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EXHIBIT 10.41
Execution Copy
LOAN AGREEMENT
BETWEEN
VILLAGE OF GURNEE, ILLINOIS
AND
STERIGENICS GROWTH INTERNATIONAL
Dated as of
April, 1996
Relating to the Issuance of:
7,750,000.
Village of Gurnee, Illinois
Industrial Development Revenue Bonds
(SteriGenics International Project), Series 1996
Certain rights of Village of Gurnee, Illinois (the "Issuer") under this
Loan Agreement have been assigned and pledged to, and are subject to a security
interest in favor of Bank One, Columbus, N.A., Columbus, Ohio, as trustee (the
"Trustee") under the Indenture of Trust, dated as of even date herewith, as
amended or supplemented from time to time, between the Issuer and the Trustee,
which secures $7,750,000 in aggregate principal amount of the Issuer's
Industrial Development Revenue Bonds (SteriGenics International Project), Series
1996.
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LOAN AGREEMENT
TABLE OF CONTENTS
(The Table of Contents for this Loan Agreement is for convenience of reference
only and is not intended to define, limit or describe the scope or intent of any
provisions of this Loan Agreement.)
ARTICLE I
DEFINITIONS AND CERTAIN RULES OF INTERPRETATION .................................................... 2
Section 1.1. Definitions .................................................................... 2
Section 1.2. Certain Rules of Interpretation ................................................ 4
Section 1.3. Other Defined Terms ............................................................ 4
ARTICLE II
REPRESENTATIONS .................................................................................... 5
Section 2.1. Representations by the Issuer .................................................. 5
Section 2.2. No Representation or Warranty by Issuer as to Project .......................... 6
Section 2.3. Representations by the Company ................................................. 6
Section 2.4. Modification and Termination of Special Tax Covenants .......................... 8
Section 2.5. Purchase of Bonds by Issuer and Company ........................................ 8
Section 2.6. Further Assurances ............................................................. 8
ARTICLE III
ISSUANCE OF THE BONDS; ACQUISITION, CONSTRUCTION,
INSTALLATION AND FINANCING OF PROJECT .............................................................. 9
Section 3.1. Agreement to Acquire, Construct and Equip the Project .......................... 9
Section 3.2. Agreement to Issue Bonds; Application of Proceeds;
Construction Fund .............................................................. 9
Section 3.3. Limitation of Issuer's Liability ............................................... 9
Section 3.4. Disclaimer of Warranties ....................................................... 9
Section 3.5. Cost of Project ................................................................ 10
Section 3.6. Establishment of Completion Date; Obligation of
Company to Complete ............................................................ 10
Section 3.7 Operation of the Project ....................................................... 11
Section 3.8. Investment of Funds ............................................................ 12
Section 3.9. Special Arbitrage Certifications ............................................... 12
Section 3.10. Depositories of Moneys and Security for Deposit ................................ 12
ARTICLE IV
PROVISIONS FOR PAYMENT ............................................................................. 13
Section 4.1. Tide to the Project. ........................................................... 13
Section 4.2. Payment Obligations of the Company ............................................. 13
Section 4.3. Credit Facility; Alternate Credit Facility; Confirmation
Letter; Substitute Confirmation Letter ......................................... 14
Section 4.4. Administrative Expenses ........................................................ 15
Section 4.5. Obligations of the Company Absolute and Unconditional .......................... 15
Section 4.6. Company Consent to Assignment of Loan Agreement
and Execution of Indenture ..................................................... 16
Section 4.7. Company's Performance Under Indenture .......................................... 16
ARTICLE V
PARTICULAR AGREEMENTS .............................................................................. 17
Section 5.1. Maintenance, Operation and Insuring of Project;
Taxes; No Operation of Project by Issuer ....................................... 17
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Section 5.2. Issuer's, Trustee's and Paying Agent's Expenses;
Release and Indemnification Provisions ........................................... 17
Section 5.3. Maintenance of Existence ......................................................... 15
Section 5.4. Agreement of Issuer Not to Assign or Pledge ...................................... 18
Section 5.5. Redemption of Bonds .............................................................. 18
Section 5.6. Reference to Bonds Ineffective After Bonds Paid .................................. 19
Section 5.7. Assignment, Sale or Lease of Project ............................................. 19
Section 5.8. Non-Arbitrage Covenant ........................................................... 19
Section 5.9. Financing Statements ............................................................. 19
Section 5.10. Compliance with Reimbursement Agreement ......................................... 19
Section 5.11. Inspection of Project ........................................................... 20
Section 5.12. Project List .................................................................... 20
Section 5.13. No Warranty of Condition or Suitability by Issuer ............................... 20
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES ....................................................................... 21
Section 6.1. Events of Default Defined ........................................................ 21
Section 6.2. Remedies ......................................................................... 22
Section 6.3. No Remedy Exclusive .............................................................. 23
Section 6.4. Agreement to Pay Counsel Fees and Expenses ....................................... 23
Section 6.5. Waiver of Events of Default and Rescission of Acceleration ....................... 23
ARTICLE VII
PREPAYMENT UNDER LOAN AGREEMENT ...................................................................... 24
Section 7.1. Option to Prepay in Full ......................................................... 24
Section 7.2. Mandatory Prepayment ............................................................ 24
Section 7.3. Option to Prepay in Part ......................................................... 24
Section 7.4. Relation of Options to Indenture ................................................. 24
Section 7.5. Obligations After Payment of Now and Termination
of ▇▇▇▇ Agreement ................................................................ 24
ARTICLE VIII
MISCELLANEOUS ........................................................................................ 25
Section 8.1. Term of Loan Agreement ........................................................... 25
Section 8.2. Notices .......................................................................... 25
Section 8.3. Binding Effect ................................................................... 26
Section 8.4. Severability ..................................................................... 26
Section 8.5. Amounts Remaining in Bond Fund ................................................... 26
Section 8.6. Reliance by Issuer ............................................................... 26
Section 8.7. Issuer's Obligations Limited ..................................................... 26
Section 8.8. Immunity of Directors, Officers and Employees of Issuer .......................... 27
Section 8.9. Payments by Credit Provider; Confirming Bank ..................................... 27
Section 8.10. Amendments, Changes and Modifications ........................................... 27
Section 8.11. Counterparts .................................................................... 27
Section 8.12. Captions ........................................................................ 27
Section 8.13. Amendment of Loan Agreement ..................................................... 27
Section 8.14. Law Governing Construction of Loan Agreement .................................... 28
Section 8.15. No Third Party Beneficiary ...................................................... 28
EXHIBIT A DESCRIPTION OF PROJECT
EXHIBIT B PROMISSORY NOTE
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LOAN AGREEMENT
This LOAN AGREEMENT (the "Loan Agreement") is entered into as of April
1, 1996, between the VILLAGE OF GURNEE,ILLINOIS (the "Issuer"), a municipal
corporation and a body politic and corporate, duly organized and validly exiting
under the laws of the State of Illinois, and STERIGENCIS INTERNATIONAL, a
California corporation (the "Company");
PREAMBLES
WHEREAS, the Issuer is a municipal corporation and a body politic and
corporate, duly organized and validly existing under the laws of the State of
Illinois;
WHEREAS, the Issuer has full lawful power and authority to enter into
this Loan Agreement by and through its governing-body pursuant to the provisions
of The Industrial Project Revenue Bond Act, 65 ILCS 5/11-74-1, et. seq., as
supplemented and amended (the "Act");
WHEREAS, the Issuer is authorized by the provisions of the Act to issue
its revenue bonds from time to time and lend the proceeds thereof to a private
corporation as provided in the Act for the purpose of paying for all or any part
of the cost of capital projects for use by a manufacturing, industrial,
research, transportation or commercial enterprise, including a capital project
such as the Project (as hereinafter defined) authorized under the Act;
WHEREAS, the Issuer is further authorized by the provisions of the Act
to mortgage and pledge any or all of such facilities, whether then owned or
thereafter acquired, as security for the payment of the principal of, premium,
if any, and interest on any such revenue bonds issued thereunder and any
agreements made in connection therewith and to pledge or assign the revenues and
receipts from such facilities or loan or from any other source to the payment of
such bonds;
WHEREAS, by resolution adopted pursuant to and in accordance with the
provisions of the Act, the Issuer has determined that the financing of (i) the
acquisition of an approximately 11 acre site at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, (ii) the acquisition, construction and equipping of an approximately
78,000 square foot contract radiation sterilization processing facility thereon
and (iii) the acquisition and installation of machinery, equipment and other
personal property to be used in connection therewith, to be used primarily for
the sterilization of health care, laboratory, pharmaceutical and packaging
products (collectively, the "Project"), which constitutes an "industrial
project" under the Act, is in the public interest and has authorized and
undertaken to finance the Project and to obtain the funds therefor by the
issuance of its $7,750,000 Industrial Development Revenue Bonds (SteriGenics
International Project), Series 1996 (the "Bonds") under an Indenture of Trust
dated as of April 1, 1996 securing such Bonds, between the Issuer and Bank One,
Columbus, N.A., as trustee (the "Trustee"), dated as of the date hereof (the
"Indenture");
WHEREAS, the Issuer proposes to loan the proceeds for the sale of the
Bonds to the Company to finance the costs of the Project upon the terms and
conditions hereinafter set forth;
WHEREAS, the Company has agreed under this Loan Agreement to make, or
cause to be made, payments sufficient to pay when due (whether at stated
maturity, upon redemption, by acceleration, upon purchase or otherwise) the
principal of, premium, if any, and interest on the Bonds; and
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WHEREAS, in order to further secure the Company's obligation to make
the payments due under this Loan Agreement and to provide for the purchase of
Bonds, the Company and Comerica Bank-California (the "Credit Provider") have
entered into the Reimbursement Agreement (as defined below) pursuant to which
the Credit Provider will issue its irrevocable, direct pay letter of credit in
an amount not to exceed $7,880,000 in favor of the Trustee at the request and
for the account of the Company upon the terms set forth in the Reimbursement
Agreement, and which will be confirmed by Comerica Bank, a Michigan state
banking corporation (the "Confirming Bank"), through the issuance of its
confirmation letter (the "Confirmation Letter") providing for the Confirming
Bank to honor conforming drawings under the Credit Facility to the extent that
such drawings are not honored by the Credit Provider in accordance with the
terms and conditions of the Credit Facility.
NOW THEREFORE, for and in consideration of the premises and the
respective representations and agreements and mutual covenants contained in this
Loan Agreement, the Issuer and the Company covenant and agree as follows:
ARTICLE I
DEFINITIONS AND CERTAIN RULES OF INTERPRETATION
Section 1.1. DEFINITIONS. In addition to the words and terms elsewhere
defined herein, the following words and terms as used herein shall have the
following meanings unless the context or use clearly indicates another or
different meaning or intent, and any other words and terms defined in the
Indenture shall have the same meanings when used herein as assigned them in the
Indenture unless the context or use clearly indicates another or different
meaning or intent
"CLERK" means the Village Clerk or Assistant Village Clerk of the
Issuer.
"COMPANY DOCUMENTS" means this Loan Agreement, the Note, the Placement
and Remarketing Agreement and the Credit Provider Documents.
"COST OF PROJECT" with respect to the Project shall be deemed to
include the cost of all items permitted to be financed under the provisions of
the Act, including those items set forth in Section 3.5.
"COUNTY" means the County of Lake, Illinois, a political subdivision of
the State.
"CREDIT PROVIDER DOCUMENTS" means the Reimbursement Agreement, the
Environmental Indemnity, the Mortgage, the Security Agreement and the Guaranty.
"CREDIT PROVIDER REPRESENTATIVE" means each person at the time
designated to act on behalf of the Credit Provider by written certificate
furnished to the Company and the Trustee containing the specimen signature of
each such person and signed on behalf of the Credit Provider by a Vice President
or its President. Such Certificate may designate an alternate or alternates.
