Upper Illinois River Valley Development Authority
And
Exolon-ESK Company
Loan Agreement
Dated as of December 1, 1996
Loan Agreement
(This Table of Contents is not a part of this Loan Agreement
and is only for convenience of reference)
Table of Contents
SECTION HEADING PAGE
Parties 1
Preambles 1
Article I Definition of Terms 2
Article II Representations 7
Section 2.1. Representations of the Issuer 7
Section 2.2. Representations of the Company 8
Article III Acquisition, Construction and Installation
of the Project; Issuance of the Bonds 11
Section 3.1. Acquisition, Construction and Installation
of the Project; Title 11
Section 3.2. Agreement to Issue Bonds; Application of
Bond Proceeds 11
Section 3.3. Disbursements from the Acquisition
and Construction Fund 12
Section 3.4. Establishment of Completion Date;
Obligation of Company to Complete 13
Section 3.5. Investment of Moneys in the Acquisition
and Construction Fund, the Bond Fund and
the Bond Purchase Fund 15
Section 3.6. Special Arbitrage Certifications and
Covenants 15
Article IV Repayment Provisions 16
Section 4.1. Bond Proceeds 16
Section 4.2. Repayment of the Loan and Payment of
Other Amounts Payable 16
Section 4.3. No Defense or Set-Off - Unconditional
Obligation 18
Section 4.4. Assignment and Pledge of Issuer's Rights 19
Article V Special Covenants and Agreements 19
Section 5.1. Issuer's and Trustee's Right of Access
to the Project and the Premises 19
Section 5.2. Company to Maintain Its Corporate
Existence; Conditions under Which
Exceptions Permitted 19
Section 5.3. Release and Indemnification Covenants 20
Section 5.4. Records and Financial Statements of Company 21
Section 5.5. Tax-Exempt Status 22
Section 5.6. Insurance 23
Section 5.7. Maintenance and Repair 23
Section 5.8. Qualification in State 23
Section 5.9. Letter of Credit 23
Article VI Events of Default and Remedies 27
Section 6.1. Events of Default 27
Section 6.2. Remedies on Default 28
Section 6.3. Agreement to Pay Attorneys' Fees and
Expenses 29
Section 6.4. No Remedy Exclusive 29
Section 6.5. No Additional Waiver Implied by One Waiver 30
Article VII Prepayment of Note 30
Section 7.1. Obligation to Prepay the Note upon
Determination of Taxability 30
Section 7.2. General Option to Prepay the Note 30
Section 7.3. Option to Prepay the Note in Extraordinary
Events 30
Section 7.4. Obligation to Prepay the Note with Moneys
Remaining in the Acquisition and
Construction Fund 31
Section 7.5. Obligation to Prepay the Note for Mandatory
Sinking Fund Redemptions 31
Section 7.6. Redemption of the Bonds 32
Article VIII Financing Statements 32
Article IX Miscellaneous 33
Section 9.1. Notices 33
Section 9.2. Assignments 33
Section 9.3. Severability 33
Section 9.4. Execution of Counterparts 33
Section 9.5. Amounts Remaining in Any Fund or with
Trustee 33
Section 9.6. Amendments, Changes and Modifications 34
Section 9.7. Governing Law 34
Section 9.8. Authorized Company Representative 34
Section 9.9. Term of This Agreement 34
Section 9.10. Binding Effect 35
Section 9.11. References to Bank and Letter of Credit 35
Signature 36
Exhibit A Description of Project
Exhibit B Promissory Note
Exhibit C Description of Real Estate
Exhibit D Form of Requisition Certificate
Loan Agreement
This Loan Agreement (the "Agreement") dated as of December 1,
1996 by and between the Upper Illinois River Valley Development
Authority, a political subdivision, body politic and municipal
corporation duly organized and validly existing under the laws of
the State of Illinois (the "Issuer"), and Exolon-ESK Company, a
corporation duly organized and validly existing under the laws of
the State of Delaware (the "Company");
Witnesseth:
Whereas, pursuant to the Constitution and the laws of the State
of Illinois (the State ), and particularly 70 Illinois Compiled
Statutes 1994, 530/1 et seq., as supplemented and amended
(collectively, the "Act"), the Issuer is authorized to issue its
revenue bonds to finance the cost of "projects," as defined in
the Act; and
Whereas, pursuant to and in accordance with the Act, the Issuer
has agreed to issue and sell its Variable Rate Demand Solid Waste
Disposal Revenue Bonds, Series 1996-A (Upper Illinois River
Valley Development Authority Project) in the aggregate principal
amount of $8,405,000 (the "Series 1996-A Bonds") and its Taxable
Variable Rate Demand Solid Waste Disposal Revenue Bonds, Series
1996-B (Exolon-ESK Company Project) in the aggregate principal
amount of $4,595,000 (the "Series 1996-B Bonds"), which Series
1996-A Bonds and Series 1996-B Bonds (collectively, the "Bonds")
will be issued under the terms of an Indenture of Trust (the
"Indenture") dated as of December 1, 1996, from the Issuer to
American National Bank and Trust Company of Chicago, as trustee
(the "Trustee"), and to lend the proceeds of the Bonds to the
Company to finance a portion of the costs of the acquisition of
land, the construction of a building and related improvements and
the acquisition of machinery, equipment and related property to
be installed therein (the "Project"), all to be used for the
disposal of certain solid wastes, to be owned and operated by the
Company and all to be located in the Village of Hennepin,
Illinois, which Project shall constitute a "project," within the
meaning of the Act; and
Whereas, the Bonds issued under the Indenture will be secured by
(i) an assignment and pledge of all right, title and interest of
the Issuer in and to this Agreement and the promissory note of
the Company issued pursuant to this Agreement (the "Note"),
except as otherwise provided in the Indenture, and (ii) moneys
derived from drawings under the irrevocable, transferable letter
of credit dated the date of issuance and delivery of the Bonds,
issued by The Chase Manhattan Bank (the "Bank") in favor of the
Trustee for the benefit of the owners from time to time of the
Bonds, in the amount of (A) the aggregate principal amount of the
Bonds (1) to enable the Trustee to pay the principal of the Bonds
at maturity, upon call for redemption prior to maturity or
acceleration, and (2) to enable the Trustee to pay the portion of
the purchase price of Bonds to be tendered or deemed to be
tendered to it for purchase, equal to the aggregate principal
amount of such Bonds, plus (B) an amount equal to the interest to
accrue on the Bonds for thirty-five (35) days at the maximum rate
of twelve percent (12%) per annum (1) to enable the Trustee to
pay interest accrued on the Bonds on the dates and in the manner
set forth in the Indenture, and (2) to enable the Trustee to pay
the portion of the purchase price of Bonds tendered or deemed to
be tendered to it for purchase, equal to the accrued interest on
such Bonds (which initial letter of credit, together with any
substitute letter of credit, is hereinafter referred to as the
"Letter of Credit");
Now, Therefore, in consideration of the respective
representations and agreements herein contained, the parties
hereto agree as follows (provided, that in the performance of the
agreements of the Issuer herein contained, any obligation it may
thereby incur for the payment of money shall be a special,
limited obligation of the Issuer, and shall not constitute a
general obligation, debt or liability of the Issuer, the State or
any political subdivision thereof, or a charge against the
general credit, taxing powers or general funds or assets of the
Issuer, the State or any political subdivision thereof, but shall
be payable solely out of the proceeds derived from this
Agreement, the Note, the Letter of Credit and the sale of the
Bonds referred to in Section 3.2 hereof, all as herein provided):
Article I
Definition of Terms
All words and phrases defined in Article I of the Indenture shall
have the same meanings in this Agreement. Certain terms used in
this Agreement are hereinafter defined in this Article I. When
used herein, such terms shall have the meanings given to them by
the language employed in this Article I defining such terms,
unless the context clearly indicates otherwise:
"Acquisition and Construction Fund" means the Upper Illinois
River Valley Development Authority Variable Rate Demand Solid
Waste Disposal Revenue Bond Acquisition and Construction Fund
(Exolon-ESK Company Project), created and established in Section
6.6 of the Indenture.
"Acquisition and Construction Period" means the period between
the beginning of the acquisition, construction and installation
of the Project or the date on which the Bonds are first delivered
to the purchasers thereof, whichever is earlier, and the
Completion Date.
"Act" means 70 Illinois Compiled Statutes 1994, 530/1 et seq., as
from time to time supplemented and amended.
"Agreement" means this Loan Agreement, as from time to time
supplemented and amended.
"Alternate Credit Facility" means an irrevocable letter of
credit, a surety bond, an insurance policy or other credit
facility delivered to the Trustee pursuant to Section 5.9(e) of
this Agreement.
"Authorized Company Representative" means such person at the time
and from time to time designated to act on behalf of the Company
by written certificate furnished to the Issuer, the Trustee and
the Bank, containing the specimen signature of such person,
signed on behalf of the Company by the president, any vice
president, the treasurer or the secretary of the Company. Such
certificate may designate an alternate or alternates.
"Bank" means The Chase Manhattan Bank, in its capacity as the
issuer of the initial Letter of Credit pursuant to Section 5.9(a)
hereof, its successors in such capacity and their assigns, and
the issuer of any substitute Letter of Credit pursuant to Section
5.9(b), Section 5.9(c) or Section 5.9(d) hereof, and its
successors in such capacity and their assigns.
"Bond" or "Bonds" means the Series 1996-A Bonds and the Series
1996-B Bonds.
"Bond Counsel" means the counsel who renders the opinion as to
the tax-exempt status of the interest on the Series 1996-A Bonds
on the date of the issuance, sale and delivery of the Series
1996-A Bonds or such other firm of attorneys of nationally
recognized standing on the subject of bonds of states and their
political subdivisions, as may be mutually satisfactory to the
Issuer, the Company and the Trustee.
"Bond Fund" means the Upper Illinois River Valley Development
Authority Variable Rate Demand Solid Waste Disposal Revenue Bond
Fund (Exolon-ESK Company Project), created and established in
Section 6.2 of the Indenture.
"Bond Purchase Fund" means the Upper Illinois River Valley
Development Authority Variable Rate Demand Solid Waste Disposal
Revenue Bond Purchase Fund (Exolon-ESK Company Project), created
and established in Section 6.10 of the Indenture.
"Building" means the buildings to be constructed and financed
with the proceeds of the Bonds, constituting a portion of the
Project.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means Exolon-ESK Company, a corporation duly organized,
validly existing and in good standing under the laws of the State
of Delaware, and any surviving, resulting or transferee
corporation as permitted under Section 5.2 of this Agreement.
"Completion Date" means the date of completion of the Project as
that date shall be certified as provided in Section 3.4 of this
Agreement.
"Costs of Issuance" means those issuance costs described in
Section 147(g) of the Code and any Regulations.
"Costs of the Project" means the sum of the items authorized to
be paid from the Acquisition and Construction Fund pursuant to
the provisions of subsections (a) through (i) of Section 3.3 of
this Agreement.
"Determination of Taxability" means (i) the receipt by the
Company of a written notice from the Trustee or the receipt by
the Company and the Trustee of a written notice from any owner of
any Series 1996-A Bond of any issuance of a preliminary letter
regarding a proposed deficiency or a statutory notice of
deficiency by the Internal Revenue Service which holds, in
effect, that the interest payable on such Series 1996-A Bond, or
any installment thereof, is includible in the Federal gross
income of the taxpayer named therein (other than a "substantial
user" of the Project or any "related person" thereto, within the
meaning of Section 147(a) of the Code), (ii) the delivery to the
Company and the Trustee of an opinion of Bond Counsel to the effect
that the interest payable on any Series 1996-A Bond, or any
installment thereof, is includible in the Federal gross income of
the taxpayer named therein (other than a "substantial user" of the
Project or any "related person" thereto, within the meaning of
Section 147(a) of the Code), (iii) the filing by the Company with
the Trustee, any owner of any Series 1996-A Bond or the Internal
Revenue Service of any certificate, statement, or other tax
schedule, return or document which discloses that the interest
payable on any Series 1996-A Bond, or any installment thereof, is
includible in the Federal gross income of the taxpayer named
therein (other than a "substantial user" of the Project or any
"related person" thereto within the meaning of Section 147(a) of
the Code), or (iv) any amendment, modification, addition or change
shall be made in Section 142 of the Code or any other provision of
the Code or in any regulation or proposed regulation thereunder;
or any ruling shall be issued or revoked by the Internal Revenue
Service; or any other action shall be taken by the Internal Revenue
Service, the Department of Treasury or any other governmental agency,
authority or instrumentality; or any opinion of any Federal court
or of the United States Tax Court shall be rendered; and the
Trustee, the Bank or the owner of any Series 1996-A Bond shall
have notified the Company in writing that, as a result of any
such event or condition, Bond Counsel is unable to give an
unqualified opinion that the interest payable on any Series
1996-A Bond, or any installment thereof, made on or after a date
specified in said notice is excludible from the Federal gross
income of the taxpayer named therein (other than a "substantial
user" of the Project or any "related person" thereto, within the
meaning of Section 147(a) of the Code).
