EXHIBIT 10.83
Loan Agreement
dated as of April 1, 1994
between
Grapevine Industrial Development Corporation
and
Trencor Jetco, Inc.
$8,000,000
Industrial Development Revenue Bonds, Series 1994
(Trencor Jetco, Inc. Project)
Loan Agreement dated as of April 1, 1994, between
Grapevine Industrial Development
Corporation (Issuer), a Texas non-profit corporation and
instrumentality of the City of Grapevine, Texas (the "Unit"), and Trencor
Jetco, Inc., a Texas corporation (the Company).
WHEREAS, the Issuer is a constituted authority and
instrumentality acting on behalf of the Unit and has been organized pursuant
to the Development Corporation Act of 1979, Article 5190.6
Tex. Rev. Civ. Stat. ann, as amended (the "Act"); and
WHEREAS, the Issuer is authorized under the Act to issue
and sell its bonds and to lend the proceeds thereof to assist the Unit in its
economic development and to carry out the public purposes
of the Act, including, among others, the financing of manufacturing and
industrial facilities; and
WHEREAS, the Company has requested financial
assistance from the Issuer to finance a project (the "Project") as described in
Exhibit A hereto; and
WHEREAS, the Issuer is authorized by the Act to finance
the Project for the Company by issuing its bonds and loaning the proceeds
thereof to the Company; and
WHEREAS, the Issuer intends to issue its industrial
development revenue bonds, to be known generally as "Grapevine Industrial
Development Corporation Industrial Development Revenue Bonds,
Series 1994 (Trencor Jetco, Inc. Project)" (the "Bonds"), the
proceeds of which will be utilized by the Company to pay costs of the Project;
and
WHEREAS, the Bonds will be issued under the terms of an
Indenture of Trust (the "Indenture") of even date herewith between the Issuer
and Bank One, Texas, NA, as trustee (the "Trustee"); and
Accordingly, the Issuer and the Company hereby agree as follows:
Article I
Definitions
For all purposes of this Agreement, unless the context
clearly requires otherwise, all terms defined in Article I of the Indenture
have the same meanings in this Agreement.
Article II
Representations
Section 2.1. Representations of Issuer. The Issuer
represents as follows:
(a) The Issuer (1) is duly organized and existing under
the laws of the State, (2) has full power and authority to enter into the
transactions contemplated by this Agreement, the Tax
Agreement, the Offering Agreement, and the Indenture and to carry
out its obligations under this Agreement, the Tax Agreement, the Offering
Agreement, and the Indenture, including the issuance of the Bonds, (3) is not
in default under any provisions of the laws of the State, and (4) by proper
corporate action has duly authorized the execution and delivery of
this Agreement, the Bonds, the Tax Agreement, the Offering Agreement, and
the Indenture.
(b) Under existing statutes and decisions, no taxes on
income or profits are imposed on the Issuer. The Issuer will not knowingly
take or omit to take any action reasonably within its control which action or
omission would impair the exclusion of interest paid on the Bonds from the
federal gross income of the owners of the Bonds.
(c) Neither the execution and delivery by the Issuer of
this Agreement, the Indenture, the Tax Agreement, or the Offering
Agreement nor the consummation by the Issuer of the transactions
contemplated hereby or thereby conflicts with, will result in a
breach of or default under or will (except with respect to the lien of the
Indenture) result in the imposition of any lien on any property
of the Issuer pursuant to the terms, conditions or provisions of any
statute, order, rule, regulation, agreement or instrument to which the Issuer
is a party or by which it is bound.
(d) Each of this Agreement, the Tax Agreement, the
Offering Agreement, and the Indenture has been duly authorized, executed,
and delivered by the Issuer and each constitutes the legal, valid, and binding
obligation of the Issuer enforceable against the Issuer in accordance with its
terms.
(e) There is no litigation or proceeding pending, or to
the knowledge of the Issuer threatened, against the Issuer, or to the
knowledge of the Issuer affecting it, which would adversely
affect the validity of this Agreement, the Indenture, the Tax
Agreement, the Offering Agreement, or the Bonds or the ability of the Issuer
to comply with its obligations under this Agreement, the Indenture, the Tax
Agreement, the Offering Agreement, or the Bonds.
(f) The Issuer is not in default under any of the
provisions of the laws of the State which would affect its existence or its
powers referred to in the preceding subsection (a).
(g) The Issuer hereby finds and determines that, based
on representations of the Company,
all requirements of the Act have been complied with and that the
financing of the Project through the issuance of the Bonds will further the
public purposes of the Act.
(h) No member, director, officer, or official of the
Issuer has any interest (financial, employment or other) in the Company or
the transactions contemplated by this Agreement.
(i) The Issuer will apply the proceeds from the sale of
the Bonds as specified in the Indenture and this Agreement. So long as any
of the Bonds remain outstanding and except as may
be authorized by the Indenture, the Issuer will not issue or sell any
bonds or obligations, other than the Bonds, the principal of or premium, if
any, or interest on which will be payable from the property
described in the granting clause of the Indenture.
(j) The Project is wholly located within the corporate
limits of the Unit.
(k) The representations and warranties of the Issuer
contained in the Offering Agreement are incorporated by reference herein and
are true and correct in all material respects on the Closing Date.
Section 2.2. Representations of Company. The Company
represents as follows:
(a) The Company (1) is a corporation duly
incorporated and in good standing in the State of Texas, (2) is duly qualified
to transact business and in good standing in the State, (3) is not in
violation of any provision of its certificate of incorporation or its
by-laws, (4) has full corporate power to own its properties and conduct its
business, (5) has full legal right, power, and authority to enter
into this Agreement, the Reimbursement Agreement, the Tax
Agreement, the Remarketing Agreement, and the Offering Agreement and
consummate all transactions contemplated by this
Agreement, the Reimbursement Agreement, the Tax Agreement,
the Remarketing Agreement, and the Offering Agreement and (6) by proper
corporate action has duly authorized the execution and
delivery of this Agreement, the Reimbursement Agreement, the Tax
Agreement, the Remarketing Agreement, and the Offering Agreement .
