Exhibit 10.54
================================================================================
LOAN AGREEMENT
AGI INCORPORATED
AND
CITY OF JACKSONVILLE, ILLINOIS
DATED AS OF JANUARY 1, 1995
The rights of the City of Jacksonville, Illinois, under this Agreement
(except the right to receive payment for its expenses, the right to receive
indemnities, and rights relating to the amendment of this Agreement) have been
assigned to Bank One, Springfield, Springfield, Illinois, as Trustee under a
Trust Indenture dated as of the date of this Agreement, between the City and the
Trustee.
================================================================================
TABLE OF CONTENTS
SECTION HEADING PAGE
Recitals......................................................................... 1
Agreement........................................................................ 1
ARTICLE I DEFINITIONS AND EXHIBITS........................................ 2
Section 1.1. Terms Defined................................................. 2
Section 1.2. Rules of Interpretation....................................... 3
Section 1.3. Exhibits...................................................... 4
ARTICLE II THE LOAN AND THE PROJECT........................................ 4
Section 2.1. Issuer's Representations, Warranties and Covenants............ 4
Section 2.2. Company's Representations, Warranties and Covenants........... 4
Section 2.3. The Project................................................... 7
ARTICLE III THE BONDS, USE OF PROCEEDS, THE NOTE............................ 7
Section 3.1. Agreement to Issue Bonds...................................... 7
Section 3.2. Disbursements from Project Fund............................... 8
Section 3.3. Company Is Required to Pay in the Event Project Fund Is
Insufficient.................................................. 8
Section 3.4. Investment of Project Fund and Debt Service Fund
Moneys........................................................ 8
Section 3.5. Covenants with Respect to Arbitrage........................... 9
Section 3.6. Loan Payments and Other Amounts Payable....................... 9
Section 3.7. Obligation of Company Unconditional........................... 11
Section 3.8. Letter of Credit and Alternate Letter of Credit; Obligation
to Maintain Letter of Credit.................................. 11
ARTICLE IV PARTICULAR COVENANTS OF THE COMPANY............................. 12
Section 4.1. Consent to Assignment to Trustee.............................. 12
Section 4.2. Payment of Expenses of Issuance of Bonds...................... 12
Section 4.3. Company to Maintain Its Existence; Conditions under
Which Exceptions Permitted.................................... 12
Section 4.4. Further Assurances and Corrective Instruments................. 13
Section 4.5. Covenants of Company with Respect to Use of Bond
Proceeds...................................................... 13
Section 4.6. Indemnification of Issuer and Trustee......................... 13
Section 4.7. Reports, Certificates and Other Information................... 13
Section 4.8. Insurance..................................................... 14
Section 4.9. Taxes and Liabilities......................................... 14
-i-
Section 4.10. Company to Furnish Notice of Fixed Interest Rate and
Mandatory Redemption Dates.................................... 14
Section 4.11. Notice of Adjustment Dates, Rate Determination Dates,
Rate Change Dates, Interest Payment Dates and LOC
Termination Tender Dates...................................... 14
Section 4.12. Continuing Market Disclosure.................................. 15
ARTICLE V MAINTENANCE, TAXES AND INSURANCE................................ 15
Section 5.1. Maintenance and Modifications of Project by Company............ 15
Section 5.2. Taxes, Other Governmental Charges and Utility Charges......... 15
Section 5.3. Insurance Required............................................ 16
Section 5.4. Application of Net Proceeds of Insurance...................... 16
Section 5.5. Additional Provision Respecting Insurance..................... 16
ARTICLE VI DAMAGE DESTRUCTION AND CONDEMNATION........................... 16
Section 6.1. Damage and Destruction........................................ 16
Section 6.2. Condemnation.................................................. 17
ARTICLE VII PREPAYMENT OF NOTE.............................................. 17
Section 7.1. Optional Prepayment of Note................................... 17
Section 7.2. Mandatory Prepayment of Note in the Event of a
Determination of Taxability................................... 18
Section 7.3. Purchase of Bonds............................................. 18
Section 7.4. Extraordinary Event Prepayment of the Note.................... 18
Section 7.5. Notice of Prepayment.......................................... 18
ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES.................................. 18
Section 8.1. Events of Default............................................. 18
Section 8.2. Remedies on Default........................................... 20
Section 8.3. Application of Moneys......................................... 20
Section 8.4. Remedies Cumulative........................................... 21
Section 8.5. Delay or Omission Not a Waiver................................ 21
Section 8.6. Remedies Subject to Provisions of Law......................... 21
ARTICLE IX SUPPLEMENTS AND AMENDMENTS TO THIS AGREEMENT.................... 21
Section 9.1. Supplements and Amendments to This Agreement.................. 21
ARTICLE X MISCELLANEOUS................................................... 21
Section 10.1. Binding Effect................................................ 21
Section 10.2. Severability.................................................. 21
Section 10.3. Amounts Remaining in Debt Service Fund........................ 21
Section 10.4. Amendments, Changes and Modifications......................... 21
Section 10.5. Execution in Counterparts..................................... 22
-ii-
Section 10.6. Notices....................................................... 22
Section 10.7. References to Bonds Ineffective after Bonds Are Paid.......... 22
Section 10.8. Agreement for Benefit of Parties Hereto....................... 22
Section 10.9. Waiver........................................................ 22
Section 10.10. Captions and Table of Contents................................ 22
Section 10.11. Survival of Covenants, Representations and Warranties......... 22
Section 10.12. Applicable Law................................................ 22
Section 10.13. Holidays...................................................... 23
EXHIBIT A: Description of the Project
EXHIBIT B: Form of Note
-iii-
LOAN AGREEMENT
This LOAN AGREEMENT has been executed as of January 1, 1995, by and between
AGI INCORPORATED, an Illinois corporation (the "Company" and the CITY OF
JACKSONVILLE, Illinois (the "Issuer").
RECITALS
1. Definitions of certain of the terms used in these Recitals are set out
in Article I hereof and Article I of the Indenture.
2. The Company is pursuing the acquisition, installation and equipping of
the Project which is to be located on the Project Site.
3. To finance a portion of the costs of the Project, the Company is
borrowing from the Issuer funds derived from the sale of the Bonds, and the
Company, as evidence of its obligation to repay the funds, is issuing to the
Issuer its Note.
4. Pursuant to 65 ILCS 5/11-74-1, et seq., the Issuer is obtaining funds
of City of Jacksonville, Illinois Multi-Mode Industrial Project Revenue Bonus,
Series 1995 (AGI Incorporated Project).
5. Pursuant to a Trust Indenture dated as of the date of this Agreement,
between the Issuer and Bank One, Springfield, Springfield, Illinois, as Trustee,
the Issuer will issue the Bonds and, as security for the payment of the Bonds
and the performance of the obligations of the Issuer and the Company under the
Indenture and the Note, the Issuer will assign the Note and its rights under
this Agreement (except the right to receive payment for its expenses, the right
to receive indemnities and rights relating to any amendments to this Agreement)
to the Trustee and the Company will cause to be issued to the Trustee an
irrevocable direct pay letter of credit of Bank of America Illinois, dated
January 19, 1995. The Bonds will be payable solely out of the revenues and other
amounts derived from the Note and under this Agreement and from the Letter of
Credit and shall not, in any respect, be a general obligation of, an
indebtedness of, or constitute a charge against the general credit of the
Issuer, the State of Illinois, or any political subdivision thereof.
AGREEMENT
In consideration of the premises and the mutual covenants contained herein,
the Company and the Issuer agree as follows:
ARTICLE I
DEFINITIONS AND EXHIBITS
Section 1.1. Terms Defined. As used in this Agreement, the following terms
shall have the following meanings unless the context otherwise requires:
"Act" means 65 ILCS 5/11-74-1 et seq., as from time to time amended.
"Agreement" means this Loan Agreement and any amendment and supplement
thereto.
"Agreement Term" means the period commencing on the date of this Agreement
and, subject to the provisions of this Agreement, ending on such date as the
Bonds have been fully paid and retired or provision for such payment made as
provided in the Indenture.