"Equipment" means the machinery, equipment and related property
to be acquired and installed with a portion of the proceeds of
the Bonds, more particularly described in Exhibit A attached
hereto and made a part hereof, comprising a portion of the
Project.
"Event of Default" means an event of default specified in Section
6.1 of this Agreement.
"Improvements" means the improvements to be constructed with a
portion of the proceeds of the Bonds, more particularly described
in Exhibit A attached hereto and made a part hereof, comprising a
portion of the Project.
"Indenture" means the Indenture of Trust dated as of December 1,
1996, from the Issuer to the Trustee, as from time to time
supplemented and amended.
"Investment Obligations" means: (i) Governmental Obligations;
(ii) interest-bearing savings accounts, interest-bearing
certificates of deposit or interest-bearing time deposits of any
bank, as defined by the Illinois Banking Act, which are insured
by the Federal Deposit Insurance Corporation or any successor
corporation, including without limitation the Trustee; (iii)
short-term obligations of corporations organized in the United
States of America with assets exceeding $500,000,000, if (A) such
obligations are rated on the date of purchase and at any time
held by the Trustee within one of the three (3) highest rating
classifications established by at least two (2) standard rating
services (without regard to any rating refinement or gradation by
numerical or other modifier), including without limitation the
Rating Agency and at least one (1) other rating service, and
mature not later than 180 days from the date of purchase, and (B)
such purchases do not exceed ten percent (10%) of such
corporations' outstanding obligations; (iv) money market mutual
funds registered under the Investment Company Act of 1940, as
from time to time amended, provided that the portfolio of any
such money market fund is limited to Government Obligations or
agreements to repurchase such Government Obligations and such
fund is rated on the date of purchase and at any time held by the
Trustee in the highest rating classification by the Rating
Agency; (v) short-term discount obligations of the Federal
National Mortgage Association; (vi) obligations issued by any
state, unit of local government or school district, which
obligations are rated on the date of purchase and at any time
held by the Trustee by the Rating Agency within one of the two
(2) highest rating classifications (without regard to rating
refinement or gradation by numerical or other modifier); (vii)
investment contracts under which securities are to be purchased
and sold at a predetermined price on a future date, or pursuant
to which moneys are deposited with a bank or other financial
institution and the deposits are to bear interest at an agreed
upon rate; provided that such investment contracts are rated on
the date of purchase and at any time held by the Trustee by the
Rating Agency within one of the two (2) highest rating
classifications (without regard to rating refinement or
graduation by numerical or other modifier); and (viii) any other
investments permitted by law if such investments are rated on the
date of purchase and at any time held by the Trustee within one
of the two (2) highest classifications (without regard to rating
refinement or graduation by numerical or other modifier)
established by the Rating Agency; or (ix) any other investment
permitted by law.
"Issuer" means the Upper Illinois River Valley Development
Authority, a political subdivision, body politic and municipal
corporation duly organized and validly existing under the laws of
the State, and any successor body to the duties or functions of
the Issuer.
"Land" means the land purchased with a portion of the proceeds of
the Bonds, constituting a part of the Project, and more
particularly described in Part of I of Exhibit C attached to and
made a part of this Agreement.
"Letter of Credit" means the initial irrevocable, transferable
Letter of Credit delivered to the Trustee pursuant to Section
5.9(a) hereof, and, unless the context or use indicates another
or different meaning or intent, any substitute Letter of Credit
delivered to the Trustee pursuant to Section 5.9(b), Section
5.9(c) or Section 5.9(d) of this Agreement.
"Letter of Credit Agreement" means the Letter of Credit
Reimbursement Agreement dated as of December 1, 1996, by and
between the Company and the Bank, as from time to time
supplemented and amended, under the terms of which the Bank
agrees to issue and deliver the initial Letter of Credit to the
Trustee; and, unless the context or use indicates another or
different meaning or intent, any letter of credit agreement or
reimbursement agreement by and between the Company and the issuer
of any substitute Letter of Credit delivered to the Trustee
pursuant to Section 5.9(b), Section 5.9(c) or Section 5.9(d)
hereof, as from time to time supplemented and amended, which
provides that it is a Letter of Credit Agreement for purposes of
this Agreement and the Indenture.
"Note" means the promissory note of the Company made payable to
the order of the Issuer and endorsed by the Issuer to the order
of the Trustee, delivered by the Company pursuant to Section
4.2(a) hereof, in order to evidence the obligation of the Company
to repay the loan made hereunder, payments on which Note are
provided to be sufficient to pay the principal of, premium, if
any, and interest on the Bonds when due.
"Premises" means the land on which the existing manufacturing
facilities of the Company are located (more particularly
described in Exhibit C attached hereto and made a part hereof),
the buildings, the machinery, the equipment and the other related
property located thereon and the Project.
"Project" means the Land, the Building, the Improvements, the
Equipment and related property to be acquired, constructed and
installed by the Company and financed with the proceeds of the
Bonds.
"Rebate Fund" means the fund by that name, created and
established under the Tax Exemption Certificate and Agreement.
"Regulations" means those regulations, whether now or hereafter
adopted, proposed or temporary, prepared by the United States
Department of the Treasury with respect to Section 103 or any of
Sections 141 through 150 of the Code.
"Remarketing Agent" means Gates Capital Corporation, and any
successors thereto, appointed in accordance with Section 10.11 of
the Indenture.
"Remarketing Agreement" means the Remarketing Agreement dated as
of December 1, 1996, by and among the Issuer, the Company and the
Remarketing Agent, as from time to time supplemented and amended,
and any remarketing agreement entered into in substitution
therefor.
"Series 1996-A Bonds" means the Variable Rate Demand Solid Waste
Disposal Revenue Bonds, Series 1996-A (Exolon-ESK Company
Project) of the Issuer, in the aggregate principal amount of
$8,405,000, issued pursuant to the Indenture.
"Series 1996-B Bonds" means the Taxable Variable Rate Demand
Solid Waste Disposal Revenue Bonds, Series 1996-B (Exolon-ESK
Company Project) of the Issuer, in the aggregate principal amount
of $4,595,000, issued pursuant to the Indenture.
"State" means the State of Illinois.
"Stated Termination Date" means the date on which the Letter of
Credit, as from time to time extended, is stated to expire.
"Tax Exemption Certificate and Agreement" means the Tax Exemption
Certificate and Agreement of the Company, dated the date of
issuance and delivery of the Series 1996-A Bonds.
"Trustee" means the Trustee as defined under the Indenture.
The words "hereof," "herein," "hereunder" and other words of
similar import refer to this Agreement as a whole.
Unless otherwise specified, references to Articles, Sections and
other subdivisions of this Agreement are to the designated
Articles, Sections and other subdivisions of this Agreement as
originally executed.
The headings of this Agreement are for convenience only and shall
not define or limit the provisions of this Agreement.
Article II
Representations
Section 2.1. Representations of the Issuer. The Issuer makes the
following representations as the basis for the undertakings on
its part herein contained:
(a) The Issuer is duly constituted and validly
existing as a political subdivision, body politic and municipal
corporation under the laws of the State. Under the provisions of
the Act, the Issuer has the power to enter into the transactions
contemplated by this Agreement, the Indenture, the Remarketing
Agreement and the Tax Exemption Certificate and Agreement and to
carry out its obligations hereunder and thereunder. The Project
constitutes and will constitute a "project," within the meaning
of the Act. By proper action of the members of the Issuer, the
Issuer has been duly authorized to execute and deliver this
Agreement, the Indenture, the Remarketing Agreement and the Tax
Exemption Certificate and Agreement.
(b) Neither the execution and delivery of this
Agreement, the Indenture, the Remarketing Agreement, the Tax
Exemption Certificate and Agreement and the Bonds, the
consummation of the transactions contemplated hereby or thereby,
nor the fulfillment of or compliance with the terms and
conditions of this Agreement, the Indenture, the Remarketing
Agreement, the Tax Exemption Certificate and Agreement and the
Bonds, conflicts with or results in a breach of the terms,
conditions or provisions of any restriction or any agreement or
instrument to which the Issuer is now a party or by which it is
bound, or constitutes a default under any of the foregoing.
(c) To finance a portion of the Costs of the Project,
the Issuer proposes to issue its Bonds in the amount and having
the terms and conditions specified in Articles II, III and IV of
the Indenture. The proceeds of the Bonds will be lent to the
Company and used by the Company to finance a portion of the Costs
of the Project as set forth in Section 3.3 of this Agreement.
(d) The Issuer has not assigned or pledged, and will
not assign or pledge, its right, title or interest in or to this
Agreement or the Note, other than to secure the Bonds and as
otherwise provided in the Indenture.
(e) The Issuer is not in default under any of the
provisions of the Constitution and the laws of the State which
would affect its existence or its powers referred to in the
preceding subsection (a).
(f) Under existing statutes and decisions, no taxes on
income or profits are imposed on the Issuer.
(g) The Issuer hereby finds and determines that the
financing of the Project with the proceeds of the Bonds will
further the public purposes stated in the Act, and that all
requirements of the Act incident to the issuance of the Bonds
have been completed.
(h) No member of the Issuer or any officer, employee
or agent of the Issuer has a pecuniary interest in any
employment, financing agreement or other contract made with
respect to the Company, the Project, the Bonds, the Indenture,
this Agreement or the transactions contemplated thereby or by
this Agreement.
(i) The Issuer, pursuant to Section 6(b) of the Act,
submitted notice, including a description of the Project and the
financing therefor, to the corporate authorities of the Village
of Hennepin, ▇▇▇▇▇▇ County, Illinois, which has planning and
subdivision control jurisdiction over the Project, and the Issuer
has not been informed by said corporate authorities of any
objection to the Project.
(j) The Governor of the State has provided written
approval for the issuance of the Bonds, as required by Section
7(a) of the Act.
Section 2.2. Representations of the Company. The Company makes
the following representations as the basis for the undertakings
on its part herein contained:
(a) The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Delaware, and has the power to enter into, and, by proper
corporate action, has been duly authorized to execute and deliver
this Agreement, the Note, the Letter of Credit Agreement, the
Remarketing Agreement and the Tax Exemption Certificate and
Agreement.
(b) Neither the execution and delivery of this
Agreement, the Note, the Letter of Credit Agreement, the
Remarketing Agreement and the Tax Exemption Certificate and
Agreement, the consummation of the transactions contemplated
hereby or thereby, nor the fulfillment of or compliance with the
terms and conditions of this Agreement, the Note, the Letter of
Credit Agreement, the Remarketing Agreement and the Tax Exemption
Certificate and Agreement, conflicts with or results in a breach
of any of the terms, conditions or provisions of any restriction
or any agreement or instrument to which the Company is now a
party or by which it is bound, or constitutes a default under any
of the foregoing, or results in the creation or imposition of any
lien, charge or encumbrance whatsoever upon any of the property
or assets of the Company or any subsidiary of the Company, except
as contemplated by such documents. No condition applicable to
the Company exists which would, upon the execution of this
Agreement, with the lapse of time or the giving of notice, or
both, become an Event of Default under this Agreement.
(c) The Project will be acquired, constructed and
installed through the use of the Bond proceeds, and will be
located on the Land and within the corporate boundaries of the
Village of Hennepin, Illinois.
(d) The Company intends to use the Project in such a
manner so as to maintain the status of the Project as a
"project," within the meaning of the Act, for at least the
duration of this Agreement.
(e) All of the Costs of the Project were determined or
estimated in accordance with sound engineering and accounting
principles.
(f) The information contained in the written documents
relating to the Project provided by the Company to the Issuer and
Bond Counsel with respect to the Bonds is true, correct and
complete in all material respects.
(g) No part of the Project was acquired or
constructed, and no Costs of the Project were incurred or
expended, on or before October 14, 1994.
(h) The Company will comply with the provisions of
Section 148 of the Code, and in that connection, has executed and
delivered the Tax Exemption Certificate and Agreement.
(i) The Company will not make any payments, or
agreements to pay, to a party, other than the United States of
America, an amount that is required to be paid to the United
States of America under the rebate requirements of Section 148(f)
of the Code by entering into any transaction that reduces the
rebatable amount because such transaction results in a smaller
profit or a larger loss than would have resulted if the
transaction had been at arm's length and had the yield on the
Series 1996-A Bonds not been relevant to either party. The
Company will not acquire with the proceeds of the Series 1996-A
Bonds any certificate of deposit, investment contract, or any
other type of investment which does not comply with the
provisions of the Code.
(j) The information furnished by the Company and used
by the Issuer in preparing the Form 8038, Information Return for
Private Activity Bond Issues, which has been filed by or on
behalf of the Issuer with the Internal Revenue Service Center in
Philadelphia, Pennsylvania, pursuant to Section 149(e) of the
Code, was true and complete as of the date of filing of said Form
8038.
(k) The weighted average maturity of the Series 1996-A
Bonds does not exceed 120% of the weighted average estimated
economic life of the components comprising the Project financed
with the proceeds of the Series 1996-A Bonds, as determined
pursuant to Section 147(b) of the Code.
