Exhibit 10.2.1
LOAN AGREEMENT
Between
BUSINESS FINANCE AUTHORITY OF THE STATE OF NEW HAMPSHIRE
And
APEX TELECOMMUNICATIONS MANUFACTURING, INC.
********************************************************
RELATING TO
$3,500,000
BUSINESS FINANCE AUTHORITY OF THE STATE OF NEW HAMPSHIRE
ADJUSTABLE RATE DEMAND INDUSTRIAL DEVELOPMENT
REVENUE BONDS, SERIES 1999
(APEX TELECOMMUNICATIONS MANUFACTURING, INC. PROJECT)
********************************************************
Dated as of
September 1, 1999
TABLE OF CONTENTS
(This Table of Contents is not a part of the
Loan Agreement but is for convenience of reference only.)
Page
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ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION...................................................... 2
Section 1.1. Definitions ............................................................................... 2
Section 1.2. Rules of Construction ..................................................................... 6
ARTICLE II REPRESENTATION AND WARRANTIES.............................................................. 7
Section 2.1. Representations and Warranties by the Issuer .............................................. 7
Section 2.2. Representations and Warranties by the Borrower ............................................ 7
ARTICLE III COMPLETION OF THE PROJECT; ISSUANCE OF THE SERIES 1999
BONDS...................................................................................... 9
Section 3.1. Acquisition, Construction,Installation, Relocation, Equipping and
Improvement ............................................................................... 9
Section 3.2. Plans and Specifications .................................................................. 9
Section 3.3. Issuance of the Series 1999 Bonds; Application of Proceeds ................................ 9
Section 3.4. Disbursements from the Project Fund ....................................................... 10
Section 3.5. Borrower Required to Pay Costs in Event Project Fund Insufficient ......................... 12
Section 3.6. Completion Date ........................................................................... 12
Section 3.7. Investment of Fund Moneys ................................................................. 13
ARTICLE IV LOAN BY ISSUER; REPAYMENT OF THE LOAN; LOAN PAYMENTS
AND ADDITIONAL PAYMENTS.................................................................... 14
Section 4.1. Loan Repayment; Delivery of Note .......................................................... 14
Section 4.2. Additional Payments ....................................................................... 15
Section 4.3. Place of Payments ......................................................................... 15
Section 4.4. Obligations Unconditional ................................................................. 15
Section 4.5. Assignment of Agreement and Revenues ...................................................... 16
Section 4.6. Payments to Remarketing Agent ............................................................. 16
Section 4.7. Letter of Credit .......................................................................... 16
ARTICLE V PARTICULAR COVENANTS....................................................................... 17
Section 5.1. Indemnification ........................................................................... 17
Sale or Transfer of Project; Corporate Existence of the Borrower........................... 18
Section 5.3. Assignment by Issuer ...................................................................... 18
Section 5.4. Reference to Bonds Ineffective After Bonds Paid ........................................... 18
Section 5.5. Borrower's Performance under Indenture .................................................... 18
Section 5.6. Borrower Not to Adversely Affect Tax-Exempt Status of Interest on
Segregated Series 1999 Bonds .............................................................. 19
Section 5.7. Compliance with Laws ...................................................................... 19
Section 5.8. Taxes, Permits, Utility and Other Charges ................................................. 19
Section 5.9. Right of Access ........................................................................... 19
Section 5.10. Litigation Notice ......................................................................... 20
Section 5.11. Removal of Portions of the Project......................................................... 20
ARTICLE VI REDEMPTION OF SERIES 1999 BONDS............................................................ 21
Section 6.1. Optional Redemption ....................................................................... 21
Section 6.2. Extraordinary Optional Redemption ......................................................... 21
Section 6.3. Mandatory Redemption in Event of Loss of Tax Exemption or Expiration
of Letter of Credit ....................................................................... 22
Section 6.4. Mandatory Redemption ...................................................................... 23
Section 6.5. Actions by Issuer ......................................................................... 23
Section 6.6. Required Deposits for Optional Redemption ................................................. 23
ARTICLE VII DEFAULTS AND REMEDIES...................................................................... 24
Section 7.1. Events of Default ......................................................................... 24
Section 7.2. Remedies on Default ....................................................................... 25
Section 7.3. No Remedy Exclusive ....................................................................... 27
Section 7.4. Agreement to Pay Attorney's Fees and Expenses ............................................. 27
Section 7.5. Waiver of Events of Default ............................................................... 27
Section 7.6. Remedies Subject to Provisions of Law ..................................................... 27
Section 7.7. Remedies Under Uniform Commercial Code .................................................... 27
ARTICLE VIII MISCELLANEOUS.............................................................................. 28
Section 8.1. Term of Agreement ......................................................................... 28
Section 8.2. Notices ................................................................................... 28
Section 8.3. Binding Effect ............................................................................ 28
Section 8.4. Severability .............................................................................. 29
Section 8.5. Amounts Remaining in Bond Fund ............................................................ 29
Section 8.6. Amendments, Changes and Modifications ..................................................... 29
Section 8.7. Execution Counterparts .................................................................... 30
Section 8.8. Captions .................................................................................. 30
Section 8.9. Governing Law ............................................................................. 30
Exhibit A The Project................................................................................ A-1
Exhibit B The Project site........................................................................... B-1
Exhibit C Promissory Note............................................................................ C-1
Exhibit D Form of Disbursement request............................................................... D-1
ii
LOAN AGREEMENT
THIS LOAN AGREEMENT (as the same may be amended or supplemented, the
"Agreement"), is made as of September 1, 1999, between the BUSINESS FINANCE
AUTHORITY OF THE STATE OF NEW HAMPSHIRE, a body corporate and politic as an
agency of the State of New Hampshire (the "Issuer"), and APEX TELECOMMUNICATIONS
MANUFACTURING, INC., a New Hampshire corporation (the "Borrower"), under the
following circumstances:
A. Pursuant to the provisions of RSA 162-I (the "Act"), in order to
create or preserve jobs and employment opportunities and improve the economic
welfare of the people of the State of New Hampshire, the Issuer may issue
revenue bonds to provide funds for the making of loans for the acquisition,
construction, installation or equipping of a "project" (as defined in the Act)
or parts thereof.
B. The Issuing Authority has found and determined that the Project,
as defined herein, is a "project" and an "industrial facility" under the Act,
and that the proposed financing of the Project by the Issuer and the
acquisition, construction, installation, renovation and equipping of the Project
by the Borrower will serve one or more needs and implement one or more of the
purposes set forth in the Act, will preserve or increase the social or economic
prosperity of the State and one or more of its political subdivisions, and will
promote the general welfare of the State's citizens.
C. Pursuant to the Act the actions authorized by the Issuing
Authority have been submitted by resolution to the Governor and Council; and
such recommendation from the Issuing Authority as to the passage of said
resolution, after a hearing, has been confirmed by the Governor and the Council;
and the Governor and Council have found that the proposed financing, operation
and use of the facility to manufacture products for the telecommunications
industry, will serve a public purpose and provide a public benefit; and the
Governor and the Council have determined that the Issuer's financing of the
Project will be within the policy of, and the authority conferred by, the Act.
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto covenant, agree and bind
themselves as follows (provided that any obligation of the Issuer created by or
arising out of this Agreement shall not be a general debt on its part but shall
be payable solely out of Revenues, as defined herein):
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.1. Definitions. In addition to the words and terms defined
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in the recitals and elsewhere in this Agreement, the words and terms defined in
this Article I shall, for all purposes of this Agreement, have the meanings
herein specified, except as otherwise expressly provided or unless the context
otherwise requires. Those words and terms not expressly defined herein and used
herein with initial capitalization where rules of grammar do not otherwise
require capitalization, or which are otherwise defined terms under the
Indenture, as hereinafter defined, shall have the meanings set forth in the
Indenture.
"Act" means RSA 162-I.
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"Additional Bonds" means bonds which may be issued under Section 2.07
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of the Indenture.
"Additional Notes" means any nonnegotiable promissory note or notes,
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in addition to the Project Note, delivered by the Borrower to the Trustee in
connection with the issuance of Additional Bonds, as provided herein.
"Additional Payments" means amounts required to be paid by the
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Borrower pursuant to the provisions of Section 4.2 hereof.
"Alternate Letter of Credit" means an Alternate Letter of Credit as
--------------------------
defined in the Indenture.
"Authority's Service Charge" means payments to the Issuer for its own
--------------------------
use of $26,250, payable on the date of original issuance of the Series 1999
Bonds.
"Authorized Borrower Representative" means the person at the time
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designated to act on behalf of the Borrower by written instrument furnished to
the Issuer and the Trustee, containing the specimen signature of such person and
signed by an officer of the Borrower. Such instrument may designate an
alternate or alternates.
"Bond Counsel" means Xxxx, Xxxxxxx & Xxxxxxxx LLP or an attorney-at-
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law (other than an employee of the Borrower) satisfactory to the Trustee and
Issuer and nationally recognized as experienced in matters relating to the
exclusion from gross income for federal income tax purposes of interest on bonds
of states and political subdivisions.
"Bond Documents" means this Agreement, the Indenture, the Bonds, the
--------------
Letter of Credit, the Letter of Credit Agreement, the Project Note, the Tax
Regulatory Agreement and the Bond Placement Agreement.
"Bond Fund" means the Bond Fund created in the Indenture.
---------
"Bond Legislation" means the Bond Legislation as defined in the
----------------
Indenture.
2
"Bond Placement Agreement" means, as to the Series 1999 Bonds, the
------------------------
Bond Placement Agreement dated as of or after the date of the Bond Legislation
for the Series 1999 Bonds but no later than the date of initial delivery of the
Series 1999 Bonds, among the Issuer, the Placement Agent, the Letter of Credit
Bank and the Borrower, and as to any Additional Bonds, the Bond Placement
Agreement as defined in the Bond Legislation or supplemental indenture providing
for the issuance of the Additional Bonds.
"Bond Purchase Date" means Bond Purchase Date as defined in the
------------------
Indenture.
"Bond Service Charges" means, for any period or payable at any time,
--------------------
the principal of, premium, if any, and interest on the Bonds for that period or
payable at that time whether due at maturity or upon acceleration or redemption.
"Bonds" means the Series 1999 Bonds and any Additional Bonds.
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"Business Day" means a day of the year, other than (a) a Saturday; (b)
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a Sunday; (c) a day on which commercial banks located in any city in which the
principal corporate trust office of the Trustee or the principal office of the
Letter of Credit Bank is located are required or authorized by law to remain
closed; or (d) a day on which the New York Stock Exchange is closed.
"Code" means the Internal Revenue Code of 1986, as amended from time
----
to time. References to the Code and Sections of the Code include relevant
applicable regulations and proposed regulations thereunder and any successor
provisions to those Sections, regulations or proposed regulations.
"Completion Date" means the date of completion of the Project
---------------
evidenced in accordance with the requirements of Section 3.6 hereof.
"Construction Period" means the period between the beginning of the
-------------------
acquisition, construction, installation, renovation, equipment or improvement of
the Project or the date on which the Series 1999 Bonds are delivered to the
Original Purchaser, whichever is earlier, and the Completion Date.
"Event of Default" means any of the events described in Section 7.1
----------------
hereof.
"Executive" means the Chairman, Vice Chairman or Executive Director of
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the Issuer..
"Indenture" means the Trust Indenture of even date herewith between
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the Issuer and the Trustee, as amended or supplemented from time to time.
3
"Interest Payment Date" means, as to the Series 1999 Bonds, each date
---------------------
set forth as such in the form of Series 1999 Bonds contained in the Indenture,
and as to Additional Bonds, each date designated as an Interest Payment Date in
the form of Bond for which provision is made in the applicable supplemental
indenture or Bond Legislation.
