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Exhibit: 4(h)
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HIGHLANDS COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY
AND
LESCO, INC.
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LOAN AGREEMENT
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Dated as of November 1, 1997
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The interest of the Highlands County Industrial Development
Authority (the "Issuer") in this Loan Agreement has been assigned (except for
amounts payable under Sections 4.2(b), 7.2 and 8.4 hereof) pursuant to the
Indenture of Trust dated as of the date hereof from the Issuer to PNC Bank,
N.A., as trustee (the "Trustee"), and is subject to the security interest of the
Trustee thereunder.
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LOAN AGREEMENT
TABLE OF CONTENTS
(This Table of Contents is not a part of the Loan Agreement and is only
for convenience of reference.)
ARTICLE I
DEFINITIONS
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PAGE
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Section 1.1. DEFINITIONS..................................................................... 1
Section 1.2. USES OF PHRASES................................................................. 3
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES
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Section 2.1. AGREEMENTS OF THE PARTIES....................................................... 4
Section 2.2. REPRESENTATIONS, COVENANTS AND WARRANTIES
OF THE ISSUER............................................................................ 4
Section 2.3. REPRESENTATIONS, COVENANTS AND WARRANTIES
OF THE COMPANY........................................................................... 5
Section 2.4. NOTICE OF DETERMINATION OF TAXABILITY........................................... 12
ARTICLE III
ACQUISITION AND CONSTRUCTION OF THE
PROJECT; ISSUANCE OF THE BONDS
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Section 3.1. AGREEMENT TO ACQUIRE, CONSTRUCT, IMPROVE
AND EQUIP THE PROJECT.................................................................... 12
Section 3.2. AGREEMENT TO ISSUE THE BONDS; APPLICATION
OF BOND PROCEEDS......................................................................... 12
Section 3.3. DISBURSEMENTS FROM THE CONSTRUCTION FUND........................................ 12
Section 3.4. FURNISHING DOCUMENTS TO THE TRUSTEE............................................. 13
Section 3.5. ESTABLISHMENT OF COMPLETION DATE................................................ 13
Section 3.6. COMPANY REQUIRED TO PAY IN EVENT
CONSTRUCTION FUND INSUFFICIENT........................................................... 14
Section 3.7. ARBITRAGE; PRESERVATION OF TAX-EXEMPTION........................................ 14
Section 3.8. CERTAIN COVENANTS WITH RESPECT TO
COMPLIANCE WITH ARBITRAGE REQUIREMENTS FOR
INVESTMENTS IN NONPURPOSE INVESTMENTS AND REBATE TO
THE UNITED STATES OF AMERICA............................................................. 15
Section 3.9. COVENANTS AS TO USE OF BOND PROCEEDS AND
OTHER MATTERS, PAYBACK PROVISION......................................................... 15
Section 3.10. DAMAGE, DESTRUCTION OR LOSS OF PROPERTY;
OBLIGATION TO REBUILD; USE OF INSURANCE PROCEEDS
AND CONDEMNATION AWARDS.................................................................. 16
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Section 3.11. PURSUIT OF REMEDIES AGAINST CONTRACTORS,
SUBCONTRACTORS AND SURETIES.............................................................. 17
Section 3.12. ............................................................................... 17
SECTION 3.13. SALE OF PROJECT OR PORTIONS THEREOF............................................ 17
ARTICLE IV
LOAN PROVISIONS; SUBSTITUTE LETTER OF CREDIT
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Section 4.1. LOAN OF PROCEEDS................................................................ 17
Section 4.2. AMOUNTS PAYABLE................................................................. 18
Section 4.3. OBLIGATIONS OF COMPANY UNCONDITIONAL............................................ 19
Section 4.4. SUBSTITUTE LETTER OF CREDIT..................................................... 20
ARTICLE V
PREPAYMENT AND REDEMPTION
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Section 5.1. PREPAYMENT AND REDEMPTION....................................................... 20
ARTICLE VI
SPECIAL COVENANTS
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Section 6.1. NO WARRANTY OF CONDITION OR SUITABILITY BY
ISSUER................................................................................... 21
Section 6.2. ACCESS TO THE PROJECT........................................................... 21
Section 6.3. FURTHER ASSURANCES AND CORRECTIVE
INSTRUMENTS.............................................................................. 21
Section 6.4. ISSUER AND COMPANY REPRESENTATIVES.............................................. 21
Section 6.5. FINANCIAL REPORTS............................................................... 21
Section 6.6. FINANCING STATEMENTS............................................................ 22
Section 6.7. MAINTENANCE OF PROJECT.......................................................... 22
Section 6.8. UNDERTAKING TO PROVIDE ONGOING
DISCLOSURE............................................................................... 22
ARTICLE VII
ASSIGNMENT, SELLING, LEASING;
INDEMNIFICATION; REDEMPTION
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Section 7.1. ASSIGNMENT, SELLING AND LEASING................................................. 27
Section 7.2. RELEASE AND INDEMNIFICATION COVENANTS........................................... 27
Section 7.3. ISSUER TO GRANT SECURITY INTEREST TO
TRUSTEE.................................................................................. 28
Section 7.4. INDEMNIFICATION OF TRUSTEE...................................................... 28
ARTICLE VIII
DEFAULTS AND REMEDIES
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Section 8.1. DEFAULTS DEFINED................................................................ 28
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Section 8.2. REMEDIES ON DEFAULT............................................................. 29
Section 8.3. NO REMEDY EXCLUSIVE............................................................. 30
Section 8.4. AGREEMENT TO PAY ATTORNEYS' FEES AND
EXPENSES................................................................................. 30
Section 8.5. NO ADDITIONAL WAIVER IMPLIED BY ONE
WAIVER................................................................................... 31
ARTICLE IX
MISCELLANEOUS
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Section 9.1. TERM OF AGREEMENT............................................................... 31
Section 9.2. NOTICES......................................................................... 31
Section 9.3. BINDING EFFECT.................................................................. 32
Section 9.4. SEVERABILITY.................................................................... 32
Section 9.5. AMOUNTS REMAINING IN FUNDS...................................................... 32
Section 9.6. AMENDMENTS, CHANGES AND MODIFICATIONS........................................... 33
Section 9.7. EXECUTION IN COUNTERPARTS....................................................... 33
Section 9.8. APPLICABLE LAW.................................................................. 33
Section 9.9. CAPTIONS........................................................................ 33
EXHIBIT "A" Project Facilities
EXHIBIT "B" Form of Requisition
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LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of November 1, 1997, between the
HIGHLANDS COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY, a public body corporate and
politic of the State of Florida (the "Issuer") and LESCO, INC., an Ohio
corporation qualified to do business under the laws of the State of Florida (the
"Company");
W I T N E S S E T H:
That the parties hereto, intending to be legally bound hereby,
and for and in consideration of the premises and the mutual covenants
hereinafter contained, do hereby covenant, agree and bind themselves as follows:
provided, that any obligation of the Issuer created by or arising out of this
Agreement shall never constitute a debt or a pledge of the faith and credit or
the taxing power of the Issuer or any political subdivision or taxing district
of the State of Florida but shall be payable solely out of the Trust Estate (as
defined in the Indenture), anything herein contained to the contrary by
implication or otherwise notwithstanding:
ARTICLE I
DEFINITIONS
Section 1.1. DEFINITIONS. All capitalized, undefined terms
used herein shall have the same meanings as used in Article I of the hereinafter
defined Indenture. In addition, the following words and phrases shall have the
following meanings:
"Cost" with respect to the Project shall be deemed to include
all items permitted to be financed under the provisions of the Code and the Act.
"Default" means any Default under this Agreement as specified
in and defined by Section 8.1 hereof.
"Indenture" means the Indenture of Trust dated as of this date
between the Issuer and the Trustee, pursuant to which the Bonds are authorized
to be issued, and any amendments and supplements thereto.
"Issuance Costs" shall have the meaning provided in Section
1.150-1(b) of the Income Tax Regulations and means, therefore, costs to the
extent incurred in connection with, and allocable to, the issuance of the Bonds,
including, but not limited to, (a) placement agent's spread (whether realized
directly or derived through purchase of the Bonds at a discount below the price
at which they are expected to be sold to the public); (b) counsel fees
(including bond counsel, placement agent's counsel, Issuer's
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counsel, Company counsel, as well as any other specialized counsel fees)
incurred in connection with the issuance of the Bonds; (c) financial advisory
fees incurred in connection with the issuance of the Bonds; (d) rating agency
fees; (e) Trustee fees incurred in connection with the issuance of the Bonds;
(f) paying agent fees; (g) registrar, certification and authentication fees
related to issuance of the Bonds; (h) accounting fees related to the issuance of
the Bonds; (i) printing costs of the Bonds and of the preliminary and final
offering materials; (j) publication costs associated with the financing
proceedings; (k) costs of engineering and feasibility studies necessary to the
issuance of the Bonds; and (l) bond insurance premiums, letter of credit fees,
or other forms of guarantee fees except to the extent such fees are for
qualified guarantees (as defined in Section 1.148-4(f) of the Income Tax
Regulations).
"Local Facilities" shall mean facilities (A) located within
the same corporate municipal or county area as the Project or located outside of
such corporate municipal or county area but contiguous and integrated with the
Project and (B) the principal user (within the meaning of Section 144(a) (2) of
the Code and proposed treasury regulation 1.103-10(h)) of which is or will be a
Principal Project User.
"Net Proceeds" means the proceeds from the sale of the Bonds
reduced by any portion thereof deposited in a debt service reserve fund.
"Plans and Specifications" means the plans and
specifications for the Project submitted to the Bank and the
Trustee.
"Principal Project User" shall mean the Company, any other
principal user (within the meaning of Section 144(a) (2) of the Code and
proposed treasury regulation 1.103-10(h)) of the Project and any related person
(within the meaning of 144(a) (3) of the Code) of the Company or any such
principal user of the Project.
"Project" means the Project Site and the Project
Facilities.
"Project Facilities" means those certain buildings or
improvements to buildings and all other facilities and improvements and any
items of machinery, equipment, or other tangible property forming a part of the
Project to be constructed on the Project Site, all as described generally in
Exhibit "A" hereto and all renewals and replacements thereof and substitutions
therefor.