(b) Neither the execution and delivery by the Company
of this Agreement, the Reimbursement Agreement, the Tax Agreement, the
Remarketing Agreement, or the Offering Agreement nor the consummation
by the Company of the transactions contemplated hereby or
thereby conflicts with, will result in a breach of or default under, or
will result in the imposition of any lien on any property of the Company
pursuant to the certificate of incorporation or by-laws of
the Company or the terms, conditions or provisions of any statute,
order, rule, regulation, agreement, or instrument to which the Company is a
party or by which it is bound.
(c) This Agreement, the Reimbursement Agreement,
the Tax Agreement, the Remarketing Agreement, and the Offering
Agreement have been duly authorized, executed, and delivered by the
Company and constitute the legal, valid, and binding obligations of
the Company in accordance with its terms.
(d) There is no litigation or proceeding pending, or to
the knowledge of the Company threatened, against the Company which could
adversely affect the validity of this Agreement, the
Reimbursement Agreement, the Tax Agreement, the Remarketing
Agreement, or the Offering Agreement or the ability of the Company to
comply with its obligations under this Agreement, the
Reimbursement Agreement, the Tax Agreement, the Remarketing
Agreement, or the Offering Agreement.
(e) The information contained in the Tax Agreement,
the Project Certificate, and all other written information relating to the
Project provided by the Company to the Issuer and Bond Counsel
for the Bonds is true and correct.
(f) The Project is wholly located within the corporate
limits of the Unit.
(g) The representations and warranties of the
Company contained in the Offering Agreement are incorporated by reference
herein and are true and correct in all material respects on the Closing Date.
(h) The Company agrees that at all times during the
terms of this Agreement it will operate the Project in compliance with the
Act.
(i) The Project is of the type authorized and permitted
by the Act.
(j) The Company will not take or permit to be taken
any action which would have the effect, directly or indirectly, of subjecting
interest on any of the Bonds to federal income taxation.
(k) The Project complies with all presently applicable
building and zoning ordinances, or is permitted as a special exception under
such building and zoning ordinances.
(l) The Company agrees to cooperate with the Issuer
in the performance of the Issuer's obligations under the Indenture.
(m) The Company will comply in all material respects
with the requirements of all federal, state and local environmental and health
and safety laws, rules, regulations, and orders applicable to
or pertaining to the Project.
(n) The Company hereby agrees (a) to take or cause to
be taken all actions necessary or appropriate in order to fully comply with
Section 5.10 of the Indenture and (b) if required to do so
under Section 5.10 of the Indenture, to designate and retain, at the
Company's expense, a certified public accountant, financial analyst, or Bond
Counsel, or any firm of the foregoing, experienced in
making the arbitrage and rebate calculations required under the
Code (a "Rebate Analyst") acceptable to the Trustee for the purpose of
making any and all calculations required under Section 5.10 of the
Indenture. Such calculations, if required, shall be made in the
manner and at such times as specified in Section 5.10 of the Indenture. The
Company hereby agrees to cause the Rebate Analyst to provide such
calculations to the Trustee at such times and with such directions as are
necessary to fully comply with the arbitrage and rebate requirements set forth
in Section 5.10 of the Indenture and fully to comply with section 148 of the
Code.
The Company specifically covenants to comply with the
covenants and procedures set forth in Section 5.10 of the Indenture and to
deposit in the Rebate Fund such amounts as may be necessary to increase the
amount in deposit in the Rebate Fund to the rebate requirement at such
times as are required under Section 5.10 of the Indenture.
Article III
Construction and Operation of the Project
Section 3.1. Construction of Project. The Company hereby
agrees to acquire and construct the Project in accordance with this Article
III, substantially in accordance with the plans and specifications therefor
prepared by it including any and all supplements, amendments, and additions
(or deletions) thereto (or therefrom); provided, however, that such
other facilities and property contemplated by such supplements, amendments,
additions, or deletions to the plans and specifications shall not materially
impair the effective use or character of the Project as contemplated
by this Agreement or disqualify the Project as a project within the
meaning of the Act, or result in the interest on any Bonds becoming
includable in the gross income of the owners of the Bonds for
federal income tax purposes.
In the event that Exhibit A hereto is to be amended or
supplemented in accordance with the provisions of Section 9.01 of the
Indenture, the Issuer will enter into, and will instruct the Trustee
to consent to, an amendment of or supplement to Exhibit A hereto
upon receipt of:
(i) a copy of the proposed form of amendment or
supplement to Exhibit A hereto; and
(ii) the written approving opinion of Bond Counsel to
the effect that such amendment or supplement will not have the effect of
disqualifying the Project as a project within the meaning of the Act or result
in the interest on the Bonds becoming includable in the gross income of the
owners of the Bonds for federal income tax purposes.
Section 3.2. Operation of Project. The Company will not
make any material change in its use of the Project from that described in
Exhibit A unless the Trustee and the Issuer receive an opinion of Bond
Counsel to the effect that such change will not impair the exclusion of
interest on the Bonds from the gross income of owners of the Bonds for federal
income tax purposes.
So long as the Company operates the Project, it will operate
it as a "project" as contemplated by the Act and will operate the Project in
such a manner such that it will not impair the exclusion of interest on the
Bonds from gross income of the owners of the Bonds for federal income tax
purposes.
