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LOAN AGREEMENT
between
BUSINESS FINANCE AUTHORITY OF THE STATE OF NEW HAMPSHIRE
and
CROWN PAPER CO.
-----------------------------
$12,300,000
Sewage and Solid Waste Disposal
Revenue Bonds
(Crown Paper Co. Project)
Series 1996
-----------------------------
Dated
as of
July 1, 1996
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TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1. Use of Defined Terms . . . . . . . . . . . . . . . . . . 1
Section 1.2. Definitions. . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.3. Interpretation . . . . . . . . . . . . . . . . . . . . . 5
Section 1.4. Captions and Headings. . . . . . . . . . . . . . . . . . 6
ARTICLE II REPRESENTATIONS. . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.1. Representations and Covenants of the Company . . . . . . 7
ARTICLE III ISSUANCE OF THE SERIES 1996 BONDS; COMPLETION OF THE PROJECT. . 10
Section 3.1. Issuance of the Series 1996 Bonds; Application of
Proceeds. . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3.2. Disbursements from the Project Fund; Company Required
to Pay Costs in Event Project Fund Insufficient . . . . 10
Section 3.3. Acquisition, Construction and Installation . . . . . . . 12
Section 3.4. Investment of Fund Moneys. . . . . . . . . . . . . . . . 12
Section 3.5. Rebate Fund. . . . . . . . . . . . . . . . . . . . . . . 12
Section 3.6. Completion of the Project. . . . . . . . . . . . . . . . 13
ARTICLE IV LOAN BY ISSUER; REPAYMENT OF THE LOAN;
LOAN PAYMENTS AND ADDITIONAL PAYMENTS . . . . . . . . . . . . . . . . . 14
Section 4.1. Loan Repayment; Delivery of Notes. . . . . . . . . . . . 14
Section 4.2. Additional Payments. . . . . . . . . . . . . . . . . . . 15
Section 4.3. Place of Payments. . . . . . . . . . . . . . . . . . . . 16
Section 4.4. Obligations Unconditional. . . . . . . . . . . . . . . . 16
Section 4.5. Assignment of Agreement and Revenues; Binding Effect
of Indenture on Company; Financing Statements . . . . . 16
Section 4.6. Deposit of Moneys in Bond Fund; Moneys for Redemption. . 17
Section 4.7. Assignment by Company. . . . . . . . . . . . . . . . . . 17
ARTICLE V ADDITIONAL AGREEMENTS AND COVENANTS . . . . . . . . . . . . . . . 19
Section 5.1. Right of Inspection. . . . . . . . . . . . . . . . . . . 19
Section 5.2. Sale, Lease or Grant of Use by Company . . . . . . . . . 19
Section 5.3. Indemnification. . . . . . . . . . . . . . . . . . . . . 19
Section 5.4. Company Not to Adversely Affect Tax Exempt Status of
Bonds' Interest . . . . . . . . . . . . . . . . . . . . 20
Section 5.5. Company to Maintain its Existence; Sales of Assets
or Mergers. . . . . . . . . . . . . . . . . . . . . . . 20
Section 5.6. Books and Records; Financial Statements. . . . . . . . . 21
Section 5.7. Maintenance of Project by Company. . . . . . . . . . . . 21
Section 5.8. Insurance Required . . . . . . . . . . . . . . . . . . . 22
i
Section 5.9. Land Use . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 5.10. Current Expenses . . . . . . . . . . . . . . . . . . . . 22
Section 5.11. Covenant with respect to Mortgage. . . . . . . . . . . . 22
ARTICLE VI REDEMPTION OF SERIES 1996 BONDS. . . . . . . . . . . . . . . . . 24
Section 6.1. Optional Redemption. . . . . . . . . . . . . . . . . . . 24
Section 6.2. Extraordinary Optional Redemption. . . . . . . . . . . . 24
Section 6.3. Mandatory Redemption in Event of a Determination of
Taxability. . . . . . . . . . . . . . . . . . . . . . . 25
Section 6.4. Actions by Issuer. . . . . . . . . . . . . . . . . . . . 26
ARTICLE VII EVENTS OF DEFAULT AND REMEDIES. . . . . . . . . . . . . . . . . 27
Section 7.1. Events of Default. . . . . . . . . . . . . . . . . . . . 27
Section 7.2. Remedies on Default. . . . . . . . . . . . . . . . . . . 28
Section 7.3. No Remedy Exclusive. . . . . . . . . . . . . . . . . . . 29
Section 7.4. Agreement to Pay Attorneys' Fees and Expenses. . . . . . 30
Section 7.5. No Waiver. . . . . . . . . . . . . . . . . . . . . . . . 30
Section 7.6. Notice of Default. . . . . . . . . . . . . . . . . . . . 30
ARTICLE VIII MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 8.1. Term of Agreement. . . . . . . . . . . . . . . . . . . . 31
Section 8.2. Amounts Remaining in Funds . . . . . . . . . . . . . . . 31
Section 8.3. Notices. . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 8.4. Extent of Covenants of the Issuer; No Personal
Liability . . . . . . . . . . . . . . . . . . . . . . . 31
Section 8.5. Binding Effect . . . . . . . . . . . . . . . . . . . . . 32
Section 8.6. Amendments and Supplements . . . . . . . . . . . . . . . 32
Section 8.7. Execution Counterparts . . . . . . . . . . . . . . . . . 32
Section 8.8. Severability . . . . . . . . . . . . . . . . . . . . . . 32
Section 8.9. Governing Law. . . . . . . . . . . . . . . . . . . . . . 32
Section 8.10. Further Assurances and Corrective Instruments. . . . . . 32
Section 8.11. Issuer and Company Representative. . . . . . . . . . . . 32
Section 8.12. Matters to be Considered by the Issuer . . . . . . . . . 33
EXHIBIT A FORM OF NOTE. . . . . . . . . . . . . . . . . . . . . . . . . . .A-1
EXHIBIT B PROJECT FACILITIES. . . . . . . . . . . . . . . . . . . . . . . .B-1
EXHIBIT C FORM OF REQUISITION . . . . . . . . . . . . . . . . . . . . . . .C-1
ii
LOAN AGREEMENT
THIS LOAN AGREEMENT (the "Agreement") is made and entered into as of July
1, 1996 between the BUSINESS FINANCE AUTHORITY OF THE STATE OF NEW HAMPSHIRE, a
body corporate and politic as an agency of the State of New Hampshire (the
"Issuer"), and CROWN PAPER CO. (the "Company"), a corporation for profit duly
organized and validly existing under the laws of the Commonwealth of Virginia,
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):
A. The Company has requested, and the Issuer has agreed, to issue revenue
bonds for the purpose of providing funds for the construction and acquisition of
the Project.
B. Pursuant to such request, the Issuer has determined to issue and sell
the Series 1996 Bonds to assist in the financing of the Project undertaken by
the Company.
NOW THEREFORE, in consideration of the premises and the mutual
representations and agreements hereinafter contained, the Issuer and the Company
agree as follows (provided that any obligation of the Issuer created by or
arising out of this Agreement shall never constitute an indebtedness of the
Issuer or give rise to any pecuniary liability of the Issuer but shall be
payable solely out of Revenues):
ARTICLE I
DEFINITIONS
Section 1.1. USE OF DEFINED TERMS. In addition to the words and terms
defined elsewhere in this Agreement or by reference to the Indenture or to
another document, the words and terms set forth in Section 1.2 hereof shall have
the meanings set forth therein unless the context or use clearly indicates
another meaning or intent. Such definitions shall be equally applicable to both
the singular and plural forms of any of the words and terms defined therein.
Unless otherwise defined herein, any terms defined in the Indenture shall have
the same meaning herein.
Section 1.2. DEFINITIONS. As used herein:
"Act" means Chapter 162-I of the New Hampshire Revised Statutes Annotated,
as amended and supplemented.
"Additional Bonds" means the Additional Bonds as defined in the Indenture.
"Additional Notes" means any nonnegotiable promissory note or notes, in
addition to the Series 1996 Note, delivered by the Company to the Trustee in
connection with the issuance of Additional Bonds, as provided herein.
"Additional Payments" means the amounts required to be paid by the Company
pursuant to the provisions of Section 4.2 hereof.
"Agreement" means this Loan Agreement as amended or supplemented from time
to time.
"Authorized Company Representative" means the person at the time designated
to act on behalf of the Company by written certificate furnished to the Issuer
and the Trustee, containing the specimen signature of that person and signed on
behalf of the Company by any of its officers. Such certificate may designate an
alternate or alternates.
"Bond Fund" means the Bond Fund created in the Indenture.
"Bond Resolution" means (a) when used with reference to the Series 1996
Bonds, the resolution providing for their issuance and approving this Agreement,
the Indenture and related matters; (b) when used with reference to an issue of
Additional Bonds, the resolution providing for the issuance of the Series 1996
Bonds, to the extent applicable, and the resolution of the Issuer providing for
the issuance of the Additional Bonds and approving any amendment or supplement
to this Agreement, any Supplemental Indenture and related matters; and (c) when
used with reference to Bonds when Additional Bonds are outstanding, the
resolution providing for the issuance of the Series 1996 Bonds and the
resolution of the Issuer providing for the issuance of the then outstanding and
the then to be issued Additional Bonds; in each case as amended or supplemented
from time to time.
"Bond Service Charges" means, for any period or time, the principal of and
interest and premium, if any, due on the Bonds for that period or payable at
that time whether due at maturity, upon acceleration, redemption or otherwise.
"Bonds" means the Series 1996 Bonds and any Additional Bonds.
"Bond Year" means any annual period commencing on the anniversary date of
the original issuance and delivery of the Bonds, with the earliest Bond Year
commencing with that original date and the last Bond Year commencing on the
anniversary date of such original date preceding or falling on the final payment
in full of all outstanding Bonds of each series.
"Change in Control" means, at any time after the date of original issuance
of the Bonds, the relinquishment by Holdings of its ownership of outstanding
shares of stock of the Company or, alternatively, the acquisition by any person
or group of persons (within the meaning of Section 13 or 14 of the Securities
Exchange Act of 1934, as amended) of beneficial ownership (within the meaning of
Rule 13d-3 promulgated by the Securities and Exchange Commission
2
under said Act) of 40% or more of the outstanding shares of common stock of
Holdings; or, during any period of 12 consecutive calendar months, individuals
who were either (i) directors of Holdings on the first day of such period or
(ii) whose nomination or election was approved by a vote of at least a majority
of the directors then still in office who were directors of Holdings on the
first day of such period or who were theretofore elected or nominated in
accordance with this clause (ii), shall cease to constitute a majority of the
board of directors of Holdings.
"Code" means the Internal Revenue Code of 1986, as amended, including, when
appropriate, the statutory predecessor of the Code, and all applicable
regulations (whether proposed, temporary or final) under that Code and the
statutory predecessor of the Code, and any official rulings and judicial
determinations under the foregoing applicable to the Bonds.
