Exhibit 10.1
LOAN AGREEMENT
Dated as of March 1, 1997
Between
Manatee County, Florida
("Issuer")
and
Trilectron Industries, Inc.
("Borrower")
$3,000,000
Manatee County, Florida
Industrial Development Revenue Bonds, Series 1997 A
---------------------------------------------------
(Trilectron Industries, Inc. Project)
and
$1,000,000
Manatee County, Florida
Industrial Development Revenue Bonds, Series 1997 B (Taxable)
-------------------------------------------------------------
(Trilectron Industries, Inc. Project)
CERTAIN RIGHTS OF THE ISSUER UNDER THIS AGREEMENT HAVE BEEN ASSIGNED TO, AND ARE
SUBJECT TO A SECURITY INTEREST IN FAVOR OF, FIRST UNION NATIONAL BANK OF
FLORIDA, AS TRUSTEE, AND BRANCH BANKING AND TRUST COMPANY, AS CREDIT FACILITY
TRUSTEE, UNDER A TRUST INDENTURE OF EVEN DATE HEREWITH BETWEEN THE ISSUER, THE
TRUSTEE AND THE CREDIT FACILITY TRUSTEE, AS AMENDED OR SUPPLEMENTED FROM TIME TO
TIME.
TABLE OF CONTENTS
PARTIES .................................................................1
RECITALS .................................................................1
ARTICLE I - DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.1. DEFINITIONS..................................................1
Section 1.2. RULES OF CONSTRUCTION........................................9
ARTICLE II - REPRESENTATIONS
Section 2.1. REPRESENTATIONS BY THE ISSUER...............................10
Section 2.2. REPRESENTATIONS, WARRANTIES AND COVENANTS BY THE BORROWER...12
ARTICLE III - ACQUISITION OF THE PROJECT
Section 3.1. ACQUISITION OF THE PROJECT..................................15
Section 3.2. BORROWER TO OBTAIN APPROVALS REQUIRED FOR THE PROJECT.......15
Section 3.3. PLANS AND SPECIFICATIONS....................................15
ARTICLE IV - ISSUANCE OF THE BONDS; PROJECT FUND
Section 4.1. AGREEMENT TO ISSUE THE BONDS................................15
Section 4.2. DISBURSEMENT FROM THE PROJECT FUND..........................16
Section 4.3. CLOSEOUT OF THE PROJECT FUND................................16
Section 4.4. DISPOSITION OF THE BALANCE IN THE PROJECT FUND..............16
Section 4.5. BORROWER REQUIRED TO PAY IN EVENT PROJECT FUND
INSUFFICIENT................................................16
Section 4.6. NO THIRD PARTY BENEFICIARY..................................17
ARTICLE V - LOAN BY THE ISSUER TO THE BORROWER; REPAYMENT
Section 5.1. LOAN BY THE ISSUER; REPAYMENT...............................17
Section 5.2. NO SET-OFF..................................................17
Section 5.3. PREPAYMENTS.................................................18
Section 5.4. CREDITS AGAINST THE NOTES...................................18
Section 5.5. LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT................18
ARTICLE VI - GENERAL COVENANTS
Section 6.1. MAINTENANCE AND MODIFICATION OF THE PROJECT BY BORROWER.....19
Section 6.2. TAXES AND UTILITY CHARGES...................................19
Section 6.3. INSURANCE...................................................20
Section 6.4. GENERAL REQUIREMENTS APPLICABLE TO INSURANCE................21
Section 6.5. ADVANCES BY THE ISSUER OR THE TRUSTEE.......................21
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Section 6.6. BORROWER TO MAKE UP DEFICIENCY IN INSURANCE COVERAGE........22
Section 6.7. EMINENT DOMAIN..............................................22
Section 6.8. APPLICATION OF NET PROCEEDS OF INSURANCE AND EMINENT
DOMAIN......................................................22
Section 6.9. PARTIES TO GIVE NOTICE......................................23
ARTICLE VII - SPECIAL COVENANTS
Section 7.1. ACCESS TO THE PROJECT AND INSPECTION........................23
Section 7.2. FURTHER ASSURANCES AND CORRECTIVE INSTRUMENTS...............24
Section 7.3. RECORDING AND FILING; OTHER INSTRUMENTS.....................24
Section 7.4. NON-ARBITRAGE COVENANTS: NOTICE OF EVENT OF TAXABILITY......24
Section 7.5. ADMINISTRATIVE EXPENSES.....................................25
Section 7.6. INDEMNITY AGAINST CLAIMS....................................25
Section 7.7. RELEASE AND INDEMNIFICATION.................................25
Section 7.8. ADDITIONAL INFORMATION......................................26
Section 7.9. CORPORATE EXISTENCE, SALE OF ASSETS, CONSOLIDATION
OR MERGER...................................................27
Section 7.10. DEFAULT CERTIFICATES.......................................27
Section 7.11. NOTIFICATION TO TRUSTEE AND CREDIT FACILITY TRUSTEE........27
Section 7.12. SECONDARY MARKET DISCLOSURE................................27
Section 7.13. OBSERVE LAWS...............................................28
ARTICLE VIII - ASSIGNMENT, LEASING AND SELLING
Section 8.1. ASSIGNMENT OF LOAN AGREEMENT OR LEASE OR SALE OF
PROJECT BY THE BORROWER.....................................28
Section 8.2. RESTRICTIONS ON TRANSFER OF ISSUER'S RIGHTS.................28
ARTICLE IX - EVENTS OF DEFAULT AND REMEDIES
Section 9.1. EVENTS OF DEFAULT DEFINED...................................28
Section 9.2. REMEDIES ON DEFAULT.........................................29
Section 9.3. APPLICATION OF AMOUNTS REALIZED IN ENFORCEMENT OF REMEDIES..29
Section 9.4. NO REMEDY EXCLUSIVE.........................................29
Section 9.5. AGREEMENT TO PAY ATTORNEYS' FEES AND EXPENSES...............29
Section 9.6. CORRELATIVE WAIVERS.........................................29
ARTICLE X - PREPAYMENTS
Section 10.1. OPTIONAL PREPAYMENTS.......................................29
Section 10.2. MANDATORY PREPAYMENTS......................................29
Section 10.3. OTHER MANDATORY PREPAYMENTS................................29
ARTICLE XI - MISCELLANEOUS
Section 11.1. REFERENCES TO THE BONDS INEFFECTIVE AFTER BONDS PAID.......29
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Section 11.2. NO IMPLIED WAIVER..........................................29
Section 11.3. ISSUER REPRESENTATIVE......................................29
Section 11.4. BORROWER REPRESENTATIVE....................................29
Section 11.5. NOTICES....................................................29
Section 11.6. IF PAYMENT OR PERFORMANCE DATE IS OTHER THAN A
BUSINESS DAY...............................................29
Section 11.7. BINDING EFFECT.............................................29
Section 11.8. SEVERABILITY...............................................29
Section 11.9. AMENDMENTS, CHANGES AND MODIFICATIONS......................29
Section 11.10. EXECUTION IN COUNTERPARTS.................................29
Section 11.11. APPLICABLE LAW............................................29
Section 11.12. NO CHARGE AGAINST ISSUER CREDIT...........................29
Section 11.13. ISSUER NOT LIABLE.........................................29
Section 11.14. EXPENSES..................................................29
Section 11.15. AMOUNTS REMAINING WITH THE TRUSTEE........................29
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LOAN AGREEMENT
This LOAN AGREEMENT, dated as of March 1, 1997, between MANATEE COUNTY,
FLORIDA, a political subdivision and body corporate and politic of the State of
Florida (the "Issuer"), and TRILECTRON INDUSTRIES, INC., a New York corporation
(the "Borrower").
WITNESSETH:
In consideration of the respective representations and agreements
contained herein, the parties hereto, recognizing that under the Act (as
hereinafter defined) this Loan Agreement shall not in any way obligate the State
of Florida (herein, the "State") or any political subdivision thereof,
including, without limitation, the Issuer or any other political subdivision
thereof, to raise any money by taxation or use other public moneys for any
purpose in relation to the Project (as hereinafter defined) and that neither the
State nor any political subdivision thereof, including, without limitation, the
Issuer, shall pay or promise to pay any debt or meet any financial obligation to
any person at any time in relation to the Project, except from moneys received
or to be received under the provisions of this Loan Agreement, the Notes and
from the Credit Facility Issuer under a Credit Facility (each as hereinafter
defined) or derived from the exercise of the rights of the Issuer hereunder and
thereunder, agree as follows:
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.1. DEFINITIONS. In addition to words and terms elsewhere
defined in this Loan Agreement or in the Indenture, the following words and
terms shall have the following meanings:
"Acquisition", when used in connection with the Project, shall mean,
without limitation, the acquisition, construction, installation and equipping of
the Project.
"Act" shall mean the Florida Constitution, Part II and Part VII of
Chapter 159, Florida Statutes, as amended and supplemented, and other provisions
of applicable law.
"Administrative Expenses" shall mean the amounts payable pursuant to
Section 7.5 hereof by the Borrower to or for the account of the Issuer to
provide for payment of the costs and expenses incurred by the Issuer.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such Person. For the purposes of this definition, "control"
when used with respect to a Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through
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the ownership of voting securities, by contract or otherwise, and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Alternate Credit Facility" shall mean an irrevocable direct pay letter
of credit, insurance policy or similar credit enhancement or support facility
for the benefit of the Trustee, the terms of which Alternate Credit Facility
shall in all respects material to the Bondholders be the same (except for the
term set forth in such Alternate Credit Facility) as the Letter of Credit.
Notwithstanding the foregoing, an Alternate Credit Facility shall be deemed to
be of the same credit quality as the Letter of Credit if the long-term rating of
the Credit Facility Issuer is rated at least investment grade by either Moody's
or S&P.
"Bank" shall mean First Union National Bank of Florida, the issuer of
the Letter of Credit and shall also mean "Credit Facility Issuer" with respect
to an Alternate Credit Facility.
"Bond" or "Bonds" shall mean collectively Manatee County, Florida
Industrial Development Revenue Bonds, Series 1997 A (Trilectron Industries, Inc.
Project) (herein, the "Series A Bonds") and Manatee County, Florida Industrial
Development Revenue Bonds, Series 1997 B (Taxable) (Trilectron Industries, Inc.
Project) (herein the "Series B Bonds") authorized to be issued pursuant to a
resolution of the Issuer in accordance with the terms and provisions of the
Indenture in the aggregate principal amount of $3,000,000 with respect to the
Series A Bonds and $1,000,000 with respect to the Series B Bonds, including such
Bonds issued in replacement for mutilated, destroyed, lost or stolen Bonds
pursuant to Section 211 of the Indenture, and any amendments and supplements
thereto, and any renewals and extensions thereof, permitted by the Indenture.
The term "Bonds" also means the Series C Bonds when and if the original Series B
Bonds are currently refunded with the proceeds of the Series C Bonds pursuant to
the provisions of Section 706 of the Indenture and the Tax-Exempt Supplement.
"Bond Documents" shall mean collectively the Indenture, the Bonds, this
Loan Agreement, the Series A Note, the Series B Note, the Series C Note when and
if the Series B Note is prepaid with the proceeds of the Series C Note, the
Mortgage, the Security Agreement, the Letter of Credit Documents, the Placement
Agreement, the Tender Agency Agreement and the Remarketing Agreement.
"Bondholder" or "Bondholders" or "owner of Bonds" or "owners of Bonds"
shall mean the initial owner or owners and any future owner or owners of the
Bond or Bonds as registered on the books and records of the Bond Registrar
pursuant to Section 204 of the Indenture.
