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EXHIBIT 10.26
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DEVELOPMENT AUTHORITY OF CLAYTON COUNTY
AND
LEAR SEATING CORPORATION
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LOAN AGREEMENT
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Dated as of September 1, 1994
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The interest of the Development Authority of Clayton County (the
"Issuer") in this Loan Agreement has been assigned (except for amounts payable
under Sections 4.2(b), 7.2 and 8.4 hereof) pursuant to the Indenture, of Trust
dated as of the date hereof from the Issuer to NBD Bank, N.A., as trustee (the
"Trustee"), and is subject to the security interest of the Trustee thereunder.
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TABLE OF CONTENTS
Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 1
Definitions and Other Provisions
of General Application
SECTION 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.2 Effect of Headings and Table of Contents . . . . . . . . . . . . 7
SECTION 1.3 Date of Loan Agreement . . . . . . . . . . . . . . . . . . . . . 7
SECTION 1.4 Severability Clause . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 1.5 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 1.6 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 1.7 References to Letter of Credit and
Related Terms . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 2
Representations, Covenants and Warranties
SECTION 2.1 Representations, Covenants and Warranties
of the Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.2 Representations, Covenants and Warranties
of the Company . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.3 Tax-Exempt Status of the Bonds . . . . . . . . . . . . . . . . . 9
SECTION 2.4 Notice of Determination of Taxability . . . . . . . . . . . . . . 9
ARTICLE 3
Acquisition and Construction
of the Project;
Issuance of the Bonds
SECTION 3.1 Agreement to Acquire, Construct,
Improve and Equip the Project . . . . . . . . . . . . . . . . . . 10
SECTION 3.2 Agreement to Issue the Bonds;
Application of Bond Proceeds . . . . . . . . . . . . . . . . . . 10
SECTION 3.3 Disbursements from the Construction Fund . . . . . . . . . . . . 10
SECTION 3.4 Furnishing Documents to the Trustee . . . . . . . . . . . . . . . 10
SECTION 3.5 Establishment of Completion Date . . . . . . . . . . . . . . . . 11
SECTION 3.6 Company Required to Pay in Event
Construction Fund Insufficient . . . . . . . . . . . . . . . . . 12
SECTION 3.7 Special Arbitrage Certification . . . . . . . . . . . . . . . . . 12
ARTICLE 4
Loan Provisions
SECTION 4.1 Loan of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 4.2 Basic Payments . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 4.3 Additional Payments . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 4.4 Overdue Payments . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 4.5 Unconditional Obligation of Company . . . . . . . . . . . . . . . 15
ARTICLE 5
Concerning the Bonds,
the Indenture and the Trustee
SECTION 5.1 Assignment of Loan Agreement . . . . . . . . . . . . . . . . . . 16
SECTION 5.2 Redemption of Bonds . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 5.3 Amendment of Indenture . . . . . . . . . . . . . . . . . . . . . 16
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SECTION 5.4 Special Funds . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 5.5 Effect of Full Payment of Indebtedness . . . . . . . . . . . . . 16
ARTICLE 6
SECTION 6.1 Maintenance and Other Operating Expenses . . . . . . . . . . . . 18
SECTION 6.2 Taxes, Assessments, Etc. . . . . . . . . . . . . . . . . . . . . 18
SECTION 6.3 Improvements, Alterations, Etc. . . . . . . . . . . . . . . . . . 18
SECTION 6.4 Assignment, etc. . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 6.5 Company's Personal Property and Fixtures . . . . . . . . . . . . 18
SECTION 6.6 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 7
Special Covenants
SECTION 7.1 No Warranty of Condition
or Suitability by Issuer . . . . . . . . . . . . . . . . . . . . 20
SECTION 7.2 Issuer and Company Representatives . . . . . . . . . . . . . . . 20
SECTION 7.3 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 7.4 Inspection of Records . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 7.5 Indemnity of Issuer and Trustee . . . . . . . . . . . . . . . . . 20
ARTICLE 8
Remedies
SECTION 8.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 8.2 Remedies on Default . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 8.3 No Remedy Exclusive . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 8.4 Agreement to Pay Attorneys'
Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 8.5 No Additional Waiver Implied by One Waiver . . . . . . . . . . . 23
SECTION 8.6 Remedies Subject to Applicable Law . . . . . . . . . . . . . . . 23
ARTICLE 9
Prepayment under Agreement
SECTION 9.1 Option to Prepay Basic Payment Amounts Under
Agreement in Whole in Certain Events . . . . . . . . . . . . . . 24
SECTION 9.2 Other Options to Prepay Basic Payment
Amounts Under Agreement . . . . . . . . . . . . . . . . . . . . . 25
SECTION 9.3 Obligation to Prepay Basic Payment Amounts
Under Agreement Under Certain Circumstances . . . . . . . . . . . 25
ARTICLE 10
Miscellaneous
SECTION 10.1 Issuer's Liabilities Limited . . . . . . . . . . . . . . . . . . 27
SECTION 10.2 Corporate Existence of Issuer . . . . . . . . . . . . . . . . . . 27
SECTION 10.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 10.4 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . 28
SECTION 10.5 Benefits of Loan Agreement . . . . . . . . . . . . . . . . . . . 28
Testimonium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EXHIBIT A - Project Site
EXHIBIT B - Project Equipment
EXHIBIT C - Form of Requisition
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LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of September 1, 1994, among DEVELOPMENT
AUTHORITY OF CLAYTON COUNTY, a public body corporate and politic created and
existing under the laws of the State of Georgia (the "Issuer"), LEAR SEATING
CORPORATION, a Delaware corporation (the "Company");
W I T N E S S E T H:
WHEREAS, the Issuer has created pursuant to the provisions of an act
of the General Assembly of the State of Georgia (O.C.G.A. Section 36-62), as
amended (the "Act"), and its directors have been appointed as provided therein
and are currently acting in that capacity; and
WHEREAS, the Issuer has been created to develop and promote for the
public good and general welfare trade, commerce, industry and employment
opportunities and to promote the general welfare of the State of Georgia; the
Act empowers the Issuer to issue its revenue obligations, in accordance with
the applicable provisions of the Act, in furtherance of the public purpose for
which it was created; and
WHEREAS, the Issuer, by due corporate action, has authorized the
financing of the acquisition, construction and equipping of a manufacturing
facility in Clayton County, Georgia (the "Project"), pursuant to plans and
specifications therefor, such Project to include certain land, buildings and
related real property together with certain equipment and related personal
property, which Project is to be financed by the Issuer for the benefit of the
Company pursuant to this Loan Agreement; and
WHEREAS, after careful study and investigation of the nature of the
proposed Project, the Issuer has determined that, in assisting with the
financing of the Project, it will be acting in furtherance of the public
purposes intended to be served by the Act; and
WHEREAS, the Issuer has been advised by the Company that the amount
necessary to finance the cost of the acquisition, construction and equipping of
the Project, including expenses incidental thereto, is not less than $9,500,000
and, by proper corporate action, the Issuer has authorized the issuance and
sale of $9,500,000 in aggregate principal amount of Development Authority of
Clayton County Industrial Development Revenue Bonds (Lear Seating Corporation
Project), Series 1994 (the "Bonds"), the proceeds of which will be used to
finance the cost of the acquisition, construction and equipping of the Project;
and
WHEREAS, pursuant to the terms of this Agreement, the Issuer has
agreed to finance the cost of acquiring, constructing and equipping the Project
through the issuance of the Bonds and, in consideration thereof, the Company
has agreed to pay to the Issuer moneys sufficient to pay the principal of, and
the redemption
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premium (if any) and the interest on, the Bonds as the same become due and
payable and to pay certain administrative expenses in connection with the
Bonds; and
WHEREAS, the Bonds shall be limited obligations of the Issuer payable
solely from the amounts payable under this Loan Agreement and other amounts
specifically pledged therefor under the hereinafter defined Indenture (the
"Pledged Revenues"); and
WHEREAS, as security for the payment of the Bonds, the Company will
cause Chemical Bank (in its capacity as issuer of the initial letter of credit
referred to below, herein called the "Credit Obligor") to issue an irrevocable
letter of credit in favor of the Trustee to enable the Trustee to pay Debt
Service on the Bonds and the purchase price of Bonds tendered (or deemed
tendered) for purchase in accordance with the terms of the Indenture (the
initial letter of credit so delivered to the Trustee and any substitute letter
of credit delivered to the Trustee pursuant to the Indenture are herein
referred to as the "Letter of Credit"); and
WHEREAS, the Letter of Credit will be issued by the Credit Obligor
pursuant to an Amended and Restated Credit Agreement, dated as of October 25,
1993 (the "Credit Agreement") between and among the Company, the Credit Obligor
and others, whereby the Company will agree, among other things, to reimburse
the Credit Obligor for all amounts drawn by the Trustee pursuant to the Letter
of Credit; and
NOW, THEREFORE, for and in consideration of the premises and the
mutual covenants hereinafter contained, the parties hereto covenant, agree and
bind themselves as follows:
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ARTICLE 1
Definitions and Other Provisions
of General Application
SECTION 1.1 Definitions
For all purposes of this Loan Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(1) Capitalized terms not otherwise defined herein shall have the
meaning assigned to them in the Indenture.