"Company" means Crown Paper Co., a corporation duly organized and validly
existing under the laws of the Commonwealth of Virginia and duly authorized to
conduct business in the State of New Hampshire and having its principal office
in Oakland, California, and its lawful successors and assigns to the extent
permitted by this Agreement.
"Completion Date" means the date on which the Project is substantially
complete as evidenced by a certificate of the Authorized Company Representative
pursuant to Section 3.6 hereof.
"Computation Date" means the last day of each Bond Year and the date on
which the final payment in full of all outstanding Bonds of each series is made.
"Determination of Taxability" means, with respect to the Series 1996 Bonds,
receipt by the Company of written notice from Owner or former Owner or the
Trustee of a final determination by the Internal Revenue Service or a court of
competent jurisdiction that, as a result of a failure by the Company to perform
any of its agreements in this Agreement or the Refunding Loan Agreement or the
inaccuracy of any of its representations in this Agreement or the Refunding Loan
Agreement, the interest paid or to be paid on any Bond (except to a "substantial
user" of the Projects or a "related person" within the meaning of Section 147(a)
of the Code) is or was includable in the gross income of the Bond's owner for
federal income tax purposes. No such determination will be considered final
unless the Owner or former Owner involved in the determination gives the Company
and the Trustee prompt written notice of the commencement of the proceedings
resulting in the determination and offers the Company, subject to the Company's
agreeing to pay all expenses of the proceedings and to indemnify the Owner or
former Owner against all liabilities that might result from it, the opportunity
to control the defense of the proceedings and either the Company does not agree
within thirty days to pay the expenses, indemnify the Owner or former Owner and
control the defense or the Company exhausts or chooses not to exhaust available
procedures to contest or obtain review of the result of the proceedings. As to
any series of Additional Bonds, any Determination of Taxability shall be as
defined in the applicable Supplemental Indenture.
"Eligible Investments" means Eligible Investments as defined in the
Indenture.
3
"Event of Default" means any of the events described as an Event of Default
in Section 7.1. hereof.
"Excess Earnings" means Excess Earnings as defined in the Indenture.
"Federal Tax Statement" means the Statement as to Tax Exempt Status of the
Bonds executed by the Company in connection with the issuance of the Series 1996
Bonds.
"Force Majeure" means any of the causes, circumstances or events described
as constituting Force Majeure in Section 7.1. hereof.
"Holdings" means Crown Vantage Inc., a corporation duly organized and
validly existing under the laws of the Commonwealth of Virginia and having its
principal office in Oakland, California, and its lawful successors and assigns
to the extent permitted by this Agreement.
"Indenture" means the Trust Indenture, dated as of even date herewith,
between the Issuer and the Trustee, as amended or supplemented from time to time
which provides for the issuance of the Series 1996 Bonds.
"Issuer" means the Business Finance Authority of the State of New
Hampshire, a body corporate and politic as an agency of the State of New
Hampshire, and its predecessors, successors and assigns.
"Loan" means the loan by the Issuer to the Company of the proceeds received
from the sale of the Bonds.
"Loan Payments" means the amounts required to be paid by the Company in
respect of the Bond Service Charges pursuant to Section 4.1 hereof.
"Notes" means the Series 1996 Note and any Additional Notes.
"Notice Address" means:
(a) As to the Issuer: 00 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Executive Director
(b) As to the Company: 000 Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Attention: General Counsel
4
(c) As to the Trustee: The Bank of New York
000 Xxxxxxx Xxxxxx, 00xx Xxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Trustee Administration
or such additional or different address, notice of which is given under Section
8.3 hereof.
"Person" or words importing persons mean firms, associations, partnerships
(including without limitation, general and limited partnerships), joint
ventures, societies, estates, trusts, corporations, public or governmental
bodies, other legal entities and natural persons.
"Project" means the construction and acquisition of a "project" (within the
meaning of the Act) used as sewage and solid waste disposal facilities,
including the Project Facilities generally described on Exhibit B hereto.
"Project Facilities" means the Company's facilities described in Exhibit B
hereto, together with any additions, modifications and substitutions to those
facilities.
"Refunding Loan Agreement" means the Refunding Loan Agreement dated as of
July 1, 1996 between the Issuer and the Company, as the same may be amended or
supplemented from time to time.
"Revenues" means (a) the amounts to be paid by the Company as Loan
Payments, (b) all other moneys received or to be received by the Issuer or the
Trustee in respect of Loan Payments, including, without limitation, all moneys
and investments in the Bond Fund, (c) any moneys and investments in the Project
Fund, and (d) all income and profit from the investment of the foregoing moneys.
The term "Revenues" does not include any moneys or investments in the Rebate
Fund, or amounts received by the Issuer as fees, reimbursement of costs and
expenses, or indemnity.
"Senior Debt" means the obligations of the Company under the Senior Loan
Document.
"Senior Loan Document" means the $350,000,000 Credit Agreement, dated as of
August 15, 1995, among the Company, Holdings, the banks listed therein, the
letter of credit issuing banks named therein and Xxxxxx Guaranty Trust Company
of New York, as Administrative Agent, X.X. Xxxxxx Securities Inc., Arranger and
The Bank of New York, The Long-Term Credit Bank of Japan, Ltd., NationsBank,
N.A. (Carolinas), The Toronto-Dominion Bank (Texas, Inc.), Co-Agents.
"Series 1996 Bonds" means the $12,300,000 Sewage and Solid Waste Disposal
Revenue Bonds (Crown Paper Co. Project), Series 1996 of the Issuer authorized in
the Bond Resolution and in Section 2.02 of the Indenture.
5
"Series 1996 Note" means the nonnegotiable promissory note of the Company,
dated as of the date of issuance of the Series 1996 Bonds, initially issued in
the form attached hereto as Exhibit A and in the principal amount of
$12,300,000, evidencing the obligation of the Company to make Loan Payments with
respect to the Series 1996 Bonds.
"Unassigned Issuer's Rights" means all of the rights of the Issuer to
receive Additional Payments under Section 4.2 hereof, to inspect the Project
under Section 5.1 hereof, to be held harmless and indemnified under Section 5.3
hereof, to be reimbursed for attorney's fees and expenses under Section 7.4
hereof, to receive notices under Section 8.3 hereof, to give or withhold consent
under Sections 4.7, 5.2 and 8.6 hereof and to exercise remedies expressly
reserved to the Issuer pursuant to Section 7.2 hereof.
Section 1.3. INTERPRETATION. Any reference herein to the Issuer, or to
any member or officer of the Issuer, includes entities or officials succeeding
to their respective functions, duties or responsibilities pursuant to or by
operation of law or lawfully performing their functions.
Any reference to a section or provision of the Constitution of the State or
the Act, or to a section, provision or chapter of the laws of the State or to
any statute of the United States of America, includes that section, provision or
chapter or statute as amended, modified, revised, supplemented or superseded
from time to time; provided, that no amendment, modification, revision,
supplement or superseding section, provision or chapter of statute shall be
applicable solely by reason of this provision, if it constitutes in any way an
impairment of the rights or obligations of the Issuer, the Owners, the Trustee
or the Company under this Agreement.
Unless the context indicates otherwise, words importing the singular number
include the plural number, and vice versa; the terms "hereof", "hereby",
"herein", "hereto", "hereunder", "hereinafter", and similar terms refer to this
Agreement; and the term "hereafter" means after, and the term "heretofore" means
before, the date of delivery of the Series 1996 Bonds. Words of any gender
include the correlative words of the other genders, unless the sense indicates
otherwise.
Section 1.4. CAPTIONS AND HEADINGS. The captions and headings in this
Agreement are solely for convenience of reference and in no way define, limit or
describe the scope or intent of any Articles, Sections, subsections, paragraphs,
subparagraphs or clauses hereof.
(End of Article I)
6
ARTICLE II
REPRESENTATIONS
Section 2.1. REPRESENTATIONS AND COVENANTS OF THE COMPANY. The Company
represents and covenants that:
(a) It is a corporation duly incorporated under the laws of the
Commonwealth of Virginia, and is duly qualified and authorized to transact
business in the State.
(b) It has full power and authority to execute, deliver and perform this
Agreement and the Series 1996 Note and to enter into and carry out the
transactions contemplated by those documents. That execution, delivery and
performance do not, and will not, cause or result in a material violation
in any provision of law applicable to the Company or the Company's Articles
of Incorporation or its Bylaws and do not, and will not, conflict with or
result in a default under any agreement or instrument to which the Company
is a party or by which it is bound. This Agreement and the Series 1996
Note have, by proper action, been duly authorized, executed and delivered
by the Company and all steps necessary have been taken to constitute this
Agreement and the Series 1996 Note valid and binding obligations of the
Company.
(c) Not more than $100,000 of the proceeds of the Series 1996 Bonds will
be used to finance the acquisition and construction of any costs of the
Project funded by such Bonds that were paid or incurred (i) prior to
July 18, 1993 with respect to costs of the Project described in the
resolution of the Issuer adopted March 11, 1992 or (ii) more than 60 days
prior to the adoption of the resolution of the Issuer on October 16, 1995
with respect to costs of the Project described in such resolution (and not
described in the March 11, 1992 resolution).
(d) The provision of financial assistance made available to it hereunder
and the commitments therefor made by the Issuer induced the Company to
maintain within the jurisdiction of the Issuer that business of the Company
to be conducted by use of the Project and such business will create or
preserve jobs and employment opportunities within the jurisdiction of the
Issuer.
(e) The Company has no present intention to sell or otherwise dispose of
or cease operating the Project.
(f) The requisitions of the Company from the Project Fund will be such
that at least 95% of the proceeds of the Bonds (including investment
earnings thereon) will be used for the acquisition, construction,
reconstruction or improvement of land or property of a character subject to
the allowance for depreciation under Section 167 of the Code and
constituting "sewage facilities" or "solid waste disposal facilities"
within the meaning of
7
Sections 142(a)(5) and (6) of the Code and at least 72.1% of such proceeds
will be used for the acquisition, construction, reconstruction or
improvement of such solid waste disposal facilities. No more than two
percent (2%) of the proceeds of the Series 1996 Bonds shall be used to pay
the costs of issuance of the Series 1996 Bonds. None of the proceeds of
the Series 1996 Bonds will be used to provide working capital.
(g) The average maturity of the Series 1996 Bonds does not exceed 120% of
the average reasonably expected economic life of the facilities to be
financed by the Series 1996 Bonds, determined pursuant to Section 147(b) of
the Code as of the later of the date the Series 1996 Bonds are issued or
the date the Project Facilities are expected to be placed in service.
(h) None of the proceeds of the Series 1996 Bonds will be used to provide
any airplane, skybox or other private luxury box or health club facility;
any facility primarily used for gambling; or any store the principal
business of which is the sale of alcoholic beverages for consumption off
premises.
