THE ▇▇▇▇▇▇▇▇ COUNTY INDUSTRIAL FACILITIES AND
POLLUTION CONTROL FINANCING AUTHORITY,
as the Issuer,
FLANDERS CORPORATION,
the Company
------------------------------------
LOAN AGREEMENT
------------------------------------
Dated as of March 1, 2000
Relating to
$4,000,000
The ▇▇▇▇▇▇▇▇ County Industrial Facilities and
Pollution Control Financing Authority
Industrial Development Revenue Bonds
(Flanders Corporation Project), Series 2000
The interest of The ▇▇▇▇▇▇▇▇ County Industrial Facilities and Pollution Control
Financing Authority (the "Issuer") in this Loan Agreement has been assigned
(except for "Reserved Rights" defined in this Loan Agreement) pursuant to the
Indenture of Trust dated as of the date hereof from the Issuer to First-Citizens
Bank & Trust Company, Raleigh, North Carolina, as trustee (the "Trustee"), and
is subject to the security interest of the Trustee thereunder.
LOAN AGREEMENT
TABLE OF CONTENTS
(This Table of Contents is not a part of the Loan Agreement and is only for
convenience of reference.)
Page
ARTICLE I
DEFINITIONS
Section 1.1. Definitions....................................................2
Section 1.2. Uses of Words and Phrases......................................4
ARTICLE II
REPRESENTATIONS, CERTAIN COVENANTS AND WARRANTIES
Section 2.1. Representations and Warranties of the Issuer..................5
Section 2.2. No Representation or Warranty by Issuer as to Project.........6
Section 2.3. Representations and Warranties of the Company.................6
Section 2.4. Notice of Determination of Taxability.........................9
ARTICLE III
ACQUISITION AND CONSTRUCTION OF THE PROJECT; ISSUANCE OF THE BONDS;
SPECIAL COVENANTS
Section 3.1. Agreement to Acquire the Project..............................9
Section 3.2. Agreement to Issue the Bonds; Application of Bond Proceeds...10
Section 3.3. Disbursements from the Project Fund..........................10
Section 3.4. Furnishing Documents to the Trustee..........................10
Section 3.5. Establishment of Completion Date.............................10
Section 3.6. Company Required to Pay in Event Project Fund Insufficient...10
Section 3.7. Special Arbitrage Certifications.............................11
Section 3.8. Use of Proceeds; Special Tax Covenants.......................11
Section 3.9. Modification and Termination of Special Tax Covenants........14
Section 3.10. Arbitrage and Rebate........................................15
ARTICLE IV
LOAN PROVISIONS; SUBSTITUTE CREDIT FACILITY
Section 4.1. Loan of Proceeds.............................................16
Section 4.2. Amounts Payable..............................................16
Section 4.3. Obligations of Company Unconditional.........................17
Section 4.4. Substitute Credit Facility...................................17
- i -
ARTICLE V
PREPAYMENT, PURCHASE AND REDEMPTION
Section 5.1. Prepayment and Redemption....................................18
ARTICLE VI
SPECIAL COVENANTS
Section 6.1. No Warranty of Condition or Suitability by Issuer............19
Section 6.2. Access to the Project........................................19
Section 6.3. Further Assurances and Corrective Instruments................19
Section 6.4. Issuer and Company Representatives...........................19
Section 6.5. Financing Statements.........................................19
Section 6.6. Covenant to Provide Continuing Disclosure....................20
Section 6.7. Annual Report of Outstanding Bonds...........................20
Section 6.8. Notice of Control............................................20
ARTICLE VII
ASSIGNMENT, SELLING, LEASING; INDEMNIFICATION, MERGER
OR ASSET SALE, MAINTENANCE AND REPAIR, TAXES
Section 7.1. Assignment, Selling and Leasing..............................20
Section 7.2. Release and Indemnification..................................21
Section 7.3. Indemnity Against Claims.....................................22
Section 7.4. Issuer to Grant Security Interest to Trustee.................22
Section 7.5. Maintenance of Existence; Merger; Asset Transfer.............22
Section 7.5. Company's Obligations to Maintain and Repair.................23
Section 7.6. Taxes and Other Charges......................................23
Section 7.7. Damage, Destruction or Loss of Property; Obligation to
Rebuild; Use of Insurance Proceeds and Condemnation Awards...23
ARTICLE VIII
DEFAULTS AND REMEDIES
Section 8.1. Defaults Defined.............................................24
Section 8.2. Remedies on Default..........................................25
Section 8.3. No Remedy Exclusive..........................................25
Section 8.4. Agreement to Pay Attorneys' Fees and Expenses................26
Section 8.5. No Additional Waiver Implied by One Waiver...................26
ARTICLE IX
MISCELLANEOUS
Section 9.1. Term of Agreement............................................26
Section 9.2. Notices 26
Section 9.3. Binding Effect...............................................27
Section 9.4. Severability.................................................28
- ii -
Section 9.5. Amounts Remaining in Funds...................................28
Section 9.6. No Liability of Issuer; No Charge Against Issuer's Credit....28
Section 9.7. If Performance Date Not a Business Day.......................28
Section 9.8. Amendments, Changes and Modifications........................29
Section 9.9. Execution in Counterparts....................................29
Section 9.10. Applicable Law..............................................29
Section 9.11. Captions 29
Section 9.12. No Third Party Beneficiary..................................29
EXHIBIT A - Description of Project.........................................A-1
EXHIBIT B - Form of Promissory Note........................................B-1
EXHIBIT C - Form of Project Fund Certificate and Requisition...............C-1
EXHIBIT D - Certificate of Completion......................................D-1
- iii -
LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of March 1, 2000, between THE ▇▇▇▇▇▇▇▇ COUNTY
INDUSTRIAL FACILITIES AND POLLUTION CONTROL FINANCING AUTHORITY (the "Issuer"),
a political subdivision duly organized and existing under the laws and
Constitution of the State of North Carolina (the "State"), FLANDERS CORPORATION,
a corporation duly organized and existing under the laws of the State of North
Carolina (the "Company");
W I T N E S S E T H:
WHEREAS, the Industrial and Pollution Control Facilities Financing Act,
Chapter 159C of the General Statutes of North Carolina, as amended (the "Act"),
authorizes the creation of industrial facilities and pollution control financing
authorities by the several counties in North Carolina and empowers such
authorities to acquire, construct, own, repair, maintain, extend, improve,
rehabilitate, renovate, furnish, equip and sell, lease, exchange, transfer or
otherwise dispose of air and water pollution control facilities to the end that
such authorities may be able to promote the right to gainful employment
opportunity, private industry, the prevention and control of the pollution of
the air, land and waters of the State, and the safety, morals and health of the
people of the State and thereby promote the general welfare of the inhabitants
of North Carolina by exercising such powers to aid in financing air and water
pollution control facilities for the purpose of reducing, controlling and
preventing environmental pollution, and further authorizes such authorities to
loan to others the proceeds of bonds issued for the purpose of paying for all or
any part of a pollution control facility, to mortgage and pledge any or all of
such facilities, whether then owned or thereafter acquired, as security for the
payment of the principal of, premium, if any, and interest on any such bonds and
any agreements made in connection therewith and to pledge or assign the revenues
and receipts from such facilities or loan or from any other source to the
payment of such bonds; and
WHEREAS, the Issuer has been duly organized pursuant to the Act; and
WHEREAS, in order to further the purposes of the Act, the Issuer proposes to
undertake the financing of the acquisition and construction of a building and
installation of equipment therein for the recycling of waste industrial glass
(the "Project") in ▇▇▇▇▇▇▇▇ County, North Carolina, which constitutes a
pollution control project under the Act, and to obtain the funds therefor by the
issuance of its Bonds (as hereinafter defined) under an Indenture of Trust
securing such Bonds, between the Issuer and First-Citizens Bank & Trust Company,
Raleigh, North Carolina, as Trustee, dated as of the date hereof (the
"Indenture"); and
WHEREAS, the Issuer proposes to loan the proceeds from the sale of the
Bonds, as hereinafter defined, to the Company to acquire and install the Project
upon the terms and conditions hereinafter set forth; and
WHEREAS, the Company and SunTrust Bank, will enter into a Letter of Credit
Agreement (the "Credit Agreement") dated as of the date hereof pursuant to which
the Bank will issue an irrevocable letter of credit in an amount not to exceed
$4,072,223 to the Trustee at the
request and for the account of the Company upon the terms set forth in the
Credit Agreement; and
WHEREAS, it has been determined that the financing of the Project will
require the issuance, sale and delivery by the Issuer of a series of bonds in
the aggregate principal amount of Four Million Dollars ($4,000,000) (the
"Bonds");
NOW THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the parties hereto covenant, agree and bind themselves as
follows: provided, that any obligation of the Issuer created by or arising out
of this Agreement shall never constitute a debt or a pledge of the faith and
credit or the taxing power of the Issuer or any political subdivision or taxing
district of the State of North Carolina but shall be payable solely out of the
Trust Estate (as defined in the Indenture), anything herein contained to the
contrary by implication or otherwise notwithstanding:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. All capitalized, undefined terms used herein shall
have the same meanings as used in Article I of the Indenture (defined below). In
addition, the following words and phrases shall have the following meanings:
"Acquisition", when used with respect to the Project means the acquisition,
construction, installation and equipping of the Project, including payment of
Costs of the Project, by the Company.
"Act" means the Industrial and Pollution Control Facilities Financing Act,
Chapter 159C of the North Carolina General Statutes, as amended.
"Agreement" means this Loan Agreement between the Issuer and the Company and
any modifications, alterations and supplements hereto made in accordance with
the provisions hereof and of the Indenture.
"Bond Documents" means this Agreement, the Indenture, the Bonds and the
Note.
"Company Documents" means this Agreement, the Note, the Placement Contract,
the Remarketing Agreement and the Credit Agreement.
"Completion Date" means the date of delivery to the Trustee of the
Certificate of Completion of the Project required by Section 3.5 of the
Agreement.
