INSTALLMENT SALE AGREEMENT
THIS INSTALLMENT SALE AGREEMENT dated as of May 15, 1992 (the
"Agreement," which term, unless the context clearly requires otherwise, as of
any particular time, shall include this document and all amendments and/or
supplements hereto made and at such time constituting a part hereof, and which
term sometimes is referred to in this document by use of such words as "hereto,"
"hereby," "herein," "hereof" and "hereunder"), by and among
PHILADELPHIA AUTHORITY FOR INDUSTRIAL DEVELOPMENT
(the "Authority"), a body politic and corporate organized and existing
under the laws of the Commonwealth of Pennsylvania and a public instrumentality
of such Commonwealth, having its principal office at 000 Xxxxx Xxxxx Xxxxxx,
00xx Xxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000 as Seller, and
REFRIGERATED ENTERPRISES, INC.
(the "Company"), a Pennsylvania corporation, having its principal place
of business at 000 Xxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx, as Buyer, and
Xxxx Hauling and Warehousing System, Inc. ("Xxxx"), a Pennsylvania
corporation, X.X. Xxxxxxxx & Co., Inc., a Pennsylvania corporation, Refrigerated
Distribution Center, Inc., a Pennsylvania corporation, Oregon Avenue
Enterprises, Incorporated, a Pennsylvania corporation, Xxxx Cargo Systems, Inc.,
a Delaware corporation, The Riverfront Development Corp., a New Jersey
corporation, CRT, Inc., a New Jersey corporation, Xxxxxx Xxxxx Ice, Inc., a
Pennsylvania corporation, Xxxxxxxx Avenue Warehousing Corp., a Pennsylvania
corporation, and 000 Xxxxxxxx Xxx., Inc., a Pennsylvania corporation, jointly
and severally (each a "Guarantor" and collectively the "Guarantors").
WHEREAS, the Authority is organized and existing under the Industrial
and Commercial Development Authority Law, as amended (the "Act"), of the
Commonwealth of Pennsylvania (the "Commonwealth") and is empowered by the Act,
among other things, to acquire, hold, construct, improve, maintain, own,
finance, lease, as lessor or lessee, and/or sell industrial, commercial and
specialized development projects to further the public purposes of the Act; and
WHEREAS, the Company has requested the Authority to undertake a project
(the "Project"), that consists of, among other things: (i) the current refunding
of the Authority's 1989 Bonds; and (ii) the sale of the Project Facilities to
the Company; and
WHEREAS, in order to provide funds for and toward the payment of a
portion of the costs of the Project, the Authority has authorized the issuance
and sale of 1992 Bonds; and
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WHEREAS, the 1992 Bonds are to be issued under and secured by the
Indenture; and
WHEREAS, to further secure the 1992 Bonds, the Company will cause to be
delivered to the Trustee, at the time of delivery of the 1992 Bonds, the
Guaranty.
NOW, THEREFORE, THIS INSTALLMENT SALE AGREEMENT WITNESSETH THAT each of
the parties hereto, intending to be bound legally hereby, for and in
consideration of payments herein stipulated to be made by the Company and of
covenants and agreements set forth herein, do hereby covenant and agree that the
terms and conditions upon which the Project Facilities (hereinafter defined) and
all additions, improvements, betterments, substitutions, replacements,
alterations and renovations thereto and thereof, all as more specifically set
forth herein, shall be sold by the Authority to the Company are as follows:
ARTICLE I
DEFINITIONS; INTERPRETATION; COVENANTS
SECTION 1.1 Definitions. Unless the context clearly requires otherwise,
capitalized terms and phrases used herein shall have the meanings set forth in
this Section 1.1 or elsewhere within this document, except that capitalized
terms and phrases not otherwise defined herein shall have the meanings given
thereto in the Indenture.
"Act" shall mean the Industrial and Commercial Development Authority Law
of the Commonwealth, the Act of August 23, 1967, Act Xx. 000, X.X. 000, 00 X.X.
xx.000 et seq., as amended and supplemented from time to time.
"Act of Bankruptcy" shall mean any of the following events:
(a) The Company or the Authority (or any other person or entity
obligated, as guarantor or otherwise, to make payments under the Agreement)
shall (i) apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee, liquidator or the like of
the Company or the Authority or such other person or entity, or of all or
any substantial part of the property of the Company or the Authority or
such other person or entity, (ii) admit in writing its inability to pay its
debts generally as they become due or (iii) make a general assignment for
the benefit of creditors or (iv) commence a voluntary case under the United
States Bankruptcy Code (as now or hereafter in effect) or (v) file a
petition or answer seeking to take advantage of any other law relating to
bankruptcy, insolvency, reorganization, winding-up or composition or
adjustment of debts; or
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(b) A proceeding or case shall be commenced, without the application,
approval or consent of the Company or the Authority (or any other person or
entity obligated, as guarantor or otherwise, to make payments under the
Agreement) in any court of competent jurisdiction, and shall not have been
withdrawn or dismissed seeking (i) the bankruptcy, liquidation,
reorganization, dissolution, winding-up, or composition or adjustment of
debts of the Company or the Authority or such other person or entity, (ii)
the appointment of a trustee, receiver, custodian, liquidator or the like
of the Company or the Authority or such other person or entity, or of all
or any substantial part of the property of the Company or the Authority or
such other person or entity or (iii) similar relief in respect of the
Company or such other person or entity under any law relating to
bankruptcy, insolvency, reorganization, winding-up or composition or
adjustment of debts.
"Additional Facilities" shall mean any improvements, replacements,
alterations, relocations, additions, enlargements, or expansions of or to any
part of the Project Facilities and any and all machinery, apparatus, equipment,
furnishings and fixtures therefor.
"Affiliate" means, with respect to any Person, any other Person under
the control of or in common control or ownership (direct or indirect) of or with
such Person and, with respect to Xxxx, any Person included in its combined
annual financial statements including, without limitation, the Company. For the
purposes of this definition and the definition of Related Party below,
"control" shall mean ownership or control (direct or indirect) of five percent
or more of the voting stock of the Person for which such determination is to be
made or the exercise of management control over the business and affairs of such
Person.
"Agreement" shall mean this Installment Sale Agreement.
"Authority" shall mean the Philadelphia Authority for Industrial
Development, a body politic and corporate organized and existing as set forth in
the preamble hereto and a party hereto.
"Bond" or "Bonds" shall mean the 1992 Bonds.
"Bond Documents" shall mean, as applicable, the Indenture, this
Agreement, the Guaranty, the Mortgage, the Guarantor Mortgage, the Bond Purchase
Agreement and any and all other documents executed and delivered in connection
with the issuance of the Bonds.
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"Bond Purchase Agreement" shall mean the bond purchase agreement dated
as of May 28, 1992 by and among the Authority, the Company, the Guarantors and
the Purchaser, relating to the issuance and sale of the 1992 Bonds, as the same
may be amended, modified or supplemented from time to time.
"Cash Flow" of a Person shall mean Net Income of such Person plus
depreciation and other non-cash charges to income plus (or minus) any increase
(or decrease) in deferred taxes.
"Capital Expenditure" shall have the meaning set forth at Section
144(a)(4)(B) of the Code.
"Closing Date" shall mean the date the Bonds are issued within the
meaning of the Code.
"Code" shall mean the federal Internal Revenue Code of 1986, as amended
and supplemented from time to time, or any successor statute, and, as
appropriate, regulations, temporary regulations and proposed regulations
promulgated and applicable thereunder, including regulations under the Internal
Revenue Code of 1954, as amended.
"Collateral" means all of the rights and assets of the Company, Xxxx or
any other Person in which the Authority or the Trustee is now or hereafter
granted a lien or security interest in order to secure the performance of the
Company's obligations under this Agreement or any of the Bond Documents, the
obligations of the Authority hereunder or under the Bonds or the obligations of
any Guarantor under the Guaranty.
"Combined Cash Flow," "Combined Interest Charges," "Combined Net Income"
and "Combined Net Income Before Interest and Taxes" for any period shall mean,
respectively, the Cash Flow, Interest Charges, Net Income and Net Income Before
Interest and Taxes of Xxxx and its Affiliates for such period, combined in
accordance with generally accepted accounting principles consistently applied.
"Combined Indebtedness" means (i) the Combined Total Assets less (ii)
the total combined stockholders' equity of Xxxx and its Affiliates plus deferred
taxes, each determined in accordance with generally accepted accounting
principles consistently applied, as such combination is effected in accordance
with generally accepted accounting principles consistently applied as at any
date on which the amount thereof shall be determined.
"Combined Tangible Net Worth" means (i) total combined shareholders'
equity of Xxxx and its Affiliates, determined in accordance with generally
accepted accounting principles consistently applied, as such combination is
effected in accordance with generally accepted accounting principles
consistently applied, less (ii) the aggregate net amount of the
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following items to the extent, if any, that they were included in
consolidated assets or deducted from consolidated liabilities in computing
shareholders' equity:
(a) All licenses, patents, copyrights, tradenames, trademarks,
franchises, good will, experimental or organizational expense, unamortized
debt discount and expense, treasury stock and all other assets which under
generally accepted accounting principles are deemed intangible; and
(b) Any write-up of assets (other than current assets written up in
accordance with generally accepted accounting principles consistently
applied) made after January 1, 1984.
"Combined Total Assets" means the assets of Xxxx and its Affiliates,
combined in accordance with generally accepted accounting principles
consistently applied.
"Commonwealth" shall mean the Commonwealth of Pennsylvania.
"Company" shall mean Refrigerated Enterprises, Inc., created and
existing as set forth in the preamble hereto, a party hereto, together with its
successors and permitted assigns.
"Control Group" shall mean all corporations that constitute a
"controlled group of corporations" within the meaning of Section 1563 of the
Code.
"Costs" shall mean any cost in respect of the Project Facilities
permitted under the Act and the Code.
"County" shall mean the County of Philadelphia, Pennsylvania.
"Cumulative Combined Net Income" for any specified periods means the sum
of Combined Net Income for each of such periods (subtracting Combined Net Income
for any period in which it is negative, as appropriate).
"Determination of Taxability" shall have the meaning given to that term
in the Indenture.
"ERISA" shall mean the Federal Employee Retirement Income Security Act
of 1974, as amended, and the rules and regulations thereunder.
"Event of Default" or "Events of Default" shall have the meaning given
thereto in Article VI hereof.
"Exemption Event" shall have the meaning ascribed to such term in the
Indenture.
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"Guarantor" means any or all of Xxxx Hauling and Warehousing System,
Inc., X.X. Xxxxxxxx & Co., Inc., Refrigerated Distribution Center, Inc., Oregon
Avenue Enterprises, Incorporated, Xxxx Cargo System, Inc., The Riverfront
Development Corp., CRT, Inc., Xxxxxx Xxxxx Ice, Inc., Xxxxxxxx Avenue
Warehousing Corp., 000 Xxxxxxxx Xxx., Inc., and any other Person required to be
a guarantor under the Guaranty.
"Guarantor Mortgage" means the Mortgage and Security Agreement dated as
of May 15, 1992 from Xxxx and 000 Xxxxxxxx Xxx., Inc. to the Trustee under which
Xxxx and 000 Xxxxxxxx Xxx., Inc. grant to the Trustee a mortgage lien on and a
security, interest in their respective interests in the Guarantor Project
Facilities to secure payment of the Company's obligations contained in Section
4.3 hereof and of the Guarantors' obligations contained in the Guaranty, and any
amendments and supplements thereto.
"Guarantor Project Facilities" means the Marine Terminal Complex,
consisting of land and improvements existing or to be constructed thereon, and
all fixtures and other personalty affixed thereto, which is or will be owned by
Xxxx or 000 Xxxxxxxx Xxx., Inc. and located in the City of Gloucester, Camden
County, New Jersey, including the New Jersey Facility, the location of which is
more fully described in Exhibit A attached to the Guarantor Mortgage, including
any additions, substitutions and replacements which have been or will be
acquired and constructed thereon.
"Guaranty" shall mean the Guaranty Agreement dated as of May 15, 1992 by
the Guarantors of the Company's obligations under the Agreement and the other
Bond Documents, and any amendments or supplements thereto.
"Xxxx" means Xxxx Hauling and Warehousing System, Inc., a Pennsylvania
corporation.
"Indebtedness" means, for any Person, (i) all indebtedness of such
Person for borrowed money or for the deferred purchase price of property
pursuant to an installment sale agreement or otherwise, (ii) all direct or
indirect guaranties of such Person in respect of and all obligations or
undertakings (contingent or otherwise) of such Person to purchase or otherwise
acquire, or otherwise to assure a creditor against loss in respect of,
indebtedness of any other Person for borrowed money or for the deferred purchase
price of property and (iii) all other obligations, contingent or otherwise,
which in accordance with generally accepted accounting principles consistently
applied shall be classified upon the obligor's balance sheet as liabilities,
including liabilities secured by any lien on any property owned or acquired by
the obligor or a subsidiary thereof, whether or not the liabilities secured
thereby shall have been assumed, capitalized leases and all guaranties,
endorsements and other contingent obligations. For
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purposes of determining the amount of Indebtedness of a Person, the
total amount of Indebtedness of another Person as to which such Person is
obligated described in clause (ii) or (iii) above, or the total possible
payments which such Person may become obligated to make in respect of a
contingent liability, shall be considered Indebtedness of such Person.
"Indenture" shall mean the Trust Indenture dated as of May 15, 1992,
between the Authority and the Trustee, as trustee, together with all amendments
and/or supplements thereto executed and delivered from time to time, securing
Bonds, including the 1992 Bonds.
"Integrated Facilities" shall mean Facilities contiguous or integrated
with any Facilities in the Borough within the meaning of Section
1.103-10(b)(ii)(e) and 1.103-10(d)(2) of the regulations under Section 103 of
the Code.
"Interest Payment Date" shall mean, with respect to Outstanding 1992
Bonds, December 1, 1992, and each June 1 and December 1 thereafter so long as
such Bonds are Outstanding.
"Issuance Costs" shall mean all costs and expenses of issuance of the
Bonds, including, but not limited to:
(i) counsel fees and expenses (including bond counsel, Authority
solicitor, Company counsel and special tax counsel fees, as well as any
other specialized counsel fees and expenses);
(ii) Trustee fees and Trustee counsel fees;
(iii) paying agent and certifying and authenticating agent fees
related to issuance of the Bonds;
(iv) accountant fees;
(v) printing costs of the Bonds;
(vi) publication costs associated with the financing proceedings; and
(vii) costs of engineering and feasibility studies necessary to the
issuance of the Bonds.
"Liens" means any mortgages, pledges, liens or other charges or
encumbrances of any kind (including the charge upon property purchased under
conditional sale or other title retention agreements) upon, or any security
interest in, any property, real or personal, tangible or intangible.
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"Mortgage" shall mean the Mortgage, Security Agreement and Assignment
of Installment Sale Agreement dated as of June 1, 1992, from the Company and the
Authority, as mortgagors, to the Trustee, as mortgagee, pursuant to which the
Authority and the Company grant to the Trustee a mortgage lien on and security
interest in their respective interests in the Project Facilities.
