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Exhibit 4.2(c)
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THE HERTFORD COUNTY INDUSTRIAL FACILITIES AND
POLLUTION CONTROL FINANCING AUTHORITY
as the Issuer
and
EASCO CORPORATION
as the Company
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LOAN AGREEMENT
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Dated as of
November 1, 1998
Relating to
$6,000,000
The Hertford County Industrial Facilities and
Pollution Control Financing Authority
Industrial Development Revenue Bonds
(Easco Corporation Project), Series 1998
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All right, title and interest, excluding Reserved Rights (as defined herein) of
the Issuer in this Loan Agreement have been pledged and assigned to PNC Bank,
National Association, as Trustee under a Trust Indenture dated as of November 1,
1998 between the Issuer and the Trustee, and are subject to the security
interest of the Trustee thereunder.
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TABLE OF CONTENTS
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Page
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ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1 Definitions...............................................................2
Section 1.2 Definitions Contained in the Indenture....................................5
Section 1.3 General Rules of Construction.............................................5
Section 1.4 Representations, Warranties and Covenants of the Company..................5
Section 1.5 Tax-Exempt Status of Bonds................................................6
Section 1.6 Representations, Warranties and Covenants of the Issuer..................10
Section 1.7. No Representation or Warranty by Issuer as to Project...................12
ARTICLE 2
FINANCING OF PROJECT
Section 2.1 Issuance of Bonds........................................................12
Section 2.2 Construction Fund........................................................13
Section 2.3 Fixed Rate...............................................................13
Section 2.4 Completion of Project; Excess Bond Proceeds..............................13
Section 2.5 Investment of Moneys.....................................................14
ARTICLE 3
LOAN OF PROCEEDS TO COMPANY; NOTE
Section 3.1 Loan of Bond Proceeds....................................................14
Section 3.2 Credits to Company.......................................................14
Section 3.3 Note.....................................................................14
Section 3.4 Additional Loan Repayments...............................................15
Section 3.5 Letter of Credit.........................................................15
Section 3.6 Issuer and Company to Cooperate in Redemption of Bonds...................16
Section 3.7 No Defense or Set-Off....................................................16
Section 3.8 Assignment of Issuer's Rights............................................16
Section 3.9 Acceleration of Payment to Redeem Bonds..................................16
Section 3.10 Security................................................................16
ARTICLE 4
COVENANTS OF COMPANY
Section 4.1 Maintenance and Operation of Project.....................................17
Section 4.2 Maintenance of Existence; Merger; Asset Transfer.........................17
Section 4.3 Payment of Issuer's Fees and Expenses....................................18
Section 4.4 Indemnity Against Claims.................................................18
Section 4.5 Damage to or Condemnation of Project.....................................19
Section 4.6 Taxes, Other Governmental Charges and Utility Charges....................20
Section 4.7 Insurance................................................................20
Section 4.8 Company's Lease of Project Facilities....................................20
Section 4.9 Compliance with Laws.....................................................21
Section 4.10 Arbitrage Covenant......................................................21
Section 4.11 Financing Statements....................................................22
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Section 4.12 Notice and Certification With Respect to Bankruptcy Proceedings.........22
Section 4.13 Annual Report of Outstanding Bonds......................................22
Section 4.14 Granting of Easements...................................................22
Section 4.15 Limitation of Liens.....................................................23
Section 4.16 Access to the Project...................................................23
Section 4.17 Control by Bank.........................................................23
ARTICLE 5
EVENTS OF DEFAULT AND REMEDIES
Section 5.1 Events of Default; Acceleration..........................................23
Section 5.2 Payment on Default; Suit Therefor........................................25
Section 5.3 Other Remedies...........................................................25
Section 5.4 Cumulative Rights........................................................25
Section 5.5 Waiver...................................................................26
ARTICLE 6
MISCELLANEOUS
Section 6.1 Limitation of Liability of Issuer........................................26
Section 6.2 Notices..................................................................26
Section 6.3 Severability.............................................................27
Section 6.4 Applicable Law...........................................................27
Section 6.5 Assignment; Successors and Assigns.......................................27
Section 6.6 Enforcement of Certain Provisions by the Bank............................28
Section 6.7 Amendments...............................................................28
Section 6.8 Term of Agreement........................................................28
Section 6.9 Amounts Remaining in Bond Fund...........................................28
Section 6.10 Compliance With Indenture...............................................28
Section 6.11 Headings................................................................28
Section 6.12 Counterparts............................................................29
Section 6.13 No Third-Party Beneficiaries............................................29
Exhibit A - Form of Note........................................................A-1
Exhibit B - Project Site........................................................B-1
Exhibit C - Project Facilities..................................................C-1
Exhibit D - Form of Requisition Certificate.....................................D-1
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THIS LOAN AGREEMENT (the "Agreement") dated as of November 1,
1998 is made by and between THE HERTFORD COUNTY INDUSTRIAL FACILITIES AND
POLLUTION CONTROL FINANCING AUTHORITY (the "Issuer"), a body politic and
corporate and political subdivision duly created, organized and existing under
the laws and Constitution of the State of North Carolina, and EASCO CORPORATION
(the "Company"), a corporation duly organized and existing under the laws of the
State of Maryland, under the following circumstances summarized in the following
recitals (the capitalized terms not defined in the recitals being used therein
as defined in Article I hereof):
RECITALS
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WHEREAS, the Industrial and Pollution Control Facilities Financing Act,
Chapter 159C of the General Statutes of North Carolina, as amended (the "Act"),
authorizes the creation of industrial facilities and pollution control financing
authorities by the several counties in North Carolina and empowers such
authorities to acquire, construct, own, repair, maintain, extend, improve,
rehabilitate, renovate, furnish, equip and sell, lease, exchange, transfer or
otherwise dispose of industrial or manufacturing facilities to the end that such
authorities may be able to promote the right to gainful employment opportunity
and private industry and thereby promote the general welfare of the inhabitants
of North Carolina by exercising such powers to aid in financing industrial or
manufacturing facilities for the purpose of alleviating unemployment or raising
below average manufacturing wages, and further authorizes such authorities to
loan to others the proceeds of bonds issued for the purpose of paying for all or
any part of an industrial or manufacturing facility, to mortgage and pledge any
or all of such facilities, whether then owned or thereafter acquired, as
security for the payment of the principal of, premium, if any, and interest on
any such bonds and any agreements made in connection therewith and to pledge or
assign the revenues and receipts from such facilities or loan or from any other
source to the payment of such bonds; and
WHEREAS, the Issuer has been duly organized pursuant to the Act; and
WHEREAS, in order to further the purposes of the Act, the Issuer
proposes to undertake the financing of the acquisition, installation and
equipping a facility for the manufacture of aluminum billets (the "Project") in
Hertford County, North Carolina, which constitutes an industrial project under
the Act, and to obtain the funds therefor by the issuance of its Bonds (as
hereinafter defined) under a Trust Indenture securing such Bonds, between the
Issuer and PNC Bank, National Association, Pittsburgh, Pennsylvania, as Trustee,
dated as of the date hereof (the "Indenture"); and
WHEREAS, the Issuer proposes to loan the proceeds from the sale of the
Bonds to the Company to acquire and install the Project upon the terms and
conditions hereinafter set forth; and
WHEREAS, the Company and Bank of America National Trust and Savings
Association (the "Bank"), will enter into a Letter of Credit Agreement (the
"Credit Agreement") dated as of the date hereof pursuant to which the Bank will
issue an irrevocable direct-pay letter of credit in an amount not to exceed
$6,098,631 (calculated as the initial principal amount of the Bonds plus 60
days' interest computed at an assumed rate of 10% per annum based on a 365 day
year, rounded up to the nearest dollar) to the Paying Agent at the request and
for the account of the Company upon the terms set forth in the Credit Agreement
for payment of the principal of and interest on, when due, the Bonds, for so
long as the Bonds bear interest at the Variable Rate; and
WHEREAS, it has been determined that the financing of the Project will
require the issuance, sale and delivery by the Issuer of a series of bonds in
the aggregate principal amount of Six Million and No/100 Dollars ($6,000,000)
(the "Bonds");
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NOW THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, the parties hereto covenant, agree and bind
themselves as follows: provided, that any obligation of the Issuer created by or
arising out of this Agreement shall never constitute a debt or a pledge of the
faith and credit or the taxing power of the Issuer or any political subdivision
or taxing district of the State of North Carolina but shall be payable solely
out of the Trust Estate (as defined in the Indenture), anything herein contained
to the contrary by implication or otherwise notwithstanding:
ARTICLE 1
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DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1 DEFINITIONS. The terms defined in this Article 1
shall for all purposes of this Agreement have the meanings herein specified,
unless the context clearly otherwise requires:
"Act" means the Industrial and Pollution Control Facilities
Financing Act, Chapter 159C of the North Carolina General Statutes, as now in
effect and as it may from time to time be amended or supplemented.
"Additional Loan Repayments" means those payments to be paid
by the Company, in addition to the Loan Repayments, pursuant to Section 3.4
hereof.
"Agreement" means this Loan Agreement, as the same may be
amended in accordance with its terms and the terms of the Indenture.
"Bank" means Bank of America National Trust and Savings
Association, Chicago, Illinois, as issuer of the Original Letter of Credit, and
the bank or financial institution issuing any subsequent replacement Letter of
Credit.
"Bond" or "Bonds" means any of The Hertford County Industrial
Facilities and Pollution Control Financing Authority Industrial Development
Revenue Bonds (Easco Corporation Project), Series 1998, issued under the
Indenture.
"Bond Counsel" means, initially, Hunton & Xxxxxxxx, Raleigh,
North Carolina, and any counsel named in the list of "Municipal Bond Attorneys"
published in the then current edition of The Bond Buyer's DIRECTORY OF MUNICIPAL
BOND DEALERS or counsel determined by the Trustee to be qualified to pass upon
legal questions related to municipal bonds.
"Bond Documents" means, collectively, the Placement Agreement,
the Indenture, this Agreement, the Note and the Bonds.
"Bondholder" means the registered owner of any Bond.
"Bond Resolution" means the resolution adopted by the Issuer
on October 20, 1998, authorizing, INTER ALIA, the issuance, sale and delivery of
the Bonds.
"Closing" means the concurrent initial delivery of the Bonds
against initial payment therefor.
"Closing Date" means the date of the Closing.
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"Code" means the Internal Revenue Code of 1986, as amended,
and the rules and regulations promulgated or in effect thereunder.
"Company" means Easco Corporation, a corporation duly
organized and existing under the laws of the State of Maryland.
"Condemnation Award" means any award or payment (less any
expenses, including attorneys fees, incurred by the Issuer, the Trustee, the
Bank and the Company in connection therewith) which may be made with respect to
the Project as a result of (i) the taking of all or any portion of the Project
by the exercise of the right of eminent domain by any governmental body, or by
any person, firm or corporation acting under a governmental body, or by any
person, firm or corporation acting under governmental authority (or a bona fide
sale in lieu of such taking) or (ii) the alteration of the grade of any street.
"Event of Default" means any of the events described in
Section 5.1 hereof.
"Event of Taxability" means any event, act or omission that
may cause the interest on the Bonds to be includable in the gross income of the
owners thereof (other than an owner holder who is a "substantial user" within
the meaning of Section 147(a) of the Code or a Related Person thereof).
"Financing Documents" means, collectively, the Bond Documents,
the Credit Agreement and the Remarketing Agreement, and the documents delivered
in connection with any of the foregoing.
"Force Majeure" means any cause, circumstance or event not
reasonably within the control of the Company, including, without limitation, the
following: acts of God; strikes, lockouts or other industrial disturbances; acts
of public enemies; orders or restraints of any kind of the government of the
United States or of the State of North Carolina, or any of their departments,
agencies, political subdivisions or officials; civil disturbances; riots;
epidemics; landslides; lightning; earthquakes; fires; hurricanes; storms;
droughts; floods; washouts; arrests; restraint of government and people;
explosions; breakage, malfunction or accident to facilities, machinery,
transmission pipes or canals; partial or entire failure of utilities; and
shortages of labor, materials, supplies or transportation.