(2) The terms defined in this Article shall have the meanings
assigned to them in this Article. Singular terms shall include the plural as
well as the singular, and vice versa.
(3) The definitions in the recitals to this instrument are for
convenience only and shall not affect the construction of this instrument.
(4) All accounting terms not otherwise defined herein have the
meanings assigned to them, and all computations herein provided for shall be
made, in accordance with generally accepted accounting principles. All
references herein to "generally accepted accounting principles" refer to such
principles as they exist at the date of application thereof.
(5) All references in this instrument to designated "Articles",
"Sections" and other subdivisions are to the designated Articles, Sections and
subdivisions of this instrument as originally executed.
(6) The terms "herein", "hereof" and "hereunder" and other words
of similar import refer to this Loan Agreement as a whole and not to any
particular Article, Section or other subdivision.
(7) The term "person" shall include any individual, corporation,
partnership, joint venture, association, trust, unincorporated organization and
any government or any agency or political subdivision thereof.
(8) The following words and phrases shall have the following meanings:
"Authorized Company Representative" means the person at the time
designated to act on behalf of the Company by written certificate furnished to
the Issuer and the Trustee containing the specimen signature of such person and
signed on behalf of the Company by the chairman of the board, president or vice
president of the Company. Such certificate may designate an alternate or
alternatives.
"Capital Expenditures" means capital expenditures within the meaning
of Section 144(a)(4) of the Code, and the Income Tax Regulations relating
thereto.
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"Cost" with respect to the Project shall be deemed to include all
items permitted to be financed under the provisions of the Act, including, but
not limited to:
(i) all costs which the Issuer or the Company shall be
required to pay under the terms of any contract or contracts for the
acquisition, construction, improving, or equipping of the Project;
(ii) obligations of the Company incurred for labor and
materials (including obligations payable to the Company) in connection
with the acquisition, construction, improving or equipping of the
Project, including reimbursement to the Company for all advances and
payments made in connection with the Project prior to or after
delivery of the Bonds;
(iii) the cost of performance or other bonds and any and
all types of insurance that may be necessary or appropriate to have in
effect during the course of construction of the Project;
(iv) all costs of engineering and architectural services,
including the costs of the Company for test borings, surveys,
estimates, plans and specifications and preliminary investigations
therefor, and for supervising construction, as well as for the
performance of all other duties required by or consequent to the
proper construction of the Project;
(v) subject to the two percent (2.0%) limitation set
forth in the Internal Revenue Code, all expenses incurred in
connection with the issuance of the Bonds, including but not limited
to, reasonable compensation, fees and expenses of the Issuer, the
Trustee and the Tender Agent, including reasonable counsel fees,
compensation to any financial consultant, underwriters or placement
agents, legal fees and expenses, costs of printing and engraving,
recording and filing fees and costs of title insurance, if any, and
Letter of Credit fees and facility fees payable under the Credit
Agreement;
(vi) any sums required to reimburse the Company for
advances made by the Company for any of the above items or for any
other costs incurred which are properly chargeable to the Project; and
(vii) the reimbursement of the Credit Obligor for any
amounts drawn under the Letter of Credit to pay interest on the Bonds
prior to the completion of construction of the Project.
"Default" means any Default under this Agreement as specified
in and defined by Section 8.1 hereof.
"Indenture" means the Trust Indenture dated as of this date
between the Issuer and the Trustee, pursuant to which the Bonds are
authorized to be issued, and any amendments and supplements thereto.
"Issuance Costs" means all costs that are treated as costs of
issuing or carrying the Bonds under existing Treasury Department
regulations and rulings, including, but not limited to:
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(a) underwriter's spread (whether realized directly or
derived through purchase of the Bonds at a discount below the price at
which they are expected to be sold to the public);
(b) counsel fees (including bond counsel, underwriter's
counsel, Issuer's counsel, Company's counsel, as well as any other
specialized counsel fees incurred in connection with the issuance of
the Bonds);
(c) financial adviser fees incurred in connection with
the issuance of the Bonds;
(d) rating agency fees;
(e) Trustee fees incurred in connection with the issuance
of the Bonds;
(f) paying agent and certifying and authenticating agent
fees related to issuance of the Bonds;
(g) accountant fees related to the issuance of the Bonds;
(h) printing costs of the Bonds and of the preliminary
and final offering materials;
(i) publication costs associated with the financing
proceedings; and
(j) costs of engineering and feasibility studies
necessary to the issuance of the Bonds.
provided, that bond insurance premiums and certain credit enhancement fees, to
the extent treated as interest expense under applicable regulations, shall not
be treated as "Issuance Costs."
"Plans and Specifications" means the plans and specifications for the
Project prepared by C. H. Moss & Associates, Inc., engineer, for Morgan
Contracting, as developer, dated June 13, 1994, copies of which are on file
with the Company.
"Project" means the Project Building, Project Equipment and the
Project Site.
"Project Building" means the structures intended to be acquired,
constructed and installed on the Project Site.
"Project Equipment" means the property which is described generally in
Exhibit B hereto, and any items of machinery, equipment, or other personal
property acquired in substitution for, or as a renewal or replacement of or a
modification or improvement to, said property.
"Project Site" means the real estate described in Exhibit A hereto.
"Qualified Project Costs" means costs and expenses of the Project
which constitute land costs or costs for property of a
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character subject to the allowance for depreciation excluding specifically
working capital and inventory costs, provided, however, that (i) costs or
expenses paid or incurred prior to March 17, 1994, shall not be deemed to be
Qualified Project Costs; (ii) Issuance Costs shall not be deemed to be
Qualified Project Costs; (iii) interest during the Construction Period shall be
allocated between Qualified Project Costs and other costs and expenses to be
paid from the proceeds of the Bonds; (iv) interest following the Construction
Period shall not constitute a Qualified Project Cost; (v) letter of credit fees
and municipal bond insurance premiums which represent a transfer of credit risk
shall be allocated between Qualified Project Costs and other costs and expenses
to be paid from the proceeds of the Bonds; and (vi) letter of credit fees and
municipal bond insurance premiums which do not represent a transfer of credit
risk shall not constitute Qualified Project Costs.
"Requisition" means a written request for a disbursement from the
Construction Fund, signed by an Authorized Company Representative,
substantially in the form attached hereto as Exhibit C and satisfactorily
completed as contemplated by said form.
