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EXHIBIT 10.12
THE GUILFORD COUNTY INDUSTRIAL FACILITIES
AND POLLUTION CONTROL FINANCING AUTHORITY
AS ISSUER
AND
CRESCENT SLEEP PRODUCTS COMPANY,
A DELAWARE CORPORATION, AS COMPANY
LOAN AGREEMENT
DATED AS OF SEPTEMBER 1, 1999
The interests of Issuer in this Agreement have been assigned (except for
the rights of, and amounts payable to Issuer under Sections 4.2(b), 7.2, 8.4
and 10.10 hereof) pursuant to the Trust Indenture dated as of the date hereof
between the Issuer and U.S. Bank Trust National Association, as trustee, and is
subject to the security interest of the Trustee.
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LOAN AGREEMENT
TABLE OF CONTENTS
(This Table of Contents is not a part of the Agreement and is only for
convenience of reference)
Page
ARTICLE I - DEFINITIONS......................................................................................2
ARTICLE 11 - REPRESENTATIONS, COVENANTS AND WARRANTIES.......................................................4
Section 2.1. Representations, Covenants and Warranties of Issuer............................................4
Section 2.2. Representations, Covenants and Warranties of Company...........................................5
Section 2.3. Tax Covenants..................................................................................7
ARTICLE III - ISSUANCE OF THE BONDS; DISBURSEMENTS..........................................................12
Section 3.1. Agreement to Issue Bonds; Application of Bond Proceeds........................................12
Section 3.2. Disbursements from the Project Fund...........................................................12
Section 3.3. Completion Date...............................................................................13
Section 3.4. Company Required to Pay in Event Project Fund Insufficient....................................14
Section 3.5. No Warranty by Issuer.........................................................................14
Section 3.6. Annual Report.................................................................................14
ARTICLE IV - LOAN OF PROCEEDS TO COMPANY; LOAN PROVISIONS...................................................15
Section 4.1. Loan of Proceeds..............................................................................15
Section 4.2. Amounts Payable...............................................................................15
Section 4.3. Obligations of Company Hereunder Unconditional; Payments Assigned.............................15
Section 4.4. Maintenance and Modification of Project by Company............................................16
Section 4.5. Taxes and Governmental and Utility Charges....................................................17
Section 4.6. Insurance.....................................................................................17
Section 4.7. Financing Statements..........................................................................17
ARTICLE V - DAMAGE, DESTRUCTION AND CONDEMNATION; USE OF NET
PROCEEDS....................................................................................................18
Section 5.1. Damage, Destruction and Condemnation..........................................................18
Section 5.2. Application of Net Proceeds...................................................................18
Section 5.3. Insufficiency of Net Proceeds.................................................................19
Section 5.4. Cooperation of Trustee........................................................................19
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Section 5.5. Condemnation of Property Owned by Company Not in Project......................................19
ARTICLE VI - SPECIAL COVENANTS..............................................................................20
Section 6.1. No Warranty of Condition or Suitability by Issuer.............................................20
Section 6.2. Access to the Project.........................................................................20
Section 6.3. Further Assurances and Corrective Instruments.................................................20
Section 6.4. Issuer and Company Representatives............................................................20
Section 6.5. Maintenance of Letter of Credit...............................................................20
Section 6.6. Acts With Respect to Bonds....................................................................20
ARTICLE VII - ASSIGNMENT, SELLING, LEASING, INDEMNIFICATION AND
REDEMPTION..................................................................................................21
Section 7.1. Assignment, Selling and Leasing; Merger or Sale of Assets.....................................21
Section 7.2. Release and Indemnification Covenants.........................................................22
Section 7.3. Assignment of Interest in this Agreement by Issuer............................................22
Section 7.4. Redemption of Bonds...........................................................................22
Section 7.5. Installation of Company's Own Property........................................................23
Section 7.6. References to Bonds Ineffective After Bonds Paid..............................................23
Section 7.7. Issuer to Grant Security Interest to Trustee..................................................23
Section 7.8. Certain References Ineffective After Letter of Credit Termination Date........................23
ARTICLE VIII - EVENTS OF DEFAULT AND REMEDIES 24
Section 8.1. Events of Default Defined.....................................................................24
Section 8.2. Remedies on Default...........................................................................24
Section 8.3. No Remedy Exclusive...........................................................................25
Section 8.4. Agreement to Pay Attorneys' Fees and Expenses.................................................25
Section 8.5. No Additional Waiver Implied by One Waiver....................................................25
ARTICLE IX - OPTIONAL PREPAYMENT OF LOAN....................................................................27
Section 9.1. Option to Terminate At Any Time...............................................................27
Section 9.2. Option to Prepay Loan in Part.................................................................27
Section 9.3. Relative Position of Options and Indenture....................................................27
Section 9.4. Mandatory Prepayments.........................................................................27
ARTICLE X - MISCELLANEOUS...................................................................................28
Section 10.1. Term of Agreement.............................................................................28
Section 10.2. Notices.......................................................................................28
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Section 10.3. Binding Effect................................................................................28
Section 10.4. Severability..................................................................................28
Section 10.5. Amounts Remaining in Bond Fund................................................................28
Section 10.6. Amendments, Changes and Modifications.........................................................28
Section 10.7. Execution in Counterparts.....................................................................28
Section 10.8. Applicable Law................................................................................28
Section 10.9. Captions......................................................................................29
Section 10.10.Limitation of Issuer's Liability..............................................................29
Section 10.11.Certain Events with respect to Bank...........................................................29
Section 00.00.Xx Benefits to Outside Parties................................................................29
EXHIBIT A PROJECT DESCRIPTION
EXHIBIT B FORM OF NOTE
EXHIBIT C FORM OR REQUISITION
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LOAN AGREEMENT
THIS LOAN AGREEMENT is dated as of September 1, 1999, and is between THE
GUILFORD COUNTY INDUSTRIAL FACILITIES AND POLLUTION CONTROL FINANCING AUTHORITY
("Issuer"), a political subdivision of the State of North Carolina, and
CRESCENT SLEEP PRODUCTS COMPANY, a Delaware corporation ("Company").
W I T N E S S E T H:
WHEREAS, the Industrial and Pollution Control Facilities Financing Act,
Chapter 159C of the General Statutes of North Carolina, as amended (the "Act"),
authorizes the creation of industrial facilities and pollution control
financing authorities by the several counties in North Carolina and empowers
such authorities to acquire, construct, own, repair, maintain, extend, improve,
rehabilitate, renovate, furnish, equip and sell, lease, exchange, transfer or
otherwise dispose of industrial or manufacturing facilities to the end that
such authorities may be able to promote the right to gainful employment
opportunity and private industry and thereby promote the general welfare of the
inhabitants of North Carolina by exercising such powers to aid in financing
industrial or manufacturing facilities for the purpose of alleviating
unemployment or raising below average manufacturing wages and further
authorizes such authorities to loan to others the proceeds of bonds issued for
the purpose of paying for all or any part of an industrial or manufacturing
facility, to mortgage and pledge any or all of such facilities, whether then
owned or thereafter acquired, as security for the payment of the principal of,
premium, if any, and interest on any such bonds and any agreements made in
connection therewith and to pledge or assign the revenues and receipts from
such facilities or loan or from any other source to the payment of such bonds;
and
WHEREAS, the Issuer has been duly organized pursuant to the Act; and
WHEREAS, in order to further the purposes of the Act, the Issuer proposes
to undertake the financing of the acquisition, construction and equipping of
133,000 square foot facility located in Guilford County to be owned and
operated by the Company for the purpose of manufacturing mattresses (the
"Project"), which constitutes an industrial project under the Act, and to
obtain the funds therefor by the issuance of its Bonds (as hereinafter defined)
under a Trust Indenture securing such Bonds, between the Issuer and U.S. Bank
Trust National Association, as Trustee, dated as of the date hereof (the
"Indenture"); and
WHEREAS, the Issuer proposes to loan the proceeds from the sale of the
Bonds, as hereinafter defined, to the Company to acquire and install the
Project upon the terms and conditions hereinafter set forth; and
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants hereinafter contained, the parties hereto agree as follows:
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ARTICLE I
DEFINITIONS
Capitalized terms used herein but not defined herein shall have the
meanings ascribed to them in the Indenture. The following words and phrases
shall have the following meanings:
"Act" means the Industrial and Pollution Control Facilities Financing Act,
Chapter 159C of the General Statutes of North Carolina, as amended from time to
time.
"Agreement" means this Agreement and any amendments and supplements
hereto.
"Bank Mortgage" means the Mortgage, Security Agreement, Assignment of
Leases and Rents and Fixture Financing Statement dated as of September 1, 1999,
from the Company in favor of the Bank.
"Cessation of Operation" means that operation of the Project as a
"project" within the meaning of the Act shall have ceased. A "Cessation of
Operation" shall not be deemed to have occurred, however, until the date
occurring 60 days following the date written notice has been given to the
Company by the Issuer or the Trustee that operation of the Project shall have
ceased and the Company shall not have demonstrated to the satisfaction of the
Issuer and the Trustee that the Company (or an assignee or lessee permitted by
hereunder) is operating the Project as a "project" within the meaning of the
Act.
"Company" shall mean Crescent Sleep Products Company, a Delaware
corporation, and its successors and assigns, and any surviving, resulting or
transferee entity as provided in Section 2.2 herein.
"Company Documents" shall mean this Agreement, the Note, the Bond Purchase
Agreement and the Remarketing Agreement.
"Company Representative" shall mean such person or persons as may be
designated to act on behalf of the Company by a Company certificate filed with
the Issuer and the Trustee.
"Completion Date" shall mean the date established pursuant to Section 3.3
hereof
"Determination of Taxability" means the issuance of a statutory notice of
deficiency by the Internal Revenue Service, a ruling from the National Office
or any District Office of the Internal Revenue Service, or a final decision of
a court of competent jurisdiction, which holds in effect that, by reason of a
breach by the Company of any agreement, covenant or representation in this
Agreement, the interest payable on the Bonds is includible for federal income
tax purposes in the gross income of an Owner of the Bonds after the period, if
any, for contest or appeal of such action, ruling or decision by the Company
and the Owner has expired without any such contest or appeal having been
properly instituted by the Company or the Owner; provided that no Determination
of
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Taxability shall arise from the interest on the Bonds being included (1) in
income for purposes of calculating alternative minimum taxable income of any
corporation pursuant to Section 55 of the Code; (2) in earnings and profits of
branches of foreign corporations for purposes of calculating the "branch
profits tax"; (3) within gross income to certain recipients of social security
benefits; or (4) as passive investment income to certain subchapter S
corporations which have subchapter C earnings and profits.
"Default" and "Event of Default" mean with respect to any Default or Event
of Default under this Agreement any occurrence or event specified and defined
by Section 8.1 hereof
"Governing Body" means the Guilford County Board of County Commissioners.
"Indenture" means the Trust Indenture dated as of this date between Issuer
and Trustee, pursuant to which the Bonds are authorized to be issued, and any
amendments or supplements thereof.