"Project Site" means the tract of land located at the Sebring
Regional Airport and Industrial Park in Highlands County, Florida, on which the
Project Facilities will be situated, and any other interests in real property,
leasehold interests, easements,
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licenses, and rights in real property hereafter acquired by the Company with
proceeds of the Bonds for use in connection with the Project.
"Qualified Project Costs" means Costs paid or incurred with
respect to the Project:
(a) for the acquisition, construction, reconstruction, or
improvement (i) of land or (ii) of property that is subject to exhaustion, wear
and tear, or obsolescence, that has a useful life in the hands of the Company of
more than one year, and that is otherwise of a character subject to the
allowance for depreciation under the Code; and
(b) that, under the Code, are chargeable to the Project's
capital account or would be so chargeable either (i) with a proper election by
the Company (for example, under Section 266 of the Code), or (ii) but for a
proper election by the Company to deduct such amounts.
However, Costs paid prior to April 27, 1997, other than "preliminary
expenditures" as defined in Section 1.150-2(f) of the Income Tax Regulations,
are not Qualified Project Costs. Further, neither working capital expenditures
nor the financing of inventory nor Issuance Costs are Qualified Project Costs.
Interest costs accruing during the construction period shall be allocated
between Qualified Project Costs and other Costs to be paid from the proceeds of
the Bonds. Interest costs accruing after the Construction Period are not
Qualified Project Costs.
"Reimbursement Resolution" means the resolution of the Issuer
adopted on June 25, 1997 expressing the interest of the Company to reimburse
itself from the proceeds of tax-exempt bonds for amounts expended by the Company
on the Project.
"Requisition" means a written request for a disbursement from
the Construction Fund, signed by a Company Representative, substantially in the
form attached hereto as Exhibit "B" and satisfactorily completed as contemplated
by said form.
"State" means the State of Florida.
"Substantially All" means ninety-five percent (95%) or more,
unless an opinion of Bond Counsel is rendered indicating that such term, as used
herein, shall have a different meaning.
"Term of Agreement" means the term of this Agreement as
specified in Section 9.1 hereof.
Section 1.2. USES OF PHRASES. Words of the masculine
gender shall be deemed and construed to include correlative words
of the feminine and neuter genders. Unless the context shall
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otherwise indicate, the words "Bond," "Bondholder," "registered owner" and
"person" shall include the plural as well as the singular number and the word
"person" shall include corporations and associations, including public bodies,
as well as persons. "Herein," "hereby," "hereunder," "hereof," "hereinbefore,"
"hereinafter" and other equivalent words refer to this Agreement and not solely
to the particular portion thereof in which any such word is used. Any percentage
of Bonds, specified herein for any purpose, is to be figured on the unpaid
principal amount thereof then outstanding. All references herein to specific
Sections of the Code refer to such Sections of the Code and all successor or
replacement provisions thereto.
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES
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Section 2.1. AGREEMENTS OF THE PARTIES. It is hereby agreed by
and between the Issuer and the Company that:
(a) The Company proposes to acquire, construct and equip the
Project. The Issuer proposes to loan money to the Company for the
construction and equipping of the Project pursuant to the terms and
conditions expressed herein, all for the purposes of fostering the
industrial and business development of, and improving living conditions
in, Highlands County, Florida, and otherwise contributing to the
welfare of the State of Florida and its inhabitants.
(b) To finance the Cost of the Project, the Issuer proposes to
issue the Bonds in the original aggregate principal amount of
$7,500,000 and to loan the proceeds of the Bonds to the Company.
(c) All of the Bonds will be issued under the Indenture and
will mature, bear interest, be redeemable and have the other terms and
provisions set forth in the Indenture, pursuant to which the Issuer's
interest in this Agreement and the revenues and receipts thereunder
derived by the Issuer (except for the amounts payable under Sections
4.2(b), 7.2 and 8.4 hereof) will be pledged and conveyed to the Trustee
as security for payment of the principal of, premium, if any, and
interest on the Bonds.
Section 2.2. REPRESENTATIONS, COVENANTS AND WARRANTIES OF THE
ISSUER. The Issuer represents, covenants and warrants that:
(a) The Issuer is a public body corporate and politic of the
State of Florida. The Issuer is authorized to enter into the
transactions contemplated by this Agreement, and the Indenture and to
carry out its obligations hereunder and
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thereunder. The Issuer has been duly authorized to execute
and deliver this Agreement and the Indenture.
(b) The Issuer duly adopted the Reimbursement Resolution on
June 25, 1997.
(c) The Issuer covenants that it will not pledge the amounts
derived from this Agreement other than as contemplated by the
Indenture.
(d) After reasonable public notice given by publication in The
Highlands Today, section of The Tampa Tribune, a newspaper published
and of general circulation in Highlands County, Florida on July 31,
1997, the Issuer held a public hearing on August 14, 1997 concerning
the issuance of the Bonds and the nature and location of the Project.
(e) On August 19, 1997, the Board of County Commissioners of
Highlands County, the elected legislative body of Highlands County,
approved the issuance of the Bonds by a duly adopted resolution at a
duly called and publicly noticed meeting. Highlands County has
jurisdiction over the entire area in which the Project will be located.
Section 2.3. REPRESENTATIONS, COVENANTS AND WARRANTIES OF THE
COMPANY. The Company represents, covenants and warrants that:
(a) The Company is an Ohio corporation duly organized and
validly existing and in good standing under the laws of the State of
Florida, and has full power and authority to enter into and perform
under this Agreement, the Remarketing Agreement, and the Credit
Agreement, and such performance has been properly authorized by proper
corporate action of the Company. The Company is not in violation of any
provision of its Articles of Incorporation, as amended, has the
corporate power to enter into and perform this Agreement, and has duly
authorized by proper corporate action the execution and delivery of
this Agreement, and is qualified to do business and is in good standing
under the laws of the State.
(b) Reserved.
(c) Neither the execution and delivery of this Agreement, the
Remarketing Agreement, or the Credit Agreement, nor the consummation of
the transactions contemplated hereby and thereby, nor the fulfillment
of or compliance with the terms and conditions hereof or thereof
conflicts with or results in a breach of the articles of incorporation
or the regulations of the Company or the terms, conditions, or
provisions of any agreement or instrument to which the Company is now a
party or by which the Company is bound, or
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constitutes a default under any of the foregoing, or results in the
creation or imposition of any lien, charge or encumbrance whatsoever
upon any of the property or assets of the Company under the terms of
any such instrument or agreement.
(d) There is no action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court, public
board or body, known to be pending or to the knowledge of the Company
threatened against or affecting the Company or any of its officers, nor
to the best knowledge of the Company is there any basis therefor,
wherein an unfavorable decision, ruling, or finding would materially
adversely affect the transactions contemplated by this Agreement or
which would adversely affect, in any way, the validity or
enforceability of the Bonds, this Agreement, the Credit Agreement, the
Remarketing Agreement, or any agreement or instrument to which the
Company is a party, used or contemplated for use in the consummation of
the transactions contemplated hereby.
(e) The Project is of the type authorized and permitted by the
Act, and its estimated Cost is not less than $7,500,000.
(f) The Project currently constitutes, and until the
expiration of the term hereof and the payment of the Bonds in full,
will constitute an "industrial and manufacturing facility" and a
"project" within the meaning of Section 159.27, Florida Statutes.
(g) The Net Proceeds from the sale of the Bonds will be used
only for payment of Costs of the Project. None of the Net Proceeds from
the sale of the Bonds will be used as working capital or to finance
inventory.
(h) The Project currently constitutes, and until the
expiration of the term hereof and payment of the Bonds in full, will
constitute a manufacturing facility within the meaning of Section
144(a)(12)(C) of the Code.
(i) Except for the Bonds, there are no outstanding obligations
issued by any state, territory or possession of the United States, or
any political subdivision of the foregoing, or of the District of
Columbia, the proceeds of which have been or are to be used primarily
with respect to Local Facilities, and of which the Company or any
Related Person within the meaning of Section 144(a)(3) of the Code is a
"principal user", as that term is used in Section 144(a)(2) of the
Code.
(j) The Company will use due diligence to cause the Project to
be operated in accordance with the laws, rulings,
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regulations and ordinances of the State and the departments, agencies
and political subdivisions thereof. The Company has obtained or will
cause to be obtained as needed all requisite approvals of the State and
of other federal, state, regional and local governmental bodies for the
acquisition, construction, improving and equipping of the Project.
(k) The Company will fully and faithfully perform all the
duties and obligations which the Issuer has covenanted and agreed in
the Indenture to cause the Company to perform, any duties and
obligations which the Company is required in the Indenture to perform
and any delegable or assignable duties and obligations which the Issuer
is required in the Indenture to perform. The foregoing shall not apply
to any duty or undertaking of the Issuer which by its nature cannot be
delegated or assigned.
(l) Except for any architectural, engineering, surveying, soil
testing, or similar preliminary activities occurring earlier, the
commencement of the acquisition and construction of the Project, and
each of the several components thereof, occurred subsequent to April
27, 1997, which is sixty days prior to the date of adoption by the
Issuer of the Reimbursement Resolution. No proceeds of any Bonds will
be used to reimburse the Company for amounts paid prior to April 27,
1997, other than for "preliminary expenditures" as defined in Section
1.150-2(f) of the Income Tax Regulations.
(m) The Company has entered into various contracts providing
for the acquisition, construction, improvement and equipping of the
Project that collectively create a substantial binding commitment on
the Company's part to expend at least five percent (5%) of the Net
Proceeds of the Bonds on the Project.
(n) The Project consists of land and/or property subject to
the allowance for depreciation under the Code, and Substantially All of
the Net Proceeds of the Bonds, including earnings from the investment
thereof, will be used to pay Qualified Project Costs.
(o) No changes shall be made in the Project and no actions
will be taken by the Company that shall in any way cause interest on
the Bonds to be included in gross income for federal income tax
purposes.
