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MF85-530/VRPBC EXHIBIT 10.9
FILE NO. 772,349-157
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REIMBURSEMENT AGREEMENT
dated, for reference purposes, as of SEPTEMBER 1, 1985
between
SECURITY PACIFIC NATIONAL BANK,
a National Banking Association
(the "BANK")
and
CALAVO GROWERS OF CALIFORNIA,
a California Corporation
(the "COMPANY")
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This Agreement is executed in connection with the following Bonds:
Aggregate Principal Amount: $4,200,000
Issuer: RIVERSIDE COUNTY INDUSTRIAL
DEVELOPMENT AUTHORITY
Name of Bonds: VARIABLE RATE DEMAND
INDUSTRIAL DEVELOPMENT REVENUE BONDS
(CALAVO GROWERS OF CALIFORNIA PROJECT)
TRUSTEE: FIRST INTERSTATE BANK OF CALIFORNIA,
A CALIFORNIA BANKING CORPORATION
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The Bonds are to be backed by an irrevocable direct draw letter of credit to be
issued by the Bank for the account of the Company pursuant to this Agreement:
Letter of Credit No.: 100-0092 Dated: September 5, 1985
Initial Stated Amount of Letter of Credit: $4,267,661
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS AND INFORMATIONAL PROVISIONS 1
1.1 Certain Defined Terms 1
1.2 Informational Provisions 4
1.3 Additional Defined Terms 6
1.4 Accounting Terms 14
1.5 Other Definitional Provisions 14
SECTION 2. APPLICATION, REIMBURSEMENT AND OTHER PAYMENTS 15
2.1 Application for Letter of Credit 15
2.2 Reinstatement of Letter of Credit 15
2.3 Reimbursement for Draws Upon Letter of Credit 15
2.4 Fees 16
2.5 Allocation of Increased Costs 16
2.6 Bank Expenses 17
2.7 Manner and Time of Payment 17
2.8 Application of Funds 17
2.9 Computation of Interest 17
SECTION 3. CONDITIONS PRECEDENT TO THE ISSUANCE OF THE LETTER OF CREDIT 18
3.1 Execution and Delivery of Closing Documents 18
3.2 Representations Correct; No Default 20
3.3 Other Requirements 20
SECTION 4. COMPANY'S OBLIGATIONS UNCONDITIONAL 21
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY 21
5.1 Organization, Powers and Good Standing 21
5.2 Authorization of Company Documents 22
5.3 Litigation; Adverse Facts 23
5.4 Financial Condition 23
5.5 Title to Properties; Liens 24
5.6 Disclosure 24
5.7 Payment of Taxes 24
5.8 Trademarks, Copyrights and Patents 24
5.9 Securities Activities 24
5.10 Government Regulations 24
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5.11 Title to Property 24
5.12 Rights to Project Agreements, Permits and Licenses 25
5.13 Legal Requirements 25
5.14 Utilities, etc. 25
5.15 Commencement of Work 25
5.16 Approved Budget 25
5.17 Other Related Documents 25
SECTION 6. AFFIRMATIVE COVENANTS OF THE COMPANY 25
6.1 Maintenance of Existence, Etc. 26
6.2 Maintenance of Insurance 26
6.3 Payment of Taxes, Etc. 27
6.4 Access and Reporting 28
6.5 Additional Notices 30
6.6 Maintenance of Properties 30
6.7 Further Assurances 30
6.8 Protection of Liens on Property 30
6.9 Compliance with Legal Requirements 30
6.10 Payment of Indebtedness 30
6.11 Appendices 31
6.12 Use of Disbursements 31
6.13 Project Agreements, Permits and Licenses 31
6.14 Other Company Documents 31
6.15 Financial Covenants 31
6.16 Removal of Condition Subsequent 31
SECTION 7. NEGATIVE COVENANTS OF THE COMPANY 32
7.1 Type of Business 32
7.2 Other Indebtedness 32
7.3 Liens and Encumbrances 32
7.4 Loans and Investments 32
7.5 Limitation on Contingent Liabilities; 32
7.6 Sale of Business; "Merger or Consolidation 33
7.7 Regulations G, T and U 32
7.8 Amendment of Company Documents 33
7.9 Disposition of Project 33
7.10 Amendment of Bylaws 34
SECTION 8. EVENTS OF DEFAULT 34
8.1 Required Deposits 34
8.2 Other Payments 34
8.3 Misrepresentation 34
8.4 Non-Satisfaction of Conditions to Disbursement 34
ii.
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8.5 Injunction 34
8.6 Security Documents 35
8.7 Indenture 35
8.8 Loan Agreement 35
8.9 Invalidity 35
8.10 Other Indebtedness 35
8.11 Change in Financial Condition 35
8.12 Involuntary Proceedings 35
8.13 Voluntary Proceedings 35
8.14 Dissolution 36
8.15 Judgments 36
8.16 Unauthorized Deviations, Defects, or Encroachments 36
8.17 Work Stoppage 36
8.13 Expiration of Permits 36
8.19 ERISA Defaults 36
8.20 Insolvency of General Contractor 36
8.21 Insurance; Protection of Liens; Prohibited Transfers 37
8.22 Breach of Other Covenants 37
SECTION 9. REMEDIES 37
9.1 Notice to Trustee 37
9.2 Completion of Project; Power of Attorney 38
9.3 Accounts Receivable 38
9.4 Set Off; Waiver of Set Off 38
9.5 Defaults Under Other Documents 39
9.6 Remedies Cumulative 39
SECTION 10. OTHER ACTIONS BY BANK 39
10.1 Right to Advance or Post Funds 39
10.2 Cure by Disbursement 40
10.3 Conversion at Election of Bank 40
SECTION 11. NOTICES 40
SECTION 12. INDEMNIFICATION 40
SECTION 13. LIABILITY OF THE BANK 41
SECTION 14. SUCCESSORS AND ASSIGNS 42
iii.
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SECTION 15. NO FURTHER COLLATERAL; AGREEMENT TO SHARE EQUALLY WITH TRUSTEE 42
SECTION 16. MISCELLANEOUS PROVISIONS 43
16.1 Permitted Contests 43
16.2 Governing Law 43
16.3 Survival of Warranties 43
16.4 Severability 43
16.5 Counterparts 43
16.6 Time of Essence 43
16.7 No Further Credits 44
16.8 Headings 44
16.9 Independence of Covenants 44
16.10 Waivers 44
16.11 Substitution of Letter of Credit 44
APPENDIX I - CONSTRUCTION COVENANTS AND DISBURSEMENT PROCEDURES
- Schedule A: Payment Request
APPENDIX II - ERISA MATTERS
EXHIBITS
A - FORM OF LETTER OF CREDIT (Section 1.3)
- Annex A (Periodic Interest Demand With Reinstatement Request)
- Annex B (Principal and Interest Demand With Reinstatement Request)
- Annex C (Principal and Interest Demand Without Reinstatement
Request)
- Annex D (Final Drawing)
- Annex E (Transfer Demand)
- Annex F (Surrender Certificate)
B - LETTER OF CREDIT APPLICATION (Section 1.3, Section 3.1)
C - AUTHORIZED REPRESENTATIVE CERTIFICATE (Section 1.3, Section 3.1)
D - LEGAL DESCRIPTION OF THE PROPERTY (Section 1.3)
E - APPROVALS, AUTHORIZATIONS AND CONSENTS (Section 3.1, Section 5.2)
F - FORM OF OPINION OF COUNSEL TO THE COMPANY (Section 3.1)
G - REQUIREMENTS RE COMPANY LOAN DOCUMENTS (Section 3.3)
H - ADDITIONAL ITEMS TO BE DELIVERED TO THE BANK (Section 3.3, Appendix I)
I - APPROVED BUDGET
J - SCHEDULE OF PROJECT PLANS
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REIMBURSEMENT AGREEMENT
THIS REIMBURSEMENT AGREEMENT, dated as of September 1, 1985, is
by and between CALAVO GROWERS OF CALIFORNIA, A CALIFORNIA CORPORATION (the
"COMPANY") and SECURITY PACIFIC NATIONAL BANK, A NATIONAL BANKING ASSOCIATION
(the "BANK").
WHEREAS, pursuant to the Indenture of Trust of even date herewith
(the "INDENTURE"), by and between the Issuer and the Trustee, and the Loan
Agreement of even date herewith between the Issuer and the Company, the Issuer
has agreed to issue the Bonds (as hereinafter defined), and to loan to the
Company the proceeds of the sale of the Bonds to finance the development of a
packing, storage and distribution facility; and
WHEREAS, as a condition precedent to the issuance of the Bonds
and the making of such loan to the Company, the Issuer has required that the
Company obtain and deliver to the Trustee, for the benefit of the holders of the
Bonds, an irrevocable letter of credit to secure payment of the Bonds; and
WHEREAS, the Company has requested that the Bank issue its
irrevocable direct draw letter of credit to the Trustee substantially in the
form attached hereto as Exhibit A, and the Bank has agreed to issue such letter
of credit upon and subject to the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing recitals and
the covenants contained herein, and in order to induce the Bank to issue its
letter of credit, the parties agree as follows:
SECTION 1. DEFINITIONS AND INFORMATIONAL PROVISIONS
1.1 Certain Defined Terms. As used in this Agreement, the
following terms shall have the indicated meanings:
"Capital Budget" means all sources and use of capital funds, as
determined in accordance with GAAP, as approved by the Company's Board
of Directors.
"Capital Expenditures" means all uses of capital funds, as
determined in accordance with GAAP.
"Capital Retains" means assessments or deductions from proceeds
payable to members of the Company, for purposes of having members
furnish capital funds, as determined in accordance with GAAP, to the
Company, as approved by the Company's Board of Directors.
"Change Order Aggregate Approval Amount" means $ 100,000.
"Change Order Individual Approval Amount" means $25,000.
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"Company's Initial Equity" means the appraised value of the
Property.
"Contractor" means the Company and H.M.H. Construction, the
general contractors for the Project, and any successors to either
(subject to the Bank's approval of any such successors).
"County" means Riverside, California, the county in which the
Property is located.
"Disbursement Account" means Account No. 001-036695 at the Bank,
established pursuant to Paragraph A.2 of Appendix I (Construction
Covenants and Disbursement Procedures).
"Improvements" means the improvements to be constructed on the
Property, a portion of the costs of which shall be paid for with the
proceeds of the Company Loan, and which shall consist of a packing,
storage and distribution facility, together with all parking facilities
and other on-site and off-site improvements relating thereto, including
curbs, landscaping and underground utilities, all in accordance with the
Project Plans.
"Initial Stated Amount" means the amount available to be drawn
under the Letter of Credit as of the Date of Issuance, as set forth
therein and on the cover page hereof. Such amount shall be the sum of
the Aggregate Principal Amount of the Bonds plus 49 days' interest
computed at the Maximum Bond Interest Rate.
"Interest Expense" means the Company's operating expense on all
of its Indebtedness.
"Letter of Credit Administration Fee" means an annual
administration fee with respect to the Letter of Credit equal to 1% of
the Stated Amount of the Letter of Credit as of the date such
administration fee is due, payable in accordance with Subsection 2.4.
"Letter of Credit Negotiation Fee" means the sum of $100.00,
which sum is to be paid to the Bank in accordance with Subsection 2.3
upon the date of each drawing upon the Letter of Credit.
"Letter of Credit Origination Fee" means an origination fee with
respect to the Letter of Credit equal to 3/8ths of 1% of the Initial
Stated Amount, payable in accordance with Subsection 2.4.
"Maximum Bond Interest Rate" means the "Maximum Interest Rate" as
that term is defined in the Indenture, which rate shall be 12% per
annum, computed on the basis of actual days elapsed over a 365-day or
366-day year, as the case may be.
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"Net Worth" means the excess of all of the Company's assets over
all of its liabilities, as determined in accordance with GAAP
consistently applied.
"Operating Budget" means annual period expenses of the Company,
as approved by the Company's Board of Directors.
"Operating Retains" means assessments or deductions from proceeds
payable to member's of the Company, to pay for expenses of the Company
for handling members' products, as approved by the Company's Board of
Directors.
"Permitted Contingent Liabilities" means indebtedness or other
obligations which the Company guarantees or is directly or indirectly
responsible for (a) by endorsement, in the ordinary course of
collection, of negotiable instruments; or (b) in the ordinary course of
business, up to a maximum of $100,000.
"Permitted Indebtedness" means (a) unsecured loans in an
aggregate amount not exceeding $6,000,000; (b) secured loans in any
amount, subject to Subsection 7.3; (c) the Company Loan; and (d)
Indebtedness to the Bank.
"Placement Agent" shall mean Security Pacific Capital Markets
Group (Security Pacific National Bank) and such other parties, if any,
as are named as "Placement Agent" in the Placement Agent Agreement.
"Placement Agent Agreement" means the Placement Agent Agreement
dated as of September 1, 1985 among the Issuer, the Company, and the
Placement Agent.
"Project Architect" means Kulwiec Group.
"Reimbursement Account" means Account No. 100-099488 at the Bank,
a custodial account established for the purpose of making the deposits
required by Subsection 2.3(b).
"Remarketing Agent" means Security Pacific Capital Markets Group
(Security Pacific National Bank), or its successor, acting pursuant to
Section 1304 of the Indenture and the Remarketing Agreement.
"Remarketing Period Interest Rate" means a fluctuating interest
rate equal at all times to one percent (1%) per annum in excess of the
Prime Rate. (See Subsection 2.3(a).)
"Required Commencement Date" means September 1, 1985.
"Required Completion Date" means June 30, 1986, as such date may
be extended in accordance with Paragraph B.1 of Appendix I (Construction
Covenants and Disbursement Procedures).
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"Title Company" means Ticor Title Insurance Company of
California, a California corporation.
"Working Capital" means the excess of the Company's current
assets over its current liabilities, as determined in accordance with
GAAP consistently applied.
1.2 Informational Provisions.
(a) Address of the Company's Chief Executive Office and
Principal Place of Business:
Calavo Growers of California
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(b) Company's U.S. employer identification number:
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(c) Address for notices to the Company:
Calavo Growers of California
P. O. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Attention: Corporate Secretary
(d) Character of the Company's business:
Packing, processing, and marketing California avocados
and other agricultural products
(e) Address for notices to the Bank:
Security Pacific National Bank
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Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (H32-4)
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(f) Location of Trustee's principal corporate office:
First Interstate Bank of California
Corporate Trust Department
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(g) Bank Payment Address:
Security Pacific National Bank
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Attention: Corporate Note Department
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1.3 Additional Defined Terms. As used in this Agreement, the
following terms shall have the indicated meanings:
"Adjustable Interest Rate" means the variable interest rate
applicable to the Bonds until the Conversion Date, as determined from
time to time in accordance with Section 203 of the Indenture.
"Aggregate Principal Amount" means the aggregate principal amount
of the Bonds to be issued by the Issuer, as set forth on the cover page
hereof.
"Agreed Rate" means a fluctuating interest rate equal at all
times to 3.0% per annum in excess of the Prime Rate.
"Agreement" or "Reimbursement Agreement" means this Reimbursement
Agreement, including the cover page hereof and all of the exhibits,
appendices and schedules attached hereto, all of which are incorporated
herein by this reference and made a part hereof.
"Approved Budget" means the budget for the Project approved by
the Bank, as changed from time to time in accordance with this
Agreement. As of the date hereof, the Approved Budget is as set forth in
Exhibit I.
"Authorized Representative of the Company" means the person or
persons designated as such, with the Bank's consent, by written
certificate furnished to the Bank, substantially in the form of Exhibit
C or otherwise in form acceptable to the Bank, containing the specimen
signatures of such person or persons, and signed on behalf of the
Company by an authorized officer (if the Company is a corporation) or by
a General Partner of the Company (if the Company is a partnership).
"Bank" - See Recitals.
"Bank Security Documents" means, collectively, the Second Deed of
Trust, the Second Security Agreement, the Second Financing Statement,
and the Second Fixture Filing.
"Bank Title Policy" - See definition of "Title Policies."
"Bond Counsel" means an attorney or firm of attorneys acceptable
to the Bank and of nationally recognized standing in matters pertaining
to the validity and enforceability of, and the tax-exempt nature of
interest on, obligations issued by states and their political
subdivisions.
"Bond Interest Payment Date" means each "Interest Payment Date"
with respect to the Bonds, as that term is defined in the Indenture.
"Bondholders" means the owners of record of the Bonds as shown in
the Bond registration books maintained by the Trustee.
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"Bonds" means those certain bonds described on the cover page
hereof, to be issued by the Issuer in the Aggregate Principal Amount,
and any bonds duly issued pursuant to the Indenture in exchange therefor
or replacement thereof, including any temporary bonds issued pursuant to
the Indenture.
"Bond Trustee Title Policy" -- See definition of "Title
Policies."
"Business Day" means any day other than a Saturday, Sunday, legal
holiday or day on which banking institutions in the city in which the
Bank's principal office is located or in the city in which the principal
corporate trust office of the Letter of Credit Beneficiary is located,
are authorized or obligated by law or executive order to close.
"Capital Lease" means any lease of any property (whether real,
personal or mixed) required by GAAP to be accounted for as a capital
lease on the balance sheet of the lessee.
"Certification of Non-Foreign Status" means an affidavit, signed
under penalty of perjury by an individual General Partner of the
Company, by a responsible officer of a corporate General Partner of the
Company (or of the Company, if the Company is a corporation), or by the
trustee, executor, or equivalent fiduciary of any General Partner of the
Company that is a trust or estate, stating (a) that the Company is not a
"foreign corporation," "foreign partnership," "foreign trust," or
"foreign estate," as those terms are defined in the Internal Revenue
Code and the regulations promulgated thereunder, (b) the Company's U.S.
employer identification number, and (c) the address of the Company's
principal place of business. Such affidavit shall be consistent with the
requirements of the regulations promulgated under Section 1445 of the
Internal Revenue Code, and shall otherwise be in form and substance
acceptable to the Bank.
"Change Order" means any change in the Project Plans, the
Construction Schedule, the Approved Budget, the General Contract, or any
related subcontracts.
"Company" -- See Recitals.
"Company Bonds" means all Bonds at any time purchased with the
proceeds of a draw on the Letter of Credit upon tender of each such Bond
to the Trustee by the Bondholder pursuant to Section 1301 or Section
1302 of the Indenture and registered in the name of the Company.
"Company Documents" means, collectively, this Agreement, the Loan
Agreement, the Issuer Security Documents, the Bank Security Document --
the Placement Agent Agreement, the Remarketing Agreement, the Letter of
Credit Application, and any other agreements, instruments, certificates,
statements, or other documents executed by the Company in connection
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therewith, including all other documents described in Section 3 that
are executed by the Company.
"Company Loan" means the loan of Bond proceeds made by the Issuer
to the Company pursuant to the Loan Agreement.
"Construction Fund" means the special trust fund of that name
established and maintained by the Trustee pursuant to Article III of the
Indenture.
"Construction Schedule" means the construction schedule for the
Project showing the estimated periods of commencement and completion for
all aspects of the Project, on a trade-by-trade basis, as approved by
the Bank and as changed from time to time in accordance with this
Agreement.
"Contractual Obligation" of a person means any debt or equity
security issued by that person, and any indenture, mortgage, deed of
trust, contract, undertaking, instrument or agreement (written or oral)
to which such person is a party or by which it is bound, or to which it
or any of its assets is subject.
"Conversion" means the establishment of a fixed interest rate for
the Bonds pursuant to Section 204 of the Indenture.
"Conversion Date" means the Bond Interest Payment Date after
which the Bonds begin to bear interest at the Fixed Interest Rate
pursuant to Section 204 of the Indenture.
"Date of Issuance" means the date as of which the Letter of
Credit is issued and delivered to the Letter of Credit Beneficiary.
"Disbursement" means any disbursement by the Trustee or the Bank,
pursuant to the Indenture, the Loan Agreement or this Agreement, for the
payment or reimbursement of Project Costs, as described in Appendix I
(Construction Covenants and Disbursement Procedures).
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Event of Default" See Section 8.
"Expiration Date" means the date the Bank's obligations under the
Letter of Credit expire as set forth therein.
"Final Project Completion Date" has the meaning given to such
term in Paragraph B.1 of Appendix I (Construction Covenants and
Disbursement Procedures).
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"First Deed of Trust" means the First Deed of Trust and
Assignment of Rents (Construction Trust Deed) with respect to the
Project, of even date herewith, executed by the Company, as trustor, to
the Title Company as trustee, for the benefit of the Issuer, as
beneficiary.
"First Financing Statement" means a UCC-1 financing statement
executed by the Company, as debtor pursuant to the First Security
Agreement, and naming the Issuer as the secured party and the Trustee as
the assignee of the secured party.
"First Fixture Filing" means a fixture filing executed by the
Company, as debtor pursuant to the First Security Agreement, and naming
the Issuer as the secured party and the Trustee as the assignee of the
secured party.
"First Security Agreement" means the First Security Agreement
with respect to the Project, of even date herewith, executed by the
Company, as debtor, in favor of the Issuer, as secured party.
"Fixed Interest Rate" means the fixed interest rate applicable to
the Bonds after the Conversion Date, as established pursuant to Section
204 of the Indenture.
"Funding Requisition" shall mean a requisition form, in the form
attached to the Loan Agreement as Exhibit B, requesting disbursement of
monies by the Trustee from the Construction Fund.
"General Contract" shall mean a guaranteed maximum cost general
construction contract between the Company and H.M.H. Construction, as
the Contractor.
"General Partner" of a partnership means each person that is now,
or at any time hereafter becomes, a general partner of such partnership,
as well as each General Partner of each such general partner (if such
general partner is itself a partnership). For example, if (a) A is a
general partner of B, (b) B is a general partner of C, and (c) C is a
general partner of D, then A, B, and C are each "General Partners" of D
for the purposes of this Agreement.
"GAAP" means generally accepted accounting principles.
"Indebtedness" of a person means (a) all indebtedness for
borrowed money, (b) that portion of obligations with respect to capital
leases which is capitalized under GAAP, (c) notes payable and drafts
accepted representing extensions of credit, whether or not representing
obligations for borrowed money, (d) any obligation for the purchase of
property or services that is (i) deferred for more than six months, or
(ii) evidenced by a note or similar instrument, and (e) all recourse and
all non-recourse indebtedness
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secured by any Lien on any property or asset of such person (whether or
not assumed by such person).
"Indenture" means the Indenture of Trust of even date herewith
between the Issuer and the Trustee pursuant to which the Bonds are to be
issued, and any indentures supplemental thereto.
"Intercreditor Agreement" means the Intercreditor Agreement of
even date herewith, among the Bank, the Trustee and the Issuer.
"Internal Revenue Code" means the Internal Revenue Code of 1954,
as amended.
"Issuer" means the entity identified as the Issuer on the cover
page hereof, acting as issuer of the Bonds.
"Issuer Security Documents" means the First Deed of Trust, the
First Security Agreement, the First Financing Statement, and the First
Fixture Filing.
"L/C Documents" means this Agreement, the Bank Security Documents
and any and all other agreements, instruments, certificates, or other
documents now or hereafter given by the Company to the Bank pursuant
thereto or in connection therewith, or given to evidence, guaranty, or
secure any of the Company's obligations under the foregoing documents.
"Legal Requirements" applicable to any property or person means
(a) all decisions, statutes, ordinances, rulings, directions, rules,
regulations, orders, writs, decrees, injunctions, permits, certificates,
or other requirements of any court or other governmental or public
entity in any way applicable to or affecting such property or such
person or its business, operations, or assets, (b) all such person's
bylaws and articles of incorporation or partnership, limited
partnership, joint venture, trust or other form of business association
agreement, and (c) all other Contractual Obligations of any nature
applicable to or affecting such property or such person. As to the
Property or the Project, such term includes, without limitation, all
legal requirements relating to acquisition, development, ownership, use,
occupancy, possession, operation, maintenance, alteration and repair of
the Property or the Project, as well as all related permits, easements,
covenants, restrictions and similar items.
"Letter of Credit" means the letter of credit to be issued by the
Bank to the Trustee as Letter of Credit Beneficiary on the Date of
Issuance substantially in the form of Exhibit A, or such letter of
credit as may at any time hereafter be issued by the Bank in
substitution or replacement thereof.
"Letter of Credit Application" means the Letter of Credit
Application and Agreement attached hereto as Exhibit B.
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"Letter of Credit Beneficiary" means the Trustee or such other
person as shall be entitled to draw upon the Letter of Credit pursuant
to the terms thereof.
"Lien" means any lien, mortgage, pledge, security interest,
charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and
any agreement to give any lien or security interest).
"Loan Agreement" means the Loan Agreement of even date herewith
among the Issuer and the Company, pursuant to which the Company Loan is
made.