"Issuer Documents" means the Indenture, this Agreement and the Bond
Purchase Agreement.
"LGC" means the Local Government Commission of North Carolina, a division
of the North Carolina Department of State Treasurer, and any successor agency.
"Net Proceeds," when used with respect to any insurance proceeds or any
condemnation award, means the amount remaining after deducting all expenses
(including attorneys' fees) incurred in the collection of such proceeds or
award from the gross proceeds thereof.
"Note" shall mean the Promissory Note of Company dated the date of the
Bonds in the form attached as Exhibit A.
"Original Purchaser" means U.S. Bancorp Xxxxx Xxxxxxx Inc.
"Permitted Encumbrances" shall have the meaning assigned to such term in
the Bank Mortgage.
"Project" shall mean the project described on Exhibit A hereto.
"Project Costs" shall have the meaning specified in Section 3.2 hereof.
"Project Fund" means the fund created in Section 6.02 of the Indenture.
"Revenues" shall mean the revenues and receipts to be received by the
Issuer pursuant to the Note.
"State" means the State of North Carolina.
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"Related Person" shall have the meaning specified in the Code.
"Term of Agreement" means the term of this Agreement as specified in
Section 10.1 hereof.
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ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES
Section 2.1. Representations, Covenants and Warranties of Issuer. Issuer
represents that:
(a) Organization and Authority. The Issuer is a political subdivision
within the meaning of the Act, created and validly existing pursuant to the
provisions of the Act. The Issuer has all requisite power and authority under
the Act to (i) issue the Bonds, (ii) lend the proceeds thereof to the Company
to assist the Company in financing the cost of acquiring, constructing and
equipping the Project, and (iii) enter into, and perform its obligations under
the Issuer Documents and the Bonds. The members of the Board of Commissioners
of the Issuer are appointed by the Board of County Commissioners of Guilford
County.
(b) Pending Litigation. There are no actions, suits, proceedings,
inquiries or investigations pending, or to the knowledge of the Issuer
threatened, against or affecting the Issuer in any court or before any
governmental authority or arbitration board or tribunal, which involve the
possibility of materially and adversely affecting the transactions contemplated
by the Issuer Documents or which, in any way, would materially and adversely
affect the validity or enforceability of the Bonds, the Issuer Documents or any
agreement or instrument to which the Issuer is a party and which is used or
contemplated for use in the consummation of the transactions contemplated
hereby or thereby.
(c) Issue, Sale and Other Transactions Are Legal and Authorized. The
issuance and sale of the Bonds and the execution and delivery by the Issuer of
this Agreement, the Issuer Documents and the compliance by the Issuer with all
of the provisions of each thereof and of the Bonds (i) are within the purposes,
powers and authority of the Issuer, (ii) have been done in full compliance with
the provisions of the Act, (iii) are legal and will not conflict with or
constitute on the part of the Issuer a violation of or a breach of or default
under, or result in the creation of any lien, charge or encumbrance upon any
property of the Issuer (other than as contemplated in the Indenture) under the
provisions of, any activating resolution, by-law, indenture, mortgage, deed of
trust, note agreement or other agreement or instrument to which the Issuer is a
party or by which the Issuer is bound, or to the best of Issuer's knowledge any
license, judgment, decree, law, statute, order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Issuer or any of
its activities or properties, and (iv) have been duly authorized by all
necessary corporate action on the part of the Issuer.
(d) Governmental Consents. Neither the nature of the Issuer nor any
of its activities or properties, nor any relationship between the Issuer and
any other person, nor any circumstance in connection with the issue, sale or
delivery of any of the Bonds is such as to require the consent, approval or
authorization of, or the filing, registration or qualification with, any
governmental authority on the part of the Issuer in connection with the
execution, delivery and performance of the Issuer Documents or the issue, sale
or delivery of the Bonds, other than those already obtained;
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provided, however, no representation is made as to compliance with any federal
or state securities or "blue sky" law.
(e) No Defaults. To the best of Issuer's knowledge, no event has
occurred and no condition exists with respect to the Issuer which would
constitute an "event of default" as defined in the Issuer Documents or which,
with the lapse of time or with the giving of notice or both, would become such
an "event of default." The Issuer is not in default under the Act or under any
charter instrument, by-law or other agreement or instrument to which it is a
party or by which it is bound which default would adversely affect the
enforceability or taxability of the Bonds.
(f) No Prior Pledge. Neither this Agreement nor any of the Revenues
have been pledged or hypothecated in any manner or for any purpose other than
as provided in the Indenture as security for the payment of the Bonds.
(g) Nature and Location of Project. The financing of the costs of the
Project, together with related expenses, is authorized under the Act and is in
furtherance of the public purpose for which the Issuer was created. The Project
is located in Guilford County, North Carolina.
(h) Limited Obligations. Notwithstanding anything herein contained to
the contrary, any obligation the Issuer may hereby incur for the payment of
money shall not constitute an indebtedness of the County or of the State or of
any political subdivision thereof within the meaning of any state
constitutional provision or statutory limitation and shall not give rise to a
pecuniary liability of the State or County or any political subdivision
thereof, or constitute a charge against the general credit or taxing power of
said State or County or any political subdivision thereof, but shall be limited
obligations of the Issuer payable solely from (i) the Revenues, (ii) revenues
derived from the sale of the Bonds, and (iii) amounts on deposit from time to
time in the Bond Fund, subject to the provisions of this Agreement and the
Indenture permitting the application thereof for the purposes and on the terms
and conditions set forth herein and therein.
(i) Approval of Issuance of Bonds. The Issuer has obtained approval
of the issuance of the Bonds by the Governing Body as required by Section
159C-4(d) of the Act, by the Secretary of the Department of Commerce of the
State and the Secretary of the Department of Environment and Natural Resources
as required by Section 159C-7 of the Act and the approvals from the LGC as
required by Sections 159C-6, -8 and -9 of the Act.
THE ISSUER MAKES NO REPRESENTATION OR WARRANTY WHATSOEVER CONCERNING THE
USE OF THE PROCEEDS OF THE SALE OF THE BONDS OR THE SUITABILITY OF THE PROJECT
FOR THE PURPOSE FOR WHICH IT IS BEING UNDERTAKEN BY THE COMPANY. The Issuer has
not made any independent investigation as to the feasibility or
creditworthiness of the Company. Any bond purchaser, assignee of the Agreement
or any other party with any interest in this transaction, shall make its own
independent investigation as to the creditworthiness and feasibility of the
Project, independent of any representation or warranties of the Issuer.
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Section 2.2. Representations, Covenants and Warranties of Company.
Company represents, covenants and warrants as follows:
(a) Organization and Power. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware and is authorized to transact business in the State of North
Carolina, and has all requisite power and authority and all necessary licenses
and permits to own and operate its properties and to carry on its business as
now being conducted and as presently proposed to be conducted.
(b) Pending Litigation. There are no proceedings pending, or to the
knowledge of the Company threatened, against or affecting the Company in any
court or before any governmental authority, arbitration board or tribunal which
if adversely determined, would materially and adversely affect the transactions
contemplated by the Company Documents or the Indenture or which, in any way,
would materially and adversely affect the properties, business, prospects,
profits or condition (financial or otherwise) of the Company, or the ability of
the Company to perform its obligations under the Company Documents. The Company
is not in default with respect to an order of any court, governmental
authority, arbitration board or tribunal which default would have a material
adverse effect upon the Company.
(c) Agreements Are Legal and Authorized. The execution and delivery
by the Company of each of the Company Documents and the compliance by the
Company with all of the provisions hereof and thereof (i) are within the
corporate power of the Company, (ii) will not conflict with or result in any
breach of any of the provisions of, or constitute a default under, or (except
as contemplated by the Company Documents and the Reimbursement Agreement)
result in the creation of any lien, charge or encumbrance upon any property of
the Company under the provisions of, any agreement, articles of incorporation,
by-laws or other instrument to which the Company is a party or by which it may
be bound, or any license, judgment, decree, law, statute, order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company or any of its activities or properties, and (iii) have been duly
authorized by all necessary corporate action on the part of the Company.
(d) Governmental Consent. Neither the Company nor any of its business
or properties, nor any relationship between the Company and any other person,
nor any circumstances in connection with the execution, delivery and
performance by the Company of the Company Documents or the offer, issue, sale
or delivery by the Issuer of the Bonds, is such as to require the consent,
approval or authorization of, or the filing, registration or qualification
with, any governmental authority on the part of the Company other than those
already obtained; provided, however, that no representation is made as to any
consents, approvals or authorizations required in connection with the
construction or occupancy of the Project.
(e) No Defaults. No event has occurred and no condition exists with
respect to the Company that would constitute an "event of default' under any of
the Company Documents or which, with the lapse of time or with the giving of
notice or both, would become such an "event of
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default." The Company is not in violation in any material respect of any
agreement, articles of incorporation, by-laws or other instrument to which it
is a party or by which it may be bound.
(f) Compliance with Law. The Company is not in violation in any
material way of any laws, ordinances, governmental rules or regulations to
which it is subject and has not failed to obtain any licenses, permits,
franchises or other governmental authorizations necessary to the operation of
the Project or the ownership of its properties or to the conduct of its
business, which violation or failure to obtain might materially and adversely
affect the properties, business, prospects, profits or conditions (financial or
otherwise) of the Company.
(g) Restrictions on the Company. The Company is not a party to any
contract or agreement that materially and adversely affects the business of the
Company. The Company is not a party to, or bound by any contract or agreement
that restricts the right or ability of the Company to incur or guarantee
indebtedness for borrowed money as contemplated under the Company Documents and
the Reimbursement Agreement.
(h) Inducement. The issuance of the Bonds by the Issuer and the
lending of the proceeds thereof to the Company to enable the Company to
acquire, construct and equip the Project have induced the Company to locate the
Project in the County. The issuance of the Bonds by the Issuer and the lending
of the proceeds thereof to the Company to enable the Company to acquire,
construct and equip the Project shall assist the Company in continuing to
provide continued employment and industry in the County.
(i) Estimated Time of Completion of the Project. The Company
estimates that the Project will be completed and ready for occupancy in
December 1999.
(j) Industrial Project. After the Project is placed in service, the
Company will operate the Project as a "project" within the meaning of the Act
until the Bonds have been paid in full.
(k) Notice. 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 on May 17, 1999.
(l) Compliance With Land Use Regulations. 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.
(m) Application of Proceeds. The Company will cause all of the
proceeds of the Bonds to be applied solely to the payment of Project Costs.
(n) Location of Project. The Project is located entirely within the
geographical boundaries of Guilford County, North Carolina.
