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Exhibit 10(a)(1)
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LOAN AGREEMENT
BETWEEN
SOUTH CAROLINA JOBS-ECONOMIC DEVELOPMENT AUTHORITY
AND
CORE MATERIALS CORPORATION
$7,500,000 SOUTH CAROLINA JOBS-ECONOMIC DEVELOPMENT AUTHORITY
MULTI-MODE VARIABLE RATE INDUSTRIAL
DEVELOPMENT REVENUE BONDS, SERIES 1998
(CORE MATERIALS CORPORATION PROJECT)
DATED
AS OF
APRIL 1, 1998
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TABLE OF CONTENTS
Recitals..........................................................................................................1
ARTICLE I....................................................................................................... 3
DEFINITIONS............................................................................................ 3
Section 1.1. Use of Defined Terms........................................................ 3
Section 1.2. Definitions................................................................. 3
Section 1.3. Interpretation.............................................................. 9
Section 1.4. Captions and Headings....................................................... 10
ARTICLE II...................................................................................................... 11
REPRESENTATIONS........................................................................................ 11
Section 2.1. Representations of the Issuer............................................... 11
Section 2.2. Representations and Covenants of the Borrower............................... 11
Section 2.3. Actions under Section 144(a)(4) of the Code................................. 15
ARTICLE III..................................................................................................... 17
COMPLETION OF THE PROJECT; ISSUANCE OF THE BONDS....................................................... 17
Section 3.1. Acquisition, Construction, Installation, Equipment and
Improvement................................................................. 17
Section 3.2. Plans and Specifications.................................................... 17
Section 3.3. Issuance of the Bonds; Application of Proceeds.............................. 17
Section 3.4. Disbursements from the Project Fund......................................... 18
Section 3.5. Borrower Required to Pay Costs in Event Project Fund
Insufficient................................................................ 19
Section 3.6. Completion Date............................................................. 20
Section 3.7. Investment of Fund Moneys................................................... 20
Section 3.8. Rebate Fund................................................................. 23
ARTICLE IV...................................................................................................... 24
LOAN BY ISSUER; REPAYMENT OF THE LOAN; LOAN PAYMENTS
AND ADDITIONAL PAYMENTS....................................................................... 24
Section 4.1. Loan Repayment; Delivery of Note and Credit Facility........................ 24
Section 4.2. Additional Payments......................................................... 25
Section 4.3. Place of Payments........................................................... 25
Section 4.4. Obligations Unconditional................................................... 26
Section 4.5. Assignment of Agreement and Revenues........................................ 26
Section 4.6. Credit Facility............................................................. 26
ARTICLE V....................................................................................................... 27
ADDITIONAL AGREEMENTS AND COVENANTS.................................................................... 27
Section 5.1. Right of Inspection......................................................... 27
Section 5.2. Lease, Sale or Grant of Use by Borrower..................................... 27
Section 5.3. Indemnification............................................................. 27
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Section 5.4. Borrower Not to Adversely Affect Exclusion from Gross
Income of Interest on Bonds................................................. 28
Section 5.5. Borrower to Maintain Their Existence........................................ 28
Section 5.6. Undertaking to Provide Continuing Disclosure................................ 28
ARTICLE VI...................................................................................................... 29
REDEMPTION AND PURCHASE OF BONDS....................................................................... 29
Section 6.1. Optional Redemption......................................................... 29
Section 6.2. Extraordinary Optional Redemption........................................... 29
Section 6.3. Mandatory Redemption in Event of Inclusion in Gross
Income of Interest on Bonds................................................. 31
Section 6.4. Mandatory Redemption........................................................ 31
Section 6.5. Actions by Issuer........................................................... 31
ARTICLE VII..................................................................................................... 32
EVENTS OF DEFAULT AND REMEDIES......................................................................... 32
Section 7.1. Events of Default........................................................... 32
Section 7.2. Remedies on Default......................................................... 33
Section 7.3. No Remedy Exclusive......................................................... 34
Section 7.4. Agreement to Pay Attorneys' Fees and Expenses............................... 34
Section 7.5. No Waiver................................................................... 34
Section 7.6. Notice of Default........................................................... 35
ARTICLE VIII.................................................................................................... 36
MISCELLANEOUS.......................................................................................... 36
Section 8.1. Term of Agreement........................................................... 36
Section 8.2. Amounts Remaining in Funds.................................................. 36
Section 8.3. Notices..................................................................... 36
Section 8.4. Extent of Covenants of the Issuer; No Personal Liability.................... 37
Section 8.5. Binding Effect.............................................................. 37
Section 8.6. Amendments and Supplements.................................................. 37
Section 8.7. Execution Counterparts...................................................... 37
Section 8.8. Severability................................................................ 37
Section 8.9. Governing Law............................................................... 37
EXHIBIT A - Form of Note
EXHIBIT B - Project Facilities
EXHIBIT C - Project Site
EXHIBIT D - Form of Disbursement Request
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LOAN AGREEMENT
THIS LOAN AGREEMENT made and entered into as of April 1, 1998
between the South Carolina Jobs-Economic Development Authority, a public body
corporate and politic and an agency of the State of South Carolina (the
"Issuer"), and Core Materials Corporation, a Delaware Corporation (the
"Borrower"), under the following circumstances summarized in the following
recitals (the capitalized terms not defined in the recitals being used therein
as defined in Article I hereof):
A. The Issuer is a public body corporate and politic and an agency of
the State of South Carolina (the "State") created under the South Carolina
Jobs-Economic Development Fund Act, as amended, Title 41, Chapter 43, Code of
Laws of South Carolina, 1976 (the "Act"); and
B. The Issuer, acting by and through its Board of Directors, is
authorized and empowered under and pursuant to the provisions of the Act to
issue bonds in order to promote and develop the business and economic welfare of
the State, and encourage and assist in the location of new business enterprises
in the State and the expansion of existing business enterprises within the State
and thus provide maximum opportunities for the creation and retention of jobs
and improvement of the standard of living of the citizens of the State and in
the promotion and the advancement of industrial development in the State; and
C. The Issuer is further authorized by Section 41-43-110 of the Act to
issue revenue bonds, as defined in the Act to include notes, payable solely from
revenues and receipts from any revenue producing project and secured by a pledge
of said revenues and receipts; and
D. The Issuer has been duly organized pursuant to the Act; and
E. In order to further the purposes of the Act, the Issuer proposes to
undertake the financing of the costs of acquiring by construction and purchase a
facility for compression molding of sheet molding composites and related
activities, all constituting a business enterprise as described in the Act (the
"Project") located in Cherokee County, South Carolina, and to obtain the funds
therefor by the issuance of its Bonds (as hereinafter defined) under a Trust
Indenture securing such Bonds, between the Issuer and The Huntington National
Bank, Columbus, Ohio, as trustee, dated as of the date hereof (the "Indenture");
and
F. The Issuer proposes to loan the proceeds from the sale of the Bonds
to the Borrower to acquire, construct and equip the Project upon the terms and
conditions hereinafter set forth; and
G. It has been determined that the financing of the acquisition,
construction and equipping of the Project will require the issuance, sale and
delivery by the Issuer of a series of bonds in the aggregate principal amount of
Seven Million Five Hundred Thousand Dollars ($7,500,000) (the "Bonds"); and
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NOW, THEREFORE, for and in consideration of the premises and
the mutual covenants herein made, and subject to the conditions herein set
forth, the parties hereto agree as follows: provided, that any obligation of the
Issuer created by or arising out of this Agreement is a limited obligation of
the Issuer and shall never constitute a general obligation or indebtedness of
the Issuer or of the State or of any agency or political subdivision of the
State within the meaning of any State constitutional provision or statutory
limitation and does not and shall never constitute or give rise to a pecuniary
liability of the Issuer or of the State or of any agency or political
subdivision of the State or a charge against the general credit or taxing power
of the Issuer, the State or of any political subdivision or agency of the State
of South Carolina but shall be payable solely from the Revenues (as defined in
the Indenture), anything herein contained to the contrary by implication or
otherwise notwithstanding, and; provided further, that the Issuer only shall be
obligated to fund the Loan from proceeds of the Bonds.
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ARTICLE I
DEFINITIONS
Section 1.1. Use of Defined Terms. In addition to the words
and terms defined elsewhere in this Agreement or by reference to another
document, the words and terms set forth in Section 1.2 hereof shall have the
meanings set forth therein unless the context or use clearly indicates another
meaning or intent. Such definitions shall be equally applicable to both the
singular and plural forms of any of the words and terms defined therein.
Capitalized terms used and not defined in this Agreement shall have the meanings
assigned to them in the Indenture.
Section 1.2. Definitions. As used herein:
"Act" means Title 41, Chapter 43 of the Code of Laws of South
Carolina 1976, as amended.
"Additional Payments" means the amounts required to be paid by
the Borrower pursuant to the provisions of Section 4.2 hereof.
"Agreement" means this Loan Agreement as amended or
supplemented from time to time.
"Alternate Credit Facility" means any direct pay letter of
credit or other credit enhancement or support facility that has terms which are
the same in all material respects (except for the term and maximum interest rate
but including coverage of accrued interest on the Bonds for 110 days if the
Bonds bear interest at the Weekly Rate or for 195 days if the Bonds bear
interest at the Semi-Annual Rate or the Long-Term Rate) as the then current
Credit Facility and (i) shall have a term of not less than one year (except if
the Long-Term Rate shall then be in effect, the term of such Alternate Credit
Facility shall not expire prior to (a) the first par redemption date plus 15
days or (b) the first redemption date plus 15 days if the Alternate Credit
Facility covers the redemption premium), (ii) shall be issued by a bank, a trust
company or other financial institution or credit provider, and (iii) the Trustee
shall have received the opinions required by Section 6.03 of the Indenture.
"Authenticating Agent" means the Authenticating Agent as
defined in the Indenture.
"Bank" means, initially, KeyBank National Association,
Cleveland, Ohio, and its successors and assigns in its capacity as issuer of the
Credit Facility and, in the event an Alternate Credit Facility is outstanding,
the issuer of the Alternate Credit Facility.
"Bond Fund" means the Bond Fund created in the Indenture.
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"Bond Resolution" means the resolution providing for the
issuance of the Bonds and approving this Agreement, the Indenture and related
matters.
"Bond Pledge Agreement" means the Bond Pledge Agreement, dated
as of even date herewith, between the Borrower, the Trustee and the Bank, as
amended or supplemented from time to time.
"Bonds" means the $7,500,000 South Carolina Jobs-Economic
Development Authority Multi-Mode Variable Rate Industrial Development Revenue
Bonds, Series 1998 (Core Materials Corporation Project).
"Bond Service Charges" means, for any period or payable at any
time, the principal of, premium, if any, and interest due on the Bonds for that
period or payable at that time whether due at maturity or upon acceleration or
redemption.
"Bond Year" means Bond Year, as defined in the Indenture.
"Borrower" means Core Materials Corporation, a Delaware
corporation, and its lawful successors and assigns to the extent permitted by
this Agreement.
"Business Day" means any day of the year other than (i) a
Saturday or Sunday, (ii) any day on which banks located in either Cleveland,
Ohio, or the principal corporate trust office of the Trustee is located are
required or authorized by law to remain closed, or (iii) any day on which the
New York Stock Exchange is closed.
"Code" means the Internal Revenue Code of 1986, as amended,
including, when appropriate, the statutory predecessor of the Code, and all
applicable regulations (whether proposed, temporary or final) under that Code
and the statutory predecessor of the Code, and any official rulings and judicial
determinations under the foregoing applicable to the Bonds.
"Completion Date" means the date of completion of the Project
evidenced in accordance with the requirements of Section 3.6 hereof.
"Construction Period" means the period between the beginning
of the acquisition, construction, installation, equipment or improvement of the
Project or the date on which the Bonds are delivered to the Original Purchaser,
whichever is earlier, and the Completion Date.
"Conversion" means (a) any conversion from time to time in
accordance with the terms of the Indenture of the Bonds from one Interest Rate
Mode to another Interest Rate Mode and (b) the end of any Long-Term Rate Period.
"Conversion Date" means the first date any Conversion becomes
effective.
"Counsel" means Counsel as defined in the Indenture.
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"Credit Facility" means the Credit Facility as defined in the
Indenture.
"Credit Facility Account" means the Credit Facility Account
created under Section 5.01 of the Indenture.
"Defeasance Account" means the Defeasance Account created
under Section 5.01 of the Indenture.
"Designated Representative" means the person at the time
designated to act on behalf of the Borrower by written certificate furnished to
the Issuer, the Bank, and the Trustee, containing the specimen signature of that
person and signed on behalf of the Borrower by a duly authorized officer. That
certificate may designate an alternate or alternates. In the event that all
persons so designated become unavailable or unable to act and the Borrower fail
to designate a replacement within 10 days after such unavailability or inability
to act, the Trustee may appoint an interim Designated Representative until such
time as the Borrower designate that person.
"Eligible Investments" means Eligible Investments as defined
in the Indenture.
"Engineer" means an individual or firm acceptable to the
Trustee and qualified to practice the profession of engineering or architecture
under the laws of the State.
"Event of Default" means any of the events described as an
Event of Default in Section 7.1 hereof.
"Force Majeure" means any of the causes, circumstances or
events described as constituting Force Majeure in Section 7.1. hereof.
"Holder" or "Holder of a Bond" means the Person in whose name
a Bond is registered on the Register.
"Indenture" means the Trust Indenture, dated as of even date
herewith, between the Issuer and the Trustee, as amended or supplemented from
time to time.
"Issuer" means the South Carolina Jobs-Economic Development
Authority, a public body politic and corporate and an agency of the State, and
its successors and assigns.
"Interest Rate Mode" means the Weekly Rate, the Semi-Annual
Rate or the Long- Term Rate.