"Memorandum of Assignment" means the Memorandum of Assignment of
First Deed of Trust and Assignment of Rents of even date herewith,
executed by the Issuer, as assignor, to the Trustee, as assignee.
"Owner's Title Policy" - See definition of "Title Policies."
"Participant" means any financial institution or other person now
or hereafter directly or indirectly participating in the rights and
obligations of the Bank under this Agreement and the Letter of Credit.
"Paying Agent" means the Trustee and any other bank or trust
company designated as a Paying Agent by or in accordance with the
Indenture.
"Payment Obligations" means all obligations of the Company to the
Bank under Section 2.
"Payment Request Documents" - See Subparagraph A.4(c) of Appendix
I (Construction Covenants and Disbursement Procedures).
"Potential Default" means any condition or event which, with the
lapse of time or the giving of notice, or both, would constitute an
Event of Default.
"Prime Rate" means the floating commercial loan rate of interest
announced from time to time by the Bank at its principal office as its
"prime rate", with changes in such Prime Rate effective as of 12:01 a.m.
on the effective date announced by the Bank for each change in its
"prime rate."
"Project" means the Property and the Improvements.
"Project Agreements, Permits and Licenses" means the General
Contract; all subcontracts; the Project Architect's Agreement and any
and all contracts with any soils, electrical, mechanical and structural
engineers and any other persons providing architectural, design, or
engineering
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services for the Project; any property management agreements relating to
the Project; and all other rights, licenses, permits, franchises,
authorizations, approvals and agreements relating to acquisition,
construction, use, occupancy or operation of the Project, including all
grading, demolition, building and other governmental permits and use
entitlements.
"Project Architect's Agreement" means the agreement between the
Company and the Project Architect.
"Project Costs" means the costs of acquiring, constructing,
improving and equipping the Project.
"Project Plans" means the final plans and specifications for the
Project, with evidence of appropriate governmental approvals shown
thereon, as approved by the Bank in its sole discretion and as changed
from time to time in accordance with this Agreement. As of the date of
execution hereof, the Project Plans are those plans and specifications
described in Exhibit K.
"Property" means that certain real property on which the
Improvements are to be constructed, as more particularly described in
Exhibit D.
"Related Documents" means, collectively, the Company Documents,
the Bonds, the Indenture, the Intercreditor Agreement, the Letter of
Credit, and any other agreement, instrument or other document relating
to or executed in connection with the transactions contemplated by this
Agreement, including all of the documents described in Section 3.
"Remarketing Agreement" means the Remarketing Agent Agreement of
even date herewith, among the Remarketing Agent, the Company and the
Issuer.
"Second Deed of Trust" means the Second Deed of Trust and
Assignment of Rents (Construction Trust Deed) with respect to the
Project, of even date herewith, executed by the Company, as trustor, to
the Title Company, as trustee, for the benefit of the Bank, as
beneficiary.
"Second Financing Statement" shall mean the UCC-1 financing
statement executed by the Company, as debtor pursuant to the Second
Security Agreement, and naming the Bank as the secured party.
"Second Fixture Filing" shall mean the fixture filing executed by
the Company, as debtor pursuant to the Second Security Agreement, and
naming the Bank as the secured party.
"Second Security Agreement" means the Second Security Agreement
with respect to the Project, of even date herewith, executed by the
Company, as debtor, in favor of the Bank, as secured party.
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"Stated Amount" means the maximum amount available from time to
time to be drawn under the Letter of Credit.
"Subsidiary" of a person means any corporation, association or
other business entity of which more than 50% of the total voting power
of shares of stock entitled to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by that person, by one or more of the other
Subsidiaries of that person, or by any combination thereof.
"Survey" means a current survey of the Property prepared by a
surveyor registered or licensed in the State of California, containing a
legal description of the Property and a certification from the surveyor
to the Bank and the Title Company that it was prepared in compliance
with the standards of the American Land Title Association, and that the
survey shows: (a) the location of the perimeter of the Property by
courses and distances; (b) all easements (whether benefitting or
burdening the Property), rights-of-way, and existing utility lines
affecting the Property, whether recorded or disclosed by physical
inspection; (c) the acreage of the Property; (d) any established
building lines or other restrictions of record or established by any
applicable zoning or building code or ordinance; (e) the lines and
widths of the public streets abutting the Property; (f) all
encroachments onto the Property and all encroachments by any buildings,
structures or improvements located on the Property onto any easements
and onto property adjacent to the Property, and the extent in feet and
inches of any such encroachments; (g) all buildings, structures,
improvements (whether completed or partially-constructed) and other
physical matters on the Property which may affect the Property or title
thereto, and the relationship of such buildings, structures,
improvements and other physical matters by distances to the perimeter of
the Property, established building lines and street lines; (h) that
there exists adequate means of ingress and egress to and from the
Property and that the Property does not serve any adjoining property for
ingress, egress or any other purpose; and (i) if the Property is
described as being on a filed map, a legend relating the survey to such
map.
"Title Policies" means, collectively, the Bank Title Policy, the
Bond Trustee Title Policy, and the Owner's Title Policy, all of which
are defined below, and none of which shall contain any survey exceptions
or exceptions for rights of parties in possession, easements not of
record, or unpaid installments of special assessments, or any other
exceptions to coverage, except as expressly provided herein or as
otherwise approved by the Bank in writing:
(a) the 'Bank Title Policy': an ALTA Loan Policy - 1970
with ALTA Endorsement Form 1 Coverage (LP 10), issued by the
Title Company, naming the Bank as the insured, with liability in
the amount of the Initial Stated Amount, insuring the validity
and priority of the lien of the Second Deed of Trust, subject
only to the
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First Deed of Trust and such other exceptions as are approved in
writing by the Bank, and including CLTA endorsements 100, 104.7,
111.5, and 116.1, and such other endorsements as the Bank may
require.
(b) the "Bond Trustee Title Policy": an ALTA Loan Policy
1970 with ALTA Endorsement Form 1 Coverage (LP 10), issued by the
Title Company, naming the Trustee as the insured, with liability
in the amount of the aggregate principal amount of the Bonds,
insuring the validity and priority of the lien of the First Deed
of Trust, as assigned by the Issuer to the Trustee, subject only
to such other exceptions as are approved in writing by the Bank,
and including CLTA endorsements 100, 104.7, 111.5, 112:1, and
116.1, and such other endorsements as the Bank may require.
(c) the "Owner's Title Policy": an ALTA Owner's Policy
Form B - 1970, issued by the Title Company, naming the Company as
the insured, with liability in the amount of the Initial Stated
Amount, insuring that title to the Property is vested in the
Company in fee simple absolute, subject only to the First Deed of
Trust, the Second Deed of Trust, and such other exceptions as are
approved in writing by the Bank, and including such endorsements
as the Bank may require.
"Treasury Regulation" means any of the regulations promulgated
from time to time by the United States Department of the Treasury.
"Trustee" means the party identified as the Trustee on the cover
page hereof, acting as trustee for the Issuer and the Bondholders under
the Indenture, or any successor to such party as Trustee under the
Indenture.
1.4 Accounting Terms. As used herein, all accounting terms not
otherwise defined shall have the meanings assigned to them under GAAP.
1.5 Other Definitional Provisions. References to "Sections,"
"Subsections," "Paragraphs," "Subparagraphs," "Appendices," "Recitals" and
"Exhibits" shall be to Sections, Subsections, Paragraphs, Subparagraphs,
Appendices, Recitals, and Exhibits of this Agreement unless otherwise
specifically provided. Any of the terms defined in this Section 1 may be used in
singular or plural form. As used herein, the singular includes the plural, and
the masculine gender includes the feminine and neuter genders, and vice versa,
unless the context otherwise requires, and the word "person" shall include
individuals, governmental agencies, departments and entities, trusts,
corporations, partnerships, organizations, associations, and other entities.
Except as otherwise provided herein, references to any document or instrument
defined in this Section 1 are to such document or instrument as amended or
supplemented from time to time with the Bank's consent or as otherwise permitted
by this Agreement.
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SECTION 2. APPLICATION, REIMBURSEMENT AND OTHER PAYMENTS
2.1 Application for Letter of Credit. The Company hereby applies
to the Bank for and authorizes and instructs the Bank to issue the Letter of
Credit in the Initial Stated Amount.
2.2 Reinstatement of Letter of Credit. Immediately following any
drawing by the Letter of Credit Beneficiary upon the Letter of Credit pursuant
to a draft accompanied by a certification in the form of Annex A to the Letter
of Credit, the obligation of the Bank under the Letter of Credit shall
automatically be reinstated to the extent so provided in the Letter of Credit.
Immediately following reimbursement in full of the Bank for the amount of any
drawing by the Letter of Credit Beneficiary upon the Letter of Credit pursuant
to a draft accompanied by a certification in the form of Annex B to the Letter
of Credit, the obligation of the Bank under the Letter of Credit shall be
automatically reinstated to the extent so provided in the Letter of Credit.
Nothing in this Subsection 2.2 shall limit the Bank's rights under any other
provision of this Agreement or the other L/C Documents.
2.3 Reimbursement for Draws Upon Letter of Credit. (a) The
Company hereby agrees (i) to reimburse the Bank, on each date that any amount is
drawn upon the Letter of Credit (except as otherwise provided in clause (iii)
below), for the amount drawn on such date, and to pay to the Bank the Letter of
Credit Negotiation Fee set forth in Subsection 1.1 on the date of each such
drawing; (ii) to pay to the Bank, on demand, interest at the Agreed Rate on any
and all amounts unpaid by the Company when due hereunder, from the date such
amounts become due until payment in full; and (iii) to reimburse the Bank,
within 90 days, for the amount of any draw upon the Letter of Credit pursuant to
a draft accompanied by a certification in the form of Annex B to the Letter of
Credit for the purchase price of Bonds tendered for purchase pursuant to Section
1301 OR 1302 OF THE Indenture (a "Purchase Draw"). The unreimbursed amount of
any such Purchase Draw shall bear interest at the Remarketing Period Interest
Rate from the date of such drawing until the date that reimbursement of the
principal amount of such Purchase Draw becomes due and payable hereunder, which
interest shall be payable in arrears on the first day of each calendar month and
on the date that reimbursement of the principal amount of such Purchase Draw is
due and payable. Notwithstanding the foregoing, in the event of any payment by
the Bank under the Letter of Credit against presentation of a sight draft or
certificate that does not substantially comply with the terms of the Letter of
Credit, where such payment constitutes gross negligence or willful misconduct
on the part of the Bank, then the Company shall not be liable to the Bank for
reimbursement of any portion of such payment that is not applied in accordance
with the terms of the Indenture.
(b) In order to facilitate Company's reimbursement of the Bank
pursuant to Subsection 2.3(a), (i) on the same date that any amount is drawn
upon
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the Letter of Credit to make a scheduled interest payment on the Bonds, the
Company shall deposit good and readily available funds into the Reimbursement
Account in a sum equal to the amount that will be due and payable as
reimbursement to the Bank under Subsection 2.3(a)(i) for the amount to be drawn
upon the Letter of Credit prior to such Bond Interest Payment Date, together
with the Letter of Credit Negotiation Fee payable in connection with such
drawing, and (11) on the same date that any amount is drawn upon Letter of
Credit in order to pay any principal payment on the Bonds that becomes due,
whether at maturity, by acceleration, notice of prepayment, or otherwise, the
Company shall deposit good and readily available funds into the Reimbursement
Account in a sum equal to the amount that will be due and payable as
reimbursement to the Bank under Subsection 2.3(a)(i) for the amount to be drawn
under the Letter of Credit prior to such principal payment date, together with
the Letter of Credit Negotiation Fee payable in connection with such drawing.
For the purpose of calculating such deposits, it shall be assumed that interest
on the Bonds will accrue at the Maximum Bond Interest Rate during any period for
which the Remarketing Agent has not yet determined the Adjustable Interest Rate
pursuant to Section 203 of the Indenture. The Company hereby authorizes and
directs the Bank to debit the Reimbursement Account following any payment by the
Bank under the Letter of Credit for the amount due and payable to the Bank
pursuant to Subsection 2.3(a). On or before the third Business Day following
each Bond Interest Payment Date, the Bank shall refund to the Company all
amounts in the Reimbursement Account in excess of amounts then owing to the Bank
under this Agreement (other than any amounts deposited pursuant to clause (ii)
of this Subsection 2.3(b) in connection with any Bond principal payment which
has not yet occurred). The amount of any disbursement received by the Bank from
the Trustee pursuant to Section 304. 307 or 1307 of the Indenture shall be
credited to the Company's obligations under this Section 2.3.
2.4 Fees. The Company shall pay to the Bank:
(a) the Letter of Credit Origination Fee, which shall be
payable on the Date of Issuance;
(b) the Letter of Credit Administration Fee, which shall
be payable annually in advance on the Date of Issuance and on each
anniversary of such date prior to the Expiration Date; and
(c) the Letter of Credit Negotiation Fee, which shall be
payable together with each reimbursement for each draw on the Letter of
Credit.
2.5 Allocation of Increased Costs. If any past, present or future
legislative, administrative or judicial action has the direct or indirect effect
of imposing upon the Bank or any Participant any requirement or condition
regarding this Agreement or the Letter of Credit that directly or indirectly
increases the cost to the Bank or any Participant of issuing, maintaining or
honoring draws under the Letter of Credit, or the cost to any Participant of
participating in the Letter of Credit, over the cost thereof as of the date of
this
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Agreement, the Bank shall so notify the Company and the Company shall pay to the
Bank on or before the due date or dates specified in the Bank's notice (which
due date or dates shall be at least three (3) Business Days after the Company
receives such notice) all additional amounts necessary to compensate the Bank or
any Participant for such additional costs. Any such costs not so paid by Company
when due shall bear interest at the Agreed Rate from the due date specified in
the Bank's notice until paid in full. The Bank shall deliver to the Company a
certificate showing the amount and manner of calculation of such increased
costs, and such certificate shall be conclusive (absent manifest error) as to
such amount. Without limiting the generality of the foregoing, if any premium is
imposed by the Federal Deposit Insurance Corporation or any reserve requirement
is imposed by the Comptroller of the Currency or the Board of Governors of the
Federal Reserve System in connection with the Letter of Credit, the cost to the
Bank and any Participants of such premium and/or reserve requirement shall be
payable by the Company as an additional cost in accordance with this Subsection.
2.6 Bank Expenses. The Company shall pay to the Bank, within
three (3) Business Days after demand by the Bank, all costs, charges, fees and
expenses (including fees and expenses of in-house and outside counsel for the
Bank and of any in-house or outside appraisers) paid or incurred by the Bank in
connection with this Agreement or relating to the transactions contemplated
hereby, including without limitation any costs, charges, fees and expenses
incurred in connection with (a) the preparation and negotiation of this
Agreement and any other documents or instruments executed in connection
herewith; (b) the closing of the transactions contemplated by this Agreement; or
(c) the perfection, protection, exercise or enforcement of any of the Bank's
rights under any of the Related Documents.
2.7 Manner and Time of Payment. Except as otherwise expressly
provided herein, all payments to the Bank by or on behalf of the Company under
this Agreement shall be made in immediately available funds to the Bank at its
office at the Bank Payment Address set forth in Subsection 1.2, by 2:00 p.m.,
Los Angeles time on the date such payment is due. Funds received after such time
shall be deemed to have been paid and received on the next succeeding Business
Day.
2.8 Application of Funds. All payments received by the Bank from
or on behalf of Company hereunder or pursuant to any of the other Related
Documents shall be applied by the Bank to the payment of amounts then owing by
the Company to the Bank, in such order and manner as the Bank chooses in its
sole discretion. Any balance remaining after payment in full of all such amounts
shall be disbursed by the Bank to the Company or such other person or persons as
shall be legally entitled thereto.
2.9 Computation of Interest. All interest payable hereunder shall
be computed on the basis of a 360-day year and the actual number of days elapsed
in the period during which such interest accrues. In computing the number of
day: during which interest accrues on any amount outstanding
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hereunder, the first date from which interest is stated to accrue hereunder
shall be included and the date of payment of such amount to the Bank shall be
excluded.
SECTION 3. CONDITIONS PRECEDENT TO THE ISSUANCE OF THE LETTER OF
CREDIT
The Bank's obligation to issue the Letter of Credit and all other
obligations of the Bank hereunder are conditioned upon the satisfaction by the
Company of all of the following conditions:
3.1 Execution and Delivery of Closing Documents. On or before the
Date of Issuance, the Bank shall have received and approved the following
documents, each of which shall be in form and substance satisfactory to the Bank
and duly executed (and acknowledged where necessary) and delivered by the
appropriate parties thereto:
(a) The Letter of Credit Application, in the form of Exhibit B;
(b) The Loan Agreement, the Indenture, and the Intercreditor
Agreement;
(c) The Placement Agent Agreement;
(d) The Remarketing Agreement;
(e) The First Deed of Trust, the First Fixture Filing, the
Memorandum of Assignment, the Second Deed of Trust, and the Second
Fixture Filing, duplicate originals of which shall have been duly
recorded in the Official Records of the County;
(f) The First Security Agreement and the Second Security
Agreement;
(g) The First Financing Statement and the Second Financing
Statement, duplicate originals of which shall have been duly filed in
the Office of the California Secretary of State and, if the Company's
principal place of business is located in a state other than California,
in the Office of the Secretary of State of that state or other
appropriate place or places in that state;
(h) Assignments to the Bank of the Project Plans and all Project
Agreements, Permits, and Licenses, together with consents to such
assignments where deemed appropriate by the Bank;
(i) An opinion of Bond Counsel and a supplemental opinion of Bond
Counsel, as required by the Placement Agent Agreement, in each case
dated the Date of Issuance and addressed to the Bank or accompanied by a
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letter satisfactory to the Bank entitling the Bank, any Participants,
and any successors or assigns of either to rely on such opinions to the
same extent as if addressed to such persons (a "Reliance Letter");
(j) An opinion of counsel for the Company dated the Date of
Issuance and addressed to the Bank, substantially in the form of Exhibit
F;
(k) An opinion of counsel for the Trustee with respect to such
matters as the Bank may request, dated the Date of Issuance and
addressed to the Bank or accompanied by a Reliance Letter;
(1) An opinion of counsel for the Issuer with respect to such
matters as the Bank may request, dated the Date of Issuance and
addressed to the Bank or accompanied by a Reliance Letter;
(m) An opinion of O'Melveny & ▇▇▇▇▇, special counsel to the
Bank, with respect to such matters as the Bank may request;
(n) Each of the approvals, authorizations, and consents described
in Exhibit E;
(o) An "Authorized Representative Certificate," substantially in
the form of Exhibit C;
(p) A certificate signed by an Authorized Representative of the
Company and dated the Date of Issuance, confirming the satisfaction of
the conditions set forth in Subsection 3.2;
(q) A Certification of Non-Foreign Status;
(r) Authorizing resolutions of the Board of Directors of the
Company;
(s) The inducement resolution of the Issuer declaring the intent
of the Issuer to issue Bonds to finance the Project; the resolution of
the governmental body approving the issuance of the Bonds by the Issuer
to finance the Project; the resolution of the Issuer authorizing the
issuance of the Bonds; and the final resolution of the California
Industrial Development Financing Advisory Commission approving the
issuance of Bonds by the Issuer to finance the Project;
(t) A certificate of representations and warranties by the
Company relating to the tax-exempt status of the Bonds; and
(u) Such other documents and instruments as the Bank may
reasonably require.
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3.2 Representations Correct; No Default. On the Date of Issuance:
(a) the representations and warranties contained herein
and in each written document delivered by the Company to the Bank in
connection with this Agreement shall be true and correct on and as of
the Date of Issuance to the same extent as though made on and as of such
date;
(b) no Event of Default or Potential Default shall have
occurred and be continuing and neither will result from the issuance of
the Letter of Credit.
3.3 Other Requirements. On the Date of Issuance:
(a) the Issuer shall have adopted and delivered to the
Bank certified copies of resolutions, satisfactory to the Bank,
authorizing the issuance of the Bonds and the execution, delivery and
performance by the Issuer of the Loan Agreement, the Intercreditor
Agreement and the Indenture, and on the Date of Issuance such
resolutions shall be in full force and effect;
(b) the Trustee shall have accepted the trusts of the
Indenture;
(c) all conditions precedent to the issuance of the Bonds
(other than issuance of the Letter of Credit) shall have occurred;
(d) ▇▇▇▇▇'▇ Investors Service shall have assigned a rating
for the Bonds at least as high as the most recent rating assigned by
such agency to other securities comparable to the Bonds secured by
letters of credit issued by the Bank, and such rating shall not have
been downgraded, suspended or withdrawn;
(e) the Bank shall have received all amounts required by
this Agreement to be paid to the Bank on or before the Date of Issuance
(or provision satisfactory to the Bank shall have been made for the
payment thereof out of Bond proceeds on the Date of Issuance);
(f) the Bank shall have received and approved each of the
items listed in Exhibit H, each of which (i) shall be dated on or before
the Date of Issuance, ii) shall at the request of the Bank be brought
current as of the Date of Issuance, and (iii) shall be in form and
substance satisfactory to the Bank. For the purposes of this Section
"such date", as used in Exhibit H, shall mean the Date of Issuance;
(g) the Loan Agreement and the Indenture shall be
consistent with the requirements set forth in Exhibit G; and
(h) no legislation, rule, order or decree shall, in the
opinion of counsel for the Bank, purport to prohibit or restrain the
issuance of the Letter of Credit as provided in this Agreement.
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SECTION 4. COMPANY'S OBLIGATIONS UNCONDITIONAL
The obligations of the Company under this Agreement shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with this Agreement (subject to any modifications, waivers or consents by the
Bank in accordance with the terms hereof) under any and all circumstances, and
shall not be affected by (a) any lack of validity or enforceability of any other
Related Documents; (b) any amendment of, or any waiver or consent with respect
to, all or any of the other Related Documents; (c) the existence of any claim,
set-off, defense or other rights which the Company may have at any time against
the Issuer, the Trustee, or any other person; (d) any breach of contract or
other dispute between the Company and any person; (e) any statement or document
presented under the Letter of Credit proving to be forged, fraudulent, untrue,
inaccurate, invalid or insufficient in any respect; (f) any payment by the Bank
under the Letter of Credit against presentation of a sight draft or certificate
which does not comply with the terms of the Letter of Credit (except as
otherwise expressly provided in Subsection 2.3(a) where such payment constitutes
gross negligence or willful misconduct of the Bank); (g) any delay, extension of
time, renewal, compromise or other indulgence or modification agreed to by the
Bank, with or without notice to or approval by the Company in respect of any of
the Company's indebtedness to the Bank under this Agreement; (h) any failure to
complete the Project; (i) any exchange, release or nonperfection of any lien or
security interest in any collateral pledged or otherwise provided to secure any
of the obligations contemplated herein or in any of the other Related Documents;
(j) any non-recourse nature of any of the Company's obligations under any of the
Related Documents; or (k) any other circumstance or event whatsoever, whether or
not similar to any of the foregoing. Notwithstanding the foregoing, nothing
contained in this Section shall be construed to release the Bank from the
performance of any of the covenants, undertakings or agreements of the Bank
contained in this Agreement, except as otherwise expressly provided herein or to
prevent the Company from enforcing any of the covenants, undertakings or
agreements of the Bank in this Agreement directly against the Bank by suit for
specific performance or claims for damages or a combination of the foregoing.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
In order to induce the Bank to enter into this Agreement and to issue
the Letter of Credit, the Company represents and warrants to the Bank that the
following statements are true, correct and complete as of the date hereof and
will be correct as of the Date of Issuance and the date of each Disbursement:
5.1 Organization, Powers and Good Standing.
(a) Organization and Powers. The Company is a corporation, duly
incorporated, validly existing and in good standing under the laws of the State
of its incorporation, as set forth on the cover page hereof. The Company has all
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requisite power and authority, rights and franchises to own and operate its
properties, to carry on its business as now conducted and as proposed to be
conducted, and to enter into and perform this Agreement and the other Company
Documents.
(b) Good Standing. The Company has made all filings and is in good
standing in California and, if different, in the jurisdiction of its
organization or incorporation, as the case may be, and in each other
jurisdiction in which the character of the property it owns or the nature of the
business it transacts makes such filings necessary or where the failure to make
such filings could have a materially adverse effect on the business, operations,
assets or condition (financial or otherwise) of the Company. The address of the
Company's chief executive office and principal place of business is as set forth
in Subsection 1.2.
(c) Non-Foreign Status. The Company is not a "foreign corporation,"
"foreign partnership," "foreign trust," or "foreign estate," as those terms are
defined in the Internal Revenue Code and the regulations promulgated thereunder.
The Company's U.S. employer identification number is as set forth in Subsection
1.2.
5.2 Authorization of Company Documents.
(a) Authorization. The execution, delivery and performance of the
Company Documents by the Company are within the Company's powers and have been
duly authorized by all necessary action by the Company, including the adoption
of any necessary bylaws or resolutions by the board of directors of the Company.