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Section 2.3. Tax Covenants. In order to ensure that the interest on the
Bonds shall at all times be excluded from gross income of the Owners thereof
for purposes of Federal income taxation, the Company specifically represents,
warrants and covenants with the Issuer, the Trustee and all Owners of the
Bonds:
(a) Qualifying Costs. Neither the Issuer nor the Company shall cause
any proceeds of the Bonds to be expended, except pursuant to the Indenture and
this Loan Agreement. The Company shall not (i) requisition or otherwise allow
payment out of proceeds of the Bonds (A) if such payment is to be used for the
acquisition of any property (or an interest therein) unless the first use of
such property is pursuant to such acquisition, provided that this clause (A)
shall not apply (1) to any building (and the equipment purchased as a part
thereof, if any,) if the "rehabilitation expenditures," as defined in Section
147(d) of the Code, with respect to the building equal or exceed 15% of the
portion of the cost of acquiring the building (including such equipment)
financed with the proceeds of the Bonds, or (2) to any other property if the
rehabilitation expenditures with respect thereto equal 100% of the cost of
acquiring such property financed with the proceeds of the Bonds; (B) if as a
result of such payment, 25% or more of the proceeds of the Bonds would be
considered as having been used directly or indirectly for the acquisition of
land (or an interest therein); (C) if, as a result of such payment, less than
95% of the net proceeds of the Bonds, expended at the time of such acquisition
would be considered as having been used for costs of the acquisition,
construction, or reconstruction or improvement of land or property of a
character subject to the allowance for depreciation, within the meaning of
Section 144(a)(1)(A) of the Code ("Qualifying Costs"), or (D) if such payment
is used to pay issuance costs (including counsel fees and placement fees) of
the Bonds in excess of an amount equal to 2% of the principal amount of the
Bonds; (ii) take or omit, or permit to be taken or omitted, any other action
with respect to the use of such proceeds the taking or omission of which has or
would result in the loss of the exclusion of interest on the Bonds from gross
income of the owners thereof for federal income tax purposes; or (iii) take or
omit, or permit to be taken or omitted, any other action the taking or omission
of which has or would cause the loss of such exclusion.
(b) Prohibited Uses. Without limiting the generality of the
foregoing, the Issuer and the Company will not used the proceeds of the Bonds,
or permit such proceeds to be used directly or indirectly, for the acquisition
of land (or an interest therein) to be used for farming purposes, or to provide
(i) any facility the primary purpose of which is retail food and beverage
services, automobile sales or service or the provision of recreation or
entertainment, (ii) any airplane, skybox, or other private luxury box, any
health club facility, any facility primarily used for gambling, any store the
principal business of which is the sale of alcoholic beverages for consumption
off premises, any private or commercial golf course, country club, massage
parlor, tennis club, skating facility (including roller skating, skateboard and
ice skating), racquet spots facility (including any hand ball or racquetball
court), hot tub facility, suntan facility, or race track, or (iii) single or
multi-family residences. The Company shall not permit the use of the Project by
any person to whom any part of the aggregate authorized face amount of the
Bonds would be allocated pursuant to Section 144(a)(10) of the Code if the
amount so allocated when increased as provided in Section 144(a)(10) of the
Code would exceed $40,000,000.
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(c) Manufacturing. Not less than 95% of the net proceeds of the Bonds
(consisting of the face amount of the Bonds less any original issue discount
plus any original issue premium, but including issuance costs) shall be used to
provide facilities to be used in the manufacturing or production of tangible
personal property, including facilities that are directly related and ancillary
to such manufacturing facilities and located on the same site as the
manufacturing facilities; provided, however, that not more than twenty-five
percent (25%) of the net proceeds shall be used to provide such ancillary
facilities.
(d) No Other Issues. The Bonds are not being issued as part of an
issue the interest of which is exempt from federal income taxation under any
other provision of law other than Section 144(a) of the Code.
(e) Existing Capital Expenditures. The aggregate amount of capital
expenditures (as defined by Section 1.103-10(b)(2) of the Tax Regulations to
include any expenditure which was or could have been treated as a capital
expenditure under any rule or election under the Code) with respect to
facilities located in the same incorporated municipality as the Project, or
which are contiguous or integrated facilities, the principal user of which was
or is the Company or any Related Person, paid or incurred during the period
beginning three years before the date of issuance of the Bonds, and financed
otherwise than out of the Bond proceeds (not including investment earnings
thereon) and otherwise than out of the proceeds of other outstanding issues to
which Section 144(a)(2) of the Code applies, is $0.
(f) Bonds Outstanding. The aggregate face amount of all prior issues
outstanding as of the date of issuance of the Bonds (whether or not the issuer
of each issue is the same) to which Section 144(a) of the Code or Section
103(b)(6) of the Internal Revenue Code of 1954, as amended applies, the
proceeds of which were or will be used to any extent with respect to facilities
located in the same incorporated municipality as the incorporated municipality
in which the Project is located and the principal user of which is the Company
or a Related Person, is $0. The Company and, at the direction of the Company,
the Issuer, shall file any reports or statements and take any other action as
may be required from time to time with respect to the qualification of the
Bonds as an exempt small issue within the meaning of Section 144(a) of the
Code.
(g) Other Bonds. There are no other bonds to which Section 144(a) of
the Code applies which, together with the Bonds, are to be used with respect to
(a) a single building, (b) an enclosed shopping mall, or (c) a strip of
offices, stores or warehouses, using substantial common facilities with the
Project or a portion thereof.
(h) Land. No portion of the Bond proceeds will be used directly or
indirectly for the acquisition of land or any interest therein to be used for
the purpose of farming and less than 25% of the Bond proceeds are or will be
used directly or indirectly for the acquisition of land to be used for purposes
other than farming.
(i) Commencement of Construction. First Users. The Company hereby
represents that (i) neither "construction" nor "acquisition" or "installation"
of the Project "commenced" prior to
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sixty days before March 24, 1999, within the meaning of the Treasury
Regulations promulgated under the Code; (ii) no person, firm or corporation who
was a "substantial user" of the Project (within the meaning described in such
term under the Code) before the date of issuance of the Bonds and was or will
be a "substantial user" of the Project following its being placed in service,
has received or will receive, directly or indirectly, any proceeds from the
issuance and sale of the Bonds; and (iii) the Project was not first used prior
to the date one (1) year prior to the issuance of the Bonds.
(j) Economic Life of Project. The Company hereby represents that the
weighted average maturity of the Bonds does not exceed 120% of the "average
reasonably expected economic life" of the components comprising the Project,
determined pursuant to Section 147(b) of the Code. The Company agrees that it
will not make any changes in the Project which would, at the time made, cause
120% of the average reasonably expected economic life" of the components of the
Project, determined pursuant to Section 147(b) of the Code, to be less than the
"weighted average maturity" of the Bonds.
(k) Certificate of Information: Internal Revenue Service Form 8038.
The Company hereby represents that the information contained herein and in the
Company's Tax Certificate delivered in connection with the issuance of the
Bonds with respect to the compliance with the requirements of Section 103 and
Sections 141 through 150 of the Code, including the information in Internal
Revenue Service Form 8038 (excluding the issue number and the employer
identification number of the Issuer) filed by the Issuer with respect to the
Bonds and the Project, is true and correct in all material respects.
(l) Use by United States of America or Its Agencies. The Company has
not permitted and shall not permit the Project to be used or occupied other
than as a member of the general public in any manner for compensation by the
United States of America or an agency or instrumentality thereof, including any
entity with statutory authority to borrow from the United States of America (in
any case within the meaning of Section 149(b) of the Code) unless, with respect
to any future use of the Project, the Company shall deliver to the Trustee an
Opinion of Bond Counsel in form and substance satisfactory to the Trustee to
the effect that such will not impair the exclusion of interest on the Bonds
from gross income of the owners thereof for federal income tax purposes.
(m) Other Bonds to Be Issued. The Company agrees that during the
period commencing on the date of the issuance of the Bonds and ending 15 days
thereafter, there shall be issued no "private activity bonds," as defined in
Section 141 of the Code, which are guaranteed or otherwise secured by payments
to be made by the Company or any "related person" (or group of "related
persons") unless the Company shall deliver to the Trustee an Opinion of Bond
Counsel in form and substance satisfactory to the Trustee to the effect that
the issuance of such "private activity bonds" will not impair the exclusion of
interest on the Bonds from gross income of the owners thereof for federal
income tax purposes. The Company represents that except for the Company or any
"related person" (or group of "related persons"), no person has (i) guaranteed,
arranged, participated in, assisted with or paid any portion of the cost of the
issuance of, the Bonds, and (ii) provided any
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property or any franchise, trademark or trade name (within the meaning of
Section 1253 of the Code) which is to be used in connection with the Project.
(n) Limit on Amount of Bonds, Reports. The Company represents that on
the date of the issuance of the Bonds (i) obligations were not assumed,
expenditures were not made and outstanding obligations did not exist that will
cause the "aggregate face amount" of the Bonds as computed under the provisions
of Section (a) and related sections of the Code to exceed $10,000,000, and (ii)
outstanding obligations did not exist that would cause the "aggregate face
amount" of the Bonds allocated to any "test period beneficiary," as defined in
Section 144(a)(10) of the Code, when increased by such obligations as provided
in Section 144(a)(10) of the Code, to exceed $40,000,000. During the three-year
period beginning on the date of the issuance of the Bonds (or, in the case of
clause (ii) below, the date the Project is placed in service, unless the
Company provides to the Trustee an Opinion of Bond Counsel that such
restriction is no longer applicable), the Company shall not make any
expenditure, assume any obligation, permit the use of the Project by any person
or take or permit other action that would cause the "aggregate face amount" of
the Bonds as computed under the provisions of Section 144(a) and related
sections of the Code (i) to exceed $10,000,000 or such other maximum dollar
amount then permitted by the Code, or (ii) allocated to any "test period
beneficiary," when increased by such obligations as provided in Section
144(a)(10) of the Code, to exceed $40,000,000, and shall on the anniversary
date of the issuance of the Bonds until the third anniversary date of the
issuance of the Bonds or the date on which the Project is placed into service,
whichever is later, file a report with the Trustee setting forth all capital
expenditures and bond issues used in calculating such limits under Section
144(a) of the Code since the last report received by the Trustee.
The Company and the Issuer shall file any reports or statements and take
any other action as may be required from time to time with respect to the
qualification of the Bonds as qualified small issue bonds within the meaning of
Section 144(a) of the Code.
(o) Election. The Issuer hereby elects to have the provisions of
Section 144(a)(4) of the Code apply to the Bonds.
(p) Covenant to Maintain Tax Exemption. The Issuer and the Company
hereby covenant and agree on their own behalf that they shall not take any
action, cause any action to be taken, omit to take any action or cause any
omission to occur which would cause the interest on the Bonds to become
includible in the gross income of the recipients thereof for purposes of
federal income taxation.
(q) Covenant Regarding Compliance with Rule 15c2-12. In the event
the interest rate on the Bonds is converted to a Fixed Rate, the Company agrees
to cooperate with the Issuer, the Trustee and the Remarketing Agent, and to do
any and all things necessary, in the event that the Issuer, the Trustee or the
Remarketing Agent, or any of them, are required to comply with Rule l5c2-12, as
amended, of the Securities and Exchange Commission or any comparable rule (the
"Rule"), including, without limitation, the making of the requisite
undertakings called for by paragraph (b)(5) of the Rule and to pay any
reasonable costs and expenses related thereto.