"Bond Fund" shall mean the fund created under Section 502 of the
Indenture.
"Borrower" shall mean, with respect to this Loan Agreement, Trilectron
Industries, Inc., a New York corporation, and its successors and assigns and any
surviving, resulting or transferee corporation or other entity.
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"Borrower Representative" shall mean any one of the persons at the time
designated to act on behalf of the Borrower by the written certificate furnished
to the Issuer and the Trustee containing the specimen signatures of such persons
and signed on behalf of the Borrower by the President or any duly authorized
Vice President of the Borrower.
"Business Day" shall mean a day upon which banks in the State of North
Carolina and in the State are open for the transaction of business of the nature
required pursuant to this Loan Agreement and the Indenture.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
the related regulations, rulings and procedures issued by the Internal Revenue
Service or its successors.
"Completion Date" shall mean that date certified by the Borrower under
Section 4.3 hereof.
"Consistent Basis" shall mean, in reference to the application of
Generally Accepted Accounting Principles, that the accounting principles
observed in the period referred to are comparable in all material respects to
those applied in the preceding period, except as to any changes consented to by
the Trustee and the Credit Facility Issuer.
"Cost of Acquisition of the Project" shall mean the costs and
allowances for the Acquisition of the Project which are permitted under Section
159.27 of the Act and which include, but are not limited to, all capital costs
of the Project, including the following:
1. The Acquisition of the Project at the Project Site;
2. Preparation of the plans and specifications, if any, for the Project
(including any preliminary study or plan of the Project or any
aspect thereof), any labor, services, materials and supplies used or
furnished in the Acquisition of the Project, the acquisition and
installation necessary to provide utility services or other services
and all real and tangible personal property deemed necessary by the
Borrower in connection with the Project;
3. The fees for architectural, engineering, supervisory and consulting,
services in connection with the Acquisition of the Project;
4. To the extent they shall not be paid by a contractor, the premiums
of all insurance and surety and performance bonds required to be
maintained in connection with the Acquisition of the Project;
5. Any fees and expenses in connection with the acquisition, perfection
and protection of title to the Project Site and any fees and
expenses incurred in connection with the preparation, recording or
filing of such documents,
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instruments or financing statements as either the Borrower, the
Issuer or the Trustee may deem desirable to perfect or protect the
rights of the Issuer or the Trustee under this Loan Agreement, the
Notes, the Indenture, the Bonds and the Letter of Credit Documents;
6. The legal, accounting, initial Trustee and Credit Facility Trustee
fees and expenses and financial advisory fees and expenses, filing
fees, and printing and engraving costs incurred in connection with
the authorization, issuance, sale and purchase of the Bonds, and the
preparation of this Loan Agreement, the Notes, the Indenture, the
Bonds, the Letter of Credit Documents, the Tender Agency Agreement
and the Remarketing Agreement and all other documents in connection
with the authorization, issuance and sale of the Bonds; and
7. Any administrative or other fees charged by the Issuer, Governing
Board, the State Board or reimbursement thereto of expenses, in
connection with the Project to the Completion Date.
"Counsel" shall mean an attorney or a firm of attorneys acceptable to
the Trustee, and may, but need not, be counsel to the Issuer, the Credit
Facility Issuer or the Borrower.
"Credit Facility" shall mean the Letter of Credit or any Alternate
Credit Facility delivered to the Credit Facility Trustee.
"Credit Facility Issuer" shall mean the Bank with respect to the Letter
of Credit and the institution issuing any Alternate Credit Facility.
"Credit Facility Trustee" shall mean the banking institution at the
time serving as Credit Facility Trustee under the Indenture, if any.
"Determination of Taxability" shall be applicable only to the Series A
Bonds and the Series C Bonds when and if the Series B Bonds are currently
refunded with the proceeds of the Series C Bonds and shall be defined as and
shall be deemed to have occurred on the first to occur of the following:
(1) on that date when the Borrower files any statement,
supplemental statement or other tax schedule, return or document
(whether pursuant to Treasury Regulations ss. 1.103-10(b)(2)(vi), as
the same may be amended or supplemented, or otherwise) which discloses
that an Event of Taxability shall have in fact occurred;
(2) on that date when any Bondholder or former Bondholder notifies
the Borrower or the Trustee that it has received a written opinion of
Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A. or such other
Bond Counsel acceptable to the Issuer and the Borrower, to the effect
that an Event of Taxability shall have occurred unless, within 180 days
after receipt by the Borrower of such notification from the
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Trustee, any Bondholder or any former Bondholder, the Borrower
shall obtain and deliver to the Trustee and each Bondholder and former
Bondholder a favorable ruling or determination letter issued to or on
behalf of the Borrower by the Commissioner or any District Director of
Internal Revenue (or any other government official exercising the same
or a substantially similar function from time to time) to the effect
that, after taking into consideration such facts as form the basis for
the opinion that an Event of Taxability has occurred, an Event of
Taxability shall not have occurred;
(3) on that date when the Borrower shall be advised in writing by
the Commissioner or any District Director of Internal Revenue (or any
other government official or agent exercising the same or a
substantially similar function from time to time) that, based upon
filings of the Borrower, or upon any review or audit of the Borrower,
or upon any other ground whatsoever, an Event of Taxability shall have
occurred;
(4) on that date when the Borrower shall receive notice in writing
from any Bondholder or former Bondholder, or from the Trustee, that the
Internal Revenue Service (or any other government agency exercising the
same or a substantially similar function from time to time) has
assessed as includable in the gross income of any Bondholder or former
Bondholder the interest on such Bondholder's or former Bondholder's
Bond for federal income tax purposes due to the occurrence of an Event
of Taxability;
provided, however, no Determination of Taxability shall occur under
subparagraph (3) or (4) hereof unless the Borrower has been afforded
the opportunity, at its expense, to contest any such assessment or
unfavorable ruling and, further, no Determination of Taxability shall
occur until such contest, if made, has been finally determined.
"Eminent Domain" shall mean the taking of title to, or the temporary
use of, the Project or any part thereof pursuant to eminent domain or
condemnation proceedings, or any voluntary conveyance of any part of the Project
during the pendency of, or as a result of a threat of, such proceedings.
"Equipment" shall mean all of the fixtures (including all leasehold
improvements), machinery, equipment and other items of tangible personal
property now owned or hereafter acquired by the Borrower and located or to be
located on or affixed to the Project Site, together with all substitutions
therefor and all repairs, renewals and replacements thereof.
"Event of Default" or "Default" shall have the meaning set forth in
Section 9.1 hereof.
"Event of Taxability" shall be applicable only to the Series A Bonds
and the Series C Bonds when and if the Series B Bonds are currently refunded
with the proceeds of the Series C Bonds and shall mean a change in law or fact
or the interpretation thereof, or the occurrence or existence of any fact, event
or circumstance (including, without limitation, the issuance of obligations or
the incurring of capital expenditures in excess of those permitted by Sections
144(a)(4)(A) of the Code, or the taking of any action by the Borrower, or the
failure to take any
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action by the Borrower, or the making by the Borrower of any misrepresentation
herein or in any certificate required to be given in connection with the
issuance, sale or delivery of the Bonds) which has the effect of causing the
interest paid or payable on any Bond (other than "Series B Bonds") to become
includable in the gross income of any Bondholder or former Bondholder for
federal income tax purposes other than a Bondholder or former Bondholder who is
or was a "substantial user" or "related person" as such terms are used in
Section 147(a) of the Code.
"Generally Accepted Accounting Principles" shall mean those principles
of accounting set forth in pronouncements of the Financial Accounting Standards
Board and its predecessors or pronouncements of the American Institute of
Certified Public Accountants or those principles of accounting which have other
substantial authoritative support and are applicable in the circumstances as of
the date of application, as such principles are from time to time supplemented
and amended.
"Governing Board" shall mean the Board of County Commissioners of
Manatee County, Florida and any successor thereto as the governing body of the
Issuer.
"Government Obligations" shall mean (i) direct obligations of the
United States of America, (ii) obligations unconditionally guaranteed by the
United States of America, and (iii) securities or receipts evidencing ownership
interests in obligations or specified portions (such as principal or interest)
of obligations described in clause (i) or (ii) above the full and timely payment
of which securities, receipts or obligations is unconditionally guaranteed by
the United States of America.
"Indenture" shall mean the Trust Indenture of even date herewith by and
among the Issuer, the Trustee and the Credit Facility Trustee, together with any
amendments or supplements thereto permitted thereby including but not limited to
the Tax-Exempt Supplement.
"Issuer" shall mean Manatee County, Florida, a political subdivision of
the State, and its successors and assigns and any body resulting from or
surviving any consolidation or merger to which it or its successors may be a
party.
"Issuer Representative" shall mean any one of the persons at the time
designated to act on behalf of the Issuer by written certificate furnished to
the Borrower and the Trustee containing the specimen signatures of such persons
and signed on behalf of the Issuer by its Chairman or Vice Chairman.
"Letter of Credit" shall mean the irrevocable direct pay letter of
credit dated March ___, 1997 in the amount of $4,200,000 issued by the Bank,
including any extensions thereof.
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"Letter of Credit Documents" shall mean the Letter of Credit, the
Reimbursement Agreement, the Pledge Agreement, Mortgage and other security
documents referred to in the Reimbursement Agreement.
"Loan Agreement" shall mean this Loan Agreement and any amendments and
supplements hereto or thereto permitted by the Indenture.
"Mortgage" shall mean that certain Mortgage and Security Agreement
dated as of March 1, 1997 from the Borrower to the Issuer and the Bank, as their
interests may appear.
"Net Proceeds" when used with respect to any insurance proceeds or
award resulting from, or other amount received in connection with, Eminent
Domain shall mean the gross proceeds from such proceeds, award or other amount,
less all expenses (including attorneys' fees) incurred in the realization
thereof.
"Notes" shall mean collectively, the Series A Note, the Series B Note
and the Series C Note when and if the Series B Note is prepaid with the proceeds
of the Series C Note all given by the Borrower pursuant to Section 5.1 of this
Loan Agreement, substantially in the forms of Exhibit A attached hereto, with
respect to the Series A Note, Exhibit B attached hereto, with respect to the
Series B Note, and Exhibit C attached hereto, with respect to the Series C Note.
"Official Action" shall mean the action taken by the Governing Board on
August 27, 1996 and January 28, 1997 in adopting resolutions authorizing the
issuance of the Bonds, subject to the terms of such resolutions.
"Overdue Rate" shall mean the Prime Rate plus three percent per annum
or the maximum rate permitted by law, whichever is lower.
"Payment of the Bonds" shall mean payment of (i) the principal of and
interest on the Bonds in accordance with their terms whether through payment at
maturity, upon acceleration or prepayment, (ii) all amounts due as
Administrative Expenses or otherwise, and (iii) any and all other liabilities
and obligations arising under the Indenture and this Loan Agreement; in any
case, in such a manner that all such amounts due and owing with respect to the
Bonds shall have been paid.
"Permitted Encumbrances" shall mean, as of any particular time,
"Permitted Liens," as defined in the Reimbursement Agreement.
"Person" shall mean an individual, partnership, corporation, trust,
unincorporated organization, association, joint venture, joint-stock company, or
a government or agency or political subdivision thereof.
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"Placement Agreement" shall mean the letter agreement dated the date of
issuance of the Bonds among the Borrower, First Union National Bank of North
Carolina, as Placement Agent and the Issuer, providing for the initial placement
of the Bonds. "Placement Agreement" shall also mean the offering document used
in connection with the issuance of the Series C Bonds.
