authority and
the Trustee from (x) any lien or charge upon payments by the Company to the
Authority and the Trustee under this Agreement and (y) any taxes (including,
without limitation, any ad valorem taxes and sales taxes, assessments,
impositions and other charges in respect of any portion of the Project
Facilities). If any such claim is asserted, or any such lien or charge upon
payments, or any such taxes, assessments, impositions or other charges are
sought to be imposed, the Authority or the Trustee will give prompt notice to
the Company, and the Company will have the sole right and duty to assume, and
will assume, the defense thereof, with full power to litigate, compromise or
settle the same in its sole discretion.
9
(d) If the indemnification provided heretofore is for any reason
determined to be unavailable to the Authority or the Trustee, then, with respect
to any such loss, claim, demand or liability, including expenses in connection
therewith, the Authority and the Trustee, as appropriate, shall be entitled as a
matter of right to contribution by the Company. The provisions of this Section
3.10 shall survive the termination of this Agreement and the Indenture and the
resignation or removal of the Trustee for any reason.
Section 3.11. Authority is Conduit Issuer; Company is Real Party in
Interest; Covenant Not to Xxx.
(a) The Company hereby expressly acknowledges that the Authority is a
conduit issuer and that all of the right, title and interest of the Authority in
and to this Agreement, but not the obligations of the Authority, are to be
assigned on a first priority basis to the Trustee and then, subordinately, to
the Bank (except for the right of the Authority to receive its reasonable fees
and expenses and the reasonable fees and expenses of its attorneys and other
professionals and to indemnification), naming the Trustee and the Bank, as
applicable, its true and lawful attorney for and in its name to enforce the
terms and conditions of this Agreement. Notwithstanding any other provision
contained herein, the Company hereby expressly agrees, acknowledges and
covenants that it shall duly and punctually perform or cause to be performed
each and every duty and obligation of the Authority under and pursuant to the
Indenture, which the Company is reasonably able to perform.
(b) The Company covenants and agrees that it shall neither xxx the
Authority, counsel to the Authority or any of its board members, officers,
agents or employees, past, present or future, for any claim, loss, demand,
action or nonaction based upon this financing nor ever raise as a defense in any
proceedings whatsoever that the Authority is the true party in interest.
Notwithstanding the provisions of the foregoing sentence, the Company shall be
entitled to (i) bring an action of specific performance against the Authority to
compel any action required to be taken by the Authority hereunder or an action
to enjoin the Authority from performing any action prohibited hereunder or under
any other documents, by this instrument or any other agreement executed and
delivered in connection with the issuance of the Bonds, but no such action shall
in any way impose pecuniary liability upon the Authority, counsel to the
Authority or any of its board members, officers, agents or employees, and (ii)
join the Authority in any litigation if such joinder is necessary to pursue any
of the Company's rights, provided that prior to such joinder, the Company shall
post such security as the Authority may reasonably require to protect further
the Authority from loss.
ARTICLE IV.
COMPANY OBLIGATIONS; ASSIGNMENT TO TRUSTEE
Section 4.01. General Obligation of the Company. This Agreement constitutes
a general obligation of the Company and the full faith and credit of the Company
is pledged to the payment of all amounts due hereunder.
Section 4.02. Assignment to Trustee. The Authority, immediately following
execution and delivery hereof, shall assign this Agreement and all loan payments
10
payable hereunder (except its right to receive its fees and expenses and the
reasonable fees and expenses of its attorneys and other professionals and to
indemnification) to the Trustee pursuant to the Indenture, IN TRUST, to be held
and applied pursuant to the provisions of the Indenture, and, subject and
subordinate to the prior assignment to the Trustee, to the Bank. The Company:
(1) consents to such assignments and accepts notice thereof with the same legal
effect as though such acceptances were embodied in separate instruments,
separately executed after execution of such assignments; (2) agrees to pay
directly to the Trustee or the Bank, as applicable, all payments payable
hereunder for application to amounts then due and payable or to become due and
payable hereunder or under the Indenture or the Reimbursement Agreement, such
payments to be paid by the Company to the Trustee or the Bank, as applicable,
without any defense, set-off or counterclaim arising out of any default on the
part of the Authority under the Agreement or any transaction between the Company
and the Authority or the Company and the Trustee; and (3) agrees that the
Trustee and the Bank, as applicable, may exercise any and all rights and pursue
any and all remedies granted the Authority hereunder.
Section 4.03. Maintenance and Operation of the Project Facilities.