"Loan" means the loan by the Issuer to the Borrower of the
proceeds received from the sale of the Bonds.
"Loan Payment Date" means, (a) while the Bonds bear interest
at the Weekly Rate, each Interest Payment Date, (b) while the Bonds bear
interest at the Semi-Annual or Long-
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Term Rate, the first day of each January, April, July and October, or (c) any
other date on which any principal of or interest or any premium on the Bonds
shall be due and payable, whether at maturity, upon acceleration, call for
redemption or otherwise.
"Loan Payments" means the amounts required to be paid by the
Borrower in repayment of the Loan pursuant to the provisions of the Note and of
Section 4.1 hereof.
"Long-Term Rate" means the Long-Term Rate on the Bonds
established in accordance with Section 2.02(c)(iii) of the Indenture.
"Long-Term Rate Period" means the Long-Term Rate Period as
defined in the Indenture.
"Note" means the non-negotiable promissory note of the
Borrower, dated as of even date with the Bonds, in the form attached hereto as
Exhibit A and in the principal amount of $7,500,000, evidencing the obligation
of the Borrower to make Loan Payments (as defined in the Agreement).
"Notice Address" means:
(a) As to the Issuer: South Carolina Jobs-Economic
Development Authority
1201 Main Street, Suite 1750
Columbia, South Carolina 29201
Attention: Elliott Franks, III,
Executive Director
(b) As to the Borrower: Core Materials Corporation
800 Manor Park Drive
Columbus, Ohio 43228-0183
Attention: Kevin L. Barnett
(c) As to the Trustee:
and Tender Agent The Huntington National Bank
The Huntington Center, HC 1112
41 South High Street
Columbus, Ohio 43215
Attention: Corporate Trust Department
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As to the Bank: KeyBank National Association
127 Public Square
Cleveland, Ohio 44114-1306
Attention: International Department
with a copy to:
KeyBank National Association
88 East Broad Street, 2nd Floor
Columbus, Ohio 43215
Attention: Roger Campbell
(e) As to the Key Capital Markets, Inc.
Remarketing Agent: 127 Public Square
Structured Capital Markets Group
OH-01-27-0419
Cleveland, Ohio 44114
Attention: Trading and Underwriting
or such additional or different address, notice of which is given under Section
8.3 hereof.
"Original Purchaser" means the Person or Persons who purchase
the Bonds upon their initial issuance and delivery.
"Paying Agent" means the Paying Agent as defined in the
Indenture.
"Person" or words importing persons mean firms, associations,
partnerships (including without limitation, general and limited partnerships),
joint ventures, societies, estates, trusts, corporations, public or governmental
bodies, other legal entities and natural persons.
"Placement Agent" means Key Capital Markets, Inc., Cleveland,
Ohio.
"Plans and Specifications" means the Borrower's plans and
specifications describing the Project Facilities as now prepared and as they may
be changed as hereinafter provided.
"Private Placement Memorandum" means the Private Placement
Memorandum dated as of May 7, 1998 and distributed by the Placement Agent in
connection with the sale of the Bonds.
"Project" means, collectively, the Project Site and the
Project Facilities, together constituting a "project" as defined in the Act.
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"Project Costs" means the costs of the Project specified in
Section 3.4 hereof.
"Project Facilities" means the Project Facilities described in
Exhibit B hereto, together with any additions, modifications and substitutions
to those facilities.
"Project Fund" means the Project Fund created in the
Indenture.
"Project Purposes" means the acquisition, construction,
furnishing, equipping and improving of real and personal property comprising an
industrial facility, for use by the Borrower or its designee or assignee for
compression molding of sheet molding composites and any other use which may be
permitted by the Act and this Agreement.
"Project Site" means the real estate described in Exhibit C
hereto, and any additions thereto, less any removals therefrom.
"Rebate Fund" means the Rebate Fund created under Section 5.05
of the Indenture.
"Redemption Premium Account" means the Redemption Premium
Account created in the Indenture.
"Register" means the books kept and maintained by the
Registrar for the registration and transfer of Bonds pursuant to Section 2.04 of
the Indenture.
"Registrar" means the Registrar as defined in the Indenture.
"Reimbursement Agreement" means the Reimbursement Agreement,
dated as of April 1, 1998, between the Borrower and the Bank, as amended or
supplemented from time to time.
"Remarketing Agent" means, initially, Key Capital Markets,
Inc., Cleveland, Ohio and any Person meeting the qualifications of, and
designated from time to time to act as Remarketing Agent under, Section 12.01 of
the Indenture.
"Remarketing Agreement" means the Remarketing Agreement, dated
as of April 1, 1998, among the Borrower, the Remarketing Agent and the Issuer in
connection with the remarketing of the Bonds.
"Remarketing Proceeds Account" means the Remarketing Proceeds
Account created in the Indenture.
"Revenues" means (a) the Loan Payments, (b) all amounts
payable to the Trustee with respect to the principal or redemption price of, or
interest on, the Bonds (i) by the Borrower as required hereunder, (ii) upon
deposit in the Bond Fund from the proceeds of the
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Bonds; and (iii) by the Credit Facility Issuer under a Credit Facility, and (c)
investment income with respect to any moneys held by the Trustee in the Bond
Fund. The term "Revenues" does not include any moneys or investments in the
Rebate Fund.
"Semi-Annual Rate" means the semi-annual interest rate on the
Bonds established in accordance with Section 2.02(c)(ii) of the Indenture.
"State" means the State of South Carolina.
"Tender Agent" means, initially, The Huntington National Bank,
Columbus, Ohio and any successor Tender Agent as determined or designated under
or pursuant to the Indenture.
"Trustee" means The Huntington National Bank, Columbus, Ohio,
until a successor Trustee shall have become such pursuant to the applicable
provisions of the Indenture, and thereafter "Trustee" shall mean the successor
Trustee.
"Unassigned Issuer's Rights" means all of the rights of the
Issuer to receive Additional Payments under Section 4.2 hereof, to be held
harmless and indemnified under Section 5.3 hereof, to be reimbursed for
attorneys' fees and expenses under Section 7.4 hereof, and to give or withhold
consent to amendments, changes, modifications, alterations and termination of
this Agreement under Section 8.6 hereof.
"Weekly Rate" means the weekly rate of interest on the Bonds
established in accordance with Section 2.02(c)(i) of the Indenture.
Section 1.3. Interpretation. Any reference herein to the
Issuer, to the Board of Directors of the Issuer or to any member or officer of
either includes entities or officials succeeding to their respective functions,
duties or responsibilities pursuant to or by operation of law or lawfully
performing their functions.
Any reference to a section or provision of the Constitution of
the State or the Act, or to a section, provision or chapter of the South
Carolina Code of Laws 1976, as amended, or to any statute of the United States
of America, includes that section, provision or chapter or statute as amended,
modified, revised, supplemented or superseded from time to time; provided, that
no amendment, modification, revision, supplement or superseding section,
provision or chapter or statute shall be applicable solely by reason of this
provision, if it constitutes in any way an impairment of the rights or
obligations of the Issuer, the Holders, the Trustee, the Bank or the Borrower
under this Agreement.
Unless the context indicates otherwise, words importing the
singular number include the plural number, and vice versa; the terms "hereof",
"hereby", "herein", "hereto", "hereunder" and similar terms refer to this
Agreement; and the term "hereafter" means after, and the term "heretofore" means
before, the date of delivery of the Bonds. Words of any gender include the
correlative words of the other genders, unless the sense indicates otherwise.
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Section 1.4. Captions and Headings. The captions and headings
in this Agreement are solely for convenience of reference and in no way define,
limit or describe the scope or intent of any Articles, Sections, subsections,
paragraphs, subparagraphs or clauses hereof.
(End of Article I)
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ARTICLE II
REPRESENTATIONS
Section 2.1. Representations of the Issuer. The Issuer
represents that: (a) it is duly organized and validly existing under the laws of
the State; (b) it has duly accomplished all conditions necessary to be
accomplished by it prior to the issuance and delivery of the Bonds and the
execution and delivery of this Agreement and the Indenture; (c) it is not in
violation of or in conflict with any provisions of the laws of the State which
would impair its ability to carry out its obligations contained in this
Agreement or the Indenture; (d) it is empowered to enter into the transactions
contemplated by this Agreement and the Indenture; (e) it has duly authorized the
execution, delivery and performance of this Agreement and the Indenture; and (f)
it will do all things in its power in order to maintain its existence or assure
the assumption of its obligations under this Agreement and the Indenture by any
successor public body.
The Issuer makes no representation or warranty concerning the
suitability of the Project for the purpose for which it is being undertaken by
the Borrower. The Issuer has not made any independent investigation as to the
feasibility or creditworthiness of the Borrower. Any bond purchaser, assignee of
the Loan Agreement or any other party with interest in this transaction, shall
make its own independent investigation as to the creditworthiness and
feasibility of the Project, independent of any representation or warranties of
the Issuer.
Section 2.2. Representations and Covenants of the Borrower.
The Borrower represents and covenants that:
(a) Borrower is a corporation organized and existing
under the laws of the State of Delaware and is duly qualified
to conduct business in the State of South Carolina.
(b) The Borrower has full power and authority to
execute, deliver and perform this Agreement, the Reimbursement
Agreement, the Remarketing Agreement, the Bond Pledge
Agreement and the Note and to enter into and carry out the
transactions contemplated by those documents; and that the
execution, delivery and performance of those documents do not,
and will not, violate any provision of law applicable to it,
and do not, and will not, conflict with or result in a default
under any agreement or instrument to which it is a party or by
which it is bound, a violation of which would cause a material
adverse effect to the Borrower. This Agreement, the
Reimbursement Agreement, the Remarketing Agreement, the Bond
Pledge Agreement and the Note have, by proper action, been
duly authorized, executed and delivered by the Borrower and
all steps necessary have been taken to constitute this
Agreement, the Reimbursement Agreement, the Remarketing
Agreement, the Bond Pledge Agreement, and the Note valid and
binding obligations of the Borrower.
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(c) The acquisition and construction of the Project
were not commenced (within the meaning of Section 144(a) of
the Code) prior to the date that is 60 days prior to the date
of adoption of statements of "official intent" to issue the
Bonds by the Issuer toward issuance of the Bonds.
(d) The provision of financial assistance to be made
available to it under this Agreement from the proceeds of the
Bonds and the commitments therefor made by the Issuer have
induced the Borrower to expand within the boundaries of the
Issuer that business of the Borrower to be conducted by use of
the Project and such business has and will preserve and create
additional jobs and employment opportunities within the
boundaries of the Issuer.
(e) The Project will be completed in accordance with
the Plans and Specifications and the Project will be operated
and maintained in such manner as to conform with all
applicable zoning, planning, building, environmental and other
applicable governmental regulations and as to be consistent
with the Act.
(f) The Borrower shall not use or operate the Project
in any way which would affect the qualification of the Project
under the Act or impair the exclusion from gross income for
federal income tax purposes of the interest on the Bonds.
(g) The Borrower intends to use or operate the
Project in a manner consistent with the Project Purposes until
the date on which the Bonds have been fully paid and know of
no reason why the Project will not be so used or operated. If,
in the future, there is a cessation of that use or operation,
it will use its best efforts to resume that use or operation
or accomplish an alternate use or operation by the Borrower or
others which will be consistent with the Act and this
Agreement. If the Borrower voluntarily moves all or
substantially all of the equipment which is included in the
Project from within the boundaries of the Issuer, the Borrower
will promptly prepay the Loan and cause the Bonds to be
redeemed.
(h) Ninety-five percent (95%) or more of the net
proceeds of the Bonds (as defined in Section 150 of the Code)
will be used to provide manufacturing facilities (within the
meaning of Section 144(a)(12)(C) of the Code).
The Borrower will not request or authorize any
disbursement pursuant to Section 3.4 hereof, which, if paid,
would result in less than 95% of the net proceeds of the Bonds
not being used as described in the preceding paragraph. The
amount of the proceeds of the Bonds used to finance issuance
costs of the Bonds will not exceed 2% of the proceeds of the
Bonds (within the meaning of Section 147(g) of the Code) and
the Borrower will not request or authorize any disbursement
pursuant to Section 3.4 hereof, which, if paid, would result
in more
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than 2% of the proceeds of the Bonds being used to finance
issuance costs of the Bonds. None of the proceeds of the Bonds
will be used to provide working capital.
(i) The Project will be located entirely within
Cherokee County, South Carolina.
(j) There are no outstanding bonds with respect to
"facilities", as defined in Section 144(a)(4)(B) of the Code,
(i) which are to be or have been used by the Borrower or any
other "principal user" of the Project or any "related person"
to the Borrower or such other "principal user", as those terms
are used and defined in Sections 144(a)(2) and 144(a)(3) of
the Code, respectively, and which are located within Cherokee
County, South Carolina, and (ii) which bonds would have to be
taken into account in determining the aggregate face amount of
the Bonds as provided in Section 144(a)(4)(A)(ii) of the Code.
(k) For each "test-period beneficiary" (as defined in
Section 144(a)(10)(D) of the Code) of the Project, the sum of
(i) the aggregate authorized face amount of the Bonds
allocated in accordance with Section 144(a)(10)(C) of the Code
to such beneficiary and (ii) the aggregate outstanding
principal amount of any other tax-exempt obligation described
in Section 144(a)(10)(B)(ii) of the Code, wherever and
whenever issued, allocated to such beneficiary in accordance
with Section 144(a)(10)(C) of the Code, does not and will not
exceed $40,000,000.
(l) In accordance with Section 147(b) of the Code,
the weighted average maturity of the Bonds does not exceed
120% of the weighted average reasonably expected economic life
of the Project on the date of issuance of the Bonds.
