Exhibit 10.37
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THE INDUSTRIAL DEVELOPMENT AUTHORITY
OF THE CITY OF SHOW LOW, ARIZONA
AND
SNOWFLAKE WHITE MOUNTAIN POWER, LLC
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LOAN AGREEMENT
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Dated as of September 1, 2006
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The interest of The Industrial Development Authority of the City of Show
Low, Arizona in this Loan Agreement and all amounts receivable hereunder (except
the right to receive payments, if any, under Sections 4.2(c), 5.2 and 6.3
hereof) have been assigned to X.X. Xxxxxx Trust Company, National Association,
as Trustee under the Indenture of Trust dated as of September 1, 2006 from The
Industrial Development Authority of the City of Show Low, Arizona.
LOAN AGREEMENT
(This Table of Contents is not a part of
this Loan Agreement and is only for
convenience of reference)
TABLE OF CONTENTS
SECTION HEADING PAGE
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ARTICLE I DEFINITIONS AND INTERPRETATIONS....................... 1
Section 1.1. Definition of Terms................................... 1
Section 1.2. Rules of Interpretation............................... 4
ARTICLE II REPRESENTATIONS....................................... 4
Section 2.1. Representations of the Issuer......................... 4
Section 2.2. Representations of the Company........................ 5
ARTICLE III CONSTRUCTION OF THE PROJECT; ISSUANCE OF THE BONDS.... 6
Section 3.1. Agreement by the Company to Construct and Equip the
Project; Disclaimers by the Issuer................. 6
Section 3.2. Agreement to Issue Bonds; Application of Bond
Proceeds........................................... 6
Section 3.3. Disbursements from the Construction Fund.............. 7
Section 3.4. Establishment of Completion Date; Obligation of the
Company to Complete................................ 8
Section 3.5. Inspection of Project................................. 9
Section 3.6. Investment of Moneys in the Construction Fund, the
Bond Fund and the Rebate Fund...................... 9
Section 3.7. Arbitrage Certifications.............................. 9
ARTICLE IV LOAN OF BOND PROCEEDS; COMPANY PAYMENTS............... 10
Section 4.1. Loan of Bond Proceeds................................. 10
Section 4.2. Loan Repayments; Other Amounts Payable................ 10
Section 4.3. No Defense or Set-Off; Unconditional Obligation....... 12
Section 4.4. Assignment of Issuer's Rights......................... 12
ARTICLE V SPECIAL COVENANTS AND AGREEMENTS...................... 13
Section 5.1. The Company to Maintain its Existence; Conditions
under Which Exceptions Permitted................... 13
Section 5.2. Release and Indemnification Covenants................. 13
Section 5.3. Validity and Tax Exempt Status of the Bonds........... 13
Section 5.4. Insurance............................................. 13
Section 5.5. Maintenance and Repair................................ 14
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Section 5.6. Operation of Project.................................. 14
Section 5.7. Insurance and Condemnation Awards..................... 14
Section 5.8. Qualification in State................................ 14
Section 5.9. Taxation Relating to Project.......................... 14
Section 5.10. Recordation and Other Instruments..................... 14
Section 5.11. Compliance With Orders, Ordinances, Etc............... 15
Section 5.12. Company Option to Elect Fixed Rate.................... 15
Section 5.13. Credit Facility....................................... 15
Section 5.14. Limitations on Actions and Responsibilities........... 17
ARTICLE VI EVENTS OF DEFAULT AND REMEDIES........................ 18
Section 6.1. Events of Default..................................... 18
Section 6.2. Remedies of Default................................... 19
Section 6.3. Agreement to Pay Attorneys' Fees and Expenses......... 20
Section 6.4. No Remedy Exclusive................................... 20
Section 6.5. No Additional Waiver Implied by One Waiver............ 20
Section 6.6. Remedies of the Issuer................................ 20
ARTICLE VII OPTIONAL AND MANDATORY PREPAYMENT..................... 21
Section 7.1. Obligation to Prepay Installments..................... 21
Section 7.2. Option to Prepay Installments......................... 21
Section 7.3. Amount of Prepayment in Certain Events................ 22
Section 7.4. Option to Prepay Installments for Optional Redemption
of Bonds........................................... 23
Section 7.5. Notice of Prepayment.................................. 23
Section 7.6. Redemption of Bonds With Prepayment Moneys............ 23
Section 7.7. Company Option to Purchase in Lieu of Optional
Redemption......................................... 24
ARTICLE VIII MISCELLANEOUS......................................... 24
Section 8.1. Notices............................................... 24
Section 8.2. Assignments........................................... 24
Section 8.3. Severability.......................................... 24
Section 8.4. Execution of Counterparts............................. 25
Section 8.5. Amounts Remaining in Any Fund With the Trustee........ 25
Section 8.6. Amendments, Changes and Modifications................. 25
Section 8.7. Governing Law......................................... 25
Section 8.8. Authorized Representatives............................ 25
Section 8.9. Term of the Agreement................................. 25
Section 8.10. Binding Effect........................................ 26
Section 8.11. References to Credit Facility Provider................ 26
Section 8.12. References to Remarketing Agent....................... 26
Section 8.13. Matters to Be Considered by the Issuer................ 26
Section 8.14. Limited Obligation.................................... 26
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Section 8.15. Issuer Not to Operate Project......................... 27
Section 8.16. Notice Regarding Cancellation of Contracts............ 27
EXHIBIT A DESCRIPTION OF PROJECT................................ A-l
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LOAN AGREEMENT
This LOAN AGREEMENT, made and entered into as of September 1, 2006 by and
between The Industrial Development Authority of the City of Show Low, Arizona, a
nonprofit corporation designated as a political subdivision under the
Constitution and laws of the State of Arizona (the "Issuer"), and Snowflake
White Mountain Power, LLC, an Arizona limited liability company (the "Company")
and a wholly-owned indirect subsidiary of NZ Legacy, LLC, an Arizona limited
liability company.
WITNESSETH:
In consideration of the respective representations and agreements herein
contained, the parties hereto agree as follows (provided, that in the
performance of the agreements of the Issuer herein contained, any obligation it
may thereby incur for the payment of money shall be a limited obligation of the
Issuer, payable solely out of the proceeds derived from this Loan Agreement, the
sale of the Bonds, the income from the temporary investment thereof and moneys
derived from the Credit Facility, all as herein provided);
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
SECTION 1.1. DEFINITION OF TERMS. Certain terms used in this Loan Agreement
are hereinafter defined in this Section 1.1. When used herein, such terms shall
have the meanings given to them by the language employed in this Article I
defining such terms, and the plural includes the singular and the singular
includes the plural, unless the context clearly indicates otherwise:
"Act" means Title 35, Chapter 5, Arizona Revised Statutes, as supplemented
and amended.
"Agreement" means this Loan Agreement as from time to time supplemented and
amended.
"Authorized Company Representative" means such person at the time and from
time to time designated by written certificate furnished to the Issuer, the
Trustee, the Remarketing Agent and the Credit Facility Provider containing the
specimen signature of such person and signed on behalf of the Company by the
President, the president, any vice president, the treasurer or any assistant
treasurer of the Company to act on behalf of the Company. Such certificate may
designate an alternate or alternates.
"Authorized Issuer Representative" means such person at the time and from
time to time designated by written certificate furnished to the Company, the
Remarketing Agent, the Credit Facility Provider and the Trustee containing the
specimen signature of such person and signed on
behalf of the Issuer by the President of its Board of Directors to act in behalf
of the Issuer. Such certificate may designate an alternate or alternates.
"Bond Counsel" means Xxxxxxx and Xxxxxx LLP or such other nationally
recognized municipal bond counsel of recognized expertise with respect to such
matters as may be mutually satisfactory to the Issuer, the Company (so long as
no event of default is then existing under Section 6.1 (a), (b), (c), (d) or (e)
of this Agreement) and the Trustee.
"Bond Fund" means the Bond Fund created and established in Section 6.2 of
the Indenture.
"Bonds" means the $39,250,000 aggregate principal amount of Solid Waste
Disposal Revenue Bonds (Snowflake White Mountain Power, LLC Project) Series 2006
authorized to be issued by the Issuer pursuant to the terms and conditions of
Sections 2.1 and 2.2 of the Indenture.
"Code" means the Internal Revenue Code of 1986, as amended, together with
any regulations promulgated thereunder or applicable thereto.
"Company" means (i) Snowflake White Mountain Power, LLC, and its successors
and assigns, and (ii) any surviving, resulting or transferee entity as permitted
by Section 5.1 hereof.
"Completion Date" means the date of completion of construction of the
Project.
"Construction Fund" means the Construction Fund created and established in
Section 6.6 of the Indenture.
"Construction Period" means the period between the beginning of
construction of the Project or the date on which the Bonds are first delivered
to the purchasers thereof, whichever is earlier, and the Completion Date.
"Cost of the Project" means the sum of the items authorized to be paid from
the Construction Fund pursuant to the provisions of Section 3.3 hereof.
"Event of Default" means any occurrence or event specified as such in and
defined as such by Section 6.1 hereof.
"Indenture" means the Indenture of Trust, including any indentures
supplemental thereto as therein permitted, between the Issuer and the Trustee,
of even date herewith, pursuant to which certain of the Issuer's interests in
this Agreement are pledged as security for the payment of the principal of, and
premium, if any, and interest on, the Bonds.
"Issuer" means The Industrial Development Authority of the City of Show
Low, Arizona, and any successor body to the duties or functions of the Issuer.