"Authorized Company Representative" means any officer designated to act on
behalf of the Company by written certificate furnished to the Issuer and the
Trustee containing the specimen signature of the person and signed on behalf of
the Company by its President, any of its Vice Presidents, its Secretary or any
of its Assistant Secretaries. The certificate may designate an alternate or
alternates. The Authorized Company Representative may be an employee of the
Company.
"Bankruptcy Code" means Title 11 of the United States Code, as amended.
"Bonds" means the $7,640,000 aggregate principal amount of the City of
Jacksonville, Illinois Multi-Mode Industrial Project Revenue Bonds, Series 1995
(AGI Incorporated Project).
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means AGI Incorporated, an Illinois corporation, and its
successors and signs.
"Counsel" means an attorney-at-law (who may be counsel to the Trustee, the
Issuer or the Company).
"Debt Service Fund" means the fund created in Section 402 of the Indenture.
"Indenture" means the Trust Indenture, dated as of the date of this
Agreement, between the Issuer and Bank One, Springfield, Springfield, Illinois,
as Trustee, relating to the Bonds, and any indenture supplemental thereto.
"Issuer" means the City of Jacksonville, Illinois, and any successor.
"Letter of Credit" means the irrevocable direct pay letter of credit of Bank
of America Illinois dated January 19, 1995 issued to the Trustee for the benefit
of the
-2-
bondholders under a Reimbursement Agreement among said Bank and the Company
dated as of January 1, 1995.
"Loan" means the $7,640,000 loan in principal amount by the Issuer to the
Company of the proceeds from the sale of the Bonds.
"Net Proceeds" means, when used with respect to any insurance proceeds or
any condemnation award, 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" or "Promissory Note" means the Note of the Company in substantially
the form of Exhibit B hereto and any Note issued in exchange therefor.
"Project" means the acquisition of land, and construction and equipping of a
manufacturing facility for the Company as more fully described in Exhibit A to
this Loan Agreement.
"Project Cost" means and includes all those costs related to the Project
which are permitted to be financed under the Code, the Act, this Agreement and
the Indenture and which do not result in a loss of the exclusion from gross
income for federal income tax purposes of the interest on the Bonds under the
Code.
"Project Fund" means the fund created in Section 302 of the Indenture.
"Qualified Investments" shall have the meaning ascribed thereto in Section
3.4.
"Reimbursement Agreement" means the Reimbursement Agreement between the
Company and Bank of America Illinois dated as of January 1, 1995, under which
the Letter of Credit will be issued.
"Trust" means the trustee at the time serving under the Indenture.
Section 1.2. Rules of Interpretation. For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise requires:
(a) "This Agreement" means this instrument as originally executed
and as it may from time to time be supplemented or amended.
(b) The words "herein," "hereof" and "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision.
(c) The terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular.
-3-
(d) All accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles.
(e) Any terms not defined herein but defined in the Indenture
shall have the same meaning herein.
(f) The terms defined elsewhere in this Agreement shall have the
meanings therein prescribed for them.
Section 1.3. Exhibits. The following Exhibits are a part of this Agreement:
Exhibit A: Description of the Project.
Exhibit B: Form of Note, form of Note Registrar's Certificate of
Validation and form of Assignment.
ARTICLE II
THE LOAN AND THE PROJECT
Section 2.1. Issuer's Representations, Warranties and Covenants. (a) The
Issuer represents and warrants that:
(i) The Issuer is a duly organized and existing municipal
corporation and political subdivision of the State of Illinois, with full
power and authority under the Act to enter into the transactions
contemplated by this Agreement and to carry out its obligations hereunder.
(ii) The Issuer has duly authorized the issuance, execution and
delivery of the Bonds and the execution and delivery of this Agreement.
(b) The Issuer covenants that:
(i) The Issuer shall not take any action to interfere with any
obligation it may have with respect to the Bonds, the proceedings
authorizing the Bonds or this Agreement.
(ii) The Issuer shall provide funds from the proceeds from the sale
of the Bonds for the financing of a portion of the costs of the Project and
shall secure the payment of the Bonds by assigning this Agreement (except
the right to receive payment for its expenses, the right to receive
indemnities and rights relating to any amendment of this Agreement) and the
Note to the Trustee pursuant to the Indenture.
Section 2.2. Company's Representations, Warranties and Covenants. The
Company makes the following representations and warranties (all as of the date
on which this Agreement has been executed) and in addition, makes the following
covenants:
-4-
(a) It is a duly organized and validly existing corporation in good
standing under the laws or the State of Illinois and is duly qualified to
transact business in Illinois, has the power and authority to own its
properties and assets and to carry on its business as now being conducted
and as now contemplated, and has full power and authority to issue the
Note and to execute and deliver this Agreement, the Reimbursement
Agreement and all other agreements contemplated by this Agreement to which
the Company is a party; all actions necessary for the execution and
delivery of the Note, this Agreement and the Indenture have been taken; and
the Note will be a valid and binding obligation of the Company.
(b) The execution, delivery and performance of this Agreement, the
Note and the Reimbursement Agreement will not conflict with or result in a
breach of, or a default under, the Company's Articles of Incorporation, By-
Laws, or any material agreement or instrument to which the Company is a
party or by which it is bound (excepting, however such agreements or
instruments with respect to which the Company has been required to and has
obtained waivers or consents) or result in the creation or imposition of
any lien, charge or encumbrance upon any of the property or assets of the
Company, except for the lien of the Indenture and liens, charges or
encumbrances in favor of Bank of America Illinois.
(c) At least 95% of the proceeds from the Bonds (including any
income earned on the investment of such proceeds) will be used for the
acquisition of land, construction of a building and installation of
machinery and equipment for the Project. No more than 2% of the proceeds of
the Bonds will be used for the costs of issuance of the Bonds, including
any broker's, underwriter's or placement agent's discount or other
compensation. Costs of issuance paid from the Bond proceeds together with
any other expenditures which are not described in the first sentence of
this subsection will be not more than 5% of the proceeds of the Bonds. No
part of the proceeds are to be used by the Company, directly or indirectly,
as working capital or to finance inventory.
(d) The Project and all components thereof will consist of property
of a character subject to the allowance for depreciation under the Code.
(e) The indication of interest by the Issuer on the date of
adoption of the inducement resolution to issue its Bonds and lend the
proceeds to the Company for the purposes set forth herein has encouraged
the Company to acquire and construct the Project, and will promote economic
development and create new or preserve existing job opportunities in the
area. The Project, or any components thereof which are to be paid for out
of the proceeds of the Bonds, had not been acquired, constructed, equipped,
furnished or rehabilitated by the Company prior to the adoption of the
inducement resolution of the City Council of the Issuer with respect to the
Project.
-5-
(f) The sum of the following does not exceed $10,000,000:
(i) the aggregate face amount of any outstanding issues of
obligations (other than the Bonds) exempt from taxation under
Sections 103 and 144 of the Code, the proceeds from which were or
will be used primarily with respect to the Project or other
facilities (a) located within the County of Xxxxxx (but not in any
incorporated municipality) or within the Issuer and (b) the principal
user of which is or will be the Company or any other principal user
of the Project or related person or persons within the meaning of
Section 144 of the Code;
(ii) the aggregate principal amount of the Bonds; and
(iii) the sum of all capital expenditures (within the meaning
of Section 144(a) of the Code (and, pursuant to said section,
specifically excluding capital expenditures made from the proceeds of
bonds described in paragraph (i) and (ii) above)) relating to the
facilities described in subsection (i) and made during the period
beginning three years prior to the date on which the Bonds are issued
and ending on the date on which the Bonds are issued.
(g) The "average maturity" of the Bonds (taking into account their
issue prices) does not exceed 120% of the "average reasonably expected
economic life" of the facilities to be financed with the proceeds of the
Bonds (taking into account the respective cost of such facilities), all as
determined in accordance with the provisions of Section 147(b) of the Code.