(m) None of the proceeds of the Bonds will be used to
provide any private or commercial golf course, country club,
massage parlor, tennis club, skating facilities (including
roller skating, skateboard and ice skating), racquet sports
facility (including handball or racquetball court), hot tub
facility, suntan facility, racetrack, airplane, skybox or
other private luxury box, or health club facility; any
facility primarily used for gambling; or any store the
principal business of which is the sale of alcoholic beverages
for consumption off premises.
(n) None of the proceeds of the Bonds will be used to
provide facilities for retail food and beverage services
(except grocery stores), automobile sales or service, or the
provision of recreation or entertainment.
(o) Not more than 25% of the net proceeds of the
Bonds will be used, directly or indirectly to acquire land or
any interest therein, and any such land will not be used for
farming purposes.
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(p) None of the proceeds of the Bonds will be used,
to acquire existing property or any interest therein unless
the first use of such property was or is pursuant to such
acquisition or unless such acquisition met or meets the
requirements of Section 147(d)(2) of the Code.
(q) The information furnished by the Borrower and
used by the Issuer in preparing the certification pursuant to
Section 148 of the Code and information statement pursuant to
Section 149(e) of the Code, both referred to in the Bond
Resolution, as well as the federal tax election referred to in
the Bond Resolution, is accurate and complete as of the date
of the issuance of the Bonds.
(r) In connection with any lease or grant by the
Borrower of the use of the Project, the Borrower shall require
that the lessee or user of any portion of the Project shall
not (i) violate the covenant set forth in subsection (j) above
and (ii) use that portion of the Project in any manner which
would violate the covenants set forth in subsections (m) and
(n) above.
(s) The Bonds are not being issued to finance
facilities which are within or part of "a single building, an
enclosed shopping mall, or a strip of offices, stores or
warehouses using substantial common facilities" (within the
meaning of Section 144(a)(9) of the Code) which have
heretofore been financed with obligations issued and still
outstanding under Section 144(a) of the Code or the
corresponding provision of prior law.
(t) After the expiration of any applicable temporary
period under Section 148(d)(3) of the Code, at no time during
any Bond Year will the aggregate amount of gross proceeds of
the Bonds invested in nonpurpose investments with a yield
higher than the yield on the Bonds exceed 150 percent of the
debt service on the Bonds for such Bond Year and the aggregate
amount of gross proceeds of the Bonds invested in nonpurpose
investments with a yield higher than the yield on the Bonds,
if any, will be promptly and appropriately reduced as the
amount of outstanding Bonds are reduced, provided however that
the foregoing shall not require the sale or disposition of any
investments in nonpurpose investments if such sale or
disposition would result in a loss which exceeds the amount
which would be paid to the United States pursuant to Section
5.05 of the Indenture (but for such sale or disposition) at
the time of such sale or disposition if a payment under
Section 5.05 of the Indenture were due at such time.
At no time will any funds constituting gross proceeds
of the Bonds be used in a manner as to constitute a prohibited
payment under the applicable Regulations pertaining to, or in
any other fashion as would constitute failure of compliance
with, Section 148 of the Code.
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The terms "bond year", "proceeds", "gross proceeds",
"nonpurpose investments", "yield", "higher yielding
investments" and "debt service" have the meanings assigned to
them for purposes of Section 148 of the Code.
(u) In no event will the Borrower provide collateral
to the Bank which bears a yield higher than the yield on the
Bonds within the meaning of Section 148 of the Code and any
lawful regulations promulgated thereunder, except upon receipt
by the Borrower of an opinion of nationally recognized bond
counsel to the effect that the pledge of such collateral shall
not cause the interest on the Bonds to be included in gross
income for federal income tax purposes; provided, however,
that no such yield restriction or opinion is required with
respect to the pledge of any collateral that consists of
"tax-exempt bonds" within the meaning of Section 150(a)(6) of
the Code.
(v) No litigation at law or in equity nor any
proceeding before any governmental agency or other tribunal
involving the Borrower is pending or, to the knowledge of the
Borrower threatened, in which any liability of the Borrower is
not adequately covered by insurance and in which any judgment
or order would have a material and adverse effect upon the
business or assets of the Borrower or would materially and
adversely affect the Project, the validity of this Agreement,
the Bond Pledge Agreement, the Reimbursement Agreement, the
Remarketing Agreement and the Note or the performance of the
Borrower's obligations thereunder or the transactions
contemplated hereby.
Section 2.3. Actions under Section 144(a)(4) of the Code. The
Issuer is issuing the Bonds pursuant to an election made by it, at the
Borrower's request, under Section 144(a)(4) of the Code. In connection with that
election, the Borrower represents and covenants that:
(a) The sum of (i) the principal amount of the Bonds,
(ii) the outstanding face amount of prior issues, if any,
described in Section 144(a)(2) of the Code and (iii) the
amount of capital expenditures with respect to "facilities" as
defined in Section 144(a)(4)(B) of the Code, other than those
financed or to be financed out of proceeds of the Bonds or any
such prior issues or those mentioned in Section 144(a)(4)(C)
of the Code ("Capital Expenditures"), made during the
three-year period preceding the date of delivery of the Bonds
to the Placement Agent (the "Issue Date"), did not exceed
$10,000,000.
(b) During the three-year period following the Issue
Date, the Borrower does not intend to make or cause or permit
to be made any Capital Expenditures in an amount which would
cause the interest on the Bonds to be included in the gross
income of the Holders for federal income tax purposes.
(c) It will maintain adequate records regarding the
dates and amounts of all Capital Expenditures made from the
Issue Date through and including the
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third anniversary of the Issue Date and will furnish those
records to the Trustee upon request.
(d) In the event, on account of a lease, sublease,
management contract or other agreement relating to the
Project, or any portion thereof, permitted by the terms
hereof, any person other than the Borrower becomes a
"principal user" of the Project (as referred to in Section
2.2(j) hereof), the Borrower shall promptly advise the Trustee
of the identity of such person and furnish to the Trustee a
copy of such lease, sublease, management contract or other
agreement. In connection with any such lease, sublease,
management contract or other agreement, the Borrower will
require by covenant that any lessee, sublessee, manager or
user who is a "principal user" of the Project and any "related
person" thereto also shall comply with the covenants set forth
in subsection (b) of this Section as if those covenants were
made herein by such lessee, sublessee, manager, user or
"related person" thereto.
(End of Article II)
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ARTICLE III
COMPLETION OF THE PROJECT;
ISSUANCE OF THE BONDS
Section 3.1. Acquisition, Construction, Installation,
Equipment and Improvement. The Borrower shall acquire, construct, furnish, equip
and improve the Project Facilities on the Project Site with all reasonable
dispatch and in accordance with the Plans and Specifications, (b) shall pay when
due all fees, costs and expenses incurred in connection with that acquisition,
construction, installation, equipment and improvement from funds made available
therefor in accordance with this Agreement or otherwise, and (c) shall ask,
demand, sue for, levy, recover and receive all those sums of money, debts and
other demands whatsoever which may be due, owing and payable under the terms of
any contract, order, receipt, writing and instruction in connection with the
acquisition, construction, furnishing, equipment and improvement of the Project,
and shall enforce the provisions of any contract, agreement, obligation, bond or
other performance security with respect thereto. It is understood that the
Project is that of the Borrower and any contracts made by the Borrower with
respect thereto, whether construction contracts or otherwise, or any work to be
done by the Borrower on the Project are made or done by the Borrower in its own
behalf and not as agent or contractor for the Issuer.
Section 3.2. Plans and Specifications. The Borrower may revise
the Plans and Specifications from time to time, provided that no revision shall
be made which would change the Project Purposes, without the approval of the
Issuer, and no revision shall be made which would change the Project Purposes to
other than purposes permitted by the Act and the Code.
Section 3.3. Issuance of the Bonds; Application of Proceeds.
To provide funds to make the Loan for the purposes of paying the Project Costs,
the Issuer shall issue, sell and deliver the Bonds to the Original Purchaser.
The Bonds will be issued pursuant to the Indenture in the aggregate principal
amount, will bear interest, will mature and will be subject to redemption as set
forth therein. The Borrower hereby approves the terms and conditions of the
Indenture and the Bonds, and of the terms and conditions under which the Bonds
will be issued, sold and delivered.
The proceeds from the sale of the Bonds shall be loaned to the
Borrower and paid as follows: (a) a sum equal to any accrued interest, if any,
paid by the Original Purchaser shall be deposited with the Trustee and deposited
in the Bond Fund, and (b) the balance of the proceeds from the sale of the Bonds
shall be deposited in Project Fund. Pending disbursement pursuant to Section 3.4
hereof, the proceeds deposited in the Project Fund, together with any investment
earnings thereon, shall constitute a part of the Revenues assigned by the Issuer
to the payment of Bond Service Charges as provided in the Indenture.
Neither the Issuer nor the Borrower have or shall have any
interest in the Credit Facility, the Credit Facility Account, the Defeasance
Account, the Redemption Premium
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Account or the Remarketing Proceeds Account created under Section 5.01 of the
Indenture or the proceeds of the remarketing of the Bonds from whatever source
and wherever deposited.
Section 3.4. Disbursements from the Project Fund. Subject to
the provisions below, disbursements from the Project Fund shall be made only to
reimburse or pay the Borrower, or any person designated by the Borrower, for the
following Project Costs:
(a) Costs incurred directly or indirectly for or in
connection with the acquisition, construction, furnishing,
equipment or improvement of the Project, including costs
incurred in respect of the Project for preliminary planning
and studies; architectural, legal, engineering, accounting,
consulting, supervisory and other services; labor, services
and materials; and recording of documents and title work.
(b) Premiums attributable to any surety bonds and
insurance required to be taken out and maintained during the
Construction Period with respect to the Project Site and the
Project Facilities.
(c) Taxes, assessments and other governmental charges
in respect of the Project that may become due and payable
during the Construction Period.
(d) Costs incurred directly or indirectly in seeking
to enforce any remedy against any contractor or subcontractor
in respect of any actual or claimed default under any contract
relating to the Project Facilities.
(e) Financial, legal, accounting, printing and
engraving fees, charges and expenses, and all other such fees,
charges and expenses incurred in connection with the
authorization, sale, issuance and delivery of the Bonds,
including, without limitation, the fees and expenses of the
Trustee and any paying agent properly incurred under the
Indenture that may become due and payable during the
Construction Period; provided that the amount of the proceeds
of the Bonds used to finance issuance costs shall not exceed
2% of the aggregate face amount of the Bonds within the
meaning of Section 147(g) of the Code.
(f) Any other costs, expenses, fees and charges
properly chargeable to the cost of construction, furnishing,
equipment or improvement of the Project.
(g) Payment of interest on the Bonds or fees for
credit enhancement devices applicable to the Bonds, to the
extent such fees constitute a reasonable charge for the
transfer of credit risk, during the Construction Period.
(h) Payments made to the Rebate Fund.
Any disbursements from the Project Fund for the payment of the
Project Costs shall be made by the Trustee only upon the written order of the
Designated Representative with
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written approval of the Bank. Each such written order shall be in substantially
the form of the disbursement request attached hereto as Exhibit D and shall be
consecutively numbered and accompanied by certification by the Borrower that the
payments or reimbursements as requested are authorized by this Agreement and the
Reimbursement Agreement. Any disbursement for any item not described in, or the
cost for which item is other than as described in, the information statement
filed by the Issuer in connection with the issuance of the Bonds as required by
Section 149(e) of the Code and referred to in Section 2.2 hereof, shall be
accompanied by evidence satisfactory to the Trustee that the average reasonably
expected economic life of the facilities being financed by the Bonds is not less
than 5/6ths of the average maturity of the Bonds or, if such evidence is not
presented with the disbursement or at the request of the Trustee, by an opinion
of nationally recognized bond counsel to the effect that such disbursement will
not result in the interest on the Bonds becoming included in the gross income of
the Holders for federal income tax purposes. In case any contract provides for
the retention by the Borrower of a portion of the contract price, there shall be
paid from the Project Fund only the net amount remaining after deduction of any
such portion, and only when that retained amount is due and payable, may it be
paid from the Project Fund.
Any moneys in the Project Fund remaining after the Completion
Date and payment, or provision for payment, in full of the Project Costs, at the
direction of the Designated Representative, promptly shall be
(i) used for the purchase of Bonds in the open market
for the purpose of cancellation at prices not exceeding the
full market value thereof plus accrued interest thereon to the
date of payment therefor;
(ii) paid into the Bond Fund to be applied to the
redemption of the Bonds; or
(iii) used for a combination of the foregoing as is
provided in that direction.
In all such cases, any payments made pursuant to the immediately preceding
paragraph shall be made only to the extent that such use or application will
not, in the opinion of nationally recognized bond counsel or under ruling of the
Internal Revenue Service, result in the interest on the Bonds becoming included
in the gross income of the Holders for federal income tax purposes.
Notwithstanding the foregoing, upon the occurrence and
continuance of an "Event of Default" as defined in Section 10.01 of the
Indenture because of which acceleration of the principal amount of the Bonds has
been declared pursuant to Section 10.02 of the Indenture, any moneys remaining
in the Project Fund shall be promptly transferred by the Trustee to the Bond
Fund.
Section 3.5. Borrower Required to Pay Costs in Event Project
Fund Insufficient. If moneys in the Project Fund are not sufficient to pay all
Project Costs, the Borrower
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nonetheless will complete the Project in accordance with the Plans and
Specifications and shall pay all such additional Project Costs from their own
funds. The Borrower shall not be entitled to any reimbursement for any such
additional Project Costs from the Issuer, the Trustee, the Bank or any Holder;
nor shall they be entitled to any abatement, diminution or postponement of the
Loan Payments. This Section shall not be operative if and to the extent that
compliance with it would, or reasonably might be anticipated by the Borrower to,
involve a violation of any provision of the Agreement including, without
limitation, Sections 2.2 and 5.4 of the Agreement.