Upon a sale of all or any portion of the Company"s interest
in the Project, the Company will obtain the agreement of the purchaser of the
Project or interest therein to comply with the provisions of this Section 3.2,
regardless of whether such purchaser assumes the obligations of the Company
under this Agreement generally.
Section 3.3. Establishment of Completion Date; Obligation
of Company to Complete. The Completion Date shall be evidenced to the
Trustee by a certificate signed by the Authorized Company Representative
stating the Completion Date and the Cost of the Project and stating that
(i) construction of the Project has been completed substantially in
accordance with the plans, specifications, and work orders therefor and all
labor, services, materials, and supplies used in such construction have been
paid for (other than costs and expenses for which payment has been
withheld), (ii) all other facilities necessary in connection with the
Project have been constructed, acquired, and installed in accordance with the
plans, specifications, and work orders therefor and all
costs and expenses incurred in connection therewith (other than
costs and expenses for which payment has been withheld) have been paid,
and (iii) at least 95% of the costs previously disbursed
and to be disbursed from the Project Account (including moneys to
be disbursed in accordance with the next succeeding paragraph of this Section
3.3) are Qualified Costs of Construction, and all of such
costs are costs permitted by the Act. The Company may withhold
payment and direct the Trustee to retain in the Project Account an amount
sufficient to pay any Cost of the Project which has been incurred; such
retained moneys shall be disbursed after the Completion Date in the manner
provided in Section 4.2 thereof. If the Company withholds the payment of
any such cost or expense of the Project the certificate shall state the amount
of such withholding and the reason therefor. Notwithstanding the foregoing,
such certificate may state that it is given without prejudice to any
rights against third parties which exist at the date of such certificate
or which may subsequently come into being. It shall be the duty of the
Company to cause such certificate to be furnished to the
Trustee within 60 days after the Project shall have been completed.
Moneys (including investment proceeds) remaining in the
Project Account on the Completion Date may be used, at the direction of the
Authorized Company Representative, to the extent indicated, for one or more
of the following purposes:
(1) for the payment, in accordance with the provisions
of this Agreement, of any Cost of the Project not theretofore paid,
as specified in the above-mentioned completion certificate; or
(2) for transfer to the Bond Fund, but only if, and to
the extent that, the Trustee has been furnished with an opinion of Bond
Counsel to the effect that such transfer is lawful under the Act and does not
adversely affect the exclusion from federal gross income of interest
on any of the Bonds.
Any moneys (including investment proceeds) remaining in
the Project Account on the Completion Date and not set aside for the payment
of Costs of the Project as specified in (1) above or transferred to the Bond
Fund pursuant to (2) above shall on such date be deposited by the Trustee in a
separate escrow account and used to pay all or part of the redemption price of
Bonds at the earliest redemption date or dates on which Bonds may be
redeemed without the payment of a premium or, at the option of the
Company, at an earlier redemption date or dates; provided that,
until so used such moneys may also be used, at the direction of the
Authorized Company Representative, for one or more of the following
purposes:
(a) to pay all or part of the price of purchasing Bonds
on tender, in the open market or at private sale, at a purchase price not in
excess of 100% of the principal amount of such Bonds plus accrued interest to
the date of such purchase for the purpose of cancellation;
(b) for the payment of qualifying costs of any
additional improvements to be installed or constructed in connection with the
Project; provided that such use of funds is permitted under the Act; or
(c) for any other purpose permitted by the Act; provided, that
the earnings on the investment of the moneys on deposit in such escrow
account shall be transferred on each interest payment date on the Bonds to the
Bond Fund and shall be used to pay interest on the Bonds coming due on
each interest payment date on the Bonds (or to reimburse the Bank for draws
under the Letter of Credit to pay interest on the Bonds), but no moneys on
deposit in such escrow account may be used for any of the purposes
specified in this paragraph (including the redemption of Bonds) unless and
until the Trustee has been furnished with an opinion of Bond Counsel to the
effect that such use is lawful under the Act and does not adversely affect the
exclusion from gross income for federal income tax purposes of the
interest on the Bonds; and provided further that, until used for one or more of
the foregoing purposes, moneys on deposit in such escrow account may be
invested in investments authorized by Section 4.3 of this Agreement, but
may not be invested to produce a yield on such moneys (computed
from the Completion Date and taking into account any investment of uch
moneys during the period from the Completion Date until
such moneys were deposited in such escrow account) greater than
the yield on the Bonds from which such proceeds were derived, all as such
terms are used in and determined in accordance with section
148 of the Code and regulations promulgated thereunder.
In the event the moneys in the Project Account available for
payment of the Costs of the Project should not be sufficient to pay the costs
therefor, in full, the Company agrees to pay directly
or to deposit in the Project Account moneys sufficient to pay, the
costs of completing the Project as may be in excess of the moneys available
therefor in the Project Account. The Issuer does not make any warranty,
either express or implied, that the moneys which will be paid into the Project
Account and which, under the provisions of this Agreement, will be
available for payment of the Costs of the Project, will be sufficient to pay
all he costs which will be incurred in that connection. The Company
agrees that if after exhaustion of the moneys in the Project Account
the Company should pay, or deposit moneys in the Project Account for the
payment of any portion of the said costs of the Project
pursuant to the provisions of this Section it shall not be entitled to
any reimbursement therefor from the Issuer or from the Trustee or from the
owners of any of the bonds, nor shall it be entitled to any
diminution of the amounts payable under this Agreement.
Article IV
Issuance of Bonds; Deposit of Proceeds; Disbursements
Section 4.1. Issuance of Bonds; Deposit of Proceeds. In
order to finance the Project, the Issuer will issue, sell, and deliver the
Bonds to the initial purchasers thereof and deposit the proceeds of the Bonds
with the Trustee as provided in Section 5.01 of the Indenture. Such deposit
shall constitute a loan to the Company under this Agreement. The Issuer
authorizes the Trustee to disburse the proceeds of the Bonds in accordance
with Section 3.01 of the Indenture. The Company hereby approves the
Indenture and the issuance by the Issuer of the Bonds.