(h) No portion of the proceeds of the Bonds will be used to provide
any facility the primary purpose of which is retail food and beverage
service, automobile sales or services, or the provision of recreation or
entertainment, any private or commercial golf course, country club, massage
parlor, tennis club, skating facility (including roller skating, skateboard
and ice skating), racquet sports facility (including any handball or
racquetball court), hot tub facility, suntan facility, racetrack, airplane,
sky box, or other private luxury box, health club facility, facility used
for gambling, or facility used for the sale of alcoholic beverages.
(i) The Bonds are not and shall not be "federally guaranteed" as
defined in Section 149(b) of the Code.
(j) No portion of the proceeds of the Bonds will be used to acquire
land (or an interest therein) or to acquire any property (or an interest
therein) where the first use of such property is not pursuant to such
acquisition. The portion of the Bonds to be used to acquire land will not
exceed $60,000.
(k) The aggregate authorized face amount of the Bonds allocated to
any "test period beneficiary," as such term is defined in Section 144 of
the Code, when increased by the outstanding tax-exempt industrial
development bonds of such beneficiary, does not and shall not exceed
$40,000,000.
-6-
(l) The execution, delivery and performance by the Company of this
Loan Agreement and the Note do not require the consent or approval of, the
giving of notice of, the registration with, or the taking of any other
action in respect of, any federal, state or other governmental authority or
agency, not previously obtained or performed.
(m) No litigation, arbitration proceedings or governmental
proceedings are pending or threatened against the Company which would, if
adversely determined, materially and adversely affect the right and power
of the Company to execute and deliver this Loan Agreement and all documents
and instruments related hereto or contemplated hereby to which the Company
is a party or signatory.
(n) Except with respect to future capital expenditures, the Company
will take no action which would (and will omit no action reasonably within
its power, the omission of which would) cause the interest on the Bonds to
become includable for Federal income tax purposes in the gross income of
any Bondholder, other than a Bondholder who is a "substantial user" of the
Project or a "related person" within the meaning and for the purpose of
Section 147 of the Code. While this Agreement does not restrict the Company
as to future capital expenditures (and such expenditures, if sufficiently
large, could cause the interest on the Bonds to become includable in gross
income for Federal income tax purposes), the Company presently believes and
expects that it will comply with the applicable Code limitations on future
capital expenditures.
Section 2.3. The Project. The Company shall cause the Project to be
acquired, constructed, installed and equipped with all reasonable dispatch in
accordance with the Company's specifications and directions. It is the Company's
present intention to use the Project, or to cause it to be used, throughout the
term of this Agreement as an "economic development facility" within the meaning
of the Act. The failure or inability of the Company to use the Project, or to
cause it to be used, for the intended purposes shall not affect in any way the
Company's obligations under this Agreement or the Note and shall not be deemed a
breach or default under this Agreement as long as the use does not affect the
validity of the Bonds or result in the interest on the Bonds becoming includable
for Federal income tax purposes in the gross income of a Bondholder.
ARTICLE III
THE BONDS, USE OF PROCEEDS, THE NOTE
Section 3.1. Agreement to Issue Bonds. In order to provide funds to make
the Loan, the Issuer shall issue the Bonds and sell them to the purchaser or
purchasers thereof and deposit the proceeds with the Trustee as follows:
(a) Into the Debt Service Fund, the accrued interest, if any, paid
by the purchasers of the bonds; and
(b) Into the Project Fund, the balance of the proceeds.
-7-
Section 3.2. Disbursements from Project Fund. The Indenture authorizes the
Trustee to make payments from the Project Fund to pay Project Costs and to
reimburse the Company for Project Costs paid by it. Payments shall be made upon
receipt of requisitions signed by an Authorized Company Representative stating:
(a) the requisition number, (b) the name and address of the person, firm or
corporation to whom payment is due or to whom the Company has made payment for
which reimbursement is to be made, (c) the amount to be paid, and (d) that each
obligation has been properly incurred, is a Project Cost that is a proper charge
against the Project Fund, and has not been the basis of any previous withdrawal.
The requisition shall be accompanied by copies of such invoices, canceled checks
(or other evidence of payment) and similar documentation as the Trustee may
reasonably request.
After the Trustee has paid all amounts requisitioned from the Project Fund
and has received a certificate from the Company stating that the Project has
been completed, or that the Project cannot or will not be completed for the
reasons specified therein, any balance in the Project Fund shall, subject to
compliance with the Act, be transferred to the Purchase Fund and disbursed in
accordance with the provisions of the Indenture relating thereto; provided, that
at least 95% of the amount actually expended has been expended on property of a
character subject to the allowance for depreciation under the Code ("qualified
facilities"). If such balance, plus any amounts actually expended other than on
qualified facilities, exceeds the permissible 5% insubstantial amount of the
Bond proceeds, the Company shall so notify the Trustee in writing, which written
notification shall include detailed instructions as to the disposition of such
balance, including instructions that the Trustee shall deposit such excess into
a special escrow account within the Purchase Fund and detailed instructions
pursuant to which the Trustee shall invest and use any amount so deposited to
redeem or retire the Bonds, or portions thereof, in accordance with Internal
Revenue Service Rev. Proc. 79-5 and Rev. Proc. 81-22 and any subsequent
amendments, modifications or replacements thereof at the earliest redemption
date occurring after such deposit.
Section 3.3. Company Is Required to Pay in the Event Project: Fund Is
Insufficient. In the event the moneys in the Project Fund available for payment
of the Project Costs should not be sufficient to pay the costs of acquiring,
constructing, installing and equipping the Project in full, the Company shall
complete the Project and pay that portion of the costs of the Project in excess
of the moneys available in the Project Fund.
Section 3.4. Investment of Project Fund and Debt Service Fund Moneys.
Moneys held as part of the Debt Service Fund shall be invested by the Trustee at
the direction of the Company only in Government Securities. Subject to the
provisions of Section 405 of the Indenture, any moneys held as part of the
Project Fund shall be invested by the Trustee at the direction of the Company in
(a) direct obligations of the United States of America, or (b) obligations the
principal and interest of which are guaranteed as to full and timely payment by
the United States of America, or (c) obligations of any agency of the United
States of America, or (d) certificates of deposit or bankers acceptances issued
by, or interest bearing time or demand deposits with, any bank, trust company or
national banking association (including the Trustee, any affiliate of the
Trustee and any paying agent) having a combined
-8-
capital and surplus of at least $10,000,000 and which obligations of the "bank
are rated "Baa-3" or "Prime-3" by Xxxxx'x Investors Service, Inc., or (e)
repurchase agreements with any entity rated "AAA" by Moody's and meeting the
requirements specified in (d) above for the purchase and sale of obligations of
the type specified in (a) or (b) above including contracts with the Trustee, any
affiliate of the Trustee and any paying agent), or f) commercial paper which has
been classified for rating purposes by Xxxxx'x Investors Service, Inc., as
Prime-2 and by Standard and Poor's Corporation as A-2 (other than commercial
paper of the Company or any "related person"), or (g) obligations the interest
on which is excludable from gross income for Federal income tax purposes and
that are rated at least "A" "MIG-2" or Prime-2 by Moody's Investor's Service,
Inc., and "A" or "A-2" by Standard and Poor's Corporation and an equivalent
rating by any other national rating agency, or (h) funds, mutual funds, common
trust funds or any similar entity which is both (i) rated investment grade by
Xxxxx'x Investors Service, Inc. and Standard and Poor's Corporation, and (ii)
whose investments consist of the foregoing. Each of the investments described
in Subsections (a) through (h) above is a "Qualified Investment."
Section 3.5. Covenants with Respect to Arbitrage. The Company and the Issuer
covenant to each other and to and for the benefit of the holders of the Bonds
that no use will be made of the proceeds from the issue and sale of the Bonds
which, if such use could have been reasonably expected on the date of issue of
the Bonds, would have caused the Bonds to be classified as arbitrage bonds
within the meaning of Section 103(b)(2) of the Code. As long as any Bonds are
outstanding, the Issuer and the Company shall not violate the requirements of
the Code relating to arbitrage bonds, and any regulations thereunder including
the requirement of Section 148 of the Code relating to the rebate of certain
amounts to the United States government. The Company will provide to the Trustee
instructions relating to the permissible investment of Bond proceeds and
instructions and computations (using investment information provided by the
Trustee) relating to the amount required to be rebated to the United States, all
in conformity with Section 148 of the Code. The Company reserves the right,
however, to make any investment of proceeds permitted under the laws of the
State of Illinois, if the sections of the Code relating to arbitrage bonds or
the regulations thereunder are repealed or relaxed or are held void by final
judgment of a court of competent jurisdiction, so long as the investment would
not result in making the interest on the Bonds includable in the gross income of
the holders thereof for purposes of Federal income taxation. In making
investments, the Company may rely on an opinion of counsel of recognized
competence in such matters. The Trustee may make any and all such investments
through its own bond department.
