Exhibit 10.10
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BROWARD COUNTY, FLORIDA
AND
HEICO AEROSPACE CORPORATION
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LOAN AGREEMENT
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Dated as of October 1, 1996
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The interest of Broward County, Florida (the "Issuer") in this
Loan Agreement has been assigned (except for amounts payable under Sections
4.2(b), 7.2 and 8.4 hereof) pursuant to the Indenture of Trust dated as of the
date hereof from the Issuer to SunTrust Bank, Nature Coast, as trustee (the
"Trustee"), and is subject to the security interest of the Trustee thereunder.
LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of October 1, 1996, between BROWARD
COUNTY, FLORIDA (the "Issuer") a political subdivision of the State of Florida
(the "State") and HEICO AEROSPACE CORPORATION, a corporation organized and
existing under the laws of the State of Florida (the "Company");
W I T N E S S E T H:
That the parties hereto, intending to be legally bound hereby,
and for and in consideration of the premises and the mutual covenants
hereinafter contained, do hereby covenant, agree and bind themselves as follows:
provided, that any obligation of the Issuer created by or arising out of this
Agreement shall never constitute a debt or a pledge of the faith and credit or
the taxing power of the Issuer or any political subdivision or taxing district
of the State of Florida but shall be payable solely out of the Trust Estate (as
defined in the Indenture), anything herein contained to the contrary by
implication or otherwise notwithstanding:
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ARTICLE I
DEFINITIONS
All capitalized, undefined terms used herein shall have the same
meanings as used in Article I of the hereinafter defined Indenture. In addition,
the following words and phrases shall have the following meanings:
"Company Representative" means the authorized representative of
the Company empowered to act on behalf of the Company in the manner described
herein.
"Cost" with respect to the Project shall be deemed to include all
items permitted to be financed under the provisions of the Code and the Act.
"Default" means any Default under this Agreement as specified in
and defined by Section 8.1 hereof.
"Indenture" means the Indenture of Trust dated as of this date
between the Issuer and the Trustee, pursuant to which the Bonds are authorized
to be issued, and any amendments and supplements thereto.
"Issuance Costs" means all costs that are treated as costs of
issuing or carrying the Bonds under existing Treasury Department regulations and
rulings, including, but not limited to, (a) underwriter's spread (whether
realized directly or derived through purchase of the Bonds at a discount below
the price at which they are expected to be sold to the public); (b) counsel fees
(including bond counsel, underwriter's counsel, Issuer's counsel, Company
counsel, as well as any other specialized counsel fees incurred in connection
with the issuance of the Bonds); (c) financial adviser fees incurred in
connection with the issuance of the Bonds; (d) rating agency fees; (e) Trustee
fees incurred in connection with the issuance of the Bonds; (f) paying agent and
certifying and authenticating agent fees related to issuance of the Bonds; (g)
accountant fees related to the issuance of the Bonds; (h) printing costs of the
Bonds and of the preliminary and final offering materials; (I) publication costs
associated with the financing proceedings; (j) Issuer's closing fee of .5% of
the aggregate principal amount of Bonds issued and (k) costs of engineering and
feasibility studies necessary to the issuance of the Bonds; provided, that bond
insurance premiums and certain credit enhancement fees, to the extent treated as
interest expense under applicable regulations, shall not be treated as "Issuance
Costs."
"Issuance Fee" means a fee of 1/2 of 1% of up to the first $4
million of the aggregate principal amount of Bonds, which equals $17,500 to
which are issued to be payable to the Broward Economic Development Council.
"Issuer Representative" means the authorized representative of
the Issuer empowered to act on behalf of the Issuer in the manner described
herein.
"Mortgage" means the Mortgage and Security Agreement dated as of
October 1, 1996 from HEICO Aerospace Corporation to SunTrust Bank, South
Florida, National Association and Broward County.
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"Net proceeds of the sale of the Bonds" means the proceeds from
the sale of the Bonds reduced by amounts in a reasonably required reserve or
replacement fund.
"Plans and Specifications" means the plans and specifications for
the Project submitted to the Bank and the Trustee.
"Project" means the Project Site, the Project Facilities and the
Project Equipment.
"Project Equipment" means the items of machinery, equipment, or
other tangible property described in EXHIBIT B hereof located on the Project
Site or used in connection within the Project Facilities and purchased with Bond
proceeds.
"Project Facilities" means those certain buildings or
improvements to buildings and all other facilities and improvements forming a
part of the Project existing or to be renovated, expanded or rehabilitated on
the Project Site and not constituting part of the Project Equipment, as they may
at any time exist, and which are described generally in EXHIBIT A hereto.
"Project Site" means the site located at 3000 Taft Street in the
City of Hollywood, Broward County, Florida on which the Project Facilities are
situated, and any other interests in real property, leasehold interests,
easements, licenses, and rights in real property hereafter acquired by the
Company with proceeds of the Bonds for use in connection with the Project.
"Qualified Project Costs" means costs and expenses of the Project
which constitute land costs or costs for property of a character subject to the
allowance for depreciation excluding specifically working capital and inventory
costs, provided, however, that (i) costs or expenses paid more than sixty (60)
days prior to the adoption by the Issuer of its resolution on May 28, 1996,
declaring its intent to reimburse Project expenditures with Bond proceeds, shall
not be deemed to be Qualified Project Costs; (ii) Issuance Costs shall not be
deemed to be Qualified Project Costs; (iii) interest during the Construction
Period shall be allocated between Qualified Project Costs and other costs and
expenses to be paid from the proceeds of the Bonds; (iv) interest following the
Construction Period shall not constitute a Qualified Project Cost; (v) letter of
credit fees and munici- pal bond insurance premiums which represent a transfer
of credit risk shall be allocated between Qualified Project Costs and other
costs and expenses to be paid from the proceeds of the Bonds; and (vi) letter of
credit fees and municipal bond insurance premiums which do not represent a
transfer of credit risk shall not constitute Qualified Project Costs.
"Requisition" means a written request for a disbursement from the
Construction Fund, signed by a Company Representative, substantially in the form
attached hereto as Exhibit C and satisfactorily completed as contemplated by
said form.
"State" means the State of Florida.
"Term of Agreement" means the term of this Agreement as specified
in Section 9.1 hereof.
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ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES
SECTION 2.1. REPRESENTATIONS, COVENANTS AND WARRANTIES OF THE
ISSUER. The Issuer represents, covenants and warrants that:
(a) The Issuer is a political subdivision of the State of
Florida. Under the provisions of the Act, the Issuer is authorized to
enter into the transactions contemplated by this Agree- ment and the
Indenture and to carry out its obligations hereunder and thereunder. The
Issuer has been duly authorized to execute and deliver this Agreement
and the Indenture.
(b) The Issuer covenants that it will not pledge the amounts
derived from this Agreement other than as contemplated by the Indenture.
SECTION 2.2. REPRESENTATIONS, COVENANTS AND WARRANTIES OF THE
COMPANY. The Company represents, covenants and warrants that:
(a) The Company is a corporation duly organized and validly
existing under the laws of the State of Florida. The Company is not in
violation of any provision of its Articles of Incorporation, as amended,
has the corporate power to enter into this Agreement, and has duly
authorized the execution and delivery of this Agreement, and is
qualified to do business and is in good standing under the laws of the
State.
(b) The Company agrees that during the Term of Agreement it will
maintain its existence, will not dissolve or otherwise dispose of all or
substantially all of its assets and will not consolidate with or merge
into another legal entity or permit one or more other legal entities to
consolidate with or merge into it, without the prior written consent of
the Issuer, the Bank and the Trustee.
(c) Neither the execution and delivery of this Agreement, the
Mortgage, the Guaran- ty, the Remarketing Agreement, the Credit
Agreement, the Tender Agent Agreement or the Pledge Agreement, nor the
consummation of the transactions contemplated hereby and thereby, nor
the fulfillment of or compliance with the terms and conditions hereof or
thereof conflicts with or results in a breach of the terms, conditions,
or provisions of any agreement or instrument to which the Company is now
a party or by which the Company is bound, or constitutes a default under
any of the foregoing, or results in the creation or imposition of any
lien, charge or encumbrance whatsoever upon any of the property or
assets of the Company under the terms of any such instrument or
agreement.
(d) There is no action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court, public board
or body, known to be pending or threatened against or affecting the
Company or any of its officers, wherein an unfavorable decision, ruling,
or finding would materially adversely affect the transactions
contemplated by this Agreement or which would adversely affect, in any
way, the validity or enforceability of the Bonds, this Agreement, the
Mortgage, the Guaranty, the Pledge Agreement, the Tender Agent
Agreement, the Credit Agreement, the Remarketing Agreement, or any
agreement or instrument to which
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the Company is a party, used or contemplated for use in the
consummation of the transactions contemplated hereby.