(a) During the term of this Agreement, the Company will at its own
cost and expense keep and maintain, or cause to be kept and maintained, in good
repair and condition (excepting reasonable wear and tear) the Project Facilities
and all additions and improvements thereto, and pay, or cause to be paid, any
utility charges and other costs and expenses arising out of its use or occupancy
of the Project Facilities.
(b) The Company agrees to timely pay for any improvements to the
Project Facilities lawfully done or lawfully ordered to be done by any
municipal, state or federal authority and to comply in all material respects at
its own cost and expense with all lawful and enforceable notices received
(whether by the Authority or the Company) from public authorities from and after
the date hereof that affect the Project Facilities and the use and operation
thereof, other than those improvements, orders and notices, the amount, validity
or application of which is at the time being contested, in whole or in part, in
good faith by appropriate proceedings promptly initiated and diligently
conducted.
Section 4.04. Maintenance of Existence. Except as otherwise permitted in
the Reimbursement Agreement, the Holdings and Springs each agrees that it will
maintain its existence as a Delaware corporation, will maintain its status as an
entity authorized to conduct business in the State, will not dissolve or
otherwise dispose of all or substantially all of its assets and will not
consolidate with or merge into another entity except as permitted by the
Reimbursement Agreement.
Section 4.05. Compliance with Laws. With respect to the Project Facilities
and any additions, alterations or improvements thereto, the Company will at all
times comply with all applicable requirements of federal, state and local laws
and with all applicable lawful requirements of any agency, board, or commission
created under laws of the State or of any other duly constituted public
authority, and will use, and permit the use of, the Project Facilities only for
such purposes as are lawful under the Act; provided, however, that the Company
shall be deemed in compliance with this Section 4.05 so long as it is contesting
in good faith any such requirement by appropriate legal proceedings.
11
Section 4.06. Notice of Bankruptcy Case Commencement. The Company covenants
and agrees that it shall immediately notify the Authority, the Bank and the
Trustee of the commencement of any case by or against it under the Bankruptcy
Code.
Section 4.07. Substitute Letter of Credit. The Company may provide for the
delivery to the Trustee of a Substitute Letter of Credit upon thirty (30) days
prior written notice to the Trustee, the Tender Agent, the Remarketing Agent and
the Authority, which notice shall state the proposed Substitution Date and shall
be revocable by the Company prior to delivery of such Substitute Letter of
Credit. Any Substitute Letter of Credit shall be delivered to the Trustee not
later than the thirtieth (30th) Business Day prior to the expiration of the
Letter of Credit it is being issued to replace. On or before the fifth (5th)
Business Day prior to the delivery of any Substitute Letter of Credit to the
Trustee, as a condition to the acceptance of any Substitute Letter of Credit by
the Trustee, the Company shall furnish to the Authority, the Trustee and the
Remarketing Agent (i) written evidence that the issuer of such Substitute Letter
of Credit is a commercial bank organized and doing business in the United States
o a branch or agency of a foreign commercial bank located and doing business in
the United States and subject to regulation by state or federal banking
regulatory authorities and that it has been assigned the same or better rating
as the Letter of Credit it is being issued to replace in effect immediately
prior to the substitution of the Substitute Letter of Credit, (ii) an opinion of
nationally recognized bond counsel to the effect that the delivery of such
Substitute Letter of Credit is authorized under this Agreement and the Indenture
and the Act and complies with the terms hereof, and, an opinion to the effect
that the delivery of such Substitute Letter of Credit does not adversely affect
the exclusion from gross income of the interest on the Bonds for federal income
tax purposes, and (iii) an opinion of Counsel satisfactory to the Trustee, the
Authority, the Company and the Remarketing Agent to the effect that the
Substitute Letter of Credit is a legal, valid and binding obligation of the
issuer (or, in the case of a branch or agency of a foreign commercial bank, the
branch or agency) issuing the same, enforceable in accordance with its terms,
that payments of principal, premium, if any (if such Substitute Letter of Credit
secures the payment of premium), or Purchase Price of or interest on the Bonds
from the proceeds of a drawing on the Substitute Letter of Credit will not
constitute voidable preferences under the Bankruptcy Code or other applicable
laws and regulations and that it is not necessary to register the Substitute
Letter of Credit under the Securities Act of 1933, as amended. In the case of a
Substitute Letter of Credit issued by a branch or agency of a foreign commercial
bank there shall also be delivered an opinion of Counsel, satisfactory to the
Trustee, the Authority, the Company and the Remarketing Agent and licensed to
practice law in the jurisdiction in which the head office of such bank is
located, to the effect that the Substitute Letter of Credit is the legal, valid
and binding obligation of such bank enforceable in accordance with its terms.