(i) Less than 25% of the proceeds of the Series 1996 Bonds will be used to
acquire land or any interest therein, and none of the proceeds of the
Series 1996 Bonds will be used to provide land which is to be used for
farming purposes.
(j) No portion of the proceeds of the Series 1996 Bonds will be used to
acquire existing property or any interest therein unless such acquisition
met the rehabilitation requirements of Section 147(d) of the Code.
(k) The information furnished by the Company and used by the Issuer in
preparing the certification pursuant to Section 148 of the Code and the
information statement pursuant to Section 149(e) of the Code with respect
to the Series 1996 Bonds is accurate and complete as of the date of the
issuance of the Series 1996 Bonds.
8
(l) After the expiration of any applicable temporary period under Section
148(d)(3) of the Code, at no time during any Bond Year will the aggregate
amount of gross proceeds of the Series 1996 Bonds invested in higher
yielding investments (within the meaning of Section 148(b) of the Code)
exceed 150% of the debt service on the Series 1996 Bonds for such Bond Year
and the aggregate amount of gross proceeds of the Series 1996 Bonds
invested in higher yielding investments, if any, will be promptly and
appropriately reduced as the amount of outstanding Series 1996 Bonds is
reduced, provided however that the foregoing shall not require the sale or
disposition of any investments in higher yielding investments if such sale
or disposition would result in a loss which exceeds the amount which would
be paid to the United States pursuant to Section 5.08 of the Indenture (but
for such sale or disposition) at the time of such sale or disposition if a
payment under Section 5.08 of the Indenture were due at such time.
(m) The Series 1996 Bonds are not and will not be "federally guaranteed"
within the meaning of Section 149(b) of the Code.
(n) The Company will not take any action or omit to take any action if
such action or omission would cause the Series 1996 Bonds to be included in
gross income for federal income tax purposes.
(o) The Project constitutes an "industrial facility" within the meaning of
the Act.
(End of Article II)
9
ARTICLE III
ISSUANCE OF THE SERIES 1996 BONDS; COMPLETION OF THE PROJECT
Section 3.1. ISSUANCE OF THE SERIES 1996 BONDS; APPLICATION OF PROCEEDS.
To provide funds for the purpose of financing the facilities of the Project, the
Issuer will issue, sell and deliver the Series 1996 Bonds to the Original
Purchaser. The Series 1996 Bonds will be issued pursuant to the Indenture in
the aggregate principal amount, will bear interest, will mature and will be
subject to redemption as set forth therein. The Company hereby approves the
terms and conditions of the Indenture, the Purchase Agreement and the Series
1996 Bonds, and of the terms and conditions under which the Series 1996 Bonds
will be issued, sold and delivered. The Company shall carry out any duties or
obligations imposed upon it by the Indenture.
The proceeds from the sale of the Series 1996 Bonds shall be paid over to
the Trustee for the benefit of the Company and the Owners of the Series 1996
Bonds and deposited as follows: (a) a sum equal to any accrued interest paid by
the Original Purchaser on the Series 1996 Bonds shall be deposited in the Series
1996 Bond Fund and (b) the balance of the proceeds of the Series 1996 Bonds
shall be deposited in the Project Fund. Pending disbursement pursuant to
Section 3.2 hereof the proceeds so deposited in the Project Fund, together with
any investment earnings thereon, shall constitute a part of the Revenues in
which a security interest is granted by the Issuer to secure the payment of Bond
Service Charges with respect to the Series 1996 Bonds as provided in the
Indenture.
At the request of the Company, and for the purposes and upon fulfillment of
the conditions specified in the Indenture, the Issuer may provide for the
issuance, sale and delivery of Additional Bonds and provide the proceeds from
the sale thereof to the Company.
Section 3.2. DISBURSEMENTS FROM THE PROJECT FUND; COMPANY REQUIRED TO PAY
COSTS IN EVENT PROJECT FUND INSUFFICIENT. In the Indenture, the Issuer has
authorized and directed the Trustee to make disbursements from the Project Fund
to reimburse or pay the Company or any person designated by the Company for the
following:
(a) Costs incurred directly or indirectly for or in connection with
the acquisition, construction, improvement or installation of the Project,
including, but not limited to, those costs incurred for preliminary
planning and studies, architectural, legal, engineering, accounting,
consulting and supervisory and other services, labor, services, materials,
acquisition, construction and installation, recording of documents and
title work relating to the Project.
(b) Premiums attributable to all insurance required to be taken and
maintained during the construction of the Project and the premium on each
surety bond, if any, required with respect to work on the Project.
10
(c) Taxes, assessments and other charges in respect of the Project
that may become due and payable during the construction of the Project.
(d) Costs incurred directly or indirectly in seeking to enforce any
remedy against any contractor or subcontractor in respect of any actual or
claimed default under any contract relating to the Project Facilities.
(e) Financial, legal, accounting, printing and engraving fees,
charges and expenses, and all other such fees, charges and expenses
incurred in connection with the authorization, sale, issuance and delivery
of the Series 1996 Bonds and the preparation and delivery of this
Agreement, the Indenture and other related documents, but not in an amount
in excess of 2% of the sale proceeds of the Series 1996 Bonds.
(f) Fees and expenses that may become due during the construction of
the Project of the Trustee and of any paying agent properly incurred under
the Indenture.
(g) Any other incidental and necessary costs including without
limitation any expenses, fees and charges relating to the acquisition,
construction, improvement or installation of the Project (excluding,
however, the acquisition of motor vehicles, raw materials, supplies
inventory or accounts receivable, or for provision of working capital).
(h) Payment of any amounts necessary to pay interest on the Series
1996 Bonds during the construction of the Project.
(i) Payments made to the Rebate Fund.
Any disbursements from the Project Fund shall be made by the Trustee only
upon the written requisition signed by the Authorized Company Representative.
Each such written order shall be in substantially the form of requisition
request attached hereto as Exhibit D and shall be consecutively numbered and
accompanied by copies of the payments or reimbursements requested. In the case
of any contract providing for the retention of a portion of the contract price
there shall be paid from the Project Fund only the net amount remaining after
deduction of any such portion, and when the amount of any such retention is due
and payable, then such retention may be paid from the Project Fund.
11
All moneys in the Project Fund remaining after the Completion Date and
payment, or provision for payment, in full of the costs provided for in
subsections (a) through (h) of this Section, then due and payable, shall be
transferred to the Bond Fund, except for amounts retained by the Trustee for any
cost of the Project, or for amounts retained because the Company shall have
directed the Trustee to use such moneys to purchase Bonds for the purpose of
cancellation.
In the event the moneys in the Project Fund (including moneys from the
proceeds of any Additional Bonds sold to finance completion of the Project)
should not be sufficient to pay in full the costs to be paid therefrom, the
Company agrees, for the benefit of the Issuer and in order to fulfill the
purposes of the Act, to complete the construction and equipping to be
accomplished pursuant hereto and to pay that portion of the costs therefor as
may be in excess of the moneys available therefor in the Project Fund. The
Issuer does not make any warranty, either express or implied, that the moneys,
which will be paid into the Project Fund and which under the provisions of this
Agreement will be available for payment of the costs of the acquisition,
construction and equipping to be accomplished pursuant hereto, will be
sufficient to pay all the costs which will be incurred in that connection. The
Company agrees that if after exhaustion of the moneys in the Project Fund the
Company should pay pursuant hereto any portion of the said costs of the
construction and equipping, it shall not be entitled to any reimbursement
therefor from the Issuer, the Trustee or the holders of any of the Bonds, nor
shall it be entitled to any diminution in or abatement or postponement of this
Agreement.
Section 3.3. ACQUISITION, CONSTRUCTION AND INSTALLATION. The Company
agrees that it will acquire, construct, install and equip the Project or cause
the Project to be acquired, constructed, installed and equipped in accordance
with plans and specifications on file at the Project and otherwise in accordance
with this Agreement.
The Company may, after the execution and delivery of this Agreement, cause
such changes to be made to the plans and specifications for the Project as it
may desire and as will not result in any material change in the basic design of
the Project or result in a material addition to or deletion from the Project or
in changing its character as an "industrial facility" within the meaning of the
Act or a sewage or solid waste disposal facility within the meaning of Section
142(a)(5) and (6) of the Code.
The Company shall have the sole responsibility for the acquisition,
construction, installation and equipping of the Project and shall perform the
same itself or through agents, contractors and others selected by it, and may
make or issue such contracts, orders, receipts and instructions, and in general
do or cause to be done all such other things, as it may in it sole discretion
consider requisite or advisable for the acquisition, construction, installation
and equipping of the Project consistent with this Agreement and the Indenture.
The Company shall have full authority and the sole right under this Agreement to
supervise and control directly or indirectly all aspects of the acquisition,
construction, installation and equipping of the Project consistent with this
Agreement and the Indenture. All contracts for carrying out the Project shall
12
be in the Company's own name. The Issuer shall not be liable to the Company or
any other person for any latent or patent defect in the Project.
The Company will proceed with the Project with due diligence and will use
all reasonable efforts to cause the Project to be completed on or before three
years from the date of issuance of the Bonds.
Section 3.4. INVESTMENT OF FUND MONEYS. At the written request or at the
oral request, confirmed in writing within two Business Days, of the Authorized
Company Representative, any moneys held as part of the Bond Fund, the Project
Fund or the Rebate Fund shall be invested or reinvested by the Trustee in
specified Eligible Investments. The Company hereby covenants that it will
restrict any investment and reinvestment and the use of the proceeds of the
Series 1996 Bonds in such manner and to such extent, if any, as may be necessary
so that the Series 1996 Bonds will not constitute arbitrage bonds under Section
148 of the Code.
Section 3.5. REBATE FUND. Within five days after the end of each Bond
Year and within five days after payment in full of all outstanding Bonds of each
series, the Company shall calculate the amount of Excess Earnings as of the end
of that Bond Year or the date of such payment in full and shall notify the
Trustee of that amount. If the amount then on deposit in the applicable account
in Rebate Fund created under the Indenture is less than the amount of Excess
Earnings for that series of Bonds (computed by taking into account the amount or
amounts, if any, previously paid to the United States pursuant to Section 5.08
of the Indenture and this Section), the Company shall, within five days after
the date of the aforesaid calculation, pay to the Trustee for deposit in the
Rebate Fund an amount sufficient to cause the Rebate Fund to contain an amount
equal to the Excess Earnings for that series of Bonds. The Company agrees to
direct the Trustee to make rebate payments to the United States as are required
pursuant to Section 5.08 of the Indenture. The obligation of the Company to
make such payments and provide direction to the Trustee hereunder shall remain
in effect and be binding upon the Company notwithstanding the release and
discharge of the Indenture or termination of this Agreement.