- 2 -
"Cost(s) of the Project", "Cost" or "Costs" means all costs and allowances
which the Issuer or the Company may properly pay or accrue, or reimburse itself
(under the Code), for the Project and which, under generally accepted accounting
principles, are chargeable to the capital account of the Project or could be so
charged either with a proper election to capitalize such costs or, but for a
proper election, to expense such costs, including (without limitation) the
following costs:
(a) fees and expenses incurred in preparing the plans and specifications
for the Project (including any preliminary study or planning or any aspect
thereof); any labor, services, construction materials and supplies used
and/or furnished in site improvement; any equipment for the Project; any
acquisition necessary to provide utility services or other services,
including trackage to provide the Project with public transportation
facilities, roadways, parking lots, water supply, sewage and waste disposal
facilities; and all real and tangible personal property deemed necessary by
the Company and acquired in connection with the Project;
(b) fees for architectural, engineering, supervisory and consulting
services;
(c) any fees and expenses incurred in connection with perfecting and
protecting title to the Project and any fees and expenses incurred in
connection with preparing, recording or filing such documents, instruments
or financing statements as either the Company or the Issuer may deem
desirable to perfect or protect the rights of the Issuer or the Trustee
under the Bond Documents;
(d) any legal, accounting or financial advisory fees and expenses,
including, without limitation, fees and expenses of Bond Counsel and counsel
to the Issuer, the Company, the Credit Facility Provider, the Placement
Agent, the Remarketing Agent or the Trustee, any fees and expenses of the
Issuer, Trustee, Remarketing Agent, Placement Agent, Credit Issuer, Tender
Agent, Paying Agent or any rating agency, filing fees, and printing and
engraving costs, incurred in connection with the authorization, issuance,
sale and purchase of the Bonds, and the preparation of the Bond Documents
and all other documents in connection with the authorization, issuance and
sale of the Bonds;
(e) interest to accrue on the Bonds during construction of the Project;
(f) any administrative or other fees charged by the Issuer or
reimbursement thereto of expenses in connection with the Project until the
Completion Date; and
(g) any other costs and expenses relating to the Project which could
constitute costs or expenses for which the Issuer may expend Bond proceeds
under the Act.
"Date of Issuance" means March 21, 2000, being the date of the original
issuance and delivery of the Bonds by the Issuer.
"Default" means any Default under this Agreement as specified in and defined
by Section 8.1 hereof.
- 3 -
"Governing Body" means the Board of Commissioners of the County of ▇▇▇▇▇▇▇▇,
North Carolina.
"Indenture" means the Indenture of Trust dated as of this date between the
Issuer and the Trustee, pursuant to which the Bonds are authorized to be issued,
and any amendments and supplements thereto.
"LGC" means the Local Government Commission of North Carolina, a division of
the Department of State Treasurer, and any successor or successors thereto.
"Net Proceeds," when used with respect to any insurance recovery or
condemnation award with respect to the Project, shall mean the gross proceeds
from such insurance recovery or condemnation award less payment of attorneys'
fees, fees and expenses of the Credit Provider and all other expenses properly
incurred in the collection of such gross proceeds.
"Note" means the Company's promissory note in the principal amount of
$4,000,000, dated March 21, 2000, in the form attached hereto as Exhibit B,
issued pursuant hereto and delivered to the Issuer as consideration for the loan
of the proceeds of the Bonds for the undertaking of the Project, and any
amendment or supplement thereto or substitution therefor.
"Project" means the acquisition, construction, installation and equipping of
a facility for the recycling of waste glass by the Company in Smithfield,
▇▇▇▇▇▇▇▇ County, North Carolina, as more particularly described in Exhibit A
hereto.
"Requisition" means a written request for a disbursement from the Project
Fund, signed by a Company Representative, in the form attached hereto as Exhibit
C and satisfactorily completed as contemplated by said form.
"Reserved Rights" means the rights of the Issuer provided under Sections
3.1(c), 3.8, 4.2(b), 7.2, 7.3 and 8.4 hereof and the rights of the Issuer to
receive notices and reports and to give consents and approvals as provided
herein and in the Indenture.
"State" means the State of North Carolina.
"Term of Agreement" means the term of this Agreement as specified in Section
9.1 hereof.
Section 1.2. Uses of Words and Phrases. "Herein," "hereby," "hereunder,"
"hereof," "hereinabove," "hereinafter," and other equivalent words and phrases
refer to this Agreement and not solely to the particular portion thereof in
which any such word is used. The definitions set forth in Section 1.1 hereof
include both singular and plural. Whenever used herein, any pronoun shall be
deemed to include both singular and plural and to cover all genders.
ARTICLE II
REPRESENTATIONS, CERTAIN COVENANTS AND WARRANTIES
- 4 -
Section 2.1. Representations and Warranties of the Issuer. The Issuer
represents, covenants and warrants that:
(a) Organization and Authority. The Issuer is a political subdivision within
the meaning of the Act, created and validly existing pursuant to the provisions
of the Act. The Issuer has all requisite power and authority under the Act to
(i) issue the Bonds, (ii) lend the proceeds thereof to the Company to assist the
Company in financing the cost of acquiring, constructing and equipping the
Project, and (iii) enter into, and perform its obligations under the Bond
Documents. The members of the Board of Commissioners of the Issuer are appointed
by the Board of County Commissioners of ▇▇▇▇▇▇▇▇ County.
(b) Pending Litigation. There are no actions, suits, proceedings, inquiries
or investigations pending, or to the knowledge of the Issuer threatened, against
or affecting the Issuer in any court or before any governmental authority or
arbitration board or tribunal, which involve the possibility of materially and
adversely affecting the transactions contemplated by the Bond Documents or
which, in any way, would materially and adversely affect the validity or
enforceability of the Bond Documents or any agreement or instrument to which the
Issuer is a party and which is used or contemplated for use in the consummation
of the transactions contemplated hereby or thereby.
(c) Issue, Sale and Other Transactions Are Legal and Authorized. The
issuance and sale of the Bonds and the execution and delivery by the Issuer of
the Bond Documents and the compliance by the Issuer with all of the provisions
of each thereof and of the Bonds (i) are within the purposes, powers and
authority of the Issuer, (ii) have been done in full compliance with the
provisions of the Act, (iii) are legal and will not conflict with or constitute
on the part of the Issuer a violation of or a breach of or default under, or
result in the creation of any lien, charge or encumbrance upon any property of
the Issuer (other than as contemplated in the Indenture) under the provisions
of, any activating resolution, by-law, indenture, mortgage, deed of trust, note
agreement or other agreement or instrument to which the Issuer is a party or by
which the Issuer is bound, or to the best of Issuer's knowledge any license,
judgment, decree, law, statute, order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Issuer or any of its
activities or properties, and (iv) have been duly authorized by all necessary
action on the part of the Issuer.
(d) Governmental Consents. Neither the nature of the Issuer nor any of its
activities or properties, nor any relationship between the Issuer and any other
person, nor any circumstance in connection with the issue, sale or delivery of
any of the Bonds is such as to require the consent, approval or authorization
of, or the filing, registration or qualification with, any governmental
authority on the part of the Issuer in connection with the execution, delivery
and performance of the Bond Documents or the issue, sale or delivery of the
Bonds, other than those already obtained; provided, however, no representation
is made as to compliance with any federal or state securities or "blue sky" law.
(e) No Defaults. To the best of Issuer's knowledge, no event has occurred
and no condition exists with respect to the Issuer which would constitute an
"event of default" as defined in the Bond Documents or which, with the lapse of
time or with the giving of notice or both, would
- 5 -
become such an "event of default." The Issuer is not in default under the Act or
under any charter instrument, by-law or other agreement or instrument to which
it is a party or by which it is bound which default would adversely affect the
enforceability or taxability of the Bonds.
(f) No Prior Pledge. Neither this Agreement nor any of the Pledged Revenues
have been pledged or hypothecated in any manner or for any purpose other than as
provided in the Indenture as security for the payment of the Bonds.
(g) Nature and Location of Project. The financing of the costs of the
Project, together with related expenses, is authorized under the Act and is in
furtherance of the public purpose for which the Issuer was created. The Project
is located in ▇▇▇▇▇▇▇▇ County, North Carolina.
(h) Limited Obligations. Notwithstanding anything herein contained to the
contrary, any obligation the Issuer may hereby incur for the payment of money
shall not constitute an indebtedness of the County or of the State or of any
political subdivision thereof within the meaning of any state constitutional
provision or statutory limitation and shall not give rise to a pecuniary
liability of the State or County or any political subdivision thereof, or
constitute a charge against the general credit or taxing power of said State or
County or any political subdivision thereof, but shall be limited obligations of
the Issuer payable solely from (i) the Pledged Revenues, (ii) revenues derived
from the sale of the Bonds, and (iii) amounts on deposit from time to time in
the Bond Fund, subject to the provisions of this Agreement and the Indenture
permitting the application thereof for the purposes and on the terms and
conditions set forth herein and therein.
(i) Approval of Issuance of Bonds. The Issuer has obtained approval of the
issuance of the Bonds by the Board of County Commissioners of ▇▇▇▇▇▇▇▇ County as
required by Section 159C-4(d) of the Act, by the Secretary of the Department of
Commerce of the State required by Section 159C-7 of the Act and by the LGC
required by Sections 159C-6, -8 and -9 of the Act.
Section 2.2. No Representation or Warranty by Issuer as to Project. THE
ISSUER MAKES NO REPRESENTATION OR WARRANTY WHATSOEVER CONCERNING THE USE OF THE
PROCEEDS OF THE SALE OF THE BONDS OR THE SUITABILITY OF THE PROJECT FOR THE
PURPOSE FOR WHICH IT IS BEING UNDERTAKEN BY THE COMPANY. The Issuer has not made
any independent investigation as to the feasibility or creditworthiness of the
Company. Any bond purchaser, assignee of the Agreement or any other party with
any interest in this transaction, shall make its own independent investigation
as to the creditworthiness and feasibility of the Project, independent of any
representation or warranties of the Issuer.