Section 3.6. Completion Date. The Borrower shall notify the
Issuer, the Trustee and the Bank of the Completion Date by a certificate signed
by the Designated Representative stating:
(a) the date on which the Project Facilities were
substantially completed,
(b) that all other facilities necessary in connection
with the Project have been acquired, constructed, furnished,
equipped and improved,
(c) that the acquisition, construction, furnishing,
equipment and improvement of the Project Facilities and those
other facilities have been accomplished in such a manner as to
conform with all applicable zoning, planning, building,
environmental and other similar governmental regulations,
(d) that except as provided in subsection (e) of this
Section, all costs of that acquisition, construction,
furnishing, equipment and improvement then or theretofore due
and payable have been paid, and
(e) the amounts which the Trustee shall retain in the
Project Fund for the payment of Project Costs not yet due or
for liabilities which the Borrower is contesting or which
otherwise should be retained and the reasons such amounts
should be retained.
That certificate may state that it is given without prejudice to any rights
against third parties which then exist or subsequently may come into being. The
Designated Representative shall include with that certificate a statement
specifically describing all items of personal property comprising a part of the
Project Facilities. The certificate shall be delivered as promptly as
practicable after the occurrence of the events and conditions referred to in
subsections (a) through (d) of this Section.
Section 3.7. Investment of Fund Moneys. At the oral (promptly
confirmed in writing) or written request of the Designated Representative, any
moneys held as part of the Bond Fund (except moneys in the Credit Facility
Account, Defeasance Account, Remarketing Proceeds Account, but including the
Redemption Premium Account created under Section 5.01 of the Indenture), the
Project Fund or the Rebate Fund shall be invested or reinvested by the
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Trustee in Eligible Investments. The Issuer and the Borrower each hereby
covenant that they will restrict that investment and reinvestment and the use of
the proceeds of the Bonds in such manner and to such extent, if any, as may be
necessary, after taking into account reasonable expectations at the time of
delivery of and payment for the Bonds, so that the Bonds will not constitute
arbitrage bonds under Section 148 of the Code.
Any officer of the Issuer having responsibility for issuing
the Bonds is authorized and directed, alone or in conjunction with any of the
foregoing or with any other officer, employee or agent of or consultant to the
Issuer, or with the Borrower or any officer, employee or agent of or consultant
to the Borrower, to give an appropriate certificate of the Issuer pursuant to
said Section 148, for inclusion in the transcript of proceedings for the Bonds,
setting forth the reasonable expectations of the Issuer regarding the amount and
use of the proceeds of the Bonds and the facts, estimates and circumstances on
which those expectations are based, that certificate to be premised on the
reasonable expectations and the facts, estimates and circumstances on which
those expectations are based, as provided by the Borrower, all as of the date of
delivery of and payment for the Bonds. The Borrower shall provide the Issuer
with, and the Issuer's certificate may be based on, a certificate of an
appropriate officer, employee or agent of or consultant to the Borrower setting
forth the reasonable expectations of the Borrower on the date of delivery of and
payment for the Bonds regarding the amount and use of the proceeds of the Bonds
and the facts, estimates and circumstances on which they are based.
In particular, the Issuer and the Borrower represent that
their present expectations are as follows:
(a) substantial binding obligations have been,
or within six (6) months of the date hereof
will be, entered into requiring payment of
an amount equal to not less than $100,000 or
2-1/2% of that portion of the costs of the
Project to be financed by the Bonds,
whichever is less, which substantial binding
obligations are comprised of contracts for
the acquisition, construction, furnishing,
improvement and equipping of the Project;
(b) thereafter, acquisition, construction,
furnishing, improvement and equipping of the
Project will proceed with due diligence to
completion;
(c) moneys received as accrued interest, if any,
upon the sale of the Bonds will be credited
to the Bond Fund and used in their entirety
for the first payment of interest on the
Bonds;
(d) an amount equal to not less than 85% of the
spendable proceeds of the Bonds will be
expended on the Project within 3 years of
the date of issuance of the Bonds;
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(e) any income derived from the investment of
any proceeds of the Bonds and from
investment of such investment income (except
to the extent any such income constitutes
Excess Earnings, as defined in the
Indenture) will, at the direction of the
Designated Representative, be, to the extent
allowed by State law, (i) used to acquire,
construct, install, equip and improve
additional real and personal property in
connection with the Project, (ii) used to
purchase Bonds in the open market, (iii)
paid into the Bond Fund, or (iv) paid or
used in any combination of the foregoing,
within 3 years from the date of issuance of
the Bonds, or within one year after receipt
of such investment income, whichever is
later;
(f) all moneys paid as Loan Payments pursuant to
this Agreement will be deposited in the Bond
Fund and used to pay principal of, premium,
if any, and interest on the Bonds and there
will be no debt service fund other than the
Bond Fund that will be so used; any
additional amounts paid pursuant to this
Agreement as reimbursement for costs or
expenses of the Issuer or the Trustee will
be applied upon receipt of those costs and
expenses requiring such amounts to be so
paid; any money deposited in the Bond Fund
will be spent within a 13 month period
beginning on the date of deposit, and any
amount received from investment of money
held in the Bond Fund will be spent within a
one year period beginning on the date of
receipt;
(g) neither the Project nor any part thereof
will not be sold or otherwise disposed of
prior to the maturity date of the Bonds,
other than as a result of normal
obsolescence and wear and tear;
(h) the original proceeds of the Bonds will not
exceed by more than 5% the amount necessary
for the purpose of the issuance of the
Bonds;
(i) no artifice or device will be used to
exploit the difference between tax-exempt
and taxable interest rates in order to gain
any material financial advantage and no
artifice or device will be used to increase
the burden on the market for tax-exempt
obligations, including increasing such
burden by selling obligations that would not
otherwise be sold, by selling more
obligations that would otherwise be
necessary or by issuing obligations sooner
or allowing obligations to remain
outstanding longer than would otherwise be
necessary.
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Section 3.8. Rebate Fund. The Borrower agrees to make such
payments to the Trustee as are required of it under Section 5.05 of the
Indenture and to pay the costs and expenses of the independent certified public
accounting firm or firm of attorneys engaged in accordance with Section 5.05 of
the Indenture. The obligation of the Borrower to make such payments shall remain
in effect and be binding upon the Borrower notwithstanding the release and
discharge of the Indenture.
(End of Article III)
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ARTICLE IV
LOAN BY ISSUER; REPAYMENT OF THE LOAN;
LOAN PAYMENTS AND ADDITIONAL PAYMENTS
Section 4.1. Loan Repayment; Delivery of Note and Credit
Facility. Upon the terms and conditions of this Agreement, the Issuer will make
the Loan to the Borrower. In consideration of and in repayment of the Loan, the
Borrower shall make, as Loan Payments, payments sufficient in amount to pay when
due the Bond Service Charges payable on the Bonds. All such Loan Payments shall
be paid to the Trustee in accordance with the terms of the Note for the account
of the Issuer on the Loan Payment Dates and shall be held and disbursed in
accordance with the provisions of the Indenture and this Agreement for
application to the payment of Bond Service Charges. Notwithstanding the
foregoing, while the Credit Facility is in effect, the Borrower shall deposit
all such Loan Payments directly with the Credit Facility Issuer to reimburse the
Credit Facility Issuer for draws on the Credit Facility, and the Credit Facility
Issuer shall apply such amounts to the reimbursement obligation of the Borrower.
The obligations of the Borrower to make any payment referred to in this Section
4.1 shall be deemed satisfied and discharged to the extent of the corresponding
payment made by the Credit Facility Issuer to the Trustee under the Credit
Facility. It is understood, however, that such payment by the Credit Facility
Issuer shall not relieve the Borrower of any of its obligations under the
Reimbursement Agreement, including the obligation to reimburse the Credit
Facility Issuer for any draw on the Credit Facility.
The Borrower shall be entitled to a credit against the Loan
Payments next required to be made to the extent that the balance of the Bond
Fund (other than any balance in the Credit Facility Account, Defeasance Account,
Redemption Premium Account or Remarketing Proceeds Account) is then in excess of
amounts required (a) for payment of Bonds theretofore matured or theretofore
called for redemption, (b) for payment of interest for which checks or drafts
have been drawn and mailed by the Trustee, and (c) for deposit in the Bond Fund
for use other than for the payment of Bond Service Charges on the Interest
Payment Date next following the applicable Loan Payment Date. In any event,
however, if on any Interest Payment Date, the balance in the Bond Fund is
insufficient to make required payments of Bond Service Charges, the Borrower
forthwith will pay to the Trustee, for the account of the Issuer and for deposit
into the Bond Fund, any deficiency.
To secure the Borrower's performance of their obligation under
this Agreement, the Borrower shall execute and deliver to the Trustee,
concurrently with the issuance and delivery of the Bonds, the Note.
The Note shall secure equally and ratably all outstanding
Bonds.
Upon payment in full, in accordance with the Indenture, of the
Bond Service Charges on any or all Bonds, whether at maturity or by redemption
or otherwise, or upon provision for the payment thereof having been made in
accordance with the provisions of the
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Indenture, an appropriate notation shall be endorsed thereon evidencing the date
and amount of the principal payment or prepayment equal to the Bonds so paid, or
with respect to which provision for payment has been made, and that Note shall
be surrendered by the Trustee to the Borrower for cancellation if all Bonds
shall have been paid (or provision made therefor) and cancelled as aforesaid.
Unless the Borrower is entitled to a credit under express terms of this
Agreement or the Note, all payments on the Note shall be in the full amount
required thereunder.
Except for such interest of the Borrower as may hereafter
arise pursuant to Section 8.2 hereof or Section 5.06 of the Indenture, the
Borrower and the Issuer each acknowledge that neither the Borrower nor the
Issuer have any interest in the Credit Facility Account, the Redemption Premium
Account, the Remarketing Proceeds Account and the Defeasance Account of the Bond
Fund and any moneys deposited therein shall be in the custody of and held by the
Trustee in trust for the benefit of the Holders and, to the extent of draws
under the Credit Facility, the Bank.
Section 4.2. Additional Payments. The Borrower shall pay to
the Issuer, as Additional Payments hereunder, within five (5) days after request
therefor made in writing, any and all costs and expenses, including fees of
Issuer's Counsel, incurred or to be paid by the Issuer in connection with the
issuance and delivery of the Bonds, the remarketing of the Bonds and the
Conversion of the Bonds or otherwise related to actions taken by the Issuer
under this Agreement or the Indenture.
The Borrower shall pay to the Trustee, the Registrar and any
Paying Agent or Authenticating Agent, their reasonable fees, charges and
expenses for acting as such under the Indenture.
The Borrower shall pay the Remarketing Agent and Tender Agent,
as Additional Payments hereunder, the fees and expenses of the Remarketing Agent
and Tender Agent under the Indenture for services rendered in connection with
the Bonds.
The Borrower shall pay to the Tender Agent in federal or other
immediately available funds not later than 3:00 p.m., Cleveland, Ohio time, an
amount equal to the amount the Tender Agent requires in order to purchase on
behalf of the Borrower Bonds pursuant to Article III of the Indenture on the
date payment is to be made; provided, however, that the amount required to be
paid under this paragraph shall be reduced by an amount equal to the sum of the
amounts made available to the Tender Agent for such purpose from the proceeds of
the remarketing of such Bonds by the Remarketing Agent or proceeds of a draw
under the Credit Facility. The Borrower hereby authorizes the Trustee to draw
such moneys under the Credit Facility, as are necessary for the purchase of
Bonds pursuant to said Article III.
Section 4.3. Place of Payments. Except as provided in Section
4.1, the Borrower shall make all Loan Payments directly to the Trustee at its
corporate trust office. Additional Payments shall be made directly to the person
or entity to whom or to which they are due.
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Section 4.4. Obligations Unconditional. The obligations of the
Borrower to make Loan Payments, Additional Payments and any payments required of
the Borrower under Section 5.05 of the Indenture shall be absolute and
unconditional, and the Borrower shall make such payments without abatement,
diminution or deduction regardless of any cause or circumstances whatsoever
including, without limitation, any defense, set-off, recoupment or counterclaim
which the Borrower may have or assert against the Issuer, the Trustee, the
Remarketing Agent, the Tender Agent, the Bank or any other Person.
Section 4.5. Assignment of Agreement and Revenues. To secure,
first, the payment of Bond Service Charges on, and the purchase of, the Bonds,
and, second, the payment to the Bank and performance by the Borrower under the
Reimbursement Agreement, the Issuer shall assign to the Trustee, by the
Indenture, any of its rights, title and interest in this Agreement (except for
the Unassigned Issuer's Rights), and the Credit Facility Account, Redemption
Premium Account, Remarketing Proceeds Account and Defeasance Account of the Bond
Fund and all moneys and investments therein (including without limitation the
proceeds of the Credit Facility) and shall grant to the Trustee, by the
Indenture, a security interest in its rights under and interest in (i) the
Project Fund and all moneys and investments therein, and (ii) the Revenues
(other than such accounts of the Bond Fund, all investments therein and the
proceeds of the Credit Facility). The Borrower hereby agrees and consent to that
assignment and grant.
Section 4.6. Credit Facility. Prior to the initial delivery of
the Bonds to the Original Purchaser pursuant to Section 2.01 of the Indenture,
the Borrower shall obtain and deliver, to the Trustee, the Credit Facility. The
Credit Facility shall be issued initially by the Bank pursuant to the
Reimbursement Agreement; shall be dated the date of delivery of the Bonds; shall
obligate the Bank to pay (a) an amount equal to the principal amount of the
Bonds (i) to pay the principal of the Bonds when due whether at stated maturity,
upon redemption or acceleration or (ii) to enable the Tender Agent to pay the
purchase price or portion of the purchase price equal to the principal amount of
Bonds purchased pursuant to Section 3.01 of the Indenture to the extent
remarketing proceeds are not available for such purpose, plus (b) an amount
equal to 110 days' interest accrued on the Bonds at a rate of ten percent (10%)
per annum (i) to pay interest on the Bonds when due or (ii) to enable the Tender
Agent to pay the portion of the purchase price of the Bonds purchased pursuant
to Section 3.01 of the Indenture equal to the interest accrued, if any, on such
Bonds to the extent remarketing proceeds are not available for such purpose; and
shall be in substantially the same form as the exhibit attached to the
Reimbursement Agreement and made a part thereof.