"DEFAULT" means an event or condition the occurrence of which would,
with the lapse of time or the giving of notice or both, become an Event of
Default hereunder.
"EVENT OF DEFAULT" means one of the events so denominated and described
in Section 6.1 hereof.
"ENVIRONMENTAL INDEMNITY" means the unsecured environmental indemnity
agreement dated as of April 1, 1996 by and between the Company and the Credit
Provider.
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"GUARANTY" means the unsecured guaranty dated as of April 1, 1996 from
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇. and The ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇. Trust for the benefit of the
Credit Provider.
"INDENTURE" means the Indenture of Trust, of even date herewith,
between the Issuer and the Trustee, pursuant to which the Bonds are to be issued
and secured, including any amendments, supplements, alterations or modifications
thereto from time to time.
"INDEPENDENT ARCHITECT" means an architect, engineer or firm of
architects or engineers selected by the Company, which architect, engineer or
firm of architects or engineers must have no specific interest, direct or
indirect, in the Company, and, in the case of individual, must not be a
director, officer or employee of the Company and, in the case of a firm, must
not have a partner, director, officer or employee who is a director, officer or
employee of the Company.
"INDEPENDENT COUNSEL" means an attorney, or firm thereof, admitted to
practice law before the highest court of any state in the United States of
America or the District of Columbia and not an employee on a full-time basis of
either the Issuer, the Trustee, the Credit Provider or the Company (but who or
which may be regularly retained by any one or more of them).
"INDEPENDENT ENGINEER" means an engineer or engineering firm registered
and qualified to practice the profession of engineering under the laws of the
State and not an employee on a full-time basis of either the Issuer or the
Company (but who or which may be regularly retained by either).
"LOAN AGREEMENT" means this Loan Agreement as it now exists and as it
may hereafter be amended, modified or supplemented from time to time pursuant to
Article CXII of the Indenture.
"MORTGAGE" means the Mortgage dated as of April 1, 1996, executed and
delivered by the Company to the Credit Provider, as amended, modified or
supplemented from time to time.
"NET PROCEEDS OF SALE OF THE BONDS" means those proceeds of the sale of
the Bonds remaining after payment of all expenses in connection with the
issuance of the Bonds and the deposit of all accrued interest (if any) received
from the sale of the Bonds in the Bond Fund.
"NOTE" means the promissory note of the Company in the principal amount
of $7,750,000, dated as of April 19, 1996, in the form attached hereto as
Exhibit B, issued pursuant hereto and delivered to the Issuer as consideration
for the loan of the proceeds of the Bonds for the acquisition, construction and
equipping of the Project, and any amendment or supplement thereto or
substitution therefor.
"OWNER" or "OWNERS" means the registered owner of any Bond shown on the
bond registration books kept by the Paying Agent as Registrar.
"PAYMENT IN FULL OF THE BONDS" specifically encompasses the situations
referred to in Article XI of the Indenture.
"PLEDGED REVENUES" means and shall include:
(a) the payments required to be made by or on behalf of the
Company under this Loan Agreement except payments to (i) the Trustee
and the Paying Agent for services rendered as Trustee under the
Indenture and as Paying Agent for the Bonds and payments to be made to
any Co-Trustee for services rendered under the Indenture and (ii)
expenses, indemnification and other payments required to be made
pursuant to Sections 5.2 and 6.4 hereof;
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(b) all moneys and securities from time to time held by the
Trustee under the Indenture in any fund or account (other than the
Rebate Fund) and any proceeds which arise with respect to any
disposition of any of the property, money, securities and interests
granted by the Issuer to the Trustee under the Granting Clause of the
Indenture; and
(c) all moneys received by the Trustee from time to time as a
result of a draw under the Credit Facility or the Confirmation Letter,
if applicable.
"President" means the Village President of the Issuer.
"PROJECT" means (i) the acquisition of an approximately 11 acre site at
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, (ii) the acquisition, construction and
equipping of an approximately 78,000 square foot contract radiation
sterilization processing facility thereon and (iii) the acquisition and
installation of machinery, equipment and other personal property to be used in
connection therewith, to be used primarily for the sterilization of health care,
laboratory, pharmaceutical and packaging products, as more fully described on
Exhibit A hereto.
"SECURITY AGREEMENT" means the Pledge and Security Agreement dated as
of April 1, 1996 from the Company in favor of the Credit Provider, as amended,
modified or supplemented from time to time.
"TAX REGULATORY AGREEMENT" means the Tax Exemption Certificate and
Agreement dated April 19, 1996 executed among the Issuer, the Company and the
Trustee.
"TRUSTEE FEES" means the periodic fees and expenses charged by the
Trustee in order to serve as Trustee under the Indenture.
"U.C.C." means the Uniform Commercial Code of the State, as now or
hereafter amended.
Section 1.2. CERTAIN RULES OF INTERPRETATION. The definitions set forth
in Section 1.1 shall be equally applicable to both the singular and plural forms
of the terms therein defined and shall cover all genders.
"HEREIN " HEREINBY," "HEREUNDER," "HEREOF," "HEREINBEFORE,"
"HEREINAFTER" and other equivalent words refer to this Loan Agreement and not
solely to the particular Article, Section or subdivision hereof in which such
word is used.
Reference herein to an Article number (e.g., Article IV) or a Section
number (e.g., Section 6.2) shall be construed to be a reference to the
designated Article number or Section in this Loan Agreement unless the context
or use clearly indicates another or different meaning or intent.
Section 1.3. OTHER DEFINED TERMS. Capitalized terms used herein and not
otherwise defined in this Loan Agreement shall have the meanings given such
terms in the Indenture.
[End of Article 1]
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ARTICLE II
REPRESENTATIONS
Section 2.1 REPRESENTATIONS BY THE ISSUER. The Issuer makes the
following representations as the basis for the undertakings on its part herein
contained:
(a) ORGANIZATION AND AUTHORITY. The Issuer is a municipal
corporation and a body politic and corporate, duly organized and
validly existing under the laws of the State of Illinois. The Issuer
has all requisite power and authority under the Act to (i) issue the
Bonds, (ii) lend the proceeds thereof to the Company to reimburse the
Company for certain costs incurred in acquiring, constructing and
equipping the Project, and (iii) enter into, and perform its
obligations under this Loan Agreement, the Placement and Remarketing
Agreement and the Indenture.
(b) PENDING LITIGATION. To the knowledge of the Issuer, there
are no actions, suits, proceedings, inquiries or investigations
pending, or to the knowledge of the Issuer threatened, against or
affecting the Issuer in any court or before any governmental authority
or arbitration board or tribunal, which involve the possibility of
materially and adversely affecting the transactions contemplated by
this Loan Agreement, the Placement and Remarketing Agreement or the
Indenture or which, in any way, would materially and adversely affect
the validity or enforceability of the Bonds, the Indenture, the
Placement and Remarketing Agreement, this Loan Agreement or any
agreement or instrument to which the Issuer is a party and which is
used or contemplated for use in the consummation of the transactions
contemplated hereby or thereby.
(c) ISSUE, SALE AND OTHER TRANSACTIONS ARE LEGAL AND
AUTHORIZED. The issuance and sale of the Bonds and the execution and
delivery by the Issuer of this Loan Agreement, the Placement and
Remarketing Agreement and the Indenture, and the compliance by the
Issuer with all of the provisions of each thereof and of the Bonds (i)
are within the purposes, powers and authority of the Issuer, (ii) have
been done in full compliance with the provisions of the Act, are legal
and will not conflict with or constitute on the part of the Issuer a
violation of or a breach of or default under, or result in me creation
of any lien, charge or encumbrance upon any property of the Issuer
(other than as contemplated in the Indenture) under the provisions of,
any activating resolution, by-law, indenture, mortgage, deed of trust,
note agreement or other agreement or instrument to which the Issuer is
a party or by which the Issuer is bound, or to the best of Issuer's
knowledge any license, judgment, decree, law, statute, order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Issuer or any of its activities or properties,
and (iii) have been duly authorized by all necessary corporate action
on the part of the Issuer.
(d) GOVERNMENTAL CONSENTS; COMPLIANCE WITH LAWS. No further
approval, consent or withholding of objection on the part of, or
filing, registration or qualification with, any regulatory or
governmental body, federal, State or local, is required in connection
with (1) the execution, issuance, sale and delivery of the Bonds by the
Issuer, (2) the execution or delivery of or compliance by the Issuer
with the terms and conditions of this Loan Agreement, the Placement and
Remarketing Agreement and the Indenture, or (3) the assignment by the
Issuer of its rights under the Loan Agreement and the Note. The
consummation by the Issuer of the transactions set forth in the manner
and under the terms and conditions as provided herein will comply with
all applicable State, local and federal laws and any rules and
regulations promulgated thereunder by any regulatory authority or
agency.
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(e) NO DEFAULTS; NO CONFLICTS. To the best of the Issuer's
knowledge, no event has occurred and no condition exists with respect
to the Issuer which would constitute an "event of default" as defined
in this Loan Agreement, the Placement and Remarketing Agreement or the
Indenture or which, with the lapse of time or with the giving of notice
or both, would become such an "event of default." To the best of the
Issuer's knowledge, the Issuer is not in default in the payment of
principal of or interest on any of its indebtedness for borrowed money
and, to the best of the Issuer's knowledge, is not in default under any
instrument under or subject to which any indebtedness for borrowed
money has been incurred, and no event has occurred and is continuing
under the provisions of any such instrument that with the lapse of time
or the giving of notice, or both, would constitute an event of default
thereunder. The Issuer is not (1) in violation of the resolution
creating it or any existing law, rule or regulation applicable to it or
(2) to the best of the Issuer's knowledge, in default under any
indenture, mortgage, deed of trust, lien, lease, contract, note, order
judgment decree or other agreement instrument or restriction of any
kind by which it or any of its assets are or may be bound or affected.
The execution and delivery by the Issuer of this Loan Agreement, the
Indenture and the issuance of the Bonds and compliance with the terms
and conditions hereof and thereof will not conflict with or result in
the breach of or constitute a default under any of the above described
instruments or other restrictions.
(f) NO PRIOR PLEDGE. Neither this Loan Agreement nor any of
the Pledged Revenues have been pledged or hypothecated in any manner or
for any purpose other than as provided in the Indenture as security for
the payment of the Bonds.
(g) NATURE AND LOCATION OF PROJECT. The financing of the Cost
of Project is authorized under the Act and is in furtherance of the
public purpose for which the Issuer was created. The Issuer authorizes
the Company, subject to the terms and conditions set forth in this Loan
Agreement, which terms and conditions the Issuer determines to be
necessary, desirable and proper, to provide for the acquisition,
construction and equipping of the Project by such means as shall be
available to the Company and in the manner determined by the Company.
The Project is wholly located within the corporate limits of the
Village of Gurnee, Illinois.
(h) NO INTEREST OF TRUSTEES OF THE ISSUER. No trustee of the
Issuer nor any officer, employee or agent thereof is, in his or her own
name or in the name of a nominee, a director, officer or holder of an
ownership interest in any person, association, trust, corporation,
partnership or other entity which is, in its own name or in the name of
a nominee, a party to any contract or agreement related to the
transactions contemplated by this Loan Agreement or the Indenture.
Section 2.2. NO REPRESENTATION OR WARRANTY BY ISSUER AS TO PROJECT. The
Issuer makes no representation or warranty concerning the suitability of the
Project for the purpose for which it is being undertaken by the Company. The
Issuer has not made any independent investigation as to the feasibility or
creditworthiness of the Company, and any bond purchaser, assignee of the Loan
Agreement or any other party with any interest in this transaction, shall make
its own independent investigation as to the creditworthiness and feasibility of
the Project, independent of any representation or warranties of the Issuer.