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"Permitted Investments" means:
(a) Direct obligations of the United States of America and Canada and
obligations fully guaranteed by any agency thereof;
(b) Direct obligations of, and obligations fully guaranteed by, any of the
fifty states of the United States of America or the ten provinces of Canada
rated a minimum of A1 or AA by S&P or any equivalent rating by any equivalent
rating service (such rating requirement can be met by an attached letter of
credit from any bank meeting the requirements stated in clause (e) below or by
municipal bond insurance);
(c) Indebtedness of any county or other local government body within the
United States of America rated at least A1 or AA by S&P or any equivalent rating
by any equivalent rating service (such rating requirement can be met by an
attached letter of credit from any bank meeting the requirements stated in
clause (e) below or by municipal bond insurance);
(d) Indebtedness of any corporation rated Al or AA by S&P or any equivalent
rating by any equivalent rating service;
(e) Certificates of deposit, banker's acceptances, trust deposits, demand
deposits, including interest bearing money market accounts, or time deposits of
any commercial bank, branch or Edge Act (12 USC 611 et seq.) branch which is a
member of the Federal Reserve System, including the Trustee or any of its
affiliates, has a net worth of at least $100 million and whose short term bank
deposits have an A prefix by Moody's or S&P or any equivalent rating by any
equivalent rating service;
(f) Repurchase agreements or reverse repurchase agreements with financial
institutions whose commercial paper is Al or whose debt rating is AA, or any
bank who meets the requirements as stated in clause (e) above, provided that in
all cases the market value of the collateral used for such transactions must be
adequate to insure safety, liquidity and preservation of capital: AAA-102%,
AA-110%; and
(g) Securities and Exchange Commission Rule 2a-7 money market funds with a
net asset value of one dollar and a parent company rating of Al or better by S&P
or any equivalent rating by any equivalent rating service, including, without
limitation, any mutual fund for which the Trustee or an affiliate of the Trustee
serves as investment manager, administrator, shareholder servicing agent, and/or
custodian or subcustodian, notwithstanding that (a) the Trustee or an affiliate
of the Trustee receives fees from such funds for services rendered, (b) the
Trustee charges and collects fees for services rendered pursuant to the
Indenture, which fees are separate from the fees received from such funds, and
(c) services performed for such funds and pursuant to this Indenture may at
times duplicate those provided to such funds by the Trustee or its affiliates.
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"Plans and Specifications" means the plans and specifications prepared for
the Project by the Company, as amended from time to time prior to the Completion
Date, which plans and specifications are on file at the Principal Office of the
Company.
"Project" means those facilities and related property acquired, constructed
and installed with proceeds from the sale of the Bonds or the proceeds of any
payment by the Company pursuant to Section 3.4 of this Agreement, as more
particularly described in Exhibit A hereto.
"Project Certificate" means the Project Certificate delivered by the
Company concurrently with the issuance of the Bonds.
"Rebate Fund" means the Rebate Fund described in Section 4.2 of the Tax
Agreement.
"Tax Agreement" means the Tax Exemption Certificate and Agreement, dated
the Issue Date, between and among the Issuer, the Trustee and the Company, as it
may be amended in accordance with its terms, relating to the Bonds.
"Trustee" means the Trustee and/or co-trustee at the time serving as such
under the Indenture.
Terms defined in the Indenture and used herein shall have the same meanings
herein as set forth in the Indenture.
SECTION 1.2. RULES OF INTERPRETATION. The words "hereof," "herein,"
"hereunder" and other words of similar import refer to this Agreement as a
whole.
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 headings of this Agreement are for convenience only and shall not
define or limit the provisions hereof.
ARTICLE II
REPRESENTATIONS
SECTION 2.1. REPRESENTATIONS OF THE ISSUER. The Issuer makes the following
representations as the basis for the undertakings on its part herein contained:
(a) The Issuer is a nonprofit corporation designated as a political
subdivision under the Constitution and laws of the State. The Issuer has
the power, pursuant to the provisions of the Act, to enter into the
transactions contemplated by this Agreement and to carry out its
obligations hereunder.
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(b) To finance a portion of the Cost of the Project, the Issuer will
issue its Bonds, which will mature, bear interest and be subject to
redemption as set forth in the Indenture.
(c) The Bonds are to be issued under and secured by the Indenture,
pursuant to which certain of the Issuer's interests in this Agreement 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 and will not pledge or otherwise transfer its
interest in this Agreement other than to the Trustee to secure the Bonds.
(e) The Issuer has not been notified of any listing or proposed
listing of it by the Internal Revenue Service as a bond issuer whose
arbitrage certifications may not be relied upon.
(f) The issuance of the Bonds for the purpose of financing the Cost of
the Project will further the public purposes of the Act.
SECTION 2.2. REPRESENTATIONS OF THE COMPANY. The Company makes the
following representations as the basis for the undertakings on its part herein
contained:
(a) The Company is a limited liability company duly organized and
validly existing under the laws of the State of Arizona, and has power to
enter into and by proper action has been duly authorized to execute and
deliver this Agreement and the Tax Agreement.
(b) Neither the execution and delivery of this Agreement or the Tax
Agreement, the consummation of the transactions contemplated hereby or
thereby, nor the fulfillment of or compliance with the terms and conditions
of this Agreement and the Tax Agreement conflicts with or results in a
breach of any of the terms, conditions or provisions of the Company's
articles of organization or any other organizational restriction or any
agreement or instrument to which the Company is now a party or by which it
is bound, or (with or without the giving of notice or the lapse of time, or
both) constitutes a default under any of the foregoing, or results in the
creation or imposition of any lien, charge or encumbrance prohibited by the
terms of any instrument or agreement to which the Company is now a party or
by which it is bound.
(c) The statements, information and descriptions contained in the
Project Certificate, as of the date hereof and at the time of delivery of
the Bonds, are and will be true and correct.
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ARTICLE III
CONSTRUCTION OF THE PROJECT; ISSUANCE OF THE BONDS
SECTION 3.1. AGREEMENT BY THE COMPANY TO CONSTRUCT AND EQUIP THE PROJECT;
DISCLAIMERS BY THE ISSUER. The Company agrees that it will acquire or construct,
or complete the acquisition and construction of, the Project in Navajo County,
Arizona, substantially in accordance with the Plans and Specifications. Since
the Project has been or will be acquired, constructed and equipped by the
Company and by contractors and suppliers selected by the Company, THE ISSUER
MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE
MERCHANTABILITY, CONDITION OR WORKMANSHIP OF ANY PART OF THE PROJECT OR ITS
SUITABILITY FOR THE COMPANY'S PURPOSES OR THE EXTENT TO WHICH PROCEEDS DERIVED
FROM THE SALE OF THE BONDS WILL PAY THE COSTS TO BE INCURRED IN CONNECTION
THEREWITH OR THE ACTUAL OR DESIGNED CAPACITY OF THE PROJECT, OR THE FITNESS OF
THE PROJECT FOR ANY PARTICULAR PURPOSE OF THE COMPANY.
In the event that Exhibit A hereto is to be amended or supplemented in
accordance with the provisions of Section 12.1 of the Indenture, the Issuer will
enter into, and will instruct the Trustee to consent to, an amendment of or
supplement to Exhibit A hereto upon receipt of:
(i) a certificate of an Authorized Company Representative describing
in detail the proposed changes; and
(ii) a copy of the proposed form of amendment or supplement to Exhibit
A hereto and such other documents, certificates and showings as may be
required by counsel rendering the opinion in clause (iii) of this
paragraph; and
(iii) an opinion of Bond Counsel to the effect that such amendment
complies with the requirements of this Section 3.1, is in proper form for
execution and delivery by the Issuer and will not adversely affect the
validity of the Bonds or the exemption from federal income taxes of the
interest thereon.
SECTION 3.2. AGREEMENT TO ISSUE BONDS; APPLICATION OF BOND PROCEEDS. In
order to provide funds to finance the Cost of the Project, the Issuer agrees
that it will issue under the Indenture, sell and cause to be delivered to the
Underwriter, the Bonds, bearing interest and maturing as set forth in the
Indenture. There will be no accrued interest received upon the delivery of the
Bonds, and, therefore, the Issuer will cause all of the proceeds (net of
underwriting discount, if any) received from the sale of the Bonds to be
deposited in the Construction Fund.
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SECTION 3.3. DISBURSEMENTS FROM THE CONSTRUCTION FUND. The Issuer hereby
authorizes and directs the Trustee, upon compliance with Section 6.7 of the
Indenture, to disburse the moneys in the Construction Fund to or on behalf of
the Company for the following purposes (but, subject to the provisions of
Sections 3.4 and 3.5 hereof, for no other purpose):
(a) Payment to the Company of such amounts, if any, as shall be
necessary to reimburse the Company in full for all advances and payments
made by it at any time prior to or after the delivery of the Bonds for
expenditures in connection with the preparation of the Plans and
Specifications (including any preliminary study or planning of the Project
or any aspect thereof) and the construction and acquisition of the Project.
(b) Payment of the initial or acceptance fee of the Trustee, legal,
financial and accounting fees and expenses, the Issuer's fees and expenses,
Rating Agency fees, printing and engraving costs incurred in connection
with the authorization, issuance and sale of the Bonds, the execution and
filing of the Indenture and the preparation and recording or filing of all
other documents in connection therewith, and payment of all fees, costs and
expenses for the preparation of this Agreement, the Tax Agreement, the
Indenture and all other documents in connection with the authorization,
issuance and sale of the Bonds.
(c) Payment for labor, services, materials and supplies used or
furnished in the construction and acquisition of the Project, and payment
of amounts due under contracts for the acquisition, construction and
installation of the Project, all as provided in the plans, specifications
and work orders therefor.
(d) Payment of the fees, if any, for architectural, engineering,
legal, underwriting and supervisory services with respect to the Project.
(e) To the extent not paid by a contractor for construction or
installation with respect to any part of the Project, payment of the
premiums on all insurance required to be taken out and maintained during
the Construction Period.
