Exhibit 10(af)
Philadelphia Authority for Industrial Development
Tax-Exempt Variable Rate Demand/Fixed
Revenue Bonds (Lannett Company, Inc. Project)
Series of 1999
Exhibit 10 (af)
Philadelphia Authority for Industrial Development
Tax-Exempt Variable Rate Demand/Fixed Rate Revenue Bonds
(Lannett Company, Inc. Project) Series of 1999
LOAN AGREEMENT
Dated April 30, 1999
by and between
PHILADELPHIA AUTHORITY FOR INDUSTRIAL DEVELOPMENT
and
LANNETT COMPANY, INC.
Relating to Philadelphia Authority for Industrial Development
$3,700,000 Tax-Exempt Variable Rate
Demand/Fixed Rate Revenue Bonds
(Lannett Company, Inc. Project)
Series of 1999
TABLE OF CONTENTS
PAGE
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ARTICLE I - DEFINITIONS ................................................................................. 3
Section 1.01 Definitions...................................................................... 3
Section 1.02 Content of Certificates and Opinions............................................. 3
Section 1.03. Interpretation................................................................... 4
ARTICLE II - THE LOAN; USE OF PROCEEDS.................................................................... 4
Section 2.01. Loan of Funds to the Borrower.................................................... 4
Section 2.02. Use of Proceeds.................................................................. 4
Section 2.03 Establishment of Completion Date................................................. 4
Section 2.04 Covenants for Benefit of Bondholders and Bank.................................... 5
ARTICLE III - PAYMENT PROVISIONS.......................................................................... 5
Section 3.01 Loan Payments.................................................................... 5
Section 3.02 Letter of Credit................................................................. 6
Section 3.03 Time of Loan Payments............................................................ 6
Section 3.04 Additional Payments; Taxes; Utility Charges...................................... 7
Section 3.05 Acceleration of Payment to Redeem Bonds.......................................... 8
Section 3.06 No Defense or Set-Off............................................................ 9
Section 3.07 Termination Upon Payment or Defeasance of Fixed Rate Bonds....................... 9
Section 3.08 Assignment of Authority's Rights................................................. 9
Section 3.09 Assignment by Borrower........................................................... 10
Section 3.10 Indemnity Against Claims......................................................... 10
Section 3.11 Authority is Conduit Issuer; Borrower is Real Party in
Interest; Covenant Not to Sue.................................................... 11
ARTICLE IV - BORROWER OBLIGATIONS; ASSIGNMENT TO TRUSTEE.................................................. 12
Section 4.01 General Obligation of the Borrower............................................... 12
Section 4.02 Assignment to Trustee............................................................ 12
Section 4.03 Maintenance and Operation of the Project Facilities.............................. 13
Section 4.04 Maintenance of Existence......................................................... 13
Section 4.05 Compliance with Laws............................................................. 14
Section 4.06 Notice of Bankruptcy Case Commencement........................................... 15
Section 4.07 Substitute Letter of Credit...................................................... 15
ARTICLE V - THE PROJECT FACILITIES........................................................................ 16
Section 5.01 Prohibited Uses.................................................................. 16
ARTICLE VI - INSURANCE; DESTRUCTION, DAMAGE, EMINENT DOMAIN............................................... 16
Section 6.01 Insurance to be Maintained....................................................... 16
Section 6.02 Destruction, Damage and Eminent Domain........................................... 16
Section 6.03 Notice of Property Loss.......................................................... 17
Section 6.04 Disposition of Casualty Insurance and Condemnation
Award Proceeds................................................................... 17
ARTICLE VII - ADDITIONAL COVENANTS OF THE BORROWER........................................................ 17
Section 7.01 Compliance with Laws ........................................................... 18
Section 7.02 Power to Perform Obligations..................................................... 18
Section 7.03 Inspection....................................................................... 18
Section 7.04 Additional Information .......................................................... 19
Section 7.05 Tax-Exemption.................................................................... 19
Section 7.06 Hazardous Substances............................................................. 19
Section 7.07 No Material Proceedings Affecting Borrower....................................... 20
Section 7.08 Tax Filings...................................................................... 20
Section 7.09 No Existing Defaults............................................................. 20
Section 7.10 No Material Misstatements or Omissions........................................... 20
Section 7.11 Inducement to Borrower........................................................... 20
Section 7.12 Borrower's Annual Reporting Obligations.......................................... 20
Section 7.13 Cooperation with Trustee......................................................... 21
Section 7.14 Rebate Fund...................................................................... 21
ARTICLE VIII - EVENTS OF DEFAULT AND REMEDIES............................................................ 22
Section 8.01 Events of Default................................................................ 22
Section 8.02 Acceleration..................................................................... 23
Section 8.03 Payment of Loan Payments on Default; Suit Therefor............................... 24
Section 8.04 Other Remedies................................................................... 24
Section 8.05 Waiver........................................................................... 25
Section 8.06 Cumulative Rights................................................................ 25
Section 8.07 No Exercise of Remedies Without Consent of Bank.................................. 25
Section 8.08 Determination of Taxability Not a Default........................................ 26
ARTICLE IX - OPTIONS TO TERMINATE AGREEMENT............................................................... 26
Section 9.01 Option to Terminate Upon Defeasance.............................................. 26
Section 9.02 Option to Terminate Upon the Occurrence of Certain Events........................ 26
ARTICLE X - MISCELLANEOUS 27
Section 10.01 Approval of Indenture............................................................ 27
Section 10.02 Taxes and Insurance; Rights of Authority to Pay.................................. 28
Section 10.03 Illegal Provisions Disregarded................................................... 28
Section 10.04 Limitation of Liability of the Authority......................................... 28
Section 10.05 No Recourse as to the Authority.................................................. 28
Section 10.06 Reference to Statute or Regulation............................................... 29
Section 10.07 Notices.......................................................................... 29
Section 10.08 Applicable Law................................................................... 30
Section 10.09 Amendments....................................................................... 30
Section 10.10 Term of Agreement................................................................ 31
Section 10.11 Amounts Remaining in Bond Fund................................................... 31
Section 10.12 Survival of Covenants, Conditions and Representations............................ 31
Section 10.13 Headings......................................................................... 31
Section 10.14 Multiple Counterparts............................................................ 31
Section 10.15 Consent.......................................................................... 31
THIS LOAN AGREEMENT, dated April 30, 1999 (the "Agreement"), is by
and between PHILADELPHIA AUTHORITY FOR INDUSTRIAL DEVELOPMENT (the
"Authority"), a public body corporate and politic constituting an
instrumentality of the Commonwealth of Pennsylvania organized and existing
under the Pennsylvania Economic Development Financing Law (Act of August 23,
1967, Act No. 102, P.L. 251, 73 P.S. ss.ss.371 et seq., as amended and
supplemented from time to time (the "Act") and LANNETT COMPANY, INC., a
Pennsylvania corporation ("Borrower").
WITNESSETH:
WHEREAS, the Authority is authorized under the Act to acquire, hold,
construct, improve, maintain, own, finance, lease in the capacity of lessor
or lessee, and/or sell industrial, commercial and specialized development
projects for the public purpose of alleviating unemployment, maintaining
employment at a high level and creating and developing business
opportunities, by the construction, improvement, rehabilitation,
revitalization and financing of industrial commercial and specialized
enterprises; and
WHEREAS, the Authority, to accomplish the purposes of the Act, is
empowered to extend credit to such employment promoting enterprises in the
name of the Authority on such terms and conditions and in such manner as it
may deem proper for such consideration and upon such terms and conditions as
the Authority may determine to be reasonable; and
WHEREAS, the Borrower has requested that the Authority issue bonds
to finance a project (the "Project") consisting of: (i) the construction of
an approximately 40,000 square foot manufacturing and manufacturing-related
facility as an addition to a 33,000 square foot existing facility located at
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ (the "9000 State Road Facility")
or, alternatively, the acquisition and renovation of an existing
manufacturing and manufacturing-related facility located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ (the "▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ Facility"); (ii) the
acquisition of equipment for installation and use in either the ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ Facility or the ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ Facility; and (iii) the payment of a
portion of the costs of issuance of the Bonds; and
WHEREAS, pursuant to and in accordance with the provisions of the
Act and a resolution adopted by the Authority (the "Resolution"), the
Authority has authorized and undertaken to issue $3,700,000 aggregate
principal amount of its Tax-Exempt Variable Rate Demand/Fixed Rate Revenue
Bonds (Lannett Company, Inc. Project), Series of 1999 (the "Bonds") for the
purpose of providing funds for financing the Project; and
WHEREAS, the Act provides that the Bonds shall be secured by a
pledge of, and have a lien upon, the revenues and receipts derived pursuant
to this Agreement; and
WHEREAS, the Bonds are to be issued under and secured by a Trust
Indenture of even date herewith (the "Indenture"), between the Authority and
First Union National Bank, as trustee (the "Trustee"); and
WHEREAS, this Agreement provides that the Authority will loan the
proceeds of the Bonds to the Borrower to finance a portion of the costs of
the Project and the Borrower will agree, among other things, to repay the
loan in installments equal to payments of debt service on and the Purchase
Price of the Bonds when due; and
WHEREAS, the Borrower has agreed to make payments pursuant to this
Agreement sufficient in the aggregate to pay fully when due the principal of,
premium, if any, and interest on the Bonds, the Purchase Price of Bonds
tendered for purchase, and related expenses; and
WHEREAS, the Borrower has caused to be delivered to the Trustee an
irrevocable direct pay Letter of Credit (the "Letter of Credit") issued by
First Union National Bank (the "Bank"), providing for the payment of the
aggregate principal amount and the Purchase Price of the Bonds, due and
payable upon tender, maturity, mandatory redemption, optional redemption,
sinking fund redemption or acceleration upon an event of default hereunder,
plus interest calculated for a period up to forty-six (46) days at a maximum
interest rate of fifteen percent (15%) per annum to pay interest on, or the
interest component of the Purchase Price of, the Bonds; and
WHEREAS, the Trustee has agreed under the Indenture to draw on the
Letter of Credit at such times and in such amounts as shall be sufficient to
pay when due the principal, interest and Purchase Price on the Bonds and to
credit all amounts paid under the Letter of Credit against the Borrower's
obligation to make installment payments under this Agreement for such items;
and
WHEREAS, as security for the full and prompt payment and performance
of all its obligations under the Indenture, including, specifically, without
limiting the generality of the foregoing, its obligation to make payment of
principal of, premium, if any and interest on the Bonds, when due, the
Authority has, pursuant to all the provisions of the Indenture, assigned to
the Trustee all of its right, title and interest in, to and under this
Agreement (except its right to indemnification and to receive its fees and
expenses thereunder), including without limitation, the right to receive the
installment payments payable by the Borrower hereunder; and
WHEREAS, the Authority hereby finds and determines that the
financing of the Project will comply with the purposes and provisions of the
Act; and
WHEREAS, the execution and delivery of this Agreement and the
Indenture, and the issuance of the Bonds under the Act, have been in all
respects duly and validly authorized by the Resolution of the Authority, duly
adopted and approved; and
WHEREAS, the Authority and the Borrower desire to enter into this
Agreement to set forth the terms and conditions upon which the Authority will
make the Loan, as hereinafter defined.
NOW, THEREFORE, in consideration of the above premises and of the
mutual covenants hereinafter contained, and for other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. Terms used as defined terms in the
recitals shall have the same meanings throughout this Agreement, and, in
addition thereto, capitalized terms used and not defined herein shall have
the meanings assigned to such terms in the Indenture.
Section 1.02 Content of Certificates and Opinions. The Trustee
may, but shall not be obligated to, require that every certificate or opinion
provided for in this Agreement with respect to compliance with any provision
hereof shall include (1) a statement to the effect that the Person making or
giving such certificate or opinion has read such provision and the
definitions herein relating thereto; (2) a brief statement as to the nature
and scope of the examination or investigation upon which the certificate or
opinion is based; (3) a statement to the effect that in the opinion of such
Person, he has made or caused to be made such examination or investigation as
is necessary to enable him to express an informed opinion with respect to the
subject matter referred to in the instrument to which his signature is
affixed; (4) a statement of the assumptions upon which such certificate or
opinion is based, and that such assumptions are reasonable; and (5) a
statement as to whether, in the opinion of such Person, such provision has
been complied with.
Any such certificate or opinion made or given by an officer of the
Authority or the Borrower may be based, insofar as it relates to legal or
accounting matters, upon a certificate or opinion of or representation by
Counsel or an accountant, unless such officer knows, or in the exercise of
reasonable care should have known, that the certificate, opinion or
representation with respect to the matters upon which such certificate or
statement may be based, as aforesaid, is erroneous. Any such certificate or
opinion made or given by Counsel or an accountant may be based, insofar as it
relates to factual matters (with respect to which information is in the
possession of the Authority or the Borrower, as the case may be) upon a
certificate or opinion of or representation by an officer of the Authority or
the Borrower, unless such Counsel or accountant knows, or in the exercise of
reasonable care should have known, that the certificate or opinion or
representation with respect to the matter upon which such certificate or
opinion or representation may be based, as aforesaid, is erroneous. The same
officer of the Authority or the Borrower, or the same Counsel or accountant,
as the case may be, need not certify to all of the matters required to be
certified under any provision of this Agreement, but different officers,
Counsel or accountants may certify to different matters, respectively.
Section 1.03 Interpretation.
(a) Unless the context otherwise indicates, words expressed in the
singular shall include the plural and vice versa and the use of the neuter,
masculine or feminine gender is for convenience only and shall be deemed to
mean and include the neuter, masculine or feminine gender, as appropriate.
(b) Headings of articles and sections herein and the table of
contents hereof are solely for convenience of reference, do not constitute a
part hereof and shall not affect the meaning, construction or effect hereof.
(c) All references herein to "Articles, "Sections" and other
subdivisions are to the corresponding Articles, Sections or subdivisions of
this Agreement; the words "herein," "hereof," "hereby," "hereunder" and other
words of similar import refer to this Agreement as a whole and not to any
particular Article, Section or subdivision hereof.
(d) Whenever in this Agreement it is required that notice be
provided to the Bank or that consent of the Bank be obtained, such provisions
shall be effective only when (i) the Letter of Credit is in effect and the
Bank is not in default thereunder, (ii) the Bank, in its capacity as provider
of the Letter of Credit, is the Holder of any Bonds or (iii) any amounts are
due and owing to the Bank under the Reimbursement Agreement.
ARTICLE II
THE LOAN; USE OF PROCEEDS
Section 2.01 Loan of Funds to the Borrower. The Authority
hereby agrees that simultaneously with the execution and delivery of this
Agreement, it will loan to the Borrower, upon the terms and conditions
specified herein and in the Indenture, the proceeds of the sale of the Bonds
(the "Loan"), and the Borrower agrees to receive such Loan from the
Authority, for the purposes provided herein and in the Indenture.
Section 2.02 Use of Proceeds. The proceeds of the Bonds shall
be deposited with the Trustee and applied as provided in the Indenture and in
this Agreement to finance a portion of the costs of the Project.
Section 2.03 Establishment of Completion Date.
(a) The Completion Date shall be evidenced to the Authority and
the Trustee by a certificate signed by an Authorized Representative of the
Borrower stating in effect that (i) all Property for the Project has been
acquired and all costs and expenses incurred in connection with such
acquisition have been paid; (ii) all equipment for the Project has been
installed, such equipment so installed is suitable and sufficient for the
operation of the Project, and all costs and expenses incurred in the
acquisition and installation of such equipment have been paid, and (iii) all
other facilities necessary in connection with the Project have been acquired,
constructed, improved, and equipped and all costs and expenses incurred in
connection therewith have been paid. Notwithstanding the foregoing, such
certificate shall state that it is given without prejudice to any rights
against third parties which exist at the date of such certificate or which
may subsequently come into being. Forthwith upon completion of the
acquisition and equipping of the Project, the Borrower agrees to cause such
certificate to be furnished to the Authority and the Trustee. If any amounts
remain, prior to any transfer of said amounts to the Bond Fund as provided
below, the Trustee shall give notice to the Borrower of the amount of funds
remaining unspent in the Project Fund. Any remaining moneys on deposit in the
Project Fund shall be forthwith applied to the payment of the Costs of the
Project, or if not so applied shall be promptly transferred by the Trustee
into the Bond Fund and applied as set forth in Section 2.03(b) below.
(b) If, after the receipt by the Trustee of the certificate
described in subsection 2.03(a) above, at least ninety-five percent (95%) of
the sum of (i) the actual amount of the proceeds received by the Authority
from the sale of the Bonds less amounts expended for issuance expenses and
(ii) any investment earnings on moneys in the Project Fund, have not been
used (A) for the acquisition, construction, reconstruction or improvement of
land or property of a character subject to the allowance for depreciation
under the Code, or (B) for payment of amounts which are, for federal income
tax purposes, chargeable to the Project's capital account or would be so
chargeable either with a proper election by the Borrower or but for a proper
election by the Borrower to deduct such amounts, any amount (exclusive of
amounts retained by the Trustee in the Project Fund for payment of Costs of
the Project not then due and payable) remaining in the Project Fund shall be
segregated by the Trustee in a separate subaccount of the Bond Fund and used
by the Trustee in accordance with the terms of Section 6.08 of the Indenture.
The Borrower shall be responsible for calculating the amount to be segregated
in the Bond Fund and shall notify the Trustee in writing of such amount.
Section 2.04 Covenants for Benefit of Bondholders and Bank.
This Agreement is executed in part to induce (a) the purchase by others of
the Bonds and (b) the issuance by the Bank of the Letter of Credit, and the
participation by the Bank in the funding of advances under the Letter of
Credit. Accordingly, all covenants and agreements on the part of the Borrower
and the Authority, as set forth in the Agreement, are hereby declared to be
for the benefit of the Owners from time to time of the Bonds and for the
benefit of the Bank.
ARTICLE III
PAYMENT PROVISIONS
Section 3.01 Loan Payments.
(a) The Borrower hereby agrees to duly and punctually pay (i) the
principal, premium, if any, and interest due and payable on the Bonds; (ii)
the Purchase Price of the Bonds, and (iii) any other amounts due and payable
by the Borrower under this Agreement. The Borrower shall be given an
immediate credit in the amount of all draws paid to the Trustee under the
Letter of Credit against the loan payments due hereunder. Any portion of the
loan payments due under this Agreement which is not timely paid (upon proper
demand under the Letter of Credit by the Trustee) from draws under the Letter
of Credit shall be paid to the Trustee directly by the Borrower as provided
in Section 3.03 hereof. Any other amounts required to be paid under this
Agreement shall be paid by the Borrower to the party entitled to receive same
hereunder and in the manner provided for herein. Loan payments shall be made
by the Borrower with the Borrower's funds, except to the extent a credit in
respect thereof has been granted pursuant to the terms of this Agreement. It
is the intention of the Authority and the Borrower that, notwithstanding any
other provision of this Agreement, the Authority shall receive funds from the
Borrower under this Agreement at such times and in such amounts as will
enable the Authority to meet all of its obligations under the Bonds and the
Indenture, including any such obligations surviving the payment of the Bonds
and the defeasance of the Indenture. The loan payments required by this
Section 3.01(a) shall be reduced after payment of the principal, premium if
any and interest on the Bonds in accordance with the terms of the Indenture
has been made.
(b) All loan payments and other sums due and payable to the
Authority or the Trustee under this Agreement shall be absolutely net to the
Authority or the Trustee, as applicable, free of any taxes, costs,
liabilities or other deductions whatsoever with respect to the Project
Facilities and the maintenance, repair, or use thereof or any portion
thereof, so that this Agreement shall yield all amounts due hereunder net to
the Authority or the Trustee throughout the term hereof.
(c) The Borrower hereby covenants to make all required payments
into the Rebate Fund as provided for in the Indenture.
Section 3.02 Letter of Credit. Concurrently with the issuance
by the Authority of the Bonds, the Borrower shall cause to be delivered to
the Trustee the Letter of Credit issued by the Bank, authorizing the Trustee
to make draws on the Bank, up to an aggregate stated amount of $3,769,945.20,
of which not more than $3,700,000 shall be in respect of principal on the
Bonds and not more than $69,945.20 shall be in respect of forty-six (46) days
interest accrued on the Bonds on or prior to the maturity thereof.
Section 3.03 Time of Loan Payments.
(a) The Borrower shall pay to the Trustee, as assignee of the
Authority, on the dates and times hereinafter set forth, for deposit in the
Bond Fund (but only to the extent such amounts have not been advanced to the
Trustee under the Letter of Credit), the following sums as payment of the
amount due hereunder:
(i) On any Interest Payment Date or any other date that any
payment of interest, premium, if any, or principal is required to be made in
respect of the Bonds pursuant to the Indenture, until the principal of,
premium, if any, and interest on the Bonds shall have been fully paid or
provision for the payment thereof shall have been made in accordance with the
Indenture, in immediately available funds, a sum which, together with any
moneys available for such payment in the Bond Fund, will enable the Trustee
to pay the amount payable on such date as principal of (whether at maturity
or upon redemption or acceleration or otherwise), premium, if any, and
interest on the Bonds as provided in the Indenture; provided, however, that
the obligation of the Borrower to make any payment hereunder shall be deemed
satisfied and discharged to the extent of the corresponding payment made by
the Bank to the Trustee under the Letter of Credit.
It is understood and agreed that all payments payable by the
Borrower under subsection (a)(i) of this Section 3.03 are assigned by the
Authority to the Trustee for the benefit of the Owners of the Bonds. The
Borrower assents to such assignment. The Authority directs the Borrower, and
the Borrower agrees to pay to the Trustee at the Principal Corporate Trust
Office of the Trustee, all payments payable by the Borrower pursuant to this
subsection (a)(i).
(ii) The Borrower covenants, for the benefit of the Owners of
the Bonds, to pay or cause to be paid, to the Tender Agent, such amounts as
shall be necessary to enable the Tender Agent to pay the purchase price of
Bonds delivered to it for purchase, all as more particularly described in
Sections 5.01, 5.03 and 5.04 of the Indenture; provided, however, that the
obligation of the Borrower to make any such payment under this subsection
(a)(ii) shall be reduced by the amount of moneys available for such payment
described in subsection (i) or (ii) of Section 5.05 of the Indenture; and
provided, further, that the obligation of the Borrower to make any payment
under this subsection (a)(ii) shall be deemed to be satisfied and discharged
to the extent of the corresponding payment made by the Bank under the Letter
of Credit.
(iii) Additionally, from time to time, the Borrower shall make
such payments as shall be necessary to make up any deficiency in or to fully
fund any of the funds established under the Indenture.
Section 3.04 Additional Payments; Taxes; Utility Charges. As
Additional Payments hereunder, the Borrower, during the term of the
Agreement, shall pay or cause to be paid the following:
(a) To the public officers charged with the collection thereof,
promptly as the same become due, all taxes (or contributions or payments in
lieu thereof), including but not limited to income, profits or property
taxes, which may now or hereafter be imposed by the United States of America,
any state or municipality or any political subdivision or subdivisions
thereof, and all assessments for public improvements or other assessments,
levies, license fees, charges for publicly supplied water or sewer services,
excises, franchises, imposts and charges, general and special, ordinary and
extraordinary (including interest, penalties and all costs resulting from
delayed payment of any of the foregoing) of whatever name, nature and kind
and whether or not now within the contemplation of the parties hereto and
which are now or may hereafter be levied, assessed, charged or imposed or
which are or may become a lien upon the payments due under the Agreement, the
Project Facilities or the use or occupation thereof, or upon the Borrower or
the Authority, or upon any franchises, businesses, transactions, income,
earnings and receipts (gross, net or otherwise) of the Borrower in connection
with the Project Facilities, or its earnings, profits or receipts from, or
its subleasing of, the Project Facilities; provided, however, that the
Borrower shall not be required to pay or discharge or cause to be paid or
discharged any tax, assessment, lien or other matter hereunder so long as the
validity thereof is being contested in good faith and by appropriate legal
proceedings diligently pursued, so long as the operation of the Project
Facilities or the receipt of income therefrom is not adversely affected by
reason thereof;
(b) All reasonable fees, charges and expenses of the Trustee, the
Remarketing Agent, the Placement Agent, the Tender Agent and the Bank, as and
when the same become due and payable;
(c) The reasonable fees and expenses of such accountants,
consultants, attorneys and other experts as may be engaged by the Authority,
the Trustee or the Tender Agent to prepare audits, financial statements,
reports, opinions or provide such other services required or permitted under
this Agreement or the Indenture; and
(d) The reasonable fees and expenses of the Authority (including
without limitation the Authority Annual Administrative Fee) and the Trustee
in connection with this Agreement, the Bonds, the Indenture or the
Remarketing Agreement, and any and all other expenses incurred in connection
with the authorization, issuance, sale and delivery of any such Bonds or
incurred by the Authority and the Trustee in connection with any litigation
which may at any time be instituted involving this Agreement, the Bonds, the
Indenture or any of the other documents contemplated thereby, or incurred in
connection with the supervision or inspection of the Agreement, or otherwise
in connection with this Agreement, the Indenture, the Bonds, the Remarketing
Agreement or any of the other documents, instruments or agreements in
connection therewith. The "Authority Annual Administrative Fee" shall mean
the annual fee paid on the Interest Payment Date in each May in an amount
equal to one percent (1%) of each loan payment made by the Borrower during
the immediately prior year for the general administrative services of the
Authority until the Bonds are paid in full. In the event that the Borrower
prepays the loan payments (other than through mandatory sinking fund
redemption), the Borrower shall pay to the Authority a prepayment fee equal
to one-half of one percent (0.5%) of the amount of such prepayment; provided
that in the event such prepayment is effected by a refunding by the
Authority, such prepayment fee shall be waived in full.
Such Additional Payments shall be billed to the
Borrower by the Authority, the Trustee, the Remarketing Agent, the Tender
Agent or the Bank, as the case may be from time to time, together with a
statement certifying that the amount billed has been paid or incurred and
attaching reasonable supporting documentation indicating that the amount
billed has been paid or incurred for one or more of the above items. After
such a demand, amounts so billed shall be paid by the Borrower within thirty
(30) days after receipt of the bill by the Borrower.
Section 3.05. Acceleration of Payment to Redeem Bonds. Whenever
the Bonds are subject to optional redemption or extraordinary redemption
pursuant to the Indenture and the provisions hereof, the Authority will, upon
request of the Borrower, direct the Trustee to call the same for redemption
as provided in the Indenture. Whenever any Bond is subject to mandatory
redemption pursuant to the Indenture, the Borrower will cooperate with the
Authority and the Trustee in effecting such redemption. In the event of any
mandatory, optional or extraordinary redemption of the Bonds, the Borrower
will pay or cause to be paid to the Trustee an amount equal to the applicable
redemption price as a prepayment of that portion of the loan payment
corresponding to the Bonds of such series to be redeemed together with
interest accrued to the date of redemption and will also pay all fees and
expenses of the Authority and the Trustee arising with respect to such
redemption or otherwise due and owing hereunder or under the Indenture at
such times and in such amounts as are required to effect the mandatory,
optional or extraordinary redemption of the Bonds under the terms of the
Indenture.
Section 3.06 No Defense or Set-Off. The obligations of the
Borrower to make loan payments shall be absolute and unconditional without
any defense or set-off for any reason, including, without limitation, any
acts or circumstances that may constitute failure of consideration,
destruction of or damage to the Project Facilities, invalidity or
unenforceability of the Bonds, commercial frustration of purpose or failure
of the Authority to perform and observe any agreement, whether express or
implied, or any duty, liability or obligation arising out of or connected
with this Agreement, it being the intention of the parties that the payments
required of the Borrower hereunder will be paid in full when due without any
delay or diminution whatsoever.
Section 3.07. Termination Upon Payment or Defeasance of Bonds.
When (a) interest on, and principal or the redemption price (as the case may
be) of, all Bonds issued under the Indenture, together with all other amounts
due and payable by the Borrower hereunder, shall have been paid, or (b) there
shall have been deposited with the Trustee an amount evidenced by moneys or
Government Obligations, the principal of and interest on which, when due,
without reinvestment, will provide sufficient moneys to fully pay the
principal or redemption price (as the case may be) of and all accrued
interest on all Bonds then Outstanding, as well as all other sums payable or
to become payable by the Borrower under the Agreement, as evidenced by a
verification report from an independent public accountant, delivered to the
Trustee, satisfactory in form and content to the Trustee, no further loan
payments shall be payable hereunder and, with the consent of the Bank (if the
Letter of Credit remains outstanding or if any amounts are due and owing to
the Bank under the Reimbursement Agreement), this Agreement shall thereupon
be terminated, and the Authority, (i) shall cause the Trustee to pay over to
the Borrower any additional moneys then remaining in any Funds under the
Indenture (and which will not be required to pay any amounts as set forth in
the preceding sentence), and (ii) shall pay over to the Borrower any
additional moneys which may be paid to the Authority by the Trustee;
provided, however, that in each case moneys remaining in any Fund under the
Indenture shall be first paid to the Bank to the extent of any moneys then
due and owing from the Borrower to the Bank under the Reimbursement Agreement
and, provided further, that the provisions of Section 3.10 shall not be
terminated.
Section 3.08. Assignment of Authority's Rights. As security for
the payment of the Bonds, the Authority will assign to the Trustee all the
Authority's rights under the Agreement (except its right to indemnification
and to receive its fees and expenses thereunder). Subject to the prior
assignment made to the Trustee to secure the Bonds, the Authority will also
assign all the Authority's rights under this Agreement to the Bank to secure
the Reimbursement Agreement (except its right to indemnification and to
receive its fees and expenses thereunder). The Borrower consents to such
assignments and agrees to make the loan payments under Section 3.01 and
Section 3.05 hereof directly to the Trustee without defense or set-off by
reason of any dispute between the Borrower and the Trustee. Whenever the
Borrower is required to obtain the consent of the Authority hereunder, the
Borrower shall also obtain the consent of the Bank.
Section 3.09 Assignment by ▇▇▇▇▇▇▇▇. This Agreement may be
assigned in whole or in part by the Borrower without the necessity of
obtaining the consent of the Trustee or the Owners of the Bonds; provided,
however, that any such assignment shall require the prior written consent of
the Bank (as long as the Bank is not in default under the Letter of Credit)
and the Authority; and further provided that no assignment pursuant to this
Section shall be made otherwise than in accordance with the Act and the Code
as from time to time amended. The Borrower shall, within thirty (30) days
after execution thereof, furnish or cause to be furnished to the Authority,
the Trustee and the Bank a true and complete copy of each such assignment
together with any instrument of assumption.
Section 3.10 Indemnity Against Claims.
(a) The Borrower agrees that at all times it will protect and hold
the Authority and the Trustee, their officers, members, employees, directors
and agents harmless and indemnified from and against all claims for losses,
damages or injuries to others, including death, personal injury and property
damage or loss, arising during the term hereof or during any other period
arising out of the acquisition, installation and equipping of the Project
Facilities; and neither the Authority nor the Trustee shall be liable for any
loss, damage or injury to the person or property of the Borrower or its
agents, servants or employees or any other person who or which may be upon
the Project Facilities or damaged or injured as a result of any condition
existing or activity occurring upon the Project Facilities or any other
matter connected directly or indirectly therewith due to any act or
negligence of any person, excepting only willful misconduct of the Authority
or the Trustee, their officers, agents, members, directors or employees. The
indemnity provided for in this Section 3.10(a) shall be effective only to the
extent that any loss sustained by the Authority and the Trustee, their
officers, members, employees, directors and agents shall be in excess of the
net proceeds recovered upon any insurance carried with respect to the loss
sustained.
(b) The Borrower hereby covenants and agrees that it will
indemnify and hold the Trustee and its directors, officers, employees and
agents ("Indemnitees") harmless from and against all claims, liabilities,
losses, suits, judgments, fines, damages, penalties and expenses, including
out-of-pocket and incidental expenses and the fees and expenses of its
attorneys, as well as the allocated costs and expenses of its in-house
counsel and legal staff ("Losses") resulting from the Trustee following any
direction given to it under this Agreement, the Indenture and the other Bond
Documents. In addition to the requirements of the preceding sentence, the
▇▇▇▇▇▇▇▇ also agrees to indemnify the Indemnitees and hold them harmless from
and against any and all Losses incurred by any of them resulting from the
Trustee's exercise and performance of its power and duties granted to it
under the Agreement, the Indenture and the other Bond Documents and not
resulting from ▇▇▇▇▇▇▇'s gross negligence or willful misconduct.
(c) The Borrower will indemnify, hold harmless and defend the
Authority and the Trustee, and the respective officers, members, directors,
officials and employees of each of them against all losses, costs, damages,
expenses, suits, judgments, actions and liabilities of whatever nature
including, specifically, any liability under any state or federal securities
laws (including but not limited to reasonable attorneys' fees, litigation and
court costs, amounts paid in settlement and amounts paid to discharge
judgments) directly or indirectly resulting from or arising out of or related
to: (i) the installation, operation, use, maintenance or ownership of the
Project Facilities (including compliance with laws, ordinances and rules and
regulations of public authorities relating thereto); or (ii) any statements
or representations with respect to the Borrower, the Project Facilities, this
Agreement, the Bonds, the Indenture, the Letter of Credit, the Reimbursement
Agreement or any other documents or instruments delivered at or in connection
with the closing held on the Closing Date (including any statements or
representations made in connection with the offer or sale thereof) made or
given to the Authority, the Trustee or any underwriters or purchasers of any
of the Bonds, by the Borrower or any of its officers, partners, agents or
employees, including, but not limited to, statements or representations of
facts, financial information or corporate or partnership affairs. The
Borrower also will pay and discharge and indemnify and hold harmless the
Authority and the Trustee from (x) any lien or charge upon payments by the
Borrower to the Authority and the Trustee under this Agreement and (y) any
taxes (including, without limitation, any ad valorem taxes and sales taxes,
assessments, impositions and other charges in respect of any portion of the
Project Facilities). If any such claim is asserted, or any such lien or
charge upon payments, or any such taxes, assessments, impositions or other
charges are sought to be imposed, the Authority or the Trustee will give
prompt notice to the Borrower, and the Borrower will have the sole right and
duty to assume, and will assume, the defense thereof, with full power to
litigate, compromise or settle the same in its sole discretion.
(d) If the indemnification provided heretofore is for any reason
determined to be unavailable to the Authority or the Trustee or their
directors, officers, employees and agents, or any of them, with respect to
any such Losses, the Authority and the Trustee as appropriate, shall be
entitled as a matter of right to contribution by the Borrower. The amount of
such contribution shall be in such proportion as is appropriate to reflect
relative culpability of the parties.
(e) The provisions of this Section 3.10 shall survive the
termination and discharge of this Agreement and the Indenture and the
resignation or removal of the Trustee for any reason.
Section 3.11. Authority is Conduit Issuer; Borrower is Real
Party in Interest; Covenant Not to Sue.
(a) The Borrower hereby expressly acknowledges that the Authority
is a conduit issuer and that all of the right, title and interest of the
Authority in and to this Agreement, but not the obligations of the Authority,
are to be assigned first to the Trustee and then on a subordinated basis to
the Bank (except for the right of the Authority to receive its reasonable
fees and expenses and to indemnification), naming the Trustee and the Bank,
as applicable, its true and lawful attorney for and in its name to enforce
the terms and conditions of this Agreement. Notwithstanding any other
provision contained herein, the Borrower hereby expressly agrees,
acknowledges and covenants that it shall duly and punctually perform or cause
to be performed each and every duty and obligation of the Authority under and
pursuant to the Indenture.
(b) The Borrower covenants and agrees that it shall neither sue
the Authority, or any of its board members, officers, agents or employees,
past, present or future, for any claim, loss, demand, action or nonaction
based upon this financing nor ever raise as a defense in any proceedings
whatsoever that the Authority is the true party in interest. Notwithstanding
the provisions of the foregoing sentence, the Borrower shall be entitled to
(i) bring an action of specific performance against the Authority to compel
any action required to be taken by the Authority hereunder or an action to
enjoin the Authority from performing any action prohibited by this
instrument, but no such action shall in any way impose pecuniary liability
against the Authority or any of its board members, officers, agents or
employees, and (ii) join the Authority in any litigation if such joinder is
necessary to pursue any of the Borrower's rights, provided that prior to such
joinder, the Borrower shall post such security as the Authority may require
to further protect the Authority from loss.
ARTICLE IV
BORROWER OBLIGATIONS; ASSIGNMENT TO TRUSTEE
Section 4.01 General Obligation of the Borrower. This Agreement
constitutes a general obligation of the Borrower and the full faith and
credit of the Borrower is pledged to the payment of all amounts due
hereunder.
Section 4.02 Assignment to Trustee. The Authority, immediately
following execution and delivery hereof, shall assign this Agreement and all
loan payments payable hereunder (except its right to receive its fees and
expenses and indemnification) to the Trustee pursuant to the Indenture, IN
TRUST, to be held and applied pursuant to the provisions of the Indenture,
and to the Bank. The Borrower: (1) consents to such assignments and accepts
notice thereof with the same legal effect as though such acceptances were
embodied in separate instruments, separately executed after execution of such
assignments; (2) agrees to pay directly to the Trustee or the Bank, as
applicable, all payments payable hereunder for application to amounts then
due and payable or to become due and payable under the Indenture, such
payments to be paid by the Borrower to the Trustee without any defense,
set-off or counterclaim arising out of any default on the part of the
Authority under the Agreement or any transaction between the Borrower and the
Authority or the Borrower and the Trustee; and (3) agrees that the Trustee
and the Bank, after the Bonds and fees and expenses of the Trustee have been
paid, may exercise any and all rights and pursue any and all remedies granted
the Authority hereunder.
Section 4.03 Maintenance and Operation of the Project Facilities.
(a) During the term of this Agreement, the Borrower will at its
own cost and expense keep and maintain, or cause to be kept and maintained,
in good repair and condition (excepting reasonable wear and tear) the Project
Facilities and all additions and improvements thereto, and pay, or cause to
be paid, any costs and expenses arising out of its use of the Project
Facilities.
(b) The Borrower agrees to timely pay for any improvements to the
Project Facilities lawfully done or lawfully ordered to be done by any
municipal, state or federal authority and to comply in all material respects
at its own cost and expense with all lawful and enforceable notices received
(whether by the Authority or the Borrower) from public authorities from and
after the date hereof that affect the Project Facilities and the use and
operation thereof, other than those improvements, orders and notices, the
amount, validity or application of which is at the time being contested, in
whole or in part, in good faith by appropriate proceedings promptly initiated
and diligently conducted.
(c) The Borrower covenants and agrees that the Project Facilities
shall be used only for the purpose of industrial or commercial activities or
activities accessory thereto, and only for such purposes as are lawful under
the Act.
Section 4.04 Maintenance of Existence. (a) Except as otherwise
permitted in the Reimbursement Agreement, ▇▇▇▇▇▇▇▇ agrees that it will
maintain its existence as a Delaware corporation, will not dissolve or
otherwise dispose of all or substantially all of its assets and will not
consolidate with or merge into another entity.
(b) The Borrower shall not sell, assign, transfer or otherwise
dispose of substantially all of the Project or substantially all of its
assets, except as may be required by a condemnation by a proper authority or
except as permitted by the Indenture. Notwithstanding the preceding sentence,
the Project or this Agreement may be transferred without violating this
Section, provided (i) the Borrower causes the proposed transferee to furnish
the Authority with a "Change of Ownership Information Form" or similar form
then in use by the Authority and the Authority approves in writing the
transferee; (ii) the net worth of the transferee following the transfer is
substantially equal to or greater than the net worth of the Borrower
immediately preceding the transfer as certified to by the independent
auditors of the Borrower; (iii) any litigation or investigations known to the
Borrower in which the transferee or, where applicable, its officers and
directors are involved at the time of such transfer (other than litigation
involving the Borrower), and any court, administrative or other orders to
which the transferee is or, where applicable, its officers and directors are,
subject, relate to matters arising in the ordinary course of business; (iv)
the transferee assumes in writing the obligations of the Borrower under this
Agreement, the Placement Memorandum, the Tax Compliance Agreement and the
Bonds; and (v) after the transfer, the Project shall continue to be operated
as an authorized project under the Act. The Borrower shall, prior to the
taking of any of the foregoing proposed actions, deliver to the Authority and
the Trustee an opinion of nationally recognized bond counsel to the effect
that the proposed action will not cause the interest on the Bonds to become
includable in the gross income of the Owners of the Bonds for federal or
state income tax purposes except in the event such Owner is a substantial
user or a related person thereto within the meaning of Section 144(a)(3) or
Section 147(a) of the Code.
(c) Subject to the provisions of paragraph (b), the Borrower may
not assign or transfer the whole or any part of this Agreement without the
prior express written consent of the Authority and the Trustee. Any
assignment of this Agreement by the Borrower without the prior express
written consent of the Authority and the Trustee shall be null and void.
(d) The Borrower shall not sell or otherwise dispose of any
possessory interest in whole or in part of the Project without complying with
the provisions of paragraph (b), except in the ordinary course of its
business.
(e) The Borrower shall not lease, sublease or otherwise dispose of
any possessory interest in whole or in part of the Project without the prior
express written consent of the Authority. In the event that the Borrower
proposes to lease or sublease the Project or any portion thereof to any
tenant other than the Borrower and the proposed lessee shall submit to the
Authority and, if required under the terms of the Reimbursement Agreement,
the Bank, an application for project occupants in the form currently in use
by the Authority and a copy of the proposed lease. The Authority may review
the proposed lease and application to determine if it tends to further the
public purposes for which the Authority was created, and if the Authority
determines that the lease would not promote these purposes, it may disapprove
the proposed lease.
In making the determination described above, the Authority may
consider, among other criteria, (i) if the proposed occupancy complies with
the conditions specified in the Act for the Authority's assistance to
"projects" as defined in the Act; (ii) if the proposed occupancy is
consistent with the provisions respecting tax-exempt qualified small issue
bond financings set forth in Section 144 of the Code; and (iii) if the
proposed lease will result in the loss of employment for a substantial number
of Pennsylvania workers by reason of relocating the business of the lessee
from one part of the Commonwealth to another or for any other reason.
If the Authority fails to deliver notice of either approval or
disapproval of a proposed lease within twenty (20) days from the day the
Authority receives a proposal for the lease, including all of the information
identified above and such other information as the Authority may reasonably
require, the proposed lease shall be deemed to be approved by the Authority.
The Borrower shall promptly send a copy of each executed lease to the
Authority.
Section 4.05 Compliance with Laws. With respect to the Project
Facilities and any additions, alterations or improvements thereto, the
Borrower will at all times comply with all applicable requirements of
federal, state and local laws and with all applicable lawful requirements of
any agency, board, or commission created under laws of the State or of any
other duly constituted public authority, and will use, and permit the use of
the Project Facilities only for such purposes as are lawful under the Act;
provided, however, that the Borrower shall be deemed in compliance with this
Section 4.05 so long as it is contesting in good faith any such requirement
by appropriate legal proceedings.
Section 4.06 Notice of Bankruptcy Case Commencement. The Borrower
covenants and agrees that it shall immediately notify in writing the
Authority, the Bank, the Trustee and the Placement Agent of the commencement
of any case by or against it under the Bankruptcy Code.
Section 4.07 Substitute Letter of Credit. The Borrower may provide
for the delivery to the Trustee of a Substitute Letter of Credit upon written
notice to the Trustee the Tender Agent, the Remarketing Agent, the Placement
Agent and the Authority. Any Substitute Letter of Credit shall be delivered
to the Trustee not later than the thirtieth (30th) Business Day prior to the
expiration of the Letter of Credit it is being issued to replace on or before
the date of the delivery of any Substitute Letter of Credit to the Trustee,
as a condition to the acceptance of any Substitute Letter of Credit by the
Trustee, the Borrower shall furnish to the Issuer, the Trustee and the
Remarketing Agent (i) written evidence that the issuer of such Substitute
Letter of Credit is a commercial bank organized and doing business in the
United States or a branch or agency of a foreign commercial bank located and
doing business in the United States and subject to regulation by state or
federal banking regulatory authorities and that it has been assigned the same
rating as the Letter of Credit in effect prior to the substitution of the
Substitute Letter of Credit, if the Letter of Credit is then rated (ii) an
opinion of nationally recognized bond counsel stating that the delivery of
such Substitute Letter of Credit is authorized under this Agreement and the
Indenture and the Act and complies with the terms hereof and that the
delivery of such Substitute Letter of Credit does not adversely affect the
exclusion from gross income of the interest on the Bonds for federal income
tax purposes, (iii) an opinion of Counsel satisfactory to the Trustee, the
Issuer, the Borrower and the Remarketing Agent to the effect that the
Substitute Letter of Credit is the legal, valid and binding obligation of the
issuer (or, in the case of a branch or agency of a foreign commercial bank,
the branch or agency) issuing the same, enforceable in accordance with its
terms, that payments of principal, premium, if any (if such Substitute Letter
of Credit secures the payment of premium), or Purchase Price of or interest
on the Bonds from the proceeds of a drawing on the Substitute Letter of
Credit will not constitute avoidable preferences under the Bankruptcy Code or
other applicable laws and regulations and that it is not necessary to
register the Substitute Letter of Credit under the Securities Act of 1933, as
amended, or to qualify an indenture with respect thereto under the Trust
Indenture Act of 1939, as amended and (iv) written evidence from each Rating
Agency then rating the Bonds (if any), if the Bonds are then rated, that the
rating on the Bonds will not be reduced or withdrawn as a result of the
acceptance of the Substitute Letter of Credit. In the case of a Substitute
Letter of Credit issued by a branch or agency of a foreign commercial bank
there shall also be delivered an opinion of counsel satisfactory to the
Trustee, the Authority, the Borrower and the Remarketing Agent and licensed
to practice law in the jurisdiction in which the head office of such bank is
located, to the effect that the Substitute Letter of Credit is the legal,
valid and binding obligation of such bank enforceable in accordance with its
terms. The Trustee shall accept any such Substitute Letter of Credit only in
accordance with the terms, and upon the satisfaction of the conditions,
contained in this section and any other provisions applicable to acceptance
of a Substitute Letter of Credit under this Agreement and the Indenture.
ARTICLE V
THE PROJECT FACILITIES
Section 5.01 Prohibited Uses. The Borrower covenants and agrees
that it will not use or permit the use by any Person of any of the funds
provided by the Authority hereunder or any other of its funds, directly or
indirectly, or direct the Trustee to invest any funds held by it under the
Indenture or this Agreement, in such manner as would, or enter into, or allow
any "related person" (as defined in Section 144(a)(3) of the Code) to enter
into, any arrangement, formal or informal, that would, or take or omit to
take any other action that would, cause any Bond to be an "arbitrage bond"
within the meaning of Section 148(a) of the Code. The Borrower acknowledges
having read Sections 6.13 and 7.06 of the Indenture and agrees to perform all
duties imposed upon it by such Sections and by the Tax Compliance Agreement.
Insofar as said Sections and the Tax Compliance Agreement impose duties and
responsibilities on the Borrower, they are specifically incorporated herein
by reference.
ARTICLE VI
INSURANCE; DESTRUCTION, DAMAGE, EMINENT DOMAIN
Section 6.01 Insurance to be Maintained. The Borrower covenants to
provide and maintain continuously unless otherwise herein provided, adequate
insurance on the Project Facilities as shall be mutually agreed upon by the
Bank and the Borrower. Each insurance policy with respect to the Project
Facilities shall name the Bank and the Authority as additional insureds.
Section 6.02 Destruction, Damage and Eminent Domain. If the Project
Facilities shall be wholly or partially destroyed or damaged by fire or other
casualty covered by insurance, or shall be wholly or partially condemned,
taken or injured by any Person, including any Person possessing the right to
exercise the power of or a power in the nature of eminent domain or shall be
transferred to such a Person by way of a conveyance in lieu of the exercise
of such a power by such a Person, the Borrower covenants that it will take
all actions and will do all things which may be necessary to enable recovery
to be made upon such policies of insurance or on account of such taking,
condemnation, conveyance, damage or injury. The Borrower is authorized, in
its own name, as trustee of an express trust, to demand, collect, sue, settle
claims, receipt and release moneys which may be due and payable under
policies of insurance covering such damage or destruction or on account of
such condemnation, damage or injury. Any moneys recovered (i) on policies of
insurance required to be maintained hereunder or (ii) as a result of any
taking, condemnation, conveyance, damage or injury shall be deposited in the
Project Fund held by the Trustee under the Indenture and shall be applied in
accordance with the provisions of Section 6.04 hereof; provided, however,
that as long as the Bank is not in default under the terms of the Letter of
Credit, the applicable provisions of the Reimbursement Agreement shall
control the disposition of casualty insurance and condemnation award
proceeds.
Any appraisement or adjustment of loss or damage and any
settlement or payment therefore, shall be agreed upon by the Borrower, the
Bank (as long as the Bank is not in default under the Letter of Credit) and
the appropriate insurer or condemnor or Person, and shall be evidenced to the
Bank by the certificate and approvals set forth in the Indenture. The Bank
may rely conclusively upon such certificates.
Section 6.03 Notice of Property Loss. After the occurrence of loss
or damage to, or after receipt of notice of condemnation of, the Project
Facilities, the Borrower shall within five (5) Business Days thereof notify
the Authority, the Trustee and the Bank, in writing, of such damage.
Section 6.04 Disposition of Casualty Insurance and Condemnation
Award Proceeds. If the Bank is in default under the terms of the Letter of
Credit, and as long as the Borrower is not in default under the terms of this
Agreement, the Borrower may elect, in its discretion, whether to apply the
proceeds of any casualty insurance coverage and/or condemnation awards to (i)
the repair, reconstruction or replacement of damaged, destroyed or injured
property comprising the Project Facilities or (ii) the redemption of Bonds
pursuant to the applicable provisions of the Indenture. Absent timely
direction from the Borrower as to the application of any casualty insurance
coverage and/or condemnation awards or if the Borrower shall be in default
under the terms of this Agreement, the proceeds thereof shall be applied to
the extraordinary redemption of the Bonds at par plus accrued interest
through the date of redemption. For purposes of the preceding sentence,
"timely direction" shall mean thirty (30) days after the Borrower has agreed,
in connection with any damage to or condemnation of the Project Facilities,
upon the settlement or payment with respect to any appraisement or adjustment
of loss or damage, as appropriate.
