1
EXHIBIT 10.8
LOAN AGREEMENT
THIS LOAN AGREEMENT made and entered into as of March 1, 1995, by and
between the Iowa Finance Authority (the "Issuer"), a public instrumentality and
agency duly organized and existing under the laws of the State of Iowa (the
"State") , and Xxxxx Bedding Company (the "Company"), a North Carolina
corporation;
W I T N E S S E T H:
WHEREAS, the Issuer is authorized and empowered by the provisions of
Chapter 16 of the Code of Iowa (1995), as amended (the "Act"), to issue and sell
its revenue bonds for the purpose of financing in whole or in part the cost of a
"project" (as defined in Section 16.102 of the Act) for the purpose of assisting
economic development and expansion of business, industry and farming in the
State; and
WHEREAS, pursuant to and in accordance with the provisions of the Act and
pursuant to the terms of an Indenture of Trust (the "'Indenture") dated as of
March 1, 1995 between the Issuer and First-Citizens Bank & Trust Company, as
trustee, the Issuer has authorized and undertaken to issue its Tax-Exempt
Adjustable Mode Industrial Development Revenue Bonds (Xxxxx Bedding Company
Project) Series 1995 (the "Bonds"); and
WHEREAS, the Issuer has undertaken to sell the Bonds and to loan the
proceeds from the sale of the Bonds to the Company so as to enable the Company
to acquire, construct, improve and equip a mattress manufacturing facility
located in Clear Lake, Iowa and the Company has agreed to make payments
sufficient to pay the principal of and premium, if any, and interest on the
Bonds and related expenses all of more fully described in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the parties hereto covenant, agree and bind themselves as
follows;
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.1. Definitions. In addition to the words and terms elsewhere
defined in this Agreement, the following words and terms as used herein shall
have the following meanings unless the context or use clearly indicates another
or different meaning or intent, and any other words and terms defined in the
Indenture shall have the same meanings when used herein as assigned in the
Indenture unless the context or use clearly indicates another or different
meaning or intent:
"Acquisition", when used with reference to the Project, means
acquisition, construction, installation and equipping.
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"Agreement" shall mean this Loan Agreement between the Issuer and the
Company and any modifications, alterations and supplements hereto made in
accordance with the provisions hereof and of the Indenture.
"Bond Documents" means, collectively, the Bonds, this Agreement, the
Indenture, the Credit Facility, the Credit Agreement, the Placement Agreement,
the Remarketing Agreement and the Private Placement Memorandum.
"Bond Proceeds" means the principal of the Bonds and any investment
earnings thereon while on deposit in the Initial Fund.
"Company Representative" means any one of the persons at the time
designated to act on behalf of the Company by written certificate furnished to
the Issuer and the Trustee containing the specimen signatures of such persons
and signed on behalf of the Company by the President or any Vice President of
the Company.
"Completion Date" means, with respect to the Project, the date on which
the Company Representative delivers a completion certificate to the Trustee
pursuant to Section 3.3.
"Cost(s) of the Project", "Cost" or "Costs" means all costs and
allowances which the Issuer or the Company may properly pay or accrue for the
Project and which, under generally accepted accounting principles, are
chargeable to the capital account of the Project or could be so charged either
with a proper election to capitalize such costs or, but for a proper election,
to expense such costs, including (without limitation) the following costs:
(a) fees and expenses incurred in preparing the plans and specifications
for the Project (including any preliminary study or planning or any aspect
thereof); any labor, services, materials and supplies used or furnished in site
improvement and construction; any equipment for the Project; and any acquisition
necessary to provide utility services or other services, including trackage to
provide the Project with public transportation facilities, roadways, parking
lots, water supply, sewage and waste disposal facilities; and all real and
tangible personal property deemed necessary by the Company and acquired in
connection with the Project;
(b) fees for architectural, engineering, supervisory and consulting
services;
(c) any fees and expenses incurred in connection with perfecting and
protecting title to the Project and any fees and expenses incurred in connection
with preparing, recording or filing such documents, instruments or financing
statements as either the Company or the Issuer may deem desirable to perfect or
protect the rights of the Issuer or the Trustee under the Bond Documents;
(d) any legal, accounting or financing advisory fees and expenses,
including, without limitation, fees and expenses of Bond Counsel and counsel to
the Issuer, the Company, the Credit Issuer, the Placement Agent, the Remarketing
Agent or the Trustee, any fees and expenses of the Issuer, Trustee, Remarketing
Agent, Placement Agent, Credit Issuer, Tender Agent, Paying Agent or any rating
agency, filing fees, and printing and engraving costs, incurred in connection
with the
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authorization, issuance, sale and purchase of the Bonds, and the preparation of
the Bond Documents and all other documents in connection with the authorization,
issuance and sale of the Bonds;
(e) interest to accrue on the Bonds during construction of the Project;
(f) any administrative or other fees charged by the Issuer or
reimbursement thereto of expenses in connection with the Project until the
Completion Date; and
(g) any other costs and expenses relating to the Project which could
constitute costs or expenses for which the Issuer may expend Bond proceeds under
the Act.
"Eminent Domain" means the taking of title to, or the temporary use of,
the Project or any part thereof pursuant to eminent domain or condemnation
proceedings, or by any settlement or compromise of such proceedings, or any
voluntary conveyance of the Project or any part thereof during the pendency of,
or as a result of a threat of, such proceedings.
"Event of Default" shall have the meaning set forth in Section 10.1.
"Governing Body" means the board, commission, council or other body in
which the general legislative powers of the Issuer are vested.
"Issuer Representative" means any one of the persons at the time
designated to act on behalf of the Issuer by written certificate furnished to
the Company and the Trustee containing the specimen signatures of such persons
and signed on behalf of the Issuer by its Chairman or Vice Chairman and its
Secretary.
"Net Proceeds", when used with respect to any proceeds of insurance or
proceeds resulting from Eminent Domain, means the gross proceeds therefrom less
all expenses (including attorneys, fees) incurred in realization thereof.
"Plans and Specifications" shall mean the plans and specifications used
in the Acquisition of the Project, as the same may be revised from time to time
by the Company in accordance with Section 3.8.
"Private Placement Memorandum" means the Preliminary Private Placement
Memorandum and the final Private Placement Memorandum prepared and used in
connection with the initial placement of the Bonds on the Issue Date.
"Project" means, collectively, the property described in Exhibit A
hereto, as the same may at any time exist.
"Remarketing Agreement" means the Remarketing and Interest Services
Agreement, dated as of March 1, 1995, between the Company and the Remarketing
Agent.
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"Tax Regulations" means the applicable treasury regulations promulgated
under the Code or under Section 103 of the Internal Revenue Code of 1954, as
amended, whether at the time proposed, temporary, final or otherwise.
Section 1.2. Rules of Construction. Unless the context clearly indicates
to the contrary, the following rules shall apply to the construction of this
Agreement:
(a) Capitalized terms used but not defined in this Agreement shall have
the meaning ascribed to them in the Indenture.
(b) Words importing the singular number shall include the plural number
and vice versa.
(c) The table of contents, captions and headings herein are solely for
convenience of reference only and shall not constitute a part of this Agreement
nor shall they affect its meaning, construction or effect.
(d) of the masculine gender shall be deemed and construed to include
correlative words of the feminine and neuter genders, and words of the neuter
gender shall be deemed and construed to include correlative words of the
masculine and feminine genders.
(e) references in this Agreement to particular Articles or Sections are
references to Articles and Sections of this Agreement, unless otherwise
indicated.
ARTICLE II
REPRESENTATIONS
Section 2.1. Representations by the Issuer. The Issuer represents and
warrants as follows:
(a) The Issuer is a public instrumentality and agency of the State and is
authorized by the Act to execute and to enter into this Agreement and to
undertake the transactions contemplated herein and to carry out its obligations
hereunder.
(b) The Issuer has all requisite power, authority and legal right to
execute and deliver the Bond Documents to which it is a party and all other
instruments and documents to be executed and delivered by the Issuer pursuant
thereto, to perform and observe the provisions thereof and to carry out the
transactions contemplated by the Bond Documents. All corporate action on the
part of the Issuer which is required for the execution, delivery, performance
and observance by the Issuer of the Bond Documents has been duly authorized and
effectively taken, and such execution, delivery, performance and observation by
the Issuer do not contravene applicable law or any contractual restriction
binding on or affecting the Issuer.