(b) No Conflict. To the best of the Company's knowledge, after due
investigation, the execution, delivery and performance of the Company Documents
by the Company will not violate (i) the Company's articles of incorporation or
bylaws or (ii) any Legal Requirement affecting the Company, or any of its
properties, and will not result in or require the creation (except as provided
in or contemplated by this Agreement) of any Lien upon any of such properties.
The Company is not in violation of or default under any Legal Requirement which
affects the enforceability of the Company Documents, title to the Project, or
the ability of the Company to meet any of its obligations, including payment
obligations, under the Company Documents, and no condition exists that would,
with the giving of notice or lapse of time, or both, constitute such a violation
or default.
(c) Governmental and Private Approvals. All governmental or regulatory
orders, consents, permits, authorizations and approvals required for
commencement and timely completion of the Project have been obtained. No
additional governmental or regulatory actions, filings or registrations with
respect to the Project, and, except as described in Exhibit E, no approvals,
authorizations or consents of any trustee or holder of any indebtedness or
obligation of the Company, or any other person, are required for the due
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execution, delivery and performance by the Company of the Company Documents.
(d) Binding Obligations. This Agreement and the other Company Documents
have been duly executed by the Company, and are legally valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and by general principles of equity.
5.3 Litigation; Adverse Facts. Except as disclosed in writing to the
Bank, there is no action, suit, investigation, proceeding or arbitration
(whether or not purportedly on behalf of the Company) at law or in equity or
before or by any foreign or domestic court or other governmental entity (a
"Legal Action"), pending or, to the best of the Company's knowledge, threatened
against or affecting the Company or any of its assets which could reasonably be
expected to result in any material adverse change in the business, operations,
assets (including the Project) or condition (financial or otherwise) of the
Company or would materially adversely affect the Company's ability to perform
its obligations under the Related Documents. There is no asserted claim against
the Company in excess of $ 100,000. The Company is not (a) in violation of any
applicable law, which violation materially adversely affects or may materially
adversely affect the business, operations, assets (including the Project) or
condition (financial or otherwise) of the Company, or (b) subject to, or in
default with respect to, any Legal Requirement that would have a materially
adverse effect on the business, operations, assets (including the Project) or
condition (financial or otherwise) of the Company. There is no Legal Action
pending or, to the best of the Company's knowledge, threatened against or
affecting the Company questioning the validity or the enforceability of this
Agreement or any of the other Related Documents.
5.4 Financial Condition. The most recent interim and annual financial
statements of the Company, copies of which have been delivered to the Bank,
fairly present the financial condition of the Company at the dates thereof, are
true and correct, and have been prepared in accordance with GAAP on a basis
consistently applied. Any other statements and data submitted in writing by the
Company to the Bank in connection with this Agreement are true and correct in
all material respects as of their dates. Since the dates of such financial
statements there have been no material changes in the business, operations,
assets, management, ownership or condition (financial or otherwise) of the
Company, other than changes in the ordinary course of business that have not
been materially adverse. Except as otherwise previously disclosed to the Bank in
writing in connection with this Agreement, the Company has no knowledge of any
liabilities, contingent or otherwise, of the Company, and no knowledge of any
material Contractual Obligations of the Company (other than those entered into
in the ordinary course of the Company's business) which might have a materially
adverse effect upon the Company's business, operations, assets, management, or
condition (financial or otherwise).
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5.5 Title to Properties; Liens. The Company has good, sufficient and
legal title to all properties and assets reflected in its most recent balance
sheet delivered to the Bank, except for assets disposed of in the ordinary
course of business since the date of such balance sheet. All of Company's
properties are free and clear of Liens, except as permitted hereunder.
5.6 Disclosure. There is no fact known to the Company (other than
matters of a general economic nature) which materially adversely affects the
business, operations, assets or condition (financial or otherwise) of the
Company which has not been disclosed in this Agreement or in other documents,
certificates and written statements furnished to the Bank in connection
herewith.
5.7 Payment of Taxes. All tax returns and reports of the Company
required to be filed by it have been timely filed, and all taxes, assessments,
fees and other governmental charges upon the Company and upon its properties,
assets, income and franchises which are due and payable have been paid when due
and payable, except to the extent such taxes are being contested in good faith
in accordance with Subsection 16.1, and the Bank has received written notice of
such contests. The Company knows of no proposed tax assessment against it that
would be material to the condition (financial or otherwise) of the Company, and
the Company has not contracted with any government entity in connection with
taxes.
5.8 Trademarks, Copyrights and Patents. The Company possesses all
necessary trademarks, trade names, copyrights, patents, patent rights and
licenses to conduct its business as now operated, without any known conflict
with the valid trademarks, trade names, copyrights, patents and license rights
of others.
5.9 Securities Activities. The Company is not engaged principally, or as
one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any margin stock (as defined within
Regulations G, T and U of the Board of Governors of the Federal Reserve System),
and not more than twenty-five percent (25%) of the value of the Company's
assets consists of such margin stock.
5.10 Government Regulations. The Company is not subject to regulation
under the Investment Company Act of 1940, the Federal Power Act, the Public
Utility Holding Company Act of 1935, the Interstate Commerce Act or to any
federal or state statute or regulation limiting its ability to incur
Indebtedness for money borrowed.
5.11 Title to Property. The Company is the sole owner of, and has good
and marketable title to, the fee interest in the Property and all other real and
personal property described in the Bank Security Documents, free from any
adverse lien, security interest or encumbrance of any kind whatsoever, excepting
only (a) the Issuer Security Documents, (b) liens and security interests in
favor of the Bank, and (c) other matters which have been approved in writing by
the Bank.
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5.12 Rights to Project Agreements, Permits and Licenses. The Company is
the true owner of all rights in and to all existing Project Agreements, Permits
and Licenses, and will be the true owner of all rights in and to all future
Project Agreements, Permits and Licenses. The Company's interest in all
contracts included in the Project Agreements, Permits and Licenses is not
subject to any present claim, set-off or deduction other than in the ordinary
course of business.
5.13 Legal Requirements. The Company has obtained and examined, or will
obtain and examine in a timely fashion, all Legal Requirements, affecting or
relating to the Project, including those relating to environmental quality. The
Project does not and will not violate any of such requirements. The Company is
not aware of any pending or threatened investigation by any state or federal
agency with respect to such Legal Requirements.
5.14 Utilities, etc. Telephone services, gas, electric power, storm
sewers, sanitary sewer, potable water facilities, and all other utilities and
services necessary for the construction, operation and maintenance of the
Project are available to the Property, are adequate to serve the Project, and
are not subject to any conditions limiting the use of such utilities, other than
normal restrictions applicable to users generally and normal charges to the
utility supplier. All streets and easements necessary for the construction,
operation and maintenance of the Project are available to the boundaries of the
Property.
5.15 Commencement of Work. On or prior to the Date of Official Action,
as defined in the Loan Agreement (i.e., March 5, 1985), neither the Company nor
anyone else on the Company's behalf shall have (a) commenced construction of the
Project, (b) purchased, contracted for or otherwise brought upon the Property
any materials specially fabricated for or otherwise to be incorporated into the
Project, or (c) made any oral or written contract, agreement or arrangement of
any kind other than the Project Architect's Agreement.
5.16 Approved Budget. On a line-by-line and total basis the costs shown
in the Approved Budget are true, correct and complete, and represent the total
of all costs, expenses and fees which the Company expects to pay or may be or
become obligated to pay to construct, occupy, and operate the Project.
5.17 Other Related Documents. Each of the representations and warranties
of the Company contained in any of the other Related Documents is true and
correct. All of such representations and warranties are incorporated herein by
this reference to the same extent as if made by the Company herein for the
benefit of the Bank.
SECTION 6. AFFIRMATIVE COVENANTS OF THE COMPANY
Until the later of the Expiration Date or payment in full of all amounts
due and owing or payable to the Bank under this Agreement and the
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other L/C Documents, unless the Bank otherwise expressly consents in writing:
6.1 Maintenance of Existence, Etc. The Company will (a) maintain and
preserve its existence and all rights and franchises material to its business;
(b) maintain its assets in good order and repair; (c) conduct its business in an
orderly manner without voluntary interruption; and (d) maintain its chief
executive office and principal place of business in the State in which it is
currently located, as set forth in Subsection 1.2.
6.2 Maintenance of Insurance.
(a) The Company shall at all times provide, maintain, keep in full force
and effect or cause to be provided, maintained, and kept in full force and
effect, at its own expense, policies of insurance in such form and amounts,
with such deductibles, and covering such casualties, risks, perils and
liabilities as are customarily carried by similar businesses, and issued by
responsible insurance carriers. Without limiting the generality of the
foregoing, such insurance shall include fire and extended coverage
(including a builder's "all risks" completed value policy in the greater
amount of the Initial Stated Amount or the replacement cost of the Project),
broad form public liability coverage for not less than $3,000,000 (carried
by the Company and by H.M.H. Construction during construction), property
damage (including course of construction coverage of not less than
$3,000,000), product liability, workers' compensation and employer's
liability insurance. Further, without limiting the generality of the
foregoing, the Company shall provide, maintain and keep in force, at its own
expense, such additional insurance as is customarily required for projects
of a similar nature or as may be reasonably required by the Bank from time
to time in the event that the Project is exposed to hazards and risks with
respect to which the Bank deems the existing insurance inadequate to
properly protect its interests.
(b) All policies of insurance required by the terms of this Agreement
shall either have attached thereto a lender's loss payable endorsement for
the benefit of the Bank and the Trustee in form satisfactory to the Bank and
the Trustee or shall name the Bank and the Trustee as additional insureds
and shall contain an endorsement or agreement by the insurer that any loss
shall be payable in accordance with the terms of such policy notwithstanding
any act or negligence of the Company or any party holding under the Company
which might otherwise result in forfeiture of said insurance and the further
agreement of the insurer waiving all rights of setoff, counterclaim and
deduction against the Company.
(c) After the Project has been completed and until repayment of the
Bonds and the satisfaction of all obligations of the Company under this
Agreement, the Company shall also provide from time to time at the written
request of the Bank, but not more often than once annually, satisfactory
evidence of the insurable value of the Project. Such evidence may be in the
form of an insurance appraisal or valuation report prepared
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by an insurance company, agent or broker, professional appraiser, architect,
engineer or contractor approved by the Bank. The Company shall bear the
costs, if any, of such insurance appraisal or valuation report.
(d) The Company shall immediately furnish to the Bank all certificates
of insurance for each policy required hereunder setting forth the coverage,
the limits of liability, the deductibles, if any, the name of the carrier,
the policy number, and the period of coverage, which certificates shall have
been executed by authorized officials of the companies issuing such
insurance, or by agents or attorneys-in-fact authorized to issue said
certificates (in which event each such certificate shall be accompanied by a
notarized affidavit, agency agreement or power of attorney evidencing the
authority of the signature to issue such certificate on behalf of the
insurer named therein). Upon the Bank's written request, the Company shall
deliver original policies and endorsements and renewals thereof to the Bank.
If the Bank consents, the Company may provide any of the required insurance
through blanket policies carried by the Company and covering more than one
location, or by policies procured by a tenant or other party holding under
the Company; provided, however, all such policies shall be in such form and
amount, with such deductibles, and issued by such companies, as are
satisfactory to the Bank.
(e) At least thirty (30) days prior to the expiration of each required
policy, the Company shall deliver to the Bank and the Trustee evidence
satisfactory to the Bank and the Trustee of the insurance in form as
required by this Agreement. All such policies shall contain a provision
that, notwithstanding any contrary agreement between the Company and the
insurance company, such policies will not be cancelled, allowed to lapse
without renewal, surrendered or materially amended (which term shall include
any reduction in the scope or limits of coverage) without at least thirty
(30) days' prior written notice to the Bank and the Trustee. All consents
and approvals of the Bank and the Trustee required by this Section 6.2 shall
be given or withheld in the reasonable discretion of the Bank and the
Trustee. If the Company fails to provide, maintain, and keep in force the
policies of insurance required by this Agreement, the Bank may (but shall
have no obligation to) procure such insurance, or single interest insurance
for such risks covering the Bank's and the Trustee's interests, and the
Company will pay all premiums therefor within three (3) Business Days after
demand by the Bank; and until such payment is made by the Company, the
amount of all such premiums, together with interest thereon at the Agreed
Rate, shall be secured by the Second Deed of Trust.
6.3 Payment of Taxes, Etc. The Company will pay (a) all taxes,
assessments and governmental charges upon it or any of its properties, income,
assets or franchises before any penalties or interest accrues; and (b) all other
sums due from it before penalties or interest accrues or Liens are imposed, in
each case except to the extent contested in good faith in accordance with
Subsection 16.1. The Company shall pay all government charges or taxes,
including interest or penalties, (except income, franchise or other similar
taxes)
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payable in respect of the existence, execution or delivery of the Letter of
Credit by reason of any existing or future federal or state or local statute.
6.4 Access and Reporting. The Company will permit the representatives of
the Bank at any time or from time to time, upon one day's notice, to inspect all
of its properties, books and records. The Company, at its expense, will furnish
or cause to be furnished to the Bank the following:
(a) Notice of Default. As soon as possible, and in any event not later
than five days after the occurrence of any Event of Default or Potential
Default, a statement of an Authorized Representative of the Company
describing the details of such Event of Default or Potential Default and any
curative action the Company proposes to take;
(b) Monthly Statements. As soon as available, and in any event not later
than 45 days after the last day of each month during the term of this
Agreement commencing with the month designated by the Bank, financial
statements of the Company including a balance sheet and a profit and loss
statement, as at the close of and for such month, all in reasonable detail
and prepared in accordance with GAAP on a basis consistently applied; such
statements to be accompanied by a certificate signed by an Authorized
Representative of the Company to the effect that such statements fairly
present the financial condition of the Company as at the date indicated and
the results of operations for the period indicated, subject, however, to
year-end audit adjustments;
(c) Annual Statements. As soon as available, and in any event not later
than 90 days after the close of each fiscal year of the Company, financial
statements of the Company, including a profit and loss statement,
reconciliation of capital accounts and a consolidated statement of changes
in financial position of the Company as at the close of and for such fiscal
year, all in reasonable detail, certified as provided in clause (b) above by
an Authorized Representative of the Company and, upon request of the Bank,
accompanied by the report of a firm of certified public accountants
reasonably acceptable to the Bank, which opinion shall be unqualified or
contain only such qualifications as (i) do not reflect a materially adverse
change in the financial condition of the Company and (ii) are otherwise
acceptable to the Bank;
(d) Budgets. As soon as available, and in any event not later than 90
days after the close of each fiscal year of the Company, copies of the
projected annual Capital Budget and Operating Budget for the following year
and, as soon as available, copies of all quarterly updates and reprojections
of said budgets.
(e) Tax Returns. If requested by the Bank, as soon as available, and in
any event not later than at the time of filing with the Internal Revenue
Service, the federal tax returns (and supporting schedules, if any) of the
Company;
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(f) Supplemental Statements. As soon as available, and in any event not
later than at the time of filing with the Internal Revenue Service, any
statement, supplemental statement or other tax schedule or return or
document filed with the Internal Revenue Service pursuant to Treasury
Regulation Section 1.103-10(b)(2)(vi)(c) as the same may be amended or
supplemented from time to time;
(g) Certificate of Performance. Concurrently with delivery of each of
the financial statements provided for in clauses (b) and (c) above, a
certificate of an Authorized Representative of the Company stating that the
Company has performed and observed each of its covenants contained in this
Agreement and that no Event of Default or Potential Default has occurred or,
if any such event has occurred, specifying its nature;
(h) Audit Reports. Promptly upon receipt thereof, copies of all reports
submitted to the Company by independent public accountants in connection
with each annual, interim or special audit of the financial statements of
the Company made by such accountants, including the comment letter submitted
by such accountants to management in connection with their annual audit;
(i) Proxy Statements. If requested by the Bank, promptly upon their
becoming available, copies of (i) all financial statements, reports, and
notices sent or made available generally by the Company to its members and
(ii) all press releases and other statements made available generally by the
Company to the public concerning material developments relating to or
affecting the Project or the business of the Company.
(j) Other L/C Documents. All other documents, certificates, statements,
notices, and other information required to be furnished to the Bank pursuant
to any of the L/C Documents, in the manner and at the times therein
provided;
(k) Notices, Certificates or Communications. Immediately upon giving or
receipt thereof, copies of any notices, certificates or other communications
given to or received from the Trustee or the Issuer pursuant to or in
connection with any of the Related Documents, as well as any notices and
other communications delivered to the Property or to the Company naming the
Bank or the "Construction Lender" as addressee, or which could reasonably be
deemed to affect the construction of the Project or the ability of the
Company to perform its obligations to the Bank;
(1) Certification of Non-Foreign Status. Promptly upon request of the
Bank from time to time, a Certification of Non-Foreign Status, executed on
or after the date of such request by the Bank; and
(m) Other Information. Such other documents and information relating to
the affairs of the Company and the Project as the Bank reasonably may
request from time to time.
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6.5 Additional Notices. The Company will promptly give notice to the
Bank of (a) any fact or circumstance of which the Company becomes aware that may
render the Approved Budget inaccurate in any material respect; (b) any Lien
affecting the Project other than Liens expressly permitted hereby; (c) the
institution of any Legal Action involving a potential liability of the Company
in excess of $100,000 (describing the proceeding and the steps being taken with
respect thereto), and any material development or determination in any such
Legal Action, (d) any other event or condition which may materially adversely
affect the development or operation of the Project, and (e) any change or
contemplated change in (i) the location of the Company's executive headquarters
or principal place of business, (ii) the legal, trade, or fictitious business
names used by the Company or (iii) the nature of the Company's trade or
business.
6.6 Maintenance of Properties. The Company will maintain all of its
properties in good working order and condition, ordinary wear and tear excepted.
6.7 Further Assurances. At any time or from time to time upon the
request of the Bank, the Company will, at its expense, promptly execute,
acknowledge, and deliver such further documents and do such other acts and
things as shall be necessary or advisable, in the Bank's judgment, in order to
effect fully the purposes of this Agreement or of any of the other Related
Documents. The Company will pay all fees and expenses (including reasonable
attorneys fees) incurred by the Bank in connection therewith.
6.8 Protection of Liens on Property. The Company will maintain (a) the
lien created by the Indenture and the lien created by the First Deed of Trust as
a first lien upon the Project; and (b) the lien created by the Second Deed of
Trust as a second lien upon the Project, subject to no additional Liens or
encumbrances other than title exceptions set forth in the Title Policies and
acceptable to the Bank.
6.9 Compliance with Legal Requirements. The Company will comply and
cause others to comply in all material respects with all Legal Requirements
affecting the Project, and all other Legal Requirements the noncompliance with
which would have a material adverse effect on (a) the business, operations,
assets, or condition (financial or otherwise) of the Company or (b) the ability
of the Company to perform its obligations under the Related Documents.
6.10 Payment of Indebtedness. The Company will (a) duly and punctually
pay or cause to be paid all principal of and interest on any Indebtedness of the
Company, (b) comply with and perform all conditions, terms and obligations of
the notes or other instruments or agreements evidencing or securing such
Indebtedness, (c) promptly inform the Bank of any default, or potential default,
under any such note, agreement, or instrument, and (d) forward to the Bank a
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copy of any notice of default or notice of any potential default under any such
note, agreement or instrument.
6.11 Appendices. The Company will duly, timely and diligently comply
with each and every term, covenant, condition and provision set forth in
Appendix I (Construction Covenants and Disbursement Procedures) and Appendix II
ERISA Matters).
6.12 Use of Disbursements. The Company will use or cause to be used all
Disbursements solely for the purpose of paying Project Costs.
6.13 Project Agreements, Permits and Licenses. To the extent not
heretofore delivered to the Bank pursuant to Section 3, the Company will furnish
to the Bank, as soon as available and if requested by the Bank, true and correct
copies of all Project Agreements, Permits and Licenses, together with
assignments thereof to the Bank and consents to such assignments where deemed
appropriate, all in form and substance acceptable to the Bank. The Company has
not assigned or granted, or will assign or grant, a security interest in any of
the Project Agreements, Permits and Licenses, other than to the Bank and the
Issuer or the Trustee.
6.14 Other Company Documents. The Company shall comply in all respects
with all of the covenants contained in the other Company Documents, all of which
covenants are incorporated herein by this reference.
6.15 Financial Covenants.
(a) The Company shall maintain a ratio of Indebtedness to Net Worth of
not more than 1.00.1.00.
(b) The Company shall maintain Working Capital o` not less than
$3,500,000.
(c) Interest Expense shall be allocated against the Operating Budget and
such Operating Budget shall not exceed the Operating Retains.
(d) Capital Expenditures shall be allocated against the Capital Budget
and the use of funds included in such Capital Budget shall not exceed the
sources of capital funds, which shall include the Capital Retains.
6.16 Removal of Condition Subsequent. As soon as possible after
completion of construction o the Improvements; (a) the Company shall cause
▇▇▇▇▇▇ Development Company, a California corporation ("Kaiser"), the grantor
under that certain Corporation Grant Deed dated November 5, 1984, as amended by
that certain Correction of and Amendment to Corporation Grant Deed dated as of
November 5, 1984 (the "Grant Deed"), to execute and deliver to the Company a
certificate or other instrument (the "Certificate") in recordable form
evidencing and acknowledging completion of the Improvements and ▇▇▇▇▇▇'▇ waiver
and release of its right of reentry pursuant to the Condition Subsequent
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attached as Exhibit "B" to the Grant Deed (the "Condition Subsequent"); (b) the
Company shall cause the Certificate to be recorded in the Official Records of
the County Recorder of Riverside County, California; and (c) the Company shall
cause the Title Company to remove or endorse over the exception to coverage
under the Title Policies represented by the Condition Subsequent.
SECTION 7. NEGATIVE COVENANTS OF THE COMPANY
Until the later of the Expiration Date or payment in full of all amounts
due and owing or payable to the Bank under this Agreement and the other L/C
Documents, unless the Bank otherwise expressly consents in writing:
7.1 Type of Business. The Company will not discontinue or make any
substantial change in the character of its business, as indicated in
Subparagraph (d) of Section 1.2.
7.2 Other Indebtedness. The Company will not create, incur, assume,
guarantee, permit to exist, or otherwise become directly or indirectly liable
for any Indebtedness, except Permitted Indebtedness. Also, the Company will not
dispose, with or without recourse, of any accounts or notes receivable or any
sums due or to become due.
7.3 Liens and Encumbrances. Subject to Subsection 16.1, the Company will
not create, incur, assume or permit to exist any Lien upon or on any of its
property or assets now owned or hereafter acquired in which the Bank has a
security interest pursuant to the Bank Security Documents or any related income
or profits other than (a) Liens for taxes, assessments or governmental charges
not yet due and payable; (b) Liens incurred in the ordinary course of business
in connection with workers' compensation, unemployment insurance or social
security obligations; (c) mechanics', workmen's, materialmen's, landlords',
carriers' or other similar liens arising in the ordinary course of business with
respect to obligations which are not due; and (d) Liens in favor of the Trustee
or the Bank. In this connection, the Company acknowledges that the existence of
junior encumbrances might require consents by junior lienholders to changes in
the construction financing in order to protect the security positions of the
Trustee and the Bank, and would impair the expeditious completion of the
Project, to the detriment of all parties. The Company will not pledge or place
liens upon its accounts receivable or its inventory, or both, in an aggregate
amount exceeding $6,000,000.
7.4 Loans and Investments. The Company will not lend money, make
investments, or extend credit, other than in the ordinary course of its business
as presently conducted.
7.5 Limitation on Contingent Liabilities. The Company will not
guarantee or otherwise become directly or indirectly responsible (including
under
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an agreement to purchase any obligations, stock, assets, goods or services or to
supply or advance any funds, assets, goods or services) for any Indebtedness or
other obligation of any person, except for Permitted Contingent Liabilities.
7.6 Sale of Business; Merger or Consolidation. The Company will not (a)
liquidate, dissolve, merge or consolidate, or begin any proceedings to do so; or
(b) sell, lease, assign or transfer any substantial part of its business or
assets, or any assets (including in sale-leaseback transactions) unless in the
ordinary course of business and the assets included are not necessary for its
business as conducted prior to such transfer.
7.7 Regulations G, T and U. The Company will not use the proceeds of the
Company Loan, directly or indirectly, to purchase or carry any margin stock
(within the meaning of Regulations G, T and U of the Board of Governors of the
Federal Reserve System) or extend credit to others for such purpose.
7.8 Amendment of Company Documents. Unless necessary, in the opinion of
Bond Counsel, to preserve the exemption of the interest on the Bonds from
federal income taxation, the Company will not enter into or consent to any
amendment, termination, modification or other alteration of any of the Company
Documents, or any assignment, transfer, pledge or hypothecation of any of its
rights thereunder.