Section 2.3. REPRESENTATIONS BY THE COMPANY. The Company makes the
following representations as the basis for the undertakings on its part herein
contained:
(a) Organization and Power. The Company (a) is a corporation
(i) duly organized, validly existing and in good standing under the
laws of the State of California and (ii) duly qualified as a foreign
corporation, validly existing and in good standing under the laws of
the State
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of Illinois and (b) has all requisite power and authority and all
necessary licenses and permits to own and operate its properties and to
carry on its business as now being conducted and as presently proposed
to be conducted except where failure to obtain or retain a license or
permit would not have a materially adverse effect on the Company's
business.
(b) PENDING LITIGATION. There are no proceedings pending, or
to the knowledge of the Company threatened, against or affecting the
Company in any court or before any governmental authority, arbitration
board or tribunal which if adversely determined, would materially and
adversely affect the transactions contemplated by this Loan Agreement,
the Place and Remarketing Agreement or the Indenture or which, in any
way, would materially and adversely affect the properties, business,
prospects, profits or condition (financial or otherwise) of the
Company, or the ability of the Company to perform its obligations under
the Company Documents. The Company is not in default with respect to an
order of any court, governmental authority, arbitration board or
tribunal.
(c) AGREEMENTS ARE LEGAL AND AUTHORIZED. The execution and
delivery by the Company of each of the Company Documents and the
compliance by the Company with all of the provisions hereof and thereof
(i) are within the corporate power of the Company, (ii) will not
conflict with or result in any breach of any of the provisions of, or
constitute a default under, or result in the creation of any lien,
charge or encumbrance upon any property of the Company under the
provisions of, any agreement, articles of incorporation, by-laws or
other instrument to which the Company is a party or by which it may be
bound, or any license, judgment, decree, law, statute, order, rule or
regulation of any court or government agency or body having
jurisdiction over the Company or any of its activities or properties,
(iii) will not result in a violation of any constitutional or statutory
provision or order, rule, regulation, decree or ordinance of any court,
government or governmental authority having jurisdiction over the
Company or its property, and (iv) have been duly authorized by all
necessary corporate action on the part of the Company.
(d) GOVERNMENTAL CONSENT. Neither the Company nor any of its
businesses or properties nor any relationship) between the Company and
any other person, nor any circumstances in connection with the
execution, delivery and performance by the Company of the Company
Documents or the offer, issue, sale or delivery by the Issuer of the
Bonds, is such as to require the consent, approval or authorization of,
or the filing, registration or qualification with, any governmental
authority on the part of the Company other than those already obtained;
provided, however, that no representation is made as to any consents,
approvals or authorizations required in connection with the
construction or occupancy of the Project.
(e) NO DEFAULTS. No event has occurred and no condition exists
with respect to the Company that would constitute an "event of default"
under any of the Company Documents or which, with the lapse of time or
with the giving of notice or both, would become such an "event of
default." The Company is not in violation in any material respect of
any agreement, articles of incorporation, by-laws or other instrument
to which it is a party or by which it may be bound. The Company is not
in default in the payment of principal of or interest on any of its
indebtedness for borrowed money and is not in default under any
instrument under and subject to which any indebtedness has been
incurred, and no event has occurred and is continuing under the
provisions of any such instrument that with the lapse of time or the
giving of notice, or both, would constitute an event of default
thereunder.
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(f) COMPLIANCE WITH LAW. The Company is not in violation in
any material way of any laws, ordinances, governmental rules or
regulations to which it is subject and has not failed to obtain any
licenses, permits, franchises or other governmental authorizations
necessary to the ownership of its properties or to the conduct of its
business, which violation or failure to obtain might materially and
adversely affect the properties, business, prospects, profits or
conditions (financial or otherwise) of the Company.
(g) RESTRICTIONS ON THE COMPANY. The Company is not a party to
any contract or agreement that materially and adversely affects the
business of the Company.
(h) LOCATION OF PROJECT. The Project is located entirely
within the geographical boundaries of the ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇.
Section 2.4. MODIFICATION AND TERMINATION OF SPECIAL TAX COVENANTS.
Subsequent to the issuance of the Bonds and prior to their payment in full (or
provision for the payment thereof having been made in accordance with the
provisions of the Indenture), neither this Loan Agreement nor the Note may be
amended, changed, modified, altered or terminated except as permitted herein and
by the Indenture and with the written consent of the Company, the Trustee and
the Credit Provider. Subject to Article X11 of the Indenture, the Issuer, the
Trustee, and the Company hereby agree to amend this Loan Agreement to the extent
required or permitted, in the opinion of Bond Counsel, in order for interest on
the Bonds to be excluded from gross income of the Owners thereof for federal
income tax purposes under Section 103(a) of the Code. The party requesting such
amendment shall notify the other party to this Loan Agreement and the Trustee of
the proposed amendment, with a copy of such requested amendment to Bond Counsel.
After review of such proposed amendment, Bond Counsel shall render to the
Trustee an opinion as to the effect of such proposed amendment upon the
includability of interest on the Bonds in the gross income of the recipient
thereof for federal income tax purposes.
Section 2.5. PURCHASE OF BONDS BY ISSUER AND COMPANY. Except for
purchases to pay the Purchase Price of Bonds tendered or deemed tendered under
the Indenture, the Issuer and the Company agree that they shall not purchase any
Bonds, directly or indirectly.
Section 2.6. FURTHER ASSURANCES. The Company will execute and deliver
such other documents, instruments, agreements and certificates, and do such
further acts, as the Trustee under the Indenture may reasonably require for the
better assuring, assigning and confirming to the Trustee the amounts assigned
under the Indenture for the payment of the Bonds.
[End of Article II]
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ARTICLE III
ISSUANCE OF THE BONDS; ACQUISITION, CONSTRUCTION,
INSTALLATION AND FINANCING OF PROJECT
Section 3.1. AGREEMENT TO ACQUIRE, CONSTRUCT AND EQUIP THE PROJECT. The
Company shall cause the acquisition, construction and equipping of the Project
to be completed as described in Exhibit A attached hereto, as such Exhibit A may
be amended from time to time by the Company; provided, that in the case of a
material change in such Exhibit A there shall be filed with the Issuer and the
Trustee the written approving opinion of Bond Counsel to the effect that such
change will not impair the exclusion of the interest on any of the Bonds from
the gross income of the Owners thereof for federal income tax purposes. The
Company agrees to obtain all licenses, permits and consents required for the
acquisition, construction and installation of the Project, and the Issuer shall
have no responsibility therefor. The Company will not take any action or fail to
take any action which would adversely affect the qualification of the Project
under the Act or the exclusion of the interest on the Bonds from gross income of
the Owners thereof for federal income tax purposes.
Section 3.2. AGREEMENT TO ISSUE BONDS; APPLICATION OF PROCEEDS;
CONSTRUCTION FUND. In order to provide funds to make a loan to the Company for
the payment of a portion of the cost of acquiring, constructing and equipping
the Project, the Issuer agrees that as soon as possible it will authorize,
validate, sell and cause to be delivered to the initial purchaser or purchasers
thereof, the Bonds, bearing interest and maturing as set forth in Article II of
the Indenture, at a price to be approved by the Company and Credit Provider, and
it will thereupon make the loan of the proceeds of the Bonds received from the
sale thereof by depositing the sale proceeds in the Construction Fund created
under the Indenture. The moneys in the Construction Fund shall be used to
finance the acquisition, construction and equipping the Project and for paying
certain of the costs of issuing the Bonds.
Section 3.3. LIMITATION OF ISSUER'S LIABILITY. ANYTHING CONTAINED IN
THIS LOAN AGREEMENT TO THE CONTRARY NOTWITHSTANDING, ANY OBLIGATION THE ISSUER
MAY INCUR IN CONNECTION WITH THE UNDERTAKING OF THE PROJECT FOR THE PAYMENT OF
MONEY SHALL NOT BE DEEMED TO CONSTITUTIONAL AN INDEBTEDNESS NOR A LOAN OF THE
CREDIT OF THE ISSUE THE STATE OR ANY POLITICAL SUBDIVISION THEREOF WITHIN THE
MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISION, BUT SHALL BE PAYABLE
SOLELY FROM THE REVENUES AND RECEIPTS DERIVED BY IT FROM THIS LOAN AGREEMENT AND
THE NOTE, INCLUDING PAYMENTS RECEIVED UNDER THE NOTE, AND FROM PAYMENTS MADE
PURSUANT TO THE CREDIT FACILITY OR THE CONFIRMATION LETTER. NO OWNER OF THE
BONDS WILL HAVE THE RIGHT TO COMPEL ANY EXERCISE OF TAXING POWER OF THE ISSUER,
THE STATE OR ANY POLITICAL SUBDIVISION[ THEREOF TO PAY THE BONDS OR THE INTEREST
THEREON, AND THE BONDS DO NOT CONSTITUTE AN INDEBTEDNESS NOR A LOAN OF THE
CREDIT OF THE ISSUER, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF WITHIN THE
MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISION. NO OFFICER OR MEMBER OF
THE ISSUER, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF SHALL BE PERSONALLY
LIABLE ON CTHIS LOAN AGREEMENT OR THE NOTE.
Section 3.4. DISCLAIMER OF WARRANTIES. The Company recognizes that
since the Project has been acquired, constructed and equipped by the Company and
by contractors and suppliers selected by the Company, NETHER THE ISSUER NOR THE
TRUSTEE MAKES ANY REPRESENTATION OR WARRANTY, EXPRESS OR RAPLIED, WITH RESPECT
TO THE MERCHANTABILITY, CONDITION OR WORKMANSHIP OF ANY PART OF THE PROJECT OR
ITS SUITABILITY FOR THE PURPOSES OF THE COMPANY OR THE EXTENT TO WHICH PROCEEDS
DERIVED FROM THE SALE OF THE BONDS WILL PAY THE COST TO BE INCURRED IN
CONNECTION THEREWITH.
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Section 3.5 COST OF PROJECT. The Company covenant sand agrees that it
will cause at least: 95% of the moneys in the Construction Fund (including any
earnings on investment of such moneys) to be disbursed for Qualified Costs of
Construction (as defined below) and all of such proceeds to be disbursed for
costs permitted by the Act. The Company further covenants that no more than
$155,000 of the moneys in the Construction Fund will be disbursed for payment of
issuance costs within the meaning of the Code. The Company covenants that none
of the moneys in the Construction Fund will be disbursed for the payment of any
costs incurred or paid prior to October 18, 1995. Further, the Company covenants
to comply with all provisions of the Project Certificate which are hereby
incorporated by reference herein.
"Qualified Cogs of Construction" means that portion of the cost of the
Project which is chargeable to the Project's capital account Or Federal income
tax purposes or which would be so chargeable either with a proper election by
the Company under the Code or but for a proper election by the company to deduct
such amount and which were incurred and paid, or are to be incurred and paid, on
or after October 18, 1995.
Section 3.6 ESTABLISHMENT OF COMPLETION DATE; OBLIGATION OF COMPANY TO
COMPLETE. The completion of the acquisition, construction and equipping of the
Project shall be evidenced to the Trustee by a certificate signed by the Company
Representative stating such date (the "Completion Date") and the cost of the
Project and stating that (i) the acquisition, construction and equipping of the
Project has been completed substantially in accordance with the plans,
specifications and work orders therefor and all labor, services, materials and
supplies used in such acquisition, construction and equipping have been paid for
(other than costs and expenses for which payment has been withheld), (ii) all
other facilities necessary in connection with the Project have been constructed,
acquired and installed in accordance with the plans, specifications and work
orders therefor and all costs and expenses incurred in connection therewith
(other than costs and expenses for which payment has been withheld) have been
paid and (iii) (a) at least 95% of the costs previously disbursed and to be
disbursed from the Construction Fund (including moneys to be disbursed in
accordance with the next succeeding paragraph of this Section 3.6) are Qualified
Costs of Construction (as defined in Section 3.5 above), (b) all costs disbursed
from the Construction Fund are costs permitted by the Act, (c) no more than
$155,000 of the moneys on deposit in the Construction Fund will be disbtirsed Or
the payment of issuance cost within the meaning of the Code, and (d) none of the
moneys in the Construction Fund will be disbursed for the payment of any costs
incurred or paid prior to October 18,1995. The Company may withhold payment and
direct the Trustee to retain in the Construction Fund an amount to pay any Cost
of the Project which has been incurred; such retained moneys shall be disbursed
after the Completion Date in the manner provided herein and in the Indenture. If
the Company withholds the payment of any such cost or expense of the Project the
certificate shall state the amount of such withholding and the reason therefor.