ARTICLE VII
ADDITIONAL COVENANTS OF THE BORROWER
The Borrower makes the following additional representations and
covenants:
Section 7.01 Compliance with Laws. The Borrower covenants that all
actions heretofore and hereafter taken by the Borrower or by the Authority
upon the recommendation or request of any officer of the Borrower to acquire
and carry out the Project have been and will be in full compliance with all
pertinent laws, ordinances, rules, regulations and orders applicable to the
Borrower. In connection with the operation, maintenance, repair and
replacement of the Project Facilities, the Borrower covenants that it shall
comply with all applicable ordinances, laws, rules, regulations and orders of
the government of the United States of America, the State, the County of
Philadelphia, and any other applicable government unit having jurisdiction
over it, and any requirement of any board of fire underwriters having
jurisdiction or of any insurance company writing insurance on the Project
Facilities; provided, however, that nothing herein shall prevent or prohibit
the Borrower from contesting in good faith and by appropriate proceedings the
legality or reasonableness of any such standards, or the imposition of any
such standards upon it with respect to the Project Facilities so long as the
operation of the Project Facilities or the receipt of income therefrom would
not be adversely affected by reason thereof. The Borrower further covenants
and represents that the Project Facilities are in compliance with all
applicable laws and ordinances. The Borrower covenants that it shall not take
any action or request the Authority to execute any release which would cause
the Project Facilities to be in violation of such laws or ordinances or such
that a conveyance of the Project Facilities or of any portion of the Project
Facilities would create a violation of such laws and ordinances. The Borrower
acknowledges that any review by the Authority or Counsel to the Authority of
any action heretofore or hereafter taken by the Borrower has been or will be
solely for the protection of the Authority. Such reviews shall not prevent
the Authority from enforcing any of the covenants made by the Borrower.
Section 7.02 Power to Perform Obligations.
(a) The Borrower covenants and represents that it has full power
and legal right to enter into this Agreement and perform its obligations
hereunder. The making and performance of the Agreement by the Borrower has
been duly authorized by all necessary action and will not conflict with or
constitute a breach of or default under its Articles of Incorporation or
By-Laws, or any bond, contract, indenture, agreement or any other instrument
by which the Borrower or any of its properties is or may be bound.
(b) The Borrower covenants and agrees that throughout the term of
this Agreement it shall not take any action or permit any action to be taken
on its behalf, or cause or permit any circumstances within its control to
arise or continue, if such action or circumstances would cause the interest
paid by the Authority on the Bonds to be subject to federal income tax in the
hands of the Owners thereof.
(c) The Borrower is duly qualified to do business in the State,
has the power and authority to own its properties and assets and to carry on
its business as now being conducted.
(d) The execution, delivery and performance by the Borrower of
this Agreement and other instruments required hereunder:
(i) do not and will not in any material respect conflict with
or violate any provision of law, rule or regulation, any order of any court
or other agency of government;
(ii) do not and will not result in the creation or imposition
of any lien, charge or encumbrance of any nature, other than the liens
created by this Agreement, the Indenture and all documents and instruments
executed in connection herewith or therewith.
Section 7.03 Inspection. The Borrower covenants that the Authority,
by its duly authorized representatives, at reasonable times and with
reasonable notice, for purposes of determining compliance with the Agreement,
may inspect any part of the Project Facilities.
Section 7.04 Additional Information. The Borrower agrees, whenever
requested by the Authority, to provide and certify or cause to be provided
and certified such information concerning the Project Facilities, to enable
the Authority to make any reports or supply any information required by the
Indenture, law, governmental regulation or otherwise.
Section 7.05 Tax-Exemption. The Borrower covenants and agrees
that it will not take any action or permit any action to be taken on its
behalf, or cause or permit any circumstances within its control to arise, if
such action or circumstances would cause the interest paid on the Bonds to be
includible in the gross income of the Bondholders under the Indenture.
Section 7.06 Hazardous Substances.
(a) The Borrower shall comply with all applicable federal, state
and local laws, ordinances, rules and regulations with respect to Hazardous
Substances (as defined in subsection (b) below), and shall keep the Property
free and clear of any liens imposed pursuant to such laws, ordinances, rules
and regulations. In the event that the Borrower receives any notice from any
governmental authority with regard to Hazardous Substances on, from or
affecting the Premises, the Borrower shall (i) immediately notify the Bank
and the Authority and any other Person, governmental or quasigovernmental
authority that it is required to notify pursuant to any applicable law at
such time as it is aware of a release or threatened released of a Hazardous
Substance on, from or affecting the Premises, (ii) immediately notify the
Bank and the Authority at such time as an environmental investigation or
clean-up proceeding is instituted by any Person in connection with the
Premises, (iii) fully comply with and assist any such environmental
investigation and clean-up proceeding, (iv) promptly execute and complete any
remedial actions necessary to ensure that no environmental liens or
encumbrances are levied against or exist with respect to the Premises, and
(v) promptly, upon the written request of the Bank or the Authority provide
the Bank and the Authority, from time to time, with an environmental site
assessment or report, in form and substance satisfactory to Bank, and (vi)
provide the Bank and the Authority with copies of all notices received by the
Borrower from any governmental authority or other Person with regard to
Hazardous Substances on, from or in any way affecting the Premises. The
Borrower shall conduct and complete all investigations, studies, sampling,
and testing, and all remedial, removal, and other actions necessary to clean
up and remove all Hazardous Substances on, from or affecting the Premises in
accordance with all applicable federal, state and local laws, ordinances,
rules, regulations, and policies and to the satisfaction of the Bank.
(b) As used herein, the term "Hazardous Substances" shall include,
without limitation, any flammable explosives, radioactive materials,
hazardous materials, hazardous wastes, hazardous or toxic substances,
hazardous or toxic pollutant, or related materials, asbestos or any material
containing asbestos, or petroleum, petroleum by-products or materials
containing petroleum, or any other substance, mixture, waste, compound,
material, element, product, or matter as defined by any federal, state or
local environmental law, ordinance, rule, or regulation including, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended (42 U.S.C. ▇▇.▇▇. 9601 et seq.), the
Hazardous Materials Transportation Act, as amended (49 U.S.C. ▇▇.▇▇. 1801 et
seq.), the Resource Conservation and Recovery Act, amended (42 U.S.C. ▇▇.▇▇.
9601 et seq.), the Clean Water Act, as amended (33 U.S.C. ▇▇.▇▇. 1251 et
seq.), and the Clean Air Act, as amended (42 U.S.C. ▇▇.▇▇. 7401 et seq.), and
in the regulations adopted and publications promulgated pursuant thereto at
any time.
Section 7.07 No Material Proceedings Affecting Borrower. There
is no action, suit or proceeding at law or in equity or by or before any
governmental instrumentality or other agency now pending or, to the knowledge
of the Borrower, threatened against or affecting it or any of its properties
or rights which, if adversely determined, would (i) materially affect the
transactions contemplated hereby, (ii) affect the validity or enforceability
of this Agreement, the Indenture, the other applicable Bond Documents and all
documents and instruments executed in connection herewith or therewith, (iii)
affect the ability of the Borrower to perform its obligations under this
Agreement, the Indenture, the other applicable Bond Documents and all
documents and instruments executed in connection herewith or therewith, (iv)
materially impair the value of the Project, (v) materially impair the
Borrower's right to carry on its business substantially as now conducted, or
(vi) have a material adverse effect on the Borrower's financial condition.
Section 7.08 Tax Filings. The Borrower has filed or caused to
be filed all federal, state and local tax returns which are required to be
filed, and has paid or caused to be paid all taxes as shown on said returns
or on any assessment it has received, to the extent that such taxes have
become due, except such taxes are as being contested by the Borrower in
appropriate proceedings.
Section 7.09 No Existing Defaults. The Borrower is not in
default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any material agreement or
instrument to which it is a party or by which it is bound.
Section 7.10 No Material Misstatements or Omissions. The
Placement Memorandum, the Indenture, this Agreement, the other applicable
Bond Documents and all other documents, certificates, or statements furnished
to the Trustee, the Authority or the Bank by the Borrower do not contain any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained herein and therein
regarding the Borrower not misleading or incomplete. It is specifically
represented that the Borrower is neither involved in any litigation required
to be disclosed in the Placement Memorandum nor is the subject of any
investigation or administrative proceeding except as disclosed in the
Placement Memorandum. It is specifically understood by the Borrower that all
such statements, representations and warranties shall be deemed to have been
relied upon by the Authority as an inducement to make the Loan and by the
Bank as an inducement to post the Letter of Credit and that if any such
statements, representations and warranties were false at the time they were
made, the Authority or the Bank may, in its sole discretion, consider any
such misrepresentation or breach of warranty an Event of Default under
Section 8.01 hereof and exercise the remedies provided for in this Agreement.
Section 7.11 Inducement to Borrower. Financial assistance
provided by the Authority is an important inducement to the Borrower to
locate or retain the Project within the State.
Section 7.12 Borrower's Annual Reporting Obligations. On each
anniversary of the Issue Date of the Bonds, the Borrower shall furnish or
cause to be furnished to the Authority, the Bank and the Trustee the
following:
(a) copies of a no default certificate of an Authorized
Representative of the Borrower, to the effect that he is not aware of any
condition, event or act which constitutes an uncured Event of Default; and
(b) a written description of the present use of the Project and a
description of any anticipated material change in the use of the Project or
in the number of employees employed at the Project.
The Borrower shall also furnish annually to the Authority an
employment report on a form to be supplied by the Authority.
Section 7.13 Cooperation with Trustee. The Borrower covenants
and agrees that it will not interfere with the exercise of the power and
authority granted to the Trustee in the Indenture. The Borrower further
agrees to aid in furnishing to the Authority or the Trustee any documents,
financial reports, certificates or opinions that may be required under the
Indenture or this Agreement or requested by the Trustee and to comply with
the provisions thereof or hereof to the extent applicable to the Borrower.
Section 7.14 Rebate Fund. The Borrower hereby agrees to
calculate the amount to be deposited in the Rebate Fund and the amount to be
rebated to the United States of America pursuant to Section 148(f) of the
Code in any manner not inconsistent with its arbitrage covenants set forth in
the Tax Compliance Agreement and in this Agreement. Such calculation shall
give regard to all regulations applicable to such Section 148(f) including
any temporary regulations heretofore or hereafter released.
Section 7.15 Nondiscrimination. During the term of this
Agreement, the Borrower agrees, as to itself and as to each occupant of the
Project Facilities controlling, controlled by or under common control with
the Borrower (each a "Contractor") as follows:
(a) Contractor shall not discriminate against any employee,
applicant for employment, independent contractor or any other Person because
of race, color, religious creed, handicap, ancestry, national origin, age or
sex. Contractor shall take affirmative action to insure that applicants are
employed, and that employees or agents are treated during employment, without
regard to their race, color, religious creed, handicap, ancestry, national
origin, age or sex. Such affirmative action shall include, but is not limited
to: employment, upgrading, demotion or transfer, recruitment or recruitment
advertising; layoff or termination; rates of pay or other forms of
compensation; and selection for training. Contractor shall post in
conspicuous places, available to employees, agents, applicants for employment
and other persons, a notice to be provided by the contracting agency setting
forth the provisions of this Section 7.15.
(b) Contractor shall in advertisements or requests for employment
placed by it or on its behalf, state that all qualified applicants will
receive consideration for employment without regard to race, color, religious
creed, handicap, ancestry, national origin, age or sex.
(c) Contractor shall send each labor union or workers'
representative with which it has a collective bargaining agreement or other
contract or understanding, a notice advising said labor union or workers'
representative of its commitment to this nondiscrimination clause. Similar
notice shall be sent to every other source of recruitment regularly utilized
by Contractor.
(d) It shall be no defense to a finding of noncompliance with this
Section 7.15 that Contractor had delegated some of its employment practices
to any union, training program or other source of recruitment which prevents
it from meeting its obligations. However, if the evidence indicates that
Contractor was not on notice of the third-party discrimination or made a good
faith effort to correct it, such factor shall be considered in mitigation in
determining appropriate sanctions.
(e) Where the practices of a union or of any training program or
other source of recruitment will result in the exclusion of minority group
persons, so that Contractor will be unable to meet its obligations under this
Section 7.15, Contractor shall then employ and fill vacancies through other
nondiscriminatory employment procedures.
(f) Contractor shall comply with all state and federal laws
prohibiting discrimination in hiring or employment opportunities.
Noncompliance with this Section 7.15 will constitute an Event of Default
under this Agreement.
(g) Contractor shall furnish all necessary employment documents
and records to, and permit access to its books, records and accounts by, the
Authority for purposes of investigation to ascertain compliance with the
provisions of this Section 7.15. If Contractor does not possess documents or
records reflecting the necessary information requested, it shall furnish such
information on reporting forms supplied by the Authority.
(h) Contractor shall actively recruit minority subcontractors and
women subcontractors or subcontractors with substantial minority or women
representation among their employees.
(i) Contractor shall include the provisions of this Section 7.15
in every subcontract, so that such provisions will be binding upon each
subcontractor.
(j) Contractor obligations under this Section 7.15 are limited to
Contractor's facilities within Pennsylvania or, where the contract is for
purchase of goods manufactured outside of Pennsylvania, the facilities at
which such goods are actually produced.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
Section 8.01 Events of Default. Each of the following events shall
constitute an "Event of Default" under this Agreement:
(a) if the Borrower fails to make any payment required by Sections
3.01, 3.03 or 3.05 hereof; or
(b) if the Borrower fails to make any other payment required
hereby and such failure continues for ten (10) days after the Authority or
the Trustee gives notice to the Borrower that such payment is due and unpaid;
or
(c) if the Borrower fails to perform any of its other covenants or
conditions or fails to perform any of its obligations hereunder and such
failure continues for thirty (30) days after the Authority or the Trustee
gives the Borrower notice thereof; provided, however, that if such
performance requires work to be done, actions to be taken, or conditions to
be remedied, which by their nature cannot reasonably be done, taken or
remedied, as the case may be, within such thirty (30) day period, no Event of
Default shall be deemed to have occurred or to exist if, and so long as, the
Borrower shall commence such performance within such thirty (30) day period
and shall diligently and continuously proceed to completion; or
(d) if the Borrower commits any act of bankruptcy under the
Bankruptcy Code or any State bankruptcy law or any law providing for
reorganization or relief for debtors or files or has filed against it a
petition in bankruptcy or for arrangement or reorganization pursuant to the
Bankruptcy Code or other similar law, federal or state, or if, by the decree
of a court of competent jurisdiction, is adjudicated a bankrupt or declared
insolvent, or makes an assignment for the benefit of creditors, or admits in
writing its inability to pay its debts generally when or as they become due,
or consents to the appointment of a trustee, receiver or to the liquidation
of all or any part of the Project Facilities, provided that, if any such
proceeding is commenced by a person other than the Borrower, there shall be
no Event of Default if such proceedings are dismissed within sixty (60) days
of the filings of initial pleadings therein; or
(e) the declaration by the Bank of an Event of Default under the
provisions of the Reimbursement Agreement.
Section 8.02 Acceleration. Subject to the provisions of this
Agreement, upon the occurrence of any "Event of Default" by the Authority
under the Indenture caused or resulting directly or indirectly by the
occurrence of an Event of Default by the Borrower hereunder, the Trustee
shall, pursuant to Section 8.02 of the Indenture (with the prior written
consent of the Bank as long as the Bank is not in default under the Letter of
Credit), declare the principal of the then Outstanding Bonds and all accrued
interest immediately due and payable. Upon such declaration by the Trustee,
the Authority shall have the right to terminate this Agreement and, upon such
termination, there shall become immediately due and payable hereunder as then
current damages of the Authority under this Agreement, an amount equal (i) to
all amounts then due and payable by the Authority to the Trustee under
Section 8.02 of the Indenture and (ii) all other amounts due and owing as
loan payments hereunder. Until such amount is paid by the Borrower, at the
time or times and in the manner required to permit the Authority to meet its
obligations under the Indenture, the Authority shall continue to have all of
the rights, powers and remedies herein (notwithstanding the termination
hereof), and, for such time as may be necessary to enable the Authority to
satisfy in full its obligations under the Indenture, the term of this
Agreement shall, at the election of the Authority, be extended at the will of
the Authority, and the Borrower's obligations hereunder shall continue in
full force and effect.
Section 8.03 Payment of Loan Payments on Default; Suit Therefor.
(a) The Borrower covenants that, if default shall be made in the
payment of any sum payable by the Borrower under this Agreement as and when
the same shall become due and payable, whether at maturity or by acceleration
or otherwise, then, upon demand of the Authority or its assignee, the
Borrower will pay to the Authority or its assignee the whole amount of the
loan payments that then shall have become due and payable hereunder and to
the extent such loan payments represent payments due on the Bonds, such
payments shall be applied to the payment of the Bonds in accordance with the
terms of the Indenture; and, in addition thereto, such further amount as
shall be sufficient to pay the costs and expenses of collection, including
reasonable compensation based upon actual time expended by the Authority and
its assignee and their respective agents, attorneys and counsel, and any
expenses or liabilities incurred by the Authority or its assignee (other than
through the Authority's or its assignee's own gross negligence or bad faith).
In case the Borrower shall fail forthwith to pay such amounts upon such
demand, the Authority or its assignee shall be entitled and empowered to
institute any actions or proceedings at law or in equity for the collection
of the sums so due and unpaid, and may prosecute any such action or
proceeding to judgment or final decree, and may enforce any such judgment or
final decree against the Borrower and collect in the manner provided by law
out of the property of the Borrower the money adjudged or decreed to be
payable.
(b) In case there shall be pending proceedings in bankruptcy or
for the reorganization of the Borrower under the Bankruptcy Code or any other
applicable law, or in case a receiver or trustee shall have been appointed
for the benefit of the creditors or the property of the Borrower, or in the
case of any other similar judicial proceedings relative to the Borrower, the
Authority or its assignee shall be entitled and empowered, by intervention in
such proceedings or otherwise, to file and prove a claim or claims for the
whole amount of the loan payments, including interest owing and unpaid in
respect thereof, and, in case of any judicial proceedings, to file such
proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Authority or its assignee
allowed, and to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute the same after the
deduction of its charges and expenses; and any receiver, assignee or trustee
in bankruptcy or reorganization is hereby authorized to make such payments to
the Authority or its assignee, and to pay to the Authority or its assignee
any amount due it for compensation based upon actual time expended and
expenses, including counsel fees incurred by it up to the date of such
distribution.
Section 8.04 Other Remedies. Whenever the Borrower is in
default hereunder the Authority or its assignee shall be entitled to any one
or more of the following remedies:
(a) Upon the written consent of the Bank (as long as the Bank is
not in default under the Letter of Credit), the Authority or its assignee may
terminate this Agreement and the Borrower shall remain liable for any
deficiency in its obligations under Sections 3.01, 3.04 and 3.05 hereof after
the application of such proceeds;
(b) The Authority or its assignee shall be entitled to all the
remedies under the Pennsylvania Uniform Commercial Code, 13 P.S. ss.1001 et
seq., as secured party in respect of the property subject to the security
interests created hereunder, including without limitation the right to take
possession of such property and sell the same at private or public sale, the
proceeds of such sale to be applied as provided in subsection (e) of this
Section 8.04;
(c) Any money received by the Authority under this Section 8.04
shall be paid to its assignee and applied pursuant to the provisions of
Section 8.10 of the Indenture; or
(d) The Authority or its assignee may pursue whatever remedies may
be available at law or in equity as may appear necessary or desirable to
collect the purchase price and any other amounts payable by the Borrower
hereunder, or to enforce performance and observance of any obligation,
agreement or covenant of the Borrower under this Agreement.
No action taken pursuant to this Section 8.04 (including
termination of this Agreement) shall relieve the Borrower of the Borrower's
obligations pursuant to Sections 3.01, 3.04, 3.05 and 8.03 hereof, all of
which shall survive any such action.
Section 8.05 Waiver. The Borrower hereby waives and relinquishes
the benefits of any present or future law exempting the Project Facilities
from attachment, levy or sale on execution, or any part of the proceeds
arising from the sale thereof, and all benefit of stay of execution or other
process.
Section 8.06 Cumulative Rights. No remedy conferred upon or
reserved to the Authority or its assignee by this Agreement is intended to be
exclusive of any other available remedy or remedies, but each and every such
remedy shall be cumulative and shall be in addition to every other remedy
given under this Agreement or now or hereafter existing at law or in equity
or by statute. No waiver by the Authority or its assignee of any breach by
the Borrower of any of its obligations, agreements or covenants hereunder
shall be a waiver of any subsequent breach, and no delay or omission to
exercise any right or power 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 8.07 No Exercise of Remedies Without Consent of Bank.
Notwithstanding anything to the contrary contained in this Agreement, neither
the Authority nor any assignee of the Authority under this Agreement shall
exercise or pursue remedies or declare an Event of Default or cause an
acceleration of the obligations contained in this Agreement without the prior
written consent of the Bank as long as the Bank shall not be in default of
its obligations under the Letter of Credit or a voluntary or involuntary case
has not been commenced by the filing of a petition under the United States
Bankruptcy Code or any other law relating to insolvency, bankruptcy,
reorganization, winding-up or composition or adjustment of debts by or
against the Bank.
Section 8.08 Determination of Taxability Not a Default.
Notwithstanding anything to the contrary contained in this Agreement, in the
event of a breach or inaccuracy of any applicable statutory or regulatory
requirement or of a covenant or representation of the Borrower relating to
the exclusion from gross income of interest on the Bonds for purposes of
federal income taxation, such breach or inaccuracy shall not be considered an
Event of Default hereunder so long as the Borrower performs all of its
obligations arising out of the breach or inaccuracy including, without
limitation, the payment of all amounts due under Sections 3.01, 3.04 and 3.05
hereof if such breach or inaccuracy results in a Determination of Taxability
with respect to the Bonds.
ARTICLE IX
OPTIONS TO TERMINATE AGREEMENT
Section 9.01 Option to Terminate Upon Defeasance. The Borrower
shall have, and is hereby granted, the option to terminate its obligations
under this Agreement prior to full payment of the Bonds by providing for the
payment of all of the Outstanding Bonds in accordance with Article XI of the
Indenture.
Section 9.02 Option to Terminate Upon the Occurrence of Certain
Events. The Borrower shall have, and is hereby granted, the option to
terminate its obligations under this Agreement if any of the events set forth
below shall occur:
(a) The Project Facilities or any portion thereof shall have been
damaged or destroyed (1) to such extent that it cannot, in the Borrower's
judgment, be reasonably restored within a period of six (6) months to the
condition thereof immediately preceding such damage or destruction, or (2) to
such extent that the Borrower is thereby prevented, in the Borrower's
reasonable judgment, from carrying on its normal operation of the Project
Facilities for a period of six (6) months or more;
(b) Title to, or the temporary use for a period of six (6) months
or more of, all or substantially all of the Project Facilities, or such part
thereof as shall materially interfere, in the Borrower's reasonable judgment,
with the operation of the Project Facilities for the purpose for which the
Project Facilities are designed, shall have been taken under the exercise of
the power of eminent domain by any governmental body or by any Person, firm
or corporation acting under governmental authority (including such a taking
or takings as results in the Borrower being thereby prevented from carrying
on its normal operation of the Project Facilities for a period of six (6)
months or more);
(c) Changes which the Borrower cannot reasonably control or
overcome in the economic availability of materials, supplies, labor,
equipment and other properties and things necessary for the efficient
operation of the Project Facilities for the purposes contemplated by this
Agreement, shall have occurred, or technological or other changes shall have
occurred which in the judgment of the Borrower render the continued operation
of the Project Facilities uneconomical for such purpose; or
(d) As a result of any changes in the Constitution of the
Commonwealth of Pennsylvania or the Constitution of the United States of
America or of legislative or administrative action (whether state or federal)
or by final decree, judgment or order of any court or administrative body
(whether state or federal) entered after the contest thereof by the Borrower
in good faith, this Agreement shall have become void and unenforceable or
impossible of performance in accordance with the intent and purposes of the
parties as expressed in this Agreement, or unreasonable burdens or excessive
liabilities shall have been imposed on the Borrower in respect to the Project
Facilities, including, without limitation, federal, state or other ad
valorem, property, income, or other taxes not being imposed on the date of
this Agreement.
To exercise such option, the Borrower shall within ninety (90)
days following the event authorizing such termination, give written notice to
the Authority and the Trustee and shall specify therein the date of
redemption of Bonds pursuant to Section 4.01 of the Indenture, which date
shall be the next interest payment date in respect of the Bonds for which the
required notice of redemption can practicably be given. In accordance with
the terms of the Indenture, the Borrower shall make arrangements for the
Trustee to give the required notice of redemption. Payment of the redemption
price of Bonds redeemed pursuant to this Section 9.02 will be made in
accordance with the terms of the Indenture.
Anything contained in this Agreement to the contrary
notwithstanding, the Bank shall have the right (as long as the Bank shall not
be in default under the terms of the Letter of Credit) to cause the Borrower
to terminate its obligations under this Agreement, in accordance with the
provisions of this Section 9.02 by so notifying the Borrower in writing, if
as a result of any changes in the Constitution of the Commonwealth of
Pennsylvania or the Constitution of the United States of America or as a
result of a legislative or administrative action (whether state or federal)
or final decree, judgment or order of any court or administrative body
(whether state or federal) entered after the contest thereof by the Borrower
in good faith, this Agreement shall have become void and unenforceable or
impossible of performance, in accordance with the intent and purposes of the
parties as expressed in this Agreement.
ARTICLE X
MISCELLANEOUS
Section 10.01 Approval of Indenture. The Borrower acknowledges
that it has received executed copies of the Indenture and a copy of the
Letter of Credit and that it is familiar with their provisions, and agrees
that it will take all such actions as are required or contemplated of it
under the Indenture to preserve and protect the rights of the Trustee
thereunder and that it will not take any action which would cause a default
thereunder. It is agreed by the Borrower and the Authority that any
redemption of the Bonds prior to maturity shall be effected as provided in
the Indenture.
Section 10.02 Taxes and Insurance; Rights of Authority to Pay.
If the Borrower, at any time, fails to pay any taxes or other impositions
payable by it in accordance with Section 3.04 hereof, or to take out, pay
for, maintain or deliver any of the insurance policies provided for in
Article VI, or shall fail, within the time provided for in Article VIII after
the notice therein specified of any Event of Default, as therein defined, has
been given thereunder, to make any other payment or perform any other act on
its part to be made or performed, then the Authority may, but shall not be
obligated so to do, and without further notice to or demand upon the Borrower
and without waiving or releasing the Borrower from any of its obligations
under the Agreement, (a) pay any taxes or other impositions payable by the
Borrower in accordance with Section 3.04 hereof, (b) take out, pay for and
maintain any of the insurance policies provided for in Article VI hereof, or
(c) make any other payment or perform any other act on the Borrower's part to
be made or performed as provided in the Agreement. All sums so paid by the
Authority and all necessary incidental costs and expenses in connection with
the performance of any such act by the Authority shall, together with
interest thereon at the legal rate, be payable to the Authority, on demand,
or, at the option of the Authority, may be added to any installment of the
loan payments then due or thereafter becoming due under the Agreement, and
the Borrower covenants to pay any such sums.
Section 10.03 Illegal Provisions Disregarded. If any term or
provision hereof or the application thereof for any reason or circumstance
shall to any extent be held to be invalid or unenforceable, this instrument
shall be invalid or unenforceable only to the extent of such invalidity or
unenforceability and such invalidity or unenforceability shall not invalidate
the balance of such provision or the remaining terms or provisions of this
instrument or the application of such terms or provisions to persons other
than those as to which it has been held invalid or unenforceable; each term
and provision hereof shall be valid and enforceable to the fullest extent
permitted by law, and shall be liberally construed in favor of the Authority
or its assignee in order to effect the intent of this instrument.
Section 10.04 Limitation of Liability of the Authority. In the
event of any default by the Authority hereunder, and notwithstanding any
provision or obligation to the contrary hereinbefore or hereinafter set
forth, the liability of the Authority shall be limited to its interest in the
Project Facilities, the improvements thereon, the rents, issues and profits
therefrom, and the lien of any judgment shall be restricted thereto. The
Authority does not assume general liability nor specific liability for the
repayment of any mortgage or other loan, or for the costs, fees, penalties,
taxes, interest, commissions, charges, insurance or other payments therein
recited or therein set forth, or incurred in any way in connection therewith.
Section 10.05 No Recourse as to the Authority. Except as set
forth hereinabove as to the Authority, no recourse under or upon any
obligation, covenant or agreement contained herein or in any Bonds shall be
had against the Authority or any past, present or future member, officer,
employee or agent of the Authority under this Agreement or under any rule of
law, statute or constitutional provision, or by enforcement of any assessment
or by any legal or equitable proceeding or otherwise, it expressly being
agreed and understood that the obligations of the Authority hereunder, and
under the Bonds and elsewhere, are solely corporate obligations of the
Authority to the extent specifically limited in the Economic Development
Financing Law, being the Act of August 23, 1967, P.L. 251, as amended, 73
P.S. ss.371, et seq., and that no personal liability whatsoever shall attach
to or shall be incurred by such members, officers, employees or agents of the
Authority or of any successor of the Authority, or any of them, because of
such indebtedness or by reason of any obligation, covenant or agreement
contained herein, in the Bonds or implied therefrom. All such recourse or
liability is hereby expressly waived and released as a condition of and in
consideration for execution and delivery of this Agreement by the Authority.
In the event of entry of judgment against the Authority by virtue of the
power herein contained, the Authority shall mark the judgment index to the
effect that the judgment is limited as aforesaid.
Section 10.06 Reference to Statute or Regulation. A reference
herein to a statute or to a regulation issued by a governmental agency
includes the statute or regulation in force as of the date hereof, together
with all amendments and supplements thereto and any statute or regulation
substituted for such statute or regulation, unless the specific language or
the context of the reference herein clearly includes only the statute or
regulation in force as of the date hereof.
A reference herein to a governmental agency, department, board,
commission or other public body or to a public officer includes an entity or
officer which or who succeeds to substantially the same functions as those
performed by such public body or officer as of the date hereof, unless the
specific language or the context of the reference herein clearly includes
only such public body or public officer as of the date hereof.
Section 10.07 Notices. All notices required or authorized to be
given by the Borrower, the Authority or the Trustee under the Indenture or
pursuant to this Agreement shall be in writing and shall be sent by
registered or certified mail, postage prepaid, to the following addresses:
to the Authority to:
Philadelphia Authority for Industrial Development
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chairman
to the Borrower to:
Lannett Company, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Vice President-Finance
to the Trustee to:
First Union National Bank
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ - ▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Corporate Trust Department
to the Placement Agent:
First Union Capital Markets Corp.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Money Market Trading and Sales
to the Bank:
First Union National Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇, Vice President
or to such other addresses as may from time to time be furnished to the
parties, effective upon the receipt of notice thereof given as set forth
above.
Section 10.08 Applicable Law. This Agreement shall be deemed to
be a contract made in the Commonwealth of Pennsylvania and governed by the
laws of the Commonwealth of Pennsylvania.
Section 10.09 Amendments.
(a) This Agreement may not be amended except by an instrument in
writing signed by the parties and, if such amendment occurs after the
issuance of any of the Bonds, consented to by the Trustee and the Bank, so
long as the Bank is not in default under the Letter of Credit.
(b) Notwithstanding Section 10.09(a) hereof, this Agreement shall
be amended by such additions, deletions or modifications that may be
necessary in the opinion of nationally recognized bond counsel to assure
compliance with Section 144(a)(4) of the Code relating to qualified small
issue obligations, Section 147 of the Code relating to certain requirements
applicable to private activity bonds, Section 148(d)(3) of the Code relating
to the 150% limitation on investments or Section 148(f) of the Code relating
to the required rebate to the United States of "excess investment earnings"
(as such term is defined in the Code) or otherwise as may be necessary to
assure the exemptions from federal income taxation of the interest on the
Bonds. A copy of any such amendment shall be given to the Trustee and to the
Bank.
Section 10.10 Term of Agreement. Except as provided in Section
3.10 hereof, this Agreement and the respective obligations of the parties
hereto shall be in full force and effect from the date hereof until all
principal of, premium, if any, and interest on the Bonds shall have been paid
or provision for such payment shall have been made pursuant to the terms and
provisions of the Indenture.
Section 10.11 Amounts Remaining in Bond Fund. It is agreed by
the parties hereto that any amounts remaining in the Bond Fund established
under the Indenture upon expiration or sooner termination of this Agreement
after payment in full of the Bonds (or provision for payment thereof having
been made in accordance with the provisions of the Indenture) and of the
fees, charges and expenses of the Trustee and the Authority in accordance
with the Indenture, shall, to the extent of any unreimbursed draws under the
Letter of Credit, or any other obligations owing by the Borrower to the Bank
under the Reimbursement Agreement as certified to the Trustee by the Bank, be
paid to the Bank. Any remaining moneys shall belong to and be paid to the
Borrower by the Trustee as overpayments hereunder.
Section 10.12 Survival of Covenants, Conditions and
Representations. All covenants, conditions and representations of the
Borrower contained herein that, by nature, impliedly or expressly involve
performance in any particular manner after the termination of this Agreement
or that cannot be ascertained to have been performed until after termination
of this Agreement, shall survive said termination. Without intending to limit
the generality of the foregoing, the Borrower's covenant to indemnify the
Authority and the Trustee, as set forth in Section 3.10 hereof, shall survive
any termination of this Agreement.
Section 10.13 Headings. The captions or headings in this
Agreement are for convenience of reference only and shall not control or
affect the meaning or construction of any provision hereof.
Section 10.14 Multiple Counterparts. This Agreement may be
executed in multiple counterparts, each of which shall be regarded for all
purposes as an original and such counterparts shall constitute but one and
the same instrument.
Section 10.15 Consent. Whenever the consent of the Authority is
given pursuant to the terms of this Agreement, such consent shall create no
liability or responsibility upon the Authority, and whenever required, shall
not be unreasonably withheld.
IN WITNESS WHEREOF, the PHILADELPHIA AUTHORITY FOR INDUSTRIAL
DEVELOPMENT has caused this Loan Agreement to be executed in its name and on
its behalf by its Chairman and its official seal to be affixed hereunto and
attested by its Secretary or Assistant Secretary and LANNETT COMPANY, INC.
has caused this Agreement to be executed in its name and on its behalf by its
President and its corporate seal to be affixed hereunto and attested by its
Secretary or Assistant Secretary as of the day and year first above written.
ATTEST: PHILADELPHIA AUTHORITY FOR
INDUSTRIAL DEVELOPMENT
___________________________ By:__________________________________
(Assistant) Secretary Chairman
ATTEST: LANNETT COMPANY, INC.
___________________________ By:__________________________________
(Assistant) Secretary President
TRUST INDENTURE
Dated April 30, 1999
Between
PHILADELPHIA AUTHORITY FOR INDUSTRIAL DEVELOPMENT
and
FIRST UNION NATIONAL BANK,
as Trustee
$3,700,000 Tax-Exempt Variable Rate
Demand/Fixed Rate Revenue Bonds
(Lannett Company, Inc. Project)
Series of 1999
TABLE OF CONTENTS
Page
----
RECITALS 1
ARTICLE I - DEFINITIONS: CONTENT OF CERTIFICATES AND OPINIONS
SECTION 1.01 Definitions 6
SECTION 1.02 Content of Certificates and Opinions 17
SECTION 1.03 Interpretation 18
ARTICLE II - THE BONDS
SECTION 2.01 Authorization of Bonds 19
SECTION 2.02 Terms of Bonds; Interest on the Bonds 19
SECTION 2.03 Execution of Bonds 21
SECTION 2.04 Authentication 21
SECTION 2.05 Form of Bonds 22
SECTION 2.06 Transfer of Bonds 22
SECTION 2.07 Exchange of Bonds 22
SECTION 2.08 Bond Registrar 22
SECTION 2.09 Temporary Bonds 23
SECTION 2.10 Bond Mutilated, Lost, Destroyed or Stolen 23
SECTION 2.11 Cancellation and Destruction of Surrendered Bonds 23
SECTION 2.12 Acts of Bondholders; Evidence of Ownership 24
SECTION 2.13 CUSIP Number 24
SECTION 2.14 Book-Entry-Only System for the Bonds 24
ARTICLE III - ISSUANCE OF BONDS; APPLICATION OF PROCEEDS
SECTION 3.01 Issuance of the Bonds 26
SECTION 3.02 Validity of Bonds 26
SECTION 3.03 Disposition of Proceeds of the Bonds and Other Amounts 26
ARTICLE IV - REDEMPTION OF BONDS BEFORE MATURITY
SECTION 4.01 Extraordinary Redemption 27
SECTION 4.02 Optional Redemption 28
SECTION 4.03 Notice of Redemption 29
SECTION 4.04 Interest on Bonds Called for Redemption 29
SECTION 4.05 Cancellation 29
SECTION 4.06 Partial Redemption of Bonds 29
SECTION 4.07 Payment of Redemption Price with Available Moneys 30
ARTICLE V - CONVERSION OF INTEREST RATE; DEMAND PURCHASE OPTION
SECTION 5.01 Conversion of Interest Rate on Conversion Date 30
SECTION 5.02 Delivery of Bonds After Conversion Date 32
SECTION 5.03 Mandatory Tender Upon Substitution of Letter of Credit 32
SECTION 5.04 Demand Purchase Option 33
SECTION 5.05 Funds for Purchase of Bonds 34
SECTION 5.06 Delivery of Purchased Bonds 36
SECTION 5.07 Sale of Bonds by Remarketing Agent 36
SECTION 5.08 Delivery of Proceeds of Sale of Purchased Bonds 36
SECTION 5.09 Duties of Trustee and Tender Agent with Respect to Purchase
of Bonds 37
SECTION 5.10 No Purchase or Sales After Certain Defaults 37
ARTICLE VI - REVENUES AND FUNDS
Section 6.01 Creation of the Bond Fund 38
SECTION 6.02 Payments into the Bond Fund 38
SECTION 6.03 Use of Moneys in the Bond Fund 38
SECTION 6.04 Custody of Separate Trust Fund 39
SECTION 6.05 Project Fund 39
SECTION 6.06 Payments into the Project Fund, Disbursements 39
SECTION 6.07 Use of Money in the Project Fund Upon Default 39
SECTION 6.08 Use of Money in the Project Fund Upon Completion of the
Project 39
SECTION 6.09 Nonpresentment of Bonds 40
SECTION 6.10 Moneys to be Held in Trust 40
SECTION 6.11 Repayment to the Bank and the Borrower from the Bond
Fund, the Rebate Fund or the Project Fund 40
SECTION 6.12 Letter of Credit 41
SECTION 6.13 Rebate Fund 41
SECTION 6.14 Investment of Moneys in Funds 43
ARTICLE VII - PARTICULAR COVENANTS
SECTION 7.01 Punctual Payment 44
SECTION 7.02 Extension of Payment of Bonds 44
SECTION 7.03 Against Encumbrances 44
SECTION 7.04 Power to Issue Bonds and Make Pledge and Assignment 44
SECTION 7.05 Accounting Records and Financial Statements 45
SECTION 7.06 Tax Covenants 45
SECTION 7.07 Other Covenants 46
SECTION 7.08 Waiver of Laws 46
SECTION 7.09 Further Assurances 46
ARTICLE VIII - EVENTS OF DEFAULT AND REMEDIES OF BONDHOLDERS
SECTION 8.01 Events of Default 46
SECTION 8.02 Acceleration 47
SECTION 8.03 Other Remedies 49
SECTION 8.04 Legal Proceedings by Trustee 49
SECTION 8.05 Discontinuance of Proceedings by Trustee 50
SECTION 8.06 Bondholders May Direct Proceedings by Trustee 50
SECTION 8.07 Limitations on Actions by Bondholders 50
SECTION 8.08 Trustee May Enforce Rights Without Possession of Bonds 51
SECTION 8.09 Delays and Omissions Not to Impair Rights 51
SECTION 8.10 Application of Moneys in Event of Default 51
SECTION 8.11 Trustee and Bondholders Entitled to All Remedies Under Act;
Remedies Not Exclusive 52
SECTION 8.12 Trustee's Right to Receiver 52
SECTION 8.13 Subrogation Rights of Bank 52
SECTION 8.14 Waiver of Default 52
ARTICLE IX - THE TRUSTEE; THE TENDER AGENT; AND THE REMARKETING
AGENT
SECTION 9.01 Duties, Immunities and Liabilities of Trustee 52
SECTION 9.01A Compensation and Indemnity 54
SECTION 9.02 Merger or Consolidation 55
SECTION 9.03 Liability of Trustee 55
SECTION 9.04 Right of Trustee to Rely on Documents 56
SECTION 9.05 Preservation and Inspection of Documents 57
SECTION 9.06 Compensation 57
SECTION 9.07 The Tender Agent 57
SECTION 9.08 Qualification of Tender Agent 58
SECTION 9.09 Qualifications of Remarketing Agent; Resignation; Removal 58
SECTION 9.10 Construction of Ambiguous Provisions 58
ARTICLE X - MODIFICATION OR AMENDMENT OF THE INDENTURE
SECTION 10.01 Amendments Permitted 59
SECTION 10.02 Effect of Supplemental Indenture 59
SECTION 10.03 Trustee Authorized to Join in Amendments and Supplements;
Reliance on Counsel 59
ARTICLE XI - DEFEASANCE
SECTION 11.01 Discharge of Indenture 60
SECTION 11.02 Discharge of Liability on Bonds 60
SECTION 11.03 Deposit of Money or Securities with Trustee 61
SECTION 11.04 Payment of Bonds After Discharge of Indenture 61
ARTICLE XII - MISCELLANEOUS
SECTION 12.01 Liability of Authority Limited to Revenues 62
SECTION 12.02 Limitation of Liability of Directors, etc. of Authority 62
SECTION 12.03 Covenant Not to Sue 63
SECTION 12.04 Successor is Deemed Included in All References to Predecessor 63
SECTION 12.05 Limitation of Rights to Parties, Bank, Borrower and
Bondholders 63
SECTION 12.06 Waiver of Notice 63
SECTION 12.07 Severability of Invalid Provisions 63
SECTION 12.08 Notices 64
SECTION 12.09 Evidence of Rights of Bondholders 65
SECTION 12.10 Disqualified Bonds 66
SECTION 12.11 Money Held for Particular Bonds 66
SECTION 12.12 Funds 66
SECTION 12.13 Payments Due on Days other than Business Days 67
SECTION 12.14 Provisions Applicable After Conversion Date 67
SECTION 12.15 Execution in Several Counterparts 67
SECTION 12.16 Notices to Rating Agency 67
SECTION 12.17 Governing Law 67
EXHIBIT A - Form of Floating Rate Bond
EXHIBIT B Form of Fixed Rate Bond
EXHIBIT C Requisition Form
EXHIBIT D DTC Letter of Representation
THIS TRUST INDENTURE, made and entered into April 30, 1999 by and
between the PHILADELPHIA AUTHORITY FOR INDUSTRIAL DEVELOPMENT, a body
corporate and politic constituting a public instrumentality of the
Commonwealth of Pennsylvania (the "Authority"), organized and existing under
the Pennsylvania Economic Development Financing Law (Act of August 23, 1967,
Act No. 102, P.L. 251), 73 P.S. ▇▇.▇▇. 371 et seq., as amended and
supplemented from time to time (the "Act") and FIRST UNION NATIONAL BANK, a
national banking association duly organized, existing and authorized to
accept and execute trusts of the character herein set out under and by virtue
of the laws of the United States of America, having a corporate trust office
located in Philadelphia, Pennsylvania, as trustee (the "Trustee") and tender
agent (the "Tender Agent").
W I T N E S S E T H:
Certain of the terms and words used in these Recitals, and in the
following Granting Clauses, are defined in Section 1.01 of this Indenture.
WHEREAS, the Authority is authorized under the Act to acquire, hold,
construct, improve, maintain, own, finance, lease in the capacity of lessor
or lessee, and/or sell industrial, commercial and specialized development
projects for the public purpose of alleviating unemployment, maintaining
employment at a high level and creating and developing business
opportunities, by the construction, improvement, rehabilitation,
revitalization and financing of industrial commercial and specialized
enterprises; and
WHEREAS, the Authority, to accomplish the purposes of the Act, is
empowered to extend credit to such employment promoting enterprises in the
name of the Authority and in such manner as it may deem proper, for such
consideration and upon such terms and conditions as the Authority shall deem
reasonable; and
WHEREAS, Lannett Company, Inc. (the "Borrower") has requested that
the Authority provide funds to finance a project (the "Project") consisting
of (i) the construction of an approximately 40,000 square foot manufacturing
and manufacturing-related facility as an addition to a 33,000 square foot
existing facility located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ (the
"9000 State Road Facility") or, alternatively, the acquisition and renovation
of an existing manufacturing and manufacturing-related facility located at
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ (the "▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ Facility");
(ii) the acquisition of equipment for installation and use in either the ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ Facility or the ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ Facility; and (iii) the payment of
a portion of the costs of issuance of the Bonds; and
WHEREAS, the Authority has determined that it shall undertake the
financing of the Project pursuant to the provisions and requirements of the
Act; and
WHEREAS, the Authority has by Resolution authorized the issuance of
its $3,700,000 aggregate principal amount Tax-Exempt Variable Rate
Demand/Fixed Rate Revenue Bonds (Lannett Company, Inc. Project), Series of
1999 (the "Bonds") for the purpose of providing funds for financing the
Project; and
WHEREAS, the Borrower has caused to be delivered to the Trustee an
irrevocable direct pay Letter of Credit (the "Letter of Credit") issued by
First Union National Bank (the "Bank") providing for the payment of the
aggregate principal amount of the Bonds, due and payable upon optional,
extraordinary, mandatory and mandatory sinking fund redemption and optional
and mandatory tender prior to maturity or acceleration upon an event of
default hereunder, plus interest calculated for a period up to forty-six (46)
days at an interest rate of fifteen percent (15%) per annum on the Bonds; and
WHEREAS, the Bank shall be entitled to reimbursement by the Borrower
for all amounts drawn under the Letter of Credit pursuant to a reimbursement
agreement (the "Reimbursement Agreement") between the Bank and the Borrower;
and
WHEREAS, the Authority has entered into that certain Loan Agreement
of even date herewith (the "Loan Agreement"), with the Borrower wherein the
Authority will loan the proceeds of the Bonds to the Borrower, and wherein
the Borrower agrees, among other things, to make certain loan payments to the
Authority, all as set forth in the Loan Agreement; and
WHEREAS, the Authority has determined to assign, transfer and pledge
unto the Trustee, as trustee under this Indenture, all right, title and
interest of the Authority (except for certain rights of the Authority to
indemnification and the payment of its costs, fees and expenses as more
particularly described in the Loan Agreement) in and to the Loan Agreement
and sums payable thereunder; and
WHEREAS, the Authority is authorized by the Act to borrow money, and
the Authority deems it necessary to borrow money under and pursuant to the
provisions hereof for the purposes of, among other things, financing the
costs and expenses of the Project (all in accordance with applicable law) and
of carrying out its obligations under the terms of the Loan Agreement, and,
for that end, the Authority has duly authorized and directed the issuance,
sale and delivery of the Bonds to be issued as fully registered bonds; and to
secure payment of the principal thereof and of the interest and premium, if
any, thereon and the performance and observance of the covenants and
conditions herein contained, the Authority has authorized the execution and
delivery of this Indenture; and
WHEREAS, execution and delivery of this Indenture and the issuance
of the Bonds hereunder and under the Act have been duly and validly
authorized by resolution of the Board of the Authority duly adopted prior to
such execution and delivery; and
WHEREAS, all acts and things necessary to make the Bonds, when
authenticated by the Trustee and issued as in this Indenture provided, the
valid, binding and legal obligations of the Authority in accordance with
their terms, and to constitute this Indenture the valid and binding agreement
for the security of the Bonds, have been done and performed.
GRANTING CLAUSES AND AGREEMENTS
NOW, THEREFORE, in consideration of the premises and the acceptance
by the Trustee of the trusts hereby created and of the purchase and
acceptance of the Bonds issued and sold by the Authority under this Indenture
by those who shall own the same from time to time, and of the sum of one
dollar, lawful money of the United States of America, duly paid to the
Authority by the Trustee at or before the execution and delivery of this
Indenture, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and for the purpose of fixing
and declaring the terms and conditions upon which the Bonds are to be
executed, authenticated, issued, delivered and accepted by all persons who
shall from time to time be or become owners thereof, and in order to secure
the payment of the principal of and premium (if any) and interest on, and
Purchase Price of, the Bonds according to their tenor and effect and the
performance and observance by the Authority of all the covenants expressed or
implied herein and in the Bonds and the payment and performance of all other
of the Authority's obligations, the Authority does hereby grant, bargain,
sell, convey, pledge and assign, without recourse, unto the Trustee and unto
its successors in the trust forever, and grants to the Trustee and to its
successors in the trust, a security interest in all of the following:
GRANTING CLAUSE FIRST
All right, title and interest of the Authority in and to the Loan
Agreement and the security granted thereunder and under the Bond Documents,
including, but not limited to (i) the obligation of the Borrower under
Section 3.01 and Section 3.03 of the Loan Agreement to make payments at such
times and in such amounts as are necessary to pay the principal and Purchase
Price of, interest and redemption premium, if any, on the Bonds, (ii) the
present and continuing right to make claim for, collect, receive and receipt
for any of the sums, amounts, income, revenues, issues and profits and any
other sums of money payable or receivable under the Loan Agreement and the
other Bond Documents (except for the right to receive any Administrative Fees
and Expenses and any Additional Payments to the extent payable to the
Authority and any rights of the Authority to indemnification), (iii) the
present and continuing right to bring actions and proceedings thereunder or
for the enforcement thereof, and (iv) the present and continuing right to do
any and all things which the Authority is or may become entitled to do under
the Loan Agreement and the other Bond Documents.
GRANTING CLAUSE SECOND
All right, title and interest of the Authority in and to all moneys
and securities from time to time held by the Trustee under the terms of this
Indenture except those held in the Rebate Fund; provided, however, that in
consideration of the issuance by the Letter of Credit Bank of the Letter of
Credit, the Authority hereby grants a security interest in the Project Fund
to the Bank in order to secure payment of the obligations of the Borrower
under the Reimbursement Agreement, the rights of the Bank therein being
subject and subordinate to the rights of the Trustee so long as any amount
due in respect of the Bonds remains unpaid.