"Placement Memorandum" shall mean the Private Placement Memorandum
dated the date of issuance of the Bonds (including the Series C Bonds when and
if issued), including the cover page and all appendices thereto.
"Plans and Specifications" shall mean the plans and specifications used
in the Acquisition of the Project, as the same may be revised from time to time
by the Borrower in accordance with Section 3.3 hereof.
"Pledge Agreement" shall mean the Pledge Agreement of even date
herewith between the Borrower and the Bank, and any amendments or supplements
thereto.
"Prime Rate" shall mean the rate of interest per annum announced by
First Union National Bank of Florida at its principal office in Jacksonville,
Florida from time to time to be its prime rate.
"Project" shall mean the acquisition of an approximately 18 acre site
in the County, constituting the Project Site, and the acquisition, construction
and equipping of a new facility totaling approximately 75,000 square feet to be
used by the Borrower in the manufacturing of aviation ground support equipment,
and electronic components used by commercial and military organizations, all to
be located on the Project Site.
"Project Site" shall mean the real property located in Manatee County,
Florida, more particularly described in Exhibit D attached hereto and by
reference made a part hereof, upon which the Plant and Equipment are located.
"Reimbursement Agreement" shall mean the Letter of Credit and
Reimbursement Agreement of even date herewith between the Borrower and the Bank,
as such agreement may be amended from time to time and filed with Trustee and
the Credit Facility Trustee, and any agreement of the Borrower, with a Credit
Facility Issuer setting forth the obligations of the Borrower, to such Credit
Facility Issuer arising out of any payments under a Credit Facility and which
provides that it shall be deemed to be a Reimbursement Agreement for the
purposes of the Indenture.
"Remarketing Agent" shall mean First Union National Bank of North
Carolina, acting through its Capital Markets Group as remarketing agent, or any
successor in such capacity.
"Remarketing Agreement" shall mean the Remarketing Agreement of even
date herewith between the Borrower and the Remarketing Agent.
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"Security Agreement" shall mean that certain Security Agreement dated
as of March 1, 1997, from the Borrower to the Issuer and the Bank, as their
interests may appear.
"Series C Bonds" shall mean the Issuer's Industrial Development Revenue
Refunding Bonds, Series 1997 C (Trilectron Industries, Inc. Project) issued in
the principal amount of the Series B Bonds pursuant to the provisions of Section
706 of the Indenture and the Tax-Exempt Supplement.
"Series A Note" shall mean the promissory note given by the Borrower
pursuant to Section 5.1 of this Loan Agreement, substantially in the form of
Exhibit A attached hereto.
"Series B Note" shall mean the promissory note given by the Borrower
pursuant to Section 5.1 of this Loan Agreement, substantially in the form of
Exhibit B attached hereto.
"Series C Note" shall mean the promissory note given by the Borrower
pursuant to Section 5.1 of this Loan Agreement substantially in the form of
Exhibit C attached hereto.
"State" shall mean the State of Florida.
"Tax Certificate" shall mean the Arbitrage Certificate delivered by the
Issuer and the Borrower as of the date of, and in connection with, the issuance
and sale of the Bonds.
"Tax-Exempt Supplement" shall mean that certain supplemental indenture
to the Indenture to be executed, in connection with the issuance of the Series C
Bonds, by the Trustee, the Credit Facility Trustee and the Issuer pursuant to
the terms and provisions of Section 706 and Section 1301 of the Indenture.
"Tender Agency Agreement" shall mean the Tender Agency Agreement of
even date herewith among the Borrower, the Trustee and the Tender Agent.
"Tender Agent" shall mean First Union National Bank of Florida and its
successors as provided in Section 1202 of the Indenture.
"Trustee" shall mean the banking institution at the time serving as
Trustee under the Indenture.
Section 1.2. RULES OF CONSTRUCTION.
(a) Words of the masculine gender shall be deemed and construed to
include correlative words of the feminine and neuter genders, and words of the
neuter gender shall be deemed and construed to include correlative words of the
masculine and feminine genders.
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(b) The table of contents, captions and headings in this Loan Agreement
are for convenience only and in no way define, limit or describe the scope or
intent of any provisions or sections of this Loan Agreement.
(c) All references herein to particular articles or sections are
references to articles or sections of this Loan Agreement unless some other
reference is established.
(d) All accounting terms not specifically defined herein shall be
construed in accordance with Generally Accepted Accounting Principles applied on
a Consistent Basis.
(e) All references herein to the Borrower shall be deemed to refer to
each of the Persons if more than one are described by such term and any
agreement, obligation, duty or liability of the Borrower shall be a joint and
several agreement, obligation, duty or liability of each of the Persons so
described by such term.
(f) Any terms not defined herein but defined in any of the other Bond
Documents shall have the same meaning herein.
(g) All references herein to the Code or any particular
provision or section thereof shall be deemed to refer to any successor, or
successor provision or section, thereof, as the case may be.
ARTICLE II
REPRESENTATIONS
Section 2.1. REPRESENTATIONS BY THE ISSUER. The Issuer represents and
warrants as follows:
(a) The Issuer is a political subdivision of the State.
(b) Under the provisions of the Act, the Issuer is duly authorized to
enter into, execute and deliver the Bond Documents to which it is a party, to
undertake the transactions contemplated by the Bond Documents to which it is a
party and to carry out its obligations hereunder and thereunder.
(c) The Issuer proposes to issue the Bonds in the aggregate principal
amount of $4,000,000 to finance all or a portion of the Project.
(d) By duly adopted resolution, the Issuer has duly authorized the
execution, delivery and performance of the Bond Documents to which it is a
party, including the borrowing under, issuance and performance of the Bonds and
(as security for the Bonds) the pledge of the Notes,
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endorsed without recourse to the order of the Trustee, to the Trustee. The
Issuer also has duly authorized the execution, delivery and performance of the
Placement Agreement and has approved the sections which describe the Issuer or
relate to the Issuer in the Private Placement Memorandum.
(e) The Bonds will be issued under and pursuant to the Indenture and
will mature, bear interest, and have the other terms and provisions set forth or
provided for in the Indenture.
(f) The execution and delivery of and performance under the Bond
Documents to which the Issuer is a party and the Placement Agreement will not
conflict with, or constitute a breach of or default under, or require any
consent pursuant to any law or regulation presently applicable to the Issuer
(except for such consents and approvals as have heretofore been obtained), any
order of any court, regulatory body or arbitral tribunal or any agreement or
instrument to which the Issuer is party or by which it is bound.
(g) To the best knowledge of the Issuer, there are no judicial,
regulatory or arbitral proceedings pending or threatened against the Issuer
which, if decided adversely to the Issuer, would have a material adverse effect
on the issuance and sale of the Bonds or any of the transactions of the Issuer
in connection therewith.
(h) When duly executed and delivered on behalf of the Issuer, and
assuming the due authorization, execution and delivery by the Borrower of this
Loan Agreement, and the due authorization, execution and delivery by the Trustee
and the Credit Facility Trustee of the Indenture, each of the Bond Documents to
which the Issuer is a party shall constitute a valid and binding obligation of
the Issuer enforceable against the Issuer in accordance with its terms, except
that enforceability may be limited by applicable bankruptcy or insolvency laws
or by general principals of equity.
(i) Neither the representations of the Issuer contained in this Loan
Agreement or the Indenture nor any written statement relating to the Issuer
furnished to the original purchasers of the Bonds by or on behalf of the Issuer
in connection with the transactions contemplated hereby, contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein and therein not misleading.
(j) The Issuer will not enter into any agreement or instrument which
might in any way prevent or materially impair its ability to perform its
obligations under the Bond Documents while it is a party thereto.
(k) So long as any Bonds shall remain unpaid, the Issuer will not,
without the written consent of the Trustee: (1) take any action which, directly
or indirectly, adversely affects its existence or status as a political
subdivision under the laws of the State, (2) take any action which would
adversely affect the exclusion from gross income for federal income tax purposes
of interest on the Series A Bonds and the Series C Bonds when and if issued, or
(3) pledge any
11
interest in this Loan Agreement, or the amounts to be derived therefrom, other
than as contemplated by the Indenture.
Section 2.2. REPRESENTATIONS, WARRANTIES AND COVENANTS BY THE BORROWER.
The Borrower represents, warrants and covenants as follows:
(a) The Borrower is a corporation duly organized, validly existing and
in good standing under the laws of the State of New York, and is qualified to do
business in the State, has legal authority to enter into and to perform the
agreements and covenants on its part contained in the Bond Documents to which it
is a party, the Placement Agreement and the approval of the sections and
exhibits of the Private Placement Memorandum pertaining to the Borrower, and has
duly authorized the execution, delivery and performance of the Bond Documents to
which it is a party.
(b) The borrowing under the Notes, the execution and delivery of this
Loan Agreement and the other Bond Documents to which it is a party, the
Placement Agreement and the approval of the sections and exhibits of the Private
Placement Memorandum pertaining to the Borrower, the consummation of the
transactions contemplated hereby and thereby, and the fulfillment of or
compliance with the terms and conditions hereof and thereof do not and will not
violate, conflict with or constitute a breach of or default under or require any
consent (except for such consents and approvals as have heretofore been
obtained) pursuant to the Articles of Incorporation or Bylaws of the Borrower,
any law or regulation of the United States, the State of New York or the State
or, to the best knowledge of the Borrower, of any other jurisdiction presently
applicable to the Borrower, any order of any court, regulatory body or arbitral
tribunal or any agreement or instrument to which the Borrower is a party or by
which it or any of its property is bound.
(c) The Borrower will cause the proceeds of the Bonds to be applied to
the Acquisition of the Project.
(d) Capital expenditures in connection with the Acquisition of the
Project, including the letting of purchase orders for components thereof, did
not occur sooner than 60 days prior to August 27, 1996, other than capital
expenditures which the Borrower does not intend to be reimbursed for from the
proceeds of the Bonds.
(e) The Borrower shall operate the Project as a manufacturing facility
until Payment of the Bonds.
(f) The Project is a "project" within the meaning of the Act.
(g) The Project is located wholly in the unincorporated area of Manatee
County, Florida.
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(h) Assuming due authorization, execution and delivery by the other
parties thereto, when executed and delivered, the Bond Documents to which the
Borrower is a party, and the Placement Agreement will be the valid and binding
obligations or agreements of the Borrower enforceable in accordance with their
respective terms, subject to limitations imposed by general principles of equity
affecting the remedies provided for in the Bond Documents.
(i) There is no action, suit or proceeding at law or in equity or by or
before any governmental instrumentality or agency or arbitral body now pending,
or to the knowledge of the Borrower, threatened against or affecting the
Borrower or any properties or rights of the Borrower which, if adversely
determined, would materially impair the right of the Borrower to carry on its
business substantially as now conducted or would materially adversely affect the
financial condition, business or operations of the Borrower or the transactions
contemplated by, or the validity of, any of the Bond Documents, or the Placement
Agreement.
(j) The Borrower has filed all applicable federal, state and local tax
returns which are required to be filed by it and has paid or caused to be paid
all taxes as shown on said returns or on any assessment received by it, to the
extent that such taxes have become due, and no controversy in respect of
additional income taxes, state or federal, of the Borrower is pending or, to the
knowledge of the Borrower, threatened which has not heretofore been disclosed in
writing to the Trustee and which, if adversely determined, would materially and
adversely affect the financial condition or operations of the Borrower.