(p) Based on current facts, estimates and circumstances, the
Company currently expects:
(1) that the acquisition, construction and equipping
of the Project and the expenditure of all
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of the net sale proceeds of the Bonds will be completed by
December 31, 1998;
(2) to proceed with due diligence toward completion
of the Project (the work on which has already commenced) and
the expenditure of the Net Proceeds of the Bonds in connection
with the Project;
(3) the Net Proceeds of the Bonds are needed for the
purpose of paying all or a part of the Cost of the Project;
and
(4) the Project will not be sold or disposed of in a
manner producing sale proceeds which, together with
accumulated proceeds of the Bonds or earnings thereon, would
be sufficient to enable the Company to retire substantially
all of the Bonds prior to the maturity of the Bonds.
(q) As of the date of execution and delivery of this
Agreement, there exists no Default or any condition or event which
would constitute, or with the passage of time or the giving of notice,
or both, would constitute a Default hereunder.
(r) The average maturity of the Bonds does not exceed one
hundred twenty percent (120%) of the average reasonably expected
economic life of the assets being financed or refinanced with the
proceeds of the Bonds, with the average reasonably expected economic
life of each asset being measured from the later of the date of
issuance of the Bonds or the date such asset is reasonably expected to
be, or was, placed in service and by taking into account the respective
cost of each asset being financed. The information furnished by the
Company and used by the Issuer to verify the average reasonably
expected economic life of each asset of the Project to be financed with
the proceeds of the Bonds is true, accurate and complete.
(s) There is no pending, or to the knowledge of the Company,
threatened, actions, suits or proceedings before any court or
administrative agency which are likely in any case or in the aggregate
to materially adversely affect the financial condition or business,
operations, value of the assets or income of the Company, nor is the
Company aware of any facts or circumstances that would give rise to any
such actions or proceedings.
(t) (i) The payment of principal or interest with respect to
the Bonds will not be guaranteed (in whole or in part) by the United
States (or any agency or instrumentality
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thereof); (ii) less than five percent (5%) of the proceeds of the Bonds
will be (A) used in making loans the payment of principal and interest
with respect to which are to be guaranteed (in whole or in part) by the
United States (or any agency or instrumentality thereof), or (B)
invested (directly or indirectly) in federally insured deposits or
accounts as defined in Section 149(b) of the Code; and (iii) the
payment of principal or interest on the Bonds will not otherwise be
indirectly guaranteed (in whole or in part) by the United States (or
any agency or instrumentality thereof).
The foregoing provisions of this subsection shall not apply to
proceeds of the Bonds being (u) invested for an initial temporary
period until such proceeds are needed for the purpose for which such
issue was issued; (v) held in a bona fide debt service fund; (w) held
in a debt service reserve fund that meets the requirements of Section
148(d) of the Code with respect to reasonably required reserve or
replacement funds; (x) invested in obligations issued by the United
States Treasury; or (y) held in a refunding escrow (I.E., a fund
containing proceeds of a refunding bond issue established to provide
for the payment of principal or interest on one or more prior bond
issues); or (z) invested in other investments permitted under
regulations promulgated pursuant to Section 149(b)(3)(B) of the Code.
(u) Any information that has been or will be supplied by the
Company that has been or will be relied upon by the Issuer, the Trustee
and by Bond Counsel with respect to the eligibility of the Project and
the exclusion from gross income for federal income tax purposes of
interest on the Bonds is true and correct.
(v) All proceeds of the Bonds will be used to pay the "cost"
(within the meaning of Section 159.44(5), Florida Statutes) of the
Project.
(w) The Company shall promptly provide written notice to the
Issuer and the Trustee if the Company becomes aware of a Default as
such term is used in Section 8.1 hereof.
(x) All components of the Project are or will be located
wholly within the boundaries of the Project Site, and the Project Site
is located completely within Highlands County, Florida.
(y) This Agreement constitutes a valid and binding obligation
of the Company enforceable against the Company in accordance with its
terms.
(z) The Company is duly authorized to operate the Project
under the laws, rulings, regulations and ordinances of
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the State of Florida and the departments, agencies and political
subdivisions thereof.
(aa) None of the proceeds of the issuance of the Bonds will be
used to provide any airplane, skybox or other private luxury box,
health club facility, any facility primarily used for gambling, or any
store the principal business of which is the sale of alcoholic
beverages for consumption off premises, or land to be used for farming
purposes.
(bb) The commencement of the acquisition and construction of
the Project, and each of the several components thereof, occurred
subsequent to April 27, 1997, the date which is sixty (60) days prior
to adoption by the Issuer of the Reimbursement Resolution. No proceeds
of the Bonds will be used to reimburse the Company for amounts paid
prior to such date other than for "preliminary expenditures" as defined
in Section 1.150-2(f) of the Income Tax Regulations.
(cc) The Project consists entirely of property that is owned,
or is to be owned by the Company. Substantially All of the Net Proceeds
of the Bonds plus interest earnings thereon will be expended for
Qualified Project Costs.
(dd) No capital expenditures as described in Section 144(a)
(4) of the Code ("Capital Expenditures") have been paid or incurred in
the three years preceding the date of the issuance of the Bonds or will
be paid or incurred in the three years after the date of the issuance
of the Bonds with respect to the Project or any Local Facilities, and
of which the Company or any Related Person within the meaning of
Section 144(a) (3) of the Code will be a "principal user," as that term
is used in Section 144(a) (2) of the Code, will exceed $10,000,000 or
such higher amount as may be authorized by the Code as applicable to
the Bonds; provided, however, that to the extent and for the purposes
allowed by Section 144(a) (4) (C) of the Code, certain Capital
Expenditures shall not be taken into account in determining if such
$10,000,000 amount, as computed in accordance with this subsection (g),
has been exceeded.
(ee) the Company has not caused or will not cause the issuance
of private activity bonds, as defined in Section 141 of the Code, on
its behalf in any jurisdiction of the United States during the 30 day
period commencing 15 days prior to the issuance of the Bonds.
(ff) The Company covenants that, if any portion of the
proceeds of the Bonds is to be used for the acquisition of any building
(and the equipment therefore), the rehabilitation expenditures, as
defined in Section 147(d)(3) of the Code, with respect to such building
will equal or exceed fifteen
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percent (15%) of the cost of such acquisition financed with proceeds of
the Bond.
(gg) Substantially all of the proceeds of the sale of the
Bonds and including investment earnings on proceeds of the Bonds will
be used to pay those items of the Costs of the Project, or portions
thereof, which constitute costs of acquisition, construction,
reconstruction or improvement of land or property of a character
subject to the allowance for depreciation within the meaning of Section
144(a) of the Code and which constitute a manufacturing facility within
the meaning of Section 144(a) (12) (C) of the Code.
(hh) None of the proceeds of the Bond will be used to provide
any private or commercial golf course, country club, massage parlor,
tennis club, skating facility (including roller skating, skateboards
and ice skating), racquet sports facility (including any handball or
racquetball court), hot tub facility, suntan facility, or racetrack.
(ii) The Company, during the term of this Agreement, will
fully comply and require any other principal user (as that term is used
in Section 144(a) (2) of the Code and proposed treasury regulation
1.103-10(h)) to comply with all effective rules, rulings and
regulations promulgated by the Department of the Treasury or the
Internal Revenue Service, with respect to bonds issued under Section
144(a) (4) of the Code so as to maintain the exclusion from gross
income for federal income tax purposes of the interest payable on the
Bond.
(jj) The aggregate authorized face amount of the Bonds when
increased by the outstanding tax-exempt facility-related bonds (as
defined in Section 144(a) (10) (B) (ii) of the Code) with respect to
any issue the proceeds of which are allocated pursuant to Section
144(a) (10) of the Code to the Company or any related person within the
meaning of Section 144(a) (3) of the Code, does not exceed $40,000,000.
(kk) Less than 25% of the proceeds of the Bond will be used
directly or indirectly for the acquisition of land or an interest
therein or to provide a facility the primary purpose of which is either
retail food and beverage services, automobile sales or service, or the
provision of recreation or entertainment. During the life of the Bonds,
the Project will not be used primarily for either retail food and
beverage services, automobile sales or service, or the provision of
recreation or entertainment.
(ll) None of the proceeds of the Bonds are being used to
finance any office space which is not located on the Project Site which
office space is not directly related to the day to
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day operations of the Project as a manufacturing facility within the
meaning of Section 144(a) (12) (C) of the Code.
(mm) From the proceeds of the Bonds, including investment
earnings thereon, an amount not in excess of two percent (2%) of the
proceeds of the Bonds will be used to pay for, or to provide for the
payment of, the Issuance Costs of the Bonds.
Section 2.4. NOTICE OF DETERMINATION OF TAXABILITY. Promptly
after the Company first becomes aware of any Determination of Taxability, the
Company shall give written notice thereof to the Issuer and the Trustee.
ARTICLE III
ACQUISITION AND CONSTRUCTION OF THE
PROJECT; ISSUANCE OF THE BONDS
------------------------------
Section 3.1. AGREEMENT TO ACQUIRE, CONSTRUCT, IMPROVE AND
EQUIP THE PROJECT. The Company agrees to make all contracts and do all things
necessary for the acquisition, construction, improving, and equipping of the
Project, with or without advertising for bids, and the Company agrees that it
will cause the Project Facilities to be constructed on the Project Site
substantially in accordance with the Plans and Specifications. The Company may
make such change orders as it deems necessary or desirable.
The Company further agrees that it will acquire, construct,
improve, and equip the Project with all reasonable dispatch and use its best
efforts to cause acquisition, construction, improving, equipping, and occupancy
of the Project to be completed by November 4, 2000, or as soon thereafter as may
be practicable, delays caused by FORCE MAJEURE as defined in Section 8.1 hereof
only excepted; but if for any reason such acquisition, construction, improving
and equipping is not completed by said date there shall be no resulting
liability on the part of the Company and no diminution in or postponement of the
payments required in Section 4.2 hereof to be paid by the Company.
Section 3.2. AGREEMENT TO ISSUE THE BONDS; APPLICATION OF BOND
PROCEEDS. In order to provide funds for the payment of the Cost of the Project,
the Issuer, concurrently with the execution of this Agreement, will issue, sell,
and deliver the Bonds and deposit the net proceeds thereof (after payment of the
fees and expenses of the placement agent) with the Trustee in the Construction
Fund.