The Borrower shall take whatever action may be reasonably
necessary to maintain the Credit Facility in full force and effect during the
period required by the Indenture, including the payment of any reasonable and
documented transfer fees required by the Bank upon any transfer of the Credit
Facility to any successor Trustee pursuant to Section 11.12 of the Indenture.
(End of Article IV)
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ARTICLE V
ADDITIONAL AGREEMENTS AND COVENANTS
Section 5.1. Right of Inspection. Subject to reasonable
security and safety regulations and upon reasonable notice, the Issuer and the
Trustee, and their respective agents, shall have the right during normal
business hours to inspect the Project.
Section 5.2. Lease, Sale or Grant of Use by Borrower. Subject
to the provisions of the Reimbursement Agreement and with the written consent of
the Bank, the Borrower may lease, sell or grant the right to occupy and use the
Project, in whole or in part, to others, provided that no such grant, sale or
lease shall relieve the Borrower from its obligations under this Agreement or
the Note or adversely affect the exclusion from gross income of interest on the
Bonds.
Section 5.3. Indemnification. The Borrower releases the Issuer
from, agrees that the Issuer shall not be liable for, and indemnifies the Issuer
against, all liabilities, claims, costs and expenses, including attorneys fees
and expenses, imposed upon, incurred or asserted against the Issuer, on account
of: (a) any loss or damage to property or injury to or death of or loss by any
person that may be occasioned by any cause whatsoever pertaining to the
construction, maintenance, operation and use of the Project; (b) any breach or
default on the part of the Borrower in the performance of any covenant or
agreement of the Borrower under this Agreement, the Reimbursement Agreement, the
Note or any related document, or arising from any act or failure to act by the
Borrower, or any of its agents, contractors, servants, employees or licensees;
(c) the authorization, issuance, sale, trading, redemption or servicing of the
Bonds, and the provision of any information or certification furnished in
connection therewith concerning, the Bonds, the Project, or the Borrower
including, without limitation, the Private Placement Memorandum, any information
furnished by the Borrower for, and included in, or used as a basis for
preparation of, any certifications, information statements or reports furnished
by the Issuer, and any other information or certification obtained from the
Borrower to assure the exclusion of the interest on the Bonds from gross income
for federal income tax purposes; (d) the Borrower's failure to comply with any
requirement of this Agreement or the Code pertaining to such exclusion of that
interest including the covenants in Section 5.4 hereof; and (e) any claim,
action or proceeding brought with respect to the matters set forth in (a), (b),
(c), and (d) above.
The Borrower agrees to indemnify the Trustee and the Tender
Agent for, and to hold them harmless against, all liabilities, claims, costs and
expenses incurred without negligence or bad faith on the part of the Trustee and
the Tender Agent on account of any action taken or omitted to be taken by the
Trustee and the Tender Agent in accordance with the terms of this Agreement, the
Bonds, the Reimbursement Agreement, the Credit Facility, the Note or the
Indenture or any action taken at the request of or with the consent of the
Borrower, including the reasonable and documented costs and expenses of the
Trustee and the Tender Agent in defending themselves against any such claim,
action or proceeding brought in connection with
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the exercise or performance of any of their powers or duties under this
Agreement, the Bonds, the Indenture, the Reimbursement Agreement, the Credit
Facility or the Note.
In case any action or proceeding is brought against the
Issuer, the Tender Agent or the Trustee in respect of which indemnity may be
sought hereunder, the party seeking indemnity promptly shall give notice of that
action or proceeding to the Borrower, and the Borrower upon receipt of that
notice shall have the obligation and the right to assume the defense of the
action or proceeding; provided, that failure of a party to give that notice
shall not relieve the Borrower from any of their obligations under this Section
unless that failure prejudices the defense of the action or proceeding by the
Borrower. At its own expense, an indemnified party may employ separate counsel
and participate in the defense. The Borrower shall not be liable for any
settlement made without their consent.
The indemnification set forth above is intended to and shall
include the indemnification of all affected officials, directors, officers and
employees, including Counsel, of the Issuer, the Tender Agent and the Trustee,
respectively. That indemnification is intended to and shall be enforceable by
the Issuer, the Tender Agent and the Trustee, respectively, to the full extent
permitted by law.
Section 5.4. Borrower Not to Adversely Affect Exclusion from
Gross Income of Interest on Bonds. The Borrower hereby represents that it has
taken and caused to be taken, and covenant that they will take and cause to be
taken, all actions that may be required of them, alone or in conjunction with
the Issuer, for the interest on the Bonds to be and remain excluded from gross
income for federal income tax purposes, and represents that they have not taken
or permitted to be taken on their behalf, and covenant that they will not take
or permit to be taken on their behalf, any actions that would adversely affect
such exclusion under the provisions of the Code.
Section 5.5. Borrower to Maintain Their Existence. The
Borrower shall do all things necessary to preserve and keep in full force and
effect their existence, rights and franchises, except as otherwise permitted by
the Reimbursement Agreement and as would not adversely affect the exclusion from
gross income of interest on the Bonds.
Section 5.6. Undertaking to Provide Continuing Disclosure. The
Issuer, at the cost of the Borrower, covenants to comply with Section 11-1-85 of
the Code of Laws of South Carolina 1976, as amended. The Borrower covenants to
furnish all information in a timely fashion requested by the Issuer to comply
with such Section. The Borrower further covenants to furnish a Continuing
Disclosure Certificate, if required, for purposes of SEC Rule 15c2-12, as it may
be amended or supplemented from time to time.
(End of Article V)
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ARTICLE VI
REDEMPTION AND PURCHASE OF BONDS
Section 6.1. Optional Redemption. Provided no Event of Default
shall have occurred and be subsisting, at any time and from time to time, the
Borrower may deliver moneys to the Trustee in addition to Loan Payments or
Additional Payments required to be made and direct the Trustee to use the moneys
so delivered for the purpose of purchasing Bonds or of calling Bonds for
optional redemption in accordance with the applicable provisions of the Bond
Resolution and Indenture providing for optional redemption at the redemption
price stated in the Indenture; provided, however, that any moneys so used for
optional redemption shall be from the sources set forth in paragraphs (i) and
(ii) of Section 5.01(c) of the Indenture. Pending application for those
purposes, any moneys so delivered shall be held by the Trustee in a special
account in the Bond Fund and delivery of those moneys shall not operate to abate
or postpone Loan Payments or Additional Payments otherwise becoming due or to
alter or suspend any other obligations of the Borrower under this Agreement.
Section 6.2. Extraordinary Optional Redemption. The Borrower
shall have, subject to the conditions hereinafter imposed, the option to direct
the redemption of the entire unpaid principal balance of the Bonds in accordance
with the applicable provisions of the Indenture upon the occurrence of any of
the following events:
(a) The Project shall have been damaged or destroyed
to such an extent that (1) they cannot reasonably be expected
to be restored, within a period of 6 months, to the condition
thereof immediately preceding such damage or destruction or
(2) their normal use and operation is reasonably expected to
be prevented for a period of 6 consecutive months.
(b) Title to, or the temporary use of, all or a
significant part of the Project shall have been taken under
the exercise of the power of eminent domain (1) to such extent
that the Project cannot reasonably be expected to be restored
within a period of 6 months to a condition of usefulness
comparable to that existing prior to the taking or (2) as a
result of the taking, normal use and operation of the Project
is reasonably expected to be prevented for a period of 6
consecutive months.
(c) As a result of any changes in the Constitution of
the State, the Constitution of the United States of America,
or state or federal laws or as a result of legislative or
administrative action (whether state or federal) or by final
decree, judgment or order of any court or administrative body
(whether state or federal) entered after the contest thereof
by the Issuer or the Borrower in good faith, this Agreement
shall have become void or unenforceable or impossible of
performance in accordance with the intent and purpose of the
parties as expressed in this Agreement, or if unreasonable
burdens or excessive liabilities shall have
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been imposed with respect to the Project or the operation
thereof, including, without limitation, federal, state or
other ad valorem, property, income or other taxes not being
imposed on the date of this Agreement other than ad valorem
taxes presently levied upon privately owned property used for
the same general purpose as the Project.
(d) Changes in the economic availability of raw
materials, operating supplies, energy sources or supplies, or
facilities (including, but not limited to, facilities in
connection with the disposal of industrial wastes) necessary
for the operation of the Project for the Project Purposes
shall have occurred or technological or other changes shall
have occurred which the Borrower cannot reasonably overcome or
control and which in the Borrower's reasonable judgment render
the Project uneconomic for the Project Purposes.
To exercise that option, the Borrower shall, within 90 days following the event
authorizing the exercise of that option, or at any time during the continuation
of the condition referred to in clause (d) above, give notice to the Issuer and
to the Trustee specifying the date on which the Borrower will deliver the funds
required for that redemption, which date shall be not more than 90 days from the
date that notice is mailed and shall make arrangements satisfactory to the
Trustee for the giving of the required notice of redemption.
The amount payable by the Borrower in the event of their
exercise of the option granted in this Section shall be the sum of the
following:
(i) An amount of money which, when added to the
moneys and investments held to the credit of the Bond Fund,
will be sufficient pursuant to the provisions of the Indenture
to pay, at par, and discharge all then outstanding Bonds on
the earliest applicable redemption date, that amount to be
paid to the Trustee, plus
(ii) An amount of money equal to the Additional
Payments relating to the Bonds accrued and to accrue until
actual final payment and redemption of the Bonds, that amount
or applicable portions thereof to be paid to the Trustee or to
the Persons to whom those Additional Payments are or will be
due.
The requirement of (ii) above with respect to Additional Payments to accrue may
be met if provisions satisfactory to the Trustee and the Issuer are made for
paying those amounts as they accrue.
The Borrower also shall have the option, in the event that
title to or the temporary use of a portion of the Project shall be taken under
the exercise of the power of eminent domain, even if the taking is not of such
nature as to permit the exercise of the redemption option upon an event
specified in (b) above, to direct the redemption, at a redemption price of 100%
of the principal amount thereof prepaid, plus accrued interest to the redemption
date, of that part of the outstanding principal balance of the Bonds as may be
payable from the proceeds received
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by the Borrower (after the payment of costs and expenses incurred in the
collection thereof) received in the eminent domain proceeding, provided, that,
the Borrower shall furnish to the Issuer and the Trustee a certificate of an
Engineer stating that (1) the property comprising the part of the Project taken
is not essential to continued operations of the Project in the manner existing
prior to that taking, (2) the Project has been restored to a condition
substantially equivalent to that existing prior to the taking, or (3) other
improvements have been acquired or made which are suitable for the continued
operation of the Project.
The rights and options granted to the Borrower in this Section
may be exercised whether or not the Borrower is in default hereunder; provided,
that such default will not relieve the Borrower from performing those actions
which are necessary to exercise any such right or option granted hereunder.
Section 6.3. Mandatory Redemption in Event of Inclusion in
Gross Income of Interest on Bonds. If, as provided in the Bonds and the
Indenture, the Bonds become subject to mandatory redemption because interest on
any of the Bonds is determined to be included for federal income tax purposes in
the gross income of the Holder of any Bonds (other than because a Holder is a
"substantial user" of the Project or a "related person", as those terms are used
in Section 147(a) of the Code), the Borrower shall deliver to the Trustee, upon
the date requested by the Trustee, the moneys needed to pay in full the Bonds in
accordance with the mandatory redemption provisions relating thereto set forth
in the Bonds and the Indenture.
Section 6.4. Mandatory Redemption. The Borrower shall deliver
to the Trustee the moneys needed to redeem the Bonds in accordance with any
mandatory redemption provisions relating thereto as may be set forth in the
Indenture.
Section 6.5. Actions by Issuer. At the request of the Borrower
or the Trustee, the Issuer shall take all steps required of it under the
applicable provisions of the Indenture or the Bonds to effect the redemption of
all or a portion of the Bonds pursuant to this Article VI.
(End of Article VI)
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ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.1. Events of Default. Each of the following shall be
an Event of Default:
(a) The Borrower shall fail to pay any Loan Payment
on or prior to the Loan Payment Date on which that Loan
Payment is due and payable;
(b) The Borrower shall fail to deliver to the
Trustee, or cause to be delivered on their behalf, the moneys
needed (i) to redeem any outstanding Bonds in the manner and
upon the date requested in writing by the Trustee as provided
in Section 6.1, 6.2, 6.3 or 6.4 of this Agreement or (ii) to
purchase any Bonds in the manner and upon the date as provided
in Section 4.2 of this Agreement;
(c) The Borrower shall fail to observe and perform
any other agreement, term or condition contained in this
Agreement (other than with respect to Section 5.4 hereof), and
the continuation of such failure for a period of 30 days after
notice thereof shall have been given to the Borrower by the
Issuer or the Trustee, or for such longer period as the Issuer
and the Trustee may agree to in writing; provided, that if the
failure is other than the payment of money and is of such
nature that it can be corrected but not within the applicable
period, that failure shall not constitute an Event of Default
so long as the Borrower institute curative action within the
applicable period and diligently pursues that action to
completion;
(d) The Borrower shall: (i) admit in writing its
inability to pay its debts generally as they become due; (ii)
have an order for relief entered in any case commenced by or
against them under the federal bankruptcy laws, as now or
hereafter in effect; (iii) commence a proceeding under any
other federal or state bankruptcy, insolvency, reorganization
or similar law, or have such a proceeding commenced against it
and either have an order of insolvency or reorganization
entered against it or have the proceeding remain undismissed
and unstayed for ninety days; (iv) make an assignment for the
benefit of creditors; or (v) have a receiver or trustee
appointed for them or for the whole or any substantial part of
their property;
(e) There shall occur an "Event of Default" as
defined in Section 10.01 of the Indenture.