The Trustee shall accept any such Substitute Letter of Credit only in accordance
with the terms, and upon the satisfaction of the conditions, contained in this
Section 4.07 and any other provisions applicable to acceptance of a Substitute
Letter of Credit under this Agreement and the Indenture.
ARTICLE V.
TAX MATTERS
Section 5.01. Prohibited Uses. The Company covenants and agrees that it
will not knowingly take or authorize or permit, to the extent such action is
12
within the control of the Company, any action to be taken with respect to the
Project and the Project Facilities, the proceeds of the Bonds (including
investment earnings thereon) or any insurance, condemnation or other proceeds
derived directly or indirectly in connection with the Project or the Project
Facilities which will result in the loss of the exclusion of interest on the
Series A Bonds from federal gross income under Section 103 of the Code (except
for any Series A Bonds during any period while such Bond is held by a person
referred to in Section 147(a) of the Code); and the Company also will not
knowingly omit to take any action in its power which, if omitted, would cause
such result. The Company covenants for the benefit of the Bondholders to comply
with all of the requirements of Section 6.13 and 7.09 of the Indenture. The
preceding sentence shal control in case of conflict or ambiguity with any other
provision of this Agreement. The Company covenants and agrees to notify the
Trustee and the Authority of the occurrence of any event of which the Company
has notice and which event would require the Company to prepay the amounts due
hereunder because of a redemption of the Series A Bonds upon a Determination of
Taxability.
Section 5.02. Covenants and Representations with Respect to Arbitrage. The
Authority, to the extent it has control over proceeds of the Series A Bonds, and
the Company covenant and represent to each other and to and for the benefit of
the Holders of the Series A Bonds that so long as any of the Series A Bonds
remain Outstanding, moneys on deposit in any fund in connection with the Series
A Bonds, whether such moneys were derived from the proceeds of the sale of the
Series A Bonds or from any other sources, will not be used in a manner which
will cause the Series A Bonds to be "arbitrage bonds" within the meaning of
Section 148 of the Code and any lawful regulations promulgated thereunder, as
the same exist on this date or may from time to time hereafter be amended,
supplemented or revised. The Company also covenants for the benefit of the
Holders of the Series A Bonds to comply with all of the provisions of the Tax
Certificate of the Company. The Company reserves the right, however, to make any
investmen of such moneys permitted by the laws of the State, if, when and to the
extent that said Section 148 or regulations promulgated thereunder shall be
repealed or relaxed or shall be held void by final judgment of a court of
competent jurisdiction, but only upon receipt of an opinion of nationally
recognized bond counsel to the effect that such proposed investment will not
adversely affect the exclusion from gross income of interest of the Series A
Bonds for federal income tax purposes.
ARTICLE VI.
INSURANCE; DESTRUCTION, DAMAGE, EMINENT DOMAIN
Section 6.01. Insurance to be Maintained. The Company covenants to provide
and maintain continuously, unless otherwise herein provided, adequate insurance
on the Project Facilities as shall be mutually agreed upon by the Bank and the
Company. Each insurance policy with respect to the Project Facilities shall name
the Bank and the Trustee as additional insureds.
Section 6.02. Destruction, Damage and Eminent Domain. If the Project
Facilities shall be wholly or partially destroyed or damaged by fire or other
casualty covered by insurance, or shall be wholly or partially condemned, taken
or injured by any Person, including any Person possessing the right to exercise
13
the power of or a power in the nature of eminent domain or shall be transferred
to such a Person by way of a conveyance in lieu of the exercise of such a power
by such a Person, the Company covenants that it will take all actions and will
do all things which may be necessary to enable recovery to be made upon such
policies of insurance or on account of such taking, condemnation, conveyance,
damage or injury. The Company is authorized, in its own name, as trustee of an
express trust, to demand, collect, xxx, settle claims, receipt and release
monies which may be due and payable under policies of insurance covering such
damage or destruction or on account of such condemnations, damage or injury. Any
moneys recovered (i) on policies of insurance required to be maintained
hereunder or (ii) as a result of any taking, condemnation, conveyance, damage or
injury shall be deposited in the Construction Fund held by the Trustee under the
Indenture and shall be applied in accordance with the provisions of Section 6.04
hereof; provided, however, that as long as the Bank is not in default under the
terms of any of the Letters of Credit, the applicable provisions of the
Reimbursement Agreement shall control the disposition of casualty insurance and
condemnation award proceeds.