Section 3.6. COMPLETION OF THE PROJECT. The Company agrees that it will
cause the completion of the Project with all reasonable dispatch and will pay
when due all fees, costs and expenses incurred in such acquisition and
construction from funds available therefor in accordance with this Agreement or
otherwise. The Company further agrees that it will ask, demand, xxx for, xxxx,
recover and receive all such sums of money, debts and other demands whatsoever
which may be due, owing and payable under the terms of any contract, order,
receipt, writing and instruction in connection with the acquisition and
construction of the Project, and to enforce the provisions of any contract,
agreement, obligation, bond or other performance security with respect thereto.
The Completion Date of the Project shall be evidenced to the Issuer and the
Trustee by a certificate signed by the Authorized Company Representative stating
(i) the date on which the acquisition and improvement of the Project were
substantially completed, (ii) that all other
13
facilities necessary in connection with the Project have been acquired and
improved, (iii) that the acquisition and improvement of the Project and such
other facilities have been accomplished in such a manner as to conform with all
applicable zoning, planning, building, environmental and other similar
governmental regulations, (iv) that all costs of such acquisition and
improvement then due and payable have been paid and (v) the amounts which the
Trustee shall retain in the Project Fund for the payment of costs not yet due or
the liability for which the Company is contesting or which otherwise should be
retained and the reasons such amounts should be retained. Such certificate may
state that it is given without prejudice to any rights against third parties
which then exist or may subsequently come into being.
(End of Article III)
14
ARTICLE IV
LOAN BY ISSUER; REPAYMENT OF THE LOAN;
LOAN PAYMENTS AND ADDITIONAL PAYMENTS
Section 4.1. LOAN REPAYMENT; DELIVERY OF NOTES. In consideration of
issuance of the Series 1996 Bonds, the Company shall make, as loan payments, in
lawful money of the United States of America, on or before each date that any
payment of principal, premium or interest on any Bond is due (at a maturity,
upon redemption, by acceleration or otherwise), Loan Payments which correspond,
as to amount, to the Bond Service Charges then payable on the Series 1996 Bonds
so that the Trustee shall have immediately available funds in its possession on
each such date that a payment is due on the Bonds in the full amount of such
payment. All such Loan Payments shall be paid to the Trustee in accordance with
the terms of the Series 1996 Note for the account of the Issuer and shall be
held and disbursed in accordance with the provisions of the Indenture and this
Agreement for application to the payment of Bond Service Charges.
To further evidence the Company's performance of its obligations under this
Agreement, the Company shall execute and deliver to the Trustee, concurrently
with the issuance and delivery of the Series 1996 Bonds, the Series 1996 Note.
The Series 1996 Note shall be dated as of the date of this Agreement and shall
mature and bear interest, shall contain substantially the other terms and
provisions and shall be subject to prepayment, as set forth, in Exhibit A
hereto.
So long as there exists no Event of Default hereunder, the Company shall be
entitled to a credit against the Loan Payments required to be made on any date
to the extent that the balance in the Bond Fund (which is available therefor) is
then in excess of amounts required (a) for the payment of Bonds theretofore
called for redemption, (b) for the payment of interest due on a prior date for
which checks or drafts have been drawn and mailed by the Trustee and (c) to be
deposited in the Bond Fund by the Indenture for use other than for the payment
of Bond Service Charges on such date. In any event, however, if on any date
that any payment of principal, premium or interest on any Bond is due (at
maturity, upon redemption, by acceleration or otherwise), the balance in the
Bond Fund (which is available therefor) is for any reason insufficient to make
required payments of Bond Service Charges, as and when due, the Company
forthwith will pay to the Trustee in immediately available funds, for the
account of the Issuer and for deposit into the Bond Fund, any deficiency.
In connection with the issuance of any Additional Bonds, the Company shall
execute and deliver to the Trustee one or more Additional Notes in a form
substantially similar to the form of the Series 1996 Note. All such Additional
Notes shall:
(a) provide for payments of interest equal to the payments of interest on
the corresponding Additional Bonds;
15
(b) require payments of principal and redemption payments and any premium
equal to the payments of principal, prepayments and sinking fund payments
and any premium on the corresponding Additional Bonds;
(c) require all payments on any such Additional Notes to be made no later
than the due dates for the corresponding payments to be made on the
corresponding Additional Bonds; and
(d) contain by reference or otherwise optional and mandatory redemption
provisions and provisions in respect of the optional and mandatory
acceleration or prepayment of principal and any premium corresponding with
the redemption and acceleration provisions of the corresponding Additional
Bonds.
All payments on the Notes shall be applied solely to the payment of Bond
Service Charges on all outstanding Bonds, except that, so long as no Event of
Default has occurred and is subsisting hereunder, payments by the Company on any
of the Notes shall be used by the Trustee to make a like payment of Bond Service
Charges on the corresponding Bonds in connection with which those Notes were
delivered and shall constitute Loan Payments made in respect of those
corresponding Bonds.
Upon payment in full, in accordance with the Indenture, of the Bond Service
Charges on any or all Bonds, whether at maturity, upon acceleration or by
redemption or otherwise, or upon provision for the payment thereof having been
made in accordance with the provisions of the Indenture, and upon payment of all
amounts owed to the Trustee, (i) the Notes issued concurrently with those
corresponding Bonds, of the same maturity, bearing the same interest rate and in
an amount equal to the aggregate principal amount of the Bonds so surrendered
and cancelled or for the payment of which provision has been made, shall be
deemed fully paid, the obligations of the Company thereunder shall be
terminated, and any of those Notes shall be surrendered by the Trustee to the
Company, and shall be cancelled by the Company, or (ii) in the event there is
only one of those Notes, an appropriate notation shall be endorsed thereon
evidencing the date and amount of the principal payment or prepayment equal to
the Bonds so paid, or with respect to which provision for payment has been made,
and that Note shall be surrendered by the Trustee to the Company for
cancellation if all Bonds shall have been paid (or provision made therefor) and
cancelled as aforesaid. Unless the Company is entitled to a credit under
express terms of this Agreement or the Notes, all payments on each of the Notes
shall be in the full amount required thereunder.
16
Except for such interest of the Company as may hereinafter arise pursuant
to Section 8.2 hereof or Section 5.06 of the Indenture, the Company and the
Issuer each acknowledge that neither the Company nor the Issuer has any interest
in the Bond Fund and any moneys deposited therein shall be in the custody of and
held by the Trustee in trust for the benefit of the Owners.
Section 4.2. ADDITIONAL PAYMENTS.
(a) The Company shall pay to the Issuer, as Additional Payments hereunder,
any and all reasonable costs and expenses incurred or to be paid by the Issuer
in connection with the issuance, delivery and carrying of the Series 1996 Bonds
and Additional Bonds, including without limitation, (i) any necessary expenses
incurred by the members of the Issuer while engaged in the performance of their
duties as such members or officers of the Issuer, (ii) the reasonable fees and
expenses of counsel to the Issuer and of bond counsel, (iii) all publication,
filing and recording fees, and (iv) expenses incurred or advances made in the
exercise of the Issuer's rights or the performance of its obligations hereunder,
under the Indenture, or under the Purchase Agreement.
(b) The Company also agrees to pay to the Trustee, when due, until the
principal of, premium, if any and interest on the Bonds shall have been paid in
full: (i) an amount equal to the annual fee of the Trustee for its Ordinary
Services rendered as Trustee and the Ordinary Expenses (including reasonable
attorneys' fees and expenses) of the Trustee incurred as Trustee under the
Indenture (including reasonable attorneys' fees and expenses), (ii) the
reasonable fees and charges of the Trustee as Registrar, authenticating agent
and paying agent under the Indenture, (iii) the reasonable fees and charges of
the Trustee for Extraordinary Services rendered by it and Extraordinary Expenses
(including reasonable attorneys' fees and expenses) incurred by it under the
Indenture and (iv) all other amounts which the Trustee is entitled to receive
hereunder or under the Indenture as reimbursement or indemnity; provided,
however, that the Company may, without creating a default hereunder, withhold
such payment to contest in good faith the necessity or reasonableness for any
such Extraordinary Services or Extraordinary Expenses and the reasonableness of
any such fees, charges or expenses that the Trustee has incurred without the
consent of the Company in excess of $2,000.
(c) Upon the issuance of the Bonds, the Company shall pay the Issuer an
administrative fee of $92,250.
Section 4.3. PLACE OF PAYMENTS. The Company shall make all Loan Payments
directly to the Trustee at its principal corporate trust office. Additional
Payments shall be made directly to the person or entity to whom or to which they
are due.
17
Section 4.4. OBLIGATIONS UNCONDITIONAL. The obligations of the Company to
make Loan Payments, Additional Payments and any payments required of the Company
under Section 3.2 hereof or Section 5.07 of the Indenture shall be absolute and
unconditional under any and all circumstances whatsoever, and the Company shall
make such payments without abatement, diminution or deduction regardless of any
cause or circumstances whatsoever including, without limitation, any defense,
set-off, recoupment or counterclaim which the Company may have or assert against
the Issuer, the Trustee or any other Person.
Section 4.5. ASSIGNMENT OF AGREEMENT AND REVENUES; BINDING EFFECT OF
INDENTURE ON COMPANY; FINANCING STATEMENTS. To secure the payment of Bond
Service Charges, the Issuer shall assign to the Trustee, by the Indenture, its
rights under and interest in this Agreement (except for the Unassigned Issuer's
Rights) and shall assign and grant a security interest in the Revenues to the
Trustee.
The Company hereby agrees and consents to those assignments and grants.
The Company hereby agrees to be bound by and to comply with the provisions of
the Indenture applicable to, affecting or purporting to bind the Company. The
Trustee shall be a third party beneficiary of this Agreement and shall be
entitled to all rights provided to it hereunder and to enforce all provisions
hereof.
The Company will, at its own expense, cause all necessary financing
statements, amendments thereto, continuation statements and instruments of
similar character relating to the assignment and grants made to secure the
Bonds, to be recorded and filed in such manner and in such places as may be
required by law in order to fully preserve and protect the security of the
Owners of the Bonds and the rights of the Trustee under this Agreement and the
Indenture.
Section 4.6. DEPOSIT OF MONEYS IN BOND FUND; MONEYS FOR REDEMPTION. The
Company may at any time deposit moneys in the Bond Fund, without premium or
penalty, to be held by the Trustee for application to Loan Payments not yet due
and payable. Such deposits shall be credited against the Loan Payments, or any
portion thereof, in the order of their due dates. In addition, the Company may
deliver moneys to the Trustee for optional redemption of Series 1996 Bonds
pursuant to Section 6.1 or 6.2 hereof and shall deliver moneys to the Trustee
for mandatory redemption of Series 1996 Bonds pursuant to Section 6.3 hereof.