(l) The property comprising the Project constitutes
and will constitute at all times during the term of this
Agreement, as set forth in Section 8.9 hereof, either land or
property of a character subject to the allowance for depreciation
under the Code; at least 95% of the net proceeds of the Series
1996-A Bonds are being used to finance the cost of land and such
property; and all expenditures for and all Costs of the Project
will be charged to a capital account for Federal income tax
purposes, or would be so chargeable either with a proper election
or but for a proper election to deduct. In estimating the Costs
of the Project, no amount has been included which, under the
Federal income tax laws, was or will be deductible by the Company
in the year in which it was paid or incurred other than through
an allowance for depreciation. No portion of the proceeds from
the sale of the Series 1996-A Bonds will be used to provide
working capital or to finance inventory, within the meaning of
Section 144(a) of the Code.
(m) No portion of the proceeds of the Series 1996-A
Bonds is to be used to finance the acquisition of any property
(or an interest therein) other than property the first use of
which is pursuant to such acquisition, and no more than 25% of
the proceeds of the Series 1996-A Bonds will be used to finance
the acquisition of land or any interest therein.
(n) The facilities comprising the Project constitute
and will constitute throughout the terms of this Agreement "solid
waste disposal facilities," within the meaning of Section 142 of
the Code.
(o) The Project will further the public purposes set
forth in the Act, including without limitation increasing
employment opportunities and retaining employment opportunities
in the Village of Hennepin, Illinois.
(p) The operation of the Project and the Premises in
the manner presently contemplated and as described herein does
not and will not conflict in any material respect with any
zoning, water or air pollution or other ordinance, order, law or
regulation applicable to the Project on the Premises, as the case
may be. The Company has caused the Project to be designed in
accordance with all applicable Federal, State and local laws or
ordinances (including rules and regulations) relating to zoning,
planning, building, safety and environmental quality.
(q) The Company possesses, and agrees to maintain and
obtain in the future, all necessary licenses and permits, or
rights thereto, to operate the Project and the Premises as
presently proposed to be operated; all such licenses, permits or
other approvals required in connection with the acquisition,
construction, installation and operation of the Project and the
operation of the Premises have been duly obtained and are in full
force and effect except for any such licenses, permits or other
approvals which are not yet required and which will be duly
obtained not later than the time required or the failure to
obtain which will not materially and adversely affect the
acquisition, construction, installation and operation of the
Project or the operation of the Premises.
Article III
Acquisition, Construction and Installation
of the Project; Issuance of the Bonds
Section 3.1. Acquisition, Construction and Installation of the
Project; Title. The Company agrees that it will acquire,
construct and install, or complete the acquisition, construction
and installation of, the Project, substantially in accordance
with the plans and specifications therefor prepared by engineers
selected by the Company, including any and all supplements,
amendments and additions (or deletions) thereto (or therefrom),
which plans and specifications shall be made available to the
Issuer, the Trustee and the Bank on request; provided, however,
that such other facilities and property contemplated by such
supplements, amendments and additions (or deletions) to (or from)
the plans and specifications shall not materially impair the
effective use of the Project contemplated by this Agreement.
The Company represents and warrants that it has, or prior to the
Completion Date will have, acquired good and marketable title to
all real estate (or an interest therein) constituting the
Premises to enable the Company to acquire, construct, install and
use the Project as contemplated by this Agreement. The Company
represents and warrants that it has acquired, or will acquire,
good and marketable title to all property constituting the
Project and the Premises in order to enable the Company to use
the Project as contemplated by this Agreement.
Section 3.2. Agreement to Issue Bonds; Application of Bond
Proceeds. In order to provide for the financing of the Project,
the Issuer agrees that it will issue, sell and cause to be
delivered to the purchasers thereof, its Series 1996-A Bonds in
the aggregate principal amount of $8,405,000; and its Series
1996-B Bonds in the aggregate principal amount of $4,595,000;
each series of Bonds bearing interest, maturing, subject to prior
redemption and subject to tender for purchase as set forth in the
Indenture. The Issuer will thereupon lend the proceeds of the
Series 1996-A Bonds to the Company to pay a portion of the Costs
of the Project, and will thereupon lend the proceeds of the
Series 1996-B Bonds to the Company to pay a portion of the Costs
of the Project. The proceeds of the Bonds shall be disbursed as
provided in Section 2.10 of the Indenture.
Section 3.3. Disbursements from the Acquisition and
Construction Fund. The Issuer authorizes and directs the
Trustee, upon compliance with the Indenture, to disburse the
moneys in the Acquisition and Construction Fund to or on behalf
of the Company for the following purposes and, subject to the
provisions of Sections 3.5 and 3.6 hereof and the provisions of
the Tax Exemption Certificate and Agreement, for no other
purposes:
(a) Payment to the Company of such amounts, if any, as
shall be necessary to reimburse the Company in full for all
advances and payments made by it at any time prior to or after
the delivery of the Bonds for expenditures in connection with the
preparation of plans and specifications for the Project
(including any preliminary study or planning of the Project or
any aspect thereof), payment to the Company or its named payees
for costs of the acquisition, construction and installation of
the Project, incurred and expended after December 13, 1994.
(b) Payment or reimbursement of any legal, financial
and accounting fees and expenses (including fees relating to the
Letter of Credit), costs of the execution and filing of any
instruments and the preparation of all other documents in
connection therewith, and payment or reimbursement of all fees,
costs and expenses for the preparation of this Agreement, the
Note, the Indenture, the Letter of Credit Agreement, the Letter
of Credit, the Remarketing Agreement, the Tax Exemption
Certificate and Agreement and the Bonds.
(c) Payment or reimbursement for labor, services,
materials and supplies used or furnished in the acquisition,
construction and installation of the Project, all as provided in
the plans, specifications and work orders therefor, payment or
reimbursement for the cost of the construction, acquisition and
installation of utility services or other facilities and the
acquisition and installation of all personal property deemed
necessary in connection with the Project and payment or
reimbursement for the miscellaneous capital expenditures
incidental to any of the foregoing items.
(d) Payment or reimbursement of the fees, if any, for
architectural, engineering, legal, investment banking and
supervisory services with respect to the Project.
(e) To the extent not paid by a contractor for
construction with respect to any part of the Project, payment or
reimbursement of the premiums on all insurance required to be
taken out and maintained during the Acquisition and Construction
Period, if any.
(f) Payment of the taxes, assessments and other
charges, if any, that may become payable during the Acquisition
and Construction Period with respect to the Project, or
reimbursement thereof if paid by the Company.
(g) Payment or reimbursement of expenses incurred in
seeking to enforce any remedy against any supplier, conveyor,
grantor, contractor or subcontractor in respect of any default
under a contract relating to the Project.
(h) Payment of the interest on the Bonds during the
Acquisition and Construction Period.
(i) Payment of any other costs permitted by the Act.
(j) All moneys remaining in the Acquisition and
Construction Fund after the Completion Date and after payment or
provision for payment of all other items provided for in the
preceding subsections (a) through (i), inclusive, of this Section
3.3, shall at the direction of the Company be used in accordance
with Section 3.4 of this Agreement.
Notwithstanding the foregoing, in no event shall the Costs of
Issuance financed with the proceeds of the Series 1996-A Bonds
exceed $168,100 (2% of the face amount of the Series 1996-A
Bonds).
Except as otherwise provided in the Tax Exemption Certificate and
Agreement, each of the payments referred to in this Section 3.3,
other than those payments referred to in subsection (j) above,
shall be made upon receipt by the Trustee of a written
requisition signed by the Authorized Company Representative, and
approved in writing by the Bank, stating with respect to each
payment to be made: (i) the requisition number, (ii) the name
and address of the person, firm or corporation to whom payment is
due, (iii) the amount to be paid, (iv) that each obligation
mentioned therein has been properly incurred, is a proper charge
against the Acquisition and Construction Fund and has not been
the basis of any previous withdrawal, (v) if such payment is for
Costs of Issuance, that such payment, together with all other
payments of Costs of Issuance paid for out of Series 1996-A Bond
proceeds, does not exceed $168,100, and (vi) that the amount
remaining in the Acquisition and Construction Fund after the
withdrawal in question is made, the reasonable estimate of
investment income thereon, plus funds of the Company available
for such purpose will, after payment of the amounts then
requested, be sufficient to pay the cost of completing the
Project. Each such requisition shall be in substantially the
same form as Exhibit D attached to and made a part of this
Agreement. The Trustee may further require that disbursements
from the Acquisition and Construction Fund shall be effectuated
through a construction escrow account on terms commonly employed
with respect to construction projects in the State, or through a
system of lien waiver examinations, established with Chicago
Title Insurance Company. The terms of said construction escrow
account or said lien waiver examinations may require that
disbursements will be made therefrom only upon issuance by said
title insurance company of an interim mechanic's lien endorsement
to the title policy referred to in the Letter of Credit
Agreement, covering each disbursement. The Company hereby agrees
to pay any cost involved in effecting such disbursements through
such construction escrow account or said lien waiver
examinations.
Section 3.4. Establishment of Completion Date; Obligation of
Company to Complete. The Completion Date shall be evidenced to
the Trustee and the Bank by a certificate signed by the
Authorized Company Representative, stating the Costs of the
Project and stating that (i) the acquisition, construction and
installation of the Project has been completed substantially in
accordance with the plans, specifications and work orders
therefor and all labor, services, materials and supplies used in
such acquisition, construction and installation have been paid
for, and (ii) all other facilities necessary in connection with
the Project have been acquired, constructed and installed in
accordance with the plans, specifications and work orders
therefor, and all costs and expenses incurred in connection
therewith (other than costs and expenses for which the Company
has withheld payment) have been paid. If the Company withholds
the payment of any such cost or expense of the Project, the
certificate shall state the amount of such withholding and the
reason therefor. Notwithstanding the foregoing, such certificate
may 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. It shall be the duty
of the Company to cause such certificate to be furnished to the
Trustee and the Bank promptly after the Project shall have been
completed.
Within ten (10) days of the delivery by the Authorized Company
Representative of the certificate evidencing the Completion Date,
the Trustee shall retain in the Acquisition and Construction Fund
a sum equal to the amounts necessary for payment of Costs of the
Project not then due and payable or the liability for which the
Company is contesting as set forth in said certificate. Any
amount not to be retained in the Acquisition and Construction
Fund for such costs, and all amounts so retained but not
subsequently used and for which notice of such failure of use has
been given by the Company to the Trustee, shall be segregated by
the Trustee and used by the Trustee, at the direction of the
Authorized Company Representative, (a) to redeem Series 1996-A
Bonds prior to maturity on the earliest redemption date permitted
by the Indenture for which no premium or penalty pertains, or, at
the option of the Company, at an earlier redemption date, (b) to
purchase Series 1996-A Bonds on the open market prior to such
redemption date (provided, that, if Series 1996-A Bonds are
purchased in an amount in excess of the principal amount thereof,
the Company shall pay such excess out of other funds) for the
purpose of cancellation, or (c) for any other purpose, provided,
that the Trustee is furnished with a written approval of the Bank
and an opinion of Bond Counsel to the effect that such use is
lawful under the Act and will not adversely affect the exclusion
of interest on any of the Series 1996-A Bonds from gross income
of the owners thereof for Federal income tax purposes. Until
used for one or more of the foregoing purposes, such segregated
amount may be invested as permitted by Section 3.5 hereof, but
may not be invested, without an opinion of Bond Counsel to the
effect that such investment will not adversely affect the
exclusion of interest on any of the Series 1996-A Bonds from
gross income of the owners thereof for Federal income tax
purposes, to produce a yield on such amount (computed from the
Completion Date and taking into account any investment of such
amount from the Completion Date) greater than the yield on the
Series 1996-A Bonds, computed in accordance with the applicable
provisions of the Code and the Regulations. The Issuer agrees to
cooperate with the Trustee and take all required action necessary
to redeem the Series 1996-A Bonds or to accomplish any other
purpose contemplated by this Section 3.4. Notwithstanding the
foregoing to the contrary, to the extent that Revenue Procedure
79-5, as supplemented by Revenue Procedure 81-22, of the Internal
Revenue Service is applicable to the Series 1996-A Bonds, the
Company agrees to comply with such Revenue Procedures.
In the event the moneys in the Acquisition and Construction Fund
available for payment of the Costs of the Project should not be
sufficient to pay the costs thereof in full, the Company agrees
to pay directly the costs of completing the Project as may be in
excess of the moneys available therefor in the Acquisition and
Construction Fund. The Issuer does not make any warranty, either
express or implied, that the moneys which will be paid into the
Acquisition and Construction Fund and which, under the provisions
of this Agreement, will be available for payment of a portion of
the Costs of the Project, will be sufficient to pay all the costs
which will be incurred in that connection. The Company agrees
that if after exhaustion of the moneys in the Acquisition and
Construction Fund the Company should pay any portion of the Costs
of the Project pursuant to the provisions of this Section 3.4, it
shall not be entitled to any reimbursement therefor from the
Issuer, the Trustee or the Bank, nor shall it be entitled to any
diminution of the amounts payable under Section 4.2 hereof or
under the Note.