"Indenture" means the Trust Indenture dated of even date
herewith between the Issuer and the Trustee, as amended or supplemented at the
time in question.
"Inducement Resolution" means the resolution adopted by the
Issuer on October 14, 1997, respecting the Bonds and the Project.
"Issuance Costs" means all reasonable costs incurred in
connection with the issuance of the Bonds, including without limitation, all
financial, legal, accounting and appraisal costs; the Issuer's actual
out-of-pocket expenses; the costs of printing and reproduction; the initial fees
of the Trustee (including the first year's annual fee), the Remarketing Advisor
and any Paying Agent; all costs, fees and expenses related to the Original
Letter of Credit; the costs of filing or recording any Financing Documents; and
all other reasonable costs incident to the issuance, sale and delivery of the
Bonds.
"Letter of Credit" means the Original Letter of Credit or any
letter of credit substituted therefor or any replacement letter of credit
delivered to the Paying Agent pursuant to Article 6 of the Indenture or any
Fixed Rate Letter of Credit (as defined in the Indenture).
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"LGC" means the Local Government Commission, a division of the
North Carolina Department of State Treasurer, and any successor or successors
thereto.
"Loan Repayments" means the loan repayments to be paid by the
Company pursuant to Section 3.1 hereof.
"Note" means the promissory note of the Company dated the
Closing Date and otherwise in substantially the same form as is set forth in
EXHIBIT A hereto.
"Original Letter of Credit" means the Bank's Irrevocable
Letter of Credit No. _____________, dated the Closing Date, issued in favor of
the Paying Agent, for the account of the Company.
"Paying Agent" means the Person appointed as such by the
Issuer and accepting such appointment for the time being pursuant to Article 12
of the Indenture.
"Placement Agreement" means the Placement Agreement dated as
of November 1, 1998 among the Issuer, the Company, and PNC Capital Markets,
Inc., providing for the initial placement and delivery of the Bonds.
"Principal User" means a "principal user" within the meaning
of Section 144(a) of the Code.
"Project" means the Project Site and the Project Facilities.
Any reference to construction and installation of the Project includes all work
necessary to plan and design the Project and all work necessary to prepare the
Project Site or any part thereof for the construction and installation of any
part of the Project Facilities, including any necessary excavation and site
preparation work, the design and construction of such foundation and structures
as shall be necessary or desirable in connection with the Project and the
modification of existing parts of the Project to such extent as shall be
necessary to complete the Project.
"Project Facilities" or "Facilities" means the manufacturing
facility on the Project Site and all fixtures, machinery and equipment and other
items of tangible personal property located or installed at the Project Site,
the costs of which, in whole or in part, are paid by the Company, or reimbursed
to the Company as Costs of the Project, from the proceeds of the Bonds,
including all accessions thereto, modifications thereof, and replacements
therefor, as such real estate improvements, fixtures, machinery and equipment
are more specifically described in EXHIBIT C hereto.
"Project Site" means the land described in EXHIBIT B hereto.
"Related Person" means a "related person" as defined in
Section 144(a)(3) of the Code.
"Remarketing Advisor" means PNC Capital Markets, Inc. and its
successors in such capacity as provided in Article 13 of the Indenture.
"Remarketing Agreement" means the Remarketing Agreement dated
as of November 1, 1998, between the Company and the Remarketing Advisor or any
agreement executed by the Company and any subsequent Remarketing Advisor
appointed pursuant to the Indenture.
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"Reserved Rights" means the rights of the Issuer to receive
payments under Sections 1.6(Q) and 3.4 and 4.3 hereof, the right of
indemnification under Section 4.4 hereof, the right to give consent to
amendments of this Agreement and approvals as provided in this Agreement, and
the right to receive reports.
"State" means the State of North Carolina.
"Trustee" means PNC Bank, National Association, Pittsburgh,
Pennsylvania, and its successors in trust under the Indenture.
Section 1.2 DEFINITIONS CONTAINED IN THE INDENTURE. Unless the
context clearly indicates a different meaning, other words, terms or phrases
which are not defined in this Agreement, but which are defined in the Indenture,
shall have the meanings respectively given them in the Indenture.
Section 1.3 GENERAL RULES OF CONSTRUCTION.
A. Whenever in this Agreement the context requires:
(1) references to the singular number shall include
the plural and vice versa; and
(2) words denoting gender shall be construed to
include the masculine, feminine and neuter.
B. The Table of Contents and the titles given to any Article
or Section of this Agreement are for convenience of reference only and are not
intended to modify, amend or limit such Article or Section.
C. "Herein," "hereby," "hereunder," "hereof," hereinafter" and
other equivalent words refer to this Agreement in its entirety and not solely to
the particular portion in which any such word is used.
Section 1.4 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
COMPANY. The Company represents, warrants and covenants to the Issuer as
follows:
A. The Company is a corporation duly organized and validly
existing under the laws of the State of Maryland, authorized to do business in
the State of North Carolina, and has full power and authority to carry on the
business in which it is engaged and to execute, deliver and perform its
obligations under the Financing Documents to which it is a party.
B. The Company has duly authorized the execution and delivery
of the Financing Documents to which it is a party and all actions required to
perform its obligations thereunder, and no approval or other action by any
person is required in connection with the execution, delivery and performance
thereof other than that which has been obtained as of the date of execution
hereof.
C. The Financing Documents to which the Company is a party
have been duly executed and delivered by the Company, constitute the legal,
valid and binding obligations of the Company, and are enforceable in accordance
with their respective terms, except as their enforceability may be subject to
the exercise of judicial discretion in accordance with general equitable
principles, and to any applicable
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bankruptcy, insolvency, reorganization, moratorium and other laws for the relief
of debtors, to the extent that such laws may be constitutionally applied.
D. Except as disclosed in writing to the Issuer, the
Remarketing Advisor and any governmental entity required by law to be advised
prior to the Closing, to the best knowledge of the Company, there is no action,
suit, proceeding, inquiry or investigation, at law or in equity, or before or by
any court or public board or body, pending or, to the best knowledge of the
Company, threatened, against the Company:
(1) challenging the validity of, or seeking to enjoin
the performance by the Company of its obligations with respect
to, the Financing Documents to which the Company is a party;
or
(2) against or affecting the Company (nor to the best
knowledge of the Company is there any basis therefor) wherein
an unfavorable decision, ruling or finding would materially
and adversely affect any of the transactions contemplated by
the Financing Documents to which the Company is a party or
might result in any material adverse change in the business,
properties, condition (financial or otherwise), or operations
of the Company.
E. The Company has no present intention of abandoning the
Project or of operating or using the Project in any manner other than as
represented to the Issuer.
F. As of the Closing Date, the information provided by the
Company to the Issuer contained in the documents delivered at the Closing is
true and correct in all material respects, and such information does not and as
of its date did not include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements made therein, under the
circumstances in which they were made, not misleading.
Section 1.5 TAX-EXEMPT STATUS OF BONDS.
It is the intention of the parties hereto that the interest on
the Bonds not be included in gross income for federal income tax purposes, and
to that end the Company hereby represents, warrants and agrees, for the benefit
of the Issuer and the Bondholders, as follows:
A. The Project constitutes and will constitute either land or
property of a character subject to the allowance for depreciation under Section
167 of the Code.
B. At least ninety-five percent (95%) of the net proceeds of
the Bonds will be used to pay for, or to reimburse the Company for payment of,
the costs of the acquisition, construction and installation of the Project, and
will not be used, directly or indirectly, to provide working capital to the
Company or any Related Person to the Company. Except as permitted under the
Code, none of such costs will be for or with respect to obligations paid or
incurred prior to the adoption of the Inducement Resolution. All such costs will
be chargeable to the capital account of the Company for federal income tax
purposes or will be so chargeable either with a proper election by the Company
(for example under Section 266 of the Code) or but for a proper election by the
Company to deduct such amounts.
C. Neither the Company nor any other Principal User of the
Project, nor any Related Person to any of them, has taken or permitted to be
taken on its behalf any action which would adversely affect the exclusion of the
interest on the Bonds from gross income for federal income tax purposes. The
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Company will not take, or permit to be taken on its behalf or by or on behalf of
any such Principal User or Related Person, any action which would adversely
affect the exclusion from gross income of interest on the Bonds for federal
income tax purposes (including allowing any person to become a Principal User of
the Project). The Company will take and cause each such Principal User to take
such action as may from time to time be required under applicable law or
regulation, whether now in effect or hereafter enacted or promulgated, to
continue the exclusion of the interest on the Bonds from gross income for
federal income tax purposes.
D. The sum of (i) the principal amount of the Bonds and (ii)
the aggregate principal amount of all obligations issued, expenditures made and
obligations incurred during the three-year period ending on the Closing Date
with respect to the Project Facilities and any other facilities within Hertford
County, North Carolina, (including, without limitation, the leasing of
equipment) which constitute "Capital Expenditures" (within the meaning of
Section 144(a)(4) of the Code), other than those mentioned in Section
144(a)(4)(C) of the Code, by the Company, any other Principal User of the
Project, any Related Person of either, or otherwise with respect to the Project
Facilities, is not in excess of $10,000,000, and such sum, together with all
such Capital Expenditures assumed, made or incurred during the three-year period
beginning on the Closing Date, will not exceed $10,000,000.
E. Except as permitted under the Code, prior to the adoption
of the Inducement Resolution, neither the Company nor any Related Person to the
Company had entered into any binding agreement in connection with the
acquisition, construction or installation of the Project, no on-site work had
been commenced in connection with the acquisition, construction or installation
of the Project, and no off-site fabrication of any portion of the Project had
been commenced. The Company will complete the acquisition, construction and
installation of the Project on or before January 31, 1999.
F. Except for the Bonds, no bonds, notes or other obligations
of any state, territorial possession or any political subdivision of the United
States of America or any political subdivision of any of the foregoing or of the
District of Columbia have been issued and are now outstanding, the proceeds of
which have been or are to be used primarily with respect to the Facilities.
G. With respect to the Bonds, there are no other obligations
that are in whole or in part either an obligation of, or guaranteed or otherwise
secured by the credit of, the Company or are in whole or in part secured by the
Trust Estate and that have been, are being, or will be sold (i) at substantially
the same time, (ii) under a common plan of marketing, and (iii) at substantially
the same rate of interest.
H. The Company intends to operate and maintain the Project at
all times during the term of this Agreement, so long as Loan Repayments remain
to be paid, and does not know of any reason why the Project will not be so
operated and maintained by the Company in the absence of circumstances not now
anticipated by the Company or beyond its control.
I. In compliance with Section 147(b) of the Code, the average
weighted maturity of the Bonds does not exceed one hundred twenty percent (120%)
of the average reasonably expected economic life of the facilities being
financed by the Bonds.
J. Less than twenty-five percent (25%) of the net proceeds of
the Bonds are to be or will be used (directly or indirectly) for the acquisition
of land (or an interest therein). None of the net proceeds of the Bonds are to
be or will be used to provide depreciable farm property, as defined in Section
144(a)(11)(B) of the Code, with respect to which the Principal User is or will
be the same person or two or more Related Persons.
