EXHIBIT 10.42
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LOAN AGREEMENT
BY AND AMONG THE
LA MIRADA INDUSTRIAL DEVELOPMENT AUTHORITY,
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.,
AS TRUSTEE
AND
XXXXXX-XXXXXX, INC.,
A DELAWARE CORPORATION
WITH RESPECT TO
LA MIRADA INDUSTRIAL DEVELOPMENT AUTHORITY
TAXABLE VARIABLE/FIXED RATE DEMAND INDUSTRIAL DEVELOPMENT
REVENUE BONDS (XXXXXX-XXXXXX, INC. PROJECT)
SERIES 1996
DATED AS OF NOVEMBER 1, 1996
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND CONSTRUCTION
Section 1.1. Definition of Terms. . . . . . . . . . . . . . . . . . . . . .2
Section 1.2. Rules of Construction. . . . . . . . . . . . . . . . . . . . .2
ARTICLE II
GENERAL REPRESENTATIONS AND AGREEMENTS
Section 2.1. Representations and Agreements of the Issuer . . . . . . . . .3
Section 2.2. Representations and Agreements of the Trustee. . . . . . . . .3
Section 2.3. Representations and Agreements of the Company. . . . . . . . .3
ARTICLE III
FINANCING OF THE PROJECT; ISSUANCE OF THE BONDS
Section 3.1. Agreement to Issue Bonds . . . . . . . . . . . . . . . . . . .6
Section 3.2. Disbursement From the Project Fund . . . . . . . . . . . . . .6
Section 3.3. Investment of Moneys.. . . . . . . . . . . . . . . . . . . . 6
ARTICLE IV
LOAN OF PROCEEDS; PAYMENT PROVISIONS
Section 4.1. Loan of Bond Proceeds. . . . . . . . . . . . . . . . . . . . .7
Section 4.2. Loan Repayment and Payment of Other Amounts. . . . . . . . . .7
Section 4.3. Unconditional Obligation . . . . . . . . . . . . . . . . . . .8
Section 4.4. Assignment of Issuer's Rights. . . . . . . . . . . . . . . . .8
Section 4.5. Amounts Remaining in Funds and Accounts. . . . . . . . . . . .9
Section 4.6. Additional Bonds . . . . . . . . . . . . . . . . . . . . . . .9
ARTICLE V
SPECIAL COVENANTS AND AGREEMENTS
Section 5.1. Right of Access to the Project and Records.. . . . . . . . . 10
Section 5.2. Maintenance of Existence . . . . . . . . . . . . . . . . . . 10
Section 5.3. Statement of Compliance. . . . . . . . . . . . . . . . . . . 11
Section 5.4. Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 5.5. Additional Instruments . . . . . . . . . . . . . . . . . . . 11
Section 5.6. Environmental Matters. . . . . . . . . . . . . . . . . . . . 12
Section 5.7. Letter of Credit . . . . . . . . . . . . . . . . . . . . . . 13
Section 5.8. Indenture. . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 5.9. Title to and Completion of the Project . . . . . . . . . . . 13
Section 5.10. Design of the Project. . . . . . . . . . . . . . . . . . . . 13
Section 5.11. No Untrue Statements . . . . . . . . . . . . . . . . . . . . 14
Section 5.12. Date of Construction . . . . . . . . . . . . . . . . . . . . 14
Section 5.13. Employment and Other Reports . . . . . . . . . . . . . . . . 14
Section 5.14. Prevailing Wage Clause . . . . . . . . . . . . . . . . . . . 14
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Section 5.15. Continuing Disclosure. . . . . . . . . . . . . . . . . . . . 14
ARTICLE VI
DAMAGE, DESTRUCTION AND CONDEMNATION;
USE OF PROCEEDS
Section 6.1. Obligation to Continue Payments. . . . . . . . . . . . . . . 15
Section 6.2. Application of Net Proceeds. . . . . . . . . . . . . . . . . 15
Section 6.3. Insufficiency of Net Proceeds. . . . . . . . . . . . . . . . 15
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.1. Events of Default. . . . . . . . . . . . . . . . . . . . . . 16
Section 7.2. Remedies on Default. . . . . . . . . . . . . . . . . . . . . 16
Section 7.3. Agreement to Pay Attorneys' Fees and Expenses. . . . . . . . 18
Section 7.4. No Remedy Exclusive. . . . . . . . . . . . . . . . . . . . . 18
Section 7.5. No Additional Waiver Implied by One Waiver . . . . . . . . . 18
ARTICLE VIII
PREPAYMENT
Section 8.1. Prepayment of Loan . . . . . . . . . . . . . . . . . . . . . 19
Section 8.2. Redemption of Bonds Upon Prepayment. . . . . . . . . . . . . 19
Section 8.3. Amount of Prepayment.. . . . . . . . . . . . . . . . . . . . 19
ARTICLE IX
LIMITATION ON LIABILITY OF ISSUER;
EXPENSES; INDEMNIFICATION
Section 9.1. Limitation on Liability of Issuer. . . . . . . . . . . . . . 20
Section 9.2. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 9.3. Indemnification. . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE X
MISCELLANEOUS
Section 10.1. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 10.2. Severability . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 10.3. Execution of Counterparts. . . . . . . . . . . . . . . . . . 22
Section 10.4. Amendments, Changes and Modifications. . . . . . . . . . . . 22
Section 10.5. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . 22
Section 10.6. Authorized Representatives . . . . . . . . . . . . . . . . . 22
Section 10.7. Term of the Agreement. . . . . . . . . . . . . . . . . . . . 22
Section 10.8. Binding Effect . . . . . . . . . . . . . . . . . . . . . . . 23
Section 10.9. Capacity of Trustee. . . . . . . . . . . . . . . . . . . . . 23
EXHIBIT A - FORM OF FUNDING REQUISITION
EXHIBIT B - FACILITIES FINANCED FROM BOND PROCEEDS
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LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of November 1, 1996, by and among the LA
MIRADA INDUSTRIAL DEVELOPMENT AUTHORITY, a public body, corporate and
politic, organized and existing under the laws of the State of California
(the "Issuer"), BANKERS TRUST COMPANY OF CALIFORNIA, N.A., a national banking
association organized and existing under the laws of the United States of
America, as trustee under that certain Indenture of Trust, dated as of
November 1, 1996 (the "Indenture"), by and between the Issuer and said
trustee (the "Trustee"), and XXXXXX-XXXXXX, INC., a corporation organized and
existing under the laws of the State of Delaware (the "Company").
W I T N E S S E T H :
WHEREAS, the Issuer is organized and existing under the laws of the
State (capitalized terms used herein and not otherwise defined shall have the
meanings given such terms pursuant to Section 1.1) and is empowered under the
provisions of the Act to make and execute contracts and other instruments and
documents necessary or convenient for the purpose of facilitating the
financing of certain capital projects consisting of industrial facilities; and
WHEREAS, the Issuer is further authorized to issue its bonds for the
purpose of paying all or any part of the costs of a project, and for any
other authorized purpose; to acquire and hold property, including funds,
project agreements and other obligations of any kind, and pledge, encumber or
assign the same, or the revenues therefrom or any portion of such revenues,
or other rights, whether then owned or possessed, or thereafter acquired, for
the benefit of the owners, and as security or additional security for any
bonds or the performance of obligations under an indenture; to provide for
the advance of bond proceeds and other funds pursuant to project agreements
as necessary to pay or reimburse for project costs and to enter into loan
agreements; and
WHEREAS, in furtherance of the purposes of the Act and in order to
protect the health, welfare and safety of the citizens of the State, the
Issuer proposes to finance the acquisition, construction or equipping of the
Project to be owned by the Company; and
WHEREAS, pursuant to and in accordance with the provisions of the Act,
and pursuant to a resolution duly adopted by the Issuer, the Issuer has
authorized and undertaken the issuance of its industrial development revenue
bonds (the "Bonds") in the aggregate principal amount of not to exceed
$45,000,000 to provide funds to pay the cost of the Project; and
WHEREAS, the Issuer proposes to loan the proceeds of the Bonds to the
Company, and the Company desires to borrow the proceeds of the Bonds upon the
terms and conditions set forth herein; and
WHEREAS, the loan repayments payable by the Company and the purchase
price of the Bonds as set forth herein will be secured by an irrevocable
letter of credit issued by the Credit Bank pursuant to the Reimbursement
Agreement;
NOW THEREFORE, for and in consideration of the promises and the mutual
covenants hereinafter contained, for good and other valuable consideration,
the receipt and sufficiency of which are hereby mutually acknowledged, the
parties hereto agree as follows:
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ARTICLE I
DEFINITIONS AND CONSTRUCTION
Section 1.1. DEFINITION OF TERMS. Unless the context otherwise
requires, the capitalized terms used in this Agreement shall have the
meanings specified in Section 1.01 of the Indenture , as such Indenture is
originally executed or as it may from time to time be supplemented or amended
as provided therein.
Section 1.2. RULES OF CONSTRUCTION.
(a) The singular form of any word used herein, including the
terms defined in Section 1.01 of the Indenture, shall include the plural,
and vice versa. The use herein of a word of any gender shall include
correlative words of all genders.
(b) Unless otherwise specified, references to Articles, Sections
and other subdivisions of this Agreement are to the designated Articles,
Sections and other subdivisions of this Agreement as originally executed.