Section 4.2. Disbursements from the Project Account. The
Issuer authorizes and directs the Trustee upon compliance with Section 5.11
of the Indenture to disburse the moneys in the Project Account to or on behalf
of the Company for the following purposes:
(a) Payment to the Company of such amounts, if any,
as shall be necessary to reimburse the Company for advances and payments
made by it prior to or after the delivery of the Bonds for expenditures in
connection with the preparation of plans and specifications for the Project
(including any preliminary study or planning of the Project or any aspect
thereof) and the acquisition, construction, and rehabilitation of
the Project.
(b) Payment of the initial or acceptance fee of the
Trustee, fees of the Trustee and paying agent incurred during the
Construction Period, fees of the Remarketing Agent for the
placement of the Bonds, legal, financial, and accounting fees and
expenses, printing and engraving costs incurred in connection with the
authorization, sale, and issuance of the Bonds, the execution and filing of the
Indenture and the preparation of all other documents in connection therewith,
and payment of all fees, costs, and expenses for the preparation of this
Agreement, the Indenture, the Bonds, and all related agreements
and instruments.
(c) Payment for labor, services, materials, and supplies
used or furnished in the acquisition, construction, and rehabilitation of the
Project, all as provided in the plans, specifications, and work orders
therefore, payment for the cost of the construction, acquisition,
and installation of utility services or other facilities, and
acquisition and installation of all real and personal property deemed
necessary in connection with the Project and payment for the
miscellaneous capitalized expenditures incidental to any of the
foregoing items.
(d) Payment of the fees, if any, for architectural,
engineering, legal, printing, underwriting, and supervisory services with
respect to the Project.
(e) To the extent not paid by a contractor for construction with
respect to any part of the Project, payment of the premiums on all insurance
required to be taken out and maintained during the Construction Period.
(f) Payment of the taxes, assessments, and other charges, if
any, that may become payable during the Construction Period with respect to
the Project, or reimbursement thereof if paid by the Company.
(b) Payment of expenses incurred in seeking to enforce
any remedy against any contractor or subcontractor in respect of any default
under a contract relating to the Project.
(h) Interest on the Bonds during the Construction
Period (or reimbursement of the Bank for draws under the Letter of Credit to
pay such interest).
(i) Fees of the Bank during the Construction Period
for the issuance of the Letter of Credit.
(j) Payment of any other costs permitted by the Act
which will not affect the exemption from federal income taxes of interest on
the Bonds.
All moneys remaining in the Project Account after the
Completion Date and after payment or provision for payment of all other
items provided for in the preceding subsections (a) to (j),
inclusive, of this Section, shall at the direction of the Company be
used in accordance with Section 3.3 hereof.
Each of the payments referred to in this Section shall be
made upon receipt by the Trustee of a written order complying with the form
set forth in Section 5.11 of the Indenture signed by the Authorized Company
Representative.
The Company covenants and agrees that it will cause at
least 95% of the moneys in the Bond Proceeds Fund (including any earnings
on investment of such moneys) to be disbursed for Qualified
Costs of Construction and all of such proceeds to be disbursed for
costs permitted by the Act. The Company further covenants that no more
than $160,000 of the moneys in the Bond Proceeds Fund
will be disbursed for payment of issuance costs within the meaning
of the Code.
Section 4.3. Investment of Moneys. Any moneys held as a
part of the Bond Fund or the Project Account shall be invested or reinvested
by the Trustee, at the direction of the Authorized Company Representative as
provided in Section 5.05 of the Indenture and in the Tax Agreement,
to the extent permitted by law in Qualified Investments. Any such
investment may be purchased at the offering or market price thereof at the
time of such purchase. The Trustee may make any and all such investments
through its own bond department.
The investments so purchased shall be held by the Trustee
and shall be deemed at all times a part of the fund for which they were made
and the interest accruing thereon and any profit realized
therefrom shall be credited to such fund and any net losses resulting
from such investment shall be charged to such fund and paid by the
Company.
Article V
Repayment
Section 5.1. Repayment. (a) Principal, Premium, and
Interest. The Company will repay the loan made to it under Article IV as
follows: On or before 11:00 a.m. (local time at the principal
corporate office of the Trustee) on each day on which any payment
of principal of, premium, if any, or interest on the Bonds shall become due
(whether on an interest payment date, at maturity, or
upon redemption or acceleration or otherwise), the Company will
pay, in immediately available funds, an amount which, together with other
moneys held by the Trustee in the Bond Fund and available
therefor (including, without limitation, proceeds of draws under the
Letter of Credit), will enable the Trustee to make such payment in full in a
timely manner. If the Company defaults in any payment
required by this Section, the Company will pay interest (to the
extent allowed by law) on such amount until paid at the rate provided for in
the Bonds.
(b) Purchase Price. The Company agrees to pay to the
Tender Agent (or if the Bonds are in the Book Entry System, the Trustee)
amounts sufficient to pay the purchase price of Bonds on each optional or
mandatory tender date pursuant to Section 2.03 or 2.04 of the Indenture,
provided the Company shall receive a credit for the amount of remarketing
or Letter of Credit proceeds available for such purpose under the Indenture on
each such date.
(c) Company to Make up Deficiencies. In furtherance
of the foregoing, so long as any Bonds are outstanding the Company will pay
all amounts required to prevent any deficiency or default in any payment of
the principal or purchase price of, premium, if any, or interest on the Bonds,
including any deficiency caused by an act or failure to act by the
Trustee, the Company, the Issuer, or any other person.