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K. None of the net proceeds of the Bonds are to be or will be
used for the acquisition of any property (or an interest therein) unless the
first use of such property by the Company is pursuant to such acquisition or
unless:
(i) With respect to the portion of the Project
consisting of one or more buildings, rehabilitation
expenditures have been, or will be made, on such building in
an amount equal to fifteen percent (15%) of the cost of
acquiring, constructing and installing such buildings (and
equipment, if located within a building and to be used in a
manner similar to its use prior to the acquisition,
construction and installation in the buildings) financed with
the net proceeds of the Bonds;
(ii) With respect to the portion of the Project
consisting of facilities other than buildings, rehabilitation
expenditures have been or will be made in an amount equal to
one hundred percent (100%) of the cost of acquiring,
constructing and installing such facilities (and equipment)
financed with the Net Proceeds of the Bonds;
(iii) As used herein, rehabilitation expenditures
means any amount properly chargeable to a capital account for
the rehabilitation of the building or facility incurred,
including amounts incurred by a successor to the Company, or
by the seller of the property under and pursuant to a sales
contract with the Company, within two years of the later of
the date on which that portion of the Project financed by the
net proceeds of the Bonds was acquired, constructed or
installed or the Closing Date, which shall include, in the
case of an integrated operation contained in a building before
its acquisition, rehabilitating or replacing existing
equipment, but excluding any expenditure described in Section
148(g)(2)(B) of the Code;
L. None of the proceeds of the Bonds are to be or will be used
to provide any private or commercial golf course, country club, massage parlor,
tennis club, skating facility (including roller skating, skateboarding and ice
skating), racquet sports facility (including any handball or racquetball court),
hot tub facility, suntan facility, racetrack, airplane, skybox or other private
luxury box, health club facility, facility primarily used for gambling, or store
the principal business of which is the sale of alcoholic beverages for
consumption off premises.
M. None of the proceeds of the Bonds will be used to provide a
facility the primary purpose of which is retail food and beverage services,
automobile sales or services, or the provision of recreation or entertainment.
N. There are no other "qualified bonds" (within the meaning of
Section 141(e) of the Code) which, together with the Bonds, are to be used with
respect to a single building, an enclosed shopping mall or a strip of offices,
stores or warehouses using substantially common facilities.
O. None of the proceeds of the Bonds will be used directly or
indirectly to provide residential real property for family units.
P. Ninety-five percent (95%) or more of the "net proceeds" (as
such term is defined in Section 150(2)(3) of the Code) of the Bonds are to be
used and will be used to provide a manufacturing facility (within the meaning of
Section 144(a)(12)(C) of the Code). Any office space included within the Project
will be located on the premises of the manufacturing facility and not more than
a de minimis amount
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of the functions to be performed at such office will not be directly related to
the day-to-day operations at such facility.
Q. The Company is expected to be the only Principal User of
the Project.
R. The Project Site is located on land more particularly
described on Exhibit B hereto, commonly known as Xxxxx 0, Xxx 000, Xxxxxxxx
Xxxx, Xxxxxx, Xxxxxxxx Xxxxxx, Xxxxx Xxxxxxxx. All of the Project Facilities
will be located on the Project Site.
S. The information contained in the Information Return for
Private Activity Bond Issues (IRS Form 8038) filed with respect to the Bonds
(except information with respect to the Issuer and issue price, as to which the
Company makes no warranty) or the Project Facilities is in all respects true,
correct and complete.
T. Neither the obligations of the Company under this Agreement
nor the Bonds are or will be "federally guaranteed," as defined in Section
149(b) of the Code.
U. The Company does not have on the date hereof and the
Company shall not permit any other Person to become a Principal User of the
Project prior to the date three (3) years after the Project is placed in service
if it has on the date hereof "outstanding tax-exempt facility-related bonds" (as
defined in Section 144(a)(10) of the Code) allocated to it, including its
allocable portion of the Bonds, in excess of $40,000,000 in the aggregate (such
allocation being pursuant to Section 144(a)(10) of the Code).
V. The total of all Issuance Costs paid for, with, or for
which the Company is reimbursed, from proceeds of the Bonds shall not exceed two
percent (2%) of the proceeds of the Bonds.
W. The Company covenants that, notwithstanding any other
provision of this Agreement, it will not knowingly take, or permit to be taken
on its behalf, any action which would impair the exclusion of interest on the
Bonds from gross income for purposes of federal income taxation, and that the
Company will take such reasonable actions as may be necessary from time to time
to continue such exclusion, including, without limitation, the preparation and
filing of any statements required to be filed by it in order to maintain such
exclusion.
X. The Company agrees to file with the Trustee, and to cause
any other Principal User of the Project to file with the Trustee, within ninety
(90) days of the close of each of the three (3) twelve-month periods next
succeeding the Closing Date, a certificate of an Authorized Representative that
the $10,000,000 limitation described above in Subsection D hereof has not been
exceeded as of the close of such twelve-month period.
Y. Promptly after the Company first becomes aware of any Event
of Taxability (as defined in the Indenture), the Company shall give written
notice thereof to the Issuer and the Trustee.
Subsequent to the issuance of the Bonds and prior to their
payment in full (or provision for the payment thereof having been made in
accordance with the provisions of the Indenture), neither this Agreement nor the
Note may be amended, changed, modified, altered or terminated except as
permitted herein and by the Indenture and with the written consent of the
Company, the Trustee and the Bank. Subject the provisions of the Indenture, the
Issuer, the Trustee, and the Company hereby agree to amend this Agreement to the
extent required or permitted, in the opinion of Bond Counsel, in order for
interest on the Bonds to be excluded from gross income for federal income tax
purposes under Section 103(a) of the Code.
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The party requesting such amendment shall notify the other party to this
Agreement and the Trustee of the proposed amendment, with a copy of such
requested amendment to Bond Counsel. To effect any such proposed amendments,
after review of such proposed amendment, there shall be rendered by Bond Counsel
a Favorable Opinion.
Section 1.6 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
ISSUER. The Issuer represents, warrants and covenants for the benefit of the
Company and the Bondholders, as follows:
A. The Issuer is a body public and corporate and political
subdivision, duly created, organized and existing under the Constitution and
laws of the State.
B. The Issuer has all requisite power, authority and right,
under the laws and Constitution of the State, including particularly the Act, to
execute and deliver the Bond Documents and all other instruments and documents
to be executed and delivered by the Issuer pursuant thereto, to perform and
observe the provisions thereof and to carry out the transactions contemplated
thereby. All official action on the part of the Issuer which is required for the
execution, delivery, performance and observance by the Issuer of the Bond
Documents has been duly authorized and effectively taken, and such execution,
delivery, acceptance, performance and observance by the Issuer do not contravene
applicable law or any contractual restriction binding on or affecting the
Issuer.
C. No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for the due execution and delivery (or acceptance) by the Issuer of,
and performance by the Issuer of its obligations under, the Bond Documents. The
Issuer has obtained approval of the issuance of the Bonds by the Governing Body
as required by Section 159C-4(d) of the Act, by the Secretary of the Department
of Commerce of the State required by Section 159C-7 of the Act and by the LGC
required by Sections 159C-6, -8 and -9 of the Act.
D. This Agreement is, and each other Bond Document when
delivered will be, a legal, valid and binding limited obligation of the Issuer
enforceable against the Issuer in accordance with its respective terms, except
as the enforceability thereof may be subject to judicial decision or limited by
applicable bankruptcy, insolvency, moratorium or other similar laws affecting
the enforcement of creditors' rights generally.
E. There is no default of the Issuer in the payment of the
principal of or interest on any of its indebtedness for borrowed money or under
any instrument or instruments or agreements under and subject to which any
indebtedness for borrowed money has been incurred which does or could affect the
validity and enforceability of the Bond Documents or the ability of the Issuer
to perform its obligations thereunder, and no event has occurred and is
continuing under the provisions of any such instrument or agreement which
constitutes or, with the lapse of time or the giving of notice, or both, would
constitute such a default.
F. With respect to the Bonds, there are no other obligations
of the Issuer that have been, are being or will be sold (i) at substantially the
same time, (ii) under a common plan of marketing, and (iii) at substantially the
same rate of interest.
G. There is pending or, to the knowledge of the undersigned
officers of the Issuer, threatened no action or proceeding before any court,
governmental agency or arbitrator (i) to restrain or enjoin the issuance or
delivery of the Bonds or the collection of any revenues pledged under the
Indenture,
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(ii) in any way contesting or affecting the authority for the issuance of the
Bonds or the validity of any of the Bond Documents or (iii) in any way
contesting the existence or powers of the Issuer.
H. To the knowledge of the undersigned officers of the Issuer,
except for the Bonds, no bonds, notes or other obligations of the Issuer have
been issued and are now outstanding, the proceeds of which have been used or are
to be used primarily with respect to the Facilities.
I. In connection with the authorization, issuance and sale of
the Bonds, the Issuer has complied with all applicable provisions of the
Constitution and laws of the State, including particularly the Act.
J. The Issuer has not assigned or pledged and will not assign
or pledge its interest in this Agreement for any purpose other than to secure
the Bonds under the Indenture. The Bonds constitute the only bonds or other
obligations of the Issuer in any manner payable from the revenues to be derived
from this Agreement, and except for the Bonds no bonds or other obligations have
been or will be issued in connection with this Agreement.
K. The Issuer is not in default under any of the provisions of
the laws of the State which default would affect its existence or its powers
referred to above in Subsection B hereof.
L. Immediately prior to the adoption of the Bond Resolution,
the Issuer held a public hearing with respect to the Bonds and the Project at
which all interested individuals were afforded a reasonable opportunity to
express their views, either orally or in writing, on the issuance of the Bonds
and the location and nature of the Project. Notice of such public hearing was
published in the Roanoke - Chowan News - Herald, a newspaper of general
circulation in Hertford County, North Carolina at least fourteen (14) days in
advance of the date of such hearing.
M. The Issuer has caused allocation of a portion of the
State's volume cap under Section 146 of the Code equal to the aggregate
principal amount of the Bonds.
N. No elected official, officer or employee of the Issuer, or
any agency acting on its behalf, has any interest whatsoever in the Company or
in the transactions contemplated by this Agreement.
O. The Issuer will not enter into any agreement or instrument
which might in any way prevent or materially impair its ability to perform its
obligations under the Bond Documents.
P. The Issuer will not consent or agree to any modification of
this Agreement or waive compliance with any of the terms thereof, unless any
such modification or waiver shall have been agreed to in writing by the Trustee
and the Bank.
Q. So long as any Bonds shall remain unpaid, the Issuer will,
upon request of the Trustee and provided that the Issuer shall be furnished with
sufficient funds to pay all costs and expenses (including reasonable attorneys'
fees) reasonably incurred by it as such costs and expenses accrue:
(1) take all action and do all things which it is
authorized by law to take and do in order to perform and observe all
covenants and agreements on its part to be performed and observed under
the Bond Documents; and
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(2) execute, acknowledge where appropriate, and
deliver from time to time, promptly at the request of the Trustee, all
such instruments and documents as in the reasonable opinions of the
Trustee and the Counsel to the Issuer (which opinions shall not be
unreasonably withheld or delayed) are necessary or desirable to carry
out the intent and purpose of the Bond Documents or any of them.
R. So long as any Bonds shall remain unpaid, the Issuer will
not, without the written consent of the Trustee:
(1) take any action which, directly or indirectly,
adversely affects its existence or powers under the laws of the State;
(2) take any action which would adversely affect the
exclusion of interest on the Bonds from gross income for purposes of
federal income taxation; or
(3) pledge any interest in this Agreement, or the
amounts to be derived from it, other than as contemplated by the
Indenture.
S. Notwithstanding anything herein contained to the contrary,
any obligation the Issuer may hereby incur for the payment of money shall not
constitute an indebtedness of the County or of the State or of any political
subdivision thereof within the meaning of any state constitutional provision or
statutory limitation and shall not give rise to a pecuniary liability of the
State or County or any political subdivision thereof, or constitute a charge
against the general credit or taxing power of said State or County or any
political subdivision thereof, but shall be limited obligations of the Issuer
payable solely from (i) the pledged revenues, (ii) revenues derived from the
sale of the Bonds, and (iii) amounts on deposit from time to time in the Bond
Fund, subject to the provisions of this Agreement and the Indenture permitting
the application thereof for the purposes and on the terms and conditions set
forth herein and therein.