7.9 Disposition of Project. The Company will neither cause nor permit
(a) any "transfer" (as that term is defined in Section 1.19 of the Second Deed
of Trust) of all or any portion of the Project or any other property granted
under the Second Deed of Trust (collectively, the "Trust Estate"), or (b) any
change in the membership of the Company pursuant to which any one member would
hold 50% or more equity credits in the Company, in either case, without first
receiving the prior written consent of the Bank and obtaining an opinion of Bond
Counsel addressed to the Bank that such transfer shall not adversely affect the
exemption from federal income taxation of interest on the Bonds. Consent by the
Bank to one such transaction shall not be deemed to be a waiver of the Bank's
right to require its separate written consent to future or successive
transactions. The Bank may grant or deny such consent in its sole discretion,
and if such consent is given, any such transferee shall assume all of the
obligations of the transferor under this Agreement and the other Related
Documents and agree to be bound by all provisions contained in all such
documents, and the Company and such transferee shall comply in all other
respects with any requirements set forth in the Related Documents relating to
such transfer. Such assumption shall not, however, release the transferor or any
other party from any liability to the Bank under this Agreement or any other
Related Documents except as otherwise expressly agreed in writing by the Bank.
Section 1.19 of the Second Deed of Trust defines "transfer" as follows:
"As used herein, a 'transfer' of the Trust Estate shall include (i) any
sale, agreement to sell, transfer or conveyance of the Trust Estate, or any
portion thereof or interest therein, whether voluntary, involuntary, by
operation
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of law or otherwise, or the lease of all or any portion of the Premises: (ii)
the leasing of or permitting any other party to use or occupy any portion of the
Premises; (iii) the use of any part of the surface, or subsurface to a depth of
500 feet below the surface, of the Land for the prospecting for, drilling for,
production (including injection and other producing or withdrawal operations),
mining, extraction, storing or removal of any oil, gas or other minerals whether
from the Land or elsewhere; (iv) any transfer by way of security, including the
placing or the permitting of the placing of any mortgage, deed of trust,
assignment of rents or other security device on the Premises or any part thereof
(other than the First Deed of Trust and the First Security Agreement); and (vi)
the sale or offering of direct or indirect interests in Trustor through
syndication of limited partnership interests."
7.10 Amendment of Bylaws. The Company will not amend, or permit
the amendment of, Section 8.08 of its Bylaws and, Marketing Agreement, as
amended May 6, 1982.
SECTION 8. EVENTS OF DEFAULT
Upon written notice to the Company (except for the occurrence of any of
the events described in Subsections 8.1, 8.2, 8.12 and 8.13, as to which no such
notice shall be required), the occurrence of any of the following events shall
be an "Event of Default" hereunder:
8.1 Required Deposits. The Company shall fail to make, when due, any
deposit to the Reimbursement Account required by Subsection 2.3.
8.2 Other Payments. The Company shall fail to pay when due any other
amount due to the Bank under this Agreement or under any of the other L/C
Documents.
8.3 Misrepresentation. Any representation or warranty of the Company,
(a) contained in this Agreement or any of the other L/C Documents, (b) contained
in any certificate delivered in connection with the L/C Documents, or (c) made
to the Bank concerning the financial condition or creditworthiness of the
Company, shall prove to have been false or misleading in any material respect
when made.
8.4 Non-Satisfaction of Conditions to Disbursement. The Company shall
fail to satisfy any applicable condition precedent to the Bank's consent to a
Disbursement, as set forth in Part A of Appendix I (Construction Covenants and
Disbursement Procedures), or else to resolve any such situation to the Bank's
satisfaction, for more than 30 days after written notice from the Bank.
8.5 Injunction. An order or decree shall be entered in any court of
competent jurisdiction enjoining or restraining the development of the Project
or the consummation of the transactions contemplated by this Agreement, which
order or decree shall not be vacated within 30 days after it is entered.
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8.6 Security Documents. There shall occur an "Event of Default," as that
term is defined in any of the Bank Security Documents or in any of the Issuer
Security Documents.
8.7 Indenture. There shall occur an "Event of Default," as that term is
defined in the Indenture.
8.8 Loan Agreement. There shall occur an "Event of Default," as that
term is defined in the Loan Agreement.
8.9 Invalidity. Any payment obligation of the Company under this
Agreement, or under Article IV of the Loan Agreement, shall at any time for any
reason cease to be valid and binding on the Company, or the validity or
enforceability thereof shall be contested or denied by the Company or any
governmental agency or authority.
8.10 Other Indebtedness. The Company shall (a) fail to make any payment
of any Indebtedness either relating to the Project or exceeding $100,000 when
due (whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise) and such failure shall continue after the applicable grace period, if
any, specified in the agreement or instrument relating to such Indebtedness
where the effect of such failure is to accelerate or permit the acceleration of
such Indebtedness, or (b) otherwise breach any agreement or instrument relating
to any Indebtedness either relating to the Project or exceeding $100,000, where
the effect of such breach is to accelerate, or to permit the acceleration of,
the maturity of such Indebtedness.
8.11 Change in Financial Condition. The Company shall become insolvent,
or there shall be a breach of any of the financial covenants contained in
Section 6.15.
8.12 Involuntary Proceedings. Without the application or consent of the
Company, (a) a receiver, trustee, custodian or similar officer shall be
appointed for the Company, or for any substantial part of its property, or (b)
any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt,
dissolution, liquidation, or similar proceedings under the laws of any
jurisdiction shall be instituted (by petition, application, or otherwise)
against the Company; and such appointment or proceedings shall remain
undischarged or undismissed for a period of 60 days.
8.13 Voluntary Proceedings. The Company shall (a) admit in writing its
inability to pay its debts when due, or (b) make an assignment for the benefit
of creditors, or (c) apply for or consent to the appointment of any receiver,
trustee, custodian, or similar officer for the Company, or for any substantial
part of its property, or (d) institute (by petition, application, or otherwise)
or consent to any bankruptcy, insolvency, reorganization, arrangement,
readjustment of debt, dissolution, liquidation, or similar proceedings under the
laws of any jurisdiction against the Company, or (e) approve or adopt any
resolution or otherwise authorize action to approve any of the foregoing.
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8.14 Dissolution. If the Company shall dissolve, or a verified complaint
for involuntary dissolution of the Company shall be filed in accordance with
Section 1800 of the California Corporations Code, or any order, judgment or
decree shall be entered which decrees the dissolution of the Company.
8.15 Judgments. Any final, unappealable and uninsured money judgment or
judgments in the aggregate sum of $50,000 or more shall be rendered against the
Company or its assets, or any writ or warrant of attachment, or similar process
shall be entered or filed against the Company or any of its assets, and such
judgment, writ, warrant or process shall remain unsatisfied, unsettled,
unvacated, unbonded and unstayed for a period of 30 days or in any event later
than five Business Days prior to the date of any proposed sale thereunder.
8.16 Unauthorized Deviations, Defects, or Encroachments. There shall
occur any material deviation from the Project Plans, without the prior written
approval of the Bank, except as specifically authorized in Paragraph B.2 of
Appendix I (Construction Covenants and Disbursement Procedures), or any
workmanship or materials shall appear defective, or there shall appear any
encroachment to which the Bank has not previously consented (collectively, an
"Unauthorized Deviation, Defect or Encroachment"); provided, however, that if
such Unauthorized Deviation, Defect or Encroachment is curable within 30 days
(or such longer period as the Bank shall have expressly approved in writing) and
does not relate, in the reasonable judgment of the Bank, to matters which are of
an emergency nature, it shall not constitute a default if corrective action
satisfactory to the Bank is commenced within five days after written notice from
the Bank, and such Unauthorized Deviation, Defect or Encroachment is in fact
cured within 30 days after such notice (or within such longer period as is
approved in writing by the Bank).
8.17 Work Stoppage. Work on the Project shall cease for 10 or more
consecutive days prior to the Final Project Completion Date without the Bank's
written consent, for causes within the Company's control, except as contemplated
by the approved Construction Schedule.
8.18 Expiration of Permits. The Company shall fail to keep in force and
effect any permit, license, consent or approval which is required or necessary
for the Company to carry on its business, the lack of which would have an
adverse effect on its business, or to construct or operate the Project; or the
Company shall fail to renew any other permit, license, consent, or approval
required under this Agreement within fifteen (15) days after the expiration
thereof.
8.19 ERISA Defaults. The occurrence of any "ERISA Default", as that term
is defined in Section 1 of Appendix II (ERISA Matters).
8.20 Insolvency of General Contractor. H.M.H. Construction shall become
bankrupt or insolvent, or H.M.H. Construction shall withdraw from the
construction of the Project and the Company shall fail to procure a general
construction contract with a new general contractor satisfactory to the Bank
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within 30 days from the occurrence of such bankruptcy, insolvency, or
withdrawal.
8.21 Insurance; Protection of Liens Prohibited Transfers. The Company
shall ail to perform or observe any term, covenant or condition contained in
Subsection 6.2 (relating to the maintenance of insurance), in Subsection 6.8
relating to protection of the Liens of the First and Second Deeds o Trust), or
in Subsection 7.9 (relating to prohibited transfers).
8.22 Breach of Other Covenants. The Company shall fail to perform or
observe any term, covenant or condition contained in this Agreement or in any
other L/C Document, provided that if such failure is not an Event of Default
under any other Subsection of this Section 8, then it shall not constitute an
"Event of Defaults" under this Subsection 8.22 if the Company promptly notifies
the Bank of its intention to cure said default and in fact cures such default
within 30 days; and provided, further, that as to any default under Subsection
6.1 (Maintenance of Existence, Etc.), Subsection 6.4 (Access and Reporting), Sub
section 6.6 (Maintenance of Properties), or Subsection 6.7 (Further Assurances,
if such default is reasonably capable of being cured within an additional 30
days, then a single additional 30-day grace period shall be allowed so long as
the Company shall have acted and shall act continuously and diligently to cure
such default during the initial 30-day period and during such additional grace
period:
SECTION 9. REMEDIES
9.1 Notice to Trustee. Upon the occurrence of an Event of Default, the
Bank's obligation to consent to any further Disbursements shall terminate, and
the Bank shall, at its option, have the right to notify the Trustee of the
occurrence of such Event of Default and to request that the Trustee accelerate
the Company Loan and call all Bonds for redemption in accordance with Section
802 of the Indenture. Upon the occurrence of any Event of Default, whether or
not the Bank notifies the Trustee of such Event of Default and whether or not
the Trustee draws upon the Letter of Credit to redeem the Bonds as a result
thereof, (a) the Bank shall have the option to declare (i) all sums then owing
to the Bank hereunder or under any of the other L/C Documents, plus (ii) a sum
equal to the then Stated Amount of the Letter of Credit (which sum, upon receipt
thereof by the Bank, shall be held by the Bank as collateral security for the
reimbursement of any drawings under the Letter of Credit and the payment of any
other amounts due and payable hereunder or under any of the other L/C Documents
and as collateral security for the Trustee for the benefit of the Bondholders
for the repayment by the Company of principal and interest on the Bonds),
immediately due and payable by the Company to the Bank, without presentment,
demand, protest, or notice of any kind; provided that upon the occurrence of any
Event of Default described in Subsection 8.12 or Subsection 8.13, the
above-described sums shall automatically become immediately due and payable
without the necessity of any such declaration by the Bank; and (b) the Bank
shall have all the rights and remedies provided herein and in the other Related
Documents, including, without limitation, the right to enforce any Liens granted
under this Agreement, and the Bank Security Documents.
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9.2 Completion of Project; Power of Attorney. Upon the occurrence of an
Event of Default, the Bank shall have the right whether or not any foreclosure,
receivership or other proceedings shall have been commenced or completed) to
take possession of the Property and to complete the Project substantially in the
manner contemplated by the Project Plans, and to employ security personnel to
protect the Property and the Project from injury. All sums so expended by the
Bank shall be deemed to have been paid to the Company and secured by the Bank
Security Documents. Effective upon the occurrence of an Event of Default, (a)
the Company hereby assigns to the Bank all of the Company's rights, title and
interests in and to all Project Agreements, Permits and Licenses, provided,
however, that this assignment shall not impose upon the Bank any of the
Company's obligations under such agreements, permits or licenses, in the absence
of an affirmative written assumption of such obligations by the Bank; and (b)
the Company hereby constitutes and appoints the Bank as its true and lawful
attorney-in-fact, with full power of substitution, to complete the Project in
the name of the Company, and hereby empowers the Bank, as said attorney-in-fact,
(i) to use any of the funds of the Company, including any undisbursed portion of
the Company Loan and any funds of the Company which are then held by the Bank,
for the purpose of completing the Project; (ii) to make such additions, changes,
and corrections in the Project Plans as the Bank deems desirable to complete the
Project in an economically sound manner; (iii) to employ any contractors,
subcontractors, agents, architects and inspectors as the Bank deems desirable
for such purposes; (iv) to pay, settle, or compromise all existing bills and
claims which are or may be Liens against the Property or the Project, or as may
be necessary or desirable for the completion of the Project or clearance of
title; (v) to execute all applications and certificates in the name of the
Company as may be required by any of the Project Agreements, Permits and
Licenses; (vi) to prosecute, defend, or settle any or all actions or proceedings
in connection with the Project, and to take such action and require such
performance as the Bank deems necessary in connection with any payment or
performance bond, guaranty of completion or insurance policy; and (vii) to do
any and every other act in connection with the completion of the Project which
the Company might do on its own behalf. This power of attorney shall be deemed
to be a power coupled with an interest, and cannot be revoked.
9.3 Accounts Receivable. Upon the occurrence of an Event of Default, the
Bank shall have the right, to the extent permitted by law, to impound and take
possession of books, records, notes and other documents evidencing the Company's
accounts, accounts receivable and other claims for payment of money, arising in
connection with the Project, to give notice to the obligors thereunder of the
Bank's interest therein, and to make direct collections on such accounts,
accounts receivable and claims.
9.4 Set Off; Waiver of Set Off. Upon the occurrence of an Event of
Default, the Bank may, at any time and from time to time, without notice to the
Company or any other person (any such notice being expressly waived), set off
and appropriate and apply, against and on account of any obligations and
liabilities of the Company to the Bank arising under or connected with this
Agreement and the other L/C Documents, irrespective of whether or not the
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Bank shall have made any demand therefore, and although such obligations and
liabilities may be contingent or unmatured, any and all deposits (general or
special, including but not limited to Indebtedness evidenced by certificates of
deposit, whether matured or unmatured, but not including trust accounts) and any
other Indebtedness at any time held or owing by the Bank to or for the credit or
the account of the Company; provided, however, that the Bank waives any such
right, and any other similar right it may have at law or otherwise, during the
pendency of any bankruptcy, insolvency, reorganization, arrangement,
readjustment of debt, dissolution, liquidation, or similar proceedings against
the Company under the laws of any jurisdiction, to the extent that the exercise
of such rights during the pendency of such proceedings would result in the
Bank's being released, prevented or restrained from or delayed in fulfilling the
Bank's obligation under the Letter of Credit, and provided, further, that the
foregoing waiver agreement by the Bank shall terminate and be of no force and
effect if ▇▇▇▇▇'▇ Investors Service shall have advised the Bank in writing that
the absence of such a waiver would not result in the lowering or suspension by
▇▇▇▇▇'▇ Investors Service of its rating of the Bonds.
9.5 Defaults Under Other Documents. The Bank shall have the right to
cure any default under any of the Related Documents but shall have no obligation
to do so.
9.6 Remedies Cumulative. All remedies of the Bank provided for in this
Agreement are cumulative and shall be in addition to any and all other rights
and remedies available under the Bank Security Documents or any other document
or by law or equity. No exercise by the Bank of any right or remedy shall in any
way constitute a cure or waiver of any Event of Default hereunder, or invalidate
any act done pursuant to any notice of default, or prejudice the Bank in the
exercise of any other right or remedy available to the Bank. No failure on the
part of the Bank to exercise, and no delay in exercising, any right or remedy
shall operate as a waiver or otherwise preclude enforcement of any of its rights
and remedies; nor shall any single or partial exercise of any right or remedy
preclude any further exercise thereof or of any other right or remedy. The Bank
need not resort to any particular right or remedy before exercising or enforcing
any other.
SECTION 10. OTHER ACTIONS BY BANK
The Bank, in addition to its other rights granted by this Agreement or
otherwise, shall have the following rights:
10.1 Right to Advance or Post Funds. In the event of any default under
any of the Related Documents, or if the Bank at any time determines that an
event or condition exists which could endanger the timely completion of the
Project or impede the fulfillment or satisfaction of any condition or term of
this Agreement or any of the other Related Documents, the Bank may cure such
default, or advance funds for the account of the Company to correct such event
or condition, in such manner as the Bank deems proper, without prejudice to the
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Company's rights, if any, to recover such funds from the party to whom paid.
Such advances may be pursuant to such agreements as the Bank deems proper, and
may include agreements to indemnify a title insurer against possible assertion
of lien claims or to pay disputed amounts to contractors if the Company is
unable or unwilling to pay them. All sums so advanced by the Bank to cure any
such default or to correct any such event or condition, or which are agreed to
be paid pursuant to any such agreement, shall be for the account of the Company,
shall be reimbursed to the Bank by the Company within three (3) Business Days
after demand (with interest at the Agreed Rate until date of reimbursement), and
shall be secured (along with such accrued interest) by the Bank Security
Documents. Nothing in this Agreement shall be construed as imposing under any
circumstances any obligation upon the Bank to complete the Project, to cure any
default of the Company under this Agreement or under any of the other Related
Documents, or otherwise to perform any of the Company's obligations hereunder or
thereunder.
10.2 Cure by Disbursement. Upon the occurrence of (a) any Event of
Default or Potential Default curable by the payment of money, or (b) any other
matter described in Subsection 10.1, the Bank, without waiving any other right
the Bank may have against the Company, shall have the right to make such cure by
payment from the Disbursement Account or from any other funds deposited with the
Bank by or on behalf of the Company pursuant to this Agreement.
10.3 Conversion at Election of Bank. At any time the Company fails to
pay to the Bank within 90 days following a Purchase Draw an amount equal to such
Purchase Draw plus accrued interest thereon at the Remarketing Period Interest
Rate to the date of payment, the Bank may elect to convert all of the Bonds then
outstanding to a Fixed Interest Rate, as provided in Section 204 of the
Indenture. Prior to the proposed Conversion Date, the Bank may rescind such
election as provided in Section 204(c) of the Indenture.
SECTION 11. NOTICES
All notices and other communications hereunder shall be in writing and
shall be delivered by hand, by prepaid telegram, or by registered or certified
U.S. mail, return receipt requested (postage prepaid), to the notice addresses
set forth in Subsection 1.2 or to such other addresses as the parties may
provide to one another in accordance with this Section. Such notices and other
communications shall, if sent by mail in accordance with this Section, be deemed
given two (2) Business Days after deposit in the U.S. mail, and if sent by any
other method, shall be effective only if and when received by the addressee.
SECTION 12. INDEMNIFICATION
In addition to its other obligations hereunder, the Company hereby
agrees to indemnify and hold harmless the Bank, its officers, directors,
employees and agents (collectively, the "Indemnitees") from and against any and
all
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claims, damages, losses, liabilities, costs or expenses (including reasonable
fees and expenses of counsel) that the Indemnitees may incur (or that may be
claimed against the Indemnitees by any person) in connection with (a) any breach
by the Company of any representation, warranty or covenant made in or pursuant
to this Agreement; (b) any failure by the Company or the Issuer to comply with
applicable federal and state laws and regulations pertaining to the offer and
sale of the Bonds; or (c) the execution and delivery of, the transfer to a
successor trustee of, or the payment or failure to pay under, the Letter of
Credit; provided, however, that the foregoing provision shall not require the
Company to indemnify the Bank for any claims, damages, losses, liabilities,
costs or expenses to the extent, but only to the extent, caused by (i) the
willful misconduct or gross negligence of the Indemnitees in determining whether
a sight draft or certificate presented under the Letter of Credit substantially
complied with the terms of the Letter of Credit or (ii) the Bank's willful
failure to pay under the Letter of Credit after the presentation to it by the
Trustee or a successor trustee of a sight draft or certificate strictly
complying with the terms of the Letter of Credit.
SECTION 13. LIABILITY OF THE BANK
As to the Bank, the Company assumes all risks of the acts or omissions
of the Trustee and any other Letter of Credit Beneficiary with respect to its
use of the Letter of Credit; provided, however, this assumption is not intended
to, and shall not, preclude the Company from pursuing such rights and remedies
as it may have against the Trustee or any other Letter of Credit Beneficiary at
law or under any other agreement. Neither the Bank nor any of its officers,
directors, employees or agents shall be liable or responsible for: (a) the use
made of the Letter of Credit or for any acts or omissions of the Trustee or any
Letter of Credit Beneficiary; (b) the validity, sufficiency or genuineness of
any documents, or endorsements, even if such documents should in fact prove to
be in any or all respects invalid, insufficient, fraudulent or forged; (c)
payment by the Bank against presentation of documents which do not comply with
the terms of the Letter of Credit, including failure of any documents to bear
adequate reference to the Letter of Credit; or (d) any other circumstances in
making or failing to make payment under the Letter of Credit; provided, however,
the Company shall have a claim against the Bank, and the Bank shall be liable to
the Company, to the extent, but only to the extent, of any direct, as opposed to
consequential, damages suffered by the Company which the Company proves were
caused by acts or omissions of the Bank described in clauses (c)(i) and (c)(ii)
of Section 12. By way of amplification, the Bank may accept documents that
appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary. Subject
to the foregoing, the determination of whether a draft has been presented under
the Letter of Credit prior to the Expiration Date or whether a draft drawn under
the Letter of Credit or any accompanying document or instrument is in proper and
sufficient form shall be made by the Bank in its sole discretion, which
determination shall be conclusive and binding upon the Company. The Company
hereby waives any right to object to any payment made
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under the Letter of Credit against a draft with accompanying documents in the
forms provided for in the Letter of Credit but varying in punctuation,
capitalization, spelling or similar matters of form.
SECTION 14. SUCCESSORS AND ASSIGNS
This Agreement is a continuing obligation and shall be binding upon the
Bank and the Company, and their respective successors, transferees and assigns,
and shall inure to the benefit of and be enforceable by the Bank and the Company
and their respective successors, transferees and assigns; provided, however,
that the Company may not assign all or any part of this Agreement without the
prior written consent of the Bank. The Bank, without the consent of the Company
or any other person, may assign, negotiate, pledge, hypothecate, or grant
participations in this Agreement or in any of its rights and security under this
Agreement and the other L/C Documents, so long as such action (a) does not
adversely affect any rating then borne by the Bonds, or subject them to
redemption, and (b) permits the Company to continue dealing solely with a single
person in connection with this Agreement. The Company shall accord full
recognition to any such assignment, and all rights and remedies of the Bank in
connection with the interest so assigned shall be as fully enforceable by such
assignee as they were by the Bank before such assignment. In connection with any
proposed assignment, the Bank may disclose to the proposed assignee any
information that the Company is required to deliver to the Bank pursuant to this
Agreement. If requested by the Company, the Bank shall provide in connection
with any such assignment an opinion of Bond Counsel to the effect that such
assignment, in and of itself, (1) will not cause interest on the Bonds to be
included in the gross income of the holders thereof for purposes of federal
income taxation and (2) will not constitute an event of default under any of the
Related Documents that would permit acceleration of the obligations of the
Company under the Company Loan or mandatory redemption of the Bonds.
SECTION 15. NO FURTHER COLLATERAL; AGREEMENT TO SHARE EQUALLY WITH
TRUSTEE
So long as there has not occurred and there is not continuing an Event
of Default or Potential Default and the Company remains in possession of the
Project and as the obligor under the Loan Agreement, the Bank will not procure
or require any additional collateral from the Company beyond that contemplated
by this Agreement to secure the obligations of the Company. If an Event of
Default or Potential Default shall occur, the Bank may require or procure
additional collateral from the Company, and such collateral shall be granted at
least equally and ratably to the Trustee in trust for the benefit and security
of the Bondholders and the Issuer, unless the acceptance of such additional
collateral without it being granted at least equally and ratably to the Trustee
would not result in the Bank's being released, prevented, restrained from or
delayed in fulfilling the Bank's obligations under the Letter of Credit;
provided, however, that the requirement that additional collateral be granted at
least
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equally and ratably to the Trustee shall terminate and be of no further force
and effect if ▇▇▇▇▇'▇ Investors Service advises in writing that such acceptance
by the Bank of additional collateral will not result in the lowering or
suspension by ▇▇▇▇▇'▇ Investors Service of its rating of the Bonds.