(d) Assignment. All amounts payable under this
Section by the Company are assigned by the Issuer to the Trustee pursuant to
the Indenture for the benefit of the Bondholders. The Company consents to
such assignment. Accordingly, the Company will pay directly to the Trustee
(or in the case of the purchase price of Bonds when the Bonds are
not in a Book Entry System, to the Tender Agent) at its corporate trust office
all payments payable by the Company pursuant to this Section.
(e) Payments under Reimbursement Agreement. The
Company will pay or cause to be paid all amounts owed to the Bank under the
Reimbursement Agreement directly to the Bank when due and no such
payment shall be made to the Trustee.
Section 5.2. Additional Payments. The Company will also
pay the following within 30 days after receipt of a bill therefor:
(a) The fees and expenses of the Issuer in connection
with this Agreement and the Bonds, such fees and expenses to be paid
directly to the Issuer.
(b) (i) The fees and expenses of the Trustee, the
Tender Agent, and all other fiduciaries and agents serving under the
Indenture (including any expenses in connection with any redemption
of the Bonds), and (ii) all fees and expenses, including attorneys"
fees, of the Trustee for any extraordinary services rendered by it under the
Indenture. All such fees and expenses are to be paid directly to the Trustee
or other fiduciary or agent for its own account as and when such fees and
expenses become due and payable.
(c) The fees and expenses of the Remarketing Agent
in accordance with the terms of the Remarketing Agreement.
The Company agrees to pay all Project costs not paid or
reimbursed with Bond proceeds. The Company has not and will not maintain
that it is entitled to an exemption from State sales taxes on personal property
acquired in conjunction with the Project.
Section 5.3. Prepayments. The Company may prepay to
the Trustee all or any part of the amounts payable under Section 5.1(a) at any
time, provided that the Bonds shall be subject to redemption solely as
provided in the Indenture and the Bonds. A prepayment shall not relieve the
Company of its obligations under this Agreement until all the
Bonds have been paid or provision for the payment of all the Bonds has been
made in accordance with the Indenture. In the event of a mandatory
redemption of the Bonds, the Company will prepay all amounts necessary for
such redemption.
Section 5.4. Obligations of Company Unconditional.
The obligations of the Company to make the payments required by Sections
5.1 and 5.3 and to perform its other agreements contained in this
Agreement shall be absolute and unconditional. Until the principal
of and interest on the Bonds shall have been fully paid or provision for the
payment of the Bonds made in accordance with the
Indenture, the Company (a) will not suspend or discontinue any
payments provided for in Section 5.1 hereof, (b) will perform all its other
agreements in this Agreement and (c) will not terminate this
Agreement for any cause including any acts or circumstances that
may constitute failure of consideration, destruction of or damage to the
Project, commercial frustration of purpose, any change
in the laws of the United States or of the State or any political
subdivision of either, or any failure of the Issuer to perform any of its
agreements, whether express or implied, or any duty, liability, or
obligation arising from or connected with this Agreement.
Section 5.5. Letter of Credit. The Company shall provide
for the delivery of the initial Letter of Credit to the Trustee simultaneously
with the original issuance and delivery of the Bonds. The Company may
provide for the delivery of an Alternate Credit Facility in substitution or
replacement for the then current Letter of Credit but only in accordance with
Section 5.03 of the Indenture.
Section 5.6. Purchase of Bonds Prohibited. So long as a
Letter of Credit is in effect, the Company shall not, directly or indirectly,
purchase any Bonds with any funds that do not constitute Available Moneys,
except as required by Section 5.1(b) of this Agreement.
Section 5.7. Mode Conversions. The Company has the
option to cause the interest rate on the Bonds to be converted from one Mode
to another or from an Adjustable Rate Period of one duration to an Adjustable
Rate Period of the same or a different duration. Such option may be
exercised by the Company as provided in the Indenture.
Article VI
Other Company Agreements
Section 6.1. Maintenance of Existence. The Company
agrees that during the term of this Agreement and so long as any Bond is
outstanding, it will maintain its corporate existence, will continue to be a
corporation in good standing under the laws of the State, will not dissolve or
otherwise dispose of all or substantially all of its assets and will not
consolidate with or merge into another legal entity or permit one or more
other legal entities (other than one or more subsidiaries of the Company) to
consolidate with or merge into it, or sell or otherwise transfer to another
legal entity all or substantially all its assets as an entirety and dissolve,
unless (a) in the case of any merger or consolidation, the Company is the
surviving corporation, or (b)(i) the surviving, resulting, or
transferee legal entity is organized and existing under the laws of
the United States, a state thereof or the District of Columbia, and (if not the
Company) assumes in writing all the obligations of the
Company under this Agreement, the Remarketing Agreement, and
the Tax Agreement and (ii) no event which constitutes, or which with the
giving of notice or the lapse of time or both would constitute an Event of
Default shall have occurred and be continuing immediately after such merger,
consolidation, or transfer.
Section 6.2. Qualification in State. Subject to the
provisions of Section 6.1 hereof, the Company agrees that throughout the
term of this Agreement, it will remain qualified to do business in the State.
Section 6.3. Financial Reports. The Company agrees to
have an annual audit made by its regular independent certified public
accountants and to furnish the Trustee (within 60 days after receipt by the
Company) with a balance sheet and statement of income and surplus showing
the financial condition of the Company and its consolidated
subsidiaries, if any, at the close of each fiscal year and the results of
operations of the Company and its consolidated subsidiaries, if any, for each
fiscal year, accompanied by the opinion of said accountants. The
Trustee will hold such reports solely for the purpose of making them available
at its principal corporate trust office for examination by the Bondholders, and
is not required to notify the Bondholders of the contents of any such report.