Section 3.6. Loan Payments and Other Amounts Payable. (a) Concurrently with
the sale of the Bonds, the Company shall execute and deliver the Note to the
Issuer, pursuant to which the Company shall make payments sufficient to pay when
due (whether at maturity, upon call for redemption, by acceleration or
otherwise) the principal of and premium, if any, and interest on the Bonds. The
Note shall be issued as a fully registered note substantially in the form
attached hereto as Exhibit B. The obligation of the Company to make any payment
in respect of the loan made hereunder shall be reduced by the amount of any
reduction under the Indenture of the corresponding payment to be made by the
Issuer thereunder, including any reduction due to payments made by the Bank to
the Trustee in
-9-
respect of the principal of premium, if any, or interest on the Bonds when due
pursuant to the Letter of Credit.
(b) The Company shall pay or cause to be paid to the Tender Agent as agent
for the Trustee amounts equal to the amounts to be paid to Owners of Bonds
pursuant to Section 403 of the Indenture, on the dates the purchase price of
Bonds delivered to the Tender Agent is to be paid from the sources described in
Section 403 of the Indenture. The obligation of the Company to make the payments
required to be made under this Section 3.6 shall be reduced by the amount of any
moneys otherwise available for such payment, including particularly, any payment
made by the Bank to the Trustee in respect of the purchase price of Bonds
pursuant to the Letter of Credit.
(c) The Company shall also pay when due (i) the reasonable and necessary
fees and expenses of the Trustee (including any reasonable and necessary fees
and expenses in its capacity as Note Registrar) the Tender Agent and any paying
agent for services in connection with the Bonds as specified in Section 802 of
the Indenture and (ii) the reasonable and necessary fees and expenses of the
Issuer, including reasonable attorneys' fees, in connection with any default of
the Company under this Agreement or the Note.
(d) If the Company fails to make any of the payments required in this
Section 3.6 or in the Note, all unpaid items or installments shall continue as
an obligation of the Company until fully paid, and the Company shall pay the
same with interest thereon (to the extent permitted by law) until paid at a per
annum rate of interest equal to the per annum rate then in effect on the Bonds.
(e) All payments under this Section 3.6 other than with respect to (b) above
shall be made by the Company directly to the Trustee or as directed by the
Trustee in immediately available funds and the Trustee shall deposit all such
payments into the Debt Service Fund, provided that payments under Section 3.6(c)
shall be made by the Company directly to the person entitled thereto. The amount
of any money in the Debt Service Fund which is either proceeds from the sale of
any Bonds or earnings on investments made pursuant to the provisions of the
Indenture which has been set aside by the Trustee, at the request of the
Company, for payments of principal, whether at maturity or upon redemption, of
the Bonds shall be credited against the obligation of the Company to pay the
principal of the Note. The amount of any money in the Debt Service Fund which is
either proceeds from the sale of any Bonds or earnings on investments made
pursuant to the provisions of the Indenture which has been set aside by the
Trustee for payments of interest on the Bonds shall be credited against the
obligation of the Company to pay interest on the Note. The principal amount of
any Bonds purchased by the Company and delivered to the Trustee, or purchased by
the Trustee and canceled, shall be credited against the obligation of the
Company to pay the principal of the Note.
(f) If on any principal or interest payment date the balance in the Debt
Service Fund is insufficient to make the required payments of principal of and
premium, if any, and interest on the Bonds on that date, the Company upon notice
shall pay forthwith any deficiency to the Trustee.
-10-
(g) The Company shall not be obligated to make any further payments under
this Section 3.6. and the Company's liability to make payments under this
Section 3.6 shall cease, at any time that the entire principal of and premium,
if any, and interest on the Bonds shall have been fully paid in accordance with
their terms and the provisions of Section 1101 of the Indenture (including,
without limitation, principal, interest to maturity or earliest redemption
date, as the case may be, expenses of redemption, redemption premiums, and fees
and expenses of the Issuer, the Trustee, the Tender Agent and any paying agent
and any other costs and fees required to be paid by the Company pursuant to this
Agreement), or at any time that there shall be in the Debt Service Fund an
amount sufficient to pay or redeem the Bonds in accordance with the provisions
of Section 1101 of the Indenture (including, without limitation, principal,
interest to maturity or earliest redemption date, as the case may be, expenses
of redemption and redemption premiums, and fees and expenses of the Issuer, the
Trustee and any paying agent and any other costs and fees required to be paid by
the Company pursuant to this Agreement) and all other requirements of Section
1101 of the Indenture have been satisfied in full.
Section 3.7. Obligation of Company Unconditional. Subject to Sections
3.6(g) and 4.6. the obligation of the Company to make the payments and to
perform and observe its other agreements pursuant to this Agreement and the Note
shall be absolute and unconditional and shall not be subject to reduction or
delay by set-off, counterclaim, abatement or otherwise. Until such time as 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 Section 1101 of the Indenture (including, without limitation,
principal, interest to maturity or earliest redemption date, as the case may be,
expenses of redemption, redemption premiums, and fees and expenses of the
Issuer, the Trustee, the Tender Agent, and any paying agent and any other costs
and fees required to be paid by the Company pursuant to this Agreement), and all
other requirements of Section 1101 of the Indenture have been satisfied in full,
the Company (a) shall not suspend or discontinue any payments pursuant to this
Agreement or the Note, (b) shall perform and observe all its other agreements
contained in this Agreement and the Note, and (c) except as provided in Article
VII hereof, shall not terminate this Agreement or the Note for any cause.
Nothing contained in this Agreement shall be construed to release the Issuer
from the performance of any of its obligations: and in the event the Issuer
shall fail to perform any such agreement on its part, the Company may institute
such action against the Issuer as the Company may deem necessary to compel
performance, provided that no such action shall (i) violate the agreements on
the part of the Company contained in the first sentence of this Section 3.7 or
(ii) diminish the amounts required to be paid by the Company pursuant to Section
3.6 hereof.
Section 3.8. Letter of Credit and Alternate Letter of Credit: Obligation to
Maintain Letter of Credit, (a) From the date of issuance of the Bonds, while the
Bonds are in an Adjustable Long Period or Short Period, the Company shall
maintain the Letter of Credit or Alternate Letter of Credit.
(b) From the date of issuance of the Bonds, the Company shall provide
security for payment of the principal of and interest on, and applicable
redemption premiums with
-11-
respect to, all Bonds in the Adjustable Long Period or Short Period and for
payment of the purchase price of such Bonds delivered to the Tender Agent
pursuant to Section 202(d) or Section 503 of the Indenture by causing the Letter
of Credit or an Alternate Letter of Credit to be delivered to the Trustee. The
Company hereby authorizes and directs the Trustee to draw moneys under the
Letter of Credit, in accordance with its terms and the terms of the Indenture,
to the extent necessary to pay the principal of, premium, if any, and interest
on the Bonds when due and to pay the purchase price of Bonds as provided in the
indenture.
(c) The Company may, at its election and with the consent of the Bank,
provide for one or more extensions of the Letter of Credit beyond its then
stated date of expiration. At any time prior to the Trustee's giving of notice
of redemption of Bonds pursuant to Section 202(e) of the Indenture, the Company
may provide for the delivery of an Alternate Letter of Credit which must have a
term of at least one year from its date of delivery, provided that the Company
must furnish to the Trustee written evidence from Xxxxx'x, if the Bonds are
rated by Xxxxx'x, and S&P, if the Bonds are rated by S&P, to the effect that it
has reviewed such Alternate Letter of Credit and that its substitution for the
Letter of Credit then in effect will not, of itself, result in a reduction or
withdrawal of its ratings of the Bonds from those which then prevail,
accompanied by an opinion of Bond Counsel that the delivery of such Alternate
Letter of Credit is permitted under the Indenture and this Agreement and will
not adversely affect the exemption from federal income taxation of interest on
the Bonds.