SECTION 16. MISCELLANEOUS PROVISIONS
16.1 Permitted Contests. The Company shall have the right, before any
delinquency occurs, to contest or object in good faith to any claim, demand,
levy or assessment (other than in respect of Indebtedness or Contractual
Obligations of the Company under any of the Related Documents), by appropriate
legal proceedings which are not prejudicial to the Bank's rights, but this shall
not be deemed or construed as in any way relieving, modifying or providing any
extension of time with respect to the Company's covenant to pay and comply with
any such claim, demand, levy or assessment, unless the Company shall have given
prior written notice to the Bank of the Company's intent to so contest or object
thereto, and unless (i) the Company shall have demonstrated to the Bank's
satisfaction that such legal proceedings shall conclusively operate to prevent
enforcement prior to final determination of such proceedings, and (ii) the
Company shall have furnished such bond, surety, undertaking, or other security
in connection therewith as is requested by and satisfactory to the Bank.
16.2 Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of California, without
regard to the principles of conflicts of laws.
16.3 Survival of Warranties. All agreements, representations and
warranties made in this Agreement and in any related certificates shall survive
the execution and delivery of this Agreement and the issuance and expiration of
the Letter of Credit and the repayment of the Company Loan, and shall continue
until any and all sums payable under this Agreement, and all obligations which
are secured by the Second Deed of Trust, shall have been paid and performed in
full.
16.4 Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions or affecting the validity or
enforceability of such provision in any other jurisdiction.
16.5 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties on separate counterparts, each of which
counterparts, when so executed and delivered, shall be deemed to be an original,
and all of which counterparts, taken together, shall constitute but one and the
same Agreement.
16.6 Time of Essence. Time is of the essence of this Agreement and of
each provision in which time is an element.
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16.7 No Further Credits. The Bank shall not be obligated to issue any
further credits to cure any defaults under the Related Documents or otherwise,
or in any other manner to extend any financial consideration to the Company
except as expressly provided in this Agreement.
16.8 Headings. Section and other headings in this Agreement are for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose.
16.9 Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any one of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitations of, another covenant shall
not avoid the occurrence of an Event of Default or Potential Default if such
action is taken or condition exists.
16.10 Waivers. No waiver or consent under this Agreement shall be
effective unless it is in writing and signed by the party so waiving or
consenting. Each waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was given.
16.11 Substitution of Letter of Credit. The Company may not deliver to
the Trustee a Substitute Letter of Credit (as defined in the Indenture) until
the Company has discharged in full its Payment Obligations to the Bank.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their respective duly authorized officers and
representatives as of the date first above written.
"Bank": SECURITY PACIFIC NATIONAL BANK
By: /s/ [SIGNATURE ILLEGIBLE]
---------------------------
Vice President
"Company": CALAVO GROWERS OF CALIFORNIA
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------
Vice President - Finance
51
APPENDIX I
TO
REIMBURSEMENT AGREEMENT
CONSTRUCTION COVENANTS AND DISBURSEMENT PROCEDURES
Part A: DISBURSEMENTS.
A.1 Bank's Consent to Disbursements by the Trustee. Pursuant to Article
III of the Loan Agreement, Section 304 of the Indenture, and Section 3 of the
Intercreditor Agreement, the Trustee is to make disbursements from the
Construction Fund for the payment or reimbursement of Project Costs only upon
receipt of a Funding Requisition complying with the requirements set forth in
Section 3.3 of the Loan Agreement, duly executed by the Company and accompanied
by the Bank's written consent to such Disbursement. The Company shall complete,
execute, and forward to the Bank its Funding Requisition for each requested
Disbursement, together with a complete set of Payment Request Documents with
respect thereto, as described in Paragraph A.3 of this Appendix I. Provided that
the Company shall have satisfied all of the terms and conditions set forth below
with respect to such Disbursement, the Bank shall promptly forward such Funding
Requisition to the Trustee, together with the Bank's written consent thereto.
The Bank's approval of a Funding Requisition shall not be construed as a
representation by the Bank that it has reviewed, considered, approved, or joined
in any of the representations of the Company contained therein. The Bank shall
not be required to give its consent to more than two Disbursements during each
calendar month.
A.2 Disbursement Method. Each Disbursement from the Construction Fund
for the payment of Project Costs shall be made by the Trustee to the Bank for
the account of the Company, in such manner as the Bank may direct the Trustee.
Upon receipt of such an approved Disbursement from the Trustee, the Bank shall
promptly disburse such funds for the payment of the Project Costs described in
the approved Payment Request Documents for such Disbursement, by depositing such
funds into the Disbursement Account to cover checks drawn on such Disbursement
Account to pay such Project Costs, or to reimburse the Company therefor,
provided, however, that the Bank, at its sole option, may make Disbursements
directly to any contractors, subcontractors, laborers, materialmen, or other
persons providing services or materials to the Project (collectively,
"Claimants") by using the Bank's "Cashier's Check Method of Payment," i.e., by
issuing and delivering to the Company cashier's checks payable to such
Claimants, in accordance with a "Request for Cashier's Checks" which shall be
submitted by the Company and approved by the Bank as part of the Payment Request
Documents for such Disbursement.
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A.3 Conditions to Disbursements. The Bank's consent to any Disbursement
by the Trustee shall be subject to satisfaction of each of the following
conditions precedent:
(a) Representations and Warranties Correct; No Default. As of the date
of such Disbursement, (i) the representations and warranties of the Company
contained in the Company Documents shall be correct as though made on and as of
that date, (ii) no Event of Default shall have occurred and be continuing and no
Potential Default shall exist on such date, and (iii) the Company shall have
performed and satisfied all of the terms and conditions imposed by the Loan
Agreement and the Indenture in connection with the making of such Disbursement
(other than submission to the Trustee of a Funding Requisition therefor approved
by the Bank).
(b) Payment Request Documents. The Company shall have submitted to the
Bank, and the Bank shall have approved, the following documents (collectively,
the "Payment Request Documents") with respect to such Disbursement, each of
which shall be in form and substance satisfactory to the Bank and duly executed
by the appropriate parties:
(i) a certificate, signed by an Authorized Representative of the
Company, confirming the satisfaction of each of the conditions set forth
in Subparagraph A.3(a) of this Appendix I;
(ii) a "Payment Request," in duplicate, in the form of Schedule
A attached hereto or in such other form as the Bank shall from time to
time require, together with a report, certified as true and correct by
an Authorized Representative of the Company, setting forth such details
concerning construction of the Project as the Bank may require,
including without limitation: (A) a detailed breakdown of all Project
Costs, including an itemization of (1) all Project Costs accrued as of
the date of such Payment Request, (2) all Project Costs accrued and
unpaid as of such date, (3) all Project Costs projected to be necessary
to complete the Project, and (4) the application of all past
Disbursements; (B) a current construction progress schedule; (C) the
Company's and the Contractor's cost breakdowns for the Project, itemized
as to trade description and item and, if requested by the Bank, showing
the name of each contractor and subcontractor, and including, without
limitation, such indirect costs as real estate taxes, legal and
accounting fees, insurance, architects' and engineers' fees, loan fees,
interest during construction, and the Contractor's and the Company's
overhead; and (D) all changes from the previous report which are known
or reasonably anticipated by the Company;
(iii) evidence of proper application of all past Disbursements,
including without limitation the following, if required by the Bank: an
unconditional partial waiver of lien, from the Contractor and each
subcontractor, in form and substance satisfactory to the Bank, covering
the full amount of all past Disbursements for direct construction costs
through the date of the most recent Disbursement, and an unconditional
final waiver of
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lien, in form and substance satisfactory to the Bank, from each
subcontractor who, as of the most recent Disbursement, had completed the
work covered by its subcontract, covering the full amount due each such
subcontractor;
(iv) if the Bank is requiring that Disbursements to Claimants be
made by the Bank's Cashier's Check Method of Disbursement, a completed
"Request for Cashier's Checks", in form and substance acceptable to the
Bank;
(v) if requested by the Bank, specific assignments to the Bank
of all Project Agreements, Permits and Licenses for which such specific
assignments shall not have previously been delivered to the Bank,
together with signed consents to such assignments where deemed
appropriate by the Bank;
(vi) if any part of the Disbursement is for site preparation and
grading, a certificate from the soils engineer for the Project that such
work and all grading and site preparation then in process or completed
is in compliance with the recommendations specified in such soils
engineer's soils test report previously delivered to the Bank pursuant
to Exhibit H;
(vii) such title insurance endorsements to the Bond Trustee
Title Policy and the Bank Title Policy as the Bank may require,
including, without limitation, endorsements reflecting the date and the
amount of the requested Disbursement and insuring the continued priority
of the liens of the First Deed of Trust and the Second Deed of Trust
over mechanics' and other liens, subject to no exceptions to title other
than those which have been approved by the Bank;
(viii) if installation of the Project foundations shall have
been completed, (A) an updated survey of such foundations and the
perimeter walls of the buildings to be constructed on the Property,
prepared by a surveyor registered or licensed in the State of
California, and (B) CLTA Endorsement 102.5 (foundation endorsement) to
the Bond Trustee Title Policy and to the Bank Title Policy; and
(ix) such other documents and information as the Bank may
reasonably require, including, without limitation, invoices, purchase
orders and lien releases from all Claimants covering the amount of each
Disbursement thereto.
(c) Delivery of Listed Items. The Bank shall have received and approved
each of the items described in Exhibit H. For the purposes of this Subparagraph
A.3(c), "such date", as used in Exhibit H, shall mean the date of submission of
the Payment Request Documents for such Disbursement.
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(d) Inspection by Bank. The work of construction shall be progressing or
shall have been completed to the Bank's satisfaction, based on the inspection
and findings of the Bank's inspector.
(e) Stored Materials. The Bank shall have the right, in its sole
discretion, to withhold its consent to any Disbursement for materials purchased
or to be purchased but not yet installed or incorporated into the Project
("Stored Materials"). Without limiting the generality of the foregoing, the
Bank, as a condition to its consent to any requested Disbursement relating to
Stored Materials, may require that the Company supply the Bank with the
following:
(i) Evidence satisfactory to the Bank that the Stored Materials
requested are included within the coverage of the insurance policies
required by Subsection 6.2;
(ii) A certificate satisfactory to the Bank from the seller or
fabricator of the Stored Materials that upon payment, ownership of the
Stored Materials will vest in the Company free of liens and claims of
third parties; and
(iii) Evidence satisfactory to the Bank that the Stored
Materials are stored on the Property and adequately protected from theft
and damage, or, if not so stored, (A) evidence that the Stored Materials
are stored in a bonded warehouse or storage yard approved by the Bank,
which warehouse or yard has been notified that the Trustee and the Bank
have a security interest in said Stored Materials, and (B) the original
warehouse receipt.
A.4 Insurance or Condemnation Proceeds.
(a) Conditions. The Bank, in its sole discretion, may require insurance
or condemnation proceeds to be deposited in the Insurance and Condemnation
Proceeds Account of the Revenue Fund established by the Trustee for repair,
restoration or replacement of the Project. Any insurance or condemnation
proceeds on deposit in the Insurance and Condemnation Proceeds Account shall be
held by the Trustee as cash or invested in obligations of a state, territory or
possession of the United States or any political subdivision of the foregoing,
the interest of which is exempt from Federal income taxation pursuant to Section
103(a) of the Internal Revenue Code of 1954, as amended. Disbursements of such
proceeds shall be pursuant to the same procedures as set forth herein with
respect to original construction, but shall be subject to satisfaction of each
of the following additional conditions within a reasonable period after such
insurance or condemnation proceeds are received by the Bank or the Trustee:
(i) Within 30 days after such insurance or condemnation proceeds
are received by the Bank or the Trustee, the Company shall have
submitted to the Bank and the Trustee in writing a certificate stating
that the Company intends to commence restoration of the Project to a
condition substantially the same as the condition of the Project
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immediately prior to the loss to which such insurance or condemnation
proceeds relate, and that such restoration is reasonably expected to be
completed in a timely fashion within six months of the commencement of
construction;
(ii) If the Bank determines, in its sole judgment, that the
amount of available insurance or condemnation proceeds is insufficient
to pay the costs of restoration of the Project, then Company shall
deposit with the Bank, after the Bank's demand therefor, cash in the
amount of such insufficiency as determined by the Bank, for disbursement
prior to disbursement of any insurance or condemnation proceeds;
(iii) The Bank and all applicable governmental authorities shall
have approved the final plans and specifications for restoration of the
Project;
(iv) Company shall have delivered to the Bank (A) a budget of
all costs of restoration of the Project (which, upon approval by the
Bank, shall be the "Approved Budget" hereunder), (B) a Construction
Schedule for the restoration of the Project, and (C) a construction
contract for the restoration work in form and content, and with a
contractor, acceptable to the Bank;
(v) The Bank shall have determined that after the restoration
work is completed (A) the value of the Project, as determined by the
Bank in its sole discretion, will be not less than the original
appraised value of the Project approved by the Bank, and (B) the Company
will have income sufficient to pay all operating expenses and debt
service;
(vi) All of the conditions to Disbursements specified herein as
applicable to the original construction of the Project shall have been
met; and
(vii) If the insurance or condemnation proceeds in question are
in excess of 25% of the then-Stated Amount of the Letter of Credit, the
Bank shall have elected, in its sole discretion, not to require that the
amount of such insurance or condemnation proceeds be applied to the
prepayment of the Company Loan in accordance with Section 4.6(b) of the
Loan Agreement.
(b) Redemption of Bonds. If (i) the Company shall fail to satisfy in a
timely manner the above-described conditions to the application of such
insurance or condemnation proceeds to the restoration of the Project, or (ii)
the insurance or condemnation proceeds in question are in excess of 25% of the
then stated Amount of the Letter of Credit, then the Bank shall have the right,
in its sole discretion, to require that the amount of all insurance or
condemnation proceeds be applied to the prepayment of the Company Loan in
accordance with Section 4.6(b) of the Loan Agreement. Notwithstanding anything
to the contrary contained in the Company Documents, in the event that the Bank
elects to
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require that insurance or condemnation proceeds be applied to prepay the Company
Loan, or in the event that the Company elects to apply such proceeds to such
prepayment, the Company shall have no obligation to restore the Project to the
condition of the Project immediately prior to the loss to which such proceeds
relate.
Part B: CONSTRUCTION OF THE IMPROVEMENTS
B.1 Construction Period.
The Company shall commence construction of the Project on or before the
Required Commencement Date and shall cause such construction to continue with
diligence and continuity in compliance with the Project Plans and the
Construction Schedule in order that the Project shall be "completed" on or
before the Required Completion Date, provided, however, that the Required
Completion Date may be extended for a period equal to proven delays caused by
fire, earthquake or other acts of God, acts of public enemies, riot,
insurrection, governmental regulation of the sale of materials and supplies or
the transportation thereof, strikes directly affecting the work of construction
or shortages of material or labor resulting directly from governmental control
or diversion, but in no event shall the Required Completion Date be extended for
such causes for more than a total of 45 days unless the Bank otherwise consents.
As used herein, the Project shall be deemed "completed" on the date that all of
the following conditions have been satisfied (the "Final Completion Date"):
(i) The Project shall have been completed in accordance with the
Project Plans and all Legal Requirements, and the Company shall have
furnished to the Bank, at the Company's expense, a standard AIA form of
Certificate of Project Completion, signed by the Project Architect,
certifying that the Project has been completed in a good and workmanlike
manner and in accordance with the Project Plans;
(ii) A valid notice of completion shall have been recorded and
the applicable lien periods shall have expired, or, in lieu thereof, the
Bank shall have received and approved final lien waivers and releases,
in form and substance satisfactory to the Bank, from all contractors,
subcontractors, laborers and materialmen employed or furnishing
materials in connection with the construction of the Project;
(iii) All claims of lien and stop notices that may have been
recorded or notice thereof served on the Bank, the Issuer or the Trustee
shall have either been paid in full and released or the Company shall
have posted a surety bond sufficient to discharge the same;
(iv) The Company shall, at its expense, have delivered or caused
the Title Company to deliver to the Bank and the Trustee the reissued
Bond Trustee Title Policy and the reissued Bank Title Policy, as
described in Exhibit H, which policies shall show no exceptions to title
not
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then or previously approved by the Bank, and shall contain such
endorsements previously attached to said Policies and such other
endorsements as the Bank shall require, including, without limitation,
CLTA endorsements 100 and 102.5;
(v) The Company shall have delivered or caused to be delivered
to the Bank a complete set of "as built" working drawings, as well as a
copy of the "as-built" Survey prepared in connection with the reissuance
of the Bond Trustee Title Policy and the Bank Title Policy;
(vi) The Bank shall have received satisfactory evidence that no
Uniform Commercial Code financing statements or fixture filings are
recorded or filed in the Office of the California Secretary of State (or
in the Office of the Secretary of State of the state in which the
Company's principal business office is located, if other than
California), or in the Official Records of the County, against the
Company or the Company's interest in the Property or the Project, or
which purport to cover any collateral described in the Second Security
Agreement, except those which may have been filed in favor of the Bank
and the Issuer or the Trustee in connection herewith;
(vii) The Bank shall have received appropriate approvals from
(A) all governmental authorities regarding completion of the Project,
which approvals shall be evidenced by an irrevocable certificate for the
permanent occupancy thereof to the extent such approval is a condition
to the lawful use and occupancy of the Project; (B) the local board of
fire underwriters or its equivalent; and (C) all other governmental
authorities having jurisdiction over the contemplated uses, operation
and occupancy of the Project;
(viii) The Company shall have submitted to the Bank copies of
all Project Agreements, Permits, and Licenses, and all insurance
policies or certificates required under Subsection 6.2, to the extent
not previously delivered to the Bank; and
(ix) the Company shall have executed and delivered to the Bank
three duplicate originals of a Completion Certificate (as defined in the
Loan Agreement).
B.2 Approval of Changes in Project Agreements and Approved Budget.
(a) The Company shall strictly enforce all contracts and agreements
included in the Project Agreements, Permits and Licenses and shall not agree to
any material Change Order or any changes in the Approved Budget, except pursuant
to written Change Order and in accordance with this Paragraph B.2. Change Orders
which would result in a material change in the Project Plans, the Construction
Schedule or the General Contract (as determined by the Bank in its sole
discretion), or which (i) would increase or decrease Project Costs
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by more than the Change Order Individual Approval Amount in the case of an
individual Change Order, or (ii) would cause the aggregate of all Change Orders
(whether proposed or executed) which have not been approved in writing by the
Bank to exceed the Change Order Aggregate Approval Amount, shall be submitted to
the Bank for its prior written approval on a form acceptable to the Bank,
accompanied by a copy of the contract to which such Change Order relates. Any
such Change Order must, prior to being effective, be duly approved by the Bank,
the Contractor, the Project Architect, the Bank's inspector, and such other
persons as the Bank requires. Notwithstanding the foregoing, the Project Plans
shall not be modified, amended or supplemented in any way which would (A)
detract from the scope or value of the Project or (B) violate any of the Related
Documents.
(b) The Company acknowledges that the process of obtaining the
information and confirmations needed to put the Bank in a position to approve
Change Orders may cause delays, and the Company consents to reasonable delays
and agrees to cooperate diligently with the Bank in the gathering of the
information required. In addition, the Company acknowledges and agrees that the
Bank is under no duty to review, advise or inform the Company of, and the Bank's
approval or disapproval shall not constitute a warranty or representation about,
the quality or suitability of the Project Plans or any modification, amendment
or supplement thereto. All contracts relating to the Project shall, to the
extent reasonably possible, contain provisions implementing the provisions of
this Paragraph B.2.
B.3 Purchase of Materials Under Conditional Sales Contract. Except as
expressly authorized by the Bank in writing, no materials, equipment, fixtures
or any other part of the Project, or articles of personal property placed in the
Project, shall be purchased, installed or affixed under any security agreement
or other arrangements however denominated whereby the right is reserved or
accrues to anyone to remove or to repossess any such item or to consider them
personal property after their incorporation in the work of construction or
whereby any person other than the Bank (and, so long as the Trustee retains an
interest in the Project as trustee, the Trustee) reserves, acquires or creates a
lien upon or security interest in such items; provided, However, that the
Company may utilize leased construction equipment in connection with the
construction of the Project.
B.4 Inspection.
(a) The Bank and its agents and representatives shall have the right:
(i) of free entry and access to the Project and to all sites away from the
Project where materials that are to be incorporated into the Project are stored;
(ii) at the Company's expense, to inspect all work done, labor performed and
materials furnished for use in the Project; (iii) to directly contact or
otherwise communicate with the Contractor and other Claimant to verify any
matters disclosed in any Payment Request Documents submitted to the Bank; and
(iv) to examine, copy and make extracts of, all books, records, accounting data,
subcontracts and other documents pertaining to the Company or the Project and
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all contractors and subcontractors supplying goods or services in connection
with the construction of the Project. The Company shall cooperate with and shall
cause the Contractor and all subcontractors to cooperate with the Bank and its
agents and representatives. Said books, records, accounting data, subcontracts
and documents shall be made available to the Bank promptly upon written demand
therefor. The Bank shall use its agents and representatives in Riverside,
California, to inspect the Project. The Company shall require or cause its
contractors to require that all contracts relating to the Project contain an
acknowledgment of the foregoing inspection rights, except where such rights have
been waived by the Bank in writing.
(b) The Company acknowledges that the Bank is under no duty to
supervise or to inspect the work of construction, the labor performed therefor,
the materials used therein or any books and records. The Company agrees that any
inspections by the Bank are for the sole purpose of preserving the Bank's rights
hereunder and that the Company is not entitled to rely upon the same with
respect to materials, workmanship, compliance with the Project Plans or
otherwise. The Company intends and agrees to conduct its own investigations and
inspections of the construction, the labor performed and materials supplied to
determine that the quality of the Project and all other requirements of the
construction are being performed in a manner satisfactory to the Company. The
Company agrees to immediately notify the Bank, in writing, should the same be in
any manner unsatisfactory. A failure to inspect the construction of the Project,
any part thereof or any books and records relating thereto, shall not constitute
a waiver of any of the Bank's rights hereunder. Inspection not followed by
notice of default shall not constitute a waiver of any default then existing;
nor shall it constitute an acknowledgment that there has been or will be
compliance with the Project Plans or that the construction is free from
defective materials or workmanship.
B.5 Protection Against Claims.
(a) The Company shall promptly discharge or cause to be
discharged any mechanics' or materialmen's liens or claims of lien filed or
otherwise asserted against the Property, the Project or any funds due the
Contractor and any proceedings for the enforcement thereof and shall promptly
discharge or cause to be discharged any stop notices received by the Bank the
Issuer, or the Trustee; provided, however, that so long as no proceedings shall
have been commenced for the enforcement of such claims or liens, the Company
shall have the right to contest in good faith and with reasonable diligence the
validity of any such liens or claims upon furnishing to the Title Company such
security or indemnity as the latter may require to induce it to issue its Title
Policies, or an interim endorsement thereto, insuring against all such claims or
liens and, provided further, that the Bank shall not be required to consent to
any further Disbursements until all such mechanics' or materialmen's liens or
claims of lien have been so insured against by the Title Company to the Bank's
satisfaction. In the case of stop notices, the Company shall have the right to
contest, in good faith and with reasonable diligence, the validity of any stop
notice, provided that the Company shall immediately file with the Bank and the
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Trustee a bond in the form and amount required by law in order to release such
stop notice. The Bank shall have no obligation to consent to any further
Disbursements until all stop notices have been fully released or discharged.
(b) If (i) the Company fails promptly to discharge or contest
liens, claims of lien or stop notices and provide the security or indemnity in
the manner provided in clause (a) above, or (ii) after having complied with the
provisions of clause (a) above there is an adverse conclusion to any such
contest and the Company does not cause any final judgment or decree to be
immediately satisfied and the lien or stop notice to be discharged, then the
Bank may, but shall not be required to, procure the release and discharge of any
such lien or stop notice and any judgment or decree thereon, and in furtherance
thereof may, in its sole discretion, effect any settlement or compromise or
furnish any security or indemnity as may be required by the Title Company. All
amounts expended by the Bank in connection with the provisions of this
Subparagraph B.5(b) shall, within three (3) Business Days after demand therefor,
be repaid by the Company, together with interest thereon at the Agreed Rate from
the date of such expenditure until the Bank has been repaid and, until paid,
said sums shall be secured by the Bank Security Documents. In settling,
compromising or arranging for the discharge of any liens or stop notices under
this Subparagraph B.5(b), the Bank shall not be required to establish or confirm
the validity or amount of the lien or stop notice.
(c) The Company will designate the Bank and the Trustee as the
"Construction Lender" on any application for building permits for the Project in
accordance with California Civil Code Section 3097(i).