The words "hereof," "herein," "hereunder" and words of similar import
refer to this Agreement as a whole.
(c) The headings or titles of the several articles and sections,
and the table of contents appended to copies hereof, shall be solely for
convenience of reference and shall not affect the meaning, construction or
effect of the provisions hereof.
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ARTICLE II
GENERAL REPRESENTATIONS AND AGREEMENTS
Section 2.1. REPRESENTATIONS AND AGREEMENTS OF THE ISSUER. The Issuer
makes the following representations and agreements as the basis for its
undertakings herein contained:
(a) The Issuer is a public body, corporate and politic, duly
organized and existing under the laws of the State. By proper action, the
Issuer has authorized the execution, delivery and due performance by it of
this Agreement.
(b) To finance the Project, the Issuer will issue the Bonds, which
will mature, bear interest and be subject to redemption as set forth in the
Indenture.
(c) The Bonds will be issued under and secured by the Indenture,
pursuant to which the Issuer's interest in this Agreement (except certain
rights of the Issuer to payment for fees, expenses and indemnification and
certain rights of enforcement) will be pledged to the Trustee as security
for payment of the principal of, premium, if any, and interest on the
Bonds.
(d) The Issuer has not pledged and will not pledge its interest in
this Agreement for any purpose other than to secure the Bonds under the
Indenture.
(e) The Issuer is not in default under any of the provisions of
the laws of the State which default would affect its existence or its
powers referred to in this Section 2.1.
(f) No officer or other official of the Issuer has any interest
whatsoever in the Project or the Company or in the transactions
contemplated by this Agreement.
Section 2.2. REPRESENTATIONS AND AGREEMENTS OF THE TRUSTEE. The Trustee
makes the following representations and agreements as the basis for its
undertakings herein contained:
(a) The Trustee has been duly organized under the laws of the
United States of America and is validly existing as a national banking
association under the laws governing its creation and is qualified under
9.07 of the Indenture.
(b) This Agreement has been duly authorized, executed and
delivered by the Trustee and when duly executed and delivered by the
Company and the Issuer, will constitute the legal, valid and binding
obligation of the Trustee enforceable in accordance with its terms except
as enforcement may be limited by bankruptcy, insolvency, reorganization, or
other laws or equitable principles limiting creditors' rights generally.
The Trustee makes no representation as to the availability of specific
performance or other equitable remedies.
Section 2.3. REPRESENTATIONS AND AGREEMENTS OF THE COMPANY. The Company
makes the following representations and agreements as the basis for its
undertakings herein contained:
(a) The Company is a corporation duly organized under the laws of
the State of Delaware, is qualified as a foreign corporation and in good
standing in the State of California, has the power and authority to own its
properties and assets and to carry on its business as now conducted and as
contemplated to be conducted hereunder and has the power to execute and
deliver and has duly authorized, by proper action, the
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execution and delivery of this Agreement and all other documents
contemplated hereby to be executed by the Company.
(b) Neither the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby, nor the fulfillment
of or compliance with the terms and conditions hereof, conflict with or
result in a breach of any of the terms, conditions or provisions of any
agreement or instrument to which the Company is now a party or by which the
Company is bound, or constitute a default (with due notice or the passage
of time or both) under any of the foregoing, or results in the creation or
imposition of any prohibited lien, charge or encumbrance whatsoever upon
any of the property or assets of the Company under the terms of any
instrument or agreement to which the Company is now a party or by which it
is bound.
(c) The Project is located wholly within the geographic boundaries
of the City of La Mirada, California.
(d) The Company has title to the Project sufficient to carry out
the purposes of this Agreement and the acquisition and construction of the
portions of the Project to be financed with the proceeds of Bonds has been
fully completed in accordance with the plans and specifications therefor.
(e) There is no action, suit or proceeding at law or in equity or
by or before any governmental instrumentality or other agency now pending,
or, to the best knowledge of the Company threatened against or affecting
the Company or any of its properties or rights, which, if adversely
determined, would materially impair its right to carry on business
substantially as now conducted or as now contemplated to be conducted, or
would materially adversely affect its financial condition. After
consummation of the financing transaction, the Company will not be in
material default in the performance, observance or fulfillment of any of
the obligations, covenants or conditions contained in any material
agreement or instrument to which the Company is a party.
(f) The operation of the Project in the manner presently
contemplated and as described herein, to the best knowledge of the Company,
does not conflict with any zoning, water or air pollution, hazardous waste,
water disposal or other environmental matters or other ordinance, order,
law or regulation applicable thereto. The Company has caused the Project
to be designed and built in accordance with all applicable federal, state
and local laws or ordinances (including rules and regulations) relating to
zoning, building, safety and environmental quality.
(g) The Company has filed or caused to be filed all federal, state
and local tax returns which are required to be filed, and has paid or
caused to be paid all taxes as shown on said returns or on any assessment
received by it, to the extent that such taxes have become due, except such,
if any, as are being actively contested by the Company in good faith or for
which adequate reserves in accordance with generally accepted accounting
principles have been set aside for the payment thereof.
(h) No officer or other official of the Issuer has any interest
whatsoever in the Project or in the transactions contemplated by this
Agreement.
(i) To the knowledge of the Company, the Company has obtained all
necessary certificates, approvals, permits and authorizations with respect
to the construction of the Project from applicable local governmental
agencies and agencies of the State and the federal government.
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(j) The information contained in the Private Placement Memorandum,
insofar as such information relates to the Company and the Project is
accurate in all material respects and does not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
(k) The Company acknowledges, represents and warrants that it
understands the risks inherent in the issuance of the Bonds and the other
transactions contemplated thereby, including without limitation the risk of
loss of the Project; and that it has not relied on the Issuer for any
guidance or expertise in analyzing the financial or other consequences of
the issuance of the Bonds and the other transactions contemplated thereby
or otherwise relied on the Issuer in any manner except to issue the Bonds
in order to provide funds for the Loan.
(l) The Company intends to hold the Project for its own account,
has no current plans to sell and has not entered into any agreement to sell
the Project.
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ARTICLE III
FINANCING OF THE PROJECT; ISSUANCE OF THE BONDS
Section 3.1. AGREEMENT TO ISSUE BONDS; APPLICATION OF BOND PROCEEDS. To
provide funds to finance the Project, the Issuer agrees that it will issue
under the Indenture, sell and cause to be delivered to the purchasers
thereof, the Bonds in multiple series, bearing interest at the rates and
payable as to principal and interest at the times as set forth in the
Indenture. The Issuer will thereupon deposit the proceeds received from the
sale of any series of Bonds with the Trustee for use by the Borrower to pay
Project Costs as provided in Section 3.2 hereof and in the Indenture.
Section 3.2. DISBURSEMENT FROM THE PROJECT FUND. The Issuer has
authorized and directed the Trustee to disburse moneys from the Project Fund
created pursuant to the Indenture to pay or to reimburse the Company for
Project Costs, but only if, except as otherwise provided in Section 4.01 of
the Indenture, the Trustee shall have received a requisition executed by a
Company Representative and approved in writing by an Authorized Bank
Representative, with respect to each requested disbursement. Each
requisition shall be signed by a Company Representative and state with
respect to each disbursement to be made: (a) the requisition number, (b) the
amount to be disbursed, (c) that each obligation mentioned therein is a
Project Cost, has been properly incurred, is a proper charge against the
Project Fund and has not been the basis of any previous disbursement, and (d)
that the full amount of such disbursement will be applied to reimburse the
Company for the payment of Project Costs.
Upon receipt of a requisition properly executed by a Company
Representative and approved in writing by an Authorized Bank Representative,
the Trustee shall disburse moneys from the Project Fund in accordance with
such requisition. All disbursements shall be as directed in the requisition
as consented to in writing by the Credit Bank.
Upon receipt of a properly-signed requisition, the Trustee is authorized
to act thereon without further inquiry and, except for the negligence or
willful misconduct of the Trustee, the Company shall hold the Trustee
harmless against any and all losses, claims or liability incurred in
connection with the Trustee directly making such disbursements from the
Project Fund. Neither the Trustee nor the Issuer shall be responsible for
the accuracy of any representation made in such requisition or for the
application by the Credit Bank or the Company of moneys disbursed in
accordance with this Section 3.2.
Section 3.3. INVESTMENT OF MONEYS. Upon written direction of the
Company, approved in writing by the Credit Bank, any moneys in any fund or
account held by the Trustee shall be invested or reinvested by the Trustee as
provided in the Indenture, and the Company hereby approves such provisions of
the Indenture and directs the Trustee to make such investments.
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ARTICLE IV
LOAN OF PROCEEDS; PAYMENT PROVISIONS
Section 4.1. LOAN OF BOND PROCEEDS. The Issuer and the Trustee agree,
upon the terms and conditions in this Agreement, to make a loan to the
Company in a series of amounts aggregately equal to the aggregate principal
amount of the Bonds issued, delivered and outstanding at any particular
time, for the purpose of financing the Project. Pursuant to said covenant
and agreement, the Issuer will issue the Bonds upon the terms and conditions
contained in this Agreement and the Indenture and will cause the proceeds of
each series of Bonds to be applied by the Trustee as provided in Article IV
of the Indenture and Section 3.2 hereof.