(k) Neither the Bond Documents to which the Borrower is a party nor the
Tax Certificate contains any misrepresentation or untrue statement of fact or
omits to state a material fact necessary in order to make any such
representation or statement contained therein not misleading.
(l) The Borrower possesses all necessary patents, licenses, trademarks,
trademark rights, trade names, trade name rights and copyrights to conduct its
business as now conducted, without known conflict with any patent, license,
trademark, trade name or copyrights of any other Person.
(m) The Project Site is properly zoned, and its intended use and the
operation of the Project comply with the uses permitted by applicable zoning
regulations.
(n) No approval, consent or authorization of, or registration,
declaration or filing with, any governmental or public body or authority is
required in connection with the valid execution, delivery and performance by the
Borrower of the Bond Documents to which it is a party which has not heretofore
been obtained.
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(o) The Borrower represents that it has not made any commitment or
taken any action which will result in a valid claim for any finders' or similar
fees or commitments in respect of the transactions described in this Loan
Agreement.
(p) None of the proceeds of the Bonds will be used directly or
indirectly as working capital or to finance inventory.
(q) The Borrower will not take or omit to take any action which action
or omission will in any way cause the proceeds of the Bonds to be applied in a
manner contrary to that provided in the Indenture.
(r) The Borrower has not taken and will not take any action and knows
of no action that any other person, firm or corporation has taken or intends to
take, which would cause interest on the Series A Bonds and the Series C Bonds,
when and if issued, to be includable in the gross income of the recipients
thereof for federal income tax purposes. The representations, certifications and
statements of reasonable expectation made by the Borrower in the Tax Certificate
and relating to bond maturity and average asset economic life, use of Bond
proceeds, arbitrage and related matters are hereby incorporated by this
reference as though fully set forth herein.
(s) The Borrower has good and marketable title in its fee interest in
the Project Site.
(t) The Borrower's obligations under the Loan Agreement, the Notes and
the Reimbursement Agreement are general obligations of the Borrower.
(u) The Borrower's assets exceed its liabilities.
(v) As of the date hereof, neither the Borrower, nor to its knowledge
anyone acting on behalf of the Borrower, has entered into negotiations with any
person for the purpose of undertaking any borrowing concurrently with or
subsequent to the issuance of the Bonds and to be secured wholly or partially by
a lien or encumbrance on the Project or any part thereof, and the Borrower has
no intention of undertaking any such borrowing.
(w) The Borrower is financially responsible and fully capable and
willing to fulfill its obligations under this Loan Agreement within the meaning
of Section 159.29(2) of the Act.
(x) The Borrower has reviewed the Indenture and agrees to the terms
thereof.
All of the above representations, warranties and covenants shall
survive the execution of this Loan Agreement and the issuance of the Note.
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ARTICLE III
ACQUISITION OF THE PROJECT
Section 3.1. ACQUISITION OF THE PROJECT. The Borrower shall complete
the Acquisition of the Project with all reasonable dispatch, delays incident to
strikes, riots, acts of God or the public enemy or any delay beyond its
reasonable control only excepted, in accordance with the Plans and
Specifications; provided, however, that if completion of such Acquisition is
delayed for any reason, there shall be no diminution in or postponement of the
payments to be made by the Borrower pursuant to the Notes or Sections 5.1, 7.4,
7.5, 7.6, 7.7 and 11.14 hereof.
Section 3.2. BORROWER TO OBTAIN APPROVALS REQUIRED FOR THE PROJECT. The
Borrower shall obtain or cause to be obtained all necessary permits and
approvals for the Acquisition of the Project and the operation and maintenance
of the Equipment and shall comply with all lawful requirements of any
governmental body regarding the use or condition of the Equipment, the Project
Site. The Borrower may, however, contest any such requirement by an appropriate
proceeding diligently prosecuted.
Section 3.3. PLANS AND SPECIFICATIONS. The Borrower shall maintain a
set of Plans and Specifications at the Project Site which shall be available to
the Issuer, the Trustee and the Bondholders for inspection and examination
during the Borrower's regular business hours, and the Issuer and the Borrower
agree that the Borrower may supplement, amend and add to the Plans and
Specifications, and that the Borrower shall be authorized to omit or make
substitutions for components of the Project, without approval of the Issuer,
provided that no such change shall be made which shall be contrary to the
representations made in Section 2.2 hereof or the provisions of Article IX
hereof, and provided further that if any such change would render materially
incorrect or incomplete the description of the initial components of the Project
or the description of the Project Site as set forth in Exhibit D to this Loan
Agreement, the Borrower and the Issuer shall amend such Exhibit D to reflect
such change, upon receipt by the Issuer and the Trustee of an opinion of Bond
Counsel that such change will not result in an Event of Taxability. No approval
of the Issuer or the Trustee shall be required for the acquisition of the
Project or for the solicitation, negotiation, award or execution of contracts
relating thereto.
ARTICLE IV
ISSUANCE OF THE BONDS; PROJECT FUND
Section 4.1. AGREEMENT TO ISSUE THE BONDS. To provide funds for
Project, the Issuer agrees that it will sell, issue and deliver the Bonds in the
aggregate principal amount of $4,000,000 in the manner set forth in the
Indenture and cause the proceeds of the Bonds to be applied as provided in the
Indenture. Upon receipt of private activity allocation from the State in an
amount at least equal to the then Outstanding principal amount of the original
Series B
15
Bonds and satisfaction of any other requirements under the Code, the Issuer
agrees to use its best efforts to issue the Series C Bonds to currently refund
the Series B Bonds pursuant to the provisions of Section 706 of the Indenture
and the Tax-Exempt Supplement.
Section 4.2. DISBURSEMENT FROM THE PROJECT FUND. All payments from the
Project Fund to pay the Cost of Acquisition of the Project or to reimburse the
Borrower for any Cost of Acquisition of the Project paid or incurred by the
Borrower before or after the execution and delivery of this Agreement and the
issuance and delivery of the Series A Bonds but only after the sixtieth (60th)
day prior to August 27, 1996, shall be made by the Issuer pursuant to the
Indenture upon receipt by the Trustee of a requisition and certificate
substantially in the form of Exhibit A attached to the Indenture.
Section 4.3. CLOSEOUT OF THE PROJECT FUND. The Completion Date for the
Project shall be promptly established and evidenced to the Trustee and the Bank
and shall be the date on which the Borrower Representative delivers to the
Trustee and the Bank a certificate stating that, except for the amounts retained
by the Trustee at the Borrower's direction for any Cost of Acquisition of the
Project not then due and payable, the Acquisition of the Project has been
completed substantially in accordance with the Plans and Specifications, if any,
and all costs and expenses incurred in connection therewith have been paid.
Notwithstanding the foregoing, such certificate may state that it is given
without prejudice to any rights against third parties that exist at the date of
such certificate or that may subsequently come into being.
Section 4.4. DISPOSITION OF THE BALANCE IN THE PROJECT FUND. Pursuant
to the Indenture, as soon as practicable after, and in any event within sixty
(60) days from, the Trustee's receipt of the certificate mentioned in Section
4.3 hereof all amounts remaining in the Project Fund, including any unliquidated
investments made with money theretofore deposited in the Project Fund except for
amounts to be retained in the Project Fund for any Cost of Acquisition of the
Project not then due and payable as provided in Section 4.3 hereof, shall be
transferred by the Trustee to the Bond Fund and shall be applied to the
prepayment of the principal installments of the Bonds in accordance with the
terms of the Indenture.
Section 4.5. BORROWER REQUIRED TO PAY IN EVENT PROJECT FUND
INSUFFICIENT. In the event the moneys in the Project Fund should not be
sufficient to pay the total cost of the Project, the Borrower agrees to complete
the Project and to pay that portion of such cost in excess of the moneys
available therefor in the Project Fund. THE ISSUER MAKES NO WARRANTY, EITHER
EXPRESS OR IMPLIED, THAT THE MONEYS PAID INTO THE PROJECT FUND AND AVAILABLE FOR
PAYMENT OF THE COST OF THE PROJECT WILL BE SUFFICIENT TO PAY THE TOTAL COST OF
THE PROJECT. The Borrower agrees that if, after exhaustion of the moneys in the
Project Fund, the Borrower should pay any portion of the total cost of Project
pursuant to the provisions of this Section, it shall not be entitled to any
reimbursement therefor from the Issuer, the Bank, the Trustee, the Credit
Facility Trustee or any Bondholder and it shall not be entitled to any abatement
or diminution of the payments required to be made by the Borrower pursuant to
the Note or Section 5.1 hereof.
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Section 4.6. NO THIRD PARTY BENEFICIARY. Except with respect to the
Bank, it is specifically agreed between the parties executing this Loan
Agreement that it is not intended by any of the provisions of any part of this
Loan Agreement to establish in favor of the public or any member thereof, other
than as may be expressly provided herein or as contemplated in the Indenture,
the rights of a third party beneficiary hereunder, or to authorize anyone not a
party to this Loan Agreement to maintain a suit for personal injuries or
property damage pursuant to the terms or provisions of this Loan Agreement. The
duties, obligations, and responsibilities of the parties to this Loan Agreement
with respect to third parties shall remain as imposed by law except that if
deemed necessary by the Trustee, the Bank or the Issuer shall, if indemnified to
its satisfaction for all liabilities and costs relating thereto, institute and
pursue such actions as directed by the Borrower in writing with the written
approval of the Bank against contractors, subcontractors, and suppliers relating
to the construction of the Project.
ARTICLE V
LOAN BY THE ISSUER TO THE BORROWER; REPAYMENT
Section 5.1. LOAN BY THE ISSUER; REPAYMENT. Upon the terms and
conditions of this Loan Agreement, the Issuer shall lend to the Borrower the
proceeds of the sale of the Series A Bonds and Series B Bonds. The loan shall be
evidenced by and repayable as set forth in the Notes. The loan shall be made by
depositing said proceeds in the Project Fund in accordance with the terms of the
Indenture.
As consideration for the issuance of the Series A Bonds and Series B
Bonds and the making of the loan to the Borrower by the Issuer, the Borrower
will execute and deliver this Loan Agreement and the Series A Note and Series B
Note, in the form attached as Exhibit A hereto and Exhibit B hereto,
respectively, and the Issuer will endorse the Series A Note and Series B Note
without recourse to the order of, and pledge the Series A Note and the Series B
Note and assign this Loan Agreement (subject to certain reserved rights
described in the Indenture), the Series A Note and Series B Note to, the
Trustee, as the assignee of the Issuer under the Indenture, contemporaneously
with the issuance of the Series A Bonds and Series B Bonds. The Borrower shall
repay the loan in accordance with the provisions of the Notes and of this Loan
Agreement. If the Issuer shall issue the Series C Bonds pursuant to the
provisions of the Indenture, the Issuer shall instruct the Trustee to surrender
to the Borrower the Series B Note in exchange for the Series C Note, in the
principal amount of then Outstanding principal amount of the Series B Note and
in the form attached hereto as Exhibit C endorsed without recourse by the
Issuer.
Section 5.2. NO SET-OFF. The obligation of the Borrower to make the
payments required by the Notes shall be absolute and unconditional. The Borrower
will pay without abatement, diminution or deduction (whether for taxes or
otherwise) all such amounts regardless
17
of any cause or circumstance whatsoever including, without limitation, any
defense, set-off, recoupment or counterclaim that the Borrower may have or
assert against the Issuer, the Trustee, the Credit Facility Trustee, any
Bondholder or any other Person.