(c) The Issuer has duly approved the issuance of the Bonds and the loan
of the proceeds thereof to the Company for the Acquisition of the Project; no
other authorization or approval or other
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action by, and no notice to or filing with, any governmental authority or
regulatory body is required as a condition to the performance by the Issuer of
its obligations under any Bond Documents.
(d) This Agreement is, and each other Bond Document to which the Issuer
is a party when delivered will be, legal valid and binding special obligations
of the Issuer enforceable against the Issuer in accordance with its terms.
(e) There is no default of the Issuer in the payment of the principal of
or interest on any of its indebtedness for borrowed money or under any
instrument or instruments or agreements under and subject to which any
indebtedness for borrowed money has been incurred which does or could affect the
validity and enforceability of the Bond Documents or the ability of the Issuer
to perform its obligations thereunder, and no event has occurred and is
continuing under the provisions of any such instrument or agreement which
constitutes or, with the lapse of time or the giving of notice, or both, would
constitute such a default.
(f) With respect to the Bonds, there are no other obligations of the
Issuer that have been, are being or will be sold (i) at substantially the same
time, (ii) under a common plan of marketing, and (iii) at substantially the same
rate of interest.
(g) There is pending or, to the knowledge of the undersigned officers of
the Issuer, threatened no action or proceeding before any court, governmental
agency or arbitrator to restrain or enjoin the issuance or delivery of the Bonds
or the collection of any revenues pledged under the Indenture, (ii) in any way
contesting or affecting the authority for the issuance of the Bonds or the
validity of any of the Bond Documents, or (iii) in any way contesting the
existence or powers of the Issuer.
(h) In connection with the authorization, issuance and sale of the Bonds,
the Issuer has complied with all provisions of the Constitution and laws of the
State, including the Act.
(i) The Issuer has not assigned or pledged and will not assign or pledge
its interest in this Agreement for any purpose other than to secure the Bonds
under the Indenture. The Bonds constitute the only bonds or other obligations of
the Issuer in any manner payable from the revenues to be derived from this
Agreement, and except for the Bonds, no bonds or other obligations have been or
will be issued on the basis of this Agreement.
(j) The Issuer is not in default under any of the provisions of the laws
of the State, where any such default would affect the issuance, validity or
enforceability of the Bonds or the transactions contemplated by this Agreement
or the Indenture.
Section 2.2. Representations by the Company. The Company represents and
warrants as follows:
(a) The Company is a corporation duly incorporated, validly existing and
in good standing under the laws of the state of North Carolina, is in good
standing under the laws of the State, and has corporate and other legal power
and authority to enter into and to perform the
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agreements and covenants on its part contained in the Bond Documents to which it
is a party, and has duly authorized the execution, delivery and performance of
the Bond Documents to which it is a party and has duly approved the Bond
Documents.
(b) The execution and delivery of the Bond Documents to which it is a
party, consummation of the transactions contemplated hereby and thereby and by
the Bond Documents to which it is not a party, and the fulfillment of or
compliance with the terms and conditions hereof and thereof will not conflict
with or constitute a breach of or a default under the Company's articles of
incorporation or bylaws or any agreement or instrument to which the Company is a
party or any existing law, administrative regulation, court order or consent
decree to which the Company is subject, or by which it or any of its property is
bound.
(c) There is no action, suit, proceeding, inquiry or investigation, at
law or in equity, before or by any court, public board or body, pending or
threatened against or affecting the Company or any of its officers, nor to the
best knowledge of the Company is there any basis therefor, wherein an
unfavorable decision, ruling or finding would materially adversely affect the
transactions contemplated by this Agreement or that would adversely affect in
any way, the validity or enforceability of any of the Bond Documents or any
other agreement or instrument to which the Company is a party and that is to be
used or contemplated for use in the consummation of the transactions
contemplated hereby.
(d) No further authorizations, consents or approvals of governmental
bodies or agencies are required in connection with the execution and delivery by
the Company of this Agreement or the other Bond Documents to which the Company
is a party or in connection with the carrying out by the Company of its
obligations under this Agreement or the other Bond Documents to which the
Company is a party.
(e) The financing of the Project as provided under this Agreement, and
commitments therefor made by the Issuer have induced the Company to expand or
locate its operations in the jurisdiction of the Issuer.
(f) The Company anticipates that upon completion of the Acquisition of
the Project, the Company will operate the Project as a "project" within the
meaning of the Act until the Bonds have been paid in full.
(g) The Project is of the type authorized and permitted by the Act, and
the Project is substantially the same in all material respects to that described
in the notice of public hearing published in The Globe Gazette (Mason City,
Iowa) on November 28, 1994 and The Des Moines Register on December 1, 1994.
(h) The Project will be acquired, constructed and installed and will be
operated by the Company in such manner as to conform with all applicable zoning,
planning, building, environmental and other regulations of the governmental
authorities having jurisdiction over the Project.
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(i) The Company will cause all of the proceeds of the Bonds to be applied
solely to the payment of Costs of the Project.
(j) The Company has taken no action, and has not omitted to take any
action, which action or omission to take action would in any way affect or
impair the excludability of interest on the Bonds from gross income of the
Holders thereof for federal income tax purposes.
(k) The Company presently in good faith estimates the Cost of the Project
to equal or exceed the original principal amount of the Bonds.
(l) The Project will be located wholly within Cerro Gordo County, Iowa.
(m) The representations and warranties contained in Exhibit C and made a
part hereof are true and complete.
ARTICLE III
ACQUISITION OF THE PROJECT
Section 3.1. Agreement to Undertake and Complete the Project. The Company
covenants and agrees to undertake and complete the Acquisition of the Project.
Upon written request of the Issuer or the Trustee, the Company agrees to make
available to the Issuer and the Trustee (for review and copying) all the then
current Plans and Specifications for the Project.
The Company agrees to cause the Project to be completed as soon as may be
practicable and to cause all proceeds of the Bonds, including investment
earnings, to be expended no later than three years from the Issue Date. For
Costs of the Project incurred prior to receipt by the Issuer of the proceeds of
the Bonds, the Company agrees to advance all funds necessary for such purpose.
Such advances may be reimbursed from the Initial Fund to the extent permitted by
Section 3.2.
The Company shall obtain or cause to be obtained all necessary permits
and approvals for the Acquisition, operation and maintenance of the Project.
Section 3.2. Disbursements from the Initial Fund. In the Indenture, the
Issuer has authorized and directed the Trustee to use the moneys in the Initial
Fund for payment or reimbursement to the Company of the Costs of the Project.
Each payment for a Cost of the Project shall be made only upon the
receipt by the Trustee and, upon written request therefor, the Issuer of a
requisition and certificate, substantially in the form attached hereto as
Exhibit B and signed by the Company Representative, certifying:
(a) the requisition and certificate number;
(b) the payee, which may be the Issuer or the Trustee for the payment of
the fees and expenses of the Issuer or the Trustee, as the case may be, and
which may be the Company in the case
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of (i) work performed by the Company's personnel, or (ii) payments advanced
by the Company for the Project;
(c) the amount to be paid;
(d) that the payment is due, is a proper charge against the Initial Fund,
and has not been the basis for any previous withdrawal from the Initial Fund;
(e) that all funds being requisitioned shall be used in compliance with
the Code and the Tax Regulations promulgated thereunder, and that substantially
all such funds shall be used for the acquisition, construction or installation
of property of a character subject to the allowance for depreciation as
prescribed by Section 144(a)(1)(A) of the Code and the Tax Regulations
promulgated thereunder. The Company agrees, however, that it will not request
any such disbursement which, if paid, would result in (i) less than
substantially all (at least ninety-five percent (95%)) of the proceeds of the
Bonds being used to provide land or property subject to the allowance for
depreciation under Section 167 of the Code, constituting the Project, (ii) less
than all of the proceeds of the Bonds being used to provide the Project under
the Act, or (iii) the inclusion of the interest on any of the Bonds in the gross
income of any Holder for purposes of federal income taxation (as long as such
Holder is not a "related person" or a "substantial user" of the Project as such
terms are used in Section 144 of the Code); and
(f) that no Event of Default, as defined in Section 10.1 of this
Agreement, has occurred which has not been waived and that the Company is not
aware of any then existing event or condition which, with the passage of time,
would constitute an Event of Default under Section 10.1.
Interest on the Bonds and all legal, consulting and issuance expenses
shall be set forth separately in any requisition and certificate requesting
payment therefor. Such requisitions and certificates shall be consecutively
numbered. Upon request, the Company shall furnish the Issuer or the Trustee with
copies of invoices or other appropriate documentation supporting payments or
reimbursements requested pursuant to this Section. The Issuer and the Trustee
may rely conclusively upon any statement made in any such requisition and
certificate.