Section 3.3. DISBURSEMENTS FROM THE CONSTRUCTION FUND. The
Issuer has, in the Indenture, authorized and directed the Trustee to make
disbursements from the Construction Fund to pay the Costs of the Project, or to
reimburse the Company for any Cost of
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the Project paid by the Company. The Trustee shall not make any disbursement
from the Construction Fund until the Company shall have provided the Trustee
with a Requisition, provided that the Trustee may transfer amounts from the
Construction Fund to the Bond Fund related to the payment of interest on the
Bonds through the Completion Date without a Requisition.
Section 3.4. FURNISHING DOCUMENTS TO THE TRUSTEE. The Company
agrees to cause such Requisitions to be directed to the Trustee as may be
necessary to effect payments out of the Construction Fund in accordance with
Section 3.3 hereof.
Section 3.5. ESTABLISHMENT OF COMPLETION DATE.
(a) The Completion Date as to the Project shall be evidenced
to the Issuer and the Trustee by a certificate signed by a Company
Representative stating that, except for amounts retained by the Trustee at the
Company's direction to pay any Cost of the Project not then due and payable, (i)
construction of the Project has been completed and all costs of labor, services,
materials and supplies used in such construction have been paid, (ii) all
equipment for the Project has been installed, such equipment so installed is
suitable and sufficient for the operation of the Project, and all costs and
expenses incurred in the acquisition and installation of such equipment 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 subsequently come into being. Forthwith upon completion of the
acquisition, construction, improving, and equipping of the Project, the Company
agrees to cause such a certificate to be furnished to the Issuer and the
Trustee. Upon receipt of such certificate, the Trustee shall retain in the
Construction Fund a sum equal to the amounts necessary for payment of the Costs
of the Project not then due and payable according to such certificate. If any
such amounts so retained are not subsequently used, prior to any transfer of
said amounts to the General Account of the Bond Fund as provided below, the
Trustee shall give notice to the Company of the failure to apply said funds for
payment of the Costs of the Project. Any amount not to be retained in the
Construction Fund for payment of the Costs of the Project, and all amounts so
retained but not subsequently used, shall be transferred by the Trustee into the
General Account of the Bond Fund.
(b) If less than Substantially All of the Net Proceeds of the
Bonds then Outstanding has been used to pay Qualified Project Costs, any amount
(exclusive of amounts retained by the Trustee in the Construction Fund for
payment of Costs of the Project not then due and payable) remaining in the
Construction
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Fund shall be transferred by the Trustee into the General Account of the Bond
Fund and used by the Trustee (a) to redeem, or to cause the redemption of, Bonds
on the earliest redemption date permitted by the Indenture without a premium,
(b) to purchase Bonds on the open market prior to such redemption date at prices
not in excess of one hundred percent (100%) of the principal amount of such
Bonds, or (c) for any other purpose provided that the Trustee is furnished with
an opinion of Bond Counsel to the effect that such use is lawful under the Act,
if applicable, and will not require that interest on the Bonds be included in
gross income for federal income tax purposes. Until used for one or more of the
foregoing purposes, such segregated amount may be invested as permitted by the
Indenture provided that prior to any such investment, if applicable, the Trustee
is provided with an opinion of Bond Counsel to the effect that such investment
will not cause interest on the Bonds to be included in gross income for federal
income tax purposes.
Section 3.6. COMPANY REQUIRED TO PAY IN EVENT CONSTRUCTION
FUND INSUFFICIENT. In the event the moneys in the Construction Fund available
for payment of the Costs of the Project should not be sufficient to pay the
Costs of the Project in full, the Company agrees to complete the Project and to
pay that portion of the Costs of the Project in excess of the moneys available
therefor in the Construction Fund. The Issuer does not make any warranty, either
express or implied, that the moneys paid into the Construction Fund and
available for payment of the Costs of the Project will be sufficient to pay all
of the Costs of the Project. The Company agrees that if after exhaustion of the
moneys in the Construction Fund, the Company should pay any portion of the Costs
of the Project pursuant to the provisions of this Section, the Company shall not
be entitled to any reimbursement therefor from the Issuer, the Trustee or the
Owners of any of the Bonds, nor shall the Company be entitled to any diminution
of the amounts payable under Section 4.2 hereof.
Section 3.7. ARBITRAGE; PRESERVATION OF TAX-EXEMPTION. The
Issuer and the Company each agree and covenant that neither the proceeds of the
Bonds nor the funds held by the Trustee under the Indenture will be used in such
manner as to cause any Bond to be an "arbitrage bond" within the meaning of
Section 148 of the Code, as amended, as implemented by such proposed, temporary
and final Regulations as have been or may hereafter be adopted by the United
States Treasury Department thereunder. The Company further agrees and covenants
not to take any action, the result of which would cause or be likely to cause
the interest payable with respect to the Bonds not to be excluded from gross
income for federal income tax purposes. The Company will comply with the
applicable requirements of Section 103 and Part IV of Subchapter B of Chapter 1
of the Code to the extent necessary to preserve the exclusion of interest on the
Bonds from gross income of the Bondholders thereof for federal income tax
purposes.
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Section 3.8. CERTAIN COVENANTS WITH RESPECT TO COMPLIANCE WITH
ARBITRAGE REQUIREMENTS FOR INVESTMENTS IN NON- PURPOSE INVESTMENTS AND REBATE TO
THE UNITED STATES OF AMERICA. Section 148(f) of the Code, as implemented by
Sections 1.148-1 to 1.148-11 of the Income Tax Regulations (the "Rebate
Provisions"), requires that, with certain exceptions, the Issuer pay to the
United States of America the Rebate Amount. The Company hereby assumes and
agrees to make all payments for deposit into the Rebate Fund, in accordance with
the terms of Section 6.13 of the Indenture, to pay the Rebate Amount, consents
to the payment of the Rebate Amount by the Trustee in accordance with the terms
and provisions of Section 6.13 of the Indenture, and agrees to pay any amounts
in addition to the Rebate Amount, including all interest and penalties, if any,
related thereto to the extent that funds available therefor held by the Trustee
under the Indenture are not sufficient for such purpose. The Company agrees to
indemnify, protect and hold harmless the Issuer and the Trustee with respect to
any nonpayment of the Rebate Amount and such interest and penalties, and the
Trustee with respect to the unavailability or insufficiency of funds with which
to make such payments, and with respect to any expenses or costs incurred by the
Trustee in complying with the terms of Section 6.13 of the Indenture. The
Company hereby agrees to fully and timely comply with the requirements of
Section 6.13 of the Indenture.
Section 3.9. COVENANTS AS TO USE OF BOND PROCEEDS AND
OTHER MATTERS, PAYBACK PROVISION. The Company covenants and agrees
that:
(i) Substantially All of the Net Proceeds received from the
sale of the Bonds actually disbursed from the Construction Fund, and
investment earnings thereon, will be used for payment of Qualified
Project Costs;
(ii) (A) until disbursements from the Construction Fund have
been made of all Issuance Costs to be paid from proceeds of the Bonds,
the Company will not submit to the Trustee any requisition for a
disbursement from the Construction Fund unless the expenditure of such
disbursement will either be for Qualified Project Costs or for Issuance
Costs;
(B) after all Issuance Costs to be paid with proceeds of
the Bonds have been requisitioned and until the date on which the
aggregate Qualified Project Costs paid as of that date equals or
exceeds Substantially All of the Costs of the Project paid as of
that date from proceeds of the Bonds, including investment earnings
thereon, the Company will not submit to the Trustee any requisition
for a disbursement from the Construction Fund unless the expenditure
of such disbursement will be for Qualified Project Costs; and
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(C) after such date, the Company will not submit to
the Trustee any requisition for a disbursement from the Construction
Fund if, after the expenditure of such disbursement, less than
Substantially All of the Net Proceeds of the Bonds and investment
earnings thereon actually disbursed to that time would have been used
to pay Qualified Project Costs;
(iii) the Company will not submit to the Trustee any
requisition for a disbursement from the Construction Fund for Issuance
Costs if, after the expenditure of such disbursement, more than two
percent (2%) of the proceeds of the Bonds would have been used to pay
Issuance Costs;
(iv) in the event a disbursement from the Construction Fund is
made which results in the covenants in paragraphs (i), (ii) or (iii)
above being violated, the Company will promptly repay to the Trustee
for deposit in the Construction Fund such amount as may be necessary
for the Company to again be in compliance with paragraphs (i), (ii) or
(iii) above;
Section 3.10. DAMAGE, DESTRUCTION OR LOSS OF PROPERTY;
OBLIGATION TO REBUILD; USE OF INSURANCE PROCEEDS AND CONDEMNATION AWARDS. If
prior to full payment of all Bonds (or provision for payment thereof having been
made in accordance with the provisions of the Indenture), the Project, or any
part or component of the Project shall be damaged or destroyed, by whatever
cause, or shall be taken by any public authority or entity in the exercise of or
acquired under the threat of the exercise of its power of eminent domain, there
shall be no abatement or reduction in the Loan Installments payable under this
Agreement, and the Company will apply any insurance proceeds or condemnation
awards resulting from claims for such losses or takings as provided in this
Section.
If prior to full payment of all Bonds (or provision for
payment thereof having been made in accordance with the provisions of the
Indenture), the Project, or any part or component of the Project shall be
damaged, destroyed, or the Project or any part or component of the Project shall
be taken by eminent domain or the threat of exercise of eminent domain, the
Company shall promptly give, or cause to be given, written notice thereof to the
Issuer, the Bank and the Trustee. All proceeds received from such property
insurance with respect to the Project and all condemnation awards with respect
to the Project shall be deposited with the Trustee to the credit of the
Construction Fund. Following the occurrence of such an event with respect to the
Project, the Company shall have the option of (1) continuing to pay all amounts
payable hereunder and to the extent permitted below proceeding promptly to
repair, rebuild, restore or replace the property damaged, destroyed or taken,
with such changes, alterations and modifications (including
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the substitution and addition of other property) as may be desired by the
Company and, with respect to the Project, and as will comply with the
limitations contained in this Agreement, and the Trustee will deposit such
proceeds to the credit of the Construction Fund and make such disbursements
therefrom, in accordance with Section 3.3 hereof, as may be necessary to pay the
cost of such repair, rebuilding or restoration, either on completion thereof or
as the work progresses or (2) requesting the Issuer to cause the Bonds to be
redeemed in accordance with the terms of the Indenture or (3) any combination of
(1) and (2).