ARTICLE IV
PARTICULAR COVENANTS OF THE COMPANY
Section 4.1. Consent to Assignment to Trustee. The Company acknowledges and
consents to the assignment of the Note and of the Issuer's rights hereunder
(except the right to receive payment for its expenses, the right to receive
indemnities and rights relating to any amendments to this Agreement) to the
Trustee pursuant to the Indenture. Except as otherwise provided herein, the
Company shall pay to the Trustee all amounts payable under this Agreement and
the Note, and the Company acknowledges that the Trustee may enforce the rights,
remedies and privileges granted to the Issuer hereunder.
Section 4.2. Payment of Expenses of Issuance of Bonds. In addition to its
payment obligations under Section 3.6 of this Agreement, the Company shall pay
for all the reasonable costs and shall be liable and pay for any recording
expenses, legal fees, printing expenses and other fees and expenses reasonably
incurred or to be incurred by or on behalf of the Issuer and the Trustee in
connection with or as an incident to the issuance and sale of the Bonds or any
amendment or supplement to this Agreement or the Indenture.
Section 4.3. Company to Maintain Its Existence: Conditions under Which
Exceptions Permitted. The Company shall during the term of this Agreement
maintain its corporate existence and will be duly qualified to transact business
in the State of Illinois and shall not voluntarily take, or omit to take, any
action that would cause the Company to be dissolved, nor shall the Company sell,
lease, transfer or otherwise dispose of all or substantially all of its assets
or consolidate with or merge into another corporation or permit one or more
other
-12-
corporations to consolidate with or merge into it; except that the company may
consolidate with or merge into another corporation incorporated and existing
under the laws of the United States of America or one of the states of the
United States of America or permit one or more other corporations to consolidate
with or merge into it or sell or otherwise transfer to another such other
corporation all or substantially all of its assets as an entirety and may
thereafter dissolve, provided that immediately after such action there is no
default under the Note, this Agreement or the Indenture, and further provided
that if the Company is not the surviving, resulting or transferee corporation
("the Survivor"), the Survivor is (a) qualified to do business in the State of
Illinois and (b) shall expressly assume and agree to perform all of the
Company's obligations under this Agreement, the Note and the Indenture.
Section 4.4. Further Assurances and Corrective Instruments. The Issuer and
the Company shall execute and deliver, or cause to be executed and delivered,
such supplements hereto and further instruments as may reasonably be required
for carrying out the intention of or facilitating the performance of this
Agreement.
Section 4.5. Covenants of Company with Respect to Use of Bond Proceeds. The
Issuer is issuing the Bonds pursuant to an exemption contained in the Code. It
is the intention of the parties that the interest on the Bonds remain excludable
from gross income for purposes of federal income taxation and to that end the
Company covenants with the Issuer and with the Trustee for the benefit of the
future holders of the Bonds, that it will never, insofar as it is able, permit
Bond proceeds to be expended or utilized in such a manner as to cause the loss
of the exclusion claimed other than as a result of previously unanticipated
capital expenditures.
Section 4.6. Indemnification of Issuer and Trustee. The Company shall
indemnify and hold the Issuer and the Trustee harmless against any claim, loss,
liability or expense incurred without negligence or bad faith or willful
misconduct on the part of the Issuer or the Trustee arising out of or in
connection with this Agreement, the Note or the Indenture, including reasonable
attorneys' fees and the costs and expense of defense against any such claim or
liability.
Section 4.7. Reports, Certificates and Other Information. The Company shall
furnish to the Trustee:
(a) Annual Statements. As soon as available and in any event within one
hundred twenty days after the close of each fiscal year of the Company ending
after the date of this Agreement, copies of the balance sheet of the Company,
and statements of income and retained earnings and statements of cash flows of
the Company for such fiscal year, each of which shall be audited by the
Company's independent public accountants and shall set forth in comparative
form the figures for the preceding fiscal year, all in reasonable detail.
(b) Quarterly Statements. As soon as available, and in any event within
sixty days after the close of each calendar quarter ending after the date of
this Agreement (except the last quarter of each fiscal year), copies of the
balance sheet of the
-13-
Company as of the end of such quarter, and statements of income and
statements of cash flows of the Company for the portion of the fiscal year
ended as of the end of such quarter. All such statements may be prepared
internally and shall be accompanied by a certificate of an appropriate
officer of the Company that such financial statements have been prepared in
material conformity with generally accepted accounting principles
consistently applied (except for changes in which the independent
accountants for the Company concur), and present fairly the financial
position of the Company as of the dates of such statements.
(c) No Default Certificate. Concurrently with providing such financial
statements, a certificate of the President, a Vice President or the Chief
Financial Officer of the Company that after reasonable investigation he has
no knowledge of the occurrence of any event of default under this Agreement
or the Indenture (or of any event that with the lapse of time or the giving
of notice would constitute an event of default), or if such officer shall
have obtained knowledge of any such event of default, he shall disclose the
same in such certificate and the nature thereof.
From and after such time as the Company creates any subsidiaries or acquires
subsidiaries the information required above will be reported on a consolidated
basis.
Section 4.8. Insurance. Subject to Article V of this Agreement, the Company
shall maintain such insurance as may be required by law and such other
insurance, to such extent and against such hazards and liabilities, as is
customarily maintained by companies similarly situated.
Section 4.9. Taxes and Liabilities. Subject to Article V of this Agreement,
the Company shall pay when due all taxes, assessments and other liabilities
including trade accounts, except such as are being contested in good faith and
by appropriate proceedings and for which appropriate reserves have been
established and, as to trade accounts, subject to industry practices.
Section 4.10. Company to Furnish Notice of Fixed Interest Rate and Mandatory
Redemption Dates. The Company agrees that, upon the determination of a Fixed
Interest Rate for the Series 1995 Bonds pursuant to the Indenture, the Company
shall cause notice of (i) the specific mandatory redemption dates or serial
maturities of such Series 1995 Bonds and (ii) the Fixed Interest Rate applicable
to such Series 1995 Bonds, to be given to the Issuer, the Trustee, the Bank, the
Paying Agent, if any, and the Remarketing Agent in accordance with the
Indenture.
Section 4.11. Notice of Adjustment Dates, Rate Determination Dates, Rate
Change Dates, Interest Payment Dates and LOC Termination Tender Dates. The
Company shall, or shall cause the Remarketing Agent to, make the designations
and give the written notices to the Persons to whom the Company or the
Remarketing Agent are therein required to give notice, as provided in Sections
202 and 209 of the Indenture. In addition, the Company shall, if required,
deliver to the Trustee the opinions of Bond Counsel referred to in Sections 202
and 209 of the Indenture.
-14-
Section 4.12. Continuing Market Disclosure. Upon conversion of the Bonds to
an interest rate determination method that would subject the related Remarketing
of the Bonds to the requirements of Rule 15c2-12 under the Securities Exchange
Act of 1934, as Amended, or any successor Provision, the Company shall comply
with the applicable reporting requirements for obligated persons contained in
Rule 5c2-12(b)(5), or any successor provision.
Because the payments of principal or purchase price of premium, if any, and
interest on the Bonds only shall be derived from draws under the Letter of
Credit or any Alternate Letter of Credit then in effect, and from payments made
by the Company under the Loan Agreement, the Issuer has determined that the
financial condition of the Issuer is not material to any investment decision
with respect to the Bonds. The Issuer is not required to furnish any continuing
information with respect to it or the Bonds.
ARTICLE V
MAINTENANCE, TAXES AND INSURANCE
Section 5.1. Maintenance and Modifications of Project by Company. The
Company shall, during the Agreement Term and at its own expense, (a) keep the
Project and the Project Site in as reasonably safe condition as its operations
shall permit, and (b) keep the Project in good repair and in good operating
condition, making from time to time all necessary repairs thereto (including
external and structural repairs) and renewals and replacements thereof. Subject
to the provisions of this Agreement and the Indenture, the Company may, also at
its own expense, make from time to time any additions, modifications or
improvements to the Project, including specifically additions and expansions to
the Project, as it may deem desirable for its business purposes that do not
materially adversely affect the structural integrity of the Project or
substantially reduce its value.