(e) The Project, to the best of the knowledge of the Company, is
of the type authorized and permitted by the Act, and its estimated Cost
is not less than $3,500,000.
(f) The proceeds from the sale of the Bonds will be used only for
payment of Costs of the Project.
(g) The Company will use due diligence to cause the Project to be
operated in accordance with the laws, rulings, regulations and
ordinances of the State and the depart- ments, agencies and political
subdivisions thereof. The Company has obtained or caused to be obtained
all requisite approvals of the State and of other federal, state,
regional and local governmental bodies for the renovation, expansion,
rehabilitation, improving and equipping of the Project.
(h) The Company will fully and faithfully perform all the duties
and obligations which the Issuer has covenanted and agreed in the
Indenture to cause the Company to perform and any duties and obligations
which the Company is required in the Indenture to perform. The foregoing
shall not apply to any duty or undertaking of the Issuer which by its
nature cannot be delegated or assigned.
(i) The issuance of the Bonds by the Issuer and the lending of
the proceeds thereof to the Company to enable the Company to renovate,
expand, rehabilitate and equip the Project have induced the Company to
locate the Project in the County which will directly result in an
increase in employment opportunities in the County.
SECTION 2.3. TAX-EXEMPT STATUS OF THE BONDS. The Company hereby
represents, warrants and agrees that the Tax Certificate and the Tax Regulatory
Agreement executed and delivered by the Company concurrently with the issuance
and delivery of the Bonds is true, accurate and complete in all material
respects as of the date on which executed and delivered.
SECTION 2.4. NOTICE OF DETERMINATION OF TAXABILITY. Promptly
after the Company first becomes aware of any Determination of Taxability, the
Company shall give written notice thereof to the Issuer and the Trustee.
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ARTICLE III
ACQUISITION AND CONSTRUCTION
OF THE PROJECT;
ISSUANCE OF THE BONDS
SECTION 3.1. AGREEMENT TO RENOVATE, EXPAND, REHABILITATE AND
EQUIP THE PROJECT. The Company agrees to make all contracts and do all things
necessary for the renovation, expansion, rehabilitation and equipping of the
Project, with or without advertising for bids, and the Company agrees that it
will cause the Project Facilities to be constructed on the Project Site
substantially in accordance with the Plans and Specifications and that it will
cause the Project Equipment to be installed therein or located thereon. The
Company may make such change orders as it deems necessary or desirable provided,
however, that any change orders the cost of which, either individual- ly or in
the aggregate, shall exceed $100,000 shall be subject to the prior written
approval of the Bank.
The Company further agrees that it will renovate, expand,
rehabilitate and equip the Project with all reasonable dispatch and use its best
efforts to cause renovation, expansion, rehabilita- tion, equipping, and
occupancy of the Project Facilities to be completed by October 1, 1999, or as
soon thereafter as may be practicable, delays caused by FORCE MAJEURE as defined
in Section 8.1 hereof only excepted; but if for any reason such renovation,
expansion, rehabilitation and equipping is not completed by said date there
shall be no resulting liability on the part of the Company and no diminution in
or postponement of the payments required in Section 4.2 hereof to be paid by the
Company and the Company further agrees to keep the Project free of all
encumbrances except the permitted encumbrances set forth in Exhibit D and to
subject to the lien and security interest of the Mortgage each item of Project
Equipment prior to the delivery of the Bonds. The Company shall obtain mortgagee
title insurance in an amount not less than the principal amount of the Series
1996 Bonds insuring the Issuer's and the Trustee's interest under the Mortgage
and a current survey of the Project Site certified to the Issuer and the
Trustee.
SECTION 3.2. AGREEMENT TO ISSUE THE BONDS; APPLICATION OF BOND
PROCEEDS. In order to provide funds for the payment of a portion of the Cost of
the Project, the Issuer, concurrent- ly with the execution of this Agreement,
will issue, sell, and deliver the Bonds and deposit the net proceeds thereof
with the Trustee in the Construction Fund.
SECTION 3.3. DISBURSEMENTS FROM THE CONSTRUCTION FUND. The Issuer
has, in the Indenture, authorized and directed the Trustee to make disbursements
from the Construction Fund to pay the Costs of the Project, or to reimburse the
Company for any Cost of the Project paid by the Company. The Trustee shall not
make any disbursement from the Construction Fund until the Company shall have
provided the Trustee with a Requisition approved by the Bank in advance.
SECTION 3.4. FURNISHING DOCUMENTS TO THE TRUSTEE. The Company
agrees to cause such Requisitions to be directed to the Trustee as may be
necessary to effect payments out of the Construction Fund in accordance with
Section 3.3 hereof.
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SECTION 3.5. ESTABLISHMENT OF COMPLETION DATE.
(a) The Completion Date shall be evidenced to the Issuer and the
Trustee by a certificate signed by a Company Representative stating that, except
for amounts retained by the Trustee at the Company's direction to pay any Cost
of the Project not then due and payable, (i) construction of the Project has
been substantially completed and all costs then due of labor, services,
materials and supplies used in such construction have been paid, (ii) all
equipment for the Project has been installed, such equipment so installed is
suitable and sufficient for the operation of the Project, and all costs then due
and expenses incurred in the acquisition and installation of such equipment have
been paid, and (iii) all other facilities necessary in connection with the
Project have been renovated, expanded, rehabilitated and equipped and all costs
and expenses incurred in connection therewith have been paid. Notwithstanding
the foregoing, such certificate shall state that it is given without prejudice
to any rights against third parties which exist at the date of such certificate
or which may subsequently come into being. Forthwith upon completion of the
renovation, expansion, rehabilitation and equipping of the Project, the Company
agrees to cause such certificate to be furnished to the Issuer and the Trustee.
Upon receipt of such certificate, the Trustee shall retain in the Construction
Fund a sum equal to the amounts necessary for payment of the Costs of the
Project not then due and payable according to such certificate. If any such
amounts so retained are not subsequently used, prior to any transfer of said
amounts to the General Account of the Bond Fund as provided below, the Trustee
shall give notice to the Company of the failure to apply said funds for payment
of the Costs of the Project. Any amount not to be retained in the Construction
Fund for payment of the Costs of the Project, and all amounts so retained but
not subsequently used, shall be transferred by the Trustee into the General
Account of the Bond Fund.
(b) As of the Completion Date, if at least ninety-five percent (95%) of
the net proceeds of the sale of the Bonds have not been used to pay Qualified
Project Costs, any amount (exclusive of amounts retained by the Trustee in the
Construction Fund for payment of Costs of the Project not then due and payable)
remaining in the Construction Fund shall be transferred by the Trustee into the
General Account of the Bond Fund and used by the Trustee (a) to redeem, or to
cause the redemption of, Bonds on the earliest redemption date permitted by the
Indenture without a premium, (b) to purchase Bonds on the open market prior to
such redemption date at prices not in excess of one hundred percent (100%) of
the principal amount of such Bonds, or (c) for any other purpose provided that
the Trustee is furnished with an opinion of Bond Counsel to the effect that such
use is lawful under the Act and will not require that interest on the Bonds be
included in gross income for federal income tax purposes. Until used for one or
more of the foregoing purposes, such segregated amount may be invested as
permitted by the Indenture provided that prior to any such investment the
Trustee is provided with an opinion of Bond Counsel to the effect that such
investment will not require that interest on the Bonds be included in gross
income for federal income tax purposes.
SECTION 3.6. COMPANY REQUIRED TO PAY IN EVENT CONSTRUCTION FUND
INSUFFICIENT. In the event the moneys in the Construction Fund available for
payment of the Costs of the Project should not be sufficient to pay the Costs of
the Project in full, the Company agrees to complete the Project and to pay that
portion of the Costs of the Project in excess of the moneys available therefor
in the Construction Fund. The Issuer does not make any warranty, either express
or implied, that the moneys paid into the Construction Fund and available for
payment of the Costs of the Project will be sufficient to pay all of the Costs
of the Project. The Company agrees that if after exhaustion of the moneys in the
Construction Fund, the Company should pay any portion of the Costs of the
Project pursuant to the provisions of this Section, the Company shall not be
entitled to any reimbursement
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therefor from the Issuer, the Trustee or the Owners of any of the Bonds, nor
shall the Company be entitled to any diminution of the amounts payable under
Section 4.2 hereof. Costs of the Project shall include, but not be limited to,
conveyance, transfer and recording costs and all taxes and charges related
thereto.
SECTION 3.7. SPECIAL ARBITRAGE CERTIFICATIONS. The Company and
the Issuer covenant not to cause or direct any moneys on deposit in any fund or
account to be used in a manner which would cause the Bonds to be classified as
"arbitrage bonds" within the meaning of Section 148 of the Code, and the Company
certifies and covenants to and for the benefit of the Issuer and the Owners of
the Bonds that so long as there are any Bonds Outstanding, moneys on deposit in
any fund or account in connection with the Bonds, whether such moneys were
derived from the proceeds of the sale of the Bonds or from any other sources,
will not be used in a manner which will cause the Bonds to be classified as
"arbitrage bonds" within the meaning of Section 148 of the Code.