Any appraisement or adjustment of loss or damage and any settlement or
payment therefor, shall be agreed upon by the Company, the Bank (as long as the
Bank is not in default under any of the Letters of Credit) and the appropriate
insurer or condemnor or Person, and shall be evidenced to the Bank by the
certificate and approvals set forth in the Indenture. The Bank may rely
conclusively upon such certificates.
Section 6.03. Notice of Property Loss. After the occurrence of loss or
damage to, or after receipt of notice of condemnation of, the Project
Facilities, the Company shall within five (5) Business Days thereof notify the
Authority, the Trustee and the Bank, in writing, of such damage.
Section 6.04. Disposition of Casualty Insurance and Condemnation Award
Proceeds. If the Bank is in default under the terms of any of the Letters of
Credit, and as long as the Company is not in default under the terms of this
Agreement, the Company may elect, in its discretion, whether to apply the
proceeds of any casualty insurance coverage and/or condemnation awards to (i)
the repair, reconstruction or replacement of damaged, destroyed or injured
property comprising the Project Facilities or (ii) the redemption of Bonds
pursuant to the applicable provisions of the Indenture. Absent timely direction
from the Company as to the application of any casualty insurance coverage and/or
condemnation awards or if the Company shall be in default under the terms of
this Agreement, the proceeds thereof shall be applied to the extraordinary
redemption of the Bonds at par plus accrued interest through the date of
redemption. For purposes of the preceding sentence, "timely direction" shall
mean 60 days after the Compan has agreed, in connection with any damage to or
condemnation of the Project Facilities, upon the settlement or payment with
respect to any appraisement or adjustment of loss or damage, as appropriate.
ARTICLE VII.
ADDITIONAL COVENANTS OF THE COMPANY
Section 7.01. Compliance with Laws. The Company covenants that all actions
heretofore and hereafter taken by the Company or by the Authority upon the
14
recommendation or request of any officer of the Company to acquire and carry out
the Project have been and will be in full compliance with all pertinent laws,
ordinances, rules, regulations and orders applicable to the Company. In
connection with the operation, maintenance, repair and replacement of the
Project Facilities, the Company covenants that it shall comply with all
applicable ordinances, laws, rules, regulations and orders of the government of
the United States of America, the State, and any other applicable government
unit having jurisdiction over it, and any requirement of any board of fire
underwriters having jurisdiction or of any insurance company writing insurance
on the Project Facilities; provided, however, that nothing herein shall prevent
or prohibit the Company from contesting in good faith and by appropriate
proceedings the legality or reasonableness of any such standards, or the
imposition of any such standards upon it with respect to the Project Facilities
so long as the operation of the Project Facilities or the receipt of income
therefrom would not be adversely affected by reason thereof. The Company further
covenants and represents that the Project Facilities are in compliance with all
applicable zoning, subdivision, building, land use and similar laws and
ordinances. The Company covenants that it shall not take any action or request
the Authority to execute any release which would cause the Project Facilities to
be in violation of such laws or ordinances or such that a conveyance of the
Project Facilities or of any portion of the Project Facilities would create a
violation of such laws and ordinances. The Company acknowledges that any review
by the Authority or Counsel to the Authority of any action heretofore or
hereafter taken by the Company has been or will be solely for the protection of
the Authority. Such reviews shall not prevent the Authority from enforcing any
of the covenants made by the Company.
Section 7.02. Power to Perform Obligations. The Company covenants and
represents that it has full power and legal right to enter into this Agreement
and perform its obligations hereunder. The making and performance of the
Agreement by the Company has been duly authorized by all necessary action and
will not conflict with or constitute a breach of or default under any bond,
contract, indenture, agreement or any other instrument by which the Company or
any of its properties is or may be bound.
Section 7.03. Inspection. The Company covenants that the Authority, by its
duly authorized representatives, at reasonable times and with reasonable notice,
for purposes of determining compliance with the Agreement, may inspect any part
of the Project Facilities.
Section 7.04. Additional Information. The Company agrees, whenever
requested by the Authority, to provide and certify or cause to be provided and
certified such information concerning the Project Facilities, to enable the
Authority to make any reports or supply any information required by the
Indenture, law, governmental regulation or otherwise.
ARTICLE VIII.