Section 6.4. Arbitrage. The Company covenants with the
Issuer and for and on behalf of the purchasers and owners of the Bonds from
time to time outstanding that so long as any of the Bonds remain outstanding,
moneys on deposit in any fund in connection with the Bonds, whether or not
such moneys were derived from the proceeds of the sale of the
Bonds or from any other sources, will not be used in a manner which will
cause the Bonds to be "arbitrage bonds" within the meaning of
section 148 of the Code, and any lawful regulations promulgated
thereunder, as the same exist on this date, or may from time to time hereafter
be amended, supplemented, or revised. The Company also covenants for the
benefit of the Bondholders to comply with all of the provisions of the Tax
Agreement and the Project Certificate. The Company reserves the
right, however, to make any investment of such moneys permitted by State
law, if, when and to the extent that said section 148 or regulations
promulgated thereunder shall be repealed or relaxed or shall be held void by
final judgment of a court of competent jurisdiction, but only if any
investment made by virtue of such repeal, relaxation, or decision would not,
in the written opinion of Bond Counsel, result in making
the interest on the Bonds includible in the federal gross income of
the owners of the Bonds.
Section 6.5. Company"s Obligation with Respect to
Exclusion of Interest Paid on the Bonds. Notwithstanding any other
provision hereof, the Company covenants and agrees that it will not take
or authorize or permit, to the extent such action is within the
control of the Company, any action to be taken with respect to the Project, or
the proceeds of the Bonds (including investment earnings
thereon), or any other proceeds derived directly or indirectly in
connection with the Project, which will result in the loss of the exclusion of
interest on the Bonds from the federal gross income of the
owners of the Bonds under section 103 of the Code (except for any
Bond during any period while any such Bond is held by a person referred to
in section 147(a) of the Code; and the Company also will not omit to take any
action in its power which, if omitted, would cause the above result. Toward
that end, the Company covenants that it will comply with all
provisions of the Tax Agreement and the Project Certificate. This provision
shall control in case of conflict or ambiguity with any other provision of this
Agreement.
Section 6.6. Payment of Taxes. The Company will pay and
discharge promptly all lawful taxes, assessments, and other governmental
charges or levies imposed upon the Project, or upon any part
thereof, as well as all claims of any kind (including claims for
labor, materials, and supplies) which, if unpaid, might by law become a lien
or charge upon the Project; provided that the Company shall
not be required to pay any such tax, assessment, charge, levy, or
claim (i) if the amount, applicability, or validity thereof shall currently be
contested in good faith by appropriate proceedings promptly
initiated and diligently conducted; (ii) if the Company shall have
set aside on its books reserves (segregated to the extent required by generally
accepted accounting principles) with respect thereto
deemed adequate by the Company; and (iii) if failure to make such
payment will not impair the use of the Project by the Company.
Section 6.7. Insurance. The Company agrees to maintain,
or cause to be maintained, all necessary insurance with respect to the Project
in accordance with its customary insurance practices. The Issuer shall have
no obligation to maintain insurance with respect to the Project.
Section 6.8. Maintenance and Repair. The Company shall
at all times during the term of this Agreement maintain, preserve, and keep
the Project in good repair, working order, and condition, excepting normal
wear and tear, and it will from time to time make or cause to be made all
necessary and proper repairs and replacements in connection with the
maintenance, repairs, and replacements referred to in this Section. The
Issuer shall have no obligation with respect to the maintenance or
repair of the Project.
Section 6.9. Financing Statements. The Company shall
cause such security agreements, financing statements, and all supplements
thereto and other instruments as may be required from time
to time to be kept, to be recorded and filed in such manner and in
such places as may be required by law in order to fully preserve, protect, and
perfect the security of the Owners of the Bonds and the rights of the Trustee,
and to perfect the security interest created by the Indenture.
Article VII
No Recourse to Issuer; Indemnification
Section 7.1. No Recourse to Issuer. The Issuer will not be
obligated to pay the Bonds except from revenues provided by the Company or
from other sources specified in the Indenture. The issuance of the Bonds will
not directly or indirectly or contingently obligate the Issuer, the Unit, or
the State to levy or pledge any form of taxation whatever or to make
any appropriation for their payment. Neither the Issuer or the Unit nor any
member or officer of the Issuer or the Unit nor any person executing the
Bonds shall be liable personally for the Bonds or be subject to any personal
liability or accountability by reason of the issuance of the Bonds.
Section 7.2. Release and Indemnification Covenants. (a)
The Company shall indemnify and hold the Issuer, the Unit and the Texas
Department of Commerce (including any official, agent, officer, director, or
employee thereof and bond counsel to the Issuer) harmless against any and all
claims asserted by or on behalf of any person, firm, corporation,
private, or municipal, arising or resulting from, or in any way connected with
(i) the financing, installation, operation, use, or maintenance of the Project,
(ii) any act, including negligent acts, failure to act, or intentional
misrepresentation by any person, firm, corporation, or
governmental authority, including the Issuer and the Unit (except that neither
the Issuer nor the Unit shall be indemnified for its willful
misconduct, bad faith, or fraud), in connection with the issuance,
sale, or delivery of the Bonds, (iii) any act, failure to act, or
misrepresentation by the Issuer or the Unit in connection with, or in
the performance of any obligation related to the issuance, sale, and
delivery of the Bonds or under this Agreement or the Indenture, or any other
agreement executed by or on behalf of the Issuer or the Unit, including all
liabilities, costs, and expenses, including attorneys' fees, incurred in any
action or proceeding brought by reason of any such claim. In the event
that any action or proceeding is brought against the Issuer by reason of any
such claim, such action or proceeding shall be defended against by counsel as
the Issuer or the Unit shall determine, and the Company shall indemnify the
Issuer and the Unit for costs of such counsel. The Company upon
notice from the Issuer shall defend such an action or proceeding on behalf of
the Issuer or the Unit. The Company shall also indemnify the Issuer and the
Unit from and against all costs and expenses, including attorneys' fees,
lawfully incurred in enforcing any obligation of the Company under
this Agreement.