Notwithstanding the foregoing, 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 be subsequently come into being. It shall be the
duty of the Company to cause such certificate to be furnished to the Trustee
within 60 days after the Project shall have been completed.
Moneys (including investment proceeds) remaining in the Construction
Fund on the date of such certificate may be used, at the direction of the
Company Representative to the extent indicated, for one or more of the following
purposes:
(1) for the payment, in accordance with the provisions of this
Agreement, if any cost of the Project not theretofore paid, as
specified in the above-mentioned completion certificate; or
(2) for transfer to the Bond Fund, but only if, and to the
extent that, the Trustee has been furnished with an opinion of Bond
Counsel to the effect that such transfer is lawful under the Act and
does not adversely affect the exclusion from federal gross income of
interest on any of the Bonds.
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Any moneys (including investment proceeds) remaining in the
Construction Fund on the date of the aforesaid certificate and not set aside for
the payment of costs of the Project as specified in (1) above or transferred to
the Bond Fund pursuant to (2) above shall on such date be deposited by the
Trustee in a separate escrow account and used to pay all or part of the
redemption price of Bonds at the earliest redemption date or dates on which
Bonds may be redeemed without the payment of a premium or, at the option of the
Company, at an earlier redemption date or dates; provided that, until so used
such moneys may also be used, at the direction of the Company Representative,
for one or more of the following purposes:
(a) to pay all or part of the price of purchasing Bonds on tender, in
the open market or at private sale, at a purchase price not in excess of 100% of
the principal amount of such Bonds plus accrued interest to the date of such
purchase for the purpose of cancellation;
(b) for the payment of qualifying costs of any additional improvements
to be installed or constructed on the Project site, provided that such use of
funds is permitted under the Act; or
(c) for any other purpose permitted by the Act;
provided, that the earnings on the investment of me moneys on deposit in such
escrow account shall be transferred on each interest payment date on the Bonds
to the Bond Fund and shall be used to pay interest on the Bonds coming due on
each interest payment date on the Bonds (or to reimburse the Credit Provider for
draws under the redit Facility to pay interest on the Bonds), but no moneys
(including, earnings on the investment of such moneys) on deposit in such escrow
account may be used for any of the purposes specified in this paragraph
(including the redemption of Bonds) unless and until the Trustee has been
furnished with an opinion of Bond Counsel to the effect that such use is lawful
under the Act and does not adversely affect the exclusion from gross income for
Federal income tax purposes of the interest on any of the Bonds; and provided
further that, until used for one or more of the foregoing purposes, moneys on
deposit in such escrow account may be invested in investments authorized by this
Agreement and the Indenture, but may not be invested to produce a yield on such
moneys (computed from the Completion Dam and taking into account any investment
of such moneys during the period from the Completion Date until such moneys were
deposited in such escrow account) greater than the yield on the Bonds from which
such proceeds were derived, all as such terms are used in and determined in
accordance with the Code and regulations promulgated thereunder.
In the event the moneys in the Construction Fund available for payment
of the costs of the Project should not be sufficient to pay the costs thereof in
full, the Company agrees to pay directly, 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 costs 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 said costs of the Project pursuant to the
provisions of this Section it shall not be entitled to any reimbursement
therefor from the Issuer or from the Trustee or form the owners of any of the
Bonds, nor shall it be entitled to any diminution of the amounts payable under
Article IV hereof.
Section 3.7 OPERATION OF THE PROJECT. The Company will not, nor will it
allow any lessee or other user of the Project to, make any material change in
its use of the Project unless the Trustee and the Issuer receive an opinion of
Bond Counsel to the effect that such change will not impair the exclusion of
interest on the Bonds from the gross income of holders of the Bonds for federal
income tax purposes.
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The Company will operate the Project, or cause any lessee or other user
of the Project to operate the Project, as an "industrial project" as
contemplated by the Act and in such a manner that it will not impair the
exclusion of interest on the Bonds from the gross income of the holders of the
Bonds for federal income tax purposes.
Upon a sale or law of all or any portion of the Company's interest in
the Project (to the extent permitted hereunder), the Company will obtain the
agreement of the purchaser or lessee of the Project or any interest therein to
comply with the provisions of this Section 3.7, regardless of whether such
purchaser or lessee assures the obligations of the Company under this Agreement
generally.
Section 3.8. INVESTMENT OF FUNDS. Except for amounts on deposit in the
Rebate Fund, any moneys held in the Bond Fund or the Construction Fund or any
other fund created under the Indenture shall be invested or reinvested by the
Trustee as set forth in Article X of the Indenture, to the extent permitted by
law, in the Permitted Investments (as defined in the Indenture), at the
telephonic or oral direction (confirmed in writing) of the Company
Representative. All such investments shall at all times be a part of the fund
(the Construction Fund, the Bond Fund or such other fund created under the
Indenture, as the case may be) from where the moneys used to acquire such
investments shall have come, and all income and profits on such investments
shall be credited to, and losses thereon shall be charged against, such fund.
Section 3.9. SPECIAL ARBITRAGE CERTIFICATIONS. The Company covenants
with the Issuer, the Trustee and the Owners from time to time of the Bonds that
so long as any Bond remains 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 Section 148 of the Code and any lawful regulations promulgated or
proposed thereunder. The Issuer and the Company each covenant and agree on their
own behalf that they shall not take any action, cause any action to be taken,
omit to take any action or cause any omission to occur which would cause the
interest on the Bonds to become includible in the gross income of the Owners
thereof for federal income tax purposes.
Section 3.10. DEPOSITORIES OF MONEYS AND SECURITY FOR DEPOSIT. All
moneys received by the Issuer in connection with the issuance of the Bonds
(other than for its fees and expenses) shall be deposited in accordance with the
Indenture in the Construction Fund created under the Indenture. All such moneys
deposited shall be applied in accordance with the terms and for the purposes
herein set forth and shall not be subject to lien or attachment by any creditor
of the Issuer.
The Issuer and the Company agree for the benefit of each other and for
the benefit of the Trustee and the Owners of the Bonds that the Net Proceeds of
the sale of me Bonds will not be used in any manner which would affect the
exclusion from gross income for federal income tax purposes of the interest on
the Bonds.
[End of Article III]
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ARTICLE IV
PROVISIONS FOR PAYMENT
Section 4.1. TITLE TO THE PROJECT. The Issuer acknowledges that (i) the
Issuer will not be vested with any interest in the Project as a result of its
authorization, sale, or issuance of the Bonds to finance the cost of the
acquisition, construction and equipping thereof, and (ii) that the only security
for the Bonds will be the Credit Facility or the Confirmation Letter, if
applicable, the moneys deposited in the funds and accounts (other than the
Rebate Fund) created under the Indenture and the other property and rights
constituting the Trust Estate.
Section 4.2. PAYMENT OBLIGATIONS OF THE COMPANY.
(a) As consideration for the issuance of the Bonds and the
lending of the Bond proceeds to the Company by the Issuer in accordance
with tile provisions of this Loan Agreement, the Company agrees to
execute and deliver the Note to the Issuer. In addition, the Company
agrees to (i) except as provided in subsection (b) of this Section,
make prompt payment to the Trustee, as assignee and pledgee of the
Issuer, for deposit in the Bond Fund, of all payments on the Note as
and when the same shall be due and payable, and (ii) pay pursuant
hereto and the Note sums sufficient to pay the principal and purchase
price of, premium, if any, and interest on the Bonds (whether at
maturity, upon redemption or acceleration, upon any Purchase Date or
otherwise) when and as the same shall be due and payable. All such
payments shall be made to the Trustee at its Principal Office in lawful
money of the United States of America, except as may be otherwise
agreed to by the Trustee.
(b) In order to provide for the payments required in
subsection (a) of this Section, the Company shall cause the Credit
Provider to deliver the Credit Facility and the Confirming Bank to
deliver the Confirmation Letter to the Trustee simultaneously with the
original issuance and delivery of the Bonds, and hereby authorizes and
directs the Trustee to draw moneys under the Credit Facility and the
Confirmation Letter in accordance with the provisions of the Indenture
to the extent necessary to make any payments of principal and purchase
price of, and interest on the Bonds as and when the same become due.
The Company shall receive as a credit against its obligations to make
the payments described in subsection (a) of this Section all payments
made by the Credit Provider under the Credit Facility and the
Confirmation Letter and all other amounts described in Section 3.02 or
6.06 of the Indenture.
(c) If to Company should fail to make any of the payments
required in subsection (a) and (b) above, the item or installment which
the Company has failed to make shall continue as an obligation of the
Company until the same shall have been fully paid, and the Company
agrees to pay the same with interest thereon at the rate per annum
borne by the Bonds until paid in full.
(d) In addition, the "Company agrees to pay the costs of
issuing the Bonds which are not paid with the proceeds from the sale of
the Bonds.
(e) Anything herein, in the Indenture or in the Bonds to the
contrary notwithstanding, the obligations of 9 the Company hereunder
shall be subject to the limitation that payments
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constituting interest under this Section shall not be required to the
extent that the receipt of such payment by the Owner of any Bond would
be contrary to the provisions of law applicable to such Owner which
limit the maximum rate of interest which may be charged or collected by
such Owner.
Section 4.3. CREDIT FACILITY ALTERNATE CREDIT FACILITY CONFIRMATION
LETTER; SUBSTITUTE CONFIRMATION LETTER.
(a) The Credit Facility delivered to the Trustee
simultaneously with the original issuance and delivery of the Bonds
constitutes an irrevocable obligation of the Credit Provider to pay to
the Trustee, upon request and in accordance with the terms thereof, up
to an amount equal to the principal amount of Bonds Outstanding plus
(i) if the Bonds initially bear interest at a Variable Rate, during any
Variable Raw Period, 50 days' interest on the Bonds, computed at a rate
per annum equal to the Maximum Rate and on the basis of the actual
number of days elapsed during a 365 day or 366 day year, as
appropriate, or (ii) if the Bonds initially bear interest at a Term
Rate, during any Term Rate Period, 204 days' interest on the Bonds (or,
if the Term Rate Period to be established will consist of fewer than 6
months, the number of days' interest on the Bonds obtained by adding 20
days to the number of days in such Term Rate Period) computed at a rate
per annum equal to the Maximum Rate and on the basis of a 360 day year
of twelve 30 day months.
(b) The Company shall have the option from time to time to
provide the Trustee with an Alternate Credit Facility in accordance
with the provisions of Section 6.13 of the Indenture. If at any time
there shall have been delivered to the Trustee an Alternate Credit
Facility, together with the other documents and opinions required by
Section 6.13 of the Indenture, then the Trustee shall accept such
Alternate Credit Facility and promptly surrender the previously held
Credit Facility to the issuer thereof for cancellation, in accordance
with the terms of such Credit Facility. Notwithstanding anything to the
contrary contained herein, the Company shall at all times cause a
Credit Facility to be in effect with respect to any Bonds bearing
interest at (i) a Variable Rate and (ii) a Term Rate provided the
applicable Term Rate Period ends prior to the final stated maturity
date of the Bonds. A Credit Facility need not be in effect at all times
with respect to Term Rate Bonds provided the applicable Term Rate
Period ends on the final stated maturity date of the Bonds. If at any
time there shall cease to be any Bonds Outstanding under the Indenture,
the Trustee shall promptly surrender the Credit Facility, if any, to
the Credit Provider, in accordance with the terms of such Credit
Facility, for cancellation. The Trustee shall comply with the
procedures set forth in the Credit Facility relating to the termination
thereof.