Section 4.2. LOAN REPAYMENT AND PAYMENT OF OTHER AMOUNTS.
(a) The Company hereby acknowledges its indebtedness to the
Issuer and agrees to repay the Loan in the amounts and at the times
necessary to enable the Trustee, on behalf of the Issuer, to pay all
amounts payable with respect to the Bonds when due, including the
principal and Purchase Price of, premium, if any, and interest on the
Bonds, whether on regularly scheduled Interest Payment Dates, at
maturity, on any Purchase Date, or upon redemption or acceleration or
otherwise. The Company hereby agrees to cause the Letter of Credit to
be delivered to the Trustee in accordance with the terms of the
Reimbursement Agreement and Section 5.7 hereof. To the extent Loan
repayments are made with the proceeds of a draw or draws on the Letter
of Credit, amounts paid by the Company to repay the Loan shall be paid
to the Credit Bank for repayment of the Company's obligations under the
Reimbursement Agreement.
(b) The Company agrees: (1) to pay to the Trustee from time to
time all amounts referred to in Section 9.06 of the Indenture, including
but not limited to reasonable compensation for all services rendered by
it under this Agreement, the Indenture and the other agreements relating
to the Bonds to which the Trustee is a party; (2) except as otherwise
expressly provided herein, the Indenture or such other agreements, to
reimburse each of the Trustee and the Tender Agent upon its request for
all reasonable expenses, disbursements and advances (including
reasonable counsel fees and disbursements) incurred or made by the
Trustee or the Tender Agent in accordance with any provision of the
Indenture or other agreements to which the Trustee or the Tender Agent
is a party or pursuant to which it is required to act (including the
reasonable compensation and the expenses and disbursements of its agents
and counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or willful misconduct; (3) to indemnify
the Trustee and the Tender Agent for, and hold each harmless against,
any loss, liability or expense (including reasonable counsel fees and
disbursements) incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of
the trust under this Agreement, the Indenture or any other agreement
relating to the Bonds to which the Trustee or the Tender Agent is a
party or pursuant to which it is required to act, including the costs
and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or
duties hereunder or thereunder, including, without limitation, any
costs, liabilities and expenses arising in connection with environmental
matters referred to in Section 5.6 hereof; and (4) to pay any fee of any
Rating Agency then rating the Bonds, the fees of the Remarketing Agent,
the Tender Agent and any paying agents, and any other amounts referred
to the Indenture.
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(c) The Company also agrees to pay, within thirty (30) days
after receipt of a request for payment thereof, all reasonable fees
and expenses of the Issuer or any other party incurred in connection
with the financing of the Project pursuant hereto and the Indenture
which are not otherwise required to be paid by the Company under the
terms of this Agreement; including, without limitation, all legal
fees and expenses incurred by the Issuer and the Trustee in
connection with the issuance and delivery of the Bonds and the
amendment, interpretation and enforcement of any documents
relating to the Project or the Bonds.
(d) The Company also agrees to pay, on the Closing Date, the
administrative fee of the Issuer, if any, plus the reasonable fees
of counsel or other advisors to the Issuer, if any, related to the
issuance of the Bonds.
(e) The Issuer, the Trustee and the Company acknowledge that
the Credit Bank is not liable for the payment of amounts due under
the preceding paragraphs (a) through (d) other than as provided in
the Letter of Credit and herein.
Section 4.3. UNCONDITIONAL OBLIGATION. The obligations of the Company
to make the payments required by Section 4.2 hereof and to perform and
observe the other agreements on its part contained herein shall be absolute
and unconditional, irrespective of any defense or any rights of set-off,
recoupment or counterclaim it might otherwise have against the Issuer or the
Trustee, and during the term of this Agreement, the Company shall pay
absolutely all payments required hereunder, free of any deductions and
without abatement, diminution or set-off. Until such time as the principal
and Purchase Price of, premium, if any, and interest on the Bonds shall have
been fully paid, or provision for the payment thereof shall have been made as
required by the Indenture, the Company (i) will not suspend or discontinue
any payments provided for in Section 4.2 hereof; (ii) will perform and
observe all of its other covenants contained in this Agreement; and (iii)
except as provided in Article VIII hereof, will not terminate this Agreement
for any cause, including, without limitation, the occurrence of any act or
circumstances that may constitute failure of consideration, destruction of or
damage to the Project, commercial frustration of purpose, any change in any
laws of the United States of America or of the State or any political
subdivision or either of these, or any failure of the Issuer or the Trustee
to perform and observe any covenant, whether express or implied, or any duty,
liability or obligation arising out of or connected with this Agreement or
the Indenture, except to the extent permitted by this Agreement.
Section 4.4. ASSIGNMENT OF ISSUER'S RIGHTS. As security for the
payment of the Bonds, the Issuer, in the Indenture, assigns to the Trustee
certain of the Issuer's rights under this Agreement, including the right to
receive payments hereunder (except for the right of the Issuer to receive
certain payments, if any, with respect to fees, expenses and indemnification
under Sections 4.2(c) and (d), 7.3, 9.2 and 9.3 hereof), and the Issuer hereby
directs the Company to make the payments required hereunder (except such
payments for Issuer fees, expenses and indemnification) directly to the Trustee.
The Company hereby assents to such assignment and agrees to make payments
directly to the Trustee without defense or set-off by reason of any dispute
between the Company and the Issuer or the Trustee. By virtue of such
assignment, the Trustee shall have the right to enforce the obligations of the
Company hereunder.
In consideration for the undertaking by the Company to reimburse the
Credit Bank for amounts drawn under the Letter of Credit to purchase Bonds
which are tendered for purchase and not remarketed pursuant to Section 3.08
of the Indenture by causing the Bonds so purchased to be held for the account
of and registered in the name of the Credit Bank, the Issuer hereby assigns
to the Credit Bank, as assignee of the Company, all of the Issuer's right,
title and interest in and to any and all proceeds of any subsequent
remarketing of any such Bonds so
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purchased, and hereby agrees to direct the Remarketing Agent to pay any such
proceeds to the Credit Bank.
Section 4.5. AMOUNTS REMAINING IN FUNDS AND ACCOUNTS. It is agreed by
the parties hereto that after (i) payment in full of the Bonds, or provision
for such payment having been made as provided in the Indenture, (ii) payment
of all fees, charges and expenses of the Trustee and any paying agents in
accordance with the terms of the Indenture, and (iii) payment of all other
amounts required to be paid under this Agreement and the Indenture, any
amounts remaining in any fund or account held by the Trustee under the
Indenture, subject to the application of amounts in the Bond Fund to the
payment of particular Bonds, shall be paid by the Trustee as provided in
Section 7.03 of the Indenture , and the Issuer shall have no claim to such
amounts.
Section 4.6. ADDITIONAL BONDS. If the Company is not in default
hereunder, the Issuer may, in its sole discretion, by the adoption of an
appropriate resolution or resolutions, at the request of the Company and with
the consent of the Credit Bank (unless there shall be a Rating Event Date in
connection with the issuance of Additional Bonds), authorize the issuance of
Additional Bonds upon the terms and conditions provided herein and in Section
2.11 of the Indenture, but in no event shall the Issuer be liable for not
issuing such Additional Bonds. Additional Bonds may be issued only to
provide funds to pay any one or more of the following: (i) reimbursement of
Project Costs not financed with the proceeds of a prior series of Bonds; (ii)
the costs of making at any time or from time to time such substitutions,
additions, modifications and improvements to the Project or any portion
thereof, as authorized by the Act, as the Company may deem necessary or
desirable; (iii) to refund any outstanding Bonds; and (iv) the costs of the
issuance and sale of the Additional Bonds, and other costs reasonably related
to the financing as shall be agreed upon by the Company and the Issuer.
Prior to the issuance of such Additional Bonds, the terms thereof, the
purchase price to be paid therefor and the manner in which the proceeds
therefrom are to be disbursed shall have been approved in writing by the
Company; the Company and the Issuer shall have entered into an amendment to
this Agreement to provide that, for all purposes of this Agreement, the
Project shall include any facilities being financed by the Additional Bonds,
which facilities shall be described in an amendment to Exhibit B hereto, and
to provide for an increase in the amount payable under Section 4.2 hereof as
shall be necessary to pay the principal of, premium, if any, and interest on
the Additional Bonds as provided in the supplemental indenture to be paid
with respect to such Additional Bonds; and the Issuer shall have otherwise
complied with the provisions of Section 2.11 of the Indenture with respect to
the issuance of such Additional Bonds The Company shall pay, or cause to be
paid by persons other than the Issuer, all costs of issuance of any
Additional Bonds not paid from the proceeds of sale thereof.
9
ARTICLE V
SPECIAL COVENANTS AND AGREEMENTS
Section 5.1. RIGHT OF ACCESS TO THE PROJECT AND RECORDS. The Company
agrees that, during the term of this Agreement, the Issuer, the Trustee and
the duly authorized agents of either of them shall have the right at all
reasonable times and upon reasonable notice during normal business hours to
enter upon the site of the Project to examine and inspect the Project and to
have access to the books and records of the Company with respect to the
Project.
Section 5.2. MAINTENANCE OF EXISTENCE; ASSIGNMENTS.