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The Company represents and covenants that the foregoing representations
are true and will remain true and that the foregoing covenants will be performed
and complied with in all material respects.
The Company recognizes that the exclusion from gross income of interest
on the Bonds for purposes of federal income taxation is dependent upon
compliance with the provisions of Section 148 of the Code. The Company
represents to and covenants with the Issuer, the Trustee and each Holder of the
Bonds that:
(1) The Company shall make the determinations and take the
actions hereinafter required by this Section 2.3, on behalf of, and as
agent for, the Issuer and shall provide copies of such determinations to
the Issuer.
(2) The Company shall rebate to the United States, not later
than 60 days after the end of the period ending September 1, 2004, and
not later than 60 days after the end of each five-year period thereafter,
an amount, if any, which ensures that at least 90% of the Rebate Amount
(as hereinafter defined) at the time of such payment will have been paid
to the United States, and within 60 days after the payment or redemption
of all principal of the Bonds, an amount sufficient to pay the remaining
balance of the Rebate Amount, all in the manner and as required by
Section 148 of the Code. As used herein, "Rebate Amount" means the amount
described in Section 148(f)(2) of the Code, computed in accordance with
the provisions of said Section 148(f)(2) and the Regulations now or
hereafter promulgated thereunder.
(3) The Company shall determine or cause to be determined the
Rebate Amount. The Company shall retain records of such determinations
until 6 years after final payment or redemption of principal of the
Bonds.
For purposes of carrying out the provisions of this Section 2.3, the
Company may in good faith conclusively rely upon a written opinion of a rebate
analyst stating in effect that the rebate calculations referred to in the
opinion are in compliance with Section 148(f) of the Code.
The provisions of this Section 2.3 shall survive the retirement and
payment of the Bonds and the discharge of the Issuer's and Company's other
obligations hereunder.
Notwithstanding anything in this Section 2.3 to the contrary, rebate
calculations do not need to be made if the Company provides to the Trustee an
opinion of nationally recognized bond counsel to that effect.
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ARTICLE III
ISSUANCE OF THE BONDS; DISBURSEMENTS
Section 3.1. Agreement to Issue Bonds; Application of Bond Proceeds. In
order to provide funds for the financing of the Project, the Issuer,
concurrently with the execution and delivery of this Agreement, will issue,
sell and deliver to the Original Purchaser thereof the Bonds and deposit the
proceeds thereof with Trustee as follows:
(1) in the Bond Fund, a sum equal to the accrued interest, if
any, paid for the Bonds; and
(2) in the Project Fund, the balance of the proceeds to be
received from such sale.
On the date of execution and delivery hereof, the Company shall deposit
with the Trustee for deposit in the Project Fund the amount described in
Section 6.02 of the Indenture.
Section 3.2. Disbursements from the Project Fund. The Company (a) shall
acquire, construct, install, equip and improve the Project with all reasonable
dispatch, (b) shall pay when due all fees, costs and expenses incurred in
connection with that acquisition, construction, installation, equipping and
improvement from funds made available therefor in accordance with this
Agreement or otherwise, and (c) shall ask, demand, xxx for, xxxx, recover and
receive all those 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, construction,
installation, equipping and improvement of the Project, and (d) shall enforce
the provisions of any contract, agreement, obligation, bond or other
performance security with respect thereto. It is understood that the Project
is that of the Company and any contracts made by the Company with respect
thereto, whether acquisition contracts, construction contracts or otherwise, or
any work to be done by the Company on the Project are made or done by the
Company in its own behalf and not as agent or contractor for the Issuer.
Subject to the provisions of the Reimbursement Agreement and as set forth
below, disbursements from the Project Fund shall be made only to reimburse or
pay the Company, or any person designated by the Company, for the following
Project Costs:
(1) Costs incurred directly or indirectly for or in connection
with the acquisition, development, construction, installation, equipping,
furnishing or improvement of the Project, including, but not limited to,
costs incurred in respect of the Project for preliminary planning and
studies; architectural, legal, engineering, surveying, accounting,
consulting, supervisory and other services; labor, services and
materials; and recording of documents and title work.
(2) Premiums attributable to any surety bonds and insurance
required to be taken out and maintained during the construction period
with respect to the Project.
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(3) Taxes, assessments and other governmental charges in
respect of the Project that may become due and payable during the
construction period.
(4) 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.
(5) 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 Bonds, including, without limitation, the fees and
expenses of the Trustee and any paying agent properly incurred under the
Indenture that may become due and payable during the construction period.
(6) Any other costs, expenses, fees and charges properly
chargeable to the cost of acquisition, construction, installation,
equipment or improvement of the Project.
Any disbursements from the Project Fund for the payment of the Project
Costs shall be made by the Trustee to the Company upon receipt of a requisition
in the form of Exhibit C hereto signed by a Company Representative and approved
by the Bank. No Bond proceeds in the Project Fund shall be disbursed in payment
of costs which constitute costs of issuance of the Bonds in excess of the 2%
limit set forth in Section 147(g) of the Code.
Any moneys in the Project Fund remaining after the Completion Date and
payment, or provision for payment, in full of the Project Costs, at the
direction of the Company Representative with consent of the Bank, promptly
shall be:
(A) used to acquire, construct, install, equip and improve
such additional real or personal property in connection with the Project
as is designated by the Company Representative and the acquisition,
construction, installation, equipment and improvement of which will be
permitted under the Act; or
(B) paid into the Bond Fund; or
(C) returned to the Company (if a minimum of 98% of the
principal amount of the Bonds has been previously disbursed from the
Project Fund).
In all such cases, the remaining Project Fund moneys shall be used or
applied only to the extent that suchuse or application will not, in the opinion
of nationally recognized bond counsel or under ruling of the Internal Revenue
Service, result in the interest on the Bonds becoming included in the gross
income of the Owners for federal income tax purposes.
For purposes of complying with the requirements of this Section, the
Trustee may conclusively rely and shall be protected in acting or refraining
from acting upon the certified requisition of the Company. The Trustee shall
not be bound to make an investigation into the facts
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or matters stated in any requisition of the Company. The Trustee shall not be
responsible for determining whether the funds on hand in the Project Fund are
sufficient to complete the Project. The Trustee shall not be responsible to
collect lien waivers.
Section 3.3. Completion Date. The Company shall notify the Issuer, the
Bank and the Trustee of the Completion Date by a certificate signed by the
Company Representative stating:
(1) the date on which the Project was substantially completed,
(2) that all other facilities necessary in connection with the
Project have been acquired, constructed, installed, equipped and
improved,
(3) that the acquisition, construction, installation,
equipment and improvement of the Project and those other facilities have
been accomplished in such a manner as to conform with all applicable
zoning, planning, building, environmental and other similar governmental
regulations,
(4) that except as provided in subsection (5) of this Section,
all costs of that acquisition, construction, installation, equipment and
improvement then or theretofore due and payable have been paid, and
(5) the amounts which the Trustee shall retain in the Project
Fund for the payment of Project Costs not yet due or for liabilities
which the Company is contesting or which otherwise should be retained and
the reasons such amounts should be retained.
The certificate may state that it is given without prejudice to any
rights against third parties which then exist or subsequently may come into
being. The certificate shall be delivered as promptly as practicable after the
occurrence of the events and conditions referred to in subsections (1) through
(4) of this Section.
Section 3.4. Company Required to Pay in Event Project Fund Insufficient.
In the event the moneys in the Project Fund available for payment of the
Project Costs should not be sufficient to pay such Project Costs in full,
Company agrees to pay that portion of the Project Costs in excess of the moneys
available therefor in the Project Fund. Issuer does not make any warranty,
either express or implied, that the moneys paid into the Project Fund and
available for payment of the Project Costs will be sufficient to pay all of
such Project Costs. Company agrees that if after exhaustion of the moneys in
the Project Fund, Company should pay any portion of the Project Costs pursuant
to the provisions of this Section, Company shall not be entitled to any
reimbursement therefor from Issuer, Trustee or the Owners of any of the Bonds,
nor shall Company be entitled to any diminution of the amounts payable under
Section 4.2 hereof.
Section 3.5. No Warranty by Issuer. THE COMPANY RECOGNIZES THAT THE
ISSUER HAS NOT MADE AN INSPECTION OF THE PROJECT OR OF ANY FIXTURE OR OTHER
ITEM CONSTITUTING A PORTION THEREOF, AND THE ISSUER MAKES NO
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WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED OR OTHERWISE, WITH RESPECT TO
THE SAME OR THE LOCATION, USE, DESCRIPTION, DESIGN, MERCHANTABILITY, FITNESS
FOR USE FOR ANY PARTICULAR PURPOSE, CONDITION OR DURABILITY THEREOF, OR AS TO
THE ISSUER'S OR THE COMPANY'S TITLE THERETO OR OWNERSHIP THEREOF OR OTHERWISE,
IT BEING AGREED THAT ALL RISKS INCIDENT THERETO ARE TO BE BORNE BY THE COMPANY.
IN THE EVENT OF ANY DEFECT OR DEFICIENCY OF ANY NATURE IN THE PROJECT OR ANY
FIXTURE OR OTHER ITEM CONSTITUTING A PORTION THEREOF, WHETHER PATENT OR LATENT,
THE ISSUER SHALL HAVE NO RESPONSIBILITY OR LIABILITY WITH RESPECT THERETO. THE
PROVISIONS OF THIS SECTION 3.5 HAVE BEEN NEGOTIATED AND ARE INTENDED TO BE A
COMPLETE EXCLUSION AND NEGATION OF ANY WARRANTIES OR REPRESENTATIONS BY THE
ISSUER, EXPRESS OR IMPLIED, WITH RESPECT TO THE PROJECT OR ANY FIXTURE OR OTHER
ITEM CONSTITUTING A PORTION THEREOF, WHETHER ARISING PURSUANT TO THE UNIFORM
COMMERCIAL CODE OF THE STATE OF NORTH CAROLINA OR ANOTHER LAW NOW OR HEREAFTER
IN EFFECT OR OTHERWISE.
Section 3.6. Annual Report. Promptly after each June 30 during the time
in which Bonds are outstanding, the Company shall report to the Issuer and the
LGC the principal amount of Bonds outstanding on such June 30.
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ARTICLE IV
LOAN OF PROCEEDS TO COMPANY; LOAN PROVISIONS
Section 4.1. Loan of Proceeds. Issuer agrees, upon the terms and
conditions contained in this Agreement, to lend to Company the proceeds
received by Issuer from the sale of the Bonds. Such proceeds shall be disbursed
to or on behalf of Company as provided in Section 3.2 hereof. The Company's
obligation to repay the loan shall be evidenced by the Note.
Section 4.2. Amounts Payable.