(f) Payment of the taxes, assessments and other charges, if any, that
may become payable during the Construction Period with respect to the
Project, or reimbursement thereof if paid by the Company.
(g) Payment of expenses incurred in seeking to enforce any remedy
against any contractor or subcontractor in respect of any default under a
contract relating to the Project.
(h) Interest on the Bonds and payment of certain fees (as identified
in the Tax Agreement) due and payable during the Construction Period.
(i) Payment of any other costs which constitute part of the Cost of
the Project in accordance with generally accepted accounting principles and
which are permitted by
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the Act and will not affect the exemption from federal income taxes of
interest on any of the Bonds.
(j) For transfer to the Rebate Fund in order to comply with the
provisions of the Tax Agreement.
All moneys remaining in the Construction Fund after the Completion Date and
after payment or provision for payment of all other items provided for in the
preceding subsections (a) to (j), inclusive, of this Section, shall at the
direction of the Company be used in accordance with Section 3.4 hereof.
SECTION 3.4. ESTABLISHMENT OF COMPLETION DATE; OBLIGATION OF THE COMPANY TO
COMPLETE. As soon as practicable after the completion of construction of the
Project, and in any event not more than ninety (90) days thereafter, the Company
shall furnish to the Trustee a certificate signed by an Authorized Company
Representative stating (i) that construction of the Project has been completed
substantially in accordance with the Plans and Specifications, (ii) the
Completion Date, (iii) the Cost of the Project, (iv) the portion of the Cost of
the Project which has then been paid and (v) the portion of the Cost of the
Project which has not yet then been paid. Such certificate may state that it is
given without prejudice to any rights against third parties which exist at the
date of such certificate or which may subsequently come into being.
Moneys (including investment proceeds) remaining in the Construction Fund
on the date of such certificate may be used, at the direction of an Authorized
Company Representative, to the extent indicated, for the payment, in accordance
with the provisions of this Agreement, of any Cost of the Project not then paid
as specified in the above-mentioned certificate. Any moneys (including
investment proceeds) remaining in the Construction Fund on the date of the
aforesaid certificate and not so set aside for the payment of such Cost of the
Project shall be transferred or disbursed in accordance with Section 1.142-2 of
the Regulations (as defined in the Tax Agreement) or any successor thereto. The
Company acknowledges that these provisions generally require that a portion of
the Bonds be redeemed, or defeased to the first call date (with appropriate
notice to the Internal Revenue Service), within 90 days of the earlier of (i)
the date on which the Company determines that the Project will not be completed
or (ii) the date on which the Project is Placed-in-Service (as defined in the
Tax Agreement).
In the event the moneys in the Construction Fund available for payment of
the Cost of the Project should not be sufficient to pay the costs thereof in
full, the Company agrees to pay or to deposit in the Construction Fund moneys
sufficient to pay, the costs of completing the Project as may be in excess of
the moneys available therefor in the Construction Fund. The Issuer does not make
any warranty, either express or implied, that the moneys which will be paid into
the Construction Fund and which, under the provisions of this Agreement, will be
available for payment of the Cost of the Project, will be sufficient to pay all
the costs which will be incurred in that connection. The Company agrees that if
after exhaustion of the moneys in the Construction Fund the Company should pay,
or deposit moneys in the Construction Fund for the payment of, any portion of
the Cost of the Project pursuant to the provisions of this Section, the Company
shall not be entitled to any reimbursement therefor from the Issuer or from the
Trustee or from
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the owners of any of the Bonds, nor shall the Company be entitled to any
diminution of the loan repayment installments or other amounts payable under
Section 4.2 hereof.
SECTION 3.5. INSPECTION OF PROJECT. The Company agrees that the Issuer, the
Trustee and their duly authorized agents shall have the right at all reasonable
times during business hours, subject to the Company's usual safety and security
requirements and reasonable confidentiality agreements with respect to
proprietary information, to examine and inspect the Project without interference
or prejudice to the Company's operations.
SECTION 3.6. INVESTMENT OF MONEYS IN THE CONSTRUCTION FUND, THE BOND FUND
AND THE REBATE FUND. Subject to the next succeeding paragraph, any moneys held
as a part of the Construction Fund, the Bond Fund or the Rebate Fund shall at
the written direction (or the oral direction confirmed in writing) of an
Authorized Company Representative be invested or reinvested by the Trustee as
provided in Article VII of the Indenture and in the Tax Agreement, to the extent
permitted by law, in Permitted Investments. Any such direction shall certify
that any investment so directed to be made constitutes a Permitted Investment
and that such investment is permitted to be made under the Indenture, the Tax
Agreement and this Agreement. The Trustee may make any and all such investments
through its own trust investment department or the trust investment department
of any of its affiliates.
Any moneys held as part of the Bond Purchase Fund or the Bond Fund-Credit
Facility Account, any moneys held for the payment of a particular Bond and any
moneys being held by the Trustee pursuant to clause (a)(ii) of the definition of
Available Moneys in Article I of the Indenture shall only be invested by the
Trustee overnight in Governmental Obligations or securities rated AAA or Aaa by
each Rating Agency then rating the Bonds.
The investments purchased pursuant to this Section 3.6 and Article VII of
the Indenture shall be held by the Trustee and shall be deemed at all times a
part of the Construction Fund or the Bond Fund or the Rebate Fund, and any
account or subaccount of any of the foregoing, as the case may be, and the
interest accruing thereon and any profit realized therefrom shall be credited to
such fund, and any account or subaccount therein, and any net losses resulting
from such investment shall be charged to such fund, and any account or
subaccount therein.
The Company covenants that any funds (including investment proceeds) on
deposit in the Construction Fund more than three years after the date of
delivery of the Bonds will not be invested to produce a yield greater than the
yield on the Bonds, all as such terms are used in and determined in accordance
with the regulations promulgated or proposed under relevant provisions of the
Code and shall be treated as provided in the Tax Agreement.
SECTION 3.7. ARBITRAGE CERTIFICATIONS. The Company reasonably expects,
based on its knowledge, information and belief, and hereby certifies and
represents to the Issuer, and the Issuer hereby certifies that it reasonably
expects, based solely on the certifications and representations of the Company,
that the proceeds of the Bonds will not be used in a manner that would cause the
Bonds to be classified as "arbitrage bonds" under Section 148 of the Code and
regulations prescribed under that Section. The Company certifies and covenants
with all purchasers and owners of the Bonds from time to time outstanding that,
so long as any of the
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Bonds remain outstanding, moneys on deposit in any fund or account in connection
with the Bonds, whether or not such moneys were derived from the proceeds of the
sale of the Bonds or from any other sources, will not be used in a manner which
will cause the Bonds to be "arbitrage bonds" within the meaning of the Code, and
any lawful regulations promulgated or proposed thereunder.
ARTICLE IV
LOAN OF BOND PROCEEDS; COMPANY PAYMENTS
SECTION 4.1. LOAN OF BOND PROCEEDS. The Issuer hereby agrees, upon the
terms and conditions in this Agreement, to lend to the Company the proceeds
(there being no accrued interest) received by the Issuer from the sale of the
Bonds.
SECTION 4.2. LOAN REPAYMENTS; OTHER AMOUNTS PAYABLE. (a) On or before each
date provided in or pursuant to the Indenture for the payment of principal of,
premium, if any, and/or interest on the Bonds, including Pledged Bonds and
Company Bonds, until the principal of, premium, if any, and interest on the
Bonds shall have been fully paid or provision for the payment thereof shall have
been made in accordance with the Indenture, the Company covenants and agrees to
pay to the Trustee in federal or other immediately available funds at the
Principal Office of the Trustee for deposit in the Bond Fund, as a loan
repayment installment pursuant to Section 4.1 hereof, a sum equal to the amount
payable on such date as principal (whether at maturity, or upon redemption or
acceleration), premium, if any, and interest upon the Bonds, including Pledged
Bonds and Company Bonds, as provided in the Indenture; provided, however, that
the obligation of the Company to make any such payment shall be reduced by the
amount of moneys on deposit in the Bond Fund on any such date and available to
pay the principal of and premium, if any, and interest on the Bonds on such date
(excluding moneys on deposit in the Bond Fund for the payment of past due
principal of or premium, if any, or interest on Bonds in cases where Bonds have
not been presented for payment or interest checks have not been cashed);
provided further, that in any event the payments under this Section 4.2(a) shall
at all times be sufficient to pay the principal of and premium, if any, and
interest on the Bonds, and if on any date on which the payment of the principal
of, or premium, if any, or interest on, Bonds is due, the Trustee shall not have
sufficient moneys on deposit in the Bond Fund and available therefor to make
each such payment in full, the Company shall immediately pay to the Trustee in
immediately available funds an amount equal to such deficiency. Each payment
made pursuant to this Section 4.2(a) shall be made during normal banking hours.
In the event the Company should fail to make any of the payments required in
this Section 4.2(a), the item or installment so in default shall continue as an
obligation of the Company until the amount in default shall have been fully
paid, and the Company agrees to pay the same with interest thereon to the extent
permitted by law at the rate of interest then borne by the Bonds from the due
date thereof until paid. To secure its obligation to make the payments required
under this Section 4.2(a), the Company agrees to cause the Initial Credit
Facility to be issued and delivered to the Trustee on or prior to the date of
the delivery of the Bonds to, and payment for the Bonds by, the Underwriter. The
Company may at its option supply an Alternate Credit Facility in accordance with
Section 5.13(b) hereof. The obligation of the Company to make payments under
this Section 4.2(a) shall be fully or partially, as the case may be, satisfied
and discharged to the extent
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that, at the time any such payments shall be due or owing, payment of the
principal of, premium, if any, and interest on the Bonds which would have been
paid with such payments shall be paid (or provision for such payment shall be
made as set forth in the Indenture) with amounts received by the Trustee from
(i) moneys drawn under the Credit Facility or (ii) any other source under the
Indenture so long as the amounts are available for such purpose.