(a) The Company agrees that during the term of this
Agreement it will not dispose of all or substantially all of its
assets or will not combine or consolidate with or merge with or into
another entity; provided, however, that the Company may consolidate
with, or merge into another entity existing under the laws of one of
the states of the United States, or permit one or more other entities
to consolidate with or merge the assets with such entity's
assets; or sell or otherwise transfer to another entity all or
substantially all of its assets as an entirety, provided that (i)
the surviving, resulting or transferee entity, as the case may
be, assumes and agrees in writing to pay and perform all of the
obligations of the Company hereunder, and (ii) the Company shall
have obtained the written approval of the Credit Bank, if any.
(b) The rights and obligations of the Company under
this Agreement may be assigned by the Company to any person in
whole or in part, in connection with and in proportion to, any
conveyance of all or part of the Project permitted by the
Reimbursement Agreement; provided that (i) the assignee shall
assume in writing the obligations of the Company hereunder to
the extent of the interest assigned, and a copy of such instrument
of assumption shall be delivered to the Issuer and the Trustee
within ten (10) days after the execution thereof; (ii) the Company
shall have obtained the written consent of the Credit Bank, if any;
and (iii) the Company shall remain liable for its obligations
hereunder to the extent of any interest not so assigned.
(c) The rights and obligations of the Company under
this Agreement may also be assigned by the Company to any person
in whole or in part, subject, however, to each of the following
conditions:
(i) No assignment other than pursuant to subsection (a) or
(b) of this Section 5.2 shall relieve the Company from primary
liability for any of its obligations hereunder, and in the event of
any assignment not pursuant to subsection (a) or (b) of this Section
5.2 the Company shall continue to remain primarily liable for the
payments specified in Section 4.2 hereof and for performance and
observance of the other agreements on its part herein provided to be
performed and observed by the Company.
(ii) Any assignment from the Company shall retain for the Company
such rights and interests as will permit it to perform its obligations
under this Agreement, and any assignee from the Company shall assume
the obligations of the Company hereunder to the extent of the interest
assigned.
(iii) The Company shall, within thirty days after delivery
thereof, furnish or cause to be furnished to the Issuer and the
Trustee a true and complete copy
10
of each such assignment together with an instrument of assumption
and the written consent of the Credit Bank to such assignment.
Section 5.3. STATEMENT OF COMPLIANCE; NOTICE OF EVENT OF DEFAULT
AND CERTAIN EVENTS.
(a) The Company will deliver to the Issuer and the Trustee,
within 120 days after the end of each fiscal year, a written statement
signed by a Company Representative stating, as to the signer thereof,
that (1) a review of the activities of the Company during such year
and of performance under this Agreement has been made under his
supervision, and (2) to the best of the knowledge of such Company
Representative, based on such review, the Company has fulfilled
all its obligations under this Agreement throughout such year,
or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such Company
Representative and the nature and status thereof.
(b) The Company hereby covenants to notify the Issuer and the
Trustee in writing of the occurrence of any Event of Default hereunder
or any event which, with the passage of time or service of notice,
or both, would constitute an Event of Default hereunder,
specifying the nature and period of existence of such event and
the actions being taken or proposed to be taken with respect
thereto. Such notice shall be given promptly, and in no event
less than ten (10) Business Days after the Company receives
notice or knowledge of the occurrence of any such event. The
Company further agrees that it will give prompt written notice to
the Trustee if insurance proceeds or condemnation awards are
received with respect to the Project and are not used to repair
or replace the Project, which notice shall state the amount of
such proceeds or award.
Section 5.4. INSURANCE; MAINTENANCE AND REPAIR. The Company
agrees to insure the Project or cause the Project to be insured (including
through self-insurance) during the term of this Agreement for such amounts and
for such occurrences as are required under the Reimbursement Agreement, or to
the extent that no Reimbursement Agreement exists, for such amounts and for such
occurrences as are generally carried by persons engaged in similar businesses as
the Company and for facilities substantially similar to the Project. The
Company further agrees to provide the Trustee and the Credit Bank with evidence
of such insurance and to certify compliance with the insurance requirements by
not later than October 1 of each year, or any other date that the Company
determines as its insurance policy renewal date end year.
The Company further agrees to maintain the Project, or cause the
Project to be maintained, during the term of this Agreement (i) in a reasonably
safe condition and (ii) in reasonably good repair and in reasonably good
operating condition, ordinary wear and tear excepted, making from time to time
all necessary repairs thereto and renewals and replacements thereof.
Section 5.5. ADDITIONAL INSTRUMENTS; DEED OF TRUST. The Company
hereby covenants to execute and deliver such additional instruments and to
perform such additional acts as may be necessary, in the opinion of the Issuer
or the Trustee, to carry out the intent hereof or to perfect or give further
assurances of any of the rights granted or provided for herein or contemplated
hereby. The Company shall incur no obligations in addition to the obligations
created hereby in connection with the execution and delivery of such additional
instruments except as may be set forth in such additional instruments.
The Company hereby agrees to execute and deliver to the Trustee,
and cause to be properly recorded, a Deed of Trust in a form acceptable to the
Issuer and the Trustee on or prior to the date on which the Bonds are remarketed
as a result of the occurrence of a Rating Event Date.
11
Section 5.6. ENVIRONMENTAL MATTERS. The Company hereby agrees to not
engage in any activity in any part of the Project, and shall use best efforts
to prevent others from engaging in any activity therein, which will result in
the Project, or any part thereof, containing any of the following in
concentrations or under conditions in violation of Hazardous Materials Laws
(as defined below): (a) any oil, or Hazardous Materials, as defined below
(excepting only minor quantities of household and cleaning materials
customarily used in the ordinary course of prudent household or business
purposes, as applicable, and maintained in accordance with all applicable
Hazardous Materials Laws); (b) asbestos in any form which is or could be
friable; (c) urea formaldehyde foam insulation; (d) transformers or other
equipment which contain dielectric fluid containing levels of polychlorinated
biphenyls in excess of fifty (50) parts per million. Notwithstanding the
foregoing, the possession by the Company of minor quantities of a Hazardous
Material, the presence of which does not violate any Hazardous Materials Laws
and the removal of which is not mandated by such Hazardous Materials Laws
shall not be a violation of this Section 5.6. If at any time it is
determined that the provisions of this Section 5.6 have been violated, then
unless the Company provides a Hazardous Materials Report (as defined below)
certifying that the Project does not contain Hazardous Materials in
quantities which require removal or remediation under any Hazardous Materials
Laws, the Company shall be solely responsible for and shall pay for all costs
incurred in connection with the removal of said equipment and/or substances,
and the reasonable cost thereof shall be deemed to be an operating expense.
If the Issuer reasonably believes that the value of its security interest in
the Project has been or may be impaired by the presence, use, generation,
treatment, storage or disposal of any Hazardous Material(s) on, under or
about all or a portion of the Project in violation of any Hazardous Materials
Laws, then the Issuer may request and the Company agrees to submit, if
requested by the Issuer, a report (the "Hazardous Materials Report"),
satisfactory to the Issuer certifying that the Project does not contain any
Hazardous Materials in quantities which require removal or remediation under
any Hazardous Materials Laws nor is any part of the Project currently being
used for any Environmental Activities. The expense of the Hazardous
Materials Report shall be deemed to be an operating expense of the Company.
Upon the discovery by the Company of the Issuer that any part of the Project
contains any Hazardous Materials in quantities which require removal or
remediation under any Hazardous Materials Laws or is being used to conduct
Environmental Activities, the Issuer may, in its sole and absolute discretion
and at the Company's expense, retain an independent professional consultant
to review any Hazardous Materials Report prepared by the Company and/or to
conduct its own investigation of the Project, and the reasonable expense
thereof shall be deemed to be an operating expense of the Company. The
Company hereby grants to the Issuer, its agents, employees, consultants and
contractors the rights to enter upon the Project, during normal business
hours after notice and in a manner than will not unreasonably disturb the use
and enjoyment of the Project, and to perform such tests on the Project as are
reasonably necessary to conduct such a review and/or investigation. Any
liability of the Company arising out of this Section 5.6 shall survive the
Company's satisfaction of its obligations hereunder, including, without
limitation, a transfer of the Project or any portion thereof, by foreclosure,
by deed in lieu of foreclosure or otherwise.
As used herein, "Environmental Activities" means the use, generation,
transportation, treatment, storage or disposal of any Hazardous Materials at
any time located on or present on or under the Project.
As used herein, "Hazardous Materials" means (a) any oil, flammable
substances, explosives, radioactive materials, hazardous wastes or
substances, toxic wastes or substances or any other materials or pollutants
which (i) post a hazard to the Project or to persons on or about the Project
or (ii) cause the Project to be in violation of any Hazardous Materials Laws;
(b) asbestos in any form which is or could become friable, urea folmaldehyde
foam insulation, transformers or other equipment which contain dielectric
fluid containing levels of
12
polychlorinated biphenyls in excess of fifty (50) parts per million; (c) any
chemical, materials or substance defined as or included in the definition of
"hazardous substances," "hazardous wastes," "hazardous materials,"
"extremely hazardous waste," "restricted hazardous waste," or "toxic
substances" or words of similar import under any applicable local, state or
federal law or under the regulations adopted or publications promulgated
pursuant thereto, including, but not limited to, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended,
42 U.S.C. Section 9601, et seq.; the Hazardous Materials Transportation Act,
as amended, 49 U.S.C. Section 1801 et seq.; the Resource Conservation and
Recovery Act, as amended, 42 U.S.C. Section 6901, et seq.; the Federal Water
Pollution Control Act, as amended, 33 U.S.C. Section 1251, et seq.; Sections
25115, 25117, 25122.7, 25140, 25281, 25316, 25501 of the California Health
and Safety Code; and Article 9 or Article 11 of Title 22 of the California
Administrative Code, Division 4, Chapter 20; and (d) any other chemical,
material or substance, exposure to which is prohibited, limited or regulated
by any governmental authority or may or could pose a hazard to the health and
safety of the occupants of the Project or the owners and/or occupants of
property adjacent to or surrounding the Project.