Section 3.3. Establishment of Completion Date and Certificate of
Completion. The Completion Date shall be the date on which the Company
Representative signs and delivers to the Trustee a certificate stating that,
except for amounts retained by the Trustee for Costs of the Project not then due
and payable, or the liability for which the Company is, in good faith,
contesting or disputing, (a) the Project has been completed to the satisfaction
of the Company, and all labor, services, materials and supplies used in such
Acquisition have been paid for, and (b) the Project is suitable and sufficient
for the efficient operation as a "project" (as defined in the Act).
Notwithstanding the foregoing, such certificate may state that it is
given without prejudice to any rights against third parties which exist at the
date of such certificate or which may subsequently come into being.
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Section 3.4. Closeout of Initial Fund; Disposition of Balance in Initial
Fund. All moneys and any unliquidated investments remaining in the Initial Fund
on the Completion Date and after payment in full of the Costs of the Project
(except for costs not then due and payable for the payment of which the Trustee
shall have retained amounts as hereinafter provided) shall, as soon as
practicable after the Completion Date, and no later than ninety days thereafter,
at the direction of the Company, be delivered to the Trustee for deposit in the
Surplus Fund. The Trustee shall, at the direction of the Company Representative,
retain moneys in the initial Fund for payment of Costs of the Project not then
due and payable. Any balance of such retained funds remaining after full payment
of such Costs of the Project shall at the direction of the Company be delivered
to the Trustee for deposit in the Surplus Fund to be applied to the redemption
of Bonds in accordance with the terms of the Indenture.
Section 3.5. Company Required to Pay Costs in Event Initial Fund
Insufficient. If the moneys in the Initial Fund available for payment of the
Costs of the Project should not be sufficient to make such payments in full, the
Company agrees to pay directly (or to deposit moneys in the Initial Fund for the
payment of) such costs of completing the Project as may be in excess of the
moneys available therefor in the Initial Fund. THE ISSUER DOES NOT MAKE ANY
WARRANTY OR REPRESENTATION (EITHER EXPRESS OR IMPLIED) THAT THE MONEYS DEPOSITED
INTO THE INITIAL FUND AND AVAILABLE FOR PAYMENT OF THE COSTS OF THE PROJECT,
UNDER THE PROVISIONS OF THIS AGREEMENT, WILL BE SUFFICIENT TO PAY ALL OF THE
COSTS OF THE PROJECT. If, after exhausting the moneys in the Initial Fund for
any reason (including, without limitation, losses on investments made by the
Trustee under the Indenture), the Company pays, or deposits moneys in the
Initial Fund for the payment of, any portion of the Costs of the Project
pursuant to the provisions of this Section, the Company shall not be entitled to
any reimbursement therefor from the Issuer or from the Trustee, nor shall it be
entitled to any diminution of the amounts payable under Section 5.2.
Section 3.6. Company and Issuer Representatives and Successors. At or
prior to the initial sale of the Bonds, the Company and the Issuer shall appoint
a Company Representative and an Issuer Representative, respectively, for the
purpose of taking all actions and delivering all certificates required to be
taken and delivered by the Company Representative and the Issuer Representative
under the provisions of this Agreement. The Company and the Issuer,
respectively, may appoint alternate Company Representatives and alternate Issuer
Representatives to take any such action or make any such certificate if the same
is not taken or made by the Company Representative or the Issuer Representative.
In the event any of such persons, or any successor appointed pursuant to the
provisions of this Section, should resign or become unavailable or unable to
take any action or deliver any certificate provided for in this Agreement,
another Company Representative or alternate Company Representative, or another
Issuer Representative or alternate Issuer Representative, shall thereupon be
appointed by the Company or the Issuer, respectively. If the Company or the
Issuer fails to make such designation within ten (10) days following the date
when the then incumbent Company Representative or Issuer Representative resigns
or becomes unavailable or unable to take any such actions, the President or any
Vice President of the Company, or the Chairman, Vice Chairman or Executive
Director of the Issuer, shall serve as the Company Representative or the Issuer
Representative, respectively.
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Whenever the provisions of this Agreement require the Company's approval
or require the Issuer or the Trustee to take some action at the request or
direction of the Company, the Company Representative shall make, in writing,
such approval or such request or direction unless otherwise specified in this
Agreement. The Company shall have no complaint against the Issuer or the Trustee
as a result of any action so taken with the written approval of or at the
written direction of the Company Representative.
Section 3.7. Investment of Moneys in Funds. The Trustee may invest or
reinvest any moneys held pursuant to the Indenture to the extent permitted by
Section 4.7 of the Indenture and by law (but subject to the provisions of
Section 8.9(a) hereof), in Permitted Investments, as defined in the Indenture,
as directed by a Company Representative.
Any such securities may be purchased at the offering or market price
thereof at the time of such purchase.
The Trustee may make any and all such investments through its own bond
department or trust investments department. Any interest accruing on or profit
realized from the investment of any moneys held as part of the Initial Fund
shall be credited to the Initial Fund, and any loss resulting from such
investment shall be charged to the Initial Fund. Any interest accruing on or
profit realized from the investment of any moneys held as a part of the Bond
Fund shall be credited to the Bond Fund, and any loss resulting from such
investment shall be charged to the Bond Fund. Neither the Issuer nor the Trustee
shall be liable for any loss resulting from any such investments, provided the
Trustee has performed its respective obligations under Section 4.7 of the
Indenture in accordance with Section 7.1(b) of the Indenture. For the purposes
of this Section, any interest-bearing deposits, including certificates of
deposit, issued by or on deposit with the Trustee shall be deemed to be
investments and not deposits.
Section 3.8. Plans and Specifications. The Company shall maintain a set
of Plans and Specifications at the Project which shall be available to the
Issuer and the Trustee for inspection and examination during the Company's
regular business hours, and the Issuer, the Trustee and the Company agree that
the Company may supplement, amend and add to the Plans and Specifications, and
that the Company shall be authorized to omit or make substitutions for
components of the Project, without the approval of the Issuer and the Trustee,
provided that no such change shall be made which shall be contrary to any of the
covenants set forth in Section 2.2 hereof, including the representations and
warranties contained in Exhibit C hereto. If any such change would render
materially incorrect or inaccurate the description of the initial components of
the Project as set forth in Exhibit A to this Agreement, the Company shall
deliver to the Issuer and the Trustee an opinion of Bond Counsel to the effect
that such change will not cause the interest on the Bonds to be includable in
the gross income of the owners thereof for federal income tax purposes, and
thereafter, the Company and the Issuer shall amend such Exhibit A to reflect
such change. No approvals of the Issuer and the Trustee shall be required for
the Acquisition of the Project or for the solicitation, negotiation, award or
execution of contracts relating thereto.
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ARTICLE IV
ISSUANCE OF THE BONDS
Section 4.1. Agreement to Issue the Bonds. To provide funds for the
Acquisition of the Project, the Issuer agrees that it will sell, issue and
deliver the Bonds in the aggregate principal amount of $3,000,000 to the initial
purchasers thereof.
Section 4.2. No Third-Party Beneficiary. It is specifically agreed
between the parties executing this Agreement that it is not intended by any of
the provisions of any part of this Agreement to establish in favor of the public
or any member thereof, other than as expressly provided herein or as
contemplated in the Indenture, the rights of a third-party beneficiary
hereunder, or to authorize anyone not a party to this Agreement to maintain a
suit for personal injuries or property damage pursuant to the terms or
provisions of this Agreement. The duties, obligations and responsibilities of
the parties to this Agreement with respect to third parties shall remain as
imposed by law.
ARTICLE V
LOAN; PAYMENT PROVISIONS
Section 5.1. Loan of Proceeds. The Issuer agrees, upon the terms and
conditions contained in this Agreement and the Indenture, to lend to the Company
the proceeds received by the Issuer from the sale of the Bonds. The loan shall
be made by depositing the accrued interest, if any, from the initial sale of the
Bonds into the Bond Fund and the remainder of said proceeds in the Initial Fund
in accordance with Section 4.5 of the Indenture. Such proceeds shall be
disbursed to or on behalf of the Company as provided in Section 3.2.