Section 3.5. Investment of Moneys in the Acquisition and
Construction Fund, the Bond Fund and the Bond Purchase Fund. Any
moneys held as part of the Acquisition and Construction Fund
shall be invested or reinvested by the Trustee, upon the oral
direction of the Authorized Company Representative, promptly
confirmed in writing, as provided in Article VII of the
Indenture, to the extent permitted by law, in Investment
Obligations, and if no direction is given, the Trustee shall
invest moneys on deposit in the Acquisition and Construction Fund
in obligations described in clause (iv) of the definition of
Investment Obligations. Any moneys held as a part of the Bond
Fund shall be invested or reinvested by the Trustee upon the oral
direction of the Authorized Company Representative, promptly
confirmed in writing, as provided in Article VII of the
Indenture, to the extent permitted by law, in Governmental
Obligations. Any such securities may be purchased at the
offering or market price thereof at the time of such purchase.
The Trustee may make any and all such investments through its own
bond department.
The investments so purchased shall be held by the Trustee and
shall be deemed at all times a part of the Acquisition and
Construction Fund or the Bond Fund, as the case may be, and the
interest accruing thereon and any profit realized therefrom shall
be credited to such fund and any net losses resulting from such
investment shall be charged to such fund and paid by the Company.
Although the Company recognizes that it may obtain a broker
confirmation or written statement containing comparable
information at no additional costs, the Company hereby agrees
that confirmations of investments made by the Trustee pursuant to
Article VII of the Indenture are not required to be issued by the
Trustee for each month in which a monthly statement is rendered.
No such statement need be rendered pursuant to the provisions
hereof or of the Indenture if no activity occurred in the fund
during such preceding month.
Any moneys held as part of the Bond Purchase Fund shall not be
invested.
Section 3.6. Special Arbitrage Certifications and Covenants.
The Issuer and the Company covenant and agree that so long as any
Series 1996-A Bonds shall remain outstanding, moneys on deposit
in any fund or account in connection with the Series 1996-A Bonds
(whether or not such moneys were derived from the proceeds of the
Series 1996-A Bonds or from any other source) will not be used in
any manner which would cause the Series 1996-A Bonds to be
classified as "arbitrage bonds," within the meaning of Section
148 of the Code and the applicable Regulations, and further
jointly and severally covenant and agree to comply with the
requirements of the Tax Exemption Certificate and Agreement and
of said Section 148 and the Regulations and to execute such
certificates as may be necessary to evidence such compliance. To
the extent of any inconsistency between the Tax Exemption
Certificate and Agreement and this Agreement, the Tax Exemption
Certificate and Agreement shall control.
The Issuer hereby authorizes and directs the Company to cause the
Trustee to transfer moneys in the Acquisition and Construction
Fund to the Rebate Fund to the extent required under the Tax
Exemption Certificate and Agreement.
Article IV
Repayment Provisions
Section 4.1. Bond Proceeds. The Issuer covenants and agrees,
upon the terms and conditions of this Agreement, to lend the
proceeds received from the sale of the Bonds to the Company in
order to finance the Costs of the Project. Pursuant to said
covenant and agreement, the Issuer will issue the Bonds upon the
terms and conditions contained in the Indenture and this
Agreement, and will lend the proceeds of the Bonds to the Company
by causing the Bond proceeds to be applied as provided in Section
2.10 of the Indenture and Article III of this Agreement. Such
proceeds shall be disbursed by the Trustee to or on behalf of the
Company as provided in Section 3.3 of this Agreement.
Section 4.2. Repayment of the Loan and Payment of Other Amounts
Payable. (a) As evidence of its obligation to repay the loan
made hereunder by the Issuer, the Company will initially issue
its Note in the principal amount of $13,000,000, payable as to
principal as set forth in the Note. The Note shall be dated the
date of issuance and delivery of the Bonds, shall mature on
December 1, 2021, except as the provisions hereinafter set forth
with respect to prepayment may become applicable to the Note.
The principal of the Note shall bear interest on the unpaid
respective portions of the principal amount thereof corresponding
to the respective principal amounts of the Series 1996-A Bonds
and the Series 1996-B Bonds from time to time outstanding from
the date of the Note at such rates equal to the interest rates
from time to time borne by the respective series of Bonds,
calculated on the same basis and to be paid on the same dates as
interest on the Bonds is calculated and paid from time to time.
The Note shall be subject to prepayment as herein provided.
Payments of principal of, premium, if any, and interest on the
Note shall be made in lawful money of the United States of
America in Federal or other immediately available funds at the
principal corporate trust office of the Trustee. The Note shall
be in substantially the same form as Exhibit B attached to and
made a part of this Agreement. The Issuer and the Company agree
that the Note shall be payable to the Issuer, and shall be
endorsed and pledged by the Issuer to the Trustee. The Company
covenants and agrees that the payments of principal of, premium,
if any, and interest on the Note shall at all times be sufficient
to enable the Issuer to pay when due the principal of, premium,
if any, and interest on the Bonds; provided, that the Excess
Amount (as hereinafter defined) held by the Trustee in the Bond
Fund on a payment date shall be credited against the payment due
on such date; and provided further, that, subject to the
provisions of the immediately following sentence, if at any time
the amount held by the Trustee in the Bond Fund should be
sufficient (and remain sufficient) to pay on the dates required
the principal of, premium, if any, and interest on the Bonds then
remaining unpaid, the Company shall not be obligated to make any
further payments under the provisions of this Section 4.2(a) or
on the Note. Notwithstanding the provisions of the preceding
sentence, if on any date the Excess Amount held by the Trustee in
the Bond Fund is insufficient to make the then required payments
of principal (whether at maturity or upon redemption prior to
maturity or acceleration), premium, if any, and interest on the
Bonds on such date, the Company shall forthwith pay such
deficiency. The term "Excess Amount" as of any interest payment
date shall mean the amount in the Bond Fund on such date in
excess of the amount required for the payment of the principal of
the Bonds which theretofore have matured at maturity or on a date
fixed for redemption and premium, if any, on such Bonds in all
cases where Bonds have not been presented for payment and paid,
or for the payment of interest which has theretofore come due in
all cases where interest checks have not been presented for
payment and paid.
If the Company shall fail to pay any installment of principal of,
premium, if any, or interest on the Note or under this Section
4.2(a), the installment so in default shall continue as an
obligation of the Company until the amount so in default shall
have been fully paid, and the Company agrees to pay the same with
interest thereon until paid (to the extent legally enforceable)
at a rate equal to the rate borne by the Bonds from time to time
from the due date thereof until paid.
(b) The Company also agrees to pay the reasonable expenses
of the Issuer incurred in fulfilling its obligations under this
Agreement, the Indenture, the Remarketing Agreement and the Tax
Exemption Certificate and Agreement.
(c) The Company also agrees to pay to the Trustee (i) the
initial acceptance fee of the Trustee and the costs and expenses,
including reasonable attorneys' fees and expenses incurred by the
Trustee in entering into and executing the Indenture and the Tax
Exemption Certificate and Agreement, and (ii) during the term of
this Agreement (A) an amount equal to the annual fee of the
Trustee for the ordinary services of the Trustee, as trustee,
rendered and its ordinary expenses incurred under the Indenture
and the Tax Exemption Certificate and Agreement, including
attorneys' fees and expenses, as and when the same become due,
(B) the reasonable fees, charges and expenses of the Trustee, as
and when the same become due, and (C) the reasonable fees,
charges and expenses of the Trustee for the necessary
extraordinary services rendered by it and extraordinary expenses
incurred by it under the Indenture and the Tax Exemption
Certificate and Agreement, including attorneys' fees and
expenses, as and when the same become due.
(d) The Company also agrees to pay all reasonable fees,
charges and expenses of the Remarketing Agent as set forth in the
Remarketing Agreement in carrying out its duties and obligations
and performing its services under and pursuant to the Indenture
and the Remarketing Agreement.
(e) In addition to the payments required to be made by the
Company pursuant to the foregoing subsections of this Section 4.2
and the Note, the Company hereby agrees to pay to the Trustee
amounts sufficient to pay the purchase price of any Bonds to be
purchased pursuant to Section 4.1 or Section 4.2 of the
Indenture, on the purchase date of such Bonds as set forth in
said Section 4.1 or said Section 4.2, as the case may be. All
such payments shall be made to the Trustee in lawful money of the
United States of America in Federal or other immediately
available funds at the principal corporate trust office of the
Trustee. Except as required by this Section 4.2(e), so long as a
Letter of Credit is in effect, the Company will not, directly or
indirectly, purchase any Bonds, except Bonds that bear interest
at a Fixed Rate, with any moneys that do not constitute Available
Moneys.
(f) In the event that the Trustee is authorized and
directed to draw moneys under the Letter of Credit in accordance
with the provisions of the Indenture to the extent necessary to
pay the principal of and interest on the Bonds and the purchase
price of Bonds tendered or deemed to be tendered to the Trustee
for purchase if and when due, any moneys derived from a drawing
under the Letter of Credit shall constitute a credit against the
obligation of the Company to make corresponding payments on the
Note and under subsections (a) and (e) of this Section 4.2.
(g) If the date when any of the payments required to be
made by this Section 4.2 is not a Business Day, then such
payments may be made on the next Business Day with the same force
and effect as if made on the nominal due date, and no interest
shall accrue for the current interest payment period after such
date, but shall accrue for the next interest payment period and
shall be payable on the next interest payment date.
(h) The Company shall have, and is hereby granted, the
option to elect to convert the interest rate borne by the Series
1996-A Bonds and the Series 1996-B Bonds from the Weekly Rate,
the Monthly Rate or the Adjustable Rate to the Weekly Rate, the
Monthly Rate, the Adjustable Rate or the Fixed Rate, as the case
may be, pursuant to the provisions of Section 2.2 of the
Indenture, subject to the terms and conditions set forth in
Section 2.2 of the Indenture.
Section 4.3. No Defense or Set-Off - Unconditional Obligation.
The obligations of the Company to make the payments required in
Section 4.2 hereof and pursuant to the Note and to perform and
observe the other agreements on its part contained herein shall
be absolute and unconditional, irrespective of any defense or any
rights of set-off, recoupment or counterclaim it might otherwise
have against the Issuer or the Trustee. The Company shall pay
net during the term of this Agreement the payments to be made on
account of the loan as prescribed in Section 4.2 hereof and all
other payments required hereunder free of any deductions and
without abatement, diminution or set-off, other than those herein
expressly provided. Until such time as the principal of,
premium, if any, and interest on the Note and the Bonds shall
have been fully paid, or provision for the payment thereof shall
have been made in accordance with the Indenture, the Company:
(i) will not suspend or discontinue any payments provided for in
Section 4.2 hereof or the Note; (ii) will perform and observe all
of its covenants and agreements contained in this Agreement; and
(iii) will not terminate this Agreement for any cause, including,
without limiting the generality of the foregoing, the occurrence
of any acts or circumstances that may constitute failure of
consideration, destruction of or damage to the Project or the
Premises, commercial frustration of purpose, any change in the
tax laws of the United States of America or the State or any
political subdivision thereof, or any failure of the Issuer, the
Trustee or the Bank to perform and observe any agreement, whether
express or implied, or any duty, liability or obligation arising
out of or connected with this Agreement, except to the extent
permitted by this Agreement.
Section 4.4. Assignment and Pledge of Issuer's Rights. As
security for the payment of its Bonds, the Issuer will assign and
pledge to the Trustee all right, title and interest of the Issuer
in and to this Agreement and the Note, including the right to
receive payments hereunder and thereunder (except the right to
receive payments, if any, under Sections 4.2(b), 5.3 and 6.3
hereof and the rights to make determinations and receive notices
as herein provided), and hereby directs the Company to make said
payments directly to the Trustee. The Company herewith assents
to such assignment and pledge and will make payments directly to
the Trustee without defense or set-off by reason of any dispute
between the Company and the Issuer, the Trustee or the Bank.
Article V
Special Covenants and Agreements
Section 5.1. Issuer's and Trustee's Right of Access to the
Project and the Premises. The Company agrees that during the
term of this Agreement the Issuer, the Trustee, the Bank and
their duly authorized agents shall have the right during regular
business hours, with reasonable notice, to enter upon and to
examine and inspect the Project and the Premises. The Company
agrees that the Issuer, the Trustee, the Bank and their duly
authorized agents shall have, subject to such limitations,
restrictions and requirements as the Company may reasonably
prescribe, including but not limited to the standard visitor
agreement of the Company, such rights of access to the Project
and the Premises.