Section 5.3. PREPAYMENTS. The Borrower may prepay all or any part of
the amounts the Series A Note obligates it to pay as provided in Section 701 of
the Indenture with respect to prepayment of the Bonds. Except as provided in
this Section 5.3 and in Sections 4.4, 10.1(b), 10.2 and 10.3, the Borrower shall
not be entitled to prepay the Notes or cause the Bonds to be prepaid. The
Borrower shall prepay all of the amounts it is required to prepay as provided in
Sections 10.2 and 10.3 hereof. If and when the Series C Bonds are issued, the
Borrower shall be deemed to have applied the proceeds therefrom loaned to it
pursuant to this Loan Agreement to the prepayment of the Series B Note. Any
accrued interest due and owing on the Series B Note at the time of such
prepayment shall be paid by the Borrower from its own funds or by a draw under
the Credit Facility. Simultaneously with the issuance of the Series C Bonds, the
Borrower shall deliver the Series C Note to the Issuer.
Section 5.4. CREDITS AGAINST THE NOTES. To the extent that principal of
or interest on the Bonds shall be paid, including those payments made pursuant
to a draw under a Credit Facility, there shall be credited against the unpaid
principal of or interest on the Notes, as the case may be, an amount equal to
the principal of or interest on the Bonds so paid. If the principal of and
interest on and other amounts payable under the Bonds shall have been paid
sufficiently that Payment of the Bonds shall have occurred, then the Notes, IPSO
FACTO, shall be deemed to have been paid in full, the Borrower's obligations
thereon shall be discharged (with the exception of the obligation of the
Borrower to make certain payments which may subsequently arise as a result of a
Determination of Taxability and the Borrower's obligations under Sections 7.4,
7.6, 7.7 and 11.14 hereof which shall survive, notwithstanding Payment of the
Bonds), and the Notes shall be canceled and surrendered to the Borrower.
Section 5.5. LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT. As a further
condition to the Issuer's making the loan hereunder, the Borrower shall:
(a) cause the Letter of Credit to be issued and delivered to the Credit
Facility Trustee as security for the Bonds. Until the earlier to occur of the
Conversion Date or payment of the Notes and the Bonds in full, the Borrower
shall cause a Credit Facility meeting the requirements of Section 603 of the
Indenture to be maintained with the Credit Facility Trustee; and
(b) enter into the Reimbursement Agreement in form and substance
satisfactory to the Bank and execute and deliver the other Letter of Credit
Documents required by the Bank.
ARTICLE VI
GENERAL COVENANTS
18
Section 6.1. MAINTENANCE AND MODIFICATION OF THE PROJECT BY BORROWER.
The Borrower agrees that, until Payment of the Bonds shall be made, it will at
its own expense, (i) keep the Project Site or cause the Project Site to be kept
in as reasonably safe condition as its operations shall permit, (ii) make or
cause to be made from time to time all necessary repairs thereto and renewals
and replacements thereof and otherwise keep the Project in good repair and in
good operating condition and (iii) not permit or suffer others to commit a
nuisance on or about the Project Site. The Borrower shall pay or cause to be
paid all costs and expenses of operation and maintenance of the Project.
The Borrower may, at its own expense, make from time to time any
additions, modifications or improvements to the Project that it may deem
desirable for its business purposes and that do not materially impair the
effective use, or decrease the value, of the Project.
Section 6.2. TAXES AND UTILITY CHARGES.
(a) The Borrower shall pay as the same respectively become due, all
taxes, assessments, impact fees, levies, claims and charges of any kind
whatsoever that may at any time be lawfully assessed or levied against or with
respect to the Project (including, without limiting the generality of the
foregoing, any tax upon or with respect to the income or profits of the Borrower
from the Project and that, if not paid, would become a charge on the payments to
be made under this Loan Agreement or the Notes prior to or on a parity with the
charge thereof created by the Indenture and including ad valorem, sales and
excise taxes, assessments, impact fees and charges upon the Borrower's interest
in the Project), all utility and other charges incurred in the operation,
maintenance, use, occupancy and upkeep of the Project and all assessments,
impact fees and charges lawfully made by any governmental body for public
improvements that may be secured by lien on any portion of the Project.
(b) The Borrower may, at its expense, contest in good faith any such
levy, tax, assessment, impact fees, claim or other charge, but the Borrower may
permit the items so contested to remain undischarged and unsatisfied during the
period of such contest and any appeal therefrom only if the Borrower shall
notify the Issuer, the Trustee and the Credit Facility Trustee that in the
opinion of Counsel, by non-payment of any such items, the rights of the Trustee
and the Credit Facility Trustee with respect to this Loan Agreement and the
Notes created by the assignment under the Indenture, as to the rights assigned
under this Loan Agreement, or any part of the payments to be made under this
Loan Agreement or the Notes, will not be materially endangered nor will the
Project or any part thereof be subject to loss or forfeiture. If the Borrower is
unable to deliver such an opinion of Counsel, the Borrower shall promptly pay or
bond and cause to be satisfied or discharged all such unpaid items or furnish,
at the expense of the Borrower, indemnity satisfactory to the Trustee and the
Credit Facility Trustee; but provided further, that any tax assessment, charge,
levy or claim shall be paid forthwith upon the commencement of proceedings to
foreclose any lien securing the same. The Issuer (unless such contest is against
the Issuer), the Trustee and the Credit Facility Trustee, at the expense of the
Borrower, will cooperate fully in any such permitted contest. If the Borrower
19
shall fail to pay any of the foregoing items, the Issuer (unless such contest is
against the Issuer) or the Trustee may (but shall be under no obligation to) pay
the same and any amounts so advanced therefor by the Issuer or the Trustee shall
become an additional obligation of the Borrower to the one making the
advancement, which amounts, together with interest thereon at the Overdue Rate,
or the maximum contract rate permitted by law, whichever is lower, from the date
of payment, the Borrower agrees to pay on demand therefor.
(c) The Borrower shall furnish the Issuer, the Credit Facility Issuer,
the Trustee and the Credit Facility Trustee, upon request, with proof of payment
of any taxes, governmental charges, utility charges, insurance premiums or other
charges required to be paid by the Borrower under this Loan Agreement.
Section 6.3. INSURANCE. Until Payment of the Bonds shall be made, the
Borrower will keep the Project and the Project Site continuously insured against
such risks as are customarily insured against by businesses of like size and
type engaged in the same or similar manufacturing operations (other than
business interruption insurance) including, without limiting the generality of
the foregoing:
(a) casualty insurance on the Project in an amount not less than the
full insurable value of all property located at, and all improvements to, the
Project Site, against loss or damage by fire and lightning and other hazards
ordinarily included under uniform broad form extended coverage policies, limited
only as may be provided in the uniform broad form of extended coverage
endorsement. at the time in use in the State;
(b) general comprehensive liability insurance against claims for bodily
injury, death or property damage occurring on, in or about the Project Site
(such coverage to include provisions waiving subrogation against the Issuer and
the Trustee) in amounts not less than $1,000,000 with respect to bodily injury
to any one person, $1,000,000 with respect to bodily injury to two or more
persons in any one accident and $1,000,000, with respect to property damage
resulting from any one occurrence;
(c) liability insurance with respect to the Project Site under the
workers' compensation laws of the State; provided, however, that the insurance
so required may be provided by blanket policies now or hereafter maintained by
the Borrower; and
(d) if at any time any portion of the Project Site is in an area that
has been identified by the Secretary of Housing and Urban Development as having
special flood and mud slide hazards, a policy of flood insurance covering
improvements located on such portion of the Project Site with amounts and
coverage satisfactory to the Trustee.
Section 6.4. GENERAL REQUIREMENTS APPLICABLE TO INSURANCE.
20
(a) Each insurance policy obtained in satisfaction of the requirements
of Section 6.3 hereof:
(i) shall be by such insurer (or insurers) as shall be financially
responsible, qualified to do business in the State and of recognized
standing;
(ii) shall be in such form and have such provisions (including,
without limitation, the lenders long-form loss payable clause, the
waiver of subrogation clause, the deductible amount, if any, and the
standard mortgagee endorsement clause), as are generally considered
standard provisions for the type of insurance involved and are
acceptable in all respects to the Trustee;
(iii) shall prohibit cancellation or substantial modification,
termination or lapse in coverage by the insurer without at least 30
days' prior written notice to the Issuer, the Credit Facility Issuer
and the Trustee;
(iv) shall provide that losses thereunder shall be adjusted with
the insurer by the Borrower at its expense on behalf of the insured
parties and the decision of the Borrower as to any adjustment shall be
final and conclusive; and
(v) without limiting the generality of the foregoing, all
insurance policies carried on the Project shall name the Borrower, the
Issuer and the Trustee as parties insured thereunder as the respective
interests of each may appear, and any loss thereunder shall be made
payable and shall be applied as provided in Section 6.8 hereof.
(b) Prior to expiration of any such policy, the Borrower shall furnish
the Trustee with evidence satisfactory to the Trustee that the policy or
certificate has been renewed or replaced in compliance with this Loan Agreement
or is no longer required by this Loan Agreement.
Section 6.5. ADVANCES BY THE ISSUER OR THE TRUSTEE. In the event the
Borrower shall fail to maintain, or cause to be maintained, the full insurance
coverage required by this Loan Agreement or shall fail to keep or cause to be
kept the Project in good repair and good operating condition, the Issuer or the
Trustee may (but shall be under no obligation to), after 10 days' written notice
to the Borrower, contract for the required policies of insurance and pay the
premiums on the same and make any required repairs, renewals and replacements,
and the Borrower agrees to reimburse the Issuer and the Trustee to the extent of
the amounts so advanced by them or any of them with interest thereon at the
Overdue Rate or the maximum rate permitted by law, whichever is lower, from the
date of advance to the date of reimbursement. Any amounts so advanced by the
Issuer or the Trustee shall become an additional obligation of the Borrower,
shall be payable on demand, and shall be deemed a part of the obligation of the
Borrower evidenced by the Notes.
21
Section 6.6. BORROWER TO MAKE UP DEFICIENCY IN INSURANCE COVERAGE. The
Borrower agrees that to the extent that it shall not carry insurance required by
Section 6.3 hereof, it shall pay promptly to the Trustee for application in
accordance with the provisions of Section 6.8 hereof, such amount as would have
been received as Net Proceeds by the Trustee under the provisions of Section 6.8
hereof had such insurance been carried to the extent required.
Section 6.7. EMINENT DOMAIN. Unless the Borrower shall have prepaid the
Notes pursuant to the provisions of Article X hereof, in the event that title
to, or temporary use of, the Project Site or any part thereof shall be taken by
Eminent Domain, the Borrower shall be obligated to continue to make the payments
required to be made pursuant to the Notes and the Net Proceeds received as a
result of such Eminent Domain shall be applied as provided in Section 6.8(b)
hereof.
Section 6.8. APPLICATION OF NET PROCEEDS OF INSURANCE AND EMINENT
DOMAIN.
(a) The Net Proceeds of the insurance carried pursuant to the
provisions of Sections 6.3(b) and 6.3(c) hereof shall be applied by the Borrower
toward extinguishment of the defect or claim or satisfaction of the liability
with respect to which such insurance proceeds may be paid.
(b) The Net Proceeds of the insurance carried with respect to the
Project pursuant to the provisions of Sections 6.3(a) and 6.3(d) hereof
(excluding the Net Proceeds of any business interruption insurance, which shall
be paid to the Borrower), and the Net Proceeds resulting from Eminent Domain
shall be paid to the Trustee and applied as follows:
(i) If the amount of the Net Proceeds does not exceed $50,000, the
Net Proceeds shall be paid to the Borrower and shall be applied to the
repair, replacement, renewal or improvement of the Project as
necessary.