Section 1.7. NO REPRESENTATION OR WARRANTY BY ISSUER AS TO PROJECT. THE
ISSUER MAKES NO REPRESENTATION OR WARRANTY WHATSOEVER CONCERNING THE USE OF THE
PROCEEDS OF THE SALE OF THE BONDS OR THE SUITABILITY OF THE PROJECT FOR THE
PURPOSE FOR WHICH IT IS BEING UNDERTAKEN BY THE COMPANY. The Issuer has not made
any independent investigation as to the feasibility or creditworthiness of the
Company. Any bond purchaser, assignee of the Agreement or any other party with
any interest in this transaction, shall make its own independent investigation
as to the creditworthiness and feasibility of the Project, independent of any
representation or warranties of the Issuer.
ARTICLE 2
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FINANCING OF PROJECT
Section 2.1 ISSUANCE OF BONDS. In order to finance the
Project, the Issuer, upon request of the Company, will issue and sell the Bonds
up to the maximum aggregate principal amount of $6,000,000. The Bonds will be
issued under and secured by the Indenture. The Bonds will be payable solely from
payments made by the Company pursuant to the terms hereof, or from other moneys
available for such purpose under the terms of the Indenture. The net proceeds of
the Bonds shall be applied pursuant to the Indenture and Section 2.2 and 2.4
hereof.
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Section 2.2 CONSTRUCTION FUND. The net proceeds of the Bonds
(exclusive of accrued interest, if any, deposited in the Bond Fund) will be
deposited by the Trustee in the Construction Fund established under the
Indenture for payment of Costs of the Project. Moneys on deposit in the
Construction Fund shall be disbursed by the Trustee to pay for, or reimburse the
Company for its payment of, the Costs of the Project, upon receipt by the
Trustee of the following:
A. A requisition certificate in the form of EXHIBIT D attached
to this Agreement, properly completed and signed by an Authorized Representative
and approved in writing by the Bank, dated not more than thirty (30) days prior
to the date of receipt thereof by the Trustee, requesting the payment or
reimbursement.
B. In the case of payments or reimbursements for Costs of the
Project constituting costs of the Project Facilities, the following items are
required:
(1) A certificate of the Authorized Representative
stating that the Persons to be paid from the requested disbursement, or
the Persons paid by the Company and for which reimbursement is sought,
have satisfactorily completed the work or the portion thereof and/or
furnished the materials or the portion thereof for which payment is
requested;
(2) A certificate of the Company listing all work
done or materials supplied since the last previous such certificate
delivered by the Company under this Section 2.2 and all mechanics' and
materialmen's lien waivers for such work and/or materials; and
(3) In case of payment or reimbursement for equipment
comprising a portion of the Project Facilities, an itemized listing of
all equipment, including exact nomenclature and serial number, if any,
bought or to be bought with the requested disbursement.
The Company agrees that the sums so requisitioned from the
Construction Fund will be used only for the Costs of the Project, and will not
be used for any other purpose. The Company shall have the right to enforce
payments from the Construction Fund upon compliance with the procedures set
forth in this Section 2.2; provided that during the continuance of an Event of
Default as defined in the Indenture, the Construction Fund shall be held for the
benefit of Bondholders in accordance with the provisions of the Indenture.
The Company acknowledges that the receipt by the Trustee of a
requisition signed by an Authorized Representative which appears to be properly
complete on its face shall be sufficient authorization for the Trustee to
disburse such amounts as may then be requested for disbursement.
Section 2.3 FIXED RATE. The Company shall not elect to
establish a Fixed Rate for the Bonds, unless it shall have first delivered to
the Trustee the Favorable Opinion required by the Indenture.
Section 2.4 COMPLETION OF PROJECT; EXCESS BOND PROCEEDS. When
the Company certifies to the Trustee and the Issuer, in the manner provided in
the Indenture, that the Project is complete, any amounts remaining in the
Construction Fund will be transferred to the Construction Fund Surplus Account
in the Bond Fund and applied by the Trustee in accordance with the Indenture.
Such application shall constitute payment of a portion of, and shall be credited
against, the Loan Repayments due from the Company to the Issuer. If for any
reason the amount in the Construction Fund is insufficient to pay all Costs of
the Project, the Company, nonetheless, will complete the Project and shall pay
all such additional costs
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from its own funds. The Company shall not be entitled to any reimbursement for
any such additional costs from the Issuer, the Trustee or any Bondholder; nor
shall it be entitled to any abatement, diminution or postponement of the Loan
Repayments.
Section 2.5 INVESTMENT OF MONEYS. Any moneys held as a part of
the Bond Fund, the Construction Fund or any other fund shall be invested or
reinvested by the Trustee, pursuant to the request and direction of the Company,
to the extent permitted by law, as set forth in Section 7.2 of the Indenture.
ARTICLE 3
---------
LOAN OF PROCEEDS TO COMPANY; NOTE
Section 3.1 LOAN OF BOND PROCEEDS. The Issuer agrees to lend
the proceeds of the Bonds to the Company, upon the terms and conditions set
forth herein in order to pay the Costs of the Project. The Company covenants and
agrees, upon the terms and conditions and according to the provisions set forth
herein and in the Note, to borrow the proceeds of the Bonds, to repay such loan,
with interest thereon, by delivering, or causing to be delivered, the Loan
Repayments on a timely basis (as more specifically described in Section 3.3
hereof), and to comply with all of its agreements and covenants herein set
forth.
Section 3.2 CREDITS TO COMPANY.
A. The Company shall be entitled to receive a current credit
against its Loan Repayments to the extent of the following amounts:
(1)The amount of any income arising from the
investment of funds on deposit in the Bond Fund; and
(2) The amount of any draws under the Letter of
Credit.
B. Should any amounts derived from the proceeds of the Bonds
(to the extent not applied for the acquisition and construction of the Project
or the purchase of machinery, equipment, and/or fixtures of like or greater
value), or of any insurance in respect of the Project, or of any Condemnation
Award, under this Agreement, be paid into the Bond Fund, such amounts shall be
used to redeem the Bonds (or reimburse the Bank for draws under the Letter of
Credit, the proceeds of which were used to effect such redemption) at the
earliest date permitted under the Indenture in the inverse order of maturities.
Section 3.3 NOTE.
A. Concurrently with the sale and delivery by the Issuer of
the Bonds, to evidence the indebtedness hereunder, the Company shall execute and
deliver to the Issuer the Note.
B. Payments by the Company to the Trustee in accordance with
the provisions of the Note shall constitute Loan Repayments as required under
Section 3.1 hereof. The Bonds shall be payable from moneys on deposit in the
Bond Fund, including draws under the Letter of Credit and payments made by the
Company to the Trustee of the principal of, premium, if any, and interest on the
Note, as provided in the Indenture. Upon the redemption of the Bonds at any time
upon the request of the Company, consistent with the terms and conditions of the
Indenture, the Company shall make a Loan Repayment equal to the proposed
principal payment, premium, if any, and interest due on the applicable date of
such redemption of
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the Bonds. Whenever payment, or provision therefor, has been made in respect of
the principal of (whether at maturity, upon redemption, or otherwise) and
interest on all or any portion of the Bonds in accordance with the Indenture,
the Note shall be deemed paid to the extent that such payment or provision
therefor has been made and is considered to be a payment of principal of, and/or
interest on, such Bonds. If such Bonds are thereby deemed paid in full, the Note
shall be canceled and returned to the Company. Subject to the foregoing or
unless the Company is entitled to a credit under this Agreement or the
Indenture, all payments shall be in the full amount required under the Note.
C. The payments required under Subsection B above shall be
paid by the Company directly to the Trustee for the account of the Issuer for
deposit in the General Account.
D. In any event, the payments required by Subsection B above
shall always be sufficient (supplemented, whenever appropriate, by the credits
hereinabove specified) to provide for the then current payment of principal of
and interest on the Bonds.
E. The Issuer agrees that contemporaneously with the Closing,
the Issuer shall establish with the Trustee the Bond Fund, and the Issuer agrees
that the Company shall remit or cause to be remitted the required Loan
Repayments under this Agreement directly to the Trustee by check or wire
transfer payable to the order of the Trustee, for deposit in the General
Account. The Issuer authorizes the payment of such required payments by the
Company to the Trustee for deposit in the General Account.
F. The Company's obligation to pay the Loan Repayments
hereunder shall commence on the Closing Date, with the first Loan Repayment
being due on or before the first Interest Payment Date.
G. No Loan Repayments need be made to the Issuer or to the
Trustee whenever and so long as the amount on deposit in the General Account is
sufficient, under the provisions of the Indenture, to retire the Bonds then
Outstanding.
Section 3.4 ADDITIONAL LOAN REPAYMENTS. The Company shall pay
as Additional Loan Repayments (a) all reasonable fees, charges, and expenses
(including attorneys' fees) of the Trustee for services under the Indenture,
including the Trustee's Extraordinary Fees and Expenses, (b) any amount required
to be paid by the Company under Section 4.10 hereof, (c) all taxes, impositions,
and other payments of whatever nature which the Company has agreed to pay or
assume under the provisions of this Agreement or the Note, (d) all reasonable
costs and expenses incident to the payment of the principal of and interest on
the Bonds as the same becomes due and payable, including all costs and expenses,
if any, in connection with the redemption and payment of the Bonds, and (e) all
reasonable expenses (including attorneys' fees) incurred by the Issuer and the
Trustee in connection with the enforcement of any rights under this Agreement,
the Note, or the Indenture.
The Company shall pay such Additional Loan Repayments directly
to the party entitled thereto, and such payment shall not be payable to any fund
or account with the Trustee. The Issuer acknowledges that the Company may
contest in good faith any Additional Loan Repayments.
Section 3.5 LETTER OF CREDIT. Concurrently with the issuance
by the Issuer of the Bonds, the Company shall cause the Bank to deliver the
Original Letter of Credit to the Trustee. The Company may also from time to time
cause the Letter of Credit to be extended or cause the delivery of another
Letter of Credit in replacement therefor, to the extent permitted by the terms
of the Indenture. It is anticipated that so long as any Letter of Credit is held
by the Paying Agent, all payments of principal of and
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interest on the Bonds will be funded from draws on the Letter of Credit and that
moneys representing Loan Repayments will be applied to reimburse the Bank for
such draws.
Section 3.6 ISSUER AND COMPANY TO COOPERATE IN REDEMPTION OF
BONDS. Whenever the Bonds are subject to optional redemption pursuant to the
Indenture, the Issuer will, but only upon the written request of the Company,
direct the Trustee to call the same for redemption as provided in the Indenture.
Whenever the Bonds are subject to mandatory redemption pursuant to the
Indenture, the Company will cooperate with the Issuer and the Trustee in
effecting such redemption and will deliver to the Trustee moneys sufficient to
redeem the Bonds in accordance with mandatory redemption provisions relating
thereto as may be set forth in Article 8 of the Indenture.
Section 3.7 NO DEFENSE OR SET-OFF. The obligations of the
Company to make or cause to be made the Loan Repayments and the Additional Loan
Repayments under this Agreement and the Note shall be absolute and
unconditional, without defense or set-off by reason of any default by the Issuer
under this Agreement or under any other agreement between the Company and the
Issuer or for any other reason, including without limitation, any acts or
circumstances that may constitute failure of consideration, destruction of or
damage to the Project, commercial frustration of purpose, or failure of the
Issuer to perform and observe any agreement, whether express or implied, or any
duty, liability or obligation arising out of or connected with this Agreement,
it being the intention of the parties that the Loan Repayments and the
Additional Loan Repayments required of the Company hereunder will be paid in
full when due without any delay or diminution whatsoever. Loan Repayments shall
be received by the Issuer or the Trustee as net sums and the Company agrees to
pay or cause to be paid all charges against or which might diminish such net
sums.
Section 3.8 ASSIGNMENT OF ISSUER'S RIGHTS. As security for the
payment of the Bonds, the Issuer, herein and in the Indenture, assigns to the
Trustee all of the Issuer's rights under this Agreement (except Reserved
Rights). The Company consents to such assignment and agrees to make the Loan
Repayments or cause the Loan Repayments to be made directly to the Trustee,
without defense or set-off by reason of any dispute between the Company and the
Trustee. Whenever the Company is required to obtain the consent of the Issuer
hereunder, the Company shall also obtain the consent of the Trustee.