"Letter of Credit" means (A) the irrevocable letter of credit
----------------
designated herein as "Series 1999 Letter of Credit", to be issued by the Letter
of Credit Bank and delivered to the Trustee on the same date as the delivery of
the Series 1999 Bonds to the Original Purchaser thereof, and being an
irrevocable obligation to make payment to the Trustee of up to the amounts
therein specified with respect to (a) the principal amount of the outstanding
Series 1999 Bonds to enable the Trustee to pay (i) the principal amount of the
Series 1999 Bonds when due at maturity or upon redemption or acceleration on the
occurrence of an Event of Default, and (ii) an amount equal to the purchase
price of any Series 1999 Bonds tendered for purchase by the holders thereof,
plus (b) the amount of interest due on the Series 1999 Bonds, but not to exceed
56 days' maximum accrued interest to enable the Trustee to pay interest on the
Series 1999 Bonds, as the same may be transferred, reissued, extended or
replaced in accordance with this Indenture and the Letter of Credit, and (B)
upon the issuance and effectiveness thereof, any Alternate Letter of Credit.
"Letter of Credit Agreement" means the Reimbursement Agreement, dated
--------------------------
as of even date with this Agreement between the Letter of Credit Bank and the
Borrower, as amended or supplemented from time to time.
"Letter of Credit Bank" means The Huntington National Bank, a national
---------------------
banking association organized and existing under the laws of the United States
of America, with its principal office in Columbus, Ohio, and its successors and
assigns. Upon issuance and effectiveness of any Alternate Letter of Credit,
"Letter of Credit Bank" shall mean the issuer thereof and its successors and
assigns.
"Letter of Credit Termination Date" means the expiration dates of the
---------------------------------
Letter of Credit or any Alternate Letter of Credit.
"Loan" means the loan by the Issuer to the Borrower of the proceeds
----
from the sale of the Bonds.
"Loan Payments" means the amounts required to be paid by the Borrower
-------------
in repayment of the Loan pursuant to the provisions of the Notes and Section 4.1
of this Agreement.
"Notes" means the Project Note and any Additional Notes.
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"Original Purchaser" means, as to the Series 1999 Bonds, the Person or
------------------
Persons who are the beneficial owners at the time the Series 1999 Bonds are
initially issued and delivered and, as to Additional Bonds, the Person or
Persons who are the beneficial owners at the time such Additional Bonds are
initially issued and delivered.
"Payment in Full of the Bonds" means the first date when there are no
----------------------------
longer any Bonds deemed to be outstanding under the provisions of the Indenture.
4
"Person" or "person" or words importing persons mean firms,
------ ------
associations, partnerships (including without limitation, general and limited
partnerships), joint ventures, societies, estates, trusts, corporations, limited
liability companies, public or governmental bodies, other legal entities and
natural persons.
"Plans and Specifications" means the preliminary plans and
------------------------
specifications describing the Project Facilities as now prepared and as they may
be changed as herein provided from time to time.
"Project" means the real, personal or real and personal property,
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including undivided interests or other interests therein, identified in Exhibit
-------
A attached hereto as a part hereof, or acquired, constructed or installed as a
-
replacement or substitution therefor or an addition thereto, or as may result
from any revision thereof in accordance with the provisions of this Agreement.
"Project Costs" means the costs of the Project specified in Section
-------------
3.4.
"Project Facilities" means the Project and the Project Site.
------------------
"Project Fund" means the Project Fund created in the Indenture.
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"Project Note" means the promissory note of the Borrower, dated as of
------------
even date with the Series 1999 Bonds initially issued, in the form attached to
the Agreement as Exhibit C and in the principal amount of $3,500,000, evidencing
---------
the obligations of the Borrower to make Loan Payments.
"Project Site" means the real estate and interests in real estate
------------
constituting the site of the Project, as described in Exhibit B attached hereto
---------
as a part hereof.
"Rebate Fund" means the Rebate Fund created in the Tax Regulatory
-----------
Agreement.
"Remarketing Agent" means the Remarketing Agent as defined in the
-----------------
Indenture.
"Revenues" means any receipts received by the Issuer in connection
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with the Agreement, including (a) the Loan Payments, (b) all moneys and
investments in the Bond Fund, including without limitation moneys received by
the Trustee under or pursuant to the Letter of Credit, (c) any moneys and
investments in the Project Fund, and (d) all income and profit from the
investment of the foregoing moneys.
"Security Agreement" means those certain mortgages, security
------------------
agreements, credit agreements, loan agreements, pledge agreements, guaranties,
no pledge agreements or financing statements, dated as of or prior to the
Indenture, relating to the Project and the Letter of Credit Agreement, between
the Borrower, as debtor, and the Letter of Credit Bank, as the secured party, as
amended or supplemented from time to time.
"Series 0000 Xxxxx" means the Issuer's $3,500,000 Adjustable Rate
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Demand Industrial Development Revenue Bonds, Series 1999 (Apex
Telecommunications Manufacturing, Inc. Project).
5
"State" means the State of New Hampshire.
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"Tax Regulatory Agreement" means the Tax Regulatory Agreement dated as
------------------------
of September 1, 1999 among the Borrower, the Issuer and the Trustee, as amended
or supplemented from time to time.
"Trustee" means the Trustee at the time acting as such under the
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Indenture, originally The Huntington National Bank, and any successor Trustee as
determined or designated under or pursuant to the Indenture.
"Unassigned Issuer Rights" means all rights of the Issuer to be paid
------------------------
the Authority's Service Charges, to receive Additional Payments under Section
4.2 hereof, to be held harmless and indemnified under Section 5.1 hereof, to be
reimbursed for attorney's fees and other expenses under Section 7.4 hereof and
to give or withhold consents to amendments, changes, modifications, alterations
or termination hereof under Section 8.6 hereof.
Section 1.2. Rules of Construction.
---------------------
(a) Unless the context clearly indicates to the contrary, the words
"herein", "hereby", "hereunder", "hereof", "hereinbefore", "hereinafter" and
other equivalent words refer to this Agreement and not solely to the particular
portion thereof in which any such word is used. Words importing the singular
number shall include the plural number and vice versa, and any pronoun used
herein shall be deemed to cover all genders.
(b) Any reference herein to the Issuer or any officer or official
thereof shall include those which succeed to their respective functions, duties
or responsibilities pursuant to or by operation of law or who are lawfully
performing such functions. Any reference herein to any other person or entity
shall include his or its respective successors and assigns. Any reference
herein to a section or provision of the New Hampshire Revised Statutes Annotated
shall include such section or provision or chapter as from time to time amended,
modified, revised, supplemented or superseded; provided that no such change
shall be deemed applicable by reason of this provision if such change would in
any way constitute an impairment of the rights of the Issuer, the Letter of
Credit Bank, the holders of Bonds or the Borrower under this Agreement.
(End of Article I)
6
ARTICLE II
REPRESENTATIONS AND WARRANTIES
------------------------------
Section 2.1. Representations and Warranties by the Issuer. The
--------------------------------------------
Issuer represents and warrants that: (a) it is a body corporate and politic as
an agency of the State; (b) it has duly accomplished all conditions necessary to
be accomplished by it prior to the issuance and delivery of the Series 1999
Bonds and the execution and delivery of the Bond Documents to which it is a
party; (c) it is empowered to enter into the transactions contemplated by the
Bond Documents to which it is a party; (d) it will do all things in its power in
order to maintain its existence or assure the assumption of its obligations
under the Bond Documents to which it is a party by any successor public body;
and (e) it will execute and deliver to the Borrower Internal Revenue Service
Form 8038 which shall contain the information required to be filed pursuant to
Section 149(e) of the Code, but solely on the basis of information supplied by
the Borrower.
The Issuer makes no representations, either express or implied, as to
the suitability or utility of the Project for any purposes or needs of the
Borrower, or as to the present or any future condition of the Project, and shall
not be liable to the Borrower or to any other person for any latent or patent
defect in the Project. Furthermore, nothing contained in the Bond Documents
shall be construed to require or authorize the Issuer to operate the Project
itself or to conduct any business enterprise in connection therewith.
Section 2.2. Representations and Warranties by the Borrower. The
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Borrower represents and warrants that:
(a) The Borrower is a corporation duly organized, validly existing
and in good standing under the laws of the state of its incorporation.
(b) The Borrower has the power and authority and has been duly
authorized to enter into the Bond Documents to which the Borrower is a party,
and perform all of the Borrower's obligations thereunder, and no approval or
other action by any governmental authority or agency or other person is required
in connection therewith except such as have been obtained as of the date of
execution and delivery hereof.
(c) The willingness of the Issuer to issue the Series 1999 Bonds for
purposes of financing costs of acquiring, constructing, renovating, equipping
and installing the Project has induced the Borrower to locate the Project within
the boundaries of the Issuer.
(d) The Project will create or preserve jobs and employment
opportunities within the boundaries of the State and the Issuer, thereby
improving the economic prosperity and general welfare of the State and the
Issuer.
(e) The Borrower is not subject to any contractual or other
limitation or provision of any nature whatsoever which in any way limits,
restricts or prevents the Borrower from entering into the Bond Documents to
which the Borrower is a party, or performing any of the Borrower's obligations
thereunder; and the execution and delivery of the Bond Documents to which the
Borrower is a party, the consummation of the transactions contemplated thereby,
and
7
the fulfillment of or compliance with the terms and conditions thereof will not
conflict with or result in a breach of the terms, conditions or provisions of
the Borrower's Articles of Incorporation, Bylaws or other organizational
document, resolutions or actions of its shareholders or Board of Directors, or
any committee thereof, nor of any restriction, agreement or instrument to which
the Borrower is a party or by which the Borrower is bound, or of any law or
regulation, or of any writ, order or decree of any court or governmental agency,
or constitute a default under any of the foregoing, or result in the creation or
imposition of any lien, charge or encumbrance upon any of the properties or
assets of the Borrower pursuant to the terms of any of the foregoing, except as
contemplated by the terms of the Bond Documents.
(d) The Bond Documents to which the Borrower is a party have been
duly authorized, executed and delivered by the Borrower and constitute legal,
valid and binding obligations of the Borrower in accordance with their
respective terms.
(e) The acquisition, construction, installation, renovation,
equipping and operation of the Project will comply with all applicable zoning,
planning, building, environmental and other regulations of the governmental
authorities having jurisdiction of the Project, and all necessary permits,
licenses, consents and permissions necessary for the Project have been or will
be obtained.
(f) Except as disclosed to the Letter of Credit Bank, there are no
actions, suits or proceedings pending, or to the knowledge of the Borrower
threatened, against or affecting the Borrower before any court or before any
governmental or administrative body or agency which might result in any material
adverse change in the operations, business, property, assets or condition
(financial or otherwise) of the Borrower; and the Borrower is not in default
with respect to or under any applicable statute, rule, writ, injunction, decree,
order or regulation of any governmental agency which might have consequences
that would materially and adversely affect the operations, business, property or
assets of the Borrower.
(g) In connection with any lease or grant by the Borrower of the use
of the Project, the Borrower shall require that the lessee or user of any
portion of the Project shall not use that portion of the Project in any manner
which would violate the covenants set forth in the Tax Regulatory Agreement.
(End of Article II)
8
ARTICLE III
COMPLETION OF THE PROJECT;
ISSUANCE OF THE SERIES 1999 BONDS
---------------------------------
Section 3.1. Acquisition, Construction, Installation, Renovation,
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Equipping and Improvement. The Borrower (a) has acquired a fee simple title or
-------------------------
leasehold interest to the Project Site and shall construct, install, renovate,
equip and improve the Project on the Project Site with all reasonable dispatch
and in accordance with the Plans and Specifications, (b) shall pay when due all
fees, costs and expenses incurred in connection with that acquisition,
construction, installation, renovation, equipping and improvement from funds
made available therefor in accordance with this Agreement or otherwise, (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 or instruction in connection with
the acquisition, construction, installation, renovation, equipping and
improvement of the Project, and shall enforce the provisions of any contract,
agreement, obligation, bond or other performance security with respect thereto,
and (d) shall proceed with due diligence to complete the Project.