"State" means the State of Georgia.
"Term of Agreement" means the term of this Agreement as specified in
Section 11.1 hereof.
SECTION 1.2 Effect of Headings and Table of Contents
The Article and Section headings herein and in the Table of Contents
are for convenience only and shall not affect the construction hereof.
SECTION 1.3 Date of Loan Agreement
The date of this Loan Agreement is intended as and for a date for the
convenient identification of this Loan Agreement and is not intended to
indicate that this Loan Agreement was executed and delivered on said date.
SECTION 1.4 Severability Clause
If any provision in this Loan Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 1.5 Governing Law
This Loan Agreement shall be construed in accordance with and governed
by the laws of the State of Georgia.
SECTION 1.6 Counterparts
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed an original, but all such counterparts shall
together constitute but one and the same instrument.
SECTION 1.7 References to Letter of Credit and Related Terms
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During any period in which no Letter of Credit is in effect and no
amounts remain unreimbursed to the Credit Obligor with respect thereto, any
references to the Credit Obligor, Credit Agreement or Letter of Credit shall be
disregarded and shall have no effect.
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ARTICLE 2
REPRESENTATIONS, COVENANTS AND WARRANTIES
SECTION 2.1 Representations, Covenants and Warranties of the Issuer.
The Issuer represents, covenants and warrants that:
(a) The Issuer is a public body corporate and politic and an
instrumentality of the State of Georgia. Under the provisions of the
Act, the Issuer is authorized to enter into the transactions
contemplated by this Agreement and the Indenture and to carry out its
obligations hereunder and thereunder. The Issuer has been duly
authorized to execute and deliver this Agreement and the Indenture.
(b) The Issuer covenants that it will not pledge the amounts
derived from this Agreement other than as contemplated by the
Indenture.
SECTION 2.2 Representations, Covenants and Warranties of the Company.
The Company represents, covenants and warrants that:
(a) The Company is a corporation validly organized and
existing under the laws of the State of Delaware. The Company is not
in violation of any provision of its Articles of Incorporation, as
amended, has the corporate power to enter into this Agreement, and has
duly authorized the execution and delivery of this Agreement.
(b) Neither the execution and delivery of this Agreement, the
Remarketing Agreement or the Credit Agreement, nor the consummation of
the transactions contemplated hereby and thereby, nor the fulfillment
of or compliance with the terms and conditions hereof or thereof
conflicts with or results in a material breach of any material terms,
conditions, or provisions of any material agreement or instrument to
which the Company is now a party or by which the Company is bound, or
constitutes a default under any of the foregoing.
(c) There is no action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court, public
board or body, known to be pending or threatened against or affecting
the Company or any of its officers, nor to the best knowledge of the
Company is there any basis therefor, wherein an unfavorable decision,
ruling, or finding would materially adversely affect the transactions
contemplated by this Agreement or which would adversely affect, in any
way, the validity or enforceability of the Bonds, this Agreement, the
Credit Agreement, the Remarketing Agreement, or any agreement or
instrument to which the Company is a party, used or contemplated for
use in the consummation of the transactions contemplated hereby.
(d) The Project is of the type authorized and permitted by
the Act, and its estimated Cost is not less than $9,500,000.
(e) The proceeds from the sale of the Bonds will be used only
for payment of Cost of the Project.
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(f) The Company will use due diligence to cause the Project
to be operated in accordance with the laws, rulings, regulations and
ordinances of the State and the departments, agencies and political
subdivisions thereof. The Company has obtained or caused to be
obtained all requisite approvals of the State and of other federal,
state, regional and local governmental bodies for the acquisition,
construction, improving and equipping of the Project which would
customarily be obtained at this stage of completion of the Project.
(g) The Company will fully and faithfully perform all the
duties and obligations which the Issuer 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.
The foregoing shall not apply to any duty or undertaking of the Issuer
which by its nature cannot be delegated or assigned.
(h) The issuance of the Bonds by the Issuer and the
lending of the proceeds thereof to the Company to enable the Company
to acquire, construct and install the Project have induced the Company
to locate the Project in the County, which will directly result in an
increase in employment opportunities in the County.
SECTION 2.3 Tax-Exempt Status of the Bonds. The Company hereby
acknowledges and confirms the representations, warranties and covenants set
forth in that certain Company's Tax Certificate and Compliance Agreement, dated
as of the date of issuance and delivery of the Bonds, which representations,
warranties and covenants are incorporated herein by this reference thereto and
made a part hereof as fully as though set forth herein in their entirety.
SECTION 2.4 Notice of Determination of Taxability. Promptly after the
Company first becomes aware of any Determination of Taxability, the Company
shall give written notice thereof to the Issuer and the Trustee.
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ARTICLE 3
ACQUISITION AND CONSTRUCTION
OF THE PROJECT; ISSUANCE OF THE BONDS
SECTION 3.1 Agreement to Acquire, Construct, Improve and Equip
the Project. The Company agrees to make all contracts and do all things
necessary for the acquisition, construction, improving, and equipping of the
Project, with or without advertising for bids, and the Company agrees that it
will cause the Project Building to be constructed, improved and equipped on the
Project Site substantially in accordance with the Plans and Specifications, and
that it will cause the Project Equipment to be acquired and installed therein.
Notwithstanding the foregoing, the Company may modify, supplement, amend or
revise the Plans and Specifications, in its sole discretion, without notice to
or the consent of the Issuer, the Credit Obligor or the Trustee, so long as the
Project continues to qualify as a "project" within the meaning of the Act.
The Company further agrees that it will acquire, construct, improve,
and equip the Project with all reasonable dispatch and use its best efforts to
cause acquisition, construction, improving, equipping, and occupancy of the
Project to be completed by June 1, 1995, or as soon thereafter as may be
practicable, delays caused by force majeure as defined in Section 8.1 hereof
only excepted; but if for any reason such acquisition, construction, improving
and equipping is not completed by said date there shall be no resulting
liability on the part of the Company and no diminution in or postponement of
the payments required in Section 4.2 hereof to be paid by the Company.
SECTION 3.2 Agreement to Issue the Bonds; Application of Bond
Proceeds. In order to provide funds for the payment of the Cost of the
Project, the Issuer, concurrently with the execution of this Agreement, will
issue, sell, and deliver the Bonds and deposit the net proceeds thereof with
the Trustee in the Construction Fund.
SECTION 3.3 Disbursements from the Construction Fund. The Issuer
has, in the Indenture, authorized and directed the Trustee to make
disbursements from the Construction Fund to pay the Costs of the Project, or to
reimburse the Company for any Cost of the Project paid by the Company. The
Trustee shall not make any disbursement from the Construction Fund until the
Company shall have provided the Trustee with a Requisition.
SECTION 3.4 Furnishing Documents to the Trustee. The Company agrees
to cause such Requisitions to be directed to the Trustee as may be necessary to
effect payments out of the Construction Fund in accordance with Section 3.3
hereof.
SECTION 3.5 Establishment of Completion Date.
(a) The Completion Date shall be evidenced to the Issuer and
the Trustee by a certificate signed by an Authorized Company Representative
stating that, except for amounts retained by the Trustee at the Company's
direction to pay any Cost of the Project not then due and payable, (i)
construction of the Project has been completed and all costs of labor,
services, materials and supplies used in such construction have been paid, (ii)
all equipment for the Project has been installed, such equipment so installed
is
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suitable and sufficient for the operation of the Project, and all costs and
expenses incurred in the acquisition and installation of such equipment have
been paid, and (iii) all other facilities necessary in connection with the
Project have been acquired, constructed, improved, and equipped and all costs
and expenses incurred in connection therewith have been paid. Notwithstanding
the foregoing, such certificate shall 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. Forthwith upon completion of the
acquisition, construction, improving, and equipping of the Project, the Company
agrees to cause such certificate to be furnished to the Issuer and the Trustee.