Section 5.2. Company to Maintain Its Corporate Existence;
Conditions under Which Exceptions Permitted. The Company agrees
that during the term of this Agreement and so long as any Bond is
Outstanding, it will maintain its corporate existence, will not
dissolve or otherwise dispose of all or substantially all of its
assets, and will not consolidate with or merge into another
corporation or permit one or more corporations to consolidate
with or merge into it; provided, that the Company may, without
violating the agreements contained in this Section 5.2,
consolidate with or merge into another domestic corporation
(i.e., a corporation incorporated and existing under the laws of
the United States of America or any state, district or territory
thereof) or permit one or more other domestic corporations to
consolidate with or merge into it, or sell or otherwise transfer
to another domestic corporation all or substantially all of its
assets as an entirety and thereafter dissolve; provided, that in
the event the Company is not the surviving, resulting or
transferee corporation, as the case may be, that the surviving,
resulting or transferee corporation (i) is a domestic corporation
as aforesaid; (ii) is qualified to do business in the State;
(iii) assumes in writing all of the obligations of the Company
under this Agreement, the Note and the Tax Exemption Certificate
and Agreement; and (iv) has a "Consolidated Tangible Net Worth"
(after giving effect to such merger, consolidation or transfer)
of not less than the Consolidated Tangible Net Worth of the
Company immediately prior to such merger, consolidation or
transfer. The term "Consolidated Tangible Net Worth," as used in
this Section 5.2, shall mean the difference obtained by
subtracting total consolidated liabilities of the Company and its
consolidated subsidiaries, from total consolidated assets of the
Company and its consolidated subsidiaries, less the aggregate
amount of any intangible assets, including, without limitation,
good will, franchises, licenses, patents, trademarks, trade
names, copyrights, service marks and brand names.
Section 5.3. Release and Indemnification Covenants. The
Company hereby releases the Issuer and the Trustee from, and
hereby covenants and agrees that it will pay, and will protect,
indemnify and save the Issuer, the Trustee and their respective
members, officers, employees, agents and persons who "control"
the Issuer or the Trustee, as that term is defined in Section 15
of the Securities Act of 1933, as amended (the "Indemnified
Parties"), harmless from and against, any and all liabilities,
losses, damages, costs and expenses (including reasonable
attorneys' fees and expenses of the Company and the Indemnified
Parties), causes of action, suits, claims, demands and judgments
of whatsoever kind and nature (including those arising or
resulting from any injury to or death of any person or damage to
property) arising from or in any manner directly or indirectly
growing out of or connected with the following:
(1) The use, non-use, condition or occupancy of the
properties of the Company, including without limitation the
Project and the Premises, any repairs, construction, alterations,
renovation, relocation, remodeling and equipping thereof or
thereto or the condition of the properties of the Company,
including without limitation the Project and the Premises,
including adjoining sidewalks, streets or alleys and any
equipment or facilities at any time located on its properties,
including without limitation the Project, or used in connection
therewith which are not the result of the negligence of the
Indemnified Parties;
(2) violation by the Company of any agreement,
warranty, covenant or condition of this Agreement or any other
agreement executed in connection with the Bonds or the Project;
(3) violation of any contract, agreement or
restriction by the Company relating to its properties, including
without limitation the Project and the Premises;
(4) violation of any law, ordinance, regulation or
court order affecting the properties of the Company, including
without limitation the Project and the Premises, or the
ownership, occupancy or use thereof;
(5) any written statement or information (other than
statements or information provided by the Issuer) furnished to
the Issuer or the purchasers of any Bonds, including, but not
limited to, any offering circular relating to any of the Bonds,
that is untrue or incorrect in any material respect, and any
omission from such information of any statement or information
which should be contained therein for the purpose for which the
same is to be used or which is necessary to make the statements
therein not misleading in any material respect; and
(6) the presence on or in, or the escape, seepage,
leakage, spillage, discharge, emission or release from, the
properties of the Company, including without limitation the
Project and the Premises, of any hazardous or toxic waste,
substance or constituent, or other substance.
In the event of the settlement of any litigation commenced or
threatened, such indemnity shall be limited to the aggregate
amount paid under a settlement effected with the written consent
of the Company.
The Indemnified Parties shall promptly notify the Company in
writing of any claim or action covered by this indemnity and
brought against the Indemnified Parties, or in respect of which
indemnity may be sought against the Company, setting forth the
particulars of such claim or action, and the Company will assume
the defense thereof, including the employment of counsel
reasonably satisfactory to the Indemnified Parties and the
payment of all expenses. The Indemnified Parties may employ
separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall
not be payable by the Company unless such employment has been
specifically authorized by the Company.
Section 5.4. Records and Financial Statements of Company. The
Issuer and the Trustee shall be permitted during regular business
hours during the term of this Agreement to examine the books and
records of the Company.
The Company agrees to furnish the Issuer and the Trustee within
one hundred twenty (120) days after the close of each fiscal year
of the Company, with the financial statements of the Company,
showing the financial position of the Company at the close of
each such fiscal year and the results of the operations of the
Company for each such fiscal year, audited by an independent
certified public accountant selected by the Company for such
fiscal year. The Company further agrees to furnish the Issuer
and the Trustee within thirty (30) days of the close of each
quarter of each fiscal year of the Company (other than the fourth
quarter of each such fiscal year), with the financial statements
of the Company, showing the financial position of the Company at
the close of each such quarter (including year to date
information) and the results of operations of the Company for
each such quarter, signed by the President, any Vice President or
the Treasurer of the Company.
The Company further agrees to furnish the Issuer and the Trustee
with such other financial statements and information concerning
the Company as the Issuer or the Trustee may reasonably require.
The Company further agrees to furnish the Trustee within ninety
(90) days after the close of each fiscal year of the Company or
within thirty (30) days after written request from the Trustee
with a certificate of the Company, signed by the President, any
Vice President or the Treasurer of the Company, to the effect
that the signer thereof has re-examined the provisions of this
Agreement, and at the date of said certificate has no knowledge
of any default or Event of Default hereunder (or, if the signer
has knowledge of any such default or Event of Default, he shall
disclose in such certificate the nature thereof). The Company
further agrees to furnish the Trustee promptly after knowledge
thereof shall have come to the attention of any responsible
officer of the Company or of a partner thereof, written notice of
any threatened or pending litigation or governmental proceeding
against the Company which would materially adversely affect the
business and properties of the Company and written notice of the
occurrence of any default or Event of Default under this
Agreement.
Section 5.5. Tax-Exempt Status. The Company covenants with the
Issuer and for and on behalf of the purchasers and owners of the
Series 1996-A Bonds from time to time outstanding that so long as
any of the Series 1996-A Bonds remain outstanding, moneys on
deposit in any fund in connection with the Series 1996-A Bonds,
whether or not such moneys were derived from the proceeds of the
sale of the Series 1996-A Bonds or from any other sources, will
not be used in a manner which will cause the Series 1996-A Bonds
to be "arbitrage bonds," within the meaning of Section 148 of the
Code, and any lawful Regulations promulgated thereunder, as the
same exist on this date, or may from time to time hereafter be
amended, supplemented or revised. The Company also covenants for
the benefit of the owners of the Series 1996-A Bonds to comply
with all of the provisions of the Tax Exemption Certificate and
Agreement. The Company reserves the right, however, to make any
investment of such moneys permitted by State law, if, when and to
the extent that said Section 148 or the Regulations promulgated
thereunder shall be repealed or relaxed or shall be held void by
final judgment of a court of competent jurisdiction, but only
upon receipt of an opinion of Bond Counsel with respect to such
investment that such investment will not affect the exclusion of
the interest on the Series 1996-A Bonds from gross income of the
owners thereof for Federal income tax purposes.
Neither the Issuer nor the Company shall cause any proceeds of
the Series 1996-A Bonds to be expended except pursuant to the
Indenture. The Company shall not (1) requisition or otherwise
allow any payment out of proceeds of the Series 1996-A Bonds (i)
if such payment is to be used for the acquisition of any property
(or an interest therein) unless the first use of such property is
pursuant to such acquisition, provided that this clause (i) shall
not apply to any building (and the equipment purchased as a part
thereof, if any) if the "rehabilitation expenditures", as defined
in Section 147(d) of the Code, with respect to the building equal
or exceed 15% of the portion of the cost of acquiring the
building (including such equipment) financed with the proceeds of
the Series 1996-A Bonds, (ii) if as a result of such payment, 25%
or more of the proceeds of the Series 1996-A Bonds would be
considered as having been used directly or indirectly for the
acquisition of land (or an interest therein), (iii) if, as a
result of such payment, less than 95% of the net proceeds of the
Series 1996-A Bonds, expended at the time of such requisition
would be considered as having been used for costs of the
acquisition, construction, reconstruction or improvement of land
or property of a character subject to the allowance for
depreciation within the meaning of Section 142 of the Code for
use as a "solid waste disposal facility" within the meaning of
Section 142 of the Code, or (iv) if such payment is used to pay
issuance costs (including attorneys' fees and placement fees) in
excess of an amount equal to two percent (2%) of the principal
amount of the Series 1996-A Bonds; (2) take or omit, or permit to
be taken or omitted, any other action with respect to the use of
such proceeds the taking or omission of which would result in the
loss of exclusion of interest on the Series 1996-A Bonds from
gross income for purposes of Federal income taxation; or (3) take
or omit, or permit to be taken or omitted, any other action, the
taking or omission of which would cause the loss of such
exclusion. Without limiting the generality of the foregoing, the
Company shall not permit the proceeds of the Series 1996-A Bonds
to be used directly for the acquisition of land (or an interest
therein).
The Series 1996-A Bonds and any other obligation constituting a
private activity bond under Section 141(a) of the Code will not
be sold (A) within fifteen (15) days prior to the issuance of the
Series 1996-A Bonds or within fifteen (15) days after the
issuance of the Series 1996-A Bonds, and (B) are reasonably
expected to be paid out of substantially the same source of funds
as the Series 1996-A Bonds.
Section 5.6. Insurance. The Company agrees to maintain
insurance with respect to the Project and the Premises with good
and responsible insurance companies against such hazards and
risks as are insured by companies similarly situated and
operating like properties.
Section 5.7. Maintenance and Repair. The Company agrees that it
will maintain the Project and the Premises in good repair,
working order and operating condition, making from time to time
all needful and proper repairs thereto, renewals and replacements
thereof, so that at all times the efficiency thereof shall be
fully preserved and maintained.
Section 5.8. Qualification in State. The Company agrees that
throughout the term of this Agreement, it will be qualified to do
business in the State.
Section 5.9. Letter of Credit. (a) On or prior to the issuance,
sale and delivery of the Bonds to the purchaser or purchasers
thereof pursuant to Section 2.6 of the Indenture, the Company
hereby covenants and agrees to obtain and deliver to the Trustee
the initial, irrevocable, transferable Letter of Credit to be
issued by the Bank in favor of the Trustee for the benefit of the
owners from time to time of the Bonds, in substantially the same
form as Exhibit A attached to the Letter of Credit Agreement.
The initial Letter of Credit shall be dated the date of issuance
and delivery of the Bonds; shall expire on December 15, 2001,
unless otherwise extended in accordance with the terms and
provisions of subsection (b) below and the Letter of Credit
Agreement; shall be in the amount of (i) the aggregate principal
amount of the Bonds (A) to enable the Trustee to pay the
principal of the Bonds at maturity, upon redemption prior to
maturity or acceleration, and (B) to enable the Trustee to pay
the portion of the purchase price of Bonds tendered or deemed to
be tendered to the Trustee for purchase, equal to the aggregate
principal amount of such Bonds, plus (ii) an amount equal to the
interest to accrue on the Bonds for thirty-five (35) days at a
maximum rate of twelve percent (12%) per annum (A) to enable the
Trustee to pay interest accrued on the Bonds on the dates and in
the manner set forth in the Indenture, and (B) to enable the
Trustee to pay the portion of the purchase price of Bonds
tendered or deemed to be tendered to the Trustee for purchase,
equal to the accrued interest on such Bonds.