Section 3.2. Plans and Specifications. The Plans and Specifications
------------------------
have been or will be approved by all necessary governmental authorities and
filed with the Letter of Credit Bank. The Borrower may revise the Plans and
Specifications from time to time, provided that no revision shall be made which
would change the Project purposes to other than purposes permitted by the Act.
Any such change orders shall not affect the stated amount of the Letter of
Credit, and all increases in the cost of the Project as the result of such
change orders shall be paid from the Borrower's funds.
Section 3.3. Issuance of the Series 1999 Bonds; Application of
-------------------------------------------------
Proceeds. To provide funds to make the Loan for purposes of assisting the
--------
payment of the Project Costs, the Issuer will issue, sell and deliver the Series
1999 Bonds to the Original Purchaser. The Series 1999 Bonds will be issued
pursuant to the Indenture in the aggregate principal amount, will bear interest,
will mature and will be subject to redemption as set forth therein. The
Borrower hereby approves the terms and conditions of the Indenture and the
Series 1999 Bonds, and the terms and conditions under which the Series 1999
Bonds will be issued, sold and delivered.
The proceeds from the sale of the Series 1999 Bonds shall be loaned to
the Borrower and paid over to the Trustee for the benefit of the Borrower and
the Holders of the Series 1999 Bonds and deposited as follows: (a) a sum equal
to any accrued interest paid by the Original Purchaser shall be deposited in the
Bond Fund, and (b) the balance shall be deposited in the Project Fund. Pending
disbursement pursuant to Section 3.4 hereof, the proceeds so deposited in the
Project Fund, together with any investment earnings thereon, shall constitute a
part of the Revenues assigned by the Issuer to the payment of Bond Service
Charges as provided in the Indenture.
9
At the request of the Borrower, and for the purposes and upon
fulfillment of the conditions specified in the Indenture, the Issuer may provide
for the issuance, sale and delivery of Additional Bonds and loan the proceeds
from the sale thereof to the Borrower.
Section 3.4. Disbursements from the Project Fund. Subject to the
-----------------------------------
provisions below, disbursements from the Project Fund shall be made only to
reimburse or pay the Borrower for the following Project Costs:
(a) Costs incurred directly or indirectly for or in
connection with the acquisition, construction, installation,
renovation, equipping or improvement of the Project, including costs
incurred in respect of the Project for preliminary planning and
studies; architectural, legal, engineering, accounting, consulting,
supervisory and other services; labor, services and materials; and
recording of documents and title work.
(b) Premiums attributable to any surety bonds and
insurance required to be taken out and maintained during the
Construction Period with respect to the Project Facilities.
(c) Taxes, assessments and other governmental charges
in respect of the Project that may become due and payable during the
Construction Period.
(d) Costs incurred directly or indirectly in seeking to
enforce any remedy against any contractor or subcontractor in respect
of any actual or claimed default under any contract relating to the
Project Facilities.
(e) Financial, legal, accounting, printing and
engraving fees, charges and expenses, and all other such fees, charges
and expenses incurred in connection with the authorization, sale,
issuance and delivery of the Series 1999 Bonds, including, without
limitation, the fees and expenses of the Issuer and Issuer's counsel,
Bond Counsel, the fees and expenses of the Trustee, the fees and
expenses of the placement agent with respect to the Series 1999 Bonds
and the fees and expenses of the Letter of Credit Bank and counsel to
the Letter of Credit Bank; provided that any fees and expenses
incurred in connection with the issuance of the Series 1999 Bonds and
paid with Series 1999 Bond proceeds shall not exceed 2% of the
proceeds of the Series 1999 Bonds within the meaning of Section 147(g)
of the Code.
(f) Any other costs, expenses, fees and charges
properly chargeable to the cost of acquisition, construction,
installation, renovation, equipping or improvement of the Project.
(g) Interest on the Series 1999 Bonds during the
Construction Period to be paid into the Bond Fund.
Any disbursements from the Project Fund for the payment of Project
Costs shall be made by the Trustee only upon the written order of the Authorized
Borrower Representative
10
approved by the Letter of Credit Bank. Each such written order shall be
substantially in the form of the disbursement request attached hereto as Exhibit
D and shall be consecutively numbered and accompanied by invoices or other
appropriate documentation supporting the payments or reimbursements requested.
Before the initial disbursement is made, all conditions precedent to
such disbursement, if any, set forth in the Letter of Credit Agreement must have
been satisfied to the Letter of Credit Bank's satisfaction.
Any disbursement for any item not described in, or the cost for which
item is other than as described in, the information statements filed by the
Issuer in connection with the issuance of the Series 1999 Bonds, shall be
accompanied by evidence satisfactory to the Trustee and the Letter of Credit
Bank that the average reasonably expected economic life of the facilities being
financed by the Series 1999 Bonds is not less than 5/6ths of the average
maturity of the Series 1999 Bonds or, if such evidence is not presented with the
disbursement or at the request of the Trustee or the Letter of Credit Bank, by
an opinion of Bond Counsel to the effect that such disbursement will not result
in the interest on the Series 1999 Bonds becoming subject to Federal income
taxation. In case any contract provides for the retention by the Borrower of a
portion of the contract price, there shall be paid from the Project Fund only
the net amount remaining after deduction of any such portion, and only when that
retained amount is due and payable, may it be paid from the Project Fund.
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 Authorized Borrower Representative with the Letter of Credit
Bank's prior written consent, promptly shall be
(i) used to reimburse the Letter of Credit Bank for draws
on the Letter of Credit to redeem Series 1999 Bonds,
(ii) used to acquire, construct, install, equip and improve
such additional real or personal property in connection with the
Project as is designated by the Authorized Borrower Representative and
approved by the Letter of Credit Bank and the acquisition,
construction, installation, renovation, equipping and improvement of
which will be permitted under the Act, provided that any such use
shall be accompanied by evidence satisfactory to the Trustee that the
average reasonably expected economic life of such additional property,
together with the other property theretofore acquired with the
proceeds of the Series 1999 Bonds, will not be less than 5/6ths of the
average maturity of the Series 1999 Bonds or, if such evidence is not
presented with the direction, then an opinion of Bond Counsel to the
effect that the acquisition of such additional property will not
result in the interest on the Series 1999 Bonds becoming included in
gross income for federal income tax purposes;
(iii) used for the purchase of Series 1999 Bonds in the open
market for the purpose of cancellation; or
11
(iv) used to accomplish a combination of the foregoing
as is provided in that direction.
Any payments made pursuant to this paragraph shall be made only to the extent
that such use or application will not, in the opinion of Bond Counsel or under
rulings of the Internal Revenue Service, result in the interest on the
Segregated Series 1999 Bonds becoming included in gross income for federal
income tax purposes.
Section 3.5. Borrower Required to Pay Costs in Event Project Fund
----------------------------------------------------
Insufficient. If moneys in the Project Fund are not sufficient to pay all
------------
Project Costs, the Borrower, nonetheless, will complete the Project in
accordance with the Plans and Specifications and, unless Additional Bonds shall
have been issued for that purpose, shall pay all such additional Project Costs
from the Borrower's own funds. The Borrower shall not be entitled to any
reimbursement for any such additional Project Costs from the Issuer, the Trustee
or any Holder; nor shall it be entitled to any abatement, diminution or
postponement of the Loan Payments.
Section 3.6. Completion Date. The Borrower shall notify the Issuer,
---------------
the Letter of Credit Bank and the Trustee of the Completion Date by a
certificate signed by the Authorized Borrower Representative stating:
(a) the date on which the Project Facilities were
substantially completed,
(b) that all other facilities necessary in connection
with the Project have been acquired, constructed, installed, equipped
and improved,
(c) that the acquisition, construction, installation,
renovation, equipping and improvement of the Project Facilities 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,
(d) that except as provided in subsection (e) of this
Section, all costs of that acquisition, construction, installation,
renovation, equipping and improvement then or theretofore due and
payable have been paid, and
(e) 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 Borrower is contesting or which otherwise should
be retained and the reasons such amounts should be retained.
That certificate shall state that it is given without prejudice to any rights
against third parties which then exist or subsequently may come into being. The
Authorized Borrower Representative shall include with that certificate a
statement specifically describing all items of personal property comprising a
part of the Project Facilities. The certificate shall be delivered as promptly
as practicable after the occurrence of the events and conditions referred to in
subsections (a) through (d) of this Section.
12
Section 3.7. Investment of Fund Moneys. At the oral (to be promptly
-------------------------
confirmed in writing) or written request of the Authorized Borrower
Representative, any moneys held as part of the Bond Fund or the Project Fund
shall be invested or reinvested by the Trustee in Eligible Investments in
accordance with Section 5.05 of the Indenture. The Borrower hereby covenants
that the Borrower will restrict that investment and reinvestment and the use of
the proceeds of the Series 1999 Bonds in such manner and to such extent, if any,
as may be necessary so that the Series 1999 Bonds will not constitute arbitrage
bonds under Section 148 of the Code. If at any time and from time to time the
Borrower determines that it is necessary to restrict or limit the yield on the
investment of moneys held by the Trustee under the Indenture in order to prevent
the Series 1999 Bonds from becoming arbitrage bonds within the meaning of
Section 148 of the Code, the Borrower shall so instruct the Trustee in writing.
(End of Article III)
13
ARTICLE IV
LOAN BY ISSUER;
REPAYMENT OF THE LOAN;
LOAN PAYMENTS AND ADDITIONAL PAYMENTS
-------------------------------------
Section 4.1. Loan Repayment; Delivery of Note. Upon the terms and
--------------------------------
conditions of this Agreement, the Issuer will make the Loan to the Borrower. In
consideration of and in repayment of the Loan, the Borrower shall make as Loan
Payments, payments sufficient in time and amount to pay when due all Bond
Service Charges, all as more particularly provided in the Project Note and any
Additional Notes. All such Loan Payments shall be paid to the Trustee in
accordance with the terms of the Notes for the account of the Issuer and shall
be held and applied in accordance with the provisions of the Indenture and this
Agreement.
The Borrower shall, simultaneously with the delivery of the Series
1999 Bonds and the Project Note, deliver or cause to be delivered the Letter of
Credit to the Trustee. Subject to the provisions of Section 5.09 of the
Indenture, the Borrower agrees that it will not, either by its action or
inaction, in any way adversely affect the continuance or effectiveness of the
Letter of Credit.
In connection with the issuance of any Additional Bonds, the Borrower
shall execute and deliver to the Trustee one or more Additional Notes in a form
substantially similar to the form of the Project Note. All such Additional
Notes shall:
(a) provide for payments of interest equal to the payments
of interest on the corresponding Additional Bonds;
(b) require payments of principal and redemption payments
and any premium equal to the payments of principal, prepayments and
sinking fund payments and any premium on the corresponding Additional
Bonds;
(c) require all payments on any such Additional Notes to be
made no later than the due dates for the corresponding payments to be
made on the corresponding Additional Bonds; and
(d) contain by reference or otherwise optional and mandatory
redemption provisions and provisions in respect of the optional and
mandatory acceleration or prepayment of principal and any premium
corresponding with the redemption and acceleration provisions of the
corresponding Additional Bonds.
The Notes shall secure equally and ratably all outstanding Bonds,
except that, so long as no Event of Default described in paragraph (a), (b),
(c), (g), (h) or (i) of Section 7.01 of the Indenture has occurred and is
subsisting, payments by the Borrower on the Notes shall be used by the Trustee
to reimburse the Letter of Credit Bank for payment of Bond Service Charges on
the corresponding Bonds in connection with which the Note was delivered and
shall constitute Loan Payments made in respect of the related Bonds.