B.6 Conformity with Project Plans. The Company agrees to
construct the Project in conformity in all material respects with the Project
Plans and the recommendations contained in the approved soils report for the
Project. If construction of the Project is not in conformity with the Project
Plans and such recommendations in any material respect, or if any materials or
workmanship on the Project shall appear to the Bank to be defective, or in the
event of any encroachment to which the Bank shall not have previously consented,
the Bank, in addition to its other rights and remedies, shall have the right (a)
to direct that the Company stop the work (or such portion thereof as the Bank
deems necessary) and repair, reconstruct or correct such matter in accordance
with the Project Plans and such recommendations, and (b) to withhold its consent
to all further Disbursements until the work is in satisfactory compliance with
the Project Plans and such recommendations, and any such defect or encroachment
is eliminated. After the issuance of any such direction by the Bank, no further
work, except work to correct the defect or encroachment, shall be done on the
Project without the prior written consent of the Bank until the work is in
satisfactory compliance with the Project Plans and such recommendations. Upon
notice from the Bank to the Company, or the Company's discovery irrespective of
such notice, that the work is not in conformity with the Project Plans and such
recommendations, the Company shall commence correcting the deviation, as
promptly as is practicable and in any event within five days after the notice,
and shall prosecute such work diligently to completion, which in no event shall
be
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later than 30 days after such notice or discovery unless the Company shall
provide written notice to the Bank that the correction shall take longer and the
Bank shall consent thereto. If corrective action satisfactory to the Bank is not
commenced within five days after written demand therefor by the Bank, the Bank
shall have the right (but not the obligation or the duty) to undertake such
action at the Company's expense. Furthermore, if the Bank determines that the
corrective work is not proceeding satisfactorily, the Bank shall have the right
(but not the obligation or the duty), upon not less than five days' notice to
the Company, to take over such corrective work itself and prosecute it to
completion at the Company's expense.
B.7 Encroachments. Except for off-site improvements designated in
the Project Plans, the Company agrees that the Project shall be constructed
entirely within the lot lines of the Property and will not encroach upon any
easements, right of way, any other real estate, building lines or set-back
requirements. The Company will furnish, from time to time upon demand,
satisfactory evidence of compliance with the requirements of this Paragraph B.7.
B.8 Warranties. Upon request of the Bank, the Company shall
furnish or otherwise make available to the Bank copies of all warranties and
guaranties received from any laborer or supplier furnishing labor, materials,
equipment, fixtures or furnishings in connection with the Project.
B.9 Authority to File Notices. The Company irrevocably appoints,
designates, and authorizes the Bank as its agent (said agency being coupled with
an interest) to file for record any notice of completion, cessation of labor, or
any other notice that the Bank deems necessary or desirable to protect its
rights and interests hereunder or under any of the other Related Documents.
B.10 Signs. The Company shall erect a sign provided by the Bank
on the Property in a conspicuous location indicating that construction financing
is being secured by the Bank, which sign shall comply with all applicable zoning
ordinances and restrictive covenants. The Bank shall have the right to enter
onto the Property and to post such other signs and notices as the Bank deems
necessary or desirable to protect its rights and interests in the Project.
B.11 Third-Party Consultants. After notice to the Company, the
Bank may hire such third-party consultants as it deems necessary, the costs of
which shall be paid by the Company in accordance with Subsection 2.6, to provide
the following services: (a) to review the Project Plans; (b) to review the final
construction cost breakdown and the Construction Schedule; (c) to conduct
compliance inspections with respect to the progress of construction of the
Project and to review each element of any request for Disbursement submitted by
the Company; and (d) to perform such other services as may from time to time, be
required by the Bank in connection with the administration of the transactions
contemplated hereby.
B.12 Disclaimer by the Bank. The Bank shall not be liable to any
contractor, subcontractor, supplier, laborer, architect, engineer, or any other
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person for services performed or materials supplied in connection with the
Project, or for any debts or claims accruing in favor of any such person against
the Company or others or against the Property or the Project. The Company is not
and shall not be an agent of the Bank for any purpose. The Bank is not a joint
venture partner with the Company or with any constituent partner or shareholder,
as the case may be, of the Company in any manner whatsoever. Prior to default by
the Company under this Agreement and the exercise by the Bank of the remedies
granted herein, the Bank shall not be deemed to be in privity of contract with
any contractor, subcontractor, or provider of services to the Project, nor shall
any payment of funds directly to any such person be deemed to create any third
party beneficiary status or recognition of same by the Bank. Approvals granted
by the Bank for any matter covered by this Agreement shall be narrowly construed
to cover only the parties and facts identified in any written approval, and
shall be solely for the benefit of the Company.
B.13 Commissions and Brokerage Fee. The Company shall pay any and
all valid claims for any commission, broker's or finder's fee, or similar
charges in connection with the transactions contemplated hereby, and shall
indemnify and hold the Bank harmless from and against any and all claims,
whether or not valid, for any such commissions, fees or charges.
B.14 Completion of Construction. For purposes of subdivision (6)
of Section 9313 of the California Commercial Code, "completion of the
construction" shall not be deemed to occur prior to completion of all work, and
installation or incorporation into the Improvements of all materials, for which
Disbursements are made hereunder.
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SCHEDULE A
[LOGO]
SECURITY PACIFIC NATIONAL BANK
PAYMENT REQUEST
BORROWER DISBURSEMENT NO. DATE
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LOCATION OFFICE
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ESTIMATED
ITEM CONSTRUCTION PREVIOUSLY TOTAL
NO. ITEM COST EARNED THIS REQUEST EARNED UNDISBURSED
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TOTAL AMOUNTS...$ $ $ $ $
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64
APPENDIX II
TO
REIMBURSEMENT AGREEMENT
ERISA MATTERS
Section 1: Definitions. (a) As used in this Appendix, the
following terms shall have the indicated meanings:
"ERISA Affiliate" of a person means any trade or business
(whether or not incorporated) that is a member of a group of which such person
is a member and that is under common control with such person within the meaning
of the regulations promulgated under Section 414 of the Internal Revenue Code.
"ERISA Default" means the occurrence of any of the following
events: (a) any Pension Plan maintained by the Company or any of its ERISA
Affiliates shall be terminated within the meaning of Title IV of ERISA, or a
trustee shall be appointed by an appropriate United States district court to
administer any Pension Plan, or the PBGC shall institute proceedings to
terminate any Pension Plan or to appoint a trustee to administer any Pension
Plan if as of the date thereof the Company's liability or any such ERISA
Affiliate's liability (after giving effect to the tax consequences thereof) to
the PBGC for unfunded guaranteed vested benefits under the Pension Plans exceeds
the then current value of assets accumulated in such Pension Plan by more than
$50,000 (or in the case of a termination involving the Company or any of its
ERISA Affiliates as a "substantial employer" (as defined in Section 4001(a)(2)
of ERISA) the withdrawing employer's proportionate share of such excess shall
exceed such amount); or (b) the Company or any of its ERISA Affiliates as
employer under a Multiemployer Plan shall have made a complete or partial
withdrawal from such Multiemployer Plan and the plan sponsor of such
Multiemployer Plan shall have notified such withdrawing employer that such
employer has incurred a withdrawal liability in an annual amount exceeding
$50,000.
"Multiemployer Plan" means a "multiemployer plan" (as defined in
Section 4001(a)(3) of ERISA) maintained for employees of the Company or any
ERISA Affiliate of the Company.
"PBGC" means the Pension Benefit Guarantee Corporation or any
successor established under ERISA.
"Pension Plan" means any employee plan subject to the provisions
of Title IV of ERISA and maintained for employees of the Company or any ERISA
Affiliate of the Company, other than a Multiemployer Plan.
"Termination Event" means (a) a "Reportable Event" described in
Section 4043 of ERISA and related regulations (other than a "Reportable Event"
not subject to the provision for 30-day notice to the PBGC under such
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regulations), or (b) the withdrawal of the Company or any of its ERISA
Affiliates from a Pension Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA, or (c) the filing of a
notice of intent to terminate a Pension Plan or the treatment of a Pension Plan
amendment as a termination under Section 4041 or ERISA, or (d) the institution
of proceedings to terminate a Pension Plan by the PBGC, or (e) any other event
or condition that might constitute grounds under Section 4042 of ERISA for the
termination, or the appointment of trustee to administer, any Pension Plan.
"Unfunded Liabilities" means, with respect to any Pension Plan,
the excess of the current value of the Pension Plan's benefits guaranteed under
ERISA over the current value of the Pension Plan's assets allocable to such
benefits.
(b) As used in this Appendix, the term "accumulated funding
deficiency" has the meaning specified in Section 302 of ERISA and Section 412 of
the Internal Revenue Code, the term "accrued benefit" has the meaning specified
in Section 3 of ERISA and the term "current value" has the meaning specified in
Section 4062(b)(1)(A) of ERISA.
Section 2: Representations and Warranties. In order to induce the
Bank to enter into this Agreement and to issue the Letter of Credit, the Company
represents and warrants to the Bank that as of the date hereof and as of the
Date of Issuance, the Company and each of its ERISA Affiliates is and will be in
compliance in all material respects with the applicable provisions of ERISA and
the regulations and published interpretations thereunder; no Termination Event
has occurred or is reasonably expected to occur with respect to any Pension
Plan; there is no Unfunded Liability with respect to any Pension Plan; neither
the Company nor any of its ERISA Affiliates makes any contribution to any
Multiemployer Plan and has withdrawn from any such Multiemployer Plan on or
after September 26, 1980.
Section 3: Covenants of Company. Until the later of the
Expiration Date or payment in full of all amounts due and owing or payable to
the Bank under this Agreement and the other L/C Documents:
3.1 Termination Events and Prohibited Transactions. Promptly upon
becoming aware of the occurrence of any (i) Termination Event, or (ii)
"prohibited transaction," as such term is defined in Section 4975 of the
Internal Revenue Code, in connection with any Pension Plan or any trust created
thereunder, the Company shall give written notice to the Bank specifying the
nature thereof, and, when known, any action taken or threatened by the Internal
Revenue Service or the PBGC with respect thereto;
3.2 Other ERISA Notices. Upon request by the Bank, the Company
shall furnish the Bank with copies of (a) all notices received by the Company or
any of its ERISA Affiliates of the PBGC's intent to terminate any Pension Plan;
(b) each Schedule B (Actuarial Information) to the annual report (Form 5500
Series) filed by the Company or any of its ERISA Affiliates with the Internal
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66
Revenue Service with respect to each Pension Plan; and (c) all notices received
by the Company or any of its ERISA Affiliates from a Multiemployer Plan sponsor
concerning the imposition or amount of withdrawal liability pursuant to Section
4202 of ERISA; and
3.3 Negative Covenants. The Company will not, and will not permit
any of its ERISA Affiliates to (a) engage in any transaction in connection with
which the Company or any of its ERISA Affiliates could be subject to either a
civil penalty assessed pursuant to Section 502(i) of ERISA or a tax imposed by
Section 4975 of the Internal Revenue Code, in either case in an amount in excess
of $100,000; (b) fail to make full payment when due of all amounts which, under
the provisions of any Pension Plan, the Company or any of its ERISA Affiliates
is required to pay as contributions thereto, or permit to exist any accumulated
funding deficiency, whether or not waived, with respect to any Pension Plan in
an aggregate amount greater than $250,000; (c) permit the current value of all
vested benefits under all Pension Plans to exceed value of the assets of such
Pension Plans (excluding Pension Plans with assets greater than vested benefits)
allocable to such vested benefits by more than $250,000; or (d) fail to make any
payments in an aggregate amount greater than $250,000 to any Multiemployer Plan
that the Company or any of its ERISA Affiliates may be required to make under
any agreement relating to such Multiemployer Plan, or any law pertaining
thereto.
3
67
EXHIBIT A
SECURITY PACIFIC NATIONAL BANK
IRREVOCABLE DIRECT DRAW LETTER OF CREDIT
September 5, 1985
Letter of Credit No. 100-0092
First Interstate Bank of California
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department (W10-2)
Ladies and Gentlemen:
At the request and for the account of our customer, CALAVO
GROWERS OF CALIFORNIA, a California corporation, we (the "Bank") hereby
establish in your favor this Irrevocable Direct Draw Letter of Credit ("Letter
of Credit"). This Letter of Credit is issued to you as trustee (the "Trustee")
under that certain Indenture of Trust dated as of SEPTEMBER 1, 1985 (the
"Indenture"), for the benefit of the holders of the $4,200,000 VARIABLE RATE
DEMAND INDUSTRIAL DEVELOPMENT REVENUE BONDS (CALAVO GROWERS OF CALIFORNIA
PROJECT) (the "Bonds") issued by RIVERSIDE COUNTY INDUSTRIAL DEVELOPMENT
AUTHORITY (the "Issuer") pursuant to the Indenture. Subject to the terms and
conditions herein, this Letter of Credit authorizes you to draw on us an amount
not exceeding FOUR MILLION, TWO HUNDRED SIXTY-SEVEN THOUSAND, SIX HUNDRED
SIXTY-ONE United States Dollars (US $4,267,661) (the "Stated Amount"), of which
$4,200,000 shall be with respect to the principal of the Bonds, and $67,661
shall be with respect to 49 days' accrued interest on the Bonds at a rate of 12%
per annum.
Subject to the other provisions of this Letter of Credit, you or
any duly authorized successor Trustee may obtain the funds available under this
Letter of Credit by presentment to us of your sight draft or drafts drawn on
Security Pacific National Bank, Los Angeles, California. Each draft presented to
us must be accompanied by your certification substantially in the form of one or
more of the Annexes described below, as may be applicable to the type of drawing
you are making. You must comply with all of the instructions in brackets in
preparing each such certification.
1. Annex A (Periodic Interest Demand With Reinstatement Request).
If you are demanding funds with respect to a scheduled interest payment
on the Bonds (other than Company Bonds) in accordance with the
Indenture, and such amount is to be reinstated immediately following the
A-1
68
drawing, your draft or drafts should be accompanied by your Annex A
certification.
2. Annex B (Principal and Interest Demand with Reinstatement
Request). If you demanding funds with respect to the payment of
principal and interest in connection with a purchase of Bonds (other
than Company Bonds) in accordance with Section 1302 of the indenture,
and such amount is to be reinstated upon our being reimbursed for such
drawing, your draft or drafts should be accompanied by your Annex B
certification.
3. Annex C (Principal and Interest Demand Without Reinstatement
Request). If you are demanding funds with respect to the payment of
principal and interest on the Bonds (other than Company Bonds) in
connection with a purchase of Bonds in accordance with Section 1301 the
Indenture, or a partial redemption of Bonds in accordance with the
Indenture, which amount is not to be reinstated following the drawing,
your draft or drafts should be accompanied by your Annex C
certification.
4. Annex D (Final Drawing). Any draft constituting your final
drawing under-this Letter o Credit must be accompanied by your Annex D
certification. Only one draft accompanied by an Annex D certification
may be presented for payment against this Letter of Credit; upon any
such presentation, no further draft may be drawn and presented
hereunder.
Your sight draft accompanied by your Annex A, B, C, or D
certification and presented in full compliance with this Letter of Credit at or
before 10:00 a.m., Los Angeles time (hereinafter referred to as "Local Time"),
on a Business Day (as defined below), will be honored by our payment to you or
your designee of the draft amount in immediately available funds, no later than
10:00 a.m., Local Time, on the next following Business Day. If we receive your
draft and the required annex(es) in full compliance with the terms and
conditions of this Letter of Credit after 10:00 a.m., Local Time, on a Business
Day, we shall honor your demand for payment no later than 10:00 a.m., Local
Time, on the second following Business Day.
Each draft presented for payment against this Letter of Credit
and each accompanying certification must be dated the date of its presentation
to us, and may be presented only on a Business Day. As used in this Letter of
Credit, "Business Day" shall mean any day other than a Saturday, Sunday, legal
holiday or a day on which banking institutions in Los Angeles, California, or in
the city in which the principal corporate trust office of the Trustee is located
are authorized or required to close. Drafts must be marked conspicuously "Drawn
under Security Pacific National Bank Irrevocable Direct Draw Letter of Credit
No. 100-0092." The certifications you are required to submit to us along with
your draft or drafts should be prepared either (i) in the form of a letter on
your letterhead signed by your officer or (ii) in the form of a facsimile copy
of such a letter sent by one of your officers to the following number, as
applicable:
Telecopier No. (▇▇▇) ▇▇▇-▇▇▇▇
A-2
69
Other than the foregoing provisions for communication by facsimile copy,
communications with respect to this Letter of Credit shall be in writing and
shall be addressed to us at Security Pacific National Bank, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: World Corporate Group,
Corporate Note Department (H31-5), specifically referring to the number and
date of this Letter of Credit.
If a demand for payment made by you hereunder does not, in any
instance, conform to the terms and conditions of this Letter of Credit, we shall
give you prompt notice that the purported negotiation was not effected in
accordance with this Letter of Credit, stating the reasons therefor and that we
are holding any documents at your disposal or are returning them to you, as we
may elect. Upon being notified that the purported negotiation was not effected
in conformity with this Letter of Credit, you may attempt to correct any such
nonconforming demand for payment if, and to the extent that, you as Trustee are
entitled (without regard to the provisions of this sentence) and able to do so.
Drafts honored by us under this Letter of Credit shall not exceed
the Stated Amount available to you under this Letter of Credit, as such amount
may vary from time to time. Each draft honored by us will reduce the Stated
Amount available under this Letter of Credit. However, in the case of a draft or
drafts accompanied by your certification substantially in the form of Annex A
and presented in full compliance with the terms and conditions of this Letter of
Credit, the Stated Amount of this Letter of Credit shall, on the date each draft
is honored by us, automatically be reinstated by us, by an amount equal to the
amount of that drawing; after such reinstatement, the Stated Amount of this
Letter of Credit shall be the same as it was immediately prior to such drawing.
Upon our being reimbursed for the amount of any draft accompanied by your
certification substantially in the form of Annex B hereto honored by us, the
Stated Amount of this Letter of Credit shall be reinstated by us, by an amount
equal to the amount of that drawing; after such reinstatement, the Stated Amount
of the Letter of Credit shall be the same as it was immediately prior to such
drawing.
By paying you an amount demanded in accordance with this Letter
of Credit, we make no representation as to the correctness of the amount
demanded or your calculations and representations on the certificates required
of you by this Letter of Credit.
This Letter of Credit shall expire on the earliest of (i)
September 15, 1995, (ii) when any draft accompanied by your certification
substantially in the form of Annex D to this Letter of Credit is honored and
paid by us, (iii) the first Business Day immediately following the conversion of
the Bonds to a fixed interest rate, or (iv) the day on which this Letter of
Credit is surrendered by the Trustee to the Bank, accompanied by a certificate
substantially in the form of Annex F to this Letter of Credit.
A-3
70
This Letter of Credit shall be governed by and construed in
accordance with the Uniform Customs and Practice for Documentary Credits (1983
Revisions), International Chamber of Commerce Publication 400, and, to the
extent not inconsistent therewith, the laws of the State of California.
This Letter of Credit sets forth in full our undertaking, and
such undertaking shall not in any way be modified, amended, amplified or limited
by reference to any document, instrument or agreement referred to herein
(including, without limitation, the Bonds), except only the Annexes and drafts
referred to herein; and any such reference shall not be deemed to incorporate
herein by reference any document, instrument or agreement except for such
Annexes and drafts.
Anything to the contrary in Article 45 of the Uniform Customs and
Practices notwithstanding, this Letter of Credit is intended to remain in full
force and effect until it expires in accordance with its terms. Any failure by
you or any successor Trustee to draw upon this Letter of Credit with respect to
a scheduled interest payment on the Bonds in accordance with the terms and
conditions of the Indenture shall not cause this Letter of Credit to be
unavailable for any future drawing in accordance with the terms and conditions
of the Indenture.
Anything to the contrary in Article 54 of the Uniform Customs and
Practices notwithstanding, this Letter of Credit is transferable any number of
times, but only in the amount of the full unutilized balance hereof and not in
part. Transfer may be made to any person or entity whom you or any transferee
hereunder designate as a successor trustee under the Indenture. Transfer of the
available drawing under this Letter of Credit to such transferee shall be
effected by the presentation to us of this Letter of Credit accompanied by a
request designating your successor in the form of Annex E (Transfer Demand)
attached hereto, with the signature of the appropriate officer signing on your
behalf guaranteed by another one of your officers, and the payment of One
Thousand Dollars ($1,000) as a transfer fee. Upon presentation and payment, we
shall forthwith effect a transfer of this Letter of Credit to your designated
transferee.
Very truly yours,
SECURITY PACIFIC NATIONAL BANK
A-4
71
Annex A (Periodic Interest Demand
With Reinstatement Request
SECURITY PACIFIC NATIONAL BANK
Irrevocable Letter of Credit No. 100-00092
SECURITY PACIFIC NATIONAL BANK
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTENTION: WORLD CORPORATE GROUP
CORPORATE NOTE DEPARTMENT (H31-5)
Re: Drawing for Interest Due on
Scheduled Interest Payment Date
Ladies and Gentlemen:
We refer to your Letter of Credit No. 100-0092 (the "Letter of
Credit"). Any term which is defined in the Letter of Credit shall have the same
meaning when used herein. The undersigned, a duly authorized officer of
______________ [Insert name of Trustee] (the "Trustee" or "we"), hereby
certifies to you that:
1. We are the Trustee or a successor Trustee under the Indenture
for the holders of $4,200,000 VARIABLE RATE DEMAND INDUSTRIAL
DEVELOPMENT REVENUE BONDS (CALAVO GROWERS OF CALIFORNIA PROJECT)
(the "Bonds"), issued by RIVERSIDE COUNTY INDUSTRIAL DEVELOPMENT
AUTHORITY (the "Issuer").
2. We hereby make demand under the Letter of Credit, by our
presentment of the sight draft accompanying this Certificate,
for payment of $__________, representing accrued and unpaid
interest to be paid on the Bonds (other than Company Bonds) with
respect to a scheduled interest payment.
3. The amount of the draft accompanying this Certificate does not
exceed the amount available on the date hereof to be drawn under
the Letter of Credit in respect of interest accrued on the Bonds
and was computed in accordance with the terms and conditions of
the Bonds and the Indenture. The date specified in paragraph 4
below is the date upon which the payment hereby demanded is
required to be made under the terms and conditions of the Bonds
and the Indenture. The Letter of Credit has not terminated prior
to the time of the delivery of this Certificate and the
accompanying draft.
Annex A
1
72
4. We request that the payment hereby demanded be made no
later than 10:00 a.m., Los Angeles time ("Local Time"),
on ___________________[if this certificate and an
accompanying draft are delivered at or before 10:00
a.m., Local Time, then insert a date which is a Business
Day and is no earlier than the next Business Day
following the date those documents are delivered; if
this certificate and an accompanying draft are delivered
after 10:00 a.m., Local Time, insert a date which is a
Business Day and is no earlier than the second Business
Day following the date those documents are delivered].
Unless otherwise agreed to in a writing signed by you
and us, please [deposit/wire transfer] the amount hereby
demanded to our account number __________________
[insert account number] with
______________________________________________ [insert
name and address of banking institution to receive
funds].
5. Please reinstate the Letter of Credit by the amount
specified in paragraph 2 of this Certificate; following
such reinstatement, the Stated Amount shall be the same
as it was immediately prior to this drawing.
IN WITNESS WHEREOF, we have executed and delivered this
Certificate as Trustee as of the _________ day of __________, 19___.
Very truly yours,
[Insert name of Trustee]
as Trustee
By:____________________________________
[Insert name and title
of authorized officer]
Annex A
2
73
Annex B (Principal and Interest Demand
With Reinstatement Request
SECURITY PACIFIC NATIONAL BANK
Irrevocable Letter of Credit No. 100-0092
SECURITY PACIFIC NATIONAL BANK
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTENTION: WORLD CORPORATE GROUP
CORPORATE NOTE DEPARTMENT (H31-5)
Re: Drawing for Purchase of Bonds
Ladies and Gentlemen:
We refer to your Letter of Credit No. 100-0092 (the "Letter of
Credit"). Any term which is defined in the Letter of Credit shall have the same
meaning when used herein. The undersigned, a duly authorized officer of
_____________ [Insert name of Trustee] (the "Trustee" or "we"), hereby certifies
to you that:
1. We are the Trustee or a successor Trustee under the Indenture
for the holders of $4,200,000 VARIABLE RATE DEMAND INDUSTRIAL
DEVELOPMENT REVENUE BONDS (CALAVO GROWERS OF CALIFORNIA PROJECT)
(the "Bonds"), issued by RIVERSIDE COUNTY INDUSTRIAL DEVELOPMENT
AUTHORITY (the "Issuer").
2. We hereby make demand under the Letter of Credit, by our
presentment of the sight draft accompanying this Certificate,
for payment of $__________ of which $___________ shall be with
respect to the principal of certain of the Bonds other than
Company Bonds) and $_____________ shall be with respect to
interest, if any, to be paid on the Bonds other than Company
Bonds), which total amount represents the purchase price of
certain of the Bonds, including any interest accrued thereon
through the date of the purchase of such Bonds.