Upon receipt of such certificate, the Trustee shall retain in the Construction
Fund a sum equal to the amounts necessary for payment of the Cost of the
Project not then due and payable according to such certificate. If any such
amounts so retained are not subsequently used, prior to any transfer of said
amounts to the Bond Fund as provided below, the Trustee shall give notice to
the Company of the failure to apply said funds for payment of the Cost of the
Project. Any amount not to be retained in the Construction Fund for payment of
the Cost of the Project, and all amounts so retained but not subsequently used,
shall be transferred by the Trustee into the Bond Fund.
(b) If at least ninety-five percent (95%) of the net proceeds
of the sale of the Bonds have not been used for Qualified Project Costs, any
amount (exclusive of amounts retained by the Trustee in the Construction Fund
for payment of Cost of the Project not then due and payable) remaining in the
Construction Fund shall be transferred by the Trustee into the Bond Fund and
used by the Trustee (a) to redeem Bonds on the earliest redemption date
permitted by the Indenture without a premium, (b) to purchase Bonds on the open
market prior to such redemption date at prices not in excess of one hundred
percent (100%) of the principal amount of such Bonds, or (c) for any other
purpose provided that the Trustee is furnished with an opinion of Bond Counsel
to the effect that such use is lawful under the Act and will not require that
interest on the Bonds be included in gross income for federal income tax
purposes. Until used for one or more of the foregoing purposes, such
segregated amount may be invested as permitted by the Indenture provided that
prior to any such investment the Trustee is provided with an opinion of Bond
Counsel to the effect that such investment will not require that interest on
the Bonds be included in gross income for federal income tax purposes.
SECTION 3.6 Company Required to Pay in Event Construction Fund
Insufficient. In the event the moneys in the Construction Fund available for
payment of the Costs of the Project should not be sufficient to pay the Costs
of the Project in full, the Company agrees to complete the Project and to pay
that portion of the Costs of the Project in excess of the moneys available
therefor in the Construction Fund. The Issuer does not make any warranty,
either express or implied, that the moneys paid into the Construction Fund and
available for payment of the Costs of the Project will be sufficient to pay all
of the Costs of the Project. The Company agrees that if after exhaustion of
the moneys in the Construction Fund, the Company should pay any portion of the
Costs of the Project pursuant to the provisions of this Section, the Company
15
shall not be entitled to any reimbursement therefor from the Issuer, the
Trustee or the Owners of any of the Bonds, nor shall the Company be entitled to
any diminution of the amounts payable under Section 4.2 hereof.
SECTION 3.7 Special Arbitrage Certifications. The Company and the
Issuer covenant not to cause or direct any moneys on deposit in any fund or
account to be used in a manner which would cause the Bonds to be classified as
"arbitrage bonds" within the meaning of Section 148 of the Code, and the
Company certifies and covenants to and for the benefit of the Issuer and the
Owners of the Bonds that so long as there are any Bonds Outstanding, moneys on
deposit in any fund or account in connection with the Bonds, whether 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
classified as "arbitrage bonds" within the meaning of Section 148 of the Code.
Without limiting the generality of the foregoing, the Company hereby agrees to
comply with the terms and conditions set forth in that certain "Company's Tax
Certificate and Compliance Agreement", dated the date of issuance and delivery
of the Bonds, including, without limitation, the provisions set forth therein
pertaining to the rebate of investment earnings to the United States.
16
ARTICLE 4
LOAN PROVISIONS
SECTION 4.1 Loan Of Proceeds. The Issuer agrees, upon the terms
and conditions contained in this Agreement and the Indenture, to lend to the
Company the proceeds received by the Issuer from the sale of the Bonds. Such
proceeds shall be disbursed to or on behalf of the Company as provided in
Section 3.3 hereof.
SECTION 4.2 Basic Payments
(a) The Company shall make basic payments ("Basic Payments") to
the Trustee, for the account of the Issuer, at times and in amounts as follows:
on or before any Bond Payment Date for the Bonds or any other date that any
payment of interest, premium, if any, or principal or purchase price is
required to be made in respect of the Bonds pursuant to the Indenture, until
the principal of, premium, if any, and interest on the Bonds shall have been
fully paid or provision for the payment thereof shall have been made in
accordance with the Indenture, in immediately available funds, a sum which,
together with any other moneys available for such payment in any account of the
Bond Fund, will enable the Trustee to pay the amount payable on such date as
purchase price or principal of (whether at maturity or upon redemption or
acceleration or otherwise), premium, if any, and interest on the Bonds as
provided in the Indenture; provided, however, that the obligation of the
Company to make any payment hereunder shall be deemed satisfied and discharged
to the extent of the corresponding payment made by the Credit Obligor to the
Trustee under the Letter of Credit.
(b) In accordance with the Indenture, on each Bond Payment Date
the Trustee shall, without regard to the amount then on deposit in the Bond
Fund, make a draw on the Letter of Credit in an amount equal to the amount of
Debt Service due on such Bond Payment Date on Bonds other than Pledged Bonds.
No draw shall be made under the Letter of Credit with respect to Debt Service
on Pledged Bonds. If money is, at the time of such draw, on deposit in the
Bond Fund and available for the payment of Debt Service on Bonds other than
Pledged Bonds, such available money shall, to the extent of the amount drawn
pursuant to the Letter of Credit, be paid to the Credit Obligor.
(c) In accordance with the Indenture, on each Tender Date the
Trustee shall, without making any prior claim or demand on the Company for
Basic Payments with respect to the purchase price of Bonds, and without taking
into account any proceeds anticipated from the remarketing of Bonds by the
Remarketing Agent, make a draw under the Letter of Credit in an amount equal
to the purchase price of all Bonds to be purchased on such Tender Date. The
Company shall receive a credit against Basic Payments under subsection (a)(3)
for the amount so drawn.
(d) The Company shall cause all Basic Payments to be made in funds
immediately available to the Trustee at its Principal Office by 1:45 P.M., New
York City time, on the related Bond Payment Date
17
or Tender Date, as the case may be, or such earlier time as may be required by
the Securities Depository.
(e) If any Basic Payment is due on a day which is not a Business
Day, the Company shall cause such payment to be made on the first succeeding
day which is a Business Day with the same effect as if made on the day such
payment was due.
(f) Income or profits received from the investment of money in the
Bond Fund shall be credited against the Basic Payments required by subsection
(a)(1) and (2) of this Section.
(g) The Company acknowledges that Basic Payments required by this
Section are intended to provide amounts which will be sufficient to pay Debt
Service on the Bonds as the same matures and comes due. If on any Bond Payment
Date the amount on deposit in the Bond Fund is not sufficient to pay Debt
Service on the Bonds due and payable on such date, the Company shall
immediately deposit the amount of such deficiency in the Bond Fund.
SECTION 4.3 Additional Payments
(a) The Company shall make additional payments ("Additional
Payments") to the Issuer, the Trustee or the Tender Agent, as the case may be,
as follows:
(1) the acceptance fee of the Trustee and the reasonable
annual (or other regular) fees, charges and expenses of the Trustee,
Tender Agent and Remarketing Agent;
(2) any amount to which the Trustee may be entitled under
Section 13.07 of the Indenture; and
(3) the reasonable expenses of the Issuer incurred at the
request of the Company, or in the performance of its duties under the
Indenture, or in connection with any litigation which may at any time
be instituted involving the Project, the Bonds, or in the pursuit of
any remedies under the Indenture.
(b) All Additional Payments shall be due and payable within 10
days after receipt by the Company of an invoice therefor.
SECTION 4.4 Overdue Payments
Any overdue Basic Payment shall bear interest from the related Bond
Payment Date until paid at the Post-Default Rate for overdue Debt Service
payments. Any overdue Additional Payment shall bear interest from the date due
until paid at the Post-Default Rate for such Additional Payments specified in
the Indenture.