14
Upon payment in full, in accordance with the Indenture, of the Bond
Service Charges, whether at maturity or by redemption or otherwise, or upon
provision for the payment thereof having been made in accordance with the
provisions of the Indenture, the Notes issued concurrently with those
corresponding Bonds, of the same maturity, bearing the same interest rate and in
an amount equal to the aggregate principal amount of the Bonds so surrendered
and cancelled or for the payment of which provision has been made, shall be
deemed fully paid, the obligations of the Borrower thereunder shall be
terminated, and such Notes shall be surrendered by the Trustee to the Borrower,
and shall be cancelled by the Borrower. Unless the Borrower is entitled to a
credit under express terms of this Agreement or the Notes, all payments on the
Notes shall be in the full amount required thereunder.
Except for such interest of the Borrower and the Letter of Credit Bank
as may hereafter arise pursuant to Section 8.5 hereof or Sections 5.04, 5.07 and
5.08 of the Indenture, and except as otherwise provided herein or in the
Indenture, the Letter of Credit Bank, by the issuance of the Letter of Credit,
the Borrower and the Issuer each acknowledge that neither the Borrower, the
Letter of Credit Bank nor the Issuer has any interest in the Bond Fund and any
moneys deposited therein shall be in the custody of and held by the Trustee in
trust for the benefit of the Holders.
Section 4.2. Additional Payments. The Borrower shall pay to the
-------------------
Issuer as Additional Payments hereunder, any and all costs and expenses incurred
or to be paid by the Issuer in connection with the issuance and delivery of the
Series 1999 Bonds or otherwise related to actions taken by the Issuer under the
Bond Documents.
Except to the extent paid or reimbursed from the Bond proceeds, the
Borrower shall, without notice from the Issuer, pay when due the Issuer's
Service Charge and shall prepay or reimburse the Issuer within thirty days after
notice for all expenses (including reasonable attorney's fees) incurred by the
Issuer in connection with the issuance and carrying of the Series 1999 Bonds and
all expenses reasonably incurred or advances reasonably made in the exercise of
the Issuer's rights or the performance of its obligations under the Bond
Documents. Any fees, expenses, reimbursements or other charges which the Issuer
may be entitled to receive from the Borrower thereunder, if not paid when due,
shall bear a late charge equal to 5% of the amount overdue, and if not paid
within sixty (60) days, shall bear interest at twelve percent (12%) per annum.
The Borrower shall pay to the Trustee, the Registrar and any Paying
Agent or Authenticating Agent their reasonable fees, charges and expenses for
acting as such under the Indenture, to the Remarketing Agent its reasonable
fees, charges and expenses for acting as such under the Remarketing Agreement
and to the Placement Agent its reasonable fees, charges and expenses for acting
as such under the Placement Agreement.
Section 4.3. Place of Payments. The Borrower shall make all Loan
-----------------
Payments directly to the Trustee at its corporate trust office. Additional
Payments shall be made directly to the person or entity to whom or to which they
are due.
Section 4.4. Obligations Unconditional. The obligations of the
-------------------------
Borrower to make all payments required by the Bond Documents and the Series 1999
Bonds, including the Loan
15
Payments, the Additional Payments and any obligation of the Borrower to make
payments to the Issuer, shall be unconditional and shall be binding and
enforceable in all circumstances whatsoever as provided in the Act and shall not
be subject to setoff, recoupment or counterclaim. The Borrower shall be
obligated to make the payments whether or not the Project has come into
existence or become functional and whether or not the Project has ceased to
exist or to be functional to any extent and from any cause whatsoever. The
Borrower shall be obligated to make such payments regardless of whether the
Borrower is in possession or is entitled to be in possession of the Project or
any part thereof.
Section 4.5. Assignment of Agreement and Revenues. To secure the
------------------------------------
payment of Bond Service Charges, the Issuer shall assign to the Trustee, by the
Indenture, its rights under and interest in this Agreement (except for the
Unassigned Issuer's Rights) and the Revenues. The Borrower hereby agrees and
consents to those assignments.
Section 4.6. Payments to Remarketing Agent. The Borrower shall pay
-----------------------------
to the Remarketing Agent, on or before each Interest Payment Date, an amount
equal to the amount to be paid by the Remarketing Agent for the purchase of
Series 1999 Bonds on such Interest Payment Date, pursuant to the Indenture,
provided that amounts available on such Interest Payment Date for such payment
from either (i) proceeds of the remarketing of such Series 1999 Bonds by the
Remarketing Agent or (ii) proceeds of a draw under the Letter of Credit shall be
credited against the Borrower's obligation to make payments under this Section.
The Borrower hereby consents to the appointment of the Remarketing
Agent pursuant to and as specified in the Indenture.
Section 4.7. Letter of Credit. Simultaneously with the initial
----------------
delivery of the Series 1999 Bonds to the Original Purchaser pursuant to the
Indenture, the Borrower shall obtain and deliver to the Trustee the Letter of
Credit. The Letter of Credit may be replaced by an Alternate Letter of Credit
complying with the provisions of Section 5.09 of the Indenture and shall be in
substantially the form of Exhibit A attached to the Letter of Credit Agreement
and made a part thereof.
The Borrower hereby authorizes the Trustee to make drawings on the
Letter of Credit in accordance with its terms.
(End of Article IV)
16
ARTICLE V
PARTICULAR COVENANTS
--------------------
Section 5.1. Indemnification
---------------
(a.) The Issuer. The Borrower, regardless of any agreement to maintain
----------
insurance, will indemnify the Issuer against (a) any and all claims by any
person related to the participation of the Issuer, the Trustee or the
Bondholders in the transactions contemplated by the Bond Documents, including
without limitation claims arising out of any condition of the Project or the
construction, use, occupancy or management thereof; any accident, injury or
damage to any person occurring in or about the Project Facilities; any breach by
the Borrower of its obligations under the Bond Documents; any act or omission of
the Borrower or any of its agents, contractors, servants, employees or
licensees; or the offering, issuance, sale or any resale of the Bonds to the
extent permitted by law, and (b) all costs, counsel fees, expenses or
liabilities reasonably incurred in connection with any such claim or any action
or proceeding brought thereon. In case any action or proceeding is brought
against the Issuer by reason of any such claim, the Borrower will defend the
same at its expense upon notice from the affected person, and such person will
cooperate with the Borrower, at the expense of the Borrower, in connection
therewith.
(b.) The Trustee. The Borrower releases the Trustee from, agrees that the
-----------
Trustee shall not be liable for, and agrees to protect, defend, indemnify and
hold harmless the Trustee from and against, any loss or damage to property, or
any injury to or death of any person, that may be occasioned by any cause
whatsoever pertaining to the Project Facilities or the use thereof; provided,
however, that the indemnity in this sentence shall be effective only to the
extent of any loss in excess of amounts paid to the Trustee from any liability
or property insurance carried with respect to the loss sustained. The Borrower
further agrees to protect, defend, indemnify and hold harmless the Trustee
against and from any and all costs, liabilities, expenses and claims arising
from any breach or default on the part of the Borrower in the performance of any
covenant or agreement on the part of the Borrower to be performed pursuant to
the terms of any of the Bond Documents, or in connection with the issuance of
the Bonds and the Borrower's furnishing of information concerning the Project,
the Borrower, its financial status or other matters relating to the Borrower, or
arising from any act or failure to act by the Borrower or any of the Borrower's
agents, contractors, servants, employees, or licensees, or arising from any
accident, injury or damage whatsoever caused to any person, firm or corporation
occurring during the term of this Agreement, in or about the Project Facilities,
and from and against all costs, liabilities and expenses incurred in or in
connection with any claim, action or proceeding brought thereon. In case any
action or proceeding is brought against the Trustee by reason of any such claim,
the Borrower upon notice from the Trustee covenants to resist or defend such
action or proceeding at the Borrower's expense. The Trustee shall not settle or
compromise such claim, action or proceeding without the written consent of the
Borrower, if there exists no Event of Default by the Borrower as defined in
Section 7.1 hereof. Nothing contained in this Section, however, shall require
the Borrower to indemnify the Trustee or any of its officers, employees or
agents, from any cost, liability, expense, loss or claim arising out of or
resulting from or the willful misconduct or negligence of the Trustee or any of
its officers, employees, independent contractors and agents. The
indemnification provided by this
17
Section to the Trustee shall include its directors, officers, members,
employees, independent contractors and agents.
Section 5.2. Sale or Transfer of Project; Corporate Existence of the
-------------------------------------------------------
Borrower. Until Payment in Full of the Bonds, the Borrower (i) will maintain
--------
its corporate existence and good standing and qualification to do business in
the State, and (ii) will not dispose of or transfer all or substantially all of
the Borrower's assets or the Project; provided, however, the Borrower may, with
the prior written consent of the Letter of Credit Bank and the Issuer, which the
Letter of Credit Bank and the Issuer shall have no obligation to give, transfer
all or substantially all of the Borrower's assets, including the Project to a
corporation or other entity, but only on the condition that (a) the transferee
or the surviving or resulting entity (if other than the Borrower) shall
expressly assume and agree in writing to perform all of the Borrower's
obligations under the Bond Documents and (b) such transfer will not cause the
Project to be in nonconformance with the purposes or provisions of the Act or
the Code.
The Borrower or any of the Borrower's transferees may enter into any
of the transactions described in the preceding paragraph only if in the opinion
of Bond Counsel consummation thereof (a) is not prohibited by the Act, (b) will
not adversely affect the validity of any Bonds to be outstanding after giving
effect to such transaction, or (c) will not adversely affect the exempt status
of the interest on such Bonds under the Code.
If a transfer of assets is made as provided in this Section, the
provisions of this Section shall continue in full force and effect and no
further such transfer of assets shall be made except in compliance with the
provisions of this Section.
Within 10 days after any transfer of assets under this Section, the
transferee or surviving or resulting entity shall provide written notice of such
event to the Issuer, the Letter of Credit Bank and the Trustee and evidence
satisfactory to the Issuer, the Letter of Credit Bank and the Trustee that all
requirements of this Section have been satisfied.
Section 5.3. Assignment by Issuer. Except for the assignment of this
--------------------
Agreement to the Trustee, the Issuer shall not attempt to further assign,
transfer or convey its interest in the Project Facilities or this Agreement or
create any pledge or lien of any form or nature with respect to the Project
Facilities or the payments hereunder, except in its governmental capacity
incident to collection of taxes, assessments or other governmental charges.
Section 5.4. Reference to Bonds Ineffective After Bonds Paid. Upon
-----------------------------------------------
Payment in Full of the Bonds, all references in this Agreement to the Bonds and
the Trustee shall be ineffective and neither the Issuer, the Trustee nor any
Bondholder shall thereafter have any rights hereunder, and the Borrower shall
have no further obligation hereunder, except for any obligation to the Issuer,
the Trustee, the Letter of Credit Bank or any Bondholder that shall have
theretofore vested and that shall then remain unsatisfied.
Section 5.5. Borrower's Performance under Indenture. The Borrower
--------------------------------------
has examined the Indenture and approves the form and substance of and agrees to
be bound by its terms. The Borrower shall, for the benefit of the Issuer and
each Bondholder, do and perform all acts and things required or contemplated in
the Indenture to be done or performed by it,
18
including without limitation the obligations of the Borrower with respect to
insurance, taxes and other charges and maintenance, modification, repairs and
restoration of the Project Facilities.
Section 5.6. Borrower Not to Adversely Affect Tax-Exempt Status of
-----------------------------------------------------
Interest on Series 1999 Bonds. Notwithstanding anything herein to the
-----------------------------
contrary, the Borrower, for the benefit of the Issuer and each Bondholder,
hereby agrees that it will not take or permit to be taken on its behalf, any
action which would adversely affect the exclusion from gross income for federal
income tax purposes of the interest on the Series 1999 Bonds, and that it will
make and take, or require to be made and taken, such acts and filings as may
from time to time be required under the Code and pursuant to the Indenture to
establish and maintain the exclusion from gross income for federal income tax
purposes of the interest on the Series 1999 Bonds.