GRANTING CLAUSE THIRD
Any and all other property rights and interests of every kind and
nature from time to time hereafter by delivery or by writing of any kind
granted, bargained, sold, alienated, demised, released, conveyed, assigned,
transferred, mortgaged, pledged, hypothecated or otherwise subjected hereto,
as and for additional security herewith, by the Borrower or any other person
on its behalf or with its written consent or by the Authority or any other
person on its behalf or with its written consent, and the Trustee is hereby
authorized to receive any and all such property at any and all times and to
hold and apply the same subject to the terms hereof.
PROVIDED, HOWEVER, that the Authority, in order to accomplish the
purposes and objectives of the Act, retains the right, jointly and severally
with the Trustee, upon the happening of an Event of Default, to enforce the
provisions contained in the Loan Agreement and the other Loan Documents, as
more specifically set forth in the Loan Agreement whether or not the Trustee
or the Bondholders shall have exercised any rights or remedies under this
Indenture or the Loan Agreement and the other Loan Documents. In addition,
the Authority shall have the right and remedy, without posting bond or other
security, to have provisions of the Loan Agreement and the other Loan
Documents specifically enforced by any court having equity jurisdiction, it
being acknowledged and agreed that any breach or threatened breach of a
provision of the Loan Agreement and the other Loan Documents will cause
irreparable injury to the Authority and that money damages will not provide
an adequate remedy therefor;
PROVIDED THAT THE BONDS AND THE AUTHORITY'S COVENANTS UNDER THIS
INDENTURE ARE SPECIAL, LIMITED OBLIGATIONS OF THE AUTHORITY, PAYABLE SOLELY
FROM THE REVENUES AND AMOUNTS DESCRIBED HEREIN AND IN THE LOAN AGREEMENT;
THAT THE OBLIGATION TO REIMBURSE THE BANK FOR DRAWS UNDER THE LETTER OF
CREDIT AND THE OTHER OBLIGATIONS UNDER THE REIMBURSEMENT AGREEMENT ARE SOLELY
OBLIGATIONS OF THE BORROWER AND ARE NOT IN ANY MANNER OBLIGATIONS OF THE
AUTHORITY, THE COMMONWEALTH OF PENNSYLVANIA OR ANY POLITICAL SUBDIVISION
THEREOF, AND THAT NEITHER THE GENERAL CREDIT OF THE AUTHORITY NOR THE GENERAL
CREDIT OR THE TAXING POWER OF THE COMMONWEALTH OF PENNSYLVANIA OR ANY
POLITICAL SUBDIVISION THEREOF IS PLEDGED FOR THE PAYMENT OF THE BONDS OR THE
PERFORMANCE OF THE AUTHORITY'S COVENANTS UNDER THIS INDENTURE, AND NEITHER
THE BONDS NOR THIS INDENTURE SHALL BE OR BE DEEMED AN OBLIGATION OF THE
COMMONWEALTH OF PENNSYLVANIA OR ANY POLITICAL SUBDIVISION THEREOF; IT BEING
FURTHER UNDERSTOOD THAT THE AUTHORITY HAS NO TAXING POWER;
THE BONDS ARE NOT AND SHALL NOT BE IN ANY WAY A DEBT OR LIABILITY OF
THE COMMONWEALTH OF PENNSYLVANIA OR OF ANY POLITICAL SUBDIVISION THEREOF
(EXCEPT THAT THE BONDS ARE SPECIAL, LIMITED OBLIGATIONS OF THE AUTHORITY AS
DESCRIBED HEREINABOVE), AND DO NOT AND SHALL NOT CREATE OR CONSTITUTE ANY
INDEBTEDNESS, LIABILITY OR OBLIGATION OF SAID COMMONWEALTH, OR OF ANY
POLITICAL SUBDIVISION (EXCEPT THAT THE BONDS ARE SPECIAL, LIMITED OBLIGATIONS
OF THE AUTHORITY AS DESCRIBED HEREINABOVE), WHETHER LEGAL, MORAL OR
OTHERWISE. THE BONDS DO NOT NOW AND SHALL NEVER CONSTITUTE A CHARGE AGAINST
THE GENERAL CREDIT OF THE AUTHORITY.
TO HAVE AND TO HOLD all and singular the Trust Estate with all
privileges and appurtenances hereby conveyed and assigned, or agreed or
intended so to be to the Trustee and its successors in trust forever.
IN TRUST NEVERTHELESS, under and subject to the terms and conditions
hereinafter set forth, (a) for the equal benefit, protection and security of
the Owners of any and all of the Bonds, all of which regardless of the time
or times of their issuance or maturity shall be of equal rank, without
preference, priority or distinction, except as otherwise provided in or
pursuant to this Indenture, (b) for securing the observance and performance
of the Authority's obligations and of all others of the conditions, promises,
stipulations, agreements and terms and provisions of this Indenture and the
uses and purposes herein expressed and declared, and (c) on a subordinated
basis, for the benefit of the Letter of Credit Bank to the extent of payments
made under the Letter of Credit that have not been reimbursed pursuant to the
Reimbursement Agreement.
PROVIDED, HOWEVER, that if the Authority, its successors or assigns,
well and truly pays, or causes to be paid, the principal of the Bonds issued
hereunder and the premium (if any) and interest due or to become due thereon,
and the Purchase Price thereof, at the times and in the manner mentioned in
the Bonds and as provided herein, according to the true intent and meaning
thereof, and shall cause the payments to be made into the Bond Fund as
required under Article VI hereof, or shall provide, as permitted hereby, for
payment thereof, in accordance with Article XI hereof, and shall well and
truly keep, perform and observe all of the covenants and conditions pursuant
to the terms of this Indenture and all other of the Authority's obligations
to be kept, performed and observed by it, and shall pay or cause to be paid
to the Trustee all sums of money due or to become due in accordance with the
terms and provisions hereof, then upon such final payments or deposits as
provided in Article XI hereof, and upon the termination of the Loan
Agreement, the right, title and interest of the Trustee in and to the Trust
Estate shall cease, terminate and be void, and the Trustee shall thereupon
assign, transfer, and turn over the Trust Estate to the Letter of Credit
Bank; provided, that if the Trustee shall have received written evidence from
the Letter of Credit Bank that all obligations of the Borrower under the
Reimbursement Agreement have been satisfied and that the Reimbursement
Agreement has been terminated, or if no Letter of Credit Bank shall then
exist, the Trust Estate shall be assigned, transferred and turned over to the
Borrower; and the Trustee shall execute and deliver to the Authority, the
Letter of Credit Bank and the Borrower, as appropriate, such instruments in
writing as shall be requisite to evidence such transfer of the Trust Estate.
Upon the Trustee's assignment, transfer and turning over to the Letter of
Credit Bank or the Borrower, as appropriate, of the Trust Estate pursuant to
the provisions of Section XI hereof, the Trustee shall have no further
duties, responsibilities or obligations under and pursuant to this Indenture.
AND IT IS EXPRESSLY DECLARED that all Bonds issued and secured
hereunder are to be issued, authenticated and delivered and all of the Trust
Estate hereby pledged is to be dealt with and disposed of under, upon and
subject to the terms, conditions, stipulations, covenants, agreements,
trusts, uses and purposes hereinafter expressed, and the Authority has agreed
and covenanted and intending to be legally bound does hereby agree and
covenant with the Trustee and with the respective Owners from time to time of
the Bonds, or any part thereof as follows:
ARTICLE I
DEFINITIONS: CONTENT OF CERTIFICATES AND OPINIONS
SECTION 1.01. Definitions. Unless the context otherwise requires,
the terms defined in this Section shall, for all purposes of the recitals
hereto, this Indenture and of any indenture supplemental hereto and of any
certificate, opinion or other document herein mentioned, have the meanings
herein specified, to be equally applicable to both the singular and plural
forms of any of the terms herein defined. Unless otherwise defined in this
Indenture, all terms used herein shall have the meanings assigned to such
terms in the Act.
"Accountant" means any firm of independent certified public
accountants (not an individual) selected by the Borrower and acceptable to
the Bank.
"Act" means the Pennsylvania Economic Development Financing Law, as
defined above.
"Additional Payments" means any payments required to be made by the
Borrower pursuant to the Loan Agreement which are not required to be (i)
applied to the payment of scheduled debt service on or the Purchase Price of
the Bonds or (ii) reimbursed to the Letter of Credit Bank for monies drawn on
the Letter of Credit to pay debt service on or the Purchase Price of the
Bonds.
"Administrative Expenses" means those expenses of the Authority and
the Bank which are properly chargeable to the Borrower on account of the
Bonds and the Bond Documents as administrative expenses under Generally
Accepted Accounting Principles and include, without limiting the generality
of the foregoing, the following: (a) fees and expenses of the Trustee, the
Tender Agent, the Authority, the Bank and the Placement Agent; and (b) fees
and expenses of the Authority's, the Bank's, the Trustee's, the Tender
Agent's and the Placement Agent's professional advisors reasonably necessary
and fairly attributable to the Project, including without limiting the
generality of the foregoing, fees and expenses of the Authority's, the
Trustee's, the Tender Agent's, the Bank's and the Placement Agent's counsel.
"Authority" means the Philadelphia Authority for Industrial
Development, as defined above, and its successors and assigns.
"Authority Board" shall mean at any given time the governing body of
the Authority.
"Authority Officer" means the Chairman, Vice Chairman, Secretary or
Assistant Secretary and, when used with reference to an act or document, also
means any other person authorized by resolution of the Authority to perform
such act or sign such document.
"Authorized Representative" means, with respect to the Borrower, the
President, Vice President, Secretary, Assistant Secretary or Treasurer
thereof, as the case may be, or any other person designated as an Authorized
Representative of the Borrower by a certificate of the Borrower signed by the
President, Vice President, Secretary, Assistant Secretary or Treasurer of the
Borrower, as the case may be, and filed with the Trustee.
"Available Moneys" means (i) moneys derived from drawings under the
Letter of Credit, (ii) moneys held by the Trustee in funds and accounts
established under this Indenture for a period of at least one hundred
twenty-four (124) days and not commingled with any moneys so held for less
than said one hundred twenty-four (124) day period and during and prior to
which period, no petition in bankruptcy was filed by or against the Borrower
or the Authority under the Bankruptcy Code or any applicable state bankruptcy
or insolvency law, unless such petition was dismissed and all applicable
appeal periods have expired without an appeal having been filed, (iii) the
proceeds of bonds issued to refund the Bonds in whole or in part, (iv)
investment income derived from the investment of moneys described in clauses
(i), (ii) or (iii) above, or (v) any other moneys, if the Trustee and the
Letter of Credit Bank have received an opinion of nationally recognized
counsel (acceptable to the Rating Agency then rating the Bonds, if any)
experienced in bankruptcy matters to the effect that payment of the principal
or Purchase Price of or interest on the Bonds with such moneys would not, in
the event of bankruptcy of the Borrower, the Authority, any affiliate of the
Borrower or other payor, constitute a voidable preference under the
Bankruptcy Code or any applicable state bankruptcy or insolvency law.
"Bank" means First Union National Bank, a national banking
association organized under the laws of the United States of America, its
lawful successors and assigns and, if applicable, the issuer of any
Substitute Letter of Credit hereunder.
"Bankruptcy Code" means the Federal Bankruptcy Code, 11 U.S.C.
ss.101 et seq., as amended and supplemented from time to time.
"Bond Counsel" means any counsel nationally recognized as
experienced in the area of public finance and familiar with the transactions
contemplated herein and not unacceptable to the Trustee.
"Bond Documents" means any or all of the Loan Agreement, this
Indenture, the Remarketing Agreement and all documents, certificates and
instruments executed in connection with the foregoing.
"Bond Fund" means the fund created in Section 6.01 hereof.
"Bond Registrar" means any bank, national banking association or
trust company designated as registrar for the Bonds, and its successor
appointed under the Indenture.
"Bonds" means the Bonds as defined above.
"Bond Year" shall have the meaning ascribed to such term in the Tax
Compliance Agreement delivered on the date of issuance of the Bonds.
"Business Day" shall mean any day other than (i) a Saturday or
Sunday; (ii) a legal holiday on which banking institutions in the State of
New York, the Commonwealth of Pennsylvania, the City of New York or the City
of Philadelphia are authorized or required by law to close; or (iii) a day on
which the New York Stock Exchange is closed.
"Certificate," "Statement," "Request," "Direction," "Requisition"
and "Order" means (a) with respect to the Authority, a written certificate,
statement, request, requisition or order signed in the name of the Authority
by its Chairman, Vice Chairman, or such other person as may be designated and
authorized to sign for the Authority, or (b) with respect to the Borrower, a
written certificate, statement, request, requisition or order signed by an
Authorized Representative of the Borrower. Any such instrument and supporting
opinions or representations, if any, may, but need not, be combined in a
single instrument with any other instrument, opinion or representation, and
the two or more so combined shall be read and construed as a single
instrument. If and to the extent required by Section 1.02 hereof, each such
instrument shall include the statements provided for in such Section 1.02.
"Certified Resolution of the Authority" means a copy of a resolution
of the Authority Board certified by the Secretary or an Assistant Secretary
of the Authority, or other officer serving in a similar capacity, under its
corporate seal, to have been duly adopted by the Authority Board and to be in
full force and effect on the date of such certification.
"Certified Resolution of the Borrower" means a copy of the
resolution of the Borrower duly adopted and in full force and effect as of
the date of the execution and delivery of the Bonds and the Letter of Credit.
"Clearing Fund" means the fund established by that name pursuant to
Section 3.03 hereof.
"Closing Date" means April 30, 1999 or such other date which shall
be the date of the execution and delivery of the Loan Agreement and the other
Bond Documents and the issuance and delivery of the Bonds.
"Code" means the Internal Revenue Code of 1986, as amended, and all
regulations promulgated thereunder, to the extent applicable to the Bonds.
"Completion Date" means the date of completion of the Project, as
that date shall be certified as provided in Section 2.03 of the Loan
Agreement.
"Conversion Date" means the Optional Conversion Date.
"Conversion option" means the option granted to the Borrower in
Section 5.01 hereof pursuant to which the interest rate on the Bonds is
converted from the Floating Rate to the Fixed Rate as of the Optional
Conversion Date.
"Cost" or "Costs" means any cost in respect of the Project
Facilities permitted under the Act and the Code.
"Counsel" means an attorney-at-law or law firm (who may be counsel
for the Borrower or for the Authority) not unsatisfactory to the Trustee.
"County" means the County of Philadelphia, Pennsylvania.
"Debt Service Requirements" with reference to a specified period
means, with respect to Bonds:
(a) amounts required to be paid into any mandatory sinking
fund account during the period; and
(b) amounts needed to pay the principal of such
indebtedness maturing during the period and not to be redeemed prior to
maturity from amounts on deposit in any sinking fund or redemption,
retirement or similar fund or account; and
(c) interest payable on the subject indebtedness during the
period, excluding capitalized interest and amounts on deposit with the
Trustee which are available under the Indenture to pay interest with respect
to such indebtedness.
"Demand Purchase Notice" means a notice delivered pursuant to
paragraph (i) of Section 5.04 hereof.
"Demand Purchase Option" means the option granted to Owners of Bonds
to require that Bonds be purchased prior to the Conversion Date pursuant to
Section 5.04 hereof.
"Determination Date" means with respect to any Floating Rate Bonds
for each Weekly Period, each Wednesday or if such Wednesday is not a Business
Day, on the next succeeding Business Day.
"Determination of Taxability" means, with respect to any Bond, the
first to occur of the following events: (i) the date on which the Borrower
determines that an Event of Taxability (hereinafter defined) has occurred by
filing with the Trustee a statement to that effect supported by one or more
tax schedules, returns or documents that disclose that such an Event of
Taxability has occurred; (ii) the date on which the Borrower or the Trustee
is advised by private ruling, technical advice or any other written
communication from any authorized official of the Internal Revenue Service
that, based upon any filings of the Borrower or any other Person or entity,
or upon any review or audit of the Borrower or any other Person or entity, or
upon any other grounds whatsoever, an Event of Taxability has occurred; (iii)
the date on which the Trustee or the Borrower is advised that a court of
competent jurisdiction has issued an order, declaration, ruling or judgment
to the effect that an Event of Taxability has occurred; (iv) the date the
Trustee shall have received written notice from any Owner of the Bonds that
such Owner has received a written assertion or claim by any authorized
official of the Internal Revenue Service that an Event of Taxability has
occurred; or (v) the date the Trustee is notified that the Internal Revenue
Service has issued any private ruling, technical advice or any other written
communication, with or to the effect that an Event of Taxability has
occurred; provided, however, that (x) no Determination of Taxability
described in each of clauses (i) or (v) above shall be deemed to have
occurred unless the Trustee shall have received a written opinion of
nationally recognized bond counsel satisfactory to the Bank and the Borrower
and not unsatisfactory to the Trustee, and in form and substance satisfactory
to the Bank and the Borrower and not unsatisfactory to the Trustee, to the
effect that an Event of Taxability has occurred; and (y) no Determination of
Taxability described in each of clauses (i), (ii), (iii), (iv) or (v) above
shall be deemed to have occurred until 180 days shall have elapsed from the
dates described in clauses (i), (ii), (iii), (iv) or (v) above without such
Determination of Taxability having been rescinded or cancelled.
"Event of Default" means any of the events specified in Section 8.01
of this Indenture.
"Event of Taxability" means, with respect to any Bond, a change of
law or regulation, or the interpretation thereof, or the occurrence of any
other event or the existence of any other circumstances (including without
limitation the fact that any representations or warranties of the Borrower or
the Authority made in connection with the issuance of any Bond is or was
untrue or that a covenant of the Borrower has been breached) that has the
effect of causing interest payable on any Bond to be includable in gross
income for federal income tax purposes under Section 103 of the Code other
than by reason that such interest (i) is includable in the gross income of an
Owner or former Owner of any Bond while such Owner or former Owner is or was
a "substantial user" or a "related person" to a "substantial user" of the
Project Facilities (as such terms are used in Section 147(a)(1) of the Code)
or (ii) is deemed an item of tax preference, including without limitation an
item of tax preference, including without limitation an item subject to any
alternative minimum tax.
"Fiscal Year" means the period of twelve (12) consecutive months
beginning January 1 of each year, or such other period of twelve (12)
consecutive months established by the Borrower as its new Fiscal Year.
"Fixed Rate" means the interest rate in effect on any Bonds from and
after the Conversion Date, as said rate is determined in accordance with
Section 2.02(d) hereof.
"Fixed Rate Bonds" means any Bonds which shall be converted to a
Fixed Rate in accordance with the provisions of this Indenture.
"Fixed Rate Period" means, with respect to any Bonds, a period
during which interest on such Bonds accrues at a Fixed Rate.
"Floating Rate" means a variable rate of interest equal to the
minimum rate of interest necessary, in the sole judgment of the Remarketing
Agent, to sell the Bonds at a price equal to the principal amount thereof,
exclusive of accrued interest, if any, thereon; said interest rate to be in
effect on the Bonds from the date of issuance of the Bonds until (but not
including) the Conversion Date, as said rate is determined in accordance with
Section 2.02(c) hereof.
"Floating Rate Bonds" means any Bonds which bear interest at the
Floating Rate.
"Generally Accepted Accounting Principles" means those accounting
principles applicable in the preparation of financial statements of business
institutions or industrial development authorities, as appropriate, as
promulgated by the Financial Accounting Standards Board or such other body
recognized as authoritative by the American Institute of Certified Public
Accountants or any successor body.
"Government obligations" means direct obligations of (including
obligations issued or held in book entry form), or obligations the principal
of and interest on which are unconditionally guaranteed as to full and timely
payment by the United States of America.
"'Holder," "Owner" or "Bondholder" whenever used herein with respect
to a Bond, means the Person in whose name such ▇▇▇▇ is registered on the
registration books maintained by the Trustee.
"Indenture" means this Trust Indenture, as originally executed or as
it may from time to time be supplemented, modified or amended by any
Supplemental Trust Indenture.
"Interest Payment Date" means, prior to the Conversion Date, the
first Business Day of each calendar month commencing June 1, 1999 and from
and after the Conversion Date, May 1 and November 1 of each year, commencing
on the May 1 or November 1 next following the Conversion Date.
"Investment Securities" means any of the following which at the time
are legal investments under the laws of the State for moneys held hereunder
and then proposed to be invested therein:
(i) Government Obligations;
(ii) bonds, debentures, notes or other evidences of
indebtedness issued by any agency or other governmental or other
government-sponsored agencies which may hereafter be created by the United
States, provided, however, that the full and timely payment of the securities
issued by each such agency or government sponsored agency is secured by the
full faith and credit of the United States;
(iii) certificates of deposit of, or time deposits in, any
bank (including the Trustee) or savings and loan association having
securities rated at the time of purchase or acquisition in one of the three
highest rating categories of Moody's or S&P;
(iv) certificates which evidence ownership of the right to
the payment of the principal of and interest on obligations described in
clauses (i) and (ii) of this definition, provided that such obligations are
held in the custody of a bank or trust Borrower acceptable to the Trustee in
a special account separate from the general assets of such custodian;
(v) obligations which are rated at the time of purchase in
one of the two highest rating categories of Moody's and the interest on which
is not includable in gross income for federal income tax purposes and the
timely payment of the principal of and interest on which is fully provided
for by the deposit in trust or escrow of cash or obligations described in
clauses (i) or (ii) of this definition;
(vi) guaranteed investment contracts or other similar
financial instruments with a commercial bank, insurance company or other
financial institution whose long term debt obligations are rated at the time
of purchase in one of the two highest rating categories by Moody's;
(vii) any investment approved in writing by the Bank and
the Rating Agency, if any;
(viii) repurchase agreements issued by financial
institutions (i) insured by the Federal Deposit Insurance corporation or (ii)
whose senior debt obligations at the time of purchase are rated in any of the
three highest rating categories by Moody's; provided, such repurchase
agreements are subject to perfected security interests in the Investment
Securities of the kind specified in paragraphs (i) or (ii) above; and
provided further, (1) the Trustee or a custodian acting on behalf of the
Trustee has possession of the collateral, (2) the Trustee has a perfected
first security interest in the collateral, (3) the collateral is free and
clear of any third party liens and (4) failure to maintain the requisite
collateral percentage will require the Trustee to liquidate the collateral;
(ix) money market mutual funds investing in Investment
Securities of the kind specified in paragraphs (i) or (ii) above, including,
without limitation, any mutual fund for which the Trustee or an affiliate of
the Trustee serves as investment manager, administrator, shareholder
servicing agent and/or custodian or subcustodian, notwithstanding that (i)
the Trustee or an affiliate of the Trustee receives fees from such funds for
services rendered; (ii) the Trustee charges and collects fees for services
rendered pursuant to this Indenture, which fees are separate from the fees
received from such funds; and (iii) services performed for such funds and
pursuant to this Indenture may at times duplicate those provided to such
funds by the Trustee or its affiliates; and
(x) any other security or obligation constituting a
permitted investment under the Act, provided that the Bank and the Rating
Agency, if any, consent to the investment of funds in such security or
obligation.
"Issue Date" means the date on which the Trustee authenticates the
Bonds and on which the Bonds are delivered to the purchasers thereof upon
original issuance.
"Letter of Credit" means the Irrevocable Direct Pay Letter of Credit
issued by the Letter of Credit Bank pursuant to the provisions of the
Reimbursement Agreement, or, in the event of delivery of a Substitute Letter
of Credit, such Substitute Letter of Credit.
"Letter of Credit Bank" means the Bank, as issuer of the Letter of
Credit, and its lawful successors and assigns, and to the extent applicable,
the issuer of any Substitute Letter of Credit.
"Letter of Credit Termination Date" means the later of (i) that date
upon which the Letter of Credit shall expire or terminate pursuant to its
terms, or (ii) that date to which the expiration or termination of the Letter
of Credit may be extended, from time to time, either by extension or renewal
of the existing Letter of Credit or the issuance of a Substitute Letter of
Credit.
"Loan Agreement" shall have the meaning set forth in the Recitals.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, a corporation organized
and existing under the laws of the State of Delaware, its successors and
their assigns, or, if such corporation shall be dissolved or liquidated or
shall no longer perform the functions of a securities rating agency, any
other nationally recognized securities rating agency designated by the
Authority, with the approval of the Borrower.
"Net Proceeds" when used with respect to any insurance proceeds or
any condemnation award, means the amount remaining after deducting all
expenses (including attorneys' fees and disbursements) incurred in the
collection of such proceeds or award from the gross proceeds thereof.
"Obligation Termination Date" means the date on which the Bank
delivers to the Trustee a certificate to the effect that all obligations
owing to the Bank under the Reimbursement Agreement have been paid in full.
"Officers' Certificate" means with respect to the Authority, a
certificate, duly executed by the chairman or Vice Chairman, Secretary or
Assistant Secretary, Treasurer or Assistant Treasurer of the Authority, under
the corporate seal of the Authority; or with respect to the Borrower, a
certificate duly executed by an Authorized Representative, under the
corporate seal of the Borrower, if applicable.
"Opinion of Counsel" means a written opinion of ▇▇▇▇▇▇▇ (who may be
counsel for the Authority) approved by the Authority. If and to the extent
required by the provisions of Section 1.02 hereof, each Opinion of Counsel
shall include in substance the statements provided for in such Section 1.02.
"Optional Conversion Date" means that date on or after June 1, 1999,
which shall be a Business Day, from and after which the interest rate on the
Bonds is converted from the Floating Rate to the Fixed Rate as a result of
the exercise by the Borrower of the Conversion Option in accordance with the
terms of this Indenture.
"Outstanding," when used as of any particular time with reference to
Bonds, means (subject to the provisions of Section 12.10) all Bonds
theretofore, or thereupon being, authenticated and delivered by the Trustee
under this Indenture, except (1) Bonds theretofore cancelled by the Trustee
or surrendered to the Trustee for cancellation; (2) Bonds with respect to
which all liability of the Authority shall have been discharged in accordance
with Section 11.02, including Bonds (or portions of Bonds) referred to in
Section 12.10; and (3) Bonds for the transfer or exchange of or in lieu of or
in substitution for which other Bonds shall have been authenticated and
delivered by the Trustee pursuant to this Indenture.
"Permitted Encumbrances" means any liens or encumbrances permitted
under the Reimbursement Agreement or otherwise permitted by the Bank.
"Person" means an individual, corporation, firm, association,
partnership, trust, or other legal entity or group of entities, including a
governmental entity or any agency or political subdivision thereof.
"Placement Agent" means First Union Capital Markets Corp.
"Pledge Agreement" means (i) the Pledge and security Agreement of
even date herewith by and between the Bank and the Borrower, and any
amendments or supplements thereto, and (ii) the pledge and security agreement
made by the Borrower to any Substitute Bank, and any amendments or
supplements thereto.
"Pledged Bonds" means any Bonds which shall, at the time of
determination thereof, be held in pledge for the benefit of the Bank by the
Pledged Bonds Custodian pursuant to the Pledge Agreement.
"Pledged Bonds Custodian" means that banking corporation or
association which serves as the custodian for the Pledged Bonds under the
terms and conditions of the Pledge Agreement. The initial Pledged Bonds
Custodian shall be the Trustee.
"Principal Corporate Trust Office" means the corporate trust office
of the Trustee, which at the date of the execution of the Indenture is
located at ▇▇▇▇ ▇▇▇▇ ▇.▇. Harris Boulevard, Charlotte, North Carolina
28288-1153, Attention: Corporate Trust Department.
"Project" shall have the meaning set forth in the Recitals.
"Project Facilities" shall mean the Facility and the Equipment
constructed or acquired, in whole or in part, with the proceeds of the Bonds.
"Project Fund" means the fund established by that name pursuant to
Section 6.05 hereof.
"Purchase Price" means an amount equal to 100% of the principal
amount of any Bond tendered or deemed tendered pursuant to Sections 5.01,
5.03 or 5.04 hereof, plus accrued and unpaid interest thereon to the date of
purchase.
"Qualified Project Costs" means the cost of the items authorized by
the Act and financed by the Authority from the proceeds of the Bonds,
provided that such costs were paid or incurred:
(i) no more than sixty (60) days of the date of the Resolution (or,
if paid more than sixty days prior to the date of the Resolution, provided
that such costs qualify as "preliminary expenditures" under Section
1.150-2(f)(2) of the Regulations); and
(ii)for either land or property subject to the allowance for
depreciation provided by Section 167 of the Code, and were properly
chargeable and actually charged to the Project's capital account for federal
income tax purposes.
Qualified Project Costs do not include any amount applied directly or
indirectly to the payment of:
(i) Issuance Costs (as such term is defined in the Tax Compliance
Agreement);
(ii)interest on any indebtedness following completion of each
separately functioning portion of the Project, to the extent such interest
may not be capitalized pursuant to an election under Section 266 of the Code
and the Regulations thereunder; and
(iii) any working capital or inventory, including reimbursement to
the Borrower or any Related Person for any amounts incurred in the
acquisition, construction, and equipping of the Project that were paid more
than sixty (60) days prior to the date of the Resolution Provided, however,
that the Borrower may be reimbursed for amounts paid in the acquisition,
construction and equipping of the Project more than sixty (60) days prior to
the date of the Resolution if such amounts qualify as "preliminary
expenditures" under Section 1.150-2(f)(2) of the Regulations.
"Rating Agency" means ▇▇▇▇▇'▇ if the Bonds are rated by ▇▇▇▇▇'▇ and
S&P if the Bonds are rated by S&P.
"Rating Category" means one of the general rating categories of
▇▇▇▇▇'▇ or S&P, without regard to any refinement or gradation of such rating
category by a numerical modifier or otherwise.
"Rebate Fund" means the fund by that name established pursuant to
the provisions of Section 6.13 hereof.
"Record Date" means, prior to the Conversion Date, that day which is
the Business Day next preceding any Interest Payment Date and thereafter,
that date which is the fifteenth (15th) day next preceding any Interest
Payment Date.
"Reimbursement Agreement" means the Reimbursement Agreement of even
date herewith by and between the Borrower and the Bank, and any other similar
agreement entered into in connection with the issuance of any Substitute
Letter of Credit and any and all modifications, alterations, amendments and
supplements thereto.
"Reimbursement Documents" means the Reimbursement Agreement and the
agreements, instruments and documents executed in connection therewith.
"Remarketing Agent" means (singly or collectively, as the case may
be) the remarketing agent(s) appointed by the Borrower and approved in
writing by the Authority and at the time serving as such under the
Remarketing Agreement.
"Remarketing Agreement" means the Remarketing Agreement of even date
herewith by and between the Borrower and First Union Capital Markets Corp.
"Revenues" means all amounts received by the Authority or the
Trustee for the account of the Authority pursuant or with respect to the Loan
Agreement for debt service on or Purchase Price of the Bonds, and all amounts
received by the Authority or the Trustee with respect to the Letter of
Credit, including without limiting the generality of the foregoing, payments
under the Loan Agreement (including both timely and delinquent payments and
late charges, and whether paid from any source), prepayments, insurance
proceeds, condemnation proceeds, and all interest, profits or other income
derived from the investment of amounts in any fund or account established
pursuant to this Indenture.
"S&P" means Standard & Poor's Corporation, a corporation organized
and existing under the laws of the State of Delaware, its successors and
their assigns, or, if such corporation shall be dissolved or liquidated or
shall no longer perform the functions of a securities rating agency
designated by the Authority, with the approval of the Borrower.
"State" means the Commonwealth of Pennsylvania.
"Substitute Bank" means a commercial bank, savings and loan
association or savings bank which has issued a Substitute Letter of Credit.
"Substitute Letter of Credit" means a letter of credit delivered to
the Trustee in accordance with Section 4.07 of the Loan Agreement (i) issued
by the Bank or a Substitute Bank, the short term unsecured debt of which
shall then have been assigned a rating by Moody's of "P-1" (ii) replacing any
existing Letter of Credit, (iii) dated no later than the date of the
expiration or replacement date of the Letter of Credit for which the same is
to be substituted, (iv) which shall expire on a date which is fifteen (15)
days after an Interest Payment Date for the Bonds, (v) having a term of at
least one year and (vi) issued on substantially identical terms and
conditions as the then existing Letter of Credit except that the stated
amount of the Substitute Letter of Credit shall equal the sum of (A) the
aggregate principal amount of Bonds at the time outstanding, plus (B) an
amount equal to (i) prior to the Conversion Date, forty-six (46) days,
interest (computed at a maximum rate of fifteen percent (15%) per annum) on
all Bonds at the time Outstanding; and (ii) from and after the Conversion
Date, 205 days' interest (computed at the Fixed Rate on all Bonds at the time
Outstanding).
"Supplemental Trust Indenture" means any indenture hereafter duly
authorized and entered into between the Authority and the Trustee,
supplementing, modifying or amending this Indenture, but only if and to the
extent that such Supplemental Indenture is specifically authorized hereunder.
"Tax Compliance Agreement" means the Tax Compliance Agreement of
even date herewith by and between the Borrower and the Trustee.
"Tender Agent" means First Union National Bank and its successors
and any corporation resulting from or surviving any consolidation or merger
to which it or its successors may be a party and any successor Tender Agent
at the time serving as successor ▇▇▇▇▇▇ Agent hereunder. "Delivery Office"
and "Principal Office" of the Tender Agent means ▇▇▇▇ ▇▇▇▇ ▇.▇. Harris
Boulevard, Charlotte, North Carolina 28288-1153, Attention: Corporate Trust
Department or such other address as may be designated in writing to the
Authority, the Trustee, the Remarking Agent and the Borrower.
"Trust Estate" means all property rights and interests transferred,
assigned, or otherwise pledged to the Trustee and the Letter of Credit Bank
pursuant to the Granting Clauses hereof, which does not include the moneys on
deposit from time to time in the Rebate Fund pursuant to Section 6.13 hereof.
"Trustee" means First Union National Bank _, and its successors and
any corporation or association resulting from or surviving any consolidation
or merger to which it or its successors may be a party and any successor
trustee at the time serving as successor trustee hereunder.
"Unremarketed Bonds" means Bonds which have been purchased pursuant
to Sections 5.01, 5.03 or 5.04 hereof but which have not been remarketed.
"Weekly Period" shall mean, while the Bonds bear interest at the
Floating Rate, the weekly period that begins on and includes Thursday of each
calendar week and ends at the close of business on Wednesday of the next
succeeding week.
SECTION 1.02. Content of Certificates and Opinions. The Trustee may,
but shall not be obligated to, require that every certificate or opinion
provided for in this Indenture with respect to compliance with any provision
hereof shall include (1) a statement to the effect that the Person making or
giving such certificate or opinion has read such provision and the
definitions herein relating thereto; (2) a brief statement as to the nature
and scope of the examination or investigation upon which the certificate or
opinion is based; (3) a statement to the effect that in the opinion of such
Person, he has made or caused to be made such examination or investigation as
is necessary to enable him to express an informed opinion with respect to the
subject matter referred to in the instrument to which his signature is
affixed; (4) a statement of the assumptions upon which such certificate or
opinion is based, and that such assumptions are reasonable; and (5) a
statement as to whether, in the opinion of such Person, such provision has
been complied with.
Any such certificate or opinion made or given by an officer of the
Authority or the Borrower may be based, insofar as it relates to legal or
accounting matters, upon a certificate or opinion of or representation by
Counsel or an accountant, unless such officer knows, or in the exercise of
reasonable care should have known, that the certificate, opinion or
representation with respect to the matters upon which such certificate or
statement may be based, as aforesaid, is erroneous. Any such certificate or
opinion made or given by Counsel or an accountant may be based, insofar as it
relates to factual matters (with respect to which information is in the
possession of the Authority or the Borrower as the case may be) upon a
certificate or opinion of or representation by an Authorized Officer of the
Authority or Authorized Representative of the Borrower, unless such Counsel
or accountant knows, or in the exercise of reasonable care should have known,
that the certificate or opinion or representation with respect to the matters
upon which such Person's certificate or opinion or representation may be
based, as aforesaid, is erroneous. The same Authorized Officer of the
Authority or the Authorized Representative of ▇▇▇▇▇▇▇▇, or the same counsel
or accountant, as the case may be, need not certify to all of the matters
required to be certified under any provision of this Indenture, but different
officers, counsel or accountants may certify to different matters,
respectively.
SECTION 1.03. Interpretation. (a) Unless the context otherwise
indicates, words expressed in the singular shall include the plural and vice
versa and the use of the neuter, masculine, or feminine gender is for
convenience only and shall be deemed to mean and include the neuter,
masculine or feminine gender, as appropriate.
(b) Headings of articles and sections herein and the table
of contents hereof are solely for convenience of reference, do not constitute
a part hereof and shall not affect the meaning, construction or effect
hereof.
(c) All references herein to "Articles," "Sections" and
other subdivisions are to the corresponding Articles, Sections or
subdivisions of this Indenture; the words "herein," "hereof," "hereby,"
"hereunder" and other words of similar import refer to this Indenture as a
whole and not to any particular Article, Section or subdivision hereof.
(d) Whenever in this Indenture it is required that notice
be provided to the Bank or that consent of the Bank be obtained, such
provisions shall be effective only when (i) the Letter of Credit is in effect
or (ii) the Bank, in its capacity as provider of the Letter of Credit, is the
Holder of any Bonds.
ARTICLE II
THE BONDS
SECTION 2.01. Authorization of Bonds. The Bonds shall be issued
hereunder in order to obtain moneys to finance the Project for the benefit of
the Authority and the Borrower. The Bonds shall be designated as
"Philadelphia Authority for Industrial Development Tax-Exempt Variable Rate
Demand/Fixed Rate Revenue Bonds (Lannett Company, Inc. Project), Series of
1999." The aggregate principal amount of Bonds which may be issued and
Outstanding under this Indenture shall not exceed Three Million Seven Hundred
Thousand Dollars ($3,700,000). No additional Bonds may be issued under this
Indenture. This Indenture constitutes a continuing agreement by the Authority
for the benefit of the Holders from time to time of the Bonds to secure the
full payment of the principal and Purchase Price of and interest and premium,
if any, on all such Bonds subject to the covenants, provisions and conditions
herein contained.
SECTION 2.02. Terms of Bonds; Interest on the Bonds. (a) The Bonds
shall be issued in fully registered form. Prior to the Conversion Date, (i)
such Bonds shall be outstanding in denominations of $100,000 or any integral
multiple of $5,000 in excess thereof; and (ii) such Bonds may not be issued,
exchanged or transferred except in the authorized denominations of $100,000
or any integral multiple of $5,000 in excess thereof. From and after the
Conversion Date, (i) such Bonds shall be Outstanding in denominations of
$5,000 or any integral multiple of $5,000 and (ii) such Bonds may not be
issued, exchanged or transferred except in the authorized denominations of
$5,000 or any integral multiple of $5,000 in excess thereof. The Bonds shall
be dated as of the date of delivery and shall mature, subject to prior
redemption, as provided herein. Unless the Authority shall otherwise direct,
prior to the Conversion Date the Bonds shall be lettered "VR" and shall be
numbered consecutively from 1 upward and after the Conversion Date the Bonds
shall be lettered "FR" and shall be numbered consecutively from 1 upward.
(b) Each of the Bonds shall be dated the Issue Date and
shall bear interest, payable (i) prior to the Conversion Date, on the first
Business Day of each calendar month commencing June 1, 1999; (ii) on the
Conversion Date and (iii) from and after the Conversion Date, on May 1 and
November 1 of each year, commencing on the May 1 or November 1 next following
the Conversion Date, in each case from the Interest Payment Date next
preceding the date of authentication thereof to which interest has been paid
or duly provided for, unless the date of authentication thereof is an
Interest Payment Date to which interest has been paid or duly provided for,
in which case from the date of authentication thereof, or unless no interest
has been paid or duly provided for on the Bonds, in which case from the Issue
Date, until payment of the principal thereof has been made or duly provided
for. Notwithstanding the foregoing, any Bond authenticated after any Record
Date and before the following Interest Payment Date shall bear interest from
such Interest Payment Date; provided, however, that if the Authority shall
default in the payment of interest from the next preceding Interest Payment
Date to which interest has been paid or duly provided for, or, if no interest
has been paid or duly provided for on the Bonds, from the Issue Date. The
Bonds shall mature as provided in Section 4.01(c) herein.
(c) (i) From the Issue Date to the Conversion Date, the
Bonds shall bear interest at the Floating Rate. The Floating Rate shall be
determined by the Remarketing Agent on each Determination Date and shall be
effective for the immediately succeeding Weekly Period.
(ii) The Remarketing Agent shall advise the Trustee of
the Floating Rate by telephone (confirmed by telecopy to the Trustee) at or
before the close of business on each Determination Date. Upon request of any
Bondholder, the Remarketing Agent shall notify such Bondholder of the
Floating Rate then borne by the Bonds.
(iii) If for any reason the interest rate on a Bond for
any Weekly Period is not determined by the Remarketing Agent pursuant to
(c)(i) above, or a court holds that the Floating Rate, set as provided
pursuant to (c)(i) above, is invalid or unenforceable, the Floating Rate for
the Bonds shall be for (a) the first such week that the applicable Floating
Rate is not determined by the Remarketing Agent or has been determined
invalid or unenforceable, a rate per annum equal to the Floating Rate for
such series of Bonds established by the Remarketing Agent pursuant to (c)(i)
on the immediately preceding Determination Date and (b) on each Determination
Date thereafter, shall be a rate per annum equal to 85% of the interest rate
per annum for 30 day commercial paper having a rating of A-2/P-2 as reported
in The Wall Street Journal on each Determination Date.
(iv) The determination of the Floating Rate by the
Remarketing Agent shall be conclusive and binding upon the Authority, the
Trustee, the Bank, the Borrower, the Remarketing Agent, the Tender Agent and
the Owners of the Bonds.
Anything herein to the contrary notwithstanding, the Floating Rate
shall in no event exceed fifteen (15%) per annum.
(d) The Bonds shall bear interest at the Fixed Rate
from and after the Conversion Date until the maturity of the Bonds. The Fixed
Rate shall be a fixed annual interest rate on the Bonds, such Fixed Rate to
be established by the Remarketing Agent as the rate of interest for which the
Remarketing Agent has received commitments from purchasers on or prior to the
fifth (5th) day preceding the Conversion Date to purchase all the Outstanding
Bonds on the Conversion Date at a price of par.
(e) Prior to the Conversion Date, interest on the Bonds
shall be computed on the basis of a 365 or 366-day year, as applicable, for
the actual number of days elapsed. on and after the Conversion Date, interest
on the Bonds shall be computed on the basis of a 360-day year of twelve
30-day months. The principal of and premium, if any, on the Bonds shall be
payable in lawful money of the United States of America at the Principal
Corporate Trust Office of the Trustee, or the designated office of its
successor in trust. The Purchase Price of the Bonds shall be payable at the
Delivery Office of the Tender Agent in lawful money of the United States of
America by the Tender Agent to the Owner of Bonds entitled to receive such
Purchase Price.
Interest on the Bonds shall be payable on each Interest Payment Date
to the Persons in whose name the Bonds are registered at the close of
business on the Record Date for the respective Interest Payment Date.
Interest shall be paid by check mailed on the applicable Interest Payment
Date to each Owner at the addresses shown on the registration books
maintained by the Trustee, provided that such interest shall be paid by wire
transfer to (i) the Bank and (ii) any Holder of at least $1,000,000 in
aggregate principal amount of Bonds, if the Holder makes a written request to
the Trustee at least fifteen (15) days before a Record Date specifying the
account address and wiring instructions. Such a request may provide that it
will remain in effect for subsequent interest payments until changed or
revoked by written notice to the Trustee or upon the transfer or
reregistration of the Bond.
SECTION 2.03. Execution of Bonds. The Bonds shall be executed in the
name and on behalf of the Authority with the manual or facsimile signature of
its chairman or vice Chairman and attested by the manual or facsimile
signature of its Secretary or Assistant Secretary, and the seal of the
Authority will be impressed or imprinted on the Bonds by facsimile or
otherwise. The Bonds shall then be delivered to the Trustee for
authentication. In case any of the officers who shall have signed or attested
any of the Bonds shall cease to be such officer or officers of the Authority
before the Bonds so signed or attested shall have been authenticated or
delivered by the Trustee or issued by the Authority, such Bonds may
nevertheless be authenticated, delivered and issued and, upon such
authentication, delivery and issue, shall be as binding upon the Authority as
though those who signed and attested the same had continued to be such
officers of the Authority.
Only such of the Bonds as shall bear thereon a certificate of
authentication substantially in the form set forth on the form of Bond,
manually executed by the Trustee, shall be valid or obligatory for any
purpose or entitled to the benefits of this Indenture, and such certificate
of the Trustee shall be conclusive evidence that the Bonds so authenticated
have been duly executed, authenticated and delivered hereunder and are
entitled to the benefits of this Indenture.
SECTION 2.04. Authentication. (a) The Authority hereby appoints the
Tender Agent as a co-authenticating agent for the Bonds.
(b) No Bond shall be valid or obligatory for any purpose or
entitled to any security or benefit under this Indenture unless and until a
certificate of authentication on such Bond, substantially in the form set
forth in Exhibit A or Exhibit B, attached hereto, as applicable, shall have
been duly executed by the Trustee or by the Tender Agent and such executed
certificate of authentication upon any such Bond shall be conclusive evidence
that such Bond has been authenticated and delivered under this Indenture. The
certificate of authentication on any Bond shall be deemed to have been
executed by the Trustee or the Tender Agent if signed by an authorized
signatory of the Trustee or the Tender Agent, as the case may be, but it
shall not be necessary that the same signatory execute the certificate of
authentication on all of the Bonds.
(c) In the event the Bond is deemed tendered to the Tender
Agent as provided in Section 5.01, 5.03 or 5.04 hereof but is not physically
delivered to the Tender Agent, the Authority shall execute and the Trustee or
the Tender Agent shall authenticate a new Bond of like denomination as that
deemed tendered.
SECTION 2.05. Form of Bonds. The Floating Rate Bonds and the
certificate of authentication to be endorsed thereon prior to the Conversion
Date are to be substantially in the form set forth in Exhibit A attached
hereto, with appropriate variations, omissions and insertions as permitted or
required by this Indenture and applicable law. The Fixed Rate Bonds and the
certificate of authentication to be endorsed thereon are to be in
substantially the form set forth in Exhibit B attached hereto, with
appropriate variations, omissions and insertions as permitted or required by
this Indenture and applicable law.
SECTION 2.06. Transfer of Bonds. Subject to the provisions of
Section 2.14 hereof, any Bond may be transferred in accordance with its terms
upon the books required to be kept pursuant to the provisions of Section 2.08
hereof. Such transfer shall be made, in accordance with the requirements of
Section 2.02 hereof, by the Person in whose name it is registered, in person
or by his duly authorized attorney, upon surrender of such registered Bond
for cancellation, accompanied by delivery of a written instrument of
transfer, duly executed in a form approved by the Trustee.
Whenever any Bond or Bonds shall be surrendered for transfer, the
Authority shall execute and the Trustee or the Tender Agent, as the case may
be, shall authenticate and deliver a new Bond or Bonds of the same Series for
a like aggregate principal amount. The Trustee shall require the Bondholder
requesting such transfer to pay any tax or other governmental charge required
to be paid with respect to such transfer, and may in addition require the
payment of a reasonable sum to cover expenses incurred by the Authority or
the Trustee in connection with such transfer.
The Trustee shall not be required to transfer any Bond during the
period beginning fifteen (15) days before the mailing of notice of redemption
calling the Bond or any portion of the Bond for redemption and ending on the
redemption date.
SECTION 2.07. Exchange of Bonds. Bonds may be exchanged at the
Principal Corporate Trust Office of the Trustee for a like aggregate
principal amount of Bonds of the same Series of other authorized
denominations in accordance with the requirements of Section 2.02 hereof. The
Trustee shall require the Bondholder requesting such exchange to pay any tax
or other governmental charge required to be paid with respect to such
exchange, and may in addition require the payment of a reasonable sum to
cover expenses incurred by the Authority or the Trustee in connection with
such exchange.
The Trustee shall not be required to exchange any Bond during the
period beginning fifteen (15) days before the mailing of notice of redemption
calling the Bonds or any portion of the Bonds for redemption and ending on
the redemption date.
SECTION 2.08. Bond Registrar. The Trustee is hereby appointed the
Bond Registrar of the Authority and the Tender Agent is hereby appointed the
Co-Bond Registrar of the Authority. The Trustee or the Tender Agent, as the
case may be, will keep or cause to be kept sufficient books for the
registration and transfer of the Bonds, which shall at all times be open to
inspection during regular business hours upon prior written notice by the
Authority, the Borrower, the Bank and the Remarketing Agent; and, upon
presentation for such purpose, the Trustee or the Tender Agent, as the case
may be, shall, under such reasonable regulations as they may prescribe,
register or transfer or cause to be registered or transferred, on such books,
Bonds as hereinbefore provided.
SECTION 2.09. Temporary Bonds. The Bonds may be issued in temporary
form exchangeable for definitive Bonds when ready for delivery. Any temporary
Bond may be printed, lithographed or typewritten, shall be of such
denomination as may be determined by the Authority, shall be in fully
registered form without coupons and may contain such reference to any of the
provisions of this Indenture as may be appropriate. Every temporary Bond
shall be executed by the Authority and be authenticated by the Trustee or the
Tender Agent, as the case may be, upon the same conditions and in
substantially the same manner as the definitive Bonds. If the Authority
issues temporary Bonds it will execute and deliver definitive Bonds as
promptly thereafter as practicable, and thereupon the temporary Bonds may be
surrendered for cancellation, in exchange therefor at the designated office
of the Trustee and the Trustee or the Tender Agent, as the case may be, shall
authenticate and deliver in exchange for such temporary Bonds an equal
aggregate principal amount of definitive Bonds of authorized denominations.
Until so exchanged, the temporary Bonds shall be entitled to the same
benefits under this Indenture as definitive Bonds authenticated and delivered
hereunder.