Section 4.7. ASSIGNMENT BY COMPANY. This Agreement may be assigned in
whole or in part by the Company without the necessity of obtaining the consent
of the Issuer, the Trustee or the Owners, subject, however, to each of the
following conditions:
(a) Unless waived by the Issuer, the Company shall notify the Issuer
in writing of the identity of any assignee at least 15 Business Days prior
to the effective date of such assignment;
18
(b) No assignment (other than pursuant to Section 5.5 hereof) shall
relieve the Company from primary liability for any of its obligations
hereunder, and in the event of any such assignment the Company shall
continue to remain primarily liable for the payment of the Loan Payments
and Additional Payments and for performance and observance of the
agreements on its part herein provided to be performed and observed by it;
(c) Any assignment from the Company must retain for the Company such
rights and interests as will permit it to perform its obligations under
this Agreement, and any assignee from the Company shall assume in writing
the obligations of the Company hereunder to the extent of the interest
assigned;
(d) The Company shall, within thirty (30) days after execution
thereof, furnish or cause to be furnished to the Issuer and the Trustee a
true and complete copy of each such assignment together with any instrument
of assumption;
(e) Any assignment from the Company shall not materially impair
fulfillment of the purposes to be accomplished by operation of the Project
as a project, the refinancing and financing, respectively, of which is
permitted under the Act; and
(f) No assignment from the Company shall occur unless and until the
Company obtains an opinion of Bond Counsel to the effect that such
assignment will not, in and of itself, have an adverse effect on the
exclusion of interest on the Series 1996 Bonds from gross income for
federal income tax purposes;
provided, however, that the foregoing conditions shall not apply if all of the
Owners and the Issuer consent in writing to the assignment of this Agreement.
(End of Article IV)
19
ARTICLE V
ADDITIONAL AGREEMENTS AND COVENANTS
Section 5.1. RIGHT OF INSPECTION. Subject to reasonable security and
safety regulations and upon two days' written notice, the Issuer and the
Trustee, and their respective agents, shall have the right during normal
business hours to inspect the Project.
Section 5.2. SALE, LEASE OR GRANT OF USE BY COMPANY. The Company may
sell, lease or otherwise grant the right to occupy and use the Project, in whole
or in part, to others, provided that:
(a) No such grant, sale or lease shall relieve the Company from its
obligations under this Agreement or the Notes;
(b) In connection with any such grant, sale or lease the Company shall
retain such rights and interests as will permit it to comply with its
obligations under this Agreement and the Notes;
(c) No such grant, sale or lease shall impair materially the purposes of
the Act to be accomplished by operation of the Project as a project as
provided herein and in the Act;
(d) The Issuer consents to such sale, lease or other such grant in
writing;
(e) The Company obtains the opinion of Bond Counsel to the effect that
such lease, sale or grant shall not have an adverse effect on the exclusion
of interest on the Bonds from gross income for federal income tax purposes.
Notwithstanding the foregoing, the Company may remove, sell or otherwise dispose
of property that has become worn out, obsolete or unnecessary for its business
purposes without satisfying the requirements of Clauses (d) and (e).
Section 5.3. INDEMNIFICATION. The Company regardless of any agreement to
maintain insurance, will indemnify the Issuer against (a) any and all
liabilities, claims, damages, costs and expenses by any person related to the
participation of the Issuer in the transactions contemplated by the Indenture,
the Purchase Agreement, or this Agreement, including without limitation claims
arising out of any condition of the Project or the construction, use, occupancy
or management thereof; any accident, injury or damage to any person occurring in
or about the Project site; any breach by the Company of its obligations under
the Purchase Agreement or this Agreement; any act or omission of the Company or
any of its agents, contractors, servants, employees or licensees; or the
offering, issuance, sale or any resale of the Bonds to the extent permitted by
law, and (b) all costs, counsel fees and expenses, expenses or liabilities
reasonably incurred in connection with any such claim or any action or
proceeding brought thereon. In case
20
any action or proceeding is brought against the Issuer by reason of any such
claim, the Company will defend the same at its expense upon notice from the
Issuer, and Issuer will cooperate with the Company, at the expense of the
Company, in connection therewith.
The Company agrees to indemnify the Trustee for and to hold it harmless
against any and all liabilities, claims, damages, costs and expenses incurred by
or asserted against the Trustee without negligence or bad faith on the part of
the Trustee, on account of any action taken or omitted to be taken by the
Trustee in accordance with the terms of this Agreement, the Bonds, the Notes or
the Indenture or in connection with the Project or the sale of the Bonds, or any
action taken at the request of or with the consent of the Company, including the
costs and expenses of the Trustee in defending itself against any such claim,
action or proceeding brought in connection with the exercise or performance of
any of its powers or duties under this Agreement, the Bonds, the Indenture or
the Notes.
In case any action or proceeding is brought against the Issuer or the
Trustee in respect of which indemnity may be sought hereunder, the party seeking
indemnity promptly shall give notice of that action or proceeding to the
Company, and the Company upon receipt of that notice shall have the obligation
and the right to assume the defense of the action or proceeding; provided, that
failure of a party to give that notice shall not relieve the Company from any of
its obligations under this Section unless that failure prejudices the defense of
the action or proceeding by the Company. An indemnified party may employ
separate counsel and participate in the defense, which shall be at the expense
of the indemnified party unless such counsel is approved by the Company which
such approval shall not be unreasonably withheld. The Company shall not be
liable for any settlement made without its consent.
The indemnification set forth above is intended to and shall include the
indemnification of all affected officials, directors, officers and employees of
the Issuer and the Trustee, respectively. That indemnification is intended to
and shall be enforceable by the Issuer and the Trustee, respectively, to the
full extent permitted by law.
This section shall survive the termination of this Agreement and the
Indenture.
Section 5.4. COMPANY NOT TO ADVERSELY AFFECT TAX EXEMPT STATUS OF BONDS'
INTEREST. The Company hereby represents that it has taken and caused to be
taken, and covenants that it will take and cause to be taken, all actions that
may be required of it, alone or in conjunction with the Issuer, for the interest
on the Series 1996 Bonds to be and remain excluded from gross income for federal
income tax purposes, and represents that it has not taken or permitted to be
taken on its behalf, and covenants that it will not take or permit to be taken
on its behalf, any action that would adversely affect such exclusion under the
provisions of the Code.
Section 5.5. COMPANY TO MAINTAIN ITS EXISTENCE; SALES OF ASSETS OR
MERGERS. The Company shall do all things necessary to preserve and keep in full
force and effect its existence, rights and franchises, except as otherwise
permitted by this Section 5.5. In particular, the Company shall not (a) sell,
transfer or otherwise dispose of all, or substantially all, of its assets;
21
(b) consolidate with or merge into any other entity; or (c) permit one or more
other entities to consolidate with or merge into it. The preceding restrictions
shall not apply, however, to a transaction if all of the following conditions
are met:
(i) the transferee or the surviving or resulting entity is duly formed
and existing under the laws of one of the states of the United States of
America or the District of Columbia and is duly qualified to do business in
the State;
(ii) the transferee or the surviving or resulting entity, if other than
the Company, by proper written instrument satisfactory to the Issuer and
the Trustee, irrevocably and unconditionally assumes the obligation to
perform and observe the agreements and obligations of the Company under
this Agreement, the Indenture and the Notes;
(iii) no Event of Default, or condition which with the passage of time or
notice would become an Event of Default, will exist hereunder or under the
Indenture immediately after the transfer, consolidation or merger; and
(iv) the Company obtains the opinion of Bond Counsel regarding the
exclusion of interest on the Series 1996 Bonds from gross income for
federal income tax purposes.
Section 5.6. BOOKS AND RECORDS; FINANCIAL STATEMENTS. The Company shall
within 120 days after the close of each fiscal year furnish to the Trustee, the
Issuer and the Owner of any Bond who shall request the same in writing a copy of
each of the consolidated financial statements for the Company, certified by its
independent certified public accountants, that it customarily furnishes to its
shareholders; provided that so long as the Company is subject to the reporting
requirements of the Securities Exchange Act of 1934, as amended, a copy of the
Company's annual report on Form 10-K shall satisfy this requirement. The
Company also agrees to furnish to the Trustee, the Issuer and the Owner of any
Bond who shall request the same in writing a copy of each of the other financial
statements and reports which it customarily furnishes to its shareholders at the
same times as they are furnished to its shareholders. The Company agrees to
permit the Issuer and the Trustee to examine the books and records of the
Company with respect to the Project at reasonable times and upon reasonable
notice.
Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder.
Section 5.7. MAINTENANCE OF PROJECT BY COMPANY. The Company agrees that
at all times during the term of this Agreement it will, at its own expense,
maintain, preserve and keep the Project or cause the Project to be maintained,
preserved and kept with the appurtenances and every part and parcel thereof, in
good repair, working order and condition and it will from time to time make or
cause to be made all necessary and proper repairs, replacements and renewals;
provided, however, that the Company shall not be under any obligation to renew,
repair or
22
replace any inadequate, obsolete, worn-out, unsuitable, undesirable or
unnecessary portion of the Project. In any instance where the Company
determines that all or any portion of the Project has become inadequate,
obsolete, worn-out, unsuitable, undesirable or unnecessary, the Company may
remove all or such portion of the Project and sell, trade-in, exchange or
otherwise dispose of the Project or such removed portion, provided that such
removal shall not impair (i) the character of the Project as an "industrial
facility" as such term is defined in the Act, or (ii) the exclusion of interest
on the Bonds from gross income for federal income tax purposes.
The removal from the Project of any portion thereof pursuant to the
provisions of this Section shall not entitle the Company to any abatement or
diminution of the payments and other sums payable hereunder.
Section 5.8. INSURANCE REQUIRED. The Company agrees that at all times
during the term of this Agreement it will, at its own expense, insure the
Project in such amounts and in such manner (including self insurance) as its
similar properties are usually insured by it, and will carry liability insurance
with respect to the Project in such amounts and in such manner (including self
insurance) as are carried by it with respect to similar properties. The
proceeds of any fire or casualty insurance carried on the Project shall belong
solely to the Company and the Company shall have no obligation to pay any part
thereof to the Issuer or the Trustee. In addition, the Company shall have no
obligation to apply the proceeds of any insurance to the repair or
reconstruction of the Project.
Section 5.9. LAND USE. In the acquisition, construction, maintenance,
improvement and operation of the Project, the Company will comply in all
material respects with all applicable building, zoning, subdivision,
environmental protection, sanitary and safety and other land use laws, rules and
regulations and will not permit any nuisance thereat. It shall not be a breach
of this Section if the Company fails to comply with such laws, rules and
regulations during any period in which the Company shall in good faith be
diligently contesting the validity thereof.
Section 5.10. CURRENT EXPENSES. The Company will pay all costs and
expenses of operation, maintenance and upkeep of the Project including without
limitation all taxes, excises and other governmental charges lawfully levied
thereon or with respect to the Company's interest therein or use thereof. It
shall not be a breach of this Section if the Company fails to pay any such taxes
or charges during any period in which the Company shall in good faith be
diligently contesting the validity or amount thereof.