Notwithstanding the foregoing, if, by reason of Force Majeure,
the Borrower is unable to perform or observe any agreement, term or condition
hereof which would give rise to an Event of Default under subsection (c) hereof,
the Borrower shall not be deemed in default
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during the continuance of such inability. However, the Borrower shall promptly
give notice to the Trustee and the Issuer of the existence of an event of Force
Majeure and shall use their best efforts to remove the effects thereof; provided
that the settlement of strikes or other industrial disturbances shall be
entirely within their discretion.
The term Force Majeure shall mean, without limitation, the
following:
(i) acts of God; strikes, lockouts or other
industrial disturbances; acts of public enemies; orders or
restraints of any kind of the government of the United States
of America or of the State or any of their departments,
agencies, political subdivisions or officials, or any civil or
military authority; insurrections; civil disturbances; riots;
epidemics; landslides; lightning; earthquakes; fires;
hurricanes; tornadoes; storms; droughts; floods; arrests;
restraint of government and people; explosions; breakage,
malfunction or accident to facilities, machinery, transmission
pipes or canals; partial or entire failure of utilities;
shortages of labor, materials, supplies or transportation; or
(ii) any cause, circumstance or event not reasonably
within the control of the Borrower.
The declaration of an Event of Default under subsection (d)
above, and the exercise of remedies upon any such declaration, shall be subject
to any applicable limitations of federal bankruptcy law affecting or precluding
that declaration or exercise during the pendency of or immediately following any
bankruptcy, liquidation or reorganization proceedings.
Section 7.2. Remedies on Default. Whenever an Event of Default
shall have happened and be subsisting, any one or more of the following remedial
steps may be taken:
(a) If acceleration of the principal amount of the
Bonds has been declared pursuant to Section 10.02 of the
Indenture, the Trustee shall declare all Loan Payments to be
immediately due and payable, whereupon the same shall become
immediately due and payable;
(b) The Issuer, the Bank or the Trustee may have
access to, inspect, examine and make copies of the books,
records, accounts and financial data of the Borrower
pertaining to the Project; or
(c) The Issuer or the Trustee may pursue all remedies
now or hereafter existing at law or in equity to collect all
amounts then due and thereafter to become due under this
Agreement, the Credit Facility or the Note or to enforce the
performance and observance of any other obligation or
agreement of the Borrower under those instruments.
Notwithstanding the foregoing, the Issuer shall not be obligated to take any
step which in its opinion will or might cause it to expend time or money or
otherwise incur liability unless and
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until a satisfactory indemnity bond has been furnished to the Issuer at no cost
or expense to the Issuer. Any amounts collected as Loan Payments or applicable
to Loan Payments and any other amounts which would be applicable to the payment
of Bond Service Charges collected pursuant to action taken under this Section
shall be paid into the Bond Fund and applied in accordance with the provisions
of the Indenture or, if the outstanding Bonds have been paid and discharged in
accordance with the provisions of the Indenture, shall be paid as provided in
Section 5.06 of the Indenture for transfers of remaining amounts in the Bond
Fund.
The provisions of this Section are subject to the further
limitation that the rescission by the Trustee of its declaration that all of the
Bonds are immediately due and payable also shall constitute an annulment of any
corresponding declaration made pursuant to paragraph (a) of this Section and a
waiver and rescission of the consequences of that declaration and of the Event
of Default with respect to which that declaration has been made, provided that
no such waiver or rescission shall extend to or affect any subsequent or other
default or impair any right consequent thereon.
Section 7.3. No Remedy Exclusive. No remedy conferred upon or
reserved to the Issuer or the Trustee by this Agreement is intended to be
exclusive of any other available remedy or remedies, but each and every such
remedy shall be cumulative and shall be in addition to every other remedy given
under this Agreement, the Credit Facility or the Note, or now or hereafter
existing at law, in equity or by statute. No delay or omission to exercise any
right or power accruing upon any default shall impair that right or power or
shall be construed to be a waiver thereof, but any such right and power may be
exercised from time to time and as often as may be deemed expedient. In order to
entitle the Issuer or the Trustee to exercise any remedy reserved to it in this
Article, it shall not be necessary to give any notice, other than any notice
required by law or for which express provision is made herein.
Section 7.4. Agreement to Pay Attorneys' Fees and Expenses. If
an Event of Default should occur and the Issuer or the Trustee should incur
expenses, including attorneys' fees, in connection with the enforcement of this
Agreement, the Credit Facility or the Note or the collection of sums due
thereunder, the Borrower shall reimburse the Issuer and the Trustee, as
applicable, for the reasonable expenses so incurred upon demand.
Section 7.5. No Waiver. No failure by the Issuer or the
Trustee to insist upon the strict performance by the Borrower of any provision
hereof shall constitute a waiver of their right to strict performance and no
express waiver shall be deemed to apply to any other existing or subsequent
right to remedy the failure by the Borrower to observe or comply with any
provision hereof.
The Issuer and the Trustee may waive any Event of Default
hereunder only with the prior written consent of the Bank.
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Section 7.6. Notice of Default. The Borrower or the Issuer
shall notify the Trustee and the Bank immediately if they become aware of the
occurrence of any Event of Default hereunder or of any fact, condition or event
which, with the giving of notice or passage of time or both, would become an
Event of Default.
(End of Article VII)
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ARTICLE VIII
MISCELLANEOUS
Section 8.1. Term of Agreement. This Agreement shall be and
remain in full force and effect from the date of delivery of the Bonds to the
Placement Agent until such time as all of the Bonds shall have been fully paid
(or provision made for such payment) pursuant to the Indenture and all other
sums payable by the Borrower under this Agreement and the Note shall have been
paid, except for obligations of the Borrower under Sections 4.2 and 5.3 hereof,
which shall survive any termination of this Agreement.
Section 8.2. Amounts Remaining in Funds. Any amounts in the
Bond Fund remaining unclaimed by the Holders of Bonds for 2 years after the due
date thereof (whether at stated maturity, by redemption or pursuant to any
mandatory sinking fund requirements or otherwise), shall be paid to the
Borrower; provided that if the Trustee shall have drawn on the Credit Facility,
and the Bank has not been reimbursed by the Borrower pursuant to the
Reimbursement Agreement, such amounts remaining in the Bond Fund shall belong
and be paid first to the Bank to the extent it has not been so reimbursed. With
respect to that principal of and any premium and interest on the Bonds to be
paid from moneys paid to the Borrower or the Bank pursuant to the preceding
sentence, the Holders of the Bonds entitled to those moneys shall look solely to
the Borrower for the payment of those moneys.
Further, any other amounts remaining in the Bond Fund (other
than in the Credit Facility Account, the Remarketing Proceeds Account, the
Redemption Premium Account and the Defeasance Account) and any amounts remaining
in any other special funds or accounts (other than the Project Fund and the
Rebate Fund) created under this Agreement or the Indenture after all of the
outstanding Bonds shall be deemed to have been paid and discharged under the
provisions of the Indenture and all other amounts required to be paid under this
Agreement, the Note and the Indenture have been paid, shall be paid to the
Borrower to the extent that those moneys are in excess of the amounts necessary
to effect the payment and discharge of the outstanding Bonds; provided that if
the Trustee shall have drawn on the Credit Facility, and the Bank has not been
reimbursed by the Borrower pursuant to the Reimbursement Agreement, such amounts
shall belong and be paid first to the Bank to the extent it has not been so
reimbursed.
Section 8.3. Notices. All notices, certificates, requests or
other communications hereunder shall be in writing and shall be deemed to be
sufficiently given when mailed by registered or certified mail, postage prepaid,
and addressed to the appropriate Notice Address. A duplicate copy of each
notice, certificate, request or other communication given hereunder to the
Issuer, the Borrower, the Bank, the Remarketing Agent, the Tender Agent or the
Trustee shall also be given to the others. The Borrower, the Issuer, the Bank,
the Remarketing Agent, the Tender Agent and the Trustee, by notice given
hereunder, may designate any further or different addresses to which subsequent
notices, certificates, requests or other communications shall be sent.
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Section 8.4. Extent of Covenants of the Issuer; No Personal
Liability. All covenants, obligations and agreements of the Issuer contained in
this Agreement or the Indenture shall be effective to the extent authorized and
permitted by applicable law. No such covenant, obligation or agreement shall be
deemed to be a covenant, obligation or agreement of any present or future
member, officer, agent or employee of the Issuer, and neither the members of the
Board of Directors of the Issuer nor any official executing the Bonds shall be
liable personally on the Bonds or be subject to any personal liability or
accountability by reason of the issuance thereof or by reason of the covenants,
obligations or agreements of the Issuer contained in this Agreement or in the
Indenture.
Section 8.5. Binding Effect. This Agreement shall inure to the
benefit of and shall be binding in accordance with its terms upon the Issuer,
the Borrower and their respective permitted successors and assigns provided that
this Agreement may not be assigned by the Borrower (except in connection with a
lease, sale or grant of use pursuant to Section 5.2 hereof or sale or transfer
of assets pursuant to the Reimbursement Agreement) and may not be assigned by
the Issuer except to the Trustee pursuant to the Indenture or as otherwise may
be necessary to enforce or secure payment of Bond Service Charges. This
Agreement may be enforced only by the parties, their assignees and others who
may, by law, stand in their respective places.
Section 8.6. Amendments and Supplements. Except as otherwise
expressly provided in this Agreement or the Indenture, subsequent to the
issuance of the Bonds and prior to all conditions provided for in the Indenture
for release of the Indenture having been met, this Agreement may not be
effectively amended, changed, modified, altered or terminated except in
accordance with the provisions of Article XIV of the Indenture, as applicable.
Section 8.7. Execution Counterparts. This Agreement may be
executed in any number of counterparts, each of which shall be regarded as an
original and all of which shall constitute but one and the same instrument.
Section 8.8. Severability. If any provision of this Agreement,
or any covenant, obligation or agreement contained herein is determined by a
court to be invalid or unenforceable, that determination shall not affect any
other provision, covenant, obligation or agreement, each of which shall be
construed and enforced as if the invalid or unenforceable portion were not
contained herein. That invalidity or unenforceability shall not affect any valid
and enforceable application thereof, and each such provision, covenant,
obligation or agreement shall be deemed to be effective, operative, made,
entered into or taken in the manner and to the full extent permitted by law.
Section 8.9. Governing Law. This Agreement shall be deemed to
be a contract made under the laws of the State and for all purposes shall be
governed by and construed in accordance with the laws of the State.
(End of Article VIII)
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IN WITNESS WHEREOF, the Issuer and the Borrower 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) SOUTH CAROLINA JOBS-ECONOMIC
DEVELOPMENT AUTHORITY
Attest: By: /s/ ??????????????????
-----------------------------
Title: Vice Chairman, Board of
Directors
By: /s/ ELLIOTT FRANKS, III
--------------------------
Title: Executive Director
(SEAL) CORE MATERIALS CORPORATION
Attest: By: /s/ KEVIN L. BARNETT
------------------------------
Title: Vice President, Treasurer & CFO
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EXHIBIT A
NOTE
Core Materials Corporation, a Delaware corporation (the
"Borrower"), for value received, promises to pay to The Huntington National
Bank, as Trustee (the "Trustee") under the Indenture hereinafter referred to,
the principal sum of
SEVEN MILLION FIVE HUNDRED THOUSAND DOLLARS
($7,500,000)
and to pay interest on the unpaid balance of such principal sum from and after
May 7, 1998 (the date of delivery of this Note) at the Applicable Rate until the
payment of such principal sum has been made or provided for. As used herein,
"Applicable Rate" means the interest rates specified in Appendix I to this Note.
This Note has been executed and delivered by the Borrower to
the Trustee pursuant to a certain Loan Agreement (the "Agreement"), dated as of
April 1, 1998, between the South Carolina Jobs-Economic Development Authority
(the "Issuer") and the Borrower. Under the Agreement, the Issuer has loaned the
Borrower the principal proceeds received from the sale of the Issuer's
$7,500,000 aggregate principal amount of South Carolina Jobs-Economic
Development Authority Multi-Mode Variable Rate Industrial Development Revenue
Bonds, Series 1998 (Core Materials Corporation Project), dated the date of their
initial delivery to the original purchasers thereof (the "Bonds"), to assist in
the financing of the Project (as defined in the Agreement), and the Borrower
have agreed to repay such loan by making payments (the "Loan Payments") at the
times and in the amounts set forth in this Note for application to the payment
of the principal of and redemption premium, if any, and interest on the Bonds as
and when due. The Bonds have been issued, concurrently with the execution and
delivery of this Note, pursuant to, and are secured by, the Trust Indenture (the
"Indenture"), dated as of April 1, 1998, between the Issuer and the Trustee. The
Bonds also bear interest from their date at the Applicable Rate payable as
specified below and in Appendix I to this Note and mature on April 1, 2013.