Section 2.3. Representations and Warranties of the Company. The Company
makes the following representations, covenants and warranties:
(a) Organization and Power. The Company (i) is a corporation duly
incorporated, validly existing and in good standing under the laws of the State,
and (ii) has all requisite power and authority and all necessary licenses and
permits to own and operate its properties and to carry on its business as now
being conducted and as presently proposed to be conducted.
- 6 -
(b) Pending Litigation. There are no proceedings pending, or to the
knowledge of the Company threatened, against or affecting the Company in any
court or before any governmental authority, arbitration board or tribunal which
if adversely determined, would materially and adversely affect the transactions
contemplated by the Bond Documents or which, in any way, would materially and
adversely affect the properties, business, prospects, profits or condition
(financial or otherwise) of the Company, or the ability of the Company to
perform its obligations under the Company Documents. The Company is not in
default with respect to an order of any court, governmental authority,
arbitration board or tribunal.
(c) Agreements Are Legal and Authorized. The execution and delivery by the
Company of each of the Company Documents and the compliance by the Company with
all of the provisions hereof and thereof (i) are within the corporate power of
the Company, (ii) will not conflict with or result in any breach of any of the
provisions of, or constitute a default under, or result in the creation of any
lien, charge or encumbrance upon any property of the Company under the
provisions of, any agreement, articles of incorporation, by-laws or other
instrument to which the Company is a party or by which it may be bound, or any
license, judgment, decree, law, statute, order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company or any of
its activities or properties, and (iii) have been duly authorized by all
necessary corporate action on the part of the Company; and
(d) Enforceability of Documents. The Company Documents are valid and binding
agreements of the Company, enforceable in accordance with their respective
terms, except as the enforceability thereof may be subject to judicial decision
or limited by applicable bankruptcy, insolvency, moratorium or other similar
laws affecting the enforcement of creditors' rights generally.
(e) Compliance with Indenture. The Company has received and reviewed the
Indenture. By its execution of this Agreement, the Company acknowledges that it
has approved, has agreed to and is bound by the provisions of the Indenture. The
Company will fully and faithfully perform all the duties and obligations which
the Issuer has covenanted and agreed in the Indenture to cause the Company to
perform and any duties and obligations which the Company is required in the
Indenture to perform. The Company agrees that the Trustee shall be entitled to
enforce and to benefit from the terms and conditions of this Agreement that
relate to it notwithstanding the fact that it is not a signatory hereto. The
foregoing shall not apply to any duty or undertaking of the Issuer which by its
nature cannot be delegated or assigned.
(f) Governmental Consents. Neither the Company nor any of its business or
properties, nor any relationship between the Company and any other person, nor
any circumstances in connection with the execution, delivery and performance by
the Company of the Company Documents or the offer, issue, sale or delivery by
the Issuer of the Bonds for the benefit of the Company, is such as to require
the consent, approval or authorization of, or the filing, registration or
qualification with, any governmental authority on the part of the Company other
than those already obtained; provided, however, that no representation is made
as to any consents, approvals or authorizations required in connection with the
construction or occupancy of the Project, or with respect to such consents,
approvals or authorizations as may be required on the part of the Issuer.
- 7 -
(g) No Defaults. No event has occurred and no condition exists with respect
to the Company that would constitute an "event of default" under any of the
Company Documents or which, with the lapse of time or with the giving of notice
or both, would become such an "event of default." The Company is not in
violation in any material respect of any agreement, articles of incorporation,
by-laws or other instrument to which it is a party or by which it may be bound,
which violation might materially and adversely affect the properties, business,
prospects, profits or conditions (financial or otherwise) of the Company.
(h) Compliance with Law. The Company is not in violation in any material way
of any laws, ordinances, governmental rules or regulations to which it is
subject and has not failed to obtain any licenses, permits, franchises or other
governmental authorizations necessary to the ownership of its properties or to
the conduct of its business, which violation or failure to obtain might
materially and adversely affect the properties, business, prospects, profits or
conditions (financial or otherwise) of the Company.
(i) Restrictions on the Company. The Company is not a party to any contract
or agreement that materially and adversely affects the business of the Company.
Except for the Credit Agreement, the Company is not a party to, or bound by any
contract or agreement that restricts the right or ability of the Company to
incur or guarantee indebtedness for borrowed money to such extent as to preclude
the Company from entering into the transactions contemplated hereby, under the
Bond Documents or any other documents executed in connection herewith and
therewith.
(j) Inducement. The issuance of the Bonds by the Issuer and the lending of
the proceeds thereof to the Company to enable the Acquisition of the Project
have induced the Company to locate the Project in the County. The issuance of
the Bonds by the Issuer and the lending of the proceeds thereof to the Company
to enable the Company to acquire, construct and equip the Project shall assist
the Company in continuing to provide continued employment and industry in the
County.
(k) Pollution Control Project. The Company anticipates that upon completion
of the Project, the Company will operate the Project as a "project" within the
meaning of the Act until the Bonds have been paid in full.
(l) Notice. The Project is of the type authorized and permitted by the Act,
and the Project is substantially the same in all material respects to that
described in the notice of public hearing published on August 20, 1999.
(m) Compliance With Land Use Regulations. The Project will be acquired,
constructed and installed and will be operated by the Company in such manner as
to conform in all material respects with all applicable zoning, planning,
building, environmental and other regulations of the governmental authorities
having jurisdiction over the Project.
(n) Application of Proceeds. The Company will cause all of the proceeds of
the Bonds to be applied solely to the payment of Costs of the Project.
(o) Location of Project. The Project is located entirely within the
geographical boundaries of ▇▇▇▇▇▇▇▇ County, North Carolina.
- 8 -
Section 2.4. Notice of Determination of Taxability. Promptly after the
Company first becomes aware of any Determination of Taxability, the Company
shall give written notice thereof to the Issuer and the Trustee.
ARTICLE III
ACQUISITION AND CONSTRUCTION OF THE PROJECT;
ISSUANCE OF THE BONDS; SPECIAL COVENANTS
Section 3.1. Agreement to Acquire the Project.
(a) The Company agrees to make all contracts and do all things necessary for
the Acquisition of the Project. The Company further agrees that it will acquire,
construct and equip the Project with all reasonable dispatch and use its best
efforts to cause the Acquisition of the Project to be completed by August, 2000,
or as soon thereafter as may be practicable, delays caused by force majeure as
defined in Section 8.1 hereof only excepted; but if for any reason such
Acquisition of the Project is not completed by said date there shall be no
resulting liability on the part of the Company and no diminution in or
postponement of the payments required in Section 4.2 hereof to be paid by the
Company.
(b) The Company shall obtain or cause to be obtained all necessary permits
and approvals for the Acquisition, operation and maintenance of the Project and
shall comply with all lawful requirements of any governmental body regarding the
use or condition of the Project or any of its component parts. The Company may,
however, contest any such requirement by an appropriate proceeding diligently
prosecuted.
(c) The Company shall maintain a set of plans and specifications at the
Project site which shall be available to the Issuer, the Trustee, the Credit
Facility Provider and the Paying Agent for inspection and examination during the
Company's regular business hours, and the Issuer and the Company agree that the
Company may supplement, amend and add to such plans and specifications, and that
the Company shall be authorized to omit or make substitutions for components of
the Project, without approval of the Issuer, provided that no such change shall
be made which shall be contrary to subsections (k), (l), (m), (n) and (o) of
Section 2.3 hereof or the provisions of Article IX hereof, and provided further
that if any such change would render materially incorrect or incomplete the
description of the initial components of the Project or the description of the
Project as set forth in Exhibit A to this Agreement, the Company and the Issuer
shall amend such Exhibit A to reflect such change, upon receipt by the Issuer,
the Trustee, as the Credit Facility Provider, of an opinion of Bond Counsel that
such change will not result in an Event of Taxability. No approval of the Issuer
or the Trustee shall be required for the Acquisition of the Project or for the
solicitation, negotiation, award or execution of contracts relating thereto.
Section 3.2. Agreement to Issue the Bonds; Application of Bond Proceeds. In
order to provide funds to pay the Costs of the Project, the Issuer, concurrently
with the execution of this Agreement, will issue, sell, and deliver the Bonds
and deposit the net proceeds thereof with the Trustee in the Project Fund, as
provided in the Indenture.
- 9 -
Section 3.3. Disbursements from the Project Fund. The Issuer has, in the
Indenture, authorized and directed the Trustee to make disbursements from the
Project Fund to pay the Costs of the Project, or to reimburse the Company for
any Cost paid by the Company. The Company agrees to cause Requisitions to be
directed to the Trustee as may be necessary to effect payments out of the
Project Fund in accordance with this Section. The receipt by the Trustee of a
Requisition signed by a Company Representative which appears to be properly
complete on its face shall be sufficient authorization for the Trustee to
disburse such amounts as requested.
Section 3.4. Furnishing Documents to the Trustee. The Company agrees to
cause such Requisitions to be directed to the Trustee as may be necessary to
effect payments out of the Project Fund in accordance with Section 3.3 hereof.
Section 3.5. Establishment of Completion Date. The Completion Date shall be
evidenced to the Trustee by a certificate signed by a Company Representative in
the form attached hereto as Exhibit D. Forthwith upon completion of the
acquisition, construction and installation of the Project, the Company agrees to
cause such certificate to be furnished to the Issuer and the Trustee. Upon
receipt of such certificate, the Trustee shall retain in the Project Fund a sum
equal to the amounts necessary for payment of the Costs not then due and payable
according to such certificate, and any amount remaining in the Project Fund
shall be transferred by the Trustee into the General Account of the Bond Fund
and used by the Trustee (a) to redeem Bonds on the earliest redemption date
permitted by the Indenture without a premium, (b) to purchase Bonds on the open
market prior to such redemption date at prices not in excess of one hundred
percent (100%) of the principal amount of such Bonds, or (c) for any other
purpose provided that the Trustee is furnished with a Favorable Opinion of Bond
Counsel, all in accordance with Article VI of the Indenture. Until used for one
or more of the foregoing purposes, such segregated amount may be invested as
permitted by the Indenture provided that prior to any such investment the
Trustee is provided with a Favorable Opinion of Bond Counsel.