"Net Proceeds", when used with respect to any insurance proceeds or any
condemnation award received by the Trustee as mortgagee under the Guarantor
Mortgage pursuant to and in accordance with the Coordinate Lien Agreement, dated
as of May 15, 1992, among Xxxx, 000 Xxxxxxxx Xxx., Inc., Mellon Bank, N.A. and
Fidelity Bank, National Association, means the amount remaining after deducting
all expenses (including attorneys' fees and disbursements) incurred in the
collection of such proceeds or award from the gross proceeds thereof.
"New Jersey Facilities" means the land and improvements thereon existing
or to be constructed thereon, and all fixtures and other personalty affixed
thereto, which is or will be the subject of a ground lease or owned by 000
Xxxxxxxx Xxx., Inc. and located in Gloucester City, Camden County, Pennsylvania,
including any additions, substitutions and replacements which have been or may
be acquired and constructed thereon.
"1989 Bonds" shall mean the Authority's Variable Rate Demand/Fixed Rate
Manufacturing Facilities Development Revenue Bonds (Refrigerated Enterprises,
Inc.) Series of 1989, in the original principal amount of $7,000,000.
"1992 Bonds" shall mean the Revenue Bonds, (Refrigerated Enterprises,
Inc. Project) Series of 1992, dated as of May 15, 1992, issued or to be issued
by the Authority in the aggregate principal amount of Seven Million Dollars
($7,000,000) under the Indenture, as the same shall be outstanding under the
Indenture from time to time.
"1992 Refunding Series Bonds" means one or more of the Economic
Development Bonds (777 Xxxxxxxx Ave., Inc. - 1988 and 1989 Projects) 1992
Refunding Series of NJEDA in the aggregate principal amount of $6,140,000 which
were issued on March 2, 1992.
"1992 Refunding Series Mortgage" means the Mortgage and Security
Agreement, dated as of March 2, 1992, from Xxxx and 000 Xxxxxxxx Xxx., Inc. to
Fidelity Bank, National Association, as trustee for the 1992 Refunding Series
Bonds, under which Xxxx and 000 Xxxxxxxx Xxx., Inc. have granted to such trustee
a mortgage lien on and security interest in the Guarantor Project Facilities to
secure payment of 000 Xxxxxxxx Xxx., Inc.'s obligations in connection with the
1992 Refunding Series Bonds.
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"Person" shall mean an individual, a corporation, a partnership, a joint
venture, a trust or unincorporated organization, a joint stock company or other
similar organization, a government or any political subdivision thereof, or any
other legal entity.
"Plans" shall mean the pension or other employee benefit plans which are
established or maintained by the Company, the Guarantors and their Affiliates.
"Principal User" shall have the meaning set forth in Section 144(a) of
the Code.
"Project Facilities" shall mean the Property, together will all
buildings, improvements, and appurtenant facilities located on the Property.
"Property" shall mean that certain parcel of real property located at
000 Xxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx Xxxxxx, Xxxxxxxxxxxx, as more
fully described in Exhibit "A" attached hereto and made a part hereof.
"Purchase Price" shall mean, with respect to the Project Facilities, the
amounts payable by the Company hereunder as described in Section 4.3 hereof.
"Purchaser" shall mean Fidelity Spartan Pennsylvania Municipal
Portfolio.
"Rebate Fund" shall mean the fund so designated that is established
pursuant to Section 4.04 of the Indenture.
"Related Party" means, with respect to any Person, any Affiliate of such
Person, any Person controlling such Person or Affiliate and any director or
employee of such Person or Affiliate.
"Related Person" means for purposes of Sections 144(a)(4) and 144(a)(10)
of the code, a related person within the meaning of Section 144(a)(3) of the
Code and, for purposes of Section 147(a) of the Code, a related person within
the meaning of Section 147(a)(2) of the Code.
"Restricted Payment" means:
(i) The declaration of any dividend on, or the incurrence of any
liability to make any other payment or distribution in respect of, any
shares of Xxxx or any Xxxx Affiliate (other than one payable solely in its
common shares);
(ii) Any payment or distribution on account of the purchase,
redemption or other retirement of any shares of Xxxx or any Xxxx Affiliates
or of any
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warrant, option or other right to acquire such shares, or any other payment
or distribution made in respect thereof, either directly or indirectly,
except any payment or distribution on account of (A) the principal of and
prepayment charge, if any, on convertible debt, or (B) the purchase,
redemption or other retirement of shares Xxxx or any Xxxx Affiliate in
exchange for, or out of the net cash proceeds received by Xxxx or any Xxxx
Affiliate from a substantially concurrent sale of, other shares of Xxxx or
any Xxxx Affiliate; and
(iii) Any payment or distribution on account of the principal and
prepayment charge, if any, with respect to subordinated debt of Xxxx or any
Xxxx Affiliate other than mandatory sinking fund or other retirement
payments required by the terms thereof, and other than any working capital
line of credit secured by a mortgage.
The amount of any Restricted Payment in property shall be deemed to be
the greater of its fair market value (as determined by an independent recognized
appraiser) or its net book value.
"Revenues" shall mean (i) all amounts payable by the Company under this
Agreement and assigned to the Trustee under the Indenture, (ii) any proceeds of
Bonds originally deposited with the Trustee for the payment of accrued or
capitalized interest on the Bonds, if any, (iii) any insurance proceeds or
condemnation awards in respect of the Project Facilities, (iv) investment income
in respect of any money held by the Trustee in any of the funds under the
Indenture (excluding investment income on any amounts held in the Rebate Fund)
and (v) any money paid to the Trustee under any other collateral security
instrument held by the Trustee.
"Security Ratio" means, (A) in the case of any Indebtedness secured by
all or any portion of the Project Facilities, at any time the value of the
property subject to the lien of the Mortgage, as such value is determined by an
appraisal required by Section 1.4(k) hereof, divided by the sum of (i) the
amount (including interest which has accrued and is being deferred) of Senior
Indebtedness, plus (ii) the amount of the Bonds outstanding and (B) in the case
of any Indebtedness secured by all or any portion of the Guarantor Project
Facilities, at any time the value of the property subject to the Lien of the
Guarantor Mortgage, as such value is determined by an appraisal required by
Section 1.4(k) hereof, divided by the sum of (i) the amount (including interest
which has accrued and is being deferred) of Senior Indebtedness, plus (ii) an
amount not in excess of $3,500,000 of the Bonds Outstanding.
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"Senior Indebtedness" shall mean (A) in the case of any Indebtedness
secured by all or any portion of the Project Facilities, any Indebtedness
secured by a Lien on all or any portion of the Project Facilities which is
senior to, or on a parity with, the Lien securing the Bonds, whether now
outstanding or hereafter incurred and (B) in the case of any Indebtedness
secured by all or any portion of the Guarantor Project Facilities, any
Indebtedness secured by a lien on all or any portion of the Guarantor Project
Facilities which is senior to, or on a parity with, the lien securing the Bonds,
whether now outstanding or hereafter incurred.
"Series G Bond" or "Series G Bonds" means one or more of the Economic
Development Bonds (Xxxx Hauling and Warehousing System, Inc. - 1983 Project),
Series G Refunding (Non-AMT) of NJEDA in the aggregate principal amount of
$10,000,000 which were issued on January 28, 1992.
"Series G Mortgage" means the Mortgage and Security Agreement, dated as
of January 2, 1992, from Xxxx to Mellon Bank, N.A., as trustee for the Series G
Bonds, under which Xxxx has granted to such trustee a mortgage lien on and a
security interest in the Guarantor Project Facilities to secure payment of
Xxxx'x obligations in connection with the Series G Bonds.
"Series H Bond" or "Series H Bonds" means one or more of the Economic
Development Bonds (Xxxx Hauling and Warehousing System, Inc. - 1983 Project),
Series H Refunding (Non-AMT) of NJEDA in the aggregate principal amount of
$9,000,000 which were issued on January 28, 1992.
"Series H Mortgage" means the Mortgage and Security Agreement, dated as
of January 2, 1992, from Xxxx to Mellon Bank, N.A., as trustee for the Series H
Bonds, under which Xxxx has granted to such trustee a mortgage lien on and a
security interest in the Guarantor Project Facilities to secure payment of
Xxxx'x obligations in connection with the Series H Bonds.
"Substantial User" shall have the meaning set forth in Treasury
Regulation Section 1.103-11.
"Tax Compliance Agreement" shall mean collectively the Proceeds
Certificate and Agreement and the Non-Arbitrage Certificate and Agreement dated
as of the date of the issuance of the Bonds.
"Trustee" shall mean Fidelity Bank, National Association, Philadelphia,
Pennsylvania, in its capacity as trustee under the Indenture, and its successors
and assigns, from time to time, in the trust under the Indenture.
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SECTION 1.2 Interpretation. Any reference herein to the Authority or to
any member, director or officer of the Authority, includes entities or officials
succeeding to their respective functions, duties or responsibilities pursuant to
or by operation of law or lawfully performing their functions.
Any reference to a section or provision of the Constitution of the
Commonwealth or the Act, or to a section, provision or chapter of any statute of
the Commonwealth of the United States of America, includes that section,
provision or chapter as amended, modified, revised, supplemented or superseded
from time to time; provided, that no amendment, modification, revision,
supplement or superseding section, provision or chapter shall be applicable
solely by reason of this provision, if it constitutes in any way an impairment
of the rights or obligations of the Authority, the holders of the Bonds, the
Trustee, or the Company under the Indenture, this Agreement, the Bonds or any
other instrument or document entered into in connection with any of the
foregoing, including without limitation any alteration of the obligation to pay
principal of or interest on the Bonds in the amount and manner, at the times and
from the sources provided in this Agreement, the Bonds and the Indenture, except
as permitted herein.
Unless the context indicates otherwise, (i) words importing the singular
number includes the plural number, and vice versa; (ii) the terms "hereof,"
"hereby," "herein," "hereto," "hereunder" and similar terms refer to this
Agreement; (iii) the term "hereafter" means after, and the term "heretofore"
means before, the date of this Agreement; (iv) all references to particular
Articles or Sections are references to the Articles or Sections of this
Agreement; (v) the words "including," "includes," and "include" shall be deemed
to be followed by the words "without limitation"; (vi) references to agreements
and other contractual instruments shall be deemed to include all subsequent
amendments and other modifications to such instruments, but only to the extent
such amendments and other modifications are not prohibited by the terms of this
Agreement; and (vii) references to Persons includes their respective permitted
successors and assigns. Words of any gender include the correlative words of the
other genders, unless the sense indicates otherwise.
SECTION 1.3 Covenants of the Company. The Company agrees that, so long
as any of the Bonds are outstanding or any amounts are due under this Agreement
or under any of the Bond Documents, it shall comply and shall cause each of its
Affiliates to comply with the following provisions:
(a) Compliance with Agreement. The Company shall observe and perform
all of its obligations under this Agreement and the Bond Documents to which it
is a party. The Company shall fully and faithfully perform all the duties and
obligations which
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the Authority has covenanted and agreed in the Indenture to cause the
Company to perform and any duties and obligations which the Company is required
in the Indenture to perform.
(b) Notice of Default, Litigation, Etc.
(i) The Company shall furnish to the Trustee as soon as possible
and in any event within five (5) Business Days after the discovery by
any executive officer of the Company of any Event of Default, a
certificate setting forth the details of such Event of Default, and
the action which the Company proposes to take with respect thereto.
(ii) The Company shall give prompt notice to the Trustee of any
litigation or governmental proceeding pending, involving or, to its
knowledge, threatened against the Company or any Affiliate which (A)
involves an uninsured claim or the uninsured portion or deductible of
an insured claim which is over $500,000 or (B) if adversely
determined, would have a material adverse effect on the business or
financial condition of the Company or any Affiliate.
(c) Corporate Existence. The Company covenants that it shall maintain
its corporate existence in good standing under the laws of the Commonwealth of
Pennsylvania, shall cause each of its Affiliates to maintain its corporate
existence in good standing under the laws of its respective jurisdiction of
incorporation, and shall maintain, in each jurisdiction where material to the
business of the Company or any of its Affiliates or the maintenance of the
Collateral, its and each of their right to transact business in each
jurisdiction in which the nature of its or their business or the character of
the properties which it or they own or lease requires qualification as a foreign
corporation and where failure to so qualify would permanently preclude the
Company or any of its Affiliates, as the case may be, from enforcing its rights
with respect to its assets. No Affiliate shall be incorporated in any
jurisdiction if the laws of such jurisdiction would restrict or otherwise
adversely affect the ability of such Affiliate to perform its obligations under
the Guaranty. The Company and each Affiliate will comply in all material
respects with all applicable laws, ordinances, rules, regulations, and
requirements of governmental authorities, except where the necessity of
compliance therewith is contested in good faith by appropriate proceedings and
the effect of noncompliance during such contest will not have a material adverse
effect upon the business, properties, or condition, financial or otherwise, of
the Company or any Affiliate or result in the imposition of any Lien on the
properties of any of them (unless the enforcement of any such Lien has been and
continues to be effectively stayed). The Company will and will cause its
Affiliates to preserve and keep in full force and effect all rights, licenses,
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registrations, and franchises necessary (i) to the proper conduct of
their business or affairs and (ii) to continue to operate their business as
presently operated.
(d) Reports; Inspections.
(i) The Company shall deliver to the Trustee and the Purchaser
(A) upon request, copies of all such regular or periodic reports,
which are available for public inspection, which the Company may be
required to file with any federal or state department, bureau,
commission, or agency, (B) such financial data as the Trustee or the
Purchaser may reasonably request and which is reasonably available to
the Company, and (C) copies of any statements, notices, certificates,
and other information required to be furnished to the Authority under
this Agreement on the date such information is required to be so
furnished.
(ii) The Company shall permit, and shall cause each of its
Affiliates to permit, any Person designated by the Authority, the
Trustee or the Purchaser, at their own expense, to visit and inspect
the properties of the Company and each of its Affiliates and to
examine the books and records, including financial records of the
Company, its Affiliates, and make copies or extracts thereof, and to
discuss the affairs, finances, and accounts of the Company, its
Affiliates, with its and their officers, at such reasonable times as
the Authority or the Trustee may reasonably request.
(e) Investments in Affiliates, Etc. Neither the Company nor any
Affiliate shall purchase any capital stock or other security issued by, make any
loan, advance, or extension of credit to, purchase any of the business or
integral part of the business of, or otherwise make any investment in, any
Affiliate, or any other Person if, immediately before or after giving effect
thereto, there shall exist any Event of Default.
(f) Transactions with Related Parties. Neither the Company nor any
Affiliate shall engage in or effect any transactions with any Related Party on a
basis less favorable to the Company or such Affiliate, as the case may be, than
would be the case if such transaction had been effected with a Person which was
not a Related Party.
SECTION 1.4 Covenants of the Company and Guarantors. The Company and
each Guarantor agrees that, so long as any of the Bonds are outstanding or any
amounts are due under this Agreement or under any of the Bond Documents, it
shall comply and shall cause each of its Affiliates, including the Company, to
comply with the following provisions:
14
(a) Compliance with Aqreement. Each Guarantor shall observe and
perform all of its obligations under this Agreement and the Bond Documents to
which it is a party.