To provide funds to pay the principal of and redemption
premium, if any, and interest on the Bonds (the "Bond Service Charges") as and
when due as above-specified, the Borrower hereby agrees to and shall make Loan
Payments on each Loan Payment Date as follows: (i) while the Bonds bear interest
at the Weekly Rate, the total interest due on the Bonds on such Loan Payment
Date and (b) on the Loan Payment Date on April 1, 2013 (i.e. the maturity date
of the Bonds) all principal of the Bonds then outstanding, and (ii) while the
Bonds bear interest at the Semi-Annual Rate or Long-Term Rate, in an amount
equal to (a) prior to the first Interest Payment Date in such Interest Rate
Mode, that portion of the total interest due on the Bonds on such first Interest
Payment Date multiplied by a fraction, the numerator of which shall be one and
the denominator of which shall be the number of Loan Payment Dates prior to
A-1
43
such Interest Payment Date, (b) from and after the first Interest Payment Date
in such Interest Rate Mode, 1/2 of the total interest due on the Bonds on the
next succeeding Interest Payment Date, and (c) on the Loan Payment Date on April
1, 2013 (i.e., the maturity date of the Bonds) all principal of the Bonds then
outstanding. In addition, to provide funds sufficient to pay the principal of
and premium, if any, and interest on the Bonds as and when due at any other
time, whether by redemption or acceleration or otherwise, the Borrower hereby
agrees to and shall make Loan Payments in an amount sufficient to pay such
principal of and premium, if any, and interest when due and payable.
If payment or provision for payment in accordance with the
Indenture is made in respect of the principal of, and redemption premium, if
any, and interest on the Bonds from moneys other than Loan Payments, this Note
shall be deemed paid to the extent such payments or provision for payment of
Bonds has been made. To provide for payment of the Bond Service Charges, the
Borrower has arranged to deliver to the Trustee the Credit Facility. Drawings on
the Credit Facility shall not reduce in any manner Loan Payments due hereunder.
However, the Trustee shall apply such Loan Payments to the reimbursement
obligation of the Borrower to the Bank in accordance with Section 5.01 of the
Indenture. Subject to the foregoing, all Loan Payments shall be in the full
amount required hereunder.
All Loan Payments shall be payable in lawful money of the
United States of America and shall be made to the Trustee at its corporate trust
office for the account of the Issuer and deposited in the Bond Fund created by
the Indenture. Except as otherwise provided in the Indenture, such Loan Payments
shall be used by the Trustee to pay the principal of, redemption premium, if
any, and interest on the Bonds as and when due.
The obligation of the Borrower to make the payments required
hereunder shall be absolute and unconditional and the Borrower shall make such
payments without abatement, diminution or deduction regardless of any cause or
circumstances whatsoever including, without limitation, any defense, set-off,
recoupment or counterclaim which the Borrower may have or assert against the
Issuer, the Trustee, the Remarketing Agent (as defined in Appendix I) and the
Bank (as defined in Appendix I) or any other person.
This Note is subject to optional, extraordinary optional and
mandatory prepayment in whole or in part, at the prepayment price, in the
amounts and upon the conditions that the Bonds are subject to, respectively,
optional and extraordinary optional redemption. The Borrower will deliver or
cause to be delivered to the Trustee, for the account of the Issuer, such moneys
as are required to effect such prepayment under the applicable terms of the
Bonds.
Whenever an Event of Default under Section 10.01 of the
Indenture shall have occurred and, as a result thereof, the principal of and any
premium on all Bonds then outstanding, and interest accrued thereon, shall have
been declared to be immediately due and payable pursuant to Section 10.02 of the
Indenture, the unpaid principal amount of and any premium and accrued interest
on this Note shall also be due and payable on the date on which the principal of
and premium and interest on the Bonds shall have been declared due and
A-2
44
payable; provided that the annulment of a declaration of acceleration with
respect to the Bonds shall also constitute an annulment of any corresponding
declaration with respect to this Note.
IN WITNESS WHEREOF, the Borrower has caused this Note to be
executed in its name by its duly authorized officers as of May __, 1998.
CORE MATERIALS CORPORATION
By: ___________________________
Its: ______________________
A-3
45
APPENDIX I
A. Definitions
As used herein and in the Note, the following terms shall have
the following meanings:
"Applicable Rate" means, from the date hereof through and
including, May 12, 1998, 4.38% per annum, and thereafter, for each Weekly Rate
Period and so long as there is not a Semi-Annual Rate or Long-Term Rate, the
Weekly Rate established therefor, computed on the basis of a 365 or 366-day
year, as applicable, and, during a Semi-Annual Rate Period or Long-Term Rate
Period, the Semi-Annual Rate or the Long-Term Rate, respectively, computed on
the basis of a 360-day year, consisting of twelve-30 day months.
"Bank" means initially, KeyBank National Association, and its
successors and assigns in its capacity as issuer of a Credit Facility and in the
event an Alternate Credit Facility is outstanding, the issuer of the Alternate
Credit Facility.
"Business Day" means any day of the year other than (i) a
Saturday or Sunday, (ii) any day on which banks located in either Cleveland,
Ohio, or the principal corporate trust office of the Trustee is located are
required or authorized by law to remain closed, or (iii) any day on which the
New York Stock Exchange is closed.
"Conversion Date" means the first date any Conversion becomes
effective.
"Interest Payment Date" means (a) while the Bonds bear
interest at the Weekly Rate, the first Wednesday of each January, April, July
and October, and (b) while the Bonds bear interest at the Semi-Annual Rate or
the Long-Term Rate, April 1 and October 1 of each year. The first Interest
Payment Date shall be the Interest Payment Date in July, 1998. In any case, the
final Interest Payment Date shall be the maturity date of the Bonds.
"Interest Period" means for all Bonds the period from and
including each Interest Payment Date to and including the day next preceding the
next Interest Payment Date. The first Interest Period for the Bonds shall begin
on (and include) the date of the initial delivery of the Bonds. The final
Interest Period shall end on the maturity (or redemption) date for each Bond.
"Interest Rate Mode" means the Weekly Rate, the Semi-Annual
Rate or the Long- Term Rate.
"Long-Term Rate" means the Interest Rate Mode for the Bonds in
which the interest rate on the Bonds is determined in accordance with Section
2.02(c)(iii) of the Indenture.
App. I-1
46
Long-Term Rate Period" means any period beginning on, and
including, the Conversion Date to the Long-Term Rate and ending on, and
including, the day preceding the Interest Payment Date selected by the Borrower
and each period of the same duration (or as close as possible) ending on an
Interest Payment Date thereafter until the earliest of the day preceding the
change to a different Long-Term Rate Period, the Conversion to a different
Interest Rate Mode or the maturity of the Bonds.
"Purchase Date" means (a) if the Interest Rate Mode is the
Weekly Rate, any Business Day as set forth in Section 3.01(a)(i), Section
3.01(a)(iii) and Section 3.01(a)(iv) of the Indenture, respectively, (b) if the
Interest Rate Mode is the Semi-Annual Rate, any Interest Payment Date, (c) if
the Interest Rate Mode is the Long-Term Rate, the final Interest Payment Date
for each Long-Term Rate Period, and (d) each day that Bonds are subject to
mandatory purchase pursuant to Section 3.01(b) of the Indenture.
"Rate Period" means any period during which a single interest
rate is in effect for a Bond.
"Remarketing Agent" means Key Capital Markets, Inc. and its
successors as provided in Section 12.01 of the Indenture. "Principal Office" of
the Remarketing Agent means the office designated as such in writing to the
Borrower, the Trustee and the Tender Agent.
"Semi-Annual Rate" means the Interest Rate Mode for the Bonds
in which the interest rate on the Bonds is determined in accordance with Section
2.02(c)(ii) of the Indenture.
"Semi-Annual Rate Period" means any period beginning on, and
including, the Conversion Date to the Semi-Annual Rate and ending on, and
including, the day preceding the next Interest Payment Date thereafter and each
successive six (6) month period thereafter until the day preceding Conversion to
a different Interest Rate Mode or the maturity of the Bonds.
"Weekly Rate" means the Interest Rate for the Bonds in which
the interest rate on the Bonds is determined weekly in accordance with Section
2.02(c)(i) of the Indenture.
"Weekly Rate Period" means the period beginning on, and
including, the date of issuance of the Bonds, and ending on, and including, the
next Tuesday and thereafter the period beginning on, and including, any
Wednesday and ending on, and including, the next Tuesday.
B. Interest Rate Provisions
Words and terms used in this Part B as defined words and terms
and not otherwise defined in this Note or Appendix I thereto shall have the
meanings assigned to them in the Indenture.
(1) Interest Rates on the Bonds. The Bonds shall bear interest
at the Weekly Rate for the period from their original issuance date until
converted to a different Interest Rate Mode. The first Interest Payment Date
shall be the Interest Payment Date in July, 1998.
App. I-2
47
During each Interest Period for each Interest Rate Mode, the interest rate for
the Bonds shall be determined in accordance with Section 2.02(c) of the
Indenture and shall be payable on the Interest Payment Date for such Interest
Period; provided that the interest rate borne by the Bonds shall not exceed the
lesser of (i) fifteen percent (15%) per annum or (ii) so long as the Bonds are
entitled to the benefits of a Credit Facility, the maximum interest rate with
respect to the Bonds specified in the Credit Facility. Interest on the Bonds at
the interest rate or rates for the Weekly Rate shall be computed upon the basis
of a 365 or 366-day year, as applicable, for the actual number of days elapsed.
Interest on the Bonds at the interest rate or rates for the SemiAnnual Rate and
the Long-Term Rate shall be computed upon the basis of a 360-day year,
consisting of twelve 30-day months. Each Bond shall bear interest on overdue
principal and, to the extent permitted by law, on overdue interest at the
Default Rate computed from the date of the Default or Event of Default.
(2) Interest Rate Modes. Interest Rates on the Bonds shall be
determined as follows:
(i) If the Interest Rate Mode for the Bonds is the
Weekly Rate, the interest rate on the Bonds for a particular Weekly
Rate Period shall be the rate established by the Remarketing Agent no
later than 3:00 p.m. (Cleveland, Ohio time) on the Tuesday preceding
the Weekly Rate Period (or the day preceding the Conversion of the
Interest Rate Mode to the Weekly Rate), or, if such day is not a
Business Day, on the next succeeding Business Day, as the minimum rate
of interest necessary, in the judgment of the Remarketing Agent, to
enable the Remarketing Agent to sell the Bonds on such Business Day at
a price equal to the principal amount thereof, plus accrued interest,
if any, thereon.
(ii) If the Interest Rate Mode for the Bonds is the
Semi-Annual Rate, the interest rate on the Bonds for a particular
Semi-Annual Rate Period shall be the rate established by the
Remarketing Agent no later than 3:00 p.m. (Cleveland, Ohio time) on the
10th Business Day next preceding the first day of such Semi-Annual Rate
Period as the minimum rate of interest necessary, in the judgment of
the Remarketing Agent, to enable the Remarketing Agent to sell the
Bonds on such first day at a price equal to the principal amount
thereof.
(iii) If the Interest Rate Mode for the Bonds is the
Long-Term Rate, the interest rate on the Bonds for a particular
Long-Term Rate Period shall be the rate established by the Remarketing
Agent not later than the 15th Business Day preceding the first day of
such Long-Term Rate Period as the minimum rate of interest necessary,
in the judgment of the Remarketing Agent, to enable the Remarketing
Agent to sell the Bonds on such first day at a price equal to the
principal amount thereof.
(iv) The Remarketing Agent shall provide the Trustee,
the Borrower and the Tender Agent with Immediate Notice of all interest
rates.
App. I-3
48
(v) If for any reason the interest rate on a Bond is
not determined by the Remarketing Agent pursuant to (i), (ii) or (iii)
above, the interest rate for such Bond for the next succeeding Rate
Period shall be the interest rate in effect for such Bond for the
preceding Rate Period.
(3) Long-Term Rate Periods.
(i) Selection of Long-Term Rate Period. The Long-Term
Rate Period shall be established by the Borrower in the notice given
pursuant to Section 2.02(e) of the Indenture (the first such Long-Term
Rate Period commencing on the Conversion Date for the Bonds to a
Long-Term Rate) and thereafter each successive Long-Term Rate Period
shall be the same as that so established by the Borrower until a
different Long- Term Rate Period is specified by the Borrower in
accordance with Section 2.02 of the Indenture or until the occurrence
of a Conversion Date. Each Long-Term Rate Period shall be one year or
more in duration and shall end on the day next preceding an Interest
Payment Date; provided that if the first Long-Term Rate Period
commences on a Conversion Date other than a April 1 and October 1, such
first Long-Term Rate Period shall be of a duration as close as possible
to (but not in excess of) such Long-Term Rate Period and shall
terminate on a day preceding an Interest Payment Date; and further
provided that no Long-Term Rate Period shall extend beyond the maturity
date of the Bonds.
(ii) Change of Long-Term Rate Period. The Borrower
may change from one Long-Term Rate Period to another Long-Term Rate
Period on any Business Day on which the Bonds are subject to optional
redemption pursuant to Section 8.01(b) of the Indenture by notifying
the Trustee, the Issuer, the Credit Facility Issuer, the Tender Agent
and the Remarketing Agent at least 4 Business Days prior to the 30th
day prior to the proposed effective date of the change. Such notice
shall specify the last day of the next Long-Term Rate Period which
shall be the earlier of the day before the maturity date of the Bonds
or the day immediately preceding a April 1 or October 1 and which is
one year or more after the effective date and, if such change is
conditional, the interest rate limitations. Any such notice shall be
accompanied by an opinion of Counsel stating that such change is
authorized by the Indenture and, if the change is from a Long- Term
Rate Period of one year to a Long-Term Rate Period of more than one
year, an opinion of nationally recognized bond counsel that such change
will not affect the exclusion from gross income for federal income tax
purposes of the interest on the Bonds. Any change by the Borrower of
the Long-Term Rate Period may be made conditional on the interest rate
being within certain limits established by the Borrower. The
Remarketing Agent shall establish what would be the interest rate for
the proposed Long-Term Rate Period in accordance with Section 2.02(c)
of the Indenture. If the interest rate established by the Remarketing
Agent is not within the limits established, then the change in the
Long-Term Rate Period may be cancelled by the Borrower, in which case
the Borrower's notice of the proposed change shall be of no effect and
the Bonds shall not be subject to any mandatory purchase pursuant to
Section 3.01(b) of the Indenture. Notice of such cancellation shall be
promptly given to all Bondholders.