SECTION 2.10. Bond Mutilated, Lost, Destroyed or Stolen. If any Bond
shall become mutilated, the Authority, at the expense of the Holder of said
▇▇▇▇, shall execute and the Trustee shall thereupon authenticate and deliver,
a new Bond of like tenor and number in exchange and substitution for the Bond
so mutilated, but only upon surrender to the Trustee of the Bond so
mutilated. Every mutilated Bond so surrendered to the Trustee shall be
cancelled by it and delivered to, or upon the order of, the Authority. If any
Bond shall be lost, destroyed or stolen, evidence of such loss, destruction
or theft may be submitted to the Authority and the Trustee and, if such
evidence be satisfactory to both and indemnity satisfactory to them both
shall be given, the Authority, at the expense of the Holder, shall execute,
and the Trustee shall thereupon authenticate and deliver, a new Bond of like
tenor and number in lieu of and in substitution for the Bond so lost,
destroyed or stolen (or if any such Bond shall have matured or shall be about
to mature, instead of issuing a substitute ▇▇▇▇, the Trustee may pay the same
without surrender thereof). The Authority may require payment by the Holder
of a sum not exceeding the actual cost of preparing each new Bond issued
under this Section and of the expenses which may be incurred by the Authority
and the Trustee in connection therewith. Any Bond issued under the provisions
of this Section in lieu of any Bond alleged to be lost, destroyed or stolen
shall constitute an original additional contractual obligation on the part of
the Authority whether or not the Bond so alleged to be lost, destroyed or
stolen be at any time enforceable by anyone, and shall be entitled to the
benefits of this Indenture with all other Bonds secured by this Indenture.
SECTION 2.11. Cancellation and Destruction of Surrendered Bonds. All
Bonds surrendered for payment or redemption and all Bonds purchased with
moneys available for that purpose in any funds established under this
Indenture, shall, at the time of such payment or redemption, be cancelled and
destroyed by the Trustee. The Trustee shall deliver to the Authority
certificates of destruction with respect to all Bonds destroyed in accordance
with this Section.
SECTION 2.12. Acts of Bondholders; Evidence of Ownership. Any action
to be taken by Bondholders may be evidenced by one or more concurrent written
instruments of similar tenor signed or executed by such Bondholders in person
or by agents appointed in writing. The fact and date of the execution by any
Person of any such instrument may be proved by acknowledgment before a notary
public or other officer empowered to take acknowledgements or by an affidavit
of a witness to such execution. Any action by the Holder of any Bond shall
bind all future Holders of the same Bond in respect of any thing done or
suffered by the Authority or the Trustee in pursuance thereof.
SECTION 2.13. CUSIP Number. The Authority, for the convenience of
the registered Owners of the Bonds, may cause CUSIP (Committee on Uniform
Security Identification Procedures) numbers to be printed on such Bonds. No
representation shall be made as to the correctness or accuracy of such
numbers, either as printed on such Bonds or as contained in any notice of
redemption, and the Authority shall have no liability of any sort with
respect thereto. No reliance with respect to any redemption notices with
respect to any Bond may be placed on the identification number printed
thereon.
SECTION 2.14 Book-Entry-Only System for the Bonds. (a)
Notwithstanding the foregoing provisions of this Article II, the Bonds shall
initially be issued in the form of one fully registered Bond for the
aggregate principal amount of the Bonds of each maturity, which Bonds shall
be registered in the name of CEDE & Co., as nominee of The Depository Trust
Company ("DTC"). Except as provided in paragraph (g) below, all of the Bonds
shall be registered in the registration books kept by the Trustee in the name
of CEDE & Co., as nominee of DTC; provided that if DTC shall request that the
Bonds be registered in the name of a different nominee, the Trustee shall
exchange all or any portion of the Bonds for an equal aggregate principal
amount of Bonds registered in the name of such nominee or nominees of DTC. No
Person other than DTC or its nominee shall be entitled to receive from the
Authority or the Trustee either a Bond or any other evidence of ownership of
the Bonds, or any right to receive any payment in respect thereof unless DTC
or its nominee shall transfer record ownership of all or any portion of the
Bonds on the registration books maintained by the Trustee, in connection with
discontinuing the book entry system as provided in paragraph (g) below or
otherwise.
(b) So long as the Bonds or any portion thereof are
registered in the name of DTC, the principal or redemption price of and
interest on such Bond shall be made to DTC or its nominee in same day funds
on the dates provided for such payments under this Indenture. Each such
payment to DTC or its nominee shall be valid and effective to fully discharge
all liability of the Authority or the Trustee with respect to the principal
or redemption price of or interest on the Bonds to the extent of the sum or
sums so paid. In the event of the redemption of less than all of the Bonds
Outstanding of any maturity, the Trustee shall not require surrender by DTC
or its nominee of the Bonds so redeemed, but DTC (or its nominee) may retain
such Bonds and make an appropriate notation on the Bond certificate as to the
amount of such partial redemption; provided that DTC shall deliver to the
Trustee, in each case, a written confirmation of such partial redemption and
thereafter the records maintained by the Trustee shall be conclusive as to
the amount of the Bonds of such maturity which have been redeemed.
(c) The Authority and the Trustee shall treat DTC (or its
nominee) as the sole and exclusive Owner of the Bonds registered in its name
for the purposes of payment of the principal or redemption price of and
interest on the Bonds, selecting the Bonds or portions thereof to be
redeemed, giving any notice permitted or required to be given to Owners of
Bonds under this Indenture, registering the transfer of Bonds, obtaining any
consent or other action to be taken by Owners of Bonds and for all other
purposes whatsoever; and neither the Authority nor the Trustee shall be
affected by any notice to the contrary. Neither the Authority nor the Trustee
shall have any responsibility or obligation to any participant in DTC, any
Person claiming a beneficial ownership interest in the Bonds under or through
DTC or any such participant, or any other Person which is not shown on the
registration books of the Trustee as being an Owner of Bonds, with respect to
either: (1) the Bonds; or (2) the accuracy of any records maintained by DTC
or any such participants; or (3) the payment by DTC or any such participant
of any amount in respect of the principal or redemption price of or interest
on the Bonds; or (4) any notice which is permitted or required to be given to
Owners of Bonds under this Indenture; or (5) the selection by DTC or any such
participant of any Person to receive payment in the event of a partial
redemption of the Bonds; or (6) any consent given or other action taken by
DTC as an Owner of Bonds.
(d) So long as the Bonds or any portion thereof are
registered in the name of DTC or any nominee thereof, all notices required or
permitted to be given to the Owners of Bonds under this Indenture shall be
given to DTC as provided in the Letter of Representation, the form of which
is attached hereto as Exhibit D.
(e) In connection with any notice or other communication to
be provided to Owners of Bonds pursuant to this Indenture by the Authority or
the Trustee with respect to any consent or other action to be taken by Owners
of Bonds, DTC shall consider the date of receipt of notice requesting such
consent or other action as the record date for such consent or other action,
provided that the Authority or the Trustee may establish a special record
date for such consent or other action. The Authority or the Trustee shall
give DTC notice of such special record date not less than fifteen (15)
calendar days in advance of such special record date to the extent possible.
(f) At or prior to settlement for the Bonds, the Authority
and the Trustee shall execute or signify their approval of the Letter of
Representation. Any successor Trustee shall, in its written acceptance of its
duties under this Indenture, agree to take any actions necessary from time to
time to comply with the requirements of the Letter of Representation.
(g) The book-entry-only system for registration of the
ownership of the Bonds may be discontinued at any time if either: (1) after
notice to the Authority and the Trustee, DTC determines to resign as
securities depository for the Bonds; or (2) after notice to DTC and the
Trustee, the Authority determines that continuation of the system of
book-entry-only transfers through DTC (or through a successor securities
depository) is not in the best interest of the Authority. In either of such
events, unless the Authority appoints a successor securities depository, the
Bonds shall be delivered in registered certificate form to such Persons, and
in such maturities and principal amounts, as may be designated in writing by
DTC to the Authority and the Trustee, but without any liability on the part
of the Authority or the Trustee for the accuracy of such designation.
Whenever DTC requests the Authority and the Trustee to do so, the Authority
and the Trustee shall cooperate with DTC in taking appropriate action after
reasonable written notice to arrange for another securities depository to
maintain custody of certificates evidencing the Bonds.
ARTICLE III
ISSUANCE OF BONDS; APPLICATION OF PROCEEDS
SECTION 3.01. Issuance of the Bonds. At any time after the execution
of this Indenture, the Authority may execute and the Trustee or the Tender
Agent, as the case may be, shall authenticate and, upon request of the
Authority, deliver the Bonds in the aggregate principal amount of Three
Million Seven Hundred Thousand Dollars ($3,700,000).
SECTION 3.02. Validity of Bonds. The validity of the authorization
and issuance of the Bonds is not dependent on and shall not be affected in
any way by any proceedings taken by the Authority or the Trustee with respect
to or in connection with the Loan Agreement. The recital contained in the
Bonds that the same are issued pursuant to the Act and the Constitution and
laws of the State shall be conclusive evidence of their validity and of
compliance with all provisions of law in their issuance.
SECTION 3.03. Disposition of Proceeds of the Bonds and Other
Amounts. The Authority shall deposit or cause to be deposited with the
Trustee, immediately upon receipt thereof, all proceeds derived from the sale
of the Bonds, together with any monies deposited by the Borrower as an equity
contribution. The Trustee shall deposit all such amounts in a special fund
which the Trustee is hereby directed to establish, to be known as the
Clearing Fund, and in the following order, the Trustee shall:
(a) Transfer to the Borrower in accordance with the Closing
Statement delivered to the Trustee on the Closing Date funds sufficient to
reimburse the Borrower for costs of the Project which were incurred and paid
prior to the Closing Date and which are Qualified Project Costs of the
Project (as such term is defined in the Tax Compliance Agreement);
(b) Transfer to the Persons identified on the Closing
Statement delivered to the Trustee on the Closing Date to pay or reserve for
payment any and all costs of issuance incurred in connection with the Bonds;
and
(c) Transfer to the credit of the Project Fund the balance
of the Clearing Fund not otherwise used or reserved for payment of the items
described in Subsection 3.03(a) and (b) above.
ARTICLE IV
REDEMPTION OF BONDS BEFORE MATURITY
SECTION 4.01. Extraordinary Redemption. (a) The Bonds are callable
for redemption in the event (i) the Project Facilities or any portion thereof
is damaged or destroyed or taken in a condemnation proceeding as provided in
Section 6.04 of the Loan Agreement or (ii) the Borrower shall exercise its
option to cause the Bonds to be redeemed as provided in Section 9.02 of the
Loan Agreement. If called for redemption at any time pursuant to this Section
4.01(a), the Bonds shall be subject to redemption by the Authority on any
Interest Payment Date, in whole or in part, at a redemption price equal to
100% of the principal amount thereof being redeemed, plus accrued interest to
the redemption date.
(b) Mandatory Redemption. The Bonds are subject to
mandatory redemption:
(1) five (5) days prior to the Letter of Credit
Termination Date, in whole, at a redemption price equal to one hundred
percent (100%) of the principal amount thereof being redeemed plus accrued
interest to the redemption date if, on the thirtieth (30th) Business Day
prior to the Letter of Credit Termination Date, the Trustee shall not have
received a Substitute Letter of Credit which will be effective on or before
the Letter of Credit Termination Date.
(2) on any Interest Payment Date, in whole or in
part, at a redemption price equal to one hundred percent (100%) of the
principal amount thereof being redeemed plus accrued interest to the
redemption date, if any proceeds of the sale of the Bonds remain on deposit
in the Project Fund established hereunder upon completion of the Project, as
set forth in Section 6.08 hereof.
(3) in whole, at any time, within one hundred
eighty (180) days after the occurrence of a Determination of Taxability, at a
redemption price of one hundred percent (100%) of the aggregate principal
amount of Bonds Outstanding plus accrued interest to the redemption date.
(c) Mandatory Sinking Fund Redemption. The Bonds are
subject to mandatory redemption on the Interest Payment Date occurring in the
month of May in each of the years set forth below commencing on the Interest
Payment Date occurring in May of 2003 (each, a "Mandatory Sinking Account
Payment Date"), at a redemption price equal to 100% of the principal amount
thereof plus accrued interest as follows:
Year Account Payments
---- ----------------
2003 $535,000
2004 $810,000
2005 $655,000
2006 $690,000
2007 $105,000
2008 $110,000
2009 $115,000
2010 $125,000
2011 $130,000
2012 $135,000
2013 $140,000
2014* $150,000
*maturity
SECTION 4.02. Optional Redemption. On or prior to the Conversion
Date, the Bonds are subject to redemption by the Authority, at the option of
the Borrower, at any time, subject to the provisions of Section 4.03 hereof,
in whole or in part, at a redemption price of 100% of the principal amount
thereof being redeemed plus accrued interest to the redemption date.
After the Conversion Date, (a) if the length of time from the
Conversion Date to the final maturity date of the Bonds is less than seven
(7) years, the Bonds are not subject to optional redemption; and (b) if the
length of time from the Conversion Date to the final maturity date is seven
(7) years or more, the Bonds are subject to redemption by the Authority, at
the option of the Borrower, on or after the fifth (5th) anniversary of the
Conversion Date, in whole or in part on any Interest Payment Date at the
redemption price of 100% of the principal amount thereof being redeemed plus
accrued interest to the redemption date.
Notwithstanding the foregoing, if, pursuant to a conversion from the
Floating Rate to the Fixed Rate in accordance herewith, the Remarketing Agent
certifies to the Trustee and the Borrower in writing that the foregoing call
restriction is not consistent with the then prevailing market conditions, the
foregoing call restriction may be revised in accordance with the best
professional judgment of the Remarketing Agent to reflect the then prevailing
market conditions; provided, however that the Borrower shall have consented
to such revision and shall have furnished the Trustee with an opinion
addressed to the Trustee, the Authority, the Borrower, the Bank and the
Remarketing Agent, if any at such time, of nationally recognized bond counsel
acceptable to the Borrower and the Trustee, stating that such revision will
not adversely affect the excludability from federal income taxation of
interest on the Bonds.
Notwithstanding the foregoing, no such optional redemption shall
occur unless on the redemption date there shall be sufficient Available
Moneys to pay all amounts due with respect to such a redemption.
SECTION 4.03. Notice of Redemption. So long as the Bonds are
registered in the name of DTC or its nominee, the Trustee shall cause notice
of any redemption of Bonds hereunder to be made in accordance with the Letter
of Representations. If at any time the book-entry-only system shall be
discontinued, notice of the call for redemption, identifying the Bonds or
portions thereof to be redeemed and the redemption price (including the
premium, if any), shall be given by the Trustee by mailing a copy of the
redemption notice by first class mail at least (i) ten (10) days prior to the
date fixed for a mandatory redemption pursuant to Section 4.01 (b) (1)
hereof, and (ii) thirty (30) days but not more than sixty (60) days prior to
the date fixed for redemption in all other instances to the Owner of each
Bond to be redeemed in whole or in part at the address shown on the
registration books. Such notice shall contain such matters specified in the
Bonds for the redemption thereof and shall state that such redemption is
conditional upon the receipt of monies by the Trustee for such purpose on or
prior to the redemption date. Any notice mailed as provided in this Section
shall be conclusively presumed to have been duly given, whether or not the
Owner receives the notice. The Trustee shall deliver a copy of any such
redemption notice to the Tender Agent, Borrower and to the Remarketing Agent.
SECTION 4.04. Interest on Bonds Called for Redemption. Upon the
giving of notice and the deposit of Available Moneys for redemption at the
required times on or prior to the date fixed for redemption, as provided in
this Article, interest on the Bonds or portions thereof thus called shall no
longer accrue after the date fixed for redemption.
SECTION 4.05. Cancellation. All Bonds which have been redeemed shall
not be reissued but shall be cancelled and destroyed by the Trustee in
accordance with Section 2.11 thereof.
SECTION 4.06. Partial Redemption of Bonds. (a) If less than all the
Bonds are to be redeemed, the particular Bonds or portions thereof to be
redeemed shall be selected by the Trustee by lot.
(b) Upon surrender of any Bond for redemption in part only,
the Authority shall execute and the Trustee shall authenticate and deliver to
the Owner thereof a new Bond or Bonds of authorized denominations, in an
aggregate principal amount equal to the unredeemed portion of the Bond
surrendered. If all or a portion of Bonds tendered for purchase pursuant to
Section 5.04 hereof have been selected by the Trustee for redemption, the
Tender Agent, upon receipt of such tendered Bonds, shall authenticate and
redeliver only such portion of tendered Bonds not subject to redemption. The
Tender Agent shall deliver to the tendering Bondholder a copy of the notice
of redemption, indicating the portion of the Bonds subject thereto, and upon
receipt of funds as provided herein, an amount representing the principal of
and interest on the Bonds not called for redemption. The principal of and
interest accrued on the Bonds called for redemption shall be paid to such
Bondholder on the redemption date. The Tender Agent shall cancel the Bond or
such portion thereof tendered for purchase and subject to redemption, and
shall deliver a certificate evidencing such cancellation and the cancelled
Bond to the Trustee.
(c) (i) Prior to the Conversion Date, in case a Bond is of
a denomination larger than $100,000, a portion of such Bond ($100,000 or any
integral multiple of $5,000 in excess thereof) may be redeemed, but Bonds
shall be redeemed only if the remaining unredeemed portion of such Bond is in
the principal amount of $100,000 or any integral multiple of $5,000 in excess
of $100,000.
(ii) After the Conversion Date, in case a Bond is
of a denomination larger than $5,000, a portion of such Bond ($5,000 or any
integral multiple thereof) may be redeemed, but Bonds shall be redeemed only
if the remaining unredeemed portion of such Bond is in the principal amount
of $5,000 or any integral multiple of $5,000.
(d) Notwithstanding anything to the contrary contained in
this Indenture, whenever the Bonds are to be redeemed in part, Bonds which
are Pledged Bonds at the time of selection of Bonds for redemption shall be
selected for redemption prior to the selection of any other Bonds. If the
aggregate principal amount of Pledged Bonds at the time of selection is less
than the amount available for the partial redemption of the Bonds, the
Trustee may select for redemption Bonds in an aggregate principal amount
equal to such excess in such manner as the Trustee in its discretion shall
deem fair and appropriate.
SECTION 4.07. Payment of Redemption Price with Available Moneys.
Notwithstanding any provision to the contrary contained in this Indenture,
the payment of the redemption price of Bonds shall be made only from
Available Moneys. On each date that the Bonds are subject to redemption, the
Trustee shall pay the full redemption price of the Bonds then subject to
redemption from the sources and in the order provided in Section 6.03 hereof.
ARTICLE V
CONVERSION OF INTEREST RATE;
DEMAND PURCHASE OPTION
SECTION 5.01. Conversion of Interest Rate on Conversion Date. (a)
The interest rate on the Bonds shall be converted from the Floating Rate to
the Fixed Rate, upon the exercise by the Borrower of the Conversion Option,
and the Bonds shall be subject to mandatory tender for purchase by the Owners
thereof on the Conversion Date. To exercise the Conversion Option, the
Borrower shall notify the Trustee, the Tender Agent, the Bank, the Authority
and the Remarketing Agent at least thirty-five (35) days prior to the
Conversion Date of such exercise, cause the Remarketing Agent to furnish to
the Trustee the information set forth in paragraphs 1, 2 and 6 below and,
thereafter cause the Trustee to deliver or mail by first class mail a notice
at least twenty (20) days but not more than thirty (30) days prior to the
Conversion Date to the Owner of each Bond at the address shown on the
registration books of the Bond Registrar. No such notice may be given unless
the Trustee first receives (i) an opinion of nationally recognized bond
counsel to the effect that the proposed conversion of the interest rate on
the Bonds will not cause the interest on the Bonds to be includable in gross
income of the Bondholders for federal income tax purposes, (ii) a commitment
from the Bank or a Substitute Bank to issue a Substitute Letter of Credit to
take effect on the Conversion Date, together with a form of such Substitute
Letter of Credit, and (iii) a Borrower certificate to the effect that each of
the Borrower's representations and warranties made in the Loan Agreement and
in any other agreements or certificates given by the Borrower in connection
with the issuance of the Bonds remain true and correct in all material
respects as of the proposed Conversion Date. Any notice given as provided in
this Section shall be conclusively presumed to have been duly given, whether
or not the Owner receives the notice. Said notice shall state in substance
the following:
1. The Conversion Date.
2. The method of computation of the Fixed Rate
which will take effect on the Conversion Date.
3. That from and after the Conversion Date the
Demand Purchase Option will no longer be available to Owners of Bonds.
4. That the existing Letter of Credit will expire
two (2) Business Days after the Conversion Date and that the Bonds are to be
secured by a Substitute Letter of Credit after the Conversion Date, and
stating the identity of the issuer of such Substitute Letter of Credit.
5. That unless firm commitments for the purchase
of all Outstanding Bonds have been received on or prior to the fifth (5th)
Business Day prior to the proposed Conversion Date, the Borrower has the
option to rescind an optional conversion of the Bonds.
6. That in the event the Borrower elects not to
rescind the optional conversion of the Bonds, although firm commitments have
not been received for the purchase of all Outstanding Bonds, all Bonds which
have not been remarketed on or prior to the Conversion Date shall be subject
to mandatory purchase on the Conversion Date pursuant to this Section 5.01.
7. That from and after the Conversion Date, the
rating then in effect on the Bonds, if any, may be reduced or may no longer
be maintained.
(b) on or prior to the Conversion Date, owners of Bonds
shall be required to deliver their Bonds to the Tender Agent at its Delivery
Office for purchase at the Purchase Price, and any such Bonds not delivered
to the Tender Agent on or prior to the Conversion Date ("Undelivered Bonds"),
for which there has been irrevocably deposited in trust with the Trustee or
the Tender Agent an amount of money sufficient to pay the Purchase Price of
the Undelivered Bonds, shall be deemed to have been purchased pursuant to
this Section 5.01 and are deemed to be no longer Outstanding with respect to
such prior Owners. IN THE EVENT OF A FAILURE BY AN OWNER OF BONDS TO DELIVER
ITS BONDS ON OR PRIOR TO THE CONVERSION DATE, SAID OWNER SHALL NOT BE
ENTITLED TO ANY PAYMENT (INCLUDING ANY INTEREST TO ACCRUE ON OR SUBSEQUENT TO
THE OPTIONAL CONVERSION DATE) OTHER THAN THE PURCHASE PRICE FOR SUCH
UNDELIVERED BONDS, AND ANY UNDELIVERED BONDS SHALL NO LONGER BE ENTITLED TO
THE BENEFITS OF THIS INDENTURE, EXCEPT FOR THE PURPOSE OF PAYMENT OF THE
PURCHASE PRICE THEREFOR.
(c) Notwithstanding the foregoing provisions, to the extent
that at the close of the fifth (5th) Business Day prior to the proposed
Conversion Date, the Remarketing Agent has not presented to the Borrower firm
commitments for the purpose of all of the Bonds, the Borrower, at its option,
may rescind an optional conversion of the Bonds. Any such election to rescind
must be made by the close of the fourth (4th) Business Day prior to the
proposed Conversion Date and the Borrower shall give written notice to the
Trustee, the Tender Agent and the Bank of its decision to rescind by each
time. The Borrower shall cause the Trustee to immediately notify the Owners
of such rescission and thereafter the Bonds shall bear interest at the
Floating Rate in effect for the current Weekly Period and thereafter the
Bonds shall bear interest at the Floating Rate applicable to such series of
Bonds until any subsequent Conversion Date effected in accordance with this
Indenture.
(d) In the event the Borrower rescinds the proposed
optional conversion in accordance with the terms of the foregoing paragraph,
the Letter of Credit then in effect will remain in effect in accordance with
its terms.
(e) The Bonds are subject to mandatory purchase in whole on
the Conversion Date at a Purchase Price equal to 100% of the principal amount
thereof being purchased, plus accrued interest to the purchase date;
provided, however, that (i) all Pledged Bonds for which a commitment to
purchase has not been received in connection with a conversion of the Bonds
to the Fixed Rate shall be redeemed or otherwise paid by the Borrower on or
before the Conversion Date; and (ii) no such mandatory purchase shall take
place in the event the Borrower exercises its right to rescind the optional
conversion.
SECTION 5.02. Delivery of Bonds After Conversion Date. At any time
prior to the Record Date preceding the first Interest Payment Date following
the Conversion Date, the Trustee or the Tender Agent, as the case may be,
shall deliver Bonds in the form of Exhibit B hereto. Prior to the delivery by
the Trustee of such Bonds, there shall be filed with the Trustee a request
and authorization to the Trustee on behalf of the Authority and signed by the
Chairman, Vice Chairman, Secretary, Assistant Secretary or any authorized
officer of the Authority to authenticate and deliver the Bonds, as executed
by the Authority, to the purchasers thereof. Such delivery shall be made by
the Trustee or the Tender Agent, as the case may be, without making any
charge therefor to the Owner of such Bonds.
SECTION 5.03. Mandatory Tender upon Substitution of Letter of
Credit. Prior to the Conversion Date, the Bonds are subject to mandatory
purchase in whole on the Substitution Date, at a purchase price equal to 100%
of the principal amount thereof being purchased, plus accrued interest to the
purchase date. The Trustee shall deliver or mail by first class mail a notice
at least twenty (20) days but not more than thirty (30) days prior to the
Substitution Date to the Owner of each Bond at the address shown on the
registration books of the Bond Registrar notifying such Owner that their
Bonds are subject to mandatory purchase. No such notice may be given unless
the Borrower shall have satisfied the provisions of Section 4.07 of the Loan
Agreement. Any notice given as provided in this Section 5.03 shall be
conclusively presumed to have been given, whether or not the Owner receives
the notice. Said notice shall state in substance the following:
1. The Substitution Date.
2. That the existing Letter of Credit securing such Bonds
will expire two (2) Business Days after the Substitution Date.
3. That if the Borrower satisfies the conditions precedent
to delivery of the Substitute Letter of Credit, all Bonds shall be subject to
mandatory purchase on the Substitution Date pursuant to this Section 5.03.
On or prior to the Substitution Date, Owners of Bonds shall be
required to deliver their Bonds to the Tender Agent for purchase at the
Purchase Price, and any such Bonds not delivered to the Tender Agent on or
prior to the Substitution Date ("Undelivered Bonds"), for which there has
been irrevocably deposited in trust with the Trustee or Tender Agent an
amount of Available Money sufficient to pay the Purchase Price of the
Undelivered Bonds, shall be deemed to have been purchased pursuant to this
Section 5.03 and are deemed to no longer Outstanding with respect to such
prior Owners. IN THE EVENT OF A FAILURE BY AN OWNER OF BONDS TO DELIVER ITS
BONDS ON OR PRIOR TO THE SUBSTITUTION DATE, SAID OWNER SHALL NOT BE ENTITLED
TO ANY PAYMENT (INCLUDING ANY INTEREST TO ACCRUE ON OR SUBSEQUENT TO THE
SUBSTITUTION DATE) OTHER THAN THE PURCHASE PRICE FOR SUCH UNDELIVERED BONDS,
AND ANY UNDELIVERED BONDS SHALL NO LONGER BE ENTITLED TO THE BENEFITS OF THIS
INDENTURE, EXCEPT FOR THE PURPOSE OF PAYMENT OF THE PURCHASE PRICE THEREFOR.
Notwithstanding the foregoing provisions, to the extent that at the
close of the fifth Business Day prior to the proposed Substitution Date, the
Borrower has not delivered to the Authority, the Trustee and the Remarketing
Agent the items set forth in Section 4.07(i) through (iii) of the Loan
Agreement, the mandatory purchase of Bonds shall be rescinded and the Trustee
shall notify the Owners of such rescission immediately and thereafter the
Bonds shall continue to be secured by the existing Letter of Credit in
accordance with its terms until its termination date.
SECTION 5.04. Demand Purchase Option. Prior to the Conversion Date,
any Bond shall be purchased at the Purchase Price from the owner thereof
upon:
(i) delivery by such Owner to the Trustee and the Tender
Agent at their Principal Office and Delivery Office, respectively, and to the
Remarketing Agent at its Principal office, of a notice (the "Demand Purchase
Notice") (said notice to be irrevocable and effective upon receipt) which
states (1) the aggregate principal amount and bond numbers of the Bonds to be
purchased; and (2) the date on which such Bonds are to be purchased, which
date shall be a Business Day not prior to the seventh (7th) day next
succeeding the date of delivery of such notice and which date shall be prior
to the Conversion Date; and
(ii) delivery to the Tender Agent at its Delivery Office at
or prior to 10:00 a.m., New York City time, on the date designated for
purchase in the applicable Demand Purchase Notice of such Bonds to be
purchased, with an appropriate endorsement for transfer or accompanied by a
bond power endorsed in blank.
Any Bond, as to which a Demand Purchase Notice has been delivered
pursuant to paragraph (i) above, must be delivered to the Tender Agent, as
provided in paragraph (ii) above, and any such Undelivered Bonds, for which
there has been irrevocably deposited in trust with the Trustee or the Tender
Agent an amount of Available Money sufficient to pay the Purchase Price
thereof, shall be deemed to have been purchased at the Purchase Price
pursuant to this Section 5.04 and are deemed to be no longer Outstanding with
respect to such tendering Owner. IN THE EVENT OF A FAILURE BY AN OWNER OF
BONDS TO DELIVER ITS BONDS AS SPECIFIED ABOVE, SAID OWNER SHALL NOT BE
ENTITLED TO ANY PAYMENT (INCLUDING INTEREST TO ACCRUE ON OR SUBSEQUENT TO THE
DATE DESIGNATED FOR PURCHASE IN THE APPLICABLE DEMAND PURCHASE NOTICE) OTHER
THAN THE PURCHASE PRICE FOR SUCH UNDELIVERED BONDS, AND ANY UNDELIVERED BONDS
SHALL NO LONGER BE ENTITLED TO THE BENEFITS OF THE INDENTURE, EXCEPT FOR THE
PAYMENT OF THE PURCHASE PRICE THEREFOR.
Notwithstanding the foregoing provisions, in the event any Bonds as
to which the Owner thereof has exercised the Demand Purchase Option is
remarketed to such owner pursuant to the Remarketing Agreement, such Owner
need not deliver such Bond to the Tender Agent as provided in paragraph (iii)
above, although such Bonds shall be deemed to have been delivered to the
Tender Agent, redelivered to such Owner, and remarketed for purposes of this
Indenture, including, without limitation, for purposes of adjusting the
Floating Rate applicable to such Bond as provided in Section 2.02(c) hereof.
SECTION 5.05. Funds for Purchase of Bonds. (a) on the date Bonds are
to be purchased pursuant to Section 5.01, 5.03 or Section 5.04 hereof, such
Bonds shall be purchased at the Purchase Price only from the funds listed
below. Subject to the provisions of Section 6.12(b), funds for the payment of
the Purchase Price shall be derived from the following sources in the order
of priority indicated:
(i) moneys drawn by the Trustee under the Letter
of Credit (in the event of a draw on the Letter of Credit to fund payment of
the Purchase Price of Bonds tendered pursuant to Section 5.03 hereof, the
Trustee shall draw on the existing Letter of Credit and not the Substitute
Letter of Credit);
(ii) proceeds of the remarketing of the Bonds; and
(iii) any other Available Moneys furnished to the
Trustee, or the Tender Agent and available for such purpose.
(b) Payment for the Bonds purchased pursuant to Section
5.01, 5.03 or 5.04 shall be made as follows:
(i) By not later than 10:00 a.m., New York City
time, on the date on which such Bonds are to be purchased (the "Purchase
Date"), the Remarketing Agent shall give telephonic notice promptly confirmed
in writing to the Bank, the Trustee and the Tender Agent, specifying:
(1) The total principal amount of Bonds,
if any, remarketed by it, and the total principal amount of unremarketed
Bonds; and
(2) The names of the persons to whom
such Bonds were sold and are to be registered, each such person's address and
social security number or taxpayer identification number, the denominations
in which replacement Bonds are to be prepared, and any other appropriate
registration and transfer instructions.
(ii) On the Purchase Date, the Trustee shall make
a drawing pursuant to the Letter of Credit in respect of the Purchase Price
of such Bonds. In connection therewith, the Trustee shall prepare and present
to the Bank the appropriate certificates required under the Letter of Credit
by 11:00 a.m., New York City time, on the Purchase Date.
(iii) There is hereby established with the Tender
Agent a special fund to be designated the "Bond Purchase Fund" and therein
two separate and segregated accounts to be designated the "Remarketing
Account" and the "Bank Account." An amount equal to the proceeds received by
the Trustee pursuant to a draw under the Letter of Credit shall be
transferred by the Trustee in immediately available funds to the Tender Agent
for deposit in the Bank Account no later than 12:30 p.m., New York City time,
on the applicable Purchase Date.
(iv) No later than 1:00 p.m., New York City time,
on each Purchase Date the Tender Agent shall give telephonic notice (promptly
confirmed by telecopy) to the Remarketing Agent of the amount deposited in
the Bank Account on such date. No later than 2:00 p.m., New York City time,
on each Purchase Date the Remarketing Agent shall (A) transfer to the Bank an
amount of the proceeds of the remarketing of the Bonds equal to the amount
deposited in the Bank Account on such Purchase Date; and (B) transfer the
remainder of the proceeds of the remarketing of the Bonds to the Tender Agent
for deposit in the Remarketing Account and shall give telephonic notice
(promptly confirmed by telecopy) to the Tender Agent of the amount of such
proceeds transferred to the Bank.
(v) The Tender Agent shall pay the Purchase Price
to the tendering Bondholders from the amounts on deposit in the Bank Account
to the extent available. If amounts on deposit in the Bank Account are
insufficient to pay the Purchase Price to the tendering Bondholders, the
Tender Agent shall make up such deficiency from amounts on deposit in the
Remarketing Account.
(vi) The Bank shall give telephonic confirmation
to the Tender Agent and the Trustee by 4:00 p.m., New York City time, on the
applicable Purchase Date of its receipt of the remarketing proceeds described
in Section 5.05(b)(iv) hereof.
SECTION 5.06. Delivery of Purchased Bonds. (a) Remarketed Bonds
shall be delivered by the Tender Agent, at its Delivery Office, to or upon
the order of the purchasers thereof.
(b) Unremarketed Bonds purchased with funds drawn under the
Letter of Credit shall be delivered by the Tender Agent to the Pledged Bonds
Custodian or otherwise upon the order of the Bank pursuant to the Pledge
Agreement.
(c) Unremarketed Bonds purchased with moneys described in
Section 5.05(a)(iii) hereof shall, at the direction of the Borrower, be (i)
delivered as instructed by the Borrower, or (ii) delivered to the Trustee for
cancellation; provided, however, that any Bonds so purchased after the
selection thereof by the Trustee for redemption shall be delivered to the
Trustee for cancellation.
Bonds delivered as provided in this Section shall be registered in
the manner directed by the recipient thereof.
SECTION 5.07. Sale of Bonds by Remarketing Agent. On each Purchase
Date, the Remarketing Agent shall offer for sale and use its best efforts to
sell, as agent of the Borrower, all Bonds tendered or deemed tendered for
purchase on such Purchase Date at the Purchase Price thereof and, if such
Bonds are not sold on such date, the Remarketing Agent shall continue, for a
period not in excess of thirty (30) days thereafter, to use its best efforts
to sell such Bonds. Notwithstanding the foregoing, the Remarketing Agent
shall not sell the Bonds to the Authority or the Borrower.
SECTION 5.08. Delivery of Proceeds of Sale of Purchased Bonds. (a)
Except in the case of the sale of any Pledged Bonds, the proceeds of the sale
of any Bonds delivered or deemed delivered to the Tender Agent pursuant to
Section 5.01, 5.03 or 5.04 hereof, to the extent not required to reimburse
the Bank under the Reimbursement Agreement, shall be paid to or upon the
order of the Trustee.
(b) In the event the Remarketing Agent shall have
remarketed any Pledged Bonds and the Borrower or the Remarketing Agent shall
have directed the Bank to cause the Pledged Bonds Custodian to deliver such
Pledged Bonds to the Tender Agent pursuant to the Pledge Agreement, such
Bonds shall be delivered to the Tender Agent and the proceeds of sale of such
Bonds shall be delivered to the Delivery Office of the Tender Agent and shall
be paid to or upon the order of the Bank; provided that any amounts so paid
in excess of amounts then due to the Bank in respect of drawings under the
Letter of Credit shall be delivered by the Bank to or upon the order of the
Borrower; provided further that Pledged Bonds shall not be delivered to the
Tender Agent until the Letter of Credit has been reinstated in accordance
with the terms of the Reimbursement Agreement and the Letter of Credit.
SECTION 5.09. Duties of Trustee and Tender Agent with Respect to
Purchase of Bonds. (a) The Tender Agent shall hold all Bonds delivered to it
pursuant to Sections 5.01, 5.03 or 5.04 hereof in trust for the benefit of
the respective Owners of Bonds which shall have so delivered such Bonds until
moneys representing the Purchase Price of such Bonds shall have been
delivered to or for the account of or to the order of such Owners of Bonds.
Upon delivery of moneys representing the Purchase Price of such Bonds to or
for the account of or to the order of such Owners of Bonds, the Tender Agent
shall deliver all such Unremarketed Bonds, the funds for which shall have
been obtained by a drawing under the Letter of Credit, to the Pledged Bonds
Custodian pursuant to Section 5.06(b) hereof for the purpose of perfecting
the Bank's security interest therein under the Pledge Agreement unless the
Bank shall direct the Tender Agent to deliver such Bonds to or upon the order
of the Bank in accordance with Section 5.06 hereof.
(b) The Trustee and the Tender Agent shall hold all moneys
delivered to them pursuant to this Indenture for the purchase of Bonds in a
separate account, in trust for the benefit of the Bank or, in the case of
remarketed Bonds, the purchasers of such Bonds, until the Bonds purchased
with such moneys shall have been delivered to or for the account of the
Pledged Bonds Custodian, the Bank or to such other purchaser, as appropriate.
(c) The Trustee shall deliver to the Borrower and the Bank
a copy of each notice delivered to it in accordance with Section 5.04 within
two (2) Business Days of the receipt thereof.
(d) As soon as possible, but not later than the close of
business on any date designated for purchase of Bonds in accordance with
Section 5.04, the Tender Agent shall give telephonic or telegraphic notice to
the Remarketing Agent and the Trustee specifying the principal amount of
Bonds delivered or deemed delivered for purchase on such date.
(e) The Trustee shall draw moneys under the Letter of
Credit in accordance with the terms thereof to the extent required by
Sections 5.05 and 6.12 hereof to provide for timely payment of the Purchase
Price of Bonds.
SECTION 5.10. No Purchases or Sales After Certain Defaults. Anything
in this Indenture to the contrary notwithstanding, there shall be no
purchases or sales of Bonds pursuant to Section 5.04 if there shall have
occurred any Event of Default in respect of which the principal of all Bonds
outstanding shall have been declared immediately due and payable pursuant to
Section 8.02 and such declaration shall not have been annulled. If the
Trustee shall have given notice of a call for redemption pursuant to Section
4.03 hereof and such notice shall not have been rescinded, the Remarketing
Agent shall provide a notice of such redemption to any prospective purchaser
of such Bonds upon the remarketing of any Bonds tendered pursuant to Section
5.04 hereof. Nothing in this Section is intended to limit secondary trading
or transfer of the Bonds.
ARTICLE VI
REVENUES AND FUNDS
SECTION 6.01. Creation of the Bond Fund. There is hereby created and
established with the Trustee a trust fund to be designated "Bond Fund." Upon
receipt of moneys pursuant to Section 6.02 hereof, the Trustee shall deposit
such moneys into the specified accounts of the Bond Fund, which amounts shall
be used to pay when due the principal and Purchase Price of, premium, if any,
and interest on the Bonds.
SECTION 6.02. Payments into the Bond Fund. There shall be deposited
into the Bond Fund from time to time the following:
(a) any amount in the Project Fund directed to be paid
into the Bond Fund in accordance with the provisions of Section 6.07 hereof;
(b) any amount deposited into the Bond Fund pursuant to
Section 6.04 hereof;
(c) all payments specified in Sections 3.03 and 3.04 of
the Loan Agreement (other than amounts paid for the Trustee's or the
Authority's own account);
(d) any moneys drawn under the Letter of Credit to be used
for the payment of principal or Purchase Price of, and interest on the Bonds
which moneys shall be deposited or credited in a separate subaccount of the
Bond Fund and shall not be commingled with any other moneys held by the
Trustee; and
(e) all other moneys received by the Trustee under and
pursuant to any of the provisions of the Loan Agreement which are required to
be or which are accompanied by directions that such moneys are to be paid
into the Bond Fund.
SECTION 6.03. Use of Moneys in the Bond Fund. Except as provided in
Section 6.11 hereof, moneys in the Bond Fund shall be used solely for the
payment of the principal of, premium, if any, and interest on the Bonds, for
the redemption of the Bonds prior to maturity and for payment of the
Acceleration Price as defined in Section 8.02 hereof. Subject to the
provisions of Section 6.12(b) hereof, funds for such payments of the
redemption price and principal of and premium, if any, and interest on the
Bonds shall be derived from the following sources in the order of priority
indicated:
(i) amounts deposited into the Bond Fund which constitute
Available Moneys (and in connection with moneys drawn by the Trustee under
the Letter of Credit, the Trustee shall prepare and present to the Bank the
appropriate certificates required under the Letter of Credit by 12:00 noon,
New York City time, on the Business Day immediately preceding the payment
date); and
(ii) any other moneys furnished to the Trustee and
available for such purpose.
SECTION 6.04. Custody of Separate Trust Fund. The Trustee is
authorized and directed to hold all Net Proceeds from any insurance proceeds
or condemnation award and disburse such proceeds in accordance with Article
VI of the Loan Agreement. If the Borrower, with the prior written consent of
the Bank (provided the Bank is not then in default under the Letter of
Credit), directs that any portion of such Net Proceeds be applied to redeem
Bonds, the Trustee shall deposit such Net Proceeds in a separate subaccount
of the Bond Fund, and the Authority covenants and agrees to take and cause to
be taken any action requested by the Authority to redeem on the earliest
possible redemption date the amount of Bonds so specified by the Borrower.
SECTION 6.05. Project Fund. There is hereby created and established
with the Trustee a trust fund to be designated "Project Fund," which shall be
expended in accordance with the provisions hereof and of the Loan Agreement.
The Project Fund shall consist of funds deposited therein, from time to time,
pursuant to the provisions hereof, for purposes of paying Qualified Project
Costs of the Project.
SECTION 6.06. Payments into the Project Fund; Disbursements. The
Project Fund shall initially consist of those moneys deposited therein
pursuant to Section 3.03(c) hereof. Proceeds of the Bonds deposited in the
Project Fund shall be applied to pay a portion of the costs of the Project.
The Trustee is hereby authorized and directed to make disbursements from the
Project Fund upon the receipt of a requisition in the form of Exhibit C
hereto signed by the Borrower and approved in writing by the Bank. The
Trustee shall keep and maintain adequate records pertaining to the Project
Fund and all disbursements therefrom, including records of all requisitions
made pursuant to the Loan Agreement and the Trust Indenture, and the Trustee
shall, upon request of the Borrower, furnish statements in the form
customarily prepared by the Trustee. The Trustee shall hold all moneys and
investments from time to time on deposit in the Project Fund for the Owners
and for the Bank in order to secure payment of the obligations of the
Borrower under the Reimbursement Agreement, the rights of the Bank being
subject and subordinate to the rights of the Trustee so long as any amount
due in respect of the Bonds remains unpaid.
SECTION 6.07. Use of Money in the Project Fund Upon Default. If the
principal of the Bonds shall have become due and payable pursuant to Article
VIII hereof, any balance remaining in the Project Fund shall without further
authorization (i) prior to the Obligation Termination Date, if any amounts
are due and owing under the Reimbursement Agreement, be transferred
immediately to the Bank, as long as the Bank is not in default of its
obligations under the Letter of Credit, or (ii) after the Obligation
Termination Date, be transferred into the Bond Fund.
SECTION 6.08. Use of Money in the Project Fund Upon Completion of
the Project. The completion of the Project and payment or provision for
payment of all Costs of the Project shall be evidenced by the filing with the
Trustee of the certificate required by Section 2.03 of the Loan Agreement. As
soon as practicable and in any event not more than sixty (60) days from the
date of receipt by the Trustee of the certificate referred to in the
preceding sentence, any balance remaining in the Project Fund (except amounts
the Borrower shall have directed the Trustee to retain for any Cost of the
Project not then due and payable) shall, without further authorization be
transferred into a separate subaccount within the Bond Fund. Thereafter, the
Trustee shall cause a mandatory redemption of the Bonds in accordance with
the terms of Section 4.01(b)(2) hereof in an amount such that the funds
transferred to the Bond Fund pursuant to this Section 6.08 will be sufficient
to reimburse the Letter of Credit Bank for the redemption price of the Bonds.
On the date fixed for redemption, the Trustee (i) shall draw on the Letter of
Credit in an amount sufficient to pay the full redemption price of the Bonds
from the sources and in the order provided in Section 6.03 hereof and (ii)
transfer to the Letter of Credit Bank funds from the separate subaccount
within the Bond Fund created pursuant to this Section 6.08 to reimburse the
Bank for such drawing. If the sum transferred to the Bond Fund pursuant to
this Section 6.08 is not sufficient to effect a mandatory redemption of the
Bonds in accordance with the terms of Section 4.01(b)(2) hereof or if there
are any excess funds remaining in the Bond Fund after such mandatory
redemption, such funds shall be transferred by the Trustee on the next
Interest Payment Date to the Letter of Credit Bank to reimburse the Letter of
Credit Bank for a drawing effected pursuant to Section 6.12 hereof.
SECTION 6.09. Nonpresentment of Bonds. In the event any Bond shall
not be presented for payment when the principal thereof becomes due, either
at maturity, or at the date fixed for redemption thereof, or otherwise, if
Available Moneys sufficient to pay any such Bond shall have been made
available to the Trustee for the benefit of the Owner thereof, all liability
of the Authority to the owner thereof for the payment of such Bond shall
forthwith cease, determine and be completely discharged, and thereupon it
shall be the duty of the Trustee to hold such funds uninvested, without
liability for interest thereon, for the benefit of the owner of such Bond who
shall thereafter be restricted exclusively to such funds for any claim of
whatever nature on his part under this Indenture with respect to such Bond.
Any moneys so deposited with and held by the Trustee not so applied
to the payment of Bonds within five (5) years after the date on which the
same shall have become due shall be repaid by the Trustee to the Borrower
upon written direction of an Authorized Representative, and thereafter owners
of Bonds shall be entitled to look only to the Borrower for payment, and then
to the extent of the amount so repaid, and all liability of the Trustee with
respect to such money shall thereupon cease, and the Borrower shall not be
liable for any interest thereon and shall not be regarded as a trustee of
such money.
SECTION 6.10. Moneys to be Held in Trust. Except as otherwise
provided in Section 6.13 with respect to the Rebate Fund, all moneys required
to be deposited with or paid to the Trustee for the account of any fund or
account referred to in any provision of this Indenture or the Loan Agreement
shall be held by the Trustee in trust, and (except for the moneys from time
to time required to be deposited and maintained in the Rebate Fund) shall,
while held by the Trustee, constitute part of the Trust Estate and be subject
to the lien and security interest created hereby.
SECTION 6.11. Repayment to the Bank and the Borrower from the Bond
Fund, the Rebate Fund or the Project Fund. Any amounts remaining in the Bond
Fund, the Project Fund, the Rebate Fund or any other fund or account created
hereunder after payment in full of the principal of, premium, if any, and
interest on the Bonds, the fees, charges and expenses of the Trustee and all
other amounts required to be paid hereunder, including payment to the United
States of America of the final installment of the Rebate Amount, if any,
pursuant to Section 6.13 hereof, shall be paid as soon as possible to the
Bank unless the Bank notifies the Trustee to the contrary in writing, in
which case such amounts shall be paid directly to the Borrower.
SECTION 6.12. Letter of Credit. (a) During the term of the Letter of
Credit, and subject to Sections 4.07 and 6.03 hereof, the Trustee shall draw
moneys under the Letter of Credit in accordance with the terms thereof (i) to
pay when due (whether by reason of maturity, redemption, conversion,
acceleration or otherwise) the principal of, and interest and, to the extent
the Letter of Credit covers same, any premium on the Bonds, and (ii) to pay
when due the Purchase Price of the Bonds.
(b) Notwithstanding any provision to the contrary which may
be contained in this Indenture, including, without limitation, Section
6.12(a) (i) in computing the amount to be drawn under the Letter of Credit on
account of the payment of the principal or Purchase Price of, interest or, to
the extent the Letter of Credit covers same, any premium on the Bonds, the
Trustee shall exclude any such amounts in respect of any Bonds which are
Pledged Bonds prior to the date such payment is due, and (ii) amounts drawn
by the Trustee under the Letter of Credit shall not be applied to the payment
of the Purchase Price of any Bonds which are Pledged Bonds prior to the date
such payment is due.
(c) The Letter of Credit shall terminate in accordance with
its terms on the Letter of Credit Termination Date. Upon such termination,
the Trustee shall deliver the terminated Letter of Credit to the Bank,
together with such certificates as may be required by the terms of the Letter
of Credit.
SECTION 6.13. Rebate Fund. (a) The Trustee shall establish and
maintain a fund separate from any other fund established and maintained
hereunder designated as the Rebate Fund. The Rebate Fund shall be held for
the benefit of the United States of America and not for the benefit of the
Holders of the Bonds or the Bank, which Holders or the Bank shall have no
rights in or to such fund.
(b) Subject to subsection (c) of this Section 6.13, as of
the last day of each fifth Bond Year (the "Rebate Computation Date"), the
Borrower, on behalf of the Authority, shall calculate or cause to be
calculated the amount required to be paid to the United States of America
(the "Rebatable Arbitrage") pursuant to Section 148 of the Code. On or before
the sixtieth (60th) day after such date, the Trustee at the written direction
of, and upon the receipt of funds from, the Borrower shall deposit in the
Rebate Fund the amount, if any, needed to increase the amount in such Fund to
an amount equal to ninety percent (90%) of the Rebatable Arbitrage for the
period from the date of issuance of the Bonds to the Rebate Computation Date
at issue, or shall transfer from the Rebate Fund to the Bond Fund the amount,
if any, needed to reduce the amount in the Rebate Fund to ninety percent
(90%) of the amount of the Rebatable Arbitrage for such period.