As used herein, "Hazardous Materials Laws" shall mean any federal,
state or local laws, ordinances, regulations, or policies relating to the
environment, health and safety, Environmental Activities and Hazardous
Materials (including, without limitation, the use, handling, transportation,
production, disposal, discharge or storage thereof) including, without
limitation, soil or ground water conditions.
Section 5.7. LETTER OF CREDIT. In order to provide for the payments
required by the Company pursuant to Section 4.2(a) hereof, the Company shall
cause to be provided on the Closing Date, and be continuously available to
the Trustee, as beneficiary, at all times prior to a Rating Event Date, an
irrevocable Letter of Credit (whether in the form of a letter of credit or
any other credit instrument) meeting the requirements of Section 5.01 of the
Indenture. The Company shall have the right, subject to the provisions of
the Reimbursement Agreement, to provide to the Trustee a substitute Letter of
Credit which meets the requirements of Section 5.01(b) of the Indenture.
Section 5.8. INDENTURE. The Company hereby agrees to all of the terms
and provisions of the Indenture and accepts each of his obligations expressed
or implied thereunder. The Company hereby approves the initial appointment
under the Indenture of the Trustee, the Remarketing Agent and the Tender
Agent for the Bonds. The Company hereby agrees that it will not, and will
not permit any affiliate of the Company to, purchase any Bonds from the
Remarketing Agent.
Section 5.9. TITLE TO AND COMPLETION OF THE PROJECT. The Company shall
have fee title to the Project free and clear of any lien or encumbrance
except for (i) liens for nondelinquent assessments and taxes not yet due or
which are being contested in good faith by appropriate proceedings; and (ii)
any other encumbrances approved by the Credit Bank.
Section 5.10. DESIGN OF THE PROJECT. To the best of the Company's
knowledge the design, construction and operation of the Project in the manner
completed and as described herein does not conflict with any zoning, water or
air pollution or other resolution, order, law or regulation applicable
thereto; the Company has caused the Project to be designed and constructed in
accordance with all the applicable federal state and local laws or
resolutions (including rules and regulations) relating to zoning, building,
safety and environmental quality; and the Company has not failed, or will not
fail, to obtain and maintain in effect any licenses, permits, franchises or
other governmental authorizations necessary for the construction, operation
and conduct of the Project to date. The Company hereby agrees to operate the
Project, or cause any
13
lessee or other user of the Project, to operate the Project as a "project"
as contemplated by the Act
Section 5.11. NO UNTRUE STATEMENTS. Neither this Agreement or any other
document or certificate furnished to the Trustee, the Credit Bank, the
Remarketing Agent or the Issuer by the Company or any Company Representative
on or after the Closing Date, contains, to the best of the Company's
knowledge, any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein and
therein not misleading as of the date of submittal thereof, the date of
execution hereof and as of the Closing Date. It is specifically understood
by the Company that all statements, representations and warranties made in
the Agreement or any other document, certificate or statement furnished to
the Trustee, the Credit Bank, the Remarketing Agent or the Issuer by the
Company or any Company Representative shall be deemed to have been relied
upon by the Issuer as an inducement to make the Loan and that if any such
statements, representations and warranties were materially incorrect at the
time they were made or as of the Closing Date, the Issuer may consider any
such misrepresentation or breach an Event of Default.
Section 5.12. DATE OF CONSTRUCTION. The Company hereby represents and
warrants that the acquisition, construction, equipping, furnishing and
improvement of all portions of the Project to be financed with proceeds from
the sale of the Bonds has been completed.
Section 5.13. EMPLOYMENT AND OTHER REPORTS. Within sixty (60) days
following the end of the Company's fiscal year, the Company shall furnish a
written report to the Issuer, and upon request, to the California Industrial
Development Financing Advisory Commission, stating the number of full-time
and part-time employees of the Company employed at the Project during such
fiscal year, and supplying, copies of financial statements and reports
required to be delivered to the Credit Bank pursuant to the Reimbursement
Agreement.
Section 5.14. PREVAILING WAGE CLAUSE. All workers employed by the
Company with respect to the acquisition and construction of the Project,
exclusive of those engaged to do strictly maintenance work, shall have been
paid not less than the general prevailing rate of per diem wages for work of
a similar character in the locality in which the work is performed, and not
less than the general prevailing rate of per diem wages for holiday and
overtime work. Those rates shall be determined by the Director of the
Department of Industrial Relations in accordance with the standards set forth
in section 1773 of the California Labor Code. The Director's determination
shall be final, the sections 1773.5, 1774 and 1776 (excepting subdivision
(f)) of the California Labor Code shall apply.
Section 5.15. CONTINUING DISCLOSURE. In the event that any of the
continuing disclosure provisions set forth in Rule 15(c)(2)-12 as promulgated
and amended by the Securities and Exchange Commission under the Securities
Exchange Act of 1934, creates any disclosure obligations with respect to the
Bonds, the Company or the Project, the Company hereby agrees to take such
actions as may reasonably be requested by the Remarketing Agent or the Issuer
so as to meet the Issuer's or Company's obligations thereunder. The Company
hereby agrees to pay all costs, fees or expenses arising from the compliance
by the Issuer or the Company with the provisions of this Section 5.15.
ARTICLE VI
14
ARTICLE VI
DAMAGE, DESTRUCTION AND CONDEMNATION;
USE OF PROCEEDS
Section 6.1. OBLIGATION TO CONTINUE PAYMENTS. If prior to full payment
of the Bonds (or provision for payment thereof in accordance with the
provisions of the Indenture) the Project or any portion thereof is destroyed
(in whole or in part) or is damaged by fire or other casualty, or title to,
or the temporary use of, the Project or any portion thereof shall be taken
under the exercise of the power of eminent domain by any governmental body or
by any person, firm or corporation acting under governmental authority, the
Company shall nevertheless be obligated to continue to pay the amounts
specified in Article IV hereof, to the extent not prepaid in accordance with
Article VIII hereof.
Section 6.2. APPLICATION OF NET PROCEEDS. The Net Proceeds, if any, of
any insurance or condemnation award resulting from the damage, destruction or
condemnation of the Project or any portion thereof shall be applied in one or
more of the following ways at the election of the Company, such election to
be subject to any conditions set forth in the Reimbursement Agreement, by
written notice to Issuer, the Credit Bank and the Trustee:
(a) The prompt repair, restoration, relocation, modification or
improvement of the damaged, destroyed or condemned portion of the
Project to enable such portion of the Project to accomplish at least
the same function as such portion of the Project was designed to
accomplish prior to such damage or destruction or exercise of such
power of eminent domain.
(b) Prepayment of all or a portion of the Loan, subject to and in
accordance with Article VIII hereof, and redemption of Bonds; provided
that no part of the Net Proceeds may be applied for such purpose
unless (1) the entire amount of the Loan is so prepaid and all of
the Outstanding Bonds are to be redeemed in accordance with the
Indenture, or (2) in the event that only a portion of the Loan is
so prepaid, the Company shall furnish to the Issuer, the Credit
Bank and the Trustee a certificate of the Company Representative
acceptable to the Issuer and the Credit Bank stating (i) that the
property forming part of the portion of the Project that was
damaged or destroyed by such casualty or was taken by such
condemnation proceedings is not essential to the Company's use or
possession of such portion of the Project or (ii) that such part
of the portion of the Project has been repaired, replaced,
restored, relocated, modified or improved to enable such portion
of the Project to accomplish at least the same function as such
portion of the Project was designed to accomplish prior to such
damage or destruction or the taking by such condemnation
proceedings.
Section 6.3. INSUFFICIENCY OF NET PROCEEDS. If the Project or a portion
thereof is to be repaired, restored, relocated, modified or improved pursuant
to Section 6.2 hereof, and if the Net Proceeds are insufficient to pay in
full the cost of such repair, restoration, relocation, modification or
improvement, the Company will nonetheless complete the work or cause the work
to be completed and will pay or cause to be paid any cost in excess of the
amount of the Net Proceeds.