(b) The Company agrees to pay the Trustee (1) the reasonable costs and
expenses of the Trustee, including reasonable attorneys' fees and expenses,
incurred by the Trustee in entering into and executing the Indenture and (2) (i)
an amount equal to the reasonable annual fee of the Trustee for the ordinary
services of the Trustee, as trustee, rendered and its reasonable ordinary
expenses incurred under the Indenture, as and when the same become due, (ii) the
reasonable fees, charges and expenses of the Trustee, as paying agent, as tender
agent and as bond registrar, as and when the same become due and (iii) the
reasonable fees, charges and expenses (including reasonable attorneys' fees and
expenses) of the Trustee for any reasonable extraordinary services rendered by
it and extraordinary expenses incurred by it under the Indenture, as and when
the same become due. The Company further agrees to indemnify, defend and save
harmless the Trustee from any and all claims, liabilities, losses, damages,
fines, penalties and expenses (including out-of pocket and incidental expenses
and fees and expenses of in-house or outside counsel) ("Losses") arising out of
or in connection with (i) its execution and performance of the Indenture and
this Agreement, except to the extent that such Losses are due to the negligence
or willful misconduct of the Trustee, or (ii) its following any instructions or
other directions from the Company, except to the extent that its following any
such instruction or direction is expressly forbidden by the terms of the
Indenture or this Agreement. Such indemnifications are intended to and shall be
enforceable by the Trustee or any of its officers, directors, agents or
employees, respectively. In the event the Company should fail to make any of the
payments required in this Section 4.2(b), the item or installment so in default
shall continue as an obligation of the Company until the amount in default shall
have been fully paid, and the Company agrees to pay the same with interest
thereon to the extent permitted by law at the prime rate of the Trustee or of
the largest bank with which it is affiliated, if it has no such rate, at the
time of such failure from the due date thereof until paid. The Trustee's rights
to immunities and protection from liability hereunder and its right to payment
of its fees, expenses and indemnities shall survive its resignation or removal
and the final payment or defeasance of the Bonds.
(c) The Company also agrees to pay when due, upon written request, or to
promptly reimburse the Issuer for (i) the Issuer's initial fee in the amount of
$5,000, (ii) all costs incurred by the Issuer in connection with the financing
of the Project, except as may be paid out of the proceeds of the Bonds,
including without limitation, any necessary expenses incurred or advances
reasonably made by the Board of Directors or any officer of the Issuer while
engaged in the performance of their duties as such directors or officers of the
Issuer, (iii) the fees and expenses of counsel to the Issuer and (iv) all
publication, filing and recording fees. In the event the Company should fail to
make any of the payments required in this Section 4.2(c), the item or
installment so in default shall continue as an obligation of the Company until
the amount in default shall have been fully paid, and the Company agrees to pay
the same with interest thereon to the extent permitted by law at the rate of
interest then borne by the Bonds from the due date thereof until paid.
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(d) The Company agrees to pay to the Trustee amounts sufficient and at such
times as to enable the Trustee to pay the purchase price of any Bonds to be
purchased pursuant to Section 4.1 or Section 4.2 of the Indenture on each
purchase date of such Bonds as set forth in said Section 4.1 or Section 4.2, as
the case may be. All such payments shall be made to the Trustee in lawful money
of the United States of America in federal or other immediately available funds
at the Principal Office of the Trustee with instructions from the Company to the
Trustee to deposit such payments into the Bond Purchase Fund in accordance with
the provisions of Section 6.10(iii) of the Indenture. Each payment pursuant to
this Section 4.2(d) shall at all times be sufficient to pay the purchase price
of any Bonds to be purchased on such date pursuant to Section 4.1 or Section 4.2
of the Indenture; provided that any amount held by the Trustee in the Bond
Purchase Fund on any such date and available to pay any such purchase price
pursuant to Section 6.11(b)(i) or (ii) of the Indenture shall be credited
against the amount due on such date pursuant to this Section 4.2(d) to the
extent available to pay the purchase price of such Bonds on such date.
SECTION 4.3. NO DEFENSE OR SET-OFF; UNCONDITIONAL OBLIGATION. The
obligations of the Company to make the payments required in 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, the Trustee or the Credit Facility Provider, and the Company shall pay
absolutely net during the term of this Agreement the payments to be made as
prescribed in Section 4.2 and all other payments required hereunder free of any
deductions and without abatement, diminution or set-off; and until such time as
the principal of, premium, if any, and interest on the Bonds shall have been
fully paid, or provision for the payment thereof shall have been made in
accordance with the Indenture, 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 agreements contained in this Agreement; and (iii) except as
provided in Article VII hereof, will not terminate this Agreement for any cause,
including, without limiting the generality of the foregoing, destruction of or
damage to the Project, commercial frustration of purpose, any change in the tax
laws of the United States of America or of the State or any political
subdivision of either of these, or any failure of the Issuer, the Trustee or the
Credit Facility Provider to perform and observe any agreement, 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 will assign to the Trustee the Issuer's rights under this
Agreement, including the right to receive payments hereunder (except the right
to receive payments, if any, under Sections 4.2(c), 5.2 and 6.3 hereof), and
hereby directs the Company to make said payments directly to the Trustee. The
Company herewith consents to such assignment and will make such payments
directly to the Trustee without defense or set-off by reason of any dispute
between the Company and the Issuer, the Trustee or the Credit Facility Provider.
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ARTICLE V
SPECIAL COVENANTS AND AGREEMENTS
SECTION 5.1. THE COMPANY TO MAINTAIN ITS EXISTENCE; CONDITIONS UNDER WHICH
EXCEPTIONS PERMITTED. The Company agrees that during the term of this Agreement
it will maintain its existence, will not dissolve or otherwise dispose of all or
substantially all of its assets and will not consolidate with or merge into
another entity or permit one or more entities to consolidate with or merge into
it; provided that the Company may, without violating the agreement contained in
this Section, consolidate with or merge into another entity, or permit one or
more entities to consolidate with or merge into it, or sell or otherwise
transfer to another entity all or substantially all of its assets as an entirety
and thereafter dissolve, provided, the surviving, resulting or transferee
entity, as the case may be, if it is other than the Company, (i) is qualified to
do business in the State, and (ii) assumes in writing all of the obligations of
the Company under this Agreement and the Tax Agreement.
SECTION 5.2. RELEASE AND INDEMNIFICATION COVENANTS. The Company releases
the Issuer (and its directors, officers, employees and agents) from and
covenants and agrees that the Issuer shall not be liable for, and to indemnify
and hold the Issuer (and its directors, officers, employees and agents) harmless
against, any loss or damage to property or any injury to or death of any person
occurring on or about or resulting from the Project or the operation thereof;
including, without limiting the generality of the foregoing, all causes of
action and attorneys' fees and any other expenses incurred in defending any
suits or actions which may arise as a result of any of the foregoing. The
Company further releases the Issuer (and its directors, officers, employees and
agents) from and covenants and agrees that the Issuer (and its directors,
officers, employees and agents) shall not be liable for, and to indemnify and
hold the Issuer harmless against, any liability resulting from or related to the
issuance or sale of the Bonds; including, without limiting the generality of the
foregoing, all causes of action and attorneys' fees and any other expenses
incurred in defending any suits or actions which may arise as a result of any of
the foregoing.
SECTION 5.3. VALIDITY AND TAX EXEMPT STATUS OF THE BONDS. The Company and
the Issuer covenant and agree that they, and each of them, will not take or fail
to take or authorize or permit any action to be taken or not taken and have not
taken or authorized or permitted any action to be taken or not to be taken which
results in interest paid on the Bonds being included in the gross income of any
owner thereof for purposes of federal income taxation (other than an owner who
is a "substantial user" of the Project or a "related person" within the meaning
of Section 147 of the Code and the applicable regulations thereunder) or
adversely affects the validity of the Bonds.
SECTION 5.4. INSURANCE. The Company agrees to maintain, or cause to be
maintained, all necessary insurance with respect to the Project in accordance
with its customary insurance practices, which may include self-insurance. All
costs of maintaining insurance with respect to the Project shall be paid by the
Company and the Issuer shall have no obligation or liability in this regard.
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SECTION 5.5. MAINTENANCE AND REPAIR. The Company agrees that it will (i)
maintain, or cause to be maintained, the Project in as reasonably safe condition
as its operations shall permit and (ii) maintain, or cause to be maintained, the
Project in good repair and in good operating condition, ordinary wear and tear
excepted, making from time to time all necessary repairs thereto and renewals
and replacements thereof. All costs of operating and maintaining the Project
shall be paid by the Company and the Issuer shall have no obligation or
liability in this regard.
SECTION 5.6. OPERATION OF PROJECT. Although the Company intends to operate,
or cause to be operated, the Project for its designed purposes until the date on
which no Bonds are outstanding, the Company is not required by this Agreement to
operate, or cause to be operated, any portion of the Project after the Company
shall deem in its sole discretion that such continued operation is not
advisable, and in such event it is not prohibited by this Agreement from
selling, leasing or retiring all or any such portion of the Project. The Issuer
will execute and deliver at the Company's expense such releases or other
instruments as the Company may request in order to permit the Company to
exercise any of its rights pursuant to this Section 5.6. The net proceeds from
such sale, lease or other disposition, if any, shall belong to, and may be used
for any lawful purpose by the Company, subject to the provisions of Section 5.3
hereof. No such sale, lease or other disposition of all or any portion of the
Project shall reduce or otherwise affect the Company's obligation to pay amounts
under Article IV hereof.