Section 3.9 ACCELERATION OF PAYMENT TO REDEEM BONDS. In the
event of any optional or mandatory redemption of the Bonds, the Company will pay
or cause to be paid on or before the date of redemption an amount equal to the
applicable redemption price as a prepayment of that portion of the amount then
outstanding under this Agreement corresponding to the principal of the Bonds to
be redeemed, together with applicable premium (if any) and interest accrued to
the date of redemption.
Section 3.10 SECURITY. In order to secure its obligations
hereunder, the Company agrees that the Issuer shall have a security interest in
all the Company's right, title and interest in and to all funds and investments
thereof now or hereafter held by the Trustee or the Paying Agent under the
Indenture as security for the payment of the Bonds, including without
limitation, any and all payment funds, debt service funds and other funds and
securities and other instruments comprising investments thereof and interest and
other income derived therefrom held as security for the payment of the Bonds.
The terms of this Section 3.10 shall constitute a security agreement within the
meaning of the State Uniform Commercial Code.
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ARTICLE 4
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COVENANTS OF COMPANY
Section 4.1 MAINTENANCE AND OPERATION OF PROJECT.
A. During the term of this Agreement, the Company will, at its
own cost and expense, keep and maintain, or cause to be kept and maintained, in
good repair and condition (excepting reasonable wear and tear) the Project and
all additions and improvements thereto, and pay, or cause to be paid, any
utility charges and other costs and expenses arising out of its occupancy of the
Project; provided that this covenant shall not prevent the Company from
assigning its interest in the Project pursuant to Section 6.5 hereof.
B. The Company agrees to timely pay for any improvements to
the Project and to comply in all material respects, at its own cost and expense,
with all lawful and enforceable notices received from public authorities from
and after the date hereof which affect the Project and the use and operation
thereof, other than those improvements to the Project, the validity or
application of which is at the time being contested, in whole or in part, in
good faith by appropriate proceedings.
C. The Company will maintain and use the Project Facilities as
an "industrial project for industry" within the meaning of the Act and
manufacturing facility or, subject to the provisions of Section 4.8 hereof,
lease them to tenants for such use and will not use or permit the use of the
Project Facilities in any manner which would result in a violation of Section
144(a)(8) or Section 147(e) of the Code.
D. The Company shall obtain or cause to be obtained all
necessary permits and approvals for the acquisition, operation and maintenance
of the Project and shall comply with all lawful requirements of any governmental
body regarding the use or condition of the Project or any of its component
parts. The Company may, however, contest any such requirement by an appropriate
proceeding diligently prosecuted.
E. The Company shall maintain a set of plans and
specifications at the Project Site which shall be available to the Issuer, the
Trustee and the Bank for inspection and examination during the Company's regular
business hours, and the Issuer and the Company agree that the Company may
supplement, amend and add to such plans and specifications, and that the Company
shall be authorized to omit or make substitutions for components of the Project,
without approval of the Issuer, provided that no such change shall be made which
shall cause the Project to be non-compliant with the Act or the Code, and
provided further that if any such change would render materially incorrect or
incomplete the description of the initial components of the Project or the
description of the Project as set forth in Exhibit C to this Agreement, the
Company and the Issuer shall amend such Exhibit C to reflect such change, upon
receipt by the Issuer, the Trustee, and the Bank of an opinion of Bond Counsel
that such change will not result in an Event of Taxability. No approval of the
Issuer or the Trustee shall be required for the acquisition of the Project or
for the solicitation, negotiation, award or execution of contracts relating
thereto.
Section 4.2 MAINTENANCE OF EXISTENCE; MERGER; ASSET TRANSFER.
So long as this Agreement is in effect, the Company agrees that it will maintain
its existence, will not dissolve or otherwise dispose of all or substantially
all of its assets and will not consolidate with or merge into another
corporation or permit one or more other corporations to consolidate with or
merge into it, except either with the consent of the Bank or as provided in the
Credit Agreement; if a Credit Facility is not in effect, the Company agrees
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that it will continue to be a corporation organized under the laws of the State
of Maryland, will maintain its corporate existence, will maintain its authority
to do business in the State, will not dissolve or otherwise dispose of all or
substantially all of its assets and will not consolidate with or merge into
another corporation or permit one or more corporations to consolidate with or
merge into it; provided, that the Company may, without violating the foregoing,
consolidate with or merge into another corporation, or permit one or more
corporations to consolidate with or merge into it, or transfer all or
substantially all of its assets to another such corporation (and thereafter
dissolve or not dissolve, as the Company may elect) if the corporation surviving
such merger or resulting from such consolidation, or the corporation to which
all or substantially all of the assets of the Company are transferred, as the
case may be: (i) is a corporation organized under the laws of the United States
of America, or any state, district or territory thereof, and qualified to do
business in the State; (ii) shall expressly in writing assume all of the
obligations of the Company contained in this Agreement; (iii) has a consolidated
tangible net worth (after giving effect to such consolidation, merger or
transfer) of not less than the consolidated tangible net worth of the Company
and its consolidated subsidiaries immediately prior to such consolidation,
merger or transfer; (iv) shall notify each Person identified in Section 6.2
hereof of the name and address of such corporation surviving such merger or
resulting from such consolidation, or the corporation to which all or
substantially all of the assets of the Company are transferred; and (v) provided
that no Event of Default has occurred and is continuing hereunder.
The term "consolidated tangible net worth," as used in this Section,
shall mean the difference obtained by subtracting total consolidated liabilities
(not including as a liability any capital or surplus item) from total
consolidated tangible assets of the Company and all of its consolidated
subsidiaries, computed in accordance with generally accepted accounting
principles. Prior to any such consolidation, merger or transfer the Trustee
shall be furnished a certificate from the chief financial officer of the Company
or his/her deputy stating that in the opinion of such officer none of the
covenants in this Agreement will be violated as a result of said consolidation,
merger or transfer.
Section 4.3 PAYMENT OF ISSUER'S FEES AND EXPENSES. Except to
the extent payment is provided from the Construction Fund, the Company will pay
the Issuer's fees and all reasonable expenses, including legal and accounting
fees, incurred by the Issuer in connection with the issuance of the Bonds and
the performance by the Issuer of its functions and duties under this Agreement
and the Indenture.
Section 4.4 INDEMNITY AGAINST CLAIMS. In the exercise of the
powers of the Issuer, the Trustee or the Paying Agent under the Indenture or
hereunder, including (without limiting the foregoing) the application of moneys,
the investment of funds and the letting or other disposition of the Project upon
the occurrence of an Event of Default, neither the Issuer, the Trustee, the
Paying Agent, the LGC, the Governing Body, nor their respective members,
directors, officers, employees or agents shall be accountable to the Company for
any action taken or omitted by any of them in good faith and with the reasonable
belief that it is authorized or within the discretion or rights or powers
conferred. The Issuer, the Trustee, the Paying Agent, the LGC, the Governing
Body and their respective members, directors, officers, employees and agents
shall be protected in acting upon any document reasonably believed by them to be
genuine, and any of them may conclusively rely upon the advice of counsel and
may (but need not) require further evidence of any fact or matter before taking
any action. No recourse shall be had by the Company for any claims based hereon
or on the Indenture against any member, director, officer, employee or agent of
the Issuer, the Trustee, the Paying Agent, the LGC or the Governing Body
alleging personal liability on the part of such person unless, in the case of
the Trustee or the Paying Agent only, such claims are based upon the bad faith,
fraud or deceit of such person. The Company will indemnify and hold harmless the
Issuer, the Trustee, the Paying Agent, the LGC, the Governing Body and each
member, director, officer, employee and agent of the Issuer, the Trustee, the
Paying Agent, the LGC or the Governing Body against any and all
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claims, losses, damages or liabilities, joint and several, to which the Issuer,
the Trustee, the Paying Agent, the LGC, the Governing Body or any member,
director, officer, employee or agent of the Issuer, the Trustee, the Paying
Agent, the LGC or the Governing Body may become subject, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise directly or
indirectly out of the Project or are based upon any other act or omission in
connection with the Project by the Issuer, the Trustee, the Paying Agent, the
LGC or the Governing Body, unless, in the case of the Trustee or the Paying
Agent only, the losses, damages or liabilities arise from the gross negligence
or willful misconduct of the person to be indemnified. The Company further
releases the Issuer, the LGC and the Governing Body and agrees that the Issuer,
the LGC and the Governing Body shall not be liable for, and indemnifies the
Issuer, the LGC and the Governing Body against, all liabilities, claims, costs
and expenses imposed upon or asserted against any of them on account of:
(a) any loss or damage to the property or injury to or death
of or loss by any person that may be occasioned by any cause whatsoever
pertaining to the construction, maintenance, operation and use of the Project;
(b) any breach or default on the part of the Company in the
performance of any covenant or agreement of the Company under this Agreement,
the Note or any related document, or arising from any act or failure to act by
the Company, or any of its agents, contractors, servants, employees or
licensees;
(c) the authorization, issuance and sale of the Bonds, and the
provision of any information furnished in connection therewith and in connection
with any remarketing thereof, including, without limitation, any information
furnished by the Company for inclusion in any certifications made by the Issuer;
and
(d) any such claim or action or proceeding brought with
respect to the matters set forth in (a), (b) and (c) above.
In the event any claim is made or action brought against the
Issuer, the Trustee, the Paying Agent, the LGC, the Governing Body or any
member, director, officer, employee or agent of the Issuer, the Trustee, the
Paying Agent the LGC or the Governing Body, except for claims or actions brought
which are claimed to have arisen from the negligence or willful misconduct of
such person, the Issuer, the Trustee, the Paying Agent, the LGC or the Governing
Body may direct the Company to assume the defense of the claim and any action
brought thereon and pay all reasonable expenses (including attorney's fees)
incurred therein; or the Issuer, the Trustee, the Paying Agent, the LGC or the
Governing Body may assume the defense of any such claim or action, the
reasonable cost (including attorney's fees) of which shall be paid by the
Company upon written request of the Issuer, the Trustee, the Paying Agent, the
LGC or the Governing Body to the Company. The Company may engage its own counsel
to participate in the defense of any such action. The defense of any such claim
shall include the taking of all actions necessary or appropriate thereto.
Section 4.5 DAMAGE TO OR CONDEMNATION OF PROJECT. In the event
of damage, destruction or condemnation of part or all of the Project, the
Company shall, as its sole option, either: (i) restore the Project, or (ii) if
permitted by the terms of the Bonds, direct the Issuer to call the Bonds for
redemption. Damage to, destruction of or condemnation of all or a portion of the
Project shall not terminate this Agreement, or cause any abatement of or
reduction in the payments to be made by the Company or otherwise affect the
respective obligations of the Issuer or the Company, except as set forth in this
Agreement. In the event of damage, destruction or condemnation of the Project or
any part thereof, the net proceeds of any insurance policies required to be
maintained under Section 4.7 hereof or the proceeds of any
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Condemnation Award shall be paid to the Trustee, and if no Event of Default
hereunder or under the Indenture has occurred and is continuing, shall be, at
the election of the Company, applied to the repair or restoration of the portion
of the Project which is the subject of such damage or destruction, or which
remains after such condemnation, or, if Extraordinary Optional Redemption of the
Bonds is permitted by the terms of the Bonds, deposited in the General Debt
Service Account and applied pursuant to Section 5.2.B of the Indenture upon the
redemption of the Bonds and credited against the Loan Repayments. If the Issuer
or the Company is the payee, or one of the payees, of any check or other
instrument representing payment of any insurance proceeds or Condemnation Award
referred to in this Section, the Issuer or Company will endorse the same to the
order of the Trustee and deliver the same to the Trustee; and if the Issuer or
the Company fails to do so, the Issuer and the Company hereby irrevocably
authorize any officer or employee of the Trustee to endorse and deliver the same
as the Issuer's or Company's attorney-in-fact.