Subject to subsection (c) of this Section 6.13, as of the last day
on which the last remaining Outstanding Bond is retired (the "Final
Computation Date"), the Borrower, on behalf of the Authority, shall
calculate, or cause to be calculated, the amount required to be paid to the
United States of America pursuant to Section 148 of the Code. on or before
the sixtieth (60th) day after such date, the Trustee, at the written
direction of, and upon the receipt of funds from, the Borrower, shall deposit
in the Rebate Fund the amount, if any, needed to increase the amount in such
Fund to an amount equal to the Rebatable Arbitrage for the period from the
date of issuance of the Bonds to the Final Computation Date, or shall
transfer from the Rebate Fund to the Bond Fund the amount, if any, needed to
reduce the amount in the Rebate Fund to the amount of the Rebatable Arbitrage
for such period.
After making any transfer required for a Rebate Computation Date and
the Final Computation Date, the Authority shall immediately pay or cause to
be paid to the United States of America the amount in the Rebate Fund. The
amounts in the Rebate Fund shall not be subject to the claim of any party,
including any Bondholder or the Bank, and shall not be paid to any party
other than the United States.
All amounts in the Rebate Fund shall be used and withdrawn by the
Authority or the Trustee solely for the purposes set forth in this Section.
In the event the amount in the Rebate Fund is for any reason insufficient to
pay to the United States of America the amounts due as calculated in this
Section, the Borrower or the Trustee at the direction of, and upon the
receipt of funds from, the Borrower, shall deposit in the Rebate Fund the
amount for such deficiency.
(c) Notwithstanding the provisions of this Section 6.13,
the Borrower, on behalf of the Authority, ▇▇▇▇▇▇ agrees to calculate the
amount to be deposited in the Rebate Fund and the amount to be rebated to the
United States of America pursuant to Section 148(f) of the Code in any manner
not inconsistent with its arbitrage covenants set forth in the Tax Compliance
Agreement and the Loan Agreement delivered on the date of issuance of the
Bonds. Such calculation shall give regard to all regulations applicable to
such Section 148(f) including any temporary regulations heretofore or
hereafter released.
(d) The Authority and the Borrower agree that the Trustee
shall not be liable for any damages, costs or liabilities resulting from the
performance of the Trustee's duties and obligations under Section 6.13
hereof, except that the Trustee shall be liable for its gross negligence or
willful misconduct. The Borrower shall indemnify and hold the Trustee and its
directors, officers, agents and employees (collectively, the Indemnitees")
harmless from and against any and all claims, liabilities, losses, damages,
fines, penalties and expenses, including out-of-pocket, incidental expenses,
legal fees and expenses and the allocated costs and expenses of in-house
counsel and legal staff ("Losses") that may be imposed on, incurred by or
asserted against, the Indemnitees or any of them for following any
instructions or other directions upon which the Trustee is authorized to rely
pursuant to this Section 6.13. In addition to and not in limitation of the
immediately preceding sentence, the ▇▇▇▇▇▇▇▇ also agrees to indemnify and
hold the Indemnitees and each of them harmless from and against any and all
Losses that may be imposed on, incurred by or asserted against the
Indemnitees or any of them in connection with or arising out of the Trustee's
exercise or performance of its duties and obligations under this Section
6.13, provided the Trustee has not acted with gross negligence or engaged in
willful misconduct. The provisions of this Section 6.13 shall survive the
termination of this Indenture and the resignation or removal of the Trustee
for any reason. In making any deposit or transfer to or payment from the
Rebate Fund, the Trustee shall be entitled to rely solely on the written
instructions of the Borrower and shall have no duty to examine such written
instruments to determine the accuracy of the Borrower's calculation of the
Rebate Amount or the amounts to be paid to the United States. In the event
that the Borrower or the Authority shall not comply with their respective
obligations under Section 6.13 of this Indenture, the Trustee shall have no
obligation to cause compliance on their respective behalf.
SECTION 6.14. Investment of Moneys in Funds. All moneys in any of
the funds established pursuant to this Indenture (except moneys obtained from
a draw on the Letter of Credit) shall be invested by the Trustee, as directed
in writing by the Borrower, solely in Investment Securities except with
respect to Available Moneys held by the Trustee for the payment of
Undelivered Bonds, which Available Moneys the Trustee shall not invest.
Investment Securities may be purchased at such prices as the Trustee may in
its discretion determine or as may be directed by the Borrower. Absent
written investment directions from the Borrower, the Trustee shall invest
available fund balances in investments described in subparagraph (ix) of the
definition of Investment Securities. All Investment Securities shall be
acquired subject to the limitations set forth in Section 7.06, the
limitations as to maturities hereinafter in this Section set forth and such
additional limitations or requirements consistent with the foregoing as may
be established by request of the Borrower. The Borrower shall be responsible
for selecting Investment Securities that are legal investments under the laws
of the State.
To the extent the Bank has not been reimbursed under the
Reimbursement Agreement and has notified the Trustee of same in writing, all
interest, profits and other income received from the investment of moneys in
any fund established pursuant to this Indenture shall be transferred to the
Bank in the amount specified by the Bank. Otherwise, such amounts shall be
deposited to the appropriate fund or account in which such investments were
made. Notwithstanding anything to the contrary contained in this paragraph,
an amount of interest received with respect to any Investment Security equal
to the amount of accrued interest, or premium paid, if any, paid as part of
the purchase price of such Investment Security shall be credited to the fund
from which such accrued interest was paid.
Investment Securities acquired as an investment of moneys in any
fund established under this Indenture shall be credited to such fund. For the
purpose of determining the amount in any fund, all Investment Securities
credited to such fund shall be valued at the lesser of cost or par value
plus, prior to the first payment of interest following purchase, the amount
of accrued interest, if any, paid as a part of the purchase price.
The Trustee may act as principal or agent in the making or disposing
of any investment. The Trustee may sell at the best price obtainable, or
present for redemption, any Investment securities so purchased whenever it
shall be necessary to provide moneys to meet any required payment, transfer,
withdrawal or disbursement from the fund to which such Investment Security is
credited. The Trustee shall not be liable or responsible for any loss or
depreciation in value resulting from such investment made in accordance with
this Section 6.14.
ARTICLE VII
PARTICULAR COVENANTS
SECTION 7.01. Punctual Payment. The Authority shall punctually pay
or cause to be paid the principal, premium, if any, and interest to become
due in respect of all the Bonds, in strict conformity with the terms of the
Bonds and of this Indenture, according to the true intent and meaning
thereof, but only out of Revenues and other assets pledged for such payment
as provided in this Indenture.
SECTION 7.02. Extension of Payment of Bonds. The Authority shall not
directly or indirectly extend or assent to the extension of the maturity of
any of the Bonds or the time of payment of any claims for interest by the
purchase or funding of such Bonds or claims for interest or by any other
arrangement and in case the maturity of any of the Bonds or the time of
payment of any such claims for interest shall be extended, such Bonds or
claims for interest shall not be entitled, in case of any default hereunder,
to the benefits of this Indenture, except subject to the prior payment in
full of the principal of all of the Bonds then outstanding and of all claims
for interest thereon which shall not have been so extended. Nothing in this
Section shall be deemed to limit the right of the Authority to issue Bonds
for the purpose of refunding any Outstanding Bonds, and such issuance shall
not be deemed to constitute an extension of maturity of Bonds.
SECTION 7.03. Against Encumbrances. The Authority shall not create,
or permit the creation of, any pledge, lien, charge or other encumbrance upon
the Revenues and other assets pledged or assigned under this Indenture while
any of the Bonds are Outstanding, except the pledge and assignment created by
this Indenture and will assist the Trustee in contesting any such pledge,
lien, charge or other encumbrance which may be created. Subject to this
limitation, the Authority expressly reserves the right to enter into one or
more other indentures for any of its corporate purposes, including other
programs under the Act, and reserves the right to issue other obligations for
such purposes.
SECTION 7.04. Power to Issue Bonds and Make Pledge and Assignment.
The Authority represents and covenants that it is duly authorized pursuant to
law to issue the Bonds and to enter into this Indenture and to pledge and
assign the Revenues and other assets pledged and assigned, respectively,
under this Indenture in the manner and to the extent provided in this
Indenture. The Bonds and the provisions of this Indenture are and will be the
legal, valid and binding limited obligations of the Authority in accordance
with their terms, and the Authority and the Trustee, subject to the
provisions of Article IX hereof, shall at all times, to the extent permitted
by law, defend, preserve and protect said pledge and assignment of Revenues
and other assets and all the rights of the Bondholders under this Indenture
against all claims and demands of all Persons whomsoever.
SECTION 7.05. Accounting Records and Financial Statements. (a) The
Trustee shall at all times keep, or cause to be kept, proper books of record
and account as shall be consistent with prudent corporate trust industry
practice, in which complete and accurate entries shall be made of all
transactions relating to the proceeds of Bonds, the Revenues, the payments
under the Loan Agreement and all funds established pursuant to this
Indenture. Such books of record and account shall be available for inspection
by the Authority, the Borrower, the Bank and any Bondholder, or his agent or
representative duly authorized in writing, at reasonable hours and under
reasonable circumstances subject to prior written notice to the Trustee.
(b) The Trustee shall within thirty (30) days after the end
of each month furnish to the Borrower a monthly statement (which need not be
audited) covering receipts, disbursements, allocation and application of
Revenues and any other moneys (including proceeds of Bonds) in any of the
funds and accounts established pursuant to this Indenture for such month.
SECTION 7.06. Tax Covenants. The Borrower has covenanted not to take
any action, or fail to take any action, if any such action or failure to take
action would adversely affect the exclusion from gross income of the interest
on the Bonds under Section 103 and Sections 141 through 150, inclusive, of
the Code. The Authority and the Borrower will not directly or indirectly use
or permit the use of any proceeds of the Bonds or any other funds of the
Authority or the Borrower, or take or omit to take any action that would
cause the Bonds to be "arbitrage bonds" within the meaning of Section 148(a)
of the Code. To that end, the Authority and the Borrower will comply with all
requirements of Section 148 of the Code to the extent applicable to the
Bonds. In the event that any time the Authority or the Borrower is of the
opinion that for purposes of this Section 7.06 it is necessary to restrict or
limit the yield on the investment of any moneys held by the Trustee under
this Indenture, the Loan Agreement or otherwise, the Authority or the
Borrower shall so instruct the Trustee in writing, and the Trustee shall take
such action as shall be set forth in such instructions. The covenants of the
Authority contained in the Loan Agreement are fully incorporated herein by
reference and are made a part of this Indenture as if fully set forth herein.
Without limiting the generality of the foregoing, the Authority and
the Borrower agree that there shall be paid from time to time all amounts
required to be rebated to the United States pursuant to Section 148(f) of the
Code and any temporary, proposed or final Treasury Regulations as may be
applicable to the Bonds from time to time. This covenant shall survive
payment in full or defeasance of the Bonds. The Authority and the Borrower
specifically covenant to pay or cause to be paid to the United States at the
times and in the amounts determined under Section 6.13 hereof the Rebatable
Arbitrage, as described in such Section 6.13 and in the Tax Compliance
Agreement.
Notwithstanding any provision of this Section and Section 6.13
hereof, if the Borrower shall provide to the Authority and the Trustee an
opinion of nationally recognized bond counsel to the effect that any action
required under this Section and/or Section 6.13 hereof is no longer required,
or to the effect that some further action is required, to maintain the
exclusion from gross income of interest on the Bonds, the Authority, the
Trustee and the Borrower may rely conclusively on such opinion.
SECTION 7.07. Other Covenants. (a) Subject to Article IX hereof, the
Trustee shall promptly collect all amounts due from the Borrower pursuant to
the Loan Agreement, shall perform all duties imposed upon it pursuant to the
Loan Agreement and shall diligently enforce, and take all steps, actions and
proceedings reasonably necessary for the enforcement of all of the rights of
the Authority and all of the obligations of the Borrower.
(b) The Authority shall not amend, modify or terminate any
of the terms of the Loan Agreement, or consent to any such amendment,
modification or termination, without the written consent of the Trustee. The
Trustee shall give such written consent only if (i) notification of such
amendment, modification or termination has been given to each Rating Agency
then rating the Bonds and to the Holders, (ii) the Trustee receives the
written consent of the Bank, (iii)(A) such amendment, modification or
termination will not materially adversely affect the interests of the Holders
or result in any material impairment of the security hereby given for the
payment of the Bonds or (B) the Trustee first obtains the written consent of
the Bank and the Holders of a majority in principal amount of the Bonds then
Outstanding to such amendment, modification or termination, provided that no
such amendment, modification or termination shall reduce the amount of loan
payments to be made to the Authority or the Trustee by the Borrower pursuant
to the Loan Agreement, or extend the time for making such payment, without
the written consent of all of the Holders of the Bonds then Outstanding, and
(iv) the Authority shall have delivered to the Trustee an opinion of Counsel
satisfactory to the Trustee that all of the provisions and conditions set
forth in this Section 7.07(b), including those in subsection (b)(iii)(A)
hereof, have been satisfied.
SECTION 7.08. Waiver of Laws. The Authority shall not at any time
insist upon or plead in any manner whatsoever, or claim or take the benefit
or advantage of, any stay or extension provided by law now or at any time
hereafter in force that may affect the covenants and agreements contained in
this Indenture or in the Bonds, and all benefit or advantage of any such law
or laws is hereby expressly waived by the Authority to the extent permitted
by law.
SECTION 7.09. Further Assurances. The Authority will make, execute
and deliver any and all such further indentures, instruments and assurances
as may be reasonably necessary or proper to carry out the intention or to
facilitate the performance of this Indenture and for the better assuring and
confirming unto the Holders of the Bonds of the rights and benefits provided
in this Indenture.
ARTICLE VIII
EVENTS OF DEFAULT; REMEDIES OF BONDHOLDERS
SECTION 8.01. Events of Default. The following events shall be
Events of Default:
(a) default in the due and punctual payment of the
principal of any Bond when and as the same shall become due and payable,
whether at maturity as therein expressed, by proceedings for redemption, by
acceleration, or otherwise; or
(b) default in the due and punctual payment of any
installment of interest on any Bond when and as the same shall become due and
payable; or
(c) failure to pay the Purchase Price on any Bond tendered
pursuant to Article V when such payment is due; or
(d) default by the Authority in the observance of any of
the other covenants, agreements or conditions on its part in this Indenture
or in the Bonds, if such default shall have continued for a period of sixty
(60) days after written notice thereof, specifying such default and requiring
the same to be remedied, shall have been given to the Authority by the
Trustee, or to the Authority and the Trustee by the Holders of not less than
twenty-five percent (25%) in aggregate principal amount of the Bonds at the
time outstanding; or
(e) if there occurs an Event of Default as defined in
Sections 8.01(a) through (d) of the Loan Agreement; or
(f) the Trustee's receipt of written notice of declaration
by the Bank of an Event of Default under the provisions of the Reimbursement
Agreement and instructing the Trustee to declare the principal amount of the
Outstanding Bonds to be immediately due and payable; or
(g) if, at any time after a draw under the Letter of
Credit, the Trustee shall have received notice from the Bank that the amount
of such draw corresponding to the payment of interest on the Bonds shall not
be reinstated in the amount and in the manner set forth in the Letter of
Credit.
Upon actual knowledge of the existence of any Event of Default, the
Trustee shall as soon as practicable notify the Bank, the Borrower, the
Authority, the Tender Agent, if it is not also the Trustee, and the
Remarketing Agent. Anything contained in this Indenture to the contrary
notwithstanding, (i) no Event of Default under subsections (d) or (e) above
shall occur without the prior written consent of the Bank so long as the Bank
is not in default under the terms of the Letter of Credit and (ii) the
Trustee shall not notify Bondholders of the existence of any Event of Default
without the prior written consent of the Bank, as long as the Bank is not in
default under the terms of the Letter of Credit.
SECTION 8.02. Acceleration. If any Event of Default under Section
8.01 hereof occurs, the Trustee (with the written consent of the Bank
provided the Bank is not in default of its obligations under the Letter of
Credit) may, and upon request of the Owners of twenty-five percent (25%) in
principal amount of the Bonds then Outstanding shall, by written notice to
the Authority, the Bank and the Borrower, declare the principal amount of all
Bonds then Outstanding and the interest accrued thereon to such date (the
"Acceleration Date") to be due and the Acceleration Price (as here defined)
shall thereupon become payable on the first (lst) Business Day following the
Acceleration Date (the "Payment Date"). Thereupon, the Trustee among other
things, shall draw immediately upon the Letter of Credit as set forth in
Section 6.12 hereof. Interest on the accelerated Bonds shall cease to accrue
on the Acceleration Date. Accelerated Bonds shall be payable at a price equal
to 100% of the aggregate principal amount thereof plus interest accrued to
the Payment Date (the "Acceleration Price"). Notwithstanding anything
contained herein to the contrary, upon the occurrence of an Event of Default
described in Section 8.01 (f) or (g) hereof, the Trustee shall, by written
notice to the Bank, the Borrower and the Authority declare immediately due
and payable the principal amount of the Outstanding Bonds.
Any such declaration is subject to the condition that if, at any
time after such declaration and before any judgment or decree for the payment
of the moneys due shall have been obtained or entered, the Letter of Credit
shall have been reinstated in full as to principal and interest and the
reasonable charges and expenses of the Trustee, and any and all other
defaults known to the Trustee (other than in the payment of principal of and
interest on the Bonds due and payable solely by reason of such declaration)
shall have been made good or cured to the satisfaction of the Trustee or
provision deemed by the Trustee to be adequate shall have been made therefor,
then, and in every such case, the Holders of not less than twenty-five
percent (25%) in aggregate principal amount of the Bonds then Outstanding, by
written notice to the Authority, the Bank, the Borrower and the Trustee, or
the Trustee if such declaration was made by the Trustee, may, on behalf of
the Holders of all of the Bonds, rescind and annul such declaration and its
consequences and waive such default; but such rescission and annulment shall
not extend to or affect any subsequent default, and shall not impair or
exhaust any right or power in consequence thereof. The foregoing to the
contrary notwithstanding, Owners of twenty-five percent (25%) in principal
amount of the Bonds then Outstanding shall have no right to request the
Trustee to accelerate the bonds under this Section 8.02 and the Trustee shall
not be obligated to give any Bondholder notice of a default under the
Indenture (except upon the occurrence of an Event of Default under Section
8.01(f) or (g) hereof), the Loan Agreement or any other documents executed
and delivered in connection with the Bonds, unless the Bank shall be in
default of its obligations under the Letter of Credit or a voluntary or
involuntary case has been commenced by the filing of a petition under the
United States Bankruptcy Code or any other law relating to bankruptcy,
insolvency, reorganization, winding-up or composition or adjustment of debts
by or against the Bank.
Upon any declaration of acceleration hereunder, the Trustee shall
as soon as possible give written notice of the acceleration to the
Bondholders as set forth below. In addition, notice of such acceleration
shall be mailed, by registered or certified mail or overnight mail, to each
Rating Agency then rating the Bonds, if any, but failure to mail any such
notice or any defect in the mailing thereof shall not affect the validity of
such acceleration. Such notice of acceleration (i) shall be given in the name
of the Authority, (ii) shall identify the Accelerated Bonds (by name, date of
issue, interest rate and maturity date); (iii) shall specify the Acceleration
Date; (iv) shall state that the interest on the accelerated Bonds ceased to
accrue on the Acceleration Date; (v) shall state the reason for the
acceleration; and (vi) shall state that on the Payment Date the Acceleration
Price will be payable at the office of the Trustee designated in such notice.
The Trustee shall use "CUSIP" numbers on such notices as a convenience to
Bondholders and such notice shall state that no representation is made as to
the correctness of such numbers either as printed on the Bonds or as
contained in any notice of acceleration and that reliance may be placed on
the registration and description printed on the Bonds.
Upon acceleration pursuant to this Section 8.02, the Trustee shall
immediately exercise such rights as it may have under the Loan Agreement to
declare all payments thereunder to be immediately due and payable and shall
immediately draw upon the Letter of Credit as provided in Section 6.12 hereof
in an amount that, together with any Available Moneys on deposit in the Bond
Fund and irrevocably committed to the payment of principal of and interest on
the Bonds, is sufficient to pay the Acceleration Price due on the Outstanding
Bonds on the Payment Date.
Upon receipt by the Trustee of any amount from the Bank under the
preceding paragraphs of this Section 8.02 (or after receipt by the Trustee of
any amounts from the Bank under any other provision of this Indenture), the
Bank shall be subrogated to the right, title and interest of the Trustee and
the Bondholders in and to the Loan Agreement, the Project Facilities and any
other security held for the payment of the Bonds (other than said funds), all
of which, upon payment of any fees and expenses due and payable to the
Trustee pursuant to the Loan Agreement or this Indenture, shall be assigned
by the Trustee to the Bank. Upon such assignment to the Bank, the Trustee
shall have no further duties or obligations under the Bond Documents.
SECTION 8.03. Other Remedies. If any Event of Default occurs and is
continuing, the Trustee, before or after declaring the principal of the Bonds
immediately due and payable, may enforce each and every right granted to the
Authority or the Trustee under the Loan Agreement, the Letter of Credit or
any other security instrument, or under any supplements or amendments
thereto, and shall, at all times complying with the provisions of Section
8.02 hereof, apply any Revenues or Available Moneys in the Bond Fund held by
the Trustee to the payment of principal of or interest on the Bonds. In
exercising such rights and the rights given the Trustee under this Article
VIII, the Trustee shall take such action, as in the judgment of the Trustee,
applying the standards described in Section 9.01 hereof, would best serve the
interests of the Bondholders.
SECTION 8.04. Legal Proceedings By Trustee. If any Event of Default
has occurred and is continuing, the Trustee in its discretion may and, upon
the written request of the Bank or the Owners of twenty-five percent (25%) in
principal amount of the Bonds then Outstanding (subject to the consent of the
Bank, as long as the Bank is not in default of its obligations under the
Letter of Credit or a voluntary or involuntary case has not been commenced by
the filing of a petition under the United States Bankruptcy Code or any other
law relating to bankruptcy, insolvency, reorganization, winding-up or
composition or adjustment of debts by or against the Bank) and receipt of
indemnity to its satisfaction shall, in its own name:
A. By mandamus, other suit, action or proceeding at law or
in equity, enforce all rights of the Bondholders, including the right to
require the Authority to collect the amounts payable under the Loan Agreement
and to require the Authority to carry out any other provisions of this
Indenture for the benefit of the Bondholders and to perform its duties under
the Act;
B. Bring suit upon the Bonds;
C. By action or suit in equity require the Authority to
account as if it were the trustee of an express trust for the Bondholders;
and
D. By action or suit in equity enjoin any acts or things
that may be unlawful or in violation of the rights of the Bondholders.
SECTION 8.05. Discontinuance of Proceedings by Trustee. If any
proceeding taken by the Trustee on account of any Event of Default is
discontinued or is determined adversely to the Trustee, the Authority, the
Trustee, the Bondholders and the Bank shall be restored to their former
positions and rights hereunder as though no such proceeding had been taken,
but subject to the limitations of any such adverse determination.
SECTION 8.06. Bondholders May Direct Proceedings by Trustee. The
Holders of a majority in principal amount of the Bonds Outstanding hereunder
shall have the right to direct the method and place of conducting all
remedial proceedings by the Trustee hereunder, provided that such direction
shall not be otherwise than in accordance with law or the provisions of this
Indenture, and that the Trustee shall not be required to comply with any such
direction which it deems to be unlawful or unjustly prejudicial to
Bondholders not parties to such direction. The foregoing provisions of this
Section 8.06 to the contrary notwithstanding, the Bank shall have the right
to direct the method and the place of conducting all remedial proceedings by
the Trustee hereunder provided that such direction shall not be otherwise
than in accordance with law or the provisions of this Indenture as long as
the Bank shall not be in default under the Letter of Credit or a voluntary or
involuntary case has not been commenced by the filing of a petition under the
United States Bankruptcy Code or any other law relating to the bankruptcy,
insolvency or reorganization of the Bank.
SECTION 8.07. Limitations on Actions By Bondholders. Anything in
this Indenture to the contrary notwithstanding, no Bondholder shall have any
right to pursue any remedy hereunder or under the Loan Agreement unless:
(a) The Trustee shall have been given written notice of an
Event of Default;
(b) The holders of at least twenty-five percent (25%) in
aggregate principal amount of the Bonds Outstanding shall have requested the
Trustee, in writing, to exercise the powers hereinabove granted or to pursue
such remedy in its or their name or names;
(c) The Trustee shall have been offered indemnity
satisfactory to it against costs, expenses and liabilities.
(d) The Trustee shall have failed to comply with such
request within a reasonable time; and
(e) The Bank shall be in default of its obligations under
the Letter of Credit or a voluntary or involuntary case has been commenced by
the filing of a petition under the United States Bankruptcy Code or any other
law relating to bankruptcy, insolvency, reorganization, winding-up or
composition or adjustment of debts by or against the Bank; provided, however,
that nothing herein shall affect or impair the right of any Owner of any Bond
to enforce payment of the principal and Purchase Price thereof and interest
thereon at and after the maturity thereof, or the obligation of the Authority
to pay such principal and Purchase Price and interest to the respective
Owners of the Bonds at the time and place, from the source and in the manner
expressed herein and in the Bonds; and provided further that such action
shall not disturb or prejudice the lien of this Indenture.
SECTION 8.08. Trustee May Enforce Rights Without Possession of
Bonds. All rights under the Indenture and the Bonds may be enforced by the
Trustee without the possession of any Bonds or the production thereof at the
trial or other proceedings relative thereto, and any proceedings instituted
by the Trustee shall be brought in its name for the ratable benefit of the
Owners of the Bonds.
SECTION 8.09. Delays and Omissions Not to Impair Rights. No delay or
omission in respect of exercising any right or power accruing upon any Event
of Default shall impair such right or power or be a waiver of such Event of
Default and every remedy given by this Article VIII may be exercised, from
time to time, and as often as may be deemed expedient.
SECTION 8.10. Application of Moneys in Event of Default. Any moneys
received by the Trustee under this Article VIII shall be applied in the order
listed below (provided that any moneys received by the Trustee upon drawing
under the Letter of Credit together with Available Moneys on deposit in the
Bond Fund and available for payment of principal and Purchase Price of and
interest on all Outstanding Bonds, any moneys held by the Trustee upon the
nonpresentment of Bonds and any moneys held by the Trustee for the defeasance
of Bonds pursuant to Article XI shall be applied only as provided in clause B
below and only to pay outstanding principal and accrued interest, as provided
in the Letter of Credit, with respect to the Bonds):
A. To the payment of the fees and expenses of the Trustee
and the Authority including reasonable counsel fees and expenses, and any
disbursements of the Trustee with interest thereon and its reasonable
compensation;
B. To the payment of principal and Purchase Price of and
interest then owing on the Bonds, including any interest on overdue interest,
and in case such moneys shall be insufficient to pay the same in full, then
to the payment of principal and Purchase Price of and interest ratably,
without preference or priority of one over another or of any installment of
interest over any other installment of interest; and
C. The surplus, if any, remaining after the application of
the moneys as set forth above shall, to the extent of any unreimbursed
drawing under the Letter of Credit or other obligations owing by the Borrower
to the Bank under the Reimbursement Agreement, as certified by the Bank to
the Trustee, be paid to the Bank. Any remaining moneys shall be paid to the
Borrower or the Person lawfully entitled to receive the same as a court of
competent jurisdiction may direct.
SECTION 8.11. Trustee and Bondholders Entitled to All Remedies Under
Act; Remedies Not Exclusive. It is the purpose of this Article VIII to
provide to the Trustee and the Bondholders all rights and remedies as may be
lawfully granted under the provisions of the Act; but should any remedy
herein granted be held unlawful, the Trustee and the Bondholders shall
nevertheless be entitled to every remedy permitted by the Act. It is further
intended that, insofar as lawfully possible, the provisions of this Article
VIII shall apply to and be binding upon any trustee or receiver appointed
under the Act.
No remedy herein conferred is intended to be exclusive of any other
remedy or remedies, and each remedy is in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity or by
statute.
SECTION 8.12. Trustee's Right to Receiver. As provided by the Act,
the Trustee shall be entitled as of right to the appointment of a receiver;
and the Trustee, the Bondholders and any receiver so appointed shall have
such rights and powers and be subject to such limitations and restrictions as
may be contained in or permitted by the Act.
SECTION 8.13. Subrogation Rights of Bank. The Trustee agrees that
the Bank or other provider of a Substitute Letter of Credit shall be
subrogated to all rights, remedies and collateral of the Bondholder under the
Indenture, the Loan Agreement or any other document or instrument, to the
extent the Bank or other provider of a Substitute Letter of Credit has
honored a draw under the Letter of Credit or Substitute Letter of Credit, as
the case may be, and has not been reimbursed or paid therefor.
SECTION 8.14. Waiver of Default. As long as the Bank is not in
default of its obligations under the Letter of Credit and the Letter of
Credit is in full force and effect, or a voluntary or involuntary case has
not been commenced by the filing of a petition under the United States
Bankruptcy Code or any other law relating to the bankruptcy, insolvency or
reorganization of the Bank, the Bank may waive an Event of Default and if the
Bank does so, the Trustee must also waive such Event of Default. The Trustee
may not waive an Event of Default under this Indenture if the Letter of
Credit has not been reinstated to cover principal and Purchase Price of and
interest on the Bonds in accordance with the terms of the Letter of Credit.
ARTICLE IX
THE TRUSTEE; THE TENDER AGENT; AND THE REMARKETING AGENT
SECTION 9.01. Duties, Immunities and Liabilities of Trustee. (a) The
Trustee accepts the Trusts hereby created and agrees to perform the duties
herein required of it subject to the provisions of this Article IX. The
Trustee shall, prior to an Event of Default, and after the curing of all
Events of Default which may have occurred, perform such duties and only such
duties as are specifically set forth in this Indenture. The Trustee shall,
during the existence of any Event of Default (which has not been cured),
exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent man
would exercise or use under the circumstances in the conduct of his own
affairs. The Trustee shall not be required to give any bond or surety with
respect to its acceptance of its rights and duties under this Indenture. No
permissive right of the Trustee to take action enumerated in this Indenture
shall be construed as a duty.
(b) The Authority shall remove the Trustee if at any time
requested to do so by an instrument or concurrent instruments in writing
signed by the Holders of not less than a majority in aggregate principal
amount of the Bonds then outstanding (or their attorneys duly authorized in
writing), or if at any time the Trustee shall cease to be eligible in
accordance with Subsection (e) of this Section or shall become incapable of
acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the
Trustee or its property shall be appointed, or any public officer shall take
control or charge of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, in each case by
giving written notice of such removal to the Trustee, and thereupon shall
appoint, with the consent of the Bank and the Borrower, a successor Trustee
by an instrument in writing.
(c) The Trustee may at any time resign by giving written
notice of such resignation to the Authority and the Bank and by giving the
Bondholders notice of such resignation by mail at the addresses shown on the
registration books maintained by the Trustee. Upon receiving such notice of
resignation, the Authority shall promptly appoint, with the consent of the
Bank and the Borrower, a successor Trustee by an instrument in writing.
(d) Any removal or resignation of the Trustee and
appointment of a successor Trustee shall become effective upon acceptance of
appointment by the successor Trustee. If no successor Trustee shall have been
appointed and have accepted appointment within forty-five (45) days of giving
notice of removal or notice of resignation as aforesaid, the resigning
Trustee, at the expense of the Borrower or any Bondholder (on behalf of
himself and all other Bondholders), may petition any court of competent
jurisdiction for the appointment of a successor Trustee. Any successor
Trustee appointed under this Indenture shall signify its acceptance of such
appointment by executing and delivering to the Authority and to its
predecessor Trustee a written acceptance thereof, and thereupon such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the moneys, estates, properties, rights, powers, trusts,
duties and obligations of such predecessor Trustee, with like effect as if
originally named Trustee herein; but, nevertheless at the request of the
Authority or the request of the successor Trustee, such predecessor Trustee
shall execute and deliver any and all instruments of conveyance or further
assurance and do such other things as may reasonably be required for more
fully and certainly vesting in and confirming to such successor Trustee all
the right, title and interest of such predecessor Trustee in and to any
property held by it under this Indenture and shall pay over, transfer, assign
and deliver to the successor Trustee any moneys or other property subject to
the trusts and conditions herein set forth. Upon request of the successor
Trustee, the Authority shall execute and deliver any and all instruments as
may be reasonably required for more fully and certainly vesting in and
confirming to such successor Trustee all such moneys, estates, properties,
rights, powers, trusts, duties and obligations. Upon acceptance of
appointment by a successor Trustee as provided in this subsection, the
Authority shall mail a notice of the succession of such Trustee to the trusts
hereunder to the Rating Agency, if any, and to the Bondholders at the
addresses shown on the registration books maintained by the Trustee. If the
Authority fails to mail such notice within fifteen (15) days after acceptance
of appointment by the successor Trustee, the successor Trustee shall cause
such notice to be mailed at the expense of the Authority.
(e) Any Trustee appointed under the provisions of this
Section in succession to the Trustee shall be a trust company or bank having
the powers of a trust company having a corporate trust office in the State
having a combined capital and surplus of at least one Hundred Million Dollars
($100,000,000), subject to supervision or examination by federal or state
authorities and shall have received written evidence from the Rating Agency
then rating the Bonds, if any, that the use of such Trustee would not result
in a reduction or withdrawal of the rating on the Bonds. If such bank or
trust company publishes a report of condition at least annually, pursuant to
law or to the requirements of any supervising or examining authority above
referred to, then for the purpose of this subsection the combined capital and
surplus of such bank or trust company shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this subsection (e), the Trustee shall
resign immediately in the manner and with the effect specified in this
Section.
SECTION 9.01A. Compensation and Indemnity. The Company shall pay to
the Trustee from time to time, and the Trustee shall be entitled to,
compensation for its services. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses incurred or made by it, including costs of collection,
costs of preparing and reviewing reports, certificates and other documents,
costs of preparation and mailing of notices to Holders and reasonable costs
of counsel retained by the Trustee in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and
expenses, disbursements and advances of the Trustee's agents, counsel,
accountants and experts. The Company shall indemnify and hold harmless the
Trustee against any and all losses, liability or expense (including
reasonable attorneys' fees) incurred by it in connection with the
administration of this trust and the performance of its duties hereunder,
including the costs and expenses of enforcing this Indenture (including this
Section 9.01A) and of defending itself against any claims (whether asserted
by any Holder, the Company or otherwise). The Trustee shall notify the
Company promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder. The Company shall defend the claim and the Trustee may
have separate counsel and the Company shall pay the fees and expenses of such
counsel. The Company need not reimburse any expense or indemnify against any
loss, liability or expense incurred by the Trustee through the Trustee's own
willful misconduct or gross negligence.
To secure the Company's payment obligations in this Section
9.01A, the Trustee shall have a lien prior to the Bonds on all money or
property held or collected by the Trustee other than money or property held
in trust to pay principal of and interest on particular Bonds and proceeds of
drawings on the Letter of Credit. The Trustee's right to receive payment of
any amounts due under this Section 9.01A shall not be subordinate to any
other liability or indebtedness of the Company.
The Company's payment obligations pursuant to this Section
9.01A shall survive the discharge of this Indenture. When the Trustee incurs
expenses after the occurrence of a Default specified in Section 8.01(e) with
respect to the Company, the expenses are intended to constitute expenses of
administration under any bankruptcy law.
SECTION 9.02. Merger or Consolidation. Any company or association
into which the Trustee may be merged or converted or with which it may be
consolidated or any company or association resulting from any merger,
conversion or consolidation to which it shall be a party or any company or
association to which the Trustee may sell or transfer all or substantially
all of its corporate trust business, provided such company shall be eligible
under subsection (e) of Section 9.01, shall be the successor to such Trustee
without the execution or filing of any paper or any further act, anything
herein to the contrary notwithstanding.
SECTION 9.03. Liability of Trustee. (a) The recitals of facts herein
and in the Bonds shall be taken as statements of the Authority, and the
Trustee shall assume no responsibility for the correctness of the same, or
make any representations as to the validity or sufficiency of this Indenture
or of the Bonds or the security provided for the Bonds hereunder or shall
incur any responsibility in respect thereof, other than in connection with
the duties or obligations herein or in the Bonds assigned to or imposed upon
it. The Trustee shall not be accountable for the use or application by the
Authority or the Borrower of the Bonds, or upon disbursement from the Project
Fund, the proceeds thereof. The Trustee shall, however, be responsible for
its representations contained in its certificate of authentication on the
Bonds. The Trustee shall not be liable in connection with the performance of
its duties hereunder, except for its own gross negligence or willful
misconduct. The Trustee may become the owner of Bonds with the same rights it
would have if it were not Trustee and, to the extent permitted by law, may
act as depositary for and permit any of their officers or directors to act as
a member of, or in any other capacity with respect to, any committee formed
to protect the rights of Bondholders, whether or not such committee shall
represent the Holders of a majority in principal amount of the Bonds then
Outstanding and may otherwise deal with the Authority, the Borrower and the
Bank.
(b) The Trustee shall not be liable for any error of
judgment made in good faith by a responsible officer, unless it shall be
proved that the Trustee was grossly negligent in ascertaining the pertinent
facts.
(c) The Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a majority in aggregate
principal amount of the Bonds at the time Outstanding relating to the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee under
this Indenture.
(d) The Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture (other than the
making of a draw under the Letter of Credit in accordance with its terms and
the terms hereof, declaring the principal of the Bonds to be immediately due
and payable when required hereunder or making payments on the Bonds with
funds provided under this Indenture when due) at the request, order or
direction of any of the Bondholders pursuant to the provisions of this
Indenture unless such Bondholders shall have offered to the Trustee
indemnification to its satisfaction for indemnity against the costs, expenses
and liabilities which may be incurred therein or thereby.
(e) The Trustee shall not be liable for any action taken by
it in good faith and believed by it to be authorized or within the discretion
or rights or powers conferred upon it by this Indenture.
(f) The Trustee shall not be required to take notice or be
deemed to have notice of any default hereunder or the other Bond Documents
unless the Trustee shall be specifically notified of such default in writing
by the Authority, the Borrower, the Bank or the Owner of any Outstanding
Bonds, and in the absence of such notice the Trustee shall conclusively
assume that there is no default; provided that the Trustee shall be required
to take notice of and be deemed to have notice of its failure to receive the
money necessary to pay the principal of and premium (if any) and interest on
the Bonds and Purchase Price payments.
(g) No provision of this Indenture or the other Bond
Documents shall require the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers.
(h) The Trustee shall not be required to record or file any
document or statement, including financing and continuation statements, or to
insure or monitor the insurance of the Project Facilities.
SECTION 9.04. Right of Trustee to Rely on Documents. The Trustee may
conclusively rely, and shall be protected in acting upon any notice,
resolution, direction, requisition, request, consent, order, statement,
certificate, report, opinion, bond or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties. The Trustee may consult with counsel, who may be counsel of or to
the Authority, with regard to legal questions, and the opinion of such
counsel shall be full and complete authorization and protection in respect of
any action taken or suffered by it hereunder in good faith and in accordance
therewith.
The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or indirectly through agents or
attorneys, and the Trustee shall not be responsible for any negligence on the
part of any agent or attorney representing it with due care. The Trustee
shall not be bound to recognize any person as the Holder of a Bond unless and
until such Bond is submitted for inspection, if required, and his title
thereto is satisfactorily established, if disputed.
Whenever in the administration of the trusts imposed upon it by this
Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
Certificate of the Authority, and such Certificate shall be full warrant to
the Trustee for any action taken or suffered in good faith under the
provisions of this Indenture in reliance upon such Certificate, but in its
discretion the Trustee may, in lieu thereof, accept other evidence of such
matter or may require such additional evidence as it may deem reasonable.
SECTION 9.05. Preservation and Inspection of Documents.
(a) All documents received by the Trustee under the
provisions of this Indenture shall be retained in its possession and shall be
subject during normal business hours of the Trustee to the inspection of the
Authority and any Bondholder, and their agents and representatives duly
authorized in writing, at reasonable hours and under reasonable conditions
upon prior written notice.
(b) The Trustee covenants and agrees that it shall maintain
a current list of the names and addresses of all the Bondholders.
SECTION 9.06. Compensation. The Trustee shall be paid (solely from
Additional Payments) from time to time reasonable compensation for all
services rendered under this Indenture, and also all reasonable expenses,
charges, legal and consulting fees and other disbursements and those of its
attorneys, agents and employees, incurred in and about the performance of its
powers and duties under this Indenture.
SECTION 9.07. The Tender Agent. First Union National Bank, the
initial Tender Agent appointed by the Borrower, and each successor tender
agent appointed in accordance herewith, shall designate its office and
signify its acceptance of the duties and obligations imposed upon it as
described herein by a written instrument of acceptance delivered to the
Trustee and the Borrower under which the Tender Agent shall, among other
things:
(a) hold all Bonds delivered to it hereunder in trust for
the benefit of the respective Owners of Bonds which shall have so delivered
such Bonds until moneys representing the Purchase Price of such Bond shall
have been delivered to or for the account of or to the order of such Owners
of Bonds. Upon delivery of moneys representing the Purchase Price of such
Bonds to or for the account of or to the order of such Owners of Bonds, the
Tender Agent shall hold all such Bonds which are required to be delivered to
the Pledged Bonds Custodian pursuant to Section 5.06(b) hereof, as the agent
of the Bank for the purpose of perfecting the Bank's security interest
therein under the Pledge Agreement (which agency shall terminate upon
delivery of such Bonds by the Tender Agent to or upon the order of the Bank
in accordance with such Section 5.06(b)); and
(b) hold all moneys delivered to it hereunder and under the
Tender Agent Agreement for the purchase of such Bonds in a separate account
in trust for the benefit of the Person or entity which shall have so
delivered such moneys until required to transfer such funds as provided
herein.
SECTION 9.08. Qualification of Tender Agent. (a) The Tender Agent
shall be a bank or trust company duly organized under the laws of the United
States of America or any state or territory thereof, having a combined
capital stock, surplus and undivided profits of at least One Hundred Million
Dollars ($100,000,000) or that is a wholly-owned subsidiary of such a bank or
trust company, and authorized by law to perform all duties imposed upon it by
this Indenture. The Tender Agent may at any time resign and be discharged of
its duties and obligations by giving at least sixty (60) days notice to the
Authority, the Trustee, the Remarketing Agent, the Bank and the Borrower;
provided that such resignation shall not take effect until the appointment of
a successor Tender Agent in accordance with the provisions hereof. Upon the
written approval of the Bank, the Tender Agent may be removed at any time by
the Borrower upon written notice to the Authority, the Trustee and the
Remarketing Agent. Successor Tender Agents may be appointed from time to time
by the Borrower, with the prior written consent of the Bank. The rights and
immunities of the Trustee granted under this Article IX shall also apply to
the Tender Agent.
(b) Upon the resignation or removal of the Tender Agent,
the Tender Agent shall deliver any Bonds and moneys held by it in such
capacity to its successor and the Borrower shall appoint a successor Tender
Agent. If the Borrower fails to appoint a successor Tender Agent within
thirty (30) days of the Tender Agent's resignation or removal, the Tender
Agent may, at the expense of the Borrower, petition a court of competent
jurisdiction for the appointment of a successor to it.
SECTION 9.09. Qualifications of Remarketing Agent, Resignation;
Removal. The Remarketing Agent shall be a financial institution or registered
broker/dealer authorized by law to perform all of the duties imposed upon it
by this Indenture. The Remarketing Agent may at any time resign and be
discharged of its duties and obligations created by this Indenture by giving
at least thirty (30) days notice to the Authority, the Borrower and the
Trustee. The Remarketing Agent may be removed at any time, upon not less than
thirty (30) days written notice from the Borrower filed with the Trustee.
Upon the resignation or removal of the Remarketing Agent, the Borrower shall
appoint a successor Remarketing Agent and shall provide written notice
thereof to the Trustee. The resignation or removal of the Remarketing Agent
shall not become effective until a successor Remarketing Agent is appointed
and accepts such appointment. if the Bonds are rated by a Rating Agency, any
successor Remarketing Agent shall be acceptable to such Rating Agency.
SECTION 9.10. Construction of Ambiguous Provisions. The Trustee may
construe any provision hereof insofar as such may appear to be ambiguous or
inconsistent with any other provision hereof; and any construction of any
such provision by the Trustee in good faith shall be binding upon the Owners
of the Bonds.
ARTICLE X
MODIFICATION OR AMENDMENT OF THE INDENTURE
SECTION 10.01. Amendments Permitted. This Indenture and the rights
and obligations of the Authority, the Trustee and the Holders of the Bonds
may be modified or amended from time to time and at any time for any lawful
purpose, by an indenture or indentures supplemental hereto, which the
Authority and the Trustee may enter into without the consent of any
Bondholders but with the prior written consent of the Bank (as long as the
Bank is not in default under the Letter of Credit or a voluntary or
involuntary case has not been commenced by the filing of a petition under the
United States Bankruptcy Code or any other law relating to the bankruptcy,
insolvency or reorganization of the Bank). The foregoing to the contrary
notwithstanding, no such modification or amendment shall, without the consent
of the Holders of all Bonds then Outstanding, (i) extend the maturity date of
any Bond, (ii) reduce the amount of principal thereof, (iii) extend the time
of payment or change the method of computing the rate of interest thereon,
without the consent of the Holder of each Bond so affected, or eliminate the
Holders' rights to tender the Bonds, (iv) extend the due date for the
purchase of Bonds tendered by the Holders thereof, or (v) reduce the Purchase
Price of such Bonds. It shall not be necessary for the consent of the
Bondholders to approve the particular form of any supplemental indenture, but
it shall be sufficient if such consent shall approve the substance thereof.
Promptly after the execution by the Authority and the Trustee of any
supplemental indenture pursuant to this Section 10.01, the Trustee shall mail
a notice, setting forth in general terms the substance of such supplemental
indenture, to each Rating Agency then rating the Bonds and the Holders of the
Bonds at the address shown on the registration books of the Trustee. Any
failure to give such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental indenture.
SECTION 10.02. Effect of Supplemental indenture. Upon the execution
of any supplemental indenture pursuant to this Article, this Indenture shall
be deemed to be modified and amended in accordance therewith, and the
respective rights, duties and obligations under this Indenture of the
Authority, the Trustee and all Holders of Bonds Outstanding shall thereafter
be determined, exercised and enforced hereunder subject in all respects to
such modification and amendment, and all the terms and conditions of any such
supplemental indenture shall be deemed to be part of the terms and conditions
of this Indenture for any and all purposes.
SECTION 10.03. Trustee Authorized to Join in Amendments and
Supplements; Reliance on Counsel. The Trustee is authorized to join with the
Authority in the execution and delivery of any supplemental indenture or
amendment permitted by this Article X and in so doing shall be fully
protected by an opinion of Counsel that such supplemental indenture or
amendment is so permitted and has been duly authorized by the Authority and
that all things necessary to make it a valid and binding agreement have been
done.
ARTICLE XI
DEFEASANCE
SECTION 11.01. Discharge of Indenture. The Bonds may be paid by the
Authority in any of the following ways, provided that the Authority also pays
or causes to be paid any other sums payable hereunder by the Authority and
the fees and expenses of the Trustee are paid:
(a) by paying or causing to be paid the principal of and
interest on the Bonds as and when the same become due and payable;
(b) by depositing with the Trustee, in trust, Available
Moneys or securities purchased with Available Moneys in the amount necessary
(as provided in Section 11.03) to pay or redeem all Bonds then Outstanding;
or
(c) by delivering to the Trustee, for cancellation by it,
the Bonds then Outstanding.
If the Authority shall also pay or cause to be paid all Bonds then
Outstanding and shall also pay or cause to be paid all other sums payable
hereunder by the Authority, and the fees and expenses of the Trustee are
paid, then and in that case, at the election of the Authority (evidenced by a
Certificate of the Authority filed with the Trustee, signifying the intention
of the Authority to discharge all such indebtedness and this Indenture), and
notwithstanding that any Bonds shall not have been surrendered for payment,
this Indenture, the assignment of the Loan Agreement and the pledge of
Revenues and other assets made under this Indenture and all covenants,
agreements and other obligations of the Authority under this Indenture shall
cease, terminate, become void and be completely discharged and satisfied. In
such event, upon Request of the Authority, the Trustee shall, to the extent
it has not already done so, cause an accounting for such period or periods as
may be requested by the Authority to be prepared and filed with the Authority
and shall execute and deliver to the Authority all such instruments, as
prepared by or caused to be prepared by the Authority, that may be necessary
or desirable to evidence such discharge and satisfaction, and the Trustee
shall pay over, transfer, assign or deliver all moneys or securities or other
property held by it pursuant to this Indenture, which are not required for
(i) the payment of all the charges and reasonable expenses of the Trustee
under this Indenture, (ii) the payment or redemption of Bonds not theretofore
surrendered for such payment or redemption, (iii) the payment of amounts owed
to the Bank by the Borrower under the Reimbursement Agreement, to the
Borrower, as certified to the Trustee by the Bank, or (iv) the payment of any
and all sums due to the United States of America hereunder.
SECTION 11.02. Discharge of Liability on Bonds. Upon the deposit
with the Trustee, in trust, at or before maturity, of money or securities in
the necessary amount (as provided in Section 11.03) to pay or redeem any
Outstanding Bond (whether upon or prior to the end of the Fixed Rate Period
or the redemption date of such Bond), provided that, if such Bond is to be
redeemed prior to maturity, notice of such redemption shall have been given
as in Article IV provided provision satisfactory to the Trustee shall have
been made for the giving of such notice, then all liability of the Authority
in respect of such Bond shall cease, terminate and be completely discharged,
and the Holder thereof shall thereafter be entitled only to payment out of
such money or securities deposited with the Trustee as aforesaid for their
payment, subject, however, to the provisions of Section 11.04.
The Authority may at any time surrender to the Trustee for
cancellation by it any Bonds previously issued and delivered, which the
Authority may have acquired in any manner whatsoever, and such Bonds, upon
such surrender and cancellation, shall be deemed to be paid and retired.