SECTION 5.7. INSURANCE AND CONDEMNATION AWARDS. The net proceeds of any
insurance or condemnation award as a result of the destruction or condemnation
of the Project or any portion thereof shall belong to, and may be used for any
lawful purpose by the Company, subject to the provisions of Section 5.3 hereof.
The Issuer will execute and deliver at the Company's expense any releases or
other instruments which the Company may request in order to permit the
entitlement of the Company to any such proceeds.
SECTION 5.8. QUALIFICATION IN STATE. The Company agrees that throughout the
term of this Agreement the Company will be qualified to do business in the
State.
SECTION 5.9. TAXATION RELATING TO PROJECT. During the term of this
Agreement, the Company will promptly remit when due any taxes, assessments or
other charges levied or imposed in respect of the Project or the installments
payable hereunder to the appropriate taxing body. The Company may, at its own
expense and in its own name, in good faith contest any such taxes, assessments
and other charges and, in the event of such contest, may permit the taxes,
assessments or other charges contested to remain unpaid during the period of
such contest and any appeal therefrom if permitted by applicable law. All taxes,
assessments and other charges levied or imposed with respect to the Project
shall be the obligation of the Company and the Issuer shall have no obligation
or liability in this regard.
SECTION 5.10. RECORDATION AND OTHER INSTRUMENTS. In order to perfect the
security interest of the Trustee in the Trust Estate, the Company will cause
such security agreements or financing statements, naming the Trustee as assignee
and pledgee of the Trust Estate assigned and pledged under the Indenture, for
the payment of the principal of, premium, if any, and interest on the Bonds, to
be duly filed and recorded in the appropriate state and county offices as
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required by the provisions of the Uniform Commercial Code or other similar law
as adopted in the State, as from time to time amended. To continue the
perfection of the security interest evidenced by such security agreements or
financing statements, the Company shall file and record such necessary
continuation statements or supplements thereto and other instruments from time
to time as may be required pursuant to the provisions of said Uniform Commercial
Code or other similar law to fully preserve and protect the security interest of
the Trustee in the Trust Estate. The Issuer, at the expense of the Company,
shall execute and cause to be executed any and all further instruments as shall
be required for such protection and perfection of the interests of the Trustee
and the Bondholders, and the Company shall file and refile such instruments
which shall be necessary to preserve and perfect the lien of the Indenture upon
the Trust Estate until the principal of, premium, if any, and interest on the
Bonds issued thereunder shall have been paid or provision for their payment
shall be made as therein provided.
SECTION 5.11. COMPLIANCE WITH ORDERS, ORDINANCES, ETC. The Company agrees
that it will use its best efforts promptly to comply with all statutes, codes,
laws, acts, ordinances, orders, judgments, decrees, injunctions, rules,
regulations, permits, licenses, authorizations, directions and requirements of
all federal, state, county, municipal and other governmental authorities,
foreseen or unforeseen, ordinary or extraordinary, which now or at any time
hereafter may be applicable to the Project or any part thereof, or to any use,
manner of use or condition of the Project or any part thereof; provided,
however, that the Company may, at its own expense, contest or seek releases or
other relief from such requirements.
SECTION 5.12. COMPANY OPTION TO ELECT FIXED RATE. The Company shall have,
and is hereby granted, the option to elect to adjust the interest rate borne by
the Bonds to the Fixed Rate pursuant to the provisions of Section 2.2 of the
Indenture, subject to the terms and conditions set forth therein; provided,
however, that the Company covenants that it shall not adjust the interest rate
on the Bonds to the Fixed Rate unless the Bonds shall be subject to optional
redemption by the Company pursuant to Section 3.1(a) of the Indenture at the
time of the expiration of the lease with respect to the Project site between the
Company and Abitibi Consolidated Sales Corp.
SECTION 5.13. CREDIT FACILITY, (a) On or prior to the issuance, sale and
delivery of the Bonds to the Underwriter pursuant to Section 2.6 of the
Indenture, the Company hereby covenants and agrees to obtain and deliver to the
Trustee the Initial Credit Facility in the form of (i) an irrevocable,
transferable, direct pay letter of credit to be issued by the Fronting Credit
Facility Provider in favor of the Trustee for the benefit of the owners from
time to time of the Bonds in substantially the form of Exhibit B-6 to the
Fronting Credit Facility Agreement and (ii) an irrevocable confirmation of the
Fronting Credit Facility issued by the Confirming Credit Facility Provider in
substantially the form of Exhibit A to the Confirming Credit Facility Agreement.
The Initial Credit Facility shall be dated September 7, 2006; shall expire on
September 7, 2008, unless otherwise terminated or extended in accordance with
the terms and provisions thereof; shall be in the amount of (i) the aggregate
principal amount of the Bonds (A) to enable the Trustee to pay the principal of
the Bonds at maturity, upon call for redemption prior to maturity or
acceleration, and (B) to enable the Trustee to pay the portion of the purchase
price of Bonds tendered or deemed to be tendered to the Trustee or the
Remarketing Agent for purchase, equal to the aggregate principal amount of such
Bonds plus (ii) an amount equal to the interest to accrue on the Bonds for one
hundred six (106) days at the Cap Rate, calculated on the
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basis of a year of 365 days (A) to enable the Trustee to pay interest accrued on
the Bonds on the dates and in the manner set forth in the Indenture, and (B) to
enable the Trustee to pay the portion of the purchase price of Bonds tendered or
deemed to be tendered to the Trustee or the Remarketing Agent for purchase,
equal to the accrued interest on such Bonds.
(b) The Company may at any time prior to the Fixed Rate Adjustment Date
cause an Alternate Credit Facility with respect to the Bonds to be delivered to
the Trustee. Each Alternate Credit Facility shall be substantially the same as
to form and substance (except for the term) as the Initial Credit Facility. The
Alternate Credit Facility shall have a term ending on or subsequent to the
Stated Expiration Date of the Credit Facility to be replaced, if a Credit
Facility is then in effect; provided, however, in no event shall the term of the
Alternate Credit Facility be less than one (1) year. Concurrently with the
delivery of the Alternate Credit Facility, the Company shall deliver to the
Trustee (i) an opinion of Bond Counsel that such Alternate Credit Facility is
authorized under this Agreement and complies with the terms hereof and that the
provision thereof will not have an adverse effect on the exclusion of the
interest on the Bonds from the gross income of the owners thereof for federal
income tax purposes, (ii) an opinion of Counsel to the Credit Facility Provider
issuing the Alternate Credit Facility stating that such Alternate Credit
Facility is a legal, valid, binding and enforceable obligation of such Credit
Facility Provider (subject to certain customary exceptions with respect to
creditors' rights and equitable considerations), (iii) an opinion of counsel to
the Credit Facility Provider issuing the Alternate Credit Facility stating that
such Alternate Credit Facility is not required to be registered under the
Securities Act of 1933, as amended (which opinion, in the case of an Alternate
Credit Facility issued by a domestic branch or agency of a foreign bank, may be
a reasoned opinion taking into account, among other things, positions and
pronouncements of the Securities and Exchange Commission) and (iv) an opinion of
Counsel (which may assume that no owner is an Insider) addressed to Xxxxx'x, if
the Bonds are then rated by Xxxxx'x, and S&P, if the Bonds are then rated by
S&P, and to any other Rating Agency then rating the Bonds, to the effect that
during the term of any such Alternate Credit Facility payments of principal of,
premium, if any, and interest on the Bonds, and the purchase price of Bonds
tendered for purchase or deemed tendered for purchase under Sections 4.1 and 4.2
of the Indenture, from moneys received under such Alternate Credit Facility will
not constitute preferential payments under Section 547 of the Bankruptcy Code
recoverable under Section 550 of the Bankruptcy Code should the Issuer or the
Company become a debtor in proceedings commenced thereunder. The Trustee shall
then accept such Alternate Credit Facility and surrender any previously held
Credit Facility to the Credit Facility Provider thereof for cancellation
promptly upon such Alternate Credit Facility becoming effective; provided that
the previous Credit Facility Provider has honored all demands for payment on any
Credit Facility being replaced.
(c) The Trustee shall not sell, assign or otherwise transfer the Credit
Facility, except to a successor Trustee under the Indenture and in accordance
with the terms of the Credit Facility and the Indenture.
(d) So long as a Credit Facility is in effect, the Company agrees not to
purchase, and not to permit any Insider or Affiliate of the Company to purchase,
Bonds with any moneys that are not Available Moneys.
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(e) The provisions of this Section 5.13 relating to the provision from time
to time of a Credit Facility are intended to apply only during the Weekly Rate
Period (permitting or requiring, however, as the case may be, draws on the Fixed
Rate Adjustment Date); provided, however, that nothing herein shall be construed
to prohibit the Company from providing at the Company's option credit
enhancement during the Fixed Rate Period.
SECTION 5.14. LIMITATIONS ON ACTIONS AND RESPONSIBILITIES. The Issuer shall
not be required to monitor the financial condition of the Company, the
investment or expenditure of Bond proceeds, or the physical condition or use of
the Project and, unless otherwise expressly provided, shall not have any
responsibility with respect to notices, certificates or other documents filed
with it. The Issuer shall not be required to take notice of any breach or
default except when given notice thereof by the Trustee or the Bondowners, as
the case may be. The Issuer shall not be responsible for the payment of any
rebate to the United States under Section 148(f) of the Code. The Issuer shall
not be required to take any action unless indemnity reasonably satisfactory to
it is furnished for expenses or liability to be incurred therein (other than the
giving of notice). The Issuer, upon written request of the Bondowners or the
Trustee, and upon receipt of reasonable indemnity for expenses or liability,
shall cooperate to the extent reasonably necessary to enable the Trustee to
exercise any power granted to the Trustee by this Agreement or the Indenture.