(ii) If the amount of the Net Proceeds exceeds $50,000, the Net
Proceeds shall be paid to and held by the Trustee as a special trust
fund and invested in accordance with Section 602 of the Indenture
pending receipt of written instructions from the Borrower. At the
option of the Borrower, to be exercised within the period of 90 days
from the receipt by the Trustee of such Net Proceeds, the Borrower
shall advise the Trustee that (A) the Borrower will use the Net
Proceeds for the repair, replacement, renewal or improvement of the
Project (such funds to be delivered by the Trustee to the Borrower), or
(B) the Net Proceeds shall be applied to the prepayment of the Bonds as
provided in Article X hereof. If the Borrower does not advise the
Trustee within said period of 90 days that it elects to proceed under
clause (A) to use such Net Proceeds for the repair, replacement,
renewal or improvement of the Project, such Net Proceeds shall be
applied to the prepayment of the Bonds pursuant to Article X hereof.
Any prepayment pursuant to the preceding sentence shall be effected on
the next interest payment date not less than 30 days after the earlier
of notice of
22
the Borrower's election to prepay the Bonds or expiration of said
period of 90 days without an election by the Borrower.
The Borrower agrees that if it shall elect to use the moneys paid to
the Trustee pursuant to subsection (b)(ii) of this Section 6.8 for the repair,
replacement, renewal or improvement of the Project, it will restore the Project,
or cause the same to be done, to a condition substantially equivalent to its
condition prior to the occurrence of the event to which the Net Proceeds were
attributable. To the extent that the Net Proceeds are not sufficient to restore
or replace the Project, the Borrower shall use its own funds to restore or
replace the Project. Prior to the commencement of such work, the Trustee may
require the Borrower to furnish a completion bond, escrow deposit, or other
satisfactory evidence of the Borrower's ability to pay or provide for the
payment of any estimated costs in excess of the amount of the Net Proceeds. Any
balance remaining after any such application of such Net Proceeds shall be paid
to the Borrower. The Borrower shall be entitled to the Net Proceeds of any
insurance or resulting from Eminent Domain relating to property of the Borrower
not included in the Project Site and not providing security for the Notes or
this Loan Agreement.
Section 6.9. PARTIES TO GIVE NOTICE. In case of any material damage to
or destruction of all or any part of the Project, the Borrower shall give prompt
notice thereof to the Issuer, the Credit Facility Issuer and the Trustee. In
case of a taking or proposed taking of all or any part of the Project Site or
any right therein by Eminent Domain, the Borrower shall give prompt notice
thereof to the Issuer, the Credit Facility Issuer and the Trustee. Each such
notice shall describe generally the nature and extent of such damage,
destruction, taking, loss, proceeding or negotiations.
ARTICLE VII
SPECIAL COVENANTS
Section 7.1. ACCESS TO THE PROJECT AND INSPECTION. The Credit Facility
Issuer, the Trustee, the Credit Facility Trustee and the Issuer shall have the
right, at all reasonable times upon the furnishing of reasonable notice to the
Borrower under the circumstances, to enter upon the Project Site and to examine
and inspect the Equipment. The Trustee, the Credit Facility Trustee, the Credit
Facility Issuer, the Issuer and their duly authorized agents shall also have
such right of access to the Project as may be reasonably necessary to cause to
be completed the construction, acquisition and installation of the Project, and
thereafter for its proper maintenance, in the event of failure by the Borrower
to perform its obligations relating to maintenance under this Loan Agreement.
The Borrower hereby covenants to execute, acknowledge and deliver all such
further documents, and do all such other acts and things as may be necessary to
grant to the Issuer Representative, the Credit Facility Trustee and the Trustee
such right of entry. The Issuer Representative, the Credit Facility Trustee, the
Trustee and the Credit Facility Issuer shall also be permitted, at all
reasonable times, to examine the books and records of the Borrower with respect
to the Project and the obligations of the
23
Borrower hereunder, but none of them shall be entitled to access to trade
secrets or other proprietary information (other than financial information) of
the Borrower. Notwithstanding the foregoing, the Issuer shall have no
affirmative duty to make such inspections.
Section 7.2. FURTHER ASSURANCES AND CORRECTIVE INSTRUMENTS. Subject to
the provisions of the Indenture, the Issuer and the Borrower agree that they
will, from time to time, execute, acknowledge and deliver, or cause to be
executed, acknowledged and delivered, such supplements and amendments hereto and
such further instruments as may reasonably be required for carrying out the
intention or facilitating the performance of this Loan Agreement. All such
supplements, amendments and further instruments shall require the approval of
the Credit Facility Issuer.
Section 7.3. RECORDING AND FILING; OTHER INSTRUMENTS.
(a) The Borrower covenants that it will, at its expense, cause Counsel
in the State to take all steps are as reasonably necessary to render an opinion,
and to render an opinion to the Issuer and the Trustee not earlier than 60 nor
later than 30 days prior to each anniversary date occurring at five-year
intervals after the issuance of the Bonds, to the effect that all financing
statements, continuation statements, notices and other instruments required by
applicable law have been recorded or filed or re-recorded or re-filed in such
manner and in such places required by law in order fully to preserve and protect
the rights of the Trustee and the Credit Facility Trustee in the granting by the
Issuer of certain rights of the Issuer, pursuant to the Indenture, under this
Loan Agreement and the Notes.
(b) The Borrower and the Issuer or the Trustee and Credit Facility
Trustee on behalf of the Issuer shall execute and deliver all instruments and
shall furnish all information and evidence deemed necessary or advisable by such
Counsel to enable him to render the opinion referred to in subsection (a) of
this Section. The Borrower shall file and re-file and record and re-record or
cause to be filed and re-filed and recorded and re-recorded all instruments
required to be filed and re-filed and recorded or re-recorded pursuant to the
opinion of such Counsel and shall continue or cause to be continued the liens of
such instruments for so long as the Bonds shall be outstanding, except as
otherwise required by this Loan Agreement.
Section 7.4. NON-ARBITRAGE COVENANTS: NOTICE OF EVENT OF TAXABILITY.
(a) Neither the Borrower nor the Issuer shall take any action, and the
Borrower covenants that it will not approve the Trustee's taking any action or
making any investment or use of the proceeds of the Series A Bonds or the Series
C Bonds, when and if issued,, which would cause any of such Bonds to be an
"arbitrage bond" within the meaning of Section 148 of the Code.
24
(b) The Borrower's obligation to make any payments of rebate amounts
required by this Loan Agreement and the Indenture and to prepare and furnish to
the Issuer and the Trustee the statements and forms described herein and therein
shall survive Payment of the Series A Bonds or the Series C Bonds, when and if
issued, notwithstanding any provision of this Loan Agreement to the contrary.
(c) The Borrower shall give immediate telephonic notice, promptly
confirmed in writing, to the Issuer and the Trustee of any Event of Taxability
whether the Borrower is on Notice of such Event of Taxability by its own filing
of any statement, tax schedule, return or document with the Internal Revenue
Service which discloses that an Event of Taxability shall have occurred, by its
receipt of any oral or written advice from the Internal Revenue Service that an
Event of Taxability shall have occurred, or otherwise.
Section 7.5. ADMINISTRATIVE EXPENSES. The Borrower shall pay to or for
the account of the Issuer within 30 days after notice thereof all reasonable
costs and expenses incurred by the Issuer in connection with the financing and
administration of the Project, including, without limitation, any fees
associated with the calculation of rebate if the Borrower fails to provide such
calculation, except such as may be paid out of the proceeds of the Bonds,
including, without limitation, the costs of administering this Loan Agreement
and the fees and expenses of attorneys, consultants and others.
Section 7.6. INDEMNITY AGAINST CLAIMS. The Borrower will pay and
discharge and will indemnify and hold harmless the Issuer, the Trustee and the
Credit Facility Trustee from (a) any lien or charge upon amounts payable
hereunder by the Borrower to the Issuer (other than the lien of the Indenture),
and (b) any taxes, assessments, impositions and other charges in respect of the
Project Site or the Equipment. If any claim of any such lien or charge upon
payments, or any such taxes, assessments, impositions or other charges, are
sought to be imposed, the Issuer, the Trustee or the Credit Facility Trustee, as
the case may be, will give prompt notice to the Borrower, and the Borrower shall
have the sole right and duty to assume, and shall assume, the defense thereof,
with full power to litigate, compromise or settle the same in its sole
discretion.
Section 7.7. RELEASE AND INDEMNIFICATION. The Borrower hereby releases
the Issuer and its officers and employees from, and covenants and agrees to
indemnify, hold harmless and defend the Issuer, the Trustee, and their
respective officers, members, directors, officials, agents and employees and
each of them (each an "indemnified party") from and against (a) any and all
claims, joint or several, by or on behalf of any person arising from any cause
whatsoever in connection with transactions contemplated hereby or otherwise in
connection with the Project, the Bonds or the execution or amendment of any
document relating thereto; (b) any and all claims, joint or several, arising
from any cause whatsoever in connection with the financing of the Project or the
making of the loan; (c) any and all claims, joint or several, arising from any
act or omission of the Borrower or any of its agents, servants, employees or
licensees, in connection with the such loan or the Project; (d) all reasonable
costs, counsel fees, expenses or liabilities incurred in connection with any
such claim, or proceeding brought thereon; (e) any and all claims arising in
connection with the issuance and sale, resale or marketing of any Bonds
25
or any certifications or representations made by any person other than the
Issuer or the Party seeking indemnification in connection therewith and the
carrying out by the Borrower of any of the transactions contemplated by the Bond
Documents; (f) any and all claims arising in connection with the operation of
the Project, or the conditions thereof, environmental or otherwise, occupancy,
use, possession, conduct or management or work done in or about, or from the
planning, design, acquisition, installation or construction of, the Project or
any part thereof; and (g) any and all losses, claims, damages, liabilities or
expenses, joint or several, arising out of or connected with the Trustee's
acceptance or administration of the trusts created by the Indenture and the
exercise of its powers or duties thereunder or under the other Bond Documents or
any other agreements in connection therewith to which it is a party; except (i)
in the case of the foregoing indemnification of the Trustee or any of its
officers, members, directors, officials and employees, to the extent such
damages are caused by the negligence or willful misconduct of such person, or
(ii) in the case of the foregoing indemnification of the Issuer or any of its
officers, members, directors, officials and employees, to the extent such
damages are caused by the willful misconduct of such person. In the event that
any action or proceeding is brought against any indemnified party with respect
to which indemnify may be sought hereunder, the Borrower, upon written notice
from the indemnified party, shall assume the investigation and defense thereof,
including the employment of counsel selected by the Borrower, subject to the
approval of the indemnified party in such party's sole discretion, and shall
assume the payment of all expenses related thereto, with full power to litigate,
compromise or settle the same in its sole discretion; PROVIDED that the Issuer
and the Trustee shall have the right to review and approve or disapprove any
such compromise or settlement. Each indemnified party shall have the right to
employ separate counsel in any such action or proceeding and participate in the
investigation and defense thereof, and the Borrower shall pay the reasonable
fees and expenses of such separate counsel; PROVIDED, HOWEVER, that unless such
separate counsel is employed with the approval of the Borrower, which approval
shall not be unreasonably withheld, the Borrower shall not be required to pay
the fees and expenses of such separate counsel.