EVENTS OF DEFAULT AND REMEDIES
Section 8.01. Events of Default. The following events shall constitute
"Events of Default" under this Agreement:
(a) if the Company fails to make any payment required by Sections
3.01, 3.03, 3.04 or 3.05 hereof when due; or
15
(b) if the Company fails to make any other payment required hereby and
such failure continues for 30 days after the Authority or the Trustee gives
written notice to the Company that such payment is due and unpaid; or
(c) if the Company fails to perform any of its other covenants or
conditions or fails to perform any of its obligations hereunder and such failure
continues for 60 days after the Authority or the Trustee gives the Company
written notice thereof; provided, however, that if such performance requires
work to be done, actions to be taken, or conditions to be remedied, which by
their nature cannot reasonably be done, taken or remedied, as the case may be,
within such 30 day period, no Event of Default shall be deemed to have occurred
or to exist if, and so long as, the Company shall commence such performance
within such 60-day period and shall diligently and continuously proceed to
completion; or
(d) if the Company commits any act of bankruptcy under the Bankruptcy
Code or any state bankruptcy law or any law providing for reorganization or
relief for debtors or files or has filed against it a petition in bankruptcy or
for arrangement or reorganization pursuant to the Bankruptcy Code or other
similar law, federal or state, or if, by the decree of a court of competent
jurisdiction, is adjudicated a bankrupt or declared insolvent, or makes an
assignment for the benefit of creditors, or admits in writing its inability to
pay its debts generally when or as they become due, or consents to the
appointment of a trustee, receiver or to the liquidation of all or any part of
the Project Facilities, provided that, if any such proceeding is commenced by a
Person other than the Company, there shall be no Event of Default if such
proceedings are dismissed within 60 days of the filing of initial pleadings
therein; or
(e) the declaration by the Bank of an Event of Default under and as
defined in the Reimbursement Agreement;
Section 8.02. Acceleration. Subject to the provisions of this Agreement,
upon the occurrence of any "Event of Default" by the Authority under the
Indenture caused or resulting directly or indirectly by the occurrence of an
Event of Default by the Company hereunder, the Trustee (with the prior written
consent of the Bank as long as the Bank is not in default under the terms of any
of the Letters of Credit), may, and upon the written request of the Holders of
25% in principal amount of the Bonds then Outstanding shall, pursuant to Section
8.02 of the Indenture, declare the principal of the then-Outstanding Bonds and
accrued interest immediately due and payable, but such Trustee shall not declare
the principal due and payable if such acceleration is annulled as therein
provided. Upon such declaration by the Trustee, there shall become immediately
due and payable hereunder as then current damages of the Authority under this
Agreement, an amount equal (i) to all amounts then due and payable by the
Authority to the Trustee under such Section 8.02 of the Indenture and (ii) all
other amounts due and owing as loan payments hereunder.
Section 8.03. Payment of Loan Payments on Default; Suit Therefor.
(a) Upon the occurrence of an Event of Default under this Agreement,
then, upon demand of the Authority or its assignee, the Company will pay to the
Authority or its assignee the whole amount of the loan payments that then shall
have become due and payable hereunder and to the extent such loan payments
represent payments due on the Bonds, such payments shall be applied to the
16
payment of the Bonds, as applicable, in accordance with the terms of the
Indenture; and, in addition thereto, such further amount as shall be sufficient
to pay the costs and expenses of collection, including reasonable compensation
based upon actual time expended by the Authority and its assignee and their
respective agents and attorneys, and any expenses or liabilities incurred by the
Authority or its assignee (other than through the Authority's or its assignee's
own gross negligence or bad faith). In case the Company shall fail forthwith to
pay such amounts upon such demand, the Authority or its assignee shall be
entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company and collect in the manner provided
by law out of the property of the Company the money adjudged or decreed to be
payable.
(b) In case there shall be pending proceedings in bankruptcy or for
the reorganization of the Company under the Bankruptcy Code or any other
applicable law, or in case a receiver or trustee shall have been appointed for
the benefit of the creditors or the property of the Company, or in the case of
any other similar judicial proceedings relative to the Company, the Authority or
its assignee shall be entitled and empowered, by intervention in such
proceedings or otherwise, to file and prove a claim or claims for the whole
amount of the loan payments and other payments due hereunder, including interest
owing and unpaid in respect thereof, and, in case of any judicial proceedings,
to file such proofs of claim and other papers or documents as may be necessary
or advisable in order to have the claims of the Authority or its assignee
allowed, and to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute the same after the deduction
of its charges and expenses; and any receiver, assignee or trustee in bankruptcy
or reorganization is hereby authorized to make such payments to the Authority or
its assignee, and to pay to the Authority or its assignee any amount due it for
compensation based upon actual time expended and expenses, including counsel
fees and expenses incurred by it up to the date of such distribution.