Section 5.2. Amounts Payable. The Company hereby agrees to repay the loan
made pursuant to this Agreement by making the following payments:
(a) The Company shall pay to the Trustee in immediately available funds
for the account of the Issuer for deposit into the Bond Fund on or before any
Interest Payment Date for the Bonds or any other date that any payment of
interest, premium, if any, or principal is required to be made in respect of the
Bonds pursuant to the Indenture, until the principal of, premium, if any, and
interest on the Bonds shall have been fully paid or provision for the payment
thereof shall have been made in accordance with the Indenture, a sum which,
together with any Eligible Funds available for such payment in the Bond Fund,
will enable the Trustee to pay the amount payable on such date as principal of
(whether at maturity or upon redemption or acceleration or otherwise), premium,
if any, and interest on the Bonds as provided in the Indenture; provided,
however, that the obligation of the Company to make any payment hereunder shall
be deemed satisfied and discharged to the extent of the corresponding payment
made by the Credit Issuer under the Credit Facility.
It is understood and agreed that all payments payable by the Company
under this subsection (a) are assigned by the Issuer to the Trustee for the
benefit of the Holders. The Company assents to
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such assignment. The Issuer hereby directs the Company and the Company hereby
agrees to pay to the Trustee at the principal corporate trust office of the
Trustee all payments payable by the Company pursuant to this subsection (a).
(b) The Company will also pay the reasonable fees and expenses of the
Issuer, the Trustee, the Tender Agent, the Paying Agent, the Placement Agent,
the Remarketing Agent and the Registrar under the Indenture and all other
amounts which may be payable to the Trustee, Paying Agent, Registrar or the
Tender Agent under Section 7.2 of the Indenture, and the reasonable fees and
expenses of the Remarketing Agent, such fees and expenses to be paid when due
and payable by the Company directly to the Trustee, Tender Agent, Paying Agent,
Registrar and Remarketing Agent, respectively, for their own account.
(c) The Company will also pay when due and payable the reasonable fees
and expenses of the Issuer related to the issuance of the Bonds, including
without limitation, attorneys' fees and expenses.
(d) The Company covenants, for the benefit of the Holders, to pay or
cause to be paid, to the Paying Agent, such amounts as shall be necessary to
enable the Paying Agent to pay the Purchase Price of Bonds delivered to the
Tender Agent or the Remarketing Agent, as the case may be, for purchase, all as
more particularly described in Section 2.6 of the Indenture; provided, however,
that the obligation of the Company to make any such payment under this
subsection (d) shall be reduced by the amount of moneys available for such
payment described in clauses (1) or (2) of Section 2.6(g) of the Indenture; and
provided, further, that the obligation of the Company to make any payment under
this subsection (d) shall be deemed to be satisfied and discharged to the extent
of the corresponding payment made by the Credit Issuer under the Credit
Facility.
(e) In the event the Company shall fail to make any of the payments
required in this Section 5.2, the item or installment so in default shall
continue as an obligation of the Company until the amount in default shall have
been fully paid.
Section 5.3. Unconditional Obligations. The obligation of the Company to
make the payments required by Section 5.2 shall be absolute and unconditional.
The Company shall pay all such amounts without abatement, diminution or
deduction (whether for taxes or otherwise) regardless of any cause or
circumstance whatsoever including, without limitation, any defense, set-off,
recoupment or counterclaim that the Company may have or assert against the
Issuer, the Trustee or any other Person.
Section 5.4. Prepayments. The Company may prepay all or any part of the
amounts required to be paid by it under Section 5.2, at the times and in the
amounts provided in Article XI for redemption of the Bonds, and in the case of
mandatory redemptions of the Bonds, the Company shall cause to be furnished to
the Issuer such amounts on or prior to the applicable redemption dates.
Prepayment of amounts due hereunder pursuant to this Section 5.4 shall be
deposited in the Bond Fund.
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Section 5.5. Credits Against Payments. To the extent that principal of or
premium, if any, or interest on the Bonds shall be paid, there shall be credited
against payments required by Section 5.2, an amount equal to the principal of or
premium, if any, or interest on the Bonds so paid. If the principal of and
premium, if any, and interest on the Bonds shall have been paid sufficiently
that payment of the Bonds shall have occurred in accordance with Article V of
the Indenture, then the obligations of the Company pursuant to Section 5.2, ipso
facto, shall be deemed to have been paid in full, and the Company's obligations
under Section 5.2 and this Agreement shall be discharged. Notwithstanding the
foregoing to the extent that principal of or premium, if any, or interest on the
Bonds is paid from drawings under the Credit Facility, there shall be credited
against the unpaid loan payments required by Section 5.2 hereof, an amount equal
to the principal of or premium, if any, or interest on the Bonds so paid.
Section 5.6. Credit Facility And Alternate Credit Facility. The Company
shall provide for the payment of amounts payable pursuant to Section 5.2(a) and
(d) herein, by the delivery to the Trustee on the Issue Date of the Original
Credit Facility.
The Company shall be entitled to terminate the Credit Facility as
provided therein and in the Indenture and shall be entitled to provide an
Alternate Credit Facility under certain circumstances as provided in the
Indenture.
Section 5.7. Interest Rate Determination Method. The Company is hereby
granted the right to designate from time to time changes in the Interest Rate
Determination Method (as defined in the Indenture) in the manner and to the
extent set f xxxx in Section 2.4 of the Indenture.
Section 5.8. Company Approval of Indenture. A copy of the Indenture has
been submitted to the Company for its examination and review. By its execution
of this Agreement, the Company acknowledges that it has approved, has agreed to
and is bound by the provisions of the Indenture. The Company agrees that the
Trustee shall be entitled to enforce and to benefit from the terms and
conditions of this Agreement that relate to it notwithstanding the fact that it
is not a signatory hereto.
ARTICLE VI
MAINTENANCE AND TAXES
Section 6.1. Company's Obligations to Maintain and Repair. The Company
agrees that during the term of this Agreement it will keep and maintain the
Project in good condition, repair and working order, ordinary wear and tear
excepted, at its own cost, and will make or cause to be made from time to time
all necessary repairs thereto (including external and structural repairs) and
renewals and replacements thereto.
Section 6.2. Taxes and Other Charges. The Company will promptly pay and
discharge or cause to be promptly paid and discharged, as the same become due,
all taxes, assessments, governmental charges or levies and all utility and other
charges incurred in the operation, maintenance, use, occupancy and upkeep of the
Project imposed upon it or in respect of the Project before the same shall
become in default, as well as all lawful claims which, if unpaid, might become
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a lien or charge upon such property and assets or any part thereof, except such
that are contested in good faith by the Company for which the Company has
maintained adequate reserves satisfactory to the Credit Issuer, or in the
absence of any Credit Issuer, satisfactory to the Issuer and the Trustee.
ARTICLE VII
INSURANCE, EMINENT DOMAIN AND DAMAGE AND DESTRUCTION
Section 7.1. Insurance. The Company will during the term of this
Agreement and at all times while any Bonds are outstanding continuously insure
the Project against such risks as are customarily insured against by businesses
of like size and type, paying as the same become due all premiums in respect
thereof. In addition the Company shall comply, or cause compliance, with
applicable worker's compensation laws of the State.
Section 7.2. Provisions Respecting Eminent Domain. In case of any damage
to or destruction of all or any part of the Project exceeding $50,000, the
Company shall give prompt written notice thereof to the Issuer and the Trustee.
In case of a taking or proposed taking of all or any part of the Project or any
right therein by Eminent Domain, the party upon which notice of such taking is
served shall give prompt written notice to the other and to the Trustee. Each
such notice shall describe generally the nature and extent of such damage,
destruction, taking, loss, proceedings or negotiations.
Section 7.3. Damage and Destruction. If at any time while any of the
Bonds are Outstanding, the Project, or any portion thereof, shall be damaged or
destroyed by fire, flood, windstorm or other casualty, or title to, or the
temporary use of, the Project, or any portion thereof, shall have been taken by
the power of Eminent Domain, the Company (unless it shall have exercised its
option to prepay all of the Bonds) shall cause the Net Proceeds from insurance
or condemnation or an amount equal thereto to be used for the repair,
reconstruction, restoration or improvement of the Project. Notwithstanding the
above, so long as the Credit Facility is outstanding, the Company shall comply
with the terms of the Credit Agreement related to the use of insurance proceeds.
ARTICLE VIII
SPECIAL COVENANTS
Section 8.1. Access to the Property and Inspection. The Issuer and the
Trustee, and their respective agents and employees, shall have the right, at all
reasonable times during normal business hours of the Company upon the furnishing
of reasonable notice to the Company under the circumstances, to enter upon and
examine and inspect the Project and to examine and copy the books and records of
the Company insofar as such books and records relate to the Project or the Bond
Documents.