Notwithstanding any transfer of the Project to another owner in
accordance with the provisions of this Loan Agreement and the Mortgage, the
Borrower shall remain obligated to indemnify each indemnified party pursuant to
this Section if such subsequent owner fails to indemnify any party entitled to
be indemnified hereunder, unless such indemnified party has consented to such
transfer and to the assignment of the rights and obligations of the Borrower
hereunder.
Section 7.8. ADDITIONAL INFORMATION. Until Payment of the Bonds shall
have occurred, the Borrower shall promptly, from time to time, deliver to the
Trustee such information regarding the operations, business affairs and
financial condition of the Borrower as the Trustee may reasonably request. The
Trustee is hereby authorized to deliver a copy of any such financial information
delivered hereunder, or otherwise obtained by the Trustee, to the Credit
Facility Trustee, to any Bondholder or prospective Bondholder, to any regulatory
authority having jurisdiction over the Trustee and to any other Person as may be
required by law. The Issuer (to the extent it has access to such information)
and the Trustee are authorized to provide
26
information concerning the outstanding principal amount and payment history of,
and other information pertaining to, the Bonds or the Notes to any agency or
regulatory authority of the State requesting such information.
Section 7.9. CORPORATE EXISTENCE, SALE OF ASSETS, CONSOLIDATION OR
MERGER. Unless the Trustee and the Credit Facility Trustee consent in writing
(which consent shall not be unreasonably withheld or delayed), the Borrower will
maintain its corporate existence, will not dissolve or otherwise dispose of all
or substantially all of its assets and will not enter into any transaction of
merger or consolidation; provided that, if a Reimbursement Agreement is in
effect, the Borrower may take such action if it is permitted by the terms of the
Reimbursement Agreement. If the Reimbursement Agreement permits such action, the
Borrower shall promptly notify the Trustee and the Credit Facility Trustee
thereof.
Section 7.10. DEFAULT CERTIFICATES. The Borrower shall deliver to the
Trustee and the Credit Facility Trustee, annually, within 60 days after the
close of each fiscal year, a certificate that no Event of Default hereunder or
under the Notes, the Indenture, or the Reimbursement Agreement, or an event
which would constitute such an Event of Default but for the requirement that
notice be given or time elapse or both has occurred and is continuing, or if
such an event has occurred or is continuing, a certificate of the Borrower
specifying the nature and period of existence thereof and what action the
Borrower proposes to take with respect thereto.
Section 7.11. NOTIFICATION TO TRUSTEE AND CREDIT FACILITY TRUSTEE. The
Borrower shall notify the Trustee and the Credit Facility Trustee in writing
promptly, but in any event within five Business Days, of the occurrence of any
of the following, with respect to the Borrower:
(i) any levy of an attachment, execution or other process against
its assets, which materially adversely affects the financial condition
or operation of the Borrower;
(ii) any change in any existing agreement or contract which
materially adversely affects its business or affairs, financial or
otherwise; and
(iii) any change in the ownership or control of the Borrower.
Section 7.12. SECONDARY MARKET DISCLOSURE. On and after the Conversion
Date for as long as the Borrower is obligated under this Loan Agreement, the
Borrower covenants to comply with the continuing disclosure requirements with
respect to the Bonds and the Project and its operations as may be required from
time to time under Rule 15c2-12 of the Securities and Exchange Commission. The
Borrower agrees that if it should violate the covenant set forth in this Section
7.12, the Issuer or the Trustee shall be entitled to bring an action for
specific performance; provided however noncompliance by the Borrower under this
Section 7.12 shall not be an Event of Default hereunder or under the Indenture.
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Section 7.13. OBSERVE LAWS. The Borrower shall observe all applicable
laws, regulations and other valid requirements of any regulatory authority with
respect to its operations at the Project Site.
ARTICLE VIII
ASSIGNMENT, LEASING AND SELLING
Section 8.1. ASSIGNMENT OF LOAN AGREEMENT OR LEASE OR SALE OF PROJECT
BY THE BORROWER. Except with the prior written consent of the Issuer, the Credit
Facility Issuer, the Trustee and the Credit Facility Trustee, the rights of the
Borrower under this Loan Agreement may not be assigned, and the Project may not
be leased or sold as a whole or in part.
Section 8.2. RESTRICTIONS ON TRANSFER OF ISSUER'S RIGHTS. Except for
the assignment made pursuant to the Indenture of certain of its rights under
this Loan Agreement and its pledge of the Notes, endorsed without recourse to
the order of the Trustee, to the Trustee as security pursuant to the Indenture,
the Issuer will not, during the term of this Loan Agreement, sell, assign,
transfer or convey any of its interests in this Loan Agreement or the Notes. The
Borrower hereby assents to such assignment and pledge of the Issuer's rights
under this Loan Agreement and the pledge of the Notes to the Trustee.
ARTICLE IX
EVENTS OF DEFAULT AND REMEDIES
Section 9.1. EVENTS OF DEFAULT DEFINED. The term "Event of Default"
shall mean any one or more of the following events:
(a) The failure by the Borrower to pay when due any payment of
principal or interest on or other amount payable under the Notes or this Loan
Agreement.
(b) The failure of the Issuer to pay when due any payment of principal
of or interest on or other amount payable under the Bonds.
(c) The failure of the Borrower to perform any of its obligations under
Sections 7.4, 7.9 or 7.11 hereof.
(d) The occurrence of an "Event of Default" or "event of default" under
any of the other Bond Documents or the Letter of Credit Documents provided the
Borrower has had the
28
opportunity to cure any such default if the other Bond Documents or Letter of
Credit Documents, as the case may be, so provide.
(e) Any representation or warranty of the Borrower contained in Section
2.2 hereof, or in any document, instrument or certificate delivered pursuant
hereto or to the Indenture or in connection with the issuance and sale of the
Bonds, including but not limited to the Tax Certificate, shall be false,
misleading or incomplete in any material respect on the date as of which made.
(f) Failure by the Borrower to observe and perform any covenant,
condition or agreement on the part of the Borrower under the Notes or this Loan
Agreement, other than as referred to in the preceding paragraphs of this Section
9.1, and other than a breach of the covenant set forth in Section 7.12 hereof,
for a period of 90 days after written notice, specifying such failure and
requesting that it be remedied, is given to the Borrower by the Issuer or the
Trustee.
(g) The commencement against the Borrower of an involuntary case under
the federal bankruptcy laws, as now constituted or hereafter amended, or any
other applicable federal or State bankruptcy, insolvency or other similar law,
or of any action or proceeding for the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of the Borrower
or for any substantial part of its property, or for the winding-up or
liquidation of its affairs and the continuance of any such case, action, or
proceeding unstayed and in effect for a period of 90 consecutive days.
(h) The commencement by the Borrower of a voluntary case under the
federal bankruptcy laws, as now constituted or hereafter amended, or any other
applicable federal or State bankruptcy, insolvency or other similar law, or the
consent by it to, or its acquiescence in the appointment of or taking possession
by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of the Borrower or of any substantial part of its property, or
the making by it of or the consent by it to any assignment for the benefit of
creditors, or the taking of any action by the Borrower in furtherance of any of
the foregoing.
(i) Failure by the Borrower to pay, when due or within any applicable
grace period, any amount owing on account of indebtedness for money borrowed or
for deferred purchases of property, or the failure by the Borrower to observe or
perform any covenant or undertaking on its part to be observed or performed in
any agreement evidencing, securing or relating to such indebtedness, if the
effect of such default is to cause, or permit the holder or holders of such
obligation (or a trustee for such holder or holders) to cause such obligation to
become due prior to its stated maturity and the acceleration of such obligation
would have a material and adverse effect on the business or financial condition
of the Borrower and its subsidiaries as a whole.
29
(j) Unless bonded or covered by insurance to the satisfaction of the
Bank, the entry of a judgment or decree against the Borrower in an amount in
excess of $100,000 which remains undischarged and unstayed for a period of 30
consecutive days.
Section 9.2. REMEDIES ON DEFAULT. If Payment of the Bonds shall not
have been made, whenever any Event of Default referred to in Section 9.1 hereof
shall have happened and shall not have been waived:
(a) The Issuer, or the Trustee on behalf of the Issuer, may by written
notice declare all installments of principal repayable pursuant to the Notes for
the remainder of the term thereof to be immediately due and payable, whereupon
the same, together with accrued interest thereon as provided for in the Notes,
shall become immediately due and payable without presentment, demand, protest or
any other notice whatsoever, all of which are hereby expressly waived by the
Borrower; provided, however, all such amounts shall automatically be and become
immediately due and payable without notice upon the occurrence of any event
described in Section 9.1(g) or 9.1(h) hereof, which notice the Borrower hereby
expressly waives.
(b) The Issuer, or the Trustee on behalf of the Issuer, may take
whatever other action at law or in equity may appear necessary or desirable to
collect the amounts payable pursuant to the Notes and this Loan Agreement, then
due and thereafter to become due, or to enforce the performance and observance
of any obligation, agreement or covenant of the Borrower under this Loan
Agreement or under any of the other Bond Documents.
In the enforcement of the remedies provided in this Section 9.2, the
Issuer may treat all reasonable expenses of enforcement, including, without
limitation, legal, accounting and advertising fees and expenses, as additional
amounts payable by the Borrower then due and owing and the Borrower agrees to
pay such additional amounts upon demand, the amount of such legal fees to be
without regard to any statutory presumption.
Section 9.3. APPLICATION OF AMOUNTS REALIZED IN ENFORCEMENT OF
REMEDIES. Any amounts collected pursuant to action taken under Section 9.2
hereof shall be paid to the Trustee and applied pursuant to the provision of
Section 911 of the Indenture.
Section 9.4. NO REMEDY EXCLUSIVE. No remedy herein conferred upon or
reserved to the Issuer or the Trustee on behalf of the Issuer is intended to be
exclusive of any other available remedy or remedies, but each and every such
remedy shall be cumulative and shall be in addition to every other remedy given
under this Loan Agreement or now or hereafter existing at law or in equity or by
statute. No delay or omission to exercise any right or power accruing upon
default shall impair any such 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.
Section 9.5. AGREEMENT TO PAY ATTORNEYS' FEES AND EXPENSES. In any
Event of Default, if the Issuer, the Trustee, the Credit Facility Trustee, the
Credit Facility Issuer or any
30
Bondholder employs attorneys or incurs other expenses for the collection of
amounts payable hereunder or for the enforcement of the performance or
observance of any covenants or agreements on the part of the Borrower contained
herein or in the Indenture (in the case of the Issuer, the Trustee, the Credit
Facility Trustee or the Credit Facility Issuer) or contained in the Indenture
(on the part of any Bondholder), the Borrower agrees that it will on demand
therefor pay to the Issuer, the Trustee, the Credit Facility Trustee, the Credit
Facility Issuer or such Bondholder the reasonable fees of such attorneys and
such other reasonable expenses so incurred by the Issuer, the Trustee, the
Credit Facility Trustee, the Credit Facility Issuer or such Bondholder, the
amount of such fees of attorneys to be without regard to any statutory
presumption.
Section 9.6. CORRELATIVE WAIVERS. If an event of default under Section
901 of the Indenture shall be cured or waived and any remedial action by the
Trustee or the Credit Facility Trustee rescinded, any correlative default under
this Loan Agreement shall be deemed to have been cured or waived.
ARTICLE X
PREPAYMENTS
Section 10.1. OPTIONAL PREPAYMENTS.