Section 3.6. Company Required to Pay in Event Project Fund Insufficient. In
the event the moneys in the Project Fund available for payment of the Costs
should not be sufficient to pay the Costs in full, the Company agrees to
complete the Project and to pay, or to provide for payment of, that portion of
the Costs in excess of the moneys available therefor in the Project Fund. The
Issuer does not make any warranty, either express or implied, that the moneys
paid into the Project Fund and available for payment of the Costs will be
sufficient to pay all of the Costs. The Company agrees that if after exhaustion
of the moneys in the Project Fund, the Company should pay any portion of the
Costs pursuant to the provisions of this Section, the Company shall not be
entitled to any reimbursement therefor from the Issuer, the Trustee or the
Owners of any of the Bonds, nor shall the Company be entitled to any diminution
of the amounts payable under Section 4.2 hereof or under the Note.
Section 3.7. Special Arbitrage Certifications. The Company and the Issuer
covenant not to cause or direct any moneys on deposit in any fund or account to
be used in a manner which would cause the Bonds to be classified as "arbitrage
bonds" within the meaning of Section 148 of the Code, and the Company certifies
and covenants to and for the benefit of the Issuer and the Owners of the Bonds
that so long as there are any Bonds Outstanding, moneys on deposit in any fund
or account in connection with the Bonds, whether such moneys were derived from
the proceeds of the sale of the Bonds or from any other sources, will not be
used in a manner which
- 10 -
will cause the Bonds to be classified as "arbitrage bonds" within the meaning of
Section 148 of the Code.
Section 3.8. Use of Proceeds; Special Tax Covenants.
(a) Qualifying Costs. Neither the Issuer nor the Company shall cause any
proceeds of the Bonds to be expended, except pursuant to the Indenture and this
Agreement. The Company shall not (i) requisition or otherwise allow payment out
of proceeds of the Bonds (A) if such payment is to be used for the acquisition
(including reimbursement therefor in compliance with the Code) of any property
(or an interest therein) unless the first use of such property is pursuant to
such acquisition, provided that this clause (A) shall not apply (1) 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 Bonds, or (2) to any other property if the rehabilitation expenditures with
respect thereto equal 100% of the cost of acquiring such property financed with
the proceeds of the Bonds; (B) if as a result of such payment, 25% or more of
the proceeds of the Bonds would be considered as having been used directly or
indirectly for the acquisition of land (or an interest therein); (C) if, as a
result of such payment, less than 95% of the net proceeds of the Bonds, expended
at the time of such acquisition would be considered as having been used for
costs of the acquisition, construction, or reconstruction or improvement of land
or property of a character subject to the allowance for depreciation, within the
meaning of Section 144(a)(1)(A) of the Code ("Qualifying Costs"), or (D) if such
payment is used to pay issuance costs (including counsel fees and placement
fees) of the Bonds in excess of an amount equal to 2% of the principal amount of
the Bonds; (ii) 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 has or
would result in the loss of the exclusion of interest on the Bonds from gross
income of the owners thereof for federal income tax purposes; or (iii) take or
omit, or permit to be taken or omitted, any other action the taking or omission
of which has or would cause the loss of such exclusion.
(b) Prohibited Uses. Without limiting the generality of the foregoing, the
Issuer and the Company will not use the proceeds of the Bonds, or permit such
proceeds to be used directly or indirectly, for the acquisition of land (or an
interest therein) to be used for farming purposes, or to provide any facility
the primary purpose of which is retail food and beverage services, automobile
sales or service or the provision of recreation or entertainment, any airplane,
skybox or other private luxury box, any health club facility, any facility
primarily used for gambling, any store the principal business of which is the
sale of alcoholic beverages for consumption off premises, any private or
commercial golf course, country club, massage parlor, tennis club, skating
facility (including roller skating, skateboard and ice skating), racquet spots
facility (including any hand ball or racquetball court), hot tub facility,
suntan facility, or race track, or single or multi-family residences.
(c) Manufacturing. For purposes of applicability of the Code, not less than
95% of the net proceeds of the Bonds (consisting of the face amount of the Bonds
less any original issue discount plus any original issue premium, but including
issuance costs) shall be used to provide facilities to be used in the
manufacturing or production of tangible personal property, including facilities
that are directly related and ancillary to such manufacturing facilities and
located on the
- 11 -
same site as the manufacturing facilities; provided, however, that not more than
twenty-five percent (25%) of the net proceeds shall be used to provide such
ancillary facilities.
(d) No Other Issues. The Bonds are not being issued as part of an issue the
interest of which is exempt from federal income taxation under any other
provision of law other than Section 144(a) of the Code.
(e) Existing Capital Expenditures. The aggregate amount of capital
expenditures (as defined by Section 1.103-10(b)(2) of the Tax Regulations to
include any expenditure which was or could have been treated as a capital
expenditure under any rule or election under the Code) with respect to
facilities located in the same incorporated municipality as the Project, or
which are contiguous or integrated facilities, the principal user of which was
or is the Company or any Related Person, paid or incurred during the period
beginning three years before the date of issuance of the Bonds, and financed
otherwise than out of the Bond proceeds (not including investment earnings
thereon) and otherwise than out of the proceeds of other outstanding issues to
which Section 144(a)(2) of the Code applies, is $0.00.
(f) Bonds Outstanding. The aggregate face amount of all prior issues
outstanding as of the date of issuance of the Bonds (whether or not the issuer
of each issue is the same) to which Section 144(a) of the Code or Section
103(b)(6) of the Internal Revenue Code of 1954, as amended applies, the proceeds
of which were or will be used to any extent with respect to facilities located
in the same incorporated municipality as the incorporated municipality in which
the Project is located and the principal user of which is the Company or a
Related Person, is $4,500,000. The Company and, at the direction of the Company,
the Issuer, shall file any reports or statements and take any other action as
may be required from time to time with respect to the qualification of the Bonds
as an exempt small issue within the meaning of Section 144(a) of the Code.
(g) No Other Bonds for Common Facilities. There are no other bonds to which
Section 144(a) of the Code applies which, together with the Bonds, are to be
used with respect to (a) a single building, (b) an enclosed shopping mall, or
(c) a strip of offices, stores or warehouses, using substantial common
facilities with the Project or a portion thereof.
(h) Land. No portion of the Bond proceeds will be used directly or
indirectly for the acquisition of land or any interest therein to be used for
the purpose of farming and less than 25% of the Bond proceeds are or will be
used directly or indirectly for the acquisition of land to be used for purposes
other than farming.
(i) Commencement of Construction; First Users. The Borrower hereby
represents that the Borrower will not requisition any amounts from the proceeds
of the Bonds to pay costs incurred before the date of issuance of the Bonds and
paid more than 60 days prior to the date of "official action" of the Issuer
within the meaning of Section 142 of the Code, which took place on August 17,
1999. No person, firm or corporation who was a "substantial user" of the Project
(within the meaning described in such term under Section 144(a) of the Code)
before the date of issuance of the Bonds and who was or will be a "substantial
user" of the Project following its being placed in service, has received or will
receive, directly or indirectly, any proceeds from the issuance and sale of the
Bonds.
- 12 -
(j) Economic Life of Project. The Company hereby represents that the
weighted average maturity of the Bonds does not exceed 120% of the "average
reasonably expected economic life" of the components comprising the Project,
determined pursuant to Section 147(b) of the Code. The Company agrees that it
will not make any changes in the Project which would, at the time made, cause
120% of the "average reasonably expected economic life" of the components of the
Project, determined pursuant to Section 147(b) of the Code, to be less than the
"weighted average maturity" of the Bonds.
(k) Certificate of Information; Internal Revenue Service Form 8038. The
Company hereby represents that the information contained herein and in the
Company's Tax Certificate (attached to the Issuer's Non-Arbitrage Certificate)
delivered in connection with the issuance of the Bonds with respect to the
compliance with the requirements of Section 103 and Sections 141 through 150 of
the Code, including the information in Internal Revenue Service Form 8038
(excluding the issue number and the employer identification number of the
Issuer) filed by the Issuer with respect to the Bonds and the Project, is true
and correct in all material respects.
(l) Use by United States of America or Its Agencies. The Company has not
permitted and shall not permit the Project to be used or occupied other than as
a member of the general public in any manner for compensation by the United
States of America or an agency or instrumentality thereof, including any entity
with statutory authority to borrow from the United States of America (in any
case within the meaning of Section 149(b) of the Code) unless, with respect to
any future use of the Project, the Company shall deliver to the Trustee a
Favorable Opinion of Bond Counsel.
(m) Other Bonds. The Company agrees that during the period commencing on the
date of the issuance of the Bonds and ending 15 days thereafter, there shall be
issued no "private activity bonds," as defined in Section 141 of the Code, which
are guaranteed or otherwise secured by payments to be made by the Company or any
"related person" (or group of "related persons") unless the Company shall
deliver to the Trustee a Favorable Opinion of Bond Counsel in connection with
the issuance of such "private activity bonds". The Company represents that
except for the Company or any "related person" (or group of "related persons"),
no person has (i) guaranteed, arranged, participated in, assisted with or paid
any portion of the cost of the issuance of, the Bonds, and (ii) provided any
property or any franchise, trademark or trade name (within the meaning of
Section 1253 of the Code) which is to be used in connection with the Project.