(b) Notice of Default, Litigation, Etc.
(i) Each Guarantor shall furnish to the Trustee as soon as
possible and in any event within five (5) Business Days after the
discovery by any executive officer of such Guarantor of any Event of
Default, a certificate setting forth the details of such Event of
Default, and the action which such Guarantor proposes to take with
respect thereto.
(ii) Each Guarantor shall give prompt notice to the Trustee of
any litigation or governmental proceeding pending, involving or, to
its knowledge, threatened against such Guarantor or any Affiliate
which (A) involves an uninsured claim or the uninsured portion or
deductible of an insured claim which is over $500,000 or (B) if
adversely determined, would have a material adverse effect on the
business or financial condition of such Guarantor or any Affiliate.
(c) Corporate Existence. Each Guarantor covenants that it shall
maintain its corporate existence in good standing under the laws of its
jurisdiction of incorporation, shall cause each of its Affiliates to maintain
its corporate existence in good standing under the laws of its respective
jurisdiction of incorporation, and shall maintain, in each jurisdiction where
material to the business of such Guarantor or any of its Affiliates or the
maintenance of the Collateral, its and each of their right to transact business
in each jurisdiction in which the nature of its or their business or the
character of the properties which it or they own or lease requires qualification
as a foreign corporation and where failure to so qualify would permanently
preclude such Guarantor or any of its Affiliates, as the case may be, from
enforcing its rights with respect to its assets. No Affiliate shall be
incorporated in any jurisdiction if the laws of such jurisdiction would restrict
or otherwise adversely affect the ability of such Affiliate to perform its
obligations under the Guaranty. Each Guarantor and each Affiliate will comply in
all material respects with all applicable laws, ordinances, rules, regulations,
and requirements of governmental authorities, except where the necessity of
compliance therewith is contested in good faith by appropriate proceedings and
the effect of noncompliance during such contest will not have a material adverse
effect upon the business, properties, or condition, financial or otherwise, of
such Guarantor or any Affiliate or result in the imposition of any Lien on the
properties of any of them (unless the enforcement of any such Lien has been and
continues to be effectively stayed). Each Guarantor will and will cause its
Affiliates to preserve and keep in full force and effect all rights, licenses,
15
registrations, and franchises necessary (i) to the proper conduct of
their business or affairs and (ii) to continue to operate their business as
presently operated.
(d) Acquisition, Merger of Consolidation; Sale of Substantially All
Assets. Neither the Company nor any Guarantor nor any Affiliate shall sell,
lease, assign, transfer, or otherwise dispose of any assets from and after the
date hereof (i) for less than fair value or (ii) if the combined total of the
net book value of all assets sold, leased, or otherwise assigned or disposed of
from and after the date hereof exceeds 25% of total combined assets of Xxxx and
all of its Affiliates, as the case may be. The Company shall not permit in any
event any such event to occur unless the Company has complied with the
provisions of Section 5.12. In addition, in the event of any sale of any
property subject to the lien of the Guarantor Mortgage or the Mortgage, or any
part thereof, Xxxx or the Company, as the case may be, shall make or set aside
in trust for prepayments or payments of Senior Indebtedness with a Lien senior
to the Bonds, or if no such Indebtedness is outstanding, the Bonds and any
Senior Indebtedness on a parity with the Bonds, in an amount equal to the
greater of (x) the sales price of such property sold or (y) 60% of the appraised
fair market value thereof. Notwithstanding the foregoing, neither the Company
nor any Guarantor nor any Affiliate shall sell, lease, or otherwise transfer or
dispose of any asset if, after giving effect to such sale, lease, or other
transfer or disposition, there shall exist any Event of Default.
Neither the Company nor any Guarantor nor any Affiliate shall merge or
consolidate with or into or acquire all or substantially all of the assets of
any other Person, provided that Xxxx or any Affiliate may merge or consolidate
with or into or acquire all or substantially all of such assets of another
corporation (i) if the acquiring corporation is a corporation duly organized in
good standing under the laws of a State of the United States, (ii) if the
surviving corporation is not Xxxx, the surviving corporation expressly assumes
all of the covenants and obligations of its predecessor under this Agreement and
each of the Bond Documents and otherwise in respect of the Bonds, (iii) Xxxx or
the surviving corporation could immediately after giving effect to the
transaction, incur at least $1.00 of Indebtedness pursuant to Section 1.4(h)
hereof, (iv) if the surviving corporation has rated debt securities, such debt
securities are rated by a nationally recognized credit rating agency and such
rating is investment grade or better (e.g., if by S & P, "BBB" or better and if
by Xxxxx'x, "Baa" or better), and (v) the Trustee shall have received an opinion
of Nationally Recognized Bond Counsel to the effect that such merger,
consolidation or acquisition of assets will not adversely affect the exemption
of interest on the Bonds from federal income taxation, a certificate of the
chief financial officer stating that none of the covenants contained in this
Agreement will be violated as a result of such merger, consolidation or
acquisition
16
of assets, and such other agreements, certificates, opinions, and documents as
the Trustee shall have reasonably requested. The Company and each Guarantor
agrees to notify the Purchaser of such Guarantor's or the Company's intent to
merge, consolidate or acquire assets pursuant to this paragraph at least 10
days prior to entering into any binding agreements with respect to such
acquisition.
Notwithstanding the foregoing, Xxxx shall have the right at any time and
from time to time to (i) merge or consolidate any Affiliate with or into it
(provided Xxxx is the surviving corporation) or with or into any other
Affiliate, or (ii) acquire substantially all of the assets, or cause any other
Affiliate to acquire substantially all of the assets, of any Affiliate (other
than Xxxx), without regard to the provisions of the immediately preceding
paragraph of this Section 1.4(d), but subject to the provisions of Section 5.12.
(e) Financial Statements; Inspections.
(i) The Company and the Guarantors shall cause to be delivered to the
Trustee and the Purchaser (A) as soon as available but in any event within
120 days after the end of each Fiscal Year a combined and combining
comparative statement of income, reconciliation of capital accounts and
related balance sheets for Xxxx and its Affiliates, including the
Guarantors and the Company, for such year prepared in conformity with
generally accepted accounting principles consistently applied and in
reasonable detail (such combined statements to be audited and certified by
a firm of certified public accountants with an unqualified opinion and such
combining statements to be unaudited and certified by the chief financial
officer of Xxxx, whose certificate shall be satisfactory to the Trustee),
(B) as soon as available but in any event within 60 days after the end of
each of the first three fiscal quarters of each Fiscal Year, a combined
comparative statement of income, reconciliation of capital accounts, and
related balance sheet for such quarter and for the period from the
beginning of the then fiscal year to the end of such quarter, prepared in
accordance with generally accepted accounting principles consistently
applied (subject to year-end adjustments) and in reasonable detail (all of
which shall be unaudited and certified by the chief financial officer of
Xxxx, whose certificate shall be satisfactory to the Trustee) for Xxxx and
its Affiliates, including the other Guarantors and the Company, (C) upon
request, copies of all such regular or periodic reports, which are
available for public inspection, which any Guarantor may be required to
file with any federal or state department, bureau, commission, or agency,
(D) such other financial data as the Trustee or the Purchaser may
reasonably request and which is reasonably available to any Guarantor, and
(E) copies of any statements, notices, certificates, and other information
17
required to be furnished to the Authority by such Guarantor under this
Agreement on the date such information is required to be so furnished. In
addition, Xxxx shall deliver within 90 days after the end of each of the first
three fiscal quarters of each Fiscal Year combining statements for any such
reporting period during which Xxxx'x investment in any Affiliate shall account
for 15% or more of Combined Tangible Net Worth or 15% or more of combined sales
and revenues, such combining statements to be unaudited and certified by the
chief financial officer of Xxxx, whose certificate shall be satisfactory to the
Trustee and the Purchaser. All financial statements specified in clauses (A) and
(B) above shall be furnished in combined comparative form for Xxxx and its
Affiliates with comparative figures for the corresponding period in the
preceding year, and shall be accompanied by a certificate signed by the chief
financial officer of Xxxx, with appropriate documentation substantiating all
financial calculations, stating that there exists no Event of Default or, if any
such Event of Default exists, stating the nature thereof and what action Xxxx
proposes to take with respect thereto.
(ii) Each Guarantor shall permit, and shall cause each of its
Affiliates to permit, any Person designated by the Authority, the Trustee
or the Purchaser, at their own expense, to visit and inspect the properties
of such Guarantor and each of its Affiliates and to examine the books and
records, including financial records of such Guarantor and its Affiliates,
and make copies of extracts thereof, and to discuss the affairs, finances,
and accounts of such Guarantor and its Affiliates, with its and their
officers, at such reasonable times as the Authority or the Trustee may
reasonably request.
(iii) In addition to the information required under Section 1.4(e)(i),
in connection with a sale by the Purchaser of all or a portion of the Bonds
and any or all of its rights under the Guaranty to one or more subsequent
purchasers prior to the occurrence of an Exemption Event, or in connection
with any such sale by any subsequent purchaser prior to the occurrence of
an Exemption Event, each of the Guarantors shall deliver to such subsequent
purchaser, at the request of the Purchaser or any subsequent purchaser and
on the date specified in such request, the following information: (A) a
statement describing the nature of the business of the Guarantor and the
products and services it offers, (B) copies of the Guarantor's most recent
balance sheet and profit and loss and retained earnings statements (which
may be presented on a combined basis for the Company and all of the
Guarantors), (C) copies of the financial reports listed in (B) above for
two preceding fiscal years, which reports shall be audited to the extent
available, (D) any other information required pursuant to Rule 144A
18
under the Securities Act of 1933, as it may be amended from time to time
and (E) a certificate, signed by an authorized officer of each Guarantor,
to the effect that the information set forth in clauses (A) through (D), as
of the date specified in the Purchaser's or subsequent purchaser's request,
is true, accurate and complete in all material respects, and no facts have
come to its attention which would lead the Guarantor to believe that such
information, as of the date of the certificate, contains any untrue
statement of a material fact or omits to state a material fact necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading.
(f) Restricted Payments. Neither Xxxx nor any of its Affiliates,
including the Company and the other Guarantors, shall make any Restricted
Payment or set aside any funds therefor unless, after giving effect thereto, the
aggregate of such Restricted Payments for all such purposes subsequent to the
Closing Date would not exceed the sum (as in effect from time to time,
hereinafter referred to as the 'Distribution Fund') of (i) 50% of Xxxx'x
Cumulative Combined Net Income subsequent to December 31, 1991 so long as Xxxx'x
combined Tangible Net Worth is greater than $31,051,000, (ii) the aggregate of
the net cash proceeds received by Xxxx from any issuance or sale of capital
shares of Xxxx subsequent to the Closing Date, and (iii) the aggregate of the
net cash proceeds received by Xxxx from any issuance of any Indebtedness of Xxxx
which has been converted into capital shares of Xxxx subsequent to the Closing
Date, which amount shall be added to the Distribution Fund only after such
conversion. Notwithstanding the foregoing, Xxxx may acquire its own capital
shares for an aggregate amount from and after the Closing Date equal to the
greater of (x) the sum of (i) 25% of the Cumulative Combined Net Income of Xxxx
subsequent to December 31, 1991, plus (ii) $500,000, or (y) the amount then
available under the Distribution Fund, which amount shall be charged to the
Distribution Fund. No Restricted Payment may be made in other than cash or
securities which are actively traded on a nationally recognized public market
and have a readily ascertainable market value (which value shall be the amount
of such Restricted Payment), unless Xxxx shall have received a report from an
independent recognized appraiser as to the fair value of the property to be
distributed or transferred, in which case the amount of such Restricted Payment
shall be deemed to be the greater of its fair value (as determined by such
appraiser) or its net book value on the books of Xxxx. Notwithstanding any of
the foregoing provisions of this paragraph, neither Xxxx nor any Affiliate shall
make any Restricted Payment if at the time or after giving effect thereto, there
shall exist any Event of Default.
(g) Maintenance of Combined Tangible Net Worth. Xxxx shall at all
times maintain a Combined Tangible Net Worth of (i) not less than $31,051,000,
plus 50% of Xxxx'x Aggregate
19
Combined Net Income at the end of each fiscal year subsequent to the
fiscal year ending December 31, 1991 and (ii) not less than 25% of Combined Long
Term Indebtedness but in no event less than $31,051,000.
(h) Limitation of Total Indebtedness. Neither Xxxx nor any of its
Affiliates, including the Company and the other Guarantors, shall incur
additional Indebtedness if, at the time such Indebtedness is incurred and after
giving effect thereto and to any concurrent reduction of Indebtedness, Combined
Indebtedness would exceed 400% of Combined Tangible Net Worth.
(i) Times Interest Earned. The ratio of (i) Xxxx'x Combined Net Income
Before Interest and Taxes to (ii) Xxxx'x Combined Interest Charges calculated as
of the end of each fiscal quarter beginning December 31, 1991 for the period
including such quarter and the immediately prior three fiscal quarters,
combined, will be at least 1.35 for each of said periods.
(j) Cash Flow. The Combined Cash Flow of Xxxx shall not be less than
$7,000,000 at the end of any Fiscal Year, commencing January 1, 1991.
(k) Limitation on Primary Debt. After the date hereof, neither Xxxx
nor any Affiliate, including the Company and any other Guarantors, nor
the Authority shall incur additional Indebtedness having a Lien on the Project
Facilities or the Guarantor Project Facilities, or any part thereof, senior to
any lien securing the Bonds or the obligations of the Company or any Guarantor
under this Agreement or any of the Bond Documents, provided that Xxxx or any
Affiliate may incur such Indebtedness with a senior Lien on the Guarantor
Project Facilities in an aggregate amount of up to $5,000,000 without regard to
any limitation or requirements otherwise stated under this Section 1.4(k),
provided there shall not exist any Event of Default. After the date hereof,
neither Xxxx nor any Affiliate, including the Company and the other Guarantors,
nor the Authority shall incur additional Indebtedness having a Lien on the
Project Facilities or the Guarantor Project Facilities, or any part thereof, of
equal priority with any lien securing the Bonds or the obligations of the
Company or any Guarantor under this Agreement or any of the Bond Documents if,
at the time it is incurred and after giving effect thereto, (i) the Security
Ratio would be less than 2.2 to 1; provided that no additional Senior
Indebtedness (including interest which has accrued and is being deferred) shall
be incurred without providing to the Trustee and to the Purchaser an appraisal
performed not more than two years prior to such incurrence by an independent
appraiser of recognized standing of the value of the property subject to the
lien of the Mortgage or the Guarantor Mortgage, as applicable; or (ii) if, at
the time of or after giving effect to the incurrence of such Indebtedness, there
shall exist any Event of Default. Prior to the incurrence of any Senior
Indebtedness by Xxxx or any
20
Affiliate, Xxxx shall furnish to the Trustee and the Purchaser a
certificate of its chief financial officer demonstrating in reasonable detail
compliance by Xxxx and such Affiliate with the provisions of this Section
1.4(k). In connection with the incurrence of Senior Indebtedness meeting the
requirements of this Section 1.4(k), the Trustee shall execute and deliver a
subordination of the Guarantor Mortgage or a parity agreement with respect to
the Mortgage or the Guarantor Mortgage, as applicable, provided that no such
agreement shall amend or modify any provisions of the Mortgage or the Guarantor
Mortgage, but only the priority thereof.