Section 8.2. Financial Statements. The Company shall, upon request,
deliver to the Trustee and the Issuer as soon as practicable and in any event
within 120 days after the end of each fiscal year of the Company, the financial
reports of the Company for such fiscal year.
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Section 8.3. Further Assurances and Corrective Instruments.
(a) Subject to the provisions of the Indenture, 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
and amendments hereto and such further instruments as may reasonably be required
for carrying out the intention or facilitating the performance of this
Agreement.
(b) The Company shall cause this Agreement to be kept recorded and filed
in such manner and in such places as may be required by law to fully preserve
and protect the security of the Holders and the rights of the Trustee and to
perfect the security interest created by the Indenture.
Section 8.4. Recording and Filing; Other Instruments.
(a) The Company covenants that it will cause continuation statements to
be filed as required by law in order fully to preserve and to protect the rights
of the Trustee or the Issuer in the assignment of certain rights of the Issuer
under this Agreement and otherwise under the Indenture. The Company covenants
that it will cause Counsel to render an opinion to the Issuer and to the Trustee
not earlier than 60 nor later than 30 days prior to each anniversary date
occurring at five-year intervals after the issuance of the Bonds to the effect
that all Financing Statements, notices and other instruments required by
applicable law, including this Agreement, have been recorded or filed or
re-recorded or re-filed in such manner and in such places required by law in
order to fully preserve and protect the rights of the Trustee in the assignment
of certain rights of the Issuer under this Agreement and otherwise under the
Indenture.
(b) The Company and the Issuer shall execute and deliver all instruments
and shall furnish all information and evidence deemed necessary or advisable in
order to enable the Company to fulfill its obligations as provided in subsection
(a) of this Section. The Company shall file and re-file and record and re-record
or shall cause to be filed and re-filed and recorded and re-recorded all
instruments required to be filed and re-filed and recorded or re-recorded and
shall continue or cause to be continued the liens of such instruments for so
long as any of the Bonds shall be Outstanding.
Section 8.5. Exclusion from Gross Income for Federal Income Tax Purposes
of Interest on the Bonds. The Company covenants and agrees that it has not taken
and will not take or cause to be taken, and has not omitted and will not omit or
cause to be omitted, any action which results in interest paid on the Bonds
being included in gross income of the Holders of the Bonds for the purposes of
federal income taxation.
The Company covenants and agrees that it will take or cause to be taken
all required actions necessary to preserve the exclusion from gross income for
federal income tax purposes of interest on the Bonds; and the Issuer covenants
and agrees that it will take or cause to be taken all required actions to
preserve the exclusion from gross income for federal income tax purposes of
interest on the Bonds.
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Section 8.6. Indemnity Against Claims. The Company will pay and discharge
and will indemnify and hold harmless the Issuer and the Trustee from any taxes,
assessments, impositions and other charges in respect of the Project. If any
such claim is asserted, or any such lien or charge upon payments, or any such
taxes, assessments, impositions or other charges, are sought to be imposed, the
Issuer will give prompt written notice to the Company and the Trustee; provided,
however, that the failure to provide such notice will not relieve the Company of
the Company's obligations and liability under this Section and will not give
rise to any claim against or liability of the Issuer. The Company shall have the
sole right and duty to assume, and shall assume, the defense thereof, with
counsel acceptable to the person on behalf of which the Company undertakes a
defense, with full power to litigate, compromise or settle the same in its sole
discretion.
Section 8.7. Release and Indemnification. The Company shall at all times
protect, indemnify and hold the Issuer, the members of the Governing Body, and
the attorneys, agents and employees of the Issuer and the Trustee and its
officers, attorneys, agents and employees harmless against any and all
liability, losses, damages, costs, expenses, taxes, causes of action, suits,
claims, demands and judgments of any nature arising from or in connection with
the Project or the financing of the Project, including, without limitation, all
claims or liability resulting from, arising out of or in connection with the
acceptance or administration of the Bond Documents or the trusts thereunder or
the performance of duties under the Bond Documents or any loss or damage to
property or any injury to or death of any person that may be occasioned by any
cause whatsoever pertaining to the Project or the use thereof, including without
limitation any lease thereof or assignment of its interest in this Agreement,
such indemnification to include the reasonable costs and expenses of defending
itself or investigating any claim of liability and other reasonable expenses and
attorneys' fees incurred by the Issuer, its directors, members, officers,
attorneys, agents and employees and the Trustee and its officers, attorneys,
agents and employees in connection therewith, provided that the benefits of this
Section 8.7 shall not inure to any person other than the Issuer, its directors,
members, officers, attorneys, agents and employees and the Trustee and its
officers, attorneys, agents and employees, and provided further that such loss,
damage, death, injury, claims, demands or causes shall not have resulted from
the gross negligence or willful misconduct of, the Issuer or such directors,
member, officer, attorneys, agent or employee or the Trustee or its officers,
attorneys, agents or employees. The obligations of the Company under this
Section shall survive the termination of this Agreement and the Indenture.
Notwithstanding any other provision of this Agreement or the Indenture to the
contrary, the Company agrees (i) not to assert any claim or institute any action
or suit against the Trustee or its employees arising from or in connection with
any investment of funds made by the Trustee in good faith as directed by a
Company Representative, and (ii) to indemnify and hold the Trustee and its
employees harmless against any liability, losses, damages, costs, expenses,
causes of action, suits, claims, demands and judgment of any nature arising from
or in connection with any such investment.
Section 8.8. Compliance with Laws. The Company agrees to comply with all
applicable zoning, planning, building, environmental and other regulations of
the governmental authorities having jurisdiction of the Project during the
Company's operation of the Project.
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Section 8.9. Non-Arbitrage Covenant.
(a) The Company and the Issuer covenant that they will (i) not take any
action or make any investment or use of the proceeds of the Bonds that would
cause the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the
Code and (ii) comply with the requirements of Section 148 of the Code.
(b) In the event that all of the proceeds of the Bonds, including the
investment proceeds thereof, are not expended by the date which is six (6)
months following the Issue Date, or if for any other reason a rebate is payable
to the United States pursuant to Section 148 of the Code, the Company shall
calculate, or cause to be calculated, the Rebate Amount (as defined in the
Indenture). The Company agrees to pay the amount so calculated, together with
supporting documentation, to the Trustee so as to permit the Trustee to pay such
rebate to the United States at the times required by the Code. The amount paid
by the Company to the Trustee shall be deposited into the Rebate Fund. The
Company shall maintain or cause to be maintained records of the determinations
of the rebate, if any, pursuant to this Section 8.9(b) until six (6) years after
the retirement of the Bonds. This Section 8.9(b) shall be construed in
accordance with Section 148(f) of the Code, including, without limitation, any
applicable tax regulations promulgated under the Code. Nothing contained in this
Agreement or in the Indenture shall be interpreted or construed to require the
Issuer to pay any applicable rebate, such obligation being the sole
responsibility of the Company.
Section 8.10. Notice of Determination of Taxability. Promptly after the
Company first becomes aware of any Determination of Taxability or an event that
could trigger a Determination of Taxability, the Company shall give written
notice thereof to the Issuer, the Remarketing Agent and the Trustee.
Section 8.11. No Purchase of Bonds by Company or Issuer. During the time
a Credit Facility is in effect neither the Company, the Issuer nor any
affiliates of any of them shall purchase any of the Bonds from the Remarketing
Agent except under the circumstances under which the Remarketing Agent may
remarket Bonds to the Company or the Issuer as provided in Section 2.7(d) of the
Indenture.
Section 8.12. Maintenance of Corporate Existence.
So long as a Credit Facility is in effect the Company agrees that it will
maintain its corporate existence, will not dissolve or otherwise dispose of all
or substantially all of its assets and will not consolidate with or merge into
another corporation or permit one or more other corporations to consolidate with
or merge into it, except either with the consent of the Credit Issuer or as
provided in the original Credit Agreement; if a Credit Facility is not in
effect, the Company agrees that it will continue to be a corporation either
organized under the laws of or duly qualified to do business as a foreign
corporation in the State, will maintain its corporate existence, will not
dissolve or otherwise dispose of all or substantially all of its assets and will
not consolidate with or merge into another corporation or permit one or more
corporations to consolidate with or merge into it; provided, that the Company
may, without violating the foregoing, consolidate with or merge into another
corporation, or permit one or more corporations to consolidate with or merge
into it, or transfer all
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or substantially all of its assets to another such corporation (and thereafter
dissolve or not dissolve, as the Company may elect) if the corporation surviving
such merger or resulting from such consolidation, or the corporation to which
all or substantially all of the assets of the Company are transferred, as the
case may be:
(i) is a corporation organized under the laws of the United States of
America, or any state, district or territory thereof, and qualified to do
business in the State;
(ii) shall expressly in writing assume all of the obligations of the
Company contained in this Agreement;
(iii) has a consolidated tangible net worth (after giving effect to such
consolidation, merger or transfer) of not less than the consolidated tangible
net worth of the Company and its consolidated subsidiaries immediately prior to
such consolidation, merger or transfer; and
(iv) provided that no Event of Default has occurred and is continuing
hereunder.