(n) Limit on Amount of Bonds, Reports. The Company represents that on the
date of the issuance of the Bonds (i) obligations were not assumed, expenditures
were not made and outstanding obligations did not exist that will cause the
"aggregate face amount" of the Bonds as computed under the provisions of Section
144(a) and related sections of the Code to exceed $10,000,000, and (ii)
outstanding obligations did not exist that would cause the "aggregate face
amount" of the Bonds allocated to any "test-period beneficiary," as defined in
Section 144(a)(10) of the Code, when increased by such obligations as provided
in Section 144(a)(10) of the Code, to exceed $40,000,000. During the three-year
period beginning on the date of the issuance of the Bonds (or, in the case of
clause (ii) below, the date the Project is placed in service, unless the Company
provides to the Trustee an Opinion of Bond Counsel that such restriction is no
longer applicable), the Company shall not make any expenditure, assume any
obligation, permit the use of the Project by any person or take or permit other
action that would cause the "aggregate face amount" of the Bonds as computed
under the provisions of Section 144(a) and related sections of
- 13 -
the Code (i) to exceed $10,000,000 or such other maximum dollar amount then
permitted by the Code, or (ii) allocated to any "test-period beneficiary", when
increased by such obligations as provided in Section 144(a)(10) of the Code, to
exceed $40,000,000, and shall on the anniversary date of the issuance of the
Bonds until the third anniversary date of the issuance of the Bonds or the date
on which the Project is placed into service, whichever is later, file a report
with the Trustee setting forth all capital expenditures and bond issues used in
calculating such limits under Section 144(a) of the Code since the last report
received by the Trustee.
The Company and the Issuer shall file any reports or statements and take any
other action as may be required from time to time with respect to the
qualification of the Bonds as qualified small issue bonds within the meaning of
Section 144(a) of the Code.
(o) Election. The Issuer hereby elects to have the provisions of Section
144(a)(4) of the Code apply to the Bonds.
(p) Covenant to Maintain Tax Exemption. The Issuer and the Company hereby
covenant and agree on their own behalf that they shall not take any action,
cause any action to be taken, omit to take any action or cause any omission to
occur which would cause the interest on the Bonds to become includable in the
gross income of the recipients thereof for purposes of federal income taxation.
Section 3.9. Modification and Termination of Special Tax Covenants.
Subsequent to the issuance of the Bonds and prior to their payment in full (or
provision for the payment thereof having been made in accordance with the
provisions of the Indenture), neither this Agreement nor the Note may be
amended, changed, modified, altered or terminated except as permitted herein and
by the Indenture and with the written consent of the Company, the Trustee and
the Credit Provider. Subject to Article XI of the Indenture, the Issuer, the
Trustee, and the Company hereby agree to amend this Agreement to the extent
required or permitted, in the opinion of Bond Counsel, in order for interest on
the Bonds to be excluded from gross income for federal income tax purposes under
Section 103(a) of the Code. The party requesting such amendment shall notify the
other party to this Agreement and the Trustee of the proposed amendment, with a
copy of such requested amendment to Bond Counsel. To effect any such proposed
amendments, after review of such proposed amendment, Bond Counsel shall render
to the Trustee a Favorable Opinion of Bond Counsel.
Section 3.10. Arbitrage and Rebate.
(a) The Company acknowledges having read Section 5.09 of the Indenture and
agrees to perform all duties imposed upon it by such Sections. Insofar as said
Sections or any other sections of the Indenture expressly or implicitly impose
duties and responsibilities on the Company, they are specifically incorporated
herein by reference.
(b) Neither the Company nor the Issuer shall (i) take or omit to take any
action, or approve, the making by the Company of any investment or use of any
proceeds of the Bonds or any other moneys within their respective control
(including without limitation the proceeds of any insurance or any condemnation
award with respect to the Project), or the taking or omission of any other
action, which would cause the Bonds to be "arbitrage bonds" within the meaning
of
- 14 -
Section 148 of the Code, or (ii) approve the use of any proceeds from the sale
of the Bonds otherwise than in accordance with this Agreement or the
Non-Arbitrage Certificate, barring any unforeseen circumstances, in which event,
the Company and the Issuer shall use such proceeds with due diligence and shall
otherwise comply with this Agreement. Without limiting the generality of the
foregoing, the Company shall at its sole expense take all action required under
Section 148 of the Code and Treasury Regulations thereunder to prevent loss of
the exclusion of the interest on the Bonds from gross income of the owners
thereof for Federal income tax purposes under such Section, including but not
limited to paying on behalf of the Issuer the "rebatable arbitrage amount" to
the United States of America in accordance with the requirements set forth in
the related Treasury Regulations and complying with the requirements of Section
5.09 of the Indenture and this Section, including making the calculations and
deposits required therein (with all such calculations to be supplied to the
Issuer). The Company shall also comply with any similar requirements contained
in any Treasury Regulations adopted in place of the existing Treasury
Regulations and all other requirements of any such Treasury Regulations, to the
extent applicable to the Bonds. The Company shall maintain or cause to be
maintained records of any such rebate calculations for six (6) years after
retirement of the Bonds.
(c) Nothing contained in this Agreement or in the Indenture shall be
interpreted or construed to require the Issuer to pay the Rebate Amount, such
obligations being the sole responsibility of the Company.
ARTICLE IV
LOAN PROVISIONS;
SUBSTITUTE CREDIT FACILITY
Section 4.1. Loan of Proceeds. The Issuer agrees, upon the terms and
conditions contained in this Agreement and the Indenture, to lend to the Company
the proceeds received by the Issuer from the sale of the Bonds, and the Company
hereby borrows the same from the Issuer as evidenced by this Agreement and the
execution and delivery of the Note to the Issuer. Such proceeds shall be
disbursed as provided in Sections 3.2 and 3.4 hereof.
Section 4.2. Amounts Payable.
(a) The Company hereby covenants and agrees to repay the loan, as follows:
on or before any Interest Payment Date for the Bonds or any other date that any
payment of interest, premium, if any, or principal or Purchase Price is required
to be made in respect of the Bonds pursuant to the Indenture, until the
principal of, premium, if any, and interest on the Bonds shall have been fully
paid or provision for the payment thereof shall have been made in accordance
with the Indenture, in immediately available funds, a sum which, together with
any other moneys available for such payment in any account of the Bond Fund,
will enable the Trustee to pay the amount payable on such date as Purchase Price
or principal of (whether at maturity or upon redemption or acceleration or
otherwise), premium, if any, and interest on the Bonds as provided in the
Indenture; provided, however, that the obligation of the Company to make any
payment hereunder shall be deemed satisfied and discharged to the extent of the
corresponding payment made by the Credit Provider to the Trustee under the
Credit Facility. The Company covenants to make all payments on the Note, as and
when the same become due.
- 15 -
It is understood and agreed that all payments payable by the Company under
subsection (a) of this Section and under the Note are assigned by the Issuer to
the Trustee for the benefit of the Owners of the Bonds. The Company assents to
such assignment. The Issuer hereby directs the Company and the Company hereby
agrees to pay to the Trustee at the Principal Office of the Trustee all payments
payable by the Company pursuant to this subsection.
(b) The Company will also pay the reasonable expenses of the Issuer related
to the issuance of the Bonds.
(c) The Company will also pay the reasonable fees and expenses of the
Trustee under the Indenture and all other amounts which may be payable to the
Trustee under Section 10.02 of the Indenture, such amounts to be paid directly
to the Trustee for the Trustee's own account as and when such amounts become due
and payable.
(d) The Company covenants, for the benefit of the Owners of the Bonds, to
pay or cause to be paid, to the Trustee, such amounts as shall be necessary to
enable the Trustee to pay the Purchase Price of Bonds delivered to it for
purchase, all as more particularly described in Sections 4.01 and 4.02 of the
Indenture; provided, however, that the obligation of the Company to make any
such payment under this subsection (d) shall be reduced by the amount of moneys
available for such payment described in subsection (a) of Section 4.03 of the
Indenture; and provided, further, that the obligation of the Company to make any
payment under this subsection (d) shall be deemed to be satisfied and discharged
to the extent of the corresponding payment made by the Credit Provider under the
Credit Facility.
(e) In the event the Company should fail to make any of the payments
required in this Section, the item or installment so in default shall continue
as an obligation of the Company until the amount in default shall have been
fully paid, and the Company agrees to pay the same with interest thereon, to the
extent permitted by law, from the date when such payment was due, at the rate of
interest borne by the Bonds.
Section 4.3. Obligations of Company Unconditional. The obligations of the
Company to make the payments required in Section 4.2 and under the Note and to
perform and observe the other agreements contained herein shall be absolute and
unconditional and shall not be subject to any defense or any right of setoff,
counterclaim or recoupment arising out of any breach by the Issuer or the
Trustee, of any obligation to the Company, whether hereunder or otherwise, or
out of any indebtedness or liability at any time owing to the Company by the
Issuer or the Trustee, and, until such time as the principal of, premium, if
any, and interest on the Bonds shall have been fully paid or provision for the
payment thereof shall have been made in accordance with the Indenture, the
Company (i) will not suspend or discontinue any payments provided for in Section
4.2 hereof, (ii) will perform and observe all other agreements contained in this
Agreement and (iii) except as otherwise provided herein, will not terminate the
Term of 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, eviction or constructive eviction, destruction of or
damage to the Project, the taking by eminent domain of title to or temporary use
of any or all of the Project, commercial frustration of purpose, any change in
the tax or other laws of the United States of America or of the State or any
political
- 16 -
subdivision of either thereof or any failure of the Issuer or the Trustee to
perform and observe any agreement, whether express or implied, or any duty,
liability or obligation arising out of or connected with this Agreement. Nothing
contained in this Section shall be construed to release the Issuer from the
performance of any of the agreements on its part herein contained, and in the
event the Issuer or the Trustee should fail to perform any such agreement on its
part, the Company may institute such action against the Issuer or the Trustee as
the Company may deem necessary to compel performance so long as such action does
not abrogate the obligations of the Company contained in the first sentence of
this Section.