SECTION 11.03. Deposit of Money or Securities with Trustee. Whenever
in this Indenture it is provided or permitted that there be deposited with or
held in trust by the Trustee money or securities in the necessary amount to
pay or redeem any Bonds, the money or securities so to be deposited or held
shall be cash or Investment securities described in clauses (i) or (ii) of
the definition thereof in Section 1.01 hereof, which Investment Securities
shall be noncallable and not subject to prepayment, the principal of and
interest on which when due will provide money sufficient to pay the principal
of, premium, if any, and all unpaid interest to maturity, or to the
redemption date, as the case may be, on the Bonds to be paid or redeemed, as
such principal, premium, if any, and interest become due, provided that, in
the case of Bonds which are to be redeemed prior to the maturity thereof,
notice of such redemption shall have been given as provided in Article IV or
provision satisfactory to the Trustee shall have been made for the giving of
such notice; provided, in each case, that the Trustee shall have been
irrevocably instructed (by request of the Authority) to apply such money to
the payment of such principal and interest with respect to such Bonds.
Whenever Investment securities are deposited with the Trustee in
accordance with this Section 11.03, the Borrower shall provide to the Trustee
and the Rating Agency, if any, (i) a verification report from an independent
public accountant, satisfactory in form and content to the Trustee,
demonstrating that the Investment Securities so deposited and the income
therefrom shall be sufficient to pay the principal of, premium, if any, and
all unpaid interest to maturity, or to the redemption date, as the case may
be, on the Bonds to be paid or redeemed, as such principal, premium, if any,
and interest become due and (ii) an opinion acceptable to the Rating Agency,
if any, of nationally recognized bankruptcy counsel, to the effect that the
provision for payment of the Bonds contemplated to be made pursuant to this
Section 11.03 will not constitute or result in such payments constituting
voidable preferences under Section 547 of the Bankruptcy Code.
SECTION 11.04. Payment of Bonds After Discharge of Indenture.
Notwithstanding any provisions of this Indenture, any moneys held by the
Trustee in trust for the payment of the principal of, premium, if any, or
interest on, any Bonds remaining unclaimed for five (5) years after the
principal of all of the Bonds has become due and payable (whether at maturity
or upon call for redemption or by acceleration as provided in this
Indenture), if such moneys were so held at such date, or five (5) years after
the date of deposit of such moneys if deposited after said date when all of
the Bonds became due and payable, shall be repaid to the Borrower, upon its
written request, free from the trusts created by this Indenture and all
liability of the Trustee with respect to such moneys shall thereupon cease;
provided, however, that before the repayment of such moneys to the Borrower
as aforesaid, the Trustee may (at the cost and request of the Borrower) first
mail to the Holders of Bonds which have not been paid, at the addresses last
shown on the registration books maintained by the Trustee, a notice, in such
form as may be deemed appropriate by the Trustee with respect to the Bonds so
payable and not presented and with respect to the provisions relating to the
repayment to the Borrower of the moneys held for the payment thereof.
ARTICLE XII
MISCELLANEOUS
SECTION 12.01. Liability of Authority Limited to Revenues.
Notwithstanding anything to the contrary contained in this Indenture or in
the Bonds, the Authority shall not be required to advance any moneys derived
from any source other than the Revenues and other assets pledged under this
Indenture for any of the purposes in this Indenture mentioned, whether for
the payment of the principal and Purchase Price of or interest on the Bonds
or for any other purpose of this Indenture. Notwithstanding any provisions of
this Indenture to the contrary, no recourse under or upon any obligation,
covenant or agreement contained herein or in any Bond shall be had against
the Authority, it being expressly agreed and understood that the obligations
of the Authority hereunder, and under the Bonds and elsewhere, are solely
corporate obligations of the Authority and shall be enforceable only out of
the Authority's interest in this Indenture and the Loan Agreement (except for
the Authority's rights to payment of certain costs, fees and expenses as set
forth in this Indenture, the Loan Agreement and elsewhere) and there shall be
no other recourse against the Authority or any property now or hereafter
owned by it and after entry of judgment against the Authority by virtue of
the power herein contained, the Authority shall mark the judgment index to
the effect that the judgment is limited as aforesaid.
SECTION 12.02. Limitation of Liability of Directors, Etc. of
Authority. No covenant, agreement, provision or obligation contained herein
shall be deemed to be a covenant, agreement or obligation of any present or
future director, commissioner, officer, employee, member or agent of the
Authority in his individual capacity, and neither the members of the
Authority nor any officer thereof shall be liable personally on this
Indenture or any of the Bonds or be subject to any personal liability or
accountability by reason of the issuance thereof or this Indenture. No
director, commissioner, officer, employee, member or agent of the Authority
shall incur any personal liability with respect to any other action taken by
him pursuant to this Indenture or the Act. Notwithstanding anything herein to
the contrary, no provision, covenant or agreement contained in this Indenture
or in the Bonds or any obligations herein or therein imposed upon the
Authority or the breach thereof, shall constitute or give rise to or impose
upon the Authority a pecuniary liability or a charge upon its general credit.
In making the agreements, provisions and covenants set forth in this
Indenture, the Authority has not obligated itself except with respect to its
rights and interest in the Loan Agreement, as hereinabove provided. The
issuance of the Bonds under this Indenture shall not be considered a
misfeasance in office. The liability of the Authority, including its
officers, members and employees under any and all of the documentation
executed in connection with the issuance of the Bonds shall not constitute
its general obligation and recourse against the Authority on the
documentation executed in connection with the issuance of the Bonds shall be
had only against the property specifically pledged as security therefor and
any rents, issues and profits thereof. It is expressly understood that the
Authority shall not otherwise be obligated and that none of its members,
officers or employees shall be in any way obligated for any costs, expenses,
fees or other obligations or liabilities incurred or imposed in connection
with the issuance of the Bonds, whether incurred prior to or after closing,
and that recourse against the Authority and its members, officers of
employees, shall be limited as set forth herein.
SECTION 12.03. Covenant Not to Sue. The forms of Bonds provide that
the owners of the Bonds agree not to sue the Authority or any of its board
members, officers, agents or employees, past, present or future except as
provided herein and in the Loan Agreement as a condition of, and in
consideration for, the issuance of the Bonds; accordingly, the Trustee shall
not be permitted to sue the Authority on behalf of the Owners of the Bonds.
SECTION 12.04. Successor is Deemed Included in All References to
Predecessor. Whenever in this Indenture either the Authority or the Trustee
is named or referred to, such reference shall be deemed to include the
successors or assigns thereof, and all the covenants and agreements in this
Indenture contained by or on behalf of the Authority or the Trustee shall
bind and inure to the benefit of the respective successors and assigns
thereof whether so expressed or not.
SECTION 12.05. Limitation of Rights to Parties, Bank, Borrower and
Bondholders. Nothing in this Indenture or in the Bonds, express or implied,
is intended or shall be construed to give to any Person other than the
Authority, the Trustee, the Bank, the Borrower and the Holders of the Bonds,
any legal or equitable right, remedy or claim under or in respect of this
Indenture or any covenant, condition or provision therein or herein
contained; and all such covenants, conditions and provisions are and shall be
held to be for the sole and exclusive benefit of the Authority, the Trustee,
the Bank, the Borrower and the Holders of the Bonds.
SECTION 12.06. Waiver of Notice. Whenever in this Indenture the
giving of notice by mail or otherwise is required, the giving of such notice
may be waived in writing by the Person entitled to receive such notice and in
any case the giving or receipt of such notice shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
SECTION 12.07. Severability of Invalid Provisions. If any one or
more of the provisions contained in this Indenture or in the Bonds shall for
any reason be held to be invalid, illegal or unenforceable in any respect,
then such provision or provisions shall be deemed several from the remaining
provisions contained in this Indenture and such invalidity, illegality or
unenforceablility shall not affect any other provision of this Indenture, and
this Indenture shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein. The Authority hereby
declares that it would have entered into this Indenture and each and every
other Section, paragraph, sentence, clause or phrase hereof and authorized
the issuance of the Bonds pursuant thereto irrespective of the fact that any
one or more Sections, paragraphs, sentences, clauses or phrases of this
Indenture may be held illegal, invalid or unenforceable.
SECTION 12.08. Notices. Prior to the Conversion Date, all notices to
Bondholders shall be given by certified or registered mail, commercial
overnight delivery service, telex, telegram, telecopier or other
telecommunication device unless otherwise provided herein and confirmed in
writing as soon as practicable. All such notices shall also be sent to the
Holder and any person designated in writing by any Holder to receive copies
of such notices. Any notice to or demand upon the Trustee may be served or
presented, and such demand may be made, at the corporate trust office of the
Trustee, or at such other address as may have been filed in writing by the
Trustee. Any notice to or demand upon the Authority, the Borrower, the
Remarketing Agent, the Placement Agent, the Tender Agent or the Bank shall be
deemed to have been sufficiently given or served for all purposes by being
delivered or sent by telex or by being deposited, postage prepaid, in a post
office letter box, addressed as the case may be,
To the Trustee:
First Union National Bank
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ , ▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Corporate Trust Department
To the Authority:
Philadelphia Authority for Industrial Development
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chairman
(or such other address as may have been filed in writing by the Authority
with the Trustee),
To the Borrower:
Lannett Company, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Vice President - Finance
(or such other address as may have been filed in writing by the Borrower with
the Trustee),
To the Remarketing Agent:
First Union Capital Markets Corp.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Vice President
(or such other address as may have been filed in writing by the Remarketing
Agent with the Trustee),
To the Placement Agent:
First Union Capital Markets Corp.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Director: Tax Advantage Products
To the Tender Agent:
First Union National Bank
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ , ▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Corporate Trust Department
(or such other address as may have been filed in writing by the Tender Agent
with the Trustee),
To the Bank:
First Union National Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇, Vice President
(or such other address as may have been filed in writing by the Bank with the
Trustee),
SECTION 12.09. Evidence of Rights of Bondholders. Any request,
consent or other instrument required or permitted by this Indenture to be
signed and executed by Bondholders may be in any number of concurrent
instruments of substantially similar tenor and shall be signed or executed by
such Bondholders in person or by an agent or agents duly appointed in
writing. Proof of the execution of any such request, consent or other
instrument or of a writing appointing any such agent, or of the holding by
any person of Bonds transferable by delivery, shall be sufficient for any
purpose of this Indenture and shall be conclusive in favor of the Trustee and
of the Authority if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such
request, consent or other instrument or writing may be proved by the
certificate of any notary public or other officer of any jurisdiction,
authorized by the laws thereof to take acknowledgments of deeds, certifying
that the Person signing such request, consent or other instrument
acknowledged to him the execution thereof, or by an affidavit of a witness of
such execution duly sworn to before such notary public or other officer.
The ownership of Bonds shall be proved by the bond registration
books held by the Trustee.
Any request, consent or other instrument or writing of the Holder of
any Bond shall bind every future Holder of the same Bond and the Holder of
every Bond issued in exchange therefor or in lieu thereof, in respect of
anything done or suffered to be done by the Trustee or the Authority in
accordance therewith or in reliance thereon.
SECTION 12.10. Disqualified Bonds. In determining whether the
Holders of the requisite aggregate principal amount of Bonds have concurred
in any demand, request, direction, consent or waiver under this Indenture,
Bonds which are owned or held by or for the account of the Authority or the
Borrower, or by any other obligor on the Bonds, or by any Person directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, the Authority, the Borrower, or any other obligor on the Bonds,
shall be disregarded and deemed not to be Outstanding for the purposes of
this Section. Except for Bonds registered in the name of the Authority or the
Borrower, the Trustee shall not be deemed to have knowledge of the ownership
or the holders of such Bonds. If the pledgee shall establish to the
satisfaction of the Trustee the pledgee's right to vote such Bonds and that
the pledgee is not a Person directly or indirectly controlling or controlled
by, or under direct or indirect common control with, the Authority, the
Borrower or any other obligor on the Bonds, such Bonds shall be deemed
Outstanding. In case of a dispute as to such right, any decision by the
Trustee taken upon the advice of Counsel shall be full protection to the
Trustee.
SECTION 12.11. Money Held for Particular Bonds. The money held by
the Trustee for the payment of the interest, principal or premium due on any
date with respect to particular Bonds (or portions of Bonds in the case of
registered Bonds redeemed in part only) shall, on and after such date and
pending such payment, be set aside on its books and held uninvested in trust
by it for the Holders of the Bonds entitled thereto, subject, however, to the
provisions of Section 11.04 hereof.
SECTION 12.12. Funds. Any fund required by this Indenture to be
established and maintained by the Trustee may be established and maintained
in the accounting records of the Trustee, either as a fund or an account, and
may, for the purposes of such records, any audits thereof and any reports or
statements with respect thereto, be treated either as a fund or as an
account; but all such records with respect to all such funds shall at all
time be maintained in accordance with current corporate trust industry
standards, to the extent practicable, and with due regard for the
requirements of Section 7.05 hereof and for the protection of the security of
the Bonds and the rights of every Holder thereof.
SECTION 12.13. Payments Due on Days other than Business Days. If a
payment day is not a Business Day at the place of payment, then payment may
be made at that place on the next Business Day and no interest shall accrue
for the intervening period.
SECTION 12.14 Provisions Applicable After Conversion Date. (a) From
and after the Conversion Date, all references to "Available Moneys" herein
shall be changed to read as "money" or "moneys" depending on the applicable
context.
(b) From and after the Conversion Date, all provisions
herein requiring notice to or the consent of the Bank shall be deemed to be
deleted and of no force and effect.
SECTION 12.15. Execution in Several Counterparts. This Indenture may
be executed in any number of counterparts and each of such counterparts shall
for all purposes be deemed to be an original; and all such counterparts, or
as many of them as the Authority and the Trustee shall preserve undestroyed,
shall together constitute but one and the same instrument.
SECTION 12.16. Notices to Rating Agency. To the extent the Trustee
has knowledge thereof, written notice shall be provided by the Trustee to
each Rating Agency, if any, of (i) the appointment of any successor Trustee,
Tender Agent, Paying Agent or Remarketing Agent, (ii) any supplemental
indenture or any amendment to the Loan Agreement or the Letter of Credit,
(iii) the expiration, termination or extension of the Letter of Credit, (iv)
the payment of all Outstanding Bonds, and (v) the conversion of the Bonds to
a Fixed Rate.
SECTION 12.17. Governing Law. This Indenture shall be governed by
and construed in accordance with the laws of the Commonwealth of
Pennsylvania, without regard to any conflict of laws provision thereof.
IN WITNESS WHEREOF, the PHILADELPHIA AUTHORITY FOR INDUSTRIAL
DEVELOPMENT has caused this Indenture to be signed in its name by its
Chairman and its seal to be hereunto affixed and attested by its Secretary or
Assistant Secretary, and FIRST UNION NATIONAL BANK, in token of its
acceptance of the trusts created hereunder, has caused this Indenture to be
signed in its corporate name by its authorized officer and its corporate seal
to be hereunto affixed and attested by its authorized officer, all as of the
day and year first above written.
ATTEST: PHILADELPHIA AUTHORITY FOR
INDUSTRIAL DEVELOPMENT
____________________________ By:__________________________________
(Assistant) Secretary Chairman
(SEAL)
ATTEST: FIRST UNION NATIONAL BANK
____________________________ By:__________________________________
Authorized Officer Title:
(SEAL)
EXHIBIT A
FLOATING RATE FORM OF BOND
Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC") to the
Philadelphia Authority for Industrial Development (the "Authority") or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
(the "Registered Owner") hereof, Cede & Co., has an interest herein.
PHILADELPHIA AUTHORITY FOR INDUSTRIAL DEVELOPMENT
TAX-EXEMPT VARIABLE RATE DEMAND/FIXED
RATE REVENUE BOND
(LANNETT COMPANY, INC. PROJECT)
SERIES OF 1999
No. VR-1 $3,700,000
Interest Rate Maturity Date Dated Date CUSIP
------------- ------------- ---------- -----
Variable May 1, 2014 April 30, 1999
THIS BOND IS SUBJECT TO MANDATORY TENDER FOR PURCHASE AT THE TIME
AND IN THE MANNER HEREINAFTER DESCRIBED, AND MUST BE SO TENDERED OR WILL BE
DEEMED TO HAVE BEEN SO TENDERED UNDER CERTAIN CIRCUMSTANCES DESCRIBED HEREIN.
KNOW ALL PERSONS BY THESE PRESENTS that the PHILADELPHIA AUTHORITY
FOR INDUSTRIAL DEVELOPMENT (the "Authority"), for value received, promises to
pay to CEDE & Co. or registered assigns on May 1, 2014, upon surrender
hereof, the principal sum of Three Million Seven Hundred Thousand Dollars
($3,700,000), and in like manner to pay interest on said sum at the rate
described below on the first Business Day of each calendar month and on the
Conversion Date (hereinafter defined), commencing June 1, 1999 (each an
"Interest Payment Date"), from the Interest Payment Date next preceding the
date of authentication hereof to which interest has been paid or duly
provided for, unless the date of authentication hereof is an Interest Payment
Date to which interest has been paid or duly provided for, in which case from
the date of authentication hereof, or unless no interest has been paid or
duly provided for on the Bonds (as hereinafter defined), in which case from
April 30, 1999 (the "Date of Issuance"), until payment of the principal
hereof has been made or duly provided for. Notwithstanding the foregoing, if
this Bond is authenticated after any date which is the Business Day (as
hereinafter defined) next preceding any Interest Payment Date (a "Record
Date") and before the following Interest Payment Date, this Bond shall bear
interest from such Interest Payment Date; provided, however, that if the
Authority shall default in the payment of interest due on such Interest
Payment Date, then this Bond shall bear interest from the next preceding
Interest Payment Date to which interest has been paid or duly provided for,
or, if no interest has been paid or duly provided for on the Bonds, from the
Date of Issuance. The principal of this Bond is payable in lawful money of
the United States of America at the principal corporate trust office of First
Union National Bank, as trustee (together with its successors in trust, the
"Trustee") at 1525 West ▇.▇. ▇▇▇▇▇▇ Boulevard, Charlotte, North Carolina
28288-1153, Attn: Corporate Trust Department, or at the duly designated
office of any successor Trustee under the Trust Indenture dated April 30,
1999, between the Authority and the Trustee (which Trust Indenture, as from
time to time amended and supplemented, is hereinafter referred to as the
"Indenture"). Payment of interest on this Bond shall be made on each Interest
Payment Date to the registered Owner hereof as of the applicable Record Date
and shall be paid by check mailed by the Trustee to such registered owner at
his address as it appears on the registration books of the Authority or at
such other address as is furnished to the Trustee in writing by such
registered Owner, or in such other manner as may be permitted by the
Indenture. The Purchase Price (hereinafter defined) of this Bond shall be
payable by First Union National Bank (together with any successor Tender
Agent, the "Tender Agent") to the registered owner hereof, upon presentation
hereof, at the Delivery Office of the Tender Agent. As used herein, the term
"Business Day" means any day other than a Saturday or Sunday, a legal holiday
on which banking institutions in the State of New York, the Commonwealth of
Pennsylvania, the City of New York or the City of Philadelphia are authorized
or required by law to close, or a day on which the New York Stock Exchange is
closed.
This Bond shall bear interest as follows:
(A) From the Date of Issuance of this Bond to the
Conversion Date, this Bond shall bear interest at the "Floating Rate." The
"Floating Rate" shall be a variable rate of interest equal to the minimum
rate of interest necessary, in the sole judgment of the Remarketing Agent, to
sell the Bonds on any Business Day at a price equal to the principal amount
thereof, exclusive of accrued interest, if any, thereon. The Floating Rate
shall be determined weekly by First Union Capital Markets Corp., Charlotte,
North Carolina (the "Remarketing Agent") on each Wednesday (or if such
Wednesday is not a Business Day, on the next succeeding Business Day) and
shall be effective on the Thursday immediately following the Weekly Period
(as hereinafter defined), all as more fully set forth in the Indenture. The
determination of the Floating Rate shall be conclusive and binding upon the
Authority, the Trustee, the Bank (as hereinafter defined), the Borrower, the
Remarketing Agent, the Tender Agent and the Owners of this Bond.
Anything herein to the contrary notwithstanding, the Floating Rate
shall in no event exceed fifteen percent (15%) per annum.
(B) The Bonds shall bear interest at the "Fixed Rate" from
and after the Conversion Date. In such event, the Fixed Rate shall be
applicable until the maturity of the Bonds. The "Fixed Rate" shall be a fixed
annual interest rate on the Bonds established by the Remarketing Agent as the
rate of interest for which the Remarketing Agent has received commitments on
or prior to the fifth (5th) day preceding the Conversion Date, at a price of
par without discount.
Prior to the Conversion Date, interest on the Bonds shall be
computed on the basis of a 365 or 366 day year, as applicable, and the actual
number of days elapsed. On and after the Conversion Date, interest on the
Bonds shall be computed on the basis of a 360 day year of twelve 30 day
months.
As used herein, the term "Conversion Date" means the Optional
Conversion Date; the term "Letter of Credit Termination Date" means the later
of (i) that date upon which the Letter of Credit (hereinafter defined) shall
expire or terminate pursuant to its terms, or (ii) that date to which the
expiration or termination of the Letter of Credit may be extended, from time
to time, either by extension or renewal of the existing Letter of Credit or
the issuance of a Substitute Letter of Credit (as defined in the Indenture);
the term "Optional Conversion Date" means that date, which shall be a
Business Day, from and after which the interest rate on the Bonds is
converted from the Floating Rate to the Fixed Rate as a result of the
exercise by the Borrower of the Conversion Option; the term "Conversion
Option" means the option granted to the Borrower in the Indenture pursuant to
which the interest rate on the Bonds is converted from the Floating Rate to
the Fixed Rate as of the Optional Conversion Date; the term "Purchase Price"
means an amount equal to 100% of the principal amount of any Bond tendered or
deemed tendered for purchase pursuant to the Indenture or with respect to
which the Demand Purchase Option has been exercised, plus accrued and unpaid
interest thereon to the date of purchase.
The interest rate on the Bonds may be converted from the Floating
Rate to the Fixed Rate upon satisfaction of certain conditions and notice
given by the Trustee at the direction of the Borrower to the Owners of the
Bonds at least twenty (20) days but not more than thirty (30) days prior to
the Conversion Date in accordance with the requirements of the Indenture, and
the Bonds shall be subject to mandatory tender by the Owners thereof on the
Conversion Date. On and after the Conversion Date, the Demand Purchase Option
will not be available to the Owners of the Bonds. On or prior to the
Conversion Date, owners of the Bonds shall be required to deliver their Bonds
to the Tender Agent for purchase at the Purchase Price. Accrued interest on
the Bonds will be payable on the Conversion Date to the Owners of Bonds as of
the Conversion Date. Any Bonds not delivered to the Tender Agent on or prior
to the Conversion Date ("Undelivered Bonds"), for which there has been
irrevocably deposited in trust with the Trustee or the Tender Agent an amount
of money sufficient to pay the Purchase Price of the Undelivered Bonds, shall
be deemed to have been purchased at the Purchase Price and are deemed to be
no longer outstanding with respect to such prior Owners. IN THE EVENT OF A
FAILURE BY AN OWNER OF BONDS TO DELIVER ITS BONDS ON OR PRIOR TO THE
CONVERSION DATE, SAID OWNER SHALL NOT BE ENTITLED TO ANY PAYMENT (INCLUDING
ANY INTEREST TO ACCRUE ON OR SUBSEQUENT TO THE CONVERSION DATE) OTHER THAN
THE PURCHASE PRICE FOR SUCH UNDELIVERED BONDS, AND ANY UNDELIVERED BONDS
SHALL NO LONGER BE ENTITLED TO THE BENEFITS OF THE INDENTURE, EXCEPT FOR THE
PURPOSE OF PAYMENT OF THE PURCHASE PRICE THEREFOR.
Notwithstanding the foregoing provisions, to the extent that at the
close of the fifth (5th) Business Day prior to the proposed Optional
Conversion Date, the Remarketing Agent has not presented to the Borrower firm
commitments for the purchase of all of the Bonds, the Borrower, at its
option, may rescind an optional conversion of the Bonds. Any such election to
rescind must be made by the close of the fourth (4th) Business Day prior to
the proposed Conversion Date and the Borrower shall give written notice to
the Trustee, the Tender Agent and the Bank of its decision to rescind the
optional conversion by such time. The Borrower shall cause the Trustee to
immediately notify the Owners of such rescission and thereafter the Bonds
shall bear interest at the Floating Rate in effect for the then current
Weekly Period and thereafter the Bonds shall bear interest at the Floating
Rate until any subsequent Conversion Date effected in accordance with the
Indenture. As used herein, "Weekly Period" means, while this Bond bears
interest at the Floating Rate, the weekly period that begins on and includes
Thursday of each calendar week and ends at the close of business on Wednesday
of the next succeeding week.
At any time prior to the Record Date preceding the first Interest
Payment Date following the Conversion Date, the Trustee or the Tender Agent,
as the case may be, shall deliver a replacement Bond evidencing interest
payable at the Fixed Rate.
Prior to the Conversion Date, this Bond shall be purchased, at the
option of the Owner hereof ("Demand Purchase Option") at the Purchase Price,
upon:
(a) delivery by such Owner to the Trustee and the Tender
Agent at their principal corporate trust office and Delivery Office
(hereinafter defined) respectively; and to the Remarketing Agent at its
principal office, of a notice (a "Demand Purchase Notice") (said notice to be
irrevocable and effective upon receipt) which states (i) the aggregate
principal amount and the bond numbers of Bonds to be purchased; and (ii) the
date on which such Bonds are to be purchased, which date shall be a Business
Day not prior to the Business Day next succeeding the date of delivery of
such notice and which date shall be prior to the Conversion Date; and
(b) delivery to the Tender Agent at its Delivery office
(hereinafter defined) at or prior to 10:00 a.m., New York City time, on the
date designated for purchase in the applicable Demand Purchase Notice of such
Bonds to be purchased with an appropriate endorsement for transfer or
accompanied by a bond power endorsed in blank.
Any Bond as to which a Demand Purchase Notice has been delivered
pursuant to (a) above, must be delivered to the Tender Agent as provided in
(c) above, and any such Bonds not so delivered ("Undelivered Bonds"), for
which there has been irrevocably deposited in trust with the Trustee or the
Tender Agent an amount of money sufficient to pay the Purchase Price thereof,
shall be deemed to have been purchased at the Purchase Price and are deemed
to be no longer outstanding with respect to such tendering Owner. IN THE
EVENT OF A FAILURE BY AN OWNER OF BONDS TO DELIVER ITS BONDS AS SPECIFIED
ABOVE, SAID OWNER SHALL NOT BE ENTITLED TO ANY PAYMENT (INCLUDING ANY
INTEREST TO ACCRUE ON OR SUBSEQUENT TO THE DATE DESIGNATED FOR PURCHASE IN
THE APPLICABLE DEMAND PURCHASE NOTICE) OTHER THAN THE PURCHASE PRICE FOR SUCH
UNDELIVERED BONDS, AND ANY UNDELIVERED BONDS SHALL NO LONGER BE ENTITLED TO
THE BENEFITS OF THE INDENTURE, EXCEPT FOR THE PAYMENT OF THE PURCHASE PRICE
THEREFOR.
Notwithstanding the foregoing provisions, in the event any Bond as
to which the Owner thereof has exercised the Demand Purchase Option is
remarketed to such Owner pursuant to the Remarketing Agreement, such owner
need not deliver such Bond to the Tender Agent as provided in (c) above,
although such Bond shall be deemed to have been delivered to the Tender
Agent, redelivered to such owner, and remarketed for purposes of the
Indenture.
Any delivery of a notice required to be made to the Trustee at its
principal corporate trust office pursuant to (a) above shall be delivered to
the Trustee at ▇▇▇▇ ▇▇▇▇ ▇.▇. Harris Boulevard, Charlotte, North Carolina
28288-1153, Attn: Corporate Trust Department, or to the office designated for
such purpose by any successor Trustee; any delivery of a notice required to
be made to the Remarketing Agent at its principal office pursuant to (a)
above shall be delivered to the Remarketing Agent at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Money Market Trading and
Sales, or to the office designated for such purpose by any successor
Remarketing Agent; and any delivery of Bonds required to be made to the
Tender Agent pursuant to (b) above shall be delivered to the Tender Agent at
▇▇▇▇ ▇▇▇▇ ▇.▇. Harris Boulevard, Charlotte, North Carolina 28288-1153, Attn:
Corporate Trust Department, or the office designated for such purpose by any
successor Tender Agent (the "Delivery Office").
This Bond and the Bonds of the Series of which it is a part is
comprised of a duly authorized issue of bonds designated as "Tax-Exempt
Variable Rate Demand/Fixed Rate Revenue Bonds (Lannett Company, Inc.
Project), Series of 1999" (the "Bonds") issued by the Authority in the
aggregate principal amount of $3,700,000 under and by virtue of the
Pennsylvania Economic Development Financing Law, as amended and supplemented
(the "Act"), and by virtue of a resolution duly adopted by the Authority (the
"Bond Resolution"), and equally and ratably secured under the Indenture for
the purpose of raising funds to finance a project (the "Project") consisting
of (i) the construction of an approximately 40,000 square foot manufacturing
and manufacturing-related facility as an addition to a 33,000 square foot
existing facility located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ (the
"9000 State Road Facility") or, alternatively, the acquisition and renovation
of an existing manufacturing and manufacturing-related facility located at
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ (the "▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ Facility");
(ii) the acquisition of equipment for installation and use in either the ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ Facility or the ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ Facility; and (iii) the payment of
a portion of the costs of issuance of the Bonds. Pursuant to a Loan
Agreement, dated April 30, 1999 (the "Loan Agreement"), by and between the
Authority and Lannett Company, Inc. (the "Borrower"), installment payments
sufficient for the prompt payment when due of the principal and Purchase
Price of, premium, if any, and interest on the Bonds are to be paid to the
Trustee for the account of the Authority and deposited in the Bond Fund
established by the Indenture and have been duly pledged for that purpose, all
to the extent and in the manner provided in the Indenture.
The Bonds are all issued under and are equally and ratably secured
by and entitled to the protection of the Indenture, pursuant to which all
payments due from the Borrower to the Authority under the Loan Agreement
(other than certain indemnification payments and the payment of certain
expenses of the Authority) are assigned to the Trustee to secure the payment
of the principal and Purchase Price of, and premium, if any, and interest on
the Bonds and certain costs, fees and expenses of the Trustee. The Borrower
has caused to be delivered to the Trustee an irrevocable direct pay letter of
credit (together with any Substitute Letter of Credit, the "Letter of
Credit") issued by First Union National Bank (in such capacity, the "Bank")
and dated the Date of Issuance of the Bonds, which will expire, unless
earlier terminated or extended, on October 31, 2002. Subject to certain
conditions, the Letter of Credit may be replaced by a Substitute Letter of
Credit of another commercial bank, savings and loan association or savings
bank. Under the Letter of Credit, the Trustee will be entitled to draw up to
an amount sufficient to pay (a) the principal of the Bonds or the portion of
the Purchase Price corresponding to the principal of the Bonds and (b) up to
forty-six (46) days' accrued interest (calculated at the maximum rate of
fifteen percent (15%) per annum based on 365 or 366 day year, as applicable,
and the actual number of days elapsed) on the Bonds or the portion of the
Purchase Price of the Bonds corresponding to accrued interest thereon.
Reference is hereby made to the Indenture, the Loan Agreement and
the Letter of Credit for a description of the property pledged and assigned,
the provisions, among others, with respect to the nature and extent of the
security, the rights, duties and obligations of the Authority, the Trustee
and the Owners of the Bonds and the terms upon which the Bonds are issued and
secured; and the Owner of this Bond by acceptance hereof, hereby consents to
the terms and provisions of all of the foregoing as a material portion of the
consideration for the issuance of this Bond.
THE BONDS ARE SPECIAL LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE
SOLELY AND EXCLUSIVELY FROM THE PAYMENTS REQUIRED TO BE MADE BY THE BORROWER
UNDER THE LOAN AGREEMENT AND FROM DRAWS ON THE LETTER OF CREDIT. NO RECOURSE
SHALL BE HAD FOR THE PAYMENT OF PRINCIPAL, PURCHASE PRICE OR REDEMPTION PRICE
OF, OR INTEREST ON, THIS BOND, OR ANY CLAIM BASED HEREON OR ON THE INDENTURE
OR THE LOAN AGREEMENT, AGAINST THE AUTHORITY OR ANY SUCCESSOR BODY OR AGAINST
ANY OFFICER, MEMBER, EMPLOYEE OR AGENT PAST, PRESENT OR FUTURE OF THE
AUTHORITY OR ANY SUCCESSOR BODY, UNDER ANY CONSTITUTIONAL PROVISION, STATUTE
OR RULE OF LAW, OR BY THE ENFORCEMENT OF ANY ASSESSMENT OR BY ANY LEGAL OR
EQUITABLE PROCEEDING OR OTHERWISE, AND ALL SUCH LIABILITY OF THE AUTHORITY OR
ANY SUCCESSOR BODY OR ANY SUCH OFFICERS, MEMBERS, EMPLOYEES OR AGENTS IS
RELEASED AS A CONDITION OF, AND IN CONSIDERATION FOR, THE ISSUANCE OF THIS
BOND. AS A CONDITION OF, AND IN CONSIDERATION FOR THE ISSUANCE OF THIS BOND,
THE REGISTERED OWNER HEREOF COVENANTS THAT HE WILL NOT SUE THE AUTHORITY OR
ITS MEMBERS, OFFICERS, EMPLOYEES OR AGENTS, PAST, PRESENT OR FUTURE, EXCEPT
AS EXPRESSLY PERMITTED IN THE INDENTURE AND THE LOAN AGREEMENT. THE BONDS AND
THE INTEREST THEREON SHALL NOT BE IN ANY WAY A DEBT OR LIABILITY OF THE
COMMONWEALTH OF PENNSYLVANIA OR ANY POLITICAL SUBDIVISION THEREOF AND SHALL
NOT CREATE OR CONSTITUTE ANY INDEBTEDNESS, LIABILITY OR OBLIGATION OF THE
COMMONWEALTH OF PENNSYLVANIA OR ANY POLITICAL SUBDIVISION THEREOF, WHETHER
LEGAL, MORAL OR OTHERWISE, AND THE AUTHORITY SHALL NOT INCUR ANY INDEBTEDNESS
ON BEHALF OF OR IN ANY WAY TO OBLIGATE THE COMMONWEALTH OF PENNSYLVANIA OR
ANY POLITICAL SUBDIVISION THEREOF. NEITHER THE MEMBERS OF THE AUTHORITY NOR
ANY PERSON EXECUTING THE BONDS SHALL BE LIABLE PERSONALLY ON THE BONDS BY
REASON OF THE ISSUANCE THEREOF. THE AUTHORITY IS A CONDUIT AUTHORITY AND HAS
NO TAXING POWER.
This Bond is transferable by the registered owner hereof in person
or by his attorney duly authorized in writing, at the office of the Trustee
in Philadelphia, Pennsylvania, or at the Delivery Office of the Tender Agent
or that of any successor Tender Agent, but only in the manner, subject to the
limitations and upon payment of the charges provided in the Indenture, and
upon surrender and cancellation of this Bond. Upon such transfer a new
registered Bond or Bonds of authorized denomination or denominations for the
same aggregate principal amount will be issued to the transferee in exchange
therefor. The Authority, the Tender Agent and the Trustee may deem and treat
the registered Owner hereof as the absolute owner hereof (whether or not this
Bond shall be overdue) for all purposes, and neither the Authority, the
Tender Agent nor the Trustee shall be bound by any notice or knowledge to the
contrary.
Prior to the Conversion Date, (i) the Bonds are issuable as fully
registered bonds without coupons in the denominations of $100,000 or any
integral multiple of $5,000 in excess thereof; and (ii) the Bonds may not be
issued, exchanged or transferred except in authorized denominations of
$100,000 or any integral multiple of $5,000 in excess thereof. From and after
the Conversion Date, the Bonds shall be issuable as fully registered bonds
without coupons in the denominations of $5,000 or any integral multiple
thereof.
Extraordinary Redemption
The Bonds are callable for redemption in the event (1) the Project
or any portion thereof is damaged or destroyed or taken in a condemnation
proceeding as provided in Section 6.04 of the Loan Agreement, or (2) the
Borrower shall exercise its option to cause the Bonds to be redeemed as
provided in Section 9.02 of the Loan Agreement. If called for redemption at
any time pursuant to (1) or (2) above, the Bonds shall be subject to
redemption by the Authority on any Interest Payment Date, in whole or in
part, at a redemption price of one hundred percent (100%) of the principal
amount thereof plus accrued interest to the redemption date.
Mandatory Redemption
The Bonds are subject to mandatory redemption, five (5) Business
Days prior to the Letter of Credit Termination Date, in whole, at a
redemption price equal to one hundred percent (100%) of the principal amount
thereof being redeemed plus accrued interest to the redemption date if, on
the thirtieth (30th) Business Day prior to the Letter of Credit Termination
Date, the Trustee shall not have received a Substitute Letter of Credit which
will be effective on or before the Letter of Credit Termination Date.
The Bonds are also subject to mandatory redemption, in whole or in
part, on any Interest Payment Date, at a redemption price equal to one
hundred percent (100%) of the principal amount thereof being redeemed plus
accrued interest to the redemption date, if any proceeds of the sale of the
Bonds remain on deposit in the Project Fund established under the Indenture
upon completion of the Project, under the conditions specified therein.
If less than all the Bonds are to be redeemed, the particular Bonds
or portions thereof to be redeemed shall be selected by the Trustee at random
or in such other manner as the Trustee in its discretion shall deem fair and
appropriate.
The Bonds are also subject to mandatory redemption, in whole, at any
time, within one hundred eighty (180) days after the occurrence of a
Determination of Taxability (as hereinafter defined), at a redemption price
equal to one hundred percent (100%) of the aggregate principal amount of
Bonds Outstanding plus accrued interest to the redemption date.
"Event of Taxability" with respect to any Bond means a change of law
or regulations, or the interpretation thereof, or the occurrence of any other
event or the existence of any other circumstance (including without
limitation the fact that any representations or warranties of the Borrower or
the Authority made in connection with the issuance of any Bond is or was
untrue or that a covenant of the Borrower has been breached) that has the
effect of causing interest payable on any Bond to be includable in gross
income for federal income tax purposes under Section 103 of the Internal
Revenue Code of 1986, as amended, and the applicable regulations thereunder
(the "Code") other than by reason that such interest (i) is includable in the
gross income of an Owner or former Owner of any Bond while such owner or
former Owner is or was a "substantial user" or a "related person" to a
"substantial user" of the Project (as such terms are used in Section
147(a)(1) of the Code) or (ii) is deemed an item of tax preference including,
without limitation, an item subject to any alternative minimum tax.
"Determination of Taxability" with respect to any Bond shall be
deemed to have been made upon the first to occur of the following events:
(i) the date on which the Borrower determines that an Event
of Taxability has occurred by filing with the Trustee a statement to that
effect supported by one or more tax schedules, returns or documents which
disclose that such an Event of Taxability has occurred;
(ii) the date on which the Borrower or the Trustee is
advised by private ruling, technical advice or any other written
communication from any authorized official of the Internal Revenue Service
that, based upon any filings of the Borrower or any other person or entity,
or upon any review or audit of the Borrower or any other person or entity, or
upon any other grounds whatsoever, an Event of Taxability has occurred;
(iii) the date on which the Trustee or the Borrower is
advised that a court of competent jurisdiction has issued an order,
declaration, ruling or judgment to the effect that an Event of Taxability has
occurred;
(iv) the date the Trustee shall have received written
notice from any Owner of the Bonds that such Owner has received a written
assertion or claim by any authorized official of the Internal Revenue Service
that an Event of Taxability has occurred; or
(v) the date the Trustee is notified that the Internal
Revenue Service has issued any private ruling, technical advice or any other
written communication, with or to the effect that an Event of Taxability has
occurred; provided, however, that (a) no Determination of Taxability
described in each of clauses (i) or (v) above shall be deemed to have
occurred unless the Trustee shall have received a written opinion of
nationally recognized bond counsel satisfactory to the Trustee, in form and
substance satisfactory to the Bank and the Borrower and not unsatisfactory to
the Trustee, to the effect that an Event of Taxability has occurred, and (b)
no Determination of Taxability described in each of clauses (i), (ii), (iii),
(iv) or (v) above shall be deemed to have occurred until 180 days shall have
elapsed from the dates described in clauses (i), (ii), (iii), (iv) or (v)
above without such Determination of Taxability having been rescinded or
cancelled.
Mandatory Sinking Fund Redemption
The Bonds are subject to mandatory redemption on the Interest
Payment Date occurring in the month of May in each of the years set forth
below commencing on the Interest Payment Date occurring in May, 2000 (each, a
"Mandatory Sinking Account Payment Date"), at a redemption price equal to
100% of the principal amount thereof plus accrued interest as follows:
Mandatory Sinking
Year Account Payments
---- ----------------
2003 $535,000
2004 $810,000
2005 $655,000
2006 $690,000
2007 $105,000
2008 $110,000
2009 $115,000
2010 $125,000
2011 $130,000
2012 $135,000
2013 $140,000
2014* $150,000
*Maturity
Optional Redemption
On or prior to the Conversion Date, upon satisfaction of the notice
provisions of the Indenture, the Bonds are subject to redemption by the
Authority, at the option of the Borrower, at any time, in whole or in part,
at the redemption price of 100% of the principal amount thereof being
redeemed plus accrued interest to the redemption date. Notwithstanding the
foregoing, no such optional redemption shall occur unless on the redemption
date there shall be available in the Bond Fund established under the
Indenture sufficient Available Moneys (as defined in the Indenture) to pay
all amounts due with respect to such a redemption.
In the event any of the Bonds or portions thereof are called for
redemption as aforesaid, notice of the call for redemption, identifying the
Bonds or portions thereof to be redeemed and the redemption price (including
the premium, if any), shall be given by the Trustee in accordance with the
Letter of Representations so long as the Bonds are registered in the name of
The Depository Trust Company ("DTC") or its nominee, and if the DTC
book-entry-only system shall be discontinued, notice of the call for
redemption shall be given by mailing a copy of the redemption notice by
first-class mail at least (i) ten (10) days prior to the date fixed for
redemption in the event of a mandatory redemption fifteen (15) days prior to
the Letter of Credit Termination Date; and (ii) thirty (30) days but not more
than sixty (60) days prior to the date fixed for redemption in all other
instances to the Owner of each Bond to be redeemed in whole or in part at the
address shown on the registration books. Any notice mailed as provided above
shall be conclusively presumed to have been duly given, whether or not the
Owner receives the notice. No further interest shall accrue on the principal
of any bond called for redemption after the redemption date if Available
Moneys (as defined in the Indenture) sufficient for such redemption have been
deposited with the Trustee. Notwithstanding the foregoing, the notice
requirements contained in the first sentence of this paragraph may be deemed
satisfied with respect to a transferee of a Bond which has been purchased
pursuant to the Demand Purchase Option under certain circumstances provided
in Section 4.06 of the Indenture, after such ▇▇▇▇ has previously been called
for redemption, notwithstanding the failure to satisfy the notice
requirements of the first sentence of this paragraph with respect to such
transferee.
Mandatory Tender
The Bonds are subject to mandatory tender in whole on the effective
date of any Substitute Letter of Credit provided by a Substitute Bank (as
such term is defined in the Indenture), at a Purchase Price equal to 100% of
the principal amount thereof, plus accrued interest to the purchase date. In
the event of a mandatory tender, notice of such tender shall be given by the
Trustee by delivering or mailing by first-class mail a copy of such notice at
least twenty (20) days but not more than thirty (30) days prior to the date
of such tender to the Owner of each Bond at the address shown on the
registration books.
The Bonds are issued pursuant to and in full compliance with the
Constitution and laws of the Commonwealth of Pennsylvania, particularly the
Act, and by appropriate action duly taken by the Authority authorizing the
execution and delivery of the Loan Agreement and the Indenture. The Bonds
have been issued under the provisions of the Act.
Notwithstanding anything to the contrary contained herein or in the
Indenture, the Loan Agreement or in any other instrument or document executed
by or on behalf of the Authority in connection herewith, no stipulation,
covenant, agreement or obligation contained herein or therein shall be deemed
or construed to be a stipulation, covenant, agreement or obligation of any
present or future member, commissioner, director, trustee, officer, employee
or agent of the Authority, or of any successor to the Authority, in any such
person's individual capacity, and no such person, in his individual capacity,
shall be liable personally for any breach or nonobservance of or for any
failure to perform, fulfill or comply with any such stipulations, covenants,
agreements or the principal of or premium, if any, or interest on any of the
Bonds or for any claim based thereon or on any such stipulation, covenant,
agreement or obligation, against any such person, in his individual capacity,
either directly or through the Authority or any successor to the Authority,
under any rule of law or equity, statute or constitution or by the
enforcement of any assessment or penalty or otherwise, and all such liability
of any such person, in his individual capacity, is hereby expressly waived
and released.
The Owner of this Bond shall have no right to enforce the provisions
of the Indenture or to institute action to enforce the covenants therein, or
to take any action with respect to any default under the Indenture, or to
institute, appear in or defend any suit or other proceedings with respect
thereto, unless certain circumstances described in the Indenture shall have
occurred. In certain events, on the conditions, in the manner and with the
effect set forth in the Indenture, the principal of all the Bonds issued
under the Indenture and then outstanding may become or may be declared due
and payable before the stated maturity thereof, together with interest
accrued thereon.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modifications of the rights and obligations of
the Authority and the rights of the owners of the Bonds at any time by the
Authority with the consent of the Bank and the holders of all Bonds at the
time outstanding. Any such consent or any waiver by the Bank and the holders
of all Bonds at the time outstanding shall be conclusive and binding upon the
Owner and upon all future Owners of this Bond and of any Bond issued in
replacement hereof whether or not notation of such consent or waiver is made
upon this Bond. The Indenture also contains provisions which, subject to
certain conditions, permit or require the Trustee to waive certain past
defaults under the Indenture and their consequences.
It is hereby certified, recited and declared that all acts,
conditions and things required to exist, happen and be performed precedent to
and in connection with the execution and delivery of the Indenture and the
issuance of this Bond do exist, have happened and have been performed in due
time, form and manner as required by law; and that the issuance of this Bond
and the issue of which it forms a part, together with all other obligations
of the Authority, does not exceed or violate any constitutional or statutory
limitation.
This Bond shall not be valid or become obligatory for any purpose or
be entitled to any security or benefit under the Indenture until the
certificate of authentication hereon shall have been signed by the Trustee or
the Tender Agent, as authenticating agent.
IN WITNESS WHEREOF, the Philadelphia Authority for Industrial
Development has caused this Bond to be signed in its name and on its behalf
by the manual or facsimile signature of its Chairman and its corporate seal
to be affixed, imprinted or reproduced hereon and attested by the manual or
facsimile signature of its Secretary or Assistant Secretary, all as of the
Date of Issuance.
ATTEST: PHILADELPHIA AUTHORITY FOR
INDUSTRIAL DEVELOPMENT
____________________________ By:__________________________________
(Assistant) Secretary Chairman
(SEAL)
(Form of Certificate of Authentication)
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds of the issue described in the
within-mentioned Trust Indenture.
FIRST UNION NATIONAL BANK,
as Trustee and Tender Agent
By:_________________________
Authorized Signature
Date of Authentication: April ___, 1999
(Form of Transfer)
FOR VALUE RECEIVED, ________________ the undersigned, hereby sells,
assigns and transfers unto _____________________ (Tax Identification or
Social Security No.______________) the within Bond and all rights thereunder,
and hereby irrevocably constitutes and appoints _______________ attorney to
transfer the within Bond on the books kept for registration thereof, with
full power of substitution in the premises.
Dated: ____________________ _____________________________
NOTICE: Signature must be guaranteed by an approved eligible guarantor
institution, an institution which is a participant in a Securities Transfer
Association recognized signature guarantee program.
NOTICE: The Signature to this assignment must correspond with the name as it
appears upon the face of the within Bond in every particular, without
alteration or enlargement or any change whatever.
FORM OF BOND COUNSEL OPINION
Re: Philadelphia Authority for Industrial Development
$3,700,000 Tax-Exempt Variable Rate Demand/Fixed Rate Revenue Bonds
(Lannett Company, Inc. Project)
Series of 1999 (the "Bonds")
TO THE REGISTERED OWNERS OF THE ABOVE BONDS:
We have acted as Bond Counsel in connection with the issuance by the
Philadelphia Authority for Industrial Development (the "Authority") of the
above-captioned Bonds under the Pennsylvania Economic Development Financing
Law, as supplemented and amended (the "Act"). The proceeds of the Bonds will
be used by the Authority to provide funds to Lannett Company, Inc., (the
"Borrower") to finance a project (the "Project") consisting of (i) the
construction of an approximately 40,000 square foot manufacturing and
manufacturing-related facility as an addition to a 33,000 square foot
existing facility located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ (the
"9000 State Road Facility") or, alternatively, the acquisition and renovation
of an existing manufacturing and manufacturing-related facility located at
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ (the "▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ Facility");
(ii) the acquisition of equipment for installation and use in either the ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ Facility or the ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ Facility; and (iii) the payment of
a portion of the costs of issuance of the Bonds. All capitalized terms used
in this opinion and not defined herein shall have the meanings assigned to
them in the Indenture unless the context clearly requires otherwise.
The Authority and the Borrower have entered into a Loan Agreement,
dated April 30, 1999 (the "Loan Agreement"), pursuant to which the Authority
has agreed to loan the proceeds of the Bonds to the Borrower and the Borrower
has agreed, among other things, to make certain payments in such amounts and
at such times as to permit the Authority to pay, among other things, the
principal of, premium, if any, and interest on the Bonds when due.
Pursuant to the provisions of a Trust Indenture, dated April 30,
1999 (the "Indenture"), between the Authority and First Union National Bank,
as trustee (the "Trustee"), the Authority has, among other things, pledged,
assigned and granted to the Trustee substantially all of its right, title and
interest in and to the Loan Agreement (except for certain indemnification
rights and rights to be reimbursed for certain costs and expenses that it may
incur as provided in the Loan Agreement) and has granted a security interest
in the loan payments receivable by the Authority under the Loan Agreement.
The Bonds issued this date mature on May 1, 2014 and bear interest
and are subject to purchase and redemption prior to maturity upon the terms
and conditions stated therein and in the Indenture. The Bonds shall be in
denominations of $100,000 or integral multiples of $5,000 in excess thereof.