(b) Except as hereinafter provided, at any time prior to
the fifteenth Business Day prior to the interest payment date on
the Bonds immediately preceding the Stated Termination Date of
the Letter of Credit, the Company may, at its option but is not
required to, provide for the extension of the term of the Letter
of Credit or deliver to the Trustee a substitute Letter of Credit
as hereinafter provided. If the Company chooses to extend the
term of the Letter of Credit, then such extension shall be to the
fifteenth day of any calendar month at least one (1) year after
the Stated Termination Date of the existing Letter of Credit, and
(unless the Letter of Credit by its terms provides for an
extension of its term automatically unless the Trustee is
notified to the contrary) the Company shall furnish proof of such
extension, in the form of an amendment to the Letter of Credit
evidencing such extension, to the Trustee no later than the
fifteenth Business Day prior to the interest payment date on the
Bonds immediately preceding the Stated Termination Date of the
Letter of Credit. In the event that the Letter of Credit by its
terms provides for an extension of its term automatically unless
the Trustee is notified to the contrary, such extensions shall be
consistent with the terms and provisions set forth above, but it
shall not be necessary to furnish such proof or amendment. If
the Company chooses to provide a substitute Letter of Credit,
such substitute Letter of Credit shall be an irrevocable letter
of credit in substantially the same form and tenor as the initial
Letter of Credit, in an amount equal to the outstanding principal
amount of the Bonds plus an amount equal to the maximum interest
to accrue on the Bonds then Outstanding for thirty-five (35) days
at a maximum rate of twelve percent (12%) per annum, with
administrative provisions reasonably satisfactory to the Trustee,
but provided to expire on the fifteenth day of any calendar month
at least one (1) year after the Stated Termination Date of the
existing Letter of Credit, such substitute Letter of Credit to be
issued by a commercial bank and delivered to the Trustee on or
before the fifteenth Business Day prior to the interest payment
date on the Bonds immediately preceding the Stated Termination
Date of the Letter of Credit; provided, that simultaneously with
the delivery of any such substitute Letter of Credit to the
Trustee, the Company shall have provided the Trustee with written
evidence from the Bank which issued the existing Letter of Credit
that the Company shall have paid all of its obligations under the
related Letter of Credit Agreement to such Bank (other than any
obligations with respect to reimbursement for drawings under the
Letter of Credit to purchase Bonds tendered or deemed to be
tendered to the Trustee for purchase pursuant to Section 4.1 or
Section 4.2 of the Indenture, which obligations are not yet due
and owing under the Letter of Credit Agreement) and shall have
paid all other amounts due and owing under the Letter of Credit
Agreement pursuant to which the existing Letter of Credit was
issued (except as aforesaid). Simultaneously with the delivery
of such substitute Letter of Credit to the Trustee, the Company
shall also provide the Trustee with an opinion of Bond Counsel
that such substitute Letter of Credit is authorized under this
Agreement, complies with the terms hereof, and will not have an
adverse effect on the exclusion of the interest on the Series
1996-A Bonds from gross income of the owners thereof for Federal
income tax purposes. If the Company shall fail to furnish to the
Trustee such written evidence from such Bank and such opinion of
Bond Counsel on or before the specified date, the Trustee shall
be deemed not to have received the substitute Letter of Credit,
and the Bonds shall be subject to mandatory tender for purchase
pursuant to Section 4.2 of the Indenture. Upon delivery of a
substitute Letter of Credit and the foregoing evidence and
opinion, the Trustee is authorized and directed to surrender the
existing Letter of Credit and to approve the cancellation of the
existing Letter of Credit and the termination of the related
Letter of Credit Agreement. Any such substitute Letter of Credit
shall be delivered to the Trustee on the first Business Day of a
calendar month. The Company hereby covenants and agrees to give
the Issuer, the Trustee, the Bank and the Remarketing Agent
written notice of its intention to deliver any such substitute
Letter of Credit at least fifteen (15) Business Days prior to the
date on which the Company expects to deliver such substitute
Letter of Credit.
(c) If the Company elects to exercise its option to cause
the interest rate on the Bonds to be converted to the Adjustable
Rate or the Fixed Rate in accordance with the provisions of
Section 4.2(h) hereof, the Company may, at its option but is not
required to, provide for the delivery to the Trustee of a
substitute Letter of Credit with respect to the Bonds. Such
substitute Letter of Credit shall consist of an irrevocable
letter of credit in the amount of (i) the aggregate principal
amount of each series of Bonds then outstanding to enable the
Trustee to pay the principal of such Bonds at maturity, upon
redemption prior to maturity or acceleration, plus (ii) an amount
equal to three percent (3%) of the aggregate principal amount of
the Bonds then Outstanding to pay premium, plus (iii) an amount
equal to the interest to accrue on such Bonds then outstanding
for 215 days to enable the Trustee to pay interest accrued on
such Bonds as it comes due, set to expire or terminate one
hundred twenty-four (124) days after the conclusion of the
Adjustable Rate Period or one hundred twenty-four (124) days
after the final maturity of such Bonds, and having administrative
provisions satisfactory to the Trustee. If the Company has
elected to deliver such a substitute Letter of Credit to the
Trustee, the Company shall deliver to the Trustee at least
forty-five (45) days prior to the Proposed Conversion Date an
irrevocable commitment of a Bank to issue such substitute Letter
of Credit, and shall deliver such substitute Letter of Credit to
the Trustee on or before the Conversion Date. Simultaneously
with the delivery of such substitute Letter of Credit to the
Trustee, the Company shall also provide the Trustee with an
opinion of Bond Counsel to the effect that such substitute Letter
of Credit is authorized under this Agreement, complies with the
terms hereof and will not have an adverse effect on the exclusion
of the interest on the Series 1996-A Bonds from gross income of
the owners thereof for Federal income tax purposes.
(d) At any time while a Letter of Credit is in effect, the
Company from time to time may, at its option, but is not required
to, deliver to the Trustee a substitute Letter of Credit in
substitution for the existing Letter of Credit. The substitute
Letter of Credit shall be an irrevocable, transferable letter of
credit in substantially the same form and tenor as the existing
Letter of Credit with administrative provisions satisfactory to
the Trustee, provided to expire on the same date as the existing
Letter of Credit or on the fifteenth day of any calendar month at
least one (1) year after the Stated Termination Date of the
existing Letter of Credit, such substitute Letter of Credit to be
issued by a commercial bank and delivered to the Trustee;
provided, that simultaneously with the delivery of any such
substitute Letter of Credit to the Trustee, the Company shall
have provided the Trustee with written evidence from the Bank
which issued the existing Letter of Credit that the Company shall
have paid all of its obligations under the Letter of Credit
Agreement to such Bank (other than any obligations with respect
to reimbursement for drawings under the Letter of Credit to
purchase Bonds tendered or deemed to be tendered to the Trustee
for purchase pursuant to Section 4.1 or Section 4.2 of the
Indenture, which obligations are not yet due and owing under the
Letter of Credit Agreement) and shall have paid all other amounts
due and owing under the Letter of Credit Agreement pursuant to
which the existing Letter of Credit was issued (except as
aforesaid). Simultaneously with the delivery of such substitute
Letter of Credit to the Trustee, the Company shall also provide
the Trustee with an opinion of Bond Counsel that such substitute
Letter of Credit is authorized under this Agreement, complies
with the terms hereof and will not have an adverse effect on the
exclusion of the interest on the Series 1996-A Bonds from gross
income of the owners thereof for Federal income tax purposes. If
the Company shall fail to furnish to the Trustee such written
evidence from such Bank and such opinion of Bond Counsel, the
Trustee shall not be deemed to have received the substitute
Letter of Credit, and shall not surrender the existing Letter of
Credit. Upon delivery of a substitute Letter of Credit and the
foregoing evidence and opinion, the Trustee is authorized and
directed to surrender the existing Letter of Credit. Any such
substitute Letter of Credit shall be delivered to the Trustee on
the first Business Day of a calendar month. The Company hereby
covenants and agrees to give the Issuer, the Trustee, the Bank
and the Remarketing Agent written notice of its intention to
deliver any such substitute Letter of Credit at least fifteen
(15) Business Days prior to the date on which the Company expects
to deliver such substitute Letter of Credit.
(e) The Company may at its option, but is not required to,
provide for the delivery to the Trustee of an Alternate Credit
Facility to supplement the Letter of Credit, to replace the
Letter of Credit or to provide credit enhancement if the Letter
of Credit is not then in effect. Any such Alternate Credit
Facility shall be payable to the Trustee for the benefit of the
owners of the Bonds and shall have administrative provisions
satisfactory to the Trustee. Simultaneously with the delivery of
such an Alternate Credit Facility to the Trustee, the Company
shall provide the Trustee with an opinion of Bond Counsel to the
effect that the delivery of such Alternate Credit Facility is
authorized under this Agreement, complies with the terms hereof
and will not have an adverse effect on the exclusion of the
interest on the Series 1996-A Bonds from gross income of the
owners thereof for Federal income tax purposes. Any such
Alternate Credit Facility shall be delivered to the Trustee on
the first Business Day of a calendar month. The Company hereby
covenants and agrees to give the Issuer, the Trustee, the Bank
and the Remarketing Agent written notice of its intention to
deliver any such Alternate Credit Facility at least fifteen (15)
Business Days prior to the date on which the Company expects to
deliver such Alternate Credit Facility.
(f) In the event that the Letter of Credit is set to expire
and the Company does not intend to deliver a substitute Letter of
Credit to the Trustee, the Company shall, on or before the
fifteenth Business Day prior to the interest payment date
immediately preceding the Stated Termination Date, give written
notice to the Issuer, the Trustee, the Remarketing Agent and the
Bank that the Company does not intend to deliver such a
substitute Letter of Credit to the Trustee prior to the Stated
Termination Date.
(g) Notwithstanding any other provision of this Agreement
or the Indenture to the contrary, upon a Conversion of the
interest rate on the Series 1996-A Bonds to an Adjustable Rate or
a Fixed Rate, no Letter of Credit or Alternate Credit Facility
shall be in effect after the Conversion of such interest rate to
the Adjustable Rate or the Fixed Rate unless the Company delivers
to the Trustee an opinion of Bond Counsel to the effect that such
maintenance of such Letter of Credit or Alternate Credit Facility
will not have an adverse effect on the exclusion of the interest
on the Series 1996-A Bonds from gross income of the owners
thereof for Federal income tax purposes.
Article VI
Events of Default and Remedies
Section 6.1. Events of Default. The occurrence and
continuation of any one of the following shall constitute an
Event of Default hereunder:
(a) failure by the Company to pay any amounts required
to be paid as principal, premium, if any, or interest on the Note
or under this Agreement on the dates and in the manner specified
therein or herein; or
(b) failure by the Company to pay any amounts pursuant
to Section 4.2(e) hereof on the dates and in the manner specified
therein; or
(c) failure by the Company to observe and perform any
covenant, condition or agreement on its part to be observed or
performed in this Agreement, other than as referred to in
subsections (a) and (b) above, for a period of thirty (30) days
after written notice, specifying such failure and requesting that
it be remedied, is given to the Company by the Issuer, the
Trustee or the Bank, unless (i) the Issuer, the Trustee and the
Bank shall agree in writing to an extension of such time prior to
its expiration, or (ii) if the failure is such that it can be
corrected, but not within such 30-day period, corrective action
is instituted by the Company within such period and diligently
pursued until such failure is corrected; provided, that such
failure is corrected within one (1) year; or
(d) the dissolution or liquidation of the Company or
the filing by the Company of a voluntary petition in bankruptcy,
or failure by the Company promptly to lift any execution,
garnishment or attachment of such consequence as will impair its
ability to carry on its obligations hereunder, or an order for
relief under the Federal bankruptcy laws, as amended from time to
time, is entered against the Company, or a petition or answer
proposing the entry of an order for relief against the Company
under the Federal bankruptcy laws, as amended from time to time,
or its reorganization, arrangement or debt readjustment under any
present or future Federal bankruptcy act or any similar Federal
or state law shall be filed in any court and such petition or
answer shall not be discharged within ninety (90) days after the
filing thereof, or the Company shall fail generally to pay its
debts as they become due, or a custodian (including without
limitation a receiver, trustee, assignee for the benefit of
creditors or liquidator of the Company) shall be appointed for or
take possession of all or a substantial part of its property and
shall not be discharged within ninety (90) days after such
appointment or taking possession, or the Company shall consent to
or acquiesce in such appointment or taking possession, or
assignment by the Company for the benefit of its creditors, or
the entry by the Company into an agreement of composition with
its creditors; provided, that the term "dissolution or
liquidation of the Company," as used in this subsection (d),
shall not be construed to include the cessation of the corporate
existence of the Company resulting either from a merger or
consolidation of the Company into or with another domestic
corporation or a dissolution or liquidation of the Company
following a transfer of all or substantially all of its assets as
an entirety, under the conditions permitting such actions
contained in Section 5.2 hereof; or
(e) any warranty, representation or other statement
made by or on behalf of the Company contained herein or in any
document or certificate furnished by the Company in compliance
with or in reference hereto, is false or misleading in any
material respect; or
(f) an "event of default" shall occur and be
continuing under the Indenture.
Section 6.2. Remedies on Default. Whenever any Event of
Default shall have occurred and be continuing hereunder, the
Trustee may take any one or more of the following remedial steps:
(a) The Trustee may exercise any right, power or
remedy permitted to it by law as a holder of the Note, and shall
have in particular, without limiting the generality of the
foregoing, the right to declare the entire principal and all
unpaid interest accrued on the Note to the date of such
declaration and any premium the Company shall have become
obligated to pay to be immediately due and payable, if
concurrently with or prior to such notice the unpaid principal of
and all unpaid accrued interest and premium on the Bonds have
been declared to be due and payable under the Indenture, and upon
such declaration the Note and the unpaid accrued interest thereon
and such premium shall thereupon become forthwith due and payable
in an amount sufficient to pay the principal of, premium, if any,
and interest on the Bonds under Section 9.2 of the Indenture,
without presentment, demand or protest, all of which are hereby
expressly waived. The Company shall forthwith pay to the Trustee
the entire principal of, premium, if any, and interest accrued on
the Note.
The Trustee (or any owner of any Bond) shall waive, rescind and
annul such declaration and the consequences thereof, when any
declaration of acceleration on the Bonds has been waived,
rescinded and annulled pursuant to and in accordance with Section
9.2 of the Indenture.
(b) The Issuer or the Trustee may take whatever action
at law or in equity may appear necessary or desirable to collect
the payments and other amounts then due and thereafter to become
due or to enforce the performance and observance of any
obligation, agreement or covenant of the Company under this
Agreement.
In case the Issuer or the Trustee shall have proceeded to enforce
its rights under this Agreement, and such proceedings shall have
been discontinued or abandoned for any reason or shall have been
determined adversely to the Issuer or the Trustee, as the case
may be, then and in every such case the Company, the Issuer and
the Trustee shall be restored respectively to their several
positions and rights hereunder, and all rights, remedies and
powers of the Company, the Issuer and the Trustee shall continue
as though no such proceeding had been taken.