(c) The Confirmation Letter delivered to the Trustee
simultaneously with the original issuance and delivery of the Bonds
constitutes an irrevocable obligation of the Confirming Bank to pay to
the Trustee, upon request and in accordance with the terms thereof, up
to an amount equal to the principal amount of Bonds Outstanding plus
(i) if the Bonds initially bear interest at a Variable Rate during any
Variable Rate Period, 50 days' interest on the Bonds, computed at a
rate per annum equal to the Maximum Rate and on the basis of the actual
number of days elapsed during a 365 day or 366 day year, as
appropriate, or (ii) if the Bonds initially bear interest at a Term
Rate, during any Term Rate Period, 204 days' interest on the Bonds (or,
if the Term Rate Period to be established will consist of fewer than 6
months, the number of days' interest on the Bonds obtained by adding 20
days to the number of days in such Term Rate Period) computed at a rate
per annum equal to the Maximum Rate and on the basis of a 360 day year
of twelve 30 day months.
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(d) The Company shall have the option from time to time to
provide the Trustee with a Substitute Confirmation :Letter in
accordance with the provisions of Section 6.13 of the Indenture. If at
any time there shall have been delivered to the Trustee a Substitute
Confirmation Letter, together with the other documents and opinions
required by Section 6.13 of the Indenture, then the Trustee shall
accept such Substitute Confirmation Letter and promptly surrender the
previously held Confirmation Letter to the issuer thereof for
cancellation, in accordance with the terms of such Confirmation Letter.
If at any time there shall cease to be any Bonds outstanding under the
Indenture, the Trustee shall promptly surrender the Confirmation Letter
to the Confirming Bank, it accordance, with the terms of such
Confirmation Letter, for cancellation. The Trustee shall comply with
the procedures set forth in the Confirmation Letter relating to the
termination thereof.
Section 4.4 ADMINISTRATIVE EXPENSES. The Company shall pay, or cause to
be paid, an amount equal to (i) the fees and charges of the Trustee incurred in
connection with the rendering of its ordinary and extraordinary services as
Trustee under the Indenture, as and when the same become due, including die
reasonable fees of in Counsel, (ii) the fees and charges of the Paying Agent for
acting as Paying Agent for the Bonds, including the fees and expenses of its
Counsel, (iii) the fees and expenses of the Placement Agent for serving as
Placement Agent for the Bonds, including the fees and expenses of its Counsel,
and any other amounts due and payable to the Placement Agent under the Placement
and Remarketing Agreement, (iv) the fees and expenses of the Remarketing Agent
for serving as Remarketing Agent for the Bonds, including the fees and expenses
of its Counsel, and any other amounts due and payable to the Remarketing Agent
under the Placement and Remarketing Agreement, (v) the fees and expenses of the
Rating Agency for issuing and maintaining its securities rating on the Bonds and
(vi) the out-of-pocket expenses, administrative expenses and Counsel fees of the
Issuer. The Company may, without constituting grounds for an Event of Default
hereunder, withhold payment of any such fees and charges of the Trustee or the
Paying Agent, to contest in good faith the necessity for any extraordinary
services of the Trustee and the reasonableness of any extraordinary expenses of
the Trustee, or to contest in good faith the necessity for any services
performed and expenses paid or incurred by, and the: reasonableness of any fees,
charges or expenses of, the Paying Agent. If the Company should fail to make any
of the payments required in this Section, the item or installment which the
Company has failed to make shall continue as an obligation of the Company until
the same shall have been fully paid, with interest thereon at the rate per annum
borne by the Bonds until paid in full.
Section 4.5 OBLIGATIONS IF THE COMPANY ABSOLUTE AND UNCONDITIONAL.
Subject to the provisions of Section 6.5 hereof the obligations of the Company
to make or to cause (pursuant to the Credit Facility) to be made the payments
required in Sections 4.2 and 4.4 and to perform and observe the other agreement
on its part contained herein shall be absolute and unconditional and shall not
be subject to diminution by set-off, counterclaim, abatement or otherwise by
reason of any action or inaction of the Trustee, the Issuer or any third party.
Until such time as the principal of, and the interest on, the Bonds shall have
been paid in full, the Company (a) will not suspend or discontinue any payments
provided for in Sections 4.2 and 4.4 except to the extent the same have been
prepaid, (b) will perform and observe all its other agreements contained herein,
and (c) except as provided in Article VII hereof, will not terminate this Loan
Agreement for any cause, including, without limiting the generality of the
foregoing, any acts or circumstances that may constitute failure of
consideration, sale, loss, eviction or constructive eviction, destruction of or
damage to the Project, condemnation, commercial frustration of purpose, any
change in the tax or other laws of the United States of America or of the State
or any political subdivision of either, or any failure of the Issuer to perform
and observe any agreement, whether express or implied, or any duty, liability or
obligation arising out of or in connection herewith or with the Indenture.
Notwithstanding the foregoing, the obligation of the Company to make payments
hereunder shall be satisfied and discharged to the extent moneys are received by
the Trustee pursuant to the Credit Facility or the Confirmation Letter, if
applicable, remarketing proceeds (with respect to the Purchase Price) or other
available sources under the
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Indenture. Nothing contained in this Section shall be construed to release the
Issuer from the performance of any of the agreements on its part herein
contained; and if the Issuer should fail to perform any such agreement, the
Company may institute such action against the Issuer as the Company may deem
necessary to compel performance so long as such action shall not impair the
agreements on the part of the Company hereunder.
Nothing contained herein shall be construed as a waiver of any rights
which the Company may have against the Issuer under this Loan Agreement, or
against any person under this Loan Agreement, the Indenture or otherwise, or
under any provision of law; provided, however, that the Company shall pursue any
rights or remedies against the Issuer, the Trustee, any Owner or any third party
in connection herewith, or in connection with the Indenture, the Company
Documents or otherwise relating to the Bonds and security therefor only in a
separate action, and not b- way of any set-off, counterclaim, cross-claim or
third parry action in any suit brought to enforce the rights of the Owners, the
Trustee or the Issuer under this Loan Agreement, the Indenture, the Company
Documents or otherwise in connection herewith; and provided further, that in
order to preserve the right of the Company to raise such issues in any separate
suit, any claim of the Company which, but for this Section 4.5, would be a
compulsory counterclaim, shall be identified as such in the first responsive
pleading filed by the Company to any action brought by the Issuer, Trustee, any
Owner or any person.
Section 4.6. COMPANY CONSENT TO ASSIGNMENT OF WAN AGREEMENT AND
EXECUTION OF INDENTURE. The Company understands that the Issuer will, pursuant
to the Indenture and as security for the payment of the principal of, premium,
if any, and the interest on the Bonds, assign and pledge to the Trustee, and
create a security interest in favor of the Trustee in certain of its rights,
title and interest in and to this Loan Agreement (including all Pledged
Revenues) reserving, however, the Unassigned Rights; and the Company hereby
agrees and consents to such assignment and pledge. The Company acknowledges that
it has received a copy of the Indenture and consents to the execution of the
same by the Issuer; provided, however, such consent does not constitute a
representation as to the accuracy of any representations or warranties made
thereunder.
Section 4.7. COMPANY'S PER PERFORMANCE UNDER INDENTURE. The Company
agrees, for the benefit of the Owners, to do and perform all acts and things
contemplated in the Indenture to be done or performed by it.
[End of Article IV]
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ARTICLE V
PARTICULAR AGREEMENTS
Section 5.1. MAINTENANCE, OPERATION AND INSURING OF PROJECTS TAXES; NO
OPERATION OF PROJECT BY ISSUER. The Company hereby agrees that it will at its
own expense maintain and operate all portions of the Project during their useful
lives or until they are replaced with facilities necessary to the operation of
the Project. This Loan Agreement does not prevent the Company from merging or
consolidating with another entity as permitted by Section 5.3. The Company
further agrees that, except for taxes contested in good faith, it will pay all
taxes levied with respect to the Project and the income therefrom and that it
will at its own expense keep the Project properly insured against loss or damage
from such perils usually insured against by businesses operating -or owning like
properties and maintain public liability insurance and all such worker's
compensation or other similar insurance as may be required by law. Evidence of
such insurance will be furnished to the Trustee, the Issuer and the Credit
Provider upon request. Nothing contained in this Loan Agreement shall be deemed
to authorize or require the Issuer to operate the Project or to conduct any
business enterprise in connection therewith.
Section 5.2. ISSUER'S, TRUSTEE'S AND PAYING AGENT'S EXPENSES, RELEASE
AND INDEMNIFICATION PROVISIONS. The Company agrees, whether or not the
transactions contemplated by the Company Documents and the Indenture shall be
consummated, to indemnify and hold harmless the Issuer and its officers,
trustees, officials, employees and agents, including the Trustee, the Paying
Agent and Counsel to the Issuer (any and all of the foregoing being hereinafter
referred to as the "Indemnified Persons"), from and against any and all claims,
actions, suits, proceedings, expenses, judgments, damages, penalties, firtes,
assessments, liabilities, charges or other costs (including, without limitation,
all attorneys' fees and expenses incurred in connection with enforcing this Loan
Agreement or collecting any sums due hereunder and any claim or proceeding or
any investigation in connection therewith) relating to, resulting from or in
connection with (a) any cause whatsoever in connection with the Project,
including, without limitation, the acquisition, design, construction,
installation, equipping, operation, maintenance or use thereof or the financing
thereof including any expenses arising from the failure to make payment of
principal and interest on the Bonds; (b) any act or omission of the Company or
any of its agents, contractors, servants, employees or licensees, in connection
with the Project; (c) the issuance and sale of the Bonds; and (d) a
misrepresentation or breach of warranty by the Company hereunder or under any of
the Company Documents, or any violation by the Company of any of its covenants
hereunder or under any of the other Company Documents. In addition, the Trustee
shall be indemnified for (i) any actions taken or omitted by the Trustee in
accordance with the terms of this Loan Agreement, the Bonds, the Placement and
Remarketing Agreement, the Credit Facility, the Note, the Tax Regulatory
Agreement or the Indenture and (ii) any actions taken at the request of or with
the consent of the Company. The foregoing indemnities are effective only with
respect to any loss incurred by the Indemnified Persons not due to willful
misconduct, gross negligence, or bad faith on the part of such Indemnified
Persons. In case any action or proceeding shall be brought against one or more
of the Indemnified Persons and in respect of which indemnity may be sought as
provided herein, such Indemnified Person or Indemnified Persons shall promptly
notify the Company in writing and the Company shall promptly assume the defense
thereof, including the employment of counsel reasonably satisfactory to such
Indemnified Person or Indemnified Persons, payment of all expenses and the right
to negotiate and consent to settlement; but the failure to notify the Company as
provided herein shall not relieve the Company from any liability that it may
have (i) under this Section, so long as the Company is given the reasonable
opportunity to defend such claim, and (ii) otherwise than under this Section.
Any one or more of the Indemnified Persons shall have the right to employ
separate counsel in any such action and to participate in the defense thereof,
but the reasonable fees and expenses of such counsel shall be at the expense of
such Indemnified Persons or Indemnified
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persons unless (1) the employment of such counsel has been specifically
authorized in writing by the Company, (2) the named parties to any such action
(including any impleaded parties) include both the Company and such Indemnified
Person or Indemnified Persons and representation of both the Company and such
Indemnified Person or Indemnified Persons by the same counsel would be
inappropriate due to actual or potential differing interests between them, or
(3) the Indemnified Person or Indemnified Persons have been advised that one or
more legal defenses may be available to any or all of them which may not be
available to the Company in which case the Company shall not be entitled to
assume the defense of such suit notwithstanding its obligation to bear the fees
and expenses of such counsel. The Company shall not be liable for any settlement
of any such action effected Without its consent, but if settled with such
consent or if there: is a final judgment in any such action with or without
consent, the Company agrees a) indemnify and hold harmless the Indemnified
Person or Indemnified Persons from and against any loss by reason of such
settlement or judgment.