(1) Investments in Affiliates, Etc. Neither the Company nor any
Guarantor nor any Affiliate shall purchase any capital stock or other security
issued by, make any loan, advance, or extension of credit to, purchase any of
the business or integral part of the business of, or otherwise make any
investment in, any Affiliate, or any other Person if, immediately before or
after giving effect thereto, there shall exist any Event of Default.
(m) Compliance with ERISA. The Company, each Guarantor and each of
their Affiliates shall meet all minimum funding requirements applicable
to any Plans which are subject to ERISA or to Section 412 of the Code and will
at all times comply in all material respects with the provisions of ERISA and
Section 412 of the Code which are applicable to the Plans. No Guarantor nor any
Affiliate will permit any event or condition to exist which would permit any of
the Plans which is not a multiemployer plan to be terminated under circumstances
which would cause the lien provided for in Section 4068 of ERISA to attach to
the assets of such Guarantor or any Affiliate. Promptly after the occurrence of
a "reportable event," as defined in Section 4043 of ERISA, or after any
Guarantor or a Affiliate receives notice that the Pension Benefit Guarantee
Corporation has instituted or intends to institute termination proceedings with
respect to any Plan, and prior to the termination of any Plan by the
administrator thereof, such Guarantor shall notify the Trustee and provide such
documentation, data and other information with respect thereto as the Trustee at
the written direction of the Owners of 25% in aggregate principal amount of the
Bonds Outstanding shall reasonably request. The Trustee shall give written
notice to the Owners of any notification received by it hereunder and shall
provide to any Owner requesting same, access to, copies of or extracts from any
documents, data or other written information received by it pursuant hereto.
(n) Transactions with Related Parties. No Guarantor nor any Affiliate
shall engage in or effect any transactions with any Related Party on a basis
less favorable to the Company or such Affiliate, as the case may be, than would
be the case if such transaction had been effected with a Person which was not a
Related Party.
21
SECTION 1.5 Representations and Warranties of the Company and
Guarantors. The representations and warranties of the Company and the Guarantors
set forth in Section 2.2 of that certain Loan Agreement dated as of March 2,
1992, among New Jersey Economic Development Authority, 000 Xxxxxxxx Xxx., Inc.
and the Guarantors named therein are incorporated by reference herein and are
made a part hereof as if such representations and warranties were set forth
fully herein, except that each reference to the Company therein shall mean
Refrigerated Enterprises, Inc.
ARTICLE II
ACQUISITION OF PROJECT FACILITIES
SECTION 2.1 Acquisition of Project Facilities, Possession and Quiet
Enjoyment by Company. The Authority has acquired an interest in the Project
Facilities by means of warranty deed (which deed has been recorded in the Office
of Recorder of Deeds in and for the County). The Authority has delivered
possession of the Project Facilities to the Company and the Company has assumed
and does hereby continue to assume all risk of loss and damages with respect to
the same. The Authority agrees that so long as no Event of Default hereunder or
under the Indenture has occurred and is continuing, the Company, on performing
the covenants and conditions contained herein, shall and may peaceably and
quietly have, hold, enjoy and possess the Project Facilities, free from eviction
or disturbance by the Authority or by any other person or persons claiming the
same by, through or under the Authority. The Authority agrees that it will not
convey, suffer or permit the conveyance of its interest in the Project
Facilities, create any lien, encumbrance or charge upon the Project Facilities
(other than the security intended to be given to the Trustee to secure the
Authority's obligation under the Indenture) or grant any easement, license,
right of way or other right or privilege in the nature of an easement on the
Project Facilities, without the prior written consent of the Company; provided,
however, that nothing in this Section 2.1 shall restrict the remedies of the
Authority or its assigns if an Event of Default shall occur and be continuing.
SECTION 2.2 Provisions with Respect to Title. Subject to the provisions
of Sections 5.9 and 5.11 hereof, the Company agrees that title to the Project
Facilities will remain in the Authority until settlement pursuant to Section 4.7
hereof, and that the Authority's title to the Project Facilities shall
constitute ownership and not a security interest; provided, however, that, as
between the Authority and the Company, the Company shall be the "owner" of the
Project Facilities for federal, state and local income tax purposes and for
financial accounting purposes, and the Company alone shall be entitled to deduct
all depreciation on, and take any available tax credits in respect of, the
Project Facilities on the Company's income tax returns to the extent permitted
by law.
22
SECTION 2.3 Compliance with Laws. The Company shall give or cause to be
given all notices and comply or cause compliance with all laws, ordinances,
municipal rules and regulations and requirements of any federal, state or local
governmental entity, authority or agency applying to or affecting the Bonds, the
Project Facilities, or any Additional Facilities, including compliance with any
federal tax law requirements now or hereafter required in order for the interest
payable on the Bonds to be excludable from the gross income of the Registered
Owners thereof for federal income tax purposes and the Company will defend and
save the Authority, its officers, members, agents and employees harmless from
all penalties, fines or liabilities arising from the Company's failure to comply
or cause compliance therewith. The Authority shall cooperate with the Company to
the extent reasonably necessary to enable the Company to fulfill its obligations
set forth in this Section 2.3; provided, however, that the Company shall have
first made provision, to the Authority's satisfaction to save the Authority and
its officers, members agents and employees harmless from all costs, expenses and
liabilities in connection therewith.
SECTION 2.4 Additions and Changes to the Project Facilities.
(a) The Company may undertake to acquire and/or construct Additional
Facilities. In such event and if no Event of Default has occurred and is
continuing and subject in all events to the Company's covenants contained in
Sections 1.4 and 3.4 hereof regarding, among other things, restrictive and
prohibitive uses and limitations on "capital expenditures," the Company may
request the Authority to, and the Authority may, at its election, proceed under
the provisions of the Act to issue additional bonds in order to finance such
Additional Facilities. If Additional Facilities are to be financed by the
Authority, the Company shall obtain the Authority's approval and, if required by
law or regulation, the approval of the Secretary of Commerce of the Commonwealth
prior to the commencement of acquisition and construction. With regard to
Additional Facilities to be financed pursuant to the terms of this Section
2.4(a), such Additional Facilities shall automatically become part of the
Project Facilities subject in all respects to this Agreement.
(b) Subject to Section 3.4 hereof, the Company may, at its option and
at its own cost and expense, at any time and from time to time, undertake to
acquire and/or construct such Additional Facilities to the Project Facilities as
it may deem to be desirable for its uses and purposes, provided that: (i) such
Additional Facilities shall constitute part of the Project Facilities and be
subject to the liens and security interest created by the Indenture; and (ii)
the Company shall not permit any alienation, removal, demolition, substitution,
improvement, alteration or deterioration of such Additional Facilities or any
other act that might materially impair or reduce the usefulness
23
or value thereof, or the Authority's interest therein, or the security provided
under the Indenture, without the prior written consent of the Trustee.
(c) Upon written request of the Company, the Authority shall give a
xxxx of sale, in quitclaim form, to the Company, and the Trustee shall execute
termination statements for any filings made to perfect the security interests
created by the Indenture and by Section 4.2 hereof for any chattel or fixture
permanently removed or sold from the Project Facilities by the Company;
provided, that any chattel or fixture so removed or sold shall be replaced by
the Company by other property of similar value (but not necessarily having the
same function) so that the original cost of all such chattels and fixtures so
removed from the Project Facilities is never greater than the original cost of
the property replacing the same, and provided further that such removal, after
giving effect to such replacement, shall not materially impair the efficiency or
utility of the Project Facilities for the purposes of the Company.
ARTICLE III
CURRENT REFUNDING OF 1989 BONDS
SECTION 3.1 Issuance of Bonds. In order to currently refund the 1989
Bonds in their entirety, the Authority will issue and sell the 1992 Bonds. The
1992 Bonds will be issued under the Indenture and may be sold at such time, in
such an amount and for such price as may be approved by the Company. The
liability of the Authority under the 1992 Bonds shall be limited to, and
enforceable only to the extent of, its rights and duties hereunder or under the
Indenture, or any amendment or supplement hereto or thereto. The 1992 Bonds
shall be payable solely from payments made by the Company to the Trustee, as the
Authority's assignee, and from funds lawfully available under the Indenture, as
hereinafter provided; provided, however, that payments on the 1992 Bonds may be
made from other moneys, if any, accruing to the Trustee or to the Authority in
respect of the Project Facilities and there shall be no other liability or
recourse against the Authority or any other property or assets now or hereafter
owned by the Authority.
SECTION 3.2 Use of Proceeds. The proceeds of the 1992 Bonds will be
deposited with the Trustee, as assignee of the Authority, all as more fully set
forth in Section 3.02 of the Indenture, and shall thereafter be applied by the
Trustee, in the name and on behalf of the Authority, to the payment of all the
Authority's obligations under and pursuant to the Indenture.
SECTION 3.3 Compliance with Indenture. The Company covenants and agrees
to do all things within its power (and at its sole cost and expense) in order to
comply with and to enable the Authority to comply with all requirements and to
fulfill all covenants of the Indenture and to enable the Company and the
24
Authority to comply on a continuing basis with all requirements of the Code and
the Act to assure that the interest on the Bonds shall not be includible in the
gross income of the holders of the Bonds for purposes of federal income
taxation. So long as an Event of Default has not occurred, the Authority agrees
that it will not amend or supplement the Indenture so as to increase the burdens
or liabilities of the Company without the consent of the Company.
SECTION 3.4 Bonds Not to Become Arbitrage Bonds and Compliance with Tax
Code Requirements. The Company and Authority hereby covenant with the holders of
the 1992 Bonds that it will (i) neither make nor instruct the Trustee to make
any investment or other use of the amounts held in any fund or account under the
Indenture, including the Bond Fund or Rebate Fund (as such terms are defined in
the Indenture) or other proceeds of the 1992 Bonds that would cause the 1992
Bonds to be "arbitrage bonds" under Section 148 of the Code and that they will
comply with the requirements of Section 4.04 of the Indenture and Section 148 of
the Code and regulations promulgated thereunder throughout the term of the 1992
Bonds and (ii) comply or cause compliance with the provisions of the Tax
Compliance Agreement and all laws, rules and regulations necessary in order for
the interest or the 1992 Bonds to be excludable from the gross income of the
holders of the 1992 Bonds.
ARTICLE IV
SALE AND PURCHASE OF THE PROJECT FACILITIES
SECTION 4.1 Sale and Purchase of the Project Facilities. The Authority
hereby agrees to sell to the Company, and the Company hereby agrees to purchase
from the Authority, the Project Facilities, under and subject nevertheless to
all easements, covenants, reversions, conditions and restrictions existing at
the time of settlement pursuant to Section 4.7 hereof, for the Purchase Price
set forth in Section 4.3 hereof. The Company and the Authority intend that all
the Project Facilities shall be sold by the Authority to the Company under and
pursuant to this Agreement.
SECTION 4.2 Security Interest. The Company, to secure its obligations
hereunder, hereby assigns, transfers, sets over and grants to the Authority a
security interest in all the Company's right, title and interest in and to the
Project Facilities (including, without limitation, all furnishings, furniture,
machinery, appliances, apparatus, equipment, structures, devices, fixtures and
all substitutions and replacements therefor which constitute furniture,
machinery or equipment), whether now owned or hereafter acquired by the Company
or the Authority and located on the Property, of every kind and description,
tangible or intangible, including any Additional Facilities, together with all
additions and accessions
25
thereto, all cash and noncash proceeds therefrom (including insurance proceeds)
and all substitutions and replacements therefor; excluding, however all personal
property that is not a fixture.
SECTION 4.3 Payment of Purchase Price.
(a) The purchase price (the "Purchase Price") to be paid by the Company
for the Project Facilities will be an amount equal to the principal of, premium,
if any, and interest on the Bonds issued by the Authority. The Purchase Price
shall be payable in installments that, as to amount, correspond to the payments
of the principal of, premium, if any, and interest on the Bonds; provided,
however, that such installments shall be reduced to the extent that other moneys
are available for the payment of debt service in funds held by the Trustee on
such dates and a credit in respect thereof has been granted pursuant to the
terms of this Agreement and the Indenture. Payment of the Purchase Price shall
be made by the Company with the Company's funds, except to the extent a credit
in respect thereof has been granted pursuant to the terms of this Agreement and
the Indenture. It is the intention of the Authority and the Company that,
notwithstanding any other provision of this Agreement, the Authority shall
receive funds from the Company under this Agreement at such times and in such
amounts as will enable the Authority to meet all of its obligations under the
Bonds and the Indenture, including any such obligations surviving the payment of
the Bonds and the defeasance of the Indenture. The Purchase Price payable under
this Section 4.3(a) shall be appropriately reduced (i) after a redemption
required or permitted by the Indenture or the Bonds has been made and (ii) as
otherwise permitted under the Indenture.
(b) All payments of the Purchase Price and other sums due and payable
by the Company under this Agreement shall be absolutely net to the Authority or
the Trustee, as applicable, free of any taxes, costs, liabilities or other
deductions whatsoever with respect to the Project Facilities and the
maintenance, repair, rebuilding, use or occupation thereof or any portion
thereof, so that this Agreement shall yield all amounts due hereunder net to the
Authority or the Trustee throughout the term hereof.
(c) The Company hereby covenants to make all required payments into the
Rebate Fund as provided for in Section 4.04 of the Indenture.
SECTION 4.4 Acceleration of Payment to Redeem Bonds. Whenever the Bonds
are subject to optional redemption or extraordinary optional redemption pursuant
to the Indenture and the provisions hereof, the Authority will, upon request of
the Company, direct the Trustee to call the same for redemption as provided in
the Indenture. Whenever any series of Bonds is subject to mandatory sinking fund
redemption, mandatory redemption or special mandatory redemption pursuant to the
26
Indenture, the Company will cooperate with the Authority and the Trustee in
effecting such redemption. In the event of any redemption of the Bonds, the
Company will pay to the Trustee an amount equal to the applicable redemption
price as a prepayment of that portion of the Purchase Price corresponding to the
Bonds to be redeemed together with interest accrued to the date of redemption.
In all events the Company agrees to pay all fees and expenses of the Authority
and the Trustee arising with respect to such redemption or otherwise which are
due and owing hereunder or under the Indenture.
SECTION 4.5 Extraordinary Redemptions; Special Mandatory Redemptions.
(a) If, during the term of this Agreement, (i) any federal, state or
local body exercising governmental or judicial authority shall have taken any
action that results in unreasonable burdens or excessive liabilities, including
without limitation taxes not presently levied, with respect to the Project
Facilities or the ownership or operation thereof, that in the Company's judgment
render the Project Facilities or the operation thereof impractical or uneconomic
or (ii) all or a part of the Project Facilities shall be subject to damage,
destruction or condemnation that in the Company's judgment render the Project
Facilities or the operation thereof impractical or uneconomic, then the Company
may, at its election, and within one (1) year after the date of such
governmental or judicial action, in the case of an event covered by clause (i)
above, or the Company may, at its election, in accordance with the provisions of
Section 5.5 hereof, in the case of an event covered by clause (ii) above,
request the Authority to direct the Trustee to call all Bonds then outstanding
for extraordinary optional redemption pursuant to the terms of the Bonds and of
the Indenture and shall pay the applicable redemption price in accordance with
the provisions hereof.