In case there shall be pending proceedings for the bankruptcy or
for the reorganization of the Company under the Federal
bankruptcy laws or any other applicable law, or in case a
receiver or trustee shall have been appointed for the property of
the Company, or in the case of any other similar judicial
proceedings relative to the Company, or to the creditors or
property of the Company, the Trustee shall be entitled and
empowered, by intervention in such proceedings or otherwise, to
file and prove a claim or claims for the whole amount owing and
unpaid pursuant to this Agreement and the Note 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 Trustee allowed in such judicial
proceedings relative to the Company, its creditors or its
property, 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 Trustee, and to
pay to the Trustee any amount due it for compensation and
expenses, including reasonable counsel fees and expenses incurred
by it up to the date of such distribution.
Section 6.3. Agreement to Pay Attorneys' Fees and Expenses. In
the event the Company should default under any of the provisions
of this Agreement and the Issuer or the Trustee should employ
attorneys or incur other expenses for the collection of the
payments due under this Agreement or the Note or the enforcement
of the performance or observance of any obligation or agreement
on the part of the Company herein contained, the Company agrees
that it will on demand therefor pay to the Issuer or the Trustee
the reasonable fees and expenses of such attorneys and such other
expenses so incurred by the Issuer or the Trustee.
Section 6.4. No Remedy Exclusive. No remedy herein conferred
upon or reserved to the Issuer or the Trustee is intended to be
exclusive of any other available remedy or remedies, but each and
every such remedy shall be cumulative and shall be in addition to
every other remedy given under this Agreement and the Indenture
or now or hereafter existing at law or in equity or by statute.
No delay or omission to exercise any right or power accruing upon
any Event of Default hereunder 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. In order to entitle the Issuer to
exercise any remedy reserved to it in this Article VI, it shall
not be necessary to give any notice, other than such notice as
may be herein expressly required. Such rights and remedies as
are given the Issuer hereunder shall also extend to the Trustee,
and the Trustee and the owners from time to time of the Bonds
shall be deemed third party beneficiaries of all covenants and
agreements herein contained.
Section 6.5. No Additional Waiver Implied by One Waiver. In
the event any agreement contained in this Agreement should be
breached by the Company and thereafter waived by the Issuer or
the Trustee, such waiver shall be limited to the particular
breach so waived and shall not be deemed to waive any other
breach under this Agreement.
Article VII
Prepayment of Note
Section 7.1. Obligation to Prepay the Note upon Determination
of Taxability. Upon the occurrence of a Determination of
Taxability, the Company shall have, and hereby accepts, the
obligation to prepay a sufficient portion of the principal of the
Note in part, on any date within thirty (30) days of the
occurrence of a Determination of Taxability, by paying to the
Trustee an amount sufficient to redeem all of the Series 1996-A
Bonds pursuant to Section 3.1(b) of the Indenture. The amount to
be prepaid pursuant to this Section 7.1 in such event shall be
100% (or 103% during the Adjustable Rate Period or the Fixed Rate
Period) of the then Outstanding principal amount of the Series
1996-A Bonds plus accrued interest to the date fixed for
redemption. So long as the Letter of Credit is in effect, and to
the extent that Available Moneys described in clauses (a) and (b)
of Section 6.4 of the Indenture are not on deposit in the Bond
Fund and available to prepay the principal of, premium, if any,
and accrued interest on the Note payable under this Section 7.1,
the Trustee shall, in accordance with Section 6.4 of the
Indenture, draw upon the Letter of Credit to prepay the principal
of, premium, if any, and accrued interest on the Note payable
under this Section 7.1 in accordance with the terms of the Letter
of Credit.
Section 7.2. General Option to Prepay the Note. The Company
shall have, and is hereby granted, the option to prepay the
principal of the Note as a whole, or in part, by paying to the
Trustee an amount sufficient to redeem all or a portion of the
Bonds then outstanding, in the manner, at the redemption prices
(including premium, if any), from the sources and on the dates
specified in Section 3.1(a) of the Indenture. So long as the
Letter of Credit is in effect, and to the extent that Available
Moneys described in clauses (a) and (b) of Section 6.4 of the
Indenture are not on deposit in the Bond Fund and available to
prepay the principal of and accrued interest on the Note under
this Section 7.2, the Trustee shall, in accordance with Section
6.4 of the Indenture, draw upon the Letter of Credit to prepay
the principal of and accrued interest on the Note payable under
this Section 7.2 in accordance with the terms of the Letter of
Credit.
Section 7.3. Option to Prepay the Note in Extraordinary Events.
The Company shall have, and is hereby granted, the option to
prepay the principal of the Note, on any date, as a whole, and
not in part, at a prepayment price of 100% of the principal
amount of the Note then outstanding, plus accrued interest to the
date fixed for prepayment, within one hundred eighty (180) days
of the occurrence of any of the following:
(a) the Project or the Premises shall have been
damaged or destroyed (in whole or in part) by fire or other
casualty to such extent that, in the opinion of the Company
expressed in a certificate filed with the Issuer and the Trustee,
it is not practicable or desirable to rebuild, repair or restore
the Project or the Premises, as the case may be, within a period
of six (6) consecutive months following such damage or
destruction, or
(b) title to, or the temporary use of, all or
substantially all of the Project or the Premises shall have been
taken under the exercise of the power of eminent domain by any
governmental authority or person, firm or corporation acting
under governmental authority (including such a taking or takings
as results or is likely to result, in the opinion of the Company
expressed in a certificate filed with the Issuer and the Trustee,
in the Company being thereby prevented from carrying on its
normal operations at the Project or the Premises, as the case may
be, for a period of six (6) consecutive months or results or is
likely to result in rendering the Project or the Premises, as the
case may be, unsuitable for use by the Company).
So long as the Letter of Credit is in effect, and to the extent
that Available Moneys described in clauses (a) and (b) of Section
6.4 of the Indenture are not on deposit in the Bond Fund and
available to prepay the principal of and accrued interest on the
Note payable under this Section 7.3, the Trustee shall, in
accordance with Section 6.4 of the Indenture, draw upon the
Letter of Credit to prepay the principal of and accrued interest
on the Note payable under this Section 7.3 in accordance with the
terms of the Letter of Credit.
Section 7.4. Obligation to Prepay the Note with Moneys
Remaining in the Acquisition and Construction Fund. The Company
shall have, and hereby accepts, the obligation to prepay the
principal of the Note in part, on any date within thirty (30)
days after the receipt by the Trustee of a completion certificate
pursuant to Section 3.4 hereof with moneys remaining in the
Acquisition and Construction Fund (other than any moneys withheld
and used to pay Costs of the Project, as set forth in Section 3.4
hereof). For redemption of a portion of the principal of the
Bonds pursuant to Section 3.1(d) of the Indenture, the amount to
be prepaid pursuant to this Section 7.4 in any such event shall
be 100% of the principal amount of the Bonds being redeemed plus
accrued interest to the date fixed for redemption.
Section 7.5. Obligation to Prepay the Note for Mandatory
Sinking Fund Redemptions. The Company shall have, and hereby
accepts, the obligation to prepay the principal of the Note in
part by paying to the Trustee an amount sufficient to redeem the
portion of the Bonds then outstanding and subject to mandatory
sinking fund redemption pursuant to Section 3.1(e) of the
Indenture, in the manner, at the redemption prices from the
sources and on the dates specified in Section 3.1(e) of the
Indenture. So long as the Letter of Credit is in effect, and to
the extent that Available Moneys described in clauses (a) and (b)
of Section 6.4 of the Indenture are not on deposit in the Bond
Fund and available to prepay the principal of and accrued
interest on the Note under this Section 7.5, the Trustee shall,
in accordance with Section 6.4 of the Indenture, draw upon the
Letter of Credit to prepay the principal of and accrued interest
on the Note payable under this Section 7.5 in accordance with the
terms of the Letter of Credit.
Section 7.6. Redemption of the Bonds. To exercise an option
granted to the Company by this Article VII, the Company shall
give written notice to the Issuer, the Trustee and the Bank,
which notice shall specify therein the date upon which prepayment
of the Note (or a portion thereof) will be made, which date shall
be not less than forty-five (45) days from the date the notice is
mailed, except in the case of Section 7.1, Section 7.4 or Section
7.5 hereof, and shall specify that all of the principal amount of
the Note or a specified portion thereof is to be so prepaid. The
Issuer has directed the Trustee to take forthwith all steps
(other than the payment of the money required to redeem the
Bonds) necessary under the applicable provisions of the Indenture
to effect the redemption of the Bonds (or a portion thereof) in
amounts equal to the amount of the principal of the Note so
prepaid as provided in this Article VII.
Article VIII
Financing Statements
The Company will, at its expense, take all necessary action to
maintain and preserve the lien and security interest of the
Indenture so long as any Bond remains outstanding.
The Company will, forthwith after the execution and delivery of
the Indenture and thereafter from time to time, cause any
financing statements in respect of the Indenture to be filed,
registered and recorded in such manner and in such places as may
be required by law in order to publish notice of and fully to
perfect and protect the lien and security interest created
thereby; and from time to time will perform or cause to be
performed any other act as provided by law and will file or cause
to be filed any and all continuation statements and further
instruments that may be required by law to maintain and preserve
the lien and security interest of the Indenture. Except to the
extent it is exempt therefrom, the Company will pay or cause to
be paid all filing, registration and recording fees incident to
such filing, registration and recording, and all expenses
incident to the preparation, execution and acknowledgment of such
instruments of further assurance, and all Federal or State fees
and other similar fees, duties, imposts, assessments and charges
arising out of or in connection with the execution and delivery
of the Indenture, said financing statements and such instruments
of further assurance.
Article IX
Miscellaneous
Section 9.1. Notices. All notices, certificates or other
communications shall be sufficiently given and shall be deemed
given when the same are (i) deposited in the United States mail
and sent by first class mail, postage prepaid, or (ii) delivered,
in each case, to the parties at the addresses set forth below or
at such other address as a party may designate by notice to the
other parties: if to the Issuer, at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chairman; if to the Company, at ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Chief
Financial Officer; if to the Trustee, at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Department;
if to the Bank, at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇; and if to the Remarketing Agent,
at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Municipal Finance Department. A duplicate copy of each notice,
certificate or other communication given hereunder by either the
Issuer or the Company to the other shall also be given to the
Trustee, the Remarketing Agent and the Bank.
Section 9.2. Assignments. This Agreement may not be assigned
by either party without the consent of the other and the Trustee
and the Bank, except that the Issuer shall assign and pledge to
the Trustee its right, title and interest in and to this
Agreement as provided by Section 4.4 of this Agreement, and the
Company may without any consent assign to any surviving,
resulting or transferee corporation its rights under this
Agreement as provided in Section 5.2 of this Agreement.
Section 9.3. Severability. If any provision of this Agreement
shall be held or deemed to be or shall, in fact, be illegal,
inoperative or unenforceable, the same shall not affect any other
provision or provisions herein contained or render the same
invalid, inoperative or unenforceable to any extent whatsoever.
Section 9.4. Execution of Counterparts. This Agreement may be
simultaneously executed in several counterparts, each of which
shall be an original and all of which shall constitute but one
and the same instrument; provided, however, that for purposes of
perfecting a security interest in this Agreement by the Trustee
under Article 9 of the Uniform Commercial Code of the State, only
the counterpart assigned, pledged and delivered to the Trustee
shall be deemed the original.
Section 9.5. Amounts Remaining in Any Fund or with Trustee. It
is agreed by the parties hereto that after payment in full of (i)
the principal of, premium, if any, and interest on the Bonds,
(ii) the fees, charges, and expenses of the Issuer, the Trustee
and the Remarketing Agent in accordance herewith and with the
Indenture and the Remarketing Agreement (the payment of which
fees, charges and expenses shall be evidenced by a written
certification of the Company that it has fully paid all such
fees, charges and expenses), and (iii) all other amounts required
to be paid under this Agreement, the Note, the Indenture, the
Remarketing Agreement and the Tax Exemption Certificate and
Agreement, any amounts remaining in any fund or account
maintained under this Agreement, the Indenture or the Tax
Exemption Certificate and Agreement and not applied to the
principal of, premium, if any, and interest on the Bonds shall
belong to and be paid to the Company by the Trustee; provided,
that if the Trustee shall have drawn under the Letter of Credit,
the Trustee shall request a written statement from the Bank as to
whether or not the Bank has been reimbursed by the Company for
any and all such drawings, and if the Bank has not been
reimbursed by the Company for any and all such drawings under the
Letter of Credit (other than reimbursement for a drawing under
the Letter of Credit to purchase Bonds tendered or deemed to be
tendered for purchase pursuant to Section 4.1 or Section 4.2 of
the Indenture, which reimbursement is not due and owing under the
Letter of Credit Agreement), such amounts remaining in the Bond
Fund or the Bond Purchase Fund shall, upon written notice from
the Bank that the Company has not reimbursed the Bank under the
Letter of Credit Agreement for any such drawing under the Letter
of Credit (which notice shall state the unreimbursed amount),
belong to and be paid to the Bank by the Trustee to the extent
that the Company has not so reimbursed the Bank.