Section 8.04. Other Remedies. Upon the occurrence of an Event of Default
hereunder, the Authority or its assignee may pursue whatever remedies may be
available at law or in equity as may appear necessary or desirable to collect
the amounts payable by the Company hereunder, or to enforce performance and
observance of any obligation, agreement or covenant of the Company under this
Agreement.
No action taken pursuant to this Section 8.04 shall relieve the Company (i)
of any of the Company's obligations, duties, liabilities, covenants and
representations contained herein or (ii) of any condition contained herein, all
of which shall survive any such action.
Section 8.05. Waiver. The Company hereby waives and relinquishes the
benefits of any present or future law exempting the Project Facilities from
attachment, levy or sale on execution, or any part of the proceeds arising from
the sale thereof, and all benefit of stay of execution or other process.
Section
8.06. Cumulative Rights. No remedy conferred upon or reserved to the
Authority or its assignee by this Agreement is intended to be exclusive of any
other available remedy or remedies, but each and every such remedy shall be
17
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
waiver by the Authority or its assignee of any breach by the Company of any of
its obligations, agreements or covenants hereunder shall be a waiver of any
subsequent breach, and no delay or omission to exercise any right or power shall
impair any such right or power or shall be construed to be a waiver thereof, but
any such right and power may be exercised from time to time and as often as may
be deemed expedient.
Section 8.07. No Exercise of Remedies Without Consent of Bank.
Notwithstanding anything to the contrary contained in this Agreement, neither
the Authority nor any assignee of the Authority under this Agreement shall
exercise or pursue remedies or declare an Event of Default or cause an
acceleration of the obligations contained in this Agreement without the prior
written consent of the Bank as long as the Bank shall not be in default of its
obligations under the terms of any of the Letters of Credit or a voluntary or
involuntary case has not been commenced by the filing of a petition under the
Bankruptcy Code or any other law relating to insolvency, bankruptcy,
reorganization, winding-up or composition or adjustment of debts by or against
the Bank.
Section 8.08. Determination of Taxability Not a Default. Notwithstanding
anything to the contrary contained in this Agreement, in the event of a breach
or inaccuracy of any applicable statutory or regulatory requirement or of a
covenant or representation of the Company relating to the exclusion from gross
income of interest on the Series A Bonds for purposes of federal income
taxation, such breach or inaccuracy shall not be considered an Event of Default
hereunder so long as the Company performs all of its obligations arising out of
the breach or inaccuracy including, without limitation, the payment of all
amounts due under Sections 3.01, 3.04 and 3.05 hereof if such breach or
inaccuracy results in a Determination of Taxability with respect to the Bonds.
Pursuant to the provisions of Section 4.01(b)(1) of the Indenture the Series A
Bonds are subject to mandatory redemption at any time, in whole, within one
hundred eighty (180) days after the occurrence of a Determination of Taxability.
ARTICLE IX.
OPTIONS TO TERMINATE AGREEMENT
Section 9.01. Option to Terminate Upon Defeasance. The Company shall have,
and is hereby granted, the option to terminate its obligations under this
Agreement prior to full payment of the Bonds by providing for the payment of all
of the Outstanding Bonds in accordance with Article XI of the Indenture.
Section 9.02. Option to Terminate Upon the Occurrence of Certain Events.
The Company shall have, and is hereby granted, the option to terminate its
obligations under this Agreement if any of the events set forth below shall
occur:
(A) The Project Facilities or any portion thereof shall have been
damaged or destroyed (1) to such extent that it cannot, in the
Company's judgment, be reasonably restored within a period of six (6)
months to the condition thereof immediately preceding such damage or
destruction, or (2) to such extent that the Company is thereby
18
prevented, in the Company's reasonable judgment, from carrying on its
normal operations at the Project Facilities for a period of six (6)
months or more;
(B) Title to, or the temporary use for a period of six (6) months
or more of, all or substantially all of the Project Facilities, or
such part thereof as shall materially interfere, in the Company's
reasonable judgment, with the operation of the Project Facilities for
the purpose for which the Project Facilities are designed, shall have
been taken under the exercise of the power of eminent domain by any
governmental body or by any Person, firm or corporation acting under
governmental authority (including such a taking or takings as results
in the Company's being thereby prevented from carrying on its normal
operations at the Project Facilities for a period of six (6) months or
more);
(C) Changes which the Company cannot reasonably control or
overcome in the economic availability of materials, supplies, labor,
equipment and other properties and things necessary for the efficient
operation of the Project Facilities for the purposes contemplated by
this Agreement, shall have occurred, or technological or other changes
shall have occurred which in the judgment of the Company render the
continued operation of the Project Facilities uneconomical for such
purpose; or
(D) As a result of any changes in the Constitution of the State
or the Constitution of the United States of America or of legislative
or administrative action (whether state or federal) or by final
decree, judgment or order of any court or administrative body (whether
state or federal) entered after the contest thereof by the Company in
good faith, this Agreement shall have become void and unenforceable or
impossible of performance in accordance with the intent and purposes
of the parties as expressed in this Agreement, or unreasonable burdens
or excessive liabilities shall have been imposed on the Company in
respect to the Project Facilities, including, without limitation,
federal, state or other ad valorem, property, income, or other taxes
not being imposed on the date of this Agreement.