Section 3.11. PURSUIT OF REMEDIES AGAINST CONTRACTORS,
SUBCONTRACTORS AND SURETIES. In the event of default of any contractor or
subcontractor, if any, under any contract made by it in connection with the
Project, the Company will promptly proceed, either separately or in conjunction
with others, to the extent commercially reasonable, to exhaust its remedies
against the contractor or subcontractor so in default and against each surety
for the performance of such contract. The Company agrees forthwith to take such
actions as may be necessary or required to protect the interests of all parties
with respect to the Project unless directed to the contrary by the Trustee. Any
amounts recovered by way of damages, refunds, adjustments or otherwise in
connection with the foregoing that are needed to pay a portion of the cost of
the Project shall be paid into the applicable account in the Construction Fund.
Section 3.12. Reserved.
SECTION 3.13. SALE OF PROJECT OR PORTIONS THEREOF. The
Company agrees that it shall not sell the Project or any components thereof
financed with the proceeds of the Bonds, except that, to the extent otherwise
permitted under the terms of this Agreement, the Project and components thereof
may be sold pursuant to a sale or other transfer of components of the Project
if: (i) in the judgment of the Company, such component has become obsolete, worn
out or surplus, provided that any amounts received by the Company upon such
disposition will be applied by the Company to acquire, construct or renovate
property qualified for financing under Section 144 of the Code, or (ii) the
Company delivers to the Trustee, the Bondholders and the Issuer of a written
opinion of Bond Counsel to the effect that any such disposition will not
adversely affect the validity of the Bonds or the exclusion of interest on the
Bonds from gross income for federal income tax purposes.
ARTICLE IV
LOAN PROVISIONS; SUBSTITUTE LETTER OF CREDIT
--------------------------------------------
Section 4.1. LOAN OF PROCEEDS. The Issuer agrees, upon
the terms and conditions contained in this Agreement and the
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Indenture, to lend to the Company the proceeds received by the Issuer from the
sale of the Bonds. Such proceeds shall be disbursed to or on behalf of the
Company as provided in Section 3.3 hereof.
Section 4.2. AMOUNTS PAYABLE.
(a) The Company hereby covenants and agrees to repay the loan,
as follows: on or before any Interest Payment Date for the Bonds or any other
date that any payment of interest, premium, if any, or principal or Purchase
Price 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 or the
Purchase Price of 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 other moneys available for such
payment in any account of the Bond Fund, will enable the Trustee to pay the
amount payable on such date as Purchase Price or 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 Letter of Credit.
It is understood and agreed that all payments payable by the
Company under subsection (a) of this Section 4.2 are assigned by the Issuer to
the Trustee for the benefit of the Owners of the Bonds. The Company assents to
such assignment. The Issuer hereby directs the Company, and the Company hereby
agrees to pay to the Trustee at the Principal Office of the Trustee all payments
payable by the Company pursuant to this subsection.
(b) The Company will also pay the reasonable expenses of the
Issuer related to the issuance of the Bonds and any and all ongoing costs and
expenses for any continuing duties or obligations of the Issuer related in any
respect to the Bonds, this Agreement, the Indenture or any other documents
executed in connection therewith after the issuance of the Bonds.
(c) The Company will also pay the reasonable fees and expenses
of the Trustee under the Indenture and all other amounts which may be payable to
the Trustee under Section 10.02 of the Indenture, such amounts to be paid
directly to the Trustee for the Trustee's own account as and when such amounts
become due and payable.
(d) 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 Bonds
delivered to it for purchase, all as more
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particularly described in Sections 4.01, 4.02 and 4.04 of the Indenture;
PROVIDED, however, that the obligation of the Company to make any such payment
under this subsection (d) shall be reduced by the amount of moneys available for
such payment described in subsection (i) of Section 4.05 of the Indenture; and
PROVIDED, FURTHER, that the obligation of the Company to make any payment under
this subsection (d) shall be deemed to be satisfied and discharged to the extent
of the corresponding payment made by the Bank under the Letter of Credit.
(e) In the event the Company should fail to make any of the
payments required in this Section 4.2, the item or installment so in default
shall continue as an obligation of the Company until the amount in default shall
have been fully paid, and the Company agrees to pay the same with interest
thereon, to the extent permitted by law, from the date when such payment was
due, at the rate of interest borne by the Bonds.
Section 4.3. OBLIGATIONS OF COMPANY UNCONDITIONAL. The
obligations of the Company to make the payments required in Section 4.2 and to
perform and observe the other agreements contained herein shall be absolute and
unconditional and shall not be subject to any defense or any right of setoff,
counterclaim or recoupment arising out of any breach by the Issuer or the
Trustee of any obligation to the Company, whether hereunder or otherwise, or out
of any indebtedness or liability at any time owing to the Company by the Issuer
or the Trustee, and, until such time as the principal of, premium, if any, and
interest on the Bonds shall have been fully paid or provision for the payment
thereof shall have been made in accordance with the Indenture, the Company (i)
will not suspend or discontinue any payments provided for in Section 4.2 hereof,
(ii) will perform and observe all other agreements contained in this Agreement
and (iii) except as otherwise provided herein, will not terminate the Term of
Agreement for any cause, including, without limiting the generality of the
foregoing, failure of the Company to complete the acquisition, construction,
improving and equipping of the Project, the occurrence of any acts or
circumstances that may constitute failure of consideration, eviction or
constructive eviction, destruction of or damage to the Project, the taking by
eminent domain of title to or temporary use of any or all of the Project,
commercial frustration of purpose, any change in the tax or other laws of the
United States of America or of the State or any political subdivision of either
thereof or any failure of the Issuer or the Trustee to perform and observe any
agreement, whether express or implied, or any duty, liability or obligation
arising out of or connected with this Agreement. Nothing contained in this
Section shall be construed to release the Issuer from the performance of any of
the agreements on its part herein contained, and in the event the Issuer or the
Trustee should fail to perform any such agreement on its part, the Company may
institute such action against the Issuer or the Trustee as the Company may deem
necessary to compel performance so long as such
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action does not abrogate the obligations of the Company contained in the first
sentence of this Section.
Section 4.4. SUBSTITUTE LETTER OF CREDIT. The Company may
provide for the delivery to the Trustee of a Substitute Letter of Credit. Any
Substitute Letter of Credit shall be delivered to the Trustee not less than
sixty (60) days prior to the expiration of the Letter of Credit it is being
issued to replace, shall be dated as of a date prior to the expiration date of
the Letter of Credit for which the same is to be substituted (which date may be
subsequent to the date of delivery of such Substitute Letter of Credit, but in
all events such Substitute Letter of Credit shall become effective prior to the
expiration of the Letter of Credit for which it is substituted), and shall
expire on a date which is fifteen days after an Interest Payment Date for the
Bonds. On or before the date of such delivery of a Substitute Letter of Credit
to the Trustee, the Company shall furnish to the Trustee (a) written evidence
from each rating agency by which the Bonds are then rated, to the effect that
such rating agency has reviewed the proposed Substitute Letter of Credit and
that the substitution of the proposed Substitute Letter of Credit will not, by
itself, result in the reduction or withdrawal of the then applicable rating(s)
of the Bonds; (b) a written opinion of Bond Counsel stating that the delivery of
such Substitute Letter of Credit will not adversely affect the exclusion from
gross income of interest on the Bonds for federal income tax purposes; (c) a
written opinion of counsel to the Substitute Bank to the effect that the
Substitute Letter of Credit is a legal, valid, binding and enforceable
obligation of the Substitute Bank in accordance with its terms; and (d) a
written opinion of Bond Counsel or other counsel acceptable to the Trustee
substantially to the effect that payments made by the Trustee of principal and
interest on the Bonds with proceeds of draws on the Substitute Letter of Credit
are not avoidable preference under the federal bankruptcy code.
ARTICLE V
PREPAYMENT AND REDEMPTION
-------------------------
Section 5.1. PREPAYMENT AND REDEMPTION. The Company shall have
the option to prepay its obligations hereunder at the times and in the amounts
as necessary to exercise its option to cause the Bonds to be redeemed as set
forth in the Indenture and in the Bonds. The Issuer, at the request of the
Company, shall forthwith take all steps (other than the payment of the money
required for such redemption) necessary under the applicable redemption
provisions of the Indenture to effect redemption of all or part of the
Outstanding Bonds, as may be specified by the Company, on the date established
for such redemption.
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ARTICLE VI
SPECIAL COVENANTS
-----------------
Section 6.1. NO WARRANTY OF CONDITION OR SUITABILITY BY
ISSUER. THE ISSUER MAKES NO WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE
PROJECT OR THE CONDITION THEREOF, OR THAT THE PROJECT WILL BE SUITABLE FOR THE
PURPOSES OR NEEDS OF THE COMPANY. THE ISSUER MAKES NO REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, THAT THE COMPANY WILL HAVE QUIET AND PEACEFUL
POSSESSION OF THE PROJECT. THE ISSUER MAKES NO REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, WITH RESPECT TO THE MERCHANTABILITY, CONDITION OR
WORKMANSHIP OF ANY PART OF THE PROJECT OR ITS SUITABILITY FOR THE COMPANY'S
PURPOSES.
Section 6.2. ACCESS TO THE PROJECT. The Company agrees that
the Issuer, the Bank, the Trustee and their duly authorized agents, attorneys,
experts, engineers, accountants and representatives shall have the right to
inspect the Project at all reasonable times and on reasonable notice. The
Issuer, the Bank, the Trustee and their duly authorized agents shall also be
permitted, at all reasonable times, to examine the books and records of the
Company with respect to the Project.
Section 6.3. FURTHER ASSURANCES AND CORRECTIVE INSTRUMENTS.
The Issuer and the Company agree that they will, from time to time, execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered,
such supplements hereto and such further instruments as may reasonably be
required for carrying out the expressed intention of this Agreement.