SECTION 4.5 Unconditional Obligation of Company
Subject to Section 10.6 hereof, the Company's obligation to make
Payments and to perform and observe the other agreements and covenants on its
part herein contained shall be absolute and unconditional, irrespective of any
rights of set-off, recoupment or counterclaim it might otherwise have against
the Issuer or the Trustee. The Company will not suspend or discontinue any
such Payment or fail to perform and observe any of its other agreements and
covenants contained herein or terminate this Loan Agreement for any cause
whatsoever, including, without limiting the generality of
18
the foregoing, (i) failure to complete the Project, (ii) any acts or
circumstances that may constitute an eviction or constructive eviction, (iii)
failure of consideration or commercial frustration of purpose, (iv) the
invalidity of any provision of this Loan Agreement, (v) any damage to or
destruction of the Project or any part thereof, (vi) the taking by eminent
domain of title to, or the use of, all or any part of the Project, (vii) any
change in the laws or regulations of the United States of the United States of
America, the State of Georgia or any other government authority, or (viii) any
failure of any of the Financing Participants to perform and observe any
agreement or covenant, whether express or implied, to be performed or observed
by them under any of the Financing Documents.
19
ARTICLE 5
Concerning the Bonds,
the Indenture and the Trustee
SECTION 5.1 Assignment of Loan Agreement
(a) The parties hereto agree that pursuant to the Indenture, the
Issuer shall assign to the Trustee, in order to secure payment of the Bonds,
all of the Issuer's right, title and interest in and to this Agreement (except
for certain rights personal to the Issuer).
SECTION 5.2 Redemption of Bonds
(a) The Issuer will redeem any or all of the Bonds in accordance
with the scheduled mandatory redemption provisions of the Bonds and the
Indenture and upon the occurrence of any event or contingency requiring the
mandatory redemption of Bonds, all in accordance with the applicable provisions
of the Bonds and the Indenture.
(b) If no Loan Default exists, the Issuer will exercise any right
of optional redemption with respect to the Bonds only upon the written request
of the Company.
SECTION 5.3 Amendment of Indenture
The Issuer will not cause or permit the amendment of the Indenture or
the execution of any amendment or supplement to the Indenture without the prior
written consent of the Company.
SECTION 5.4 Special Funds
(a) If no Loan Default exists, the Issuer shall cause any money
held as part of a Special Fund to be invested or reinvested by the Trustee in
accordance with the terms of the Indenture and the instructions of the Company.
(b) The Company shall be solely responsible for (i) determining
that any such investment of Special Funds under the Indenture complies with the
arbitrage limitations imposed by Section 148 of the Internal Revenue Code,
including without limitation the provisions of Section 148(d)(3) of the
Internal Revenue Code relating to investment of "gross proceeds" of bonds, and
(ii) calculating the amount of, and making payment of, any rebate due to the
United States under Section 148(f) of the Internal Revenue Code.
SECTION 5.5 Effect of Full Payment of Indebtedness
(a) After the Indenture Indebtedness is Fully Paid, all references
in this Loan Agreement to the Bonds, the Indenture and the Trustee shall be
ineffective and neither the Trustee nor the Holders of the Bonds shall
thereafter have any rights hereunder, except those rights that shall have
theretofore vested.
(b) After the Credit Obligor Indebtedness is Fully Paid, (i) all
references in this Loan Agreement to the Credit Obligor shall be ineffective
and thereafter the Credit Obligor shall have no rights hereunder, except those
rights that shall have theretofore vested, and (ii) all references in this Loan
Agreement
20
to the Credit Agreement and the Letter of Credit shall be ineffective.
(c) After all Indebtedness is Fully Paid, any money or investments
remaining in the Special Funds shall be delivered to the Company.
21
ARTICLE 6
SECTION 6.1 Maintenance and Other Operating Expenses
The Company will, at its own expense, cause the Project to be
maintained and kept in good condition, repair and working order.
SECTION 6.2 Taxes, Assessments, Etc.
The Company will pay or cause to be paid as they become due and
payable all taxes, assessments and other governmental charges lawfully levied
or assessed or imposed upon the Project or any part thereof or upon any income
therefrom.
SECTION 6.3 Improvements, Alterations, Etc.
The Company may, at its own expense, make changes, additions,
improvement or alterations to the buildings, structures and other improvements
constituting a part of the Project.
SECTION 6.4 Assignment, etc.
Subject to the receipt of the prior written consent of the Issuer, the
Company may assign its rights in this Loan Agreement and may sell or lease the
Project or any part thereof, subject to the following limitations:
(1) the Company shall continue to be primarily liable for the
performance and observance of the agreements and covenants to be performed and
observed by its under this Loan Agreement, and no such assignment or lease
shall in any way diminish or abate the obligations of the Company hereunder
(unless the transferee assumes all of the Company's obligations hereunder);
(2) no such assignment or lease shall permit or result in the use
of the Project for any purpose that would not be permitted for facilities
financed under the Enabling Act; and
(3) within 30 days after the delivery of any such assignment or
lease, the Company shall deliver a copy thereof to the Issuer and to the
Trustee.
SECTION 6.5 Company's Personal Property and Fixtures
The Company may, at its own expense, install at the Project any
personal property or fixtures which, in the Company's judgment, are necessary
or desirable for the conduct of the business carried on by the Company at the
Project.
SECTION 6.6 Insurance
The Company will at all times keep the Project insured against such
risks as are customarily insured against by businesses of like size and type,
paying as the same become due all premiums in respect thereto.
22
ARTICLE 7
SPECIAL COVENANTS
SECTION 7.1 No Warranty of Condition or Suitability by Issuer.
THE ISSUER MAKES NO WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE PROJECT OR
THE CONDITION THEREOF, OR THAT THE PROJECT WILL BE SUITABLE FOR THE PURPOSES OR
NEEDS OF THE COMPANY. THE ISSUER MAKES NO REPRESENTATION OR WARRANTY, EXPRESS
OR IMPLIED, THAT THE COMPANY WILL HAVE QUIET AND PEACEFUL POSSESSION OF THE
PROJECT. THE ISSUER MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED,
WITH RESPECT TO THE MERCHANTABILITY, CONDITION OR WORKMANSHIP OF ANY PART OF
THE PROJECT OR ITS SUITABILITY FOR THE COMPANY'S PURPOSES.
SECTION 7.2 Issuer and Company Representatives. Whenever under
the provisions of this Agreement the approval of the Issuer or the Company are
required or the Issuer or the Company are required to take some action at the
request of the other, such approval or such request shall be given for the
Issuer by an Issuer Representative and for the Company by an Authorized Company
Representative. The Trustee shall be authorized to act on any such approval or
request.
SECTION 7.3 Further Assurances The Company will do, execute,
acknowledge and deliver such further acts, financing statements and assurances
as the Issuer or the Trustee shall require for accomplishing the purposes of
the Financing Documents.
SECTION 7.4 Inspection of Records
The Company will at any and all times, upon the written request of the
Issuer or the Trustee and with reasonable notice, permit the Issuer or the
Trustee by their representatives to inspect the Project and any books, records,
reports and other papers of the Company relating to the Project, and to make
copies therefrom, and will afford and procure a reasonable opportunity to make
any such inspection, and the Company will furnish to the Issuer and the Trustee
any and all information as the Issuer or the Trustee may reasonably request
with respect to the performance by the Company of its covenants in this Loan
Agreement.