(b) If, during the term of this Agreement, the Trustee receives written
notice of a Determination of Taxability with respect to the Bonds outstanding
from the Company, the applicable determining authority or any holder of Bonds
who has received notice from the applicable determining authority of a
Determination of Taxability, the Trustee shall, as promptly as practicable and
in no event any later than one hundred fifty (150) days after receipt of such
notice, call all Bonds then outstanding for special mandatory redemption
pursuant to the terms of the Bonds and of the Indenture and the Company shall
pay the applicable redemption price in accordance with the provisions hereof.
SECTION 4.6 No Defense or Set-Off. The obligations of the Company to
make payments of the Purchase Price shall be absolute and unconditional without
any defense or set-off by reason of any default by the contractors under any
contracts regarding the Project Facilities or by the Authority under this
27
Agreement or under any other agreement between the Company and the Authority or
for any other reason, including without limitation failure to complete the
Project Facilities, any acts or circumstances that may constitute failure of
consideration, destruction of or damage to the Project Facilities, invalidity or
unenforceability of the 1992 Bonds, commercial frustration of purpose or failure
of the Authority to perform and observe any agreement, whether express or
implied, or any duty, liability or obligation arising out of or connected with
this Agreement, it being the intention of the parties that the payments required
of the Company hereunder will be paid in full when due without any delay or
diminution whatsoever.
SECTION 4.7 Settlement. Settlement for the Project Facilities shall
take place within thirty (30) days after the date of final payment by the
Company of all amounts to be paid by the Company under the terms of this
Agreement (provided that the Authority shall have paid or provided for the
payment of all amounts due and owing under the Indenture and the Indenture shall
have been defeased in accordance with its terms), provided that the Company is
not in default hereunder and provided that settlement shall be held only after
the Company gives ten (10) days' prior written notice to the Authority of said
settlement. At settlement, the Authority will assign to the Company all of its
right, title and interest in and to the Project Facilities and will convey to
the Company by xxxx of sale the personal property that constitutes the Project
Facilities and by special warranty deed the real estate that constitutes the
Project Facilities, excepting, however, any part of the Project Facilities taken
by eminent domain (or conveyed by a bona fide sale in lieu thereof) during the
term of this Agreement and subject, nevertheless, to all easements, covenants,
reversions, conditions and restrictions existing at the time of the conveyance
to the Authority pursuant to Section 2.1 hereof, or thereafter created or
permitted by the Company or by the Authority with the Company's consent. The
Company agrees to pay all taxes, charges and costs, including but not limited to
real estate transfer taxes, if any, legal fees, recording fees, notary fees and
any other similar fees and charges that must be paid in order to complete
settlement and in connection with the conveyance of the interest of the
Authority in the Project Facilities from the Authority to the Company hereunder
and, with respect to the Indenture and any other mortgage created by the
Authority with the Company's consent, all mortgage satisfaction costs and fees.
In the event the Company refuses to take and record title to the Property within
the aforesaid thirty (30) day period, the Company shall pay to the Authority, or
its agent, a service charge of One Hundred Dollars and No Cents ($100.00) per
month until such time as the Company accepts and records title to the Property.
SECTION 4.8 Assignment of Authority's Rights. As security for the
payment of the Bonds, the Authority and the Company will assign to the Trustee
all their respective rights
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under this Agreement (except the rights of the Authority to receive payments
under Sections 5.4 and 5.6 hereof). The Company consents to such assignments and
agrees to make payments of the Purchase Price under Section 4.3 and Section 4.4
hereof directly to the Trustee without defense or set-off by reason of any
dispute between the Company and the Trustee.
ARTICLE V
SPECIAL COVENANTS OF THE COMPANY AND GUARANTORS
SECTION 5.1 Maintenance and Operation of the Project Facilities.
(a) During the term of this Agreement, the Company will at its own cost
and expense (i) keep and maintain, or cause to be kept and maintained, in good
repair and condition (excepting reasonable wear and tear) the Project Facilities
and all additions and improvements thereto, in accordance with all applicable
governmental laws, ordinances, approvals, rules and regulations and
requirements, including, but not limited to, zoning, sanitary, pollution,
environmental and safety ordinances, laws and rules and regulations promulgated
thereunder, and (ii) pay, or cause to be paid, any utility charges and other
costs and expenses arising out of its occupancy of the Project Facilities.
(b) The Company agrees to timely pay for any improvements to the
Project Facilities lawfully done or lawfully ordered to be done by any
municipal, state or federal authority and to comply in all material respects at
its own cost and expense with all lawful and enforceable notices received
(whether by the Authority or the Company) from public authorities from and after
the date hereof that affect the Project Facilities and the use and operation
thereof, other than those improvements, orders and notices, the amount, validity
or application of which is at the time being contested, in whole or in part, in
good faith by appropriate proceedings promptly initiated and diligently
conducted.
SECTION 5.2 Maintenance of Existence. So long as settlement pursuant to
Section 4.7 hereof has not occurred, the Company will maintain its existence as
a Pennsylvania corporation and its status as an entity authorized to conduct
business in the Commonwealth of Pennsylvania, except that it may consolidate,
merge, dissolve or otherwise dispose of all or substantially all of its assets
in accordance with Section 5.11 hereof.
SECTION 5.3 Payment of Trustee's Compensation and Expenses. The Company
will, under the provisions of this Agreement, pay the Trustee's reasonable
compensation and expenses under the Indenture (including without limitation fees
and expenses in connection with services rendered by the Trustee in
29
accordance with Article VIII or IX of the Indenture), including all costs of
redeeming Bonds thereunder, and will indemnify the Trustee, as provided in
Section 9.04 of the Indenture.
SECTION 5.4 Payment of Authority's Expenses. The Company will, under
the provisions of this Agreement, pay the Authority's standard administration
fees and the reasonable expenses incurred by the Authority in connection with
the issuance of the Bonds and the performance by the Authority of its functions
and duties under this Agreement and the Indenture including but not limited to
(i) a monthly service charge of Four Hundred Dollars ($400), payable on the
first day of each month commencing June 1, 1992; (ii) in the event the Company
prepays all of a portion of the purchase price due hereunder, a prepayment
penalty in an amount equal to 1/2 of 1% of the amount prepaid; and (iii) any and
all other expenses incurred in connection with the authorization, issuance, sale
and delivery of any such Bonds or incurred by the Authority in connection with
any litigation which may at any time be instituted involving this Agreement, the
Bonds, the Indenture or any of the other documents contemplated thereby, or
incurred in connection with the supervision or inspection of the Agreement, or
otherwise in connection with this Agreement, the Indenture, the Bonds, or any
of the other documents, instruments or agreements in connection therewith.
Notwithstanding anything contained in this Section 5.4 to the contrary, the
Company shall not be required to pay a prepayment penalty as provided in
paragraph (ii) above, if (i) the Bonds are refunded by bonds issued by the
Authority or a successor thereof, or (ii) the Bonds are called for redemption
under Section 6.01(b) or 6.01(e), of the Indenture.
SECTION 5.5 Destruction, Damage and Eminent Domain; Disposition of
Casualty Insurance and Condemnation Award Proceeds.
(a) If the Project Facilities shall be wholly or partially destroyed or
damaged by fire or other casualty covered by insurance, or shall be wholly or
partially condemned, taken or injured by any Person, including any Person
possessing the right to exercise the power of or a power in the nature of
eminent domain or shall be transferred to such a Person by way of a conveyance
in lieu of the exercise of such power by such a Person, the Authority and the
Company covenant that they will take all actions and will do all things which
may be necessary to enable recovery to be made upon such policies of insurance
or on account of such taking, condemnation, conveyance, damage or injury. The
Company is authorized, in its own name, as trustee of an express trust, to
demand, collect, xxx, settle claims, receipt and release monies which may be due
and payable under policies of insurance covering such damage or destruction or
on account of such condemnations, damage or injury. Any moneys recovered (i) on
policies of insurance required to be maintained hereunder or (ii) as a result of
any taking, condemnation, conveyance, damage or injury shall be deposited in a
separate
30
trust fund to be held by the Trustee under the Indenture and shall be applied in
accordance with the provisions of this Section 5.5.
(b) Any appraisement or adjustment of loss or damage and any settlement
or payment therefore, shall be agreed upon by the Authority, the Company, and
the appropriate insurer or condemnor or Person, shall be evidenced to the
Authority and the Trustee by the certificate and approvals set forth in the
Indenture. The Authority and the Trustee may rely conclusively upon such
certificates.
(c) After the occurrence of loss or damage to, or after receipt of
notice of condemnation of, the Project Facilities, the Company shall within five
(5) Business Days thereof notify the Authority and the Trustee in writing, of
(i) the nature of such damage or loss or (ii) the receipt of such notice.
(d) As long as the Company is not in default under the terms of this
Agreement, the Company may elect, in its discretion, whether to apply the
proceeds of any casualty insurance coverage and/or condemnation awards to (i)
the repair, reconstruction or replacement of damaged, destroyed or injured
property comprising the Project Facilities or (ii) the redemption of Bonds
pursuant to the applicable provisions of the Indenture. Absent timely direction
from the Company as to the application of any casualty insurance coverage and/or
condemnation awards or if the Company shall be in default under the terms of
this Agreement, the Trustee may elect in its sole discretion to either apply the
proceeds thereof (i) to the extraordinary redemption of the Bonds pursuant to
the applicable provisions of the Indenture or (ii) to the repair, reconstruction
or replacement of damaged, destroyed or injured property comprising the Project
Facilities. For purposes of the preceding sentence, "timely direction" shall
mean 30 days after the Company has agreed, in connection with any damage to or
condemnation of the Project Facilities, upon the settlement or payment with
respect to any appraisement or adjustment of loss or damage, as appropriate.
SECTION 5.6 Indemnity Against Claims.
(a) The Company agrees that at all times it will protect and hold the
Authority and the Purchaser and their officers, members, employees and agents,
past, present and future, harmless and indemnified from and against all claims
for losses, damages or injuries to the Trustee or others, including death,
personal injury and property damage or loss, arising during the term hereof or
during any other period when the Authority has, had or shall have any interest
in the Project Facilities or arising out of the use thereof or any activity
conducted thereon or in any other manner connected therewith, directly or
indirectly, including but not limited to claims arising out of the acquisition,
construction, installation,
31
equipping and operation of the Project Facilities; and the Authority and the
Purchaser, and their officers, members, employees and agents, past, present and
future, shall not be liable for any loss, damage or injury to the person or
property of the Company or its agents, servants or employees or any other person
who or that may be upon the Project Facilities or damaged or injured as a result
of any condition existing or activity occurring upon the Project Facilities or
any other matter connected directly or indirectly therewith due to any act or
negligence of any person, excepting only willful misconduct or gross negligence
of the Authority, and its officers, agents, members or employees, past, present
and future.
(b) The Company hereby covenants and agrees that it will indemnify the
Trustee against any and all claims arising out of the Trustee's exercise and
performance of powers and duties granted unto it by the Indenture and hereunder
in good faith and without negligence.
(c) The Company will indemnify, hold harmless and defend the Authority
and the Trustee and the respective officers, members, directors, employees and
agents of each of them, past, present and future (the "Indemnified Parties") and
the Purchaser, against all loss, costs, damages, expenses, suits, judgments,
actions and liabilities of whatever nature, including, specifically, (i) any
liability under any state or federal securities laws (including but not limited
to attorney's fees, litigation and court costs, amounts paid in settlement and
amounts paid to discharge judgments) (in case of such liability only as to the
Indemnified Parties) and (ii) any and all costs and expense arising out of, or
from, any state or federal environmental laws (including, without limitation,
costs of remediation, attorney's fees litigation and court costs, amounts paid
in settlement and amounts paid to discharge judgments) directly or indirectly
resulting from or arising out of or related to: (i) the design, construction,
installation, operation, use, occupancy, maintenance or ownership of the Project
Facilities (including compliance with laws, ordinances and rules and regulations
of public authorities relating thereto); or (ii) any statements or
representations made by the Company with respect to the Company, the Refunding
Project, this Agreement, the Bonds, the Indenture or any other document or
instrument delivered at or in connection with the closing held this day
(including any statements or representations made by the Company in connection
with the offer or sale thereof) made or given to the Authority, the Trustee or
any underwriters or purchasers of any of the Bonds, by the Company or any of its
directors, officers, agents or employees, including but not limited to,
statements or representations of facts, financial information or corporate
affairs. The Company also will pay and discharge and indemnify and hold harmless
the Authority and the Trustee from (i) any lien or charge upon payments by the
Company to the Authority and the Trustee under this Agreement and (ii) any taxes
(including, without limitation, any ad valorem
32
taxes and sales taxes, assessments, impositions and other charges in respect of
any portion of the Project Facilities). If any such claim is asserted, or any
such lien or charge upon payments, or any such taxes, assessments, impositions
or other charges are sought to be imposed, the Authority or the Trustee will
give prompt notice to the Company, and the Company will have the sole right and
duty to assume, and will assume, the defense thereof, with full power to
litigate, compromise or settle the same in its sole discretion.
(d) If the indemnification provided herefor is for any reason
determined to be unavailable to the Authority, the Trustee or the Purchaser,
then, with respect to any such loss, claim, demand or liability, including
expenses in connection therewith, the Authority and the Trustee, as appropriate,
shall be entitled as a matter of right to contribution by the Company. The
amount of such contribution shall be in such proportion as is appropriate to
reflect relative culpability of the parties.
SECTION 5.7 Taxes, Other Governmental Charges, Utility Charges and
Payments in Lieu of Taxes and Assessments. The Company shall pay, or cause to be
paid, as the same become due, all taxes, assessments (whether general or
special) and governmental charges of any kind whatsoever that may at any time be
lawfully assessed or levied against or with respect to the Project Facilities,
including any equipment or related property installed or brought by the Company
therein or thereon (including without limitation any taxes levied upon or with
respect to the revenues or income of the Authority from the Project), and all
utility and other charges incurred in the operation, maintenance, use, occupancy
and upkeep of the Project Facilities; provided, that with respect to special
assessments or other governmental charges that lawfully may be paid in
installments over a period of years, the Company shall be obligated to pay only
such installments as are required to be paid during the term hereof. If the
Project Facilities are not taxed or assessed because of any interest the
Authority may have in respect thereof, the Company shall pay to the political
subdivisions, including the county, municipality and school district in which
the Project Facilities are located, an amount equal to the ad valorem taxes and
other assessments or tax levies that would be due and payable if title to the
Project Facilities were held in the name of the Company. Such amounts in lieu of
taxes and assessments shall be payable by the Company directly to the political
subdivisions in which the Project Facilities are located. The Company may, at
its expense, in good faith contest any such taxes, assessments and other charges
and, in the event of any such contest, may permit the taxes, assessments or
other charges so contested to remain unpaid during the period of such contest
and any appeal therefrom, unless by nonpayment of any such items the lien of the
Indenture will be materially endangered or the Project Facilities or any part
thereof will be subject to loss or forfeiture, in which event such taxes,
assessments or charges shall be paid promptly. The Authority will cooperate
fully with the Company in
33
any such contest. The Company also agrees to comply at its own cost and expense
with all notices received from public authorities from and after the date
hereof. In the event that the Company shall fail to pay any of the foregoing
items required by this Section 5.7 to be paid by the Company, the Authority or
the Trustee may (but shall be under no obligation to) pay the same and any
amounts so advanced therefor by the Authority or the Trustee shall become an
additional obligation of the Company to the one making the advance, which
amounts, together with interest thereon at a rate equal to the then applicable
rate on the 1992 Bonds from the date thereof, the Company agrees and covenants
to pay, and such amounts and interest shall be considered to be additional
indebtedness secured hereby.