The Issuer shall be entitled to reimbursement pursuant to Section 4.2(c) hereof
to the extent that it acts without previously obtaining full indemnity.
The Issuer shall be entitled to the advice of counsel (who may be counsel
for any party or for any Bondowner) and shall be wholly protected as to any
action taken or omitted to be taken in good faith in reliance on such advice.
The Issuer may rely conclusively on any notice, certificate or other document
furnished to it under this Agreement or the Indenture and reasonably believed by
it to be genuine. The Issuer shall not be liable for any action taken by it in
good faith and reasonably believed by it to be within the discretion or power
conferred upon it, or in good faith omitted to be taken by it and reasonably
believed to be beyond such discretion or power, or taken by it pursuant to any
direction or instruction by which it is governed under this Agreement and the
Indenture or omitted to be taken by it by reason of the lack of direction or
instruction required for such action under this Agreement and the Indenture, or
be responsible for the consequences of any error of judgment reasonably made by
it. When any payment, consent or other action by the Issuer is called for by
this Agreement and the Indenture, the Issuer may defer such action pending such
investigation or inquiry or receipt of such evidence, if any, as it may require
in support thereof. A permissive right or power to act shall not be construed as
a requirement to act, and no delay in the exercise of a right or power shall
affect the subsequent exercise thereof. The Issuer shall in no event be liable
for the application or misapplication of funds, or for any other acts or
defaults by any person or entity except by its own directors, officers and
employees. No recourse shall be had by the Company, the Trustee or any Bondowner
for any claim based on this Agreement, the Indenture or the Bonds against any
director, officer, employee or agent of the Issuer unless such claim is based
upon the bad faith, fraud or deceit of such person. No covenant, obligation or
agreement of the Issuer contained in this Agreement or the Indenture shall be
deemed to be a covenant, obligation or agreement of any present or future
director, officer, employee or agent of the Issuer in his individual capacity,
and no person executing a Bond shall be liable personally thereon or be subject
to any personal liability or accountability by reason of the issuance thereof.
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ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1. EVENTS OF DEFAULT. The occurrence and continuation of any one
of the following shall constitute an Event of Default:
(a) failure by the Company to pay any amount required to be paid under
Section 4.2(a) hereof with respect to principal of or premium on any Bond
on the dates and at the time specified therein; or
(b) failure by the Company to pay any amount required to be paid under
Section 4.2(a) hereof with respect to interest on any Bond on the dates and
at the time specified therein; or
(c) failure by the Company to pay any amount required to be paid under
Section 4.2(d) hereof with respect to the purchase price of any Bond on the
dates and at the times specified therein; or
(d) failure by the Company to observe and perform any covenant,
condition or agreement on its part to be observed or performed in this
Agreement, other than as referred to in (a), (b) or (c) above, for a period
of 30 days after receipt by the Company of written notice, specifying such
failure and requesting that it be remedied, given to the Company by the
Issuer (with a copy to the Trustee) or the Trustee, unless the Issuer and
the Trustee shall agree in writing to an extension of such time prior to
its expiration; provided, however, if the failure stated in the notice can
be corrected but not within such 30-day period, no Event of Default shall
have occurred if corrective action is instituted by the Company within such
period and diligently pursued until the default is corrected; provided
further, if any such failure obligates the Company to prepay installments
pursuant to Section 7.1(b) hereof, and such prepayment is in fact made by
the Company and Bonds are redeemed with such prepayment moneys as provided
in the Indenture, then such failure by the Company shall not constitute an
Event of Default under this Agreement; or
(e) the dissolution or liquidation of the Company or the filing by the
Company of a voluntary petition in bankruptcy, or failure by the Company
promptly to cause to be lifted any execution, garnishment or attachment of
such consequence as will impair the Company's ability to carry on its
obligations hereunder, or the commission by the Company of any act of
bankruptcy, or adjudication of the Company as a bankrupt, or if a petition
or answer proposing the adjudication of the Company as a bankrupt or its
reorganization, arrangement or debt readjustment under any present or
future federal bankruptcy act or any similar federal or state law shall be
filed in any court and such petition or answer shall not be discharged or
denied within ninety days after the filing thereof, or if the Company shall
admit in writing its inability to pay its debts generally as they become
due, or a receiver, trustee or liquidator of the Company shall be appointed
in any proceeding brought against the Company and shall not be discharged
within ninety
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days after such appointment or if the Company shall consent to or acquiesce
in such appointment, or assignment by the Company for the benefit of its
creditors, or the entry by the Company into an agreement of composition
with its creditors, or a bankruptcy, insolvency or similar proceeding shall
be otherwise initiated by or against the Company under any applicable
bankruptcy, reorganization or analogous law as now or hereafter in effect
and if initiated against the Company shall remain undismissed (subject to
no further appeal) for a period of ninety days; provided, the term
"dissolution or liquidation of the Company," as used in this subsection,
shall not be construed to include the cessation of the existence of the
Company resulting either from a merger or consolidation of the Company into
or with another entity or a dissolution or liquidation of the Company
following a transfer of all or substantially all of its assets as an
entirety or under the conditions permitting such actions contained in
Section 5.1 hereof; or
(f) the occurrence of an "event of default" under the Indenture.
SECTION 6.2. REMEDIES OF DEFAULT. Whenever any Event of Default shall have
happened and is subsisting, the Company shall notify the Trustee in writing as
soon as possible of such Event of Default upon the Company's becoming aware
thereof and the Trustee may take any one or more of the following remedial
steps, subject to Article IX of the Indenture:
(a) By notice in writing to the Company, declare the unpaid loan
repayment installments payable under Section 4.2(a) of this Agreement to be
due and payable immediately, if concurrently with or prior to such notice
the unpaid principal amount of the Bonds has become or has been declared to
be due and payable under Section 9.2(a) of the Indenture, and upon any such
declaration under this Section 6.2(a) the amounts payable under Section
4.2(a) hereof shall become and shall be immediately due and payable in the
amount set forth in Section 9.2(a) of the Indenture; provided, however,
that an Event of Default shall be deemed waived and a declaration
accelerating payment of unpaid loan repayment installments payable under
Section 4.2(a) of this Agreement shall be deemed rescinded without further
action on the part of the Trustee or the Issuer upon any rescission by the
Trustee of the corresponding declaration of acceleration of the Bonds under
Section 9.11 of the Indenture. The Trustee shall as soon as possible after
any such declaration provide the Company with written notice thereof.
(b) Whatever action at law or in equity may appear necessary or
desirable to collect the payments and other amounts then due or to enforce
performance and observance of any obligation, agreement or covenant of the
Company under this Agreement.
The Trustee may not exercise any remedy described in (a) or (b) above without
the Credit Facility Provider's prior written consent.
In case the Trustee 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, then and in every
such case the Issuer, the Company and the Trustee shall be restored respectively
to their several positions and rights hereunder, and all
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rights, remedies and powers of the Issuer, the Company and the Trustee shall
continue as though no such proceeding had been taken.
SECTION 6.3. 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 that it will on demand therefor pay
to the Issuer or the Trustee the reasonable fees and expenses of such attorneys
and such other reasonable expenses so incurred by the Issuer or the Trustee.
SECTION 6.4. NO REMEDY EXCLUSIVE. No remedy herein conferred upon or
reserved to 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, except that the remedy of
acceleration shall be exercised only in the manner set forth in Section 6.2(a)
hereof. 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. Such rights and remedies as are given
the Trustee hereunder are also for the benefit of the Issuer and the owners of
the Bonds, and the Issuer and the owners of the Bonds shall be deemed third
party beneficiaries of all covenants and agreements herein contained. In order
to entitle the Trustee to exercise any remedy reserved to it in this Article, it
shall not be necessary to give any notice, other than such notice as may be
herein expressly required.
SECTION 6.5. NO ADDITIONAL WAIVER IMPLIED BY ONE WAIVER. In the event any
agreement contained in this Agreement should be breached by the Company and
thereafter waived by the Trustee, such waiver shall be limited to the particular
breach so waived and shall not be deemed to waive any other breach hereunder.
SECTION 6.6. REMEDIES OF THE ISSUER. Notwithstanding any contrary provision
in this Agreement or the Indenture, 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 this Agreement and the Indenture. The
Issuer may enforce its rights under this Agreement and the Indenture which have
not been assigned to the Trustee by legal proceedings for the specific
performance of any obligation contained herein or therein or for the enforcement
of any other appropriate legal or equitable remedy, and may recover damages
caused by any breach by the Company of its obligations to the Issuer under this
Agreement, including court costs, reasonable attorney's fees and other costs and
expenses incurred in enforcing such obligations.
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ARTICLE VII
OPTIONAL AND MANDATORY PREPAYMENT
SECTION 7.1. OBLIGATION TO PREPAY INSTALLMENTS. The Company shall have the
obligation to prepay installments payable hereunder in whole (or in the case of
the events stated in (b) or (c) of this Section 7.1 in whole or in part), if any
of the following shall have occurred:
(a) As a result of any changes in the Constitution of the State or the
Constitution of the United States of America or by 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) this Agreement shall have become void or unenforceable or
impossible of performance in accordance with the intent and purposes of the
parties as expressed in this Agreement; or
(b) A final determination by the Internal Revenue Service or a court
of competent jurisdiction as a result of a proceeding in which the Company
participates to the degree it deems sufficient, which determination the
Company, in its discretion, does not contest by an appropriate proceeding,
that, as a result of failure by the Company to observe any covenant,
agreement or representation by the Company in this Agreement, the interest
payable on the Bonds or any of them is includable for federal income tax
purposes in the gross income of any owner of a Bond (other than an owner
who is a "substantial user" of the Project or a "related person" within the
meaning of Section 147 of the Code and the applicable regulations
thereunder); or
(c) Proceeds of the Bonds, including income from the investment
thereof, shall remain after completion of the Project and the payment of
the Cost of the Project.