(a) Company hereby covenants and agrees to repay the loan until the
principal of and 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. On any date on which the Purchase Price of,
principal of (whether at maturity or upon redemption or acceleration or
otherwise), or premium or interest on, the Bonds is due, the Company shall pay
in immediately available funds an amount which, together with other moneys
available therefor in the Bond Fund and Purchase Fund, will enable Trustee to
pay the amount payable on such date as Purchase Price, principal, premium, if
any, and interest on the Bonds as provided in the Indenture.
It is understood and agreed that all payments payable under this Section
4.2(a) by Company are assigned by Issuer to Trustee for the benefit of the
Owners of the Bonds. Company assents to such assignment. Issuer hereby directs
Company and Company hereby agrees to pay to Trustee at Trustee's principal
corporate trust office all payments payable by Company pursuant to this Section
4.2(a).
(b) So long as any Bonds remain Outstanding under the Indenture,
Company will also pay all fees and expenses of the Issuer, including reasonable
attorneys' fees, related to the Bonds, the Project, this Agreement or the
Indenture. The Issuer shall be paid directly by the Company.
(c) Company will also pay the reasonable fees and expenses of Trustee
under the Indenture, such reasonable fees and expenses to be paid directly to
the Trustee for the Trustee's own account as and when such reasonable fees and
expenses become due and payable, and any reasonable expenses in connection with
any redemption of the Bonds.
(d) In the event Company should fail to make any of the payments
required in this Section 4.2, the item or installment so in Default shall
continue as an obligation of Company until the amount in Default shall have
been fully paid, and Company agrees to pay the same with interest thereon, to
the extent permitted by law, from the date thereof at the highest rate per
annum payable on the Bonds.
(e) Any drawings made under the Letter of Credit will be used to make
the payments required by Section 4.2(a) above for principal of and interest on
and the Purchase Price of the Bonds
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and the Company will receive credit against the payment obligations in Section
4.2(a) in the amount of the drawings.
Section 4.3. Obligations of Company Hereunder Unconditional; Payments
Assigned. The obligations of Company to make the payments required in Section
4.2(a) through (d) and other sections hereof and to perform and observe the
other agreements contained herein shall be absolute and unconditional and shall
not be subject to any defense or any right of setoff, counterclaim or
recoupment arising out of any breach by Issuer or Trustee of any obligation to
Company, whether hereunder or otherwise, or out of any indebtedness or
liability at any time owing to Company by Issuer or Trustee and until such time
as the principal of, premium, if any, and interest on the Bonds shall have been
fully paid or provision for the payment thereof shall have been made in
accordance with the Indenture, Company (i) will not suspend or discontinue any
payments provided for in Section 4.2(a) through (d) hereof, and (ii) except as
provided in Article IX hereof, will not terminate the Term of Agreement for any
cause, including, without limiting the generality of the foregoing, the
occurrence of any acts or circumstances that may constitute failure of
consideration, eviction or constructive eviction, destruction of or damage to
the Project, the taking by eminent domain of title to or temporary use of any
or all of the Project, commercial frustration of purpose, any change in the tax
or other laws of the United States of America or of the State or any political
subdivision of either thereof or any failure of Issuer or Trustee to perform
and observe any agreement, whether express or implied, or any duty, liability
or obligation arising out of or connected with this Agreement. Nothing
contained in this Section shall be construed to release Issuer from the
performance of any of the agreements on its part herein contained, and in the
event Issuer or Trustee should fail to perform any such agreement on its part,
the Company may, as its sole remedy, institute action for specific performance
against the Issuer or Trustee as the Company may deem necessary to compel
performance so long as such action does not abrogate the obligations of the
Company contained in the first sentence of this Section. The Company may,
however, at Company's own cost and expense and in Company's own name or in the
name of Issuer, upon the consent of the Issuer, prosecute or defend any action
or proceeding or take any other action involving third persons which Company
deems reasonably necessary in order to secure or protect Company's right of
possession, occupancy and use hereunder, and in such event Issuer hereby agrees
to cooperate fully with Company and to take all action necessary to effect the
substitution of Company for Issuer in any such action or proceeding if Company
shall so request.
Section 4.4. Maintenance and Modification of Project by Company. Company
agrees that at all times during the Term of Agreement, Company will, at
Company's 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 that
Company will from time to time make or cause to be made all necessary and
proper repairs, replacements and renewals deemed proper and necessary by it.
Company agrees that it will obtain all permits and approvals required to be
obtained with respect to the Project.
In addition, Company shall have the privilege of remodeling the Project
or making substitutions, additions, modifications and improvements to the
Project from time to time as Company, in its discretion, may deem to be
desirable for Company's use for such purposes as shall
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be permitted by the Act (with the prior written consent of the Bank, if
required by the terms of the Reimbursement Agreement or the Bank Mortgage and
if the Letter of Credit is outstanding), the costs of which remodeling,
substitutions, additions, modifications and improvements shall be paid by
Company, and the same shall be the property of Company and be included under
the terms of this Agreement and the lien of the Indenture as part of the
Project; provided, however, that such remodeling, substitutions, additions,
modifications and improvements shall not in any way damage the Project, and
provided that the Project, as remodeled, improved or altered, upon completion
of such remodeling, substitutions, additions, modifications and improvements
made pursuant to this Article IV shall be of a value not less than the value of
the Project immediately prior to the remodeling or the making of substitutions,
additions, modifications and improvements. Any property for which a
substitution or replacement is made pursuant to this Section 4.4 may be
disposed of by Company in any manner and in the sole discretion of Company.
Company will not permit any mechanic's or other lien to be established or
remain against the Project for labor or materials furnished in connection with
any remodeling, substitutions, additions, modifications, improvements, repairs,
renewals or replacements so made by Company, provided that Company may in good
faith contest any mechanic's or other lien filed or established against the
Project and in such event may permit the items so contested to remain
undischarged and unsatisfied during the period of such contest and any appeal
therefrom unless by nonpayment of any such items the lien of the Indenture will
be materially endangered or the Project or any part thereof will be subject to
loss or forfeiture, in which event Company shall promptly pay and cause to be
satisfied and discharged all such unpaid items.
Section 4.5. Taxes and Governmental and Utility Charges. The Company will
pay or cause to be paid, during the Term of Agreement, as the same respectively
become due, all taxes and governmental charges of any kind whatsoever that may
at any time be lawfully assessed or levied against or with respect to the
Project or any part thereof, including, without limiting the generality of the
foregoing, any taxes levied upon the Project which, if not paid, will become a
charge on the receipts from the Project, or a lien against the Project or any
interest therein or the revenues derived therefrom or hereunder; all utility
and other charges incurred in the operation, maintenance, use, occupancy and
upkeep of the Project and all assessments and charges lawfully made by any
governmental body for public improvements that may be secured by a lien on the
Project, provided that with respect to special assessments or other
governmental charges that may lawfully be paid in installments over a period of
years, Company shall be obligated to pay only such installments as are required
to be paid during the Term of Agreement.
Company may, at Company's expense and in Company's name, in good faith
contest any such taxes, assessments and other charges and, in the event of any
such contest, may permit the taxes, assessments or other charges so contested
to remain unpaid during the period of such contest and any appeal therefrom
unless by nonpayment of any such items the security afforded pursuant to the
terms of the Indenture will be materially endangered or the Project or any
essential part thereof will be subject to loss or forfeiture, in which event
such taxes, assessments or charges shall be paid forthwith. In the event that
Company shall fail to pay any of the foregoing items required by this Section
to be paid by Company, the Issuer, Bank or Trustee may (but shall be under no
obligation to) pay the same, and any amounts so advanced therefor by Issuer,
Bank or Trustee shall become an
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additional obligation of Company to the party making the advancement, which
amounts, together with interest thereon at the Reference Rate plus 2% per
annum, Company agrees to pay.
On request, the Company shall provide proof of payment of any such
charges during the term of this Agreement. Company shall maintain a set of
plans and specifications at the Project site.
Section 4.6. Insurance. Company shall maintain adequate insurance for
the Project. Adequate insurance shall be deemed to be the insurance required
by the Initial Bank and if none is required by the Initial Bank, insurance
ordinarily obtained and maintained by companies engaged in similar operations
as those conducted at the Project site.
Section 4.7. Financing Statements. Company shall file or cause to be
filed at its expense any financing statements, continuation statements or other
documents whenever necessary or advisable to perfect or maintain the security
interests granted under the Indenture.
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ARTICLE V
DAMAGE, DESTRUCTION AND CONDEMNATION;
USE OF NET PROCEEDS
Section 5.1. Damage, Destruction and Condemnation. If prior to full
payment of the Bonds (or provisions for payment thereof having been made in
accordance with the provisions of the Indenture) (i) the Project or any portion
thereof is destroyed (in whole or in part) or is damaged by fire or other
casualty or (ii) title to or any interest in, or the temporary use of, the
Project or any part thereof shall be taken under the exercise of the power of
eminent domain by any governmental body or by any person, firm or corporation
acting under governmental authority, Company shall be obligated to continue to
pay the amounts specified in Section 4.2 hereof.
Section 5.2. Application of Net Proceeds. Issuer, Trustee and Company
will cause the Net Proceeds of any insurance proceeds or condemnation award
resulting from any event described in Section 5.1 hereof to be applied as
provided in the Bank Mortgage so long as the Letter of Credit is in effect and
the events described in Section 10.11 hereof have not occurred. If the Letter
of Credit is not in effect or if an event described in Section 10.11 hereof has
occurred, all Net Proceeds (but only if the Net Proceeds exceed $100,000) shall
be deposited in a separate trust fund and applied in one or more of the
following ways as shall be elected by Company in a written notice to Issuer and
Trustee:
(a) To the prompt repair, restoration, modification or improvement of
the Project by Company, and Issuer will authorize and direct Trustee to make
payments from such separate fund for such purposes or to reimburse Company for
costs paid by it in connection therewith upon receipt of a requisition
acceptable to Trustee signed by a Company Representative stating with respect
to each payment to be made: (i) the requisition number, (ii) the name and
address of the person, firm or corporation to whom payment is due, (iii) the
amount to be paid and (iv) that each obligation mentioned therein has been
properly incurred, is a proper charge against the separate trust fund and has
not been the basis of any previous withdrawal. Any balance of the Net Proceeds
remaining after such work has been completed shall be (i) transferred to the
Bond Fund to be applied to the payment of principal of and premium, if any, and
interest on the Bonds, or if the Bonds have been fully paid (or provision for
payment thereof has been made in accordance with the provisions of the
Indenture), any balance remaining in such separate trust fund shall be paid to
Company; or (ii) transferred to the Company if the Company provides to the
Trustee an appraisal to the effect that the repair and restoration of the
Project has resulted in the Project having at least equal value as that
existing prior to the damage, destruction or condemnation.