3. The amount of the draft accompanying this Certificate does not
exceed the amount available on the date hereof to be drawn under
the Letter of Credit and was computed in accordance with the
terms and conditions of the Bonds and the Indenture. The date
specified in paragraph 4 below is the date upon which the
payment hereby demanded is required to be made under the terms
and conditions of the Bonds and the Indenture. This Letter of
Credit has not terminated prior to the time of delivery of this
Certificate and the accompanying draft.
Annex B
1
74
4. We request that the payment hereby demanded be made no later
than 10:00 a.m., Los Angeles time ("Local Time"), on
__________________ [if this certificate and accompanying draft
are presented at or before 10:00 a.m., Local Time, on a Business
Day, then insert a date which is a Business Day and is no
earlier than the next Business Day following the date those
documents are delivered; if this certificate and an accompanying
draft are delivered after 10:00 a.m., Local Time, on a Business
Day, then insert a date which is a Business Day and which is no
earlier than the second Business Day following the date those
documents are delivered]. Unless otherwise agreed to in a
writing signed by you and us, please [deposit/wire transfer] the
amount hereby demanded to our account number
____________________ [insert account number] with
_______________________________________________ [insert name and
address of banking institution to receive funds] .
5. Upon your being reimbursed in the amount specified in paragraph
2 of this Certificate, please reinstate the Letter of Credit by
the amount specified in paragraph 2 of this Certificate;
following such reinstatement, the Stated Amount shall be the
same as it was immediately prior to this drawing.
IN WITNESS WHEREOF, we have executed and delivered this
Certificate as Trustee as of the _______ day of __________, 19____.
Very truly yours,
[Insert name of Trustee]
as Trustee
By:____________________________________
[Insert name and title
of authorized officer]
Annex B
2
75
Annex C (Principal and Interest Demand
Without Reinstatement Request)
SECURITY PACIFIC NATIONAL BANK
Irrevocable Letter of Credit No. 1 00-0092
SECURITY PACIFIC NATIONAL BANK
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTENTION: WORLD CORPORATE GROUP
CORPORATE NOTE DEPARTMENT (H31-5)
Re: Drawing for Partial Redemption of the Bonds or
Purchase of the Bonds Upon Conversion
Ladies and Gentlemen:
We refer to your Letter of Credit No. 100-0092 (the "Letter of
Credit"). Any term which is defined in the Letter of Credit shall have the same
meaning when used herein. The undersigned, a duly authorized officer of
________________ [Insert name of Trustee] (the "Trustee" or "we"), hereby
certifies to you that:
1. We are the Trustee or a successor Trustee under the Indenture
for the holders of $4,200,000 VARIABLE RATE DEMAND INDUSTRIAL
DEVELOPMENT REVENUE BONDS (CALAVO GROWERS OF CALIFORNIA PROJECT)
(the "Bonds"), issued by RIVERSIDE COUNTY INDUSTRIAL DEVELOPMENT
AUTHORITY (the "Issuer").
2. We hereby make demand under the Letter of Credit for payment of
$____________ , of which $___________ shall be with respect to
the principal of certain of the Bonds (other than Company
Bonds), and $___________ shall be with respect to interest, if
any, to be paid on the Bonds (other than Company Bonds), which
total amount is due either with respect to a purchase of the
Bonds in accordance with Section 1301 of the Indenture or with
respect to a partial redemption of the Bonds pursuant to the
Indenture.
3. The amount of the draft accompanying this Certificate does not
exceed the amount available on the date hereof to be drawn under
the Letter of Credit and was computed in accordance with the
terms and conditions of the Bonds and the Indenture. The date
specified in paragraph 4 below is the date upon which the
payment hereby demanded is required to be made under the terms
and conditions of the Bonds and the Indenture. The Letter of
Credit has not terminated prior to the time of the delivery of
this Certificate and the accompanying draft.
Annex C
1
76
4. We request that the payment hereby demanded be made no later
than 10:00 a.m., Los Angeles time ("Local Time"), on
______________ [if this certificate and an accompanying draft
are delivered at or before 10:00 a.m., Local Time, insert a date
which is a Business Day and is no earlier than the next Business
Day following the date those documents are delivered; if this
certificate and an accompanying draft are delivered after 10:00
a.m., Local Time, insert a date which is a Business Day and is
no earlier than the second Business Day following the date those
documents are delivered]. Unless otherwise agreed to in a
writing signed by you and us, please [deposit/wire transfer] the
amount hereby demanded to our account number __________________
[insert account number] with
_____________________________________________ [insert name and
address of banking institution to receive funds].
5. Upon application of the amount with respect to principal of the
Bonds set forth in paragraph 2 of this Certificate, there shall
be outstanding $_____________ principal amount of the Bonds.
IN WITNESS WHEREOF, we have executed and delivered this
Certificate as Trustee as of the _____ day of ___________, 19___.
Very truly yours,
[Insert name of Trustee]
as Trustee
By:____________________________________
[Insert name and title
of authorized officer]
Annex C
2
77
Annex D (Final Drawing)
SECURITY PACIFIC NATIONAL BANK
Irrevocable Letter of Credit No. 100-0092
SECURITY PACIFIC NATIONAL BANK
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTENTION: WORLD CORPORATE GROUP
CORPORATE NOTE DEPARTMENT (H31-5)
Re: Final Drawing and Termination
Ladies and Gentlemen:
We refer to your Letter of Credit No. 100-0092 (the "Letter of
Credit"). Any term which is defined in the Letter of Credit shall have the same
meaning when used herein. The undersigned, a duly authorized officer of
_________________ [Insert name of Trustee] (the "Trustee" or "we"), hereby
certifies to you that:
1. We are the Trustee or a successor Trustee under the Indenture
for the holders of $4,200,000 VARIABLE RATE DEMAND INDUSTRIAL
DEVELOPMENT REVENUE BONDS (CALAVO GROWERS OF CALIFORNIA PROJECT)
(the "Bonds"), issued by RIVERSIDE COUNTY INDUSTRIAL DEVELOPMENT
AUTHORITY (the "Issuer").
2. We hereby make demand for payment of $_____________, of which
$____________ shall be with respect to the principal of the
Bonds (other than Company Bonds), and $______________ shall be
with respect to interest, if any, to be paid on the Bonds (other
than Company Bonds).
3. This drawing is being made as a result of the maturity or
redemption of all outstanding Bonds in accordance with the terms
and conditions of the Bonds and the Indenture.
4. The amount of the draft accompanying this Certificate does not
exceed the amount available on the date hereof to be drawn under
the Letter of Credit and was computed in accordance with the
terms and conditions of the Bonds and the Indenture. The date
specified in paragraph 5 below is the date upon which the
payment hereby demanded is required to be made under the terms
and conditions of the Bonds and the Indenture. The Letter of
Credit has not terminated prior to the delivery of this
Certificate and the accompanying draft.
Annex D
1
78
5. The sight draft accompanying this Certificate constitutes the
final drawing under the Letter of Credit and upon payment of
such draft, the Letter of Credit is cancelled. We request that
the payment hereby demanded be made no later than 10:00 a.m.,
Los Angeles time ("Local Time"), on ___________________ [if this
certificate and an accompanying draft are delivered at or before
10:00 a.m., Local Time, insert a date which is a Business Day
and which is no earlier than the next Business Day following the
date those documents are delivered; if this certificate and an
accompanying draft are delivered after 10:00 a.m., Local Time,
insert a date which is a Business Day and is no earlier than the
second Business Day following the date these documents are
delivered]. Please [deposit/wire transfer] the amount hereby
demanded to our account number ___________________ [insert
account number] with ___________________________ [insert name
and address of banking institution to receive e funds].
IN WITNESS WHEREOF, we have executed and delivered this
Certificate as Trustee as of the _____ day of ________, 19__.
Very truly yours,
[Insert name of Trustee]
as Trustee
By:____________________________________
[Insert name and title
of authorized officer]
Annex D
2
79
Annex E (Transfer Demand)
SECURITY PACIFIC NATIONAL BANK
Irrevocable Letter of Credit No. 100-0092
SECURITY PACIFIC NATIONAL BANK
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTENTION: WORLD CORPORATE GROUP
CORPORATE NOTE DEPARTMENT (H31-5)
Re: Instruction to Transfer
Letter of Credit No. 100-0092
Ladies and Gentlemen:
For value received, the undersigned beneficiary (the "Transferor")
hereby irrevocably transfers to:
[Name of Transferee and Address]
(the "Transferee") all rights of the Transferor with respect to the
above-referenced Letter of Credit, including the right to draw under said Letter
of Credit in the amount of the full unutilized balance thereof. Said Transferee
has succeeded the Transferor as Trustee under that certain Indenture of Trust
dated as of SEPTEMBER 1, 1985, by and between RIVERSIDE COUNTY INDUSTRIAL
DEVELOPMENT AUTHORITY and First Interstate Bank of California, as Trustee (the
"Indenture") with respect to the $4,200,000 VARIABLE RATE DEMAND INDUSTRIAL
DEVELOPMENT REVENUE BONDS (CALAVO GROWERS OF CALIFORNIA PROJECT), issued by
RIVERSIDE COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY.
By virtue of this transfer, the Transferee shall have the sole
rights as beneficiary of said Letter of Credit, including sole rights relating
to any past or future amendments thereof, whether increases or extensions or
otherwise. All amendments are to be advised directly to the Transferee without
necessity of any consent of or notice to the Transferor.
By its signature below, the Transferee acknowledges that it has
duly succeeded the Transferor as Trustee under the Indenture, and agrees to be
bound by the terms of the Indenture as if it were the original Trustee
thereunder.
Annex E
1
80
The Letter of Credit is returned herewith, and we ask you to
endorse the transfer on the reverse thereof and to forward it directly to the
Transferee with your customary notice of transfer. Also, please find enclosed
our payment of $1,000 as a transfer fee in accordance with the Letter of Credit.
Very truly yours,
[Insert name of Transferor]
as Trustee
By:_________________________________
[Insert name and title
of authorized officer]
SIGNATURE OF THE ABOVE PARTY,
DULY AUTHORIZED TO ACT ON BEHALF
OF (insert name of Trustee],
AUTHENTICATED BY:
_____________________________________
Name and Title]
Acknowledged by
[insert name of Transferee]
as Transferee and successor Trustee
By:__________________________________
[Insert name and title
of authorized officer]
Annex E
2
81
STATE OF _______________________ )
) ss.
COUNTY OF ______________________ )
On [insert date] before me, the undersigned, a Notary Public in
and for said State, personally appeared [insert name], known to me to be the
[insert title] and [insert name], known to me to be the [insert title] of the
corporation that executed the within instrument, on behalf of the corporation
therein named, and acknowledged to me that such corporation executed the within
instrument pursuant to its bylaws or a resolution of its board of directors.
WITNESS my hand and official seal.
[SEAL]
_______________________________________
[Notary Public's Signature]
Acknowledged:
Transferee
By:____________________________________
[Name and title]
Annex E
3
82
Annex F (Surrender Certificate)
SECURITY PACIFIC NATIONAL BANK
Irrevocable Letter of Credit No. 100-0092
SECURITY PACIFIC NATIONAL BANK
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTENTION: WORLD CORPORATE GROUP
CORPORATE NOTE DEPARTMENT (H31-5)
Ladies and Gentlemen:
We refer to your Letter of Credit No. 100-0092 (the "Letter of
Credit"). Any term which is defined in the Letter of Credit shall have the same
meaning when used herein. The undersigned, a duly authorized officer of [insert
name of Trustee] (the "Trustee" or "We"), hereby certifies to you that:
1. We are the Trustee or a successor trustee under the
Indenture for the holders of the $4,200,000 VARIABLE
RATE DEMAND INDUSTRIAL DEVELOPMENT REVENUE BONDS
(CALAVO GROWERS OF CALIFORNIA PROJECT) (the "Bonds"),
issued by RIVERSIDE COUNTY INDUSTRIAL DEVELOPMENT
AUTHORITY.
2. We hereby surrender the attached Letter of Credit to
you.
3. The Letter of Credit is hereby terminated in accordance
with its terms.
4. No payment is demanded of you in connection with this
surrender of the Letter of Credit.
IN WITNESS WHEREOF, we have executed and delivered this
certificate as Trustee as of the _____ day of ________, 19__.
Very truly yours,
[Insert name of Trustee]
as Trustee
By:____________________________________
[Insert name and title
of authorized officer]
Annex F
1
83
EXHIBIT B
TO: SECURITY PACIFIC NATIONAL BANK [LOGO] LETTER OF CREDIT
INTERNATIONAL BANKING GROUP APPLICATION AND AGREEMENT
|---------------------------|
| FOR BANK USE ONLY |
|---------------------------|
| UC NO. CUSTOMER I.D. NO.|
|---------------------------|
| REVIEWED BY I.B.G. |
| |
|---------------------------|
Date September 5, 1985
-----------------
Please issue an irrevocable Standby Letter Of Credit and advise the beneficiary
by:
[ ] AIRMAIL (AML) [X] MAIL (AML) [ ] CABLE (CAB)
---------------BENEFICIARY-----------------------------APPLICANT ---------------
First Interstate Bank of California | Calavo Growers of California,
Corporate Trust Department | a California corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ | ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ | ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
AMOUNT CURRENCY EXPIRY DATE
$4,267,661.00 U.S. Dollars See Attached Letter of Credit
--------------------------------------------------------------------------------
Available by drafts drawn on Security Pacific National Bank at sight when
accompanied by the following documentation:
BENEFICIARY'S SIGNED CERTIFICATION STATING THAT:
SEE ATTACHED LETTER OF CREDIT
SPECIAL INSTRUCTIONS: Issue the Letter of Credit in the form attached hereto.
This Letter of Credit application and Agreement is
governed by the terms and conditions of the
Reimbursement Agreement by and between the undersigned
and Security Pacific National Bank, dated as of
September 1, 1985.
This letter of credit expires at Security Pacific National Bank's issuing
office on the expiry date indicated above.
This Credit is subject to the Uniforms Customs and Practice for Documentary
Credits of the International Chamber of Commerce, in force.
----------------------------------------------------------------------------------------------------------------------------------
B| Extension of the credit under customer's liability has | We, and each of us, agree that the terms and conditions set forth on
A| been approved by an authorized lending officer of | this and the reverse hereof are hereby a part of this application
N| SECURITY PACIFIC NATIONAL BANK | and are accepted and agreed to by us.
K| |
| |
U|-------------------------------------------------------------------------------------------------------------------------------
S| OFFICE NAME | NO. FEE | FIRM NAME
E| Corporate Banking | 100 1% p.a. | Calavo Growers of California
|-------------------------------------------------------------------------------------------------------------------------------
O| DEBIT DRAWINGS TO - OFFICE NAME | ACCOUNT NO. | AUTHORIZED SIGNATURE
N| Corporate Note Dept. | 100-099488 | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Vice President, Finance
L|-------------------------------------------------------------------------------------------------------------------------------
Y| APPROVING OFFICER'S SIGNATURE AND TITLE | OFFICER'S NO.| DIRECT INQUIRIES TO TELEPHONE NO.
| /s/ [Illegible] AVP | 838 | ▇▇▇▇ ▇▇▇▇▇▇▇ (213) 587-429[illegible]
----------------------------------------------------------------------------------------------------------------------------------
[BOTTOM OF FORM MISSING AND THEREFORE ILLEGIBLE]
84
ADDENDUM TO STANDBY LETTER OF CREDIT APPLICATION
AND SECURITY AGREEMENT
This Addendum is to that SECURITY PACIFIC NATIONAL BANK ("Bank") Standby Letter
of Credit Application and Agreement ("Application") executed by the undersigned
on September 5, 1985 in relation to a Letter of Credit in the amount of
$4,267,661.00 in favor of First Interstate Bank of California
The undersigned hereby agrees that the following is made a part of the
Application and their terms and conditions set forth below are accepted and
agreed to by the undersigned:
"12. We hereby agree to pay you from time to time on demand a
premium calculated by you as being: (A) the amount of Federal
Deposit Insurance Corporation (FDIC) premium that you would have
to pay on or in any way connected with the Credit or the
Application on the assumption that the same are subject to FDIC
insurance, and (B) the amount of reserves relating to or in any
way connected with the Credit or the Application which you
conclude are or may be required by the Board of Governors of the
Federal Reserve System to be imposed."
Any terms defined in the Application and not defined herein shall have the same
meaning in the Application.
Calavo Growers, of California
--------------------------------------
Firm Name
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 8/22/85
--------------------------------------
Authorized Signature(s)
Vice President - Finance
--------------------------------------
Title
85
EXHIBIT C
CALAVO GROWERS OF CALIFORNIA
AUTHORIZED REPRESENTATIVE CERTIFICATE
CALAVO GROWERS OF CALIFORNIA, a California corporation (the "Company"),
hereby (a) authorizes each person named below to act for all purposes on
Company's behalf, as the Authorized Representative of the Company, under and
pursuant to that certain Reimbursement Agreement, dated as of September 1, 1985,
between Security Pacific National Bank, a national banking association (the
"Bank"), and the Company (the "Reimbursement Agreement"); (b) agrees that it
shall be bound by any and all actions taken and any and all documents executed
by any of such persons in connection with such Reimbursement Agreement; and (c)
certifies that the title and signature appearing beside each person's name below
is that person's true and correct title and signature.
Name Title Signature
---- ----- ---------
----------------------- ----------------------- -------------------------
----------------------- ----------------------- -------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇ Treasurer /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------- ----------------------- -------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Vice President /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------- ----------------------- -------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ President /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------- ----------------------- -------------------------
----------------------- ----------------------- -------------------------
This Authorization shall remain in effect until the Company notifies the
Bank, in writing, of any change, provided that the designation of any other
person or persons as Authorized Representatives of the Company for purposes of
said Reimbursement Agreement shall be subject to the Bank's written approval.
Dated: September 5, 1985 "Company":
CALAVO GROWERS OF CALIFORNIA
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
86
EXHIBIT D
DESCRIPTION OF LAND
All that real property situated in the County of Riverside, Sate of California,
more particularly described as follows:
PARCEL 1:
Parcels 11 and 16 of Parcel Map 12549 in the County of Riverside, State of
California, as per map recorded in Book 74 Pages 84 through 89 of Parcel Maps,
in the Office of the County Recorder of said County.
PARCEL 2:
An easement for roadway and public utility purposes, along with slope easements
extending outside of this easement at the ratio of two (2) horizontal to one (1)
vertical and such drainage easements as necessary to accommodate the ultimate
roadway over that portion of Parcel 17 of Parcel Map 12549 in the County of
Riverside, State of California, as per map recorded in Book 74 Pages 84 through
89 of Parcel Maps, in the Office of the County Recorder of said County lying
Easterly of the following described line and its Northerly prolongation:
Beginning at the Southeasterly corner of said Parcel 17, thence along the
Southerly line, North 85 degrees 16'07" West 66.24 feet to the true point of
beginning; thence, North 06 degrees 56'07" West 504.44 feet to a point of the
boundary of Parcel 17, being South 37 degrees 04'13" West 0.50 feet from the
Northeasterly terminus of the course shown as; "North 37 degrees 04'13" East
105.16 feet" on the map of said Parcel.
87
EXHIBIT E
Consents are required pursuant to the following loan agreements and have
been obtained:
1. Loan Agreement dated as of June 21, 1985 between the Company and
Sacramento Bank for Cooperatives;
2. Loan Agreement dated April 3, 1985 between the Company and Bank of
America National Trust and Savings Association.
88
EXHIBIT F
FORM OF OPINION OF COUNSEL TO THE COMPANY
PURSUANT TO SECTION 3.1 OF REIMBURSEMENT AGREEMENT
[Date of Issuance]
Riverside County Industrial
Development Authority
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Security Pacific National Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Security Pacific Capital Markets Group
(Security Pacific National Bank)
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: $4,200,000 RIVERSIDE COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY VARIABLE
RATE DEMAND INDUSTRIAL DEVELOPMENT REVENUE BONDS (CALAVO GROWERS OF
CALIFORNIA PROJECT)
Ladies and Gentlemen:
This opinion is being delivered to you in connection with the issuance
of the above-referenced bonds (the "Bonds") by RIVERSIDE COUNTY INDUSTRIAL
DEVELOPMENT AUTHORITY (the "Issuer") pursuant to an Indenture of Trust dated as
of September 1, 1985 (the "Indenture") by and between the Issuer and First
Interstate Bank of California, as trustee (the "Trustee"), and a Loan Agreement
of even date therewith (the "Loan Agreement") by and between the Issuer and
CALAVO GROWERS OF CALIFORNIA, a California corporation (the "Company"). Pursuant
to the Loan Agreement, the proceeds of the sale of the Bonds are being loaned by
the Issuer to the Company to finance the construction of a packing house
facility (the "Project") in Riverside County, California. The Bonds are secured
by a letter of credit issued by Security Pacific National Bank (the "Bank") to
the Trustee, for the account of the Company, in the initial stated amount of
$____________ (the "Letter of Credit"), pursuant to that certain Reimbursement
Agreement dated as of September 1, 1985 (the "Reimbursement Agreement") by and
between the Bank and the Company. This opinion is delivered pursuant to Section
___ of the Indenture and Section 3.1 of the Reimbursement Agreement.
We have been for many years (and currently are) general counsel for the
Company, and we have acted as counsel for the Company in connection with the
transactions contemplated by the Loan Agreement and the Reimbursement Agreement.
89
I. EXAMINATION OF DOCUMENTS.
Our opinion expressed herein is based on our examination of and
reliance upon:
A. Certified copies of the Articles of Incorporation and the
Bylaws of the Company as now in effect;
B. A Certificate of Status of Domestic Corporation dated August
12, 1985, from the Secretary of State of California;
C. [References to loan agreements with other lenders];
D. A fully executed counterpart or original of the following
documents, each of which is dated as of September 1, 1985 (collectively, the
"Company Documents"):
1. The Loan Agreement executed by the Issuer and the
Company;
2. The First Deed of Trust and Assignment of Rents
(Construction Trust Deed) (the "First Deed of Trust") executed by the
Company as trustor to Ticor Title Insurance Company of California (the
"Title Company") as trustee, naming the Issuer as beneficiary and
describing therein certain land and improvements (collectively, the
"Real Property");
3. The First Security Agreement (the "First Security
Agreement") executed by the Company as debtor, naming the Issuer as
secured party and describing therein certain personal property and
fixtures (the "Personal Property");
4. Duplicate originals of the Form UCC-1 Financing
Statements (the "First Financing Statements") executed by the Company as
debtor, naming the Issuer as secured party and describing therein the
Personal Property;
5. The Reimbursement Agreement executed by the Bank and
the Company;
6. The Second Deed of Trust and Assignment of Rents
(Construction Trust Deed) (the "Second Deed of Trust") executed by the
Company as trustor to the Title Company as trustee, naming the Bank as
beneficiary and describing therein the Real Property;
7. The Second Security Agreement (the "Second Security
Agreement") executed by the Company as debtor, naming the Bank as
secured party and describing therein the Personal Property;
-2-
90
8. Duplicate originals of the Form UCC-1 Financing
Statements (the "Second Financing statements") executed by the Company
as debtor, naming the Bank as secured party and describing therein the
Personal Property (collectively, together with the First Deed of Trust,
the First Security Agreement, the First Financing Statements, the Second
Dead of Trust and the Second Security Agreement, the "Security
Documents");
9. The Placement Agent Agreement executed by the Issuer,
the Company and Security Pacific Capital Markets Group (Security Pacific
National Bank) as Placement Agent; and
10. The Remarketing Agreement executed by the Issuer,
the Company and Security Pacific Capital Markets Group (Security Pacific
National Bank) as Remarketing Agent;
E. A fully executed counterpart or original of the following
documents, each of which is dated as of September 1, 1985:
1. The Indenture executed by the Issuer and the Trustee;
2. The Memorandum of Assignment of First Deed of Trust
and Assignment of Rents, executed by the Issuer in favor of the Trustee
with respect to the Issuer's interest as beneficiary under the First
Deed of Trust; and
3. The Intercreditor Agreement executed by the Issuer,
the Trustee and the Bank and consented to by the Company; and
F. The information contained in the Placement Memorandum dated
______________________ (the "Placement Memorandum") under the headings "The
Project" and "The Company" (collectively, the "Designated Headings").
II. OPINIONS.
Based on our examination of and reliance upon the foregoing
documents, certificates and instruments, and such other documents, corporate
records and instruments as we have deemed necessary for purposes of this
opinion, and subject to the assumptions, exceptions and qualifications set forth
below, we are of the opinion that:
1. The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of California, with all
necessary corporate power and authority to conduct its business as now
conducted, to own the Real Property,
-3-
91
to construct the Project, to incur indebtedness as contemplated by the Loan
Agreement and the Reimbursement Agreement and to execute, deliver and perform
its obligations under the company documents.