15
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.1. EVENTS OF DEFAULT. Any one of the following which occurs
and continues shall constitute an Event of Default:
(a) failure by the Company to pay any amounts required to be paid
under Section 4.2(a) hereof at the times specified therein;
(b) failure by the Company to observe and perform any other covenant,
condition or agreement on its part required to be observed or performed by
this Agreement, and which continues for a period of thirty (30) days after
written notice, specifying such failure and requesting that it be remedied,
given to the Company by the Issuer or the Trustee, unless the Issuer and
the Trustee shall, with the consent of the Credit Bank, agree in writing
to an extension of such time prior to its expiration; provided, however,
that if the failure stated in the notice cannot be corrected within such
period, the Issuer and the Trustee will not unreasonably withhold their
consent to an extension of such time if corrective action is instituted
within such period and diligently pursued until the default is corrected;
(c) the making of any representation or warranty by the Company in
this Agreement or in any document executed in connection with this
Agreement which is false or misleading in any material adverse respect
when made; or
(d) an event of default pursuant to and as defined in the provisions
of the Indenture which has occurred and is continuing.
The provisions of subsection (b) of this Section 7.1 are subject to the
limitation that the Company shall not be deemed in default if and so long as
the Company is unable to carry out its agreements hereunder by reason of
strikes, lockouts or other industrial disturbances; acts of public enemies;
orders of any kind of the government of the United States or of the State or
any of their departments, agencies, or officials, or any civil or military
authority; insurrections, riots, epidemics, landslides; lightning;
earthquake; fire; hurricanes; storms; floods; washouts; droughts; restraint
of government and people; civil disturbances; explosions; breakage or
accident to machinery, transmission pipes or canals; partial or entire
failure of utilities; or any other cause or event not reasonably within the
control of the Company; it being agreed that the settlement of strikes,
lockouts and other industrial disturbances shall be entirely within the
discretion of the Company, and the Company shall not be required to make
settlement of strikes, lockouts and other industrial disturbances by acceding
to the demands of the opposing party or parties when such course is, in the
judgment of the Company, unfavorable to the Company. This limitation shall
not apply to any default except under subsection (b) of this Section 7.1.
Section 7.2. REMEDIES ON DEFAULT.
(a) Whenever any Event of Default shall have occurred and shall
continue, after giving notice to the Credit Bank and subject to any right
of the Credit Bank to cure any such default, the Issuer and the Trustee
may take any one or more of the following remedial steps:
(1) The Trustee upon the occurrence of an Event of Default under
Section 7.1(a) hereof or upon an acceleration of the principal of and
interest on
16
the Bonds pursuant to the Indenture shall immediately declare to be
due and payable immediately the unpaid balance of the amount loaned
hereunder.
(2) The Issuer, the Credit Bank and the Trustee may have access
to and may inspect, examine and make copies of the books and records
and any and all accounts and data of the Company.
(3) Subject to the provisions of subsection (b) of this Section
7.2, the Issuer or the Trustee may take whatever action at law or in
equity as may be necessary or desirable to collect the payments and
other amounts then due and thereafter to become due or to enforce
performance and observance of any obligation, agreement or covenant of
the Company under this Agreement.
(4) Subject to the provisions of subsection (b) of this Section
7.2, the Trustee may institute any action or proceeding at law or in
equity for the collection of any sums due and unpaid, and may
prosecute any such action or proceeding to judgment or final decree,
and may enforce any such judgment or final decree against the Company
and collect in the manner provided by law the moneys adjudged or
decreed to be payable.
(b) Notwithstanding anything to the contrary set forth in this
Agreement, neither the Issuer nor the Trustee shall take any enforcement
action pursuant to subsection (a)(3) or (4) above until twenty 20 days after
written notice to the Credit Bank of the intent by the Issuer or the Trustee
to exercise rights pursuant to either or both of such subsections and
provided that the Credit Bank shall not have provided to the Issuer and the
Trustee, within said 20-day period, an Opinion of Counsel selected by the
Credit Bank and reasonably acceptable to the Issuer that such enforcement
will impair the security of the Credit Bank under the Deed of Trust by reason
of section 726 of the California Code of Civil Procedure (the so-called "one
form of action rule") or otherwise.
(c) In case the Trustee or the Issuer shall have proceeded to enforce
its rights under this Agreement and such proceedings shall have been
discontinued or abandoned for any reason or shall have been determined
adversely to the Trustee or the Issuer, then, and in every such case, the
Company, the Trustee, the Credit Bank and the Issuer shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the Trustee, the Credit Bank and the
Issuer shall continue as though no such action had been taken.
(d) In case proceedings shall be pending for the bankruptcy or for the
reorganization of the Company under the federal bankruptcy laws or any other
applicable law, or in case a receiver or trustee shall have been appointed
for the property of the Company or in the case of any other similar judicial
proceedings relative to the Company, or the creditors or property of the
Company, then the Trustee shall be entitled and empowered, by intervention in
such proceedings or otherwise, to file and prove a claim or claims for the
whole amount owing and unpaid pursuant to this Agreement and, in case of any
judicial proceedings, to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee allowed in such judicial proceedings relative to the Company, its
creditors or its property, and to collect and receive any moneys or other
property payable or deliverable on any such claims, and to distribute such
amounts as provided in the Indenture after the deduction of its charges and
expenses. Any receiver, assignee or trustee in bankruptcy or reorganization
is hereby authorized to make such payments to the Trustee, and to pay to the
Trustee any reasonable amount due it for compensation
17
and expenses, including expenses and fees of counsel incurred by it up
to the date of such distribution.
Section 7.3. AGREEMENT TO PAY ATTORNEYS' FEES AND EXPENSES. In the
event the Company should default under any of the provisions of this
Agreement and the Issuer or the Trustee should employ attorneys or incur
other expenses for the collection of the payments due under this Agreement or
the enforcement of performance or observance of any obligation or agreement
on the part of the Company herein contained, the Company agrees to pay to the
Issuer or the Trustee the reasonable fees of such attorneys and such other
expenses so incurred by the Issuer or the Trustee.
Section 7.4. NO REMEDY EXCLUSIVE. No remedy herein conferred upon or
reserved to the Issuer or the Trustee is intended to be exclusive of any
other available remedy or remedies, but each and every such remedy shall be
cumulative and shall be in addition to every other remedy given under this
Agreement or now or hereafter existing at law or in equity or by statute. No
delay or omission to exercise any right or power accruing upon any default
shall impair any such right or power or shall be construed to be a waiver
thereof, but any such right and power may be exercised from time to time and
as often as may be deemed expedient. In order to entitle the Issuer or the
Trustee to exercise any remedy reserved to it in this Article VII, it shall
not be necessary to give any notice, other than such notice as may be herein
expressly required or required by law to be given. Such rights and remedies
as are given the Issuer hereunder shall also extend to the Trustee, and the
Trustee and the holders of the Bonds shall be deemed third party
beneficiaries of all covenants and agreements herein contained.
Section 7.5. NO ADDITIONAL WAIVER IMPLIED BY ONE WAIVER. In the event
any agreement or covenant contained in this Agreement should be breached by
the Company and thereafter waived by the Issuer or the Trustee with the
consent of the Credit Bank, such waiver shall be limited to the particular
breach so waived and shall not be deemed to waive any other breach hereunder.
18
ARTICLE VIII
PREPAYMENT
Section 8.1. PREPAYMENT OF LOAN. The Loan may be prepaid by the Company
in whole or in part at any time, and shall be prepaid by the Company in whole
upon an event of default under the Reimbursement Agreement and the direction
of the Credit Bank to effect a mandatory redemption of Bonds as a result
thereof. Any prepayment of the Loan as set forth above shall be applied to
effect the optional redemption or mandatory redemption, of the Bonds solely
as provided in the Indenture and in the Bonds. The Company shall be
permitted or required to prepay, or shall be deemed to have prepaid, the
Loan, in whole or in part, and the principal amount thereof shall be reduced
accordingly, in an amount equal to the principal amount of Bonds redeemed and
on the date of such redemption, in such amounts as will enable the Issuer to
redeem the Bonds called for redemption pursuant to the Indenture.
Section 8.2. REDEMPTION OF BONDS UPON PREPAYMENT. Upon any prepayment
of the Loan as provided in Section 8.1, the Trustee is required by the
Indenture to call all or part of the Bonds for redemption and to draw upon
the Letter of Credit in the respective amounts set forth in Section 5.02 of
the Indenture.
Section 8.3. AMOUNT OF PREPAYMENT. In the event of any prepayment
pursuant to Section 8.1, the amount of the Loan deemed to be prepaid shall be
equal to the principal amount of Bonds redeemed as described in Section 8.2.
In the case of prepayment of the Loan in full, the Company shall pay to the
Trustee an amount sufficient, together with other funds held by the Trustee
and available for such purpose, to pay all reasonable and necessary fees and
expenses of the Issuer, the Trustee and any paying agent accrued and to
accrue through final payment of the Bonds and all other liabilities of the
Company accrued and to accrue under this Agreement, and shall pay to the
Issuer any amount required by Section 4.2(c). In the case of partial
prepayment of the Loan, the Company shall pay or cause to be paid to the
Trustee an amount sufficient, together with other funds held by the Trustee
and available for such purpose, to pay expenses of redemption of the Bonds to
be redeemed upon such prepayment.
The Company agrees that it will not voluntarily prepay the Loan or any
part thereof, except in amounts sufficient to redeem Bonds in Authorized
Denominations, and to pay any applicable redemption premium and accrued
interest to the redemption date.