In case of any of the events stated in this Section 7.1, the Company agrees
it will fulfill its obligation and prepay within 180 days (or 90 days in the
case of (c) of this Section) after the Company has notice or actual knowledge of
such event (which in the case of (c) of this Section shall be deemed to occur on
the date of the filing of the completion certificate in accordance with Section
3.4 hereof).
SECTION 7.2. OPTION TO PREPAY INSTALLMENTS. The Company shall have the
option to prepay the installments payable hereunder in whole, but not in part,
if any of the following shall have occurred:
(a) The Project or the Plant shall have been damaged or destroyed (in
whole or in part) by fire or other casualty to such extent that in the
opinion of the Company, in its sole discretion, it is not practicable or
desirable to rebuild, repair or restore the Project or the Plant; or
(b) Title to, or the temporary use of, all or substantially all the
Project or the Plant shall have been taken under the exercise of the power
of eminent domain by any
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governmental authority, or person, firm or corporation acting under
governmental authority; or
(c) Changes in the economic availability of raw materials, operating
supplies or facilities necessary for the operation of the Project or the
Plant shall have occurred or such technological or environmental or other
changes shall have occurred which in the Company's judgment render the
continued operation of the Project or the Plant uneconomic.
If the Company elects to exercise an option granted in this Section 7.2, it
must exercise such option and prepay within 180 days after it has notice or
actual knowledge of the event permitting the exercise of such option.
SECTION 7.3. AMOUNT OF PREPAYMENT IN CERTAIN EVENTS. To fulfill the
obligation set forth in Section 7.1 hereof or to exercise the option granted in
Section 7.2 hereof the Company shall, within 90 days (or within 45 days in the
case of Section 7.1(c) hereof) after it receives notice or has actual knowledge
of the event authorizing or requiring the exercise of such option or obligation,
give written notice to the Issuer and to the Trustee as provided in Section 7.5
hereof. Such notice shall specify the date for the prepayment of the
installments which shall be on or before the redemption date for the Bonds (the
date for redemption of the Bonds being hereinafter called the "Redemption
Date").
The amount payable by the Company upon the occurrence of an event set forth
in Section 7.1(a) hereof or in the event of the Company's exercise of the option
granted in Section 7.2 hereof to prepay installments in whole shall be the sum
of the following:
(1) an amount of money which, when added to the amount then on deposit
in the Bond Fund, will be sufficient to redeem (or when invested in
Governmental Obligations in which such money is required to be invested
will without reinvestment mature as to principal and interest, if any, at
times and in amounts sufficient to redeem) the outstanding Bonds on the
Redemption Date, which amount shall consist of the principal amount
thereof, all interest accrued and to accrue to the Redemption Date and
expenses incurred or to be incurred in connection with the prepayment of
installments and the redemption of the Bonds,
(2) an amount of money equal to the Trustee's fees and expenses under
the Indenture accrued and to accrue until the Redemption Date, and
(3) an amount of money sufficient to discharge all other liabilities
of the Company accrued under this Agreement.
Upon the occurrence of the event stated in Section 7.1(b) hereof: (a) if
all of the Bonds then outstanding are to be redeemed, as provided in Section
3.1(c) of the Indenture, the amount payable by the Company hereunder will be the
sum of the amounts specified in the next preceding paragraph; and (b) if less
than all of the Bonds then outstanding are to be redeemed, as provided in
Section 3.1(c) of the Indenture, the amount payable by the Company hereunder
will
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be an amount which will be sufficient to redeem (or when invested in
Governmental Obligations in which such money is required to be invested will
without reinvestment mature as to principal and interest, if any, at times and
in amounts sufficient to redeem) the Bonds or portions thereof (in Authorized
Denominations) to be redeemed on the Redemption Date, which amount shall consist
of the principal amount thereof, all interest accrued and to accrue thereon to
said Redemption Date, and expenses incurred or to be incurred in connection with
such prepayment of installments and such redemption of Bonds.
Upon the occurrence of the event stated in Section 7.1(c) hereof, the
amount payable by the Company hereunder will be an amount which, together with
the amount then remaining on deposit in the Construction Fund and available for
such purpose, will be sufficient to redeem (or when invested in Governmental
Obligations in which such money is required to be invested will without
reinvestment mature as to principal and interest, if any, at times and in
amounts sufficient to redeem) the Bonds or portions thereof (in Authorized
Denominations) to be redeemed on the Redemption Date, which amount shall consist
of the principal amount thereof, all interest accrued and to accrue thereon to
said Redemption Date, and expenses incurred or to be incurred in connection with
such prepayment of installments and such redemption of Bonds.
SECTION 7.4. OPTION TO PREPAY INSTALLMENTS FOR OPTIONAL REDEMPTION OF
BONDS. The Company shall have, and is hereby granted, the option to prepay from
time to time installments under this Agreement in the manner, from the sources
and on the dates specified in Section 3.1(a) of the Indenture and at prices
sufficient to redeem (or when invested in Governmental Obligations in which such
money is required to be invested will without reinvestment mature as to
principal and interest, if any, at times and in amounts sufficient to redeem)
all or part of the Bonds in Authorized Denominations in accordance with the
provisions of the Indenture.
SECTION 7.5. NOTICE OF PREPAYMENT. To exercise an option granted in or an
obligation required by this Article VII, the Company shall give written notice
to the Issuer and the Trustee not less than 45 days prior to the Redemption Date
(or such later date as is acceptable to the Issuer and the Trustee) which shall
specify therein the amount of such prepayment, the provisions of this Agreement
permitting or requiring such prepayment and the date upon which such prepayment
will be made, which date shall be not later than the Redemption Date, together
with such other information, if any, as shall be reasonably necessary in order
to enable the Trustee to call Bonds for redemption under the applicable
provisions of the Indenture. In the Indenture the Issuer will authorize the
Trustee forthwith to take all steps necessary under the applicable provisions of
the Indenture to effect redemption of all or part of the then outstanding Bonds,
as may be the case, under applicable provisions of the Indenture.
SECTION 7.6. REDEMPTION OF BONDS WITH PREPAYMENT MONEYS. By virtue of the
assignment of the rights of the Issuer under this Agreement to the Trustee as
provided in Section 4.4 hereof, the Company agrees to and shall pay any amount
required or permitted to be paid by it under this Article VII directly to the
Trustee. The Trustee shall use the moneys so paid to it by the Company to redeem
(directly or through the application of maturing principal and interest, if any,
of Governmental Obligations in which such moneys are required to be invested)
the Bonds on the date set for such redemption pursuant to Sections 7.3 and 7.5
hereof.
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SECTION 7.7. COMPANY OPTION TO PURCHASE IN LIEU OF OPTIONAL REDEMPTION. The
Company shall have, and is hereby granted, the option to elect to purchase Bonds
in lieu of optional redemption pursuant to the provisions of Section 3.1(f) of
the Indenture, subject to the terms and conditions set forth therein.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. NOTICES. Unless otherwise specifically provided, all notices,
certificates or other communications shall be sufficiently given if in writing
and shall be deemed given: (i) three days after the same are deposited in the
United States mail and sent by registered or certified mail, return receipt
requested, or (ii) when the same are delivered by hand, or (iii) when the same
are sent by confirmed facsimile transmission, or (iv) on the next Business Day
when the same are sent by overnight delivery service (with the signature of the
receiving party required), in each case to the parties at the addresses set
forth below: if to the Issuer, at 000 X. Xxxxx Xxxxx, Xxxx Xxx, Xxxxxxx 00000,
or Telecopy No. (000) 000-0000, Attention: President; if to the Trustee, at 000
X. Xxxx Xxxxxx, 0xx Xxxxx, Mail Code AZ1-5105, Xxxxx, Xxxxxxx 00000, or Telecopy
No. (000) 000-0000, Attention: Corporate Trust Department; if to the Remarketing
Agent, at 0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxx 00000, or
Telecopy No. (000) 000-0000, Attention: Public Finance Department; if to the
Company, at 0000 X. Xxx Xxxxx Xxxxx, Xxxx, Xxxxxxx 00000, or Telecopy No. (480)
718-7977, Attention: Xxxxxx X. Xxxxxxx; if to the Fronting Credit Facility
Provider, at 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000, or
Telecopy No. (000) 000-0000, Attention: Xxxxx X. Xxxxxx; and if to the
Confirming Credit Facility Provider, at 000 Xxxxx Xxxxxxxxx Plaza, Mail Code
IL1-0236, Xxxxxxx, Xxxxxxxx 00000-0000, or Telecopy No. (000) 000-0000,
Attention: Standby Letter of Credit Unit. A duplicate copy of each notice,
certificate or other communication given hereunder by either the Issuer or the
Company shall also be given to the Trustee, the Remarketing Agent and the Credit
Facility Provider. The Issuer, the Company, the Remarketing Agent, the Trustee
and the Credit Facility Provider may, by written notice given hereunder,
designate any further or different addresses to which subsequent notices,
certificates or other communications shall be sent.
SECTION 8.2. ASSIGNMENTS. This Agreement may not be assigned by either
party without consent of the other and the Trustee, except that the Issuer shall
assign to the Trustee certain of its rights under this Agreement as provided by
Section 4.4 hereof and the Company may assign to any transferee or any surviving
or resulting entity its rights under this Agreement as provided by Section 5.1
hereof.
SECTION 8.3. 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.