SECTION 3.8. DAMAGE, DESTRUCTION OR LOSS OF PROPERTY; OBLIGATION
TO REBUILD; USE OF INSURANCE PROCEEDS AND CONDEMNATION AWARDS. If prior to full
payment of all Bonds (or provision for payment thereof having been made in
accordance with the provisions of the Inden- ture), the Project, or any part or
component of the Project shall be damaged or destroyed, by whatever cause, or
shall be taken by any public authority or entity in the exercise of or acquired
under the threat of the exercise of its power of eminent domain, there shall be
no abatement or reduction in the Loan Installments payable under this Agreement,
and the Company will apply any insurance proceeds or condemnation awards
resulting from claims for such losses or takings as provided in this Section.
If prior to full payment of all Bonds (or provision for payment
thereof having been made in accordance with the provisions of the Indenture),
the Project, or any part or component of the Project shall be damaged,
destroyed, or the Project or any part or component of the Project, the Project
Site shall be taken by eminent domain or the threat of exercise of eminent
domain, the Company shall promptly give, or cause to be given, written notice
thereof to the Issuer, the Bank and the Trustee. All proceeds received from such
property insurance with respect to the Project and all condemnation awards with
respect to the Project shall be deposited with the Trustee to the credit of the
Construction Fund. Following the occurrence of such an event with respect to the
Project, the Company shall have the option of (1) continuing to pay all amounts
payable hereunder and to the extent permitted below proceeding promptly to
repair, rebuild, restore or replace the property damaged, destroyed or taken,
with such changes, alterations and modifications (including the substitution and
addition of other property) as may be desired by the Company and, with respect
to the Project, and as will comply with the limitations contained in this
Agreement, and the Trustee will deposit such proceeds to the credit of the
Construction Fund and make such disbursements therefrom, in accordance with
Section 3.3 hereof, as may be necessary to pay the cost of such repair,
rebuilding or restoration, either on completion thereof or as the work
progresses or (2) requesting the Issuer to cause the Bonds to be redeemed in
accordance with the terms of the Indenture.
SECTION 3.9. PURSUIT OF REMEDIES AGAINST CONTRACTORS,
SUBCONTRACTORS AND SURETIES. In the event of default of any contractor or
subcontractor, if any, under any contract made by it in connection with the
Project, the Company will promptly proceed, either separately or in conjunc-
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tion with others, to exhaust its remedies against the contractor or
subcontractor so in default and against each surety for the performance of such
contract. The Company agrees forthwith to take such actions as may be necessary
or required to protect the interests of all parties with respect to the Project
unless directed to the contrary by the Trustee. Any amounts recovered by way of
damages, refunds, adjustments or otherwise in connection with the foregoing that
are needed to pay a portion of the cost of the Project shall be paid into the
applicable account in the Construction Fund.
ARTICLE IV
LOAN PROVISIONS; SUBSTITUTE
LETTER OF CREDIT
SECTION 4.1. LOAN OF PROCEEDS. The Issuer agrees, upon the terms
and conditions contained in this Agreement and the Indenture, to lend to the
Company the proceeds received by the Issuer from the sale of the Bonds. Such
proceeds shall be disbursed to or on behalf of the Company as provided in
Section 3.3 hereof.
SECTION 4.2. AMOUNTS PAYABLE.
(a) The Company hereby covenants and agrees to repay the loan, as
follows: on or before any Interest Payment Date for the Bonds or any other date
that any payment of interest, premium, if any, or principal or Purchase Price is
required to be made in respect of the Bonds pursuant to the Indenture, until the
principal of, premium, if any, and interest on the Bonds shall have been fully
paid or provision for the payment thereof shall have been made in accordance
with the Indenture, in immediately available funds, a sum which, together with
any other moneys available for such payment in any account of the Bond Fund,
will enable the Trustee to pay the amount payable on such date as Purchase Price
or principal of (whether at maturity or upon redemption or acceleration or
otherwise), premium, if any, and interest on the Bonds as provided in the
Indenture; provided, however, that the obligation of the Company to make any
payment hereunder shall be deemed satisfied and discharged to the extent of the
corresponding payment made by the Bank to the Trustee under the Letter of
Credit.
It is understood and agreed that all payments payable by the
Company under subsection (a) of this Section 4.2 are assigned by the Issuer to
the Trustee for the benefit of the Owners of the Bonds. The Company assents to
such assignment. The Issuer hereby directs the Company and the Company hereby
agrees to pay to the Trustee at the Principal Office of the Trustee all payments
payable by the Company pursuant to this subsection.
(b) The Company will also pay the Issuance Fee and reasonable
expenses of the Issuer related to the issuance of the Bonds and incurred upon
the written request of the Company and all reasonable ongoing costs and expenses
for any continuing duties or obligations of the Issuer related in any respect to
the Bonds, this Agreement, the Indenture or any other documents executed in
connection therewith after the issuance of the Bonds.
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(c) The Company will also pay the reasonable fees and expenses of
the Trustee under the Indenture and all other amounts which may be payable to
the Trustee under Section 10.02 of the Indenture, such amounts to be paid
directly to the Trustee for the Trustee's own account as and when such amounts
become due and payable.
(d) The Company covenants, for the benefit of the Owners of the
Bonds, to pay or cause to be paid, to the Tender Agent, such amounts as shall be
necessary to enable the Tender Agent to pay the Purchase Price of Bonds
delivered to it for purchase, all as more particularly described in Sections
3.08, 4.01, 4.02 and 4.04 of the Indenture; PROVIDED, HOWEVER, that the
obligation of the Company to make any such payment under this subsection (d)
shall be reduced by the amount of moneys available for such payment described in
subsection (I) of Section 4.05 of the Indenture; and PROVIDED, FURTHER, that the
obligation of the Company to make any payment under this subsection (d) shall be
deemed to be satisfied and discharged to the extent of the corresponding payment
made by the Bank under the Letter of Credit.
(e)(i) In the event the Company should fail to make any of the
payments required in this Section 4.2, which are not otherwise paid by the Bank,
the item or installment so in default shall continue as an obligation of the
Company until the amount in default shall have been fully paid, and the Company
agrees to pay the same with interest thereon, to the extent permitted by law,
from the date when such payment was due, at the rate of interest borne by the
Bonds. (ii) In the event the Company should fail or refuse to comply with the
provisions of this Agreement or the Mortgage or the Indenture after the Letter
of Credit Termination Date, and such default continues for thirty (30) days
after written notice has been given by the Trustee, the Trustee may proceed,
subject to Section 9.03 of the Indenture, to protect and enforce the rights of
the Owners by mandamus or by action or suit in equity.
SECTION 4.3. OBLIGATIONS OF COMPANY UNCONDITIONAL. The
obligations of the Company to make the payments required in Section 4.2 and to
perform and observe the other agreements contained herein and in the Mortgage
shall be absolute and unconditional and shall not be subject to any defense or
any right of setoff, counterclaim or recoupment arising out of any breach by the
Issuer or the Trustee of any obligation to the Company, whether hereunder or
other- wise, or out of any indebtedness or liability at any time owing to the
Company by the Issuer or the Trustee, and, until such time as the principal of,
premium, if any, and interest on the Bonds shall have been fully paid or
provision for the payment thereof shall have been made in accordance with the
Indenture, the Company (i) will not suspend or discontinue any payments provided
for in Section 4.2 hereof, (ii) will perform and observe all other agreements
contained in this Agreement and in the Mortgage and (iii) except as otherwise
provided herein, will not terminate the Term of Agreement for any cause,
including, without limiting the generality of the foregoing, failure of the
Company to complete the renovation, expansion, rehabilitation and equipping of
the Project, the occurrence of any acts or circumstances that may constitute
failure of consideration, eviction or constructive eviction, destruction of or
damage to the Project, the taking by eminent domain of title to or temporary use
of any or all of the Project, commercial frustration of purpose, any change in
the tax or other laws of the United States of America or of the State or any
political subdivision of either thereof or any failure of the Issuer or the
Trustee to perform and observe any agreement, whether express or implied, or any
duty, liability or obligation arising out of or connected with this Agree- ment.
Nothing contained in this Section shall be construed as a waiver of any rights
of the Company or to release the Issuer or the Trustee from the performance of
any of the agreements on its part herein contained or contained in the Indenture
or the Mortgage, and in the event the Issuer or the
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Trustee should fail to perform any such agreement on its part, the Company may
institute such action against the Issuer or the Trustee as the Company may deem
necessary to compel performance so long as such action does not abrogate the
obligations of the Company contained in the first sentence of this Section.