(a) The Borrower is hereby granted, and shall have, the option to
prepay the unpaid principal of the Notes of either or both series, at the
Borrower's discretion, in whole or in part in accordance with and as set forth
in Section 701 of the Indenture with respect to the prepayment of the Bonds;
provided, all prepayments shall be made in immediately available funds or by a
corresponding draw under the Credit Facility and with accrued interest to the
date of prepayment and that any prepayment of any of the Notes in part shall be
applied to unpaid installments of principal of the related series of Bonds in
inverse order of maturity. Any prepayment pursuant to this subsection (a) shall
be made by the Borrower taking, or causing the Issuer to take, the actions
required (i) for Payment of the Bonds, in the case of prepayment of the Notes in
whole, or (ii) to effect prepayment of less than all of the Bonds according to
their respective terms in the case of a partial prepayment of the related Notes.
(b) In the event of damage, destruction, or condemnation of the Project
or any part thereof, the Borrower may, at its option, pursuant to Section 6.8
hereof and without penalty or premium, prepay the Notes in whole or in part and,
if in part, the Borrower shall instruct the Trustee in writing which Notes are
to be prepaid; provided that any such prepayment shall be made in immediately
available funds with accrued interest to the date of whole or partial
prepayment. Any prepayment pursuant to this subsection (b) shall be made by the
Borrower taking, or causing the Issuer to take, the actions required for the
full or partial prepayment of the Bonds as provided for in subsection (a)
hereof.
31
(c) To exercise the option granted in subsection (a) or (b) of this
Section 10.1, the Borrower shall give written notice to the Issuer and the
Trustee which shall specify therein (i) the date of the intended prepayment of
the Notes, which shall not be less than 30 nor more than 60 days from the date
the notice is mailed and (ii) the principal amount of the Notes to be prepaid.
When given such notice shall be irrevocable by the Borrower.
Section 10.2. MANDATORY PREPAYMENTS.
(a) Unless the provisions of Section 215 of the Indenture are
applicable, in the event of a Determination of Taxability, the Borrower shall,
on a date selected by the Borrower not more than 180 days following the date of
written notice to the Trustee of a Determination of Taxability, prepay the
entire unpaid principal balance of the Series A Note and, if applicable, the
Series C Note, in full, plus accrued interest to such date. Immediately upon the
occurrence of a Determination of Taxability, the Borrower shall notify the
Issuer, the Trustee and the Credit Facility Trustee of the date selected for
payment pursuant to this Section 10.2.
(b) Prior to the Conversion Date, in the event any Credit Facility is
not renewed and an Alternate Credit Facility has not been provided in accordance
with Section 603 of the Indenture, the Borrower shall on or before the Interest
Payment Date occurring closest but not less than 15 days prior to the expiration
date of the then current Credit Facility, prepay the entire unpaid principal
balance of the Notes in full. The Borrower shall promptly notify the Issuer, the
Trustee and the Credit Facility Trustee of the date selected for such payment.
Section 10.3. OTHER MANDATORY PREPAYMENTS. The amounts required to be
applied to the prepayment of the Notes by Sections 4.4, 5.3 and 6.8 hereof shall
be applied by the Borrower to prepay, together with accrued interest, all or a
portion of the unpaid principal of the respective series of Bonds. Such
prepayment shall be made by the Borrower taking, or causing the Issuer or the
Trustee to take, the actions required (i) for payment of the Bonds, whether by
redemption prior to the maturity or by payment at maturity, or (ii) to effect
the purchase, redemption or payment at maturity of less than all of the
installments of principal on the Bonds in inverse order of their maturities.
ARTICLE XI
MISCELLANEOUS
Section 11.1. REFERENCES TO THE BONDS INEFFECTIVE AFTER BONDS PAID.
Upon payment of any series of Bonds in whole, all references in this Loan
Agreement to such series of Bonds and related Note shall be ineffective and the
Issuer, the Trustee and any holder of such Bonds shall not thereafter have any
rights hereunder, excepting reporting and payment of rebate amounts under the
Tax Certificate and amounts due and owing under Section 7.7 hereof, if
applicable.
32
Section 11.2. NO IMPLIED WAIVER. In the event any agreement contained
in the Notes or this Loan Agreement should be breached by either party and
thereafter waived by the other party, such waiver shall be limited to the
particular breach so waived and shall not be deemed to waive any other breach
thereunder or hereunder. Neither any failure nor any delay on the part of the
Trustee to exercise any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or privilege preclude any other or further exercise thereof, or the
exercise of any other right, power or privilege.
Section 11.3. ISSUER REPRESENTATIVE. Whenever under the provisions of
this Loan Agreement the approval of the Issuer is required or the Issuer is
required to take some action at the request of the Borrower, such approval shall
be made or such action shall be taken by the Issuer Representative; and the
Borrower, the Trustee, the Credit Facility Trustee and the Bondholders shall be
authorized to rely on any such approval or action.
Section 11.4. BORROWER REPRESENTATIVE. Whenever under the provisions of
this Loan Agreement the approval of the Borrower is required or the Borrower is
required to take some action at the request of the Issuer, such approval shall
be made or such action shall be taken by the Borrower Representative; and the
Issuer, the Trustee, the Credit Facility Trustee and the Bondholders shall be
authorized to act on any such approval or action.
Section 11.5. NOTICES. All notices, certificates or other
communications hereunder shall be sufficiently given and shall be deemed given
when delivered by hand delivery or mailed by first class, postage prepaid,
registered or certified mail, addressed as follows:
If to the Issuer: 1115 Manatee Avenue West
Bradenton, Florida 34205
Attention: R.B. Shore, Clerk of the Circuit
Court
If to the Borrower: Trilectron Industries, Inc.
12297 U.S. Highway 41 North
Palmetto, Florida 34220-2109
Attention: Treasurer
with a copy to: Heico Corporation
3000 Taft Street
Hollywood, Florida 38021-4499
Attention: Treasurer
If to the Trustee: First Union National Bank of Florida
200 South Biscayne Boulevard
14th Floor (FL 6065)
Miami, Florida 33131
Attention: Corporate Trust Department
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If to the Credit Branch Banking and Trust Company
Facility Trustee: 223 West Nash Street
Wilson, North Carolina 27894-1847
Attention: Corporate Trust Department
If to the Bank: First Union National Bank of Florida
First Union Financial Center
200 South Biscayne Boulevard
15th Floor
Miami, FL 33131
Attention: William Davies
The Issuer, the Borrower or the Trustee may, by notice given hereunder,
designate from time to time any further or different addresses to which
subsequent notices, certificates or other communications shall be sent.
Section 11.6. IF PAYMENT OR PERFORMANCE DATE IS OTHER THAN A BUSINESS
DAY. If the specified or last date for the making of any payment, the
performance of any act or the exercising of any right, as provided in this Loan
Agreement, shall be a day other than a Business Day, such payment may be made or
act performed or right exercised on the next succeeding Business Day with the
same effect as if made, performed or exercised on the specified date; provided
that interest shall accrue during any such period during which payment shall not
occur.
Section 11.7. BINDING EFFECT. This Loan Agreement shall inure to the
benefit of and shall be binding upon the Issuer, the Borrower and their
respective successors and assigns.
Section 11.8. SEVERABILITY. In the event any provision of this Loan
Agreement or the Notes shall be held invalid or unenforceable by any court of
competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision hereof or thereof.
Section 11.9. AMENDMENTS, CHANGES AND MODIFICATIONS. Subsequent to the
issuance of the Bonds and prior to Payment of the Bonds, this Loan Agreement and
the other Bond Documents may not be effectively amended, changed, modified,
altered or terminated except in accordance with the Indenture.
Section 11.10. EXECUTION IN COUNTERPARTS. This Loan Agreement may be
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument, and no one counterpart
of which need be executed by all parties, except that, to the extent that this
Loan Agreement shall constitute personal property under the Uniform Commercial
Code of State, no security interest in this Loan Agreement may be created or
perfected through the transfer or possession of any counterpart of this Loan
Agreement other
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than the original counterpart, which shall be the counterpart containing the
receipt therefor executed by the Trustee following the signatures to this Loan
Agreement.
Section 11.11. APPLICABLE LAW. This Loan Agreement shall be governed by
and construed in accordance with the laws of the State.
Section 11.12. NO CHARGE AGAINST ISSUER CREDIT. No provision hereof
shall be construed to impose a charge against the general credit of the Issuer
or any personal or pecuniary liability upon any commissioner, official, employee
or agent of the Issuer.
Section 11.13. ISSUER NOT LIABLE. All covenants, stipulations,
obligations and agreements of the Issuer contained in this Loan Agreement shall
be deemed to be covenants, stipulations, obligations and agreements of the
Issuer to the full extent permitted by the Constitution and laws of the State.
No covenant, stipulation, obligation or agreement contained herein shall be
deemed to be a covenant, stipulation, obligation or agreement of any present or
future commissioner, agent or employee of the Issuer or the Governing Board in
his or her individual capacity, and neither the Governing Board of the Issuer
nor any other officer of the Issuer shall be liable personally under this Loan
Agreement or be subject to any personal liability or accountability by reason
thereof. No commissioner, officer, agent or employee of the Issuer or the
Governing Board shall incur any personal liability in acting or proceeding or in
not acting or not proceeding in accordance with the terms of this Loan
Agreement. In acting under this Loan Agreement, or in refraining from acting
under this Loan Agreement, the Issuer may conclusively rely on the advice of its
counsel.
Section 11.14. EXPENSES. The Borrower agrees to pay all reasonable fees
and expenses incurred in connection with the preparation, execution, delivery,
modification, waiver, and amendment of this Loan Agreement, the other Bond
Documents and related documents, and the reasonable fees and expenses of Bond
Counsel, Counsel for the Issuer and, in connection with any amendments, any
Counsel, if any, for any Bondholder who owns more than 25% of the aggregate
principal amount of the Bonds Outstanding. The Borrower also agrees to pay all
expenses incurred by the Trustee or the Issuer in collection of any indebtedness
incurred hereunder in the Event of Default by the Borrower, provided that the
amount of any legal fees so incurred shall be without regard to any statutory
presumption.
Section 11.15. AMOUNTS REMAINING WITH THE TRUSTEE. Any amounts
remaining in the Bond Fund or otherwise in trust with the Trustee under the
Indenture or this Loan Agreement shall, after Payment of the Bonds and all
Administrative Expenses in accordance with this Loan Agreement, be disbursed by
the Trustee in accordance with the provisions of the Indenture or otherwise as
may be required by law.
IN WITNESS WHEREOF, the Issuer and the Borrower have caused this Loan
Agreement to be executed in their respective legal names by their duly
authorized representatives
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and their respective seals, if any, to be hereunto affixed, all as of the date
of execution set forth below.
MANATEE COUNTY, FLORIDA
ATTEST
By: By:
--------------------------------- ------------------------------------
Title: Clerk of the Board of County Title: Chairman of the Board of County
Commissioners of Manatee Commissioners of Manatee County,
County, Florida Florida
Date of Execution: March 27, 1997 Date of Execution: March 27, 1997
(SEAL)
(signatures continued)
36
TRILECTRON INDUSTRIES, INC.
By:
------------------------------
Title:
---------------------------
Date of Execution: March 27, 1997
37
RECEIPT
Receipt of the foregoing original counterpart of the Loan Agreement, dated as of
March 27, 1997, between MANATEE COUNTY, FLORIDA and TRILECTRON INDUSTRIES, INC.,
is hereby acknowledged.
FIRST UNION NATIONAL BANK OF
FLORIDA, as Trustee
By:
--------------------------
Title:
-----------------------
38