The provisions of this Section shall survive the termination of this
Loan Agreement.
Section 5.3 MAINTENANCE OF EXISTENCE. The Company agrees that so long
as any Bonds remain outstanding it shall maintain its existence as a corporation
organized under the laws of the State of California and shall not merge or
consolidate with any other entity and shall not transfer or convey all or
substantially all of its property, assets and licenses; provided, however, the
Company may, without violating any provision hereof, consolidate with or merge
into another domestic entity (i.e., an entity existing under the laws of one of
the states of the United States of America or the District of Columbia) or
permit one or more other domestic entities to consolidate with or merge into it,
or transfer all or substantially all of its assets to another domestic entity,
but only on the condition that:
(a) the assignee entity or the entity resulting from or
surviving such merger (if other than the Company) or consolidation or
the entity to which such transfer is made expressly assumes in writing
and agrees to perform all of the Company's obligations hereunder and
under the other Company Documents;
(b) in connection with any such consolidation, merger or
transfer, the Credit Provider shall expressly ratify and affirm that
the Credit Facility remains in full force and effect;
(c) the surviving entity shall preserve and keep in full force
and effect all licenses and permits necessary to the proper conduct of
its business; and
(d) the Company obtains and delivers to the Issuer, the
Trustee, and the Credit Provider an opinion of Bond Counsel to the
effect that the proposed transaction will not adversely affect the
exclusion from gross income of interest on the Bonds of the Owners
thereof for federal income tax purposes
Section 5.4. AGREEMENT OF ISSUER NOT TO ASSIGN OR PLEDGE. Except for
the assignment and pledge of the Trust Estate in the Indenture, the Issuer
agrees that it will not attempt to further assign, pledge, transfer or convey
its interest in or create any assignment, pledge, lien, charge or encumbrance of
any form or nature with respect to any of the property, moneys, securities and
rights granted by the Issuer to the Trustee under the Granting Clauses of the
Indenture.
Section 5.5. REDEMPTION OF BONDS. The Issuer or the Trustee, at the
request at any time of the Company and if the same are then redeemable, shall
forthwith take all steps that may be necessary under the applicable redemption
provisions of the Indenture to effect redemption of all or any portion of the
Bonds, as may be specified by the Company, on the earliest redemption date on
which such redemption may be made under such applicable provisions or upon the
date set for the redemption by the Company
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pursuant to Article VII hereof. As long as no Event of Default on behalf of the
Company exists hereunder and the Issuer is not obligated to call Bonds pursuant
to the terms of the Indenture, neither the Issuer nor the Trustee shall redeem
any Bond prior to its stated maturity unless requested to do so in writing by
the Company.
Section 5.6. REFERENCE IS BONDS INEFFECTIVE BONDS PAID. Upon Payment in
Full of the Bonds and all fees and charges of the Issuer, the Trustee and the
Paying Agent, all references herein to the Bonds, the Paying Agent and the
Trustee shall be ineffective and neither the Issuer, the Paying Agent, the
Trustee nor the Owners of any of the Bonds shall thereafter have any rights
hereunder and the Company shall have no further obligation hereunder, saving and
excepting those that shall have theretofore vested and any right of any
Indemnified Person (as defined in Section 5.2) to indemnification under Section
5.2, which right shall survive the payment of the Bonds and the termination of
this Loan Agreement. Reference is hereby made to Article XI of the Indenture
which sets forth the conditions upon the existence or occurrence of which
Payment in Full of the Bonds shall be deemed to have been made.
Section 5.7. ASSIGNMENT, SALE OR LEASE OF PROJECT. The Company may
assign its interest in this loan Agreement and may sell, lease or otherwise
dispose of the Project, in whole or in part, provided that (i) the purchaser,
lessee or transferee in such transaction shall be bound by the terms and
provisions of this Loan Agreement, (ii) such transaction shall not affect the
liability of the Credit Provider under the Credit Facility then in effect, and
(iii) an opinion of Bond Counsel is provided to the Issuer, the Trustee, and the
Credit Provider (if the Credit Facility is then in effect) to the effect that
such transaction will not adversely affect the exclusion of the interest on the
Bonds from gross income of the Owners thereof for federal income tax purposes.
Notwithstanding the foregoing, the Company will remain primarily liable for its
obligations hereunder until provision has been made for Payment in Full of the
Bonds.
Section 5.8. NON-ARBITRAGE COVENANT. The Company hereby covenants and
agrees with the Issuer and the Trustee for the benefit of the Owners of any
Bonds, present and future, that it will not make, or permit, any use of the
proceeds of the Bonds which will cause the Bonds to be "arbitrage bonds" within
the meaning of Section 148 of the Code. Toward that end, the Company and the
Issuer covenant for the benefit of the holders of the Bonds to comply with the
provisions of the Tax Regulatory Agreement. The covenants contained in this
Section are in addition to, and not in limitation of, the covenants contained in
Sections 2.4 and 3.9 hereof.
Section 5.9. FINANCING STATEMENTS. The Company hereby covenants and
agrees with the Issuer and the Trustee that it shall furnish to the Credit
Provider (if the Credit Facility is then in effect) and the Trustee,
quinquennially on or before the 1st day of April of each fifth year (commencing
April 1, 2001), an Opinion of Counsel in a form acceptable to the Credit
Provider, to the effect that all financing or continuation statements have been
filed, and all other action has been taken, to perfect and validate continuously
from the date hereof the security interests granted by the Indenture. The cost
of preparing and filing all such financing statements and continuation
statements shall be paid by the Company.
Section 5.10. COMPLIANCE WITH REIMBURSEMENT AGREEMENT. The Company
hereby covenants and agrees that it will comply with all covenants and
obligations applicable to it in the Reimbursement Agreement from time to time in
effect or, if the Reimbursement Agreement is terminated prior to the termination
of this Loan Agreement, the Company agrees to comply with all covenants and
obligations applicable to it in the Reimbursement Agreement as in effect
immediately prior to the termination thereof until the termination of this Loan
Agreement and the payment of the Company's obligation hereunder.
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Section 5.11. INSPECTION OF PROJECT. The Issuer, the Trustee and their
duly authorized agents shall have the right at all reasonable times to enter
upon any part of the premises of the Company at which the project is located and
examine and inspect the same as may be reasonably necessary for the purpose of
determining whether the Company is in compliance with its obligations under
Section 5.1, and the Issuer, the Trustee and their duly authorized agents shall
also have the right at all reasonable times to examine the books and records of
the Company insofar as such books and records relate to the acquisition,
construction, installation and maintenance of the Project.
Section 5.12. PROJECT LIST. The Company shall maintain at the Project
site a list setting forth in reasonable detail all items constituting the
Project, and, to the extent applicable, all plans and specifications relating to
the Project.
Section 5.13. NO WARRANTY OF CONDITION OR SUITABILITY BY ISSUSER. The
Company recognizes that the Issuer does not deal in goods of the kind comprising
components of the Project or otherwise hold itself out as having knowledge or
skill peculiar to the practices or goods involved in the Project, and that the
Issuer is not one to whom such knowledge or skill may be attributed by its
employment of an agent or broker or other intermediary who by his occupation
holds himself out as having such knowledge or skill. The Company further
recognizes that since the components of the Project have been designated and
selected by the Company, THE ISSUER HAS NOT MADE AN INSPECTION OF THE PROJECT OR
OF ANY FIXTURE OR OTHER ITEM CONSTITUTING A PORTION THEREOF, AND, EXCEPT AS
OTHERWISE PROVIDED HEREIN, THE ISSUER MAKES NO WARRANTY OR REPRESENTATION,
EXPRESS OR IMPLIED OR OTHERWISE, WITH RESPECT TO THE SAME OR TO THE LOCATION,
USE, DESCRIPTION, DESIGN, MERCHANTABILITY, FITNESS FOR USE FOR ANY PARTICULAR
PURPOSE, CONDITION OR DURABILITY THEREOF, TO THE QUALITY OF THE MATERIAL OR
WORKMANSHIP THEREIN, IT BEING AGREED THAT ALL RISKS INCIDENT THERETO ARE TO BE
BORNE BY THE COMPANY. IN THE EVENT OF ANY DEFECT OR DEFICIENCY OF ANY NATURE IN
THE PROJECT OR ANY FIXTURE OR OTHER ITEM CONSTITUTING A PORTION THEREOF, WHETHER
PATENT OR LATENT, THE ISSUER SHALL HAVE NO RESPONSIBILITY OR LIABILITY WITH
RESPECT THERETO. THE PROVISIONS OF THIS SECTION HAVE BEEN NEGOTIATED AND ARE
INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY WARRANTIES OR
REPRESENTATIONS BY THE ISSUER, EXPRESS OR IMPLIED (TO THE EXTENT PERMITTED BY
APPLICABLE LAW), WITH RESPECT TO THE PROJECT OR ANY FIXTURE OR OTHER ITEM
CONSTITUTING A PORTION THEREOF, WHETHER ARISING PURSUANT TO THE U.C.C. OR
ANOTHER LAW NOW OR HEREAFTER IN EFFECT OR OTHERWISE.
[End of Article V]
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ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
Section 6.1. EVENTS OF DEFAULT DEFINED. The following shall be "Events
of Default" hereunder and the term "Event of Default" shall mean, whenever it is
used herein, any one or more of the following events:
(a) failure by the Company to make any payment required to be
made under the Note or Section 4.2(a) when the same becomes due and
payable.
(b) failure by the Company to comply with the provisions of
Section 7.2;
(c) failure by the Company to observe or perform any agreement
hereunder or on its for a period of thirty (30) days after written
notice, specifying such failure and requesting that it be remedied,
given to the Company and to the Credit Provider by the Issuer 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 cannot be corrected within the
applicable period, the Issuer and the Trustee will not unreasonably
withhold their consent to an extension of such time if it is possible
to correct such failure and corrective action is instituted by the
Company or the Credit Provider within the applicable period and
diligently pursued until the failure is corrected; or in the case of
any such default which can be cured with due diligence but not within
such thirty-day period, the Company's or Credit Provider's failure to
proceed promptly to cure such default and thereafter prosecute the
curing of such default with due diligence;
(d) any representation by or on behalf of the Company
contained in this Loan Agreement or in any instrument furnished in
compliance with or in reference to this Loan Agreement the Indenture or
the Reimbursement Agreement proves false or misleading in any material
respect as of the date of the making or furnishing thereof,
(e) an "Event of Default" occurs and is continuing under the
Indenture;
(f) an "Event of Default" occurs and is continuing under the
Reimbursement Agreement; provided, however, that the occurrence of an
event described in Section 6.1(d) shall not constitute an "Event of
Default" hereunder, without the prior written consent of the Credit
Provider.
Upon the occurrence of an Event of Default hereunder, the Trustee shall
promptly notify in writing the Issuer, the Paying Agent, the Remarketing Agent
and the Credit Provider of such occurrence.
The Company and the Issuer hereby authorize the Credit Provider to do
any and all things necessary to correct any Event of Default described in
subsection (c) above on behalf of the Company.