Section 6.4. ISSUER AND COMPANY REPRESENTATIVES. Whenever
under the provisions of this Agreement the approval of the Issuer or the Company
is required or the Issuer or the Company is required to take some action at the
request of the other, such approval or such request shall be given for the
Issuer by an Issuer Representative and for the Company by a Company
Representative. The Trustee shall be authorized to act on any such approval or
request.
Section 6.5. FINANCIAL REPORTS. After the Conversion Date, so
long as any of the Bonds are Outstanding, the Company shall furnish or cause to
be furnished to the Trustee the following information:
(a) Within one hundred twenty (120) days after the close of
each fiscal year of the Company, a balance sheet of the Company as of the end of
such fiscal year and statements of income and retained earnings of the Company
for such fiscal year, each prepared in accordance with generally accepted
accounting principles consistently applied, in reasonable detail and certified
by certified public accountants of recognized standing.
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(b) Upon request, copies of all such regular or periodic
reports, which are available for public inspection which the Company may be
required to file with any federal or state department, bureau, commission, or
agency.
(c) Within one hundred twenty (120) days after the end of each
fiscal year, a certificate of a Company Representative stating whether the
Company is in compliance with all covenants and agreements made by the Company
in this Agreement.
Section 6.6. FINANCING STATEMENTS. The Company agrees to
execute and file or cause to be executed and filed any and all financing
statements or amendments thereof or continuation statements necessary to perfect
and continue the perfection of the security interests granted in the Indenture.
The Company shall pay all costs of filing such instruments.
Section 6.7. MAINTENANCE OF PROJECT. The Issuer and the
Company agree that the Company will (i) maintain, repair and operate the
Project; and (ii) pay, as the same respectively come due, all taxes and
governmental charges of any kind whatsoever that may at any time be lawfully
assessed or levied against the Company or the Issuer with respect to the Project
or any portion thereof or with respect to the original issuance of the Bonds,
including, without limiting the generality of the foregoing, any taxes levied
against the Company or the Issuer upon or with respect to the income or profits
of the Issuer from the Project or a charge on the Loan Installments prior to or
on a parity with the charge under the Indenture thereon and the pledge or
assignment thereof to be created and made in the Indenture, and including all ad
valorem taxes lawfully assessed upon the Project, all utility and other charges
incurred in the operation, maintenance, use, occupancy and upkeep of the
Project, all assessments and charges lawfully made by any governmental body
against the Company or the Issuer on the Loan Installments; provided, however,
that nothing in this subsection (ii) shall require the payment of any such tax
or charge or make provision for the payment thereof, so long as the validity
thereof shall be contested in good faith by the Company by appropriate legal or
administrative proceedings, and further provided that, with respect to special
assessments or other governmental charges that may lawfully be paid in
installments over a period of years, the Company shall be obligated to pay only
such installments as are required to be paid during the Agreement Term.
Section 6.8. UNDERTAKING TO PROVIDE ONGOING DISCLOSURE.
(a) This Section 6.8 constitutes the written undertaking for
the benefit of the holders of the Bonds required by Section (b)(5)(i) of
Securities and Exchange Commission Rule 15c2-12 under the Securities Exchange
Act of 1934, as amended (17 CFR Part 240, ss. 240. 15c2-12) (the "Rule"), and
shall apply when and if the Company exercises the Conversion Option. It is the
Company's
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express intention that this Section 6.8 be assigned pursuant to and in
accordance with the terms of the Indenture to the Trustee for the benefit of the
Bondholders and that the Trustee and each Bondholder be a beneficiary of this
Section 6.8 with the right to enforce this Section 6.8 directly against the
Company. Capitalized terms used in this Section 6.8 and not otherwise defined in
this Agreement shall have the meanings assigned such terms in subsection (d)
hereof.
(b) The Company, as an "obligated person" within the meaning
of the Rule, undertakes to provide the following information as provided in this
Section 6.8:
(1) Annual Financial Information;
(2) Financial Statements, if any; and
(3) Material Event Notices.
(c) (1) Subject to the terms of this Section 6.8, the Company
shall while any Bonds are Outstanding provide the Annual Financial
Information to the Trustee on or before April 1 of each year after the
election of the Conversion Option (the "Submission Date"), and the
Trustee shall provide to the Issuer and to each then existing NRMSIR
and the SID, if any, such Annual Financial Information on or before
April 30 of each year (the "Report Date") while any Bonds are
Outstanding or, if not received by the Trustee by the Submission Date,
then within fifteen (15) Business Days of its receipt by the Trustee.
The Company shall include with each submission of Annual Financial
Information to the Trustee and the Issuer a written representation
addressed to the Trustee and the Issuer to the effect that the Annual
Financial Information is the Annual Financial Information required by
this Section 6.8 and that it complies with the applicable requirements
of this Section 6.8. The Company may adjust the Submission Date and the
Report Date if the Company changes its fiscal year by providing written
notice of the change of fiscal year and the new Submission Date and
Report Date to the Trustee, the Issuer, each then existing NRMSIR and
the SID, if any; provided that the new Report Date shall be one hundred
twenty (120) days after the end of the new fiscal year and the new
Submission Date shall be thirty (30) days prior to the Report Date, and
provided further that the period between the final Report Date relating
to the former fiscal year and the initial Report Date relating to the
new fiscal year shall not exceed one year in duration. It shall be
sufficient if the Company provides to the Trustee and the Issuer and
the Trustee provides to each then existing NRMSIR and the SID, if any,
the Annual Financial Information by specific reference to documents
previously provided to each NRMSIR and the SID, if any, or filed with
the Securities and Exchange Commission and,
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if such a document is a final official statement within the meaning of
the Rule, available from the Municipal Securities Rulemaking Board.
(2) If not provided as part of the Annual Financial
Information, the Company shall provide Financial Statements to the
Trustee when and if available while Bonds are Outstanding and the
Trustee shall then promptly provide the Issuer, each then existing
NRMSIR and the SID, if any, with such Financial Statements.
(3) (i) If a Material Event occurs while any Bonds are
Outstanding, the Company shall provide a Material Event Notice to the
Trustee in a timely manner and the Trustee shall promptly provide to
the Issuer, the Municipal Securities Rulemaking Board and the SID, if
any, such Material Event Notice. Each Material Event Notice shall be so
captioned and shall prominently state the date, title and CUSIP numbers
of the Bonds.
(ii) The Trustee shall promptly advise the Company whenever,
in the course of performing its duties as Trustee under the Indenture,
the Trustee identifies an occurrence which, if material, would require
the Company to provide a Material Event Notice pursuant to clause
(3)(i); provided that the failure of the Trustee so to advise the
Company shall not constitute a breach by the Trustee of any of its
duties and responsibilities hereunder.
(4) The Trustee shall, without further direction or
instruction from the Company, provide in a timely manner to the
Municipal Securities Rulemaking Board and to the SID, if any, notice of
any failure while any Bonds are Outstanding by the Trustee to provide
to each then existing NRMSIR and the SID, if any, Annual Financial
Information on or before the Report Date (whether caused by failure of
the Company to provide such information to the Trustee by the
Submission Date or for any other reason). For the purposes of
determining whether information received from the Company is Annual
Financial Information, the Trustee shall be entitled conclusively to
rely on the Company's written representation made pursuant to clause
(c)(1) of this Section 6.8.
(5) If the Company provides to the Trustee information
relating to the Company or the Bonds, which information is not
designated as a Material Event Notice, and directs the Trustee to
provide such information to information repositories, the Trustee shall
provide such information in a timely manner to the Issuer, the
Municipal Securities Rulemaking Board and the SID, if any.
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(d) The following are the definitions of the capitalized terms
used in this Section and not otherwise defined in this Agreement.
(1) "Annual Financial Information" means the financial
information (which shall be based on financial statements prepared in
accordance with generally accepted accounting principles ("GAAP")) or
operating data with respect to the Company, provided at least annually,
of the type included in the official statement or other offering
document utilized in connection with the marketing or remarketing of
Bonds after the Conversion Date, which Annual Financial Information
shall include Financial Statements.
(2) "Financial Statements" means the Company's annual
financial statements, prepared in accordance with GAAP, and if audited,
accompanied by the report of the auditing certified public account.
(3) "Material Event" means any of the following events, if
material, with respect to the Bonds.
(i) Principal and interest payment delinquencies;
(ii) Non-payment related defaults;
(iii) Unscheduled draws on debt service reserves reflecting
financial difficulties;
(iv) Unscheduled draws on credit enhancements reflecting
financial difficulties;
(v) Substitution of credit or liquidity providers, or their
failure to perform;
(vi) Adverse tax opinions or events affecting the tax-exempt
status of the security;
(vii) Modifications to rights of security holders;
(viii) Bond calls;
(ix) Defeasances;
(x) Release, substitution, or sale of property securing
repayment of the securities; and
(xi) Rating changes.
(4) "Material Event Notice" means written or electronic notice
of a Material Event.
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(5) "NRMSIR" means a nationally recognized municipal
securities information repository, as recognized from time to time by
the Securities and Exchange Commission for the purposes referred to in
the Rule;
(6) "SID" means a state information depository as operated or
designated by the State as such for the purposes referred to in the
Rule.
(e) Unless otherwise required by law and subject to technical
and economic feasibility, the Company and the Trustee shall employ such methods
of information transmission as shall be requested or recommended by the
designated recipients of the Company's information.
(f) The continuing obligation hereunder of the Company to
provide Annual Financial Information and Material Event Notices and the
Trustee's obligations under this Section 6.8 shall terminate immediately once
the Bonds no longer are Outstanding. This Section 6.8, or any provision hereof,
shall be null and void in the event that the Company delivers to the Trustee and
the Issuer an opinion of nationally recognized bond counsel to the effect that
those portions of the Rule which require this Section 6.8, or any such
provisions, are invalid, have been repealed retroactively or otherwise do not
apply to the Bonds; provided that the Trustee shall have provided notice of such
delivery and the cancellation of this Section 6.8 to each then existing NRMSIR
and the SID, if any. This Section 6.8 may be amended without the consent of the
Bondholders, but only upon the delivery by the Company to the Trustee and the
Issuer of the proposed amendment and an opinion of nationally recognized bond
counsel to the effect that such amendment, and giving effect thereto, will not
adversely affect compliance with this Section by the Company and with the Rule;
provided that the Trustee shall have provided notice of such delivery and of the
amendment to each then existing NRMSIR and the SID, if any.