Section 5.2. Taxes, Other Governmental Charges and Utility Charges. The
Company shall promptly pay, as the same 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 the Project Site, or any
interest therein or any machinery, equipment or other property installed or
bought by the Company therein or thereon (including, without limiting the
generality of the foregoing, any taxes levied upon or with respect to the
revenues, income or profits of the Company from the Project which, if not paid,
will become a lien on the Project or the Project Site prior to or on a parity
with the lien of the Indenture and including all ad valorem taxes lawfully
assessed upon the Project or the Project Site), all utility and other charges
incurred in the operation, maintenance, use, occupancy and upkeep of the Project
or the Project Site and all assessments and charges lawfully made by any
governmental body for public improvements that may be secured by lien on the
Project or the Project Site.
The Company may, at its expense and in its own name and behalf, in good
faith contest by appropriate proceedings 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
-15-
remain unpaid during the period of such contest and any appeal therefrom,
provided during such period enforcement of any such contested item shall be
effectively stayed and appropriate reserves shall be established.
Section 5.3 Insurance Required. The Company shall insure or cause to be
insured during the Agreement Term the Project and the Project Site, against such
risks as are customarily insured against by businesses of like size and type,
paying as the same become due all premiums in respect thereto, including but not
necessarily limited to comprehensive general public liability insurance to the
extent of $2,000,000 per occurrence against liability for bodily injury,
including death resulting therefrom, and damage to property including loss of
use thereof occurring on or in any way related to the Project or the Project
Site or any part thereof and worker's compensation and occupational disease
coverage as required by the laws of the State of Illinois. All policies of
insurance related to the Project or the Project Site shall name the Bank and the
Trustee as additional insureds.
Section 5.4. Application of Net Proceeds of Insurance. The Net Proceeds of
the insurance carried pursuant to the provisions of Section 5.3 hereof shall be
paid and applied as provided in Section 6.1 hereof.
Section 5.5. Additional Provision Respecting Insurance. All insurance
required in Section 5.3 hereof shall be taken out and maintained in generally
recognized responsible insurance companies selected by the Company and qualified
to do business in the State of Illinois. All policies evidencing such insurance
shall provide for payment to the Bank or if no Bank, to Trustee.
A certificate, or certificates, of the insurers that such insurance is in
force and effect, together with copies of the insurance policies, shall be
deposited promptly with the Trustee upon request and, prior to the expiration of
any such policy, the Company shall furnish the Trustee upon request with
evidence satisfactory to the Trustee that the policy has been renewed or
replaced, or is no longer required by this Agreement. The insurance herein
required may be contained in blanket policies now or hereafter maintained by the
Company.
ARTICLE VI
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 6.1. Damage and Destruction. Unless the Company shall have
exercised its option to prepay the Note in full pursuant to the provisions of
Section 7.4 hereof, if prior to full payment of the Bonds (or provision for
payment thereof having been made in accordance with the provisions of the
Indenture) the Project is destroyed (in whole or in part) or is damaged by fire
or other casualty, unless otherwise provided in the Reimbursement Agreement or
the Mortgage executed in connection therewith or the Amended and Restated
Security Agreement dated as of November 22, 1993 between the Company and Bank of
America Illinois, the Company (a) shall promptly repair, rebuild or restore the
property damaged or destroyed to substantially the same condition as it existed
prior to the event causing such damage or destruction, with such changes,
alterations and
-16-
modifications (including the substitution and addition of other property as may
be desired by the Company and as will not impair operating unity or productive
capacity or the character of the Project, and (b) shall apply for such purpose
so much as may be necessary of any Net Proceeds of insurance resulting from such
claims for losses, as well as any additional moneys of the Company necessary
therefor.
Section 6.2. Condemnation. Unless the Company shall have exercised its
option to prepay the Note in full pursuant to the provisions of Section 7.4
hereof. in the event that title to, or the temporary use of, the Project or the
Project Site or any part hereof 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, the Company shall be obligated to continue
to make payments on the Note and all other payments specified herein. Unless
otherwise provided in the Reimbursement Agreement or the Mortgage executed in
connection therewith or the Amended and Restated Security Agreement, dated as of
November 22, 1993 between the Company and Bank of America Illinois, the Company
and the Trustee shall cause the Net Proceeds received by them or either of them
from any award made in such eminent domain proceedings to be paid to and held by
the Trustee in a separate trust account, and to be applied, at the option of the
Company, in one or more of the following ways as shall be directed in writing by
the Company:
(a) The prompt repair, restoration, relocation, modification or
improvement of the Project and the Project Site, to substantially the
same condition as existed prior to the exercise of said power of
eminent domain, or
(b) Redemption of the Bonds pursuant to Section 7.4 hereof.
Unless the Company shall have exercised its option to prepay the Note
in full pursuant to the provisions of Section 7.4 hereof within the time period
set forth therein, the condemnation award should be applied as provided in (a)
above.
ARTICLE VII
PREPAYMENT OF NOTE
Section 7.1. Optional Prepayment of Note. Prior to the Conversion Date
and so long as the Bonds are in a Short Period (as defined in the Indenture),
the Company may, at its option, prepay the Note in whole or in part (but only in
multiples of $100,000) at any time by paying to the Trustee a sum sufficient,
together with other funds in the Debt Service Fund and available for that
purpose, to pay (a) the principal of, and interest on that portion of the Bonds
then outstanding to be redeemed, and (b) all reasonable and necessary fees and
expenses of the Trustee, the Tender Agent, the Remarketing Agent, and any paying
agent accrued and to accrue through the redemption date. After the Conversion
Date or during an Adjustable Long Period, the Company may prepay the loan made
hereunder, in whole or in part, (in multiples of $5,000) on any Business Day,
upon 45 days' written notice to the Trustee (and if a Letter of Credit is then
in effect, with the written consent of the Bank), in a principal amount equal to
100% of the principal amount of Bond to be redeemed on such
-17-
Business Day, plus a premium on such principal amount equal to the premium to be
paid in connection with the redemption of the Bonds as provided in Section
501(A)(2) of the Indenture plus accrued interest to the redemption date.
Section 7.2. Mandatory Prepayment of Note in the Event of a
Determination of Taxability. The Company shall prepay the amounts due under this
Agreement and the Note in whole prior to the expiration of this Agreement and
prior to the full payment (or provision for full payment) of the Bonds on the
earliest practicable date (selected by the Trustee) within one hundred eighty
(180) days following a Determination of Taxability (as defined in the
Indenture).
In the event of an obligation to prepay under this Section 7.2, the
Company shall pay to the Trustee a sum sufficient, together with other funds
deposited into the Debt Service Fund and available for the purpose, to pay the
principal, premium and interest on the principal of all the Bonds then
outstanding and all reasonable and necessary fees and expenses of the Trustee
and any paying agent accrued and to accrue through final payment of the Bonds.
Section 7.3. Purchase of Bonds. The Company may at any time, and from
time to time, furnish moneys to the Trustee accompanied by a notice directing
such moneys to be provided to the Tender Agent to be applied (and if a Letter of
Credit is then in effect, with the written consent of the Bank), at such time as
they constitute Eligible Moneys, to the purchase of Bonds delivered pursuant to
Section 202(d) or 503 of the Indenture, which Bonds shall, at the direction of
the Company, be delivered to the Trustee for cancellation or, if proceeds of the
Letter of Credit are used for such purchase, to the Bank as Pledged Bonds.
Section 7.4. Extraordinary Event Prepayment of the Note. The Company
may, at its option, prepay the Note in whole or in part, without redemption
premium, within one year following the occurrence of any of the events specified
in Article VI of this Agreement by paying the Trustee a sum sufficient, together
with other funds in the Debt Service Fund and available for that purpose, to pay
(a) the principal of and interest upon all of the Bonds then outstanding, and
(b) all reasonable and necessary fees and expenses of the Trustee and the paying
agent accrued and to accrue through the redemption date.