The foregoing provisions of subsection (c) of this Section are subject
to the following limitations: If by reason of force majeure, the Company is
unable in whole or in part to carry out the agreements on its part therein
referred to, the failure to perform such agreements due to such inability shall
not constitute an Event of Default nor shall it become an Event of Default upon
appropriate notification to the Company
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or the passage of the stated period of time. The term "force majeure" as used
herein shall mean, without limitation, the following: acts of God; strikes,
lockouts or other industrial disturbances; acts of public enemies; orders of any
kind of the government of the United States of America or of the State or any of
their departments, agencies, political subdivisions or officials, or any civil
or military authority; insurrections; riots; epidemics; landslides; lightning;
earthquakes; fires; hurricanes; tornadoes; storms; floods; washouts; droughts;
arrests; restraint of government and people; civil disturbances; explosions;
breakage or accident to machinery, transmission pipes or canals; partial or
entire failure of utilities; or any other cause or event not reasonably within
the control of the Company. The Company agrees, however, to remedy with all
reasonable dispatch the cause or causes preventing the Company from carrying out
its agreements; provided, that the settlement of strikes, lockouts and other
industrial disturbances shall be entirely within the discretion of the Company,
and the Company shall not be required to make settlement of strikes, lockouts
and other industrial disturbances by acceding to the demands of the opposing
party or parties when such course is, in the judgment of the Company,
unfavorable to the Company.
Section 6.2. REMEDIES. Whenever an Event of Default has occurred and is
continuing, the Trustee, as the assignee and pledgee of the Issuer under the
Indenture, may take any one or more of the following remedial steps:
(a) The Trustee may declare all payments of principal and
accrued interest required to be made under Section 4.2(a) and the Note
to be immediately due and payable, whereupon the same shall become
immediately due and payable. If the Trustee elects to exercise the
remedy afforded in this subsection (a) and accelerates all payments
required to be made under Section 4.2(a) and the Note, the Trustee must
accelerate the payment of the Bonds under Section 7.02 of the Indenture
and amount ten due and payable by the Company as accelerated payments
hereunder shall be the sum of (i) the aggregate principal amount of the
outstanding Bonds, (ii) all interest on the Bonds then due and to
become due to the date of payment of the principal of the Bonds, and
(iii) all other amounts due and payable to the Issuer, if any, to the
Owners or to the Trustee with respect to the payment of the Bonds,
including Counsel fees actually incurred; or
(b) Subject to the provisions of Section 6.5 hereof, the
Trustee may take whatever action at law or in equity may appear
necessary or desirable to collect any sums then due and thereafter to
become due hereunder or to enforce performance and the observance of
any agreement of the Company hereunder or under the Note; or
(c) The Trustee may exercise any remedies provided in the
Indenture.
Any amounts collected pursuant to any action taken under this Section
shall be paid into the Bond Fund and applied in accordance with be provisions of
me Indenture and after Payment in Full of the Bonds and the payment of any costs
occasioned by an Event of Default hereunder, any excess moneys in the Bond Fund
shall be returned to the Company.
The Company hereby authorizes the Trustee to draw moneys under the
Credit Facility in accordance with the Indenture upon a declaration of
acceleration of payment of the Bonds in an amount equal to (i) the aggregate
principal amount of all outstanding Bonds and (ii) all interest on the Bonds due
and to become due to the date of payment. The obligation of the Company to
accelerate payment of all payments required to be made by the Company pursuant
to Section 4.2 upon a declaration of acceleration of payment of the Bonds shall
be deemed satisfied and discharged by a corresponding drawing and payment under
the Credit Facility.
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Section 6.3. NO REMEDY EXCLUSIVE. Subject to the provisions of Section
6.5, no remedy herein conferred upon or reserved to the Trustee is intended to
be exclusive of any other remedy, but each and every such remedy shall be
cumulative and shall be in addition to every other remedy hereunder or now or
hereafter existing at law, in equity or by statute. No delay or omission to
exercise any right or power accruing upon the occurrence of any Event of Default
shall impair any such right or power or shall be construed to be a waiver
thereof, but any such right or power may be exercised from time to time and as
often as may be deemed expedient. The Trustee and the Owners of the Bonds,
subject to the provisions of the Indenture, shall be entitled to the benefit of
all agreements herein contained.
Section 6.4. AGREEMENT TO PAY COUNSEL FEES AND EXPENSES. If there
should occur a default or an event of default hereunder and the Trustee or the
Issuer should employ Counsel or incur other expenses for the collection of sums
due hereunder or the enforcement of performance or observance of any agreement
on the part of the Company herein contained, the Company agrees that it will on
demand therefor pay to the Trustee or the Issuer the reasonable fee of such
Counsel and such other reasonable expenses so incurred by the Trustee or the
Issuer.
If the Company should fail to make any payments required in this
Section, such item shall continue as an obligation of the company until the same
shall have been paid in full, with interest thereon from the date such payment
was due at the rate per annum borne by the Bonds until paid in full.
Section 6.5. WAIVER OF EVENTS AF DEFAULT AND RESCISSION OF
ACCELERATION. If, in compliance with the requirements of Section 7.09 of the
Indenture, the Trustee waives any event of default as therein defined with the
written consent of the Credit Provider (if such consent is required by the
Indenture) and its consequences or rescind any declaration of acceleration of
payments of the principal of, premium, if any, and interest on the Bonds, such
waiver shall also waive any event of default hereunder and its consequences and
such rescission of a declaration of acceleration of the principal of, premium,
if any, and interest on the Bonds shall also rescind any declaration of any
acceleration of all payments required to be made under Section 4.2. In case of
any such waiver or rescission, or in case any proceeding taken by the Trustee on
account of any such event of default shall have been discontinued or abandoned
or determined adversely, then and in every such case the Issuer, the Company,
the Trustee, the Credit Provider and the Owners of the Bonds shall be restored
to their former positions and rights hereunder, but no such waiver or rescission
shall extend to any subsequent or other event of default or impair any right
consequent thereon.
[End of Article VI]
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ARTICLE VII
PREPAYMENT UNDER LOAN AGREEMENT
Section 7.1. OPTION TO PREPAY IN FULL. Unless there has been a
determination which could result in a Determination of Taxability described in
Section 7.2, and subject to requirements under the Indenture for Available
Moneys in certain instances, the Company shall have the option to prepay in full
the Note and terminate this Loan Agreement prior to Payment in Full of the Bonds
by (a) paying to the Trustee an amount of cash or Federal Securities which,
together with existing investments in the Bond Fund, will provide the Bond Fund
with cash or Federal Securities, the principal of and interest on which will be
sufficient, in the opinion of the Trustee, (1) to redeem in accordance with the
relevant section of the Indenture all Bonds then outstanding and to pay all
amounts, if any, required by Section 4.01 of the Indenture on the date on which
the Bonds are to be redeemed, (2) to pay at maturity all Bonds maturing prior to
or simultaneously with such redemption, (3) to pay interest on all Bonds
outstanding prior to their redemption or payment at maturity, and (4) to pay the
reasonable fees and expenses of the Trustee and any other expenses for which the
Company may be responsible under this Loan Agreement, the Note or the Indenture,
and (b) by making arrangements satisfactory to the Trustee for giving the
required notice of redemption.
Section 7.2. MANDATORY PREPAYMENT. The Company shall be obligated to
prepay the Note in full (a) upon the occurrence of a Determination of Taxability
as defined in the Indenture, or (b) as otherwise provided in Section 3.01 of the
Indenture.
Section 7.3. OPTION TO PREPAY IN PART. The Company shall have the
option to prepay the Note in part, and the Issuer agrees that the Trustee may
accept such payments to be paid to the Trustee for deposit in the Bond Fund and
used for redemption or, at the election of the Company, purchase of Outstanding
Bonds in the manner and to the extent provided in the Indenture. The principal
amount of each Bond so purchased, delivered or credited shall be appropriately
credited by the Trustee against the obligation of the Company to make future
payments on the Note.
Section 7.4. RELATION OF OPTIONS TO INDENTURE. The options granted to
the Company in this Article shall be prior and superior to the Indenture and may
be exercised whether or not the Company is in default under this Loan Agreement,
provided that any such default will not result in the non-fulfillment of any
condition to the exercise of any such option.
Section 7.5 OBLIGATIONS AFTER PAYMENT OF NOTE AND TERMINATION OF LOAN
AGREEMENT. Anything contained herein to the contrary notwithstanding, the
obligations of the Company contained in Sections 4.2(c), 4.4, 5.2 and 6.4 shall
continue after payment of the Note and termination of this Loan Agreement.
[End of Article VII]
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ARTICLE VII
MISCELLANEOUS
Section 8.1. TERM OF LOAN AGREEMENT. Except as provided in Section 7.5,
this Loan Agreement shall terminate when Payment in Full of the Bonds shall have
been made.
Section 8.2. NOTICES. All notices, approvals, consents, requests and
other communications hereunder shall be in writing and shall be deemed to have
been given when delivered by hand or mailed by first class registered or
certified mail, return receipt requested, postage prepaid, and addressed as
follows or (unless specifically prohibited) when telexed or telecopied to the
telex or telecopy numbers as follows:
(a) If to the Issuer: Village of Gurnee, Illinois
▇▇▇ ▇▇▇▇▇ ▇'▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Village President
(b) If to the Company: SteriGenics International
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Facsimile Transmission Number: (▇▇▇) ▇▇▇-▇▇▇▇
(c) If to the Trustee: Bank One, Columbus, N.A.,
in care of Bank One Trust Company, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Department
Facsimile Transmission Number: (▇▇▇) ▇▇▇-▇▇▇▇
(d) If to the
Credit Provider: Comerica Bank-California
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile Transmission Number: (▇▇▇) ▇▇▇-▇▇▇▇
(e) If to the
Remarketing Agent: Wheat, First Securities, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Money Market Trading
Facsimile Transmission Number: (▇▇▇) ▇▇▇-▇▇▇▇
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(f) If to the
Paying Agent Bank One, Columbus, N.A.
in care of Bank One Trust Company, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Department
Facsimile Transmission Number: (▇▇▇) ▇▇▇-▇▇▇▇
A duplicate copy of each notice, approval, consent, request or other
communication given hereunder by the issuer, the Company, the Trustee, the
Remarketing Agent or the Credit Provider to any one of the others shall also be
given to all of the others. The Issuer, the Company, the Trustee, the Credit
Provider, the Remarketing Agent and the Paying Agent may, by notice given
hereunder, designate any further or different addresses to which subsequent
notices, approvals, consents, requests or other communications shall be sent or
persons to whose attention the same shall be directed.
Section 8.3. BINDING EFFECT. This Loan Agreement shall inure to the
benefit of and shall be binding upon the Issuer, the Company and their
respective successors and assigns.
Section 8.4. SEVERABILTY. If any provision hereof shall be held invalid
or unenforceable by any court of competent jurisdiction, such holding shall not
invalidate or render unenforceable any other provision hereof.
Section 8.5. AMOUNTS REMAINING IN BOND FUND. It is agreed by the
parties hereto that any amounts remaining in the Bond Fund and Construction Fund
upon expiration or sooner termination of this Loan Agreement, after Payment in
Full of the Bonds, payment of the fees, charges and expenses of the Trustee, the
Remarketing Agent, the Paying Agent and the Credit Provider (including, without
limitation, the fees and expenses of their respective Counsel), and payment of
all other amounts required to be paid under the Indenture and under the
Reimbursement Agreement, including payment of rebatable arbitrage, shall be paid
immediately to the Company by the Trustee.
Section 8.6. RELIANCE BY ISSUER. The Issuer shall have the right at all
times to act in reliance upon the authorization, representation or certification
of the Company Representative or the Trustee.
Section 8.7 ISSUER'S OBLIGATIONS LIMITED. Except as otherwise expressly
herein provided, no recourse under or upon any obligation or agreement contained
in this Loan Agreement or in any Bond or under any judgment obtained against the
Issuer, or by the enforcement of any assessment or by any legal or equitable
proceeding by virtue of any constitution or statute or otherwise or under any
circumstances, under or independent of the Indenture, shall be had against the
Issuer.