2. The Company Documents have been duly authorized by all
necessary corporate action, have been duly executed and delivered by the Company
and constitute legally valid and enforceable obligations of the Company,
enforceable against the Company in accordance with their respective terms.
3. The execution, delivery and performance by the Company of the
Company Documents do not and will not violate (i) any provisions of the
Company's Articles of Incorporation or Bylaws, (ii) any existing law, rule,
regulation, order, writ, injunction, decree or judgment known by us to be
applicable to the Company or (iii) any material contractual restriction known by
us to be applicable to the Company. Nor to our knowledge do they result in the
creation of any lien, charge or encumbrance upon any of the Company's
properties, except as contemplated by the Company Documents, or in the
acceleration of any indebtedness or contractual obligation of Company.
4. To our knowledge, there are no actions, suits, proceedings,
inquiries or investigations by or before any court, governmental agency, public
board or body pending or threatened against the Company (i) which affect or seek
to prohibit, restrain or enjoin the issuance, placement or delivery of the Bonds
or the execution and delivery of any of the Company Documents or (ii) which
affect or question the validity or enforceability of any of the Company
Documents, the tax-exempt status of the Bonds or the Company's power to perform
its obligations under the Company Documents or to acquire, own, construct, equip
or operate the Project.
5. To the extent that the security interests in the Personal
Property granted by the First and Second Security Agreements to the secured
parties thereunder may be perfected by filing financing statements pursuant to
the California Uniform Commercial Code (the "California Commercial Code"), the
security interests created by said agreements constitute perfected security
interests under said Code; subject, however, to the limitations set forth in
Section 9306 of said Code and the requirement that continuation statements be
filed in accordance with Section 9403 of said Code. Additional filings may also
be necessary if the Company changes its name or the jurisdiction in which its
chief executive office or any of the Personal Property is located. We call your
attention to, and the opinions expressed in this paragraph are limited by, the
fact that buyers or purchasers of the Personal Property may, in certain
circumstances, acquire it free of the secured parties' interests therein. We
also note that the law is not well developed in California with respect to the
-4-
92
specificity of description necessary to create a valid security interest in
personal property. To ensure beyond any doubt that a sufficient description has
been provided, the personal property intended to be subject to the security
interest should be identified by serial or identification numbers or by some
other method of specific identification. However, the more general description
of the personal property used in the First and Second Security Agreements and in
the First and Second Financing Statements is consistent with that commonly used
by major lenders in California and, although the matter is not free from doubt,
should be held by a California court to be sufficient to create a security
interest in the personal property described therein.
6. To our knowledge, as of the date of the Placement Memorandum
and as of the date hereof, the information contained in the Placement Memorandum
under the Designated Headings does not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading in any material
respect.
III. ASSUMPTIONS, EXCEPTIONS AND QUALIFICATIONS.
Notwithstanding anything to the contrary contained herein, our
opinion expressed herein is subject to the qualifications set forth in paragraph
5 above and to the following assumptions, exceptions and qualifications:
A. Our opinion is limited to the laws of the United States of
America and the laws of the State of California and its subdivisions, and we
assume no responsibility as to the applicability or the effect of the laws of
any other jurisdiction.
B. Where our opinions set forth above are stated "to our
knowledge" or limited to matters "known by us," we have made no independent
investigation of factual matters, and the opinions expressed are therefore meant
to indicate only that in our role as general counsel to the Company, we are not
aware of any information inconsistent with such opinions.
C. We have assumed the genuineness of all signatures (other than
those of the Company on the Company Documents) and the due authorization,
execution, and delivery of the Company Documents by the parties thereto (other
than the Company).
D. In addition to the other exceptions and limitations set forth
herein, the opinions set forth in paragraph 2 above are subject to the
exceptions that the enforcement of the Company Documents may be limited by:
-5-
93
1. Bankruptcy, moratorium, insolvency, reorganization or
other laws or judicial decisions relating to or limiting the rights of
creditors generally;
2. The application of general principles of equity,
regardless of whether such enforcement is sought in a proceeding in
equity or at law;
3. With respect to rights of indemnity, limitations
imposed by laws, judicial decisions or principles of public policy;
4. With respect to remedies for defaults by the Company,
compliance with, and limitations imposed by, requirements of state law
including, but not limited to, California Code of Civil Procedure
Sections 726 and 580d, California Civil Code Sections 2924 et seq. and
California Commercial Code Sections 9501 et seq.; and
5. Limitations based on laws, judicial decisions or
public policy limiting a person's right to waive the benefits of
statutory provisions or common law rights.
We further advise you that a California court may not strictly enforce certain
covenants contained in the Company Documents or allow acceleration of the
maturity of the indebtedness secured by the Security Documents if it concludes
that such enforcement or acceleration would not be reasonable under the then
existing circumstances. We believe, however, that acceleration would be
available, where permitted by the terms of the Company Documents, upon the
occurrence of a material breach by the Company of a material covenant.
E. With respect to the opinions set forth in paragraph 5 above,
we have assumed that:
1. The First and Second Financing Statements have been
duly filed in the Office of the California Secretary of State and in the
Official Records of Riverside County, California;
2. The Company has "rights in the Personal Property, as
that term is used in Section 9204 of the California Commercial Code;
3. The Personal Property is and will remain located in
the State of California; and
4. No part of the Personal Property is subject to the
provisions of Sections 9103(2) or 9302(3) of the California Commercial
Code.
-6-
94
We express no opinion as to the reasonableness of the foregoing assumptions or
any other assumptions contained herein.
F. We neither express nor imply any opinion with respect to:
1. The title to, or the perfection or priority of any
lien on, any of the Real Property;
2. The title to, or the priority of any security
interest in, any of the Personal Property;
3. Usury laws;
4. The application or effect of the Securities Act of
1933, the Securities Exchange Act of 1934, the Trust Indenture Act of
1939 or state securities laws, each as now in effect; or
5. The tax-exempt status of the Bonds.
G. We neither express nor imply any opinion with respect to the
validity or enforceability of any provision of any Company Document which:
1. Permits any person, in the event of delinquency or
default, to increase the rate of interest or to collect a late charge;
2. Prohibits the Company from further encumbering or
transferring the Real Property or the Personal Property;
3. Permits the acceleration of the indebtedness secured
by any of the Security Documents in the event of any breach of any such
provision against further encumbrances or transfer by the Company;
4. Provides that failure to exercise or delays in
exercising rights or remedies will not operate as a waiver of such
rights or remedies;
5. Purports to grant a security interest in any
governmental permits, licenses, certificates or authorizations which are
not assignable under applicable law; or
6. Permits the acceleration of the indebtedness secured
by any of the Security Documents upon the invalidation of any provision
in any of the Company Documents relating to any payment obligation of
the Company or upon the imposition on any beneficiary under the First
Deed of Trust or the Second
-7-
95
Deed of Trust of any future tax on the obligations secured thereby or
the property described therein.
H. We neither express nor imply any opinion as to the
availability or enforceability of the various self-help remedies provided in the
Company Documents (including, without limitation any right of entry onto the
Real Property, any right to take action on behalf of the Company or any right to
act in the Company's name and stead in connection with condemnation proceedings,
settlement of insurance claims or other legal proceedings) or as to the validity
or enforceability of any provision in any of the Company Documents which
constitutes a party thereto as the Company's attorney-in-fact.
I. Under California law, enforcement of any provision in any of
the Company Documents may be subject to an implied covenant of good faith and
fair dealing, and, in particular, such implied covenant may require that any
party thereto not unreasonably withhold its consent whenever its consent may be
required and that such party act fairly under any provisions thereof which
entitle it to receive or apply in its discretion the proceeds of any insurance
policy covering the Real or Personal Property or any condemnation award with
respect thereto.
J. Enforcement of the assignment of rents provision in the First
Deed of Trust or the Second Deed of Trust may require that the beneficiary
thereunder first take possession of the Real Property, either by itself or
through a court-appointed receiver (the appointment of which is subject to the
discretion of the court and in any event may be granted only if the beneficiary
can show waste or other impairment of its security). We neither express nor
imply any opinion regarding the efficacy of the language in such provision which
would exonerate the beneficiary from any responsibility or liability as a
"mortgagee-in-possession" where the beneficiary does not itself take possession
of the Real Property.
This opinion is solely for the benefit of, and may be relied
upon only by, you and your respective successors-in-interest under the Company
Documents; copies of this opinion may not be delivered to any other person
without our prior written consent.
Very truly yours,
-8-
96
EXHIBIT G
REQUIREMENTS RE COMPANY LOAN DOCUMENTS
(Variable Rate Bonds)
The Loan Agreement and the Indenture shall all be consistent
with the following requirements:
(a) Except when necessary, in the opinion of Bond Counsel, to
preserve the exemption of the interest on the Bonds from federal income
taxation, any amendment, modification, or termination of any of such
documents shall require the prior written consent of the Bank;
(b) Upon delivery by the Bank to the Trustee of a written notice
stating that an Event of Default has occurred under the Reimbursement
Agreement and requesting that the Trustee redeem all of the Bonds, (i)
all outstanding indebtedness of the Company under the Company Documents
shall automatically become immediately due and payable, without
presentment, demand, protest or notice of any kind to the Company or any
other person, and (ii) the Trustee shall immediately call the Bonds for
redemption; the Trustee shall mail such redemption notice to the
Bondholders within two Business Days after receipt of such notice from
the Bank, and such redemption notice shall fix a date for redemption not
more than 10 days from the date the redemption notice is mailed;
(c) Concurrently with the giving or receipt by the Issuer, the
Trustee, or the Company of any notice, certificate or other
communication in connection with the Indenture or the Loan Agreement the
Bank shall be sent a copy of such notice, certificate or other
communication;
(d) Any notice given to the Trustee of a voluntary prepayment on
the Company Loan other than from excess monies on deposit in the
Construction Fund, in order to be effective, shall be accompanied by
either (i) Company's funds in the amount to be prepaid, or (ii) the
Bank's written consent to such voluntary prepayment;
(e) Prior to the Completion Date (as defined in the Loan
Agreement), the Trustee shall disburse to the Bank, from the Company
Loan Fund, immediately upon receipt by the Trustee of the proceeds of
each draw upon the Letter of Credit representing a payment of interest
on the Company Loan, an amount equal to the amount of such draw; and
(f) The rights of the Issuer or the Trustee to accelerate or
require mandatory prepayment of the Company Loan and the Bonds shall be
subject to the applicable provisions of the Intercreditor Agreement.
G-1
97
EXHIBIT H
ADDITIONAL ITEMS TO BE DELIVERED TO THE BANK
The Bank shall have received and approved the following
items (which shall be certified copies of executed documents if the Bank so
requests:
(1) An appraisal by the Bank's appraiser and/or an M.A.I.
appraiser approved by the Bank showing the value of the Project, as
completed in accordance with the Project Plans;
(2) The Approved Budget;
(3) A certificate from the project Architect stating that the
Project Plans, and, upon completion of the Project, the Project and the
anticipated use and occupancy thereof, will comply with all applicable
zoning, subdivision and other laws, codes, ordinances, regulations and
restrictive covenants affecting the Project, including, without
limitation, those related to handicapped access;
(4) A certificate from a licensed structural engineer stating
that the Project as described in the Project Plans will be structurally
sound and in conformity with applicable legal requirements regarding
earthquake standards;
(5) A complete set of the Project Plans described in Exhibit J;
(6) A copy of the Project Architect's Agreement and of the
Company's agreements with all other parties providing architectural,
design or engineering services for the Project;
(7) A copy of all inspection and test reports made by or for the
Company or the Project Architect prior to such date;
(8) A certified list from the Company of all construction
contracts relating to the Project that the Company has executed or
intends to execute, including the General Contract together with
complete copies of all such contracts executed on or before such date,
and such financial statements of the Contractor and such subcontractors
as the Bank may require, including, without limitation, balance sheets
and profit and loss statements: the copy of the General Contract
delivered to the Bank shall include a schedule showing (i) all
subcontracts awarded as of the date of delivery of the General Contract
to the Bank, including names, types of work, subcontract amounts and
percentage retainage provided in such subcontracts, and (ii) the amount
of general conditions and an estimate of value for all subcontracts not
awarded as of such date; not less than ninety percent (90%) of the
amount budgeted for construction costs in the
H-1
98
Approved Budget shall be represented by guaranteed maximum cost
subcontracts executed and submitted to the Bank; the maximum amount of
overhead and profit allowed to the Contractor under the General Contract
shall be approved by the Bank, and overhead and profit allowed to the
Contractor shall be approved by the Bank, and overhead and profit shall
be payable under the General Contract in accordance with the percentage
of completion of the contracted scope of work;
(9) A copy of the standard form of subcontract to be used by the
Contractor, which form must not prohibit an assignment of the
subcontract to the Bank or require the subcontractor's consent thereto
(all subcontracts for the Project shall be written on the form of
subcontract approved by the Bank), and a copy of each subcontract
executed on or before such date;
(10) Copies of all executed Change Orders, and a list describing
all material Change Orders contemplated or under negotiation as of such
date;
(11) All authorizations, including building permits, annexation
agreements, plot plan approvals, subdivision approvals, environmental
approvals (including an environmental impact report and a permit issued
by the California Coastal Commission, if required under applicable law)
sewer and water permits and zoning and land use entitlements which are
necessary for the commencement and timely prosecution of the
construction of the Project in accordance with the Project Plans and in
accordance with all applicable building, environmental, subdivision,
land use and zoning laws, including evidence that the Property consists
of one or more legal and separate lots under the California Subdivision
Map Act and for tax assessment purposes;
(12) Copies of all other permits and all licenses, leases,
franchises and agreements in existence as of such date which relate to
the acquisition, development, use, management, operation or occupancy of
the Project;
(13) A current ALTA Preliminary Title Report covering the
Property, issued by the Title Company, showing all exceptions to title,
together with evidence satisfactory to the Bank that the Title Company
is prepared to issue each of the Title Policies, and written
confirmation addressed to the Trustee and the Bank that the Title
Company will (a) upon completion of the foundations of the Improvements,
issue CLTA Form 102.5 as an endorsement to each of the Title Policies,
and (b) upon completion of the Project, rewrite and reissue the Bond
Trustee Title Policy and the Bank Title Policy as ALTA Endorsement -Form
1 Coverage based on an as-built survey to be provided by the Company,
and including a CLTA Form 100 endorsement and such other endorsements as
the Bank may request;
(14) The Survey;
H-2
99
(15) A search of the records of the Office of the Secretary of
State of California and the Official Records of the County showing all
Uniform Commercial Code financing statements and fixture filings against
the Company and the Property or the Project or any part thereof or
interest therein;
(16) The certificates of insurance required under Subsection
6.2;
(17) The Construction Schedule;
(18) A certification from the Company that, to the best of the
Company's knowledge, no condemnation proceedings are pending or
threatened which would impair in any way the full utilization of the
Project;
(19) A fully-executed set of Payment Request Documents (as
defined in Appendix I (Construction Covenants and Disbursement
Procedures)) for the amount of the first Disbursement;
(20) Certified copies of the Company's articles of
incorporation, bylaws, certificate of good standing from the Secretary
of State of the State of California, and certificates of fictitious
business name statements, if applicable, for the Company;
(21) Evidence, which may be in the form of a letter from an
insurance broker or municipal engineer, (a) as to whether the Property
is located in an area designated by the U.S. Department of Housing and
Urban Development as having special flood or mudslide hazards, and (b)
as to whether the community in which the Property is located
participates in a National Flood Insurance Program;
(22) A soils test report prepared by a licensed soils engineer
approved by the Bank, showing the locations of, and containing boring
logs for, all borings, together with recommendations for the design of
the foundations, paved areas and underground utilities for the Project;
(23) Evidence reasonably acceptable to the Bank, which may be in
the form of letters from local utility companies or local authorities,
that (a) telephone service, gas, electric power, storm, sewer, sanitary
sewer and water facilities are available to the Premises; (b) such
utilities are adequate to serve the Project and exist at the boundary of
the Project; and (c) no conditions exist to affect the Company's right
to connect into and have unlimited use of such utilities except for the
payment of a normal connection charge and except for the payment of
subsequent charges for such services to the utility supplier;
(24) Financial statements of the Company, including without
limitation, a balance sheet, cash flow statement and a profit and loss
statement for each of the three most recent fiscal years, certified by
the chief
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100
financial officer of each such party, or at the Bank's request certified
by a certified public accountant, and, if requested by the Bank, copies
of all federal income tax returns and supporting schedules prepared or
filed by the Company on or before such date, and for the three most
recent fiscal years; and
(25) Such other items as the Bank may reasonably require.
H-4
101
EXHIBIT I
TEMECULA PROJECT
COST ESTIMATE AND TIME TABLE
REVISED 8/7/85
ORIGINAL
TYPE SUPPLIER COST BUDGET FINISH
-------------------------- ------- -------- -------- ------
A) Architecture Kulweic $117,584 $140,000 June
-------- --------
B) Building: HMH
1 - Earthwork $ 55,300 June 30
2 - Site Utilities 33,900 July 31
3 - Storm Drain 7,145 August
4 - Asphalt paving 101,717 Nov. 15
5 - Chain link fence 13,250 Dec. 15
6 - Landscape and Irrigation 27,855 Dec. 21
7 - Fine Grade and Fill Planters 5,000 Nov. 30
8 - Building and Site Concrete 653,211 Oct. 31
9 - Concrete floor seal 1,625 Nov. 15
10 - Structural Steel 65,689 Oct. 31
11 - Rough carpentry 49,661 Oct. 31
12 - Panelized Roof 171,998 Sept. 30
13 - Truss Joist 6,000 Oct. 15
14 - Cabinet Work 1,950 Nov. 30
15 - Thermal & Sound Insulation 10,611 Oct. 31
16 - Cooler Construction 264,856 Oct. 25
17 - Built up Roofing 49,900 Oct. 15
18 - Flashing and Sheet Metal 8,250 Oct. 15
19 - Skylights and Roof Hatch 3,789 Oct. 15
20 - Sealants and Caulking 5,000 Oct. 31
21 - Doors, Frames and Hardware 11,000 Nov. 15
22 - Install Doors and Frames 2,240 Nov. 15
23 - Overhead Coiling Doors 26,000 Nov. 15
24 - Glass and Glazing 14,234 Nov. 21
25 - Lath and Plaster 8,500 Oct. 31
26 - Gypsum Drywall 21,700 Nov. 15
27 - Ceramic Tile 11,624 Nov. 21
28 - Acoustical Tile 8,474 Dec. 15
29 - Carpet and Resilent Tile 9,474 Dec. 15
102
Temecula Project
Cost Estimate and Time Table
Revised 8/7/85
Page Two
Original
Type Supplier Cost Budget Finish
------------------------------------------- ---------- ---------- ----------- ----------
30 - Painting $ 75,000 Dec. 21
31 - Toilet Partition 2,559 Dec. 15
32 - Toilet Accessories 2,921 Dec. 15
33 - Dock Equipment 9,496 Nov. 30
34 - Plumbing 63,600 Dec. 21
35 - HV & AC 148,875 Dec. 21
36 - Fire Sprinklers 92,000 Dec. 15
37 - Cooler Pads/Condensable Pipe 8,500 Nov. 15
38 - Electrical 226,200 Dec. 21
39 - Light Pole Bases 3,000 Nov. 30
40 - Interior Plenum Walls 24,952 Oct. 21
41 - Super. and Misc. Job Expense 72,500 Dec. 31
42 - Overhead and profit 130,894 Dec. 31
---------- ----------
TOTAL $2,510,778 $3,020,000
---------- ----------
C) Refrigeration Am. Refrig 328,702
----------
D) Electrical 135,000 135,000
E) Utility Connections SCE 2,112 --
F) Sizer Line ▇. ▇▇▇▇▇▇ 277,622 233,180
G) Bin Dump - Grading Line Packers Mfg 302,500 427,690
H) Packing Tubs (100) 77,910 71,250
I) Packer Stands (30) 14,278 22,800
J) Scales ▇▇▇▇▇▇ 14,000 14,000
K) Forklifts (8) Hyster 178,640 208,000
L) 5 Pallet forklift Hyster 51,767 65,000
M) Bin hoist 6,000 6,000
N) Vibrator count fill 10,000 --
O) Pallet jacks (2) 1,200 1,200
P) Box former and sealer Weyerhauser N/C N/C
Q) Pallet Squeeze Converter 5,000 8,600
103
Temecula Project
Cost Estimate and Time Table
Revised 8/7/85
Page Two
Original
Type Supplier Cost Budget Finish
------------------------------- ------------ ---------- ---------- --------
R) Shop Equipment $ 7,000 $ 7,000
S) Office Equipment and Lunch Room 10,000 10,000
T) Telephone system 12,000 12,000
U) Office Furniture 15,000 15,000
V) Computer IBM 10,000 10,000
W) Air Compressor 11,000 13,000
X) Bin Sanitizer ▇▇▇▇▇▇▇ 7,500 7,500
Y) Dry Matter Test Equipment 6,000 6,000
Z) Water Treatment System 3,000 3,000
AA) Day Coders ▇▇▇▇▇ 1,200 1,200
BB) Pack Station Stamps 2,000 2,000
CC) Freight 6,000 --
---------- ----------
Sub-Total $4,109,793 $4,439,620
Sales Tax 11,225 42,530
Interest on Project 248,500 248,500
Contingency 171,129 --
Permits and Fees 12,338
---------- ----------
TOTAL CONSTRUCTION COST $4,552,985 $4,730,650
========== ==========
104
EXHIBIT J
PLANS AND SPECIFICATIONS
FOR NEW PACKING HOUSE FOR
CALAVO GROWERS OF CALIFORNIA
DATED MAY 15, 1985, PREPARED BY KULWIET GROUP,
WHOSE ADDRESS IS ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ -- PROJECT NO. 8410051
--------------------------------------------------
- Cover Sheet No. C
- Information Sheet No. 1
- Topographic Survey No. C1
- Grading Plan - Sheet ▇▇. ▇ ▇▇ ▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇ & ▇▇ - ▇▇▇▇▇▇ Map 12549,
Revised 6-11-85
- Grading Plan - Sheet 2 of 2 for Parcels 11 & 16 - Parcel Map 12549, Revised
6-11-85
- Site Plan - Sheet No. A1
- Site Plan Details and Off-Site Wall Elevations - Sheet No. A2
- Overall Floor Plan - Sheet No. A3
- Overall Reflected Ceiling Plan - Sheet No. A4
- Roof Plan - Sheet No. A5
- Partial Floor Plan - Sheet No. A6
- Partial Reflected Ceiling Plan - Sheet No. A7
- Exterior Elevations - Sheet No. A8
- Sections - Sheet No. A9
- Sections - Sheet No. A10
- Toilet Floor Plans Interior Elevations - Sheet No. A11
- Room Finish, Door & Window Schedules - Sheet No. A12
- Details - Sheet No. A13
- Details - Sheet No. A14
- Details - Sheet No. A14.5
- Specifications - Sheets ▇▇. ▇▇▇, ▇▇▇, ▇▇▇, ▇▇▇
▇
▇▇▇
- ▇▇▇▇▇▇▇ Notes & Typical Details - No. S1
- Off-Site Foundation Plan - No. S2
- Foundation Plan - No. S3
- Roof Framing Plan - No. S4
- Panel Elevations - Panels 1 thru 38 - No. S5
- Panel Elevations - Panels 39 thru 86 - No. S6
- Panel Elevations - Panels 87 thru 108 and Sections - No. S7
- Foundation Sections & Details - No. S8
- Framing Sections & Details - No. S9
- Details - No. S10
- Singleline Diagram - No. E-1
- Electrical Site Plan - No. E-2
- Details - No. E-3
- Lighting Plan - No. E-4
- Power & Comm. Plan - No. E-5
- Lighting Plan - No. E-6
- Power & Comm. Plan - Offices, Lunchroom, Shipping Office, Drivers' Room and
Shop Area - No. E-7
- Lighting Schedule - Panel Schedule - No. E-8
- Panel Schedules - No. E-9
- Electrical Specs. - No. E-10
- Cover Sheet - Symbols, etc. - No. MP-1
- Building HVAC Layout - No. M-1
- Office Areas HVAC - Layout - No. M-2
- HVAC Roof Plan - No. M-3
- Equipment Schedules - No. M-4
2
106
- Details - No. MP-5
- Mechanical Specs. - No. MP-6
- Site Plan - No. P-1
- Building Plumbing - Layout - No. P-2
- Restroom Layout and Isometrics - No. P-3
- Roof Drains - No. P-4
- Planting Plan - No. L-1
- Planting Plan - NO. L-2
- Irrigation Plan - No. L-3
- Irrigation Plan - No. L-4
- Details & Specs. - No. L-5
3