(g) Any failure by the Company to perform in accordance with
this Section 6.8 shall not constitute an "Event of Default" under Article VIII
hereof, and the rights and remedies provided by Article VIII upon the occurrence
of an "Event of Default" shall not apply to any such failure. Neither the Issuer
nor the Trustee shall have any power or duty to enforce this Section 6.8.
(h) The Company shall reimburse the Trustee for any expenses
incurred by the Trustee in complying with the requirements of this Section 6.8.
(i) The Company shall also provide such other information as
shall be reasonably requested by the Issuer and/or as shall be required by law
in connection with any marketing or remarketing of Bonds after the Conversion
Date.
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ARTICLE VII
ASSIGNMENT, SELLING, LEASING;
INDEMNIFICATION; REDEMPTION
---------------------------
Section 7.1. ASSIGNMENT, SELLING AND LEASING. This Agreement
may be assigned and the Project may be sold or leased, as a whole or in part, as
provided in Section 3.13 hereof or with the prior written consent of the Bank,
but without the necessity of obtaining the consent of either the Issuer or the
Trustee; PROVIDED, however, that no such assignment, sale or lease shall, in the
opinion of Bond Counsel, result in interest on any of the Bonds becoming
includable in gross income for federal income tax purposes, or shall otherwise
violate any provisions of the Act; PROVIDED FURTHER, however, that no such
assignment, sale or lease shall relieve the Company of any of its obligations
under this Agreement and the Company shall remain fully liable thereon.
Section 7.2. RELEASE AND INDEMNIFICATION COVENANTS.
(a) The Company shall and hereby agrees to indemnify and save
the Issuer and the Trustee harmless against and from all claims by or on behalf
of any person, firm, corporation or other legal entity arising from the conduct
or management of, or from any work or thing done on, the Project during the Term
of Agreement, including without limitation, (i) any condition of the Project,
(ii) any breach or default on the part of the Company in the performance of any
of its obligations under this Agreement, (iii) any act or negligence of the
Company or of any of its agents, contractors, servants, employees or licensees
or (iv) any act or negligence of any assignee or lessee of the Company, or of
any agents, contractors, servants, employees or licensees of any assignee or
lessee of the Company. The Company shall indemnify and save the Issuer and the
Trustee harmless from any such claim arising as aforesaid, or in connection with
any action or proceeding brought thereon, and upon notice from the Issuer or the
Trustee, the Company shall defend them or either of them in any such action or
proceeding.
(b) Notwithstanding the fact that it is the intention of the
parties hereto that the Issuer shall not incur any pecuniary liability by reason
of the terms of this Agreement or the undertakings required of the Issuer
hereunder, by reason of the issuance of the Bonds, by reason of the execution of
the Indenture or by reason of the performance of any act requested of the Issuer
by the Company, including all claims, liabilities or losses arising in
connection with the violation of any statutes or regulation pertaining to the
foregoing; nevertheless, if the Issuer should incur any such pecuniary
liability, then in such event the Company shall indemnify and hold the Issuer
harmless against all claims, demands or causes of action whatsoever, by or on
behalf of any
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person, firm or corporation or other legal entity arising out of the same or out
of any offering statement or lack of offering statement in connection with the
sale or resale of the Bonds and all costs and expenses incurred in connection
with any such claim or in connection with any action or proceeding brought
thereon, and upon notice from the Issuer, the Company shall defend the Issuer in
any such action or proceeding. All references to the Issuer in this Section 7.2
shall be deemed to include its directors, officers, employees, and agents.
Notwithstanding anything to the contrary contained herein, the
Company shall have no liability to indemnify the Issuer against claims or
damages resulting from the Issuer's own gross negligence or willful misconduct.
Section 7.3. ISSUER TO GRANT SECURITY INTEREST TO TRUSTEE. The
parties hereto agree that pursuant to the Indenture, the Issuer shall assign to
the Trustee, in order to secure payment of the Bonds, all of the Issuer's right,
title, and interest in and to this Agreement, except for the Issuer's rights
under Sections 4.2(b), 7.2 and 8.4 hereof.
Section 7.4. INDEMNIFICATION OF TRUSTEE. The Company shall and
hereby agrees to indemnify the Trustee for, and hold the Trustee harmless
against, any loss, liability or expense (including the costs and expenses of
defending against any claim of liability) incurred without negligence or willful
misconduct by the Trustee and arising out of or in connection with its acting as
Trustee under the Indenture.
ARTICLE VIII
DEFAULTS AND REMEDIES
---------------------
Section 8.1. DEFAULTS DEFINED. The following shall be
"Defaults" under this Agreement and the term "Default" shall mean, whenever it
is used in this Agreement, any one or more of the following events:
(a) Failure by the Company to pay any amount required to be
paid under subsection (a) or (d) of Section 4.2 hereof.
(b) Failure by the Company to observe and perform any
covenant, condition or agreement on its part to be observed or performed, other
than as referred to in Section 8.1(a), for a period of thirty (30) days after
written notice specifying such failure and requesting that it be remedied shall
have been given to the Company by the Issuer or the Trustee, unless the Issuer
and the Trustee shall agree in writing to an extension of such time prior to its
expiration; PROVIDED, however, if the failure stated in the notice cannot be
corrected within the applicable period, the Issuer
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and the Trustee will not unreasonably withhold their consent to an extension of
such time if corrective action is instituted by the Company within the
applicable period and diligently pursued until such failure is corrected.
(c) The dissolution or liquidation of the Company, except as
authorized by Section 2.2 hereof, or the voluntary initiation by the Company of
any proceeding under any federal or state law relating to bankruptcy,
insolvency, arrangement, reorganization, readjustment of debt or any other form
of debtor relief, or the initiation against the Company of any such proceeding
which shall remain undismissed for sixty (60) days, or failure by the Company to
promptly have discharged any execution, garnishment or attachment of such
consequence as would materially impair the ability of the Company to carry on
its operations at the Project, or assignment by the Company for the benefit of
creditors, or the entry by the Company into an agreement of composition with its
creditors or the failure generally by the Company to pay its debts as they
become due.
(d) The occurrence of a Default under the Indenture.
The provisions of subsection (b) of this Section are subject to the following
limitation: if by reason of FORCE MAJEURE the Company is unable in whole or in
part to carry out any of its agreements contained herein (other than its
obligations contained in Article IV hereof), the Company shall not be deemed in
Default during the continuance of such inability. The term "FORCE MAJEURE" as
used herein shall mean, without limitation, the following: acts of God; strikes
or other industrial disturbances; acts of public enemies; orders or restraints
of any kind of the government of the United States of America or of the State or
of any of their departments, agencies or officials, or of any civil or military
authority; insurrections; riots; landslides; earthquakes; fires; storms;
droughts; floods; explosions; breakage or accident to machinery, transmission
pipes or canals; and any other cause or event not reasonably within the control
of the Company. The Company agrees, however, to remedy with all reasonable
dispatch the cause or causes preventing the Company from carrying out its
agreement, provided that the settlement of strikes and other industrial
disturbances shall be entirely within the discretion of the Company and the
Company shall not be required to settle strikes, lockouts and other industrial
disturbances by acceding to the demands of the opposing party or parties when
such course is in the judgment of the Company unfavorable to the Company.
Section 8.2. REMEDIES ON DEFAULT. Whenever any Default
referred to in Section 8.1 hereof shall have happened and be continuing, the
Trustee, or the Issuer with the written consent of the Trustee, may take one or
any combination of the following remedial steps:
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(a) If the Trustee has declared the Bonds immediately due and
payable pursuant to Section 9.02 of the Indenture, by written notice to the
Company, declare an amount equal to all amounts then due and payable on the
Bonds, whether by acceleration of maturity (as provided in the Indenture) or
otherwise, to be immediately due and payable as liquidated damages under this
Agreement and not as a penalty, whereupon the same shall become immediately due
and payable;
(b) Have reasonable access to and inspect, examine and make
copies of the books and records and any and all accounts, data and income tax
and other tax returns of the Company during regular business hours of the
Company if reasonably necessary in the opinion of the Trustee; or
(c) Take whatever action at law or in equity may appear
necessary or desirable to collect the amounts then due and thereafter to become
due, or to enforce performance and observance of any obligation, agreement or
covenant of the Company under this Agreement.
Any amounts collected pursuant to action taken under this
Section shall be paid into the Bond Fund and applied in accordance with the
provisions of the Indenture.
Section 8.3. NO REMEDY EXCLUSIVE. Subject to Section 9.02 of
the Indenture, no remedy herein conferred upon or reserved to the Issuer or the
Trustee is intended to be exclusive of any other available remedy or remedies,
but each and every such remedy shall be cumulative and shall be in addition to
every other remedy given under this Agreement or now or hereafter existing at
law or in equity. No delay or omission to exercise any right or power accruing
upon any Default shall impair any such right or power or shall be construed to
be a waiver thereof, but any such right or power may be exercised from time to
time and as often as may be deemed expedient. In order to entitle the Issuer or
the Trustee to exercise any remedy reserved to it in this Article, it shall not
be necessary to give any notice, other than such notice as may be required in
this Article. Such rights and remedies as are given the Issuer hereunder shall
also extend to the Trustee, and the Trustee and the Owners of the Bonds, subject
to the provisions of the Indenture, shall be entitled to the benefit of all
covenants and agreements herein contained.
Section 8.4. AGREEMENT TO PAY ATTORNEYS' FEES AND EXPENSES. In
the event the Company should default under any of the provisions of this
Agreement and the Issuer should employ attorneys or incur other expenses for the
collection of payments required hereunder or the enforcement of performance or
observance of any obligation or agreement on the part of the Company herein
contained, the Company agrees that it will on demand therefor pay
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to the Issuer the reasonable fee of such attorneys and such other expenses so
incurred by the Issuer.