The term "consolidated tangible net worth," as used in this Section, shall mean
the difference obtained by subtracting total consolidated liabilities (not
including as a liability any capital or surplus item) from total consolidated
tangible assets of the Company and all of its consolidated subsidiaries,
computed in accordance with generally accepted accounting principles. Prior to
any such consolidation, merger or transfer the Trustee shall be furnished a
certificate from the chief financial officer of the Company or his/her deputy
stating that in the opinion of such officer none of the covenants in this
Agreement will be violated as a result of said consolidation, merger or
transfer.
Section 8.13. Duties and Obligations. The Company covenants and agrees
that it will fully and faithfully perform all the duties and obligations that
the Issuer has covenanted and agreed in the Indenture to cause the Company to
perform and any duties and obligations that the Company is required in the
Indenture to perform. The foregoing shall not apply to any duty or undertaking
of the Issuer that by its nature cannot be delegated or assigned.
ARTICLE IX
ASSIGNMENT, LEASE AND SALE
Section 9.1. Restrictions on Transfer of Issuer's Rights. The Issuer
agrees that, except for the assignment of its rights under this Agreement to the
Trustee pursuant to the Indenture, it will not during the term of this Agreement
sell, assign, transfer or convey its interests in this Agreement except as
provided in Section 9.2.
Section 9.2. Assignment by the Issuer. It is understood, agreed and
acknowledged that the Issuer, as security for payment of the principal of and
premium, if any, and interest on the Bonds, will assign to the Trustee pursuant
to the Indenture, among other things, certain of its rights, title and interests
in and to this Agreement (reserving its rights, however, pursuant to sections of
this
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Agreement providing that notices, reports and other statements be given to
the Issuer and that consents be obtained from the Issuer and also reserving its
rights to reimbursement and payment of costs and expenses under Sections 5.2(b)
and (c), its right of access under Section 8.1, and its rights to
indemnification and non-liability under Sections 8.6, 8.7, 12.6 and 12.7, all of
this Agreement). The Company consents to such assignment and agrees that the
Trustee shall be entitled to enforce this Agreement directly against the Company
as a third party beneficiary hereof.
Section 9.3. Assignment, Lease or Sale of Project or Assignment of
Agreement by Company. With the prior written consent of the Trustee, the Issuer
and if a Credit Facility is then in effect, the issuer of such Credit Facility
(a) the rights of the Company under this Agreement may be assigned by the
Company and (b) the Project may be leased or sold as a whole or in part by the
Company; provided, however, that (i) no such assignment, lease or sale shall
relieve the Company from primary liability for any of its obligations hereunder,
and in the event of any assignment, lease or sale, the Company shall continue to
remain primarily liable for payments to be made hereunder and for the
performance and observance of the other agreements on its part herein provided
to be performed and observed by it to the same extent as though no assignment,
lease or sale had been made, (ii) each lessee, purchaser or assignee of the
Company's interest in this Agreement shall assume the obligations of the Company
hereunder to the extent of the interest assigned, leased or sold, and the
Company shall, not more than 60 nor less than 30 days prior to the effective
date of any such assignment, lease or sale, furnish or cause to be furnished to
the Issuer and the Trustee a true and complete copy of each such assignment,
lease or purchase contract and assumption of obligations and (iii) prior to any
lease or sale, the Company shall have caused to be delivered to the Issuer and
the Trustee an opinion of Bond Counsel to the effect that such leasing or sale
will not cause interest on the Bonds to be includable in the gross income of the
owners thereof for purposes of federal income taxation. Notwithstanding the
foregoing, the Company shall be relieved of liability under this Agreement
following any such lease or sale, if (A) the Company receives the consent of the
Credit Issuer (if a Credit Facility is then in effect) and the Holders of the
Bonds, and (B) prior to any such release, the Company shall have caused to be
delivered to the Issuer and the Trustee an opinion of Bond Counsel to the effect
that such release of liability will not cause interest on the Bonds to be
includable in the gross income of the owners thereof for purposes of federal
income taxation.
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
Section 10.1. Events of Default Defined. The term "Event of Default"
shall mean any one or more of the following events:
(a) Failure by the Company to make any payments required to be paid
pursuant to Section 5.2(a) or to pay the Purchase Price of Bonds as required
pursuant to Section 5.2(d) herein;
(b) The occurrence of an Event of Default under the Indenture;
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(c) Any representation by or on behalf of the Company contained in this
Agreement or in any instrument furnished in compliance with or in reference to
this Agreement or the Indenture proves false or misleading in any material
respect as of the date of the making or furnishing thereof;
(d) Failure by the Company to observe or perform any of its other
covenants, conditions, payments or agreements under this Agreement for a period
of 30 days after written notice, specifying such failure and requesting that it
be remedied, is given to the Company by the Issuer or the Trustee;
(e) The Company shall (i) apply for or consent to the appointment of, or
the taking of possession by, a receiver, custodian, assignee, sequestrator,
trustee, liquidator or similar official of the Company or of all or a
substantial part of its property, (ii) admit in writing its inability, or be
generally unable, to pay its debts as such debts become due, (iii) make a
general assignment for the benefit of its creditors, (iv) commence a voluntary
case under the Federal Bankruptcy Code (as now or hereafter in effect), (v) file
a petition seeking to take advantage of any other federal or state law relating
to bankruptcy, insolvency, reorganization, arrangement, winding-up or
composition or adjustment of debts, (vi) fail to controvert in a timely or
appropriate manner, or acquiesce in writing to, any petition filed against the
Company in an involuntary case under said Federal Bankruptcy Code, or (vii) take
any corporate action for the purpose of effecting any of the foregoing;
(f) A proceeding or case shall be commenced, without the application or
consent of the Company, in any court of competent jurisdiction, seeking (i) the
liquidation, reorganization, arrangement, dissolution, winding-up or composition
or adjustment of debts of the Company, (ii) the appointment of a trustee,
receiver, custodian, assignee, sequestrator, liquidator or similar official of
the Company or of all or any substantial part of its assets, or (iii) similar
relief in respect of the Company under any law relating to bankruptcy,
insolvency, reorganization, arrangement, winding-up or composition or adjustment
of debts and such proceeding or case shall continue undismissed, or an order,
judgment or decree approving or ordering any of the foregoing shall be entered
and continue unstayed and in effect, for a period of 90 days from the
commencement of such proceeding or case or the date of such order, judgment or
decree, or an order for relief against the Company shall be entered in an
involuntary case under said Federal Bankruptcy Code;
(g) If a Credit Facility is in effect, the Trustee shall have received a
written notice from the Credit Issuer of the occurrence and continuance of an
"Event of Default" (as defined in the Credit Agreement); or
(h) If a Credit Facility is in effect, the Trustee shall have received a
written notice from the Credit Issuer that amounts which may be drawn upon under
the Credit Facility with respect to interest (other than interest corresponding
to the principal amount of Bonds which have been redeemed) will not be
reinstated following any drawing for such interest.
Section 10.2. Remedies on Default. Upon the occurrence of an Event of
Default under this Agreement, the Trustee, as assignee of the Issuer, but only
if acceleration of the principal amount of the Bonds has been declared pursuant
to Section 6.2 of the Indenture, shall take any one or more of the following
remedial steps:
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(a) By written notice declare all payments hereunder immediately due and
payable, whereupon the same shall become immediately due and payable without
presentment, demand, protest or any other notice whatsoever, all of which are
hereby expressly waived by the Company.
(b) Take whatever other action at law or in equity may appear necessary
or desirable to collect the amounts payable pursuant hereto then due and
thereafter to become due or to enforce the performance and observance of any
obligation, agreement or covenant of the Company under this Agreement, including
the making of any drawing under the Credit Facility.