19
ARTICLE IX
LIMITATION ON LIABILITY OF ISSUER;
EXPENSES; INDEMNIFICATION
Section 9.1. LIMITATION ON LIABILITY OF ISSUER. The Issuer shall not be
obligated to pay the principal of, or premium, if any, or interest on the
Bonds, except from Revenues. The Company hereby acknowledges that the
Issuer's sole source of moneys to repay the Bonds and to pay expenses related
thereto will be provided by the payments made by the Company pursuant to this
Agreement, together with other Revenues, including any drawings under the
Letter of Credit or investment income on certain funds and accounts held by
the Trustee under the Indenture, and hereby confirms that amounts available
to pay all principal of, and premium, if any, and interest on the Bonds as
the same shall become due (whether by maturity, redemption, acceleration or
otherwise), have been calculated to be at all times sufficient for such
purpose.
Any obligation or liability of the Issuer created by or arising out of
this Agreement (including, without limitation, any liability created by or
arising out of the representations, warranties or covenants set forth herein
or otherwise) shall not impose a debt or pecuniary liability upon the Issuer
or a charge upon its general credit, but shall be payable solely out of the
Revenues. Neither the issuance of the Bonds nor the delivery of this
Agreement shall, directly or indirectly or contingently, obligate the Issuer
to make any appropriation for their payment. Nothing in the Bonds or in the
Indenture or this Agreement or the proceedings of the Issuer authorizing the
Bonds or in the Act or in any other related document shall be construed to
authorize the Issuer to create a debt of the Issuer within the meaning of any
constitutional or statutory provision of the State. No breach of any pledge,
obligation or agreement of the Issuer hereunder may impose any pecuniary
liability upon the Issuer or any charge upon its general credit.
Section 9.2. EXPENSES. The Company covenants and agrees to pay and to
indemnify the Issuer and the Trustee against all costs and charges, including
reasonable fees and disbursements of attorneys, accountants, consultants and
other experts, incurred in good faith in connection with this Agreement, the
Bonds or the Indenture.
Section 9.3. INDEMNIFICATION.
(a) The Company releases the Issuer from, and covenants and agrees
that the Issuer shall not be liable for, and covenants and agrees, to the
extent permitted by law, to indemnify and hold harmless the Issuer and
its officers, employees and agents from and against, any and all losses,
claims, damages, liabilities or expenses, of every conceivable kind,
character and nature whatsoever arising out of, resulting from or in any
way connected with (1) the Project, or the conditions, occupancy, use,
possession, conduct or management of, or work done in or about, or from
the planning, design, acquisition, installation or construction of the
Project or any part thereof; (2) the issuance and sale, resale or
remarketing of any Bonds or any certifications or representations made by
anyone other than the Issuer in connection therewith and the carrying out
of any of the transactions contemplated by the Bonds and this Agreement;
(3) the Trustee's acceptance or administration of the trusts under the
Indenture, or the exercise or performance of any of its powers or duties
under the Indenture; (4) any untrue statement or alleged untrue
statement of any material fact or omission or alleged omission to state a
material fact necessary to make the statements made, in the light of the
circumstances under which they were made, not misleading, in the Private
Placement Memorandum or other offering circular utilized by the Issuer or
any underwriter or placement agent in connection with the sale or
remarketing of any Bonds; (5) any event
20
or occurrence with respect to the Hazardous Materials Laws; or (6) any
statement or information provided by the Company in connection with its
compliance under Section 5.15 hereof; provided that such indemnity shall
not be required for damages that result from the negligence or willful
misconduct on the part of the party seeking such indemnity. The Company
further covenants and agrees, to the extent permitted by law, to pay or
to reimburse the Issuer and its officers, employees and agents for its
any and all costs, reasonable attorneys, fees, liabilities or expenses
incurred in connection with investigating, defending against or otherwise
in connection with any such losses, claims, damages, liabilities,
expenses or actions, except to the extent that the same arise out of the
gross negligence or willful misconduct of the party claiming such payment
or reimbursement. The provisions of this Section 9.3 shall survive the
final payment and the defeasance of the Bonds, or the discharge of the
Bonds, or the defeasance of the lien of the Indenture and the termination
of this Agreement.
(b) The Company releases the Trustee from, and covenants and
agrees that the Trustee shall not be liable for, and covenants and
agrees, to the extent permitted by law, to indemnify and hold harmless
the Trustee and its officers, employees and agents from and against any
and all losses, claims, damages, liabilities or expenses, of every
conceivable kind, character and nature whatsoever arising out of,
resulting from or in any way connected with (1) the Project, or the
conditions, occupancy, use, possession, conduct or management of, or work
done in or about, or from the planning, design, acquisition, installation
or construction of the Project or any part thereof; (2) the issuance,
sale, resale or remarketing of any Bonds or any certifications or
representations made by any one other than the Trustee in connection
therewith and the carrying out by anyone of any of the transactions
contemplated by the Bonds and this Agreement; (3) the Trustee's
acceptance or administration of the trusts under the Indenture, or the
exercise or performance of any of its powers or duties under the
Indenture; or (4) any untrue statement or alleged untrue statement of
any material fact or omission or alleged omission to state a material
fact necessary to make the statements made, in the light of the
circumstances under which they were made, not misleading, in the Official
Statement or other offering circular utilized by the Issuer or any
underwriter or placement agent in connection with the sale or remarketing
of any Bonds; provided that such indemnity shall not be required for
damages that result from negligence or willful misconduct on the part of
the party seeking such indemnity. The Company further covenants and
agrees, to the extent permitted by law, to pay or to reimburse the
Trustee and its officers, employees and agents for any and all costs,
reasonable attorneys, fees, liabilities or expenses incurred in
connection with investigating, defending against or otherwise in
connection with any such losses, claims, damages, liabilities, expenses
or actions, except to the extent that the same arise out of the
negligence or willful misconduct of the party claiming such payment or
reimbursement. The provisions of Sections 4.2, 7.3, 9.2 and 9.3 shall
survive the Trustee's resignation or removal, the final payment and
defeasance of the lien of the Indenture and the termination of this
Agreement.
Nothing contained herein shall in any way be construed to impose any
duties upon the Trustee beyond those contained in the Indenture. All
immunities, indemnities, exceptions from liability and other provisions of
the Indenture insofar as they relate to the Trustee shall apply to this
Agreement. The immunities of the Trustee also extend to its directors,
officers, employees and agents.
21
ARTICLE X
MISCELLANEOUS
Section 10.1. NOTICES. All notices, certificates or other
communications shall be deemed sufficiently given on the third day following
the day on which the same have been mailed by first class mail, postage
prepaid, addressed to the Issuer, the Company, the Trustee or the Credit Bank
at the respective addresses set forth in Section 12.01 of the Indenture. A
duplicate copy of each notice, certificate or other communication given
hereunder by either the Issuer or the Company to the other shall also be
given to the Trustee and the Credit Bank. The Issuer, the Company, the
Trustee and the Credit Bank may, by notice given hereunder, designate any
different addresses to which subsequent notices, certificates or other
communications shall be sent.
Section 10.2. SEVERABILITY. If any provision of this Agreement shall be
held or deemed to be, or shall in fact be, illegal, inoperative or
unenforceable, the same shall not affect any other provision or provisions
herein contained or render the same invalid, inoperative, or unenforceable to
any extent whatever.
Section 10.3. EXECUTION OF COUNTERPARTS. This Agreement may be executed
in several counterparts, each of which shall be an original and all of which
shall constitute but one and the same instrument; provided, however, that for
purposes of perfecting a security interest in this Agreement by the Trustee
under Article 9 of the California Uniform Commercial Code, only the
counterpart delivered, pledged, and assigned to the Trustee shall be deemed
the original.
Section 10.4. AMENDMENTS, CHANGES AND MODIFICATIONS. Except as
otherwise provided in this Agreement or the Indenture, subsequent to the
initial issuance of Bonds and prior to their payment in full, or provision
for such payment having been made as provided in the Indenture, this
Agreement may be effectively amended, changed, modified, altered or
terminated only by written instrument executed by the parties hereto and only
with the written consent of the Credit Bank; provided, however, written
consent of the Credit Bank shall not be required in connection with any
amendment, change, modification, alternation or termination effected in
connection with a Rating Event Date. The Company hereby agrees to amend this
Agreement as may reasonably be required by the Rating Agency in connection
with a Rating Event Date.
Section 10.5. GOVERNING LAW. This Agreement shall be governed
exclusively by and construed in accordance with the applicable laws of the
State.
Section 10.6. AUTHORIZED REPRESENTATIVES. Whenever under the provisions
of this Agreement the approval of the Company, the Issuer or the Credit Bank
is required for any action, and whenever the Company, the Issuer or the
Credit Bank is required to deliver any notice or other writing, such approval
or such notice or other writing shall be given, respectively, on behalf of
the Company by the Company Representative, on behalf of the Issuer by the
Authorized Issuer Representative and on behalf of the Credit Bank by the
Authorized Bank Representative, and the Issuer, the Trustee, the Credit Bank
and the Company shall be authorized to act on any such approval or notice or
other writing and none of the parties hereto nor the Credit Bank shall have
any complaint against the other or against the Trustee as a result of any
such action taken.
Section 10.7. TERM OF THE AGREEMENT. This Agreement shall be in full
force and effect from the date hereof and shall continue in effect as long as
any of the Bonds are outstanding or the Trustee holds any moneys under the
Indenture, whichever is later. The provisions of Section 9.3 hereof shall
survive the termination of this Agreement.