SECTION 4.4. SUBSTITUTE LETTER OF CREDIT. During the period in
which the Bonds bear interest at the Adjustable Rate, the Company may provide
for the delivery to the Trustee of a Substitute Letter of Credit. Any Substitute
Letter of Credit shall be delivered to the Trustee not less than sixty (60) days
prior to the expiration of the Letter of Credit it is being issued to replace,
shall be dated as of a date prior to the expiration date of the Letter of Credit
for which the same is to be substituted (which date may be subsequent to the
date of delivery of such Substitute Letter of Credit, but in any case such
Substitute Letter of Credit shall become effective prior to the expiration of
the Letter of Credit for which it is substituted), and shall expire on a date
which is fifteen days after an Interest Payment Date for the Bonds. On or before
the date of such delivery of a Substitute Letter of Credit to the Trustee, the
Company shall furnish to the Trustee (a) written evidence from each rating
agency by which the Bonds are then rated, to the effect that such rating agency
has reviewed the proposed Substitute Letter of Credit and that the substitution
of the proposed Substitute Letter of Credit will not, by itself, result in the
reduction or withdrawal of the then applicable rating(s) of the Bonds; (b) a
written opinion of Bond Counsel stating that the delivery of such Substitute
Letter of Credit will not adversely affect the exclusion from gross income of
interest on the Bonds for federal income tax purposes; and (c) a written opinion
of counsel to the Substitute Bank to the effect that the Substitute Letter of
Credit is a legal, valid, binding and enforceable obligation of the Substitute
Bank in accordance with its terms.
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ARTICLE V
PREPAYMENT AND REDEMPTION
SECTION 5.1. PREPAYMENT AND REDEMPTION. The Company shall have
the option to prepay its obligations hereunder and under the Mortgage at the
times and in the amounts as neces- sary to exercise its option to cause the
Bonds to be redeemed as set forth in the Indenture and in the Bonds. The Company
hereby agrees that it shall prepay its obligations hereunder at the times and in
the amounts as necessary to accomplish the mandatory redemption of the Bonds as
set forth in the Indenture and in the Bonds. The Issuer, at the request of the
Company, shall forthwith take all steps (other than the payment of the money
required for such redemption) necessary under the applicable redemption
provisions of the Indenture to effect redemption of all or part of the
Outstanding Bonds, as may be specified by the Company, on the date established
for such redemption.
12
ARTICLE VI
SPECIAL COVENANTS
SECTION 6.1. NO WARRANTY OF CONDITION OR SUITABILITY BY ISSUER.
THE ISSUER MAKES NO WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE PROJECT OR
THE CONDITION THEREOF, OR THAT THE PROJECT WILL BE SUITABLE FOR THE PURPOSES OR
NEEDS OF THE COMPANY. THE ISSUER MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, THAT THE COMPANY WILL HAVE QUIET AND PEACEFUL POSSESSION OF THE
PROJECT. THE ISSUER MAKES NO REPRESENTATION OR WARRAN- TY, EXPRESS OR IMPLIED,
WITH RESPECT TO THE MERCHANTABILITY, CONDITION OR WORKMANSHIP OF ANY PART OF THE
PROJECT OR ITS SUITABILITY FOR THE COMPAN- Y'S PURPOSES.
SECTION 6.2. ACCESS TO THE PROJECT. The Company agrees that the
Issuer, the Bank, the Trustee and their duly authorized agents, attorneys,
experts, engineers, accountants and representatives shall have the right to
inspect the Project during regular business hours and on reasonable notice. The
Issuer, the Bank, the Trustee and their duly authorized agents shall also be
permitted, at all reasonable times, to examine the books and records of the
Company with respect to the Project.
SECTION 6.3. FURTHER ASSURANCES AND CORRECTIVE INSTRUMENTS. The
Issuer and the Company agree that they will, from time to time, execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered,
such supplements hereto and such further instruments as may reasonably be
required for carrying out the expressed intention of this Agreement and the
Mortgage.
SECTION 6.4. ISSUER AND COMPANY REPRESENTATIVES. Whenever under
the provisions of this Agreement the approval of the Issuer or the Company is
required or the Issuer or the Company is required to take some action at the
request of the other, such approval or such request shall be given for the
Issuer by an Issuer Representative and for the Company by a Company
Representative. The Trustee shall be authorized to act on any such approval or
request.
SECTION 6.5. FINANCIAL REPORTS. After the Conversion Date, and
so long as any of the Bonds are Outstanding, the Company shall furnish or cause
to be furnished to the Trustee and the Issuer the following information:
(a) Within one hundred twenty (120) days after the close of each
fiscal year of the Company consolidated financial statements of the Company, and
thereafter a balance sheet of the Company as of the end of such fiscal year and
statements of income and surplus of the Company for such fiscal year, each
prepared in accordance with generally accepted accounting principles
consistently applied, in reasonable detail and certified by certified public
accountants of recognized standing.
(b) Within sixty (60) days after the close of each of the first
three quarters of the Company's fiscal year, a balance sheet of the Company as
of the end of such quarter, and a statement of income and surplus of the Company
for such quarter and for the period from the beginning of the then fiscal year
to the end of such quarter, prepared in accordance with generally
13
accepted accounting principles consistently applied (subject to year-end
adjustments), in reasonable detail and certified by a Company Representative.
(c) Upon request, copies of all such regular or periodic reports,
which are available for public inspection which the Company may be required to
file with any federal or state department, bureau, commission, or agency.
(d) Within one hundred twenty (120) days after the end of each
fiscal year, a certificate of a Company Representative stating whether the
Company is in compliance with all covenants and agreements made by the Company
in this Agreement and the Mortgage.
SECTION 6.6. FINANCING STATEMENTS. The Company agrees to execute
and file or cause to be executed and filed any and all financing statements or
amendments thereof or continua- tion statements necessary to perfect and
continue the perfection of the security interests granted in the Indenture and
the Mortgage. The Company shall pay all costs of filing such instruments.
SECTION 6.7. MAINTENANCE OF PROJECT. The Issuer and the Company
agree that the Company will (i) maintain, repair and operate the Project; and
(ii) pay, prior to any penalties accruing or the same becoming delinquent, all
taxes and governmental charges of any kind whatsoever that may at any time be
lawfully assessed or levied against the Company or the Issuer with respect to
the Project or any portion thereof or with respect to the original issuance of
the Bonds, including, without limiting the generality of the foregoing, any
taxes levied against the Company or the Issuer upon or with respect to the
income or profits of the Issuer from the Project or a charge on the loan
payments due hereunder prior to or on a parity with the charge under the
Indenture thereon and the pledge or assignment thereof to be created and made in
the Indenture, and including all ad valorem taxes lawfully assessed upon the
Project, all utility and other charges incurred in the operation, maintenance,
use, occupancy and upkeep of the Project, all assessments and charges lawfully
made by any governmental body against the Company or the Issuer on the loan
payments due hereunder; provided, however, that nothing in this subsection (ii)
shall require the payment of any such tax or charge or make provision for the
payment thereof, so long as the validity thereof shall be contested in good
faith by the Company by appropriate legal or administra- tive proceedings, and
further provided that, with respect to special assessments or other governmental
charges that may lawfully be paid in installments over a period of years, the
Company shall be obligated to pay only such installments as are required to be
paid during the Term of the Agreement.
SECTION 6.8. UNDERTAKING TO PROVIDE ONGOING DISCLOSURE.
(a) This Section 6.8 constitutes the written undertaking for the
benefit of the holders of the Bonds required by Section (b)(5)(i) of Securities
and Exchange Commission Rule 15c2-12 under the Securities Exchange Act of 1934,
as amended (17 CFR Part 240, ss. 240. 15c2-12) (the "Rule"), and shall apply
when and if the Company exercises the Conversion Option. It is the Company's
express intention that this Section 6.8 be assigned pursuant to and in accor-
dance with the terms of the Indenture to the Trustee for the benefit of the
Bondholders and that the Trustee and each Bondholder be a beneficiary of this
Section 6.8 with the right to enforce this Section 6.8 directly against the
Company. Capitalized terms used in this Section 6.8 and not
14
otherwise defined in this Agreement shall have the meanings assigned such terms
in subsection (d) hereof.
(b) The Company, as an "obligated person" within the meaning of
the Rule, undertakes to provide the following information as provided in this
Section 6.8:
(1) Annual Financial Information;
(2) Financial Statements, if any; and
(3) Material Event Notices.