In the enforcement of the remedies provided in this Section 10.2, the
Issuer and the Trustee may treat all reasonable expenses of enforcement,
including, without limitation, legal, accounting and advertising fees and
expenses, as additional amounts payable by the Company then due and owing.
Section 10.3. Application of Amounts Realized in Enforcement of Remedies.
Any amounts collected pursuant to action taken under Section 10.2 shall be paid
to the Trustee and applied in accordance with Section 6.7 of the Indenture.
Section 10.4. No Remedy Exclusive. No remedy herein conferred upon or
reserved to the Issuer is intended to be exclusive of any other available remedy
or remedies, but each and every such remedy shall be cumulative and shall be in
addition to every other remedy given under this Agreement or now or hereafter
existing at law or in equity or by statute. No delay or omission to exercise any
right or power accruing upon an Event of Default under this Agreement shall
impair any such right or power or shall be construed to be a waiver thereof, but
any such right and power may be exercised from time to time and as often as may
be deemed expedient.
Section 10.5. Agreement to Pay Attorneys' Fees and Expenses. Upon the
occurrence of an Event of Default under this Agreement, if the Issuer or the
Trustee employs attorneys or incurs other expenses for the collection of amounts
payable hereunder or for the enforcement of the performance or observance of any
covenants or agreements on the part of the Company herein contained, whether or
not suit is commenced, the Company agrees that it will on demand therefor pay to
the Issuer or the Trustee or any combination thereof, as the case may be, the
reasonable fees of such attorneys and such other reasonable expenses so incurred
by the Issuer or the Trustee.
Section 10.6. Issuer and Company to Give Notice of Default. The Issuer
and the Company severally covenant that they will, at the expense of the
Company, promptly give to the Trustee, the Tender Agent, the Remarketing Agent,
the Paying Agent and the Credit Issuer, and to each other, written notice of any
Event of Default under this Agreement of which they shall have actual knowledge
or written notice, but the Issuer shall not be liable for failing to give such
notice.
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ARTICLE XI
PREPAYMENTS; PURCHASE OF BONDS
Section 11.1. Optional Prepayments.
(a) The Company shall have, and is hereby granted, the option to prepay
the unpaid principal amount hereunder in whole, together with interest thereon
to the date of redemption of the Bonds, at any time by taking, or causing the
Issuer to take, the actions required by the Indenture for the redemption of all
Bonds then outstanding, upon the occurrence of any of the events set forth in
Section 2.18(b) of the Indenture.
(b) The Company shall have, and is hereby granted, the option to prepay
all or any portion of the unpaid balance hereunder, together with interest
thereon to the date of redemption of the Bonds, at any time by taking, or
causing the Issuer to take, the actions required by the Indenture (i) to
discharge the lien thereof through the redemption, or provision for payment of
redemption of all Bonds then outstanding or (ii) to effect the redemption, or
provision for payment or redemption, of less than all Bonds then outstanding,
pursuant to Section 2.18(a) of the Indenture.
(c) To make a prepayment pursuant to this Section 11.1, the Company shall
give written notice to the Issuer, the Trustee and the Registrar which shall
specify therein (i) the date of the intended prepayment, which shall not be less
than 45 days from the date any Bonds are to be redeemed from such prepayment,
and (ii) the principal amount to be prepaid and the date or dates on which the
prepayment is to occur. All such prepayments shall be in the amount of the
unpaid amount hereunder if made pursuant to Section 11.1(a) or in the amount of
an Authorized Denomination if made pursuant to Section 11.1(b) and the Company
shall furnish additional funds, if necessary, to make such prepayments in such
amounts. In addition, the Company shall make such additional payments as shall
be necessary to pay any redemption premium on the Bonds in connection with such
redemption.
Section 11.2. Mandatory Prepayment Upon a Determination of Taxability. In
the event of a Determination of Taxability, the Company shall forthwith, and in
any event within 45 days of any such Determination of Taxability, pay the entire
unpaid principal balance hereunder plus accrued interest thereon to the date of
payment, provided, that, if the Company delivers to the Trustee the opinion of
Bond Counsel described in Section 2.18(c) of the Indenture, which opinion states
that interest on the Bonds will not be includable in the gross income of the
owners thereof if less than all of the Bonds are redeemed, then the Company
shall prepay the Loan in the amount necessary to redeem the amount of Bonds
stated in such opinion.
The Company hereby agrees to give prompt written notice to the Issuer and
the Trustee of (a) the occurrence of an event that gives or may give rise to a
Determination of Taxability or (b) its receipt of any oral or written advice
from the Internal Revenue Service that an event giving rise to a Determination
of Taxability shall have occurred.
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Section 11.3. Other Mandatory Prepayment. The Company shall prepay the
entire amount due hereunder, plus accrued interest to the date of redemption of
the Bonds to be made from such prepayment, within forty-five (45) days after the
failure of the Company to deliver to the Trustee the opinion of Bond Counsel
described in Section 2.3(1) of the Indenture.
Section 11.4. Optional Purchase of Bonds. Subject to the terms of the
Indenture regarding the use of Eligible Funds, the Company may at any time, and
from time to time, furnish moneys to the Tender Agent accompanied by a notice
directing such moneys to be applied to the purchase of Bonds delivered for
purchase pursuant to the terms thereof, which Bonds shall be delivered to the
Trustee for cancellation in accordance with Section 2.8 of the Indenture. The
Company shall deliver to the Remarketing Agent and the Credit Issuer a copy of
any such notice.
Section 11.5. Relative Priorities. The obligations of the Company in
Sections 11.2 and 11.3 of this Article shall be and remain superior to the
rights, obligations and options of the Company in Section 11.1 of this Article.
Section 11.6. Prepayment to Include Fees and Expenses. Any prepayment
under this Article shall also include any expenses of prepayment, as well as all
expenses and costs provided for herein.
Section 11.7. Purchase of Bonds.
(a) In consideration of the issuance of the Bonds by the Issuer, but for
the benefit of the Holders, the Company has agreed, and does hereby covenant, to
cause the necessary arrangements to be made and to be thereafter continued
whereby the Holders from time to time may deliver, or may be required to deliver
Bonds for purchase and whereby such Bonds shall be so purchased. In furtherance
of the foregoing covenant of the Company, the Issuer, at the request of the
Company, has set forth in the Bonds the terms and conditions relating to the
delivery of Bonds by the Holders thereof for purchase, has set forth in the
Indenture the duties and responsibilities of the Tender Agent with respect to
the purchase of Bonds, and of the Remarketing Agent with respect to the
remarketing of Bonds and has therein provided for the appointment of the Tender
Agent and Remarketing Agent. The Company hereby authorizes and directs the
Tender Agent and the Remarketing Agent to purchase, offer, sell and deliver
Bonds in accordance with the provisions of the Indenture.
Without limiting the generality of the foregoing covenant of the Company,
and in consideration of the Issuer's having set forth in the Bonds and the
Indenture the aforesaid provisions, the Company covenants, for the benefit of
the Holders, to provide for arrangements to pay, or cause to be paid, such
amounts as shall be necessary to effect the payment of the Purchase Price of
Bonds delivered for purchase, all as more particularly described in the
Indenture.
(b) Notwithstanding the provisions of subsection (a) of this Section, the
obligations of the Company under subsection (a) of this Section with respect to
the purchase of Bonds shall be terminated on the date the Bonds begin to bear
interest at the Fixed Rate in accordance with the Indenture.
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(c) In furtherance of the obligations of the Company under subsection (a)
of this Section, the Company shall provide for the payment of its obligations
under said subsection (a) by the delivery of the Original Credit Facility
simultaneously with the original delivery of the Bonds. In order to implement
such undertaking of the Company, the Issuer, at the direction of the Company,
has set forth in the Indenture the terms and conditions relating to drawings
under the Credit Facility to provide moneys for the purchase of Bonds. The
Company hereby authorizes and directs the Trustee to draw moneys under the
Credit Facility in accordance with the provisions of the Indenture to the extent
necessary to provide moneys payable under Section 2.7 of the Indenture if and
when due.
(d) The Issuer shall have no obligation or responsibility, financial or
otherwise, with respect to the purchase of Bonds or the making or continuation
of arrangements therefor other than as expressly set forth in subsection (a) of
this Section 11.7, except that the Issuer shall generally cooperate with the
Company, the Tender Agent and the Remarketing Agent as contemplated in Section
2.7 of the Indenture.