Section 5.11. COVENANT WITH RESPECT TO MORTGAGE. (a) The Company agrees
that it will not take (or permit to be taken) any action with respect to the
amendment or termination of the Mortgage or the rights of the owners thereunder,
the release of all or any part of the property subject to the lien of the
Mortgage, or the waiver or release of any right of the Company under the
Mortgage unless and until there has been delivered to the Trustee the following:
(1) written evidence from each Rating Agency to the effect that such action,
release or waiver will not result in the withdrawal or reduction of such Rating
Agency's then current rating of the Bonds; (2) an Opinion of Counsel stating
that such action by the Trustee is permitted by the Indenture and this
23
Agreement; and (3) an Opinion of Tax Counsel stating that such action by the
Trustee will not adversely affect the exclusion of interest on the Bonds from
gross income for federal income tax purposes. At such time as the Company's
obligations under the Senior Loan Document (or any refinancing thereof) have
been fully discharged, it is the Company's intention that the Bondholders
(together with the holders of any other debt then secured under the Mortgage)
shall succeed to all the rights and remedies under the Mortgage of the lenders
under the Senior Loan Document, with full right to control any proceedings
thereunder.
(b) By its execution and delivery of this Agreement, the Company
authorizes the Trustee to execute and deliver the Mortgage Acknowledgement
attached to the Indenture. In connection with such execution and delivery by
the Trustee, the Company represents to the Trustee for the benefit of Owners of
the Bonds that the Bonds constitute "Permitted IRB Debt" as defined in the
Mortgage.
(End of Article V)
24
ARTICLE VI
REDEMPTION OF SERIES 1996 BONDS
Section 6.1. OPTIONAL REDEMPTION. Provided no Event of Default shall have
occurred and be subsisting, at any time and from time to time, the Company may
deliver moneys to the Trustee in addition to Loan Payments or Additional
Payments required to be made for the purpose of prepaying amounts due under this
Agreement and the Series 1996 Note and direct the Trustee to use the moneys so
delivered for the purpose of purchasing or redeeming Bonds pursuant to
Subsection 4.01(c) of the Indenture of the Series 1996 Bonds. Pending
application for those purposes, any moneys so delivered shall be held by the
Trustee in a special account in the Bond Fund and delivery of those moneys shall
not operate to xxxxx or postpone Loan Payments or Additional Payments otherwise
becoming due or to alter or suspend any other obligations of the Company under
this Agreement or the Series 1996 Note.
Section 6.2. EXTRAORDINARY OPTIONAL REDEMPTION. The Company may deliver,
subject to the conditions hereinafter imposed, to the Trustee the moneys needed
to redeem the entire unpaid principal balance of the Series 1996 Bonds in
accordance with Subsection 4.01(a) of the Indenture upon the occurrence of any
of the following events:
(a) The Project shall have been damaged or destroyed to such an extent
that the Company has determined and notified the Issuer and the Trustee
that (1) the Project cannot reasonably be expected to be restored, within a
period of six consecutive months, to the condition thereof immediately
preceding such damage or destruction or (2) the normal use and operation of
the Project is reasonably expected to be prevented for a period of six
consecutive months;
(b) Title to, or the temporary use of, all or a significant part of the
Project shall have been taken under the exercise of the power of eminent
domain to such extent that (1) the Project cannot reasonably be expected to
be restored within a period of six consecutive months to a condition of
usefulness comparable to that existing prior to the taking or (2) as a
result of the taking, normal use and operation of the Project is reasonably
expected to be prevented for a period of six consecutive months;
(c) As a result of any changes in the Constitution of the State, the
Constitution of the United States of America, or state or federal laws as a
result of legislative or administrative action or by final decree, judgment
or order of any court or administrative body (whether state or federal)
entered after the contest thereof by the Issuer or the Company in good
faith, the obligations of the Company under this Agreement or the Series
1996 Note shall have become void or unenforceable or impossible of
performance in any material respect in accordance with the intent and
purpose of the parties as expressed in this Agreement and the Series 1996
Note, or if unreasonable burdens or excessive liabilities shall have been
imposed with respect to the Project or the operation
25
thereof, including, without limitation, federal, state or other ad valorem
property, income or other taxes not being imposed on the date of this
Agreement other than ad valorem taxes presently levied upon privately owned
property used for the same general purpose as the Project; or
(d) Changes in economic availability of raw materials, operating supplies
or facilities necessary to operate the Project or technological or other
changes make continued operation of the Project uneconomical in the opinion
of the Company.
Moneys delivered by the Company to the Trustee pursuant to this Section shall
upon the redemption of the Series 1996 Bonds constitute a prepayment of amounts
otherwise due under the Section 4.1 of this Agreement and of the Series 1996
Note. The Company shall, if it is to exercise its right to prepayment specified
in this Section, within six months following the occurrence of an event
described above, give notice to the Issuer and to the Trustee of such occurrence
and, if the Company shall so elect, upon the occurrence of an event specified in
clauses (a) or (b) above, that the Company does not intend to restore the
affected Project. Such notice also shall specify the date on which the Company
will deliver the funds required to redeem the Series 1996 Bonds, which date
shall be not more than ninety days from the date that notice is mailed. The
Company shall make arrangements satisfactory to the Trustee for the giving of
the required notice of redemption.
The amount payable by the Company in the event of redemption of Series 1996
Bonds pursuant to this Section and Subsection 4.01(a) of the Indenture shall be
the sum of the following:
(i) An amount of money which, when added to the moneys and investments
held to the credit of the Bond Fund, will be sufficient pursuant to the
provisions of the Indenture to pay, at par, plus any accrued interest
thereon, and discharge all then outstanding Series 1996 Bonds of the
applicable series on the earliest applicable redemption date, that amount
to be paid to the Trustee, plus
(ii) An amount of money equal to the Additional Payments relating to the
applicable Series 1996 Bonds accrued and to accrue until actual final
payment and redemption of such Series 1996 Bonds, that amount or applicable
portions thereof to be paid to the Trustee or to the Persons to whom those
Additional Payments are or will be due, plus
(iii) An amount sufficient to pay all amounts due or that will become due
with respect to the Series 1996 Bonds pursuant to Section 3.5 hereof,
Section 5.08 of the Indenture and Section 148(f) of the Code.
26
The requirement of (ii) above with respect to Additional Payments to accrue may
be met if provisions satisfactory to the Trustee and the Issuer are made for
paying those amounts as they accrue.
Section 6.3. MANDATORY REDEMPTION IN EVENT OF A DETERMINATION OF
TAXABILITY. Upon receipt by the Company from any Owner or the Trustee of notice
of Determination of Taxability with respect to the Series 1996 Bonds, the
Company shall, in the manner and upon the earliest practicable date selected by
the Trustee (after consultation with the Company as provided in the Indenture),
and in no event later than 180 days following that notice, deliver to the
Trustee the moneys needed to redeem the applicable principal amount of
outstanding Series 1996 Bonds in accordance with the loss of tax exemption
redemption provisions set forth in Subsection 4.01(b) of the Indenture. The
amount payable by the Company in such event shall be an amount which, together
with any moneys available in the Bond Fund for such purposes, shall equal 100%
of the outstanding principal amount of the series of Series 1996 Bonds to be
redeemed, together with accrued interest to the redemption date. In the event
that all Series 1996 Bonds are redeemed in accordance with this Section, the
amount payable by the Company shall include an amount of money equal to the
Additional Payments relating to the Series 1996 Bonds accrued and to accrue
until actual final payment and redemption of the Series 1996 Bonds. Moneys
delivered by the Company to the Trustee pursuant to this Section shall upon the
redemption of the Series 1996 Bonds constitute a prepayment of amounts otherwise
due under Section 4.1 hereof and the Series 1996 Note.
Section 6.4. ACTIONS BY ISSUER. At the request of the Company or the
Trustee, the Issuer shall take all steps, if any, required of it under the
applicable provisions of the Indenture or the Series 1996 Bonds to effect the
redemption of all or a portion of the Series 1996 Bonds pursuant to this
Article VI.
(End of Article VI)
27
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.1. EVENTS OF DEFAULT. Each of the following shall be an Event
of Default:
(a) The Company shall fail to pay any Loan Payment when and as that Loan
Payment is due and payable;
(b) The Company shall fail to deliver to the Trustee, or cause to be
delivered on its behalf, the moneys needed to redeem any outstanding Series
1996 Bonds in the manner and upon the date requested in writing by the
Trustee as provided in Article VI of this Agreement;
(c) The Company shall fail to observe and perform any other agreement,
term or condition contained in this Agreement (other than with respect to
Section 5.4 hereof), and the continuation of such failure for a period of
ninety days after notice thereof shall have been given to the Company by
the Trustee, or for such longer period as the Trustee may agree to in
writing; provided, that if the failure is other than the payment of money
and is of such nature that it can be corrected, but not within the
applicable period, that failure shall not constitute an Event of Default so
long as the Company institutes curative action within the applicable period
and diligently pursues such action to completion;
(d) The Company shall: (i) fail to pay, or admit in writing its inability
to pay, its debts generally as they become due; (ii) have an order for
relief entered in any case commenced by or against it under the federal
bankruptcy laws, as now or hereafter in effect; (iii) commence a proceeding
under any other federal or state bankruptcy, insolvency, reorganization or
similar law, or have such a proceeding commenced against it and either have
an order of insolvency or reorganization entered against it or have such a
proceeding remain undismissed and unstayed for ninety days; (iv) make an
assignment for the benefit of creditors; or (v) have a receiver or trustee
appointed for it or for the whole or any substantial part of its property;
(e) The occurrence and continuance of a Change of Control;
(f) The occurrence and continuance of any event of default under the
Senior Loan Document resulting in the acceleration of the Senior Debt; and
(g) The occurrence and continuance of any event of default under the
Refunding Loan Agreement or the Refunding Trust Indenture dated as of
July 1, 1996 between the Issuer and The Bank of New York, as Trustee.
28
Notwithstanding the foregoing, if, by reason of Force Majeure, the Company
is unable to perform or observe any agreement, term or condition hereof (other
than any under Sections 7.1(a), (b) or (d) or otherwise with respect to the
payment of money, as to which Force Majeure shall not be applicable) which would
give rise to an Event of Default under subsection (c) hereof, the Company shall
not be deemed in default during the continuance of such inability. However, the
Company shall promptly give notice to the Trustee and the Issuer of the
existence of an event of Force Majeure and shall use its best efforts to remove
the effects thereof; provided that the settlement of strikes or other industrial
disturbances shall be entirely within its discretion.
The term Force Majeure shall mean, without limitation, the following:
(i) 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 of America or of the State or any of
their departments, agencies, political subdivisions or officials, or
any civil or military authority; insurrections; civil disturbances;
riots; epidemics; landslides; lightning; earthquakes; fires;
hurricanes; tornadoes; storms; droughts; floods; arrests; restraint of
government and people; explosions; breakage, malfunction or accident
to facilities, machinery, transmission pipes or canals; partial or
entire failure of utilities; shortages of labor, materials, supplies
or transportation; or
(ii) any cause, circumstance or event not reasonably within the
control of the Company.