(c) (1) Subject to the terms of this Section 6.8, the Company shall
while any Bonds are Outstanding provide the Annual Financial Information to the
Trustee on or before April 1 of each year after the election of the Conversion
Option (the "Submission Date"), and the Trustee shall provide to the Issuer and
to each then existing NRMSIR and the SID, if any, such Annual Financial
Information on or before April 30 of each year (the "Report Date") while any
Bonds are Outstand- ing or, if not received by the Trustee by the Submission
Date, then within fifteen (15) Business Days of its receipt by the Trustee. The
Company shall include with each submission of Annual Financial Information to
the Trustee and the Issuer a written representation addressed to the Trustee and
the Issuer to the effect that the Annual Financial Information is the Annual
Financial Informa- tion required by this Section 6.8 and that it complies with
the applicable requirements of this Section 6.8. The Company may adjust the
Submission Date and the Report Date if the Company changes its fiscal year by
providing written notice of the change of fiscal year and the new Submission
Date and Report Date to the Trustee, the Issuer, each then existing NRMSIR and
the SID, if any; provided that the new Report Date shall be one hundred twenty
(120) days after the end of the new fiscal year and the new Submission Date
shall be thirty (30) days prior to the Report Date, and provided further that
the period between the final Report Date relating to the former fiscal year and
the initial Report Date relating to the new fiscal year shall not exceed one
year in duration. It shall be sufficient if the Company provides to the Trustee
and the Issuer and the Trustee provides to each then existing NRMSIR and the
SID, if any, the Annual Financial Information by specific reference to documents
previously provided to each NRMSIR and the SID, if any, or filed with the
Securities and Exchange Commission and, if such a document is a final official
statement within the meaning of the Rule, available from the Municipal
Securities Rulemak- ing Board.
(2) If not provided as part of the Annual Financial Information,
the Company shall provide Financial Statements to the Trustee when and
if available while Bonds are Outstanding and the Trustee shall then
promptly provide the Issuer, each then existing NRMSIR and the SID, if
any, with such Financial Statements.
(3) (i) If a Material Event occurs while any Bonds are
Outstanding, the Company shall provide a Material Event Notice to the
Trustee in a timely manner and the Trustee shall promptly provide to the
Issuer, the Municipal Securities Rulemaking Board and the SID, if any,
such Material Event Notice. Each Material Event Notice shall be so
captioned and shall prominently state the date, title and CUSIP numbers
of the Bonds.
15
(ii) The Trustee shall promptly advise the Company whenever, in the
course of per- forming its duties as Trustee under the Indenture, the
Trustee identifies an occurrence which, if material, would require the
Company to provide a Material Event Notice pursuant to clause (2)(i);
provided that the failure of the Trustee so to advise the Company shall
not constitute a breach by the Trustee of any of its duties and
responsibilities hereunder.
(4) The Trustee shall, without further direction or instruction
from the Compa- ny, provide in a timely manner to the Municipal
Securities Rulemaking Board and to the SID, if any, notice of any
failure while any Bonds are Outstanding by the Trustee to provide to
each then existing NRMSIR and the SID, if any, Annual Financial
Information on or before the Report Date (whether caused by failure of
the Company to provide such information to the Trustee by the Submission
Date or for any other reason). For the purposes of determining whether
information received from the Company is Annual Financial Information,
the Trustee shall be entitled conclusively to rely on the Company's
written representation made pursuant to clause (c)(1) of this Section
6.8.
(5) If the Company provides to the Trustee information relating
to the Company or the Bonds, which information is not designated as a
Material Event Notice, and directs the Trustee to provide such
information to information repositories, the Trustee shall provide such
information in a timely manner to the Issuer, the Municipal Securities
Rulem- aking Board and the SID, if any.
(d) The following are the definitions of the capitalized terms
used in this Section and not otherwise defined in this Agreement.
(1) "Annual Financial Information" means the financial
information (which shall be based on financial statements prepared in
accordance with generally accepted accounting principles ("GAAP")) or
operating data with respect to the Company, provided at least annually,
of the type included in the official statement or other offering
document utilized in connection with the remarketing of Bonds after the
Conversion Option, which Annual Financial Information shall include
Financial Statements.
(2) "Financial Statements" means the Company's annual financial
statements, prepared in accordance with GAAP, and if audited,
accompanied by the report of the certified public accountant.
(3) "Material Event" means any of the following events, if
material, with respect to the Bonds.
(i) Principal and interest payment delinquencies;
(ii) Non-payment related defaults;
(iii) Unscheduled draws on debt service reserves reflecting
financial difficulties;
(iv) Unscheduled draws on credit enhancements reflecting
financial difficulties;
16
(v) Substitution of credit or liquidity providers, or their
failure to perform;
(vi) Adverse tax opinions or events affecting the tax-exempt
status of the security;
(vii) Modifications to rights of security holders;
(viii) Bond calls;
(ix) Defeasances;
(x) Release, substitution, or sale of property securing
repayment of the securi- ties; and
(xi) Rating changes.
(4) "Material Event Notice" means written or electronic notice of
a Material Event.
(5) "NRMSIR" means a nationally recognized municipal securities
information repository, as recognized from time to time by the
Securities and Exchange Commission for the purposes referred to in the
Rule; the NRMSIRs as of the date of this Agreement being as follows:
Thomson Municipal Services, Inc. of New York
Moody's Investor's Service (NRMSIR) of New York
Kenny Information Systems, Inc. of New York
Bloomberg Municipal Reposites of Princeton, New Jersey
Disclosure Inc. of Bethesda, Maryland
R.R. Donnelley Financial of Hudson, Massachusetts
(6) "SID" means a state information depository as operated or
designated by the State as such for the purposes referred to in the
Rule.
(e) Unless otherwise required by law and subject to technical and
economic feasibility, the Company and the Trustee shall employ such methods of
information transmission as shall be requested or recommended by the designated
recipients of the Company's information.
(f) The continuing obligation hereunder of the Company to provide Annual
Financial Information and Material Event Notices and the Trustee's obligations
under this Section 6.8 shall terminate immediately once the Bonds no longer are
Outstanding. This Section 6.8, or any provision hereof, shall be null and void
in the event that the Company delivers to the Trustee and the Issuer an opinion
of Bond Counsel to the effect that those portions of the Rule which require this
Section 6.8, or any such provisions, are invalid, have been repealed
retroactively or otherwise do not apply to the Bonds; provided that the Trustee
shall have provided notice of such delivery and the cancellation of this Section
6.8 to each then existing NRMSIR and the SID, if any. This
17
Section 6.8 may be amended without the consent of the Bondholders, but only upon
the delivery by the Company to the Trustee and the Issuer of the proposed
amendment and an opinion of nationally recognized bond counsel to the effect
that such amendment, and giving effect thereto, will not adversely affect the
compliance of this Section and by the Company with the Rule; provided that the
Trustee shall have provided notice of such delivery and of the amendment to each
then existing NRMSIR and the SID, if any.
(g) Any failure by the Company to perform in accordance with this
Section 6.8 shall not constitute an "Event of Default" under Article VIII
hereof, and the rights and remedies provided by Article VIII upon the occurrence
of an "Event of Default" shall not apply to any such failure. Neither the Issuer
nor the Trustee shall have any power or duty to enforce this Section 6.8.
(h) The Company shall reimburse the Trustee for any expenses incurred by
the Trustee in complying with the requirements of this Section 6.8.
(i) The Company shall comply with the requirements of Rule 15c2-12.
18
ARTICLE VII
ASSIGNMENT, SELLING, LEASING;
INDEMNIFICATION; REDEMPTION INSURANCE
SECTION 7.1. ASSIGNMENT, SELLING AND LEASING. This Agreement may
be assigned and the Project may be sold or leased, as a whole or in part, with
the prior written consent of the Bank and the Issuer, but without the necessity
of obtaining the consent of the Trustee; PROVIDED, however, that no such
assignment, sale or lease shall, in the opinion of Bond Counsel, result in
interest on any of the Bonds becoming includable in gross income for federal
income tax purposes, or shall otherwise violate any provisions of the Act;
PROVIDED FURTHER, however, that no such assignment, sale or lease shall relieve
the Company and the Guarantors of any of its obligations under this Agreement
for the period of time from the date of this Agreement to the date of such
transfer unless the assignee, purchaser or lessee shall have executed an
assumption agreement reasonably satisfactory to the Issuer and the Issuer
shall have consented to such assignment, sale or lease which consent shall not
be unreasonably withheld whereupon the Company shall be relieved of its
obligations under this Agreement and from and after the date of such assumption,
the Company shall no longer be liable thereupon.
SECTION 7.2. RELEASE AND INDEMNIFICATION COVENANTS.