Section 8.5. NO ADDITIONAL WAIVER IMPLIED BY ONE WAIVER. In
the event any agreement contained in this Agreement should be breached by either
party and thereafter waived by the other party, such waiver shall be limited to
the particular breach so waived and shall not be deemed to waive any other
breach hereunder.
ARTICLE IX
MISCELLANEOUS
-------------
Section 9.1. TERM OF AGREEMENT. This Agreement shall remain in
full force and effect from the date hereof to and including December 1, 2017 or
until such time as all of the Bonds and the fees and expenses of the Issuer and
the Trustee and all amounts payable to the Bank under the Credit Agreement shall
have been fully paid or provision made for such payments, whichever is later;
PROVIDED, however, that this Agreement may be terminated prior to such date
pursuant to Article V of this Agreement, but in no event before all of the
obligations and duties of the Company hereunder have been fully performed,
including, but not limited to, the payment of all costs and fees mandated
hereunder.
Section 9.2. NOTICES. All notices, certificates or other
communications hereunder shall be sufficiently given and shall be deemed given
when delivered or mailed by registered mail, postage prepaid, addressed as
follows:
If to the Issuer: Highlands County Industrial
Development Authority
0000 X.X. 00 Xxxxx
Xxxxxxx, XX 00000
If to the Trustee: PNC Bank, N.A.
Corporate Trust Administration
Xxx Xxxxxx Xxxxx, 00xx Xxxxx
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
If to the Company: LESCO, Inc.
00000 Xxxx Xxxx
Xxxxx Xxxxx, Xxxx 00000-0000
Attention: Chief Financial Officer
If to the Bank: PNC Bank, N.A.
0000 Xxxx 0xx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxx 00000
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If to the issuer of a Its address designated in
Substitute Letter of Credit: writing to the Trustee
If to the Remarketing Agent: Its Principal Office
If to the Tender Agent: PNC Bank, N.A.
Xxx Xxxxxx Xxxxx, 00xx Xxxxx
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
If to Moody's: Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Department,
Structured Finance
Group
If to S&P: Standard & Poor's Corporation
00 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Finance
Department
A duplicate copy of each notice, certificate or other communication given
hereunder by the Issuer or the Company shall also be given to the Trustee and
the Bank. The Issuer, the Company, the Trustee, and the Bank may, by written
notice given hereunder, designate any further or different addresses to which
subsequent notices, certificates or other communications shall be sent.
Section 9.3. BINDING EFFECT. This Agreement shall inure to the
benefit of and shall be binding upon the Issuer, the Company, the Bank, the
Trustee, the Owners of Bonds and their respective successors and assigns,
subject, however, to the limitations contained in Section 2.3(b) hereof.
Section 9.4. SEVERABILITY. In the event any provision of this
Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any
other provision hereof.
Section 9.5. AMOUNTS REMAINING IN FUNDS. Subject to the
provisions of Section 6.11 of the Indenture, it is agreed by the parties hereto
that any amounts remaining in any account of the Bond Fund, the Construction
Fund, or any other fund (other than the Rebate Fund) created under the Indenture
upon expiration or earlier termination of this Agreement, as provided in 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 the
fees and expenses of the Trustee in accordance with the Indenture and the fees
and expenses of the Issuer in
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accordance with this Agreement, shall belong to and be paid to the Company by
the Trustee.
Section 9.6. AMENDMENTS, CHANGES AND MODIFICATIONS. Subsequent
to the issuance of Bonds and prior to their payment in full (or provision for
the payment thereof having been made in accordance with the provisions of the
Indenture), and except as otherwise herein expressly provided, this Agreement
may not be effectively amended, changed, modified, altered or terminated without
the written consent of the Trustee and, prior to the Letter of Credit
Termination Date and payment of all amounts payable to the Bank under the Credit
Agreement, the consent of the Bank, in accordance with the provisions of the
Indenture.
Section 9.7. EXECUTION IN COUNTERPARTS. This Agreement may be
simultaneously executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same instrument.
Section 9.8. APPLICABLE LAW. This Agreement shall be governed
by and construed in accordance with the laws of the State without reference to
its principles of conflicts of law.
Section 9.9. CAPTIONS. The captions and headings in this
Agreement are for convenience only and in no way define, limit or describe the
scope or intent of any provisions or Sections of this Agreement.
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IN WITNESS WHEREOF, the Issuer and the Company have caused
this Agreement to be executed in their respective corporate names and their
respective corporate seals to be hereunto affixed and attested by their duly
authorized officers, all as of the date first above written.
(SEAL) HIGHLANDS COUNTY INDUSTRIAL
DEVELOPMENT AUTHORITY
Attest: By: /s/ Xxx Xxxxxx
-----------------------------------
Title: Chairman
/s/ C.H. Hands
---------------------------
Title: Secretary
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Title: Treasurer
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EXHIBIT "A"
PROJECT FACILITIES
The construction and equipping of a fertilizer blending, formulating
and bagging facility which facility will be located within the boundaries of the
Sebring Regional Airport and Industrial Park, to the east and south of Sebring
Custom Tanning which is located at 000 Xxxxxxx Xxxx Xxxxx.
A-1
40
EXHIBIT "B"
REQUISITION NO. ___
HIGHLANDS COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY
INDUSTRIAL DEVELOPMENT REVENUE BONDS SERIES 1997
(Lesco, Inc. Project),
REQUISITION FOR PAYMENT
-------------------------------------------------
Lesco, Inc., referred to herein and in the Loan Agreement (the
"Agreement") dated as of November 1, 1997, between the Highlands County
Industrial Development Authority (the "Issuer") and Lesco, Inc., as the Company
(the "Company"), does hereby make application to PNC Bank, N.A., as trustee (the
"Trustee") under the Indenture of Trust (the "Indenture") between the Issuer and
the Trustee, dated as of November 1, 1997, for reimbursement or payment of
advances, payments and obligations made or incurred by the Company in connection
with the acquisition, construction and equipping of the Project (as defined in
the Agreement) and the issuance, delivery and sale of the $7,500,000 Highlands
County Industrial Development Authority Industrial Development Revenue Bonds
Series 1997 (Lesco, Inc. Project), as provided for or contemplated in the
Agreement and the Indenture.
All capitalized terms used herein and not otherwise defined
shall have the meanings ascribed to them in the Agreement and the Indenture.
The Company does hereby request disbursement of the amounts as
set forth on Exhibit "A" attached to this certificate, for reimbursement to the
Company for payments made to, or incurred for, the contractors or payees listed
on Exhibit "A" or for direct payment to the payees listed on Exhibit "A", all as
provided on Exhibit "A".
The undersigned further certifies that:
(i) the obligations described in Exhibit "A" (which
includes a description of the purpose and circumstances of such
obligations in reasonable detail and the name and address of the
persons to whom such obligations are owed and which is accompanied by
bills, invoices, or statements of account for, or other written
evidence of, such obligations) in the stated amounts have been incurred
in connection with the issuance and sale of the Bonds or the financing,
planning, design, acquisition, construction, equipping and/or
installation of the Project;
(ii) such obligations are permitted Costs of the Project,
are proper charges against the account in the Construction Fund noted
on Exhibit "A" hereto and have
B-1
41
not been the basis for any previous disbursement from any account in
the Construction Fund;
(iii) no item in Exhibit "A" represents any portion of an
obligation which the Company is, as of the date hereof, entitled to
retain under any retained percentage agreement;
(iv) insofar as any obligation described in Exhibit "A" was
incurred for labor, services, materials, supplies or equipment (i) such
labor and services were actually performed in a satisfactory manner in
connection with the acquisition, construction and equipping of the
Project and (ii) such materials, supplies and equipment were actually
used in connection with the acquisition, construction and equipping of
the Project or were delivered to the Project Site (and remain at the
Project Site) for that purpose;
(v) all sums previously advanced by the Trustee have been
or will be used solely for purposes permitted by the Indenture and the
specific items which are the subject of this requisition will be so
used;
(vi) there has not been recorded or filed with or served
upon the Company, notice of any lien, right to lien or attachment upon
or claim affecting the right to receive payment of, any moneys payable
to any of the persons or firms named in this requisition, which has not
been released or will not be released simultaneously with the payment
of such obligation;
(vii) each item in Exhibit "A" is or was appropriate in
connection with the financing, acquisition, construction and equipping
of the Project, as noted in Exhibit "A";
(viii) the use of the disbursements requested hereunder will
not result in the covenants made by the Company in Section 3.9 of the
Agreement being violated. Accordingly, one of the following statements
applies to the requested disbursement:
(a) If all disbursements from the Construction Fund
to be used to pay Issuance Costs have not yet been made, the
disbursement requested hereunder will be used only to pay either
Qualified Project Costs or Issuance Costs.
(b) If all Issuance Costs to be paid with proceeds of
the Bonds have previously been requisitioned but the aggregate
Qualified Project Costs paid with previous disbursements and to be paid
with the disbursement requested hereunder do not equal or exceed
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42
Substantially All of the Costs of the Project paid (or to be paid) with
the requested and all previous disbursements, the disbursement
requested hereunder will be used only for Qualified Project Costs.
(c) If all Issuance Costs to be paid with proceeds of
the Bonds have previously been requisitioned and the aggregate
Qualified Project Costs paid with previous disbursements equals or
exceeds Substantially All of the Costs of the Project paid with those
previous disbursements, the disbursement requested hereunder, when
added to all disbursements under previous requisitions, will not result
in less than Substantially All of the total of such disbursements
having been used to pay Qualified Project Costs;
(ix) all disbursements related to Issuance Costs of the
Bonds, requested hereunder, when added to all disbursements for such
Issuance Costs under previous requisitions, will not result in more
than two percent (2%) of the proceeds of the Bonds having been drawn
from the Construction Fund or otherwise used to pay such Issuance
Costs;
(x) no Event of Default under the Indenture has occurred
and is continuing and there exists no event or condition which, with
the giving of notice or the passage of time would constitute an Event
of Default under the Indenture; and
(xi) after payment of such disbursement, sufficient amounts
will remain in the Construction Fund, taking into account investment
earnings thereon, to pay all remaining unpaid costs of the Project.
Dated as of ___________, 199__.
LESCO, Inc.
By:_________________________________
Title:______________________________
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