SECTION 5.8 Insurance.
(a) The Company covenants to provide and continuously maintain, unless
otherwise herein provided, adequate insurance on the Project Facilities and all
parts thereof and operations conducted therein and thereon in such manner and
against such loss, damage and liability, including liability to third parties,
as is customary with property owners in the same or similar business in the
Commonwealth. Without limiting the generality of the foregoing sentence, such
insurance shall include, without limitation:
(i) Public liability insurance insuring against any and all liability
or claims of liability out of, occasioned by, or resulting from any
accident or otherwise resulting in or about the Project Facilities, in a
minimum amount of $5,000,000 for the death of or bodily injury to one
person, $5,000,000 for the death of or bodily injury in any one accident or
occurrence and $5,000,000 for loss or damage to the property of any Person
or Persons, provided, however, that in the event the Company is unable at
any time to obtain such insurance in such amount, the failure of the
Company to obtain such insurance shall not constitute an Event of Default
hereunder so long as the Company obtains such insurance in such lesser
amounts as is available;
(ii) Property damage and broad form fire and extended coverage
insurance with respect to the Property and insurance insuring against such
other hazards, casualties and contingencies as the Authority and the
Purchaser may require, which insurance shall provide coverage at
replacement cost and with no provisions for coinsurance penalties and shall
be in an amount equal to the lesser of (i) $7,000,000, or (ii) the
aggregate principal amount of the 1992 Bonds and any Senior Indebtedness
secured by the Project Facilities; and
(iii) If the Property is required to be insured pursuant to the
National Flood Insurance Act of 1968, and the regulations promulgated
thereunder, flood
34
insurance with respect to the Property in an amount not less than
$7,000,000 or the maximum limit of coverage available, whichever amount is
less.
(b) Any insurance hereunder shall be written by insurance companies
authorized or licensed to do business in the Commonwealth and shall be on such
forms and written by such companies as shall be approved by the Authority and
the Purchaser. Such insurance coverage may be effected under overall blanket or
excess coverage policies of the Company provided that the Company shall not be
deemed to be a co-insurer thereunder. Each insurance policy maintained pursuant
to this Agreement shall contain a provision to the effect that such policy shall
not be cancelled or altered unless the Trustee is notified at least fifteen (15)
days prior to such cancellation or alteration. At least thirty (30) days prior
to the expiration of any such policy, the Company shall furnish evidence
satisfactory to the Trustee that such policy has been renewed or replaced or is
no longer required by this Agreement.
(c) Each insurance policy maintained pursuant to this Agreement and
providing insurance against loss of or damage to property shall be written or
endorsed so as to name the Trustee and the Authority as additional insureds as
their interests may appear and to have the proceeds thereof payable directly to
the Trustee as loss payee. Each policy providing public liability coverage shall
be written or endorsed so as to name the Trustee and the Authority as additional
insureds.
(d) Duplicate copies of any insurance policies and evidence of renewal
or replacement thereof shall promptly be furnished to the Trustee for its
records. Evidence of the payment of the first year's premiums on such policies
shall be delivered to the Trustee on the Closing Date. Thereafter, the Company
shall deliver to the Trustee evidence of the payment of all additional premiums
prior to the expiration or renewal dates of all such policies.
(e) In the event of loss or damage to the Project Facilities, the
proceeds of any insurance provided hereunder shall be deposited with the Trustee
and applied as set forth in Section 5.5 hereof, and in the event of a public
liability occurrence, the proceeds of any insurance provided hereunder shall be
applied towards satisfaction of such liability.
SECTION 5.9 Prohibition of Liens. Without the prior written consent of
the Trustee, the Company shall not create or suffer to be created by any other
person any lien or charge upon the Project Facilities or any part thereof other
than in favor of the Authority or the Trustee. The Company further agrees to pay
or cause to be discharged or make adequate provision to satisfy and discharge,
within sixty (60) days after the same shall become due, any such lien or charge
and also all lawful claims or demands for labor, materials, supplies or other
charges that, if
35
unpaid, might be or become a lien upon the Project Facilities or any part
thereof; provided, however, that nothing in this Section 5.9 shall require the
Company to pay or cause to be discharged or make provision for any such lien or
charge so long as the validity thereof shall be diligently contested in good
faith and so long as the Project Facilities or any part thereof are not subject
to loss or forfeiture. The Authority shall cooperate with the Company in any
such contest.
SECTION 5.10 Granting of Easements. If no Event of Default under this
Agreement has occurred and is continuing, the Company may, notwithstanding
anything contained herein to the contrary, at any time or times, with the prior
written consent of the Trustee (which shall not be unreasonably withheld), grant
easements, licenses, rights of way and other rights or privileges in the nature
of easements with respect to any property included in the Project Facilities,
free from the lien of this Agreement or the Indenture, or release existing
easements, licenses, rights of way and other rights or privileges, all with or
without consideration and upon such terms and conditions as the Company shall
determine, and the Authority agrees that, within a reasonable amount of time
following such grant or release, it will execute and deliver and will cause and
direct the Trustee, within a reasonable amount of time following such grant or
release, to execute and deliver any instrument necessary or appropriate to
confirm and grant or release any such easement, license, right of way or other
right or privilege, upon receipt by the Authority and the Trustee of:
(a) A copy of the instrument of grant or release;
(b) A written application signed by the Company requesting such
instrument; and
(c) A certificate executed by the Company, and such other persons as
the Authority or the Trustee may reasonably require, stating that such grant or
release is not detrimental to the proper conduct of the business of the Company
and that such grant or release will not impair the effective use or interfere
with the efficient and economical operation of the Project Facilities and will
not in any material respect weaken, diminish or impair the security intended to
be given by or under the Indenture.
If the instrument of grant shall so provide, any such easement or right
and rights of such other parties thereunder shall be superior to the rights of
the Authority and the Trustee under this Agreement and the Indenture and shall
not be affected by any termination of this Agreement or default on the part of
the Company hereunder. If no Event of Default has occurred and is continuing,
any payments or other consideration received by the Company for any such grant
shall be and remain the property of the Company, but if an Event of Default has
occurred and is
36
continuing, all rights then existing of the Company with respect to or under
such grant shall inure to the benefit of and be exercisable by the Authority and
the Trustee.
SECTION 5.11 Merger and Consolidation; Liquidation and Dissolution. The
Company agrees that it will maintain its existence as a Pennsylvania
corporation, will maintain its status as an entity authorized to conduct
business in the Commonwealth of Pennsylvania, and will not sell, assign,
transfer or otherwise dispose of all or substantially all of its assets. The
Company may merge with or into or consolidate with another entity, and the
Project Facilities or this Agreement may be transferred without violating this
Section 5.11 provided (i) the net worth of the surviving, resulting or
transferee company following the merger consolidation or transfer is equal to or
greater than the net worth of the Company immediately preceding the merger,
consolidation or transfer; (ii) any litigation or investigations in which the
surviving, resulting or transferee company or its officers and directors are
involved, and any court, administrative or other orders to which the surviving,
resulting or transferee company or its officers and directors are subject,
relate to matters arising in the ordinary course of business; (iii) the merger,
consolidation or transfer shall not impair the excludability of interest paid on
the Bonds from the gross income of the Owners thereof for purposes of federal
income taxation pursuant to an opinion of Nationally Recognized Bond Counsel;
(iv) the surviving, resulting or transferee company assumes in writing the
obligations of the Company under this Agreement and the Bond Documents; (v)
after the merger, consolidation or transfer the Project Facilities shall be
operated as an authorized project under the Act and (vi) the provisions of
Section 1.4(d) are met.
SECTION 5.12 Compliance with Laws. With respect to the Project
Facilities and any additions, alterations or improvements thereto, the Company
will at all times comply with all applicable requirements of federal, state and
local laws and with all applicable lawful requirements of any agency, board, or
commission created under laws of the Commonwealth or of any other duly
constituted public authority, and will use, and permit the use of, the Project
Facilities only for such purposes as are lawful under the Act; provided,
however, that the Company shall be deemed in compliance with this Section 5.12
so long as it is contesting in good faith any such requirement by appropriate
legal proceedings.
SECTION 5.13 Recording Statements. This Agreement (or a memorandum
hereof) shall be recorded in the office for the recording of deeds in and for
the County, and in such other place or places as may be required by law, it
being the intention of the parties hereto that the Mortgage shall first be
recorded and that this Agreement (or a memorandum hereof) shall be recorded
immediately after such Mortgage. The Company shall, at its own expense, cause
financing statements under the Pennsylvania
37
Uniform Commercial Code to be filed in the places required by law in order to
perfect the security interests created by Section 4.2 hereof, naming the Trustee
as secured party.
SECTION 5.14 Notice of Bankruptcy Case Commencement. The Company
covenants and agrees that it shall immediately notify the Authority and the
Trustee of the commencement of any case by or against it under the Bankruptcy
Code.
SECTION 5.15 Authority is Conduit Issuer; Company is Real Party in
Interest; Covenant Not to Xxx.
(a) The Company hereby expressly acknowledges that the Authority is a
conduit issuer and that all of the, right, title and interest of the Authority
in and to this Agreement are to be assigned to the Trustee (except for the right
of the Authority to receive its reasonable fees and expenses and to
indemnification), naming the Trustee its true and lawful attorney for and in its
name to enforce the terms and conditions of this Agreement. Notwithstanding any
other provision contained herein, the Company hereby expressly agrees,
acknowledges and covenants that to the extent practicable it shall duly and
punctually perform or cause to be performed each and every duty and obligation
of the Authority hereunder and under the Indenture.
(b) The Company shall neither xxx the Authority, or any of its members,
officers, agents or employees, past, present or future, for any costs, damages,
expenses, suits, judgments, liabilities, claims, losses, demands, actions or
nonactions based upon this financing or sustained in connection with or as a
result of this financing nor ever raise as a defense in any proceedings
whatsoever that the Authority is the true party in interest. Notwithstanding any
other provisions of this Agreement, the Company shall be entitled to (i) bring
an action of specific performance against the Authority to compel any action
required to be taken by the Authority hereunder or an action to enjoin the
Authority from performing any action prohibited by this instrument, but no such
action shall in any way impose pecuniary liability against the Authority or any
of its members, officers, agents or employees, past, present and future, (ii)
join the Authority in any litigation if such joinder is necessary to pursue any
of the Company's rights, provided that prior to such joinder, the Company shall
post such security as the Authority may require to further protect the Authority
from loss and (iii) pecuniary remuneration from the Authority for damage or loss
suffered by the Company by reason of the gross negligence or willful misconduct
of the Authority or any of its members, officers, agents or employees, past,
present or future.
SECTION 5.16 Certain Environmental Matters. (a) The Company represents
and warrants to the Authority that to the best of its knowledge there has been
no treatment, disposal or release of any Hazardous Substances (hereinafter
defined) at the Property and the Company covenants that, upon the request of the
Authority
38
in the event that any liability is imposed on the Authority pursuant to, or any
remedial action is required by, an action arising out of 42 U.S.C. Section 9607
("CERCL") or any other applicable similar federal, state or local law
(collectively with CERCL, "Environmental Laws"), the Company will post a bond,
or obtain other security satisfactory to the Authority, in an amount equal to
the greater of: (i) 1.5 times the amount in controversy in a proceeding
commenced under such Environmental Laws, and (ii) the estimated cost of any
remedial action required to be taken by the Authority pursuant to an order or
mandate of a federal, state or local governmental body or agency under such
Environmental Laws.
SECTION 5.17 Indemnification for Hazardous Materials. The Company and
each Guarantor, jointly and severally, covenants and agrees, at its sole cost
and expense, to indemnify, protect and save the Indemnified Parties and the
Purchaser (the "Indemnitees") harmless against and from any and all damages,
losses, liabilities, obligations, penalties, claims, litigation, demands,
defenses, judgments, suits, proceedings, costs, disbursements or expenses
(including, without limitation, attorneys' and experts' reasonable fees and
disbursements) of any kind or of any nature whatsoever (collectively, the
"Indemnified Matters") which may at any time be imposed upon, incurred by or
asserted or awarded against Indemnitees and arising from or out of:
(a) any hazardous materials, as defined under any Laws as defined
below, on, in, under or affecting all or any portion of the property subject to
the Mortgage or any surrounding areas (but in the case of hazardous materials in
surrounding areas, only if the source of such materials is or is alleged to be
the Company, any Guarantor or the Mortgaged Premises), or
(b) the enforcement of this paragraph or the assertion by the Company
or any Guarantor of any defense to its obligations hereunder (except the
successful defense of actual performance not subject to further appeal),
whether any of such matters arise before or after the Closing Date or before or
after foreclosure of the Mortgage or other taking of title to the Company's or
any Guarantor's interest in all or any portion of the Mortgaged Premises by
Indemnitees or any affiliate of Indemnitees. Indemnified Matters shall include,
without limitation, all of the following: (i) the costs of removal of any and
all hazardous materials from all or any portion of the property or any
surrounding areas (except that the indemnity provided for under this paragraph
shall not cover the costs of such removal unless either (a) such removal is
required by any federal or state law, regulation or regulatory agency ("Laws")
or (b) any present or future use, operation, development, construction,
alteration or reconstruction of all or any portion of the Mortgaged Premises is
or would be conditioned
39
in any way upon, or is or would be limited in any way until the completion of,
such removal in accordance with any Laws), (ii) additional costs required to
take necessary precautions as required by law to protect against the release of
hazardous materials on, in, under or affecting the Mortgages Premises into the
air, any body of water, any other public domain or any surrounding areas and
(iii) costs incurred to comply, in connection with all or any portion of the
Mortgaged Premises or any surrounding areas, with all applicable laws with
respect to hazardous materials. If any Indemnitee or any affiliate of an
Indemnitee takes title to the Company's or any Guarantor's interest in the
Guarantor Project Facilities at a foreclosure sale, at a sale pursuant to a
power of sale under the Guarantor Mortgage or by deed in lieu of foreclosure or
otherwise, then the indemnity provided for under this paragraph shall not apply
to hazardous materials which are initially placed on, in or under all or any
portion of the Guarantor Project Facilities after the date Indemnitee or such
affiliate so takes title to such interest in the Guarantor Project Facilities.