(a) The Company shall and hereby agrees to indemnify and save the
Issuer and the Trustee harmless against and from all claims by or on behalf of
any person, firm, corporation or other legal entity arising from the conduct or
management of, or from any work or thing done on, the Project during the Term of
Agreement, including without limitation, (i) any condition of the Project, (ii)
any breach or default on the part of the Company in the performance of any of
its obligations under this Agreement, (iii) any act or negligence of the Company
or of any of its agents, contractors, servants, employees or licensees or (iv)
any act or negligence of any assignee or lessee of the Company, or of any
agents, contractors, servants, employees or licensees of any assignee or lessee
of the Company. The Company shall indemnify and save the Issuer and the Trustee
harmless from any such claim arising as aforesaid, or in connection with any
action or proceeding brought thereon, as well as from any claim arising from the
presence, disposal, release or threatened release of any Hazardous Substances
(as such term is defined in the Environmental Indemnification Agreement dated as
of October 1, 1996 between the Company and the Bank) and upon notice from the
Issuer or the Trustee, the Company shall defend them or either of them in any
such action or proceeding. The provisions of this Section shall survive the
payment in full of the obligations due hereunder.
(b) Notwithstanding the fact that it is the intention of the
parties hereto that the Issuer shall not incur any pecuniary liability by reason
of the terms of this Agreement or the undertakings required of the Issuer
hereunder, by reason of the issuance of the Bonds, by reason of the execution of
the Indenture or by reason of the performance of any act requested of the Issuer
by the Company, including all claims, liabilities or losses arising in
connection with the violation of any statutes or regulation pertaining to the
foregoing; nevertheless, if the Issuer should incur any such pecuniary
liability, then in such event the Company shall indemnify and hold the Issuer
harmless against all claims, demands or causes of action whatsoever, by or on
behalf of any person, firm or corporation or other legal entity arising out of
the same or out of any information provided by the
19
Company in any offering statement in connection with the sale or resale of the
Bonds and all costs and expenses incurred in connection with any such claim or
in connection with any action or proceeding brought thereon, and upon notice
from the Issuer, the Company shall defend the Issuer in any such action or
proceeding. All references to the Issuer in this Section 7.2 shall be deemed to
include its commissioners, directors, officers, employees, and agents.
Notwithstanding anything to the contrary contained herein, the
Company shall have no liability to indemnify the Issuer against claims or
damages resulting from the Issuer's own gross negligence or willful misconduct
or to indemnify the Trustee against claims or damages resulting from the
Trustee's own negligence or willful misconduct.
Notwithstanding anything to the contrary contained herein, this
provision 7.2 shall remain in effect after the termination of this Agreement.
SECTION 7.3. ISSUER TO GRANT SECURITY INTEREST TO TRUSTEE. The
parties hereto agree that pursuant to the Indenture, the Issuer shall assign to
the Trustee, in order to secure payment of the Bonds, all of the Issuer's right,
title, and interest in and to this Agreement, except for the Issuer's rights
under Sections 4.2(b), 7.2 and 8.4 hereof.
SECTION 7.4. INDEMNIFICATION OF TRUSTEE. The Company shall and
hereby agrees to indemnify the Trustee for, and hold the Trustee harmless
against, any loss, liability or expense (including the costs and expenses of
defending against any claim of liability) incurred without gross negligence or
willful misconduct by the Trustee and arising out of or in connection with its
acting as Trustee under the Indenture.
SECTION 7.5. MAINTENANCE, OPERATION AND INSURING OF PROJECT;
TAXES; NO OPERATION OF PROJECT BY ISSUER. The Company hereby agrees that it will
at its own expense maintain and operate all portions of the Project during their
useful lives or until they are replaced with facilities necessary in their
operation. The Company further agrees that, except for taxes contested in good
faith, it will pay all taxes levied with respect to the Project and the income
therefrom and that it will at its own expense keep the Project properly insured
against loss or damage from such perils usually insured against by businesses
operating or owning like properties and maintain public liability insurance and
all such worker's compensation or other similar insurance as may be required by
law. Evidence of such insurance will be furnished to the Trustee, Issuer and the
Bank upon request. Nothing contained in this Agreement shall be deemed to
authorize or require the Issuer to operate the Project or to conduct any
business enterprise in connection therewith.
20
ARTICLE VIII
DEFAULTS AND REMEDIES
SECTION 8.1. DEFAULTS DEFINED. The following shall be "Defaults"
under this Agreement and the term "Default" shall mean, whenever it is used in
this Agreement, any one or more of the following events:
(a) Failure by the Company to pay any amount required to be
paid under subsection (a) or (d) of Section 4.2 hereof.
(b) Failure by the Company to observe and perform any covenant,
condition or agreement on its part to be observed or performed, other than as
referred to in Section 8.1(a), for a period of thirty (30) days after written
notice specifying such failure and requesting that it be remedied shall have
been given to the Company by the Issuer or the Trustee, unless the Issuer and
the Trustee shall agree in writing to an extension of such time prior to its
expiration; provided, however, if the failure stated in the notice cannot be
corrected within the applicable period, the Issuer and the Trustee will not
unreasonably withhold their consent to an extension of such time if correc- tive
action is instituted by the Company within the applicable period and diligently
pursued until such failure is corrected.
(c) The dissolution or liquidation of the Company, except as
authorized by Section 2.2 hereof, or the voluntary initiation by the Company of
any proceeding under any federal or state law relating to bankruptcy,
insolvency, arrangement, reorganization, readjustment of debt or any other form
of debtor relief, or the initiation against the Company of any such proceeding
which shall remain undismissed for sixty (60) days, or failure by the Company to
promptly have discharged any execution, garnishment or attachment of such
consequence as would impair the ability of the Company to carry on its
operations at the Project, or assignment by the Company for the benefit of
creditors, or the entry by the Company into an agreement of composition with its
creditors or the failure generally by the Company to pay its debts as they
become due.
(d) The occurrence of a Default under the Indenture.
The provisions of subsection (b) of this Section are subject to the following
limitation: if by reason of FORCE MAJEURE the Company is unable in whole or in
part to carry out any of its agreements contained herein (other than its
obligations contained in Article IV hereof), the Company shall not be deemed in
Default during the continuance of such inability. The term "FORCE MAJEURE" as
used herein shall mean, without limitation, the following: acts of God; strikes
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
of any of their departments, agencies or officials, or of any civil or military
authority; insurrections; riots; landslides; earthquakes; fires; storms;
droughts; floods; explosions; breakage or accident to machinery, transmission
pipes or canals; and any other cause or event not reasonably within the control
of the Company. The Company agrees, however, to remedy with all reasonable
dispatch the cause or causes preventing the Company from carrying out its
agreement, provided that the settlement of strikes and other industrial
disturbances shall be entirely within the discretion of the Company and the
Company shall not be required to settle strikes, lockouts and other industrial
21
disturbances by acceding to the demands of the opposing party or parties when
such course is in the judgment of the Company unfavorable to the Company.
SECTION 8.2. REMEDIES ON DEFAULT. Whenever any Default referred
to in Section 8.1 hereof shall have happened and be continuing, the Trustee, or
the Issuer with the written consent of the Trustee, may take one or any
combination of the following remedial steps:
(a) If the Trustee has declared the Bonds immediately due and
payable pursuant to Section 9.02 of the Indenture, by written notice to the
Company, declare an amount equal to all amounts then due and payable on the
Bonds, whether by acceleration of maturity (as provided in the Indenture) or
otherwise, to be immediately due and payable, whereupon the same shall become
immediately due and payable;
(b) Have reasonable access to and inspect, examine and make
copies of the books and records and any and all accounts, data and income tax
and other tax returns of the Company during regular business hours of the
Company if reasonably necessary in the opinion of the Trustee; or
(c) Take whatever action at law or in equity may appear necessary
or desirable to collect the amounts then due and thereafter to become due, or to
enforce performance and obser- vance of any obligation, agreement or covenant of
the Company under this Agreement.
Any amounts collected pursuant to action taken under this Section
shall be paid into the Bond Fund and applied in accordance with the provisions
of the Indenture, except for anything collected pursuant to Section 4.2(b), 7.2
or 8.4 hereof which shall be applied to costs related thereto.
SECTION 8.3. NO REMEDY EXCLUSIVE. Subject to Section 9.02 of the
Indenture, no remedy herein conferred upon or reserved to the Issuer or the
Trustee is intended to be exclusive of any other available remedy or remedies,
but each and every such remedy shall be cumulative and shall be in addition to
every other remedy given under this Agreement or now or hereafter existing at
law or in equity. No delay or omission to exercise any right or power accruing
upon any Default shall impair any such right or power or shall be construed to
be a waiver thereof, but any such right or power may be exercised from time to
time and as often as may be deemed expedient. In order to entitle the 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 such notice as may be required in
this Article. Such rights and remedies as are given the Issuer hereunder shall
also extend to the Trustee, and the Trustee and the Owners of the Bonds, subject
to the provisions of the Indenture, shall be entitled to the benefit of all
covenants and agreements herein contained.