(b) The Company shall indemnify the Trustee, the
Tender Agent, any person who "controls" the Remarketing Agent, the Bank,
the Tender Agent, or the Trustee within the meaning of Section 15 of the
Securities Act of 1933, as amended, and any member, officer, director,
official, and employee of the Remarketing Agent, the Bank, the Tender
Agent, or the Trustee (collectively called the "Indemnified Parties") from and
against, any and all claims, damages, demands, expenses, liabilities, and
losses of every kind, character, and nature asserted by or on behalf of any
person arising out of, resulting from, or in any way connected with (except
for the Indemnified Party's own ct of negligence or malfeasance or
misrepresentation) (i) the Bonds or the execution of any
documents or the performance of any duties relating thereto, and
(ii) the condition, use, possession, conduct, management, planning, design,
acquisition, construction, installation, renovation, or sale of
the Project or any part thereof. The Company also covenants and
agrees, at its expense, to pay, and to indemnify and hold the Indemnified
Parties harmless of, from and against, all costs, attorneys' fees,
expenses, and liabilities incurred in any action or proceeding
brought by reason of any such claim or demand (except for the Indemnified
Party's own act of negligence, malfeasance, or misrepresentation). In the
event that any action or proceeding is brought against the Indemnified
Parties by reason of any such claim or demand, the Indemnified
Parties shall immediately notify the Company, which shall defend any action
or proceeding on behalf of the Indemnified Parties, including
the employment of counsel, the payment of all expenses and the
right to negotiate and consent to settlement. Any one or more of the
Indemnified Parties shall have the right to employ separate
counsel in any such action and to participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of such
Indemnified Parties unless the employment of such
counsel has been specifically authorized by the Company or unless
the Indemnified Parties shall reasonably determine that a conflict of interest
exists as between the Indemnified Parties and the Company, in either of
which instances the fees and expenses of such counsel shall be paid by the
Company. If such separate counsel is employed, the Company may
join in any such suit for the protection of its own interests. The Company
shall not be liable for any settlement of any such action effected without its
consent, but if settled with the consent of the Company or if there be a final
judgment for the plaintiff in any such action, the Company agrees
to indemnify and hold harmless the Indemnified Parties.
Article VIII
Assignment
Section 8.1. Assignment by Company. The Company may
assign its rights and obligations under this Agreement without the consent of
either the Issuer or the Trustee, but no assignment will,
except as provided in the following paragraph, relieve the Company
from primary liability for any obligations under this Agreement and no such
assignment will be made unless the Company causes
there to be delivered to the Trustee an opinion of Bond Counsel to
the effect that such assignment will not cause interest on the Bonds to be
includable in the gross income of the Owners thereof for federal income tax
purposes.
Notwithstanding the provisions of the preceding paragraph,
this Agreement may be assigned by the Company as provided in the
preceding paragraph, but without the Company remaining
primarily liable hereunder, if either (a) the Guaranty will continue
to remain in full force and effect and enforceable notwithstanding such
assignment, or (b) if the Guaranty is to be released in accordance with Section
9.05 of the Indenture in connection with such assignment, the release of the
Guaranty is accomplished in accordance with the provisions of the
Indenture.
Section 8.2. Assignment by Issuer. The Issuer will assign
its rights under and interest in this Agreement (except for the Unassigned
Rights) to the Trustee pursuant to the Indenture as security
for the payment of the Bonds. Otherwise, the Issuer will not sell,
assign, or otherwise dispose of its rights under or interest in this Agreement
nor create or permit to exist any lien, encumbrance or other security interest
in or on such rights or interest.
Article IX
Defaults and Remedies
Section 9.1. Events of Default; Remedies. The occurrence
of any Event of Default under the Indenture shall constitute an Event of
Default hereunder for so long as such Event of Default under
the Indenture is continuing. Whenever any Event of Default has
occurred and is continuing, the Trustee may take whatever action may appear
necessary or desirable to collect the payments then due and to become due or
to enforce performance of any agreement of the Company in this Agreement.
Upon any acceleration of the Bonds under the Indenture, all amounts payable
under Section 5.1(a) hereof shall be immediately due and payable without the
necessity of any action by any party.
In addition, if an Event of Default is continuing with
respect to any of the Unassigned Rights, the Issuer may take whatever action
may appear necessary or desirable to it to enforce performance by the
Company of such Unassigned Rights.
Any amounts collected pursuant to action taken under this
Section (except for amounts payable directly to the Issuer or the Trustee
pursuant to Section 5.2, 7.2, and 9.3) shall be applied in accordance with the
Indenture.
Nothing in this Agreement shall be construed to permit the
Issuer, the Trustee, any Bondholder, or any receiver in any proceeding
brought under the Indenture to take possession of or exclude the Company
from possession of the Project by reason of the occurrence of an Event of
Default.
Section 9.2. Delay Not Waiver; Remedies. A delay or
omission by the Issuer or the Trustee in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or
remedy or constitute a waiver of or acquiescence in the Event of
Default. No remedy is exclusive of any other remedy. All available remedies
are cumulative.
Section 9.3. Attorneys Fees and Expenses. If the Company
should default under any provision of this Agreement and the Issuer or the
Unit should employ attorneys or incur other expenses for
the collection of the payments due under this Agreement, the Company will
on demand pay to the Issuer or the Unit, as appropriate, the fees of such
attorneys and such other expenses so incurred by the Issuer.