Section 5.7. Compliance with Laws. The Borrower shall, throughout
--------------------
the term of this Agreement, promptly comply or cause compliance with all laws,
ordinances, orders, rules, regulations and requirements of duly constituted
public authorities which may be applicable to the Project Facilities or to the
repair and alteration thereof, or to the use or manner of use of the Project
Facilities, or to the Borrower's and any lessee's operations on the Project
Site. Notwithstanding the foregoing, the Borrower shall have the right to
contest the legality or the applicability of any such law, ordinance, order,
rule, regulation or requirement so long as in the opinion of counsel
satisfactory to the Trustee and the Letter of Credit Bank such contest shall not
in any way materially adversely affect or impair the obligations of the Borrower
hereunder or any right or interest of the Trustee or the Letter of Credit Bank
in, to and under the Indenture or this Agreement.
Section 5.8. Taxes, Permits, Utility and Other Charges. The Borrower
-----------------------------------------
shall pay and discharge, promptly as and when the same shall become due and
payable, all taxes and governmental charges of any kind whatsoever that may be
lawfully assessed against the Issuer, the Trustee, the Letter of Credit Bank or
the Borrower with respect to the Project or Project Site or any portion thereof.
Subject to the provisions of the Security Agreement, the Borrower may in good
faith contest any such tax or governmental charge, and in such event may permit
such tax or governmental charge to remain unsatisfied during the period of such
contest and any appeal therefrom unless in the opinion of counsel satisfactory
to the Trustee and the Letter of Credit Bank by such action any right or
interest of the Trustee or the Letter of Credit Bank in, to and under the
Indenture or this Agreement shall be materially endangered or the Project or
Project Site or any part thereof shall become subject to imminent loss or
forfeiture, in which event such tax or governmental charge shall be paid prior
to any such loss or forfeiture. The Borrower shall procure or cause to be
procured any and all necessary building permits, other permits, licenses and
other authorizations required for the lawful and proper construction,
installation, renovation, equipping, use and operation of the Project.
Section 5.9. Right of Access. The Borrower agrees that, subject to
---------------
reasonable security and safety regulations, the Issuer, the Trustee and the
Letter of Credit Bank and their or any of their duly authorized agents shall
have the right during normal business hours to inspect any records with respect
to the Project and to enter upon the Project Site for purposes of Project
inspection. The Borrower further agrees that the Issuer, the Trustee and the
Letter of Credit Bank and their duly authorized agents shall have such rights of
access to the Project as may be reasonably necessary to cause to be completed
the acquisition, construction, installation,
19
renovation and equipping provided for herein, and thereafter for the proper
maintenance of the Project in the event of failure by the Borrower to perform
the Borrower's obligations hereunder.
Section 5.10. Litigation Notice. The Borrower shall give the
-----------------
Trustee, the Original Purchaser and the Letter of Credit Bank prompt notice of
any action, suit or proceeding by the Borrower or against the Borrower at law or
in equity, or before any governmental instrumentality or agency, or of any of
the same which may be threatened, which if adversely determined, would
materially impair the right of the Borrower to carry on the business which is
contemplated in connection with the Project, or would materially and adversely
affect the Borrower's business, operations, properties, assets or condition.
Section 5.11. Removal of Portions of the Project. The Borrower shall
----------------------------------
be under no obligation to renew, repair or replace any inadequate, obsolete,
worn out, unsuitable, undesirable or unnecessary portions of the Project;
provided, however, that such failure to renew, repair or replace does not impair
the character of the Project as a "project" within the meaning of the Act.
Subject to the Security Agreement, the Borrower shall have the right, from time
to time, to substitute personal property for any portion of the Project,
provided that the property so substituted shall not impair the character of the
Project as a "project" within the meaning of the Act, and shall have a value not
less than the value of the personal property for which it is substituted. Any
such substituted property shall be included under the terms of this Agreement as
part of the Project.
The Borrower shall have the right to remove any portions of the
Project consisting of personal property, without substitution therefor;
provided, however that such removal does not impair the character of the Project
as a "project" within the meaning of the Act and so long as such removal does
not violate any terms of the Letter of Credit Agreement or the Security
Agreement.
(End of Article V)
20
ARTICLE VI
REDEMPTION OF SERIES 1999 BONDS
-------------------------------
Section 6.1. Optional Redemption. Provided no Event of Default shall
-------------------
have occurred and be subsisting, at any time and from time to time, the Borrower
may deliver moneys to the Trustee in addition to Loan Payments or Additional
Payments required to be made and direct the Trustee to use the moneys so
delivered for the purpose of reimbursing the Letter of Credit Bank for drawings
on the Letter of Credit used for purchasing Series 1999 Bonds or for calling
Series 1999 Bonds for optional redemption in accordance with the applicable
provisions of the Indenture providing for optional redemption at the redemption
price stated in the Indenture. Pending application for those purposes, any
moneys so delivered shall be held by the Trustee in a special account in the
Bond Fund and delivery of those moneys shall not operate to xxxxx or postpone
Loan Payments or Additional Payments otherwise becoming due or to alter or
suspend any other obligations of the Borrower under this Agreement.
Section 6.2. Extraordinary Optional Redemption. The Borrower shall
---------------------------------
have, subject to the conditions hereinafter imposed, the option to direct the
prepayment of the entire unpaid principal balance of the Series 1999 Bonds in
accordance with the applicable provisions of the Indenture upon the occurrence
of any of the following events:
(a) The Project shall have been damaged or destroyed to such an
extent that (1) it cannot reasonably be expected to be restored, within a
period of six months, to the condition thereof immediately preceding such
damage or destruction or (2) its normal use and operation is reasonably
expected to be prevented for a period of six consecutive months.
(b) Title to, or the temporary use of, all or a significant part
of the Project shall have been taken under the exercise of the power of
eminent domain (1) to such extent that the Project cannot reasonably be
expected to be restored within a period of six months to a condition of
usefulness comparable to that existing prior to the taking or (2) as a
result of the taking, normal use and operation of the Project is reasonably
expected to be prevented for a period of six consecutive months.
(c) As a result of any changes in the Constitution of the State,
the Constitution of the United State of America, or state or Federal laws
or as a result of legislative or administrative action (whether state or
federal) or by final decree, judgment or order of any court or
administrative body (whether state or federal) entered after the contest
thereof by the Issuer or the Borrower in good faith, this Agreement shall
have become void or unenforceable or impossible of performance in
accordance with the intent and purpose of the parties as expressed in this
Agreement, or if unreasonable burdens or excessive liabilities shall have
been imposed with respect to the Project or the operation thereof,
including, without limitation, Federal, state or other ad valorem,
property, income or other taxes not being imposed on the date of this
Agreement other than ad valorem taxes presently levied upon privately owned
property used for the same general purpose as the Project.
21
To exercise that option, the Borrower shall, within 120 days following the event
authorizing the exercise of that option, give notice to the Issuer and to the
Trustee specifying the date on which the Borrower will deliver the funds
required for that redemption which date shall be not more than ninety days from
the date that notice is mailed and shall make arrangements satisfactory to the
Trustee for the giving of the required notice of redemption. The foregoing
option may be exercised whether or not the Borrower is in default hereunder;
provided, that such default will not relieve the Borrower from performing those
actions which are necessary to exercise any such right or option granted
hereunder.
The amount payable by the Borrower in the event of the Borrower's
exercise of the option granted in this Section shall be an amount of money
which, when added to the moneys and investments held to the credit of the Bond
Fund, will be sufficient pursuant to the provisions of the Indenture to pay, at
par, and discharge all then outstanding Series 1999 Bonds on the earliest
applicable redemption date.
The Borrower also shall have the option, exercisable as provided above
in this Section, in the event that title to or the temporary use of a portion of
the Project shall be taken under the exercise of the power of eminent domain,
even if the taking is not of such nature as to permit the exercise of the
redemption option upon an event specified in (b) above, to direct the
redemption, at a redemption price of 100% of the principal amount thereof
prepaid, plus accrued interest to the redemption date, of that part of the
outstanding principal balance of the Series 1999 Bonds as may be payable from
the proceeds (after the payment of costs and expenses incurred in the collection
thereof) received in the eminent domain proceeding, provided, that the Borrower
shall furnish to the Issuer, the Trustee, and the Letter of Credit Bank a
certificate of an independent architect or engineer stating that (1) the
property comprising the part of the Project then being taken under the power of
eminent domain is not essential to continued operations of the Project in the
manner existing prior to that taking, (2) the Project has been restored to a
condition substantially equivalent to that existing prior to the taking, or (3)
other improvements have been acquired or made which are suitable for the
continued operation of the Project.
The rights and option granted to the Borrower in this Section may be
exercised whether or not the Borrower is in default hereunder; provided, that
such default will not relieve the Borrower from performing those actions which
are necessary to exercise any such right or option granted hereunder.
Section 6.3. Mandatory Redemption in Event of Loss of Tax Exemption
------------------------------------------------------
or Expiration of Letter of Credit. If, as provided in the Series 1999 Bonds and
---------------------------------
the Indenture, Series 1999 Bonds become subject to mandatory redemption as a
result of a Determination of Taxability, as defined in the Indenture, or the
Borrower fails to obtain not less than 60 days prior to the Interest Payment
Date next preceding a Letter of Credit Termination Date an extension of the
Letter of Credit or to provide for the delivery to the Trustee of an Alternate
Letter of Credit on the terms provided in the Indenture, the Borrower shall
deliver to the Trustee, upon the date required by the Trustee, moneys sufficient
to pay in full such Series 1999 Bonds in accordance with the mandatory
redemption provisions relating thereto set forth in the Series 1999 Bonds and
the Indenture.
22
Section 6.4. Mandatory Redemption. The Borrower shall deliver to the
--------------------
Trustee moneys sufficient to redeem the Series 1999 Bonds in accordance with any
mandatory redemption provisions relating thereto as may be set forth in Section
4.01 of the Indenture.
Section 6.5. Actions by Issuer. At the request of the Borrower or
-----------------
the Trustee, the Issuer shall take all steps required of it under the applicable
provisions of the Indenture or the Series 1999 Bonds to effect the redemption of
all or a portion of the Series 1999 Bonds pursuant to this Article VI.
Section 6.6. Required Deposits for Optional Redemption. All
-----------------------------------------
redemptions of Series 1999 Bonds provided for in Article VI hereof and in
Article IV of the Indenture shall be accomplished through the exercise by the
Trustee of draws on the Letter of Credit Bank under the Letter of Credit.
Except with the prior written consent of the Letter of Credit Bank, the Trustee
shall not give notice of call pursuant to the optional redemption provisions of
Section 4.01(d) and (e) of the Indenture and Article VI hereof unless prior to
the date by which the call notice is to be given there shall be deposited by the
Borrower with the Trustee Eligible Funds which, in addition to any other moneys
available therefor and held by the Trustee, will be sufficient to redeem at the
redemption price thereof, including premium, if any, and interest accrued to the
redemption date, all of the redeemable Series 1999 Bonds for which notice of
redemption is to be given in accordance with the provisions of the Indenture.
All amounts paid by the Borrower pursuant to this Article which are
used to pay principal of, premium, if any, or interest on the Series 1999 Bonds,
or to reimburse the Letter of Credit Bank for moneys drawn on the Letter of
Credit and used for such purposes, shall constitute prepaid Loan Payments.
(End of Article VI)
23
ARTICLE VII
DEFAULTS AND REMEDIES
---------------------
Section 7.1. Events of Default. Each of the following events is
-----------------
hereby declared an Event of Default:
(a) The Borrower's failure to make any payment of Loan Payments or
Additional Payments or any payment under Article VI hereof within the
time required herein.
(b) The occurrence of an event of default under the Security
Agreement, the Letter of Credit Agreement or the Indenture.