SECTION 8.4. AGREEMENT TO PAY ATTORNEYS' FEES AND EXPENSES. In
the event the Company should default under any of the provisions of this
Agreement and the Issuer should employ attorneys or incur other expenses for the
collection of payments required hereunder or the enforce- ment of performance or
observance of any obligation or agreement on the part of the Company herein
contained, the Company agrees that it will on demand therefor pay to the Issuer
the reason- able fee of such attorneys and such other expenses so incurred by
the Issuer.
22
SECTION 8.5. NO ADDITIONAL WAIVER IMPLIED BY ONE WAIVER. In the
event any agreement contained in this Agreement should be breached by either
party and thereafter waived by the other party, such waiver shall be limited to
the particular breach so waived and shall not be deemed to waive any other
breach hereunder.
23
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 TERM OF AGREEMENT. This Agreement shall remain in
full force and effect from the date hereof to and including October 1, 2011 or
until such time as all of the Bonds and the fees and expenses of the Issuer and
the Trustee and all amounts payable to the Bank under the Credit Agreement shall
have been fully paid or provision made for such payments, whichever is later;
provided, however, that this Agreement may be terminated prior to such date
pursuant to Article V of this Agreement.
SECTION 9.2. NOTICES. All notices, certificates or other
communications hereunder shall be sufficiently given and shall be deemed given
when delivered or mailed by registered mail, postage prepaid, addressed as
follows:
If to the Issuer: Broward County, Florida
Broward County Finance and Administrative
Services Department
115 South Andrews Avenue, Room 121
Fort Lauderdale, Florida 33301
Attention: Assistant Finance Director
with a copy to:
County Attorney's Office
Broward County Governmental Center
115 South Andrews Avenue, Suite 423
Fort Lauderdale, Florida 33301
Attention: Lori Smith-Lalla, Esq.
If to the Trustee: SunTrust Bank, Nature Coast
c/o SunTrust Bank, Central Florida, National
Association
225 East Robinson Street, Suite 250
Orlando, Florida 32801
Attention: Corporate Trust Department
If to the Company: HEICO Aerospace Corporation
3000 Taft Street
Hollywood, Florida 33521
Attention: Treasurer
with a copy to:
Weil, Gotshal & Manges LLP
701 Brickell Avenue, Suite 2100
Miami, Florida 33131
Attention: Richard A. Morrison, Esq.
24
If to the Bank: SunTrust Bank, South Florida, National
Association
501 East Las Olas Boulevard
Fort Lauderdale, Florida 33301
Attention: Corporate Banking Division
with a copy to:
SunTrust Bank, Atlanta
c/o SunTrust International
Services Inc.
25 Park Place, 16th Floor-3706
Atlanta, Georgia 30303
Attention: Corporate Banking Division
If to the issuer of a Its address designated in
Substitute Letter of Credit: writing to the Trustee
If to the Remarketing Agent: Its Principal Office
If to the Tender Agent: SunTrust Bank, Nature Coast
c/o SunTrust Bank, Central Florida, National
Association
225 East Robinson Street, Suite 250
Orlando, Florida 32801
Attention: Corporate Trust Department
If to Moody's: Moody's Investors Service, Inc.
99 Church Street
New York, New York 10007
Attention: Corporate Department,
Structured Finance Group
If to S&P: Standard & Poor's Ratings Group
The McGraw Hill Companies
25 Broadway
New York, New York 10004
Attention: Corporate Finance Department
A duplicate copy of each notice, certificate or other communication given
hereunder by the Issuer or the Company shall also be given to the Trustee and
the Bank. The Issuer, the Company, the Trustee and the Bank may, by written
notice given hereunder, designate any further or different addresses to which
subsequent notices, certificates or other communications shall be sent.
SECTION 9.3 BINDING EFFECT. This Agreement shall inure to the
benefit of and shall be binding upon the Issuer, the Company, the Bank, the
Trustee, the Owners of Bonds and their
25
respective successors and assigns, subject, however, to the limitations
contained in Section 2.2(b) hereof.
SECTION 9.4. SEVERABILITY. In the event any provision of this
Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invali- date or render unenforceable any
other provision hereof.
SECTION 9.5. AMOUNTS REMAINING IN FUNDS. Subject to the
provisions of Section 6.11 of the Indenture, it is agreed by the parties hereto
that any amounts remaining in any account of the Bond Fund, the Construction
Fund, or any other fund (other than the Rebate Fund) created under the Indenture
upon expiration or earlier termination of this Agreement, as provided in this
Agreement, after payment in full of the Bonds (or provision for payment thereof
having been made in accordance with the provisions of the Indenture) and the
fees and expenses of the Trustee in accordance with the Indenture, shall belong
to and be paid to the Company by the Trustee.
SECTION 9.6. AMENDMENTS, CHANGES AND MODIFICATIONS. Subsequent to
the issuance of Bonds and prior to their payment in full (or provision for the
payment thereof having been made in accordance with the provisions of the
Indenture), and except as otherwise herein expressly provided, this Agreement
may not be effectively amended, changed, modified, altered or terminated without
the written consent of the Trustee and, prior to the Letter of Credit
Termination Date and payment of all amounts payable to the Bank under the Credit
Agreement, the consent of the Bank, in accordance with the provisions of the
Indenture.
SECTION 9.7. EXECUTION IN COUNTERPARTS. This Agreement may be
simultaneously executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same instrument.
SECTION 9.8. APPLICABLE LAW. This Agreement shall be governed
by and construed in accordance with the laws of the State.
SECTION 9.9. CAPTIONS. The captions and headings in this
Agreement are for convenience only and in no way define, limit or describe the
scope or intent of any provisions or Sections of this Agreement.
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IN WITNESS WHEREOF, the Issuer and the Company have caused this
Agreement to be executed in their respective corporate names and their
respective corporate seals to be hereunto affixed and attested by their duly
authorized officers, all as of the date first above written.
(SEAL) BROWARD COUNTY, FLORIDA
Attest: By:______________________________
Title: Chair
By:___________________________________
Title: Assistant County Administrator
(SEAL) HEICO AEROSPACE CORPORATION
Attest: By:______________________________
Title:
By: ___________________________________
Title:
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EXHIBIT A
PROJECT FACILITIES
The Project Facilities consist of an approximately 147,000 square foot
manufacturing facility located at 3,000 Taft Street, Hollywood, Florida.
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EXHIBIT B
PROJECT EQUIPMENT
Laser cutting, drilling and welding equipment
Product development test and design equipment
Furniture and work stations
Machinery
Miscellaneous support and other equipment,
all to the extent purchased with the proceeds of the Bonds,
and located or used at the Project Facilities
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EXHIBIT C
REQUISITION NO. ___
BROWARD COUNTY
Industrial Development Revenue Bonds
(HEICO Aerospace Corporation Project),
Series 1996
REQUISITION FOR PAYMENT
--------------------------------------
HEICO Aerospace Corporation, referred to herein and in the Loan
Agreement (the "Agreement") dated as of October 1, 1996, between Broward County,
Florida (the "Issuer") and HEICO Aerospace Corporation, a Florida corporation
(the "Company"), does hereby make application to SunTrust Bank, Nature Coast, as
trustee (the "Trustee") under the Indenture of Trust (the "Indenture") between
the Issuer and the Trustee, dated as of October 1, 1996, for reimburse- ment or
payment of advances, payments and obligations made or incurred by the Company in
connection with the renovation, expansion, rehabilitation and equipping of the
Project Facilities (as defined in the Agreement) and the issuance, delivery and
sale of the $3,500,000 Broward County Industrial Development Revenue Bonds
(HEICO Aerospace Corporation Project), Series 1996, as provided for or
contemplated in the Agreement and the Indenture.
All capitalized terms used herein and not otherwise defined shall
have the meanings ascribed to them in the Agreement and the Indenture.
The Company does hereby request disbursement of the amounts as
set forth on EXHIBIT A attached to this certificate, for reimbursement to the
Company for payments made to, or incurred for, the contractors or payees listed
on EXHIBIT A or for direct payment to the payees listed on EXHIBIT A, all as
provided on EXHIBIT A.