SECTION 7.5 Indemnity of Issuer and Trustee
If the Issuer or the Trustee, or any director, member or officer of
agent thereof (collectively the "Indemnified Persons") is made a party
defendant to any litigation concerning the Project or any part thereof, or
concerning the occupancy thereof by the Company, or concerning the issuance of
the Bonds, the Company agrees to indemnify, defend and hold Indemnified Persons
harmless from and against any and all liability by reason of such litigation,
including reasonable attorneys' fees and expenses incurred by the Indemnified
Persons, whether or not any such litigation is prosecuted to judgment. If the
Issuer commences an action against the Company to enforce any of the terms of
any of the documents executed in connection with the Bonds, or for the breach
by the Company of any such terms, the Company shall pay to
23
the Issuer reasonable attorneys' fees and expenses in connection with such
action, and the right to such attorneys' fees and expenses shall be enforceable
whether or not such action is prosecuted to judgment. If the Company breaches
any term of any of the documents executed in connection with the Bonds, the
Issuer may employ an attorney or attorneys to protect its rights, and in the
event of such employment following any such breach by the Company, the Company
shall pay the reasonable attorneys' fees and expenses of the Issuer so
incurred, whether or not any action is actually commenced against the Company
by reason of such breach.
It is the intention of the parties that the Indemnified Persons shall
not incur pecuniary liability by reason of the terms of this Agreement or by
reason of the undertakings of the Indemnified Persons required hereunder in
connection with the issuance of the Bonds or execution of this Agreement or the
Indenture or in connection with the performance of any act by the Indemnified
Persons requested by the Company or in any way arising from the transaction
with which this Agreement is a part arising in any manner in connection with
the Project or financing of the Project; nevertheless, if any of the
Indemnified Persons should incur any such pecuniary liability, then in such
event the Company shall indemnify and hold the Indemnified Persons harmless
against all claims by and on behalf of any person arising out of the same, and
all costs incurred in connection with any claim, action or proceeding brought
thereon, and upon notice from the Issuer, the Company shall defend the
Indemnified Persons in any such action, or proceeding in consultation with
counsel for the Issuer. In the event any proceeding shall be initiated against
any of the Indemnified Persons, the Company shall furnish a defense to the
Indemnified Persons, shall be permitted to control, in the exercise of its
reasonable judgment, the defense of any such action or proceeding, and pay all
fees of counsel to the Issuer. Any settlement of litigation that involves the
Issuer shall require the consent of the Issuer.
Notwithstanding anything to the contrary contained herein, the Company
shall have no liability to indemnify the Issuer or the Trustee against claims
or damages resulting from the Issuer's or the Trustee's own gross negligence or
willful misconduct.
24
ARTICLE 8
Remedies
SECTION 8.1 Events of Default
Any one or more of the following shall constitute an event of default
(a "Loan Default") under this Loan Agreement (whatever the reason for such
event and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) default in the payment of any Basic Payment when such
Basic Payment becomes due and payable; or
(2) default in the performance, or breach, of any
covenant or warranty of the Company in this Loan Agreement (other than
a covenant or warranty, a default in the performance or breach of
which is elsewhere in this Section specifically dealt with), and the
continuance of such default or breach for a period of 90 days after
there has been given, by registered or certified mail, to the Company
and the Credit Obligor by the Issuer or by the Trustee a written
notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "notice of default"
hereunder; provided, however, that if the alleged breach or
nonperformance is of such a nature that it cannot reasonably be cured
within such period, such breach or nonperformance shall not constitute
a Loan Default so long as the Company institutes and is pursuing with
due diligence corrective action with respect thereto; or
(3) the occurrence of an Event of Default under the
Indenture.
SECTION 8.2 Remedies on Default
If a Loan Default occurs and is continuing, the Credit Obligor (or, if
the Credit Obligor Indebtedness has been Fully Paid, the Issuer) may exercise
any of the following remedies:
(1) declare all amounts for the remainder of the term of
this Loan Agreement to be immediately due and payable in an amount not
to exceed the principal amount of all Outstanding Bonds, plus the
redemption premium (if any) payable with respect thereto, plus the
interest accrued thereon to the date of such declaration; and
(2) take whatever legal proceedings may appear necessary
or desirable to collect the Payments then due, whether by declaration
or otherwise, or to enforce any obligation or covenant or agreement of
the Company under the Loan Agreement or by law.
25
SECTION 8.3 No Remedy Exclusive
No remedy herein conferred upon or reserved to the Issuer, the Credit
Obligor 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 Loan Agreement or
now or hereafter existing at law or in equity or by statute. No delay or
omission to exercise any right or power accruing upon any default shall impair
any such right or power or shall be construed to be a waiver thereof but any
such right or power may be exercised from time to time and as often as may be
deemed expedient.
SECTION 8.4 Agreement to Pay Attorneys' Fees and Expenses
If the Company should default under any of the provisions of this Loan
Agreement and the Issuer, the Credit Obligor or the Trustee should employ
attorneys or incur other expenses for the collection of Basic Payments or the
enforcement of performance or observance of any agreement or covenant on the
part of the Company herein contained, the Company will on demand therefor pay
to the Issuer, the Credit Obligor or the Trustee (as the case may be) the
reasonable fees of such attorneys and such other expenses so incurred.
SECTION 8.5 No Additional Waiver Implied by One Waiver
In the event any agreement contained in this Loan Agreement should be
breached by either party and thereafter waived by the other party, such waiver
shall be limited to the particular breach so waived and shall not be deemed to
waive any other breach hereunder.
SECTION 8.6 Remedies Subject to Applicable Law
All rights, remedies and powers provided by this Article may be
exercised only to the extent the exercise thereof does not violate any
applicable provision of law in the premises, and all the provision of this
Article are intended to be subject to all applicable mandatory provisions of
law which may be controlling in the premises and to be limited to the extent
necessary so that they will not render this Loan Agreement invalid or
unenforceable.
26
ARTICLE 9
PREPAYMENT UNDER AGREEMENT
SECTION 9.1 Option to Prepay Basic Payment Amounts Under Agreement in
Whole in Certain Events. The Company shall have, and is hereby granted, the
option to prepay the basic payment amounts required to be made under Section
4.2 and to cancel or terminate this Agreement if any of the following shall
have occurred:
(a) the Project shall have been damaged or destroyed to such
an extent that, in the judgment of the Company, (i) it cannot be
reasonably restored within a period of twelve (12) consecutive months
to the condition thereof immediately preceding such damage or
destruction, (ii) the Company is thereby prevented from carrying on
its normal operations at the Project for a period of twelve (12)
consecutive months, or (iii) it would not be economically feasible for
the Company to replace, repair, rebuild or restore the same;
(b) title in and to, or the temporary use of, all or
substantially all of the Project shall have been taken under the
exercise of the power of eminent domain by any governmental authority,
or person acting under governmental authority (including such a taking
as, in the judgment of the Company, results in the Company being
prevented thereby from carrying on its normal operations at the
Project for a period of twelve (12) consecutive months); or
(c) as a result of any changes in the Constitution of the
State or the Constitution of the United States of America or by
legislative or administrative action (whether State or Federal) or by
final decree, judgment, decision or order of any court or
administrative body (whether State or Federal), this Agreement shall
have become void or unenforceable or impossible of performance in
accordance with the intent and purposes of the parties as expressed
herein.
To exercise such option, the Company (i) shall, within ninety (90) days
following the event giving rise to the Company's desire to exercise such
option, deliver to the Issuer and to the Trustee a certificate, executed by a
duly authorized representative of the Company , stating (A) the event giving
rise to the exercise of such option, (B) that the Company has directed the
Trustee to redeem all of the Bonds in accordance with the provisions of the
Indenture, and (C) the date upon which such prepayment is to be made, which
date shall not be less than forty-five (45) days nor more than ninety (90) days
from the date such notice is mailed; and (ii) shall make arrangements
satisfactory to the Trustee for the giving of the required notice of
redemption.