Section 4.6 TAXES, OTHER GOVERNMENTAL CHARGES AND UTILITY
CHARGES. The Company shall pay, or cause to be paid before the same shall become
delinquent, all taxes, assessments, whether general or special, and governmental
charges of any kind whatsoever that may at any time be lawfully assessed or
levied against or with respect to the Project, including any equipment or
related property installed or brought by the Company therein or thereon and all
utility and other charges incurred in the operation, maintenance, use, occupancy
and upkeep of the Project. With respect to special assessments or other
governmental charges that lawfully may be paid in installments over a period of
years, the Company shall be obligated to pay only such installments as are
required to be paid during the term hereof. The Company may, at its expense, in
good faith contest any such taxes, assessments and other charges and, in the
event of any such contest, may permit the taxes, assessments or other charges so
contested to remain unpaid during the period of such contest and any appeal
therefrom, unless the Issuer or the Trustee shall notify the Company that, in
the opinion of counsel, by nonpayment of any such items the lien of the
Indenture will be materially endangered or the Project, or any part thereof,
will be subject to material loss or forfeiture, in which event such taxes,
assessments or charges shall be paid promptly by the Company. The Company also
agrees to comply at its own cost and expense with all notices received from
public authorities from and after the date hereof. If the Company shall fail to
pay any of the foregoing items required by this Section to be paid by it, the
Issuer or the Trustee may (but shall be under no obligation to) pay the same and
any amounts so advanced therefor by the Issuer or the Trustee shall become an
additional obligation of the Company to the Issuer or the Trustee, as the case
may be, making the advancement, which amounts, together with interest thereon
from the date thereof at a variable rate equal to the rate of interest announced
by the Trustee from time to time to be the prime rate designated by PNC Bank,
National Association, Pittsburgh, Pennsylvania, plus one percent (1%) per annum,
the Company hereby agrees and covenants to pay; provided however, such rate of
interest shall not exceed the maximum rate permitted under State law. Such
interest shall be considered to be additional indebtedness secured hereby.
Section 4.7 INSURANCE.
The Company shall maintain, or cause to be maintained, with
respect to the Project policies of insurance with insurers subject to regulation
by the State, of such type and in such amounts as are customary for entities of
like size and engaged in like business, provided that so long as the Bonds shall
be supported by a Letter of Credit the Company shall maintain such policies of
insurance (and in such amounts) as are specified in the Credit Agreement.
Section 4.8 COMPANY'S LEASE OF PROJECT FACILITIES. The Company
may lease any portion of the Project Facilities, but only subject to the
following conditions:
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A. The Company shall have obtained the written consent to such
lease of (i) the Bank; either of the Issuer or the LGC and (ii) if an Event of
Default has occurred and is continuing, the Trustee following consent of the
Bondholders to the giving of such consent by the Trustee;
B. No such lease shall relieve the Company of its obligation
to make the payments required under Sections 4.3 and 4.4 or to perform all other
covenants hereunder, for which the Company shall remain primarily liable;
C. The Company shall deliver to the Issuer and the Trustee a
copy of such lease within 30 days of the delivery thereof to the Company;
D. The Company shall have obtained and submitted to the Issuer
and the Trustee a Favorable Opinion respecting such lease;
E. Not more than an aggregate of 25% of the Project Facilities
shall be leased to provide facilities the primary purpose of which is provisions
of retail food and beverage service, automobile sales or service, recreation or
entertainment, nor shall such facilities furnish more than 25% of the rental
revenues produced by the Project Facilities; and
F. Such lease shall contain covenants (i) forbidding any use
of the leased premises which would constitute a violation of Section 144(a)(8)
or Section 147(e) of the Code; and (ii) if and as appropriate in the opinion of
nationally recognized bond counsel, with respect to the $10,000,000 limit of
Section 144(a)(4)(A) of the Code and the $40,000,000 limit of Section 144(a)(10)
of the Code.
Section 4.9 COMPLIANCE WITH LAWS. With respect to the Project,
the Company will at all times materially comply with all applicable requirements
of federal, State and local laws and with all applicable lawful requirements of
any agency, board or commission created under the laws of the State or of any
other duly constituted public authority, and will use, and permit the use of,
the Project only for such purposes as are lawful under the Act; provided that
the Company shall be deemed in compliance with this Section so long as it is
contesting in good faith any such requirement by appropriate legal proceedings.
Section 4.10 ARBITRAGE COVENANT.
A. The Company and the Issuer hereby covenant for the benefit
of the Bondholders that the Company and the Issuer will make no use of the
proceeds of the Bonds, or of any other funds which may be deemed to be proceeds
of the Bonds pursuant to Section 148 of the Code, which, if such use had been
reasonably expected on the date of issuance of the Bonds, would have caused the
Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code, and
that they will comply with the requirements of Section 148 of the Code with
respect to the Bonds.
B. The Company shall appoint a Rebate Consultant to determine
the Rebate Amount as of the end of a Rebate Year, as provided in Section 5.8 of
the Indenture, and shall notify the Trustee of such appointment. Following the
determination of the Rebate Amount as of the end of the Rebate Year, the Company
shall deposit into the Arbitrage Rebate Fund the amount, if any, required to be
deposited therein pursuant to Section 5.8 of the Indenture. The requirements of
the preceding sentence shall not apply, however, to the Bonds in the event the
Company obtains and submits to the Trustee an opinion of Bond Counsel that such
compliance is not required under Section 148 of the Code, and the regulations in
effect thereunder, in order for the interest on the Bonds to be and remain
excluded from gross income for federal
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income tax purposes; provided, however, that such exemption from compliance with
the requirements of this Subsection B shall apply only to the extent provided in
such opinion of Bond Counsel.
Section 4.11 FINANCING STATEMENTS. The Company shall execute
such financing statements, continuation statements and other documents under the
North Carolina Uniform Commercial Code or other applicable law as the Issuer or
the Trustee may specify in order to perfect the security interest of the Trustee
in this Agreement, and the Company will pay the cost of filing the same in such
public offices as the Issuer or the Trustee shall designate. From time to time,
as reasonably requested by the Trustee, the Company shall furnish to the Trustee
an opinion of Counsel setting forth what actions, if any, should be taken by the
Company or the Trustee to preserve such security interest in favor of the
Trustee, and the right, title and interest of the Trustee in and to the Trust
Estate created under the Indenture. The Company shall execute and file or cause
to be executed and filed all further instruments as shall be required by law to
preserve such security interest, and shall furnish satisfactory evidence to the
Bank of the filing and refiling of such instruments.
Section 4.12 NOTICE AND CERTIFICATION WITH RESPECT TO
BANKRUPTCY PROCEEDINGS. The Company shall promptly notify the Trustee of the
occurrence of any of the following events and shall keep the Trustee informed of
the status of any petition in bankruptcy filed (or bankruptcy or similar
proceeding otherwise commenced) against the Company: (i) application by the
Company for or consent by the Company to the appointment of a receiver, trustee,
liquidator or custodian or the like for itself or of its property, or (ii)
admission by the Company in writing of its inability to pay its debts generally
as they become due, or (iii) general assignment by the Company for the benefit
of creditors, or (iv) adjudication of the Company as a bankrupt or insolvent, or
(v) commencement by the Company of a voluntary case under the United States
Bankruptcy Code or filing by the Company of a voluntary petition or answer
seeking reorganization of the Company, an arrangement with creditors of the
Company, or an order for relief or seeking to take advantage of any insolvency
law or filing by the Company, or an answer admitting the material allegations of
an insolvency proceeding, or action by the Company, for the purpose of effecting
any of the foregoing, or (vi) if without the application, approval or consent of
the Company a proceeding shall be instituted in any court of competent
jurisdiction, under any law relating to bankruptcy, insolvency, reorganization
or relief of debtors, seeking in respect of the Company an order for relief or
an adjudication in bankruptcy, reorganization, dissolution, winding up,
liquidation, a composition or arrangement with creditors, a readjustment of
debts, the appointment of a trustee, receiver, liquidator or custodian or the
like of the Company or of all or any substantial part of its assets, or other
relief in respect thereof under any bankruptcy or insolvency law.
Section 4.13 ANNUAL REPORT OF OUTSTANDING BONDS. Promptly
after each June 30 for so long as any Bonds remain Outstanding, the Company
shall notify the LGC and the Issuer, by first-class mail, of the aggregate
principal amount of such Bonds Outstanding at the close of business on such June
30.
Section 4.14 GRANTING OF EASEMENTS. If no Event of Default
under this Agreement has occurred and is continuing, the Company may, with the
prior written consent of the Bank and notwithstanding anything contained in this
Agreement to the contrary, at any time or times, grant easements, licenses,
rights of way and other rights or privileges in the nature of easements with
respect to any property included in the Project Facilities, or release existing
easements, licenses, rights of way and other rights or privileges, all with or
without consideration and upon such terms and conditions as the Company shall
determine. The Issuer agrees that it will execute and deliver or will cause the
execution and delivery of, and will cause and direct the Trustee to execute and
deliver, any instrument necessary or appropriate to confirm and grant or release
any such easement, license, right of way or other right or privilege, upon
receipt by the Issuer and the Trustee of:
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A. A copy of the instrument of grant or release;
B. A written application signed by the Company requesting such
instrument; and
C. A certificate executed by the Company, and such other
persons as the Issuer may reasonably require, stating that such grant or release
is not detrimental to the proper conduct of the business of the Company, and
that such grant or release will not impair the effective use or interfere with
the efficient and economical operation of the Project Facilities.
Section 4.15 LIMITATION OF LIENS. The Company shall not create
or suffer to be created by any other person any lien or charge upon the
Construction Fund or the Project Facilities or any part thereof or upon the
rents, contributions, charges, receipts or revenues therefrom, other than liens
thereon in favor of the Issuer, the Trustee or the Bank and, with the prior
approval of the Bank, liens on the Project Facilities; provided that nothing in
this Agreement shall limit the right of the Company to enforce payments from the
Construction Fund pursuant to Section 5.5 of the Indenture. The Company further
agrees to pay or cause to be discharged or make adequate provision to satisfy
and discharge, within ninety (90) days after the same shall become due, any such
lien or charge and also all lawful claims or demands for labor, materials,
supplies or other charges which, if unpaid, might be or become a lien upon the
revenues or income therefrom. Nothing in this Section shall require the Company
to pay or cause to be discharged or make provision for any such lien or charge
so long as the validity thereof shall be contested in good faith and so long as
the Construction Fund and the Project Facilities are not subject to loss or
forfeiture in whole or part. The Issuer shall cooperate with the Company in any
such contest and shall cooperate with the Company with respect to obtaining any
necessary releases of liens or other encumbrances on the Project Facilities.
Section 4.16 ACCESS TO THE PROJECT. The Company agrees that
the Issuer, the Bank, the Trustee and their duly authorized agents, attorneys,
experts, engineers, accountants and representatives shall have the right to
inspect the Project at all reasonable times and on reasonable notice. The
Issuer, the Bank, the Trustee and their duly authorized agents shall also be
permitted, at all reasonable times and upon reasonable notice, to examine the
books and records of the Company with respect to the Project.
Section 4.17 CONTROL BY BANK. The Company hereby covenants to
provide written notice to the Trustee, the Remarketing Advisor and the
Bondholders thirty (30) days prior to the consummation of any transaction that
would result in the Company being controlled by the Bank (as the term "control"
is defined in Section 2(a)(9) of the Investment Company Act of 1940). This
notification covenant supersedes any exemptions from the continuing disclosure
requirement pursuant to Rule 15c2-12(b)(5) of the Securities and Exchange Act of
1934.