(c) The Borrower's failure to observe and perform any of its other
covenants, conditions or agreements contained herein for a period of
30 days after written notice (unless the Issuer, the Letter of Credit
Bank and the Trustee shall agree in writing to an extension of such
time prior to its expiration) specifying such failure and requesting
that it be remedied, given by the Issuer, the Letter of Credit Bank or
the Trustee to the Borrower; provided however that if such failure
shall be such that it can be corrected but not within such period, it
shall not constitute an Event of Default if corrective action is
promptly instituted by the Borrower within such period and diligently
and continuously pursued until the failure is corrected; provided,
further, in no event shall such additional period exceed 30 additional
days.
(d) If any representation or warranty by the Borrower contained
herein, or in the Security Agreement or the Bond Placement Agreement,
or in any certificate or instrument delivered by the Borrower pursuant
hereto or thereto, is false or misleading in any material respect.
(e) The transfer of the assets of the Borrower, except as may be
permitted herein.
(f) The Borrower shall commence any case, proceeding or other
action relating to the Borrower in bankruptcy or seeking
reorganization, liquidation, dissolution, winding-up, arrangement,
composition, readjustment of the Borrower's debts, or for any other
relief, under any bankruptcy, insolvency, reorganization, liquidation,
dissolution, arrangement, composition, readjustment of debt or other
similar act or law of any jurisdiction, now or hereafter existing; or
the Borrower shall apply for a receiver, custodian or trustee of the
Borrower or for all or a substantial part of the Borrower's property;
or the Borrower shall make an assignment for the benefit of creditors;
or the Borrower shall be unable to, or shall admit in writing the
inability to, pay the Borrower's debts as they become due; or the
Borrower shall take any action indicating the Borrower's consent to,
approval of or acquiescence in, or in the furtherance of, any of the
foregoing.
24
(g) Any case, proceeding or other action against the Borrower
shall be commenced in bankruptcy or seeking reorganization,
liquidation, dissolution, winding-up, arrangement, composition or
readjustment of the Borrower's debts, or any other relief, under any
bankruptcy, insolvency, reorganization, liquidation, dissolution,
arrangement, composition, readjustment of debt or other similar act or
law of any jurisdiction, now or hereafter existing; or a receiver,
custodian or trustee of the Borrower or for all or a substantial part
of the Borrower's property shall be appointed; or a warrant of
attachment, execution or restraint, or similar process shall be issued
against any substantial part of the property of the Borrower; and in
each such case such condition shall continue for a period of 60 days
undismissed, undischarged or unbonded.
The provisions of paragraph (c) of this Section are subject to the
following limitations: If by reason of acts of God; winds; fires; epidemics;
landslides; floods; droughts; famines; strikes; lockouts or other industrial
disturbances; acts of public enemies; acts or orders of any kind of any
governmental authority; insurrection; military action; war, whether or not
declared; sabotage; riots; civil disturbances; explosions; breakage or accident
to transmission pipes or canals; partial or entire failure of utilities; or any
cause or event not reasonably within the control of Borrower, Borrower is unable
in whole or in part to carry out the agreements on Borrower's part herein
contained, other than obligations on the part of Borrower to make the payments
required under the Notes, the Agreement and the Letter of Credit Agreement, to
carry insurance, to pay any ad valorem property taxes, and to make other
payments or deposits pursuant to the terms hereof, Borrower shall not be deemed
in default during the continuance of such inability. Borrower shall, however,
use Borrower's best efforts to remedy with all reasonable dispatch the cause or
causes preventing Borrower from carrying out Borrower's agreements; provided,
that Borrower shall not in any event be required to settle strikes, lockouts or
other industrial disturbances by acceding to the demands of the opposing party
or parties when such course is, in the judgment of Borrower, not in the interest
of Borrower.
The provisions of paragraphs (f) and (g) of this Section are subject
to the condition that the declaration of an Event of Default due to any of the
acts or circumstances specified therein, and the exercise of remedies upon any
such declaration, shall be subject to any applicable limitations of the United
States Bankruptcy Code affecting or precluding such declaration or exercise
during the pendency of or immediately following any bankruptcy, liquidation or
reorganization proceedings.
Section 7.2. Remedies on Default. Whenever any Event of Default
-------------------
shall have happened and be continuing, any one or more of the following rights
and remedies may be exercised:
(a) If acceleration of the Bonds has occurred pursuant to Section
7.03 of the Indenture, the Trustee may declare all Loan Payments to be
immediately due and payable, whereupon the same shall become
immediately due and payable. If the Trustee elects to exercise the
remedy afforded in this Section 7.2(a) and accelerates all Loan
Payments, the amount then due and payable by the Borrower as
accelerated payments shall be the sum of (1) the aggregate principal
amount of the Bonds then outstanding, (2) all unpaid interest on the
Bonds accruing to the
25
date set pursuant to the Indenture, (3) the amount of the redemption
premium, if any, then applicable to the Bonds, (4) all unpaid Trustee,
Registrar, Authenticating Agents, Remarketing Agent and Paying Agent
fees and expenses accruing to such date, and (5) any amount then due
the Issuer hereunder.
(b) The Trustee may have access to and inspect, examine and make
copies of, the financial books, records and accounts of the Borrower
pertaining to the Project Facilities.
(c) The Trustee may exercise any remedy provided for in the
Indenture.
(d) The Trustee may take whatever action at law or in equity may
appear necessary or desirable to collect any sums then due and
thereafter to become due hereunder or to enforce the observance or
performance of any covenant, condition or agreement of the Borrower
hereunder.
Except in the case of an Event of Default pursuant to Section 7.01(g)
or (h) of the Indenture, the Letter of Credit Bank shall have the right to
direct the remedies to be exercised by the Trustee.
The Trustee shall promptly notify the Letter of Credit Bank of any
failure of the Borrower to make the Loan Payments required by Section 4.1
hereof.
Any amounts collected pursuant to action taken by the Trustee under
this Section shall be paid into the Bond Fund and applied in accordance with the
provisions of the Indenture.
Notwithstanding any contrary provision in the Bond Documents, the
Issuer shall have the right to take any action or make any decision with respect
to proceedings for indemnity against the liability of the Issuer and for
collection or reimbursement from sources other than moneys or property held
under the Bond Documents. Whenever any Event of Default shall have occurred and
be continuing which results from failure of the Borrower to pay to or perform
for the Issuer any payment, covenant, agreement or warranty not assigned to the
Trustee, the Issuer may (but need not) proceed directly against the Borrower and
may take any action at law or in equity which it may deem necessary or desirable
to collect or enforce such payment or performance in default. The Issuer shall
promptly notify the Trustee and the Letter of Credit Bank of any such action;
however, the failure of the Issuer to give such notice shall not affect the
validity of any such action.
The provisions of this Section are subject to the further limitation
that the rescission by the Trustee of its declaration that all of the Bonds are
immediately due and payable also shall constitute an annulment of any
corresponding declaration made pursuant to paragraph (a) of this Section and a
waiver and rescission of the consequences of that declaration and of the Event
of Default with respect to which that declaration has been made, provided that
no such waiver or rescission shall extend to or affect any subsequent or other
default or impair any right consequent thereon. Unless the Letter of Credit Bank
is in default pursuant to Section 7.01(g) or (h) of the Indenture, any
rescission of a declaration of acceleration shall be subject to the prior
written consent of the Letter of Credit Bank.
26
Section 7.3. No Remedy Exclusive. No remedy herein conferred upon
-------------------
or reserved to the Trustee is intended to be exclusive of any other remedy, and
every remedy shall be cumulative and in addition to every other remedy herein
and in the Indenture or now or hereafter existing at law, in equity or by
statute. No delay or omission to exercise any right or power accruing upon an
Event of 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 enable the Issuer or
the Trustee to exercise any remedy reserved to it herein, it shall not be
necessary to give any notice, other than such notice as may be expressly
required herein.
Section 7.4. Agreement to Pay Attorney's Fees and Expenses. If an
---------------------------------------------
Event of Default should occur and the Issuer or the Trustee should incur
expenses, including attorneys' fees, in connection with the enforcement of this
Agreement, the Indenture, the Bond Placement Agreement or the Notes or the
collection of sums due thereunder, the Borrower shall reimburse the Issuer and
the Trustee, as applicable, for the expenses so incurred upon demand. If any
such expenses are not so reimbursed, the amount thereof, together with interest
thereon from the date of demand for payment at the Interest Rate for Advances,
and in any action brought to collect that indebtedness, the Trustee or the
Issuer, as applicable, shall be entitled to seek the recovery of those expenses
in such action except as limited by law or by judicial order or decision entered
in such proceedings.
Section 7.5. Waiver of Events of Default. If the Trustee shall
---------------------------
rescind any declaration of acceleration of payments of the principal of and
interest on the Bonds, such rescission shall also waive any corresponding Event
of Default hereunder and its consequences. In case of any such waiver or
rescission, or in case any proceeding taken by the Issuer or Trustee on account
of any such Event of Default shall have been discontinued or abandoned or
determined adversely, then and in every such case the Issuer, the Borrower and
the Trustee shall be restored to their former positions and rights hereunder,
but no such waiver or rescission shall extend to any subsequent or other Event
of Default or impair any right consequent thereon.
Section 7.6. Remedies Subject to Provisions of Law. All rights,
-------------------------------------
remedies and powers provided by this Article may be exercised only to the extent
that the exercise thereof does not violate any applicable provision of law, and
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.
Section 7.7. Remedies Under Uniform Commercial Code. In addition to
--------------------------------------
any other remedies provided for hereby, the Issuer and the Trustee shall have
the rights of a secured party and the Borrower shall have the rights of a debtor
under the Uniform Commercial Code of the State with respect to this Agreement
upon the occurrence and continuance of an Event of Default hereunder.
(End of Article VII)
27
ARTICLE VIII
MISCELLANEOUS
-------------
Section 8.1. Term of Agreement. Subject to the provisions of
-----------------
Section 5.4 hereof, this Agreement shall terminate upon Payment in Full of the
Bonds and the payment by the Borrower of all sums payable under this Agreement
whereupon all property, rights and interests subject to this Agreement shall
revert to the Borrower, and all right, title and interest of the Issuer in the
Project Facilities shall cease, terminate and become void, and this Agreement,
and the covenants of the Borrower contained herein, shall be discharged, except
for the obligations of the Borrower under Section 5.1 hereof, which shall
survive any termination of this Agreement. The Issuer in such case, on demand of
the Borrower and at the Borrower's cost and expense, shall execute and deliver
to the Borrower and shall cause the Trustee to execute and deliver to the
Borrower such proper instrument or proper instruments acknowledging the release,
satisfaction and termination of this Agreement, as the Borrower may reasonably
request, and shall assign and transfer or cause to be assigned or transferred,
and shall deliver or cause to be delivered, to the Borrower, all property,
including money, then held by the Issuer or the Trustee under or pursuant to the
Indenture other than moneys deposited with the Trustee for the payment of the
principal of, premium, if any, or interest on the Bonds and moneys required by
the terms thereof to be paid to the Letter of Credit Bank.