Article X
Miscellaneous
Section 10.1. Notices. All notices or other communications
hereunder shall be sufficiently given and shall be deemed given when
delivered or mailed as provided in the Indenture.
Section 10.2. Binding Effect. This Agreement shall inure
to the benefit of and shall be binding upon the Issuer, the Company and their
respective successors and assigns, subject, however, to the limitations
contained in Section 6.1.
Section 10.3. Severability. If any provision of this
Agreement shall be determined to be unenforceable at any time, that shall not
affect any other provision of this Agreement or the enforceability of that
provision at any other time.
Section 10.4. Amendments. After the issuance of the
Bonds, this Agreement may not be effectively amended or terminated without
the written consent of the Trustee and in accordance with
the provisions of the Indenture.
Section 10.5. Right of Company to Perform Issuer's
Agreements. The Issuer irrevocably authorizes and empowers the Company
to perform in the name and on behalf of the Issuer any agreement made by
the Issuer in this Agreement or in the Indenture which the Issuer fails to
perform in a timely fashion if the continuance of such failure could result
in an Event of Default. This Section will not require the Company to perform
any agreement of the Issuer.
Section 10.6. Expiration of Rights of Bank. It is expressly
understood that any and all provisions of this Agreement for notices or the
furnishing of documents, information, or reports to the Bank and the
necessity of obtaining the consent of the Bank to any modifications,
amendments, or supplements to this Agreement or waivers of any of the
provisions hereof shall cease and determine and be of no further force and
effect when (a) the Letter of Credit is not in effect and no amounts are due
and payable by the Company to the Bank under the Reimbursement
Agreement, or (b) the Bank is in default on any of its obligations to pay
drawings under the Letter of Credit submitted in conformity with the terms of
the Letter of Credit.
Section 10.7. Applicable Law. This Agreement shall be
governed by and construed in accordance with the laws of the State.
Section 10.8. Captions; References to Sections. The
captions in this Agreement are for convenience only and do not define or
limit the scope or intent of any provisions or Sections of this
greement. References to Articles and Sections are to the Articles
and Sections of this Agreement, unless the context otherwise requires.
Section 10.9. cmplete Agreement. This Agreement
represents the entire agreement between the Issuer and the Company with
respect to its subject matter.
Section 10.10. Termination. When no Bonds are
Outstanding under the Indenture, the Company and the Issuer shall not have
any further obligations under this Agreement; provided that
the Company"s covenants in Sections 6.4 and 6.5 and the
provisions of Section 5.3 with respect to mandatory redemption of the Bonds
shall survive so long as any Bond remains unpaid.
Section 10.11. Counterparts. This Agreement may be
signed in several counterparts. Each will be an original, but all of them
together constitute the same instrument.
GRAPEVINE INDUSTRIAL
DEVELOPMENT CORPORATION
By /s/
President
Attest:
By /s/
Secretary
TRENCOR JETCO, INC.
By /s/ Jerry Gilbert
Authorized Officer
Attest:
By /s/ Albert E. Guth
Authorized Officer
Exhibit A
Project Description
The Project willconsist of (a) the acquisition of
approximately 51 acres of land, an existing 140,000 square foot building and
equipment and fixtures, (b) the rehabilitation and renovation of
the building, and (c) the purchase of additional equipment to be
located at the site. The rehabilitation and renovation of the building is to
accommodate the manufacture of trenchers and canal excavating equipment.
The Project is located in the City of Grapevine, Texas and will be
owned and operated by the Company.
TABLE OF CONTENTS
Recitals1
Article I
Definitions
Article II
Representations
Section 2.1. Representations of Issuer
Section 2.2. Representations of Company
Article III
Construction and Operation of the Project
Section 3.1. Construction of Project
Section 3.2. Operation of Project
Section 3.3. Establishment of Completion Date; Obligation of Company
to Complete
Article IV
Issuance of Bonds; Deposit of Proceeds; Disbursements
Section 4.1. Issuance of Bonds; Deposit of Proceeds
Section 4.2. Disbursements from the Project Account
Section 4.3. Investment of Moneys
Article V
Repayment
Section 5.1. Repayment
Section 5.2. Additional Payments
Section 5.3. Prepayments
Section 5.4. Obligations of Company Unconditional
Section 5.5. Letter of Credit
Section 5.6. Purchase of Bonds Prohibited
Section 5.7. Mode Conversions
Article VI
Other Company Agreements
Section 6.1. Maintenance of Existence
Section 6.2. Qualification in State
Section 6.3. Financial Reports
Section 6.4. Arbitrage
Section 6.5. Company"s Obligation with Respect to Exclusion
of Interest Paid on the Bonds
Section 6.6. Payment of Taxes
Section 6.7. Insurance
Section 6.8. Maintenance and Repair
Section 6.9. Financing Statements
Article VII
No Recourse to Issuer; Indemnification
Section 7.1. No Recourse to Issuer
Section 7.2. Release and Indemnification Covenants
Article VIII
Assignment
Section 8.1. Assignment by Company
Section 8.2. Assignment by Issuer
Article IX
Defaults and Remedies
Section 9.1. Events of Default; Remedies
Section 9.2. Delay Not Waiver; Remedies
Section 9.3. Attorneys Fees and Expenses
Article X
Miscellaneous
Section 10.1. Notices
Section 10.2. Binding Effect
Section 10.3. Severability
Section 10.4. Amendments
Section 10.5. Right of Company to Perform Issuer's Agreements
Section 10.6. Expiration of Rights of Bank
Section 10.7. Applicable Law
Section 10.8. Captions; References to Sections
Section 10.9. Complete Agreement
Section 10.10. Termination
Section 10.11. Counterparts
Execution16
Exhibit A - Project Description