Section 7.5. Notice of Prepayment. To exercise prepayment under this
Article VII, the Company shall give written notice to the Trustee at the time
specified in the Indenture.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
Section 8.1. Events of Default. The occurrence and continuance of any of
the following events shall constitute an "event of default" hereunder:
-18-
(a) Default in the due and punctual payment of any installment of principal
of (whether at stated maturity, upon required prepayment, acceleration or
otherwise) or any payment of interest or redemption premium on the Note;
(b) Failure by the Company to pay the Tender Price with respect to the
purchase price of the Bonds on the date such purchase price is to be paid;
(c) The dissolution or liquidation of the Company unless such dissolution or
liquidation is permitted by this Agreement;
(d) Failure by the Company to observe and perform any covenant, condition or
agreement in this Agreement on its part to be observed or performed (excluding,
however, any covenant, condition or agreement that, if not observed, would
result in an event of default as described in Section 8.1(a), (b) or (c)) for a
period of thirty days after written notice, specifying the failure and
requesting that it be remedied, given to the Company by the Trustee, unless the
Trustee agrees in writing to an extension of the time prior to its expiration;
provided, however, that with respect to this clause (d), if such failure of
performance shall be such that it cannot be corrected within such period, it
shall not constitute an event of default during the 90 day period beginning 31
days after the delivery of the above described notice (but shall, if not
corrected, constitute an Event of Default, thereafter) if: (i) such failure of
performance, in the reasonable opinion of the Trustee, is correctable without
material adverse effect on the Bonds; (ii) corrective action is instituted by or
on behalf of the Company within such period; and (iii) such corrective action is
diligently pursued until such failure of performance is corrected. The Trustee
may request (and may rely upon) from the Company or the Issuer a certificate to
the effect that the Company or the Issuer has instituted corrective action and
will diligently pursue such action and believes that its failure of performance
can be corrected through such action;
(e) A decree or order shall have been entered by a court of competent
jurisdiction constituting an order for relief under the Bankruptcy Code or
adjudging the Company insolvent or approving as properly filed a petition
seeking reorganization of the Company under the Bankruptcy Code or any other
federal or state law relating to bankruptcy or insolvency or appointing a
receiver or decreeing or ordering the winding up or liquidation of the affairs
of the Company or the sequestration of a substantial part of the property of the
Company, and any such decree or order shall remain in force undischarged and
unstayed for a period of ninety days;
(f) The Company shall file a petition seeking relief under the Bankruptcy
Code or shall suffer the imposition of an order thereunder or shall institute or
consent to the institution of bankruptcy or insolvency proceedings against it or
shall file a petition or answer or consent seeking reorganization or relief
(other than as a creditor) under the Bankruptcy Code or any other federal or
state law relating to bankruptcy or insolvency or shall consent to the filing of
any such petition or shall consent to the appointment of a receiver or shall
make an assignment for the benefit of
-19-
creditors or shall admit in writing its inability to pay its debts generally
as they become due or shall fail to pay its debts generally as they become
due, or action shall be taken by the Company in furtherance of any of the
aforesaid purposes:
(g) If the Trustee receives notice from the Bank on or before the date
or dates specified in the Letter of Credit or Alternate Letter of Credit
following a drawing on the Letter of Credit or Alternate Letter of Credit
for interest that it will not reinstate to the stated amount of its Letter
of Credit or Alternate Letter of Credit an amount to cover such Interest; or
(h) Receipt of Written Notice from the Bank that an event of default as
defined in the Reimbursement Agreement has occurred and that the Letter of
Credit or Alternate Letter of Credit, as the case may be, will expire not
less than 30 days after such notice.
Section 8.2. Remedies on Default. Whenever any Event of Default referred to
in Section 8.1 shall have happened and be continuing, the Trustee:
(a) Shall to the extent that the Indenture so requires or permits,
declare the Note and all amounts payable thereunder, whether by acceleration
of maturity or otherwise, to be immediately due and payable.
(b) The Trustee may take whatever action may appear necessary or
desirable to collect the amounts due and to become due under this Agreement
and the Note, or to enforce performance and observance of any obligation,
agreement or covenant of the Company under this Agreement and the Note.
Section 8.3. Application of Moneys. All moneys collected by the Trustee
under Section 8.2 shall be applied as follows:
FIRST: To pay any sums required to be paid by the Company pursuant to
this Agreement, the Note, the Indenture or the Bonds other than
principal, premium and interest on the Note or the Bonds, including
specifically any amounts required to be paid to the United States of America
pursuant to Section 148(f) of the Code.
SECOND: To pay the whole amount then due, owing and unpaid upon the
Note for principal, premium, if any, and interest on the Bonds in accordance
with Section 705 of the Indenture. Payment shall be made upon presentation
of the Note and the notation on the Note of the payment, if partially paid,
or the surrender and cancellation of the Note, if fully paid.
THIRD: To the Bank as payment on behalf of the Company of all of its
obligations under the Reimbursement Agreement, as shall be certified in
writing by the Bank to the Trustee.
-20-
FOURTH: To pay the Company, its successors or assigns, upon the written
request of the Company or to whosoever may be lawfully entitled to receive
the same upon its written request or as any court of competent jurisdiction
may direct.
Section 8.4. Remedies Cumulative. No remedy granted by this Agreement is
intended to be exclusive of any other remedy. All available remedies shall be
cumulative.
Section 8.5. Delay or Omission Not a Waiver. No delay or omission of the
Trustee to exercise any right or power accruing upon any Event of Default shall
impair the right or power, or shall be construed to be a waiver of the Event of
Default or an acquiescence therein. Every power and remedy may be exercised as
often as the Trustee deems expedient.
Section 8.6. Remedies Subject to Provisions of Law. All rights, remedies
and powers provided by this Article may be exercised only to the extent that
their exercise does not violate any applicable provision of law. All the
provisions of this Article are intended to be subject to all applicable
mandatory provisions of law which may be controlling and to be limited to the
extent necessary so that they will not render this Agreement invalid or
unenforceable under the provisions of any applicable law.
ARTICLE IX
SUPPLEMENTS AND AMENDMENTS TO THIS AGREEMENT
Section 9.1. Supplements and Amendments to This Agreement. Reference is made
to Article X of the Indenture.
ARTICLE X
MISCELLANEOUS
Section 10.1. Binding Effect. This Agreement shall inure to the benefit of
and shall be binding upon the Issuer, the Company and their respective
successors and assigns.
Section 10.2. Severability. In the event any provision of this Agreement
shall be held invalid or unenforceable by any court of competent jurisdiction,
that holding shall not invalidate or render unenforceable any other provisions
hereof.
Section 10.3. Amounts Remaining in Debt Service Fund. Any amounts remaining
in the Debt Service Fund upon expiration or termination of this Agreement in
accordance with the Indenture shall belong to and be paid to the Company by the
Trustee.
Section 10.4. Amendments, Changes and Modifications. After the Bonds are
issued and before they are paid in full (or provision for payment in full is
made), this Agreement may not be amended, assigned or terminated without the
written consent of the Trustee.
-21-
Section 10.5. Execution in Counterparts. This Agreement may be executed in
several counterparts, each of which shall be an original.
Section 10.6. Notices. All notices, certificates, payments or other
communications hereunder shall be sufficiently given and shall be deemed given
when delivered or mailed by registered or certified mail, postage prepaid, or
overnight express mail addressed as follows: if to the Issuer, at the
Jacksonville Municipal Building, 000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxx
00000, Attention of its City Clerk; if to the Bank, at 000 Xxxxx XxXxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxxx; if to the Company, at 0000
Xxxxx Xxxx Xxxxxx, Xxxxxxx Xxxx, Xxxxxxxx 00000, Attention of its Vice
President/Finance with a copy to the attention of its President; or to such
other address as may hereafter be furnished by notice.