Section 4.4. Substitute Credit Facility. Subject to the conditions set forth
in this Section 4.4, the Company may provide for the delivery to the Trustee of
a Substitute Credit Facility. The Company shall furnish written notice to the
Trustee, not less than twenty days prior to the Mandatory Purchase Date, (a)
notifying the Trustee that the Company is exercising its option to provide for
the delivery of a Substitute Credit Facility to the Trustee, (b) setting forth
the Mandatory Purchase Date (which shall in any event be an Interest Payment
Date) in connection with the delivery of such Substitute Credit Facility, which
shall in any event be not less than two Business Days prior to the expiration
date of the Credit Facility then in effect with respect to the Bonds, and (c)
instructing the Trustee to furnish notice to the Bondholders regarding the
Mandatory Purchase Date at least fifteen days prior to the Mandatory Purchase
Date, as more fully described in Section 4.01(b) of the Indenture and Exhibit B
thereto. Any Substitute Credit Facility shall be delivered to the Trustee prior
to any such Mandatory Purchase Date, and shall be effective on and after such
Mandatory Purchase Date, and shall expire on a date which is fifteen days after
an Interest Payment Date for the Bonds. On or before the date of such delivery
of a Substitute Credit Facility to the Trustee, the Company shall furnish to the
Trustee (a) a Favorable Opinion of Bond Counsel with respect to such Substitute
Credit Facility; (b) a written opinion of counsel to the Substitute Credit
Provider to the effect that the Substitute Credit Facility is a legal, valid,
binding and enforceable obligation of the Substitute Credit Provider in
accordance with its terms; and (c) the written consent of the Secretary of the
LGC as to the acceptance by the Trustee of the Substitute Credit Facility.
Notwithstanding the prior sentence, the consent of the Secretary of the LGC
shall not be necessary if the Trustee has received (i) if the Bonds are rated by
a Rating Agency, written evidence from such Rating Agency to the effect that
such Rating Agency has reviewed the proposed Substitute Credit Facility and that
the substitution of the proposed Substitute Credit Facility for the then current
Credit Facility will not, by itself, result in a permanent withdrawal of its
rating of the Bonds or a reduction of the then current rating of the Bonds, or
(ii) if the Bonds are not rated by a Rating Agency, written evidence that the
bank deposit obligations or other long-term debt of the bank or institution
issuing the proposed Substitute Credit Facility are rated by a Rating Agency at
least as high as the bank deposit obligations or other long-term debt of the
Credit Issuer as of the delivery date of the Substitute Credit Facility unless
the rating of the Credit Issuer's bank deposit obligations or other long term
debt is higher than such rating on the original delivery date in which case such
lower rating shall be the highest rating required of the Substitute Credit
Facility unless otherwise directed in writing by a Company Representative.
The Company shall require the Credit Facility Provider to provide to the
Trustee notice of and all necessary documents related to any extension of the
term of the Credit Facility at least thirty (30) days prior to the Credit
Facility Termination Date.
- 17 -
ARTICLE V
PREPAYMENT, PURCHASE AND REDEMPTION
Section 5.1. Prepayment, Purchase and Redemption. The Company shall have the
option to prepay its obligations hereunder at the times and in the amounts as
necessary to exercise its option to cause the Bonds to be redeemed or defeased
as set forth in the Indenture and in the Bonds. The Company hereby agrees that
it shall prepay its obligations hereunder at the times and in the amounts as
necessary to accomplish the purchase and the mandatory redemption of the Bonds
as set forth in the Indenture and in the Bonds. The Issuer, at the request of
the Company, shall forthwith take all steps (other than the payment of the money
required for such redemption) necessary under the applicable redemption
provisions of the Indenture to effect redemption of all or part of the
Outstanding Bonds, as may be specified by the Company, on the date established
for such redemption.
ARTICLE VI
SPECIAL COVENANTS
Section 6.1. No Warranty of Condition or Suitability by Issuer. THE ISSUER
MAKES NO WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE PROJECT OR THE CONDITION
THEREOF, OR THAT THE PROJECT IS SUITABLE FOR THE PURPOSES OR NEEDS OF THE
COMPANY. THE ISSUER MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED,
THAT THE COMPANY WILL HAVE QUIET AND PEACEFUL POSSESSION OF THE PROJECT. THE
ISSUER MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO
THE MERCHANTABILITY, CONDITION OR WORKMANSHIP OF ANY PART OF THE PROJECT OR ITS
SUITABILITY FOR THE COMPANY'S PURPOSES.
Section 6.2. Access to the Project. The Company agrees that the Issuer, the
Credit Provider, the Trustee and their duly authorized agents, attorneys,
experts, engineers, accountants and representatives shall have the right to
inspect the Project at all reasonable times and on reasonable notice. The
Issuer, the Credit Provider, the Trustee and their duly authorized agents shall
also be permitted, at all reasonable times and upon reasonable notice, to
examine the books and records of the Company with respect to the Project.
Section 6.3. Further Assurances and Corrective Instruments. The Issuer and
the Company agree that they will, from time to time, execute, acknowledge and
deliver, or cause to be executed, acknowledged and delivered, such supplements
hereto and such further instruments as may reasonably be required for carrying
out the expressed intention of this Agreement.
Section 6.4. Issuer and Company Representatives. Whenever under the
provisions of this Agreement the approval of the Issuer or the Company is
required or the Issuer or the Company is required to take some action at the
request of the other, such approval or such request shall be given for the
Issuer by an Issuer Representative and for the Company by a
- 18 -
Company Representative. The Trustee shall be authorized to act on any such
approval or request.
Section 6.5. Financing Statements. The Company agrees to execute and file or
cause to be executed and filed any and all financing statements or amendments
thereof or continuation statements necessary to perfect and continue the
perfection of the security interests granted in the Indenture. The Company shall
pay all costs of filing such instruments.
Section 6.6. Covenant to Provide Continuing Disclosure. The Company hereby
covenants and agrees that, upon the exercise by the Company of the Conversion
Option to elect a Long Term Period or a Commercial Paper Period, the Company
shall enter into a written undertaking for the benefit of the holders of the
Bonds, as required by Section (b)(5)(i) of Securities and Exchange Commission
Rule 15c2-12 under the Securities Exchange Act of 1934, as amended (17 CFR Part
240, ss. 240.15c2-12) (the "Rule"); provided, however, that the Company shall
not be obligated to enter into such written undertaking if the Company shall
furnish to the Trustee, prior to the exercise of the Conversion Option, an
opinion of Bond Counsel that, notwithstanding such election by the Company, the
Rule is not applicable to the Bonds.
Section 6.7. Annual Report of Outstanding Bonds. Promptly after each June 30
during the Term of the Agreement, the Company shall notify the LGC and the
Issuer, by first-class mail, of the aggregate principal amount of the Bonds
Outstanding at the close of business on such June 30.
Section 6.8. Notice of Control. The Company shall provide written notice to
the Trustee and the Remarketing Agent thirty (30) days prior to the consummation
of any transaction that would result in the Company controlling the Credit
Provider or being controlled by the Credit Provider within the meaning of
Section 2(a)(9) of the Investment Company Act of 1940.
ARTICLE VII
ASSIGNMENT, SELLING, LEASING; INDEMNIFICATION
MERGER OR ASSET SALE, MAINTENANCE AND REPAIR, TAXES
Section 7.1. Assignment, Selling and Leasing. This Agreement may be assigned
and the Project may be sold or leased, as a whole or in part, with the prior
written consent of the Trustee, the Credit Provider and the LGC, but without the
necessity of obtaining the consent of the Issuer; provided, however, that no
such assignment, sale or lease shall, in the opinion of Bond Counsel, result in
interest on any of the Bonds becoming includable in gross income for federal
income tax purposes, or shall otherwise violate any provisions of the Act;
provided further, however, that no such assignment, sale or lease shall relieve
the Company of any of its obligations under this Agreement.
This Agreement may be assigned and the Project may be sold or leased, as a
whole or in part, and the Company released of all obligations under this
Agreement and the Indenture, with the prior written consent of the Issuer, the
Trustee, and the LGC, if (i) such assignee, lessee or purchaser assumes the
Company's obligations hereunder in writing, (ii) the Credit Provider
- 19 -
consents in writing to such assignment, sale and/or lease and the release of the
Company hereunder (or, if no Credit Facility is in effect at the time of such
assignment, lease or sale, the Owners of a majority in aggregate principal
amount of the Bonds then Outstanding consent in writing to such assignment, sale
(or lease) and release), and (iii) prior to any assignment, lease or sale
pursuant to this Section, the Company shall have caused to be delivered to the
Issuer, the Trustee, the LGC and the Credit Provider, if any, an opinion of Bond
Counsel, satisfactory in form and substance to each of them, to the effect that
such assignment, sale (or lease) and release will not cause interest on the
Bonds to be includable in the gross income of the Owners of the Bonds for
purposes of federal income taxation. Upon the release of all of the Company's
duties and obligations under the provisions of this Section as provided above,
the Trustee may execute a release of the Company from its obligations hereunder
and under the Indenture and all references to the "Company" in this Agreement,
the Indenture and the Bonds shall mean the assignee, lessee or purchaser, as
applicable.
Section 7.2. Release and Indemnification . The Company shall at all times
protect, indemnify and hold harmless the Trustee, the Issuer, the Governing
Body, the LGC and their respective directors, members, officers, attorneys,
agents and employees against any and all liability, losses, damages, costs,
expenses, taxes, causes of action, suits, claims, demands and judgments of any
nature arising from or in connection with the Project or the financing of the
Project, including, without limitation, all claims or liability resulting from,
arising out of or in connection with the acceptance or administration of the
Bond Documents or the trusts thereunder or the performance of duties under the
Bond Documents or any loss or damage to property or any injury to or death of
any person that may be occasioned by any cause whatsoever pertaining to the
Project or the use thereof, including without limitation any lease thereof or
assignment of its interest in this Agreement, such indemnification to include
the reasonable costs and expenses of defending itself or investigating any claim
of liability and other reasonable expenses and attorneys' fees incurred by the
Issuer, the Trustee, the Governing Body, the LGC and their respective directors,
members, officers, attorneys, agents and employees in connection therewith,
provided that the benefits of this Section shall not inure to any person other
than the Issuer, the Governing Body, the LGC, the Trustee and their respective
directors, members, officers, attorneys, agents and employees, and provided
further that such loss, damage, death, injury, claims, demands or causes shall
not have resulted from the gross negligence or willful misconduct of, the
Issuer, the Trustee or such director, member, officer, attorneys, agent or
employee. The obligations of the Company under this Section shall survive the
termination of this Agreement and the Indenture. Notwithstanding any other
provision of this Agreement or the Indenture to the contrary, the Company agrees
(i) not to assert any claim or institute any action or suit against the Trustee
or its employees arising from or in connection with any investment of funds made
by the Trustee in good faith as directed by a Company Representative, and (ii)
to indemnify and hold harmless the Trustee and its employees against any
liability, losses, damages, costs, expenses, causes of action, suits, claims,
demands and judgments of any nature arising from or in connection with any such
investment. In addition, the Issuer shall have the right, in the event of a suit
against the Issuer, to hire its own counsel, and the Company shall indemnify the
Issuer for the costs thereof.