Section 8.2. Notices. Except as otherwise specifically provided
-------
herein, all notices, approvals, consents, requests and other communications
hereunder shall be in writing and shall be deemed to have been given when
delivered or mailed by first class mail addressed as follows: if to the Issuer,
at Business Finance Authority of the State of New Hampshire, 00 Xxxxx Xxxxxx,
Xxxxx 000, Xxxxxxx, Xxx Xxxxxxxxx 00000 Attn: Executive Director; if to the
----
Borrower, at Apex Telecommunications Manufacturing, Inc., 00 Xxxxx Xxxxxx,
Xxxxxx, Xxx Xxxxxxxxx 00000, Attn: Xxxx Xxxxxxxx; if to the Trustee, at The
----
Xxxxxxxxxx Xxxxxxxx Xxxx, Xxxxxxxxxx Xxxxxx - XX0000, 00 Xxxxx Xxxx Xxxxxx,
Xxxxxxxx, Xxxx 00000, Attn: Corporate Trust Department; if to the Letter of
----
Credit Bank, at The Huntington National Bank, 00 Xxxxx Xxxx Xxxxxx, Xxxxxxxx,
Xxxx 00000, Attn: International Department; if to the Remarketing Agent, at
----
Huntington Capital Corp., 00 Xxxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxx 00000, Attn: Xxxx
----
Xxxxxx; if to the Original Purchaser, at The Huntington National Bank, as agent
for the purchasers, 00 Xxxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxx 00000 and if to any
other Bondholder, at its address as shown on the registration books maintained
pursuant to the Indenture. A duplicate copy of each notice, approval, consent,
request or other communication given hereunder by either the Issuer or the
Borrower to the other shall also be given to the Trustee and the Letter of
Credit Bank. The Issuer, the Remarketing Agent, the Original Purchaser, the
Letter of Credit Bank, the Borrower and the Trustee may, by notice given
hereunder, designate any further or different addresses to which subsequent
notices, approvals, consents, requests or other communications shall be sent or
persons to whose attention the same shall be directed, but no such communication
shall thereby be required to be sent to more than two addresses.
Section 8.3. Binding Effect. This Agreement shall inure to the
--------------
benefit of and shall be binding upon the Issuer, the Trustee, the Letter of
Credit Bank and the Borrower and
28
their respective successors and assigns, provided that any obligation of the
Issuer arising hereunder shall not be a general debt of the Issuer, but shall be
payable solely out of Revenues.
Section 8.4. Severability. In case any clause, provision or section
------------
of this Agreement, or in case any covenant, stipulation, obligation, agreement,
act, or action, or part thereof, made, assumed, entered into, or taken under
this Agreement, or any application thereof, is for any reason held to be
illegal, invalid or inoperable, such illegality or invalidity or inoperability
shall not affect the remainder thereof or any other clause, provision or section
of this Agreement or any other covenant, stipulation, obligation, agreement,
act, or action, or part thereof, made, assumed, entered into, or taken under
this Agreement, which shall at the time be construed and enforced as if such
illegal or invalid or inoperable portion were not contained herein, nor shall
such illegality or invalidity or inoperability or any application thereof affect
any legal and valid and operable application from time to time, and each such
section, provision, covenant, stipulation, obligation, agreement, act, or
action, or part thereof, shall be deemed to be effective, operative, made,
entered into or taken in the manner and to the full extent from time to time
permitted by law.
Section 8.5. Amounts Remaining in Bond Fund. Amounts remaining in
------------------------------
the Bond Fund after the principal of, premium, if any, and interest on the Bonds
shall become due and payable (whether at maturity, by amortization or
redemption, or otherwise) shall be applied as follows:
(i) If Bonds are not presented for payment, the Trustee shall
retain sufficient moneys to pay the principal of, and interest and premium,
if any, on such Bonds until such Bonds are presented for payment, and the
remainder shall be paid as set forth in clause (ii) of this Section 8.5.
Any amounts so retained by the Trustee in the Bond Fund which remain
unclaimed by the Bondholders for four years after the due date thereof
(whether at maturity, by amortization or redemption, or otherwise) shall be
paid as set forth in clause (ii) hereof.
(ii) At the written request of the Borrower, and provided that
all fees and charges required herein or in the Indenture to be paid by the
Borrower have been so paid, amounts in the Bond Fund which the Trustee is
not required to retain pursuant to clause (i) of this Section 8.5 shall be
paid to the Borrower by the Trustee; provided that such amounts shall not
be paid to the Borrower unless the Trustee shall have received prior
written notice from the Letter of Credit Bank that moneys are not owed by
the Borrower pursuant to the Letter of Credit Agreement. At the written
request of the Letter of Credit Bank, any moneys so remaining shall be paid
to it as soon as practicable to the extent of any amount then owed by the
Borrower under the Letter of Credit Agreement. Any Bondholder which should
be paid from such money shall thereafter look solely to the Borrower for
such payment.
Section 8.6. Amendments, Changes and Modifications. Except as
-------------------------------------
otherwise provided in this Agreement or in the Indenture, this Agreement may not
be amended, changed, modified, altered or terminated without the written consent
of the Trustee, the Issuer and the Letter of Credit Bank.
29
Section 8.7. Execution 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 8.8. Captions. The captions or headings in this Agreement
--------
are for convenience only and in no way define, limit or describe the scope or
intent of any provisions of this Agreement.
Section 8.9. Governing Law. This Agreement shall be deemed to be a
-------------
contract made under the laws of the State and for all purposes shall be governed
by and construed in accordance with the laws of the State, except to the extent
that New Hampshire conflict of law rules would require the substantive rules of
law of any other jurisdiction to apply.
(End of Article VIII)
30
IN WITNESS WHEREOF, the Issuer and the Borrower have executed this
Loan Agreement all as of the date first above written.
BUSINESS FINANCE AUTHORITY OF THE STATE OF NEW
HAMPSHIRE
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------
Title: Chairman
-------------------------------------
APEX TELECOMMUNICATIONS MANUFACTURING, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
----------------------------------------
Title: Treasurer
-------------------------------------
31
EXHIBIT A
THE PROJECT
-----------
The acquisition, construction, installation, renovation and equipping
of improvements to a facility for the manufacturing of products for the
telecommunications industry, located at 00 Xxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxxxxx.
A-1
EXHIBIT B
THE PROJECT SITE
----------------
[Legal description from Borrower to be inserted]
B-1
EXHIBIT C
SERIES 1999 PROMISSORY NOTE
---------------------------
Apex Telecommunications Manufacturing, Inc., a New Hampshire
corporation (the "Borrower"), for value received, promise to pay to The
Huntington National Bank, as Trustee (the "Trustee") under the Indenture
hereinafter referred to, the principal sum of
Three Million Five Hundred Thousand Dollars
($3,500,000)
on September 1, 2019, together with interest from the date hereof on the unpaid
balance of such principal sum, such interest to be paid from the date hereof as
hereinafter provided for until the payment of such principal sum has been made
or provided for.
This Note has been executed and delivered by the Borrower to the
Trustee pursuant to a certain Loan Agreement (the "Agreement") dated as of
September 1, 1999, between the Business Finance Authority of the State of New
Hampshire (the "Issuer") and the Borrower. Under the Agreement, the Issuer has
loaned the Borrower the proceeds received from the sale of the Issuer's
$3,500,000 Adjustable Rate Demand Industrial Development Revenue Bonds, Series
1999 (Apex Telecommunications Manufacturing, Inc. Project) dated as of the date
of their issuance (the "Series 1999 Bonds") to assist in the financing of the
acquisition, construction, installation, renovation and equipping of the
Project, and the Borrower has agreed to repay such loan by making payments
("Loan Payments") at the times and in the amounts set forth in this Note for
application to the payment of the principal of and redemption premium, if any,
and interest on the Series 1999 Bonds as and when due, or as otherwise provided
in the Agreement. The Series 1999 Bonds have been issued, concurrently with the
execution and delivery of this Note, pursuant to, and are secured by, the Trust
Indenture (the "Indenture"), dated as of September 1, 1999, between the Issuer
and the Trustee. The Series 1999 Bonds bear interest from their date at the
applicable rate as provided in Appendix I to this Note, and mature on September
1, 2019. Those words and terms not expressly defined herein or in Appendix I
hereto and used herein or in Appendix I with initial capitalization where rules
of grammar do not otherwise require capitalization, or which are otherwise
defined terms under the Agreement or the Indenture, shall have the means set
forth in the Agreement or the Indenture.
To provide funds to pay the principal of, redemption premium, if any,
and interest on the Series 1999 Bonds as and when due as above-specified, the
Borrower hereby agrees to and shall make Loan Payments as follows:
(1) on the last Business Day (as defined in the Indenture) of
August 2019 an amount equal to the outstanding principal of Series 1999
Bonds due on September 1, 2019 by reason of maturity;
C-1
(2) on the last Business Day of each month commencing October,
1999, the amount necessary, together with any moneys then on deposit with
the Trustee and available for that purpose, to pay an amount equal to the
interest payable on the Series 1999 Bonds on the next succeeding interest
payment date.
In connection with the payment due on the date of issuance of the Series 1999
Bonds, the Borrower shall receive credit for the accrued interest, if any, on
the Series 1999 Bonds paid upon their delivery. To the extent moneys on deposit
from time to time in the Bond Fund , other than moneys representing a draw on
the Letter of Credit, exceed the amount necessary to pay Bond Service Charges
next due on the Series 1999 Bonds and the Trustee's Ordinary Expenses then due,
the Borrower shall receive a credit for such excess amounts against any payments
due hereunder.
All Loan Payments shall be payable in lawful money of the United
States of America and shall be made to the Trustee at its principal corporate
trust office for the account of the Issuer and deposited in the Bond Fund
created by the Indenture. Except as otherwise provided in the Indenture, such
Loan Payments shall be used by the Trustee to reimburse the Letter of Credit
Bank for drawings under the Letter of Credit.
The obligation of the Borrower to make the payments required hereunder
shall be absolute and unconditional and the Borrower shall make such payments
without abatement, diminution or deduction regardless of any cause or
circumstances whatsoever including, without limitation, any defense, set-off,
recoupment or counterclaim which the Borrower may have or assert against the
Issuer, the Letter of Credit Bank, the Trustee or any other person.
This Note is subject to optional, extraordinary optional and mandatory
prepayment upon the same terms and conditions, on the same date or dates and at
the same prepayment prices, as the Series 1999 Bonds are subject to optional,
extraordinary optional and mandatory redemption, and the Borrower hereby agrees
that the Borrower will make Loan Payments hereunder in an amount equal to the
principal of and premium, if any, and interest on the Series 1999 Bonds due and
payable on each such redemption date. Any such optional redemption prior to
stated maturity is subject to the obligation of the Borrower to give the Issuer
and the Trustee sufficient notice of such redemption and to deposit moneys
sufficient to effect such optional redemption pursuant to the terms of the
Indenture as shall enable the Issuer and the Trustee to take all action
necessary under the Indenture to redeem on the date specified for prepayment a
like principal amount of Series 1999 Bonds at the same redemption price.
Whenever an event of default under Section 7.01 of the Indenture shall
have occurred and, as a result thereof, the principal of and any premium on all
Series 1999 Bonds then outstanding, and the interest accrued thereon, shall have
been declared to be immediately due and payable pursuant to Section 7.03 of the
Indenture, the unpaid principal amount of and any premium and accrued interest
on this Note shall also be due and payable on the date on which the principal of
and premium and interest on the Series 1999 Bonds shall have been declared due
and payable; provided that the annulment of a declaration of acceleration with
respect to the Series 1999 Bonds shall also constitute an annulment of any
corresponding declaration with respect to this Note.
C-2
If an Event of Default should occur and the Issuer or the Trustee
should incur expenses, including attorneys' fees, in connection with the
enforcement of this Note or the collection of sums due hereunder, the Borrower
shall reimburse the Issuer and the Trustee, as applicable, for the expenses so
incurred upon demand; provided that such attorneys' fees shall be allowed only
to the extent actually paid and shall not be allowed to a salaried employee of
the Issuer or the Trustee.
IN WITNESS WHEREOF, the Borrower has signed this Note on September
______, 1999.
APEX TELECOMMUNICATIONS
MANUFACTURING, INC.
By:_______________________________________
Title:____________________________________
C-3
APPENDIX I
----------
September 30, 1999 through October 6, 1999, the interest rate on the
Series 1999 Bonds is ____% per annum. Thereafter, except as provided below, for
each succeeding weekly period, the interest rate on the Series 1999 Bonds shall
be the Weekly Interest Rate for such weekly period as established on the
Interest Rate Determination Date immediately preceding the commencement of such
weekly period.