Section 10.7. References to Bonds Ineffective after Bonds Are Paid. Upon
payment in full of the Bonds (or provision for payment thereof having been made
in accordance with the provisions of the Indenture) and payment of all fees and
charges of the Issuer, Trustee, Tender Agent, and any paying agent, all
references in this Agreement to the Bonds and the Trustee shall be ineffective
and neither the Trustee nor the holders of the Bonds shall thereafter have any
rights hereunder, except those that shall have theretofore vested.
Section 10.8. Agreement for Benefit of Parties Hereto. Nothing in this
Agreement, express or implied, is intended to give to any person other than the
parties hereto and the holder of the Note, any right, remedy or claim under or
by reason of this Agreement other than the Bank (and this Agreement shall inure
to the benefit of the Bank).
Section 10.9. Waiver. No waiver of any of the provisions of this Agreement
shall be effective and binding unless set forth in a written notice and no
waiver of one provision shall be deemed or shall constitute a waiver of any
other provision hereof (whether or not similar) nor shall such waiver constitute
a continuing waiver or a waiver of such provision in any other instance.
Section 10.10. Captions and Table of Contents. The captions herein and the
Table of Contents are inserted only as a matter of convenience and do not in any
way define, limit, construe or describe the scope or intent of this Agreement or
any section thereof or in any other way affect this Agreement.
Section 10.11. Survival of Covenants, Representations and Warranties. All
covenants, representations and warranties made by the Company and the Issuer
contained herein or in any other document, certificate or instrument delivered
in connection with the sale of any of the Bonds shall be continuing and shall
survive delivery of the Bonds and the other transactions contemplated by this
Agreement and the Indenture.
Section 10.12. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois.
-22-
Section 10.13. Holidays. Where a date of payment on the Note is not a
Business day then payment may be made on the first Business Day thereafter.
-23-
IN WITNESS WHEREOF, the Issuer and the Company have caused this Agreement to
be executed all as of the date first above written.
CITY OF JACKSONVILLE, ILLINOIS
By: [SIGNATURE APPEARS HERE]
------------------------------------
Mayor
[SEAL]
ATTEST:
[SIGNATURE APPEARS HERE]
----------------------------------
Clerk
AGI INCORPORATED
By:
------------------------------------
President
ATTEST:
----------------------------------
Secretary
-24-
IN WITNESS WHEREOF, the Issuer and the Company have caused this Agreement to
be executed all as of the date first above written.
CITY OF JACKSONVILLE, ILLINOIS
By:
------------------------------------
Mayor
[SEAL]
ATTEST:
----------------------------------
Clerk
AGI INCORPORATED
By: /s/ Xxxxxxx Xxxxx
------------------------------------
President
ATTEST:
/s/ Xxxxx X. Xxxxxxxxx
----------------------------------
Secretary
-25-
EXHIBIT A
(Description of the Project)
The Project consists of the acquisition of land, construction of an
industrial building and installation of the following equipment for use as a
manufacturing facility, all located within the boundaries of the Issuer:
DESCRIPTION ESTIMATED COST
Land $ 60,000
Building 3,452,189
Equipment 3,741,870
Other (Capitalized Interest) 86,003
$7,340,062
=========
The Project Site is described as follows:
The Company is acquiring, constructing and equipping a new 76,000 square
foot facility in Jacksonville, Illinois. The plant will be dedicated to the
production of booklets, folders and inserts for CD and cassette packaging to
service the Company's music and multimedia customers. The Company will focus its
production of these products in Jacksonville. The facility will be equipped
primarily with new machinery which will facilitate improved cycle times and
lower order quantities. It will also better position the Company for additional
growth in these markets. The plant is expected to begin operations at the end of
the first quarter of 1995. The Company estimates that it will hire 100
additional workers to operate the Jacksonville facility.
EXHIBIT B
(Form of NOTE)
AGI INCORPORATED
PROMISSORY NOTE
FOR VALUE RECEIVED, AGI Incorporated (the "Company"), an Illinois
Corporation, promises to pay to the City of Jacksonville, Illinois, or
registered assigns, on or before 2:00 p.m. (Jacksonville time) (a) on February
1, 2026, a sum which, together with other moneys available therefor in the Debt
Service Fund under the Trust Indenture (the "Indenture") dated as of January 1,
1995, between the City of Jacksonville, Illinois (the "Issuer"), and Bank One,
Springfield, Springfield, Illinois, as trustee (the "Trustee"), will equal the
Principal Amount of the Bonds (defined below) which becomes due on that date;
(b) on the first business day of each month commencing February 1, 1995, or
otherwise when due a sum which, together with other moneys available therefor in
the Debt Service Fund under the Indenture, will equal the interest which becomes
due on the Bonds outstanding on that date; (c) on the dates fixed for redemption
or tender of the Bonds in whole or in part, the principal of and premium, if
any, in a maximum amount of five percent of the Principal Amount, and interest
on the Bonds to be redeemed to the date fixed for redemption; and (d)
immediately upon a declaration of acceleration of the maturity of the Bonds by
the Trustee, the principal, interest and premium, if any, in a maximum amount of
five percent of the Principal Amount, to the date of declaration of
acceleration.
All payments of principal, premium, if any, and interest are to be made
directly to the Trustee (or subsequent registered owner) for the account of the
Issuer in immediately available funds. This Note is security for the payment of
the Issuer's Multi-Mode Industrial Project Revenue Bonds, Series 1995 (AGI
Incorporated, Project), issued in the principal amount of $7,640,000 (the
"Principal Amount") pursuant to the Indenture (the "Bonds"). All of the terms,
conditions and provisions of the Indenture are incorporated into this Note by
reference.
This Note is issued pursuant to the Loan Agreement (the "Loan Agreement")
dated as of January 1, 1995, between the Issuer and the Company and is entitled
to the benefits, and is subject to the conditions, thereof. The obligation of
the Company to make the payments required under this Note is absolute and
unconditional without any defense or right of setoff, counterclaim or recoupment
by reason of any default by the Issuer under the Loan Agreement or under any
other agreement between the Company and the Issuer or out of any indebtedness or
liability at any time owing to the Company by the Issuer or for any other
reason.
This Note is subject to prepayment under the terms and conditions, and in
the amounts, provided in Article VII of the Loan Agreement.
This Note is transferable only upon the books of the Trustee kept for that
purpose at its principal office, upon surrender for transfer of this Note at the
principal office of the Trustee, endorsed for transfer by the registered owner
or accompanied by an assignment executed by the registered owner or his
authorized attorney. Upon such surrender for transfer, the Trustee shall
validate and deliver in the name of the transferee a new Note which shall have
been executed by the Company.
If the Company fails to make any of the payments under this Note, the amount
unpaid shall continue as an obligation of the Company until fully paid and shall
bear interest (to the extent permitted by law) until paid at a per annum rate of
interest equal to the per annum rate then in effect on the Bonds.
If an "Event of Default" occurs under Section 8.1 of the Loan Agreement, the
principal of this Note may be declared due and payable as provided in Article
VIII of the Loan Agreement.
Where a date of payment is not a business day in the City of Chicago,
Illinois, or New York, New York, then payment may be made on the first business
day thereafter.
All amounts payable under the terms of this Note are payable without relief
from valuation and appraisement laws and with attorneys' fees. The maker and any
endorsers waive demand, presentment for payment, protest, notice of protest and
notice of non-payment or dishonor and consent to any and all extensions of time
for payment without notice.
All terms used in this Note which are defined in the Loan Agreement and not
in this Note shall have the meanings assigned to them in the Loan Agreement.
IN WITNESS WHEREOF, the Company has caused this Note to be executed and
delivered this _______ day of January, 1995.
AGI INCORPORATED
By:
----------------------------------
President
ATTEST:
---------------------------------
Secretary
-2-
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby assigns and transfers, unto Bank
One, Springfield, Springfield, Illinois, as Trustee (the "Trustee") under that
certain Trust Indenture between the City of Jacksonville, Illinois and the
Trustee dated as of January 1, 1995, the within Note, together with interest
accruing thereon and all right, title and interest thereto.
Dated:
--------------------------
CITY OF JACKSONVILLE, ILLINOIS
------------------------------------------
Mayor
In the presence of:
-----------------------
Clerk
-3-