- 20 -
Section 7.3. Indemnity Against Claims. The Company will pay and discharge
and will indemnify and hold harmless the Issuer, the Governing Body, the LGC and
the Trustee, and their respective officers, employees and agents, from any
taxes, assessments, impositions and other charges in respect of the Project. If
any such claim is asserted, or any such lien or charge upon payments, or any
such taxes, assessments, impositions or other charges, are sought to be imposed,
the Issuer, the Governing Body or the LGC, as the case may be, will give prompt
written notice to the Company and the Trustee; provided, however, that the
failure to provide such notice will not relieve the Company of the Company's
obligations and liability under this Section and will not give rise to any claim
against or liability of the Issuer or the Trustee. The Company shall have the
sole right and duty to assume, and shall assume, the defense thereof, with
counsel selected by the Company and reasonably acceptable to the person on
behalf of which the Company undertakes a defense, with full power to litigate,
compromise or settle the same in its sole discretion.
Section 7.4. Issuer to Grant Security Interest to Trustee. The parties
hereto agree that pursuant to the Indenture, the Issuer shall assign to the
Trustee, in order to secure payment of the Bonds, all of the Issuer's right,
title and interest in and to this Agreement and the Note, except for the
Reserved Rights.
Section 7.5. Maintenance of Existence; Merger; Asset Transfer. So long as a
Credit Facility is in effect the Company agrees that it will maintain its
existence, will not dissolve or otherwise dispose of all or substantially all of
its assets and will not consolidate with or merge into another corporation or
permit one or more other corporations to consolidate with or merge into it,
except either with the consent of the Credit Issuer or as provided in the Credit
Agreement; if a Credit Facility is not in effect, the Company agrees that it
will continue to be a corporation organized under the laws of the State of North
Carolina, 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 foregoing, consolidate with or merge into another corporation, or
permit one or more corporations to consolidate with or merge into it, or
transfer all or substantially all of its assets to another such corporation (and
thereafter dissolve or not dissolve, as the Company may elect) if the
corporation surviving such merger or resulting from such consolidation, or the
corporation to which all or substantially all of the assets of the Company are
transferred, as the case may be: (i) is a corporation organized under the laws
of the United States of America, or any state, district or territory thereof,
and qualified to do business in the State; (ii) shall expressly in writing
assume all of the obligations of the Company contained in this Agreement; (iii)
has a consolidated tangible net worth (after giving effect to such
consolidation, merger or transfer) of not less than the consolidated tangible
net worth of the Company and its consolidated subsidiaries immediately prior to
such consolidation, merger or transfer; (iv) shall notify each person identified
in Section 9.2 hereof of the name and address of such corporation surviving such
merger or resulting from such consolidation, or the corporation to which all or
substantially all of the assets of the Company are transferred; and (v) provided
that no Default has occurred and is continuing hereunder.
The term "consolidated tangible net worth," as used in this Section, shall
mean the difference obtained by subtracting total consolidated liabilities (not
including as a liability any
- 21 -
capital or surplus item) from total consolidated tangible assets of the Company
and all of its consolidated subsidiaries, computed in accordance with generally
accepted accounting principles. Prior to any such consolidation, merger or
transfer the Trustee shall be furnished a certificate from the chief financial
officer of the Company or his/her deputy stating that in the opinion of such
officer none of the covenants in this Agreement will be violated as a result of
said consolidation, merger or transfer.
Section 7.5. Company's Obligations to Maintain and Repair. The Company
agrees that during the term of this Agreement it will keep and maintain the
Project in good condition, repair and working order, ordinary wear and tear
excepted, at its own cost, and will make or cause to be made from time to time
all necessary repairs thereto (including external and structural repairs) and
renewals and replacements thereto.
Section 7.6. Taxes and Other Charges. (a) The Company will promptly pay and
discharge or cause to be promptly paid and discharged, as the same become due,
all taxes, assessments, governmental charges or levies and all utility and other
charges incurred in the operation, maintenance, use, occupancy and upkeep of the
Project imposed upon it or in respect of the Project before the same shall
become in default, as well as all lawful claims which, if unpaid, might become a
lien or charge upon such property and assets or any part thereof, except such
that are contested in good faith by the Company for which the Company has
maintained adequate reserves satisfactory to the Credit Provider, or in the
absence of any Credit Provider, satisfactory to the Issuer and the Trustee.
(b) The Company shall furnish the Issuer and the Trustee, upon request, with
proof of payment of any taxes, governmental charges, utility charges, insurance
premiums or other charges required to be paid by the Company under this
Agreement.
Section 7.7. Damage, Destruction or Loss of Property; Obligation to Rebuild;
Use of Insurance Proceeds and Condemnation Awards. If prior to full payment of
all Bonds (or provision for payment thereof having been made in accordance with
the provisions of the Indenture), the Project, or any part or component of the
Project shall be damaged or destroyed, by whatever cause, or shall be taken by
any public authority or entity in the exercise of or acquired under the threat
of the exercise of its power of eminent domain, there shall be no abatement or
reduction in the loan repayment obligations payable under this Agreement, and
the Company will apply any insurance proceeds or condemnation awards resulting
from claims for such losses or takings as provided in this Section.
If prior to full payment of all Bonds (or provision for payment thereof
having been made in accordance with the provisions of the Indenture), the
Project, or any part or component of the Project shall be damaged, destroyed, or
the Project or any part or component of the Project, the Project Site shall be
taken by eminent domain or the threat of exercise of eminent domain, the Company
shall promptly give, or cause to be given, written notice thereof to the Issuer,
the Bank and the Trustee. All proceeds received from such property insurance
with respect to the Project and all condemnation awards with respect to the
Project shall be deposited with the Trustee to the credit of the Project Fund.
Following the occurrence of such an event with respect to the Project, the
Company shall have the option of (1) continuing to pay all amounts payable
hereunder and to the extent permitted below proceeding promptly to repair,
rebuild, restore or replace the property
- 22 -
damaged, destroyed or taken, with such changes, alterations and modifications
(including the substitution and addition of other property) as may be desired by
the Company and, with respect to the Project, and as will comply with the
limitations contained in this Agreement, and the Trustee will deposit such
proceeds to the credit of the Project Fund and make such disbursements
therefrom, in accordance with Section 3.3 hereof, as may be necessary to pay the
cost of such repair, rebuilding or restoration, either on completion thereof or
as the work progresses or (2) requesting the Issuer to cause the Bonds to be
redeemed in accordance with the terms of the Indenture.
ARTICLE VIII
DEFAULTS AND REMEDIES
Section 8.1. Defaults Defined. The following shall be "Defaults" under this
Agreement and the term "Default" shall mean, whenever it is used in this
Agreement, any one or more of the following events:
(a) Failure by the Company to pay any amount required to be paid under
subsection (a) or (d) of Section 4.2 hereof.
(b) Failure by the Company to observe and perform any covenant, condition or
agreement on its part to be observed or performed, other than as referred to in
Section 8.1(a), for a period of thirty (30) days after written notice specifying
such failure and requesting that it be remedied shall have been given to the
Company by the Issuer or the Trustee, unless the Issuer and the Trustee shall
agree in writing to an extension of such time prior to its expiration; provided,
however, if the failure stated in the notice cannot be corrected within the
applicable period, the Issuer and the Trustee will not unreasonably withhold
their consent to an extension of such time if corrective action is instituted by
the Company within the applicable period and diligently pursued until such
failure is corrected.
(c) The dissolution or liquidation of the Company, except as authorized by
Section 7.5 hereof, or the voluntary initiation by the Company of any proceeding
under any federal or state law relating to bankruptcy, insolvency, arrangement,
reorganization, readjustment of debt or any other form of debtor relief, or the
initiation against the Company of any such proceeding which shall remain
undismissed for sixty (60) days, or failure by the Company to promptly have
discharged any execution, garnishment or attachment of such consequence as would
impair the ability of the Company to carry on its operations at the Project, or
assignment by the Company for the benefit of creditors, or the entry by the
Company into an agreement of composition with its creditors or the failure
generally by the Company to pay its debts as they become due.
(d) The occurrence of a Default under the Indenture.
The provisions of subsection (b) of this Section are subject to the
following limitation: if by reason of force majeure the Company is unable in
whole or in part to carry out any of its agreements contained herein (other than
its obligations contained in Article IV hereof), the Company shall not be deemed
in Default during the continuance of such inability. The term "force majeure" as
used herein shall mean, without limitation, the following: acts of God;
- 23 -
strikes or other industrial disturbances; acts of public enemies; orders or
restraints of any kind of the government of the United States of America or of
the State or of any of their departments, agencies or officials, or of any civil
or military authority; insurrections; riots; landslides; earthquakes; fires;
storms; droughts; floods; explosions; breakage or accident to machinery,
transmission pipes or canals; and any other cause or event not reasonably within
the control of the Company. The Company agrees, however, to remedy with all
reasonable dispatch the cause or causes preventing the Company from carrying out
its agreement, provided that the settlement of strikes and other industrial
disturbances shall be entirely within the discretion of the Company and the
Company shall not be required to settle strikes, lockouts and other industrial
disturbances by acceding to the demands of the opposing party or parties when
such course is in the judgment of the Company unfavorable to the Company.