On December 1, 1999, and on any Interest Period Reset Date thereafter,
the interest rate on the Series 1999 Bonds may be converted to a different
Interest Rate Mode upon receipt by the Trustee and the Remarketing Agent of a
direction from the Borrower, with the prior written consent of the Letter of
Credit Bank, not less than 45 days prior to such Interest Period Reset Date, to
convert the interest rate on the Series 1999 Bonds to an Interest Rate Mode
other than the Interest Rate Mode then in effect. Such direction to convert the
interest rate on the Series 1999 Bonds to a different Interest Rate Mode shall
be accompanied by (a) evidence satisfactory to the Trustee that the Letter of
Credit Termination Date is no earlier than the date which is at least 15 days
beyond the end of the Interest Rate Period to commence on the applicable
Interest Period Reset Date and (b) an opinion of Bond Counsel selected by the
Borrower delivered to the Issuer, the Trustee, the Letter of Credit Bank and the
Remarketing Agent, stating that such conversion to the specified Interest Rate
Mode will not adversely affect the exclusion of the interest on the Series 1999
Bonds from gross income for federal income tax purposes.
"Five Year Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
interest rate necessary during the Interest Rate Period of five years commencing
on the applicable Interest Rate Adjustment Date in the judgment of the
Remarketing Agent (taking into consideration current transactions and comparable
securities in which the Remarketing Agent is involved or of which it is aware
and prevailing financial market conditions) to produce a par bid for the Series
1999 Bonds on the Interest Rate Determination Date or (b) in the event that the
Remarketing Agent has been removed or has resigned and no successor has been
appointed, or the Remarketing Agent has failed to determine the Five Year
Interest Rate for whatever reason, or the Five Year Interest Rate cannot be
determined pursuant to clause (a) for whatever reason, the interest rate then in
effect with respect to the Series 1999 Bonds, without adjustment; provided that
in no event shall the Five Year Interest Rate exceed 12% per annum.
"Fixed Interest Rate" means the fixed rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Period Reset Date, to be the
interest rate necessary in the judgment of the Remarketing Agent (taking into
consideration current transactions in which the Remarketing Agent is involved or
of which it is aware and prevailing financial market conditions) to produce a
par bid for the Series 1999 Bonds on the Interest Rate Determination Date;
provided that in no event shall the Fixed Interest Rate exceed 12% per annum.
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"Interest Period Reset Date" means the Interest Rate Adjustment Date
on which the interest rate on the Series 1999 Bonds converts from the Interest
Rate Mode applicable to the Series 1999 Bonds prior to such date to a new
Interest Rate Mode. An Interest Period Reset Date shall be the first day of a
month unless the interest rate on the Series 1999 Bonds is converting to the
Weekly Interest Rate, in which case the Interest Period Reset Date shall be the
first Thursday of the month.
"Interest Rate Adjustment Date" means any date on which the interest
rate on the Series 1999 Bonds is adjusted, either as the result of the
conversion of the interest rate on the Series 1999 Bonds to a different Interest
Rate Mode, or by adjustment of the interest rate on the Series 1999 Bonds within
the applicable Interest Rate Mode. An Interest Rate Adjustment Date shall be
the first day of a month unless the Series 1999 Bonds bear interest at the
Weekly Interest Rate, in which case the Interest Rate Adjustment Date shall be
Thursday of each week.
"Interest Rate Determination Date" means (i) with respect to the Three
Month Interest Rate, the Six Month Interest Rate, the One Year Interest Rate,
the Five Year Interest Rate, the Seven Year Interest Rate and the Fixed Interest
Rate, the twelfth Business Day preceding an Interest Rate Adjustment Date, and
(ii) with respect to the Weekly Interest Rate, not later than 11:00 a.m.
according to local time at the principal corporate trust office of the Trustee
on Wednesday of each week, or the next preceding Business Day if such Wednesday
is not a Business Day.
"Interest Rate Mode" means any of those modes of interest with respect
to the Series 1999 Bonds permitted by the Indenture, specifically, the Weekly
Interest Rate, the Three Month Interest Rate, the Six Month Interest Rate, the
One Year Interest Rate, the Five Year Interest Rate, the Seven Year Interest
Rate and the Fixed Interest Rate.
"Interest Rate Period" means that period of time during which the
interest rate with respect to the Series 1999 Bonds has been determined by the
Remarketing Agent, commencing on the applicable Interest Rate Adjustment Date,
and terminating on the day immediately preceding the following Interest Rate
Adjustment Date.
"One Year Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
interest rate necessary during the Interest Rate Period of one year commencing
on the applicable Interest Rate Adjustment Date in the judgment of the
Remarketing Agent (taking into consideration current transactions and comparable
securities in which the Remarketing Agent is involved or of which it is aware
and prevailing financial market conditions) to produce a par bid for the Series
1999 Bonds on the Interest Rate Determination Date or (b) in the event that the
Remarketing Agent has been removed or has resigned and no successor has been
appointed, or the Remarketing Agent has failed to determine the One Year
Interest Rate for whatever reason, or the One Year Interest Rate cannot be
determined pursuant to clause (a) for whatever reason, the interest rate then in
effect with respect to the Series 1999 Bonds, without adjustment; provided that
in no event shall the One Year Interest Rate exceed 12% per annum.
I-2
"Seven Year Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
interest rate necessary during the Interest Rate Period of seven years
commencing on the applicable Interest Rate Adjustment Date in the judgment of
the Remarketing Agent (taking into consideration current transactions and
comparable securities in which the Remarketing Agent is involved or of which it
is aware and prevailing financial market conditions) to produce a par bid for
the Series 1999 Bonds on the Interest Rate Determination Date or (b) in the
event that the Remarketing Agent has been removed or has resigned and no
successor has been appointed, or the Remarketing Agent has failed to determine
the Seven Year Interest Rate for whatever reason, or the Seven Year Interest
Rate cannot be determined pursuant to clause (a) for whatever reason, the
interest rate then in effect with respect to the Series 1999 Bonds, without
adjustment; provided that in no event shall the Seven Year Interest Rate exceed
12% per annum.
"Six Month Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
interest rate necessary during the Interest Rate Period of six months commencing
on the applicable Interest Rate Adjustment Date in the judgment of the
Remarketing Agent (taking into consideration current transactions and comparable
securities in which the Remarketing Agent is involved or of which it is aware
and prevailing financial market conditions) to produce a par bid for the Series
1999 Bonds on the Interest Rate Determination Date or (b) in the event that the
Remarketing Agent has been removed or has resigned and no successor has been
appointed, or the Remarketing Agent has failed to determine the Six Month
Interest Rate for whatever reason, or the Six Month Interest Rate cannot be
determined pursuant to clause (a) for whatever reason, the interest rate then in
effect with respect to the Series 1999 Bonds, without adjustment; provided that
in no event shall the Six Month Interest Rate exceed 12% per annum.
"Three Month Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
interest rate necessary during the Interest Rate Period of three months
commencing on the applicable Interest Rate Adjustment Date in the judgment of
the Remarketing Agent (taking into consideration current transactions and
comparable securities in which the Remarketing Agent is involved or of which it
is aware and prevailing financial market conditions) to produce a par bid for
the Series 1999 Bonds on the Interest Rate Determination Date or (b) in the
event that the Remarketing Agent has been removed or has resigned and no
successor has been appointed, or the Remarketing Agent has failed to determine
the Three Month Interest Rate for whatever reason, or the Three Month Interest
Rate cannot be determined pursuant to clause (a) for whatever reason, the
interest rate then in effect with respect to the Series 1999 Bonds, without
adjustment; provided that in no event shall the Three Month Interest Rate exceed
12% per annum.
"Weekly Interest Rate" means (a) the rate of interest per annum
determined by the Remarketing Agent, on the Interest Rate Determination Date
immediately preceding the applicable Interest Rate Adjustment Date, to be the
interest rate necessary during the Interest Rate Period of one week commencing
on the applicable Interest Rate Adjustment Date in the judgment of the
Remarketing Agent (taking into consideration current transactions and
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comparable securities in which the Remarketing Agent is involved or of which it
is aware and prevailing financial market conditions) to produce a par bid for
the Series 1999 Bonds on the Interest Rate Determination Date or (b) in the
event that the Remarketing Agent has been removed or has resigned and no
successor has been appointed, or the Remarketing Agent has failed to determine
the Weekly Interest Rate for whatever reason, or the Weekly Interest Rate cannot
be determined pursuant to clause (a) for whatever reason, the interest rate then
in effect with respect to the Series 1999 Bonds, without adjustment; provided
that in no event shall the Weekly Interest Rate exceed 12% per annum.
On each Interest Rate Determination Date, the Remarketing Agent shall
give the Trustee, the Borrower and the Letter of Credit Bank telephonic notice
(immediately followed in writing) of the interest rate to be borne by the Series
1999 Bonds for the following Interest Rate Period; provided that if the interest
rate is determined pursuant to clause (b) of the definition of the applicable
Interest Rate Mode, the Trustee shall give notice to the Borrower and the Letter
of Credit Bank as above provided. On any Interest Rate Determination Date, the
Remarketing Agent shall give telephonic notice of the interest rate to the
holders, immediately followed by notice of such interest rate sent by the
Trustee by first class mail to the Holders.
While the Series 1999 Bonds bear interest at the Weekly Interest Rate,
interest shall be calculated on the basis of a 365 or 366-day year for the
number of days actually elapsed and otherwise interest shall be calculated on
the basis of a 360-day year and twelve 30-day months. Any calculation of the
interest rate to be borne by the Series 1999 Bonds shall be rounded to the
nearest one-hundredth of one percent (0.01%). The computation of the interest
rate on the Series 1999 Bonds by the Remarketing Agent or the Trustee, as
applicable, shall be binding and conclusive upon the Holders of the Series 1999
Bonds.
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EXHIBIT D
FORM OF DISBURSEMENT REQUEST
----------------------------
STATEMENT NO. _____ REQUESTING DISBURSEMENT OF FUNDS FROM
PROJECT FUND PURSUANT TO SECTION 3.4 OF THE LOAN AGREEMENT
BETWEEN THE BUSINESS FINANCE AUTHORITY OF THE STATE OF NEW
HAMPSHIRE AND APEX TELECOMMUNICATIONS MANUFACTURING, INC.
Pursuant to Section 3.4 of the Loan Agreement (the "Agreement")
between the Business Finance Authority of the State of New Hampshire (the
"Issuer") and Apex Telecommunications Manufacturing, Inc. (the "Borrower") dated
as of September 1, 1999, the undersigned Authorized Borrower Representative
hereby requests and authorizes The Huntington National Bank, as trustee (the
"Trustee"), as depository of the Project Fund created by the Indenture, as
defined in the Agreement, to pay to the Borrower or to the person(s) listed on
the Disbursement Schedule attached hereto out of the moneys deposited in the
Series 1999 Subaccount within the Project Fund the aggregate sum of $_________
to pay such person(s) or to reimburse the Borrower in full, as indicated in the
Disbursement Schedule, for advances, payments and expenditures made by it in
connection with the items listed in the Disbursement Schedule.
In connection with the foregoing request and authorization, the
undersigned hereby certifies that:
(a) Each item for which disbursement is requested hereunder is
properly payable out of the Project Fund in accordance with the terms and
conditions of the Agreement and none of those items has formed the basis for any
disbursement heretofore made from the Project Fund;
(b) Each such item is or was necessary in connection with the
acquisition, construction, installation, renovation and equipping of the real
and personal property comprising the Project, as defined in the Agreement;
(c) This statement and all exhibits hereto, including the Disbursement
Schedule, shall be conclusive evidence of the facts and statements set forth
herein and shall constitute full warrant, protection and authority to the
Trustee for its actions taken pursuant hereto; and
(d) This statement constitutes the approval of the Borrower of each
disbursement hereby requested and authorized.
D-1
IN WITNESS WHEREOF, the Authorized Borrower Representative has set his
hand as of the ______ day of _____________, ____.
___________________________________________
Authorized Borrower Representative
Approved by:
The Huntington National Bank, as
Letter of Credit Bank
By:_______________________________________
Title:____________________________________
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