In connection with the issuance of the Bonds, First Union National
Bank (the "Bank"), at the request of the Borrower, has issued a certain
irrevocable, direct pay Letter of Credit dated the date of issuance of the
Bonds (the "Letter of Credit"), in favor of the Trustee. Pursuant to the
terms and conditions set forth in the Letter of Credit and the Indenture, on
each debt service payment date the Trustee shall draw upon the Letter of
Credit the amount necessary to pay the principal of and interest payable on
the Bonds on such debt service payment date.
In connection with providing our opinion, we have examined the
following:
1 . The Act;
2. Section 103 and Sections 141 through 150 of the Internal
Revenue Code of 1986, as amended (the "Code");
3. Copies of the proceedings of the Authority in connection
with the issuance of the Bonds, including, particularly, the Authority's
authorizing resolution (the "Resolution");
4. A copy of the resolution of the Borrower authorizing,
among other things, the execution and delivery of the Loan Agreement;
5. A copy of the executed Letter of Credit;
6. A specimen copy of one of the Bonds (we assume due
execution and authentication of each Bond);
7. The Non-Arbitrage Certificate executed and delivered by
the Authority;
8. The Tax Compliance Agreement executed and delivered by
the Borrower and the Trustee;
9. The Form 8038 executed by the Authority; and
10. Executed copies of the Indenture, the Loan Agreement,
the Reimbursement Agreement, the Letter of Credit, the Remarketing Agreement,
the Pledge and Security Agreement, the Borrower General Certificate, the
Authority General Certificate and the other documents, agreements,
certificates and opinions delivered at the closing held this day (the
"Closing").
Based upon our examination of the foregoing and upon our attendance
at the Closing, and subject to the qualifications and limitations hereinafter
set forth, it is our opinion that, as of the date hereof:
A. The Authority is a body corporate and politic and a
public instrumentality of the Commonwealth of Pennsylvania, duly organized
and validly existing under the Act, with full power and authority to
undertake the financing of the Project, to execute and deliver the Loan
Agreement and the Indenture and to issue the Bonds.
B. The Indenture and the Loan Agreement have been duly
authorized, executed and delivered by the Authority and, assuming due
authorization and execution by the other parties thereto, each constitutes
the legal, valid and binding obligation of the Authority enforceable in
accordance with its respective terms.
C. The issuance and sale of the Bonds have been duly
authorized by the Authority and, assuming due execution and authentication as
stated above, the Bonds are entitled to the benefit and security of the
Indenture and constitute the legal, valid and binding special limited
obligations of the Authority enforceable in accordance with their terms.
D. Under the laws of the Commonwealth of Pennsylvania as
currently enacted and construed, the Bonds are exempt from personal property
taxes in Pennsylvania and the interest on the Bonds is exempt from
Pennsylvania personal income tax and Pennsylvania corporate net income tax.
E. Under existing law as currently enacted and construed,
interest on the Bonds is excluded from gross income for federal income tax
purposes under Section 103(a) of the Code, except for any period during which
the Bonds are held by a "substantial user" of the Project Facilities or by a
"related person" within the meaning of Section 147(a) of the Code.
F. Interest on the Bonds is an item of tax preference under
Section 57 of the Code, and thus is subject to both individual and corporate
alternative minimum tax for federal income tax purposes.
In providing the foregoing opinions, we advise you as follows:
(a) Our opinion set forth in paragraph E above is subject
to the condition that the Authority and the Borrower comply with all
requirements of the Code that must be satisfied in order that the interest on
the Bonds be (or continue to be) excluded from gross income for federal
income tax purposes. Failure to comply with such requirements could cause the
interest on the Bonds to be included in gross income for federal income tax
purposes retroactive to the date of the issuance of the Bonds.
(b) In providing our opinion set forth in paragraph E
above, we have assumed continuing compliance by the Authority and the
Borrower with the applicable requirements of the Code and the regulations
promulgated thereunder that must be met in order for the interest on the
Bonds to be excludable from the gross income of a Bondholder for federal
income tax purposes and we are relying, without independent investigation,
upon the representations, warranties and continuing covenants of the Borrower
and the Authority contained in the various documents, instruments, agreements
and certificates delivered at closing (particularly as such covenants relate
to the use of the proceeds of the Bonds and the Borrower's and the
Authority's undertakings to comply with the requirements of the Code). In
addition, we have assumed the accuracy of the factual information and the
truthfulness of the expectations set forth in the Non-Arbitrage Certificate
and the Tax Compliance Agreement, referred to above.
(c) The enforceability of the provisions of the Bonds, the
Indenture and the Loan Agreement (and any other applicable document) may be
limited by applicable bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally.
(d) Equitable remedies with respect to the Bonds, the
Indenture and the Loan Agreement (and any other applicable document) lie in
the discretion of the courts and, accordingly, may not be available.
(e) Except as specifically set forth above, we express no
opinion regarding other federal income tax consequences arising with respect
to the Bonds and the effects, if any, of certain other provisions of the Code
that could result in collateral federal income tax consequences to certain
investors with respect to tax-exempt interest.
(f) We have not been engaged to verify, nor have we
independently verified, nor do we express any opinion to the registered
owners of the Bonds with respect to, the accuracy, completeness or
truthfulness of any statements, certifications, information or financial
statements set forth in the Placement Memorandum dated April 30, 1999 (the
"Placement Memorandum"), or with respect to any other materials used in
connection with the placement of the Bonds.
(g) We express no opinion with respect to whether the
Authority, the Borrower or any other person, in connection with the placement
of the Bonds or the preparation of the Placement Memorandum, has made any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make any statement made, not misleading. Further, we
have not verified, and express no opinion as to the accuracy of, any "CUSIP"
identification number that may be printed on any Bond. We have also assumed
the genuineness of the signatures appearing on all the certificates,
documents and instruments executed and delivered at closing.
(h) We call to your attention the fact that the Bonds are
special limited obligations of the Authority, payable only from draws by the
Trustee on the Letter of Credit pursuant to the terms thereof and the
payments made by the Borrower under the Loan Agreement and that the Bonds do
not pledge the general credit or taxing powers of the Commonwealth of
Pennsylvania or any other political subdivision thereof.
Very truly yours,
OBERMAYER ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & HIPPEL LLP
EXHIBIT B
FIXED RATE FORM OF BOND
Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC") to the
Philadelphia Authority for Industrial Development (the "Authority") or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
(the "Registered Owner") hereof, Cede & Co., has an interest herein.
PHILADELPHIA AUTHORITY FOR INDUSTRIAL DEVELOPMENT
TAX-EXEMPT REVENUE BOND
(LANNETT COMPANY, INC. PROJECT)
SERIES OF 1999
No. FR-1 $
Interest Rate Maturity Date Dated Date CUSIP
------------- ------------- ---------- -----
May 1, 2014
KNOW ALL PERSONS BY THESE PRESENTS that the PHILADELPHIA AUTHORITY
FOR INDUSTRIAL DEVELOPMENT (the "Authority"), for value received, promises to
pay to CEDE & Co. registered assigns, upon surrender hereof, the principal
sum of _________________________________ Dollars ($___________), and in like
manner to pay (calculated on the basis of a 360-day year or twelve 30 day
months) on said sum at the rate of ________% per annum on May 1 and November
1 of each year, commencing ______________ (each an "Interest Payment Date"),
from the Interest Payment Date next preceding the date of authentication
hereof to which interest has been paid or duly provided for, unless the date
of authentication hereof is an Interest Payment Date to which interest has
been paid or duly provided for, in which case from the date of authentication
hereof, or unless no interest has been paid or duly provided for on the Bonds
(as hereinafter defined), in which case from the Conversion Date (as defined
in the Indenture, as hereinafter defined), until payment of the principal
hereof has been made or duly provided for.
Notwithstanding the foregoing, if this Bond is authenticated after
any date which is the fifteenth calendar day next preceding any Interest
Payment Date (a "Record Date") and before the following Interest Payment
Date, this Bond shall bear interest from such Interest Payment Date;
provided, however, that if the Authority shall default in the payment of
interest due on such Interest Payment Date, then this Bond shall bear
interest from the next preceding Interest Payment Date to which interest has
been paid or duly provided for, or, if no interest has been paid or duly
provided for on the Bonds, from the Conversion Date. The principal of this
Bond is payable in lawful money of the United States of America at the
principal corporate trust office of First Union National Bank, as trustee
(together with its successors in trust, the "Trustee") at ▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇-▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Corporate Trust Department, or at the duly designated office of any successor
Trustee under the Trust Indenture, dated April 30, 1999, between the
Authority and the Trustee (which indenture, as from time to time amended and
supplemented, is hereinafter referred to as the "Indenture"). Payment of
interest on this Bond shall be made on each Interest Payment Date to the
registered Owner hereof as of the applicable Record Date and shall be paid by
check mailed by the Trustee to such registered Owner at his address as it
appears on the registration books of the Authority or at such other address
as is furnished to the Trustee in writing by such registered Owner, or in
such other manner as may be permitted by the Indenture. The Purchase Price
(hereinafter defined) of this Bond shall be payable by First Union National
Bank (together with any successor tender agent, the "Tender Agent") to the
registered Owner hereof, upon presentation hereof, at the delivery office of
the Tender Agent. As used herein, the term "Business Day" means any day other
than a Saturday or Sunday, a legal holiday on which banking institutions in
the State of New York, the Commonwealth of Pennsylvania, the City of New York
or the City of Philadelphia are authorized or required by law to close or a
day on which the New York Stock Exchange is closed.
This Bond and the Bonds of the Series of which it is a part is
comprised of a duly authorized issue of bonds (the "Bonds") of the Authority
designated as "Tax-Exempt Variable Rate Demand/Fixed Rate Revenue Bonds
(Lannett Company, Inc. Project), Series of 1999" (the "Bonds") issued in the
original aggregate principal amount of $3,700,000 under and by virtue of the
Pennsylvania Economic Development Financing Law, as amended and supplemented
(the "Act"), and by virtue of a resolution duly adopted by the Authority (the
"Bond Resolution"), and equally and ratably secured under the Indenture, for
the purpose of financing a project (the "Project") consisting of (i) the
construction of an approximately 40,000 square foot manufacturing and
manufacturing-related facility as an addition to a 33,000 square foot
existing facility located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ (the
"9000 State Road Facility") or, alternatively, the acquisition and renovation
of an existing manufacturing and manufacturing-related facility located at
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ (the "▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ Facility");
(ii) the acquisition of equipment for installation and use in either the ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ Facility or the ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ Facility; and (iii) the payment of
a portion of the costs of issuance of the Bonds. Pursuant to a Loan Agreement
dated as of April 30, 1999 (the "Loan Agreement") by and between the
Authority and Lannett Company, Inc. (the "Borrower"), installment payments
sufficient for the prompt payment when due of the principal and Purchase
Price of, premium, if any, and interest on the Bonds are to be paid to the
Trustee for the account of the Authority and deposited in the Bond Fund
established by the Indenture and have been duly pledged for that purpose, all
to the extent and in the manner provided in the Indenture.
Notwithstanding any provision herein to the contrary, so long as
this Bond is subject to a system of book-entry transfers, any requirement for
the delivery of Bonds to the Tender Agent in connection with an optional or
mandatory tender shall be deemed satisfied upon the transfer, on the
registration books of DTC, of the beneficial ownership interests in the Bonds
tendered for purchase to the account of the Tender Agent, or any participant
in DTC acting on behalf of or at the discretion of such Tender Agent.
The Bonds are all issued under and are equally and ratably secured
by and entitled to the protection of the Indenture, pursuant to which all
payments due from the Borrower to the Authority under the Loan Agreement
(other than certain indemnification payments and the payment of certain
expenses of the Authority) are assigned to the Trustee to secure the payment
of the principal and Purchase Price of and premium, if any, and interest on
the Bonds and certain costs, fees and expenses of the Trustee. The Borrower
has caused to be delivered to the Trustee an irrevocable direct pay letter of
credit (together with any Substitute Letter of Credit, the "Letter of
Credit") issued by First Union National Bank (in such capacity, the "Bank")
and dated the Date of Issuance of the Bonds, which will expire, unless
earlier terminated or extended, on October 31, 2002. Subject to certain
conditions, the Letter of Credit may be replaced by a Substitute Letter of
Credit of another commercial bank, savings and loan association or savings
bank. Under the Letter of Credit, the Trustee will be entitled to draw up to
an amount sufficient to pay (a) the principal of the Bonds and (b) 205 days'
accrued interest on the Bonds (calculated at the interest rate on the Bonds).
Reference is hereby made to the Indenture, the Loan Agreement and
the Letter of Credit for a description of the property pledged and assigned,
the provisions, among others, with respect to the nature and extent of the
security, the rights, duties and obligations of the Authority, the Trustee
and the Owners of the Bonds and the terms upon which the Bonds are issued and
secured; and the Owner of this Bond, by acceptance hereof, hereby consents to
the terms and provisions of all of the foregoing as a material portion of the
consideration for the issuance of this Bond.
THE BONDS ARE SPECIAL LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE
SOLELY AND EXCLUSIVELY FROM THE PAYMENTS REQUIRED TO BE MADE BY THE PROJECT
USER UNDER THE LOAN AGREEMENT AND FROM DRAWS ON THE LETTER OF CREDIT. NO
RECOURSE SHALL BE HAD FOR THE PAYMENT OF PRINCIPAL, PURCHASE PRICE OR
REDEMPTION PRICE OF, OR INTEREST ON, THIS BOND, OR ANY CLAIM BASED HEREON OR
ON THE INDENTURE OR THE LOAN AGREEMENT, AGAINST THE AUTHORITY OR ANY
SUCCESSOR BODY OR AGAINST ANY OFFICER, MEMBER, EMPLOYEE OR AGENT PAST,
PRESENT OR FUTURE OF THE AUTHORITY OR ANY SUCCESSOR BODY, UNDER ANY
CONSTITUTIONAL PROVISION, STATUTE OR RULE OF LAW, OR BY THE ENFORCEMENT OF
ANY ASSESSMENT OR BY ANY LEGAL OR EQUITABLE PROCEEDING OR OTHERWISE, AND ALL
SUCH LIABILITY OF THE AUTHORITY OR ANY SUCCESSOR BODY OR ANY SUCH OFFICERS,
MEMBERS, EMPLOYEES OR AGENTS IS RELEASED AS A CONDITION OF, AND IN
CONSIDERATION FOR, THE ISSUANCE OF THIS BOND. AS A CONDITION OF, AND IN
CONSIDERATION FOR THE ISSUANCE OF THIS BOND, THE REGISTERED OWNER HEREOF
COVENANTS THAT HE WILL NOT SUE THE AUTHORITY OR ITS MEMBERS, OFFICERS,
EMPLOYEES OR AGENTS, PAST, PRESENT OR FUTURE, EXCEPT AS EXPRESSLY PERMITTED
IN THE INDENTURE AND THE LOAN AGREEMENT. THE BONDS AND THE INTEREST THEREON
SHALL NOT BE IN ANY WAY A DEBT OR LIABILITY OF THE COMMONWEALTH OF
PENNSYLVANIA OR ANY POLITICAL SUBDIVISION THEREOF, AND SHALL NOT CREATE OR
CONSTITUTE ANY INDEBTEDNESS, LIABILITY OR OBLIGATION OF THE COMMONWEALTH OF
PENNSYLVANIA OR ANY POLITICAL SUBDIVISION THEREOF, WHETHER LEGAL, MORAL OR
OTHERWISE, AND THE AUTHORITY SHALL NOT INCUR ANY INDEBTEDNESS ON BEHALF OF OR
IN ANY WAY TO OBLIGATE THE COMMONWEALTH OF PENNSYLVANIA OR ANY POLITICAL
SUBDIVISION THEREOF. NEITHER THE MEMBERS OF THE AUTHORITY NOR ANY PERSON
EXECUTING THE BONDS SHALL BE LIABLE PERSONALLY ON THE BONDS BY REASON OF THE
ISSUANCE THEREOF. THE AUTHORITY IS A CONDUIT AUTHORITY AND HAS NO TAXING
POWER.
This Bond is transferable by the registered owner hereof in person
or by his attorney duly authorized in writing, at the principal corporate
trust office of the Trustee or at the Delivery Office of the Tender Agent or
that of any successor Tender Agent, but only in the manner, subject to the
limitations and upon payment of the charges provided in the Indenture, and
upon surrender and cancellation of this Bond. Upon such transfer a new
registered Bond or Bonds of authorized denomination or denominations for the
same aggregate principal amount will be issued to the transferee in exchange
therefor. The Authority, the Tender Agent and the Trustee may deem and treat
the registered Owner hereof as the absolute Owner hereof (whether nor not
this Bond shall be overdue) for all purposes, and neither the Authority, the
Tender Agent nor the Trustee shall be bound by any notice or knowledge to the
contrary.
The Bonds shall be issuable as fully registered Bonds without
coupons in the denomination of $5,000 or any integral multiple thereof.
Extraordinary Redemption
The Bonds are callable for redemption in the event (1) the Project
or any portion thereof is damaged or destroyed or taken in a condemnation
proceeding as provided in Section 6.04 of the Loan Agreement, or (2) the
Borrower shall exercise its option to cause the Bonds to be redeemed as
provided in Section 9.02 of the Loan Agreement. If called for redemption at
any time pursuant to (1) or (2) above, the Bonds shall be subject to
redemption by the Authority on any Interest Payment Date, in whole or in
part, at a redemption price of one hundred percent (100%) of the principal
amount thereof plus accrued interest to the redemption date.
Mandatory Redemption
The Bonds are subject to mandatory redemption, five (5) Business
Days prior to the Letter of Credit Termination Date, in whole, at a
redemption price equal to one hundred percent (100%) of the principal amount
thereof being redeemed plus accrued interest to the redemption date if, on
the thirtieth (30th) Business Day prior to the Letter of Credit Termination
Date, the Trustee shall not have received a Substitute Letter of Credit which
will be effective on or before the Letter of Credit Termination Date.
The Bonds are also subject to mandatory redemption, in whole or in
part, on any Interest Payment Date, at a redemption price equal to one
hundred percent (100%) of the principal amount thereof being redeemed plus
accrued interest to the redemption date, if any proceeds of the sale of the
Bonds remain on deposit in the Project Fund established under the Indenture
upon completion of the Project, under the conditions specified therein.
If less than all the Bonds are to be redeemed, the particular Bonds
or portions thereof to be redeemed shall be selected by the Trustee at random
or in such other manner as the Trustee in its discretion shall deem fair and
appropriate.
The Bonds are also subject to mandatory redemption, in whole, at any
time, within one hundred eighty (180) days after the occurrence of a
Determination of Taxability (as hereinafter defined), at a redemption price
equal to one hundred percent (100%) of the aggregate principal amount of
Bonds Outstanding plus accrued interest to the redemption date.
"Event of Taxability" with respect to any Bond means a change of law
or regulations, or the interpretation thereof, or the occurrence of any other
event of the existence of any other circumstance (including without
limitation the fact that any representations or warranties of the Borrower or
the Authority made in connection with the issuance of any Bond is or was
untrue or that a covenant of the Borrower has been breached) that has the
effect of causing interest payable on any Bond to be includable in gross
income for federal income tax purposes under Section 103 of the Internal
Revenue Code of 1986, as amended, and the applicable regulations thereunder
(the "Code") other than by reason that such interest (i) is includable in the
gross income of an Owner or former Owner of any Bond while such Owner or
former owner is or was a "substantial user" of the Project or a "related
person" to a "substantial user" of the Project (as such terms are used in
Section 147(a)(1) of the Code), or (ii) is deemed an item of tax preference
including, without limitation, an item subject to any alternative minimum
tax.
"Determination of Taxability" with respect to any Bond shall be
deemed to have been made upon the first to occur of the following events:
(i) the date on which the Borrower determines that an Event
of Taxability has occurred by filing with the Trustee a statement to the
effect supported by one or more tax schedules, returns or documents which
disclose that such an Event of Taxability has occurred;
(ii) the date on which the Borrower or the Trustee is
advised by private ruling, technical advice or any other written
communication from any authorized official of the Internal Revenue Service
that, based upon any filings of the Borrower or any other person or entity,
or upon any review or audit of the Borrower or any other person or entity, or
upon any other grounds whatsoever, an Event of Taxability has occurred;
(iii) the date on which the Trustee or the Borrower is
advised that a court of competent jurisdiction has issued an order,
declaration, ruling or judgment to the effect that an Event of Taxability has
occurred;
(iv) the date the Trustee shall have received written
notice from any Owner of the Bonds that such Owner has received a written
assertion or claim by any authorized official of the Internal Revenue Service
that an Event of Taxability has occurred; or
(v) the date the Trustee is notified that the Internal
Revenue Service has issued any private ruling, technical advice or any other
written communication, with or to the effect that an Event of Taxability has
occurred; provided, however, that (a) no Determination of Taxability
described in each of clauses (i) or (v) above shall be deemed to have
occurred unless the Trustee shall have received a written opinion of
nationally recognized bond counsel satisfactory to the Trustee, in form and
substance satisfactory to the Bank and the Borrower and not unsatisfactory to
the Trustee, to the effect that an Event of Taxability has occurred, and (b)
no Determination of Taxability described in each of clauses (i) , (ii) ,
(iii) , (iv) or (v) above shall be deemed to have occurred until 180 days
shall have elapsed from the dates described in clauses (i), (ii), (iii), (iv)
or (v) above without such Determination of Taxability having been rescinded
or cancelled.
Mandatory Sinking Fund Redemption
The Bonds are subject to mandatory redemption on the Interest
Payment Date occurring in the month of May in each of the years set forth
below commencing on the Interest Payment Date occurring in May____ (each, a
"Mandatory Sinking Account Payment Date"), at a redemption price equal to
100% of the principal amount thereof plus accrued interest as follows:
Mandatory Sinking
Year Account Payments
---- ----------------
*Maturity
Optional Redemption
[TO BE PROVIDED]
In the event any of the Bonds or portions thereof are called for
redemption as aforesaid, notice of the call for redemption, identifying the
Bonds or portions thereof to be redeemed and the redemption price (including
the premium, if any), shall be given by the Trustee in accordance with the
Letter of Representations so long as the Bonds are registered in the name of
The Depository Trust Company ("DTC") or its nominee, and if the DTC
book-entry-only system shall be discontinued, notice of the call of
redemption shall be given by mailing a copy of the redemption notice by
first-class mail at least (i) ten (10) days prior to the date fixed for
redemption in the event of a mandatory redemption fifteen (15) days prior to
the Letter of Credit Termination Date; and (ii) thirty (30) days but not more
than sixty (60) days prior to the date fixed for redemption in all other
instances to the Owner of each Bond to be redeemed in whole or in part at the
address shown on the registration books. Any notice mailed as provided above
shall be conclusively presumed to have been duly given, whether or not the
Owner receives the notice. No further interest shall accrue on the principal
of any bond called for redemption after the redemption date if Available
Moneys (as defined in the Indenture) sufficient for such redemption have been
deposited with the Trustee. Notwithstanding the foregoing, the notice
requirements contained in the first sentence of this paragraph may be deemed
satisfied with respect to a transferee of a Bond which has been purchased
pursuant to the Demand Purchase Option under certain circumstances provided
in Section 4.06 of the Indenture, after such ▇▇▇▇ has previously been called
for redemption, notwithstanding the failure to satisfy the notice
requirements of the first sentence of this paragraph with respect to such
transferee.
The Bonds are issued pursuant to and in full compliance with the
Constitution and laws of the Commonwealth of Pennsylvania, particularly the
Act, and by appropriate action duly taken by the Authority authorizing the
execution and delivery of the Loan Agreement and the Indenture. The Bonds
have been issued under the provisions of the Act.
Notwithstanding anything to the contrary contained herein or in the
Indenture, the Loan Agreement or in any other instrument or document executed
by or on behalf of the Authority in connection herewith, no stipulation,
covenant, agreement or obligation contained herein or therein shall be deemed
or construed to be a stipulation, covenant, agreement or obligation of any
present or future member commissioner, director, trustee, officer, employee
or agent of the Authority, or of any successor to the Authority, in any such
person's individual capacity, and no such person, in his individual capacity,
shall be liable personally for any breach or nonobservance of or for any
failure to perform, fulfill or comply with any such stipulations, covenants,
agreements or the principal of or premium, if any, or interest on any of the
Bonds or for any claim based thereon or on any such stipulation, covenant,
agreement or obligation, against any such person, in his individual capacity,
either directly or through the Authority or any successor to the Authority,
under any rule of law or equity, statute or constitution or by the
(enforcement of any assessment or penalty or otherwise, and all such
liability of any such person, in his individual capacity, is hereby expressly
waived and released.
The Owner of this Bond shall have no right to enforce the provisions
of the Indenture or to institute action to enforce the covenants therein, or
to take any action with respect to any default under the Indenture, or to
institute, appear in or defend any suit or other proceedings with respect
thereto, unless certain circumstances described in the Indenture shall have
occurred. In certain events, on the conditions in the manner and with the
effect set forth in the Indenture, the principal of all the Bonds issued
under the Indenture and then outstanding may become or may be declared due
and payable before the stated maturity thereof, together with interest
accrued thereon.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modifications of the rights and obligations of
the Authority and the rights of the owners of the Bonds at any time by the
Authority with the consent of the Bank and the holders of all Bonds at the
time outstanding. Any such consent or any waiver by the Bank and the holders
of all Bonds at the time outstanding shall be conclusive and binding upon the
Owner and upon all future Owners of this Bond and of any Bond issued in
replacement hereof whether or not notation of such consent or waiver is made
upon this Bond. The Indenture also contains provisions which, subject to
certain conditions, permit or require the Trustee to waive certain past
defaults under the Indenture and their consequences.
It is hereby certified, recited and declared that all acts,
conditions and things required to exist, happen and be performed precedent to
and in connection with the execution and delivery of the Indenture and the
issuance of this Bond do exist, have happened and have been performed in due
time, form and manner as required by law; and that the issuance of this Bond
and the issue of which it forms a part, together with all other obligations
of the Authority, does not exceed or violate any constitutional or statutory
limitation.
This Bond shall not be valid or become obligatory for any purpose or
be entitled to any security or benefit under the Indenture until the
certificate of authentication hereon shall have been signed by the Trustee or
the Tender Agent, as authenticating agent.
IN WITNESS WHEREOF, the Philadelphia Authority for Industrial
Development has caused this Bond to be signed in its name and on its behalf
by the manual or facsimile signature of its Chairman and its corporate seal
to be affixed, imprinted or reproduced hereon and attested by the manual or
facsimile signature of its Secretary or Assistant Secretary all as of the
Date of Issuance.
ATTEST: PHILADELPHIA AUTHORITY FOR
INDUSTRIAL DEVELOPMENT
____________________________ By:__________________________________
(Assistant) Secretary Chairman
(SEAL)
(Form of Certificate of Authentication)
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds of the issue described in the
within-mentioned Trust Indenture.
FIRST UNION NATIONAL BANK,
as Trustee and Tender Agent
By:_________________________
Authorized Signature
Date of Authentication: ____________________
(Form of Transfer)
FOR VALUE RECEIVED, ________________ the undersigned, hereby sells,
assigns and transfers unto _____________________ (Tax Identification or
Social Security No.______________) the within Bond and all rights thereunder,
and hereby irrevocably constitutes and appoints _______________ attorney to
transfer the within Bond on the books kept for registration thereof, with
full power of substitution in the premises.
Dated: ___________________________ ___________________________
NOTICE: Signature must be guaranteed by an approved eligible guarantor
institution, an institution which is a participant in a Securities Transfer
Association recognized signature guarantee program.
NOTICE: The Signature to this assignment must correspond with the name as it
appears upon the face of the within Bond in every particular, without
alteration or enlargement or any change whatever.
[FORM OF BOND COUNSEL OPINION]
ACKNOWLEDGMENT
COMMONWEALTH OF PENNSYLVANIA :
: SS
COUNTY OF PHILADELPHIA :
On this, the ___ day of April, 1999 before me, the undersigned
notary public, personally appeared ▇▇▇▇▇ ▇▇▇▇▇▇▇, who acknowledged himself to
be the Chairman of the Philadelphia Authority for Industrial Development, and
that he as such officer, being authorized to do so, executed the foregoing
instrument for the purposes therein contained by signing the name of said
Authority by himself as such officer.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
-------------------------
Notary
My Commission Expires:
ACKNOWLEDGMENT
COMMONWEALTH OF PENNSYLVANIA :
: SS
COUNTY OF PHILADELPHIA :
On this, the ___ day of April, 1999 before me, the undersigned
notary public, personally appeared _________________ who acknowledged
himself/herself to be a __________________ of FIRST UNION NATIONAL BANK and
that he/she as such officer, being authorized to do so, executed the
foregoing instrument for the purposes therein contained by signing the name
of said Bank by himself/herself as such officer.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
-------------------------
Notary
My Commission Expires:
PLEDGE AND SECURITY AGREEMENT
(Unremarketed Bonds)
THIS PLEDGE AND SECURITY AGREEMENT ("Agreement") is made the
30th day of April, 1999, by Lannett Company, Inc., a Delaware corporation
(the "Pledgor") in favor of FIRST UNION NATIONAL BANK, a national banking
association (the "Bank").
WHEREAS, the Philadelphia Authority for Industrial Development
(the "Authority") has agreed with the Pledgor is issue its $3,700,000
aggregate principal amount Tax-Exempt Variable Rate Demand/Fixed Rate Revenue
Bonds (Lannett Company, Inc. Project), Series of 1999 (the "Bonds"), under a
Trust Indenture, dated April 30, 1999 (the "Indenture"), by and between the
Authority and First Union National Bank, as trustee (the "Trustee"); and
WHEREAS, ▇▇▇▇▇▇▇ and the Bank have entered into a Reimbursement
Agreement, dated April 30, 1999 (the "Reimbursement Agreement"), pursuant to
which the Bank has agreed, subject to the conditions precedent provided in
the Reimbursement Agreement, to issue an irrevocable direct pay letter of
credit by Bank in favor of the Trustee (the "Letter of Credit").
NOW, THEREFORE, the parties, intending to be legally bound,
agree as follows:
1. Defined Terms. As used in this Agreement, the terms defined
in the preambles to this Agreement shall have such meanings and the following
terms have the following meanings (all such meanings to be equally applicable
to both the singular and plural forms of the terms defined, all capitalized
terms not defined herein shall have the meanings ascribed to such terms in
the Reimbursement Agreement):
"Collateral" means all property at any time pledged to
the Bank under this Agreement (whether described in this Agreement or not)
and all income therefrom and proceeds thereof.
"Event of Default" has the meaning given to such term in
the Reimbursement Agreement.
"Pledged Bonds" has the meaning given to such term in
Section 3 hereof.
"Pledged Bonds Custodian" means First Union National
Bank (or such other successor thereto or substitute therefor) in its capacity
as collateral agent for the Bank.
"Remarketing Agent" has the meaning given to such term
in the Indenture.
"Tender Agent" has the meaning given to such term in the
Indenture.
"Unremarketed Bonds" has the meaning given to such term
in the Indenture.
2. Interpretation. (a) Unless the context otherwise indicates,
words expressed in the singular shall include the plural and vice versa and
the use of the neuter, masculine or feminine gender is for convenience only
and shall be deemed to mean and include the neuter, masculine or feminine
gender, as appropriate.
(b) Headings of articles and sections herein are solely
for convenience of reference, do not constitute a part hereof and shall not
affect the meaning, construction or effect hereof.
(c) All references herein to "Articles," "Sections,"
"Paragraphs" and other subdivisions are to the corresponding Articles,
Sections, Paragraphs or subdivisions of this Agreement; the words "herein,"
"hereof," "hereunder" and other words of similar import refer to this
Agreement as a whole and not to any particular Article, Section, Paragraph or
subdivision hereof.
3. Pledge. The Pledgor hereby pledges, assigns, hypothecates
and transfers to the Bank all of the Pledgor's right, title and interest to
the Unremarketed Bonds delivered from time to time to the Tender Agent by the
owners thereof and grants to the Bank a first lien on, and security interest
in, all of its right, title and interest in and to the Unremarketed Bonds,
the interest thereon, and all proceeds thereof, as collateral security for
the prompt and complete payment by the Pledgor (by acceleration, at stated
maturity, or otherwise) of all amounts payable from time to time by the
Pledgor to the Bank in respect of the Indebtedness. Unless all amounts drawn
under the Letter of Credit with respect to the payment of the Purchase Price
of the Bonds pursuant to mandatory and optional tenders of the Bonds are
reimbursed to the Bank on the same day as such Drawings, the Pledgor shall,
no later than 5:00 p.m. (Philadelphia time) on the same day, (a) deliver or
use its best efforts to cause to be delivered to the Pledged Bonds Custodian,
Unremarketed Bonds in a principal amount equal to the unreimbursed portion of
such drawing (such Unremarketed Bonds so delivered to and held by the Pledged
Bonds Custodian from time to time to be referred to as the "Pledged Bonds")
and (b) give or use its best efforts to cause to be given to the Bank notice
of the number and principal amount of each such Pledged Bond.
4. Registration of and Interest on Pledged Bonds. If the Bonds
are in certificated form, Pledged Bonds shall be registered in the name of
the Pledged Bonds Custodian and shall be duly endorsed for transfer by the
Pledged Bonds Custodian in blank or by appropriate instruments of transfer
duly executed in blank. The Bank may, but shall not be obligated to, request
that Pledged Bonds be registered in its name at any time or from time to
time. Any interest on Pledged Bonds shall be paid to or upon the order of the
Bank and shall be applied as a credit against the Indebtedness with respect
to the related Principal and Interest Drawings under the Letter of Credit in
accordance with the terms of the Reimbursement Agreement. The Pledged Bonds
Custodian shall follow the written direction of the Bank ensuring the release
or transfer of the Pledged Bonds.
5. Release of Pledged Bonds. Upon payment to the Bank of the
proceeds of remarketed Pledged Bonds in an amount sufficient to cover the
principal of and accrued interest, if any, on the Unremarketed Bonds, the
Bank shall (i) reinstate the Letter of Credit to an amount equal to the
principal amount of such Bonds together with an amount equal to forty-six
(46) days interest thereon calculated at an interest rate (based on a 365 or
366 day year, as applicable, for the actual number of days elapsed) of
fifteen percent (15%) to pay interest on the Bonds; (ii) notify the Trustee
of the amount of such reinstatement; and (iii) release or instruct the
Pledged Bonds Custodian to release Pledged Bonds in a principal amount equal
to the principal amount of such payment to the Bank from the pledge and
security interest created by this Agreement. Such Pledged Bonds shall be
delivered to or upon the order of the Tender Agent only after payment to the
Bank as aforesaid.
6. Redemption of Pledged Bonds. In the event any Pledged Bond
is called for redemption under the Indenture, Pledgor shall use its best
efforts to cause the Trustee to take all such actions as shall be required
under the Indenture to effect the redemption and shall pay or cause to be
paid the redemption price to or to the order of the Bank as a credit against
the Indebtedness.
7. Rights of the Bank. The Bank shall not be liable, except in
the case of its willful misconduct or gross negligence, for failure to
collect or realize upon the Indebtedness or the Collateral or any part
thereof, or for any delay in so doing, nor shall the Bank be under any
obligation to take any action whatsoever with regard thereto. If an Event of
Default has occurred and its continuing, the Bank, with or without notice,
shall have the right to exercise all rights, privileges or options pertaining
to any Pledged Bonds, as if it were the absolute owner thereof, upon such
terms and conditions as it may, in its sole discretion determine, all without
liability except to account to the Pledgor for property actually received by
it. The Bank shall have no duty to exercise any of the aforesaid rights,
privileges or options and shall not be responsible for any failure to do so
or delay in so doing.
8. Remedies. In the event that any portion of the Indebtedness
has been declared due and payable (upon scheduled maturity, acceleration or
otherwise), the Bank, without demand for performance or other demand,
advertisement or notice of any kind (except the notice specified below of
time and place of public or private sale) to the Pledgor or any other person
(all and each of which demands, advertisements and/or notices are expressly
waived by the Pledgor), may forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
assign, give an option or options to purchase, contract to sell, or otherwise
dispose of and deliver the Collateral, or any part thereof, in one or more
parcels or portions at public or private sale or sales, at any exchange,
broker's board or at any of the Bank's offices or elsewhere upon such terms
and conditions as it may, in its sole discretion, deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery
without assumption of any credit risk, with the right to the Bank, upon any
such sale or sales, public or private, to purchase the whole or any part of
the Collateral so sold, free to any right or equity of redemption in the
Pledgor, which right or equity is hereby expressly waived or released by
Pledgor. The net proceeds or any such collection, recovery, receipts,
appropriation, realization or sale, after deducting all reasonable costs and
expenses of every kind incurred therein or incidental to the care,
safekeeping, or otherwise of any and all of the Collateral or in any way
relating to the rights of the Bank under this Agreement, including, but not
limited to, reasonable attorneys' fees and legal expenses, shall be applied
first to the satisfaction of the Indebtedness in such order as the Bank may
elect, the Pledgor remaining liable for any deficiency remaining unpaid after
such application, and only after so paying over such net proceeds and after
the payment by the Bank of any other amount required by any provision of law,
including, without limitation, Section 9-504 (1)(c) of the Uniform Commercial
Code, need the Bank account for the surplus, if any, to the Pledgor. The
Pledgor agrees that the Bank need not give more than five (5) days' notice of
the time and place of any public sale or of the time after which a private
sale or other intended disposition is to take place and that such notice is
reasonable notification of such matters. In addition to the rights and
remedies granted to it in this Agreement and in any other instrument or
agreement securing, evidencing or relating to any of the Indebtedness, the
Bank shall have the authority to exercise all the rights and remedies of a
secured party under the Uniform Commercial Code. Notwithstanding anything
contained herein to the contrary, the Bank may not sell, assign, give an
option or options to purchase, contract to sell or otherwise dispose of and
deliver the Collateral unless it shall reinstate the Letter of Credit in full
as to principal and interest with respect to such Bonds, except this shall
not apply in the case of a conversion of the Bonds to a Fixed Rate in
accordance with the terms of the Indenture.
9. Representations, Warranties and Covenants of the Pledgor.
The Pledgor represents and warrants that: (a) on the date of delivery to the
Bank or the Pledged Bonds Custodian of any Pledged Bonds, none of the
Remarketing Agent, the Tender Agent, the Trustee nor any other person, firm
or corporation (other than the Pledgor or the Bank or the Pledged Bonds
Custodian) will have any right, title or interest in and to the Pledged
Bonds; (b) it has, and on the date of delivery to the Bank or the Pledged
Bonds Custodian of any Pledged Bonds will have, full power, authority and
legal right to pledge all of its right, title and interest in and to the
Pledged Bonds pursuant to this Agreement; (c) the Pledged Bonds and the
proceeds thereof, are not subject to any pledge, lien, mortgage,
hypothecation, security interest, charge, option or encumbrance or to any
agreement purporting to grant to any third party a security interest in the
property or assets of the Pledgor which would include the Pledged Bonds. The
Pledgor covenants and agrees that it will defend the Bank's and the Pledged
▇▇▇▇▇ Custodian's right, title and security interest in and to the Pledged
Bonds and the proceeds thereof against the claims and demands of all persons
at the Pledgor's sole cost and expense.
10. No Disposition, etc. Except as contemplated in this
Agreement, without the prior written consent of the Bank, the Pledgor agrees
that it will not sell, assign, transfer, exchange or otherwise dispose of, or
grant any option with respect to, the Collateral, nor will it create, incur
or permit to exist any pledge, lien, mortgage, hypothecation, security
interest, charge, option or any other encumbrance with respect to any of the
Collateral, or any interest therein, or any proceeds thereof, except for the
lien and security interest provided for by this Agreement.
11. Sale of Collateral. (a) The Pledgor recognizes that the
Bank may be unable to effect a public sale of any or all of the Pledged Bonds
by reason of certain prohibitions contained in the Securities Act of 1933, as
amended (the "Securities Act"), and applicable state securities laws, but may
be compelled to resort to one or more private sales thereof to a restricted
group or purchasers who may be obliged to agree, among other things, to
acquire such securities for their own account for investment and not with a
view to the distribution or resale thereof. The Pledgor acknowledges and
agrees that any such private sale may result in prices and other terms less
favorable to the seller than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall
be deemed to have been made in a commercially reasonable manner. The Bank
shall be under no obligation to delay a sale of any of the Pledged Bonds for
the period of time necessary to permit the Pledgor to register such
securities for public sale under the Securities Act, or under applicable
state securities law, even if the Pledgor would agree to do so.
(b) The Pledgor further agrees to promptly do or cause
to be done all such other reasonable acts and things as may be necessary to
make any sale or sales of any portion or all of the Pledged Bonds valid and
binding and in compliance with any and all applicable laws, regulations,
orders, writs, injunctions, decrees or awards of any and all courts,
arbitrators or governmental instrumentalities, domestic or foreign, having
jurisdiction over any such sale or sales, all at the Pledgor's cost and
expense.
12. Further Assurances. The Pledgor agrees that at any time and
from time to time upon the written request of the Bank or the Pledged Bonds
Custodian, the Pledgor will execute and deliver such further documents and do
such further acts and things as the Bank or the Pledged Bonds Custodian may
reasonably request in order to effect the purposes of this Agreement.
13. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provision of this
Agreement, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.
14. No Waiver; Cumulative Remedies. No act, delay or omission
of the Bank or the Pledged Bonds Custodian shall be deemed to be a waiver of
any rights or remedies granted under this Agreement and no waiver shall be
valid unless in writing, signed by the Bank, and then only to the extent set
forth in such waiver. A waiver of any right or remedy under this Agreement on
any one occasion shall not be construed as a bar to any right or remedy which
the Bank would otherwise have on any future occasion. No failure to exercise
and no delay in exercising on the part of the Bank or the Pledged Bonds
Custodian any right, power or privilege under this Agreement shall operate as
a waiver thereof; nor shall any single or partial exercise of any right,
power or privilege under this Agreement preclude any other right, power or
privilege. The rights and remedies provided in this Agreement are cumulative
and may be exercised singly or concurrently, and are not exclusive of any
rights or remedies provided by law or equity.
15. Waivers, Amendments. None of the terms or provisions of
this Agreement may be waived, altered, modified or amended except by an
instrument in writing, duly executed by the Pledgor and the Bank and if such
amendment affects the rights or duties of the Pledged Bonds Custodian, with
the written consent of the Pledged Bonds Custodian. This Agreement and all
obligations of the Pledgor under this Agreement shall be binding upon the
successors and assigns of the Pledgor, and shall, together with the rights
and remedies of the Bank or the Pledged Bonds Custodian under this Agreement,
inure to the benefit of the Bank and its successors and assigns.
16. Fees and Expenses of the Pledged Bonds Custodian. The
Pledgor agrees that it will pay or reimburse the Bank for (i) all fees
charged and expenses incurred by the Pledged Bonds Custodian for and in
connection with its acting as such for the purposes of this Agreement and
(ii) all costs and other expenses incurred by the Bank or the Pledged Bonds
Custodian in connection with the transfer, registration or exchange of the
Pledged Bonds.
17. Governing Law. This Agreement shall be governed by and be
construed and interpreted in accordance with the laws of the Commonwealth of
Pennsylvania.
18. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be a original and all of which shall
constitute but one and the same instrument.
IN WITNESS WHEREOF, the Pledgor and the Bank have caused this
Agreement to be duly executed and delivered by their duly authorized officers
as of the day and year first above written.
ATTEST: LANNETT COMPANY, INC.
_____________________ By:____________________________
(Assistant) Secretary Name:
Title:
FIRST UNION NATIONAL BANK
By:____________________________
Vice President
April 30, 1999
First Union National Bank
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We refer to the Pledge and Security Agreement dated April 30,
1999 (the "Agreement"), between Lannett Company, Inc. (the "Pledgor") and
you. All terms used in this letter and not otherwise defined shall have the
meanings given to such terms in the Agreement.
We accept our appointment as Pledged Bonds Custodian under the
Agreement and undertake to hold any Pledged Bonds which the Pledgor shall
deliver or cause to be delivered to us in such capacity as your collateral
agent until otherwise directed in writing by you and to otherwise perform the
duties of the Pledged Bonds Custodian under the Agreement.
The Pledgor by its signature to this letter agrees, jointly and
severally, to indemnify and hold us and our directors, officers, agents and
employees (collectively, the "Indemnitees") harmless from and against any and
all claims, liabilities, losses, damages, fines, penalties and expenses,
including out-of-pocket, incidental expenses, legal fees and expenses and the
allocated costs and expenses of in-house counsel and legal staff ("Losses")
that may be imposed on, incurred by or asserted against the Indemnitees or
any of them for following any instruction or other direction upon which we
are authorized to rely pursuant to the terms of the Agreement. In addition to
and not in limitation of the immediately preceding sentence, the ▇▇▇▇▇▇▇ also
agrees jointly and severally to indemnify and hold the Indemnitees and each
of them harmless from and against any and all Losses that may be imposed on,
incurred by or asserted against, the Indemnitees or any of them in connection
with or arising out of our performance under the Agreement, provided we have
not acted with gross negligence or engaged in willful misconduct. Anything in
the Agreement to the contrary notwithstanding, in no event shall we be liable
for special, indirect or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if we have been advised of
such loss or damage and regardless of the form of action.
The provisions of this paragraph shall survive the termination of
the Agreement and our resignation or removal for any reason.
Very truly yours,
FIRST UNION NATIONAL BANK
By: __________________________
Vice President
ACKNOWLEDGED AND AGREED:
LANNETT COMPANY, INC.
By: __________________________
Chairman
REMARKETING AGREEMENT
$3,700,000
Philadelphia Authority for Industrial Development
Tax-Exempt Variable Rate Demand/Fixed Rate Revenue Bonds
(Lannett Company, Inc. Project)
Series of 1999
This REMARKETING AGREEMENT ("Agreement") is made and entered into
April 30, 1999, by and between FIRST UNION CAPITAL MARKETS CORP.
("Remarketing Agent") and LANNETT COMPANY, INC., a Delaware corporation (the
"Borrower") and shall be effective if, as and when the $3,700,000
Philadelphia Authority for Industrial Development Tax-Exempt Variable Rate
Demand/Fixed Rate Revenue Bonds (Lannett Company, Inc. Project), Series of
1999 (the "Bonds") are issued by the Philadelphia Authority for Industrial
Development (the "Authority"). This Agreement shall be upon the following
terms and conditions, to wit:
In the event there is any conflict between provisions of this
Agreement and the Indenture (hereinafter defined), the provisions of the
Indenture shall be controlling.
1. Consideration. The consideration for this Agreement is comprised
of the mutual covenants and agreements herein contained, together with other
good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged. Further, the parties hereto have entered into this
Agreement each intending to be legally bound hereby.
2. Bonds. The Bonds are being issued pursuant to a Trust Indenture,
of even date herewith (the "Indenture"), between the Authority and First
Union National Bank, as trustee (the "Trustee"), which Indenture calls for
and requires the services of a Remarketing Agent with regard to certain
determinations and actions to effect remarketings of the Bonds as more
specifically set forth in the Indenture to which further reference is hereby
made. Unless the context otherwise clearly requires, all initially
capitalized terms and phrases used herein and not otherwise defined herein
shall have the meanings given to such terms and phrases in the Indenture.
3. Establishment of the Floating Rate and the Fixed Rate. (a) The
Remarketing Agent agrees to establish the Floating Rate in accordance with
the provisions of the Indenture and the Bonds from and including the period
during which the Bonds are initially issued through the earlier of (i) the
Conversion Date or (ii) the date on which the Bonds mature, are fully
redeemed, are accelerated or otherwise cease to be outstanding, as the case
may be. The Remarketing Agent shall determine the Floating Rate in accordance
with the applicable provisions of this Agreement and the Indenture.
(b) The Remarketing Agent shall determine the Fixed Rate in
accordance with the applicable provisions of this Agreement and the
Indenture.
(c) In the event that the Remarketing Agent fails to
establish the Floating Rate in accordance with the provisions of this
Agreement and the Indenture, the Floating Rate to be borne by the Bonds for
the next succeeding Weekly Period shall be determined as provided in the
Indenture.
4. Payment of Bonds. Payments of amounts due on the Bonds from time
to time as provided in the Indenture shall be made as provided in the
Indenture by the Trustee or the Tender Agent on behalf of the Authority from
amounts on deposit in the Bond Fund, from remarketing proceeds, and certain
other security including but not limited to an irrevocable, direct pay letter
of credit (the "Letter of Credit") issued by First Union National Bank (the
"Bank"). In no event shall the Remarketing Agent be in any manner or to any
extent liable for the payment of any amounts due on the Bonds, either as to
principal, interest, premium (if any), purchase price or otherwise, except as
herein expressly provided.
5. Tenders. On each date on which tenders of Bonds are required
under Sections 5.01, 5.03 or 5.04 of the Indenture ("Tender Dates"), Owners
of the Bonds will be required to tender such Bonds to First Union National
Bank, as tender agent, or any successor tender agent appointed under the
Indenture (the "Tender Agent") for purchase in accordance with the Indenture.
The Purchase Price for any such tendered Bonds will be derived from moneys in
the manner set forth in Section 5.05 of the Indenture.
6. Appointment and Acceptance. The Borrower desires that the
Remarketing Agent undertake to remarket any Bond in respect of which a notice
pursuant to Sections 5.01, 5.03 or 5.04 of the Indenture has been delivered,
such remarketings to be made pursuant to the provisions of the Indenture and
this Agreement. The Borrower hereby appoints, subject to the terms and
conditions herein contained, First Union Capital Markets Corp.
as Remarketing Agent for the Bonds.
The Remarketing Agent, subject to the terms and conditions
herein contained, accepts such appointment and the duties and obligations
imposed by the Indenture and this Agreement.
7. Standard of Care. In performing its duties and obligations
hereunder, the Remarketing Agent shall use the same degree of care and skill
as a prudent person would exercise under the same circumstances in the
conduct of his own affairs. The Remarketing Agent shall not be liable in
connection with the performance of its duties hereunder except for its own
willful misconduct, gross negligence or bad faith.
8. Dealing in Bonds. The Remarketing Agent may deal in the Bonds to
the same extent and with the same effect as provided in the Indenture with
respect to the Trustee.