ARTICLE 5
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EVENTS OF DEFAULT AND REMEDIES
Section 5.1 EVENTS OF DEFAULT; ACCELERATION. Each of the
following events is hereby defined as, and is declared to be and to constitute,
an "Event of Default" hereunder:
A. Failure by the Company to make or cause to be made any Loan
Repayment or Additional Loan Repayment required to be made hereunder and under
the Note on or before the date the same is due; or
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B. Failure or refusal by the Company to comply with any of its
other covenants hereunder and such failure or refusal shall continue for a
period of sixty (60) days after written notice thereof has been given to the
Company and the Bank by the Issuer or the Trustee; provided that if such failure
is of such nature that it can be corrected but not within sixty (60) days, it
will not be an Event of Default so long as prompt corrective action is
instituted and is diligently pursued; or
C. The Company shall (i) apply for or consent to the
appointment of a receiver, trustee, liquidator or custodian or the like of
itself or of its property, or (ii) admit in writing its inability to pay its
debts generally as they become due, or (iii) make a general assignment for the
benefit of creditors, or (iv) be adjudicated a bankrupt or insolvent, or (v)
commence a voluntary case under the United States Bankruptcy Code, or file a
voluntary petition or answer seeking reorganization, an arrangement with
creditors or an order for relief, or seek to take advantage of any insolvency
law or file an answer admitting the material allegations of a petition filed
against it in any bankruptcy, reorganization, or insolvency proceeding, or
action shall be taken by it for the purpose of effecting any of the foregoing,
or (iv) if without the application, approval or consent of the Company, a
proceeding shall be instituted in any court of competent jurisdiction, under any
law relating to bankruptcy, insolvency, reorganization or relief of debtors,
seeking in respect of the Company an order for relief or an adjudication in
bankruptcy, reorganization, dissolution, winding up, liquidation, a composition
or arrangement with creditors, a readjustment of debts, the appointment of a
trustee, receiver, liquidator or custodian or the like of the Company or of all
or any substantial part of its assets, or other like relief in respect thereof
under any bankruptcy or insolvency law, and, if such proceeding is being
contested by the Company in good faith, the same shall (A) result in the entry
of an order for relief or any such adjudication or appointment or (B) remain
unvacated, undismissed and undischarged for a period of sixty (60) days; or
D. For any reason the Bonds are declared due and payable by
acceleration in accordance with Section 10.2 of the Indenture; or
E. Receipt by the Trustee, the Paying Agent and the Company of
a written notice from the Bank (i) stating that an Event of Default (as defined
in the Credit Agreement) has occurred and is continuing and (ii) requesting the
Trustee to declare the principal of the Outstanding Bonds immediately due and
payable; or
F. If the Trustee and the Paying Agent receive notice from the
Bank prior to the 15th day following a drawing under the Letter of Credit for
payment of interest on those Bonds Outstanding after the application of the
proceeds of such drawing, that the Letter of Credit will not be reinstated with
respect to such interest;
Then and in each and every such case the Trustee, by prompt notice in writing to
the Company, the Issuer, the LGC and the Bank, shall in the case of an Event of
Default under 5.1.A hereof and in all other cases may, if such Event of Default
has not been cured, declare all sums which the Company is obligated to pay under
this Agreement to be due and payable immediately, and upon such declaration the
same shall become and shall be immediately due and payable, anything in this
Agreement contained to the contrary notwithstanding. In case the Trustee shall
have proceeded to enforce any right under this Agreement and such proceedings
shall have been discontinued or abandoned for any reason or shall have been
determined adversely to the Trustee, then and in every such case the Company,
the Issuer and the Trustee shall be restored respectively to their several
positions and rights hereunder, and all rights, remedies and powers of the
Company the Issuer and its assignee or the Trustee shall continue as though no
proceeding had been taken.
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Section 5.2 PAYMENT ON DEFAULT; SUIT THEREFOR.
A. The Company covenants that, in case it shall fail to pay or
cause to be paid any Loan Repayment or Additional Loan Repayment payable by or
on behalf of the Company hereunder and under the Note as and when the same shall
become due and payable, whether at maturity, or by acceleration or otherwise,
then, upon demand of the Trustee, the Company will pay to the Trustee the entire
principal of and all interest on the Note that then shall have become due and
payable and all Additional Loan Repayments that then shall become due and
payable; and, in addition thereto, such further amounts as shall be sufficient
to cover the reasonable costs and expenses of collection, including reasonable
attorneys' fees and a reasonable compensation to the Trustee and the Paying
Agent, their agents and counsel, and any expenses or liabilities incurred by the
Issuer, the Trustee or the Paying Agent. In case the Company shall fail
forthwith to pay such amounts upon such demand, the Trustee shall be entitled
and empowered to institute any actions or proceedings at law or in equity for
the collection of the sums so due and unpaid, and may prosecute any such action
or proceeding to judgment or final decree, and may enforce any such judgment or
final decree against the Company and collect in the manner provided by law out
of the property of the Company the moneys adjudged or decreed to be payable.
B. In case there shall be pending proceedings for the
bankruptcy or for the reorganization of the Company under the federal bankruptcy
laws or any other applicable law, or in case a receiver or trustee shall have
been appointed for the benefit of the creditors or the property of the Company,
the Trustee shall be entitled and empowered by intervention in such proceedings
or otherwise to file and prove a claim or claims for the whole amount of the
outstanding balance on the Note, including interest owing and unpaid in respect
thereof, and, in case of any judicial proceedings, to file such proofs of claim
and other papers or documents as may be necessary or advisable in order to have
the claims of the Trustee allowed in such judicial proceedings relative to the
Company, its creditors, or its property, and to collect and receive any moneys
or other property payable or deliverable on any such claims, and to distribute
the same after the deduction of its charges and expenses. Any receiver, assignee
or trustee in bankruptcy or reorganization is hereby authorized to make such
payments to the Issuer or the Trustee, and to pay to the Issuer or the Trustee
any amount due it for reasonable compensation and expenses, including counsel
fees incurred by it up to the date of such distribution.
Section 5.3 OTHER REMEDIES. Whenever all sums which the
Company is obligated to pay under this Agreement shall have been declared to be
immediately due and payable, the Trustee may take whatever action may be
available at law or in equity as may appear necessary or desirable to collect
the Loan Repayments, the Additional Loan Repayments and any other amounts
payable by the Company hereunder, or to enforce performance and observance of
any obligation, agreement or covenant of the Company under this Agreement or the
Note.
If any statute or rule of law shall validly limit the amount
of damages to be paid under this Section to less than the amount provided in
this Section, the Trustee shall be entitled to the maximum amount allowable
under such statute or rule of law.
Section 5.4 CUMULATIVE RIGHTS. No remedy conferred upon the
Issuer or the Trustee by this Agreement is intended to be exclusive of any other
available remedy, but each and every such remedy shall be cumulative and shall
be in addition to every other remedy given under this Agreement or now or
hereafter existing at law or in equity or by statute. No waiver by the Issuer or
the Trustee of any breach by the Company of any of its obligations, agreements
or covenants hereunder shall be a waiver of any subsequent breach, and no delay
or omission to exercise any right or power shall impair any such right
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or power or shall be construed to be a waiver thereof, but any such right and
power may be exercised from time to time and as often as may be deemed
expedient.
Section 5.5 WAIVER. The Company hereby waives and relinquishes
the benefits of any present or future law exempting the Project from attachment,
levy or sale on execution, or any part of the proceeds arising from the sale
thereof, and all benefit of stay of execution or other process.
ARTICLE 6
---------
MISCELLANEOUS
Section 6.1 LIMITATION OF LIABILITY OF ISSUER. In the event of
any default by the Issuer hereunder, the liability of the Issuer to the Company
shall be enforceable only out of its interest in the Project and under this
Agreement and there shall be no other recourse for damages by the Company
against the Issuer, its officers, members, agents and employees, or any of the
property now or hereafter owned by it or them. No covenant, obligation or
agreement of the Issuer contained in this Agreement or the Indenture shall be
deemed to be a covenant, obligation or agreement of any present or future
member, officer, agent or employee of the Issuer in other than its official
capacity, and neither the Issuer nor any official executing the Bond or any
related documents shall be liable personally on the Bond or be subject to any
personal liability or accountability by reason of the issuance thereof or by
reason of the covenants, obligations or agreements of the Issuer contained in
this Agreement or in the Indenture, or related documents.
The principal of, premium, if any, and interest on the Bonds shall be
payable solely from the funds pledged for their payment in accordance with the
Indenture and from payments made pursuant to the Letter of Credit.
THE BONDS AND THE INTEREST THEREON AND REDEMPTION PREMIUM, IF ANY,
SHALL NOT BE DEEMED TO CONSTITUTE A DEBT OR A PLEDGE OF THE FAITH AND CREDIT OF
THE STATE OF NORTH CAROLINA OR ANY POLITICAL SUBDIVISION THEREOF, INCLUDING,
WITHOUT LIMITATION, THE ISSUER AND HERTFORD COUNTY, NORTH CAROLINA. NEITHER THE
STATE OF NORTH CAROLINA NOR ANY POLITICAL SUBDIVISION THEREOF, INCLUDING,
WITHOUT LIMITATION, THE ISSUER AND HERTFORD COUNTY, NORTH CAROLINA, SHALL BE
OBLIGATED TO PAY THE PRINCIPAL OF OR PREMIUM, IF ANY, OR INTEREST ON THE BONDS
OR OTHER COSTS INCIDENT THERETO EXCEPT FROM THE REVENUES ASSIGNED AND PLEDGED
THEREFOR, AND NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF
NORTH CAROLINA OR ANY POLITICAL SUBDIVISION THEREOF, INCLUDING, WITHOUT
LIMITATION, THE ISSUER AND HERTFORD COUNTY, IS PLEDGED TO THE PAYMENT OF THE
PRINCIPAL OF OR PREMIUM, IF ANY, OR INTEREST ON THE BONDS OR OTHER COSTS
INCIDENT THERETO. THE ISSUER HAS NO TAXING POWER.
Section 6.2 NOTICES. Notice hereunder shall be effective upon
receipt and shall be given by personal service or by certified or registered
mail, return receipt requested,
To the Issuer: The Hertford County Industrial Facilities and
Pollution Control Financing Authority
c/o J. Xxx Xxxxxxx, Xx.
Xxxxxxxxxxxx, Xxxxx Xxxxxxxx 00000
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If to the Company: Easco Corporation
c/o Easco, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxx, Xxxx 00000
Attention: Chief Financial Officer
with a copy to General Counsel
If to the Trustee or
the Paying Agent: PNC Bank, National Association
Two PNC Plaza, 4th Floor
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
If to the Bank: Bank of America
000 X. XxXxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: International Department
Operations Manager
If to the Remarketing PNC Capital Markets, Inc.
Advisor: One PNC Plaza, 3rd Floor
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Sales Manager
If to the LGC: Local Government Commission
000 X. Xxxxxxxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Secretary
Either party hereto and the Paying Agent, the Remarketing Advisor and the Bank
may change the address to which notices to it are to be sent by written notice
given to the other Persons listed in this Section. All notices shall, when
mailed as aforesaid, be effective on the date indicated on the return receipt,
and all notices given by other means shall be effective when received.
Section 6.3 SEVERABILITY. If any provision hereof is found by
a court of competent jurisdiction to be prohibited or unenforceable, it shall be
ineffective only to the extent of such prohibition or unenforceability, and such
prohibition or unenforceability shall not invalidate the balance of such
provision to the extent it is not prohibited or unenforceable nor invalidate the
other provisions hereof, all of which shall be liberally construed in favor of
the Issuer or the Trustee in order to effect the provisions of this Agreement.
Section 6.4 APPLICABLE LAW. This Agreement shall be deemed to
be a contract made in the State and governed by and construed under the laws of
the State.