Section 9.6. Amendments, Changes and Modifications. Except as
otherwise provided in this Agreement or the Indenture, subsequent
to the initial issuance of the Bonds and prior to their payment
in full, this Agreement may not be effectively amended, changed,
modified, altered or terminated without the written consent of
the Trustee, and, while the Letter of Credit is in effect, the
Bank.
Section 9.7. Governing Law. This Agreement shall be governed
exclusively by and construed in accordance with the applicable
laws of the State.
Section 9.8. Authorized Company Representative. Whenever under
the provisions of this Agreement the approval of the Company is
required or the Company is required to take some action at the
request of the Issuer, the Trustee or the Bank, such approval or
such request shall be given for the Company by the Authorized
Company Representative, and the Issuer, the Trustee and the Bank
shall be authorized to act on any such approval or request and
neither party hereto shall have any complaint against the other
or against the Trustee or the Bank as a result of any such action
taken.
Section 9.9. Term of This Agreement. This Agreement shall be
in full force and effect from the date hereof, and shall continue
in effect until the payment in full of all principal of, premium,
if any, and interest on the Bonds, or provision for the payment
thereof shall have been made pursuant to Article VIII of the
Indenture, all fees, charges, indemnities and expenses of the
Issuer, the Trustee and the Remarketing Agent have been fully
paid or provision made for such payment (the payment of which
fees, charges, indemnities and expenses and attorneys' fees and
expenses shall be evidenced by a written certification of the
Company that it has fully paid all such fees, charges,
indemnities and expenses) and all other amounts due hereunder and
under the Note, the Remarketing Agreement and the Tax Exemption
Certificate and Agreement have been duly paid or provision made
for such payment. All representations, certifications and
covenants by the Company as to all matters affecting the
tax-exempt status of the interest on the Series 1996-A Bonds
shall survive the termination of this Agreement.
Section 9.10. Binding Effect. This Agreement shall inure to the
benefit of and shall be binding upon the Issuer, the Company and
their respective successors and assigns; subject, however, to the
limitations contained in Sections 4.4 and 5.2 of this Agreement.
Section 9.11. References to Bank and Letter of Credit. At any
time subsequent to the Stated Termination Date (as defined in the
Letter of Credit), but only upon satisfaction of all
Reimbursement Obligations, all references to the Bank and the
Letter of Credit shall be ineffective.
In Witness Whereof, the Issuer and the Company have caused this
Agreement to be executed in their respective names and attested
by their duly authorized officers and sealed, all as of the date
first above written.
Upper Illinois River Valley
Development Authority
(Seal) By: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Chairman
Attest: ▇▇▇▇▇▇▇ Steep
Secretary
Exolon-ESK Company
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chief Financial Officer/
Vice President
(Seal)
Attest: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Secretary
The right, title and interest of the Upper Illinois River Valley
Development Authority, in and to the amounts receivable hereunder
(except for the rights of said Authority under Sections 4.2(b),
5.3 and 6.3 hereof and the rights to make determinations and
receive notices as herein provided) have been assigned and
pledged to American National Bank and Trust Company of Chicago,
as Trustee, pursuant to the Indenture of Trust dated as of
December 1, 1996, from the Upper Illinois River Valley
Development Authority, to said Trustee. For purposes of Article
9 of the Illinois Uniform Commercial Code, the counterpart of
this Agreement assigned, pledged and delivered to said Trustee
shall be deemed the original.
Exhibit A
Description of Project
The Project consists of the acquisition of land, the construction
of an approximately 25,000 square-foot building and related
improvements and the acquisition of machinery, equipment and
related property to be installed therein, all constituting a
facility for the cleansing of sour gas containing hydrogen
sulphide and for the disposal of sulphur and silica sand incident
to the existing silicon carbide manufacturing facilities of the
Company, to be owned and operated by the Company and to be
located within the corporate limits of the Village of Hennepin,
Illinois, on ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, approximately 3 miles
north of Route 71 in Hennepin, Illinois.
Exhibit B
Exolon-ESK Company
Promissory Note
For Value Received, Exolon-ESK Company, a Delaware corporation
(the "Company"), hereby promises to pay to the order of the Upper
Illinois River Valley Development Authority, or its successors
and assigns (the "Issuer"), in lawful money of the United States
of America in Federal or other immediately available funds at the
principal corporate trust office of American National Bank and
Trust Company of Chicago, as Trustee (the "Trustee"), the
principal amount of Thirteen Million Dollars ($13,000,000),
payable in installments on December 1, 2021, except as the
provisions hereinafter set forth with respect to prepayment may
become applicable hereto, together with interest on the unpaid
principal amount hereof from the date hereof at such rates equal
to the interest rates from time to time borne by the Bonds (as
hereinafter defined), calculated during the Weekly Rate Period or
the Monthly Rate Period (as each term is defined in the Agreement
hereinafter referred to) on the basis of a calendar year
consisting of 365 or 366 days, as the case may be, and calculated
on the actual number of days elapsed, and calculated during the
Adjustable Rate Period or the Fixed Rate Period (as each term is
defined in the Agreement hereinafter referred to) on the basis of
a calendar year consisting of 360 days of twelve (12) thirty-day
months, payable in lawful money of the United States of America
in Federal or other immediately available funds during said
Weekly Rate Period or said Monthly Rate Period on January 2,
1997, and on the first Business Day (as defined in said
Agreement) of each calendar month thereafter, until the earlier
of the date of the commencement of said Adjustable Rate Period or
said Fixed Rate Period or the date on which said principal amount
is paid, and during said Adjustable Rate Period or said Fixed
Rate Period on the first day of the June or December immediately
following the commencement of said Adjustable Rate Period or said
Fixed Rate Period and on the first day of each June and December
thereafter; provided, that the portion of the principal of this
Promissory Note corresponding to the outstanding principal amount
of the Series 1996-A Bonds (as hereinafter defined), shall bear
interest at the interest rate from time to time established for
said Series 1996-A Bonds, and the portion of the principal of
this Promissory Note corresponding to the outstanding principal
amount of the Series 1996-B Bonds (as hereinafter defined) shall
bear interest at the interest rate from time to time established
for said Series 1996-A Bonds.
This Promissory Note is issued pursuant to the Loan Agreement
dated as of December 1, 1996, by and between the Issuer and the
Company (the "Agreement"), and is issued in consideration of the
loan made thereunder and to evidence the obligations of the
Company set forth in Section 4.2(a) of the Agreement. The
Company covenants and agrees that the payments of principal
hereof and premium, if any, and interest hereon will be
sufficient to enable the Issuer to pay when due the principal of,
premium, if any, and interest on its Variable Rate Demand Solid
Waste Disposal Revenue Bonds, Series 1996-A (Exolon-ESK Company
Project) in the aggregate principal amount of $8,405,000 (the
"Series 1996-A Bonds") and its Taxable Variable Rate Demand Solid
Waste Disposal Revenue Bonds, Series 1996-B (Exolon-ESK Company
Project) in the aggregate principal amount of $4,595,000 (the
"Series 1996-B Bonds," and, together with the Series 1996-A
Bonds, the "Bonds").
Each payment of principal of, premium, if any, and interest on
this Promissory Note shall at all times be sufficient to pay the
total amount of principal of (whether at maturity or upon
acceleration or redemption prior to maturity), premium, if any,
and interest on the Bonds on the same date. The total payments
to be made by the Company hereunder shall be sufficient to pay
when due the principal of (whether at maturity or upon
acceleration or redemption prior to maturity) premium, if any,
and interest on the Bonds; provided, that the Excess Amount (as
hereinafter defined) held by the Trustee (as defined in the
Agreement) in the Bond Fund (as defined in the Agreement) on a
payment date shall be credited against the payment due on such
date; and provided further, that, subject to the provisions of
the immediately following sentence, if at any time the amount
held by the Trustee in said Bond Fund should be sufficient (and
remain sufficient) to pay on the dates required the principal of,
premium, if any, and interest on the Bonds then remaining unpaid,
the Company shall not be obligated to make any further payments
under the provisions of this Promissory Note. Notwithstanding
the provisions of the preceding sentence, if on any date the
Excess Amount held by the Trustee in said Bond Fund is
insufficient to make the then required payments of principal
(whether at maturity or upon redemption prior to maturity or
acceleration), premium, if any, and interest on the Bonds on such
date, the Company shall forthwith pay such deficiency. The term
"Excess Amount" as of any interest payment date shall mean the
amount in said Bond Fund on such date in excess of the amount
required for the payment of the principal of the Bonds which
theretofore has matured at maturity or on a date fixed for
redemption and premium, if any, on such Bonds in all cases where
Bonds have not been presented for payment and paid, or for the
payment of interest which has theretofore come due in all cases
where interest checks have not been presented for payment and
paid. Any moneys derived from a drawing under the Letter of
Credit (as defined in the Agreement) shall constitute a credit
against the obligation of the Company to make a corresponding
payment hereunder, as provided in Section 4.2(f) of the
Agreement.
This Promissory Note is entitled to the benefits and is subject
to the conditions of the Agreement. The obligations of the
Company to make the payments required hereunder shall be absolute
and unconditional without any defense or right of set-off,
counterclaim or recoupment by reason of any default by the Issuer
under the Agreement or under any other agreement between the
Company and the Issuer or the Trustee, or out of any indebtedness
or liability at any time owing to the Company by the Issuer or
said Trustee, or for any other reason.
This Promissory Note is subject to mandatory prepayment and
optional prepayment as a whole or in part, as provided in Article
VII of the Agreement.
In certain events, on the conditions, in the manner and with the
effect set out in the Agreement, the principal installments of
this Promissory Note may be declared due and payable before the
stated maturity thereof, together with accrued interest thereon.
Reference is hereby made to the Agreement for a complete
statement of the terms and conditions under which the maturity of
the principal installments of this Promissory Note may be
accelerated.
In Witness Whereof, the Company has caused this Promissory Note
to be duly executed, attested, sealed and delivered as of
December 19, 1996.
Exolon-ESK Company
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chief Financial Officer/
Vice President
(Seal)
Attest: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Secretary
Endorsement
Pay, without recourse or warranty, to the order of American
National Bank and Trust Company of Chicago, as Trustee under the
Indenture of Trust dated as of December 1, 1996, from the
undersigned to said trustee.
Upper Illinois River Valley
Development Authority
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Chairman
(Seal)
Attest: ▇▇▇▇▇▇▇ Steep
Secretary
Exhibit C
Legal Description
Exhibit D
Requisition No. ___________
American National Bank and Trust Company of Chicago, as Trustee
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Upper Illinois River Valley Development Authority
$8,405,000 Variable Rate Demand Solid Waste Disposal
Revenue Bonds, Series 1996-A (Exolon-ESK Company
Project) (the "Series 1996-A Bonds")and $4,595,000
Variable Rate Demand Solid Waste Disposal Revenue
Bonds, Series 1996-B (Exolon-ESK Company Project) (the
"Series 1996-B Bonds")
Ladies and Gentlemen:
This Requisition is submitted pursuant to the provisions of
Section 3.3 of a Loan Agreement dated as of December 1, 1996 (the
"Agreement") by and between the Upper Illinois River Valley
Development Authority (the "Issuer") and Exolon-ESK Company (the
"Company"). The terms used herein have the same meanings as when
used in the Agreement, except where the context otherwise
requires.
The Company hereby requests that on ______________, the Trustee
pay to the payee named in paragraph (b) below from funds held in
the Acquisition and Construction Fund the amount specified in
paragraph (c) below. In support of this request, the Company
states as follows:
(a) The cost of the facilities to which the payment relates
has been properly incurred and is a proper charge against the
Acquisition and Construction Fund.
(b) The Payee is __________________ whose address is
_________________ attention: ____________________.
(c) The amount requested to be paid is $__________________.
(d) None of the items for which the payment is proposed to
be made has formed the basis for any payment heretofore made from
the Acquisition and Construction Fund.
(e) Each of the items for which the payment is proposed to
be made is or was necessary or appropriate in connection with the
Project.
(f) After giving effect to this Requisition, the amount
remaining in the Acquisition and Construction Fund, the
reasonable estimate of investment income thereon, and funds of
the Company available for such purpose will be sufficient to pay
the cost of completing the Project.
(g) After giving effect to this Requisition, all payments
of Costs of Issuance paid for out of Series 1996-A Bond proceeds
does not exceed $________.
(h) After giving effect to this Requisition, at least 95%
of the proceeds of the Series 1996-A Bonds to be disbursed from
Account A of the Acquisition and Construction Fund, including the
amounts requested herein to be disbursed, will be used to provide
(i) land or depreciable property of a character subject to the
allowance for depreciation under the Internal Revenue Code of
1986, as amended (the "Code"), and (ii) qualified "solid waste
disposal facilities," within the meaning of Section 142(a)(6) of
the Code.
In accordance with the provisions of the Agreement, the Company
has caused this Requisition to be signed and verified on its
behalf by its duly authorized representative this ______ day of
________________, 19___.
Exolon-ESK Company
By
Authorized Company Representative
Approved:
The Chase Manhattan Bank, N.A.
By
Its