(b) To optional redemption of the Bonds on the next succeeding
redemption date as specified in a written notice by Company to Trustee,
provided that no part of the Net Proceeds may be applied for such redemption
unless (i) all of the Bonds are to be redeemed in accordance with the Indenture
upon prepayment of the amounts payable hereunder, or (ii) in the event that
less than all of the Bonds are to be redeemed, Company shall furnish to Issuer
and Trustee a certificate of Company Representative acceptable to Issuer and
Trustee stating that (A) the property forming the
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part of the Project that was damaged or destroyed by such casualty or was taken
by such condemnation proceedings is not essential to the use or possession of
the Project by Company or (B) the Project has been repaired, restored, modified
or improved to operate as designed. After the foregoing, if the Bonds are no
longer Outstanding, any remaining Net Proceeds shall be paid to the Company.
Section 5.3. Insufficiency of Net Proceeds. Unless the Company elects to
redeem the Bonds under Section 5.2(b) above, if the Net Proceeds are
insufficient to pay in full the cost of any repair, restoration, modification
or improvement referred to in Section 5.2(a) hereof, Company will nonetheless
complete the work and will pay any cost in excess of the amount of the Net
Proceeds held by Trustee. Company agrees that if by reason of any such
insufficiency of the Net Proceeds, Company shall make any payments pursuant to
the provisions of this Section, Company shall not be entitled to any
reimbursement therefor from Issuer, Trustee or the Owners of any of the Bonds,
nor shall Company be entitled to any diminution of the amounts payable under
Section 4.2 hereof.
Section 5.4. Cooperation of Trustee. Trustee shall cooperate fully with
Company at the expense of Company in filing any proof of loss with respect to
any insurance policy covering the casualties described in Section 5.1 hereof
and in the prosecution or defense of any prospective or pending condemnation
proceeding with respect to the Project or any part thereof or any property of
Company in connection with which the Project is used and will, to the extent it
may lawfully do so, permit Company to litigate in any proceeding resulting
therefrom in the name and on behalf of Trustee. In no event will Trustee
voluntarily settle, or consent to the settlement of, any proceeding arising out
of any insurance claim or any prospective or pending condemnation proceeding
with respect to the Project or any part thereof without the written consent of
Company Representative and without the prior written consent of the Bank (if
such consent is required by the terms of the Reimbursement Agreement and the
Letter of Credit is in effect).
Section 5.5. Condemnation of Property Owned by Company Not in Project.
Company shall be entitled to the Net Proceeds of any condemnation award or
portion thereof made for destruction of, damage to or taking of its property
not included in the Project.
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ARTICLE VI
SPECIAL COVENANTS
Section 6.1. No Warranty of Condition or Suitability by Issuer. Issuer
makes no warranty, either express or implied, as to the Project or the
condition thereof, or that the Project will be suitable for the purposes or
needs of Company.
Section 6.2. Access to the Project. Company agrees that Issuer, Trustee,
and their duly authorized agents shall have such rights of access to the
Project as may be reasonably necessary for the proper maintenance of the
Project in the event of failure by Company to perform its obligations under
Section 4.4 hereof. Issuer, Trustee, and their duly authorized agents shall
also be permitted, at all reasonable times and upon reasonable notice to the
Company, to examine the books and records of Company and plans and
specifications with respect to the Project.
Section 6.3. Further Assurances and Corrective Instruments. Issuer and
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
correcting any inadequate or incorrect description of the Project or for
carrying out the expressed intention of this Agreement.
Section 6.4. Issuer and Company Representatives. Whenever under the
provisions of this Agreement the approval of Issuer or Company is required to
take some action at the request of the other, such approval or such request
shall be given for Issuer by an Authorized Representative and for Company by a
Company Representative. The Trustee and any party hereto shall be authorized to
act on any such approval or request.
Section 6.5. Maintenance of Letter of Credit. The Company may not take
any action, or omit to take -any action which results in the cancellation of
the Letter of Credit prior to its Stated Expiration Date without first
obtaining a Substitute Letter of Credit, except as provided in the Indenture
with respect to the conversion of the Bonds to a Fixed Rate Mode so long as
following such conversion, the Bonds have an Investment Grade Rating. The
Company may not reduce the amount of the Letter of Credit or amend the Letter
of Credit, except pursuant to its terms.
Section 6.6. Acts With Respect to Bonds. The Company hereby
covenants to take any and all actions required of it pursuant to the terms of
the Indenture to provide for the purchase, tender and redemption of the Bonds
as set forth in the Indenture.
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ARTICLE VII
ASSIGNMENT, SELLING, LEASING,
INDEMNIFICATION AND REDEMPTION
Section 7.1. Assignment, Selling and Leasing, Merger or Sale of Assets.
(a) This Agreement may be assigned and the Project leased or sold, as a whole
or in part, by Company without obtaining the consent of either Issuer or
Trustee subject, however, (1) to the prior written consent of the Bank (if
required by the terms of the Reimbursement Agreement or the Bank Mortgage) so
long as the Letter of Credit is outstanding and no event described in Section
10.11 has occurred, and (2) to each of the following conditions:
(i) The assignee, purchaser or lessee of the Project shall
acquire the Project subject to the obligations of Company hereunder to
the extent of the interest assigned or leased.
(ii) Company shall, within thirty (30) days, furnish or cause
to be furnished to Issuer and Trustee a true and complete copy of each
assignment, assumption of obligation, contract of sale or lease, as the
case may be.
(iii) Company shall deliver to Issuer, Trustee and Bank an
opinion of nationally recognized bond counsel to the effect that such
sale, assignment, or leasing will not adversely affect the tax-exempt
status of interest on the Bonds.
(iv) Company shall deliver notice to Issuer, Trustee and the
LGC of the identity of any purchaser, assignee or lessee.
Upon any such assignment, sale or lease, the Company shall not be
released of its obligations hereunder without the written consent of the Bank
so long as the Letter of Credit is outstanding and no event described in
Section 10.11 has occurred.
(b) Company agrees that so long as any Bonds remain outstanding it
shall maintain its existence as a corporation organized under the laws of the
State of Delaware and agrees that it shall not merge or consolidate with any
other entity and shall not transfer or convey all or substantially all of its
property, assets and licenses; provided, however, that Company may, without
violating any provision hereof, consolidate with or merge into another domestic
entity (i.e., an entity existing under the laws of one of the states of the
United States of America or the District of Columbia) or permit one or more
other domestic entities to consolidate with or merge into it, or transfer all
or substantially all of its assets to another domestic entity, but only on the
condition that:
(i) the assignee entity or the entity resulting from or
surviving such merger (if other than Company) or consolidation or the
entity to which such transfer is made expressly assumes in writing and
agrees to perform all of the respective obligations of the Company and
under the Bank documents;
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(ii) in connection with any such consolidation, merger or
transfer, if a Letter of Credit is in effect, the Bank shall expressly
ratify and affirm that the Letter of Credit remains in full force and
effect and if no Letter of Credit is then in effect, the Rating Agency
then rating the Bonds shall expressly affirm that the rating assigned to
the Bonds will not fall below an Investment Grade Rating as a result of
such consolidation, merger or transfer;
(iii) the surviving entity shall preserve and keep in full force
and effect all licenses and permits necessary to the proper conduct of
its business;
(iv) Company shall obtain and deliver to the Issuer, the
Trustee, and the Bank an Opinion of nationally recognized bond counsel to
the effect that such consolidation, merger or transfer will not adversely
affect the tax-exempt status of interest on the Bonds; and
(v) the surviving entity shall notify the Issuer and the LGC
of its identity and address for notices.
Section 7.2. Release and Indemnification Covenants.
(a) Company shall and hereby agrees to indemnify and save the Issuer,
the LGC and Trustee and their respective officers, commissioners, directors,
members, officials, agents and employees harmless against and from all claims
by or on behalf of any person, firm, corporation or other legal entity arising
from the conduct of management of, or from any work or thing done on, the
Project during the Term of Agreement, including without limitation, (i) any
condition of the Project, (ii) any breach or default on the part of Company in
the performance of any of its obligations under this Agreement, (iii) any act
or negligence of Company or of any of its agents, contractors, servants,
employees or licensees or (iv) any act or negligence of any assignee or lessee
of Company, or of any agents, contractors, servants, employees or licensees of
any assignee or lessee of Company, unless such assignee has assumed the
Company's obligations hereunder in whole pursuant to Section 7.1. Company shall
indemnify and save Issuer and Trustee harmless from any such claim arising as
aforesaid, or in connection with any action or proceeding brought thereon, and
upon notice from Issuer or Trustee, Company shall defend the indemnified party
in any such action or proceeding.
(b) Notwithstanding the fact that it is the intention of the parties
hereto that Issuer shall not incur any pecuniary liability by reason of the
terms of this Agreement or the undertakings required of Issuer or Trustee
hereunder, by reason of the issuance of the Bonds, by reason of the execution
of the Indenture or by reason of the performance of any act requested of Issuer
or Trustee by Company, including all claims, liabilities or losses arising in
connection with the violation of any statutes or regulations pertaining to the
foregoing (excluding those arising from the gross negligence or willful
misconduct of the Issuer or Trustee), nevertheless, if Issuer or Trustee should
incur any such pecuniary liability, then in such event Company shall indemnify
and hold such indemnified party harmless against all claims by or on behalf of
any person, firm or corporation or other legal entity arising out of the same
and all costs and expenses incurred in connection with any such claims or in
connection with any action or proceeding brought thereon, and upon notice from
the indemnified party, Company shall defend such indemnified party in any such
action or proceeding.
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(c) This Section 7.2 shall survive payment and discharge of the
Bonds.
Section 7.3. Assignment of Interest in this Agreement by Issuer. Any
assignment or pledge by Issuer to Trustee pursuant to the Indenture of any
interest in this Agreement or any monies receivable under this Agreement shall
be subject to this Agreement.
Section 7.4. Redemption of Bonds. Company shall have and is hereby
granted the option to prepay from time to time the amounts payable under this
Agreement in sums sufficient to redeem or purchase or to pay or cause to be
paid all or part of the Bonds and interest thereon in accordance with the
provisions of the Indenture. In order to exercise this option, the Company
shall deliver to the Trustee notice by facsimile transmission of its election
to so redeem, at least thirty-five (35) days prior to the proposed redemption
date. Consent of the Bank to such prepayment is required as provided in
Section 3.01 of the Indenture. Issuer and Trustee, at the request of Company,
shall forthwith take all steps (other than the payment of the money required
for such redemption) necessary under the applicable redemption provisions of
the Indenture to effect redemption of all or part of the then Outstanding
Bonds, as may be specified by Company, on the date established for such
redemption.
Section 7.5. Installation of Company's Own Property. The Company and
tenants thereof may, from time to time in their sole discretion and at their
own expense, install machinery, equipment and other tangible property in and on
the Project. All such machinery, equipment and other tangible property shall
remain separate and apart from the Project and constitute property of the
Company or tenant, as applicable, in which Issuer and Trustee shall have no
interest unless such machinery, equipment and other tangible property is
necessary to the operation of the Project.
Section 7.6. References to Bonds Ineffective After Bonds Paid. Upon
payment in full of the Bonds (or provision for payment thereof having been made
in accordance with the provisions of the Indenture), all references in this
Agreement to the Bonds and Trustee shall be ineffective, and neither Trustee
nor the holders of any of the Bonds shall thereafter have any rights hereunder,
saving and excepting those that shall have theretofore vested or would affect
the tax-exempt status of the Bonds.