The declaration of an Event of Default under subsection (d) above, and the
exercise of remedies upon any such declaration, shall be subject to any
applicable limitations of federal bankruptcy law affecting or precluding that
declaration or exercise during the pendency of or immediately following any
bankruptcy, liquidation or reorganization proceedings.
Section 7.2. REMEDIES ON DEFAULT. Whenever an Event of Default shall have
happened and be subsisting, any one or more of the following remedial steps may
be taken:
(a) If acceleration of the principal amount of the Series 1996 Bonds has
been declared pursuant to Section 7.03 of the Indenture, the Trustee shall
declare all Loan Payments to be immediately due and payable, whereupon the
same shall become immediately due and payable;
(b) The Issuer or the Trustee may have access to, inspect, examine and
make copies of the books, records, accounts and financial data of the
Company pertaining to the Project; or
29
(c) The Issuer or the Trustee may pursue all remedies now or hereafter
existing at law or in equity to collect all amounts then due and thereafter
to become due under this Agreement or the Series 1996 Note or to enforce
the performance and observance of any other obligation or agreement of the
Company under those instruments.
Notwithstanding the foregoing, the Issuer shall not be obligated to take any
step which in its opinion will or might cause it to expend time or money or
otherwise incur liability unless and until a satisfactory indemnity bond has
been furnished to the Issuer at no cost or expense to the Issuer. Any amounts
collected as Loan Payments or applicable to Loan Payments and any other amounts
which would be applicable to payment of Bond Service Charges collected pursuant
to action taken under this Section shall be paid into the Bond Fund and applied
in accordance with the provisions of the Indenture or, if the outstanding Bonds
have been paid and discharged in accordance with the provisions of the
Indenture, shall be paid as provided in Section 5.06 of the Indenture for
transfers of remaining amounts in the Bond Fund.
If an Event of Default under Section 7.1(d) hereof shall occur and be
continuing, 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 owing and unpaid pursuant to this Agreement, irrespective of whether the
principal of the Bonds or any amount hereunder shall then be due and payable as
therein or herein expressed or by declaration or otherwise, and irrespective of
whether the Trustee shall have made any demand pursuant to the provisions of
this Section 7.2 or of Section 6.02 of the Indenture, 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; and any receiver, assignee or trustee in bankruptcy
or reorganization is hereby authorized to make such payments to the Trustee, and
to pay to the Trustee any amount due it for compensation and expenses, including
reasonable counsel fees and disbursements incurred by it up to the date of such
distribution.
The provisions of this Section are subject to the further limitation that
the rescission by the Trustee of its declaration that all of the Series 1996
Bonds are immediately due and payable also shall constitute an annulment of any
corresponding declaration made pursuant to paragraph (a) of this Section and a
waiver and rescission of the consequences of that declaration and of the Event
of Default with respect to which that declaration has been made, provided that
no such waiver or rescission shall extend to or affect any subsequent or other
default or impair any right consequent thereon.
Section 7.3. NO REMEDY EXCLUSIVE. No remedy conferred upon or reserved to
the Issuer or the Trustee by this Agreement is intended to be exclusive of any
other available remedy or remedies, but each and every such remedy shall be
cumulative and shall be in addition to every other remedy given under this
Agreement or the Series 1996 Note, or now or hereafter existing at law, in
equity or by statute. No delay or omission to exercise any right or power
accruing
30
upon any default shall impair that right or power or shall be construed to be a
waiver thereof, but any such right and power may be exercised from time to time
and as often as may be deemed expedient. In order to entitle the Issuer or the
Trustee to exercise any remedy reserved to it in this Article, it shall not be
necessary to give any notice, other than any notice required by law or for which
express provision is made herein.
Section 7.4. AGREEMENT TO PAY ATTORNEYS' FEES AND EXPENSES. If an Event
of Default should occur and the Issuer or the Trustee should incur expenses,
including, without limitation, attorneys' fees and expenses, in connection with
the enforcement of this Agreement, the Series 1996 Note or the Indenture or the
collection of sums due thereunder, the Company shall reimburse the Issuer and
the Trustee, as applicable, for such expenses so incurred upon demand, together
with interest thereon from the date of demand for payment at the Interest Rate
for Advances, to the date of payment thereof.
Section 7.5. NO WAIVER. No failure by the Issuer or the Trustee to insist
upon the strict performance by the Company of any provision hereof shall
constitute a waiver of their right to strict performance and no express waiver
shall be deemed to apply to any other existing or subsequent right to remedy the
failure by the Company to observe or comply with any provision hereof.
Section 7.6. NOTICE OF DEFAULT. The Company shall notify the Trustee in
writing immediately if it becomes aware of the occurrence of any Event of
Default hereunder of any fact, condition or event which, with the giving of
notice or passage of time or both, would become an Event of Default.
(End of Article VII)
31
ARTICLE VIII
MISCELLANEOUS
Section 8.1. TERM OF AGREEMENT. This Agreement shall be and remain in
full force and effect from the date of delivery of the Series 1996 Bonds to the
Original Purchaser until such time as all of the Bonds shall have been fully
paid (or provision made for such payment) pursuant to Article IX of the
Indenture and all other sums payable by the Company under this Agreement and the
Series 1996 Note shall have been paid, except for obligations of the Company
under Sections 3.5, 4.2 and 5.3 hereof, which shall survive any termination of
this Agreement.
Section 8.2. AMOUNTS REMAINING IN FUNDS. Any amounts in the Bond Fund
remaining unclaimed by the Owners of Bonds for two years after the due date
thereof (whether at stated maturity, by redemption or pursuant to any mandatory
sinking fund requirements or otherwise), at the option of the Company, shall be
deemed to belong to and shall be paid, at the written request of the Company, to
the Company by the Trustee as overpayment of Loan Payments. With respect to
that principal of and interest and any premium on the Bonds to be paid from
moneys paid to the Company pursuant to the preceding sentence, the Owners of the
Bonds entitled to those moneys shall look solely to the Company for the payment
of those moneys (which shall remain unconditionally obligated to make such
payments). Further, any amounts remaining in the Bond Fund, the Rebate Fund and
any other special funds or accounts created under this Agreement or the
Indenture after all of the outstanding Bonds shall be deemed to have been paid
and discharged under the provisions of the Indenture and all other amounts
required to be paid under this Agreement, the Notes and the Indenture have been
paid, shall be paid to the Company to the extent that those moneys are in excess
of the amounts necessary to effect the payment and discharge of the outstanding
Bonds, provided that, with respect to any moneys remaining in any of the
accounts in the Rebate Fund, such moneys shall not be paid to the Company until
after the Trustee has made the final payment from that account to the United
States in accordance with Section 5.08 of the Indenture and Section 148 of the
Code.
Section 8.3. NOTICES. All notices, certificates, requests or other
communications hereunder shall be in writing and shall be deemed to be
sufficiently given when mailed by first class mail, postage prepaid, and
addressed to the appropriate Notice Address. A duplicate copy of each notice,
certificate, request or other communication given hereunder to the Issuer, the
Company and the Trustee shall also be given to the others. The Company, the
Issuer and the Trustee, by notice given hereunder, may designate any further or
different addresses to which subsequent notices, certificates, requests or other
communications shall be sent.
Section 8.4. EXTENT OF COVENANTS OF THE ISSUER; NO PERSONAL LIABILITY.
All covenants, obligations and agreements of the Issuer contained in this
Agreement or the Indenture shall be effective to the extent authorized and
permitted by applicable law. No such covenant, obligation or agreement shall be
deemed to be a covenant, obligation or agreement of any present or future
member, trustee, officer, agent or employee of the Issuer in other than his
official capacity, and
32
neither the members of the Issuer nor any official executing the Bonds shall be
liable personally on the Bonds 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.
Section 8.5. BINDING EFFECT. This Agreement shall inure to the benefit of
and shall be binding in accordance with its terms upon the Issuer, the Company
and their respective permitted successors and assigns provided that this
Agreement may not be assigned by the Company (except pursuant to Sections 4.7,
5.2 and 5.5 hereof) and may not be assigned by the Issuer except to the Trustee
pursuant to the Indenture or as otherwise may be necessary to enforce or secure
payment of Bond Service Charges. This Agreement may be enforced only by the
parties, their assignees and others who may, by law, stand in their respective
places.
Section 8.6. AMENDMENTS AND SUPPLEMENTS. Except as otherwise expressly
provided in this Agreement or the Indenture, subsequent to the issuance of the
Series 1996 Bonds and prior to all conditions provided for in the Indenture for
release of the Indenture having been met, this Agreement may not be effectively
amended, changed, modified, altered or terminated except in accordance with the
provisions of Article XI of the Indenture, as applicable.
Section 8.7. EXECUTION COUNTERPARTS. This Agreement may be executed in
any number of counterparts, each of which shall be regarded as an original and
all of which shall constitute but one and the same instrument.
Section 8.8. SEVERABILITY. If any provision of this Agreement, or any
covenant, obligation or agreement contained herein is determined by a court to
be invalid or unenforceable, that determination shall not affect any other
provision, covenant, obligation or agreement, each of which shall be construed
and enforced as if the invalid or unenforceable portion were not contained
herein. That invalidity or unenforceability shall not affect any valid and
enforceable application thereof, and each such provision, covenant, obligation
or agreement shall be deemed to be effective, operative, made, entered into or
taken in the manner and to the full extent permitted by law.
Section 8.9. GOVERNING LAW. This Agreement shall be deemed to be a
contract made under the laws of the State and for all purposes shall be governed
by and construed in accordance with the laws of the State.
Section 8.10. FURTHER ASSURANCES AND CORRECTIVE INSTRUMENTS. The Issuer
and the Company agree that they will, from time to time, execute, acknowledge
and deliver, or cause to be executed, acknowledged and delivered, such
supplements hereto and such further instruments as may reasonably be required
for carrying out the expressed intention of this Agreement.
Section 8.11. ISSUER AND COMPANY REPRESENTATIVE. Whenever under the
provisions of this Agreement the approval of the Issuer or the Company is
required or the Issuer or the Company is required to take some action at the
request of the other, such approval or such
33
request shall be given for the Issuer by an Authorized Issuer Representative, as
defined in a Resolution of the Issuer relating to the Series 1996 Bonds, and for
the Company by an Authorized Company Representative. The Trustee shall be
authorized to act on any such approval or request.
Section 8.12. MATTERS TO BE CONSIDERED BY THE ISSUER. In approving,
concurring in or consenting to action or in exercising any discretion or in
making any determination under this Agreement or the Indenture, the Issuer may
consider the interests of the public, which shall include the anticipated effect
as well as the interests of the Company and the Issuer; provided, however,
nothing shall be construed as conferring on any person other than the Trustee
and the Owners any right to notice, hearing or participation in the Issuer's
consideration, and nothing in this Section shall be construed as conferring on
any of them any right additional to those conferred elsewhere. Subject to the
foregoing, the Issuer will not unreasonably withhold any approval or consent to
be given by it hereunder.