ARTICLE XII
MISCELLANEOUS
Section 12.1. Amounts Remaining in Funds. Subject to the provisions of
Article V of the Indenture and as provided in Article IV of the Indenture, it is
agreed by the parties hereto that certain amounts remaining in the Bond Fund or
Bond Purchase Fund upon expiration or earlier termination of this Agreement, as
provided in this Agreement, after payment in full of the Bonds (or provision for
payment thereof having been made in accordance with the provisions of the
Indenture) and all other amounts owing under the Indenture, shall be paid to the
Credit Issuer (if a Credit Facility is in effect and there is any amount then
owing by the Company to the Credit Issuer) and otherwise shall belong to and be
paid to the Company by the Trustee.
Section 12.2. No Implied Waiver. In the event any provision of this
Agreement should be breached by either party and thereafter waived by the other
party, such waiver shall be limited to the particular breach so waived and shall
not be deemed to waive any other breach thereunder or hereunder.
Section 12.3. Issuer Representative. Whenever under the provisions of
this Agreement the approval of the Issuer is required or the Issuer is required
to take some action at the request of the Company, such approval shall be made
or such action shall be taken by the Issuer Representative; and the Company and
the Trustee shall be authorized to rely on any such approval or action.
Section 12.4. Company Representative. Whenever under the provisions of
this Agreement the approval of the Company is required or the Company is
required to take some action at the request of the Issuer, such approval shall
be made or such action shall be taken by the Company Representative; and the
Issuer, the Tender Agent, the Remarketing Agent, the Paying Agent and the
Trustee shall be authorized to rely on any such approval or action.
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Section 12.5. Notices. Except as otherwise provided herein, it shall be
sufficient service or giving of any notice, request, complaint, demand or other
paper if the same shall be duly mailed by registered or certified mail, postage
prepaid, addressed as set forth below to the Issuer, the Trustee, the Company,
the Remarketing Agent, the Paying Agent, the Tender Agent, the Credit Issuer, if
any, or to any other Person set forth therein. The Issuer, the Company, any
Credit Issuer, the Trustee, the Tender Agent, the Remarketing Agent and the
Paying Agent by notice given hereunder may designate any different addresses to
which subsequent notices, certificates or other communications shall be sent. A
duplicate copy of each notice, certificate or other communication given
hereunder by one party to another shall also be given to each of the other
parties listed herein.
To the Issuer: Iowa Finance Authority
000 Xxxx Xxxxx, Xxxxx 000
Xxx Xxxxxx, Xxxx 00000
Attention: Chief Financial Officer
With a copy to: Xxxxxx & Xxxxxxx P.L.L.P.
000 Xxxxx, Xxxxx 0000
Xxx Xxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
To the Company: Dixie Bedding Company
0000 Xxxxxxx Xxxx Xxxx
X.X. Xxx 0000
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Treasurer
And a copy to: Davis, Hockenberg, Wine, Xxxxx,
Xxxxx & Xxxxx, X.X.
Xxx Xxxxxxxxx Xxxxxx, Xxxxx 0000
000 Xxxxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000-0000
Attention: Xxxxxxxx X. Xxxx
To the Credit Issuer: Wachovia Bank of North Carolina,
National Association
000 Xxxxx Xxxx Xxxxxx
Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx 00000
Attention: International Department
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With a copy to: Wachovia Bank of North Carolina,
National Association
Post Office Box 21048 (27420)
000 X. Xxx Xxxxxx (00000
Xxxxxxxxxx, Xxxxx Xxxxxxxx
Attention: Xx. Xxxxxx X. Xxxxxx
Vice President
To the Trustee: First-Citizens Bank & Trust Company
Corporate Trust Department
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Corporate Trust Department
To the Remarketing Wachovia Bank of Georgia,
Agent: National Association
X.X. Xxx 0000 (30302)
000 Xxxxxxxxx Xxxxxx, X.X. (30303)
Atlanta, Georgia
Attention: Bond & Money Market Group
Money Market Desk
To the Paying Agent: Wachovia Bank of North Carolina,
National Association
000 Xxxxx Xxxx Xxxxxx
Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx 00000
Attention: Bond and Money Market
Group/Bond Operations
To the Tender Agent: Wachovia Bank of North Carolina,
National Association
000 Xxxxx Xxxx Xxxxxx
Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx 00000
Attention: Bond and Money Market
Group/Money Market Desk
Section 12.6. Issuer, Directors, Attorneys, Officers, Employees and
Agents of Issuer Not Liable. To the extent permitted by law, no recourse shall
be had for the enforcement of any obligation, promise or agreement of the Issuer
contained herein or in the other Bond Documents to which the Issuer is a party
or for any claim based hereon or thereon or otherwise in respect hereof or
thereof against any director, officer, agent, attorney or employee, as such, in
his/her individual capacity, past, present or future, of the Issuer or of any
successor entity, either directly or through the Issuer or any successor entity
whether by virtue of any constitutional provision, statute or rule of law, or by
the enforcement of any assessment or penalty or otherwise. No personal liability
whatsoever shall attach to, or be incurred by, any director, officer, agent,
attorney or employee as such, past,
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present or future, of the Issuer or any successor entity, either directly or
through the Issuer or any successor entity, under or by reason of any of the
obligations, promises or agreements entered into between the Issuer and the
Company, whether herein contained or to be implied herefrom as being
supplemental hereto; and all personal liability of that character against every
such director, officer, agent, attorney and employee is, by the execution of
this Agreement and as a condition of, and as part of the consideration for, the
execution of this Agreement, expressly waived and released.
Notwithstanding any other provision of this Agreement, the Issuer shall
not be liable to the Company or the Trustee or any other person for any failure
of the Issuer to take action under this Agreement unless the Issuer (a) is
requested in writing by an appropriate person to take such action, (b) is
assured of payment of, or reimbursement for, any reasonable expenses in such
action, and (c) is afforded, under the existing circumstances, a reasonable
period to take such action. In acting under this Agreement, or in refraining
from acting under this Agreement, the Issuer may conclusively rely on the advice
of its counsel.
Section 12.7. No Liability of Issuer; No Charge Against Issuer's Credit.
Any obligation of the Issuer created by, arising out of, or entered into in
contemplation of this Agreement, including the Bonds, shall not impose a debt or
pecuniary liability upon the Issuer, the State or any political subdivision
thereof or constitute a charge upon the general credit or taxing powers of any
of the foregoing. Any such obligation shall be payable solely out of the
revenues and any other moneys derived hereunder and under the Indenture and the
Credit Facility, except (as provided in the Indenture and in this Agreement) to
the extent it shall be paid out of moneys attributable to the proceeds of the
Bonds or the income from the temporary investment thereof.
The principal of, premium, if any, and interest on the Bonds shall be
payable solely from the funds pledged for their payment in accordance with the
Indenture and from payments made pursuant to the Credit Facility.
Section 12.8. If Performance Date Not a Business Day. If the last date
for performance of any act or the exercising of any right, as provided in this
Agreement, shall not be a Business Day, such payment may be made or act
performed or right exercised on the next succeeding Business Day.
Section 12.9. Binding Effect. This Agreement shall inure to the benefit
of and shall be binding upon the Issuer, the Company, and their respective
successors and assigns. No assignment of this Agreement by the Company shall
relieve the Company of its obligations hereunder except to the extent otherwise
provided in Section 9.3 hereof.
Section 12.10. Severability. In the event any provision of this Agreement
shall be held invalid or unenforceable by any court of competent jurisdiction,
such holding shall not invalidate or render unenforceable any other provision
hereof.
Section 12.11. Amendments, Changes and Modifications. Subsequent to the
issuance of the Bonds and prior to payment of the Bonds, this Agreement may not
be effectively amended, changed, modified, altered or terminated except in
accordance with the Indenture.
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Section 12.12. Execution in Counterparts. This Agreement may be executed
in several counterparts, each of which, taken together, shall be an original and
all of which shall constitute but one and the same instrument.
Section 12.13. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State.
IN WITNESS WHEREOF, the Issuer and the Company have caused this Agreement
to be executed in their respective legal names and their respective corporate
seals to be hereunto affixed, and the signatures of duly authorized persons to
be attested, all as of the date first above written.
IOWA FINANCE AUTHORITY
By: /S/ Xxxxx X. Xxxxxx
-------------------
Title: Chairman
[SEAL]
ATTEST:
/S/ Xxx X. Xxxxxxx
------------------
Title: Secretary
DIXIE BEDDING COMPANY
By: /S/
--------------------
Title: President
[SEAL]
ATTEST:
/S/ Xxxxxxx X. Xxxxxxx
----------------------
Title: Secretary
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