Section 7.7. Issuer to Grant Security Interest to Trustee. The parties
hereto agree that pursuant to the Indenture, Issuer shall assign to Trustee in
order to secure payment of the Bonds all I of Issuer's right, title and
interest in this Agreement except Issuer's rights under Sections 4.2(b), 7.2,
8.4 and 10.10 hereof and any rights to receive notices or reports..
Section 7.8. Certain References Ineffective After Letter of Credit
Termination Date. From and after the Letter of Credit Termination Date, upon
receipt by the Trustee of a certificate from the Bank stating that all amounts
payable to the Bank have been paid in full, and upon surrender of the Letter of
Credit to the Bank, all references to the Bank shall be ineffective, unless a
Substitute Letter of Credit or Replacement Letter of Credit has been provided
to the Trustee.
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ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
Section 8. Events of Default Defined. The following shall be "Events of
Default" under this Agreement and the term "Event of Default" and "Default"
shall mean, whenever they are used in this Agreement, any one or more of the
following events:
(a) failure by Company to pay the amounts required to be paid under
Section 4.2(a) hereof at the times specified therein;
(b) failure by Company to observe and perform any covenant, condition
or agreement on its part to be observed or performed, other than as referred to
in Section 8.1 (a), for a period of thirty (30) days after written notice
specifying such failure and requesting that it be remedied shall have been
given to Company (with a copy to the Bank, so long as the Letter of Credit is
outstanding) by Issuer or Trustee, unless Issuer and Trustee shall agree in
writing to an extension of such time prior to its expiration, provided,
however, if the failure stated in the notice cannot be corrected within the
applicable period, Issuer and Trustee will not unreasonably withhold their
consent to an extension of such time if corrective action is instituted by
Company within the applicable period and is being diligently pursued until the
Default is corrected;
(c) the filing of a petition in bankruptcy by Company under the
United States Bankruptcy Code, the filing of a petition against Company under
the United States Bankruptcy Code which petition is not vacated within sixty
(60) days after the filing thereof, failure by Company within ninety (90) days
to have discharged any execution, garnishment or attachment of such consequence
as would impair the ability of Company to carry on its operations at the
Project, assignment by Company for the benefit of creditors, the entry by
Company into an agreement of composition with creditors, or the failure
generally by Company to pay its debts as they become due; or
(d) the occurrence of an Event of Default under the Indenture.
The provisions of subsection (b) of this Section are subject to the following
limitation: if by reason of force majeure Company is unable in whole or in part
to carry out any of its agreements contained herein (other than its obligations
contained in Article IV hereof), Company shall not be deemed in Default during
the continuance of such inability. The term "force majeure" as used herein
shall mean, without limitation, the following: acts of God; strikes, 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 of any of their departments, agencies or officials, or of any civil or
military authority; insurrections; riots; landslides; earthquakes; fires;
storms; droughts; floods; explosions; breakage or accident to machinery,
transmission pipes or canals; and any other cause or event not reasonably
within the control of Company. Company agrees, however, to remedy with all
reasonable dispatch the cause or causes preventing Company from carrying out
its agreement.
Section 8.2. Remedies on Default.
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(a) Whenever any Event of Default referred to in Section 8.1 hereof
shall have happened and be continuing, and the Trustee has accelerated the
Bonds pursuant to the provisions of the Indenture, Trustee (or Issuer with the
written consent of Trustee), may by written notice to Company, with notice of
same given to Issuer and the LGC, declare an amount equal to all amounts then
due and payable on the Bonds, whether by acceleration of maturity (as provided
in the Indenture) or otherwise, to be immediately due and payable, whereupon
the same shall become immediately due and payable, and exercise the remedies
provided in the Indenture.
In addition, the Trustee (or Issuer with the written consent of the
Trustee) may take one or any more of the following remedial steps:
(i) Have reasonable access to and inspect, examine and
make copies of the books and records and any and all accounts,
data and income tax and other tax returns of Company during
regular business hours of Company if reasonably necessary in the
opinion of Trustee; or
(ii) Take whatever action at law or in equity may appear
necessary or desirable to collect the amounts then due and
thereafter to become due, or to enforce performance and
observance of any obligation, agreement or covenant of Company
under this Agreement.
(b) Whenever any Event of Default referred to in Section 8.1 hereof
shall have happened and be continuing, and the Trustee has not accelerated the
Bonds pursuant to the provisions of the Indenture, the Trustee (or Issuer with
the written consent of Trustee) may take one or more of the remedial steps
outlined in Section 8.2(a)(i) and (ii) above.
(c) The Issuer, without the consent of the Trustee, may enforce its
rights hereunder and under the Indenture to receive payment of fees and
indemnification and to bring actions and proceedings therefor, independent of
any action by the Trustee.
Any amounts collected pursuant to action taken under this Section 8.2,
excluding amounts collected by the Issuer pursuant to subsection (c) of this
Section 8.2, shall be paid into the Bond Fund and applied in accordance with
the provisions of the Indenture.
Section 8.3. No Remedy Exclusive. No remedy herein conferred upon or
reserved to 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. No delay or omission to exercise any right or
power accruing upon any Default shall impair any such right or power or shall
be construed to be a waiver thereof, but any such right or power may be
exercised from time to time and as often as may be deemed expedient. In order
to entitle Issuer to exercise any remedy reserved to it in this Article, it
shall not be necessary to give any notice, other than such notice as may be
required in this Article. Such rights and remedies as are given Issuer
hereunder shall also extend to Trustee, and
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Trustee and the holders of the Bonds, subject to the provisions of the
Indenture, shall be entitled to the benefit of all covenants and agreements
herein contained.
Section 8.4. Agreement to Pay Attorneys' Fees and Expenses. In the event
Company should Default under any of the provisions of this Agreement and Issuer
or Trustee should employ attorneys or incur other expenses for the collection
of payments required hereunder or the enforcement of performance or observance
of any obligation or agreement on the part of Company herein contained, Company
agrees that it will on demand therefor pay to Issuer and Trustee the reasonable
fees of such attorneys and such other expenses so incurred by Issuer or
Trustee.
Section 8.5. No Additional Waiver Implied by One Waiver. In the event any
agreement contained in this Agreement should be breached by either party and
thereafter waived by the other party, such waiver shall be limited to the
particular breach so waived and shall not be deemed to waive any other breach
hereunder.
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ARTICLE IX
PREPAYMENT OF LOAN
Section 9.1. Option to Terminate At Any Time. With the prior written
consent of the Bank, Company shall have, and is hereby granted, the option to
terminate the Term of Agreement at any time prior to full payment of the Bonds
(or provisions for payment thereof having been made in accordance with the
provisions of the Indenture) (i) by paying to Trustee Eligible Funds (or other
funds if the Bonds are not secured by a Letter of Credit) in an amount which,
when added to the amount already on deposit in the Bond Fund, will be
sufficient to pay, retire and redeem all the Outstanding Bonds in accordance
with the provisions of the Indenture (including, without limiting the
generality of the foregoing, principal of and interest to maturity or
applicable redemption date, as the case may be, and premium, if any, expenses
of redemption and Trustee's fees and expenses), and, in case of redemption, by
making arrangements satisfactory to Trustee for the giving of the required
notice of redemption and (ii) by giving Issuer notice in writing of such
termination, and such termination shall forthwith become effective.
Section 9.2. Option to Prepay Loan in Part. The Company, with the prior
written consent of the Bank, may, pursuant to this Agreement make partial
prepayments of the loan in Eligible Funds (or other funds if the Bonds are not
secured by a Letter of Credit) to the same extent, on such dates, at such
prices, and under such terms and conditions as partial prepayments of the Bonds
may be made pursuant to the terms of the Indenture.
Section 9.3. Relative Position of Options and Indenture. The options
respectively granted to Company in this Article shall be and remain prior and
superior to the Indenture and may be exercised whether or not Company is in
Default hereunder.
Section 9.4. Mandatory Prepayments. Company shall prepay the loan to the
full extent of any mandatory redemption required under Section 3.02 of the
Indenture.
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ARTICLE X
MISCELLANEOUS
Section 10.1. Term of Agreement. This Agreement shall remain in full
force and effect from the date hereof to and including September 1, 2019 or
until such time as all of the Bonds and the fees and expenses of Issuer and
Trustee shall have been fully paid or provision made for such payments,
whichever is later; provided that this Agreement may be terminated prior to
such date if Company shall exercise its option to prepay the amounts payable
hereunder pursuant to this Agreement.
Section 10.2. Notices. All notices, certificates or other communications
hereunder shall be sufficiently given and shall be deemed given when delivered
or mailed by registered or certified mail, postage prepaid, addressed as
provided in Section 14.07 of the Indenture.
A duplicate copy of each notice, certificate or other communication given
hereunder by Issuer or Company shall also be given to Trustee, Bank and
Original Purchaser. Issuer, Company, Bank, Trustee and Original Purchaser may,
by written notice given hereunder, designate any further or different addresses
to which subsequent notices, certificates or other communications shall be
sent.
Section 10.3. Binding Effect. This Agreement shall inure to the benefit
of and shall be binding upon Issuer, Company, Trustee, the Owners and their
respective successors and assigns, subject, however, to the limitations
contained in Section 2.2(b), 7.1 and 7.3 hereof
Section 10.4. Severability. In the event any provision of this Agreement
shall be held invalid or unenforceable by any court of competent jurisdiction,
such holding shall not invalidate or render unenforceable any other provision
hereof.
Section 10.5. Amounts Remaining in Bond Fund. It is agreed by the
parties hereto that any amounts remaining in the Bond Fund upon expiration or
earlier termination of the Term of 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), the fees and
expenses of Trustee and any Paying Agents in accordance with the Indenture, the
fees of the Issuer and any amounts owing to the Bank under the Reimbursement
Agreement shall be paid by the Trustee to the Company.
Section 10.6. Amendments, Changes and Modifications. Subsequent to the
issuance of Bonds and prior to their payment in full (or provision for the
payment thereof having been made in accordance with the provisions of the
Indenture), and except as otherwise herein expressly provided, this Agreement
may not be effectively amended, changed, modified, altered or terminated
without the written consent of Trustee, in accordance with the provisions of
Article XII of the indenture.
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Section 10.7. Execution in Counterparts. This Agreement may be
simultaneously executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same instrument.
Section 10.8. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State.
Section 10.9. Captions. The captions and headings in this Agreement are
for convenience only and in no way define, limit or describe the scope or
intent of any provisions or Sections of this Agreement.