Anything in this Loan Agreement to the contrary notwithstanding, it is
expressly understood and agreed by the parties hereto that (a) the: Issuer may
rely conclusively on the truth and accuracy of any certificate, opinion, notice
or other instrument furnished to the Issuer by the Trustee or the Company as to
the existence of any fact or state of affairs required hereunder to be noticed
by the Issuer; (b) the Issuer shall not be under any obligation hereunder to
perform any record-keeping or to provide any legal services, it being understood
that such services shall be performed either by the Trustee or the Company; and
(c) none of the provisions of this Loan Agreement shall require the Issuer to
expend or risk its own funds or to otherwise incur financial liability in the
performance of any of its duties or in the exercise of any of its rights or
powers hereunder, unless it shall first have been adequately indemnified to its
satisfaction against the cost, expenses and liability which may be incurred
thereby.
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Notwithstanding anything herein contained to the contrary, any
obligation which the Issuer may incur under this Loan Agreement or under any
instrument executed in connection herewith which shall entail the expenditure of
money shall not be a general obligation of the Issuer but shall be a limited
obligation payable solely from the Pledged Revenues.
Section 8.8 IMMUNITY OF DIRECTORS, OFFICER AND EMPLOYEES OF ISSUER. No
recourse shall be had for the enforcement of any obligation, promise or
agreement of the Issuer contained in the Indenture, this Loan Agreement or in
any Bond issued under the Indenture for any claim based thereon or otherwise in
respect thereof, against any officer, trustee, employee or agent, as such, in
his individual capacity, past, present or future, of the Issuer, either directly
or through the Issuer, whether by virtue of any constitutional provision,
statute or rule of law, or by the enforcement of any assignment or penalty or
otherwise; it being expressly agreed and understood that the Bonds, the
Indenture and this Loan Agreement are solely corporate obligations, and that no
personal liability whatsoever shall attach to, or be incurred by, any officer,
trustee, employee or agent, as such, past, present or future, of the Issuer,
either directly or through the Issuer, under or by reason of any of the
obligations, promises or agreements entered into between the Issuer and the
Company whether contained in this Loan Agreement or to be implied therefrom as
being supplemental hereto or thereto, and that all personal liability of that
character against every such director, officer, employee or agent is, by the
execution of this Loan Agreement and the Indenture, and as a condition of, and
as part of the consideration for, the execution of this Loan Agreement and the
Indenture, expressly waived and released.
Section 8.9. PAYMENTS BY CREDIT PROVIDER, CONFIRMING BANK. The Credit
Provider and the Confirming Bank shall, to the extent of any payments made by it
or the Confirming Bank pursuant to the Credit Facility or the Confirmation
Letter, if applicable, be subrogated to all rights of the Issuer or its assigns
(including, without limitation, the Trustee) as to all obligations of the
Company with respect to which such payments shall be made by the Credit Provider
or the Confirming Bank, but, so long as any of the Bonds remain outstanding
under the terms of the Indenture, such right of subrogation on the part of the
Credit Provider shall be in all respects subordinate to all rights and claims of
the Issuer for all payments which are then due and payable under the Indenture
or otherwise arising under this Loan Agreement, the Indenture or the Bonds. The
Trustee will, upon request, execute and deliver any instrument reasonably
requested by the Credit Provider or the Confirming Bank, if applicable, to
evidence such subrogation and the Trustee shall assign to the Credit Provider or
the Confirming Bank, if applicable, its rights in any obligations of the Company
with respect to which payment of the entire principal balance and accrued
interest thereon shall be made by the Credit Provider or the Confirming Bank, if
applicable.
Section 8.10. AMENDMENTS, CHANGES AND MODIFICATIONS. Except as
otherwise provided herein or in the Indenture, subsequent to the date of
issuance and delivery of the Bonds and prior to their payment in full, this Loan
Agreement and the Note may not be effectively amended or terminated without the
written consent of the Company, the Trustee and the Credit Provider.
Section 8.11. COUNTERPARTS. This Loan Agreement may be executed in any
number of Counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same instrument.
Section 8.12. CAPTIONS. The captions and headings herein are for
convenience only and in no way define, limit or describe the scope or intent of
any provisions hereof.
Section 8.13. AMENDMENT OF LOAN AGREEMENT. This Loan Agreement may not
be effectively modified, altered, amended or supplemented without the prior
written consent of the Company, the Trustee and the Credit Provider and in
accordance with the provisions of the Indenture.
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Section 8.14. LAW GOVERNING CONSTRUCTION OF LOAN AGREEMENT. This Loan
Agreement shall be governed by, and construed and enforced in accordance with,
the laws of the State.
Section 8.15 NO THIRD PARTY BENEFICIARY. It is specifically agreed between the
parties executing this Loan Agreement that neither this Loan Agreement nor any
of the provisions hereof are intended to establish in favor of the public or any
member thereof, other than as expressly provided herein, including the
assignment of the Issuer's rights under this Loan Agreement to the Trustee
pursuant to the Indenture, the rights of a third party beneficiary hereunder, as
to authorize any one not a party to this Loan Agreement to maintain a suit for
personal injuries or property damage pursuant to the terms or provisions of this
Loan Agreement. The duties, obligations and responsibilities of the parties to
this Loan Agreement with respect to third parties shall remain as imposed by
law.
[End of Article VIII]
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IN WITNESS WHEREOF, the Issuer and the Company have caused this Loan
Agreement to be executed in their respective corporate names and their
respective corporate seals to be affixed hereto and attested by their authorized
officers, all as of the date first above written.
VILLAGE OF GURNEE, ILLINOIS
By: /s/
------------------------------
Village President
(SEAL)
Attest:
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Village Clerk
[SIGNATURE PAGES CONTINUED ON THE FOLLOWING PAGE.)
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[COUNTERPART SIGNATURE PAGE TO LOAN AGREEMENT]
STERIGENICS INTERNATIONAL
By /s/
----------------------------
Vice President
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EXHIBIT A
to
LOAN AGREEMENT
DESCRIPTION OF PROJECT
The Project consists of the acquisition of an approximately 11 acre
site at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, and the acquisition,
construction and equipping of an approximately 78,000 square foot facility
thereon and the acquisition and installation of machinery, equipment and other
personal property to be used in connection therewith, to be owned and operated
initially by the Company for the sterilization of health care, laboratory,
pharmaceutical and packaging products.
35
EXHIBIT B
to
LOAN AGREEMENT
PROMISSORY NOTE
STERIGENICS INTERNATIONAL
$7,750,000 April 19, 1996
SteriGenics International, a California corporation (the "Company"),
for value received, hereby promises to pay to the Village of Gurnee, Illinois
(the "Issuer"), or assigns, on April 1, 2016, the principal sum of Seven Million
Seven Hundred Fifty Thousand Dollars ($7,750,000), subject to prior payment,
with interest on the unpaid principal sum, from April 19, 1996, until said
principal sum shall be paid, and to the extent permitted by law, interest on
overdue installments of such interest, at the then interest rate provided in the
Bonds, as hereinafter defined. Interest shall be payable at the interest rates
payable on the Bonds, and the principal of, premium, if any, and interest on
this Note shall be payable at the times as set forth in more detail in the Loan
Agreement and the Indenture (as such terms are defined below).
Payments shall be made in lawful money of the United States of America
in immediately available funds on the date payment is due, at the principal
corporate trust office of Bank One, Columbus, N.A., as Paying Agent (the "Paying
Agent"), in Columbus, Ohio, or at such other place as the Trustee may direct in
writing.
Anything herein to the contrary notwithstanding, any amount held by
Bank One, Columbus, N.A., as trustee (the "Trustee"), in the Bond Fund referred
to in the Indenture, which is available to be used to pay the principal of,
premium, if any or interest on the Bonds, shall, at the request of the Company,
be credited against the next succeeding payment hereunder and shall reduce the
payment to be made by the Company, provided that at any time during which a
Credit Facility, as defined in the Indenture, is in effect, such amounts shall
be in Available Moneys, as defined in the Indenture, before such credit shall be
made. If the amount held by the Trustee in the Bond Fund should be sufficient to
pay at the times required the principal of, premium, if any, and interest on the
Bonds then remaining unpaid and to pay all fees and expenses of the Trustee, the
Issuer and the Paying Agent accrued and to accrue through final payment of the
Bonds (provided that at any time during which a Credit Facility is in effect
such amounts constitute Available Moneys), then the Company shall not be
obligated to make any further payments hereunder, except to the extent losses
may be incurred in connection with investment of moneys in the Bond Fund.
The Issuer, by the execution of the Indenture, as hereinafter defined,
and the assignment form attached to this Note, is assigning this Note and the
payments thereon to the Trustee acting pursuant to the Indenture of Trust dated
as of April 1996 (the "Indenture"), between the Issuer and the Trustee as
security for the Issuer's $7,750,000 in aggregate principal amount of the
Village of Gurnee, Illinois Industrial Development Revenue Bonds (SteriGenics
International Project), Series 1996 (the "Bonds"), as issued pursuant to the
Indenture. Payments of principal of, premium, if any, and interest on this Note
shall
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be made directly to the Trustee for the account of the Issuer pursuant to such
assignment and applied only to the principal of, premium, if any, and interest
on the Bonds. All obligations of the Company hereunder shall terminate when all
sums due and to become due pursuant to the Indenture, this Note, the Loan
Agreement, as hereinafter defined, and the Bonds have been paid.
In addition to the payments of principal, premium, if any, and interest
specified in the first paragraph hereof, the Company shall also pay such
additional amounts, if any, which, together with other moneys available therefor
pursuant to the Indenture, may be necessary to provide for payment when due
(whether at maturity, by acceleration or call for redemption, mandatory
purchase, purchase upon optional tenders, sinking fund redemption or otherwise)
of principal and purchase price of, premium, if any, and interest on the Bonds.
The Company shall have the option or may be required to prepay this
Note in whole or in part upon we terms and conditions and in the manner
specified in the Loan Agreement, dated as of April 1, 1996 (the "Loan
Agreement"), between the Issuer and the Company.
This Note is issued pursuant to the Loan Agreement in satisfaction of
the Company's payment obligation in Section 4.2(a) thereof and is entitled to
the benefits and subject to the conditions thereof, including the provisions of
Section 4.5 thereof that the Company's obligations thereunder and hereunder
shall be unconditional as provided in such Section 4.5. All the terms,
conditions and provisions of the Loan Agreement and the applicable provisions of
the Bonds and the Indenture are, by this reference thereto, incorporated herein
as a part of this Note, including, without limitation, the provisions of Section
8 of the loan Agreement entitled "Immunity of Directors, Officers and Employees
of Issuer."
In case an Event of Default, as defined in the Loan Agreement, shall
occur, the principal of, premium, if any, and interest on this Note may be
declared immediately due and payable as provided in the Loan Agreement. This
Note shall be governed by, and construed in accordance with, the laws of the
State of Illinois.
[SIGNATURE PAGE CONTINUED ON THE FOLLOWING PAGE]
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IN WITNESS WHEREOF the Company has caused this Note to be executed in
its corporate name by its duly authorized officer, all as of the date first
above written.
STERIGENCIS INTERNATIONAL
By: ____________________
Vice President
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ASSIGNMENT
The Village of Gurnee, Illinois (die "Issuer"), hereby irrevocably
assigns, without recourse, the foregoing Note to Bank One, Columbus, N.A., as
trustee (the "Trustee"), under the Indenture of Trust, dated as of April 1, 1996
(the "Indenture"), between the Issuer and the Trustee and hereby directs
SteriGenics International, a California corporation, as the maker of the Note to
make all payments of principal of, premium, if any, and interest thereon
directly to the Trustee at its principal corporate trust office in Columbus,
Ohio, or at such other place as the Trustee may direct in writing. Such
assignment is made as security for the payment of $7,750,000 in aggregate
principal amount of the issuer's Industrial Development Revenue Bonds
(SteriGenics International Project), Series 1996, issued pursuant to the
Indenture.
VILLAGE OF GURNEE, ILLINOIS
By:____________________
Village President