Section 6.5 ASSIGNMENT; SUCCESSORS AND ASSIGNS. The Company
shall not assign this Agreement or any interest of the Company herein, either in
whole or in part, without the prior written consent of the Trustee, which
consent shall be given if the following conditions are fulfilled: (i) the
assignee assumes in writing all of the obligations of the Company hereunder;
(ii) neither the validity nor the
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enforceability of this Agreement shall be adversely affected by such assignment;
(iii) such assignment shall not, in the opinion of Bond Counsel, have an adverse
effect on the exclusion of interest on the Bonds from gross income for federal
income tax purposes; and (iv) if a Letter of Credit is held by the Paying Agent,
the consent of the Bank. For purposes of this Section 6.5, no assignment shall
be deemed to have occurred (a) upon foreclosure by the Bank, or a conveyance in
lieu thereof, or any other transfer to the Bank or to a nominee of the Bank
which is an affiliate of Bank, or (b) by reason of a change in the composition
of the ownership or identity of the officers of the Company. Subject to the
foregoing, this Agreement shall be binding upon, and shall inure to the benefit
of, the parties hereto and their respective successors and assigns, and the
terms "Issuer" and "Company" shall, where the context requires, include the
respective successors and assigns of such persons. No assignment pursuant to
this Section shall release the Company from its obligations under this Agreement
unless the Issuer, the LGC, the Trustee and, if a Letter of Credit is held by
the Paying Agent, the Bank shall consent thereto.
Section 6.6 ENFORCEMENT OF CERTAIN PROVISIONS BY THE BANK. The
Bank is hereby explicitly recognized as a third party beneficiary of this
Agreement, but only so long as there shall be a Letter of Credit of such Bank in
effect with respect to the Bonds.
Section 6.7 AMENDMENTS. This Agreement may not be amended
except by an instrument in writing signed by the parties and, if such amendment
occurs after the issuance of any of the Bonds, consented to by the Trustee.
Section 6.8 TERM OF AGREEMENT. This Agreement and the
respective obligations of the parties hereto shall be in full force and effect
from the date hereof until (i) the principal or redemption price of, premium, if
any, on and all interest on the Bonds shall have been paid, or provision for
such payment shall have been made pursuant to the terms of the Indenture, (ii)
the Indenture shall have been released pursuant to Section 16.1 thereof, (iii)
the Company shall have satisfied all its obligations under the Credit Agreement,
and (iv) the Company and the Issuer shall have satisfied their respective
obligations hereunder.
Section 6.9 AMOUNTS REMAINING IN BOND FUND. It is agreed by
the parties that any amounts remaining in the Bond Fund after payment in full of
the Bonds (or provision for payment thereof having been made in accordance with
the provisions of the Indenture) and of the fees, charges and expenses of the
Trustee and the Issuer in accordance with the Indenture, shall, upon release of
the Indenture pursuant to Section 16.1 thereof, be paid by the Trustee to the
Bank to the extent of any unreimbursed drawing under the Letter of Credit, or
any other obligations owing by the Company to the Bank under the Credit
Agreement, the balance of such amounts being the property of and paid to the
Company by the Trustee.
Section 6.10 COMPLIANCE WITH INDENTURE. The Company hereby
acknowledges that it has received an executed copy of the Indenture and is
familiar with its provisions, and agrees that it will take all such actions as
are required or contemplated of it under the Indenture to preserve and protect
the rights of the Trustee and of the Bondholders thereunder and that it will not
take any action which would cause a default thereunder. Any redemption of Bonds
prior to maturity shall be effected as provided in the Indenture. The Company
agrees that the Trustee shall be entitled to enforce and to benefit from the
terms and conditions of this Agreement notwithstanding the fact that it is not a
signatory hereto.
Section 6.11 HEADINGS. The captions or headings in this
Agreement are for convenience of reference only and shall not control or affect
the meaning or construction of any provision hereof.
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Section 6.12 COUNTERPARTS. This Agreement may be executed in
any number of counterparts, each of which when so executed and delivered shall
be an original; but such counterparts shall together constitute but one and the
same instrument.
Section 6.13 NO THIRD PARTY BENEFICIARIES. It is specifically
agreed between the parties executing this Agreement that neither this Agreement
nor any of the provisions hereof are intended to establish in favor of the
public or any member thereof, other than as expressly provided herein (which
includes assignment of the Issuer's rights under this Agreement to the Trustee
pursuant to the Indenture), the rights of a third party beneficiary hereunder,
as to authorize any one not a party of this Agreement to maintain a suit for
personal injuries or property damage pursuant to the terms or provisions of this
Agreement. The duties, obligations and responsibilities of the parties to this
Agreement with respect to third parties shall remain as imposed by law.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
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33
IN WITNESS WHEREOF, the parties hereto have caused this Loan
Agreement to be executed and delivered as of the date first written above.
THE HERTFORD COUNTY INDUSTRIAL
FACILITIES AND POLLUTION CONTROL
FINANCING AUTHORITY
By /s/ O.S. Xxxxxx, Jr.
---------------------------------
Chairman
[Signatures Continue on Following Page]
30
34
[Company Signature Page to Loan Agreement]
EASCO CORPORATION
By /s/ Xxxxx X. Xxxxx
----------------------------------------------
Title: Vice President
31
35
EXHIBIT A
FORM OF
PROMISSORY NOTE
---------------
$6,000,000 November __, 1998
For value received, the undersigned, EASCO CORPORATION (the
"Company"), a Maryland corporation, hereby promises to pay to the order of THE
HERTFORD COUNTY INDUSTRIAL FACILITIES AND POLLUTION CONTROL FINANCING AUTHORITY
(the "Issuer"), a political subdivision duly created, organized and existing
under the laws of the State of North Carolina (the "State"), the principal sum
of SIX MILLION DOLLARS ($6,000,000), on November 1, 2013 unless earlier prepaid,
plus interest on the unpaid principal balance hereof at the rates hereinafter
described, payable on each Interest Payment Date (as such term is defined in the
Trust Indenture dated as of November 1, 1998, (the "Indenture") between the
Issuer and PNC Bank, National Association, Pittsburgh, Pennsylvania). Both
principal and interest shall be payable, without deduction for exchange or
collection charges, in lawful money of the United States of America, at the
principal office of PNC Bank, National Association, Pittsburgh, Pennsylvania,
the trustee and paying agent (the "Trustee").
This Note shall initially bear interest from the date hereof
at an interest rate of ____% per annum (the "Rate"), and thereafter this Note
shall bear interest at the Variable Weekly Rate or the Fixed Rate as each is
defined in the Indenture in amounts sufficient to pay the interest on the Bonds
as it comes due as provided in the Indenture.
This Note is subject to mandatory and optional prepayment
under the terms of the Loan Agreement dated as of November 1, 1998, (the
"Agreement") between the Issuer and the Company, which is hereby made a part
hereof and incorporated by reference herein. There are no mandatory sinking fund
payments on the Bonds.
Notwithstanding anything to the contrary contained herein,
payments of principal and interest under this Note shall be sufficient to
provide for payment of principal of and interest on the Bonds as and when they
become due.
The obligations of the Company to make or cause to be made
payments under the Agreement and this Note shall be absolute and unconditional
without defense or set-off by reason of any default by the Issuer under the
Agreement or under any other agreement between the Company and the Issuer or for
any other reason, including without limitation, any acts or circumstances that
may constitute failure of consideration, destruction of or damage to the Project
(as defined in the Agreement), commercial frustration of purpose, or failure of
the Issuer to perform and observe any agreement, whether express or implied, or
any duty, liability or obligation, it being the intention of the parties that
the payments required of the Company hereunder will be paid in full when due
without any delay or diminution whatsoever.
This Note is issued to evidence the indebtedness of the
Company under the Agreement.
In the event of default of the terms herein and/or the terms
of the Agreement, the Company shall be liable to the Issuer and the Trustee for
the Bonds for reasonable attorney fees incurred by the Issuer or the Trustee for
the Bonds, or their successors or assigns, as a result of said default.
A-1
36
IN TESTIMONY WHEREOF, witness the duly authorized signature of
the Company the date first above written, duly authorized by appropriate action
of the Company.
EASCO CORPORATION
By ______________________________
Title: Vice President
A-2
37
ENDORSEMENT
-----------
Pay to the order of PNC Bank, National Association,
Pittsburgh, Pennsylvania, as Trustee under the Trust Indenture dated as of
November 1, 1998, from the undersigned, without recourse.
THE HERTFORD COUNTY INDUSTRIAL
FACILITIES AND POLLUTION CONTROL
FINANCING AUTHORITY
By ______________________________
Chairman
A-3
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EXHIBIT B
PROJECT SITE
------------
B-1
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EXHIBIT C
PROJECT FACILITIES
------------------
The Project consists of the acquisition and construction of a
3,500 square foot expansion to an existing 35,000 square foot facility and the
installation of new equipment therein for the manufacture of aluminum billets on
a 57 acre site located in Ahoskie, County, North Carolina, owned by the Company
and includes the following:
Building (including HVAC, electrical and plumbing)
New Equipment
C-1
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EXHIBIT D
FORM OF
REQUISITION CERTIFICATE
-----------------------
PNC Bank, National Association
Date:__________
Two XXX Xxxxx, 0xx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Corporate Trust Department
Requisition Number ___ submitted under Trust
Indenture dated as of November 1, 1998, between The
Hertford County Industrial Facilities and Pollution
Control Financing Authority (the "Issuer") and PNC
Bank, National Association, as Trustee (the
"Indenture") with respect to the Issuer's Industrial
Development Revenue Bonds (Easco Corporation
Project), Series 1998.
This requisition is submitted by EASCO CORPORATION (the
"Company") to PNC BANK, NATIONAL ASSOCIATION (the "Trustee"), pursuant to
Section 5.5 of the Indenture, for payment from the Construction Fund established
under the Indenture to the persons, in the amounts and for the costs set forth
below. Reference is made to the Indenture for definitions of the capitalized
terms used herein. The undersigned hereby certifies:
(a) The payment requisitioned hereby relates to the Costs of
the issuance of the Bonds or work, material, equipment and/or other Costs set
forth in subparagraph (c) below, and such work, material and equipment have been
incorporated into the Project Facilities substantially in accordance with the
plans and specifications therefor.
(b) The payment requisitioned hereby is to be made to the
following person or persons at the address or addresses indicated (any payments
to be made to the Company being for work done by Company personnel or for
reimbursement for payments heretofore made by the Company for the Issuer's
account, other than any payments made by way of mutual set-off between the
Company and the payee, and any payments to be made to the Trustee being for
interest on the Bonds during construction of the Project Facilities):
[List Payees and addresses] $________________
$________________
(c) The amount of the payment requisitioned hereby, and the
work, material, equipment and/or other Costs of the Project to which it relates,
are as follows:
$________________
$________________
X-0
00
(x) The payment requisitioned hereby is due, is a proper
charge against the Construction Fund, and has not been the subject of any
previous withdrawal therefrom or of any other funds representing proceeds of
bonds issued by the Issuer on the Company's behalf.
(e) The payment of the Costs of the Project requisitioned
hereby will not violate the restrictions contained in the Loan Agreement dated
as of November 1, 1998 between the Issuer and the Company.
Accompanying this Requisition is a detailed statement listing
the Costs of the Project to be paid with the payment requisitioned hereby.
IN WITNESS WHEREOF, the Company has caused this Requisition to
be executed as of the date first above written.
EASCO CORPORATION
By: ____________________________
Title: ____________________________
Date: ____________________________
Attachments: Detailed Statement of Costs.
Supporting Invoices.
Approval (with Disclaimer).
D-2
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[FORM OF APPROVAL]
In reliance on the representations of the Company set forth
herein, the undersigned authorized representative of Bank of America National
Trust and Savings Association (the "Bank") approves payment of the foregoing
Requisition No. _____ pursuant to Section 5.2 of the Indenture referred to
therein. This approval shall not relieve the Company of any of its liabilities
under the Agreement or the Credit Agreement (as such terms are defined in the
Indenture) nor shall the Bank be deemed to make any representation as to the
accuracy of the Company's certifications contained herein or the propriety under
the terms of the Indenture or otherwise of the payments requested by the Company
to be made pursuant hereto.
BANK OF AMERICA,
NATIONAL TRUST AND SAVINGS ASSOCIATION
By ____________________________________
Authorized Officer
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