Section 10.10. Limitation of Issuer's Liability. Anything contained in
this Loan Agreement to the contrary notwithstanding, any obligation the Issuer
may incur in connection with the undertaking of the Project for the payment of
money shall not be deemed to constitute a debt or general obligation of the
Issuer, the State or any political subdivision thereof, but shall be payable
solely from the revenues and receipts derived by it from this Loan Agreement
and the Note, including payments received under the Note, and from payments
made pursuant to the Letter of Credit. No provision in this Loan Agreement or
any obligation herein imposed upon the Issuer, or the breach thereof, shall
constitute or give rise to or impose upon the Issuer, the State or any
political subdivision thereof a pecuniary liability or a charge upon its
general credit or taxing powers. No officer or member of the Issuer shall be
personally liable on this Loan Agreement. THE BONDS AND THE INTEREST THEREON
AND REDEMPTION PREMIUM, IF ANY, SHALL NOT BE DEEMED TO CONSTITUTE A DEBT OR A
PLEDGE OF THE FAITH AND CREDIT OF THE STATE OF NORTH CAROLINA OR ANY POLITICAL
SUBDIVISION THEREOF, INCLUDING, WITHOUT LIMITATION, THE ISSUER AND GUILFORD
COUNTY, NORTH CAROLINA. NEITHER THE STATE OF NORTH CAROLINA NOR ANY POLITICAL
SUBDIVISION THEREOF, INCLUDING, WITHOUT LIMITATION, THE ISSUER AND GUILFORD
COUNTY, NORTH CAROLINA, SHALL BE OBLIGATED TO PAY THE PRINCIPAL OF OR PREMIUM,
IF ANY, OR INTEREST ON THE BONDS OR OTHER COSTS INCIDENT THERETO EXCEPT FROM
THE REVENUES ASSIGNED AND PLEDGED THEREFOR, AND NEITHER THE FAITH AND CREDIT
NOR THE TAXING POWER OF THE STATE OF NORTH CAROLINA OR ANY POLITICAL
SUBDIVISION THEREOF, INCLUDING, WITHOUT LIMITATION, THE ISSUER AND GUILFORD
COUNTY, IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR PREMIUM, IF ANY, OR
INTEREST ON THE BONDS OR OTHER COSTS INCIDENT THERETO. THE ISSUER HAS NO TAXING
POWER.
Section 10.11. Certain Events with respect to Bank. For purposes of
Sections 5.2 and 7.1 hereof, the events described herein are as follows: (i) an
Act of Bankruptcy (as defined in the Indenture) with respect to the Bank, or
(ii) the dishonor by the Bank of a conforming draw on the Letter of Credit. Any
other reference herein to required consent of the Bank shall not apply if the
Letter of Credit is no longer in effect and no amount is owing to the Bank
under the Reimbursement Agreement.
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Section 10.12. No Benefits to Outside Parties. Nothing in this Loan
Agreement, express or implied, is intended or shall be construed to confer upon
or to give to any person or corporation, other than the parties hereto, the
Owners of the Bonds issued under the Indenture and the Bank, any right, remedy
or claim under or by reason of this Loan Agreement or covenant, condition or
stipulation thereof; and the covenants, stipulations and agreements in this
Loan Agreement contained are and shall be for the sole and exclusive benefit of
the parties hereto, their successors and assigns, the Owners of the Bonds and
the Bank.
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IN WITNESS WHEREOF, Issuer has caused this Agreement to be executed in
its name, and Company has caused this Agreement to be executed in its name, as
of the date first above written.
THE GUILFORD COUNTY INDUSTRIAL
FACILITIES AND POLLUTION CONTROL
FINANCING AUTHORITY
(SEAL)
By /S/
-------------------------------------------
Chairman
Attest:
/S/
----------------------------------
Secretary
CRESCENT SLEEP PRODUCTS COMPANY
By /S/
-------------------------------------------
Vice President
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EXHIBIT A
PROJECT DESCRIPTION
The Project consists of the acquisition, construction and equipping of a
133,000 square foot facility on 14.8 acres of land in Guilford County to be
owned and operated by the Company for the purpose of manufacturing mattresses.
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41
EXHIBIT B
FORM OF PROMISSORY NOTE
AFTER THE ENDORSEMENT AS HEREON PROVIDED AND PLEDGE OF THIS NOTE, THIS NOTE MAY
NOT BE ASSIGNED, PLEDGED, ENDORSED OR OTHERWISE TRANSFERRED EXCEPT TO AN
ASSIGNEE OR SUCCESSOR OF THE TRUSTEE IN ACCORDANCE WITH THE INDENTURE, BOTH
REFERRED TO HEREIN.
$5,900,000 September _, 1999
PROMISSORY NOTE
FOR VALUE RECEIVED, Crescent Sleep Products Company, a corporation duly
formed and existing under the laws of the State of Delaware (the "Company"), by
this promissory note does hereby promise to pay to the order of The Guilford
County Industrial Facilities and Pollution Control Financing Authority (the
"Issuer") the principal sum of Five Million Nine Hundred Thousand Dollars
($5,900,000), together with interest on the unpaid principal amount hereof,
from the Issue Date (as defined in the Indenture referenced below) until paid
in full, at a rate per annum equal to the rate of interest borne by the Bonds
(as hereinafter defined), premium, if any, on the Bonds and Purchase Price (as
defined in the Indenture). All such payments of principal, interest, premium
and Purchase Price shall be made in funds which shall be immediately available
on the due date of such payments and in lawful money of the United States of
America at the principal corporate trust office of U.S. Bank Trust National
Association, St. Xxxx, Minnesota, or its successor as trustee under the
Indenture.
The principal amount, interest, premium, if any, and Purchase Price shall
be payable on the dates and in the amount, that principal of, interest on the
Bonds, premium, if any, and Purchase Price are payable, subject to prepayment
as hereinafter provided.
The Company shall receive a credit for the amounts due and payable
hereunder to the extent that payments are made by the Bank (as defined in the
Indenture) pursuant to drawings under the Letter of Credit (as defined in the
Indenture).
This promissory note is the "Note" referred to in the Loan Agreement,
dated as of September 1, 1999 (the "Agreement") between the Company and the
Issuer, the terms, conditions and provisions of which are hereby incorporated
by reference.
This Note and the payments required to be made hereunder are irrevocably
assigned, without recourse, representation or warranty, and pledged to U.S.
Bank Trust National Association under the Indenture of Trust, dated as of
September 1, 1999 (the "Indenture"), by and between the Issuer and U.S. Bank
Trust National Association, as Trustee, and such payments will be made directly
to the Trustee for the account of the Issuer pursuant to such assignment. Such
assignment is made as security for the payment of $5,900,000 in aggregate
principal amount of Industrial Development
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Revenue Bonds (Crescent Sleep Products Company Project) Series 1999 (the
"Bonds"), issued by the Issuer pursuant to the Indenture. All the terms,
conditions and provisions of the Indenture and the Bonds are hereby
incorporated as a part of this Note.
The Company may at its option, and may under certain circumstances be
required to, prepay together with accrued interest, all or any part of the
amount due on this Note, as provided in the Agreement.
Presentation, demand, protest and notice of dishonor are hereby expressly
waived by the Company.
The Company hereby promises to pay reasonable costs of collection and
reasonable attorneys' fees in case of default on this Note.
This Note shall be governed by, and construed in accordance with, the
laws of the State of North Carolina.
CRESCENT SLEEP PRODUCTS COMPANY
[SEAL] By:
--------------------------------
Name:
--------------------------------
Title:
--------------------------------
ATTEST:
--------------------------------
Secretary
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ENDORSEMENT
Pay to the order of U.S. Bank Trust National Association, without
recourse, as Trustee under the Indenture referred to in the within mentioned
Agreement, as security for such Bonds issued under such Indenture. This
endorsement is given without any warranty as to the authority or genuineness of
the signature of the maker of the Note.
THE GUILFORD COUNTY INDUSTRIAL
FACILITIES AND POLLUTION CONTROL
FINANCING AUTHORITY
By:
--------------------------------
Name:
---------------------------------
Title:
---------------------------------
Dated:
---------------
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44
EXHIBIT C
$_______________ No.____________
REQUISITION AND CERTIFICATE
____________, 19__
U.S. Bank Trust National Association
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attention: Corporate Trust Department
Ladies and Gentlemen:
On behalf of Crescent Sleep Products Company (the "Company"), I hereby
requisition from the funds representing the proceeds of the sale of the
Industrial Development Revenue Bonds (Crescent Sleep Products Company Project)
Series 1999, issued by The Guilford County Industrial Facilities and Pollution
Control Financing Authority (the "Issuer"), and dated September 17, 1999 (the
"Bonds"), which funds are held by you in The Guilford County Industrial
Facilities and Pollution Control Financing Authority Industrial Development
Revenue Bonds (Crescent Sleep Products Company Project) Series 1999 Project
Fund in accordance with the Trust Indenture, dated as of September 1, 1999 (the
"Indenture"), from the Issuer to you the sum of $_____________ to be paid to
the person or persons indicated below:
(1) $_____________ for___________________________________
_________________________________________________________________
____________ payable to _______________________________, and
(2) $_____________ for___________________________________
_________________________________________________________________
____________ payable to__________________________________________
I hereby certify that (a) the obligation to make such payment was
incurred by the Issuer or the Company in connection with the acquisition of the
Project (as defined in the Loan Agreement, of even date with the Indenture,
between the Issuer and the Company, hereinafter referred to as the
"Agreement"), is a proper charge against the Project Costs (as defined in the
Agreement), and has not been the basis for any prior requisition which has been
paid; (b) neither the Company nor, to the best of the Company's knowledge, the
Issuer has received written notice of any lien, right to lien or attachment
upon, or claim affecting the right of such payee to receive payment of, any of
the money payable under this requisition to any of the persons, firms or
corporations named herein, or if any notice of any such lien, attachment or
claim has been received such lien, attachment or claim has been released or
discharged or will be released or discharged upon payment of this requisition;
(c)
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this requisition contains no items representing payment on account of any
retained percentages which the Issuer or the Company is entitled to retain at
this date; (d) the payment of this requisition will not result in less than
substantially all (95% or more) of the proceeds of the Bonds to be expended
under this requisition and under all prior requisitions having been used for
the acquisition and installation of real property or property of a character
subject to the allowance for depreciation under the Internal Revenue Code of
1986, as amended; and (e) no "Event of Default" (as defined in the Agreement),
or event which after notice or lapse of time or both would constitute such an
"Event of Default" has occurred and not been waived.
The following paragraph is to be completed when any requisition and
certificate includes any item for payment for labor or to contractors, builders
or materialmen.
I hereby certify that insofar as the amount covered by the above
requisition includes payments to be made for labor or to contractors, builders
or materialmen, including materials or supplies, in connection with the
acquisition of the Project, (i) all obligations to make such payment have been
properly incurred, (ii) any such labor was actually performed and any such
materials or supplies were actually furnished or installed in or about the
Project and are a proper charge against the Project Costs, and (iii) such
materials or supplies either are not subject to any lien or security interest
or, if the same are so subject, such lien or security interest will be released
or discharged upon payment of this requisition.
-----------------------------------
Company Representative
APPROVED:
U.S. Bank National Association
By:
--------------------------------
Title:
-------------------------------
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