To exercise such option, the Company shall within ninety (90) days
following the event authorizing such termination, give written notice to
the Authority and the Trustee and shall specify therein the date of
redemption of the Bonds pursuant to Section 4.01 of the Indenture, which
date shall be the next Interest Payment Date in respect of the Bonds for
which the required notice of redemption can practicably be given. In
accordance with the terms of the Indenture, the Company shall make
arrangements for the Trustee to give the required notice of redemption.
Payment of the redemption price of the Bonds redeemed pursuant to this
Section 9.02 will be made in accordance with the terms of the Indenture.
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ARTICLE X.
MISCELLANEOUS
Section 10.01. Approval of Indenture. The Company acknowledges that it has
received executed copies of the Indenture, the other Bond Documents and a copy
of the Letters of Credit and that it is familiar with their provisions, and
agrees that it will take all such actions as are required or contemplated of it
under the Indenture to preserve and protect the rights of the Trustee thereunder
and that it will not take any action which would cause a default or an Event of
Default thereunder. It is agreed by the Company and the Authority that any
redemption of the Bonds prior to maturity shall be effected as provided in the
Indenture.
Section 10.02. Illegal Provisions Disregarded. If any term or provision
hereof or the application thereof for any reason or circumstance shall to any
extent be held to be invalid or unenforceable, this Agreement shall be invalid
or unenforceable only to the extent of such invalidity or unenforceability and
such invalidity or unenforceability shall not invalidate the balance of such
provision or the remaining terms or provisions of this Agreement or the
application of such terms or provisions to Persons other than those as to which
it has been held invalid or unenforceable; each term and provision hereof shall
be valid and enforceable to the fullest extent permitted by law, and shall be
liberally construed in favor of the Authority or its assignee in order to effect
the intent of this Agreement.
Section 10.03. Limitation of Liability of the Agency. In the event of any
default by the Authority hereunder, and notwithstanding any provision or
obligation to the contrary hereinbefore or hereinafter set forth, the liability
of the Authority shall be limited to its interest in the Project Facilities, the
improvements thereon, the rents, issues and profits therefrom, and the lien of
any judgment shall be restricted thereto. The Authority does not assume general
liability nor specific liability for the repayment of any mortgage or other
loan, or for the costs, fees, penalties, taxes, interest, commissions, charges,
insurance or any other payments therein recited or therein set forth, or
incurred in any way in connection therewith. Other than as set forth hereinabove
in this Section 10.03, there shall be no other recourse for damages of any kind
or nature by the Company or any other Person against the Authority, counsel to
the Authority, its incorporator, officers, members, agents and employees, past,
present or future, or any of the property or other assets now or hereafter owned
by it or them, either directly or indirectly; and all such recourse or liability
is hereby expressly waived and released as a condition of and in consideration
for execution and delivery of this Agreement by the Authority.
Section 10.04. No Recourse as to the Agency. Except as expressly provided
in Section 10.03 above, no recourse under or upon any obligation, covenant or
agreement contained herein or in any Bond shall be had against the Authority,
counsel to the Authority or any member, officer, employee or agent, past,
present or future, of the Authority or of any successor of the Authority under
this Agreement, any other agreement, any rule of law, statute or constitutional
provision, or by enforcement of any assessment or by any legal or equitable
proceeding or otherwise, it expressly being agreed and understood that the
obligations of the Authority hereunder, and under the Bonds and elsewhere, are
solely corporate obligations of the Authority to the extent specifically limited
in the Act and that no personal liability whatsoever shall attach to or shall be
incurred by the Authority, counsel to the Authority or such members, officers,
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employees or agents, past, present or future, of the Authority or of any
successor of the Authority, or any of them, because of such indebtedness or by
reason of any obligation, covenant or agreement contained herein, in the Bonds
or implied therefrom.