The undersigned further certifies that:
(i) the obligations described in EXHIBIT A (which includes a
description of the purpose and circumstances of such obligations in
reasonable detail and the name and address of the persons to whom such
obligations are owed and which is accom- panied by bills, invoices, or
statements of account for, or other written evidence of, such
obligations) in the stated amounts have been incurred in connection with
the issuance and sale of the Bonds or the financing, planning, design,
renovation, expansion, rehabilitation and equipping of the Project;
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(ii) such obligations are permitted Costs of the Project, are
proper charges against the account in the Construction Fund and have not
been the basis for any previous disbursement from any account in the
Construction Fund;
(iii) no item in EXHIBIT A represents any portion of an
obligation which the Company is, as of the date hereof, entitled to
retain under any retained percentage agreement;
(iv) insofar as any obligation described in EXHIBIT A was
incurred for labor, services, materials, supplies or equipment (i) such
labor and services were actually performed in a satisfactory manner in
connection with the renovation, expansion, rehabilitation and equipping
of the Project and (ii) such materials, supplies and equipment were
actually used in connection with the acquisition, construction and
equipping of the Project or were delivered to the Project Site (and
remain at the Project Site) for that purpose;
(v) all sums previously advanced by the Trustee have been used
solely for purposes permitted by the Indenture and the specific items
which are the subject of this requisition will be so used;
(vi) there has not been recorded or filed with or served upon
the Compa- ny, notice of any lien, right to lien or attachment upon or
claim affecting the right to receive payment of, any moneys payable to
any of the persons or firms named in this requisition, which has not
been released or will not be released simultaneously with the payment of
such obligation;
(vii) each item in EXHIBIT A is or was appropriate in
connection with the renovation, expansion, rehabilitation and equipping
of the Project, as noted in EXHIBIT A;
(viii) the use of the disbursements requested hereunder will not
result in the covenants made by the Company in the Agreement being
violated. Accordingly, one of the following statements applies to the
requested disbursement:
(a) If all disbursements from the Construction Fund to be
used to pay Issuance Costs have not yet been made, the disbursement
requested hereunder will be used only to pay either Qualified Project
Costs or Issuance Costs.
(b) If all Issuance Costs to be paid with proceeds of the
Bonds have previously been requisitioned but the aggregate Qualified
Project Costs paid with previous disbursements and to be paid with the
disbursement requested hereunder do not equal or exceed substantially
all of the Costs of the Project paid (or to be paid) with the requested
and all previous disbursements, the disbursement requested hereunder
will be used only for Qualified Project Costs.
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(c) If all Issuance Costs to be paid with proceeds of the
Bonds have previously been requisitioned and the aggregate Qualified
Project Costs paid with previous disbursements equals or exceeds
substantially all of the Costs of the Project paid with those previous
disbursements, the disbursement requested hereunder, when added to all
disbursements under previous requisitions, will not result in less than
substantially all of the total of such disbursements having been used to
pay Qualified Project Costs;
(ix) all disbursements related to Issuance Costs of the Bonds,
requested hereunder, when added to all disbursements for such Issuance
Costs under previous requisitions, will not result in more than two
percent (2%) of the proceeds of the Bonds having been drawn from the
Construction Fund or otherwise used to pay such Issuance Costs;
(x) no Event of Default under the Indenture has occurred and
is continu- ing and there exists no event or condition which, with the
giving of notice or the passage of time would constitute an Event of
Default under the Indenture; and
(xi) after payment of such disbursement, sufficient amounts
will remain in the Construction Fund, taking into account investment
earnings thereon, to pay all remaining unpaid costs of the Project which
are to be financed with proceeds of the Bonds.
Dated as of ___________, 199_.
HEICO Aerospace Corporation
By:_______________________________
Its:______________________________
Approved by SunTrust Bank, South Florida, National Association
By:__________________________
Authorized Representative
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EXHIBIT D
Those matters set forth in Schedule B - Section 2 of the Commitment for
Title Insurance issued by Chicago Title Insurance Company, which is identified
as Commitment No. _____________________________ and bears an effective date of
October __, 1996.
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EXHIBIT E
FORM OF NOTE
AFTER THE ENDORSEMENT OF THIS NOTE AS HEREIN PROVIDED, THIS NOTE MAY NOT BE
ASSIGNED, PLEDGED, ENDORSED OR OTHERWISE TRANSFERRED EXCEPT TO A SUCCESSOR OF
THE TRUSTEE UNDER THE TRUST INDENTURE REFERRED TO IN THE LOAN AGREEMENT REFERRED
TO HEREIN.
PROMISSORY NOTE
$3,500,000 October 18, 1996
FOR VALUE RECEIVED, HEICO Aerospace Corporation, a corporation organized
and existing under the laws of the State of Florida (the "Borrower"), by this
promissory note promises to pay to the order of Broward County, Florida (the
"Issuer") the principal sum of Three Million Five Hundred Thousand and No/100
Dollars ($3,500,000) which principal amount shall be due and payable on October
1, 2011.
The Borrower further agrees to pay interest on the unpaid principal
amount from the date of authentication and delivery of the Series 1996 Bonds
until the principal amount and all interest thereon is paid in full which shall
be paid on each Interest Payment Date (as defined in the Indenture hereinaf- ter
mentioned) at the rate of interest equal to the Adjustable Rate (as defined in
the Indenture) or the Fixed Rate (as defined in the Indenture), as applicable.
This Promissory Note is the "Note" referred to in the Loan Agreement
dated as of October 1, 1996 (the "Loan Agreement"), between the Borrower and the
Issuer and is entitled to the benefits thereof and subject to the conditions
thereof. Terms not otherwise defined herein shall have the definitions set forth
in the Loan Agreement.
Under the Loan Agreement, the Issuer has loaned to the Borrower the
proceeds received from the sale of the Issuer's $3,500,000 Industrial
Development Revenue Bonds (HEICO Aerospace Corporation Project), Series 1996
(the "Series 1996 Bonds"). The Series 1996 Bonds have been issued, concurrently
with the execution and delivery of this Note, pursuant to, and are secured by,
the Indenture of Trust between the Issuer and SunTrust Bank, Nature Coast, as
Trustee (the "Trustee") dated as of October 1, 1996 (the "Indenture" or the
"Trust Indenture"). The Series 1996 Bonds bear interest at the Adjustable Rate
prior to the Conversion Date (as defined in the Indenture) and at the Fixed Rate
on or subsequent to the Conversion Date. Such interest is payable on the
applicable Interest Payment Dates. This Note shall bear interest at the
Adjustable Rate or the Fixed Rate, whichever is applicable, during the same
periods as such rates are borne by the Series 1996 Bonds.
Borrower shall make payments of principal and interest on this Note in
amounts which will be sufficient to enable the Issuer to pay when due the total
amount of principal of (whether at maturity, upon acceleration or otherwise),
premium, if any, and interest on the Series 1996 Bonds. To the extent that
principal of, premium, if any, or interest on the Series 1996 Bonds shall be
paid, there shall be credited against unpaid principal of or interest on this
Note, as the case may be, an amount equal to the
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principal of or interest on the Series 1996 Bonds so paid. The principal of,
premium, if any, and interest on this Note are payable in immediately available
funds of any coin or currency of the United States of America which on the
respective dates of payment thereof shall be legal tender for the payment of
public and private debts.
In addition, the Borrower agrees to pay when due in immediately
available funds all other amounts at the time the Issuer or the Trustee, on
behalf of the Issuer, may be required to pay the same pursuant to the Loan
Agreement, the Series 1996 Bonds or the Indenture.
The obligation of the Borrower to make the payments required hereunder
shall be absolute and unconditional without any defense, recoupment or right of
set-off by reason of any default by the Issuer under the Loan Agreement or for
any other reason.
Upon the occurrence of an Event of Default specified in the Loan
Agreement, the unpaid principal hereof interest hereon may become forthwith due
and payable as provided in the Loan Agreement, and in the event the Borrower
shall fail to pay any amount required to be paid under this Note when due, the
Borrower shall pay interest on such amount at a rate per annum equal to the
Adjustable Rate or the Fixed Rate, as applicable to the Series 1996 Bonds at the
time of such occurrence, or the maximum rate permitted by law, whichever is
lower.
The Borrower may at its option, and may under certain circumstances be
required to, prepay all or any part of the unpaid principal of this Note upon
the terms provided in the Loan Agreement.
The Borrower hereby promises to pay all costs of collection, including
reasonable attorneys' fees and disbursements, without regard to any statutory
presumption, in the case of a default under this Note or the Loan Agreement. The
Borrower hereby waives presentment, protest and notice of protest or dishonor.
This Note shall be construed in accordance with the laws of the State of
Florida.
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IN WITNESS WHEREOF, the Borrower has caused this instrument to be
executed in its corporate name by its duly authorized officer and its corporate
seal to be affixed hereto all as of the date first above written.
HEICO AEROSPACE CORPORATION
[SEAL] By: _______________________________
Name: _______________________________
Title: _______________________________
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ENDORSEMENT
Pay to the order of SunTrust Bank, Nature Coast, as Trustee for the
benefit of the Bondholders under the Trust Indenture dated as of October 1,
1996, between the Issuer and the Trustee, without recourse. This endorsement is
given and made without any warranty as to the authority and genuineness of the
signature of the maker of the foregoing Promissory Note.
This 18th day of October, 1996.
BROWARD COUNTY, FLORIDA
By: _______________________________
Title: _______________________________
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