Section 8.2. Remedies on Default. Whenever any Default shall have happened
and be continuing, the Trustee, or the Issuer with the written consent of the
Trustee, may take one or any combination of the following remedial steps:
(a) If the Trustee has declared the Bonds immediately due and payable
pursuant to Section 9.02 of the Indenture, by written notice to the Company,
declare an amount equal to all amounts then due and payable on the Bonds,
whether by acceleration of maturity (as provided in the Indenture) or otherwise,
to be immediately due and payable as liquidated damages under this Agreement and
not as a penalty, whereupon the same shall become immediately due and payable;
(b) Have reasonable access to and inspect, examine and make copies of the
books and records and any and all accounts, data and income tax and other tax
returns of the Company during regular business hours of the Company if
reasonably necessary in the opinion of the Trustee; or
(c) Take whatever action at law or in equity may appear necessary or
desirable to collect the amounts then due and thereafter to become due, or to
enforce performance and observance of any obligation, agreement or covenant of
the Company under this Agreement.
Any amounts collected pursuant to action taken under this Section shall be
paid into the Bond Fund and applied in accordance with the provisions of the
Indenture.
Section 8.3. No Remedy Exclusive. Subject to Section 9.02 of the Indenture,
no remedy herein conferred upon or reserved to the Issuer or the Trustee is
intended to be exclusive of any other available remedy or remedies, but each and
every such remedy shall be cumulative and shall be in addition to every other
remedy given under this Agreement or now or hereafter existing at law or in
equity. No delay or omission to exercise any right or power accruing upon any
Default shall impair any such right or power or shall be construed to be a
waiver thereof, but any such right or power may be exercised from time to time
and as often as may be deemed expedient. In order to entitle the Issuer or the
Trustee to exercise any remedy reserved to it in this Article, it shall not be
necessary to give any notice, other than such notice as may be required in this
Article. Such rights and remedies as are given the Issuer hereunder shall also
extend to the Trustee, and the Trustee and the Owners of the Bonds, subject to
the provisions of the Indenture, shall be entitled to the benefit of all
covenants and agreements herein contained.
- 24 -
Section 8.4. Agreement to Pay Attorneys' Fees and Expenses. In the event the
Company should default under any of the provisions of this Agreement and the
Issuer should employ attorneys or incur other expenses for the collection of
payments required hereunder or the enforcement of performance or observance of
any obligation or agreement on the part of the Company herein contained, the
Company agrees that it will on demand therefor pay to the Issuer the reasonable
fees of such attorneys and such other expenses so incurred by the Issuer.
Section 8.5. No Additional Waiver Implied by One Waiver. In the event any
agreement contained in this Agreement should be breached by either party and
thereafter waived by the other party, such waiver shall be limited to the
particular breach so waived and shall not be deemed to waive any other breach
hereunder.
ARTICLE IX
MISCELLANEOUS
Section 9.1. Term of Agreement. This Agreement shall remain in full force
and effect from the date here of to and including April 1, 2015 or until such
time as all of the Bonds and the fees and expenses of the Issuer and the Trustee
and all amounts payable to the Credit Provider under the Credit Agreement shall
have been fully paid or provision made for such payments, whichever is later;
provided, however, that this Agreement may be terminated prior to such date
pursuant to Article V of this Agreement, but in no event before all of the
obligations and duties of the Company hereunder have been fully performed,
including, without limitation, the payments of all costs and fees mandated
hereunder.
Section 9.2. Notices. All notices, certificates or other communications
hereunder shall be sufficiently given and shall be deemed given when delivered
or mailed by registered mail, postage prepaid, addressed as follows:
If to the Issuer: The ▇▇▇▇▇▇▇▇ County Industrial Facilities
and Pollution Control Financing Authority
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇ ▇▇▇▇▇▇▇▇▇
If to the Trustee: First-Citizens Bank & Trust Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
Mail Drop DAC61
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn.: Corporate Trust Department
If to the Company: Flanders Corporation
c/o Precisionaire, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
- 25 -
If to the Credit Provider: SunTrust Bank
Mail Code FL-Tampa-4206
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
If to the Remarketing Agent: SunTrust Equitable Securities Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Municipal Desk
If to the LGC: Local Government Commission
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Secretary
If to Moody's: ▇▇▇▇▇'▇ Investors Service, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Department, Structured
Finance Group
If to S&P: Standard & Poor's Corporation
▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Finance Department
A duplicate copy of each notice, certificate or other communication given
hereunder by the Issuer or the Company shall also be given to the Trustee and
the Credit Provider. The Issuer, the Company, the Trustee, and the Credit
Provider may, by written notice given hereunder, designate any further or
different addresses to which subsequent notices, certificates or other
communications shall be sent.
Section 9.3. Binding Effect. This Agreement shall inure to the benefit of
and shall be binding upon the Issuer, the Company, the Credit Provider, the
Trustee, the Owners of Bonds and their respective successors and assigns.
Section 9.4. Severability. In the event any provision of this Agreement
shall be held invalid or unenforceable by any court of competent jurisdiction,
such holding shall not invalidate or render unenforceable any other provision
hereof.
Section 9.5. Amounts Remaining in Funds. Subject to the provisions of
Section 6.11 of the Indenture, it is agreed by the parties hereto that any
amounts remaining in any account of the Bond Fund, or any other fund (other than
the Rebate Fund) created under the Indenture upon expiration or earlier
termination of this Agreement, as provided in this Agreement, after payment in
full of the Bonds (or provision for payment thereof having been made in
accordance with the provisions of the Indenture) and the fees and expenses of
the Trustee in accordance with the
- 26 -
Indenture, shall belong to and be paid to the Company by the Trustee.
Section 9.6. No Liability of Issuer; No Charge Against Issuer's Credit. Any
obligation of the Issuer created by, arising out of, or entered into in
contemplation of this Agreement, including the Bonds, shall not impose a debt or
pecuniary liability upon the Issuer, the State or any political subdivision
thereof or constitute a charge upon the general credit or taxing powers of any
of the foregoing. Any such obligation shall be payable solely out of the
revenues and any other moneys derived hereunder and under the Indenture and the
Credit Facility, except (as provided in the Indenture and in this Agreement) to
the extent it shall be paid out of moneys attributable to the proceeds of the
Bonds or the income from the temporary investment thereof.
The principal of, premium, if any, and interest on the Bonds shall be
payable solely from the funds pledged for their payment in accordance with the
Indenture and from payments made pursuant to the Credit Facility.
THE BONDS AND THE INTEREST THEREON AND REDEMPTION PREMIUM, IF ANY, SHALL NOT
BE DEEMED TO CONSTITUTE A DEBT OR A PLEDGE OF THE FAITH AND CREDIT OF THE STATE
OF NORTH CAROLINA OR ANY POLITICAL SUBDIVISION THEREOF, INCLUDING, WITHOUT
LIMITATION, THE ISSUER AND ▇▇▇▇▇▇▇▇ COUNTY, NORTH CAROLINA. NEITHER THE STATE OF
NORTH CAROLINA NOR ANY POLITICAL SUBDIVISION THEREOF, INCLUDING, WITHOUT
LIMITATION, THE ISSUER AND ▇▇▇▇▇▇▇▇ COUNTY, NORTH CAROLINA, SHALL BE OBLIGATED
TO PAY THE PRINCIPAL OF OR PREMIUM, IF ANY, OR INTEREST ON THE BONDS OR OTHER
COSTS INCIDENT THERETO EXCEPT FROM THE REVENUES ASSIGNED AND PLEDGED THEREFOR,
AND NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF NORTH
CAROLINA OR ANY POLITICAL SUBDIVISION THEREOF, INCLUDING, WITHOUT LIMITATION,
THE ISSUER AND ▇▇▇▇▇▇▇▇ COUNTY, IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR
PREMIUM, IF ANY, OR INTEREST ON THE BONDS OR OTHER COSTS INCIDENT THERETO. THE
ISSUER HAS NO TAXING POWER.
Section 9.7. If Performance Date Not a Business Day. If the last date for
performance of any act or the exercising of any right, as provided in this
Agreement, shall not be a Business Day, such payment may be made or act
performed or right exercised on the next succeeding Business Day.
Section 9.8. Amendments, Changes and Modifications. Subsequent to the
issuance of Bonds and prior to their payment in full (or provision for the
payment thereof having been made in accordance with the provisions of the
Indenture), and except as otherwise herein expressly provided, this Agreement
may not be effectively amended, changed, modified, altered or terminated without
the written consent of the Trustee and, prior to the Credit Facility Termination
Date and payment of all amounts payable to the Credit Provider under the Credit
Agreement, the consent of the Credit Provider, and otherwise in accordance with
the provisions of the Indenture.
- 27 -
Section 9.9. Execution in Counterparts. This Agreement may be simultaneously
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.
Section 9.10. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State.
Section 9.11. Captions. The captions and headings in this Agreement are for
convenience only and in no way define, limit or describe the scope or intent of
any provisions or Sections of this Agreement.
Section 9.12. No Third Party Beneficiary. It is specifically agreed between
the parties executing this Agreement that it is not intended by any of the
provisions of any part of this Agreement to establish in favor of the public or
any member thereof, other than as expressly provided herein or as contemplated
in the Indenture, the rights of a third-party beneficiary hereunder, or to
authorize anyone not a party to this Agreement to maintain a suit for personal
injuries or property damage pursuant to the terms or provisions of this
Agreement. The duties, obligations and responsibilities of the parties to this
Agreement with respect to third parties shall remain as imposed by law.
- 28 -
IN WITNESS WHEREOF, the Issuer has caused this Agreement to be executed in
its name and attested by its duly authorized officers, and the Company has
caused this Agreement to be executed in its name and attested by its duly
authorized officers, all as of the date first above written.
(SEAL) THE ▇▇▇▇▇▇▇▇ COUNTY INDUSTRIAL
FACILITIES AND POLLUTION CONTROL
FINANCING AUTHORITY
Attest: By:______________________________
Chairman
By:________________________
Secretary
(SEAL) FLANDERS CORPORATION
Attest: By:______________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
By: _____________________
▇▇▇▇▇ ▇▇▇▇, Secretary
- 29 -
EXHIBIT A
DESCRIPTION OF PROJECT
The project consists of the construction and equipping of a facility for the
recycling of waste industrial glass into spun glass fiber. The facility will be
constructed on the site of the Company's existing manufacturing facility.
A-1