Section 10.05. Reference to Statute or Regulation. A reference herein to a
statute or to a regulation issued by a governmental agency includes the statute
or regulation in force as of the date hereof, together with all amendments and
supplements thereto and any statute or regulation substituted for such statute
or regulation, unless the specific language or the context of the reference
herein clearly includes only the statute or regulation in force as of the date
hereof. A reference herein to a governmental agency, department, board,
commission or other public body or to a public officer includes an entity or
officer which or who succeeds to substantially the same functions as those
performed by such public body or officer as of the date hereof, unless the
specific language or the context of the reference herein clearly includes only
such public body or public officer as of the date hereof. Section 10.06.
Notices. All notices required or authorized to be given by the Company, the
Authority or the Trustee under the Indenture or pursuant to this Agreement shall
be in writing and shall be sent by registered or certified mail, postage
prepaid, to the following addresses:
to the Authority to:
Vermont Economic Development Authority
00 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Manager
to the Company to:
Vermont Pure Holdings, Ltd.
00 Xxxxxxxxx Xxxxxx
Xxxxxxxx Xxxxxx, XX 00000
Attention: Xxxxx XxxXxxxxx, Chief Financial Officer
Vermont Pure Springs, Inc.
00 Xxxxxxxxx Xxxxxx
Xxxxxxxx Xxxxxx, XX 00000
Attention: Xxxxx XxxXxxxxx, Chief Financial Officer
to the Trustee to:
First Union National Bank
000 X. Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx, Assistant Vice President
or to such other addresses as may from time to time be furnished to the parties,
effective upon the receipt of notice thereof given as set forth above. Each of
the above agrees that it shall send a duplicate copy or executed copy of all
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certificates, notices, correspondence or other data and materials required to be
sent to one of the above to all other parties and in addition, to the Bank at
0000 Xxxxxx Xxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxxxxxx 00000, Attention: Xxxx Xxxxxx,
Vice President.
Section 10.07. Applicable Law. This Agreement shall be deemed to be a
contract made in the State and governed by the law of the State.
Section 10.08. Amendments. This Agreement may not be amended except by an
instrument in writing signed by the parties and, if such amendment occurs after
the issuance of the Bonds, consented to by the Trustee and the Bank, so long as
the Bank is not in default under the terms of any of the Letters of Credit.
Section 10.09. Term of Agreement. Except as provided in Section 3.10, this
Agreement and the respective obligations of the parties hereto shall be in full
force and effect from the date hereof until all principal and Purchase Price of,
premium, if any, and interest on the Bonds and all other amounts due hereunder
and under the Indenture shall have been paid or provision for such payment shall
have been made pursuant to the terms and provisions hereof and of the Indenture.
Section 10.10. Amounts Remaining in Bond Fund. It is agreed by the parties
hereto that any amounts remaining in the Bond Fund established under the
Indenture upon expiration or sooner termination of this Agreement after payment
in full of the Bonds (or provision for payment thereof having been made in
accordance with the provisions of the Indenture) and of the fees, charges and
expenses of the Trustee and the Authority in accordance with this Agreement and
the Indenture, shall, to the extent of any unreimbursed draws under the Letters
of Credit, or any other Obligations owing by the Company to the Bank under the
Reimbursement Agreement or any of the other Related Documentation (as defined in
the Reimbursement Agreement), be paid to the Bank. Any remaining moneys shall
belong to and be paid to the Company by the Trustee.
Section 10.12. Multiple Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall be regarded for all purposes as an
original and such counterparts shall constitute but one and the same instrument.
Section 10.13. Consent. Whenever the consent of the Authority or its
assignee is given pursuant to the terms of this Agreement, such consent shall
create no liability or responsibility upon the Authority or its assignee, and
whenever required, shall not be unreasonably withheld.
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IN WITNESS WHEREOF, the VERMONT ECONOMIC DEVELOPMENT AUTHORITY has
caused this Agreement to be executed in its name and on its behalf by its
Manager under seal, and VERMONT PURE HOLDINGS, LTD. and VERMONT PURE SPRINGS,
INC. each have caused this Agreement to be executed in its name and on its
behalf by its authorized Officer under seal as of the day and year first above
written.
(SEAL) VERMONT ECONOMIC DEVELOPMENT AUTHORITY
By_______________________________________________
Xxxxxxx Xxxxxxx
Manager
(SEAL) VERMONT PURE HOLDINGS, LTD.
By_______________________________________________
Authorized Officer
(SEAL) VERMONT PURE SPRINGS, INC.
By_______________________________________________
Authorized Officer
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