The prepayment price which shall be paid to the Trustee by the Company
on or prior to its exercise of the option granted in this Section shall be the
sum of the following:
(1) an amount of money which, when added to the amount then
on deposit in the Bond Fund, will be sufficient to pay
27
and redeem all of the then outstanding Bonds on the earliest
applicable redemption date including, without limitation, principal
plus accrued interest thereon to said redemption date, plus
(2) an amount of money equal to the Trustee's and paying
agents' fees and expenses under the Indenture accrued and to accrue
until such final payment and redemption of the Bonds.
The amount of any drawing under the Letter of Credit on any redemption
date specified above shall be credited against the prepayment price required to
be paid by the Company, and the use of any other moneys for the payment of
principal and interest on the Bonds shall be subject to the limitations set
forth in the Indenture.
SECTION 9.2 Other Options to Prepay Basic Payment Amounts Under
Agreement. The Company shall have, and is hereby granted, the option to prepay
the basic payment amounts required to be made under Section 4.2 in whole, at
any time, or in part on any Bond Payment Date (as defined in the Indenture), by
(i) depositing irrevocably with the Trustee in accordance with Article 16 of
the Indenture sufficient moneys pursuant to the Indenture, to pay the principal
of and interest on all of the Bonds due and to become due on or prior to the
redemption date (if the Bonds are to be redeemed) or maturity thereof, (ii)
paying to the Trustee all Trustee's fees and expenses due in connection with
the payment or redemption of any such Bonds, and (iii) if any Bonds are to be
redeemed on any date prior to their maturity, giving the Trustee irrevocable
instructions to redeem such Bonds on such date and either evidence satisfactory
to the Trustee that all redemption notices required by the Indenture have been
given or irrevocable power authorizing the Trustee to give such redemption
notices.
SECTION 9.3 Obligation to Prepay Basic Payment Amounts Under
Agreement Under Certain Circumstances. If there occurs a Determination of
Taxability, the Company shall be obligated to prepay as promptly as practical
all payments required to be made under Section 4.2 and shall pay to the Trustee
for deposit in the Bond Fund, the principal amount of such Bonds plus accrued
interest to such redemption date.
Said accelerated payments shall also include expenses of redemption
and the fees and expenses of the Trustee and the paying agent(s) accrued and to
accrue until such final payment and redemption of the Bonds.
The amount of any drawing under the Letter of Credit on such
redemption date shall be credited against the payments required to be made by
the Company on such redemption date.
The Company shall give prompt written notice to the Issuer, the Credit
Obligor and the Trustee of its receipt of any oral or written advice from the
Internal Revenue Service that an Event of Taxability has occurred.
Promptly upon receipt of written notice of the occurrence of a
Determination of Taxability, the Trustee shall cause notice thereof to be given
to the bondholders in the same manner as is provided in the Indenture for
notices of redemption. In such notice to bondholders, the Trustee may make
provisions for obtaining advice from bondholders, in such form as shall be
deemed
28
appropriate, respecting relevant assessments made on such bondholders by the
Internal Revenue Service, so as to be able, if appropriate, to verify the
existence, present or future, of a Determination of Taxability.
The Company shall immediately instruct the Trustee to apply the
accelerated payments made by the Company as a result of such Determination of
Taxability, together with any moneys then held by the Trustee, in the order of
priority set forth in Section 504 of the Indenture, on the earliest possible
date after the giving of the required notice of redemption under the Indenture,
to the redemption of Bonds or to the payment to the holders of Bonds which will
mature or will be redeemed prior to the redemption date contemplated by this
Section, all in accordance with the requirements hereinbefore set forth in this
Section. A copy of such instructions shall be forwarded by the Company to the
Issuer.
Upon the redemption date contemplated by this Section, provided there
has been deposited with the Trustee the total amount as required, such amount
shall constitute the total compensation due the Issuer and the holders of the
Bonds as a result of an occurrence of such Determination of Taxability and the
Company shall not be deemed to be in default hereunder by reason of the
occurrence of such Determination of Taxability.
Upon the occurrence of a Determination of Taxability, any other option
of the Company to prepay the basic payment amounts required to be made under
Article 4 shall be superseded by its prepayment of the basic payment amounts
required to be made under Article 4 under this Section for the amounts herein
set forth.
The provisions of this Section shall survive the termination of this
Agreement.
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ARTICLE 10
Miscellaneous
SECTION 10.1 Issuer's Liabilities Limited
(a) The covenants and agreements contained in this Loan Agreement
shall never constitute or give rise to a personal or pecuniary liability or
charge against the general credit of the Issuer, and in the event of a breach
of any such covenant or agreement, no personal or pecuniary liability or charge
payable directly or indirectly from the general assets or revenues of the
Issuer shall arise therefrom. Nothing contained in this Section, however,
shall relieve the Issuer from the observance and performance of the covenants
and agreements on its part contained herein.
(b) No recourse under or upon any covenant or agreement of this
Loan Agreement shall be had against any past, present or future incorporator,
officer or member of the Board of Directors of the Issuer, or of any successor
corporation, either directly or through the Issuer, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment
or penalty or otherwise; it being expressly understood that this Loan Agreement
is solely a corporate obligation, and that no personal liability whatever shall
attach to, or is or shall be incurred by, any incorporator, officer or member
of the Board of Directors of the Issuer or any successor corporation, or any of
them, under or by reason of the covenants or agreements contained in this Loan
Agreement.
SECTION 10.2 Corporate Existence of Issuer
The Issuer shall not consolidate with or merge into any other
corporation or transfer its property substantially as an entirety, except as
provided in Section 10.7 of the Indenture.
SECTION 10.3 Notices
(a) Any request, demand, authorization, direction, notice,
consent, or other document provided or permitted by this Loan Agreement to be
made upon, given or furnished to, or filed with, the Issuer, the Company, the
Trustee or the Credit Obligor shall be sufficient for every purpose hereunder
if in writing and (except as otherwise provided in this Loan Agreement) either
(i) delivered personally to the party or, if such party is not an individual,
to an officer, partner or other legal representative of the party to whom the
same is directed (provided that any document delivered personally to the
Trustee must be delivered at its Principal Office during normal business hours)
at the hand delivery address specified in Section 17.01 of the Indenture or
(ii) mailed by first-class, registered or certified mail, postage prepaid,
addressed as specified in Section 17.01 of the Indenture, or (iii) sent by
telex or telecopy to the number specified in Section 17.01 of the Indenture.
Any of such parties may change the address for receiving any such notice or
other document by giving notice of the change to the other parties as provide
in this Section.
(b) Any such notice or other document shall be deemed delivered
when actually received by the party to whom directed (or, if such party is not
an individual, to an officer, partner or other
30
legal representative of the party) at the address specified pursuant to this
Section, or, if sent by mail, 3 days after such notice or document is deposited
in the United States mail, addressed as provided above.
SECTION 10.4 Successors and Assigns
All covenants and agreements in this Loan Agreement by the Issuer or
the Company shall bind their respective successors and assigns, whether so
expressed or not.
SECTION 10.5 Benefits of Loan Agreement
Nothing in this Loan Agreement, express or implied, shall give to any
person, other than the parties hereto and their successors hereunder, the
Trustee and the Holders of the Bonds, any benefit or any legal or equitable
right, remedy or claim under this Loan Agreement.
31
IN WITNESS WHEREOF, the Issuer and the Company have caused this
Agreement to be executed in their respective corporate names and their
respective corporate seals to be hereunto affixed and attested by their duly
authorized officers, all as of the date first above written.