22
Section 10.8. BINDING EFFECT; THIRD PARTY BENEFICIARY. This Agreement
shall inure to the benefit of and shall be binding upon the Issuer, the
Trustee, the Company and their respective successors and assigns; subject,
however, to the limitations contained in Section 5.2 hereof. The Credit Bank
is intended to be a third party beneficiary of this Agreement to the extent
the provisions hereof are expressly for the benefit of the Credit Bank.
Section 10.9. CAPACITY OF TRUSTEE. The Trustee is entering into this
Agreement solely in its capacity as Trustee under the Indenture and the
duties, powers and liabilities of the Trustee in acting hereunder shall be
subject to the provisions of the Indenture, including, without limitation,
the provisions of Article VIII thereof.
23
IN WITNESS WHEREOF, the Issuer has caused this Agreement to be executed
in its name and its seal to be hereunto affixed and attested by its duly
authorized officer, the Trustee has caused this Agreement to be executed in
its name by its duly authorized officer, and the Company has caused this
Agreement to be executed in its name by its duly authorized officer, all as
of the date first above written.
LA MIRADA INDUSTRIAL
DEVELOPMENT AUTHORITY
By: /s/
-------------------------------
Treasurer
BANKERS TRUST COMPANY OF
CALIFORNIA, N. A.
By: /s/
-------------------------------
Vice President
XXXXXX-XXXXXX, INC.
By: /s/
-------------------------------
Senior Vice President &
Chief Financial Officer
24
EXHIBIT A
FORM OF FUNDING REQUISITION
Date ________________, 19___ Requisition No.____________
1. We hereby request that the sum of $______________________ be
disbursed from the Project Fund for the items described on Exhibit A hereto,
to be paid to the Company as reimbursement for amounts paid in connection
with the acquisition and construction of the Project.
2. The undersigned hereby represents that:
(a) the full amount of such disbursement will be applied to pay or
reimburse the Company for the payment of Project Costs.
(b) that reimbursements being made to the Company pursuant hereto
relate to Project Costs, have been properly incurred, are a proper charge
against the Project Fund pursuant to the Indenture and have not been the
basis of any previous disbursement; and
XXXXXX-XXXXXX, INC.
By:
-------------------------------
Company Representative
DISBURSEMENT CONSENTED TO BY:
THE FIRST NATIONAL BANK OF CHICAGO
By:
-------------------------------
Authorized Bank Representative
Capitalized terms used herein shall have the meanings given to
them in the Indenture of Trust, dated as of November 1, 1996, by and between the
La Mirada Industrial Development Authority and Bankers Trust Company, as
trustee.
A-1
EXHIBIT B
FACILITIES FINANCED FROM BOND PROCEEDS
The Project consists of a single-story, 413,200 square-foot building on
a 26.7-acre site in La Mirada, California. The Project includes a dry
storage area, a freezer/cooler area with 100,000 square feet, and
administrative offices.
The legal description of the real property on which the Project is
located is described as follows:
PARCEL 11, IN THE CITY OF LA MIRADA, COUNTY OF LOS ANGELES, STATE OF
CALIFORNIA AS SHOWN ON THE MAP OF PARCEL MAP NO. 23208, FILED IN BOOK 263
PAGES 35 THROUGH 42 INCLUSIVE OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY
RECORDER OF SAID COUNTY.
EXCEPT FROM THAT PORTION OF SAID LAND LYING WITHIN LOTS 17, 18, 23, 24, 37
AND 38, ALL OIL, GAS, ASPHALTUM, OTHER HYDROCARBON SUBSTANCES AND ALL OTHER
MINERAL RIGHTS AND OTHER SUBSTANCES LYING IN AND UNDER SAID PROPERTY AT A
DEPTH BELOW 500 FEET OF THE SURFACE THEREOF, WITH NO RIGHT OF ENTRY TO THE
SURFACE THEREOF OR WITHIN SAID 500 FEET, AS RESERVED BY X. XXXXXXXXX AND
XXXXXX XXXXXXXXX, HUSBAND AND WIFE, IN DEED RECORDED MAY 24, 1957 AS
INSTRUMENT NO. 2236 IN BOOK 54593 PAGE 382, OFFICIAL RECORDS, BY XXXXX X.
XX XXXXXX, A WIDOW, IN DEED RECORDED MAY 24, 1957 AS INSTRUMENT NO. 2233, IN
BOOK 54593 PAGE 442, OFFICIAL RECORDS, BY X. XXXXXX XX XXXXXX, ALSO KNOWN AS
XXXXXX XX XXXXXX, A MARRIED MAN AND XXXXXX X. XX XXXXXX, HIS WIFE AND
XXXXXXXXX X. XXXXXXXX, A MARRIED WOMAN, IN DEED RECORDED MAY 24, 1957 AS
INSTRUMENT NO. 2234, IN BOOK 54593 PAGE 386, OFFICIAL RECORDS AND BY XXXXXX
X. XX XXXXXX, SURVIVING TRUSTEE UNDER DECLARATION OF TRUST RECORDED IN BOOK
15114 PAGE 126 OF OFFICIAL RECORDS OF LOS ANGELES COUNTY, IN DEED RECORDED
MAY 24, 1957 AS INSTRUMENT NO. 2231 IN BOOK 54593 PAGE 376, OFFICIAL RECORDS.
SAID DEED ALL RECITES: "THE ABOVE EXCEPTION SHALL NOT BE CONSTRUED TO
INCLUDE WATER, WATER RIGHTS OR CLAIMS FOR THE USE THEREOF EXCEPT SUCH WATER
AS IS USED, DIVERTED, INTERFERED WITH, NECESSARY FOR, INCIDENTAL TO OR WHICH
ARISES FROM THE DRILLING, MINING, REMOVAL PRODUCTION, RECOVERY OR EXTRACTION
THEREFROM OF SAID OIL, MINERALS, MINERAL RIGHTS OR OTHER SUBSTANCES AS
HEREINBEFORE SET FORTH.
ALSO EXCEPT FROM THE REMAINDER OF SAID LAND ALL OIL, GAS, ASPHALTUM, OTHER
HYDROCARBON SUBSTANCES AND ALL OTHER MINERALS AND MINERAL RIGHTS AND OTHER
SUBSTANCES LYING IN AND UNDER SAID PUBLIC UTILITY AT A DEPTH BELOW 500 FEET
OF THE SURFACE THEREOF, WITH NO RIGHT OF ENTRY TO THE SURFACE THEREOF OR
WITHIN SAID 500 FEET, AS RESERVED BY X. X. XX XXXXXX, A WIDOWER AND G. XXXXXX
XX XXXXXX, AS TRUSTEE UNDER THE WILL OF XXXXXX XXXXXXX XX XXXXXX, DECEASED,
AND THE DECREE OF THE DISTRIBUTION OF HER ESTATE, IN DEED RECORDED MAY 24,
1957 AS INSTRUMENT NO. 2230 IN BOOK 54593 PAGE 384, OFFICIAL RECORDS.
SAID DEED RECITES: "THE ABOVE EXCEPTION SHALL NOT BE CONSTRUED TO INCLUDE
WATER, RIGHTS OR CLAIMS FOR THE USE THEREOF EXCEPT SUCH WATER
B-1
IS USED, DIVERTED, INTERFERED WITH, NECESSARY FOR, INCIDENTAL TO OR WHICH
ARISES FROM THE DRILLING, MINING, REMOVAL PRODUCTION, RECOVERY OR EXTRACTION
THEREFROM OR SAID OIL, MINERALS, MINERAL RIGHTS OR OTHER SUBSTANCES AS
HEREINBEFORE SET FORTH.
ALSO EXCEPT ALL MINERALS CONTAINED IN THE ABOVE DESCRIBED LAND, INCLUDING
WITHOUT LIMITING THE GENERALITY THEREOF, OIL, GAS AND OTHER HYDROCARBON
SUBSTANCES, AS WELL AS METALLIC OR OTHER SOLID MINERALS, PROVIDED, THAT SANTA
FE SHALL NOT HAVE THE RIGHT TO GO UPON OR USE THE SURFACE OF SAID LAND, OR
ANY PART THEREOF, FOR THE PURPOSE OF DRILLING FOR, MINING, OR OTHERWISE
REMOVING ANY OF SAID MINERALS, SANTA FE MAY HOWEVER, AND HEREBY RESERVES THE
RIGHT TO, REMOVE ANY OF SAID MINERALS FROM SAID LAND BY MEANS OF XXXXX,
SHAFTS, TUNNELS, OR OTHER MEANS OF ACCESS TO SAID MINERALS WHICH MAY BE
CONSTRUCTED, DRILLED OR DUG FROM OTHER LAND, PROVIDED THAT THE EXERCISE OF
SUCH RIGHTS BY SANTA FE SHALL IN NO WAY INTERFERE WITH OR IMPAIR THE USE OF
THE SURFACE OF THE LAND HEREBY CONVEYED OR OF ANY IMPROVEMENTS THEREON, AS
RESERVED BY THE XXXXXXXX, TOPEKA AND SANTA FE RAILWAY COMPANY, BY DEED
RECORDED DECEMBER 28, 1990 AS INSTRUMENT NO. 00-0000000.
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