9. Remarketing Agent as Bondholder. The Remarketing Agent, for its
own account, may in good faith buy, sell, own, hold and deal in any of the
Bonds, and may join in any action which any Bondholder may be entitled to
take with like effect as if it were not the Remarketing Agent. The
Remarketing Agent, in its individual capacity, either as principal or agent,
may also engage in or be interested in any financial or other transaction
with the Authority, and may act as depositary, trustee or agent for any
committee or body of holders of Bonds secured by the Indenture or other
obligations of the Authority as freely as if it were not the Remarketing
Agent. The Remarketing Agent shall have the right to tender Bonds for
purchase pursuant to the provisions of the Indenture and shall have all other
rights of a Bondholder at any time that it is the Owner of any Bonds.
10. Cooperation as to Registration. The Borrower will cooperate in
taking all steps reasonably requested by the Remarketing Agent which the
Remarketing Agent or its counsel may consider necessary or desirable: (a) to
register the sale of the Bonds by the Remarketing Agent under any federal or
state securities law or to qualify the Indenture under the Trust Indenture
Act of 1939, as amended; or (b) to enable the Remarketing Agent to establish
a "due diligence" defense to any action commenced against the Remarketing
Agent in respect of any disclosure documents.
11. Timely Determinations. So long as this Agreement remains in
effect, the Remarketing Agent agrees that it will (i) be available to advise
the Borrower and the Authority on a timely basis with respect to the
applicable Floating Rate and (ii) perform its duties under the Indenture and
this Agreement. In addition, the Remarketing Agent will furnish the Trustee,
the Tender Agent, the Authority and the Borrower and other parties required
to have such information under the Indenture, such information as they may
from time to time reasonably request with respect to the purchasers of the
Bonds and the prices at which the Bonds are sold.
12. Waiver of Lien. The Remarketing Agent hereby waives any rights
to, or lien on, any funds or obligations held by or owing to it pursuant
hereto or to the Indenture. The Remarketing Agent shall be reimbursed its
costs and expenses and compensated for acting as Remarketing Agent hereunder
and pursuant to the Indenture from payments to be made by the Borrower
pursuant to the applicable provisions of this Agreement and the Indenture.
13. Performance. (a) The Remarketing Agent shall, in accordance with
the applicable terms of the Indenture and this Agreement, use its best
efforts to sell all Bonds on the applicable Purchase Date at the applicable
Purchase Price for which it receives a timely tender notice at its principal
corporate office from any Bondholder. The Remarketing Agent, in accordance
with the applicable terms of the Indenture and this Agreement, shall also use
its best efforts for a period not in excess of thirty (30) days beginning on
each Tender Date to sell all Pledged Bonds.
(b) The Remarketing Agent shall not offer for sale or sell
any Bonds upon the occurrence and continuation of any Event of Default as
defined in the Indenture.
(c) By not later than 10:00 a.m., New York City time, on
the Purchase Date, the Remarketing Agent shall give telephonic notice,
promptly confirmed in writing, to the Trustee and the Tender Agent,
specifying:
(i) the total principal amount of the Bonds, if
any, remarketed by it; and
(ii) the names of the persons to whom such Bonds
were sold and are to be registered, each such person's address and social
security number or taxpayer identification number, the denominations in which
replacement Bonds are to be prepared, and any other appropriate registration
and transfer instructions.
(d) Not later than 10:00 a.m., New York City time, on each
Purchase Date, the Remarketing Agent shall transfer the proceeds of the
remarketing of the Bonds to the Tender Agent for deposit in the Remarketing
Account established with respect to such Bonds and, if there are not
sufficient remarketing proceeds on deposit in the Remarketing Account, the
Remarketing Agent shall give telephonic notice (promptly confirmed by
telecopy) to the Tender Agent, the Trustee, the Borrower and the Bank (if the
Letter of Credit securing the Bonds is then in effect) of (i) the aggregate
amount of Bonds tendered or deemed tendered for purchase; and (ii) the amount
of proceeds on deposit in the Remarketing Account established with respect to
such Bonds.
(e) The Remarketing Agent shall determine the rate or rates
to be borne by the Bonds pursuant to, at the times specified in, and in the
manner provided in Articles II and V of the Indenture.
14. Representations and Warranties. Each of the parties hereto
represents and warrants to the other that this Agreement has been duly
authorized, executed and delivered by such party and (assuming due
authorization, execution and delivery by the other party hereto), constitutes
a legal, valid and binding obligation of such party. The Remarketing Agent
hereby further represents and warrants that it is a member of the National
Association of Securities Dealers, Inc., has a capitalization of at least
$15,000,000 and is authorized by law to perform all the duties imposed upon
it by this Agreement and by the Indenture. The principal corporate office of
the Remarketing Agent for purpose of the Indenture is as set forth below in
Section 17.
15. Remarketing Fees. In consideration of the services to be
provided by the Remarketing Agent hereunder, the Borrower agrees to pay to
the Remarketing Agent all costs, fees and expenses in connection with each
remarketing in accordance with Schedule A which is attached hereto and
incorporated herein by reference.
16. Termination. This Agreement and the obligations of the
Remarketing Agent hereunder shall, in the absence of earlier termination
pursuant to the provisions hereof, terminate on the earlier of (a) the date
all of the Bonds to be remarketed after the Conversion Date have been
remarketed and (b) the final maturity of the Bonds. Notwithstanding the
foregoing, the Remarketing Agent may at any time resign and be discharged of
the duties and obligations created by this Agreement and the Indenture by
giving at least thirty (30) days' notice to the Authority, the Bank, the
Borrower, the Trustee and the Tender Agent. The Remarketing Agent may be
removed by the Borrower at any time for any reason or no reason upon thirty
(30) days' written notice. No such resignation or removal shall be effective
unless and until a successor Remarketing Agent is appointed by the Borrower
and accepts such appointment. Upon receipt of notice from the Remarketing
Agent or upon delivery of notice to the Remarketing Agent, the Borrower
agrees to use its best efforts to appoint a successor Remarketing Agent.
In the event of the resignation or removal of the
Remarketing Agent, the Remarketing Agent shall pay over, assign and deliver
any moneys and Bonds held by it in such capacity to its successor or, if
there be no successor, to the Authority or its assigns. Termination of this
Agreement pursuant to any of the provisions of this Section shall not
terminate liability for any fees due hereunder and not yet paid.
17. Notices. Except as otherwise required in Section 13 hereof, any
notice required or permitted to be given under this Agreement may be given in
person or by mail or telecopier and shall be deemed received, if mailed,
three (3) business days after being deposited in the United States mail,
postage prepaid, or, if by telecopier, when received at the appropriate
office for transmission, in all cases addressed to the Authority, the Bank,
the Borrower, the Trustee, the Tender Agent and the Remarketing Agent, as
follows:
The Authority:
Philadelphia Authority for Industrial Development
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chairman
The Bank:
First Union National Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇, Vice President
The Borrower:
Lannett Company, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Vice President - Finance
with a copy to:
▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ,O'Brien & ▇▇▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esquire
The Trustee:
First Union National Bank
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ - ▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Corporate Trust Department
The Tender Agent:
First Union National Bank
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ - ▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Corporate Trust Department
The Remarketing Agent:
First Union Capital Markets Corp.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Vice President
Each party hereto may change the address for service of notice upon
it by a notice in writing and in the manner provided herein to the other
parties hereto.
18. Telephonic Requests or Directions. The Remarketing Agent may
rely upon, and is hereby authorized to honor, any telephonic request or
directions which the Remarketing Agent believes, in its sole discretion, to
emanate from an authorized representative of the Authority, the Borrower, the
Trustee or the Tender Agent acting pursuant hereto, regardless of the source
of such request or direction. Any telephonic request or direction to the
Remarketing Agent shall promptly be confirmed in writing; provided, however,
that failure to receive any such written confirmation shall not affect the
authority of the Remarketing Agent to rely and act upon such request or
direction.
19. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and assigns
and the officers and directors and controlling persons thereof, and no other
person(s) will have any rights or obligations hereunder.
20. Severability. If any provision of this Agreement for any reason
shall be held or deemed to be or shall, in fact, be invalid, inoperative or
unenforceable as applied in any particular case in any jurisdiction or all
jurisdictions, such circumstances shall not have the effect of rendering the
provision in question invalid, inoperative or unenforceable in any other case
or circumstance, or of rendering any other provision or provisions of this
Agreement invalid, inoperative or unenforceable to any extent whatever. In
case any one or more of the provisions in this Agreement shall be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any
way be affected or impaired thereby.
21. Amendment. This Agreement may be amended by the parties hereto
without the consent of or notice to any Owners of the Bonds.
22. Counterparts. This 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.
23. Captions. Captions to the sections hereof are inserted for
convenience of reference only and shall not be relied upon for any
interpretive purpose whatsoever.
24. Disclosure. The Borrower hereby covenants and agrees to
immediately advise the Remarketing Agent of any event or circumstance that
would materially and adversely affect the financial condition of the Borrower
or its ability to perform its obligations under the Loan Agreement or the
Reimbursement Agreement, and to cooperate with the Remarketing Agent and/or
its counsel in the preparation of such disclosure material deemed necessary
by the Remarketing Agent in connection therewith. The Borrower also hereby
covenants to cooperate with the Remarketing Agent and/or its counsel and to
provide updated disclosure materials to the Remarketing Agent to be delivered
to Owners of Bonds in connection with any remarketing of the Bonds in order
to comply with state and federal laws, regulations and rules, including
without limitation, Securities and Exchange Commission Exchange Act Rule
15c2-12. The Borrower further agrees to pay all costs and fees associated
with the preparation of such disclosure materials.
25. Governing Law. This Agreement shall be governed by, and
interpreted in accordance with, the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties hereto have caused this Remarketing
Agreement to be executed as of the date first above written.
ATTEST: LANNETT COMPANY, INC.
______________________ By:___________________________
Authorized Officer ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Chairman
:
FIRST UNION CAPITAL MARKETS CORP.
By:___________________________
Director and Vice President
SCHEDULE A
Fees for Remarketing Bonds
Prior to any remarketing in connection with a Conversion Date, the
remarketing fee payable by the Borrower to the Remarketing Agent shall be an
amount equal to 0.125% per annum of the outstanding principal amount of
Bonds, payable annually in advance; provided, however, the Borrower and the
Remarketing Agent agree that such fee shall be adjusted upwards, from time to
time, in the event that the applicable prevailing fees for such services in
the marketplace increase.
Remarketing fees in connection with a remarketing for a conversion
to Fixed Rate shall be subject to good faith negotiations prior to such
remarketing.
In addition, the Remarketing Agent shall be reimbursed for all its
costs and expenses in preparing any disclosure material required for any
remarketings, including but not limited to, legal costs.
BOND PLACEMENT AGREEMENT
$3,700,000
Philadelphia Authority for Industrial Development
Tax-Exempt Variable Rate Demand/Fixed Rate Revenue Bonds
(Lannett Company, Inc. Project)
Series of 1999
BOND PLACEMENT AGREEMENT ("Placement Agreement"), dated April
30, 1999, by and between the PHILADELPHIA AUTHORITY FOR INDUSTRIAL
DEVELOPMENT (the "Authority"), a body corporate and politic constituting a
public instrumentality of the Commonwealth of Pennsylvania, LANNETT COMPANY,
INC., a Delaware corporation (the "Borrower") and FIRST UNION CAPITAL MARKETS
CORP. (the "Placement Agent").
1. Background
A. The Authority is issuing its Tax-Exempt Variable Rate
Demand/Fixed Rate Revenue Bonds (Lannett Company, Inc. Project), Series of
1999, in the aggregate principal amount of $3,700,000 (the "Bonds") pursuant
to a Trust Indenture of even date herewith (the "Indenture") between the
Authority and First Union National Bank, as Trustee (the "Trustee"). The
proceeds of the Bonds are being applied to finance a project (the "Project")
consisting of (i) the construction of an approximately 40,000 square foot
manufacturing and manufacturing-related facility as an addition to a 33,000
square foot existing facility located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ (the "9000 State Road Facility") or, alternatively, the
acquisition and renovation of an existing manufacturing and
manufacturing-related facility located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ (the "▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ Facility"); (ii) the acquisition of
equipment for installation and use in either the 9000 State Road Facility or
the ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ Facility; and (iii) the payment of a portion of the costs
of issuance of the Bonds.
B. The Authority and the Borrower have entered into a Loan
Agreement of even date herewith (the "Loan Agreement"), pursuant to which the
Authority has agreed to loan the proceeds of the Bonds to the Borrower and
the Borrower has agreed, among other things, to make loan payments to the
Trustee in amounts and at the times sufficient to pay, when due, the
principal of, premium, if any, and interest on the Bonds.
C. Concurrently with, and as a condition to the issuance of
the Bonds, the Borrower will cause to be delivered to the Trustee an
irrevocable, direct-pay Letter of Credit, dated the date of issuance of the
Bonds (the "Letter of Credit") issued by First Union National Bank. Under the
terms of the Letter of Credit, the Trustee will be entitled to draw up to an
amount equal to the principal of the Bonds plus at least forty-six (46) days'
accrued and unpaid interest thereon (at a maximum rate of 15% per annum for
the Bonds, based on a 365 or 366 day year, as applicable, and the actual
number of days elapsed). The Letter of Credit will be issued pursuant to a
Reimbursement Agreement, of even date herewith (the "Reimbursement
Agreement") between the Bank and the Borrower. The Letter of Credit will
expire pursuant to its terms on October 31, 2002, unless earlier terminated
pursuant to its terms (the "Letter of Credit Termination Date"). The Bonds
mature on May 1, 2014 and are subject to optional, extraordinary, mandatory
and mandatory sinking fund redemption and optional and mandatory tender prior
to maturity, all as set forth in the Placement Memorandum (as hereinafter
defined).
D. It is intended that the Bonds will constitute "qualified
small issue bonds" within the meaning of Section 144(a) of the Internal
Revenue Code of 1986, as amended, and the regulations promulgated thereunder
(the "Code"), so that the interest on the Bonds will be excludable from gross
income for purposes of federal income taxation under Section 103(a) of the
Code.
E. The Bonds will be issued pursuant to a Resolution
adopted by the Authority (the "Resolution") and the Indenture. The proceeds
of the sale of the Bonds are to be applied (i) to pay financing costs not in
excess of two percent (2%) of the face amount of the Bonds and (ii) to
provide moneys for certain qualifying costs of the Project, all as set forth
in the Indenture, the Loan Agreement, the Placement Memorandum (as
hereinafter defined) and certain certifications and agreements of the
Borrower and the Authority delivered in connection with the issuance of the
Bonds. Financing costs are deemed to include, but not be limited to, the
costs of preparing and reproducing the Loan Agreement, the Reimbursement
Agreement, the Placement Memorandum, the Remarketing Agreement and this
Placement Agreement, the Placement Agent's fee in accordance with Section 2
hereof, reasonable administrative fees of the Authority and the Trustee and
any fees and disbursements of Bond Counsel, Counsel for the Borrower, Counsel
for the Bank and Counsel for the Placement Agent. If for any reason the Bonds
are not "placed" or to the extent that financing costs exceed two percent
(2%) of the face amount of the Bonds, then (i) all of the financing costs, in
the case that the Bonds are not placed; or (ii) that portion of the financing
costs in excess of two percent (2%) of the face amount of the Bonds, in the
case that the Bonds are placed, are to be paid directly by the Borrower to
the appropriate parties.
F. The Bonds will be remarketed in accordance with the
applicable provisions of the Indenture and a Remarketing Agreement of even
date herewith (the "Remarketing Agreement"), by and between First Union
Capital Markets Corp., in its capacity as remarketing agent, and the
Borrower.
G. The professional advisors referred to in this Placement
Agreement are:
Bond Counsel,
Bank Counsel and Obermayer ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Hippel LLP
Placement Agent Counsel: One Penn Center, 19th Floor
▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Borrower Counsel: ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇'▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Authority Counsel: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
2. Placement and Closing. Subject to the terms and conditions and in
reliance on the representations, warranties, agreements and indemnities set
forth herein, (i) the Placement Agent ▇▇▇▇▇▇ agrees to privately place the
Bonds, as agent for the Authority; and (ii) the Authority hereby agrees to
deliver to such investors, all (but not less than all) of the Bonds as
provided in the Indenture. The aggregate price for the Bonds shall be 100% of
the principal amount thereof plus accrued interest to the date of Closing (as
hereinafter defined), payable in immediately available funds to the order of
the Trustee for the account of the Authority. As consideration for its
private placement of the Bonds, the Borrower shall pay the Placement Agent a
fee equal to 1.25% of the principal amount of the Bonds in immediately
available funds on the date of closing. Closing will be held at the offices
of Obermayer ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Hippel LLP at 9:00 a.m. prevailing local time,
on April 30, 1999 (the "Closing"), or at such other place and time as may be
agreed to by the parties hereto. The Bonds will be delivered to The
Depository Trust Company in New York, New York, in fully registered form in
such denominations and registered in such names as shall be requested by the
Placement Agent.
3. Authority's Representations. The Authority represents to and
agrees with the Placement Agent that as of the date hereof and the date of
Closing:
(a) The statements and information in the Placement
Memorandum under the captions "The Authority," "Disclosure Required By
Florida Blue Sky Laws" and "Litigation" (only insofar as such information
pertains to the Authority) are true and correct in all material respects, and
the Placement Memorandum does not contain any untrue statement of a material
fact relating to the Authority or omit to state a material fact relating to
the Authority that is necessary to make the statements and information
therein, in the light of the circumstances under which they were made, not
misleading, it being understood that the Authority is not making any
representation as to the truth, accuracy or completeness of the Placement
Memorandum, other than those portions that relate to or describe the
Authority.
(b) The Authority is a body corporate and politic and a
public instrumentality of the Commonwealth of Pennsylvania with the power and
authority set forth in the Pennsylvania Economic Development Authority Law
(the "Act"), including the power and authority to authorize the issuance of
the Bonds under the Act.
(c) The Authority has the requisite authority to enter into
this Placement Agreement. This Placement Agreement has been duly authorized,
executed and delivered by the Authority and, assuming the due authorization,
execution and delivery by the other parties hereto, will constitute a valid
and binding obligation of the Authority, enforceable in accordance with its
terms (subject to any applicable bankruptcy, insolvency, moratorium or other
similar laws or equitable principles affecting creditors' rights or remedies
generally).
(d) The Authority has the requisite authority to execute
the Bonds and when delivered to and paid for by the Placement Agent at the
Closing in accordance with the provisions of this Placement Agreement, the
Resolution and the Indenture, the Bonds will have been duly authorized,
executed and issued and will constitute valid and binding special limited
obligations of the Authority enforceable in accordance with their respective
terms and entitled to the benefits and security of the Indenture (subject to
any applicable bankruptcy, insolvency, moratorium or other similar laws or
equitable principles affecting creditors' rights or remedies generally).
(e) The Authority has the requisite authority to enter into
the Indenture and the Loan Agreement and to execute the Placement Memorandum
and the Authority has duly authorized and approved their execution and
delivery. The Indenture and the Loan Agreement, when each of them has been
executed by the Authority, will, assuming due authorization, execution and
delivery by the other parties thereto, constitute a valid and binding
obligation of the Authority, enforceable in accordance with its respective
terms (subject to applicable bankruptcy, insolvency, moratorium or other
similar laws or equitable principles affecting creditors' rights or remedies
generally).
(f) The adoption of the Resolution and the execution of the
Placement Memorandum, the Indenture, the Loan Agreement, the Bonds and this
Placement Agreement and compliance by the Authority with the provisions
thereof and hereof, under the circumstances contemplated thereby and hereby,
to the knowledge of the Authority, do not and will not in any material
respect conflict with or constitute on the part of the Authority a breach of
or default under any indenture, deed of trust, mortgage, agreement or other
instrument to which the Authority is a party, or conflict with, violate or
result in a breach of any existing law, public administrative rule or
regulation, judgment, court order or consent decree to which the Authority is
subject.
(g) The Resolution and the forms of the Indenture, the Loan
Agreement, the Bonds and this Placement Agreement were adopted or approved at
a duly convened meeting of the Authority, with respect to which all legally
required notices were duly given to all members of the Authority, and at
which meetings quorums were present and acting at the time of adoption
thereof.
(h) Neither the Commonwealth of Pennsylvania nor the County
of Philadelphia is obligated to pay, and neither the faith and credit nor
taxing power of the Commonwealth of Pennsylvania nor the County of
Philadelphia is pledged to the payment of, the principal or redemption price,
if any, of or interest on the Bonds. The Bonds are special, limited
obligations of the Authority, payable solely out of the revenues or other
receipts, funds or moneys of the Authority pledged under the Indenture and
from any amounts otherwise available under the Indenture for the payment of
the Bonds. The Bonds do not now and shall never constitute a charge against
the general credit of the Authority. The Authority has no taxing power.
(i) Except with respect to defaults under certain
obligations of the Authority in which it has acted only as a conduit issuer
for the benefit of borrowers, the Authority, to the best of its knowledge,
has never defaulted and is not now in default with respect to, any bonds,
notes or other obligations which it has issued.
(j) It is specifically understood and agreed that the
Authority makes no representation as to the financial position or business
condition of the Borrower and does not represent or warrant as to the
correctness, completeness or accuracy of any of the statements, information
(financial or otherwise), representations or certifications furnished or to
be made and furnished by the Borrower in connection with the execution and
delivery of the Loan Agreement or the consummation of the transactions
contemplated thereunder or in connection with the sale of the Bonds.
4. ▇▇▇▇▇▇▇▇'s Representations. The Borrower makes the following
representations as of the date hereof, all of which will continue to be in
effect subsequent to the private placement of the Bonds:
(a) The Borrower is a corporation duly organized and
validly subsisting under the laws of the State of Delaware.
(b) The Borrower has full legal power to execute and
deliver the Loan Agreement, the Reimbursement Agreement, the Remarketing
Agreement, this Placement Agreement, the Loan Documents (as such term is
defined in the Reimbursement Agreement) and any and all other documents,
certificates and agreements executed by the Borrower in connection with the
issuance of the Bonds and the Letter of Credit (collectively, the "Borrower
Documents") and to perform its obligations thereunder and hereunder.
(c) The Borrower has duly authorized the execution and
delivery of the Borrower Documents and the undertaking of its obligations
thereunder and hereunder, and the taking of all actions as may be required on
the part of the Borrower to carry out the same; and the making and
performance of each such agreement will not conflict with, nor constitute a
breach of or a default under, any provision of the Articles of Incorporation,
By-laws or other constituent documents of the Borrower or any indenture,
agreement or other instrument to which the Borrower is a party or by which
the Borrower or any of its properties may be bound, or any constitutional or
statutory provision or order, rule, regulation, decree or ordinance of any
court, government or governmental body to which the Borrower or any of its
properties are subject.
(d) As of the Closing, the Borrower Documents will be duly
executed and delivered by the Borrower, will be in full force and effect, and
assuming due authorization, execution and delivery by the other parties
thereto, each of the Borrower Documents will constitute the legal, valid and
binding obligations of the Borrower, enforceable in accordance with their
respective terms, except as enforcement may be limited by equitable
principles or by bankruptcy, insolvency, reorganization, moratorium and other
similar laws and equitable principles in effect from time to time affecting
the enforcement of creditors' rights generally.
(e) There is no action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court, regulatory
agency, public board or body pending or, to the best knowledge of the
Borrower, threatened against the Borrower, nor to the best knowledge of the
Borrower is there any basis therefor, wherein an unfavorable ruling or
finding would adversely affect the validity or enforceability of the Borrower
Documents or would materially and adversely affect any of the transactions
contemplated by this Placement Agreement.
(f) The information set forth in the Placement Memorandum
(as hereinafter defined), with the exception of the information under the
headings "The Authority," "Litigation," as such information relates to the
Authority or the Bank, "Introductory Statement," as such information relates
to the Authority and the information in Appendices A and B, is true and
correct in all material respects and does not contain any untrue statement of
a material fact or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(g) The Borrower has obtained all consents, approvals,
authorizations and orders of governmental or regulatory authorities that are
required to be obtained by it as a condition precedent to the execution by
the Borrower of the Borrower Documents. The Borrower has obtained all
consents that are required to be obtained by it for the performance of its
obligations under the Borrower Documents.
5. Placement Agent's Representations, Warranties and Covenants. The
Placement Agent makes the following representations, warranties and
covenants, all of which will continue to be in effect subsequent to the
purchase and placement of the Bonds:
(a) The Placement Agent has full legal power to execute and
deliver this Placement Agreement, the Remarketing Agreement and any and all
other agreements, documents and certificates executed by the Placement Agent
in connection with the issuance of the Bonds (collectively, the "Placement
Agent Documents") and to perform its obligations thereunder and hereunder.
(b) The Placement Agent has received all necessary
information with respect to the Borrower, the Bank and the Project in order
to place the Bonds and any and all information relating to the Borrower or
the Bank and their affairs, which the Placement Agent has requested has been
provided to the Placement Agent.
(c) The Placement Agent Documents have been duly executed
and delivered by the Placement Agent and assuming the due authorization,
execution and delivery by the other parties thereto, each of the Placement
Agent Documents is the binding and enforceable agreement of the Placement
Agent enforceable in accordance with its terms, except that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
moratorium or other similar laws or equitable principles affecting creditors'
rights or remedies generally.
(d) The Placement Agent hereby expressly waives the right
to receive any information relating to the Project or the business and
affairs, financial or otherwise, of the Borrower from the Authority and
relieves the Authority and its agents, representatives and attorneys, of all
liability for failure to provide such information or for the inclusion in
such information or in any of the documents, representations or
certifications to be provided by the Borrower under this Agreement, the
Placement Memorandum or under any of the Borrower Documents of any untrue
statement or for the failure therein to include any fact.
(e) The documents relating to the issuance of the Bonds,
including without limitation, the Indenture and the Letter of Credit, have
been reviewed by the Placement Agent and such documents contain terms
acceptable to, and agreed to by, the Placement Agent.
(f) The Placement Agent has complied with and will continue
to comply with all applicable regulations of the Municipal Securities
Rulemaking Board.
(g) The Bonds are being offered in authorized denominations
of $100,000 or more and are being sold to no more than thirty-five (35)
persons each of whom the Placement Agent reasonably believes (i) has such
knowledge and experience in financial and business matters that it is capable
of evaluating the merits and risks of the prospective investment and (ii) is
not purchasing for more than one account or with a view to distributing the
Bonds. The Placement Agent acknowledges that each investor has been given or
will have been given an opportunity to examine such material relating to the
Bonds, the Borrower, the Project and the Bank as is satisfactory to each of
them.
(h) There is no action, suit, proceeding, inquiry or
investigation at law or in equity, or before or by any court, public body or
other governmental authority, pending or, to the best knowledge and
information of the Placement Agent, threatened against or affecting the
Placement Agent, wherein an unfavorable decision, ruling or finding could
materially adversely affect the business or financial condition of the
Placement Agent or could adversely affect the transactions contemplated by
this Agreement, or which in any manner raises any questions concerning the
legality, validity or enforceability of this Agreement nor to the best
knowledge and belief of the Placement Agent is there any basis therefor.
(i) The execution, delivery and performance by the
Placement Agent of this Agreement does not and will not violate its
certificate of incorporation or by-laws or any order, injunction, ruling or
decree by which the Placement Agent is bound, and does not and will not
constitute a breach of or a default under any agreement, indenture, mortgage,
lease, note or other obligation, instrument or arrangement to which the
Placement Agent is a party or by which the Placement Agent or any of its
property is bound, or contravene or constitute a violation of any law, rule
or regulation to which the Placement Agent or any of its property is subject,
and no approval or other action by, or filing or registration with any
governmental authority or agency is required in connection therewith which
has not been previously obtained or accomplished.
6. Placement Memorandum. Prior to the Closing, the Borrower and the
Authority each approved and authorized the distribution of the Placement
Memorandum (including all exhibits and appendices thereto, the "Placement
Memorandum"), and each authorized the use of the Placement Memorandum in
connection with the private placement of the Bonds.
7. Authority Covenants. The Authority covenants as follows:
(a) To refrain from taking any action within its control
which will adversely affect the exclusion from gross income for federal
income tax purposes of the interest on the Bonds; and
(b) To promptly notify the Placement Agent if, prior to the
Closing, any event occurs which is known to the Authority and which, in the
judgment of the Authority, makes any statements concerning the Authority in
the Placement Memorandum untrue in any material respect or which requires the
making of any changes in the Placement Memorandum in order to make any
statement concerning the Authority therein not misleading.
8. Borrower Covenants. The Borrower covenants as follows:
(a) To refrain from taking any action, or permitting any
action within its control to be taken, which will adversely affect the
exclusion from gross income for federal income tax purposes of the interest
on the Bonds;
(b) To indemnify, hold harmless and defend the Authority,
its members, officers, agents and employees, past, present and future, and
the Placement Agent, its officers, agents and employees, past, present and
future and each person, if any, who controls the Placement Agent within the
meaning of Section 15 of the Securities Act of 1933, as amended
(individually, an "Indemnified Party" and collectively, the "Indemnified
Parties"), to the full extent permitted by law against any and all losses,
claims, damages or liabilities (including reasonable legal and other expenses
of defending any actions) that they or any of them may incur or have asserted
against them caused by (i) any untrue statement or alleged untrue statement
of a material fact in the Placement Memorandum, except (as to the Authority
only) for the information under the heading "The Authority," "Litigation" (to
the extent of the information therein relating to the Authority) and except
for the information contained in Appendices A and B or any amendments or
supplements to the Placement Memorandum; or (ii) the omission or alleged
omission to state therein a material fact required to be stated in the
Placement Memorandum or necessary to make the statements therein, in light of
the circumstances under which they are made, not misleading or (iii) any
breach (or alleged breach) by the Borrower of any of its representations or
warranties set forth in this Placement Agreement or directly or indirectly
resulting from, arising out of, or related to the Project;
(c) To indemnify, hold harmless and defend the Authority,
its elected public officials, officers and employees, past, present and
future, to the full extent permitted by law against all loss, costs, damages,
suits, judgments, actions and liabilities of whatever nature, including
without limitation, any liability under state or federal securities laws,
directly or indirectly resulting from, arising out of, or related to the
issuance or remarketing of the Bonds.
9. Actions Brought Against Indemnified Parties. In case any action
shall be brought against any Indemnified Party with respect to which
indemnity may be sought against the Borrower under the provisions of this
Placement Agreement, such Indemnified Party shall promptly notify the
Borrower in writing, and the Borrower shall assume the defense thereof,
including the employment of counsel and the payment of all expenses. Any
Indemnified Party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the sole cost and expense of such Indemnified Party
unless (i) the employment of such counsel has been specifically authorized in
writing by the company; or (ii) the named parties to any such action
(including any impleaded parties) include both such Indemnified Party and the
Borrower and such Indemnified Party shall have been advised by its counsel
that it is probable that a conflict of interest between the Borrower and such
Indemnified Party may arise and for this reason it is not desirable for the
same counsel to represent both the Borrower and the Indemnified Party (in
which case the Borrower shall not have the right to assume the defense of
such action on behalf of such Indemnified Party); it being understood,
however, that in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances, the Borrower shall not be
liable for the reasonable fees and expenses or more than one separate firm of
attorneys for all such Indemnified Parties, which firm shall be designated in
writing by the Indemnified Parties). The Borrower shall not be liable for any
settlement of any such action effected without its written consent, but if
settled with the written consent of the Borrower or if there is a final
judgment for the plaintiff in any such action, the Borrower agrees to
indemnify and hold harmless any Indemnified Party from and against any loss,
cost, expense or liability by reason of such settlement or judgment,
including but not limited to attorneys' fees. This indemnity includes but is
not limited to reimbursement for expenses reasonably incurred by the
Indemnified Party in investigating the claim and in defending it if the
Borrower declines to assume the defense, provided that the matter is one for
which indemnification is required of the Borrower under this Agreement. The
indemnity agreements of the Borrower contained in Section 8 hereof shall
survive the delivery and payment of the Bonds.
10. Blue Sky Requirements. The Placement Agent shall, in its sole
discretion, determine the jurisdictions in which the Bonds shall be offered
and sold. The Placement Agent shall use its best efforts to qualify the Bonds
for offer, sale and delivery under the securities or "Blue Sky" laws of each
such jurisdiction to the extent required. The Authority and the Borrower
shall cooperate with the Placement Agent in its efforts to qualify the Bonds
for such offer, sale and delivery under the securities or "Blue Sky" laws of
such jurisdictions as the Placement Agent may request; provided, however,
that neither the Authority nor the Borrower shall be required to qualify as a
foreign corporation or to file written consent to suit or consent to service
of process in any jurisdiction. The Authority and the Borrower consent to the
use of the Placement Memorandum by the Placement Agent in obtaining such
qualifications. The Authority shall not be obligated to pay any expenses or
costs (including, but not limited to, legal fees) incurred in connection with
such qualification.
11. Conditions of Closing. The obligations of the Placement Agent to
privately place the Bonds on the date of Closing shall be subject, except as
specifically waived in writing by the Placement Agent in its sole discretion,
to (i) the accuracy of the representations and warranties on the part of the
Authority and the Borrower contained herein as of the date hereof and as of
the date of Closing; (ii) the accuracy in all material respects of the
statements of the officers and the elected public officials, as the case may
be, of the Authority and the Borrower made in any certificates or other
documents furnished pursuant to the provisions hereof, and (iii) the
performance by the Authority and the Borrower of their respective obligations
to be performed hereunder or otherwise at or prior to the Closing and to the
following additional conditions:
(a) At the Closing, the Resolution shall have been duly
adopted by the Authority and shall be in full force and effect and constitute
the legal, valid and binding action of the Authority, and the Borrower
Documents, when executed and delivered by the parties thereto, will
constitute legal, valid and binding obligations of the parties thereto,
enforceable in accordance with their respective terms, and such documents
shall not have been amended, modified or supplemented except as may have been
agreed to in writing by the Placement Agent;
(b) At the Closing, there shall not have been any material
adverse change in the business, properties or financial condition of the
Bank, as described in the Placement Memorandum or of the Borrower, which in
the judgment of the Placement Agent, makes it inadvisable to proceed with the
offer and sale of the Bonds;
(c) The Letter of Credit shall have been delivered by the
Bank;
(d) At the Closing, the Placement Memorandum shall not have
been amended, modified or supplemented, except as may have been agreed to in
writing by the Placement Agent;
(e) Neither the Authority nor the Borrower shall have
defaulted in the performance of any of their covenants hereunder, under the
Indenture or under the Borrower Documents;
(f) The Placement Agent shall have received:
(i) An opinion of Bond Counsel, dated the date of
Closing, in customary form to the effect that the Bonds are legal, valid and
binding obligations of the Authority and that interest on the Bonds is not
includable in gross income for federal income tax purposes under Section
103(a) of the Code, and in addition, containing therein or in a supplemental
opinion of Bond Counsel, addressed to the Authority, the Placement Agent and
its counsel, also dated the date of Closing, the matters set forth in Exhibit
A hereto and any other matters which may be reasonably requested by the
Placement Agent, with such changes therein as are acceptable to the Placement
Agent and its counsel;
(ii) An opinion of Counsel for the Borrower, dated
the date of Closing and addressed to the Authority, the Placement Agent, the
Bank, and the Trustee, covering the matters set forth in Exhibit B hereto and
any other matters which may be reasonably requested by the Placement Agent,
with such changes therein as are acceptable to the Authority, the Placement
Agent, the Bank and the Trustee;
(iii) An opinion of Counsel for the Bank, dated
the date of Closing and addressed to the Authority, the Placement Agent, the
Bank and the Trustee, covering the matters set forth in Exhibit C hereto,
with such changes therein as are acceptable to the Authority, the Placement
Agent, the Bank, the Trustee and Bond Counsel;
(iv) An opinion of Authority Counsel, dated the
date of Closing and addressed to the Placement Agent, the Bank, the Trustee
and Bond Counsel, covering the matters set forth in Appendix D hereto, with
such changes therein as are acceptable to the Placement Agent, the Bank, the
Trustee and Bond Counsel.
(v) A certificate, dated the date of Closing and
signed by an authorized representative of the Borrower to the effect (A) that
the Borrower has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied under this Placement
Agreement, the Loan Agreement and the Reimbursement Agreement or otherwise at
or prior to the Closing; and (B) such other matters as Bond Counsel and the
Placement Agent may reasonably request;
(vi) An executed Form 8038 of the Authority;
(vii) the Authority General Certificate, duly
executed by an authorized officer of the Authority;
(viii) Such additional documents, instruments,
agreements, certificates and opinions as Bond Counsel, the Placement Agent
and its counsel and the Authority may reasonably request to evidence the
accuracy of the representations and warranties and compliance with the
covenants set forth herein, including the covenants as to the exclusion of
the interest on the Bonds from gross income for federal income tax purposes
and the exemption of the offering of the Bonds from registration under the
Securities Act of 1933, as amended; and
(g) Between the date hereof and the date of Closing, the
market price or marketability of the Bonds shall not have been materially
adversely affected, in the reasonable judgment of the Placement Agent
(evidenced by a written notice to the Authority and the Borrower terminating
the obligation of the Placement Agent to privately place the Bonds), by
reason of any of the following:
(i) Legislation enacted by or introduced in the
Congress of the United States or reported out of or pending in committee or
recommended for passage by the President of the United States, or a decision
rendered by a court established under Article III of the Constitution of the
United States or by the Tax Court of the United States, or an order, ruling,
regulation or official statement (final, temporary or proposed) issued or
made or any other release or announcement (A) by or on behalf of the Treasury
Department of the United States or the Internal Revenue Service or any other
federal or state authority, with the purpose or effect, directly or
indirectly, of imposing federal income taxation upon such interest as would
be received by the holders of the Bonds, or (B) by or on behalf of the
Securities and Exchange Commission, or any other governmental agency having
jurisdiction of the subject matter, to the effect that obligations of the
general character of the Bonds are not exempt from qualification under, or
other requirements of, the Trust Indenture Act of 1939, as amended, or that
the issuance, offering or sale of obligations of the general character of the
Bonds, including any or all underlying arrangements as contemplated hereby or
by the Placement memorandum, is or would be in violation of the federal
securities laws as amended and then in effect and the regulations promulgated
thereunder; or
(ii) The declaration of war or engagement in major
hostilities by the United States or the occurrence of any other local,
national or international emergency or calamity relating to the effective
operation of the government of or the financial community in the United
States, or a default with respect to the debt obligations of, or the
institution of proceedings under the federal bankruptcy laws by or against,
any state of the United States or agency thereof, the City of New York, New
York, or any city in the United States having a population of over 1,000,000,
the effect of which on the financial markets of the United States will be
such as, in the Placement Agent's judgment, makes it impracticable for the
Placement Agent to place the Bonds; or
(iii) The declaration of a general banking
moratorium by federal, New York or Pennsylvania authorities, or the general
suspension of trading on any national securities exchange; or
(iv) Any amendment to the United States
Constitution or the Pennsylvania Constitution or action by any federal or
state court, legislative body, regulatory body or other authority materially
adversely affecting the validity or enforceability of the Resolution, the
Bonds, the Loan Agreement, the Indenture, the Reimbursement Agreement, the
Letter of Credit or this Placement Agreement, or the ability of the
Authority, the Borrower or the Bank to meet its respective covenants under
such agreements; or
(v) Any event occurring, or information becoming
known which, in the reasonable judgment of the Placement Agent, the Authority
or the Borrower makes untrue in any material respect any statement or
information contained in the Placement Memorandum, or has the effect that the
Placement Memorandum contains any untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading.
If the Placement Agent terminates its obligation to place the Bonds
for any reason permitted by this Placement agreement, this Placement
Agreement will terminate without liability on the part of the Authority, the
Borrower or the Placement Agent, except for the provisions of Sections 8 as
to indemnification of the Authority and the Placement Agent.
11. Representation of the Placement Agent. The Placement Agent
acknowledges that each investor has been given or will have been given an
opportunity to examine such material relating to the Bonds, the Borrower, the
Project and the Bank as is satisfactory to each of them.
12. Notices and Other Actions. All notices, demands and formal
actions hereunder will be in writing, mailed, telegraphed or delivered to:
The Authority:
Philadelphia Authority for Industrial Development
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chairman
The Borrower:
Lannett Company, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Vice President - Finance
with a copy to:
▇▇▇, ▇▇▇▇▇▇▇▇▇▇, O'Brien & ▇▇▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esquire
The Placement Agent:
First Union Capital Markets Corp.
Second Floor South
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Director: Tax-Advantage Products
13. Acknowledgment of Multiple Representation. Each of the parties
hereto acknowledges and confirms that it was advised on or before March 1,
1999 that Obermayer ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Hippel LLP would act as Bond Counsel,
Bank Counsel and Counsel to the Placement Agent in connection with the
transaction described in this Bond Placement Agreement. Each of the parties
hereto further acknowledges and confirms that, upon being so advised, it
agreed to such multiple representation.
14. Execution in Counterparts. This Placement Agreement may be
executed in any number of counterparts, all of which shall constitute but one
and the same document, and any parties hereto may execute this Placement
Agreement by signing any such counterparts.
15. Successors. This Placement Agreement will inure to the benefit
of and be binding upon the parties hereto and their successors, and no other
person shall acquire or have any right hereunder or by virtue hereof.
16. Applicable Law. This Placement Agreement shall be governed by
and construed in accordance with the domestic internal laws (but not the law
of conflict of laws) of the Commonwealth of Pennsylvania.
17. Limitation of Liability. The liability of the Authority under
this Placement Agreement shall be limited to the same extent as set forth in
the Bonds.
IN WITNESS WHEREOF, the Authority, the Borrower and the Placement
Agent, intending to be legally bound, have caused their duly authorized
representatives to execute and deliver this Bond Placement Agreement as of
the date first written above.
ATTEST: PHILADELPHIA AUTHORITY FOR
INDUSTRIAL DEVELOPMENT
_____________________________ By:_________________________________
Secretary Chairman
ATTEST: LANNETT COMPANY, INC.
_____________________________ By:_________________________________
Authorized Officer ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Chairman
WITNESS: FIRST UNION CAPITAL MARKETS CORP.
_____________________________ By:_________________________________
Director and Vice President
EXHIBIT A
Points to be covered in
Supplemental Opinion of Bond Counsel
1. The Bonds are exempt from registration under the
Securities Act of 1933 and the Indenture is exempt from qualification under
the Trust Indenture Act of 1939, as amended.
2. The description and summaries under the captions entitled
"The Bonds" (except for the information extracted from information provided
by DTC), "The Indenture," "The Loan Agreement" and "Tax Matters" contained in
the Placement Memorandum fairly summarize the applicable provisions of the
documents or portions of applicable law, as the case may be, which are
purported to be summarized therein.
EXHIBIT B
Points to be covered in Opinion of counsel for the Borrower
1. The Borrower is a corporation duly organized and validly
subsisting under the laws of the Commonwealth of Pennsylvania.
2. The Borrower has the necessary authority to execute and
deliver the Borrower Documents, and the undertakings of its obligations
thereunder, and the taking of all actions as may be required on the part of
the Borrower to carry out the same, and the making and performance of each
such agreement will not conflict with, constitute a breach of or a default
under, any provision of the Articles of Incorporation, By-laws or other
constituent documents of the Borrower or, to counsel's knowledge, any
indenture, agreement or other instrument to which the Borrower is a party or
by which the company or any of its properties may be bound, or any
constitutional or statutory provision or order, rule, regulation, decree or
ordinance of any court, government or governmental body to which the Borrower
or any of its properties are subject.
3. The Borrower Documents have been duly authorized,
executed, acknowledged and delivered by the Borrower, are in full force and
effect and constitute the legal, valid and binding obligations of the
Borrower, enforceable against the Borrower in accordance with their
respective terms, except as enforcement may be limited by equitable
principles, or by bankruptcy, insolvency, reorganization, moratorium and
other similar laws or equitable principles in effect from time to time
affecting the enforcement of creditors' rights generally.
4. To the best of such counsel's knowledge, no authorization,
consent, approval or review of any court or governmental body or regulatory
authority is required for the authorization, execution and delivery by the
Borrower of, and performance by the Borrower of its obligations under, the
Borrower Documents or for any action taken by the Borrower in connection with
the transactions contemplated thereby, which has not been obtained or
effected.
5. There is no action, suit, litigation, proceeding, inquiry
or investigation, at law or in equity, before or by any court, regulatory
agency, public board or body pending or, to the best of such counsel's
knowledge, threatened against the Borrower, nor to the best of such counsel's
knowledge is there any basis therefor, wherein an unfavorable ruling or
finding would adversely affect (i) the business, properties or financial
condition of the Borrower; (ii) the validity or enforceability of the
Borrower Documents; or (iii) any of the transactions contemplated by the
undertaking of the Project and the aforementioned documents.
6. The Borrower has duly authorized the taking of any and all
action necessary to carry out and give effect to the transactions
contemplated to be performed on its part by the Borrower Documents, the
Preliminary Placement Memorandum and the Placement Memorandum and has duly
authorized the taking of any and all action necessary to carry out and give
effect to the transactions contemplated to be performed on its part by the
Borrower Documents.
7. The Borrower has all necessary permits, licenses,
certifications and qualifications to conduct its business as it is presently
being conducted, subject to such exceptions which, in the aggregate, would
not have a material adverse effect on the business or operations of the
Borrower and the Borrower is not in any material way in breach of or in
default under any applicable law or administrative regulation of the
Commonwealth of Pennsylvania or of the United States or any applicable
judgment or decree.
8. The Borrower has obtained all approvals required under
applicable federal and state laws (other than securities laws) to finance the
Project.
EXHIBIT C
Points to be covered in the Opinion of Counsel for the Bank
1. The Bank is a national banking association, validly existing and
in good standing under the laws of the United States of America and has full
power and authority to issue and deliver the Letter of Credit and to execute
and deliver the Reimbursement Agreement and the Remarketing Agreement and to
perform its obligations thereunder.
2. The Reimbursement Agreement, the Letter of Credit and the
Remarketing Agreement have been duly authorized and constitute valid and
binding obligations of the Bank, enforceable against the Bank in accordance
with their respective terms, except as the enforceability thereof may be
limited by equitable principles, or by bankruptcy, insolvency,
reorganization, moratorium, liquidation and similar laws in effect from time
to time affecting the enforcement of creditors, rights generally, as such
laws would apply in the event of the bankruptcy, insolvency, reorganization
or liquidation of, or other similar occurrence with respect to, the Bank or
in the event of any moratorium or similar occurrence affecting the Bank. In
connection with its opinion in this paragraph, counsel expresses no opinion
as to whether a court, in the exercise of its equitable powers, may
temporarily enjoin or restrain payment of the drawing under the Letter of
Credit. However, counsel is of the opinion that a court would not permanently
enjoin or restrain such payment in the event of a bankruptcy, reorganization,
insolvency or liquidation or similar proceeding affecting the Authority or
the Borrower.
3. The issuance of the Letter of Credit and the performance by the
Bank of its obligations thereunder (a) require no consents or approvals of,
or filing with, any governmental or other regulatory agencies and (b) do not
violate any existing law, rule, regulation or ordinance.
4. The Letter of Credit constitutes a security issued or guaranteed
by a bank within the meaning of Section 3(a)(2) of the Securities Act of
1933, as amended (the "Securities Act") and, as such, is not required to be
registered pursuant to the Securities Act.
5. Although such counsel has not been engaged by the Bank to review
generally, or to express its opinion with respect to, disclosure materials
used in connection with the offer and sale of the Bonds and expresses no
opinion with respect thereto other than as set forth in this Paragraph 5,
such counsel has reviewed the information relating to the Letter of Credit
and the Reimbursement Agreement in the Placement Memorandum (the "Placement
Memorandum") set forth under the heading "The Letter of Credit and the
Reimbursement Agreement." Such information sets forth accurate summaries of
the portions of the Letter of Credit and Reimbursement Agreement purported to
be summarized therein.
EXHIBIT D
Points to be covered in the Opinion of Authority Counsel
1. The Authority is a body corporate and politic constituting a
public instrumentality of the Commonwealth of Pennsylvania, with full legal
right, power and authority to issue the Bonds and to lend the proceeds
thereof to the Company in order to undertake the Project, to adopt the
Resolutions, to execute and deliver the Loan Agreement, the Indenture, the
Placement Memorandum and the Bond Placement Agreement, to perform its
obligations thereunder and to issue and deliver the Bonds to the investors
designated by the Placement Agent as provided in the Bond Placement Agreement
and the Authority has complied with all applicable provisions of Pennsylvania
law in all matters relating to such transactions.
2. The Authority has duly authorized the execution, delivery and due
performance of the Loan Agreement, the Indenture and the Bond Placement
Agreement, the issuance and delivery of the Bonds, the execution and delivery
of the Placement Memorandum, and the taking of all actions as may be required
on the part of the Authority to carry out, give effect to and consummate the
transactions contemplated by the same; and the making and performance of each
such agreement will not conflict with, constitute a breach of, or default
under, the rules of procedure of the Authority or any indenture, agreement or
other instrument to which the Authority is a party or by which it is bound,
or any constitutional or statutory provision of Pennsylvania law, or, to the
best of such counsel's knowledge, any order, rule, regulation, decree or
ordinance of any court, government or governmental body to which the
Authority or any of its properties are subject.
3. The Resolutions have been duly adopted by the Authority and are
in full force and effect and constitute legal, valid and binding actions of
the Authority and the Loan Agreement, the Indenture and the Bond Placement
Agreement constitute legal, valid and binding obligations of the Authority.
4. The Bonds have been duly executed and delivered by the Authority
and constitute legal, valid and binding obligations of the Authority.
5. The Authority has obtained the approval by the Mayor of the City
of Philadelphia of the minutes of the public hearing required by Section
147(f) of the Internal Revenue Code of 1986, as amended, and the approval of
the issuance of the Bonds by the Pennsylvania Department of Community and
Economic Development has been obtained.
6. There is no action, suit, proceeding, inquiry or investigations,
at law or in equity before or by any court, regulatory agency, public board
or body pending or to the best of such counsel's knowledge, threatened
against the Authority, wherein an unfavorable ruling or finding would
adversely affect the validity or enforceability of the Loan Agreement, the
Indenture, the Bonds or the Bond Placement Agreement, or any other instrument
contemplated for use in consummating the transactions contemplated thereby,
or would materially and adversely affect any of the transactions contemplated
by the Bond Placement Agreement.
7. The portions of the Placement Memorandum under the headings "The
Authority" and "Disclosure Required by Florida Blue Sky Regulations" and the
first paragraph under the heading "Litigation" are true and correct in all
material respects and said portions of the Placement Memorandum do not
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.