(SEAL) DEVELOPMENT AUTHORITY OF CLAYTON COUNTY
Attest: By: /s/ C.S. Conklin
------------------------------
Chairman
/s/ Thomas B. Clonts
---------------------------
Secretary
32
(SEAL) LEAR SEATING CORPORATION
Attest: By: /s/ Donald J. Stebbins
------------------------------
Title:
By: /s/ Joseph F. McCarthy
------------------------
Title:
33
LEAR SEATING CORPORATION
LEGAL DESCRIPTION OF REAL ESTATE
EXHIBIT A
ALL THAT TRACT OR PARCEL OF LAND lying and being in Land Lot 21 of the
13th District of Clayton County, Georgia, and being more particularly described
as follows:
BEGINNING at a point on the southwestern right-of-way of International
Parkway (60' R/W) which point is located 1,148.67 feet southeast from the
intersection of the southwestern right-of-way of International Parkway and the
southern right-of-way of Service Road "B"; run thence partial along
International Parkway an arc distance of 442.31 feet (said arc being subtended
by a chord bearing South 63 degrees 21 minutes 20 seconds East and having a
length of 436.78 feet); running thence South 10 degrees 55 minutes 25 seconds
West a distance of 126.25 feet to an iron pin set; running thence South 00
degrees 26 minutes 11 seconds East a distance of 634.18 feet to an iron pin
set; running thence South 18 degrees 08 minutes 47 seconds West a distance of
104.22 feet to an iron pin set on the northern right-of-way of I-285; thence
running North 71 degrees 16 minutes 50 seconds West a distance of 395.20 feet
an iron pin set; thence running North 62 degrees 48 minutes 47 seconds West a
distance of 283.48 feet to an iron pin set; thence North 63 degrees 25 minutes
33 seconds West a distance of 27.63 feet to an iron pin set; thence leaving the
right-of-way of I-285 running North 22 degrees 00 minutes 29 seconds East a
distance of 174.28 feet to an iron pin set; thence running North 52 degrees 22
minutes 41 seconds West a distance of 268.41 feet to an iron pin set; thence
running North 45 degrees 02 minutes 40 seconds East a distance of 649.48 feet
to an iron pin set, which point is the POINT OF BEGINNING.
The above described property contains 12.841 acres, more or less, and
is shown on and described according to that certain Property Survey prepared
for Lear Seating Corporation and Chicago Title Insurance Company by Rochester &
Associates, Inc., dated April 19, 1994, last revised May 11, 1994.
TOGETHER with those easements and other rights provided to "Owners" of
real property that are set forth in the Declaration of Protective Covenants for
Atlanta Tradeport by Atlanta Tradeport Associates recorded in Deed Book 1508,
Page 308, records of Clayton County, Georgia, as amended by that certain First
Amendment dated January 25, 1989, recorded at Deed Book 1529, page 590,
aforesaid records, and as further amended by that certain Second Amendment
dated May 6, 1991, recorded at Deed Book 1705, Page 46, aforesaid records
(collectively the "Declaration") to the extent the same benefit the parcel of
land described above. However, nothing contained shall be construed as a
A-1
34
LEAR SEATING CORPORATION
LEGAL DESCRIPTION OF REAL ESTATE
conveyance by Atlanta Tradeport Associates of any of its other easements or
rights under the Declaration (including its rights as the "Declarant"
thereunder or as an "Owner" of other parcels or any easements or rights of the
"Association" under the Declaration) or any other easements or rights
benefitting any other parcel of land that is subject to the Declaration.
A-2
35
EXHIBIT B
LEAR SEATING CORPORATION
MACHINERY AND EQUIPMENT LIST ($000'S)
PRODUCTION
QTY EACH AMOUNT TOTAL
--- ---- ------ -----
FRONT SEAT MARRIAGE FIXTURE 20 11 220
HALO FIXTURES 8 11 90
REAR 40/60 FIXTURES 8 7.5 60
R8C COMPRESSION FIXTURES 8 5 40
FSB FRAME ASSM 2 5 10
FSB TRIM TO FOAM 2 2 4
FSB CLOSE-OUT 2 2 4
FSC TRIM TO FOAM 2 3 6
FSC CLOSE-OUT 2 11 22
FSC TRACK FIXTURE 2 4 8
NUTRUNNERS 60 6 380
HOG RING GUNS 15
MISC. POWER TOOLS 50
BENCHES 17
REAR KITTING PALLETS 150 0.08 10
FRONT SEAT MANIPULATORS 10 11 110
BELT CONVEYOR OVER/UNDER 20
FRONT SEAT LINE CONVEYOR 637
REAR SEAT LINE 200
FINISHED GOODS 324
PALLET RETURN 175
SHIPPING SYSTEM 550
SOCIAL (LOCKERS TABLES) 70
SELF PIERCING RIVET GUN 3 12 36 $3038
---
MATERIALS
PART PRESENTATION TILT RACKS 6 10 60
TILT TABLES 3 3 9
RACKS ROLLERS/WAREHOUSE RACKS 60
SCALES 1 4 4
CELLULAR PHONES 2 1 2
TWO WAY RADIOS 20 1 20
END EFFECTORS 3 20 60
TRIM CARTS 20 3 60
CAGING 20
STRETCH WRAP 8
---
$303
B-1
36
EXHIBIT B
LEAR SEATING CORPORATION
MACHINERY AND EQUIPMENT LIST ($000'S)
QTY EACH AMOUNT TOTAL
--- ---- ------ -----
COMPRESSOR 2 65 130
BOILER 2 30 60
OVEN 2 40 80
STEAM PIPING 50
AIR PIPING 200
ELECTRICAL 200
INSTALL 200
GENERATOR 274
TELEPHONE 75
COMPACTOR 2 25 50
---
$1319
MAINTENANCE
BAND SAW 8
DRILL PRESS 3
CUT-OFF SAW 4
HAND TOOLS 5
MIG WELDER 7
ACETYLENE TORCH 1
CABINETS/SHELVES 12
SWEEPER 15
BENCHES 5
---
$60
QUALITY
H-POINT/CONTOUR BUCKS 3 30 90
OSCAR 20
SHAKE TEST UNIT 195
VERNIERS/CALIPERS 2
BLUE PRINT FILES 2
LAYOUT TABLE 7
---
$316
OFFICE EQUIPMENT
PACKAGE ADMINISTRATION 150
SYSTEMS
QUALITY
HUMAN RESOURCES
ENGINEERING
MATERIALS
PRODUCTION
SIGN/SECURITY 1 30 30
$180
----
GRAND TOTAL $5,216
======
B-2
37
EXHIBIT C
REQUISITION NO.
----
Amount Requested:
Total Disbursements to Date:
1. Each obligation for which a disbursement is hereby requested is
described in reasonable detail in Exhibit A hereto together with the name and
address of the person, firm or corporation to whom payment is due.
2. The bills, invoices or statements of account for each obligation
referenced in Exhibit A are attached hereto as Exhibit B.
3. The Company hereby certifies that:
(a) each obligation mentioned in Exhibit A has been properly
incurred, is a proper charge against the Construction Fund and has not
been the basis of any previous disbursement;
(b) the expenditure of the amount requested under this Requisition,
when added to all disbursements under previous Requisitions, will result
in at least ninety-five percent (95%) of the total of such disbursements,
other than disbursements for reasonable expenses incurred in connection
with the issuance of the Bonds, having been used (i) for the acquisition,
construction, reconstruction or improvement of land or property of a
character subject to the allowance for depreciation under the Code, or
(ii) for payment of amounts which are, for federal income tax purposes,
chargeable to the Project's capital account or would be so chargeable
either with a proper election by the Company or but for a proper
election by the Company to deduct such amounts; and
(c) the expenditures of the amount requested under this
Requisition, when added to all disbursements under previous Requisitions,
will result in no more than two percent (2%) of the aggregate face
amount of the Bonds being used for payment of Issuance Costs.
4. All capitalized terms herein shall have the meanings assigned
to them in the Loan Agreement dated as of September 1, 1994 among Development
Authority of Clayton County and Lear Seating Corporation.
This _______ day of ___________, 19____.
By:
------------------------------
Company Representative
C-1