At any time during the six months prior to any such foreclosure sale, sale
pursuant to a power of sale under the Guarantor Mortgage or by deed in lieu of
foreclosure or otherwise by which any Indemnitee or affiliate takes title to
such interest in the Guarantor Project Facilities, such Indemnitee or affiliate
shall have the right, at its sole discretion and at the Company's and the
Guarantor's sole cost and expense, to have performed an environmental site
assessment of the Guarantor Project Facilities to determine whether any
hazardous materials are present.
SECTION 5.18 Additional Covenants of the Guarantors.
(a) Taxes, Other Governmental Charges and Utility Charges.
(i) Each of the Guarantors covenants that it and each of its
Affiliates shall duly and punctually pay all taxes, assessments
(including deficiency assessments), and governmental charges or levies
of any kind whatsoever ("Taxes") imposed on it or on its respective
income or profits or on any of its respective properties or assets,
including, without limiting the generality of the foregoing, any taxes
levied upon the Guarantor Project Facilities which, if not paid, will
become a Lien or charge upon the Guarantor Project Facilities or upon
any payment pursuant to this Installment Sale Agreement, prior to the
date on which penalties attach thereto. Each of the Guarantors shall
also pay all utility, water and sewer rents, and other charges
incurred in connection with the Guarantor Project Facilities and all
assessments and charges lawfully made by any governmental body for
public improvements that may be secured by a Lien on the Guarantor
Project Facilities or any of its assets.
40
(ii) Any Guarantor may, at its own expense and in its own name
and in good faith, contest any such taxes, assessments, and other
charges, provided that such contest shall not result in a lien being
placed on the Guarantor Project Facilities or any part thereof or
result in the Guarantor Project Facilities being subject to loss or
forfeiture, and further provided that such Guarantor gives notice in
writing of such contest to the Trustee. Nothing herein shall preclude
any Guarantor, at its own expense and in its own name and behalf, from
applying for any tax exemption allowed by the federal government, the
State, or any political subdivision which grants or may grant such tax
exemption.
(b) Insurance Required.
(i) Xxxx and 000 Xxxxxxxx Xxx., Inc. covenant to provide and
continuously maintain, unless otherwise herein provided, adequate
insurance on the Guarantor Project Facilities and all parts thereof
and operations conducted therein and thereon in such manner and
against such loss, damage and liability, including liability to third
parties, as is customary with property owners in the same or similar
business in the State of New Jersey. Limiting the generality of the
foregoing sentence, such insurance shall include, without limitation:
(1) Public liability insurance insuring against any and all
liability or claims of liability out of, occasioned by, or
resulting from any accident or otherwise resulting in or about
the Guarantor Project Facilities, in a minimum amount of
$5,000,000 for the death of or bodily injury to one person,
$5,000,000 for the death of or bodily injury in any one accident
or occurrence and $5,000,000 for loss or damage to the property
of any Person or Persons, provided, however, that in the event
Xxxx and 000 Xxxxxxxx Xxx., Inc. are unable at any time to obtain
such insurance in such amount, the failure of Xxxx and 000
Xxxxxxxx Xxx., Inc. to obtain such insurance shall not constitute
an Event of Default hereunder so long as Xxxx and 000 Xxxxxxxx
Xxx., Inc. obtain such insurance in such lesser amounts as is
available;
(2) Property damage and broad form fire and extended
coverage insurance with respect to the New Jersey Facilities and
insurance insuring against such other hazards, casualties and
contingencies as the Authority and the Purchaser may require,
which insurance shall provide coverage at replacement cost and
with no provisions for coinsurance penalties and shall be in an
amount equal to the lesser of
41
(i) $40,000,000, or (ii) the aggregate principal amount of the
1992 Bonds and any Senior Indebtedness secured by the Guarantor
Project Facilities; and
(3) If the New Jersey Facilities are required to be insured
pursuant to the Flood Disaster Protection Act of 1973 or the
National Flood Insurance Act of 1968, and the regulations
promulgated thereunder, flood insurance with respect to the New
Jersey Facilities in an amount not less than $7,000,000 or the
maximum limit of coverage available, whichever amount is less.
(ii) Any insurance hereunder shall be written by insurance
companies authorized or licensed to do business in the State of New
Jersey and shall be on such forms and written by such companies as
shall be approved by the Purchaser. Such insurance coverage may be
effected under overall blanket or excess coverage policies of Xxxx and
000 Xxxxxxxx Xxx., Inc. provided that Xxxx and 000 Xxxxxxxx Xxx., Inc.
shall not be deemed to be a co-insurer thereunder. Each insurance
policy maintained pursuant to this Agreement shall contain a provision
to the effect that such policy shall not be cancelled or altered
unless the Trustee is notified at least fifteen (15) days prior to
such cancellation or alteration. At least thirty (30) days prior to
the expiration of any such policy, Xxxx and 000 Xxxxxxxx Xxx., Inc.
shall furnish evidence satisfactory to the Trustee that such policy
has been renewed or replaced or is no longer required by this
Agreement.
(iii) Each insurance policy maintained pursuant to this Agreement
and providing insurance against loss of or damage to property shall be
written or endorsed so as to name the Trustee as an additional insured
as its interest may appear and to have the proceeds thereof payable
directly to the Trustee as loss payee. Each policy providing public
liability coverage shall be written or endorsed so as to name the
Trustee as an additional insured.
(iv) Duplicate copies of any insurance policies and evidence of
renewal or replacement thereof shall promptly be furnished to the
Trustee for its records. Evidence of the payment of the first year's
premiums on such policies shall be delivered to the Trustee on the
Closing Date. Thereafter, Xxxx and 000 Xxxxxxxx Xxx., Inc. shall
deliver to the Trustee evidence of the payment of all additional
premiums prior to the expiration or renewal dates of all such
policies.
(v) In the event of loss or damage to the Guarantor Project
Facilities, the proceeds of any insurance provided hereunder shall be
deposited with the Trustee and applied as set forth in Section 5.18(c)
hereof, and in the
42
event of a public liability occurrence, the proceeds of any insurance
provided hereunder shall be applied towards satisfaction of such
liability.
(c) Destruction Damage and Eminent Domain; Disposition of Casualty
insurance and Condemnation Award Proceeds.
(i) If the Guarantor Project Facilities shall be wholly or
partially destroyed or damaged by fire or other casualty covered by
insurance, or shall be wholly or partially condemned, taken or injured
by any Person, including any Person possessing the right to exercise
the power of or a power in the nature of eminent domain or shall be
transferred to such a Person by way of a conveyance in lieu of the
exercise of such power by such a Person, Xxxx and 000 Xxxxxxxx Xxx.,
Inc. covenant that they will take all actions and will do all things
which may be necessary to enable recovery to be made upon such
policies of insurance or on account of such taking, condemnation,
conveyance, damage or injury. Xxxx and 000 Xxxxxxxx Xxx., Inc. are
authorized, in their own names, as trustee of an express trust, to
demand, collect, xxx, settle claims, receipt and release the Net
Proceeds which may be due and payable under policies of insurance
covering such damage or destruction or on account of such
condemnations, damage or injury. Any Net Proceeds recovered (i) on
policies of insurance required to be maintained hereunder or (ii) as a
result of any taking, condemnation, conveyance, damage or injury shall
be deposited in a separate trust fund to be held by the Trustee under
the Indenture and shall be applied in accordance with the provisions
of this Section 5.18(c).
(ii) Any appraisement or adjustment of loss or damage and any
settlement or payment therefore, shall be agreed upon by Xxxx and 000
Xxxxxxxx Xxx., Inc., the Company, and the appropriate insurer or
condemnor or Person, shall be evidenced to the Trustee by the
certificate and approvals set forth in the Indenture. The Trustee may
rely conclusively upon such certificates.
(iii) After the occurrence of loss or damage to, or after receipt
of notice of condemnation of, the Guarantor Project Facilities, Xxxx
and 000 Xxxxxxxx Xxx., Inc. shall within five (5) Business Days
thereof notify the Authority and the Trustee in writing, of (a) the
nature of such damage or loss or (b) the receipt of such notice.
(iv) As long as there is no Event of Default under the terms of
this Agreement, Xxxx and 000 Xxxxxxxx Xxx., Inc. may elect, in their
discretion, whether to apply the Net Proceeds of any casualty
insurance coverage and/or condemnation awards to (a) the repair,
reconstruction or replacement of damaged, destroyed or injured
property
43
comprising the Guarantor Project Facilities or (b) the redemption of
Bonds pursuant to the applicable provisions of the Indenture. Absent
timely direction from Xxxx and 000 Xxxxxxxx Xxx., Inc. as to the
application of any casualty insurance coverage and/or condemnation
awards or if there shall be an Event of Default under the terms of
this Agreement, the Trustee may elect in its sole discretion to either
apply the Net Proceeds thereof (y) to the extraordinary redemption of
the Bonds pursuant to the applicable provisions of the Indenture or
(z) to the repair, reconstruction or replacement of damaged, destroyed
or injured property comprising the Guarantor Project Facilities. For
purposes of the preceding sentence, "timely direction" shall mean 30
days after Xxxx and 000 Xxxxxxxx Xxx., Inc. have agreed, in connection
with any damage to or condemnation of the Guarantor Project
Facilities, upon the settlement or payment with respect to any
appraisement or adjustment of loss or damage, as appropriate.
(v) Notwithstanding the foregoing, the Net Proceeds from a
certain action pending in the Superior Court of New Jersey, Law
Division, Camden County, Docket No. L-8037-90, and entitled "State of
New Jersey, by the Commissioner of Transportation, Plaintiff x. Xxxx
Hauling and Warehousing System, Inc., a corporation of Pennsylvania,
et al., Defendants" shall be paid directly to Xxxx and shall not be
subject to the provisions of Paragraphs (i) through (iv) of this
Section 5.18(c).
(d) Indemnification for Hazardous Materials. The Company and each
Guarantor, jointly and severally, covenants and agrees, at its sole cost and
expense, to indemnify, protect and save the Indemnified Parties and the
Purchaser (the "Indemnitees") harmless against and from any and all damages,
losses, liabilities, obligations, penalties, claims, litigation, demands,
defenses, judgments, suits, proceedings, costs, disbursements or expenses
(including, without limitation, attorneys' and experts' reasonable fees and
disbursements) of any kind or of any nature whatsoever (collectively, the
"Indemnified Matters") which may at any time be imposed upon, incurred by or
asserted or awarded against Indemnitees and arising from or out of:
(i) any hazardous materials, as defined under any Laws as defined
below, on, in, under or affecting all or any portion of the property
subject to the Guarantor Mortgage or any surrounding areas (but in the
case of hazardous materials in surrounding areas, only if the source
of such materials is or is alleged to be the Company, any Guarantor or
the Guarantor Project Facilities), or
44
(ii) the enforcement of this paragraph or the assertion by the
Company or any Guarantor of any defense to its obligations hereunder
(except the successful defense of actual performance not subject to
further appeal),
whether any of such matters arise before or after the Closing Date or before or
after foreclosure of the Guarantor Mortgage or other taking of title to the
Company's or any Guarantor's interest in all or any portion of the Guarantor
Project Facilities by Indemnitees or any affiliate of Indemnitees. Indemnified
Matters shall include, without limitation, all of the following: (i) the costs
of removal of any and all hazardous materials from all or any portion of the
property or any surrounding areas (except that the indemnity provided for under
this paragraph shall not cover the costs of such removal unless either (a) such
removal is required by any federal or state law, regulation or regulatory agency
("Laws") or (b) any present or future use, operation, development, construction,
alteration or reconstruction of all or any portion of the Guarantor Project
Facilities is or would be conditioned in any way upon, or is or would be limited
in any way until the completion of, such removal in accordance with any Laws),
(ii) additional costs required to take necessary precautions as required by law
to protect against the release of hazardous materials on, in, under or affecting
the Guarantor Project Facilities into the air, any body of water, any other
public domain or any surrounding areas and (iii) costs incurred to comply, in
connection with all or any portion of the Guarantor Project Facilities or any
surrounding areas, with all applicable laws with respect to hazardous materials.
If any Indemnitee or any affiliate of an Indemnitee takes title to the Company's
or any Guarantor's interest in the Guarantor Project Facilities at a foreclosure
sale, at a sale pursuant to a power of sale under the Guarantor Mortgage or by
deed in lieu of foreclosure or otherwise, then the indemnity provided for under
this paragraph shall not apply to hazardous materials which are initially placed
on, in or under all or any portion of the Guarantor Project Facilities after the
date Indemnitee or such affiliate so takes title to such interest in the
Guarantor Project Facilities. At any time during the six months prior to any
such foreclosure sale, sale pursuant to a power of sale under the Guarantor
Mortgage or by deed in lieu of foreclosure or otherwise by which any Indemnitee
or affiliate takes title to such interest in the Guarantor Project Facilities,
such Indemnitee or affiliate shall have the right, at its sole discretion and at
the Company's and the Guarantor's sole cost and expense, to have performed an
environmental site assessment of the Guarantor Project Facilities to determine
whether any hazardous materials are present.
45
ARTICLE VI
EVENTS OF DEFAULTS AND REMEDIES
SECTION 6.1 Events of Default; Acceleration. Each of the following
events is hereby defined as, and is declared to be and to constitute, an "Event
of Default".
(a) Failure by the Company to make any payment required to be made
under Section 4.3 hereof on or before the corresponding principal, redemption or
interest payment dates of the Bonds; or
(b) Failure by the Company or any Guarantor to observe and perform any
covenant, condition or agreement on its part to be observed or performed under
this Agreement or any other Bond Document, other than as referred to in Section
6.1(a) or Section 6.1(k) for a period of ninety (90) days after such failure
first becomes known to any officer of the Company or such Guarantor; or
(c) Notice by the Trustee to the Authority and the Company that an
"Event of Default" has occurred under the Indenture.
(d) If any warranty or representation by or on behalf of the Company or
any Guarantor contained in this Agreement, the Indenture, the Bond Purchase
Agreement, the Bond Documents, the Guaranty, or in any instrument or certificate
furnished in compliance with same proves false or misleading in any material
respect as of the time it was made; or
(e) Failure by the Company or any Guarantor to make one or more
payments due with respect to aggregate Indebtedness exceeding $500,000 within
any applicable periods for cure; or if any event shall occur or any condition
shall exist, the effect of which event or condition is to cause more than
$500,000 of aggregate Indebtedness or other securities of the Company or any
Guarantor to become due or subject to mandatory redemption or repurchase before
its (or their) stated maturity or before its (or their) regularly scheduled
dates of payment, redemption or purchaser; or
(f) If a custodian, receiver or liquidator is appointed for the Company
or any Guarantor or the Company or any Guarantor is adjudicated bankrupt or
insolvent; or any order of relief is entered under the Federal Bankruptcy Code
against the Company or any Guarantor or any of its property is sequestered by
court order and the order remains in effect for more than 60 days; or a petition
is filed against the Company or any Guarantor under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation law or any jurisdiction, whether now or subsequently in effect, and
is not dismissed within 60 days after filing; or
46
(g) If the Company or any Guarantor commences a voluntary case or files
a petition in voluntary bankruptcy where seeking relief under any provision of
the Federal Bankruptcy Code or any other bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or liquidation law of
any jurisdiction, whether now or subsequently in effect; or consents to the
filing of any petition against it under any such law; or applies for or consents
to the appointment of or taking possession by a custodian, receiver, trustee or
liquidator of the Company or any Guarantor of all or any part of its property;
or makes an assignment for the benefit of its creditors; or admits in writing
its inability to pay its debt generally as they become due; or
(h) Any of the Bond Documents shall not be, or shall cease to be, the
legal, valid, binding and enforceable obligations of each of the parties thereto
in accordance with its terms, or any of the Bond Documents shall not be or shall
cease to be in full force and effect; or
(i) There shall exist any Affiliate of Xxxx or the Company which has
not, within 90 days after becoming an Affiliate, duly authorized, executed and
delivered to the Trustee, a counterpart of the Guaranty or a document evidencing
its agreement to be bound by the Guaranty which is the legal, valid, binding and
enforceable obligation of such Affiliate in accordance with its terms.