App. I-4
49
(iii) Notice of Long-Term Rate Period. The Trustee
shall notify the Bondholders of any change in the Long-Term Rate Period
pursuant to Section 2.02(d)(ii) of the Indenture by first class mail,
postage prepaid, at least 30 but not more than 60 days before the
effective date of such change. The notice will state:
(A) whether the change in the Long-Term Rate
Period is conditional and, if conditional, the interest rate
limitations set by the Borrower,
(B) that the interest rate for the new
Long-Term Rate Period will be determined by the Remarketing
Agent not later than the 15th Business Day preceding the first
day of the new Long-Term Rate Period, and
(C) the effective date of and the end of the
new Long-Term Rate Period.
Any notice provided under Section 2.02(d)(iii) of the
Indenture shall be for informational purposes only and shall not waive or
otherwise affect the mandatory purchase of the Bonds at the end of any Long-Term
Rate Period as set forth in Section 3.01(b) of the Indenture.
App. I-5
50
(4) Conversion of Interest Rate.
(i) Conversion Directed by the Borrower. The Interest
Rate Mode for the Bonds is subject to Conversion to a different
Interest Rate Mode from time to time in whole (and not in part) by the
Borrower, such right to be exercised by notifying the Trustee, the
Credit Facility Issuer, the Tender Agent and the Remarketing Agent at
least 4 Business Days prior to the 30th day prior to the effective date
of such proposed Conversion. Such notice shall specify (A) the
effective date, (B) the proposed Interest Rate Mode, (C) if the
Conversion is to the Long-Term Rate, the end of the Long-Term Rate
Period and (D) if such Conversion is conditional, the interest rate
limitations. The notice must be accompanied by (i) an opinion of
Counsel stating that the Conversion is authorized by the Indenture and,
if the Conversion is from a Rate Period of one year or less to a Rate
Period of more than one year or from a Rate Period of more than one
year to a Rate Period of one year or less, an opinion of nationally
recognized bond counsel that such Conversion will not affect the
exclusion from gross income for federal income tax purposes of the
interest on the Bonds, and (ii) if the stated amount of the Credit
Facility, if any, to be held by the Trustee after such Conversion is
increased over that of the then current Credit Facility an opinion of
reputable bankruptcy counsel stating that payments of principal and
interest on the Bonds from funds drawn on such Credit Facility will not
constitute avoidable preferences with respect to the bankruptcy of the
Borrower under the Bankruptcy Code. Any Conversion by the Borrower of
the Interest Rate Mode to the Long-Term Rate may be made conditional on
the initial interest rate determined for such Interest Rate Mode being
within certain limits established by the Borrower. The Remarketing
Agent shall establish what would be the interest rate for the proposed
Interest Rate Mode in accordance with Section 2.02(c) of the Indenture.
If the interest rate established by the Remarketing Agent is not within
the limits established, then such Conversion may be cancelled by the
Borrower, in which case, the Borrower's notice of Conversion shall be
of no effect and the Bonds shall not be subject to any mandatory
purchase pursuant to Section 3.01(b) of the Indenture. Notice of such
cancellation shall be given promptly to all Bondholders.
(ii) Limitations. Any Conversion of the Interest Rate
Mode for the Bonds pursuant to paragraph (i) above must comply with the
following:
(A) the Conversion Date must be an Interest
Payment Date which is a date on which the Bonds are subject to
optional redemption pursuant to Section 8.01(a), (b) or (c) of
the Indenture;
(B) the Conversion Date must be a Business
Day; and
(C) the Credit Facility, if any, to be held
by the Trustee must cover accrued interest for the Bonds for
110 days, if the Conversion is to the Weekly Rate, or for 195
days, if the Conversion is to the Semi-Annual Rate or the
Long-Term Rate. If a Credit Facility will not support the
Bonds after the Conversion Date, the Borrower may only convert
the Interest Rate Mode for the
App. I-6
51
Bond to a Long-Term Rate Period which Long-Term Rate Period
shall expire on the maturity date of the Bonds.
(iii) Notice to Bondholders of Conversion of Interest
Rate. The Trustee shall notify the Bondholders of each Conversion by
first class mail, postage prepaid, at least 15 days (30 days in the
case of Conversion from or to the Long-Term Rate) but not more than 60
days before the Conversion Date. The notice will state:
(A) that the Interest Rate Mode will be
converted and what the new Interest Rate Mode will be;
(B) the Conversion Date;
(C) if the Conversion is to the Long-Term
Rate, whether the conversion is conditional and, if
conditional, the interest rate limitations set by the
Borrower; and
(D) that the Bonds will be subject to
mandatory purchase on the Conversion Date in accordance with
Section 3.01(b).
If the Conversion is to the Long-Term Rate, the
notice will also state the information required by Section 2.02(d)(iii)
of the Indenture.
(iv) Cancellation of Conversion of Interest Rate
Mode. Notwithstanding any provision of Section 2.02 of the Indenture,
the Interest Rate Mode shall not be converted if (A) the Remarketing
Agent has not determined the initial interest rate for the new Interest
Rate Mode in accordance with Section 2.02 of the Indenture or (B) the
Trustee shall receive written notice prior to such Conversion that
either of the opinions required under Section 2.02(e)(i) of the
Indenture has been rescinded. If the Trustee shall have sent any notice
to the Bondholders regarding a Conversion of the Interest Rate Mode
under Section 2.02(e)(iii) of the Indenture, the Trustee shall promptly
notify all Bondholders of such rescission and the cancellation of any
mandatory purchase pursuant to Section 3.01(b) of the Indenture.
App. I-7
52
EXHIBIT B
PROJECT FACILITIES
An approximately 110,900 square foot steel frame precast concrete
building together with certain of the machinery and equipment to be installed
therein including without limitation the following:
B-1
53
EXHIBIT C
PROJECT SITE
LEGAL DESCRIPTION
ALL THAT CERTAIN PIECE, PARCEL OR TRACT OF LAND, LYING AND BEING IN THE CITY OF
GAFFNEY, COUNTY OF CHEROKEE, BEING SHOWN AND DELINEATED ON A PLAT OF 20.75 ACRES
PREPARED FOR CORE MATERIALS CORPORATION, BY PROFESSIONAL SURVEYING AND
ENGINEERING SERVICES, DATED SEPTEMBER 4, 1997, AND RECORDED IN THE OFFICE OF THE
CLERK OF COURT FOR CHEROKEE COUNTY IN PLAT BOOK B114 AT PAGE 1 (THE "REFERENCED
PLAT"), AND BEING MORE FULLY DESCRIBED AS FOLLOWS:
BEGINNING AT AN EXISTING IRON PIN ON THE EASTERN RIGHT-OF-WAY OF
COMMERCE DRIVE, SAID PIN BEING THE NORTHWESTERNMOST CORNER OF THE LANDS
OF THE PHOENIX FINISHING CORPORATION AS SHOWN ON DEED OF RECORD AT DEED
BOOK 12-W AT PAGE 52, AS RECORDED IN THE OFFICE OF THE CLERK OF COURT
FOR CHEROKEE COUNTY, SOUTH CAROLINA, AND SAID PIN ALSO BEING THE
SOUTHWESTERNMOST CORNER OF TRACT E AS SHOWN ON A PLAT OF MEADOWCREEK
INDUSTRIAL PARK RECORDED AT PLAT BOOK 13-B AT PAGE 106. RUNNING THENCE,
WITH THE EASTERN RIGHT-OF-WAY OF COMMERCE DRIVE, A CURVE TO THE LEFT
HAVING A RADIUS OF 584.54' AND AN ARC LENGTH OF 418.54' AND SUBTENDED
BY A CHORD OF N 25(DEGREE)28'06" W FOR A DISTANCE OF 409.66' TO A NEW
IRON; THENCE, WITH SAID RIGHT-OF-WAY, N 45(DEGREE)58'49" W FOR A
DISTANCE OF 148.68' TO A NEW IRON; THENCE, WITH THE RIGHT-OF-WAY, A
CURVE TO THE RIGHT HAVING A RADIUS OF 1363.42' AND AN ARC LENGTH OF
192.60', AND SUBTENDED BY A CHORD OF N 41(DEGREE)56'00" W FOR A
DISTANCE OF 192.44' TO A NEW IRON; THENCE, WITH SAID RIGHT-OF- WAY, N
37(DEGREE)53'11" W FOR A DISTANCE OF 75.09' TO A NEW IRON; THENCE,
LEAVING THE RIGHT- OF-WAY, N 79(DEGREE)55'32" E FOR A DISTANCE OF
703.44' TO AN EXISTING IRON; THENCE N 80(DEGREE)05'14" E FOR A DISTANCE
OF 596.84' TO AN EXISTING IRON; THENCE N 80(DEGREE)01'11" E FOR A
DISTANCE OF 227.06' TO AN EXISTING IRON; THENCE S 21(DEGREE)45'57" W
FOR A DISTANCE OF 64.10' TO AN EXISTING IRON; THENCE S 04(DEGREE)16'24"
W FOR A DISTANCE OF 225.65' TO AN EXISTING IRON; THENCE S
16(DEGREE)45'59" W FOR A DISTANCE OF 247.90' TO AN EXISTING IRON;
THENCE S 15(DEGREE)28'32" E FOR A DISTANCE OF 238.40' TO AN EXISTING
IRON; THENCE S 08(DEGREE)03'56" E FOR A DISTANCE OF 44.68' TO AN
EXISTING IRON, SAID IRON BEING THE NORTHEASTERN CORNER OF THE LANDS OF
THE PHOENIX FINISHING CORPORATION, S 81(DEGREE)47'34" W FOR A DISTANCE
OF 1014.54' TO THE POINT AND PLACE OF BEGINNING.
DERIVATION: DEED FROM GILBERT PROPERTIES, INC. TO CORE MATERIALS
CORPORATION, DATED SEPTEMBER 12, 1997 AND RECORDED SEPTEMBER 12, 1997
IN THE OFFICE OF THE CLERK OF COURT OF CHEROKEE COUNTY IN DEED BOOK
16-L AT PAGE 187.
ASSESSOR'S TAX MAP NO.: 116-00-00-049.005
C-1
54
EXHIBIT D
FORM OF DISBURSEMENT REQUEST
STATEMENT NO. ______ REQUESTING DISBURSEMENT OF FUNDS
FROM PROJECT FUND PURSUANT TO SECTION 3.4 OF THE
LOAN AGREEMENT DATED AS OF APRIL 1, 1998 BETWEEN
SOUTH CAROLINA JOBS-ECONOMIC DEVELOPMENT AUTHORITY
AND CORE MATERIALS CORPORATION
---------------------------------
Pursuant to Section 3.4 of the Loan Agreement (the
"Agreement") between the South Carolina Jobs-Economic Development Authority (the
"Issuer"), and Core Materials Corporation (the "Borrower") dated as of April 1,
1998, the undersigned Designated Representative hereby requests and authorizes
The Huntington National Bank, as trustee (the "Trustee"), as depository of the
Project Fund created by the Indenture and defined in the Agreement, to pay to
the Borrower or to the person(s) listed on the Disbursement Schedule hereto out
of the moneys deposited in the Project Fund the aggregate sum of $___________ to
pay such person(s) or to reimburse the Borrower in full, as indicated in the
Disbursement Schedule, for the advances, payments and expenditures made by it in
connection with the items listed in the Disbursement Schedule.
In connection with the foregoing request and authorization,
the undersigned hereby certifies that:
(a) Each item for which disbursement is requested
hereunder is properly payable out of the Project Fund
in accordance with the terms and conditions of the
Agreement and the Reimbursement Agreement and none of
those items has formed the basis for any disbursement
heretofore made from said Project Fund.
(b) Each such item is or was necessary in connection with
the construction, furnishing, equipment or
improvement of the Project, as defined in the
Agreement.
(c) Each item for which disbursement is requested
hereunder, and the cost for each such item, is as
described in the information statement filed by the
Issuer in connection with the issuance of the Bonds
(as defined in the Agreement), as required by Section
149(e) of the Code; provided that if any such item is
not as described in that information statement,
attached hereto is a computation evidencing that the
average reasonably expected economic life of the
facilities which have been and will be paid for with
moneys in the Project Fund is not less than 5/6ths of
the average maturity of the Bonds.
D-1
55
(d) This statement and all exhibits hereto, including the
Disbursement Schedule, shall be conclusive evidence
of the facts and statements set forth herein and
shall constitute full warrant, protection and
authority to the Trustee for its actions taken
pursuant hereto.
(e) This statement constitutes the approval of the
Borrower of each disbursement hereby requested and
authorized.
This _____ day of ________________, 19___.
Pursuant to Section 3.4 of the ___________________________________
Agreement the foregoing Designated Representative
disbursement request is hereby
approved:
KEYBANK NATIONAL ASSOCIATION, as issuer
of the Credit Facility
By: _____________________________
Title: __________________________
Dated: __________________________
D-2
56
DISBURSEMENT SCHEDULE
TO STATEMENT NO. __________ REQUESTING AND AUTHORIZING DISBURSEMENT OF FUNDS
FROM PROJECT FUND PURSUANT TO SECTION 3.4 OF THE LOAN AGREEMENT DATED AS OF
APRIL 1, 1998 BETWEEN THE SOUTH CAROLINA JOBS- ECONOMIC DEVELOPMENT AUTHORITY
AND CORE MATERIALS CORPORATION
PAYEE AMOUNT PURPOSE
----- ------ -------
D-3