(End of Article VIII)
34
IN WITNESS WHEREOF, the Issuer and the Company have caused this Agreement
to be duly executed in their respective names, all as of the date hereinbefore
written.
BUSINESS FINANCE AUTHORITY OF THE STATE OF
NEW HAMPSHIRE
By: /s/ Xxxx Xxxxxxx
-------------------------------------
Executive Director
CROWN PAPER CO.
By: /s/ Xxxxxxxxxxx X. XxXxxx
-------------------------------------
Name: Xxxxxxxxxxx X. XxXxxx
Title: Senior Vice President
35
EXHIBIT A
FORM OF NOTE
This Promissory Note has not been registered under the Securities Act of
1933. Its transferability is restricted by the Trust Indenture and the Loan
Agreement referred to herein.
CROWN PAPER CO.
SERIES 1996 NOTE
Crown Paper Co. (the "Company"), a Virginia corporation, for value
received, promises to pay to The Bank of New York, as Trustee (the "Trustee")
under the Indenture hereinafter referred to, the principal sum of
TWELVE MILLION THREE HUNDRED THOUSAND DOLLARS ($12,300,000)
and to pay interest on the unpaid balance of such principal sum from and
after July 18, 1996 at the Applicable Rate until the payment of such
principal sum has been made or provided for. As used herein, "Applicable
Rate" means seven and seven-eights percent (7.875%) per annum. Interest
shall be calculated on the basis of a 360-day year, consisting of twelve
30-day months.
This Series 1996 Note has been executed and delivered by the Company to the
Trustee pursuant to a certain Loan Agreement (the "Agreement") of even date
herewith, between the Business Finance Authority of the State of New Hampshire
(the "Issuer") and the Company. Under the Agreement, the Issuer has applied the
proceeds received from the sale of the Issuer's $12,300,000 aggregate principal
amount of Sewage and Solid Waste Disposal Revenue Bonds (Crown Paper Co.
Project), Series 1996, and the Company has agreed to make Loan Payments at the
times and in the amounts set forth in the Agreement and in this Series 1996 Note
for application to the payment of the principal of and interest on the Series
1996 Bonds as and when due. The Series 1996 Bonds have been issued,
concurrently with the execution and delivery of this Series 1996 Note, pursuant
to, and are secured by, the Trust Indenture (the "Indenture"), dated as of July
1, 1996, between the Issuer and the Trustee.
The Series 1996 Bonds bear interest from their date at the Applicable Rate
payable on January 1 and July 1 of each year, commencing on July 1, 1997 (each,
an "Interest Payment Date"), and the Series 1996 Bonds mature on July 1, 2026.
To provide funds to pay the principal of and interest on the Series 1996
Bonds as and when due as above-specified, the Company hereby agrees to and shall
make as Loan Payments in immediately available funds on or before each date that
any principal or interest on any Series
A-1
1996 Bond is due (at maturity, upon redemption, by acceleration or otherwise) an
amount equal to the amount payable as principal and interest, on the Series 1996
Bonds on such date.
If payment or provision for payment in accordance with the Indenture is
made in respect of the principal of and interest on all or any portion of the
Bonds from moneys other than payments on the Series 1996 Note from the Company,
this Series 1996 Note shall be deemed paid to the extent such payments or
provision for payment of Series 1996 Bonds has been made. If the Series 1996
Bonds are thereby deemed paid in full, this Series 1996 Note shall be cancelled
and returned to the Company. The Company shall receive a credit against its
obligation to make payments hereunder to the extent of moneys available in the
Bond Fund, created by the Indenture, for payment of principal and interest on
the Series 1996 Bonds, as provided in the Agreement. In any event, however, if
on any date that any payment of principal or interest on any Series 1996 Bond is
due (at maturity, upon redemption, by acceleration or otherwise), the balance in
the Bond Fund (which is available therefor) is for any reason insufficient to
make required payments of Bond Service Charges, as and when due, the Company
forthwith shall pay to the Trustee, in immediately available funds, for the
account of the Issuer and for deposit into the Bond Fund, any deficiency. If
the Series 1996 Bonds are thereby deemed paid in full, this Series 1996 Note
shall be cancelled and returned to the Company. Subject to the foregoing, all
payments on the Series 1996 Note from the Company shall be in the full amount
required hereunder.
All Loan Payments shall be payable in lawful money of the United States of
America and shall be made to the Trustee at its principal corporate trust office
in New York, New York, for the account of the Issuer and deposited in the Bond
Fund created by the Indenture. Except as otherwise provided in the Indenture,
such Loan Payments shall be used by the Trustee to pay the principal of and
interest on the Series 1996 Bonds as and when due.
The obligation of the Company to make the payments required hereunder shall
be absolute and unconditional under any and all circumstances whatsoever and the
Company shall make such payments without abatement, diminution or deduction
regardless of any cause or circumstances whatsoever including, without
limitation, any defense, set-off, recoupment or counterclaim which the Company
may have or assert against the Issuer, the Trustee or any other person.
This Note is subject to optional and mandatory prepayment prior to stated
maturity pursuant to the obligation of the Company to give the Issuer and the
Trustee sufficient notice of such prepayment as shall enable the Issuer and the
Trustee to take all action necessary under the Indenture to redeem on the date
specified for prepayment a like principal amount of Series 1996 Bonds at the
same redemption price.
Whenever an Event of Default under Section 7.01 of the Indenture (other
than an Event of Default as defined in Section 7.01(c) thereof) shall have
occurred and, as a result thereof, the principal of all Series 1996 Bonds then
outstanding, and interest accrued thereon, shall have been declared to be
immediately due and payable pursuant to Section 7.02 of the Indenture, the
unpaid
A-2
principal amount of and accrued interest on this Series 1996 Note shall also be
due and payable on the date on which the principal of and interest on the Series
1996 Bonds shall have been declared due and payable; provided that the annulment
of a declaration of acceleration with respect to the Series 1996 Bonds shall
also constitute an annulment of any corresponding acceleration with respect to
this Series 1996 Note.
If an Event of Default should occur and the Issuer or the Trustee should
incur expenses, including attorneys' fees and expenses, in connection with the
enforcement of this Series 1996 Note, the Agreement or the Indenture or the
collection of sums due thereunder, the Company shall reimburse the Issuer or the
Trustee, as applicable, for reasonable expenses so incurred upon demand,
together with interest thereon from the date of demand for payment at the
Interest Rate for Advances, to the date of payment thereof.
IN WITNESS WHEREOF, the Company has caused this Series 1996 Note to be
executed in its name by a duly authorized officer as of July 18, 1996.
CROWN PAPER CO.
By: /s/ Xxxxxxxxxxx X. XxXxxx
-------------------------------------
Title: Senior Vice President
A-3
EXHIBIT B
PROJECT FACILITIES
The Project Facilities to be financed with the proceeds of the Series 1996
Bonds consists of sewage facilities and solid waste disposal facilities to be
installed at Crown Paper Company's Xxxxxx-Xxxxxx, New Hampshire Mill, including
the following:
A. SOLID WASTE DISPOSAL FACILITIES:
1. Closure of Mt. Carbury Landfill cells;
2. Closure of Xxxxxx Yard Landfill;
3. Installation of Soap Skimmer/Soap Removal System;
4. Construction of new cells at Mt. Carbury Landfill;
5. Improvements to Lime Mud/Caustic Area processing;
B. SEWAGE FACILITIES
6. NCG Collection System;
7. Improvements to Xxxxxxx Waste Water Treatment Plant System, including
replacements of effluent pipes, pumps, aerators, clarifiers and
control systems;
8. Miscellaneous small projects for replacements within, or improvements
to, the Xxxxxxx Waste Water Treatment Plant.
C. Together with facilities incidental to the foregoing, including any
necessary grading, site preparation and excavation, electrical and overhead, and
any other machinery and equipment necessary and desirable in connection with the
operation of the Project, together with any replacement thereof and
substitutions therefor.
B-1
EXHIBIT C
FORM OF REQUISITION
Requisition No. _________
REQUISITION FOR PAYMENT FROM THE PROJECT FUND
To: The Bank of New York, as Trustee under the Trust Indenture dated as of
July 1, 1996 (the "Indenture") between the Business Finance Authority of
the State of New Hampshire, (the "Issuer") and the Trustee.
Pursuant to Section 5.02 of the Indenture and Section 3.2 of the Loan
Agreement dated as of July 1, 1996 (the "Agreement") between the Issuer and the
undersigned, Crown Paper Co. (the "Company"), you are hereby authorized and
directed to make payments or reimbursements from the Project Fund in the
amount(s) and to the payee(s) set forth on Schedule A hereto. Terms defined in
the Agreement and Indenture have the same meanings when used herein.
C-1
In connection with this Requisition, the undersigned hereby certifies that
(i) after giving effect to the payment of this Requisition, the use of all
moneys disbursed from the Project Fund complies, to the best knowledge of the
Authorized Company Representative, with the limitations contained in the
Borrowers' Federal Tax Statement; (ii) the foregoing payments or reimbursements
are of Project costs described in Section 3.2 of the Agreement and the
obligations have not been the basis for a prior requisition which has been paid;
(iii) except for deposits or progress payments on account of equipment or other
property on order and designated as such in this Requisition, all machinery,
equipment and personal property included in this Requisition have been delivered
to the Project site and accepted by the Company and upon payment of this
Requisition, the Company will have good title thereto; (iv) to the best
knowledge of the Authorized Company Representative, no Event of Default and no
event or condition which, after notice or lapse of time or both, would become an
Event of Default under the Agreement or the Indenture exists and the
representations and warranties of the Company contained in the Agreement are
true and correct as of the date hereof (except to the extent such
representations and warranties relate solely to an earlier date); (v) the
payment or reimbursement requested by this Requisition is due for work actually
performed or materials or property actually supplied prior to the date of the
requisition; (vi) to the best knowledge of the Authorized Company
Representative, all amounts previously requisitioned and disbursed from the
Project Fund for payment of subcontractors and suppliers of materials and labor
have been so applied; (vii) the payment or reimbursement requested by this
Requisition does not include any portion of a contract price entitled to be
retained by the Company; and (viii) all work and all materials, equipment or
other property included in this Requisition have been performed or supplied in
accordance with the Project specifications described in Section 3.3 of the
Agreement.
Dated: CROWN PAPER CO.
By
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Authorized Company Representative
C-2
SCHEDULE A TO REQUISITION NO.
Name and Address
of Person to Whom Nature of Goods
Amount of Payment Payment or or Other Property
or Reimbursement Due Reimbursement is Due or Services Received
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