-24-
SECTION 8.4. EXECUTION OF 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 8.5. AMOUNTS REMAINING IN ANY FUND WITH THE TRUSTEE. It is agreed
by the parties hereto that after payment in full of (i) the principal of,
premium, if any, and interest on the Bonds (or provision for the payment thereof
having been made in accordance with the provisions of the Indenture), (ii) the
purchase price of all Bonds (other than Pledged Bonds or Company Bonds) tendered
or deemed to be tendered to the Trustee pursuant to Sections 4.1 and 4.2 of the
Indenture (or the cancellation of all Bonds pursuant to Section 6.11 of the
Indenture), (iii) the fees, charges and expenses of the Issuer, the Trustee and
the Remarketing Agent in accordance with this Agreement and the Indenture and
(iv) all other amounts required to be paid under this Agreement, the Tax
Agreement and the Indenture, any amounts remaining in any fund or accounts
maintained under this Agreement or the Indenture and not applied to the payments
of the above in accordance with the provisions of this Agreement and the
Indenture shall belong to and be paid by the Trustee to the Credit Facility
Provider so long as a Credit Facility is then in effect, but only to the extent
of any obligations owed by the Company to the Credit Facility Provider
thereunder, and otherwise to the Company as an overpayment of loan repayment
installments.
SECTION 8.6. AMENDMENTS, CHANGES AND MODIFICATIONS. Except as otherwise
provided in this Agreement or the Indenture, subsequent to the issuance of Bonds
and prior to their payment in full (or provision for payment thereof having been
made in accordance with the provisions of the Indenture), this Agreement may not
be effectively amended, changed, modified, altered or terminated without the
written consent of the Trustee and the Credit Facility Provider, and only in
accordance with the provisions of Article XII of the Indenture.
SECTION 8.7. GOVERNING LAW. This Agreement shall be governed exclusively by
and construed in accordance with the applicable laws of the State.
SECTION 8.8. AUTHORIZED REPRESENTATIVES. Whenever under the provisions of
this Agreement the approval of the Company is required or the Issuer, the
Remarketing Agent or the Trustee is required to take some action at the request
of the Company, such approval or such request shall be given for the Company by
an Authorized Company Representative, and the Issuer, the Remarketing Agent and
the Trustee shall be authorized to act on any such approval or request and
neither party hereto shall have any complaint against the other or against the
Remarketing Agent or the Trustee as a result of any such action taken. Whenever
under the provisions of this Agreement the approval of the Issuer is required or
the Company, the Remarketing Agent or the Trustee is required to take some
action at the request of the Issuer, such approval or such request shall be
given for the Issuer by an Authorized Issuer Representative, and the Company,
the Remarketing Agent and the Trustee shall be authorized to act on any such
approval or request and neither party hereto shall have any complaint against
the other or against the Remarketing Agent or the Trustee as a result of any
such action taken.
SECTION 8.9. TERM OF THE AGREEMENT. The term of this Agreement shall
commence as of the date hereof and, unless sooner terminated as provided in this
Agreement, shall expire on
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the date that all of the Bonds and all fees, indemnities, expenses and charges
of the Issuer and the Trustee have been fully paid or provision made for such
payment.
SECTION 8.10. BINDING EFFECT. This Agreement shall inure to the benefit of
and shall be binding upon the Issuer, the Company and their respective
successors and assigns; subject, however, to the limitations contained in
Sections 4.4,5.1 and 8.2 hereof.
SECTION 8.11. REFERENCES TO CREDIT FACILITY PROVIDER. If the Credit
Facility is not in effect at any time, all references to the Credit Facility
Provider herein shall be deemed ineffective. The provisions of this Agreement
requiring the consent of the Credit Facility Provider or requiring action to be
taken at the direction of the Credit Facility Provider shall be deemed
ineffective if the Credit Facility Provider is at any such time in default in
its obligations under the Credit Facility. So long as the Initial Credit
Facility Provider has been fully reimbursed, any actions required or permitted
to be taken by the Initial Credit Facility Provider may be taken by CoBank, ACB,
as Collateral Agent or as Administrative Agent under the Fronting Credit
Facility Agreement. If a Credit Facility consists of a Fronting Credit Facility
and a Confirming Credit Facility, any actions required or permitted to be taken
by the Credit Facility Provider shall be taken by the Fronting Credit Facility
Provider unless moneys have been realized under the Confirming Credit Facility
Provider for which the Confirming Credit Facility Provider has not been
reimbursed, in which event such actions shall be taken by the Confirming Credit
Facility. If a Credit Facility consists of a Fronting Credit Facility and a
Confirming Credit Facility, provisions herein (i) which provide for or require
the reinstatement of the Credit Facility mean that both the Fronting Credit
Facility and the Confirming Credit Facility are available to be drawn upon for
the full amount thereof, and (ii) which provide for the payment of moneys to the
Credit Facility Provider (including under the Credit Agreement) mean payment to
the Fronting Credit Facility Provider to the extent that moneys are due to the
Fronting Credit Facility Provider under the Fronting Credit Facility Agreement
and to the Confirming Credit Facility Provider to the extent that moneys are due
to the Confirming Credit Facility Provider under the Confirming Credit Facility
Agreement.
SECTION 8.12. REFERENCES TO REMARKETING AGENT. All references to the
Remarketing Agent herein shall be deemed ineffective after the Fixed Rate
Adjustment Date.
SECTION 8.13. MATTERS TO BE CONSIDERED BY THE ISSUER. In approving,
concurring in or consenting to action or in exercising any discretion or in
making any determination under this Agreement and the Indenture, the Issuer may
consider the interests of the public, as well as the interests of the other
parties and the Bondowners; provided, however, nothing shall be construed as
conferring on any person other than the other parties and the Bondowners any
right to notice, hearing or participation in the Issuer's consideration, and
nothing in this section shall be construed as conferring on any of them any
right additional to those conferred elsewhere. Subject to the foregoing, the
Issuer will not unreasonably withhold any approval or consent to be given by it
hereunder.
SECTION 8.14. LIMITED OBLIGATION. Under no circumstances shall the Issuer
be obligated directly or indirectly to pay any Cost of the Project, principal of
or premium, if any, or interest on the Bonds, or expenses of operation,
maintenance and upkeep of the Project, except from
-26-
Bond proceeds or from funds received under this Agreement and the Indenture,
exclusive of funds received by the Issuer for its own use. This Agreement and
the Indenture and the Bonds shall not create any debt of the State or any
political subdivision thereof with respect to the Project, other than a special
obligation of the Issuer pursuant to the Act. Nothing contained therein shall in
any way obligate the State or any political subdivision thereof to raise any
money by taxation or use other public funds for any purpose in relation to the
Project. Neither the State or any political subdivision thereof nor the Issuer
shall pay or promise to pay any debt or meet any financial obligation to any
person at any time in relation to the Project except from moneys received or to
be received under the provisions of this Agreement and the Indenture or derived
from the exercise of the Issuer's rights thereunder, excluding moneys receive
for its own purposes.
SECTION 8.15. ISSUER NOT TO OPERATE PROJECT. Nothing contained in this
Agreement or the Indenture shall be construed to require or authorize the Issuer
to operate the Project itself or to conduct any business enterprise in
connection therewith.
SECTION 8.16. NOTICE REGARDING CANCELLATION OF CONTRACTS. As required by
the provisions of Section 38-511, Arizona Revised Statutes, as amended, notice
is hereby given that political subdivisions of the State of Arizona or any of
their departments or agencies may, within three (3) years of its execution,
cancel any contract, without penalty or further obligation, made by the
political subdivisions or any of their departments or agencies on or after
September 30, 1988, if any person significantly involved in initiating,
negotiating, securing, drafting or creating the contract on behalf of the
political subdivisions or any of their departments or agencies is, at any time
while the contract or any extension of the contract is in effect, an employee or
agent of any other party to the contract in any capacity or a consultant to any
other party of the contract with respect to the subject matter of the contract.
The cancellation shall be effective when written notice from the chief executive
officer or governing body of the political subdivision is received by all other
parties to the contract unless the notice specifies a later time.
The Company covenants and agrees not to employ as an employee, agent or,
with respect to the subject matter of this Agreement, a consultant, any person
significantly involved in initiating, negotiating, securing, drafting or
creating this Agreement on behalf of the Issuer within three (3) years from the
execution hereof, unless a waiver is provided by the Issuer.
-27-
IN WITNESS WHEREOF, The Industrial Development Authority of the City of
Show Low, Arizona and Snowflake White Mountain Power, LLC have caused this
Agreement to be executed in their respective names and attested by their duly
authorized officers and have caused their corporate seals to be affixed hereto,
all as of the date first above written.
THE INDUSTRIAL DEVELOPMENT AUTHORITY OF
THE CITY OF SHOW LOW, ARIZONA
By /s/ Xxxxx Xxxxxx
-------------------------------------
President Board of Directors
ATTEST:
By /s/ Xxxxx Xxxxxxxx
----------------------------------
Secretary
SNOWFLAKE WHITE MOUNTAIN POWER, LLC
By
-------------------------------------
Its
------------------------------------
ATTEST:
By
----------------------------------
Secretary
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IN WITNESS WHEREOF, The Industrial Development Authority of the City of
Show Low, Arizona and Snowflake White Mountain Power, LLC have caused this
Agreement to be executed in their respective names and attested by their duly
authorized officer or officers and have caused their corporate seals to be
affixed hereto, where applicable, all as of the date first above written.
THE INDUSTRIAL DEVELOPMENT AUTHORITY OF
THE CITY OF SHOW LOW, ARIZONA
By
-------------------------------------
President, Board of Directors
(SEAL)
ATTEST:
By
----------------------------------
Secretary
SNOWFLAKE WHITE MOUNTAIN POWER, LLC
By /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Sole Manager
-28-
EXHIBIT A
DESCRIPTION OF PROJECT
The Project consists of solid waste disposal facilities at the Plant, all
as more fully described in the Project Certificate.