(j) There shall occur a foreclosure with respect to any of the
following mortgages, as amended and supplemented:
(i) Mortgage dated March 15, 1984 between the Company and the
City of Gloucester City,
(ii) Mortgage dated April 18, 1984 between the Company and the
City of Gloucester City,
(iii) Mortgage dated August 22, 1984 between the Company and the
City of Gloucester City,
(iv) Mortgage and Security Agreement dated as of August 1, 1986
between the Company and Bankers Trust Company, as trustee,
(v) Mortgage and Security Agreement dated as of December 1, 1986
between the Company and Bankers Trust Company, as trustee,
(vi) The Series G Mortgage,
47
(vii) The Series H Mortgage, or
(viii) The 1992 Refunding Series Mortgage.
(k) Failure by the Company or any Guarantor to observe and perform the
covenant set forth in Section 1.4(d) hereof.
Section 6.2 Trustee's Remedies Upon Event of Default. Whenever any
Event of Default referred to in Section 6.1 hereof shall have happened and be
continuing, the Trustee may (subject in the case of the Trustee to its mandatory
obligations upon the occurrence of certain Events of Default) take one or any
combination of the following remedial steps:
(a) If the Trustee has declared the Bonds immediately due and payable
pursuant to Section 8.02 of the Indenture, by written notice to the Company,
declare an amount equal to all amounts then due and payable on the Bonds,
whether by acceleration of maturity (as provided in the Indenture) or otherwise,
to be immediately due and payable as liquidated damages under this Agreement and
not as a penalty, whereupon the same shall become immediately due and payable;
(b) Have reasonable access to and inspect, examine and make copies of
the books and records and any and all accounts, data and income tax and other
tax returns of the Company and the Guarantors during regular business hours of
the Company and the Guarantors if reasonably necessary in the opinion of the
Trustee; or
(c) Take whatever action at law or in equity that may appear necessary
or desirable to collect the amounts then due and thereafter to become due, or to
enforce performance and observance of any obligation, agreement or covenant of
the Company or the Guarantors under this Agreement, the Indenture, the Guaranty
and the other Bond Documents; or
(d) Exercise any and all rights and remedies of a creditor or secured
party under the Uniform Commercial Code or other applicable law.
Any amounts collected pursuant to action taken under this Section shall
be paid into the Bond Fund and applied in accordance with the provisions of the
Indenture. The rights specified in this Section 6.2 are in addition to, and not
in limitation of, any other obligations of the Company which may arise upon a
default or acceleration in respect of the Bonds, including without limitation,
under Section 4.3 hereof.
48
Section 6.3 (INTENTIONALLY OMITTED)
Section 6.4 Specific Performance. In addition to the rights and
remedies provided for in Section 6.2 hereof, if the Company or any Guarantor
commits a breach or threatens to commit a breach of any of the provisions of
this Agreement, the Indenture or the Bond Documents, the Authority and the
Trustee shall each have the right, without posting bond or other security, to
seek injunctive relief or specific performance, it being acknowledged and agreed
that any such breach or threatened breach will cause irreparable injury to the
Authority and the Trustee and that money damages will not provide an adequate
remedy.
Any amounts collected pursuant to action taken under this Section shall
be paid into the Bond Fund and applied in accordance with the provisions of the
Indenture.
Section 6.5 No Remedy Exclusive. Subject to Section 9.18 of the
Indenture, no remedy herein conferred upon or reserved to the Authority or the
Trustee is intended to be exclusive of any other available remedy or remedies,
but each and every such remedy shall be cumulative and shall be in addition to
every other remedy given under this Agreement or now or hereafter existing at
law or in equity. No delay or omission to exercise any right or power accruing
upon 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. In order to entitle
the Authority or the Trustee to exercise any remedy reserved to it in this
Article, it shall not be necessary to give any notice, other than such notice as
may be required in this Article. Such rights and remedies as are given the
Authority hereunder shall also extend to the Trustee, and the Trustee and the
Owners of the Bonds, subject to the provisions of the Indenture, shall be
entitled to the benefit of all covenants and agreements herein contained.
Section 6.6 Agreement to Pay Attorneys' Fees and Expenses. In the event
the Company or any Guarantor should default under any of the provisions of this
Agreement and the Authority or the Trustee should employ attorneys or incur
other expenses for the collection of payments required hereunder or the
enforcement of performance or observance of any obligations or agreement on the
part of the Company or any Guarantor herein contained, the Company and each
Guarantor agrees that it will on demand therefor pay to the Authority the
reasonable fee of such attorneys and such other expenses so incurred by the
Authority.
Section 6.7 No Additional Waiver Implied by One Waiver. In the event
any agreement contained in this Agreement should be breached by either party and
thereafter waived by the
49
other party, such waiver shall be limited to the particular breach so waived and
shall not be deemed to waive any other breach hereunder.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 Limitation of Liability of the Authority. In the event of
any default by the Authority hereunder, and notwithstanding any provision or
obligation to the contrary hereinbefore or hereinafter set forth, the liability
of the Authority, its incorporator, officers, members, agents and employees,
past, present or future, shall be limited to its interest in the Project
Facilities, the improvements thereon, the rents, issues and profits therefrom,
and the lien of any judgment shall be restricted thereto. The Authority, its
incorporator, officers, members, agents and employees, past, present or future,
do not assume general liability nor specific liability for the repayment of any
mortgage or other loan, or for the costs, fees, penalties, taxes, interest,
commissions, charges, insurance or any other payments therein recited or therein
set forth, or incurred in any way in connection therewith. Other than as set
forth hereinabove in this Section 7.1, there shall be no other recourse for
damages of any kind or nature by the Company or any other entity against the
Authority, its incorporator, officers, members, agents and employees, past,
present or future, or any of the property or other assets now or hereafter owned
by it or them, either directly or indirectly; and all such recourse or liability
is hereby expressly waived and released as a condition of and in consideration
for execution and delivery of this Agreement by the Authority.
SECTION 7.2 No Recourse as to the Authority. No recourse under or upon
any obligation, covenant or agreement contained herein or in any Bond shall be
had against the Authority or any member, officer, employee or agent, past,
present or future, of the Authority or of any successor of the Authority under
this Agreement, any other agreement, any rule of law, statute or constitutional
provision, or by enforcement of any assessment or by any legal or equitable
proceeding or otherwise, it expressly being agreed and understood that the
obligations of the Authority hereunder, and under the Bonds and elsewhere, are
solely corporate obligations of the Authority to the extent specifically limited
in the Act and that no personal liability whatsoever shall attach to or shall be
incurred by the Authority or such members, officers, employees or agents, past,
present or future, of the Authority or of any successor of the Authority, or any
of them, because of such indebtedness or by reason of any obligation, covenant
or agreement contained herein, in the Bonds or implied therefrom.
50
SECTION 7.3 Notices. Notice hereunder shall be effective upon receipt
and shall be given by personal service or by certified mail, return receipt
requested, to:
The Authority - PHILADELPHIA AUTHORITY FOR INDUSTRIAL
DEVELOPMENT
000 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Chairman
The Company or - REFRIGERATED ENTERPRISES, INC.
any Guarantor 000 Xxxxx Xxxxxxxx
Xxxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Xxxx X. Xxxxx, Esquire
The Trustee - FIDELITY BANK, NATIONAL ASSOCIATION
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Corporate Trust Administration
The Purchaser - FIDELITY SPARTAN PENNSYLVANIA MUNICIPAL
PORTFOLIO
c/o Fidelity Management and Research
Company, Inc.
00 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxxx
SECTION 7.4 Severability. If any provision hereof is found by a court
of competent jurisdiction to be prohibited or unenforceable, it shall be
ineffective only to the extent of such prohibition or unenforceability, and such
prohibition or unenforceability shall not invalidate the balance of such
provision to the extent it is not prohibited or unenforceable or invalidate the
other provisions hereof, all of which shall be liberally construed in favor of
the Authority or its assignee in order to effect the provisions of this
Agreement.
SECTION 7.5 Applicable Law. This Agreement shall be deemed to be a
contract made in the Commonwealth and governed by the domestic internal law (but
not the law of conflict of laws) of the Commonwealth.
SECTION 7.6 Assignment. The Company shall not assign this Agreement or
any interest of the company herein, either in whole or in part, except in
accordance with this Agreement and with the prior written approvals of the
Authority and the Trustee and provided further that (i) the assignee assumes in
writing all of the obligations of the Company hereunder and is a corporation
51
organized under the laws of one of the states, or of the United States of
America, or of the District of Columbia, and is duly qualified to do business in
the Commonwealth and (ii) such assignment shall not result in a violation of
Section 5.12 hereof or any other provision of this Agreement.
SECTION 7.7 Amendments.
(a) This Agreement may not be amended except by an instrument in
writing signed by the parties and, if such amendment occurs after the issuance
of any of the Bonds, consented to by the Trustee.
(b) Notwithstanding Section 7.7(a) hereof, this Agreement shall be
amended by such additions, deletions or modifications that may be necessary to
assure compliance with Section 144(a)(4) of the Code relating to qualified small
issue obligations, Section 147 of the Code relating to certain requirements
applicable to private activity bonds, Section 148(d)(3) of the Code relating to
the 150% limitation on investments or Section 148(f) of the Code relating to the
required rebate to the United States of "excess investment earnings" (as such
term is defined in the Code) or otherwise as may be necessary to assure the
exemptions from federal income taxation of the interest on the Bonds. A copy of
any such amendment shall be given to the Trustee.
SECTION 7.8 Term of Agreement. This Agreement and the respective
obligations of the parties hereto shall be in full force and effect from the
date hereof until all principal of, premium, if any, and interest on the Bonds
shall have been paid or provision for such payment shall have been made pursuant
to the terms and provisions of the Indenture.
SECTION 7.9 No Warranty of Condition or Suitability by the Authority.
The Authority makes no warranty, either express or implied, as to the condition
of the Project Facilities or any part thereof or that they will be suitable for
the Company's purposes or needs. The Company acknowledges and agrees that the
Authority is not a dealer in property of such kind, and that the Authority has
not made, and does not hereby make any representation or warranty or covenant,
except as otherwise set forth herein, with respect to the condition or
suitability of the Project Facilities in any respect or in connection with or
for the purposes and uses of the Company or its tenants, or any representation
or warranty or covenant of any kind or character, express or implied, with
respect thereto.
SECTION 7.10 Adjustments. The Company agrees to pay all charges and
costs that are required and whenever required in connection with the Authority's
acquisition of the Project Facilities and in connection with the conveyance of
the Project Facilities from the Authority to the Company. The Company agrees
that the Authority shall not be responsible for any inaccuracies
52
in any settlement sheet in connection with the foregoing and shall hold the
Authority harmless from any liabilities or damages arising therefrom.
SECTION 7.11 Zoning/Subdivision. The Authority makes no representation
or warranty that it has satisfied itself regarding the validity of any
subdivision of the Project Facilities, the lawful uses to which the Project
Facilities may be put and the legality of the use of the Project Facilities
intended by the Company and the Company waives any right or claim it may have
against the Authority regarding representations concerning the Project
Facilities.
SECTION 7.12 Company's Federal Income Taxation. Consistent with the
terms and conditions of this Agreement, the Authority agrees that the Company
shall be deemed the "owner" of the Project Facilities for federal income tax
purposes and further agrees to cooperate fully with the Company (at the
Company's sole cost and expense) in obtaining favorable federal income tax
treatment of this sale and the Project Facilities subject hereto. For such
purposes, the parties acknowledge their intent to create a valid installment
purchase agreement herein, with legal title to the Project Facilities held by
the Authority prior to transfer (as provided herein) of such title to the
Company upon completion of its obligations hereunder.
SECTION 7.13 Amounts Remaining in Bond Fund. It is agreed by the
parties hereto that any amounts remaining in the Bond Fund established under the
Indenture upon expiration or sooner termination of this Agreement after payment
in full of the Bonds (or provision for payment thereof having been made in
accordance with the provisions of the Indenture) and of the fees, charges and
expenses of the Trustee and the Authority in accordance with the Indenture,
shall, be paid to the Company by the Trustee as overpayment of the Purchase
Price.
SECTION 7.14 Survival of Covenants, Conditions and Representations. All
covenants, conditions and representations of the Company contained herein that,
by nature, imply or expressly involve performance in any particular manner after
the delivery of the Authority's deed or that cannot be ascertained to have been
performed until after the said delivery, shall survive said delivery. Without
intending to limit the generality of the foregoing, the Company's covenant to
indemnify the Authority and the Trustee, as set forth in Sections 2.3 and 5.6
hereof, shall survive settlement under Section 4.7 hereof or any termination of
this Agreement.
SECTION 7.15 Agreement To Constitute Security Agreement. For purposes
of the Pennsylvania Uniform Commercial Code, this Agreement is hereby declared
to be a "security agreement" and the phrase "security interest" when used herein
shall have the meaning given thereto in the Pennsylvania Uniform Commercial
Code. The Company shall execute and file or cause to
53
be filed all such financing statements as the Trustee may reasonably require to
perfect and keep perfected all security interests herein granted.
SECTION 7.16 Headings. The captions or headings in this Agreement are
for convenience of reference only and shall not control or affect the meaning or
construction of any provision hereof.
SECTION 7.17 Multiple Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall be regarded for all purposes as an
original and such counterparts shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound,
have caused this Agreement to be executed and delivered as of the date first
written above.
PHILADELPHIA AUTHORITY FOR
INDUSTRIAL DEVELOPMENT
By [ILLEGIBLE]
---------------------------------
Chair
Attest: [ILLEGIBLE]
----------------------------
Secretary
(SEAL)
REFRIGERATED ENTERPRISES, INC
By /s/ Xxxxxxx Xxxxxx
----------------------------
Vice President
Attest: Xxxx Xxxxx
-------------------------
(Assistant) Secretary
(SEAL)
XXXX HAULING AND WAREHOUSING
SYSTEM, INC.
/s/ Xxxx Xxxxx By: /s/ Xxxxxxx Xxxxxx
----------------------- ----------------------------------
Xxxx Xxxxx, Secretary Xxxxxxx Xxxxxx,
Vice President
ATTEST: X.X. XXXXXXXX CO.
Xxxx Xxxxx By: /s/ Xxxxxxx Xxxxxx
------------------------ ----------------------
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